As filed with the Securities and Exchange Commission on August 25, 2004
File No. 811-03626
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANY
CITIZENS FUNDS
(Exact Name of Registrant as Specified in Charter)
One Harbour Place, Suite 400, Portsmouth, New Hampshire 03801
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (603) 436-5152
Sophia Collier
Citizens Advisers, Inc.
One Harbour Place
Suite 400
Portsmouth, NH 03801
(Name and Address of Agent for Service)
June 30
(Date of fiscal year end)
June 30, 2004
(Date of reporting period)
ITEM 1. REPORT TO SHAREHOLDERS.
[CITIZENS FUNDS LOGO]
ANNUAL REPORT
and Supplemental Commentary 2004
[PICTURE]
NOT A PART OF THE ANNUAL REPORT
SUPPLEMENTAL COMMENTARY
LETTER FROM THE PRESIDENT 1
CITIZENS FOCUS: RESPONSIBLE INVESTING
AND ADVOCACY 2
COMPANY AND MARKET OVERVIEW 4
ANNUAL REPORT
PORTFOLIO REVIEW 6
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 25
PORTFOLIO HOLDINGS 26
STATEMENTS OF ASSETS AND LIABILITIES 48
STATEMENTS OF OPERATIONS 50
STATEMENTS OF CHANGES IN NET ASSETS 52
FINANCIAL HIGHLIGHTS 56
FINANCIAL NOTES 62
SUPPLEMENTAL INFORMATION 68
NOT A PART OF THE ANNUAL REPORT
LETTER FROM THE PRESIDENT
[PHOTO OF SOPHIA COLLIER]
Dear Shareholders,
My blood is boiling. As I watch oil flash to $49 per barrel and the stalling of
the most anemic economic recovery in my memory, I feel the urgent need for a
change in national leadership. In the last three years our nation has lost 1.2
million jobs, the worst economic performance since Herbert Hoover presided over
the start of the Great Depression.
It is time for persons of good will to rise up in a collective act of self-help
and demand change in policies that are clearly not working. As socially
responsible investors we strive to do the best we can to seek the best corporate
citizens and to reform corporate practices, improving the workplace and
environmental performance. When the economy was rising nicely earlier in our
fiscal year, we held companies we believed were best able to capture economic
growth. Just as the economy began to flower and employment began to grow the
economy stalled -- the result, in my opinion, of high energy costs and
geopolitical uncertainty. We have repositioned our portfolios for this new
environment, raising some cash in some of our funds and shifting to more
conservative companies including the most environmentally responsible of the
energy companies. But what is really needed is genuine, broad-based economic
growth.
Separate studies done by Citizens and Merrill Lynch among others have shown that
the dollar value of the energy price increases is the same (and likely now
exceeds) the dollar value of the tax cuts. What this means is that any
stimulative impact the tax cuts may have had has been cancelled out by high
energy costs. Instead of a vibrant economic climate, we are now faced with the
fact that taxpayers will be paying interest for years to come on capital now
held by oil producers, primarily in Saudi Arabia. It does not have to be this
way.
High energy prices are the result, in my opinion, of Middle East conflict, the
failure to require improved gas mileage in cars and policies that encourage the
use of non-renewable fuels. After the energy crisis of the 1970s the United
States successfully reduced its oil consumption and began development of
alternative energy technologies. These programs, now abandoned, must be embraced
again. I also feel we need a change in fiscal policy and an end to deficit
spending. I believe we need to return to the Ruben-era economic policies of the
1990s that brought the Federal deficit to zero and unemployment to its lowest
level in memory.
Shareholders, it is time for change in our national policies. I urge every one
of you to get involved to make sure that the change is for the better.
Sincerely yours,
/s/ Sophia Collier
Sophia Collier, President
NOT A PART OF THE ANNUAL REPORT
1
CITIZENS FOCUS RESPONSIBLE INVESTING AND ADVOCACY
To help us select the most promising companies for investment, our team of
social research analysts provides in-depth analysis of all candidates
considered. Here we continue a feature we began six months ago which highlights
some recently screened companies. We will continue to monitor these companies to
see if those we rejected make sufficient improvements to warrant potential
investment in the future -- and to make sure the others maintain a high level of
corporate and environmental responsibility to merit retention in our investable
universe.
WHY SOME FAILED OUR SCREENS
DIVERSITY
We believe companies which are so homogeneous that they don't have any women or
minorities in leadership positions are susceptible to missing valuable
perspectives that could be essential in setting a successful course for their
businesses. ADMINISTAFF INC., a human resources services provider to small and
medium-sized businesses, NITTO DENKO CORP., a Japanese manufacturer, and PARKER
DRILLING CO., a global oil driller, failed our diversity screen because they
would not confirm a single element of diversity on their board of directors or
top two levels of management.
ENVIRONMENT
In addition to not wanting to support polluters, we believe that patterns of
environmental mistreatment will eventually punish company bottom lines in terms
of fines, lawsuits and harm to reputation. We have steered clear of a number
companies in the past year for this reason. Here are two:
HECLA MINING CO. has the distinction of being sued in what is considered the
largest federal Superfund case to go to trial. According to the Environmental
Protection Agency (EPA), a Superfund site is any land in the United States that
has been contaminated by hazardous waste and identified by the EPA as a
candidate for cleanup because it poses a risk to human health and/or the
environment. Idaho's Coeur d'Alene Indian Tribe and the U.S. government have
already won $100 million in the first phase of this trial, and estimates predict
Hecla may be liable for $1.8 billion in the next phase. In 1999, we rejected
specialty chemicals maker MACDERMID INC., and we did so again this year, as we
found the company continued to exhibit a pattern of behavior that poses too
great a risk in our judgment.
HUMAN RIGHTS
In 1997 the United States joined the global community's call for an economic
embargo on Myanmar (formerly Burma). In support of this embargo, we've made it
one of our exclusionary screens. The current regime is responsible for countless
human rights violations, including forced labor, starvation and control through
extortion, violence and intimidation. INTERGRAPH CORP., a provider of software,
data processing and management systems, operates in Myanmar and has dealings
with the Myanmar government.
WEAPONS
It's one thing to clad soldiers with armor to save lives; it's another thing to
profit from making bombs. We rejected ARMOR HOLDINGS INC. because it applies its
technology to missiles and also fits vehicles with gun and artillery mounts.
HARRIS CORP., an international communications equipment company, has two
divisions devoted to military contracts. One division produces electronics
specifically designed for target acquisition by missiles.
NOT A PART OF THE ANNUAL REPORT
2
SELECTED COMPANIES THAT MADE THE CUT
CHIQUITA BRANDS INTERNATIONAL INC.
Our social analysts rejected this company in 1999, ahead of the company's 2001
bankruptcy. Chiquita has since emerged from Chapter 11 with a healthy balance
sheet. It has also turned around many of its previously objectionable
environmental, worker safety and labor practices. For instance, the company
participates in the Rainforest Alliance's Better Banana Project, publishes a
comprehensive Corporate Social Responsibility report and no longer exposes its
workers to aerial chemical applications.
On June 30, 2004, Chiquita accounted for 1.12% of the Citizens Small Cap Value
Fund portfolio.
REEBOK INTERNATIONAL LTD.
Like many in the apparel business, Reebok outsources the vast majority of its
production to overseas contractors. What sets Reebok apart is its progressive
approach to its outsourced facilities. It produces an annual Human Rights report
detailing how it is addressing issues like child labor, fair living wages and
worker environmental safety. Reebok has a stated human rights policy, which it
requires all of its vendors to follow. And it has all of its facilities audited
by third parties to ensure its policies are followed.
On June 30, 2004, Reebok accounted for 0.63% of the Citizens Value Fund
portfolio.
ADVOCATING ON YOUR BEHALF
[PHOTO OF JOANNE DOWDELL]
Joanne Dowdell, Director of Corporate Responsibility and leader of the Citizens
Advisers social research team.
CORPORATE PUSH-BACK ROARS ONCE MORE
In the wake of several notable corporate crimes, Congress enacted the
Sarbanes-Oxley reform legislation swiftly and by overwhelming margins. Lobbyists
for corporate interests, who were ineffective in that battle just two years ago,
are now back in the game and getting their way.
One of today's hottest corporate reform debates concerns the expensing of stock
options. Citizens and others in the socially responsible investment community
support a proposal to require companies to estimate and disclose the value of
stock options. When such expenses are not recorded, it can be difficult for
investors to get a complete picture of a company's financial health.
Corporate America, led by many in the otherwise progressive high-tech community,
generally opposes this reform. Shareholder resolutions calling for the expensing
of options have garnered significant support, yet few companies have changed
their ways. And now that the Financial Accounting Standards Board (FASB) appears
ready to pass a new rule to require options to be expensed, opponents have
turned to Congress to undermine it. In July, the U.S. House passed by a decisive
3 - 1 margin a measure that would severely undercut FASB's proposed rule. But
the Senate has yet to vote on the legislation.
So the debate rages on. Thanks to all who responded on our website to our
grassroots campaign to support the FASB rule. Citizens will continue to support
what we believe are in the best interests of shareholders on this and other
issues we feel will help make companies improve their corporate citizenship and
financial performance. To keep posted on the latest activism news, please visit
www.citizensfunds.com.
NOT A PART OF THE ANNUAL REPORT
3
COMPANY AND MARKET OVERVIEW
MANAGEMENT COMPANY UPDATE
At the management company we have been active in our continuing effort to
attract strong portfolio management talent to our organization. At the end of
the fiscal year we recruited Jonathan White, CFA to assume the portfolio
management duties on the Core Growth Fund. Jon has over 30 years of industry
experience and what we believe is a very fine investment record managing a large
cap growth mutual fund at BankNorth. This is an important milestone for us in
our ongoing strategy to further strengthen our investment team and improve the
performance of the funds.
MARKET COMMENTARY
Financial markets tend to reflect expectations of events six months to a year in
the future. In June 2003, U.S. equity markets were bright with anticipation of
economic improvement and earnings growth after a long three-year downturn. In
2002, many companies had taken a "big bath," recording record losses as they
wrote off failed investments from the dot-com era. To stimulate the economy, the
Federal Reserve Bank reduced interest rates to 40-year lows. Consumers had extra
dollars in their pockets from mortgage refinancing and tax cuts. Businesses were
feeling competitive, anxious to start growing again instead of attempting to
boost earnings through cost savings. In this climate investors were
rediscovering technology and biotech stocks and looking for growth from
traditional cyclical companies in sectors such as business services, electrical
equipment, machinery and trucking companies. The economy was finally moving
again.
For a few weeks in August 2003 it almost felt like 1999. The stock market was
flying with small-capitalization, lower-quality stocks leading with the largest
percentage gains. Even though oil prices were higher than average, investors
believed that they would soon moderate as Iraqi oil came online. China was
undergoing a full-scale boom. American companies such as Intel, with 25% of
their business in China, were doing very well and their share values were
rising.
Another factor priming the economy and corporate earnings was a weakening
dollar. With the United States government's tacit support, the dollar began a
steady decline versus other world currencies. Companies selling goods overseas
were able to record a gain on foreign exchange. The 500 widely-held companies
comprising the S&P 500 Index (an unmanaged index in which you may not invest)
reported earnings growth of 29% in the third quarter, and 66% in the fourth
quarter of 2003.
These high rates of growth were largely the result of recovery to more normal
levels of earnings from the depressed levels in the prior year. As autumn began,
some investors started thinking that perhaps the market had reached a near term
top and surmised that corporate earnings growth would inevitably slow. Incidents
of terrorism and a growing insurgency in Iraq also made it clear that the war
was far from over. Oil prices continued to rise based on demand and uncertainty
over supply, reaching $34 per barrel in December.
Midway through the fiscal year, notes of caution started to enter the market. As
companies began reporting their earnings in January, high-tech bellwethers such
as Intel and Cisco moderated their forecasts. Cisco's John Chambers stated that
businesses were not spending to the levels he had expected. While most companies
attained or exceeded earnings expectations, few increased their guidance
significantly for future growth.
NOT A PART OF THE ANNUAL REPORT
4
During 2003 certain hedge funds and other private investors anticipated that a
growing economy would increase the market for metals such as copper, and
subsequently took speculative positions in copper hoping to drive the prices as
high as possible for actual industrial users. With China's expansion and hedge
fund activity, commodities began to surge in price. Items such as steel, timber,
soybeans and milk saw sharp increases raising the possibility that inflation was
reigniting. With the fear of inflation came equity investors' other great
concern -- the prospect of rising interest rates.
Equity investors fear interest rate hikes for two basic reasons. Fundamentally,
when interest rates rise it hurts corporate profits and makes borrowing for new
projects more difficult. Second, if rates increase sufficiently investors will
switch from stocks to bonds and cause selling pressures, driving equity markets
down. However, there was an additional concern. Low interest rates provided
significant economic stimulus through a house buying and mortgage refinancing
boom. Climbing interest rates would likely stem the flow of cash from these
transactions and reduce consumer spending, thereby ending a significant stimulus
to the economy.
In March 2004, the Madrid train bombing was a tragic, sobering event. Ongoing
terrorism fears and increasing oil prices continued to spur fears about
inflation and interest rates. Investors' obsession on increasing interest rates
overshadowed the strong March payroll data and the fact that higher payrolls
indicate a growing economy and more consumer spending. The market sold off
sharply as oil reached $38 a barrel, and the war in Iraq and a spate of grisly
kidnappings was a persistent source of bad news for investors driven by a
24-hour news cycle.
Towards fiscal year end, most companies either met or exceeded earnings
expectations; however, no news seemed good enough to brighten investors'
spirits. Data began to suggest that the economy was likely slowing and companies
reflected this possibility in their forecasts of future earnings.
On the consumer front it has also become clear that rising oil and gas prices
took away any net benefit of the tax cuts. In fact, various studies have shown
oil price increases have equaled the amount of the tax cut in its entirety. In
summary, the fiscal year ended June 30, 2004 was a disappointing period. It
began on such a positive note, but had so little follow-through in what appears
to have been one of the most meager economic recoveries in memory.
OUTLOOK
Looking ahead, we believe we are in a lower growth environment and that the
election will likely serve as the next catalyst for the stock market. In general
we are positioning our growth equity fund portfolios in stable growth companies
and away from the more cyclical names. In the value funds we are seeking
opportunities among companies that have sold off to an excessive degree.
Emotion-filled times such as these are a prime time for value investors. Even in
times of lower growth, companies can make progress and we will seek to identify
these stable, higher quality companies to hold in our equity portfolios. One
question at this point is what will be the Federal Reserve's posture. The
economy is clearly slowing, but will the Fed continue to increase interest
rates? If so, rates are likely to rise less rapidly than previously expected,
which would be a mild positive for bonds and certain financial stocks.
NOT A PART OF THE ANNUAL REPORT
5
PORTFOLIO REVIEW
GOAL
Capital appreciation
STRATEGY
Invests mainly in stocks of U.S. small-capitalization companies
INCEPTION DATE
Standard shares 12/28/99
CITIZENS SMALL CAP CORE GROWTH FUND
AVERAGE ANNUAL RETURN (as of 6/30/2004)
Ticker 1 3 Since
symbol year years inception
------ ---- ----- ---------
Standard shares CSCSX 25.03% 4.42% 1.85%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
have been instituted in the past to maintain expense limits, without which
returns would have been lower. When you sell your fund shares, they may be worth
more or less than what you paid for them.
Citizens Small Cap Core Growth Fund had a nice year in absolute terms, returning
25.03% for its shareholders for the fiscal year ended June 30, 2004. The Russell
2000 Growth Index, the fund's benchmark, returned 31.55% during the same period.
The fund's positive performance was powered by the health care sector, where the
fund had several good picks. TheraSense was the fund's top contributor, adding
nearly 2% to overall performance of the fund. We locked in some gains as the
stock marched upwards in the first half of the fiscal year, and then reaped our
final gains when the stock jumped in January on news that the company would be
purchased by Abbott Labs. Cytyc was another great pick, as we benefited from the
stock's 140% surge during the 12-month period. It was the fund's number two
contributor, adding nearly 1.6% to the fund's overall return. American Medical
Systems, which focuses on men's health needs, was another winner, adding over
1.3% to the fund's performance.
Security holdings within the information technology sector also contributed
significantly to fund performance during the fiscal year. The biggest winner was
software maker Embarcadero Technologies, whose database products found
increasing acceptance with the return of corporate spending. Semiconductor
supplier International Rectifier also was a strong contributor, as its power
management solutions were adopted in communications equipment, automobiles and
numerous other diversified products, driving the company's margins higher.
Relative to the benchmark, however, this sector underperformed due to some poor
stock picks. As we have found, prices of stocks in the high-tech sector can be
volatile. Even small disappointments in forecast growth can send a stock down
significantly in a single day. This was the case with our largest high-tech
detractor, GlobespanVirata, a manufacturer of integrated circuits for
communications equipment. We sold the company's shares when they began falling
on news that the market for its DSL chips was significantly weaker than
expected.
IMPORTANT NOTES
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
Investing in smaller companies involves unique risks as there may be: less
seasoned management, limited product lines, financing and market share
challenges, and shares that trade with more volatility, less frequently or in
smaller volumes.
6
CITIZENS SMALL CAP CORE GROWTH FUND
[PERFORMANCE GRAPH]
SMALL CAP CORE GROWTH
PERFORMANCE SINCE INCEPTION 12/28/99
DATE DATE NAV MONTHLY FUND RETURN FUND VALUE RUSSELL 2000 GROWTH RETURN INDEX VALUE
12/28/99 12/28/99 10.00 $10,000.00 $10,000.00
12/31/1999 10.00 0.00% $10,000.00 5.22% $10,522.00
1/31/2000 9.71 -2.90% $ 9,710.00 -0.93% $12,970.47
2/29/2000 10.50 8.14% $10,500.00 23.27% $11,607.27
3/31/2000 10.80 2.86% $10,800.00 -10.51% $10,434.94
4/30/2000 10.44 -3.33% $10,440.00 -10.10% $ 9,520.84
5/31/2000 10.19 -2.39% $10,190.00 -8.76% $10,750.93
6/30/2000 6/30/00 11.23 10.21% $11,230.00 12.92% $ 9,829.58
7/31/2000 10.77 -4.10% $10,770.00 -8.57% $10,863.65
8/31/2000 11.62 7.89% $11,620.00 10.52% $10,323.72
9/30/2000 10.76 -7.40% $10,760.00 -4.97% $ 9,485.44
10/31/2000 10.28 -2.60% $10,480.00 -8.12% $ 7,762.88
11/30/2000 8.94 -14.69% $ 8,940.00 -18.16% $ 8,237.97
12/31/2000 9.39 5.00% $ 9,386.60 6.12% $ 8,904.42
1/31/2001 10.48 9.50% $10,278.20 8.09% $ 7,683.63
2/28/2001 9.07 -11.79% $ 9,066.00 -13.71% $ 6,985.18
3/31/2001 8.46 -6.74% $ 8,455.40 -9.09% $ 7,840.17
4/30/2001 9.09 7.47% $ 9,086.60 12.24% $ 8,022.06
5/31/2001 9.21 1.32% $ 9,206.80 2.32% $ 8,241.06
6/30/2001 6/30/01 9.54 3.59% $ 9,537.40 2.73% $ 7,538.10
7/31/2001 9.23 -3.26% $ 9,226.80 -8.53% $ 7,067.72
8/31/2001 9.05 -1.95% $ 9,046.50 -6.24% $ 5,926.99
9/30/2001 8.02 -11.30% $ 8,024.60 -16.14% $ 6,497.17
10/31/2001 8.64 7.62% $ 8,635.80 9.62% $ 7,039.68
11/30/2001 9.54 10.44% $ 9,537.40 8.35% $ 7,478.26
12/31/2001 10.21 7.04% $10,208.60 6.23% $ 7,212.03
1/31/2002 10.30 0.88% $10,298.80 -3.56% $ 6,745.41
2/28/2002 9.94 -3.50% $ 9,938.10 -6.47% $ 7,331.59
3/31/2002 10.30 3.63% $10,298.80 8.69% $ 7,173.23
4/30/2002 10.24 -0.58% $10,238.70 -2.16% $ 6,753.59
5/31/2002 9.60 -6.26% $ 9,597.50 -5.85% $ 6,180.89
6/30/2002 6/30/02 9.20 -4.18% $ 9,196.80 -8.48% $ 5,230.89
7/31/2002 7.94 -13.62% $ 7,944.50 -15.37% $ 5,228.27
8/31/2002 7.88 -0.76% $ 7,884.40 -0.05% $ 4,850.79
9/30/2002 7.49 -4.96% $ 7,493.70 -7.22% $ 5,096.24
10/31/2002 7.73 3.21% $ 7,734.10 5.06% $ 5,601.28
11/30/2002 8.41 8.68% $ 8,405.30 9.91% $ 5,214.79
12/31/2002 7.61 -9.42% $ 7,613.90 -6.90% $ 5,072.95
1/31/2003 7.38 -3.03% $ 7,383.50 -2.72% $ 4,937.50
2/28/2003 7.34 -0.54% $ 7,343.40 -2.67% $ 5,012.05
3/31/2003 7.38 0.55% $ 7,383.50 1.51% $ 5,486.19
4/30/2003 7.88 6.78% $ 7,884.40 9.46% $ 6,104.49
5/31/2003 8.53 8.13% $ 8,525.60 11.27% $ 6,222.31
6/30/2003 6/30/03 8.69 1.88% $ 8,685.80 1.93% $ 6,692.71
7/31/2003 9.25 6.46% $ 9,246.90 7.56% $ 7,052.11
8/31/2003 9.98 7.91% $ 9,978.20 5.37% $ 6,873.69
9/30/2003 9.35 -6.33% $ 9,347.00 -2.53% $ 7,467.58
10/31/2003 10.36 10.83% $10,358.90 8.64% $ 7,711.02
11/30/2003 10.54 1.74% $10,539.20 3.26% $ 7,745.72
12/31/2003 10.60 0.57% $10,599.30 0.45% $ 8,152.37
1/31/2004 11.27 6.33% $11,270.60 5.25% $ 8,140.14
2/29/2004 11.23 -0.36% $11,230.50 -0.15% $ 8,178.40
3/31/2004 11.14 -0.80% $11,140.30 0.47% $ 7,767.85
4/30/2004 10.41 -6.56% $10,409.00 -5.02% $ 7,922.43
5/31/2004 10.55 1.35% $10,549.20 1.99% $ 8,186.24
6/30/2004 6/30/04 10.86 2.94% $10,859.80 3.33% $ 8,186.24
The poorest performing sector for the fund was materials, due to our underweight
to the index and our stock selection. While a tiny sector within the small-cap
growth universe, a number of mining companies exhibited very strong performance
in early fiscal 2004 as commodity prices were rising. We wanted to participate
but found that most mining companies we considered failed to pass our
environmental screens. We did qualify two silver mining operations with good
environmental records but were too late to profit from these investments and
have since sold most of our positions. The cyclical theme was also in place
during the fiscal year in the industrials group. A top performer was trucker
Landstar System. With its unique business model and focus on logistics, Landstar
grew rapidly with the economic recovery.
For fiscal 2005 we are looking away from the cyclical companies and more towards
what we believe are the steady growers. In line with our view that the economy
is growing, but at a slower pace than first believed, we will emphasize proven
business models and less risky names. Fortunately, within the small-cap universe
we believe there are many exciting companies to consider. We expect health care,
high-tech and consumer stocks to be leaders in the coming year.
The Russell 2000 Growth Index is an unmanaged index that measures the
performance of those Russell 2000 companies with higher price-to-book ratios and
higher forecasted growth values. Direct investment cannot be made in this index.
All index and fund performance figures assume reinvestment of dividends and
distributions. Index results do not include costs of investing, which would
lower performance.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Registered Public Accounting Firm.
7
CITIZENS EMERGING GROWTH FUND
PORTFOLIO REVIEW
GOAL
Aggressive growth
STRATEGY
Invests mainly in stocks of young, growing, medium-capitalization companies
INCEPTION DATES
Standard shares 02/08/94
Institutional shares 11/01/99
Administrative shares 02/04/00
AVERAGE ANNUAL RETURN (as of 06/30/2004)
Ticker 1 3 5 10 Since
symbol year years years years inception
Standard shares WAEGX 18.70% -6.25% -1.29% 11.97% 11.42%
Institutional shares CEGIX 19.41% -5.63% N/A N/A -4.22%
Administrative shares CGRDX 18.99% -5.90% N/A N/A -10.63%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
have been instituted in the past to maintain expense limits, without which
returns would have been lower. When you sell your fund shares, they may be worth
more or less than what you paid for them.
The Citizens Emerging Growth Fund (Standard shares) returned 18.70% for the
fiscal year ended June 30, 2004. During the same period the benchmark Russell
MidCap Growth Index returned 27.33%. The story for the fund this year was
primarily played out in two of its sectors -- information technology and health
care -- both of which saw a fair share of highs and lows.
The holdings within the information technology sector delivered the largest
absolute returns for the fund, with two software companies, Symantec Corp. and
Adobe Systems, among the top contributors. We were overweight in both of these
stocks versus the benchmark. Symantec has been a tremendous financial performer
as it engages in its pitched battle to protect the public from virus-writing
hackers. Periodically, rumors that Microsoft will enter the anti-virus market
roil Symantec's stock, but despite these issues Symantec's stock almost doubled
this fiscal year. Adobe is another company that successfully defended its turf
from Microsoft. Adobe's recent bundling of its flagship product Photoshop into a
Creative Suite with other offerings has been a strong seller. Within the
high-tech space another strong stock for the fund has been Juniper Networks,
whose edge routers have successfully challenged Cisco. Despite the
outperformance of these and other picks, overall stock selection caused us to
underperform relative to the benchmark in this sector. In fact, six of the
fund's ten worst performers were in this sector. Among our high tech detractors
were QLogic Corp., the fund's second worst performer, and GlobespanVirata.
QLogic, which sells components of storage systems, announced
weaker-than-expected sales and the stock sold off. GlobespanVirata declined on a
weaker-than-expected market for its DSL chips.
IMPORTANT NOTES
The table and graph do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Investing in small-and mid-sized companies involves unique risks as there may
be: less seasoned management, limited product lines, financing and market share
challenges, and shares that trade with more volatility, less frequently or in
smaller volumes.
Health care was the second leading sector to contribute to the fund's
results, led by Cytyc, which had a terrific year, steadily rising 140%
over the 12-month period. This
8
CITIZENS EMERGING GROWTH FUND
[PERFORMANCE GRAPH]
CITIZENS EMERGING GROWTH FUND - STANDARD SHARES
PERFORMANCE SINCE INCEPTION 02/08/94
DATE DATE NAV MONTHLY FUND RETURN FUND VALUE RUSSELL MID CAP GROWTH RETURN INDEX VALUE
2/8/94 2/8/94 10.00 $ 10,000.00 $ 10,000.00
2/28/1994 10.06 0.60% $ 10,060.00 -0.80% $ 9,920.00
3/31/1994 9.88 -1.79% $ 9,880.00 -4.71% $ 9,452.77
4/30/1994 10.01 1.32% $ 10,010.00 -0.24% $ 9,430.08
5/31/1994 10.07 0.60% $ 10,070.00 0.15% $ 9,444.23
6/30/1994 6/30/94 9.93 -1.39% $ 9,930.00 -4.30% $ 9,038.12
7/31/1994 10.14 2.11% $ 10,140.00 2.77% $ 9,288.48
8/31/1994 10.55 4.04% $ 10,550.00 5.96% $ 9,842.07
9/30/1994 10.73 1.71% $ 10,730.00 -1.65% $ 9,679.68
10/31/1994 10.91 1.68% $ 10,910.00 1.73% $ 9,847.14
11/30/1994 10.55 -3.30% $ 10,550.00 -4.41% $ 9,412.88
12/31/1994 10.71 1.53% $ 10,711.80 1.40% $ 9,544.66
1/31/1995 10.71 0.00% $ 10,711.80 1.20% $ 9,659.20
2/28/1995 11.00 2.70% $ 11,000.50 5.32% $ 10,173.07
3/31/1995 11.33 3.00% $ 11,330.40 3.97% $ 10,576.94
4/30/1995 11.38 0.45% $ 11,381.90 0.84% $ 10,665.78
5/31/1995 11.30 -0.72% $ 11,299.40 2.46% $ 10,928.16
6/30/1995 6/30/95 12.24 8.30% $ 12,237.60 4.55% $ 11,425.39
7/31/1995 13.25 8.26% $ 13,248.00 6.29% $ 12,144.05
8/31/1995 13.29 0.31% $ 13,289.20 1.09% $ 12,276.42
9/30/1995 13.97 5.12% $ 13,969.70 2.23% $ 12,550.18
10/31/1995 14.20 1.62% $ 14,196.50 -2.53% $ 12,232.66
11/30/1995 14.57 2.61% $ 14,567.60 4.47% $ 12,779.46
12/31/1995 15.07 3.48% $ 15,074.60 0.06% $ 12,787.13
1/31/1996 14.97 -0.70% $ 14,969.10 1.77% $ 13,013.46
2/26/1996 15.52 3.68% $ 15,520.00 3.78% $ 13,505.37
3/31/1996 15.74 1.43% $ 15,742.70 0.79% $ 13,612.06
4/30/1996 16.94 7.60% $ 16,938.40 4.83% $ 14,269.53
5/31/1996 17.90 5.67% $ 17,899.60 2.04% $ 14,560.63
6/30/1996 6/30/96 17.43 -2.62% $ 17,430.70 -3.02% $ 14,120.89
7/31/1996 16.75 -3.90% $ 16,750.80 -7.76% $ 13,025.11
8/30/1996 17.30 3.29% $ 17,301.80 5.40% $ 13,728.47
9/30/1996 18.37 6.17% $ 18,368.50 6.35% $ 14,600.23
10/31/1996 17.52 -4.59% $ 17,524.50 -1.17% $ 14,429.40
11/30/1996 17.54 0.07% $ 17,536.20 5.89% $ 15,279.30
12/31/1996 17.17 -2.08% $ 17,172.00 -1.68% $ 15,022.60
1/31/1997 18.03 5.00% $ 18,031.30 4.42% $ 15,686.60
2/28/97 16.88 -6.40% $ 16,877.10 -2.20% $ 15,341.50
3/31/1997 15.45 -8.44% $ 15,453.50 -5.65% $ 14,474.70
4/30/1997 15.95 3.24% $ 15,953.70 2.45% $ 14,829.33
5/31/1997 17.42 9.16% $ 17,415.70 8.96% $ 16,158.04
6/30/1997 6/30/97 18.13 4.12% $ 18,133.90 2.77% $ 16,605.62
7/31/1997 20.26 11.74% $ 20,262.70 9.57% $ 18,194.78
8/29/1997 19.84 -2.09% $ 19,839.50 -0.98% $ 18,016.47
09/30/97 20.98 5.75% $ 20,980.90 5.06% $ 18,928.10
10/31/1997 19.61 -6.54% $ 19,608.70 -5.01% $ 17,979.80
11/29/1997 19.47 -0.72% $ 19,467.60 1.05% $ 18,168.59
12/31/1997 20.21 3.81% $ 20,209.00 1.31% $ 18,406.60
1/31/1998 20.06 -0.75% $ 20,057.70 -1.80% $ 18,075.28
2/28/1998 22.13 10.35% $ 22,133.60 9.40% $ 19,774.36
3/31/1998 24.14 9.07% $ 24,140.80 4.19% $ 20,602.90
4/30/1998 23.85 -1.20% $ 23,852.10 1.36% $ 20,883.10
5/31/1998 22.67 -4.96% $ 22,669.80 -4.11% $ 20,024.81
6/30/1998 6/30/98 24.13 6.43% $ 24,127.00 2.83% $ 20,591.51
7/31/1998 23.78 -1.42% $ 23,783.30 -4.28% $ 19,710.19
8/31/1998 19.19 -19.31% $ 19,191.60 -19.09% $ 15,947.52
9/30/1998 21.21 10.53% $ 21,212.50 7.56% $ 17,153.15
10/31/1998 23.16 9.20% $ 23,164.70 7.36% $ 18,415.62
11/30/1998 25.06 8.19% $ 25,061.90 6.75% $ 19,658.68
12/31/1998 28.84 15.07% $ 28,839.60 10.36% $ 21,695.32
1/31/1999 29.37 1.83% $ 29,367.50 3.00% $ 22,346.17
2/28/1999 27.04 -7.91% $ 27,044.70 -4.89% $ 21,253.45
3/31/1999 28.45 5.19% $ 28,447.50 5.57% $ 22,437.26
4/30/1999 29.14 2.44% $ 29,141.30 4.56% $ 23,460.40
5/31/1999 28.98 -0.57% $ 28,975.40 -1.29% $ 23,157.76
6/30/1999 6/30/99 32.84 13.33% $ 32,836.80 6.98% $ 24,774.18
7/31/1999 33.20 1.10% $ 33,198.80 -3.18% $ 23,986.36
8/31/1999 33.64 1.32% $ 33,636.20 -1.04% $ 23,736.90
9/30/1999 34.03 1.17% $ 34,028.30 -0.85% $ 23,535.14
10/31/1999 38.86 14.18% $ 38,855.10 7.73% $ 25,354.40
11/30/1999 42.31 8.89% $ 42,309.20 10.36% $ 27,981.12
12/31/1999 48.48 14.57% $ 48,475.20 17.31% $ 32,824.65
1/31/2000 46.72 -3.61% $ 46,724.80 -0.02% $ 32,818.08
2/29/2000 58.57 25.34% $ 58,566.80 21.02% $ 39,716.44
3/31/2000 59.66 1.86% $ 59,656.30 0.10% $ 39,756.16
4/30/2000 59.50 -0.27% $ 59,495.60 -9.71% $ 35,895.84
5/31/2000 53.55 -10.00% $ 53,547.80 -7.29% $ 33,279.03
6/30/2000 6/30/00 59.78 11.64% $ 59,781.40 10.61% $ 36,809.94
7/31/2000 56.51 -5.47% $ 56,512.80 -6.33% $ 34,479.87
8/31/2000 62.10 9.89% $ 62,103.30 15.08% $ 39,679.43
9/30/2000 59.94 -3.48% $ 59,942.10 -4.89% $ 37,739.11
10/31/2000 57.89 -3.43% $ 57,888.10 -6.84% $ 35,157.75
11/30/2000 46.89 -19.01% $ 46,885.60 -21.73% $ 27,517.97
12/31/2000 48.16 2.73% $ 48,163.60 5.27% $ 28,968.17
1/31/2001 46.96 -2.51% $ 46,957.10 5.71% $ 30,622.25
2/28/2001 40.85 -13.00% $ 40,853.90 -17.30% $ 25,324.60
3/31/2001 36.41 -10.89% $ 36,406.50 -14.31% $ 21,700.65
4/30/2001 39.34 8.06% $ 39,339.90 16.67% $ 25,318.15
5/31/2001 38.46 -2.22% $ 38,464.60 -0.47% $ 25,199.16
6/30/2001 6/30/01 37.35 -2.89% $ 37,352.80 0.05% $ 25,211.75
7/31/2001 35.01 -6.27% $ 35,010.80 -6.75% $ 23,509.96
8/31/2001 32.88 -6.08% $ 32,881.80 -7.25% $ 21,805.49
9/30/2001 26.97 -17.99% $ 26,967.80 -16.53% $ 18,201.04
10/31/2001 28.88 7.11% $ 28,883.90 10.51% $ 20,113.97
11/30/2001 31.65 9.58% $ 31,651.70 10.77% $ 22,280.25
12/31/2001 32.29 2.02% $ 32,290.40 3.80% $ 23,126.90
1/31/2002 32.31 0.07% $ 32,314.10 -3.25% $ 22,375.27
2/28/2002 30.66 -5.12% $ 30,658.10 -5.67% $ 21,106.59
3/31/2002 33.40 8.95% $ 33,402.20 7.63% $ 22,717.03
4/30/2002 31.68 -5.17% $ 31,675.30 -5.29% $ 21,515.30
5/31/2002 30.54 -3.58% $ 30,539.90 -2.98% $ 20,874.14
6/30/2002 6/30/02 27.96 -8.44% $ 27,961.40 -11.04% $ 18,569.64
7/31/2002 25.90 -7.36% $ 25,903.30 -9.72% $ 16,764.67
8/31/2002 25.17 -2.83% $ 25,170.00 -0.35% $ 16,705.99
9/30/2002 23.40 -7.05% $ 23,395.80 -7.95% $ 15,377.86
10/31/2002 24.01 2.63% $ 24,010.80 7.75% $ 16,569.65
11/30/2002 24.98 4.04% $ 24,980.70 7.83% $ 17,867.05
12/31/2002 23.02 -7.86% $ 23,017.30 -6.04% $ 16,787.88
1/31/2003 22.47 -2.36% $ 22,473.20 -0.98% $ 16,623.36
2/28/2003 22.57 0.42% $ 22,567.80 -0.87% $ 16,478.74
3/31/2003 22.38 -0.84% $ 22,378.60 1.86% $ 16,785.24
4/30/2003 23.82 6.45% $ 23,821.60 6.81% $ 17,928.32
5/31/2003 25.50 7.05% $ 25,501.10 9.62% $ 19,653.02
6/30/2003 6/30/03 25.93 1.67% $ 25,926.90 1.43% $ 19,934.06
7/31/2003 26.71 3.01% $ 26,707.60 3.57% $ 20,645.71
8/31/2003 28.67 7.35% $ 28,671.00 5.51% $ 21,783.28
9/30/2003 27.58 -3.80% $ 27,582.90 -1.94% $ 21,360.69
10/31/2003 29.50 6.95% $ 29,499.00 8.06% $ 23,082.36
11/30/2003 29.97 1.60% $ 29,972.10 2.68% $ 23,700.97
12/31/2003 30.28 1.03% $ 30,279.60 1.09% $ 23,959.31
1/31/2004 30.99 2.34% $ 30,989.30 3.30% $ 24,749.96
2/29/2004 31.11 0.38% $ 31,107.60 1.68% $ 25,165.76
3/31/2004 30.89 -0.68% $ 30,894.70 -0.19% $ 25,117.95
4/30/2004 29.83 -3.45% $ 29,830.20 -2.82% $ 24,409.62
5/31/2004 30.52 2.30% $ 30,516.20 2.36% $ 24,985.69
6/30/2004 6/30/04 30.78 0.85% $ 30,776.40 1.59% $ 25,382.96
company, which designs and manufactures products for use in medical diagnostic
applications primarily focused on women's health, contributed over 1.5% to the
fund's return in fiscal 2004 and was our number one performer. Another
significant contributor was Sierra Health Services. As with information
technology, however, poor overall stock selection caused this sector to
underperform versus the benchmark. The fund's worst performer was MedImmune,
whose stock lost over 35% during the 12-month period. We were also overweight in
this stock compared to its representation in the benchmark. Other health care
detractors included Thoratec and Barr Pharmaceuticals, which together with
MedImmune cut 1.3% from the fund's overall return.
