Ivy Funds NCSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6569

Ivy Funds, Inc.

(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

(Address of principal executive offices) (Zip code)

Kristen A. Richards
6300 Lamar Avenue
Overland Park, Kansas 66202

(Name and address of agent for service)

Registrant's telephone number, including area code:		913-236-2000
Date of fiscal year end:	March 31, 2003
Date of reporting period:	September 30, 2003

ITEM 1. REPORTS TO STOCKHOLDERS.

Ivy Funds

Asset Strategy Fund
Core Equity Fund
High Income Fund
International Growth Fund
Large Cap Growth Fund
Limited-Term Bond Fund
Mid Cap Growth Fund
Money Market Fund
Municipal Bond Fund
Science and Technology Fund
Small Cap Growth Fund
Tax-Managed Equity Fund

Semiannual Report
September 30, 2003

CONTENTS


3		President's Letter
5		Asset Strategy Fund
22		Core Equity Fund
35		High Income Fund
56		International Growth Fund
70		Large Cap Growth Fund
83		Limited-Term Bond Fund
98		Mid Cap Growth Fund
113		Money Market Fund
124		Municipal Bond Fund
140		Science and Technology Fund
153		Small Cap Growth Fund
168		Tax-Managed Equity Fund
179		Notes to Financial Statements
206		Independent Auditors' Report

This report is submitted for the general information of the shareholders of Ivy Funds, Inc. It is not authorized for distribution to prospective investors unless accompanied with or preceded by the Ivy Funds, Inc. current prospectus and current Fund performance information.

President's Letter

September 30, 2003

Dear Shareholder

Enclosed is our report on your Fund's operations for the six months ended September 30, 2003.

Over the last six months, we've seen considerable improvement in the U.S. economy. The conclusion of the war with Iraq and an unprecedented amount of fiscal and monetary stimulus resulted in two quarters of surprisingly strong economic growth. And while weakness in the labor market remained a problem, the addition of 57,000 new jobs in September - the first increase in eight months - was an encouraging sign.

A number of notable events occurred during the period. In May, President Bush signed the Jobs and Growth Tax Relief Reconciliation Act of 2003 into law, which accelerated income tax reductions, provided parents with advance payments of child-tax credits and offered benefits for investors through reduced dividend and capital gains tax rates. In June, the Federal Reserve Board cut interest rates to 1 percent, a 45-year low, and left them unchanged for the remainder of the period. In addition, government spending increased, while corporate capital spending turned positive after two years of contraction.

All of these factors had a positive effect on the stock market, which showed significant gains for the period. For the last six months, the S&P 500 Index increased 18.46 percent, while the NASDAQ Composite Index increased an impressive 33.24 percent. The Dow Jones Industrial Average had a slightly lower return of 17.39 percent for the same period. Despite heightened volatility over the summer, bonds also showed positive returns during the period, with the Citigroup Broad Investment Grade Index increasing 2.39 percent.

Going forward, we believe that the prospects for a sustainable economic recovery appear favorable. While the ongoing occupation of Iraq could present problems, we think an accommodative monetary policy, strong fiscal stimulus and a brighter corporate earnings outlook have the potential to lend support for increased capital spending, a sustained improvement in job creation and positive returns in the stock market.

Whichever way the market turns, we firmly believe that the best way to achieve your long-term financial goals is to develop and maintain a personal financial plan. In our experience, investors who adhere to a structured and consistent investment program can often avoid common investment mistakes, take advantage of new opportunities and better prepare for market uncertainties.

It's also important to keep in mind that while markets change, the basic principles of investing do not. Diversifying your portfolio, maintaining a long-term perspective and periodically reviewing your asset allocation can help you manage market fluctuations and more effectively work toward your goals.

Your financial advisor can help you with these strategies and work with you to develop and maintain a customized investment plan based on your individual situation. Focusing on that plan, despite the swings of the market, may be your key to a sound financial future.

Thank you for your ongoing dedication and partnership.

Respectfully,

Henry J. Herrmann
President

The opinions expressed in this letter are those of the President of Ivy Funds, Inc. and are current only through the end of the period of the report as stated on the cover. The President's views are subject to change at any time based on market and other conditions and no forecasts can be guaranteed.

SHAREHOLDER SUMMARY OF ASSET STRATEGY FUND

GOAL

Asset Strategy Fund

To seek high total return over the long term.

Strategy

Invests in stocks, bonds and short-term instruments. Within each of these classes, the Fund may invest in both domestic and foreign securities.

Founded

1995

Scheduled Dividend Frequency

Quarterly (March, June, September and December)

Performance Summary - Class C Shares


Per Share Data
For the Six Months Ended September 30, 2003

Dividend paid	$0.01

Net asset value on
9-30-03	$11.71
3-31-03	11.17

Change per share	$ 0.54

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF ASSET STRATEGY FUND

Because of ongoing market volatility, the Fund's performance may be subject to substantial short-term fluctuation and current performance may be less than the results shown below. Please check the Ivy Funds website at www.ivyfunds.com for more current performance information.


Average Annual Total Return^(A)
	Class A		Class B
Period	With Sales Load^(B)	Without Sales Load^(C)	With CDSC^(D)	Without CDSC^(E)

1-year period ended 9-30-03	0.01%	6.11%	1.09%	5.09%
5-year period ended 9-30-03	-	-	-	-
10-year period ended 9-30-03	-	-	-	-
Since inception of Class^{^(F)}	-1.84%	-0.02%	-1.59%	-0.85%

(B)Performance data is based on deduction of 5.75% sales load on the initial purchase in the periods.

(C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)7-10-00 for Class A shares and 7-3-00 for Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^{^(B)}	Class Y^{^(C)}

1-year period ended 9-30-03	5.31%	6.07%
5-year period ended 9-30-03	6.65%	7.56%
10-year period ended 9-30-03	-	-
Since inception of Class^{^(D)}	7.00%	8.10%

(B)Performance data from 3-24-00 represents the actual performance of Class C shares. Performance data prior to 3-24-00 represents the performance of the Fund's original Class B shares. The original Class B shares were combined with Class C shares effective 3-24-00, and redesignated as Class C shares. The original Class B's performance has been adjusted to reflect the current contingent deferred sales charge (CDSC) structure applicable to Class C (1.00% maximum and declining to zero at the end of the first year after investment). Accordingly, these returns reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase. New Class B shares, with fees and expenses different from the original Class B shares, were added to the Fund on 6-30-00.

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)4-20-95 for Class C shares and 12-29-95 for Class Y shares (the date on which shares were first acquired by shareholders).

SHAREHOLDER SUMMARY OF ASSET STRATEGY FUND

Portfolio Highlights

On September 30, 2003, Asset Strategy Fund had net assets totaling $65,911,015 invested in a diversified portfolio of:


41.49%		Common Stocks
28.58%		Cash and Cash Equivalents, Unrealized Loss on Open Forward Currency Contracts and Options
11.28%		Bullion
8.14%		Corporate Debt Securities
5.60%		Other Government Securities
4.91%		United States Government Securities


As a shareholder of Asset Strategy Fund, for every $100 you had invested on September 30, 2003, your Fund owned:
	Common Stocks	$	41.49
	Cash and Cash Equivalents, Unrealized Loss on Open Forward Currency Contracts and Options	$	28.58
	Bullion	$	11.28
	Corporate Debt Securities	$	8.14
	Other Government Securities	$	5.60
	United States Government Securities	$	4.91

THE INVESTMENTS OF ASSET STRATEGY FUND

September 30, 2003


	Troy Ounces		Value

BULLION - 11.28%
Gold	19,287	$	7,433,023
(Cost: $6,387,441)


COMMON STOCKS	Shares


Aircraft - 1.03%
Lockheed Martin Corporation	7,400		341,510
Northrop Grumman Corporation	3,900		336,258
			677,768
Beverages - 1.18%
Coca-Cola Company (The)	18,100		777,576

Business Equipment and Services - 2.01%
Canon Inc. (A)	27,000		1,322,924

Chemicals - Petroleum and Inorganic - 0.70%
Goodrich Corporation	19,000		460,560

Construction Materials - 0.39%
CRH public limited company (A)	14,500		258,837

Cosmetics and Toiletries - 0.98%
Estee Lauder Companies Inc. (The), Class A	18,900		644,490

Electrical Equipment - 0.46%
W.W. Grainger, Inc.	6,300		299,565

Food and Related - 0.21%
American Italian Pasta Company, Class A*	3,600		139,284

Gold and Precious Metals - 2.32%
Barrick Gold Corporation	37,291		702,190
Placer Dome Inc.	60,292		829,015
			1,531,205
Health Care - Drugs - 2.07%
Abbott Laboratories	16,800		714,840
Pfizer Inc.	21,300		647,094
			1,361,934
Health Care - General - 1.11%
Wyeth	15,800		728,380

Hospital Supply and Management - 0.95%
Medtronic, Inc.	13,400		628,728

Household - General Products - 2.14%
Clorox Company (The)	15,300		701,811
Reckitt Benckiser plc (A)	35,300		709,933
			1,411,744
Motor Vehicles - 4.77%
AB Volvo, Class B (A)	26,000		600,756
Honda Motor Co., Ltd. (A)	30,600		1,227,460
Toyota Motor Corporation (A)	44,600		1,312,765
			3,140,981
Multiple Industry - 3.14%
Hutchison Whampoa Limited, Ordinary Shares (A)	101,000		736,855
Samsung Electronics Co., Ltd. (A)	3,920		1,336,034
			2,072,889
Petroleum - Canada - 0.41%
Nabors Industries Ltd.*	7,200		268,272

Petroleum - Domestic - 2.96%
Anadarko Petroleum Corporation	18,441		770,096
Burlington Resources Inc.	18,858		908,955
Patterson-UTI Energy, Inc.*	10,100		273,457
			1,952,508
Petroleum - International - 1.27%
Exxon Mobil Corporation	22,853		836,420

Petroleum - Services - 1.47%
Baker Hughes Incorporated	22,054		652,578
GlobalSanteFe Corporation	13,200		316,140
			968,718
Photographic Equipment - 1.92%
Fuji Photo Film Co., Ltd. (A)	43,000		1,265,671

Real Estate Investment Trusts - 1.35%
Sun Hung Kai Properties Limited (A)	110,000		891,289

Retail - Food Stores - 0.94%
Walgreen Co.	20,300		621,992

Retail - General Merchandise - 2.73%
Costco Wholesale Corporation*	20,000		622,200
Kohl's Corporation*	12,400		663,400
NEXT plc (A)	27,500		513,755
			1,799,355
Retail - Specialty Stores - 0.45%
Gymboree Corporation (The)*	20,900		295,631

Security and Commodity Brokers - 1.35%
Hong Kong Exchanges and Clearing Limited (A)	420,000		892,129
Utilities - Electric - 0.97%
Southern Company	21,800		639,176

Utilities - Telephone - 2.21%
BellSouth Corporation	33,500		793,280
China Mobile (Hong Kong) Limited (A)	124,000		327,437
China Unicom Limited (A)	412,000		337,818
			1,458,535

TOTAL COMMON STOCKS - 41.49%		$	27,346,561

(Cost: $26,763,494)


CORPORATE DEBT SECURITIES		Principal Amount in Thousands


Banks - 0.89%
Banco Nacional de Comercio Exterior, S.N.C.,
	7.25%, 2-2-04	$	580		588,700

Beverages - 0.95%
Coca-Cola FEMSA, S.A. de C.V.,
	8.95%, 11-1-06		450		520,875
Pepsi-Gemex, S.A. de C.V.,
	9.75%, 3-30-04		100		103,875
					624,750
Broadcasting - 0.67%
Grupo Televisa, S.A.,
	8.625%, 8-8-05		400		440,500

Food and Related - 1.18%
GRUMA, S.A. de C.V.,
	7.625%, 10-15-07		250		267,813
Kellogg Company,
	6.625%, 1-29-04		500		507,849
					775,662
Forest and Paper Products - 0.78%
Abitibi-Consolidated Inc.,
	8.3%, 8-1-05		250		265,003
International Paper Company,
	8.125%, 7-8-05		225		248,733
					513,736
Furniture and Furnishings - 0.16%
Leggett & Platt, Incorporated,
	7.65%, 2-15-05		100		108,149

Leisure Time Industry - 0.31%
Royal Caribbean Cruises Ltd.,
	8.125%, 7-28-04		200		207,500

Multiple Industry - 0.39%
National Rural Utilities Cooperative
	Finance Corporation,
	3.0%, 2-15-06		250		254,894

Petroleum - International - 0.80%
Petroleos Mexicanos,
	6.5%, 2-1-05		500		527,500

Petroleum - Services - 0.25%
Pemex Finance Ltd. and Petroleos Mexicanos,
	8.02%, 5-15-07				166,281

Railroad - 0.31%
MRS Logistica S.A.,
	10.625%, 8-15-05		202		202,000

Trucking and Shipping - 0.46%
WMX Technologies, Inc.,
	6.375%, 12-1-03		300		302,077

Utilities - Electric - 0.41%
Dominion Resources, Inc.,
	7.625%, 7-15-05		250		274,393

Utilities - Telephone - 0.58%
Comtel Brasileira Ltda.,
	10.75%, 9-26-04		150		158,250
Telefonos de Mexico, S.A. de C.V.,
	8.25%, 1-26-06		200		222,500
					380,750

TOTAL CORPORATE DEBT SECURITIES - 8.14%				$	5,366,892

(Cost: $5,224,968)


OTHER GOVERNMENT SECURITIES

Germany - 4.35%
Bundesschwatzanweisungen Treasury Note,
	2.5%, 3-18-05 (B)	EUR	2,450		2,869,328

Mexico - 0.45%
United Mexican States,
	8.625%, 3-12-08		$ 250		297,750

Supranational - 0.80%
European Investment Bank,
	2.88%, 1-17-06 (B)	HKD	4,000		526,522

TOTAL OTHER GOVERNMENT SECURITIES - 5.60%				$	3,693,600

(Cost: $3,414,838)


UNITED STATES GOVERNMENT SECURITIES
United States Treasury Notes:
	3.0%, 2-29-04	$	1,000		1,008,203
	3.375%, 4-30-04		2,200		2,229,993
TOTAL UNITED STATES GOVERNMENT SECURITIES - 4.91%				$	3,238,196

(Cost: $3,199,857)


UNREALIZED GAIN (LOSS) ON OPEN FORWARD CURRENCY CONTRACTS - (0.22%)	Face Amount in Thousands


Euro Dollar, 11-7-03 (B)	EUR	1,803	170,576
Euro Dollar, 11-7-03 (B)		1,803	(305,600)
Swiss Franc, 2-11-04 (B)	CHF	870	9,839
Swiss Franc, 2-11-04 (B)		870	(19,627)
			$ (144,812)


PUT OPTION - 0.05%		Number of Contracts

Wild Oats Markets, Inc., October 12.5,
	Expires 10-18-03	196	$	32,144
(Cost: $12,413)


SHORT-TERM SECURITIES			Principal Amount in Thousands

Commercial Paper
	Banks - 3.80%
		UBS Finance Delaware LLC,
		1.11%, 10-1-03	$ 2,505		2,505,000

	Finance Companies - 1.61%
		State Street Corporation,
		1.11%, 10-1-03	1,056		1,056,000

	Health Care - Drugs - 3.79%
		Merck & Co., Inc.,
		1.02%, 10-16-03	2,500		2,498,937

Total Commercial Paper - 9.20%					6,059,937


United States Government Security - 21.22%
United States Treasury Bill,
		0.00%, 11-6-03 (C)	14,000		13,987,470

TOTAL SHORT-TERM SECURITIES - 30.42%				$	20,047,407

(Cost: $20,047,407)

TOTAL INVESTMENTS - 101.67%				$	67,013,011

(Cost: $65,050,418)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.67%)					(1,101,996)


NET ASSETS - 100.00%				$	65,911,015


Notes to Schedule of Investments
*No income dividends were paid during the preceding 12 months.
(A)Listed on an exchange outside the United States.
(B)Principal amounts are denominated in the indicated foreign currency, where applicable (EUR - Euro, HKD - Hong Kong Dollar, CHF - Swiss Franc).
(C)This security served as collateral for the following open futures contracts at September 30, 2003 (See Note 7 to financial statements):
Type	Number of Contracts	Expiration Date	Market Value	Cost
Standard & Poors 500	5	12-19-03	$1,242,625	$1,255,625
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

ASSET STRATEGY FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investments - at value (Notes 1 and 3):
		Bullion (cost - $6,387)			$	7,433
		Securities (cost - $58,663)			59,580

					67,013
	Cash					1
	Receivables:
		Dividends and interest			211
		Fund shares sold			161
		Investment securities sold			29
		Variation margin			13

			Total assets		67,428

LIABILITIES
	Payable for investment securities purchased				1,309
	Payable to Fund shareholders				152
	Accrued shareholder servicing (Note 2)				21
	Accrued accounting and administrative services fees (Note 2)				4
	Accrued distribution and service fees (Note 2)				2
	Accrued management fee (Note 2)				1
	Other				28

			Total liabilities		1,517

				Total net assets	$	65,911

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	56
		Additional paid-in capital			65,365
	Accumulated undistributed income (loss):
		Accumulated undistributed net investment income			72
		Accumulated undistributed net realized loss
			on investment transactions		(1,560)
		Net unrealized appreciation in value of investments			1,978

			Net assets applicable to outstanding units of capital		$	65,911

Net asset value per share (net assets divided by shares outstanding):
	Class A				$	11.73
	Class B				$	11.70
	Class C				$	11.71
	Class Y				$	11.73
Capital shares outstanding:
	Class A				1,108
	Class B				432
	Class C				3,998
	Class Y				90
Capital shares authorized					200,000

STATEMENT OF OPERATIONS

ASSET STRATEGY FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT INCOME
	Income (Note 1B):
		Interest and amortization			$	536
		Dividends (net of foreign withholding taxes of $10)				203

			Total income			739

	Expenses (Note 2):
		Investment management fee				231
		Distribution fee:
			Class A			1
			Class B			16
			Class C			184
			Class Y			1
		Shareholder servicing:
			Class A			13
			Class B			9
			Class C			68
			Class Y			1
		Service fee:
			Class A			14
			Class B			5
			Class C			61
		Registration fees				41
		Accounting and administrative services fees				20
		Custodian fees				15
		Audit fees				10
		Legal fees				6
		Other				15

			Total expenses			711

				Net investment income		28

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3)
	Realized net gain on securities					$1,388
	Realized net loss on futures contracts					(108)
	Realized net loss on written options					(150)
	Realized net loss on purchased options					(88)
	Realized net gain on foreign currency transactions					71

		Realized net gain on investments				1,113

	Unrealized appreciation in value of securities
		during the period				2,019
	Unrealized appreciation in value of futures contracts
		during the period				13
	Unrealized appreciation in value of purchased options
		during the period				20
	Unrealized depreciation in value of forward currency
		contracts during the period				(9)

		Unrealized appreciation in value of investments
			during the period			2,043

			Net gain on investments			3,156

				Net increase in net assets resulting from operations	$	3,184

STATEMENT OF CHANGES IN NET ASSETS

ASSET STRATEGY FUND
(In Thousands)

					For the six months ended September 30, 2003		For the fiscal year ended March 31, 2003

INCREASE IN NET ASSETS
	Operations:
		Net investment income			$	28	$	327
		Realized net gain on investments			1,113			866
		Unrealized appreciation (depreciation)			2,043			(1,673	)

			Net increase (decrease) in net assets
				resulting from operations	3,184			(480	)

	Distributions to shareholders from (Note 1F):^(A)
		Net investment income:
			Class A		(27		)	(88	)
			Class B		- -		*	(12	)
			Class C		(21		)	(264	)
			Class Y		(4		)	(11	)
		Realized gains on investment transactions:
			Class A		- -			- -
			Class B		- -			- -
			Class C		- -			- -
			Class Y		- -			- -

					(52		)	(375	)

	Capital share transactions (Note 5)				(1,660		)	11,160

		Total increase			1,472			10,305
NET ASSETS
	Beginning of period				64,439			54,134

	End of period				$	65,911	$	64,439

		Undistributed net investment income			$	72	$	25


*Not shown due to rounding.
(A)See "Financial Highlights" on pages 43 - 46.

FINANCIAL HIGHLIGHTS

ASSET STRATEGY FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03				For the fiscal year ended March 31,				For the period from 7-10-00⁽¹⁾to 3-31-01
			For the six months ended 9-30-03				2003			2002	For the period from 7-10-00⁽¹⁾to 3-31-01

Net asset value,
	beginning of period		$	11.18		$	11.33		$	11.98		$	15.22

Income (loss) from
	investment operations:
	Net investment income		0.05			0.16			0.25			0.15
	Net realized and unrealized
		gain (loss) on
		investments	0.53			(0.16		)	(0.40		)	(0.60		)

Total from investment
	operations		0.58			0.00			(0.15		)	(0.45		)

Less distributions from:
	Net investment income		(0.03		)	(0.15		)	(0.30		)	(0.13		)
	Capital gains		(0.00		)	(0.00		)	(0.20		)	(2.66		)

Total distributions			(0.03		)	(0.15		)	(0.50		)	(2.79		)

Net asset value,
	end of period		$	11.73		$	11.18		$	11.33		$	11.98

Total return⁽²⁾			5.16		%	0.00		%	- -1.25		%	- -3.77		%
Net assets, end of
	period (in millions)		$	13		$	9		$	4		$	2
Ratio of expenses to
	average net assets		1.51		%⁽³⁾	1.40		%	1.45		%	1.26		%⁽³⁾
Ratio of net investment
	income to average
	net assets		0.71		%⁽³⁾	1.23		%	2.28		%	2.26		%⁽³⁾
Portfolio turnover rate			164.89		%	109.38		%	143.38		%	214.77		%⁽⁴⁾

(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)Annualized.
(4)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

ASSET STRATEGY FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03				For the fiscal year ended March 31,				For the period from 7-3-00⁽¹⁾to 3-31-01
			For the six months ended 9-30-03				2003			2002	For the period from 7-3-00⁽¹⁾to 3-31-01

Net asset value,
	beginning of period		$	11.17		$	11.32		$	11.97		$	15.21

Income (loss) from
	investment operations:
	Net investment
		income (loss)	(0.01		)	0.05			0.17			0.07
	Net realized and unrealized
		gain (loss) on
		investments	0.54			(0.15		)	(0.41		)	(0.60		)

Total from investment
	operations		0.53			(0.10		)	(0.24		)	(0.53		)

Less distributions from:
	Net investment
		income	(0.00		)*	(0.05		)	(0.21		)	(0.05		)
	Capital gains		(0.00		)	(0.00		)	(0.20		)	(2.66		)

Total distributions			(0.00		)*	(0.05		)	(0.41		)	(2.71		)

Net asset value,
	end of period		$	11.70		$	11.17		$	11.32		$	11.97

Total return			4.76		%	- -0.92		%	- -2.03		%	- - 4.35		%
Net assets, end of
	period (in millions)		$	5		$	3		$	3		$	2
Ratio of expenses to
	average net assets		2.47		%⁽²⁾	2.35		%	2.25		%	2.15		%⁽²⁾
Ratio of net investment
	income (loss) to
	average net assets		- -0.25		%⁽²⁾	0.31		%	1.50		%	1.37		%⁽²⁾
Portfolio turnover rate			164.89		%	109.38		%	143.38		%	214.77		%⁽³⁾

*Not shown due to rounding.
(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

ASSET STRATEGY FUND
Class C Shares(1)
For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended 9-30-03				For the fiscal year ended March 31,
		For the six months ended 9-30-03			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	11.17		$	11.32		$	11.97		$	15.21		$	11.20		$	11.42

Income (loss) from investment operations:
	Net investment income (loss)	(0.00		)	0.05			0.19			0.11			0.03			0.15
	Net realized and unrealized gain (loss) on investments	0.55			(0.14		)	(0.43		)	(0.62		)	4.33			0.05

Total from investment operations		0.55			(0.09		)	(0.24		)	(0.51		)	4.36			0.20

Less distributions from:
	Net investment income	(0.01		)	(0.06		)	(0.21		)	(0.07		)	(0.05		)	(0.16		)
	Capital gains	(0.00		)	(0.00		)	(0.20		)	(2.66		)	(0.30		)	(0.26		)

Total distributions		(0.01		)	(0.06		)	(0.41		)	(2.73		)	(0.35		)	(0.42		)

Net asset value, end of period		$	11.71		$	11.17		$	11.32		$	11.97		$	15.21		$	11.20

Total return		4.88		%	- -0.79		%	- -1.98		%	- - 4.22		%	39.60		%	1.79		%
Net assets, end of period (in millions)		$	47		$	51		$	47		$	54		$	52		$	30
Ratio of expenses to average net assets		2.29		%⁽²⁾		2.20	%	2.20		%	2.15		%	2.24		%	2.32		%
Ratio of net investment income (loss) to average net assets		- -0.05		%⁽²⁾	0.46		%	1.59		%	0.86		%	0.24		%	1.38		%
Portfolio turnover rate		164.89		%	109.38		%	143.38		%	214.77		%	204.12		%	168.17		%

(1)See Note 5.
(2)Annualized.

FINANCIAL HIGHLIGHTS

ASSET STRATEGY FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended 9-30-03			For the fiscal year ended March 31,
		For the six months ended 9-30-03			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	11.18		$	11.33		$	11.98		$	15.26		$	11.21		$	11.43

Income (loss) from investment operations:
	Net investment income	0.04			0.11			0.28			0.24			0.15			0.26
	Net realized and unrealized gain (loss) on investments	0.54			(0.10		)	(0.42		)	(0.63		)	4.33			0.05

Total from investment operations		0.58			0.01			(0.14		)	(0.39		)	4.48			0.31

Less distributions from:
	Net investment income	(0.03		)	(0.16		)	(0.31		)	(0.23		)	(0.13		)	(0.27		)
	Capital gains	(0.00		)	(0.00		)	(0.20		)	(2.66		)	(0.30		)	(0.26		)

Total distributions		(0.03		)	(0.16		)	(0.51		)	(2.89		)	(0.43		)	(0.53		)

Net asset value, end of period		$	11.73		$	11.18		$	11.33		$	11.98		$	15.26		$	11.21

Total return		5.17		%	0.08		%	- -1.14		%	- -3.39		%	40.85		%	2.75		%
Net assets, end of period (in thousands)		$	1,057		$	1,150		$	627		$	550		$	508		$	307
Ratio of expenses to
	average net assets	1.41		%⁽¹⁾	1.32		%	1.33		%	1.32		%	1.33		%	1.45		%
Ratio of net investment income to average net assets		0.86		%⁽¹⁾	1.34		%	2.44		%	1.71		%	1.14		%	2.25		%
Portfolio turnover rate		164.89		%	109.38		%	143.38		%	214.77		%	204.12		%	168.17		%

(1)Annualized.

SHAREHOLDER SUMMARY OF CORE EQUITY FUND

GOALS

Core Equity Fund

To seek capital growth and income.

Strategy

Invests primarily in common stocks of large United States and foreign companies with dominant market positions in their industries and that have the potential for capital appreciation or that are expected to resist market decline.

Founded

1992

Scheduled Dividend Frequency

Annually (December)

Performance Summary - Class C Shares


Per Share Data
For the Six Months Ended September 30, 2003

Net asset value on
9-30-03	$7.16
3-31-03	6.48

Change per share	$0.68

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF CORE EQUITY FUND


Average Annual Total Return ^(A)
	Class A		Class B
	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}
Period	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}

1-year period ended 9-30-03	6.56%	13.06%	7.93%	11.93%
5-year period ended 9-30-03	-	-	-	-
10-year period ended 9-30-03	-	-	-	-
Since inception of Class^{^(F)}	-13.31%	-11.71%	-13.67%	-13.02%

(B)Performance data is based on deduction of 5.75% sales load on the initial purchase in the periods.

(C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)7-3-00 for Class A shares and 7-11-00 for Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^{^(B)}	Class Y^{^(C)}

1-year period ended 9-30-03	12.05%	13.22%
5-year period ended 9-30-03	-1.61%	-0.74%
10-year period ended 9-30-03	6.83%	-
Since inception of Class^{^(D)}	-	5.85%

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)12-29-95 for Class Y shares (the date on which shares were first acquired by shareholders).

SHAREHOLDER SUMMARY OF CORE EQUITY FUND

Portfolio Highlights

On September 30, 2003, Core Equity Fund had net assets totaling $259,517,516 invested in a diversified portfolio of:


91.47%		Common Stocks
8.53%		Cash and Cash Equivalents


As a shareholder of Core Equity Fund, for every $100 you had invested on September 30, 2003, your Fund owned:
	Energy Stocks	$	16.98
	Technology Stocks	$	14.98
	Health Care Stocks	$	13.34
	Financial Services Stocks	$	11.61
	Utilities Stocks	$	10.64
	Cash and Cash Equivalents	$	8.53
	Consumer Nondurables Stocks	$	5.57
	Retail Stocks	$	5.27
	Raw Materials Stocks	$	5.12
	Consumer Goods and Services Stocks	$	4.03
	Capital Goods Stocks	$	1.98
	Transportation Stocks	$	1.95

THE INVESTMENTS OF CORE EQUITY FUND

September 30, 2003



	Shares		Value
COMMON STOCKS
Aircraft - 6.91%
Boeing Company (The)	74,900	$	2,571,317
Lockheed Martin Corporation	278,805	12,866,851
Northrop Grumman Corporation	28,900	2,491,758
			17,929,926
Aluminum - 1.21%
Alcoa Incorporated	120,300		3,147,048

Banks - 7.51%
Bank of America Corporation	35,900	2,801,636
U.S. Bancorp	419,855	10,072,321
Wells Fargo & Company	128,455	6,615,433
			19,489,390
Beverages - 4.49%
Anheuser-Busch Companies, Inc.	99,525	4,910,563
Coca-Cola Company (The)	157,000	6,744,720
			11,655,283
Broadcasting - 4.03%
Cox Communications, Inc., Class A*	156,684	4,954,348
Liberty Media Corporation, Class A*	110,286	1,099,551
Viacom Inc., Class B	114,940	4,402,202
			10,456,101
Capital Equipment - 1.98%
Caterpillar Inc.	37,100	2,553,964
Deere & Company	48,500	2,585,535
			5,139,499
Chemicals - Petroleum and Inorganic - 1.95%
du Pont (E.I.) de Nemours and Company	89,995	3,600,700
Goodrich Corporation	60,600	1,468,944
			5,069,644
Chemicals - Specialty - 1.96%
Air Products and Chemicals, Inc.	112,730	5,084,123
Computers - Peripherals - 5.01%
Microsoft Corporation	209,820	5,835,094
SAP Aktiengesellschaft, ADR	235,600	7,164,596
			12,999,690
Electronic Components - 3.06%
Analog Devices, Inc.*	108,000	4,106,160
Intel Corporation	139,640	3,842,893
			7,949,053
Health Care- Drugs - 8.26%
Abbott Laboratories	155,500		6,616,525
Amgen Inc.*	51,230	3,306,128
Pfizer Inc.	379,031	11,514,962
			21,437,615
Health Care - General - 3.69%
Johnson & Johnson	62,255	3,082,868
Wyeth	140,600	6,481,660
			9,564,528
Hospital Supply and Management - 1.39%
Medtronic, Inc.	76,770		3,602,048

Household - General Products - 1.08%
Clorox Company (The)	61,300		2,811,831

Insurance - Property and Casualty - 4.10%
American International Group, Inc.	93,595	5,400,431
Berkshire Hathaway Inc., Class B*	2,100	5,241,600
			10,642,031
Petroleum - Canada - 1.12%
Nabors Industries Ltd.*	78,200		2,913,732

Petroleum - Domestic - 5.86%
Anadarko Petroleum Corporation	173,625	7,250,580
Burlington Resources Inc.	165,200	7,962,640
			15,213,220
Petroleum - International - 4.82%
Exxon Mobil Corporation	188,353	6,893,720
Royal Dutch Petroleum Company, NY Shares	126,900	5,608,980
			12,502,700
Petroleum - Services - 5.18%
Baker Hughes Incorporated	281,530	8,330,473
Schlumberger Limited	105,500	5,106,200
			13,436,673
Retail - General Merchandise - 4.76%
Costco Wholesale Corporation*	212,900	6,623,319
Kohl's Corporation*	107,000	5,724,500
			12,347,819
Retail - Specialty Stores - 0.51%
Lowe's Companies, Inc.	25,700		1,333,830

Trucking and Shipping - 1.95%
United Parcel Service, Inc., Class B	79,355		5,062,849

Utilities - Electric - 6.98%
Dominion Resources, Inc.	179,900	11,135,810
Southern Company	237,800	6,972,296
			18,108,106
Utilities - Telephone - 3.66%
BellSouth Corporation	109,425	2,591,184
SBC Communications Inc.	118,310	2,632,398
Vodafone Group Plc, ADR	210,600	4,264,650
			9,488,232

TOTAL COMMON STOCKS - 91.47%		$	237,384,971

(Cost: $195,431,622)

TOTAL SHORT-TERM SECURITIES - 9.29%		$	24,110,562

(Cost: $24,110,562)

TOTAL INVESTMENT SECURITIES - 100.76%		$	261,495,533

(Cost: $219,542,184)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.76%)			(1,978,017)


NET ASSETS - 100.00%		$	259,517,516


Notes to Schedule of Investments
*No income dividends were paid during the preceding 12 months.
See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

CORE EQUITY FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities - at value (cost - $219,542)
		(Notes 1 and 3)			$	261,496
	Receivables:
		Investment securities sold				2,538
		Dividends and interest				292
		Fund shares sold				133

			Total assets			264,459

LIABILITIES
	Payable for investment securities purchased					3,435
	Payable to Fund shareholders					1,218
	Accrued shareholder servicing (Note 2)					135
	Accrued accounting and administrative services fees (Note 2)					8
	Accrued management fee (Note 2)					5
	Accrued distribution fee (Note 2)					4
	Due to custodian					3
	Accrued service fee (Note 2)					2
	Other					131

			Total liabilities			4,941

				Total net assets	$	259,518

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	361
		Additional paid-in capital				296,609
	Accumulated undistributed income (loss):
		Accumulated undistributed net investment loss				(289)
		Accumulated undistributed net realized loss on investment transactions				(79,127)
		Net unrealized appreciation in value of investments				41,964

			Net assets applicable to outstanding units of capital			$259,518

Net asset value per share (net assets divided by shares outstanding):
	Class A					$7.36
	Class B					$7.13
	Class C					$7.16
	Class Y					$7.62
Capital shares outstanding:
	Class A					5,926
	Class B					1,748
	Class C					28,219
	Class Y					187
Capital shares authorized						400,000

STATEMENT OF OPERATIONS

CORE EQUITY FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT LOSS
	Income (Note 1B):
		Dividends (net of foreign withholding taxes of $41)			$	2,358
		Interest and amortization				124

			Total income			2,482

	Expenses (Note 2):
		Investment management fee				895
		Distribution fee:
			Class A			2
			Class B			35
			Class C			794
			Class Y			3
		Shareholder servicing:
			Class A			52
			Class B			25
			Class C			420
			Class Y			2
		Service fee:
			Class A			38
			Class B			12
			Class C			265
		Accounting and administrative services fees				39
		Legal fees				22
		Audit fees				17
		Custodian fees				9
		Other				135

			Total expenses			2,765

				Net investment loss		(283)

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
	Realized net loss on securities					(13,850)
	Realized net gain on written options					95
	Realized net gain on foreign currency transactions					1

		Realized net loss on investments				(13,754)
	Unrealized appreciation in value of investments during the period					22,609

			Net gain on investments			8,855

				Net increase in net assets resulting from operations		$ 8,572

STATEMENT OF CHANGES IN NET ASSETS

CORE EQUITY FUND
(In Thousands)

				For the six months ended September 30, 2003				For the fiscal year ended March 31, 2003

INCREASE (DECREASE) IN NET ASSETS
	Operations:
		Net investment loss			$	(283	)	$	(1,484	)
		Realized net loss on investments			(13,754		)	(27,550		)
		Unrealized appreciation (depreciation)			22,609			(63,354		)

			Net increase (decrease) in net assets resulting from operations		8,572			(92,388		)

	Distributions to shareholders from (Note 1F):(1)
		Net investment income:
			Class A		- -			- -
			Class B		- -			- -
			Class C		- -			- -
			Class Y		- -			- -
		Realized gains on investment transactions:
			Class A		- -			- -
			Class B		- -			- -
			Class C		- -			- -
			Class Y		- -			- -

					- -			- -

	Capital share transactions (Note 5)				30,966			(62,188		)

		Total increase (decrease)			39,538			(154,576		)
NET ASSETS
	Beginning of period				219,980			374,556

	End of period				$	259,518		$	219,980

		Undistributed net investment loss			$	(289	)	$	(7	)


(1)See "Financial Highlights" on pages 42 - 44.

