As filed with the Securities and Exchange Commission on August 24, 2005
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
June 30
(Date of fiscal year end)
June 30, 2005
(Date of reporting period)
ITEM 1. REPORT TO SHAREHOLDERS
[CITIZENS FUNDS LOGO]
("GRAPHIC OF DOLPHINS")
2005 ANNUAL REPORT
AND SUPPLEMENTAL COMMENTARY
NOT A PART OF THE ANNUAL REPORT
TABLE OF CONTENTS
<Table>
<Caption>
SUPPLEMENTAL COMMENTARY
Letter from the president 1
Citizens focus: Advocating on your behalf 3
Citizens focus: Market overview 6
ANNUAL REPORT
Risks of mutual fund investing 8
Benchmarks 9
Portfolio review 11
Portfolio composition 38
Report of independent registered public accounting firm 40
Citizens Funds holdings 41
Statements of assets and liabilities 64
Statements of operations 66
Statements of changes in net assets 68
Financial highlights 72
Financial notes 78
Supplemental information 86
Shareholder services 97
</Table>
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.
NOT A PART OF THE ANNUAL REPORT
LETTER FROM THE PRESIDENT
Dear Shareholder,
The twelve months ended June 30, 2005 have been good ones for Citizens Funds.
The financial markets have been doing well, and so have we. It is satisfying to
see the positive results for our shareholders from the investments we have made
over the last three years in research, investment personnel and related
information technology. Our goal at Citizens has always been to create strong
financial returns by investing in financially promising companies that are
managed with a high level of corporate responsibility. I believe we made
significant progress toward reaching that goal in fiscal 2005.
Our flagship Citizens Core Growth Fund* led by portfolio manager Jon White was a
particular highlight in fiscal 2005, celebrating its ten year anniversary during
the period. Jon's disciplined, high quality, growth strategy has been quite
effective and the results are evident in the fund's performance. Citizens Core
Growth Fund standard shares placed in the 9th percentile of 672 large-cap growth
funds tracked by Lipper based on its one year total return ending June 30, 2005.
For the fund's 10 year annualized total return, Lipper placed it in the 31st
percentile in a peer group of 142 funds, and for the 5 year annualized total
return Lipper placed it in the 49th percentile in a peer group of 438 funds as
of the end of the period. As you consider your investment options, I hope you
will take a look at this fund.
One source of strong performance for a number of our funds over those twelve
months came directly from our research effort and stock selection within the
energy sector. In 2003, one of our initiatives was to identify the best energy
companies that met our high standards for corporate and environmental
responsibility so that we would be ready to invest, should the energy theme
develop. We believed at the time, energy could be an important investment theme
in the future. As it turned out energy has been a very strong area and our
shareholders invested in those of our funds with energy holdings, have benefited
nicely.
NOT A PART OF THE ANNUAL REPORT (CONTINUED)
"Our flagship Citizens Core Growth Fund* ("PHOTO OF SOPHIA COLLIER")
led by portfolio manager Jon White was
a particular highlight in 2005... Jon's
disciplined, high quality, growth strategy
has been quite effective and the results are
evident in the fund's performance."
I was interested to see a cover story in a recent issue of Forbes magazine
entitled "GE Goes Green." General Electric (GE) has long been a rejected company
at Citizens based on its environmental record and military sales. GE's chairman
and CEO Jack Welch retired in 2002, ushering in a new era for the company. While
it is going to take a lot more progress than was described by Forbes for
Citizens to invest in GE, it is encouraging to see a very large company begin
moving in more positive directions. One of the key innovations at GE (and
elsewhere) is improving Light Emitting Diode (LED) technology. The energy saving
potential from this type of improvement is enormous, and it is thought that
these low-level power devices can one day replace light bulbs.
In the coming years, I believe we will see a continuation of the dramatic
increases in development in the emerging world. It is crucial for our global
environment that energy efficient technologies take hold. It is encouraging to
see progress in energy efficient technologies under development by our portfolio
companies. We will continue to research this area and look forward to developing
this, and other promising investment themes, in the coming year.
Sincerely yours,
- -s- Sophia Collier
Sophia Collier
President
* See pages 8-10 for important fund risks and benchmark and other disclosures.
In considering performance of the funds for the twelve month period, you should
also consider the funds' longer term track record described elsewhere in this
report. Of course, past performance does not guarantee future results.
NOT A PART OF THE ANNUAL REPORT 2
CITIZENS FOCUS
ADVOCATING ON YOUR BEHALF
We are making headway in our efforts to change how companies define, manage and
report on environmental and corporate governance performance. During the year
Citizens Advisers became a founding supporter of SIRAN (Social Investment
Research Analyst Network). SIRAN, a working group of the Social Investment
Forum, is an analyst network that supports more than 100 North American social
research analysts from 30 investment firms, research providers, and affiliated
investor groups.
Citizens is an active participant in SIRAN's project to benchmark use of the
Global Reporting Initiative's (GRI) Sustainability Reporting Requirements, by
companies in the U.S. S&P 100 Index. The goal of the project is to have 25% of
the S&P 100 referencing the GRI in their Corporate Social Responsibility (CSR)
reports by the end of 2005.
We require at least one element of diversity ("PHOTO OF
on the board or the top two tiers of management DAVID LOEHWING, SR.")
for domestic or global companies to be considered
for inclusion in our portfolios... It is startling how
many of the nation's largest companies do not
publicly disclose this information.
- ------------------------------------------------------
David Loehwing, Sr. Social Research Analyst
Another important SIRAN initiative we focused on was to engage companies on the
issue of increasing and improving disclosure of Equal Employment Opportunity
(EEO) data. Citizens wrote to S&P 100 Index companies to encourage the
disclosure of this information. We require at least one element of diversity on
the board or the top two tiers of management, for domestic or global companies
to be considered for inclusion in our portfolios. We believe this information
gives us a better perspective on a company's commitment to hiring, retaining and
promoting a diverse
S&P 100 INDEX COMPANIES EE0-1 DATA DISCLOSURE SURVEY
YES NO
- --------------------------------------------------------------------------------
Company provides full public EEO-1 disclosure 8 92
Company provides full EEO-1 disclosure to analysts on request 59 41
Company provides partial public EEO-1 disclosure 26 74
- -------------------------------------------------------------------------------
(Source: SIRAN June 2005, http://www.siran.org/eeo1.php)
3 NOT A PART OF THE ANNUAL REPORT
workforce. While companies with more than 100 employees are required by law to
report the data, it is startling how many of the nation's largest companies do
not publicly disclose this information.
WHY DISCLOSURE IS IMPORTANT
Seeking to minimize risk is a key element of our investment process. We believe
companies that integrate sustainability reporting into their operations will be
better prepared to manage, track and evaluate the effectiveness of environmental
management, community involvement, diversity and corporate governance
initiatives. A growing body of evidence suggests companies may avoid lawsuits
and liabilities, market exclusion and damaged reputations through increased
monitoring and reporting. We believe companies with strong fundamentals that are
actively working to evaluate and report on the costs and benefits of
sustainability initiatives may pose less risk to long-term investors.
COSMETICS SAFETY
Citizens joined other SRI investors to engage in dialogs with global cosmetics
manufacturers Estee Lauder and Avon on their toxics reduction and ingredient
reformulation efforts. A European Union (EU) directive banning toxic and
carcinogenic ingredients (CMRs) requires companies to reformulate products sold
and distributed in the EU. However, the U.S. currently does not require the
reformulation of ingredients used in cosmetics and personal care products sold
in the U.S. Despite the lack of U.S. regulation requiring reformulation, we
believe shareholder value is at risk in companies that do not proactively
reformulate products sold in the U.S. We feel the increased level of awareness
of health risks posed by carcinogenic ingredients will raise consumer demand for
reformulated cosmetics and personal care products. We believe companies that
move forward with reformulation will have a competitive advantage.
("PHOTO OF We feel the increased level of awareness of
VESELA VELEVA SC.D.") health risks posed by carcinogenic ingredients will
raise consumer demand for reformulated cosmetics
and personal care products. We believe companies
that move forward with reformulation will have a
competitive advantage.
------------------------------------------------------
Vesela Veleva Sc.D., Social Research Analyst
NOT A PART OF THE ANNUAL REPORT 4
Citizens' Dr. Vesela Veleva's paper entitled "New EU rules for the cosmetics
industry: What do they mean for U.S. companies and stakeholders?" compares and
contrasts the EU directive with current U.S. requirements. An excerpt of the
paper, to be published later this year in Corporate Environmental Strategy
(CES), will be made available on our website at www.citizensfunds.com.
We will watch this issue closely to help us identify which companies will be the
leaders and which will be the laggards to improve the safety of personal care
products we use every day. Of particular interest will be companies moving
forward to find alternatives to testing such products on animals.
OUTLOOK
We remain encouraged by the increased awareness and media attention of corporate
governance and environmental issues. Our focus to identify companies providing
robust disclosure of corporate, social and environmental performance will
continue, as will our work with companies we hold to help them improve their
social/environmental disclosure. We believe increased disclosure helps make
companies better corporate citizens and strong investment candidates.
We believe increased disclosure helps make ("PHOTO OF
companies better corporate citizens and strong JOANNE DOWDELL")
investment candidates.
- -----------------------------------------------------------
Joanne Dowdell, Vice President -- Corporate Responsibility
5 NOT A PART OF THE ANNUAL REPORT
CITIZENS FOCUS
MARKET OVERVIEW
The financial markets had a positive year for Citizens ("PHOTO OF JON WHITE")
Funds' fiscal 2005, the twelve months ended June 30,
2005. The S&P 500 Index, a proxy for large cap stocks
in the United States was up 6.32% for the period and
the Lehman Brothers U.S. Aggregate Index, which is
representative of the domestic fixed income markets,
was up 6.80%. Smaller stocks did even better in the
period with the S&P 600 SmallCap Index up 13.45% during
the period. The route to these solid returns, however,
was anything, but average. It is said that the stock
market climbs a "wall of worry." This pattern was
highly evident during the fiscal year.
Jon White, CFA,
Chief Market Strategist
Strong earnings reports and
signs of economic growth
rekindled the markets in
the last quarter.
The fiscal year began with a sharp sell off in the markets. Investor attention
was focused on the prospect of the economy slowing as a result of high oil
prices and rising interest rates. Small cap stocks were particularly hard hit,
and few sectors were immune from what seemed to be indiscriminate selling
pressure. As the fall season came, investor sentiment improved as it became
apparent the economy was stronger than many thought. Corporate profits, which
serve as a sometimes humbling, sometimes exhilarating reality check on investor
opinions, came in stronger than many predicted. In November and December the
U.S. stock market had a strong rally. Small cap stocks had the best results
during this period, but most sectors participated with excellent gains.
Profit taking and the reemergence of fears of slowing growth caused negative
returns for virtually all stock market indices in the third quarter of the
fiscal year, but strong earnings reports and signs of economic growth rekindled
the markets in the last quarter.
NOT A PART OF THE ANNUAL REPORT 6
During the fiscal year "value" strategies, which typically focus on inexpensive,
slower growing stocks outperformed "growth" strategies, which seek companies
with high growth forecasts. However, this pattern may be changing. For the last
five years, value stocks have outperformed growth stocks. In the last quarter of
the fiscal year, growth stocks began to show signs of improvement and many
believe growth stocks are overdue for a period of outperformance versus value
stocks.
Concerns about the pace of the economic recovery and inflation spurred the
Federal Reserve to move the federal funds rate to what is considered a more
neutral level. The Federal Reserve raised its target for the federal funds rate
eight times during the fiscal year, mostly expected and anticipated by the
markets. Consequently, the short term interest rates increased and longer term
rates decreased, during the same period. At present, the federal funds futures
market is pricing in even more increases to the federal funds rate. We believe
this is a reasonable expectation under current economic conditions, and the
resulting increase in the cost of borrowing may temper the robust growth we
witnessed during the fiscal year.
Looking ahead we believe market sentiment is improving. While the market has not
returned to the highs of March 2000, indexes have been steadily climbing the
"wall of worry." For example, the S&P 500 Index has returned 55.5% since the
market low in October 2002. These gains have been based on a strong recovery in
corporate earnings, a satisfying and appropriate foundation for increasing
value.
7 NOT A PART OF THE ANNUAL REPORT
RISKS OF MUTUAL FUND INVESTING
As with any fund that invests in stocks or fixed-income securities, the value of
your investment will fluctuate in response to individual company actions, as
well as general economic, political and market conditions. Reactions to these
factors may differ among various stock types, and investments in specific funds
may present unique risks -- and benefits -- given the nature of their focus.
Many of these risks are discussed below and additional information on risks may
also be found in the Citizens Funds prospectus.
GROWTH INVESTING RISKS
Growth stocks may be especially volatile, because their prices are largely based
on future earnings.
VALUE INVESTING RISKS
Value stocks may fall or remain flat if certain conditions or investor
perceptions do not change as expected, or if the companies prove not to be
underpriced.
SMALL- AND MEDIUM-SIZED COMPANY RISKS
Small- and medium-sized companies pose unique investment risks as they may have
less seasoned management, limited product lines, financing and market share
challenges, and shares that trade with more volatility, less frequently or in
smaller volumes.
INDEX-RELATED RISKS
The performance of the Citizens 300 Fund may deviate from that of the Citizens
Index due to factors such as fund fees and expenses and the fund's composition
differing from that of the index.
FOREIGN INVESTING RISKS
Foreign markets pose unique investment risks, including political instability
and currency risks, excessive taxation, different financial and auditing
standards, increased market volatility and other factors.
FIXED-INCOME INVESTING RISKS
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. There
is also the chance that some of the fund's holdings will have their credit
ratings down-graded or may default, potentially reducing the fund's income level
and share price.
8
HIGH-YIELD SECURITY RISKS
High-yield securities offer the potential for higher returns but present
significant volatility and risk of loss of principal and interest.
MONEY MARKET RISKS
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.
BENCHMARKS
When evaluating performance of any investment, it is useful to look at both
absolute and relative return. In other words, how much did the fund generate or
lose for shareholders in the reporting period, and how did that performance
compare to the fund's benchmark? We present this information in each of our
portfolio reviews. Below is a brief description of the benchmarks we use. Please
keep in mind that these benchmark indices are unmanaged, meaning you can't
invest directly in them, and their performance does not reflect the impact of
fees and expenses that apply to our funds.
The S&P 500 INDEX includes a representative sample of 500 leading companies in
the U.S. economy, focused on the large-cap segment.
The S&P SMALLCAP 600 INDEX includes small-sized U.S. companies.
The RUSSELL 1000 GROWTH INDEX measures the performance of those Russell 1000
companies with higher price-to-book ratios and higher forecasted growth values.
The Russell 1000 Index covers the large-cap segment of the U.S. equity universe.
The RUSSELL MIDCAP GROWTH INDEX measures the performance of those Russell Midcap
companies with higher price-to-book ratios and higher forecasted growth values.
The Russell Midcap Index covers the mid-cap segment of the U.S. equity universe;
it includes the smallest 800 securities in the Russell 1000 Index.
The RUSSELL 2000 GROWTH INDEX measures the performance of those Russell 2000
companies with higher price-to-book ratios and higher forecasted growth values.
The Russell 2000 Index covers the small-cap segment of the U.S. equity universe.
9
The MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD INDEX is a market
capitalization-weighted equity index of over 1,500 stocks traded in 23 world
markets.
The LEHMAN BROTHERS U.S. AGGREGATE INDEX is comprised of taxable, investment
grade fixed-income securities, including government, corporate, mortgage and
asset-backed securities.
The BLENDED INDEX is comprised of 60% S&P 500 Index and 40% Lehman Brothers U.S.
Aggregate Index.
The MERRILL LYNCH 1-YEAR TREASURY INDEX tracks the performance of U.S. Treasury
notes with maturities of approximately one year. The index is produced by
Merrill Lynch, Pierce, Fenner & Smith, Ltd.
The CITIZENS INDEX, though not one of our benchmarks, consists of 300 mostly
U.S. companies that meet Citizens Advisers financial and social criteria. The
Citizens 300 Fund seeks to replicate the composition and performance of the
Citizens Index.
10
CITIZENS 300 FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
Long-term capital appreciation
INVESTMENT STRATEGY
Invests mainly in stocks and other equities of U.S. large-capitalization
companies
INCEPTION DATE
Standard shares: 8.29.03
RISKS
Growth, value and index-related investing (See pages 8-10 for important fund
risk and benchmark disclosures.)
WE BELIEVE ADHERING TO THE SELECTION OF COMPANIES WITHIN THE SOCIALLY
RESPONSIBLE CITIZENS INDEX CAN BE AN INTELLIGENT WAY TO PARTICIPATE IN THE LARGE
CAP UNIVERSE OF STOCKS.
HOW DID WE DO?
The Citizens 300 Fund returned 1.84% versus the benchmark S&P 500 Index return
of 6.32% for the fiscal year ended June 30, 2005. The returns for the S&P 500
Index during this period were dominated by the benchmark's holdings in the
energy and utility sectors, with each sector returning in excess of 38%.
Although we managed a respectable return in excess of 34% for each of these
sectors within our fund, relative to the benchmark these sectors underperformed,
and we were underweighted in these same sectors versus the S&P 500 Index.
Two of the fund's four largest holdings, energy giant British Petroleum and
Johnson & Johnson, were strong contributors to positive performance during the
period. We believe the pharmaceutical giant, Johnson & Johnson, to be one of the
best-run public pharmaceutical companies in the United States.
Among other notable winners in the fund were energy giant Conoco-Phillips and
UnitedHealth Group. Conoco-Phillip's and UnitedHealth Group, both of whose stock
prices provided double digit price appreciation for the period, contributed
significantly to positive fund performance. Other sectors also contributed to
positive performance of the fund, including our holdings in the
telecommunications services sector, which returned 8.4%, and our holdings within
the consumer discretionary sector, which returned 3.8%.
CITIZENS 300 FUND
11
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 Since
Ticker Year inception
- ---------------------------------------------------------------------------------------------
STANDARD SHARES CFCDX 1.84% 7.27%
</Table>
PERFORMANCE OVER TIME (as of 6.30.05)
This chart shows the performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over
time for the index shown.
(PERFORMANCE OVERTIME)
CITIZENS 300 INDEX FUND
PERFORMANCE SINCE INCEPTION 8/29/03
DATE CITIZENS 300 INDEX FUND S&P 500 INDEX RETURN
- ---- ----------------------- -------------------
08/29/2003 $ 10,000.00 $ 10,000.00
09/30/2003 $ 9,890.00 $ 9,894.00
10/31/2003 $ 10,490.00 $ 10,454.00
11/30/2003 $ 10,580.00 $ 10,546.00
12/31/2003 $ 10,980.50 $ 11,098.61
01/31/2004 $ 11,120.70 $ 11,302.82
02/29/2004 $ 11,200.70 $ 11,459.93
03/31/2004 $ 11,080.60 $ 11,286.88
04/30/2004 $ 10,890.40 $ 11,109.68
05/31/2004 $ 11,040.60 $ 11,261.88
06/30/2004 $ 11,170.70 $ 11,480.36
07/31/2004 $ 10,650.20 $ 11,100.36
08/31/2004 $ 10,660.20 $ 11,145.10
09/30/2004 $ 10,740.30 $ 11,265.80
10/31/2004 $ 10,910.50 $ 11,437.94
11/30/2004 $ 11,310.80 $ 11,900.72
12/31/2004 $ 11,690.00 $ 12,305.70
01/31/2005 $ 11,376.10 $ 12,005.75
02/28/2005 $ 11,507.30 $ 12,258.35
03/31/2005 $ 11,244.90 $ 12,041.26
04/30/2005 $ 10,992.50 $ 11,812.47
05/31/2005 $ 11,416.50 $ 12,188.34
06/30/2005 $ 11,376.10 $ 12,205.65
Data presented reflects past performance of the fund, which is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Performance data current to the most recent month end may be
obtained online 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. Investment return and principal value of an
investment in the fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original costs. Performance
figures and the growth of a $10,000 hypothetical investment assume reinvestment
of dividends and distributions but do not reflect the deduction of taxes you
would pay on fund distributions or redemptions of fund shares.
- --------------------------------------------------------------------------------
The largest detractor from performance of the fund for the period was the
pharmaceutical giant Pfizer, whose stock price ended the fiscal year with a
decline of more than 19%. Pfizer struggled earlier in the second half of the
fiscal year, as concerns over Cox-2 inhibitors (including Pfizer's Celebrex)
made headlines. Our exposure to the technology sector, with an average weight of
16.9% during the fiscal year, also detracted from fund performance.
OUTLOOK
Looking ahead, we remain positive about the markets. We believe earnings growth
will remain positive, but increasing costs of oil, energy and capital will
dampen the acceleration of growth. We believe expansion will continue, though at
decreasing rates as a result of the current economic environment. We believe
adhering to the selection of companies within the socially responsible Citizens
Index can be an intelligent way to participate in the large cap universe of
stocks.
CITIZENS 300 FUND
12
CITIZENS CORE GROWTH FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
Long-term capital appreciation
INVESTMENT STRATEGY
Invests mainly in stocks of U.S. large-capitalization companies
INCEPTION DATES
Standard shares: 3.03.95
Institutional shares: 1.25.96
Administrative shares: 2.04.00
RISKS
Growth investing (See pages 8-10 for important fund risk and benchmark
disclosures.)
OUR GOAL IS TO MAINTAIN A PORTFOLIO THAT IS WELL DIVERSIFIED, BUT SUFFICIENTLY
CONCENTRATED SO GOOD IDEAS WILL MAKE A DIFFERENCE.
HOW DID WE DO?
The fund's standard shares returned 8.95% for the fiscal year ended June 30,
2005, while the Russell 1000 Growth Index returned 1.68%, and the S&P 500 Index
returned 6.32% for the same period. The outperformance of the fund relative to
the benchmark Russell 1000 Growth Index can be attributed to portfolio design
and management. Over the period the number of holdings in the fund have been
deliberately reduced, while still maintaining focus on diversification across
sectors and quality stock selection criteria. Our goal is to maintain a
portfolio that is well diversified, but sufficiently concentrated so good ideas
will make a difference. Additionally, we believe the reduction in holdings has
helped to avoid companies we believe will not contribute healthy returns to the
fund.
Our fund strategy includes stock selection focused on consistency in delivering
growth with strong stock price performance over time. Our purchase of Johnson
and Johnson (JNJ) stock is truly reflective of our investment selection criteria
at work, and contributed to positive fund performance during the period. The
company is a strong leader in the industry of healthcare manufacturers' products
serving the consumer, pharmaceutical and professional markets. We believe JNJ is
a quality large cap company, has a strong management team and will deliver
consistent growth, year over year, and we look forward to seeing what JNJ
management has in store for the upcoming year.
CITIZENS CORE GROWTH FUND
13
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 5 10 Since
Ticker Year Years Years inception
- ---------------------------------------------------------------------------------------------
STANDARD SHARES WAIDX 8.95% -8.59% 8.05% 8.73%
INSTITUTIONAL SHARES WINIX 9.74% -7.96% NA 7.97%
ADMINISTRATIVE SHARES CGADX 9.38% -8.22% NA -7.33%
</Table>
PERFORMANCE OVER TIME (as of 6.30.05)
This chart shows the performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over
time for the indexes shown.
(PERFORMANCE OVERTIME)
CITIZENS CORE GROWTH FUND - STANDARD SHARES
PERFORMANCE SINCE INCEPTION 03/03/95
DATE CITIZENS CORE GROWTH FUND RUSSELL 1000 GROWTH S&P 500
- ---- ------------------------- ------------------- -----------
3/3/95 $ 10,000.00 $ 10,000.00 $ 10,000.00
03/31/1995 $ 10,100.00 $ 10,292.00 $ 10,340.00
04/30/1995 $ 10,400.00 $ 10,517.39 $ 10,644.00
05/31/1995 $ 10,530.00 $ 10,883.40 $ 11,069.76
06/30/1995 $ 10,940.00 $ 11,303.50 $ 11,326.57
07/31/1995 $ 11,360.00 $ 11,773.72 $ 11,702.62
08/31/1995 $ 11,450.00 $ 11,786.68 $ 11,731.87
09/30/1995 $ 11,860.00 $ 12,330.04 $ 12,226.96
10/31/1995 $ 11,970.00 $ 12,338.67 $ 12,182.94
11/30/1995 $ 12,330.00 $ 12,818.65 $ 12,717.77
12/31/1995 $ 12,405.00 $ 12,891.71 $ 12,963.23
01/31/1996 $ 12,646.60 $ 13,322.30 $ 13,403.97
02/26/1996 $ 12,878.20 $ 13,566.09 $ 13,528.63
03/31/1996 $ 12,858.10 $ 13,583.73 $ 13,658.51
04/30/1996 $ 13,200.40 $ 13,940.98 $ 13,859.29
05/31/1996 $ 13,593.10 $ 14,427.52 $ 14,216.86
06/30/1996 $ 13,502.50 $ 14,447.72 $ 14,270.88
07/31/1996 $ 12,908.40 $ 13,601.09 $ 13,640.11
08/30/1996 $ 13,230.60 $ 13,951.99 $ 13,927.91
09/30/1996 $ 14,076.40 $ 14,967.70 $ 14,712.06
10/31/1996 $ 14,428.80 $ 15,057.50 $ 15,118.11
11/30/1996 $ 15,627.10 $ 16,188.32 $ 16,261.04
12/31/1996 $ 15,266.30 $ 15,871.03 $ 15,939.07
01/31/1997 $ 16,415.60 $ 16,983.59 $ 16,935.26
2/28/97 $ 16,517.30 $ 16,868.10 $ 17,067.36
03/31/1997 $ 15,551.10 $ 15,955.54 $ 16,365.89
04/30/1997 $ 16,669.90 $ 17,014.99 $ 17,342.93
05/31/1997 $ 17,697.10 $ 18,243.47 $ 18,399.11
06/30/1997 $ 18,348.00 $ 18,973.21 $ 19,223.40
07/31/1997 $ 20,188.90 $ 20,650.44 $ 20,753.58
08/29/1997 $ 19,110.80 $ 19,442.39 $ 19,591.38
09/30/1997 $ 20,158.40 $ 20,398.95 $ 20,664.98
10/31/1997 $ 19,354.90 $ 19,644.19 $ 19,974.77
11/29/1997 $ 20,402.50 $ 20,479.07 $ 20,899.61
12/31/1997 $ 20,603.90 $ 20,708.44 $ 21,259.08
01/31/1998 $ 21,201.70 $ 21,327.62 $ 21,495.05
02/28/1998 $ 22,867.10 $ 22,931.45 $ 23,044.85
03/31/1998 $ 23,977.30 $ 23,846.42 $ 24,224.74
04/30/1998 $ 24,222.90 $ 24,175.50 $ 24,469.41
05/31/1998 $ 23,529.00 $ 23,488.92 $ 24,048.54
06/30/1998 $ 25,044.90 $ 24,926.44 $ 25,024.91
07/31/1998 $ 24,938.10 $ 24,761.92 $ 24,759.65
08/31/1998 $ 21,212.40 $ 21,045.16 $ 21,179.40
09/30/1998 $ 23,069.90 $ 22,661.43 $ 22,537.00
10/31/1998 $ 24,767.30 $ 24,483.41 $ 24,369.26
11/30/1998 $ 26,635.60 $ 26,346.59 $ 25,846.04
12/31/1998 $ 29,412.00 $ 28,723.06 $ 27,334.77
01/31/1999 $ 31,679.40 $ 30,409.10 $ 28,477.36
02/28/1999 $ 29,757.50 $ 29,019.40 $ 27,591.72
03/31/1999 $ 31,042.40 $ 30,548.73 $ 28,695.39
04/30/1999 $ 31,873.70 $ 30,588.44 $ 29,805.90
05/31/1999 $ 31,020.80 $ 29,649.37 $ 29,102.48
06/30/1999 $ 32,953.50 $ 31,724.83 $ 30,717.67
07/31/1999 $ 32,251.70 $ 30,715.98 $ 29,759.27
08/31/1999 $ 31,981.70 $ 31,216.65 $ 29,613.45
09/30/1999 $ 31,204.30 $ 30,561.10 $ 28,802.04
10/31/1999 $ 33,223.40 $ 32,868.46 $ 30,625.21
11/30/1999 $ 34,637.90 $ 34,643.36 $ 31,246.91
12/31/1999 $ 37,497.40 $ 38,246.27 $ 33,087.35
01/31/2000 $ 35,181.60 $ 36,452.52 $ 31,426.36
02/29/2000 $ 36,060.00 $ 38,235.05 $ 30,832.41
03/31/2000 $ 39,539.40 $ 40,972.68 $ 33,847.81
04/30/2000 $ 37,109.60 $ 39,022.38 $ 32,829.00
05/31/2000 $ 35,170.20 $ 37,055.65 $ 32,156.00
06/30/2000 $ 37,178.00 $ 39,864.47 $ 32,950.25
07/31/2000 $ 36,151.30 $ 38,202.12 $ 32,436.23
08/31/2000 $ 38,227.50 $ 41,659.41 $ 34,450.52
09/30/2000 $ 35,215.90 $ 37,718.43 $ 32,631.53
10/31/2000 $ 35,489.60 $ 35,934.35 $ 32,494.48
11/30/2000 $ 30,698.40 $ 30,637.63 $ 29,933.92
12/31/2000 $ 29,715.00 $ 29,669.48 $ 30,080.59
01/31/2001 $ 32,157.20 $ 31,719.64 $ 31,148.45
02/28/2001 $ 27,056.30 $ 26,333.64 $ 28,307.71
03/31/2001 $ 24,710.40 $ 23,468.54 $ 26,513.00
04/30/2001 $ 27,032.30 $ 26,437.32 $ 28,573.07
05/31/2001 $ 27,080.40 $ 26,048.69 $ 28,764.50
06/30/2001 $ 26,611.20 $ 25,444.36 $ 28,065.53
07/31/2001 $ 26,310.40 $ 24,808.25 $ 27,790.49
08/31/2001 $ 24,277.30 $ 22,778.93 $ 26,050.80
09/30/2001 $ 21,811.10 $ 20,505.60 $ 23,945.90
10/31/2001 $ 22,304.30 $ 21,582.14 $ 24,403.26
11/30/2001 $ 24,385.60 $ 23,656.18 $ 26,274.99
12/31/2001 $ 24,301.40 $ 23,611.24 $ 26,506.21
01/31/2002 $ 23,904.40 $ 23,193.32 $ 26,119.22
02/28/2002 $ 23,002.10 $ 22,230.79 $ 25,615.12
03/31/2002 $ 23,880.30 $ 22,999.98 $ 26,578.25
04/30/2002 $ 22,448.70 $ 21,123.18 $ 24,967.61
05/31/2002 $ 22,039.70 $ 20,612.00 $ 24,782.85
06/30/2002 $ 20,126.80 $ 18,705.39 $ 23,018.31
07/31/2002 $ 18,635.10 $ 17,676.59 $ 21,225.18
08/31/2002 $ 18,562.90 $ 17,729.62 $ 21,365.27
09/30/2002 $ 16,914.70 $ 15,891.06 $ 19,042.86
10/31/2002 $ 18,466.60 $ 17,348.27 $ 20,718.64
11/30/2002 $ 19,296.70 $ 18,290.28 $ 21,938.96
12/31/2002 $ 18,045.60 $ 17,026.43 $ 20,651.15
01/31/2003 $ 17,516.20 $ 16,612.68 $ 20,110.09
02/28/2003 $ 17,323.70 $ 16,536.26 $ 19,808.44
03/31/2003 $ 17,480.10 $ 16,843.84 $ 20,000.58
04/30/2003 $ 18,562.90 $ 18,088.60 $ 21,648.62
05/31/2003 $ 19,597.50 $ 18,991.22 $ 22,789.51
06/30/2003 $ 19,777.90 $ 19,253.30 $ 23,081.21
07/31/2003 $ 20,283.20 $ 19,732.71 $ 23,487.44
08/31/2003 $ 20,908.80 $ 20,224.05 $ 23,945.45
09/30/2003 $ 20,391.50 $ 20,007.65 $ 23,691.63
10/31/2003 $ 21,642.70 $ 21,132.08 $ 25,032.57
11/30/2003 $ 21,823.10 $ 21,353.97 $ 25,252.86
12/31/2003 $ 22,220.10 $ 22,092.82 $ 26,576.11
01/31/2004 $ 22,352.40 $ 22,543.51 $ 27,065.11
02/29/2004 $ 22,280.30 $ 22,687.79 $ 27,441.31
03/31/2004 $ 22,015.60 $ 22,265.80 $ 27,026.95
04/30/2004 $ 21,402.00 $ 22,007.51 $ 26,602.63
05/31/2004 $ 21,726.90 $ 22,416.85 $ 26,967.08
06/30/2004 $ 21,775.00 $ 22,697.06 $ 27,490.24
07/31/2004 $ 20,896.80 $ 21,414.11 $ 26,580.32
08/31/2004 $ 20,644.10 $ 21,308.50 $ 26,687.44
09/30/2004 $ 21,317.80 $ 21,511.32 $ 26,976.46
10/31/2004 $ 21,714.80 $ 21,846.76 $ 27,388.66
11/30/2004 $ 22,689.30 $ 22,598.05 $ 28,496.81
12/31/2004 $ 23,363.00 $ 23,483.76 $ 29,466.55
01/31/2005 $ 22,857.70 $ 22,700.66 $ 28,748.30
02/28/2005 $ 23,206.60 $ 22,942.49 $ 29,353.17
03/31/2005 $ 22,978.00 $ 22,524.24 $ 28,833.32
04/30/2005 $ 22,376.50 $ 22,095.79 $ 28,285.49
05/31/2005 $ 23,314.90 $ 23,164.52 $ 29,185.54
06/30/2005 $ 23,723.90 $ 23,079.31 $ 29,226.98
Data presented reflects past performance of the fund, which is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Performance data current to the most recent month end may be
obtained online at www.citizensfunds.com. Fee waivers have been instituted in
the past to maintain expense limits, without which returns would have been
lower. Investment return and principal value of an investment in the fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original costs. Performance figures and the growth of a $10,000
hypothetical investment assume reinvestment of dividends and distributions but
do not reflect the deduction of taxes you would pay on fund distributions or
redemptions of fund shares.