The fund's top contributing sector relative to the benchmark was industrials,
where our stock picking outperformed. Notable performers were the low-fare
airline JetBlue, the fund's number two contributor, returning over 1% for the
fund, and Fastenal, a provider of industrial and construction supplies, which
added nearly 1%. No sector lost money in absolute terms during the fiscal year
but utilities and materials were our weakest areas, contributing very little to
the portfolio.
In the upcoming year we will focus the portfolio on stocks of companies that we
believe have steady and strong growth prospects. We will likely keep a similar
sector exposure but allocate our weight more to the less cyclical names.
The Russell MidCap Growth Index is an unmanaged index that measures the
performance of those Russell Midcap companies with higher price-to-book ratios
and higher forecasted growth values. The stocks are also members of the Russell
1000 Growth Index. Direct investment cannot be made in this index.
All index and fund performance figures assume reinvestment of dividends and
distributions. Index results do not include costs of investing, which would
lower performance. Information contained in the Portfolio Review is not audited
and therefore is excluded from the Report of Independent Registered Public
Accounting Firm.
9
CITIZENS CORE GROWTH FUND
PORTFOLIO REVIEW
GOAL
Long-term capital appreciation
STRATEGY
Invests mainly in stocks of U.S. large-capitalization companies
INCEPTION DATES
Standard shares 03/03/95
Institutional shares 01/25/96
Administrative shares 02/04/00
AVERAGE ANNUL RETURNS (as of 06/30/2004)
Ticker 1 3 5 Since
symbol year years years inception
------ ---- ----- ----- ---------
Standard shares WAIDX 10.10% -6.46% -7.94% 8.69%
Institutional shares WINIX 10.96% -5.81% -7.31% 7.75%
Administrative shares CGADX 10.55% -6.09% N/A -10.75%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
have been instituted in the past to maintain expense limits, without which
returns would have been lower. When you sell your fund shares, they may be worth
more or less than what you paid for them.
The big news for the Citizens Core Growth Fund is that Jonathan White, CFA, took
over management of the portfolio on July 1, 2004. Sophia Collier has stepped
down as lead manager after almost ten years on the fund. Sophia continues as
president of the management company and supports Jon as he puts his own touch on
the Citizens Core Growth Fund's strategy.
In fiscal 2004 Citizens Core Growth Fund (Standard shares) returned 10.10%.
During the same period, the benchmark Russell 1000 Growth Index returned 17.88%.
Our biggest winners were 3M and Cisco, each of which contributed almost 1% to
the total return of the fund. We were overweight in each of these high-quality
stocks versus the benchmark. 3M is an interesting company that has executed an
impressive turnaround over the last three years. As a large industrial company,
it continues to focus on reducing the environmental impact of its operations.
The company's commitment to its groundbreaking "3P" program (Pollution
Prevention Pays), launched in 1975, remains strong, as the company continues to
set and meet aggressive pollution reduction goals. The fund's worst performer in
absolute terms was Amgen, a biotech firm which sold off on concerns about
Medicare reimbursements for its flagship products. In prior years Amgen had been
a strong stock for the portfolio and among our top contributors. In 2004 we
trimmed the position as the stock declined, but we stubbornly held on because we
believed investors would soon appreciate the company's earnings growth as it was
demonstrated quarter after quarter. However, despite Amgen's fundamental
performance -- sales growth of more than 42% for the most recent 12 months --
the stock was selling close to its 52-week low at fiscal year-end.
IMPORTANT NOTES
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The Russell 1000 Growth Index is an unmanaged index that measures the
performance of those Russell 1000 companies with higher price-to-book ratios and
higher forecasted growth values. The fund is changing to this index as its
reference index. The companies in this index are more represenative of the
fund's holdings.
10
CITIZENS CORE GROWTH FUND
[PERFORMANCE GRAPH]
CITIZENS CORE GROWTH FUND - STANDARD SHARES
PERFORMANCE SINCE INCEPTION 03/03/95
DATE DATE NAV MONTHLY FUND RETURN FUND VALUE RUSSELL 1000 GROWTH INDEX VALUE S&P 500 INDEX VALUE
3/3/95 3/3/95 10.00 $ 10,000.00 $ 10,000.00 $ 10,000.00
3/31/1995 10.10 1.00% $ 10,100.00 2.92% $ 10,219.00 3.40% $ 10,294.00
4/30/1995 10.40 2.97% $ 10,400.00 2.19% $ 10,574.62 2.94% $ 10,705.76
5/31/1995 10.53 1.25% $ 10,530.00 3.48% $ 10,982.80 4.00% $ 10,954.13
6/30/1995 6/30/95 10.94 3.89% $ 10,940.00 3.86% $ 11,439.69 2.32% $ 11,317.81
7/31/1995 11.36 3.84% $ 11,360.00 4.16% $ 11,452.27 3.32% $ 11,346.11
8/31/1995 11.45 0.79% $ 11,450.00 0.11% $ 11,980.22 0.25% $ 11,824.91
9/30/1995 11.86 3.58% $ 11,860.00 4.61% $ 11,988.61 4.22% $ 11,782.34
10/31/1995 11.97 0.93% $ 11,970.00 0.07% $ 12,454.96 -0.36% $ 12,299.59
11/30/1995 12.33 3.01% $ 12,330.00 3.89% $ 12,525.96 4.39% $ 12,536.97
12/31/1995 12.41 0.61% $ 12,405.00 0.57% $ 12,944.32 1.93% $ 12,963.23
1/31/1996 12.65 1.95% $ 12,646.60 3.34% $ 13,181.20 3.40% $ 13,083.78
2/26/1996 12.88 1.83% $ 12,878.20 1.83% $ 13,198.34 0.93% $ 13,209.39
3/31/1996 12.86 -0.16% $ 12,858.10 0.13% $ 13,545.46 0.96% $ 13,403.57
4/30/1996 13.20 2.66% $ 13,200.40 2.63% $ 14,018.19 1.47% $ 13,749.38
5/31/1996 13.59 2.97% $ 13,593.10 3.49% $ 14,037.82 2.58% $ 13,801.63
6/30/1996 6/30/96 13.50 -0.67% $ 13,502.50 0.14% $ 13,215.20 0.38% $ 13,191.59
7/31/1996 12.91 -4.40% $ 12,908.40 -5.86% $ 13,556.15 -4.42% $ 13,469.94
8/30/1996 13.23 2.50% $ 13,230.60 2.58% $ 14,543.04 2.11% $ 14,228.29
9/30/1996 14.08 6.39% $ 14,076.40 7.28% $ 14,630.30 5.63% $ 14,620.99
10/31/1996 14.43 2.50% $ 14,428.80 0.60% $ 15,729.04 2.76% $ 15,726.34
11/30/1996 15.63 8.30% $ 15,627.10 7.51% $ 15,420.75 7.56% $ 15,414.96
12/31/1996 15.27 -2.31% $ 15,266.30 -1.96% $ 16,501.74 -1.98% $ 16,378.39
1/31/1997 16.42 7.53% $ 16,415.60 7.01% $ 16,389.53 6.25% $ 16,506.15
2/28/97 16.52 0.62% $ 16,517.30 -0.68% $ 15,502.86 0.78% $ 15,827.74
3/31/1997 15.55 -5.85% $ 15,551.10 -5.41% $ 16,532.24 -4.11% $ 16,772.66
4/30/1997 16.67 7.19% $ 16,669.90 6.64% $ 17,725.87 5.97% $ 17,794.11
5/31/1997 17.70 6.16% $ 17,697.10 7.22% $ 18,434.91 6.09% $ 18,591.29
6/30/1997 6/30/97 18.35 3.68% $ 18,348.00 4.00% $ 20,064.55 4.48% $ 20,071.16
7/31/1997 20.19 10.03% $ 20,188.90 8.84% $ 18,890.78 7.96% $ 18,947.17
8/29/1997 19.11 -5.34% $ 19,110.80 -5.85% $ 19,820.20 -5.60% $ 19,985.48
09/30/97 20.16 5.48% $ 20,158.40 4.92% $ 19,086.86 5.48% $ 19,317.96
10/31/1997 19.35 -3.99% $ 19,354.90 -3.70% $ 19,898.05 -3.34% $ 20,212.38
11/29/1997 20.40 5.41% $ 20,402.50 4.25% $ 20,120.91 4.63% $ 20,560.04
12/31/1997 20.60 0.99% $ 20,603.90 1.12% $ 20,722.52 1.72% $ 20,788.25
1/31/1998 21.20 2.90% $ 21,201.70 2.99% $ 22,280.85 1.11% $ 22,287.09
2/28/1998 22.87 7.86% $ 22,867.10 7.52% $ 23,169.86 7.21% $ 23,428.19
3/31/1998 23.98 4.86% $ 23,977.30 3.99% $ 23,489.60 5.12% $ 23,664.81
4/30/1998 24.22 1.02% $ 24,222.90 1.38% $ 22,822.50 1.01% $ 23,257.78
5/31/1998 23.53 -2.86% $ 23,529.00 -2.84% $ 24,219.24 -1.72% $ 24,202.04
6/30/1998 6/30/98 25.04 6.44% $ 25,044.90 6.12% $ 24,059.39 4.06% $ 23,945.50
7/31/1998 24.94 -0.43% $ 24,938.10 -0.66% $ 20,448.07 -1.06% $ 20,482.98
8/31/1998 21.21 -14.94% $ 21,212.40 -15.01% $ 22,018.49 -14.46% $ 21,795.94
9/30/1998 23.07 8.76% $ 23,069.90 7.68% $ 23,788.77 6.41% $ 23,567.95
10/31/1998 24.77 7.36% $ 24,767.30 8.04% $ 25,599.10 8.13% $ 24,996.17
11/30/1998 26.64 7.54% $ 26,635.60 7.61% $ 27,908.14 6.06% $ 26,435.95
12/31/1998 29.41 10.42% $ 29,412.00 9.02% $ 29,546.35 5.76% $ 27,540.97
1/31/1999 31.68 7.71% $ 31,679.40 5.87% $ 28,196.08 4.18% $ 26,684.45
2/28/1999 29.76 -6.07% $ 29,757.50 -4.57% $ 29,682.01 -3.11% $ 27,751.82
3/31/1999 31.04 4.32% $ 31,042.40 5.27% $ 29,720.60 4.00% $ 28,825.82
4/30/1999 31.87 2.68% $ 31,873.70 0.13% $ 28,808.18 3.87% $ 28,145.53
5/31/1999 31.02 -2.68% $ 31,020.80 -3.07% $ 30,824.75 -2.36% $ 29,707.61
6/30/1999 6/30/99 32.95 6.23% $ 32,953.50 7.00% $ 29,844.52 5.55% $ 28,780.73
7/31/1999 32.25 -2.13% $ 32,251.70 -3.18% $ 30,330.99 -3.12% $ 28,639.70
8/31/1999 31.98 -0.84% $ 31,981.70 1.63% $ 29,694.04 -0.49% $ 27,854.98
9/30/1999 31.20 -2.43% $ 31,204.30 -2.10% $ 31,935.94 -2.74% $ 29,618.20
10/31/1999 33.22 6.47% $ 33,223.40 7.55% $ 33,660.48 6.33% $ 30,219.44
11/30/1999 34.64 4.26% $ 34,637.90 5.40% $ 37,161.17 2.03% $ 31,999.37
12/31/1999 37.50 8.26% $ 37,497.40 10.40% $ 35,418.31 5.89% $ 30,393.00
1/31/2000 35.18 -6.18% $ 35,181.60 -4.69% $ 37,150.26 -5.02% $ 29,818.57
2/29/2000 36.06 2.50% $ 36,060.00 4.89% $ 39,810.22 -1.89% $ 32,734.83
3/31/2000 39.54 9.65% $ 39,539.40 7.16% $ 37,915.25 9.78% $ 31,749.51
4/30/2000 37.11 -6.15% $ 37,109.60 -4.76% $ 36,004.33 -3.01% $ 31,098.65
5/31/2000 35.17 -5.23% $ 35,170.20 -5.04% $ 38,733.45 -2.05% $ 31,866.78
6/30/2000 6/30/00 37.18 5.71% $ 37,178.00 7.58% $ 37,118.27 2.47% $ 31,369.66
7/31/2000 36.15 -2.76% $ 36,151.30 -4.17% $ 40,477.47 -1.56% $ 33,317.72
8/31/2000 38.23 5.74% $ 38,227.50 9.05% $ 36,648.30 6.21% $ 31,558.54
9/30/2000 35.22 -7.88% $ 35,215.90 -9.46% $ 34,914.84 -5.28% $ 31,426.00
10/31/2000 35.49 0.78% $ 35,489.60 -4.73% $ 29,768.39 -0.42% $ 28,949.63
11/30/2000 30.70 -13.50% $ 30,698.40 -14.74% $ 28,827.71 -7.88% $ 29,091.48
12/31/2000 29.72 -3.20% $ 29,715.00 -3.16% $ 30,819.70 0.49% $ 30,124.23
1/31/2001 32.16 8.22% $ 32,157.20 6.91% $ 25,586.52 3.55% $ 27,376.90
2/28/2001 27.06 -15.86% $ 27,056.30 -16.98% $ 22,802.71 -9.12% $ 25,641.20
3/31/2001 24.71 -8.67% $ 24,710.40 -10.88% $ 25,687.25 -6.34% $ 27,633.53
4/30/2001 27.03 9.40% $ 27,032.30 12.65% $ 25,309.64 7.77% $ 27,818.67
5/31/2001 27.08 0.18% $ 27,080.40 -1.47% $ 24,722.46 0.67% $ 27,142.68
6/30/2001 6/30/01 26.61 -1.73% $ 26,611.20 -2.32% $ 24,104.40 -2.43% $ 26,876.68
7/31/2001 26.31 -1.13% $ 26,310.40 -2.50% $ 22,132.66 -0.98% $ 25,194.20
8/31/2001 24.28 -7.73% $ 24,277.30 -8.18% $ 19,923.82 -6.26% $ 23,158.51
9/30/2001 21.81 -10.16% $ 21,811.10 -9.98% $ 20,969.82 -8.08% $ 23,600.83
10/31/2001 22.30 2.26% $ 22,304.30 5.25% $ 22,985.02 1.91% $ 25,411.02
11/30/2001 24.39 9.33% $ 24,385.60 9.61% $ 22,941.35 7.67% $ 25,634.64
12/31/2001 24.30 -0.35% $ 24,301.40 -0.19% $ 22,535.29 0.88% $ 25,260.37
1/31/2002 23.90 -1.63% $ 23,904.40 -1.77% $ 21,600.07 -1.46% $ 24,772.84
2/28/2002 23.00 -3.77% $ 23,002.10 -4.15% $ 22,347.44 -1.93% $ 25,704.30
3/31/2002 23.88 3.82% $ 23,880.30 3.46% $ 20,523.88 3.76% $ 24,146.62
4/30/2002 22.45 -5.99% $ 22,448.70 -8.16% $ 20,027.21 -6.06% $ 23,967.94
5/31/2002 22.04 -1.82% $ 22,039.70 -2.42% $ 18,174.69 -0.74% $ 22,261.42
6/30/2002 6/30/02 20.13 -8.68% $ 20,126.80 -9.25% $ 17,175.08 -7.12% $ 20,527.26
7/31/2002 18.64 -7.41% $ 18,635.10 -5.50% $ 17,226.61 -7.79% $ 20,662.74
8/31/2002 18.56 -0.39% $ 18,562.90 0.30% $ 15,440.21 0.66% $ 18,416.70
9/30/2002 16.91 -8.88% $ 16,914.70 -10.37% $ 16,856.08 -10.87% $ 20,037.37
10/31/2002 18.47 9.17% $ 18,466.60 9.17% $ 17,771.36 8.80% $ 21,217.57
11/30/2002 19.30 4.50% $ 19,296.70 5.43% $ 16,543.36 5.89% $ 19,972.10
12/31/2002 18.05 -6.48% $ 18,045.60 -6.91% $ 16,141.36 -5.87% $ 19,448.83
1/31/2003 17.52 -2.93% $ 17,516.20 -2.43% $ 16,067.11 -2.62% $ 19,157.09
2/28/2003 17.32 -1.10% $ 17,323.70 -0.46% $ 16,365.95 -1.50% $ 19,342.92
3/31/2003 17.48 0.90% $ 17,480.10 1.86% $ 17,575.40 0.97% $ 20,936.77
4/30/2003 18.56 6.19% $ 18,562.90 7.39% $ 18,452.41 8.24% $ 22,040.14
5/31/2003 19.60 5.57% $ 19,597.50 4.99% $ 18,707.05 5.27% $ 22,322.26
6/30/2003 6/30/03 19.78 0.92% $ 19,777.90 1.38% $ 19,172.86 1.28% $ 22,715.13
7/31/2003 20.28 2.55% $ 20,283.20 2.49% $ 19,650.26 1.76% $ 23,158.07
8/31/2003 20.91 3.08% $ 20,908.80 2.49% $ 19,440.00 1.95% $ 22,912.60
9/30/2003 20.39 -2.47% $ 20,391.50 -1.07% $ 20,532.53 -1.06% $ 24,209.45
10/31/2003 21.64 6.14% $ 21,642.70 5.62% $ 20,748.12 5.66% $ 24,422.49
11/30/2003 21.82 0.83% $ 21,823.10 1.05% $ 21,466.01 0.88% $ 25,702.23
12/31/2003 22.22 1.82% $ 22,220.10 3.46% $ 21,903.92 5.24% $ 26,175.15
1/31/2004 22.35 0.60% $ 22,352.40 2.04% $ 22,044.10 1.84% $ 26,538.99
2/29/2004 22.28 -0.32% $ 22,280.30 0.64% $ 21,634.08 1.39% $ 26,138.25
3/31/2004 22.02 -1.19% $ 22,015.60 -1.86% $ 21,383.13 -1.51% $ 25,727.88
4/30/2004 21.40 -2.79% $ 21,402.00 -1.16% $ 21,780.85 -1.57% $ 26,080.35
5/31/2004 21.73 1.52% $ 21,726.90 1.86% $ 22,053.11 1.37% $ 26,586.31
6/30/2004 6/30/04 21.78 0.22% $ 21,775.00 1.25% $ 22,053.11 1.94% $ 26,586.31
In terms of sector performance, information technology was the largest
contributor to the fund's results and our largest overweight position relative
to the benchmark. In addition to Cisco, Qualcomm was a huge winner, as its share
price rose 104% in the 12-month period. Our holdings in semiconductor companies
Intel and Maxim Integrated Products also made significant contributions to the
fund's performance this year. However, despite these winners, the fund
underperformed the benchmark in this sector due to overall poor stock
selections. The sector's most significant detractor was Novell, a software
company with Internet security and Linux solutions. Novell's stock rose
significantly in the year, but our purchases were poorly timed, resulting in a
loss for the fund. We sold Novell from the portfolio shortly after the end of
the fiscal year. The industrial sector was the second most significant
contributor for the fund, although it underperformed versus the benchmark
primarily due to stock selection. Beyond 3M, we also had success with FedEx,
whose international business was exceptionally strong. No sector represented in
the portfolio lost money overall, but our two smallest contributors in absolute
terms were consumer discretionary, which suffered relative to the benchmark
because of poor stock selection, and materials, where socially rejected
companies in the mining industry not in the portfolio saw significant gains.
In the coming year we will continue to invest in high-quality large-cap
companies. New portfolio manager Jon White plans to seek companies that have
steady growth and de-emphasize the more cyclical companies. He also plans to
reduce the number of holdings in the fund in order to focus more on each name
and potentially benefit more from positive stock selection.
The S&P 500 Index is an unmanaged broad-based index that includes 500 of the
most widely held U.S. companies. Direct investment cannot be made in these
indices.
All index and fund performance figures assume reinvestment of dividends and
distributions. Index results do not include costs of investing, which would
lower performance.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Registered Public Accounting Firm.
11
PORTFOLIO REVIEW CITIZENS 300 FUND
GOAL
Long-term capital appreciation
STRATEGY
Invests mainly in stocks and other equities of U.S. large-capitalization
companies
INCEPTION DATE
Standard shares
08/29/03
TOTAL RETURNS (as of 6/30/2004)
Ticker Since
symbol inception
------ ---------
Standard shares CFCDX 11.71%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
are currently in effect and have been instituted in the past to maintain expense
limits, without which returns would have been lower. When you sell your fund
shares, they may be worth more or less than what you paid for them.
The Citizens 300 Fund started at the end of August 2003 and ended its first
fiscal year with a total return of 11.71%. During the same period the fund's
benchmark, the S&P 500 Index, returned 14.81%. The 300 Fund uses an index
strategy, holding companies in the Citizens Index - an index of approximately
300 companies selected to represent what we believe to be the best companies
within their respective industries - in a proportion equal to their market
weight. With this highly diversified strategy we seek to provide investors a
core holding in primarily U.S. domestic equities.
The fund's largest holdings typically affect return the most and fiscal 2004 was
no exception, with drug and network giants, Pfizer and Cisco, being the top two
contributors to positive performance. Other notable winners in the portfolio
were the wireless innovator Qualcomm and Yahoo, whose shares appreciated 75% and
118%, respectively, during the 10-month period ended June 30, 2004. The largest
detractor from performance was Viacom, which declined by 20% during the ten
months. Viacom, which owns some premier assets such as the CBS television
network, has struggled with an underperforming radio division. Amgen, a leading
biotech firm, also was a disappointment this year, declining by slightly more
than 17%. Amgen has a strong franchise, but the stock sold off on concerns about
Medicare reimbursements for its flagship products.
Beyond individual company performance, financial stocks were the largest sector
contributors, where the Citizens Index and the 300 Fund have the largest weight.
Our holdings within financials contributed nearly 2.7% of the return for the
period, with the diversified insurance company American International Group
making the largest contribution. It was the third highest performer for the fund
overall. Stocks within the health care sector were the second largest
contributors to performance. In addition to Pfizer, top names within this sector
were Johnson and Johnson and Zimmer Holdings, a spin-off of Bristol-Myers which
sells joint replacements and other orthopedic devices.
IMPORTANT NOTES
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The S&P 500 Index is an unmanaged broad-based index that includes 500 of the
most widely held U.S. companies. Direct investment cannot be made in this index
or the Citiizens Index.
All index and fund performance figures assume reinvestment of dividends and
distributions. Index results do not include costs of investing, which would
lower performance.
12
CITIZENS 300 FUND
[PERFORMANCE GRAPH]
CITIZENS 300 INDEX FUND
PERFORMANCE SINCE INCEPTION 8/29/03
DATE DATE NAV MONTHLY FUND RETURN FUND VALUE S&P 500 INDEX RETURN INDEX VALUE
8/29/2003 8/29/2003 10.00 $ 10,000.00 $10,000.00
9/30/2003 9/30/2003 9.89 -1.10% $ 9,890.00 -1.06% $10,566.00
10/31/2003 10/31/2003 10.49 6.07% $ 10,490.00 5.66% $10,658.98
11/30/2003 11/30/2003 10.58 0.86% $ 10,580.00 0.88% $11,217.51
12/31/2003 12/31/2003 10.98 3.79% $ 10,980.50 5.24% $11,423.91
1/31/2004 1/31/2004 11.12 1.28% $ 11,120.70 1.84% $11,582.71
2/29/2004 2/29/2004 11.20 0.72% $ 11,200.70 1.39% $11,407.81
3/31/2004 3/31/2004 11.08 -1.07% $ 11,080.60 -1.51% $11,228.70
4/30/2004 4/30/2004 10.89 -1.72% $ 10,890.40 -1.57% $11,382.54
5/31/2004 5/31/2004 11.04 1.38% $ 11,040.60 1.37% $11,603.36
6/30/2004 6/30/2004 11.17 1.18% $ 11,170.70 1.94% $11,603.36
No sector's performance in the portfolio was negative in absolute terms,
however, consumer discretionary was the lowest performing sector relative
to the benchmark. For its approximately 13.4% allocation of the portfolio,
this sector contributed just 0.39% to the fund's total return. In addition
to the weak performance of Viacom, the consumer discretionary sector of the
portfolio was also hurt by Kohl's, which declined based on difficulties in
the company's expansion strategy. In March Kohl's was removed from the
Citizens Index, and hence the 300 Fund as well, after it had declined 20%
in the 6 months we held it - but before it fell another 16% to close out
the fiscal year. Other underperforming sectors in the portfolio relative to
the benchmark included information technology and financials.
Looking forward, we remain positive about our fund's index strategy -
seeking to reinvest the largest proportion of assets in the companies
whose shares are rising and systematically invest proportionately less in
companies with declining values. We believe that following this strategy
and adhering to the selection of companies within the socially responsible
Citizens Index can be a smart way to participate in the large-cap universe
of stocks.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Registered Public Accounting Firm.
PORTFOLIO REVIEW CITIZENS SMALL CAP VALUE FUND
A portfolio review for the Citizens Small Cap Value Fund (inception 3/31/04) is
not available in this report. Portfolio holdings and financial information for
this fund are included in subsequent sections.
13
PORTFOLIO REVIEW CITIZENS VALUE FUND
GOAL
Long-term capital appreciation
STRATEGY
Invests mainly in stocks of U.S. large-capitalization companies
INCEPTION DATE
Standard shares
06/13/96
AVERAGE ANNUAL RETURNS (as of 6/30/2004)
Ticker 1 3 5 Since
symbol year years years inception
------ ---- ----- ----- ---------
Standard shares MYPVX 21.64% -8.27% 0.12% 7.57%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
have been instituted in the past to maintain expense limits, without which
returns would have been lower. When you sell your fund shares, they may be worth
more or less than what you paid for them.
Citizens Value Fund had a great fiscal year in 2004 returning 21.64% for its
shareholders, outperforming by over 250 basis points its benchmark - the S&P 500
Index - which returned 19.11%.
The fund's strategy of seeking financially strong companies whose shares are
selling at a discount to their industry peers was well rewarded. Good stock
picking in the consumer staples sector enabled this area to be among the fund's
top contributors. CVS, the drugstore chain, was one of the fund's largest
contributors, gaining over 50% during the 12-month period and delivering an
absolute return of almost 1% for the fund. The underlying business of CVS
continues to make progress, yet its valuation still remains below industry
averages, so it remains a current holding as of the end of the fiscal year.
IMPORTANT NOTES
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
The inception date of the Citizens Value Fund's predecessor, the Meyers Pride
Value Fund, is June 13, 1996. On September 24, 2001, the Meyers Pride Value Fund
contributed its portfolio securities in exchange for Standard shares in the
Citizens Value Fund. The performance shown includes performance of the Citizens
Value Fund's predecessor.
In absolute terms, the largest contributor to the portfolio was Intel, which
provided 1.2% of the fund's total return. At the start of the year Intel was
selling at a relative discount to its peers and it almost doubled in the period.
As Intel's shares rose, our strategy of automatically selling companies as they
approach the average valuation of industry peers enabled the portfolio to lock
in these gains. ConocoPhillips, an oil company with one of the better
environmental records, was another large contributor to performance.
ConocoPhillips sells at an attractive discount to socially rejected Exxon Mobil
and ChevronTexaco, making it a good fit for the portfolio's strategy. During the
fiscal year ConocoPhillips rose 43%, making it also one of the largest
contributors to the fund's performance. Despite the positive contributions of
Intel and ConocoPhillips, the information technology and energy sectors were our
poorest performers relative to the benchmark.