FINANCIAL HIGHLIGHTS

CORE EQUITY FUND⁽¹⁾Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03			For the fiscal year ended March 31,						For the period from 7-3-00⁽²⁾ to 3-31-01
			For the six months ended 9-30-03			2003			2002			For the period from 7-3-00⁽²⁾ to 3-31-01

Net asset value, beginning of period			$	6.63		$	8.89		$	9.51		$	13.89

Income (loss) from investment operations:
	Net investment loss		(0.07		)	(0.08		)	(0.20		)	(0.00		)
		Net realized and unrealized gain (loss) on investments	0.80			(2.18		)	(0.11		)	(2.00		)

Total from investment operations			0.73			(2.26		)	(0.31		)	(2.00		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)
	Capital gains		(0.00		)	(0.00		)	(0.31		)	(2.38		)

Total distributions			(0.00		)	(0.00		)	(0.31		)	(2.38		)

Net asset value, end of period			$	7.36		$	6.63		$	8.89		$	9.51

Total return⁽³⁾			11.01		%	- -25.42		%	- -3.18		%	- -16.72		%
Net assets, end of period (in millions)			$44			$13			$9			$4
Ratio of expenses to average net assets			1.44		%⁽⁴⁾	1.31		%	1.26		%	1.18		%⁽⁴⁾
Ratio of net investment income (loss) to average net assets			0.43		%⁽⁴⁾	0.28		%	- -0.11		%	- -0.11		%⁽⁴⁾
Portfolio turnover rate			19.92		%	39.13		%	22.36		%	39.02		%⁽⁵⁾

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000. (2)Commencement of operations of the class. (3)Total return calculated without taking into account the sales load deducted on an initial purchase. (4)Annualized. (5)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

CORE EQUITY FUND⁽¹⁾
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03			For the fiscal year ended March 31,						For the period from 7-11-00 ⁽²⁾to 3-31-01
			For the six months ended 9-30-03			2003			2002			For the period from 7-11-00 ⁽²⁾to 3-31-01

Net asset value, beginning of period		$	6.45		$	8.74		$	9.44		$	14.10

Income (loss) from investment operations:
	Net investment loss	(0.03		)	(0.06		)	(0.14		)	(0.05		)
	Net realized and unrealized gain (loss) on investments	0.71			(2.23		)	(0.25		)	(2.23		)

Total from investment operations		0.68			(2.29		)	(0.39		)	(2.28		)

Less distributions from:
	Net investment income	(0.00		)	(0.00		)	(0.00		)	(0.00		)
	Capital gains	(0.00		)	(0.00		)	(0.31		)	(2.38		)

Total distributions		(0.00		)	(0.00		)	(0.31		)	(2.38		)

Net asset value, end of period		$	7.13		$	6.45		$	8.74		$	9.44

Total return		10.54		%	- -26.20		%	- - 4.06		%	- -18.50		%
Net assets, end of period (in millions)		$13			$5			$6			$5
Ratio of expenses to average net assets		2.37		%⁽³⁾	2.36		%	2.18		%	2.11		%⁽³⁾
Ratio of net investment loss to average net assets		- -0.48		%⁽³⁾	- -0.76		%	- -1.04		%	- -1.02		%⁽³⁾
Portfolio turnover rate		19.92		%	39.13		%	22.36		%	39.02		%⁽⁴⁾

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000. (2)Commencement of operations of the class. (3)Annualized. (4)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

CORE EQUITY FUND⁽¹⁾
Class C Shares⁽²⁾For a Share of Capital Stock Outstanding Throughout Each Period⁽³⁾

		For the six months ended 9-30-03					For the fiscal year ended March 31,
		For the six months ended 9-30-03					2003			2002			2001			2000			1999

Net asset value, beginning of period			$	6.48		$	8.76		$	9.45		$	13.76		$	11.52		$	12.24

Income (loss) from investment operations:
	Net investment income (loss)		(0.01		)	(0.04		)	(0.08		)	(0.11		)	(0.01		)	0.03
	Net realized and unrealized gain (loss) on investments		0.69			(2.24		)	(0.30		)	(1.82		)	2.71			0.82

Total from investment operations			0.68			(2.28		)	(0.38		)	(1.93		)	2.70			0.85

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.03		)	(0.01		)
	Capital gains		(0.00		)	(0.00		)	(0.31		)	(2.38		)	(0.43		)	(1.56		)

Total distributions			(0.00		)	(0.00		)	(0.31		)	(2.38		)	(0.46		)	(1.57		)

Net asset value, end of period			$	7.16		$	6.48		$	8.76		$	9.45		$	13.76		$	11.52

Total return			10.49		%	- -26.03		%	- -3.94		%	- -16.40		%	23.98		%	7.47		%
	Net assets, end of period (in millions)		$202			$200			$356			$440			$585			$508
Ratio of expenses to average net assets			2.27		%⁽⁴⁾	2.18		%	2.05		%	1.97		%	1.98		%	1.93		%
Ratio of net investment income (loss) to average net assets			- -0.32		%⁽⁴⁾	- -0.58		%	- -0.91		%	- -0.93		%	- -0.12		%	0.30		%
Portfolio turnover rate			19.92		%	39.13		%	22.36		%	39.02		%	75.64		%	54.73		%

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000. (2)See Note 5. (3)Per share amounts have been adjusted retroactively to reflect the 100% stock dividend effected June 26, 1998. (4)Annualized.

FINANCIAL HIGHLIGHTS

CORE EQUITY FUND⁽¹⁾Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period⁽²⁾

		For the six months ended 9-30-03					For the fiscal year ended March 31,
		For the six months ended 9-30-03					2003			2002			2001			2000			1999

Net asset value, beginning of period			$	6.86		$	9.19		$	9.82		$	14.08		$	11.78		$	12.46

Income (loss) from investment operations:
	Net investment income (loss)		0.29			0.04			(0.11		)	(0.04		)	0.06			0.12
	Net realized and unrealized gain (loss) on investments		0.47			(2.37		)	(0.21		)	(1.84		)	2.80			0.84

Total from investment
	operations		0.76			(2.33		)	(0.32		)	(1.88		)	2.86			0.96

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.13		)	(0.08		)
	Capital gains		(0.00		)	(0.00		)	(0.31		)	(2.38		)	(0.43		)	(1.56		)

Total distributions			(0.00		)	(0.00		)	(0.31		)	(2.38		)	(0.56		)	(1.64		)

Net asset value, end of period			$	7.62		$	6.86		$	9.19		$	9.82		$	14.08		$	11.78

Total return			11.08		%	- -25.35		%	- -3.18		%	- -15.62		%	24.96		%	8.37		%
Net assets, end of period (in millions)			$1			$2			$4			$2			$2			$1
Ratio of expenses to average net assets			1.31		%⁽³⁾	1.20		%	1.17		%	1.15		%	1.16		%	1.15		%
Ratio of net investment income (loss) to average net assets			0.68		%⁽³⁾	0.40		%	- -0.03		%	- -0.11		%	0.67		%	1.10		%
Portfolio turnover rate			19.92		%	39.13		%	22.36		%	39.02		%	75.64		%	54.73		%

(1)Core Equity Fund (formerly Total Return Fund) changed its name effective October 2, 2000. (2)Per share amounts have been adjusted retroactively to reflect the 100% stock dividend effected June 26, 1998. (3)Annualized.

SHAREHOLDER SUMMARY OF HIGH INCOME FUND

GOALS

High Income Fund

To seek a high level of current income as a primary goal and capital growth as a secondary goal when consistent with its primary goal.

Strategy

Invests primarily in high-yield, high-risk, fixed-income securities of United States and foreign issuers. The Fund invests primarily in lower quality, non-investment grade bonds, commonly called junk bonds. The Fund may invest up to 20% of its total assets in common stocks in order to seek capital growth.

Founded

1997

Scheduled Dividend Frequency

Declared daily, paid monthly

Performance Summary - Class C Shares


Per Share Data
For the Six Months Ended September 30, 2003

Dividends paid	$0.26

Net asset value on
9-30-03	$8.58
3-31-03	8.07

Change per share	$0.51

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF HIGH INCOME FUND


Average Annual Total Return ^(A)
	Class A		Class B
	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}
Period	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}

1-year period ended 9-30-03	11.49%	18.30%	13.25%	17.25%
5-year period ended 9-30-03	-	-	-	-
10-year period ended 9-30-03	-	-	-	-
Since inception of Class^{^(F)}	4.96%	6.90%	5.22%	6.01%

(B)Performance data is based on deduction of 5.75% sales load on the initial purchase in the periods.

(C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)7-3-00 for Class A shares and 7-18-00 for Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^{^(B)}	Class Y^{^(C)}

1-year period ended 9-30-03	17.33%	18.37%
5-year period ended 9-30-03	5.06%	-
10-year period ended 9-30-03	-	-
Since inception of Class^{^(D)}	4.71%	5.40%

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)7-31-97 for Class C shares and 12-30-98 for Class Y shares (the date on which shares were first acquired by shareholders).

Investing in high income securities may carry a greater risk of nonpayment of interest or principal than higher-rated bonds.

SHAREHOLDER SUMMARY OF HIGH INCOME FUND

Portfolio Highlights

On September 30, 2003, High Income Fund had net assets totaling $44,176,215 invested in a diversified portfolio of:


89.91%		Corporate Debt Securities
6.91%		Cash and Cash Equivalents
3.18%		Common and Preferred Stocks, Rights and Warrants


As a shareholder of High Income Fund, for every $100 you had invested on September 30, 2003, your Fund owned:
	Consumer Services Bonds	$	15.34
	Business Equipment and Services Bonds	$	10.54
	Utilities Bonds	$	10.43
	Consumer Nondurables Bonds	$	9.76
	Capital Goods Bonds	$	7.23
	Cash and Cash Equivalents	$	6.91
	Multi-Industry Bonds	$	5.62
	Retail Bonds	$	5.08
	Shelter Bonds	$	4.51
	Energy Bonds	$	4.43
	Raw Materials Bonds	$	3.95
	Health Care Bonds	$	3.93
	Common and Preferred Stocks, Rights and Warrants	$	3.18
	Technology Bonds	$	3.06
	Consumer Durables Bonds	$	3.05
	Miscellaneous Bonds	$	2.98

THE INVESTMENTS OF HIGH INCOME FUND

September 30, 2003




COMMON AND PREFERRED STOCKS, RIGHTS AND WARRANTS		Shares		Value


Beverages - 1.31%
Constellation Brands, Inc.,
	5.75% Preferred, Convertible*	20,000	$	578,400

Broadcasting - 0.49%
Adelphia Communications Corporation,
	13.0% Preferred*	2,500	20,625
Citadel Broadcasting Corporation*		10,000	197,600
			218,225
Communications Equipment - 0.00%
Primus Telecommunications Group,
	Incorporated, Warrants*	300	330

Computers - Main and Mini - 0.58%
Xerox Corporation,
	6.25% Preferred, Convertible*	2,500	255,850

Multiple Industry - 0.80%
Anvil Holdings, Inc., 13.0% Preferred*		14,774	350,887

Security and Commodity Brokers - 0.00%
ONO Finance Plc, Rights (A)*		250	3

Utilities - Telephone - 0.00%
IWO Holdings, Inc., Warrants (A)*		250	3
Intermedia Communications Inc., 13.5% Preferred*		1	2
				5


TOTAL COMMON AND PREFERRED STOCKS, RIGHTS AND WARRANTS - 3.18%			$	1,403,700

(Cost: $1,476,811)



CORPORATE DEBT SECURITIES		Principal Amount in Thousands			Value


Aircraft - 1.17%
Orbital Sciences Corporation,
	9.0%, 7-15-11		500	$	517,500

Apparel - 0.23%
Perry Ellis International, Inc.,
	8.875%, 9-15-13 (A)		100		102,000

Beverages - 0.61%
Constellation Brands, Inc.,
	8.125%, 1-15-12		250		270,000
Broadcasting - 4.05%
Adelphia Communications Corporation,
	10.875%, 10-1-10 (B)		500		350,000
Entravision Communications Corporation,
	8.125%, 3-15-09		100		104,750
Gray Communications Systems, Inc.,
	9.25%, 12-15-11		375		413,438
PanAmSat Corporation,
	6.125%, 1-15-05		475		483,312
Sinclair Broadcast Group, Inc.,
	8.75%, 12-15-11		250		271,875
Young Broadcasting Inc.,
	10.0%, 3-1-11		155		164,300
					1,787,675
Business Equipment and Services - 9.32%
Alderwoods Group, Inc.,
	12.25%, 1-2-09		500		553,750
Allbritton Communications Company,
	7.75%, 12-15-12		100		102,000
Allied Waste North America, Inc.:
	10.0%, 8-1-09		300		325,125
	7.875%, 4-15-13		300		314,250
Armor Holdings, Inc.,
	8.25%, 8-15-13 (A)		250		264,375
IESI Corporation,
	10.25%, 6-15-12		100		108,500
Iron Mountain Incorporated:
	8.625%, 4-1-13		300		319,500
	6.625%, 1-1-16		75		71,063
Lamar Advertising Company,
	8.625%, 9-15-07		125		129,062
Moore North America Finance Inc.,
	7.875%, 1-15-11 (A)		125		132,813
Nextel Partners, Inc.,
	8.125%, 7-1-11 (A)		400		390,000
Owens & Minor, Inc.,
	8.5%, 7-15-11		250		274,375
Synagro Technologies, Inc.,
	9.5%, 4-1-09		500		547,500
UCAR Finance Inc.,
	10.25%, 2-15-12		275		300,437
Vertis, Inc.:
	9.75%, 4-1-09 (A)		25		26,312
	10.875%, 6-15-09		250		256,875
					4,115,937
Capital Equipment - 1.89%
CSK Auto, Inc.,
	12.0%, 6-15-06		280		312,900
Esterline Technologies Corporation,
	7.75%, 6-15-13 (A)		250		265,000
TRW Automotive Acquisition Corp.:
	9.375%, 2-15-13 (A)		150		168,750
	11.0%, 2-15-13 (A)		75		87,375
					834,025
Chemicals - Specialty - 3.95%
Buckeye Cellulose Corporation:
	8.5%, 12-15-05		250		253,525
	9.25%, 9-15-08		145		145,725
Buckeye Technologies Inc.,
	8.5%, 10-1-13 (A)		250		257,500
Ethyl Corporation,
	8.875%, 5-1-10		475		486,875
Salt Holdings Corporation,
	0.0%, 6-1-13 (A)(C)		1,000		600,000
					1,743,625
Coal - 0.60%
Southern Star Central Corp.,
	8.5%, 8-1-10 (A)		250		265,000
Communications Equipment - 1.28%
EchoStar DBS Corporation,
	6.375%, 10-1-11 (A)		100		100,000
Primus Telecommunications Group, Incorporated,
	11.25%, 1-15-09		450		465,750
					565,750
Computers - Peripherals - 0.26%
Titan Corporation (The),
	8.0%, 5-15-11 (A)		100		117,000
Construction Materials - 2.20%
Brand Services, Inc.,
	12.0%, 10-15-12		100		110,500
Interface, Inc.:
	9.5%, 11-15-05		100		91,500
	10.375%, 2-1-10		250		250,625
Jacuzzi Brands, Inc.,
	9.625%, 7-1-10 (A)		500		518,750
					971,375
Containers - 4.13%
Alltrista Corporation,
	9.75%, 5-1-12		200		215,250
Crown European Holdings SA,
	9.5%, 3-1-11 (A)		500		537,500
Jarden Corporation,
	9.75%, 5-1-12		50		53,812
MDP Acquisitions plc,
	9.625%, 10-1-12		280		306,600
Packaging Corporation of America,
	5.75%, 8-1-13 (A)		700		710,944
					1,824,106
Cosmetics and Toiletries - 0.82%
Armkel, LLC and Armkel Finance, Inc.,
	9.5%, 8-15-09		100		110,250
Chattem, Inc.,
	8.875%, 4-1-08		250		250,000
					360,250
Electrical Equipment - 1.94%
Nortek, Inc.,
	9.25%, 3-15-07		250		257,500
Northwest Pipeline Corporation,
	8.125%, 3-1-10		450		488,250
Rexnord Corporation,
	10.125%, 12-15-12		100		111,000
					856,750
Electronic Components - 0.35%
Thomas & Betts Corporation,
	7.25%, 6-1-13		150		153,000

Farm Machinery - 0.97%
Case New Holland Inc.,
	9.25%, 8-1-11 (A)		400		430,000

Finance Companies - 2.16%
American Seafoods Group LLC and American Seafoods, Inc.,
	10.125%, 4-15-10		300		351,000
DIRECTV Holdings LLC and DIRECTV
	Financing Co., Inc.,
	8.375%, 3-15-13 (A)		125		140,937
MSW Energy Holdings LLC and MSW Energy
	Finance Co., Inc.,
	8.5%, 9-1-10 (A)		100		104,500
NBC Acquisition Corp.,
	10.75%, 2-15-09		350		357,875
					954,312
Food and Related - 0.91%
Cube Acquisition Corp.,
	8.875%, 8-1-11 (A)		100		104,625
Merisant Company,
	9.5%, 7-15-13 (A)		150		160,500
Pilgrim's Pride Corporation,
	9.625%, 9-15-11		125		135,000
					400,125
Forest and Paper Products - 1.55%
Georgia-Pacific Corporation:
	7.375%, 7-15-08 (A)		300		309,375
	8.875%, 2-1-10		200		219,000
Jefferson Smurfit Corporation,
	8.25%, 10-1-12		150		156,750
					685,125
Furniture and Furnishings - 1.21%
Associated Materials Incorporated,
	9.75%, 4-15-12		505		534,037
Health Care - General - 0.36%
Sybron Dental Specialties, Inc.,
	8.125%, 6-15-12		150		159,750
Homebuilders, Mobile Homes - 1.13%
WCI Communities, Inc.,
	7.875%, 10-1-13 (A)		500		501,250

Hospital Supply and Management - 3.57%
Columbia/HCA Healthcare Corporation,
	7.0%, 7-1-07		250		272,316
HCA Inc.,
	6.3%, 10-1-12		250		254,806
Psychiatric Solutions, Inc.,
	10.625%, 6-15-13 (A)		400		437,000
Select Medical Corporation,
	7.5%, 8-1-13 (A)		200		206,500
Triad Hospitals, Inc.,
	8.75%, 5-1-09		250		271,875
United Surgical Partners Holdings, Inc.,
	10.0%, 12-15-11		125		136,250
					1,578,747
Hotels and Gaming - 3.37%
Hilton Hotels Corporation,
	7.625%, 12-1-12		300		327,750
John Q Hammons Hotels, L.P. and John Q Hammons Hotels Finance Corporation III,
	8.875%, 5-15-12		300		324,750
MGM MIRAGE,
	8.5%, 9-15-10		250		281,250
Mohegan Tribal Gaming Authority,
	8.0%, 4-1-12		150		162,000
Turning Stone Casino Resort Enterprise,
	9.125%, 12-15-10 (A)		100		107,375
Venetian Casino Resort, LLC and Las
	Vegas Sands, Inc.,
	11.0%, 6-15-10		250		285,000
					1,488,125
Household - General Products - 3.06%
Del Monte Corporation,
	8.625%, 12-15-12 (A)		100		109,250
Fort James Corporation,
	6.625%, 9-15-04		300		307,500
Rayovac Corporation,
	8.5%, 10-1-13 (A)		150		154,500
Sealy Mattress Company,
	10.875%, 12-15-07		250		255,625
Simmons Company,
	10.25%, 3-15-09		250		265,625
Susquehanna Media Co.,
	7.375%, 4-15-13		250		258,750
					1,351,250
Leisure Time Industry - 1.53%
Hollywood Park, Inc.,
	9.25%, 2-15-07		250		255,312
Royal Caribbean Cruises Ltd.,
	8.0%, 5-15-10		250		263,750
Worldspan, L.P. and WS Financing Corp.,
	9.625%, 6-15-11 (A)		150		157,125
					676,187
Metal Fabrication - 0.23%
Wolverine Tube, Inc.,
	10.5%, 4-1-09		100		100,500

Motion Pictures - 3.73%
AMC Entertainment Inc.:
	9.5%, 3-15-09		300		310,875
	9.5%, 2-1-11		200		210,000
Cinemark USA, Inc.:
	8.5%, 8-1-08		250		259,375
	9.0%, 2-1-13		550		587,125
Regal Cinemas Corporation,
	9.375%, 2-1-12		250		281,250
					1,648,625
Motor Vehicle Parts - 1.22%
Collins & Aikman Floorcoverings, Inc.,
	9.75%, 2-15-10		100		105,500
Tenneco Automotive Inc.,
	10.25%, 7-15-13 (A)		400		434,000
					539,500
Motor Vehicles - 1.83%
Sonic Automotive, Inc.,
	8.625%, 8-15-13 (A)		750		810,000

Multiple Industry - 5.62%
Doane Pet Care Company,
	10.75%, 3-1-10		300		330,000
Fisher Scientific International Inc.,
	8.125%, 5-1-12		100		106,250
Muzak LLC and Muzak Finance Corp.,
	10.0, 2-15-09		500		522,500
Owens-Brockway Glass Container Inc.,
	8.75%, 11-15-12		520		557,700
Phoenix Color Corp.,
	10.375%, 2-1-09		500		461,250
Tyco International Group S.A.,
	3.125%, 1-15-23, Convertible (A)		100		112,250
Vivendi Universal S.A.,
	9.25%, 4-15-10 (A)		125		143,594
WESCO Distribution, Inc.,
	9.125%, 6-1-08		250		248,750
					2,482,294
Petroleum - Domestic - 1.56%
	Chesapeake Energy Corporation,
	8.125%, 4-1-11		200		217,000
Encore Acquisition Company,
	8.375%, 6-15-12		100		105,000
Tom Brown, Inc. and Tom Brown Resources Funding Corp., Units,
	7.25%, 9-15-13 (D)		250		258,750
Westport Resources Corporation,
	8.25%, 11-1-11		100		109,250
					690,000
Petroleum - Services - 2.27%
Key Energy Services, Inc.,
	8.375%, 3-1-08		250		268,750
Offshore Logistics, Inc.,
	6.125%, 6-15-13		100		95,500
Pemex Project Funding Master Trust,
	7.375%, 12-15-14		300		322,500
R&B Falcon Corporation,
	9.5%, 12-15-08		250		315,840
					1,002,590
Publishing - 2.66%
CBD Media LLC and CBD Finance, Inc.,
	8.625%, 6-1-11 (A)		325		345,313
Dex Media East LLC and Dex Media East Finance Co.,
	12.125%, 11-15-12		150		181,125
Dex Media West LLC and Dex Media West Finance Co.:
	8.5%, 8-15-10 (A)		100		108,750
	9.875%, 8-15-13 (A)		250		282,500
TransWestern Publishing Company LLC,
	9.625%, 11-15-07		250		258,125
					1,175,813
Railroad - 0.82%
Kansas City Southern Railway Company (The),
	7.5%, 6-15-09		350		363,125

Real Estate Investment Trusts - 0.62%
Meritage Corporation,
	9.75%, 6-1-11		250		273,750

Restaurants - 0.62%
	Host Marriott, L.P.,
	9.25%, 10-1-07		250		272,813

Retail - General Merchandise - 2.57%
AutoNation, Inc.,
	9.0%, 8-1-08		250		280,000
Domino's, Inc.,
	8.25%, 7-1-11 (A)		150		158,437
Roundy's, Inc.,
	8.875%, 6-15-12		300		313,500
United Auto Group, Inc.,
	9.625%, 3-15-12		350		382,375
					1,134,312
Retail - Specialty Stores - 1.89%
Cole National Group, Inc.,
	8.875%, 5-15-12		350		343,000
Group 1 Automotive, Inc.,
	8.25%, 8-15-13 (A)		125		134,688
Jo-Ann Stores, Inc.,
	10.375%, 5-1-07		80		84,000
Michaels Stores, Inc.,
	9.25%, 7-1-09		250		273,750
					835,438
Timesharing and Software - 1.22%
Cooperative Computing, Inc.,
	10.5%, 6-15-11 (A)		250		270,000
NDCHealth Corporation,
	10.5%, 12-1-12		250		271,250
					541,250
Utilities - Electric - 0.36%
AES Corporation (The),
	8.75%, 5-15-13 (A)		150		157,500

Utilities - Gas and Pipeline - 3.69%
ANR Pipeline Company,
	8.875%, 3-15-10		100		107,000
AmeriGas Partners, L.P. and AP Eagle Finance Corp.,
	8.875%, 5-20-11		100		107,250
GulfTerra Energy Partners, L.P.,
	8.5%, 6-1-10		500		538,750
Williams Companies, Inc. (The):
	8.625%, 6-1-10		100		106,250
	8.125%, 3-15-12		250		260,000
	7.75%, 6-15-31		250		226,250
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp.,
	12.0%, 11-1-10		250		285,000
					1,630,500
Utilities - Telephone - 6.38%
Charter Communications Holdings, LLC and Charter
	Communications Holdings Capital Corporation,
	10.0%, 4-1-09		100		79,000
COLT Telecom Group plc,
	12.0%, 12-15-06		500		501,250
Dobson Communications Corporation,
	8.875%, 10-1-13 (A)		350		353,938
Level 3 Communications, Inc.,
	0.0%, 12-1-08 (C)		500		420,000
Level 3 Financing, Inc.,
	10.75%, 10-15-11 (A)		300		298,500
Nextel Communications, Inc.:
	9.95%, 2-15-08		650		683,313
	7.375%, 8-1-15		350		353,500
Triton PCS, Inc.,
	9.375%, 2-1-11		125		127,187
					2,816,688

TOTAL CORPORATE DEBT SECURITIES - 89.91%				$	39,717,599

(Cost: $37,346,242)

TOTAL SHORT-TERM SECURITIES - 5.11%				$	2,260,000

(Cost: $2,260,000)

TOTAL INVESTMENT SECURITIES - 98.20%				$	43,381,299

(Cost: $41,083,053)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.80%					794,916


NET ASSETS - 100.00%				$	44,176,215

Notes to Schedule of Investments

*No income dividends were paid during the preceding 12 months.

(A)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may only be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2003, the total value of these securities amounted to $11,075,732 or 25.07% of net assets.

(B)Non-income producing as the issuer has either missed its most recent interest payment or declared bankruptcy.

(C)The security does not bear interest for an initial period of time and subsequently becomes interest bearing.

(D)Each unit of Tom Brown, Inc. and Tom Brown Resources Funding Corp. consists of $512 principal amount of 7.25% senior subordinated notes due September 15, 2013 of Tom Brown, Inc. and $488 principal amount of 7.25% senior subordinated notes due September 15, 2013 of Tom Brown Resources Funding Corp.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

HIGH INCOME FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities - at value (cost - $41,083) (Notes 1 and 3)				$	43,381
	Receivables:
		Dividends and interest			800
		Investment securities sold			481
		Fund shares sold			80
	Prepaid registration fees				32

			Total assets		44,774

LIABILITIES
	Payable for investment securities purchased				500
	Payable to Fund shareholders				47
	Dividends payable				17
	Accrued shareholder servicing (Note 2)				11
	Accrued accounting and administrative services fees (Note 2)				2
	Accrued distribution and service fees (Note 2)				1
	Accrued management fee (Note 2)				1
	Other				19

			Total liabilities		598

				Total net assets	$	44,176

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	52
		Additional paid-in capital			47,172
	Accumulated undistributed income (loss):
		Accumulated undistributed net realized loss on investment transactions			(5,346		)
		Net unrealized appreciation in value of investments			2,298

			Net assets applicable to outstanding units of capital		$	44,176

Net asset value per share (net assets divided by shares outstanding):
	Class A				$8.58
	Class B				$8.58
	Class C				$8.58
	Class Y				$8.58
Capital shares outstanding:
	Class A				1,167
	Class B				286
	Class C				2,472
	Class Y				1,226
Capital shares authorized					200,000

STATEMENT OF OPERATIONS

HIGH INCOME FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT INCOME
	Income (Note 1B):
		Interest and amortization			$1,646
		Dividends			7

			Total income		1,653

	Expenses (Note 2):
		Investment management fee			122
		Distribution fee:
			Class A		1
			Class B		8
			Class C		75
			Class Y		12
		Shareholder servicing:
			Class A		10
			Class B		4
			Class C		30
			Class Y		7
		Service fee:
			Class A		9
			Class B		3
			Class C		25
		Registration fees			21
		Accounting and administrative services fees			13
		Audit fees			9
		Custodian fees			4
		Other			10

		Total expenses			363

				Net investment income	1,290

REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTES 1 AND 3)
	Realized net gain on investments				720
	Unrealized appreciation in value of investments during the period				1,521

		Net gain on investments			2,241

			Net increase in net assets resulting from operations		$3,531

STATEMENT OF CHANGES IN NET ASSETS

HIGH INCOME FUND
(In Thousands)

					For the six months ended September 30, 2003			For the fiscal year ended March 31, 2003

INCREASE IN NET ASSETS
	Operations:
		Net investment income		$	1,290		$	1,621
		Realized net gain (loss) on investments			720			(1,158	)
		Unrealized appreciation			1,521			259

			Net increase in net assets resulting from operations
					3,531			722

	Distributions to shareholders from net investment income (Note 1F):⁽¹⁾

		Class A			(270	)		(288	)
		Class B			(63	)		(81	)
		Class C			(623	)		(1,224	)
		Class Y			(334	)		(28	)

					(1,290)	)		(1,621	)

	Capital share transactions (Note 5)				11,835			10,768

		Total increase			14,076			9,869
NET ASSETS
	Beginning of period				30,100			20,231

	End of period			$	44,176		$	30,100

		Undistributed net investment income		$	- -		$	- -


(1)See "Financial Highlights" on pages 42 - 47.

FINANCIAL HIGHLIGHTS

HIGH INCOME FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended			For the fiscal year ended March 31,					For the period from 7-3-00⁽¹⁾ to
		9-30-03			2003			2002		3-31-01

Net asset value, beginning of period		$	8.07		$	8.48		$	8.54		$	9.04

Income (loss) from investment operations:
	Net investment income		0.28			0.64			0.74			0.58
	Net realized and unrealized gain (loss) on investments		0.51			(0.41	)		(0.06	)		(0.50	)

Total from investment operations			0.79			0.23			0.68			0.08

Less distributions:
	Declared from net investment income		(0.28	)		(0.64	)		(0.74	)		(0.58	)
	From capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.28	)		(0.64	)		(0.74	)		(0.58	)

Net asset value, end of period		$	8.58		$	8.07		$	8.48		$	8.54

Total return⁽²⁾		10.12		%	3.02		%	8.46		%	0.90		%
Net assets, end of period (000 omitted)		$9,978			$6,269			$1,895			$442
Ratio of expenses to average net assets including voluntary expense waiver			1.43	%⁽³⁾		0.91	%		0.84	%		1.05	%⁽³⁾
Ratio of net investment income to average net assets including voluntary expense waiver			7.02	%⁽³⁾		7.83	%		9.00	%		9.01	%⁽³⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		- -	⁽⁴⁾		1.44	%		1.14	%		1.42	%⁽³⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver			- -	⁽⁴⁾		7.30	%		8.70	%		8.64	%⁽³⁾
Portfolio turnover rate		47.39		%	52.20		%	82.42		%	114.89		%⁽⁵⁾

(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)Annualized.
(4)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.
(5)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

HIGH INCOME FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:


		For the six months ended			For the fiscal year ended March 31,					For the period from 7-18-00⁽¹⁾ to
		9-30-03			2003			2002		3-31-01
Net asset value, beginning of period		$	8.07		$	8.48		$	8.54		$	9.03

Income (loss) from investment operations:
	Net investment income		0.26			0.56			0.68			0.48
	Net realized and unrealized gain (loss) on investments		0.51			(0.41	)		(0.06	)		(0.49	)

Total from investment operations			0.77			0.15			0.62			(0.01	)

Less distributions:
	Declared from net investment income		(0.26	)		(0.56	)		(0.68	)		(0.48	)
	From capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.26	)		(0.56	)		(0.68	)		(0.48	)

Net asset value, end of period		$	8.58		$	8.07		$	8.48		$	8.54

Total return		9.64		%	2.06		%	7.64		%	0.09		%
Net assets, end of period (in millions)		$2			$2			$1			$1
Ratio of expenses to average net assets including voluntary expense waiver		2.30		%⁽²⁾	1.84		%	1.74		%	1.85		%⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver		6.14		%⁽²⁾	6.90		%	8.09		%	8.30		%⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver		- -		⁽³⁾	2.37		%	2.36		%	2.50		%⁽²⁾
Ratio of net investment income to average net assets excluding voluntary expense waiver		- -		⁽³⁾	6.37		%	7.47		%	7.65		%⁽²⁾
Portfolio turnover rate		47.39		%	52.20		%	82.42		%	114.89		%⁽⁴⁾
(1)Commencement of operations of the class.
(2)Annualized.
(3)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.
(4)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

HIGH INCOME FUND
Class C Shares⁽¹⁾For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended				For the fiscal year ended March 31,
		9-30-03			2003			2002			2001			2000			1999

Net asset value, beginning of period		$	8.07		$	8.48		$	8.54		$	9.27		$	9.94		$	10.79

Income (loss) from investment operations:
	Net investment income	0.26			0.57			0.68			0.73			0.69			0.63
	Net realized and unrealized gain (loss) on investments	0.51			(0.41		)	(0.06		)	(0.73		)	(0.67		)	(0.82		)

Total from investment operations		0.77			0.16			0.62			0.00			0.02			(0.19		)

Less distributions:
	Declared from net investment income	(0.26		)	(0.57		)	(0.68		)	(0.73		)	(0.69		)	(0.63		)
	From capital gains	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.03		)

Total distributions		(0.26		)	(0.57		)	(0.68		)	(0.73		)	(0.69		)	(0.66		)

Net asset value, end of period		$	8.58		$	8.07		$	8.48		$	8.54		$	9.27		$	9.94

Total return		9.68		%	2.15		%	7.58		%	0.18		%	0.17		%	- -1.72		%
Net assets, end of period (in millions)		$21			$18			$17			$19			$23			$25
Ratio of expenses to average net assets including voluntary expense waiver		2.23		%⁽²⁾	1.74		%	1.82		%	1.78		%	2.17		%	2.20		%
Ratio of net investment income to average net assets including voluntary expense waiver		6.19		%⁽²⁾	7.05		%	8.01		%	8.38		%	7.16		%	6.29		%
Ratio of expenses to average net assets excluding voluntary expense waiver		- -		⁽³⁾	2.27		%	2.46		%	2.41		%	2.26		%	- -
Ratio of net investment income to average net assets excluding voluntary expense waiver		- -		⁽³⁾	6.52		%	7.36		%	7.75		%	7.07		%	- -
Portfolio turnover rate		47.39		%	52.20		%	82.42		%	114.89		%	71.31		%	50.98		%
(1)See Note 5.
(2)Annualized.
(3)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.

FINANCIAL HIGHLIGHTS

HIGH INCOME FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended				For the fiscal year ended March 31,											For the period from 12-30-98⁽¹⁾
		9-30-03				2003			2002			2001			2000		3-31-99

Net asset value, beginning of period			$	8.07		$	8.48		$	8.54		$	9.27		$	9.94		$	9.97

Income (loss) from investment operations:
	Net investment income		0.30			0.64			0.75			0.78			0.77			0.20
	Net realized and unrealized gain (loss) on investments		0.51			(0.41		)	(0.06		)	(0.73		)	(0.67		)	0.00

Total from investment operations			0.81			0.23			0.69			0.05			0.10			0.20

Less distributions:
	Declared from net investment income		(0.30		)	(0.64		)	(0.75		)	(0.78		)	(0.77		)	(0.20		)
	From capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.03		)

Total distributions			(0.30		)	(0.64		)	(0.75		)	(0.78		)	(0.77		)	(0.23		)

Net asset value, end of period			$	8.58		$	8.07		$	8.48		$	8.54		$	9.27		$	9.94

Total return			10.19		%	3.03		%	8.50		%	0.79		%	0.94		%	2.45		%
Net assets, end of period (000 omitted)			$10,515			$3,643			$64			$12			$6			$6
Ratio of expenses to average net assets including voluntary expense waiver			1.29		%⁽²⁾	1.08		%	0.79		%	1.20		%	1.40		%	0.26		%⁽²⁾
Ratio of net investment income to average net assets including voluntary expense waiver			7.13		%⁽²⁾	7.22		%	8.99		%	8.95		%	7.85		%	8.55		%⁽²⁾
Ratio of expenses to average net assets excluding voluntary expense waiver			- -		⁽³⁾	1.61		%	1.08		%	1.62		%	1.46		%	- -
Ratio of net investment income to average net assets excluding voluntary expense waiver			- -		⁽³⁾	6.69		%	8.71		%	8.52		%	7.79		%	- -
Portfolio turnover rate			47.39		%	52.20		%	82.42		%	114.89		%	71.31		%	50.98		%⁽⁴⁾
(1)Commencement of operations of the class. (2)Annualized. (3)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided. (4)For the fiscal year ended March 31, 1999.

SHAREHOLDER SUMMARY OF INTERNATIONAL GROWTH FUND

GOALS

International Growth Fund

To seek long-term appreciation of capital as a primary goal and current income as a secondary goal.

