UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-06557
STI CLASSIC FUNDS
(Exact name of registrant as specified in charter)
--------
2 Oliver Street
Boston, MA 02109
(Address of principal executive offices) (Zip code)
Trusco Capital Management, Inc.
50 Hurt Plaza; Suite 1400
Atlanta, Georgia 30303
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-428-6970
DATE OF FISCAL YEAR END: MAY 31, 2004
DATE OF REPORTING PERIOD: MAY 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC OMITTED]
ANNUAL
...........................................
FINANCIAL REPORT
...........................................
STI CLASSIC EQUITY FUNDS
...........................................
A Family of Mutual Funds
...........................................
May 31, 2004
[STI Classic LOGO OMITTED]
BACKED BY TRADITION.
STRENGTHENED BY EXPERIENCE.(SM)
Dear Valued STI Classic Funds Shareholder:
For investors, the year ending May 31, 2004 was decidedly brighter and a welcome
change from the post-bubble weakness that began in early 2000. The economy grew
at an above-average pace, helped significantly by lower interest rates and tax
rebates. This in turn lifted corporate profits and equity prices, both domestic
and international. However, bond yields bottomed during the year in response to
the risks associated with a strengthening economy. I will expand on these
developments in the following paragraphs and share Trusco Capital's outlook.
Generally, after a period of vulnerability, the character of the economic
expansion and the markets appear poised to shift to a more "traditional,"
sustained, cyclical nature, which historically has been favorable for the equity
markets.
Economic growth during the past year was very strong, statistically speaking.
Available data showed inflation-adjusted growth of nearly 5% on a year-over-year
basis, matching the best periods of the record expansion of the 1990s. However,
much of the growth could be traced directly to the massive and simultaneous
stimulus from federal tax cuts and rebates and low mortgage and bond yields.
While this stimulus was an essential element to increased spending, the
expansion was not yet self-sustaining, and so was viewed as vulnerable to
setbacks. Sales growth improved as did corporate profits, but the rebound in
earnings was due in large part to corporate self-help measures that were
manifested in improved productivity. A resumption of job growth was seen as the
litmus test to sustainability. This potential vulnerability, combined with low
core inflation, kept Federal Reserve interest rate policy accommodative during
the year, with the key Fed Funds rate holding at 1%; the lowest level since
1958.
The S&P 500 Index rose 18.33% on a total return basis in the year ended May 31,
2004, with the bulk of the rise concentrated in the third and fourth quarters of
last year. Mid-cap and small-cap stocks were even stronger, with the S&P Mid Cap
400 Index posting a 26.73% gain and the Russell 2000 Index rising 30.29%. On the
international front, the MSCI EAFE Index gained 32.66%. Cyclically sensitive
sectors led the market as did those closely linked to commodities. The
Materials, Energy, Industrials, and Information Technology sectors each rose
more than 20% during the twelve months ended May 31, 2004, while Consumer
Discretionary and Finance stocks also posted above market returns. The above
average gains in the commodity price sensitive sectors helped the Value style
generally outperform the Growth style for the period. A final theme that
dominated market performance during the year was a sharp rebound in stocks with
no earnings and/or weak financial quality. This frustrated investors investing
in higher quality companies with strong balance sheets and visible earnings
growth.
In the fixed-income markets bond yields moved higher over the course of the
twelve months, though intra-year volatility was significant. The yield on the
10-year Treasury note fell to as low as 3.11% in June 2003 and rose as high as
4.86% just before the close of the fiscal year in May. However, the steady
Federal Reserve policy kept short-term rates constant causing the yield
differential between long and short maturity bonds to rise to near record
levels. The Lehman U.S. Aggregate Bond Index fell a modest 0.44% during the year
ending May 31, 2004, though longer-term bonds such as the 10-year Treasury note
were considerably weaker falling over 5%. The stronger economy helped
credit-sensitive sectors such as High Yield perform well, while Treasury
securities generally underperformed.
As we look ahead the economic expansion looks both solid and sustainable, and is
capable of supporting further gains in corporate profits and in equity prices. A
key reason for this was the resumption of job growth in 2004, following an
uncomfortably long drought which kept interest rate policy stimulative. However
the pace of growth is likely to slow as the stimulative benefits of tax rebates
and mortgage financing subside. Inflation pressures will increase from their
historically low level, putting pressure on the Federal Reserve to begin raising
interest rates following a protracted period of stimulus. Bond yields are likely
to rise further as the Federal Reserve starts to apply monetary restraint, but
the pace of rate hikes is expected to be gradual as long as inflation pressures
do not escalate sharply. We remain cyclically overweight in stocks within our
asset allocation mix, but recognize volatility could increase once the Fed
begins raising interest rates.
Adherence to investment disciplines and greater price sensitivity on stocks will
be much more important in the years ahead, as I have mentioned before,
particularly if there is a meaningful rise in interest rates. The cornerstone of
our investment philosophy is diversification and execution of the disciplined
investment process by experienced investment professionals. I encourage you to
read through the remainder of the report, as it contains comments from our fund
managers on specific investment sectors and styles. Trusco has excellent fund
managers and I am sure you will find their insights valuable.
In closing, I want to take this opportunity to thank you for investing in the
STI Classic Funds. We value the relationship we have with you and look forward
to expanding it in the coming year through continued investment excellence and a
broader array of investment alternatives.
Sincerely,
/s/Douglas S. Phillips
Douglas S. Phillips, CFA
Chief Investment Officer
1
<page>
STI CLASSIC AGGRESSIVE GROWTH STOCK FUND
----------------------------------------
The STI Classic Aggressive Growth Stock Fund ("the Fund") was added to the STI
Classic lineup February 23, 2004. The Fund invests primarily in common stocks of
U.S. companies of all sizes that exhibit strong growth characteristics. Using a
"bottom-up" investment approach, we identify companies with favorable prospects
for future revenue, earnings, and/or cash flow growth. Growth "drivers" are
identified for each company and become critical to the ongoing evaluation
process. Industry growth dynamics, competitive positioning, pricing flexibility,
and diversified product offerings in conjunction with stock price appreciation
potential help establish the foundation for the weighting of each security
within the Fund and the resulting exposure to specific industries and economic
sectors.
Since the initiation of the Fund, macro economic and geopolitical issues have
dominated the investing environment. After a brief rally late in February, the
Fund experienced successive negative returns in March and April, rebounding
during the last weeks of May. From inception through May 31, 2004, the Fund's T
Shares returned 0% compared to -0.83% for the Russell 3000(R) Growth Index.
Stock selection in Consumer Discretionary and Technology sectors led the Fund's
relative outperformance. Consumer-driven and internet-related fund holdings were
top aggregate contributors. Firming ad spending (increasingly via online
vehicles), a rebounding economy and unflagging spending patterns were primary
drivers to strength in the Consumer Discretionary sector. Supported by
exceptional earnings reports, Fund Technology holdings produced broad-based
gains (since Fund inception) significantly ahead of benchmark issues. However,
weakness in Health Care and Telecommunications issues kept the Fund's
performance in check. Health care declined late in the period lacking event
catalysts, and the Fund's only telecommunications holding posted a negative
return due to uncertainty pending a FCC ruling on spectrum expansion for its
wireless data strategy.
Better-than-expected growth across many sectors has yet to translate into
comparable stock price performance. Looking forward, we are encouraged as
corporate America exhibits signs of improving health with strong operating
margins, large cash balances and a renewed propensity to hire. Our task remains
the same: focus on fundamental research to uncover unique growth companies
exhibiting rewarding investment potential for the Fund.
/s/Nancy Zevenbergen
Nancy Zevenbergen, CFA
Co-Portfolio Manager
/s/Brooke de Boutray
Brooke de Boutray, CFA
Co-Portfolio Manager
/s/Leslie Tubbs
Leslie Tubbs, CFA
Co-Portfolio Manager
2
<page>
T SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIOD ENDED MAY 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
0.00%
- --------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Aggressive
Growth Stock Fund, Russell 3000
T Shares Growth Index
2/29/04 10,000 10,000
5/04 9,950 9,870
A SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIOD ENDED MAY 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
-0.10% Without Load
- --------------
-3.85% With Load
- --------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Aggressive
Growth Stock Fund, Russell 3000
A Shares Growth Index
2/29/04 9,625 10,000
5/04 9,567 9,870
L SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIOD ENDED MAY 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
-0.30% Without CDSC
- --------------
-2.29 With CDSC
- --------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Aggressive
Growth Stock Fund, Russell 3000
L Shares Growth Index
2/29/04 10,000 10,000
5/04 9,722 9,870
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
(1) Commenced operations on February 23, 2004.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
3
<page>
STI CLASSIC BALANCED FUND
-------------------------
The STI Classic Balanced Fund ("the Fund") seeks to provide both current income
and growth in capital by investing in a blend of investment grade bonds and high
quality large/midcap common stocks. Typically the Fund's asset allocation to
bonds is 40% to 50% of the total portfolio, while common stocks are the balance,
or 50% to 60% of assets. In this manner, the goal is to provide shareholders
with an attractive and somewhat less volatile total investment return over
longer time periods. Total return is defined as the current income from interest
or dividends as well as changes in the value of assets held in the portfolio.
Bond returns and stock returns continued to move in opposite directions over the
past 12 months. For bond investors, grown comfortable with both a 20-year long
bull market as well as a 31/2 year shorter bull market 2000-2003, the
realization that bonds can have negative returns must be somewhat sobering. For
the 12 months ending May 31, 2004, the Lehman U.S. Government/Credit Index had a
total return of -1.51%. Stocks, on the other hand, rewarded shareholders nicely,
with a total return of +18.33% on the S&P 500 Index of large cap stocks.
What caused bonds to lag and stocks to soar? A number of different factors came
together resulting in this de-linkage. First, stocks performed very poorly
beginning in March 2000, a 3-year bear market of unusual length. During this
period, bond returns were superb, as falling interest rates and a flight to more
stable investments pushed bond prices up. Stock returns reached extreme low
levels compared to bonds last year--thus setting the stage for a significant
"snapback", much like a tightly coiled spring. Second, bond yields probably got
too low last summer, relative to underlying fundamentals, just as stock prices
got way too high in 2000. Many of the elements conducive to falling interest
rates/rising bond prices began to reverse last year. Specifically, economic
growth began to accelerate, commodity prices rose, the U.S. dollar began to
weaken, and bond investors began to anticipate tighter monetary policy from the
Federal Reserve Bank. At the same time, rising business and consumer confidence
and accelerating earnings growth were welcome tonics for stock prices. In short,
stocks and bonds do not necessarily move together, but sometimes diverge based
on major trends in the global economy.
Most of the damage in interest rates was done in intermediate and longer
maturity bonds. For example, the 5-year Treasury bond yield went from 2.28% to
3.80% over the 12-months ending May 31, 2003, 10-years rose from 3.35% to 4.65%,
and long dated 30-year bonds from 4.36% to 5.35%. Reflecting a continued policy
of "watchful waiting" by the Fed, 3-month T-bills were about unchanged at 1.1%
over this period. Thus, virtually all bond indices had tiny positive to slightly
negative returns; the only exception was non-investment grade "high-yield"
bonds, where the Lehman U.S. Corporate High Yield Bond Index returned +11.90%.
The Fund had a very disappointing result last year. The Fund's T Shares returned
+4.24%, which trailed its blended benchmark's return of +10.13%. This blended
benchmark consists of 60% S&P 500 Index for stocks and 40% Lehman U.S.
Government/Credit Index for bonds. Needless to say we do not like reporting
these results, particularly since they come on the heels of several years in
which the Fund did exceptionally well. Most of the shortfall was due to
positioning in equities; the Fund focuses on primarily high quality large
companies with strong earnings growth. Last year, weak companies with no
earnings and smaller, leveraged capitalizations dramatically outperformed. Over
the longer term, we believe the Fund's bias to companies with strong financial
positions will produce more consistent positive returns for Fund shareholders.
/s/Robert J. Rhodes
Robert J. Rhodes, CFA
Portfolio Manager
4
<page>
T SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
4.24% 0.22% 1.77% 8.21% 7.68% 116.11%
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE
IN THE VALUE OF A
$10,000 INVESTMENT
STI Classic Lehman
Balanced Fund, 60/40 S&P 500 U.S. Government/
T Shares Hybrid: Index Credit Index
5/31/94 10,000 10,000 10,000 10,000
5/95 10,872 11,675 12,019 11,161
5/96 12,749 13,798 15,437 11,619
5/97 14,872 16,636 19,979 12,536
5/98 18,167 20,449 26,110 13,976
5/99 20,161 23,438 31,601 14,543
5/00 21,173 25,142 34,913 14,818
5/01 21,859 24,800 31,230 16,725
5/02 21,140 23,478 26,904 18,036
5/03 21,111 23,744 24,736 20,662
5/04 22,006 26,149 29,270 20,350
A SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
3.91% -0.11% 1.43% 7.85% 7.31% 108.37% Without Load
- --------------------------------------------------------------------------------
-0.02% -1.39% 0.65% 7.44% 6.91% 100.55% With Load
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE
IN THE VALUE OF A
$10,000 INVESTMENT
STI Classic Lehman
Balanced Fund, 60/40 S&P 500 U.S. Government/
A Shares Hybrid: Index Credit Index
5/31/94 9,625 10,000 10,000 10,000
5/95 10,423 11,675 12,019 11,161
5/96 12,182 13,798 15,437 11,619
5/97 14,164 16,636 19,979 12,536
5/98 17,241 20,449 26,110 13,976
5/99 19,086 23,438 31,601 14,543
5/00 19,975 25,142 34,913 14,818
5/01 20,556 24,800 31,230 16,725
5/02 19,822 23,478 26,904 18,036
5/03 19,715 23,744 24,736 20,662
5/04 20,486 26,149 29,270 20,350
L SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -------------------------------------------------------------------
3.12% -0.83% 0.68% 6.93% 82.28% Without CDSC
- -------------------------------------------------------------------
-1.12% With CDSC
- ----------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE
IN THE VALUE OF A
$10,000 INVESTMENT
STI Classic Lehman
Balanced Fund, 60/40 S&P 500 U.S. Government/
L Shares Hybrid: Index Credit Index
6/30/95 10,000 10,000 10,000 10,000
5/96 11,401 11,617 12,552 10,327
5/97 13,157 14,007 16,245 11,143
5/98 15,900 17,217 21,230 12,422
5/99 17,465 19,735 25,695 12,927
5/00 18,142 21,169 28,387 13,171
5/01 18,525 20,881 25,393 14,866
5/02 17,723 19,768 21,876 16,032
5/03 17,519 19,992 20,112 18,366
5/04 18,066 22,017 23,799 18,089
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
5
<page>
STI CLASSIC CAPITAL APPRECIATION FUND
-------------------------------------
The STI Classic Capital Appreciation Fund ("the Fund") employs a philosophy of
investing in large and midcap companies with positive earnings trends and
reasonable valuations. Earnings trend criteria include a stable or improving
rate of earnings growth, positive growth relative to investor expectations, and
fundamental signs of growth sustainability. Other important elements considered
are above average or rising profitability, revenue growth, and superior earnings
quality. Generally companies in which the Fund invests represent leaders within
their industry segments, as demonstrated by revenue growth, market shares, and
levels of profitability. In terms of portfolio risk control, the Fund is
structured to provide diversification across major industry sectors. Sector
weightings will vary over the economic cycle based on the rise and fall in
relative earnings growth of different industries and companies. Regardless of
the trend of overall corporate profits, the Fund strives to achieve a level of
earnings growth well above its benchmark, the S&P 500 Index. The Fund manager
also employs an active sell discipline to eliminate stocks with deteriorating
earnings profiles, while striving to keep annual portfolio turnover reasonable.
For the 12-month period ending May 31, 2004, the broad equity market represented
by the S&P 500 Index generally advanced. This rally began in early March 2003
with removal of uncertainty about the Iraq Conflict. Fueled by improving
investor confidence, rising corporate profits, and a continued accommodative
monetary policy by the Federal Reserve, the S&P 500 Index advanced approximately
29% from the end of April 2003 to a high reached this January. Since reaching
that high, the market has stalled out and remained in a very narrow price range.
While company earnings reports were exceptionally good in the first quarter of
2004, investors have become more cautious on several fronts. First, geopolitical
concerns on terrorism. Second, a degree of uncertainty related to this year's
Presidential elections. Third, and most importantly, interest rates have risen
from the lows of last summer and there is growing conviction that Fed policy
will soon move away from extreme leniency. Also, inflation has picked up a bit
and energy prices have remained well above "consensus" expectations, draining
away a certain amount of consumer purchasing power. For the entire 12-month
period ending May 31, 2004, the total return including reinvestment of dividends
was +18.33% for the S&P 500 Index. This of course represents a still
satisfactory gain particularly in view of the negative returns during the prior
three years.
The Fund's T Shares achieved a total return of +11.89% over the 12-months ending
May 31, 2004. In the context of our expectations, this result was very
disappointing. The Fund's investment process did not change, nor did our
emphasis on above-average growth and companies of strong financial capacity. So
what happened? In hindsight, the Fund would have done better by turning its
stock selection process upside down. By that we mean, the types of stocks which
had the highest returns were those of the lower financial quality, smaller
capitalizations, negative or low earnings, biggest decliners in the prior three
years, highest price volatility, and those which do not pay dividends. The Fund
focuses on larger, higher quality, proven growth or visibly intact cyclical
growth stocks, a philosophy which produced solid results in the prior three
years, but was out of favor last year.
That said, stock selection could have been better than it was. Our stock picking
was ineffective in four important sectors, Finance, Technology, Consumer
Discretionary, and Energy. These sectors were over 60% of Fund assets. Stock
selection was excellent in Health Care and Industrials, and we correctly had no
exposure to the poorly performing Telecomm and Utilities segments, but these
smaller victories were not enough to offset the shortfall in the big sectors.
The results in Technology and Finance are simple to analyze. Our sector picks
during the 2000-2002 bear market were stable growth, high quality revenue
companies which substantially excelled during the downturn. These stocks tended
to lag when the market took off and interest shifted to more volatile, leveraged
business models.
Other excellent companies lagged in other sectors. In Consumer Discretionary,
BED BATH & BEYOND is a retailing category leader. The company has a high return
on investment, has consistently exceeded Wall Street earnings forecasts, has
grown EPS at an average rate of 30% over the last year, has a superb balance
sheet with zero debt and substantial free cash flow generation--yet the stock
lagged the S&P 500 Index by 29 percentage points over the past year. Similarly,
in Health Care, JOHNSON & JOHNSON reported 15-20% growth every quarter, well
above its long-term trend line of 10-11%, consistently beat estimates and had
good earnings quality, yet underperformed by 14 percentage points. Yes, we are
very cognizant of the distinction between "Good Company" and "Good Stock" but
these kinds of disconnects seem extreme to us and bound to be remedied in the
months to come.
Some significant shifts in Fund sector allocations have occurred over the last
year. The Consumer Discretionary weight has been cut while Consumer Staples has
been boosted. Our bottoms-up work suggested better opportunity in Staples, and
on an overview basis, we believe consumer spending tailwinds (tax cuts, mortgage
cash-outs, etc.) will fade going forward. In the Staples sector we have
purchased AVON PRODUCTS, GILLETTE, KIMBERLY-CLARK, and WALGREEN--all top quality
strong brand franchises with solid growth.
6
<page>
Fund weights in Energy and Health Care have been reduced substantially, again on
the basis of our bottoms-up analysis. In Health Care, we see fewer companies
with strong relative earnings trends, even though as a growth manager it is a
sector we like a lot long-term. Energy stocks are facing tougher comparisons and
we have elected to look for better entry points now that the price of oil has
eased somewhat. Positions in Technology and Industrial stocks have been raised
substantially. At the company level, we see lots of good ideas in these two
areas. At a more macro level, we believe there will be a somewhat typical
handoff from "early-cycle" consumer stocks to more "late cycle" capital spending
related companies. Specifically, capital spending follows profits, and many
companies not only have strong earnings but also extremely cash-rich balance
sheets which will fund capital purchases.
As we look into the year ahead, the economy remains on a solid upward
trajectory. Short-term interest rates will trend higher, as is typical of the
middle stage of an expansion. Earnings growth will moderate, but remain
sufficient to emphasize equity commitments. And earnings quality as well as
balance sheets are the best they have been in a long while--managements are
being prudent.
We believe the Fund is well positioned in the types of growing, leadership
companies which have typically rewarded shareholders well. We thank you for your
participation in the STI Classic Capital Appreciation Fund and will as always do
our utmost to produce excellent results in the coming year.
/s/Robert J. Rhodes
Robert J. Rhodes, CFA
Portfolio Manager
7
<page>
T SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
11.89% -3.60% -1.23% 9.41% 9.57% 197.17%
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic
Capital Appreciation Fund, S&P 500
T Shares Index
5/31/94 10,000 10,000
5/95 10,663 12,019
5/96 13,752 15,437
5/97 17,143 19,979
5/98 22,202 26,110
5/99 26,161 31,601
5/00 28,510 34,913
5/01 27,444 31,230
5/02 24,409 26,904
5/03 21,975 24,736
5/04 24,588 29,270
A SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------------------
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
11.19% -4.24% -1.89% 8.71% 9.15% 185.33% Without Load
- --------------------------------------------------------------------------------
7.07% -5.46% -2.63% 8.29% 8.80% 174.62% With Load
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic
Capital Appreciation Fund, S&P 500
A Shares Index
5/31/94 9,625 10,000
5/95 10,196 12,019
5/96 13,069 15,437
5/97 16,172 19,979
5/98 20,815 26,110
5/99 24,395 31,601
5/00 26,418 34,913
5/01 25,261 31,230
5/02 22,310 26,904
5/03 19,945 24,736
5/04 22,177 29,270
L SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -------------------------------------------------------------------
10.54% -4.70% -2.34% 8.50% 108.29% Without CDSC
- -------------------------------------------------------------------
8.54% With CDSC
- ----------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic
Capital Appreciation Fund, S&P 500
L Shares Index
6/30/95 10,000 10,000
5/96 12,387 12,552
5/97 15,266 16,245
5/98 19,559 21,230
5/99 22,786 25,695
5/00 24,557 28,387
5/01 23,380 25,393
5/02 20,563 21,876
5/03 18,309 20,112
5/04 20,239 23,799
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
8
<page>
This page left intentionally blank.
<page>
STI CLASSIC EMERGING GROWTH STOCK FUND
--------------------------------------
Added to the STI Classic Funds lineup on February 23, 2004, the STI Classic
Emerging Growth Stock Fund (the "Fund") invests primarily in stocks of U.S.
companies exhibiting strong growth characteristics with market capitalizations
generally below $10 billion. In selecting investments for the Fund, we place
heightened emphasis on companies with market capitalizations of $5 billion or
less. Using a "bottom-up" investment approach, we identify companies with
favorable prospects for future revenue, earnings, and/or cash flow growth.
Growth "drivers" are identified for each company and become critical to the
ongoing evaluation process. Industry growth dynamics, competitive positioning,
pricing flexibility, and diversified product offerings in conjunction with stock
price appreciation potential help establish the foundation for the weighting of
each security within the Fund and the resulting exposure to specific industries
and economic sectors.
Macro economic and geopolitical issues have greatly influenced the investing
environment since the initiation of the Fund. Brief advances at Fund onset were
undone by successive negative returns in March and April, but a late May rally
pared further Fund losses. Since inception, the Fund's T Shares returned -4.00%
compared to 0.92% for the Russell Midcap(R) Growth Index.
The Fund's higher exposure to smaller capitalization issues (compared to the
benchmark) in combination with stock selection in Technology and Health Care
sectors drove the majority of Fund underperformance. The Technology sector loss
was predominantly due to three separate stocks: a fabless semiconductor
manufacturer that experienced front-end foundry supply difficulty, a second
semiconductor company (packaging/test services) missed revenue and earnings
expectations due to operating margin erosion, and lastly a computer
technology/device storage company saw increased price competition and lost
market share to a larger competitor. A stock specific issue also weighed on Fund
Health Care performance. A medical device/power source manufacturer trimmed
short-term revenue forecasts due to a temporary halt of shipments to a major
customer. Fund strength was found in Consumer Staples (strong comparable store
growth and unit expansion for premier food retailer) and Telecommunication
(solid usage trends for rural wireless service provider) holdings.
Looking forward, we are encouraged as corporate America exhibits signs of
improving health with strong operating margins, large cash balances and a
renewed propensity to hire. Despite this short period of underperformance, we
remain optimistic the Fund will benefit from the higher revenue and earnings
dynamics of smaller capitalization companies. Our task remains the same: focus
on fundamental research to uncover unique growth companies exhibiting rewarding
investment potential for the Fund.
/s/Nancy Zevenbergen
Nancy Zevenbergen, CFA
Co-Portfolio Manager
/s/Brooke de Boutray
Brooke de Boutray, CFA
Co-Portfolio Manager
/s/Leslie Tubbs
Leslie Tubbs, CFA
Co-Portfolio Manager
10
<page>
T SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIOD ENDED MAY 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
-4.00%
- --------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Emerging Russell
Growth Stock Fund, Midcap
T Shares Growth Index
2/29/04 10,000 10,000
5/04 9,467 9,928
A SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIOD ENDED MAY 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
-4.10% Without Load
- --------------
-7.70% With Load
- --------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Emerging Russell
Growth Stock Fund, Midcap
A Shares Growth Index
2/29/04 9,625 10,000
5/04 9,103 9,928
L SHARES(2)
AVERAGE ANNUAL TOTAL RETURNS
(PERIOD ENDED MAY 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
-4.20% Without CDSC
- --------------
-6.12% With CDSC
- --------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Emerging Russell
Growth Stock Fund, Midcap
L Shares Growth Index
2/29/04 10,000 10,000
5/04 9,258 9,928
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
(1) T Shares and A Shares were offered beginning on February 23, 2004.
(2) L Shares were offered beginning on February 27, 2004. L Shares' performance
for the periods prior to February 27, 2004 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the L Shares. If it had,
performance would have been lower than that shown. The cumulative total
return of the L Shares from its inception date of February 27, 2004 to May
31, 2004 was -5.52%.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
11
<page>
STI CLASSIC GROWTH AND INCOME FUND
----------------------------------
The STI Classic Growth and Income Fund (the "Fund") invests primarily in a
diversified mix of midsized and larger domestic common stocks and listed ADRs of
foreign companies with market capitalizations greater than $1.5 billion. The
Fund is managed in a large capitalization, value-oriented style, competing
against funds with a similar objective categorized under Lipper's "Large Cap
Value Equity" peer group. The Fund's management team utilizes a proprietary
quantitative screening process to identify attractive ideas. The team then
evaluates each potential idea with careful fundamental research, incorporating
the depth of its collective investment experience, and constructs a diversified
portfolio that seeks competitive long-term appreciation with below-average
variability of return.
We have good news to report to our shareholders in this year's Fund update.
Entering the fiscal year last June, the equity markets were two months into a
rally that has proven to be both robust and sustained. For the 12 months ending
May 31, 2004, the S&P 500 Index had a total return of 18.33%, while our primary
benchmark, the S&P 500/BARRA Value Index, gained 20.53%. Both returns greatly
exceeded investor expectations. After three poor years of performance, the
equity markets were reinvigorated by a confluence of positive events. First,
there was moderation in geopolitical fears as the U.S.-led campaign in Iraq
transitioned from an outright military offensive to stabilization and rebuilding
phase. Secondly, economic recovery domestically, began to gain some traction
thanks to 40-year lows in interest rates, consumer tax stimulus, declining value
of the dollar, and an explosion in corporate earnings and cash flows. Third,
internationally, booming economies in China and other developing countries
created demand for primary goods and commodities to such a degree that the
inflation pot was stirred for the first time in years. Together, better demand
and pricing lifted the beleaguered manufacturing sector out of its extended
funk, as spending on capital projects, inventory and increased hiring all
filtered through corporate America.
It is important to highlight this backdrop to the year just ended, for it
represents the fruition of the outlook we planted in last year's report and
supports our rationale for how we positioned the Fund over that timeframe. The
Fund has maintained both broad sector diversification across generally higher
quality issues and above-benchmark exposure to economically sensitive sectors.
Unlike in the 2003 fiscal year, the Fund benefited this year from this
positioning strategy and from our patience and conviction in sticking with that
strategy even while occasionally being out of step with the market. Returns were
strong both in absolute and relative terms during 2004 with the T Shares,
AShares and L Shares returning 21.76%, 21.45%, and 20.58% respectively. Due to
tax-loss carry forwards created during the preceding market downswing, latest
results flowed entirely to the Fund's shareholders without any capital gain
distributions being included. Good performance and no capital gain taxes due is
especially good news for our shareholders this year.
Let me recap a few of the reasons the Fund outperformed during 2004. First, we
continued to eschew attempts to time the market, instead staying fully invested
throughout the period of turbulence and rapid rebound. Next, we maintained
meaningful exposure to those sectors that offered superior earnings leverage to
an improving economy, notably Industrials and Energy, where both the weighting
in the Fund and the stock selection positively impacted results. Some of our
other sector decisions that contributed to results included overweightings in
Consumer Staples and Health Care and underweightings in Telecommunications and
Utilities. Stock selection in Health Care and Consumer Discretionary was also
very accretive to results. Overall, our approach to stock selection followed a
simple formula that served us well: focus on specific companies that could
benefit from modest economic improvement, significant self-help actions in place
to leverage the recovery, and stock valuations that reflected current skepticism
by the consensus investor.
Even in a good year such as the fiscal year ended 2004, some of our decisions,
both at the sector and individual stock level, didn't work out as planned. For
example, we remained overweighted to benchmark in Technology and underweighted
in Financials; both of those decisions detracted from results. Fortunately, our
sizable underweighting in Financials ended up having a small negative
performance impact because of good relative performance of the stocks held in
that area. Another thesis that went off track involved Telecommunications.
During late 2003, we identified a valuation opportunity to increase exposure in
Telecommunications, a strategy that worked out for about two months. However,
that opportunity was quickly derailed by continued, abrupt shifts in the
competitive and regulatory landscapes, and, as a result of a bidding war for
AT&T Wireless, we chose to abandon that thesis and reduce our exposure to that
area. While we do employ rigorous assessment of risk and return and utilize a
time horizon for investment well beyond the compressed and myopic standard often
set by the market, we will nevertheless miss the mark on occasion. In such
instances, we strive to identify and weed out our mistakes and move on to
fresher and stronger ideas.
Looking into the year ahead, we do see evidence accumulating that will alter the
character of the cyclical bull market we all have been enjoying. So far,
economic upswing has most dramatically been made manifest in booming corporate
profits which have greatly exceeded investor expectations. Surprisingly good
earnings have been the primary market driver this time around, a far different
dynamic than what investors encountered throughout most of the 1990's: a secular
decline in interest rates and inflation fostering higher and higher valuation
levels for equities, culminating in a market valuation
12
<page>
"bubble" period in 1999 and 2000. Price/earnings multiples on stocks tend to
expand in periods of falling interest rates and conversely tend to contract
during periods of rising interest rates and inflation. The economic recovery
propelling resurgent corporate profitability also is putting increased upward
pressure on interest rates and inflation, particularly evident since April.
Although the prospect of rising rates penalizes equity valuations, it does not
tend to stunt corporate profits growth until the economic cycle starts to
mature. This "sweet spot" in the earnings cycle is what the Fund was positioned
to take advantage of and the payoff has been seen in results over the past 6
months. Once profit growth starts to undershoot rather than exceed investor
expectations, concurrent with rising rates and contracting valuations, this
earnings driven bull market cycle will face significant obstacles and headwinds.
We anticipate the market following this path over the year ahead and investors
eventually refocusing on sustainable growth rather than cyclical growth.
Following our methodology, we have recently been finding better relative values
with lower risk profiles in some of the larger, less cyclically-oriented names.
Consequently, we have started to harvest some of our cyclical exposures based on
valuation and started to migrate to ideas where company- specific self-help
actions and the potential for better sustainable future growth are being
underappreciated by the market today. Transient distractions, problems and
investor skepticism and unwillingness to look beyond shorter term seem to
provide recurring misvaluations in the stock market and ongoing opportunities
for new ideas across all sectors of the market. For this reason, we remain
sanguine about the upcoming year and believe that the Fund is well positioned
even as the investment climate starts to become much more challenging. On behalf
of the Growth and Income team, thank you for your support and continued vote of
confidence in our approach.
/s/Jeff Markunas
Jeff Markunas, CFA
Portfolio Manager
13
<page>
T SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
21.76% 0.13% 0.91% 10.36% 10.18% 210.31%
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Growth S&P 500/BARRA
and Income Fund, Value
T Shares Index
5/31/94 10,000 10,000
5/95 11,520 11,707
5/96 14,325 14,792
5/97 17,510 18,558
5/98 22,165 23,925
5/99 25,619 27,056
5/00 26,672 27,754
5/01 26,701 29,733
5/02 24,618 25,151
5/03 22,014 22,966
5/04 26,804 27,681
A SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
21.45% -0.08% 0.71% 10.25% 9.59% 175.52% Without Load
- --------------------------------------------------------------------------------
16.89% -1.34% 0.05% 9.83% 9.21% 165.19% With Load
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Growth S&P 500/BARRA
and Income Fund, Value
A Shares Index
5/31/94 9,625 10,000
5/95 11,090 11,707
5/96 13,785 14,792
5/97 16,852 18,558
5/98 21,314 23,925
5/99 24,652 27,056
5/00 25,618 27,754
5/01 25,601 29,733
5/02 23,560 25,151
5/03 21,030 22,966
5/04 25,541 27,681
L SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- --------------------------------------------------------------------
20.58% -0.83% -0.04% 9.28% 125.23% Without CDSC
- --------------------------------------------------------------------
18.58% With CDSC
- ----------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Growth S&P 500/BARRA
and Income Fund, Value
L Shares Index
4/30/95 10,000 10,000
5/95 10,293 10,445
5/96 12,721 13,197
5/97 15,440 16,557
5/98 19,403 21,346
5/99 22,267 24,140
5/00 22,959 24,763
5/01 22,783 26,528
5/02 20,803 22,440
5/03 18,429 20,490
5/04 22,222 24,697
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
14
<page>
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<page>
STI CLASSIC INFORMATION AND TECHNOLOGY FUND
-------------------------------------------
The STIClassic Information and Technology Fund ("the Fund") seeks long-term
capital appreciation by investing primarily in U.S. companies that are expected
to benefit substantially from Information and Technology. The purpose of the
Fund is to capture above-average growth that is driven by long-term, major
shifts from a resource-based economy to an information-based economy. The Fund
has a three-tiered investment structure that classifies holdings into one of the
following three categories: pioneers, technology infrastructure companies and
information beneficiaries. The first category, pioneers, includes firms whose
primary line of business focuses on an emerging technology product or
information-intensive service. The second category, infrastructure companies,
consists of established firms that provide infrastructure to support the
electronic construction and transfer of information. The third category of
companies encompasses established firms that harness information as a key driver
of growth in their businesses. This three-tiered investment strategy is designed
to diversify Fund holdings and produce a superior risk-reward profile to those
exhibited by pure technology funds.
The Fund believes that a carefully constructed, well-diversified portfolio is an
extremely effective tool for investing in technology companies and
information-intensive businesses. This philosophy has proven to be very helpful
for technology and aggressive growth investors during the volatile period of the
last few years. The Fund uses bottom-up analysis in which the competitive
advantages of companies are examined. Considerable consideration is given to a
company's leadership position, return on invested capital record, and customer
demand trends. In addition, the Fund considers each security in the context of
industry, economic and financial market trends. Finally, each position is
assessed for its ability to optimize the portfolio's balance between risk and
potential reward.
Between May 31, 2003 and May 31, 2004, Information Technology stocks generated
impressive returns. The Goldman Sachs Technology Composite Index returned 24.16%
during the twelve-month period and the Lipper Science & Technology Funds
Objective rose 23.96%. To understand the source of these gains, one should
recall the concerns that weighed on technology investors in the first half of
2003. First, geopolitical concerns not only had dampened investor enthusiasm for
aggressive stocks but also had depressed corporate demand for technology
products and services. Second, it was unclear whether the conclusion of major
military combat in Iraq would spark an economic recovery. Many argued that the
economy had structural problems that extended beyond near-term geopolitical
disruptions. Third, a chorus of technology observers argued that even if the
economy regained strength it would be unlikely that Information Technology
companies would benefit extensively. These skeptics pointed to the fact that
there was no new revolutionary technology application, such as the World Wide
Web or Microsoft's Windows 95 on the horizon to stimulate broad-based
information technology demand. They argued that there was little pent-up demand
for personal computers, semiconductors and software that capacity was excessive
in many technology industries; that Asian manufacturers threatened to soak up
incremental demand and that software firms were caught in perpetual price wars
that were funded by large cash reserves. Valuations also still appeared to be
out of touch with reality. Juniper Networks, a poster child for
technology-investing alarmists, was being purchased by some tech investors in
2003 at more than 92 times analysts' projected earnings for the year 2004.
The positive news for Information Technology stocks was that much of these
concerns had become accepted by market participants and conservative
expectations had flowed through to sober earnings estimates among technology
analysts. For example, even after the economy showed some signs of rebounding in
the summer months of 2003, analysts still were forecasting that during the third
quarter of 2003 technology companies would grow revenues a modest 5% over the
amount produced in the third quarter of 2002--a period that was marked by
constrained personal and corporate IT spending.
Despite our concerns about the short and long-term prospects for technology
companies, we were comforted by these conservative expectations among analysts
and investors. Accordingly, the Fund was positioned more aggressively in the
summer of 2003. The shift proved to be advantageous. As the economy began to
show signs of robust growth, economically sensitive technology stocks like
Cypress Semiconductor, National Semiconductor, SAP and Cisco Systems boosted the
Fund's performance. Stunning returns by some very aggressive stocks such as
Akamai Technologies, TTM Technologies, Ask Jeeves and Yahoo! offset lagging
returns by some non-tech, information-oriented stocks such as King
Pharmaceuticals, Merck and Pfizer. The net result was that the Fund's T Shares
generated a 23.56% return during the twelve-month period, inline with gains
exhibited by pure technology indices.
In the last few months of the Fund's fiscal year, many conditions have appeared
very encouraging for technology companies. Semiconductor companies have
benefited from stronger-than-expected global demand and from low excess
production capacity. Some semiconductor companies in fact have gone from
operating at less than 80% capacity to now running at full capacity, allowing
them to raise prices significantly. Although improvement for software companies
has not been as rapid or broad-based, some encouraging demand trends have
developed for the software industry as well. Business also has stabilized for
many telecom infrastructure and networking companies and a few are experiencing
remarkable earnings growth.
16
<page>
As they weigh these recent positive developments, investors also must grapple
with the prospects for technology stocks once news flow becomes less exciting.
How much will market enthusiasm wane and tech stock valuations contract as 50%
year-over-year earnings growth rates moderate to something significantly lower?
How long the current strong global economic growth will last and how much
additional fuel will it provide to demand for technology goods and services? How
much production capacity will technology companies around the world begin to add
and what might this new supply do to industry pricing? These are difficult
questions that challenge investors' ability to gain competitive insights.
Whereas the rebound off depressed levels twelve months ago helped lift most
technology stocks, higher expectations today suggest that stock selection
probably will be a much more important driver of investment performance in the
upcoming year.
We thank you for your interest in the Information and Technology Fund. It is an
understatement to say that change is a continuous challenge when investing in
the universe of stocks we track. We hope that the Fund's diversified structure
and active management has provided its shareholders an effective vehicle for
gaining exposure to this high-growth area of the market.
/s/Alan S. Kelley
Alan S. Kelley
Portfolio Manager
17
<page>
T SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years to Date to Date
- --------------------------------------------------------
23.56% -17.47% -5.98% -25.00%
- --------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Information Goldman Sachs Lipper Science
and Technology Fund, Technology & Technology
T Shares Composite Index Funds Objective
9/30/99 10,000 10,000 10,000
5/00 15,870 13,356 15,070
5/01 13,340 7,311 8,730
5/02 8,060 4,920 5,619
5/03 6,070 4,600 5,211
5/04 7,500 5,711 6,460
A SHARES(2)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years to Date to Date
- --------------------------------------------------------
23.39% -17.50% -6.01% -25.10% Without Load
- --------------------------------------------------------
18.70% -18.55% -6.77% -27.91% With Load
- --------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Information Goldman Sachs Lipper Science
and Technology Fund, Technology & Technology
A Shares Composite Index Funds Objective
9/30/99 9,625 10,000 10,000
5/00 15,274 13,356 15,070
5/01 12,840 7,311 8,730
5/02 7,758 4,920 5,619
5/03 5,842 4,600 5,211
5/04 7,209 5,711 6,460
L SHARES(3)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years to Date to Date
- --------------------------------------------------------
22.53% -18.27% -6.85% -28.20% Without CDSC
- --------------------------------------------------------
20.53% With CDSC
- ---------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Information Goldman Sachs Lipper Science
and Technology Fund, Technology & Technology
L Shares Composite Index Funds Objective
9/30/99 10,000 10,000 10,000
5/00 15,818 13,356 15,070
5/01 13,157 7,311 8,730
5/02 7,864 4,920 5,619
5/03 5,863 4,600 5,211
5/04 7,184 5,711 6,460
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
(1) T Shares were offered beginning on September 30, 1999.
(2) A Shares were offered beginning October 27, 2003. A Shares' performance
prior to October 27, 2003 reflects the performance of the Fund's T Shares.
The performance of the T Shares has not been adjusted to reflect the higher
internal operating expenses of the A Shares. If it had, performance would
have been lower than that shown. The cumulative total return of the A Shares
from its inception date of October 27, 2003 to May 31, 2004 was 4.61%.
(3) L Shares were offered beginning on January 24, 2000. L Shares' performance
for the periods prior to January 24, 2000 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the L Shares. If it had,
performance would have been lower than that shown.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
18
<page>
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<page>
STI CLASSIC INTERNATIONAL EQUITY FUND
-------------------------------------
The STI Classic International Equity Fund (the "Fund") invests in equity
securities of foreign issuers and seeks to provide long-term capital
appreciation. We strive to obtain investment results that outperform the
international markets as measured by the MSCI EAFE Index. The Fund focuses on
sector and company fundamentals specifically looking for companies that are
leaders in their industry, produce quality products, and have sound financial
positions. Our goal is to find companies that have improving growth
characteristics at attractive valuation levels relative to their global peers.
The Fund posted a record annual return of 28.64% for the T Shares class, the
highest return for the Fund in any fiscal year during the course of its 8-year
history. The Fund's benchmark, the MSCIEAFE Index, returned 32.66% for the same
trailing 12-month period. T Shares ranked in the 45th percentile of its Lipper
peer group and returns were slightly above average for all funds with an
international investment objective.
This year was a dramatic change from the previous 3 years with absolute
performance being very positive. Comparing the MSCI EAFE Small Cap indices and
the regular MSCI EAFE, one observes the size bias in the market for the year
with the Small Cap Index up 47.23% vs. 32.66% for the EAFE. The MSCI EAFE Value
outperformed the MSCI EAFE Growth by 11.43%, returning 38.44% vs. 27.01% for the
Growth Index.
From a regional standpoint, Japan was a large contributor to absolute return
with the MSCI Japan Index up 49% in U.S. dollar terms. The Fund slightly
outperformed in Japan as a result of good stock selection in Industrials with
holdings like Mitsui OSK Lines (a bulk shipping company), up 78%, and Marubeni
(a trading conglomerate), up 131% for the period. The best performing global
industry group of the period was Japanese Bank shares. Japanese banks returned
an incredible market cap- weighted industry group return of 170% for the period;
the Fund was able to select the best of this group and return over 200% on our
Japanese bank holdings. The Fund held Sumitomo Mitsui Financial Group which was
up 308% and UFJ Holdings, up 434%. The banks rebounded after many years of
depression as the Japanese economy returned to healthy growth and companies
began doing more business with the banks. However, to somewhat offset these
tremendous gains, we missed out on the Software and Semiconductor rally which
had many companies up over 100%. In the Fund, having no software exposure, our
average tech hardware stock was up only 37%. Needless to say, we struggled with
stock selection in Japanese Information Technology, but overall did well in a
very fast moving, volatile market.
The United Kingdom and Ireland were up around 28% and we did well picking stocks
in Consumer Discretionary and Staples. William Hill, a UK based gaming operator,
was up 150% as consumers opened their wallets and began to spend more on
entertainment and gambling. Housing stocks also were strong and our holding,
George Wimpey, was up 60%. Stock selection in the Energy and Health Care sectors
was a small drag on performance. Furthermore, trading costs and turnover were
higher than we would have liked due to the very high volatility over the past
year.
In Asia (excluding Japan), Esprit Holdings, a fashion company and long term
holding, was up 110% helping performance. Also, Fraser & Neave, a Singapore
based soft drink and beer company, was up 56% and also benefited the Fund.
Europe is where we had the most difficulty over the last year. We did a good job
selecting stocks in the Information Technology sector with holdings like L.M.
Ericsson, a telephone technology company, which was up 173% for the period. We
were hurt somewhat by the fraud at Parmalat; we had a small position and exited
at the first sign of trouble, but it was still a 50% drop from where we had
entered. Another good stock in Europe was Gamesa, a wind generation and turbine
company, which was up 114%. For the most part, across the rest of the sectors in
Europe we underperformed slightly as smaller cap stocks traded up on
expectations of future earnings growth. This small cap rally was very
substantial and the main reason for the Fund not outperforming its benchmark for
the year.
As I mentioned above, in Europe there was a severe small cap bias for the year.
If one analyzed the European benchmark portfolio (MSCI Europe Index) by breaking
it down into five equal groups or quintiles based on the market cap of
individual stocks, you can see that the largest group returned only 27% for the
year. The remaining groups, in order, returned 36%, 43%, 47%, 51%. So the
smallest group of stocks outperformed the largest group of stocks by almost two
times (51% vs. 27%). Our portfolio had a bias toward the larger capitalization
range and did not get the advantage of this small cap rally.
The remainder of the year is likely to see a shift in leadership as some
dramatic outperformance in small cap stocks and lower quality stocks starts to
unwind. We think in a choppy market, or a sideways, but oscillating market, our
focus on bottoms-up stock selection will benefit performance of the Fund.
20
<page>
Where are the opportunities now? Asia is in the early stages of a regional
growth cycle. At the beginning and at the margin, exports to Europe and the US
are important, but increasingly the growth in Asia is self sustaining. There
will be a decoupling to some degree of the Western and Asian markets. Asian
economies are just starting to hit their stride as the U.S. stabilizes at a
lower growth trajectory. Many stocks in Asia are up well over 50% in the last
year, but still below 2000 levels. Investors can gain access to these growth
opportunities without overpaying. We are overweight in Japan and Continental
Europe and underweight in the UK and Australia. The chart below shows the
estimated YOY%* EPS growth and forward P/E for the major regions.
Portfolio
P/E YOY%* Stance
--- ----- ------
Japan 22x 16 +
Continental Europe 16x 18 +
Asia ex-Japan 16x 9 =
UK 14x 14 -
Australia 17x 16 -
At the sector level, it grows increasingly complex because of the specifics of
each sector region. In general, we will continue to be tilted at the sector
level toward stocks that will benefit from the global economic expansion, but
with a continued eye on valuation. Now, as the expansion begins to mature,
investor mindset is shifting and valuation is becoming increasingly important.
As this occurs, our process should begin to gain increasing traction versus the
market in general.
/s/Chad Deakins
Chad Deakins, CFA
Portfolio Manager
*Year over year.
21
<page>
T SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -----------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -----------------------------------------------------------------------
28.64% 0.59% 0.08% 8.38% 111.97%
- -----------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic International MSCI EAFE
Equity Fund, Index,
T Shares in U.S.$
1/31/95 10,000 10,000
5/95 11,637 10,862
5/96 15,179 12,021
5/97 18,714 12,928
5/98 22,807 14,365
5/99 21,112 14,991
5/00 23,346 17,560
5/01 20,827 14,535
5/02 19,027 13,139
5/03 16,478 11,523
5/04 21,197 15,287
A SHARES(2)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -----------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -----------------------------------------------------------------------
27.97% 0.20% -0.30% 8.00% 105.18% Without Load
- -----------------------------------------------------------------------
23.15% -1.05% -1.06% 7.57% 97.55% With Load
- -----------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic International MSCI EAFE
Equity Fund, Index,
A Shares in U.S.$
1/31/95 9,625 10,000
5/95 11,201 10,862
5/96 14,585 12,021
5/97 17,918 12,928
5/98 21,750 14,365
5/99 20,049 14,991
5/00 22,084 17,560
5/01 19,626 14,535
5/02 17,880 13,139
5/03 15,430 11,523
5/04 19,746 15,287
L SHARES(3)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -------------------------------------------------------------------
27.32% -0.45% -0.97% 7.36% 94.08% Without CDSC
- -------------------------------------------------------------------
25.32% With CDSC
- ----------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic International MSCI EAFE
Equity Fund, Index,
L Shares in U.S.$
1/31/95 10,000 10,000
5/95 11,637 10,862
5/96 15,139 12,021
5/97 18,467 12,928
5/98 22,260 14,365
5/99 20,372 14,991
5/00 22,283 17,560
5/01 19,674 14,535
5/02 17,783 13,139
5/03 15,242 11,523
5/04 19,406 15,287
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
*For periods prior to December 1995, when the Fund began operating, the
performance quoted reflects performance of the Adviser's similarly managed
collective investment fund. The collective investment fund was not a registered
mutual fund, and therefore, was not subject to certain investment and tax
restrictions which may have adversely affected performance.
(1) T Shares were offered beginning on December 1, 1995.
(2) A Shares were offered beginning on January 2, 1996. A Shares' performance
for the periods prior to January 2, 1996 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the A Shares. If it had,
performance would have been lower than that shown.
(3) L Shares were offered beginning on January 2, 1996. L Shares' performance
for the periods prior to January 2, 1996 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the L Shares. If it had,
performance would have been lower than that shown.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
22
<page>
This page left intentionally blank.
<page>
STI CLASSIC INTERNATIONAL EQUITY INDEX FUND
-------------------------------------------
The STI Classic International Equity Index Fund (the "Fund") invests in equity
securities of foreign issuers and seeks to closely match the returns of the MSCI
EAFE-GDP Index, the Fund's benchmark. To help minimize tracking error, the Fund
holds approximately 700 stocks in the portfolio. Tracking error represents a
measure of how closely a portfolio matches the return of its benchmark. The
tracking error of the Fund continues to be low and thus the Fund is a very
efficient vehicle to gain international equity market exposure.
Performance for the year was positive for all sectors and all countries in the
Developed Markets. Higher beta industries like Industrials, +45%; Information
Technology, +45%; and Finance, +41% led the way. Lower beta industries like
Consumer Staples, +25%; Health Care, +22%; and Utilities, +21% still did well.
In transition the Telecommunication industry seems to be changing and beginning
to act more like a utility; it was up only 16% even though historically it has
had a higher beta than three-quarters of the other sectors.
This year was a dramatic change from the previous 3 years with absolute
performance being very positive. Comparing the MSCI EAFE Small Cap indices and
the regular MSCI EAFE, one observes the size bias in the market for the year
with the Small Cap Index up 47.23% vs. 32.66% for the EAFE. The MSCI EAFE Value
outperformed the MSCI EAFE Growth by 11.43%, returning 38.44% vs. 27.01% for the
Growth Index. From a regional standpoint, Japan was a large contributor to
absolute return with the MSCI Japan Index up 49% in U.S. dollar terms.
Japan had three of the best performing regional industry groups with Japanese
banks up 171%; real estate companies up 110%, and insurance companies up 88%.
Small Cap issues outperformed Large Cap issues in all regions. Higher beta
stocks outperformed lower beta stocks as well.
Smaller Cap stocks dramatically outperformed Larger Cap issues during the year.
Stocks with high future earnings growth expectations performed better than those
with lower growth expectations. It was a volatile and high magnitude global
equity rally based on the positive economic growth cycle.
The Fund's TShares returned 34.07% for the trailing 12-month period and did a
good job of tracking its index, the MSCI EAFE-GDP Index which returned 33.74%.
Why should you invest in International markets now? The U.S. market as a percent
of the total global equity market has continued to shrink, and is now less than
half of the investable global equity universe. An investor with no International
exposure is missing out on half the opportunity set. A U.S. only investor is
missing out on good performing markets. International stocks have a low
correlation with other U.S. based asset categories, and therefore the overall
volatility of a portfolio including international and domestic equities should
theoretically offer enhanced diversification. The STI Classic International
Equity Fund has attractive characteristics as a good vehicle to gain exposure to
the developed International markets of the world.
/s/Chad Deakins
Chad Deakins, CFA
Portfolio Manager
24
<page>
T SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -----------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -----------------------------------------------------------------------
34.07% 0.47% -0.37% 4.87% 60.70%
- -----------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic International MSCI EAFE-GDP Index,
Equity Index Fund, Weighted in
T Shares U.S.$ (Price Return)
6/30/94 10,000 10,000
5/95 10,331 10,343
5/96 11,291 11,256
5/97 12,135 12,067
5/98 15,269 14,401
5/99 16,470 15,010
5/00 19,659 17,900
5/01 15,944 14,558
5/02 13,962 12,817
5/03 12,059 10,924
5/04 16,167 14,609
A SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -----------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -----------------------------------------------------------------------
33.26% 0.02% -0.82% 4.40% 53.78% Without Load
- -----------------------------------------------------------------------
28.31% -1.24% -1.58% 4.01% 48.01% With Load
- -----------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic International MSCI EAFE-GDP Index,
Equity Index Fund, Weighted in
A Shares U.S.$ (Price Return)
6/30/94 9,625 10,000
5/95 9,904 10,343
5/96 10,786 11,256
5/97 11,554 12,067
5/98 14,471 14,401
5/99 15,532 15,010
5/00 18,461 17,900
5/01 14,896 14,558
5/02 13,012 12,817
5/03 11,186 10,924
5/04 14,907 14,609
L SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -------------------------------------------------------------------
32.60% -0.58% -1.45% 3.99% 42.10% Without CDSC
- -------------------------------------------------------------------
30.60% With CDSC
- ----------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic International MSCI EAFE-GDP Index,
Equity Index Fund, Weighted in
L Shares U.S.$ (Price Return)
6/30/95 10,000 10,000
5/96 10,911 11,020
5/97 11,610 11,814
5/98 14,455 14,099
5/99 15,421 14,696
5/00 18,202 17,525
5/01 14,591 14,253
5/02 12,655 12,548
5/03 10,812 10,695
5/04 14,337 14,303
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
25
<page>
STI CLASSIC LIFE VISION AGGRESSIVE GROWTH FUND
----------------------------------------------
The year ending May 31, 2004 was decidedly brighter for the markets and for
investors in the STIClassic Life Vision Aggressive Growth Fund. The economy and
corporate profits grew at an above-average pace, Federal Reserve interest rate
policy remained low and accommodative, and equity prices moved higher. The Fund,
a managed allocation of STI Classic stock funds, outperformed its blended
benchmark for the one, three, and five years ended May 31, 2004.
Economic growth during the past year was very strong, statistically speaking,
though much of the strength was directly attributable to the well-timed interest
rate and federal tax cuts that were instrumental in sustaining consumer
spending. While this stimulus was an essential element to increased spending,
the expansion was not yet self-sustaining, even into early 2004, and so was
viewed as vulnerable to setbacks. A resumption of job growth was seen as the
litmus test to sustainability. This potential vulnerability, combined with low
core inflation, kept Federal Reserve interest rate policy accommodative during
the year, with the key fed funds rate falling and holding at 1%. However, job
growth finally accelerated in the second quarter of 2004, raising hopes of a
more self-sustaining expansion, but also fears of higher interest rates.
In equities, the S&P 500 Index rose 18.33% on a total return basis in the year
ended May 31, 2004, with the bulk of the rise concentrated in the third and
fourth quarters of last year. Mid Cap and Small Cap stocks were even stronger,
with the S&P Mid Cap 400 Index posting a 26.73% gain and the Russell 2000 Index
rising 30.29%. On the international front, the MSCI EAFE Index gained 32.66%.
Above average gains in the commodity price sensitive sectors helped the Value
style generally outperformed Growth for the period.