The largest detractors in the portfolio were disk drive maker Maxtor, and
pharmaceutical giant Merck. When we purchased Maxtor it was selling at a
significant
14
CITIZENS VALUE FUND
[PERFORMANCE GRAPH]
CITIZENS VALUE FUND
PERFORMANCE SINCE INCEPTION 06/13/96
DATE DATE NAV MONTHLY FUND RETURN FUND VALUE S&P 500 RETURN INDEX VALUE
6/13/96 6/13/96 10.00 $ 10,000.00 $ 10,000.00
6/30/1996 9.74 -2.60% $ 9,740.00 0.38% $ 10,038.00
7/31/1996 9.22 -5.34% $ 9,220.00 -4.42% $ 9,594.32
8/30/1996 9.50 3.04% $ 9,500.00 2.11% $ 9,796.76
9/30/1996 9.91 4.32% $ 9,910.00 5.63% $ 10,348.32
10/31/1996 9.89 -0.20% $ 9,890.00 2.76% $ 10,633.93
11/30/1996 10.88 10.01% $ 10,880.00 7.56% $ 11,437.86
12/31/1996 10.81 -0.64% $ 10,810.00 -1.98% $ 11,211.39
1/31/1997 11.33 4.81% $ 11,330.00 6.25% $ 11,912.10
2/28/97 11.66 2.91% $ 11,660.00 0.78% $ 12,005.01
3/31/1997 11.24 -3.60% $ 11,240.00 -4.11% $ 11,511.61
4/30/1997 11.38 1.25% $ 11,380.00 5.97% $ 12,198.85
5/31/1997 12.23 7.47% $ 12,230.00 6.09% $ 12,941.76
6/30/1997 6/30/97 12.35 0.98% $ 12,350.00 4.48% $ 13,521.55
7/31/1997 13.47 9.07% $ 13,470.00 7.96% $ 14,597.87
8/29/1997 13.21 -1.93% $ 13,210.00 -5.60% $ 13,780.39
09/30/97 13.58 2.80% $ 13,580.00 5.48% $ 14,535.55
10/31/1997 12.83 -5.52% $ 12,830.00 -3.34% $ 14,050.06
11/29/1997 12.90 0.55% $ 12,900.00 4.63% $ 14,700.58
12/31/1997 13.17 2.06% $ 13,165.70 1.72% $ 14,953.43
1/31/1998 13.47 2.33% $ 13,472.40 1.11% $ 15,119.42
2/28/1998 14.36 6.58% $ 14,358.50 7.21% $ 16,209.52
3/31/1998 14.78 2.93% $ 14,778.80 5.12% $ 17,039.45
4/30/1998 15.07 2.00% $ 15,074.10 1.01% $ 17,211.55
5/31/1998 14.74 -2.19% $ 14,744.70 -1.72% $ 16,915.51
6/30/1998 6/30/98 14.51 -1.62% $ 14,506.10 4.06% $ 17,602.28
7/31/1998 14.06 -3.05% $ 14,063.10 -1.06% $ 17,415.70
8/31/1998 11.56 -17.77% $ 11,564.00 -14.46% $ 14,897.39
9/30/1998 12.30 6.39% $ 12,302.40 6.41% $ 15,852.31
10/31/1998 13.45 9.33% $ 13,449.70 8.13% $ 17,141.10
11/30/1998 14.56 8.28% $ 14,562.90 6.06% $ 18,179.85
12/31/1998 14.96 2.71% $ 14,957.00 5.76% $ 19,227.01
1/31/1999 14.71 -1.62% $ 14,714.40 4.18% $ 20,030.70
2/28/1999 14.08 -4.29% $ 14,083.60 -3.11% $ 19,407.75
3/31/1999 14.94 6.12% $ 14,944.90 4.00% $ 20,184.06
4/30/1999 16.51 10.47% $ 16,509.70 3.87% $ 20,965.18
5/31/1999 17.02 3.09% $ 17,019.20 -2.36% $ 20,470.40
6/30/1999 6/30/99 17.89 5.13% $ 17,892.60 5.55% $ 21,606.51
7/31/1999 17.82 -0.41% $ 17,819.80 -3.12% $ 20,932.39
8/31/1999 17.24 -3.27% $ 17,237.50 -0.49% $ 20,829.82
9/30/1999 16.61 -3.66% $ 16,606.80 -2.74% $ 20,259.08
10/31/1999 16.90 1.75% $ 16,897.90 6.33% $ 21,541.48
11/30/1999 18.65 10.36% $ 18,648.20 2.03% $ 21,978.77
12/31/1999 19.20 2.93% $ 19,195.50 5.89% $ 23,273.32
1/31/2000 18.73 -2.43% $ 18,728.30 -5.02% $ 22,105.00
2/29/2000 18.02 -3.78% $ 18,020.80 -1.89% $ 21,687.22
3/31/2000 19.42 7.78% $ 19,422.50 9.78% $ 23,808.23
4/30/2000 18.81 -3.16% $ 18,808.40 -3.01% $ 23,091.60
5/31/2000 19.46 3.48% $ 19,462.50 -2.05% $ 22,618.22
6/30/2000 6/30/00 19.21 -1.30% $ 19,208.90 2.47% $ 23,176.89
7/31/2000 18.88 -1.74% $ 18,875.20 -1.56% $ 22,815.33
8/31/2000 20.78 10.11% $ 20,784.00 6.21% $ 24,232.16
9/30/2000 19.93 -4.11% $ 19,929.70 -5.28% $ 22,952.71
10/31/2000 20.04 0.54% $ 20,036.50 -0.42% $ 22,856.31
11/30/2000 18.52 -7.59% $ 18,515.40 -7.88% $ 21,055.23
12/31/2000 19.16 3.49% $ 19,160.70 0.49% $ 21,158.40
1/31/2001 22.62 18.04% $ 22,617.90 3.55% $ 21,909.52
2/28/2001 20.82 -7.95% $ 20,820.20 -9.12% $ 19,911.37
3/31/2001 20.17 -3.10% $ 20,174.80 -6.34% $ 18,648.99
4/30/2001 22.34 10.74% $ 22,341.40 7.77% $ 20,098.02
5/31/2001 23.49 5.16% $ 23,493.80 0.67% $ 20,232.68
6/30/2001 6/30/01 23.32 -0.72% $ 23,324.70 -2.43% $ 19,741.02
7/31/2001 22.85 -2.04% $ 22,848.40 -0.98% $ 19,547.56
8/31/2001 21.40 -6.32% $ 21,404.10 -6.26% $ 18,323.88
9/30/2001 19.28 -9.91% $ 19,283.60 -8.08% $ 16,843.31
10/31/2001 19.53 1.28% $ 19,529.50 1.91% $ 17,165.02
11/30/2001 21.82 11.72% $ 21,818.90 7.67% $ 18,481.58
12/31/2001 21.73 -0.41% $ 21,730.10 0.88% $ 18,644.22
1/31/2002 20.77 -4.41% $ 20,771.20 -1.46% $ 18,372.01
2/28/2002 18.89 -9.07% $ 18,887.60 -1.93% $ 18,017.43
3/31/2002 19.95 5.62% $ 19,949.30 3.76% $ 18,694.89
4/30/2002 18.00 -9.79% $ 17,997.10 -6.06% $ 17,561.98
5/31/2002 17.48 -2.85% $ 17,483.40 -0.74% $ 17,432.02
6/30/2002 6/30/02 14.97 -14.40% $ 14,966.20 -7.12% $ 16,190.86
7/31/2002 13.08 -12.59% $ 13,082.60 -7.79% $ 14,929.59
8/31/2002 13.27 1.44% $ 13,271.00 0.66% $ 15,028.12
9/30/2002 11.34 -14.58% $ 11,336.00 -10.87% $ 13,394.57
10/31/2002 12.86 13.44% $ 12,860.00 8.80% $ 14,573.29
11/30/2002 14.18 10.25% $ 14,178.50 5.89% $ 15,431.66
12/31/2002 12.93 -8.82% $ 12,928.50 -5.87% $ 14,525.82
1/31/2003 12.74 -1.46% $ 12,740.10 -2.62% $ 14,145.24
2/28/2003 12.40 -2.69% $ 12,397.60 -1.50% $ 13,933.06
3/31/2003 12.50 0.83% $ 12,500.40 0.97% $ 14,068.21
4/30/2003 13.53 8.22% $ 13,527.80 8.24% $ 15,227.43
5/31/2003 14.74 8.99% $ 14,743.60 5.27% $ 16,029.92
6/30/2003 6/30/03 14.80 0.35% $ 14,795.00 1.28% $ 16,235.10
7/31/2003 15.12 2.20% $ 15,120.30 1.76% $ 16,520.84
8/31/2003 15.60 3.17% $ 15,599.80 1.95% $ 16,843.00
9/30/2003 15.31 -1.87% $ 15,308.70 -1.06% $ 16,664.46
10/31/2003 16.32 6.60% $ 16,319.00 5.66% $ 17,607.67
11/30/2003 16.61 1.78% $ 16,610.10 0.88% $ 17,762.62
12/31/2003 17.26 3.92% $ 17,260.80 5.24% $ 18,693.38
1/31/2004 17.50 1.39% $ 17,500.50 1.84% $ 19,037.34
2/29/2004 17.83 1.86% $ 17,825.90 1.39% $ 19,301.96
3/31/2004 17.79 -0.19% $ 17,791.70 -1.51% $ 19,010.50
4/30/2004 17.36 -2.41% $ 17,363.60 -1.57% $ 18,712.03
5/31/2004 17.60 1.38% $ 17,603.30 1.37% $ 18,968.39
6/30/2004 6/30/04 18.00 2.24% $ 17,997.10 1.94% $ 19,336.37
discount to peers, but news of falling profits within the disk drive industry
spooked Wall Street and the value of the stock's shares fell by almost 12%
during the 12-month period. Realizing the investment was a mistake, we sold the
position in May and took a loss. Merck, whose stock price declined by
approximately 16% during the time we held it, remains a current holding because
we believe the sentiment on the company is overly negative. It seems to us that
investors are concerned that Merck has too few new drugs in its pipeline and
that in future years the company's profits will decline as its patents expire
and generic replacements come on the market. Our view is that Merck is in the
process of a multi-year turnaround and, with almost $10 billion in annual cash
flow and enormous distribution strength, has a wide range of strategic options
that are under-appreciated on Wall Street. Of course, time will tell and we will
watch Merck carefully.
In the coming year we will continue to follow the quality relative value
strategy that is the hallmark of Citizens Value Fund. We will look for companies
whose shares are selling at an attractive discount to industry peers and have
sufficient assets, as well as a catalyst for fundamental improvement.
The S&P 500 Index is an unmanaged broad-based index that includes 500 of the
most widely held U.S. companies. Direct investment cannot be made in this index.
All index and fund performance figures assume reinvestment of dividends and
distributions. Index results do not include costs of investing, which would
lower performance.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Registered Public Accounting Firm.
15
PORTFOLIO REVIEW CITIZENS GLOBAL EQUITY FUND
GOAL
Capital appreciation
STRATEGY
Invests mainly in stocks of foreign and U.S. companies
INCEPTION DATES
Standard shares 02/08/94
Institutional shares 11/01/99
Administrative shares 02/04/00
AVERAGE ANNUAL RETURNS (as of 6/30/2004)
Ticker 1 3 5 10 Since
symbol year years years years inception
------ ---- ----- ----- ----- ---------
Standard shares WAGEX 13.37% -6.05% -3.36% 6.55% 6.09%
Institutional shares CGEIX 14.14% -5.49% N/A N/A -6.10%
Administrative shares CEADX 13.69% -5.80% N/A N/A -14.60%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
have been instituted in the past to maintain expense limits, without which
returns would have been lower. When you sell your fund shares, they may be worth
more or less than what you paid for them.
Conditions in global equity markets differed sharply in the first and second
half of fiscal 2004. The first period saw markets rally sharply from oversold
levels, reacting to the stimulus provided by a worldwide easing in interest
rates. Moving into the second half, price action became far more volatile,
reflecting investors' uncertainty about the extent of the forthcoming recovery.
Since the Madrid train bombing, the ever-present threat of terrorist activity,
combined with the new reality of hikes in administered interest rates and the
stirrings of inflation (given credence largely by a rise in the price of oil and
other commodities), have limited the extent of progress in the securities
markets. This pessimistic mood has remained deep-seated, despite the scarcity of
data to support it. In the last months of the fiscal year, most companies
reported better-than-expected earnings. At the macro level there is little
evidence to suggest either that growth is sufficiently strong to cause inflation
to rise at a threatening pace, or that the monetary tightening already embarked
upon will need to be anything other than measured.
By June 30, the MSCI World Index (the fund's benchmark index) had risen 24.00%
for the fiscal year - almost all of the gain registered in the first six months.
Citizens Global Equity Fund (Standard shares) generated a return of 13.37% over
the same period.
Major changes in policy in the year included a shift from Europe into Japan,
where we believe the fledgling economic recovery will continue to progress. This
involved taking profits in some of our long-established successful positions in
banks like UBS and Royal Bank of Scotland to move into Japanese equivalents such
as Mitsubishi-Tokyo Finance. Similarly, within the consumer sector we liquidated
positions in the likes of Tesco to move into Seven Eleven Japan.
IMPORTANT NOTES
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
Investments in the Citizens Global Equity Fund involve risks of investing in
foreign markets, including political instability and currency risks, excessive
taxation, different financial and auditing standards, increased market
volatility and other factors.
16
CITIZENS GLOBAL EQUITY FUND
[PERFORMANCE GRAPH]
CITIZENS GLOBAL EQUITY FUND - STANDARD SHARES
PERFORMANCE SINCE INCEPTION 02/08/94
DATE DATE NAV MONTHLY FUND RETURN FUND VALUE MSCI WORLD INDEX RETURN INDEX VALUE
2/8/94 2/8/94 10.00 $ 10,000.00 $ 10,000.00
2/28/1994 10.00 0.00% $ 10,000.00 0.89% $ 10,089.00
3/31/1994 10.00 0.00% $ 10,000.00 -4.33% $ 9,652.15
4/30/1994 10.00 0.00% $ 10,000.00 3.07% $ 9,948.47
5/31/1994 9.88 -1.20% $ 9,880.00 0.23% $ 9,971.35
6/30/1994 6/30/94 9.80 -0.81% $ 9,800.00 -0.30% $ 9,941.43
7/31/1994 9.99 1.94% $ 9,990.00 1.88% $ 10,128.33
8/31/1994 10.07 0.80% $ 10,070.00 2.99% $ 10,431.17
9/30/1994 10.00 -0.70% $ 10,000.00 -2.65% $ 10,154.74
10/31/1994 10.17 1.70% $ 10,170.00 2.82% $ 10,441.11
11/30/1994 9.68 -4.82% $ 9,680.00 -4.36% $ 9,985.88
12/31/1994 9.73 0.53% $ 9,731.40 0.94% $ 10,079.74
1/31/1995 9.40 -3.41% $ 9,399.30 -1.53% $ 9,925.52
2/28/1995 9.64 2.57% $ 9,640.80 1.43% $ 10,067.46
3/31/1995 9.87 2.40% $ 9,872.30 4.80% $ 10,550.70
4/30/1995 10.15 2.85% $ 10,154.10 3.46% $ 10,915.75
5/31/1995 10.62 4.56% $ 10,617.00 0.83% $ 11,006.35
6/30/1995 6/30/95 10.76 1.33% $ 10,757.90 -0.05% $ 11,000.85
7/31/1995 11.18 3.93% $ 11,180.50 4.98% $ 11,548.69
8/31/1995 10.78 -3.60% $ 10,778.00 -2.25% $ 11,288.84
9/30/1995 11.09 2.89% $ 11,090.00 2.89% $ 11,615.09
10/31/1995 10.94 -1.36% $ 10,939.00 -1.60% $ 11,429.25
11/30/1995 10.92 -0.18% $ 10,918.90 3.45% $ 11,823.56
12/31/1995 11.07 1.37% $ 11,068.60 2.90% $ 12,166.44
1/31/1996 11.44 3.31% $ 11,435.20 1.79% $ 12,384.22
2/26/1996 11.38 -0.45% $ 11,384.30 0.59% $ 12,457.29
3/31/1996 11.47 0.72% $ 11,465.80 1.64% $ 12,661.59
4/30/1996 11.96 4.35% $ 11,964.70 2.33% $ 12,956.60
5/31/1996 11.96 0.00% $ 11,964.70 0.07% $ 12,965.67
6/30/1996 6/30/96 12.11 1.19% $ 12,107.30 0.49% $ 13,029.21
7/31/1996 11.73 -3.11% $ 11,730.50 -3.55% $ 12,566.67
8/30/1996 11.92 1.65% $ 11,924.00 1.13% $ 12,708.67
9/30/1996 12.28 2.99% $ 12,280.40 3.89% $ 13,203.04
10/31/1996 12.25 -0.25% $ 12,249.80 0.68% $ 13,292.82
11/30/1996 12.68 3.49% $ 12,677.50 5.58% $ 14,034.56
12/31/1996 12.52 -1.20% $ 12,524.80 -1.62% $ 13,807.20
1/31/1997 13.00 3.82% $ 13,003.40 1.19% $ 13,971.51
2/28/97 13.00 0.00% $ 13,003.40 1.13% $ 14,129.38
3/31/1997 12.88 -0.94% $ 12,881.20 -2.00% $ 13,846.80
4/30/1997 13.22 2.61% $ 13,217.20 3.25% $ 14,296.82
5/31/1997 14.16 7.16% $ 14,164.20 6.15% $ 15,176.07
6/30/1997 6/30/97 14.73 4.03% $ 14,734.40 4.97% $ 15,930.32
7/31/1997 15.57 5.67% $ 15,569.40 4.59% $ 16,661.52
8/29/1997 14.56 -6.47% $ 14,561.30 -6.71% $ 15,543.53
09/30/97 15.50 6.43% $ 15,498.10 5.42% $ 16,385.99
10/31/1997 14.43 -6.90% $ 14,428.90 -5.28% $ 15,520.81
11/29/1997 14.66 1.62% $ 14,663.10 1.75% $ 15,792.43
12/31/1997 15.02 2.42% $ 15,018.30 1.20% $ 15,981.94
1/31/1998 15.35 2.18% $ 15,346.40 2.77% $ 16,424.64
2/28/1998 16.44 7.10% $ 16,436.60 6.75% $ 17,533.30
3/31/1998 16.96 3.16% $ 16,955.20 4.21% $ 18,271.45
4/30/1998 17.29 2.00% $ 17,293.80 0.96% $ 18,446.86
5/31/1998 17.21 -0.49% $ 17,209.20 -1.27% $ 18,212.58
6/30/1998 6/30/98 17.94 4.24% $ 17,939.40 2.36% $ 18,642.40
7/31/1998 19.27 7.43% $ 19,273.00 -0.18% $ 18,608.84
8/31/1998 16.39 -14.94% $ 16,394.20 -13.35% $ 16,124.56
9/30/1998 16.09 -1.87% $ 16,087.30 1.75% $ 16,406.74
10/31/1998 17.07 6.12% $ 17,071.60 9.02% $ 17,886.63
11/30/1998 18.14 6.26% $ 18,140.50 5.93% $ 18,947.31
12/31/1998 19.86 9.49% $ 19,862.50 4.87% $ 19,870.04
1/31/1999 21.12 6.34% $ 21,121.60 2.18% $ 20,303.21
2/28/1999 20.61 -2.42% $ 20,611.40 -2.67% $ 19,761.11
3/31/1999 21.36 3.63% $ 21,360.30 4.15% $ 20,581.20
4/30/1999 21.32 -0.20% $ 21,316.90 3.93% $ 21,390.04
5/31/1999 20.34 -4.58% $ 20,340.10 -3.67% $ 20,605.03
6/30/1999 6/30/99 21.95 7.90% $ 21,946.50 4.65% $ 21,563.16
7/31/1999 22.45 2.27% $ 22,445.70 -0.31% $ 21,496.31
8/31/1999 22.93 2.18% $ 22,934.20 -0.19% $ 21,455.47
9/30/1999 23.67 3.22% $ 23,672.20 -0.98% $ 21,245.21
10/31/1999 25.43 7.43% $ 25,430.50 5.18% $ 22,345.71
11/30/1999 29.24 14.98% $ 29,240.20 2.80% $ 22,971.39
12/31/1999 34.58 18.26% $ 34,578.50 8.08% $ 24,827.48
1/31/2000 34.13 -1.30% $ 34,129.90 -5.74% $ 23,402.38
2/29/2000 40.21 17.81% $ 40,208.90 0.26% $ 23,463.23
3/31/2000 38.71 -3.74% $ 38,706.00 6.90% $ 25,082.19
4/30/2000 35.20 -9.07% $ 35,195.40 -4.24% $ 24,018.70
5/31/2000 32.38 -8.00% $ 32,380.20 -2.54% $ 23,408.63
6/30/2000 6/30/00 33.65 3.91% $ 33,647.60 3.35% $ 24,192.82
7/31/2000 33.37 -0.83% $ 33,367.20 -2.83% $ 23,508.16
8/31/2000 35.05 5.04% $ 35,049.60 3.24% $ 24,269.83
9/30/2000 32.45 -7.42% $ 32,447.50 -5.33% $ 22,976.24
10/31/2000 30.91 -4.74% $ 30,910.90 -1.69% $ 22,587.95
11/30/2000 27.69 -10.41% $ 27,692.00 -6.08% $ 21,214.60
12/31/2000 27.88 0.68% $ 27,881.40 1.60% $ 21,554.03
1/31/2001 28.25 1.31% $ 28,247.00 1.93% $ 21,970.02
2/28/2001 24.43 -13.50% $ 24,432.80 -8.46% $ 20,111.36
3/31/2001 22.04 -9.78% $ 22,044.30 -6.59% $ 18,786.02
4/30/2001 23.84 8.13% $ 23,835.70 7.37% $ 20,170.55
5/31/2001 23.31 -2.20% $ 23,311.70 -1.30% $ 19,908.33
6/30/2001 6/30/01 22.31 -4.29% $ 22,312.40 -3.15% $ 19,281.22
7/31/2001 21.28 -4.64% $ 21,276.60 -1.34% $ 19,022.85
8/31/2001 20.17 -5.21% $ 20,167.70 -4.81% $ 18,107.85
9/30/2001 18.19 -9.79% $ 18,193.60 -8.82% $ 16,510.74
10/31/2001 18.52 1.81% $ 18,522.60 1.91% $ 16,826.10
11/30/2001 19.56 5.59% $ 19,558.40 5.90% $ 17,818.84
12/31/2001 19.79 1.18% $ 19,789.90 0.62% $ 17,929.31
1/31/2002 18.96 -4.19% $ 18,961.30 -3.04% $ 17,384.26
2/28/2002 18.52 -2.31% $ 18,522.60 -0.88% $ 17,231.28
3/31/2002 19.30 4.21% $ 19,302.50 4.40% $ 17,989.46
4/30/2002 18.63 -3.47% $ 18,632.30 -3.40% $ 17,377.82
5/31/2002 18.51 -0.65% $ 18,510.40 0.17% $ 17,407.36
6/30/2002 6/30/02 17.33 -6.39% $ 17,328.40 -6.08% $ 16,348.99
7/31/2002 15.90 -8.23% $ 15,902.60 -8.44% $ 14,969.14
8/31/2002 15.88 -0.15% $ 15,878.30 0.17% $ 14,994.58
9/30/2002 14.31 -9.90% $ 14,306.30 -11.01% $ 13,343.68
10/31/2002 15.76 10.14% $ 15,756.40 7.37% $ 14,327.11
11/30/2002 16.43 4.25% $ 16,426.60 5.38% $ 15,097.91
12/31/2002 15.55 -5.34% $ 15,549.20 -4.86% $ 14,364.15
1/31/2003 14.90 -4.15% $ 14,903.40 -3.05% $ 13,926.04
2/28/2003 14.75 -1.06% $ 14,745.00 -1.75% $ 13,682.34
3/31/2003 14.42 -2.23% $ 14,416.00 -0.33% $ 13,637.18
4/30/2003 15.54 7.78% $ 15,537.10 8.86% $ 14,845.44
5/31/2003 16.27 4.71% $ 16,268.20 5.69% $ 15,690.15
6/30/2003 6/30/03 16.32 0.30% $ 16,317.00 1.72% $ 15,960.02
7/31/2003 16.66 2.09% $ 16,658.20 2.02% $ 16,282.41
8/31/2003 17.01 2.12% $ 17,011.60 2.15% $ 16,632.48
9/30/2003 16.71 -1.79% $ 16,706.90 0.60% $ 16,732.27
10/31/2003 17.51 4.81% $ 17,511.20 5.92% $ 17,722.83
11/30/2003 17.99 2.71% $ 17,986.40 1.51% $ 17,990.44
12/31/2003 18.90 5.08% $ 18,900.40 6.27% $ 19,118.44
1/31/2004 19.12 1.16% $ 19,119.70 1.60% $ 19,424.34
2/29/2004 19.21 0.45% $ 19,205.00 1.67% $ 19,748.72
3/31/2004 18.73 -2.47% $ 18,729.80 -0.66% $ 19,618.38
4/30/2004 18.22 -2.73% $ 18,218.00 -1.38% $ 19,347.65
5/31/2004 18.32 0.53% $ 18,315.40 0.22% $ 19,390.21
6/30/2004 6/30/04 18.50 1.00% $ 18,498.20 2.05% $ 19,787.71
One of our major themes was our exposure to industrials and materials stocks in
recognition of their defensive qualities as a late-cycle play. Holdings in these
areas contributed positively overall, with names like Komatsu and Ingersoll-Rand
both up by around 50% on the year. Our overweight versus the benchmark to health
care was neutral overall but nevertheless boosted by our best-performing stock,
Invitrogen. Other stand-outs in terms of performance from the IT area included
SAP, Cisco and Applied Materials.
Unfortunately, gains among these tech holdings were more than offset by
disappointing performance from other parts of the sector. Semiconductor stocks
such as Taiwan Semiconductor, where we had a sizeable overweight for much of the
year, were disappointing despite strong fundamentals. So were telecoms as a
whole, with both SBC and NTT DoCoMo languishing. Within financials, stock
performance was highly idiosyncratic: some of our global investment banking
names did well, like UBS and ING, while others such as Marsh McLennan, were hit
by specific news.
As mentioned above, our view is that investors are currently overwhelmed by
short-term fear. To the extent that the Federal Reserve is intent on nurturing
steady growth via gradual adjustments, we believe we are entering an environment
in which our favored high-quality companies will start to move ahead.
Accordingly, we are looking to maintain our overweight to sectors such as health
care, which we believe offers good examples of companies with stable earnings
and good management. We will also be holding our tech positions in expectation
of a rebound in the first half of fiscal 2005.
The Morgan Stanley Capital International (MSCI) World Index is an unmanaged
market capitalization weighted equity index of over 1,500 stocks traded in 22
world markets. Direct investment cannot be made in this index.
All index and fund performance figures assume reinvestment of dividends and
distributions. Index results do not include costs of investing, which would
lower performance.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Registered Public Accounting Firm.
17
PORTFOLIO REVIEW CITIZENS BALANCED FUND
GOAL
Current income and capital appreciation
STRATEGY
Invests in a blend of stocks, bonds, and money market securities
INCEPTION DATE
Standard shares
12/20/02
AVERAGE ANNUAL RETURNS (as of 6/30/2004)
Ticker 1 Since
symbol year inception
------ ---- ---------
Standard shares CFBLX 11.31% 10.65%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
are currently in effect and have been instituted in the past to maintain expense
limits, without which returns would have been lower. When you sell your fund
shares, they may be worth more or less than what you paid for them.
The Citizens Balanced Fund welcomed new co-manager Jonathan White, CFA, on July
1, 2004. Jon, who manages the equity portion of the Balanced Fund, joins
co-manager Susan Kelly, who has managed the fixed-income portion of the fund
since its inception.
During fiscal 2004, the Citizens Balanced Fund returned 11.31% for its
shareholders, nearly matching the 11.36% recorded by its benchmark, which is a
Blended Index comprised of 60% S&P 500 Index and 40% Lehman Brothers U.S.
Aggregate Index. Since its inception, we have gradually increased the fund's
allocation to equities, but this climb is now leveling off. As of June 30, 2004,
74.2% of the portfolio was in equities, compared to last year's level of 68.4%.
With regard to the equity portion of the portfolio, our holdings in the
information technology sector made the biggest contribution to overall return
and also posted the best performance versus the S&P 500 Index. The fund
benefited from being overweight and making good picks in this sector. Indeed, IT
stocks were the fund's top five contributors, as Intel, Cisco, Flextronics and
Analog Devices each contributed approximately 1% to the fund's total return, and
Symantec alone added over 1.5%. Our second-largest sector position was in
financials, which as a sector contributed the second best return to the fund.
However, poor overall stock selection caused this sector to fare the poorest
relative to the benchmark. No sector returned a loss for the fund, although our
holdings in the materials and utilities sectors, in which we were underweight,
posted the smallest returns.
IMPORTANT NOTES
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
Interest rate increases can cause the value of bonds to decrease, meaning that a
bond fund investment may lose value in a rising interest rate environment.
Junk bonds offer the potential for higher returns but present significant
volatility and risk of loss of principal and interest.
The fixed-income portion of the portfolio underperformed the Lehman Brothers
U.S. Aggregate Index. Our overweight of corporate bonds versus the benchmark
during the year contributed to the lagging performance, as did being underweight
in the mortgage sector. A massive reversal of interest rates for 5-year and
10-year Treasury notes put pressure on credit spreads, even though corporate
bonds were supported by stellar earnings and improved credit quality. Our
high-yield corporate holdings ("junk
18
CITIZENS BALANCED FUND
[PERFORMANCE GRAPH]
CITIZENS BALANCED FUND
PERFORMANCE SINCE INCEPTION 12/20/02
DATE DATE NAV MONTHLY FUND RETURN FUND VALUE BLENDED INDEX RETURN INDEX VALUE
- ---- ---- --- ------------------- ---------- -------------------- -----------
12/20/02 12/20/2002 10.00 $ 10,000.00 $10,000.00
12/31/2002 12/31/2002 9.96 -0.40% $ 9,960.00 -3.49% $ 9,846.00
1/31/2003 9.72 -2.41% $ 9,720.00 -1.54% $ 9,811.54
2/28/2003 9.70 -0.21% $ 9,700.00 -0.35% $ 9,865.50
3/31/2003 3/31/2003 9.74 0.36% $ 9,735.30 0.55% $10,385.41
4/30/2003 10.10 3.70% $ 10,095.50 5.27% $10,791.48
5/31/2003 10.47 3.67% $ 10,465.70 3.91% $10,865.95
6/30/2003 6/30/2003 10.49 0.21% $ 10,487.30 0.69% $10,834.43
7/31/2003 10.62 1.24% $ 10,617.50 -0.29% $10,990.45
8/31/2003 10.81 1.79% $ 10,807.90 1.44% $11,036.61
9/30/2003 9/30/2003 10.77 -0.38% $ 10,767.30 0.42% $11,369.92
10/31/2003 11.20 4.00% $ 11,198.40 3.02% $11,440.41
11/30/2003 11.37 1.52% $ 11,368.80 0.62% $11,846.54
12/31/2003 12/31/2003 11.59 1.97% $ 11,592.30 3.55% $12,014.76
1/31/2004 11.68 0.80% $ 11,684.50 1.42% $12,167.35
2/29/2004 11.77 0.70% $ 11,766.50 1.27% $12,093.13
3/31/2004 3/31/2004 11.71 -0.51% $ 11,706.10 -0.61% $11,853.69
4/30/2004 11.50 -1.75% $ 11,500.90 -1.98% $11,931.92
5/31/2004 11.62 1.07% $ 11,624.00 0.66% $12,097.78
6/30/2004 6/30/04 11.67 0.42% $ 11,672.90 1.39% $12,097.78
bonds") continued to outperform versus the benchmark. Notable performers were
Domino's Pizza, Nextel Communications, Flextronics and The Gap. In the last
year, high-yield outperformed investment-grade corporate bonds. We believe the
outlook looks stable for the corporate bond market heading into fiscal 2005.
Volatility is lower and supply of bonds is one-third less than last year.
Decreased volatility and corporate supply are positive factors for the corporate
bond market going forward.
Going into fiscal 2005, we expect to continue our overweight position in
equities relative to the benchmark, as we believe the equity markets will
continue to offer the most attractive returns. New co-manager Jon White will
reduce the number of equity holdings and continue the fund's focus on
high-quality, steadily growing companies.
The S&P 500 Index is an unmanaged broad-based index that includes 500 of the
most widely held U.S. companies. The Lehman Brothers U.S. Aggregate Index is an
unmanaged index of taxable, investment grade fixed-income securities, including
government, corporate, mortgage, and asset-backed securities. Direct investment
cannot be made in these indices.
All index and fund performance figures assume reinvestment of dividends and
distributions. Index results do not include costs of investing, which would
lower performance.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Registered Public Accounting Firm.
19
PORTFOLIO REVIEW CITIZENS INCOME FUND
GOAL
Current income and monthly dividend payment
STRATEGY
Invests mainly in bonds and mortgage-backed securities
INCEPTION DATE
Standard shares
06/10/92
AVERAGE ANNUAL RETURNS (as of 6/30/2004)
Ticker 1 3 5 10 Since
years year years years years inception
----- ---- ----- ----- ----- ---------
Standard shares WAIMX -0.63% 3.11% 4.09% 5.67% 5.59%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
have been instituted in the past to maintain expense limits, without which
returns would have been lower. When you sell your fund shares, they may be worth
more or less than what you paid for them.
Improving economic indicators helped set a positive tone for the corporate bond
market in the 12-month period ended June 30, 2004, while better-than-expected
economic data caused a significant rise in interest rates in the beginning of
2004. In a reverse from a year ago, where declining interest rates dragged down
yields but boosted total return for shareholders, the past year has seen higher
yields and lower total returns on bond fund investments. Corporate bonds have
had negative excess returns four out of the final six months of the fiscal year
and the quarter ended June 30, 2004 was the worst performing quarter ever for
fixed-income funds.
For the fiscal year ended June 30, 2004, the Citizens Income Fund returned
- -0.63%, underperforming its benchmark, the Lehman Brothers U.S. Aggregate Index,
which returned 0.32%. The underperformance can be attributed mainly to our
overweight of corporate bonds versus the benchmark during this time period. In
addition, being underweight versus the benchmark in the mortgage sector hurt us
a bit as well.
The Treasury market moved substantially during the year because of positive job
reports, increased consumer confidence and positive increases in gross domestic
product (GDP). The yield on 5-year Treasury notes increased 136 basis points and
the yield on 10-year Treasury notes rose 107 basis points. As interest rates
move higher, the prices of fixed-income securities typically move lower,
creating a challenging scenario for bond fund managers. Although corporate bonds
were supported by improvement in credit quality and stellar first quarter
earnings, credit spreads were under pressure from the massive reversal of
interest rates.
The exception to that theme was the high yield market. Our high yield corporate
holdings (commonly known as "junk bonds") continued to outperform versus the
benchmark, including Domino's Pizza, Nextel Communications, Flextronics and The
Gap. There was a meaningful tightening of spreads on the lower part of the
credit curve in the last year.
IMPORTANT NOTES
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
Interest rate increases can cause the value of bonds to decrease, meaning that a
bond fund investment may lose value in a rising interest rate environment.
Junk bonds offer the potential for higher returns but present significant
volatility and risk of loss of principal and interest.