Strategy

Invests primarily in common stocks of foreign companies that have the potential to provide long-term growth. The Fund emphasizes growth stocks which are securities of companies whose earnings are likely to grow faster than the economy.

Founded

1992

Scheduled Dividend Frequency

Annually (December)

Performance Summary - Class C Shares


Per Share Data
For the Six Months Ended September 30, 2003

Net asset value on
9-30-03	$8.63
3-31-03	7.40

Change per share	$1.23

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF INTERNATIONAL GROWTH FUND


Average Annual Total Return^(A)
	Class A		Class B
	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}
Period	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}

1-year period ended 9-30-03	7.04%	13.57%	8.32%	12.32%
5-year period ended 9-30-03	-	---	-	---
10-year period ended 9-30-03	-	---	-	---
Since inception of Class ^{^(F)}	-19.75%	-18.27%	-19.99%	-19.46%

(B)Performance data is based on deduction of 5.75% sales load on the initial purchase in the periods.

(C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)7-3-00 for Class A shares and 7-10-00 for Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^{^(B)}	Class Y^{^(C)}

1-year period ended 9-30-03	12.52%	14.41%
5-year period ended 9-30-03	0.79%	1.96%
10-year period ended 9-30-03	5.82%	-
Since inception of Class ^{^(D)}	-	7.60%

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)12-29-95 for Class Y shares (the date on which shares were first acquired by shareholders).

International investing involves special risks, including political, economic and currency risks.

SHAREHOLDER SUMMARY OF INTERNATIONAL GROWTH FUND

Portfolio Highlights

On September 30, 2003, International Growth Fund had net assets totaling $68,959,279 invested in a diversified portfolio of:


97.04%		Common Stocks
2.96%		Cash and Cash Equivalents


As a shareholder of International Growth Fund, for every $100 you had invested on September 30, 2003, your Fund was invested by geographic region and by industry, respectively, as follows:
	Europe	$	58.24
	Pacific Basin	$	30.18
	Scandinavia	$	3.55
	Cash and Cash Equivalents	$	2.96
	Canada	$	2.71
	Caribbean	$	0.93
	Mexico	$	0.89
	Middle East	$	0.54


	Financial Services Stocks	$	23.17
	Health Care Stocks	$	10.63
	Business Equipment and Services Stocks	$	8.60
	Consumer Services Stocks	$	7.55
	Energy Stocks	$	6.45
	Consumer Nondurables Stocks	$	6.29
	Capital Goods Stocks	$	6.18
	Utilities Stocks	$	5.61
	Consumer Durables Stocks	$	4.90
	Retail Stocks	$	4.62
	Miscellaneous Stocks	$	4.55
	Technology Stocks	$	4.42
	Multi-Industry Stocks	$	4.07
	Cash and Cash Equivalents	$	2.96

THE INVESTMENTS OF INTERNATIONAL GROWTH FUND

September 30, 2003






	Shares		Value

COMMON STOCKS
Australia - 3.84%
News Corporation Limited (The) (A)	112,730	$	922,087
Novogen LTD (A)*	474,580		1,727,792
			2,649,879
Austria - 1.57%
Erste Bank der oesterreichischen Sparkassen AG (A)	10,700		1,082,815

Canada - 2.71%
EnCana Corporation (A)	28,100	1,017,317
Shoppers Drug Mart Corporation (A)(B)	42,600	849,981
			1,867,298
Cayman Islands- 0.93%
Lee & Man Paper Manufacturing Limited (A)(B)*	1,100,000		642,722

Denmark- 1.13%
GN Store Nord as (A)*	140,000		777,717

Finland - 1.36%
KONE Corporation, Class B (A)	19,000		937,357

France - 7.96%
Cap Gemini SA (A)*	8,000	331,849
Lafarge (A)	8,000	518,747
Publicis Groupe S.A. (A)	30,000	824,262
Sanofi-Synthelabo (A)	11,810	718,325
Societe Generale, Class A (A)	2,700	179,953
TF1 SA (A)	25,000	740,776
TotalFinaElf, S.A. (A)	9,620	1,452,715
VINCI (A)	10,000	720,676
			5,487,303
Germany - 9.34%
Allianz Aktiengesellschaft, Registered Shares (A)	11,400	998,903
Deutsche Post AG (A)	12,000	202,745
Deutsche Telekom AG, Registered Shares (A)*	55,210	794,484
Infineon Technologies AG (A)*	51,500	670,887
Linde AG (A)	8,700	356,831
MEDION AG (A)	10,500	410,471
Munchener Ruckversicherungs - Gesellschaft Aktiengesellschaft(A)	5,500	546,782
PUMA Aktiengesellschaft Rudolf Dassler Sport (A)	9,800	1,238,957
Siemens AG (A)	20,522	1,219,524
			6,439,584
Greece - 3.43%
Alpha Bank (A)*	70,000		1,445,314
OPAP S.A. (A)(B)	75,000	917,595
			2,362,909
Hong Kong - 4.16%
China Mobile (Hong Kong) Limited (A)	130,000	343,280
Hutchison Whampoa Limited, Ordinary Shares (A)	153,000	1,116,226
Johnson Electric Holdings Limited (A)	330,000	509,207
Sun Hung Kai Properties Limited (A)	110,700	896,961
			2,865,674
India - 0.64%
Infosys Technologies Limited	6,500		444,048

Ireland - 1.68%
DePfa Deutsche Pfandbriefbank AG (A)	12,100		1,160,341

Israel - 0.54%
Check Point Software Technologies Ltd.*	22,300		375,086

Italy - 3.08%
Alleanza Assicurazioni S.p.A. (A)	60,000	578,172
Banca Nazionale Lavoro S.p.A. (A)*	350,000	691,255
Eni S.p.A. (A)	56,000	856,096
			2,125,523
Japan - 18.54%
ACOM CO., LTD (A)	4,200	188,828
AIFUL Corporation (A)	3,600	217,741
Canon Inc. (A)	20,930	1,025,511
Dentsu Inc. (A)	225	938,888
Fuji Photo Film Co., Ltd. (A)	21,000	618,118
Funai Electric Co., Ltd. (A)	2,900	387,760
Hokuto Corporation (A)	20	290
Kyocera Corporation (A)	11,900	704,805
Mitsubishi Corporation (A)	105,000	901,736
NTT DoCoMo, Inc. (A)	300	734,958
Nintendo Co., Ltd. (A)	5,700	478,772
Nippon Television Network Corporation (A)	6,000	879,795
Nippon Yusen Kabushiki Kaisha (A)	100,000	395,746
Nissan Motor Co., Ltd. (A)	63,700	688,819
Nomura Holdings, Inc. (A)	87,600		1,414,995
ORIX Corporation (A)	11,000	861,758
Promise Co., Ltd. (A)	4,800	211,065
Ricoh Company, Ltd. (A)	64,000	1,142,908
Sumitomo Chemical Company, Limited (A)	181,000	661,076
Takeda Chemical Industries, Ltd. (A)	9,000	328,712
			12,782,281
Korea - 1.48%
Samsung Electronics Co., Ltd. (A)	3,000		1,022,475

Mexico - 0.89%
Grupo Televisa, S.A., GDR	16,700		611,053

Netherlands - 3.71%
ASML Holding N.V. (A)*	35,000	458,798
ING Groep N.V., Certicaaten Van Aandelen (A)	40,010	733,327
Koninklijke Philips Electronics N.V., Ordinary Shares (A)	30,000	680,244
Royal Dutch Petroleum Company (A)	15,700	689,853
			2,562,222
Singapore - 1.52%
DBS Group Holdings Ltd (A)	141,000		1,051,935

Spain - 0.78%
Enagas, S.A. (A)	21,500	188,139
Telefonica, S.A. (A)	29,400	347,365
			535,504
Sweden - 1.06%
Telefonaktiebolaget LM Ericsson, Class B (A)*	500,800		730,491

Switzerland - 9.76%
Adecco S.A. (A)	4,350	214,996
Baloise-Holding, Registered Shares (A)	11,500	428,136
Credit Suisse Group, Registered Shares (A)	46,000	1,472,125
Nestle S.A., Registered Shares (A)	3,600	830,329
Novartis AG, Registered Shares (A)	40,020	1,549,024
Roche Holdings AG, Genussschein (A)	18,500	1,534,427
Zurich Financial Services (A)*	5,600	699,894
			6,728,931
United Kingdom - 16.93%
BP p.l.c. (A)	62,000		425,597
British Sky Broadcasting Group plc (A)*	111,000	1,133,710
Compass Group PLC (A)	144,000	830,518
GlaxoSmithKline plc (A)	71,000	1,473,934
HBOS plc (A)	33,800	386,511
HSBC Holdings plc (A)	57,700	760,992
NEXT plc (A)	9,790	182,897
Reckitt Benckiser plc (A)	82,000	1,649,136
Rio Tinto plc (A)	16,200	345,461
Royal Bank of Scotland Group plc (The) (A)	33,687	856,665
tesco plc (A)	330,000	1,321,868
Vodafone Group Plc (A)	734,100	1,464,177
WPP Group plc (A)	100,000	843,516
			11,674,982

TOTAL COMMON STOCKS - 97.04%		$	66,918,130

(Cost: $60,584,116)

TOTAL SHORT-TERM SECURITIES - 0.13%		$	92,000

(Cost: $92,000)

TOTAL INVESTMENT SECURITIES - 97.17%		$	67,010,130

(Cost: $60,676,116)

CASH AND OTHER ASSETS, NET OF LIABILITIES- 2.83%			1,949,149


NET ASSETS - 100.00%		$	68,959,279

Notes to Schedule of Investments

*No income dividends were paid during the preceding 12 months.

(A)Listed on an exchange outside the United States.

(B)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2003, the total value of these securities amounted to $2,410,298 or 3.50% of net assets.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

INTERNATIONAL GROWTH FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities - at value (cost - $60,676)
		(Notes 1 and 3)			$	67,010
	Receivables:
		Investment securities sold			2,658
		Fund shares sold			588
		Dividends and interest			297

			Total assets		70,553

LIABILITIES
	Payable for investment securities purchased				1,013
	Payable to Fund shareholders				309
	Accrued shareholder servicing (Note 2)				62
	Due to custodian				7
	Accrued accounting and administrative services fees (Note 2)				4
	Accrued distribution and service fees (Note 2)				2
	Accrued management fee (Note 2)				2
	Other				195

			Total liabilities		1,594

				Total net assets	$	68,959

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	79
		Additional paid-in capital			132,885
	Accumulated undistributed income (loss):
		Accumulated undistributed net investment income			587
		Accumulated undistributed net realized loss
			on investment transactions		(70,945		)
		Net unrealized appreciation in value of investments			6,353

			Net assets applicable to outstanding units of capital		$	68,959

Net asset value per share (net assets divided by shares outstanding):
	Class A					$ 8.87
	Class B					$ 8.57
	Class C					$ 8.63
	Class Y					$ 9.61
Capital shares outstanding:
	Class A				1,165
	Class B				506
	Class C				5,668
	Class Y				558
Capital shares authorized					400,000

STATEMENT OF OPERATIONS

INTERNATIONAL GROWTH FUND
For the Six Months Ended September 30, 2003
(In Thousands)


INVESTMENT LOSS
	Income (Note 1B):
		Dividends (net of foreign withholding taxes of $96)			$	941
		Interest and amortization			21

			Total income		962

	Expenses (Note 2):
		Investment management fee			301
		Shareholder servicing:
			Class A		28
			Class B		16
			Class C		176
			Class Y		8
		Distribution fee:
			Class A		1
			Class B		13
			Class C		184
			Class Y		12
		Custodian fees			96
		Service fee:
			Class A		11
			Class B		4
			Class C		61
		Accounting and administrative services fees			21
		Audit fees			18
		Legal fees			4
		Other			84

			Total expenses		1,038

				Net investment loss	(76		)

REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTES 1 AND 3)
	Realized net loss on securities				(14,456		)
	Realized net gain on foreign currency transactions				665

		Realized net loss on investments			(13,791		)
	Unrealized appreciation in value of investments during the period				10,645

		Net loss on investments			(3,146		)

			Net decrease in net assets resulting from operations		$	(3,222	)

STATEMENT OF CHANGES IN NET ASSETS

INTERNATIONAL GROWTH FUND
(In Thousands)

					For the six months ended September 30, 2003			For the fiscal year ended March 31, 2003

INCREASE (DECREASE) IN NET ASSETS
	Operations:
		Net investment loss			$	(76	)	$	(499	)
		Realized net loss on investments			(13,791		)	(15,735		)
		Unrealized appreciation (depreciation)			10,645			(2,857		)

			Net decrease in net assets
				resulting from operations	(3,222		)	(19,091		)

	Distributions to shareholders from
		realized gains on investment
		transactions (Note 1F):⁽¹⁾
			Class A		- -			- -
			Class B		- -			- -
			Class C		- -			- -
			Class Y		- -			- -

					- -			- -

	Capital share transactions (Note 5)				7,675			(7,585		)

		Total increase (decrease)			4,453			(26,676		)
NET ASSETS
	Beginning of period				64,506			91,182

	End of period					$ 68,959			$ 64,506

		Undistributed net investment income (loss)			$ 587				$ (2	)

(1)	See "Financial Highlights" on pages 67 - 70.

FINANCIAL HIGHLIGHTS

INTERNATIONAL GROWTH FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,						For the period from 7-3-00⁽¹⁾to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	7.57		$	9.82		$	12.03		$	24.33

Income (loss) from
	investment operations:
	Net investment loss		(0.08		)	(0.03		)	(0.17		)	(0.02		)
	Net realized and
		unrealized gain (loss)
		on investments	1.38			(2.22		)	(2.01		)	(6.46		)

Total from investment
	operations		1.30			(2.25		)	(2.18		)	(6.48		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)
	Capital gains		(0.00		)	(0.00		)	(0.03		)	(5.82		)

Total distributions			(0.00		)	(0.00		)	(0.03		)	(5.82		)

Net asset value,
	end of period		$	8.87		$	7.57		$	9.82		$	12.03

Total return⁽²⁾			17.17		%	- -22.91		%	- -18.12		%	- -29.73		%
Net assets, end of
	period (in millions)			$10			$5			$7			$5
Ratio of expenses to
	average net assets		2.36		%⁽³⁾	2.10		%	1.89		%	1.72		%⁽³⁾
Ratio of net investment
	income (loss) to
	average net assets		0.14		%⁽³⁾	- -0.10		%	- -0.49		%	- -0.31		%⁽³⁾
Portfolio turnover rate			120.17		%	107.62		%	133.83		%	103.03		%⁽⁴⁾

(1)Commencement of operations of the class.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

(4)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

INTERNATIONAL GROWTH FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,						For the period from 7-10-00⁽¹⁾to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	7.35		$	9.65		$	11.94		$	24.59

Income (loss) from
	investment operations:
	Net investment loss		(0.05		)	(0.11		)	(0.19		)	(0.09		)
	Net realized and
		unrealized gain (loss)
		on investments	1.27			(2.19		)	(2.07		)	(6.74		)

Total from investment
	operations		1.22			(2.30		)	(2.26		)	(6.83		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)
	Capital gains		(0.00		)	(0.00		)	(0.03		)	(5.82		)

Total distributions			(0.00		)	(0.00		)	(0.03		)	(5.82		)

Net asset value,
	end of period		$	8.57		$	7.35		$	9.65		$	11.94

Total return			16.60		%	- -23.83		%	- -18.93		%	- -30.89		%
Net assets, end of
	period (in millions)			$5			$2			$2			$2
Ratio of expenses to
	average net assets		3.41		%⁽²⁾	3.24		%	2.89		%	2.61		%⁽²⁾
Ratio of net investment
	loss to average net assets		- -1.26		%⁽²⁾	- -1.22		%	- -1.42		%	- -1.30		%⁽²⁾
Portfolio turnover rate			120.17		%	107.62		%	133.83		%	103.03		%⁽³⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

INTERNATIONAL GROWTH FUND
Class C Shares⁽¹⁾For a Share of Capital Stock Outstanding Throughout Each Period:


			For the six months ended			For the fiscal year ended March 31,
			9-30-03			2003			2002			2001			2000			1999

Net asset value,
	beginning of period		$	7.40		$	9.69		$	11.96		$	28.58		$	15.58		$	15.04

Income (loss) from
	investment operations:
	Net investment loss		(0.03		)	(0.08		)	(0.11		)	(0.17		)	(0.34		)	(0.07		)
	Net realized and
		unrealized gain (loss)
		on investments	1.26			(2.21		)	(2.13		)	(10.63		)	15.14			1.55

Total from investment
	operations		1.23			(2.29		)	(2.24		)	(10.80		)	14.80			1.48

Less distributions from:
	Net investment
		income	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)
	Capital gains		(0.00		)	(0.00		)	(0.03		)	(5.82		)	(1.80		)	(0.94		)

Total distributions			(0.00		)	(0.00		)	(0.03		)	(5.82		)	(1.80		)	(0.94		)

Net asset value,
	end of period		$	8.63		$	7.40		$	9.69		$	11.96		$	28.58		$	15.58

Total return			16.62		%	- -23.63		%	- -18.73		%	- - 40.45		%	97.89		%	10.36		%
Net assets, end of
	period (in millions)			$49			$46			$74			$123			$233			$100
Ratio of expenses to
	average net assets		3.16		%⁽²⁾	2.93		%	2.62		%	2.36		%	2.37		%	2.35		%
Ratio of net investment
	loss to average net
	assets		- -0.47		%⁽²⁾	- -0.86		%	- -1.03		%	- -1.03		%	- -1.48		%	- -0.53		%
Portfolio turnover rate			120.17		%	107.62		%	133.83		%	103.03		%	125.71		%	116.25		%

(1)See Note 5.

(2)Annualized.

FINANCIAL HIGHLIGHTS

INTERNATIONAL GROWTH FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended				For the fiscal year ended March 31,
			9-30-03				2003			2002			2001			2000			1999

Net asset value,
	beginning of period		$	8.17		$	10.55		$	12.87		$	29.86		$	16.08		$	15.35

Income (loss) from
	investment operations:
	Net investment
		income (loss)		0.05			(0.16	)		(0.18	)		(0.17	)		(1.41	)		0.05
	Net realized and
		unrealized gain (loss)
		on investments		1.39			(2.22	)		(2.11	)		(11.00	)		16.99			1.62

Total from investment
	operations			1.44			(2.38	)		(2.29	)		(11.17	)		15.58			1.67

Less distributions from:
	Net investment
		income		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)
	Capital gains			(0.00	)		(0.00	)		(0.03	)		(5.82	)		(1.80	)		(0.94	)

Total distributions				(0.00	)		(0.00	)		(0.03	)		(5.82	)		(1.80	)		(0.94	)

Net asset value,
	end of period		$	9.61		$	8.17		$	10.55		$	12.87		$	29.86		$	16.08

Total return				17.63	%		- -22.56	%		- -17.79	%		- -39.91	%		99.74	%		11.41	%
Net assets, end of
	period (000 omitted)			$5,369			$11,205			$8,314			$6,594			$5,296			$629
Ratio of expenses to
	average net assets			1.87	%⁽¹⁾		1.63	%		1.52	%		1.44	%		1.48	%		1.44	%
Ratio of net investment
	income (loss) to
	average net assets			1.10	%⁽¹⁾		0.39	%		- -0.11	%		- -0.02	%		- -0.80	%		0.36	%
Portfolio turnover rate				120.17	%		107.62	%		133.83	%		103.03	%		125.71	%		116.25	%

(1)Annualized.

SHAREHOLDER SUMMARY OF LARGE CAP GROWTH FUND

GOAL

Large Cap Growth Fund

To seek the appreciation of your investment.

Strategy

Invests primarily in a diversified portfolio of common stocks issued by growth-oriented large to medium sized United States and foreign companies that the Fund's investment manager believes have appreciation potential.

Founded

2000

Scheduled Dividend Frequency

Annually (December)

Performance Summary - Class A Shares


Per Share Data
For the Six Months Ended September 30, 2003

Net asset value on
9-30-03	$8.34
3-31-03	7.24

Change per share	$1.10

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF LARGE CAP GROWTH FUND


Average Annual Total Return^(A)
	Class A		Class B
	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}
Period	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}

1-year period ended 9-30-03	13.59%	20.52%	14.55%	18.55%
5-year period ended 9-30-03	-	-	-	-
10-year period ended 9-30-03	-	-	-	-
Since inception of Class^{^(F)}	-6.85%	-5.14%	-7.49%	-6.61%

(B)Performance data is based on deduction of 5.75% sales load on the initial purchase in the periods.

(C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)6-30-00 for Class A shares and 7-6-00 for Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^{^(B)}	Class Y^{^(C)}

1-year period ended 9-30-03	19.24%	20.61%
5-year period ended 9-30-03	-	-
10-year period ended 9-30-03	-	-
Since inception of Class ^{^(D)}	-6.05%	-5.10%

(B)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 1.00% which declines to zero at the end of the first year after investment. Accordingly, these returns reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase.

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)7-3-00 for Class C shares and 7-6-00 for Class Y shares (the date on which shares were first acquired by shareholders).

SHAREHOLDER SUMMARY OF LARGE CAP GROWTH FUND

Portfolio Highlights

On September 30, 2003, Large Cap Growth Fund had net assets totaling $41,164,148 invested in a diversified portfolio of:


98.55%	Common Stocks
1.45%	Cash and Cash Equivalents


As a shareholder of Large Cap Growth Fund, for every $100 you had invested on September 30, 2003, your Fund owned:

	Technology Stocks	$	41.47
	Health Care Stocks	$	24.59
	Financial Services Stocks	$	10.18
	Miscellaneous Stocks	$	6.75
	Retail Stocks	$	5.17
	Energy Stocks	$	4.24
	Consumer Durables Stocks	$	3.62
	Consumer Services Stocks	$	2.53
	Cash and Cash Equivalents	$	1.45

THE INVESTMENTS OF LARGE CAP GROWTH FUND

September 30, 2003


	Shares		Value

COMMON STOCKS
Air Transportation - 0.96%
JetBlue Airways Corporation*	6,500	$	396,858

Apparel - 1.49%
Coach, Inc.*	11,250		614,250

Banks - 1.58%
Bank of America Corporation	5,700	444,828
Wells Fargo & Company	4,000	206,000
			650,828
Business Equipment and Services - 1.02%
Manpower Inc.	11,350		421,085

Chemicals - Specialty - 1.36%
Praxair, Inc.	9,050		560,648

Communications Equipment - 2.80%
Cisco Systems, Inc.*	59,000		1,153,450

Computers - Micro - 1.86%
Dell Inc. *	22,850		763,304

Computers - Peripherals - 21.07%
EMC Corporation*	167,661	2,117,558
Electronic Arts Inc.*	18,050	1,664,932
Microsoft Corporation	74,200	2,063,502
SAP Aktiengesellschaft, ADR	62,450	1,899,105
VERITAS Software Corporation*	29,500	928,365
			8,673,462
Consumer Electronics - 2.00%
Harman International Industries, Incorporated	8,350		821,223

Electronic Components - 14.72%
Analog Devices, Inc.*	34,700	1,319,294
Intel Corporation	68,000	1,871,360
Linear Technology Corporation	19,100	685,308
Maxim Integrated Products, Inc.	12,950	509,906
Microchip Technology Incorporated	44,900	1,078,049
Xilinx, Inc.*	20,950	595,923
			6,059,840
Electronic Instruments - 1.02%
Applied Materials, Inc.*	23,100		418,803

Finance Companies - 2.65%
SLM Corporation	27,950		1,088,932

Health Care - Drugs - 13.18%
Amgen Inc.*	37,850	2,442,650
Gilead Sciences, Inc.*	23,100	1,292,329
Pfizer Inc.	25,150	764,057
Teva Pharmaceutical Industries Limited, ADR	16,200	926,640
			5,425,676
Health Care - General - 6.38%
Boston Scientific Corporation*	16,600	1,059,080
Zimmer Holdings, Inc.*	28,450	1,567,595
			2,626,675
Hospital Supply and Management - 5.03%
Health Management Associates, Inc., Class A	19,250	419,842
Medtronic, Inc.	35,200	1,651,584
			2,071,426
Hotels and Gaming - 2.53%
International Game Technology	36,950		1,040,142

Motor Vehicle Parts - 1.52%
AutoZone, Inc.*	7,000		626,710

Motor Vehicles - 0.10%
Harley-Davidson, Inc.	850		40,970

Multiple Industry - 0.49%
Garmin Ltd.*	4,850		203,094

Nonresidential Construction - 1.43%
Chicago Bridge & Iron Company N.V., NY shares	21,650		588,014

Petroleum - Services - 4.24%
Smith International, Inc.*	48,500		1,745,030

Retail - General Merchandise - 3.69%
Dollar General Corporation	45,600	912,000
Target Corporation	5,100	191,913
Wal-Mart Stores, Inc.	7,400	413,290
			1,517,203
Retail - Specialty Stores - 1.48%
Lowe's Companies, Inc.	11,750		609,825

Security and Commodity Brokers - 5.95%
Chicago Mercantile Exchange Holdings Inc.	14,650		1,008,066
Goldman Sachs Group, Inc. (The)	12,450		1,044,555
Legg Mason, Inc.	5,500		397,100
			2,449,721

TOTAL COMMON STOCKS - 98.55%		$	40,567,169

(Cost: $36,339,576)





SHORT-TERM SECURITIES - 1.21%	Principal Amount in Thousands


Repurchase Agreement
J.P. Morgan Securities Inc., 0.83% Repurchase Agreement dated 9-30-03, to be repurchased at $497,011 on 10-1-03(A)	$ 497		497,000
(Cost: $497,000)

TOTAL INVESTMENT SECURITIES - 99.76%		$	41,064,169

(Cost: $36,836,576)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.24%			99,979


NET ASSETS - 100.00%		$	41,164,148

Notes to Schedule of Investments

*No income dividends were paid during the preceding 12 months.

(A)Collateralized by $494,000 United States Treasury Note, 4.25% due 8-15-13; market value and accrued interest aggregate $508,057.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

LARGE CAP GROWTH FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities--at value (cost - $36,837)
	(Notes 1 and 3)			$	41,064
	Cash			1
	Receivables:
		Fund shares sold		190
		Dividends and interest		18

			Total assets	41,273

LIABILITIES
	Payable to Fund shareholders			75
	Accrued shareholder servicing (Note 2)			17
	Accrued accounting and administrative services fees (Note 2)			2
	Accrued distribution and service fees (Note 2)			1
	Accrued management fee (Note 2)			1
	Other			13

		Total liabilities		109

			Total net assets	$	41,164

NET ASSETS
	$0.01 par value capital stock:
		Capital stock		$	50
		Additional paid-in capital		50,563
	Accumulated undistributed income (loss):
		Accumulated undistributed net investment loss		(209		)
		Accumulated undistributed net realized loss on
			investment transactions	(13,468		)
		Net unrealized appreciation in value of investments		4,228

			Net assets applicable to outstanding units of capital	$	41,164

Net asset value per share (net assets divided by shares outstanding):
	Class A			$	8.34
	Class B			$	7.99
	Class C			$	8.12
	Class Y			$	8.37
Capital shares outstanding:
	Class A			3,550
	Class B			399
	Class C			906
	Class Y			122
Capital shares authorized				400,000

STATEMENT OF OPERATIONS

LARGE CAP GROWTH FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT LOSS
	Income (Note 1B):
		Dividends (net of foreign withholding taxes of $2)			$	115
		Interest and amortization			17

			Total income		132

	Expenses (Note 2):
		Investment management fee			119
		Shareholder servicing:
			Class A		40
			Class B		13
			Class C		15
			Class Y		1
		Service fee:
			Class A		29
			Class B		3
			Class C		7
		Distribution fee:
			Class A		2
			Class B		10
			Class C		22
			Class Y		1
		Registration fees			39
		Accounting and administrative services fees			13
		Audit fees			12
		Custodian fees			4
		Other			11

			Total expenses		341

				Net investment loss	(209		)

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
	Realized net loss on investments				(717		)
	Unrealized appreciation in value of investments during the period				5,074

		Net gain on investments			4,357

			Net increase in net assets resulting from operations		$	4,148

STATEMENT OF CHANGES IN NET ASSETS

LARGE CAP GROWTH FUND
(In Thousands)

					For the six months ended September 30, 2003			For the fiscal year ended March 31, 2003

INCREASE (DECREASE) IN NET ASSETS
	Operations:
		Net investment loss			$	(209	)	$	(135	)
		Realized net loss on investments			(717		)	(3,465		)
		Unrealized appreciation (depreciation)			5,074			(2,633		)

			Net increase (decrease) in net assets
				resulting from operations	4,148			(6,233		)

	Distributions to shareholders from
		net investment income (Note 1F):⁽¹⁾
		Class A			- -			- -
		Class B			- -			- -
		Class C			- -			- -
		Class Y			- -			- -

					- -			- -

	Capital share transactions (Note 5)				9,207			4,829


		Total increase (decrease)			13,355			(1,404		)
NET ASSETS
	Beginning of period				27,809			29,213

	End of period				$	41,164		$	27,809

		Undistributed net investment income (loss)			$	(209	)	$	-	*

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 79 - 85.

FINANCIAL HIGHLIGHTS

LARGE CAP GROWTH FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:


			For the six months ended			For the fiscal year ended March 31,						For the period from 6-30-00⁽¹⁾ to
			9-30-03			2003			2002			3-31-01
Net asset value,
	beginning of period		$	7.24		$	9.21		$	9.48		$	10.00

Income (loss) from
	investment operations:
	Net investment
		income (loss)	(0.04		)	(0.03		)	(0.04		)	0.05
	Net realized and unrealized
		gain (loss) on
		investments	1.14			(1.94		)	(0.23		)	(0.45		)

Total from investment
	operations		1.10			(1.97		)	(0.27		)	(0.40		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.06		)
	Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.06		)

Total distributions			(0.00		)	(0.00		)	(0.00		)	(0.12		)
Net asset value, end of period			$	8.34		$	7.24		$	9.21		$	9.48

Total return⁽²⁾			15.19		%	- -21.39		%	- -2.85		%	- - 4.27		%
Net assets, end of
	period (in millions)			$30			$21			$20			$19
Ratio of expenses to average net
	assets including voluntary
	expense waiver		1.73		%⁽³⁾	1.28		%	1.58		%	1.13		%⁽³⁾
Ratio of net investment
	income (loss) to average net
	assets including voluntary
	expense waiver		- -0.96		%⁽³⁾	- -0.23		%	- -0.38		%	0.89		%⁽³⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		- -		⁽⁴⁾	1.66		%	1.69		%	1.34		%⁽³⁾
Ratio of net investment
	income (loss) to average net
	assets excluding voluntary
	expense waiver		- -		⁽⁴⁾	- -0.61		%	- -0.49		%	0.68		%⁽³⁾
Portfolio turnover rate			39.31		%	71.98		%	98.59		%	75.42		%

(1)Commencement of operations of the class.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

(4)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.

FINANCIAL HIGHLIGHTS

LARGE CAP GROWTH FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:


			For the six months ended			For the fiscal year ended March 31,						For the period from 7-6-00⁽¹⁾ to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	6.99		$	9.05		$	9.44		$	10.02

Income (loss) from
	investment operations:
	Net investment loss		(0.00		)	(0.14		)	(0.16		)	(0.03		)
	Net realized and
		unrealized gain (loss)
		on investments	1.00			(1.92		)	(0.23		)	(0.49		)

Total from investment
	operations		1.00			(2.06		)	(0.39		)	(0.52		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.00		)
	Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.06		)

Total distributions			(0.00		)	(0.00		)	(0.00		)	(0.06		)

Net asset value,
	end of period		$	7.99		$	6.99		$	9.05		$	9.44

Total return			14.31		%	- -22.76		%	- - 4.13		%	- -5.32		%
Net assets, end of
	period (in millions)			$3			$2			$2			$2
Ratio of expenses to average net
	assets including voluntary
	expense waiver		3.19		%⁽²⁾	2.93		%	2.98		%	2.53		%⁽²⁾
Ratio of net investment loss to
	average net assets including
	voluntary expense waiver		- -2.41		%⁽²⁾	- -1.87		%	- -1.79		%	- -0.60		%⁽²⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		- -		⁽³⁾	3.31		%	3.19		%	3.00		%⁽²⁾
Ratio of net investment loss to
	average net assets excluding
	voluntary expense waiver		- -		⁽³⁾	- -2.25		%	- -2.00		%	- -1.07		%⁽²⁾
Portfolio turnover rate			39.31		%	71.98		%	98.59		%	75.42		%

(1)Commencement of operations of the class.

(2)Annualized.

(3)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.

FINANCIAL HIGHLIGHTS

LARGE CAP GROWTH FUND
Class C Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,						For the period from 7-30-00⁽¹⁾ to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	7.08		$	9.10		$	9.45		$	10.00

Income (loss) from
	investment operations:
	Net investment loss		(0.03		)	(0.10		)	(0.12		)	(0.00		)
	Net realized and
		unrealized gain (loss)
		on investments	1.07			(1.92		)	(0.23		)	(0.48		)

Total from investment
	operations		1.04			(2.02		)	(0.35		)	(0.48		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.01		)
	Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.06		)

Total distributions			(0.00		)	(0.00		)	(0.00		)	(0.07		)

Net asset value,
	end of period		$	8.12		$	7.08		$	9.10		$	9.45

Total return			14.69		%	- -22.28		%	- -3.60		%	- - 4.93		%
Net assets, end of
	period (in millions)			$7			$4			$7			$7
Ratio of expenses to average net
	assets including voluntary
	expense waiver		2.67		%⁽²⁾	2.26		%	2.51		%	2.06		%⁽²⁾
Ratio of net investment loss to
	average net assets including
	voluntary expense waiver		- -1.89		%⁽²⁾	- -1.20		%	- -1.31		%	- -0.08		%⁽²⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		- -		⁽³⁾	2.64		%	2.68		%	2.44		%⁽²⁾
Ratio of net investment loss to
	average net assets excluding
	voluntary expense waiver		- -		⁽³⁾	- -1.58		%	- -1.48		%	- -0.46		%⁽²⁾
Portfolio turnover rate			39.31		%	71.98		%	98.59		%	75.42		%

(1)Commencement of operations of the class.

(2)Annualized.

(3)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.

FINANCIAL HIGHLIGHTS

LARGE CAP GROWTH FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,						For the period from 7-6-00⁽¹⁾ to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	7.26		$	9.22		$	9.48		$	10.02

Income (loss) from
	investment operations:
	Net investment
		income (loss)	(0.03		)	(0.30		)	(0.01		)	0.09
	Net realized and
		unrealized gain (loss)
		on investments	1.14			(1.66		)	(0.25		)	(0.50		)

Total from investment
	operations		1.11			(1.96		)	(0.26		)	(0.41		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.07		)
	Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.06		)

Total distributions			(0.00		)	(0.00		)	(0.00		)	(0.13		)

Net asset value, end of period			$	8.37		$	7.26		$	9.22		$	9.48

Total return			15.29		%	- -21.26		%	- -2.74		%	- - 4.38		%
Net assets, end of
	period (000 omitted)		$	1,024		$	892		$	768		$	279
Ratio of expenses to average net
	assets including voluntary
	expense waiver		1.54		%⁽²⁾	1.05		%	1.36		%	1.13		%⁽²⁾
Ratio of net investment
	income (loss) to average net
	assets including voluntary
	expense waiver		- -0.76		%⁽²⁾	- -0.00		%	- -0.20		%	1.11		%⁽²⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		- -		⁽³⁾	1.43		%	1.45		%	1.34		%⁽²⁾
Ratio of net investment
	income (loss) to average net
	assets excluding voluntary
	expense waiver		- -		⁽³⁾	- -0.38		%	- -0.29		%	0.90		%⁽²⁾
Portfolio turnover rate			39.31		%	71.98		%	98.59		%	75.42		%

(1)Commencement of operations of the class.

(2)Annualized.

(3)Because the Fund's net assets exceeded $25 million, there was no waiver of expenses. Therefore, no ratio is provided.

SHAREHOLDER SUMMARY OF LIMITED-TERM BOND FUND

GOAL

Limited-Term Bond Fund

To seek a high level of current income consistent with preservation of capital.

Strategy

Invests primarily in investment-grade debt securities of United States issuers, including corporate bonds, mortgage-backed securities and United States Government securities. The Fund maintains a dollar-weighted average maturity of not less than two years and not more than five years. Please note that securities issued by U.S. Government sponsored entities, including the Federal Home Loan Mortgage Corporation ("Freddie Mac"), the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Banks ("FHLBs") are not funded by Congressional appropriations and the debt and mortgage-backed securities issued by them are neither guaranteed nor insured by the United States Government.

