UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-03626 CITIZENS FUNDS One Harbour Place Suite 400 Portsmouth, New Hampshire 03801 Sophia Collier Citizens Advisers, Inc. One Harbour Place, Suite 400 Portsmouth, NH 03801 Registrant's telephone number, including area code: (603) 436-5152 Date of fiscal year end: June 30 Date of reporting period: June 30, 2007 ITEM 1. REPORTS TO STOCKHOLDERS. (CITIZENS FUNDS LOGO) ANNUAL REPORT AND SUPPLEMENTAL COMMENTARY JUNE 30, 2007 (DOLPHIN PICTURE OF THE WORLD) CITIZENS FOR RESPONSIBLE INVESTING TABLE OF CONTENTS SUPPLEMENTAL COMMENTARY Letter from the president ................................................ 1 Citizens focus ........................................................... 3 ANNUAL REPORT Risks of mutual fund investing ........................................... 6 Benchmarks ............................................................... 7 Portfolio review disclosure .............................................. 8 Portfolio review ......................................................... 9 Portfolio composition .................................................... 40 Report of independent registered public accounting firm .................. 42 Holdings ................................................................. 44 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 ................................................. 89 Shareholder services ..................................................... 100 PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF CITIZENS FUNDS CAREFULLY BEFORE INVESTING. FOR THIS AND OTHER INFORMATION, PLEASE VISIT WWW.CITIZENSFUNDS.COM OR CALL 800.223.7010 FOR A FREE PROSPECTUS AND READ IT CAREFULLY BEFORE INVESTING. COVER IMAGE: NASA Goddard Space Flight Center, Blue Marble Series-Eastern Hemisphere, HTTP://VISIBLEEARTH.NASA.GOV LETTER FROM THE PRESIDENT Dear Shareholders: Stock markets rallied strongly during the one-year period ended June 30 that comprised the funds' fiscal 2007. It is very satisfying to see double-digit one-year returns across all of our equity funds. Our approach of emphasizing companies that we believe have excellent financial prospects and a good record of social responsibility was a winning formula. I am particularly pleased with the results of Citizens Value Fund which is approaching five years under our in-house management. Bill Rocco at Morningstar has called this fund a "worthy core holding for socially conscious investors." We agree and hope you will consider the fund as an option for your socially responsible investment portfolio. An interesting discussion that has been taking place in the socially responsible investing community is the consideration of how socially responsible investors can have the greatest impact. Some funds have recently adopted what they are calling a "positive" approach to screening, looking for companies that have positive social characteristics instead of screening out those with negative practices. Other fund groups are actively investing in specific companies in order to gain a platform for advocating change. Still others are investing with an eye only to financial return but charging their social research team with executing specific social initiatives. Each of these strategies presents an opportunity and we look forward to partnering in the future with funds taking new approaches, as well as strengthening our relationships with existing institutional investors employing traditional social screens similar to Citizens. (PHOTO OF SOPHIA COLLIER) "IT IS VERY SATISFYING TO SEE DOUBLE-DIGIT ONE-YEAR RETURNS ACROSS ALL OF OUR EQUITY FUNDS." - -- SOPHIA COLLIER, PRESIDENT 1 As I look to the future I feel encouraged. I believe this is a good time to be a socially responsible investor. The financial markets are doing well and there has never been greater awareness of the importance of environmental and corporate responsibility. Sincerely yours, /s/ Sophia Collier Sophia Collier President Views expressed are exclusively those of Citizens Advisers and are not intended as financial advice. See pages 6-8, and the funds' prospectus for important fund risks and other disclosures. In considering performance of the funds for the one-year period, you should also consider the funds' longer-term track records described elsewhere in this report. Of course, data presented reflects past performance which does not guarantee future results. 2 CITIZENS FOCUS (PHOTO OF JOANNE DOWDELL) "WE BELIEVE THE NEXT DECADE WILL SHOW AN EVEN GREATER NUMBER OF INDIVIDUAL SHAREHOLDERS, INSTITUTIONAL INVESTORS AND MONEY MANAGERS INCORPORATING SOCIAL AND ENVIRONMENT CRITERIA IN THEIR INVESTMENT PROCESS." - -- JOANNE DOWDELL VP OF CORPORATE RESPONSIBILITY SHAREHOLDER RIGHTS -- NEVER AN ASSUMED PRIVILEGE At Citizens we believe strongly in defending shareholders' rights to file non-binding resolutions and have access to the proxy to nominate directors. These prerogatives represent the opportunity to maintain open communication between shareholders and companies, as well as an avenue for more active participation in companies' policies and direction. Although the debate on these rights has been ongoing for many years, it re-emerged with more force during the period when the U.S. Securities and Exchange Commission (SEC) hosted a series of roundtable discussions to explore changes to existing rules. One roundtable focused on the possibility of substituting non-binding shareholder resolutions with formal online communications between shareholders and companies; another proposal would require an ownership threshold of at least 5% of outstanding shares in order to propose changing corporate by-laws to allow shareholders to nominate director candidates. We believe shareholder proposals are imperative to bringing about positive change and encouraging meaningful dialogue between shareholders, management and corporate board members. According to the Social Investment Forum, "More than 95% of the shareowner resolutions filed in the last 35 years have been 'advisory,' yet have had a profound and identifiable impact on business thinking and decision making in corporate board rooms." Citizens supported many noteworthy proposals during the period. For example, one proposal requested that companies amend their by-laws from requiring a super majority to elect directors to requiring a simple majority. 3 We supported this proposal at the annual shareholder meetings of Johnson & Johnson, JCPenney, Kimberly-Clark, Kellogg, TJX, Valero, Staples, JPMorgan Chase, IBM, Praxair and Newell Rubbermaid. According to Institutional Shareholder Services (ISS), Citizens' third-party proxy voting agent, "Support for a majority standard averaged 49.3% at 29 meetings where results are known, up from 47.7% in 2006." Most notable was the 76.2% of shareholders who supported the proposal at Praxair and the more than 80% who supported the same proposal at Newell Rubbermaid. Another proposal we favored was a shareholder resolution on Google's proxy statement calling for management to institute policies that would help to protect free access to the Internet. With Internet-based communications playing a more substantial and contributory role in the lives of all citizens, we would like to see technology pioneers like Google remain committed to a free and open forum for sharing information. From proposals petitioning companies to produce sustainability reports to others seeking greater transparency and disclosure of corporate political contributions, Citizens and other institutional and individual shareholders have relied on non-binding proposals to help communicate shareholder concerns. We will continue to monitor developments in the area of shareholder rights and communicate our concerns to the SEC. To view our proxy voting record, go to www.citizensfunds.com/responsible/proxy.html. THE NEW FACE OF CORPORATE SOCIAL RESPONSIBILITY Each year Citizens' social research department employs interns who are interested in acquiring hands-on experience in socially responsible investing. During the year we brought on three exceptional students from Temple University, University of New Hampshire and Babson College Graduate School of Business. Their time at Citizens has allowed them to explore first-hand an emerging new career path: Chief Sustainability Officers are being designated more and more frequently, not only in investment firms but in corporations around the globe. "These are not simply environmental watchdogs, there to keep operations safe and regulators at bay. The new environmental chiefs are helping companies profit from the push to go green...their rise shows that companies finally realize that sustainability and efficiency go hand in hand."(1) - ---------- (1) Companies Giving Green and Office, Claudia Deutsch, The New York Times, July 3, 2007 4 This year our interns will review more than 300 companies held in Citizens' portfolios and verify that each company continues to pass our exclusionary screens. They also will participate in regular investment team meetings in order to experience our integrated investment process at work. We believe that exposing students to our innovative process will help them better prepare for careers in investment management and corporate responsibility--positions that will play an increasingly significant role in the way companies compete and are held accountable. CITIZENS' INTEGRATED INVESTMENT PROCESS DRIVES MOMENTUM As pioneers integrating environmental, social and governance factors (ESG) into the investment process, Citizens' social research team has been closely monitoring an important shift that has been taking place in the investment community--asset managers in the U.S. and abroad are, at long last, recognizing the importance of evaluating ESG factors when making their investment decisions. A July 6, 2007 article in Ethics Monitor noted, "The people that represent the largest amounts of money in the world--institutional investors--are integrating environmental, social and governance considerations into their investment strategies. That means mutual funds, hedge funds, pension funds and corporate investment programs are seeking out companies that act with more social responsibility and are pressuring those companies in which they already invest to become more ethical." Many credit the corporate accounting scandals as the catalyst; others point to global climate change and the human and financial devastation caused by Hurricane Katrina. We feel these and other factors created a tipping point of awareness that legislators, regulators, world leaders, corporations and Wall Street can no longer ignore. For over two decades Citizens' shareholders have come to rely on our rigorous process of identifying companies worthy of investment based on their fundamental, corporate governance, and social and environmental business models. We believe the next decade will show an even greater number of individual shareholders, institutional investors and money managers incorporating ESG criteria in their investment process. As a leader in the process, we are pleased to see others following in our footsteps. 5 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 estimates of 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. 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 downgraded or may default, potentially reducing the fund's income level and share price. HIGH - YIELD SECURITY RISKS High-yield securities (so-called "junk bonds") offer the potential for higher returns but present significant volatility and risk of loss of principal and interest. 6 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? Below is a brief description of the benchmarks we use. Please keep in mind that these benchmark indices are unmanaged, meaning you cannot 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 of the U.S. equity universe. 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 Growth 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 Growth Index covers the mid-cap segment of the U.S. equity universe and 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 Growth Index covers the small-cap segment of the U.S. equity universe. The MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD INDEX is a market capitalization-weighted equity index of more than 1,500 stocks traded in 23 world markets. 7 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. PORTFOLIO REVIEW DISCLOSURE The information in each portfolio review was provided by the portfolio manager(s) for each fund. Any views and opinions expressed are those of the portfolio manager(s). Portfolio managers with different funds and strategies may have opinions that vary from their colleagues'. Citizens Advisers considers diversity of investment opinion to be a strength that contributes to healthy debate and is part of a strong overall investment process. The portfolio reviews are provided for informational purposes only and should not be used or construed as a recommendation for any security. 8 CITIZENS CORE GROWTH FUND (PHOTO OF JONATHAN WHITE) (PHOTO OF SOPHIA COLLIER) (PHOTO OF ROBERT MAGAN) "IN JANUARY 2007, WE REFOCUSED THE PORTFOLIO EMPHASIZING COMPANIES THAT WE BELIEVED HAD THE TWIN VIRTUES OF STRONG NEAR-TERM GROWTH PROSPECTS AND GOOD RELATIVE VALUE FOR THAT GROWTH. THE RESULTS HAVE BEEN GOOD." CO - PORTFOLIO MANAGERS Jonathan White, CFA Sophia Collier Robert Magan, CFA 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 6-8 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW (UNAUDITED) HOW DID THE FUND PERFORM? Citizens Core Growth Fund, standard shares, gained 11.56% for the one-year period ended June 30, 2007. This trailed the one-year return for the Russell 1000 Growth Index, which advanced 19.04%, and the broader S&P 500 Index which gained 20.59%. The fund's underperformance versus the benchmark occurred exclusively in the first half of the fiscal year. The portfolio was positioned in what turned out to be an excessively defensive posture with overweights in stalwart sectors such as consumer staples and healthcare. The rationale for the fund's caution was concern over a slowing economy, high oil prices and international conflict. Despite this negative backdrop, the stock market began to rally in July 2006 when global growth was stronger than expected. In this environment the fund's holdings gained in value but not to the same 9 CITIZENS CORE GROWTH FUND CITIZENS CORE GROWTH FUND PERFORMANCE (as of 6.30.07) AVERAGE ANNUAL RETURN ---------------------------------- EXPENSE RATIOS* Ticker 1 5 10 Since --------------- Share class symbol year years years inception Gross Net - ----------- ------ ------ ----- ----- --------- ------ ----- STANDARD SHARES WAIDX 11.56% 6.36% 4.09% 8.52% 1.52% 1.52% INSTITUTIONAL SHARES WINIX 12.39% 7.13% 4.83% 8.01% 0.80% 0.80% ADMINISTRATIVE SHARES CGADX 12.06% 6.79% NA -3.44% 1.12% 1.12% * Reflects the expense ratio as reported in the Prospectus dated August 29, 2006. PERFORMANCE OVER TIME (as of 6.30.07) This chart shows performance since inception of a $10,000 hypothetical investment in the fund's Standard shares, compared with the performance over the same period for the indices shown. (PERFORMANCE GRAPH) CITIZENS CORE GROWTH FUND - STANDARD SHARES PERFORMANCE SINCE INCEPTION 03/03/95 Core Growth Russell 1000 Growth S&P 500 DATE FUND VALUE INDEX VALUE INDEX VALUE - ---- ----------- ------------------- ----------- 3/3/1995 $10,000.00 $10,000.00 $10,000.00 3/31/1995 $10,100.00 $10,292.00 $10,340.00 4/30/1995 $10,400.00 $10,517.39 $10,644.00 5/31/1995 $10,530.00 $10,883.40 $11,069.76 6/30/1995 $10,940.00 $11,303.50 $11,326.57 7/31/1995 $11,360.00 $11,773.72 $11,702.62 8/31/1995 $11,450.00 $11,786.68 $11,731.87 9/30/1995 $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 1/31/1996 $12,646.60 $13,322.30 $13,403.97 2/26/1996 $12,878.20 $13,566.09 $13,528.63 3/31/1996 $12,858.10 $13,583.73 $13,658.51 4/30/1996 $13,200.40 $13,940.98 $13,859.29 5/31/1996 $13,593.10 $14,427.52 $14,216.86 6/30/1996 $13,502.50 $14,447.72 $14,270.88 7/31/1996 $12,908.40 $13,601.09 $13,640.11 8/30/1996 $13,230.60 $13,951.99 $13,927.91 9/30/1996 $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 1/31/1997 $16,415.60 $16,983.59 $16,935.26 2/28/1997 $16,517.30 $16,868.10 $17,067.36 3/31/1997 $15,551.10 $15,955.54 $16,365.89 4/30/1997 $16,669.90 $17,014.99 $17,342.93 5/31/1997 $17,697.10 $18,243.47 $18,399.11 6/30/1997 $18,348.00 $18,973.21 $19,223.40 7/31/1997 $20,188.90 $20,650.44 $20,753.58 8/29/1997 $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 1/31/1998 $21,201.70 $21,327.62 $21,495.05 2/28/1998 $22,867.10 $22,931.45 $23,044.85 3/31/1998 $23,977.30 $23,846.42 $24,224.74 4/30/1998 $24,222.90 $24,175.50 $24,469.41 5/31/1998 $23,529.00 $23,488.92 $24,048.54 6/30/1998 $25,044.90 $24,926.44 $25,024.91 7/31/1998 $24,938.10 $24,761.92 $24,759.65 8/31/1998 $21,212.40 $21,045.16 $21,179.40 9/30/1998 $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 1/31/1999 $31,679.40 $30,409.10 $28,477.36 2/28/1999 $29,757.50 $29,019.40 $27,591.72 3/31/1999 $31,042.40 $30,548.73 $28,695.39 4/30/1999 $31,873.70 $30,588.44 $29,805.90 5/31/1999 $31,020.80 $29,649.37 $29,102.48 6/30/1999 $32,953.50 $31,724.83 $30,717.67 7/31/1999 $32,251.70 $30,715.98 $29,759.27 8/31/1999 $31,981.70 $31,216.65 $29,613.45 9/30/1999 $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 1/31/2000 $35,181.60 $36,452.52 $31,426.36 2/29/2000 $36,060.00 $38,235.05 $30,832.41 3/31/2000 $39,539.40 $40,972.68 $33,847.81 4/30/2000 $37,109.60 $39,022.38 $32,829.00 5/31/2000 $35,170.20 $37,055.65 $32,156.00 6/30/2000 $37,178.00 $39,864.47 $32,950.25 7/31/2000 $36,151.30 $38,202.12 $32,436.23 8/31/2000 $38,227.50 $41,659.41 $34,450.52 9/30/2000 $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 1/31/2001 $32,157.20 $31,719.64 $31,148.45 2/28/2001 $27,056.30 $26,333.64 $28,307.71 3/31/2001 $24,710.40 $23,468.54 $26,513.00 4/30/2001 $27,032.30 $26,437.32 $28,573.07 5/31/2001 $27,080.40 $26,048.69 $28,764.50 6/30/2001 $26,611.20 $25,444.36 $28,065.53 7/31/2001 $26,310.40 $24,808.25 $27,790.49 8/31/2001 $24,277.30 $22,778.93 $26,050.80 9/30/2001 $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 1/31/2002 $23,904.40 $23,193.32 $26,119.22 2/28/2002 $23,002.10 $22,230.79 $25,615.12 3/31/2002 $23,880.30 $22,999.98 $26,578.25 4/30/2002 $22,448.70 $21,123.18 $24,967.61 5/31/2002 $22,039.70 $20,612.00 $24,782.85 6/30/2002 $20,126.80 $18,705.39 $23,018.31 7/31/2002 $18,635.10 $17,676.59 $21,225.18 8/31/2002 $18,562.90 $17,729.62 $21,365.27 9/30/2002 $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 1/31/2003 $17,516.20 $16,612.68 $20,110.09 2/28/2003 $17,323.70 $16,536.26 $19,808.44 3/31/2003 $17,480.10 $16,843.84 $20,000.58 4/30/2003 $18,562.90 $18,088.60 $21,648.62 5/31/2003 $19,597.50 $18,991.22 $22,789.51 6/30/2003 $19,777.90 $19,253.30 $23,081.21 7/31/2003 $20,283.20 $19,732.71 $23,487.44 8/31/2003 $20,908.80 $20,224.05 $23,945.45 9/30/2003 $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 1/31/2004 $22,352.40 $22,543.51 $27,065.11 2/29/2004 $22,280.30 $22,687.79 $27,441.31 3/31/2004 $22,015.60 $22,265.80 $27,026.95 4/30/2004 $21,402.00 $22,007.51 $26,602.63 5/31/2004 $21,726.90 $22,416.85 $26,967.08 6/30/2004 $21,775.00 $22,697.06 $27,490.24 7/31/2004 $20,896.80 $21,414.68 $26,580.32 8/31/2004 $20,644.10 $21,309.75 $26,686.64 9/30/2004 $21,317.80 $21,512.19 $26,974.85 10/31/2004 $21,714.80 $21,847.78 $27,387.57 11/30/2004 $22,689.30 $22,599.34 $28,496.77 12/31/2004 $23,363.00 $23,485.24 $29,465.66 1/31/2005 $22,857.70 $22,703.18 $28,746.69 2/28/2005 $23,206.60 $22,943.83 $29,350.37 3/31/2005 $22,978.00 $22,526.26 $28,830.87 4/30/2005 $22,376.50 $22,098.26 $28,283.09 5/31/2005 $23,314.90 $23,167.81 $29,182.49 6/30/2005 $23,723.90 $23,082.09 $29,223.34 7/31/2005 $24,722.68 $24,210.81 $30,310.45 8/31/2005 $24,589.17 $23,898.49 $30,034.63 9/30/2005 $25,167.02 $24,008.42 $30,277.91 10/31/2005 $24,469.89 $23,775.54 $29,772.27 11/30/2005 $25,529.44 $24,800.26 $30,897.66 12/31/2005 $25,613.69 $24,723.38 $30,906.93 1/31/2006 $26,394.90 $25,158.51 $31,725.96 2/28/2006 $26,191.66 $25,118.26 $31,811.62 3/31/2006 $26,372.39 $25,490.01 $32,206.08 4/30/2006 $26,251.07 $25,454.32 $32,637.65 5/31/2006 $24,578.88 $24,591.42 $31,697.68 6/30/2006 $24,554.30 $24,495.52 $31,742.06 7/31/2006 $23,844.68 $24,030.10 $31,938.86 8/31/2006 $23,916.22 $24,779.84 $32,699.00 9/30/2006 $24,169.73 $25,461.29 $33,542.64 10/31/2006 $24,662.79 $26,357.52 $34,636.13 11/30/2006 $24,963.68 $26,879.40 $35,294.22 12/31/2006 $25,095.98 $26,970.79 $35,788.33 1/31/2007 $25,552.73 $27,663.94 $36,328.74 2/28/2007 $25,059.56 $27,143.86 $35,616.69 3/31/2007 $25,613.38 $27,290.44 $36,015.60 4/30/2007 $26,768.54 $28,575.82 $37,611.09 5/31/2007 $27,756.30 $29,604.55 $38,923.72 6/30/2007 $27,392.78 $29,154.46 $38,277.75 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. 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 cost. 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. extent as the market as a whole. In January 2007, we re-evaluated the fund's positioning and refocused the portfolio emphasizing companies that we believed had the twin virtues of strong near-term growth prospects and good relative value for that growth. In the second half of the fiscal year the fund's standard shares gained 9.16%, outperforming the Russell Growth 1000 Index return of 8.13% and the S&P 500 Index return of 6.96%. The lesson we take from the first half of the fiscal year is that we need to focus more on specific stock picking and CITIZENS CORE GROWTH FUND 10 less on a macroeconomic theme. Regardless of the changing economic conditions, we believe there are always some companies that are doing well and presenting attractive value for their growth prospects. We are focused on finding these names and placing them in the portfolio. The strongest sector for the fund during the fiscal year was industrials, which generated almost 0.76% of relative outperformance versus the Russell 1000 Growth Index during the period. The average company within the fund's holdings in the sector was up by 29.25% during the period compared to a return of only 15.38% for the average name within the Russell Index industrial group. Standout companies within the industrials group were specialty metal component maker Precision Castparts and automotive company Volvo AB, which contributed 1.69% and 0.50% to the fund's performance, respectively. Precision Castparts is a good example of what we are seeking in our growth-focused strategy. The company is forecast to grow its earnings by 35% in the next twelve months and its forecast long-term growth rate of 16% is 31% better than its average peer. Yet this excellent growth company trades at a price earnings over growth ratio that is 5% less than the average peer. This provides us what we believe is high growth potential at an attractive valuation. Another outperforming sector was telecommunications services where AT&T appreciated by more than 36%, and added 0.63% to the fund's return during the period. AT&T is the new name of the company that was originally known as Southwest Bell. This remarkable company began an acquisition juggernaut in the mid-1990s that continued in full force in 2007 with the final crowning achievement of buying its original parent company AT&T. Underperforming sectors within the period included financials and information technology. Within information technology, the fund's average holding appreciated by 24.64%, quite close to the 25.62% return of the average company in the Russell 1000 Growth Index. However the fund had only about 15% of its assets in this sector versus more than 25% for the benchmark. One stand out performer within information technology was information technology consultancy Accenture, which appreciated by almost 51%, and generated 0.59% of the fund's return during the period. Another winner within information technology was microprocessor Freescale. It produced an over 40% return based on its acquisition during the period, and contributed 0.54% of the fund's gain. High tech losers included Broadcom, which declined by more than 25% and was sold during 11 CITIZENS CORE GROWTH FUND the period, and Qualcomm, down 13.2% and also sold. Within financials our approximately 20% weight returned 11.63% with our strong performer being JPMorgan Chase & Co. It rose 15.36% during the period, and added 0.40% to the fund's performance. The fund's most significant decliners were Rockwell Automation and Valero Energy Corp., which declined by almost 22% and 21%, and detracted 0.56% and 0.59%, respectively, from the fund's return during the period. Rockwell had been a strong performer for the fund in the prior fiscal year, and had been doing very well with global growth and investor-friendly spin offs. In early summer the company had an earnings disappointment and provided future earnings guidance that was more conservative than investors expected. The shares fell sharply and we sold the fund's position in the company. Valero Energy Corp. declined with oil prices over the summer. We trimmed the fund's position in October and sold it in its entirety in January. OUTLOOK Looking ahead, we feel the fund now has the right strategy for the current economic conditions. We think it makes sense to look for companies that are growing now and have attractive valuations for their growth potential. We also feel positive about the economy and its prospects. While the economy within the U.S. has slowed, we believe it is far from recession or decline. In fact, the economy may have already bottomed and be in the process of re-accelerating. Employment is good and interest rates are still low--both positive indicators for the future of consumer spending and investment. Further, as we have seen in 2007, the U.S. is not the only economy in the world that can drive growth. We believe the fund is well positioned to benefit from opportunities within transitional economic conditions. CITIZENS CORE GROWTH FUND 12 CITIZENS EMERGING GROWTH FUND (PHOTO OF J. MICHAEL GALLIPO) (PHOTO OF JONATHAN WHITE) "A NOTABLE TREND DURING THE FISCAL YEAR WAS A HIGH LEVEL OF MERGER AND ACQUISITION ACTIVITY FROM BOTH CORPORATE BUYERS AS WELL AS PRIVATE EQUITY FUNDS. THE FUND BENEFITED FROM THIS TREND WITH FIVE OF ITS HOLDINGS AGREEING TO BE ACQUIRED DURING THE PERIOD." CO - PORTFOLIO MANAGERS J. Michael Gallipo, CFA Jonathan White, CFA 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 6-8 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW (UNAUDITED) HOW DID THE FUND PERFORM? For the one-year period ended June 30, 2007, the Citizens Emerging Growth Fund, standard shares, gained 13.29%. This trailed the one-year return of the fund's benchmark, the Russell Midcap Growth Index, which advanced 19.73% during the period. The fund experienced periods in July/August and late October/early November that accounted for much of the underperformance. Consumer discretionary stocks were the largest contributors to total return with the fund's stocks rising over 22% and accounting for 4.85% of the fund's gains during the period. Strength within the sector was widespread with six stocks generating returns in excess of 35%. Information technology stocks also made a considerable contribution to the fund's return during the fiscal year and provided the greatest upside relative to the fund's benchmark. 