20
CITIZENS INCOME FUND
[PERFORMANCE GRAPH]
CITIZENS INCOME FUND
PERFORMANCE SINCE INCEPTION 06/10/92
DATE DATE NAV MONTHLY FUND RETURN FUND VALUE LEHMAN AGGREGATE INDEX RETURN INDEX VALUE
---- ---- --- ------------------- ---------- ----------------------------- -----------
6/10/92 6/10/92 10.00 $ 10,000.00 $ 10,000.00
6/30/1992 10.08 0.80% $ 10,080.00 1.17% $ 10,117.00
7/31/1992 10.29 2.08% $ 10,290.10 2.04% $ 10,323.39
8/31/1992 10.37 0.81% $ 10,373.30 1.01% $ 10,427.65
9/30/1992 10.52 1.39% $ 10,517.20 1.19% $ 10,551.74
10/31/1992 10.32 -1.87% $ 10,320.30 -1.33% $ 10,411.40
11/30/1992 10.27 -0.52% $ 10,266.60 0.02% $ 10,413.49
12/31/1992 10.42 1.49% $ 10,419.20 1.59% $ 10,579.06
1/31/1993 10.62 1.92% $ 10,619.30 1.92% $ 10,782.18
2/28/1993 10.83 1.97% $ 10,828.40 1.75% $ 10,970.87
3/31/1993 10.85 0.24% $ 10,854.10 0.42% $ 11,016.94
4/30/1993 10.92 0.60% $ 10,919.30 0.70% $ 11,094.06
5/31/1993 10.88 -0.33% $ 10,882.90 0.13% $ 11,108.49
6/30/1993 6/30/93 11.10 1.95% $ 11,095.60 1.81% $ 11,309.55
7/31/1993 11.14 0.43% $ 11,142.80 0.57% $ 11,374.01
8/31/1993 11.34 1.73% $ 11,335.20 1.75% $ 11,573.06
9/30/1993 11.38 0.40% $ 11,380.50 0.27% $ 11,604.31
10/31/1993 11.45 0.60% $ 11,449.30 0.37% $ 11,647.24
11/30/1993 11.36 -0.80% $ 11,357.80 -0.85% $ 11,548.24
12/31/1993 11.46 0.87% $ 11,456.80 0.54% $ 11,610.60
1/31/1994 11.59 1.13% $ 11,585.90 1.35% $ 11,767.34
2/28/1994 11.39 -1.66% $ 11,393.70 -1.74% $ 11,562.59
3/31/1994 11.20 -1.69% $ 11,200.70 -2.47% $ 11,277.00
4/30/1994 11.09 -1.02% $ 11,086.30 -0.80% $ 11,186.78
5/31/1994 11.10 0.09% $ 11,096.10 -0.01% $ 11,185.66
6/30/1994 6/30/94 11.10 0.00% $ 11,096.10 -0.22% $ 11,161.05
7/31/1994 11.23 1.18% $ 11,226.60 1.99% $ 11,383.16
8/31/1994 11.26 0.33% $ 11,263.20 0.12% $ 11,396.82
9/30/1994 11.18 -0.77% $ 11,176.10 -1.47% $ 11,229.28
10/31/1994 11.14 -0.35% $ 11,136.90 -0.09% $ 11,219.18
11/30/1994 11.05 -0.75% $ 11,053.40 -0.22% $ 11,194.50
12/31/1994 11.10 0.46% $ 11,104.20 0.69% $ 11,271.74
1/31/1995 11.26 1.38% $ 11,257.40 1.98% $ 11,494.92
2/28/1995 11.57 2.76% $ 11,567.90 2.38% $ 11,768.50
3/31/1995 11.67 0.87% $ 11,668.50 0.61% $ 11,840.29
4/30/1995 11.84 1.45% $ 11,838.10 1.40% $ 12,006.05
5/31/1995 12.17 2.81% $ 12,171.20 3.87% $ 12,470.68
6/30/1995 6/30/95 12.26 0.70% $ 12,255.80 0.73% $ 12,561.72
7/31/1995 12.29 0.27% $ 12,289.10 -0.22% $ 12,534.08
8/31/1995 12.40 0.93% $ 12,403.10 1.21% $ 12,685.75
9/30/1995 12.59 1.49% $ 12,587.90 0.97% $ 12,808.80
10/31/1995 12.68 0.74% $ 12,680.50 1.30% $ 12,975.31
11/30/1995 12.84 1.28% $ 12,842.90 1.50% $ 13,169.94
12/31/1995 13.03 1.49% $ 13,034.10 1.40% $ 13,354.32
1/31/1996 13.12 0.69% $ 13,123.60 0.66% $ 13,442.46
2/26/1996 13.01 -0.83% $ 13,014.50 -1.74% $ 13,208.56
3/31/1996 12.90 -0.91% $ 12,895.70 -0.70% $ 13,116.10
4/30/1996 12.82 -0.55% $ 12,824.90 -0.56% $ 13,042.65
5/31/1996 12.81 -0.12% $ 12,809.80 -0.20% $ 13,016.57
6/30/1996 6/30/96 12.93 0.92% $ 12,927.50 1.34% $ 13,190.99
7/31/1996 12.97 0.34% $ 12,971.10 0.27% $ 13,226.60
8/30/1996 13.03 0.45% $ 13,029.50 -0.17% $ 13,204.12
9/30/1996 13.25 1.72% $ 13,254.00 1.74% $ 13,433.87
10/31/1996 13.48 1.69% $ 13,478.20 2.22% $ 13,732.10
11/30/1996 13.71 1.74% $ 13,712.80 1.71% $ 13,966.92
12/31/1996 13.67 -0.34% $ 13,665.80 -0.93% $ 13,837.03
1/31/1997 13.70 0.22% $ 13,696.10 0.31% $ 13,879.92
2/28/1997 13.77 0.52% $ 13,767.70 0.25% $ 13,914.62
3/31/1997 13.62 -1.07% $ 13,621.00 -1.11% $ 13,760.17
4/30/1997 13.77 1.11% $ 13,772.70 1.50% $ 13,966.57
5/31/1997 13.95 1.31% $ 13,953.30 0.95% $ 14,099.25
6/30/1997 6/30/97 14.16 1.50% $ 14,163.00 1.19% $ 14,267.04
7/31/1997 14.59 3.05% $ 14,594.40 2.70% $ 14,652.25
8/29/1997 14.45 -1.00% $ 14,448.00 -0.85% $ 14,527.70
9/30/1997 14.67 1.56% $ 14,672.80 1.47% $ 14,741.26
10/31/1997 14.86 1.25% $ 14,855.70 1.45% $ 14,955.01
11/29/1997 14.94 0.56% $ 14,938.90 0.46% $ 15,023.80
12/31/1997 15.10 1.06% $ 15,097.80 1.01% $ 15,175.54
1/31/1998 15.30 1.37% $ 15,304.90 1.28% $ 15,369.79
2/28/1998 15.28 -0.15% $ 15,281.40 -0.08% $ 15,357.49
3/31/1998 15.31 0.20% $ 15,312.10 0.34% $ 15,409.71
4/30/1998 15.34 0.19% $ 15,340.80 0.52% $ 15,489.84
5/31/1998 15.51 1.10% $ 15,509.60 0.95% $ 15,636.99
6/30/1998 6/30/98 15.65 0.90% $ 15,649.10 0.85% $ 15,769.91
7/31/1998 15.65 -0.01% $ 15,647.40 0.21% $ 15,803.02
8/31/1998 15.72 0.47% $ 15,720.30 1.63% $ 16,060.61
9/30/1998 15.92 1.27% $ 15,919.60 2.34% $ 16,436.43
10/31/1998 15.67 -1.57% $ 15,669.20 -0.53% $ 16,349.32
11/30/1998 15.85 1.12% $ 15,845.00 0.57% $ 16,442.51
12/31/1998 15.97 0.82% $ 15,974.80 0.30% $ 16,491.84
1/31/1999 16.15 1.07% $ 16,145.60 0.71% $ 16,608.93
2/28/1999 15.90 -1.55% $ 15,895.50 -1.75% $ 16,318.27
3/31/1999 15.98 0.55% $ 15,982.40 0.55% $ 16,408.02
4/30/1999 16.06 0.48% $ 16,059.20 0.32% $ 16,460.53
5/31/1999 15.91 -0.94% $ 15,907.70 -0.88% $ 16,315.68
6/30/1999 6/30/99 15.77 -0.86% $ 15,770.70 -0.32% $ 16,263.46
7/31/1999 15.75 -0.10% $ 15,754.80 -0.43% $ 16,193.53
8/31/1999 15.66 -0.58% $ 15,663.80 -0.05% $ 16,185.44
9/30/1999 15.76 0.64% $ 15,764.80 1.16% $ 16,373.19
10/31/1999 15.77 0.01% $ 15,766.70 0.37% $ 16,433.77
11/30/1999 15.83 0.39% $ 15,828.20 -0.01% $ 16,432.12
12/31/1999 15.84 0.10% $ 15,844.20 -0.48% $ 16,353.25
1/31/2000 15.82 -0.17% $ 15,817.20 -0.33% $ 16,299.28
2/29/2000 15.93 0.72% $ 15,931.60 1.21% $ 16,496.51
3/31/2000 15.98 0.30% $ 15,980.00 1.32% $ 16,714.26
4/30/2000 15.94 -0.26% $ 15,938.70 -0.29% $ 16,665.79
5/31/2000 15.91 -0.20% $ 15,906.30 -0.05% $ 16,657.45
6/30/2000 6/30/00 16.30 2.46% $ 16,298.30 2.08% $ 17,003.93
7/31/2000 16.47 1.03% $ 16,466.50 0.91% $ 17,158.67
8/31/2000 16.69 1.35% $ 16,688.70 1.45% $ 17,407.47
9/30/2000 16.67 -0.10% $ 16,671.80 0.63% $ 17,517.13
10/31/2000 16.63 -0.23% $ 16,634.10 0.66% $ 17,632.75
11/30/2000 16.66 0.17% $ 16,662.40 1.64% $ 17,921.92
12/31/2000 16.99 1.97% $ 16,990.00 1.86% $ 18,255.27
1/31/2001 17.43 2.57% $ 17,426.90 1.64% $ 18,554.66
2/28/2001 17.64 1.23% $ 17,641.20 0.87% $ 18,716.08
3/31/2001 17.66 0.09% $ 17,656.80 0.50% $ 18,809.66
4/30/2001 17.55 -0.63% $ 17,546.20 -0.42% $ 18,730.66
5/31/2001 17.62 0.44% $ 17,623.40 0.60% $ 18,843.05
6/30/2001 6/30/01 17.58 -0.25% $ 17,579.50 0.38% $ 18,914.65
7/31/2001 18.04 2.63% $ 18,041.60 2.24% $ 19,338.34
8/31/2001 18.21 0.92% $ 18,208.40 1.15% $ 19,560.73
9/30/2001 18.07 -0.75% $ 18,071.90 1.17% $ 19,789.59
10/31/2001 18.26 1.04% $ 18,259.20 2.09% $ 20,203.19
11/30/2001 17.94 -1.76% $ 17,937.60 -1.38% $ 19,924.39
12/31/2001 17.73 -1.15% $ 17,730.70 -0.64% $ 19,796.87
1/31/2002 17.76 0.17% $ 17,761.30 0.81% $ 19,957.23
2/28/2002 17.80 0.23% $ 17,802.20 0.97% $ 20,150.81
3/31/2002 17.42 -2.14% $ 17,421.50 -1.66% $ 19,816.31
4/30/2002 17.58 0.89% $ 17,576.70 1.94% $ 20,200.75
5/31/2002 17.71 0.75% $ 17,708.60 0.85% $ 20,372.45
6/30/2002 6/30/02 17.43 -1.59% $ 17,427.30 0.86% $ 20,547.65
7/31/2002 17.49 0.37% $ 17,492.10 1.21% $ 20,796.28
8/31/2002 17.81 1.81% $ 17,809.30 1.69% $ 21,147.74
9/30/2002 18.18 2.09% $ 18,181.60 1.62% $ 21,490.33
10/31/2002 18.06 -0.66% $ 18,060.90 -0.46% $ 21,391.48
11/30/2002 17.91 -0.81% $ 17,914.10 -0.03% $ 21,385.06
12/31/2002 18.35 2.45% $ 18,352.40 2.07% $ 21,827.73
1/31/2003 18.38 0.14% $ 18,377.30 0.09% $ 21,847.37
2/28/2003 18.74 1.96% $ 18,737.50 1.38% $ 22,148.87
3/31/2003 18.78 0.22% $ 18,778.10 -0.08% $ 22,131.15
4/30/2003 19.01 1.23% $ 19,008.60 0.83% $ 22,314.84
5/31/2003 19.37 1.91% $ 19,372.30 1.86% $ 22,729.89
6/30/2003 6/30/03 19.39 0.10% $ 19,392.40 -0.20% $ 22,684.43
7/31/2003 18.66 -3.80% $ 18,655.30 -3.36% $ 21,922.24
8/31/2003 18.75 0.51% $ 18,749.60 0.66% $ 22,066.92
9/30/2003 19.30 2.93% $ 19,299.70 2.65% $ 22,651.70
10/31/2003 19.15 -0.79% $ 19,147.10 -0.93% $ 22,441.04
11/30/2003 19.20 0.30% $ 19,204.00 0.24% $ 22,494.89
12/31/2003 19.42 1.10% $ 19,416.20 1.02% $ 22,724.34
1/31/2004 19.55 0.67% $ 19,547.20 0.80% $ 22,906.14
2/29/2004 19.73 0.94% $ 19,731.20 1.08% $ 23,153.52
3/31/2004 19.89 0.80% $ 19,889.20 0.75% $ 23,327.17
4/30/2004 19.37 -2.63% $ 19,366.90 -2.60% $ 22,720.67
5/31/2004 19.19 -0.91% $ 19,189.90 -0.40% $ 22,629.79
6/30/2004 6/30/04 19.27 0.42% $ 19,270.20 0.57% $ 22,758.78
Heading into the first half of fiscal 2005, many signs appear to be pointing to
a somewhat stronger U.S. economy. Unemployment is improving (albeit slowly), GDP
is gaining some ground, the manufacturing sector is on the upswing and inflation
is relatively in check. That said, the outlook looks stable for the corporate
bond market. On the fundamental side, the coming earnings season is likely to
see robust company results but this news is expected; therefore, we believe it
will not have much effect on bond spreads. On the technical side, volatility is
lower and the supply of bonds is one-third less than last year, both of which we
believe bode well for corporate spreads.
Going forward, seasonal patterns suggest that the market will remain in a
trading range for the rest of the summer but will pick up in the fall. Recent
softer economic data has caused interest rate expectations to drop and positive
trends in corporate credit ratings remain solidly in place. Upgraded bond
issuers outnumbered downgrades in the second quarter for the first time in six
years. In terms of the fund, Tyco International and American Standard were
upgraded from high yield to investment grade. In addition, AmerisourceBergen,
Domino's Pizza, The Gap and Nextel Communications were all put on positive watch
to be upgraded. Within what we view as a slowly improving economy, we expect the
corporate bond market to make positive contributions to the fund's performance
versus its benchmark.
The Lehman Brothers U.S. Aggregate Index is an unmanaged index of taxable,
investment grade fixed-income securities, including government, corporate,
mortgage and asset-backed securities. Direct investment cannot be made in this
index.
All index and fund performance figures assume reinvestment of dividends and
distributions. Index results do not include costs of investing, which would
lower performance.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Registered Public Accounting Firm.
21
PORTFOLIO REVIEW CITIZENS ULTRA SHORT BOND FUND
GOAL
High level of current income consistent with preservation of capital
STRATEGY
Invests mainly in short-duration investment-grade securities
INCEPTION DATE
Standard shares
11/21/02
AVERAGE ANNUAL RETURNS (as of 6/30/2004)
Ticker 1 Since
symbol year inception
------ ---- ---------
Standard shares CFSBX 0.48% 1.61%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
are currently in effect and have been instituted in the past to maintain expense
limits, without which returns would have been lower. When you sell your fund
shares, they may be worth more or less than what you paid for them.
The final quarter of fiscal 2004 ended with the Federal Reserve (the Fed)
raising interest rates for the first time in over four years. The Fed boosted
the federal-funds rate (the rate banks charge each other for overnight loans)
one quarter of a percentage point, from its 40-year low of 1.00% to 1.25%. We
believe this anticipated rise cuts two ways for bond funds, likely boosting
yields as total returns fall. During the past fiscal year, the fund returned
0.48%, underperforming its benchmark, the Merrill Lynch 1-Year Treasury Index,
which was up 0.72%. As of June 30, 2004, the fund's 30-day yield stood at 1.89%,
up from 1.56% posted a year earlier.
As we have done since the fund's inception, we have focused on net asset value
(NAV) stability by owning high-quality corporate bonds. And at the same time,
our strategy has also been to increase yield whenever possible. We moved the
fund's effective duration from being somewhat longer than the one-year benchmark
at the beginning of the fiscal year (1.21 years), to a neutral stance at
mid-year (0.88 years), to a decidedly shorter duration by fiscal year end (0.61
years). Generally speaking, changes in interest rates will have less impact on
share price when a fund (or bond) has a shorter duration. During the fiscal
year, the 2-year Treasury note, from which most short-term corporate bonds are
priced, rose from 1.30% to 2.68%.
IMPORTANT NOTES
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares.
Interest rate increases can cause the value of bonds to decrease, meaning that a
bond fund investment may lose value in a rising interest rate environment.
22
CITIZENS ULTRA SHORT BOND FUND
[PERFORMANCE GRAPH]
CITIZENS ULTRA SHORT BOND FUND
PERFORMANCE SINCE INCEPTION 11/21/02
DATE DATE NAV MONTHLY FUND RETURN FUND VALUE MERRILL LYNCH 1 YR TREASURY INDEX VALUE
- ---- ---- --- ------------------- ---------- --------------------------- -----------
11/21/02 11/21/02 10.00 $ 10,000.00 $10,000.00
11/30/2002 10.00 0.04% $ 10,003.70 0.01% $10,038.00
12/31/2002 12/31/02 10.05 0.49% $ 10,052.90 0.38% $10,046.03
1/31/2003 10.08 0.23% $ 10,075.70 0.08% $10,064.11
2/28/2003 10.12 0.41% $ 10,117.50 0.18% $10,082.23
3/31/2003 3/31/03 10.14 0.22% $ 10,139.40 0.18% $10,093.32
4/30/2003 10.16 0.21% $ 10,161.00 0.11% $10,105.43
5/31/2003 10.19 0.31% $ 10,192.10 0.12% $10,126.65
6/30/2003 6/30/03 10.21 0.19% $ 10,211.60 0.21% $10,121.59
7/31/2003 10.14 -0.71% $ 10,138.60 -0.05% $10,130.70
8/31/2003 10.14 -0.03% $ 10,135.50 0.09% $10,159.06
9/30/2003 9/30/03 10.19 0.56% $ 10,191.90 0.28% $10,156.02
10/31/2003 10.18 -0.14% $ 10,177.80 -0.03% $10,152.97
11/30/2003 10.18 0.05% $ 10,182.80 -0.03% $10,185.46
12/31/2003 12/31/03 10.22 0.36% $ 10,219.10 0.32% $10,200.74
1/31/2004 10.24 0.16% $ 10,235.10 0.15% $10,221.14
2/29/2004 10.26 0.25% $ 10,260.60 0.20% $10,231.36
3/31/2004 3/31/04 10.28 0.15% $ 10,276.50 0.10% $10,204.76
4/30/2004 10.25 -0.25% $ 10,250.90 -0.26% $10,203.74
5/31/2004 10.26 0.05% $ 10,256.20 -0.01% $10,200.68
6/30/2004 6/30/04 10.26 0.04% $ 10,260.80 -0.03% $10,200.68
The underperformance versus the benchmark can be attributed to our focus on
high-quality corporate bonds, as well as our asset-backed securities. Within our
corporate holdings, financial companies such as American Express, Wells Fargo
and Goldman Sachs performed well for the fund. In addition, in a period that saw
interest rates rise, we benefited from increasing our allocation of floating
rate holdings, such as Sallie Mae and American Honda Finance.
As we move into the first half of fiscal 2005, various indicators -- such as
improved employment numbers, modest gross domestic product, low inflation and a
more active manufacturing sector -- suggest to us a moderately stronger U.S.
economy. In the coming fiscal year, our strategy will be focused on interest
rate movements and our continuing commitment to avoiding lower-quality issues
that may negatively influence the fund.
The Merrill Lynch 1-Year Treasury Index is an unmanaged index that tracks the
performance of U.S. Treasuries with maturities of approximately one year. Direct
investment cannot be made in this index.
All index and fund performance figures assume reinvestment of dividends and
distributions. Index results do not include costs of investing, which would
lower performance.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Registered Public Accounting Firm.
23
PORTFOLIO REVIEW CITIZENS MONEY MARKET FUND
GOAL
Current income consistent with safety and liquidity
STRATEGY
Invests exclusively in money market instruments
INCEPTION DATES
Standard shares
08/30/83
Institutional shares
02/01/96
AVERAGE ANNUAL RETURNS (as of 6/30/2004)
Ticker 1 3 5 10 Since
symbol year years years years inception
------ ---- ----- ----- ----- ---------
Standard shares WKAXX 0.10% 0.82% 2.45% 3.42% N/A
Institutional shares WAIXX 0.41% 1.09% 2.73% N/A 3.63%
Past performance is not an indication of future performance. Current performance
may be lower or higher than the performance data quoted. More current
performance information can be obtained at www.citizensfunds.com. Fee waivers
have been instituted in the past to maintain expense limits, without which
returns would have been lower.
The interest rate tide has definitely reversed, with the Federal Reserve
boosting the federal-funds rate a quarter of a percentage point to 1.25% at the
end of June. Our view is this increase will be one of many which will occur at a
cautious and measured pace. There still remains a high degree of uncertainty
about the long-term economic outlook and we believe the Fed does not want to
quash any improvement. The Fed also has indicated it sees little upside
inflation risk.
The 7-day simple yield on the Citizens Money Market Fund (Standard shares)
increased from 0.36% at the end of the last fiscal year to 0.48% as of June 30,
2004. The fund's 12-month return declined, reflecting the residual effects of
earlier interest rates drops. We are now in a position, however, where we are
replacing lower-yielding money market securities as they mature with more
recently-issued securities that offer a more favorable rate of return.
The fund's strategy in the past year was to stay slightly shorter than our peers
in terms of maturity, with the expectation that longer rates would start to
increase as the economy began to show improvement. As of June 30, 2004, the
weighted average maturity of the fund was 42 days.
We believe fiscal 2005 will be a period characterized by a slightly stronger
economy. At this point we can see many favorable signs, including low inflation,
rising employment and positive gross domestic product (GDP) levels. Going
forward, the fund remains focused on holding high-quality, socially responsible
securities and avoiding companies with credit and headline risk.
IMPORTANT NOTES
The table does not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
Investments in the Citizens Money Market Fund are not insured or guaranteed by
the FDIC or any other government agency. Although the fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in the fund.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Registered Public Accounting Firm.
24
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Shareholders of Citizens Funds:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolio holdings 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 Citizens Small Cap Core Growth Fund,
Citizens Emerging Growth Fund, Citizens Core Growth Fund, Citizens 300 Fund,
Citizens Small Cap Value Fund, Citizens Value Fund, Citizens Global Equity Fund,
Citizens Balanced Fund, Citizens Income Fund, Citizens Ultra Short Bond Fund and
Citizens Money Market Fund (the "Funds") at June 30, 2004, the results of each
of their operations, the changes in each of their net assets and the financial
highlights for each of the periods presented 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 audits 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 June 30, 2004 by correspondence with the custodian
and brokers provides a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Columbus, Ohio
August 13, 2004
25
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS SMALL CAP CORE GROWTH FUND
SECURITY SHARES VALUE ($)
- -------- --------- ---------
COMMON STOCKS - 98.0%
AIRLINES - 1.9%
MAIR Holdings, Inc. (a) 68,452 559
BANKS - 2.5%
Franklin Bank Corp. (a) 16,358 259
PrivateBancorp, Inc. 5,300 146
Prosperity Bancshares, Inc. 14,374 349
-----
754
BIOTECHNOLOGY - 3.9%
Aphton Corp. (a) 70,100 280
Exact Sciences Corp. (a) 27,800 171
Intermune, Inc. (a) 31,750 490
Neurocrine Biosciences, Inc. (a) 4,416 229
-----
1,170
COMPUTERS - 12.1%
Akamai Technologies, Inc. (a) 9,230 166
Ansys, Inc. (a) 3,210 151
Aspen Technology, Inc. (a) 38,740 281
Computer Horizons Corp. (a) 147,600 588
Digital Insight Corp. (a) 19,900 413
Digital River, Inc. (a) 8,790 287
Embarcadero Technologies, Inc. (a) 14,830 183
F5 Networks, Inc. (a) 11,200 297
FileNET Corp. (a) 16,300 515
Hyperion Solutions Corp. (a) 3,500 153
Quest Software, Inc. (a) 30,500 393
Wind River Systems, Inc. (a) 13,300 156
-----
3,583
EDUCATIONAL SERVICES - 2.6%
Bright Horizons Family Solutions,
Inc. (a) 4,650 249
Strayer Education, Inc. 4,580 511
-----
760
ELECTRICAL EQUIPMENT - 4.0%
Benchmark Electronics, Inc. (a) 18,450 537
Plexus Corp. (a) 22,215 300
Power Integrations, Inc. (a) 14,030 349
-----
1,186
ELECTRONICS - 5.4%
C-COR, Inc. (a) 10,500 108
Cabot Microelectronics Corp. (a) 18,900 578
Conexant Systems, Inc. (a) 59,100 256
Genesis Microchip, Inc. (a) 14,500 200
Photon Dynamics, Inc. (a) 9,500 333
PLX Technology, Inc. (a) 6,900 119
-----
1,594
ENERGY & UTILITIES - 4.5%
Coeur d'Alene Mines Corp. (a) 17,795 73
Newfield Exploration Co. (a) 6,590 367
Patina Oil & Gas Corp. 4,400 131
Precision Drilling Corp. (a) 13,575 652
Stone Energy Corp. (a) 2,300 105
-----
1,328
FINANCIAL - DIVERSIFIED - 2.2%
Financial Federal Corp. (a) 18,640 657
FOOD - 0.8%
The Hain Celestial Group, Inc. (a) 8,290 150
United Natural Foods, Inc. (a) 3,530 102
-----
252
HEALTH CARE - 16.9%
Able Laboratories, Inc. (a) 12,440 256
American Medical Systems Holdings, Inc. (a) 20,450 690
Amerigroup Corp. (a) 8,350 411
Cyberonics, Inc. (a) 9,000 300
Cytyc Corp. (a) 24,200 614
Health Net, Inc. (a) 7,705 204
LifePoint Hospitals, Inc. (a) 14,600 543
Merit Medical Systems, Inc. (a) 39,128 623
Nuvasive, Inc. (a) 25,000 273
Quality Systems Inc. (a) 3,160 155
Sierra Health Services, Inc. (a) 8,200 367
The Medicines Co. (a) 7,050 215
Thoratec Corp. (a) 36,880 396
-----
5,047
HOTELS & MOTELS - 1.0%
Choice Hotels International, Inc. 6,000 301
INVESTMENT BANKING & BROKERAGE - 5.3%
Affiliated Managers Group, Inc. (a) 9,786 493
Piper Jaffray Companies, Inc. (a) 11,485 519
Southwest BanCorp of Texas 12,550 554
-----
1,566
MANUFACTURING - 6.1%
Applied Films Corp. (a) 11,040 320
Kennametal, Inc. 8,200 375
Oshkosh Truck Corp. 5,700 327
Roper Industries, Inc. 4,000 228
Terex Corp. (a) 9,430 322
The Manitowoc Co., Inc. 7,100 240
-----
1,812
MULTIMEDIA - 5.2%
Emmis Communications Corp., Class A (a) 18,550 389
Sonic Solutions (a) 9,435 200
Spanish Broadcasting Systems, Inc. (a) 47,000 438
Standard Microsystems Corp. (a) 13,300 310
Witness Systems, Inc. (a) 16,100 196
-----
1,533
See Financial Notes
26
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS SMALL CAP CORE GROWTH FUND (CONT.)
SECURITY SHARES VALUE ($)
- -------- ------ ---------
PERSONAL CARE - 0.7%
Elizabeth Arden, Inc. (a) 9,600 202
PHARMACEUTICALS - 4.4%
Advancis Pharmaceutical Corp. (a) 35,000 237
Angiotech Pharmaceuticals, Inc. (a) 24,792 499
Medicis Pharmaceutical Corp., Class A 4,798 192
Orphan Medical, Inc. (a) 12,900 130
Par Pharmaceutical Cos., Inc. (a) 6,700 236
-----
1,294
RESTAURANTS - 0.9%
P.F. Chang's China Bistro, Inc. (a) 3,240 133
Sonic Corp. (a) 6,170 141
-----
274
RETAIL - 6.2%
Big 5 Sporting Goods Corp. (a) 5,500 144
Claire's Stores, Inc. 12,900 280
Gymboree Corp. (a) 13,500 207
Jos. A. Bank Clothiers, Inc. (a) 7,300 229
Pacific Sunwear of California, Inc.(a) 8,400 164
The Warnaco Group, Inc. (a) 13,500 287
Tommy Hilfiger Corp. (a) 19,879 302
Tractor Supply Co. (a) 5,700 238
-----
1,851
SERVICES - 5.1%
Chemed Corp. 11,580 562
Corporate Executive Board Co. 8,330 481
Labor Ready, Inc. (a) 29,860 463
-----
1,506
TELECOMMUNICATIONS - 4.4%
Andrew Corp. (a) 27,600 553
NII Holdings, Inc., Class B (a) 7,960 268
Webmethods, Inc. (a) 57,900 496
-----
1,317
TRANSPORTATION - 1.9%
Landstar System, Inc. (a) 10,700 566
-----
TOTAL COMMON STOCKS 29,112
Cost: $28,326
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
- ----------------------------- ------------- ---------
REPURCHASE AGREEMENTS - 1.8%
Fifth Third Bank, 1.25%, 07/01/04
(Proceeds at maturity $536,
collateralized by Federal Home Loan
Mortgage Corp. security, 6.50%,
10/01/18)
Cost: $536 536 536
---------
TOTAL INVESTMENTS - 99.8% 29,648
Cost: $28,862 (b)
Percentages indicated are based on net assets of $29,701.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs for federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $65. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $ 2,438
Unrealized depreciation (1,717)
-------
Net unrealized appreciation $ 721
CITIZENS EMERGING GROWTH FUND
SECURITY SHARES VALUE ($)
- -------- ------- ---------
COMMON STOCKS - 99.7%
AIRLINES - 0.5%
JetBlue Airways Corp. (a) 29,100 855
BANKS - 1.1%
Commerce Bancorp, Inc. 14,500 798
New York Community Bancorp, Inc. 28,900 567
North Fork Bancorporation, Inc. 17,600 670
------
2,035
BIOTECHNOLOGY - 7.6%
Allergan, Inc. 43,240 3,872
Biogen Idec, Inc. (a) 22,108 1,398
Gilead Sciences, Inc. (a) 47,400 3,176
Intermune, Inc. (a) 165,850 2,557
MedImmune, Inc. (a) 116,300 2,721
------
13,724
BROADCASTING - 1.5%
American Tower Corp. (a) 55,900 850
Radio One, Inc. (a) 50,400 807
Univision Communications, Inc. (a) 33,700 1,076
------
2,733
CHEMICALS - 0.6%
Praxair, Inc. 26,100 1,042
COMPUTERS - 10.6%
Affiliated Computer Services, Inc. (a) 20,825 1,102
Citrix Systems, Inc. (a) 29,970 610
Corning, Inc. (a) 111,800 1,460
DST Systems, Inc. (a) 14,170 681
Intuit, Inc. (a) 21,800 841
Lexmark International, Inc. (a) 22,320 2,156
Macromedia, Inc. (a) 33,600 825
Mercury Interactive Corp. (a) 21,412 1,067
NetIQ Corp. (a) 57,474 759
Network Appliance, Inc. (a) 49,700 1,070
27
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS EMERGING GROWTH FUND(CONT.)
SECURITY SHARES VALUE ($)
- -------- ------- ---------
COMPUTERS (CONT.)
Novell, Inc. (a) 138,650 1,163
Pixar, Inc. (a) 14,505 1,008
Red Hat, Inc. (a) 41,100 944
Silicon Laboratories, Inc. (a) 13,600 630
SunGard Data Systems, Inc. (a) 48,245 1,254
Symantec Corp. (a) 68,600 3,004
Symbol Technologies, Inc. 46,031 678
-------
19,252
CONSTRUCTION - 0.4%
Centex Corp. 17,000 778
CONSUMER PRODUCTS - 0.6%
Black & Decker Corp. 16,900 1,050
EDUCATION - 1.1%
Corinthian Colleges, Inc. (a) 79,340 1,963
ELECTRICAL EQUIPMENT - 0.9%
Fisher Scientific International, 16,100 930
Inc. (a)
Molex, Inc. 22,100 709
-------
1,639
ELECTRONICS - 15.4%
Adobe Systems, Inc. 59,025 2,746
Agilent Technologies, Inc. (a) 23,400 685
Altera Corp. (a) 63,400 1,409
Broadcom Corp., Class A (a) 42,500 1,988
Cabot Microelectronics Corp. (a) 74,120 2,269
Electronic Arts, Inc. (a) 34,100 1,860
Harman International Industries, Inc. 12,100 1,101
International Rectifier Corp. (a) 14,700 609
Jabil Circuit, Inc. (a) 66,100 1,664
JDS Uniphase Corp. (a) 221,450 839
Johnson Controls, Inc. 24,000 1,281
Juniper Networks, Inc. (a) 101,700 2,499
KLA-Tencor Corp. (a) 29,600 1,462
Microchip Technology, Inc. 34,135 1,077
National Semiconductor Corp. (a) 54,000 1,187
Novellus Systems, Inc. (a) 19,900 626
NVIDIA Corp. (a) 28,800 590
PerkinElmer, Inc. 33,800 677
PMC-Sierra, Inc. (a) 37,875 544
QLogic Corp. (a) 44,500 1,183
Sandisk Corp. (a) 24,300 527
Waters Corp. (a) 23,200 1,108
-------
27,931
ENERGY & UTILITIES - 4.6%
Cambior, Inc. (a) 253,937 673
Coeur d'Alene Mines Corp. (a) 43,425 177
DBJ Services Co. (a) 23,760 1,089
EOG Resources, Inc. 23,200 1,386
Forest Oil Corp. (a) 38,500 1,052
Kinder Morgan, Inc. 18,600 1,103
ONEOK, Inc. 29,700 653
Patterson-UTI Energy, Inc. 28,000 935
Pogo Producing Co. 10,100 499
Smith International, Inc. (a) 14,530 810
-------
8,377
FINANCIAL - DIVERSIFIED - 3.3%
Investors Financial Services Corp. 24,500 1,068
Jefferies Group, Inc. 20,600 637
Legg Mason, Inc. 9,715 884
Moody's Corp. 22,600 1,461
SouthTrust Corp. 21,100 819
Synovus Financial Corp. 43,500 1,101
-------
5,970
FOODS - 2.0%
Bunge, Ltd. 27,550 1,074
Hershey Foods Corp. 21,400 990
Krispy Kreme Doughnuts, Inc. (a) 28,200 538
Pepsi Bottling Group, Inc. 32,000 977
-------
3,579
HEALTH CARE - 11.2%
Barr Laboratories, Inc. (a) 70,400 2,372
Biomet, Inc. 22,500 1,000
Cytyc Corp. (a) 130,500 3,311
Health Management
Associates Inc., Class A 136,670 3,064
Health Net, Inc. (a) 48,908 1,296
Laboratory Corporation of
America Holdings (a) 56,300 2,235
Mylan Laboratories, Inc. 142,300 2,882
Sierra Health Services, Inc. (a) 40,170 1,796
Thoratec Corp. (a) 221,100 2,372
-------
20,328
HOTELS & MOTELS - 1.3%
Hilton Hotels Corp. 38,700 722
Marriott International, Inc., Class A 33,300 1,661
-------
2,383
INSURANCE - 2.0%
American Medical Security Group, Inc. (a) 40,926 1,115
Fidelity National Financial Corp. 23,600 881
Wellchoice, Inc. (a) 39,241 1,625
-------
3,621
INVESTMENT BANKING & BROKERAGE - 1.2%
E*TRADE Group, Inc. (a) 60,155 671
Friedman, Billings, Ramsey Group, Inc. 38,600 764
T. Rowe Price Group, Inc. 16,255 819
-------
2,254
See Financial Notes
28
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS EMERGING GROWTH FUND(CONT.)