The Fund benefited from its exposure to the Small Cap, Mid Cap, and
International markets as well as to the fixed-income High Yield market. The
Fund's T Shares returned 20.34% in the year ended May 31, 2004, compared with an
16.51% blended benchmark comprised of 90% S&P 500 Index, and 10% Citigroup
3-Month Treasury Bill Index.
As we look ahead the economic expansion looks both solid and sustainable, and is
capable of supporting further gains in corporate profits and in equity prices. A
key reason for this was the resumption of job growth. However the pace of the
expansion is likely to slow as the stimulative benefits of tax rebates and
mortgage financing subside. Inflation pressures will increase from their
historically low level, putting pressure on the Federal Reserve to begin raising
interest rates following a protracted period of stimulus. Bond yields are likely
to rise further as the Fed starts to apply monetary restraint, but the pace of
rate hikes is expected to be gradual as long as inflation pressures do not
escalate sharply. A gradual rise in yields should not be a longer-term
disruption to the equity markets.
We are maintaining a high weight in stocks within the Fund within our asset
allocation mix, but we have reduced our weighting in SmallCap stocks in favor of
Large Caps given the extreme outperformance by Small Caps over the past several
years and shifts in some of our key valuation measures. We retained our
overweight position in International equities, but are currently neutral in on
Growth and Value styles.
In closing, I want to take this opportunity to thank you for investing in the
Life Vision Aggressive Growth Fund. We appreciate your confidence and we will
work hard to continue our strong investment performance in the year ahead.
Sincerely,
/s/Alan M. Gayle
Alan M. Gayle
Senior Investment Strategist
26
<page>
T SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
20.34% 0.12% 2.10% 8.73% 8.37% 150.24%
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic Life Vision Citigroup
Aggressive Growth Fund, 90/40 S&P 500 3-Month Treasury
T Shares Hybrid: Index Bill Index
5/31/94 10,000 10,000 10,000 10,000
5/95 11,170 11,865 12,019 10,524
5/96 13,707 14,946 15,437 11,102
5/97 15,882 18,967 19,979 11,686
5/98 19,408 24,281 26,110 12,300
5/99 20,809 29,028 31,601 12,886
5/00 22,318 31,949 34,913 13,556
5/01 23,003 29,108 31,230 14,341
5/02 21,402 25,549 26,904 14,719
5/03 19,185 23,775 24,736 14,934
5/04 23,087 27,701 29,270 15,079
A SHARES(2)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
20.08% 0.05% 2.06% 8.70% 8.35% 149.72% Without Load
- --------------------------------------------------------------------------------
15.62% -1.21% 1.28% 8.28% 7.98% 140.28% With Load
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic Life Vision Citigroup
Aggressive Growth Fund, 90/40 S&P 500 3-Month Treasury
A Shares Hybrid: Index Bill Index
5/31/94 9,625 10,000 10,000 10,000
5/95 11,170 11,865 12,019 10,524
5/96 13,707 14,946 15,437 11,102
5/97 15,882 18,967 19,979 11,686
5/98 19,408 24,281 26,110 12,300
5/99 20,809 29,028 31,601 12,886
5/00 22,318 31,949 34,913 13,556
5/01 23,003 29,108 31,230 14,341
5/02 21,402 25,549 26,904 14,719
5/03 19,185 23,775 24,736 14,934
5/04 23,037 27,701 29,270 15,079
B SHARES
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
19.49% -0.20% 1.91% 8.62% 8.28% 147.86% Without CDSC
- --------------------------------------------------------------------------------
14.49% -1.54% 1.57% With CDSC
- ----------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic Life Vision Citigroup
Aggressive Growth Fund, 90/40 S&P 500 3-Month Treasury
B Shares Hybrid: Index Bill Index
5/31/94 10,000 10,000 10,000 10,000
5/95 11,170 11,865 12,019 10,524
5/96 13,707 14,946 15,437 11,102
5/97 15,882 18,967 19,979 11,686
5/98 19,408 24,281 26,110 12,300
5/99 20,809 29,028 31,601 12,886
5/00 22,318 31,949 34,913 13,556
5/01 23,003 29,108 31,230 14,341
5/02 21,402 25,549 26,904 14,719
5/03 19,137 23,775 24,736 14,934
5/04 22,867 27,701 29,270 15,079
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
*For periods prior to June 1997, when the Fund began operating, the performance
quoted reflects past performance of Crestar Bank's similarly managed asset
allocation model, adjusted to reflect the Fund's fees and expenses. The asset
allocation model was not a registered mutual fund, and therefore was not
subject to certain investment and tax restrictions which may have adversely
affected performance.
(1) T Shares were offered beginning on June 30, 1997.
(2) A Shares were offered beginning on October 16, 2003. A Shares' performance
for the periods prior to October 16, 2003 reflects the performance of the
Fund's T Shares. The performance of the TShares has not been adjusted to
reflect the higher internal operating expenses of the AShares. If it had,
performance would have been lower than that shown. The cumulative total
return of the A Shares from its inception date of October 16, 2003 to May
31, 2004 was 8.43%.
(3) B Shares were offered beginning on March 11, 2003. B Shares' performance for
the periods prior to March 11, 2003 reflects the performance of the Fund's T
Shares. The performance of the T Shares has not been adjusted to reflect the
higher internal operating expenses of the B Shares. If it had, performance
would have been lower than that shown.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
27
<page>
STI CLASSIC LIFE VISION CONSERVATIVE FUND
-----------------------------------------
The year ending May 31, 2004 was decidedly brighter for the markets and for
investors in the STIClassic Life Vision Conservative Fund (the "Fund"). The
economy and corporate profits grew at an above-average pace, Federal Reserve
interest rate policy remained low and accommodative, and equity prices moved
higher. The Fund, a managed allocation of STI Classic stock and bond funds,
outperformed its blended benchmark in its first year ended May 31, 2004.
Economic growth during the past year was very strong, statistically speaking,
though much of the strength was directly attributable to the well-timed interest
rate and federal tax cuts that were instrumental in sustaining consumer
spending. While this stimulus was an essential element to increased spending,
the expansion was not yet self-sustaining, even into early 2004, and so was
viewed as vulnerable to setbacks. A resumption of job growth was seen as the
litmus test to sustainability. This potential vulnerability, combined with low
core inflation, kept Federal Reserve interest rate policy accommodative during
the year, with the key fed funds rate falling and holding at 1%. However, job
growth finally accelerated in the second quarter of 2004, raising hopes of a
more self-sustaining expansion, but also fears of higher interest rates.
In equities, the S&P 500 Index rose 18.33% on a total return basis in the year
ended May 31, 2004, with the bulk of the rise concentrated in the third and
fourth quarters of last year. Mid Cap and Small Cap stocks were even stronger,
with the S&P Mid Cap 400 Index posting a 26.73% gain and the Russell 2000 Index
rising 30.29%. On the international front, the MSCI EAFE Index gained 32.66%.
Above average gains in the commodity price sensitive sectors helped the Value
style generally outperformed Growth for the period.
In the fixed-income markets bond yields moved higher over the course of the
twelve months, though intra-year volatility was significant. The yield on the
10-year Treasury note fell to as low as 3.11% in June 2003 and rose as high as
4.86% just before the close of the fiscal year in May. The Lehman U.S. Aggregate
Bond Index fell a modest 0.44% during the year ending May 31, 2004, though
longer-term bonds such as the 10-year Treasury note were considerably weaker
falling over 5%. The stronger economy helped credit-sensitive sectors such as
High Yield perform well, while Treasury securities generally underperformed.
The Fund benefited from its exposure to the Small Cap, Mid Cap, and
International markets as well as to the fixed-income High Yield market. The T
Shares returned 5.79% in the year ended May 31, 2004 (see Note 1 on page 29),
compared with an 3.32% blended benchmark comprised of 20% S&P 500 Index, 70%
Lehman U.S. Aggregate Bond Index, and 10% Citigroup 3-Month Treasury Bill Index.
As we look ahead the economic expansion looks both solid and sustainable, and is
capable of supporting further gains in corporate profits and in equity prices. A
key reason for this was the resumption of job growth. However the pace of the
expansion is likely to slow as the stimulative benefits of tax rebates and
mortgage financing subside. Inflation pressures will increase from their
historically low level, putting pressure on the Federal Reserve to begin raising
interest rates following a protracted period of stimulus. Bond yields are likely
to rise further as the Fed starts to apply monetary restraint, but the pace of
rate hikes is expected to be gradual as long as inflation pressures do not
escalate sharply.
We remain cyclically overweight stocks in the Fund within our asset allocation
mix, but we have reduced our weighting in Small Cap stocks given the extreme
outperformance by the sector and over the past several years and shifts in some
of our key valuation measures. We retained our overweight position in
International equities, but are currently neutral in on Growth and Value styles.
In the fixed-income segment, we will emphasize mortgage-back and selected
corporate bonds as a way to enhance current yield without taking additional
maturity risk.
In closing, I want to take this opportunity to thank you for investing in the
Life Vision Conservative Fund. We appreciate your confidence and we will work
hard to continue our strong investment performance in the year ahead.
Sincerely,
/s/Alan M. Gayle
Alan M. Gayle
Senior Investment Strategist
28
<page>
T SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -------------------------------------------
Annualized Cumulative
nception Inception
One Year to Date to Date
- -------------------------------------------
5.79% 8.40% 10.34%
- -------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Life Vision Lehman Citigroup
Conservative Fund, 70/20/10 U.S. Aggregate S&P 500 3-Month Treasury
T Shares Hybrid Benchmark: Bond Index Index Bill Index
3/31/03 10,000 10,000 10,000 10,000 10,000
5/03 10,482 10,466 10,271 11,394 10,020
5/04 11,089 10,813 10,225 13,483 10,117
A SHARES(2)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -------------------------------------------
Annualized Cumulative
Inception Inception
One Year to Date to Date
- -------------------------------------------
5.64% 8.27% 10.19% Without Load
- -------------------------------------------
1.65% 4.93% 6.05% With Load
- -------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Life Vision Lehman Citigroup
Conservative Fund, 70/20/10 U.S. Aggregate S&P 500 3-Month Treasury
A Shares Hybrid Benchmark: Bond Index Index Bill Index
3/31/03 9,625 10,000 10,000 10,000 10,000
5/03 10,089 10,466 10,271 11,394 10,020
5/04 10,658 10,813 10,225 13,483 10,117
B SHARES(3)
AVERAGE ANNUAL TOTAL RETURNS
(PERIODS ENDED MAY 31, 2004)
- -------------------------------------------
Annualized Cumulative
Inception Inception
One Year to Date to Date
- -------------------------------------------
5.38% 8.05% 9.91% Without CDSC
- -------------------------------------------
0.38% 4.82% 5.91% With CDSC
- -------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Life Vision Lehman Citigroup
Conservative Fund, 70/20/10 U.S. Aggregate S&P 500 3-Month Treasury
B Shares Hybrid Benchmark: Bond Index Index Bill Index
3/31/03 10,000 10,000 10,000 10,000 10,000
5/03 10,482 10,466 10,271 11,394 10,020
5/04 10,646 10,813 10,225 13,483 10,117
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
(1) T Shares were offered beginning on November 6, 2003. T Shares' performance
for the periods prior to November 6, 2003 reflects the performance of the
Fund's B Shares. The performance of the BShares has not been adjusted to
reflect the lower internal operating expenses of the TShares. If it had,
performance would have been higher than that shown. The cumulative total
return of the TShares from its inception date of November 6, 2003 to May 31,
2004 was 2.68%.
(2) A Shares were offered beginning on November 11, 2003. A Shares' performance
for the periods prior to November 11, 2003 reflects the performance of the
Fund's B Shares. The performance of the B Shares has not been adjusted to
reflect the lower internal operating expenses of the AShares. If it had,
performance would have been higher than that shown. The cumulative total
return of the AShares from its inception date of November 11, 2003 to May
31, 2004 was 2.82%.
(3) B Shares were offered beginning on March 11, 2003.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
29
<page>
STI CLASSIC LIFE VISION GROWTH AND INCOME FUND
----------------------------------------------
The year ending May 31, 2004 was decidedly brighter for the markets and for
investors in the STIClassic Life Vision Growth and Income Fund (the "Fund"). The
economy and corporate profits grew at an above-average pace, Federal Reserve
interest rate policy remained low and accommodative, and equity prices moved
higher. The Fund, a managed allocation of STI Classic stock and bond funds,
continued to outperform its blended benchmark for the past one, three, five, and
ten years ended May 31, 2004.
Economic growth during the past year was very strong, statistically speaking,
though much of the strength was directly attributable to the well-timed interest
rate and federal tax cuts that were instrumental in sustaining consumer
spending. While this stimulus was an essential element to increased spending,
the expansion was not yet self-sustaining, even into early 2004, and so was
viewed as vulnerable to setbacks. A resumption of job growth was seen as the
litmus test to sustainability. This potential vulnerability, combined with low
core inflation, kept Federal Reserve interest rate policy accommodative during
the year, with the key fed funds rate falling and holding at 1%. However, job
growth finally accelerated in the second quarter of 2004, raising hopes of a
more self-sustaining expansion, but also fears of higher interest rates.
In equities, the S&P 500 Index rose 18.33% on a total return basis in the year
ended May 31, 2004, with the bulk of the rise concentrated in the third and
fourth quarters of last year. Mid Cap and Small Cap stocks were even stronger,
with the S&P Mid Cap 400 Index posting a 26.73% gain and the Russell 2000 Index
rising 30.29%. On the international front, the MSCI EAFE Index gained 32.66%.
Above average gains in the commodity price sensitive sectors helped the Value
style generally outperformed Growth for the period.
In the fixed-income markets bond yields moved higher over the course of the
twelve months, though intra-year volatility was significant. The yield on the
10-year Treasury note fell to as low as 3.11% in June 2003 and rose as high as
4.86% just before the close of the fiscal year in May. The Lehman U.S. Aggregate
Bond Index fell a modest 0.44% during the year ending May 31, 2004, though
longer-term bonds such as the 10-year Treasury note were considerably weaker
falling over 5%. The stronger economy helped credit-sensitive sectors such as
High Yield perform well, while Treasury securities generally underperformed.
The Fund benefited from its exposure to the Small Cap, Mid Cap, and
International markets as well as to the fixed-income High Yield market. The T
Shares returned 16.92% in the year ended May 31, 2004, compared with an 11.68%
blended benchmark comprised of 65% S&P 500 Index, 25% Lehman U.S. Aggregate Bond
Index, and 10% Citigroup 3-Month Treasury Bill Index.
As we look ahead the economic expansion looks both solid and sustainable, and is
capable of supporting further gains in corporate profits and in equity prices. A
key reason for this was the resumption of job growth. However the pace of the
expansion is likely to slow as the stimulative benefits of tax rebates and
mortgage financing subside. Inflation pressures will increase from their
historically low level, putting pressure on the Federal Reserve to begin raising
interest rates following a protracted period of stimulus. Bond yields are likely
to rise further as the Fed starts to apply monetary restraint, but the pace of
rate hikes is expected to be gradual as long as inflation pressures do not
escalate sharply.
We remain cyclically overweight stocks in the Fund within our asset allocation
mix, but we have reduced our weighting in Small Cap stocks given the extreme
outperformance by the sector and over the past several years and shifts in some
of our key valuation measures. We retained our overweight position in
International equities, but are currently neutral in on Growth and Value styles.
In the fixed-income segment, we will emphasize mortgage-back and selected
corporate bonds as a way to enhance current yield without taking additional
maturity risk.
In closing, I want to take this opportunity to thank you for investing in the
Life Vision Growth and Income Fund. We appreciate your confidence and we will
work hard to continue our strong investment performance in the year ahead.
Sincerely,
/s/Alan M. Gayle
Alan M. Gayle
Senior Investment Strategist
30
<page>
T Shares(1)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
16.92% 2.47% 3.89% 8.41% 7.94% 139.15%
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup
Growth and Income Fund, 65/25/10 S&P 500 U.S. Aggregate 3-Month Treasury
T Shares Hybrid: Index Bond Index Bill Index
5/31/94 10,000 10,000 10,000 10,000 10,000
5/95 11,136 11,649 12,019 11,150 10,524
5/96 13,015 13,939 15,437 11,638 11,102
5/97 14,712 16,936 19,979 12,607 11,686
5/98 17,376 20,838 26,110 13,983 12,300
5/99 18,530 24,087 31,601 14,590 12,886
5/00 19,606 26,036 34,913 14,898 13,556
5/01 20,844 25,223 31,230 16,851 14,341
5/02 20,255 23,493 26,904 18,218 14,719
5/03 19,181 23,042 24,736 20,327 14,934
5/04 22,426 25,733 29,270 20,238 15,079
A Shares(2)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
16.73% 2.41% 3.86% 8.40% 7.92% 138.76% Without Load
12.40% 1.10% 3.07% 7.98% 7.56% 129.85% With Load
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup
Growth and Income Fund, 65/25/10 S&P 500 U.S. Aggregate 3-Month Treasury
A Shares Hybrid: Index Bond Index Bill Index
5/31/94 9,625 10,000 10,000 10,000 10,000
5/95 11,136 11,649 12,019 11,150 10,524
5/96 13,015 13,939 15,437 11,638 11,102
5/97 14,712 16,936 19,979 12,607 11,686
5/98 17,376 20,838 26,110 13,983 12,300
5/99 18,530 24,087 31,601 14,590 12,886
5/00 19,606 26,036 34,913 14,898 13,556
5/01 20,844 25,223 31,230 16,851 14,341
5/02 20,225 23,493 26,904 18,218 14,719
5/03 19,181 23,042 24,736 20,327 14,934
5/04 22,390 25,733 29,270 20,238 15,079
B Shares(3)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
15.99% 2.19% 3.72% 8.32% 7.86% 137.21% Without CDSC
10.99% 0.90% 3.38% With CDSC
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup
Growth and Income Fund, 65/25/10 S&P 500 U.S. Aggregate 3-Month Treasury
B Shares Hybrid: Index Bond Index Bill Index
5/31/94 10,000 10,000 10,000 10,000 10,000
5/95 11,136 11,649 12,019 11,150 10,524
5/96 13,015 13,939 15,437 11,638 11,102
5/97 14,712 16,936 19,979 12,607 11,686
5/98 17,376 20,838 26,110 13,983 12,300
5/99 18,530 24,087 31,601 14,590 12,886
5/00 19,606 26,036 34,913 14,898 13,556
5/01 20,844 25,223 31,230 16,851 14,341
5/02 20,225 23,493 26,904 18,218 14,719
5/03 19,179 23,042 24,736 20,327 14,934
5/04 22,246 25,733 29,270 20,238 15,079
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
*For periods prior to June 1997, when the Fund began operating, the
performance quoted reflects performance of Crestar Bank's similarly managed
asset allocation model, adjusted to reflect the Fund's fees and expenses. The
asset allocation model was not a registered mutual fund, and therefore was not
subject to certain investment and tax restrictions which may have adversely
affected performance.
(1) T Shares were offered beginning on June 30, 1997.
(2) A Shares were offered beginning on November 5, 2003. A Shares' performance
for the periods prior to November 5, 2003 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the A Shares. If it had,
performance would have been lower than that shown. The cumulative total
return of the A Shares from its inception date of November 5, 2003 to
May 31, 2004 was 6.32%
(3) B Shares were offered beginning on March 11, 2003. B Shares' performance for
the periods prior to March 11, 2003 reflects the performance of the Fund's
T Shares. The performance of the T Shares has not been adjusted to reflect
the higher internal operating expenses of the B Shares. If it had,
performance would have been lower than that shown.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
31
<page>
STI CLASSIC LIFE VISION MODERATE GROWTH FUND
--------------------------------------------
The year ending May 31, 2004 was decidedly brighter for the markets and for
investors in the STIClassic Life Vision Moderate Growth Fund (the "Fund"). The
economy and corporate profits grew at an above-average pace, Federal Reserve
interest rate policy remained low and accommodative, and equity prices moved
higher. The Fund, a managed allocation of STI Classic stock and bond funds,
continued to outperform its blended benchmark for the past one, three, and five
years ended May 31, 2004.
Economic growth during the past year was very strong, statistically speaking,
though much of the strength was directly attributable to the well-timed interest
rate and federal tax cuts that were instrumental in sustaining consumer
spending. While this stimulus was an essential element to increased spending,
the expansion was not yet self-sustaining, even into early 2004, and so was
viewed as vulnerable to setbacks. A resumption of job growth was seen as the
litmus test to sustainability. This potential vulnerability, combined with low
core inflation, kept Federal Reserve interest rate policy accommodative during
the year, with the key fed funds rate falling and holding at 1%. However, job
growth finally accelerated in the second quarter of 2004, raising hopes of a
more self-sustaining expansion, but also fears of higher interest rates.
In equities, the S&P 500 Index rose 18.33% on a total return basis in the year
ended May 31, 2004, with the bulk of the rise concentrated in the third and
fourth quarters of last year. Mid Cap and Small Cap stocks were even stronger,
with the S&P Mid Cap 400 Index posting a 26.73% gain and the Russell 2000 Index
rising 30.29%. On the international front, the MSCI EAFE Index gained 32.66%.
Above average gains in the commodity price sensitive sectors helped the Value
style generally outperformed Growth for the period.
In the fixed-income markets bond yields moved higher over the course of the
twelve months, though intra-year volatility was significant. The yield on the
10-year Treasury note fell to as low as 3.11% in June 2003 and rose as high as
4.86% just before the close of the fiscal year in May. The Lehman U.S. Aggregate
Bond Index fell a modest 0.44% during the year ending May 31, 2004, though
longer-term bonds such as the 10-year Treasury note were considerably weaker
falling over 5%. The stronger economy helped credit-sensitive sectors such as
High Yield perform well, while Treasury securities generally underperformed.
The Fund benefited from its exposure to the Small Cap, Mid Cap, and
International markets as well as to the fixed-income High Yield market. The T
Shares returned 13.35% in the year ended May 31, 2004, compared with an 8.84%
blended benchmark comprised of 50% S&P 500 Index, 40% Lehman U.S. Aggregate Bond
Index, and 10% Citigroup 3-Month Treasury Bill Index.
As we look ahead the economic expansion looks both solid and sustainable, and is
capable of supporting further gains in corporate profits and in equity prices. A
key reason for this was the resumption of job growth. However the pace of the
expansion is likely to slow as the stimulative benefits of tax rebates and
mortgage financing subside. Inflation pressures will increase from their
historically low level, putting pressure on the Federal Reserve to begin raising
interest rates following a protracted period of stimulus. Bond yields are likely
to rise further as the Fed starts to apply monetary restraint, but the pace of
rate hikes is expected to be gradual as long as inflation pressures do not
escalate sharply.
We remain cyclically overweight stocks in the Fund within our asset allocation
mix, but we have reduced our weighting in Small Cap stocks given the extreme
outperformance by the sector and over the past several years and shifts in some
of our key valuation measures. We retained our overweight position in
International equities, but are currently neutral in on Growth and Value styles.
In the fixed-income segment, we will emphasize mortgage-back and selected
corporate bonds as a way to enhance current yield without taking additional
maturity risk.
In closing, I want to take this opportunity to thank you for investing in the
Life Vision Moderate Growth Fund. We appreciate your confidence and we will work
hard to continue our strong investment performance in the year ahead.
Sincerely,
/s/Alan M. Gayle
Alan M. Gayle
Senior Investment Strategist
32
<page>
T Shares(1)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
13.35% 2.96% 3.72% 7.80% 7.35% 124.71%
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup
Moderate Growth Fund, 50/40/10 S&P 500 U.S. Aggregate 3-Month Treasury
T Shares Hybrid: Index Bond Index Bill Index
5/31/94 10,000 10,000 10,000 10,000 10,000
5/95 11,106 11,519 12,019 11,150 10,524
5/96 12,677 13,362 15,437 11,638 11,102
5/97 14,162 15,810 19,979 12,607 11,686
5/98 16,584 18,983 26,110 13,983 12,300
5/99 17,657 21,472 31,601 14,590 12,886
5/00 18,444 22,943 34,913 14,898 13,556
5/01 19,418 23,032 31,230 16,851 14,341
5/02 19,123 22,207 26,904 18,218 14,719
5/03 18,700 22,438 24,736 20,327 14,934
5/04 21,197 24,422 29,270 20,238 15,079
A Shares(2)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
13.18% 2.91% 3.69% 7.78% 7.33% 124.37% Without Load
8.95% 1.60% 2.90% 7.37% 6.98% 116.03% With Load
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup
Moderate Growth Fund, 50/40/10 S&P 500 U.S. Aggregate 3-Month Treasury
A Shares Hybrid: Index Bond Index Bill Index
5/31/94 9,625 10,000 10,000 10,000 10,000
5/95 11,106 11,519 12,019 11,150 10,524
5/96 12,677 13,362 15,437 11,638 11,102
5/97 14,162 15,810 19,979 12,607 11,686
5/98 16,584 18,983 26,110 13,983 12,300
5/99 17,657 21,472 31,601 14,590 12,886
5/00 18,444 22,943 34,913 14,898 13,556
5/01 19,418 23,032 31,230 16,851 14,341
5/02 19,123 22,207 26,904 18,218 14,719
5/03 18,700 22,438 24,736 20,327 14,934
5/04 21,165 24,422 29,270 20,238 15,079
B Shares(3)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
12.66% 2.66% 3.54% 7.71% 7.27 122.75% Without CDSC
7.66% 1.38% 3.21% With CDSC
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT*
STI Classic Life Vision Lehman Citigroup
Moderate Growth Fund, 50/40/10 S&P 500 U.S. Aggregate 3-Month Treasury
B Shares Hybrid: Index Bond Index Bill Index
5/31/94 10,000 10,000 10,000 10,000 10,000
5/95 11,106 11,519 12,019 11,150 10,524
5/96 12,677 13,362 15,437 11,638 11,102
5/97 14,162 15,810 19,979 12,607 11,686
5/98 16,584 18,983 26,110 13,983 12,300
5/99 17,657 21,472 31,601 14,590 12,886
5/00 18,444 22,943 34,913 14,898 13,556
5/01 19,418 23,032 31,230 16,851 14,341
5/02 19,123 22,207 26,904 18,218 14,719
5/03 18,651 22,438 24,736 20,327 14,934
5/04 21,012 24,422 29,270 20,238 15,079
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
*For periods prior to June 1997, when the Fund began operating, the performance
quoted reflects performance of Crestar Bank's similarly managed asset
allocation model, adjusted to reflect the Fund's fees and expenses. The asset
allocation program was not a registered mutual fund, and therefore was not
subject to certain investment and tax restrictions which may have adversely
affected performance.
(1) T Shares were offered beginning on June 30, 1997.
(2) A Shares were offered beginning on October 10, 2003. A Shares' performance
for the periods prior to October 10, 2003 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the A Shares. If it had,
performance would have been lower than that shown. The cumulative total
return of the A Shares from its inception date of October 10, 2003 to
May 31, 2004 was 5.79%.
(3) B Shares were offered beginning on March 11, 2003. B Shares' performance for
the periods prior to March 11, 2003 reflects the performance of the Fund's
T Shares. The performance of the T Shares has not been adjusted to reflect
the higher internal operating expenses of the B Shares. If it had,
performance would have been lower than that shown.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
33
<page>
STI CLASSIC MID-CAP EQUITY FUND
-------------------------------
The STI Classic Mid-Cap Equity Fund (the "Fund") seeks capital appreciation by
investing primarily in the stocks of companies with a market capitalization
between $500 million and $10 billion, or in the Russell Midcap Index. Mid cap
securities that offer above average stock price appreciation relative to other
securities in the same economic Sector drive our investment philosophy.
Proprietary Sector based models to rank stocks have been utilized in each Sector
in the mid cap market. These models utilize fundamental stock characteristics
such as growth rates and cashflows. Fundamental research is used in the
creation, maintenance, and enhancement of the Sector based models to reflect
changes in the mid cap market.
For the fiscal year ending May 31, 2004 the Fund's T Shares returned 18.70%
versus a return of 27.18% for the Russell Midcap Index, and 24.77% for the
Lipper Mid Cap Core Funds Classification. While on an absolute basis these
results are positive, versus the strategy's Benchmark and Peer Group, the
results were disappointing.
When one dissects the past twelve months of returns for our strategy and the
Russell Midcap, the categories of low price, high beta and low quality provided
unusually robust returns. While the Russell Midcap returned 27.18%, the highest
price, usually considered higher quality, decile of stocks, as of May 31, 2003,
returned 21.58% over the subsequent twelve months. The lowest price, usually
considered lower quality, decile of stocks, as of May 31, 2003, returned 36.91%
over the subsequent twelve months. If one looks deeper into this lowest price
decile of stocks as of May 31, 2003, and further segments stocks by quality of
earnings and valuation, the lowest quartile of stocks as measured by quality of
earnings stocks as well as the highest quartile of stocks as measured by most
over-valued, all returned more than 40%. Approximately half of the
underperformance over the past twelve months was the result of our investment
process not working particularly well in this type of environment. The other
half of the underperformance was due to the implementation and/or stock
selection short comings.
The Sector based models can be compared to target marketing. In order to reach
as many people in the country, a commercial during the Superbowl or Indianapolis
500 might be implemented. If one is trying to reach a population in a given
metropolitan area, an ad in the newspaper with the widest circulation in that
metropolitan area might be more effective, independent of the cost involved. If
one is trying to reach a specific group of individuals in a given metropolitan
area, an ad in the newspaper with the widest circulation in that metropolitan
area, might not reach those target group of individuals. The target person might
not subscribe to that paper. The target person might not find the ad in a large
newspaper. A much more targeted approach may be necessary. A database of names
and addresses that has been shown to reach that targeted group of individuals
can be built.
Many investment strategies rely on a commercial at the Superbowl. In the past,
we have tried to use the equivalent of an ad in the newspaper in the
metropolitan area. This approach has worked reasonably well until this past
twelve months. I will discuss specific stock examples of one success and two
failures in the prior Sector based, or newspaper ad approach that has been used
during most of the past twelve months. By highlighting different features of
these three stocks, I will try to reflect some of the different factors that
have been deployed in three different Sectors in the past. I will then review an
even more targeted Industry Group investment strategy that has been recently
implemented that is similar to the database of names and addresses approach
described above.
During the past twelve months, DADE, a Health Care stock, positively affected
the portfolio. Dade was purchased in the fall of 2003. Dade is a manufacturer
and distributor of in vitro diagnostics (IVD) products and consumables to
clinical laboratories. IVD tests are conducted outside the body and are used to
analyze samples of patients' bodily fluids in a clinical setting. Strong
instrument product placements in 2003 is now leading to a pull through of
increasing consumable revenues. This increasing top line, combined with a recent
debt upgrade, and thus lower debt payments, has generated positive cashflow
momentum. Dade has also been prepaying its debt earlier than anticipated. As
other investors have uncovered this de-leveraging story, positive price momentum
has developed. Recently, the stock neared full valuation versus other Health
Care Equipment and Service companies. We recently took profits in Dade after a
58% return. Dade contributed +.43% versus the benchmark in the past twelve
months.
AMKOR, an Information Technology stock, negatively affected the portfolio. Amkor
was purchased in January of 2004. Amkor is a subcontractor of semiconductor
packaging and test services. The semiconductors that Amkor packages and test for
its customers ultimately become components in electric systems used in
communications, computing, consumer, industrial, automotive, and military
applications. Amkor beat the consensus estimate for the 4th quarter and guided
up in what is normally a down Q1. This was unusual in the company's history. In
order to accommodate this unusually strong demand, there was a need for what was
supposed to be one-time CapEx to be put in place. Very short term investors
interpreted this negatively and sold the stock off 19% in Q1. At the end of
April, the company reported Q1 revenues of $464M versus consensus of $473M and
EPS of $.07 versus consensus of $.09. Management was not able to explain why
wireless revenues were weak when the overall wireless industry was very strong.
Going forward, company guided for second quarter revenue growth of up 5% to 8%.
EPS guidance for Q2 was disappointing at a range of $.06 to $.11 versus consen-
34
<page>
sus of $.16. The EPS shortfall was the result of a vaguely described additional
increase in CapEx. This vagueness may be due to a potential acquisition of new
business. Acquisitions have been part of Amkor's past. In the time following the
last three acquisitions, the stock has underperformed the overall market as well
as the Semiconductor Industry Group. Additionally, there was a large increase in
litigation costs. While the company expressed confidence in a strong second half
2004, it did not give any specific guidance on how it planned to accomplish this
objective. The need to buy growth in a somewhat low margin business in the first
place, combined with vague and inconsistent guidance has led us to sell the
stock at a 61% loss. The stock is currently trading near where we sold it and
has subsequently slightly underperformed the overall market as well as the
Semiconductor Industry Group. Amkor contributed -1.13% versus the benchmark in
the past 12 months.
DIAMOND OFFSHORE, an Energy stock, negatively affected the portfolio. Diamond
Offshore was purchased in the spring of 2003. Diamond Offshore engages
principally in the contract drilling of offshore oil and gas wells. The
company's large, diverse fleet, which includes some of the most
technologically-advanced rigs in the world, enables it to offer a range of
services worldwide in various markets, including the deep water, harsh
environment market. Diamond Offshore had been buying back stock, paying down
debt, and was attractive versus other Energy companies on a dividend yield and
price to book basis. In the fall of 2003, cashflow from operations started to
dip, leading to a halving of the quarterly dividend. Diamond Offshore was no
longer attractive on a dividend yield basis and the stock was sold for an 8%
loss. Diamond Offshore dramatically underperformed the Energy Sector. Diamond
Offshore contributed -0.47% versus the benchmark in the past 12 months.
Going forward, the Fund strategy will continue to involve segmenting stocks into
different groups, and modeling the drivers of performance in each group. The
grouping process has now been significantly refined. Stocks are now grouped into
S&P Industry Groups and in some cases Industries for Sectors where there is only
one Industry Group, such as Energy. This new strategy allows for even deeper
fundamentally based information to be incorporated into the investment process.
Using the previous example of Amkor, it will no longer be compared with other
Technology companies at the Sector level. It will be compared with other
Semiconductor companies at the Industry Group level.
In total, 32 different Industry Group or Industry models have been constructed
based on backtested results. This new Industry Group based strategy would have
outperformed the benchmark by approximately 3% over the past twelve months. The
average outperformance of the Industry Group models, over the past thirteen
years is approximately 8%, more than double the Sector based models. The
Industry Group models are also more consistent, or stable. The "worst" rolling
twelve month holding period of the Industry Group based approach led to an
"outperformance" of more than 1% versus the Russell Midcap benchmark during the
past thirteen years. These additional models were implemented in April and May
of 2004. While past model results are not a guarantee of future performance, we
are very encouraged about these enhancements.
We appreciate your interest in the Fund and look forward to better results based
on the equity market reverting to emphasis on the fundamentally based discipline
used in our investment process.
/s/Kevin W. Shea /s/Chad Deakins
Kevin Shea, CFA Chad Deakins, CFA
Co-Portfolio Manager Co-Portfolio Manager
35
<page>
T Shares
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------------------
18.70% -1.78% 0.99% 7.63% 7.24% 105.78%
- --------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Mid-Cap Russell
Equity Fund, Midcap
T Shares Index
5/31/94 10,000 10,000
5/95 11,256 11,583
5/96 14,131 14,889
5/97 16,142 17,462
5/98 19,554 22,234
5/99 19,869 24,237
5/00 23,664 27,451
5/01 22,026 28,804
5/02 19,694 27,762
5/03 17,580 26,318
5/04 20,868 33,471
A Shares
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- --------------------------------------------------------------------
18.16% -2.21% 0.54% 7.14% 6.74% 96.17% Without Load
- --------------------------------------------------------------------
813.70% -3.44% -0.23% 6.74% 6.34% 88.81% With Load
- --------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Mid-Cap Russell
Equity Fund, Midcap
A Shares Index
5/31/94 9,625 10,000
5/95 10,776 11,583
5/96 13,463 14,889
5/97 15,315 17,462
5/98 18,464 22,234
5/99 18,680 24,237
5/00 22,145 27,451
5/01 20,520 28,804
5/02 18,262 27,762
5/03 16,237 26,318
5/04 19,186 33,471
L Shares
Average Annual Total Returns
(periods ended May 31, 2004)
- -------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -------------------------------------------------------------------
17.51% -2.82% -0.07% 5.85% 66.61% Without CDSC
- -------------------------------------------------------------------
15.51% With CDSC
- -----------------
[Line Graph omitted] Plot points are as follows:
STI Classic Mid-Cap Russell
Equity Fund, Midcap
L Shares Index
6/30/95 10,000 10,000
5/96 11,839 12,436
5/97 13,385 14,585
5/98 16,035 18,571
5/99 16,125 20,244
5/00 19,006 22,929
5/01 17,508 24,059
5/02 15,488 23,188
5/03 13,674 21,983
5/04 16,069 27,957
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
36
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STI CLASSIC MID-CAP VALUE EQUITY FUND
-------------------------------------
The primary emphasis of the STI Classic Mid-Cap Value Equity Fund (the "Fund")
is capital appreciation and income. The Fund seeks to achieve this goal through
investing within mid-cap companies with market capitalizations between $1 and
$12 billon that are believed to be undervalued. Our philosophy is that superior
returns can be achieved by investing in dividend-paying companies that are
trading at a valuation discount to their history, their peers or to the market.
The Fund utilizes a disciplined, "bottoms-up" approach of seeking out
undervalued companies that display characteristics of financial strength. This
examination is centered on traditional financial statement analysis. The Fund
attempts to identify those companies with improving fundamentals and/or some
catalyst that will increase the likelihood of the stock's value being realized.
It is important to note that the Fund also employs an active sell discipline
should a stock's dividend policy, valuation or fundamentals change.
For the trailing 12-month period ending May 31, 2004, the Russell Midcap Value
Index performed extremely well, returning 27.19% with strong performance across
all sectors, most notably Technology, Industrials and Consumer Discretionary.
However, the largest contributing sector was Finance due to its heavy 32% plus
weighting in the index and it's approximate 26% return for the period. The
current market rally began in the first quarter of 2003 and was fueled by rising
corporate profits, a very accommodative monetary and fiscal policy, and
improving investor confidence.
The Fund's TShares achieved a total return of 27.71% over the 12-months ending
May 31, 2004. In the context of our expectations, this return was satisfactory.
This performance can be attributed primarily to the overweight in the
Industrials sector. One of the best performers in the Industrials sector was
Empresa Brasileira de Aeronautica ("Embraer"), a regional jet manufacturer based
in Brazil. The stock was up 75% over the last twelve months. This stellar
performance was due primarily to Embraer receiving multiple orders for their
newest regional jet design, the ERJ 190. The demand for the ERJ 190 is strong
due to the improved efficiency it offers to the airlines which operate the
aircraft.
Another favorite pick for the Fund was Brink's, a provider of business and
personal security services. Brink's was up 96% over the last twelve months due
to the company's selling its non-core assets and using the proceeds to fund a
legacy liability. Therefore, the stock's appreciation is a result of the market
focusing on the true value of the core security operations.
Stock selection was satisfactory across most sectors although the Fund could
have done a better job of asset allocation and stock selection in the Finance
sector. The underweight in Finance was not driven by a lack of confidence in the
fundamentals of banks, brokers or insurance companies, but by a lack of
confidence in the fundamentals and valuations of the REIT (Real Estate
Investment Trust) sector.
Over the past year of low interest rates and low inflation, stocks have
performed well. Looking ahead, the stellar performance of the stock market is
now being tempered by many forces. These forces include such things as the
threat of inflation, high valuations, rising interest rates, high oil prices,
the presidential elections, and geo-political uncertainty. In this type of
environment we believe that our process, which uncovers higher quality companies
with active dividend policies, further positions the Fund to continue to perform
well.
We thank you for your participation in the STI Classic Mid-Cap Value Equity Fund
and as always we will do our best to produce the excellent results that our
investors have come to expect and deserve.
/s/Donald A. Wordell
Donald A. Wordell
Portfolio Manager
38
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T Shares(1)
Average Annual Total Returns
(periods ended May 31, 2004)
- -----------------------------------------------
Annualized Cumulative
Inception Inception
One Year to Date to Date
- -----------------------------------------------
27.71% 5.14% 13.34%
- -----------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Mid-Cap Russell
Value Equity Fund, Midcap
T Shares Index
11/30/01 10,000 10,000
5/02 10,965 11,212
5/03 8,876 10,570
5/04 11,336 13,444
A Shares(2)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
16.73% Without Load
- --------------
12.30% With Load
- --------------
[Line Graph omitted] Plot points are as follows:
STI Classic Mid-Cap Russell
Value Equity Fund, Midcap
A Shares Index
10/31/03 9,625 10,000
5/04 10,945 11,107
L Shares(1)
Average Annual Total Returns
(periods ended May 31, 2004)
- ------------------------------------------
Annualized Cumulative
Inception Inception
One Year o Date to Date
- ------------------------------------------
27.06% 4.50% 11.62% Without CDSC
- ------------------------------------------
25.06% With CDSC
- ---------------
[Line Graph omitted] Plot points are as follows:
STI Classic Mid-Cap Russell
Value Equity Fund, Midcap
L Shares Index
11/30/01 10,000 10,000
5/02 10,924 11,212
5/03 8,785 10,570
5/04 11,163 13,444
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
(1) T Shares and L Shares were offered beginning on November 30, 2001.
(2) A Shares were offered beginning on October 27, 2003.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
39
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STI CLASSIC SMALL CAP GROWTH STOCK FUND
---------------------------------------
The STIClassic Small Cap Growth Stock Fund's (the "Fund") investment philosophy
is based on the premise that a portfolio of small cap stocks with positive
earnings trends, reasonable valuation, and strong business fundamentals will
provide superior returns over time. Fund management believes in executing a
disciplined and objective investment process and controlling risk through a
broadly diversified portfolio. In selecting stocks for the Fund, the management
team looks for companies with strong current and projected earnings growth,
improving profitability trends, a strong balance sheet, and high quality
earnings. In addition, the business fundamentals of each company are rigorously
scrutinized to determine the sustainability of a company's earnings growth
prospects. Lastly, the Fund focuses on those companies that have the best
combination of the above characteristics and purchases them at reasonable
valuations.
If the last fiscal year ending May 2003 represented the inflection point for the
stock market, then fiscal year 2004 was the inflection point for the economy.
That makes sense, since the stock market tends to discount good or better
economic news on the horizon. Strong corporate profit reports, an improving
economic backdrop, and easy monetary policy set the stage for a broad market
advance, characterized by participation from stocks across all market
capitalizations and investment styles. For most of the year, the market favored
Small Cap companies over Large Caps. But drilling down even further, the market
really rewarded companies with higher beta, lower quality, lower liquidity,
lower share prices, and lower profitability. In general, these are common
characteristics of smaller and micro-cap companies. While the size advantage was
clearly in favor of small caps, the market did not distinguish materially
between the Growth and Value styles among Small Cap stocks.
For the year ending May 31, 2004, the Fund's T Shares returned 33.31% versus the
30.13% return for the S&P Small Cap 600/BARRA Growth Index, outpacing the small
cap growth benchmark. By comparison, the S&P 500 Index of large cap stocks was
up 18.33% for the year, highlighting the small cap advantage during this period.
The Fund's one year return (T Shares) was well ahead of the Lipper Small Cap
Growth Funds Classification return of 26.96%, ranking it in the 18th percentile
for the period within the small cap growth peer group. For the three year period
ending May 31, the Fund's annualized return of 4.06% was well ahead of the -1.0%
return for the Lipper average, ranking it in the 17th percentile for the period.
Strong stock selection across the entire portfolio was the dominant factor
leading to the Fund's out-performance relative to the small cap growth
benchmark. Despite the market's bias toward lower quality and lower
profitability companies, the Fund still managed to post solid results. We have
always focused on profitable companies demonstrating growth in earnings, sales
and cash flow, and this year was no exception. One of the key underlying factors
to our stock selection success was our focus on companies with improving
profitability metrics, like operating margins, return on equity, and cash flow
return on investment. Some of our most successful companies for the year fit
this description, such as GEVITY HR, TRANSACT TECHNOLOGIES, SONIC SOLUTIONS, and
DITECH COMMUNICATIONS.
Also, more modestly impacting results was the Fund's position within stocks
under $500 million in market cap. While not a conscious decision, at May 31 year
end, roughly 25% of the companies in the Fund had market caps under $500
million. The bottom-up stock selection process identified these companies
because of their combination of strong earnings trends, improving profitability,
solid fundamentals, and reasonable valuation. Many smaller or micro-cap
companies possessed the best combination of growth and value in our universe.
For example, the Fund purchased SONIC SOLUTIONS in May 2003 at a price/earnings
ratio of 14 with a sales growth rate of 70% and projected earnings growth of
70%. At the time of purchase, the company had a market cap of $118 million.
After more than a three-fold move, the company's market cap has risen to $450
million. This company was truly an example of buying growth at a discount or
value price.
With regard to stock selection by sector, those sectors within the Fund that
performed best were Industrials, up 42%, Materials, up 46%, Consumer Staples, up
79%, Consumer Discretionary, up 41%, Health Care up 37%, and Finance up 32%. The
Technology sector, up a lowly 30%, actually hindered performance as the sector
lagged in the later stages of the fiscal year. The Fund's stock selection within
each sector outperformed the corresponding sector for the index benchmark,
except for the Energy sector. The most significant contributors to relative
performance or those sectors that had the most positive stock selection were
Industrials, Financials, and Consumer Staples. These sectors made up 3.5% of the
excess return versus the benchmark with the heavily weighted Industrials sector
contributing more than half.
Looking at individual companies that helped make money for our shareholders, we
can point to a number of success stories. The following are those that had the
most significant impact on performance over the past year: SONIC SOLUTIONS, JOS
A. BANK CLOTHIERS, NAM TAI ELECTRONICS, GEVITY HR, ULTIMATE SOFTWARE GROUP,
CYPRESS SEMICONDUCTOR, SCHNITZER STEEL, TRANSACT TECHNOLOGIES, AMERICAN
HEALTHWAYS, R&G FINANCIAL, and MARTEK BIOSCIENCES. Making a return appearance
from last year's annual report is Jos A. Bank Clothiers, the men's retail
clothier. The company continues to be one of the top growth stories in the
retail sector and was able to grow its sales and earnings at rates of 27% and
67%, respectively, over the past
40
<page>
year. The company has been able to leverage the sales of its larger store base
to expand operating margins from 8.3% to 11.3%. The stock has been volatile over
the past year due to short sellers creating controversy surrounding its
inventory management strategy. However, the company's fundamentals have remained
solid, as earnings estimates for the current year have increased from $1.37 to
$2.05. As a result, the stock increased 86% over the past year despite the
volatility. We remain confident in management's strategy and execution and like
the valuation at roughly 14 times earnings.
TRANSACT TECHNOLOGIES has been one of the Fund's top performing companies since
its inclusion in the portfolio last fall 2003. The company designs and
manufactures specialty, transaction-based printers for the gaming and lottery,
retail point-of-sale, and branch banking markets. In a development agreement
with Hewlett Packard, the company's printing technology, which is cheaper,
faster, and quieter, has become the standard for the gaming industry and has
enabled the company to penetrate and gain share in the other two markets it
serves. In addition, the company has begun to generate a higher margin,
recurring revenue stream on its product sales, providing the maintenance service
and the replacement cartridges to its customers. Earnings estimates for 2004
have risen from $0.41 to $0.53, while revenues have risen 70% for the past 3
quarters, and the stock price has risen roughly 170% from original purchase.
GEVITY HR provides human resources outsourcing solutions to small and
medium-sized businesses. With under-utilized capacity on its human resources
platform, the company can layer on additional business at minimal cost with high
incremental margins. In addition, the company has the ability to raise prices,
as their product had been priced well below that of its competition. And last,
the company benefits from an improving economy, small business creation, and
higher employment levels. The leverage of the company's business model and
recurring revenue stream can be seen from the substantial increase in 2004
earnings estimates from $0.53 to $1.05 over the past year.
MARTEK BIOSCIENCES has a patented process of producing nutritional oils from
micro-algae. These nutritional oils are comprised of fatty acid components that
promote mental, cardiovascular, and nervous system development and health. The
company's product is primarily being used in infant formula, but the potential
for additional food additive applications is extensive. Currently, Martek is
selling its product as fast as it can produce it, as it is capacity constrained.
The company has been working to increase capacity in order to meet current
demand from infant formula manufacturers and to sell into new markets. With a
market all to itself, the company is projected to produce 70% revenue growth
through 2005.
In the latter stages of the year, we saw a shift in the underlying trends
driving the market. No longer were smaller cap, lower quality, and lower
profitability companies leading the market. While a new definitive trend does
not appear to have developed, history suggests that following strong broad
market advances driven by liquidity, the stock market subsequently becomes more
selective. We may very well be entering the proverbial "stock-picker's" market,
where earnings growth, balance sheet quality, high profitability, and valuation
in tandem are paramount for stock selection success.
Our investment approach with a focus on all the aforementioned factors should
benefit in such an environment. Specifically, with regard to stock selection,
Fund management will continue to focus on companies demonstrating accelerating
earnings and sales momentum and positive estimate revisions. In addition,
companies should demonstrate improving profitability trends, strong organic
(non-acquisition) growth, low-debt balance sheets, and a history of wealth
creation for its shareholders. Additionally, Fund management will focus on the
fundamental drivers and catalysts for continued business success that will drive
sustainable earnings and revenue growth. And last, valuation analysis, even for
growth investors, is absolutely critical to evaluate a stock's risk/reward
potential. With regard to portfolio construction, Fund management will adhere to
our stated objectives of controlling risk through broad diversification and
maintaining an equal-weighted portfolio approach. As such, this includes
trimming or taking profits more readily in oversized positions and a constant
re-evaluation of the risk/reward potential of successful stocks and top
holdings. Lastly, with regard to sell discipline, this is a daily task that Fund
management focuses on as much as, or more than, the stock selection decision.
Despite our focus and best efforts, there is always room for improvement in the
execution of the discipline. The overall combined effect of these efforts is to
maintain a portfolio of companies, on an ongoing basis, that exhibit a strong
earnings trend profile, high profitability characteristics, strong fundamentals,
and reasonable valuation.
/s/Mark D. Garfinkel
Mark D. Garfinkel, CFA
Portfolio Manager
41
<page>
T Shares
Average Annual Total Returns
(periods ended May 31, 2004)
- -------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -------------------------------------------------------------------
33.31% 4.00% 9.21% 15.57% 126.33%
- -------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Small Cap S&P Small Cap
Growth Stock Fund, 600/BARRA Growth
T Shares Index
10/31/98 10,000 10,000
5/99 12,070 11,226
5/00 15,358 13,867
5/01 16,637 13,474
5/02 15,714 13,857
5/03 14,064 12,901
5/04 18,749 16,788
A Shares(1)
Average Annual Total Returns
(periods ended May 31, 2004)
- -----------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -----------------------------------------------------------------
32.80% 3.71% 8.86% 15.24% 122.75% Without Load
- -----------------------------------------------------------------
27.86% 2.40% 8.03% 14.46% 114.39% With Load
- -----------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Small Cap S&P Small Cap
Growth Stock Fund, 600/BARRA Growth
A Shares Index
10/31/98 9,625 10,000
5/99 11,618 11,226
5/00 14,758 13,867
5/01 15,922 13,474
5/02 14,989 13,857
5/03 13,375 12,901
5/04 17,762 16,788
L Shares
Average Annual Total Returns
(periods ended May 31, 2004)
- ------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- ------------------------------------------------------------------
31.90% 3.00% 8.09% 14.39% 113.58% Without CDSC
- ------------------------------------------------------------------
29.90% With CDSC
- --------------
[Line Graph omitted] Plot points are as follows:
STI Classic Small Cap S&P Small Cap
Growth Stock Fund, 600/BARRA Growth
L Shares Index
10/31/98 10,000 10,000
5/99 12,004 11,226
5/00 15,119 13,867
5/01 16,206 13,474
5/02 15,153 13,857
5/03 13,425 12,901
5/04 17,708 16,788
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
(1) A Shares were offered beginning on December 12, 1999. A Shares performance
for the periods prior to December 12, 1999 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the A Shares. If it had,
performance would have been lower than that shown.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
42
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STI CLASSIC SMALL CAP VALUE EQUITY FUND
---------------------------------------
The STI Classic Small Cap Value Equity Fund's ("the Fund") primary goal is
income generation and capital appreciation. The Fund seeks to achieve these
goals by investing in small-capitalization ($50 million to $2 billion)
securities that are perceived to be undervalued and place an emphasis on paying
a dividend. The Fund's investment philosophy is based on our belief that
dividends are not only an important element of total return, but are a solid
indicator of a company's future earnings potential. The Fund utilizes a strict
process for constructing the portfolio. The "bottoms-up" approach seeks
dividend-paying stocks that are trading at the lower end of their historical
valuations and also identifies companies that display characteristics of
financial strength. The next step in the process is to identify a catalyst or
fundamental change that will assist the stock in realizing its true value. This
purchase process allows the Fund to maintain a strict and active sell
discipline. The Fund manager is very disciplined and dedicated to minimizing
risk by continuously monitoring equity positions to swiftly address issues that
arise.
For the twelve month period ending May 31, 2004, the Russell 2000 Value Index
(the "Index") advanced 30.81%. This large gain was a result of numerous events
such as the removal of Saddam Hussein from power in Iraq, rising investor
expectations of the economy and a very accommodating Federal Reserve. The
combination of these positive events produced only a short-lasting effect on
investors and the market. Fears of inflation and rising interest rates have
begun to penetrate the vibrant enthusiasm that was prevalent at the start of the
year. Higher energy prices have remained and placed an extra burden on
consumers. Adding to an already difficult time in the market, uncertainties due
to the upcoming presidential elections, coupled with reservations about the
economy stalling, impact the current environment. China, a major global economic
driver, has also experienced a slowing economy.
The Fund's T Shares maintained its record of success, returning 33.56% over the
12-month period ending May 31, 2004. The Fund benefited from superior stock
selection in Industrials and Information Technology. The Fund's investment in
BRINK'S (BCO), a leading security services company, and EMPRESA BRASILEIRA DE
AERONAUTICA (ERJ), an emerging regional jet manufacturer, enabled the Fund to
outperform the Index in the Industrials sector for the twelve month period
ending May 31, 2004. The Fund's investment in AUTODESK (ADSK), an innovative
design software and digital content company, and HARRIS (HRS), an international
communication equipment company; were examples of superior stock selections
which contributed to the Fund's excess return versus the index in Information
Technology. Additionally, the Fund benefited from underweight positions in the
Finance and Utilities sector.
The Fund continues to be cautious on valuations in the Small Cap Value equity
arena. Large inflows of capital from non-traditional Small Cap Value investors
such as hedge funds, large cap investors and performance chasers are skewing
valuations to the upside for most securities in the universe. This phenomenon
has, in turn, caused lower quality names to increase in price, making stock
selection an even more important component of performance. These non-traditional
investors may also place undo downside pressure on valuations when they
eventually decide to exit the Small Cap realm. The Fund will continue to pursue
and take advantage of investing in international companies as they frequently
offer a better risk/return trade off than domestic companies. We continue to
remain cautiously optimistic on the small cap arena and all of the companies the
Fund owns.
We thank you for you continued interest in the STI Classic Small Cap Value
Equity Fund and look forward to continued success.