- --------------------------------------------------------------------------------
The strongest performing sectors within the portfolio were utilities, with a
return of 50.5% and energy, with a return of 42.9%. Neither sector is a
traditional growth venue, but we believe the potential supply/demand imbalances
that developed as the year progressed appeared to offer sustainable earnings
growth for a more extended period than in the past. Questar, a natural gas
producer and utility, and ConocoPhillips, the integrated oil giant, did
particularly well for the period in which we held them. The financial and
consumer discretionary sectors were also strong, each returning 19% for the
period. However, one of the strongest performers in the portfolio was not in any
of those sectors. It was
CITIZENS CORE GROWTH FUND
14
UnitedHealth Group, a provider of healthcare coverage and related services, with
a double-digit price increase for the period.
The fund was underweight in the information technology sector relative to the
benchmark Russell 1000 Growth Index for the period. This decision was validated
as the information technology sector came in as one of the bottom performers
within the index for the period. The performance of the fund suffered from the
decline in stock price from such bellwether stocks as Intel and Cisco. Both
stock prices declined amidst the unfavorable technology environment during the
year, and we exited the positions.
Avoiding losing stocks is just as much a part of our strategy as picking winning
stocks. Choosing not to hold a specific stock can also contribute to positive
performance. While we are mindful of the sector weightings and specific stocks
within the benchmark index, we do not mirror the index. We research each stock
and each industry diligently. Each stock must pass our stock selection criteria
before even being considered for investment. We believe one of the most reliable
ways to preserve gains is by avoiding large losses.
OUTLOOK
For the next year we think the stock market will focus on how best to cope with
an economy faced with possible slowing growth and increasing international
imbalances. We believe valuation parameters now tilt in favor of the bigger
companies, and the market may favor the lower risk profile typical of the larger
stocks. If earnings growth declines as the economy slows, we believe investors
will move toward stocks that can show more stable growth patterns. In our view
this will lead to a market with modest, but positive returns, and one where
growth and value stocks are once again competitive with each other.
CITIZENS CORE GROWTH FUND
15
CITIZENS EMERGING GROWTH FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
Aggressive growth
INVESTMENT STRATEGY
Invests mainly in stocks of young, growing, medium-capitalization companies
INCEPTION DATES
Standard shares: 2.08.94
Institutional shares: 11.01.99
Administrative shares: 2.04.00
RISKS
Growth investing; small- and medium-sized company risks (See pages 8-10 for
important fund risk and benchmark disclosures.)
ULTIMATELY, WHAT MATTERS IS NOT THE PERFORMANCE OF ANY INDIVIDUAL STOCK OR
GROUP, BUT THE PERFORMANCE OF THE ENTIRE PORTFOLIO. TO THAT END, WE WILL
CONTINUE TO FOCUS ON BUILDING A PORTFOLIO COMPRISED OF WHAT WE BELIEVE ARE HIGH
QUALITY COMPANIES WHOSE STOCKS ARE SHOWING GOOD RELATIVE PERFORMANCE.
HOW DID WE DO?
The fund's standard shares returned 8.38% for the fiscal year ended June 30,
2005 while the Russell Midcap Growth Index returned 10.86% for the same period.
The principal behind our mid cap growth strategy is that well managed companies
have the potential to continue and compound their growth. We look for companies
with growing earnings, sales, and margins, as well as favorable returns on
assets and strong balance sheets.
Apple Computer was the best performing stock in the fund for the year and is a
good example of our stock selection criteria at work. The price of Apple
Computer shares increased significantly during the period in which we held it,
fueled by the explosive growth of its iPod music player and the release of a new
operating system for its Macintosh line of computers. Despite continually rising
expectations, Apple has been able to consistently produce positive surprises.
Although we still like the stock, we have trimmed our position in Apple
repeatedly over the recent past as part of our upside sell discipline.
In evaluating the investing climate, we expected that the rapid increase in oil
prices would have a disparate impact on the consumer sector. We believed
consumer companies that catered to the luxury or near-luxury segments of the
market as well as those catering to teens would be less vulnerable to any
oil-induced slowdown. That thesis was borne out over the past year and the fund
CITIZENS EMERGING GROWTH FUND
16
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 5 10 Since
Ticker Year Years Years inception
- ---------------------------------------------------------------------------------------------
STANDARD SHARES WAEGX 8.38% -11.01% 10.55% 11.16%
INSTITUTIONAL SHARES CEGIX 9.02% -10.47% NA -2.01%
ADMINISTRATIVE SHARES CGRDX 8.70% -10.74% NA -7.34%
</Table>
PERFORMANCE OVER TIME (as of 6.30.05)
This chart shows the performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over
time for the index shown.
(PERFORMANCE OVERTIME)
CITIZENS EMERGING GROWTH FUND - STANDARD SHARES
PERFORMANCE SINCE INCEPTION 02/08/94
DATE CITIZENS EMERGING GROWTH FUND RUSSELL MID CAP GROWTH RETURN
- ---- ----------------------------- -----------------------------
2/8/94 $ 10,000.00 $ 10,000.00
02/28/1994 $ 10,060.00 $ 9,920.00
03/31/1994 $ 9,880.00 $ 9,452.77
04/30/1994 $ 10,010.00 $ 9,430.08
05/31/1994 $ 10,070.00 $ 9,444.23
06/30/1994 $ 9,930.00 $ 9,038.12
07/31/1994 $ 10,140.00 $ 9,288.48
08/31/1994 $ 10,550.00 $ 9,842.07
09/30/1994 $ 10,730.00 $ 9,679.68
10/31/1994 $ 10,910.00 $ 9,847.14
11/30/1994 $ 10,550.00 $ 9,412.88
12/31/1994 $ 10,711.80 $ 9,544.66
01/31/1995 $ 10,711.80 $ 9,659.20
02/28/1995 $ 11,000.50 $ 10,173.07
03/31/1995 $ 11,330.40 $ 10,576.94
04/30/1995 $ 11,381.90 $ 10,665.78
05/31/1995 $ 11,299.40 $ 10,928.16
06/30/1995 $ 12,237.60 $ 11,425.39
07/31/1995 $ 13,248.00 $ 12,144.05
08/31/1995 $ 13,289.20 $ 12,276.42
09/30/1995 $ 13,969.70 $ 12,550.18
10/31/1995 $ 14,196.50 $ 12,232.66
11/30/1995 $ 14,567.60 $ 12,779.46
12/31/1995 $ 15,074.60 $ 12,787.13
01/31/1996 $ 14,969.10 $ 13,013.46
02/26/1996 $ 15,520.00 $ 13,505.37
03/31/1996 $ 15,742.70 $ 13,612.06
04/30/1996 $ 16,938.40 $ 14,269.53
05/31/1996 $ 17,899.60 $ 14,560.63
06/30/1996 $ 17,430.70 $ 14,120.89
07/31/1996 $ 16,750.80 $ 13,025.11
08/30/1996 $ 17,301.80 $ 13,728.47
09/30/1996 $ 18,368.50 $ 14,600.23
10/31/1996 $ 17,524.50 $ 14,429.40
11/30/1996 $ 17,536.20 $ 15,279.30
12/31/1996 $ 17,172.00 $ 15,022.60
01/31/1997 $ 18,031.30 $ 15,686.60
2/28/97 $ 16,877.10 $ 15,341.50
03/31/1997 $ 15,453.50 $ 14,474.70
04/30/1997 $ 15,953.70 $ 14,829.33
05/31/1997 $ 17,415.70 $ 16,158.04
06/30/1997 $ 18,133.90 $ 16,605.62
07/31/1997 $ 20,262.70 $ 18,194.78
08/29/1997 $ 19,839.50 $ 18,016.47
09/30/1997 $ 20,980.90 $ 18,928.10
10/31/1997 $ 19,608.70 $ 17,979.80
11/29/1997 $ 19,467.60 $ 18,168.59
12/31/1997 $ 20,209.00 $ 18,406.60
01/31/1998 $ 20,057.70 $ 18,075.28
02/28/1998 $ 22,133.60 $ 19,774.36
03/31/1998 $ 24,140.80 $ 20,602.90
04/30/1998 $ 23,852.10 $ 20,883.10
05/31/1998 $ 22,669.80 $ 20,024.81
06/30/1998 $ 24,127.00 $ 20,591.51
07/31/1998 $ 23,783.30 $ 19,710.19
08/31/1998 $ 19,191.60 $ 15,947.52
09/30/1998 $ 21,212.50 $ 17,153.15
10/31/1998 $ 23,164.70 $ 18,415.62
11/30/1998 $ 25,061.90 $ 19,658.68
12/31/1998 $ 28,839.60 $ 21,695.32
01/31/1999 $ 29,367.50 $ 22,346.17
02/28/1999 $ 27,044.70 $ 21,253.45
03/31/1999 $ 28,447.50 $ 22,437.26
04/30/1999 $ 29,141.30 $ 23,460.40
05/31/1999 $ 28,975.40 $ 23,157.76
06/30/1999 $ 32,836.80 $ 24,774.18
07/31/1999 $ 33,198.80 $ 23,986.36
08/31/1999 $ 33,636.20 $ 23,736.90
09/30/1999 $ 34,028.30 $ 23,535.14
10/31/1999 $ 38,855.10 $ 25,354.40
11/30/1999 $ 42,309.20 $ 27,981.12
12/31/1999 $ 48,475.20 $ 32,824.65
01/31/2000 $ 46,724.80 $ 32,818.08
02/29/2000 $ 58,566.80 $ 39,716.44
03/31/2000 $ 59,656.30 $ 39,756.16
04/30/2000 $ 59,495.60 $ 35,895.84
05/31/2000 $ 53,547.80 $ 33,279.03
06/30/2000 $ 59,781.40 $ 36,809.94
07/31/2000 $ 56,512.80 $ 34,479.87
08/31/2000 $ 62,103.30 $ 39,679.43
09/30/2000 $ 59,942.10 $ 37,739.11
10/31/2000 $ 57,888.10 $ 35,157.75
11/30/2000 $ 46,885.60 $ 27,517.97
12/31/2000 $ 48,163.60 $ 28,968.17
01/31/2001 $ 46,957.10 $ 30,622.25
02/28/2001 $ 40,853.90 $ 25,324.60
03/31/2001 $ 36,406.50 $ 21,700.65
04/30/2001 $ 39,339.90 $ 25,318.15
05/31/2001 $ 38,464.60 $ 25,199.16
06/30/2001 $ 37,352.80 $ 25,211.75
07/31/2001 $ 35,010.80 $ 23,509.96
08/31/2001 $ 32,881.80 $ 21,805.49
09/30/2001 $ 26,967.80 $ 18,201.04
10/31/2001 $ 28,883.90 $ 20,113.97
11/30/2001 $ 31,651.70 $ 22,280.25
12/31/2001 $ 32,290.40 $ 23,126.90
01/31/2002 $ 32,314.10 $ 22,375.27
02/28/2002 $ 30,658.10 $ 21,106.59
03/31/2002 $ 33,402.20 $ 22,717.03
04/30/2002 $ 31,675.30 $ 21,515.30
05/31/2002 $ 30,539.90 $ 20,874.14
06/30/2002 $ 27,961.40 $ 18,569.64
07/31/2002 $ 25,903.30 $ 16,764.67
08/31/2002 $ 25,170.00 $ 16,705.99
09/30/2002 $ 23,395.80 $ 15,377.86
10/31/2002 $ 24,010.80 $ 16,569.65
11/30/2002 $ 24,980.70 $ 17,867.05
12/31/2002 $ 23,017.30 $ 16,787.88
01/31/2003 $ 22,473.20 $ 16,623.36
02/28/2003 $ 22,567.80 $ 16,478.74
03/31/2003 $ 22,378.60 $ 16,785.24
04/30/2003 $ 23,821.60 $ 17,928.32
05/31/2003 $ 25,501.10 $ 19,653.02
06/30/2003 $ 25,926.90 $ 19,934.06
07/31/2003 $ 26,707.60 $ 20,645.71
08/31/2003 $ 28,671.00 $ 21,783.28
09/30/2003 $ 27,582.90 $ 21,360.69
10/31/2003 $ 29,499.00 $ 23,082.36
11/30/2003 $ 29,972.10 $ 23,700.97
12/31/2003 $ 30,279.60 $ 23,959.31
01/31/2004 $ 30,989.30 $ 24,749.96
02/29/2004 $ 31,107.60 $ 25,165.76
03/31/2004 $ 30,894.70 $ 25,117.95
04/30/2004 $ 29,830.20 $ 24,409.62
05/31/2004 $ 30,516.20 $ 24,985.69
06/30/2004 $ 30,776.40 $ 25,382.96
07/31/2004 $ 28,789.30 $ 23,701.88
08/31/2004 $ 28,363.50 $ 23,409.66
09/30/2004 $ 29,522.70 $ 24,283.74
10/31/2004 $ 30,587.20 $ 25,107.51
11/30/2004 $ 31,746.30 $ 26,404.12
12/31/2004 $ 32,787.20 $ 27,669.13
01/31/2005 $ 31,462.40 $ 26,928.58
02/28/2005 $ 32,645.20 $ 27,610.43
03/31/2005 $ 32,385.00 $ 27,206.93
04/30/2005 $ 30,918.40 $ 26,130.29
05/31/2005 $ 32,976.40 $ 27,626.88
06/30/2005 $ 33,354.90 $ 28,140.68
Data presented reflects past performance of the fund, which is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Performance data current to the most recent month end may be
obtained online at www.citizensfunds.com. Fee waivers have been instituted in
the past to maintain expense limits, without which returns would have been
lower. Investment return and principal value of an investment in the fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original costs. Performance figures and the growth of a $10,000
hypothetical investment assume reinvestment of dividends and distributions but
do not reflect the deduction of taxes you would pay on fund distributions or
redemptions of fund shares.
- --------------------------------------------------------------------------------
got excellent performance from stocks such as Nordstroms, American Eagle, Coach,
Starbucks and Whole Foods Markets.
Despite a good deal of stock picking success, the fund underperformed the
benchmark Russell Midcap Growth Index for the fiscal year. Most of the
underperformance occurred in the first half of the fiscal year. One area that
hurt performance was the fund's holdings in the for-profit education sector.
That sector had been very strong for several years, but a series of allegations
of improprieties and government investigations took their toll on the group in
the first six months of the fiscal year and the fund suffered from significant
declines in stock prices of Apollo Group, Career Education and Corinthian
Colleges. None of those positions remain in the fund at this time.
CITIZENS EMERGING GROWTH FUND
17
During the second half of the fiscal year, the fund closely matched the return
of the benchmark Russell MidCap Growth Index, with the standard shares returning
1.73% compared to the Index return of 1.70%. Ultimately, what matters is not the
performance of any individual stock or group, but the performance of the entire
portfolio. To that end, we will continue to focus on building a portfolio
comprised of what we believe are high quality companies whose stocks are showing
good relative performance.
OUTLOOK
Although there is disagreement about the exact levels of economic and earnings
growth over the coming year, there is fairly widespread agreement that growth
rates will slow. The combined impact of higher oil prices, Federal Reserve
tightening, lower money supply growth and increased foreign competition should
keep overall growth rates muted. In that environment, we are redoubling our
efforts to find what we believe are companies that can still produce strong
organic sales and earnings growth.
CITIZENS EMERGING GROWTH FUND
18
CITIZENS SMALL CAP CORE GROWTH FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
Capital appreciation
INVESTMENT STRATEGY
Invests mainly in stocks of small-capitalization U.S. companies
INCEPTION DATE
Standard shares: 12.28.99
RISKS
Growth risks; small-sized company risks (See pages 8-10 for important fund risk
and benchmark disclosure.)
WE LOOK FOR PROFITS AND PROVEN GROWTH, NOT LOFTY PROMISES. WE LISTEN TO THE
MARKET AND BELIEVE THAT A SUCCESSFUL COMPANY'S WORTH SHOULD BE REFLECTED IN A
RISING STOCK PRICE.
HOW DID WE DO?
For the fiscal year ended June 30, 2005 the fund returned 6.21%, comfortably
ahead of the benchmark Russell 2000 Growth Index which returned 4.29%. The
outperformance of the fund relative to the benchmark can be attributed to
portfolio construction and favorable stock selection.
The portfolio construction targets specific portfolio characteristics versus the
benchmark Russell 2000 Growth Index. This includes identifying companies with
comparable valuation metrics, superior growth and superior profitability. We
maintain the desired portfolio characteristics by monitoring key factors such as
profitability, earnings surprises and quality. Our monitoring system helps
identify individual company circumstances and percentages of the portfolio
exposed to specific issues. In addition, our downside sell disciplines include
alerts to material adverse events and reduced earnings expectations. We believe
these types of investment disciplines and systems help the fund preserve gains
while potentially avoiding large losses.
While being mindful of the sector weightings of the benchmark, our strategy is
to select each stock based on it's own merits, and not focus only on sector or
benchmark membership. We look for profits and proven growth, not lofty promises.
We listen to the market and believe that a successful company's worth should be
reflected in a rising stock price. This strategy was evident in the fund, and
contributed to positive performance for the fiscal year.
CITIZENS SMALL CAP CORE GROWTH FUND
19
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 3 5 Since
Ticker Year Years Years inception
- ---------------------------------------------------------------------------------------------
STANDARD SHARES CSCSX 6.21% 7.84% 0.54% 2.63%
</Table>
PERFORMANCE OVER TIME (as of 6.30.05)
This chart shows the performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over
time for the index shown.
(PERFORMANCE OVERTIME)
CITIZENS SMALL CAP CORE GROWTH FUND
PERFORMANCE SINCE INCEPTION 12/28/99
DATE CITIZENS SMALL CAP CORE GROWTH FUND RUSSELL 2000 GROWTH RETURN
- -------- ----------------------------------- --------------------------
12/28/99 $ 10,000.00 $ 10,000.00
12/31/1999 $ 10,000.00 $ 10,522.00
01/31/2000 $ 9,710.00 $ 10,424.15
02/29/2000 $ 10,500.00 $ 12,849.84
03/31/2000 $ 10,800.00 $ 11,499.33
04/30/2000 $ 10,440.00 $ 10,337.89
05/31/2000 $ 10,190.00 $ 9,432.29
06/30/2000 $ 11,230.00 $ 10,650.95
07/31/2000 $ 10,770.00 $ 9,738.16
08/31/2000 $ 11,620.00 $ 10,762.61
09/30/2000 $ 10,760.00 $ 10,227.71
10/31/2000 $ 10,480.00 $ 9,397.22
11/30/2000 $ 8,940.00 $ 7,690.69
12/31/2000 $ 9,386.60 $ 8,161.36
01/31/2001 $ 10,278.20 $ 8,821.61
02/28/2001 $ 9,066.00 $ 7,612.17
03/31/2001 $ 8,455.40 $ 6,920.22
04/30/2001 $ 9,086.60 $ 7,767.26
05/31/2001 $ 9,206.80 $ 7,947.46
06/30/2001 $ 9,537.40 $ 8,164.42
07/31/2001 $ 9,226.80 $ 7,468.00
08/31/2001 $ 9,046.50 $ 7,001.99
09/30/2001 $ 8,024.60 $ 5,871.87
10/31/2001 $ 8,635.80 $ 6,436.75
11/30/2001 $ 9,537.40 $ 6,974.22
12/31/2001 $ 10,208.60 $ 7,408.71
01/31/2002 $ 10,298.80 $ 7,144.96
02/28/2002 $ 9,938.10 $ 6,682.68
03/31/2002 $ 10,298.80 $ 7,263.40
04/30/2002 $ 10,238.70 $ 7,106.52
05/31/2002 $ 9,597.50 $ 6,690.78
06/30/2002 $ 9,196.80 $ 6,123.41
07/31/2002 $ 7,944.50 $ 5,182.24
08/31/2002 $ 7,884.40 $ 5,179.65
09/30/2002 $ 7,493.70 $ 4,805.68
10/31/2002 $ 7,734.10 $ 5,048.84
11/30/2002 $ 8,405.30 $ 5,549.18
12/31/2002 $ 7,613.90 $ 5,166.29
01/31/2003 $ 7,383.50 $ 5,025.77
02/28/2003 $ 7,343.40 $ 4,891.58
03/31/2003 $ 7,383.50 $ 4,965.44
04/30/2003 $ 7,884.40 $ 5,435.17
05/31/2003 $ 8,525.60 $ 6,047.72
06/30/2003 $ 8,685.80 $ 6,164.44
07/31/2003 $ 9,246.90 $ 6,630.47
08/31/2003 $ 9,978.20 $ 6,986.53
09/30/2003 $ 9,347.00 $ 6,809.77
10/31/2003 $ 10,358.90 $ 7,398.13
11/30/2003 $ 10,539.20 $ 7,639.31
12/31/2003 $ 10,599.30 $ 7,673.69
01/31/2004 $ 11,270.60 $ 8,076.56
02/29/2004 $ 11,230.50 $ 8,064.44
03/31/2004 $ 11,140.30 $ 8,102.34
04/30/2004 $ 10,409.00 $ 7,695.61
05/31/2004 $ 10,549.20 $ 7,848.75
06/30/2004 $ 10,859.80 $ 8,110.11
07/31/2004 $ 9,858.00 $ 7,382.13
08/31/2004 $ 9,687.70 $ 7,223.22
09/30/2004 $ 10,248.70 $ 7,622.62
10/31/2004 $ 10,519.20 $ 7,807.85
11/30/2004 $ 11,020.10 $ 8,467.79
12/31/2004 $ 11,313.60 $ 8,772.14
01/31/2005 $ 11,082.90 $ 8,376.97
02/28/2005 $ 11,303.10 $ 8,491.95
03/31/2005 $ 11,061.90 $ 8,173.41
04/30/2005 $ 10,621.60 $ 7,653.24
05/31/2005 $ 11,376.50 $ 8,192.82
06/30/2005 $ 11,533.80 $ 8,457.70
Data presented reflects past performance of the fund, which is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Performance data current to the most recent month end may be
obtained online at www.citizensfunds.com. Fee waivers have been instituted in
the past to maintain expense limits, without which returns would have been
lower. Investment return and principal value of an investment in the fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original costs. Performance figures and the growth of a $10,000
hypothetical investment assume reinvestment of dividends and distributions but
do not reflect the deduction of taxes you would pay on fund distributions or
redemptions of fund shares.
- --------------------------------------------------------------------------------
For the period, holdings within the consumer discretionary and industrial
sectors of the fund contributed positively to performance, outpacing the same
sectors in the benchmark for the same period. While the performance of the
holdings within the information technology sector finished toward the bottom
relative to all of the other fund sectors, the largest contributor to positive
performance for the fund during the period was in the information technology
sector -- Quality Systems. Quality Systems is a good example of our stock
selection criteria at work. Quality Systems develops and markets proprietary
healthcare information systems that automate medical and dental group practices,
and is a leader in its field. We believe Quality Systems is a high quality
company with sustainable competitive advantages and a proven consistent growth
pattern. In our view, the value of the company was continually reflected in the
rising stock price. Quality
CITIZENS SMALL CAP CORE GROWTH FUND
20
Systems stock price appreciated significantly by the end of the fiscal year,
having a positive impact on fund performance.
The worst performer in the fund for the one year period was a healthcare stock,
Able Laboratories. This generic drug maker ran into unforeseen difficulties with
the FDA, and the stock price fell. We exited the position shortly after the news
of the difficulties broke, but not before experiencing a loss for the fund.
OUTLOOK
In the coming year, we will continue to seek returns from small cap stocks in
attractive niche markets with the potential for above average growth. Our
investment disciplines, which we believe lead us to solid companies with
profitability potential, in our view, should also help us identify those
successful companies that will contribute positively to the fund.
CITIZENS SMALL CAP CORE GROWTH FUND
21
CITIZENS VALUE FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
Long-term capital appreciation
INVESTMENT STRATEGY
Invests mainly in stocks and other equities of U.S. large-capitalization
companies
INCEPTION DATE
Standard shares 6.13.96
RISK
Value risks (See pages 8-10 for important fund risk and benchmark disclosure.)
OUR OUTLOOK IS POSITIVE. WE FEEL THAT THE STOCK MARKET IS REASONABLY VALUED AND
THAT INFLATIONARY FORCES ARE UNDER CONTROL.
HOW DID WE DO?
Citizens Value Fund had a strong year delivering 10.37% in total return for the
fiscal year ended June 30, 2005. This handily beat the benchmark S&P 500 Index's
return of 6.32% for the same period. The two sectors contributing most
positively to fund performance were the energy and financial sectors. The fund
also benefited from our stock selection in the healthcare sector during the
period, including strong gains in our holdings of WellPoint and UnitedHealth
Group. Our ownership of each stock represents a good illustration of the
Citizens Value Fund strategy at work.
We came to own WellPoint through its merger with our portfolio holding Anthem.
We liked Anthem because we believed it was a high quality HMO with excellent
geographic diversity and it was selling at a nice discount to industry peers. In
our view, it was just the type of quality value stock we like to find and hold,
potentially, for a long time. Investors began warming up to the stock shortly
after Anthem merged with WellPoint last year and it appeared that together the
two companies would be much stronger than they were alone. We continue to hold
WellPoint as we think it still represents a good value and the benefits of the
merger have only begun to be realized.
CITIZENS VALUE FUND
22
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 3 5 Since
Ticker Year Years Years inception
- ---------------------------------------------------------------------------------------------
STANDARD SHARES MYPVX 10.37% 9.90% 0.67% 7.88%
</Table>
PERFORMANCE OVER TIME (as of 6.30.05)
This chart shows the performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over
time for the index shown.