SECURITY SHARES VALUE ($)
- -------- ------- ---------
MANUFACTURING - 6.2%
American Standard Cos., Inc. (a) 22,100 891
Cintas Corp. 19,080 910
Donaldson Co., Inc. 30,000 879
Ecolab, Inc. 50,500 1,600
Graco, Inc. 34,100 1,059
Mattel, Inc. 70,700 1,290
Nucor Corp. 11,800 906
Oshkosh Truck Corp. 16,700 957
Pactiv Corp. (a) 30,000 748
Pentair, Inc. 34,000 1,144
Zebra Technologies Corp., Class A (a) 9,600 835
-------
11,219
MULTIMEDIA - 0.4%
Cox Radio, Inc., Class A 43,113 749
OFFICE EQUIMENT & SUPPLIES - 0.5%
Pitney Bowes, Inc. 18,550 821
PERSONAL CARE - 0.6%
The Estee Lauder Cos., Inc., Class A 21,400 1,044
PHARMACEUTICALS - 1.0%
Angiotech Pharmaceuticals, Inc. (a) 85,532 1,723
PUBLISHING - 0.6%
John Wiley & Sons, Inc. 31,300 1,002
RESTAURANTS - 3.8%
Darden Restaurants, Inc. 27,900 573
Starbucks Corp. (a) 71,100 3,091
The Cheesecake Factory (a) 20,700 824
YUM! Brands, Inc. (a) 65,500 2,438
-------
6,926
RETAIL - 11.4%
Advance Auto Parts (a) 24,300 1,074
Chico's FAS, Inc. (a) 21,300 962
Claire's Stores, Inc. 46,700 1,013
Coach, Inc. (a) 27,700 1,252
Dollar General Corp. 57,900 1,133
Dollar Tree Stores, Inc. (a) 38,600 1,059
Fastenal Co. 28,600 1,625
Foot Locker, Inc. 21,003 511
Michaels Stores, Inc. 20,600 1,133
Polo Ralph Lauren 18,000 620
RadioShack Corp. 27,500 787
Staples, Inc. 111,450 3,266
The TJX Cos., Inc. 76,335 1,842
Tiffany & Co. 29,900 1,102
Tommy Hilfiger Corp. (a) 48,211 730
Whole Foods Market, Inc. 16,150 1,542
Williams Sonoma, Inc. (a) 31,400 1,035
-------
20,686
SERVICES - 7.8%
Apollo Group, Inc., Class A (a) 22,000 1,943
ARAMARK Corp. 24,425 702
Career Education Corp. (a) 22,200 1,011
Corporate Executive Board Co. 29,200 1,687
Dun & Bradstreet Corp. (a) 8,100 437
Expeditors International of
Washington, Inc. 24,700 1,220
Fair Isaac & Co., Inc. 25,000 835
Fiserv, Inc. (a) 48,040 1,869
Getty Images, Inc. (a) 24,850 1,491
Iron Mountain, Inc. (a) 19,900 960
Manpower, Inc. 20,900 1,061
Monster Worldwide, Inc. (a) 32,300 831
-------
14,047
TELECOMMUNICATIONS - 1.0%
Nextel Partners, Inc. (a) 53,000 844
UTStarcom, Inc. (a) 30,300 916
-------
1,760
TRANSPORTATION - 0.5%
J.B. Hunt Transport Services, Inc. 24,300 937
-------
TOTAL COMMON STOCKS 180,428
Cost: $166,896
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
- ----------------------------- ------------- ---------
REPURCHASE AGREEMENTS - 0.1%
Fifth Third Bank, 1.25%, 07/01/04
(Proceeds at maturity $75,
collateralized by Federal Home Loan
Mortgage Corp. security, 5.00%,
10/01/18)
Cost: $75 75 75
-------
TOTAL INVESTMENTS - 99.8% 180,503
Cost: $166,971 (b)
Percentages indicated are based on net assets of $180,900.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs from federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $1,442. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $ 20,247
Unrealized depreciation (8,157)
--------
Net unrealized appreciation $ 12,090
29
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS CORE GROWTH FUND
SECURITY SHARES VALUE ($)
- -------- ------- ---------
COMMON STOCKS - 99.3%
AIR FREIGHT - 2.9%
FedEx Corp. 80,060 6,540
United Parcel Service, Class B 47,500 3,571
------
10,111
AIRLINES - 1.0%
Southwest Airlines Co. 213,700 3,584
BANKS - 2.8%
Bank of America Corp. 54,700 4,628
Bank of New York Co., Inc. 56,000 1,651
First Horizon National Corp. 36,800 1,673
North Fork Bancorporation, Inc. 43,800 1,667
------
9,619
BIOTECHNOLOGY - 3.8%
Allergan, Inc. 41,000 3,670
Gilead Sciences, Inc. (a) 91,700 6,145
MedImmune, Inc. (a) 139,800 3,271
------
13,086
CHEMICALS - 3.4%
Amgen, Inc. (a) 143,050 7,807
Praxair, Inc. 51,000 2,035
Sigma-Aldrich Corp. 33,000 1,967
------
11,809
COMPUTERS - 8.1%
Dell, Inc. (a) 77,000 2,758
Hewlett-Packard Co. 167,250 3,529
Intel Corp. 348,400 9,617
International Business Machines Corp. 29,000 2,556
Novell, Inc. (a) 413,600 3,470
Pixar, Inc. (a) 26,500 1,842
Symantec Corp. (a) 94,000 4,115
------
27,887
CONSUMER PRODUCTS - 0.5%
Black & Decker Corp. 30,500 1,895
ELECTRONICS - 6.2%
Analog Devices, Inc. 43,225 2,035
Applied Materials, Inc. (a) 120,900 2,372
Cisco Systems, Inc. (a) 234,200 5,550
Electronic Arts, Inc. (a) 35,300 1,926
Johnson Controls, Inc. 38,400 2,050
Maxim Integrated Products, Inc. 43,400 2,275
National Semiconductor Corp. (a) 78,000 1,715
Texas Instruments, Inc. 142,000 3,434
------
21,357
ENERGY & UTILITIES - 5.0%
Anadarko Petroleum Corp. 32,000 1,875
Apache Corp. 42,100 1,833
Baker Hughes, Inc. 49,000 1,845
Burlington Resources, Inc. 52,000 1,881
ConocoPhillips 128,850 9,831
Vulcan Power Co., Class A (a) (b) 40,000 -
------
17,265
ENTERTAINMENT - 1.3%
Comcast Corp. Class A (a) 160,500 4,499
FINANCIAL - DIVERSIFIED - 9.1%
AMBAC Financial Group, Inc. 26,000 1,909
American Express Co. 43,945 2,258
Capital One Financial Corp. 40,000 2,735
Citigroup, Inc. 147,000 6,836
Fannie Mae 37,000 2,640
MBNA Corp. 139,000 3,585
Mellon Financial Corp. 56,000 1,642
Synovus Financial Corp. 67,500 1,709
Wachovia Corp. 57,000 2,537
Wells Fargo & Co. 88,350 5,056
------
30,907
FINANCIAL SERVICES - 0.5%
Golden West Financial Corp. 17,000 1,808
FOODS - 4.9%
Bunge, Ltd. 49,000 1,908
Coca-Cola Co. 90,100 4,548
Hershey Foods Corp. 39,400 1,823
PepsiCo, Inc. 65,550 3,532
Sara Lee Corp. 149,600 3,439
Wm.Wrigley Jr. Co. 28,500 1,797
------
17,047
HEALTH CARE - 10.4%
Barr Laboratories, Inc. (a) 153,650 5,178
Boston Scientific Corp. (a) 109,000 4,665
Medtronic, Inc. 104,888 5,110
Mylan Laboratories, Inc. 231,700 4,692
Pfizer, Inc. 203,200 6,965
St. Jude Medical, Inc. (a) 24,000 1,816
UnitedHealth Group, Inc. 114,100 7,102
------
35,528
HOTELS & MOTELS - 0.5%
Marriott International, Inc., Class A 37,000 1,846
INSURANCE - 4.2%
ACE, Ltd. 39,000 1,649
American International Group, Inc. 104,494 7,448
The St. Paul Travelers Companies, Inc. 43,460 1,762
The Allstate Corp. 77,020 3,585
------
14,444
See Financial Notes
30
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS CORE GROWTH FUND (CONT.)
SECURITY SHARES VALUE ($)
- -------- ------- ---------
INVESTMENT BANKING & BROKERAGE - 1.1%
T. Rowe Price Group, Inc. 32,300 1,628
The Goldman Sachs Group, Inc. 24,000 2,260
-------
3,888
MANUFACTURING - 5.8%
3M Co. 74,100 6,670
Deere & Co. 40,000 2,806
Illinois Tool Works, Inc. 47,600 4,564
Procter & Gamble Co. 110,000 5,988
-------
20,028
PERSONAL CARE - 2.8%
Avon Products, Inc. 96,100 4,435
Colgate-Palmolive Co. 35,680 2,085
Gillette Co. 73,000 3,095
-------
9,615
PHARMACEUTICALS - 0.7%
Zimmer Holdings, Inc. (a) 28,000 2,470
RESTAURANTS - 2.1%
McDonald's Corp. 78,000 2,028
Starbucks Corp. (a) 123,800 5,383
-------
7,411
RETAIL - 11.3%
Costco Wholesale Corp. 99,000 4,066
CVS Corp. 185,000 7,773
eBay, Inc. (a) 16,900 1,554
Home Depot, Inc. 183,000 6,441
Lowe's Cos., Inc. 27,300 1,435
Nordstrom, Inc. 84,800 3,613
Target Corp. 120,650 5,124
The Gap, Inc. 77,000 1,867
The TJX Cos., Inc. 179,500 4,333
Walgreen Co. 65,200 2,361
-------
38,567
SERVICES - 5.5%
Apollo Group, Inc., Class A (a) 64,600 5,703
Cendant Corp. 197,500 4,835
First Data Corp. 82,000 3,651
Getty Images, Inc. (a) 31,600 1,896
Manpower, Inc. 59,300 3,011
-------
19,096
TELECOMMUNICATIONS - 5.4%
Motorola, Inc. 263,810 4,815
Nextel Communications, Inc. (a) 191,000 5,092
QUALCOMM, Inc. 58,500 4,269
Scientific-Atlanta, Inc. 56,855 1,961
Verizon Communications, Inc. 73,000 2,642
-------
18,779
-------
TOTAL COMMON STOCKS 342,546
Cost: $302,527
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
- ----------------------------- ------------- ---------
REPURCHASE AGREEMENTS - 0.1%
Fifth Third Bank, 1.25%, 07/01/04
(Proceeds at maturity $134,
collateralized by Federal Home Loan
Mortgage Corp. security, 5.00%,
10/01/18)
Cost: $134 134 134
--------
TOTAL INVESTMENTS - 99.4% 342,680
Cost: $302,661 (c)
Percentages indicated are based on net assets of $344,830.
(a) Non-income producing security.
(b) Restricted security constituting 0.00% of net assets which may not be
publicly sold without registration under the Securities Act of 1933. This
security is valued at its fair value as determined in good faith under
consistently applied procedures under the general supervision of the Trust's
Board of Trustees. Additional information on the security is as follows:
Acquisition Date: March 3, 1995
Cost: $300
Value: $0
(c) Represents cost for financial reporting purposes and differs from federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $4,849. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $40,995
Unrealized depreciation (5,825)
-------
Net unrealized appreciation $35,170
31
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS 300 FUND
SECURITY SHARES VALUE ($)
- -------- -------- ---------
COMMON STOCKS - 101.2%
AIR FREIGHT - 1.8%
FedEx Corp. 400 33
United Parcel Service, Class B 1,165 87
---
120
AIRLINES - 0.2%
JetBlue Airways Corp. (a) 100 3
Southwest Airlines Co. 830 14
---
17
AUTO MANUFACTURING - 0.1%
PACCAR, Inc. 150 9
BANKS - 1.7%
Bank of New York Co., Inc. 800 24
BB&T Corp. 600 22
Fifth Third Bancorp 600 33
National City Corp. 600 21
Suntrust Banks, Inc. 300 19
---
119
BIOTECHNOLOGY - 1.4%
Allergan, Inc. 100 9
Biogen Idec, Inc. (a) 475 30
Chiron Corp. (a) 200 9
Forest Laboratories, Inc. (a) 400 23
Genzyme Corp. (a) 200 9
Gilead Sciences, Inc. (a) 200 13
MedImmune, Inc. (a) 200 5
---
98
BROADCASTING - 0.6%
Clear Channel Communications, Inc. 600 22
Univision Communications, Inc. (a) 500 16
---
38
CHEMICALS - 1.7%
Air Products & Chemicals, Inc. 200 10
Amgen, Inc. (a) 1,400 77
Engelhard Corp. 200 6
Praxair, Inc. 400 16
Sigma-Aldrich Corp. 100 6
---
115
COMPUTERS - 11.3%
Automatic Data Processing 700 29
Citrix Systems, Inc. (a) 225 5
Corning, Inc. (a) 1,480 19
Dell, Inc. (a) 2,700 97
EMC Corp. (a) 2,400 27
Hewlett-Packard Co. 3,210 68
Intel Corp. 6,830 189
International Business Machines Corp. 1,850 163
Intuit, Inc. (a) 200 8
Lexmark International, Inc. (a) 150 14
National Instruments Corp. 100 3
Network Appliance, Inc. (a) 200 4
Novell, Inc. (a) 400 3
Oracle Corp. (a) 5,500 66
SunGard Data Systems, Inc. (a) 500 13
Symantec Corp. (a) 400 18
Yahoo!, Inc. (a) 1,400 51
---
777
CONSTRUCTION - 0.3%
Centex Corp. 200 9
D. R. Horton, Inc. 150 4
Lennar Corp. 200 9
---
22
CONSUMER PRODUCTS - 1.1%
Black & Decker Corp. 100 6
Clorox Co. 300 16
Kimberly-Clark Corp. 500 33
Newell Rubbermaid, Inc. 500 12
Whirlpool Corp. 100 7
---
74
ELECTRICAL EQUIPMENT - 1.9%
American Power Conversion Corp. 220 4
Emerson Electric Co. 400 25
Molex, Inc. 400 13
Sanmina Corp. (a) 600 5
Tyco International, Ltd. 2,110 70
W.W. Grainger, Inc. 200 12
---
129
ELECTRONICS - 6.0%
Adobe Systems, Inc. 200 9
Analog Devices, Inc. 300 14
Applied Materials, Inc. (a) 1,800 35
Broadcom Corp., Class A (a) 300 14
Cisco Systems, Inc. (a) 7,330 174
Electronic Arts, Inc. (a) 400 22
Harman International Industries, Inc. 200 18
JDS Uniphase Corp. (a) 800 3
Johnson Controls, Inc. 200 11
Juniper Networks, Inc. (a) 600 15
Linear Technology Corp. 300 12
Maxim Integrated Products, Inc. 350 18
NVIDIA Corp. (a) 100 2
Rockwell Automation, Inc. 100 4
SPX Corp. 200 9
Texas Instruments, Inc. 1,800 44
Xilinx, Inc. 300 10
---
414
32
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS 300 FUND (CONT.)
SECURITY SHARES VALUE ($)
- -------- ------ ---------
ENERGY & UTILITIES - 4.0%
AES Corp. (a) 1,300 13
Anadarko Petroleum Corp. 200 12
Apache Corp. 400 17
Baker Hughes, Inc. 300 11
BJ Services Co. (a) 200 9
Burlington Resources, Inc. 400 14
Calpine Corp. (a) 300 1
ConocoPhillips 700 54
Devon Energy Corp. 200 13
Diamond Offshore Drilling, Inc. 200 5
EOG Resources, Inc. 200 12
Equitable Resources, Inc. 135 7
KeySpan Corp. 200 7
Kinder Morgan, Inc. 200 12
NiSource, Inc. 300 6
Noble Corp. (a) 200 8
Pepco Holdings, Inc. 100 2
Pioneer Natural Resources Co. 200 7
Pogo Producing Co. 100 5
Puget Energy Inc. 100 2
Smith International, Inc. (a) 100 6
The Williams Cos., Inc. 1,100 13
Transocean, Inc. (a) 200 6
Valero Energy Corp. 200 15
XTO Energy, Inc. 500 15
---
272
ENTERTAINMENT - 3.1%
Comcast Corp., Class A (a) 2,300 64
Time Warner, Inc. (a) 4,800 85
Viacom, Inc. 1,800 64
---
213
FINANCIAL - DIVERSIFIED - 14.6%
AMBAC Financial Group, Inc. 200 15
American Express Co. 1,400 72
Capital One Financial Corp. 300 21
Citigroup, Inc. 5,500 255
Fannie Mae 1,000 71
Freddie Mac 700 44
J.P. Morgan Chase & Co. 2,200 85
Lehman Brothers Holdings, Inc. 400 30
MBNA Corp. 1,300 34
Mellon Financial Corp. 400 12
Merrill Lynch & Co. 1,000 54
MetLife, Inc. 800 29
Moody's Corp. 200 13
Northern Trust Corp. 200 8
SLM Corp. 600 24
State Street Corp. 300 15
Synovus Financial Corp. 500 13
Wachovia Corp. 1,400 62
Washington Mutual, Inc. 900 35
Wells Fargo & Co. 1,760 100
---
992
FINANCIAL SERVICES - 0.7%
Charles Schwab Corp. 1,400 13
Golden West Financial Corp. 200 22
Principal Financial Group 300 10
---
45
FOODS - 5.2%
Bunge, Ltd. 100 4
Coca-Cola Co. 2,600 130
General Mills, Inc. 300 14
H.J. Heinz Co. 300 12
Hershey Foods Corp. 400 19
Kellogg Co. 449 19
McCormick & Co., Inc. 100 3
Pepsi Bottling Group, Inc. 500 15
PepsiCo, Inc. 1,850 100
Sara Lee Corp. 850 20
SUPERVALU, Inc. 100 3
Wm.Wrigley Jr. Co. 300 19
---
358
HEALTH CARE - 12.9%
Baxter International, Inc. 800 28
Becton, Dickinson & Co. 400 21
Biomet, Inc. 200 9
Boston Scientific Corp. (a) 900 39
Cardinal Health, Inc. 500 35
Eli Lilly & Co. 1,200 84
Express Scripts, Inc. (a) 100 8
Guidant Corp. 400 22
Health Management Associates Inc.,
Class A 100 2
Johnson & Johnson, Inc. 3,100 173
Laboratory Corporation
of America Holdings (a) 225 9
Medtronic, Inc. 1,300 63
Mylan Laboratories, Inc. 150 3
Pfizer, Inc. 8,125 279
Quest Diagnostics, Inc. 100 8
St. Jude Medical, Inc. (a) 200 15
Stryker Corp. 520 29
UnitedHealth Group, Inc. 600 37
WellPoint Health Networks, Inc. (a) 200 22
---
886
HOTELS & MOTELS - 0.1%
Marriott International, Inc. Class A 200 10
33
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS 300 FUND (CONT.)
SECURITY SHARES VALUE ($)
- -------- ------ ---------
INSURANCE - 5.2%
American International Group, Inc. 2,815 201
Anthem, Inc. (a) 100 9
Hartford Financial Services Group, Inc. 400 27
Marsh & McLennan Cos., Inc. 500 23
MBIA, Inc. 200 11
Progressive Corp. 200 17
The St. Paul Travelers Companies, Inc. 870 35
The Allstate Corp. 700 33
---
356
INVESTMENT BANKING & BROKERAGE - 0.8%
T. Rowe Price Group, Inc. 170 9
The Goldman Sachs Group, Inc. 500 47
---
56
LEISURE - 0.4%
Harley-Davidson, Inc. 400 25
MANUFACTURING - 5.9%
3M Co. 800 72
American Standard Cos., Inc. (a) 300 12
Bausch & Lomb, Inc. 100 7
Cintas Corp. 135 6
Dana Corp. 100 2
Deere & Co. 300 21
Donaldson Co., Inc. 100 3
Dover Corp. 300 13
Eaton Corp. 200 13
Ecolab, Inc. 200 6
Gentex Corp. 105 4
Illinois Tool Works, Inc. 300 29
Ingersoll-Rand Co. 200 14
Mattel, Inc. 800 15
Nucor Corp. 200 15
Parker Hannifin Corp. 100 6
Procter & Gamble Co. 2,702 146
Sealed Air Corp. (a) 100 5
Smurfit-Stone Container Corp. (a) 600 12
Sonoco Products Co. 100 3
Worthington Industries, Inc. 100 2
---
406
OFFICE EQUIPMENT & SUPPLIES - 0.3%
Avery Dennison Corp. 200 13
Pitney Bowes, Inc. 200 9
---
22
PERSONAL CARE - 1.8%
Avon Products, Inc. 600 28
Colgate-Palmolive Co. 560 33
Gillette Co. 1,100 46
The Estee Lauder Cos., Inc., Class A 300 15
---
122
PHARMACEUTICALS - 0.5%
McKesson Corp. 400 14
Zimmer Holdings, Inc. (a) 200 17
---
31
PUBLISHING - 0.9%
Gannett Co., Inc. 310 26
McGraw-Hill Cos., Inc. 200 15
New York Times Co. 200 9
Tribune Co. 300 14
---
64
RAILROADS - 0.3%
Norfolk Southern Corp. 700 19
REAL ESTATE - 0.1%
The St. Joe Co. 120 5
RESTAURANTS - 0.7%
McDonald's Corp. 1,300 34
Starbucks Corp. (a) 400 17
---
51
RETAIL - 7.1%
AutoZone, Inc. (a) 100 8
Bed Bath & Beyond, Inc. (a) 300 12
Best Buy & Co., Inc. 400 20
Chico's FAS, Inc. (a) 105 5
Coach, Inc. (a) 300 14
Costco Wholesale Corp. 400 16
CVS Corp. 430 18
Dollar General Corp. 400 8
eBay, Inc. (a) 700 64
Family Dollar Stores, Inc. 400 12
Hasbro, Inc. 100 2
Home Depot, Inc. 2,415 84
Limited, Inc. 725 14
Lowe's Cos., Inc. 800 42
Masco Corp. 515 16
Staples, Inc. 530 16
Target Corp. 1,000 42
The Gap, Inc. 868 21
The TJX Cos., Inc. 500 12
Tiffany & Co. 300 11
Walgreen Co. 1,100 40
Whole Foods Market, Inc. 100 10
---
487
34
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS 300 FUND (CONT.)
SECURITY SHARES VALUE ($)
- -------- ------ ---------
SERVICES - 2.9%
Apollo Group, Inc., Class A (a) 200 18
ARAMARK Corp. 400 12
Career Education Corp. (a) 200 9
Cendant Corp. 1,000 24
Expeditors International of
Washington, Inc. 200 10
First Data Corp. 900 39
Fiserv, Inc. (a) 400 16
Monster Worldwide, Inc. (a) 100 3
Omnicom Group, Inc. 200 15
Pall Corp. 100 3
Paychex, Inc. 300 10
Sysco Corp. 710 25
Unisys Corp. (a) 700 10
Viad Corp. 125 3
-----
197
TELECOMMUNICATIONS - 5.6%
Lucent Technologies, Inc. (a) 5,000 19
Motorola, Inc. 2,500 46
Nextel Communications, Inc. (a) 1,200 32
QUALCOMM, Inc. 800 58
SBC Communications, Inc. 3,530 86
Scientific-Atlanta, Inc. 200 7
Sprint Corp. 1,517 27
UTStarcom, Inc. (a) 130 4
Verizon Communications, Inc. 2,950 106
-----
385
-----
TOTAL COMMON STOCKS 6,934
Cost: $6,544
TOTAL INVESTMENTS - 101.2% 6,934
Cost: $6,544 (b)
Percentages indicated are based on net assets of $6,849.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs from federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $14. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $ 527
Unrealized depreciation (151)
-----
Net unrealized appreciation $ 376
CITIZENS SMALL CAP VALUE FUND
SECURITY SHARES VALUE ($)
- -------- ------ ---------
COMMON STOCKS - 94.6%
AIRLINES - 3.4%
MAIR Holdings, Inc. (a) 5,760 47
BANKS - 1.6%
Bank Mutual Corp. 540 6
NewAlliance Bancshares, Inc. (a) 1,120 16
---
22
COMPUTERS - 7.9%
Blue Martini Software, Inc. (a) 2,426 11
Computer Horizons Corp. (a) 11,235 45
NetIQ Corp. (a) 970 13
Techteam Global, Inc. (a) 1,894 17
Tier Technologies, Inc. (a) 2,380 23
---
109
ELECTRONICS -7.9%
C-COR, Inc. (a) 750 8
Cabot Microelectronics Corp. (a) 820 25
Lakeland Industries, Inc. (a) 1,391 33
ONYX Software Corp. (a) 4,328 18
Optical Communication Products, Inc. (a) 4,563 11
Selectica, Inc. (a) 2,850 14
---
109
ENERGY & UTILITIES - 8.6%
Cambior, Inc. (a) 7,492 20
Coeur d'Alene Mines Corp. (a) 965 4
Forest Oil Corp. (a) 795 22
Global Industries Ltd. (a) 4,575 27
Pogo Producing Co. 270 13
Stone Energy Corp. (a) 225 10
UGI Corp. (a) 700 22
---
118
FINANCIAL - DIVERSIFIED - 2.4%
American Financial Realty Trust 920 13
BISYS Group, Inc. (a) 1,385 20
---
33
FOODS - 3.2%
Chiquita Brands International, Inc. (a) 720 15
Sanderson Farms, Inc. 543 29
---
44
HEALTH CARE - 3.1%
Cross Country Healthcare, Inc. (a) 735 13
CV Therapeutics, Inc. (a) 900 15
Vical, Inc. (a) 2,400 14
---
42
INSURANCE - 2.6%
American Medical Security Group, Inc. (a) 1,330 36
35
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS SMALL CAP VALUE FUND (CONT.)
SECURITY SHARES VALUE ($)
- -------- ------ ---------
MANUFACTURING - 12.1%
Compass Minerals International, Inc. 2,280 44
Credence Systems Corp. (a) 1,350 19
Crown Holdings, Inc. (a) 1,985 20
Microtune, Inc. (a) 7,344 34
Omnova Solutions, Inc. (a) 2,820 17
Silgan Holdings, Inc. 385 16
Standard Motor Products, Inc. 470 7
U.S. Home Systems, Inc. (a) 1,300 9
-----
166
MULTIMEDIA - 3.5%
Alloy, Inc. (a) 2,880 17
Insight Communications Co., Inc. (a) 3,270 31
-----
48
PHARMACEUTICALS - 3.1%
A.P. Pharma, Inc. (a) 2,610 9
Noven Pharmaceuticals, Inc. (a) 680 15
Par Pharmaceutical Cos., Inc. (a) 542 19
-----
43
REAL ESTATE - 1.2%
Sunterra Corp. (a) 1,370 17
RESTAURANTS - 0.9%
Champps Entertainment, Inc. (a) 1,510 12
RETAIL - 7.7%
Bon-Ton Stores 840 12
Claire's Stores, Inc. 1,170 24
Department 56, Inc. (a) 1,025 16
Hancock Fabrics, Inc. 1,611 21
Talbots, Inc. 383 15
Tommy Hilfiger Corp. (a) 893 14
Too, Inc. (a) 220 4
-----
106
SERVICES - 21.4%
Captaris, Inc. (a) 2,000 13
Chemed Corp. 850 41
Digital Generation Systems, Inc. (a) 19,370 29
Dycom Industries, Inc. (a) 750 21
Freemarkets, Inc. (a) 2,870 19
Hawaiian Electric Industries, Inc. 600 16
IKON Office Solutions, Inc. 2,060 24
On Assignment, Inc. (a) 3,440 20
Per-Se Technologies, Inc. (a) 850 12
Precis, Inc. (a) 3,048 8
Private Business, Inc. (a) 8,795 21
SM&A (a) 1,050 9
Stamps.com, Inc. (a) 1,782 18
Swift Transportation Co., Inc. (a) 1,295 23
Tetra Tech, Inc. (a) 1,310 21
-----
295
TELECOMMUNICATIONS - 4.0%
Celeritek, Inc. 2,733 10
Glenayre Technologies, Inc. (a) 4,800 11
MDSI Mobile Data Solutions, Inc. (a) 1,340 9
Talk America Holdings, Inc. (a) 725 6
Webmethods, Inc. (a) 2,220 19
-----
55
-----
TOTAL COMMON STOCKS 1,302
Cost: $1,274
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
- ----------------------------- ------------- ---------
REPURCHASE AGREEMENTS - 3.5%
Fifth Third Bank, 1.25%, 07/01/04
(Proceeds at maturity $48,
collateralized by Federal Home Loan
Mortgage Corp. security,
5.00%, 10/01/18)
Cost: $48 48 48
-----
TOTAL INVESTMENTS - 98.1% 1,350
Cost: $1,322 (b)
Percentages indicated are based on net assets of $1,376.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs for federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $7. Cost for
federal income tax purposes differs from value by net unrealized appreciation of
securities as follows:
Unrealized appreciation $61
Unrealized depreciation (40)
---
Net unrealized appreciation $21
See Financial Notes
36
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS VALUE FUND
SECURITY SHARES VALUE ($)
- -------- ------ ---------
COMMON STOCKS - 99.6%
AIR FREIGHT - 2.9%
FedEx Corp. 8,440 689
APPAREL MANUFACTURERS - 1.2%
Reebok International, Ltd. 4,200 151
V.F. Corp. 2,815 137
-----
288
AUTO MANUFACTURERS - 0.5%
PACCAR, Inc. 2,210 128
BANKS - 3.3%
Bank of America Corp. 6,200 525
KeyCorp 8,900 266
-----
791
CHEMICALS - 1.9%
Amgen, Inc. (a) 5,950 325
Engelhard Corp. 3,725 120
-----
445
COMPUTERS - 6.5%
Affiliated Computer Services, Inc.(a) 2,355 125
Hewlett-Packard Co. 27,530 580
Intel Corp. 4,130 114
International Business Machines Corp. 4,535 400
Microsoft Corp. 5,500 157
Storage Technology Corp. (a) 5,690 165
-----
1,541
CONSTRUCTION - 1.9%
KB Home 2,070 142
Lafarge North America, Inc. 6,920 300
-----
442
CONSUMER PRODUCTS - 2.4%
Kimberly-Clark Corp. 8,800 580
ELECTRONICS - 6.1%
Agilent Technologies, Inc. (a) 12,375 362
Applied Materials, Inc. (a) 19,155 376
International Rectifier Corp. (a) 3,530 146
National Semiconductor Corp. (a) 11,090 244
QLogic Corp. (a) 4,550 121
SPX Corp. 4,720 219
-----
1,468
ENERGY & UTILITIES - 7.4%
Anadarko Petroleum Corp. 5,335 313
Apache Corp. 6,930 302
ConocoPhillips 9,140 696
Devon Energy Corp. 4,090 270
NiSource, Inc. 9,390 194
-----
1,775
ENTERTAINMENT - 1.7%
Viacom, Inc. 11,030 394
FINANCIAL - DIVERSIFIED - 12.0%
Capital One Financial Corp. 4,605 315
Citigroup, Inc. 7,600 353
Freddie Mac 6,275 397
J.P. Morgan Chase & Co. 8,400 326
Lehman Brothers Holdings, Inc. 3,430 258
MBNA Corp. 17,820 460
MetLife, Inc. 8,860 318
Wachovia Corp. 9,900 441
-----
2,868
FOODS - 4.8%
Bunge, Ltd. 6,130 239
General Mills, Inc. 4,530 215
Pepsi Bottling Group, Inc. 7,745 237
Sara Lee Corp. 19,665 452
-----
1,143
HEALTH CARE - 11.1%
AmerisourceBergen Corp. 3,590 215
Apogent Technologies, Inc. (a) 5,200 166
Baxter International, Inc. 18,245 629
Beckman Coulter, Inc. 5,520 337
Becton, Dickinson & Co. 8,775 455
Dentsply International, Inc. 5,020 262
Merck & Co., Inc. 12,245 582
-----
2,646
INSURANCE - 7.1%
ACE, Ltd. 4,600 194
Anthem, Inc. (a) 5,020 450
Fidelity National Financial Corp. 2,915 109
Hartford Financial Services Group, Inc. 5,250 361
The St. Paul Travelers Companies, Inc. 7,030 285
The Allstate Corp. 6,150 286
-----
1,685
MANUFACTURING - 4.4%
Dana Corp. 8,100 159
Deere & Co. 5,795 405
Eaton Corp. 1,880 122
Ingersoll-Rand Co. 3,700 253
Pactiv Corp. (a) 4,880 122
-----
1,061
PHARMACEUTICALS - 0.5%
Watson Pharmaceuticals, Inc. (a) 4,145 112
PUBLISHING - 1.4%
Gannett Co., Inc. 4,060 344
37
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS VALUE FUND (CONT.)
SECURITY SHARES VALUE ($)
- -------- ------ ---------
RESTAURANTS - 2.5%
Brinker International, Inc. (a) 4,675 160
McDonald's Corp. 16,875 438
------
598
RETAIL - 8.0%
CVS Corp. 11,945 502
Federated Department Stores, Inc. 3,330 164
Kroger Co. (a) 24,480 446
Limited, Inc. 6,000 112
Masco Corp. 11,075 345
Nieman Marcus Group, Inc., Class A 3,165 176
Office Depot, Inc. (a) 9,225 165
------
1,910
SERVICES - 5.2%
Cendant Corp. 25,255 619
Fair Isaac & Co., Inc. 2,770 92
Omnicom Group, Inc. 4,560 346
Unisys Corp. (a) 13,000 180
------
1,237
TELECOMMUNICATIONS - 6.8%
BellSouth Corp. 12,140 318
Motorola, Inc. 35,180 642
Scientific-Atlanta, Inc. 7,930 274
Verizon Communications, Inc. 10,785 390
------
1,624
------
TOTAL COMMON STOCKS 23,769
Cost: $21,352
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE ($)
- ----------------------------- ------------ ---------
REPURCHASE AGREEMENTS - 1.3%
Fifth Third Bank, 1.25%, 07/01/04
(Proceeds at maturity $311,
collateralized by Federal Home Loan
Mortgage Corp. security, 5.00%,
10/01/18)
Cost: $311 311 311
------
TOTAL INVESTMENTS - 100.9% 24,080
Cost: $21,663 (b)
Percentages indicated are based on net assets of $23,871.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs for federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $122. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $2,502
Unrealized depreciation (207)
------
Net unrealized appreciation $2,295
CITIZENS GLOBAL EQUITY FUND
SECURITY SHARES VALUE ($)
- -------- ------- ---------
COMMON STOCKS - 97.5%
AUTOMOBILE MANUFACTURING - 1.3%
Honda Motor Co., Ltd. 27,400 1,324
BANKS - 1.0%
Bank of New York Co., Inc. 36,300 1,070
BIOTECHNOLOGY - 5.6%
Amgen, Inc. (a) 17,500 955
Applied Biosystems Group 57,800 1,257
Gilead Sciences, Inc. (a) 17,000 1,139
Roche Holding AG 24,151 2,397
------
5,748
BROADCASTING - 4.4%
British Sky Broadcasting Group plc 198,283 2,244
Clear Channel Communications, Inc. 33,000 1,219
Univision Communications, Inc. (a) 33,000 1,054
------
4,517
COMPUTERS - 10.4%
Automatic Data Processing, Inc. 26,100 1,093
Cisco Systems, Inc. (a) 111,400 2,640
EMC Corp. (a) 150,000 1,710
Intel Corp. 40,000 1,104
Microsoft Corp. 82,000 2,342
SAP AG 11,000 1,838
------
10,727
ELECTRICAL EQUIPMENT - 8.7%
Agilent Technologies (a) 35,100 1,028
Analog Devices, Inc. 29,900 1,408
Emerson Electric Co. 33,100 2,103
Flextronics International (a) 93,770 1,496
Taiwan Semiconductor
Manufacturing Co. Ltd. ADR 133,524 1,110
Teradyne, Inc. (a) 80,000 1,815
------
8,960
ENERGY & UTILITIES - 6.9%
Apache Corp. 26,300 1,145
BP Amoco plc 355,955 3,154
EOG Resources, Inc. 25,000 1,493
Noble Corp. (a) 36,000 1,364
------
7,156
FINANCIAL - DIVERSIFIED - 12.4%
American Express Co. 35,000 1,798
Bank of America Corp. 14,000 1,185
Citigroup, Inc. 62,000 2,884
HBOS plc 69,628 864
HSBC Holdings plc 99,982 1,491
Mitsubishi Tokyo Financial Group, Inc. 62 575
Mitsubishi Tokyo Financial Group, Inc. ADR 148,000 1,387
UBS AG 37,729 2,665
------
12,849
See Financial Notes
38
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS GLOBAL EQUITY FUND (CONT.)