Founded

1992

Scheduled Dividend Frequency

Declared daily, paid monthly

Performance Summary - Class C Shares


Per Share Data
For the Six Months Ended September 30, 2003

Dividends paid	$0.11

Net asset value on
9-30-03	$10.47
3-31-03	10.45

Change per share	$ 0.02

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF LIMITED-TERM BOND FUND


Average Annual Total Return^(A)
	Class A		Class B
Period	With Sales Load^(B)	Without Sales Load^(C)	With CDSC^(D)	Without CDSC^(E)

1-year period ended 9-30-03	-0.49%	3.92%	-1.03%	2.97%
5-year period ended 9-30-03	-	-	-	-
10-year period ended 9-30-03	-	-	-	-
Since inception of Class^{^(F)}	5.03%	6.50%	4.85%	5.68%

(A)Performance data represents share price appreciation (depreciation), including reinvestment of all income and capital gains distributions. Performance data represents past performance and is no guarantee of future results. Share price, investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.

(B)Performance data is based on deduction of 4.25% sales load on the initial purchase in the periods. (C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)8-17-00 for Class A shares and 7-3-00 for Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^{^(B)}	Class Y^{^(C)}

1-year period ended 9-30-03	3.02%	3.93%
5-year period ended 9-30-03	4.35%	5.33%
10-year period ended 9-30-03	4.42%	-
Since inception of Class ^{^(D)}	-	5.48%

(A)Performance data represents share price appreciation (depreciation), including reinvestment of all income and capital gains distributions. Performance data represents past performance and is no guarantee of future results. Share price, investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.

(B)Performance data from 3-24-00 represents the actual performance of Class C shares. Performance data prior to 3-24-00 represents the performance of the Fund's original Class B shares. The original Class B shares were combined with Class C shares effective 3-24-00, and redesignated as Class C shares. The original Class B's performance has been adjusted to reflect the current contingent deferred sales charge (CDSC) structure applicable to Class C (1.00% maximum and declining to zero at the end of the first year after investment). Accordingly, these returns reflect no CDSC since it only applies to Class C shares redeemed within twelve months after purchase. New Class B shares, with fees and expenses different from the original Class B shares, were added to the Fund on 6-30-00.

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)12-29-95 for Class Y shares (the date on which shares were first acquired by shareholders).

SHAREHOLDER SUMMARY OF LIMITED-TERM BOND FUND

Portfolio Highlights

On September 30, 2003, Limited-Term Bond Fund had net assets totaling $73,067,658 invested in a diversified portfolio of:


97.42%		Bonds
2.58%		Cash and Cash Equivalents


As a shareholder of Limited-Term Bond Fund, for every $100 you had invested on September 30, 2003, your Fund owned:

	Corporate Bonds	$	62.07
	United States Government Agencies Securities	$	25.26
	United States Government Securities	$	10.09
	Cash and Cash Equivalents	$	2.58

THE INVESTMENTS OF LIMITED-TERM BOND FUND

September 30, 2003


		Principal Amount in Thousands			Value

CORPORATE DEBT SECURITIES
Aircraft - 2.78%
Raytheon Company,
	6.75%, 8-15-07	$	1,800	$	2,028,636

Banks - 2.10%
First Union Corporation,
	6.875%, 9-15-05	1,397			1,532,255

Broadcasting - 3.17%
Clear Channel Communications, Inc.,
	7.875%, 6-15-05	2,112			2,319,251

Business Equipment and Services - 3.08%
USA Waste Services, Inc.,
	7.125%, 10-1-07	2,000			2,246,668

Capital Equipment - 1.18%
John Deere Capital Corporation,
	5.125%, 10-19-06	800			862,530

Finance Companies - 4.27%
Aristar, Inc.,
	5.85%, 1-27-04	670		679,740
General Motors Acceptance Corporation,
	6.625%, 10-15-05	1,500		1,598,100
Grand Metropolitan Investment Corp.,
	7.125%, 9-15-04	800		843,451
					3,121,291
Food and Related - 4.04%
ConAgra, Inc.,
	7.4%, 9-15-04	2,100		2,209,414
Kellogg Company,
	4.875%, 10-15-05	700		742,888
					2,952,302
Forest and Paper Products - 1.35%
International Paper Company,
	6.125%, 11-1-03	985			988,548

Insurance - Life - 1.30%
American General Finance Corporation,
	6.75%, 11-15-04	900			952,071

Leisure Time Industry - 2.96%
Walt Disney Company (The),
	4.5%, 9-15-04		2,100		2,161,574

Multiple Industry - 11.14%
Ford Motor Credit Company,
	6.7%, 7-16-04	1,600		1,654,867
General Electric Capital Corporation,
	2.85%, 1-30-06	2,000		2,040,136
Honeywell International Inc.,
	6.875%, 10-3-05	1,100		1,212,781
Household Finance Corporation,
	6.5%, 1-24-06	950		1,042,407
National Rural Utilities Cooperative Finance Corporation,
	6.0%, 5-15-06	2,000		2,188,084
					8,138,275
Petroleum - Domestic - 1.57%
Anadarko Petroleum Corporation,
	5.375%, 3-1-07	1,060			1,149,919

Petroleum - International - 2.34%
Chevron Corporation Profit Sharing/Savings Plan Trust Fund,
	8.11%, 12-1-04	166		173,645
Conoco Inc.,
	5.9%, 4-15-04	1,500		1,536,870
					1,710,515
Railroad - 5.88%
Norfolk Southern Corporation,
	7.35%, 5-15-07	1,850		2,115,399
Union Pacific Corporation:
	7.6%, 5-1-05	1,450		1,585,550
	6.7%, 12-1-06	525		592,178
					4,293,127
Retail - Food Stores - 2.30%
Safeway Inc.,
	7.25%, 9-15-04	1,600			1,682,592

Security and Commodity Brokers - 2.29%
CIT Group Holdings, Inc. (The),
	6.625%, 6-15-05	600		648,929
Salomon Smith Barney Holdings Inc.,
	6.25%, 6-15-05	950		1,021,627
					1,670,556
Utilities - Electric - 7.16%
Dominion Resources, Inc.,
	7.625%, 7-15-05		2,200		2,414,658
Kansas City Power & Light Company,
	7.125%, 12-15-05	950		1,050,463
PacifiCorp,
	6.75%, 4-1-05	1,000		1,071,391
Wisconsin Energy Corporation,
	5.875%, 4-1-06	645		697,667
					5,234,179
Utilities - Telephone - 3.16%
GTE Corporation,
	6.36%, 4-15-06	2,100			2,309,777

TOTAL CORPORATE DEBT SECURITIES - 62.07%				$	45,354,066

(Cost: $44,017,291)


UNITED STATES GOVERNMENT SECURITIES


Agency Obligations - 2.06%
Federal National Mortgage Association,
	4.5%, 10-17-06	900		901,312
Tennessee Valley Authority,
	5.0%, 12-18-03	600		604,839

Total Agency Obligations				1,506,151

Mortgage-Backed Obligations - 23.20%
Federal Home Loan Mortgage Corporation, Agency REMIC/CMO,
	3.5%, 12-15-16	1,723		1,727,956
Federal Home Loan Mortgage Corporation, Fixed Rate Participation Certificates:
	4.5%, 5-1-10	1,388		1,412,621
	5.5%, 2-1-16	176		182,526
	5.5%, 1-1-17	466		482,659
	5.5%, 5-1-17	471		487,370
	4.5%, 4-1-18	1,847		1,864,287
Federal National Mortgage Association, Fixed Rate Pass-Through Certificates:
	8.0%, 2-1-08	14		14,783
	6.5%, 12-1-10	80		84,880
	6.0%, 1-1-11	106		110,608
	6.5%, 2-1-11	114		120,973
	7.0%, 5-1-11	57		61,194
	7.0%, 7-1-11	60		64,069
	7.0%, 9-1-12	52		55,201
	6.0%, 11-1-13	132		138,140
	7.0%, 9-1-14	103		109,362
	7.0%, 10-1-14	113		119,950
	6.0%, 6-1-16	132		138,108
	6.5%, 6-1-16	210		222,060
	5.5%, 2-1-17	1,187		1,229,111
	5.0%, 11-1-17	1,220		1,249,633
	5.5%, 1-1-18	1,536		1,590,213
	7.0%, 4-1-26	56		59,464
Government National Mortgage Association, Fixed Rate Pass-Through Certificates:
	6.5%, 1-15-14	158		167,637
	6.0%, 5-15-14	441		463,680
	5.5%, 1-15-17	650		677,109
	6.0%, 1-15-17	455		477,439
	5.5%, 7-15-17	1,306		1,361,261
	5.0%, 12-15-17	1,738		1,795,276
	7.0%, 10-15-28	202		215,582
	7.0%, 4-15-29	107		113,438
	7.0%, 7-15-29	146		155,017
Total Mortgage-Backed Obligations				16,951,607

Treasury Obligations - 10.09%
United States Treasury Bond,
	4.75%, 11-15-08	2,000		2,178,516
United States Treasury Notes:
	3.5%, 11-15-06	1,000		1,044,883
	5.0%, 8-15-11	2,000		2,187,656
	3.625%, 5-15-13	2,000		1,963,046
Total Treasury Obligations				7,374,101


TOTAL UNITED STATES GOVERNMENT SECURITIES - 35.35%			$	25,831,859

(Cost: $25,346,858)

TOTAL SHORT-TERM SECURITIES - 1.21%			$	881,000

(Cost: $881,000)

TOTAL INVESTMENT SECURITIES - 98.63%			$	72,066,925

(Cost: $70,245,149)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.37%				1,000,733


NET ASSETS - 100.00%			$	73,067,658

Notes to Schedule of Investments

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

LIMITED-TERM BOND FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities - at value (cost - $70,245)
		(Notes 1 and 3)			$	72,067
	Cash				1
	Receivables:
		Interest			965
		Fund shares sold			273
	Prepaid registration fees				39

			Total assets		73,345

LIABILITIES
	Payable to Fund shareholders				232
	Accrued shareholder servicing (Note 2)				19
	Dividends payable				10
	Accrued accounting and administrative services fees (Note 2)				4
	Accrued distribution and service fees (Note 2)				1
	Accrued management fee (Note 2)				1
	Other				10

			Total liabilities		277

				Total net assets	$	73,068

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	70
		Additional paid-in capital			71,780
	Accumulated undistributed income (loss):
		Accumulated undistributed net realized loss
			on investment transactions		(604)
		Net unrealized appreciation in value of investments			1,822

			Net assets applicable to outstanding units of capital		$	73,068

Net asset value per share (net assets divided by shares outstanding):
	Class A				$	10.47
	Class B				$	10.47
	Class C				$	10.47
	Class Y				$	10.47
Capital shares outstanding:
	Class A				3,824
	Class B				569
	Class C				2,437
	Class Y				146
Capital shares authorized					200,000

STATEMENT OF OPERATIONS

LIMITED-TERM BOND FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT INCOME
	Income (Note 1B):
		Interest and amortization			$	1,525

	Expenses (Note 2):
		Investment management fee			194
		Distribution fee:
			Class A		2
			Class B		22
			Class C		107
			Class Y		2
		Service fee:
			Class A		50
			Class B		7
			Class C		36
		Shareholder servicing:
			Class A		35
			Class B		11
			Class C		41
			Class Y		1
		Accounting and administrative services fees			20
		Audit fees			10
		Custodian fees			4
		Legal fees			1
		Other			26

			Total expenses		569

				Net investment income	956

REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTES 1 AND 3)
	Realized net gain on investments				150
	Unrealized appreciation in value of investments
		during the period			9

		Net gain on investments			159

			Net increase in net assets resulting from operations		$	1,115

STATEMENT OF CHANGES IN NET ASSETS

LIMITED-TERM BOND FUND
(In Thousands)

					For the six months ended September 30,			For the fiscal year ended March 31,
					2003			2003

INCREASE (DECREASE) IN NET ASSETS
	Operations:
		Net investment income			$	956		$	1,555
		Realized net gain (loss) on
			investments		150			(440		)
		Unrealized appreciation			9			1,641

			Net increase in net assets resulting
				from operations	1,115			2,756

	Distributions to shareholders from net
		investment income (Note 1F):⁽¹⁾
		Class A			(593		)	(755		)
		Class B			(57		)	(84		)
		Class C			(280		)	(671		)
		Class Y			(26		)	(45		)

					(956		)	(1,555		)

	Capital share transactions (Note 5)				(4,935		)	47,724

		Total increase (decrease)			(4,776		)	48,925
NET ASSETS
	Beginning of period				77,844			28,919

	End of period				$	73,068		$	77,844

		Undistributed net investment income			$	-		$	-

(1)See "Financial Highlights" on pages 96 - 102.

FINANCIAL HIGHLIGHTS

LIMITED-TERM BOND FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,						For the period from 8-17-00⁽¹⁾to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	10.45		$	10.20		$	10.17		$	9.84

Income from investment
	operations:
	Net investment income		0.15			0.36			0.51			0.36
	Net realized and unrealized
		gain on investments	0.02			0.25			0.03			0.33

Total from investment
	operations		0.17			0.61			0.54			0.69

Less distributions:
	Declared from net
		investment income	(0.15		)	(0.36		)	(0.51		)	(0.36		)
	From capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions			(0.15		)	(0.36		)	(0.51		)	(0.36		)

Net asset value, end of period			$	10.47		$	10.45		$	10.20		$	10.17

Total return⁽²⁾			1.65		%	6.15		%	5.42		%	7.01		%
Net assets, end of period
	(000 omitted)			$40,050			$39,765			$6,124			$494
Ratio of expenses to average net
	assets including voluntary
	expense waiver		1.07		%⁽³⁾	1.09		%	1.04		%	0.85		%⁽³⁾
Ratio of net investment income
	to average net assets including
	voluntary expense waiver		2.85		%⁽³⁾	3.32		%	4.76		%	5.83		%⁽³⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		-		⁽⁴⁾	-		⁽⁴⁾	1.19		%	1.09		%⁽³⁾
Ratio of net investment income
	to average net assets excluding
	voluntary expense waiver		-		⁽⁴⁾	-		⁽⁴⁾	4.61		%	5.59		%⁽³⁾
Portfolio turnover rate			19.18		%	49.41		%	32.97		%	16.10		%⁽⁵⁾

(1)Commencement of operations of the class.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

(4)Because the Fund's net assets exceeded $25 million for the entire period, there is no waiver of expenses. Therefore, no ratio is provided.

(5)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

LIMITED-TERM BOND FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,						For the period from 7-3-00⁽¹⁾to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	10.45		$	10.20		$	10.17		$	9.80

Income from investment
	operations:
	Net investment income		0.10			0.27			0.42			0.36
	Net realized and unrealized
		gain on investments	0.02			0.25			0.03			0.37

Total from investment
	operations		0.12			0.52			0.45			0.73

Less distributions:
	Declared from net
		investment income	(0.10		)	(0.27		)	(0.42		)	(0.36		)
	From capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions			(0.10		)	(0.27		)	(0.42		)	(0.36		)

Net asset value, end of period			$	10.47		$	10.45		$	10.20		$	10.17

Total return			1.18		%	5.18		%	4.52		%	7.54		%
Net assets, end of period
	(000 omitted)			$5,957			$5,471			$1,419			$425
Ratio of expenses to average net
	assets including voluntary
	expense waiver		2.00		%(2)	2.01		%	1.88		%	1.81		%⁽²⁾
Ratio of net investment income
	to average net assets including
	voluntary expense waiver		1.92		%(2)	2.47		%	4.02		%	4.91		%⁽²⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		- -		⁽³⁾	- -		⁽³⁾	2.15		%	2.33		%⁽²⁾
Ratio of net investment income
	to average net assets excluding
	voluntary expense waiver		-		⁽³⁾	- -		⁽³⁾	3.76		%	4.39		%⁽²⁾
Portfolio turnover rate			19.18		%	49.41		%	32.97		%	16.10		%⁽⁴⁾

(1)Commencement of operations of the class.

(2)Annualized.

(3)Because the Fund's net assets exceeded $25 million for the entire period, there is no waiver of expenses. Therefore, no ratio is provided.

(4)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

LIMITED-TERM BOND FUND
Class C Shares⁽¹⁾For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,
			9-30-03			2003			2002			2001			2000			1999

Net asset value,
	beginning of period		$	10.45		$	10.20		$	10.17		$	9.76		$	10.16		$	10.14

Income (loss) from
	investment operations:
	Net investment
		income	0.10			0.27			0.42			0.48			0.47			0.44
	Net realized and
		unrealized gain (loss)
		on investments	0.02			0.25			0.03			0.41			(0.40		)	0.02

Total from investment
	operations		0.12			0.52			0.45			0.89			0.07			0.46

Less distributions:
	Declared from net
		investment income	(0.10		)	(0.27		)	(0.42		)	(0.48		)	(0.47		)	(0.44		)
	From capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions			(0.10		)	(0.27		)	(0.42		)	(0.48		)	(0.47		)	(0.44		)

Net asset value,
	end of period		$	10.47		$	10.45		$	10.20		$	10.17		$	9.76		$	10.16

Total return			1.21		%	5.22		%	4.46		%	9.48		%	0.73		%	4.65		%
Net assets, end of
	period (in millions)			$26			$30			$20			$18			$19			$21
Ratio of expenses to
	average net assets
	including voluntary
	expense waiver		1.95		%⁽²⁾	1.98		%	1.94		%	1.82		%	1.81		%	2.11		%
Ratio of net investment
	income to average net
	assets including voluntary
	expense waiver		1.97		%⁽²⁾	2.59		%	4.04		%	4.97		%	4.75		%	4.34		%
Ratio of expenses to
	average net assets
	excluding voluntary
	expense waiver		- -		⁽³⁾	- -		⁽³⁾	2.21		%	2.34		%	2.19		%	- -
Ratio of net investment
	income to average net
	assets excluding voluntary
	expense waiver		-		⁽³⁾	- -		⁽³⁾	3.77		%	4.44		%	4.37		%	- -
Portfolio turnover rate			19.18		%	49.41		%	32.97		%	16.10		%	37.02		%	32.11		%

(1)See Note 5.

(2)Annualized.

(3)Because the Fund's net assets exceeded $25 million for the entire period, there is no waiver of expenses. Therefore, no ratio is provided.

FINANCIAL HIGHLIGHTS

LIMITED-TERM BOND FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,
			9-30-03			2003			2002			2001			2000			1999

Net asset value,
	beginning of period		$	10.45		$	10.20		$	10.17		$	9.76		$	10.16		$	10.14

Income (loss) from
	investment operations:
	Net investment income		0.15			0.36			0.51			0.59			0.57			0.53
	Net realized and
		unrealized gain (loss)
		on investments	0.02			0.25			0.03			0.41			(0.40		)	0.02

Total from investment
	operations		0.17			0.61			0.54			1.00			0.17			0.55

Less distributions:
	Declared from net
		investment income	(0.15		)	(0.36		)	(0.51		)	(0.59		)	(0.57		)	(0.53		)
	From capital gains		(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)	(0.00		)

Total distributions			(0.15		)	(0.36		)	(0.51		)	(0.59		)	(0.57		)	(0.53		)

Net asset value,
	end of period		$	10.47		$	10.45		$	10.20		$	10.17		$	9.76		$	10.16

Total return			1.66		%	6.14		%	5.41		%	10.56		%	1.69		%	5.60		%
Net assets, end of
	period (000 omitted)			$1,534			$2,149			$906			$1,836			$1,229			$263
Ratio of expenses to
	average net assets
	including voluntary
	expense waiver		1.06		%⁽¹⁾	1.09		%	1.04		%	0.83		%	0.69		%	1.20		%
Ratio of net investment
	income to average net
	assets including voluntary
	expense waiver		2.86		%⁽¹⁾	3.42		%	4.97		%	5.95		%	6.03		%	5.25		%
Ratio of expenses to
	average net assets
	excluding voluntary
	expense waiver		- -		⁽²⁾	-		⁽²⁾	1.18		%	1.07		%	0.84		%	- -
Ratio of net investment
	income to average net
	assets excluding voluntary
	expense waiver		- -		⁽²⁾	- -		⁽²⁾	4.83		%	5.71		%	5.88		%	- -
Portfolio turnover rate			19.18		%	49.41		%	32.97		%	16.10		%	37.02		%	32.11		%

(1)Annualized.

(2)Because the Fund's net assets exceeded $25 million for the entire period, there is no waiver of expenses. Therefore, no ratio is provided.

SHAREHOLDER SUMMARY OF MID CAP GROWTH FUND

GOAL

Mid Cap Growth Fund

To seek the growth of your investment.

Strategy

Invests primarily in common stocks of United States and foreign companies whose market capitalizations are within the range of capitalizations of companies comprising the Russell Mid Cap Growth Index and that the Fund's investment manager believes offer above-average growth potential.

Founded

2000

Scheduled Dividend Frequency

Annually (December)

Performance Summary - Class A Shares


Per Share Data
For the Six Months Ended September 30, 2003

Net asset value on
9-30-03	$8.01
3-31-03	6.67

Change per share	$1.34

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF MID CAP GROWTH FUND


Average Annual Total Return^(A)
	Class A		Class B
Period	With Sales Load^(B)	Without Sales Load^(C)	With CDSC^(D)	Without CDSC^(E)

1-year period ended 9-30-03	20.23%	27.57%	21.97%	25.97%
5-year period ended 9-30-03	-	-	-	-
10-year period ended 9-30-03	-	-	-	-
Since inception of Class^(F)	-7.20%	-5.49%	-7.62%	-6.77%

(B)Performance data is based on deduction of 5.75% sales load on the initial purchase in the periods.

(C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)6-30-00 for Class A shares and 7-6-00 for Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^(B)	Class Y^(C)

1-year period ended 9-30-03	26.25%	27.78%
5-year period ended 9-30-03	-	-
10-year period ended 9-30-03	-	-
Since inception of Class^(D)	-6.41%	-6.01%

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)7-3-00 for Class C shares and 7-10-00 for Class Y shares (the date on which shares were first acquired by shareholders).

SHAREHOLDER SUMMARY OF MID CAP GROWTH FUND

Portfolio Highlights

On September 30, 2003, Mid Cap Growth Fund had net assets totaling $57,986,090 invested in a diversified portfolio of:


88.01%		Common Stocks
10.98%		Cash and Cash Equivalents and Options
1.01%		Preferred Stock


As a shareholder of Mid Cap Growth Fund, for every $100 you had invested on September 30, 2003, your Fund owned:

	Technology Stocks	$	20.73
	Health Care Stocks	$	16.73
	Business Equipment and Services Stocks	$	15.38
	Cash and Cash Equivalents and Options	$	10.98
	Financial Services Stocks	$	9.48
	Capital Goods Stocks	$	5.23
	Consumer Goods and Services Stocks	$	5.11
	Miscellaneous Stocks	$	4.84
	Energy Stocks	$	4.12
	Consumer Nondurables Stocks	$	3.93
	Retail Stocks	$	2.46
	Preferred Stocks	$	1.01

THE INVESTMENTS OF MID CAP GROWTH FUND

September 30, 2003



				Shares		Value

COMMON STOCKS
Aircraft - 0.69%
L-3 Communications Holdings, Inc.*				9,200	$	397,900

Banks - 4.76%
Charter One Financial, Inc.				36,402		1,113,901
Synovus Financial Corp.				65,950		1,648,091
						2,761,992
Beverages - 1.53%
Coca-Cola Enterprises Inc.				46,500		886,290

Broadcasting - 2.40%
Cox Radio, Inc., Class A*				47,900		1,047,573
Radio One, Inc., Class D*				23,800		343,315
						1,390,888
Business Equipment and Services - 7.07%
Arbitron Inc.*				7,550		266,515
BearingPoint, Inc.*				14,750		117,705
Convergys Corporation*				64,300		1,179,262
Lamar Advertising Company*				44,350		1,303,668
Stericycle, Inc.*				26,100		1,231,137
						4,098,287
Capital Equipment - 2.33%
Cooper Cameron Corporation*				10,350		478,274
IDEX Corporation				23,900		870,916
						1,349,190
Chemicals - Petroleum and Inorganic - 0.58%
Goodrich Corporation				13,950		338,148

Communications Equipment - 3.58%
Marvell Technology Group Ltd.*				9,700		366,175
McData Corporation, Class A*				67,000		800,985
NetScreen Technologies, Inc.*				24,900		553,403
UTStarcom, Inc. (A)*				11,200		356,216
						2,076,779
Computers - Micro - 2.21%
Apple Computer, Inc.*				61,950		1,281,746

Computers - Peripherals - 5.50%
EMC Corporation*				94,200		1,189,746
Electronic Arts Inc. (A)*				9,450		871,668
Mercury Interactive Corporation*				14,150		643,118
Siebel Systems, Inc.*				49,450		482,385
						3,186,917
Cosmetics and Toiletries - 2.40%
Estee Lauder Companies Inc. (The), Class A				40,850		1,392,985

Electrical Equipment - 0.81%
Federal Signal Corporation				31,650		471,585

Electronic Components - 6.86%
Analog Devices, Inc.*				14,900		566,498
Intersil Corporation, Class A*				39,850		948,828
Microchip Technology Incorporated				37,100		890,771
Network Appliance, Inc.*				76,600		1,572,598
						3,978,695
Electronic Instruments - 1.89%
Molex Incorporated				5,100		145,885
Molex Incorporated, Class A				38,850		951,631
						1,097,516
Health Care - Drugs - 7.13%
Allergan, Inc.				11,400		897,522
Cephalon, Inc.*				16,850		772,488
Forest Laboratories, Inc.*				25,050		1,288,823
Gilead Sciences, Inc.*				13,300		744,068
Neurocrine Biosciences, Inc.*				8,700		431,781
						4,134,682
Health Care - General - 5.86%
Biomet, Inc.				52,825		1,773,071
Kyphon Inc.*				20,000		390,100
Schein (Henry), Inc.*				21,800		1,234,316
						3,397,487
Hospital Supply and Management - 3.74%
Bard (C. R.), Inc.				17,500		1,242,500
Laboratory Corporation of America Holdings*				32,300		927,010
						2,169,510
Hotels and Gaming - 1.02%
Starwood Hotels & Resorts Worldwide, Inc.				16,950		589,860

Insurance - Property and Casualty - 0.46%
AXIS Capital Holdings Limited*				10,800		269,460

Metal Fabrication - 2.09%
Fastenal Company				32,150		1,214,627

Multiple Industry - 1.26%
Abercrombie & Fitch, Class A*				26,450		732,930

Petroleum - Domestic - 2.86%
Burlington Resources Inc.				17,700		853,140
Noble Energy, Inc.				14,200		543,860
Patterson-UTI Energy, Inc.*				9,600		259,920
						1,656,920
Petroleum - Services - 1.26%
Baker Hughes Incorporated				15,550		460,124
Smith International, Inc.*				7,550		271,649
						731,773
Publishing - 1.69%
Getty Images, Inc.*				27,850		979,206

Restaurants - 1.93%
Panera Bread Company, Class A*				12,000		491,460
Starbucks Corporation*				21,850		629,280
						1,120,740
Retail - Food Stores - 0.53%
Rite Aid Corporation*				59,200		305,472

Security and Commodity Brokers - 4.26%
Charles Schwab Corporation (The)				132,050		1,572,715
Chicago Mercantile Exchange Holdings Inc.				13,000		894,530
						2,467,245
Timesharing and Software - 8.31%
Alliance Data Systems Corporation*				25,800		681,120
eBay Inc. (A)*				35,000		1,873,200
Fiserv, Inc.*				15,850		574,800
Sabre Holdings Corporation				29,100		625,359
Total System Services, Inc.				40,400		1,064,540
						4,819,019
Trucking and Shipping - 1.45%
C.H. Robinson Worldwide, Inc.				22,550		839,649

Utilities - Telephone - 1.55%
CenturyTel, Inc.				7,500		254,175
Citizens Communications Company*				40,550		454,565
Commonwealth Telephone Enterprises, Inc.*				4,700		188,870
						897,610

TOTAL COMMON STOCKS - 88.01%					$	51,035,108

(Cost: $44,288,437)

PREFERRED STOCK - 1.01%

Security and Commodity Brokers
Prudential Financial, Inc. and Prudential Financial Capital Trust I, 6.75% Equity Security Units, Convertible				9,750	$	585,585
(Cost: $521,775)

PUT OPTION - 0.11%			Number of Contracts

eBay Inc., Nov 50,
	Expires 11-20-03			350	$	62,055
(Cost: $107,450)

SHORT-TERM SECURITIES			Principal Amount in Thousands


Commercial Paper - 1.38%
	Food and Related
	General Mills, Inc.,
		1.17%, Master Note	$	800		800,000

Repurchase Agreement - 4.52%
Merrill Lynch, Pierce, Fenner & Smith Inc., 0.90% Repurchase Agreement dated 9-30-03, to be repurchased at $2,622,066 on 10-1-03(B)				2,622		2,622,000


United States Government - 5.17%
Federal Home Loan Bank,
	0.97%, 10-1-03			3,000		3,000,000

TOTAL SHORT-TERM SECURITIES - 11.07%					$	6,422,000

(Cost: $6,422,000)

TOTAL INVESTMENT SECURITIES - 100.20%					$	58,104,748

(Cost: $51,339,662)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.20%)						(118,658)


NET ASSETS - 100.00%					$	57,986,090


Notes to Schedule of Investments

*No income dividends were paid during the preceding 12 months.

(A)Securities serve as cover for the following written call options outstanding at September 30, 2003. (See Note 6 to financial statements):

Underlying Security	Contracts Subject to Call	Expiration Month/ Exercise Price	Premium Received	Market Value

eBay Inc.	350	Nov/57.5	$47,250	$49,700
Electronic Arts Inc.	94	Nov/100	17,107	17,390
UTStarcom, Inc.	112	Nov/45	17,514	7,280

			$81,871	$74,370

(B)Collateralized by $2,622,421 Government National Mortgage Association, 5.5% due 6-15-33; market value and accrued interest aggregate $2,733,710.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

MID CAP GROWTH FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities - at value (cost - $51,340)
		(Notes 1 and 3)			$	58,105
	Receivables:
		Fund shares sold			104
		Dividends and interest			35
		Securities sold			17

			Total assets		58,261

LIABILITIES
	Payable to Fund shareholders				93
	Outstanding written options at market (Note 6)				74
	Accrued shareholder servicing (Note 2)				40
	Accrued accounting and administrative services fees (Note 2)				4
	Payable for investment securities purchased				4
	Due to custodian				3
	Accrued distribution and service fees (Note 2)				1
	Accrued management fee (Note 2)				1
	Other				55

			Total liabilities		275

				Total net assets	$	57,986

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	73
		Additional paid-in capital			100,341
	Accumulated undistributed income (loss):
		Accumulated undistributed net investment loss			(321		)
		Accumulated undistributed net realized loss
			on investment transactions		(48,880		)
		Net unrealized appreciation in value of investments			6,773

			Net assets applicable to outstanding units of capital		$	57,986

Net asset value per share (net assets divided by shares outstanding):
	Class A				$	8.01
	Class B				$	7.76
	Class C				$	7.84
	Class Y				$	8.02
Capital shares outstanding:
	Class A				4,882
	Class B				1,421
	Class C				910
	Class Y				92
Capital shares authorized					400,000

STATEMENT OF OPERATIONS

MID CAP GROWTH FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT LOSS
	Income (Note 1B):
		Dividends			$	112
		Interest and amortization			24

			Total income		136

	Expenses (Note 2):
		Investment management fee			179
		Shareholder servicing:
			Class A		66
			Class B		28
			Class C		14
			Class Y		1
		Service fee:
			Class A		34
			Class B		9
			Class C		6
		Distribution fee:
			Class A		2
			Class B		27
			Class C		20
			Class Y		1
		Registration fees			41
		Accounting and administrative services fees			15
		Audit fees			14
		Legal fees			14
		Custodian fees			2
		Other			17

			Total		490
				Less expenses in excess of voluntary waiver of
				investment management fee (Note 2)	(30		)

				Total expenses	460

				Net investment loss	(324		)

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
	Realized net loss on securities				(42,373		)
	Realized net gain on written options				23
	Realized net loss on purchased options				(51		)

		Realized net loss on investments			(42,401		)
		Unrealized appreciation in value of investments
			during the period		9,454

			Net loss on investments		(32,947		)

				Net decrease in net assets resulting from operations	$	(33,271	)

STATEMENT OF CHANGES IN NET ASSETS

MID CAP GROWTH FUND
(In Thousands)

					For the six months ended September 30,			For the fiscal year ended March 31,
					2003			2003

INCREASE (DECREASE) IN NET ASSETS
	Operations:
		Net investment loss			$	(324	)	$	(145	)
		Realized net loss on investments			(42,401		)	(2,714		)
		Unrealized appreciation (depreciation)			9,454			(2,663		)

			Net decrease in net assets resulting
				from operations	(33,271		)	(5,522		)

	Distributions to shareholders from
		net investment income (Note 1F)⁽¹⁾:
			Class A		- -			(2		)
			Class B		- -			- -
			Class C		- -			- -
			Class Y		- -			(1		)

					- -			(3		)

	Capital share transactions (Note 5)				72,567			2,703

		Total increase (decrease)			39,296			(2,822		)
NET ASSETS
	Beginning of period				18,690			21,512

	End of period				$	57,986		$	18,690

		Undistributed net investment income (loss)			$	(321	)	$	3

(1)See "Financial Highlights" on pages 111 - 117.

FINANCIAL HIGHLIGHTS

MID CAP GROWTH FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			9-30-03			2003			2002			3-31-01
			For the six months ended			For the fiscal year ended March 31,							For the period from 6-30-00⁽¹⁾ to

Net asset value,
	beginning of period		$	6.67		$	8.91		$	9.11		$	10.00

Income (loss) from
	investment operations:
	Net investment
		income (loss)	(0.06		)	(0.05		)	0.02			0.11
	Net realized and unrealized
		gain (loss) on investments	1.40			(2.19		)	(0.17		)	(0.65		)

Total from investment
	operations		1.34			(2.24		)	(0.15		)	(0.54		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)*	(0.05		)	(0.06		)
	Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.29		)

Total distributions			(0.00		)	(0.00		)	(0.05		)	(0.35		)

Net asset value, end of period			$	8.01		$	6.67		$	8.91		$	9.11

Total return⁽²⁾			20.09		%	- -25.13		%	- -1.67		%	- -5.88		%
Net assets, end of period
	(in millions)			$39			$14			$15			$11
Ratio of expenses to average net
	assets including voluntary
	expense waiver		1.87		%⁽³⁾	1.17		%	1.17		%	1.01		%⁽³⁾
Ratio of net investment income
	(loss) to average net assets
	including voluntary
	expense waiver		- -1.24		%⁽³⁾	- -0.49		%	0.34		%	1.85		%⁽³⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		2.01		%⁽³⁾	2.02		%	1.84		%	1.65		%⁽³⁾
Ratio of net investment income
	(loss) to average net assets
	excluding voluntary
	expense waiver		- -1.38		%⁽³⁾	- -1.34		%	- -0.33		%	1.21		%⁽³⁾
Portfolio turnover rate			12.06		%	35.89		%	39.05		%	110.18		%

*Not shown due to rounding.

(1)Commencement of operations of the class.

(2)Total return calculated without taking into account the sales load deducted on an initial purchase.

(3)Annualized.

FINANCIAL HIGHLIGHTS

MID CAP GROWTH FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,							For the period from 7-6-00⁽¹⁾ to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	6.49		$	8.81		$	9.07		$	10.01

Income (loss) from
	investment operations:
	Net investment
		income (loss)	0.07			(0.14		)	(0.09		)	0.02
	Net realized and unrealized
		gain (loss) on investments	1.20			(2.18		)	(0.17		)	(0.66		)

Total from investment
	operations		1.27			(2.32		)	(0.26		)	(0.64		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.01		)
	Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.29		)

Total distributions			(0.00		)	(0.00		)	(0.00		)	(0.30		)

Net asset value,
	end of period		$	7.76		$	6.49		$	8.81		$	9.07

Total return			19.57		%	- -26.33		%	- -2.87		%	- -6.85		%
Net assets, end of period
	(in millions)			$11			$2			$2			$2
Ratio of expenses to average net
	assets including voluntary
	expense waiver		3.09		%⁽²⁾	2.73		%	2.49		%	2.40		%⁽²⁾
Ratio of net investment income
	(loss) to average net assets
	including voluntary
	expense waiver		- -2.38		%⁽²⁾	- -2.05		%	- -0.95		%	0.44		%⁽²⁾
Ratio of expenses to
	average net assets
	excluding voluntary
	expense waiver		3.24		%⁽²⁾	3.58		%	3.90		%	3.93		%⁽²⁾
Ratio of net investment
	loss to average net
	assets excluding
	voluntary expense
	waiver		- -2.53		%⁽²⁾	- -2.90		%	- -2.37		%	- -1.09		%⁽²⁾
Portfolio turnover rate			12.06		%	35.89		%	39.05		%	110.18		%

(1)Commencement of operations of the class.

(2)Annualized.