(PERFORMANCE OVERTIME)
CITIZENS VALUE FUND
PERFORMANCE SINCE INCEPTION 06/13/96
DATE CITIZENS VALUE FUND S&P 500 RETURN
- ---- ------------------- --------------
6/13/96 $ 10,000.00 $ 10,000.00
6/30/1996 $ 9,740.00 $ 10,038.00
7/31/1996 $ 9,220.00 $ 9,594.32
8/30/1996 $ 9,500.00 $ 9,796.76
9/30/1996 $ 9,910.00 $ 10,348.32
10/31/1996 $ 9,890.00 $ 10,633.93
11/30/1996 $ 10,880.00 $ 11,437.86
12/31/1996 $ 10,810.00 $ 11,211.39
1/31/1997 $ 11,330.00 $ 11,912.10
2/28/97 $ 11,660.00 $ 12,005.01
3/31/1997 $ 11,240.00 $ 11,511.61
4/30/1997 $ 11,380.00 $ 12,198.85
5/31/1997 $ 12,230.00 $ 12,941.76
6/30/1997 $ 12,350.00 $ 13,521.55
7/31/1997 $ 13,470.00 $ 14,597.87
8/29/1997 $ 13,210.00 $ 13,780.39
09/30/97 $ 13,580.00 $ 14,535.55
10/31/1997 $ 12,830.00 $ 14,050.06
11/29/1997 $ 12,900.00 $ 14,700.58
12/31/1997 $ 13,165.70 $ 14,953.43
1/31/1998 $ 13,472.40 $ 15,119.42
2/28/1998 $ 14,358.50 $ 16,209.52
3/31/1998 $ 14,778.80 $ 17,039.45
4/30/1998 $ 15,074.10 $ 17,211.55
5/31/1998 $ 14,744.70 $ 16,915.51
6/30/1998 $ 14,506.10 $ 17,602.28
7/31/1998 $ 14,063.10 $ 17,415.70
8/31/1998 $ 11,564.00 $ 14,897.39
9/30/1998 $ 12,302.40 $ 15,852.31
10/31/1998 $ 13,449.70 $ 17,141.10
11/30/1998 $ 14,562.90 $ 18,179.85
12/31/1998 $ 14,957.00 $ 19,227.01
1/31/1999 $ 14,714.40 $ 20,030.70
2/28/1999 $ 14,083.60 $ 19,407.75
3/31/1999 $ 14,944.90 $ 20,184.06
4/30/1999 $ 16,509.70 $ 20,965.18
5/31/1999 $ 17,019.20 $ 20,470.40
6/30/1999 $ 17,892.60 $ 21,606.51
7/31/1999 $ 17,819.80 $ 20,932.39
8/31/1999 $ 17,237.50 $ 20,829.82
9/30/1999 $ 16,606.80 $ 20,259.08
10/31/1999 $ 16,897.90 $ 21,541.48
11/30/1999 $ 18,648.20 $ 21,978.77
12/31/1999 $ 19,195.50 $ 23,273.32
1/31/2000 $ 18,728.30 $ 22,105.00
2/29/2000 $ 18,020.80 $ 21,687.22
3/31/2000 $ 19,422.50 $ 23,808.23
4/30/2000 $ 18,808.40 $ 23,091.60
5/31/2000 $ 19,462.50 $ 22,618.22
6/30/2000 $ 19,208.90 $ 23,176.89
7/31/2000 $ 18,875.20 $ 22,815.33
8/31/2000 $ 20,784.00 $ 24,232.16
9/30/2000 $ 19,929.70 $ 22,952.71
10/31/2000 $ 20,036.50 $ 22,856.31
11/30/2000 $ 18,515.40 $ 21,055.23
12/31/2000 $ 19,160.70 $ 21,158.40
1/31/2001 $ 22,617.90 $ 21,909.52
2/28/2001 $ 20,820.20 $ 19,911.37
3/31/2001 $ 20,174.80 $ 18,648.99
4/30/2001 $ 22,341.40 $ 20,098.02
5/31/2001 $ 23,493.80 $ 20,232.68
6/30/2001 $ 23,324.70 $ 19,741.02
7/31/2001 $ 22,848.40 $ 19,547.56
8/31/2001 $ 21,404.10 $ 18,323.88
9/30/2001 $ 19,283.60 $ 16,843.31
10/31/2001 $ 19,529.50 $ 17,165.02
11/30/2001 $ 21,818.90 $ 18,481.58
12/31/2001 $ 21,730.10 $ 18,644.22
1/31/2002 $ 20,771.20 $ 18,372.01
2/28/2002 $ 18,887.60 $ 18,017.43
3/31/2002 $ 19,949.30 $ 18,694.89
4/30/2002 $ 17,997.10 $ 17,561.98
5/31/2002 $ 17,483.40 $ 17,432.02
6/30/2002 $ 14,966.20 $ 16,190.86
7/31/2002 $ 13,082.60 $ 14,929.59
8/31/2002 $ 13,271.00 $ 15,028.12
9/30/2002 $ 11,336.00 $ 13,394.57
10/31/2002 $ 12,860.00 $ 14,573.29
11/30/2002 $ 14,178.50 $ 15,431.66
12/31/2002 $ 12,928.50 $ 14,525.82
1/31/2003 $ 12,740.10 $ 14,145.24
2/28/2003 $ 12,397.60 $ 13,933.06
3/31/2003 $ 12,500.40 $ 14,068.21
4/30/2003 $ 13,527.80 $ 15,227.43
5/31/2003 $ 14,743.60 $ 16,029.92
6/30/2003 $ 14,795.00 $ 16,235.10
7/31/2003 $ 15,120.30 $ 16,520.84
8/31/2003 $ 15,599.80 $ 16,843.00
9/30/2003 $ 15,308.70 $ 16,664.46
10/31/2003 $ 16,319.00 $ 17,607.67
11/30/2003 $ 16,610.10 $ 17,762.62
12/31/2003 $ 17,260.80 $ 18,693.38
1/31/2004 $ 17,500.50 $ 19,037.34
2/29/2004 $ 17,825.90 $ 19,301.96
3/31/2004 $ 17,791.70 $ 19,010.50
4/30/2004 $ 17,363.60 $ 18,712.03
5/31/2004 $ 17,603.30 $ 18,968.39
6/30/2004 $ 17,997.10 $ 19,336.37
7/31/2004 $ 17,209.40 $ 18,696.34
8/31/2004 $ 17,089.60 $ 18,771.69
9/30/2004 $ 17,603.30 $ 18,974.98
10/31/2004 $ 17,808.80 $ 19,264.92
11/30/2004 $ 18,647.80 $ 20,044.38
12/31/2004 $ 19,230.10 $ 20,726.49
1/31/2005 $ 18,767.70 $ 20,221.28
2/28/2005 $ 19,521.20 $ 20,646.74
3/31/2005 $ 19,264.30 $ 20,281.08
4/30/2005 $ 18,716.30 $ 19,895.74
5/31/2005 $ 19,555.40 $ 20,528.83
6/30/2005 $ 19,863.60 $ 20,557.98
Data presented reflects past performance of the fund, which is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Performance data current to the most recent month end may be
obtained online at www.citizensfunds.com. Fee waivers have been instituted in
the past to maintain expense limits, without which returns would have been
lower. Investment return and principal value of an investment in the fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original costs. Performance figures and the growth of a $10,000
hypothetical investment assume reinvestment of dividends and distributions but
do not reflect the deduction of taxes you would pay on fund distributions or
redemptions of fund shares. For the periods prior to September 24, 2001,
performance includes that of the fund's predecessor, the Meyers Pride Value
Fund.
- --------------------------------------------------------------------------------
The fund's strategy of seeking financially strong companies whose shares are
selling at a discount to their industry peers was well rewarded. In addition,
positive performance can be attributed to our strategy of seeking out "special
situations," opportunity where we believe the market over-reacted to news or a
specific event. Our gain from UnitedHealth Group (UNH) was the result of an
opportunistic buy and it is the type of "special situation" we look for to add
return to the portfolio. UNH is considered the true gold standard among HMOs and
it typically trades at a premium so usually we would never consider it for the
Citizens Value Fund. However, in the fall when Eliot Spitzer began investigating
certain companies within the insurance industry, other insurance related
companies were sold off in a Wall Street mini panic. We knew the UnitedHealth
Group story very well as it was a core holding in
CITIZENS VALUE FUND
23
the Citizens Core Growth Fund. At the temporarily beaten down price, it was
attractive for the Citizens Value Fund strategy and we established a position.
Over the next few months the stock price increased 20% and we sold it. One of
our current "special situations" holdings is Harley Davidson. The famous
motorcycle manufacturer's shares sold off sharply when the company announced a
reduction in production at the end of its model year and we established a
position. So far, Harley's stock has risen slightly more than a dollar a share
from where we bought it and we will continue to monitor the stock price and the
company's progress carefully.
Our holdings within the energy sector have also been significant positive
contributors for the Citizens Value Fund during the fiscal year. In 2003, we did
a considerable amount of environmental research in the energy sectors in order
to find the companies with the best environmental records, and started building
our stock positions in these companies at that time. We believed that we were
entering a new time when energy investing could be very profitable and we wanted
to find companies that would allow us to participate. This work continued to pay
off in the fiscal year as the stock price of companies such as ConocoPhillips,
Valero and Apache generated double-digit price appreciation during the period.
At fiscal year end, we continue to be overweight in energy versus the benchmark.
We started to see some benefit from our communications equipment holdings during
the last quarter of the fiscal year, but it is still a mixed area for the fund.
We believe that wireless technologies are in the early stages of a long period
of expansion and we have sought to participate through our holdings in the
handset and infrastructure companies such as Motorola and Lucent. The Motorola
story is beginning to get some traction among investors. We still hold Lucent at
a loss. In fact, Lucent was our top detractor from performance during the year.
We erred in buying Lucent stock at too high a price in the second quarter of the
fiscal year. In the third quarter of the fiscal year, during a market sell off,
the shares of Lucent were pummeled and although the stock rose sharply in the
last quarter of the period, they have yet to fully recover to the price we paid.
We continue to hold Lucent and will be monitoring the stock price and the
company's progress carefully.
OUTLOOK
Our outlook is positive. We feel that the stock market is reasonably valued and
that inflationary forces are under control. Although energy prices remain high
and are certainly holding down global growth, we believe our positioning in
companies that we view as high quality and reasonably valued, as well as
opportunistic purchases of special situations can continue to make progress in
the coming year.
CITIZENS VALUE FUND
24
CITIZENS GLOBAL EQUITY FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
Capital appreciation
INVESTMENT STRATEGY
Invests in promising companies throughout the world
INCEPTION DATE
Standard shares: 2.08.94
Institutional shares: 11.01.99
Administrative shares: 2.04.00
RISKS
Growth and foreign investing (See pages 8-10 for important fund risk and
benchmark disclosures).
THE MANAGEMENT TEAM BELIEVES THAT THE CORRECTION THAT WE HAVE SEEN IN THE EURO
SHOULD SUPPORT FURTHER GROWTH ABROAD AND THAT IT APPEARS LIKELY THAT THE UK WILL
CUT RATES.
HOW DID WE DO?
On August 27, 2005, McLean Budden Limited assumed management of the fund as the
new subadviser. At that time the fund had underperformed the benchmark for
approximately the first two months of the fiscal year. Although the
underperformance during this period detracted from overall fund performance for
the fiscal year, the underperformance for the following ten months contributed
to the fund lagging the benchmark for the full fiscal year period.
The fund's standard shares returned 4.48% for the fiscal year ended June 30,
2005, lagging the 10.05% return of the benchmark MSCI World Index for the same
period. Global financial markets performed well during the fiscal year.
Throughout the entire period, the utility and energy sectors of the benchmark
were the standout positive sectors. This was mostly due to high-energy prices
and falling bond yields. Sector selection and weighting relative to the
benchmark accounted for most of the shortfall of fund performance. Stocks in the
information technology sector of the fund were the weakest performers. Fund
performance also suffered from the absence of utility stocks as utility
companies benefited from renewed consolidation fervor in the U.S.
CITIZENS GLOBAL EQUITY FUND
25
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 5 10 Since
Ticker Year Years Years inception
- --------------------------------------------------------------------------------------------
STANDARD SHARES WAGEX 4.48% -10.50% 6.03% 5.96%
INSTITUTIONAL SHARES CGEIX 5.20% -9.96% NA -4.20%
ADMINISTRATIVE SHARES CEADX 4.88% -10.24% NA -11.30%
</Table>
PERFORMANCE OVER TIME (as of 6.30.05)
This chart shows the performance since inception of a $10,000 hypothetical
investment in the fund's standard shares, compared with the performance over
time for the index shown.
(PERFORMANCE OVERTIME)
CITIZENS GLOBAL EQUITY FUND - STANDARD SHARES
PERFORMANCE SINCE INCEPTION 02/08/94
DATE CITIZENS GLOBAL EQUITY FUND MSCI WORLD INDEX RETURN
- ---- --------------------------- -----------------------
2/8/94 $ 10,000.00 $ 10,000.00
2/28/1994 $ 10,000.00 $ 10,089.00
3/31/1994 $ 10,000.00 $ 9,652.15
4/30/1994 $ 10,000.00 $ 9,948.47
5/31/1994 $ 9,880.00 $ 9,971.35
6/30/1994 $ 9,800.00 $ 9,941.43
7/31/1994 $ 9,990.00 $ 10,128.33
8/31/1994 $ 10,070.00 $ 10,431.17
9/30/1994 $ 10,000.00 $ 10,154.74
10/31/1994 $ 10,170.00 $ 10,441.11
11/30/1994 $ 9,680.00 $ 9,985.88
12/31/1994 $ 9,731.40 $ 10,079.74
1/31/1995 $ 9,399.30 $ 9,925.52
2/28/1995 $ 9,640.80 $ 10,067.46
3/31/1995 $ 9,872.30 $ 10,550.70
4/30/1995 $ 10,154.10 $ 10,915.75
5/31/1995 $ 10,617.00 $ 11,006.35
6/30/1995 $ 10,757.90 $ 11,000.85
7/31/1995 $ 11,180.50 $ 11,548.69
8/31/1995 $ 10,778.00 $ 11,288.84
9/30/1995 $ 11,090.00 $ 11,615.09
10/31/1995 $ 10,939.00 $ 11,429.25
11/30/1995 $ 10,918.90 $ 11,823.56
12/31/1995 $ 11,068.60 $ 12,166.44
1/31/1996 $ 11,435.20 $ 12,384.22
2/26/1996 $ 11,384.30 $ 12,457.29
3/31/1996 $ 11,465.80 $ 12,661.59
4/30/1996 $ 11,964.70 $ 12,956.60
5/31/1996 $ 11,964.70 $ 12,965.67
6/30/1996 $ 12,107.30 $ 13,029.21
7/31/1996 $ 11,730.50 $ 12,566.67
8/30/1996 $ 11,924.00 $ 12,708.67
9/30/1996 $ 12,280.40 $ 13,203.04
10/31/1996 $ 12,249.80 $ 13,292.82
11/30/1996 $ 12,677.50 $ 14,034.56
12/31/1996 $ 12,524.80 $ 13,807.20
1/31/1997 $ 13,003.40 $ 13,971.51
2/28/97 $ 13,003.40 $ 14,129.38
3/31/1997 $ 12,881.20 $ 13,846.80
4/30/1997 $ 13,217.20 $ 14,296.82
5/31/1997 $ 14,164.20 $ 15,176.07
6/30/1997 $ 14,734.40 $ 15,930.32
7/31/1997 $ 15,569.40 $ 16,661.52
8/29/1997 $ 14,561.30 $ 15,543.53
09/30/97 $ 15,498.10 $ 16,385.99
10/31/1997 $ 14,428.90 $ 15,520.81
11/29/1997 $ 14,663.10 $ 15,792.43
12/31/1997 $ 15,018.30 $ 15,981.94
1/31/1998 $ 15,346.40 $ 16,424.64
2/28/1998 $ 16,436.60 $ 17,533.30
3/31/1998 $ 16,955.20 $ 18,271.45
4/30/1998 $ 17,293.80 $ 18,446.86
5/31/1998 $ 17,209.20 $ 18,212.58
6/30/1998 $ 17,939.40 $ 18,642.40
7/31/1998 $ 19,273.00 $ 18,608.84
8/31/1998 $ 16,394.20 $ 16,124.56
9/30/1998 $ 16,087.30 $ 16,406.74
10/31/1998 $ 17,071.60 $ 17,886.63
11/30/1998 $ 18,140.50 $ 18,947.31
12/31/1998 $ 19,862.50 $ 19,870.04
1/31/1999 $ 21,121.60 $ 20,303.21
2/28/1999 $ 20,611.40 $ 19,761.11
3/31/1999 $ 21,360.30 $ 20,581.20
4/30/1999 $ 21,316.90 $ 21,390.04
5/31/1999 $ 20,340.10 $ 20,605.03
6/30/1999 $ 21,946.50 $ 21,563.16
7/31/1999 $ 22,445.70 $ 21,496.31
8/31/1999 $ 22,934.20 $ 21,455.47
9/30/1999 $ 23,672.20 $ 21,245.21
10/31/1999 $ 25,430.50 $ 22,345.71
11/30/1999 $ 29,240.20 $ 22,971.39
12/31/1999 $ 34,578.50 $ 24,827.48
1/31/2000 $ 34,129.90 $ 23,402.38
2/29/2000 $ 40,208.90 $ 23,463.23
3/31/2000 $ 38,706.00 $ 25,082.19
4/30/2000 $ 35,195.40 $ 24,018.70
5/31/2000 $ 32,380.20 $ 23,408.63
6/30/2000 $ 33,647.60 $ 24,192.82
7/31/2000 $ 33,367.20 $ 23,508.16
8/31/2000 $ 35,049.60 $ 24,269.83
9/30/2000 $ 32,447.50 $ 22,976.24
10/31/2000 $ 30,910.90 $ 22,587.95
11/30/2000 $ 27,692.00 $ 21,214.60
12/31/2000 $ 27,881.40 $ 21,554.03
1/31/2001 $ 28,247.00 $ 21,970.02
2/28/2001 $ 24,432.80 $ 20,111.36
3/31/2001 $ 22,044.30 $ 18,786.02
4/30/2001 $ 23,835.70 $ 20,170.55
5/31/2001 $ 23,311.70 $ 19,908.33
6/30/2001 $ 22,312.40 $ 19,281.22
7/31/2001 $ 21,276.60 $ 19,022.85
8/31/2001 $ 20,167.70 $ 18,107.85
9/30/2001 $ 18,193.60 $ 16,510.74
10/31/2001 $ 18,522.60 $ 16,826.10
11/30/2001 $ 19,558.40 $ 17,818.84
12/31/2001 $ 19,789.90 $ 17,929.31
1/31/2002 $ 18,961.30 $ 17,384.26
2/28/2002 $ 18,522.60 $ 17,231.28
3/31/2002 $ 19,302.50 $ 17,989.46
4/30/2002 $ 18,632.30 $ 17,377.82
5/31/2002 $ 18,510.40 $ 17,407.36
6/30/2002 $ 17,328.40 $ 16,348.99
7/31/2002 $ 15,902.60 $ 14,969.14
8/31/2002 $ 15,878.30 $ 14,994.58
9/30/2002 $ 14,306.30 $ 13,343.68
10/31/2002 $ 15,756.40 $ 14,327.11
11/30/2002 $ 16,426.60 $ 15,097.91
12/31/2002 $ 15,549.20 $ 14,364.15
1/31/2003 $ 14,903.40 $ 13,926.04
2/28/2003 $ 14,745.00 $ 13,682.34
3/31/2003 $ 14,416.00 $ 13,637.18
4/30/2003 $ 15,537.10 $ 14,845.44
5/31/2003 $ 16,268.20 $ 15,690.15
6/30/2003 $ 16,317.00 $ 15,960.02
7/31/2003 $ 16,658.20 $ 16,282.41
8/31/2003 $ 17,011.60 $ 16,632.48
9/30/2003 $ 16,706.90 $ 16,732.27
10/31/2003 $ 17,511.20 $ 17,722.83
11/30/2003 $ 17,986.40 $ 17,990.44
12/31/2003 $ 18,900.40 $ 19,118.44
1/31/2004 $ 19,119.70 $ 19,424.34
2/29/2004 $ 19,205.00 $ 19,748.72
3/31/2004 $ 18,729.80 $ 19,618.38
4/30/2004 $ 18,218.00 $ 19,347.65
5/31/2004 $ 18,315.40 $ 19,390.21
6/30/2004 $ 18,498.20 $ 19,787.71
7/31/2004 $ 17,706.20 $ 19,141.64
8/31/2004 $ 17,462.40 $ 19,225.78
9/30/2004 $ 17,657.40 $ 19,589.48
10/31/2004 $ 18,096.10 $ 20,068.84
11/30/2004 $ 18,876.00 $ 21,123.08
12/31/2004 $ 19,546.20 $ 21,929.42
1/31/2005 $ 19,034.40 $ 21,435.69
2/28/2005 $ 19,716.80 $ 22,114.73
3/31/2005 $ 19,375.60 $ 21,685.45
4/30/2005 $ 18,936.90 $ 21,212.94
5/31/2005 $ 19,217.20 $ 21,589.84
6/30/2005 $ 19,326.90 $ 21,776.65
Data presented reflects past performance of the fund, which is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Performance data current to the most recent month end may be
obtained online at www.citizensfunds.com. Fee waivers have been instituted in
the past to maintain expense limits, without which returns would have been
lower. Investment return and principal value of an investment in the fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original costs. Performance figures and the growth of a $10,000
hypothetical investment assume reinvestment of dividends and distributions but
do not reflect the deduction of taxes you would pay on fund distributions or
redemptions of fund shares.
- --------------------------------------------------------------------------------
The fund derived sizeable gains from stocks in the energy sector during the
period. The fund's weighting and stock selection in Valero Energy, whose complex
refinery system benefited from widening spreads between light and heavy oil,
provided double digit stock price appreciation for the period. Bellwether Apache
and integrated natural gas producer BG Group also contributed to positive
performance of the fund for the fiscal year. Other strong stock selections
included NCR and Deutsche Boerse, whose share prices increased significantly
during the period.
CITIZENS GLOBAL EQUITY FUND
26
The selection of healthcare stocks did not fare as well. Boston Scientific,
whose stock price declined during the period in which the fund held it,
continued its effort to win back investor confidence in the wake of last year's
stent recall. The stock price for Pfizer also declined, but the stock price is
up from its low of the period, perhaps indicating a shift in sentiment toward
high quality, high yielding and inexpensive large cap pharmaceutical companies.
The fund's holding of Caremark has been a bright spot in healthcare, but its
positive return to the portfolio was not sufficient enough to offset the
negative returns of the other stocks in the group. The fund purchased Avery
Dennison shares during the second quarter of the fiscal year, and the price of
the stock subsequently declined for the period. In April, the company updated
its earnings guidance and reduced its growth expectations in light of a slower
demand environment and foreshadowed higher costs. The portfolio managers believe
that growth in 2006 will be healthy, albeit tempered from previous expectations
and that management's initiatives will lead to share price recovery for this
firm.
The fund will continue to emphasize healthcare stocks relative to the benchmark,
and the portfolio management team believes the market is still underestimating
the earnings power inherent in the product pipelines of companies such as Roche
and GlaxoSmithKline. The fund's holdings in Estee Lauder suffered after it
reported in-line sales but higher than expected operating expenses for their
first quarter. This led to a reduction in earnings estimates and a subsequent
decline in the price of the stock. The portfolio management team believes the
sell off was overdone and used the opportunity to increase the holdings.
OUTLOOK
The portfolio management team believes global equity market returns for the
coming year will be somewhat muted as the headwinds of interest rate increases,
increasing oil prices, and slower earnings growth keep the upside returns
constrained. Portfolio management believes the Federal Reserve rate hikes are in
late stages and the risk for the next 12 months is a Federal Reserve overshoot
in rate hikes. The management team believes the correction we have seen in the
Euro should support further growth abroad and it appears likely the UK will cut
rates. The forecast is for single digit earnings growth in the next 12 months as
global growth moderates. In light of this outlook, the portfolio is
conservatively positioned, emphasizing, what portfolio management believes are
high quality global franchises.
CITIZENS GLOBAL EQUITY FUND
27
CITIZENS BALANCED FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
Current income and capital appreciation
INVESTMENT STRATEGY
Invests in a blend of stocks, bonds and money market securities
INCEPTION DATE
Standard shares 12.20.02
RISKS
Growth and fixed income investing; high-yield security risks (See pages 8-10 for
important fund risk and benchmark disclosures.)
OUR APPROACH WILL BE TO REMAIN ALERT FOR ANY ATTRACTIVE NICHE OPPORTUNITIES.
HOW DID WE DO?
The Balanced Fund returned 7.76% for the fiscal year ended June 30, 2005. This
was ahead of the benchmark blended index (60% S&P 500 Index and 40% Lehman
Brothers U.S. Aggregate Index), which returned 6.62% for the same period. We
maintained a modestly aggressive asset allocation average of approximately 64%
equities, 26% bonds and 10% cash equivalents during the fiscal year. The
outperformance of the fund can partly be attributed to asset allocation. The
fund's asset allocation strategy was built on the belief throughout the period,
that stocks were modestly attractive in a growing, yet slowing, economy, and
bonds could fall victim to a Federal Reserve intent on raising interest rates.
Our first belief was on the mark, as demonstrated by the return of 6.32% for the
S&P 500 Index. The second belief was not as accurate. We anticipated the
increases in the federal funds rate, but we did not anticipate the moderate
decline in long term rates.
The energy and utility sectors were strong performers for the fund, with each
sector returning approximately 50% for the fiscal year. While neither sector is
a traditional growth venue, the potential supply/demand imbalances that
developed as the year progressed appeared to offer sustainable earnings growth
for a more extended period than in the past. Our best performing stock for the
year was Valero Energy, a refiner and retailer of petroleum products, whose
stock price
CITIZENS BALANCED FUND
28
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 Since
Ticker Year inception
- ---------------------------------------------------------------------------------------------
STANDARD SHARES CFBLX 7.76% 9.51%
</Table>
PERFORMANCE OVER TIME (as of 6.30.05)
This chart shows the performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over
time for the index shown.
(PERFORMANCE OVERTIME)
CITIZENS BALANCED FUND
PERFORMANCE SINCE INCEPTION 12/20/02
DATE CITIZENS BALANCED FUND BLENDED INDEX RETURN
- ---- ---------------------- --------------------
12/20/02 $ 10,000.00 $ 10,000.00
12/31/2002 $ 9,960.00 $ 9,921.00
1/31/2003 $ 9,720.00 $ 9,768.22
2/28/2003 $ 9,700.00 $ 9,734.03
3/31/2003 $ 9,735.30 $ 9,787.56
4/30/2003 $ 10,095.50 $ 10,303.37
5/31/2003 $ 10,465.70 $ 10,706.23
6/30/2003 $ 10,487.30 $ 10,780.10
7/31/2003 $ 10,617.50 $ 10,748.84
8/31/2003 $ 10,807.90 $ 10,903.63
9/30/2003 $ 10,767.30 $ 10,949.42
10/31/2003 $ 11,198.40 $ 11,280.09
11/30/2003 $ 11,368.80 $ 11,350.03
12/31/2003 $ 11,592.30 $ 11,752.96
1/31/2004 $ 11,684.50 $ 11,919.85
2/29/2004 $ 11,766.50 $ 12,071.23
3/31/2004 $ 11,706.10 $ 11,997.60
4/30/2004 $ 11,500.90 $ 11,760.04
5/31/2004 $ 11,624.00 $ 11,837.66
6/30/2004 $ 11,672.90 $ 12,002.20
7/31/2004 $ 11,323.30 $ 11,811.43
8/31/2004 $ 11,302.70 $ 11,930.12
9/30/2004 $ 11,578.70 $ 12,020.58
10/31/2004 $ 11,743.60 $ 12,171.10
11/30/2004 $ 12,073.60 $ 12,427.74
12/31/2004 $ 12,287.40 $ 12,727.24
1/31/2005 $ 12,139.70 $ 12,573.04
2/28/2005 $ 12,308.50 $ 12,702.10
3/31/2005 $ 12,221.70 $ 12,541.01
4/30/2005 $ 12,031.40 $ 12,465.93
5/31/2005 $ 12,412.00 $ 12,757.88
6/30/2005 $ 12,578.40 $ 12,796.58
Data presented reflects past performance of the fund, which is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Performance data current to the most recent month end may be
obtained online 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. Investment return and principal value of an
investment in the fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original costs. Performance
figures and the growth of a $10,000 hypothetical investment assume reinvestment
of dividends and distributions but do not reflect the deduction of taxes you
would pay on fund distributions or redemptions of fund shares.
- --------------------------------------------------------------------------------
more than doubled during the period we held it. In the utility sector, our
holding in Questar, a natural gas producer and utility, did well, with its stock
price moving up more than 50% during the period. Stocks within the financial
sector also did well. Legg Mason, a financial company, had strong growth and
contributed positively to fund performance during the period.
Many widely respected icons of the American business scene faced very visible
industry and regulatory concerns that were played out in the public eye,
resulting in declining stock prices for these companies. Cisco was hit hard, and
was the worst performing stock for the fund during the period. Other stock
holdings that hurt fund performance included American International Group, 3M
and Pfizer. We sold out of these positions before the end of the fiscal year.
CITIZENS BALANCED FUND
29
Positive contribution to fund performance from the fixed income allocation came
from companies that were upgraded during the fiscal year because of their
improving credit metrics including Nextel Communications, Corning and Chesapeake
Energy.
OUTLOOK
We believe that the economy remains healthy, but may slow as the Federal Reserve
continues to raise rates and energy costs take their toll. At present, the
Federal Funds futures market is pricing in an increase in the federal funds rate
to 4.00% by year-end. We believe this is a reasonable expectation with the
current economic outlook. We expect positive growth in the economy, but at a
decreasing rate. Our approach will be to remain alert for any attractive niche
opportunities.
CITIZENS BALANCED FUND
30
CITIZENS INCOME FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
Current income and monthly dividend payment
INVESTMENT STRATEGY
Invests mainly in bonds and mortgage-backed securities
INCEPTION DATE
Standard shares 6.10.92
RISKS
Fixed-income investing; high-yield security risks (See pages 8-10 for important
fund risk and benchmark disclosures.)
WE BELIEVE THAT CORPORATE BONDS SHOULD CONTINUE TO DO WELL IN THE SHORT
TERM. . .
HOW DID WE DO?
The fund returned 5.34% for the fiscal year ended June 30, 2005 versus the
benchmark Lehman Brothers U.S. Aggregate Index which returned 6.80%. Most of the
underperformance can be attributed to an underweight in treasury securities
compared to the benchmark during the third quarter of the fiscal year. The
underweight position detracted from performance as concerns in the corporate
market produced an unanticipated flight to quality.
The fund's performance was helped by companies that we held during the period
that were upgraded because of their improving credit metrics, including Nextel
Communications, Corning, Chesapeake Energy and Xerox.
As a result of the Federal Reserve raising the federal funds rate consistently
since the beginning of the fiscal year, the Treasury market yield curve
flattened. Typically, the yield curve flattens when short term rates rise more
than longer term rates. Although the markets anticipated the federal funds rate
increases, the dramatic decline in long term rates was unexpected. The
intermediate to longer term maturities posted very strong returns during the
fiscal year period and the fund's underweighting in these securities relative to
the index dampened our performance.
CITIZENS INCOME FUND
31
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 3 5 10 Since
Ticker Year Years Years Years inception
- --------------------------------------------------------------------------------------------
STANDARD SHARES WAIMX 5.34% 5.22% 4.49% 5.18% 5.57%
</Table>
PERFORMANCE OVER TIME (as of 6.30.05)
This chart shows the performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over
time for the index shown.