SECURITY SHARES VALUE ($)
-------- ------ ---------
FOOD & BEVERAGES - 3.8%
Compass Group plc 177,388 1,086
Nestle SA 5,678 1,518
The Coca-Cola Co. 25,000 1,262
---------
3,866
HEALTH CARE - 9.3%
Cardinal Health, Inc. 14,000 981
Eli Lilly & Co. 10,000 699
GlaxoSmithKline ADR 2,546 106
GlaxoSmithKline plc 104,405 2,120
Medtronic, Inc. 41,500 2,022
Pfizer, Inc. 67,400 2,309
Sanofi-Synthelabo SA 20,733 1,317
---------
9,554
HOTELS & MOTELS - 1.9%
Hilton Hotels Corp. 102,500 1,913
INSURANCE - 7.4%
American International Group, Inc. 29,000 2,067
AXA 75,128 1,658
AXA ADR 4,123 91
ING Groep NV 91,569 2,167
Zurich Financial Services AG 10,194 1,613
---------
7,596
MANUFACTURING - 10.0%
Assa Abloy AB, Class B 116,200 1,489
CRH plc 83,498 1,767
Eaton Corp. (a) 36,500 2,363
Komatsu, Ltd. 400,000 2,430
Rockwell Automation, Inc. 60,000 2,251
---------
10,300
PERSONAL CARE - 3.1%
Gillette Co. 36,000 1,526
L'Oreal SA 20,951 1,678
---------
3,204
REAL ESTATE - 1.3%
Sun Hung Kai Properties Ltd. 162,000 1,329
RETAIL - 4.5%
Seven-Eleven Japan Co., Ltd. 40,000 1,309
Sysco Corp. 22,600 811
Target Corp. 32,000 1,358
The TJX Cos., Inc. 49,000 1,183
---------
4,661
TELECOMMUNICATIONS - 5.5%
NTT DoCoMo, Inc. 590 1,057
Telefonica SA 101,564 1,505
Telefonica SA ADR 1,081 48
Vodafone Group plc 1,381,639 3,035
---------
5,645
---------
TOTAL COMMON STOCKS 100,419
Cost: $91,694
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
----------------------------- ------------- ---------
REPURCHASE AGREEMENTS - 1.3%
Fifth Third Bank, 1.25%, 07/01/04
(Proceeds at maturity $1,351,
collateralized by Federal Home Loan
Mortgage Corp. security, 5.00%,
10/01/18)
Cost: $ 1,351 1,351 1,351
-------
TOTAL INVESTMENTS - 98.8% 101,770
Cost: $93,045 (b)
Percentages indicated are based on net assets of $103,011.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs for federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $547. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $11,011
Unrealized depreciation (2,834)
-------
Net unrealized appreciation $ 8,177
ADR -- American Depositary Receipt
The fund's portfolio holdings as of June 30, 2004, were distributed among the
following countries:
PERCENTAGE OF NET ASSETS
------------------------
Short term
Equity & other Total
------ ------- -----
France 4.6% 4.6%
Germany 1.8% 1.8%
Hong Kong 1.3% 1.3%
Ireland 1.7% 1.7%
Japan 7.8% 7.8%
Netherlands 2.1% 2.1%
Singapore 1.5% 1.5%
Spain 1.5% 1.5%
Sweden 1.4% 1.4%
Switzerland 8.0% 8.0%
Taiwan 1.1% 1.1%
United Kingdom 13.6% 13.6%
United States 51.1% 1.3% 52.4%
---- --- ----
97.5% 1.3% 98.8%
39
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS BALANCED FUND
SECURITY SHARES VALUE ($)
-------- ------ ---------
COMMON STOCKS - 71.2%
AIR FREIGHT - 1.1%
FedEx Corp. 100 8
United Parcel Service, Class B 300 23
---
31
AIRLINES - 0.1%
Southwest Airlines Co. 228 4
AUTO MANUFACTURING - 0.3%
PACCAR, Inc. 150 9
BANKS - 1.4%
Bank of New York Co., Inc. 300 9
BB&T Corp. 200 7
Fifth Third Bancorp 200 11
National City Corp. 171 6
Suntrust Banks, Inc. 100 6
---
39
BIOTECHNOLOGY - 0.9%
Applera Corp. 100 2
Biogen Idec, Inc. (a) 100 6
Forest Laboratories, Inc. (a) 100 6
Gilead Sciences, Inc. (a) 131 9
MedImmune, Inc. (a) 100 2
---
25
BROADCASTING - 0.4%
Clear Channel 184 7
Communications, Inc.
Radio One, Inc. (a) 100 2
Univision Communications, Inc. (a) 100 3
---
12
CHEMICALS - 1.2%
Air Products & Chemicals, Inc. 100 5
Amgen, Inc. (a) 400 22
Praxair, Inc. 200 8
---
35
COMPUTERS - 7.9%
Automatic Data Processing 200 8
Corning, Inc. (a) 700 9
Dell, Inc. (a) 784 28
EMC Corp. (a) 1,050 12
Hewlett-Packard Co. 900 19
Intel Corp. 1,953 55
International Business Machines Corp. 550 48
Novell, Inc. (a) 100 1
Oracle Corp. (a) 1,600 19
Symantec Corp. (a) 148 6
Yahoo!, Inc. (a) 400 15
---
220
CONSTRUCTION - 0.1%
Lennar Corp. 100 4
CONSUMER PRODUCTS - 0.4%
Kimberly-Clark Corp. 150 10
ELECTRICAL EQUIPMENT - 0.9%
Emerson Electric Co. 100 6
Tyco International, Ltd. 600 20
---
26
ELECTRONICS - 4.4%
Adobe Systems, Inc. 100 5
Analog Devices, Inc. 139 7
Applied Materials, Inc. (a) 470 9
Broadcom Corp., Class A (a) 100 5
Cisco Systems, Inc. (a) 2,060 49
Electronic Arts, Inc. (a) 100 5
JDS Uniphase Corp. (a) 400 2
Johnson Controls, Inc. 100 5
Juniper Networks, Inc. (a) 100 2
Linear Technology Corp. 100 4
LSI Logic Corp. (a) 100 1
Maxim Integrated Products, Inc. 200 10
Texas Instruments, Inc. 540 13
Xilinx, Inc. (a) 200 7
---
124
ENERGY & UTILITIES - 2.9%
AES Corp. (a) 200 2
Anadarko Petroleum Corp. 100 6
Apache Corp. 140 6
Baker Hughes, Inc. 163 6
Burlington Resources, Inc. 200 7
Calpine Corp. (a) 200 1
ConocoPhillips 251 20
Devon Energy Corp. 100 7
Diamond Offshore Drilling, Inc. 100 2
KeySpan Corp. 100 4
Kinder Morgan, Inc. 100 6
Pepco Holdings, Inc. 300 5
Transocean, Inc. (a) 100 3
Valero Energy Corp. 100 7
---
82
ENTERTAINMENT - 2.2%
Comcast Corp. Class A (a) 700 20
Time Warner, Inc. (a) 1,400 24
Viacom, Inc. 529 19
---
63
See Financial Notes
40
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS BALANCED FUND (CONT.)
SECURITY SHARES VALUE ($)
-------- ------ ---------
FINANCIAL - DIVERSIFIED - 9.6%
American Express Co. 375 19
Citigroup, Inc. 1,554 71
Fannie Mae 260 19
Freddie Mac 200 13
J.P. Morgan Chase & Co. 600 23
MBNA Corp. 400 10
Mellon Financial Corp. 100 3
Merrill Lynch & Co. 300 16
MetLife, Inc. 200 7
Moody's Corp. 100 6
Northern Trust Corp. 200 8
SLM Corp. 100 4
State Street Corp. 100 5
Synovus Financial Corp. 100 3
Wachovia Corp. 400 18
Washington Mutual, Inc. 300 12
Wells Fargo & Co. 500 29
-----
266
FINANCIAL SERVICES - 0.7%
Charles Schwab Corp. 400 4
Golden West Financial Corp. 100 10
Principal Financial Group 200 7
-----
21
FOODS - 3.8%
Coca-Cola Co. 775 38
General Mills, Inc. 200 10
H.J. Heinz Co. 100 4
Hershey Foods Corp. 200 9
Kellogg Co. 100 4
Pepsi Bottling Group, Inc. 100 3
PepsiCo, Inc. 475 26
Wm.Wrigley Jr. Co. 200 13
-----
107
HEALTH CARE - 9.2%
Baxter International, Inc. 300 10
Becton, Dickinson & Co. 100 5
Boston Scientific Corp. (a) 300 13
Cardinal Health, Inc. 100 7
Eli Lilly & Co. 300 21
Guidant Corp. 100 6
Health Management Associates Inc., Class A 100 2
Johnson & Johnson, Inc. 900 50
Medtronic, Inc. 400 19
Mylan Laboratories, Inc. 100 2
Pfizer, Inc. 2,311 79
St. Jude Medical, Inc. (a) 100 8
Stryker Corp. 200 11
UnitedHealth Group, Inc. 174 11
WellPoint Health Networks, Inc. (a) 100 11
-----
255
INSURANCE - 3.9%
American International Group, Inc. 800 57
Hartford Financial Services Group, Inc. 100 7
Marsh & McLennan Co., Inc. 200 9
MBIA, Inc. 100 6
Progressive Corp. 100 9
The St. Paul Travelers 300 12
Companies, Inc.
The Allstate Corp. 200 9
-----
109
INVESTMENT BANKING & BROKERAGE - 0.5%
The Goldman Sachs Group, Inc. 150 14
LEISURE - 0.2%
Harley-Davidson, Inc. 100 6
MANUFACTURING - 4.4%
3M Co. 224 20
Deere & Co. 100 7
Dover Corp. 300 13
Eaton Corp. 100 6
Ecolab, Inc. 100 3
Illinois Tool Works, Inc. 74 7
Ingersoll-Rand Co. 100 7
Mattel, Inc. 100 2
Nucor Corp. 100 8
Parker Hannifin Corp. 100 6
Procter & Gamble Co. 788 43
-----
122
OFFICE EQUIPMENT & SUPPLIES - 0.3%
Pitney Bowes, Inc. 200 9
PERSONAL CARE - 1.2%
Avon Products, Inc. 200 9
Colgate-Palmolive Co. 200 12
Gillette Co. 317 13
-----
34
PHARMACEUTICALS - 0.6%
McKesson Corp. 200 7
Zimmer Holdings, Inc. (a) 100 9
-----
16
PUBLISHING - 0.7%
Gannett Co., Inc. 100 8
McGraw-Hill Cos., Inc. 100 8
Tribune Co. 100 5
-----
21
41
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS BALANCED FUND (CONT.)
SECURITY SHARES VALUE ($)
-------- ------ ---------
RAILROADS - 0.1%
Norfolk Southern Corp. 100 3
RESTAURANTS - 0.7%
McDonald's Corp. 400 10
Starbucks Corp. (a) 200 9
-----
19
RETAIL - 5.5%
Bed Bath & Beyond, Inc. (a) 125 5
Best Buy & Co., Inc. 200 10
Big Lots Inc. (a) 100 1
Costco Wholesale Corp. 200 8
CVS Corp. 100 4
Dollar General Corp. 100 2
eBay, Inc. (a) 200 18
Home Depot, Inc. 700 24
Limited, Inc. 300 6
Lowe's Cos., Inc. 200 11
Masco Corp. 188 6
RadioShack Corp. 200 6
Staples, Inc. 200 6
Target Corp. 300 13
The Gap, Inc. 400 10
The TJX Cos., Inc. 400 10
Walgreen Co. 333 12
-----
152
SERVICES - 1.8%
Apollo Group, Inc., Class A (a) 100 9
Cendant Corp. 300 7
First Data Corp. 300 12
Omnicom Group, Inc. 100 8
Paychex, Inc. 200 7
Sysco Corp. 212 8
-----
51
TELECOMMUNICATIONS - 3.8%
Lucent Technologies, Inc. (a) 1,700 6
Motorola, Inc. 700 13
Nextel Communications, Inc. (a) 380 10
QUALCOMM, Inc. 200 15
SBC Communications, Inc. 1,000 24
Sprint Corp. 400 7
Verizon Communications, Inc. 851 31
-----
106
-----
TOTAL COMMON STOCKS 1,995
Cost: $1,908
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
----------------------------- ------------- ---------
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.9%
First Horizon Alternative Mortgage
Securities,4.88%, 06/25/34 (b) 24 25
Cost: $25
CORPORATE BONDS - 6.7%
BANKS - 0.2%
Sovereign Bancorp, Inc., 10.50%, 11/15/06 5 6
BROADCASTING - 1.4%
Comcast Corp., 5.30%, 01/15/14 10 10
Cox Communications, Inc., 4.63%, 06/01/13 10 9
Emmis Operating Co., 6.88%, 05/15/12 10 10
Liberty Media Corp., 5.70%, 05/15/13 10 10
----
39
CONSTRUCTION - 0.2%
Toll Brothers, Inc., 4.95%, 03/15/14 5 5
ELECTRICAL EQUIPMENT - 0.2%
Fairchild Semiconductor, 10.50%, 02/01/09 5 5
ENERGY & UTILITIES - 0.5%
Valero Energy Corp., 4.75%, 06/15/13 5 5
XTO Energy, Inc., 6.25%, 04/15/13 10 10
----
15
FINANCIAL - DIVERSIFIED - 1.4%
American General Finance Corp.,
5.38%, 10/01/12 5 5
CIT Group, Inc., 5.00%, 02/13/14 10 9
Liberty Mutual Group, 5.75%, 03/15/14 10 10
MBNA America Bank Corp., 4.63%, 09/15/08 10 10
Washington Mutual, Inc., 4.63%, 04/01/14 10 9
----
43
INSURANCE - 0.2%
Ace, Ltd., 6.00%, 04/01/07 5 5
INVESTMENT BANKING & BROKERAGE - 0.4%
The Goldman Sachs Group, Inc.,
3.88%, 01/15/09 10 10
MANUFACTURING - 0.2%
American Standard, Inc., 7.38%, 02/01/08 5 5
RESTAURANTS - 0.4%
Dominos, Inc., 8.25%, 07/01/11 10 11
RETAIL - 0.6%
Kroger Co., 7.50%, 04/01/31 10 11
The GAP, Inc., 10.55%, 12/15/08 5 6
----
17
See Financial Notes
42
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS BALANCED FUND (CONT.)
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
----------------------------- ------------- ---------
TELECOMMUNICATIONS - 1.0%
Nextel Communications, Inc.,
5.95%, 03/15/14 10 9
7.38%, 08/01/15 10 10
Verizon Global Funding Corp., 4.38%, 06/01/13 10 9
-----
28
-----
TOTAL CORPORATE BONDS 189
Cost: $196
U.S. GOVERNMENT AGENCY OBLIGATIONS - 9.7%
FEDERAL HOME LOAN BANK - 1.0%
3.38%, 07/21/08 30 29
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.4%
2.88%, 09/15/05 3 3
3.25%, 02/25/08 4 4
4.25%, 05/04/09 10 10
4.50%, 01/15/13 9 9
5.50%, 10/01/18 95 98
-----
124
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.3%
1.88%, 12/15/04 6 6
3.25%, 01/15/08 9 9
5.25%, 01/15/09 14 15
6.38%, 06/15/09 3 3
4.38%, 09/15/12 4 4
4.50%, 12/01/18 19 18
6.50%, 07/01/32 5 5
6.00%, 11/01/32 6 6
5.50%, 03/01/33 36 36
5.50%, 04/01/33 18 18
-----
120
-----
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 273
Cost: $275
U.S. TREASURY NOTES - 4.2%
3.38%, 1/15/07 4 5
6.50%, 2/15/10 100 113
-----
Cost: $118 118
REPURCHASE AGREEMENTS - 3.2%
Fifth Third Bank, 1.25%, 07/01/04
(Proceeds at maturity $90,
collateralized by Federal Home Loan
Mortgage Corp. security, 5.00%,
10/01/18)
Cost: $90 90 90
-----
TOTAL INVESTMENTS - 95.9% 2,690
Cost: $2,612 (c)
Percentages indicated are based on net assets of $2,804.
(a) Non-income producing security.
(b) Variable rate security. The rate presented represents the rate in effect at
June 30, 2004.
(c) Represents cost for financial reporting purposes and differs for federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting by less than $1. Cost for
federal income tax purposes differs from value by net unrealized appreciation of
securities as follows:
Unrealized appreciation $131
Unrealized depreciation (53)
----
Net unrealized appreciation $ 78
43
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS INCOME FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
----------------------------- ------------- ---------
COLLATERALIZED MORTGAGE OBLIGATIONS - 3.3%
First Horizon Alternative Mortgage
Securities, 4.88%, 06/25/34 (a) 1,938 1,950
Cost: $1,966
CORPORATE BONDS - 47.4%
BANKS - 1.3%
Banknorth Group, Inc., 3.75%, 05/01/08 500 495
Sovereign Bancorp, Inc., 10.50%, 11/15/06 245 281
------
776
BROADCASTING - 11.9%
Comcast Corp.,
5.85%, 01/15/10 1,000 1,043
5.30%, 01/15/14 990 953
Cox Communications, Inc.,
7.10%, 10/01/12 1,000 1,097
4.60%, 06/01/13 990 914
Emmis Operating Co., 6.90%, 05/15/12 990 970
Liberty Media Corp., 5.70%, 05/15/13 990 975
Univison Communications, Inc.,
7.85%, 07/15/11 1,000 1,154
------
7,106
CONSTRUCTION - 1.5%
Toll Brothers, Inc., 4.95%, 03/15/14 (b) 995 920
ELECTRICAL EQUIPMENT - 2.5%
Fairchild Semiconductor, 10.50%, 02/01/09 495 538
Flextronics International, Ltd.,
6.50%, 05/15/13 (b) 1,000 975
------
1,513
ENERGY & UTILITIES - 3.7%
Valero Energy Corp., 4.75%, 06/15/13 995 936
XTO Energy, Inc.,
6.25%, 04/15/13 990 1,030
4.90%, 02/01/14 250 235
------
2,201
FINANCIAL - DIVERSIFIED - 8.0%
American General Finance Corp.,
5.40%, 10/01/12 995 997
CIT Group, Inc., 5.00%, 02/13/14 990 936
Liberty Mutual Group, 5.75%, 03/15/14 990 955
MBNA America Bank Corp., 4.60%, 09/15/08 990 993
Washington Mutual, Inc., 4.60%, 04/01/14 990 903
------
4,784
INSURANCE - 1.8%
Ace, Ltd., 6.00%, 04/01/07 995 1,051
INVESTMENT BANKING & BROKERAGE - 1.6%
The Goldman Sachs Group, Inc.,
3.90%, 01/15/09 990 965
MANUFACTURING - 1.8%
American Standard, Inc.,
7.40%, 02/01/08 995 1,075
PHARMACEUTICALS - 1.8%
AmerisourceBergen Corp.,
8.10%, 09/01/08 1,000 1,078
RESTAURANTS - 1.8%
Dominos, Inc., 8.25%, 07/01/11 990 1,049
RETAIL - 3.9%
Kroger Co., 7.50%, 04/01/31 990 1,096
The GAP, Inc., 10.55%, 12/15/08 995 1,204
------
2,300
TELECOMMUNICATIONS - 5.8%
Nextel Communications, Inc.,
5.95%, 03/15/14 490 451
7.40%, 08/01/15 990 1,000
Verizon Global Funding Corp.,
7.40%, 09/01/12 1,000 1,124
4.40%, 06/01/13 990 909
------
3,484
------
TOTAL CORPORATE BONDS 28,302
Cost: $28,244
U.S. GOVERNMENT AGENCY OBLIGATIONS - 35.4%
FEDERAL HOME LOAN MORTGAGE CORPORATION -17.5%
4.50%, 07/23/07 1,000 1,001
4.25%, 05/04/09 990 981
4.00%, 06/15/13 2,928 2,945
6.25%, 11/14/13 1,000 1,039
3.50%, 03/15/14 2,504 2,485
5.50%, 10/01/18 1,943 1,989
------
10,440
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 17.9%
2.75%, 08/11/06 2,000 1,983
5.00%, 11/17/11 1,000 994
4.50%, 12/01/18 1,872 1,835
6.50%, 08/01/31 837 873
6.00%, 08/01/32 830 849
5.50%, 04/01/33 4,101 4,093
------
10,627
------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 21,067
Cost: $21,285
See Financial Notes
44
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS INCOME FUND (CONT.)
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
----------------------------- ------------- ---------
U.S. TREASURY NOTES - 8.1%
3.40%, 01/15/07 2,000 2,542
6.50%, 02/15/10 2,000 2,254
------
TOTAL U.S. TREASURY NOTES 4,796
Cost: $4,752
REPURCHASE AGREEMENTS - 5.0%
Fifth Third Bank, 1.25%, 07/01/04
(Proceeds at maturity $2,994,
collateralized by Federal
Home Loan Mortgage Corp. security,
5.00%, 10/01/18)
Cost: $2,993 2,993 2,993
------
TOTAL INVESTMENTS - 99.2% 59,108
Cost: $59,240 (c)
Percentages indicated are based on net assets of $59,562.
(a) Variable rate security. The rate presented represents the rate in effect at
June 30, 2004.
(b) Rule 144A security.
(c) Represents cost for financial reporting purposes and differs from federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $25. Cost
for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
Unrealized appreciation $ 799
Unrealized depreciation (957)
-----
Net unrealized depreciation $(158)
CITIZENS ULTRA SHORT BOND FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
----------------------------- ------------- ---------
CORPORATE BONDS - 70.6%
AUTOMOTIVE FINANCE - 29.3%
American Honda Finance,
1.42%, 08/15/06 (a) (b) 350 351
BMW Vehicle Owner Trust, 1.94%, 02/25/07 250 249
Capital Auto Receivables Asset Trust,
1.29%, 01/16/06 (a) 300 300
Ford Credit Auto Owner Trust,
5.25%, 09/15/05 63 63
GS Auto Loan Trust, 2.08%, 04/16/07 250 250
Harley-Davidson Motorcycle Trust,
1.34%, 01/15/08 92 92
Honda Auto Receivables Owner Trust,
2.16%, 10/21/08 200 195
Toyota Auto Receivables Owner Trust,
1.69%, 03/15/07 250 249
4.39%, 05/15/09 100 102
USAA Auto Owners Trust, 1.58%, 06/15/07 250 248
Volkswagen Alt, 2.36%, 12/20/05 119 119
-----
2,218
BANKS - 6.1%
Bank of America Corp.,
7.88%, 05/16/05 100 105
4.75%, 10/15/06 100 103
Wells Fargo Co., 1.60%, 03/24/05 (a) 250 250
-----
458
BROADCASTING - 2.9%
TCI Communications, 8.00%, 08/01/05 210 221
COMPUTERS - 2.8%
Hewlett-Packard Co., 7.15%, 06/15/05 200 209
FINANCIAL - DIVERSIFIED - 15.3%
American Express Co.,
1.42%, 09/19/06 (a) 300 301
7.20%, 09/17/07 100 103
American General Finance,
7.45%, 01/15/05 50 51
3.00%, 11/15/06 250 247
Citibank Credit Card Master Trust,
6.65%, 11/15/06 150 153
Citicorp, 7.63%, 05/01/05 50 52
Merrill Lynch & Co., 1.35%, 04/28/05 (a) 250 250
-----
1,157
INSURANCE - 3.3%
Met Life Global Funding,
1.45%, 08/28/06 (a) (b) 250 250
45
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS ULTRA SHORT BOND FUND (CONT.)
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
----------------------------- ------------- ---------
PHARMACEUTICALS - 1.3%
Pfizer, Inc., 3.63%, 11/01/04 100 101
RETAIL - 2.7%
Kroger Co., 7.375%, 03/01/05 200 206
TELECOMMUNICATIONS - 6.9%
CBS Corp., 7.15%, 05/20/05 150 156
Chesapeake (Bell Atlantic Virginia),
6.13%, 07/15/05 100 104
Cox Communications Inc., 6.88%, 06/15/05 250 259
-----
519
-----
TOTAL CORPORATE BONDS 5,339
Cost: $5,362
U.S. GOVERNMENT AGENCY OBLIGATIONS - 5.7%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 5.4%
5.83%, 02/09/06 100 105
1.92%, 10/27/06 (a) 300 300
-----
405
STUDENT LOAN MARKETING ASSOCIATION - 0.3%
1.53%, 06/16/08 (a) 22 22
-----
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 427
Cost: $427
REPURCHASE AGREEMENTS - 23.4%
Fifth Third Bank, 1.25%, 07/01/04
(Proceeds at maturity $1,764,
collateralized by Federal Home
Loan Mortgage Corp. security, 5.00%,
10/01/18)
Cost: $1,764 1,764 1,764
-----
TOTAL INVESTMENTS - 99.7% 7,530
Cost: $7,553 (c)
Percentages indicated are based on net assets of $7,552.
(a) Variable rate security. The rate presented represents the rate in effect at
June 30, 2004.
(b) Rule 144A security.
(c) Represents cost for financial reporting and federal income tax purposes.
CITIZENS MONEY MARKET FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
----------------------------- ------------- ---------
CERTIFICATES OF DEPOSIT - 5.6%
City National Bank of New Jersey,
1.50%, 03/15/05 (a) 100 100
Independence Federal Savings Bank,
1.30%, 09/26/04 (a) 100 100
Mercantile Safe Deposit and Trust,
1.15%, 10/29/04 5,000 5,000
Self Help Credit Union, 1.44%, 03/13/05 (a) 100 100
------
TOTAL CERTIFICATES OF DEPOSIT 5,300
Cost: $5,300
COMMERCIAL PAPER - 73.5%
American General Finance Corp., 1.12%, 07/06/04 4,426 4,425
Atlantis One Funding Corp.,
1.43%, 11/08/04 (b) 4,500 4,477
Blue Ridge Asset Funding,
1.05%, 07/02/04 (b) 4,500 4,500
Charta Corp., 1.21%, 07/12/04 4,500 4,498
Cooperative Association of Tractor Dealers,
1.28%, 10/22/04 4,500 4,482
1.51%, 11/12/04 3,718 3,697
Fountain Square, 1.10%, 07/19/04 (b) 4,427 4,425
Galaxy Funding, Inc., 1.06%, 07/08/04 (b) 4,500 4,499
Galleon Capital, 1.50%, 07/01/04 (b) 4,500 4,500
Goldman Sachs Group, 1.32%, 08/23/04 3,500 3,494
ING America Insurance, 1.05%, 08/19/04 4,000 3,994
J.P. Morgan Chase & Co., 1.31%, 08/16/04 4,500 4,492
Merrill Lynch & Co., Inc., 1.45%, 07/01/04 4,500 4,500
Metlife Funding, 1.37%, 09/08/04 4,000 3,989
Pfizer, Inc., 1.14%, 10/13/04 4,000 3,987
UBS Finance Corp., 1.06%, 07/01/04 1,280 1,280
Verizon Network Funding, 1.08%, 07/07/04 4,000 3,999
------
TOTAL COMMERCIAL PAPER 69,238
Cost: $69,238
CORPORATE BONDS - 6.9%
American Express Centurion Bank,
1.18%, 07/14/04 (c) 3,000 3,000
Pelican Capital LLC, 1.33%, 04/01/28 (c) 520 520
Redding Life Care LLC, 1.38%, 10/01/05 (c) 3,000 3,000
------
TOTAL CORPORATE BONDS 6,520
Cost: $6,520
See Financial Notes
46
PORTFOLIO HOLDINGS JUNE 30, 2004 ($ X 1,000)
CITIZENS MONEY MARKET FUND (CONT.)
SECURITY, RATE, MATURITY DATE PRINCIPAL ($) VALUE ($)
- ----------------------------- ------------- ---------
MUNICIPAL NOTES - 3.7%
New York State Housing Finance Agency,
1.35%, 11/15/29 (c) 3,500 3,500
Cost: $ 3,500
U.S. GOVERNMENT AGENCY OBLIGATIONS - 8.5%
Student Loan Marketing Association
1.44%, 07/15/04 (c) 4,000 4,000
1.44%, 10/21/04 (c) 4,000 4,000
-----
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 8,000
-----
Cost: $8,000
TOTAL INVESTMENTS - 98.2% 92,558
Cost: $92,558 (d)
Percentages indicated are based on net assets of $94,242.
(a) Restricted security which may not be publicly sold without registration
under the Securities Act of 1933.
(b) Rule 144A security.
(c) Variable rate security. The rate presented represents the rate in effect at
June 30, 2004.
(d) Represents cost for financial reporting and federal income tax purposes.
47
STATEMENTS OF ASSETS AND LIABILITIES
SMALL CAP CORE EMERGING CORE GROWTH 300
GROWTH FUND GROWTH FUND FUND FUND
----------- ----------- ---- ----
ASSETS
Investments, at value $ 29,112,761 $ 180,427,668 $ 342,546,925 $ 6,934,089
Repurchase agreements 535,713 75,440 133,538 -
------------- ------------- ------------- -------------
Total investments 29,648,474 180,503,108 342,680,463 6,934,089
Cash - - - 9,283
Foreign currency - - - -
Receivables:
Interest and dividends 773 55,505 196,670 3,654
Investments sold 86,078 609,970 2,344,273 -
Tax reclaims - - - -
Due from investment adviser - - - 1,990
Deferred offering costs - - - 1,845
Prepaid expenses 7,172 17,634 23,055 13,201
------------- ------------- ------------- -------------
Total assets 29,742,497 181,186,217 345,244,461 6,964,062
LIABILITIES
Payables:
Due to custodian - - - -
Dividends to shareholders - - - -
Investments purchased - - - 109,284
Investment management fees 5,992 73,610 70,736 -
Administrative fees 1,798 11,042 21,221 419
Shareholder service fees 833 5,689 14,219 89
Distribution fees 2,996 18,037 29,901 698
Other accrued expenses 29,572 178,089 278,627 4,807
------------- ------------- ------------- -------------
Total liabilities 41,191 286,467 414,704 115,297
------------- ------------- ------------- -------------
NET ASSETS $ 29,701,306 $ 180,899,750 $ 344,829,757 $ 6,848,765
------------- ------------- ------------- -------------
NET ASSETS
Standard Shares:
Net assets $ 29,701,306 $ 165,781,703 $ 290,352,065 $ 6,848,765
Number of shares outstanding 2,741,226 12,746,115 16,041,448 613,950
Net asset value, offering and redemption
price per share $ 10.84 $ 13.01 $ 18.10 $ 11.16
Institutional Shares:
Net assets - $ 3,534,330 $ 52,842,237 -
Number of shares outstanding - 263,633 3,525,471 -
Net asset value, offering and redemption
price per share - $ 13.41 $ 14.99 -
Administrative Shares:
Net assets - $ 11,583,717 $ 1,635,455 -
Number of shares outstanding - 876,030 88,699 -
Net asset value, offering and redemption
price per share - $ 13.22 $ 18.44 -
Net assets consist of:
Paid-in capital $ 27,681,091 $ 355,641,761 $ 391,325,484 $ 6,435,171
Accumulated net investment income/loss - - - 13,494
Accumulated net realized gains/losses
on investments and foreign currencies 1,233,929 (188,274,207) (86,514,644) 10,201
Net unrealized appreciation/depreciation
on investments and foreign currencies 786,286 13,532,196 40,018,917 389,899
------------- ------------- ------------- -------------
NET ASSETS $ 29,701,306 $ 180,899,750 $ 344,829,757 $ 6,848,765
------------- ------------- ------------- -------------
Investments, at cost $ 28,862,188 $ 166,970,912 $ 302,661,546 $ 6,544,190
Foreign currency, at cost - - - -
See Financial Notes
48
AS OF JUNE 30, 2004
SMALL CAP VALUE GLOBAL EQUITY BALANCED INCOME ULTRA SHORT MONEY MARKET
VALUE FUND FUND FUND FUND FUND BOND FUND FUND
---------- ---- ---- ---- ---- --------- ----
$ 1,302,139 $ 23,768,854 $ 100,418,662 $ 2,600,315 $ 56,114,116 $ 5,765,962 $ 92,558,492
47,547 311,005 1,351,373 89,708 2,993,447 1,764,124 -
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
1,349,686 24,079,859 101,770,035 2,690,023 59,107,563 7,530,086 92,558,492
- - - - - - 1,783,503
- - 14,463 - - - -
438 28,739 100,865 10,711 708,658 31,427 62,380
17,552 1,251,722 1,178,642 109,497 - - -
- - 98,075 - - - -
2,166 - - 2,196 - 3,128 -
7,501 - - - - - -
17,711 10,352 16,621 5,661 11,229 5,978 18,410
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
1,395,054 25,370,672 103,178,701 2,818,088 59,827,450 7,570,619 94,422,785
- - - - - - 26,431
- - - 6,841 188,499 10,934 27,197
15,417 1,461,906 - 2,163 - - -
- 6,764 42,142 - 15,843 - 13,691
83 1,450 6,321 171 3,656 463 5,868
99 803 2,649 109 1,453 132 2,590
138 2,416 10,001 285 6,094 772 -
3,110 26,278 106,436 4,436 49,476 6,229 104,546
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
18,847 1,499,617 167,549 14,005 265,021 18,530 180,323
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 1,376,207 $ 23,871,055 $ 103,011,152 $ 2,804,083 $ 59,562,429 $ 7,552,089 $ 94,242,462
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 1,376,207 $ 23,871,055 $ 95,624,981 $ 2,804,083 $ 59,562,429 $ 7,552,089 $ 83,231,092
141,323 2,271,005 6,299,476 246,979 6,039,686 761,345 83,304,435
$ 9.74 $ 10.51 $ 15.18 $ 11.35 $ 9.86 $ 9.92 $ 1.00
- - $ 5,243,807 - - - $ 11,011,370
- - 336,516 - - - 11,013,161
- - $ 15.58 - - - $ 1.00
- - $ 2,142,364 - - - -
- - 139,453 - - - -
- - $ 15.36 - - - -
$ 1,384,551 $ 30,720,155 $ 226,225,592 $ 2,653,516 $ 65,222,274 $ 7,662,565 $ 94,251,545
- - (441,535) - - (255) -
(36,221) (9,265,638) (131,506,079) 72,112 (5,527,272) (87,234) (9,083)
27,877 2,416,538 8,733,174 78,455 (132,573) (22,987) -
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 1,376,207 $ 23,871,055 $ 103,011,152 $ 2,804,083 $ 59,562,429 $ 7,552,089 $ 94,242,462
- ------------- ------------- ------------- ------------- ------------- ------------- -------------
$ 1,321,809 $ 21,663,321 $ 93,045,433 $ 2,611,568 $ 59,240,136 $ 7,553,073 $ 92,558,492
- - 14,552 - - - -
49
STATEMENTS OF OPERATIONS
SMALL CAP CORE EMERGING CORE GROWTH 300
GROWTH FUND GROWTH FUND FUND FUND(1)
----------- ----------- ---- -----
INVESTMENT INCOME
Interest $ 4,920 $ 19,963 $ 21,328 $ 558
Dividend(3) 37,062 840,567 3,075,380 50,899
------------ ------------ ------------ ------------
Total investment income 41,982 860,530 3,096,708 51,457
EXPENSES
Investment management fees 126,528 1,863,135 1,830,177 8,015
Administrative fees 37,959 279,473 549,058 6,011
Distribution fees:
Standard shares 63,264 426,611 751,360 10,019
Administrative shares - 27,817 6,307 -
Shareholder service fees:
Standard shares 17,309 130,199 764,213 889
Institutional shares - 125 1,245 -
Administrative shares - 233 173 -
Transfer agent expenses:
Standard shares 76,362 540,416 707,230 9,606
Institutional shares - 353 3,694 -
Administrative shares - 7,219 2,226 -
Accounting expenses 14,378 75,011 143,729 8,505
Custody expenses 15,090 13,240 24,727 7,490
Offering costs - - - 8,446
Registration expenses 14,423 31,489 35,540 15,343
Trustee expenses 4,165 29,828 58,957 718
Other expenses 18,789 130,003 214,289 3,217
------------ ------------ ------------ ------------
Total expenses before reimbursements,
waivers, or expenses paid indirectly 388,267 3,555,152 5,092,925 78,259
Reimbursements or waivers from adviser - - - (42,028)
Expenses paid indirectly - (28,660) (72,041) -
------------ ------------ ------------ ------------
Net expenses 388,267 3,526,492 5,020,884 36,231
NET INVESTMENT INCOME/LOSS $ (346,285) $ (2,665,962) $ (1,924,176) $ 15,226
REALIZED AND UNREALIZED GAINS/LOSSES ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Realized gains/losses on investments
and foreign currency transactions $ 6,022,751 $ 37,477,874 $ 43,684,981 $ 10,201
Change in unrealized appreciation/depreciation
on investments and foreign currencies (1,011,664) (3,529,402) (6,189,966) 389,899
------------ ------------ ------------ ------------
Net realized and unrealized gains/losses
on investments and foreign currencies 5,011,087 33,948,472 37,495,015 400,100
CHANGE IN NET ASSETS FROM OPERATIONS $ 4,664,802 $ 31,282,510 $ 35,570,839 $ 415,326
(1) For the period August 29, 2003, commencement of operations, to June 30,
2004.