13 CITIZENS CORE GROWTH FUND CITIZENS EMERGING GROWTH FUND PERFORMANCE (as of 6.30.07) AVERAGE ANNUAL RETURN EXPENSE --------------------------------- RATIOS* Ticker 1 5 10 Since ------------- Share class symbol year years years inception Gross Net - ----------- ------ ----- ----- ----- --------- ----- ----- STANDARD SHARES WAEGX 13.29% 9.47% 9.26% 11.69% 1.90% 1.90% INSTITUTIONAL SHARES CEGIX 13.85% 10.14% NA 2.27% 1.35% 1.35% ADMINISTRATIVE SHARES CGRDX 13.66% 9.84% NA -1.73% 1.60% 1.60% * Reflects the expense ratio as reported in the Prospectus dated August 29, 2006. PERFORMANCE OVER TIME (as of 6.30.07) This chart shows performance since inception of a $10,000 hypothetical investment in the fund's Standard shares, compared with the performance over the same period for the index shown. (PERFORMANCE GRAPH) CITIZENS EMERGING GROWTH FUND - STANDARD SHARES PERFORMANCE SINCE INCEPTION 02/08/94 DATE FUND VALUE INDEX VALUE - ---- ---------- ----------- 2/8/1994 $10,000.00 $10,000.00 2/28/1994 $10,060.00 $ 9,920.00 3/31/1994 $ 9,880.00 $ 9,452.77 4/30/1994 $10,010.00 $ 9,430.08 5/31/1994 $10,070.00 $ 9,444.23 6/30/1994 $ 9,930.00 $ 9,038.12 7/31/1994 $10,140.00 $ 9,288.48 8/31/1994 $10,550.00 $ 9,842.07 9/30/1994 $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 1/31/1995 $10,711.80 $ 9,659.20 2/28/1995 $11,000.50 $10,173.07 3/31/1995 $11,330.40 $10,576.94 4/30/1995 $11,381.90 $10,665.78 5/31/1995 $11,299.40 $10,928.16 6/30/1995 $12,237.60 $11,425.39 7/31/1995 $13,248.00 $12,144.05 8/31/1995 $13,289.20 $12,276.42 9/30/1995 $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 1/31/1996 $14,969.10 $13,013.46 2/26/1996 $15,520.00 $13,505.37 3/31/1996 $15,742.70 $13,612.06 4/30/1996 $16,938.40 $14,269.53 5/31/1996 $17,899.60 $14,560.63 6/30/1996 $17,430.70 $14,120.89 7/31/1996 $16,750.80 $13,025.11 8/30/1996 $17,301.80 $13,728.47 9/30/1996 $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 1/31/1997 $18,031.30 $15,686.60 2/28/1997 $16,877.10 $15,341.50 3/31/1997 $15,453.50 $14,474.70 4/30/1997 $15,953.70 $14,829.33 5/31/1997 $17,415.70 $16,158.04 6/30/1997 $18,133.90 $16,605.62 7/31/1997 $20,262.70 $18,194.78 8/29/1997 $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 1/31/1998 $20,057.70 $18,075.28 2/28/1998 $22,133.60 $19,774.36 3/31/1998 $24,140.80 $20,602.90 4/30/1998 $23,852.10 $20,883.10 5/31/1998 $22,669.80 $20,024.81 6/30/1998 $24,127.00 $20,591.51 7/31/1998 $23,783.30 $19,710.19 8/31/1998 $19,191.60 $15,947.52 9/30/1998 $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 1/31/1999 $29,367.50 $22,346.17 2/28/1999 $27,044.70 $21,253.45 3/31/1999 $28,447.50 $22,437.26 4/30/1999 $29,141.30 $23,460.40 5/31/1999 $28,975.40 $23,157.76 6/30/1999 $32,836.80 $24,774.18 7/31/1999 $33,198.80 $23,986.36 8/31/1999 $33,636.20 $23,736.90 9/30/1999 $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 1/31/2000 $46,724.80 $32,818.08 2/29/2000 $58,566.80 $39,716.44 3/31/2000 $59,656.30 $39,756.16 4/30/2000 $59,495.60 $35,895.84 5/31/2000 $53,547.80 $33,279.03 6/30/2000 $59,781.40 $36,809.94 7/31/2000 $56,512.80 $34,479.87 8/31/2000 $62,103.30 $39,679.43 9/30/2000 $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 1/31/2001 $46,957.10 $30,622.25 2/28/2001 $40,853.90 $25,324.60 3/31/2001 $36,406.50 $21,700.65 4/30/2001 $39,339.90 $25,318.15 5/31/2001 $38,464.60 $25,199.16 6/30/2001 $37,352.80 $25,211.75 7/31/2001 $35,010.80 $23,509.96 8/31/2001 $32,881.80 $21,805.49 9/30/2001 $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 1/31/2002 $32,314.10 $22,375.27 2/28/2002 $30,658.10 $21,106.59 3/31/2002 $33,402.20 $22,717.03 4/30/2002 $31,675.30 $21,515.30 5/31/2002 $30,539.90 $20,874.14 6/30/2002 $27,961.40 $18,569.64 7/31/2002 $25,903.30 $16,764.67 8/31/2002 $25,170.00 $16,705.99 9/30/2002 $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 1/31/2003 $22,473.20 $16,623.36 2/28/2003 $22,567.80 $16,478.74 3/31/2003 $22,378.60 $16,785.24 4/30/2003 $23,821.60 $17,928.32 5/31/2003 $25,501.10 $19,653.02 6/30/2003 $25,926.90 $19,934.06 7/31/2003 $26,707.60 $20,645.71 8/31/2003 $28,671.00 $21,783.28 9/30/2003 $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 1/31/2004 $30,989.30 $24,749.96 2/29/2004 $31,107.60 $25,165.76 3/31/2004 $30,894.70 $25,117.95 4/30/2004 $29,830.20 $24,409.62 5/31/2004 $30,516.20 $24,985.69 6/30/2004 $30,776.40 $25,382.96 7/31/2004 $28,789.30 $23,702.61 8/31/2004 $28,363.50 $23,411.07 9/30/2004 $29,522.70 $24,284.30 10/31/2004 $30,587.20 $25,107.54 11/30/2004 $31,746.30 $26,403.09 12/31/2004 $32,787.20 $27,667.80 1/31/2005 $31,462.40 $26,926.30 2/28/2005 $32,645.20 $27,607.53 3/31/2005 $32,385.00 $27,204.46 4/30/2005 $30,918.40 $26,127.17 5/31/2005 $32,976.40 $27,624.25 6/30/2005 $33,354.90 $28,138.06 7/31/2005 $34,585.70 $29,781.33 8/31/2005 $34,066.91 $29,599.66 9/30/2005 $34,492.75 $29,981.50 10/31/2005 $34,113.33 $29,100.04 11/30/2005 $36,146.48 $30,680.17 12/31/2005 $36,786.27 $31,017.66 1/31/2006 $39,626.17 $32,875.61 2/28/2006 $39,269.54 $32,471.24 3/31/2006 $41,115.21 $33,377.19 4/30/2006 $41,801.83 $33,517.37 5/31/2006 $38,583.09 $31,938.71 6/30/2006 $38,795.30 $31,807.76 7/31/2006 $36,878.81 $30,669.04 8/31/2006 $37,184.90 $31,374.43 9/30/2006 $38,014.13 $32,089.76 10/31/2006 $39,006.30 $33,322.01 11/30/2006 $40,094.57 $34,628.23 12/31/2006 $39,525.23 $34,316.58 1/31/2007 $41,086.47 $35,565.70 2/28/2007 $41,037.17 $35,487.46 3/31/2007 $41,816.88 $35,671.99 4/30/2007 $42,715.94 $37,237.99 5/31/2007 $44,561.27 $38,749.86 6/30/2007 $43,951.19 $38,083.43 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. 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 cost. 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. Effective stock selection in the sector generated a 23.71% return during the period, considerably better than the comparable benchmark return of 18.12%. The fund struggled in the industrials sector during the period where the stock selections posted the lowest absolute return, 4.32%, of any sector, resulting in the worst performance relative to the benchmark. We saw a decided shift within the sector away from asset-light companies such as logistics and consulting towards more traditional "heavy" industries such CITIZENS EMERGING GROWTH FUND 14 as construction, defense and equipment. The fund was not well-positioned to benefit from that shift. Materials was another sector where the fund's stock selection hurt performance. There were numerous takeovers in the sector and strong performance within the benchmark from a number of companies that do not meet Citizens' social screening criteria. Although the fund's cash levels during the period averaged a modest 4.2%, that allocation still subtracted about 0.75% from the fund's return relative to the benchmark during that time. A notable trend during the fiscal year was a high level of merger and acquisition activity from both corporate buyers as well as private equity funds. The fund benefited from this trend with five of its holdings agreeing to be acquired during the period. One of the themes emphasized in the fund was the growth of data traffic driven by Web 2.0 applications such as music and video. One company that fit into this theme was CommScope, Inc., which makes coaxial and other cables for high-speed communication applications. The stock was a top performer for the fund during the period rising 85.71% and contributing 0.90% to the fund's total return. The company benefited from increased capital spending from both cable and traditional telecommunications providers. Despite the strong performance, we believe the operating environment is still favorable and that CommScope's recently announced acquisition of Andrew Corp. provides additional upside potential. In a repeat performance, MEMC Electronic Materials improved from the second largest contributor to performance in the prior fiscal year to the top contributor during the period. It returned 63.22% and contributed 1.21% to total fund return. The company, which manufactures silicon wafers for a variety of applications, has benefited from a shortage of polysilicon driven by increased production of solar panels. Although we have trimmed the position from time to time, the company remains one of our favorite ways to get exposure to alternative energy. Trailing just behind MEMC in contribution to the fund's return was Polo Ralph Lauren Corp. which rose 78.71% during the period and contributed 1.18% to the fund's total return. The company, which makes and licenses high-end apparel, accessories, fragrances and home furnishings under such brands as Polo, Polo Sport and Ralph Lauren, benefited from continued strength in high-end consumer spending. 15 CITIZENS EMERGING GROWTH FUND Expeditors International of Washington, Inc. was the largest detractor from the fund's performance during the fiscal year. The stock had a negative return of 26.29% during the period and detracted 0.89% from the fund's performance. The company is a global logistics company whose earnings continued to grow at a rapid rate, but was hurt by falling short of investor expectations over multiple quarters and the general shift out of asset-light industrials. Choice Hotels International, Inc., after being a top performer for the fund in the prior fiscal year, detracted from fund performance this fiscal year. The stock declined 31.45% and this subtracted 0.66% from the fund's total return. The company operates mid-priced hotels such as Comfort Inn and Econo Lodge. During the fiscal year, the company had a frustrating pattern of erratic earnings guidance which reduced our confidence in management's visibility on its core operating business. As a result, the fund chose to exit its position in the company. OUTLOOK Our outlook for the coming year remains cautiously optimistic. We believe that the Federal Reserve Board (the Fed) will remain on the sidelines. The Fed seems to have been successful in slowing the economy without inducing a recession or having a great impact on the labor market. The weakness in the housing market has impacted consumer spending domestically, but this has been partially offset by a pick-up in global growth. As a result, estimates of corporate earnings growth declined significantly. However, we still expect growth to remain positive and provide underlying support for the equity markets. There are a number of risks that we continue to monitor closely. Foremost is the risk that the current weakness in the housing market and especially in the subprime mortgage market may have a wider impact on the economy resulting in a harder landing. After contracting for several years, price to earnings multiples for the major indices have been expanding and a reversal of this trend could put pressure on forward returns. As always, we will continue to look for attractive growth stocks in the mid-capitalization range and position the fund in those we believe have the greatest near-term opportunities. CITIZENS EMERGING GROWTH FUND 16 CITIZENS SMALL CAP CORE GROWTH FUND (PHOTO OF J. MICHAEL GALLIPO) (PHOTO OF NATHAN MOSER) (PHOTO OF JONATHAN WHITE) "WE REMAIN OPTIMISTIC IN OUR OUTLOOK FOR SMALL-CAP STOCKS IN 2007. THE MARKET CONTINUES TO BENEFIT FROM REASONABLE VALUATIONS, STRONG CORPORATE BALANCE SHEETS AND RAPID MERGER AND ACQUISITION ACTIVITY. CO-PORTFOLIO MANAGERS J. Michael Gallipo, CFA Nathan Moser, CFA Jonathan White, CFA 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 investing; small- and medium-sized company risks (See pages 6-8 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW (UNAUDITED) HOW DID THE FUND PERFORM? The Citizens Small Cap Core Growth Fund gained 14.22% for the one-year period ended June 30, 2007. This performance trailed the Russell 2000 Growth Index, which advanced 16.83% over the same time period. Consumer discretionary was a top performing sector during the period, adding 3.28% to the fund's total return. The fund maintained a slight underweight relative to the index as pressures on the U.S. consumer were building. One stock bucking the trend was Deckers Outdoor Corp., best known for their UGG and Teva footwear brands. The stock increased 161.58% during the period and added 2.55% to the fund's total return, due in large part to higher demand for UGG boots and upward estimate revisions. Deckers management did an outstanding job introducing new UGG styles, keeping them "on 17 CITIZENS SMALL CAP CORE GROWTH FUND CITIZENS SMALL CAP CORE GROWTH FUND PERFORMANCE (as of 6.30.07) AVERAGE ANNUAL RETURN --------------------------------- EXPENSE RATIOS* Ticker 1 3 5 Since --------------- Share class symbol year years years inception Gross Net - ----------- ------ ----- ----- ----- --------- ------ ------ STANDARD SHARES CSCSX 14.22% 11.24% 10.20% 5.50% 1.44% 1.44% * Reflects the expense ratio as reported in the Prospectus dated August 29, 2006. PERFORMANCE OVER TIME (as of 6.30.07) This chart shows performance since inception of a $10,000 hypothetical investment in the fund's Standard shares, compared with the performance over the same period for the index shown. (PERFORMANCE GRAPH) CITIZENS SMALL CAP CORE GROWTH FUND PERFORMANCE SINCE INCEPTION 12/28/99 DATE FUND VALUE INDEX VALUE - ---- ---------- ----------- 12/28/1999 $10,000.00 $10,000.00 12/31/1999 $10,000.00 $10,522.00 1/31/2000 $ 9,710.00 $10,424.15 2/29/2000 $10,500.00 $12,849.84 3/31/2000 $10,800.00 $11,499.33 4/30/2000 $10,440.00 $10,337.89 5/31/2000 $10,190.00 $ 9,432.29 6/30/2000 $11,230.00 $10,650.95 7/31/2000 $10,770.00 $ 9,738.16 8/31/2000 $11,620.00 $10,762.61 9/30/2000 $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 1/31/2001 $10,278.20 $ 8,821.61 2/28/2001 $ 9,066.00 $ 7,612.17 3/31/2001 $ 8,455.40 $ 6,920.22 4/30/2001 $ 9,086.60 $ 7,767.26 5/31/2001 $ 9,206.80 $ 7,947.46 6/30/2001 $ 9,537.40 $ 8,164.42 7/31/2001 $ 9,226.80 $ 7,468.00 8/31/2001 $ 9,046.50 $ 7,001.99 9/30/2001 $ 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 1/31/2002 $10,298.80 $ 7,144.96 2/28/2002 $ 9,938.10 $ 6,682.68 3/31/2002 $10,298.80 $ 7,263.40 4/30/2002 $10,238.70 $ 7,106.52 5/31/2002 $ 9,597.50 $ 6,690.78 6/30/2002 $ 9,196.80 $ 6,123.41 7/31/2002 $ 7,944.50 $ 5,182.24 8/31/2002 $ 7,884.40 $ 5,179.65 9/30/2002 $ 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 1/31/2003 $ 7,383.50 $ 5,025.77 2/28/2003 $ 7,343.40 $ 4,891.58 3/31/2003 $ 7,383.50 $ 4,965.44 4/30/2003 $ 7,884.40 $ 5,435.17 5/31/2003 $ 8,525.60 $ 6,047.72 6/30/2003 $ 8,685.80 $ 6,164.44 7/31/2003 $ 9,246.90 $ 6,630.47 8/31/2003 $ 9,978.20 $ 6,986.53 9/30/2003 $ 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 1/31/2004 $11,270.60 $ 8,076.56 2/29/2004 $11,230.50 $ 8,064.44 3/31/2004 $11,140.30 $ 8,102.34 4/30/2004 $10,409.00 $ 7,695.61 5/31/2004 $10,549.20 $ 7,848.75 6/30/2004 $10,859.80 $ 8,110.11 7/31/2004 $ 9,858.00 $ 7,381.82 8/31/2004 $ 9,687.70 $ 7,223.11 9/30/2004 $10,248.70 $ 7,622.55 10/31/2004 $10,519.20 $ 7,807.78 11/30/2004 $11,020.10 $ 8,467.54 12/31/2004 $11,313.60 $ 8,771.52 1/31/2005 $11,082.90 $ 8,376.80 2/28/2005 $11,303.10 $ 8,491.57 3/31/2005 $11,061.90 $ 8,173.13 4/30/2005 $10,621.60 $ 7,653.32 5/31/2005 $11,376.50 $ 8,192.88 6/30/2005 $11,533.80 $ 8,457.51 7/31/2005 $12,058.59 $ 9,048.69 8/31/2005 $11,796.92 $ 8,921.10 9/30/2005 $11,891.29 $ 8,991.58 10/31/2005 $11,576.17 $ 8,658.89 11/30/2005 $12,152.67 $ 9,148.99 12/31/2005 $12,236.52 $ 9,135.26 1/31/2006 $13,368.40 $10,016.81 2/28/2006 $13,106.38 $ 9,963.73 3/31/2006 $13,798.39 $10,447.96 4/30/2006 $13,850.83 $10,417.66 5/31/2006 $13,043.32 $ 9,684.26 6/30/2006 $13,085.06 $ 9,690.07 7/31/2006 $12,309.12 $ 9,187.16 8/31/2006 $12,225.42 $ 9,456.34 9/30/2006 $12,445.47 $ 9,520.64 10/31/2006 $13,095.13 $10,137.58 11/30/2006 $13,367.51 $10,379.87 12/31/2006 $13,304.68 $10,354.96 1/31/2007 $13,596.05 $10,547.56 2/28/2007 $13,456.01 $10,513.81 3/31/2007 $13,726.48 $10,610.53 4/30/2007 $14,136.90 $10,888.53 5/31/2007 $14,751.86 $11,385.05 6/30/2007 $14,945.76 $11,320.91 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. 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 cost. 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. trend" for several years. Another strong performer was internet travel-focused Priceline.com. It increased 106.97% during the period and added 1.29% to the fund's overall return. International gross bookings remain strong, which we believe provides an opportunity for future growth. In addition, management leveraged Priceline's cost structure, which had a positive impact on consensus expectations. Energy and technology were also positive contributors, adding 3.06% and 3.36% to the fund's total return, respectively, during the period. Core Laboratories increased 65.58% and added 1.55% to total return as a favorable energy environment drove positive financial results. Core CITIZENS SMALL CAP CORE GROWTH FUND 18 Laboratories has been a long-term holding of the fund and we continue to view the company favorably as its reservoir description and production enhancement services are in high demand. This focus, along with strong international presence, reduces volatility from minor energy price swings. While the technology sector contributed positively to the fund's return, it returned less than it did for the benchmark because of less-than-optimal stock picks. We did, however, have some strong performers in this sector. Commscope returned 85.59% and added 0.82% to the fund's performance; and WebEx Communications increased 60.20%, and contributed 0.96% to the fund's total return during the period. Both companies were a play on our theme of the maturation of internet infrastructure. Commscope sells coaxial and fiber optic cable for data networking, internet access and other broadband applications. Strong demand from large telecom companies led to positive financial results. WebEx posted strong financial results and was eventually acquired by Cisco Systems in early 2007. Merger and acquisition activity surged over the past year due in large part to the increased role of private equity and strong corporate balance sheets. The fund benefited from this activity, with several portfolio holdings being acquired. Most recently, Roche made an unsolicited offer for Ventana Medical, which helped propel the stock 59.76%, and contribute 0.60% to the fund's performance since adding the position in late April. The fund continues to hold its position as the potential exists for a higher offer from Roche and/or a competing offer. During the period, industrials contributed 1.02% and healthcare added 1.27% to the fund's total return. However, poor stock selections within each sector led to relative underperformance versus the benchmark. Regional train operator Genesee & Wyoming declined 30.61% and detracted 0.81% from the fund's return during the holding period. We initially purchased Genesee & Wyoming based on a positive industry operating environment and strong management execution. The company was negatively impacted by lower volumes stemming from exposure to paper, housing, and damage from a hurricane in Mexico. We sold the fund's position because we believed these issues could take several quarters to be resolved. Within healthcare, the fund maintained an underweight position relative to the benchmark as industry fundamentals remained challenging. Political pressure to reduce the high cost of healthcare increased and, in our opinion, could accelerate in the coming years. We believe Healthways--a managed care company--is well positioned to capitalize on this opportunity 19 CITIZENS SMALL CAP CORE GROWTH FUND by helping its clients lower medical costs. However, due to poor performance in their Medicare business, Healthways declined 10.09% and reduced the fund's total return for the fiscal year by 0.31%. The fund continues to hold its position in Healthways based on our belief that management will take steps to improve the Medicare business. OUTLOOK We remain optimistic in our outlook for small-cap stocks in 2007. The market continues to benefit from reasonable valuations, strong corporate balance sheets and rapid merger and acquisition activity. Long-term interest rates rose during the fund's last fiscal quarter, but remain at low levels. With very strong performance in the first half of 2007 market volatility could increase in the coming months as rising energy costs and continued housing weakness pressure the U.S. consumer. We believe we are undergoing an economic "soft landing" and that growth will reaccelerate in 2008. Global economies continue to be strong and we continue to seek out companies benefiting from this growth. CITIZENS SMALL CAP CORE GROWTH FUND 20 CITIZENS VALUE FUND (PHOTO OF SOPHIA COLLIER) "WE ARE ENCOURAGED ABOUT THE PROSPECTS FOR THE CITIZENS VALUE FUND BECAUSE WE BELIEVE ITS FOCUSED RELATIVE VALUE STRATEGY IS PARTICULARLY SUITED TO UNCOVER OPPORTUNITIES WITHIN TRANSITIONAL ECONOMIC CONDITIONS." PORTFOLIO MANAGER Sophia Collier 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 Institutional shares 3.31.06 RISKS Value investing (See pages 6-8 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW (UNAUDITED) HOW DID THE FUND PERFORM? Citizens Value Fund had a strong year in fiscal 2007. For the one-year period ended June 30, 2007 the fund's standard shares returned 20.63%, outperforming the benchmark S&P 500 Index return of 20.59%. Our single best stock was Precision Castparts which appreciated almost 97% during the fiscal year accounting for 6.23% of the fund's gain. The company is an expert at making complex high-value metal components used in gas turbines, aircraft and other critical devices. Its success is the result of a booming global economy and the increasing need for new large-scale infrastructure and equipment. Global growth and relative value were important themes that drove success throughout the portfolio. Our strongest sector was consumer 21 CITIZENS VALUE FUND CITIZENS VALUE FUND PERFORMANCE (as of 6.30.07) AVERAGE ANNUAL RETURN --------------------------------- EXPENSE RATIOS* Ticker 1 5 10 Since --------------- Share class symbol year years years inception Gross Net - ----------- ------ ----- ----- ----- --------- ----- ---- STANDARD SHARES MYPVX 20.63% 11.95% 7.86% 9.15% 1.62% 1.29% INSTITUTIONAL SHARES CVALX 21.16% NA NA 15.95% 1.26% 0.90% * Reflects the expense ratio as reported in the Prospectus dated August 29, 2006. Contractual fee waivers are in effect through June 30, 2008. PERFORMANCE OVER TIME (as of 6.30.07) This chart shows performance since inception of a $10,000 hypothetical investment in the fund's Standard shares, compared with the performance over the same period for the index shown. (PERFORMANCE GRAPH) CITIZENS VALUE FUND PERFORMANCE SINCE INCEPTION 06/13/96 DATE FUND VALUE INDEX VALUE - ---- ---------- ----------- 6/13/1996 $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 2/28/1997 $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 09/30/1997 $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 $18,771.12 9/30/2004 $17,603.30 $18,973.85 10/31/2004 $17,808.80 $19,264.15 11/30/2004 $18,647.80 $20,044.35 12/31/2004 $19,230.10 $20,725.86 1/31/2005 $18,767.70 $20,220.15 2/28/2005 $19,521.20 $20,644.77 3/31/2005 $19,264.30 $20,279.36 4/30/2005 $18,716.30 $19,894.05 5/31/2005 $19,555.40 $20,526.68 6/30/2005 $19,863.60 $20,555.42 7/31/2005 $20,960.07 $21,320.08 8/31/2005 $20,788.20 $21,126.07 9/30/2005 $20,942.03 $21,297.19 10/31/2005 $20,085.50 $20,941.53 11/30/2005 $20,788.49 $21,733.12 12/31/2005 $20,755.23 $21,739.64 1/31/2006 $21,612.42 $22,315.74 2/28/2006 $21,647.00 $22,375.99 3/31/2006 $21,937.07 $22,653.45 4/30/2006 $22,467.95 $22,957.01 5/31/2006 $21,697.30 $22,295.84 6/30/2006 $21,816.64 $22,327.06 7/31/2006 $21,679.19 $22,465.49 8/31/2006 $22,091.09 $23,000.17 9/30/2006 $22,588.14 $23,593.57 10/31/2006 $23,306.45 $24,362.72 11/30/2006 $23,837.83 $24,825.61 12/31/2006 $24,064.29 $25,173.17 1/31/2007 $24,665.90 $25,553.29 2/28/2007 $24,253.98 $25,052.44 3/31/2007 $24,632.34 $25,333.03 4/30/2007 $25,474.77 $26,455.28 5/31/2007 $26,593.11 $27,378.57 6/30/2007 $26,317.41 $26,924.20 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. 