(PERFORMANCE OVERTIME)
CITIZENS INCOME FUND
PERFORMANCE SINCE INCEPTION 06/10/92
DATE CITIZENS INCOME FUND LEHMAN AGGREGATE INDEX RETURN
- ---- -------------------- -----------------------------
6/10/92 $ 10,000.00 $ 10,000.00
6/30/1992 $ 10,080.00 $ 10,117.00
7/31/1992 $ 10,290.10 $ 10,323.39
8/31/1992 $ 10,373.30 $ 10,427.65
9/30/1992 $ 10,517.20 $ 10,551.74
10/31/1992 $ 10,320.30 $ 10,411.40
11/30/1992 $ 10,266.60 $ 10,413.49
12/31/1992 $ 10,419.20 $ 10,579.06
1/31/1993 $ 10,619.30 $ 10,782.18
2/28/1993 $ 10,828.40 $ 10,970.87
3/31/1993 $ 10,854.10 $ 11,016.94
4/30/1993 $ 10,919.30 $ 11,094.06
5/31/1993 $ 10,882.90 $ 11,108.49
6/30/1993 $ 11,095.60 $ 11,309.55
7/31/1993 $ 11,142.80 $ 11,374.01
8/31/1993 $ 11,335.20 $ 11,573.06
9/30/1993 $ 11,380.50 $ 11,604.31
10/31/1993 $ 11,449.30 $ 11,647.24
11/30/1993 $ 11,357.80 $ 11,548.24
12/31/1993 $ 11,456.80 $ 11,610.60
1/31/1994 $ 11,585.90 $ 11,767.34
2/28/1994 $ 11,393.70 $ 11,562.59
3/31/1994 $ 11,200.70 $ 11,277.00
4/30/1994 $ 11,086.30 $ 11,186.78
5/31/1994 $ 11,096.10 $ 11,185.66
6/30/1994 $ 11,096.10 $ 11,161.05
7/31/1994 $ 11,226.60 $ 11,383.16
8/31/1994 $ 11,263.20 $ 11,396.82
9/30/1994 $ 11,176.10 $ 11,229.28
10/31/1994 $ 11,136.90 $ 11,219.18
11/30/1994 $ 11,053.40 $ 11,194.50
12/31/1994 $ 11,104.20 $ 11,271.74
1/31/1995 $ 11,257.40 $ 11,494.92
2/28/1995 $ 11,567.90 $ 11,768.50
3/31/1995 $ 11,668.50 $ 11,840.29
4/30/1995 $ 11,838.10 $ 12,006.05
5/31/1995 $ 12,171.20 $ 12,470.68
6/30/1995 $ 12,255.80 $ 12,561.72
7/31/1995 $ 12,289.10 $ 12,534.08
8/31/1995 $ 12,403.10 $ 12,685.75
9/30/1995 $ 12,587.90 $ 12,808.80
10/31/1995 $ 12,680.50 $ 12,975.31
11/30/1995 $ 12,842.90 $ 13,169.94
12/31/1995 $ 13,034.10 $ 13,354.32
1/31/1996 $ 13,123.60 $ 13,442.46
2/26/1996 $ 13,014.50 $ 13,208.56
3/31/1996 $ 12,895.70 $ 13,116.10
4/30/1996 $ 12,824.90 $ 13,042.65
5/31/1996 $ 12,809.80 $ 13,016.57
6/30/1996 $ 12,927.50 $ 13,190.99
7/31/1996 $ 12,971.10 $ 13,226.60
8/30/1996 $ 13,029.50 $ 13,204.12
9/30/1996 $ 13,254.00 $ 13,433.87
10/31/1996 $ 13,478.20 $ 13,732.10
11/30/1996 $ 13,712.80 $ 13,966.92
12/31/1996 $ 13,665.80 $ 13,837.03
1/31/1997 $ 13,696.10 $ 13,879.92
2/28/1997 $ 13,767.70 $ 13,914.62
3/31/1997 $ 13,621.00 $ 13,760.17
4/30/1997 $ 13,772.70 $ 13,966.57
5/31/1997 $ 13,953.30 $ 14,099.25
6/30/1997 $ 14,163.00 $ 14,267.04
7/31/1997 $ 14,594.40 $ 14,652.25
8/29/1997 $ 14,448.00 $ 14,527.70
9/30/1997 $ 14,672.80 $ 14,741.26
10/31/1997 $ 14,855.70 $ 14,955.01
11/29/1997 $ 14,938.90 $ 15,023.80
12/31/1997 $ 15,097.80 $ 15,175.54
1/31/1998 $ 15,304.90 $ 15,369.79
2/28/1998 $ 15,281.40 $ 15,357.49
3/31/1998 $ 15,312.10 $ 15,409.71
4/30/1998 $ 15,340.80 $ 15,489.84
5/31/1998 $ 15,509.60 $ 15,636.99
6/30/1998 $ 15,649.10 $ 15,769.91
7/31/1998 $ 15,647.40 $ 15,803.02
8/31/1998 $ 15,720.30 $ 16,060.61
9/30/1998 $ 15,919.60 $ 16,436.43
10/31/1998 $ 15,669.20 $ 16,349.32
11/30/1998 $ 15,845.00 $ 16,442.51
12/31/1998 $ 15,974.80 $ 16,491.84
1/31/1999 $ 16,145.60 $ 16,608.93
2/28/1999 $ 15,895.50 $ 16,318.27
3/31/1999 $ 15,982.40 $ 16,408.02
4/30/1999 $ 16,059.20 $ 16,460.53
5/31/1999 $ 15,907.70 $ 16,315.68
6/30/1999 $ 15,770.70 $ 16,263.46
7/31/1999 $ 15,754.80 $ 16,193.53
8/31/1999 $ 15,663.80 $ 16,185.44
9/30/1999 $ 15,764.80 $ 16,373.19
10/31/1999 $ 15,766.70 $ 16,433.77
11/30/1999 $ 15,828.20 $ 16,432.12
12/31/1999 $ 15,844.20 $ 16,353.25
1/31/2000 $ 15,817.20 $ 16,299.28
2/29/2000 $ 15,931.60 $ 16,496.51
3/31/2000 $ 15,980.00 $ 16,714.26
4/30/2000 $ 15,938.70 $ 16,665.79
5/31/2000 $ 15,906.30 $ 16,657.45
6/30/2000 $ 16,298.30 $ 17,003.93
7/31/2000 $ 16,466.50 $ 17,158.67
8/31/2000 $ 16,688.70 $ 17,407.47
9/30/2000 $ 16,671.80 $ 17,517.13
10/31/2000 $ 16,634.10 $ 17,632.75
11/30/2000 $ 16,662.40 $ 17,921.92
12/31/2000 $ 16,990.00 $ 18,255.27
1/31/2001 $ 17,426.90 $ 18,554.66
2/28/2001 $ 17,641.20 $ 18,716.08
3/31/2001 $ 17,656.80 $ 18,809.66
4/30/2001 $ 17,546.20 $ 18,730.66
5/31/2001 $ 17,623.40 $ 18,843.05
6/30/2001 $ 17,579.50 $ 18,914.65
7/31/2001 $ 18,041.60 $ 19,338.34
8/31/2001 $ 18,208.40 $ 19,560.73
9/30/2001 $ 18,071.90 $ 19,789.59
10/31/2001 $ 18,259.20 $ 20,203.19
11/30/2001 $ 17,937.60 $ 19,924.39
12/31/2001 $ 17,730.70 $ 19,796.87
1/31/2002 $ 17,761.30 $ 19,957.23
2/28/2002 $ 17,802.20 $ 20,150.81
3/31/2002 $ 17,421.50 $ 19,816.31
4/30/2002 $ 17,576.70 $ 20,200.75
5/31/2002 $ 17,708.60 $ 20,372.45
6/30/2002 $ 17,427.30 $ 20,547.65
7/31/2002 $ 17,492.10 $ 20,796.28
8/31/2002 $ 17,809.30 $ 21,147.74
9/30/2002 $ 18,181.60 $ 21,490.33
10/31/2002 $ 18,060.90 $ 21,391.48
11/30/2002 $ 17,914.10 $ 21,385.06
12/31/2002 $ 18,352.40 $ 21,827.73
1/31/2003 $ 18,377.30 $ 21,847.37
2/28/2003 $ 18,737.50 $ 22,148.87
3/31/2003 $ 18,778.10 $ 22,131.15
4/30/2003 $ 19,008.60 $ 22,314.84
5/31/2003 $ 19,372.30 $ 22,729.89
6/30/2003 $ 19,392.40 $ 22,684.43
7/31/2003 $ 18,655.30 $ 21,922.24
8/31/2003 $ 18,749.60 $ 22,066.92
9/30/2003 $ 19,299.70 $ 22,651.70
10/31/2003 $ 19,147.10 $ 22,441.04
11/30/2003 $ 19,204.00 $ 22,494.89
12/31/2003 $ 19,416.20 $ 22,724.34
1/31/2004 $ 19,547.20 $ 22,906.14
2/29/2004 $ 19,731.20 $ 23,153.52
3/31/2004 $ 19,889.20 $ 23,327.17
4/30/2004 $ 19,366.90 $ 22,720.67
5/31/2004 $ 19,189.90 $ 22,629.79
6/30/2004 $ 19,270.20 $ 22,758.78
7/31/2004 $ 19,443.50 $ 22,984.39
8/31/2004 $ 19,740.40 $ 23,422.87
9/30/2004 $ 19,817.50 $ 23,486.38
10/31/2004 $ 20,027.30 $ 23,683.30
11/30/2004 $ 19,892.80 $ 23,494.40
12/31/2004 $ 20,054.00 $ 23,710.61
1/31/2005 $ 20,117.50 $ 23,859.39
2/28/2005 $ 20,101.30 $ 23,718.67
3/31/2005 $ 19,805.00 $ 23,596.74
4/30/2005 $ 19,991.10 $ 23,916.08
5/31/2005 $ 20,196.80 $ 24,174.82
6/30/2005 $ 20,299.60 $ 24,306.65
Data presented reflects past performance of the fund, which is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Performance data current to the most recent month end may be
obtained online at www.citizensfunds.com. Fee waivers have been instituted in
the past to maintain expense limits, without which returns would have been
lower. Investment return and principal value of an investment in the fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original costs. Performance figures and the growth of a $10,000
hypothetical investment assume reinvestment of dividends and distributions but
do not reflect the deduction of taxes you would pay on fund distributions or
redemptions of fund shares.
- --------------------------------------------------------------------------------
In the past year, the two year Treasury note rose 96 basis points to offer a
yield of 3.63%, the yield on the 10 year Treasury fell 67 basis points to yield
3.91%, and the yield on the 30 year Treasury fell 110 basis points to yield
4.19%. In other words, the spread between the 2 year and 10 year Treasury notes
decreased from 191 to 28 basis points, certainly a significant change.
The past year was interesting for corporate bonds as well. Spreads continued to
tighten throughout the year until a setback at the end of the third quarter of
the fiscal year. In the third quarter of the period, General Motors was put on
watch to be downgraded to high yield status, which created a flight to quality
scenario in spread products. Although the fund does not hold GM, it can serve as
a bellwether to other corporate bonds. The corporate bond market seemed to
settle down and improve when General
CITIZENS INCOME FUND
32
Motors was finally downgraded to high yield, and corporate bonds experienced
steady improvement in the last month of the period.
OUTLOOK
We believe that corporate bonds should continue to do well in the short term,
while we do have some concerns for the longer term. One specific concern is
within the credit environment. In the last half of the fiscal year, we have
observed more downgrades than upgrades. There has also been an increase in
merger and acquisition activity, which we foresee as possibly having a negative
consequence for bondholders. As a result, we will be watchful and wary of the
increase in event risk, unforeseen corporate reorganizations and bond buybacks
that may have negative impacts going forward. Additionally, our strategy will be
to continue to remain focused on the interest rate movements.
CITIZENS INCOME FUND
33
CITIZENS ULTRA SHORT BOND FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
High level of current income consistent with preservation of capital
INVESTMENT STRATEGY
Invests mainly in short-duration investment-grade securities
INCEPTION DATE
Standard shares 11.21.02
RISKS
Fixed-income investing (See
pages 8-10 for important fund risk and benchmark disclosure.)
HOW DID WE DO?
The Ultra Short Bond Fund returned 2.23% for the fiscal year ended June 30,
2005. The benchmark Merrill Lynch 1-Year Treasury Index returned 1.73% for the
same period, resulting in the fund outperforming the benchmark by 50 basis
points. The fund had a 30 day SEC yield of 3.10% as of June 30, 2005 up from
1.89% as of June 30, 2004.
The fund's position in floating rate corporate notes, such as American Express
and CIT Group, contributed to outperformance during the period. The coupon rates
on these floating rate corporate notes reset on either a monthly or quarterly
basis. During the fiscal year, as interest rates rose, this feature of the
floating rate corporate note allowed us to take advantage of the rising interest
rate environment, by reinvesting the coupon payout at higher rates. Other spread
products that we held performed better than Treasuries during the past year,
including corporate bonds and asset backed securities.
During the fiscal year period, the yield on the six month Treasury bill rose 169
basis points to 3.32% and the yield on the two year Treasury note rose 96 basis
points to 3.63%. The Federal Reserve began tightening short term interest rates
back on June 30, 2004, when the federal funds rate had been at 1.00% for almost
a full year. Since then, the federal funds rate has increased another eight
times to its current rate of 3.25%, with no real
CITIZENS ULTRA SHORT BOND FUND
34
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 Since
Ticker Year inception
- ---------------------------------------------------------------------------------------------
STANDARD SHARES CFSBX 2.23% 1.85%
</Table>
PERFORMANCE OVER TIME (as of 6.30.05)
This chart shows the performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over
time for the index shown.
(PERFORMANCE OVERTIME)
CITIZENS ULTRA SHORT BOND FUND
PERFORMANCE SINCE INCEPTION 11/22/02
DATE CITIZENS ULTRA SHORT BOND FUND MERRILL LYNCH 1 YR TREASURY INDEX RETURN
- ---- ------------------------------ ----------------------------------------
11/21/02 $ 10,000.00 $ 10,000.00
11/30/2002 $ 10,003.70 $ 10,001.00
12/31/2002 $ 10,052.90 $ 10,039.00
1/31/2003 $ 10,075.70 $ 10,047.04
2/28/2003 $ 10,117.50 $ 10,065.12
3/31/2003 $ 10,139.40 $ 10,083.24
4/30/2003 $ 10,161.00 $ 10,094.33
5/31/2003 $ 10,192.10 $ 10,106.44
6/30/2003 $ 10,211.60 $ 10,127.67
7/31/2003 $ 10,138.60 $ 10,122.60
8/31/2003 $ 10,135.50 $ 10,131.71
9/30/2003 $ 10,191.90 $ 10,160.08
10/31/2003 $ 10,177.80 $ 10,157.03
11/30/2003 $ 10,182.80 $ 10,153.99
12/31/2003 $ 10,219.10 $ 10,186.48
1/31/2004 $ 10,235.10 $ 10,201.76
2/29/2004 $ 10,260.60 $ 10,222.16
3/31/2004 $ 10,276.50 $ 10,232.38
4/30/2004 $ 10,250.90 $ 10,205.78
5/31/2004 $ 10,256.20 $ 10,204.76
6/30/2004 $ 10,260.80 $ 10,201.70
7/31/2004 $ 10,276.80 $ 10,224.75
8/31/2004 $ 10,304.30 $ 10,254.61
9/30/2004 $ 10,321.70 $ 10,251.53
10/31/2004 $ 10,340.10 $ 10,268.96
11/30/2004 $ 10,330.50 $ 10,253.45
12/31/2004 $ 10,351.00 $ 10,269.55
1/31/2005 $ 10,372.30 $ 10,277.67
2/28/2005 $ 10,381.90 $ 10,277.77
3/31/2005 $ 10,404.80 $ 10,292.47
4/30/2005 $ 10,438.00 $ 10,328.80
5/31/2005 $ 10,463.20 $ 10,360.40
6/30/2005 $ 10,489.20 $ 10,378.12
Data presented reflects past performance of the fund, which is no guarantee of
future results. Current performance may be lower or higher than the performance
data quoted. Performance data current to the most recent month end may be
obtained online 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. Investment return and principal value of an
investment in the fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original costs. Performance
figures and the growth of a $10,000 hypothetical investment assume reinvestment
of dividends and distributions but do not reflect the deduction of taxes you
would pay on fund distributions or redemptions of fund shares.
- --------------------------------------------------------------------------------
change of bias in sight. Our belief is that the stance of the Federal Reserve
remains accommodative and is providing ongoing support to economic activity. At
present, the futures market is pricing in an increase for the federal funds rate
by year end.
Citizens Ultra Short Bond Fund was created so that our shareholders would have
an option to earn a higher yield in the fixed income market. Due to the small
asset size of the fund, and our belief that rising short-term interest rates now
allow money market oriented investors an opportunity to earn a good yield
without the credit and principal risk inherent in a bond fund, we have closed
the Citizens Ultra Short Bond Fund.
CITIZENS ULTRA SHORT BOND FUND
35
CITIZENS MONEY MARKET FUND
PORTFOLIO REVIEW
FUND INFORMATION
INVESTMENT GOAL
Current income consistent with safety and liquidity
INVESTMENT STRATEGY
Invests exclusively in money market instruments
INCEPTION DATE
Standard shares: 8.30.83
Institutional shares: 2.01.96
RISKS
Money market investing (See pages 8-10 for important fund risk and benchmark
disclosures.)
HOW DID WE DO?
The 7 day simple yield on the standard shares rose from 0.50% on June 30, 2004
to 2.20% on June 30, 2005. The fund had a total return of 1.21% for the fiscal
year. During this time, the average weighted maturity of the fund fell from 42
days to 31 days. We anticipated the federal funds rate increases during the
fiscal year, and believed that short term rates would continue to increase. This
belief resulted in an investment strategy of keeping the fund at a shorter
duration than our peer group. An additional strategy for the fund was to target
maturities and structure the portfolio so we could take advantage of the higher
interest rates, as they materialized, throughout the fiscal year.
With the federal funds rate at 1.00% for almost a full year and a much improved
economy, the Federal Reserve began tightening short term interest rates on June
30, 2004. Since then, the federal funds rate has been increased eight times to
its current rate of 3.25% for a total increase of 225 basis points with no real
change of bias in sight. In addition, corporate commercial paper supply has been
increasing modestly because of this increase in rates, which is a positive for
the market.
CITIZENS MONEY MARKET FUND
36
PERFORMANCE (as of 6.30.05)
<Table>
<Caption>
AVERAGE ANNUAL RETURN
1 5 10 Since
Ticker Year Years Years inception
- ---------------------------------------------------------------------------------------------
STANDARD SHARES WKAXX 1.21% 1.77% 3.09% NA
INSTITUTIONAL SHARES WAIXX 1.53% 2.04% NA 3.41%
</Table>
Data presented reflects past performance, which is no guarantee of future
results. Current performance may be lower or higher than the performance data
quoted. Performance data current to the most recent month end may be obtained
online at www.citizensfunds.com. Fees have been instituted in the past to
maintain expense limits, without which returns would have been lower.
Performance figures assume reinvestment of dividends and distributions but do
not reflect the deduction of taxes you would pay on fund distributions or
redemptions 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.
- --------------------------------------------------------------------------------
OUTLOOK
We believe the Federal Reserve will continue to raise rates at least through
year end unless there is a considerable change in the growth of the economy,
unemployment or inflation. At present, the futures market is pricing in an
increase to 4.00% for the federal funds rate by the calendar year end. We
believe that is a reasonable expectation with the current economic outlook. If
this occurs, we expect at some point higher short term rates may have an impact
on corporate profits as companies may have to borrow money at higher rates. We
believe this may slow the economy down. That said, one concern we have going
forward is that the Federal Reserve may overshoot with their tightening,
increasing the federal funds rate to a point that stops growth, which could hurt
the economy down the road. We are mindful of these concerns as we choose
investments for the fund.
CITIZENS MONEY MARKET FUND
37
PORTFOLIO COMPOSITION (UNAUDITED)
PORTFOLIO COMPOSITION
<Table>
<Caption>
PERCENTAGE OF
300 FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
Financials 23.5%
Information Technology 16.7%
Healthcare 14.9%
Consumer Discretionary 12.9%
Consumer Staples 10.4%
Energy 8.1%
Industrials 7.5%
Telecommunication Services 3.6%
Materials 1.2%
Utilities 0.8%
Cash Equivalents 0.4%
- ------------------------------------------------------------
</Table>
<Table>
<Caption>
PERCENTAGE OF
CORE GROWTH FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
Healthcare 17.4%
Financials 14.5%
Information Technology 13.7%
Consumer Discretionary 12.4%
Consumer Staples 9.0%
Energy 8.6%
Industrials 7.8%
Cash Equivalents 5.4%
Utilities 5.0%
Telecommunication Services 3.2%
Materials 3.0%
- ------------------------------------------------------------
</Table>
<Table>
<Caption>
PERCENTAGE OF
EMERGING GROWTH FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
Consumer Discretionary 21.3%
Information Technology 19.9%
Healthcare 17.8%
Industrials 11.3%
Financials 10.5%
Energy 8.2%
Consumer Staples 4.9%
Materials 3.3%
Telecommunication Services 1.4%
Utilities 1.1%
Cash Equivalents 0.3%
- ------------------------------------------------------------
</Table>
<Table>
<Caption>
SMALL CAP PERCENTAGE OF
CORE GROWTH FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
Consumer Discretionary 22.2%
Healthcare 17.8%
Information Technology 17.7%
Industrials 15.7%
Cash Equivalents 7.7%
Financials 6.4%
Energy 5.4%
Materials 3.7%
Consumer Staples 2.2%
Telecommunication Services 1.2%
- ------------------------------------------------------------
</Table>
<Table>
<Caption>
PERCENTAGE OF
VALUE FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
Financials 21.5%
Healthcare 13.5%
Energy 12.2%
Consumer Discretionary 11.9%
Information Technology 11.0%
Industrials 10.1%
Consumer Staples 9.2%
Materials 3.8%
Utilities 3.5%
Telecommunication Services 3.3%
Cash Equivalents 0.0%*
- ------------------------------------------------------------
</Table>
<Table>
<Caption>
PERCENTAGE OF
GLOBAL EQUITY FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
Financials 20.5%
Healthcare 14.7%
Information Technology 12.9%
Consumer Discretionary 12.7%
Energy 10.2%
Industrials 9.4%
Consumer Staples 8.5%
Telecommunication Services 5.7%
Materials 2.9%
Cash Equivalents 2.5%
- ------------------------------------------------------------
</Table>
* Less than 0.1%
SEE FINANCIAL NOTES
38
JUNE 30, 2005
<Table>
<Caption>
PERCENTAGE OF
BALANCED FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
Equity
Financials 11.2%
Healthcare 10.8%
Information Technology 9.2%
Consumer Discretionary 7.4%
Energy 6.6%
Industrials 6.4%
Consumer Staples 6.0%
Utilities 2.9%
Materials 1.8%
Telecommunication Services 1.7%
- ------------------------------------------------------------
Fixed Income
U.S. Government Agency Obligations 12.6%
U.S. Government Obligations 8.7%
Corporate Bonds 6.4%
Collateralized Mortgage Obligations 0.7%
Foreign Government Bonds 0.3%
- ------------------------------------------------------------
Cash Equivalents 7.3%
- ------------------------------------------------------------
</Table>
<Table>
<Caption>
PERCENTAGE OF
INCOME FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
U.S. Government Agency Obligations 41.7%
Corporate Bonds 33.3%
U.S. Government Obligations 15.5%
Collateralized Mortgage Obligations 4.0%
Cash Equivalents 3.6%
Foreign Government Bonds 1.9%
- ------------------------------------------------------------
</Table>
<Table>
<Caption>
PERCENTAGE OF
ULTRA SHORT BOND FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
Corporate Bonds 51.8%
Cash Equivalents 25.8%
U.S. Government Agency Obligations 18.5%
U.S. Government Obligations 3.9%
- ------------------------------------------------------------
</Table>
<Table>
<Caption>
PERCENTAGE OF
MONEY MARKET FUND INVESTMENTS
SECURITY ALLOCATION AT VALUE
- ------------------------------------------------------------
Commercial Paper 77.3%
Certificates of Deposit 12.8%
U.S. Government Agency Obligations 4.8%
Municipal Notes 4.0%
Cash Equivalents 1.1%
- ------------------------------------------------------------
</Table>
All portfolio compositions subject to change.