/s/Brett Barner
Brett Barner, CFA
Portfolio Manager
44
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T Shares(1)
Average Annual Total Returns
(periods ended May 31, 2004)
- -------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -------------------------------------------------------------------
33.56% 15.03% 14.53% 15.24% 298.68%
- -------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Small Cap Russell 2000
Value Equity Fund, Value
T Shares Index
8/31/94 10,000 10,000
5/95 11,432 10,471
5/96 15,171 13,273
5/97 20,138 16,010
5/98 24,888 20,280
5/99 20,229 18,347
5/00 19,274 18,300
5/01 26,194 23,684
5/02 31,448 27,336
5/03 29,848 25,285
5/04 39,865 33,076
A Shares(2)
Average Annual Total Returns
(periods ended May 31, 2004)
- -----------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -----------------------------------------------------------------
32.92% 14.85% 14.42% 15.18% 296.78% Without Load
- -----------------------------------------------------------------
27.98% 13.38% 13.55% 14.74% 282.21% With Load
- -----------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Small Cap Russell 2000
Value Equity Fund, Value
A Shares Index
8/31/94 9,625 10,000
5/95 11,004 10,471
5/96 14,602 13,273
5/97 19,383 16,010
5/98 23,955 20,280
5/99 19,471 18,347
5/00 18,552 18,300
5/01 25,212 23,684
5/02 30,269 27,336
5/03 28,728 25,285
5/04 38,186 33,076
L Shares(3)
Average Annual Total Returns
(periods ended May 31, 2004)
- ------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- ------------------------------------------------------------------
32.20% 13.86% 13.34% 14.38% 270.74% Without CDSC
- ------------------------------------------------------------------
30.20% With CDSC
- --------------
[Line Graph omitted] Plot points are as follows:
STI Classic Small Cap Russell 2000
Value Equity Fund, Value
L Shares Index
8/31/94 10,000 10,000
5/95 11,432 10,471
5/96 15,171 13,273
5/97 20,138 16,010
5/98 24,627 20,280
5/99 19,819 18,347
5/00 18,700 18,300
5/01 25,114 23,684
5/02 29,865 27,336
5/03 28,043 25,285
5/04 37,073 33,076
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
*For periods prior to January 1997, when the Fund began operating, the
performance quoted reflects performance of the Adviser's similarly managed
collective investment fund, adjusted to reflect fees and expenses of the
Fund's T Shares. The collective investment fund was not a registered mutual
fund, and therefore was not subject to certain investment and tax
restrictions which may have adversely affected performance.
(1) T Shares were offered beginning January 31, 1997.
(2) A Shares were offered beginning on October 9, 2003. AShares' performance for
the periods prior to October 9, 2003 reflects the performance of the Fund's
T Shares. The performance of the TShares has not been adjusted to reflect
the higher internal operating expenses of the AShares. If it had,
performance would have been lower than that shown. The cumulative total
return of the AShares from its inception date of October 9, 2003 to May 31,
2004 was 15.51%.
(3) L Shares were offered beginning on June 6, 1997. L Shares' performance for
periods prior to June 6, 1997 reflects performance of the T Shares. T Shares
have lower expenses than L Shares, which results in higher performance for L
Shares than it would have been had the expenses of that class been applied.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
45
<page>
STI CLASSIC STRATEGIC QUANTITATIVE EQUITY FUND
----------------------------------------------
The STIClassic Strategic Quantitative Equity Fund ("the Fund") strives, through
the use of disciplined quantitative modeling, to objectively and consistently
identify those companies with the most attractive earnings growth prospects and
valuation characteristics within each sector. The evaluation characteristics
vary by sector. For some sectors, attractive stocks are selected based solely
upon growth characteristics. In other sectors, a combination of growth and
valuation characteristics is used to identify attractive stocks. The Fund
invests in companies of all sizes provided they have growth potential.
The Adviser believes that companies with higher earnings growth prospects will
tend to have more highly valued share prices. Companies producing sustained
accelerating rates of earnings growth will often generate increasing stock
valuations. Companies producing sustained decelerating rates of earnings growth
may generate decreasing stock valuations. The Adviser calls this cycle of
accelerating earnings growth with increasing stock valuation and decelerating
earnings growth with decreasing stock valuation the earnings-valuation cycle.
The Adviser believes that earnings-valuation cycles dictate stock performance,
earnings-valuation cycles differ among market sectors, and diversification
controls risk. The Adviser uses quantitative modeling techniques to evaluate and
select the common stock of companies based upon this belief in the
earnings-valuation cycle.
The Fund's T Shares were launched on August 7, 2003. The Fund's A Shares were
launched on October 9, 2003. The Fund's L Shares were launched on October 8,
2003. Since the Fund launched T Shares on August 7, 2003, the S&P 500 Index, the
Fund's primary benchmark, appreciated 16.7% including reinvested dividends, the
S&P Mid-Cap 400 Index appreciated 24.5%, and the S&P Small Cap 600 Index
appreciated 26.2%. The S&P 500 Index essentially went straight up from the time
of the Fund's inception until late January 2004. Throughout 2003, the market
increasingly rewarded news on an improving economy and better corporate profits.
Mid-Cap and Small-Cap stocks appreciated more than the Large-Cap stocks as the
market's risk-aversion to smaller companies decreased with the improving economy
and better corporate profits. From late January 2004 until early March 2004, the
S&P 500 Index was flat. From early March 2004 until May end 2004, the S&P 500
Index sold off 5%, regained the 5% lost ground, sold off 5% again, and then
regained some of the lost ground. In 2004, the market struggled with Iraqi war
concerns, higher oil prices, increasing inflation, and the outlook for higher
interest rates.
Since August 7, 2003, the S&P 500 Index performance across sectors was mixed
with generally more cyclical sectors outperforming more stable sectors. Energy
stocks performed the best appreciating 23.2%, followed by Information Technology
stocks, appreciating 19.9%. Health Care stocks appreciated the least, up only
7.3%, weighed down by concerns over increasing government price regulation,
particularly in pharmaceuticals.
Since inception of the T Shares, the Fund's T Shares have returned 23.43%
including dividends. The Fund's T Shares have outperformed the S&P 500 Index,
the primary benchmark, by 6.8% since inception of the T Shares. Lipper's
Multi-Cap Core Funds' average appreciated 17.4% since inception of the T Shares.
The Fund's T Shares have outperformed the Lipper Multi-Cap Core Funds' average
by 6.1% since inception of the T Shares. Out of 610 funds in the Lipper's
Multi-Cap Core Funds' group, the Fund's T Shares ranked 36th for a 6th
percentile rank.
Strong stock selection within all sectors drove the Fund T Shares' excess
return. While all sectors contributed positively, stock selection within Finance
and Consumer Discretionary were particular standouts. Sector allocation
detracted slightly from performance. Stock selection with Large-Cap stocks
produced approximately 75% of the excess return.
/s/Edward E. Best
Edward Best, CFA
Portfolio Manager
46
<page>
T Shares(1)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
23.43%
- --------------
[Line Graph omitted] Plot points are as follows:
STI Classic Strategic
Quantitative Equity Fund, S&P 500
T Shares Index
8/31/03 10,000 10,000
5/04 11,567 11,262
A Shares(2)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
8.48% Without Load
- --------------
4.43% With Load
- --------------
[Line Graph omitted] Plot points are as follows:
STI Classic Strategic
Quantitative Equity Fund, S&P 500
A Shares Index
10/31/03 9,625 10,000
5/04 10,208 10,773
L Shares(3)
Average Annual Total Returns
(periods ended May 31, 2004)
- --------------
Cumulative
Inception
to Date
- --------------
5.34% Without CDSC
- --------------
3.34% With CDSC
- --------------
[Line Graph omitted] Plot points are as follows:
STI Classic Strategic
Quantitative Equity Fund, S&P 500
L Shares Index
10/31/03 10,000 10,000
5/04 10,362 10,773
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
(1) T Shares were offered beginning on August 7, 2003.
(2) A Shares were offered beginning on October 8, 2003.
(3) L Shares were offered beginning on October 13, 2003.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
47
<page>
STI CLASSIC TAX SENSITIVE GROWTH STOCK FUND
-------------------------------------------
The STI Classic Tax Sensitive Growth Stock Fund's (the "Fund") philosophy is to
invest in companies with high and stable earnings growth and/or companies with
improving earnings growth. Emphasis is placed on financially strong companies
(large and mid-sized) which are market leaders in their respective industry
segments as demonstrated by revenue growth, market shares and levels of
profitability. The key elements of our philosophy are that stocks of quality
companies do well over time, good fundamental analysis identifies the
sustainability of a company's earnings growth rate, risk control is essential
and an active process, and after-tax returns are important. The Fund's approach
for controlling risk is to: (1) have a significant exposure to companies with
stable earnings growth as well as companies whose earnings growth is more
exposed to the growth of the economy as a whole; (2) to be diversified among the
major industry sectors; (3) to have representation in very large, and medium
sized companies; and (4) to have a portfolio of 50-70 stocks so as to reduce the
stock market risk associated with the misfortunes of specific companies. In
addition, the Fund manager employs an active sell discipline to weed out
companies whose future earnings growth rate has deteriorated or has become
significantly more uncertain and also to reduce holdings which have been so
successful that they have become a major holding in the Fund.
The stock market, as measured by the S&P 500 Index, advanced strongly from the
May 31, 2003 level. The Index began the year at 963.59 and ended 16.3% higher at
1120.68. When dividends are included, the total return for the Index was 18.33%.
The last 12 months included the end of the bear market, the cessation of formal
hostilities in Iraq and the end of the recession. In addition, consumer
confidence increased and company earnings improved by more than 20%. From a
stock market standpoint, those companies whose earnings and stock prices fell
the most during the bear market had the best stock price recoveries as it became
evident that they were once again viable concerns. Stock prices of "Blue Chip"
companies that survived the recession without much, if any, earnings decline
were also up in price over the last 12 months, but not nearly as much as the
stock prices of more economically sensitive companies.
Against this backdrop, the Fund produced a disappointing result. For the 12
months ended May 31, 2004, the Fund's TShares returned 12.18% compared to 18.33%
for the Fund's benchmark index, the S&P 500 Index. This is a large shortfall and
warrants a thorough examination. The first question we asked was, "What would
the return have been if there weren't any changes made in the Fund?" A Fund
manager's worst nightmare is that changes to the Fund result in lower returns
than if nothing at all had been done. Fortunately, this was not the case as the
buys and sells made during the course of the year modestly added to the Fund's
return. We next compared the ten worst performing stocks with the ten best
performing stocks to see if we only had a few winners or if the winners were
swamped by losers. The ten worst stocks last year averaged a -15.1% change in
price while the ten best averaged an impressive gain of 49.8%. So, when the
worst and best are averaged, the price impact was 17.3%, slightly higher than
the 16.3% price increase of the S&P 500 Index. What did happen last year was
that the underlying strategy of the Fund, investing in financially strong,
large-cap growth companies, simply did not work well. The table below shows the
price change of those companies held at the beginning of the year which had
market caps of $100 billion or higher.
May 31, 2004
Market Cap Stock Price Change 12 Months
Company ($ in billions) ended May 31, 2004
- ------- -------------- ----------------------------
General Electric $317 8.4%
Exxon Mobil 284 18.8%
Microsoft 283 6.6%
Pfizer 269 13.9%
Wal-Mart Stores 241 5.9%
Citigroup 239 13.2%
American International Group 191 26.6%
Bank of America 170 12.0%
Johnson & Johnson 165 2.5%
International Business Machines 151 0.6%
Procter & Gamble 139 17.4%
------
AVERAGE PRICE GAIN 11.4%
It is fair to say that these eleven companies can be described as "Blue Chip"
stocks. One of the reasons they are considered "Blue Chip" is that their
earnings rarely go down. For example, in the recessionary year of 2001 when
corporate earnings were down 31%, the earnings of these 11 companies were
actually up an average of 8%. So, perhaps it is not too surprising that the
stock prices of these types of companies did not rebound as much as the stock
prices of companies whose earnings plummeted during the recession and then in
the subsequent bear market of 2002.
48
<page>
In terms of positioning, a few industry shifts have been made over the last 12
months. The Energy weight in the Fund has doubled from 3% to 6% as it became
evident that the trend in energy prices was rising. The exposure to the
Industrial sector was also increased about 3% as economic sensitive companies
began to exhibit strong growth in revenues and earnings. On the de-emphasis
side, the Health Care weighting was reduced by 4% as it looked like the
Government was going to play a more active role in keeping the lid on
pharmaceutical price increases.
Going forward, we want to emphasize our conviction that investing in high
quality growth companies is a successful long term strategy. We identify
companies that are consistently growing their earnings and/or improving their
earnings trends and try to buy them at reasonable prices. Just as importantly,
we want to disengage from companies whose long-term earnings growth is slowing
and/or where the uncertainty about their future earnings growth rate has risen
to an unacceptable level. We appreciate your continued confidence in the Fund
and look forward to the future with confidence.
/s/Parker W. Thomas, Jr.
Parker W. Thomas, Jr.
Portfolio Manager
49
<page>
T Shares(1)
Average Annual Total Returns
(periods ended May 31, 2004)
- -------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -------------------------------------------------------------------
12.18% -4.47% -4.90% 6.82% 74.30%
- -------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Tax Sensitive
Growth Stock Fund, S&P 500
T Shares Index
12/31/95 10,000 10,000
5/96 10,767 10,967
5/97 13,971 14,194
5/98 17,311 18,550
5/99 22,402 22,451
5/00 24,750 24,803
5/01 19,995 22,187
5/02 17,386 19,114
5/03 15,540 17,573
5/04 17,432 20,794
A Shares(2)
Average Annual Total Returns
(periods ended May 31, 2004)
- -----------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- -----------------------------------------------------------------
11.93% -4.54% -4.94% 6.80% 73.92% Without Load
- -----------------------------------------------------------------
7.74% -5.75% -5.66% 6.32% 67.45% With Load
- -----------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Tax Sensitive
Growth Stock Fund, S&P 500
A Shares Index
12/31/95 9,625 10,000
5/96 10,364 10,967
5/97 13,447 14,194
5/98 16,662 18,550
5/99 21,562 22,451
5/00 23,822 24,803
5/01 19,246 22,187
5/02 16,734 19,114
5/03 14,957 17,573
5/04 16,741 20,794
L Shares(3)
Average Annual Total Returns
(periods ended May 31, 2004)
- ------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years to Date to Date
- ------------------------------------------------------------------
11.03% -5.48% -5.89% 6.11% 64.72% Without CDSC
- ------------------------------------------------------------------
9.03% With CDSC
- -------------
[Line Graph omitted] Plot points are as follows:
STI Classic Tax Sensitive
Growth Stock Fund, S&P 500
L Shares Index
12/31/95 10,000 10,000
5/96 10,767 10,967
5/97 13,971 14,194
5/98 17,311 18,550
5/99 22,309 22,451
5/00 24,401 24,803
5/01 19,506 22,187
5/02 16,779 19,114
5/03 14,836 17,573
5/04 16,473 20,794
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
*For periods prior to December 1998, when the Fund began operating, the
performance quoted reflects performance of the Adviser's similarly managed
collective investment fund, adjusted to reflect the Fund's fees and expenses.
The collective investment fund was not a registered mutual fund and therefore
was not subject to certain investment and tax restrictions which may have
adversely affected performance.
(1) T Shares were offered beginning on December 11, 1998.
(2) A Shares were offered beginning on October 14, 2003. AShares' performance
for the periods prior to October 14, 2003 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the AShares. If it had,
performance would have been lower than that shown. The cumulative total
return of the AShares from its inception date of October 14, 2003 to May 31,
2004 was 4.21%.
(3) L Shares were offered beginning on December 15, 1998. L Shares' performance
for the periods prior to December 15, 1998 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the L Shares. If it had,
performance would have been lower than that shown.
Returns shown do notreflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
50
<page>
This page left intentionally blank.
<page>
STI CLASSIC VALUE INCOME STOCK FUND
-----------------------------------
The STI Classic Value Income Stock Fund ("the Fund") invests primarily in
dividend-paying, equity securities to generate income and capital appreciation
for its investors. The Fund's investment philosophy is based upon our belief
that dividends are not only an important component of total return but also an
indication of a company's future earnings potential. The Fund employs a very
disciplined and methodical approach to portfolio construction. The "bottom-up"
process considers three key factors when making investment decisions: 1) Minimum
dividend criteria; 2) Low historical valuation; and 3) A catalyst for improving
fundamental business momentum which can cause an upward revaluation in the
individual security. Our process seeks dividend-paying stocks that are trading
at the lower end of historical valuation ranges. The companies identified for
our focused attention are in the midst of fundamental change that we expect will
reignite investor interest. They tend to exhibit "value" characteristics such as
low price-to-earnings ratios, low price-to-sales ratios and generally have
higher dividend yields.
The profits cycle was indeed in full swing over the last 12-months as increasing
profits allowed for necessary corporate capital expenditures, which jumpstarted
job growth and consumer confidence. Disposable income and consumer spending
continued to grow, all the while adding to corporate profits and completing the
positive feedback loop.
For the 12-month period ending May 31, 2004, the overall market rallied nicely,
fueled in part by increasing corporate profits and very accommodative fiscal and
monetary policies. The Fund's primary benchmark, the Russell 1000 Value Index,
advanced 19.82% during this same period with strong showings in most sectors.
The exceptions were Health Care and Telecommunications Services which posted
nominal returns and were held back by political and regulatory concerns. With
its 30%-plus weighting and approximately 22% return, the biggest contributing
sector was Finance.
The Fund's T Shares performance for the twelve month period ended May 31, 2004
was 19.58%. The strongest contributors to performance for the Fund were
Industrials and Materials where, in comparison to its benchmark, the Fund was
not only overweight but benefited from better stock selection as well. Our
affinity to stocks in these sectors derived from our "bottom-up" process which
identifies companies that have done remarkable jobs cutting costs and trimming
their respective operating structures during the last economic downturn. Thus,
they were thus primed to experience tremendous operating leverage when business
activity began picking up like it has over the past 12-months. HONEYWELL
INTERNATIONAL is a perfect example. Energized by a new management team, the
company repaired its balance sheet and reorganized its cost structure, poising
itself for turnaround in earnings growth as well as significant share buyback
activity and dividend increases. ALCOA is another example. With a great balance
sheet and seasoned management team, Alcoa has been able to position the firm to
take advantage of the improving demand for aluminum in the western world as well
as reconfigure the asset base to improve return on invested capital.
The main detractor from performance this past fiscal year was not company or
industry- specific but was macro-related. With the Federal Reserve pushing
interest rates to historic lows to spur economic recovery, many lower quality
companies benefited from cheap financing and were afforded a rare opportunity to
re-liquify their balance sheets and live another day. The types of stocks that
had the best performance this past fiscal year were low quality, high
volatility, small capitalization companies--the polar opposite of the
characteristics of the Fund's core holdings. Other under-performing areas were
Utilities and REITs (Real Estate Investment Trust). We never expected interest
rates to get as low as they did thus missing a very significant upward move in
these sectors as they followed the bond market higher.
Although profits are very strong, the stock market has stalled for the time
being. Investor confidence is being challenged by a plethora of concerns
including: rising interest rates, Iraq, oil prices, China's slowing economy and
this year's Presidential election. In this type of investment climate we believe
that higher quality companies with active dividend policies are positioned to
perform well, particularly if profit growth begins to decelerate from the high
double digit levels that the market is currently experiencing. The Fund is
overweight in Staples and Health Care, two sectors that have historically
performed well when the profits cycle decelerated. We are also maintaining our
overweights in Industrials and Materials where we like the balance sheets,
management teams and operating leverage that our companies exhibit. The Fund
continues to maintain an underweight in Finance as we move through a FED
tightening cycle and margins and book values are stressed. We feel quite
confident that the Fund is positioned to perform well in the coming months and
look forward to continuing to deliver the high quality product that our
investors deserve.
/s/Mills A. Riddick
Mills A. Riddick, CFA
Portfolio Manager
52
<page>
T Shares(1)
Average Annual Total Returns
(periods ended May 31, 2004)
- -------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- -------------------------------------------------------------------------------
19.58% 1.00% 1.02% 10.35% 11.58% 394.11%
- -------------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Value Russell S&P 500/BARRA
Income Stock Fund, 1000 Value Value
T Shares Index** Index
5/31/94 10,000 10,000 10,000
5/95 11,906 11,597 11,707
5/96 15,229 14,637 14,792
5/97 18,607 18,707 18,558
5/98 22,905 24,817 23,925
5/99 25,454 28,423 27,056
5/00 22,776 27,914 27,754
5/01 25,986 30,058 29,733
5/02 25,029 28,389 25,151
5/03 22,391 26,158 22,966
5/04 26,775 31,343 27,681
A Shares(2)
Average Annual Total Returns
(periods ended May 31, 2004)
- ----------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- ----------------------------------------------------------------------------
19.10% 0.59% 0.62% 9.93% 11.24% 372.54% Without Load
- ----------------------------------------------------------------------------
14.61% -0.68% -0.15% 9.51% 10.94% 354.71% With Load
- ----------------------------------------------------------------------------
[Line Graph omitted] Plot points are as follows:
STI Classic Value Russell S&P 500/BARRA
Income Stock Fund, 1000 Value Value
A Shares Index** Index
5/31/94 9,625 10,000 10,000
5/95 11,426 11,597 11,707
5/96 14,555 14,637 14,792
5/97 17,712 18,707 18,558
5/98 21,735 24,817 23,925
5/99 24,063 28,423 27,056
5/00 21,457 27,914 27,754
5/01 24,381 30,058 29,733
5/02 23,372 28,839 25,151
5/03 20,836 26,158 22,966
5/04 24,816 31,343 27,681
L Shares(3)
Average Annual Total Returns
(periods ended May 31, 2004)
- ------------------------------------------------------------------------------
Annualized Cumulative
Inception Inception
One Year 3 Years 5 Years 10 Years to Date to Date
- ------------------------------------------------------------------------------
18.27% -0.15% -0.12% 9.25% 10.82% 347.20% Without CDSC
- ------------------------------------------------------------------------------
16.27% With CDSC
- -------------
[Line Graph omitted] Plot points are as follows:
STI Classic Value Russell S&P 500/BARRA
Income Stock Fund, 1000 Value Value
L Shares Index** Index
5/31/94 10,000 10,000 10,000
5/95 11,906 11,597 11,707
5/96 15,063 14,637 14,792
5/97 18,213 18,707 18,558
5/98 22,176 24,817 23,925
5/99 24,374 28,423 27,056
5/00 21,571 27,914 27,754
5/01 24,343 30,058 29,733
5/02 23,170 28,389 25,151
5/03 20,491 26,158 22,966
5/04 24,235 31,343 27,681
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
*For periods prior to February 1993, when the Fund began operating, the
performance quoted reflects performance of the Adviser's similarly managed
collective investment fund. The collective investment fund was not a registered
mutual fund and therefore was not subject to certain investment and tax
restrictions which may have adversely affected performance.
**Previously, the Fund's return had been compared to the S&P 500/BARRA Value
Index, but the Adviser believes that the Russell 1000 Value Index is more
representative of the Fund's investment universe.
(1) T Shares were offered beginning on February 12, 1993.
(2) A Shares were offered beginning on February 17, 1993. A Shares' performance
for the periods prior to February 17, 1993 reflects the performance of the
Fund's T Shares. The performance of the T Shares has not been adjusted to
reflect the higher internal operating expenses of the A Shares. If it had,
performance would have been lower than that shown.
(3) L Shares were offered beginning on June 1, 1995. L Shares' performance for
the periods prior to June 1, 1995 reflects the performance of the Fund's T
Shares. The performance of the T Shares has not been adjusted to reflect the
higher internal operating expenses of the L Shares. If it had, performance
would have been lower than that shown.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
53
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
AGGRESSIVE GROWTH STOCK FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (97.1%)
COMMUNICATION SERVICES (1.5%)
Nextel Communications* 13,100 $ 303
-------
COMPUTER SOFTWARE (3.6%)
Cognizant Technology Solutions* 16,000 740
-------
CONSUMER CYCLICALS (6.8%)
Best Buy 7,400 390
Coach* 8,100 353
Tiffany 6,300 223
Walt Disney 18,600 437
-------
1,403
-------
CONSUMER DISCRETIONARY (9.3%)
Avon Products 7,400 656
Clear Channel Communications 7,400 294
Starbucks* 17,500 711
Univision Communications* 8,100 264
-------
1,925
-------
CONSUMER STAPLES (1.7%)
Fred's 5,100 107
Whole Foods Market 2,900 250
-------
357
-------
FINANCE (12.4%)
Blackrock 3,800 240
Capital One Financial 13,000 911
Investors Financial Services 22,300 872
Paychex 5,300 199
SLM 8,800 337
-------
2,559
-------
HEALTH CARE (21.0%)
Align Technology* 12,200 233
Biomet 3,600 144
Biosite* 5,600 223
Cardinal Health 3,600 244
Cephalon* 8,300 447
Forest Laboratories* 9,300 590
Genentech* 4,200 251
Gilead Sciences* 7,600 497
Johnson & Johnson 6,000 334
Martek Biosciences* 4,500 288
Medicis Pharmaceutical 5,500 233
Pfizer 10,000 353
Wilson Greatbatch Technologies* 8,500 231
Wright Medical Group* 8,100 263
-------
4,331
-------
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
PRODUCER DURABLES (1.8%)
Kla-Tencor* 6,700 $ 323
Lam Research* 1,700 42
-------
365
-------
SEMICONDUCTORS (10.1%)
Amkor Technology* 6,900 71
Broadcom, Cl A* 6,000 253
Intel 21,400 611
Omnivision Technologies* 7,100 166
Qualcomm 14,500 972
-------
2,073
-------
SERVICES (16.5%)
CNET Networks* 21,600 209
eBay* 11,100 986
InterActiveCorp* 20,000 625
Omnicom Group 6,500 519
Sohu.com* 5,700 118
Yahoo!* 30,800 944
-------
3,401
-------
TECHNOLOGY (12.4%)
Avaya* 6,400 101
Dell* 11,800 415
eResearch Technology* 11,850 300
Flextronics International Ltd.* 51,600 906
Juniper Networks* 10,100 211
Utstarcom* 20,100 626
-------
2,559
-------
Total Common Stock
(Cost $19,627) 20,016
-------
REPURCHASE AGREEMENT (3.3%)
Merrill Lynch
1.020%, dated 05/28/04, to be
repurchased in 06/01/04,
repurchase price $678,878
(collaterlaized by FHLB
obligations; total market
value $693,444) (C) $ 679 679
-------
Total Repurchase Agreement
(Cost $679) 679
-------
Total Investments (100.4%)
(Cost $20,306) 20,695
-------
54
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-0.4%)
Investment Advisory Fees Payable $ (17)
Payable to Affiliated Funds (7)
Administration Fees Payable (1)
Receivable from Adviser 6
Receivable from Distributor 3
Other Assets and Liabilities, Net (64)
-------
Total Other Assets and Liabilities (80)
-------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 2,050,154 outstanding shares
of beneficial interest 20,157
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 4,934 outstanding shares
of beneficial interest 48
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 6,528 outstanding shares
of beneficial interest 65
Accumulated net investment loss (5)
Accumulated net realized loss on investments (39)
Net unrealized appreciation on investments 389
-------
Total Net Assets (100.0%) $20,615
=======
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($20,500,987 / 2,050,154 shares) $10.00
=======
Net Asset Value and Redemption
Price Per Share -- A Shares
($49,267 / 4,934 shares) $ 9.99
=======
Maximum Offering Price Per Share --
A Shares ($9.99 / 96.25%) $10.38
=======
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($65,098 / 6,528 shares) $ 9.97
=======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
55
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
BALANCED FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (50.8%)
CAPITAL GOODS (7.3%)
3M 24,000 $ 2,029
American Power Conversion 60,400 1,093
Applied Materials* 147,500 2,944
Danaher 36,000 1,693
Deere 36,600 2,405
Emerson Electric 41,500 2,478
General Dynamics 23,500 2,247
L-3 Communications
Holdings 46,200 2,945
Northrop Grumman 23,800 2,455
Parker Hannifin 54,000 3,000
--------
23,289
--------
COMMUNICATION SERVICES (0.6%)
COX Communications, Cl A* 59,700 1,875
--------
COMPUTER SOFTWARE (3.6%)
Amdocs* 78,900 1,947
Microsoft 164,500 4,334
Oracle* 149,000 1,687
Peoplesoft* 85,500 1,529
Veritas Software* 71,800 1,910
--------
11,407
--------
CONSUMER CYCLICALS (9.7%)
Bed Bath & Beyond* 67,100 2,499
Costco Wholesale* 41,400 1,564
Home Depot 100,000 3,592
Kohl's* 20,800 989
Lowe's 44,800 2,400
Marriott International 32,000 1,579
May Department Stores 40,800 1,169
Southwest Airlines 151,500 2,350
Staples 56,500 1,558
Target 60,000 2,682
Tiffany 38,000 1,344
TJX 52,500 1,308
Wal-Mart Stores 27,000 1,505
Walgreen 80,000 2,801
Walt Disney 145,000 3,403
--------
30,743
--------
CONSUMER STAPLES (3.7%)
Avon Products 49,700 4,406
Gillette 63,900 2,754
Kimberly-Clark 36,100 2,379
Procter & Gamble 21,600 2,329
--------
11,868
--------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
ENERGY (2.0%)
Anadarko Petroleum 38,200 $ 2,083
Exxon Mobil 97,900 4,234
--------
6,317
--------
FINANCE (9.9%)
Aflac 61,400 2,493
American Express 80,100 4,061
American International Group 48,000 3,518
Bank of New York 48,400 1,455
Chubb 39,000 2,627
Citigroup 76,000 3,529
Goldman Sachs Group 23,100 2,169
MGIC Investment 31,000 2,263
Morgan Stanley 32,000 1,712
State Street 63,500 3,075
Wells Fargo 48,000 2,822
Zions Bancorporation 31,300 1,919
--------
31,643
--------
HEALTH CARE (5.7%)
Biomet 85,000 3,410
Boston Scientific* 79,800 3,535
Johnson & Johnson 56,000 3,120
Pfizer 100,000 3,534
Quest Diagnostics 17,800 1,533
St. Jude Medical* 40,700 3,104
--------
18,236
--------
SEMICONDUCTORS (1.7%)
Analog Devices 29,800 1,465
Intel 88,700 2,532
Microchip Technology 42,400 1,345
--------
5,342
--------
SERVICES (2.4%)
Career Education* 27,600 1,876
Time Warner* 189,500 3,229
United Parcel Service, Cl B 35,000 2,510
--------
7,615
--------
TECHNOLOGY (4.2%)
Agilent Technologies* 52,200 1,342
CDW 20,200 1,419
Cisco Systems* 66,500 1,473
Dell* 37,900 1,333
EMC* 185,000 2,079
Kla-Tencor* 33,900 1,633
Lexmark International* 25,100 2,368
Tellabs* 239,000 1,898
--------
13,545
--------
Total Common Stock
(Cost $146,057) 161,880
--------
56
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS (25.2%)
CAPITAL GOODS (1.2%)
Alcan
6.125%, 12/15/33 $ 1,650 $ 1,577
International Paper
6.750%, 09/01/11 785 852
Masco
5.875%, 07/15/12 755 780
Weyerhaeuser
7.950%, 03/15/25 575 643
--------
3,852
--------
COMMUNICATION SERVICES (2.0%)
British Sky Broadcasting
8.200%, 07/15/09 675 779
Comcast
6.500%, 01/15/15 750 779
Cox Communications
7.125%, 10/01/12 745 815
Liberty Media
3.500%, 09/25/06 850 849
Sprint Capital
7.625%, 01/30/11 740 822
U.S. Cellular
6.700%, 12/15/33 780 737
Univision Communications
3.500%, 10/15/07 825 814
Viacom
7.875%, 09/01/23 600 694
--------
6,289
--------
CONSUMER CYCLICALS (2.3%)
Albertson's
7.500%, 02/15/11 695 780
DaimlerChrysler
4.750%, 01/15/08 775 777
Ford Motor
7.450%, 07/16/31 910 862
General Motors
8.375%, 07/15/33 775 807
Kraft Foods
5.250%, 10/01/13 820 793
Kroger
7.800%, 08/15/07 630 702
May Department Stores
7.450%, 09/15/11 765 859
Safeway
6.150%, 03/01/06 765 804
Time Warner
6.750%, 04/15/11 710 765
--------
7,149
--------
- --------------------------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- --------------------------------------------------------------------------------
ENERGY (1.2%)
Anadarko Petroleum
3.250%, 05/01/08 $ 785 $ 763
Conoco
6.950%, 04/15/29 1,525 1,668
Kerr-McGee
5.875%, 09/15/06 750 788
Petroleos Mexicanos
9.250%, 03/30/18 650 730
--------
3,949
--------
FINANCE (15.2%)
Bank of America
6.500%, 03/15/06 1,725 1,833
Bank One
5.500%, 03/26/07 755 795
Bear Stearns
4.000%, 01/31/08 2,375 2,375
Boeing Capital
6.500%, 02/15/12 1,380 1,472
CIT Group
4.125%, 02/21/06 1,850 1,888
Citicorp Capital I
7.933%, 02/15/27 1,400 1,498
Citigroup Global Markets
6.500%, 02/15/08 1,350 1,467
Devon Financing
6.875%, 09/30/11 660 720
EOP Operating LP
8.375%, 03/15/06 675 736
First Data
3.375%, 08/01/08 910 886
First Union Institutional Capital I
8.040%, 12/01/26 600 653
Fund American
5.875%, 05/15/13 810 806
General Electric Capital
3.500%, 05/01/08 3,195 3,138
Golden West Financial
4.125%, 08/15/07 750 759
Goldman Sachs Capital I
6.345%, 02/15/34 2,400 2,256
Household Finance
5.750%, 01/30/07 1,500 1,584
International Lease Finance
3.750%, 08/01/07 2,280 2,271
JP Morgan Chase
5.250%, 05/30/07 1,465 1,528
MBNA America Bank
5.375%, 01/15/08 665 691
Merrill Lynch, Ser B, MTN
3.375%, 09/14/07 2,315 2,288
57
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
BALANCED FUND--CONCLUDED
- --------------------------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- --------------------------------------------------------------------------------
FINANCE -- CONTINUED
MetLife
3.911%, 05/15/05 $ 245 $ 249
Morgan Stanley
3.625%, 04/01/08 1,620 1,599
National Rural Utilities
3.000%, 02/15/06 2,405 2,413
NB Capital Trust IV
8.250%, 04/15/27 1,700 1,879
Prudential Financial
4.750%, 04/01/14 1,680 1,560
Safeco
6.875%, 07/15/07 725 792
Simon Property Group LP
6.375%, 11/15/07 700 749
SLM, MTN
3.625%, 03/17/08 2,415 2,393
Textron Financial, Ser E, MTN
2.750%, 06/01/06 665 661
Verizon Global Funding
7.750%, 12/01/30 680 765
Washington Mutual
4.625%, 04/01/14 810 737
Washington Mutual Financial
8.250%, 06/15/05 1,380 1,463
Well Fargo
3.500%, 04/04/08 2,420 2,380
Wells Fargo Capital I
7.960%, 12/15/26 1,000 1,096
--------
48,380
--------
HEALTH CARE (0.2%)
Wyeth
6.500%, 02/01/34 805 761
--------
TECHNOLOGY (0.5%)
Computer Sciences
7.500%, 08/08/05 1,505 1,588
--------
TELEPHONES & TELECOMMUNICATIONS (1.1%)
British Telecom
7.875%, 12/15/05 305 328
Deutsche Telekom
8.750%, 06/15/30 660 804
Verizon Global Funding
7.250%, 12/01/10 2,100 2,346
--------
3,478
--------
TRANSPORTATION (0.5%)
Norfolk Southern
7.800%, 05/15/27 675 775
Union Pacific
5.750%, 10/15/07 650 686
--------
1,461
--------
- --------------------------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- --------------------------------------------------------------------------------
UTILITIES (1.0%)
Alabama Power, Ser X
3.125%, 05/01/08 $ 525 $ 507
Carolina Power & Light
6.500%, 07/15/12 625 672
Pacific Gas & Electric
6.050%, 03/01/34 855 801
Pacificorp
6.900%, 11/15/11 450 502
Southern California Edison
8.000%, 02/15/07 730 811
--------
3,293
--------
Total Corporate Obligations
(Cost $81,400) 80,200
--------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS (7.5%)
FHLMC
5.250%, 01/15/06 6,410 6,686
FNMA
6.500%, 07/01/32 719 745
6.000%, 09/01/17 1,080 1,122
5.500%, 10/01/23 2,213 2,230
5.000%, 06/01/33 4,639 4,468
4.500%, 06/01/18 3,052 2,988
GNMA
8.500%, 04/15/31 707 771
8.000%, 08/15/31 to 09/15/31 1,993 2,174
6.000%, 12/15/31 2,658 2,712
--------
Total U.S. Government Agency Mortgage-Backed
Obligations (Cost $24,070) 23,896
--------
U.S. TREASURY OBLIGATIONS (5.5%)
U.S. Treasury Bonds
6.250%, 08/15/23 4,255 4,683
5.375%, 02/15/31 11,075 11,116
U.S. Treasury Note
4.375%, 08/15/12 1,855 1,841
--------
Total U.S. Treasury Obligations
(Cost $18,064) 17,640
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.4%)
FHLB
2.625%, 05/15/07 4,725 4,619
FHLMC
5.875%, 03/21/11 2,670 2,795
5.200%, 03/05/19 1,775 1,662
3.875%, 01/12/09 1,650 1,619
--------
Total U.S. Government Agency Obligations
(Cost $10,915) 10,695
--------
58
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- --------------------------------------------------------------------------------
ASSET-BACKED OBLIGATIONS (3.0%)
Capital Auto Receivables Asset
Trust, Ser 2002-4, Cl A4
2.640%, 03/17/08 $ 1,200 $ 1,200
Citibank Credit Card Issuance
Trust, Series 2004-A1, Cl A-1
2.550%, 01/20/09 3,330 3,269
General Electric Commercial
Mortgage, Ser 2002-1A,
Cl A3
6.269%, 12/10/35 1,790 1,924
Harley-Davidson Motorcycle
Trust, Ser 2002-2, Cl A2
3.090%, 06/15/10 800 808
JP Morgan Chase Commercial
Mortgage, Series 2004-cb8,
Cl A4
4.404%, 01/12/39 2,495 2,316
--------
Total Asset-Backed Obligations
(Cost $9,633) 9,517
--------
FOREIGN GOVERNMENT DEBT OBLIGATIONS (0.9%)
CANADA (0.7%)
Province of Quebec, Ser NN
7.125%, 02/09/24 2,030 2,319
--------
Total Canada
(Cost $2,429) 2,319
--------
MEXICO (0.2%)
United Mexican States
4.625%, 10/08/08 700 695
--------
Total Mexico
(Cost $698) 695
--------
Total Foreign Government Debt Obligations
(Cost $3,127) 3,014
--------
REPURCHASE AGREEMENT (3.2%)
Deutsche Bank
0.970%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $9,994,759
(collateralized by U.S. Treasury
Notes; total market value
$10,194,401) (C) 9,994 9,994
--------
Total Repurchase Agreement
(Cost $9,994) 9,994
--------
Total Investments (99.5%)
(Cost $303,260) 316,836
--------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (0.5%)
Investment Advisory Fees Payable $ (249)
Distribution Fees Payable (53)
Administration Fees Payable (19)
Custodian Fees Payable (2)
Transfer Agent Shareholder
Servicing Fees Payable (1)
Payable to Adviser (1)
Receivable from Affiliated Funds 1
Other Assets and Liabilities, Net 1,867
--------
Total Other Assets and Liabilities 1,543
--------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 19,956,282 outstanding shares
of beneficial interest 223,773
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 724,903 outstanding shares
of beneficial interest 7,978
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 5,400,164 outstanding shares
of beneficial interest 69,611
Undistributed net investment income 893
Accumulated net realized gain on investments 2,548
Net unrealized appreciation on investments 13,576
--------
Total Net Assets (100.0%) $318,379
========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($244,041,686 / 19,956,282 shares) $12.23
========
Net Asset Value and Redemption
Price Per Share -- A Shares
($8,902,454 / 724,903 shares) $12.28
========
Maximum Offering Price Per Share --
A Shares ($12.28 / 96.25%) $12.76
========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($65,434,540 / 5,400,164 shares) $12.12
========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
59
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
CAPITAL APPRECIATION FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (98.8%)
CAPITAL GOODS (13.9%)
3M 208,000 $ 17,589
American Power Conversion 539,000 9,756
Applied Materials* 1,410,700 28,158
Danaher 334,000 15,708
Deere 341,100 22,410
Emerson Electric 386,500 23,074
General Dynamics 212,400 20,312
L-3 Communications Holdings 413,400 26,350
Northrop Grumman 221,200 22,812
Parker Hannifin 403,500 22,418
----------
208,587
----------
COMMUNICATION SERVICES (1.1%)
COX Communications, Cl A* 509,000 15,988
----------
COMPUTER SOFTWARE (7.1%)
Amdocs* 807,600 19,932
Microsoft 1,400,000 36,890
Oracle* 1,333,300 15,093
Peoplesoft* 759,400 13,578
Veritas Software* 762,400 20,280
----------
105,773
----------
CONSUMER CYCLICALS (18.5%)
Bed Bath & Beyond* 541,500 20,171
Costco Wholesale* 384,100 14,511
Home Depot 867,000 31,143
Kohl's* 184,800 8,789
Lowe's 399,800 21,417
Marriott International 297,800 14,690
May Department Stores 365,200 10,467
Southwest Airlines 1,341,500 20,807
Staples 520,000 14,341
Target 562,100 25,126
Tiffany 354,000 12,521
TJX (D) 542,500 13,514
Wal-Mart Stores 239,200 13,331
Walgreen 709,800 24,850
Walt Disney 1,298,000 30,464
----------
276,142
----------
CONSUMER STAPLES (7.0%)
Avon Products 439,200 38,939
Gillette 590,000 25,423
Kimberly-Clark 324,600 21,391
Procter & Gamble 180,000 19,408
----------
105,161
----------
ENERGY (3.8%)
Anadarko Petroleum 313,700 17,103
Exxon Mobil 908,700 39,301
----------
56,404
----------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FINANCE (19.2%)
Aflac 526,900 $ 21,392
American Express 734,200 37,224
American International Group 425,800 31,211
Bank of New York 443,100 13,324
Chubb 352,000 23,714
Citigroup 693,800 32,213
Goldman Sachs Group 256,300 24,069
MGIC Investment 243,700 17,790
Morgan Stanley 325,000 17,391
State Street 592,000 28,665
Wells Fargo 445,100 26,172
Zions Bancorporation 232,500 14,252
----------
287,417
----------
HEALTH CARE (11.5%)
Biomet 680,000 27,282
Boston Scientific* 718,500 31,829
Johnson & Johnson 550,400 30,663
Pfizer 1,100,000 38,874
Quest Diagnostics 167,500 14,430
St. Jude Medical* 377,000 28,750
----------
171,828
----------
SEMICONDUCTORS (3.4%)
Analog Devices 325,000 15,974
Intel 810,700 23,145
Microchip Technology 392,800 12,456
----------
51,575
----------
SERVICES (4.7%)
Career Education* 288,300 19,596
Time Warner* 1,713,900 29,205
United Parcel Service, Cl B 300,000 21,516
----------
70,317
----------
TECHNOLOGY (8.6%)
Agilent Technologies* 540,200 13,883
CDW 184,900 12,991
Cisco Systems* 603,100 13,359
Dell* 373,800 13,150
EMC* 1,641,000 18,445
Kla-Tencor* 315,400 15,196
Lexmark International* 233,400 22,014
Tellabs* 2,455,300 19,495
----------
128,533
----------
Total Common Stock
(Cost $1,340,302) 1,477,725
----------
60
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACE AMOUNT
(000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (1.2%)
Bear Stearns
1.020%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $18,607,544
(collateralized by FNMA
obligations; total market
value $18,982,512) (C) $18,606 $ 18,606
----------
Total Repurchase Agreement
(Cost $18,606) 18,606
----------
CASH EQUIVALENT (0.2%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 2,240,250 2,240
----------
Total Cash Equivalent
(Cost $2,240) 2,240
----------
Total Investments (100.2%)
(Cost $1,361,148) 1,498,571
----------
OTHER ASSETS AND LIABILITIES (-0.2%)
Payable Upon Return of Securities Loaned (2,240)
Investment Advisory Fees Payable (1,403)
Distribution Fees Payable (151)
Administration Fees Payable (86)
Custodian Fees Payable (7)
Transfer Agent Shareholder
Servicing Fees Payable (7)
Trustees' Fees Payable (1)
Payable to Adviser (4)
Receivable from Affiliated Funds 4
Other Assets and Liabilities, Net 315
----------
Total Other Assets and Liabilities (3,580)
----------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 101,303,527 outstanding shares
of beneficial interest $1,067,551
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 12,344,533 outstanding shares
of beneficial interest 131,882
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 8,952,459 outstanding shares
of beneficial interest 131,961
Accumulated net realized gain on investments 26,174
Net unrealized appreciation on investments 137,423
----------
Total Net Assets (100.0%) $1,494,991
==========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($1,248,635,811 / 101,303,527 shares) $12.33
==========
Net Asset Value and Redemption
Price Per Share -- A Shares
($145,883,233 / 12,344,533 shares) $11.82
==========
Maximum Offering Price Per Share --
A Shares ($11.82 / 96.25%) $12.28
==========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($100,471,849 / 8,952,459 shares) $11.22
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
61
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
EMERGING GROWTH STOCK FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (96.6%)
COMMUNICATION SERVICES (1.7%)
Nextel Partners* 13,900 $ 227
-------
COMPUTER SOFTWARE (4.3%)
Cognizant Technology Solutions* 12,000 555
-------
CONSUMER CYCLICALS (11.7%)
Cache* 9,300 242
Coach* 5,400 236
Dick's Sporting Goods* 9,300 267
Marvel Enterprises* 8,300 169
Select Comfort* 5,700 154
Urban Outfitters* 8,200 450
-------
1,518
-------
CONSUMER STAPLES (5.4%)
Fred's 11,300 238
Whole Foods Market 5,400 464
-------
702
-------
FINANCE (11.8%)
Affiliated Managers Group* 10,100 492
Blackrock 6,700 423
Investors Financial Services 15,800 618
-------
1,533
-------
HEALTH CARE (24.8%)
Align Technology* 17,900 341
Biosite* 11,200 445
Cephalon* 6,300 339
Closure Medical* 10,100 252
Martek Biosciences* 7,000 448
Medicis Pharmaceutical 10,400 440
Neurocrine Biosciences* 3,200 183
Wilson Greatbatch Technologies* 12,300 335
Wright Medical Group* 13,400 435
-------
3,218
-------
PRODUCER DURABLES (4.7%)
Crown Castle International* 20,500 302
Lam Research* 4,800 120
MKS Instruments* 8,300 194
-------
616
-------
SEMICONDUCTORS (3.2%)
Amkor Technology* 12,100 124
Omnivision Technologies* 12,300 288
-------
412
-------
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
SERVICES (11.6%)
aQuantive* 22,200 $ 223
CNET Networks* 35,200 340
Education Management* 7,600 263
Getty Images* 3,000 169
Netflix* 7,800 257
Sohu.com* 12,000 248
-------
1,500
-------
TECHNOLOGY (15.9%)
Akamai Technologies* 6,000 89
eCollege.com* 6,400 108
eResearch Technology* 21,000 531
F5 Networks* 5,000 149
Juniper Networks* 10,800 226
Utstarcom* 16,200 504
Viasat* 19,500 449
-------
2,056
-------
TRANSPORTATION (1.5%)
Airtran Holdings* 13,900 194
-------
Total Common Stock
(Cost $12,570) 12,531
-------
REPURCHASE AGREEMENT (4.3%)
Merrill Lynch
1.020%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $552,862
(collaterlaized by FNMA
obligations; total market
value $563,925) (C) $553 553
-------
Total Repurchase Agreement
(Cost $553) 553
-------
Total Investments (100.9%)
(Cost $13,123) 13,084
-------
OTHER ASSETS AND LIABILITIES (-0.9%)
Investment Advisory Fees Payable (11)
Payable to Affiliated Funds (7)
Administration Fees Payable (1)
Receivable from Adviser 6
Receivable from Administrator 3
Other Assets and Liabilities, Net (110)
-------
Total Other Assets and Liabilities (120)
-------
62
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 1,342,951 outstanding shares
of beneficial interest $13,110
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 4,068 outstanding shares
of beneficial interest 40
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 3,618 outstanding shares
of beneficial interest 37
Accumulated net investment loss (6)
Accumulated net realized loss on investments (178)
Net unrealized depreciation on investments (39)
-------
Total Net Assets (100.0%) $12,964
=======
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($12,890,768 / 1,342,951 shares) $9.60
=======
Net Asset Value and Redemption
Price Per Share -- A Shares
($39,006 / 4,068 shares) $9.59
=======
Maximum Offering Price Per Share --
A Shares ($9.59 / 96.25%) $9.96
=======
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($34,651 / 3,618 shares) $9.58
=======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
63
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (99.4%)
BASIC MATERIALS (3.3%)
E.I. du Pont de Nemours 250,000 $ 10,800
International Paper 200,000 8,386
Praxair 300,000 11,097
--------
30,283
--------
CAPITAL GOODS (11.4%)
Boeing 50,000 2,290
Cooper Industries Ltd., Cl A 200,000 11,380
Emerson Electric 175,000 10,447
General Electric 600,000 18,672
Honeywell International 400,000 13,480
Illinois Tool Works 125,000 11,235
Rockwell Automation 500,000 16,930
Textron 150,000 8,197
United Technologies 150,000 12,692
--------
105,323
--------
COMMUNICATION SERVICES (4.0%)
Alltel 150,000 7,594
Verizon Communications 550,000 19,019
Vodafone Group ADR* 450,000 10,692
--------
37,305
--------
COMPUTER SOFTWARE (2.7%)
Storage Technology* 450,000 12,712
Sungard Data Systems* 450,000 12,470
--------
25,182
--------
CONSUMER CYCLICALS (10.9%)
Gannett 125,000 10,975
Johnson Controls 150,000 8,088
Jones Apparel Group 325,964 12,540
Kohl's* 350,000 16,646
Lowe's 100,000 5,357
May Department Stores 450,000 12,897
Target 300,000 13,410
Wal-Mart Stores 175,000 9,753
Walt Disney 500,000 11,735
--------
101,401
--------
CONSUMER STAPLES (8.0%)
Clorox 275,000 14,399
Colgate-Palmolive 150,000 8,580
Gillette 100,000 4,309
HJ Heinz 175,000 6,535
Kimberly-Clark 150,000 9,885
PepsiCo 100,000 5,337
Sara Lee 500,000 11,450
Sysco 50,000 1,875
Wm. Wrigley Jr 185,000 11,618
--------
73,988
--------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