FINANCIAL HIGHLIGHTS

MID CAP GROWTH FUND
Class C Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,							For the period from 7-3-00⁽¹⁾ to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	6.56		$	8.85		$	9.08		$	10.00

Income (loss) from
	investment operations:
	Net investment
		income (loss)	(0.02		)	(0.10		)	(0.05		)	0.04
	Net realized and unrealized
		gain (loss) on
		investments	1.30			(2.19		)	(0.18		)	(0.66		)

Total from investment
	operations		1.28			(2.29		)	(0.23		)	(0.62		)

Less distributions from:
	Net investment income		(0.00		)	(0.00		)	(0.00		)	(0.01		)
	Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.29		)

Total distributions			(0.00		)	(0.00		)	(0.00		)	(0.30		)

Net asset value,
	end of period		$	7.84		$	6.56		$	8.85		$	9.08

Total return			19.51		%	- -25.88		%	- -2.53		%	- -6.58		%
Net assets, end of period
	(in millions)			$7			$3			$4			$4
Ratio of expenses to average net
	assets including voluntary
	expense waiver		2.61		%⁽²⁾	2.18		%	2.10		%	1.99		%⁽²⁾
Ratio of net investment
	income (loss) to average net
	assets including voluntary
	expense waiver		- -2.07		%⁽²⁾	- -1.50		%	- -0.55		%	0.84		%⁽²⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		2.75		%⁽²⁾	3.03		%	3.30		%	3.26		%⁽²⁾
Ratio of net investment loss to
	average net assets excluding
	voluntary expense waiver		- -2.21		%⁽²⁾	- -2.35		%	- -1.74		%	- -0.43		%⁽²⁾
Portfolio turnover rate			12.06		%	35.89		%	39.05		%	110.18		%

(1)Commencement of operations of the class.

(2)Annualized.

FINANCIAL HIGHLIGHTS

MID CAP GROWTH FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended			For the fiscal year ended March 31,							For the period from 7-10-00⁽¹⁾ to
			9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period		$	6.67		$	8.91		$	9.11		$	10.23

Income (loss) from
	investment operations:
	Net investment
		income (loss)	(0.03		)	(0.01		)	0.00			0.11
	Net realized and
		unrealized gain (loss)
		on investments	1.38			(2.20		)	(0.14		)	(0.88		)

Total from investment
	operations		1.35			(2.21		)	(0.14		)	(0.77		)

Less distributions from:
	Net investment income		(0.00		)	(0.03		)	(0.06		)	(0.06		)
	Capital gains		(0.00		)	(0.00		)	(0.00		)	(0.29		)

Total distributions			(0.00		)	(0.03		)	(0.06		)	(0.35		)

Net asset value,
	end of period		$	8.02		$	6.67		$	8.91		$	9.11

Total return			20.24		%	- -24.86		%	- -1.52		%	- -7.97		%
Net assets, end of period
	(000 omitted)			$739			$329			$438			$184
Ratio of expenses to average net
	assets including voluntary
	expense waiver		1.78		%⁽²⁾	0.86		%	0.83		%	1.03		%⁽²⁾
Ratio of net investment income
	(loss) to average net assets
	including voluntary
	expense waiver		- -0.74		%⁽²⁾	- -0.18		%	0.50		%	1.77		%⁽²⁾
Ratio of expenses to average net
	assets excluding voluntary
	expense waiver		1.92		%⁽²⁾	1.71		%	1.30		%	1.68		%⁽²⁾
Ratio of net investment income
	(loss) to average net assets
	excluding voluntary expense
	waiver		- -0.88		%⁽²⁾	- -1.03		%	0.03		%	1.11		%⁽²⁾
Portfolio turnover rate			12.06		%	35.89		%	39.05		%	110.18		%

(1)Commencement of operations of the class.

(2)Annualized.

THE INVESTMENTS OF MONEY MARKET FUND

September 30, 2003

			Principal Amount in Thousands			Value

CORPORATE OBLIGATIONS
Certificate of Deposit - 2.06%
Security and Commodity Brokers Citibank, N.A.,
	1.07%, 11-20-03		$	500	$	500,000

Commercial Paper
	Banks - 2.06%
	Citicorp,
		1.05%, 11- 4-03		500		499,504

	Beverages - 1.23%
	Coca-Cola Company (The),
		1.03%, 10-20-03		300		299,837

	Containers - 6.74%
	Bemis Company, Inc.,
		1.03%, 10-15-03		1,138		1,137,544
	Florens Container Inc. (Bank of America N.A.),
		1.06%, 10-16-03		500		499,779
						1,637,323
	Electrical Equipment - 2.06%
	W.W. Grainger, Inc.,
		1.04%, 10-27-03		500		499,625

	Finance Companies - 1.14%
	Caterpillar Financial Services Corp.,
		1.05%, 10-24-03		278		277,814

	Health Care - Drugs - 11.87%
	Alcon Finance PLC (Nestle S.A.):
		1.05%, 10-21-03		350		349,796
		1.06%, 11-14-03		750		749,028
	GlaxoSmithKline Finance plc,
		1.03%, 10-16-03		636		635,727
	Pfizer Inc.,
		1.02%, 11-17-03		1,150		1,148,469
						2,883,020
	Motor Vehicles - 4.12%
	Harley-Davidson, Inc.:
		1.02%, 10-3-03		250		249,986
		1.04%, 10-24-03		250		249,834
	Harley-Davidson Funding Corp.,
		1.04%, 10-1-03		500		500,000
						999,820
	Multiple Industry - 4.83%
	General Electric Capital Corporation,
		1.04%, 10-16-03		1,175		1,174,491

	Petroleum - Domestic - 4.11%
	Shell Finance (U.K.) PLC:
		1.05%, 10-9-03		500		499,883
		1.05%, 10-21-03		500		499,708
						999,591
	Retail - General Merchandise - 2.33%
	Target Corporation,
		1.02%, 10-6-03		567		566,920

	Security and Commodity Brokers - 5.61%
	Prudential Funding Corp.,
		1.03%, 10-16-03		1,175		1,174,496
	UBS Finance Delaware LLC,
		1.11%, 10-1-03		189		189,000
						1,363,496
	Utilities - Electric - 3.19%
	AES Shady Point Inc. (Bank of America N.A.),
		1.05%, 10-21-03		776		775,547

	Utilities - Telephone - 5.04%
	SBC International Inc. (SBC Communications Inc.):
		1.03%, 10-20-03		250		249,864
		1.05%, 10-23-03		400		399,743
	Verizon Network Funding Corporation,
		1.03%, 10-20-03		575		574,687
						1,224,294

Total Commercial Paper - 54.33%						13,201,282


Notes
	Banks - 5.50%
	Bank One, N.A.,
		1.04%, 11-24-03		600		599,975
	Wells Fargo & Company:
		1.10938%, 10-9-03		500		500,000
		9.125%, 2-1-04		230		235,932
						1,335,907
	Business Equipment and Services - 3.17%
	Playworld Systems Incorporated (Wachovia Bank),
		1.19%, 10-8-03		770		770,000

	Health Care - Drugs - 2.08%
	Merck & Co., Inc.,
		4.489%, 2-22-04 (A)		500		506,316

	Hospital Supply and Management - 1.62%
	Autumn House at Powder Mill, Inc. (Suntrust Bank),
		1.1%, 10-9-03		150		150,000
	Meriter Management Services, Inc. (U.S. Bank Milwaukee, National Association),
		1.2%, 10-8-03		245		245,000
						395,000
	Retail - General Merchandise - 4.02%
	Wal-Mart Stores, Inc.,
		5.199%, 6-1-04		950		975,870

	Trucking and Shipping - 2.24%
	Volpe Family Partnership, L.P. (Wachovia Bank),
		1.17%, 10-9-03		545		545,000

	Utilities - Telephone - 3.98%
	BellSouth Corporation,
		4.16%, 4-26-04 (A)		500		507,670
	SBC Communications Inc.,
		4.18%, 6-5-04		450		458,951
						966,621

Total Notes - 22.61%						5,494,714


TOTAL CORPORATE OBLIGATIONS - 79.00%					$	19,195,996

(Cost: $19,195,996)




MUNICIPAL OBLIGATIONS
California - 3.09%
Pollution Control Financing Authority, Environmental Improvement Revenue Bonds, Air Products Manufacturing Corporation, Series 1997A (Taxable),
	1.11%, 11-5-03	$	750	$	750,000

Maryland - 3.72%
Mayor and City Council of Baltimore (City of Baltimore, Maryland), General Obligation Bonds, Consolidated Public Improvement Bonds, Series 2003D (Variable Rate Demand/Taxable),
	1.1%, 10-9-03		905		905,000

New York - 1.34%
The City of New York, General Obligation Bonds, Fiscal 1995 Series B, Taxable Adjustable Rate Bonds (Bayerische Landesbank Girozentrale, New York Branch),
	1.11%, 10-8-03		325		325,000

Washington - 1.38%
Washington State Housing Finance Commission: Taxable Variable Rate Demand Multifamily Revenue Bonds, Mill Pointe Apartments Project, Series 1999B (U.S. Bank, National Association),
	1.2%, 10-3-03		240		240,000
	Taxable Variable Rate Demand Multifamily Revenue Bonds, Brittany Park Project, Series 1996B (U.S. Bank of Washington, National Association),
	1.13%, 10-9-03		95		95,000
					335,000

TOTAL MUNICIPAL OBLIGATIONS - 9.53%				$	2,315,000

(Cost: $2,315,000)

UNITED STATES GOVERNMENT SECURITIES


Federal Farm Credit Banks,
	1.1%, 5-14-04		750		749,677
Federal Home Loan Bank:
	1.05%, 7-16-04		400		400,000
	1.2%, 8-20-04		300		300,000
	1.5%, 10- 4-04		200		200,000
Federal Home Loan Mortgage Corporation,
	4.875%, 4-16-04		600		611,910
Overseas Private Investment Corporation,
	1.06%, 10-8-03		477		476,744

TOTAL UNITED STATES GOVERNMENT SECURITIES - 11.27%				$	2,738,331

(Cost: $2,738,331)

TOTAL INVESTMENT SECURITIES - 99.80%				$	24,249,327

(Cost: $24,249,327)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.20%					48,881


NET ASSETS - 100.00%				$	24,298,208

Notes to Schedule of Investments

(A)Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At September 30, 2003, the total value of these securities amounted to $1,013,986 or 4.17% of net assets.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

MONEY MARKET FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities - at value (cost - $24,249)
		(Notes 1 and 3)			$	24,249
	Cash				32
	Receivables:
		Interest			74
		Fund shares sold			46
	Prepaid insurance premium				41

			Total assets		24,442

LIABILITIES
	Payable to Fund shareholders				131
	Accrued shareholder servicing (Note 2)				5
	Accrued accounting and administrative services fees (Note 2)				1
	Dividends payable				1
	Other				6

			Total liabilities		144

				Total net assets	$	24,298

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	243
		Additional paid-in capital			24,055

			Net assets applicable to outstanding units of capital		$	24,298

Net asset value, redemption and offering price per share:
	Class A				$	1.00
	Class B				$	1.00
	Class C				$	1.00
Capital shares outstanding:
	Class A				15,289
	Class B				1,405
	Class C				7,604
Capital shares authorized					400,000

STATEMENT OF OPERATIONS

MONEY MARKET FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT INCOME
	Income (Note 1B):
		Interest and amortization			$	141

	Expenses (Note 2):
		Investment management fee			46
		Distribution fee:
			Class B		4
			Class C		33
		Registration fees			7
		Shareholder servicing:
			Class A		10
			Class B		1
			Class C		9
		Service fee:
			Class B		1
			Class C		11
		Audit fees			8
		Accounting and administrative services fees			7
		Custodian fees			4
		Other			6

			Total		147

				Less expenses in excess of voluntary waiver of (Note 2):
				Investment management fee	(46		)
				Class B 12b-1 fees	(2		)
				Class C 12b-1 fees	(12		)

				Total expenses	87

				Net investment income	54

				Net increase in net assets resulting from operations	$	54

STATEMENT OF CHANGES IN NET ASSETS

MONEY MARKET FUND
(In Thousands)

					For the six months ended September 30,			For the fiscal year ended March 31,
					2003			2003

INCREASE IN NET ASSETS
	Operations:
		Net investment income			$	54		$	139

			Net increase in net assets resulting
				from operations	54			139

	Distributions to shareholders from
		net investment income (Note 1F):⁽¹⁾
		Class A			(52		)	(122		)
		Class B			- -		*	(1		)
		Class C			(2		)	(16		)

					(54		)	(139		)

	Capital share transactions (Note 5)				2,982			8,293

		Total increase			2,982			8,293
NET ASSETS
	Beginning of period				21,316			13,023

	End of period				$	24,298		$	21,316

		Undistributed net investment income			$	-		$	-

*Not shown due to rounding.

(1)See "Financial Highlights" on pages 122 - 124.

FINANCIAL HIGHLIGHTS

MONEY MARKET FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended			For the fiscal year ended March 31,						For the period from 6-30-00⁽¹⁾ to
		9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period	$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0040			0.0124			0.0259			0.0413
Less dividends declared		(0.0040		)	(0.0124		)	(0.0259		)	(0.0413		)

Net asset value,
	end of period	$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.41		%	1.25		%	2.70		%	4.11		%
Net assets, end of period
	(in millions)		$15			$10			$5			$5
Ratio of expenses to
	average net assets
	including voluntary
	expense waiver	0.42		%⁽²⁾	0.52		%	0.81		%	0.92		%⁽²⁾
Ratio of net investment
	income to average net
	assets including
	voluntary expense
	waiver	0.79		%⁽²⁾	1.26		%	2.60		%	5.49		%⁽²⁾
Ratio of expenses to
	average net assets
	excluding voluntary
	expense waiver	0.82		%⁽²⁾	0.92		%	1.03		%	1.18		%⁽²⁾
Ratio of net investment
	income to average net
	assets excluding
	voluntary expense
	waiver	0.39		%⁽²⁾	0.86		%	2.38		%	5.23		%⁽²⁾

(1)Commencement of operations of the class.

(2)Annualized.

FINANCIAL HIGHLIGHTS

MONEY MARKET FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended			For the fiscal year ended March 31,						For the period from 7-12-00⁽¹⁾ to
		9-30-03			2003			2002			3-31-01

Net asset value,
	beginning of period	$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0002			0.0015			0.0147			0.0299
Less dividends declared		(0.0002		)	(0.0015		)	(0.0147		)	(0.0299		)

Net asset value,
	end of period	$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.02		%	0.16		%	1.55		%	2.97		%
Net assets, end of period
	(000 omitted)		$1,405			$1,188			$578			$431
Ratio of expenses to
	average net assets
	including voluntary
	expense waivers	1.18		%⁽²⁾	1.59		%	1.88		%	2.29		%⁽²⁾
Ratio of net investment
	income to average net
	assets including
	voluntary expense
	waivers	0.03		%⁽²⁾	0.14		%	1.33		%	4.05		%⁽²⁾
Ratio of expenses to
	average net assets
	excluding voluntary
	expense waivers	1.58		%⁽²⁾	2.06		%	2.39		%	2.94		%⁽²⁾
Ratio of net investment
	income (loss) to average
	net assets excluding
	voluntary expense
	waivers	- -0.37		%⁽²⁾	- -0.33		%	0.82		%	3.41		%⁽²⁾

(1)Commencement of operations of the class.

(2)Annualized.

FINANCIAL HIGHLIGHTS

MONEY MARKET FUND
Class C Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

		9-30-03			2003			2002			3-31-01
		For the six months ended			For the fiscal year ended March 31,						For the period from 7-3-00⁽¹⁾ to

Net asset value,
	beginning of period	$	1.00		$	1.00		$	1.00		$	1.00

Net investment income		0.0002			0.0019			0.0157			0.0332
Less dividends declared		(0.0002		)	(0.0019		)	(0.0157		)	(0.0332		)

Net asset value,
	end of period	$	1.00		$	1.00		$	1.00		$	1.00

Total return		0.02		%	0.20		%	1.63		%	3.32		%
Net assets, end of period
	(in millions)		$8			$10			$7			$10
Ratio of expenses to
	average net assets
	including voluntary
	expense waivers	1.19		%⁽²⁾	1.56		%	1.81		%	1.98		%⁽²⁾
Ratio of net investment
	income to average net
	assets including
	voluntary expense
	waivers	0.03		%⁽²⁾	0.18		%	1.58		%	4.34		%⁽²⁾
Ratio of expenses to
	average net assets
	excluding voluntary
	expense waivers	1.59		%⁽²⁾	1.99		%	2.31		%	2.54		%⁽²⁾
Ratio of net investment
	income (loss) to average
	net assets excluding
	voluntary expense
	waivers	- -0.37		%⁽²⁾	- -0.25		%	1.08		%	3.78		%⁽²⁾

(1)Commencement of operations of the class.

(2)Annualized.

SHAREHOLDER SUMMARY OF MUNICIPAL BOND FUND

GOAL

Municipal Bond Fund

To seek income which is not subject to Federal income tax. (Income may be subject to state and local taxes, and a significant portion may be subject to the Federal alternative minimum tax.)

Strategy

Invests primarily in tax-exempt municipal bonds, mainly of investment grade. The Fund diversifies its holdings among two main types of municipal bonds: general obligation bonds and revenue bonds.

Founded

1992

Scheduled Dividend Frequency

Declared daily, paid monthly

Performance Summary - Class C Shares


Per Share Data
For the Six Months Ended September 30, 2003

Dividends paid	$0.15

Net asset value on
9-30-03	$11.20
3-31-03	11.10

Change per share	$ 0.10

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF MUNICIPAL BOND FUND


Average Annual Total Return^(A)
	Class A		Class B
	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}
Period	With Sales Load^{^(B)}	Without Sales Load^{^(C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}

1-year period ended 9-30-03	-1.27%	3.11%	-1.69%	2.29%
5-year period ended 9-30-03	-	-	-	-
10-year period ended 9-30-03	-	-	-	-
Since inception of Class^{^(F)}	5.44%	6.95%	5.10%	5.95%

(B)Performance data is based on deduction of 4.25% sales load on the initial purchase in the periods.

(C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)9-15-00 for Class A shares and 8-8-00 for Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^{^(B)}	Class Y^{^(C)}

1-year period ended 9-30-03	2.23%	2.90%
5-year period ended 9-30-03	3.23%	-
10-year period ended 9-30-03	4.38%	-
Since inception of Class^{^(D)}	-	4.20%

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)12-30-98 for Class Y shares (the date on which shares were first acquired and continuously held by shareholders).

SHAREHOLDER SUMMARY OF MUNICIPAL BOND FUND

Portfolio Highlights

On September 30, 2003, Municipal Bond Fund had net assets totaling $25,948,907 invested in a diversified portfolio.


As a shareholder of Municipal Bond Fund, for every $100 you had invested on September 30, 2003, your Fund owned:

	Education Revenue Bonds	$	12.76
	Hospital Revenue Bonds	$	11.38
	City and County General Obligation Bonds	$	10.21
	Water and Sewer Revenue Bonds	$	8.02
	Housing Revenue Bonds	$	7.78
	Sales Revenue Bonds	$	7.52
	Public Power Revenue Bonds	$	7.19
	Other Municipal Bonds	$	6.89
	Airport Revenue Bonds	$	6.61
	Special Tax Bonds	$	5.26
	School General Obligation Bonds	$	5.05
	Transportation Revenue Bonds	$	4.36
	Lease/Certificate of Participation Bonds	$	3.95
	Cash and Cash Equivalents	$	3.02


2003 TAX YEAR TAXABLE EQUIVALENT YIELDS⁽¹⁾
	If your Taxable Income is:			Your Marginal Tax Bracket Is
					Equivalent Tax Free Yields
	Joint Return		Single Return		3%	4%	5%	6%

$	0- 12,000	$	0- 6,000	10%	3.33%	4.44%	5.56%	6.67%
$	12,001- 47,450	$	6,001- 28,400	15%	3.53%	4.71%	5.88%	7.06%
$	47,451-114,650	$	28,401- 68,800	27%	4.11%	5.48%	6.85%	8.22%
$	114,651-174,700	$	68,801-143,500	30%	4.29%	5.71%	7.14%	8.57%
$	174,701-311,950	$	143,501-311,950	35%	4.62%	6.15%	7.69%	9.23%
$	311,951 and above	$	311,951 and above	38.6%	4.89%	6.51%	8.14%	9.77%

(1)Table is for illustration only and does not represent the actual performance of Ivy Funds, Inc. - Municipal Bond Fund.

THE INVESTMENTS OF MUNICIPAL BOND FUND

September 30, 2003


MUNICIPAL BONDS		Principal Amount in Thousands			Value


Arizona - 3.09%
The Industrial Development Authority of the City of Phoenix, Arizona, Single Family Mortgage Revenue Bonds, Series 2002-1A,
	6.2%, 3-1-34	$	490	$	545,444
City of Bullhead City, Arizona, Bullhead Parkway Improvement District, Improvement Bonds,
	6.1%, 1-1-13		250		255,687
					801,131
California - 4.22%
San Mateo County Community College District (County of San Mateo, California), 2002 General Obligation Bonds (Election of 2001), Series A (Current Interest Bonds),
	5.375%, 9-1-15		500		563,470
Trustees of the California State University Systemwide Revenue Bonds, Series 2002A,
	5.5%, 11-1-15		250		284,627
State of California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A,
	5.5%, 5-1-08		215		246,035
					1,094,132
Colorado - 3.94%
City of Aspen, Colorado, Sales Tax Revenue Bonds, Series 1999,
	5.25%, 11-1-15		500		540,125
El Paso County School District No. 12 - Cheyenne Mountain, El Paso County, Colorado, General Obligation Refunding Bonds, Series 2002,
	0.0%, 9-15-12		685		483,521
					1,023,646
Florida - 5.44%
Polk County, Florida, Capital Improvement and Refunding Revenue Bonds, Series 2002,
	5.25%, 12-1-09		500		577,120
School District of Hillsborough County, Florida, Sales Tax Revenue Bonds, Series 2002,
	5.375%, 10-1-13		500		562,285
City of Jacksonville, Florida, Better Jacksonville Sales Tax Revenue Bonds, Series 2003,
	5.25%, 10-1-19		250		272,952
					1,412,357
Georgia - 0.89%
Hospital Authority of Cobb County (Georgia), Revenue Anticipation Refunding and Improvement Certificates, Series 2003,
	5.25%, 4-1-20		210		230,135
Illinois - 9.02%
Village of Bedford Park, Cook County, Illinois, Water Revenue Bonds, Series 2000A,

	6.0%, 12-15-12		955		1,067,862
School District Number 116, Champaign County, Illinois (Urbana), General Obligation School Building Bonds, Series 1999C,
	0.0%, 1-1-11		850		660,008
Bloomington-Normal Airport Authority of McLean County, Illinois, Central Illinois Regional Airport, Passenger Facility Charge Revenue Bonds, Series 2001,
	6.05%, 12-15-19		645		613,021
					2,340,891
Indiana - 8.87%
New Albany-Floyd County School Building Corporation, First Mortgage Bonds, Series 2002 (Floyd County, Indiana),


	5.75%, 7-15-17		675		779,011
Ball State University Board of Trustees, Ball State University Student Fee Bonds, Series K,
	5.75%, 7-1-18		500		567,290
Dyer (Indiana) Redevelopment Authority, Economic Development Lease Rental Bonds,
	Series 1999,
	6.5%, 1-15-24		500		545,180
East Chicago Elementary School Building Corporation (Lake County, Indiana), First Mortgage Bonds, Series 1993A,
	5.5%, 1-15-16		400		409,700
					2,301,181
Kansas - 5.72%
Sedgwick County, Kansas and Shawnee County, Kansas, Single Family Mortgage Revenue Bonds (Mortgage-Backed Securities Program):
	2001 Series A-5,
	5.55%, 12-1-33		500		526,660
	2001 Series A-1 (AMT),
	6.3%, 12-1-32		460		508,217
Chisholm Creek Utility Authority, Water and Wastewater Facilities Revenue Bonds (Cities of Bel Aire and Park City, Kansas Project), Series 2002,
	5.25%, 9-1-15		400		449,272
					1,484,149
Louisiana - 3.23%
State of Louisiana, Gasoline and Fuels Tax Revenue Bonds, 2002 Series A,
	5.25%, 6-1-13		500		562,875
City of New Orleans, Louisiana, Limited Tax Certificates of Indebtedness, Series 2003,
	5.0%, 3-1-07		250		276,438
					839,313
Maryland - 2.11%
Maryland Transportation Authority, Airport Parking Revenue Bonds, Series 2002B, Baltimore/Washington International Airport Projects (Qualified Airport Bonds - AMT),
	5.375%, 3-1-15		500		547,005

Minnesota - 4.79%
City of Perham, Minnesota, General Obligation Disposal System Revenue Bonds, Series 2001,

	6.0%, 5-1-22		500		517,485
City of Victoria, Minnesota, Private School Facility Revenue Bonds (Holy Family Catholic High School Project), Series 1999A,
	5.6%, 9-1-19		400		386,100
City of Minneapolis, Minnesota, General Obligation Convention Center Bonds, Series 2002,
	5.0%, 12-1-10		300		340,257
					1,243,842
Missouri - 5.51%
The City of St. Louis, Missouri, Airport Revenue Bonds, Series 2001A (Airport Development Program),

	5.0%, 7-1-11		500		554,760
City of Sikeston, Missouri, Electric System Revenue Refunding Bonds, 1996 Series,
	6.0%, 6-1-14		400		482,772
City of Kearney, Missouri, General Obligation Bonds, Series 2001,
	5.5%, 3-1-16		350		392,910
					1,430,442
Nebraska - 2.12%
Nebraska Higher Education Loan Program, Inc., Senior Subordinate Bonds, 1993-2, Series A-5A,
	6.2%, 6-1-13		500		550,725

Nevada - 1.08%
Carson City, Nevada Hospital Revenue Bonds (Carson-Tahoe Hospital Project), Series 2002,

	6.0%, 9-1-15		255		280,778

New Jersey - 1.06%
Garden State Preservation Trust, Open Space and Farmland Preservation Bonds, 2003 Series A (Current Interest Bonds),

	5.25%, 11-1-19		250		273,962

New Mexico - 2.15%
New Mexico Hospital Equipment Loan Council, Hospital Revenue Bonds (Memorial Medical Center, Inc. Project), Series 1998,
	4.85%, 6-1-08		620		557,430

New York - 10.80%
The Port Authority of New York and New Jersey, Consolidated Bonds, One Hundred Twenty-Seventh Series,
	5.5%, 12-15-14		500		566,440

New York State Thruway Authority, State Personal Income Tax Revenue Bonds (Transportation), Series 2002A,
	5.25%, 3-15-10		500		564,895
New York City, Municipal Water Finance Authority, Water and Sewer System Revenue Bonds, Fiscal 2003 Series D,


	5.0%, 6-15-09		500		563,455
The City of New York, General Obligation Bonds, Fiscal 2003 Series A Current Interest Bonds,

	5.5%, 8-1-10		500		560,240
Dormitory Authority of the State of New York, Third General Resolution Revenue Bonds (State University Educational Facilities Issue), Series 2002B,


	5.25%, 11-15-23		500		548,590
					2,803,620
Oklahoma - 0.95%
Tulsa Public Facilities Authority (Oklahoma), Assembly Center Lease Payment Revenue Bonds, Refunding Series 1985,
	6.6%, 7-1-14		200		245,400

Pennsylvania - 3.38%
The School District of Philadelphia, Pennsylvania, General Obligation Bonds, Series A of 2002,
	5.5%, 2-1-18		500		551,900
Schuylkill County Industrial Development Authority, Variable Rate Demand Revenue Bonds (Pine Grove Landfill, Inc. Project), 1995 Series,
	5.1%, 10-1-19		320		325,670
					877,570
Rhode Island - 2.82%
Rhode Island Health and Educational Building Corporation, Hospital Financing Revenue Bonds, St. Joseph Health Services of Rhode Island Issue, Series 1999,
	5.4%, 10-1-09		725		731,641

South Carolina - 2.17%
South Carolina Public Service Authority, Santee Cooper, Revenue Obligations, 2002 Refunding Series D,
	5.0%, 1-1-10		500		562,900

Texas - 4.63%
Lufkin Health Facilities Development Corporation, Health System Revenue and Refunding Bonds (Memorial Health System of East Texas), Series 1995,
	6.875%, 2-15-26		495		486,902
Texas Department of Housing and Community Affairs, Single Family Mortgage Revenue Bonds, 1997 Series D (AMT) TEAMS Structure,
	5.7%, 9-1-29		420		438,115
Pflugerville Independent School District (Travis County, Texas), Unlimited Tax School Building Bonds, Series 2001,
	5.5%, 8-15-19		250		276,328
					1,201,345
Virginia - 2.17%
City of Chesapeake, Virginia, General Obligation Public Improvement and Refunding Bonds, Series of 2001,
	5.5%, 12-1-17		500		562,875

Washington - 2.22%
Energy Northwest Project No. 1, Refunding Electric Revenue Bonds, Series 2002-A,
	5.75%, 7-1-16		500		574,740

Wisconsin - 2.56%
Wisconsin Health and Educational Facilities Authority, Wheaton Franciscan Services, Inc., System Revenue and Refunding Bonds, Series 2002,
	6.0%, 8-15-15		600		664,944

Wyoming - 2.04%
Wyoming Student Loan Corporation, Student Loan Revenue Refunding Bonds, Series 1999A (Non-AMT),
	6.2%, 6-1-24		500		529,605

TOTAL MUNICIPAL BONDS - 96.98%				$	25,165,759

(Cost: $24,020,039)

TOTAL SHORT-TERM SECURITIES - 2.45%				$	636,000

(Cost: $636,000)

TOTAL INVESTMENT SECURITIES - 99.43%				$	25,801,759

(Cost: $24,656,039)

CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.57%					147,148


NET ASSETS - 100.00%				$	25,948,907

Notes to Schedule of Investments

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

MUNICIPAL BOND FUND
September 30, 2003
(In Thousands, Except for Per Share and Share Amounts)

ASSETS
	Investment securities - at value (cost - $24,656)
		(Notes 1 and 3)			$	25,802
	Cash					1
	Receivables:
		Interest				330
		Fund shares sold				4
	Prepaid registration fees					28

			Total assets			26,165

LIABILITIES
	Payable to Fund shareholders					190
	Accrued shareholder servicing (Note 2)					6
	Dividends payable					4
	Accrued accounting and administrative services fees (Note 2)					2
	Accrued distribution and service fees (Note 2)					1
	Other					13

			Total liabilities			216

				Total net assets	$	25,949

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	23
		Additional paid-in capital				25,601
	Accumulated undistributed income (loss):
		Accumulated undistributed net investment income				15
		Accumulated undistributed net realized loss
			on investments			(836	)
		Net unrealized appreciation in value of investments				1,146

			Net assets applicable to outstanding units of capital			$25,949

Net asset value per share (net assets divided by shares outstanding):
	Class A					$11.20
	Class B					$11.20
	Class C					$11.20
	Class Y					$11.20
Capital shares outstanding:
	Class A					297,120
	Class B					65,787
	Class C					1,953,795
	Class Y					356
Capital shares authorized						200,000,000

STATEMENT OF OPERATIONS

MUNICIPAL BOND FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT INCOME
	Income (Note 1B):
		Interest and amortization			$	636

	Expenses (Note 2):
		Distribution fee:
			Class A			-	*
			Class B			2
			Class C			89
			Class Y			-	*
		Investment management fee				72
		Service fee:
			Class A			4
			Class B			1
			Class C			30
		Shareholder servicing:
			Class A			1
			Class B			1
			Class C			23
			Class Y			-	*
		Registration fees				19
		Accounting and administrative services fees				13
		Audit fees				9
		Custodian fees				1
		Other				3

			Total expenses			268

				Net investment income		368

REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTES 1 AND 3)
	Realized net gain on investments					71
	Unrealized appreciation in value of investments
		during the period				134

		Net gain on investments				205

			Net increase in net assets resulting from operations		$	573


*Not shown due to rounding.

STATEMENT OF CHANGES IN NET ASSETS

MUNICIPAL BOND FUND
(In Thousands)

					For the six months ended September 30, 2003		For the fiscal year ended March 31, 2003




INCREASE (DECREASE) IN NET ASSETS
	Operations:
		Net investment income			$	368		$	853
		Realized net gain on investments				71			42
		Unrealized appreciation				134			1,161

			Net increase in net assets
				resulting from operations		573			2,056

	Distributions to shareholders from
		net investment income (Note 1F):⁽¹⁾
		Class A				(53	)		(99	)
		Class B				(9	)		(13	)
		Class C				(305	)		(727	)
		Class Y				-	*		-	*

						(367	)		(839	)

	Capital share transactions (Note 5)					(2,102	)		119

		Total increase (decrease)				(1,896	)		1,336
NET ASSETS
	Beginning of period					27,845			26,509

	End of period				$	25,949		$	27,845

		Undistributed net investment income			$	15		$	14


*Not shown due to rounding.
(1)See "Financial Highlights" on pages 139 - 145.

FINANCIAL HIGHLIGHTS

MUNICIPAL BOND FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended				For the fiscal year ended March 31,					For the period from 9-15-00⁽¹⁾to
			9-30-03				2003			2002		3-31-01

Net asset value,
	beginning of period		$	11.10		$	10.61		$	10.52		$	10.33

Income from investment
	operations:
	Net investment income			0.19			0.42			0.47			0.26
	Net realized and
		unrealized gain
		on investments		0.10			0.49			0.09			0.19

Total from investment
	operations			0.29			0.91			0.56			0.45

Less distributions:
	Declared from net
		investment income		(0.19	)		(0.42	)		(0.47	)		(0.26	)
	From capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions				(0.19	)		(0.42	)		(0.47	)		(0.26	)

Net asset value,
	end of period		$	11.20		$	11.10		$	10.61		$	10.52

Total return⁽²⁾				2.67	%		8.71	%		5.38	%		4.32	%
Net assets, end of
	period (in millions)			$3			$3			$2			$1
Ratio of expenses to average
	net assets			1.20	%(3)		1.15	%		1.17	%		1.21	%(3)
Ratio of net investment
	income to average
	net assets			3.43	%(3)		3.79	%		4.37	%		4.69	%(3)
Portfolio turnover rate				2.00	%		40.03	%		36.41	%		34.78	%(4)

(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)Annualized.
(4)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

MUNICIPAL BOND FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended				For the fiscal year ended March 31,					For the period from 8-8-00⁽¹⁾to
			9-30-03				2003			2002		3-31-01

Net asset value,
	beginning of period		$	11.10		$	10.61		$	10.52		$	10.26

Income from
	investment operations:
	Net investment income			0.15			0.33			0.32			0.22
	Net realized and unrealized
		gain on investments		0.10			0.49			0.09			0.26

Total from investment
	operations			0.25			0.82			0.41			0.48

Less distributions:
	Declared from net
		investment income		(0.15	)		(0.33	)		(0.32	)		(0.22	)
	From capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions				(0.15	)		(0.33	)		(0.32	)		(0.22	)

Net asset value,
	end of period		$	11.20		$	11.10		$	10.61		$	10.52

Total return				2.25	%		7.81	%		3.97	%		4.66	%
Net assets, end of period
	(000 omitted)			$737			$532			$120			$37
Ratio of expenses to
	average net assets			2.01	%⁽²⁾		1.96	%		2.44	%		2.82	%⁽²⁾
Ratio of net investment
	income to average
	net assets			2.63	%⁽²⁾		2.98	%		3.09	%		3.11	%⁽²⁾
Portfolio turnover rate				2.00	%		40.03	%		36.41	%		34.78	%⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

MUNICIPAL BOND FUND
Class C Shares⁽¹⁾
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended				For the fiscal year ended March 31,
			9-30-03				2003			2002			2001			2000			1999

Net asset value,
	beginning of period		$	11.10		$	10.61		$	10.52		$	10.11		$	11.24		$	11.45

Income (loss) from
	investment operations:
	Net investment
		income		0.14			0.32			0.37			0.40			0.42			0.42
	Net realized and
		unrealized gain (loss)
		on investments		0.10			0.49			0.09			0.41			(1.11	)		0.10

Total from investment
	operations			0.24			0.81			0.46			0.81			(0.69	)		0.52

Less distributions:
	Declared from net
		investment income		(0.14	)		(0.32	)		(0.37	)		(0.40	)		(0.42	)		(0.42	)
	From capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(0.31	)

Total distributions				(0.14	)		(0.32	)		(0.37	)		(0.40	)		(0.44	)		(0.73	)

Net asset value,
	end of period		$	11.20		$	11.10		$	10.61		$	10.52		$	10.11		$	11.24

Total return				2.23	%		7.75	%		4.40	%		8.22	%		-6.21	%		4.64	%
Net assets, end of period
	(in millions)			$22			$25			$24			$26			$28			$43
Ratio of expenses to
	average net assets			2.05	%⁽²⁾		2.03	%		2.13	%		2.13	%		1.98	%		1.88	%
Ratio of net investment
	income to average
	net assets			2.58	%⁽²⁾		2.95	%		3.44	%		3.94	%		3.94	%		3.68	%
Portfolio turnover rate				2.00	%		40.03	%		36.41	%		34.78	%		16.95	%		41.53	%

(1)See Note 5.
(2)Annualized.