SEE FINANCIAL NOTES
39
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 funds' 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 300 Fund, Citizens Core Growth
Fund, Citizens Emerging Growth Fund, Citizens Small Cap Core Growth Fund,
Citizens Value Fund, Citizens Global Equity Fund, Citizens Balanced Fund,
Citizens Income Fund, Citizens Ultra Short Bond Fund and Citizens Money Market
Fund (hereinafter referred to as the "Funds") at June 30, 2005, 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). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at June 30, 2005 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Columbus, Ohio
August 18, 2005
40
CITIZENS FUNDS HOLDINGS
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
300 FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
COMMON STOCKS - 99.9%
Air Freight - 1.6%
FedEx Corp. 300 24
United Parcel Service, Class B 1,065 74
-----
98
Airlines - 0.2%
jetBlue Airways Corp. (a) 100 2
Southwest Airlines Co. 830 12
-----
14
Apparel Manufacturers - 0.1%
Jones Apparel Group, Inc. 200 6
Auto Manufacturing - 0.2%
PACCAR, Inc. 150 10
Banks - 4.7%
Bank of America Corp. 3,700 169
Bank of New York Co., Inc. 800 23
BB&T Corp. 600 24
Fifth Third Bancorp 600 25
First Horizon National Corp. 200 8
National City Corp. 700 24
North Fork Bancorporation, Inc. 500 14
Suntrust Banks, Inc. 100 7
-----
294
Biotechnology - 1.5%
Allergan, Inc. 100 9
Applera Corp. 200 4
Biogen Idec, Inc. (a) 375 13
Chiron Corp. (a) 200 7
Forest Laboratories, Inc. (a) 400 16
Genzyme Corp. (a) 300 18
Gilead Sciences, Inc. (a) 500 21
MedImmune, Inc. (a) 200 5
-----
93
Broadcasting - 0.2%
Radio One, Inc., Class D (a) 200 3
Univision Communications, Inc. (a) 350 9
-----
12
Chemicals - 1.6%
Air Products & Chemicals, Inc. 200 12
Amgen, Inc. (a) 1,100 66
Engelhard Corp. 200 6
International Flavors & Fragrances, Inc. 100 4
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
300 FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Praxair, Inc. 200 9
Sigma-Aldrich Corp. 100 6
-----
103
Computers - 9.6%
Apple Computer, Inc. (a) 740 27
Citrix Systems, Inc. (a) 225 5
Corning, Inc. (a) 1,480 25
Dell, Inc. (a) 2,200 87
EMC Corp. (a) 2,200 30
Intel Corp. 5,655 147
International Business Machines Corp. 1,450 108
Intuit, Inc. (a) 200 9
Lexmark International, Inc. (a) 150 10
National Instruments Corp. 100 2
Network Appliance, Inc. (a) 400 11
Novell, Inc. (a) 400 2
Oracle Corp. (a) 4,740 63
Pixar, Inc. (a) 100 5
SunGard Data Systems, Inc. (a) 300 11
Symantec Corp. (a) 750 16
Yahoo!, Inc. (a) 1,300 45
-----
603
Construction - 0.4%
D. R. Horton, Inc. 366 13
Lennar Corp. 200 13
-----
26
Consumer Products - 1.0%
Black & Decker Corp. 100 9
Clorox Co. 200 11
Kimberly-Clark Corp. 400 25
Newell Rubbermaid, Inc. 300 7
The Stanley Works 100 5
Whirlpool Corp. 100 7
-----
64
Electrical Equipment - 0.6%
American Power Conversion Corp. 220 5
Emerson Electric Co. 400 26
Sanmina Corp. (a) 600 3
W.W. Grainger, Inc. 100 5
-----
39
Electronics - 5.1%
Adobe Systems, Inc. 500 14
Applied Materials, Inc. 1,500 24
Broadcom Corp., Class A (a) 300 11
Cisco Systems, Inc. (a) 5,855 112
</Table>
SEE FINANCIAL NOTES
41
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
300 FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Electronics (continued)
Electronic Arts, Inc. (a) 300 17
Freescale Semiconductor, Inc., Class B (a) 520 11
Harman International Industries, Inc. 100 8
JDS Uniphase Corp. (a) 1,600 2
Johnson Controls, Inc. 200 11
Juniper Networks, Inc. (a) 600 15
Linear Technology Corp. 300 11
Maxim Integrated Products, Inc. 350 13
NVIDIA Corp. (a) 100 3
Rockwell Automation, Inc. 220 11
SPX Corp. 100 5
Texas Instruments, Inc. 1,600 45
Xilinx, Inc. 300 8
-----
321
Energy & Utilities - 8.9%
AES Corp. (a) 700 11
AGL Resources, Inc. 100 4
Anadarko Petroleum Corp. 250 21
Apache Corp. 200 13
Baker Hughes, Inc. 400 20
BJ Services Co. 200 10
BP Amoco plc ADR 3,225 202
Burlington Resources, Inc. 400 22
Calpine Corp. (a) 300 1
ConocoPhillips 1,300 76
Devon Energy Corp. 500 25
Diamond Offshore Drilling, Inc. 200 11
EOG Resources, Inc. 100 6
Equitable Resources, Inc. 35 2
Hawaiian Electric Industries, Inc. 125 3
KeySpan Corp. 200 8
Newfield Exploration Co. (a) 200 8
NiSource, Inc. 300 7
Noble Corp. 200 12
Noble Energy, Inc. 100 8
Pepco Holdings, Inc. 100 2
Pioneer Natural Resources Co. 200 8
Pogo Producing Co. 100 5
Puget Energy, Inc. 100 2
Questar Corp. 100 7
Rowan Cos., Inc. 200 6
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
300 FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Smith International, Inc. 100 6
The Williams Cos., Inc. 500 10
Valero Energy Corp. 300 24
Western Gas Resources, Inc. 100 3
XTO Energy, Inc. 400 14
-----
557
Entertainment - 2.8%
Comcast Corp., Class A (a) 2,000 61
Time Warner, Inc. (a) 4,150 70
Viacom, Inc. 1,500 48
-----
179
Financial - Diversified - 12.5%
AMBAC Financial Group, Inc. 100 7
American Express Co. 1,100 59
Citigroup, Inc. 4,800 222
Fannie Mae 900 53
Freddie Mac 600 39
Legg Mason, Inc. 100 10
Lehman Brothers Holdings, Inc. 300 30
MBNA Corp. 1,200 31
Mellon Financial Corp. 400 11
Merrill Lynch & Co. 900 50
MetLife, Inc. 700 31
Moody's Corp. 250 11
Northern Trust Corp. 200 9
State Street Corp. 400 19
Synovus Financial Corp. 390 11
Wachovia Corp. 1,400 69
Washington Mutual, Inc. 800 33
Wells Fargo & Co. 1,560 96
-----
791
Financial Services - 1.0%
Charles Schwab Corp. 1,400 16
Golden West Financial Corp. 320 20
Principal Financial Group 300 13
T. Rowe Price Group, Inc. 170 11
-----
60
Foods - 4.9%
Bunge, Ltd. 100 6
Campbell Soup Co. 400 12
Coca-Cola Co. 2,200 91
General Mills, Inc. 400 19
H.J. Heinz Co. 400 14
Hershey Foods Corp. 250 16
Kellogg Co. 449 20
McCormick & Co., Inc. 100 3
Pepsi Bottling Group, Inc. 200 6
PepsiCo, Inc. 1,550 84
</Table>
SEE FINANCIAL NOTES
42
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
300 FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Foods (continued)
Sara Lee Corp. 850 17
SUPERVALU, Inc. 100 3
Wm. Wrigley Jr. Co. 230 16
-----
307
Healthcare - 12.1%
Baxter International, Inc. 600 22
Becton, Dickinson & Co. 250 13
Biomet, Inc. 300 10
Boston Scientific Corp. (a) 900 24
DENTSPLY International, Inc. 100 5
Eli Lilly & Co. 1,000 56
Express Scripts, Inc. (a) 200 10
Guidant Corp. 300 20
Health Management Associates, Inc., Class A 300 8
Johnson & Johnson, Inc. 2,700 176
Laboratory Corp. of America Holdings (a) 125 6
Medtronic, Inc. 1,100 57
Mylan Laboratories, Inc. 350 7
Pfizer, Inc. 6,850 189
Quest Diagnostics, Inc. 200 11
St. Jude Medical, Inc. (a) 400 17
Stryker Corp. 420 20
UnitedHealth Group, Inc. 1,200 63
WellPoint, Inc. (a) 600 42
Zimmer Holdings, Inc. (a) 100 8
-----
764
Insurance - 4.4%
American International Group, Inc. 2,365 138
Fidelity National Financial Corp. 200 7
Marsh & McLennan Cos., Inc. 500 14
MBIA, Inc. 200 12
Progressive Corp. 200 20
The Allstate Corp. 600 36
The Hartford Financial Services Group, Inc. 300 22
The St. Paul Travelers Cos., Inc. 670 26
-----
275
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
300 FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Investment Banking & Brokerage - 0.8%
The Goldman Sachs Group, Inc. 500 51
Leisure - 0.2%
Harley-Davidson, Inc. 300 15
Manufacturing - 6.1%
3M Co. 700 51
Bausch & Lomb, Inc. 100 8
Cintas Corp. 135 5
Cooper Cameron Corp. (a) 100 6
Crane Co. 100 3
Dana Corp. 100 2
Donaldson Co., Inc. 100 3
Dover Corp. 300 11
Eaton Corp. 200 12
Gentex Corp. 210 4
Graco, Inc. 100 3
Illinois Tool Works, Inc. 300 24
Ingersoll-Rand Co. 200 14
Masco Corp. 515 16
Mattel, Inc. 570 10
Nucor Corp. 200 9
Pactiv Corp. (a) 200 4
Parker Hannifin Corp. 100 6
Pentair, Inc. 100 4
Procter & Gamble Co. 2,302 122
Sealed Air Corp. (a) 100 5
Smurfit-Stone Container Corp. (a) 500 5
Sonoco Products Co. 100 3
Tyco International, Ltd. 1,810 53
Worthington Industries, Inc. 100 2
-----
385
Office Equipment & Supplies - 0.2%
Avery Dennison Corp. 120 6
Pitney Bowes, Inc. 200 9
-----
15
Personal Care - 1.7%
Avon Products, Inc. 500 19
Colgate-Palmolive Co. 560 28
Gillette Co. 900 45
The Estee Lauder Cos., Inc., Class A 300 12
-----
104
</Table>
SEE FINANCIAL NOTES
43
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
300 FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Pharmaceuticals - 0.1%
McKesson Corp. 200 9
Publishing - 0.5%
Dow Jones & Co., Inc. 100 4
The McGraw-Hill Cos., Inc. 400 17
Tribune Co. 300 11
-----
32
Railroads - 0.4%
CSX Corp. 300 13
Norfolk Southern Corp. 500 15
-----
28
Real Estate - 0.2%
The St. Joe Co. 120 10
Restaurants - 1.2%
Darden Restaurants, Inc. 200 7
McDonald's Corp. 1,200 33
Starbucks Corp. (a) 400 21
YUM! Brands, Inc. 250 13
-----
74
Retail - 7.3%
AutoZone, Inc. (a) 100 9
Bed Bath & Beyond, Inc. (a) 300 13
Best Buy & Co., Inc. 300 21
Big Lots, Inc. (a) 200 3
Chico's FAS, Inc. (a) 210 7
Coach, Inc. (a) 400 13
Costco Wholesale Corp. 500 22
CVS Corp. 860 25
Dollar General Corp. 400 8
eBay, Inc. (a) 1,200 40
Family Dollar Stores, Inc. 250 7
Fastenal Co. 120 7
Hasbro, Inc. 100 2
Home Depot, Inc. 1,965 76
Limited Brands, Inc. 430 9
Lowe's Cos., Inc. 700 41
Michaels Stores, Inc. 200 8
Nordstrom, Inc. 100 7
RadioShack Corp. 235 5
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
300 FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Staples, Inc. 795 17
Target Corp. 800 44
The Gap, Inc. 868 17
The TJX Cos., Inc. 500 12
Tiffany & Co. 200 7
Walgreen Co. 900 41
-----
461
Services - 2.3%
Apollo Group, Inc., Class A (a) 200 16
ARAMARK Corp. 200 5
Career Education Corp. (a) 200 7
Cendant Corp. 1,000 22
Ecolab, Inc. 300 10
Fair Isaac & Co., Inc. 100 4
First Data Corp. 700 28
Fiserv, Inc. (a) 200 9
Manpower, Inc. 100 4
Monster Worldwide, Inc. (a) 100 3
Omnicom Group, Inc. 200 16
Pall Corp. 100 3
Paychex, Inc. 400 13
Unisys Corp. (a) 700 4
Viad Corp. 31 1
-----
145
Telecommunications - 5.4%
Lucent Technologies, Inc. (a) 5,000 15
Motorola, Inc. 2,200 40
Nextel Communications, Inc. (a) 1,000 32
QUALCOMM, Inc. 1,550 51
SBC Communications, Inc. 2,980 71
Scientific-Atlanta, Inc. 200 7
Sprint Corp. 1,317 33
Verizon Communications, Inc. 2,550 88
-----
337
Transportation - 0.1%
Ryder System, Inc. 100 4
-----
TOTAL COMMON STOCKS 6,286
Cost: $5,835
</Table>
SEE FINANCIAL NOTES
44
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
300 FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 0.4%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $23,
collateralized by Federal Home Loan
Mortgage Corp. security,
4.00%, 07/01/18)
Cost: $23 23 23
-----
TOTAL INVESTMENTS - 100.3% 6,309
Cost: $5,858 (b)
</Table>
Percentages indicated are based on net assets of $6,290.
(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 $31. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<Table>
Unrealized appreciation $ 693
Unrealized depreciation (273)
------
Net unrealized appreciation $ 420
</Table>
ADR - American Depositary Receipt
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
45
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
CORE GROWTH FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
COMMON STOCKS - 94.7%
Air Freight - 0.9%
FedEx Corp. 35,000 2,835
Apparel Manufacturers - 1.1%
Nike, Inc., Class B 40,000 3,464
Auto Manufacturing - 1.1%
PACCAR, Inc. 50,000 3,400
Biotechnology - 1.4%
Gilead Sciences, Inc. (a) 100,000 4,399
Chemicals - 2.7%
Amgen, Inc. (a) 60,000 3,628
Praxair, Inc. 110,000 5,126
-------
8,754
Computers - 4.9%
Cognos, Inc. (a) 120,000 4,097
Dell, Inc. (a) 100,000 3,951
Network Appliance, Inc. (a) 120,000 3,392
Symantec Corp. (a) 200,000 4,348
-------
15,788
Consumer Products - 1.2%
Black & Decker Corp. 45,000 4,043
Electronics - 6.5%
Adobe Systems, Inc. 200,000 5,724
Electronic Arts, Inc. (a) 75,000 4,246
Rockwell Automation, Inc. 125,000 6,089
Texas Instruments, Inc. 175,000 4,912
-------
20,971
Energy & Utilities - 13.5%
Apache Corp. 100,000 6,460
BJ Services Co. 70,000 3,674
Burlington Resources, Inc. 100,000 5,524
ConocoPhillips 120,000 6,899
Equitable Resources, Inc. 110,000 7,479
Murphy Oil Corp. 100,000 5,223
Questar Corp. 130,000 8,566
Silvan Power Co. (a)(b) 24,000 --
Vulcan Power Co., Class A (a)(b) 40,000 --
-------
43,825
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
CORE GROWTH FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Financial - Diversified - 6.1%
Legg Mason, Inc. 75,000 7,808
Moody's Corp. 150,000 6,744
SLM Corp. 105,000 5,334
-------
19,886
Financial Services - 3.8%
Franklin Resources, Inc. 85,000 6,544
Golden West Financial Corp. 90,000 5,794
-------
12,338
Foods - 5.6%
Hershey Foods Corp. 100,000 6,211
PepsiCo, Inc. 80,000 4,314
Sysco Corp. 100,000 3,619
Wm. Wrigley Jr. Co. 60,000 4,130
-------
18,274
Healthcare - 12.7%
Becton, Dickinson & Co. 125,000 6,559
C.R. Bard, Inc. 100,000 6,651
Johnson & Johnson, Inc. 125,000 8,124
St. Jude Medical, Inc. (a) 80,000 3,489
UnitedHealth Group, Inc. 150,000 7,821
WellPoint, Inc. (a) 80,000 5,571
Zimmer Holdings, Inc. (a) 40,000 3,047
-------
41,262
Hotels & Motels - 1.7%
Marriott International, Inc., Class A 80,000 5,458
Insurance - 3.5%
The Allstate Corp. 130,020 7,769
The Chubb Corp. 40,000 3,424
-------
11,193
Manufacturing - 5.3%
Pentair, Inc. 125,000 5,351
Precision Castparts Corp. 60,000 4,674
Taiwan Semiconductor ADR 472,500 4,309
Tyco International, Ltd. 100,000 2,920
-------
17,254
Personal Care - 1.3%
Gillette Co. 80,000 4,050
Pharmaceuticals - 2.2%
Barr Pharmaceuticals, Inc. (a) 80,000 3,899
Schering-Plough Corp. 175,000 3,336
-------
7,235
Publishing - 1.5%
The McGraw-Hill Cos., Inc. 110,000 4,868
Real Estate - 1.1%
Simon Property Group, Inc. 50,000 3,625
Retail - 7.3%
Coach, Inc. (a) 100,000 3,357
CVS Corp. 240,000 6,977
</Table>
SEE FINANCIAL NOTES
46
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
CORE GROWTH FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Retail (continued)
Nordstrom, Inc. 100,000 6,797
Staples, Inc. 300,000 6,396
-------
23,527
Services - 4.7%
Ecolab, Inc. 140,000 4,530
Fiserv, Inc. (a) 110,000 4,725
Getty Images, Inc. (a) 80,000 5,941
-------
15,196
Telecommunications - 4.6%
Alltel Corp. 85,000 5,294
Comverse Technology, Inc. (a) 200,000 4,730
Sprint Corp. 200,000 5,018
-------
15,042
-------
TOTAL COMMON STOCKS 306,687
Cost: $251,382
<Caption>
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 5.4%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $17,439, collateralized by Federal
Home Loan Mortgage Corp. securities, 4.00%-5.50%,
07/01/18-05/01/33)
Cost: $17,438 17,438 17,438
-------
TOTAL INVESTMENTS - 100.1% 324,125
Cost: $268,820 (c)
</Table>
- -------------------------------------------------------------------------
CORE GROWTH FUND
- -------------------------------------------------------------------------
Percentages indicated are based on net assets of $323,691.
(a) Non-income producing security.
(b) On June 30, 2005, the fund owned the following restricted securities
constituting 0.00% of net assets which may not be publicly sold without
registration under the Securities Act of 1933. These securities are valued at
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 securities is as follows:
Vulcan Power Co., Class A
Acquisition Date: March 3, 1995
Cost: $300
Value: $0
Silvan Power Co.
Acquisition Date: July 27, 2004
Cost: $0
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 $5. Cost for
federal income tax purposes differs from value by net unrealized appreciation of
securities as follows:
<Table>
Unrealized appreciation $58,338
Unrealized depreciation (3,038)
-------
Net unrealized appreciation $55,300
</Table>
ADR - American Depositary Receipt
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
47
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
EMERGING GROWTH FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
COMMON STOCKS - 99.0%
Apparel Manufacturers - 1.0%
Reebok International Ltd. 38,900 1,627
Banks - 1.3%
East West Bancorp, Inc. 63,059 2,118
Biotechnology - 3.3%
Affymetrix, Inc. (a) 50,110 2,702
Gilead Sciences, Inc. (a) 63,200 2,781
-------
5,483
Chemicals - 1.1%
Praxair, Inc. 39,650 1,848
Computers - 7.8%
Apple Computer, Inc. (a) 86,432 3,182
Autodesk, Inc. 62,500 2,148
Corning, Inc. (a) 147,360 2,449
Network Appliance, Inc. (a) 66,500 1,880
Pixar, Inc. (a) 29,010 1,452
Websense, Inc. (a) 37,865 1,819
-------
12,930
Construction - 2.5%
Lafarge North America, Inc. 34,000 2,123
Toll Brothers, Inc. (a) 20,100 2,041
-------
4,164
Electrical Equipment - 1.7%
Fisher Scientific International, Inc. (a) 42,400 2,752
Electronics - 9.3%
Adobe Systems, Inc. 128,050 3,665
Harman International Industries, Inc. 17,780 1,447
International Rectifier Corp. (a) 38,800 1,852
Lam Research Corp. (a) 59,000 1,707
MEMC Electronic Materials, Inc. (a) 139,500 2,200
QLogic Corp. (a) 50,600 1,562
Rockwell Automation, Inc. 26,000 1,266
Trimble Navigation Ltd. (a) 42,340 1,650
-------
15,349
Energy & Utilities - 9.2%
Baker Hughes, Inc. 43,840 2,243
EOG Resources, Inc. 46,400 2,635
Murphy Oil Corp. 38,600 2,016
Newfield Exploration Co. (a) 57,484 2,293
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
EMERGING GROWTH FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
ONEOK, Inc. 54,200 1,770
Patterson-UTI Energy, Inc. 85,200 2,371
Transocean, Inc. (a) 37,700 2,035
-------
15,363
Financial - Diversified - 2.9%
Legg Mason, Inc. 21,000 2,186
Moody's Corp. 56,988 2,562
-------
4,748
Financial Services - 5.2%
Chicago Mercantile Exchange Holdings, Inc. 10,856 3,208
Golden West Financial Corp. 45,080 2,902
T. Rowe Price Group, Inc. 39,555 2,476
-------
8,586
Foods - 3.6%
Bunge Ltd. 47,850 3,033
Hershey Foods Corp. 46,950 2,916
-------
5,949
Healthcare - 11.1%
AMERIGROUP Corp. (a) 42,000 1,688
C.R. Bard, Inc. 34,975 2,326
Cooper Cos., Inc. 43,915 2,674
Intuitive Surgical, Inc. (a) 34,150 1,593
Laboratory Corp. of America Holdings (a) 41,850 2,088
Sierra Health Services, Inc. (a) 50,888 3,637
Triad Hospitals, Inc. (a) 48,300 2,639
Varian Medical Systems, Inc. (a) 50,489 1,885
-------
18,530
Hotels & Motels - 2.2%
Choice Hotels International, Inc. 30,530 2,006
Starwood Hotels & Resorts Worldwide, Inc. 29,300 1,716
-------
3,722
Insurance - 1.1%
W. R. Berkley Corp. 51,525 1,838
Manufacturing - 4.6%
Graco, Inc. 71,906 2,450
Nucor Corp. 32,100 1,464
Oshkosh Truck Corp. 29,284 2,292
Pentair, Inc. 34,000 1,456
-------
7,662
Pharmaceuticals - 1.6%
Barr Pharmaceuticals, Inc. (a) 53,450 2,605
</Table>
SEE FINANCIAL NOTES
48
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
EMERGING GROWTH FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Publishing - 1.1%
John Wiley & Sons, Inc. 44,400 1,764
Railroads - 0.9%
Norfolk Southern Corp. 50,270 1,556
Restaurants - 3.9%
Sonic Corp. (a) 79,615 2,430
Starbucks Corp. (a) 39,000 2,015
YUM! Brands, Inc. 40,302 2,099
-------
6,544
Retail - 9.7%
American Eagle Outfitters, Inc. 56,000 1,716
Claire's Stores, Inc. 101,400 2,439
Coach, Inc. (a) 91,650 3,077
Foot Locker, Inc. 100,246 2,729
Nordstrom, Inc. 60,356 4,103
Whole Foods Market, Inc. 17,950 2,123
-------
16,187
Services - 8.9%
CheckFree Corp. (a) 53,000 1,805
Cognizant Technology Solutions Corp. (a) 68,400 3,224
Corporate Executive Board Co. 51,549 4,037
Dun & Bradstreet Corp. (a) 19,200 1,184
Expeditors International of Washington, Inc. 41,600 2,072
Getty Images, Inc. (a) 32,235 2,394
-------
14,716
Telecommunications - 3.6%
Comverse Technology, Inc. (a) 73,600 1,741
Macromedia, Inc. (a) 48,000 1,835
Nextel Partners, Inc. (a) 94,500 2,378
-------
5,954
Transportation - 1.4%
Landstar System, Inc. (a) 74,480 2,243
-------
TOTAL COMMON STOCKS 164,238
Cost: $133,515
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
EMERGING GROWTH FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 0.3%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $431,
collateralized by Federal Home
Loan Mortgage Corp. security,
5.50%, 05/01/33)
Cost: $431 431 431
-------
TOTAL INVESTMENTS - 99.3% 164,669
Cost: $133,946 (b)
</Table>
Percentages indicated are based on net assets of $165,867.
(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 $15. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<Table>
Unrealized appreciation $33,892
Unrealized depreciation (3,184)
-------
Net unrealized appreciation $30,708
</Table>
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
49
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
SMALL CAP CORE GROWTH FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
COMMON STOCKS - 93.5%
Apparel Manufacturers - 1.9%
Carter's, Inc. (a) 10,000 584
Banks - 2.9%
PrivateBancorp, Inc. 14,000 496
SVB Financial Group (a) 8,000 383
------
879
Computers - 8.5%
Ansys, Inc. (a) 15,760 559
Digital River, Inc. (a) 9,500 302
F5 Networks, Inc. (a) 10,960 518
NETGEAR, Inc. (a) 35,300 656
Websense, Inc. (a) 11,000 529
------
2,564
Educational Services - 2.4%
Bright Horizons Family Solutions, Inc. (a) 18,000 733
Electrical Equipment - 1.9%
Genlyte Group (a) 12,004 585
Electronics - 3.6%
Diodes, Inc. (a) 16,000 499
Trimble Navigation Ltd. (a) 15,000 585
------
1,084
Energy & Utilities - 7.8%
Airgas, Inc. 10,845 268
Cal Dive International, Inc. (a) 9,000 471
Headwaters, Inc. (a) 12,700 437
Hydril (a) 7,000 380
Precision Drilling Corp. (a) 12,500 494
RPC, Inc. 17,400 294
------
2,344
Healthcare - 20.2%
Advanced Medical Optics (a) 10,882 433
American Healthways, Inc. (a) 14,000 592
American Medical Systems Holdings, Inc. (a) 24,006 496
AMERIGROUP Corp. (a) 12,000 482
Centene Corp. (a) 16,000 537
LifePoint Hospitals, Inc. (a) 14,600 737
Quality Systems, Inc. 13,000 616
Respironics, Inc. (a) 16,000 578
Sierra Health Services, Inc. (a) 11,000 785
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
SMALL CAP CORE GROWTH FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Sybron Dental Specialties, Inc. (a) 12,000 451
Ventana Medical Systems, Inc. (a) 8,000 322
------
6,029
Hotels & Motels - 1.7%
Choice Hotels International, Inc. 8,000 526
Insurance - 1.8%
RLI Corp. 12,000 535
Investment Banking & Brokerage - 1.8%
Affiliated Managers Group, Inc. (a) 8,000 547
Manufacturing - 9.0%
Ceradyne, Inc. (a) 11,000 265
Oshkosh Truck Corp. 6,780 531
Roper Industries, Inc. 6,760 482
Silgan Holdings, Inc. 7,500 422
The Manitowoc Co., Inc. 12,900 529
Toro Co. 12,500 483
------
2,712
Multimedia - 1.5%
Witness Systems, Inc. (a) 24,630 449
Personal Care - 4.1%
Chattem, Inc. (a) 16,000 662
Steiner Leisure Ltd. (a) 15,000 556
------
1,218
Restaurants - 3.5%
P.F. Chang's China Bistro, Inc. (a) 8,000 472
Sonic Corp. (a) 19,005 580
------
1,052
Retail - 9.4%
Finish Line, Inc., Class A 25,000 473
Genesco, Inc. (a) 15,000 556
Guitar Center, Inc. (a) 9,650 563
Marinemax, Inc. (a) 12,000 375
Quiksilver, Inc. (a) 24,000 384
The Men's Wearhouse, Inc. (a) 13,500 465
------
2,816
Services - 8.0%
Corporate Executive Board Co. 5,500 431
Labor Ready, Inc. (a) 27,000 630
Mine Safety Appliances 6,500 300
</Table>
SEE FINANCIAL NOTES
50
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
SMALL CAP CORE GROWTH FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Services (continued)
SCP Pool Corp. 14,000 491
Waste Connections, Inc. (a) 15,000 559
------
2,411
Telecommunications - 3.5%
Macromedia, Inc. (a) 17,500 668
NII Holdings, Inc., Class B (a) 6,000 384
------
1,052
------
TOTAL COMMON STOCKS 28,120
Cost: $22,580
</Table>
<Table>
<Caption>
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 7.8%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $2,343,
collateralized by Federal
Home Loan Mortgage Corp. security,
5.50%, 05/01/33)
Cost: $2,343 2,343 2,343
------
TOTAL INVESTMENTS - 101.3% 30,463
Cost: $24,923 (b)
</Table>
Percentages indicated are based on net assets of $30,059.
(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 $10. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<Table>
Unrealized appreciation $5,901
Unrealized depreciation (371)
------
Net unrealized appreciation $5,530
</Table>
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
51
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
VALUE FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
COMMON STOCKS - 99.8%
Air Freight - 2.6%
FedEx Corp. 9,051 733
Apparel Manufacturers - 1.7%
V.F. Corp. 8,359 478
Banks - 3.0%
Bank of America Corp. 12,694 579
Marshall & Ilsley Corp. 6,000 267
------
846
Chemicals - 2.5%
Amgen, Inc. (a) 6,400 387
Praxair, Inc. 6,781 316
------
703
Computers - 5.9%
Hewlett-Packard Co. 14,699 346
International Business Machines Corp. 5,586 414
Microsoft Corp. 15,696 390
Symantec Corp. (a) 22,197 483
------
1,633
Construction - 2.9%
Lafarge North America, Inc. 6,670 417
Standard Pacific Corp. 4,359 383
------
800
Consumer Products - 2.0%
Kimberly-Clark Corp. 9,009 564
Electrical Equipment - 1.0%
Emerson Electric Co. 4,253 266
Electronics - 1.7%
International Rectifier Corp. (a) 10,093 482
Energy & Utilities - 15.7%
AES Corp. (a) 23,955 392
Apache Corp. 7,990 516
Baker Hughes, Inc. 12,870 658
ConocoPhillips 16,878 971
Devon Energy Corp. 9,333 473
ONEOK, Inc. 17,875 584
Patterson-UTI Energy, Inc. 7,900 220
Precision Drilling Corp. (a) 8,810 348
Valero Energy Corp. 2,454 194
------
4,356
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
VALUE FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Financial - Diversified - 8.2%
Capital One Financial Corp. 7,651 612
Lehman Brothers Holdings, Inc. 5,695 565
MetLife, Inc. 10,741 483
Wachovia Corp. 12,362 613
------
2,273
Financial Services - 2.1%
Golden West Financial Corp. 9,235 595
Foods - 2.0%
Bunge Ltd. 8,853 561
Healthcare - 12.1%
Baxter International, Inc. 15,490 575
Becton, Dickinson & Co. 3,399 178
CIGNA Corp. 5,002 535
Johnson & Johnson, Inc. 7,479 486
Pfizer, Inc. 24,760 683
WellPoint, Inc. (a) 12,810 892
------
3,349
Insurance - 5.1%
American International Group, Inc. 4,888 284
The Allstate Corp. 12,352 738
The Hartford Financial Services Group, Inc. 5,397 404
------
1,426
Leisure - 1.5%
Harley-Davidson, Inc. 8,163 405
Manufacturing - 6.3%
3M Co. 5,473 396
Eaton Corp. 6,702 400
Illinois Tool Works, Inc. 3,070 245
Masco Corp. 12,055 383
Nucor Corp. 7,140 326
------
1,750
Personal Care - 2.1%
Avon Products, Inc. 15,760 597
Publishing - 1.1%
The McGraw-Hill Cos., Inc. 6,607 292
Railroads - 1.4%
Norfolk Southern Corp. 12,135 376
Real Estate - 2.9%
General Growth Properties 9,488 390
Simon Property Group, Inc. 5,898 427
------
817
</Table>
SEE FINANCIAL NOTES
52
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
VALUE FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Restaurants - 3.0%
McDonald's Corp. 14,842 412
YUM! Brands, Inc. 8,120 423
------
835
Retail - 6.3%
CVS Corp. 28,970 842
Nordstrom, Inc. 8,446 574
Target Corp. 5,900 321
------
1,737
Telecommunications - 6.7%
Alltel Corp. 4,580 285
Lucent Technologies, Inc. (a) 140,734 410
Motorola, Inc. 28,308 516
Sprint Corp. 10,960 275
Verizon Communications, Inc. 10,646 368
------
1,854
------
TOTAL COMMON STOCKS 27,728
Cost: $24,039
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
VALUE FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 0.0%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $10,
collateralized by Federal Home
Loan Mortgage Corp.
security, 5.50%, 05/01/33)
Cost: $10 10 10
------
TOTAL INVESTMENTS - 99.8% 27,738
Cost: $24,049 (b)
</Table>
Percentages indicated are based on net assets of $27,791.
(a) Represents 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 $130. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<Table>
Unrealized appreciation $3,805
Unrealized depreciation (246)
------
Net unrealized appreciation $3,559
</Table>
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
53
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
GLOBAL EQUITY FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
COMMON STOCKS - 97.1%
Automobile Manufacturing - 4.8%
Bayerische Motoren Werke AG (a) 38,000 1,735
Toyota Motor Co. 12,000 858
Volvo AB 36,000 1,460
------
4,053
Banks - 3.8%
Bank of New York Co., Inc. 45,000 1,295
Royal Bank of Scotland Group plc (a) 25,000 753
UBS AG ADR 15,000 1,168
------
3,216
Biotechnology - 1.9%
Roche Holding AG (a) 12,492 1,575
Broadcasting - 3.2%
Clear Channel Communications, Inc. 37,000 1,144
Viacom, Inc., Class B 50,000 1,601
------
2,745
Computers - 10.1%
First Data Corp. 41,000 1,646
Intel Corp. 59,000 1,538
International Business Machines Corp. 10,000 742
Intuit, Inc. (b) 20,000 902
Microsoft Corp. 98,000 2,434
SAP AG (a) 7,500 1,306
------
8,568
Construction - 1.0%
Fluor Corp. 15,000 864
Consumer Products - 1.1%
Kimberly-Clark ADR 53,000 907
Energy & Utilities - 10.9%
Apache Corp. 32,000 2,067
BG Group plc ADR 42,000 1,747
BP Amoco plc (a) 224,000 2,331
Gold Fields Ltd. ADR 60,000 681
Statoil ASA ADR 50,000 1,015
Valero Energy Corp. 18,000 1,424
------
9,265
Entertainment - 1.9%
Comcast Corp., Class A (b) 53,000 1,587
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
GLOBAL EQUITY FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Financial - Diversified - 13.6%
American Express Co. 16,000 852
Bank of America Corp. 19,000 867
Citigroup, Inc. 52,000 2,403
Deutsche Boerse AG (a) 32,000 2,494
Fannie Mae 12,000 701
HBOS plc (a) 110,000 1,693
HSBC Holdings plc ADR 10,000 797
Mitsubishi Tokyo Financial Group, Inc. (a) 62 524
Mitsubishi Tokyo Financial Group, Inc. ADR 148,000 1,255
------
11,586
Food & Beverages - 3.1%
Nestle SA (a) 5,678 1,452
PepsiCo, Inc. 22,000 1,186
------
2,638
Healthcare - 12.8%
Beckman Coulter, Inc. 25,000 1,589
Boston Scientific Corp. (b) 50,000 1,350
Caremark Rx, Inc. (b) 18,000 801
Eli Lilly & Co. 15,000 836
GlaxoSmithKline plc (a) 95,000 2,294
Novartis AG ADR 35,000 1,660
Pfizer, Inc. 83,000 2,289
------
10,819
Insurance - 2.9%
American International Group, Inc. 14,000 813
ING Groep NV (a) 60,000 1,689
------
2,502
Manufacturing - 6.9%
3M Co. 11,000 795
Komatsu, Ltd. (a) 218,000 1,684
L'Air Liquide ADR 26,000 887
Rexam plc (a) 102,000 878
Tyco International, Ltd. 56,000 1,635
------
5,879
Office Equipment & Supplies - 3.7%
Avery Dennison Corp. 29,000 1,536
Canon, Inc. ADR 30,000 1,579
------
3,115
</Table>
SEE FINANCIAL NOTES
54
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
GLOBAL EQUITY FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Personal Care - 4.3%
Colgate-Palmolive Co. 24,000 1,198
Henkel KGaA ADR 10,000 843
The Estee Lauder Cos., Inc., Class A 41,000 1,604
------
3,645
Restaurants - 1.1%
Wendy's International, Inc. 20,000 953
Retail - 2.4%
Kohl's Corp. (b) 22,000 1,230
Petsmart, Inc. 27,000 819
------
2,049
Services - 0.9%
WPP Group plc (a) 76,000 780
Telecommunications - 6.7%
France Telecom SA ADR 28,000 816
Nippon Telegraph and Telephone Corp. 38,000 816
NTT DoCoMo, Inc. (b) 40,000 792
Verizon Communications, Inc. 46,000 1,589
Vodafone Group plc (a) 670,000 1,629
------
5,642
------
TOTAL COMMON STOCKS 82,388
Cost: $75,889
<Caption>
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 2.5%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $2,152,
collateralized by Federal
Home Loan Mortgage Corp. security,
5.50%, 05/01/33)
Cost: $2,152 2,152 2,152
------
TOTAL INVESTMENTS - 99.6% 84,540
Cost: $78,041 (c)
</Table>
Percentages indicated are based on net assets of $84,840.