ENERGY (9.4%)
Anadarko Petroleum 250,000 $ 13,630
Burlington Resources 125,000 8,367
ChevronTexaco 150,000 13,560
ConocoPhillips 150,000 11,000
Exxon Mobil 450,000 19,463
Kerr-McGee 225,000 11,081
Schlumberger 175,000 10,005
--------
87,106
--------
FINANCE (25.1%)
American International Group 225,000 16,492
Bank of America 225,000 18,704
Berkshire Hathaway, Cl B* 6,700 19,912
Cincinnati Financial 315,000 13,466
Citigroup 425,000 19,733
Fannie Mae 126,100 8,537
Fifth Third Bancorp 175,000 9,501
Goldman Sachs Group 125,000 11,739
Jefferson-Pilot 75,000 3,850
MGIC Investment 125,000 9,125
Morgan Stanley 225,000 12,040
PNC Financial Services Group 275,000 15,183
Principal Financial Group* 500,000 17,475
Prudential Financial 475,000 21,042
US Bancorp 750,000 21,076
Wells Fargo 250,000 14,700
--------
232,575
--------
HEALTH CARE (8.9%)
Abbott Laboratories 200,000 8,242
Anthem* 112,000 9,915
Bristol-Myers Squibb 450,000 11,371
C.R. Bard 50,000 5,608
Express Scripts* 125,000 9,783
Hospira* 20,000 513
Johnson & Johnson 200,000 11,142
Medtronic 225,000 10,778
Merck 50,000 2,365
Pfizer 350,000 12,369
--------
82,086
--------
SERVICES (1.5%)
Cendant 600,000 13,764
--------
TECHNOLOGY (7.9%)
Computer Sciences* (D) 125,000 5,449
First Data 300,000 12,987
Hewlett-Packard 450,000 9,558
Intel 175,000 4,996
International Business Machines 75,000 6,644
Microsoft 600,000 15,810
64
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
TECHNOLOGY -- CONTINUED
Nokia ADR* 900,000 $ 12,366
Texas Instruments 200,000 5,222
--------
73,032
--------
TRANSPORTATION (2.1%)
Norfolk Southern 350,000 8,481
Ryder System 300,000 11,145
--------
19,626
--------
UTILITIES (4.2%)
American Electric Power 600,000 19,062
Exelon 350,000 11,655
Questar 225,000 8,245
--------
38,962
--------
Total Common Stock
(Cost $752,956) 920,633
--------
CASH EQUIVALENT (0.1%)
Federated Prime Value Money
Market Fund 1,076,732 1,077
Boston Global Investment Trust--
Enhanced Portfolio (A) 22,000 22
--------
Total Cash Equivalent
(Cost $1,099) 1,099
--------
Total Investments (99.5%)
(Cost $754,055) 921,732
--------
OTHER ASSETS AND LIABILITIES (0.5%)
Payable Upon Return of Securities Loaned (22)
Investment Advisory Fees Payable (697)
Distribution Fees Payable (66)
Administration Fees Payable (53)
Custodian Fees Payable (4)
Transfer Agent Shareholder
Servicing Fees Payable (4)
Trustees' Fees Payable (1)
Receivable from Affiliated Funds 2
Other Assets and Liabilities, Net 5,485
--------
Total Other Assets and Liabilities 4,640
--------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 53,184,874 outstanding shares
of beneficial interest $648,708
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 3,087,850 outstanding shares
of beneficial interest 36,124
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 6,731,638 outstanding shares
of beneficial interest 103,001
Undistributed net investment income 1,551
Accumulated net realized loss on investments (30,689)
Net unrealized appreciation on investments 167,677
--------
Total Net Assets (100.0%) $926,372
========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($782,665,241 / 53,184,874 shares) $14.72
========
Net Asset Value and Redemption
Price Per Share -- A Shares
($45,807,951 / 3,087,850 shares) $14.83
========
Maximum Offering Price Per Share --
A Shares ($14.83 / 96.25%) $15.41
========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($97,898,905 / 6,731,638 shares) $14.54
========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
65
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
INFORMATION AND TECHNOLOGY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (93.4%)
CAPITAL GOODS (6.7%)
American Power Conversion 10,000 $ 181
Applied Materials* 11,000 220
Celestica* 15,000 282
Jabil Circuit* 10,000 283
Sanmina-SCI 9,000 95
TTM Technologies 7,000 80
-------
1,141
-------
COMPUTER SOFTWARE (17.8%)
Adobe Systems 6,000 268
Automatic Data Processing 7,000 311
BMC Software* 10,000 176
Cognos* 6,000 202
Microsoft 19,000 501
Network Associates* 8,000 133
Oracle* 10,000 113
Packeteer* 5,000 71
SAP ADR 12,000 485
Symantec* 7,000 321
Veritas Software* 17,000 452
-------
3,033
-------
FINANCE (5.6%)
AMBAC Financial Group 5,000 346
Lehman Brothers Holdings 4,800 363
Morgan Stanley 4,500 241
-------
950
-------
HEALTH CARE (3.6%)
Biogen Idec 10,000 621
-------
SEMICONDUCTORS (10.0%)
Broadcom, Cl A* 5,000 211
Cypress Semiconductor* 6,500 106
Marvell Technology Group Ltd. 3,792 180
Micrel* 30,000 443
Microchip Technology* 17,000 539
Taiwan Semiconductor*
Manufacturing ADR 10,000 102
Teradyne* 5,000 112
Triquint Semiconductor* 5,000 28
-------
1,721
-------
SERVICES (22.5%)
Accenture Ltd., Cl A* 10,000 246
Akamai Technologies* 10,000 149
Amazon.com* 14,000 676
eBay* 6,000 533
Getty Images* 7,000 394
Infospace* 9,000 329
Knight-Ridder 3,000 228
Time Warner* 20,000 341
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
SERVICES -- CONTINUED
VeriSign 15,000 $ 272
Yahoo!* 22,000 674
-------
3,842
-------
TECHNOLOGY (27.2%)
Alcatel ADR* 32,000 461
Apple Computer* 12,000 337
Avaya* 40,000 633
Cisco Systems* 28,000 620
Comverse Technology* 30,000 530
Enterasys Networks 14,000 27
Hewlett-Packard 11,000 234
International Business Machines 6,500 576
Juniper Networks* 19,400 406
Nortel Networks* (D) 30,000 115
Polycom 15,000 307
Qualcomm 1,500 101
STMicroelectronics 5,000 113
Utstarcom (D) 6,000 187
-------
4,647
-------
Total Common Stock
(Cost $13,880) 15,955
-------
REPURCHASE AGREEMENT (6.9%)
Dresdner Bank
0.950%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $1,182,176
(collateralized by FNMA
obligations; total market
value $1,209,922) (C) $1,182 1,182
-------
Total Repurchase Agreement
(Cost $1,182) 1,182
-------
CASH EQUIVALENT (1.4%)
Boston Global Investment
Trust -- Enhanced Portfolio (A) 239,400 239
-------
Total Cash Equivalent
(Cost $239) 239
-------
Total Investments (101.7%)
(Cost $15,301) 17,376
-------
OTHER ASSETS AND LIABILITIES (-1.7%)
Payable Upon Return of Securities Loaned (239)
Investment Advisory Fees Payable (15)
Distribution Fees Payable (4)
Administration Fees Payable (1)
Other Assets and Liabilities, Net (26)
-------
Total Other Assets and Liabilities (285)
-------
66
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 1,294,272 outstanding shares
of beneficial interest $72,809
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 205 outstanding shares
of beneficial interest 2
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 1,027,350 outstanding shares
of beneficial interest 27,072
Accumulated net realized loss on investments (84,867)
Net unrealized appreciation on investments 2,075
-------
Total Net Assets (100.0%) $17,091
=======
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($9,712,279 / 1,294,272 shares) $7.50
=======
Net Asset Value and Redemption
Price Per Share -- A Shares
($1,539.3 / 205.4 shares) $7.49
=======
Maximum Offering Price Per Share --
A Shares ($7.49 / 96.25%) $7.78
=======
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($7,377,522 / 1,027,350 shares) $7.18
=======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
67
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FOREIGN COMMON STOCK (97.3%)
AUSTRALIA (4.5%)
Australia & New Zealand
Banking Group 74,547 $ 964
BlueScope Steel (D) 346,468 1,533
Boral (D) 321,359 1,344
Insurance Australia Group (D) 472,896 1,539
News Corp 56,947 522
Orica 139,279 1,456
Origin Energy (D) 287,361 1,083
Pacific Brands* 686,200 1,239
Publishing & Broadcasting (D) 199,050 1,753
Qantas Airways (D) 726,400 1,778
West Australian Newspapers
Holdings (D) 164,090 774
Westpac Banking 128,082 1,572
--------
15,557
--------
BELGIUM (0.8%)
Delhaize Group (D) 33,502 1,594
Fortis (D) 63,638 1,351
--------
2,945
--------
DENMARK (0.8%)
Danske Bank 85,955 1,955
TDC 26,300 887
--------
2,842
--------
FINLAND (1.5%)
Fortum 120,000 1,411
Nokia* 201,446 2,745
Tietoenator 35,875 1,058
--------
5,214
--------
FRANCE (9.5%)
Alcatel* 107,709 1,548
Aventis* (D) 35,149 2,788
AXA 50,140 1,029
BNP Paribas 61,392 3,748
Cie de Saint-Gobain 28,252 1,423
France Telecom* 84,535 2,033
Lafarge (D) 25,464 2,198
Pernod-Ricard (D) 10,944 1,370
Peugeot (D) 28,791 1,625
Schneider Electric (D) 20,621 1,388
Societe Generale (D) 37,180 3,151
Suez (D) 63,656 1,237
Technip (D) 2,577 347
Thomson (D) 26,838 512
Total (D) 27,247 5,114
Vinci (D) 16,931 1,627
Vivendi Universal* 65,651 1,673
--------
32,811
--------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
GERMANY (7.0%)
Allianz 24,846 $ 2,591
BASF 42,842 2,190
Bayer (D) 25,014 713
Bayerische Motoren Werke 17,159 727
Deutsche Bank (D) 37,588 2,945
Deutsche Post 78,728 1,575
Deutsche Telekom* 131,987 2,215
E.ON 18,650 1,293
Infineon Technologies* 19,332 261
Metro* 23,228 1,125
Porsche 3,048 2,058
SAP 11,599 1,872
Schering 10,162 554
Siemens 54,510 3,837
Volkswagen 11,055 482
--------
24,438
--------
HONG KONG (1.7%)
Bank of East Asia 334,800 951
Cathay Pacific Airways 250,000 471
Cheung Kong Holdings 166,000 1,246
CLP Holdings 101,300 537
Esprit Holdings (D) 343,500 1,498
Hang Lung Properties 181,000 236
Hutchison Whampoa 117,700 797
--------
5,736
--------
IRELAND (1.0%)
Anglo Irish Bank 124,347 1,974
CRH 69,188 1,470
--------
3,444
--------
ITALY (2.8%)
Banca Intesa 351,093 1,260
ENI-Ente Nazionale Idrocarburi 142,173 2,898
Mediaset (D) 222,271 2,435
Saipem (D) 41,392 377
Telecom Italia (D) 575,550 1,764
UniCredito Italiano (D) 221,668 1,037
--------
9,771
--------
JAPAN (22.6%)
Advantest (D) 9,000 631
Amada 107,000 608
Asahi Breweries 146,600 1,544
Asahi Glass 166,000 1,753
Bank of Fukuoka 216,000 1,120
Bridgestone 40,000 668
Canon 40,100 1,977
Daimaru 39,000 342
68
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
JAPAN -- CONTINUED
Daiwa Securities Group 190,000 $ 1,327
East Japan Railway 224 1,157
Eisai (D) 49,000 1,272
Fujitsu* 216,000 1,458
Hitachi 376,000 2,585
Honda Motor 25,900 1,115
Ito-Yokado 24,000 975
JFE Holdings 32,400 701
Kao 34,000 795
Kyocera 22,100 1,840
Kyushu Electric Power 90,900 1,563
Marubeni (D) 621,000 1,416
Matsushita Electric Industrial 74,000 1,022
Matsushita Electric Works 106,000 884
Millea Holdings 52 673
Mitsubishi 80,000 790
Mitsubishi Estate 28,000 345
Mitsubishi Tokyo Financial Group 296 2,544
Mitsui 80,000 609
Mitsui Fudosan 117,000 1,329
Mitsui OSK Lines 327,000 1,550
Mitsui Sumitomo Insurance 121,000 1,077
Mizuho Financial Group 389 1,675
Murata Manufacturing 10,100 582
Nippon Steel 387,000 784
Nippon Telegraph & Telephone 509 2,501
Nissan Motor 71,300 719
Nitto Denko 23,300 1,261
Nomura Holdings 88,000 1,349
Nomura Research Institute 10,100 1,023
NTT DoCoMo 528 994
Onward Kashiyama 66,000 1,065
ORIX 6,500 659
Pioneer 14,200 366
Ricoh 60,300 1,170
Rohm 9,000 1,075
Sammy Corp 19,100 731
Sankyo 40,600 812
Sankyo Gunma 24,200 821
Seven-Eleven Japan 27,000 853
Sharp 66,000 1,117
Shin-Etsu Chemical 31,900 1,117
Showa Shell Sekiyu KK 101,800 852
Sony 40,500 1,488
Sumitomo 200,000 1,544
Sumitomo Chemical 220,000 1,031
Sumitomo Mitsui Financial Group 234 1,677
Sumitomo Rubber Industries (D) 87,000 723
Takeda Chemical Industries 37,600 1,562
TDK 11,700 820
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
JAPAN -- CONTINUED
Tokyo Electric Power 71,900 $ 1,539
Tokyo Gas 255,000 897
Toppan Printing 137,000 1,667
Toyota Motor 134,700 4,875
West Japan Railway 191 741
Yamada Denki 18,200 608
Yamaha Motor 106,000 1,520
Yamato Transport 48,000 682
--------
78,570
--------
NETHERLANDS (4.3%)
ABN AMRO Holding 123,871 2,640
Akzo Nobel 46,880 1,695
ING Groep 103,545 2,337
Koninklijke Philips Electronics 123,419 3,353
Royal Dutch Petroleum 45,115 2,259
Royal KPN 238,415 1,729
Unilever (D) 10,497 690
United Services Group 16,389 228
--------
14,931
--------
NEW ZEALAND (0.5%)
Fletcher Building 643,223 1,786
--------
NORWAY (0.5%)
Tandberg 30,600 308
Telenor 201,911 1,450
--------
1,758
--------
SINGAPORE (0.8%)
DBS Group Holdings 141,000 1,169
Fraser & Neave 60,130 478
SembCorp Industries 455,000 385
Singapore Airlines 34,000 210
Singapore Telecommunications 397,000 511
--------
2,753
--------
SPAIN (4.5%)
Acciona (D) 10,051 636
Altadis 28,974 887
Banco Santander Central Hispano 272,843 2,895
Endesa 112,117 2,069
Gamesa Corp Tecnologica* 17,867 801
Repsol 134,695 2,855
Sociedad General de Aguas de
Barcelona* (D) 53,848 896
Sociedad General de Aguas de
Barcelona (D) 481 8
Telefonica 267,223 3,877
Union Fenosa 30,920 660
--------
15,584
--------
69
<Page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
INTERNATIONAL EQUITY FUND--CONCLUDED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
SWEDEN (3.2%)
Ainax* (B) (E) 2,239 $ 66
Autoliv (D) 31,197 1,283
Electrolux 48,800 972
Nordea 398,200 2,697
Sandvik 31,865 1,081
Svenska Handelsbanken 45,100 877
Telefonaktiebolaget LM Ericsson,
Cl B* 1,071,948 2,991
Volvo (D) 34,700 1,124
--------
11,091
--------
SWITZERLAND (6.8%)
Credit Suisse Group* 92,845 3,186
Nestle 15,619 4,059
Novartis 153,679 6,885
Roche Holding 18,983 1,998
STMicroelectronics (D) 22,878 514
UBS 58,887 4,220
Zurich Financial Services* 18,090 2,845
--------
23,707
--------
UNITED KINGDOM (24.5%)
Alliance Unichem 154,340 1,791
Aviva 255,158 2,491
Balfour Beatty 345,444 1,582
Barclays 440,158 3,837
BHP Billiton 174,600 1,469
BP 1,032,520 9,044
British American Tobacco 148,690 2,181
BT Group 572,868 1,922
Burberry Group 216,052 1,543
Centrica 344,886 1,345
Dixons Group 574,274 1,603
Emap 131,343 1,833
Galen Holdings 78,530 1,043
GlaxoSmithKline 313,524 6,553
HBOS 322,619 4,223
HMV Group 247,000 1,067
HSBC Holdings 336,423 4,990
Kesa Electricals 274,006 1,429
Legal & General Group 901,100 1,471
mmO2* 840,358 1,502
Next 85,652 2,177
Northern Rock 139,742 1,855
Pennon Group 82,224 1,110
Pilkington 799,766 1,327
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
UNITED KINGDOM -- CONTINUED
Royal Bank of Scotland Group 121,328 $ 3,664
SABMiller 99,200 1,199
Sage Group 498,990 1,617
Shell Transport & Trading 488,994 3,534
Tesco 566,601 2,587
Vodafone Group 2,564,112 6,029
Whitbread 140,710 2,064
William Hill 228,421 2,266
Wimpey George 337,796 2,285
--------
84,633
--------
Total Foreign Common Stock
(Cost $293,433) 337,571
--------
EXCHANGE TRADED FUND (1.6%)
iShares MSCI EAFE Index Fund (D) 39,997 5,534
--------
Total Exchange Traded Fund
(Cost $5,397) 5,534
--------
CASH EQUIVALENT (15.0%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 52,076,710 52,077
--------
Total Cash Equivalent
(Cost $52,077) 52,077
--------
Total Investments (113.9%)
(Cost $350,907) 395,182
--------
OTHER ASSETS AND LIABILITIES (-13.9%)
Payable Upon Return of Securities Loaned (52,077)
Investment Advisory Fee Payable (358)
Custodian Fees Payable (50)
Administration Fees Payable (20)
Distribution Fees Payable (5)
Transfer Agent Shareholder
Servicing Fees Payable (2)
Receivable from Affiliated Funds 1
Other Assets and Liabilities, Net 4,171
--------
Total Other Assets and Liabilities (48,340)
--------
70
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 32,739,338 outstanding shares
of beneficial interest $368,898
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 703,687 outstanding shares
of beneficial interest 6,530
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 801,834 outstanding shares
of beneficial interest 11,975
Undistributed net investment income 2,377
Accumulated net realized loss on investments (87,267)
Net unrealized appreciation on investments 44,275
Net unrealized appreciation on foreign
currency and translation of other assets
and liabilities in foreign currency investments 54
--------
Total Net Assets (100.0%) $346,842
========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($332,180,284 / 32,739,338 shares) $10.15
========
Net Asset Value and Redemption
Price Per Share -- A Shares
($7,055,667 / 703,687 shares) $10.03
========
Maximum Offering Price Per Share --
A Shares ($10.03 / 96.25%) $10.42
========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($7,605,906 / 801,834 shares) $9.49
========
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
At May 31, 2004, sector diversification of the Fund was as follows (unaudited):
% OF VALUE
SECTOR DIVERSIFICATION NET ASSETS (000)
- ---------------------- -------------- -------------
FOREIGN COMMON STOCK
Banking 15.7% $ 54,101
Energy 12.4 42,985
Finance 12.3 42,645
Telephones & Telecommunications 11.7 40,695
Building & Construction 6.8 23,733
Health Care 6.8 23,623
Technology 6.7 23,224
Automotive 4.0 14,113
Food, Beverage & Tobacco 3.3 11,371
Retail 2.9 10,018
Transportation 2.7 9,448
Apparel/Textiles 2.6 8,938
Wholesale 1.9 6,549
Chemicals 1.5 5,051
Services 1.4 4,698
Electronics 1.2 4,139
Household Products 1.2 4,123
Printing & Publishing 0.9 3,500
Photographic Equipment &
Supplies 0.6 1,977
Metals & Mining 0.4 1,469
Office Furniture & Fixtures 0.3 1,171
----- --------
TOTAL FOREIGN COMMON STOCK 97.3 337,571
EXCHANGE TRADED FUND 1.6 5,534
SHORT-TERM INVESTMENT 15.0 52,077
----- --------
TOTAL INVESTMENTS 113.9 395,182
TOTAL OTHER ASSETS AND
LIABILITIES, NET (13.9) (48,340)
----- --------
TOTAL NET ASSETS 100.0% $346,842
===== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
71
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FOREIGN COMMON STOCK (95.5%)
AUSTRALIA (2.5%)
Alumina 39,656 $ 151
Amcor 26,805 125
Amp 49,137 195
Australia & New Zealand
Banking Group 45,955 594
Australian Gas Light 19,509 164
BHP Billiton 99,299 854
BlueScope Steel 34,569 153
Brambles Industries (D) 34,805 146
Coca-Cola Amatil 20,682 105
Cochlear 2,438 36
Coles Myer 34,610 210
Commonwealth Bank
of Australia 30,969 727
CSL 5,655 93
CSR 43,122 59
Foster's Group 69,625 226
General Property Trust 89,550 220
Insurance Australia Group 49,749 162
Lend Lease Corp 17,995 129
Macquarie Bank 8,055 192
Mayne Group 37,205 80
Mirvac Group 31,249 95
National Australia Bank 38,601 829
Newcrest Mining 7,159 65
News Corp 43,386 398
QBE Insurance Group (D) 26,224 234
Rinker Group 33,351 179
Rio Tinto 8,917 223
Santos 26,756 130
Southcorp 29,055 65
Stockland 41,098 155
Suncorp-Metway 22,088 218
TABCORP Holdings 16,790 160
Telstra 47,739 160
Wesfarmers 12,274 247
Westfield Holdings 20,837 217
Westfield Trust 96,972 295
Westpac Banking 44,551 547
WMC Resources 36,559 120
Woodside Petroleum 17,862 202
Woolworths 24,347 205
--------
9,365
--------
AUSTRIA (2.1%)
Bank Austria Creditanstalt (D) 13,957 794
Boehler-Uddeholm 3,106 237
Erste Bank der Oesterreichischen
Sparkassen (D) 11,635 1,797
Flughafen Wien 6,213 345
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
AUSTRIA -- CONTINUED
Immofinanz Immobilien
Anlagen (D) 44,811 $ 354
Mayr-Melnhof Karton (D) 1,584 190
OMV (D) 5,151 903
RHI* 9,336 194
Telekom Austria* 103,496 1,446
VA Technologie* 4,544 243
Verbund - Oesterreichische
Elektrizitaetswirtschaf 1,854 308
Voestalpine (D) 9,256 413
Wienerberger (D) 19,972 676
Wienerberger Rights (D) 19,972 --
--------
7,900
--------
BELGIUM (1.8%)
AGFA-Gevaert (D) 10,980 267
Bekaert 1,895 109
Belgacom (D) 11,572 350
Colruyt 2,208 241
D'ieteren (D) 364 72
Delhaize Group 5,959 284
Dexia (D) 45,079 754
Electrabel (D) 2,151 701
Fortis (D) 76,787 1,632
Groupe Bruxelles Lambert 5,399 334
Interbrew 11,567 353
KBC Bancassurance Holding (D) 6,698 384
Omega Pharma 3,255 158
Solvay 5,076 408
UCB 7,912 368
Umicore 1,933 117
--------
6,532
--------
DENMARK (1.1%)
AP Moller - Maersk 89 579
Carlsberg 1,200 59
Danisco 4,359 207
Danske Bank 33,246 756
DSV 1,600 74
East Asiatic 1,050 47
FLS Industries* 3,200 43
GN Store Nord 21,500 161
Group 4 Falck 6,336 147
H Lundbeck (D) 5,500 122
ISS 3,878 185
NKT Holdings 1,300 25
Novo-Nordisk 17,970 826
Novozymes 5,570 244
TDC 9,200 310
Topdanmark* 2,200 133
Vestas Wind Systems* 8,438 112
William Demant Holding* 3,257 120
--------
4,150
--------
72
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FINLAND (0.6%)
Nokia 101,700 $ 1,386
Orion 3,300 84
Rautaruukki* 12,800 95
Stora Enso 15,406 200
Tietoenator 3,169 93
UPM-Kymmene* 11,700 210
Wartsila 1,200 25
--------
2,093
--------
FRANCE (9.1%)
Accor (D) 10,296 427
Air Liquide* (B) (E) 4,899 860
Alcatel* 58,957 847
Alstom* 54,005 62
Atos Origin* 2,132 125
Aventis* (D) 31,766 2,520
AXA 67,119 1,377
BNP Paribas 37,794 2,308
Bouygues (D) 9,868 340
Cap Gemini* 5,458 209
Carrefour 26,632 1,301
Casino Guichard Perrachon (D) 2,045 179
Cie de Saint-Gobain 14,306 721
Cie Generale D'Optique Essilor
International (D) 6,230 386
Credit Agricole (D) 30,343 746
Dassault Systemes 2,943 134
European Aeronautic Defense
and Space (D) 14,396 355
France Telecom* 56,606 1,361
Groupe Danone 5,803 1,001
L'Oreal 15,820 1,228
Lafarge* (B) (E) 997 86
Lafarge (D) 6,415 554
Lagardere S.C.A. (D) 6,749 412
LVMH Moet Hennessy Louis
Vuitton (D) 11,662 833
Michelin (C.G.D.E.) (D) 7,093 346
Pernod-Ricard (D) 3,191 399
Peugeot (D) 9,444 533
Pinault-Printemps-Redoute 3,240 339
Publicis Groupe 5,452 161
Renault 8,204 611
Sanofi-Synthelabo (D) 17,872 1,181
Schneider Electric (D) 10,045 676
Societe BIC (D) 2,837 123
Societe Generale 15,084 1,278
Societe Television Francaise 1 (D) 6,871 213
Sodexho Alliance (D) 5,673 148
Suez (D) 38,495 748
Technip (D) 1,506 203
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FRANCE -- CONTINUED
Thales (D) 4,539 $ 160
Thomson (D) 11,812 225
Total (D) 30,350 5,696
Unibail 3,491 347
Valeo (D) 4,076 165
Veolia Environnement (D) 12,058 322
Vinci (D) 3,579 344
Vivendi Universal* 43,296 1,103
--------
33,693
--------
GERMANY (13.9%)
Adidas-Salomon* 5,115 603
Allianz 30,236 3,153
Altana 7,722 501
BASF (D) 57,169 2,922
Bayer (D) 67,938 1,937
Bayerische Hypo-und
Vereinsbank* 53,557 905
Beiersdorf 2,855 321
Celesio 4,032 230
Commerzbank 52,500 861
Continental 14,509 651
DaimlerChrysler 89,932 4,010
Deutsche Bank (D) 54,864 4,299
Deutsche Boerse (D) 11,216 598
Deutsche Lufthansa 21,871 312
Deutsche Post 46,723 935
Deutsche Telekom* 263,227 4,417
Douglas Holding 6,189 164
E.ON 65,063 4,509
Epcos* 6,198 125
Fresenius Medical Care (D) 4,037 298
HeidelbergCement 4,273 188
Hypo Real Estate Holding* 13,568 381
Infineon Technologies* 66,754 902
KarstadtQuelle (D) 5,639 115
Linde 9,191 474
MAN 12,486 462
Merck 6,208 349
Metro* 15,524 751
MLP 6,775 105
Muenchener Rueckversicherungs
(D) 15,682 1,609
Puma Rudolf Dassler Sport 1,715 419
RWE* 43,568 1,899
SAP 21,481 3,468
Schering 18,067 985
Siemens 83,733 5,894
Suedzucker 5,999 119
ThyssenKrupp 32,659 544
TUI (D) 15,725 305
Volkswagen (D) 23,712 1,034
--------
51,754
--------
73
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
INTERNATIONAL EQUITY INDEX FUND--CONTINUED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
GREECE (1.3%)
Alpha Bank A.E 24,960 $ 653
Coca Cola Hellenic Bottling 10,600 265
Commercial Bank of Greece 8,200 217
Cosmote Mobile
Communications 9,400 157
EFG Eurobank Ergasias 22,900 510
Hellenic Duty Free Shops 4,700 86
Hellenic Petroleum 17,200 132
Hellenic Technodomiki 4,300 22
Hellenic Telecommunications
Organization 30,400 400
Intracom 28,700 144
National Bank of Greece 25,030 754
OPAP 21,300 409
Piraeus Bank 23,000 268
Public Power 11,000 275
Technical Olympic 18,600 87
Titan Cement 4,000 175
Viohalco 16,600 105
Vodafone-Panafon 23,800 160
--------
4,819
--------
HONG KONG (1.1%)
Bank of East Asia 84,800 241
BOC Hong Kong Holdings 134,000 232
Cheung Kong Holdings 67,000 503
CLP Holdings 73,100 387
Hang Seng Bank 27,600 350
Henderson Land Development 38,000 164
Hong Kong & China Gas 160,237 253
HongKong Electric Holdings 52,500 220
Hutchison Whampoa 79,080 535
Johnson Electric Holdings 69,500 65
Li & Fung 80,000 119
PCCW* 124,326 84
Sun Hung Kai Properties 55,600 473
Swire Pacific 46,000 297
Wharf Holdings 66,000 186
--------
4,109
--------
IRELAND (0.9%)
Allied Irish Banks 62,363 889
Bank of Ireland 45,411 538
CRH 42,011 890
Elan* 18,934 447
Greencore Group 1,849 7
Irish Life & Permanent 14,393 219
Kerry Group 8,738 180
Ryanair Holdings* 14,383 76
--------
3,246
--------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
ITALY (7.5%)
Alleanza Assicurazioni (D) 45,753 $ 501
Arnoldo Mondadori Editore (D) 18,346 175
Assicurazioni Generali (D) 90,120 2,337
Autogrill* 15,772 224
Autostrade 17,905 344
Banca Antonveneta* 22,036 440
Banca Fideuram 30,040 172
Banca Intesa 354,427 1,272
Banca Intesa RNC 84,849 232
Banca Monte dei Paschi di
Siena (D) 101,096 314
Banca Nazionale del Lavoro* 152,063 318
Banca Popolare di Milano* (D) 47,661 281
Banche Popolari Unite (D) 26,509 426
Banco Popolare di Verona e
Novara SCRL (D) 39,116 642
Benetton Group* (D) 8,447 96
Bulgari* (D) 18,101 175
Capitalia (D) 116,135 342
Enel 228,930 1,876
ENI-Ente Nazionale Idrocarburi 247,680 5,048
Fiat* 35,855 254
FinecoGroup* (D) 15,426 91
Finmeccanica* (D) 605,647 457
Italcementi (D) 11,705 147
Luxottica Group (D) 13,231 214
Mediaset (D) 60,812 666
Mediobanca 46,681 535
Mediolanum (D) 25,766 173
Parmalat Finanziaria (D) 46,288 6
Pirelli (D) 154,481 158
Rinascente* (B) 15,295 --
Riunione Adriatica di Sicurta (D) 30,291 543
Sanpaolo IMI (D) 94,032 1,076
Seat Pagine Gialle* 366,379 146
Snam Rete Gas (D) 91,702 386
Telecom Italia (D) 760,083 2,330
Telecom Italia RNC (D) 627,472 1,360
Telecom Italia Media* (D) 138,972 59
TIM (D) 360,135 1,953
Tiscali* 19,365 85
UniCredito Italiano (D) 395,847 1,851
--------
27,705
--------
JAPAN (30.2%)
77 Bank 29,000 171
Acom 5,190 347
Advantest (D) 4,700 330
Aeon 15,700 658
Aiful 3,100 303
Ajinomoto 35,000 402
Alps Electric 12,000 151
74
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
JAPAN -- CONTINUED
Amada 21,000 $ 119
Ariake Japan 1,340 36
Asahi Breweries 27,000 284
Asahi Glass 49,000 517
Asahi Kasei 85,000 418
Bank of Fukuoka (D) 45,000 233
Bank of Yokohama 68,000 388
Benesse (D) 5,900 179
Bridgestone 43,000 718
Canon 56,000 2,761
Casio Computer 22,000 293
Central Japan Railway 53 427
Chiba Bank 47,000 271
Chubu Electric Power (D) 41,200 859
Chugai Pharmaceutical 20,000 303
Citizen Watch 24,000 251
COMSYS Holdings 13,000 96
Credit Saison (D) 10,000 285
CSK 5,400 209
Dai Nippon Printing 43,000 657
Daiichi Pharmaceutical (D) 16,600 274
Daikin Industries 13,000 308
Dainippon Ink and Chemicals 68,000 154
Daito Trust Construction 7,100 255
Daiwa House Industry 31,000 350
Daiwa Securities Group 85,000 594
Denki Kagaku Kogyo 44,000 139
Denso 30,500 654
East Japan Railway 221 1,142
Ebara (D) 25,000 112
Eisai (D) 16,300 423
Fanuc 9,700 566
Fast Retailing 3,900 279
Fuji Electric Holdings 40,000 98
Fuji Photo Film 31,000 906
Fuji Television Network 60 137
Fujikura 27,000 129
Fujisawa Pharmaceutical 18,000 398
Fujitsu* 107,000 722
Furukawa Electric* (D) 42,000 156
Gunma Bank 26,000 120
Hirose Electric 2,500 273
Hitachi 197,000 1,355
Hitachi Cable 9,000 40
Honda Motor 52,400 2,257
Hoya 7,500 774
Isetan 15,500 209
Ishihara Sangyo Kaisha 29,000 57
Ishikawajima-Harima Heavy
Industries* 86,000 123
Ito-Yokado 24,000 975
Itochu* 99,000 406
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
JAPAN -- CONTINUED
Itochu Techno-Science 2,800 $ 109
Japan Airlines System* 52,000 151
Japan Tobacco 50 403
JFE Holdings 30,575 661
JGC 17,000 143
Joyo Bank 55,300 218
JSR 15,000 319
Kajima (D) 60,000 196
Kamigumi 24,000 158
Kaneka 22,000 203
Kansai Electric Power 43,300 758
Kao 34,000 795
Katokichi 4,800 85
Kawasaki Heavy Industries (D) 115,000 172
Kawasaki Kisen Kaisha 29,000 134
Keihin Electric Express
Railway (D) 42,000 250
Keio Electric Railway 42,000 222
Keyence 2,200 509
Kikkoman (D) 17,000 137
Kinden 16,000 81
Kintetsu 92,250 339
Kirin Brewery 46,000 438
Kokuyo 8,900 108
Komatsu 68,000 409
Konami 6,900 154
Konica Minolta Holdings 27,500 372
Kubota 71,000 329
Kuraray 29,000 218
Kurita Water Industries 10,600 135
Kyocera 11,300 941
Kyowa Hakko Kogyo 26,000 170
Kyushu Electric Power 27,800 478
Lawson 4,800 176
Mabuchi Motor 2,300 154
Makita (D) 13,000 182
Marubeni 129,000 294
Marui 23,400 311
Matsumotokiyoshi 2,700 74
Matsushita Electric Industrial 140,880 1,945
Matsushita Electric Works 27,000 225
Meiji Seika Kaisha (D) 32,000 130
Meitec 3,900 137
Millea Holdings 100 1,294
Minebea 27,000 118
Mitsubishi 67,000 661
Mitsubishi Chemical 114,000 269
Mitsubishi Electric 116,000 572
Mitsubishi Estate 65,000 800
Mitsubishi Gas Chemical 27,000 101
Mitsubishi Heavy Industries 190,000 497
Mitsubishi Logistics 12,000 104
75
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
INTERNATIONAL EQUITY INDEX FUND--CONTINUED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
JAPAN -- CONTINUED
Mitsubishi Materials 67,000 $ 128
Mitsubishi Rayon 47,000 164
Mitsubishi Tokyo Financial
Group 281 2,415
Mitsui 79,000 602
Mitsui Chemicals 44,000 213
Mitsui Engineering & Shipping 48,000 81
Mitsui Fudosan* 48,000 545
Mitsui Mining & Smelting 43,000 170
Mitsui OSK Lines 71,000 337
Mitsui Sumitomo Insurance 85,340 760
Mitsui Trust Holdings 41,000 273
Mitsukoshi (D) 37,000 180
Mizuho Financial Group 435 1,873
Murata Manufacturing (D) 15,500 893
NEC 110,000 805
NGK Insulators 21,000 149
NGK Spark Plug 14,000 126
Nichii Gakkan 1,400 65
Nidec (D) 2,700 296
Nikko Cordial 92,000 482
Nikon (D) 20,000 215
Nintendo 6,700 672
Nippon Express 60,000 324
Nippon Meat Packers 13,000 141
Nippon Mining Holdings 47,000 217
Nippon Oil 90,000 511
Nippon Sheet Glass 31,000 103
Nippon Steel 344,000 697
Nippon Telegraph & Telephone 354 1,739
Nippon Unipac Holding 57 278
Nippon Yusen Kabushiki Kaisha 72,000 308
Nissan Chemical Industries 11,000 79
Nissan Motor 167,700 1,692
Nisshin Seifun Group 17,000 156
Nissin Food Products 6,700 163
Nitto Denko 10,600 574
Nomura Holdings 120,000 1,839
NSK 37,000 167
NTN 28,000 130
NTT Data 88 259
NTT DoCoMo 1,175 2,211
Obayashi 47,000 225
OJI Paper 51,000 324
Olympus 16,000 288
Omron 17,000 373
Onward Kashiyama 13,000 210
Oracle Corp Japan (D) 2,600 127
Oriental Land 3,800 233
ORIX 5,620 570
Osaka Gas 136,000 364
Pioneer 12,000 309
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
JAPAN -- CONTINUED
Promise 6,450 $ 424
Resona Holdings* (D) 314,000 543
Ricoh 43,000 835
Rohm 7,300 872
Sankyo 24,200 484
Sankyo Gunma 3,900 132
Sanyo Electric 101,000 395
Sapporo Holdings (D) 30,000 97
Secom 15,000 604
Sega* 8,700 88
Seiko Epson 4,200 144
Sekisui Chemical 39,000 287
Sekisui House 32,000 333
Seven-Eleven Japan 28,000 884
Sharp 65,000 1,100
Shimamuras 1,600 127
Shimano 8,400 198
Shimizu (D) 42,000 176
Shin-Etsu Chemical 23,800 833
Shionogi 21,000 342
Shiseido (D) 25,000 296
Shizuoka Bank 38,000 310
Showa Denko 84,000 180
Showa Shell Sekiyu 13,700 115
Skylark (D) 7,700 147
SMC 3,500 374
Snow Brand Milk Products* (D) 8,500 28
Softbank (D) 15,600 597
Sompo Japan Insurance 51,000 445
Sony 59,600 2,189
Stanley Electric 13,000 214
Sumitomo 52,000 401
Sumitomo Chemical 80,000 375
Sumitomo Electric Industries 39,000 375
Sumitomo Metal Industries 256,000 287
Sumitomo Metal Mining 37,000 220
Sumitomo Mitsui Financial
Group 254 1,820
Sumitomo Realty &
Development (D) 29,000 313
Sumitomo Trust & Banking 66,000 407
T&D Holdings* 10,400 436
Taiheiyo Cement 59,000 129
Taisei 63,000 210
Taisho Pharmaceutical 12,000 244
Taiyo Yuden 10,000 144
Takara Holdings (D) 17,000 129
Takashimaya (D) 25,000 275
Takeda Chemical Industries 56,100 2,330
Takefuji (D) 4,810 321
TDK 7,900 554
Teijin 60,000 194
76
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
JAPAN -- CONTINUED
Teikoku Oil (D) 23,000 $ 118
Terumo 12,500 294
THK (D) 8,400 149
Tobu Railway 70,000 297
Toho 15,400 221
Tohoku Electric Power 29,100 469
Tokyo Broadcasting System 4,200 75
Tokyo Electric Power 75,900 1,624
Tokyo Electron 10,500 598
Tokyo Gas 169,000 595
Tokyu 74,000 365
TonenGeneral Sekiyu 23,000 195
Toppan Printing 40,000 487
Toray Industries 89,000 409
Toshiba 185,000 795
Tosoh 46,000 159
Tostem Inax Holding 16,512 338
Toto 25,700 276
Toyo Seikan Kaisha (D) 12,300 202
Toyobo 64,000 151
Toyota Industries 10,000 218
Toyota Motor 182,500 6,604
Trend Micro (D) 7,000 263
Ube Industries* 73,000 108
UFJ Holdings* 241 1,208
Uni-Charm 3,500 170
UNY 13,000 161
Wacoal 12,000 127
West Japan Railway 113 439
World 3,750 117
Yakult Honsha (D) 9,000 124
Yamada Denki 6,700 224
Yamaha 12,900 195
Yamaha Motor 13,000 186
Yamaichi Securities* (B) 15,000 --
Yamanouchi Pharmaceutical 21,700 697
Yamato Transport 27,000 384
Yamazaki Baking 14,000 130
Yokogawa Electric 21,000 272
--------
112,346
--------
LUXEMBOURG (0.1%)
Arcelor 16,122 270
--------
NETHERLANDS (2.7%)
ABN AMRO Holding 41,598 886
Aegon 38,670 467
Akzo Nobel 7,733 280
ASML Holding* 13,151 229
Heineken 7,000 231
ING Groep 47,363 1,069
Koninklijke Ahold 29,673 233
Koninklijke Philips Electronics 35,726 971
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
NETHERLANDS -- CONTINUED
Qiagen* 16,294 $ 180
Reed Elsevier 21,098 294
Royal Dutch Petroleum 54,342 2,721
Royal KPN 56,013 406
Royal Numico* 3,938 125
TPG 10,822 243
Unilever (D) 16,615 1,093
Vedior 3,325 50
VNU 7,812 230
Wolters Kluwer 10,646 180
--------
9,888
--------
NEW ZEALAND (0.4%)
Auckland International Airport 37,428 158
Carter Holt Harvey 82,300 101
Contact Energy 38,226 136
Fisher & Paykel Healthcare 11,033 88
Fletcher Building 54,884 152
Sky City Entertainment Group 65,152 194
Telecom Corp of New Zealand 162,728 569
Warehouse Group 18,390 50
--------
1,448
--------
NORWAY (1.5%)
DNB NOR (D) 116,940 742
Frontline 5,750 202
Norsk Hydro 21,140 1,312
Norske Skogindustrier (D) 15,750 262
Orkla (D) 33,350 845
Schibsted (D) 6,500 114
Statoil (D) 60,000 756
Storebrand (D) 26,400 177
Tandberg 20,894 210
Telenor 94,400 678
Tomra Systems (D) 27,150 109
Yara International* 21,140 157
--------
5,564
--------
PORTUGAL (0.9%)
Banco BPI* 69,684 254
Banco Comercial Portugues* 204,959 476
Banco Espirito Santo* 14,323 236
Brisa-Auto Estradas de Portugal 47,087 327
Cimpor Cimentos de Portugal 27,659 145
Electricidade de Portugal 218,837 593
Portugal Telecom SGPS* 103,899 1,065
PT Multimedia Servicos* 5,602 118
Sonae SGPS 193,715 201
--------
3,415
--------
77
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
INTERNATIONAL EQUITY INDEX FUND--CONTINUED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
SINGAPORE (0.6%)
City Developments 28,000 $ 86
DBS Group Holdings 41,467 344
Haw Par 24,000 66
Keppel 24,000 94
Oversea-Chinese Banking 39,350 278
SembCorp Industries 92,000 78
Singapore Airlines 31,000 191
Singapore Press Holdings 23,000 277
Singapore Telecommunications 228,000 294
United Overseas Bank 47,000 359
--------
2,067
--------
SPAIN (4.1%)
Abertis Infraestructuras (D) 13,971 236
Acerinox 4,030 221
ACS Actividades Construccion
y Servicios* 8,313 406
Altadis 18,023 552
Antena 3 Television* 1,640 83
Banco Bilbao Vizcaya Argentaria 182,974 2,422
Banco Popular Espanol 9,251 520
Banco Santander Central
Hispano 244,384 2,593
Endesa 53,893 994
Fomento de Construcciones y
Contratas 4,531 163
Gas Natural 12,856 307
Iberdrola 44,882 905
Inditex 12,752 293
Repsol 55,392 1,174
Sacyr Vallehermoso 9,342 138
Sociedad General de Aguas de
Barcelona 6,175 103
Telefonica 271,014 3,932
Union Fenosa 13,060 279
Zeltia 11,877 87
--------
15,408
--------
SWEDEN (1.7%)
Ainax* (B) (E) 623 18
Assa Abloy 12,000 139
Atlas Copco 5,600 207
Electrolux (D) 13,500 269
Gambro 11,600 105
Hennes & Mauritz 18,500 458
Nordea 87,000 589
Sandvik 9,400 319
Securitas* 13,400 165
Skandia Forsakrings 40,900 164
Skandinaviska Enskilda Banken 21,400 309
Skanska 19,600 164
SKF 4,700 171
Svenska Cellulosa 6,700 259
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
SWEDEN -- CONTINUED
Svenska Handelsbanken 19,800 $ 385
Swedish Match* 15,100 160
Tele2 4,950 213
Telefonaktiebolaget LM Ericsson* 548,800 1,531
TeliaSonera 64,000 270
Volvo (D) 9,650 313
WM-Data 18,000 40
--------
6,248
--------
SWITZERLAND (1.8%)
ABB* 21,849 122
Adecco* 2,073 100
Compagnie Financiere
Richemont 7,410 191
Credit Suisse Group* 14,245 489
Geberit 139 89
Holcim (D) 2,050 107
Nestle 4,676 1,215
Novartis 26,557 1,190
Roche Holding 8,329 893
STMicroelectronics (D) 28,624 643
Swiss Reinsurance 4,012 249
Swisscom (D) 375 117
Syngenta* 2,152 171
UBS 13,909 997
Zurich Financial Services* 1,835 288
--------
6,861
--------
UNITED KINGDOM (9.6%)
3i Group 15,165 170
Amvescap 15,873 106
ARM Holdings 33,243 72
AstraZeneca 31,408 1,463
Aviva 44,403 434
BAA 24,465 244
BAE Systems 61,392 232
Barclays 118,843 1,036
BG Group 72,549 442
BHP Billiton 48,542 409
BOC Group 12,833 209
Boots Group 19,447 235
BP 397,767 3,484
Brambles Industries 23,351 91
British American Tobacco 33,426 490
British Land 15,639 192
British Sky Broadcasting 25,359 285
BT Group 157,951 530
Cable & Wireless* 61,050 138
Cadbury Schweppes 37,819 322
Canary Wharf Group* 15,185 82
Capita Group 20,590 117
Carnival 4,408 198
78
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
UNITED KINGDOM -- CONTINUED
Celltech Group* 8,578 $ 86
Centrica 84,326 329
Compass Group 50,303 314
Corus Group* 78,145 48
Davis Service Group 14,536 98
De La Rue 8,104 48
Diageo 57,434 762
Dixons Group 44,529 124
Electrocomponents 14,159 92
EMI Group 25,656 103
Exel 9,691 125
GKN 23,726 100
GlaxoSmithKline 109,071 2,280
GUS 21,884 326
Hanson 17,664 135
Hays 50,670 115
HBOS 71,559 937
Hilton Group 47,861 233
HSBC Holdings 196,921 2,921
Imperial Chemical Industries 28,556 115
Imperial Tobacco Group 18,336 408
Intercontinental Hotels Group 20,714 199
International Power* 32,977 88
Invensys* 113,861 34
ITV 81,457 177
J Sainsbury 31,693 158
Johnson Matthey 6,178 100
Kingfisher 47,713 250
Land Securities Group 13,594 292
Legal & General Group 148,309 242
Lloyds TSB Group 111,273 879
LogicaCMG 18,962 65
Man Group 7,059 212
Marks & Spencer Group 45,537 300
Mitchells & Butlers 16,865 80
National Grid Transco 57,305 454
Next 5,768 147
Pearson 19,169 234
Peninsular and Oriental Steam
Navigation 22,261 87
Provident Financial 8,271 97
Prudential 40,595 334
Reckitt Benckiser 12,173 330
Reed Elsevier 28,391 274
Rentokil Initial 44,742 120
Reuters Group 30,832 206
Rio Tinto 19,871 479
Royal & Sun Alliance Insurance
Group 75,833 113
Royal Bank of Scotland Group 51,540 1,556
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
UNITED KINGDOM -- CONTINUED
Sage Group 39,582 $ 128
Scottish & Newcastle 19,193 150
Scottish & Southern Energy 19,847 252
Scottish Power 40,884 297
Severn Trent 8,781 130
Shell Transport & Trading 170,524 1,233
Smith & Nephew 23,240 244
Smiths Group 15,319 196
Stagecoach Group 26,997 41
Tesco 142,208 649
Unilever 66,595 633
United Utilities 17,847 178
United Utilities, Cl A 9,915 62
Vodafone Group 1,266,880 2,979
Wolseley 15,140 228
WPP Group 23,967 239
--------
35,826
--------
Total Foreign Common Stock
(Cost $317,324) 354,707
--------
EXCHANGE TRADED FUNDS (1.8%)
iShares MSCI EAFE Index
Fund (D) 25,715 3,558
iShares MSCI Germany Index
Fund 67,773 1,054
iShares MSCI Italy Index Fund 27,534 556
iShares MSCI Japan Index Fund 159,560 1,594
--------
Total Exchange Traded Funds
(Cost $6,498) 6,762
--------
FOREIGN PREFERRED STOCK (0.7%)
AUSTRALIA (0.2%)
News Corp 72,001 609
--------
GERMANY (0.5%)
Fresenius Medical Care 2,658 143
Henkel KGaA (D) 6,278 524
Porsche 929 627
ProSieben SAT.1 Media 12,064 191
Volkswagen 11,680 341
--------
1,826
--------
Total Foreign Preferred Stock
(Cost $2,095) 2,435
--------
COMMON STOCK (0.1%)
General Electric 8,355 259
--------
Total Common Stock
(Cost $161) 259
--------
79
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
INTERNATIONAL EQUITY INDEX FUND--CONCLUDED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
WARRANTS (0.0%)
SINGAPORE (0.0%)
City Developments,
Expires 05/10/06*
(Cost $0) 2,800 $ 4
--------
Total Warrants 4
--------
CASH EQUIVALENT (19.2%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 71,374,411 71,374
--------
Total Cash Equivalent
(Cost $71,374) 71,374
--------
Total Investments (117.3%)
(Cost $397,452) 435,541
--------
OTHER ASSETS AND LIABILITIES (-17.3%)
Payable Upon Return of Securities Loaned (71,374)
Investment Advisory Fees Payable (249)
Custodian Fees Payable (60)
Administration Fees Payable (21)
Distribution Fees Payable (8)
Transfer Agent Shareholder
Servicing Fees Payable (2)
Payable to Adviser (1)
Receivable from Affiliated Funds 1
Other Assets and Liabilities, Net 7,581
--------
Total Other Assets and Liabilities (64,133)
--------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 31,608,699 outstanding shares
of beneficial interest 387,145
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 1,375,712 outstanding shares
of beneficial interest 9,433
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 487,306 outstanding shares
of beneficial interest 6,429
Undistributed net investment income 3,035
Accumulated net realized loss on investments (72,810)
Net unrealized appreciation on investments 38,089
Net unrealized appreciation on foreign currency
and translation of other assets and liabilities
in foreign currency investments 87
--------
Total Net Assets (100.0%) $371,408
========
- --------------------------------------------------------------------------------
VALUE
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($351,162,742 / 31,608,699 shares) $11.11
========
Net Asset Value and Redemption
Price Per Share -- A Shares
($15,037,096 / 1,375,712 shares) $10.93
========
Maximum Offering Price Per Share --
A Shares ($10.93 / 96.25%) $11.36
========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($5,208,181 / 487,306 shares) $10.69
========
At May 31, 2004, sector diversification of the Fund was as follows (unaudited):
% OF VALUE
SECTOR DIVERSIFICATION NET ASSETS (000)
- ---------------------- -------------- -------------
FOREIGN COMMON STOCK
Banking 17.7% $ 65,982
Telephones & Telecommunications 10.9 40,497
Finance 10.5 39,141
Energy 7.7 28,434
Automotive 5.4 19,985
Technology 5.0 18,755
Health Care 5.0 18,690
Electrical Services 4.7 17,430
Chemicals 3.8 14,010
Food, Beverage & Tobacco 3.4 12,640
Services 2.7 9,865
Retail 2.5 9,150
Transportation 2.5 9,147
Machinery 2.4 8,954
Real Estate Investment Trusts 1.9 7,089
Building & Construction 1.4 5,262
Photographic Equipment & Supplies 1.1 4,254
Printing & Publishing 1.0 3,701
Wholesale 1.0 3,627
Metals 1.0 3,533
Apparel/Textiles 0.8 2,921
Utilities 0.8 2,803
Miscellaneous Manufacturing 0.6 2,268
Paper & Packaging 0.5 2,012
Aerospace & Defense 0.5 1,765
Entertainment 0.4 1,474
Office Furniture & Fixtures 0.3 1,066
Lumber & Wood Products -- 151
Containers -- 101
----- --------
TOTAL FOREIGN COMMON STOCK 95.5 354,707
SHORT-TERM INVESTMENT 19.2 71,374
EXCHANGE TRADED FUNDS 1.8 6,762
FOREIGN PREFERRED STOCK 0.7 2,435
COMMON STOCK 0.1 259
WARRANTS 0.0 4
----- --------
TOTAL INVESTMENTS 117.3 435,541
TOTAL OTHER ASSETS AND
LIABILITIES, NET (17.3) (64,133)
----- --------
TOTAL NET ASSETS 100.0% $371,408
===== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
80
<page>
- --------------------------------------------------------------------------------
LIFE VISION AGGRESSIVE GROWTH FUND+
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
EQUITY FUNDS (96.0%)
STI Classic Capital Appreciation
Fund, T Shares 1,163,723 $14,349
STI Classic Growth and Income
Fund, T Shares 592,154 8,717
STI Classic International Equity
Index Fund, T Shares 680,094 7,556
STI Classic Mid-Cap Equity
Fund, T Shares 212,168 2,189
STI Classic Small Cap Growth
Stock Fund, T Shares 109,059 2,208
STI Classic Small Cap Value
Equity Fund, T Shares 120,575 2,202
STI Classic Value Income
Stock Fund, T Shares 415,203 4,762
-------
Total Equity Funds
(Cost $37,790) 41,983
-------
MONEY MARKET FUND (3.9%)
STI Classic Prime Quality
Money Market Fund,
T Shares 1,693,084 1,693
-------
Total Money Market Fund
(Cost $1,693) 1,693
-------
Total Investments (99.9%)
(Cost $39,483) 43,676
-------
OTHER ASSETS AND LIABILITIES (0.1%)
Investment Advisory Fees Payable (4)
Administration Fees Payable (3)
Other Assets and Liabilities, Net 33
-------
Total Other Assets and Liabilities 26
-------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 3,753,944 outstanding shares
of beneficial interest $37,291
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 84,711 outstanding shares
of beneficial interest 858
Paid in Capital -- B Shares
(unlimited authorization -- no par value)
based on 429,033 outstanding shares
of beneficial interest 3,833
Accumulated net realized loss on investments (2,473)
Net unrealized appreciation on investments 4,193
-------
Total Net Assets (100.0%) $43,702
=======
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($38,468,014 / 3,753,944 shares) $10.25
=======
Net Asset Value and Redemption
Price Per Share -- A Shares
($866,707 / 84,711 shares) $10.23
=======
Maximum Offering Price Per Share --
A Shares ($10.23 / 96.25%) $10.63
=======
Net Asset Value and Offering
Price Per Share -- B Shares (1)
($4,367,655 / 429,033 shares) $10.18
=======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
81
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
LIFE VISION CONSERVATIVE FUND+
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FIXED INCOME FUNDS (71.3%)
STI Classic High Income
Fund, T Shares 37,183 $ 274
STI Classic Institutional Total
Return Bond Fund, T Shares 55,857 548
STI Classic Limited-Term Federal
Mortgage Securities Fund,
T Shares 268,242 2,731
STI Classic U.S. Government
Securities Fund, T Shares 37,003 383
------
Total Fixed Income Funds
(Cost $4,027) 3,936
------
EQUITY FUNDS (25.8%)
STI Classic Capital Appreciation
Fund, T Shares 22,825 281
STI Classic Growth and Income
Fund, T Shares 19,166 282
STI Classic International Equity
Index Fund, T Shares 25,895 288
STI Classic Mid-Cap Equity
Fund, T Shares 10,986 113
STI Classic Small Cap Growth
Stock Fund, T Shares 11,295 229
STI Classic Small Cap Value
Equity Fund, T Shares 12,487 228
------
Total Equity Funds
(Cost $1,217) 1,421
------
MONEY MARKET FUND (3.8%)
STI Classic Prime Quality
Money Market Fund, T Shares 209,828 210
------
Total Money Market Fund
(Cost $210) 210
------
Total Investments (100.9%)
(Cost $5,454) 5,567
------
OTHER ASSETS AND LIABILITIES (-0.9%)
Receivable from Distributor 1
Other Assets and Liabilities, Net (52)
------
Total Other Assets and Liabilities (51)
------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 2,765 outstanding shares
of beneficial interest $ 30
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 43,628 outstanding shares
of beneficial interest 477
Paid in Capital -- B Shares
(unlimited authorization -- no par value)
based on 461,435 outstanding shares
of beneficial interest 4,874
Undistributed net investment income 12
Accumulated net realized gain on investments 10
Net unrealized appreciation on investments 113
------
Total Net Assets (100.0%) $5,516
======
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($30,059 / 2,765 shares) $10.87
======
Net Asset Value and Redemption
Price Per Share -- A Shares
($473,958 / 43,628 shares) $10.86
======
Maximum Offering Price Per Share --
A Shares ($10.86 / 96.25%) $11.28
======
Net Asset Value and Offering
Price Per Share -- B Shares (1)
($5,011,868 / 461,435 shares) $10.86
======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
82
<page>
- --------------------------------------------------------------------------------
LIFE VISION GROWTH AND INCOME FUND+
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
EQUITY FUNDS (70.7%)
STI Classic Capital Appreciation
Fund, T Shares 1,311,482 $16,170
STI Classic Growth and Income
Fund, T Shares 978,772 14,408
STI Classic International Equity
Index Fund, T Shares 1,157,109 12,855
STI Classic Mid-Cap Equity
Fund, T Shares 438,382 4,524
STI Classic Small Cap Growth
Stock Fund, T Shares 180,273 3,651
STI Classic Small Cap Value
Equity Fund, T Shares 199,310 3,639
STI Classic Value Income
Stock Fund, T Shares 701,883 8,051
-------
Total Equity Funds
(Cost $54,182) 63,298
-------
FIXED INCOME FUNDS (26.3%)
STI Classic High Income
Fund, T Shares 593,304 4,379
STI Classic Institutional Total
Return Bond Fund, T Shares 712,989 6,994
STI Classic Limited-Term
Federal Mortgage Securities
Fund, T Shares 770,372 7,842
STI Classic U.S. Government
Securities Fund, T Shares 421,705 4,365
-------
Total Fixed Income Funds
(Cost $23,752) 23,580
-------
MONEY MARKET FUND (3.0%)
STI Classic Prime Quality Money
Market Fund, T Shares 2,679,990 2,680
-------
Total Money Market Fund
(Cost $2,680) 2,680
-------
Total Investments (100.0%)
(Cost $80,614) 89,558
-------
OTHER ASSETS AND LIABILITIES (0.0%)
Investment Advisory Fees Payable (10)
Administration Fees Payable (5)
Distribution Fees Payable (4)
Other Assets andLiabilities, Net 30
-------
Total Other Assets and Liabilities 11
-------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 6,978,237 outstanding shares
of beneficial interest $72,175
Paid in Capital -- A Shares
(unlimited authorization --- no par value)
based on 132,677 outstanding shares
of beneficial interest 1,413
Paid in Capital -- B Shares
(unlimited authorization -- no par value)
based on 1,216,152 outstanding shares
of beneficial interest 12,119
Undistributed net investment income 133
Accumulated net realized loss on investments (5,215)
Net unrealized appreciation on investments 8,944
-------
Total Net Assets (100.0%) $89,569
=======
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($75,082,805 / 6,978,237 shares) $10.76
=======
Net Asset Value and Redemption
Price Per Share -- A Shares
($1,426,052 / 132,677 shares) $10.75
=======
Maximum Offering Price Per Share --
A Shares ($10.75 / 96.25%) $11.17
=======
Net Asset Value and Offering
Price Per Share -- B Shares (1)
($13,060,578 / 1,216,152 shares) $10.74
=======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
83
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
LIFE VISION MODERATE GROWTH FUND+
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
EQUITY FUNDS (56.0%)
STI Classic Capital Appreciation
Fund, T Shares 1,586,543 $ 19,562
STI Classic Growth and Income
Fund, T Shares 856,374 12,606
STI Classic International Equity
Index Fund, T Shares 1,671,389 18,569
STI Classic Mid-Cap Equity
Fund, T Shares 681,900 7,037
STI Classic Small Cap Growth
Stock Fund, T Shares 420,646 8,518
STI Classic Small Cap Value
Equity Fund, T Shares 387,546 7,077
STI Classic Value Income Stock
Fund, T Shares 363,902 4,174
--------
Total Equity Funds
(Cost $64,077) 77,543
--------
FIXED INCOME FUNDS (41.2%)
STI Classic High Income Fund,
T Shares 922,602 6,809
STI Classic Institutional Total
Return Bond Fund, T Shares 2,078,959 20,395
STI Classic Limited-Term
Federal Mortgage Securities
Fund, T Shares 2,262,902 23,035
STI Classic U.S. Government
Securities Fund, T Shares 655,802 6,788
--------
Total Fixed Income Funds
(Cost $57,343) 57,027
--------
MONEY MARKET FUND (2.8%)
STI Classic Prime Quality Money
Market Fund, T Shares 3,898,065 3,898
--------
Total Money Market Fund
(Cost $3,898) 3,898
--------
Total Investments (100.0%)
(Cost $125,318) 138,468
--------
OTHER ASSETS AND LIABILITIES (0.0%)
Investment Advisory Fees Payable (16)
Administration Fees Payable (8)
Distribution Fees Payable (6)
Custodian Fees Payable (1)
Transfer Agent Shareholder
Servicing Fees Payable (1)
--------
Total Other Assets and Liabilities (32)
--------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization --- no par value)
based on 12,089,343 outstanding shares
of beneficial interest $115,189
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 352,192 outstanding shares
of beneficial interest 3,517