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 cost. 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. discretionary where the fund's average holding appreciated over 50% during the period. Within this sector the fund focused its holdings on companies we believed would benefit from international growth such as the farm products company Bunge and apparel giant Nike, which contributed 0.80% and 0.54% to the fund's total return, respectively. Both companies were selling at what we believed were attractive relative values when we purchased them and each had what we believed were unappreciated growth prospects. Bunge sells fundamental farm commodities such as soybeans, corn, wheat, vegetable oils and fertilizers. CITIZENS VALUE FUND 22 Population growth and improving nutrition create strong markets for all of these products. The Nike franchise also operates on a worldwide scale and has growth driven by the development of consumer economies in growing countries. The fund continues to hold both names. The fund also was rewarded by our holding luxury retailer Nordstrom, whose shares were up 42.53% for the period, adding 0.79% to the fund's total return. The fund sold its shares of the company in May 2007. A review of the Nordstrom holding is a good example of our relative value strategy at work. The fund had initiated a position in the company in October of 2004 when Nordstrom shares were selling at a price earnings ratio of a little more than 14.5 based on a consensus forecast of approximately $1.40 in earnings for the next twelve months. At that time Nordstrom's multiple was more than 15% below the industry average. We thought that Nordstrom was undervalued and we believed that the company could grow earnings more than expected. With a strong global economy we thought it was inevitable that increasing amounts of money would find its way to Nordstrom where luxury goods appeal strongly to the affluent consumer. In our relative value strategy we look for situations where we can gain from both earnings growth and a positive "re-rating" by investors. By May of 2007 when the fund sold the last of its Nordstrom position, the company was trading at 17.5 times earnings that were expected to be $2.80 for the coming year. Importantly for us, the company was trading at a little more than the industry average--a sell signal for our strategy. The fund's second best sector was information technology where the fund continued to be rewarded by the growth of long-time holding MEMC Electronic Materials, a maker of silicon wafers used in solar panels and other semiconductors. MEMC increased in value by almost 63%, returning 0.65% of the fund's total return during the period and continues to execute effectively and benefit from favorable pricing and tight capacity for its basic products. The fund also benefited from another long-time holding, Hewlett Packard, which appreciated more than 40% during the period contributing 0.67% of the fund's gains. The fund continues to hold both names. The fund's weakest sector both in absolute terms and relative to the S&P 500 Index was financials where the average holding increased in value by 10.27% versus a gain of 14.80% for the average company within the benchmark. Within financials the fund had some good holdings such as Goldman Sachs, which returned almost 43% and Merrill Lynch which rose 20% during the period. They contributed 0.61% and 0.56%, respectively. 23 CITIZENS VALUE FUND However, the fund was hurt by a decline in the share prices of its holdings in commercial banks and consumer finance. The fund's worst position for the fiscal year was Wachovia Corp. which declined by more than 28%, detracting 0.56% from the fund's performance. The fund also saw an 8.51% decline in Capital One and a drop of 6.51% in Bank of America during the period detracting 0.23% and 0.05%, respectively, from the fund's performance. The weakness of this sector was related to investor concerns that current levels of interest rates would compress these companies' earnings that are already under pressure from a slow housing market. In addition to these industry-wide factors, Wachovia in particular has been under a cloud of negative investor perception that it has overpaid for several acquisitions. Taking a longer-term view, the fund still holds all of these companies, as we believe that the fundamental business of these financial institutions is still fairly strong and the names are quite reasonably valued. We will continue to monitor these names closely. OUTLOOK Looking ahead, we feel positive about the economy and its prospects. It is true that growth within the U.S. has slowed, but we believe the economy is far from recession or decline. In fact the economy may have already bottomed and be in the process of re-accelerating. Employment is good and interest rates are low--both positive indicators for the future of consumer spending and investment. Further, as we have seen in the first half of 2007 the U.S. is not the only economy in the world that can drive growth. We are encouraged about the prospects for the Citizens Value Fund because we believe its focused relative value strategy is particularly suited to uncover opportunities within transitional economic conditions. CITIZENS VALUE FUND 24 CITIZENS GLOBAL EQUITY FUND (PHOTO OF JONATHAN WHITE) "WE EXPECT THAT IN THE COMING YEAR THE MOST ENERGETIC ECONOMIC GROWTH WILL CONTINUE TO OCCUR OUTSIDE OF THE UNITED STATES. WE BELIEVE THE FUND IS WELL POSITIONED TO BENEFIT FROM THIS TREND." PORTFOLIO MANAGER Jonathan White, CFA INVESTMENT GOAL Capital appreciation INVESTMENT STRATEGY Invests in promising companies throughout the world INCEPTION DATES Standard shares 2.08.94 Institutional shares 11.01.99 Administrative shares 2.04.00 RISKS Growth and foreign investing (See pages 6-8 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW (UNAUDITED) HOW DID THE FUND PERFORM? The Citizens Global Equity Fund, standard shares, gained 16.91% for the one-year period ended June 30, 2007. The MSCI World Index returned 23.59%. Markets around the globe powered their way higher, driven by a surplus of liquidity that sought a home in an environment of low interest rates, low inflation and positive earnings reports. In retrospect, we were too focused on the developing problems of the U.S. economy and had too generous an assessment of the importance of the American consumer as a driver of international growth. As a result, we overreacted to the market correction in the second quarter of 2006, and for the first half of the fiscal year adopted a somewhat defensive posture--we increased the fund's exposure in healthcare, consumer staples and financial 25 CITIZENS GLOBAL EQUITY FUND CITIZENS GLOBAL EQUITY FUND PERFORMANCE (as of 6.30.07) AVERAGE ANNUAL RETURN ---------------------------------- EXPENSE RATIOS* Ticker 1 5 10 Since --------------- Share class symbol year years years inception Gross Net - ----------- ------ ------ ----- ----- --------- ----- ----- STANDARD SHARES WAGEX 16.91% 8.55% 5.89% 7.43% 2.01% 2.01% INSTITUTIONAL SHARES CGEIX 17.69% 9.26% NA 0.92% 1.40% 1.40% ADMINISTRATIVE SHARES CEADX 17.26% 8.88% NA -4.51% 1.73% 1.73% * Reflects the expense ratio as reported in the Prospectus dated August 29, 2006. PERFORMANCE OVERTIME (as of 6.30.07) This chart shows performance since inception of a $10,000 hypothetical investment in the fund's Standard shares, compared with the performance over the same period for the index shown. (PERFORMANCE GRAPH) CITIZENS GLOBAL EQUITY FUND - STANDARD SHARES PERFORMANCE SINCE INCEPTION 02/08/94 DATE FUND VALUE INDEX VALUE - ---- ---------- ----------- 2/8/1994 $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 2/28/1997 $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 09/30/1997 $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 $19,142.63 8/31/2004 $17,462.40 $19,226.86 9/30/2004 $17,657.40 $19,590.25 10/31/2004 $18,096.10 $20,070.21 11/30/2004 $18,876.00 $21,123.89 12/31/2004 $19,546.20 $21,930.83 1/31/2005 $19,034.40 $21,437.38 2/28/2005 $19,716.80 $22,116.95 3/31/2005 $19,375.60 $21,690.09 4/30/2005 $18,936.90 $21,215.08 5/31/2005 $19,217.20 $21,592.71 6/30/2005 $19,326.90 $21,780.56 7/31/2005 $19,898.98 $22,540.70 8/31/2005 $20,191.49 $22,709.76 9/30/2005 $20,496.38 $23,300.21 10/31/2005 $20,033.16 $22,734.02 11/30/2005 $20,630.15 $23,491.06 12/31/2005 $21,057.20 $24,012.56 1/31/2006 $21,996.35 $25,085.92 2/28/2006 $21,716.99 $25,048.30 3/31/2006 $22,422.80 $25,599.36 4/30/2006 $23,238.99 $26,377.58 5/31/2006 $22,262.95 $25,475.46 6/30/2006 $22,336.42 $25,467.82 7/31/2006 $22,191.23 $25,625.72 8/31/2006 $22,508.56 $26,291.99 9/30/2006 $22,483.81 $26,604.87 10/31/2006 $23,288.73 $27,581.26 11/30/2006 $23,654.36 $28,257.01 12/31/2006 $24,091.96 $28,830.62 1/31/2007 $24,482.25 $29,170.82 2/28/2007 $24,141.95 $29,019.14 3/31/2007 $24,506.49 $29,550.19 4/30/2007 $25,347.07 $30,853.35 5/31/2007 $26,028.90 $31,717.24 6/30/2007 $26,113.50 $31,470.68 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. 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 cost. 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. stocks, and trimmed the technology, energy and industrial sectors. Fundamental developments, particularly the continued deterioration of the U.S. housing market and housing related financial instruments, led us to believe that it was just a matter of time before the American consumer would cut back on spending. This, we expected, would lead to slower overseas economies dependent on exports to the U.S. and hence weaker markets and a meaningful correction in equity prices. However, our assessment of international sensitivity to a moderate slowing of U.S. economic activity proved to be exaggerated, and our stock selections CITIZENS GLOBAL EQUITY FUND 26 lagged. By the final quarter of the fiscal year we adjusted the portfolio and the fund performed in line with the index, but was unable to make up for its earlier underperformance. The fund's best performer for the fiscal year was Volvo. The stock of the Swedish maker of trucks, busses and engines rose by over 102% and contributed 2.28% of the fund's performance. We trimmed the fund's position in Volvo, but it was still over 2.0% of the portfolio at fiscal year end. Volvo was followed in performance by Nintendo, which was added to the portfolio in November, just prior to its introduction of the Wii gaming console. A 1.8% position at fiscal year end, it appreciated over 74% to contribute 0.87% to the fund's total return. Two European financial stocks rose by over 64% each--Deutsche Boerse contributed 1.61% and Julius Baer Holding contributed 0.88% to the fund's total return during the period. Both benefited from the strong capital markets during the year, Duetsche Boerse as the primary German stock exchange and Julius Baer as a notable wealth manager. Many of the fund's worst performing stocks were sold early in the fiscal year, when the market was near its low point. The fund's greatest detractor from performance was Corning, sold in July 2006, which cost the fund 0.38% of its return as the stock declined by almost 25% in less than a month. It suffered when the supply of LCD panels went from shortage to surplus at a time when stocks were particularly vulnerable in July 2006. Similarly, Fluor, an engineering and construction firm, was sold in September after a 16% decline amidst fears of a slowdown in capital spending. This detracted 0.36% from the fund's performance. The fund's performance problem was not so much an abundance of losing stocks as it was not owning enough stocks that could keep up with the market. OUTLOOK As the fund ends the fiscal year, it is worthwhile to review how the characteristics of the portfolio have changed from a year ago. First, the companies held are generally smaller. The weighted average market capitalization for the fund declined over the year from $61 billion to $49 billion while that of the index increased from $67 billion to $78 billion. This reflects a move toward a stock selection process focused on more company specific data than on country and sector selection. Valuation parameters have not changed much. At the end of the last fiscal year the trailing twelve-month price to earnings ratio was 17.6 times. This year it stands at 17.1. Dividend yield declined from 1.6% to 1.4%. However, growth 27 CITIZENS GLOBAL EQUITY FUND has picked up. Actual sales growth rose from 13.0% last year to 24.2% this year. Forecasted earnings growth for the next five years rose from 12.8% to 13.6%. Geographically, exposure to the U.S., Japanese and United Kingdom markets has been reduced, while it has grown to continental Europe, the Pacific rim, and emerging markets. At the fiscal year end, emerging markets comprised 7.7% of the fund, up from 1.1% one year ago. We expect that in the coming year the most energetic economic growth will continue to occur outside of the United States. We are challenged here by a weak housing market, high energy costs, and rising interest rates. These impact our ability to maintain and increase consumer spending levels, and consumer spending is the primary driver of our economy. Fortunately, a number of mature economies in Europe are experiencing a bit of renewal, and emerging markets are prospering and demonstrating a new ability to sustain a less volatile, while still high, level of growth. We believe this should provide opportunities for the fund, although the levels of the recent past may be tough to maintain. CITIZENS GLOBAL EQUITY FUND 28 CITIZENS BALANCED FUND (PHOTO OF SOPHIA COLLIER) (PHOTO OF ROBERT MAGAN) "IN JANUARY 2007, WE ADOPTED A MANAGEMENT APPROACH SIMILAR TO THAT OF THE CITIZENS VALUE FUND FOR THE EQUITY PORTION OF THE FUND. THIS PROVIDES EXPOSURE TO A STRATEGY WITH A PROVEN TRACK RECORD." PORTFOLIO MANAGERS Sophia Collier Robert Magan, CFA 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 Value and fixed-income investing (See pages 6-8 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW (UNAUDITED) HOW DID THE FUND PERFORM? Citizens Balanced Fund had double-digit returns for the one-year period ended June 30, 2007 with a return of 11.81% compared to the 14.67% return of the Blended Index, the fund's benchmark. The Blended Index combines 60% of the S&P 500 Index and 40% of the Lehman Brothers U.S. Aggregate Index. For the one-year period, the S&P 500 Index gained 20.59% and the Lehman Brothers U.S. Aggregate Index gained 6.12%. The fund's defensive position in the first half of the period meant it did not fully participate in the stock market rally that began in July of 2006. This resulted in its underperformance. However, in January 2007, we adopted a management approach similar to that of the Citizens Value Fund for the equity portion of the fund. Our intent was to provide the fund exposure to a proven strategy 29 CITIZENS BALANCED FUND CITIZENS BALANCED FUND PERFORMANCE (as of 6.30.07) AVERAGE ANNUAL RETURN --------------------------------- EXPENSE RATIOS* Ticker 1 3 5 Since --------------- Share class symbol year years years inception Gross Net - ----------- ------ ----- ----- ----- --------- ----- ---- STANDARD SHARES CFBLX 11.81% 7.87% NA 8.80% 1.80% 1.30% * Reflects the expense ratio as reported in the Prospectus dated August 29, 2006. PERFORMANCE OVER TIME (as of 6.30.07) This chart shows performance since inception of a $10,000 hypothetical investment in the fund's Standard shares, compared with the performance over the same period for the index shown. (PERFORMANCE GRAPH) CITIZENS BALANCED FUND PERFORMANCE SINCE INCEPTION 12/20/02 DATE FUND VALUE INDEX VALUE - ---------- ---------- ----------- 12/20/2002 $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 $11,811.37 8/31/2004 $11,302.70 $11,930.66 9/30/2004 $11,578.70 $12,021.34 10/31/2004 $11,743.60 $12,171.60 11/30/2004 $12,073.60 $12,428.42 12/31/2004 $12,287.40 $12,727.95 1/31/2005 $12,139.70 $12,573.94 2/28/2005 $12,308.50 $12,703.45 3/31/2005 $12,221.70 $12,542.12 4/30/2005 $12,031.40 $12,466.86 5/31/2005 $12,412.00 $12,758.59 6/30/2005 $12,578.40 $12,796.87 7/31/2005 $12,938.14 $13,036.17 8/31/2005 $12,970.49 $13,032.26 9/30/2005 $13,113.16 $13,041.38 10/31/2005 $12,869.26 $12,869.23 11/30/2005 $13,261.77 $13,184.53 12/31/2005 $13,375.82 $13,237.27 1/31/2006 $13,620.60 $13,447.74 2/28/2006 $13,525.26 $13,488.08 3/31/2006 $13,628.05 $13,535.29 4/30/2006 $13,606.24 $13,634.10 5/31/2006 $13,019.81 $13,392.77 6/30/2006 $13,103.14 $13,415.54 7/31/2006 $13,017.97 $13,537.62 8/31/2006 $13,135.13 $13,813.79 9/30/2006 $13,246.78 $14,076.25 10/31/2006 $13,461.38 $14,388.75 11/30/2006 $13,655.22 $14,620.41 12/31/2006 $13,776.75 $14,709.59 1/31/2007 $13,973.76 $14,840.50 2/28/2007 $13,875.94 $14,757.40 3/31/2007 $14,017.48 $14,856.27 4/30/2007 $14,369.32 $15,282.65 5/31/2007 $14,809.02 $15,556.21 6/30/2007 $14,650.62 $15,383.60 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. 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 cost. 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. with good opportunity for appreciation, consistent with the lower risk profile that we believe is inherent in a valuation sensitive strategy. Results from this change were positive and the fund outperformed its benchmark for the six months ended June 30, 2007 with a total return of 6.35% versus 4.59% for the benchmark. The fund's single best stock holding during the period was Precision Castparts, which appreciated almost 102%, and contributed 1.00% to the fund's performance. The company's expertise is making complex high-value metal components used in gas turbines, aircraft and other critical devices. Its success is the result of a booming global economy and the increasing need for new large-scale infrastructure and equipment. CITIZENS BALANCED FUND 30 During the period, the fund's best performing sector was consumer discretionary where the fund's average holding appreciated by over 25% versus 19% for the average company within the fund's benchmark. McDonald's, Walt Disney and Polo Ralph Lauren were the top contributors within the group during the period, contributing 0.32%, 0.29% and 0.28%, respectively to the fund's performance. Socially responsible investors are sometimes surprised to see a company like McDonald's in the portfolio. When a company the size of McDonald's takes a positive social or environmental action the results can be very significant. Over the last ten years McDonald's has developed a comprehensive social and environmental responsibility plan and made what we believe is excellent progress in implementing its plan. For example, a significant public health issue is the emergence of "super-bugs" that are resistant to antibiotics. It is believed one factor creating this problem is routine administration of antibiotics to promote growth of poultry and cattle. McDonald's has addressed this issue by prohibiting this practice and taking a leadership position within the industry to encourage other companies to follow suit. This is just one example of a long list of corporate social responsibility initiatives undertaken by the company. Another stand-out sector during the period was telecommunications services where the fund's holding America Movil S.A.B de C.V. appreciated by over 30% while the fund held it, and contributed 0.35% of the fund's performance. The company is the largest wireless provider in Latin America. The fund sold its position in the company in January 2007. The financials sector was the fund's weakest sector during the period on a relative basis versus the benchmark--the fund's average holding gained 10.3% compared to 14.8% for the average company within the benchmark. The sector's weakness was concentrated in the commercial banking industry where investors were concerned that current interest rate levels would compress company earnings, in an environment already under pressure from a slow housing market. In addition to these industry-wide factors, one of the fund's commercial banking holdings--Wachovia--which declined by 5% during the year, came under a cloud of negative investor perception that it overpaid for several acquisitions. Taking a longer term view, the fund still holds Wachovia and select other names within the commercial banking sector as we believe that the fundamental businesses of these financial institutions are still fairly strong and the names are quite 31 CITIZENS BALANCED FUND reasonably valued. We will continue to monitor these names closely. The fund's largest single detractor from performance was Valero Energy Corp. which fell by more than 23%, detracting 0.37% from the fund's performance. The fund sold Valero in January 2007. In terms of asset allocation, over the course of the one-year period the fund increased the weight of the equity portion of its portfolio, moving from approximately 60% in December 2006 to 70% on June 30, 2007. We believed equities would likely outperform fixed income securities and this proved to be the correct call. To generate the cash needed to make the changes to the fund's holdings, we reduced the fund's weighting in corporate and federal agency bonds. At the same time we sought to position the fixed income portion of the portfolio closer to the benchmark. To accomplish this realignment, the fund purchased U.S. Treasury securities. This also benefited the fund because in the second half of the fund's fiscal year, U.S. Treasury securities outperformed other fixed income securities during the one-year period. We kept