(2) For the period March 31, 2004, commencement of operations, to June 30,
2004.
(3) Dividend income net of withholding taxes. For the year ended June 30,
2004, withholding taxes for the Global Equity Fund were $125,227.
50
FOR THE YEAR ENDED JUNE 30, 2004
SMALL CAP VALUE GLOBAL EQUITY BALANCED INCOME ULTRA SHORT MONEY MARKET
VALUE FUND(2) FUND FUND FUND FUND BOND FUND FUND
- ------------- ---- ---- ---- ---- --------- ----
$ 281 $ 2,873 $ 8,331 $ 17,202 $ 3,030,888 $ 168,825 $ 380,370
1,709 314,283 1,542,766 15,353 - - 729,997
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
1,990 317,156 1,551,097 32,555 3,030,888 168,825 1,110,367
2,154 142,825 1,135,102 11,095 416,408 31,864 358,875
431 30,606 170,267 2,560 96,095 13,656 153,806
718 51,009 260,468 4,267 160,157 22,760 -
- - 5,816 - - - -
263 16,988 62,352 1,663 32,503 3,084 59,612
- - 129 - - - 537
- - 181 - - - -
545 73,117 357,870 12,200 130,582 17,414 241,455
- - 430 - - - 1,547
- - 2,168 - - - -
834 12,940 54,224 8,792 31,634 10,428 39,663
4,052 5,993 16,859 4,012 3,305 4,689 4,827
2,494 - - 6,149 - 5,419 -
5,220 14,106 37,237 18,507 14,210 20,167 31,802
59 3,374 18,249 827 10,334 1,462 16,507
883 13,368 111,133 3,569 36,336 5,713 63,046
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
17,653 364,326 2,232,485 73,641 931,564 136,656 971,677
(12,998) - - (51,390) - (131,154) -
- - - - - - -
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
4,655 364,326 2,232,485 22,251 931,564 5,502 971,677
$ (2,665) $ (47,170) $ (681,388) $ 10,304 $ 2,099,324 $ 163,323 $ 138,690
$ (36,221) $ 2,404,710 $ 476,043 $ 80,597 $ 404,291 $ (69,702) -
27,877 1,384,533 14,619,718 52,694 (2,935,975) (61,472) -
- ------------ ------------ ------------ ------------ ------------ ------------ ------------
(8,344) 3,789,243 15,095,761 133,291 (2,531,684) (131,174) -
$ (11,009) $ 3,742,073 $ 14,414,373 $ 143,595 $ (432,360) $ 32,149 $ 138,690
51
STATEMENTS OF CHANGES IN NET ASSETS
SMALL CAP CORE GROWTH FUND EMERGING GROWTH FUND
For the For the For the For the
year ended year ended year ended year ended
06/30/04 06/30/03 06/30/04 06/30/03
-------- -------- -------- --------
OPERATIONS
Net investment income/loss $ (346,285) $ (175,082) $ (2,665,962) $ (2,526,279)
Realized gains/losses on investments 6,022,751 (3,605,564) 37,477,874 (45,670,710)
Change in unrealized appreciation/depreciation
on investments (1,011,664) 2,748,439 (3,529,402) 31,865,153
------------- ------------- ------------- -------------
Change in net assets from operations 4,664,802 (1,032,207) 31,282,510 (16,331,836)
Dividends to Shareholders:
From net investment income:
Standard Shares - - - -
------------- ------------- ------------- -------------
Change in net assets
from capital transactions 7,215,282 394,033 (22,233,586) (17,500,693)
CHANGE IN NET ASSETS $ 11,880,084 $ (638,174) $ 9,048,924 $ (33,832,529)
------------- ------------- ------------- -------------
NET ASSETS
Beginning of period $ 17,821,222 $ 18,459,396 $ 171,850,826 $ 205,683,355
End of period $ 29,701,306 $ 17,821,222 $ 180,899,750 $ 171,850,826
------------- ------------- ------------- -------------
Accumulated net investment income/loss - - - -
------------- ------------- ------------- -------------
CAPITAL TRANSACTIONS
Standard Shares
Proceeds from shares issued $ 13,121,654 $ 5,237,434 $ 21,134,996 $ 37,852,532
Dividends reinvested - - - -
Cost of shares redeemed (5,906,372) (4,843,401) (41,911,039) (55,356,284)
------------- ------------- ------------- -------------
Net change 7,215,282 394,033 (20,776,043) (17,503,752)
------------- ------------- ------------- -------------
Institutional Shares
Proceeds from shares issued - - $ 1,239,421 $ 2,821,812
Cost of shares redeemed - - (4,008,407) (3,432,566)
------------- ------------- ------------- -------------
Net change - - (2,768,986) (610,754)
------------- ------------- ------------- -------------
Administrative Shares
Proceeds from shares issued - - $ 6,512,533 $ 6,162,025
Cost of shares redeemed - - (5,201,090) (5,548,212)
------------- ------------- ------------- -------------
Net change - - 1,311,443 613,813
------------- ------------- ------------- -------------
CHANGE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ 7,215,282 $ 394,033 $ (22,233,586) $ (17,500,693)
------------- ------------- ------------- -------------
SHARE TRANSACTIONS
Standard Shares
Issued 1,247,393 672,716 1,702,236 3,719,462
Reinvested - - - -
Redeemed (561,227) (628,978) (3,358,592) (5,464,486)
------------- ------------- ------------- -------------
Net change 686,166 43,738 (1,656,356) (1,745,024)
------------- ------------- ------------- -------------
Institutional Shares
Issued - - 96,116 273,794
Redeemed - - (311,449) (329,608)
------------- ------------- ------------- -------------
Net change - - (215,333) (55,814)
------------- ------------- ------------- -------------
Administrative Shares
Issued - - 517,457 597,115
Redeemed - - (412,025) (534,955)
------------- ------------- ------------- -------------
Net change - - 105,432 62,160
------------- ------------- ------------- -------------
CHANGE IN SHARES
FROM SHARE TRANSACTIONS 686,166 43,738 (1,766,257) (1,738,678)
------------- ------------- ------------- -------------
(1) Commencement of operations.
See Financial Notes
52
SMALL CAP
CORE GROWTH FUND 300 FUND VALUE FUND VALUE FUND
- ------------------------------ ------------- -------------- ------------------------------
For the For the For the period For the period For the For the
year ended year ended 08/29/03(1) - 03/31/04(1) - year ended year ended
06/30/04 06/30/03 06/30/04 06/30/04 06/30/04 06/30/03
-------- -------- -------- -------- -------- --------
$ (1,924,176) $ (520,790) $ 15,226 $ (2,665) $ (47,170) $ (99,467)
43,684,981 (39,810,514) 10,201 (36,221) 2,404,710 (10,282,004)
(6,189,966) 29,592,435 389,899 27,877 1,384,533 9,608,668
- ------------- ------------- ------------- ------------- ------------- -------------
35,570,839 (10,738,869) 415,326 (11,009) 3,742,073 (772,803)
- - (4,055) - - -
- ------------- ------------- ------------- ------------- ------------- -------------
(42,077,189) (51,887,083) 6,437,494 1,387,216 3,902,663 (4,060,871)
$ (6,506,350) $ (62,625,952) $ 6,848,765 $ 1,376,207 $ 7,644,736 $ (4,833,674)
- ------------- ------------- ------------- ------------- ------------- -------------
$ 351,336,107 $ 413,962,059 - - $ 16,226,319 $ 21,059,993
$ 344,829,757 $ 351,336,107 $ 6,848,765 $ 1,376,207 $ 23,871,055 $ 16,226,319
- ------------- ------------- ------------- ------------- ------------- -------------
- - $ 13,494 - - -
- ------------- ------------- ------------- ------------- ------------- -------------
$ 21,264,741 $ 20,813,812 $ 6,674,799 $ 1,408,985 $ 8,784,600 $ 6,319,550
- - 4,044 - - -
(44,917,887) (53,825,105) (241,349) (21,769) (4,881,937) (10,380,421)
- ------------- ------------- ------------- ------------- ------------- -------------
(23,653,146) (33,011,293) 6,437,494 1,387,216 3,902,663 (4,060,871)
- ------------- ------------- ------------- ------------- ------------- -------------
$ 23,690,276 $ 27,922,878 - - - -
(41,119,985) (47,184,580) - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
(17,429,709) (19,261,702) - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
$ 733,629 $ 1,251,277 - - - -
(1,727,963) (865,365) - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
(994,334) 385,912 - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
$ (42,077,189) $ (51,887,083) $ 6,437,494 $ 1,387,216 $ 3,902,663 $ (4,060,871)
- ------------- ------------- ------------- ------------- ------------- -------------
1,188,913 1,364,126 635,272 143,670 888,579 819,291
- - 374 - - -
(2,501,662) (3,545,634) (21,696) (2,347) (495,734) (1,349,990)
- ------------- ------------- ------------- ------------- ------------- -------------
(1,312,749) (2,181,508) 613,950 141,323 392,845 (530,699)
- ------------- ------------- ------------- ------------- ------------- -------------
1,616,753 2,233,874 - - - -
(2,794,779) (3,763,348) - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
(1,178,026) (1,529,474) - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
40,193 80,682 - - - -
(96,922) (55,257) - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
(56,729) 25,425 - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
(2,547,504) (3,685,557) 613,950 141,323 392,845 (530,699)
- ------------- ------------- ------------- ------------- ------------- -------------
53
STATEMENTS OF CHANGES IN NET ASSETS
GLOBAL EQUITY FUND BALANCED FUND
------------------------------ ------------------------------
For the For the For the For the period
year ended year ended year ended 12/20/02(1) -
06/30/04 06/30/03 06/30/04 06/30/03
-------- -------- -------- --------
OPERATIONS
Net investment income/loss $ (681,388) $ (245,695) $ 10,304 $ 1,205
Realized gains/losses on investments
and foreign currency transactions 476,043 (20,092,299) 80,597 24,140
Change in unrealized appreciation/depreciation
on investments and foreign currency
transactions 14,619,718 10,231,205 52,694 25,761
------------- ------------- ------------- -------------
Change in net assets from operations 14,414,373 (10,106,789) 143,595 51,106
Dividends to Shareholders:
From net investment income:
Standard Shares - - (11,300) (1,502)
Institutional Shares - - - -
From net realized gains on investments:
Standard Shares - - (31,488) -
------------- ------------- ------------- -------------
Total dividends - - (42,788) (1,502)
Change in net assets
from capital transactions (21,995,780) (26,919,108) 1,642,210 1,011,462
CHANGE IN NET ASSETS $ (7,581,407) $ (37,025,897) $ 1,743,017 $ 1,061,066
------------- ------------- ------------- -------------
NET ASSETS
Beginning of period $ 110,592,559 $ 147,618,456 $ 1,061,066 -
End of period $ 103,011,152 $ 110,592,559 $ 2,804,083 $ 1,061,066
------------- ------------- ------------- -------------
Accumulated net investment income/loss $ (441,535) $ (570,287) - $ 156
------------- ------------- ------------- -------------
CAPITAL TRANSACTIONS
Standard Shares
Proceeds from shares issued $ 12,635,147 $ 25,646,368 $ 1,943,959 $ 1,049,586
Dividends reinvested - - 37,052 325
Cost of shares redeemed (32,146,318) (50,286,863) (338,801) (38,449)
------------- ------------- ------------- -------------
Net change (19,511,171) (24,640,495) 1,642,210 1,011,462
------------- ------------- ------------- -------------
Institutional Shares
Proceeds from shares issued $ 10,869,317 $ 37,771,071 - -
Dividends reinvested - - - -
Cost of shares redeemed (13,146,663) (40,033,225) - -
------------- ------------- ------------- -------------
Net change (2,277,346) (2,262,154) - -
------------- ------------- ------------- -------------
Administrative Shares
Proceeds from shares issued $ 507,646 $ 706,362 - -
Cost of shares redeemed (714,909) (722,821) - -
------------- ------------- ------------- -------------
Net change (207,263) (16,459) - -
------------- ------------- ------------- -------------
CHANGE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (21,995,780) $ (26,919,108) $ 1,642,210 $ 1,011,462
------------- ------------- ------------- -------------
SHARE TRANSACTIONS
Standard Shares
Issued 851,102 1,995,494 172,335 104,984
Reinvested - - 3,318 33
Redeemed (2,160,362) (3,944,883) (30,031) (3,660)
------------- ------------- ------------- -------------
Net change (1,309,260) (1,949,389) 145,622 101,357
------------- ------------- ------------- -------------
Institutional Shares
Issued 765,110 2,906,867 - -
Reinvested - - - -
Redeemed (918,483) (3,078,716) - -
------------- ------------- ------------- -------------
Net change (153,373) (171,849) - -
------------- ------------- ------------- -------------
Administrative Shares
Issued 33,828 55,041 - -
Redeemed (46,795) (56,965) - -
------------- ------------- ------------- -------------
Net change (12,967) (1,924) - -
------------- ------------- ------------- -------------
CHANGE IN SHARES
FROM SHARE TRANSACTIONS (1,475,600) (2,123,162) 145,622 101,357
------------- ------------- ------------- -------------
(1) Commencement of operations.
See Financial Notes
54
INCOME FUND ULTRA SHORT BOND FUND MONEY MARKET FUND
- ------------------------------ ------------------------------ ------------------------------
For the For the For the For the period For the For the
year ended year ended year ended 11/21/02(1) - year ended year ended
06/30/04 06/30/03 06/30/04 06/30/03 06/30/04 06/30/03
-------- -------- -------- -------- -------- --------
$ 2,099,324 $ 2,597,821 $ 163,323 $ 82,660 $ 138,690 $ 844,631
404,291 3,091,917 (69,702) (2,413) - -
(2,935,975) 1,619,468 (61,472) 38,485 - -
- ------------- ------------- ------------- ------------- ------------- -------------
(432,360) 7,309,206 32,149 118,732 138,690 844,631
(2,247,909) (2,770,272) (172,102) (89,255) (95,186) (710,661)
- - - - (43,504) (133,970)
- - - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
(2,247,909) (2,770,272) (172,102) (89,255) (138,690) (844,631)
(6,894,783) (2,889,480) (1,559,881) 9,222,446 (21,290,731) (15,276,980)
$ (9,575,052) $ 1,649,454 $ (1,699,834) $ 9,251,923 $ (21,290,731) $ (15,276,980)
- ------------- ------------- ------------- ------------- ------------- -------------
$ 69,137,481 $ 67,488,027 $ 9,251,923 - $ 115,533,193 $ 130,810,173
$ 59,562,429 $ 69,137,481 $ 7,552,089 $ 9,251,923 $ 94,242,462 $ 115,533,193
- ------------- ------------- ------------- ------------- ------------- -------------
- - $ (255) $ (976) - -
- ------------- ------------- ------------- ------------- ------------- -------------
$ 7,287,801 $ 15,862,291 $ 6,180,634 $ 10,640,331 $ 75,687,758 $ 90,075,370
2,048,025 2,594,958 153,072 70,753 105,043 742,720
(16,230,609) (21,346,729) (7,893,587) (1,488,638) (97,203,060) (100,447,452)
- ------------- ------------- ------------- ------------- ------------- -------------
(6,894,783) (2,889,480) (1,559,881) 9,222,446 (21,410,259) (9,629,362)
- ------------- ------------- ------------- ------------- ------------- -------------
- - - - $ 7,048,948 $ 3,128,338
- - - - 44,467 144,697
- - - - (6,973,887) (8,920,653)
- ------------- ------------- ------------- ------------- ------------- -------------
- - - - 119,528 (5,647,618)
- ------------- ------------- ------------- ------------- ------------- -------------
- - - - - -
- - - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
- - - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
$ (6,894,783) $ (2,889,480) $ (1,559,881) $ 9,222,446 $ (21,290,731) $ (15,276,980)
- ------------- ------------- ------------- ------------- ------------- -------------
724,145 1,597,468 618,148 1,060,718 75,687,758 90,075,370
203,510 262,370 15,347 7,042 105,043 742,730
(1,611,789) (2,151,369) (791,761) (148,149) (97,203,060) (100,447,452)
- ------------- ------------- ------------- ------------- ------------- -------------
(684,134) (291,531) (158,266) 919,611 (21,410,259) (9,629,352)
- ------------- ------------- ------------- ------------- ------------- -------------
- - - - 7,048,948 3,128,339
- - - - 44,467 144,697
- - - - (6,973,887) (8,920,653)
- ------------- ------------- ------------- ------------- ------------- -------------
- - - - 119,528 (5,647,617)
- ------------- ------------- ------------- ------------- ------------- -------------
- - - - - -
- - - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
- - - - - -
- ------------- ------------- ------------- ------------- ------------- -------------
(684,134) (291,531) (158,266) 919,611 (21,290,731) (15,276,969)
- ------------- ------------- ------------- ------------- ------------- -------------
55
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA INVESTMENT ACTIVITIES DIVIDENDS
-------------------------------------------------------- ------------
Net asset Net realized
value, Net and unrealized Total from From net
beginning investment Redemption gains/losses investment investment
of period income/loss fee on investments operations income
--------- ----------- --- -------------- ---------- ------
SMALL CAP CORE GROWTH FUND
STANDARD SHARES
Year ended June 30, 2004 $ 8.67 (0.13) - 2.30 2.17 -
Year ended June 30, 2003 9.18 (0.09) - (0.42) (0.51) -
Year ended June 30, 2002 9.52 (0.08) - (0.26) (0.34) -
Year ended June 30, 2001 11.23 (0.05) - (1.64) (1.69) -
Period ended June 30, 2000(1) 10.00 - - 1.23 1.23 -
EMERGING GROWTH FUND
STANDARD SHARES
Year ended June 30, 2004 $ 10.96 (0.20) - 2.25 2.05 -
Year ended June 30, 2003 11.82 (0.17) - (0.69) (0.86) -
Year ended June 30, 2002 15.79 (0.20) - (3.77) (3.97) -
Year ended June 30, 2001 33.48 (0.21) - (11.41) (11.62) -
Year ended June 30, 2000 21.76 (0.30)(4) - 16.58 16.28 -
INSTITUTIONAL SHARES
Year ended June 30, 2004 $ 11.23 (0.15) - 2.33 2.18 -
Year ended June 30, 2003 12.02 (0.10) - (0.69) (0.79) -
Year ended June 30, 2002 15.96 (0.11)(4) - (3.83) (3.94) -
Year ended June 30, 2001 33.61 (0.12) - (11.46) (11.58) -
Period ended June 30, 2000(5) 25.67 (0.11) - 12.61 12.50 -
ADMINISTRATIVE SHARES
Year ended June 30, 2004 $ 11.11 (0.14) - 2.25 2.11 -
Year ended June 30, 2003 11.92 (0.10) - (0.71) (0.81) -
Year ended June 30, 2002 15.87 (0.13) - (3.82) (3.95) -
Year ended June 30, 2001 33.57 (0.17)(4) - (11.46) (11.63) -
Period ended June 30, 2000(6) 28.70 (0.10)(4) - 4.97 4.87 -
CORE GROWTH FUND
STANDARD SHARES
Year ended June 30, 2004 $ 16.44 (0.12) - 1.78 1.66 -
Year ended June 30, 2003 16.73 (0.04) - (0.25) (0.29) -
Year ended June 30, 2002 22.12 (0.09) - (5.30) (5.39) -
Year ended June 30, 2001 32.59 (0.16) - (9.01) (9.17) -
Year ended June 30, 2000 30.52 (0.22) - 4.08 3.86 -
INSTITUTIONAL SHARES
Year ended June 30, 2004 $ 13.52 0.01 - 1.46 1.47 -
Year ended June 30, 2003 13.66 0.05 - (0.19) (0.14) -
Year ended June 30, 2002 17.94 0.04 - (4.32) (4.28) -
Year ended June 30, 2001 26.59 0.01 - (7.36) (7.35) -
Year ended June 30, 2000 25.02 - - 3.36 3.36 -
ADMINISTRATIVE SHARES
Year ended June 30, 2004 $ 16.68 (0.08) - 1.84 1.76 -
Year ended June 30, 2003 16.91 0.01 - (0.24) (0.23) -
Year ended June 30, 2002 22.27 (0.01) - (5.35) (5.36) -
Year ended June 30, 2001 32.66 (0.03)(4) - (9.06) (9.09) -
Period ended June 30, 2000(6) 32.09 (0.01) - 0.58 0.57 -
300 FUND
STANDARD SHARES
Period ended June 30, 2004(7) $ 10.00 0.03 - 1.14 1.17 (0.01)
--------- ---- - ----- ----- ----
(1) For the period December 28, 1999, commencement of operations, to June 30,
2000.
(2) Not annualized.
(3) Annualized.
(4) Based on average shares outstanding.
See Financial Notes
56
RATIOS AND SUPPLEMENTAL DATA
SHAREHOLDERS -------------------------------------------------------------------------------
- ---------------------------------- Net Ratio of Ratio of net Ratio of
From Net asset assets, expenses to investment expenses to
net Total value, Total end of average net income/loss average net Portfolio
realized dividends to end return Period assets, net of to average net assets, prior to turnover
gains shareholders of period (%) ($ x 1,000) reimbursement (%) assets (%) reimbursement (%) rate(%)
----- ------------ --------- --- ----------- ----------------- ---------- ----------------- -------
- - $ 10.84 25.03 $ 29,701 1.53 (1.37) 1.53 207.80
- - 8.67 (5.56) 17,821 1.45 (1.12) 1.58 349.79
- - 9.18 (3.57) 18,459 1.34 (0.93) 1.40 294.26
(0.02) (0.02) 9.52 (15.08) 15,503 1.34 (0.57) 3.20 146.62
- - 11.23 12.30(2) 8,397 1.49(3) 0.00(3) 5.98(3) 20.16
- - $ 13.01 18.70 $165,782 1.93 (1.47) 1.94 151.80
- - 10.96 (7.28) 157,911 1.95 (1.56) 1.97 315.89
- - 11.82 (25.14) 190,812 1.80 (1.39) 1.86 202.57
(6.07) (6.07) 15.79 (37.52) 283,760 1.68 (1.09) 1.75 136.63
(4.56) (4.56) 33.48 82.19 386,670 1.69 (1.09) 1.75 159.95
- - $ 13.41 19.41 $ 3,534 1.30 (0.85) 1.31 151.80
- - 11.23 (6.57) 5,379 1.25 (0.86) 1.28 315.89
- - 12.02 (24.69) 6,428 1.20 (0.78) 1.26 202.57
(6.07) (6.07) 15.96 (37.21) 19,676 1.30 (0.69) 1.36 136.63
(4.56) (4.56) 33.61 55.02(2) 16,284 1.24(3) (0.61)(3) 1.31(3) 159.95
- - $ 13.22 18.99 $ 11,584 1.60 (1.13) 1.62 151.80
- - 11.11 (6.80) 8,561 1.51 (1.13) 1.54 315.89
- - 11.92 (24.89) 8,444 1.47 (1.07) 1.53 202.57
(6.07) (6.07) 15.87 (37.43) 9,497 1.55 (0.96) 2.06 136.63
- - 33.57 16.97(2) 8 1.55(3) (0.90(3) 158.14(3) 159.95
- - $ 18.10 10.10 $290,352 1.50 (0.65) 1.52 228.43
- - 16.44 (1.73) 285,339 1.37 (0.28) 1.53 183.75
- - 16.73 (24.37) 326,793 1.34 (0.43) 1.44 76.40
(1.30) (1.30) 22.12 (28.42) 472,779 1.34 (0.62) 1.42 44.95
(1.79) (1.79) 32.59 12.82 699,399 1.49 (0.75) 1.52 20.04
- - $ 14.99 10.96 $ 52,842 0.77 0.08 0.79 228.43
- - 13.52 (1.02) 63,571 0.69 0.36 0.76 183.75
- - 13.66 (23.86) 85,140 0.68 0.23 0.73 76.40
(1.30) (1.30) 17.94 (27.98) 123,912 0.68 0.04 0.74 44.95
(1.79) (1.79) 26.59 13.67 180,779 0.74 0.00 0.74 20.04
- - $ 18.44 10.55 $ 1,635 1.11 (0.27) 1.13 228.43
- - 16.68 (1.36) 2,426 1.00 0.09 1.06 183.75
- - 16.91 (24.07) 2,029 0.94 (0.05) 1.01 76.40
(1.30) (1.30) 22.27 (28.11) 1,964 0.94 (0.14) 5.63 44.95
- - 32.66 1.78(2) 21 0.99(3) (0.27)(3) 101.59(3) 20.04
- (0.01) $ 11.16 11.71(2) $ 6,849 0.90(3) 0.38(3) 1.94(3) 32.98
----- ----- --------- ------- -------- ------ ------ ------ -----
(5) For the period November 1, 1999, commencement of operations, to June 30,
2000.
(6) For the period February 4, 2000, commencement of operations, to June 30,
2000.
(7) For the period August 29, 2003, commencement of operations, to June 30,
2004.
57
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA INVESTMENT ACTIVITIES DIVIDENDS
------------------------------------------ ---------
Net realized
Net asset and unrealized
value, Net gains/losses on Total from From net
beginning investment Redemption investments and investment investment
of period income/loss fee foreign currencies operations income
--------- ----------- --- ------------------ ---------- ------
SMALL CAP VALUE FUND
STANDARD SHARES
--------- ----- ---- ---- ---- ----
Period ended June 30, 2004(1) $ 10.00 (0.02) - (0.24) (0.26) -
--------- ----- ---- ---- ---- ----
VALUE FUND
STANDARD SHARES
Year ended June 30, 2004 $ 8.64 (0.02) - 1.89 1.87 -
Year ended June 30, 2003 8.74 (0.05) - (0.05) (0.10) -
One month period ended June 30, 2002(4) 10.21 (0.01) - (1.46) (1.47) -
Year ended May 31, 2002 15.29 (0.08) - (3.57) (3.65) -
Year ended May 31, 2001 14.58 (0.07) - 2.70 2.63 -
Year ended May 31, 2000 14.03 (0.08) - 2.05 1.97 -
GLOBAL EQUITY FUND
STANDARD SHARES
Year ended June 30, 2004 $ 13.39 (0.10)(5) -(6) 1.89 1.79 -
Year ended June 30, 2003 14.22 (0.03)(5) 0.02 (0.82) (0.83) -
Year ended June 30, 2002 18.31 (0.11)(5) 0.01 (3.99) (4.09) -
Year ended June 30, 2001 29.99 (0.16) - (9.61) (9.77) -
Year ended June 30, 2000 20.22 (0.22)(5) - 10.94 10.72 -
INSTITUTIONAL SHARES
Year ended June 30, 2004 $ 13.65 0.04(5) -(6) 1.89 1.93 -
Year ended June 30, 2003 14.40 0.05(5) 0.02 (0.82) (0.75) -
Year ended June 30, 2002 18.46 (0.01)(5) 0.01 (4.06) (4.06) -
Year ended June 30, 2001 30.08 (0.05)(5) - (9.66) (9.71) -
Period ended June 30, 2000(7) 23.45 (0.05)(5) - 7.63 7.58 -
ADMINISTRATIVE SHARES
Year ended June 30, 2004 $ 13.51 (0.02)(5) -(6) 1.87 1.85 -
Year ended June 30, 2003 14.30 0.01 (5) 0.02 (0.82) (0.79) -
Year ended June 30, 2002 18.38 (0.06)(5) 0.01 (4.03) (4.08) -
Year ended June 30, 2001 30.02 (0.11)(5) - (9.62) (9.73) -
Period ended June 30, 2000(8) 33.45 (0.06) - (3.37) (3.43) -
BALANCED FUND
STANDARD SHARES
Year ended June 30, 2004 $ 10.47 0.06 - 1.12 1.18 (0.06)
Period ended June 30, 2003(9) 10.00 0.02 - 0.47 0.49 (0.02)
INCOME FUND
STANDARD SHARES
Year ended June 30, 2004 $ 10.28 0.34 - (0.40) (0.06) (0.36)
Year ended June 30, 2003 9.62 0.37 - 0.69 1.06 (0.40)
Year ended June 30, 2002 10.28 0.58 - (0.66) (0.08) (0.58)
Year ended June 30, 2001 10.20 0.68 - 0.10 0.78 (0.70)
Year ended June 30, 2000 10.51 0.65 - (0.32) 0.33 (0.63)
ULTRA SHORT BOND FUND
STANDARD SHARES
Year ended June 30, 2004 $ 10.06 0.18 - (0.13) 0.05 (0.19)
Period ended June 30, 2003(10) 10.00 0.14(5) - 0.07 0.21 (0.15)
--------- ----- ---- ---- ---- ----
(1) For the period March 31, 2004, commencement of operations, to June 30,
2004.
(2) Not annualized.
(3) Annualized.
(4) Subsequent to the annual report as of May 31, 2002, the Citizens Value
Fund changed its fiscal year end to June 30.
(5) Based on average shares outstanding.
See Financial Notes
58
TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA
--------------- ----------------------------------------------------------------------------
Net Ratio of Ratio of net Ratio of
From Net asset assets, expenses to investment expenses to
net Total value, Total end of average net income/loss average net Portfolio
realized dividends to end return period assets, net of to average net assets, prior to turnover
gains shareholders of period (%) ($ x 1,000) reimbursement (%) assets (%) reimbursement (%) rate (%)
----- ------------ --------- --- ----------- ----------------- ---------- ----------------- --------
- - $ 9.74 (2.60)(2) $ 1,376 1.60(3) (0.92)(3) 6.07(3) 42.36
----- ----- -------- ------ ---------- ---- ----- ------ -----
- - $ 10.51 21.64 $ 23,871 1.78 (0.23) 1.78 130.18
- - 8.64 (1.14) 16,226 1.90 (0.62) 1.90 209.72
- - 8.74 (14.40)(2) 21,060 1.95(3) (1.33)(3) 2.05(3) 5.87
(1.43) (1.43) 10.21 (25.58) 24,981 1.95 (1.04) 2.54 34.77
(1.92) (1.92) 15.29 20.71 14,378 1.95 (0.65) 4.63 62.55
(1.42) (1.42) 14.58 14.36 8,726 1.95 (0.68) 7.11 72.32
----- ----- -------- ------ ---------- ---- ----- ------ -----
- - $ 15.18 13.37 $ 95,625 2.01 (0.60) 2.01 49.16
- - 13.39 (5.84) 101,846 1.91 (0.26) 1.91 42.05
- - 14.22 (22.34) 135,881 1.84 (0.66) 1.84 132.82
(1.91) (1.91) 18.31 (33.69) 236,080 1.82 (0.71) 1.82 151.95
(0.95) (0.95) 29.99 53.27 354,818 1.82 (0.79) 1.83 120.69
----- ----- -------- ------ ---------- ---- ----- ------ -----
- - $ 15.58 14.14 $ 5,244 1.37 0.25 1.37 49.16
- - 13.65 (5.21) 6,688 1.26 0.42 1.26 42.05
- - 14.40 (21.99) 9,531 1.27 (0.05) 1.27 132.82
(1.91) (1.91) 18.46 (33.35) 16,475 1.39 (0.23) 1.42 151.95
(0.95) (0.95) 30.08 32.55(2) 12,544 1.39(3) (0.25)(3) 1.43(3) 120.69
----- ----- -------- ------ ---------- ---- ----- ------ -----
- - $ 15.36 13.69 $ 2,142 1.71 (0.11) 1.71 49.16
- - 13.51 (5.52) 2,059 1.59 0.11 1.59 42.05
- - 14.30 (22.20) 2,207 1.64 (0.39) 1.64 132.82
(1.91) (1.91) 18.38 (33.52) 1,748 1.68 (0.48) 3.18 151.95
- - 30.02 (10.25)(2) 1 1.68(3) (0.48)(3) 296.20(3) 120.69
----- ----- -------- ------ ---------- ---- ----- ------ -----
(0.24) (0.30) $ 11.35 11.31 $ 2,804 1.30 0.60 4.30 98.20
- (0.02) 10.47 4.87(2) 1,061 1.30(3) 0.41(3) 16.73(3) 140.42
----- ----- -------- ------ ---------- ---- ----- ------ -----
- (0.36) $ 9.86 (0.63) $ 59,562 1.45 3.28 1.45 64.37
- (0.40) 10.28 11.28 69,137 1.37 3.80 1.37 195.73
- (0.58) 9.62 (0.87) 67,488 1.38 5.77 1.38 54.05
-(6) (0.70) 10.28 7.87 71,639 1.40 6.55 1.48 60.53
(0.01) (0.64) 10.20 3.35 61,836 1.45 6.34 1.47 52.96
----- ----- -------- ------ ---------- ---- ----- ------ -----
- (0.19) $ 9.92 0.48 $ 7,552 0.06 1.79 1.50 80.96
- (0.15) 10.06 2.12(2) 9,252 0.00(3) 2.29(3) 2.10(3) 56.04
----- ----- -------- ------ ---------- ---- ----- ------ -----
(6) Less than $0.005 per share.