(a) Fair valued security. The approximate market value and percentage of
securities that are fair valued for the Global Equity Fund was $22,817
and 26.99%.
(b) Non-income producing security.
(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 of
approximately $222. Cost for federal income tax purposes differs from
value by net unrealized appreciation of securities as follows:
<Table>
Unrealized appreciation $10,481
Unrealized depreciation (4,204)
-------
Net unrealized appreciation $ 6,277
</Table>
ADR - American Depositary Receipt
<Table>
The fund's portfolio holdings as of June 30, 2005, were distributed among
the following countries:
PERCENTAGE OF TOTAL
INVESTMENTS
-------------------------
SHORT TERM
EQUITY & OTHER TOTAL
-------------------------
Bermuda 1.9% 1.9%
France 2.0% 2.0%
Germany 7.5% 7.5%
Israel 0.9% 0.9%
Japan 8.0% 8.0%
Mexico 1.1% 1.1%
Netherlands 2.0% 2.0%
Norway 1.2% 1.2%
South Africa 0.8% 0.8%
Sweden 1.7% 1.7%
Switzerland 5.6% 5.6%
United Kingdom 15.3% 15.3%
United States 49.5% 2.5% 52.0%
----------------------------
TOTAL 97.5% 2.5% 100.0%
</Table>
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
55
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
BALANCED FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
COMMON STOCKS - 63.7%
Air Freight - 0.6%
FedEx Corp. 400 32
Auto Manufacturing - 0.6%
PACCAR, Inc. 450 31
Biotechnology - 0.6%
Gilead Sciences, Inc. (a) 800 35
Chemicals - 1.9%
Amgen, Inc. (a) 750 45
Praxair, Inc. 1,250 59
-----
104
Computers - 4.2%
Automatic Data Processing 1,400 59
Cognos, Inc. (a) 1,400 48
Dell, Inc. (a) 800 32
Network Appliance, Inc. (a) 1,500 42
Symantec Corp. (a) 2,400 52
-----
233
Construction - 1.1%
Pulte Homes, Inc. 750 63
Consumer Products - 0.6%
Black & Decker Corp. 350 31
Electronics - 3.5%
Adobe Systems, Inc. 2,200 63
Rockwell Automation, Inc. 1,500 73
Texas Instruments, Inc. 2,000 56
-----
192
Energy & Utilities - 9.4%
Apache Corp. 1,000 65
BJ Services Co. 500 26
Burlington Resources, Inc. 1,000 55
ConocoPhillips 1,300 75
Equitable Resources, Inc. 1,200 82
Murphy Oil Corp. 1,200 63
Questar Corp. 1,200 79
Valero Energy Corp. 1,000 79
-----
524
Financial - Diversified - 5.1%
Legg Mason, Inc. 900 94
Merrill Lynch & Co., Inc. 750 41
Moody's Corp. 1,600 72
SLM Corp. 1,400 71
-----
278
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
BALANCED FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Financial Services - 2.6%
Franklin Resources, Inc. 1,000 77
Golden West Financial Corp. 1,000 64
-----
141
Foods - 3.2%
General Mills, Inc. 1,200 56
Hershey Foods Corp. 1,100 68
PepsiCo, Inc. 1,000 54
-----
178
Healthcare - 7.7%
Becton, Dickinson & Co. 1,200 63
C.R. Bard, Inc. 1,000 67
Johnson & Johnson, Inc. 1,400 92
St. Jude Medical, Inc. (a) 900 39
UnitedHealth Group, Inc. 1,000 52
WellPoint, Inc. (a) 1,000 70
Zimmer Holdings, Inc. (a) 500 38
-----
421
Hotels & Motels - 1.1%
Marriott International, Inc., Class A 900 61
Insurance - 2.3%
The Allstate Corp. 1,400 83
The Chubb Corp. 500 43
-----
126
Manufacturing - 6.2%
Genuine Parts Co. 900 37
Ingersoll-Rand Co. 500 36
Pentair, Inc. 1,800 77
Precision Castparts Corp. 900 70
Procter & Gamble Co. 600 32
Taiwan Semiconductor ADR 6,300 57
Tyco International, Ltd. 1,000 29
-----
338
Personal Care - 0.5%
Gillette Co. 600 30
Pharmaceuticals - 1.7%
Barr Pharmaceuticals, Inc. (a) 1,000 49
Schering-Plough Corp. 2,200 42
-----
91
Publishing - 0.7%
The McGraw-Hill Cos., Inc. 900 40
Real Estate - 1.2%
Simon Property Group, Inc. 900 65
</Table>
SEE FINANCIAL NOTES
56
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
BALANCED FUND
SECURITY SHARES VALUE($)
- -------------------------------------------------------------------------
Retail - 3.7%
CVS Corp. 3,000 87
Nordstrom, Inc. 1,000 68
Staples, Inc. 2,200 47
-----
202
Services - 2.4%
Ecolab, Inc. 1,250 40
Fiserv, Inc. (a) 800 34
Getty Images, Inc. (a) 800 60
-----
134
Telecommunications - 2.8%
Alltel Corp. 700 44
Comverse Technology, Inc. (a) 2,400 57
Sprint Corp. 2,000 50
-----
151
-----
TOTAL COMMON STOCKS 3,501
Cost: $3,092
<Caption>
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.7%
First Horizon Alternative Mortgage Securities
4.81%, 06/25/34 (b) 17 17
5.50%, 03/25/35 (b) 23 23
-----
Cost: $40 40
CORPORATE BONDS - 6.4%
Broadcasting - 0.2%
Liberty Media Corp., 8.50%, 07/15/29 10 10
Computers - 0.3%
Corning, Inc., 6.20%, 03/15/16 15 16
Construction - 0.5%
KB Home, 5.88%, 01/15/15 15 15
Pulte Homes, Inc., 6.00%, 02/15/35 10 10
-----
25
Energy & Utilities - 1.4%
Atmos Energy, 4.95%, 10/15/14 15 15
Chesapeake Energy Corp., 6.88%, 01/15/16 20 21
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
BALANCED FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
Enterprise Products Partners LP, 4.95%,
06/01/10 20 20
XTO Energy, Inc., 5.30%, 06/30/15 20 20
-----
76
Financial - Diversified - 1.9%
Citigroup, Inc., 3.42%, 05/18/10 50 51
Liberty Mutual Group, 5.75%, 03/15/14 (c) 10 10
Riddell Bell Holdings, 8.38%, 10/01/12 (c) 15 15
SLM Corp., 3.63%, 03/17/08 35 34
-----
110
Healthcare - 0.3%
Community Health Systems, 6.50%, 12/15/12 (c) 15 15
Investment Banking & Brokerage - 0.3%
The Goldman Sachs Group, Inc., 5.00%,
10/01/14 15 15
Manufacturing - 0.1%
American Standard, Inc., 7.38%, 02/01/08 5 5
Office Equipment & Supplies - 0.3%
Xerox Corp., 6.88%, 08/15/11 15 16
Real Estate - 0.1%
Brandywine Realty Trust, 5.40%, 11/01/14 5 5
Restaurants - 0.1%
Dominos, Inc., 8.25%, 07/01/11 7 7
Telecommunications - 0.9%
Directv Holdings, 6.38%, 06/15/15 (c) 30 30
Nextel Communications, Inc.,
5.95%, 03/15/14 10 10
7.38%, 08/01/15 10 11
-----
51
-----
TOTAL CORPORATE BONDS 351
Cost: $351
</Table>
SEE FINANCIAL NOTES
57
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
BALANCED FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
FOREIGN GOVERNMENT BONDS - 0.3%
United Mexican States, 6.75%, 09/27/34 15 16
Cost: $15
U.S. GOVERNMENT AGENCY OBLIGATIONS - 12.6%
Federal Home Loan Bank - 3.0%
4.28%, 11/05/07 100 101
4.10%, 06/13/08 20 20
3.38%, 07/21/08 30 29
5.20%, 05/11/12 15 15
-----
165
Federal Home Loan Mortgage Corporation - 5.0%
2.88%, 09/15/05 3 3
3.25%, 11/02/07 15 15
3.25%, 02/25/08 4 4
4.55%, 01/20/11 5 5
4.50%, 01/15/13 9 9
5.50%, 10/01/18 75 77
5.20%, 03/05/19 40 41
5.50%, 08/20/19 20 20
5.00%, 06/01/35 100 100
-----
274
Federal National Mortgage Association - 4.6%
3.25%, 01/15/08 9 9
5.25%, 01/15/09 14 15
6.38%, 06/15/09 3 3
4.13%, 05/15/10 20 20
6.00%, 05/10/12 25 26
4.38%, 09/15/12 4 4
5.00%, 04/15/15 20 21
5.00%, 09/01/19 45 46
6.50%, 07/01/32 3 3
6.00%, 11/01/32 3 3
5.50%, 03/01/33 33 33
4.58%, 12/01/34 41 40
4.91%, 01/01/35 28 28
-----
251
-----
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 690
Cost: $690
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
BALANCED FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
U.S. TREASURY NOTES - 8.7%
6.50%, 02/15/10 100 112
4.00%, 03/15/10 100 101
3.88%, 05/15/10 35 35
4.75%, 05/15/14 10 11
4.00%, 02/15/15 100 100
5.38%, 02/15/31 100 118
-----
Cost: $458 477
REPURCHASE AGREEMENTS - 7.3%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $399,
collateralized by Federal Home
Loan Mortgage Corp. security,
4.00%, 07/01/18)
Cost: $399 399 399
-----
TOTAL INVESTMENTS - 99.7% 5,474
Cost: $5,045 (d)
</Table>
Percentages indicated are based on net assets of $5,491.
(a) Non-income producing security.
(b) Variable rate security. The rate presented represents the rate in effect on
June 30, 2005.
(c) Rule 144A security.
(d) 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 $3. Cost for
federal income tax purposes differs from value by net unrealized appreciation of
securities as follows:
<Table>
Unrealized appreciation $ 479
Unrealized depreciation (53)
------
Net unrealized appreciation $ 426
</Table>
ADR - American Depositary Receipt
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
58
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
INCOME FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 3.9%
First Horizon Alternative Mortgage Securities
4.81%, 06/25/34 (a) 1,329 1,319
5.50%, 03/25/35 (a) 897 908
------
Cost: $2,263 2,227
CORPORATE BONDS - 32.9%
Broadcasting - 0.9%
Liberty Media Corp.,
8.50%, 07/15/29 490 495
Computers - 1.8%
Corning, Inc.,
6.20%, 03/15/16 985 1,028
Construction - 2.6%
KB Home, 5.88%, 01/15/15 985 977
Pulte Homes, Inc.,
6.00%, 02/15/35 490 477
------
1,454
Electrical Equipment - 1.8%
Flextronics International, Ltd., 6.50%,
05/15/13 (b) 1,000 1,035
Energy & Utilities - 6.1%
Atmos Energy,
4.95%, 10/15/14 985 983
Chesapeake Energy Corp., 6.88%, 01/15/16 980 1,023
Enterprise Products Partners LP, 4.95%,
06/01/10 480 482
XTO Energy, Inc.,
5.30%, 06/30/15 980 999
------
3,487
Financial - Diversified - 4.3%
Citigroup, Inc.,
3.42%, 05/18/10 500 500
Liberty Mutual Group,
5.75%, 03/15/14 (b) 990 997
Riddell Bell Holdings,
8.38%, 10/01/12 (b) 985 987
------
2,484
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
INCOME FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
Healthcare - 1.8%
Community Health Systems, 6.50%, 12/15/12 (b) 985 1,002
Investment Banking & Brokerage - 1.8%
The Goldman Sachs Group, Inc.,
5.00%, 10/01/14 985 996
Manufacturing - 1.9%
American Standard, Inc., 7.38%, 02/01/08 995 1,059
Office Equipment & Supplies - 1.8%
Xerox Corp., 6.88%, 08/15/11 985 1,044
Pharmaceuticals - 1.9%
AmerisourceBergen Corp., 8.13%, 09/01/08 1,000 1,085
Real Estate - 0.9%
Brandywine Realty Trust, 5.40%, 11/01/14 495 498
Restaurants - 1.4%
Dominos, Inc.,
8.25%, 07/01/11 722 769
Telecommunications - 3.9%
Directv Holdings,
6.38%, 06/15/15 (b) 620 617
Nextel Communications, Inc.
5.95%, 03/15/14 490 509
7.38%, 08/01/15 990 1,069
------
2,195
------
TOTAL CORPORATE BONDS 18,631
Cost: $18,363
FOREIGN GOVERNMENT BONDS - 1.8%
United Mexican States,
6.75%, 09/27/34 985 1,044
Cost: $970
U.S. GOVERNMENT AGENCY OBLIGATIONS - 41.4%
Federal Home Loan Bank - 2.7%
4.10%, 06/13/08 500 499
5.20%, 05/11/12 985 1,001
------
1,500
</Table>
SEE FINANCIAL NOTES
59
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
INCOME FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation - 16.4%
3.25%, 11/02/07 985 971
4.55%, 01/20/11 495 497
4.00%, 06/15/13 2,230 2,226
6.25%, 11/14/13 1,000 1,009
5.50%, 10/01/18 1,532 1,573
5.20%, 03/05/19 1,960 1,990
5.50%, 08/20/19 980 995
------
9,261
Federal National Mortgage Association - 22.3%
4.13%, 05/15/10 480 483
6.00%, 05/10/12 975 1,008
5.00%, 04/15/15 980 1,035
5.00%, 09/01/19 1,795 1,816
4.58%, 12/01/34 1,986 1,977
4.91%, 01/01/35 2,287 2,316
6.00%, 04/01/35 3,872 3,970
------
12,605
------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 23,366
Cost: $23,428
U.S. TREASURY NOTES - 15.3%
4.00%, 04/15/10 2,000 2,022
3.88%, 05/15/10 1,465 1,473
4.75%, 05/15/14 990 1,050
4.00%, 02/15/15 2,500 2,509
4.13%, 05/15/15 1,000 1,015
5.38%, 02/15/31 500 590
------
Cost: $8,483 8,659
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
INCOME FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 3.6%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $2,019,
collateralized by Federal
Home Loan Mortgage Corp. security,
5.50%, 05/01/33)
Cost: $2,019 2,019 2,019
------
TOTAL INVESTMENTS - 98.9% 55,946
Cost: $55,526 (c)
</Table>
Percentages indicated are based on net assets of $56,597.
(a) Variable rate security. The rate presented represents the rate in effect on
June 30, 2005.
(b) Rule 144A security.
(c) Represents cost for financial reporting purposes and federal income tax
purposes and differs from value by net unrealized appreciation of securities as
follows:
<Table>
Unrealized appreciation $ 706
Unrealized depreciation (286)
------
Net unrealized appreciation $ 420
</Table>
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
60
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
ULTRA SHORT BOND FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
CORPORATE BONDS - 54.2%
Automotive Finance - 23.7%
American Honda Finance, 3.44%,
08/15/06 (a)(b) 350 351
BMW Vehicle Owner Trust, 1.94%, 02/25/07 68 68
Chase Manhattan Auto Owner Trust, 3.87%,
06/15/09 250 250
GS Auto Loan Trust,
2.08%, 04/16/07 89 89
Harley-Davidson Motorcycle Trust,
1.34%, 01/15/08 17 17
3.56%, 02/15/12 200 198
Honda Auto Receivables Owner Trust,
2.16%, 10/21/08 200 196
Toyota Auto Receivables Owner Trust,
1.69%, 03/15/07 95 94
4.39%, 05/15/09 77 77
USAA Auto Owner Trust,
1.58%, 6/15/07 114 113
Volkswagon Credit, Inc.,
3.40%, 07/21/05(a) 250 250
-----
1,703
Banks - 1.4%
Bank of America Corp., 4.75%, 10/15/06 100 101
Broadcasting - 2.9%
TCI Communications,
8.00%, 08/01/05 210 211
Financial - Diversified - 21.3%
American Express Co.,
3.40%, 09/19/06 (a) 300 300
American General Finance, 3.00%, 11/15/06 250 246
CIT Group, Inc.,
3.66%, 09/20/07 (a) 250 250
Citigroup, Inc.,
3.42%, 05/18/10 200 200
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
ULTRA SHORT BOND FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
Merrill Lynch & Co.,
4.25%, 02/08/10 (a) 140 140
Nelnet Student Loan Trust,
3.13%, 06/22/11 (a) 200 200
SLM Corp., 3.63%, 03/17/08 200 197
-----
1,533
Insurance - 3.5%
Met Life Global Funding, 3.47%,
08/28/06 (a)(b) 250 250
Telecommunications - 1.4%
Chesapeake (Bell Atlantic Virginia), 6.13%,
07/15/05 100 100
-----
TOTAL CORPORATE BONDS 3,898
Cost: $3,911
U.S. GOVERNMENT AGENCY OBLIGATIONS - 19.4%
Federal Home Loan Bank - 4.9%
4.28%, 11/05/07 150 150
4.10%, 06/13/08 200 200
-----
350
Federal Home Loan Mortgage Corporation - 4.1%
5.83%, 02/09/06 100 101
3.25%, 11/02/07 200 197
-----
298
Federal National Mortgage Association - 6.9%
1.75%, 11/29/05 250 249
3.00%, 12/15/06 250 247
-----
496
Student Loan Marketing Association - 3.5%
3.19%, 10/25/08 (a) 250 250
-----
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 1,394
Cost: $1,401
U.S. TREASURY NOTES - 4.1%
2.50%, 05/31/06 200 198
3.63%, 04/30/07 100 100
-----
Cost: $298 298
</Table>
SEE FINANCIAL NOTES
61
CITIZENS FUNDS HOLDINGS
<Table>
<Caption>
- -------------------------------------------------------------------------
ULTRA SHORT BOND FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 27.0%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $1,944,
collateralized by Federal
Home Loan Mortgage Corp. security,
5.50%, 05/01/33)
Cost: $1,943 1,943 1,943
-----
TOTAL INVESTMENTS - 104.7% 7,533
Cost: $7,553 (c)
</Table>
Percentages indicated are based on net assets of $7,198.
(a) Variable rate security. The rate presented represents the rate in effect on
June 30, 2005.
(b) Rule 144A security.
(c) Represents cost for financial reporting purposes and federal income tax
purposes and differs from value by net unrealized depreciation of securities as
follows:
<Table>
Unrealized appreciation $ 3
Unrealized depreciation (23)
------
Net unrealized depreciation $ (20)
</Table>
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
62
JUNE 30, 2005 ($ X 1,000)
<Table>
<Caption>
- -------------------------------------------------------------------------
MONEY MARKET FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 12.5%
City National Bank of New Jersey, 3.23%,
09/13/05 (a) 100 100
First Tennessee Bank, 3.33%, 09/12/05 4,000 4,001
Mercantile Safe Deposit and Trust, 3.21%,
12/12/05 (b) 4,000 4,000
Self Help Credit Union, 3.23%, 09/13/05 (a) 100 100
Toronto Dominion, 3.52%, 12/29/05 3,000 3,000
------
TOTAL CERTIFICATES OF DEPOSIT 11,201
Cost: $11,201
COMMERCIAL PAPER - 75.7%
American Express Credit, 3.14%, 07/26/05 4,000 3,991
American General Finance Corp.,
3.25%, 07/01/05 4,000 4,000
Banco Santander Puerto Rico, 3.11%, 07/06/05 4,000 3,998
Bank of America, 3.31%, 08/15/05 4,000 3,984
Blue Ridge Asset Funding, 3.11%, 07/29/05 (c) 3,930 3,921
Charta Corp., 3.10%, 07/15/05 4,000 3,995
Coca Cola Co., 3.07%, 07/21/05 4,000 3,993
Cooperative Association of Tractor Dealers,
2.94%, 07/15/05 2,000 1,998
3.13%, 08/16/05 2,000 1,992
3.33%, 09/19/05 2,000 1,985
3.49%, 11/22/05 2,000 1,973
Fountain Square, 3.13%, 07/29/05 (c) 4,000 3,990
Galaxy Funding, Inc., 3.39%, 09/21/05 (c) 4,000 3,969
Goldman Sachs, 3.11%, 07/11/05 4,000 3,997
HSBC ECN, 3.13%, 07/05/05 3,996 3,995
ING America Insurance, 3.25%, 09/01/05 4,000 3,978
</Table>
<Table>
<Caption>
- -------------------------------------------------------------------------
MONEY MARKET FUND
SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($)
- -------------------------------------------------------------------------
Mid States Federal Credit Union Corp., 3.17%,
07/14/05 4,000 3,995
Procter & Gamble, 3.22%, 08/24/05 4,000 3,981
UBS Finance Corp., 3.39%, 07/01/05 4,000 4,000
------
TOTAL COMMERCIAL PAPER 67,735
Cost: $67,735
MUNICIPAL NOTES - 3.9%
New York State Housing Finance Agency, 3.32%,
11/15/29 (b) 3,500 3,500
Cost: $3,500
U.S. GOVERNMENT AGENCY OBLIGATIONS - 4.7%
Federal National Mortgage Association, 3.03%,
07/18/05 4,200 4,194
Cost: $4,194
REPURCHASE AGREEMENTS - 1.1%
Fifth Third Bank, Inc., 2.50%, 07/01/05
(Proceeds at maturity $971, collateralized by Federal Home
Loan Mortgage Corp. security, 5.50%, 05/01/33)
Cost: $971 971 971
------
TOTAL INVESTMENTS - 97.9% 87,601
Cost: $87,601 (d)
</Table>
Percentages indicated are based on net assets of $89,487.
(a) Restricted security which may not be publicly sold without registration
under the Securities Act of 1933.
(b) Variable rate security. The rate presented represents the rate in effect on
June 30, 2005.
(c) Rule 144A security.
(d) Represents cost and value for financial reporting and federal income tax
purposes.
- --------------------------------------------------------------------------------
SEE FINANCIAL NOTES
63
STATEMENTS OF ASSETS AND LIABILITIES
<Table>
<Caption>
300 Core Growth Emerging Growth
Fund Fund Fund
- ----------------------------------------------------------------------------------------------
ASSETS
Investments, at value $6,286,232 $306,687,195 $ 164,238,054
Repurchase agreements 22,526 17,438,266 430,836
-------------------------------------------
Total investments 6,308,758 324,125,461 164,668,890
Cash -- -- --
Foreign currency -- -- --
Receivables:
Interest and dividends 3,842 283,963 44,672
Investments sold -- -- 4,339,825
Tax reclaims -- -- --
Capital shares issued -- 59,190 80,359
Due from investment adviser 1,022 -- --
Prepaid expenses 7,021 18,971 15,418
-------------------------------------------
Total assets 6,320,643 324,487,585 169,149,164
LIABILITIES
Payables:
Dividends to shareholders -- -- --
Investments purchased 22,157 -- 2,893,133
Capital shares redeemed 102 343,791 89,402
Investment management fees 555 67,017 68,691
Administrative fees 416 20,105 10,304
Shareholder service fees 117 13,184 4,703
Distribution fees 694 29,040 16,902
Other accrued expenses 6,975 323,504 199,425
-------------------------------------------
Total liabilities 31,016 796,641 3,282,560
- ----------------------------------------------------------------------------------------------
NET ASSETS $6,289,627 $323,690,944 $ 165,866,604
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
NET ASSETS
Standard Shares:
Net assets $6,289,627 $278,940,457 $ 157,963,434
Number of shares outstanding 557,956 14,147,598 11,206,618
Net asset value, offering and redemption price
per share $ 11.27 $ 19.72 $ 14.10
Institutional Shares:
Net assets -- $ 43,083,001 $ 2,632,870
Number of shares outstanding -- 2,619,216 180,087
Net asset value, offering and redemption price
per share -- $ 16.45 $ 14.62
Administrative Shares:
Net assets -- $ 1,667,486 $ 5,270,300
Number of shares outstanding -- 82,685 366,675
Net asset value, offering and redemption price
per share -- $ 20.17 $ 14.37
Net assets consist of:
Paid-in capital $5,793,016 $341,833,580 $ 325,452,010
Accumulated net investment income/loss 24,904 -- --
Accumulated net realized gains/losses on
investments and foreign currencies 20,589 (73,448,013) (190,308,639)
Net unrealized appreciation/depreciation on
investments and foreign currencies 451,118 55,305,377 30,723,233
- ----------------------------------------------------------------------------------------------
NET ASSETS $6,289,627 $323,690,944 $ 165,866,604
- ----------------------------------------------------------------------------------------------
Investments, at cost $5,857,640 $268,820,084 $ 133,945,657
Foreign currency, at cost -- -- --
</Table>
SEE FINANCIAL NOTES
64
AS OF JUNE 30, 2005
<Table>
<Caption>
Small Cap Core Value Global Equity Balanced Income Ultra Short Money Market
Growth Fund Fund Fund Fund Fund Bond Fund Fund
- --------------------------------------------------------------------------------------------------------
$28,120,469 $27,728,145 $ 82,387,731 $5,075,252 $53,927,637 $5,590,025 $86,630,001
2,342,887 10,013 2,152,300 398,661 2,018,832 1,943,471 971,018
- --------------------------------------------------------------------------------------------------------
30,463,356 27,738,158 84,540,031 5,473,913 55,946,469 7,533,496 87,601,019
-- -- -- -- -- -- 1,783,503
-- -- 109,467 -- -- -- --
2,833 16,670 120,918 21,764 628,602 32,212 31,374
487,906 2,944,287 -- -- -- -- --
-- -- 97,078 -- -- -- --
90,027 63,592 185,713 -- 121,109 4,500 383,730
-- -- -- 3,173 -- 3,683 --
6,227 4,899 15,859 5,701 6,319 5,337 13,028
- --------------------------------------------------------------------------------------------------------
31,050,349 30,767,606 85,069,066 5,504,551 56,702,499 7,579,228 89,812,654
-- -- -- 374 16,075 3,113 3,878
941,413 2,929,645 -- -- -- -- --
4,524 2,838 68,873 3,165 7,042 367,841 199,734
6,113 7,964 35,329 1,437 15,070 1,105 12,857
1,834 1,707 5,299 332 3,478 473 5,510
748 682 2,337 163 -- 134 2,115
3,057 2,844 8,534 553 5,796 789 --
33,588 31,029 108,692 7,067 58,250 7,484 101,706
- --------------------------------------------------------------------------------------------------------
991,277 2,976,709 229,064 13,091 105,711 380,939 325,800
- --------------------------------------------------------------------------------------------------------
$30,059,072 $27,790,897 $ 84,840,002 $5,491,460 $56,596,788 $7,198,289 $89,486,854
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
$30,059,072 $27,790,897 $ 80,383,695 $5,491,460 $56,596,788 $7,198,289 $76,724,268
2,732,825 2,395,529 5,066,963 462,677 5,658,426 727,077 76,823,388
$ 11.00 $ 11.60 $ 15.86 $ 11.87 $ 10.00 $ 9.90 $ 1.00
-- -- $ 2,890,599 -- -- -- $12,762,586
-- -- 176,347 -- -- -- 12,768,051
-- -- $ 16.39 -- -- -- $ 1.00
-- -- $ 1,565,708 -- -- -- --
-- -- 97,206 -- -- -- --
-- -- $ 16.11 -- -- -- --
$27,480,649 $32,028,344 $ 203,631,401 $5,141,612 $61,421,431 $7,320,363 89,525,388
-- -- (13,609) (1) 1 (297) --
(2,961,593) (7,927,034) (125,275,415) (79,206) (5,244,790) (102,220) (38,534)
5,540,016 3,689,587 6,497,625 429,055 420,146 (19,557) --
- --------------------------------------------------------------------------------------------------------
$30,059,072 $27,790,897 $ 84,840,002 $5,491,460 $56,596,788 $7,198,289 $89,486,854
- --------------------------------------------------------------------------------------------------------
$24,923,340 $24,048,571 $ 78,041,351 $5,044,858 $55,526,323 $7,553,053 $87,601,019
-- -- 114,686 -- -- -- --
</Table>
SEE FINANCIAL NOTES
65
STATEMENTS OF OPERATIONS
<Table>
<Caption>
300 Core Growth Emerging Growth
Fund Fund Fund
- ----------------------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 438 $ 240,045 $ 49,812
Dividend (1) 107,331 3,722,980 881,932
- ----------------------------------------------------------------------------------------------
Total investment income 107,769 3,963,025 931,744
EXPENSES
Investment management fees 13,729 1,621,821 1,668,693
Administrative fees 10,297 486,549 250,304
Distribution fees:
Standard shares 17,161 698,833 393,705
Administrative shares -- 3,983 16,280
Shareholder service fees:
Standard shares 2,206 708,924 116,496
Institutional shares -- 904 113
Administrative shares -- 116 187
Transfer agent expenses:
Standard shares 7,834 701,510 508,878
Institutional shares -- 3,474 365
Administrative shares -- 1,441 4,811
Accounting expenses 12,209 124,784 71,319
Custody expenses 5,915 13,193 8,272
Registration expenses 18,023 36,087 34,413
Trustee expenses 1,468 69,939 36,154
Other expenses 6,511 218,352 127,278
- ----------------------------------------------------------------------------------------------
Total expenses before reimbursements, waivers, or
expenses paid indirectly 95,353 4,689,910 3,237,268
Reimbursements or waivers from adviser (33,585) -- --
Expenses paid indirectly -- (18,354) (19,421)
- ----------------------------------------------------------------------------------------------
Net expenses 61,768 4,671,556 3,217,847
- ----------------------------------------------------------------------------------------------
NET INVESTMENT INCOME/LOSS $ 46,001 $ (708,531) $(2,286,103)
REALIZED AND UNREALIZED GAINS/LOSSES ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Realized gains/losses on investments and foreign
currency transactions $ 34,659 $13,066,631 $(2,034,432)
Change in unrealized appreciation/depreciation on
investments and foreign currencies 61,219 15,286,460 17,191,037
- ----------------------------------------------------------------------------------------------
Net realized and unrealized gains/losses on
investments and foreign currencies 95,878 28,353,091 15,156,605
CHANGE IN NET ASSETS FROM OPERATIONS $141,879 $27,644,560 $12,870,502
(1) Dividend income net of withholding taxes. For the year ended June 30,
2005, withholding taxes for the Global Equity Fund were $61,325.