Paid in Capital -- B Shares
(unlimited authorization -- no par value)
based on 1,320,167 outstanding shares
of beneficial interest 12,238
Undistributed net investment income 340
Accumulated net realized loss on investments (5,998)
Net unrealized appreciation on investments 13,150
--------
Total Net Assets (100.0%) $138,436
========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($121,658,938 / 12,089,343 shares) $10.06
========
Net Asset Value and Redemption
Price Per Share -- A Shares
($3,541,288 / 352,192 shares) $10.05
========
Maximum Offering Price Per Share --
A Shares ($10.05 / 96.25%) $10.44
========
Net Asset Value and Offering
Price Per Share -- B Shares (1)
($13,235,793 / 1,320,167 shares) $10.03
========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
84
<page>
- --------------------------------------------------------------------------------
MID-CAP EQUITY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (99.5%)
BASIC MATERIALS (7.2%)
Ball 63,200 $ 4,317
Lennar, Cl A 39,800 1,827
Lubrizol 51,150 1,694
MDC Holdings 27,300 1,756
NVR* (D) 3,280 1,501
Ryland Group 50,000 3,980
--------
15,075
--------
CAPITAL GOODS (5.7%)
Acuity Brands 42,720 1,054
American Axle & Manufacturing
Holdings* 59,000 2,062
Eaton 37,140 2,167
Freeport-McMoRan Copper &
Gold, Cl B 21,020 707
MTC Technologies* 20,000 531
Rockwell Collins 101,940 3,062
Textron 44,900 2,454
--------
12,037
--------
COMMUNICATION SERVICES (1.1%)
Avaya* 118,797 1,881
Western Wireless* 16,700 457
--------
2,338
--------
COMPUTER SOFTWARE (6.3%)
BMC Software* 41,825 738
Computer Associates
International 44,095 1,193
Electronic Arts* 69,100 3,512
Intuit* 44,790 1,755
Siebel Systems* 92,430 998
Storage Technology* 32,930 930
Sungard Data Systems* 27,500 762
Symantec* 41,760 1,913
Veritas Software* 54,875 1,460
--------
13,261
--------
CONSUMER CYCLICALS (14.5%)
7-Eleven* 79,700 1,368
Abercrombie & Fitch, Cl A* 73,500 2,678
Big 5 Sporting Goods* 45,880 1,120
Choice Hotels International 63,600 3,046
Coach* 26,900 1,173
Dollar General 72,900 1,414
Limited Brands 34,310 662
Marvel Enterprises* (D) 20,615 418
May Department Stores 101,800 2,918
McGraw-Hill 30,700 2,392
New York Times, Cl A 27,740 1,294
RadioShack 32,040 974
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER CYCLICALS -- CONTINUED
Scholastic* 46,900 $ 1,324
Sears Roebuck 23,000 874
Staples 49,200 1,357
TJX 66,060 1,646
Xerox* 170,960 2,315
Yum! Brands* 96,400 3,615
--------
30,588
--------
CONSUMER STAPLES (3.1%)
Archer-Daniels-Midland 27,780 462
HJ Heinz 71,080 2,654
RJ Reynolds Tobacco Holdings 58,880 3,309
--------
6,425
--------
ENERGY (4.9%)
Amerada Hess 47,530 3,355
Arch Coal 22,000 715
Ashland 58,600 2,763
Marathon Oil 101,720 3,392
--------
10,225
--------
FINANCE (22.9%)
Annaly Mortgage Management
REIT (D) 94,040 1,671
Arch Capital Group* 11,100 428
Bear Stearns 7,530 610
Brandywine Realty Trust REIT 34,130 918
Cigna 61,700 4,183
Comerica 62,810 3,556
Countrywide Financial 19,510 1,258
E*TRADE Financial* 90,590 1,034
Equity Office Properties Trust
REIT 77,300 2,083
First Citizens Bancshares, Cl A 18,600 2,158
Hospitality Properties Trust 82,600 3,381
Jefferies Group 37,500 1,227
Legg Mason 8,728 766
Lexington Corporate Properties
Trust REIT 69,270 1,327
Lincoln National 65,840 3,127
MBIA 14,900 825
PartnerRe 37,500 2,096
PMI Group 43,790 1,890
Radian Group 52,700 2,424
Senior Housing Properties Trust 55,726 907
St. Paul Travelers 56,470 2,241
Student Loan 29,200 4,208
Union Planters 34,700 1,045
UnionBanCal 23,910 1,377
Webster Financial 71,740 3,360
--------
48,100
--------
85
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
MID-CAP EQUITY FUND--CONCLUDED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
HEALTH CARE (9.4%)
Anthem* 46,400 $ 4,108
Biogen Idec* 70,660 4,391
Coventry Health Care* 24,185 1,114
Humana* 68,280 1,166
ImClone Systems* 22,900 1,695
Kinetic Concepts* 11,800 572
Laboratory Corp of America
Holdings* 36,350 1,503
Onyx Pharmaceuticals* 14,851 698
Pacificare Health Systems* 19,680 727
Sepracor* 32,900 1,464
Zimmer Holdings* 26,500 2,262
--------
19,700
--------
SEMICONDUCTORS (3.7%)
Altera* 50,834 1,164
Arrow Electronics* 78,795 2,145
Molex (D) 41,890 1,230
National Semiconductor* 63,400 1,374
Sanmina-SCI* 182,900 1,935
--------
7,848
--------
SERVICES (4.9%)
Caesar's Entertainment* 12,240 169
Deluxe 39,100 1,674
Electronic Data Systems 36,980 605
H&R Block 39,760 1,942
International Game Technology 34,000 1,336
Iron Mountain* (D) 13,600 602
Knight-Ridder 23,600 1,793
ServiceMaster 129,110 1,570
Universal Technical Institute* 15,720 641
--------
10,332
--------
TECHNOLOGY (7.5%)
Advanced Micro Devices* 38,600 600
Apple Computer* 20,530 576
Avnet* 74,000 1,732
Corning* 143,000 1,772
Lam Research* 31,800 799
LSI Logic* 103,670 850
Monsanto* 104,360 3,600
Network Associates* 25,060 417
Novellus Systems* 54,880 1,827
Pitney Bowes 81,520 3,614
--------
15,787
--------
TRANSPORTATION (0.8%)
Ryder System 48,100 1,787
--------
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
UTILITIES (7.5%)
Citizens Communications* 91,320 $ 1,160
Edison International 60,310 1,456
Equitable Resources 88,300 4,274
Northeast Utilities 165,900 3,168
UGI 134,500 4,316
Xcel Energy 80,870 1,374
--------
15,748
--------
Total Common Stock
(Cost $186,642) 209,251
--------
CASH EQUIVALENT (2.2%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 4,603,100 4,603
--------
Total Cash Equivalent
(Cost $4,603) 4,603
--------
REPURCHASE AGREEMENT (1.3%)
BNP Paribas
0.980%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $2,630,779
(collateralized by FNMA
obligations; total market
value $2,683,627) (C) $2,631 2,631
--------
Total Repurchase Agreement
(Cost $2,631) 2,631
--------
Total Investments (103.0%)
(Cost $193,876) 216,485
--------
OTHER ASSETS AND LIABILITIES (-3.0%)
Payable Upon Return of Securities Loaned (4,603)
Investment Advisory Fees Payable (198)
Distribution Fees Payable (12)
Administration Fees Payable (12)
Custodian Fees Payable (2)
Transfer Agent Shareholder
Servicing Fees Payable (1)
Other Assets and Liabilities, Net (1,406)
--------
Total Other Assets and Liabilities (6,234)
--------
86
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 17,168,117 outstanding shares
of beneficial interest $179,467
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 1,725,977 outstanding shares
of beneficial interest 16,821
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 1,720,470 outstanding shares
of beneficial interest 20,096
Undistributed net investment income 77
Accumulated net realized loss on investments (28,819)
Net unrealized appreciation on investments 22,609
--------
Total Net Assets (100.0%) $210,251
========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($177,128,000 / 17,168,117 shares) $10.32
========
Net Asset Value and Redemption
Price Per Share -- A Shares
($17,125,195 / 1,725,977 shares) $9.92
========
Maximum Offering Price Per Share --
A Shares ($9.92 / 96.25%) $10.31
========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($15,998,255 / 1,720,470 shares) $9.30
========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
87
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
MID-CAP VALUE EQUITY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (96.0%)
BASIC MATERIALS (6.6%)
Air Products & Chemicals 38,500 $ 1,924
Bemis 48,000 1,322
Lubrizol (D) 63,300 2,096
PPG Industries 38,500 2,302
Pulte Homes 14,700 776
Sappi Ltd. ADR 135,000 1,902
----------
10,322
----------
CAPITAL GOODS (8.2%)
American Power Conversion (D) 71,600 1,296
Empresa Brasileira de
Aeronautica ADR* (D) 62,600 1,594
Lear 18,600 1,102
Masco 68,400 1,980
Pentair (D) 24,200 1,483
Rockwell Automation 57,000 1,930
Sonoco Products 60,600 1,509
Teleflex 41,300 1,919
----------
12,813
----------
COMMUNICATION SERVICES (3.2%)
Belo, Cl A (D) 53,800 1,583
CenturyTel (D) 88,500 2,645
Harris 17,100 791
----------
5,019
----------
CONSUMER CYCLICALS (13.6%)
Abercrombie & Fitch, Cl A* (D) 55,400 2,018
Blyth (D) 68,900 2,250
Dollar General 144,900 2,811
Hilton Hotels 103,200 1,791
Leggett & Platt 102,900 2,601
Mattel 148,300 2,592
Performance Food Group* (D) 37,400 1,228
Pier 1 Imports (D) 97,000 1,828
Regal Entertainment Group 70,500 1,509
RR Donnelley & Sons 47,100 1,425
VF 23,600 1,109
----------
21,162
----------
CONSUMER STAPLES (6.5%)
Adolph Coors, Cl B (D) 16,300 1,050
Bunge 19,000 705
Clorox 39,300 2,058
HJ Heinz 58,000 2,166
Outback Steakhouse 27,300 1,159
PepsiAmericas 53,200 1,130
Smithfield Foods* (D) 62,600 1,815
----------
10,083
----------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
ENERGY (5.0%)
Anadarko Petroleum 21,400 $ 1,167
Cooper Cameron* (D) 18,900 876
GlobalSantaFe 50,600 1,272
Marathon Oil 55,500 1,850
Noble Energy 28,900 1,310
Tidewater (D) 47,400 1,310
----------
7,785
----------
FINANCE (25.9%)
AG Edwards (D) 39,600 1,481
American Financial Group 45,200 1,366
Assurant 51,900 1,303
Assured Guaranty* 93,600 1,591
Astoria Financial (D) 40,800 1,562
Banknorth Group (D) 41,900 1,380
Bear Stearns 18,900 1,532
Comerica 22,800 1,291
Developers Diversified Realty
REIT 49,400 1,699
Equity Residential REIT 37,800 1,113
First Industrial Realty Trust
REIT (D) 32,600 1,168
FirstMerit (D) 63,400 1,566
Hartford Financial Services
Group (D) 22,400 1,481
Keycorp 47,600 1,495
Nationwide Financial Services,
Cl A (D) 39,300 1,436
Northern Trust 44,900 1,929
Old Republic International 63,550 1,446
PartnerRe 26,400 1,475
PMI Group 42,000 1,813
Protective Life 21,400 791
Provident Financial Services (D) 103,500 1,888
Regions Financial 61,200 2,328
Safeco 18,500 776
South Financial Group (D) 56,300 1,552
SouthTrust 46,700 1,582
Vornado Realty Trust 29,100 1,590
Zions Bancorporation 27,900 1,710
----------
40,344
----------
HEALTH CARE (5.5%)
AmerisourceBergen 19,900 1,194
Health Management Associates,
Cl A (D) 123,700 2,720
IVAX* (D) 54,900 1,337
Mylan Laboratories 84,900 1,894
Shire Pharmaceuticals ADR* 48,600 1,341
----------
8,486
----------
88
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
SERVICES (4.8%)
Brink's 47,500 $ 1,469
Cintas (D) 46,200 2,097
Knight-Ridder (D) 13,200 1,003
Reynolds & Reynolds, Cl A 64,200 1,926
Viad 37,400 938
----------
7,433
----------
TECHNOLOGY (8.8%)
Autodesk 36,600 1,312
Avnet* 44,300 1,037
Celestica* (D) 82,900 1,558
Diebold 31,500 1,547
Ingram Micro, Cl A* 56,800 821
Intersil, Cl A 112,700 2,395
Network Associates* 67,500 1,124
Pitney Bowes 30,700 1,361
Storage Technology* 41,900 1,184
Vishay Intertechnology* (D) 66,400 1,253
----------
13,592
----------
TRANSPORTATION (1.9%)
Skywest (D) 82,500 1,380
Werner Enterprises (D) 81,600 1,558
----------
2,938
----------
UTILITIES (6.0%)
Ameren (D) 24,500 1,083
American Electric Power 30,000 953
FirstEnergy 28,400 1,107
FPL Group (D) 14,300 912
KeySpan (D) 21,800 772
NiSource 58,800 1,191
Pinnacle West Capital (D) 23,300 939
PPL 28,300 1,221
Progress Energy (D) 27,800 1,184
----------
9,362
----------
Total Common Stock
(Cost $132,478) 149,339
----------
CASH EQUIVALENTS (24.8%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 31,010,725 31,011
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CASH EQUIVALENTS -- CONTINUED
Federated Prime Money Market
Obligations Fund 2,562,393 $ 2,562
Federated Prime Value Money
Market Fund 5,070,668 5,071
----------
Total Cash Equivalents
(Cost $38,644) 38,644
----------
Total Investments (120.8%)
(Cost $171,122) 187,983
----------
OTHER ASSETS AND LIABILITIES (-20.8%)
Payable Upon Return of Securities Loaned (31,011)
Investment Advisory Fees Payable (146)
Administration Fees Payable (9)
Custodian Fees Payable (1)
Distribution Fees Payable (1)
Trustees' Fees Payable (1)
Other Assets and Liabilities, Net (1,139)
----------
Total Other Assets and Liabilities (32,308)
----------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 13,435,972 outstanding shares
of beneficial interest 147,943
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 55,794 outstanding shares
of beneficial interest 586
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 723,199 outstanding shares
of beneficial interest 7,298
Undistributed net investment income 142
Accumulated net realized loss on investments (17,155)
Net unrealized appreciation on investments 16,861
----------
Total Net Assets (100.0%) $ 155,675
==========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($147,184,475 / 13,435,972 shares) $10.95
==========
Net Asset Value and Redemption
Price Per Share -- A Shares
($610,294 / 55,794 shares) $10.94
==========
Maximum Offering Price Per Share --
A Shares ($10.94 / 96.25%) $11.37
==========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($7,879,935 / 723,199 shares) $10.90
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
89
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
SMALL CAP GROWTH STOCK FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (99.1%)
BASIC MATERIALS (3.5%)
Agrium 280,000 $ 3,685
Commercial Metals 200,000 6,020
Georgia Gulf (D) 160,000 5,411
Hercules* (D) 250,000 2,645
Imco Recycling* 330,000 4,158
Reliance Steel & Aluminum (D) 115,000 4,208
Silgan Holdings* 110,000 4,613
----------
30,740
----------
CAPITAL GOODS (10.5%)
Actuant* (D) 185,000 6,333
Albany International, Cl A (D) 180,000 5,488
American Axle & Manufacturing
Holdings* (D) 45,000 1,573
Bandag (D) 75,000 3,178
Bennett Environmental* (D) 250,000 3,310
Briggs & Stratton (D) 100,000 7,588
Copart* 80,000 1,972
Dycom Industries* (D) 195,000 4,815
ElkCorp (D) 185,000 4,588
Encore Wire* (D) 175,000 5,331
Fedders 366,921 1,629
Gardner Denver* 80,000 2,095
Griffon* (D) 300,000 6,984
Ii-Vi* 60,000 1,547
Mercury Computer Systems* 164,783 3,696
Mueller Industries (D) 140,000 4,578
Noble International 205,000 5,914
Orbital Sciences* (D) 265,000 3,326
Sensytech* 210,000 4,530
Simpson Manufacturing (D) 85,000 4,658
Thor Industries (D) 230,000 6,396
Ultralife Batteries* (D) 90,000 1,797
----------
91,326
----------
COMMUNICATION SERVICES (2.9%)
Anaren* 52,800 840
Ditech Communications* 340,000 7,007
EMS Technologies* 210,000 4,569
Network Equipment
Technologies* (D) 257,289 1,894
Nice Systems* 190,000 4,146
Radyne ComStream (D) 530,000 4,622
Symmetricom* (D) 200,000 1,580
TTI Team Telecom
International* 135,400 523
----------
25,181
----------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE (9.1%)
Activision* (D) 300,000 $ 4,746
American Software, Cl A 560,000 3,578
Ansys* 90,100 3,882
Ascential Software* 100,000 1,605
Aspen Technology* 530,000 3,344
Authentidate Holding* 440,000 5,544
Captiva Software* 430,000 4,330
Ciber* (D) 170,000 1,513
Digi International* 480,000 4,987
Epicor Software* (D) 175,000 2,343
Hyperion Solutions* (D) 130,000 5,153
Lionbridge Technologies* 520,000 4,072
SafeNet* (D) 114,000 2,656
Secure Computing* (D) 360,000 3,190
Sonic Solutions* (D) 250,000 5,313
THQ* (D) 220,000 4,640
Transaction Systems Architects,
Cl A* (D) 285,000 5,378
Verint Systems* 206,888 6,366
WebEx Communications* (D) 300,000 7,083
----------
79,723
----------
CONSUMER CYCLICALS (18.1%)
4Kids Entertainment* (D) 230,000 4,979
Aeropostale* (D) 240,000 6,310
America's Car Mart* (D) 60,000 1,770
AnnTaylor Stores* (D) 90,000 2,548
Bebe Stores* (D) 260,000 5,195
Bombay* (D) 340,000 1,979
Brown Shoe (D) 100,000 4,133
Cache* 240,000 6,242
Cash America International 60,000 1,210
Casual Male Retail Group* (D) 350,000 2,380
CBRL Group (D) 130,000 4,192
CellStar* 190,000 1,149
Christopher & Banks (D) 80,000 1,520
Coldwater Creek* (D) 45,000 1,197
Conn's* (D) 180,000 3,071
Cooper Tire & Rubber (D) 200,000 4,218
CSK Auto* (D) 360,000 6,174
Electronics Boutique
Holdings* (D) 125,000 3,445
Furniture Brands
International (D) 50,000 1,289
Genesco* (D) 150,000 3,765
Goody's Family Clothing (D) 302,831 3,616
Guitar Center* (D) 150,000 6,435
Hooker Furniture 104,835 2,245
90
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER CYCLICALS -- CONTINUED
HOT Topic* (D) 140,000 $ 3,025
Hovnanian Enterprises, Cl A* 50,000 1,765
Jos A. Bank Clothiers* (D) 275,000 8,962
K2* (D) 250,000 3,680
Levitt* 90,000 2,163
MarineMax* 160,000 4,264
O'Charleys* (D) 220,000 4,006
O'Reilly Automotive* (D) 55,000 2,471
Penn National Gaming* 250,000 7,495
Prime Hospitality* 350,000 3,469
Quiksilver* (D) 130,000 3,012
Rare Hospitality
International* (D) 190,000 4,860
Select Comfort* (D) 220,000 5,962
Sonic* (D) 120,000 2,662
Sports Authority* (D) 170,000 5,797
Standard-Pacific 6,770 345
Steak N Shake* 119,082 2,095
Steiner Leisure* (D) 280,000 5,485
Tuesday Morning* 150,000 4,283
Zale* (D) 60,000 3,274
----------
158,137
----------
CONSUMER STAPLES (2.9%)
Cott* 210,000 6,669
DEL Laboratories* 75,000 2,160
Jarden* (D) 160,000 5,600
Rayovac* 140,000 3,794
Sanderson Farms (D) 75,000 3,450
Smart & Final* 220,000 3,419
----------
25,092
----------
ENERGY (6.4%)
Cal Dive International* (D) 160,000 4,495
Comstock Resources* 90,000 1,693
Core Laboratories* 220,000 4,609
Denbury Resources* (D) 100,000 1,840
Energen (D) 80,000 3,584
Harvest Natural Resources* 350,000 4,445
Headwaters* (D) 300,000 6,270
Key Energy Services* 300,000 2,904
Magnum Hunter Resources* (D) 500,000 5,035
Maverick Tube* (D) 225,000 5,175
National-Oilwell* (D) 140,000 3,875
Premcor* (D) 145,000 5,311
Torch Offshore* (D) 92,848 245
Ultra Petroleum* 110,000 3,372
Unit* 100,000 2,849
----------
55,702
----------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FINANCE (5.2%)
Affiliated Managers Group* (D) 110,000 $ 5,363
American Safety Insurance
Holdings Ltd.* 115,000 1,566
Arch Capital Group* (D) 90,000 3,472
Bank of the Ozarks (D) 120,000 2,904
BankAtlantic Bancorp, Cl A 200,000 3,200
Fremont General (D) 180,685 4,056
Northwest Bancorp 90,000 2,002
Phoenix (D) 350,000 4,099
R&G Financial, Cl B 160,000 5,019
RLI* 70,000 2,518
South Financial Group (D) 115,000 3,170
United Community Banks 90,000 2,130
Westcorp 135,000 5,798
----------
45,297
----------
HEALTH CARE (13.9%)
American Medical Security
Group* 190,000 4,908
Andrx* (D) 160,000 4,397
Applera - Celera Genomics
Group* (D) 125,901 1,414
Axcan Pharma* 200,000 3,846
Bradley Pharmaceuticals* (D) 260,000 6,053
Conmed* (D) 160,000 4,072
Connetics* (D) 300,000 6,411
Dendrite International* (D) 170,000 2,854
Endo Pharmaceuticals Holdings* 100,000 2,264
Gentiva Health Services* (D) 230,000 3,652
Guilford Pharmaceuticals* (D) 220,000 1,364
Hologic* (D) 80,000 1,645
ICU Medical* (D) 85,000 2,831
Integra LifeSciences
Holdings* (D) 110,000 3,528
Kos Pharmaceuticals* (D) 110,000 3,660
Martek Biosciences* (D) 110,000 7,037
Palomar Medical
Technologies* (D) 170,000 2,859
Per-Se Technologies* 286,400 3,723
Possis Medical* (D) 270,000 7,700
Protein Design Labs* 377,109 7,357
Province Healthcare* (D) 250,000 4,005
Renal Care Group* (D) 165,000 5,407
Salix Pharmaceuticals* 170,000 5,129
Select Medical 180,000 2,414
Sierra Health Services* (D) 120,000 5,135
Sybron Dental Specialties* (D) 120,000 3,269
Taro Pharmaceuticals
Industries* (D) 30,000 1,323
Ventana Medical Systems* (D) 120,000 6,192
WellChoice* (D) 100,000 4,118
West Pharmaceutical Services 60,000 2,281
----------
120,848
----------
91
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
SMALL CAP GROWTH STOCK FUND--CONCLUDED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
SEMICONDUCTORS (3.3%)
Axcelis Technologies* (D) 380,000 $ 4,579
Cypress Semiconductor* (D) 430,000 7,034
Integrated Device
Technology* (D) 460,000 6,707
NAM TAI Electronics 150,000 2,829
Power-One* (D) 600,000 6,048
Standard Microsystems* 64,200 1,584
----------
28,781
----------
SERVICES (7.3%)
Concorde Career Colleges* 95,000 1,404
Corrections Corp of
America* (D) 135,000 5,165
Dollar Thrifty Automotive
Group* (D) 160,000 4,195
Getty Images* (D) 50,000 2,815
Gevity HR (D) 300,000 7,863
Global Payments 30,000 1,400
Kforce* (D) 300,000 2,748
Kroll* 250,000 9,135
Labor Ready* (D) 240,000 2,921
MPS Group* 140,000 1,551
Navigant Consulting* (D) 380,000 7,771
SM&A* 385,500 3,123
Ultimate Software Group* 400,000 5,140
Ultimate Software
Group* (B)(E) (F) 180,000 2,128
Unifirst 160,000 4,160
Volt Information Sciences* 82,000 2,107
----------
63,626
----------
TECHNOLOGY (11.1%)
Advanced Power Technology* 93,000 1,229
Aeroflex* (D) 350,000 4,466
AMX* 240,000 2,398
Anteon International* (D) 185,000 5,450
ATMI* (D) 250,000 6,405
Avocent* (D) 100,000 3,427
C-COR.net* (D) 400,000 3,556
CACI International, Cl A* 100,000 3,714
Computer Network
Technology* (D) 127,533 770
Creo Products* 350,000 2,824
CTS (D) 234,227 2,553
Dot Hill Systems* 580,000 5,510
Hypercom* (D) 725,000 4,872
InfoCrossing* (B) (E) (F) 122,000 1,482
InfoCrossing (D) 415,000 5,478
Itron* (D) 100,000 2,064
IXYS* 400,000 3,740
Kemet* 150,000 1,822
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
TECHNOLOGY -- CONTINUED
Lexar Media* (D) 160,000 $ 1,514
Newport* 100,000 1,453
Performance Technologies* 235,000 2,547
Radisys* 50,000 833
Rofin-Sinar Technologies* (D) 240,000 6,281
Rogers* (D) 130,000 7,988
Silicon Storage Technology* (D) 210,000 2,719
Telecommunication Systems* (D) 700,000 3,549
Transact Technologies* 175,000 5,639
Trimble Navigation Ltd.* (D) 80,000 2,162
----------
96,445
----------
TRANSPORTATION (4.9%)
Celadon Group* 247,000 3,562
General Maritime* 100,000 2,424
JB Hunt Transport Services* (D) 190,000 6,220
Marten Transport Ltd.* 295,000 5,121
OMI* 420,000 4,410
Overnite* 100,000 2,614
Pacer International* 140,000 2,673
PAM Transportation Services* 170,000 3,145
Skywest (D) 270,510 4,526
US Xpress Enterprises, Cl A* 163,000 2,111
Werner Enterprises (D) 295,000 5,631
----------
42,437
----------
Total Common Stock
(Cost $701,325) 863,335
----------
PREFERRED STOCK (0.1%)
CAPITAL GOODS (0.1%)
Fedders 21,500 504
----------
Total Preferred Stock
(Cost $510) 504
----------
WARRANTS (0.1%)
InfoCrossing, Expires
10/31/08* (B) (F) 139,109 743
----------
Total Warrants
(Cost $6) 743
----------
CASH EQUIVALENT (37.9%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 330,530,988 330,531
----------
Total Cash Equivalent
(Cost $330,531) 330,531
---------
92
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (0.7%)
BNP Paribas
0.980%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $5,692,774
(collateralized by FNMA
obligations; total market
value $5,807,159) (C) $5,692 $ 5,692
----------
Total Repurchase Agreement
(Cost $5,692) 5,692
----------
Total Investments (137.9%)
(Cost $1,038,064) 1,200,805
----------
OTHER ASSETS AND LIABILITIES (-37.9%)
Payable Upon Return of Securities Loaned (330,531)
Investment Advisory Fees Payable (822)
Administration Fees Payable (49)
Distribution Fees Payable (37)
Custodian Fees Payable (13)
Transfer Agent Shareholder
Servicing Fees Payable (4)
Trustees' Fees Payable (1)
Receivable from Affiliated Funds 2
Other Assets and Liabilities, Net 1,244
----------
Total Other Assets and Liabilities (330,211)
----------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 38,997,522 outstanding shares
of beneficial interest $583,262
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 2,037,532 outstanding shares
of beneficial interest 30,272
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 2,117,270 outstanding shares
of beneficial interest 35,251
Accumulated net realized gain on investments 59,068
Net unrealized appreciation on investments 162,741
----------
Total Net Assets (100.0%) $870,594
==========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($789,650,194 / 38,997,522 shares) $20.25
==========
Net Asset Value and Redemption
Price Per Share -- A Shares
($40,590,116 / 2,037,532 shares) $19.92
==========
Maximum Offering Price Per Share --
A Shares ($19.92 / 96.25%) $20.70
==========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($40,353,999 / 2,117,270 shares) $19.06
==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
93
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
SMALL CAP VALUE EQUITY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (99.9%)
BASIC MATERIALS (5.1%)
Agnico-Eagle Mines* 536,800 $ 7,467
Airgas 548,600 11,948
Cia Siderurgica Nacional ADR 59,300 2,764
Sappi Ltd. ADR (D) 458,100 6,455
Sociedad Quimica Minera de
Chile ADR 75,900 2,703
United States Steel 194,700 5,911
--------
37,248
--------
CAPITAL GOODS (17.3%)
Baldor Electric (D) 322,100 7,460
BorgWarner 271,400 11,247
Briggs & Stratton (D) 101,600 7,709
Cummins (D) 219,600 12,790
Empresa Brasileira de
Aeronautica ADR* (D) 441,616 11,244
Harsco 167,200 7,258
Lennox International (D) 258,789 4,265
LSI Industries 509,187 5,856
Makita ADR* (D) 814,200 11,594
Oshkosh Truck 136,600 7,069
Quixote 368,300 7,734
Snap-On 238,600 8,024
Tecumseh Products, Cl A 80,300 2,981
Tenaris ADR (D) 104,773 3,468
Valmont Industries 360,100 7,490
Valspar 230,700 11,000
--------
127,189
--------
COMMUNICATION SERVICES (2.9%)
Harris 454,728 21,027
--------
CONSUMER CYCLICALS (16.1%)
Bassett Furniture Industries 228,300 4,344
Benetton Group ADR* (D) 431,700 9,782
Blyth 158,100 5,162
CBRL Group (D) 296,800 9,572
Fairmont Hotels & Resorts 302,900 7,454
Grupo Elektra* 260,300 5,464
Intrawest (D) 443,100 6,602
John H. Harland 248,600 7,533
John Wiley & Sons, Cl A (D) 213,800 6,799
Lithia Motors (D) 271,300 6,489
Media General, Cl A 113,300 7,797
Movado Group 192,300 5,904
Natuzzi ADR 284,500 2,942
Nautilus Group (D) 579,200 8,729
Pier 1 Imports 474,900 8,952
Sturm Ruger 139,100 1,648
United Auto Group 276,100 7,988
Winnebago Industries 163,000 4,629
--------
117,790
--------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER STAPLES (4.1%)
Adolph Coors, Cl B (D) 106,300 $ 6,851
Church & Dwight 264,300 11,999
Ingles Markets, Cl A 86,800 920
JM Smucker 206,043 10,076
--------
29,846
--------
ENERGY (2.8%)
Arch Coal 246,300 8,005
Peabody Energy 259,100 12,887
--------
20,892
--------
FINANCE (15.7%)
American Financial Group 212,000 6,404
Banner 120,300 3,513
City National 125,500 8,104
Colonial BancGroup 420,400 7,559
First National Bankshares of
Florida (D) 248,633 4,838
FNB (D) 138,133 2,757
Glacier Bancorp 194,746 5,145
HCC Insurance Holdings (D) 284,600 9,432
Horizon Financial 242,706 4,471
Hub International* (D) 694,600 13,072
Jefferies Group (D) 261,800 8,569
PXRE Group Ltd. 180,500 4,491
Scottish Annuity & Life
Holdings Ltd. (D) 182,900 4,024
Seacoast Banking Corp
of Florida 227,700 4,563
Stancorp Financial Group 198,100 12,696
Washington Federal (D) 192,913 4,613
West Coast Bancorp 239,453 5,270
Wilmington Trust 161,500 5,943
--------
115,464
--------
HEALTH CARE (8.8%)
Cambrex 434,800 9,935
Cooper (D) 433,200 23,913
Invacare (D) 166,800 6,917
Mentor 431,700 13,836
Perrigo 470,200 9,620
--------
64,221
--------
SEMICONDUCTORS (1.2%)
NAM TAI Electronics 455,700 8,594
--------
SERVICES (9.5%)
ABM Industries 352,300 6,701
Brink's (D) 651,000 20,135
Chemed (D) 147,300 6,956
Factset Research Systems (D) 273,000 11,933
Reynolds & Reynolds, Cl A 795,800 23,874
--------
69,599
--------
94
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
TECHNOLOGY (11.6%)
Autodesk 798,300 $ 28,627
Barra* 743,800 30,429
Fair Isaac (D) 199,500 6,933
Helix Technology (D) 321,100 6,383
Keithley Instruments 258,500 5,586
Premier Farnell ADR (D) 808,100 7,233
--------
85,191
--------
TRANSPORTATION (3.2%)
CHC Helicopter, Cl A* 408,800 11,311
CP Ships* (D) 672,600 12,181
--------
23,492
--------
UTILITIES (1.6%)
Allete 332,069 11,538
--------
Total Common Stock
(Cost $559,675) 732,091
--------
CASH EQUIVALENTS (10.3%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 75,214,648 75,215
SEI Daily Income Trust Prime
Obligation Fund, Cl A 37,201 37
--------
Total Cash Equivalents
(Cost $75,252) 75,252
--------
Total Investments (110.2%)
(Cost $634,927) 807,343
--------
OTHER ASSETS AND LIABILITIES (-10.2%)
Payable Upon Return of Securities Loaned (75,215)
Due to Custodian (3,441)
Investment Advisory Fees Payable (708)
Administration Fees Payable (42)
Distribution Fees Payable (9)
Custodian Fees Payable (6)
Transfer Agent Shareholder
Servicing Fees Payable (3)
Trustees' Fees Payable (1)
Receivable from Affiliated Funds 2
Other Assets and Liabilities, Net 4,927
--------
Total Other Assets and Liabilities (74,496)
--------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 37,379,774 outstanding shares
of beneficial interest $472,095
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 224,835 outstanding shares
of beneficial interest 4,053
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 2,578,758 outstanding shares
of beneficial interest 41,526
Undistributed net investment income 1,083
Accumulated net realized gain on investments 41,674
Net unrealized appreciation on investments 172,416
--------
Total Net Assets (100.0%) $732,847
========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($682,566,743 / 37,379,774 shares) $18.26
========
Net Asset Value and Redemption
Price Per Share -- A Shares
($4,088,557 / 224,835 shares) $18.18
========
Maximum Offering Price Per Share --
A Shares ($18.18 / 96.25%) $18.89
========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($46,191,829 / 2,578,758 shares) $17.91
========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
95
<page>
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
STRATEGIC QUANTITATIVE EQUITY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (100.0%)
BASIC MATERIALS (11.0%)
Belden 31,071 $ 525
Boise Cascade 14,519 510
Cabot 14,570 524
Centex 10,539 511
Cytec Industries 13,030 525
DR Horton 13,616 393
Eastman Chemical 19,658 911
FMC* 12,888 523
KB Home 7,757 511
MDC Holdings 6,213 400
NVR* 859 393
OM Group* 19,729 526
Pulte Homes 9,686 511
Ryland Group 4,959 395
Standard-Pacific 7,884 402
-------
7,560
-------
CAPITAL GOODS (14.2%)
AGCO* 27,564 528
Applied Materials* 12,945 258
Boeing 19,844 909
Briggs & Stratton 6,910 524
Eaton 15,484 905
Gardner Denver* 20,202 529
Griffon* 22,693 528
Harsco 11,935 518
Littelfuse* 5,727 227
Manitowoc 16,570 526
Masco 31,311 907
Meritage* 5,780 394
Paccar 16,011 893
Tektronix 8,155 257
Textron 16,488 901
Thomas & Betts* 36,981 905
-------
9,709
-------
COMMUNICATION SERVICES (1.5%)
CommScope* 13,049 225
Lucent Technologies* 71,725 256
Motorola 13,011 257
Tellabs* 32,412 258
-------
996
-------
COMPUTER SOFTWARE (1.0%)
Activision* 14,198 225
Advent Software* 11,755 222
Netegrity* 24,248 228
-------
675
-------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER CYCLICALS (15.1%)
Alberto-Culver 8,754 $ 412
AnnTaylor Stores* 14,080 399
Bed Bath & Beyond* 13,685 510
Black & Decker 8,667 519
Chico's FAS* 9,398 403
Claire's Stores 19,285 399
Coach* 9,195 401
Costco Wholesale* 10,752 406
Deere 13,771 905
Genesco* 15,803 397
Guitar Center* 9,077 389
Hibbett Sporting Goods* 15,470 402
J.C. Penney 14,275 511
Mandalay Resort Group 7,174 393
Midas* 20,956 401
Nash Finch 14,272 268
Nordstrom 12,593 511
Pacific Sunwear of California* 18,348 399
Sherwin-Williams 13,008 511
Starwood Hotels & Resorts
Worldwide 12,009 506
Urban Outfitters* 7,338 403
Walt Disney 21,500 505
Wolverine World Wide 14,945 394
-------
10,344
-------
CONSUMER STAPLES (3.9%)
Anheuser-Busch 7,637 407
Constellation Brands* 7,616 274
Corn Products International 6,304 274
Dean Foods* 7,829 276
Great Atlantic & Pacific Tea* 38,292 265
Ruddick 13,394 275
Starbucks* 12,513 509
Supervalu 13,305 413
-------
2,693
-------
ENERGY (13.3%)
Cal Dive International* 19,054 535
CARBO Ceramics 7,571 529
ChevronTexaco 10,720 969
ConocoPhillips 13,248 971
Devon Energy 16,178 960
Exxon Mobil 22,189 960
Maverick Tube* 23,640 544
Newfield Exploration* 10,708 533
Prima Energy* 14,030 534
Southwestern Energy* 20,838 533
Stone Energy* 11,883 534
Swift Energy* 26,268 531
Valero Energy 14,734 974
XTO Energy 1 --
-------
9,107
-------
96
<page>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FINANCE (13.8%)
ACE 8,227 $ 339
AG Edwards 11,544 432
Allstate 7,692 338
Bear Stearns 4,184 339
Countrywide Financial 5,269 340
E*TRADE Financial* 29,765 340
Fremont General 19,008 427
Goldman Sachs Group 3,617 340
Hartford Financial Services
Group 5,119 338
HCC Insurance Holdings 13,041 432
Horace Mann Educators 25,359 429
Lehman Brothers Holdings 4,472 338
Lincoln National 7,155 340
Loews 5,896 340
Merrill Lynch 5,940 337
National City 9,549 339
New Century Financial 9,816 428
Philadelphia Consolidated
Holding* 7,607 431
Progressive 3,925 337
Protective Life 11,647 431
Raymond James Financial 16,533 427
Selective Insurance Group 11,855 428
St Paul Travelers 8,498 337
UICI* 21,746 432
WR Berkley 10,300 429
-------
9,468
-------
HEALTH CARE (7.3%)
Anthem* 3,293 292
Biomet 7,216 289
C.R. Bard 2,612 293
Cooper 4,775 264
Coventry Health Care* 5,750 265
Dentsply International 5,316 263
Idexx Laboratories* 3,955 260
Johnson & Johnson 5,245 292
Lincare Holdings* 7,758 261
Medtronic 6,084 291
Patterson Dental* 3,474 264
RehabCare Group* 10,741 268
Resmed* 5,193 264
Stryker 5,724 291
UnitedHealth Group 4,498 293
Visx* 11,090 261
WellPoint Health Networks* 2,611 291
Zimmer Holdings* 3,433 293
-------
4,995
-------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
SEMICONDUCTORS (4.6%)
Altera* 11,133 $ 255
Arrow Electronics* 8,165 222
Artesyn Technologies* 57,304 524
Axcelis Technologies* 18,578 224
Brooks Automation* 10,978 227
Integrated Device Technology* 15,346 224
Kulicke & Soffa Industries* 19,793 227
National Semiconductor* 11,816 256
Park Electrochemical 8,969 224
PMC-- Sierra* 18,238 257
Teradyne* 11,586 258
Xilinx* 7,015 256
-------
3,154
-------
SERVICES (3.4%)
Brink's 16,919 523
Chemed 5,569 263
Consolidated Graphics* 13,349 536
eBay* 5,803 515
Time Warner* 29,952 511
-------
2,348
-------
TECHNOLOGY (3.9%)
Advanced Micro Devices* 16,572 257
Apple Computer* 9,112 256
Autodesk 7,148 256
Avnet* 9,649 226
C-COR.net* 24,812 221
Catapult Communications* 12,290 203
Corning* 20,886 259
Photon Dynamics* 7,113 229
Vishay Intertechnology* 11,924 225
Woodward Governor 7,980 530
-------
2,662
-------
TRANSPORTATION (7.0%)
Burlington Northern Santa Fe 27,421 903
CNF 13,445 524
JB Hunt Transport Services* 15,904 521
Norfolk Southern 37,723 914
Overseas Shipholding Group 14,078 537
Ryder System 24,437 908
Yellow Roadway* 14,619 522
-------
4,829
-------
Total Common Stock
(Cost $65,436) 68,540
-------
97
<page>
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
STRATEGIC QUANTITATIVE EQUITY FUND--CONCLUDED
- --------------------------------------------------------------------------------
FACE AMOUNT
(000) VALUE (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (0.7%)
Merrill Lynch
1.020%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $448,376
(collateralized by FNMA
obligations; total market value
$457,329) (C) $448 $ 448
-------
Total Repurchase Agreement
(Cost $448) 448
-------
Total Investments (100.7%)
(Cost $65,884) $68,988
=======
PERCENTAGES ARE BASED ON NET ASSETS OF $68,540,024.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
98
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
TAX SENSITIVE GROWTH STOCK FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (98.2%)
CAPITAL GOODS (9.5%)
3M 56,132 $ 4,747
Danaher 116,000 5,455
General Electric 180,844 5,628
Illinois Tool Works 34,000 3,056
United Parcel Service, Cl B 51,600 3,701
---------
22,587
---------
COMMUNICATION SERVICES (2.1%)
Qualcomm 74,500 4,997
---------
CONSUMER CYCLICALS (14.5%)
Bed Bath & Beyond* 80,100 2,984
Coach* 19,300 842
Deere 47,000 3,088
eBay* 30,000 2,664
Home Depot 87,000 3,125
Lowe's 56,500 3,027
Marriott International 46,000 2,269
Target 106,500 4,760
Wal-Mart Stores 128,881 7,182
Walt Disney 189,500 4,448
---------
34,389
---------
CONSUMER STAPLES (11.9%)
Anheuser-Busch 22,000 1,172
Gillette 110,000 4,740
Kimberly-Clark 47,000 3,097
PepsiCo 115,000 6,138
Procter & Gamble 70,000 7,547
Starbucks* 79,800 3,243
Sysco 62,000 2,325
---------
28,262
---------
ENERGY (5.9%)
Apache 87,750 3,542
ChevronTexaco 17,000 1,537
Exxon Mobil 140,000 6,055
Schlumberger 52,800 3,018
---------
14,152
---------
FINANCE (18.0%)
Aflac 166,000 6,740
AMBAC Financial Group 27,000 1,867
American Express 43,180 2,189
American International Group 81,977 6,009
Citigroup 115,946 5,383
Fannie Mae 25,121 1,701
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FINANCE -- CONTINUED
Goldman Sachs Group 31,000 $ 2,911
Legg Mason 28,000 2,456
MBNA 185,700 4,717
MGIC Investment 48,500 3,540
Progressive 7,100 609
State Street 99,700 4,827
---------
42,949
---------
HEALTH CARE (17.0%)
Biomet 149,600 6,002
Boston Scientific* 55,000 2,436
Health Management Associates,
Cl A (D) 85,000 1,869
Johnson & Johnson 166,732 9,289
Medtronic 82,063 3,931
Pfizer 300,093 10,605
UnitedHealth Group 98,100 6,401
---------
40,533
---------
TECHNOLOGY (19.3%)
Analog Devices 30,500 1,499
Applied Materials* 170,606 3,405
Apple Computer* 87,300 2,450
CDW 46,000 3,232
Cisco Systems* 250,179 5,541
Dell* 68,000 2,392
EMC* 172,100 1,934
First Data 95,000 4,113
Intel 172,086 4,913
International Business Machines 10,985 973
Lexmark International* 33,000 3,113
Microsoft 283,056 7,459
Oracle* 300,808 3,405
Veritas Software* 35,000 931
Xilinx* 16,000 583
---------
45,943
---------
Total Common Stock
(Cost $177,805) 233,812
---------
99
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
TAX SENSITIVE GROWTH STOCK FUND--CONCLUDED
- --------------------------------------------------------------------------------
FACE AMOUNT
(000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (1.5%)
BNP Paribas
0.980%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $3,503,967
(collateralized by FNMA
obligations; total market
value $3,573,960) (C) $3,504 $ 3,504
---------
Total Repurchase Agreement
(Cost $3,504) 3,504
---------
CASH EQUIVALENT (0.8%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 1,867,500 1,868
---------
Total Cash Equivalent
(Cost $1,868) 1,868
---------
Total Investments (100.5%)
(Cost $183,177) 239,184
---------
OTHER ASSETS AND LIABILITIES (-0.5%)
Payable Upon Return of Securities Loaned (1,868)
Investment Advisory Fees Payable (231)
Distribution Fees Payable (71)
Administration Fees Payable (14)
Custodian Fees Payable (1)
Transfer Agent Shareholder
Servicing Fees Payable (1)
Receivable from Affiliated Funds 1
Other Assets and Liabilities, Net 1,064
---------
Total Other Assets and Liabilities (1,121)
---------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 6,208,460 outstanding shares
of beneficial interest $ 237,524
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 15,675 outstanding shares
of beneficial interest 343
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 4,218,767 outstanding shares
of beneficial interest 184,555
Accumulated net investment loss (1,149)
Accumulated net realized loss on investments (239,217)
Net unrealized appreciation on investments 56,007
---------
Total Net Assets (100.0%) $ 238,063
=========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($144,732,408 / 6,208,460 shares) $23.31
=========
Net Asset Value and Redemption
Price Per Share -- A Shares
($364,596 / 15,675 shares) $23.26
=========
Maximum Offering Price Per Share --
A Shares ($23.26 / 96.25%) $24.17
=========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($92,966,192 / 4,218,767 shares) $22.04
=========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
100
<page>
- --------------------------------------------------------------------------------
VALUE INCOME STOCK FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK (97.5%)
BASIC MATERIALS (8.6%)
Air Products & Chemicals 203,500 $ 10,169
Alcoa 272,300 8,523
Bemis 177,000 4,876
Boise Cascade 121,500 4,271
E.I. du Pont de Nemours 307,600 13,288
International Paper 355,500 14,906
PPG Industries 143,400 8,575
Rohm & Haas 212,600 8,194
---------
72,802
---------
CAPITAL GOODS (12.7%)
American Power Conversion 357,800 6,476
Emerson Electric 209,400 12,501
General Electric 540,900 16,833
Honeywell International 410,900 13,847
Lockheed Martin 291,000 14,416
Masco 397,600 11,510
Parker Hannifin 154,800 8,601
Pitney Bowes 189,500 8,401
Rockwell Automation 127,365 4,313
Rockwell Collins 130,000 3,905
Teleflex 140,700 6,538
---------
107,341
---------
COMMUNICATION SERVICES (6.1%)
Alltel 174,600 8,840
CenturyTel 411,800 12,309
Harris 134,100 6,201
SBC Communications 351,500 8,330
Verizon Communications 456,010 15,769
---------
51,449
---------
CONSUMER CYCLICALS (9.6%)
Gannett 133,700 11,739
Genuine Parts 112,650 4,240
Leggett & Platt 402,600 10,178
Mattel 456,000 7,971
May Department Stores (D) 264,000 7,566
McGraw-Hill 118,200 9,210
Outback Steakhouse 100,250 4,256
Pier 1 Imports 338,300 6,377
Viacom 336,700 12,421
Walt Disney 305,800 7,177
---------
81,135
---------
CONSUMER STAPLES (9.6%)
Clorox 229,500 12,017
Colgate-Palmolive 229,500 13,127
Dollar General 469,600 9,110
General Mills 280,100 12,899
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- CONTINUED
HJ Heinz 227,500 $ 8,495
Kimberly-Clark 129,000 8,501
PepsiCo 170,100 9,078
Wal-Mart Stores 152,500 8,499
---------
81,726
---------
ENERGY (6.0%)
Baker Hughes 118,600 4,036
BP ADR 236,200 12,518
Exxon Mobil 403,500 17,451
GlobalSantaFe 151,200 3,800
Royal Dutch Petroleum 254,600 12,753
---------
50,558
---------
FINANCE (27.1%)
AG Edwards (D) 238,200 8,909
Allstate 201,900 8,880
American Express 170,800 8,660
American International Group 116,704 8,554
Bank of America 266,300 22,137
Bank of New York 291,700 8,771
Bank One 163,800 7,936
Citigroup 343,900 15,967
Hartford Financial Services
Group 95,700 6,328
Keycorp 261,600 8,217
Lehman Brothers Holdings 185,300 14,018
Marsh & McLennan 193,200 8,524
Mellon Financial 427,700 12,591
Merrill Lynch 207,000 11,758
Metlife 243,600 8,660
National City 251,200 8,915
Nationwide Financial Services,
Cl A 270,100 9,872
Regions Financial 344,700 13,105
Safeco 194,200 8,147
US Bancorp 305,700 8,590
Wachovia 178,500 8,427
Wells Fargo 214,000 12,583
---------
229,549
---------
HEALTH CARE (7.3%)
Abbott Laboratories 305,000 12,569
Health Management Associates,
Cl A (D) 421,400 9,267
Johnson & Johnson 243,800 13,582
Pfizer 422,950 14,947
Wyeth 327,300 11,783
---------
62,148
---------
101
<page>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
VALUE INCOME STOCK FUND--CONCLUDED
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
SERVICES (1.2%)
Cintas 215,900 $ 9,798
---------
TECHNOLOGY (6.3%)
Automatic Data Processing 194,400 8,637
Diebold 129,800 6,377
Hewlett-Packard 402,700 8,553
Intersil, Cl A 324,600 6,898
Koninklijke Philips Electronics 149,400 4,086
Microsoft 332,600 8,764
Motorola 228,400 4,516
Nokia ADR 433,800 5,961
---------
53,792
---------
TRANSPORTATION (1.0%)
Norfolk Southern 356,350 8,634
---------
UTILITIES (2.0%)
FPL Group 133,200 8,491
Progress Energy (D) 189,100 8,058
---------
16,549
---------
Total Common Stock
(Cost $720,319) 825,481
---------
CASH EQUIVALENT (2.2%)
Boston Global Investment Trust --
Enhanced Portfolio (A) 18,150,400 18,150
---------
Total Cash Equivalent
(Cost $18,150) 18,150
---------
REPURCHASE AGREEMENTS (1.9%)
Merrill Lynch
1.020%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $8,874,862
(collateralized by FNMA
obligations; total market
value $9,052,365) (C) $8,874 8,874
ABN Amro
0.980%, dated 05/28/04, to be
repurchased on 06/01/04,
repurchase price $7,288,071
(collateralized by U.S. Treasury
obligations; total market
value $7,433,594) (C) 7,288 7,288
---------
Total Repurchase Agreements
(Cost $16,162) 16,162
---------
Total Investments (101.6%)
(Cost $754,631) 859,793
---------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (-1.6%)
Payable Upon Return of Securities Loaned $ (18,150)
Investment Advisory Fees Payable (565)
Distribution Fees Payable (66)
Administration Fees Payable (49)
Custodian Fees Payable (4)
Transfer Agent Shareholder
Servicing Fees Payable (4)
Trustees' Fees Payable (1)
Receivable from Affiliated Funds 2
Other Assets and Liabilities, Net 5,632
---------
Total Other Assets and Liabilities (13,205)
---------
NET ASSETS:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 62,442,743 outstanding shares
of beneficial interest 752,638
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 6,409,502 outstanding shares
of beneficial interest 83,491
Paid in Capital -- L Shares
(unlimited authorization -- no par value)
based on 5,077,469 outstanding shares
of beneficial interest 95,353
Undistributed net investment income 2,012
Accumulated net realized loss on investments (192,068)
Net unrealized appreciation on investments 105,162
---------
Total Net Assets (100.0%) $ 846,588
=========
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($715,928,444 / 62,442,743 shares) $11.47
=========
Net Asset Value and Redemption
Price Per Share -- A Shares
($73,256,960 / 6,409,502 shares) $11.43
=========
Maximum Offering Price Per Share --
A Shares ($11.43 / 96.25%) $11.88
=========
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($57,402,541 / 5,077,469 shares) $11.31
=========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FOR DESCRIPTIONS OF ABBREVIATIONS AND FOOTNOTES, PLEASE SEE PAGE 103.
102
<page>
- --------------------------------------------------------------------------------
KEY TO ABBREVIATIONS AND FOOTNOTES USED IN
THE STATEMENTS OF NET ASSETS AND
SCHEDULE OF INVESTMENTS
ADR American Depositary Receipt
Cl Class
FHLB Federal Home Loan Bank
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
GNMA Government National Mortgage Association
LP Limited Partnership
Ltd. Limited
MTN Medium Term Note
PLC Public Limited Company
REIT Real Estate Investment Trust
Ser Series
SPDR Standard & Poor's Depository Receipt
* Non-income producing security
+ All investments in the Fund are affiliated.
(A) This security was purchased with cash collateral held from securities
lending (see Note 8 in Notes to Financial Statements).
(B) Securities fair valued using methods determined in good faith
according to procedures adopted by the Fair Value Committee of the
Board of Trustees. The total value of the securities were 0.02%,
0.26% and 0.50% of net assets for the International Equity,
International Equity Index and the Small Cap Growth Stock Funds,
respectively.
(C) Tri-Party Repurchase Agreement
(D) This security or a partial position of the security was on loan at
May 31, 2004 (see Note 8 in Notes to Financial Statements). The total
value of securities on loan at May 31, 2004 was $2,167,170, $21,795,
$248,641, $49,021,854, $66,884,599, $4,525,890, $30,385,324,
$322,037,353, $73,404,089, $1,825,170 and $17,660,515 for the Capital
Appreciation Fund, Growth and Income Fund, Information and Technology
Fund, International Equity Fund, International Equity Index Fund,
Mid-Cap Equity Fund, Mid-Cap Value Equity Fund, Small Cap Growth
Stock Fund, Small Cap Value Equity Fund, Tax Sensitive Growth Stock
Fund and Value Income Stock Fund, respectively.
(E) Security considered illiquid. The total value of the security was
0.02%, 0.26% and 0.41% of net assets for the International Equity,
International Equity Index and Small Cap Growth Stock Funds,
respectively.
(F) Security considered restricted (not readily marketable). See Note 2
in Notes to Financial Statement.
(1) The L Shares and B Shares have a contingent deferred sales charge.
For a description of a possible sales charge, see Note 2 in Notes to
Financial Statements.
Amounts designated as "--" are either $0 or have been rounded to $0.
103
<page>
This page left intentionally blank.
<page>
STATEMENT OF ASSETS AND LIABILITIES (000)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
STRATEGIC
QUANTITATIVE
EQUITY FUND
------------
Assets:
Investments at Market Value (Cost $65,884) .............................................................. $68,988
Receivable for Investment Securities Sold ............................................................... 28,424
Accrued Income .......................................................................................... 61
Receivable for Paid in Capital Shares Purchased ......................................................... 50
Receivable from Adviser ................................................................................. 21
Prepaid Offering Costs .................................................................................. 5
Distribution Fees Receivable ............................................................................ 1
-------
Total Assets ............................................................................................ 97,550
-------
Liabilities:
Payable for Investment Securities Purchased ............................................................. 28,315
Payable for Paid in Capital Shares Redeemed ............................................................. 605
Investment Advisory Fees Payable ........................................................................ 55
Payable to Affiliated Funds ............................................................................. 22
Administration Fees Payable ............................................................................. 4
Accrued Expenses ........................................................................................ 9
-------
Total Liabilities ....................................................................................... 29,010
-------
Total Net Assets ........................................................................................ $68,540
=======
Net Assets:
Paid in Capital -- T Shares
(unlimited authorization -- no par value)
based on 5,528,500 outstanding shares of beneficial interest .......................................... $60,854
Paid in Capital -- A Shares
(unlimited authorization -- no par value)
based on 12,882 outstanding shares of beneficial interest ............................................. 154
Paid in Capital-- L Shares
(unlimited authorization -- no par value)
based on 131,151 outstanding shares of beneficial interest ............................................ 1,539
Accumulated net investment loss ......................................................................... (18)
Accumulated net realized gain on investments ............................................................ 2,907
Net unrealized appreciation on investments .............................................................. 3,104
-------
Total Net Assets ........................................................................................ $68,540
=======
Net Asset Value, Offering and Redemption
Price Per Share -- T Shares
($66,811,403 / 5,528,500 shares) ........................................................................ $12.08
=======
Net Asset Value and Redemption
Price Per Share -- A Shares
($155,282 / 12,882 shares) .............................................................................. $12.05
=======
Maximum Offering Price Per Share --
A Shares ($12.05 / 96.25%) .............................................................................. $12.52
=======
Net Asset Value and Offering
Price Per Share -- L Shares (1)
($1,573,339 / 131,151 shares) ........................................................................... $12.00
=======
<FN>
(1) The L Shares have a contingent deferred sales charge. For a description of a possible sales charge, see Note 2 in Notes
to Financial Statements.
</FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
105
STATEMENTS OF OPERATIONS (000)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEAR OR PERIOD ENDED MAY 31, 2004
AGGRESSIVE CAPITAL
GROWTH STOCK BALANCED APPRECIATION
FUND(1) FUND FUND
------------ -------- ------------
Income:
Dividend Income* ............................................... $ 10 $ 1,484 $ 13,459
Interest Income ................................................ 4 6,593 356
Security Lending Income ........................................ -- 107 185
Less: Foreign Taxes Withheld ................................... -- -- --
---- -------- --------
Total Income ................................................... 14 8,184 14,000
---- -------- --------
Expenses:
Investment Advisory Fees ....................................... 36 3,091 16,536
Administration Fees ............................................ 2 223 986
Distribution Fees -- A Shares .................................. -- 25 990
Distribution Fees -- L Shares .................................. -- 713 1,030
Distribution Fees -- B Shares .................................. -- -- --
Custodian Fees ................................................. -- 12 39
Transfer Agent Shareholder Servicing Fees ...................... -- 9 38
Trustees' Fees ................................................. -- 3 15
Transfer Agent Fees -- T Shares ................................ 1 16 16
Transfer Agent Fees -- A Shares ................................ 1 19 109
Transfer Agent Fees -- L Shares ................................ 1 95 192
Transfer Agent Fees -- B Shares ................................ -- -- --
Professional Fees .............................................. -- 13 61
Printing Fees .................................................. -- 11 48
Transfer Agent Out of Pocket Fees .............................. -- 11 48
Registration Fees .............................................. -- 10 40
Offering Costs ................................................. 7 -- --
Other Fees ..................................................... -- 9 41
---- -------- --------
Total Expenses ................................................. 48 4,260 20,189
---- -------- --------
Less: Investment Advisory Fees Waived ........................ (10) (91) (284)
Less: Fees Reimbursed by Distributor ......................... (1) -- --
Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (1) (15) (140)
Less: Distribution Fees Waived -- L Shares ................... (1) (41) (60)
Less: Distribution Fees Waived -- B Shares ................... -- -- --
---- -------- --------
Net Expenses ................................................... 35 4,113 19,705
---- -------- --------
Net Investment Income (Loss) ................................... (21) 4,071 (5,705)
---- -------- --------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss) on Securities Sold* ................... (39) 26,469 240,042
Net Realized Gain on Foreign Currency Transactions ............. -- -- --
Net Change in Unrealized Depreciation on Foreign
Currency and Translation of Other Assets and
Liabilities in Foreign Currency .............................. -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments* ............................... 389 (17,586) (77,211)
---- -------- --------
Total Net Realized and Unrealized Gain (Loss) on Investments ... 350 8,883 162,831
---- -------- --------
Net Increase (Decrease) in Net Assets from Operations .......... $329 $ 12,954 $157,126
==== ======== ========
<FN>
* Dividend income, net realized gain on securities sold and net change in unrealized appreciation on investments for the
Life Vision Funds are attributable to the underlying investments in affiliated investment companies.
(1) The Aggressive Growth Stock Fund and the Emerging Growth Stock Fund commenced operations on February 23, 2004.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
106
- --------------------------------------------------------------------------------
EMERGING GROWTH AND INFORMATION AND
GROWTH STOCK INCOME TECHNOLOGY
FUND(1) FUND FUND
------------ ---------- ---------------
Income:
Dividend Income* ............................................... $ 2 $ 17,050 $ 35
Interest Income ................................................ 2 106 7
Security Lending Income ........................................ -- 83 48
Less: Foreign Taxes Withheld ................................... -- (38) (1)
----- -------- ------
Total Income ................................................... 4 17,201 89
----- -------- ------
Expenses:
Investment Advisory Fees ....................................... 28 7,647 205
Administration Fees ............................................ 2 582 13
Distribution Fees -- A Shares .................................. -- 105 --
Distribution Fees -- L Shares .................................. -- 910 76
Distribution Fees -- B Shares .................................. -- -- --
Custodian Fees ................................................. -- 23 4
Transfer Agent Shareholder Servicing Fees ...................... -- 23 --
Trustees' Fees ................................................. -- 9 --
Transfer Agent Fees -- T Shares ................................ 1 16 16
Transfer Agent Fees -- A Shares ................................ 1 48 5
Transfer Agent Fees -- L Shares ................................ 1 160 49
Transfer Agent Fees -- B Shares ................................ -- -- --
Professional Fees .............................................. -- 38 1
Printing Fees .................................................. -- 30 1
Transfer Agent Out of Pocket Fees .............................. -- 28 1
Registration Fees .............................................. -- 21 1
Offering Costs ................................................. 7 -- --
Other Fees ..................................................... -- 29 1
----- -------- ------
Total Expenses ................................................. 40 9,669 373
----- -------- ------
Less: Investment Advisory Fees Waived ........................ (9) -- --
Less: Fees Reimbursed by Distributor ......................... (1) -- --
Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (1) (74) (5)
Less: Distribution Fees Waived -- L Shares ................... (1) (217) (46)
Less: Distribution Fees Waived -- B Shares -- -- --
----- -------- ------
Net Expenses ................................................... 28 9,378 322
----- -------- ------
Net Investment Income (Loss) ................................... (24) 7,823 (233)
----- -------- ------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss) on Securities Sold* ................... (178) 54,492 4,946
Net Realized Gain on Foreign Currency Transactions ............. -- -- --
Net Change in Unrealized Depreciation on Foreign
Currency and Translation of Other Assets and
Liabilities in Foreign Currency .............................. -- -- --
Net Change in Unrealized Appreciation
(Depreciation) on Investments* ............................... (39) 99,001 (901)
----- -------- ------
Total Net Realized and Unrealized Gain (Loss) on Investments ... (217) 153,493 4,045
----- -------- ------
Net Increase (Decrease) in Net Assets from Operations .......... $(241) $161,316 $3,812
===== ======== ======
INTERNATIONAL INTERNATIONAL LIFE VISION
EQUITY EQUITY AGGRESSIVE GROWTH
FUND INDEX FUND FUND
------------ ------------- -----------------
Income:
Dividend Income* ............................................... $ 7,134 $ 8,397 $ 242
Interest Income ................................................ 2 -- --
Security Lending Income ........................................ 128 187 --
Less: Foreign Taxes Withheld ................................... (787) (921) --
------- ------- ------
Total Income ................................................... 6,477 7,663 242
------- ------- ------
Expenses:
Investment Advisory Fees ....................................... 3,256 2,929 95
Administration Fees ............................................ 179 223 26
Distribution Fees -- A Shares .................................. 24 56 1
Distribution Fees -- L Shares .................................. 70 43 --
Distribution Fees -- B Shares .................................. -- -- 30
Custodian Fees ................................................. 165 207 1
Transfer Agent Shareholder Servicing Fees ...................... 7 9 1
Trustees' Fees ................................................. 3 3 --
Transfer Agent Fees -- T Shares ................................ 16 16 16
Transfer Agent Fees -- A Shares ................................ 23 25 5
Transfer Agent Fees -- L Shares ................................ 31 21 --
Transfer Agent Fees -- B Shares ................................ -- -- 18
Professional Fees .............................................. 12 15 2
Printing Fees .................................................. 9 11 1
Transfer Agent Out of Pocket Fees .............................. 9 11 1
Registration Fees .............................................. 5 8 1
Offering Costs ................................................. -- -- --
Other Fees ..................................................... 17 33 --
------- ------- ------
Total Expenses ................................................. 3,826 3,610 198
------- ------- ------
Less: Investment Advisory Fees Waived ........................ -- (278) (51)
Less: Fees Reimbursed by Distributor ......................... -- -- --
Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (16) (5) (5)
Less: Distribution Fees Waived -- L Shares ................... (23) (14) --
Less: Distribution Fees Waived -- B Shares ................... -- -- (24)
------- ------- ------
Net Expenses ................................................... 3,787 3,313 118
------- ------- ------
Net Investment Income (Loss) ................................... 2,690 4,350 124
------- ------- ------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss) on Securities Sold* ................... 12,338 3,091 325
Net Realized Gain on Foreign Currency Transactions ............. 334 480 --
Net Change in Unrealized Depreciation on Foreign
Currency and Translation of Other Assets and
Liabilities in Foreign Currency .............................. (192) (40) --
Net Change in Unrealized Appreciation
(Depreciation) on Investments* ............................... 42,284 82,047 6,169
------- ------- ------
Total Net Realized and Unrealized Gain (Loss) on Investments ... 54,764 85,578 6,494
------- ------- ------
Net Increase (Decrease) in Net Assets from Operations .......... $57,454 $89,928 $6,618
======= ======= ======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
107
STATEMENTS OF OPERATIONS (000)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEAR OR PERIOD ENDED MAY 31, 2004
LIFE VISION LIFE VISION LIFE VISION
CONSERVATIVE GROWTH AND INCOME MODERATE
FUND FUND GROWTH FUND
------------ ------------------ ------------
Income:
Dividend Income* ............................................... $ 97 $ 1,312 $ 2,283
Interest Income ................................................ -- -- --
Security Lending Income ........................................ -- -- --
Less: Foreign Tax Withheld ..................................... -- -- --
---- ------- -------
Total Income ................................................... 97 1,312 2,283
---- ------- -------
Expenses:
Investment Advisory Fees ....................................... 10 201 301
Administration Fees ............................................ 3 55 83
Distribution Fees -- A Shares .................................. 1 2 6
Distribution Fees -- L Shares .................................. -- -- --
Distribution Fees -- B Shares .................................. 37 78 95
Custodian Fees ................................................. -- 2 3
Transfer Agent Shareholder Servicing Fees ...................... -- 2 3
Trustees' Fees ................................................. -- 1 1
Transfer Agent Fees -- T Shares ................................ 7 16 16
Transfer Agent Fees -- A Shares ................................ 5 5 5
Transfer Agent Fees -- L Shares ................................ -- -- --
Transfer Agent Fees -- B Shares ................................ 17 21 21
Professional Fees .............................................. -- 4 5
Printing Fees .................................................. -- 3 4
Transfer Agent Out of Pocket Fees .............................. -- 3 4
Registration Fees .............................................. -- 2 3
Offering Costs ................................................. -- -- --
Other Fees ..................................................... -- 1 4
---- ------- -------
Total Expenses ................................................. 80 396 554
---- ------- -------
Less: Investment Advisory Fees Waived ........................ (6) (90) (128)
Less: Fees Reimbursed by Distributor ......................... (7) -- --
Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (5) (6) (7)
Less: Distribution Fees Waived -- L Shares ................... -- -- --
Less: Distribution Fees Waived -- B Shares ................... (26) (39) (43)
---- ------- -------
Net Expenses ................................................... 36 261 376
---- ------- -------
Net Investment Income (Loss) ................................... 61 1,051 1,907
---- ------- -------
Net Realized and Unrealized Gain (Loss) on Investments:
Capital Gain from Investments in Affiliated
Investment Companies* ........................................ 1 8 12
Net Realized Gain on Securities Sold* .......................... 9 2,565 2,529
Net Change in Unrealized Appreciation
on Investments* .............................................. 95 8,207 9,804
---- ------- -------
Total Net Realized and Unrealized Gain on Investments .......... 105 10,780 12,345
---- ------- -------
Net Increase in Net Assets from Operations ..................... $166 $11,831 $14,252
==== ======= =======
<FN>
* Dividend income, capital gain from investments in affiliated investment companies, net realized gain on securities sold
and net change in unrealized appreciation on investments for the Life Vision Funds are attributable to the underlying
investments in affiliated investment companies.
(1) The Strategic Quantitative Equity Fund commenced operations on August 7, 2003.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
108
- --------------------------------------------------------------------------------
MID-CAP MID-CAP SMALL CAP
EQUITY VALUE EQUITY GROWTH STOCK
FUND FUND FUND
------- ------------ -------------
Income:
Dividend Income* ............................................... $ 3,381 $ 2,263 $ 2,490
Interest Income ................................................ 56 92 95
Security Lending Income ........................................ 142 74 826
Less: Foreign Tax Withheld ..................................... -- (10) (13)
------- ------- --------
Total Income ................................................... 3,579 2,419 3,398
------- ------- --------
Expenses:
Investment Advisory Fees ....................................... 2,201 1,691 9,361
Administration Fees ............................................ 131 93 558
Distribution Fees -- A Shares .................................. 63 1 157
Distribution Fees -- L Shares .................................. 153 73 370
Distribution Fees -- B Shares .................................. -- -- --
Custodian Fees ................................................. 14 8 70
Transfer Agent Shareholder Servicing Fees ...................... 5 4 22
Trustees' Fees ................................................. 2 1 8
Transfer Agent Fees -- T Shares ................................ 16 16 21
Transfer Agent Fees -- A Shares ................................ 29 5 41
Transfer Agent Fees -- L Shares ................................ 45 29 56
Transfer Agent Fees -- B Shares ................................ -- -- --
Professional Fees .............................................. 9 6 36
Printing Fees .................................................. 7 5 30
Transfer Agent Out of Pocket Fees .............................. 6 5 27
Registration Fees .............................................. 4 3 19
Offering Costs ................................................. -- -- --
Other Fees ..................................................... 4 4 25
------- ------- --------
Total Expenses ................................................. 2,689 1,944 10,801
------- ------- --------
Less: Investment Advisory Fees Waived ........................ (48) (135) --
Less: Fees Reimbursed by Distributor ......................... -- -- --
Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (25) (5) (85)
Less: Distribution Fees Waived -- L Shares ................... (36) (54) (33)
Less: Distribution Fees Waived -- B Shares ................... -- -- --
------- ------- --------
Net Expenses ................................................... 2,580 1,750 10,683
------- ------- --------
Net Investment Income (Loss) ................................... 999 669 (7,285)
------- ------- --------
Net Realized and Unrealized Gain (Loss) on Investments:
Capital Gain from Investments in Affiliated
Investment Companies* ........................................ -- -- --
Net Realized Gain on Securities Sold* .......................... 22,721 18,863 145,086
Net Change in Unrealized Appreciation
on Investments* .............................................. 6,629 12,849 80,171
------- ------- --------
Total Net Realized and Unrealized Gain on Investments .......... 29,350 31,712 225,257
------- ------- --------
Net Increase in Net Assets from Operations ..................... $30,349 $32,381 $217,972
======= ======= ========
SMALL CAP STRATEGIC TAX SENSITIVE VALUE
VALUE EQUITY QUANTITATIVE GROWTH STOCK INCOME STOCK
FUND EQUITY FUND(1) FUND FUND
--------- ------------- ------------ ----------
Income:
Dividend Income* ............................................... $ 10,408 $ 335 $ 2,605 $ 18,485
Interest Income ................................................ 216 6 36 383
Security Lending Income ........................................ 428 -- 37 85
Less: Foreign Tax Withheld ..................................... (215) -- -- (127)
-------- ------ ------- --------
Total Income ................................................... 10,837 341 2,678 18,826
-------- ------ ------- --------
Expenses:
Investment Advisory Fees ....................................... 7,677 432 3,168 6,572
Administration Fees ............................................ 458 26 189 563
Distribution Fees -- A Shares .................................. 4 -- 1 235
Distribution Fees -- L Shares .................................. 434 7 1,054 561
Distribution Fees -- B Shares .................................. -- -- -- --
Custodian Fees ................................................. 39 1 7 22
Transfer Agent Shareholder Servicing Fees ...................... 18 1 7 22
Trustees' Fees ................................................. 7 -- 3 9
Transfer Agent Fees -- T Shares ................................ 16 11 16 16
Transfer Agent Fees -- A Shares ................................ 6 5 5 64
Transfer Agent Fees -- L Shares ................................ 86 5 171 97
Transfer Agent Fees -- B Shares ................................ -- -- -- --
Professional Fees .............................................. 30 2 10 34
Printing Fees .................................................. 23 2 8 27
Transfer Agent Out of Pocket Fees .............................. 23 1 9 27
Registration Fees .............................................. 16 -- 10 24
Offering Costs ................................................. -- 23 -- --
Other Fees ..................................................... 21 1 8 30
-------- ------ ------- --------
Total Expenses ................................................. 8,858 517 4,666 8,303
-------- ------ ------- --------
Less: Investment Advisory Fees Waived ........................ -- (77) -- --
Less: Fees Reimbursed by Distributor ......................... -- -- -- --
Less: Distribution Fees Waived/Reimbursed -- A Shares ........ (7) (5) (5) (23)
Less: Distribution Fees Waived -- L Shares ................... (81) (4) (98) (25)
Less: Distribution Fees Waived -- B Shares ................... -- -- -- --
-------- ------ ------- --------
Net Expenses ................................................... 8,770 431 4,563 8,255
-------- ------ ------- --------
Net Investment Income (Loss) ................................... 2,067 (90) (1,885) 10,571
-------- ------ ------- --------
Net Realized and Unrealized Gain (Loss) on Investments:
Capital Gain from Investments in Affiliated
Investment Companies* ........................................ -- -- -- --
Net Realized Gain on Securities Sold* .......................... 66,912 3,973 31,183 71,412
Net Change in Unrealized Appreciation
on Investments* .............................................. 113,873 3,104 2,584 62,760
-------- ------ ------- --------
Total Net Realized and Unrealized Gain on Investments .......... 180,785 7,077 33,767 134,172
-------- ------ ------- --------
Net Increase in Net Assets from Operations ..................... $182,852 $6,987 $31,882 $144,743
======== ====== ======= ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
109
STATEMENTS OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
AGGRESSIVE GROWTH
STOCK FUND BALANCED FUND
----------------- -----------------------
02/23/04*- 06/01/03- 06/01/02-
05/31/04 05/31/04 05/31/03
---------- --------- ---------
Operations:
Net Investment Income (Loss) ...................................... $ (21) $ 4,071 $ 4,261
Net Realized Gain (Loss) on Securities Sold ....................... (39) 26,469 (22,027)
Net Change in Unrealized Appreciation (Depreciation)
on Investments .................................................. 389 (17,586) 14,697
------- -------- --------
Net Increase(Decrease) in Net Assets from Operations .............. 329 12,954 (3,069)
------- -------- --------
Dividends to Shareholders:
Net Investment Income:
T Shares ........................................................ -- (3,826) (4,267)
A Shares ........................................................ -- (114) (136)
L Shares ........................................................ -- (403) (618)
------- -------- --------
Total Dividends ................................................... -- (4,343) (5,021)
------- -------- --------
Capital Transactions (1):
T Shares:
Proceeds from Shares Issued ..................................... 20,288 70,058 64,673
Reinvestment of Cash Distributions .............................. -- 3,612 4,061
Cost of Shares Repurchased ...................................... (115) (64,462) (75,973)
------- -------- --------
Increase (Decrease) in Net Assets From T Share Transactions ....... 20,173 9,208 (7,239)
------- -------- --------
A Shares (2):
Proceeds from Shares Issued ..................................... 48 2,139 1,079
Reinvestment of Cash Distributions .............................. -- 112 134
Cost of Shares Repurchased ...................................... -- (1,862) (1,735)
------- -------- --------
Increase (Decrease) in Net Assets From A Share Transactions ....... 48 389 (522)
------- -------- --------
L Shares (2):
Proceeds from Shares Issued ..................................... 72 18,913 16,361
Reinvestment of Cash Distributions .............................. -- 376 584
Cost of Shares Repurchased ...................................... (7) (23,445) (22,271)
------- -------- --------
Increase (Decrease) in Net Assets From L Share Transactions ....... 65 (4,156) (5,326)
------- -------- --------
Increase (Decrease) in Net Assets From Share Transactions ....... 20,286 5,441 (13,087)
------- -------- --------
Total Increase (Decrease) in Net Assets ....................... 20,615 14,052 (21,177)
------- -------- --------
Net Assets:
Beginning of Period ............................................. -- 304,327 325,504
------- -------- --------
End of Period ................................................... $20,615 $318,379 $304,327
======= ======== ========
Undistributed Net Investment Income (Accumulated Net Investment Loss) $ (5) $ 893 $ 863
======= ======== ========
<FN>
* Commencement of Operations.
(1) See Note 5 in Notes to Financial Statements for additional information.
(2) A Shares were offered beginning on October 27, 2003 for the Information and Technology Fund. L Shares were offered
beginning on February 27, 2004 for the Emerging Growth Stock Fund.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
110
- --------------------------------------------------------------------------------
CAPITAL EMERGING GROWTH
APPRECIATION FUND STOCK FUND
-------------------------- ---------------------
06/01/03- 06/01/02- 02/23/04*-
05/31/04 05/31/03 05/31/04
--------- --------- ----------
Operations:
Net Investment Income (Loss) ...................................... $ (5,705) $ (5,958) $ (24)
Net Realized Gain (Loss) on Securities Sold ....................... 240,042 (191,580) (178)
Net Change in Unrealized Appreciation (Depreciation)
on Investments .................................................. (77,211) 47,666 (39)
---------- ---------- -------
Net Increase(Decrease) in Net Assets from Operations .............. 157,126 (149,872) (241)
---------- ---------- -------
Dividends to Shareholders:
Net Investment Income:
T Shares ........................................................ -- -- --
A Shares ........................................................ -- -- --
L Shares ........................................................ -- -- --
---------- ---------- -------
Total Dividends ................................................... -- -- --
---------- ---------- -------
Capital Transactions (1):
T Shares:
Proceeds from Shares Issued ..................................... 279,768 243,462 13,349
Reinvestment of Cash Distributions .............................. -- -- --
Cost of Shares Repurchased ...................................... (253,060) (237,698) (221)
---------- ---------- -------
Increase (Decrease) in Net Assets From T Share Transactions ....... 26,708 5,764 13,128
---------- ---------- -------
A Shares (2):
Proceeds from Shares Issued ..................................... 15,738 23,224 40
Reinvestment of Cash Distributions .............................. -- -- --
Cost of Shares Repurchased ...................................... (26,645) (27,320) --
---------- ---------- -------
Increase (Decrease) in Net Assets From A Share Transactions ....... (10,907) (4,096) 40
---------- ---------- -------
L Shares (2):
Proceeds from Shares Issued ..................................... 21,720 22,663 44
Reinvestment of Cash Distributions .............................. -- -- --
Cost of Shares Repurchased ...................................... (26,198) (26,440) (7)
---------- ---------- -------
Increase (Decrease) in Net Assets From L Share Transactions ....... (4,478) (3,777) 37
---------- ---------- -------
Increase (Decrease) in Net Assets From Share Transactions ....... 11,323 (2,109) 13,205
---------- ---------- -------
Total Increase (Decrease) in Net Assets ....................... 168,449 (151,981) 12,964
---------- ---------- -------
Net Assets:
Beginning of Period ............................................. 1,326,542 1,478,523 --
---------- ---------- -------
End of Period ................................................... $1,494,991 $1,326,542 $12,964
========== ========== =======
Undistributed Net Investment Income (Accumulated Net Investment Loss) $ -- $ -- $ (6)
========== ========== =======
GROWTH AND INFORMATION AND TECHNOLOGY
INCOME FUND FUND
---------------------- --------------------------
06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/03 05/31/04 05/31/03
--------- --------- --------- ---------
Operations:
Net Investment Income (Loss) ...................................... $ 7,823 $ 6,620 $ (233) $ (221)
Net Realized Gain (Loss) on Securities Sold ....................... 54,492 (81,525) 4,946 (15,209)
Net Change in Unrealized Appreciation (Depreciation)
on Investments .................................................. 99,001 (26,671) (901) 4,224
--------- --------- -------- --------
Net Increase(Decrease) in Net Assets from Operations .............. 161,316 (101,576) 3,812 (11,206)
--------- --------- -------- --------
Dividends to Shareholders:
Net Investment Income:
T Shares ........................................................ (6,962) (6,291) -- --
A Shares ........................................................ (336) (270) -- --
L Shares ........................................................ (163) (125) -- --
--------- --------- -------- --------
Total Dividends ................................................... (7,461) (6,686) -- --
--------- --------- -------- --------
Capital Transactions (1):
T Shares:
Proceeds from Shares Issued ..................................... 187,428 97,378 5,911 3,953
Reinvestment of Cash Distributions .............................. 2,566 2,307 -- --
Cost of Shares Repurchased ...................................... (136,004) (200,850) (10,357) (15,842)
--------- --------- -------- --------
Increase (Decrease) in Net Assets From T Share Transactions ....... 53,990 (101,165) (4,446) (11,889)
--------- --------- -------- --------
A Shares (2):
Proceeds from Shares Issued ..................................... 11,177 12,024 28 --
Reinvestment of Cash Distributions .............................. 304 247 -- --
Cost of Shares Repurchased ...................................... (9,607) (8,883) (26) --
--------- --------- -------- --------
Increase (Decrease) in Net Assets From A Share Transactions ....... 1,874 3,388 2 --
--------- --------- -------- --------
L Shares (2):
Proceeds from Shares Issued ..................................... 29,013 16,261 1,309 823
Reinvestment of Cash Distributions .............................. 154 119 -- --
Cost of Shares Repurchased ...................................... (21,942) (24,930) (1,860) (2,373)
--------- --------- -------- --------
Increase (Decrease) in Net Assets From L Share Transactions ....... 7,225 (8,550) (551) (1,550)
--------- --------- -------- --------
Increase (Decrease) in Net Assets From Share Transactions ....... 63,089 (106,327) (4,995) (13,439)
--------- --------- -------- --------
Total Increase (Decrease) in Net Assets ....................... 216,944 (214,589) (1,183) (24,645)
--------- --------- -------- --------
Net Assets:
Beginning of Period ............................................. 709,428 924,017 18,274 42,919
--------- --------- -------- --------
End of Period ................................................... $ 926,372 $ 709,428 $ 17,091 $ 18,274
========= ========= ======== ========
Undistributed Net Investment Income (Accumulated Net Investment Loss) $ 1,551 $ 1,189 $ -- $ --
========= ========= ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
111
STATEMENTS OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS ENDED MAY 31,
INTERNATIONAL EQUITY INTERNATIONAL EQUITY
FUND INDEX FUND
----------------------- -----------------------
06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/03 05/31/04 05/31/03
--------- --------- --------- ---------
Operations:
Net Investment Income* ............................................ $ 2,690 $ 1,679 $ 4,350 $ 3,085
Capital Gain Received from Investments in
Affiliated Investment Companies* ................................ -- -- -- --
Net Realized Gain (Loss) on Securities Sold* ...................... 12,338 (44,637) 3,091 (16,811)
Net Realized Gain on Foreign Currency Transactions ................ 334 746 480 484
Net Change in Unrealized Appreciation (Depreciation)
on Foreign Currency and Translation of Other Assets
and Liabilities in Foreign Currency ............................. (192) 241 (40) 62
Net Change in Unrealized Appreciation (Depreciation)
on Investments* ................................................. 42,284 740 82,047 (26,241)
-------- --------- -------- --------
Net Increase (Decrease) in Net Assets from Operations ............. 57,454 (41,231) 89,928 (39,421)
-------- --------- -------- --------
Dividends and Distributions to Shareholders:
Net Investment Income:
T Shares ........................................................ (3,390) (1,433) (3,907) (1,078)
A Shares ........................................................ (74) (19) (153) (4)
L Shares ........................................................ (45) (22)
B Shares ........................................................ -- -- -- --
Return of Capital:
T Shares ........................................................ -- -- -- --
-------- --------- -------- --------
Total Dividends and Distributions ................................. (3,509) (1,452) (4,082) (1,082)
-------- --------- -------- --------
Capital Transactions (1):
T Shares (2):
Proceeds from Shares Issued ..................................... 144,029 86,628 83,517 62,225
Reinvestment of Cash Distributions .............................. 1,379 611 3,067 835
Cost of Shares Repurchased ...................................... (54,870) (108,037) (64,875) (62,128)
-------- --------- -------- --------
Increase (Decrease) in Net Assets from T Share Transactions ....... 90,538 (20,798) 21,709 932
-------- --------- -------- --------
A Shares (2):
Proceeds from Shares Issued ..................................... 16,666 14,843 22,245 21,764
Reinvestment of Cash Distributions .............................. 67 18 147 4
Cost of Shares Repurchased ...................................... (17,896) (13,138) (21,325) (15,195)
-------- --------- -------- --------
Increase (Decrease) in Net Assets from A Share Transactions ....... (1,163) 1,723 1,067 6,573
-------- --------- -------- --------
L Shares:
Proceeds from Shares Issued ..................................... 1,875 6,250 2,143 4,554
Reinvestment of Cash Distributions .............................. 43 -- 20 --
Cost of Shares Repurchased ...................................... (1,523) (6,195) (1,117) (4,487)
-------- --------- -------- --------
Increase in Net Assets from L Share Transactions .................. 395 55 1,046 67
-------- --------- -------- --------
B Shares (2):
Proceeds from Shares Issued ..................................... -- -- -- --
Reinvestment of Cash Distributions .............................. -- -- -- --
Cost of Shares Repurchased ...................................... -- -- -- --
-------- --------- -------- --------
Increase in Net Assets from B Share Transactions .................. -- -- -- --
-------- --------- -------- --------
Increase (Decrease) in Net Assets from Share Transactions ....... 89,770 (19,020) 23,822 7,572
-------- --------- -------- --------
Total Increase (Decrease) in Net Assets ....................... 143,715 (61,703) 109,668 (32,931)
-------- --------- -------- --------
Net Assets:
Beginning of Year ............................................. 203,127 264,830 261,740 294,671
-------- --------- -------- --------
End of Year ................................................... $346,842 $ 203,127 $371,408 $261,740
======== ========= ======== ========
Undistributed Net Investment Income ................................. $ 2,377 $ 2,222 $ 3,035 $ 2,287
======== ========= ======== ========
<FN>
* Net investment income, capital gains received from investments in affiliated investment companies, net realized gain
(loss) on securities sold and net change in unrealized appreciation (depreciation) on investments and for the Life Vision
Funds are attributable to the underlying investments in affiliated investment companies.
** Commencement of Operations.
(1) See Note 5 in Notes to Financial Statements for additional information.
</FN>
112
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS ENDED MAY 31,
LIFE VISION LIFE VISION
AGGRESSIVE GROWTH FUND CONSERVATIVE FUND
------------------------ ----------------------
06/01/03- 06/01/02- 06/01/03- 03/11/03**-
05/31/04 05/31/03 05/31/04 05/31/03
--------- --------- -------- ----------
Operations:
Net Investment Income* ............................................ $ 124 $ 89 $ 61 $ 1
Capital Gain Received from Investments in
Affiliated Investment Companies* ................................ -- 30 1 --
Net Realized Gain (Loss) on Securities Sold* ...................... 325 (1,580) 9 --
Net Realized Gain on Foreign Currency Transactions ................ -- -- -- --
Net Change in Unrealized Appreciation (Depreciation)
on Foreign Currency and Translation of Other Assets
and Liabilities in Foreign Currency ............................. -- -- -- --
Net Change in Unrealized Appreciation (Depreciation)
on Investments* ................................................. 6,169 (1,995) 95 18
------- ------- ------ ----
Net Increase (Decrease) in Net Assets from Operations ............. 6,618 (3,456) 166 19
------- ------- ------ ----
Dividends and Distributions to Shareholders:
Net Investment Income:
T Shares ........................................................ (120) (92) -- --
A Shares ........................................................ -- -- (3) --
L Shares ........................................................ -- --
B Shares ........................................................ (4) -- (47) --
Return of Capital:
T Shares ........................................................ (12) -- -- --
------- ------- ------ ----
Total Dividends and Distributions ................................. (136) (92) (50) --
------- ------- ------ ----
Capital Transactions (1):
T Shares (2):
Proceeds from Shares Issued ..................................... 8,576 5,003 30 --
Reinvestment of Cash Distributions .............................. 132 91 -- --
Cost of Shares Repurchased ...................................... (4,939) (7,185) -- --
------- ------- ------ ----
Increase (Decrease) in Net Assets from T Share Transactions ....... 3,769 (2,091) 30 --
------- ------- ------ ----
A Shares (2):
Proceeds from Shares Issued ..................................... 858 -- 485 --
Reinvestment of Cash Distributions .............................. -- -- 2 --
Cost of Shares Repurchased ...................................... -- -- (10) --
------- ------- ------ ----
Increase (Decrease) in Net Assets from A Share Transactions ....... 858 -- 477 --
------- ------- ------ ----
L Shares:
Proceeds from Shares Issued ..................................... -- -- -- --
Reinvestment of Cash Distributions .............................. -- -- -- --
Cost of Shares Repurchased ...................................... -- -- -- --
------- ------- ------ ----
Increase in Net Assets from L Share Transactions .................. -- -- -- --
------- ------- ------ ----
B Shares (2):
Proceeds from Shares Issued ..................................... 3,147 975 4,680 811
Reinvestment of Cash Distributions .............................. 4 -- 40 --
Cost of Shares Repurchased ...................................... (291) (1) (627) (30)
------- ------- ------ ----
Increase in Net Assets from B Share Transactions .................. 2,860 974 4,093 781
------- ------- ------ ----
Increase (Decrease) in Net Assets from Share Transactions ....... 7,487 (1,117) 4,600 781
------- ------- ------ ----
Total Increase (Decrease) in Net Assets ....................... 13,969 (4,665) 4,716 800
------- ------- ------ ----
Net Assets:
Beginning of Year ............................................. 29,733 34,398 800 --
------- ------- ------ ----
End of Year ................................................... $43,702 $29,733 $5,516 $800
======= ======= ====== ====
Undistributed Net Investment Income ................................. $ -- $ -- $ 12 $ 1
======= ======= ====== ====
LIFE VISION LIFE VISION
GROWTH AND INCOME FUND MODERATE GROWTH FUND
---------------------- ---------------------
06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/03 05/31/04 05/31/03
--------- --------- --------- ---------
Operations:
Net Investment Income* ............................................ $ 1,051 $ 928 $ 1,907 $ 1,614
Capital Gain Received from Investments in
Affiliated Investment Companies* ................................ 8 73 12 91
Net Realized Gain (Loss) on Securities Sold* ...................... 2,565 (4,254) 2,529 (1,615)
Net Realized Gain on Foreign Currency Transactions ................ -- -- -- --
Net Change in Unrealized Appreciation (Depreciation)
on Foreign Currency and Translation of Other Assets
and Liabilities in Foreign Currency ............................. -- -- -- --
Net Change in Unrealized Appreciation (Depreciation)
on Investments* ................................................. 8,207 (1,727) 9,804 (1,207)
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets from Operations ............. 11,831 (4,980) 14,252 (1,117)
-------- -------- -------- --------
Dividends and Distributions to Shareholders:
Net Investment Income:
T Shares ........................................................ (972) (931) (1,737) (1,621)
A Shares ........................................................ (5) -- (19) --
L Shares ........................................................ -- --
B Shares ........................................................ (58) -- (90) (1)
Return of Capital:
T Shares ........................................................ -- -- -- --
-------- -------- -------- --------
Total Dividends and Distributions ................................. (1,035) (931) (1,846) (1,622)
-------- -------- -------- --------
Capital Transactions (1):
T Shares (2):
Proceeds from Shares Issued ..................................... 22,469 19,612 45,870 34,474
Reinvestment of Cash Distributions .............................. 971 927 1,730 1,615
Cost of Shares Repurchased ...................................... (17,771) (32,451) (31,191) (28,076)
-------- -------- -------- --------
Increase (Decrease) in Net Assets from T Share Transactions ....... 5,669 (11,912) 16,409 8,013
-------- -------- -------- --------
A Shares (2):
Proceeds from Shares Issued ..................................... 1,432 -- 4,397 --
Reinvestment of Cash Distributions .............................. 5 -- 18 --
Cost of Shares Repurchased ...................................... (24) -- (898) --
-------- -------- -------- --------
Increase (Decrease) in Net Assets from A Share Transactions ....... 1,413 -- 3,517 --
-------- -------- -------- --------
L Shares:
Proceeds from Shares Issued ..................................... -- -- -- --
Reinvestment of Cash Distributions .............................. -- -- -- --
Cost of Shares Repurchased ...................................... -- -- -- --
-------- -------- -------- --------
Increase in Net Assets from L Share Transactions .................. -- -- -- --
-------- -------- -------- --------
B Shares (2):
Proceeds from Shares Issued ..................................... 10,738 1,896 10,808 2,605
Reinvestment of Cash Distributions .............................. 54 -- 87 1
Cost of Shares Repurchased ...................................... (567) (2) (1,204) (59)
-------- -------- -------- --------
Increase in Net Assets from B Share Transactions .................. 10,225 1,894 9,691 2,547
-------- -------- -------- --------
Increase (Decrease) in Net Assets from Share Transactions ....... 17,307 (10,018) 29,617 10,560
-------- -------- -------- --------
Total Increase (Decrease) in Net Assets ....................... 28,103 (15,929) 42,023 7,821
-------- -------- -------- --------
Net Assets:
Beginning of Year ............................................. 61,466 77,395 96,413 88,592
-------- -------- -------- --------
End of Year ................................................... $ 89,569 $ 61,466 $138,436 $ 96,413
======== ======== ======== ========
Undistributed Net Investment Income ................................. $ 133 $ 117 $ 340 $ 279
======== ======== ======== ========
<FN>
(2) T Shares were offered beginning on November 6, 2003 for the Life Vision Conservative Fund. A Shares were offered beginning on
October 16, 2003, November 11, 2003, November 5, 2003 and October 10, 2003 for the Life Vision Aggressive Growth Fund, the Life
Vision Conservative Fund, the Life Vision Growth and Income Fund and the Life Vision Moderate Growth Fund, respectively. B
Shares were offered beginning on March 11, 2003 for the Life Vision Aggressive Growth Fund, the Life Vision Conservative Fund,
the Life Vision Growth and Income Fund and the Life Vision Moderate Growth Fund, respectively.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
113
STATEMENTS OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
MID-CAP MID-CAP
EQUITY VALUE EQUITY
FUND FUND
--------------------- ---------------------
06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/03 05/31/04 05/31/03
--------- ---------- --------- ---------
Operations:
Net Investment Income (Loss) ...................................... $ 999 $ (612) $ 669 $ 659
Net Realized Gain (Loss) on Securities Sold ....................... 22,721 (17,032) 18,863 (36,016)
Net Change in Unrealized Appreciation
(Depreciation) on Investments ................................... 6,629 (6,819) 12,849 724
-------- --------- -------- --------
Net Increase (Decrease) in Net Assets
from Operations ................................................. 30,349 (24,463) 32,381 (34,633)
-------- --------- -------- --------
Dividends and Distributions to Shareholders:
Net Investment Income:
T Shares ........................................................ (869) -- (653) (552)
A Shares ........................................................ (41) -- -- --
L Shares ........................................................ (12) -- (1) (4)
Capital Gains:
T Shares ........................................................ -- -- -- (2,137)
A Shares ........................................................ -- -- -- --
L Shares ........................................................ -- -- -- (108)
-------- --------- -------- --------
Total Dividends and Distributions ................................. (922) -- (654) (2,801)
-------- --------- -------- --------
Capital Transactions (1):
T Shares:
Proceeds from Shares Issued ..................................... 82,329 126,939 49,725 42,357
Reinvestment of Cash Distributions .............................. 360 -- 224 1,307
Redemption Fees ................................................. -- 83 -- --
Cost of Shares Repurchased ...................................... (48,540) (159,005) (32,636) (82,431)
-------- --------- -------- --------
Increase (Decrease) in Net Assets From
T Share Transactions ............................................ 34,149 (31,983) 17,313 (38,767)
-------- --------- -------- --------
A Shares (2):
Proceeds from Shares Issued ..................................... 6,855 4,798 781 --
Reinvestment of Cash Distributions .............................. 39 -- -- --
Cost of Shares Repurchased ...................................... (4,089) (2,409) (195) --
-------- --------- -------- --------
Increase (Decrease) in Net Assets From
A Share Transactions ............................................ 2,805 2,389 586 --
-------- --------- -------- --------
L Shares (2):
Proceeds from Shares Issued ..................................... 6,138 3,460 3,478 3,348
Reinvestment of Cash Distributions .............................. 11 -- 1 98
Cost of Shares Repurchased ...................................... (4,521) (3,677) (3,028) (1,971)
-------- --------- -------- --------
Increase (Decrease) in Net Assets From
L Share Transactions ............................................ 1,628 (217) 451 1,475
-------- --------- -------- --------
Increase (Decrease) in Net Assets From
Share Transactions ............................................ 38,582 (29,811) 18,350 (37,292)
-------- --------- -------- --------
Total Increase (Decrease) in Net Assets ....................... 68,009 (54,274) 50,077 (74,726)
-------- --------- -------- --------
Net Assets:
Beginning of Period ........................................... 142,242 196,516 105,598 180,324
-------- --------- -------- --------
End of Period ................................................. $210,251 $ 142,242 $155,675 $105,598
======== ========= ======== ========
Undistributed Net Investment Income
(Accumulated Net Investment Loss) ............................... $ 77 $ -- $ 142 $ 127
======== ========= ======== ========
<FN>
* Commencement of Operations.
(1) See Note 5 in Notes to Financial Statements for additional information.
(2) A Shares were offered beginning on October 27, 2003, October 9, 2003, October 8, 2003 and October 14, 2003 for the Mid-Cap
Value Equity Fund, the Small Cap Value Equity Fund, the Strategic Quantitative Equity Fund and the Tax Sensitive Growth
Stock Fund, respectively. L Shares were offered beginning on October 13, 2003 for the Strategic Quantitative Equity Fund.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
114
STATEMENTS OF CHANGES IN NET ASSETS (000)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
SMALL CAP
GROWTH SMALL CAP VALUE
STOCK FUND EQUITY FUND
---------------------- ---------------------
06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/03 05/31/04 05/31/03
Operations:
Net Investment Income (Loss) ...................................... $ (7,285) $ (4,842) $ 2,067 $ 3,018
Net Realized Gain (Loss) on Securities Sold ....................... 145,086 (73,786) 66,912 20,540
Net Change in Unrealized Appreciation
(Depreciation) on Investments ................................... 80,171 14,238 113,873 (63,220)
--------- --------- --------- ---------
Net Increase (Decrease) in Net Assets
from Operations ................................................. 217,972 (64,390) 182,852 (39,662)
--------- --------- --------- ---------
Dividends and Distributions to Shareholders:
Net Investment Income:
T Shares ........................................................ -- -- (2,433) (2,605)
A Shares ........................................................ -- -- -- --
L Shares ........................................................ -- -- (5) --
Capital Gains:
T Shares ........................................................ -- (8,364) -- --
A Shares ........................................................ -- (313) -- --
L Shares ........................................................ -- (427) -- --
--------- --------- --------- ---------
Total Dividends and Distributions ................................. -- (9,104) (2,438) (2,605)
--------- --------- --------- ---------
Capital Transactions (1):
T Shares:
Proceeds from Shares Issued ..................................... 208,034 138,559 194,843 119,973
Reinvestment of Cash Distributions .............................. -- 6,573 1,303 1,424
Redemption Fees ................................................. -- -- -- --
Cost of Shares Repurchased ...................................... (187,311) (104,086) (200,738) (176,975)
--------- --------- --------- ---------
Increase (Decrease) in Net Assets From
T Share Transactions ............................................ 20,723 41,046 (4,592) (55,578)
--------- --------- --------- ---------
A Shares (2):
Proceeds from Shares Issued ..................................... 18,285 7,284 5,183 --
Reinvestment of Cash Distributions .............................. -- 296 -- --
Cost of Shares Repurchased ...................................... (7,136) (7,682) (1,130) --
--------- --------- --------- ---------
Increase (Decrease) in Net Assets From
A Share Transactions ............................................ 11,149 (102) 4,053 --
--------- --------- --------- ---------
L Shares (2):
Proceeds from Shares Issued ..................................... 14,012 6,509 11,644 13,859
Reinvestment of Cash Distributions .............................. -- 414 5 --
Cost of Shares Repurchased ...................................... (8,464) (6,817) (11,209) (10,389)
--------- --------- --------- ---------
Increase (Decrease) in Net Assets From
L Share Transactions ............................................ 5,548 106 440 3,470
--------- --------- --------- ---------
Increase (Decrease) in Net Assets From
Share Transactions ............................................ 37,420 41,050 (99) (52,108)
--------- --------- --------- ---------
Total Increase (Decrease) in Net Assets ....................... 255,392 (32,444) 180,315 (94,375)
--------- --------- --------- ---------
Net Assets:
Beginning of Period ........................................... 615,202 647,646 552,532 646,907
--------- --------- --------- ---------
End of Period ................................................. $ 870,594 $ 615,202 $ 732,847 $ 552,532
========= ========= ========= =========
Undistributed Net Investment Income
(Accumulated Net Investment Loss) ............................... $ -- $ 208 $ 1,083 $ 1,454
========= ========= ========= =========
STRATEGIC TAX SENSITIVE
QUANTITATIVE GROWTH VALUE INCOME
EQUITY FUND STOCK FUND STOCK FUND
------------ ----------------------- -----------------------
08/07/03*- 06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/04 05/31/03 05/31/04 05/31/03
---------- --------- --------- --------- ---------
Operations:
Net Investment Income (Loss) ................... $ (90) $ (1,885) $ (1,308) $ 10,571 $ 11,079
Net Realized Gain (Loss) on Securities Sold .... 3,973 31,183 (64,791) 71,412 (77,218)
Net Change in Unrealized Appreciation
(Depreciation) on Investments ................ 3,104 2,584 16,858 62,760 (14,271)
------- --------- --------- --------- ---------
Net Increase (Decrease) in Net Assets
from Operations .............................. 6,987 31,882 (49,241) 144,743 (80,410)
------- --------- --------- --------- ---------
Dividends and Distributions to Shareholders:
Net Investment Income:
T Shares ..................................... -- -- -- (9,766) (9,401)
A Shares ..................................... -- -- -- (744) (735)
L Shares ..................................... -- -- -- (212) (189)
Capital Gains:
T Shares ..................................... (972) -- -- -- --
A Shares ..................................... (1) -- -- -- --
L Shares ..................................... (21) -- -- -- --
------- --------- --------- --------- ---------
Total Dividends and Distributions .............. (994) -- -- (10,722) (10,325)
------- --------- --------- --------- ---------
Capital Transactions (1):
T Shares:
Proceeds from Shares Issued .................. 63,691 10,614 79,785 117,907 189,197
Reinvestment of Cash Distributions ........... 655 -- -- 7,527 7,198
Redemption Fees .............................. -- -- -- -- --
Cost of Shares Repurchased ................... (3,492) (84,727) (97,881) (204,589) (126,339)
------- --------- --------- --------- ---------
Increase (Decrease) in Net Assets From
T Share Transactions ......................... 60,854 (74,113) (18,096) (79,155) 70,056
------- --------- --------- --------- ---------
A Shares (2):
Proceeds from Shares Issued .................. 156 664 -- 8,238 10,612
Reinvestment of Cash Distributions ........... 1 -- -- 704 705
Cost of Shares Repurchased ................... (3) (318) -- (12,649) (12,542)
------- --------- --------- --------- ---------
Increase (Decrease) in Net Assets From
A Share Transactions ......................... 154 346 -- (3,707) (1,225)
------- --------- --------- --------- ---------
L Shares (2):
Proceeds from Shares Issued .................. 1,627 4,890 7,888 11,995 8,232
Reinvestment of Cash Distributions ........... 19 -- -- 201 181
Cost of Shares Repurchased ................... (107) (33,456) (44,717) (12,967) (11,412)
------- --------- --------- --------- ---------
Increase (Decrease) in Net Assets From
L Share Transactions ......................... 1,539 (28,566) (36,829) (771) (2,999)
------- --------- --------- --------- ---------
Increase (Decrease) in Net Assets From
Share Transactions ......................... 62,547 (102,333) (54,925) (83,633) 65,832
------- --------- --------- --------- ---------
Total Increase (Decrease) in Net Assets .... 68,540 (70,451) (104,166) 50,388 (24,903)
------- --------- --------- --------- ---------
Net Assets:
Beginning of Period ........................ -- 308,514 412,680 796,200 821,103
------- --------- --------- --------- ---------
End of Period .............................. $68,540 $ 238,063 $ 308,514 $ 846,588 $ 796,200
======= ========= ========= ========= =========
Undistributed Net Investment Income
(Accumulated Net Investment Loss) ............ $ (18) $ (1,149) $ (835) $ 2,012 $ 2,163
======= ========= ========= ========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
115
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL
VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS
BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND
OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS
--------- ------------- ---------------- ---------- ---------- -------------- -------------
AGGRESSIVE GROWTH STOCK FUND
T Shares
2004(1) $10.00 $(0.02)(2) $ 0.02(2) $ -- $ -- $ -- $ --
A Shares
2004(1) $10.00 $(0.03)(2) $ 0.02(2) $(0.01) $ -- $ -- $ --
L Shares
2004(1) $10.00 $(0.04)(2) $ 0.01(2) $(0.03) $ -- $ -- $ --
BALANCED FUND
T Shares
2004 $11.92 $ 0.18(2) $ 0.32(2) $ 0.50 $(0.19) $ -- $(0.19)
2003 12.18 0.20 (0.23) (0.03) (0.23) -- (0.23)
2002 13.18 0.23 (0.65) (0.42) (0.24) (0.34) (0.58)
2001 13.37 0.30 0.12 0.42 (0.31) (0.30) (0.61)
2000 13.26 0.32 0.33 0.65 (0.30) (0.24) (0.54)
A Shares
2004 $11.97 $ 0.14(2) $ 0.33(2) $ 0.47 $(0.16) $ -- $(0.16)
2003 12.24 0.16 (0.24) (0.08) (0.19) -- (0.19)
2002 13.24 0.18 (0.64) (0.46) (0.20) (0.34) (0.54)
2001 13.43 0.27 0.11 0.38 (0.27) (0.30) (0.57)
2000 13.32 0.29 0.31 0.60 (0.25) (0.24) (0.49)
L Shares
2004 $11.82 $ 0.05(2) $ 0.32(2) $ 0.37 $(0.07) $ -- $(0.07)
2003 12.07 0.08 (0.22) (0.14) (0.11) -- (0.11)
2002 13.07 0.10 (0.65) (0.55) (0.11) (0.34) (0.45)
2001 13.27 0.16 0.11 0.27 (0.17) (0.30) (0.47)
2000 13.17 0.17 0.33 0.50 (0.16) (0.24) (0.40)
CAPITAL APPRECIATION FUND
T Shares
2004 $11.02 $(0.03)(2) $ 1.34(2) $ 1.31 $ -- $ -- $ --
2003 12.24 (0.03)(2) (1.19)(2) (1.22) -- -- --
2002 13.89 -- (1.53) (1.53) -- (0.12) (0.12)
2001 17.12 (0.05) (0.38) (0.43) -- (2.80) (2.80)
2000 16.62 0.02 1.40 1.42 -- (0.92) (0.92)
A Shares
2004 $10.63 $(0.10)(2) $ 1.29(2) $ 1.19 $ -- $ -- $ --
2003 11.89 (0.10)(2) (1.16)(2) (1.26) -- -- --
2002 13.59 (0.10) (1.48) (1.58) -- (0.12) (0.12)
2001 16.91 (0.14) (0.38) (0.52) -- (2.80) (2.80)
2000 16.53 (0.11) 1.41 1.30 -- (0.92) (0.92)
L Shares
2004 $10.15 $(0.15)(2) $ 1.22(2) $ 1.07 $ -- $ -- $ --
2003 11.40 (0.14)(2) (1.11)(2) (1.25) -- -- --
2002 13.09 (0.06) (1.51) (1.57) -- (0.12) (0.12)
2001 16.45 (0.16) (0.40) (0.56) -- (2.80) (2.80)
2000 16.18 (0.24) 1.43 1.19 -- (0.92) (0.92)
EMERGING GROWTH STOCK FUND
T Shares
2004(1) $10.00 $(0.03)(2) $(0.37)(2) $(0.40) $ -- $ -- $ --
A Shares
2004(1) $10.00 $(0.04)(2) $(0.37)(2) $(0.41) $ -- $ -- $ --
L Shares
2004(3) $10.14 $(0.05)(2) $(0.51)(2) $(0.56) $ -- $ -- $ --
<FN>
+ Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund
shares.
++ Ratio reflects the impact of the initial low level of average net assets associated with commencement of operations.
(1) Commenced operations on February 23, 2004. All ratios for the period have been annualized.
(2) Per share data calculated using average shares outstanding method.