(7) For the period November 1, 1999, commencement of operations, to June 30,
2000.
(8) For the period February 4, 2000, commencement of operations, to June 30,
2000.
(9) For the period December 20, 2002, commencement of operations, to June 30,
2003.
(10) For the period November 21, 2002, commencement of operations, to June 30,
2003.
59
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA INVESTMENT ACTIVITIES DIVIDENDS
- ------------------------ ----------------------------------------------------------- ----------
Net asset Net realized
value, Net and unrealized Total from From net
beginning investment Redemption gains/losses on investment investment
of period income/loss fee investments operations income
--------- ----------- --- ----------- ---------- ------
MONEY MARKET FUND
STANDARD SHARES
Year ended June 30, 2004 $ 1.00 -(1) - - -(1) -(1)
Year ended June 30, 2003 1.00 0.01 - - 0.01 (0.01)
Year ended June 30, 2002 1.00 0.02 - - 0.02 (0.02)
Year ended June 30, 2001 1.00 0.05 - - 0.05 (0.05)
Year ended June 30, 2000 1.00 0.05 - - 0.05 (0.05)
INSTITUTIONAL SHARES
Year ended June 30, 2004 $ 1.00 -(1) - - -(1) -(1)
Year ended June 30, 2003 1.00 0.01 - - 0.01 (0.01)
Year ended June 30, 2002 1.00 0.02 - - 0.02 (0.02)
Year ended June 30, 2001 1.00 0.05 - - 0.05 (0.05)
Year ended June 30, 2000 1.00 0.05 - - 0.05 (0.05)
-------- ---- ------- ----------- ---- ----
(1) Less than $0.005 per share.
60
TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA
--------------- ----------------------------------------------------------------------------
Net Ratio of Ratio of net Ratio of
From Net asset assets, expenses to investment expenses to
net Total value, Total end of average net income/loss average net Portfolio
realized dividends to end return period assets, net of to average net assets, prior to turnover
gains shareholders of period (%) ($ x 1,000) reimbursement (%) assets (%) reimbursement (%) rate (%)
----- ------------- --------- --- ----------- ----------------- ---------- ----------------- --------
- -(1) $ 1.00 0.10 $ 83,231 0.98 0.10 0.98 N/A
- (0.01) 1.00 0.65 104,641 0.93 0.65 0.93 N/A
- (0.02) 1.00 1.71 114,271 0.92 1.72 0.92 N/A
- (0.05) 1.00 5.23 117,211 0.89 5.08 0.89 N/A
- (0.05) 1.00 4.67 112,700 1.17 4.59 1.18 N/A
---- ----- -------- ----- ----------- ---- ---- ---- ---
- -(1) $ 1.00 0.41 $ 11,011 0.67 0.41 0.67 N/A
- (0.01) 1.00 0.95 10,892 0.63 0.98 0.63 N/A
- (0.02) 1.00 1.97 16,539 0.67 1.95 0.67 N/A
- (0.05) 1.00 5.43 27,475 0.70 5.22 0.70 N/A
- (0.05) 1.00 5.04 23,370 0.81 4.93 0.82 N/A
---- ----- -------- ----- ----------- ---- ---- ---- ---
61
FINANCIAL NOTES
O R G A N I Z A T I O N
Citizens Funds (the "Trust"), a Massachusetts Business Trust, is registered as
an open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"). The Trust offers the following funds
(individually a "fund,"collectively the "funds"):
FUND SHORT NAME FUND SHORT NAME
---- ---------- ---- ----------
CITIZENS SMALL CAP CORE GROWTH Small Cap Core CITIZENS GLOBAL EQUITY Global Equity Fund
FUND Growth Fund FUND
CITIZENS EMERGING GROWTH FUND Emerging Growth CITIZENS BALANCED FUND Balanced Fund
Fund
CITIZENS CORE GROWTH FUND Core Growth Fund CITIZENS INCOME FUND Income Fund
CITIZENS 300 FUND 300 Fund CITIZENS ULTRA SHORT Ultra Short Bond
BOND FUND Fund
CITIZENS SMALL CAP VALUE FUND Small Cap Value CITIZENS MONEY MARKET Money Market Fund
Fund FUND
CITIZENS VALUE FUND Value Fund
The funds are authorized to issue an unlimited number of shares of beneficial
interest with no par value. The Emerging Growth Fund, Core Growth Fund, and
Global Equity Fund currently offer three classes of shares: Standard shares,
Institutional shares and Administrative shares. The Money Market Fund offers two
classes of shares: Standard shares and Institutional shares. The Small Cap Core
Growth Fund, 300 Fund, Small Cap Value Fund, Value Fund, Balanced Fund, Income
Fund and Ultra Short Bond Fund offer one class of shares: Standard shares. Each
class of shares in the funds has identical rights and privileges except with
respect to class specific expenses, voting rights on matters affecting a single
class of shares, and the exchange privilege of each class of shares.
INDEMNIFICATIONS
Under the funds' organizational documents, its officers and trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Trust. In addition, in the normal course of business, the funds
enter into contracts with their vendors and others that provide for general
indemnifications. The funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the funds.
CITIZENS MONEY MARKET EXCHANGE
On July 2, 2003, the Money Market Fund transferred $113,739,102 of securities
and cash to the Citizens Prime Money Market Fund in exchange for 113,739,102
shares of the Citizens Prime Money Market Fund. From July 2, 2003 to February
20, 2004, the Money Market Fund invested substantially all of its investable
assets in the Citizens Prime Money Market Fund, an open-end management
investment company that has the same investment objective as the Money Market
Fund. On February 20, 2004, the Money Market Fund redeemed net of previous
redemptions, 96,647,324 shares from the Prime Money Market Fund in exchange for
$96,647,324 of securities and cash which represented 100% of the net assets of
the Citizens Prime Money Market Fund.
CITIZENS INTERNATIONAL GROWTH FUND REORGANIZATION
Under a plan of reorganization adopted by the Trust, all of the assets and
liabilities of the Citizens International Growth Fund were transferred to the
Standard shares of the Global Equity Fund. The reorganization, which qualified
as a tax-free exchange for federal income tax purposes, was completed on
December 19, 2003, following approval by shareholders at a special shareholder
meeting. The following is a summary of shares
62
FINANCIAL NOTES
outstanding, net assets, net asset value per share issued, unrealized
appreciation/depreciation, and accumulated net realized loss immediately before
and after the reorganization:
BEFORE REORGANIZATION AFTER REORGANIZATION
--------------------- --------------------
INTERNATIONAL GLOBAL GLOBAL
GROWTH FUND EQUITY FUND EQUITY FUND
----------- ----------- -----------
Shares outstanding 433,044.353 7,637,623.361 7,843,039.517
Net assets $ 3,115,732 $ 116,037,295 $ 119,153,027
Net asset value per share:
Standard shares $ 7.19 $ 15.17 $ 15.17
Institutional shares NA $ 15.52 $ 15.52
Administrative shares NA $ 15.33 $ 15.33
Unrealized
appreciation/depreciation $ 511,440 $ 11,275,289 $ 11,786,729
Accumulated net realized loss $ (928,080) $ (135,041,252) $ (135,969,332)
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
funds in the preparation of their financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America ("GAAP"). The preparation of financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses for the
period. Actual results could differ from those estimates.
SECURITIES VALUATION Equity securities are generally valued at the last sale
price on the primary exchange on which such securities are traded or on the
principal over-the-counter market on which such securities are traded, as of the
close of business on the day the securities are valued, or lacking any sales, at
the last available bid price for domestic securities and halfway between the bid
and ask price for international securities. Equity securities traded on the
NASDAQ stock market are valued at the NASDAQ official closing price.
Fixed-income investments generally are valued at the bid price for securities.
Securities may also be valued on the basis of valuations furnished by a pricing
service that uses both dealer-supplied valuations and valuations based upon
analysis of market data or other factors if these valuations are believed to
more accurately reflect the fair value of such securities. If a market quotation
for a given security is unavailable, or if the adviser or a fund's sub-adviser
believes an available quote does not accurately reflect the current value of a
security, the adviser will use fair value procedures established by the
funds' Board of Trustees to price the security. Fair value procedures may also
be used if the adviser determines that a significant event has occurred between
the time at which a market price is determined but prior to the time at which a
fund's net asset value is calculated. The Global Equity Fund has a policy to use
fair value procedures to price securities traded on foreign markets in the event
there is a specific change in the value of a domestic security index. Short-term
securities maturing within 60 days are valued at amortized cost, which
approximates fair value. Under the amortized cost method, premium or discount,
if any, is amortized or accreted, respectively, on a constant (straight-line)
basis to the maturity of the security.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME Changes in holdings of
portfolio securities shall be reflected no later than in the first calculation
on the first business day following the trade date. However, for financial
reporting purposes, portfolio security transactions are reported on trade date.
The cost of securities sold
63
FINANCIAL NOTES
is determined on the identified cost basis, unless otherwise specified. Interest
income is recorded on an accrual basis and includes, where applicable, the
amortization or accretion of a premium or discount. Dividend income is recorded
on the ex-dividend date.
FOREIGN CURRENCY TRANSLATION The accounting records of the funds are maintained
in U.S. dollars. Investment securities and other assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the
current rate of exchange. Purchases and sales of securities, and income and
expenses, are translated into U.S. dollars at the prevailing rate of exchange on
the respective dates of such transactions. The changes in foreign exchange rates
on investments are not isolated on the Statement of Operations. Such
fluctuations are included with the net realized and unrealized gain or loss on
investments.
FOREIGN CURRENCY CONTRACTS Foreign currency contracts are used to facilitate
transactions in foreign-denominated securities. Losses may arise from changes in
the value of the foreign currency or if the counterparties do not perform under
the contract's terms. The U.S. dollar value of foreign currency contracts is
determined by using the current rate of exchange. There were no foreign currency
contracts open at year end.
REPURCHASE AGREEMENTS The funds may acquire repurchase agreements with an entity
that is a member of the Federal Reserve System, collateralized by instruments
issued by the U.S. government, its agencies or instrumentalities. The repurchase
price generally equals the price paid by a fund plus interest negotiated on the
basis of current short-term rates, which may be more or less than the rate on
the underlying securities. It is the funds' policy to receive collateral
securities of which the value, including accrued interest, is at least equal to
102% of the amount to be repaid to the funds under each agreement at its
maturity. Collateral subject to repurchase agreements is held by the
funds' custodian or another qualified custodian. If the counterparty defaults,
and the fair value of the collateral declines, realization of the collateral by
the funds may be delayed or limited.
RESTRICTED SECURITIES The funds are permitted to invest in privately placed
securities. These securities may be resold in transactions exempt from
registration, or to the public, if the securities are registered under the
Securities Act of 1933. Disposal of these securities may involve time-consuming
negotiations and expense, and the prompt sale at an acceptable price may be
difficult.
REDEMPTION FEE The Global Equity Fund charges a redemption fee of 2% (paid to
the fund) with respect to shares of the fund redeemed or exchanged within 60
days of purchase. The fee does not apply to shares purchased through the
reinvestment of dividends or other distributions, redemptions by the fund of
accounts with below minimum balances, redemptions due to shareholder death or
disability, or certain omnibus accounts or retirement plans. For the year ended
June 30, 2004, the Global Equity Fund collected $23,360 in redemption fees.
These fees are included in the "change in net assets from capital
transactions" amounts in the Statements of Changes in Net Assets.
DIVIDENDS TO SHAREHOLDERS The Small Cap Core Growth Fund, Emerging Growth Fund,
Core Growth Fund, 300 Fund, Small Cap Value Fund, Value Fund and Global Equity
Fund declare and distribute dividends from net investment income, if any, to
shareholders annually. The Balanced Fund declares and distributes dividends from
net investment income to shareholders quarterly. The Income Fund declares and
distributes dividends from net investment income to shareholders monthly.
Dividends from net investment income for the Ultra Short Bond Fund and Money
Market Fund are declared daily and paid monthly. The funds' net realized gains,
if any, are distributed to shareholders at least annually.
64
FINANCIAL NOTES
Additional dividends may also be paid to the funds' shareholders to the extent
necessary to avoid federal excise tax on certain undistributed income and net
realized gains. The amount of dividends from net investment income and net
realized gains are determined in accordance with federal income tax regulations,
which may differ from GAAP. These "book/tax" differences are either considered
temporary or permanent in nature. To the extent these differences are permanent
in nature (i.e., reclassification of market discounts, gain/loss, paydowns, and
distributions), such amounts are reclassified to capital; temporary differences
do not require reclassification.
OFFERING COSTS Expenses incurred in connection with the offering of fund shares
for the 300 Fund, Small Cap Value Fund, Balanced Fund and Ultra Short Bond Fund
were paid by the funds and are amortized over a 12-month period starting with
each fund's commencement of operations.
FEDERAL INCOME TAXES Each fund is a separate taxable entity for federal tax
purposes. Each fund has qualified and intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code,
as amended, and distributes substantially all of its taxable net investment
income and net realized gains, if any, to its shareholders.
FEES AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT MANAGEMENT FEE Citizens Advisers, Inc. (the "adviser") serves as
adviser to each of the funds. Under the terms of the management contract, the
adviser is paid a fee that is computed daily based on an annual rate for each
fund's average daily net assets. Those rates are as follows:
FUND FEE RATE FUND FEE RATE
---- -------- ---- --------
Small Cap Core Growth Fund 0.50% Global Equity Fund 1.00%
Emerging Growth Fund 1.00% Balanced Fund 0.65%
Core Growth Fund 0.50% Income Fund 0.65%
300 Fund 0.20% Ultra Short Bond Fund 0.35%
Small Cap Value Fund 0.75% Money Market Fund 0.35%*
Value Fund 0.70%
*For any period that the Money Market Fund invested its assets in the Citizens
Prime Money Market Fund, the total management fee payable to the adviser under
the management contract with respect to the fund did not exceed 0.35% per annum
of the fund's average net assets minus the fund's allocable share of the
management fees paid to the adviser from Citizens Prime Money Market Fund.
During the fiscal year ended June 30, 2004, SSgA Funds Management, Inc. served
as the sub-adviser for the Global Equity Fund. For its services, the sub-adviser
received a fee computed daily based on an annual rate of 0.35% of the fund's
average daily net assets up to $500 million, and 0.25% on assets thereafter. The
fee was paid by the adviser.
DISTRIBUTION FEE Citizens Securities, Inc. (the "distributor") is a wholly owned
subsidiary of the adviser and serves as the funds' distributor. Pursuant to Rule
12b-1 under the 1940 Act, the Trust's shareholders have adopted a separate
distribution plan with respect to the funds' Standard and Administrative shares
pursuant to which the funds, except the Money Market Fund, compensate the
distributor for services in an amount equal to 0.25% per annum of average annual
net assets represented by such shares.
ADMINISTRATIVE AND SHAREHOLDER SERVICE FEES The adviser, with whom certain
officers and trustees are affiliated, performs administrative duties for the
Trust under a separate administrative contract, which provides for the
reimbursement of out-of-pocket expenses as well as fees for services rendered.
In accordance with the
65
FINANCIAL NOTES
terms of the administrative contract, fees and expenses are accrued daily based
on average daily net assets of each fund at the annual rate of 0.15%. In
addition, Citizens Advisers provides a number of administrative services to the
Trust, relating primarily to shareholder services and communications, and is
paid an account fee for providing such services and communications for each of
the individual funds with the exception of the Core Growth Fund, Standard
shares. The Core Growth Fund, Standard shares may be charged a shareholder
service fee of up to 0.35% based on the average daily net assets of the class.
For the year ended June 30, 2004, a fee of 0.25% was charged.
TRANSFER AGENCY, FUND ACCOUNTING AND CUSTODY BISYS Fund Services Ohio, Inc.
provides transfer agency and fund accounting services to the funds pursuant to
certain fee arrangements. Transfer agent expenses also include the cost of
services rendered by third parties to provide sub-transfer agency services.
Fifth Third Bank acts as custodian for the funds. Custody expenses may be
incurred or offset from fees or credits arising from cash balances maintained on
deposit.
TRUSTEE FEES Certain officers and Trustees of the Trust are "interested
persons,"as defined in the 1940 Act, of the adviser. Currently, each Trustee who
is not an "interested person" receives an annual retainer of $12,000 and $1,250
for each day's attendance at a Trustee meeting. The independent trustees have
elected a Chair, who receives an additional annual retainer of $5,000; and a
Vice Chair, Audit Committee Chair and Social Responsibility Committee Chair, who
each receives an additional annual retainer of $2,500.
EXPENSE ALLOCATION Expenses directly attributable to a fund are charged to that
fund. Expenses not directly attributable to a fund are allocated proportionately
among various or all funds within the Trust in relation to the net assets of
each fund or on another reasonable basis. Expenses specific to a class are
charged to that class.
FEE REDUCTIONS AND REIMBURSEMENTS For the year ended June 30, 2004, the adviser
limited the total expenses, exclusive of taxes, brokerage commissions and
extraordinary expenses, for certain funds to the extent they exceeded the
following total annualized expense limits:
EXPENSE EXPENSE
FUND LIMITATION FUND LIMITATION
- ---- ---------- ---- ----------
300 Fund 0.90% Balanced Fund 1.30%
Small Cap Value Fund 1.60% Ultra Short Bond Fund 0.10%(1)
(1) For the period July 1, 2003 to October 27, 2003, the adviser voluntarily
waived all fees and reimbursed all expenses for the Ultra Short Bond Fund.
The above expense limitations for the 300 Fund, Balanced Fund and Ultra Short
Bond Fund are voluntary and may be removed by the adviser at any time. The
expense limitation for the Small Cap Value Fund is contractual and expires June
30, 2005.
FEES PAID INDIRECTLY During the period, certain funds participated in a directed
brokerage program in which the funds utilize recaptured commissions on
securities transactions to pay for, in whole or in part, accounting expenses of
the funds.
INVESTMENT TRANSACTIONS
The following summarizes purchases and sales of investment securities, other
than short-term investments, by fund for the year ended June 30, 2004:
66
FINANCIAL NOTES
FUND PURCHASES SALES FUND PURCHASES SALES
---- --------- ----- ---- --------- -----
Small Cap Core Growth Fund $ 57,750,408 $ 51,546,547 Value Fund $30,181,768 $26,264,788
Emerging Growth Fund 279,288,302 304,558,394 Global Equity Fund 54,663,798 79,123,838
Core Growth Fund 824,038,217 861,988,572 Balanced Fund 3,079,227 1,573,256
300 Fund(1) 7,857,714 1,323,725 Income Fund 39,376,944 49,568,928
Small Cap Value Fund(2) 1,738,130 427,647 Ultra Short Bond Fund 5,825,901 6,641,751
(1) For the period August 29, 2003, commencement of operations, to June 30,
2004.
(2) For the period March 31, 2004, commencement of operations, to June 30, 2004.
FEDERAL TAX INFORMATION
The tax character of dividends paid by the funds during the past two fiscal
years were as follows:
FISCAL YEAR ENDED 2004 DIVIDENDS PAID FROM
-----------------------
Net Tax
long-term Total return
Ordinary capita(l) taxable of Total
income gains dividends capital dividends paid(1)
-------- --------- ---------- ------- -----------------
300 Fund $ 4,055 $ - $ 4,055 $ - $ 4,055
Balanced Fund 37,124 - 37,124 - 37,124
Income Fund 2,265,775 - 2,265,775 - 2,265,775
Ultra Short Bond Fund 177,984 - 177,984 - 177,984
Money Market Fund 152,547 - 152,547 - 152,547
FISCAL YEAR ENDED 2003 DIVIDENDS PAID FROM
-----------------------
Net Tax
long-term Total return
Ordinary capital taxable of Total
income gains dividends capital dividends paid(1)
------ ----- --------- ------- -----------------
Balanced Fund $ 325 $ - $ 325 $ - $ 325
Income Fund 2,872,716 - 2,872,716 - 2,872,716
Ultra Short Bond Fund 72,439 - 72,439 - 72,439
Money Market Fund 909,800 - 909,800 - 909,800
As of June 30, 2004 the components of accumulated earnings/deficit on a tax
basis for the funds were as follows:
Undistributed Undistributed Accumulated Unrealized Total
ordinary long-term Accumulated Dividends capital and appreciation/ accumulated
income capital gains earnings payable other losses depreciation(2) earnings/deficit
------ ------------- -------- ------- ------------ --------------- ----------------
Small Cap Core Growth
Fund $1,108,006 $190,731 $1,298,737 $ - $ - $ 721,478 $ 2,020,215
Emerging Growth Fund - - - - (186,831,604) 12,089,593 (174,742,011)
Core Growth Fund - - - - (81,665,805) 35,170,078 (46,495,727)
300 Fund 37,202 - 37,202 - - 376,392 413,594
Small Cap Value Fund - - - - (29,718) 21,374 (8,344)
Value Fund - - - - (9,143,852) 2,294,752 (6,849,100)
Global Equity Fund - - - - (131,400,223) 8,185,783 (123,214,440)
Balanced Fund 76,921 2,255 79,176 (6,841) - 78,232 150,567
Income Fund 188,499 - 188,499 (188,499) (5,502,205) (157,640) (5,659,845)
Ultra Short Bond Fund 10,679 - 10,679 (10,934) (87,234) (22,987) (110,476)
Money Market Fund 27,197 - 27,197 (27,197) (9,083) - (9,083)
(1) Total dividends paid may differ from the amount reported in the Statement of
Changes in Net Assets because for tax purposes dividends are recognized when
actually paid.
(2) The differences between book-basis and tax-basis unrealized
appreciation/depreciation are attributable primarily to tax deferral of
losses on wash sales.
67
FINANCIAL NOTES
As of June 30, 2004, the funds had the following net capital loss carryforwards,
which are available to offset future realized gains:
Amount Expires Amount Expires Amount Expires Amount Expires
------ ------- ------ ------- ------ ------- ------ -------
Emerging Growth Fund $ - - $150,661,298 2010 $ 36,170,306 2011 $ - -
Core Growth Fund - - 35,043,052 2010 46,622,753 2011 - -
Small Cap Value Fund - - - - - - 29,718 2012
Value Fund - - 1,388,345 2010 4,976,984 2011 2,778,523 2012
Global Equity Fund(1) 432,059 2009 107,044,617 2010 9,283,310 2011 14,198,702 2012
Income Fund 59,139 2009 836,643 2010 4,606,423 2011 - -
Ultra Short Bond Fund - - - - - - 74,733 2012
Money Market Fund 9,083 2009 - - - - - -
(1) Included in the above are the following amounts which are subject to certain
limitations on availability, to offset future net capital gains, if any, as
the successor of a merger: $432,059 expiring in 2009, $33,758 expiring in
2010 and $345,833 expiring in 2011.
Net capital losses incurred after October 31, 2003, and within the taxable year
are deemed to arise on the first business day of each fund's next taxable year.
For the year ended June 30, 2004, the Global Equity Fund deferred to July 1,
2004 post October currency losses of $441,535, and Ultra Short Bond Fund
deferred to July 1, 2004 post October capital losses of $12,501.
SUPPLEMENTAL INFORMATION (UNAUDITED)
FEDERAL TAX INFORMATION For the fiscal year ended June 30, 2004, $4,055 of
dividends paid by the 300 Fund and $11,948 of dividends paid by the Balanced
Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs
and Growth Tax Relief Reconciliation Act of 2003. The funds intend to designate
the maximum amount allowable as taxed at a maximum rate of 15%. Complete
information will be reported in conjunction with your 2004 Form 1099-DIV.
For the tax year ended June 30, 2004, 100% of income dividends paid by the 300
Fund and 10% of income dividends paid by the Balanced Fund qualify for the
dividends received deduction available to corporations.
THE FUNDS' TRUSTEES AND OFFICERS A Board of Trustees oversees and monitors the
management of the Trust. These oversight responsibilities include selection of
the investment adviser and election of officers, who are in turn responsible for
the day to day operations of the Trust. The tables below show the Trustees and
Trustee Emeritus and officers of Citizens Funds as of June 30, 2004.
The Trustees in the second table (Independent Trustees) are not considered
interested persons and have no affiliation with the funds' adviser or
distributor. The third table lists fund officers who are not Trustees. All of
these officers are considered interested persons.
The term of office for each Trustee is eight years, except that Sophia Collier
has an open-ended term. Each Trustee is a Trustee for eleven funds within the
Citizens Funds complex, and no Trustee is currently a trustee or director for
any other mutual fund or company. Mitchell A. Johnson, Trustee Emeritus, is a
trustee/director of three funds at FBR Funds and a director of the Federal
Agricultural Mortgage Corporation. Except as noted below, the address for each
Trustee and officer in connection with their fund duties is One Harbour Place,
Suite 400, Portsmouth, NH 03801.
68
SUPPLEMENTAL INFORMATION (UNAUDITED)
AFFILIATED TRUSTEE/TRUSTEE EMERITUS
POSITION(S) WITH FUNDS AND DATE
NAME AND AGE OF ELECTION OR APPOINTMENT PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ------------ -------------------------- -------------------------------------------
Sophia Collier(1) Trustee since 10/91 Portfolio Manager, Citizens Funds, since 3/95. Majority Owner and Chair
48 years President 1991 - 1998 and of Board of Directors, Citizens Advisers, Inc., since 12/91.
since 8/02 President, Citizens Advisers, Inc., 12/91 - 9/98 and since 7/02.
Chair of Board 1/02 - 8/02 President, Northpoint Technology, Ltd., 1/97 -
6/02, Chair of the Board of Directors, Northpoint Technology, Ltd.,
since 6/02.
Mitchell A. Johnson(1) Trustee Emeritus 8/01 - 11/02 President, MAJ Capital Management (personal investments),
62 years and since 2/04. Trustee since 8/94. Senior Vice President, Corporate
12/97 - 8/01 and 11/02 - 2/04 Finance, Student Loan Marketing Association, 5/73 - 8/94.
INDEPENDENT TRUSTEES
POSITION(S) WITH FUNDS AND DATE
NAME AND AGE OF ELECTION OR APPOINTMENT PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ------------ -------------------------- -------------------------------------------
Walter D. Bristol, Jr. Trustee since 5/01 Executive Vice President for Corporate Operations and Chief Financial
54 years Chair of the Board since Officer, American Heart Association, since 5/96.
8/04
Vice Chair of the Board
8/02 - 8/04
Jeannie H. Trustee since 5/01 Senior Vice President, Verizon, since 8/04, Vice President, Verizon, 8/02
Diefenderfer - 7/04, Group President, Verizon, 8/01 - 7/02, Senior Vice President,
Verizon, 5/98-7/01, Executive Director, Verizon, 2/96 - 4/98
Pablo S. Eisenberg Trustee since 12/99 Senior Fellow, Public Policy Institute, Georgetown University, since 1/99.
72 years Executive Director, Center for Community Change, 5/75 - 6/98.
Orlando Hernandez Trustee since 8/01 Vice President of Finance, Texas Instruments, 5/76 - 4/01.
57 years
Martha S. Pope Trustee since 12/99 Trustee, National Park Foundation, since 8/00. Trustee, Hofstra
59 years Chair of the Board 8/02 University, since 6/00. Senior Advisor for the Northern Ireland Peace
- 8/04 Negotiations, 1/95 - 7/98.
OFFICERS WHO ARE NOT TRUSTEES
POSITION(S) WITH FUNDS AND DATE
NAME AND AGE OF ELECTION OR APPOINTMENT PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ------------ -------------------------- -------------------------------------------
Sean P. Driscoll Treasurer since 3/99 Senior Vice President, Citizens Advisers, Inc, since 4/03. Vice President,
39 years Citizens Advisers, Inc., 10/99 - 4/03. Director, Citizens Advisers, Inc.,
11/98 - 10/99.
Marcia Kovalik Secretary since 5/03 Vice President, Citizens Advisers, Inc., since 4/03. Counsel, Citizens
41 years Asst. Secretary 5/01 - Advisers, Inc., 2/01 - 4/03. Associate, Boynton, Waldron, Doleac, Woodman &
5/03 Scott, P.A., 9/95 - 2/01.
Alaina Metz(2) Asst. Secretary since 2/01 Chief Administrative Officer, BISYS Fund Services Ohio, Inc., since 6/95.
37 years
(1) Sophia Collier and each officer listed as an interested person of the funds,
is interested by virtue of their position or affiliation with the funds'
investment adviser. Mitchell A. Johnson is considered an interested person
as a result of a business relationship with a subsidiary of Northpoint
Technology, Ltd., of which Sophia Collier is Chair of the Board of
Directors.
(2) Address: BISYS Fund Services, 3435 Stelzer Road, Columbus, OH 43219
The funds' Statement of Additional Information includes additional information
about the Trustees and officers and is available, without charge, by calling
800.223.7010.
69
TRUSTEES MANAGER LEGAL COUNSEL
Walter D. Bristol, Jr. Citizens Advisers, Inc. Bingham McCutchen LLP
Sophia Collier One Harbour Place, Suite 400 Boston, MA 02110
Jeannie H. Diefenderfer Portsmouth, NH 03801
Pablo S. Eisenberg 800.223.7010 INDEPENDENT REGISTERED
Orlando Hernandez 603.436.5152 PUBLIC ACCOUNTING FIRM
Martha S. Pope PricewaterhouseCoopers LLP
CUSTODIAN Columbus, OH 43215
TRUSTEE EMERITUS Fifth Third Bank
Mitchell A. Johnson Cincinnati, OH 45263
DISTRIBUTOR TRANSFER AND
Citizens Securities, Inc. ACCOUNTING AGENT
One Harbour Place, Suite 400 BISYS Fund Services Ohio, Inc.
Portsmouth, NH 03801 3435 Stelzer Road
800.223.7010 Columbus, OH 43219
603.436.5152
Citizens Funds are distributed by Citizens Securities, Inc., Portsmouth, NH
03801 and are available through such popular mutual fund supermarkets as Charles
Schwab's Mutual Fund OneSource(R) and Fidelity Investments' FundsNetwork(R).
Citizens Funds(R) is a trademark of Citizens Advisers, Inc.
This report is intended for shareholders of Citizens Funds and is not authorized
for distribution to other persons unless accompanied or preceded by a
prospectus. Please consider the investment objectives, risks, charges and
expenses of Citizens Funds carefully before investing. For this and other
information, please call 800.223.7010 or visit www.citizensfunds.com for a free
prospectus and read it carefully before investing.
AT CITIZENS FUNDS, WE WANT OUR INVESTORS TO KNOW HOW MUCH WE VALUE THEIR
BUSINESS. THAT'S WHY WE OFFER A COMPREHENSIVE RANGE OF SERVICES THAT INCLUDES
EVERYTHING FROM ATTENTIVE TELEPHONE REPRESENTATIVES TO AN INFORMATIVE WEB SITE.
EXCHANGES BETWEEN CITIZENS FUNDS
You can move your money easily from any one of our funds to another.
INDIVIDUAL RETIREMENT PLANS (IRA)
We offer investors the opportunity to invest in a variety of IRAs, including
Traditional, Roth and Rollover. Citizens Funds are also available for 401(k),
403(b), SEP and SIMPLE retirement plans.
AUTOMATIC INVESTMENT PLAN
Invest automatically on a monthly or quarterly basis with payroll deduction or
electronic transfer from your bank.
UNPARALLELED CUSTOMER SERVICE
Our representatives are well-trained professionals whose goal is to satisfy most
requests during the first phone call. They are available from 9 A.M. to 6 P.M.
(ET) Monday - Friday at 800.223.7010.
WWW.CITIZENSFUNDS.COM
Our web site offers daily fund prices, performance, fund and manager profiles,
fund prospectuses and applications, shareholder activism updates, online account
access and transactions and much more.
INTELLIGENT COMMUNICATIONS
Citizens Funds was a pioneer of the plain English prospectus well before it
became the standard for the rest of the mutual fund industry. We try to bring
that same spirit of innovation, plain-speak and respect for our shareholders to
all our communications.
PROXY VOTING
A description of the policies and procedures that the funds use to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, by calling 800.223.7010, on our website, and on the SEC's website
at http://www.sec.gov.
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer and principal financial
officer. This code of ethics is included as Exhibit 11(a)(1).
(b) During the period covered by this report, no amendments were made to
the provisions of the code of ethics
(c) During the period covered by this report, no implicit or explicit
waivers to the provisions of the code of ethics were granted.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Walter D. Bristol, Jr. and Orlando Hernandez, members of the Audit Committee,
have been determined by the Board of Trustees in their reasonable business
judgment to meet the definition of "audit committee financial expert" as such
term is defined in the instructions to Form N-CSR. In addition, Messrs. Bristol
and Hernandez are both "independent" members of the Audit Committee as defined
in the instructions to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees. For the fiscal years ended June 30, 2003 and June 30,
2004, PricewaterhouseCoopers ("PWC") billed audit fees to the
registrant in the amount of $132,000 and $142,000 respectively.
(b) Audit Related Fees. None.
(c) Tax Fees. For the fiscal years ended June 30, 2003 and June 30,
2004, PWC billed tax fees to the registrant in the amount of $34,000
and $32,000 respectively.
(d) All Other Fees. None.
(e)(1) The full audit committee preapproves the following:
- all audit and permitted non-audit services to be provided the Funds,
and
- all permitted non-audit services to be provided by the Funds'
independent accountant to the adviser and to entities controlling,
controlled by or under common control with the adviser that provide
ongoing services to the Funds, if the services relate directly to
the operations and financial reporting of the Funds,
except that de minimis non-audit services, may, to the extent
permitted by applicable law, be approved prior to completion of the
audit, and except that preapproval is not required where the
services would not need to be preapproved pursuant to applicable
rules and regulations.
(e) (2) For the fiscal years ended June 30, 2003 and June 30, 2004, 100%
of all the fees in paragraph (b) through (d) of this Item were
approved by the audit committee.
(f) Not Applicable.
(g) Not Applicable.
(h) Not Applicable.
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. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not Applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer
have concluded, based on their evaluation of the registrant's disclosure
controls and procedures as conducted within 90 days of the filing date of this
report, that these disclosure controls and procedures are adequately designed
and are operating effectively to ensure that information required to be
disclosed by the registrant of Form N-CSR is (i)
accumulated and communicated to the investment company's management, including
its certifying officers, to allow timely decisions regarding required
disclosure; and (ii) 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
(the registrant's second fiscal half-year in the case of an annual report) that
have materially affected or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit.
Code of Ethics attached hereto.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2). Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not Applicable.
(b) A certification of each principal executive officer and principal officer of
the registrant as required by Rule 30a-2(b) under the Act of 1940. Certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto.
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.
Citizens Funds
By: /s/ Sophia Collier
-----------------------
Sophia Collier
President
Date: August 25, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Sophia Collier
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Sophia Collier
President
Date: August 25, 2004
By: /s/ Sean P. Driscoll
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Sean P. Driscoll
Treasurer
Date: August 25, 2004