</Table>
SEE FINANCIAL NOTES
66
FOR THE YEAR ENDED JUNE 30, 2005
<Table>
<Caption>
Small Cap Core Value Global Equity Balanced Income Ultra Short Money Market
Growth Fund Fund Fund Fund Fund Bond Fund Fund
- ----------------------------------------------------------------------------------------------------
$ 26,102 $ 8,184 $ 46,272 $ 52,011 $2,915,255 $163,898 $2,010,798
92,887 389,945 1,950,661 38,068 52,167 4,074 --
- ----------------------------------------------------------------------------------------------------
118,989 398,129 1,996,933 90,079 2,967,422 167,972 2,010,798
139,786 175,152 920,249 24,691 375,312 24,276 320,729
41,936 37,533 138,037 5,698 86,611 10,404 137,456
69,893 62,554 217,324 9,496 144,351 17,340 --
-- -- 4,679 -- -- -- --
18,465 17,074 56,093 3,609 30,138 2,977 50,961
-- -- 77 -- -- -- 472
-- -- 82 -- -- -- --
86,687 78,000 309,554 11,563 121,491 12,860 213,290
-- -- 356 -- -- -- 1,667
-- -- 1,884 -- -- -- --
15,105 12,322 56,934 9,196 26,661 7,111 34,773
4,974 5,549 17,593 6,134 3,909 4,920 8,701
16,114 14,614 33,571 14,275 16,736 14,142 29,541
6,030 5,392 19,973 772 12,381 1,432 19,497
22,437 18,115 79,502 3,070 38,194 5,025 58,788
- ----------------------------------------------------------------------------------------------------
421,427 426,305 1,855,908 88,504 855,784 100,487 875,875
-- -- -- (39,026) -- (90,637) --
(2,129) -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------
419,298 426,305 1,855,908 49,478 855,784 9,850 875,875
- ----------------------------------------------------------------------------------------------------
$ (300,309) $ (28,176) $ 141,025 $ 40,601 $2,111,638 $158,122 $1,134,923
$(2,896,785) $1,338,604 $ 6,000,124 $(77,836) $ 352,980 $ (6,647) $ (29,451)
4,753,730 1,273,049 (2,235,549) 350,600 552,719 3,430 --
- ----------------------------------------------------------------------------------------------------
1,856,945 2,611,653 3,764,575 272,764 905,699 (3,217) (29,451)
$ 1,556,636 $2,583,477 $ 3,905,600 $313,365 $3,017,337 $154,905 $1,105,472
</Table>
SEE FINANCIAL NOTES
67
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
300 FUND CORE GROWTH FUND
- ------------------------------------------------------------------------------------------------
For the For the period For the For the
year ended 08/29/03 (1)- year ended year ended
06/30/05 06/30/04 06/30/05 06/30/04
- ------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income/loss $ 46,001 $ 15,226 $ (708,531) $ (1,924,176)
Realized gains/losses on investments 34,659 10,201 13,066,631 43,684,981
Change in unrealized appreciation/
depreciation on investments 61,219 389,899 15,286,460 (6,189,966)
- ------------------------------------------------------------------------------------------------
Change in net assets from operations 141,879 415,326 27,644,560 35,570,839
Dividends to Shareholders:
From net investment income:
Standard Shares (34,591) (4,055) -- --
From net realized gains on
investments:
Standard Shares (24,271) -- -- --
- ------------------------------------------------------------------------------------------------
Total dividends (58,862) (4,055) -- --
Change in net assets from capital
transactions (642,155) 6,437,494 (48,783,373) (42,077,189)
CHANGE IN NET ASSETS $ (559,138) $6,848,765 $(21,138,813) $ (6,506,350)
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period $ 6,848,765 -- $344,829,757 $351,336,107
End of period $ 6,289,627 $6,848,765 $323,690,944 $344,829,757
- ------------------------------------------------------------------------------------------------
Accumulated net investment
income/loss $ 24,904 $ 13,494 -- --
- ------------------------------------------------------------------------------------------------
CAPITAL TRANSACTIONS
Standard Shares
Proceeds from shares issued $ 2,053,618 $6,674,799 $ 13,543,217 $ 21,264,741
Dividends reinvested 58,104 4,044 -- --
Cost of shares redeemed (2,753,877) (241,349) (48,788,003) (44,917,887)
----------------------------------------------------------
Net change (642,155) 6,437,494 (35,244,786) (23,653,146)
----------------------------------------------------------
Institutional Shares
Proceeds from shares issued -- -- $ 18,399,176 $ 23,690,276
Cost of shares redeemed -- -- (31,826,203) (41,119,985)
----------------------------------------------------------
Net change -- -- (13,427,027) (17,429,709)
----------------------------------------------------------
Administrative Shares
Proceeds from shares issued -- -- $ 426,879 $ 733,629
Cost of shares redeemed -- -- (538,439) (1,727,963)
----------------------------------------------------------
Net change -- -- (111,560) (994,334)
----------------------------------------------------------
CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS $ (642,155) $6,437,494 $(48,783,373) $(42,077,189)
- ------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS
Standard Shares
Issued 185,089 635,272 728,440 1,188,913
Reinvested 5,039 374 -- --
Redeemed (246,122) (21,696) (2,622,290) (2,501,662)
----------------------------------------------------------
Net change (55,994) 613,950 (1,893,850) (1,312,749)
----------------------------------------------------------
Institutional Shares
Issued -- -- 1,176,634 1,616,753
Redeemed -- -- (2,082,889) (2,794,779)
----------------------------------------------------------
Net change -- -- (906,255) (1,178,026)
----------------------------------------------------------
Administrative Shares
Issued -- -- 22,427 40,193
Redeemed -- -- (28,441) (96,922)
----------------------------------------------------------
Net change -- -- (6,014) (56,729)
----------------------------------------------------------
CHANGE IN SHARES FROM SHARE
TRANSACTIONS (55,994) 613,950 (2,806,119) (2,547,504)
- ------------------------------------------------------------------------------------------------
</Table>
(1) Commencement of operations.
SEE FINANCIAL NOTES
68
<Table>
<Caption>
EMERGING GROWTH FUND SMALL CAP CORE GROWTH FUND VALUE FUND
- ---------------------------------------------------------------------------------------
For the For the For the For the For the For the
year ended year ended year ended year ended year ended year ended
06/30/05 06/30/04 06/30/05 06/30/04 06/30/05 06/30/04
- ---------------------------------------------------------------------------------------
$ (2,286,103) $ (2,665,962) $ (300,309) $ (346,285) $ (28,176) $ (47,170)
(2,034,432) 37,477,874 (2,896,785) 6,022,751 1,338,604 2,404,710
17,191,037 (3,529,402) 4,753,730 (1,011,664) 1,273,049 1,384,533
- ---------------------------------------------------------------------------------------
12,870,502 31,282,510 1,556,636 4,664,802 2,583,477 3,742,073
-- -- -- -- -- --
-- -- (1,298,737) -- -- --
- ---------------------------------------------------------------------------------------
-- -- (1,298,737) -- -- --
(27,903,648) (22,233,586) 99,867 7,215,282 1,336,365 3,902,663
$(15,033,146) $ 9,048,924 $ 357,766 $11,880,084 $ 3,919,842 $ 7,644,736
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
$180,899,750 $171,850,826 $29,701,306 $17,821,222 $23,871,055 $16,226,319
$165,866,604 $180,899,750 $30,059,072 $29,701,306 $27,790,897 $23,871,055
- ---------------------------------------------------------------------------------------
-- -- -- -- -- --
- ---------------------------------------------------------------------------------------
$ 13,949,825 $ 21,134,996 $ 7,867,590 $13,121,654 $ 8,531,488 $ 8,784,600
-- -- 1,265,634 -- -- --
(34,269,158) (41,911,039) (9,033,357) (5,906,372) (7,195,123) (4,881,937)
- ---------------------------------------------------------------------------------------
(20,319,333) (20,776,043) 99,867 7,215,282 1,336,365 3,902,663
- ---------------------------------------------------------------------------------------
$ 559,501 $ 1,239,421 -- -- -- --
(1,710,905) (4,008,407) -- -- -- --
- ---------------------------------------------------------------------------------------
(1,151,404) (2,768,986) -- -- -- --
- ---------------------------------------------------------------------------------------
$ 890,326 $ 6,512,533 -- -- -- --
(7,323,237) (5,201,090) -- -- -- --
- ---------------------------------------------------------------------------------------
(6,432,911) 1,311,443 -- -- -- --
- ---------------------------------------------------------------------------------------
$(27,903,648) $(22,233,586) $ 99,867 $ 7,215,282 $ 1,336,365 $ 3,902,663
- ---------------------------------------------------------------------------------------
1,059,522 1,702,236 750,734 1,247,393 795,995 888,579
-- -- 117,843 -- -- --
(2,599,019) (3,358,592) (876,978) (561,227) (671,471) (495,734)
- ---------------------------------------------------------------------------------------
(1,539,497) (1,656,356) (8,401) 686,166 124,524 392,845
- ---------------------------------------------------------------------------------------
41,357 96,116 -- -- -- --
(124,903) (311,449) -- -- -- --
- ---------------------------------------------------------------------------------------
(83,546) (215,333) -- -- -- --
- ---------------------------------------------------------------------------------------
67,524 517,457 -- -- -- --
(576,879) (412,025) -- -- -- --
- ---------------------------------------------------------------------------------------
(509,355) 105,432 -- -- -- --
- ---------------------------------------------------------------------------------------
(2,132,398) (1,766,257) (8,401) 686,166 124,524 392,845
- ---------------------------------------------------------------------------------------
</Table>
SEE FINANCIAL NOTES
69
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
GLOBAL EQUITY FUND BALANCED FUND
- ----------------------------------------------------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
06/30/05 06/30/04 06/30/05 06/30/04
- ----------------------------------------------------------------------------------------------
OPERATIONS
Net investment income/loss $ 141,025 $ (681,388) $ 40,601 $ 10,304
Realized gains/losses on investments
and foreign currency transactions 6,000,124 476,043 (77,836) 80,597
Change in unrealized appreciation/
depreciation on investments and
foreign currencies (2,235,549) 14,619,718 350,600 52,694
- ----------------------------------------------------------------------------------------------
Change in net assets from operations 3,905,600 14,414,373 313,365 143,595
Dividends to Shareholders:
From net investment income:
Standard Shares -- -- (41,749) (11,300)
Institutional Shares -- -- -- --
From net realized gains on
investments:
Standard Shares -- -- (72,335) (31,488)
- ----------------------------------------------------------------------------------------------
Total dividends -- -- (114,084) (42,788)
Change in net assets from capital
transactions (22,076,750) (21,995,780) 2,488,096 1,642,210
CHANGE IN NET ASSETS $(18,171,150) $ (7,581,407) $2,687,377 $1,743,017
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period $103,011,152 $110,592,559 $2,804,083 $1,061,066
End of period $ 84,840,002 $103,011,152 $5,491,460 $2,804,083
- ----------------------------------------------------------------------------------------------
Accumulated net investment loss $ (13,609) $ (441,535) $ (1) --
- ----------------------------------------------------------------------------------------------
CAPITAL TRANSACTIONS
Standard Shares
Proceeds from shares issued $ 7,159,084 $ 12,635,147 $3,202,991 $1,943,959
Dividends reinvested -- -- 116,909 37,052
Cost of shares redeemed (26,154,054) (32,146,318) (831,804) (338,801)
-----------------------------------------------------
Net change (18,994,970) (19,511,171) 2,488,096 1,642,210
-----------------------------------------------------
Institutional Shares
Proceeds from shares issued $ 613,484 $ 10,869,317 -- --
Dividends reinvested -- -- -- --
Cost of shares redeemed (3,015,760) (13,146,663) -- --
-----------------------------------------------------
Net change (2,402,276) (2,277,346) -- --
-----------------------------------------------------
Administrative Shares
Proceeds from shares issued $ 313,429 $ 507,646 -- --
Cost of shares redeemed (992,933) (714,909) -- --
-----------------------------------------------------
Net change (679,504) (207,263) -- --
-----------------------------------------------------
CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS $(22,076,750) $(21,995,780) $2,488,096 $1,642,210
- ----------------------------------------------------------------------------------------------
SHARE TRANSACTIONS
Standard Shares
Issued 468,530 851,102 278,643 172,335
Reinvested -- -- 10,053 3,318
Redeemed (1,701,043) (2,160,362) (72,998) (30,031)
-----------------------------------------------------
Net change (1,232,513) (1,309,260) 215,698 145,622
-----------------------------------------------------
Institutional Shares
Issued 38,057 765,110 -- --
Reinvested -- -- -- --
Redeemed (198,226) (918,483) -- --
-----------------------------------------------------
Net change (160,169) (153,373) -- --
-----------------------------------------------------
Administrative Shares
Issued 20,183 33,828 -- --
Redeemed (62,430) (46,795) -- --
-----------------------------------------------------
Net change (42,247) (12,967) -- --
-----------------------------------------------------
CHANGE IN SHARES FROM SHARE
TRANSACTIONS (1,434,929) (1,475,600) 215,698 145,622
- ----------------------------------------------------------------------------------------------
</Table>
SEE FINANCIAL NOTES
70
<Table>
<Caption>
INCOME FUND ULTRA SHORT BOND FUND MONEY MARKET FUND
- -----------------------------------------------------------------------------------------
For the For the For the For the For the For the
year ended year ended year ended year ended year ended year ended
06/30/05 06/30/04 06/30/05 06/30/04 06/30/05 06/30/04
- -----------------------------------------------------------------------------------------
$ 2,111,638 $ 2,099,324 $ 158,122 $ 163,323 $ 1,134,923 $ 138,690
352,980 404,291 (6,647) (69,702) (29,451) --
552,719 (2,935,975) 3,430 (61,472) -- --
- -----------------------------------------------------------------------------------------
3,017,337 (432,360) 154,905 32,149 1,105,472 138,690
(2,182,135) (2,247,909) (166,503) (172,102) (951,801) (95,186)
-- -- -- -- (183,122) (43,504)
-- -- -- -- -- --
- -----------------------------------------------------------------------------------------
(2,182,135) (2,247,909) (166,503) (172,102) (1,134,923) (138,690)
(3,800,843) (6,894,783) (342,202) (1,559,881) (4,726,157) (21,290,731)
$ (2,965,641) $ (9,575,052) $ (353,800) $(1,699,834) $ (4,755,608) $(21,290,731)
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
$ 59,562,429 $ 69,137,481 $ 7,552,089 $ 9,251,923 $ 94,242,462 $115,533,193
$ 56,596,788 $ 59,562,429 $ 7,198,289 $ 7,552,089 $ 89,486,854 $ 94,242,462
- -----------------------------------------------------------------------------------------
$ 1 -- $ (297) $ (255) -- --
- -----------------------------------------------------------------------------------------
$ 5,746,190 $ 7,287,801 $ 3,471,248 $ 6,180,634 $ 67,336,900 $ 75,687,758
2,140,899 2,048,025 142,022 153,072 946,951 105,043
(11,687,932) (16,230,609) (3,955,472) (7,893,587) (74,764,898) (97,203,060)
- -----------------------------------------------------------------------------------------
(3,800,843) (6,894,783) (342,202) (1,559,881) (6,481,047) (21,410,259)
- -----------------------------------------------------------------------------------------
-- -- -- -- $ 4,217,756 $ 7,048,948
-- -- -- -- 187,562 44,467
-- -- -- -- (2,650,428) (6,973,887)
- -----------------------------------------------------------------------------------------
-- -- -- -- 1,754,890 119,528
- -----------------------------------------------------------------------------------------
-- -- -- -- -- --
-- -- -- -- -- --
- -----------------------------------------------------------------------------------------
-- -- -- -- -- --
- -----------------------------------------------------------------------------------------
$ (3,800,843) $ (6,894,783) $ (342,202) $(1,559,881) $ (4,726,157) $(21,290,731)
- -----------------------------------------------------------------------------------------
572,962 724,145 350,231 618,148 67,336,900 75,687,758
214,215 203,510 14,336 15,347 946,951 105,043
(1,168,437) (1,611,789) (398,835) (791,761) (74,764,898) (97,203,060)
- -----------------------------------------------------------------------------------------
(381,260) (684,134) (34,268) (158,266) (6,481,047) (21,410,259)
- -----------------------------------------------------------------------------------------
-- -- -- -- 4,217,756 7,048,948
-- -- -- -- 187,562 44,467
-- -- -- -- (2,650,428) (6,973,887)
- -----------------------------------------------------------------------------------------
-- -- -- -- 1,754,890 119,528
- -----------------------------------------------------------------------------------------
-- -- -- -- -- --
-- -- -- -- -- --
- -----------------------------------------------------------------------------------------
-- -- -- -- -- --
- -----------------------------------------------------------------------------------------
(381,260) (684,134) (34,268) (158,266) (4,726,157) (21,290,731)
- -----------------------------------------------------------------------------------------
</Table>
SEE FINANCIAL NOTES
71
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
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
- ------------------------------------------------------------------------------------------------------------------
300 FUND
STANDARD SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $11.16 0.08 -- 0.13 0.21 (0.06)
Period ended June 30, 2004 (1) 10.00 0.03 -- 1.14 1.17 (0.01)
- ------------------------------------------------------------------------------------------------------------------
CORE GROWTH FUND
STANDARD SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $18.10 (0.06) -- 1.68 1.62 --
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) --
INSTITUTIONAL SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $14.99 0.07 -- 1.39 1.46 --
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) --
ADMINISTRATIVE SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $18.44 0.02 -- 1.71 1.73 --
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) --
- ------------------------------------------------------------------------------------------------------------------
EMERGING GROWTH FUND
STANDARD SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $13.01 (0.18)(4) -- 1.27 1.09 --
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) --
INSTITUTIONAL SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $13.41 (0.10)(4) -- 1.31 1.21 --
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) --
ADMINISTRATIVE SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $13.22 (0.14)(4) -- 1.29 1.15 --
Year ended June 30, 2004 11.11 (0.14) -- 2.25 2.11 --
Year ended June 30, 2003 11.92 (0.10) -- (0.71) (0.81) --
Year ended June 30, 2002 15.87 (0.13) -- (3.82) (3.95) --
Year ended June 30, 2001 33.57 (0.17)(4) -- (11.46) (11.63) --
- ------------------------------------------------------------------------------------------------------------------
(1) For the period August 29, 2003, commencement of operations, to June 30, 2004.
(2) Not annualized.
(3) Annualized.
(4) Based on average shares outstanding.
</Table>
SEE FINANCIAL NOTES
72
<Table>
<Caption>
TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net Ratio of Ratio of net Ratio of
From Net asset assets, expenses to investment expenses to
net Total value, Total end of average net income/loss average net Portfolio
realized dividends to end return period assets, net of to average net assets, prior to turnover
gains shareholders of period (%) ($ X 1,000) reimbursement (%) assets (%) reimbursement (%) rate (%)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
(0.04) (0.10) $11.27 1.84 $ 6,290 0.90 0.67 1.39 31.76
-- (0.01) 11.16 11.71(2) 6,849 0.90(3) 0.38(3) 1.94(3) 32.98
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $19.72 8.95 $278,940 1.55 (0.32) 1.55 101.34
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $16.45 9.74 $ 43,083 0.80 0.42 0.80 101.34
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $20.17 9.38 $ 1,667 1.14 0.09 1.14 101.34
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $14.10 8.38 $157,963 1.96 (1.39) 1.96 109.56
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $14.62 9.02 $ 2,633 1.33 (0.76) 1.33 109.56
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $14.37 8.70 $ 5,270 1.64 (1.08) 1.64 109.56
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
SEE FINANCIAL NOTES
73
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
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 CORE GROWTH FUND
STANDARD SHARES
- --------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $10.84 (0.11) -- 0.77 0.66 --
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) --
- --------------------------------------------------------------------------------------------------------------------
VALUE FUND
STANDARD SHARES
- --------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $10.51 (0.01) -- 1.10 1.09 --
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 (1) 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 --
- --------------------------------------------------------------------------------------------------------------------
GLOBAL EQUITY FUND
STANDARD SHARES
- --------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $15.18 0.02(4) --(5) 0.66 0.68 --
Year ended June 30, 2004 13.39 (0.10)(4) --(5) 1.89 1.79 --
Year ended June 30, 2003 14.22 (0.03)(4) 0.02 (0.82) (0.83) --
Year ended June 30, 2002 18.31 (0.11)(4) 0.01 (3.99) (4.09) --
Year ended June 30, 2001 29.99 (0.16) -- (9.61) (9.77) --
INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $15.58 0.12(4) --(5) 0.69 0.81 --
Year ended June 30, 2004 13.65 0.04(4) --(5) 1.89 1.93 --
Year ended June 30, 2003 14.40 0.05(4) 0.02 (0.82) (0.75) --
Year ended June 30, 2002 18.46 (0.01)(4) 0.01 (4.06) (4.06) --
Year ended June 30, 2001 30.08 (0.05)(4) -- (9.66) (9.71) --
ADMINISTRATIVE SHARES
- --------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $15.36 0.06(4) --(5) 0.69 0.75 --
Year ended June 30, 2004 13.51 (0.02)(4) --(5) 1.87 1.85 --
Year ended June 30, 2003 14.30 0.01(4) 0.02 (0.82) (0.79) --
Year ended June 30, 2002 18.38 (0.06)(4) 0.01 (4.03) (4.08) --
Year ended June 30, 2001 30.02 (0.11)(4) -- (9.62) (9.73) --
- --------------------------------------------------------------------------------------------------------------------
(1) Subsequent to the annual report as of May 31, 2002, the Citizens Value Fund changed its fiscal year end to June
30.
(2) Not annualized.
(3) Annualized.
(4) Based on average shares outstanding.
(5) Less than $0.005 per share.
</Table>
SEE FINANCIAL NOTES
74
<Table>
<Caption>
TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net Ratio of Ratio of net Ratio of
From Net asset assets, expenses to investment expenses to
net Total value, Total end of average net income/loss average net Portfolio
realized dividends to end return period assets, net of to average net assets, prior to turnover
gains shareholders of period (%) ($ X 1,000) reimbursement (%) assets (%) reimbursement (%) rate (%)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
(0.50) (0.50) $11.00 6.21 $ 30,059 1.51 (1.07) 1.51 120.89
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $11.60 10.37 $ 27,791 1.70 (0.11) 1.70 172.95
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $15.86 4.48 $ 80,384 2.05 0.13 2.05 80.36
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $16.39 5.20 $ 2,891 1.39 0.75 1.39 80.36
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
-- -- $16.11 4.88 $ 1,566 1.73 0.40 1.73 80.36
-- -- 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
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
SEE FINANCIAL NOTES
75
FINANCIAL HIGHLIGHTS
<Table>
<Caption>
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
- ------------------------------------------------------------------------------------------------------------------
BALANCED FUND
STANDARD SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $11.35 0.12 -- 0.75 0.87 (0.12)
Year ended June 30, 2004 10.47 0.06 -- 1.12 1.18 (0.06)
Period ended June 30, 2003 (1) 10.00 0.02 -- 0.47 0.49 (0.02)
- ------------------------------------------------------------------------------------------------------------------
INCOME FUND
STANDARD SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $ 9.86 0.37 -- 0.15 0.52 (0.38)
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)
- ------------------------------------------------------------------------------------------------------------------
ULTRA SHORT BOND FUND
STANDARD SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $ 9.92 0.23 -- (0.01) 0.22 (0.24)
Year ended June 30, 2004 10.06 0.18 -- (0.13) 0.05 (0.19)
Period ended June 30, 2003 (5) 10.00 0.14(6) -- 0.07 0.21 (0.15)
- ------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUND
STANDARD SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $ 1.00 0.01 -- -- 0.01 (0.01)
Year ended June 30, 2004 1.00 --(4) -- -- --(4) --(4)
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)
INSTITUTIONAL SHARES
- ------------------------------------------------------------------------------------------------------------------
Year ended June 30, 2005 $ 1.00 0.02 -- -- 0.02 (0.02)
Year ended June 30, 2004 1.00 --(4) -- -- --(4) --(4)
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)
- ------------------------------------------------------------------------------------------------------------------
(1) For the period December 20, 2002, commencement of operations, to June 30, 2003.
(2) Not Annualized.
(3) Annualized.
(4) Less than $0.005 per share.
(5) For the period November 21, 2002, commencement of operations, to June 30, 2003.
(6) Based on average shares outstanding.
</Table>
SEE FINANCIAL NOTES
76
<Table>
<Caption>
TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------------
Net Ratio of Ratio of net Ratio of
From Net asset assets, expenses to investment expenses to
net Total value, Total end of average net income/loss average net Portfolio
realized dividends to end return period assets, net of to average net assets, prior to turnover
gains shareholders of period (%) ($ X 1,000) reimbursement (%) assets (%) reimbursement (%) rate (%)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
(0.23) (0.35) $11.87 7.76 $ 5,491 1.30 1.07 2.33 109.56
(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
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
-- (0.38) $10.00 5.34 $ 56,597 1.48 3.66 1.48 111.76
-- (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
--(4) (0.70) 10.28 7.87 71,639 1.40 6.55 1.48 60.53
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
-- (0.24) $ 9.90 2.23 $ 7,198 0.14 2.28 1.45 65.70
-- (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
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
-- (0.01) $ 1.00 1.21 $ 76,724 1.00 1.19 1.00 N/A
-- --(4) 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
- ------------------------------------------------------------------------------------------------------------------------------------
-- (0.02) $ 1.00 1.53 $ 12,763 0.68 1.55 0.68 N/A
-- --(4) 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
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
SEE FINANCIAL NOTES
77
FINANCIAL NOTES
ORGANIZATION
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"):
<Table>
<Caption>
- ---------------------------------------------------------------------------------
FUND SHORT NAME
- ---------------------------------------------------------------------------------
Citizens 300 Fund 300 Fund
Citizens Core Growth Fund Core Growth Fund
Citizens Emerging Growth Fund Emerging Growth Fund
Citizens Small Cap Core Growth Fund Small Cap Core Growth Fund
Citizens Value Fund Value Fund
Citizens Global Equity Fund Global Equity Fund
Citizens Balanced Fund Balanced Fund
Citizens Income Fund Income Fund
Citizens Ultra Short Bond Fund Ultra Short Bond Fund
Citizens Money Market Fund Money Market Fund
- ---------------------------------------------------------------------------------
</Table>
The funds are authorized to issue an unlimited number of shares of beneficial
interest with no par value. The Core Growth Fund, Emerging 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 300 Fund, Small
Cap Core Growth 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 fees paid
under class-specific agreements, 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.
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
78
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
The board of trustees has approved procedures to be used to value each fund's
securities for the purpose of determining the fund's net asset value (NAV).
Equity securities traded on an exchange are valued at the market price
determined as the closing sale or official closing price on that exchange. For
securities not traded on an exchange, or if an exchange price is not readily
available, securities are valued at a market price determined by independent
third party pricing vendors approved by the funds' valuation committee. The
market price for debt obligations is determined by an independent third-party
pricing service which use a matrix, formula or other objective method that
considers the effect of market indices, yield curves and other specific
adjustments. Short-term securities maturing within 60 days and all securities in
the Money Market Fund are valued at amortized cost, unless it is determined that
using this method would not reflect a security's fair value. Under the amortized
cost method, premium or discount, if any, is amortized or accreted,
respectively, on a constant basis to the maturity of the security. If a price
for a given security is unavailable or deemed unreliable by the adviser, the
market price may be determined using quotations received from one or more
brokers that make a market in the security. When such prices or quotations are
not available, or when the adviser believes they are unreliable, the funds'
valuation committee will value securities using fair value procedures approved
by the funds' board of trustees. 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 and the time at which a fund's net asset
value is calculated. The Global Equity Fund uses a fair value model developed by
an independent third party pricing service in its valuation considerations for
foreign equity securities on days when there is a specific percentage change in
the value of a domestic equity security index. This percentage is determined by
the funds' valuation committee.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME
Changes in holdings of portfolio securities shall be reflected no later than 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 is determined on the identified cost basis, unless
otherwise
79
FINANCIAL NOTES
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 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. 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.
80
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, 2005, the Global
Equity Fund collected $4,014 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 300 Fund, Core Growth Fund, Emerging Growth Fund, Small Cap Core Growth
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.
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.
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.
81
FINANCIAL NOTES
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 agreement, 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:
<Table>
<Caption>
- ------------------------------------------------------
FUND FEE RATE
- ------------------------------------------------------
300 Fund 0.20%
Core Growth Fund 0.50%
Emerging Growth Fund 1.00%
Small Cap Core Growth Fund 0.50%
Value Fund 0.70%
Global Equity Fund 1.00%
Balanced Fund 0.65%
Income Fund 0.65%
Ultra Short Bond Fund 0.35%
Money Market Fund 0.35%
- ------------------------------------------------------
</Table>
McLean Budden Limited serves as the subadviser for the Global Equity Fund. For
its services, the subadviser receives a fee computed daily based on an annual
rate of 0.33% of the fund's average daily net assets up to $50 million, 0.30% on
the next $50 million, and 0.25% on assets thereafter. The fee is paid by the
adviser.
Prior to August 27, 2004, SSgA Funds Management, Inc. served as the subadviser
for the Global Equity Fund. For its services, SSgA Funds Management, Inc.
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.