(3) Commenced operations on February 27, 2004. All ratios for the period have been annualized.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
116
- --------------------------------------------------------------------------------
RATIO OF
NET ASSET NET ASSETS, RATIO OF NET INVESTMENT
VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO
OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
---------- ------- ------------ ------------------ ------------------
AGGRESSIVE GROWTH STOCK FUND
T Shares
2004(1) $10.00 --% $ 20,501 1.22% (0.74)%
A Shares
2004(1) $ 9.99 (0.10)% $ 49 1.65% (1.25)%
L Shares
2004(1) $ 9.97 (0.30)% $ 65 2.10% (1.69)%
BALANCED FUND
T Shares
2004 $12.23 4.24% $ 244,042 1.02% 1.50%
2003 11.92 (0.14) 228,475 1.02 1.74
2002 12.18 (3.29) 241,604 1.02 1.78
2001 13.18 3.24 209,316 1.01 2.24
2000 13.37 5.02 223,634 0.97 2.39
A Shares
2004 $12.28 3.91% $ 8,902 1.34% 1.18%
2003 11.97 (0.54) 8,285 1.33 1.43
2002 12.24 (3.57) 9,020 1.33 1.46
2001 13.24 2.91 7,834 1.32 1.93
2000 13.43 4.66 9,627 1.27 2.07
L Shares
2004 $12.12 3.12% $ 65,435 2.09% 0.42%
2003 11.82 (1.15) 67,567 2.09 0.67
2002 12.07 (4.33) 74,880 2.09 0.71
2001 13.07 2.11 67,824 2.07 1.18
2000 13.27 3.88 64,322 2.03 1.33
CAPITAL APPRECIATION FUND
T Shares
2004 $12.33 11.89% $1,248,636 1.23% (0.25)%
2003 11.02 (9.97) 1,090,549 1.22 (0.32)
2002 12.24 (11.06) 1,204,445 1.22 (0.54)
2001 13.89 (3.74) 1,177,933 1.21 (0.29)
2000 17.12 8.98 1,296,927 1.17 0.10
A Shares
2004 $11.82 11.19% $ 145,883 1.88% (0.91)%
2003 10.63 (10.60) 141,488 1.88 (0.98)
2002 11.89 (11.68) 163,155 1.88 (1.20)
2001 13.59 (4.38) 202,548 1.86 (0.94)
2000 16.91 8.29 251,421 1.82 (0.55)
L Shares
2004 $11.22 10.54% $ 100,472 2.35% (1.38)%
2003 10.15 (10.96) 94,505 2.35 (1.45)
2002 11.40 (12.05) 110,923 2.35 (1.67)
2001 13.09 (4.79) 112,497 2.33 (1.41)
2000 16.45 7.77 128,159 2.29 (1.03)
EMERGING GROWTH STOCK FUND
T Shares
2004(1) $ 9.60 (4.00)% $ 12,891 1.22% (1.04)%
A Shares
2004(1) $ 9.59 (4.10)% $ 39 1.65% (1.46)%
L Shares
2004(3) $ 9.58 (5.52)% $ 34 2.11% (1.95)%
RATIO OF
EXPENSES TO
AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS TURNOVER
AND/OR REIMBURSEMENTS) RATE
---------------------- ---------
AGGRESSIVE GROWTH STOCK FUND
T Shares
2004(1) 1.61% 2%
A Shares
2004(1) 11.29%++ 2%
L Shares
2004(1) 8.78%++ 2%
BALANCED FUND
T Shares
2004 1.05% 116%
2003 1.05 102
2002 1.05 95
2001 1.05 99
2000 1.07 182
A Shares
2004 1.54% 116%
2003 1.55 102
2002 1.55 95
2001 1.54 99
2000 1.51 182
L Shares
2004 2.18% 116%
2003 2.18 102
2002 2.16 95
2001 2.15 99
2000 2.18 182
CAPITAL APPRECIATION FUND
T Shares
2004 1.24% 106%
2003 1.24 69
2002 1.24 75
2001 1.24 75
2000 1.26 129
A Shares
2004 2.00% 106%
2003 2.00 69
2002 1.99 75
2001 1.98 75
2000 1.98 129
L Shares
2004 2.43% 106%
2003 2.45 69
2002 2.39 75
2001 2.39 75
2000 2.39 129
EMERGING GROWTH STOCK FUND
T Shares
2004(1) 1.69% 11%
A Shares
2004(1) 13.36%++ 11%
L Shares
2004(3) 18.36%++ 11%
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
117
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL
VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS
BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND
OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS
--------- ------------- ---------------- ---------- ---------- -------------- -------------
GROWTH AND INCOME FUND
T Shares
2004 $12.21 $ 0.14(1) $ 2.50(1) $ 2.64 $(0.13) $ -- $(0.13)
2003 13.80 0.13 (1.60) (1.47) (0.12) -- (0.12)
2002 15.05 0.09 (1.26) (1.17) (0.08) -- (0.08)
2001 15.53 0.07 (0.04) 0.03 (0.08) (0.43) (0.51)
2000 16.09 0.11 0.55 0.66 (0.10) (1.12) (1.22)
A Shares
2004 $12.31 $ 0.12(1) $ 2.51(1) $ 2.63 $(0.11) $ -- $(0.11)
2003 13.91 0.11 (1.61) (1.50) (0.10) -- (0.10)
2002 15.17 0.06 (1.27) (1.21) (0.05) -- (0.05)
2001 15.65 0.04 (0.04) -- (0.05) (0.43) (0.48)
2000 16.21 0.09 0.55 0.64 (0.08) (1.12) (1.20)
L Shares
2004 $12.08 $ 0.01(1) $ 2.47(1) $ 2.48 $(0.02) $ -- $(0.02)
2003 13.66 -- (1.56) (1.56) (0.02) -- (0.02)
2002 14.96 (0.02) (1.28) (1.30) -- -- --
2001 15.49 (0.05) (0.05) (0.10) -- (0.43) (0.43)
2000 16.10 -- 0.51 0.51 -- (1.12) (1.12)
INFORMATION AND TECHNOLOGY FUND
T Shares
2004 $ 6.07 $(0.06)(1) $ 1.49(1) $ 1.43 $ -- $ -- $ --
2003 8.06 (0.04)(1) (1.95)(1) (1.99) -- -- --
2002 13.34 0.01 (5.29) (5.28) -- -- --
2001 15.87 (0.08) (2.45) (2.53) -- -- --
2000(2) 10.00 (0.04) 5.91 5.87 -- -- --
A Shares
2004(3) $ 7.16 $(0.07)(1) $ 0.40(1) $ 0.33 $ -- $ -- $ --
L Shares
2004 $ 5.86 $(0.12)(1) $ 1.44(1) $ 1.32 $ -- $ -- $ --
2003 7.86 (0.09)(1) (1.91)(1) (2.00) -- -- --
2002 13.15 (0.14) (5.15) (5.29) -- -- --
2001 15.81 (0.22) (2.44) (2.66) -- -- --
2000(4) 18.20 (0.07) (2.32) (2.39) -- -- --
INTERNATIONAL EQUITY FUND
T Shares
2004 $ 8.00 $ 0.10(1) $ 2.19(1) $ 2.29 $(0.14) $ -- $(0.14)
2003 9.31 0.07 (1.32) (1.25) (0.06) -- (0.06)
2002 10.19 0.19 (1.07) (0.88) -- -- --
2001 12.56 -- (1.22) (1.22) (0.04) (1.11) (1.15)
2000 12.97 (0.10) 1.42 1.32 (0.07) (1.66) (1.73)
A Shares
2004 $ 7.92 $ 0.04(1) $ 2.17(1) $ 2.21 $(0.10) $ -- $(0.10)
2003 9.21 0.04 (1.30) (1.26) (0.03) -- (0.03)
2002 10.11 0.14 (1.04) (0.90) -- -- --
2001 12.47 (0.02) (1.23) (1.25) -- (1.11) (1.11)
2000 12.89 (0.11) 1.37 1.26 (0.02) (1.66) (1.68)
L Shares
2004 $ 7.50 $(0.01)(1) $ 2.06(1) $ 2.05 $(0.06) $ -- $(0.06)
2003 8.75 (0.01) (1.24) (1.25) -- -- --
2002 9.68 0.04 (0.97) (0.93) -- -- --
2001 12.06 (0.16) (1.11) (1.27) -- (1.11) (1.11)
2000 12.58 (0.32) 1.46 1.14 -- (1.66) (1.66)
<FN>
+ Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund
shares.
++ Ratio reflects the impact of the initial low level of average net assets associated with commencement of operations.
(1) Per share data calculated using average shares outstanding method.
(2) T Shares were offered beginning on September 30, 1999. All ratios for the period have been annualized.
(3) A Shares were offered beginning on October 27, 2003. All ratios for the period have been annualized.
(4) L Shares were offered beginning on January 24, 2000. All ratios for the period have been annualized.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
118
- --------------------------------------------------------------------------------
RATIO OF
NET ASSET NET ASSETS, RATIO OF NET INVESTMENT
VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO
OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
---------- ------- ------------ ------------------ ------------------
GROWTH AND INCOME FUND
T Shares
2004 $14.72 21.76% $ 782,665 1.00% 1.03%
2003 12.21 (10.58) 598,862 0.99 1.05
2002 13.80 (7.80) 792,557 0.99 0.63
2001 15.05 0.11 867,664 0.99 0.49
2000 15.53 4.11 885,109 1.01 0.76
A Shares
2004 $14.83 21.45% $ 45,808 1.18% 0.84%
2003 12.31 (10.74) 36,305 1.18 0.88
2002 13.91 (7.97) 36,789 1.18 0.44
2001 15.17 (0.07) 40,174 1.18 0.30
2000 15.65 3.92 42,666 1.18 0.58
L Shares
2004 $14.54 20.58% $ 97,899 1.93% 0.09%
2003 12.08 (11.41) 74,261 1.93 0.11
2002 13.66 (8.69) 94,671 1.93 (0.29)
2001 14.96 (0.77) 78,376 1.93 (0.45)
2000 15.49 3.11 62,462 1.93 (0.14)
INFORMATION AND TECHNOLOGY FUND
T Shares
2004 $ 7.50 23.56% $ 9,712 1.36% (0.87)%
2003 6.07 (24.69) 11,789 1.25 (0.72)
2002 8.06 (39.58) 32,068 1.19 (0.92)
2001 13.34 (15.94) 87,045 1.20 (0.45)
2000(2) 15.87 58.70 106,425 1.20 (0.54)
A Shares
2004(3) $ 7.49 4.61% $ 2 1.72% (1.52)%
L Shares
2004 $ 7.18 22.53% $ 7,377 2.25% (1.79)%
2003 5.86 (25.45) 6,485 2.25 (1.68)
2002 7.86 (40.23) 10,851 2.25 (1.99)
2001 13.15 (16.82) 22,104 2.25 (1.50)
2000(4) 15.81 (13.13) 20,201 2.25 (1.65)
INTERNATIONAL EQUITY FUND
T Shares
2004 $10.15 28.64% $ 332,180 1.41% 1.08%
2003 8.00 (13.40) 191,041 1.46 0.83
2002 9.31 (8.64) 252,991 1.48 0.48
2001 10.19 (10.79) 208,120 1.45 0.50
2000 12.56 10.58 299,100 1.48 0.59
A Shares
2004 $10.03 27.97% $ 7,056 1.83% 0.46%
2003 7.92 (13.70) 6,408 1.83 0.59
2002 9.21 (8.90) 5,272 1.83 (0.21)
2001 10.11 (11.13) 7,517 1.79 0.18
2000 12.47 10.15 10,462 1.83 0.33
L Shares
2004 $ 9.49 27.32% $ 7,606 2.53% (0.15)%
2003 7.50 (14.29) 5,678 2.53 (0.17)
2002 8.75 (9.61) 6,567 2.53 (0.73)
2001 9.68 (11.71) 7,765 2.48 (0.51)
2000 12.06 9.38 10,891 2.53 (0.38)
RATIO OF
EXPENSES TO
AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS TURNOVER
AND/OR REIMBURSEMENTS) RATE
---------------------- ---------
GROWTH AND INCOME FUND
T Shares
2004 1.00% 51%
2003 0.99 52
2002 0.99 68
2001 0.99 73
2000 1.01 53
A Shares
2004 1.36% 51%
2003 1.38 52
2002 1.36 68
2001 1.35 73
2000 1.31 53
L Shares
2004 2.17% 51%
2003 2.20 52
2002 2.16 68
2001 2.14 73
2000 2.18 53
INFORMATION AND TECHNOLOGY FUND
T Shares
2004 1.36% 384%
2003 1.25 1,259
2002 1.19 1,102
2001 1.21 750
2000(2) 1.34 250
A Shares
2004(3) 310.77%++ 384%
L Shares
2004 2.86% 384%
2003 3.00 1,259
2002 2.57 1,102
2001 2.45 750
2000(4) 2.40 250
INTERNATIONAL EQUITY FUND
T Shares
2004 1.41% 58%
2003 1.46 89
2002 1.48 102
2001 1.45 68
2000 1.48 179
A Shares
2004 2.06% 58%
2003 2.22 89
2002 2.08 102
2001 1.97 68
2000 1.95 179
L Shares
2004 2.86% 58%
2003 3.03 89
2002 2.93 102
2001 2.57 68
2000 2.74 179
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
119
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL
VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS
BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND
OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS
--------- ------------- ---------------- ---------- ---------- -------------- -------------
INTERNATIONAL EQUITY INDEX FUND
T Shares
2004 $ 8.39 $ 0.14(1) $ 2.71(1) $ 2.85 $(0.13) $ -- $(0.13)
2003 9.76 0.10(1) (1.43)(1) (1.33) (0.04) -- (0.04)
2002 11.18 0.04 (1.43) (1.39) (0.03) -- (0.03)
2001 13.97 0.06 (2.69) (2.63) (0.07) (0.09) (0.16)
2000 11.82 0.16 2.13 2.29 (0.03) (0.11) (0.14)
A Shares
2004 $ 8.28 $ 0.07(1) $ 2.68(1) $ 2.75 $(0.10) $ -- $(0.10)
2003 9.64 0.10(1) (1.45)(1) (1.35) (0.01) -- (0.01)
2002 11.05 (0.02) (1.38) (1.40) (0.01) -- (0.01)
2001 13.80 (0.01) (2.65) (2.66) -- (0.09) (0.09)
2000 11.70 (0.11) 2.32 2.21 -- (0.11) (0.11)
L Shares
2004 $ 8.10 $ 0.02(1) $ 2.62(1) $ 2.64 $(0.05) $ -- $(0.05)
2003 9.48 0.01(1) (1.39)(1) (1.38) -- -- --
2002 10.93 (0.12) (1.33) (1.45) -- -- --
2001 13.74 (0.06) (2.66) (2.72) -- (0.09) (0.09)
2000 11.73 0.08 2.04 2.12 -- (0.11) (0.11)
LIFE VISION AGGRESSIVE GROWTH FUND (A) (B)
T Shares
2004 $ 8.55 $ 0.04(1) $ 1.70(1) $ 1.74 $(0.04)* $ -- $(0.04)*
2003 9.57 0.03 (1.02) (0.99) (0.03) -- (0.03)
2002 10.31 0.02 (0.74) (0.72) (0.02) -- (0.02)
2001 11.61 0.11 0.23 0.34 (0.12) (1.52) (1.64)
2000 11.31 0.05 0.74 0.79 (0.05) (0.44) (0.49)
A Shares
2004(2) $ 9.46 $(0.01)(1) $ 0.81(1) $ 0.80 $(0.03) $ -- $(0.03)
B Shares
2004 $ 8.53 $(0.04)(1) $ 1.70(1) $ 1.66 $(0.01) $ -- $(0.01)
2003(3) 7.23 (0.01) 1.31 1.30 -- -- --
LIFE VISION CONSERVATIVE FUND (A) (B)
T Shares
2004(4) $10.71 $ 0.15(1) $ 0.14(1) $ 0.29 $(0.13) $ -- $(0.13)
A Shares
2004(5) $10.68 $ 0.12(1) $ 0.18(1) $ 0.30 $(0.12) $ -- $(0.12)
B Shares
2004 $10.43 $ 0.17(1) $ 0.39(1) $ 0.56 $(0.13) $ -- $(0.13)
2003(3) 10.00 0.01 0.42 0.43 -- -- --
LIFE VISION GROWTH AND INCOME FUND (A) (B)
T Shares
2004 $ 9.33 $ 0.14(1) $ 1.43(1) $ 1.57 $(0.14) $ -- $(0.14)
2003 9.98 0.13 (0.65) (0.52) (0.13) -- (0.13)
2002 10.42 0.12 (0.43) (0.31) (0.13) -- (0.13)
2001 10.50 0.24 0.40 0.64 (0.25) (0.47) (0.72)
2000 10.33 0.07 0.52 0.59 (0.17) (0.25) (0.42)
A Shares
2004(6) $10.18 $ 0.06(1) $ 0.58(1) $ 0.64 $(0.07) $ -- $(0.07)
B Shares
2004 $ 9.34 $ 0.07(1) $ 1.42(1) $ 1.49 $(0.09) $ -- $(0.09)
2003(3) 8.10 0.02 1.24 1.26 (0.02) -- (0.02)
<FN>
* Includes return of capital of $0.003.
+ Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund
shares.
++ Ratio reflects the impact of the initial low level of average net assets associated with commencement of operations.
(1) Per share data calculated using average shares outstanding method.
(2) A Shares were offered beginning on October 16, 2003. All ratios for the period have been annualized.
(3) B Shares were offered beginning on March 11, 2003. All ratios for the period have been annualized.
(4) T Shares were offered beginning on November 6, 2003. All ratios for the period have been annualized.
(5) A Shares were offered beginning on November 11, 2003. All ratios for the period have been annualized.
(6) A Shares were offered beginning on November 5, 2003. All ratios for the period have been annualized.
(A) The Life Vision Funds and its shareholders indirectly bear a pro rata share of the expenses of the underlying STIClassic Funds.
The expense ratios do not include such expenses.
(B) Recognition of net investment income by the Life Vision Funds is affected by the timing of the declaration of dividends by the
STI Classic Funds in which the Life Vision Funds invest.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
120
- --------------------------------------------------------------------------------
RATIO OF
NET ASSET NET ASSETS, RATIO OF NET INVESTMENT
VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO
OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
---------- ------- ------------ ------------------ ------------------
INTERNATIONAL EQUITY INDEX FUND
T Shares
2004 $11.11 34.07% $ 351,163 0.98% 1.38%
2003 8.39 (13.63) 248,770 1.03 1.26
2002 9.76 (12.43) 287,944 1.04 0.63
2001 11.18 (18.90) 236,862 1.06 0.40
2000 13.97 19.36 340,853 1.07 0.83
A Shares
2004 $10.93 33.26% $ 15,037 1.49% 0.73%
2003 8.28 (14.03) 9,877 1.49 1.33
2002 9.64 (12.65) 3,222 1.49 (0.12)
2001 11.05 (19.31) 3,451 1.46 0.05
2000 13.80 18.86 4,563 1.47 0.07
L Shares
2004 $10.69 32.60% $ 5,208 2.14% 0.25%
2003 8.10 (14.56) 3,093 2.14 0.18
2002 9.48 (13.27) 3,505 2.14 (0.68)
2001 10.93 (19.84) 4,731 2.10 (0.61)
2000 13.74 18.04 5,853 2.12 (0.36)
LIFE VISION AGGRESSIVE GROWTH FUND (A) (B)
T Shares
2004 $10.25 20.34% $ 38,468 0.25% 0.39%
2003 8.55 (10.36) 28,681 0.25 0.33
2002 9.57 (6.96) 34,398 0.25 0.17
2001 10.31 3.07 23,936 0.25 1.05
2000 11.61 7.25 18,412 0.25 0.48
A Shares
2004(2) $10.23 8.43% $ 867 0.51% (0.24)%
B Shares
2004 $10.18 19.49% $ 4,367 1.00% (0.36)%
2003(3) 8.53 18.03 1,052 0.89 (0.86)
LIFE VISION CONSERVATIVE FUND (A) (B)
T Shares
2004(4) $10.87 2.68% $ 30 0.25% 2.41%
A Shares
2004(5) $10.86 2.82% $ 474 0.57% 2.06%
B Shares
2004 $10.86 5.38% $ 5,012 0.95% 1.54%
2003(3) 10.43 4.30 800 0.92 0.85
LIFE VISION GROWTH AND INCOME FUND (A) (B)
T Shares
2004 $10.76 16.92% $ 75,083 0.25% 1.38%
2003 9.33 (5.16) 59,449 0.25 1.46
2002 9.98 (2.97) 77,395 0.25 1.25
2001 10.42 6.31 37,550 0.25 2.41
2000 10.50 5.81 30,473 0.25 1.77
A Shares
2004(6) $10.75 6.32% $ 1,426 0.56% 1.04%
B Shares
2004 $10.74 15.99% $ 13,060 1.00% 0.63%
2003(3) 9.34 15.57 2,017 0.90 0.39
RATIO OF
EXPENSES TO
AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS TURNOVER
AND/OR REIMBURSEMENTS) RATE
---------------------- ---------
INTERNATIONAL EQUITY INDEX FUND
T Shares
2004 1.07% 10%
2003 1.12 25
2002 1.12 35
2001 1.09 13
2000 1.18 9
A Shares
2004 1.61% 10%
2003 1.87 25
2002 1.90 35
2001 1.83 13
2000 1.79 9
L Shares
2004 2.54% 10%
2003 2.82 25
2002 2.62 35
2001 2.15 13
2000 2.61 9
LIFE VISION AGGRESSIVE GROWTH FUND (A) (B)
T Shares
2004 0.39% 44%
2003 0.40 50
2002 0.41 101
2001 0.43 202
2000 0.44 183
A Shares
2004(2) 5.15% 44%
B Shares
2004 1.95% 44%
2003(3) 1.36 50
LIFE VISION CONSERVATIVE FUND (A) (B)
T Shares
2004(4) 85.33%++ 138%
A Shares
2004(5) 4.00% 138%
B Shares
2004 1.81% 138%
2003(3) 1.39 160
LIFE VISION GROWTH AND INCOME FUND (A) (B)
T Shares
2004 0.36% 97%
2003 0.37 139
2002 0.39 166
2001 0.39 286
2000 0.42 189
A Shares
2004(6) 1.95% 97%
B Shares
2004 1.61% 97%
2003(3) 1.34 139
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
121
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL
VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS
BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND
OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS
--------- ------------- ---------------- ---------- ---------- ------------- -------------
LIFE VISION MODERATE GROWTH FUND (A) (B)
T Shares
2004 $ 9.02 $ 0.16(1) $ 1.04(1) $ 1.20 $(0.16) $ -- $(0.16)
2003 9.40 0.16 (0.38) (0.22) (0.16) -- (0.16)
2002 9.73 0.17 (0.32) (0.15) (0.18) -- (0.18)
2001 10.61 0.32 0.20 0.52 (0.34) (1.06) (1.40)
2000 10.80 0.33 0.13 0.46 (0.21) (0.44) (0.65)
A Shares
2004(2) $ 9.58 $ 0.10(1) $ 0.45(1) $ 0.55 $(0.08) $ -- $(0.08)
B Shares
2004 $ 9.00 $ 0.09(1) $ 1.04(1) $ 1.13 $(0.10) $ -- $(0.10)
2003(3) 8.05 0.03 0.95 0.98 (0.03) -- (0.03)
MID-CAP EQUITY FUND
T Shares
2004 $ 8.74 $ 0.06(1) $ 1.57(1) $ 1.63 $(0.05) $ -- $(0.05)
2003 9.79 (0.03)(1) (1.02)(1)++ (1.05)++ -- -- --
2002 10.95 0.01 (1.17) (1.16) -- -- --
2001 14.10 (0.03) (0.61) (0.64) -- (2.51) (2.51)
2000 12.68 (0.04) 2.32 2.28 -- (0.86) (0.86)
A Shares
2004 $ 8.42 $ 0.02(1) $ 1.51(1) $ 1.53 $(0.03) $ -- $(0.03)
2003 9.47 (0.05)(1) (1.00)(1) (1.05) -- -- --
2002 10.64 (0.03) (1.14) (1.17) -- -- --
2001 13.82 (0.05) (0.62) (0.67) -- (2.51) (2.51)
2000 12.50 (0.19) 2.37 2.18 -- (0.86) (0.86)
L Shares
2004 $ 7.92 $(0.04)(1) $ 1.43(1) $ 1.39 $(0.01) $ -- $(0.01)
2003 8.97 (0.10)(1) (0.95)(1) (1.05) -- -- --
2002 10.14 0.02 (1.19) (1.17) -- -- --
2001 13.35 (0.07) (0.63) (0.70) -- (2.51) (2.51)
2000 12.17 (0.22) 2.26 2.04 -- (0.86) (0.86)
MID-CAP VALUE EQUITY FUND
T Shares
2004 $ 8.62 $ 0.05(1) $ 2.33(1) $ 2.38 $(0.05) $ -- $(0.05)
2003 10.95 0.05 (2.16) (2.11) (0.04) (0.18) (0.22)
2002(4) 10.00 0.02 0.94 0.96 (0.01) -- (0.01)
A Shares
2004(5) $ 9.39 $ 0.02(1) $ 1.55(1) $ 1.57 $(0.02) $ -- $(0.02)
L Shares
2004 $ 8.58 $(0.01)(1) $ 2.33(1) $ 2.32 $ --* $ -- $ --*
2003 10.92 0.01 (2.16) (2.15) (0.01) (0.18) (0.19)
2002(4) 10.00 (0.01) 0.93 0.92 -- -- --
SMALL CAP GROWTH STOCK FUND
T Shares
2004 $15.19 $(0.16)(1) $ 5.22(1) $ 5.06 $ -- $ -- $ --
2003 17.28 (0.12)(1) (1.72)(1) (1.84) -- (0.25) (0.25)
2002 18.37 -- (1.02) (1.02) -- (0.07) (0.07)
2001 18.30 (0.18) 1.71 1.53 -- (1.46) (1.46)
2000 14.55 (0.08) 4.02 3.94 -- (0.19) (0.19)
A Shares
2004 $15.00 $(0.22)(1) $ 5.14(1) $ 4.92 $ -- $ -- $ --
2003 17.12 (0.17)(1) (1.70)(1) (1.87) -- (0.25) (0.25)
2002 18.26 (0.17) (0.90) (1.07) -- (0.07) (0.07)
2001 18.27 (0.59) 2.04 1.45 -- (1.46) (1.46)
2000(6) 16.46 (0.07) 1.88 1.81 -- -- --
L Shares
2004 $14.45 $(0.34)(1) $ 4.95(1) $ 4.61 $ -- $ -- $ --
2003 16.62 (0.26)(1) (1.66)(1) (1.92) -- (0.25) (0.25)
2002 17.85 (0.02) (1.14) (1.16) -- (0.07) (0.07)
2001 18.00 (0.25) 1.56 1.31 -- (1.46) (1.46)
2000 14.46 (0.04) 3.77 3.73 -- (0.19) (0.19)
<FN>
* Amount represents less than $0.005.
+ Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund
shares.
++ Includes redemption fees of $0.01.
(1) Per share data calculated using average shares outstanding method.
(2) A Shares were offered beginning on October 10, 2003. All ratios for the period have been annualized.
(3) B Shares were offered beginning on March 11, 2003. All ratios for the period have been annualized.
(4) Commenced operations on November 30, 2001. All ratios for the period have been annualized.
(5) A Shares were offered beginning on October 27, 2003. All ratios for the period have been annualized.
(6) A Shares were offered beginning on December 12, 1999. All ratios for the period have been annualized.
</FN>
122
- --------------------------------------------------------------------------------
RATIO OF
NET ASSET NET ASSETS, RATIO OF NET INVESTMENT
VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO
OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
---------- ------- ------------ ------------------ ------------------
LIFE VISION MODERATE GROWTH FUND (A) (B)
T Shares
2004 $10.06 13.35% $ 121,659 0.25% 1.65%
2003 9.02 (2.21) 93,722 0.25 1.87
2002 9.40 (1.52) 88,592 0.25 1.81
2001 9.73 5.28 73,429 0.25 3.04
2000 10.61 4.46 69,622 0.25 2.19
A Shares
2004(2) $10.05 5.79% $ 3,541 0.55% 1.49%
B Shares
2004 $10.03 12.66% $ 13,236 1.00% 0.91%
2003(3) 9.00 12.22 2,691 0.91 0.93
MID-CAP EQUITY FUND
T Shares
2004 $10.32 18.70% $ 177,128 1.23% 0.64%
2003 8.74 (10.73) 118,092 1.22 (0.31)
2002 9.79 (10.59) 171,813 1.22 (0.18)
2001 10.95 (6.92) 156,111 1.21 (0.24)
2000 14.10 19.10 206,545 1.17 --
A Shares
2004 $ 9.92 18.16% $ 17,125 1.68% 0.20%
2003 8.42 (11.09) 12,137 1.68 (0.68)
2002 9.47 (11.00) 10,766 1.68 (0.63)
2001 10.64 (7.34) 12,316 1.66 (0.69)
2000 13.82 18.55 14,513 1.62 (0.43)
L Shares
2004 $ 9.30 17.51% $ 15,998 2.28% (0.41)%
2003 7.92 (11.71) 12,013 2.28 (1.33)
2002 8.97 (11.54) 13,937 2.28 (1.23)
2001 10.14 (7.88) 12,910 2.26 (1.29)
2000 13.35 17.87 14,588 2.22 (1.05)
MID-CAP VALUE EQUITY FUND
T Shares
2004 $10.95 27.71% $ 147,185 1.26% 0.53%
2003 8.62 (19.05) 99,854 1.25 0.63
2002(4) 10.95 9.65 174,859 1.27 0.29
A Shares
2004(5) $10.94 16.73% $ 610 1.60% 0.24%
L Shares
2004 $10.90 27.06% $ 7,880 1.90% (0.11)%
2003 8.58 (19.58) 5,744 1.90 0.03
2002(4) 10.92 9.24 5,465 1.89 (0.31)
SMALL CAP GROWTH STOCK FUND
T Shares
2004 $20.25 33.31% $ 789,650 1.25% (0.83)%
2003 15.19 (10.50) 567,714 1.24 (0.87)
2002 17.28 (5.55) 593,211 1.25 (1.01)
2001 18.37 8.33 508,857 1.24 (0.95)
2000 18.30 27.24 431,478 1.20 (0.86)
A Shares
2004 $19.92 32.80% $ 40,590 1.61% (1.20)%
2003 15.00 (10.77) 21,887 1.61 (1.23)
2002 17.12 (5.86) 24,978 1.61 (1.37)
2001 18.26 7.89 28,933 1.60 (1.33)
2000(6) 18.27 11.00 39,865 1.55 (1.26)
L Shares
2004 $19.06 31.90% $ 40,354 2.31% (1.90)%
2003 14.45 (11.40) 25,601 2.31 (1.93)
2002 16.62 (6.50) 29,457 2.31 (2.07)
2001 17.85 7.19 26,941 2.29 (2.01)
2000 18.00 25.95 23,228 2.25 (1.92)
RATIO OF
EXPENSES TO
AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS TURNOVER
AND/OR REIMBURSEMENTS) RATE
---------------------- ---------
LIFE VISION MODERATE GROWTH FUND (A) (B)
T Shares
2004 0.36% 109%
2003 0.36 101
2002 0.36 202
2001 0.37 247
2000 0.37 151
A Shares
2004(2) 1.27% 109%
B Shares
2004 1.56% 109%
2003(3) 1.34 101
MID-CAP EQUITY FUND
T Shares
2004 1.26% 126%
2003 1.25 144
2002 1.24 87
2001 1.25 100
2000 1.25 131
A Shares
2004 1.87% 126%
2003 1.92 144
2002 1.89 87
2001 1.86 100
2000 1.81 131
L Shares
2004 2.54% 126%
2003 2.60 144
2002 2.50 87
2001 2.46 100
2000 2.44 131
MID-CAP VALUE EQUITY FUND
T Shares
2004 1.36% 95%
2003 1.35 71
2002(4) 1.37 30
A Shares
2004(5) 4.23% 95%
L Shares
2004 2.74% 95%
2003 2.85 71
2002(4) 2.72 30
SMALL CAP GROWTH STOCK FUND
T Shares
2004 1.25% 107%
2003 1.24 96
2002 1.25 100
2001 1.25 112
2000 1.23 110
A Shares
2004 1.88% 107%
2003 1.93 96
2002 1.88 100
2001 1.87 112
2000(6) 1.79 110
L Shares
2004 2.40% 107%
2003 2.46 96
2002 2.41 100
2001 2.39 112
2000 2.42 110
(A) The Life Vision Funds and its shareholders indirectly bear a pro rata share
of the expenses of the underlying STIClassic Funds. The expense ratios do
not include such expenses.
(B) Recognition of net investment income by the Life Vision Funds is affected by
the timing of the declaration of dividends by the STI Classic Funds in which
the Life Vision Funds invest.
Amounts designated as "--" are either $0 or have been rounded to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
123
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS FOR THE YEARS OR PERIODS ENDED MAY 31,
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS
NET ASSET NET REALIZED AND DIVIDENDS TOTAL
VALUE, NET UNREALIZED GAINS TOTAL FROM NET DISTRIBUTIONS DIVIDENDS
BEGINNING INVESTMENT (LOSSES) FROM INVESTMENT FROM REALIZED AND
OF PERIOD INCOME (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS
--------- ------------- ---------------- ---------- ---------- -------------- -------------
SMALL CAP VALUE EQUITY FUND
T Shares
2004 $13.73 $ 0.06(1) $ 4.53(1) $ 4.59 $(0.06) $ -- $(0.06)
2003 14.54 0.08 (0.82) (0.74) (0.07) -- (0.07)
2002 12.21 0.08 2.35 2.43 (0.10) -- (0.10)
2001 9.13 0.17 3.07 3.24 (0.16) -- (0.16)
2000 9.70 0.13 (0.59) (0.46) (0.11) -- (0.11)
A Shares
2004(2) $15.75 $ 0.03(1) $ 2.41(1) $ 2.44 $(0.01) $ -- $(0.01)
L Shares
2004 $13.55 $(0.10)(1) $ 4.46(1) $ 4.36 $ --* $ -- $ --*
2003 14.43 (0.04) (0.84) (0.88) -- -- --
2002 12.15 -- 2.29 2.29 (0.01) -- (0.01)
2001 9.10 0.07 3.04 3.11 (0.06) -- (0.06)
2000 9.65 -- (0.54) (0.54) (0.01) -- (0.01)
STRATEGIC QUANTITATIVE EQUITY FUND
T Shares
2004(3) $10.00 $(0.02)(1) $ 2.35(1) $ 2.33 $ -- $(0.25) $(0.25)
A Shares
2004(4) $11.35 $(0.05)(1) $ 1.00(1) $ 0.95 $ -- $(0.25) $(0.25)
L Shares
2004(5) $11.64 $(0.11)(1) $ 0.72(1) $ 0.61 $ -- $(0.25) $(0.25)
TAX SENSITIVE GROWTH STOCK FUND
T Shares
2004 $20.78 $(0.06)(1) $ 2.59(1) $ 2.53 $ -- $ -- $ --
2003 23.25 --(1) (2.47)(1) (2.47) -- -- --
2002 26.74 (0.02) (3.47) (3.49) -- -- --
2001 33.10 (0.03) (6.33) (6.36) -- -- --
2000 29.96 0.02 3.12 3.14 -- -- --
A Shares
2004(6) $22.32 $(0.10)(1) $ 1.04(1) $ 0.94 $ -- $ -- $ --
L Shares
2004 $19.85 $(0.29)(1) $ 2.48(1) $ 2.19 $ -- $ -- $ --
2003 22.45 (0.20)(1) (2.40)(1) (2.60) -- -- --
2002 26.10 (0.41) (3.24) (3.65) -- -- --
2001 32.65 (0.36) (6.19) (6.55) -- -- --
2000 29.85 (0.16) 2.96 2.80 -- -- --
VALUE INCOME STOCK FUND
T Shares
2004 $ 9.73 $ 0.15(1) $ 1.74(1) $ 1.89 $(0.15) $ -- $(0.15)
2003 11.05 0.15 (1.33) (1.18) (0.14) -- (0.14)
2002 11.61 0.12 (0.56) (0.44) (0.12) -- (0.12)
2001 10.38 0.19 1.24 1.43 (0.20) -- (0.20)
2000 12.85 0.23 (1.49) (1.26) (0.22) (0.99) (1.21)
A Shares
2004 $ 9.70 $ 0.11(1) $ 1.73(1) $ 1.84 $(0.11) $ -- $(0.11)
2003 11.01 0.12 (1.32) (1.20) (0.11) -- (0.11)
2002 11.58 0.08 (0.56) (0.48) (0.09) -- (0.09)
2001 10.35 0.14 1.25 1.39 (0.16) -- (0.16)
2000 12.81 0.19 (1.48) (1.29) (0.18) (0.99) (1.17)
L Shares
2004 $ 9.60 $ 0.03(1) $ 1.72(1) $ 1.75 $(0.04) $ -- $(0.04)
2003 10.90 0.05 (1.31) (1.26) (0.04) -- (0.04)
2002 11.46 -- (0.55) (0.55) (0.01) -- (0.01)
2001 10.24 0.04 1.26 1.30 (0.08) -- (0.08)
2000 12.68 0.08 (1.44) (1.36) (0.09) (0.99) (1.08)
<FN>
* Amount represents less than $0.005.
+ Returns are for the period indicated and have not been annualized. Total return figures do not include applicable sales loads.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund
shares.
++ Ratio reflects the impact of the initial low level of average net assets associated with commencement of operations.
(1) Per share data calculated using average shares outstanding method.
(2) A Shares were offered beginning on October 9, 2003. All ratios for the period have been annualized.
(3) T Shares were offered beginning on August 7, 2003. All ratios for the period have been annualized.
(4) A Shares were offered beginning on October 8, 2003. All ratios for the period have been annualized.
(5) L Shares were offered beginning on October 13, 2003. All ratios for the period have been annualized.
(6) A Shares were offered beginning on October 14, 2003. All ratios for the period have been annualized.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
124
- --------------------------------------------------------------------------------
RATIO OF
NET ASSET NET ASSETS, RATIO OF NET INVESTMENT
VALUE, END TOTAL END OF NET EXPENSES TO INCOME (LOSS) TO
OF PERIOD RETURN+ PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS
---------- ------- ------------ ------------------ ------------------
SMALL CAP VALUE EQUITY FUND
T Shares
2004 $18.26 33.56% $ 682,567 1.25% 0.38%
2003 13.73 (5.09) 518,468 1.24 0.64
2002 14.54 20.06 614,199 1.25 0.67
2001 12.21 35.90 401,900 1.25 1.72
2000 9.13 (4.72) 212,074 1.22 1.31
A Shares
2004(2) $18.18 15.51% $ 4,088 1.55% 0.30%
L Shares
2004 $17.91 32.20% $ 46,192 2.26% (0.64)%
2003 13.55 (6.10) 34,064 2.31 (0.40)
2002 14.43 18.92 32,708 2.31 (0.38)
2001 12.15 34.30 11,167 2.30 0.63
2000 9.10 (5.65) 8,596 2.27 0.21
STRATEGIC QUANTITATIVE EQUITY FUND
T Shares
2004(3) $12.08 23.43% $ 66,812 1.13% (0.22)%
A Shares
2004(4) $12.05 8.48% $ 155 1.55% (0.67)%
L Shares
2004(5) $12.00 5.34% $ 1,573 2.30% (1.42)%
TAX SENSITIVE GROWTH STOCK FUND
T Shares
2004 $23.31 12.18% $ 144,732 1.25% (0.28)%
2003 20.78 (10.62) 198,429 1.24 (0.01)
2002 23.25 (13.05) 244,707 1.24 (0.10)
2001 26.74 (19.21) 460,311 1.24 (0.10)
2000 33.10 10.48 710,179 1.20 0.13
A Shares
2004(6) $23.26 4.21% $ 365 1.65% (0.71)%
L Shares
2004 $22.04 11.03% $ 92,966 2.31% (1.34)%
2003 19.85 (11.58) 110,085 2.31 (1.07)
2002 22.45 (13.98) 167,973 2.31 (1.16)
2001 26.10 (20.06) 233,496 2.30 (1.15)
2000 32.65 9.38 290,595 2.25 (0.91)
VALUE INCOME STOCK FUND
T Shares
2004 $11.47 19.58% $ 715,928 0.90% 1.40%
2003 9.73 (10.54) 681,899 0.89 1.68
2002 11.05 (3.68) 686,014 0.90 1.13
2001 11.61 14.09 704,842 0.90 1.70
2000 10.38 (10.52) 921,797 0.89 2.02
A Shares
2004 $11.43 19.10% $ 73,257 1.28% 1.01%
2003 9.70 (10.85) 65,294 1.28 1.29
2002 11.01 (4.14) 75,697 1.28 0.74
2001 11.58 13.63 85,584 1.28 1.31
2000 10.35 (10.83) 104,178 1.28 1.64
L Shares
2004 $11.31 18.27% $ 57,403 2.02% 0.27%
2003 9.60 (11.56) 49,007 2.02 0.55
2002 10.90 (4.82) 59,392 2.02 --
2001 11.46 12.85 65,895 2.01 0.59
2000 10.24 (11.50) 84,563 2.02 0.91
RATIO OF
EXPENSES TO
AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS TURNOVER
AND/OR REIMBURSEMENTS) RATE
---------------------- ---------
SMALL CAP VALUE EQUITY FUND
T Shares
2004 1.25% 44%
2003 1.24 29
2002 1.25 29
2001 1.25 86
2000 1.25 65
A Shares
2004(2) 2.15% 44%
L Shares
2004 2.45% 44%
2003 2.50 29
2002 2.52 29
2001 2.66 86
2000 2.56 65
STRATEGIC QUANTITATIVE EQUITY FUND
T Shares
2004(3) 1.33% 344%
A Shares
2004(4) 10.70%++ 344%
L Shares
2004(5) 3.09% 344%
TAX SENSITIVE GROWTH STOCK FUND
T Shares
2004 1.25% 49%
2003 1.24 58
2002 1.24 69
2001 1.25 103
2000 1.26 30
A Shares
2004(6) 4.48%++ 49%
L Shares
2004 2.41% 49%
2003 2.40 58
2002 2.36 69
2001 2.34 103
2000 2.35 30
VALUE INCOME STOCK FUND
T Shares
2004 0.90% 67%
2003 0.89 46
2002 0.90 60
2001 0.90 77
2000 0.89 62
A Shares
2004 1.31% 67%
2003 1.32 46
2002 1.31 60
2001 1.31 77
2000 1.28 62
L Shares
2004 2.07% 67%
2003 2.10 46
2002 2.05 60
2001 2.05 77
2000 2.03 62
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
125
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
1. Organization:
The STI Classic Funds (the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated January 15, 1992. The
Trust is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company offering 45 funds as of May
31, 2004. The financial statements presented herein are those of the
Aggressive Growth Stock Fund, the Balanced Fund, the Capital Appreciation
Fund, the Emerging Growth Stock Fund, the Growth and Income Fund, the
Information and Technology Fund, the International Equity Fund, the
International Equity Index Fund, the Life Vision Aggressive Growth Fund,
the Life Vision Conservative Fund, the Life Vision Growth and Income Fund,
the Life Vision Moderate Growth Fund, the Mid-Cap Equity Fund, the Mid-Cap
Value Equity Fund, the Small Cap Growth Stock Fund, the Small Cap Value
Equity Fund, the Strategic Quantitative Equity Fund, the Tax Sensitive
Growth Stock Fund and the Value Income Stock Fund (each a "Fund" and
collectively the "Funds"). The Funds may offer the following share classes:
T Shares, A Shares, L Shares and B Shares. The financial statements of the
remaining funds are presented separately. The assets of each Fund are
segregated, and a shareholder's interest is limited to the Fund in which
shares are held. The Funds' prospectus provides a description of the Funds'
investment objectives, policies and strategies.
Effective April 30, 2004, the Small Cap Value Equity Fund was closed to new
investors.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by
the Trust:
USE OF ESTIMATES -- The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amount of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements, and
reported amounts of revenues and expenses during the reporting period.
Actual amounts could differ from these estimates.
SECURITY VALUATION -- Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available
(except for securities traded on NASDAQ) are valued at the last quoted sale
price on the primary exchange or market (foreign or domestic) on which they
are traded, or, if there is no such reported sale, at the most recent
quoted bid price. For securities traded on NASDAQ, the NASDAQ Official
Closing Price will be used. If available, debt securities are priced based
upon valuations provided by independent, third-party pricing agents. Such
values generally reflect the last reported sales price if the security is
actively traded. The third-party pricing agents may also value debt
securities at an evaluated bid price by employing methodologies that
utilize actual market transactions, broker-supplied valuations, or other
methodologies designed to identify the market value for such securities.
Debt obligations with remaining maturities of sixty days or less may be
valued at their amortized cost, which approximates market value. The prices
for foreign securities are reported in local currency and converted to U.S.
dollars using currency exchange rates. Prices for most securities held in
the Funds are provided daily by recognized independent pricing agents. If a
security price cannot be obtained from an independent, third-party pricing
agent, the Funds seek to obtain a bid price from at least one independent
broker.
Securities for which market prices are not "readily available" are valued
in accordance with Fair Value Procedures established by the Funds' Board of
Trustees. The Funds' Fair Value Procedures are implemented through a Fair
Value Committee (the "Committee") designated by the Funds' Board of
Trustees. Some of the more common reasons that may necessitate that a
security be valued using Fair Value Procedures include: the security's
trading has been halted or suspended; the security has been de-listed from
a national exchange; the security's primary trading market is temporarily
closed at a time when under normal conditions it would be open; or the
security's primary pricing source is not able or willing to provide a
price. When a security is valued in accordance with the Fair Value
Procedures, the Committee will determine the value after taking into
consideration relevant information reasonably available to the Committee.
For securities that principally trade on a foreign market or exchange, a
significant gap in time can exist between the time of a particular
security's last trade and the time at which a Fund calculates its net asset
value. The closing prices of such securities may no longer reflect their
market value at the time the Fund calculates net asset value if an event
that could materially affect the value of those securities (a "Significant
Event") has occurred between the time of the security's last close and the
time that the Fund calculates net asset value. A Significant Event may
relate to a single issuer or to an entire market sector. If the adviser or
sub-adviser of a Fund becomes aware of a Significant Event that has
occurred with respect to a security or group of securities after the
closing of the exchange or market on which the security or securities
principally trade, but before the time at which the Fund calculates net
asset value, it may request that a Fair Value Committee Meeting be called.
In addition, the Funds' administrator monitors price movements among
certain selected indices, securities and/or baskets of securities that may
be an indicator that
126
- --------------------------------------------------------------------------------
the closing prices received earlier from foreign exchanges or markets may
not reflect market value at the time the Fund calculates net asset value.
If price movements in a monitored index or security exceed levels
established by the administrator, the administrator notifies the adviser or
sub-adviser for any Fund holding the relevant securities that such limits
have been exceeded. In such event, the adviser or sub-adviser makes the
determination whether a fair value committee meeting should be called based
on the information provided.
The assets of the Life Vision Aggressive Growth Fund, the Life Vision
Conservative Fund, the Life Vision Growth and Income Fund and the Life
Vision Moderate Growth Fund consist of investments in underlying affiliated
investment companies, which are valued at their respective daily net asset
values.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date and interest income
is recognized on an accrual basis. Costs used in determining net realized
gains and losses on the sales of investment securities are those of the
specific securities sold adjusted for the accretion and amortization of
purchase discounts and premiums during the respective holding period.
Purchase discounts and premiums on securities held by the Funds are
accreted and amortized to maturity using the effective interest method.
REPURCHASE AGREEMENTS -- In connection with transactions involving
repurchase agreements, a third party custodian bank takes possession of the
underlying securities ("collateral"), the value of which exceeds the
principal amount of the repurchase transaction, including accrued interest.
In the event of default on the obligation to repurchase, each Fund has the
right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation. In the event of default or bankruptcy by the counterparty
to the agreement, realization and/or retention of the collateral or
proceeds may be subject to legal proceedings.
NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is
calculated each business day, by dividing the total value of each Fund's
assets, less liabilities, by the number of shares outstanding. The maximum
offering price per share for A Shares is equal to the net asset value per
share plus a sales load of 3.75%.
L Shares of the Funds may be purchased at their net asset value. Shares
redeemed within the first year after purchase will be subject to a
contingent deferred sales charge ("CDSC") equal to 2% for either the net
asset value of the shares at the time of purchase or the net asset value of
the shares next calculated after the Fund receives the sale request,
whichever is less. The CDSC will not apply to shares redeemed after such
time.
B Shares of the Funds may be purchased at their net asset value. A CDSC is
imposed on certain redemptions of the B Shares. The CDSC varies depending
on the number of years from the time of payment for the purchase of B
Shares until the redemption of such shares.
YEARS AFTER CONTINGENT DEFERRED
PURCHASE SALES CHARGE
----------- -------------------
0 to 1 Year 5%
1 to 2 Years 4%
2 to 3 Years 4%
3 to 4 Years 3%
4 to 5 Years 2%
5 Years + 0%
The Funds may charge a redemption fee up to 2% of redemption proceeds,
which will automatically be paid to the Fund. There were no redemption fees
for the year ended May 31, 2004.
FOREIGN CURRENCY TRANSLATION -- The books and records of the International
Equity and the International Equity Index Funds are maintained in U.S.
dollars on the following basis:
(i) market value of investment securities, assets and liabilities at
the current rate of exchange; and
(ii) purchases and sales of investment securities, income and expenses
at the relevant rates of exchange prevailing on the respective
dates of such transactions.
The International Equity and the International Equity Index Funds do not
isolate that portion of gains and losses on investments in equity
securities that is due to changes in the foreign exchange rates from that
which is due to changes in market prices of equity securities.
The International Equity and the International Equity Index Funds report
certain foreign currency related transactions as components of realized and
unrealized gains and losses for financial reporting purposes, whereas such
components are treated as ordinary income for Federal income tax purposes.
TBA PURCHASE COMMITMENTS -- The Balanced Fund may enter into "TBA" (To Be
Announced) purchase commitments to purchase securities for a fixed price at
a future date beyond customary settlement time. TBA purchase commitments
may be considered securities in themselves, and involve a risk of loss if
the value of the security to be purchased declines prior to settlement
date. Unsettled TBA purchase commitments are valued at the current market
value of the underlying securities, generally according to the procedures
described under "Security Valuation."
ILLIQUID SECURITIES -- Valuations of illiquid securities may differ
significantly from the values that would have been used had an active
market value for these securities existed.
127
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
RESTRICTED SECURITIES -- Certain of the Funds' investments are restricted
as to resale. The table below shows the number of shares held, the
acquisition date, cost, market value, value per share of such securities
and percentage of net assets which the securities comprise as of May 31,
2004:
MARKET
VALUE
NUMBER ACQUISITION AS OF VALUE % OF
OF SHARES DATE COST 05/31/04 PER SHARE NET ASSETS
--------- ----------- ---------- ---------- --------- ----------
SMALL CAP GROWTH STOCK FUND
InfoCrossing
Common
Stock $122,000 03/24/04 $1,281,000 $1,481,568 $12.14 0.2%
InfoCrossing
Warrants 139,109 10/20/03 6,086 742,842 5.34 0.1
Ultimate
Software
Group 180,000 05/12/04 1,980,000 2,127,960 11.82 0.2
EXPENSES -- Expenses that are directly related to a specific Fund are
charged to that Fund. Class specific expenses, such as distribution and
transfer agent fees, are borne by that class. Other operating expenses of
the Trust are pro-rated to the Funds on the basis of relative net assets.
Fund expenses are pro-rated to the respective classes on the basis of
relative net assets.
In addition to the investment advisory and management fees, custodian fees,
service fees, administration and transfer agent fees, each Fund is
responsible for paying most other operating expenses including organization
costs, fees and expenses of outside trustees, registration fees, printing
of shareholder reports, legal, auditing, insurance and other miscellaneous
expenses. In addition to the Funds' direct expenses as described above,
shareholders of the Life Vision Funds also bear a proportionate share of
the underlying Funds' expenses.
CLASSES -- Income, non-class specific expenses and realized/unrealized
gains and losses are allocated to the respective classes on the basis of
the relative daily net assets.
OFFERING COSTS -- Offering costs of the Aggressive Growth Stock Fund, the
Emerging Growth Stock Fund and the Strategic Quantitative Equity Fund,
which commenced operations on February 23, 2004, February 23, 2004 and
August 7, 2003, respectively, include costs of printing initial
prospectuses and registration fees are being amortized to expenses over
twelve months.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions
to shareholders, which are determined in accordance with Federal tax
regulations are recorded on the ex-dividend date. Dividends from net
investment income, if any, are declared and paid each calendar quarter by
the Equity Funds, except for the International Equity and the International
Equity Index Funds. These Funds distribute income annually. Any net
realized capital gains on sales of securities are distributed to
shareholders at least annually.
COMPENSATING BALANCES -- If a Fund has a cash overdraft in excess of
$100,000 it is required to leave 110% in compensating balance with SunTrust
Bank (the "Custodian"), a wholly owned subsidiary of SunTrust Banks, Inc.,
on the following day. If a Fund has a positive cash balance in excess of
$100,000 it is allowed to overdraw 90% of the balance with the Custodian on
the following business day.
3. Agreements and Other Transactions with Affiliates:
INVESTMENT ADVISORY AGREEMENT -- The Trust and Trusco Capital Management, Inc.
(the "Investment Adviser"), a wholly owned subsidiary of SunTrust Banks, Inc.,
have entered into advisory agreements dated May 29, 1992, June 15, 1993 and
December 20, 1993 and last amended November 12, 2003.
Under terms of the amended agreement, the Funds are charged the following annual
fees based upon average daily net assets:
MAXIMUM
ANNUAL NET FEES
ADVISORY FEE PAID
------------ --------
Aggressive Growth Stock Fund ........................ 1.25% 1.10%
Balanced Fund ....................................... 0.95 0.92
Capital Appreciation Fund ........................... 1.15 1.13
Emerging Growth Stock Fund .......................... 1.25 1.10
Growth and Income Fund .............................. 0.90 0.90
Information and Technology Fund ..................... 1.10 1.10
International Equity Fund ........................... 1.25 1.25
International Equity Index Fund ..................... 0.90 0.81
Life Vision Aggressive Growth Fund .................. 0.25 0.11
Life Vision Conservative Fund ....................... 0.25 0.10
Life Vision Growth and Income Fund .................. 0.25 0.14
Life Vision Moderate Growth Fund .................... 0.25 0.14
Mid-Cap Equity Fund ................................. 1.15 1.13
Mid-Cap Value Equity Fund ........................... 1.25 1.15
Small Cap Growth Stock Fund ......................... 1.15 1.15
Small Cap Value Equity Fund ......................... 1.15 1.15
Strategic Quantitative Equity Fund .................. 1.15 1.00
Tax Sensitive Growth Stock Fund ..................... 1.15 1.15
Value Income Stock Fund ............................. 0.80 0.80
The Investment Adviser has voluntarily agreed to waive all or a portion of its
fees (and to reimburse Fund expenses). Fee waivers and expense reimbursements
are voluntary and may be terminated at any time.
ADMINISTRATION AGREEMENT -- The Trust and SEI Investments Global Funds Services
(the "Administrator") are parties to an Administration Agreement dated May 29,
1995, last amended February 28, 2004, under which the Administrator provides
administrative services for an annual fee (expressed as a percentage of the
combined average daily net assets of the Trust and STI Classic Variable Trust)
of: 0.12% up to $1 billion, 0.09% on the next $4 billion, 0.07% on the next $3
billion, 0.065% on the next $2 billion and 0.06% for over $10 billion.
DISTRIBUTION AGREEMENT -- The Trust and SEI Investments Distribution Co. (the
"Distributor") are parties to a Distribution Agreement dated November 21, 1995.
The Distributor will receive no fees for its distribution services under the
plan for the T Shares of any Fund. With respect to the A Shares, L Shares and B
Shares, the Distributor receives amounts, pursuant to a Distribution Plan and
(in
128
- --------------------------------------------------------------------------------
the case of L Shares and B Shares) a Distribution and Service Plan, as outlined
in the table below:
MAXIMUM MAXIMUM
MAXIMUM L SHARES B SHARES
A SHARES DISTRIBUTION DISTRIBUTION
DISTRIBUTION NET FEES AND NET FEES AND NET FEES
FEE PAID SERVICE FEE PAID SERVICE FEE PAID
------------ -------- ------------ -------- ------------ --------
Aggressive Growth
Stock Fund ............ 0.35% 0.25% 1.00% 0.70% --% --%
Balanced Fund .......... 0.28 0.11 1.00 0.94 -- --
Capital Appreciation
Fund .................. 0.68 0.58 1.00 0.94 -- --
Emerging Growth
Stock Fund ............ 0.35 0.25 1.00 0.70 -- --
Growth and Income
Fund .................. 0.25 0.07 1.00 0.76 -- --
Information and
Technology Fund ....... 0.55 -- 1.00 0.39 -- --
International Equity
Fund .................. 0.33 0.11 1.00 0.68 -- --
International Equity
Index Fund ............ 0.38 0.35 1.00 0.69 -- --
Life Vision Aggressive
Growth Fund ........... 0.50 -- -- -- 1.00 0.19
Life Vision Conservative
Fund .................. 0.40 -- -- -- 1.00 0.29
Life Vision Growth
and Income Fund ....... 0.50 -- -- -- 1.00 0.50
Life Vision Moderate
Growth Fund ........... 0.50 -- -- -- 1.00 0.55
Mid-Cap Equity
Fund .................. 0.43 0.26 1.00 0.77 -- --
Mid-Cap Value
Equity Fund ........... 0.40 -- 1.00 0.26 -- --
Small Cap Growth
Stock Fund ............ 0.50 0.23 1.00 0.91 -- --
Small Cap Value
Equity Fund ........... 0.33 -- 1.00 0.81 -- --
Strategic Quantitative
Equity Fund ........... 0.25 -- 1.00 0.44 -- --
Tax Sensitive Growth
Stock Fund ............ 0.40 -- 1.00 0.91 -- --
Value Income Stock
Fund .................. 0.33 0.30 1.00 0.96 -- --
The Distributor has voluntarily agreed to waive all or a portion of their fees
(and to reimburse Fund expenses). Fee waivers and expense reimbursements are
voluntary and may be terminated at any time.
TRANSFER AGENCY AGREEMENTS -- The Trust and Federated Services Company are
parties to a Transfer Agency servicing agreement dated May 14, 1994, as amended
April 16, 2003, under which Federated Services Company provides transfer agency
services to the Trust.
The Trust and SunTrust Securities Inc. ("STS"), a wholly-owned subsidiary of
SunTrust Banks, Inc., are parties to an agreement under which STS provides
certain transfer agency account activity processing and servicing. The transfer
agency service fees are based upon a monthly per account charge for the total
shareholder accounts at the Trust's transfer agent. These fees are presented on
the Statements of Operations as Transfer Agent Shareholder Servicing Fees.
CUSTODIAN AGREEMENTS -- SunTrust Bank acts as custodian for all the Funds except
the International Equity and the International Equity Index Funds (the
"International Funds"), which utilize Brown Brothers Harriman & Co. as
custodian. Custodians are paid on the basis of the net assets and transaction
costs of the Funds. The custodians play no role in determining the investment
policies of the Trust or which securities are to be purchased or sold in the
Funds.
OTHER -- Certain officers of the Trust are also officers of the Adviser,
Administrator and/or the Distributor. Such officers are paid no fees by the
Trust for serving as officers of the Trust.