the average duration and maturity of the fund short of the benchmark in anticipation of higher interest rates. OUTLOOK Looking ahead, we feel positive about the economy and its prospects. It is true that growth within the United States has slowed, but we believe the economy is far from recession or decline. In fact, the economy may have already bottomed and be in the process of re-accelerating. Employment is good and interest rates are low --both positive indicators for the future of consumer spending and investment. Further, as we have seen in 2007, the United States is not the only economy in the world that can drive growth. We are encouraged about the prospects for the Citizens Balanced Fund because we believe the focused relative value strategy used in the equity portion is particularly suited to uncover opportunities within transitional economic conditions. At the same time we believe the fund's fixed income holdings will continue to add balance and a measure of safety to the portfolio. CITIZENS BALANCED FUND 32 CITIZENS INCOME FUND (DWIGHT ASSET MANAGEMENT COMPANY) PORTFOLIO MANAGER The fund is managed by a team of portfolio managers at Dwight Asset Management Company INVESTMENT GOAL Current income and monthly dividend payment INVESTMENT STRATEGY Invests in bonds that are diversified across sectors, including U.S. treasury, mortgages, corporate, and asset-backed securities INCEPTION DATE Standard shares 6.10.92 RISKS Fixed-income investing; high-yield security risks (See pages 6-8 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW (UNAUDITED) HOW DID THE FUND PERFORM? For the one-year period ended June 30, 2007, the Citizens Income Fund gained 4.60%--trailing the benchmark, the Lehman Brothers U.S. Aggregate Index, which returned 6.12%. The fund's underweight position in both the investment grade corporate bond sector and to residential mortgage-backed securities in the early part of the fiscal year detracted from performance as these were the two best performing investment grade sectors. The fund benefited, however, from a maturity structure shorter than that of the index from early October through early January and from overweight positions in both commercial mortgage-backed securities (CMBS) and asset-backed securities (ABS). In addition, the fund maintained a modest allocation in the high-yield sector which outperformed duration-matched Treasuries by a wide margin. The close of the fourth quarter of the fund's fiscal year marked the one-year anniversary of a 5.25% federal funds rate, a policy prescription that worked well. During the last year, real gross domestic product (GDP) growth slowed to a moderate rate, and core inflation slipped back into the Federal Reserve's (the Fed's) comfort 33 CITIZENS INCOME FUND CITIZENS INCOME FUND PERFORMANCE (as of 6.30.07) AVERAGE ANNUAL RETURN -------------------------------- EXPENSE RATIOS* Ticker 1 5 10 Since --------------- Share class symbol year years years inception Gross Net - ----------- ------ ---- ----- ----- --------- ----- ---- STANDARD SHARES WAIMX 4.60% 3.68% 3.96% 5.01% 1.49% 1.49% * Reflects the expense ratio as reported in the Prospectus dated August 29, 2006. PERFORMANCE OVER TIME (as of 6.30.07) This chart shows performance since inception of a $10,000 hypothetical investment in the fund's Standard shares, compared with the performance over the same period for the index shown. (PERFORMANCE GRAPH) CITIZENS INCOME FUND PERFORMANCE SINCE INCEPTION 06/10/92 DATE FUND VALUE INDEX VALUE - ---- ---------- ----------- 6/10/1992 $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 $22,984.09 8/31/2004 $19,740.40 $23,423.08 9/30/2004 $19,817.50 $23,486.33 10/31/2004 $20,027.30 $23,683.61 11/30/2004 $19,892.80 $23,494.14 12/31/2004 $20,054.00 $23,710.29 1/31/2005 $20,117.50 $23,859.66 2/28/2005 $20,101.30 $23,718.89 3/31/2005 $19,805.00 $23,597.92 4/30/2005 $19,991.10 $23,916.50 5/31/2005 $20,196.80 $24,174.79 6/30/2005 $20,299.60 $24,307.76 7/31/2005 $20,175.77 $24,086.56 8/31/2005 $20,377.53 $24,394.86 9/30/2005 $20,210.43 $24,143.60 10/31/2005 $20,018.44 $23,952.86 11/30/2005 $20,088.50 $24,058.25 12/31/2005 $20,235.15 $24,286.81 1/31/2006 $20,214.91 $24,289.24 2/28/2006 $20,287.68 $24,369.39 3/31/2006 $20,054.38 $24,130.57 4/30/2006 $19,984.19 $24,087.14 5/31/2006 $19,944.22 $24,060.64 6/30/2006 $19,964.16 $24,111.17 7/31/2006 $20,175.78 $24,436.67 8/31/2006 $20,427.98 $24,810.55 9/30/2006 $20,597.53 $25,028.88 10/31/2006 $20,727.30 $25,194.07 11/30/2006 $20,947.00 $25,486.32 12/31/2006 $20,823.42 $25,338.50 1/31/2007 $20,781.77 $25,328.37 2/28/2007 $21,083.11 $25,718.42 3/31/2007 $21,024.07 $25,718.42 4/30/2007 $21,118.68 $25,857.30 5/31/2007 $20,945.51 $25,660.79 6/30/2007 $20,882.51 $25,586.77 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. 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 cost. 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. zone of 1-2%. When the Fed stopped tightening policy a year ago, inflation was high and still rising, while the economy showed signs of overheating. The housing market was entering a downturn, however, so the Fed gambled that they could step aside. Against this background, interest rates fell significantly over the course of the past twelve months with the bond-equivalent yield on six-month U.S. Treasury bills declining to end the period at 4.94% while the yield on five-year Treasury notes fell to a level of 4.93%. Falling interest rates translated into positive returns for the broad-based indices of the fixed-income CITIZENS INCOME FUND 34 market. As a result, the Lehman Brothers U.S. Aggregate Index returned 6.12% for the one-year period ended June 30, 2007, compared to a return of -0.81% for the year ended June 30, 2006. OUTLOOK Our estimates show that inflation-adjusted GDP growth exceeded 3% on a seasonally-adjusted annual basis in the fourth quarter of the fund's fiscal year. We believe the resulting momentum as we begin the new fiscal year, together with continued strength in the labor market, will help maintain a moderate level of growth (2.5-3.0%) throughout the next two quarters. We remain committed to our current investment strategy. We continue to believe, for example, that the highest quality tiers of the ABS and CMBS sectors continue to offer better relative value versus the corporate sector where event risks remain elevated. Consequently, we expect that the fund will continue to maintain an underweight position in investment grade corporate bonds and just a modest exposure to high-yield fixed income securities. Subsequent to a sell-off in residential mortgage-backed securities in early June, the fund moved from an underweight to a neutral position in this sector which we anticipate maintaining as long as interest rate volatility remains relatively muted. The fund remains neutral to the index with regard to the overall level of sensitivity to changes in interest rates. We stand poised, however, to move away from a neutral stance should the economic environment deviate significantly from our forecast. At this juncture we rate the chances as better than even that we will, within the next two quarters, increase the fund's sensitivity to interest rate changes in response to what may well turn out to be disappointing news on the pace of the economy. 35 CITIZENS INCOME FUND CITIZENS MONEY MARKET FUND (PHOTO OF ROBERT MAGAN) "IF INFLATION CONTINUES TO SUBSIDE AND THE ECONOMY CONTINUES TO GROW, EVEN AT A SUB-POTENTIAL GROWTH RATE, WE BELIEVE THERE SHOULD BE NO CHANGE IN THE TARGET RATE FOR SOME TIME." PORTFOLIO MANAGER Robert Magan, CFA INVESTMENT GOAL Current income consistent with safety and liquidity INVESTMENT STRATEGY Invests exclusively in money market instruments INCEPTION DATES Standard shares 8.30.83 Institutional shares 2.01.96 RISKS Money market investing (See pages 6-8 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW (UNAUDITED) HOW DID THE FUND PERFORM? The seven-day simple yield of the Citizens Money Market Fund, standard shares, rose from 4.37% on June 30, 2006 to 4.56% on June 30, 2007. The fund's standard share class had a total return of 4.45% for the period. During the one-year period, the average weighted maturity of the fund's holdings was lengthened from 35 days to a range of 45 to 50 days. This reflected our belief that the Federal Reserve Board (the Fed) would continue to hold short-term interest rates stable during the period. While we could have been more aggressive in extending the average maturity to achieve a greater yield, we took a more conservative approach given the chance that there could be a surprise increase in the Federal Funds Target Rate (a key rate that CITIZENS MONEY MARKET FUND 36 CITIZENS MONEY MARKET FUND PERFORMANCE (as of 6.30.07) AVERAGE ANNUAL RETURN -------------------------------- EXPENSE RATIOS* Ticker 1 5 10 Since --------------- Share class symbol year years years inception Gross Net - ----------- ------ ---- ----- ----- --------- ----- ---- STANDARD SHARES WKAXX 4.45% 1.92% 2.98% NA 0.98% 0.98% INSTITUTIONAL SHARES WAIXX 4.72% 2.22% 3.33% 3.54% 0.69% 0.69% * Reflects the expense ratio as reported in the Prospectus dated August 29, 2006. 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. 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 cost. 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. influences mortgage rates and credit card rates) as inflation expectations were not subsiding. The Federal Open Market Committee (FOMC) held steady its target for the federal funds rate at 5.25% during the entire one-year period ending June 30, 2007. Fed Chairman, Ben Bernanke, and other FOMC members, moderated their views of inflation during the period and took a balanced view of inflation expectations and the outlook for economic growth. In past statements from the Fed it was clear their primary focus was inflation, even if that focus came at the expense of future economic growth. Inflation expectations persisted at the higher end of the Fed's comfort range during the period even while the most recent economic data showed a decline in the inflation rate throughout the period. The FOMC kept the target for federal funds rate at 5.25% while the economy grew below their 3% sustainable growth rate and inflation rates were easing into their target range of 1-2%. OUTLOOK How long will the Fed keep the target rate at 5.25%? This is the question that Fed watchers and market enthusiasts will be trying to answer for many months to come. If inflation continues to subside and the economy continues to grow, even at a sub-potential growth rate, we believe there should be no change in the target rate for some time. The FOMC has made it clear to the markets that they are in a data dependent decision process 37 CITIZENS MONEY MARKET FUND and will watch economic releases closely. We too, will be watching those data points closely in the coming months. The decision to raise or lower rates will be a difficult next step for the Fed as the economy is at an inflection point. We believe that the U.S. economy will grow through the rest of 2007 at sub-potential levels but should not fall into a recession and will likely return to more sustainable growth levels in 2008. We will continue to move the average weighted maturity of the fund's holdings to the outside end of the 45 - 50 day range as rates, in our opinion, will remain stable into 2008. Moving maturities longer as the Fed holds rates steady for an extended period allows us to capture higher yields now, with the expectation that the next move by the Fed is to lower rates. CITIZENS MONEY MARKET FUND 38 (THIS PAGE INTENTIONALLY LEFT BLANK.) 39 PORTFOLIO COMPOSITION (UNAUDITED) PORTFOLIO COMPOSITION <Table> <Caption> PERCENTAGE OF CORE GROWTH FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Financials 21.0% Information Technology 16.3% Healthcare 12.4% Consumer Discretionary 11.7% Industrials 11.1% Energy 9.6% Consumer Staples 7.3% Telecommunication Services 3.4% Materials 3.0% Utilities 2.6% Cash Equivalents 1.6% - ------------------------------------------------------------ </Table> <Table> <Caption> PERCENTAGE OF EMERGING GROWTH FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Consumer Discretionary 19.9% Information Technology 17.9% Industrials 15.2% Healthcare 14.4% Energy 10.2% Financials 8.7% Materials 4.6% Consumer Staples 2.8% Utilities 2.2% Cash Equivalents 2.1% Telecommunication Services 2.0% - ------------------------------------------------------------ </Table> <Table> <Caption> SMALL CAP PERCENTAGE OF CORE GROWTH FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Information Technology 21.3% Consumer Discretionary 18.3% Industrials 16.0% Healthcare 15.5% Financials 9.3% Energy 7.3% Materials 5.2% Cash Equivalents 4.7% Consumer Staples 2.4% - ------------------------------------------------------------ </Table> <Table> <Caption> PERCENTAGE OF VALUE FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Financials 19.9% Information Technology 15.1% Consumer Discretionary 11.7% Healthcare 11.3% Industrials 11.0% Energy 9.8% Consumer Staples 8.8% Telecommunication Services 3.7% Cash Equivalents 3.3% Utilities 2.8% Materials 2.6% - ------------------------------------------------------------ </Table> <Table> <Caption> PERCENTAGE OF GLOBAL EQUITY FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Financials 20.9% Consumer Discretionary 12.2% Industrials 11.9% Information Technology 11.2% Energy 9.9% Healthcare 8.7% Materials 7.0% Telecommunication Services 5.1% Consumer Staples 4.6% Utilities 4.6% Cash Equivalents 3.9% - ------------------------------------------------------------ </Table> SEE FINANCIAL NOTES 40 JUNE 30, 2007 <Table> <Caption> PERCENTAGE OF BALANCED FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Equity Financials 15.2% Information Technology 11.6% Healthcare 8.7% Industrials 8.5% Consumer Discretionary 8.1% Energy 7.6% Consumer Staples 5.2% Telecommunication Services 2.7% Materials 2.3% Utilities 1.8% - ------------------------------------------------------------ Fixed Income U.S. Government Agency Obligations 13.0% Corporate Bonds 6.5% U.S. Government Obligations 6.0% Collateralized Mortgage Obligations 1.0% Foreign Government Bonds 0.1% - ------------------------------------------------------------ Cash Equivalents 1.7% - ------------------------------------------------------------ </Table> <Table> <Caption> PERCENTAGE OF INCOME FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ U.S. Government Agency Obligations 32.8% U.S. Government Obligations 29.3% Collateralized Mortgage Obligations 20.7% Corporate Bonds 11.1% Cash Equivalents 6.1% - ------------------------------------------------------------ </Table> <Table> <Caption> PERCENTAGE OF MONEY MARKET FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Commercial Paper 73.2% U.S. Government Agency Obligations 13.5% Municipal Notes 8.1% Certificate of Deposit 5.2% - ------------------------------------------------------------ </Table> All portfolio compositions subject to change. SEE FINANCIAL NOTES 41 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 schedules of 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 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 and Citizens Money Market Fund (hereinafter referred to as the "Funds") at June 30, 2007 and results of each of their operations for the year then ended and 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, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Columbus, Ohio August 22, 2007 42 (THIS PAGE INTENTIONALLY LEFT BLANK) 43 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 99.7% Air Freight - 1.8% FedEx Corp. 49,500 5,493 Apparel Manufacturers - 1.2% NIKE, Inc., Class B 60,600 3,532 Banks - 6.5% Banco Santander Central Hispano SA ADR 198,000 3,639 ICICI Bank Ltd. ADR 83,400 4,099 UBS AG ADR 99,900 5,995 Wells Fargo & Co. 164,000 5,768 ------- 19,501 Biotechnology - 1.6% Roche Holding AG ADR 54,300 4,816 Chemicals - 3.4% Amgen, Inc. (a) 65,900 3,644 Praxair, Inc. 90,975 6,549 ------- 10,193 Computers - 9.7% Apple, Inc. (a) 42,500 5,187 Corning, Inc. (a) 193,700 4,949 Google, Inc., Class A (a) 7,800 4,082 Hewlett-Packard Co. 114,000 5,087 Microsoft Corp. 143,400 4,226 Oracle Corp. (a) 283,100 5,580 ------- 29,111 Electrical Equipment - 1.5% Emerson Electric Co. 95,800 4,483 Electronics - 5.4% Cisco Systems, Inc. (a) 165,000 4,595 Garmin, Ltd. 44,000 3,255 NVIDIA Corp. (a) 92,000 3,801 Thermo Fisher Scientific, Inc. (a) 86,300 4,463 ------- 16,114 Energy & Utilities - 12.3% Allegheny Energy, Inc. (a) 78,500 4,062 Baker Hughes, Inc. 60,000 5,048 ConocoPhillips 55,875 4,386 GlobalSantaFe Corp. 64,200 4,638 Silvan Power Co. (a) (b) 24,000 - The AES Corp. (a) 176,400 3,860 Transocean, Inc. (a) 79,875 8,466 Vulcan Power Co., Class A (a) (b) 40,000 - XTO Energy, Inc. 113,500 6,821 ------- 37,281 Entertainment - 1.3% The Walt Disney Co. 118,000 4,029 Financial - Diversified - 4.5% JPMorgan Chase & Co. 103,700 5,024 Lehman Brothers Holdings Inc. 45,100 3,361 Merrill Lynch & Co., Inc. 62,300 5,207 ------- 13,592 Financial Services - 3.5% Franklin Resources, Inc. 39,700 5,259 Prudential Financial, Inc. 55,200 5,367 ------- 10,626 Foods - 3.1% Hansen Natural Corp. (a) 58,200 2,501 PepsiCo, Inc. 104,500 6,777 ------- 9,278 Healthcare - 5.7% Becton, Dickinson & Co. 55,800 4,157 C.R. Bard, Inc. 31,712 2,620 Hologic, Inc. (a) 49,218 2,722 Intuitive Surgical, Inc. (a) 21,269 2,951 WellPoint, Inc. (a) 57,400 4,583 ------- 17,033 Insurance - 3.7% AFLAC, Inc. 79,800 4,102 American International Group, Inc. 98,200 6,877 ------- 10,979 Investment Banking & Brokerage - 2.1% Affiliated Managers Group, Inc. (a) 20,400 2,627 The Goldman Sachs Group, Inc. 17,400 3,771 ------- 6,398 </Table> SEE FINANCIAL NOTES 44 JUNE 30, 2007 ($ X 1,000) <Table> <Caption> - ------------------------------------------------------------------------- CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Manufacturing - 10.3% Crown Holdings, Inc. (a) 100,000 2,497 Danaher Corp. 67,000 5,059 General Cable Corp. (a) 40,000 3,030 Oshkosh Truck Corp. 43,600 2,743 Precision Castparts Corp. 55,600 6,748 Procter & Gamble Co. 111,800 6,841 Roper Industries, Inc. 70,100 4,003 ------- 30,921 Multimedia - 1.5% News Corp., Class A 27,000 573 News Corp., Class B 166,000 3,808 ------- 4,381 Office Equipment & Supplies - 1.1% CANON, Inc. ADR 55,000 3,225 Pharmaceuticals - 2.6% Schering-Plough Corp. 164,700 5,014 Sepracor, Inc. (a) 67,289 2,760 ------- 7,774 Real Estate - 1.0% CB Richard Ellis Group, Inc., Class A (a) 82,200 3,000 Restaurants - 1.6% Starbucks Corp. (a) 188,200 4,938 Retail - 6.0% Best Buy & Co., Inc. 66,800 3,118 Coach, Inc. (a) 89,000 4,218 CVS/Caremark Corp. 163,575 5,962 Netflix, Inc. (a) 70,000 1,357 Target Corp. 55,100 3,504 ------- 18,159 Services - 3.8% Accenture Ltd., Class A 115,100 4,936 Cognizant Technology Solutions Corp. Class A (a) 55,000 4,130 Monster Worldwide, Inc. (a) 55,000 2,261 ------- 11,327 Telecommunications - 4.5% AT&T, Inc. 162,625 6,748 Comcast Corp., Class A (a) 115,000 3,234 NII Holdings, Inc. (a) 44,200 3,569 ------- 13,551 ------- TOTAL COMMON STOCKS 299,735 Cost: $267,827 <Caption> CORE GROWTH FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 1.6% Fifth Third Bank, Inc., 4.80%, 07/02/07 (Date of Agreement 06/29/07, proceeds at maturity $4,767, collateralized by Federal National Mortgage Assoc. security, 5.00%, 07/01/33, market value $4,908) Cost: $4,765 4,765 4,765 ------- TOTAL INVESTMENTS - 101.3% 304,500 Cost: $272,592 </Table> <Table> <Caption> - ------------------------------------------------------------------------- CORE GROWTH FUND - ------------------------------------------------------------------------- Percentages indicated are based on net assets of $300,571. </Table> (a) Non-income producing security. (b) On June 30, 2007, 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 their 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 Unit Cost: $7.50 Value: $0 Silvan Power Co. Acquisition Date: July 27, 2004 Cost: $0 Unit Cost: $0 Value: $0 ADR - American Depositary Receipt - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 45 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- EMERGING GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 97.5% Apparel Manufacturers - 3.3% Crocs, Inc. (a) 70,000 3,012 Gildan Activewear, Inc. (a) 90,000 3,086 ------- 6,098 Biotechnology - 1.7% Gilead Sciences, Inc. (a) 80,400 3,117 Computers - 4.8% Akamai Technologies, Inc. (a) 45,000 2,189 Corning, Inc. (a) 75,360 1,925 SanDisk Corp. (a) 50,000 2,447 VeriFone Holdings, Inc. (a) 60,000 2,115 ------- 8,676 Consumer Products - 2.8% Energizer Holdings, Inc. (a) 25,000 2,490 Newell Rubbermaid, Inc. 90,000 2,649 ------- 5,139 Electrical Equipment - 1.3% WESCO International, Inc. (a) 40,000 2,418 Electronics - 6.7% Broadcom Corp., Class A (a) 60,000 1,755 Lam Research Corp. (a) 51,000 2,621 MEMC Electronic Materials, Inc. (a) 70,000 4,278 PerkinElmer, Inc. 75,000 1,955 Tessera Technologies, Inc. (a) 40,000 1,622 ------- 12,231 Energy & Utilities - 11.9% Airgas, Inc. 40,000 1,916 Allegheny Energy, Inc. (a) 50,000 2,587 Core Laboratories N.V. (a) 21,000 2,135 Dresser-Rand Group, Inc. (a) 60,000 2,370 EOG Resources, Inc. 46,400 3,390 Noble Energy, Inc. 25,000 1,560 Patterson-UTI Energy, Inc. 85,200 2,233 The AES Corp. (a) 65,000 1,422 Transocean, Inc. (a) 37,700 3,996 ------- 21,609 Financial Services - 4.4% CME Group, Inc. 5,406 2,889 IntercontinentalExchange, Inc. (a) 12,000 1,774 T. Rowe Price Group, Inc. 66,110 3,430 ------- 8,093 Foods - 1.3% Campbell Soup Co. 60,000 2,329 Healthcare - 8.5% C.R. Bard, Inc. 30,000 2,479 Intuitive Surgical, Inc. (a) 17,650 2,449 Kyphon, Inc. (a) 37,000 1,782 Laboratory Corp. of America Holdings (a) 40,000 3,130 PDL BioPharma, Inc. (a) 50,000 1,165 Psychiatric Solutions, Inc. (a) 60,000 2,176 St. Jude Medical, Inc. (a) 55,000 2,282 ------- 15,463 Hotels & Motels - 0.9% Hilton Hotels Corp. 50,000 1,674 Investment Banking & Brokerage - 2.0% A.G. Edwards, Inc. 20,000 1,691 Affiliated Managers Group, Inc. (a) 15,000 1,931 ------- 3,622 Manufacturing - 12.7% BE Aerospace, Inc. (a) 50,000 2,065 Commercial Metals Co. 40,000 1,351 Cummins, Inc. 40,000 4,047 Eagle Materials, Inc. 41,500 2,036 Lennox International, Inc. 70,000 2,396 National-Oilwell Varco, Inc. (a) 27,000 2,814 Oshkosh Truck Corp. 58,568 3,685 Roper Industries, Inc. 45,000 2,570 Terex Corp. (a) 25,000 2,033 ------- 22,997 Mining - 0.7% Yamana Gold, Inc. 110,000 1,223 Multimedia - 0.7% Sinclair Broadcast Group, Inc., Class A 90,000 1,280 Pharmaceuticals - 3.1% McKesson Corp. 31,000 1,849 Pharmaceutical Product Development, Inc. 60,000 2,296 Sepracor, Inc. (a) 38,000 1,559 ------- 5,704 Real Estate - 2.2% CB Richard Ellis Group, Inc., Class A (a) 110,000 4,015 </Table> SEE FINANCIAL NOTES 46 JUNE 30, 2007 ($ X 1,000) <Table> <Caption> - ------------------------------------------------------------------------- EMERGING GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Restaurants - 1.8% Burger King Holdings, Inc. 60,000 1,580 Jack in the Box, Inc. (a) 25,000 1,774 ------- 3,354 Retail - 10.3% Chico's FAS, Inc. (a) 70,000 1,704 Coach, Inc. (a) 58,000 2,749 J.C. Penney Co., Inc. 24,000 1,737 Nordstrom, Inc. 48,012 2,454 Polo Ralph Lauren 40,000 3,924 Priceline.com, Inc. (a) 20,000 1,375 The Men's Wearhouse, Inc. 44,000 2,247 Urban Outfitters, Inc. (a) 100,000 2,403 Whole Foods Market, Inc. 5,900 226 ------- 18,819 Services - 9.6% CheckFree Corp. (a) 60,000 2,412 Cognizant Technology Solutions Corp., Class A (a) 40,000 3,004 Expeditors International of Washington, Inc. 63,200 2,610 Fluor Corp. 9,000 1,002 Macrovision Corp. (a) 80,000 2,405 Monster Worldwide, Inc. (a) 45,000 1,850 Nalco Holding Co. 65,000 1,784 Pool Corp. 63,500 2,478 ------- 17,545 Telecommunications - 5.2% CommScope, Inc. (a) 56,000 3,267 NII Holdings, Inc. (a) 22,500 1,817 Polycom, Inc. (a) 75,000 2,520 Time Warner Telecom, Inc., Class A (a) 95,000 1,910 ------- 9,514 Transportation - 1.6% American Commercial Lines, Inc. (a) 45,000 1,172 Canadian Pacific Railway, Ltd. 25,000 1,721 ------- 2,893 ------- TOTAL COMMON STOCKS 177,813 Cost: $129,979 <Caption> SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 2.1% Fifth Third Bank, Inc., 4.80%, 07/02/07 (Date of Agreement 06/29/07, proceeds at maturity $3,753, collateralized by Federal National Mortgage Assoc. security, 5.00%, 07/01/33, market value $3,864) Cost: $3,751 3,751 3,751 ------- TOTAL INVESTMENTS - 99.6% 181,564 Cost: $133,730 </Table> Percentages indicated are based on net assets of $182,229. (a) Non-income producing security. - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 47 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- SMALL CAP CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 94.5% Apparel Manufacturers - 4.7% Crocs, Inc. (a) 15,000 645 Deckers Outdoor Corp. (a) 13,000 1,312 ------ 1,957 Banks - 0.5% Pinnacle Financial Partners, Inc. (a) 7,000 206 Biotechnology - 1.8% American Oriental Bioengineering, Inc. (a) 45,000 400 Myriad Genetics, Inc. (a) 10,000 372 ------ 772 Broadcasting - 1.2% Lin TV Corp., Class A (a) 26,000 489 Computers - 8.7% American Reprographics Co. (a) 18,000 554 ANSYS, Inc.