**FINANCIAL HIGHLIGHTS**
MUNICIPAL BOND FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:
			For the six months ended				For the fiscal year ended March 31,										For the period from 12-30-98⁽¹⁾to
			9-30-03				2003			2002			2001			2000	3-31-99

Net asset value,
	beginning of period		$	11.10		$	10.61		$	10.52		$	10.11		$	11.24		$	11.58

Income (loss) from
	investment operations:
	Net investment
		income		0.18			0.40			0.44			0.47			0.48			0.13
	Net realized and
		unrealized gain (loss)
		on investments		0.10			0.49			0.09			0.41			(1.11	)		(0.03	)

Total from investment
	operations			0.28			0.89			0.53			0.88			(0.63	)		0.10

Less distributions:
	Declared from net
		investment income		(0.18	)		(0.40	)		(0.44	)		(0.47	)		(0.48	)		(0.13	)
	From capital gains			(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.02	)		(0.31	)

Total distributions				(0.18	)		(0.40	)		(0.44	)		(0.47	)		(0.50	)		(0.44	)

Net asset value,
	end of period		$	11.20		$	11.10		$	10.61		$	10.52		$	10.11		$	11.24

Total return				2.56	%		8.52	%		5.10	%		9.04	%		-5.69	%		0.80	%
Net assets, end of period
	(000 omitted)			$4			$4			$2			$2			$2			$2
Ratio of expenses to
	average net assets			1.42	%⁽²⁾		1.33	%		1.44	%		1.47	%		1.40	%		1.00	%⁽²⁾
Ratio of net investment
income to average
net assets				3.20	%⁽²⁾		3.64	%		4.09	%		4.61	%		4.52	%		4.40	%⁽²⁾
Portfolio turnover rate				2.00	%		40.03	%		36.41	%		34.78	%		16.95	%		41.53	%⁽³⁾

(1) Recommencement of operations of the class.
(2) Annualized.
(3) For the fiscal year ended March 31, 1999.

SHAREHOLDER SUMMARY OF SCIENCE AND TECHNOLOGY FUND

GOAL

Science and Technology Fund

To seek long-term capital growth.

Strategy

Invests primarily in the equity securities of United States and foreign science and technology companies. Science and technology companies have products, processes or services that are being or are expected to be significantly benefited by the use or commercial application of scientific or technological developments or discoveries. As well, the Fund may invest in companies that utilize science and/or technology to improve their existing business even though the business is not within the science and technology industries.

Founded

1997

Scheduled Dividend Frequency

Annually (December)

Performance Summary - Class C Shares


Per Share Data
For the Six Months Ended September 30, 2003

Net asset value on
9-30-03	$16.26
3-31-03	13.88

Change per share	$ 2.38

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF SCIENCE AND TECHNOLOGY FUND


Average Annual Total Return^(A)
	Class A		Class B
	With Sales Load^{^(B)}	Without Sales Load⁽^{^C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}
Period	With Sales Load^{^(B)}	Without Sales Load⁽^{^C)}	With CDSC^{^(D)}	Without CDSC^{^(E)}

1-year period ended 9-30-03	12.70%	19.57%	14.18%	18.18%
5-year period ended 9-30-03	-	-	-	-
10-year period ended 9-30-03	-	-	-	-
Since inception of Class^{^(F)}	-14.69%	-13.12%	-14.60%	-14.00%

(B)Performance data is based on deduction of 5.75% sales load on the initial purchase in the periods.

(C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)7-3-00 for Class A shares and Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^{^(B)}	Class Y^{^(C)}

1-year period ended 9-30-03	18.51%	19.93%
5-year period ended 9-30-03	13.61%	14.58%
10-year period ended 9-30-03	-	-
Since inception of Class^{^(D)}	13.40%	12.43%

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)7-31-97 for Class C shares and 6-9-98 for Class Y shares (the date on which shares were first acquired by shareholders).

Investing in companies involved in one specified sector may involve a greater degree of risk than an investment with greater diversification.

SHAREHOLDER SUMMARY OF SCIENCE AND TECHNOLOGY FUND

Portfolio Highlights

On September 30, 2003, Science and Technology Fund had net assets totaling $119,579,450 invested in a diversified portfolio of:


96.77%		Common Stocks
3.23%		Cash and Cash Equivalents


As a shareholder of Science and Technology Fund, for every $100 you had invested on September 30, 2003, your Fund owned:

	Technology Stocks	$	37.83
	Health Care Stocks	$	28.80
	Multi-Industry Stocks	$	8.69
	Business Equipment and Services Stocks	$	8.45
	Energy Stocks	$	4.65
	Utilities Stocks	$	3.55
	Cash and Cash Equivalents	$	3.23
	Miscellaneous Stocks	$	2.72
	Raw Materials Stocks	$	2.08

THE INVESTMENTS OF SCIENCE AND TECHNOLOGY FUND

September 30, 2003


COMMON STOCKS	Shares		Value


Aircraft - 2.04%
Northrop Grumman Corporation	28,250	$	2,435,715

Broadcasting - 1.15%
Adelphia Communications Corporation, Class A*	167,000		51,352
Cox Communications, Inc., Class A*	41,800		1,321,716
			1,373,068
Business Equipment and Services - 3.67%
Accenture Ltd*	49,891		1,114,565
BearingPoint, Inc.*	131,800		1,051,764
Edison Schools Inc.*	202,850		348,902
Euronet Worldwide, Inc.*	132,600		1,604,460
Innovex, Inc.*	26,500		263,410
			4,383,101
Chemicals - Specialty - 2.08%
Pall Corporation	111,000		2,490,840

Communications Equipment - 3.57%
Cisco Systems, Inc.*	101,800		1,990,190
Nokia Corporation, Series A, ADR	73,800		1,151,280
Nortel Networks Corporation*	273,900		1,122,990
			4,264,460
Computers - Main and Mini - 0.49%
International Business Machines Corporation	6,700		591,811

Computers - Micro - 1.01%
Dell Inc.*	36,100		1,205,920

Computers - Peripherals - 10.42%
Amdocs Limited*	65,400		1,229,520
EMC Corporation*	90,800		1,146,804
Electronics for Imaging, Inc.*	29,900		693,979
Microsoft Corporation	74,900		2,082,969
PeopleSoft, Inc.*	62,750		1,140,481
Seagate Technology	88,700		2,412,640
Symbol Technologies, Inc.	314,375		3,756,781
			12,463,174
Consumer Electronics - 1.11%
Sony Corporation, ADR	38,050		1,324,140

Electronic Components - 16.95%
AMIS Holdings, Inc.*	27,800		514,161
ARM Holdings plc, ADR*	154,300		756,070
AU Optronics Corp., ADR	160,190		2,044,024
Agere Systems Inc., Class A*	429,950		1,319,947
IXYS Corporation*	81,330		760,435
Intel Corporation	42,900		1,180,608
Mattson Technology, Inc.*	66,979		605,490
Microchip Technology Incorporated	65,500		1,572,655
Micron Technology, Inc.*	192,035		2,577,110
OmniVision Technologies, Inc.*	43,430		1,838,392
ON Semiconductor Corporation*	107,800		439,285
Taiwan Semiconductor Manufacturing Company Ltd., ADR	80,000		866,400
Texas Instruments Incorporated	87,300		1,990,440
United Microelectronics Corporation*	390,984		1,763,338
Xilinx, Inc.*	71,600		2,036,662
			20,265,017
Electronic Instruments - 3.35%
Applied Materials, Inc.*	124,400		2,255,372
Credence Systems Corporation*	77,000		888,965
Photronics, Inc.*	40,200		856,863
			4,001,200
Health Care - Drugs - 15.16%
Abbott Laboratories	56,000		2,382,800
Alcon, Inc.	75,550		4,242,133
Amylin Pharmaceuticals, Inc.*	39,600		1,120,482
Forest Laboratories, Inc.*	43,200		2,222,640
Genzyme Corporation - General Division*	80,300		3,722,708
IVAX Corporation*	116,750		2,288,300
Incyte Corporation*	11,010		50,866
Pfizer Inc.	69,200		2,102,296
			18,132,225
Health Care - General - 3.95%
ALARIS Medical, Inc.*	56,530		938,398
Boston Scientific Corporation*	59,300		3,783,340
			4,721,738
Hospital Supply and Management - 9.69%
Anthem, Inc.*	22,144		1,579,532
Cerner Corporation*	54,400		1,676,608
HCA Inc.	140,050		5,162,243
Province Healthcare Company*	244,800		3,170,160
			11,588,543
Multiple Industry - 8.69%
Amphenol Corporation, Class A*	51,200		2,664,960
Garmin Ltd.*	72,800		3,048,500
Research In Motion Limited*	91,300		3,487,660
Samsung Electronics Co., Ltd. (A)	3,500		1,192,888
			10,394,008
Petroleum - Domestic - 4.65%
Burlington Resources Inc.	39,809		1,918,794
Noble Energy, Inc.	56,500		2,163,950
Unocal Corporation	46,950		1,479,864
			5,562,608
Photographic Equipment - 0.46%
Lexar Media, Inc.*	32,300		549,746

Timesharing and Software - 4.78%
Amazon.com, Inc.*	57,200		2,765,906
Concord EFS, Inc.*	86,500		1,182,455
Eclipsys Corporation*	64,400		1,028,146
Micromuse Inc.*	90,500		741,195
			5,717,702
Utilities - Telephone - 3.55%
Chunghwa Telecom Co., Ltd., ADR	106,100		1,486,461
Vodafone Group Plc, ADR	136,400		2,762,100
			4,248,561

TOTAL COMMON STOCKS - 96.77%		$	115,713,577

(Cost: $116,522,725)

TOTAL SHORT-TERM SECURITIES - 5.11%		$	6,109,671

(Cost: $6,109,671)

TOTAL INVESTMENT SECURITIES - 101.88%		$	121,823,248

(Cost: $122,632,396)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.88%)			(2,243,798)


NET ASSETS - 100.00%		$	119,579,450

Notes to Schedule of Investments

*No income dividends were paid during the preceding 12 months.

(A)Listed on an exchange outside the United States.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

SCIENCE AND TECHNOLOGY FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities - at value (cost - $122,632)
		(Notes 1 and 3)			$	121,823
	Receivables:
		Investment securities sold				156
		Fund shares sold				130
		Dividends and interest				15

			Total assets			122,124

LIABILITIES
	Payable for investment securities purchased					2,005
	Payable to Fund shareholders					357
	Accrued shareholder servicing (Note 2)					88
	Due to custodian					11
	Accrued accounting and administrative services fees (Note 2)					5
	Accrued management fee (Note 2)					3
	Accrued distribution fee (Note 2)					2
	Accrued service fee (Note 2)					1
	Other					73

			Total liabilities			2,545

				Total net assets	$	119,579

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	73
		Additional paid-in capital				208,364
	Accumulated undistributed loss:
		Accumulated undistributed net investment loss				(959	)
		Accumulated undistributed net realized loss
			on investment transactions			(87,090	)
		Net unrealized depreciation in value of investments				(809	)

			Net assets applicable to outstanding units of capital		$	119,579

Net asset value per share (net assets divided by shares outstanding):
	Class A					$16.68
	Class B					$16.12
	Class C					$16.26
	Class Y					$17.09
Capital shares outstanding:
	Class A					1,521
	Class B					549
	Class C					4,872
	Class Y					360
Capital shares authorized						400,000

STATEMENT OF OPERATIONS

SCIENCE AND TECHNOLOGY FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT LOSS
	Income (Note 1B):
		Dividends (net of foreign withholding taxes of $44)			$	290
		Interest and amortization				103

			Total income			393

	Expenses (Note 2):
		Investment management fee				460
		Shareholder servicing:
			Class A			52
			Class B			32
			Class C			239
			Class Y			4
		Distribution fee:
			Class A			2
			Class B			26
			Class C			285
			Class Y			6
		Service fee:
			Class A			24
			Class B			9
			Class C			95
		Accounting and administrative services fees				26
		Audit fees				12
		Custodian fees				5
		Legal fees				3
		Other				69

			Total expenses			1,349

				Net investment loss		(956	)

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
	Realized net loss on securities					(46,682	)
	Realized net loss on written options					(1,522	)
	Realized net loss on purchased options					(615	)

		Realized net loss on investments				(48,819	)
	Unrealized appreciation in value of investments during the period					18,212

			Net loss on investments			(30,607	)

				Net decrease in net assets resulting from operations	$	(31,563	)

STATEMENT OF CHANGES IN NET ASSETS

SCIENCE AND TECHNOLOGY FUND
(In Thousands)

				For the months ended September 30, 2003			For the fiscal year ended March 31, 2003

INCREASE (DECREASE) IN NET ASSETS
	Operations:
		Net investment loss		$	(956	)	$	(1,661	)
		Realized net loss on investments			(48,819	)		(14,866	)
		Unrealized appreciation (depreciation)			18,212			(12,386	)

			Net decrease in net assets resulting from operations		(31,563	)		(28,913	)

	Distributions to shareholders from realized gains on investment transactions (Note 1F):⁽¹⁾
		Class A			- -			- -
		Class B			- -			- -
		Class C			- -			- -
		Class Y			- -			- -

					- -			- -

	Capital share transactions (Note 5)				59,408			(10,197	)

		Total increase (decrease)			27,845			(39,110	)
NET ASSETS
	Beginning of period				91,734			130,844

	End of period			$	119,579		$	91,734

		Undistributed net investment loss		$	(959	)	$	(3	)


(1)See "Financial Highlights" on pages 152 - 157.

FINANCIAL HIGHLIGHTS

SCIENCE AND TECHNOLOGY FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended 9-30-03				For the fiscal year ended March 31,					For the period from 7-3-00⁽¹⁾to 3-31-01
		For the six months ended 9-30-03				2003			2002		For the period from 7-3-00⁽¹⁾to 3-31-01

Net asset value,
	beginning of period	$	14.17		$	18.19		$	17.93		$	34.91

Income (loss) from
	investment operations:
	Net investment income (loss)		(0.18	)		(0.32	)		(0.45	)		0.02
	Net realized and unrealized gain (loss) on investments		2.69			(3.70	)		0.73			(9.35	)

Total from investment operations			2.51			(4.02	)		0.28			(9.33	)

Less distribution from capital gains			(0.00	)		(0.00	)		(0.02	)		(7.65	)

Net asset value, end of period		$	16.68		$	14.17		$	18.19		$	17.93

Total return⁽²⁾			17.71	%		- -22.10	%		1.56	%		- -31.95	%
Net assets, end of period (in millions)			$25			$14			$12			$6
Ratio of expenses to average net assets			1.80	%⁽³⁾		1.79	%		1.75	%		1.70	%⁽³⁾
Ratio of net investment income (loss) to average net assets			- -1.11	%⁽³⁾		- -0.92	%		- -0.76	%		0.26	%⁽³⁾
Portfolio turnover rate			59.69	%		74.48	%		90.92	%		111.25	%⁽⁴⁾

(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)Annualized.
(4)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

SCIENCE AND TECHNOLOGY FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

		For the six months ended 9-30-03				For the fiscal year ended March 31,					For the period from 7-3-00⁽¹⁾ to 3-31-01
		For the six months ended 9-30-03				2003			2002		For the period from 7-3-00⁽¹⁾ to 3-31-01

Net asset value, beginning of period		$	13.77		$	17.88		$	17.80		$	34.91

Income (loss) from investment operations:
	Net investment loss		(0.13	)		(0.34	)		(0.38	)		(0.06	)
	Net realized and unrealized gain (loss) on investments		2.48			(3.77	)		0.48			(9.40	)

Total from investment operations			2.35			(4.11	)		0.10			(9.46	)

Less distribution from capital gains			(0.00	)		(0.00	)		(0.02	)		(7.65	)

Net asset value, end of period		$	16.12		$	13.77		$	17.88		$	17.80

Total return			17.07	%		- -22.99	%		0.56	%		- -32.37	%
Net assets, end of period (in millions)			$9			$4			$4			$3
Ratio of expenses to average net assets			3.00	%⁽²⁾		3.00	%		2.75	%		2.53	%⁽²⁾
Ratio of net investment loss to average net assets			- -2.31	%⁽²⁾		- -2.12	%		- -1.73	%		- -0.55	%⁽²⁾
Portfolio turnover rate			59.69	%		74.48	%		90.92	%		111.25	%⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

SCIENCE AND TECHNOLOGY FUND
Class C Shares⁽¹⁾
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03				For the fiscal year ended March 31,
			For the six months ended 9-30-03		2003			2002			2001			2000			1999

Net asset value, beginning of period		$	13.88		$	17.97		$	17.83		$	45.03		$	17.45		$	12.01

Income (loss) from investment operations:
	Net investment loss		(0.16	)		(0.25	)		(0.24	)		(0.12	)		(0.95	)		(0.09	)
	Net realized andunrealized gain (loss)on investments		2.54			(3.84	)		0.40			(19.43	)		28.77			5.53

Total from investment operations			2.38			(4.09	)		0.16			(19.55	)		27.82			5.44

Less distribution from capital gains			(0.00	)		(0.00	)		(0.02	)		(7.65	)		(0.24	)		(0.00	)

Net asset value, end of period		$	16.26		$	13.88		$	17.97		$	17.83		$	45.03		$	17.45

Total return			17.15	%		-22.76	%		0.89	%		-47.49	%		159.75	%		45.30	%
Net assets, end ofperiod (in millions)			$79			$70			$112			$134			$283			$44
Ratio of expenses to average net assets			2.70	%⁽²⁾		2.67	%		2.45	%		2.27	%		2.20	%		2.57	%
Ratio of net investmentloss to average net assets			-1.96	%⁽²⁾		-1.77	%		-1.40	%		-0.44	%		-1.68	%		-1.26	%
Portfolio turnover rate			59.69	%		74.48	%		90.92	%		111.25	%		44.19	%		51.00	%

(1)See Note 5.
(2)Annualized.

FINANCIAL HIGHLIGHTS

SCIENCE AND TECHNOLOGY FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03				For the fiscal year ended March 31,											For the period from 6-9-98⁽¹⁾ to 3-31-99
			For the six months ended 9-30-03		2003			2002			2001			2000				For the period from 6-9-98⁽¹⁾ to 3-31-99

Net asset value, beginning of period		$	14.51		$	18.54		$	18.21		$	45.36		$	17.65		$	12.20

Income (loss) from investment operations:
	Net investment income (loss)		(0.24	)		(0.26	)		(0.51	)		(0.01	)		(6.09	)		0.01
	Net realized and unrealized gain (loss) on investments		2.82			(3.77	)		0.86			(19.49	)		34.04			5.44

Total from investment operations			2.58			(4.03	)		0.35			(19.50	)		27.95			5.45

Less distribution from capital gains			(0.00	)		(0.00	)		(0.02	)		(7.65	)		(0.24	)		(0.00	)

Net asset value, end of period			$17.09			$14.51			$18.54			$18.21			$45.36			$17.65

Total return			17.78	%		- -21.74	%		1.92	%		-47.00	%		158.67	%		44.67	%
Net assets, end of period (000 omitted)			$6,146			$3,198			$3,035			$1,466			$2,108			$53
Ratio of expenses to average net assets			1.44	%⁽²⁾		1.41	%		1.39	%		1.35	%		1.36	%		0.62	%⁽²⁾
Ratio of net investment income (loss) to average net assets			- -0.79	%⁽²⁾		- -0.53	%		- -0.43	%		0.47	%		- -0.96	%		0.54	%⁽²⁾
Portfolio turnover rate			59.69	%		74.48	%		90.92	%		111.25	%		44.19	%		51.00	%⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 1999.

SHAREHOLDER SUMMARY OF SMALL CAP GROWTH FUND

GOAL

Small Cap Growth Fund

To seek growth of capital.

Strategy

Invests primarily in common stocks of United States and foreign companies whose market capitalizations are within the range of capitalizations of companies included in the Lipper, Inc. Small Cap Category. The Fund emphasizes relatively new or unseasoned companies in the early stages of development or smaller companies positioned in new or emerging industries where there is an opportunity for rapid growth.

Founded

1992

Scheduled Dividend Frequency

Annually (December)

Performance Summary - Class C Shares


Per Share Data
For the Six Months Ended September 30, 2003

Net asset value on
9-30-03	$9.47
3-31-03	8.07

Change per share	$1.40

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF SMALL CAP GROWTH FUND


Average Annual Total Return^(A)
	Class A		Class B
	With Sales Load^(B)	Without Sales Load^(C)	With CDSC^(D)	Without CDSC^(E)
Period	With Sales Load^(B)	Without Sales Load^(C)	With CDSC^(D)	Without CDSC^(E)

1-year period ended 9-30-03	21.50%	28.91%	23.41%	27.41%
5-year period ended 9-30-03	-	-	-	-
10-year period ended 9-30-03	-	-	-	-
Since inception of Class^{^(F)}	-10.55%	-8.90%	-9.86%	-9.29%

(B)Performance data is based on deduction of 5.75% sales load on the initial purchase in the periods.

(C)Performance data does not take into account the sales load deducted on an initial purchase.

(D)Performance data reflects the effect of paying the applicable contingent deferred sales charge (CDSC) at a maximum of 5.00% upon redemption at the end of each of the periods.

(E)Performance data does not reflect the effect of paying the applicable CDSC upon redemption at the end of each of the periods.

(F)7-3-00 for Class A shares and 7-6-00 for Class B shares (the date on which shares were first acquired by shareholders).


Average Annual Total Return^(A)
Period	Class C^(B)	Class Y^(C)

1-year period ended 9-30-03	27.80%	29.19%
5-year period ended 9-30-03	8.48%	9.47%
10-year period ended 9-30-03	12.35%	-
Since inception of Class^(D)	-	11.05%

(C)Performance data does not include the effect of sales charges, as Class Y shares are not subject to these charges.

(D)12-29-95 for Class Y shares (the date on which shares were first acquired by shareholders).

Investing in small cap stocks may carry more risk than investing in stocks of larger, more well-established companies.

SHAREHOLDER SUMMARY OF SMALL CAP GROWTH FUND

Portfolio Highlights

On September 30, 2003, Small Cap Growth Fund had net assets totaling $414,777,646 invested in a diversified portfolio of:


91.16%		Common Stocks
8.84%		Cash and Cash Equivalents


As a shareholder of Small Cap Growth Fund, for every $100 you had invested on September 30, 2003, your Fund owned:

	Health Care Stocks	$	22.86
	Business Equipment and Services Stocks	$	18.44
	Technology Stocks	$	14.97
	Cash and Cash Equivalents	$	8.84
	Retail Stocks	$	7.32
	Consumer Services Stocks	$	5.59
	Energy Stocks	$	5.57
	Consumer Nondurables Stocks	$	5.50
	Financial Services Stocks	$	3.27
	Miscellaneous Stocks	$	3.18
	Utilities Stocks	$	2.26
	Consumer Durables Stocks	$	2.20

THE INVESTMENTS OF SMALL CAP GROWTH FUND

September 30, 2003



		Shares			Value

COMMON STOCKS
Beverages - 0.94%
Mondavi (Robert) Corporation (The), Class A*			125,891	$	3,892,550

Broadcasting - 2.17%
Cox Radio, Inc., Class A*			193,600		4,234,032
Entercom Communications Corp.*			106,000		4,750,920
					8,984,952
Business Equipment and Services - 11.99%
Acxiom Corporation*			715,200		11,267,976
CheckFree Corporation*			538,994		10,825,694
FTI Consulting, Inc.*			181,500		3,149,025
MSC Industrial Direct Co., Inc., Class A*			693,800		14,465,730
MAXIMUS, Inc.*			290,500		10,007,725
					49,716,150
Chemicals - Specialty - 1.62%
Minerals Technologies Inc.			132,400		6,739,160

Communications Equipment - 4.42%
Advanced Fibre Communications, Inc.*			496,280		10,439,250
Tekelec*			504,500		7,882,812
					18,322,062
Computers - Peripherals - 2.59%
Sanchez Computer Associates, Inc.*			48,521		187,776
Take-Two Interactive Software, Inc.*			226,200		7,739,433
Transaction Systems Architects, Inc., Class A*			169,000		2,833,285
					10,760,494
Electronic Components - 1.10%
Power Integrations, Inc.*			137,700		4,582,656

Electronic Instruments - 6.86%
FLIR Systems, Inc.*			173,600		4,425,064
Lam Research Corporation*			178,300		3,951,128
Mettler-Toledo International Inc.*			175,500		6,309,225
Plexus Corp.*			595,600		9,270,514
Zebra Technologies Corporation*			87,300		4,499,442
					28,455,373
Finance Companies - 1.43%
Financial Federal Corporation*			194,200		5,925,042

Food and Related - 3.47%
American Italian Pasta Company, Class A*			290,100		11,223,969
Smucker (J.M.) Company (The)			75,490		3,182,658
					14,406,627
Health Care - Drugs - 5.58%
Affymetrix, Inc.*			93,673		1,963,386
Cell Therapeutics, Inc.*			553,038		6,296,338
NPS Pharmaceuticals, Inc.*			140,900		3,916,315
Pharmaceutical Resources, Inc.*			76,500		5,218,830
Sepracor Inc.*			207,880		5,742,685
					23,137,554
Health Care - General - 12.05%
ALARIS Medical, Inc.*			262,730		4,361,318
ArthroCare Corporation*			325,391		5,801,722
Cholestech Corporation*			84,674		652,837
Ciphergen Biosystems, Inc.*			242,900		2,997,386
IDEXX Laboratories, Inc.*			109,704		4,659,677
Omnicare, Inc.			478,000		17,236,680
ResMed Inc.*			87,524		3,849,306
VISX, Incorporated*			547,800		10,435,590
					49,994,516
Hospital Supply and Management - 5.23%
Amsurg Corp.*			235,309		7,768,727
Cerner Corporation*			314,900		9,705,218
Mid Atlantic Medical Services, Inc.*			81,800		4,206,974
					21,680,919
Motor Vehicle Parts - 2.20%
Gentex Corporation*			262,300		9,135,909

Petroleum - Domestic - 5.57%
Newfield Exploration Company*			291,300		11,235,441
Patterson-UTI Energy, Inc.*			292,100		7,908,607
Stone Energy Corporation*			112,000		3,951,360
					23,095,408
Photographic Equipment - 1.09%
DuPont Photomasks, Inc.*			200,000		4,543,000

Publishing - 3.42%
Getty Images, Inc.*			338,000		11,884,080
Martek Biosciences Corporation*			43,600		2,295,540
					14,179,620
Railroad - 1.56%
Kansas City Southern*			583,000		6,453,810

Restaurants - 1.58%
Sonic Corp.*			259,100		6,564,298

Retail - General Merchandise - 0.92%
Tuesday Morning Corporation*			136,100		3,797,190

Retail - Specialty Stores - 4.82%
Borders Group, Inc.*			230,000		4,351,600
Gymboree Corporation (The)*			502,700		7,110,692
O'Reilly Automotive, Inc.*			232,400		8,545,348
					20,007,640
Security and Commodity Brokers - 1.84%
Chicago Mercantile Exchange Holdings Inc.			110,697		7,617,061

Timesharing and Software - 6.45%
Cognizant Technology Solutions Corporation*			213,500		7,786,345
Digital Insight Corporation*			139,800		2,784,117
F5 Networks, Inc.*			167,852		3,230,312
FactSet Research Systems, Inc.			134,700		5,973,945
Manhattan Associates, Inc.*			73,100		1,897,311
MicroStrategy Incorporated, Class A*			68,550		3,149,872
Resources Connection, Inc.*			79,535		1,928,326
					26,750,228
Utilities - Telephone - 2.26%
Commonwealth Telephone Enterprises, Inc.*			233,700		9,391,235

TOTAL COMMON STOCKS - 91.16%				$	378,133,454

(Cost: $309,999,331)

SHORT-TERM SECURITIES			Principal Amount in Thousands


Beverages - 2.41%
Coca-Cola Company (The),
	1.02%, 10-20-03		$10,000		9,994,617

Containers - 0.72%
Bemis Company, Inc.,
	1.03%, 10-2-03		3,000		2,999,914

Finance Companies - 0.41%
State Street Corporation,
	1.11%, 10-1-03		1,673		1,673,000

Food and Related - 1.00%
General Mills, Inc.,
	1.17%, Master Note		161		161,000
Sara Lee Corporation
	1.12%, 10-8-03		4,000		3,999,129
					4,160,129
Household - General Products - 0.48%
Procter & Gamble Company (The),
	1.02%, 10-7-03		2,000		1,999,660

Motor Vehicles - 0.97%
Harley-Davidson, Inc.,
	1.04%, 10-24-03		4,000		3,997,342

Publishing - 0.72%
Gannett Co.,
	1.02%, 10-16-03		3,000		2,998,725

Retail - General Merchandise - 0.55%
Target Corporation,
	1.02%, 10-6-03		2,295		2,294,675

Security and Commodity Brokers - 2.41%
Prudential Funding Corp.:
	1.03%, 10-15-03		5,000		4,997,997
	1.03%, 10-16-03		5,000		4,997,854
					9,995,851
Utilities - Electric - 0.59%
PacifiCorp,
	1.12%, 10-29-03		2,436		2,433,878

TOTAL SHORT-TERM SECURITIES - 10.26%				$	42,547,791

(Cost: $42,547,791)

TOTAL INVESTMENT SECURITIES - 101.42%				$	420,681,245

(Cost: $352,547,122)

LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.42%)					(5,903,599)


NET ASSETS - 100.00%				$	414,777,646

Notes to Schedule of Investments

*No income dividends were paid during the preceding 12 months.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

SMALL CAP GROWTH FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities - at value (cost - $352,547)
		(Notes 1 and 3)			$	420,681
	Receivables:
		Investment securities sold				3,838
		Fund shares sold				372
		Dividends and interest				4

			Total assets			424,895

LIABILITIES
	Payable for investment securities purchased					7,789
	Payable to Fund shareholders					2,021
	Accrued shareholder servicing (Note 2)					150
	Accrued accounting and administrative services fees (Note 2)					11
	Accrued management fee (Note 2)					10
	Accrued distribution fee (Note 2)					7
	Accrued service fee (Note 2)					2
	Due to custodian					2
	Other					125

			Total liabilities			10,117

				Total net assets	$	414,778

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	430
		Additional paid-in capital				479,445
	Accumulated undistributed income (loss):
		Accumulated undistributed net investment loss				(3,654	)
		Accumulated undistributed net realized loss on investment transactions				(129,577	)
		Net unrealized appreciation in value of investments				68,134

			Net assets applicable to outstanding units of capital		$	414,778

Net asset value per share (net assets divided by shares outstanding):
	Class A					$9.72
	Class B					$9.39
	Class C					$9.47
	Class Y					$10.49
Capital shares outstanding:
	Class A					3,421
	Class B					1,022
	Class C					32,187
	Class Y					6,404
Capital shares authorized						400,000

STATEMENT OF OPERATIONS

SMALL CAP GROWTH FUND
For the Six Months Ended September 30, 2003
|(In Thousands)

INVESTMENT LOSS
	Income (Note 1B):
		Interest and amortization			$	448
		Dividends				205

			Total income			653

	Expenses (Note 2):
		Investment management fee				1,733
		Distribution fee:
			Class A			2
			Class B			33
			Class C			1,140
			Class Y			77
		Shareholder servicing:
			Class A			46
			Class B			27
			Class C			522
			Class Y			46
		Service fee:
			Class A			40
			Class B			11
			Class C			380
		Accounting and administrative services fees				50
		Audit fees				14
		Custodian fees				11
		Legal fees				7
		Other				159

			Total expenses			4,298

				Net investment loss		(3,645	)

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
	Realized net loss on investments					(24,082	)
	Unrealized appreciation in value of investments
		during the period				89,490

		Net gain on investments				65,408

			Net increase in net assets resulting from operations		$	61,763

STATEMENT OF CHANGES IN NET ASSETS

SMALL CAP GROWTH FUND
(In Thousands)

				For the six months ended September 30, 2003			For the fiscal year ended March 31, 2003




INCREASE (DECREASE) IN NET ASSETS
	Operations:
		Net investment loss		$	(3,645	)	$	(6,940	)
		Realized net loss on investments			(24,082	)		(34,938	)
		Unrealized appreciation (depreciation)			89,490			(70,595	)

			Net increase (decrease) in net assets resulting from operations		61,763			(112,473	)

	Distributions to shareholders from realized gains on investment transactions (Note 1F):⁽¹⁾
		Class A			- -			- -
		Class B			- -			- -
		Class C			- -			- -
		Class Y			- -			- -

					- -			- -

	Capital share transactions (Note 5)				10,609			(51,670	)

		Total increase (decrease)			72,372			(164,143	)
NET ASSETS
	Beginning of period				342,406			506,549

	End of period			$	414,778		$	342,406

		Undistributed net investment loss		$	(3,654	)	$	(9	)


(1) See "Financial Highlights" on pages 166 - 173.

FINANCIAL HIGHLIGHTS

SMALL CAP GROWTH FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03			For the fiscal year ended March 31,						For the period from 7-3-00⁽¹⁾to 3-31-01
			For the six months ended 9-30-03			2003			2002			For the period from 7-3-00⁽¹⁾to 3-31-01

Net asset value, beginning of period		$	8.25		$	10.59		$	9.43		$	19.64

Income (loss) from investment operations:
	Net investment loss		(0.10	)		(0.23	)		(0.59	)		(0.02	)
	Net realized and unrealized gain (loss) on investments		1.57			(2.11	)		1.75			(4.74	)

Total from investment operations			1.47			(2.34	)		1.16			(4.76	)

Less distribution from capital gains			(0.00	)		(0.00	)		(0.00	)		(5.45	)

Net asset value, end of period		$	9.72		$	8.25		$	10.59		$	9.43

Total return⁽²⁾			17.82	%		- -22.10	%		12.30	%		- -28.30	%
Net assets, end of period (in millions)			$33			$20			$16			$4
Ratio of expenses to average net assets			1.48	%⁽³⁾		1.54	%		1.39	%		1.49	%⁽³⁾
Ratio of net investment loss to average net assets			- -1.16	%⁽³⁾		- -1.22	%		- -0.93	%		- -0.39	%⁽³⁾
Portfolio turnover rate			33.64	%		30.63	%		28.77	%		47.85	%⁽⁴⁾

(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)Annualized.
(4)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

SMALL CAP GROWTH FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03			For the fiscal year ended March 31,						For the period from 7-6-00⁽¹⁾ to 3-31 -01
			For the six months ended 9-30-03			2003			2002			For the period from 7-6-00⁽¹⁾ to 3-31 -01

Net asset value, beginning of period		$	8.01		$	10.40		$	9.36		$	19.26

Income (loss) from investment operations:
	Net investment loss		(0.10	)		(0.21	)		(0.26	)		(0.06	)
	Net realized and unrealized gain (loss) on investments		1.48			(2.18	)		1.30			(4.39	)

Total from investment operations			1.38			(2.39	)		1.04			(4.45	)
Less distribution from capital gains			(0.00	)		(0.00	)		(0.00	)		(5.45	)

Net asset value, end of period		$	9.39		$	8.01		$	10.40		$	9.36

Total return			17.23	%		- -22.98	%		11.11	%		- -27.29	%
Net assets, end of period (in millions)			$10			$7			$8			$5
Ratio of expenses to average net assets			2.59	%⁽²⁾		2.64	%		2.43	%		2.31	%⁽²⁾
Ratio of net investment loss to average net assets			- -2.27	%⁽²⁾		- -2.31	%		- -1.94	%		- -1.18	%⁽²⁾
Portfolio turnover rate			33.64	%		30.63	%		28.77	%		47.85	%⁽³⁾

(1)Commencement of operations of the class.
(2)Annualized.
(3)For the fiscal year ended March 31, 2001.

FINANCIAL HIGHLIGHTS

SMALL CAP GROWTH FUND⁽¹⁾
Class C Shares⁽²⁾For a Share of Capital Stock Outstanding Throughout Each Period:⁽³⁾

			For the six months ended 9-30-03			For the fiscal year ended March 31,
			For the six months ended 9-30-03			2003			2002			2001			2000			1999


Net asset value, beginning of period		$	8.07		$	10.44		$	9.38		$	21.64		$	14.74		$	14.29

Income (loss) from investment operations:
	Net investment loss		(0.10	)		(0.16	)		(0.16	)		(0.10	)		(0.18	)		(0.11	)
	Net realized and unrealized gain (loss) on investments		1.50			(2.21	)		1.22			(6.71	)		10.22			2.91

Total from investment operations			1.40			(2.37	)		1.06			(6.81	)		10.04			2.80

Less distribution from capital gains			(0.00	)		(0.00	)		(0.00	)		(5.45	)		(3.14	)		(2.35	)

Net asset value, end of period		$	9.47		$	8.07		$	10.44		$	9.38		$	21.64		$	14.74

Total return			17.35	%		- -22.70	%		11.30	%		- -35.17	%		73.38	%		21.61	%
Net assets, end of period (in millions)			$305			$273			$435			$459			$801			$425
Ratio of expenses to average net assets			2.31	%⁽⁴⁾		2.31	%		2.20	%		2.12	%		2.11	%		2.10	%
Ratio of net investment loss to average net assets			- -1.99	%⁽⁴⁾		- -1.98	%		- -1.70	%		- -0.81	%		- -0.90	%		- -0.90	%
Portfolio turnover rate			33.64	%		30.63	%		28.77	%		47.85	%		82.24	%		51.41	%

(1)Small Cap Growth Fund (formerly Growth Fund) changed its name effective June 30, 2000.
(2)See Note 5.
(3)Per-share amounts have been adjusted retroactively to reflect the 100% stock dividend effected June 26, 1998.
(4)Annualized.