82
ADMINISTRATIVE AND SHAREHOLDER SERVICE FEES
The adviser, with whom certain officers and a trustee 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 terms of the administrative
contract, fees 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 and is reimbursed for out-of-
pocket expenses as well, 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, 2005, 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. As transfer agent for the funds, BISYS is paid a fee
based on the number of funds and shareholder accounts, other services fees, and
is reimbursed for out-of-pocket expenses as well. Transfer agent expenses also
include the cost of services rendered by third parties to provide sub-transfer
agency services. As fund accountant for the funds, BISYS is paid a fee based on
assets (ranging from 0.0125% -- 0.035%) and the number of share classes per
fund, subject to certain minimums, other service fees, and is reimbursed for
out-of-pocket expenses as well. Fifth Third Bank acts as custodian for the funds
and is paid a fee based on the funds' assets and other transaction based fees,
subject to certain minimums. Custody expenses may be incurred or offset from
fees or credits arising from cash balances maintained on deposit.
TRUSTEE FEES
All of the officers and one of the 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
include a chair of the board, who receives an additional annual retainer of
$5,000; and an audit committee chair, social responsibility committee chair, and
nominating committee chair who each receive an additional annual retainer of
$2,500.
ALLOCATIONS
Expenses directly attributable to a fund are charged to that fund. Expenses not
directly attributable to a fund are allocated proportionately among various or
83
FINANCIAL NOTES
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, 2005, the adviser limited the total expenses,
exclusive of taxes, brokerage commissions and extraordinary expenses, for
certain funds to the extent they exceeded the following limits:
<Table>
<Caption>
- --------------------------------------------------------
FUND EXPENSE LIMITATION
- --------------------------------------------------------
300 Fund 0.90%
Balanced Fund 1.30%
Ultra Short Bond Fund 0.14%
- --------------------------------------------------------
</Table>
The expense limitations above are voluntary and may be removed by the adviser at
any time.
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, fund accounting expenses of the funds.
INVESTMENT TRANSACTIONS
The following summarizes purchases and sales of investment securities, other
than short-term investments and U.S. Government securities, by fund for the year
ended June 30, 2005:
<Table>
<Caption>
- -------------------------------------------------------------------------------
FUND PURCHASES SALES
- -------------------------------------------------------------------------------
300 Fund $ 2,164,649 $ 2,908,375
Core Growth Fund 317,817,654 382,016,836
Emerging Growth Fund 181,128,925 212,119,528
Small Cap Core Growth Fund 32,875,444 35,720,667
Value Fund 44,374,424 43,025,133
Global Equity Fund 71,733,011 93,748,003
Balanced Fund 5,629,784 3,765,484
Income Fund 50,764,014 57,333,914
Ultra Short Bond Fund 3,459,266 3,868,216
- -------------------------------------------------------------------------------
</Table>
84
SUBSEQUENT EVENT
On July 5, 2005, the Board of Trustees of the funds, on behalf of the Ultra
Short Bond Fund, approved the termination and liquidation of the fund. The fund
will be liquidated on or about August 22, 2005.
FEDERAL TAX INFORMATION
The tax character of dividends paid by the funds during the past two fiscal
years were as follows:
<Table>
<Caption>
- ---------------------------------------------------------------------------------------------
Dividends Paid From
----------------------
Net long
term Total Total
Ordinary capital taxable Tax return dividends
income gains dividends of capital paid(1)
- ---------------------------------------------------------------------------------------------
FISCAL YEAR ENDED 2005
300 Fund $ 58,299 $ 563 $ 58,862 $ -- $ 58,862
Small Cap Core Growth Fund 1,108,006 190,731 1,298,737 -- 1,298,737
Balanced Fund 105,988 2,255 108,243 -- 108,243
Income Fund 2,197,109 -- 2,197,109 -- 2,197,109
Ultra Short Bond Fund 158,672 -- 158,672 -- 158,672
Money Market Fund 1,003,934 -- 1,003,934 -- 1,003,934
- ---------------------------------------------------------------------------------------------
FISCAL YEAR ENDED 2004
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
- ---------------------------------------------------------------------------------------------
</Table>
As of June 30, 2005, the components of accumulated earnings/deficit on a tax
basis for the funds were as follows:
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------------------------------------
Total
Undistributed Undistributed Accumulated Unrealized accumulated
ordinary long term Accumulated Dividends capital and other appreciation/ earnings/
income capital gains earnings payable losses depreciation(2) deficit
- ------------------------------------------------------------------------------------------------------------------------------------
300 Fund $ 24,904 $ 52,018 $ 76,922 $ -- $ -- $ 419,689 $ 496,611
Core Growth Fund -- -- -- -- (73,442,190) 55,299,554 (18,142,636)
Emerging Growth Fund -- -- -- -- (190,293,663) 30,708,257 (159,585,406)
Small Cap Core Growth
Fund -- -- -- -- (2,951,533) 5,529,956 2,578,423
Value Fund -- -- -- -- (7,796,193) 3,558,746 (4,237,447)
Global Equity Fund -- -- -- -- (125,067,572) 6,276,173 (118,791,399)
Balanced Fund 12,681 -- 12,681 (12,682) (76,507) 426,356 349,848
Income Fund 173,526 -- 173,526 (173,525) (5,244,790) 420,146 (4,824,643)
Ultra Short Bond Fund 18,468 -- 18,468 (18,765) (102,220) (19,557) (122,074)
Money Market Fund 158,186 -- 158,186 (158,186) (38,534) -- (38,534)
- ------------------------------------------------------------------------------------------------------------------------------------
</Table>
(1)Total dividends paid may differ from the amount reported in the Statements 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 the tax deferral of
losses on wash sales.
85
FINANCIAL NOTES
As of June 30, 2005, the funds had the following net capital loss carryforwards,
which are available to offset future realized gains:
<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------------------------
Amount Expires Amount Expires Amount Expires Amount Expires Amount
- -------------------------------------------------------------------------------------------------------------------------------
Core Growth Fund $ -- -- $ 26,819,438 2010 $46,622,753 2011 $ -- -- $ --
Emerging Growth Fund -- -- 150,661,298 2010 36,170,306 2011 -- -- 3,462,058
Small Cap Core Growth
Fund -- -- -- -- -- -- -- -- 2,896,910
Value Fund -- -- 40,687 2010 4,976,984 2011 2,778,523 2012 --
Global Equity Fund
(1) 284,977 2009 101,286,974 2010 9,283,310 2011 14,198,702 2012 --
Balanced Fund -- -- -- -- -- -- -- -- 76,507
Income Fund -- -- 638,367 2010 4,606,423 2011 -- -- --
Ultra Short Bond Fund -- -- -- -- -- -- 74,733 2012 14,656
Money Market Fund 9,083 2009 -- -- -- -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
<Caption>
- --------------------- -------
Expires
- --------------------- -------
Core Growth Fund --
Emerging Growth Fund 2013
Small Cap Core Growth
Fund 2013
Value Fund --
Global Equity Fund
(1) --
Balanced Fund 2013
Income Fund --
Ultra Short Bond Fund 2013
Money Market Fund --
- --------------------------------------
</Table>
(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: $284,977 expiring in 2009, $33,758 expiring in
2010, $345,833 expiring in 2011.
Net capital losses incurred after October 31, 2004, 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, 2005, the Global Equity Fund deferred to July 1,
2005 post October currency losses of $13,609, and the Small Cap Core Growth
Fund, Ultra Short Bond Fund and Money Market Fund deferred to July 1, 2005 post
October capital losses of $54,622, $12,831 and $29,451 respectively.
SUPPLEMENTAL INFORMATION (UNAUDITED)
FEDERAL TAX INFORMATION
For the fiscal year ended June 30, 2005, $58,299 of dividends paid by the 300
Fund, $34,125 of dividends paid by the Small Cap Core Growth Fund, and $34,105
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 2005 Form 1099-DIV.
For the tax year ended June 30, 2005, 100% of income dividends paid by the 300
Fund, 3% of income dividends paid by the Small Cap Core Growth Fund, and 32% of
income dividends paid by the Balanced Fund qualify for the dividends received
deduction available to corporations.
86
SUPPLEMENTAL INFORMATION (UNAUDITED)
PORTFOLIO HOLDINGS DISCLOSURE
Each Citizens fund, except the Citizens Money Market Fund, posts it full
portfolio holdings monthly, with a 30-day lag, on www.citizensfunds.com. The
portfolio holdings will be posted within approximately five business days after
month end. The funds' portfolio holdings will remain available until the
following month's information is posted.
In addition, each fund's, except the Citizens Money Market Fund's, top ten
portfolio holdings in order of position size and as a percentage of the total
portfolio as well as sector breakdowns and portfolio characteristics are
available quarterly, within approximately fifteen business days after quarter
end on www.citizensfunds.com. Each fund's top ten portfolio holdings, sector
breakdown and portfolio characteristics will remain available until the
following quarter's information is posted.
Details of the funds' portfolio holdings policies and procedures, which includes
a discussion of any exceptions, are contained in the funds' SAI.
Each fund files its complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year within 60 days of such quarters on
Form N-Q. You can receive a copy of each fund's Form N-Q without charge by
calling 800.223.7010 or by visiting our website at www.citizensfunds.com. Each
fund's Form N-Q is also available through a variety of methods. You can:
- -- find them on the EDGAR Database of the SEC internet site at
http://www.sec.gov
- -- have copies sent to you (after paying a copying fee) by writing the the SEC's
Public Reference Section, Washington, D.C. 20549-0102, or by electronic
request to publicinfo@sec.gov
- -- view and copy them in person at the SEC's Public Reference Room in
Washington, D.C.; for more information call 202.942.8090.
87
SUPPLEMENTAL INFORMATION (UNAUDITED)
TABLE OF SHAREHOLDER EXPENSES
As a shareholder of the funds, you may incur two types of costs: (1) redemption
fees (for Global Equity Fund only) and (2) ongoing costs, including management
fees; distribution fees; and other fund expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in the funds
and to compare these costs with the ongoing costs of investing in other mutual
funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period from January 1, 2005 through June 30,
2005.
ACTUAL EXPENSES
The table on the page opposite provides information about actual account values
and actual expenses. You may use the information below, together with the amount
you invested, to estimate the expenses that you paid over the period. Simply
divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the table
under the heading entitled "Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table on the page opposite also provides information about hypothetical
account values and hypothetical expenses based on each fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees and other individual shareholder fees mentioned in the
prospectus. Therefore, the table is useful in comparing ongoing costs only, and
will not help you determine the relative total costs of owning different funds.
In addition, if these transactional costs were included, your costs would have
been higher.
* Expenses equal the average account value times the fund's annualized expense
ratio multiplied by 181/365 (to reflect the one-half year period).
88
<Table>
<Caption>
JUNE 30, 2005
- -----------------------------------------------------------------------------------------
Annualized
Beginning Ending Expenses paid expense ratio
account account during period * during the period
value value 01/01/05 - 01/01/05 -
01/01/05 06/30/05 06/30/05 06/30/05
- -----------------------------------------------------------------------------------------
300 FUND
Standard -- actual $1,000.00 $ 973.20 $4.40 0.90%
Standard -- hypothetical 1,000.00 1,020.33 4.51 0.90%
- -----------------------------------------------------------------------------------------
CORE GROWTH FUND
Standard -- actual $1,000.00 $1,015.40 $7.75 1.55%
Standard -- hypothetical 1,000.00 1,017.11 7.75 1.55%
Institutional -- actual 1,000.00 1,019.20 4.11 0.82%
Institutional -- hypothetical 1,000.00 1,020.73 4.11 0.82%
Administrative -- actual 1,000.00 1,017.70 5.50 1.10%
Administrative -- hypothetical 1,000.00 1,019.34 5.51 1.10%
- -----------------------------------------------------------------------------------------
EMERGING GROWTH FUND
Standard -- actual $1,000.00 $1,017.30 $9.70 1.94%
Standard -- hypothetical 1,000.00 1,015.17 9.69 1.94%
Institutional -- actual 1,000.00 1,020.20 6.71 1.34%
Institutional -- hypothetical 1,000.00 1,018.15 6.71 1.34%
Administrative -- actual 1,000.00 1,019.10 7.91 1.58%
Administrative -- hypothetical 1,000.00 1,016.96 7.90 1.58%
- -----------------------------------------------------------------------------------------
SMALL CAP CORE GROWTH FUND
Standard -- actual $1,000.00 $1,019.50 $7.56 1.51%
Standard -- hypothetical 1,000.00 1,017.31 7.55 1.51%
- -----------------------------------------------------------------------------------------
VALUE FUND
Standard -- actual $1,000.00 $1,032.90 $8.62 1.71%
Standard -- hypothetical 1,000.00 1,016.31 8.55 1.71%
- -----------------------------------------------------------------------------------------
GLOBAL EQUITY FUND
Standard -- actual $1,000.00 $ 988.80 $9.91 2.01%
Standard -- hypothetical 1,000.00 1,014.83 10.04 2.01%
Institutional -- actual 1,000.00 992.10 6.96 1.41%
Institutional -- hypothetical 1,000.00 1,017.80 7.05 1.41%
Administrative -- actual 1,000.00 990.80 8.49 1.72%
Administrative -- hypothetical 1,000.00 1,016.27 8.60 1.72%
- -----------------------------------------------------------------------------------------
BALANCED FUND
Standard -- actual $1,000.00 $1,023.70 $6.52 1.30%
Standard -- hypothetical 1,000.00 1,018.35 6.51 1.30%
- -----------------------------------------------------------------------------------------
INCOME FUND
Standard -- actual $1,000.00 $1,012.20 $7.23 1.45%
Standard -- hypothetical 1,000.00 1,017.60 7.25 1.45%
- -----------------------------------------------------------------------------------------
ULTRA SHORT BOND FUND
Standard -- actual $1,000.00 $1,013.30 $0.50 0.10%
Standard -- hypothetical 1,000.00 1,024.30 0.50 0.10%
- -----------------------------------------------------------------------------------------
MONEY MARKET FUND
Standard -- actual $1,000.00 $1,008.40 $5.28 1.06%
Standard -- hypothetical 1,000.00 1,019.54 5.31 1.06%
Institutional -- actual 1,000.00 1,010.30 3.39 0.68%
Institutional -- hypothetical 1,000.00 1,021.42 3.41 0.68%
- -----------------------------------------------------------------------------------------
</Table>
89
SUPPLEMENTAL INFORMATION (UNAUDITED)
BOARD APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT
The trustees unanimously approved the continuance of the management agreement
with respect to each fund at a meeting held on May 16, 2005. This approval was
based on the following conclusions:
(i) that the adviser has the capabilities, resources and personnel necessary to
provide the advisory services currently provided to each fund; and
(ii) that the advisory fees paid by each fund represent reasonable compensation
to the adviser in light of the services provided, the costs to the adviser
of providing those services, the fees paid by similar funds, and such other
matters as the trustees considered relevant in the exercise of their
reasonable judgment, and represent an appropriate sharing at the present
time between fund shareholders and the adviser of any economies of scale in
the management of each fund at current asset levels.
In advance of the meeting, the independent trustees, through their counsel,
submitted to the adviser a written request for information in connection with
their consideration of the funds' management agreements. The requested
information was provided by the adviser in advance of and at the board meeting.
In preparation for the board meeting, the independent trustees met with their
counsel to discuss the proposed continuance of the funds' management agreement
and received a memorandum from their counsel outlining the legal standards and
certain other considerations relevant to their deliberations.
In reaching these conclusions, the trustees considered all factors they believed
relevant, including (i) information comparing the performance of each fund to
other investment companies with similar investment objectives and to an index;
(ii) the nature, extent and quality of investment services rendered by the
adviser; (iii) payments received by the adviser from all sources in respect of
each fund; (iv) the costs borne by, and profitability of, the adviser in
providing services to each fund; (v) comparative fee and expense data for each
fund and other investment companies with similar investment objectives; (vi) the
extent to which economies of scale would be realized as the funds grow and
whether fee levels reflect these economies of scale for the benefit of fund
shareholders; (vii) information about "revenue sharing" arrangements that the
adviser enters into in respect of the funds; (viii) fall-out benefits which the
adviser receives from its relationship to the
90
funds; (ix) information about fees charged by the adviser to other clients with
similar investment objectives; (x) the professional experience and
qualifications of each fund's portfolio management team; and (xi) the terms of
the management agreement.
In their deliberations, the trustees did not identify any particular information
that was all-important or controlling, and each trustee attributed different
weights to the various factors. The trustees evaluated all information available
to them on a fund-by-fund basis, and their determinations were made separately
in respect of each fund.
In voting to renew the funds' management agreement with the adviser, the Board
also considered the adviser's compliance program, its implementation by the
adviser as well as its effectiveness and noted with approval the strong ethical
compliance culture at the adviser. The board also noted the adviser's recent
addition of portfolio management personnel. The trustees noted that pursuant to
the management agreement, the adviser, subject to the direction of the board, is
responsible for providing advice and guidance with respect to the funds and for
managing the investment of the assets of each fund. With the exception of the
Global Equity Fund, the adviser provides the day-to-day portfolio management of
the funds, including making purchases and sales of portfolio securities
consistent with each fund's investment objective and policies. The adviser
oversees the activities of the subadviser it has engaged to provide the day-to-
day portfolio management of the Global Equity Fund. The trustees noted that the
services required to be provided had expanded over time as a result of
regulatory and other developments. The trustees cited, by way of example, the
enhanced obligations involving the adviser's and the funds' compliance programs
and the substantial commitment of time and resources that the adviser had made
in this area. The trustees concluded that, overall, they were satisfied with the
nature, extent and quality of services provided to the funds under the
management agreement.
The board reviewed the information concerning the costs of services provided and
the profitability to the adviser of its advisory relationship with the funds,
along with a description of the methodology used by the adviser in preparing the
profitability information. The board considered the cost to the adviser of its
services to each fund and what is a fair entrepreneurial profit for managing
each fund. The board noted that there appeared to be a reasonable basis for the
methodology underlying the adviser's profitability analysis and that the
profitability with respect to each fund did not appear to be excessive.
91
SUPPLEMENTAL INFORMATION (UNAUDITED)
BOARD APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT (CONT.)
The trustees considered that the adviser benefits from soft dollar arrangements
whereby it receives brokerage and research services from brokers that execute
the funds' purchases and sales of investment securities. It was noted that
during the course of the year the trustees had received presentations from the
adviser about its trading practices and brokerage arrangements, including its
policies with respect to soft dollar arrangements. The trustees also considered
that the adviser receives administrative and shareholder service fees from the
funds and that Citizens Securities, Inc., an affiliate of the adviser, receives
12b-1 fees from the funds. In addition, the board considered certain aggregate
benefits, other than fees, that the adviser receives by virtue of its
relationship with each fund.
In considering performance, the board noted the successful efforts by the
adviser over the prior year to improve performance by attracting additional
talented personnel. The trustees received detailed comparative performance
information for each fund and considered information showing performance of each
fund versus one or more selected securities indices over the one, three, five
and ten year periods ended March 31, 2005 (or those relevant periods in which
the applicable fund existed). The comparative information showed that: the 300
Fund underperformed the indices for the one year period; the Core Growth Fund
had solid one year and ten year returns; the Emerging Growth Fund underperformed
the index for the one, three and five year periods and outperformed the index
for the ten year period; the Small Cap Core Growth Fund underperformed the index
for the one and three year periods, but outperformed the index for the five year
period; the Value Fund had outperformed the index for the one and five year
periods, but underperformed the index for the three year period; the Global
Equity Fund significantly underperformed the index for the one, three and five
year periods; the Balanced Fund slightly underperformed the blended indices for
the one year period; the Income Fund underperformed the index for the one,
three, five and ten year periods; the Ultra Short Bond Fund outperformed the
index for the one year period; and the Money Market Fund's seven and thirty day
yields were lower than the average seven and thirty day yields of a comparable
universe of funds.
The trustees noted that the 300 Fund was a relatively new fund with a limited
performance history. The trustees considered the recent changes made by the
adviser in the portfolio management teams of the Core Growth,
92
Emerging Growth, Small Cap Core Growth and Balanced Funds and the enhancement of
the investment process of each fund. The trustees noted the Value Fund's
improved one year performance, and that the fund had been previously subadvised
for portions of the three and five year periods. With respect to the Global
Equity Fund, the trustees considered the adviser's recent engagement of a new
subadviser, McLean Budden Ltd., to manage the fund. The trustees noted that they
had asked the adviser to bring additional or different resources to bear in the
management of the Income Fund, and that the adviser had undertaken to fulfill
their request. With respect to the Money Market Fund, the trustees considered
the effect of the relatively small size of the fund and the information
presented by the adviser to the effect that the fund was managed in a very
conservative fashion.
The board considered the advisory fee rate paid by each fund to the adviser
under the management agreement. The board reviewed reports detailing each fund's
management fee, administration fee, total management and administration fees and
total expense levels and versus comparable mutual funds with similar investment
objectives including a broad universe group, a smaller peer group including
funds with similar asset levels, if possible ("comparison group"), and other
specific funds. The trustees recognized that it is difficult to make comparisons
of management fees because there are variations in the services that are
included in the fees paid by comparable mutual funds. The board also reviewed
information concerning the fees paid by other accounts managed by the adviser
with investment objectives similar to the funds. The fee rates charged to those
accounts are higher than those charged to the relevant funds. The comparative
information showed that: the 300 Fund's management fee, administration fee,
total management and administration fees and total expenses were below the
comparison group median; the management fee, administration fee, total
management and administration fees and total expenses of the Core Growth and
Small Cap Core Growth Funds were equal to or below the comparison group median
(except that total expenses for the Core Growth Fund's Standard shares were
above the median); the Emerging Growth Fund's administration fee was
approximately equal to the comparison group median, while the fund's management
fee, total management and administration fees and total expenses were higher
than the comparison group median; the management fee, administration fee and
total management and administration fees of the Value Fund were equal to or
lower than the comparison group median, while the fund's total expenses were
higher than the comparison group median; the Global Equity Fund's management fee
was equal to the comparison group median, while the fund's administration fees
and total management and administration fees were
93
SUPPLEMENTAL INFORMATION (UNAUDITED)
BOARD APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT (CONT.)
lower than the comparison group median and the total expenses were above the
median; the Balanced Fund's management fee was higher than the comparison group
median while the total expenses were lower than the median and the fund's
administration fees and total management and administration fees were equal to
or slightly higher the comparison group median; the Income Fund's management
fee, administration fee, total management and administration fees and total
expenses were higher than the comparison group median; and the Ultra Short Bond
Fund's management fee, administration fee and total management and
administration fees were lower than the comparison group median and the fund's
total expenses (as a result of voluntary reimbursements by the adviser) were
lower than the median; and the Money Market Fund's management fee,
administration fee, total management and administration fees and total expenses
were higher than the comparison group median. The trustees concluded that the
expense ratio of each fund was acceptable in light of the quality of service
each fund receives and the other factors considered. With respect to the Income
Fund, the trustees concluded that, while the expense ratio was higher than the
comparison group median, cutting fees at this time would be incompatible with
the trustees' request that additional and/or different resources be brought to
bear for this fund.
The board next considered, in light of current asset levels and current
circumstances, whether breakpoints in the fee structure for each fund were
appropriate, and determined that the funds' current fee structure was
appropriate.
Based on the above factors, the board voted to renew each fund's management
agreement with the adviser for an additional one-year period.
94
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 on the following page show the trustees and officers of
the funds as of June 30, 2005.
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 ten funds within the
Citizens Funds complex, and no trustee is currently a trustee or director for
any other mutual fund or company. Except as noted on the following page, the
address for each trustee and officer in connection with their fund duties is One
Harbour Place, Suite 400, Portsmouth, NH 03801.
95
SUPPLEMENTAL INFORMATION (UNAUDITED)
<Table>
<Caption>
- ------------------------------------------------------------------------------------------------------
AFFILIATED TRUSTEE
- ------------------------------------------------------------------------------------------------------
POSITION(S) W/FUNDS AND
DATE OF ELECTION
NAME AND AGE OR APPOINTMENT PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------
Sophia Collier (1) Trustee since 10/91 Portfolio Manager, Citizens Advisers, Inc., since
49 President 1991-1998 and 3/95. Majority Owner and Chair of Board of
since 8/02, Chair of Directors, Citizens Advisers, Inc., since 12/91.
Board 1/02-8/02 President, Citizens Advisers, Inc., and Citizens
Securities, Inc., 12/91-9/98 and since 7/02.
Chair of the Board of Directors, Citizens
Securities, Inc., since 12/91. President,
Northpoint Technology, Ltd., 1/97-6/02. Chair of
the Board of Directors, Northpoint Technology,
Ltd., since 6/02.
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INDEPENDENT TRUSTEES
- ------------------------------------------------------------------------------------------------------
POSITION(S) W/FUNDS AND
DATE OF ELECTION
NAME AND AGE OR APPOINTMENT PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------
Walter D. Bristol, Jr. Trustee since 5/01 Executive Vice President for Corporate Operations
55 Chair of the Board since and Chief Financial Officer, American Heart
8/04 Association, since 5/96.
Vice Chair of the Board
8/02-8/04
Jeannie H. Diefenderfer Trustee since 5/01 Senior Vice President, Verizon, since 8/04. Vice
44 President, Verizon, 8/02-7/04. Group President,
Verizon, 8/01-7/02. Senior Vice President,
Verizon, 5/98-7/01.
Pablo S. Eisenberg Trustee since 12/99 Senior Fellow, Public Policy Institute,
73 Georgetown University, since 1/99. Executive
Director, Center for Community Change, 5/75-6/98.
Orlando Hernandez Trustee since 8/01 Vice President of Finance, Texas Instruments,
58 5/76- 4/01.
Martha S. Pope Trustee since 12/99 Trustee, National Park Foundation, since 8/00.
60 Chair of the Board Trustee, Hofstra University, since 6/00. Senior
8/02-8/04 Advisor for the Northern Ireland Peace
Negotiations, 1/95-7/98.
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
OFFICERS WHO ARE NOT TRUSTEES
- ------------------------------------------------------------------------------------------------------
POSITION(S) W/FUNDS AND
DATE OF ELECTION
NAME AND AGE OR APPOINTMENT PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- ------------------------------------------------------------------------------------------------------
Sean P. Driscoll Treasurer since 3/99 Executive Vice President, Citizens Advisers,
40 Inc., since 9/04. Senior Vice President, Citizens
Advisers, Inc., 4/03-9/04. Vice President,
Citizens Advisers, Inc., 10/99-4/03. Assistant
Treasurer, Citizens Advisers, Inc., 10/02-12/02.
Director, Citizens Advisers Inc., 11/98-10/99.
Marcia Kovalik Chief Compliance Officer Chief Compliance Officer, Citizens Advisers,
42 since 8/04 Inc., since 8/04. Vice President, Citizens
Secretary since 5/03 Advisers, Inc., since 4/03. Counsel, Citizens
Asst. Secretary 5/01-5/03 Advisers, Inc., 2/01-4/03. Associate, Boynton,
Waldron, Doleac, Woodman & Scott, P.A.,
9/95-2/01.
Alaina Metz (2) Asst. Secretary since Chief Administrative Officer, BISYS Fund Services
38 2/01 Ohio, Inc., since 6/95.
- ------------------------------------------------------------------------------------------------------
</Table>
(1) Sophia Collier is an interested person of the funds by virtue of her
position with the funds' investment adviser.
(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.
96
SHAREHOLDER SERVICES (UNAUDITED)
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 website.
EXCHANGES BETWEEN CITIZENS FUNDS*
You can move your money from any one of our funds to another.
RETIREMENT INVESTING
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. Representatives are available from 9 am to
6 pm (ET) Monday - Friday at 800.223.7010.
CLIENT WEALTH MANAGEMENT
Receive personal, one on one advice and consultation from our Client Wealth
Management specialist.
WWW.CITIZENSFUNDS.COM
Our website offers daily fund prices and monthly performance updates, 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 and a copy of the funds' voting
record for the 12-month period ended June 30, 2005 are available on-line at
www.citizensfunds.com without charge, or upon request, by calling 800.223.7010,
and on the SEC's website at http://www.sec.gov.
* Citizens Global Equity Fund charges a redemption fee of 2% on shares redeemed
or exchanged within 60 days of purchase.
97
NOTES
98
NOTES
99
NOTES
100
NOTES
101
[CITIZENS FUNDS LOGO]
TRUSTEES MANAGER TRANSFER AND
Walter D. Bristol, Jr. Citizens Advisers, Inc. ACCOUNTING AGENT
Sophia Collier One Harbour Place BISYS Fund Services Ohio, Inc.
Jeannie H. Diefenderfer Suite 400 Columbus, OH 43219
Pablo S. Eisenberg Portsmouth, NH 03801
Orlando Hernandez 800.223.7010 LEGAL COUNSEL
Martha S. Pope 603.436.5152 Bingham McCutchen LLP
Boston, MA 02110
DISTRIBUTOR CUSTODIAN
Citizens Securities, Inc. Fifth Third Bank INDEPENDENT REGISTERED
One Harbour Place Cincinnati, OH 45263 PUBLIC ACCOUNTING FIRM
Suite 400 PricewaterhouseCoopers LLP
Portsmouth, NH 03801 Columbus, OH 43215
800.223.7010
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.
(C) 2005 CITIZENS ADVISERS, INC. NOT A PART OF THE ANNUAL REPORT
ITEM 2. CODE OF ETHICS.
(a) A code of ethics that applies to the registrant's principal executive
officer and principal financial officer was previously filed as an exhibit
to the registrant's annual Form N-CSR.
(c) During the period covered by this report, no amendments were made to the
provisions of the code of ethics.
(d) 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.
The Board of Trustees has appointed PricewaterhouseCoopers ("PWC") to serve as
independent accountants to the series of the registrant.
(a) Audit Fees. For the fiscal years ended June 30, 2004 and June 30, 2005,
("PWC") billed audit fees to the registrant in the amount of $142,000
and $138,600 respectively.
(b) Audit Related Fees. None.
(c) Tax Fees. For the fiscal years ended June 30, 2004 and June 30, 2005,
PWC billed tax fees to the registrant in the amount of $32,000 and
$36,960 respectively. The fees included under "Tax Fees" are fees
associated with tax compliance, tax advice and tax planning, including
services relating to the filing or amendment of federal, state or local
income tax returns, regulated investment company qualification reviews
and tax distribution and analysis.
(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, 2004 and June 30, 2005, 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
A schedule of investments for each series of the Registrant is included as part
of the report to shareholders of such series under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
Not Applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not Applicable
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not Applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 11. 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 second fiscal quarter of the period covered
by this report that have materially affected or are reasonably likely to
materially affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) A code of ethics that is the subject of the disclosure required by Item 2
is 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 24, 2005
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
-----------------------
Sophia Collier
President
Date: August 24, 2005
By: /s/ Sean P. Driscoll
-----------------------
Sean P. Driscoll
Treasurer
Date: August 24, 2005