(a) 20,000 530 Concur Technologies, Inc. (a) 27,000 617 Mentor Graphics Corp. (a) 25,000 329 NIC, Inc. 70,000 479 Sykes Enterprises, Inc. (a) 31,500 598 VeriFone Holdings, Inc. (a) 15,000 529 ------ 3,636 Electrical Equipment - 1.6% Genlyte Group (a) 8,500 668 Electronics - 2.4% Diodes, Inc. (a) 16,000 668 SiRF Technology Holdings, Inc. (a) 16,000 332 ------ 1,000 Energy & Utilities - 8.6% Airgas, Inc. 11,500 551 Atwood Oceanics, Inc. (a) 6,000 412 Core Laboratories N.V. (a) 11,000 1,119 Dresser-Rand Group, Inc. (a) 14,000 553 Holly Corp. 13,000 964 ------ 3,599 Financial - Diversified - 1.1% Advanta Corp., Class B 15,000 467 Foods - 1.5% Spartan Stores, Inc. 18,500 609 Healthcare - 13.6% Allscripts Healthcare Solutions, Inc. (a) 19,000 484 American Medical Systems Holdings, Inc. (a) 14,000 253 Arena Pharmaceuticals, Inc. (a) 20,000 220 Bio-Reference Laboratories, Inc. (a) 16,000 438 Healthways, Inc. (a) 7,000 332 Integra LifeSciences Holdings Corp. (a) 9,500 469 Kyphon, Inc. (a) 8,500 409 Natus Medical, Inc. (a) 25,000 398 Omnicell, Inc. (a) 15,000 312 PDL BioPharma, Inc. (a) 14,000 326 Psychiatric Solutions, Inc. (a) 13,000 471 Quality Systems, Inc. 13,000 494 Sirona Dental Systems, Inc. (a) 12,000 454 Ventana Medical Systems, Inc. (a) 8,000 617 ------ 5,677 Insurance - 0.9% Tower Group, Inc. 12,000 383 Investment Banking & Brokerage - 4.0% Affiliated Managers Group, Inc. (a) 6,000 773 Investment Technology Group, Inc. (a) 10,000 433 Knight Capital Group, Inc., Class A (a) 28,000 465 ------ 1,671 Manufacturing - 15.8% Apogee Enterprises, Inc. 20,000 556 Baldor Electric Co. 13,000 641 Barnes Group, Inc. 17,500 554 BE Aerospace, Inc. (a) 21,000 867 Century Aluminum Co. (a) 8,500 464 Eagle Materials, Inc. 11,500 564 Gardner Denver, Inc. (a) 11,500 489 Itron, Inc. (a) 8,500 662 Oshkosh Truck Corp. 11,000 692 Roper Industries, Inc. 10,500 600 Silgan Holdings, Inc. 10,000 553 ------ 6,642 </Table> SEE FINANCIAL NOTES 48 JUNE 30, 2007 ($ X 1,000) <Table> <Caption> - ------------------------------------------------------------------------- SMALL CAP CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Pharmaceuticals - 2.0% Pharmion Corp. (a) 10,000 290 Progenics Pharmaceuticals, Inc. (a) 13,500 291 ViroPharma, Inc. (a) 20,000 276 ------ 857 Restaurants - 2.2% AFC Enterprises, Inc. (a) 25,000 432 Jack in the Box, Inc. (a) 7,000 497 ------ 929 Retail - 6.1% Casual Male Retail Group, Inc. (a) 45,000 455 Guitar Center, Inc. (a) 7,500 449 Monro Muffler Brake, Inc. 12,000 449 Priceline.com, Inc. (a) 12,000 824 The Children's Place Retail Stores, Inc. (a) 7,500 387 ------ 2,564 Services - 12.2% Bankrate, Inc. (a) 13,000 623 First Cash Financial Services, Inc. (a) 20,000 469 Forrester Research, Inc. (a) 14,000 394 LIFE TIME FITNESS, Inc. (a) 12,000 639 LKQ Corp. (a) 19,000 469 Mobile Mini, Inc. (a) 20,000 584 Pool Corp. 14,000 546 Portfolio Recovery Associates, Inc. 11,000 660 The Knot, Inc. (a) 15,000 303 TheStreet.com, Inc. 38,000 413 ------ 5,100 Telecommunications - 4.5% Atheros Communications, Inc. (a) 15,500 478 CommScope, Inc. (a) 9,000 525 NICE Systems Ltd. ADR (a) 25,000 869 ------ 1,872 Transportation - 1.1% Hub Group, Inc., Class A (a) 12,500 440 ------ TOTAL COMMON STOCKS 39,538 Cost: $30,044 <Caption> SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 4.6% Fifth Third Bank, Inc., 4.80%, 07/02/07 (Date of Agreement 06/29/07, proceeds at maturity $1,937, collateralized by Federal National Mortgage Assoc. security, 5.00%, 07/01/33, market value $1,995) Cost: $1,937 1,937 1,937 ------ TOTAL INVESTMENTS - 99.1% 41,475 Cost: $31,981 </Table> Percentages indicated are based on net assets of $41,830 (a) Non-income producing security. ADR -- American Depositary Receipt - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 49 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- VALUE FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 99.3% Air Freight - 1.9% FedEx Corp. 11,116 1,234 Apparel Manufacturers - 4.0% Liz Claiborne, Inc. 24,200 902 NIKE, Inc., Class B 14,028 818 VF Corp. 9,430 864 ------ 2,584 Auto Manufacturing - 1.2% Toyota Motor Corp. ADR 5,970 752 Banks - 3.4% Bank of America Corp. 18,511 904 Huntington Bancshares, Inc. 33,800 769 KeyCorp 15,600 536 ------ 2,209 Chemicals - 3.0% Amgen, Inc. (a) 17,900 990 Praxair, Inc. 13,142 946 ------ 1,936 Computers - 8.6% Corning, Inc. (a) 37,188 950 Hewlett-Packard Co. 20,917 933 Intel Corp. 40,113 953 International Business Machines Corp. 10,350 1,090 Microsoft Corp. 22,024 649 Oracle Corp. (a) 49,603 978 ------ 5,553 Consumer Products - 1.5% Kimberly-Clark Corp. 14,353 960 Electrical Equipment - 1.0% Emerson Electric Co. 13,306 623 Electronics - 6.2% Cisco Systems, Inc. (a) 29,487 821 International Rectifier Corp. (a) 17,350 646 MEMC Electronic Materials, Inc. (a) 13,207 807 Rockwell Automation, Inc. 11,111 772 Texas Instruments, Inc. 24,580 925 ------ 3,971 Energy & Utilities - 12.9% Allegheny Energy, Inc. (a) 15,850 820 Baker Hughes, Inc. 11,151 938 ConocoPhillips 28,366 2,227 Devon Energy Corp. 8,957 701 GlobalSantaFe Corp. 16,600 1,199 Transocean, Inc. (a) 13,071 1,385 UGI Corp. 36,612 999 ------ 8,269 Financial - Diversified - 10.0% Capital One Financial Corp. 14,539 1,140 JPMorgan Chase & Co. 27,226 1,319 Lehman Brothers Holdings, Inc. 11,921 888 Merrill Lynch & Co., Inc. 10,358 866 MetLife, Inc. 10,741 693 Wachovia Corp. 29,064 1,490 ------ 6,396 Foods - 5.3% Bunge, Ltd. 7,700 651 General Mills, Inc. 12,500 730 Kellogg Co. 22,174 1,148 PepsiCo, Inc. 13,387 868 ------ 3,397 Healthcare - 11.4% Baxter International. Inc. 15,490 873 Becton, Dickinson & Co. 12,156 906 Coventry Health Care, Inc. (a) 11,091 639 Johnson & Johnson, Inc. 15,562 959 NBTY, Inc. (a) 20,500 886 Omnicare, Inc. 28,241 1,018 Pfizer, Inc. 39,914 1,020 WellPoint, Inc. (a) 12,859 1,026 ------ 7,327 Insurance - 5.0% American International Group, Inc. 12,902 904 The Allstate Corp. 12,881 792 The Chubb Corp. 14,092 763 The Hartford Financial Services Group, Inc. 7,656 754 ------ 3,213 Investment Banking & Brokerage - 2.0% The Goldman Sachs Group, Inc. 6,040 1,309 Manufacturing - 5.7% 3M Co. 9,378 814 Eagle Materials, Inc. 16,089 789 Ingersoll-Rand Co. 15,017 823 Precision Castparts Corp. 9,907 1,203 ------ 3,629 </Table> SEE FINANCIAL NOTES 50 JUNE 30, 2007 ($ X 1,000) <Table> <Caption> - ------------------------------------------------------------------------- VALUE FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Railroads - 1.3% Norfolk Southern Corp. 15,899 836 Real Estate - 1.0% Pulte Homes, Inc. 28,200 633 Restaurants - 1.5% McDonald's Corp. 18,633 946 Retail - 4.4% The Home Depot, Inc. 20,200 794 Priceline.com, Inc. (a) 10,850 746 SUPERVALU, INC 12,000 556 Target Corp. 11,082 705 ------ 2,801 Services - 2.4% Omnicom Group, Inc. 11,000 582 URS Corp. (a) 19,209 933 ------ 1,515 Telecommunications - 5.6% AT&T, Inc. 32,451 1,347 Motorola, Inc. 65,826 1,165 Sprint Nextel Corp. 52,110 1,079 ------ 3,591 ------ TOTAL COMMON STOCKS 63,684 Cost: $53,631 </Table> <Table> <Caption> - ------------------------------------------------------------------------- VALUE FUND SECURITY, RATE, MATURITY DATE PRINCIPAL(S) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 3.4% Fifth Third Bank, Inc., 4.80%, 07/02/07 (Date of Agreement 06/29/07, proceeds at maturity $2,207, collateralized by Federal National Mortgage Assoc. security, 5.00%, 07/01/33, market value $2,273) Cost: $2,206 2,206 2,206 ------ TOTAL INVESTMENTS - 102.7% 65,890 Cost: $55,837 </Table> Percentages indicated are based on net assets of $64,170. (a) Non-income producing security. ADR - American Depositary Receipt - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 51 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- GLOBAL EQUITY FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 97.8% Automobile Manufacturing - 3.2% Toyota Motor Co. ADR 8,000 1,007 Volvo AB ADR 82,500 1,641 ------ 2,648 Banks - 9.2% Australia and New Zealand Banking Group Ltd. ADR 9,500 1,170 Banco Santander Central Hispano SA ADR 70,000 1,287 Bank of Ireland (a) 45,000 905 Bank of Nova Scotia 20,000 977 ICICI Bank Ltd. ADR 20,000 983 Julius Baer Holding Ltd. (a) 22,000 1,578 UBS AG ADR 13,000 780 ------ 7,680 Building Products - 1.6% Lafarge S.A ADR 30,000 1,367 Chemicals - 1.5% Sigma-Aldrich Corp. 29,000 1,237 Computer Services - 2.5% Akamai Technologies, Inc. (b) 22,500 1,094 Cognizant Technology Solutions Corp., Class A (b) 13,500 1,014 ------ 2,108 Computers - 1.3% International Business Machines Corp. 10,000 1,053 Construction - 1.0% Desarrolladora Homex SA de C.V. ADR (b) 14,000 848 Electronics - 2.7% Agilent Technologies, Inc. (b) 30,000 1,153 Cisco Systems, Inc. (b) 40,000 1,114 ------ 2,267 Energy & Utilities - 14.9% Allegheny Energy, Inc. (b) 15,000 776 Apache Corp. 12,000 979 BG Group plc ADR 12,000 981 ConocoPhillips 24,500 1,924 EnCana Corp. 17,500 1,075 Questar Corp. 20,000 1,057 Statoil ASA ADR 32,000 992 The AES Corp. (b) 50,000 1,094 Transocean, Inc. (b) 13,000 1,378 Valero Energy Corp. 14,000 1,034 Veolia Environnement ADR 12,500 980 ------ 12,270 Entertainment - 3.8% Nintendo Co., Ltd. (a) 4,000 1,464 The Walt Disney Co. 50,000 1,707 ------ 3,171 Financial - Diversified - 6.1% AFLAC, Inc. 18,000 925 American Express Co. 16,000 979 Deutsche Boerse AG (a) 19,000 2,127 JPMorgan Chase & Co. 21,000 1,017 ------ 5,048 Food & Beverages - 4.7% Groupe Danone ADR 80,000 1,301 Nestle SA (a) 4,000 1,518 PepsiCo, Inc. 17,000 1,102 ------ 3,921 Healthcare - 7.7% Becton, Dickinson & Co. 16,000 1,192 C.R. Bard, Inc. 10,000 826 Fresenius Medical Care AG & Co. KGaA ADR 27,000 1,241 Gilead Sciences, Inc. (b) 20,000 775 Laboratory Corp. of America Holdings (b) 15,000 1,174 Stryker Corp. 18,500 1,167 ------ 6,375 Insurance - 4.1% Allianz SE ADR 57,000 1,327 ING Groep NV (a) 19,000 837 Lincoln National Corp. 17,000 1,206 ------ 3,370 </Table> SEE FINANCIAL NOTES 52 JUNE 30, 2007 ($ X 1,000) <Table> <Caption> - ------------------------------------------------------------------------- GLOBAL EQUITY FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Manufacturing - 14.1% Danaher Corp. 12,000 906 Deere & Co. 11,000 1,328 FANUC Ltd. (a) 9,000 929 Johnson Matthey plc (a) 33,000 1,117 Kennametal, Inc. 11,500 943 Komatsu, Ltd. (a) 45,000 1,307 L'Air Liquide SA ADR 66,000 1,736 POSCO ADR 4,000 480 Precision Castparts Corp. 8,000 971 Samsung Heavy Industries Co., Ltd. (a) 24,000 1,174 Taiwan Semiconductor Manufacturing Co. Ltd. ADR 77,635 864 ------ 11,755 Office Equipment & Supplies - 2.0% CANON, Inc. ADR 29,000 1,701 Pharmaceuticals - 1.1% Novo Nordisk A/S ADR 8,500 924 Real Estate - 1.0% City Developments, Ltd. (a) 70,000 792 Retail - 6.4% Industria de Diseno Textil SA (Inditex) (a) 14,000 823 Kohl's Corp. (b) 17,000 1,208 Luxottica Group SpA ADR 45,000 1,739 Marks & Spencer Group plc ADR 20,000 1,512 ------ 5,282 Services - 2.7% Swire Pacific, Ltd., Class A (a) 70,000 781 WPP Group plc (a) 99,000 1,481 ------ 2,262 Telecommunications - 5.2% America Movil SA de C.V. ADR 19,000 1,177 PT Telekomunikasi Indonesia ADR 22,000 948 Telenor ASA ADR 20,000 1,177 Vodafone Group plc (a) 300,000 1,009 ------ 4,311 Transportation - 1.0% Canadian Pacific Railway, Ltd. 12,000 826 ------ TOTAL COMMON STOCKS 81,216 Cost: $62,509 <Caption> SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 3.9% Fifth Third Bank, Inc., 4.80%, 07/02/07 (Date of Agreement 06/29/07, proceeds at maturity $3,283, collateralized by Federal National Mortgage Assoc. security, 5.00%, 07/01/33, market value $3,381) Cost: $3,282 3,282 3,282 ------ TOTAL INVESTMENTS - 101.7% 84,498 Cost: $65,791 </Table> SEE FINANCIAL NOTES 53 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- GLOBAL EQUITY FUND - ------------------------------------------------------------------------- Percentages indicated are based on net assets of $83,125. (a) Fair valued security. The approximate market value and percentage of investments of securities that were fair valued for the Global Equity Fund were $17,842 and 21.1%. (b) Non-income producing security. ADR - American Depositary Receipt </Table> <Table> The fund's portfolio holdings as of June 30, 2007, were distributed among the following countries: ------------------------- PERCENTAGE OF NET ASSETS SHORT TERM EQUITY & OTHER TOTAL ------------------------- Australia 1.4% 1.4% Canada 3.5% 3.5% Cayman Islands 1.7% 1.7% Denmark 1.1% 1.1% France 6.5% 6.5% Germany 5.6% 5.6% Hong Kong 1.0% 1.0% India 1.2% 1.2% Indonesia 1.1% 1.1% Ireland 1.1% 1.1% Italy 2.1% 2.1% Japan 7.7% 7.7% Republic of Korea 2.0% 2.0% Mexico 2.4% 2.4% Netherlands 1.0% 1.0% Norway 2.6% 2.6% Singapore 1.0% 1.0% Spain 2.5% 2.5% Sweden 2.0% 2.0% Switzerland 4.7% 4.7% Taiwan 1.0% 1.0% United Kingdom 7.3% 7.3% United States 37.3% 2.2% 39.5% ---------------------------- Total 97.8% 2.2% 100.0% </Table> - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 54 JUNE 30, 2007 ($ X 1,000) <Table> <Caption> - ------------------------------------------------------------------------- BALANCED FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 72.0% Air Freight - 1.2% FedEx Corp. 1,320 146 Apparel Manufacturers - 3.3% Liz Claiborne, Inc. 3,400 127 NIKE, Inc., Class B 2,100 122 VF Corp. 1,521 140 ----- 389 Auto Manufacturing - 1.0% Toyota Motor Corp. ADR 900 113 Banks - 1.8% Bank of America Corp. 2,780 136 KeyCorp 2,340 80 ----- 216 Chemicals - 2.5% Amgen, Inc. (a) 2,650 147 Praxair, Inc. 2,045 147 ----- 294 Computers - 6.5% Corning, Inc. (a) 5,338 136 Hewlett-Packard Co. 2,200 98 Intel Corp. 5,960 142 International Business Machines Corp. 1,430 151 Microsoft Corp. 3,410 100 Oracle Corp. (a) 6,850 135 ----- 762 Consumer Products - 1.2% Kimberly-Clark Corp. 2,160 144 Electrical Equipment - 0.8% Emerson Electric Co. 2,000 94 Electronics - 4.9% Cisco Systems, Inc. (a) 4,200 117 International Rectifier Corp. (a) 2,100 78 MEMC Electronic Materials, Inc. (a) 1,980 121 Rockwell Automation, Inc. 1,740 121 Texas Instruments, Inc. 3,793 143 ----- 580 Energy & Utilities - 9.5% Allegheny Energy, Inc. (a) 1,920 99 Baker Hughes, Inc. 1,600 135 ConocoPhillips 4,200 330 Devon Energy Corp. 1,450 114 GlobalSantaFe Corp. 1,750 126 Transocean, Inc. (a) 1,817 193 UGI Corp. 4,370 119 ----- 1,116 Financial - Diversified - 8.2% Capital One Financial Corp. 2,182 171 JPMorgan Chase & Co. 4,186 203 Lehman Brothers Holdings, Inc. 1,799 134 Merrill Lynch & Co., Inc. 1,660 139 MetLife, Inc. 1,710 110 Wachovia Corp. 4,140 212 ----- 969 Foods - 2.6% Kellogg Co. 3,420 177 PepsiCo, Inc. 2,010 130 ----- 307 Healthcare - 8.4% Baxter International, Inc. 2,330 131 Becton, Dickinson & Co. 1,280 95 Coventry Health Care, Inc. (a) 1,670 96 Johnson & Johnson, Inc. 2,340 145 NBTY, Inc. (a) 2,335 101 Omnicare, Inc. 4,300 156 Pfizer, Inc. 4,850 124 WellPoint, Inc. (a) 1,730 138 ----- 986 Insurance - 4.0% American International Group, Inc. 1,690 118 The Allstate Corp. 1,935 119 The Chubb Corp. 2,120 115 The Hartford Financial Services Group, Inc. 1,250 123 ----- 475 Investment Banking & Brokerage - 1.2% The Goldman Sachs Group, Inc. 678 147 Manufacturing - 4.2% 3M Co. 1,510 130 Eagle Materials, Inc. 2,424 119 Ingersoll-Rand Co. 2,253 124 Precision Castparts Corp. 1,028 125 ----- 498 Railroads - 1.1% Norfolk Southern Corp. 2,392 126 </Table> SEE FINANCIAL NOTES 55 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- BALANCED FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Real Estate - 0.7% Pulte Homes, Inc. 3,800 85 Restaurants - 1.2% McDonald's Corp. 2,890 147 Retail - 2.5% The Home Depot, Inc. 3,000 118 SUPERVALU, INC 1,300 60 Target Corp. 1,756 112 ----- 290 Services - 1.2% URS Corp. (a) 2,912 141 Telecommunications - 4.0% AT&T, Inc. 3,880 161 Motorola, Inc. 8,690 154 Sprint Nextel Corp. 7,730 160 ----- 475 ----- TOTAL COMMON STOCKS 8,500 Cost: $7,885 <Caption> SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS - 0.2% First Horizon Alternative Mortgage Securities, 4.73%, 06/25/34 (b) 8 8 5.50%, 03/25/35 (b) 10 10 ----- Cost: $19 18 CORPORATE BONDS - 7.4% Banks - 0.9% Bank of America Corp., 4.38%, 12/01/10 50 48 Capital One Bank, 6.50%, 06/13/13 50 52 ----- 100 Chemicals - 0.3% Amgen, Inc., 6.50%, 12/01/07 40 40 Computers - 0.1% Corning, Inc., 6.20%, 03/15/16 15 15 Construction - 0.2% KB HOME, 5.88%, 01/15/15 15 13 Pulte Homes, Inc., 6.00%, 02/15/35 10 9 ----- 22 Energy & Utilities - 0.6% Atmos Energy, 4.95%, 10/15/14 15 14 Chesapeake Energy Corp., 6.88%, 01/15/16 20 20 Enterprise Products Partners LP, 4.95%, 06/01/10 20 19 XTO Energy, Inc., 5.30%, 06/30/15 20 19 ----- 72 Financial - Diversified - 2.7% Chase Issuance Trust, 3.22%, 06/15/10 100 99 CIT Group, Inc., 5.00%, 02/01/15 50 46 Citigroup, Inc., 5.51%, 05/18/10 (b) 50 50 HSBC Finance Corp., 4.63%, 09/15/10 50 49 International Lease Finance Corp., 5.80%, 08/15/07 50 50 Liberty Mutual Group, 5.75%, 03/15/14 (c) 10 10 Riddell Bell Holdings, 8.38%, 10/01/12 15 15 ----- 319 Financial Services - 0.4% Franklin Resources, Inc., 3.70%, 04/15/08 48 47 Food - 0.4% The Pepsi Bottling Group, Inc., 5.63%, 02/17/09 (c) 50 50 Healthcare - 0.5% Medtronic, Inc., 4.75%, 09/15/15 50 47 </Table> SEE FINANCIAL NOTES 56 JUNE 30, 2007 ($ X 1,000) <Table> <Caption> - ------------------------------------------------------------------------- BALANCED FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- Investment Banking & Brokerage - 0.1% The Goldman Sachs Group, Inc., 5.00%, 10/01/14 15 14 Manufacturing - 0.0%* American Standard, Inc., 7.38%, 02/01/08 5 5 Real Estate - 0.0%* Brandywine Realty Trust, 5.40%, 11/01/14 5 5 Restaurants - 0.4% McDonald's Corp., 5.00%, 02/15/15 50 47 Telecommunications - 0.8% AT&T, Inc., 5.88%, 02/01/12 50 51 Directv Holdings, 6.38%, 06/15/15 30 28 Sprint Nextel Corp., 7.38%, 08/01/15 10 10 ----- 89 ----- TOTAL CORPORATE BONDS 872 Cost: $895 FOREIGN GOVERNMENT BOND - 0.1% United Mexican States, 6.75%, 09/27/34 15 16 ----- Cost: $15 16 U.S. GOVERNMENT AGENCY OBLIGATIONS - 13.1% Federal Farm Credit Bank - 1.0% 5.83%, 01/14/08 25 25 5.43%, 10/24/12 100 99 ----- 124 Federal Home Loan Bank - 1.4% 5.50%, 01/12/11 50 50 5.20%, 05/11/12 15 15 4.88%, 03/11/16 100 96 ----- 161 Federal Home Loan Mortgage Corporation - 4.1% 4.55%, 01/20/11 5 5 4.50%, 01/15/13 9 9 5.00%, 10/01/18 80 78 5.50%, 10/01/18 50 49 5.20%, 03/05/19 40 38 5.50%, 08/20/19 20 20 6.00%, 12/01/20 38 38 5.50%, 03/01/21 83 82 5.50%, 04/01/21 82 81 5.00%, 06/01/35 85 80 ----- 480 Federal National Mortgage Association - 6.6% 5.25%, 01/15/09 14 14 4.38%, 09/15/12 4 4 5.00%, 04/15/15 20 20 5.55%, 08/04/15 100 98 6.00%, 02/25/17 82 82 5.00%, 10/01/18 73 71 4.50%, 06/01/19 117 111 5.00%, 09/01/19 32 31 5.50%, 03/25/29 100 100 6.50%, 07/01/32 2 2 6.00%, 11/01/32 1 1 5.50%, 03/01/33 24 23 4.58%, 12/01/34 32 31 4.84%, 01/01/35 16 16 4.82%, 08/01/35 85 83 5.50%, 10/01/35 98 95 ----- 782 ----- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 1,547 Cost: $1,579 U.S. TREASURY NOTES - 6.0% 6.50%, 02/15/10 100 105 4.00%, 03/15/10 100 98 3.88%, 05/15/10 35 34 4.75%, 05/15/14 10 10 4.00%, 02/15/15 100 94 4.13%, 05/15/15 30 28 4.50%, 11/15/15 100 96 4.50%, 02/15/16 100 96 4.50%, 05/15/17 100 96 5.38%, 02/15/31 50 51 ----- Cost: $723 708 </Table> SEE FINANCIAL NOTES 57 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- BALANCED FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 1.7% Fifth Third Bank, Inc., 4.80%, 07/02/07 (Date of Agreement 06/29/07, proceeds at maturity $199, collateralized by Federal National Mortgage Assoc. security, 5.00%, 07/01/33, market value $205) Cost: $199 199 199 ----- TOTAL INVESTMENTS - 100.5% 11,860 Cost: $11,315 </Table> Percentages indicated are based on net assets of $11,801. (a) Non-income producing security. (b) Variable rate security. The rate presented represents the rate in effect at June 30, 2007. (c) Rule 144A security. * Rounds to less than 0.1% ADR - American Depositary Receipt - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 58 JUNE 30, 2007 ($ X 1,000) <Table> <Caption> - ------------------------------------------------------------------------- INCOME FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS - 21.7% Capital One Multi-Asset Execution Trust 5.50%, 09/15/11 (a) 700 702 Chase Manhattan Auto Owner Trust, 4.88%, 06/15/12 240 238 Citibank Credit Card Issuance Trust, 3.50%, 08/16/10 285 279 Citigroup Commercial Mortgage Trust, 4.22%, 09/20/51 (b) 500 487 Crusade Global Trust, 5.42%, 11/15/37 (a) 437 437 5.49%, 11/19/37 (a) 325 326 First Horizon Alternative Mortgage Securities, 4.73%, 06/25/34 (a) 661 652 First Union National Bank Commercial Mortgage, 6.94%, 10/15/32 36 36 6.42%, 08/15/33 296 303 Greenwich Capital Commercial Funding Corp., 4.95%, 01/11/35 525 508 3.92%, 08/10/42 267 263 GS Mortgage Securities Corp. II, 4.61%, 01/10/40 800 761 Harley-Davidson Motorcycle Trust, 3.20%, 05/15/12 555 542 LB-UBS Commercial Mortgage Trust, 6.65%, 11/15/27 425 440 6.37%, 12/15/28 900 925 5.02%, 09/15/40 (a) 407 386 Merrill Lynch/Countrywide Commercial Mortgage Trust, 4.71%, 07/12/46 (a) 685 672 5.53%, 03/12/51 (a) 280 271 MLCC Mortgage Investors, Inc., 5.55%, 03/25/30 (a) 220 220 Puma Finance Limited, 5.56%, 08/09/35 (a) (b) 755 755 Wachovia Bank Commercial Mortgage Trust, 4.96%, 11/15/35 500 479 5.18%, 07/15/42 510 488 ------ Cost: $10,270 10,170 CORPORATE BONDS - 11.7% Airlines - 1.0% Northwest Airlines, Inc., 6.26%, 11/20/21 480 482 Banking - 2.1% Banco Mercantil del Norte, 6.86%, 10/13/21 (b) 600 600 Bank of America Corp., 5.30%, 03/15/17 375 358 ------ 958 Broadcasting - 0.5% Rogers Cable, Inc., 5.50%, 03/15/14 250 242 Computers - 0.8% Dell, Inc., 7.10%, 04/15/28 350 368 Energy & Utilities - 0.2% Chesapeake Energy Corp., 6.50%, 08/15/17 110 104 Financial - Diversified - 0.7% Citigroup, Inc., 5.50%, 02/15/17 355 344 Insurance - 2.0% W.R. Berkley Corp., 5.60%, 05/15/15 300 290 Fidelity National Financial, 5.25%, 03/15/13 250 238 Lincoln National Corp., 7.00%, 05/17/66 350 359 ------ 887 Multimedia - 1.5% Comcast Corp., 6.45%, 03/15/37 355 342 Time Warner Cable, Inc., 5.85%, 05/01/17 (b) 355 345 ------ 687 Real Estate - 0.7% iStar Financial, Inc., 5.875%, 03/15/16 355 342 </Table> SEE FINANCIAL NOTES 59 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- INCOME FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REITS - Diversified - 0.8% CBG Florida REIT Corp., 7.11%, 02/15/49 (b) 375 370 Telecommunications - 1.4% Embarq Corp., 8.00%, 06/01/36 355 360 Sprint Nextel Corp., 7.38%, 08/01/15 310 310 ------ 670 ------ TOTAL CORPORATE BONDS 5,454 Cost: $5,563 U.S. GOVERNMENT AGENCY OBLIGATIONS - 34.4% Federal Home Loan Mortgage Corporation - 12.4% 4.50%, 04/01/20 1,254 1,191 5.00%, 10/01/35 1,750 1,645 6.00%, 07/01/36 1,779 1,764 5.50%, 03/01/37 1,230 1,186 ------ 5,786 Federal National Mortgage Association - 22.0% 5.76%, 12/25/11 200 203 4.50%, 01/01/20 1,443 1,370 5.00%, 08/01/20 1,405 1,359 4.40%, 11/25/33 760 753 5.50%, 03/01/36 1,787 1,724 5.50%, 04/01/36 1,766 1,708 6.00%, 07/01/36 1,888 1,870 5.50%, 06/01/37 1,350 1,294 ------ 10,281 ------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 16,067 Cost: $16,153 U.S. TREASURY NOTES - 30.7% 4.50%, 04/30/09 6,481 6,437 4.50%, 04/30/12 4,164 4,087 4.50%, 05/15/17 2,036 1,952 4.50%, 02/15/36 2,083 1,886 ------ Cost: $14,516 14,362 REPURCHASE AGREEMENTS - 6.4% Fifth Third Bank, Inc., 4.80%, 07/02/07 (Date of Agreement 06/29/07, proceeds at maturity $3,017, collateralized by Federal National Mortgage Assoc. security, 5.00%, 07/01/33, market