FINANCIAL HIGHLIGHTS

SMALL CAP GROWTH FUND⁽¹⁾
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period:⁽²⁾

			For the six months ended 9-30-03			For the fiscal year ended March 31,
			For the six months ended 9-30-03			2003			2002			2001			2000			1999


Net asset value, beginning of period		$	8.89		$	11.39		$	10.14		$	22.65		$	15.21		$	14.55

Income (loss) from investment operations:
	Net investment income (loss)		(0.12	)		(0.11	)		(0.34	)		(0.20	)		(0.15	)		0.00
	Net realized and unrealized gain (loss) on investments		1.72			(2.39	)		1.59			(6.86	)		10.73			3.01

Total from investment operations			1.60			(2.50	)		1.25			(7.06	)		10.58			3.01

Less distribution from capital gains			(0.00	)		(0.00	)		(0.00	)		(5.45	)		(3.14	)		(2.35	)

Net asset value, end of period		$	10.49		$	8.89		$	11.39		$	10.14		$	22.65		$	15.21

Total return			18.00	%		- -21.95	%		12.33	%		- -34.67	%		74.71	%		22.73	%
Net assets, end of period (in millions)			$67			$42			$48			$21			$17			$8
Ratio of expenses to average net assets			1.36	%⁽³⁾		1.33	%		1.31	%		1.30	%		1.30	%		1.18	%
Ratio of net investment income (loss) to average net assets			- -1.04	%⁽³⁾		- -1.00	%		- -0.83	%		- -0.02	%		- -0.09	%		0.08	%
Portfolio turnover rate			33.64	%		30.63	%		28.77	%		47.85	%		82.24	%		51.41	%

(1)Small Cap Growth Fund (formerly Growth Fund) changed its name effective June 30, 2000.
(2)Per-share amounts have been adjusted retroactively to reflect the 100% stock dividend effected June 26, 1998.
(3)Annualized.

SHAREHOLDER SUMMARY OF TAX-MANAGED EQUITY FUND

GOAL

Tax-Managed Equity Fund

To seek long-term growth of capital while minimizing taxable gains and income to shareholders.

Strategy

Invests primarily in a diversified portfolio of common stocks of U.S. and foreign companies that the Fund's manager considers to be high in quality and attractive in their long-term investment potential. The Fund seeks stocks that are favorably priced in relation to their fundamental value and that will likely grow over time.

Founded

2000

Scheduled Dividend Frequency

Annually (December)

Performance Summary - Class A Shares


Per Share Data
For the Six Months Ended September 30, 2003

Net asset value on
9-30-03	$6.61
3-31-03	5.73

Change per share	$0.88

Past performance is not necessarily indicative of future results.

SHAREHOLDER SUMMARY OF TAX-MANAGED EQUITY FUND

Portfolio Highlights

On September 30, 2003, Tax-Managed Equity Fund had net assets totaling $5,802,724 invested in a diversified portfolio of:


99.92%		Common Stocks
0.08%		Cash and Cash Equivalents



As a shareholder of Tax-Managed Equity Fund, for every $100 you had invested on September 30, 2003, your Fund owned:
	Health Care Stocks	$	40.24
	Technology Stocks		21.03
	Retail Stocks		11.01
	Energy Stocks		8.92
	Financial Services Stocks		8.87
	Business Equipment and Services Stocks		4.61
	Consumer Durables Stocks		1.97
	Transportation Stocks		1.95
	Consumer Services Stocks		1.32
	Cash and Cash Equivalents		0.08

THE INVESTMENTS OF TAX-MANAGED EQUITY FUND

September 30, 2003



	Shares		Value

COMMON STOCKS
Air Transportation - 1.95%
Southwest Airlines Co.	6,400	$	113,280

Aircraft - 3.33%
Boeing Company (The)	2,000		68,660
Lockheed Martin Corporation	2,700		124,605
			193,265
Banks - 1.57%
Citigroup Inc.	2,000		91,020

Broadcasting - 1.32%
Clear Channel Communications, Inc.	2,000		76,600

Communications Equipment - 2.93%
Cisco Systems, Inc.*	6,300		123,165
Nokia Corporation, Series A, ADR	3,000		46,800
			169,965
Computers - Micro - 3.45%
Dell Inc.*	6,000		200,430

Computers - Peripherals - 8.96%
EMC Corporation*	9,000		113,670
Lexmark International, Inc.*	900		56,709
Microsoft Corporation	9,400		261,414
SAP Aktiengesellschaft, ADR	2,900		88,189
			519,982
Consumer Electronics - 1.97%
Digital Theater Systems, Inc.*	4,000		114,400

Electronic Components - 2.36%
Analog Devices, Inc.*	1,500		57,030
Texas Instruments Incorporated	3,500		79,800
			136,830
Finance Companies - 1.38%
Capital One Financial Corporation	1,400		79,856

Health Care - Drugs - 29.32%
Alcon, Inc.	800		44,920
Allergan, Inc.	1,500		118,095
Amgen Inc.*	3,200		206,512
Barr Laboratories, Inc.*	890		60,707
Biogen, Inc.*	2,000		76,200
Forest Laboratories, Inc.*	12,000		617,400
Gilead Sciences, Inc.*	2,800		156,646
MGI PHARMA, Inc.	3,000		116,250
Pfizer Inc.	4,000		121,520
Teva Pharmaceutical Industries Limited, ADR	3,200		183,040
			1,701,290
Health Care - General - 7.83%
Boston Scientific Corporation*	3,500		223,300
Johnson & Johnson	1,000		49,520
Zimmer Holdings, Inc.*	3,300		181,830
			454,650
Hospital Supply and Management - 3.09%
Aetna Inc.	1,000		61,030
Anthem, Inc.*	900		64,197
WellPoint Health Networks Inc.*	700		53,956
			179,183
Insurance - Property and Casualty - 2.81%
Berkshire Hathaway Inc., Class B*	32		79,872
MGIC Investment Corporation	1,600		83,312
			163,184
Petroleum - Canada - 1.28%
Nabors Industries Ltd.*	2,000		74,520

Petroleum - Domestic - 6.57%
Anadarko Petroleum Corporation	1,900		79,344
Apache Corporation	1,600		110,944
Burlington Resources Inc.	1,600		77,120
Patterson-UTI Energy, Inc.*	4,200		113,715
			381,123
Petroleum - International - 1.07%
Exxon Mobil Corporation	1,700		62,220

Retail - General Merchandise - 11.01%
Costco Wholesale Corporation*	3,000		93,330
Dollar General Corporation	7,000		140,000
Kohl's Corporation*	3,400		181,900
Wal-Mart Stores, Inc.	4,000		223,400
			638,630
Security and Commodity Brokers - 3.11%
Goldman Sachs Group, Inc. (The)	500		41,950
Merrill Lynch & Co., Inc.	700		37,471
Morgan Stanley	2,000		100,920
			180,341
Timesharing and Software - 4.61%
eBay Inc.*	5,000		267,600

TOTAL COMMON STOCKS - 99.92%			$5,798,369

(Cost: $5,117,188)

TOTAL INVESTMENT SECURITIES - 99.92%			$5,798,369

(Cost: $5,117,188)

CASH AND OTHER ASSETS, NET OF LIABILITIES- 0.08%			4,355


NET ASSETS - 100.00%			$5,802,724

Notes to Schedule of Investments

*No income dividends were paid during the preceding 12 months.

See Note 1 to financial statements for security valuation and other significant accounting policies concerning investments.

See Note 3 to financial statements for cost and unrealized appreciation and depreciation of investments owned for Federal income tax purposes.

STATEMENT OF ASSETS AND LIABILITIES

TAX-MANAGED EQUITY FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSETS
	Investment securities - at value (cost - $5,117)
		(Notes 1 and 3)			$	5,798
	Receivables:
		Investment securities sold				95
		Fund shares sold				3
		Dividends and interest				1

		Total assets				5,897

LIABILITIES
	Due to custodian					84
	Payable to Fund shareholders					4
	Accrued shareholder servicing (Note 2)					1
	Other					5

			Total liabilities			94

				Total net assets	$	5,803

NET ASSETS
	$0.01 par value capital stock:
		Capital stock			$	9
		Additional paid-in capital				8,260
	Accumulated undistributed income (loss):
		Accumulated undistributed net investment loss				(53	)
		Accumulated undistributed net realized loss on
			investment transactions			(3,094	)
		Net unrealized appreciation in value of securities				681

			Net assets applicable to outstanding units of capital		$	5,803

Net asset value per share (net assets divided by shares outstanding):
	Class A					$6.61
	Class B					$6.40
	Class C					$6.39
Capital shares outstanding:
	Class A					691
	Class B					49
	Class C					144
Capital shares authorized						400,000

STATEMENT OF OPERATIONS

TAX-MANAGED EQUITY FUND
For the Six Months Ended September 30, 2003
(In Thousands)

INVESTMENT LOSS
	Income (Note 1B):
		Dividends					$	11
		Interest and amortization						2

			Total income					13

	Expenses (Note 2):
		Registration fees						35
		Investment management fee						17
		Audit fees						11
		Service fee:
			Class A					5
			Class B					-	*
			Class C					1
		Shareholder servicing:
			Class A					3
			Class B					1
			Class C					2
		Distribution fee:
			Class A					-	*
			Class B					1
			Class C					3
		Custodian fees						3
		Accounting and adminstrative services fees						-	*
		Other						1

			Total					83
				Less expenses in excess of voluntary waiver of (Note 2):
					Investment management fee			(17	)
					Administrative fee			-	*

					Total expenses			66

						Net investment loss		(53	)

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 3)
	Realized net gain on securities							105
	Realized net loss on written options							(14	)

		Realized net gain on investments						91
	Unrealized appreciation in value of investments during the period							672

			Net gain on investments					763

				Net increase in net assets resulting from operations			$	710


*Not shown due to rounding.

STATEMENT OF CHANGES IN NET ASSETS

TAX-MANAGED EQUITY FUND
(In Thousands)

				For the six months ended September 30, 2003			For the fiscal year ended March 31, 2003

INCREASE (DECREASE) IN NET ASSETS
	Operations:
		Net investment loss		$	(53	)	$	(44	)
		Realized net gain (loss) on investments			91			(504	)
		Unrealized appreciation (depreciation)			672			(92	)


			Net increase (decrease) in net assets resulting from operations		710			(640	)

	Capital share transactions (Note 5)				628			(544	)

		Total increase (decrease)			1,338			(1,184	)
NET ASSETS
	Beginning of period				4,465			5,649

	End of period			$	5,803		$	4,465

		Undistributed net investment income (loss)		$	(53	)	$	-

FINANCIAL HIGHLIGHTS

TAX-MANAGED EQUITY FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03			For the fiscal year ended March 31,						For the period from 6-30-00⁽¹⁾ to 3-31-01
			For the six months ended 9-30-03			2003			2002			For the period from 6-30-00⁽¹⁾ to 3-31-01

Net asset value,
	beginning of period	$	5.73		$	6.43		$	7.19		$	10.00

Income (loss) from
	investment operations:
	Net investment loss		(0.06	)		(0.03	)		(0.08	)		(0.00	)
	Net realized and unrealized gain (loss) on investments		0.94			(0.67	)		(0.68	)		(2.81	)

Total from investment operations			0.88			(0.70	)		(0.76	)		(2.81	)

Less distributions from:
	Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)
	Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)

Net asset value,
	end of period	$	6.61		$	5.73		$	6.43		$	7.19

Total return⁽²⁾			15.36	%		-10.89	%		-10.57	%		-28.10	%
Net assets, end of period
	(in millions)		$5			$4			$4			$4
Ratio of expenses to average
	net assets including voluntary
	expense waiver		2.25	%⁽³⁾		1.50	%		1.62	%		1.27	%⁽³⁾
Ratio of net investment loss to
	average net assets including
	voluntary expense waiver		-1.77	%⁽³⁾		-0.67	%		-0.92	%		-0.09	%⁽³⁾
Ratio of expenses to average
	net assets excluding voluntary expense waiver		2.90	%⁽³⁾		2.15	%		2.17	%		1.80	%⁽³⁾
Ratio of net investment loss to
	average net assets excluding voluntary expense waiver		-2.42	%⁽³⁾		-1.32	%		-1.46	%		-0.62	%⁽³⁾
Portfolio turnover rate			54.51	%		145.24	%		95.60	%		73.46	%

(1)Commencement of operations of the class.
(2)Total return calculated without taking into account the sales load deducted on an initial purchase.
(3)Annualized.

FINANCIAL HIGHLIGHTS

TAX-MANAGED EQUITY FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03			For the fiscal year ended March 31,						For the period from 7-13-00⁽¹⁾ to 3-31-01
			For the six months ended 9-30-03			2003			2002			For the period from 7-13-00⁽¹⁾ to 3-31-01

Net asset value,
	beginning of period	$	5.58		$	6.31		$	7.12		$	10.06

Income (loss) from
	investment operations:
	Net investment loss		(0.07	)		(0.11	)		(0.13	)		(0.05	)
	Net realized and unrealized gain (loss) on investments		0.89			(0.62	)		(0.68	)		(2.89	)

Total from investment
	operations		0.82			(0.73	)		(0.81	)		(2.94	)

Less distributions from:
	Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)
	Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)

Net asset value,
	end of period	$	6.40		$	5.58		$	6.31		$	7.12

Total return			14.70	%		-11.57	%		-11.38	%		-29.22	%
Net assets, end of period
	(000 omitted)		$316			$247			$358			$296
Ratio of expenses to average
	net assets including voluntary expense waiver		3.23	%⁽²⁾		2.47	%		2.56	%		2.45	%⁽²⁾
Ratio of net investment loss
	to average net assets including voluntary expense waiver		-2.76	%⁽²⁾		-1.63	%		-1.86	%		-1.74	%⁽²⁾
Ratio of expenses to average
	net assets excluding voluntary expense waiver		3.88	%⁽²⁾		3.12	%		3.42	%		3.48	%⁽²⁾
Ratio of net investment loss
	to average net assets excluding voluntary
	expense waiver		-3.41	%⁽²⁾		-2.28	%		-2.71	%		-2.77	%⁽²⁾
Portfolio turnover rate			54.51	%		145.24	%		95.60	%		73.46	%

(1)Commencement of operations of the class.
(2)Annualized.

FINANCIAL HIGHLIGHTS

TAX-MANAGED EQUITY FUND
Class C Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

			For the six months ended 9-30-03			For the fiscal year ended March 31,						For the period from 7-6-00⁽¹⁾ to 3-31-01
			For the six months ended 9-30-03			2003			2002			For the period from 7-6-00⁽¹⁾ to 3-31-01

Net asset value,
	beginning of period	$	5.57		$	6.32		$	7.13		$	10.01

Income (loss) from
	investment operations:
	Net investment loss		(0.05	)		(0.12	)		(0.19	)		(0.06	)
	Net realized and unrealized gain (loss) on investments		0.87			(0.63	)		(0.62	)		(2.82	)


Total from investment operations			0.82			(0.75	)		(0.81	)		(2.88	)

Less distributions from:
	Net investment income		(0.00	)		(0.00	)		(0.00	)		(0.00	)
	Capital gains		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Total distributions			(0.00	)		(0.00	)		(0.00	)		(0.00	)

Net asset value,
	end of period	$	6.39		$	5.57		$	6.32		$	7.13

Total return			14.72	%		-11.87	%		-11.36	%		-28.77	%
Net assets, end of period
	(000 omitted)		$918			$685			$865			$2
Ratio of expenses to average
	net assets including voluntary expense waiver		3.39	%⁽²⁾		2.64	%		2.76	%		2.35	%⁽²⁾
Ratio of net investment loss to
	average net assets including voluntary expense waiver		-2.92	%⁽²⁾		-1.81	%		-2.07	%		-1.52	%⁽²⁾
Ratio of expenses to average
	net assets excluding voluntary expense waiver		4.04	%⁽²⁾		3.29	%		3.69	%		3.34	%⁽²⁾
Ratio of net investment loss to
	average net assets excluding voluntary expense waiver		-3.57	%⁽²⁾		-2.46	%		-2.99	%		-2.50	%⁽²⁾
Portfolio turnover rate			54.51	%		145.24	%		95.60	%		73.46	%

(1)Commencement of operations of the class.
(2)Annualized.

NOTES TO FINANCIAL STATEMENTS

September 30, 2003

Note 1 - Significant Accounting Policies

Ivy Funds, Inc. (formerly W&R Funds, Inc.) (see Note 9) (the "Corporation") is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Corporation issues twelve series of capital shares; each series represents ownership of a separate mutual fund. The assets belonging to each Fund are held separately by the custodian. The capital shares of each Fund represent a pro rata beneficial interest in the principal, net income and realized and unrealized capital gains or losses of its respective investments and other assets. The following is a summary of significant accounting policies consistently followed by the Corporation in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America.

A. Security valuation - Each stock and convertible bond is valued at the latest sale price thereof on each business day of the fiscal period as reported by the principal securities exchange on which the issue is traded or, if no sale is reported for a stock, the average of the latest bid and asked prices. Bonds, other than convertible bonds, are valued using a pricing system provided by a pricing service or dealer in bonds. Convertible bonds are valued using this pricing system only on days when there is no sale reported. Stocks which are traded over-the-counter are priced using the Nasdaq Stock Market, which provides information on bid and asked prices quoted by major dealers in such stocks. Gold bullion is valued at the last settlement price for current delivery as calculated by the Commodity Exchange, Inc. as of the close of that exchange. Restricted securities and securities for which quotations are not readily available are valued as determined in good faith in accordance with procedures established by and under the general supervision of the Corporation's Board of Directors. Short-term debt securities are valued at amortized cost, which approximates market value. Short-term debt securities denominated in foreign currencies are valued at amortized cost in that currency.

B. Security transactions and related investment income - Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Securities gains and losses are calculated on the identified cost basis. Premium and discount on the purchase of bonds are amortized for both financial and tax reporting purposes over the remaining lives of the bonds. Dividend income is recorded on the ex-dividend date except that certain dividends from foreign securities are recorded as soon as the Fund is informed of the ex-dividend date. Interest income is recorded on the accrual basis. See Note 3 - Investment Securities Transactions.

C. Foreign currency translations - All assets and liabilities denominated in foreign currencies are translated into United States dollars daily. Purchases and sales of investment securities and accruals of income and expenses are translated at the rate of exchange prevailing on the date of the transaction. For assets and liabilities other than investments in securities, net realized and unrealized gains and losses from foreign currency translation arise from changes in currency exchange rates. The Corporation combines fluctuations from currency exchange rates and fluctuations in market value when computing net realized and unrealized gain or loss from investments.

D. Forward foreign currency exchange contracts - A forward foreign currency exchange contract (Forward Contract) is an obligation to purchase or sell a specific currency at a future date at a fixed price. Forward Contracts are "marked-to-market" daily at the applicable translation rates and the resulting unrealized gains or losses are reflected in the Corporation's financial statements. Gains or losses are realized by the Corporation at the time the forward contract is extinguished. Contracts may be extinguished either by entry into a closing transaction or by delivery of the currency. Risks may arise from the possibility that the other party will not complete the obligations of the contract and from unanticipated movements in the value of the foreign currency relative to the United States dollar. The Corporation uses forward contracts to attempt to reduce the overall risk of its investments.

E. Federal income taxes - It is the Corporation's policy to distribute all of its taxable income and capital gains to its shareholders and otherwise qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. In addition, the Corporation intends to pay distributions as required to avoid imposition of excise tax. Accordingly, provision has not been made for Federal income taxes. See Note 4 - Federal Income Tax Matters.

F. Dividends and distributions - Dividends and distributions to shareholders are recorded by each Fund on the business day following the applicable record date. Net investment income dividends and capital gains distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are due to differing treatments for items such as deferral of wash sales and post-October losses, foreign currency transactions, net operating losses and expiring capital loss carryovers.

G. Repurchase agreements - Repurchase agreements are collateralized by the value of the resold securities which, during the entire period of the agreement, remains at least equal to the value of the loan, including accrued interest thereon. The collateral for the repurchase agreement is held by the Corporation's custodian bank.

H. Change in Accounting Principle - Effective April 1, 2001, the Corporation adopted the new provision in the AICPA Audit and Accounting Guide for Investment Companies, as revised, that requires mandatory amortization of all premiums and discounts on debt securities. The cumulative effect of this required change had no impact on the total net assets of any fund, but for Municipal Bond Fund resulted in a $15,473 increase to the cost of securities held and a corresponding increase to accumulated undistributed net investment income. The effect of this change during the period was to increase net investment income and decrease unrealized appreciation by $1,754. The Statement of Changes in Net Assets and Financial Highlights for prior periods have not been restated to reflect this change in presentation.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

NOTE 2 - Investment Management And Payments To Affiliated Persons

Waddell & Reed Ivy Investment Company ("WRIICO"), a wholly owned subsidiary of Waddell & Reed Financial, Inc. ("WDR"), serves as the Corporation's investment manager. WRIICO provides advice and supervises investments for which services it is paid a fee. Prior to June 30, 2003, Waddell & Reed Investment Management Company (WRIMCO), a wholly owned subsidiary of Waddell & Reed, Inc. (W&R), served as the investment manager. The fee is payable by each Fund at the following annual rates:

Fund		Net Assets Breakpoints	Annual Rate

Ivy Asset		Up to $1 Billion	..700%
	Strategy Fund	Over $1 Billion up to $2 Billion	..650%
		Over $2 Billion up to $3 Billion	..600%
		Over $3 Billion	..550%

Ivy Core Equity Fund		Up to $1 Billion	..700%
		Over $1 Billion up to $2 Billion	..650%
		Over $2 Billion up to $3 Billion	..600%
		Over $3 Billion	..550%

Ivy High		Up to $500 Million	..625%
	Income Fund	Over $500 Million up to $1 Billion	..600%
		Over $1 Billion up to $1.5 Billion	..550%
		Over $1.5 Billion	..500%

Ivy International		Up to $1 Billion	..850%
	Growth Fund	Over $1 Billion up to $2 Billion	..830%
		Over $2 Billion up to $3 Billion	..800%
		Over $3 Billion	..760%

Ivy Large Cap Growth		Up to $1 Billion	..700%
	Fund	Over $1 Billion up to $2 Billion	..650%
		Over $2 Billion up to $3 Billion	..600%
		Over $3 Billion	..550%

Ivy Limited-Term		Up to $500 Million	..500%
	Bond Fund	Over $500 Million up to $1 Billion	..450%
		Over $1 Billion up to $1.5 Billion	..400%
		Over $1.5 Billion	..350%

Ivy Mid Cap Growth		Up to $1 Billion	..850%
	Fund	Over $1 Billion up to $2 Billion	..830%
		Over $2 Billion up to $3 Billion	..800%
		Over $3 Billion	..760%

Ivy Money Market
	Fund	All levels	..400%

Ivy Municipal Bond		Up to $500 Million	..525%
	Fund	Over $500 Million up to $1 Billion	..500%
		Over $1 Billion up to $1.5 Billion	..450%
		Over $1.5 Billion	..400%

Ivy Science and		Up to $1 Billion	..850%
	Technology Fund	Over $1 Billion up to $2 Billion	..830%
		Over $2 Billion up to $3 Billion	..800%
		Over $3 Billion	..760%

Ivy Small Cap Growth		Up to $1 Billion	..850%
	Fund	Over $1 Billion up to $2 Billion	..830%
		Over $2 Billion up to $3 Billion	..800%
		Over $3 Billion	..760%

Ivy Tax-Managed		Up to $1 Billion	..650%
	Equity Fund	Over $1 Billion up to $2 Billion	..600%
		Over $2 Billion up to $3 Billion	..550%
		Over $3 Billion	..500%

The fee is accrued and paid daily. However, WRIICO has agreed to waive a Fund's management fee on any day that the Fund's net assets are less than $25 million, subject to WRIICO's right to change or modify this waiver. During the period ended September 30, 2003, WRIICO voluntarily waived its fee as shown in the following table:

Mid Cap Growth Fund	$	29,961
Money Market Fund		45,905
Tax-Managed Equity Fund		17,321

The Corporation has reimbursed WRIMCO for certain expenses, including additional Fund-related security costs incurred by WRIMCO as a result of the September 11, 2001 terrorist activities. The amount reimbursed represented the Corporation's share of incremental security-related costs including the cost of using private transportation for WRIMCO's personnel in lieu of commercial transportation, certain security-related personnel and facilities costs. At September 30, 2003, additional security costs amounted to $21,883, which is included in other expenses.

The Corporation has an Accounting Services Agreement with Waddell & Reed Services Company ("WRSCO"), an indirect subsidiary of WDR. Under the agreement, WRSCO acts as the agent in providing bookkeeping and accounting services and assistance to the Corporation, including maintenance of Fund records, pricing of Fund shares, preparation of prospectuses for existing shareholders, preparation of proxy statements and certain shareholder reports. Prior to July 1, 2003, for these services, each of the Funds paid WRSCO a monthly fee of one-twelfth of the annual fee shown in the following table.


Average Net Asset Level (in millions)					Annual Fee Rate for Each Level

From	$	0 to	$	10		$	0
From	$	10 to	$	25		$	11,000
From	$	25 to	$	50		$	22,000
From	$	50 to	$	100		$	33,000
From	$	100 to	$	200		$	44,000
From	$	200 to	$	350		$	55,000
From	$	350 to	$	550		$	66,000
From	$	550 to	$	750		$	77,000
From	$	750 to	$	1,000		$	93,500
	$	1,000 and Over				$	110,000

After July 1, 2003, for these services, each of the Funds pays WRSCO a monthly fee of one-twelfth of the annual fee shown in the following table.


Accounting Services Fee
	Average Net Asset Level (in millions)					Annual Fee Rate for Each Level

	From	$	0 to	$	10		$	0
	From	$	10 to	$	25		$	11,500
	From	$	25 to	$	50		$	23,100
	From	$	50 to	$	100		$	35,500
	From	$	100 to	$	200		$	48,400
	From	$	200 to	$	350		$	63,200
	From	$	350 to	$	550		$	82,500
	From	$	550 to	$	750		$	96,300
	From	$	750 to	$	1,000		$	121,600
		$	1,000 and Over				$	148,500

In addition, for each class of shares in excess of one, each Fund pays the Agent a monthly per-class fee equal to 2.5% of the monthly base fee.

Each Fund also pays monthly a fee at the annual rate of 0.01% or one basis point for the first $1 billion of net assets with no fee charged for net assets in excess of $1 billion. This fee may be voluntarily waived until Fund net assets are at least $10 million. For the period ended September 30, 2003, WRSCO voluntarily waived $141 for Ivy Tax-Managed Equity Fund.

Under the Shareholder Servicing Agreement between the Corporation and WRSCO, with respect to Class A, Class B and Class C shares, for each shareholder account that was in existence at any time during the prior month: Asset Strategy Fund pays a monthly fee of $1.5792; High Income Fund, Limited-Term Bond Fund and Municipal Bond Fund each pay a monthly fee of $1.6958; and Core Equity Fund, International Growth Fund, Large Cap Growth Fund, Mid Cap Growth Fund, Science and Technology Fund, Small Cap Growth Fund and Tax-Managed Equity Fund each pay a monthly fee of $1.5042. Money Market Fund pays a monthly fee of $1.75 for each shareholder account that was in existence at any time during the prior month plus, for Class A shareholder accounts, $0.75 for each shareholder check processed in the prior month. For Class Y shares, each Fund pays a monthly fee equal to one-twelfth of 0.15 of 1% of the average daily net assets of the class for the preceding month. Each Fund also reimburses WRSCO for certain out-of-pocket costs for all classes.

As principal underwriter for the Corporation's shares, Ivy Funds Distributor, Inc. ("IFDI"), a wholly-owned subsidiary of WRIICO, receives sales commissions (which are not an expense of the Corporation) for Class A shares. A contingent deferred sales charge ("CDSC") may be assessed against a shareholder's redemption amount of Class B, Class C or certain Class A shares and is paid to IFDI. During the period ended September 30, 2003, IFDI received the following amounts in sales commissions and deferred sales charges:

	Sales						CDSC
	Commissions				Class A		Class B		Class C

Asset Strategy Fund		$	46,259	$	- -	$	23,817	$	1,613
Core Equity Fund			34,504		- -		16,352		5,926
High Income Fund			27,744		- -		3,750		1,810
International Growth Fund			11,911		- -		6,511		986
Large Cap Growth Fund			63,205		- -		6,395		496
Limited-Term Bond Fund			108,726		- -		28,256		2,685
Mid Cap Growth Fund			46,286		- -		9,349		820
Money Market Fund			- -		- -		8,933		15,568
Municipal Bond Fund			6,845		- -		3,519		1,196
Science and Technology Fund			45,626		- -		12,342		2,825
Small Cap Growth Fund			66,474		- -		21,939		7,004
Tax-Managed Equity Fund			5,741		- -		530		6

With respect to Class A, Class B and Class C shares, IFDI pays sales commissions and all expenses in connection with the sale of the Corporation's shares, except for registration fees and related expenses. During the period ended September 30, 2003, the following amounts were paid:

Asset Strategy Fund	$	69,268
Core Equity Fund		62,355
High Income Fund		37,307
International Growth Fund		18,963
Large Cap Growth Fund		51,018
Limited-Term Bond Fund		99,158
Mid Cap Growth Fund		39,865
Money Market Fund		5,001
Municipal Bond Fund		9,573
Science and Technology Fund		58,821
Small Cap Growth Fund		114,706
Tax-Managed Equity Fund		5,020

Under a Distribution and Service Plan for Class A shares adopted by the Corporation pursuant to Rule 12b-1 under the Investment Company Act of 1940, each Fund may pay a distribution and/or service fee to IFDI in an amount not to exceed 0.25% of the Fund's average annual net assets. The fee is to be paid to compensate IFDI for amounts it expends in connection with the distribution of the Class A shares and/or provision of personal services to Fund shareholders and/or maintenance of shareholder accounts.

Under the Distribution and Service Plan adopted by the Corporation for Class B shares and Class C shares, respectively, each Fund may pay IFDI a service fee not to exceed 0.25% and a distribution fee not to exceed 0.75% of a Fund's average annual net assets attributable to that class to compensate IFDI for its services in connection with the distribution of shares of that class and/or the service and/or maintenance of shareholder accounts of that class. The Class B Plan and the Class C Plan each permit IFDI to receive compensation, through the distribution fee and service fee, respectively, for its distribution activities for that class, which are similar to the distribution activities described with respect to the Class A Plan, and for its activities in providing personal services to shareholders of that class and/or maintaining shareholder accounts of that class, which are similar to the corresponding activities for which it is entitled to compensation under the Class A Plan. In the current environment of low interest rates, IFDI has voluntarily agreed to reimburse sufficient distribution and service fees to any class of Ivy Money Market Fund in order to insure the yield of that class remains at or above 0.05%.

Under the Class Y Plan, each Fund may pay IFDI a fee of up to 0.25%, on an annual basis, of the average daily net assets of the Fund's Class Y shares to compensate IFDI for, either directly or through third parties, distributing the Class Y shares of that Fund, providing personal service to Class Y shareholders and/or maintaining Class Y shareholder accounts.

The Corporation paid Directors' fees of $66,426, which are included in other expenses.

Prior to June 16, 2003, Waddell & Reed, Inc. ("W&R") served as underwriter for the Corporation's shares. On June 16, 2003, W&R assigned the underwriting agreement to IFDI. Prior to June 30, 2003, Waddell & Reed Investment Management Company ("WRIMCO") served as investment manager to the Corporation. On June 30, 2003, WRIMCO assigned the investment management agreement to WRIICO.

NOTE 3 - Investment Securities Transactions

Investment securities transactions for the period ended September 30, 2003 are summarized as follows:

		Asset Strategy Fund		Core Equity Fund		High Income Fund

Purchases of investment securities, excluding short-term and United States Government securities	$43,740,555		$	44,810,477	$	28,651,645
Purchases of bullion		2,077,334		- -		- -
Purchases of United States Government securities		42,588,613		- -		- -
Purchases of short-term securities		93,885,258		413,311,938		149,904,917
Purchases of options		697,950		88,352		- -
Proceeds from maturities and sales of investment securities, excluding short-term and United States Government securities		35,344,787		55,734,179		17,042,042
Proceeds from sales of bullion		871,958		- -		- -
Proceeds from maturities and sales of United States Government securities		71,874,734		- -		- -
Proceeds from maturities and sales of short-term securities		75,534,173		420,588,000		151,818,692
Proceeds from options		447,523		183,445		- -

	International Growth Fund			Large Cap Growth Fund		Limited- Term Bond Fund

Purchases of investment securities, excluding short- term and United States Government securities	$	71,746,670	$	25,808,891	$ 4,255,139
Purchases of United States Government securities		- -		- -		9,909,938
Purchases of short-term securities		335,269,780		329,538,000		29,676,211
Purchases of options		- -		- -		- -
Proceeds from maturities and sales of investment securities, excluding short-term and United States Government securities		70,395,096		12,088,454		3,571,517
Proceeds from maturities and sales of United States Government securities		- -		- -		12,546,294
Proceeds from maturities and sales of short-term securities		356,235,463		334,368,000		34,814,000
Proceeds from options		- -		- -		- -

		Mid Cap Growth Fund	Municipal Bond Fund		Science and Technology Fund

Purchases of investment securities, excluding short- term and United States Government securities	$	10,454,747	$ 533,250	$	79,382,819
Purchases of United States Government securities		- -	- -		- -
Purchases of short-term securities		383,396,919	6,286,987		274,776,559
Purchases of options		410,348	- -		4,096,250
Proceeds from maturities and sales of investment securities, excluding short-term and United States Government securities		4,380,265	2,986,505		54,452,099
Proceeds from maturities and sales of United States Government securities		- -	- -		- -
Proceeds from maturities and sales of short-term securities		382,646,000	6,110,000		297,851,125
Proceeds from options		339,679	- -		1,554,464

		Small Cap Growth Fund	Tax-Managed Equity Fund

Purchases of investment securities, excluding short- term and United States Government securities	$	141,867,644	$ 3,619,141
Purchases of United States Government securities		- -	- -
Purchases of short-term securities		956,281,193	19,231,000
Purchases of options		- -	50,408
Proceeds from maturities and sales of investment securities, excluding short-term and United States Government securities		110,693,970	2,741,575
Proceeds from maturities and sales of United States Government securities		- -	- -
Proceeds from maturities and sales of short-term securities		974,600,979	19,580,000
Proceeds from options		- -	15,630

For Federal income tax purposes, cost of investments owned at September 30, 2003 and the related unrealized appreciation (depreciation) were as follows:

		Cost	Appreciation	Depreciation	Aggregate Appreciation (Depreciation)

Asset Strategy Fund	$	65,081,158	$ 2,955,821	$ 879,156	$ 2,076,665
Core Equity Fund		219,710,434	43,297,153	1,512,054	41,785,099
High Income Fund		41,083,053	2,617,997	319,751	2,298,246
International Growth Fund		60,676,116	7,432,792	1,098,778	6,334,014
Large Cap Growth Fund		36,836,576	4,506,659	279,066	4,227,593
Limited-Term Bond Fund		70,245,149	1,839,946	18,170	1,821,776
Mid Cap Growth Fund		51,372,501	8,217,844	1,485,597	6,732,247
Money Market Fund		24,249,327	- -	- -	- -
Municipal Bond Fund		24,722,010	1,145,907	66,158	1,079,749
Science and Technology Fund		122,632,396	13,684,178	14,493,326	(809,148)
Small Cap Growth Fund		356,450,303	85,569,748	21,338,806	64,230,942
Tax-Managed Equity Fund		5,132,644	819,479	153,754	665,725

NOTE 4 - Federal Income Tax Matters

For Federal income tax purposes, the Fund's distributed and undistributed earnings and profit for the fiscal year ended March 31, 2003 and the related capital loss carryover and post-October activity were as follows:

	Asset Strategy Fund		Core Equity Fund	High Income Fund

Net ordinary income	$324,654	$	-	$1,623,792
Distributed ordinary income	374,528		- -	1,619,183
Undistributed ordinary income *	25,243		- -	35,113

Realized long-term capital gains	- -		- -	- -
Distributed long-term capital gains	- -		- -	- -
Undistributed long-term capital gains	- -		- -	-

Capital loss carryover	- -		32,352,928	1,182,962

Post-October losses deferred	- -		4,137,423	55,426

	International Growth Fund	Large Cap Growth Fund	Limited- Term Bond Fund

Net ordinary income	$ -	$ -	$1,555,211
Distributed ordinary income	- -	- -	1,544,291
Undistributed ordinary income *	- -	- -	24,714

Realized long-term capital gains	- -	- -	- -
Distributed long-term capital gains	- -	- -	- -
Undistributed long-term capital gains	- -	- -	-

Capital loss carryover	19,460,037	4,727,341	456,813

Post-October losses deferred	5,229,066	835,240	- -

	Mid Cap Growth Fund	Money Market Fund	Municipal Bond Fund

Net ordinary income	$ -	$138,944	$838,698
Distributed ordinary income	3,132	139,244	840,097
Undistributed ordinary income *	- -	1,179	9,887

Realized long-term capital gains	- -	- -	- -
Distributed long-term capital gains	- -	- -	- -
Undistributed long-term capital gains	- -	- -	-

Capital loss carryover	3,437,031	- -	75,199

Post-October losses deferred	244,321	- -	- -

		Science and Technology Fund		Small Cap Growth Fund		Tax- Managed Equity Fund

Net ordinary income	$	-	$	-	$	-
Distributed ordinary income		- -		- -		- -
Undistributed ordinary income		- -		- -		- -

Realized long-term capital gains		- -		- -		- -
Distributed long-term capital gains		- -		- -		- -
Undistributed long-term capital gains		- -		- -		-

Capital loss carryover		15,864,785		24,660,890		1,005,096

Post-October losses deferred		- -		16,385,158		173,190

*All undistributed ordinary income has been distributed as of September 30, 2003.