The Trust had entered into an agreement with the Distributor to act as an agent
in placing repurchase agreements for the Trust. As of October 24, 2003, this
agreement was discontinued.
For the year ended May 31, 2004, the following Funds paid the Distributor
through a reduction in the yield earned by the Funds on those repurchase
agreements:
FEES
--------
Balanced Fund ............................. $3,321
Capital Appreciation Fund ................. 5,709
Information and Technology Fund ........... 103
Mid-Cap EquityFund ........................ 1,137
Mid-Cap Value Equity Fund ................. 2,114
Small Cap Growth Stock Fund ............... 2,828
Small Cap Value Equity Fund ............... 3,967
Tax Sensitive Growth Stock Fund ........... 678
Value Income Stock Fund ................... 7,640
The Trust has entered into an agreement with SunTrust Robinson Humphrey, a
division of SunTrust Capital Markets, Inc. which is a direct non-bank subsidiary
of SunTrust Banks, Inc. to act as an agent in placing repurchase agreements for
the Trust. For the year ended May 31, 2004, the following Funds paid SunTrust
Robinson Humphrey, through a reduction in the yield earned by the Funds on those
repurchase agreements:
FEES
--------
Aggressive Growth Stock Fund .............. $ 176
Balanced Fund ............................. 2,047
Capital Appreciation Fund ................. 11,429
Emerging Growth Stock Fund ................ 103
Information and Technology Fund ........... 202
Mid-Cap Equity Fund ....................... 1,589
Small Cap Growth Stock Fund ............... 1,780
Small Cap Value Equity Fund ............... 6,417
Strategic Quantitative Equity Fund ........ 237
Tax Sensitive Growth Stock Fund ........... 1,034
Value Income Stock Fund ................... 10,827
4. Investment Transactions:
The cost of purchases and the proceeds from sales and maturities of securities,
excluding short-term investments and U.S. Government securities, for the year
ended May 31, 2004, were as follows:
PURCHASES SALES AND
(000) MATURITIES (000)
------------- ----------------
Aggressive Growth Stock Fund .......... $ 19,883 $ 216
Balanced Fund ......................... 257,945 227,763
Capital Appreciation Fund ............. 1,502,071 1,482,461
Emerging Growth Stock Fund ............ 13,644 896
Growth and Income Fund ................ 506,200 428,608
Information and Technology Fund ....... 67,789 73,992
International Equity Fund ............. 240,482 148,464
International Equity Index Fund ....... 53,402 32,537
Life Vision Aggressive Growth Fund .... 23,979 16,458
Life Vision Conservative Fund ......... 9,925 5,316
Life Vision Growth and Income Fund .... 94,192 76,951
Life Vision Moderate Growth Fund ...... 159,678 129,788
Mid-Cap Equity Fund ................... 272,790 232,643
Mid-Cap Value Equity Fund ............. 140,094 119,508
Small Cap Growth Stock Fund ........... 893,339 847,116
Small Cap Value Equity Fund ........... 295,164 280,306
Strategic Quantitative Equity Fund .... 224,707 163,245
Tax Sensitive Growth Stock Fund ....... 130,737 232,824
Value Income Stock Fund ............... 520,124 582,946
The cost of U.S. Government security purchases and the proceeds from the sale of
U.S. Government securities from the Balanced Fund during the year ended May 31,
2004 were $119,257 and $134,022, respectively.
129
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
5. Capital Share Transactions:
Capital Share Transactions for the Funds were as follows (000):
AGGRESSIVE GROWTH CAPITAL EMERGING GROWTH
STOCK FUND BALANCED FUND APPRECIATION FUND STOCK FUND
------------------- --------------------- ------------------- -------------------
02/23/04*- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 02/23/04*-
05/31/04 05/31/04 05/31/03 05/31/04 05/31/03 05/31/04
---------- --------------------- -------------------- ----------
T Shares:
Shares Issued ......................... 2,062 5,833 5,631 23,848 23,181 1,367
Shares Issued in Lieu of
Cash Distributions .................. -- 299 356 -- -- --
Shares Redeemed ....................... (12) (5,342) (6,654) (21,521) (22,631) (24)
------ ------ ------ ------- ------- ------
Net T Share Transactions .............. 2,050 790 (667) 2,327 550 1,343
------ ------ ------ ------- ------- ------
A Shares (1):
Shares Issued ......................... 5 176 94 1,390 2,305 4
Shares Issued in Lieu of
Cash Distributions .................. -- 9 12 -- -- --
Shares Redeemed ....................... -- (152) (151) (2,350) (2,724) --
------ ------ ------ ------- ------- ------
Net A Share Transactions .............. 5 33 (45) (960) (419) 4
------ ------ ------ ------- ------- ------
L Shares (1):
Shares Issued ......................... 7 1,596 1,446 2,046 2,333 5
Shares Issued in Lieu of
Cash Distributions .................. -- 31 52 -- -- --
Shares Redeemed ....................... -- (1,944) (1,982) (2,409) (2,752) (1)
------ ------ ------ ------- ------- ------
Net L Share Transactions .............. 7 (317) (484) (363) (419) 4
------ ------ ------ ------- ------- ------
B Shares (1):
Shares Issued ......................... -- -- -- -- -- --
Shares Issued in Lieu of
Cash Distributions .................. -- -- -- -- -- --
Shares Redeemed ....................... -- -- -- -- -- --
------ ------ ------ ------- ------- ------
Net B Share Transactions .............. -- -- -- -- -- --
------ ------ ------ ------- ------- ------
Net Change in Capital Shares .......... 2,062 506 (1,196) 1,004 (288) 1,351
====== ====== ====== ======= ======= ======
LIFE VISION LIFE VISION
CONSERVATIVE GROWTH AND LIFE VISION MID-CAP EQUITY
FUND INCOME FUND MODERATE GROWTH FUND FUND
-------------------- -------------------- -------------------- ---------------------
06/01/03- 06/01/02- 06/01/03- 06/01/02- 06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/03 05/31/04 05/31/03 05/31/04 05/31/03 05/31/04 05/31/03
--------- --------- --------- --------- --------- --------- --------- ---------
T Shares (2):
Shares Issued ............ 3 -- 2,228 2,189 4,736 4,043 8,504 15,332
Shares Issued in Lieu of
Cash Distributions ..... -- -- 95 106 179 189 37 --
Shares Redeemed .......... -- -- (1,716) (3,678) (3,218) (3,260) (4,889) (19,371)
---- --- ------ ------ ------ ------ ------ -------
Net T Share Transactions . 3 -- 607 (1,383) 1,697 972 3,652 (4,039)
---- --- ------ ------ ------ ------ ------ -------
A Shares (2):
Shares Issued ............ 45 -- 135 -- 440 -- 721 616
Shares Issued in Lieu of
Cash Distributions ..... -- -- -- -- 2 -- 4 --
Shares Redeemed .......... (1) -- (2) -- (90) -- (440) (312)
---- --- ------ ------ ------ ------ ------ -------
Net A Share Transactions . 44 -- 133 -- 352 -- 285 304
---- --- ------ ------ ------ ------ ------ -------
L Shares (2):
Shares Issued ............ -- -- -- -- -- -- 704 468
Shares Issued in Lieu of
Cash Distributions ..... -- -- -- -- -- -- 1 --
Shares Redeemed .......... -- -- -- -- -- -- (502) (505)
---- --- ------ ------ ------ ------ ------ -------
Net L Share Transactions . -- -- -- -- -- -- 203 (37)
---- --- ------ ------ ------ ------ ------ -------
B Shares (2):
Shares Issued ............ 438 80 1,049 216 1,135 306 -- --
Shares Issued in Lieu of
Cash Distributions ..... 4 -- 5 -- 9 -- -- --
Shares Redeemed .......... (58) (3) (54) -- (123) (7) -- --
---- --- ------ ------ ------ ------ ------ -------
Net B Share Transactions . 384 77 1,000 216 1,021 299 -- --
---- --- ------ ------ ------ ------ ------ -------
Net Change in Capital Shares 431 77 1,740 (1,167) 3,070 1,271 4,140 (3,772)
==== === ====== ====== ====== ====== ====== =======
<FN>
* Commencement of Operations.
(1) A Shares were offered beginning on October 27, 2003 and October 16, 2003 for the Information and Technology Fund and the Life
Vision Aggressive Growth Fund, respectively. L Shares were offered beginning on February 27, 2004 for the Emerging Growth Stock
Fund. B Shares were offered beginning on March 11, 2003 for the Life Vision Aggressive Growth Fund.
(2) T Shares were offered beginning on November 6, 2003 for the Life Vision Conservative Fund. A Shares were offered beginning on
November 11, 2003, November 5, 2003, October 10, 2003, October 27, 2003, October 9, 2003, October 8, 2003 and October 14, 2003
for the Life Vision Conservative Fund, the Life Vision Growth and Income Fund, The Life Vision Moderate Growth
</FN>
130
- --------------------------------------------------------------------------------
GROWTH AND INFORMATION AND INTERNATIONAL
INCOME FUND TECHNOLOGY FUND EQUITY FUND
---------------------- --------------------- --------------------
06/01/03- 06/01/02- 06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/03 05/31/04 05/31/03 05/31/04 05/31/03
--------- --------- --------- --------- --------- ---------
T Shares:
Shares Issued ......................... 13,896 8,406 812 691 14,743 10,800
Shares Issued in Lieu of
Cash Distributions .................. 190 201 -- -- 141 83
Shares Redeemed ....................... (9,941) (17,009) (1,460) (2,728) (6,032) (14,173)
------- ------- ------ ------ ------- -------
Net T Share Transactions .............. 4,145 (8,402) (648) (2,037) 8,852 (3,290)
------- ------- ------ ------ ------- -------
A Shares (1):
Shares Issued ......................... 814 1,049 3 -- 2,018 2,102
Shares Issued in Lieu of
Cash Distributions .................. 22 21 -- -- 7 3
Shares Redeemed ....................... (697) (766) (3) -- (2,130) (1,869)
------- ------- ------ ------ ------- -------
Net A Share Transactions .............. 139 304 -- -- (105) 236
------- ------- ------ ------ ------- -------
L Shares (1):
Shares Issued ......................... 2,178 1,416 188 156 213 890
Shares Issued in Lieu of
Cash Distributions .................. 11 11 -- -- 5 --
Shares Redeemed ....................... (1,603) (2,212) (268) (430) (173) (883)
------- ------- ------ ------ ------- -------
Net L Share Transactions .............. 586 (785) (80) (274) 45 7
------- ------- ------ ------ ------- -------
B Shares (1):
Shares Issued ......................... -- -- -- -- -- --
Shares Issued in Lieu of
Cash Distributions .................. -- -- -- -- -- --
Shares Redeemed ....................... -- -- -- -- -- --
------- ------- ------ ------ ------- -------
Net B Share Transactions .............. -- -- -- -- -- --
------- ------- ------ ------ ------- -------
Net Change in Capital Shares .......... 4,870 (8,883) (728) (2,311) 8,792 (3,047)
======= ======= ====== ====== ======= =======
INTERNATIONAL LIFE VISION
EQUITY INDEX AGGRESSIVE
FUND GROWTH FUND
--------------------- ----------------------
06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/03 05/31/04 05/31/03
--------- --------- --------- ---------
T Shares:
Shares Issued ......................... 8,041 7,835 894 625
Shares Issued in Lieu of
Cash Distributions .................. 290 108 14 11
Shares Redeemed ....................... (6,365) (7,797) (509) (877)
------ ------ ---- ----
Net T Share Transactions .............. 1,966 146 399 (241)
------ ------ ---- ----
A Shares (1):
Shares Issued ......................... 2,436 2,898 85 --
Shares Issued in Lieu of
Cash Distributions .................. 14 -- -- --
Shares Redeemed ....................... (2,267) (2,039) -- --
------ ------ ---- ----
Net A Share Transactions .............. 183 859 85 --
------ ------ ---- ----
L Shares (1):
Shares Issued ......................... 215 600 -- --
Shares Issued in Lieu of
Cash Distributions .................. 2 -- -- --
Shares Redeemed ....................... (112) (588) -- --
------ ------ ---- ----
Net L Share Transactions .............. 105 12 -- --
------ ------ ---- ----
B Shares (1):
Shares Issued ......................... -- -- 334 123
Shares Issued in Lieu of
Cash Distributions .................. -- -- 1 --
Shares Redeemed ....................... -- -- (29) --
------ ------ ---- ----
Net B Share Transactions .............. -- -- 306 123
------ ------ ---- ----
Net Change in Capital Shares .......... 2,254 1,017 790 (118)
====== ====== ==== ====
MID-CAP SMALL CAP GROWTH SMALL CAP VALUE
VALUE EQUITY FUND STOCK FUND EQUITY FUND
-------------------- -------------------- --------------------
06/01/03- 06/01/02- 06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/03 05/31/04 05/31/03 05/31/04 05/31/03
--------- --------- --------- --------- --------- ---------
T Shares (2):
Shares Issued ............ 5,128 5,129 11,405 10,120 12,101 9,369
Shares Issued in Lieu of
Cash Distributions ..... 23 162 -- 487 87 110
Shares Redeemed .......... (3,302) (9,676) (9,774) (7,574) (12,580) (13,947)
------ ------ ------- ------- ------- -------
Net T Share Transactions . 1,849 (4,385) 1,631 3,033 (392) (4,468)
------ ------ ------- ------- ------- -------
A Shares (2):
Shares Issued ............ 75 -- 960 541 290 --
Shares Issued in Lieu of
Cash Distributions ..... -- -- -- 22 -- --
Shares Redeemed .......... (19) -- (381) (563) (65) --
------ ------ ------- ------- ------- -------
Net A Share Transactions . 56 -- 579 -- 225 --
------ ------ ------- ------- ------- -------
L Shares (2):
Shares Issued ............ 364 400 812 494 759 1,087
Shares Issued in Lieu of
Cash Distributions ..... -- 12 -- 32 -- --
Shares Redeemed .......... (310) (243) (467) (527) (695) (839)
------ ------ ------- ------- ------- -------
Net L Share Transactions . 54 169 345 (1) 64 248
------ ------ ------- ------- ------- -------
B Shares (2):
Shares Issued ............ -- -- -- -- -- --
Shares Issued in Lieu of
Cash Distributions ..... -- -- -- -- -- --
Shares Redeemed .......... -- -- -- -- -- --
------ ------ ------- ------- ------- -------
Net B Share Transactions . -- -- -- -- -- --
------ ------ ------- ------- ------- -------
Net Change in Capital Shares 1,959 (4,216) 2,555 3,032 (103) (4,220)
====== ====== ======= ======= ======= =======
STRATEGIC QUANTITATIVE TAX SENSITIVE VALUE INCOME
EQUITY FUND GROWTH STOCK FUND STOCK FUND
---------------------- -------------------- --------------------
08/07/03*- 06/01/03- 06/01/02- 06/01/03- 06/01/02-
05/31/04 05/31/04 05/31/03 05/31/04 05/31/03
---------- --------- --------- --------- ---------
T Shares (2):
Shares Issued ............ 5,767 474 3,969 11,026 20,952
Shares Issued in Lieu of
Cash Distributions ..... 58 -- -- 717 785
Shares Redeemed .......... (296) (3,816) (4,945) (19,413) (13,723)
------ ------ ------ ------- -------
Net T Share Transactions . 5,529 (3,342) (976) (7,670) 8,014
------ ------ ------ ------- -------
A Shares (2):
Shares Issued ............ 13 29 -- 785 1,168
Shares Issued in Lieu of
Cash Distributions ..... -- -- -- 67 77
Shares Redeemed .......... -- (13) -- (1,175) (1,386)
------ ------ ------ ------- -------
Net A Share Transactions . 13 16 -- (323) (141)
------ ------ ------ ------- -------
L Shares (2):
Shares Issued ............ 138 235 417 1,157 909
Shares Issued in Lieu of
Cash Distributions ..... 2 -- -- 19 20
Shares Redeemed .......... (9) (1,562) (2,353) (1,205) (1,272)
------ ------ ------ ------- -------
Net L Share Transactions . 131 (1,327) (1,936) (29) (343)
------ ------ ------ ------- -------
B Shares (2):
Shares Issued ............ -- -- -- -- --
Shares Issued in Lieu of
Cash Distributions ..... -- -- -- -- --
Shares Redeemed .......... -- -- -- -- --
------ ------ ------ ------- -------
Net B Share Transactions . -- -- -- -- --
------ ------ ------ ------- -------
Net Change in Capital Shares 5,673 (4,653) (2,912) (8,022) 7,530
====== ====== ====== ======= =======
<FN>
Fund, the Mid-Cap Value Equity Fund, the Small Cap Value Equity Fund, the Strategic Quantitative
Equity Fund and the Tax Sensitive Growth Stock Fund, respectively. L Shares were offered beginning
on October 13, 2003 for the Strategic Quantitative Equity Fund. B Shares were offered beginning on
March 11, 2003 for the Life Vision Conservative Fund, the Life Vision Growth and Income Fund and
the Life Vision Moderate Growth Fund, respectively.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
131
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
6. Federal Tax Policies and Information:
It is each Fund's intention to continue to qualify as a regulated investment
company for Federal income tax purposes and distribute all of its taxable income
and net capital gains. Accordingly, no provisions for Federal income taxes are
required.
The Funds may be subject to taxes imposed by countries in which they invest with
respect to their investments in issuer existing or operating in such countries.
Such taxes are generally based on income earned. The Funds accrue such taxes
when the related income is earned.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with Federal tax regulations
which may differ from accounting principles generally accepted in the United
States of America. As a result, net investment income (loss) and net realized
gain (loss) on investment transactions for a reporting period may differ
significantly from distributions during such period. These book/tax differences
may be temporary or permanent. To the extent these differences are permanent in
nature, they are charged or credited to paid-in-capital, undistributed net
investment income (loss), or accumulated net realized gain (loss), as
appropriate, in the period that the differences arise. Accordingly, the
following permanent differences, primarily attributable to net operating losses,
the classification of short-term capital gains and ordinary income for tax
purposes, PFIC gains, foreign exchange gain, return of capital distribution and
paydowns on mortgage-backed securities have been reclassified to/from the
following accounts.
UNDISTRIBUTED
NET ACCUMULATED
INVESTMENT REALIZED PAID-IN-
INCOME (LOSS) GAIN (LOSS) CAPITAL
(000) (000) (000)
------------- ------------ --------
Aggressive Growth Stock Fund ....... $ 16 $ -- $ (16)
Balanced Fund ...................... 302 (302) --
Capital Appreciation Fund .......... 5,705 -- (5,705)
Emerging Growth Stock Fund ......... 18 -- (18)
Information and Technology Fund .... 233 -- (233)
International Equity Fund .......... 974 (974) --
International Equity Index Fund .... 480 (480) --
Life Vision Aggressive Growth Fund . 12 -- (12)
Small Cap Growth Stock Fund ........ 7,077 (6,215) (862)
Strategic Quantitative Equity Fund . 72 (72) --
Tax Sensitive Growth Stock Fund* ... 1,571 -- (1,571)
* Information reflects fund activity based on the Fund's October 31, 2003 tax
reporting year.
Amounts designated as "--" are either $0 or have been rounded to $0.
The tax character of dividends and distributions declared during the years ended
May 31, 2004 and May 31, 2003 was as follows (000):
ORDINARY LONG-TERM RETURN OF
INCOME CAPITAL GAINS CAPITAL TOTALS
2004 2003 2004 2003 2004 2003 2004 2003
------ ------ ------ ------ ------ ------ ------ -------
Balanced Fund ......... $4,343 $5,021 $-- $-- $-- $-- $4,343 $ 5,021
Growth and
Income Fund ........ 7,461 6,686 -- -- -- -- 7,461 6,686
International
Equity Fund ......... 3,509 1,452 -- -- -- -- 3,509 1,452
International Equity
Index Fund .......... 4,082 1,082 -- -- -- -- 4,082 1,082
Life Vision Aggressive
Growth Fund ......... 124 89 -- -- 12 3 136 92
Life Vision
Conservative Fund ... 50 -- -- -- -- -- 50 --
Life Vision Growth and
Income Fund ......... 1,035 931 -- -- -- -- 1,035 931
Life Vision Moderate
Growth Fund ......... 1,846 1,622 -- -- -- -- 1,846 1,622
Mid-Cap
Equity Fund ......... 922 -- -- -- -- -- 922 --
Mid-Cap Value
Equity Fund ......... 654 2,801 -- -- -- -- 654 2,801
Small Cap Growth
Stock Fund .......... -- -- -- 9,104 -- -- -- 9,104
Small Cap Value
Equity Fund ......... 2,438 2,605 -- -- -- -- 2,438 2,605
Strategic Quantitative
Equity Fund (1) ..... 994 -- -- -- -- -- 994 --
Value Income
Stock Fund .......... 10,722 10,325 -- -- -- -- 10,722 10,325
(1) Commenced operations on August 7, 2003.
Amounts designated as "--" are either $0 or have been rounded to $0.
132
- ------------------------------------------------------------------------------------------------------------------------------------
As of May 31, 2004, the components of Distributable Earnings (Accumulated Losses) on a tax basis were as follows (000):
UNDISTRIBUTED
UNDISTRIBUTED LONG-TERM POST UNREALIZED OTHER
ORDINARY CAPITAL CAPITAL LOSS OCTOBER APPRECIATION TEMPORARY
INCOME GAINS CARRYFORWARDS LOSS (DEPRECIATION) DIFFERENCES TOTAL
------------- ------------- ------------- ------- -------------- ----------- ---------
Aggressive Growth Stock Fund ........ $ -- $ -- $ (29) $ -- $ 379 $ (5) $ 345
Balanced Fund ....................... 894 2,650 -- -- 13,473 -- 17,017
Capital Appreciation Fund ........... -- 26,174 -- -- 137,423 -- 163,597
Emerging Growth Stock Fund .......... -- -- (178) -- (39) (6) (223)
Growth and Income Fund .............. 1,551 -- (29,765) -- 166,753 -- 138,539
Information and Technology Fund ..... -- -- (84,692) -- 1,900 -- (82,792)
International Equity Fund ........... 3,026 -- (85,094) (1,599) 43,106 -- (40,561)
International Equity Index Fund ..... 5,627 -- (55,813) (355) 18,942 -- (31,599)
Life Vision Aggressive Growth Fund .. -- -- (971) (5) 2,696 -- 1,720
Life Vision Conservative Fund ....... 32 1 -- -- 102 -- 135
Life Vision Growth and Income Fund .. 133 -- (3,887) -- 7,616 -- 3,862
Life Vision Moderate Growth Fund .... 341 -- (2,245) -- 9,396 -- 7,492
Mid-Cap Equity Fund ................. 78 -- (28,717) -- 22,506 -- (6,133)
Mid-Cap Value Equity Fund ........... 142 -- (17,070) -- 16,776 -- (152)
Small Cap Growth Stock Fund ......... 33,850 28,437 (1,996) -- 161,518 -- 221,809
Small Cap Value Equity Fund ......... 1,083 41,674 -- -- 172,416 -- 215,173
Strategic Quantitative Fund ......... 3,039 -- -- -- 2,972 (18) 5,993
Tax Sensitive Growth Stock Fund ..... -- -- (237,645) -- 54,435 (1,149) (184,359)
Value Income Stock Fund ............. 2,013 -- (191,692) -- 104,785 -- (84,894)
Amounts designated as "--" are either $0 or have been rounded to $0.
Post-October losses represent losses realized on investment and foreign currency transactions from November 1, 2003 through May 31,
2004 that, in accordance with Federal income tax regulations, the Fund may elect to defer and treat as having arisen in the
following fiscal year.
For tax purposes, the losses in the Funds can be carried forward for a maximum of eight years to offset any future net realized
capital gains.
The Funds had capital loss carryforwards at May 31, 2004 as follows (000):
EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING EXPIRING
2006 2007 2008 2009 2010 2011 2012 TOTAL
-------- -------- -------- -------- -------- -------- -------- --------
Aggressive Growth Stock Fund ............... $ -- $ -- $ -- $ -- $ -- $ -- $ 29 $ 29
Emerging Growth Stock Fund ................. -- -- -- -- -- -- 178 178
Growth and Income Fund ..................... -- -- -- -- -- 29,765 -- 29,765
Information and Technology Fund ............ -- -- -- -- 65,590 19,102 -- 84,692
International Equity Fund .................. 3,868 2,086 -- 3,394 27,543 31,153 17,050 85,094
International Equity Index Fund ............ -- -- -- 6,233 23,827 16,546 9,207 55,813
Life Vision Aggressive Growth Fund ......... -- -- -- -- 15 873 83 971
Life Vision Growth and Income Fund ......... -- -- -- -- 1,545 1,299 1,043 3,887
Life Vision Moderate Growth Fund ........... -- -- -- -- 586 554 1,105 2,245
Mid-Cap Equity Fund ........................ -- -- -- -- -- 28,717 -- 28,717
Mid-Cap Value Equity Fund .................. -- -- -- -- -- 17,070 -- 17,070
Small Cap Growth Stock Fund ................ -- 1,996 -- -- -- -- -- 1,996
Tax Sensitive Growth Stock Fund* ........... -- 142 40,227 153,993 52,653 9,527 -- 256,542
Value Income Stock Fund .................... -- -- -- 162,750 -- 28,942 -- 191,692
* Information reflects fund activity based on the Fund's October 31, 2003 tax reporting year.
Amounts designated as "--" are either $0 or have been rounded to $0.
133
NOTES TO FINANCIAL STATEMENTS (concluded)
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
During the year ended May 31, 2004, the Balanced Fund, Capital Appreciation
Fund, Growth and Income Fund, Information and Technology Fund, Mid-Cap Equity
Fund, Mid-Cap Value Equity Fund, Small Cap Growth Stock Fund, Small Cap Value
Equity Fund and the Value Income Stock Fund utilized (in 000s) $15,343,
$109,593, $27,030, $3,883, $22,262, $4,100, $49,367, $25,211 and $21,505 in
capital loss carryforwards, respectively.
Included in the Small Cap Growth Stock Fund is $1,996,446 of capital loss
carryforwards acquired in a previous merger. The annual utilization of this
capital loss carryover is limited pursuant to Internal Revenue Code Section 382.
At May 31, 2004, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes were different from
amounts reported for financial reporting purposes due to wash sales which cannot
be used for Federal income tax purposes in the current year and have been
deferred for use in future years. The aggregate gross unrealized appreciation
and depreciation for securities held by the Funds at May 31, 2004, were as
follows:
AGGREGATE AGGREGATE NET
GROSS GROSS UNREALIZED
FEDERAL UNREALIZED UNREALIZED APPRECIATION
TAX COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
(000) (000) (000) (000)
---------- ------------ -------------- --------------
Aggressive Growth Stock Fund ........ $ 20,316 $ 957 $ (578) $ 379
Balanced Fund ....................... 303,363 20,301 (6,828) 13,473
Capital Appreciation Fund ........... 1,361,148 174,235 (36,812) 137,423
Emerging Growth Stock Fund .......... 13,123 595 (634) (39)
Growth and Income Fund .............. 754,979 175,601 (8,848) 166,753
Information and Technology Fund ..... 15,476 2,361 (461) 1,900
International Equity Fund ........... 352,129 6,217 (49,270) 43,053
International Equity Index Fund ..... 416,684 30,544 (11,687) 18,857
Life Vision Aggressive Growth Fund .. 40,980 4,475 (1,779) 2,696
Life Vision Conservative Fund ....... 5,465 204 (102) 102
Life Vision Growth and Income Fund .. 81,942 9,154 (1,538) 7,616
Life Vision Moderate Growth Fund .... 129,072 13,756 (4,360) 9,396
Mid-Cap Equity Fund ................. 193,979 25,748 (3,242) 22,506
Mid-Cap Value Equity Fund ........... 171,207 18,583 (1,807) 16,776
Small Cap Growth Stock Fund ......... 1,039,287 196,444 (34,926) 161,518
Small Cap Value Equity Fund ......... 634,927 191,211 (18,795) 172,416
Strategic Quantitative Equity Fund .. 66,016 3,418 (446) 2,972
Tax Sensitive Growth Stock Fund ..... 184,749 57,095 (2,660) 54,435
Value Income Stock Fund ............. 755,008 114,570 (9,785) 104,785
7. Concentrations/Risks:
The Information and Technology Fund invests a substantial portion of its assets
in securities in the technology industry. Therefore, it may be more affected by
economic and political developments in that industry than a general equity fund
would be.
The International Equity and International Equity Index Funds invest in
securities of foreign issuers in various countries. These investments may
involve certain considerations and risks not typically associated with
investments in the United States as a result of, among other factors, the
possibility of future political and economic developments and the level of
governmental supervision and regulation of securities markets in the respective
countries.
In the normal course of business, the Funds enter into contracts that provide
general indemnifications. The Funds' maximum exposure under these arrangements
is dependent on future claims that may be made against the Funds and, therefore,
cannot be estimated; however, based on experience, the risk of loss from such
claims is considered remote.
8. Securities Lending
Each Fund may lend portfolio securities to brokers, dealers and other financial
organizations that meet capital and other credit requirements or other criteria
established by the Trust's Board of Trustees. These loans may not exceed 331/3%
of the total asset value of the Fund (including the loan collateral). No Fund
will lend portfolio securities to its investment adviser, or its affiliates
unless it has applied for and received specific authority to do so from the
Securities and Exchange Commission. Loans of portfolio securities will be fully
collateralized by cash. The value of the collateral is at least equal to the
market value of the securities loaned. However, due to market fluctuations
during the day, the value of securities loaned on a particular day may, during
the course of the day, exceed the value of collateral. On each business day, the
amount of collateral is adjusted based on the prior day's market fluctuations
and the current day's lending activity. Income from lending activity is
determined by the amount of interest earned on collateral, less any amounts
payable to the borrowers of the securities and the lending agent. Lending
securities involves certain risks, including the risk that the Fund may be
delayed or prevented from recovering the collateral if the borrower fails to
return the securities.
Cash collateral received in connection with securities lending is invested in
the Boston Global Investment Trust-Enhanced Portfolio. This investment consists
of money market instruments including money market mutual funds registered under
the Investment Company Act of 1940, commercial paper, repurchase agreements,
U.S. Treasury Bills and U.S. agency obligations.
9. Subsequent Event
Effective July 26, 2004, under separate administration, distribution and
transfer agency agreements dated July 24, 2004, July 24, 2004 and July 23, 2004,
respectively, BISYS Fund Services began providing administration, distribution
and transfer agency services for the Funds.
134
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004
To the Board of Trustees and Shareholders of
STI Classic Funds:
In our opinion, the accompanying statements of net assets of Aggressive Growth
Stock Fund, Balanced Fund, Capital Appreciation Fund, Emerging Growth Stock
Fund, Growth and Income Fund, Information and Technology Fund, International
Equity Fund, International Equity Index Fund, Life Vision Aggressive Growth
Fund, Life Vision Conservative Fund, Life Vision Growth and Income Fund, Life
Vision Moderate Growth Fund, Mid-Cap Equity Fund, Mid-Cap Value Equity Fund,
Small Cap Growth Stock Fund, Small Cap Value Equity Fund, Tax Sensitive Growth
Stock Fund and Value Income Stock Fund, and the statement of assets and
liabilities, including the schedule of investments, of Strategic Quantitative
Equity Fund (nineteen of the forty-five funds constituting STI Classic Funds,
hereafter referred to as the "Funds") and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Funds at May 31, 2004, the
results of each of their operations for the year (or period) then ended, the
changes in each of their net assets for each of the two years (or periods) then
ended and the financial highlights for each of the three years (or periods) then
ended, for the Life Vision Conservative Fund its financial highlights for each
of the two years (or periods) then ended, and for Aggressive Growth Stock Fund,
Emerging Growth Stock Fund and Strategic Quantitative Equity Fund the changes in
each of their net assets and the financial highlights for the period then ended,
in conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with the standards of the Public Company Accounting
Oversight Board (United States), which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at May 31,
2004 for International Equity Fund and International Equity Index Fund by
correspondence with the custodian and brokers, and physical inspection of
securities at May 31, 2004 for all other funds, provide a reasonable basis for
our opinion. The financial highlights for each of the two years (or periods)
ended May 31, 2001 were audited by other independent accountants who have ceased
operations. Those independent accountants expressed an unqualified opinion on
those financial statements in their report dated July 18, 2001.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
July 26, 2004
135
TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
Information pertaining to the trustees and officers of the Trust is set forth below. Trustees who are not deemed to be "interested
persons" of the Trust as defined in the 1940 Act are referred to as "Independent Board Members." Trustees who are deemed to be
"interested persons" of the Trust are referred to as "Interested Board Members." Messrs. Courts and Ridley are Trustees who may be
deemed to be "interested" persons of the Trust.
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS
AND PRINCIPAL IN STI CLASSIC
NAME POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX OTHER DIRECTORSHIPS
ADDRESS, HELD WITH TIME DURING PAST OVERSEEN BY HELD BY
AND AGE(1) THE TRUST SERVED(2) 5 YEARS BOARD MEMBER(3) BOARD MEMBER(4)
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED
BOARD MEMBERS(5)
- ----------------
Richard W. Courts, II, Trustee Since Chairman of the Board, Atlantic 52 Current Trustee of STI
68 November, Investment Company, 1970 to the Classic Variable Trust.
2001 present.
- ------------------------------------------------------------------------------------------------------------------------------------
Clarence H. Ridley, 62 Trustee Since Chairman of the Board; Haverty 52 Current Trustee of STI
November, Furniture Companies, 2001 to the Classic Variable Trust.
2001 present; Partner, King and Spaulding
LLP (law firm), 1971 to 2000.
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT
BOARD MEMBERS
- --------------
Thomas Gallagher, 56 Trustee Since President, Genuine Parts Company 52 Director, National Service
May, 2000 Wholesale Distribution, 1970 to the Industries; Director, Oxford
present. Industries. Current Trustee
of STI Classic Variable Trust.
- ------------------------------------------------------------------------------------------------------------------------------------
F. Wendell Gooch, 71 Trustee Since Retired. 52 Current Trustee on the Board
May, 1992 Board of Trustees for the
SEI Family of Funds, The
Capitol Mutual Funds and
STI Classic Variable Trust.
- ------------------------------------------------------------------------------------------------------------------------------------
James O. Robbins, 62 Trustee Since President and Chief Executive 52 Director, NCR; Director,
May, 2000 Officer, Cox Communications, Inc., Cox Communications,
1983 to the present. Current Trustee of STI
Classic Variable Trust.
- ------------------------------------------------------------------------------------------------------------------------------------
Jonathan T. Walton, 74 Trustee Since Retired. 52 Trustee, W.K. Kellogg Trust.
February, Current Trustee of STI
1998 Classic Variable Trust.
- ------------------------------------------------------------------------------------------------------------------------------------
136
- ------------------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS
AND PRINCIPAL IN STI CLASSIC
NAME POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX OTHER DIRECTORSHIPS
ADDRESS, HELD WITH TIME DURING PAST OVERSEEN BY HELD BY
AND AGE(1) THE TRUST SERVED 5 YEARS BOARD MEMBER BOARD MEMBER
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
- --------
James F. Volk, President Since SEI Investments since 1996; N/A N/A
41 November, Senior Operations Officer Fund
2000 Accounting and Administration,
1996-2004, Chief Accounting
Officer, present; Assistant Chief
Accountant, U.S. Securities and
Exchange Commission, 1993-
1996; Audit Manager, Coopers &
Lybrand LLP, 1985-1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Timothy D. Barto, Vice Since SEI Investments since 1999; N/A N/A
36 President November, General Counsel, Vice President
and 2001 and Secretary of the Administrator
Secretary and Adviser, present; Associate,
Dechert, Price & Rhodes,
1997-1999.
- ------------------------------------------------------------------------------------------------------------------------------------
Lydia A. Gavalis, Vice Since SEI Investments since 1998; Vice N/A N/A
40 President May, 1998 President and Assistant Secretary
and of the Administrator and Adviser,
Assistant present; Assistant General Counsel
Secretary and Director of Arbitration,
Philadelphia Stock Exchange,
1989-1998.
- ------------------------------------------------------------------------------------------------------------------------------------
Christine M. Vice Since SEI Investments since 1999; Vice N/A N/A
McCullough, President May, 2000 President and Assistant Secretary
43 and of the Adviser, present; Associate,
Assistant White and Williams LLP,
Secretary 1991-1999.
- ------------------------------------------------------------------------------------------------------------------------------------
William E. Vice Since SEI Investments since 2000; N/A N/A
Zitelli Jr., President November, Assistant Secretary of the
35 and 2000 Administrator and Adviser,
Assistant present; Vice President, Merrill
Secretary Lynch & Co. Asset Management
Group, 1998-2000; Associate,
Pepper Hamilton LLP, 1997-1998.
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
1 Each trustee and officer may be contacted by writing to c/o STI Classic Funds, SEI Investments Company, Oaks, PA 19456.
2 Each trustee shall hold office during the lifetime of this Trust until the election and qualification of his or her successor, or
until he or she sooner dies, resigns or is removed in accordance with the Trust's Declaration of Trust.
3 The "STI Classic Complex" consists of all registered investment companies for which Trusco Capital Management, Inc. serves as
investment adviser. As of May 31, 2004, the STI Classic Complex consisted of 52 Funds.
4 Directorships of companies required to report to the U.S. Securities and Exchange Commission under the Securities Exchange Act of
1934 (i.e., "public companies") or other investment companies registered under the 1940 Act.
5 Mr. Courts is deemed an interested trustee because of his directorships with affiliates of the Adviser. Mr. Ridley is deemed an
interested trustee because of his material business relationships with the parent to the Adviser.
</FN>
137
TRUSTEES AND OFFICERS OF THE STI CLASSIC FUNDS (concluded)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF NUMBER OF
OFFICE PORTFOLIOS
AND PRINCIPAL IN STI CLASSIC
NAME POSITION(S) LENGTH OF OCCUPATION(S) COMPLEX OTHER DIRECTORSHIPS
ADDRESS, HELD WITH TIME DURING PAST OVERSEEN BY HELD BY
AND AGE(1) THE TRUST SERVED 5 YEARS BOARD MEMBER BOARD MEMBER
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS (CONTINUED)
- --------
Douglas Phillips, Vice Since President, Chief Executive Officer N/A N/A
56 President August, and Chief Investment Officer
and 2003 of Trusco Capital Management,
Assistant Inc. since its inception in
Secretary November 1984.
- ------------------------------------------------------------------------------------------------------------------------------------
Deborah A. Lamb, Vice Since Chief Compliance Officer and N/A N/A
51 President November, Vice President of Trusco Capital
and 2003 Management, Inc. since March
Assistant 2003 and President of Investment
Secretary Industry Consultants, LLC since
June 2000. Director of Compliance
at INVESCO, Inc. from March 1995 to
June 2000.
- ------------------------------------------------------------------------------------------------------------------------------------
Kathleen Lentz, Vice Since Vice President and Manager of N/A N/A
43 President November, Special Entities in Financial
and 2003 Intelligence Unit of SunTrust
Assistant Bank since 2002. Vice President
Secretary of the Third Party Mutual Funds
Unit of SunTrust Bank, 1996-2002.
- ------------------------------------------------------------------------------------------------------------------------------------
John Munera, Vice Since Middle Office Compliance Officer N/A N/A
41 President November, at SEI Investments since 2000.
and 2003 Supervising Examiner at Federal
Assistant Reserve Bank of Philadelphia
Secretary 1998-2000.
- ------------------------------------------------------------------------------------------------------------------------------------
Jennifer E. Spratley, Treasurer Since Funds Accounting Director, SEI N/A N/A
35 and May, 2000 Investments, 1999-present; Audit
CFO Manager, Ernst & Young LLP,
1991-1999.
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
1 Each officer may be contacted by writing to c/o STI Classic Funds, SEI Investments Company, Oaks, PA 19456.
</FN>
138
NOTICE TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
STI CLASSIC EQUITY FUNDS MAY 31, 2004 (UNAUDITED)
For the shareholder that do not have a May 31, 2004 tax year end, this notice is for informational purposes only. For
shareholders with a May 31, 2004 tax year end, please consult your tax advisor as to the pertinence of this notice. For
the fiscal year ended May 31, 2004, each Fund is designating the following items with regard to distributions paid
during the year:
DIVIDENDS
LONG TERM QUALIFYING
(20% RATE) RETURN ORDINARY FOR CORPORATE
CAPITAL GAIN OF CAPITAL INCOME TOTAL DIVIDENDS REC.
FUND DISTRIBUTION DISTRIBUTION DISTRIBUTIONS DISTRIBUTIONS DEDUCTIONS (1)
- ---- ------------ ------------ ------------- ------------- --------------
Aggressive Growth Stock Fund ............ 0.00% 0.00% 00.00% 00.00% 00.00%
Balanced Fund ........................... 0.00% 0.00% 100.00% 100.00% 30.75%
Capital Appreciation Fund ............... 0.00% 0.00% 00.00% 00.00% 00.00%
Emerging Growth Stock Fund .............. 0.00% 0.00% 00.00% 00.00% 00.00%
Growth and Income Fund .................. 0.00% 0.00% 100.00% 100.00% 100.00%
Information and Technology Fund ......... 0.00% 0.00% 00.00% 00.00% 00.00%
International Equity Fund ............... 0.00% 0.00% 100.00% 100.00% 00.00%
International Equity Index Fund ......... 0.00% 0.00% 100.00% 100.00% 00.00%
Life Vision Aggressive Growth Fund ...... 0.00% 8.63% 91.37% 100.00% 00.00%
Life Vision Conservative Fund ........... 0.00% 0.00% 100.00% 100.00% 00.00%
Life Vision Growth and Income Fund ...... 0.00% 0.00% 100.00% 100.00% 00.00%
Life Vision Moderate Growth Fund ........ 0.00% 0.00% 100.00% 100.00% 00.00%
Mid-Cap Equity Fund ..................... 0.00% 0.00% 100.00% 100.00% 100.00%
Mid-Cap Value Equity Fund ............... 0.00% 0.00% 100.00% 100.00% 100.00%
Small Cap Growth Stock Fund ............. 0.00% 0.00% 00.00% 00.00% 00.00%
Small Cap Value Equity Fund ............. 0.00% 0.00% 100.00% 100.00% 99.98%
Strategic Quantitative Fund ............. 0.00% 0.00% 100.00% 100.00% 5.74%
Tax Sensitive Growth Stock Fund (4) ..... 0.00% 0.00% 0.00% 0.00% 0.00%
Value Income Stock Fund ................. 0.00% 0.00% 100.00% 100.00% 100.00%
<FN>
- ---------------------
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and is
reflected as a percentage of "Ordinary Income Distributions."
(2) The percentage in this column represents the amount of "Qualifying Dividend Income" as created by the Jobs and
Growth Tax Relief Reconciliation Act of 2003 and is reflected as a percentage of "Ordinary Income Distributions." It
is the intention of each of the aforementioned Funds to designate the maximum amount permitted by the law.
(3) Foreign tax credit pass through represents the amount eligible for the foreign tax credit and is reflected as a
percentage of "Ordinary Income Distributions."
(4) Information reflects fund activity based on the Fund's October 31, 2003 tax reporting year.
- -----------------------------------------------------------------------------------------------------------------------
</FN>
QUALIFYING
DIVIDEND FOREIGN
INCOME TAX
(15% TAX RATE WITHHOLDING
FUND FOR QDI) (2) PASS THROUGH (3)
- ---- ------------- ----------------
Aggressive Growth Stock Fund ............ 00.00% 0.00%
Balanced Fund ........................... 35.86% 0.00%
Capital Appreciation Fund ............... 00.00% 0.00%
Emerging Growth Stock Fund .............. 00.00% 0.00%
Growth and Income Fund .................. 100.00% 0.00%
Information and Technology Fund ......... 00.00% 0.00%
International Equity Fund ............... 100.00% 18.32%
International Equity Index Fund ......... 61.66% 18.41%
Life Vision Aggressive Growth Fund ...... 100.00% 0.00%
Life Vision Conservative Fund ........... 4.49% 0.00%
Life Vision Growth and Income Fund ...... 34.30% 0.00%
Life Vision Moderate Growth Fund ........ 15.51% 0.00%
Mid-Cap Equity Fund ..................... 100.00% 0.00%
Mid-Cap Value Equity Fund ............... 100.00% 0.00%
Small Cap Growth Stock Fund ............. 00.00% 0.00%
Small Cap Value Equity Fund ............. 100.00% 0.00%
Strategic Quantitative Fund ............. 5.22% 0.00%
Tax Sensitive Growth Stock Fund (4) ..... 0.00% 0.00%
Value Income Stock Fund ................. 100.00% 0.00%
139
NOTES
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Trusco Capital Management, Inc.
STI Classic Funds are not deposits, are not insured or guaranteed
by the FDIC or any other government agency, and are not endorsed
by and do not constitute obligations of SunTrust Banks, Inc. or
any other of its affiliates. Investment in the Funds involves
risk, including the possible loss of principal. There is no
guarantee that any STI Classic Fund will achieve its investment
objective. The STI Classic Funds are advised by an affiliate of
SunTrust Banks, Inc.
DISTRIBUTOR
SEI Investments Distribution Co.
This information must be preceded or accompanied by
a current prospectus for each Fund described.
Information regarding the Adviser, and thus the Funds' Proxy Voting Policies and
Procedures are provided in the Statement of Additional Information. A copy of
the Proxy Voting Policies and Procedures may be obtained by contacting the STI
Classic Funds at 1-800-874-4770, option 5, or by visiting STIClassicFunds.com.
Beginning no later than August 31, 2004, information (if any) regarding how the
Funds voted proxies relating to portfolio securities during the most recent
12-month period ended June 30 is available without charge (i) by calling
1-800-874-4770.
[STI Classic LOGO OMITTED]
BACKED BY TRADITION. STRENGTHENED BY EXPERIENCE.SM
STI-AR-001-004
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer, officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or a
third party.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that the Board's Audit
Committee does not have an "audit committee financial expert," as the Securities
and Exchange Commission has defined that term. After carefully considering all
of the factors involved in the definition of "audit committee financial expert,"
the Board determined that none of the members of the audit committee met all
five qualifications in the definition, although some members of the Audit
Committees met some of the qualifications. The Board also determined that the
Audit Committee members collectively have many years of experience in business
and finance, including working with mutual fund financial statements and
auditors, and that in light of the nature of the accounting and valuation issues
the registrant's portfolios have presented over the past several years, it did
not appear that the Audit Committee members lacked any necessary skill to serve
on the Audit Committee.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees billed by PricewaterhouseCoopers LLP ("PWC") related to the Trust
PWC billed the Trust aggregate fees for services rendered to the Trust for the
last two fiscal years as follows:
- --------------------------------------------------------------------------------------------------------------------------------
2004 2003
- --------------------------------------------------------------------------------------------------------------------------------
All fees and All fees and All other fees All fees and All fees and All other fees
services to the services to and services to services to the services to and services to
Trust that were service service Trust that were service service
pre-approved affiliates that affiliates that pre-approved affiliates that affiliates that
were did not require were did not require
pre-approved pre-approval pre-approved pre-approval
- --------------------------------------------------------------------------------------------------------------------------------
(a) Audit $ 563,000 N/A $ 0 $ 448,509 N/A $ 0
Fees(1)
- --------------------------------------------------------------------------------------------------------------------------------
(b) Audit- $ 72,000 (2) $ 60,000 (3) $ 1,795,277 (4) $ 61,500 (2) $ 0 $ 1,498,453 (4)
Related
Fees
- --------------------------------------------------------------------------------------------------------------------------------
(c) Tax Fees $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
- --------------------------------------------------------------------------------------------------------------------------------
(d) All $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Other
Fees
- --------------------------------------------------------------------------------------------------------------------------------
Notes:
(1) Audit fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
accountant in connection with statutory and regulatory filings.
(2) Services related to security count examinations under Rule 17f-2 of
the Investment Company Act for 2004 and 2003 fiscal years.
(3) Services related to the audit of the controls around custody operations
at SunTrust Bank (SAS No. 70) in 2003.
(4) Non-audit services relate principally to certain technical accounting
advice on financial products of the Bank; Sarbanes-Oxley 404
implementation; and, tax compliance services to other entities
controlled by SunTrust Banks, Inc.
(e)(1) The registrant has adopted an Audit and Non-Audit Services Pre-Approval
Policy, as follows:
I. Statement of Principles
As set forth in the chart below, the Sarbanes-Oxley Act of 2002 (the "Act"), and
rules adopted by the Securities and Exchange Commission ("SEC") require that the
Audit Committee of the Board of Trustees pre-approve all audit services and
non-audit services provided to the STI Classic Funds and the STI Classic
Variable Trust (the "Trusts") and their respective portfolios (the "Funds") by
its independent accountant ("Auditor"),1 as well as non-audit services provided
by the Auditor to the Funds' investment adviser and to affiliates of the adviser
that provide ongoing services to the Funds ("Service Affiliates") if the
services directly impact the Funds' operations and financial reporting.
WHERE PRE-APPROVAL IS REQUIRED
- --------------------------------------------------------------------------------------------------------
AUDIT SERVICE NON-AUDIT SERVICE
- --------------------------------------------------------------------------------------------------------
Fund Yes Yes
- --------------------------------------------------------------------------------------------------------
Adviser No Yes, if directly related to
Fund operation and financial reporting
- --------------------------------------------------------------------------------------------------------
Service Affiliate 2 No Yes, if directly related to
Fund operation and financial reporting
- --------------------------------------------------------------------------------------------------------
The following policies and procedures govern the ways in which the Audit
Committee will pre-approve audit and various types of non-audit services that
the Auditor provides to the Trusts and to Service Affiliates. These policies and
procedures do not apply in the case of audit services that the Auditor provides
to Service Affiliates, nor do they apply to services that an audit firm other
than the Auditor provides to such entities.
- --------------------------------------------------------------------------------
1 The Audit Committee also is permitted to ratify the provision of
inadvertent non-audit services, BUT ONLY IF:
o the value of all such services do not exceed 5% of total revenues
paid by the Fund, the Adviser and Service Affiliates
to the Auditor in the fiscal year when services are provided; 1
o the services were not recognized as non-audit services at the
time they were provided; and
o the services are promptly brought to the attention of the Audit
Committee and approved prior to the completion of the
audit.
2 A list of Service Affiliates is set out in Exhibit I, attached hereto.
These policies and procedures comply with the requirements for pre-approval, but
also provide a mechanism by which management of the Trusts may request and
secure pre-approval of audit and non-audit services in an orderly manner with
minimal disruption to normal business operations. Pre-approval of non-audit
services may be achieved through a combination of the procedures described in
Sections II and VI below.
II. Delegation
As contemplated by the Act and applicable SEC rules, the Audit Committee hereby
delegates to the Chairperson of the Audit Committee the authority to approve the
engagement of the independent auditor to provide non-audit services as permitted
by the Act, to the extent that such non-audit services are not pre-approved by
the entire Audit Committee as set forth herein. The Chairman shall report, for
informational purposes only, any pre-approval decisions to the Audit Committee
at its next scheduled meeting.
III. Audit Services
The annual Audit services engagement scope and terms will be subject to the
specific pre-approval of the Audit Committee. Audit services include the annual
financial statement audit (including required rating agency reviews) and other
procedures required to be performed by the independent auditor to be able to
form an opinion on the Trusts' financial statements. The Audit Committee will
monitor the Audit services engagement throughout the year and will also approve,
if necessary, any changes in terms and conditions resulting from changes in
audit scope, Fund structure or other items. The Audit Committee will pre-approve
all Audit services for the Trusts.
IV. Audit-related Services
Audit-related services are assurance and related services that are reasonably
related to the performance of the audit or review of the Trusts' financial
statements or that are traditionally performed by the Auditor. The Audit
Committee will pre-approve all Audit-related services for the Trusts.
V. Tax Services
Tax services to the Trusts include tax compliance, tax planning and tax advice.
The Audit Committee will review all proposed tax related services to assure that
their provision would not impair the independence of the Auditor. The Audit
Committee will pre-approve all tax services for the Trusts.
VI. All Other Services
The Audit Committee believes, based on the SEC's rules prohibiting the
independent auditor from providing specific non-audit services, 3 that other
types of non-audit services are permitted. Accordingly, the Audit Committee
believes it may pre-approve those permissible non-audit services classified as
All Other Services that it believes would not impair the independence of the
auditor, and are consistent with the SEC's rules on auditor independence. The
Audit Committee will pre-approve all other services for the Trusts.
- --------------------------------------------------------------------------------
3 A list of specific prohibited non-audit services is set out in
Exhibit II, attached hereto.
VII. Procedures
Annually, the Audit Committee will review and approve the types of services to
be provided by the Auditor and review the projected fees for the next fiscal
year at a regularly scheduled meeting. That approval will acknowledge that the
Audit Committee is in agreement with the specific types of services that the
Auditor will be permitted to perform.
If subsequent to the annual approval by the Audit Committee, the Funds' or the
Trusts or any Service Affiliate seeks to engage the Auditor to perform a service
that was not approved, the Auditor, upon learning of such proposed engagement,
should submit the proposed engagement to the Trusts' [Treasurer or the Adviser]
and if the service fits within the independence guidelines, the [Treasurer or
the Adviser] will arrange for a discussion of the service to be included on the
agenda for the next regularly scheduled Audit Committee meeting so that specific
approval can be obtained. If the timing of the project is critical and the
project needs to commence before the regularly scheduled meeting, the specific
pre-approval by the Chairperson of the Audit Committee must be obtained before
any services are provided. The [Treasurer or the Adviser] will arrange this. The
Auditor must not commence any such project until specific approval has been
given.
VIII. Recordkeeping
The Trusts shall maintain a written record of all decisions made by the Audit
Committee or by the Chairperson of the Audit Committee pursuant to these
procedures, together with appropriate supporting material. In connection with
the ratification of any inadvertent non-audit services, a record shall be made
indicating that each of the conditions for this exception to the pre-approval
requirement has been satisfied. 4
IX. Amendment
The Audit Committee may review and amend these policies and procedures from time
to time as it deems appropriate.
Exhibit I
STI CLASSIC FUNDS/STI CLASSIC VARIABLE TRUST
Service Affiliates
Subject to Pre-Approval of Non-Audit Services
o Trusco Capital Management, Inc.
o SunTrust Banks, Inc.
o SunTrust Securities Inc.
o SunTrust Robinson Humphrey
o [any other affiliates that provide services to the Trusts]
- --------------------------------------------------------------------------------
4 See footnote 1 herein.
Exhibit II
STI CLASSIC FUNDS/STI CLASSIC VARIABLE TRUST
Prohibited Non-Audit Services
o Bookkeeping or other services related to the accounting records or
financial statements of the audit client
o Financial information systems design and implementation
o Appraisal or valuation services, fairness opinions or
contribution-in-kind reports
o Actuarial services
o Internal audit outsourcing services
o Management functions
o Human resources
o Broker-dealer, investment adviser or investment banking services
o Legal services
o Expert services unrelated to the audit
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to
waiver of pre-approval requirement were as follows:
---------------------------------------------------------------
2004 2003
---------------------------------------------------------------
Audit-Related Fees 0 % 0 %
---------------------------------------------------------------
Tax Fees 0 % 0 %
---------------------------------------------------------------
All Other Fees 0 % 0 %
---------------------------------------------------------------
(f) Not applicable.
(g) The aggregate non-audit fees and services billed by PWC for the last
two fiscal years were $1,855,277 and $1,498,453 for 2004 and 2003, respectively.
(h) The audit committee of the registrant's Board of Trustees reviewed and
considered whether the provision of non-audit services that were rendered to the
registrant's investment adviser, and any entity controlling, controlled by, or
under common control with the investment adviser that provides ongoing services
to the registrant, that were not pre-approved pursuant to paragraph (c)(7) (ii)
of Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASERS OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
that have materially affected, or are reasonably likely to materially affect,
the registrants internal control over financial reporting.
ITEMS 11. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an exhibit.
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) STI Classic Funds
By (Signature and Title)* /s/ James F. Volk
-------------------------------------
James F. Volk, President
Date 07/26/04
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ James F. Volk
-------------------------------------
James F. Volk, President
Date 07/26/04
By (Signature and Title)* /s/ Jennifer E. Spratley
-------------------------------------
Jennifer E. Spratley, Treasurer & CFO
Date 07/26/04
* Print the name and title of each signing officer under his or her signature.