value $3,106) Cost: $3,015 3,015 3,015 ------ TOTAL INVESTMENTS - 104.9% 49,068 Cost: $49,517 </Table> Percentages indicated are based on net assets of $46,765. (a) Variable rate security. The rate presented represents the rate in effect at June 30, 2007. (b) Rule 144A security. - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 60 JUNE 30, 2007 ($ X 1,000) <Table> <Caption> - ------------------------------------------------------------------------- MONEY MARKET FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT - 5.1% Abbey National, 5.35%, 10/24/07 1,000 1,000 City National Bank of New Jersey, 4.50%, 3/13/08 (a) 100 100 PNC Bank, 5.27%, 09/27/07 1,000 1,000 Self Help Credit Union, 5.08%, 09/14/07 (a) 100 100 Wilmington Trust Corp., 5.31%, 09/04/07 1,000 1,000 5.29%, 10/05/07 1,000 1,000 ------ TOTAL CERTIFICATES OF DEPOSIT 4,200 Cost: $4,200 COMMERCIAL PAPER - 71.6% American Express Credit, 5.36%, 05/16/08 2,000 1,959 American General Finance Corp., 5.41%, 07/05/07 1,700 1,699 5.41%, 07/06/07 1,114 1,113 5.41%, 07/17/07 763 761 APRECO LLC, 5.39%, 08/10/07 (b) 1,100 1,094 5.40%, 09/17/07 (b) 1,500 1,483 Atlantis One Funding Corp., 5.37%, 07/26/07 (b) 400 399 5.38%, 08/02/07 (b) 400 398 5.38%, 10/18/07 (b) 1,119 1,101 Banco Santander Puerto Rico, 5.40%, 07/26/07 473 471 5.39%, 08/27/07 685 679 Barclays Capital plc, 5.37%, 07/25/07 1,715 1,709 Barton Capital LLC, 5.52%, 07/12/07 (b) 778 777 5.39%, 07/17/07 (b) 774 772 5.39%, 07/19/07 (b) 1,255 1,252 5.38%, 08/07/07 (b) 1,233 1,226 CAFCO, Inc., 5.36%, 07/06/07 (b) 1,023 1,022 5.37%, 07/11/07 (b) 910 909 5.38%, 07/19/07 (b) 1,153 1,150 5.41%, 08/14/07 (b) 541 537 Chariot Funding, 5.39%, 07/11/07 (b) 502 501 Cooperative Association of Tractor Dealers, 5.41%, 07/17/07 500 499 5.41%, 07/19/07 108 108 5.39%, 07/24/07 1,500 1,494 5.41%, 08/02/07 1,022 1,017 5.46%, 08/06/07 280 279 5.44%, 08/29/07 100 99 5.53%, 08/30/07 159 158 Countrywide Home Loans, 5.41%, 07/05/07 500 500 5.42%, 07/20/07 1,000 997 CRC Funding, 5.38%, 07/10/07 (b) 460 459 5.39%, 07/31/07 (b) 596 593 5.41%, 08/24/07 (b) 373 370 Falcon Asset Securitization Corp., 5.40%, 07/20/07 (b) 335 334 5.42%, 08/13/07 (b) 250 248 Fountain Square, 5.38%, 07/02/07 (b) 2,500 2,501 5.37%, 07/16/07 (b) 1,169 1,166 Harley Davidson Funding Corp., 5.35%, 07/05/07 (b) 400 400 ING America Insurance, 5.38%, 07/10/07 1,788 1,785 5.37%, 07/16/07 1,450 1,447 5.37%, 08/13/07 560 557 Ivory Funding, 5.38%, 07/03/07 (b) 1,536 1,536 5.38%, 07/09/07 (b) 1,250 1,249 5.39%, 09/04/07 (b) 261 259 J.P. Morgan Chase & Co., 5.36%, 08/16/07 1,269 1,261 McGraw Hill Cos., Inc., 5.39%, 07/03/07 939 939 5.40%, 08/08/07 1,132 1,126 Merrill Lynch & Co., Inc., 5.36%, 08/20/07 1,100 1,092 5.37%, 08/28/07 1,600 1,586 Metlife Funding Inc., 5.37%, 08/15/07 (b) 1,448 1,439 5.38%, 09/17/07 (b) 771 762 </Table> SEE FINANCIAL NOTES 61 CITIZENS FUNDS HOLDINGS <Table> <Caption> - ------------------------------------------------------------------------- MONEY MARKET FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- The Procter & Gamble Co., 5.34%, 08/01/07 (b) 735 732 5.35%, 08/30/07 (b) 2,269 2,250 Societe Generale, 5.37%, 07/24/07 909 906 5.38%, 08/06/07 1,919 1,908 5.34%, 08/14/07 225 224 5.35%, 11/05/07 869 853 Stanley Works, 5.36%, 08/24/07 (b) 1,182 1,173 UBS Finance Corp., 5.37%, 07/09/07 1,000 999 5.38%, 07/11/07 800 799 5.41%, 10/15/07 400 394 5.40%, 10/23/07 1,650 1,622 ------ TOTAL COMMERCIAL PAPER 59,132 Cost: $59,132 MUNICIPAL NOTES - 7.9% Massachusetts State Development Finance Agency, 5.38%, 12/01/40 (c) 3,000 3,000 New York State Housing Finance Agency, 5.32%, 11/15/29 (c) 3,500 3,500 ------ TOTAL MUNICIPAL NOTES 6,500 Cost: $6,500 U.S. GOVERNMENT AGENCY OBLIGATIONS - 13.2% 4.75%, 08/03/07 2,000 1,999 4.35%, 08/15/07 1,135 1,134 5.25%, 12/26/07 2,390 2,390 3.25%, 01/15/08 1,000 989 4.31%, 03/24/08 900 894 4.00%, 06/30/08 1,000 1,000 5.30%, 11/07/08 1,500 1,500 5.50%, 04/16/12 1,000 1,000 ------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 10,906 ------ Cost: $10,906 TOTAL INVESTMENTS - 97.8% 80,738 Cost: $80,738 </Table> Percentages indicated are based on net assets of $82,532. (a) On June 30, 2007, the fund owned the following restricted securities constituting 0.24% of net assets which may not be publicly sold without registration under the Securities Act of 1933. These securities are valued at their 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: City National Bank of New Jersey Acquisition Date: March 14, 2007 Cost: $100 Unit Cost: $1.00 Value: $100 Self Help Credit Union Acquisition Date: March 14, 2007 Cost: $100 Unit Cost: $1.00 Value: $100 (b) Rule 144A security. (c) Variable rate security. The rate presented represents the rate in effect at June 30, 2007. - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 62 (THIS PAGE INTENTIONALLY LEFT BLANK) 63 STATEMENTS OF ASSETS AND LIABILITIES <Table> <Caption> Core Growth Emerging Growth Small Cap Core Fund Fund Growth Fund - ------------------------------------------------------------------------------------------------ ASSETS Investments, at value $299,735,171 $ 177,812,969 $39,538,120 Repurchase agreements 4,764,977 3,751,120 1,936,562 ------------------------------------------------ Total investments 304,500,148 181,564,089 41,474,682 Cash -- -- -- Foreign currency -- -- -- Receivables: Interest and dividends 124,342 54,971 7,627 Investments sold -- 2,127,870 934,488 Tax reclaims -- -- -- Capital shares issued 296,234 56,986 11,992 Due from investment adviser -- -- -- Prepaid expenses 20,684 14,868 6,182 ------------------------------------------------ Total assets 304,941,408 183,818,784 42,434,971 LIABILITIES Payables: Dividends to shareholders -- -- -- Investments purchased 3,771,451 1,256,430 522,778 Capital shares redeemed 264,566 70,166 32,708 Investment management fees 62,204 75,595 8,544 Administrative fees 18,662 11,339 2,563 Distribution fees 26,086 18,846 4,272 Shareholder service fees 9,911 4,120 853 Transfer agent expenses 127,142 97,066 20,588 Other accrued expenses 90,567 55,833 12,276 ------------------------------------------------ Total liabilities 4,370,589 1,589,395 604,582 - ------------------------------------------------------------------------------------------------ NET ASSETS $300,570,819 $ 182,229,389 $41,830,389 - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ NET ASSETS Standard Shares: Net assets $249,707,189 $ 177,514,009 $41,830,389 Number of shares outstanding 10,965,674 9,554,570 3,023,014 Net asset value, offering and redemption price per share $ 22.77 $ 18.58 $ 13.84 Institutional Shares: Net assets $ 49,000,978 $ 515,111 -- Number of shares outstanding 2,559,119 26,443 -- Net asset value, offering and redemption price per share $ 19.15 $ 19.48 -- Administrative Shares: Net assets $ 1,862,652 $ 4,200,269 -- Number of shares outstanding 79,478 220,362 -- Net asset value, offering and redemption price per share $ 23.44 $ 19.06 -- Net assets consist of: Paid-in capital $272,718,567 $ 290,189,221 $30,709,027 Accumulated (Distributions in excess of) net investment income/loss -- -- -- Accumulated net realized gains/losses on investments and foreign currencies (4,055,989) (155,794,087) 1,627,851 Net unrealized appreciation/depreciation on investments and foreign currencies 31,908,241 47,834,255 9,493,511 - ------------------------------------------------------------------------------------------------ NET ASSETS $300,570,819 $ 182,229,389 $41,830,389 - ------------------------------------------------------------------------------------------------ Investments, at cost $272,591,907 $ 133,729,834 $31,981,171 Foreign currency, at cost -- -- -- </Table> SEE FINANCIAL NOTES 64 AS OF JUNE 30, 2007 <Table> <Caption> Value Global Equity Balanced Income Money Market Fund Fund Fund Fund Fund - -------------------------------------------------------------------------- $63,683,816 $ 81,215,559 $11,661,052 $46,052,728 $80,737,545 2,206,138 3,281,976 198,722 3,015,456 -- - -------------------------------------------------------------------------- 65,889,954 84,497,535 11,859,774 49,068,184 80,737,545 -- -- -- -- 1,784,305 -- 24,167 -- -- -- 55,047 207,909 40,892 319,697 219,851 -- 23,941 -- -- -- -- 23,073 -- -- -- 210,539 4,778 -- 2,090 200,634 25,727 -- 4,633 -- -- 11,606 12,169 5,015 6,813 16,185 - -------------------------------------------------------------------------- 66,192,873 84,793,572 11,910,314 49,396,784 82,958,520 -- -- 4,295 12,601 8,783 1,900,254 1,303,868 86,670 2,459,947 -- 40,422 240,816 -- 100,861 336,435 29,211 34,350 5,364 12,471 11,915 3,947 5,151 729 2,878 5,106 5,774 8,545 1,215 4,796 -- 1,066 1,951 325 1,056 1,812 24,734 45,373 5,716 20,863 34,173 17,092 28,870 5,465 15,859 28,252 - -------------------------------------------------------------------------- 2,022,500 1,668,924 109,779 2,631,332 426,476 - -------------------------------------------------------------------------- $64,170,373 $ 83,124,648 $11,800,535 $46,765,452 $82,532,044 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- $56,385,349 $ 81,749,945 $11,800,535 $46,765,452 $73,015,877 3,681,744 3,814,247 887,381 4,886,717 73,113,436 $ 15.31 $ 21.43 $ 13.30 $ 9.57 $ 1.00 $ 7,785,024 $ 414,154 -- -- $ 9,516,167 507,510 18,476 -- -- 9,521,409 $ 15.34 $ 22.42 -- -- $ 1.00 -- $ 960,549 -- -- -- -- 43,898 -- -- -- -- $ 21.88 -- -- -- $56,277,854 $ 177,027,519 $10,418,748 $53,945,835 $82,568,794 77,613 (352,257) (512) 5,444 1,750 (2,238,502) (112,257,938) 837,559 (6,737,436) (38,500) 10,053,408 18,707,324 544,740 (448,391) -- - -------------------------------------------------------------------------- $64,170,373 $ 83,124,648 $11,800,535 $46,765,452 $82,532,044 - -------------------------------------------------------------------------- $55,836,546 $ 65,790,595 $11,315,034 $49,516,575 $80,737,545 -- 24,107 -- -- -- </Table> SEE FINANCIAL NOTES 65 STATEMENTS OF OPERATIONS <Table> <Caption> Core Growth Emerging Growth Small Cap Core Fund Fund Growth Fund - ----------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 565,969 $ 356,972 $ 93,202 Dividend (1) 3,715,911 1,679,358 198,031 - ----------------------------------------------------------------------------------------------- Total investment income 4,281,880 2,036,330 291,233 EXPENSES Investment management fees 1,495,445 1,756,510 192,804 Administrative fees 448,636 263,477 57,841 Distribution fees: Standard shares 635,956 425,539 96,402 Administrative shares 4,233 12,001 -- Shareholder service fees: Standard shares 648,818 101,987 20,760 Institutional shares 629 110 -- Administrative shares 58 78 -- Transfer agent expenses: Standard shares 576,667 466,227 112,294 Institutional shares 2,013 410 -- Administrative shares 1,078 837 -- Accounting expenses 116,573 69,529 17,936 Custody expenses 11,839 6,171 2,798 Registration expenses 41,442 36,077 15,920 Trustee expenses 50,740 30,946 7,361 Other expenses 188,397 115,957 24,850 - ----------------------------------------------------------------------------------------------- Total expenses before reimbursements or waivers 4,222,524 3,285,856 548,966 Reimbursements or waivers from adviser -- -- -- - ----------------------------------------------------------------------------------------------- Net expenses 4,222,524 3,285,856 548,966 - ----------------------------------------------------------------------------------------------- NET INVESTMENT INCOME/LOSS $ 59,356 $ (1,249,526) $ (257,733) REALIZED AND UNREALIZED GAINS INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Realized gains on investments and foreign currency transactions $ 22,954,092 $ 18,114,469 $ 2,559,643 Change in unrealized appreciation on investments and foreign currencies 9,443,863 5,259,708 3,014,717 - ----------------------------------------------------------------------------------------------- Net realized and unrealized gains on investments and foreign currencies 32,397,955 23,374,177 5,574,360 CHANGE IN NET ASSETS FROM OPERATIONS $ 32,457,311 $ 22,124,651 $ 5,316,627 (1) Dividend income net of withholding taxes. For the year ended June 30, 2007, withholding taxes for the Global Equity Fund were $41,502. </Table> SEE FINANCIAL NOTES 66 YEAR ENDED JUNE 30, 2007 <Table> <Caption> Value Global Equity Balanced Income Money Market Fund Fund Fund Fund Fund - ----------------------------------------------------------------------- $ 135,051 $ 175,434 $ 207,286 $2,660,042 $4,582,276 693,784 1,566,225 107,478 -- -- - ----------------------------------------------------------------------- 828,835 1,741,659 314,764 2,660,042 4,582,276 348,141 815,282 74,314 317,267 301,397 74,602 122,292 17,150 73,216 129,171 107,488 199,620 28,582 122,025 -- -- 2,882 -- -- -- 21,420 47,972 7,351 25,639 42,935 29 46 -- -- 441 -- 42 -- -- -- 117,281 253,953 24,952 99,501 166,285 308 120 -- -- 1,419 -- 1,119 -- -- -- 21,810 50,931 16,953 28,483 36,777 3,149 9,471 5,940 4,075 10,780 30,385 34,699 15,195 16,135 33,082 10,151 13,377 2,113 7,869 15,159 35,516 59,542 8,542 29,555 54,443 - ----------------------------------------------------------------------- 770,280 1,611,348 201,092 723,765 791,889 (154,113) -- (52,439) -- -- - ----------------------------------------------------------------------- 616,167 1,611,348 148,653 723,765 791,889 - ----------------------------------------------------------------------- $ 212,668 $ 130,311 $ 166,111 $1,936,277 $3,790,387 $4,566,736 $ 8,768,100 $ 861,077 $ 66,811 $ 96 4,599,628 3,906,892 256,234 290,021 -- - ----------------------------------------------------------------------- 9,166,364 12,674,992 1,117,311 356,832 96 $9,379,032 $12,805,303 $1,283,422 $2,293,109 $3,790,483 </Table> SEE FINANCIAL NOTES 67 STATEMENTS OF CHANGES IN NET ASSETS <Table> <Caption> CORE GROWTH FUND EMERGING GROWTH FUND - ----------------------------------------------------------------------------------------------------------------- For the For the For the For the year ended year ended year ended year ended 06/30/07 06/30/06 06/30/07 06/30/06 - ----------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income/loss $ 59,356 $ (1,068,071) $ (1,249,526) $ (2,244,099) Realized gains/losses on investments and foreign currency transactions 22,954,092 46,437,932 18,114,469 16,391,277 Change in unrealized appreciation/depreciation on investments and foreign currencies 9,443,863 (32,840,999) 5,259,708 11,851,314 - ----------------------------------------------------------------------------------------------------------------- Change in net assets from operations 32,457,311 12,528,862 22,124,651 25,998,492 Dividends to Shareholders: From net investment income: Standard Shares -- -- -- -- Institutional Shares (267,821) -- -- -- Administrative Shares (3,435) -- -- -- From net realized gains on investments: Standard Shares -- -- -- -- - ----------------------------------------------------------------------------------------------------------------- Total dividends (271,256) -- -- -- Change in net assets from capital transactions (46,703,158) (21,131,884) (16,568,980) (15,191,378) CHANGE IN NET ASSETS $(14,517,103) $ (8,603,022) $ 5,555,671 $ 10,807,114 - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period $315,087,922 $323,690,944 $176,673,718 $165,866,604 End of period $300,570,819 $315,087,922 $182,229,389 $176,673,718 - ----------------------------------------------------------------------------------------------------------------- Accumulated (distributions in excess of) net investment income/loss $ -- $ -- $ -- $ -- - ----------------------------------------------------------------------------------------------------------------- CAPITAL TRANSACTIONS Standard Shares Proceeds from shares issued $ 11,987,796 $ 19,766,782 $ 17,850,867 $ 23,763,198 Dividends reinvested -- -- -- -- Cost of shares redeemed (58,212,483) (40,508,379) (32,484,880) (36,013,649) --------------------------------------------------- Net change (46,224,687) (20,741,597) (14,634,013) (12,250,451) --------------------------------------------------- Institutional Shares Proceeds from shares issued $ 22,907,918 $ 28,867,126 $ 110,287 $ 232,979 Dividends reinvested 260,617 -- -- -- Cost of shares redeemed (23,655,264) (29,194,052) (568,881) (2,151,187) --------------------------------------------------- Net change (486,729) (326,926) (458,594) (1,918,208) --------------------------------------------------- Administrative Shares Proceeds from shares issued $ 295,116 $ 531,600 $ 432,065 $ 854,234 Dividends reinvested 3,435 -- -- -- Cost of shares redeemed (290,293) (594,961) (1,908,438) (1,876,953) --------------------------------------------------- Net change 8,258 (63,361) (1,476,373) (1,022,719) --------------------------------------------------- CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS $(46,703,158) $(21,131,884) $(16,568,980) $(15,191,378) - ----------------------------------------------------------------------------------------------------------------- SHARE TRANSACTIONS Standard Shares Issued 570,483 933,592 1,041,779 1,485,237 Reinvested -- -- -- -- Redeemed (2,762,464) (1,923,535) (1,896,311) (2,282,753) --------------------------------------------------- Net change (2,191,981) (989,943) (854,532) (797,516) --------------------------------------------------- Institutional Shares Issued 1,265,704 1,646,381 6,012 13,737 Reinvested 14,850 -- -- -- Redeemed (1,335,466) (1,651,566) (32,123) (141,270) --------------------------------------------------- Net change (54,912) (5,185) (26,111) (127,533) --------------------------------------------------- Administrative Shares Issued 13,711 24,473 24,460 51,723 Reinvested 160 -- -- -- Redeemed (13,525) (28,026) (106,436) (116,060) --------------------------------------------------- Net change 346 (3,553) (81,976) (64,337) --------------------------------------------------- CHANGE IN SHARES FROM SHARE TRANSACTIONS (2,246,547) (998,681) (962,619) (989,386) - ----------------------------------------------------------------------------------------------------------------- * The Value Fund Institutional Class commenced operations on March 31, 2006. </Table> SEE FINANCIAL NOTES 68 <Table> <Caption> SMALL CAP CORE GROWTH FUND VALUE FUND - --------------------------------------------------------- For the For the For the For the year ended year ended year ended year ended 06/30/07 06/30/06 06/30/07 06/30/06 * - --------------------------------------------------------- $ (257,733) $ (283,687) $ 212,668 $ 54,391 2,559,643 3,401,326 4,566,736 1,120,508 3,014,717 938,778 4,599,628 1,764,193 - --------------------------------------------------------- 5,316,627 4,056,417 9,379,032 2,939,092 -- -- (156,486) -- -- -- (32,960) -- -- -- -- -- (1,113,792) -- -- -- - --------------------------------------------------------- (1,113,792) -- (189,446) -- (282,388) 3,794,453 16,463,300 7,787,498 $3,920,447 $7,850,870 $25,652,886 $10,726,590 - --------------------------------------------------------- - --------------------------------------------------------- $37,909,942 $30,059,072 $38,517,487 $27,790,897 $41,830,389 $37,909,942 $64,170,373 $38,517,487 - --------------------------------------------------------- $ -- $ -- $ 77,613 $ 54,391 - --------------------------------------------------------- $8,206,292 $10,643,513 $23,089,245 $13,809,233 1,065,027 -- 147,501 -- (9,553,707) (6,849,060) (7,879,983) (11,505,434) - --------------------------------------------------------- (282,388) 3,794,453 15,356,763 2,303,799 - --------------------------------------------------------- -- -- $1,073,577 $ 5,483,699 -- -- 32,960 -- -- -- -- -- - --------------------------------------------------------- -- -- 1,106,537 5,483,699 - --------------------------------------------------------- -- -- -- -- -- -- -- -- -- -- -- -- - --------------------------------------------------------- -- -- -- -- - --------------------------------------------------------- $ (282,388) $3,794,453 $16,463,300 $ 7,787,498 - --------------------------------------------------------- 659,884 873,576 1,635,323 1,115,039 86,799 -- 10,528 -- (760,894) (569,176) (561,158) (913,517) - --------------------------------------------------------- (14,211) 304,400 1,084,693 201,522 - --------------------------------------------------------- -- -- 77,788 427,368 -- -- 2,354 -- -- -- -- -- - --------------------------------------------------------- -- -- 80,142 427,368 - --------------------------------------------------------- -- -- -- -- -- -- -- -- -- -- -- -- - --------------------------------------------------------- -- -- -- -- - --------------------------------------------------------- (14,211) 304,400 1,164,835 628,890 - --------------------------------------------------------- </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 06/30/07 06/30/06 06/30/07 06/30/06 - ------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income/loss $ 130,311 $ (38,404) $ 166,111 $ 100,799 Realized gains/losses on investments and foreign currency transactions 8,768,100 3,754,241 861,077 215,779 Change in unrealized appreciation/depreciation on investments and foreign currencies 3,906,892 8,302,807 256,234 (140,549) - ------------------------------------------------------------------------------------------------------------------- Change in net assets from operations 12,805,303 12,018,644 1,283,422 176,029 Dividends to Shareholders: From net investment income: Standard Shares -- -- (165,712) (101,583) Institutional Shares -- -- -- -- From net realized gains on investments: Standard Shares -- -- (160,217) -- - ------------------------------------------------------------------------------------------------------------------- Total dividends -- -- (325,929) (101,583) Change in net assets from capital transactions (11,239,914) (15,299,387) (237,534) 5,514,670 CHANGE IN NET ASSETS $ 1,565,389 $ (3,280,743) $ 719,959 $ 5,589,116 - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- NET ASSETS Beginning of period $ 81,559,259 $ 84,840,002 $ 11,080,576 $ 5,491,460 End of period $ 83,124,648 $ 81,559,259 $ 11,800,535 $ 11,080,576 - ------------------------------------------------------------------------------------------------------------------- Accumulated (distributions in excess of) net investment income/loss $ (352,257) $ (4,618) $ (512) $ -- - ------------------------------------------------------------------------------------------------------------------- CAPITAL TRANSACTIONS Standard Shares Proceeds from shares issued $ 8,295,007 $ 7,340,857 $ 1,839,305 $ 7,086,693 Dividends reinvested -- -- 303,088 87,089 Cost of shares redeemed (18,526,500) (19,880,961) (2,379,927) (1,659,112) -------------------------------------------------- Net change (10,231,493) (12,540,104) (237,534) 5,514,670 -------------------------------------------------- Institutional Shares Proceeds from shares issued $ 10,408 $ 5,389 -- -- Dividends reinvested -- -- -- -- Cost of shares redeemed (410,482) (2,346,225) -- -- -------------------------------------------------- Net change (400,074) (2,340,836) -- -- -------------------------------------------------- Administrative Shares Proceeds from shares issued 188,720 267,371 -- -- Dividends reinvested -- -- -- -- Cost of shares redeemed (797,067) (685,818) -- -- -------------------------------------------------- Net change (608,347) (418,447) -- -- -------------------------------------------------- CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS $(11,239,914) $(15,299,387) $ (237,534) $ 5,514,670 - ------------------------------------------------------------------------------------------------------------------- SHARE TRANSACTIONS Standard Shares Issued 423,164 416,762 145,765 568,623 Reinvested -- -- 23,875 6,975 Redeemed (943,976) (1,148,666) (187,256) (133,278) -------------------------------------------------- Net change (520,812) (731,904) (17,616) 442,320 -------------------------------------------------- Institutional Shares Issued 494 116 -- -- Reinvested -- -- -- -- Redeemed (20,506) (137,975) -- -- -------------------------------------------------- Net change (20,012) (137,859) -- -- -------------------------------------------------- Administrative Shares Issued 9,461 14,995 -- -- Reinvested -- -- -- -- Redeemed (39,819) (37,945) -- -- -------------------------------------------------- Net change (30,358) (22,950) -- -- -------------------------------------------------- CHANGE IN SHARES FROM SHARE TRANSACTIONS (571,182) (892,713) (17,616) 442,320 - ------------------------------------------------------------------------------------------------------------------- </Table> SEE FINANCIAL NOTES 70 <Table> <Caption> INCOME FUND MONEY MARKET FUND - ----------------------------------------------------------- For the For the For the For the year ended year ended year ended year ended 06/30/07 06/30/06 06/30/07 06/30/06 - ----------------------------------------------------------- $ 1,936,277 $ 1,795,793 $3,790,387 $ 2,837,876 66,811 (1,579,679) 96 (62) 290,021 (1,158,558) -- -- - ----------------------------------------------------------- 2,293,109 (942,444) 3,790,483 2,837,814 (1,880,480) (1,825,925) (3,307,059) (2,416,825) -- -- (482,567) (420,062) -- -- -- -- - ----------------------------------------------------------- (1,880,480) (1,825,925) (3,789,626) (2,836,887) (3,967,851) (3,507,745) (1,629,502) (5,327,092) $ (3,555,222) $ (6,276,114) $(1,628,645) $(5,326,165) - ----------------------------------------------------------- - ----------------------------------------------------------- $ 50,320,674 $ 56,596,788 $84,160,689 $89,486,854 $ 46,765,452 $ 50,320,674 $82,532,044 $84,160,689 - ----------------------------------------------------------- $ 5,444 $ -- $ 1,750 $ 989 - ----------------------------------------------------------- $ 5,138,791 $ 6,731,817 $65,280,521 $62,680,511 1,711,712 1,653,835 3,201,732 2,342,559 (10,818,354) (11,893,397) (69,727,223) (67,488,052) - ----------------------------------------------------------- (3,967,851) (3,507,745) (1,244,970) (2,464,982) - ----------------------------------------------------------- -- -- $4,849,568 $ 3,178,033 -- -- 481,559 419,204 -- -- (5,715,659) (6,459,347) - ----------------------------------------------------------- -- -- (384,532) (2,862,110) - ----------------------------------------------------------- -- -- -- -- -- -- -- -- -- -- -- -- - ----------------------------------------------------------- -- -- -- -- - ----------------------------------------------------------- $ (3,967,851) $ (3,507,745) $(1,629,502) $(5,327,092) - ----------------------------------------------------------- 529,874 687,649 65,280,521 62,680,511 176,434 169,782 3,201,732 2,342,559 (1,112,958) (1,222,490) (69,727,223) (67,488,052) - ----------------------------------------------------------- (406,650) (365,059) (1,244,970) (2,464,982) - ----------------------------------------------------------- -- -- 4,849,568 3,178,033 -- -- 481,559 419,204 -- -- (5,715,659) (6,459,347) - ----------------------------------------------------------- -- -- (384,532) (2,862,110) - ----------------------------------------------------------- -- -- -- -- -- -- -- -- -- -- -- -- - ----------------------------------------------------------- -- -- -- -- - ----------------------------------------------------------- (406,650) (365,059) (1,629,502) (5,327,092) - ----------------------------------------------------------- </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 gains/losses investment investment of period income/loss on investments operations income - --------------------------------------------------------------------------------------------------------- CORE GROWTH FUND STANDARD SHARES - --------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $20.41 (0.02) 2.38 2.36 -- Year ended June 30, 2006 19.72 (0.09) 0.78 0.69 -- 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) -- INSTITUTIONAL SHARES - --------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $17.15 0.12 2.00 2.12 (0.12) Year ended June 30, 2006 16.45 0.06 0.64 0.70 -- 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) -- ADMINISTRATIVE SHARES - --------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $20.96 0.06 2.46 2.52 (0.04) Year ended June 30, 2006 20.17 --(1) 0.79 0.79 -- 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) -- - --------------------------------------------------------------------------------------------------------- EMERGING GROWTH FUND STANDARD SHARES - --------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $16.40 (0.12)(2) 2.30 2.18 -- Year ended June 30, 2006 14.10 (0.20)(2) 2.50 2.30 -- Year ended June 30, 2005 13.01 (0.18)(2) 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) -- INSTITUTIONAL SHARES - --------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $17.11 (0.05)(2) 2.42 2.37 -- Year ended June 30, 2006 14.62 (0.12)(2) 2.61 2.49 -- Year ended June 30, 2005 13.41 (0.10)(2) 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) -- ADMINISTRATIVE SHARES - --------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $16.77 (0.07)(2) 2.36 2.29 -- Year ended June 30, 2006 14.37 (0.16)(2) 2.56 2.40 -- Year ended June 30, 2005 13.22 (0.14)(2) 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) -- - --------------------------------------------------------------------------------------------------------- (1) Less than $0.005 per share. (2) Based on average shares outstanding. </Table> SEE FINANCIAL NOTES 72 <Table> <Caption> TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------------------- Net Ratio of Ratio of net From Net asset assets, expenses to investment net Total value, Total end of average net income/loss realized dividends to Redemption end return period assets, net of to average net gains shareholders fee of period (%) ($ X 1,000) reimbursement (%) assets (%) - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- -- -- -- $22.77 11.56 $249,707 1.52 (0.08) -- -- -- 20.41 3.50 268,593 1.52 (0.43) -- -- -- 19.72 8.95 278,940 1.55 (0.32) -- -- -- 18.10 10.10 290,352 1.50 (0.65) -- -- -- 16.44 (1.73) 285,339 1.37 (0.28) - ----------------------------------------------------------------------------------------------------------------- -- (0.12) -- $19.15 12.39 $ 49,001 0.79 0.62 -- -- -- 17.15 4.26 44,836 0.80 0.30 -- -- -- 16.45 9.74 43,083 0.80 0.42 -- -- -- 14.99 10.96 52,842 0.77 0.08 -- -- -- 13.52 (1.02) 63,571 0.69 0.36 - ----------------------------------------------------------------------------------------------------------------- -- (0.04) -- $23.44 12.06 $ 1,863 1.10 0.32 -- -- -- 20.96 3.92 1,659 1.12 (0.02) -- -- -- 20.17 9.38 1,667 1.14 0.09 -- -- -- 18.44 10.55 1,635 1.11 (0.27) -- -- -- 16.68 (1.36) 2,426 1.00 0.09 - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- -- -- -- $18.58 13.29 $177,514 1.88 (0.72) -- -- -- 16.40 16.31 170,704 1.90 (1.30) -- -- -- 14.10 8.38 157,963 1.96 (1.39) -- -- -- 13.01 18.70 165,782 1.93 (1.47) -- -- -- 10.96 (7.28) 157,911 1.95 (1.56) - ----------------------------------------------------------------------------------------------------------------- -- -- -- $19.48 13.85 $ 515 1.38 (0.29) -- -- -- 17.11 17.03 899 1.35 (0.77) -- -- -- 14.62 9.02 2,633 1.33 (0.76) -- -- -- 13.41 19.41 3,534 1.30 (0.85) -- -- -- 11.23 (6.57) 5,379 1.25 (0.86) - ----------------------------------------------------------------------------------------------------------------- -- -- -- $19.06 13.66 $ 4,200 1.57 (0.39) -- -- -- 16.77 16.70 5,071 1.60 (1.00) -- -- -- 14.37 8.70 5,270 1.64 (1.08) -- -- -- 13.22 18.99 11,584 1.60 (1.13) -- -- -- 11.11 (6.80) 8,561 1.51 (1.13) - ----------------------------------------------------------------------------------------------------------------- <Caption> RATIOS AND SUPPLEMENTAL DATA - ---------------------------------- Ratio of expenses to average net Portfolio assets, prior to turnover reimbursement (%) rate (%) - ---------------------------------- 1.52 153.08 1.52 101.35 1.55 101.34 1.52 228.43 1.53 183.75 - ---------------------------------- 0.79 153.08 0.80 101.35 0.80 101.34 0.79 228.43 0.76 183.75 - ---------------------------------- 1.10 153.08 1.12 101.35 1.14 101.34 1.13 228.43 1.06 183.75 - ---------------------------------- - ---------------------------------- 1.88 47.54 1.90 60.19 1.96 109.56 1.94 151.80 1.97 315.89 - ---------------------------------- 1.38 47.54 1.35 60.19 1.33 109.56 1.31 151.80 1.28 315.89 - ---------------------------------- 1.57 47.54 1.60 60.19 1.64 109.56 1.62 151.80 1.54 315.89 - ---------------------------------- </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 Total from From net beginning investment on investments investment investment of period income/loss and foreign currencies operations income - ----------------------------------------------------------------------------------------------------------------- SMALL CAP CORE GROWTH FUND STANDARD SHARES - ----------------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $12.48 (0.09) 1.82 1.73 -- Year ended June 30, 2006 11.00 (0.09) 1.57 1.48 -- 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) -- - ----------------------------------------------------------------------------------------------------------------- VALUE FUND STANDARD SHARES - ----------------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $12.74 0.04 2.58 2.62 (0.05) Year ended June 30, 2006 11.60 0.02 1.12 1.14 -- 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) -- INSTITUTIONAL SHARES - ----------------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $12.72 0.10 2.59 2.69 (0.07) For the period ended June 30, 2006(2) 12.81 0.02 (0.11) (0.09) -- - ----------------------------------------------------------------------------------------------------------------- GLOBAL EQUITY FUND STANDARD SHARES - ----------------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $18.33 0.03(1) 3.07 3.10 -- Year ended June 30, 2006 15.86 (0.01)(1) 2.48 2.47 -- Year ended June 30, 2005 15.18 0.02(1) 0.66 0.68 -- Year ended June 30, 2004 13.39 (0.10)(1) 1.89 1.79 -- Year ended June 30, 2003 14.22 (0.03)(1) (0.82) (0.85) -- INSTITUTIONAL SHARES - ----------------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $19.05 0.13(1) 3.24 3.37 -- Year ended June 30, 2006 16.39 0.07(1) 2.59 2.66 -- Year ended June 30, 2005 15.58 0.12(1) 0.69 0.81 -- Year ended June 30, 2004 13.65 0.04(1) 1.89 1.93 -- Year ended June 30, 2003 14.40 0.05(1) (0.82) (0.77) -- ADMINISTRATIVE SHARES - ----------------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $18.66 0.06(1) 3.16 3.22 -- Year ended June 30, 2006 16.11 0.04(1) 2.51 2.55 -- Year ended June 30, 2005 15.36 0.06(1) 0.69 0.75 -- Year ended June 30, 2004 13.51 (0.02)(1) 1.87 1.85 -- Year ended June 30, 2003 14.30 0.01(1) (0.82) (0.81) -- - ----------------------------------------------------------------------------------------------------------------- (1) Based on average shares outstanding. (2) For the period March 31, 2006, commencement of operations, to June 30,2006. (3) Not Annualized. (4) Annualized. (5) Less than $0.005 per share. </Table> SEE FINANCIAL NOTES 74 <Table> <Caption> TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------------------- Net Ratio of Ratio of net From Net asset assets, expenses to investment net Total value, Total end of average net income/loss realized dividends to Redemption end return period assets, net of to average net gains shareholders fee (1) of period (%) ($ X 1,000) reimbursement (%) assets (%) - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- (0.37) (0.37) -- $13.84 14.22 $ 41,830 1.42 (0.67) -- -- -- 12.48 13.45 37,910 1.44 (0.83) (0.50) (0.50) -- 11.00 6.21 30,059 1.51 (1.07) -- -- -- 10.84 25.03 29,701 1.53 (1.37) -- -- -- 8.67 (5.56) 17,821 1.45 (1.12) - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- -- (0.05) -- $15.31 20.63 $ 56,385 1.29 0.37 -- -- -- 12.74 9.83 33,081 1.29 0.15 -- -- -- 11.60 10.37 27,791 1.70 (0.11) -- -- -- 10.51 21.64 23,871 1.78 (0.23) -- -- -- 8.64 (1.14) 16,226 1.90 (0.62) - ----------------------------------------------------------------------------------------------------------------- -- (0.07) -- $15.34 21.16 $ 7,785 0.90 0.78 -- -- -- 12.72 (0.70)(3) 5,436 0.90(4) 0.64(4) - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- -- -- --(5) $21.43 16.91 $ 81,750 1.98 0.15 -- -- --(5) 18.33 15.57 79,441 2.01 (0.06) -- -- --(5) 15.86 4.48 80,384 2.05 0.13 -- -- --(5) 15.18 13.37 95,625 2.01 (0.60) -- -- 0.02 13.39 (5.84) 101,846 1.91 (0.26) - ----------------------------------------------------------------------------------------------------------------- -- -- --(5) $22.42 17.69 $ 414 1.39 0.65 -- -- --(5) 19.05 16.23 733 1.40 0.38 -- -- --(5) 16.39 5.20 2,891 1.39 0.75 -- -- --(5) 15.58 14.14 5,244 1.37 0.25 -- -- 0.02 13.65 (5.21) 6,688 1.26 0.42 - ----------------------------------------------------------------------------------------------------------------- -- -- --(5) $21.88 17.26 $ 961 1.71 0.28 -- -- --(5) 18.66 15.83 1,385 1.73 0.20 -- -- --(5) 16.11 4.88 1,566 1.73 0.40 -- -- --(5) 15.36 13.69 2,142 1.71 (0.11) -- -- 0.02 13.51 (5.52) 2,059 1.59 0.11 - ----------------------------------------------------------------------------------------------------------------- <Caption> RATIOS AND SUPPLEMENTAL DATA - ---------------------------------- Ratio of expenses to average net Portfolio assets, prior to turnover reimbursement (%) rate (%) - ---------------------------------- - ---------------------------------- 1.42 53.78 1.44 96.80 1.51 120.89 1.53 207.80 1.58 349.79 - ---------------------------------- - ---------------------------------- 1.61 40.28 1.62 58.32 1.70 172.95 1.78 130.18 1.90 209.72 - ---------------------------------- 1.14 40.28 1.26(4) 58.32(3) - ---------------------------------- - ---------------------------------- 1.98 58.74 2.01 36.77 2.05 80.36 2.01 49.16 1.91 42.05 - ---------------------------------- 1.39 58.74 1.40 36.77 1.39 80.36 1.37 49.16 1.26 42.05 - ---------------------------------- 1.71 58.74 1.73 36.77 1.73 80.36 1.71 49.16 1.59 42.05 - ---------------------------------- </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 gains/losses investment investment of period income/loss on investments operations income - --------------------------------------------------------------------------------------------------------- BALANCED FUND STANDARD SHARES - --------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $12.24 0.19 1.24 1.43 (0.19) Year ended June 30, 2006 11.87 0.13 0.37 0.50 (0.13) 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, 2007 $ 9.51 0.39 0.05 0.44 (0.38) Year ended June 30, 2006 10.00 0.32 (0.48) (0.16) (0.33) 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) - --------------------------------------------------------------------------------------------------------- MONEY MARKET FUND STANDARD SHARES - --------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $ 1.00 0.04 -- 0.04 (0.04) Year ended June 30, 2006 1.00 0.03 -- 0.03 (0.03) 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) INSTITUTIONAL SHARES - --------------------------------------------------------------------------------------------------------- Year ended June 30, 2007 $ 1.00 0.05 -- 0.05 (0.05) Year ended June 30, 2006 1.00 0.04 -- 0.04 (0.04) 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) - --------------------------------------------------------------------------------------------------------- (1) For the period December 20, 2002, commencement of operations, to June 30, 2003. (2) Not Annualized. (3) Annualized. (4) Less than $0.005 per share. </Table> SEE FINANCIAL NOTES 76 <Table> <Caption> TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------------------- Net Ratio of Ratio of net From Net asset assets, expenses to investment net Total value, Total end of average net income/loss realized dividends to Redemption end return period assets, net of to average net gains shareholders fee of period (%) ($ X 1,000) reimbursement (%) assets (%) - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- (0.18) (0.37) -- $13.30 11.81 $ 11,801 1.30 1.45 -- (0.13) -- 12.24 4.17 11,081 1.30 1.10 (0.23) (0.35) -- 11.87 7.76 5,491 1.30 1.07 (0.24) (0.30) -- 11.35 11.31 2,804 1.30 0.60 -- (0.02) -- 10.47 4.87(2) 1,061 1.30(3) 0.41(3) - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- -- (0.38) -- $ 9.57 4.60 $ 46,765 1.48 3.97 -- (0.33) -- 9.51 (1.66) 50,321 1.49 3.28 -- (0.38) -- 10.00 5.34 56,597 1.48 3.66 -- (0.36) -- 9.86 (0.63) 59,562 1.45 3.28 -- (0.40) -- 10.28 11.28 69,137 1.37 3.80 - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- -- (0.04) -- $ 1.00 4.45 $ 73,016 0.95 4.37 -- (0.03) -- 1.00 3.27 74,260 0.98 3.22 -- (0.01) -- 1.00 1.21 76,724 1.00 1.19 -- --(4) -- 1.00 0.10 83,231 0.98 0.10 -- (0.01) -- 1.00 0.65 104,641 0.93 0.65 - ----------------------------------------------------------------------------------------------------------------- -- (0.05) -- $ 1.00 4.72 $ 9,516 0.69 4.63 -- (0.04) -- 1.00 3.57 9,901 0.69 3.48 -- (0.02) -- 1.00 1.53 12,763 0.68 1.55 -- --(4) -- 1.00 0.41 11,011 0.67 0.41 -- (0.01) -- 1.00 0.95 10,892 0.63 0.98 - ----------------------------------------------------------------------------------------------------------------- <Caption> TO RATIOS AND SUPPLEMENTAL DATA - ---------------------------------- Ratio of expenses to average net Portfolio assets, prior to turnover reimbursement (%) rate (%) - ---------------------------------- - ---------------------------------- 1.76 99.86 1.80 89.13 2.33 109.56 4.30 98.20 16.73(3) 140.42(2) - ---------------------------------- - ---------------------------------- 1.48 225.80 1.49 490.92 1.48 111.76 1.45 64.37 1.37 195.73 - ---------------------------------- - ---------------------------------- 0.95 N/A 0.98 N/A 1.00 N/A 0.98 N/A 0.93 N/A - ---------------------------------- 0.69 N/A 0.69 N/A 0.68 N/A 0.67 N/A 0.63 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"): FUND SHORT NAME - ---- -------------------------- 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 Money Market Fund Money Market Fund 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 and Value Fund offer two classes of shares: Standard shares and Institutional shares. The Small Cap Core Growth Fund, Balanced Fund, and Income 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. 78 SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the funds in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. SECURITIES VALUATION 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 uses 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 NAV 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. 79 FINANCIAL NOTES SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME During the period, security transactions were accounted for no later than one business day following the trade date. For financial reporting purposes, however, security transactions are accounted for on trade date. The cost of securities sold is determined on the identified cost basis, unless otherwise specified. Interest income is recorded on an accrual basis and includes, where applicable, the amortization or accretion of a premium or discount. Dividend income is recorded on the ex-dividend date. FOREIGN CURRENCY TRANSLATION The accounting records of the funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current rate of exchange. Purchases and sales of securities, and income and expenses, are translated into U.S. dollars at the prevailing rate of exchange on the respective dates of such transactions. The changes in foreign exchange rates on investments are not isolated on the Statement of Operations. Such fluctuations are included with the net realized and unrealized gain or loss on investments. FOREIGN CURRENCY CONTRACTS Foreign currency contracts are used to facilitate transactions in foreign-denominated securities. Losses may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contract's terms. The U.S. dollar value of foreign currency contracts is determined using the current rate of exchange. There were no foreign currency contracts open at June 30, 2007. REPURCHASE AGREEMENTS The funds may acquire repurchase agreements with an entity that is a member bank of the Federal Reserve System and government securities dealers that are on the Federal Reserve Bank of New York's list of primary dealers, 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 80 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. 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 years ended June 30, 2007 and June 30, 2006, the Global Equity Fund collected $1,940 and $4,572 respectively, 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 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 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. 81 FINANCIAL NOTES FEDERAL INCOME TAX Each fund is a separate taxable entity for federal tax purposes. Each fund has qualified and intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and distributes substantially all of its taxable net investment income and net realized gains, if any, to its shareholders. FEES AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT MANAGEMENT FEE Citizens Advisers, Inc. (the "adviser") serves as adviser to each of the funds. Under the terms of the management contract, the adviser is paid a fee that is computed daily based on an annual rate for each fund's average daily net assets. Those rates are as follows: FUND FEE RATE - ---- -------- 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% Money Market Fund 0.35% Dwight Asset Management Company serves as the subadviser for the Income Fund. For its services, the subadviser receives a fee computed daily based on an annual rate of 0.25% of the fund's average daily net assets. The fee is paid by the adviser. 82 DISTRIBUTION FEE Citizens Securities, Inc. (the "distributor") is a wholly owned subsidiary of the adviser and serves as the funds' distributor. Pursuant to Rule 12b-1 under the 1940 Act, the trust's shareholders have adopted a separate distribution plan with respect to the funds' Standard and Administrative shares pursuant to which the funds, except the Money Market Fund, compensate the distributor for services in an amount equal to 0.25% per annum of average annual net assets represented by such shares. ADMINISTRATIVE AND SHAREHOLDER SERVICE FEES The adviser, with whom certain officers and 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, 2007, a fee of 0.25% was charged. TRANSFER AGENCY, FUND ACCOUNTING AND CUSTODY BISYS Fund Services Ohio, Inc. provides transfer agency and fund accounting services to the funds pursuant to certain fee arrangements. As transfer agent for the funds, BISYS is paid a fee based on the number of funds and shareholder accounts, other service 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 a 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. There were no custody credits received for the period ended June 30, 2007. 83 FINANCIAL NOTES SUBSEQUENT EVENTS On May 2, 2007, BISYS Group, Inc., the parent of BISYS Fund Services Ohio, Inc. (BISYS Fund Services) announced that it had entered into a definitive agreement to be acquired by Citi. The transaction closed effective August 1, 2007, at which time BISYS Fund Services changed its name to Citi Fund Services Ohio, Inc. 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 all funds within the trust in relation to the net assets of each fund or on another reasonable basis. Expenses specific to a class of shares are charged to that class. FEE REDUCTIONS AND REIMBURSEMENTS For the period ended June 30, 2007, 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: FUND EXPENSE LIMITATION - ---- ------------------ Value Fund - Standard shares 1.29% Value Fund - Institutional shares 0.90% Balanced Fund - Standard shares 1.30% Expense limitations for the Value Fund Standard shares and Institutional shares listed above are contractual. The adviser may recoup the investment management fees waived or limited and other expenses reimbursed by it within three years from the fiscal year in which they were waived/reimbursed. Such repayments may be made twice monthly, but in no event less frequently than semi-annually, but only to the extent that such repayments would not cause annualized operating expenses of the Value Fund to exceed any expense 84 limitation. As of June 30, 2007, the amount that may potentially be recouped by the adviser from the Value Fund is $44,181 expiring on June 30, 2009 and $154,113 expiring on June 30, 2010. The Balanced Fund expense limitation listed above is voluntary, may be removed by the adviser at any time and is not subject to recoupment in subsequent fiscal periods. 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, 2007: FUND PURCHASES SALES - ---- ------------ ------------ Core Growth Fund $442,301,039 $481,344,072 Emerging Growth Fund 80,161,051 93,167,766 Small Cap Core Growth Fund 19,790,474 21,628,694 Value Fund 38,305,279 19,239,334 Global Equity Fund 45,785,023 54,947,983 Balanced Fund 11,123,678 11,011,385 Income Fund 40,480,753 44,054,205 The following summarizes purchases and sales of U.S. Government securities by fund for the period ended June 30, 2007: FUND PURCHASES SALES - ---- ----------- ----------- Balanced Fund $ 98,859 $ -- Income Fund 64,391,868 66,820,044 85 FINANCIAL NOTES FEDERAL INCOME TAX INFORMATION At June 30, 2007 the cost, gross unrealized appreciation and gross unrealized depreciation on securities, for federal income tax purposes, were as follows: NET UNREALIZED TAX UNREALIZED TAX UNREALIZED APPRECIATION/ FUND TAX COST APPRECIATION DEPRECIATION DEPRECIATION - ---- ------------ -------------- -------------- -------------- Core Growth Fund $272,686,865 $37,250,063 $(5,436,780) $31,813,283 Emerging Growth Fund 133,744,359 50,556,803 (2,737,073) 47,819,730 Small Cap Core Growth Fund 31,981,171 10,226,402 (732,891) 9,493,511 Value Fund 55,920,046 10,533,337 (563,429) 9,969,908 Global Equity Fund 65,920,501 19,096,201 (519,167) 18,577,034 Balanced Fund 11,315,518 757,001 (212,745) 544,256 Income Fund 49,645,909 69,583 (647,308) (577,725) Money Market Fund 80,737,545 -- -- -- The tax character of dividends paid by the funds during the past two fiscal years were as follows: DIVIDENDS PAID FROM ----------------------- NET LONG TAX TERM TOTAL RETURN TOTAL ORDINARY CAPITAL TAXABLE OF DIVIDENDS INCOME GAINS DIVIDENDS CAPITAL PAID(1) ---------- ---------- ---------- ------- ---------- FISCAL YEAR ENDED 2007 Core Growth Fund $ 271,256 $ -- $ 271,256 $-- $ 271,256 Small Cap Core Growth Fund -- 1,113,792 1,113,792 -- 1,113,792 Value Fund 189,446 -- 189,446 -- 189,446 Balanced Fund 165,641 160,217 325,858 -- 325,858 Income Fund 1,890,990 -- 1,890,990 -- 1,890,990 Money Market Fund 3,782,046 -- 3,782,046 -- 3,782,046 FISCAL YEAR ENDED 2006 Balanced Fund $ 80,205 $ -- $ 80,205 $-- $ 80,205 Income Fund 1,841,782 -- 1,841,782 -- 1,841,782 Money Market Fund 2,696,630 -- 2,696,630 -- 2,696,630 86 As of June 30, 2007, the components of accumulated earnings/(deficit) on a tax basis for the funds were as follows: UNREALIZED TOTAL UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED APPRECIATION/ ACCUMULATED ORDINARY LONG-TERM ACCUMULATED DIVIDENDS CAPITAL & DEPRECIATION EARNINGS/ INCOME CAPITAL GAINS EARNINGS PAYABLE(1) OTHER LOSSES (2) DEFICIT ------------- ------------- ----------- ---------- ------------- ------------- ------------- Core Growth Fund $ -- $ -- $ -- $ -- $ (3,961,031) $31,813,283 $ 27,852,252 Emerging Growth Fund -- -- -- -- (155,779,562) 47,819,730 (107,959,832) Small Cap Core Growth Fund 323,849 1,304,002 1,627,851 -- -- 9,493,511 11,121,362 Value Fund 69,244 -- 69,244 -- (2,146,633) 9,969,908 7,892,519 Global Equity Fund 43,196 -- 43,196 -- (112,523,485) 18,577,418 (93,902,871) Balanced Fund 588,701 282,961 871,662 (34,131) -- 544,256 1,381,787 Income Fund 152,601 -- 152,601 (147,158) (6,608,101) (577,725) (7,180,383) Money Market Fund 307,773 -- 307,773 (306,023) (38,500) -- (36,750) (1) Total dividends payable and paid may differ from the amount reported in the Statements of Assets and Liabilities and Statement of Changes in Net Assets because for tax purposes dividends are recognized when actually paid. (2) The differences between book-basis and tax-basis unrealized appreciation/depreciation are attributable primarily to the tax deferral of losses on wash sales. As of June 30, 2007, the funds had the following net capital loss carryforwards, which are available to offset future realized gains: AMOUNT EXPIRES AMOUNT EXPIRES AMOUNT EXPIRES AMOUNT EXPIRES ------------ ------- ----------- ------- ----------- ------- -------- ------- Core Growth Fund $ -- -- $ 3,961,031 2011 $ -- -- $ -- -- Emerging Growth Fund 116,147,198 2010 36,170,306 2011 3,462,058 2013 -- -- Value Fund -- -- -- -- 2,146,633 2012 -- -- Global Equity Fund(1) 88,646,020 2010 9,283,310 2011 14,198,702 2012 -- -- Income Fund 638,367 2010 4,606,423 2011 438,112 2014 900,616 2015 Money Market Fund 9,049 2009 -- -- 29,451 2014 -- -- (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: $24,611 expiring in 2010, $345,833 expiring in 2011. Net capital losses incurred after October 31, 2006, 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, 2007, the Global Equity Fund deferred to July 1, 2007 post October currency losses of $395,453, and the Income Fund deferred to July 1, 2007 post October capital losses of $24,583. 87 FINANCIAL NOTES NEW ACCOUNTING PRONOUNCEMENTS In September 2006 the Financial Accounting Standards Board (FASB) issued Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current GAAP from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and expanded disclosures about fair value measurements. As of June 30, 2007, the funds do not believe the adoption of SFAS No. 157 will significantly impact the financial statement amounts, however; additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period. In July 2006, FASB issued FASB Interpretation No. 48 - "Accounting for Uncertainty in Income Taxes," which requires for all entities, including pass-through entities such as the funds, a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether an entity is taxable in a particular jurisdiction), and requires certain expanded tax disclosures. The Interpretation is required no later than the last business day of the first financial statement reporting for fiscal years beginning after December 15, 2006. Management is currently evaluating the impact of this interpretation to the funds. 88 SUPPLEMENTAL INFORMATION (UNAUDITED) FEDERAL TAX INFORMATION For the fiscal year ended June 30, 2007, $59,356, $189,446 and $36,993 of dividends paid by the Core Growth Fund, Value Fund and Balanced Fund, respectively, 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 2007 Form 1099-DIV. For the tax year ended June 30, 2007, 100%, 100% and 22.23% of income dividends paid by the Core Growth Fund, Value Fund and Balanced Fund, respectively, qualify for the dividends received deduction available to corporations. PORTFOLIO HOLDINGS DISCLOSURE Each fund, except the Money Market Fund, posts its full portfolio holdings monthly, with a 30-day lag, on www.citizensfunds.com. The portfolio holdings are 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 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 remain available until the following quarter's information is posted. Details of the funds' portfolio holdings disclosure policies and procedures, including 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' end on Form N-Q. You can receive a copy of the fund's Form N-Q without charge by calling 800.223.7010 or by visiting the website at www.citizensfunds.com. Each funds' Form N-Q is also available through a variety of methods. You can: - - find it on the EDGAR Database of the SEC internet site at www.sec.gov - - have copies sent to you (after paying a copying fee) by writing the SEC's Public Reference Section, Washington, D.C. 20549-0102, or by electronic request to publicinfo@sec.gov - - view and copy it in person at the SEC's Public Reference Room in Washington D.C.; for more information call 202.942.8090. 89 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, 2007 through June 30, 2007. 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. 90 JUNE 30, 2007 EXPENSES ANNUALIZED BEGINNING ENDING PAID DURING EXPENSE RATIO ACCOUNT ACCOUNT PERIOD (1) DURING THE PERIOD VALUE VALUE 01/01/07 -- 01/01/07 -- 01/01/07 06/30/07 06/30/07 06/30/07 --------- --------- ----------- ----------------- CORE GROWTH FUND Standard -- actual $1,000.00 $1,091.60 $ 7.73 1.49% Standard -- hypothetical 1,000.00 1,017.41 7.45 1.49% Institutional -- actual 1,000.00 1,095.50 4.00 0.77% Institutional -- hypothetical 1,000.00 1,020.98 3.86 0.77% Administrative -- actual 1,000.00 1,093.80 5.61 1.08% Administrative -- hypothetical 1,000.00 1,019.44 5.41 1.08% EMERGING GROWTH FUND Standard -- actual $1,000.00 $1,111.90 $ 9.74 1.86% Standard -- hypothetical 1,000.00 1,015.57 9.30 1.86% Institutional -- actual 1,000.00 1,114.40 7.29 1.39% Institutional -- hypothetical 1,000.00 1,017.90 6.95 1.39% Administrative -- actual 1,000.00 1,114.00 8.07 1.54% Administrative -- hypothetical 1,000.00 1,017.16 7.70 1.54% SMALL CAP CORE GROWTH FUND Standard -- actual $1,000.00 $1,123.40 $ 7.53 1.43% Standard -- hypothetical 1,000.00 1,017.70 7.15 1.43% VALUE FUND Standard -- actual $1,000.00 $1,093.60 $ 6.70 1.29% Standard -- hypothetical 1,000.00 1,018.40 6.46 1.29% Institutional -- actual 1,000.00 1,095.70 4.68 0.90% Institutional -- hypothetical 1,000.00 1,020.33 4.51 0.90% GLOBAL EQUITY FUND Standard -- actual $1,000.00 $1,084.00 $10.08 1.95% Standard -- hypothetical 1,000.00 1,015.12 9.74 1.95% Institutional -- actual 1,000.00 1,087.80 6.99 1.35% Institutional -- hypothetical 1,000.00 1,018.10 6.76 1.35% Administrative -- actual 1,000.00 1,085.30 8.53 1.65% Administrative -- hypothetical 1,000.00 1,016.61 8.25 1.65% BALANCED FUND Standard -- actual $1,000.00 $1,063.50 $ 6.65 1.30% Standard -- hypothetical 1,000.00 1,018.35 6.51 1.30% INCOME FUND Standard -- actual $1,000.00 $1,002.80 $ 7.20 1.45% Standard -- hypothetical 1,000.00 1,017.60 7.25 1.45% MONEY MARKET FUND Standard -- actual $1,000.00 $1,021.90 $ 4.61 0.92% Standard -- hypothetical 1,000.00 1,020.23 4.61 0.92% Institutional -- actual 1,000.00 1,023.10 3.46 0.69% Institutional -- hypothetical 1,000.00 1,021.37 3.46 0.69% (1) Expenses equal the average account value times the fund's annualized expense ratio multiplied by 181/365 (to reflect the one-half year period). 91 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 30, 2007. 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 independent legal 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 agreements 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 funds; (ix) information about fees charged by the adviser to other clients with similar investment objectives; (x) the 92 professional experience and qualifications of each fund's portfolio management team; and (xi) the terms of the management agreement. The adviser has informed the board that it is considering a sale of its investment advisory business. At the meeting, the board received a progress report from the adviser on the status of the possible sale. In its consideration of the selection of the adviser, the board took into account the possible sale and the potential impact of a possible sale on portfolio management, shareholder services, retention of personnel of the adviser, and the funds' fees and expenses. The trustees noted that any sale of the adviser's business would result in the termination of the funds' existing management agreements and that new management agreements that would take effect upon such a sale would be subject to board and shareholder approval. 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 and record, 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 allocation of additional portfolio management personnel to certain funds. 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 Income 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 Income 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 93 SUPPLEMENTAL INFORMATION (UNAUDITED) BOARD APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT (CONT.) 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 it 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. 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 trustees reviewed 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, 2007 (or those relevant periods in which the applicable fund existed) and each fund's Lipper ranking among like funds. The comparative information showed that: the Core Growth Fund underperformed the applicable indices for the one-, three-, five- and ten-year periods; the Emerging Growth Fund underperformed the applicable 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 applicable index for the one-, three- and five-year periods, but outperformed the index for the since inception period; the Value Fund outperformed the applicable index for the one- and three-year periods, but underperformed the index for the five- and ten-year periods; the Global Equity Fund underperformed 94 the applicable index for the one-, three-, five- and ten-year periods; the Balanced Fund underperformed the blended index for the one- and three-year periods; the Income Fund underperformed the applicable index for the one-, three-, five- and ten-year periods; and the Money Market Fund's seven and thirty day yields were slightly lower than the average seven and thirty day yields of a comparable universe of funds. The trustees considered the recent changes made by the adviser in the portfolio management teams of the Core Growth and Balanced Funds and the enhancement of the investment process of each fund. They noted the improved performance of each fund since the changes had been implemented in that each of these funds outperformed their respective indices for the three-month period ended March 31, 2007. The trustees considered the Value Fund's strong one- and three-year performance, and noted that the fund had been subadvised for a portion of the five- and ten-year periods. With respect to the Global Equity Fund, the trustees considered the adviser's one-year tenure as the in-house portfolio manager of the fund and noted an improvement in the fund's Lipper ranking. With respect to the Income Fund, the trustees considered the adviser's engagement of a subadviser, Dwight Asset Management Company, to manage the fund. 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. The board also reviewed the funds' fees and expense ratios versus a universe made up of funds with the same Lipper investment classification and objective (Lipper universe), a smaller group of comparable funds selected by Lipper (Lipper peer group), and certain comparable SRI 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. It was noted that the adviser was not managing any accounts with similar investment objectives to the funds. 95 SUPPLEMENTAL INFORMATION (UNAUDITED) BOARD APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT (CONT.) The Lipper comparative information showed that: the Core Growth Fund's management fee, administration fee, total management and administration fees and total expenses were equal to or below the Lipper universe and peer group medians (except that total expenses for Standard Class shares were above the median). The trustees noted that the Emerging Growth Fund's administration fee was equal to the Lipper universe and peer group median, while the fund's management fee, total management and administration fees and total expenses were higher than the medians. They further noted that the Emerging Growth Fund's fees and expense ratio were reasonable in light of the nature, extent and quality of the services the fund receives and the other factors considered. The trustees noted that the Small Cap Core Growth Fund's management fee, administration fee, total management and administration fees and total expenses were equal to or below the Lipper universe and peer group medians. The trustees noted that the Value Fund's administration fee, total management and administration fees and total expenses were equal to or below the Lipper universe and peer group medians, while the fund's management fee was slightly higher than the medians (except that the total management and administration fees were higher than the Lipper universe median). The trustees further noted that the fund's total expenses had been reduced as a result of the adviser's contractual agreement to limit the fees and expenses of the fund. The trustees noted that the Global Equity Fund's management fee, administration fee, total management and administration fees and total expenses were higher than the Lipper universe and peer group medians. The trustees concluded that the fund's fees and expense ratio were reasonable in light of the nature, extent and quality of the services the fund receives and the other factors considered. It was noted that the Balanced Fund's management fee was equal to or less than the Lipper medians and the fund's administration fee and total management and administration fees were below the Lipper peer group medians. The trustees further noted that the fund's administration fee and total management and administration fees were higher than the Lipper universe medians and that the total expenses were equal to or higher than the Lipper medians. They noted that the Income Fund's management fee, administration fee, total management and administration fees and total expenses were higher than the Lipper peer group and universe medians. The trustees had a detailed discussion regarding the fund and noted that while the fund's fees and expense ratio were high, cutting fees at this time would be incompatible with the decision to hire a subadviser for the fund. 96 The trustees concluded that the Income Fund's fees and expense ratio were reasonable in light of the nature, extent and quality of the services the fund receives and the other factors considered. They noted that the Money Market Fund's management fee, administration fee, total management and administration fees and total expenses were equal to or higher than the Lipper universe and peer group medians. The trustees concluded that the fund's fees and expense ratio were reasonable in light of the size of the 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 fund's 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. 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 pages show the trustees and officers of the funds as of June 30, 2007. 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 eight 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. 97 SUPPLEMENTAL INFORMATION (UNAUDITED) AFFILIATED TRUSTEE POSITIONS(S) WITH 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 Funds, since 3/95. 51 President 1991-1998 and Majority Owner and Chair of Board of since 8/02, Chair of Board Directors, Citizens Advisers, Inc., since 1/02-8/02 12/91. 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. INDEPENDENT TRUSTEES POSITIONS(S) WITH 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 Retired; formerly Executive Vice President 57 Chair since 8/04 for Corporate Operations and Chief Vice Chair 8/02-8/04 Financial Officer, American Heart Association, 5/96-12/06. Jeannie H. Diefenderfer Trustee since 5/01 Vice President, Verizon Business, since 46 1/06. Senior Vice President, Verizon, 8/04- 12/05. Vice President, Verizon, 8/01-7/02. Pablo S. Eisenberg Trustee since 12/99 Senior Fellow, Public Policy Institute, 75 Georgetown University, since 6/98. Orlando Hernandez Trustee since 8/01 Retired; formerly Vice President of Finance, 60 Texas Instruments, 5/76-4/01. Martha S. Pope Trustee since 12/99 Trustee, National Park Foundation, since 8/00. 62 Chair 8/02-8/04 Trustee, Hofstra University, since 6/00. Henry L.P. Schmelzer Trustee since 11/05 President and CEO, Maine Community 64 Foundation, since 2/00. Director, Maine Bank & Trust, since 9/95. Trustee, Fisher Charitable Foundation, since 9/01. (1) Sophia Collier is an interested person of the funds by virtue of her position with the funds' investment adviser. 98 OFFICERS WHO ARE NOT TRUSTEES POSITIONS(S) WITH FUNDS AND DATE OF ELECTION NAME AND AGE OR APPOINTMENT PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS - ------------ -------------------------- ---------------------------------------------- Robert Silva Assistant Treasurer since Assistant Vice President, Citizens Advisers, 41 2/07 Inc., since 1/07. Director, Citizens Advisers, Inc., 9/05-1/07. Senior Fund Administrator, Citizens Advisers, Inc., 5/02-9/05. Marcia Kovalik Chief Compliance Officer General Counsel, Citizens Advisers, Inc., 44 since 8/04 since 1/07. Vice President, Citizens Advisers, Secretary since 5/03 Inc., 4/03-12/06. Counsel, Citizens Advisers, Inc., 2/01-4/03. The funds' statement of additional information includes additional information about the trustees and officers and is available, without charge, by calling 800.223.7010. 99 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 highly trained shareholder service representatives to an informative website. EXCHANGES BETWEEN CITIZENS FUNDS* You can move your money from any one of our funds to another. RETIREMENT INVESTING You have 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 You can 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 your request during the first phone call. Representatives are available from 9 AM to 6 PM (ET) Monday -- Friday at 800.223.7010. WWW.CITIZENSFUNDS.COM Citizens Funds' website offers daily fund prices and monthly performance updates, fund and manager profiles, the funds' prospectus 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, 2007 are available on-line at www.citizensfunds.com without charge, or upon request, by calling 800.223.7010, or on the SEC's website at www.sec.gov. * Citizens Global Equity Fund charges a redemption fee of 2% on shares redeemed or exchanged within 60 days of purchase. 100 NOTES (CITIZENS FUNDS LOGO) TRUSTEES Walter D. Bristol, Jr. Sophia Collier Jeannie H. Diefenderfer Pablo S. Eisenberg Orlando Hernandez Martha S. Pope Henry L.P. Schmelzer MANAGER Citizens Advisers, Inc. One Harbour Place Suite 400 Portsmouth, NH 03801 800.223.7010 603.436.5152 DISTRIBUTOR Citizens Securities, Inc. One Harbour Place Suite 400 Portsmouth, NH 03801 800.223.7010 603.436.5152 CUSTODIAN Fifth Third Bank Cincinnati, OH 45263 TRANSFER AND ACCOUNTING AGENT Citi Fund Services Ohio, Inc. Columbus, OH 43219 LEGAL COUNSEL Bingham McCutchen LLP Boston, MA 02110 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Columbus, OH 43215 (CO-OP AMERICA LOGO) APPROVED FOR PEOPLE AND PLANET 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 VISIT WWW.CITIZENSFUNDS.COM OR CALL 800.223.7010 FOR A FREE PROSPECTUS AND READ IT CAREFULLY BEFORE INVESTING. (C) 2007 CITIZENS ADVISERS, INC. ITEM 2. CODE OF ETHICS. (a) The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This code of ethics is filed as an exhibit to the registrant's Form N-CSR. (b) During the period covered by the report, with respect to the registrant's code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; there have been no amendments to, nor any waivers granted from, a provision that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item 2. 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, 2006 and June 30, 2007, PWC billed audit fees to the registrant in the amount of $124,000 and $127,750, respectively. (b) Audit Related Fees. None (c) Tax Fees. For the fiscal years ended June 30, 2006 and June 30, 2007, PWC billed tax fees to the registrant in the amount of $33,855 and $31,060, 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 pre-approves 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 pre-approval is not required where the services would not need to be pre-approved pursuant to applicable rules and regulations. (e) (2) For the fiscal years ended June 30, 2006 and June 30, 2007, 100% of all 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 (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) 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) Certifications for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) 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) 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. (Registrant) Citizens Funds By (Signature and Title)* /s/ Sophia Collier ------------------------------------- President Date August 24, 2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Sophia Collier, President ------------------------------------- Date August 24, 2007 By (Signature and Title)* /s/ Robert Silva, Assistant Treasurer ------------------------------------- Date August 24, 2007 * Print the name and title of each signing officer under his or her signature.