Internal Revenue Code regulations permit each Fund to defer into its next fiscal year net capital losses or net long-term capital losses incurred between each November 1 and the end of its fiscal year ("post-October losses").

Capital loss carryovers are available to offset future realized capital gain net income for Federal income tax purposes. The following shows the totals by year in which the capital loss carryovers will expire if not utilized.

		Asset Strategy Fund		Core Equity Fund		High Income Fund		International Growth Fund

March 31, 2007	$		$ -			$ 501,692	$ -
March 31, 2008		- -		- -		472,930		- -
March 31, 2009		- -		- -		2,581,600		- -
March 31, 2010		2,567,657		28,691,576		1,271,702		31,762,625
March 31, 2011				32,352,928		1,182,962		19,460,037

Total carryover	$	2,567,657		$61,044,504	$6,010,886			$51,222,662

		Large Cap Growth Fund	Limited- Term Bond Fund	Mid Cap Growth Fund	Municipal Bond Fund

March 31, 2005	$	- -	$ 72,428	$ -	$ -
March 31, 2006		- -	64,500	- -	- -
March 31, 2009		- -	159,953	- -	519,289
March 31, 2010		7,188,151	- -	2,752,716	230,753
March 31, 2011		4,727,341	456,813	3,437,031	75,199

Total carryover	$	11,915,492	$753,694	$6,189,747	$825,241

		Science and Technology Fund	Small Cap Growth Fund	Tax-Managed Equity Fund

March 31, 2009	$	-	$ -	$ 59,107
March 31, 2010		21,421,176	60,539,358	1,914,377
March 31, 2011		15,864,785	24,660,890	1,005,096

Total carryover	$	37,285,961	$85,200,248	$2,978,580

NOTE 5 - Multiclass Operations

Each Fund within the Corporation (other than Money Market Fund which offers only Class A, Class B and Class C shares) currently offers four classes of shares, Class A, Class B, Class C and Class Y, each of which have equal rights as to assets and voting privileges. A comprehensive discussion of the terms under which shares of each class are offered is contained in the Prospectus and the Statement of Additional Information for the Corporation.

Income, non-class specific expenses, and realized and unrealized gains and losses are allocated daily to each class of shares based on the value of their relative net assets as of the beginning of each day adjusted for the prior day's capital share activity.

For funds in existence on March 24, 2000, Class B shares were combined with Class C shares and were redesignated Class C shares on that date.

Transactions in capital stock for the six months ended September 30, 2003 are summarized below. Amounts are in thousands.

		Asset Strategy Fund				Core Equity Fund			High Income Fund

Shares issued from sale of shares:
	Class A		544			8,042			601
	Class B		206			2,252			92
	Class C		325			1,274			495
	Class Y		60			162			1,049
Shares issued from reinvestment of dividends:
	Class A		2			- -			28
	Class B		- -	*		- -			6
	Class C		2			- -			72
	Class Y		- -	*		- -			39
Shares redeemed:
	Class A		(282	)		(4,064	)		(238	)
	Class B		(76	)		(1,213	)		(25	)
	Class C		(848	)		(3,934	)		(384	)
	Class Y		(73	)		(333	)		(313	)

Increase (decrease) in outstanding capital shares			(140	)		2,186			1,422


Value issued from sale of shares:
	Class A	$	6,258		$	62,308		$	5,041
	Class B		2,377			17,064			773
	Class C		3,744			20,140			4,133
	Class Y		699			1,421			8,708
Value issued from reinvestment of dividends:
	Class A		26			- -			237
	Class B		- -	*		- -			52
	Class C		21			- -			602
	Class Y		4			- -			332
Value redeemed:
	Class A		(3,280	)		(30,421	)		(1,984	)
	Class B		(873	)		(8,832	)		(212	)
	Class C		(9,777	)		(28,131	)		(3,217	)
	Class Y		(859	)		(2,583	)		(2,630	)

Increase (decrease) in outstanding capital		$	(1,660	)	$	30,966		$	11,835


*Not shown due to rounding.

		International Growth Fund				Large Cap Growth Fund			Limited- Term Bond Fund

Shares issued from sale of shares:
	Class A		4,444			1,339			1,625
	Class B		580			156			222
	Class C		464			365			384
	Class Y		10,335			42			316
Shares issued from
	reinvestment of dividends:
	Class A		- -			- -			55
	Class B		- -			- -			5
	Class C		- -			- -			26
	Class Y		- -			- -			3
Shares redeemed:
	Class A		(3,996		)	(647		)	(1,663		)
	Class B		(325		)	(27		)	(182		)
	Class C		(1,015		)	(72		)	(888		)
	Class Y		(11,149		)	(43		)	(377		)

Increase (decrease) in outstanding capital shares			(662		)	1,113			(474		)


Value issued from sale of shares:
	Class A		$	40,102		$10,913			$17,002
	Class B		5,672			1,223			2,319
	Class C		12,558			2,932			4,014
	Class Y		96,300			345			3,311
Value issued from reinvestment
	of dividends:
	Class A		- -			- -			579
	Class B		- -			- -			55
	Class C		- -			- -			274
	Class Y		- -			- -			26
Value redeemed:
	Class A		(33,858		)	(5,079		)	(17,369		)
	Class B		(2,742		)	(209		)	(1,904		)
	Class C		(8,351		)	(576		)	(9,285		)
	Class Y		(102,006		)	(342		)	(3,957		)

Increase (decrease) in outstanding capital			$	7,675		$	9,207		$	(4,935	)

		Mid Cap Growth Fund				Money Market Fund		Municipal Bond Fund

Shares issued from sale of shares:
	Class A		5,369			12,747			242
	Class B		2,541			1,274			27
	Class C		702			8,141			40
	Class Y		328			N/A			- -
Shares issued from reinvestment of dividends:
	Class A		- -			51			4
	Class B		- -			- -	*		1
	Class C		- -			1			25
	Class Y		- -			N/A			- -	*
Shares redeemed:
	Class A		(2,543	)		(8,056	)		(188	)
	Class B		(1,353	)		(1,057	)		(10	)
	Class C		(271	)		(10,119	)		(332	)
	Class Y		(286	)		N/A			- -

Increase (decrease) in outstanding capital shares			4,487			2,982			(191	)


Value issued from sale of shares:
	Class A	$	67,253		$12,747			$2,733
	Class B		27,228			1,274			301
	Class C		9,344			8,141			448
	Class Y		3,374			N/A			- -
Value issued from reinvestment of dividends:
	Class A		- -			51			44
	Class B		- -			- -	*		6
	Class C		- -			1			282
	Class Y		- -			N/A			- -	*
Value redeemed:
	Class A		(19,971	)		(8,056	)		(2,114	)
	Class B		(10,339	)		(1,057	)		(110	)
	Class C		(2,082	)		(10,119	)		(3,692	)
	Class Y		(2,240	)		N/A			- -

Increase (decrease) in outstanding capital		$	72,567		$2,982			$	(2,102	)


*Not shown due to rounding.

		Science and Technology Fund				Small Cap Growth Fund		Tax-Managed Equity Fund

Shares issued from sale of shares:
	Class A		978			3,692		172
	Class B		548			224		7
	Class C		400			1,543		30
	Class Y		172			3,356		- -
Shares issued from reinvestment of dividends:
	Class A		- -			- -		- -
	Class B		- -			- -		- -
	Class C		- -			- -		- -
	Class Y		- -			- -		- -
Shares redeemed:
	Class A		(467		)	(2,711	)	(97	)
	Class B		(286		)	(72	)	(2	)
	Class C		(591		)	(3,190	)	(9	)
	Class Y		(33		)	(1,720	)	- -

Increase in outstanding capital shares			721			1,122		101


Value issued from sale of shares:
	Class A		$	24,902		$34,781		$1,089
	Class B		12,037			2,032		46
	Class C		39,098			14,145		185
	Class Y		4,700			33,750		- -
Value issued from reinvestment of dividends:
	Class A		- -			- -		- -
	Class B		- -			- -		- -
	Class C		- -			- -		- -
	Class Y		- -			- -		- -
Value redeemed:
	Class A		(7,384		)	(26,729	)	(623	)
	Class B		(4,399		)	(658	)	(12	)
	Class C		(9,004		)	(29,068	)	(57	)
	Class Y		(542		)	(17,644	)	- -

Increase in outstanding capital			$	59,408		$10,609		$ 628

Transactions in capital stock for the fiscal year ended March 31, 2003 are summarized below. Amounts are in thousands.

		Asset Strategy Fund			Core Equity Fund			High Income Fund

Shares issued from sale of shares:
	Class A	739			1,940			690
	Class B	119			219			124
	Class C	1,901			2,655			726
	Class Y	62			69			558
Shares issued from reinvestment of dividends:
	Class A	8			- -			30
	Class B	1			- -			8
	Class C	23			- -			147
	Class Y	1			- -			3
Shares redeemed:
	Class A	(266		)	(1,040		)	(167		)
	Class B	(46		)	(208		)	(32		)
	Class C	(1,539		)	(12,363		)	(625		)
	Class Y	(15		)	(90		)	(118		)

Increase (decrease) in outstanding capital shares		988			(8,818		)	1,344


Value issued from sale of shares:
	Class A	$	8,291		$13,695			$ 5,535
	Class B	1,333			1,592			988
	Class C	21,310			18,932			5,820
	Class Y	698			520			4,466
Value issued from reinvestment of dividends:
	Class A	85			- -			236
	Class B	12			- -			66
	Class C	262			- -			1,174
	Class Y	11			- -			25
Value redeemed:
	Class A	(2,965		)	(7,407		)	(1,332		)
	Class B	(514		)	(1,466		)	(265		)
	Class C	(17,189		)	(87,355		)	(5,007		)
	Class Y	(174		)	(699		)	(938		)

Increase (decrease) in outstanding capital		$	11,160		$	(62,188	)	$	10,768

		International Growth Fund				Large Cap Growth Fund			Limited- Term Bond Fund

Shares issued from sale of shares:
	Class A			4,496			2,011			6,921
	Class B			69			88			473
	Class C			616			280			1,711
	Class Y			17,611			49			369
Shares issued from reinvestment of dividends:
	Class A			- -			- -			68
	Class B			- -			- -			8
	Class C			- -			- -			63
	Class Y			- -			- -			4
Shares redeemed:
	Class A			(4,449	)		(1,270	)		(3,784	)
	Class B			(38	)		(84	)		(96	)
	Class C			(2,056	)		(384	)		(866	)
	Class Y			(17,027	)		(10	)		(256	)

Increase (decrease) in outstanding capital shares				(778	)		680			4,615


Value issued from sale of shares:
	Class A		$	38,377		$14,751			$71,487
	Class B			574			659			4,892
	Class C			5,307			2,093			17,693
	Class Y			153,398			372			3,831
Value issued from reinvestment of dividends:
	Class A			- -			- -			702
	Class B			- -			- -			81
	Class C			- -			- -			654
	Class Y			- -			- -			43
Value redeemed:
	Class A			(38,451	)		(9,456	)		(39,049	)
	Class B			(316	)		(625	)		(995	)
	Class C			(17,451	)		(2,890	)		(8,953	)
	Class Y			(149,023	)		(75	)		(2,662	)

Increase (decrease) in outstanding capital			$	(7,585	)	$ 4,829			$47,724

		Mid Cap Growth Fund			Money Market Fund			Municipal Bond Fund

Shares issued from sale of shares:
	Class A	1,079			23,939			340
	Class B	72			1,022			36
	Class C	190			12,225			313
	Class Y	50			N/A			- -		*
Shares issued from reinvestment of dividends:
	Class A	- -		*	114			7
	Class B	- -			1			1
	Class C	- -			16			60
	Class Y	- -		*	N/A			- -		*
Shares redeemed:
	Class A	(681		)	(18,823		)	(304		)
	Class B	(60		)	(413		)	- -		*
	Class C	(204		)	(9,788		)	(443		)
	Class Y	(49		)	N/A			- -

Increase in outstanding capital shares		397			8,293			10


Value issued from sale of shares:
	Class A	$	7,414		$	23,939		$	3,751
	Class B	508			1,022			390
	Class C	1,373			12,225			3,442
	Class Y	355			N/A			2
Value issued from reinvestment of dividends:
	Class A	2			114			73
	Class B	- -			1			8
	Class C	- -			16			658
	Class Y	1			N/A			- -		*
Value redeemed:
	Class A	(4,745		)	(18,823		)	(3,368		)
	Class B	(421		)	(413		)	(3		)
	Class C	(1,422		)	(9,788		)	(4,834		)
	Class Y	(362		)	N/A			- -

Increase in outstanding capital		$	2,703		$	8,293		$	119


*Not shown due to rounding.

		Science and Technology Fund				Small Cap Growth Fund			Tax-Managed Equity Fund

Shares issued from sale of shares:
	Class A		800			3,910			156
	Class B		99			317			3
	Class C		569			2,885			31
	Class Y		151			10,907			- -
Shares issued from reinvestment of dividends:
	Class A		- -			- -			- -
	Class B		- -			- -			- -
	Class C		- -			- -			- -
	Class Y		- -			- -			- -
Shares redeemed:
	Class A		(456		)	(2,969		)	(228	)
	Class B		(53		)	(216		)	(16	)
	Class C		(1,707		)	(10,689		)	(45	)
	Class Y		(94		)	(10,368		)	- -

Decrease in outstanding capital shares			(691		)	(6,223		)	(99	)


Value issued from sale of shares:
	Class A		$	11,616		$	32,860		$ 913
	Class B		1,447			2,669			19
	Class C		8,405			24,235			177
	Class Y		2,271			103,179			- -
Value issued from reinvestment of dividends:
	Class A		- -			- -			- -
	Class B		- -			- -			- -
	Class C		- -			- -			- -
	Class Y		- -			- -			- -
Value redeemed:
	Class A		(6,696		)	(24,603		)	(1,308	)
	Class B		(755		)	(1,712		)	(90	)
	Class C		(25,069		)	(88,011		)	(255	)
	Class Y		(1,416		)	(100,287		)	- -

Decrease in outstanding capital			$	(10,197	)	$	(51,670	)	$ (544	)

NOTE 6 - Options

Options purchased by a Fund are accounted for in the same manner as marketable portfolio securities. The cost of portfolio securities acquired through the exercise of call options is increased by the premium paid to purchase the call. The proceeds from securities sold through the exercise of put options are decreased by the premium paid to purchase the put.

When the Fund writes (sells) an option, an amount equal to the premium received by the Fund is recorded as a liability. The amount of the liability is subsequently adjusted to reflect the current market value of the option written. The current market value of an option is the last sales price on the principal exchange on which the option is traded or, in the absence of transactions, the mean between the bid and asked prices or at a value supplied by a broker-dealer. When an option expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the call option was sold) and the liability related to such option is extinguished. When a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has realized a gain or loss. For each Fund, when a written put is exercised, the cost basis of the securities purchased by the Fund is reduced by the amount of the premium received.

For Asset Strategy Fund, transactions in call options written were as follows:

	Number of Contracts			Premiums Received

Outstanding at March 31, 2003		- -		$	-
Options written		1,117		211,129
Options terminated in closing purchase transactions		(1,117	)	(211,129		)
Options exercised		- -		- -
Options expired		- -		- -

Outstanding at September 30, 2003		- -		$	- -

For Core Equity Fund, transactions in call options written were as follows:

	Number of Contracts			Premiums Received

Outstanding at March 31, 2003		- -		$	-
Options written		911		183,445
Options terminated in closing purchase transactions		(911	)	(183,445		)
Options exercised		- -		- -
Options expired

Outstanding at September 30, 2003		- -		$	-

For Mid Cap Growth Fund, transactions in call options written were as follows:

	Number of Contracts			Premiums Received

Outstanding at March 31, 2003		146		$	19,757
Options written		1,636		284,415
Options terminated in closing purchase transactions		(930	)	(163,905		)
Options exercised		- -		- -
Options expired		(296	)	(58,396		)

Outstanding at September 30, 2003		556		$	81,871

For Science and Technology Fund, transactions in call options written were as follows:

	Number of Contracts			Premiums Received

Outstanding at March 31, 2003		2,418		$	592,080
Options written		1,761		2,044,426
Options terminated in closing purchase transactions		(3,047	)	(2,464,626		)
Options exercised		(1,132	)	(171,880		)
Options expired		- -		- -

Outstanding at September 30, 2003		- -		$	-

For Science and Technology Fund, transactions in put options written were as follows:

	Number of Contracts			Premiums Received

Outstanding at March 31, 2003		728		$	77,168
Options written		- -		- -
Options terminated in closing purchase transactions		- -		- -
Options exercised		- -		- -
Options expired		(728	)	(77,168		)

Outstanding at September 30, 2003		- -		$	-

For Tax-Managed Equity Fund, transactions in call options written were as follows:

	Number of Contracts			Premiums Received

Outstanding at March 31, 2003		279		$	26,765
Options written		84		11,077
Options terminated in closing purchase transactions		(255	)	(27,443		)
Options exercised		(69	)	(6,352		)
Options expired		(39	)	(4,047		)

Outstanding at September 30, 2003		- -		$	-

For Tax-Managed Equity Fund, transactions in put options written were as follows:

	Number of Contracts		Premiums Received

Outstanding at March 31, 2003		- -		$	-
Options written		37		4,554
Options terminated in closing purchase transactions		(37	)		(4,554	)
Options exercised		- -		- -
Options expired		- -		- -

Outstanding at September 30, 2003		- -		$	-

NOTE 7 - Futures

The Corporation may engage in buying and selling interest rate futures contracts, but only Debt Futures and Municipal Bond Index Futures. Upon entering into a futures contract, the Corporation is required to deposit, in a segregated account, an amount of cash or United States Treasury Bills equal to a varying specified percentage of the contract amount. This amount is known as the initial margin. Subsequent payments ("variation margins") are made or received by the Corporation each day, dependent on the daily fluctuations in the value of the underlying debt security or index. These changes in the variation margins are recorded by the Corporation as unrealized gains or losses. Upon the closing of the contracts, the cumulative net change in the variation margin is recorded as realized gain or loss. The Corporation uses futures to attempt to reduce the overall risk of its investments.

NOTE 8 - Acquisitions of Ivy Global Fund, Ivy Global Science and Technology Fund, Ivy International Small Companies Fund, Ivy US Blue Chip Fund and Ivy US Emerging Growth Fund

On June 16, 2003, Ivy Core Equity Fund acquired all the net assets of Ivy US Blue Chip Fund pursuant to a plan of reorganization approved by the shareholders of Ivy US Blue Chip Fund on June 10, 2003. The acquisition was accomplished by a tax-free exchange of 4,455,649 shares of Ivy Core Equity Fund (valued at $33,237,149) for the 4,314,763 shares of Ivy US Blue Chip Fund outstanding on June 16, 2003. Ivy US Blue Chip Fund had net assets of $33,237,149, including $3,400,840 of net unrealized appreciation in value of investments and $17,432,572 of accumulated net realized losses on investments, which were combined with those of Ivy Core Equity Fund. The aggregate net assets of Ivy Core Equity Fund and Ivy US Blue Chip Fund immediately before the acquisition were $243,451,378 and $33,237,149, respectively. The aggregate net assets of Ivy Core Equity Fund and Ivy US Blue Chip Fund immediately following the acquisition were $276,688,527 and $0, respectively. Transactions in capital stock related to the exchange were as follows:

		Shares Exchanged	Value

Class A shares		3,275,705	$	24,600,545
Class B shares		1,048,118	7,640,781
Class C shares		63,248	462,972
Class Y shares		68,578	532,851

	Total	4,455,649	$	33,237,149

On June 16, 2003, Ivy International Growth Fund acquired all the net assets of Ivy Global Fund pursuant to a plan of reorganization approved by the shareholders of Ivy Global Fund on June 10, 2003. The acquisition was accomplished by a tax-free exchange of 471,708 shares of Ivy International Growth Fund (valued at $4,084,583) for the 555,824 shares of Ivy Global Fund outstanding on June 16, 2003. Ivy Global Fund had net assets of $4,084,583, including $187,112 of net unrealized appreciation in value of investments and $3,440,525 of accumulated net realized losses on investments, which were combined with those of Ivy International Growth Fund. The aggregate net assets of Ivy International Growth Fund and Ivy Global Fund immediately before the acquisition were $75,960,531 and $4,084,583, respectively. The aggregate net assets of Ivy International Growth Fund and Ivy Global Fund immediately following the acquisition were $80,045,114 and $0, respectively. Transactions in capital stock related to the exchange we re as follows:

		Shares Exchanged		Value

Class A shares			342,101	$	2,983,128
Class B shares			116,826	987,184
Class C shares			6,869	58,525
Class Y shares			5,912	55,746

	Total		471,708	$4,084,583

On June 16, 2003, Ivy International Growth Fund acquired all the net assets of Ivy International Small Companies Fund pursuant to a plan of reorganization approved by the shareholders of Ivy International Small Companies Fund on June 12, 2003. The acquisition was accomplished by a tax-free exchange of 586,893 shares of Ivy International Growth Fund (valued at $5,072,637) for the 746,180 shares of Ivy International Small Companies Fund outstanding on June 16, 2003. Ivy International Small Companies Fund had net assets of $5,072,637, including $410,170 of net unrealized appreciation in value of investments and $11,716,558 of accumulated net realized losses on investments, which were combined with those of Ivy International Growth Fund. The aggregate net assets of Ivy International Growth Fund and Ivy International Small Companies Fund immediately before the acquisition were $75,960,531 and $5,072,637, respectively. The aggregate net assets of Ivy International Growth Fund and Ivy International Small Companies Fund immediately following the acquisition were $81,033,168 and $0, respectively. Transactions in capital stock related to the exchange were as follows:

		Shares Exchanged		Value

Class A shares			305,439	$	2,663,419
Class B shares			155,157	1,311,077
Class C shares			102,023	869,233
Class Y shares			24,274	228,908

	Total		586,893	$	5,072,637

On June 16, 2003, Ivy Science and Technology Fund acquired all the net assets of Ivy Global Science and Technology Fund pursuant to a plan of reorganization approved by the shareholders of Ivy Global Science and Technology Fund on June 10, 2003. The acquisition was accomplished by a tax-free exchange of 594,910 shares of Ivy Science and Technology Fund (valued at $9,297,885) for the 1,192,759 shares of Ivy Global Science and Technology Fund outstanding on June 16, 2003. Ivy Global Science and Technology Fund had net assets of $9,297,885, including $1,112,396 of net unrealized appreciation in value of investments and $48,964,829 of accumulated net realized losses on investments, which were combined with those of Ivy Science and Technology Fund. The aggregate net assets of Ivy Science and Technology Fund and Ivy Global Science and Technology Fund immediately before the acquisition were $102,611,502 and $9,297,885, respectively. The aggregate net assets of Ivy Science and Technology Fund and Ivy Global Science and Technology Fund immediately following the acquisition were $111,909,387 and $0, respectively. Transactions in capital stock related to the exchange were as follows:

		Shares Exchanged		Value

Class A shares			286,756	$	4,547,954
Class B shares			245,326		3,770,658
Class C shares			55,466		859,714
Class Y shares			7,362		119,559

	Total		594,910	$	9,297,885

On June 16, 2003, Ivy Mid Cap Growth Fund acquired all the net assets of Ivy US Emerging Growth Fund pursuant to a plan of reorganization approved by the shareholders of Ivy US Emerging Growth Fund on June 10, 2003. The acquisition was accomplished by a tax-free exchange of 3,520,272 shares of Ivy Mid Cap Growth Fund (valued at $27,334,380) for the 1,980,747 shares of Ivy US Emerging Growth Fund outstanding on June 16, 2003. Ivy US Emerging Growth Fund had net assets of $27,334,380, including $3,678,066 of net unrealized appreciation in value of investments and $41,518,711 of accumulated net realized losses on investments, which were combined with those of Ivy Mid Cap Growth Fund. The aggregate net assets of Ivy Mid Cap Growth Fund and Ivy US Emerging Growth Fund immediately before the acquisition were $26,567,950 and $27,334,380, respectively. The aggregate net assets of Ivy Mid Cap Growth Fund and Ivy US Emerging Growth Fund immediately following the acquisition were $53,902,330 and $0, respectively. Trans actions in capital stock related to the exchange were as follows:

		Shares Exchanged		Value

Class A shares			2,113,671	$	16,592,322
Class B shares			1,207,893	9,204,146
Class C shares			159,523	1,229,919
Class Y shares			39,185	307,993

	Total		3,520,272	$	27,334,380

NOTE 9 - Name Change

On June 30, 2003, the Corporation changed its name from W&R Funds, Inc. to Ivy Funds, Inc.

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders,
Ivy Funds, Inc.:

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Asset Strategy Fund, Core Equity Fund, High Income Fund, International Growth Fund, Large Cap Growth Fund, Limited-Term Bond Fund, Mid Cap Growth Fund, Money Market Fund, Municipal Bond Fund, Science and Technology Fund, Small Cap Growth Fund and Tax-Managed Equity Fund (collectively the "Funds") comprising Ivy Funds, Inc. (formerly W&R Funds, Inc.) as of September 30, 2003 and the related statements of operations for the six-month period then ended, the statements of changes in net assets for the six-month period then ended and the fiscal year ended March 31, 2003, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2003, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of each of the respective Funds comprising Ivy Funds, Inc., as of September 30, 2003, the results of their operations for the six-month period then ended, the changes in their net assets for the six-month period then ended and the fiscal year ended March 31, 2003, and their financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Kansas City, Missouri
November 7, 2003

SHAREHOLDER MEETING RESULTS

On June 3, 2003, a special shareholder meeting (the "Meeting") was held at the offices of Waddell & Reed Financial, Inc., 6300 Lamar Avenue, Overland Park, Kansas, 66202. The meeting was adjourned until June 10, 2003, and was held on that date for the following purposes (and with the following results):

Proposal 1: For shareholders of each of the Funds, to elect the Board of Directors.


	Affirmative	Withheld
Jarold W. Boettcher	55,649,712.211	1,996,157.920
James D. Gressett	55,399,267.880	2,246,602.251
Joseph Harroz, Jr.	55,609,642.160	2,036,227.971
Henry J. Herrmann	55,412,718.680	2,233,151.451
Glendon E. Johnson, Jr.	55,394,963.938	2,250,906.193
Eleanor B. Schwartz	55,609,647.139	2,036,222.992
Michael G. Smith	55,157,856.961	2,488,013.170
Edward M. Tighe	55,653,973.138	1,991,896.993
Keith A. Tucker	55,386,325.932	2,259,544.199

Proposal 2: For shareholders of each of the Funds, to amend each Fund's fundamental investment policy regarding lending.


	For	Against	Abstain
Asset Strategy Fund	1,950,951.648	202,253.791	212,534.671
Core Equity Fund	11,771,947.168	861,534.531	1,439,690.544
High Income Fund	1,875,245.269	63,583.380	175,813.407
International Growth Fund	2,381,269.472	156,402.310	223,848.473
Large Cap Growth Fund	1,683,628.536	186,138.404	115,551.045
Limited-Term Bond Fund	2,912,643.777	154,591.689	355,408.984
Mid Cap Growth Fund	1,263,302.252	57,091.720	77,088.450
Money Market Fund	8,257,581.729	907,907.370	610,239.460
Municipal Bond Fund	1,077,902.307	65,862.469	86,964.933
Science and Technology Fund	1,869,075.079	223,095.015	206,024.212
Small Cap Growth Fund	12,855,334.879	892,530.628	1,447,429.500
Tax-Managed Equity Fund	414,812.766	14,780.690	25,834.546

Proposal 3: For shareholders of each of the Funds, to amend each Fund's fundamental investment policy regarding borrowing.


	For	Against	Abstain
Asset Strategy Fund	1,970,895.727	184,875.630	209,968.753
Core Equity Fund	11,719,532.143	887,698.125	1,465,941.975
High Income Fund	1,874,975.754	59,960.263	179,706.039
International Growth Fund	2,365,757.840	175,552.123	220,210.292
Large Cap Growth Fund	1,673,728.973	192,215.827	119,373.185
Limited-Term Bond Fund	2,901,714.556	162,710.463	358,219.431
Mid Cap Growth Fund	1,267,549.727	53,400.653	76,532.042
Money Market Fund	8,257,248.399	908,240.700	610,239.460
Municipal Bond Fund	1,087,547.446	65,034.428	78,147.835
Science and Technology Fund	1,859,962.536	230,910.549	207,321.221
Small Cap Growth Fund	12,778,740.700	964,301.915	1,452,252.392
Tax-Managed Equity Fund	414,812.766	14,063.377	26,551.859

Proposal 4: For shareholders of Asset Strategy Fund, to amend the Fund's fundamental investment restriction regarding investments in commodities to allow the Fund to invest in precious metals as a regular investment strategy of the Fund.


For		Against		Abstain
1,924,999.604		185,661.391		255,079.115

Proposal 5: For shareholders of each of the Funds, to amend the Corporation's Articles of Incorporation to change the par value of the Corporation's shares to $0.001.


For		Against		Abstain
49,993,797.360		3,468,667.648		5,554,895.977

Proposal 6: For shareholders of each of the Funds, to ratify the selection of Deloitte & Touche, LLP as the Corporation's independent public accountants for the fiscal year ending March 31, 2004.


For		Against		Abstain
51,819,832.780		1,424,007.909		4,402,029.442

To all traditional IRA Planholders:

As required by law, income tax will automatically be withheld from any distribution or withdrawal from a traditional IRA unless you make a written election not to have taxes withheld. The election may be made on the distribution/withdrawal form provided by us which can be obtained from your financial advisor or by submitting Internal Revenue Service Form W- 4P. Once made, an election can be revoked by providing written notice to us. If you elect not to have tax withheld you may be required to make payments of estimated tax. Penalties may be imposed by the IRS if withholding and estimated tax payments are not adequate.

This page for your notes and calculations.

Ivy Funds

Asset Strategy Fund

Cash Reserves Fund

Core Equity Fund

Cundill Global Value Fund

Dividend Income Fund

European Opportunities Fund

Global Natural Resources Fund

High Income Fund

International Fund

International Growth Fund

International Value Fund

Large Cap Growth Fund

Limited-Term Bond Fund

Mid Cap Growth Fund

Money Market Fund

Municipal Bond Fund

Pacific Opportunities Fund

Science and Technology Fund

Small Cap Growth Fund

Tax-Managed Equity Fund

FOR MORE INFORMATION:

Contact your financial advisor,

or contact:

IVY CLIENT SERVICES

6300 Lamar Avenue

P.O. Box 29217

Shawnee Mission, KS 66201-9217

(800) 777-6472

Our INTERNET address is:

http://www.ivyfunds.com

For more complete information regarding any of the mutual funds in Ivy Funds, Inc., including charges and expenses, please obtain the Corporation's prospectus by calling or writing to the number or address listed above. Please read the prospectus carefully before investing.

ITEM 2. CODE OF ETHICS.

Not applicable.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Not applicable.

ITEM 5. [RESERVED]

ITEM 6. [RESERVED]

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 8. [RESERVED]

ITEM 9. CONTROLS AND PROCEDURES.

(a) Based on an evaluation of the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) as of a date within 90 days of the filing date of this report, the Registrant's Principal Executive Officer and Principal Financial Officer have concluded that such controls and procedures are effective.

(b) There were no significant changes in the Registrant's internal controls over financial reporting that occurred over the Registrant's last fiscal half-year that has affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.

ITEM 10. EXHIBITS.

(b)(1) A separate certification for each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002.

Attached hereto as Exhibit 99.CERT.

(b)(2) A separate certification for each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002.

Attached hereto as Exhibit 99.906CERT.

SIGNATURES

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

Ivy Funds, Inc.
(Registrant)

By: /s/Kristen A. Richards
	------------------------------
	Kristen A. Richards, Vice President and Secretary

Date: December 5, 2003

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

By: /s/Henry J. Herrmann
	------------------------------
	Henry J. Herrmann, President and Principal Executive Officer

Date: December 5, 2003

By: /s/Theodore W. Howard
	------------------------------
	Theodore W. Howard, Treasurer and Principal Financial Officer

Date: December 5, 2003

Ivy Funds N-CSRSCertified semi-annual shareholder report (management investment company)

Ivy Funds

President's Letter

SHAREHOLDER SUMMARY OF ASSET STRATEGY FUND

GOAL

Asset Strategy Fund

Strategy

Founded

Scheduled Dividend Frequency

Performance Summary - Class C Shares

Per Share Data

SHAREHOLDER SUMMARY OF ASSET STRATEGY FUND

Average Annual Total Return(A)

Average Annual Total Return(A)

SHAREHOLDER SUMMARY OF ASSET STRATEGY FUND

Portfolio Highlights

THE INVESTMENTS OF ASSET STRATEGY FUND

BULLION - 11.28%

Aircraft - 1.03%

Beverages - 1.18%

Business Equipment and Services - 2.01%

Chemicals - Petroleum and Inorganic - 0.70%

Construction Materials - 0.39%

Cosmetics and Toiletries - 0.98%

Electrical Equipment - 0.46%

Food and Related - 0.21%

Gold and Precious Metals - 2.32%

Health Care - Drugs - 2.07%

Health Care - General - 1.11%

Hospital Supply and Management - 0.95%

Household - General Products - 2.14%

Motor Vehicles - 4.77%

Multiple Industry - 3.14%

Petroleum - Canada - 0.41%

Petroleum - Domestic - 2.96%

Petroleum - International - 1.27%

Petroleum - Services - 1.47%

Photographic Equipment - 1.92%

Real Estate Investment Trusts - 1.35%

Retail - Food Stores - 0.94%

Retail - General Merchandise - 2.73%

Retail - Specialty Stores - 0.45%

Security and Commodity Brokers - 1.35%

Utilities - Electric - 0.97%

Utilities - Telephone - 2.21%

TOTAL COMMON STOCKS - 41.49%

Banks - 0.89%

Beverages - 0.95%

Broadcasting - 0.67%

Food and Related - 1.18%

Forest and Paper Products - 0.78%

Furniture and Furnishings - 0.16%

Leisure Time Industry - 0.31%

Multiple Industry - 0.39%

Petroleum - International - 0.80%

Petroleum - Services - 0.25%

Railroad - 0.31%

Trucking and Shipping - 0.46%

Utilities - Electric - 0.41%

Utilities - Telephone - 0.58%

TOTAL CORPORATE DEBT SECURITIES - 8.14%

Germany - 4.35%

Mexico - 0.45%

Supranational - 0.80%

TOTAL OTHER GOVERNMENT SECURITIES - 5.60%

TOTAL UNITED STATES GOVERNMENT SECURITIES - 4.91%

Commercial Paper

Banks - 3.80%

Finance Companies - 1.61%

Health Care - Drugs - 3.79%

Total Commercial Paper - 9.20%

United States Government Security - 21.22%

TOTAL SHORT-TERM SECURITIES - 30.42%

TOTAL INVESTMENTS - 101.67%

LIABILITIES, NET OF CASH AND OTHER ASSETS - (1.67%)

NET ASSETS - 100.00%

Notes to Schedule of Investments

STATEMENT OF ASSETS AND LIABILITIES

ASSET STRATEGY FUNDSeptember 30, 2003(In Thousands, Except for Per Share Amounts)

STATEMENT OF OPERATIONS

Average Annual Total Return^(A)

Average Annual Total Return^(A)

ASSET STRATEGY FUND
September 30, 2003
(In Thousands, Except for Per Share Amounts)

ASSET STRATEGY FUND
For the Six Months Ended September 30, 2003
(In Thousands)

ASSET STRATEGY FUND
(In Thousands)

ASSET STRATEGY FUND
Class A Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

ASSET STRATEGY FUND
Class B Shares
For a Share of Capital Stock Outstanding Throughout Each Period:

ASSET STRATEGY FUND
Class C Shares(1)
For a Share of Capital Stock Outstanding Throughout Each Period:

ASSET STRATEGY FUND
Class Y Shares
For a Share of Capital Stock Outstanding Throughout Each Period: