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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: 811-7978
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ING Mayflower Trust
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
7337 E. Doubletree Ranch Rd., Scottsdale, AZ 85258
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(Address of principal executive offices) (Zip code)
CT Corporation System, 101 Federal Street, Boston, MA 02110
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-800-992-0180
---------------------------
Date of fiscal year end: May 31
--------------------------
Date of reporting period: November 30, 2003
-------------------------
ITEM 1. REPORTS TO STOCKHOLDERS.
The following is a copy of the report transmitted to stockholders pursuant to
Rule 30e-1 under the Act (17 CFR 270.30e-1):
<Page>
SEMI-ANNUAL REPORT
SEMI-ANNUAL REPORT
NOVEMBER 30, 2003
CLASSES A, B, C AND M
DOMESTIC EQUITY GROWTH FUNDS
ING GROWTH + VALUE FUND
ING GROWTH OPPORTUNITIES FUND
ING LARGECAP GROWTH FUND
ING MIDCAP OPPORTUNITIES FUND
ING SMALLCAP OPPORTUNITIES FUND
ING DISCIPLINED LARGECAP FUND
DOMESTIC EQUITY VALUE FUNDS
ING FINANCIAL SERVICES FUND
ING MAGNACAP FUND
ING MIDCAP VALUE FUND
ING SMALLCAP VALUE FUND
ING TAX EFFICIENT EQUITY FUND
DOMESTIC EQUITY AND INCOME FUNDS
ING CONVERTIBLE FUND
ING EQUITY AND BOND FUND
ING REAL ESTATE FUND
[GRAPHIC]
[ING FUNDS LOGO]
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TABLE OF CONTENTS
<Table>
President's Letter 1
Market Perspective 2
Portfolio Managers' Reports 4
Index Descriptions 32
Statements of Assets and Liabilities 34
Statements of Operations 42
Statements of Changes in Net Assets 46
Financial Highlights 54
Notes to Financial Statements 78
Portfolios of Investments 97
Shareholder Meeting Information 128
Trustee and Officer Information 129
</Table>
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(THIS PAGE INTENTIONALLY LEFT BLANK)
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PRESIDENT'S LETTER
[PHOTO OF JAMES M. HENNESSY]
JAMES M. HENNESSY
Dear Shareholder,
What a difference a few months can make. In my last letter to our shareholders
in the annual report, it was hard to escape the sense of anxiety that many
investors were experiencing. Now, six months later, I believe there may be a
renewed sense of optimism among investors -- cautious optimism, to be sure, but
optimism nevertheless.
And I believe there are good, solid reasons for this improved outlook. For one,
many key corporations have been reporting profits in recent months. Granted, the
numbers are modest, but they have been noteworthy, consistent and credible
because many of these same companies are employing stricter accounting standards
following the Enron debacle. Going hand-in-hand with these upbeat figures are
the improving price-to-earning ratios and improving valuations that many
investors are now seeing.
This renewed confidence has been tempered, however, by recent events and news
stories concerning mutual fund trading practices, including after-hours trading
and market timing. As with many financial services companies, ING Investments,
LLC ("ING Investments"), investment adviser to the ING Funds, and affiliates of
ING Investments (collectively, "ING") have received requests for information
from various governmental and self-regulatory agencies in connection with
investigations related to trading in investment company shares. In each case,
full cooperation and responses are being provided. ING is also conducting an
internal review of investment company share trading, as well as reviewing their
policies and procedures in this area.
Also, I want to clearly state that ING Funds does not condone the illegal
practice of after-hours trading. In addition, it has been our long-standing
policy to discourage inappropriate fund trading in our funds. In fact, over the
years, ING Funds has taken a variety of steps to address inappropriate fund
trading activity. We were among the first fund groups to employ innovative
techniques such as making extensive use of fair-value pricing for foreign
securities.
ING Funds believes that mutual funds are an important vehicle for individual
investors, because mutual funds provide the opportunity for investment in
professionally managed and monitored, diversified portfolios. As such, we
consider the fair treatment of committed investors to be of the utmost
importance. We continue to look for effective strategies to address fund trading
issues. We hope that the increased attention this issue is now receiving will
make it easier for the industry to effectively address inappropriate fund
trading in the future.
On behalf of everyone at ING Funds, thank you for your continued support. We
look forward to helping you meet your investment goals in the future.
Sincerely,
/s/James M. Hennessy
James M. Hennessy
President
ING Funds
January 9, 2004
1
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MARKET PERSPECTIVE: SIX MONTHS ENDED NOVEMBER 30, 2003
During the six months ended November 30, 2003, GLOBAL EQUITIES were strong
practically across the board, after bouncing sharply from low points in March
and April as major conflict in Iraq quickly ended. The Morgan Stanley Capital
International ("MSCI") World Index rose 14.7% in dollars. The period started
with the world's major economies still weak after recession. Some would get
weaker still. But by the end, a remarkable acceleration in the U.S. had improved
the outlook in that country and dragged the rest of the world into growth.
U.S. EQUITIES returned 10.8% in the six months, based on the Standard & Poors
("S&P") 500 Index including dividends. This implied, by the end of November, a
market trading at about 17.2 times 2004 estimated earnings. This is a not
particularly compelling level, similar to those seen during much of the period.
But what a difference six months makes. By the end of May the first quarter
Gross Domestic Product ("GDP") growth, reported at just 1.4% annualized, had
included corporate earnings only about 2.4% higher than in the same quarter of
2002 and declining equipment and software expenditure. But second quarter GDP
growth estimates were revised up to a healthy 3.3%, with corporate profits from
current production advancing 14.3%. Spending on equipment and software rose by
8.3%. Productivity growth was estimated at the excellent rate of 6.8%. Then in
the last days of November, third quarter GDP growth was revised up to a
remarkable 8.2% annualized. This was the best showing since the first quarter of
1984. The components of this figure were as encouraging as the total. Consumer
spending rose 6.4% and while half of this could be attributed to an income tax
cut enacted earlier in the year, nothing could dilute the importance of the rise
in business fixed investment of 16.7% within which equipment and software
purchases rose a buoyant 18.4%. Profits rose 11.8% annualized from the second
quarter and fully 30% from the third quarter of 2002. The lingering concern had
been the slow growth in jobs. But here too there was progress. The employment
report showed that the economy had created 286,000 jobs in the three months
through October, while by the end of November unemployment claims had fallen to
about 350,000. Add to this continued expansion in the manufacturing and service
industries, booming housing and construction and a raft of other positive
statistics and it seemed clear that the U.S. economy was confidently on the
move.
U.S. FIXED INCOME markets had been propelled higher in May when Federal Open
Market Committee ("FOMC") Chairman Greenspan asserted that to forestall
deflation, the Federal Reserve might purchase bonds. But after disappointing
markets by only reducing the Fed Funds rate by 0.25% at the end of June and
appearing to downplay the likelihood of bond purchases after all, bond yields
soared. The ten-year Treasury yield at the end of November was 4.32%, almost
exactly 1% above the starting yield on May 30. Conversely the 13-week bill rate
fell by 0.18%. For the six months, according to Lehman Brothers Fixed Income
Indices, U.S. Treasuries had a return of -2.9%. Corporate Investment Grade Bonds
did less badly, returning -0.9%. But the high yield sector performed much better
than investment grade bonds, given its closer affinity with equities. The Lehman
Brothers High Yield Bond Index rose 9.5% for the six months ended November 30,
2003.
CURRENCIES were never far from the headlines during the six months, particularly
the weakening dollar against the Euro. The main reasons for the Euro's strength
over the last year have been the growing realization that the U.S.'s current
account deficit, approximately $500 billion per annum, is unsustainable,
together with the fact that other major trading partners like China and (until
recently) Japan have been able to stop their currencies from rising. The Bank of
Japan has spent an astonishing $162 billion in 2003 to slow the Yen's rise.
Unsurprisingly, despite presently tame inflation, the world's oldest "real"
currency, GOLD, which is denominated in dollars, rose by the end of November to
nearly $400 an ounce, the highest level in at least eight years.
JAPAN soared 32.6% in dollar terms in the six months to November 30, based on
the MSCI Japan Index, with one third of this due to yen appreciation. By the end
of the period the Japanese stock market was trading at a P/E multiple of about
20 times 2004 earnings. More and more commentators seemed willing to say that
the worst was over for an economy that has been in the doldrums for more than a
decade. Surprisingly good second quarter GDP growth of 3.9% annualized was
followed up by growth of 2.2% in the third quarter. But this was entirely export
led; domestic demand remained weak. Little wonder that the Bank of Japan has
been spending so much to keep the yen from appreciating. Japan's underlying
problems: chronic deflation and a banking system weak and paralyzed by a massive
volume of non-performing loans have still to be solved. A nervous market fell by
more than 3% in November.
See accompanying index descriptions on page 32.
2
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MARKET PERSPECTIVE: SIX MONTHS ENDED NOVEMBER 30, 2003
EUROPEAN EX UK (UNITED KINGDOM) markets, as represented by the MSCI Europe ex UK
Index, rose 17.9% in dollars during the six months ended November 30, 2003. At
these levels markets trade at an undemanding 14 1/2 times 2004 earnings.
Stagnating economies remained the problem. In early September the Eurozone
reported a slight second quarter contraction in GDP, after practically no
increase in the first. The European Central Bank reduced rates just once to 2%,
twice the level of the accelerating U.S. The European Union's "stability pact"
under which countries must keep their budget deficits to a maximum of 3% of GDP
or face sanctions, was effectively abandoned in November when blatant offenders
France and Germany said they would not comply. On a more positive note Germany
finally found the political will to make the labor market more flexible, by
reducing unemployment benefits and allowing small businesses to hire more
temporary help, while France slimmed the expensive pension plan for state
employees. The relief that met the region's 0.4% third quarter GDP growth was
tempered by the fact that, as in Japan, the entire source of the gain was
exports. Consumer spending was stagnant while business investment fell, a
difficult environment for profit growth. The appeal of stocks in the Eurozone
rests on their cheapness. Investors are hoping that this is based on a corporate
earnings outlook that is too pessimistic.
The UK market rose 14.8% in dollars in the period under review, based on the
MSCI UK Index, more than one third of this due to sterling strength. At those
levels the UK market was trading at about 17.8 times 2004 earnings. As in the
U.S., barely positive GDP growth in the first quarter improved to a much
healthier 3.1% annualized in the third quarter. A robust service sector and a
bubbling housing market were behind a fairly healthy level of domestic demand,
supported by the lowest rate of unemployment in G8, just 5% by the end of
November. While inflation is a very tame 1.4%, the worryingly high level of
consumer indebtedness caused the Bank of England to raise short-term interest
rates by 0.25% to 3.75%, making it the first of the world's major central banks
to do so. This may well mark the turning point in global interest rates.
See accompanying index descriptions on page 32.
3
<Page>
ING GROWTH + VALUE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Matthew S.
Price, CFA, and David C. Campbell, ING Investments, LLC.
GOAL: The ING Growth + Value Fund (the "Fund") seeks capital appreciation by
investing in a diversified portfolio of equity securities, including common and
preferred stock.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 24.11% compared to
the Russell MidCap Growth Index, Russell MidCap Index and Russell 2000 Index for
which the total return was 20.59%, 18.96% and 24.65%, respectively.
PORTFOLIO SPECIFICS: The current management team took over investment
responsibility for this Fund in June of 2003. The investment process focuses on
three major elements: 1) earnings growth, 2) reasonable valuation, and 3)
relative price strength. Also, for risk control, the Fund is well diversified
with more than 65 names at all times, maintains a maximum position size of 3% of
total Fund assets and avoids both low quality companies and stocks with a share
price below $5. Investment performance over the past six months was positively
influenced by both sector allocation and stock selection. The Fund's three most
heavily weighted economic sectors have been technology, consumer discretionary
and industrials, which have accounted for more than two-thirds of the Fund's
assets. Stocks in these sectors participated in the markets' advance over the
past two quarters and contributed significantly to the Fund's overall gain. The
consumer discretionary and technology sector weightings were meaningfully
increased over the reporting period, with new investments in those sectors
including Johnson Controls, Panera Bread, Adobe Systems, Foundry Networks and
Broadcom. Both the Fund's overweighted industrial and underweighted health care
exposure were reduced during the period with the Flir Industries, FTI
Consulting, Web MD and Medimmune positions eliminated. Overall, the primary
reasons for the Fund's favorable performance versus the Russell MidCap Growth
Index was good stock selection in the consumer discretionary sector, an
overweighted position in the strong industrial sector and a continuing
underweighted sector position in health care.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the outlook for the
stock market has become increasingly positive. In our opinion, however, it would
be unrealistic to expect future annual gains to continue at the pace that we
have seen thus far in 2003. While our investment discipline does not depend on
either our economic or stock market forecast, we continue to be broadly
diversified and fully invested, focusing on stocks chosen for their bottom line
earnings improvement, relative price strength and reasonable valuation.
4
<Page>
Portfolio Managers' Report ING GROWTH + VALUE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
---------------------------------------
SINCE INCEPTION
1 YEAR 5 YEAR 11/18/96
------ ------ ---------------
Including Sales Charge:
Class A(1) 19.09% -0.14% 2.12%
Class B(2) 20.64% 0.05% 2.28%
Class C(3) 24.51% 0.35% 2.26%
Excluding Sales Charge:
Class A 26.36% 1.05% 2.99%
Class B 25.64% 0.37% 2.28%
Class C 25.51% 0.35% 2.26%
Russell MidCap Growth Index 32.64% 3.81% 6.48%(4)
Russell MidCap Index 30.63% 7.82% 9.89%(4)
Russell 2000 Index 36.29% 7.99% 7.81%(4)
</Table>
The table above illustrates the total return of ING Growth + Value Fund against
the Russell MidCap Growth Index, Russell MidCap Index and the Russell 2000
Index. The Indices are unmanaged and have no cash in their portfolios, impose no
sales charges and incur no operating expenses. An investor cannot invest
directly in an index. The Fund's performance is shown both with and without the
imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B defferred sales charge of 5% and 2%,
respectively, for the 1 year and 5 year returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) Since inception performance for index is shown from 12/01/96.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. In exchange for higher growth potential, investing in
stocks of smaller and mid-sized companies may entail greater price volatility
than investing in stocks of larger companies. From time to time, the stock
market may not favor the mix of growth and value securities in which the Fund
invests.
See accompanying index descriptions on page 32.
5
<Page>
ING GROWTH OPPORTUNITIES FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Matthew
Price, CFA and David Campbell, Aeltus Investment Management, Inc., the
Sub-Adviser.
GOAL: The Growth Opportunities Fund (the "Fund") seeks long-term growth of
capital through investment in a portfolio consisting primarily of common stocks
of U.S. companies that have above-average prospects for growth.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 16.94% compared to
the Russell MidCap Growth Index, Russell MidCap Index and Russell 3000 Index for
which the total return was 20.59%, 18.96% and 12.70%, respectively.
PORTFOLIO SPECIFICS: The management team focuses on three major elements in its
stock selection process: 1) earnings growth, 2) reasonable valuation, and 3)
relative price strength. Also, for risk control, the Fund is well diversified
with more than 65 names at all times, maintains a maximum position size of 3% of
total Fund assets and avoids both low quality companies and stocks with a share
price below $5. Investment performance over the past six months was
significantly influenced by both sector allocation and stock selection, but the
portfolio's underweighted position in the sharply advancing technology sector
was probably the most important reason why the Fund did not perform as well as
the benchmark. The Fund's three most heavily weighted sectors have been
technology, health care and consumer discretionary and have accounted for
approximately two-thirds of the Fund's total assets. Stocks in these sectors all
participated in the markets' advance over the reporting period and contributed
heavily to the Fund's gain. Technology and consumer discretionary weightings
were slightly increased in the past six months, with new investments in these
stock groups including Adobe Systems, Agilent Technologies, Leapfrog
Enterprises, Panera Bread and Michaels Stores. The managers have reduced
exposure to both the health care and energy sectors during the most recent
six-month period and while stock selection was helpful in producing recent
returns, benchmark issues generally outperformed the Fund's holdings. The
positions in Nabors Industries and Devon Energy were reduced, but because the
entire energy sector underperformed, the overall sector exposure hindered the
Fund's relative performance.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the outlook for the
stock market has become increasingly positive. In our opinion, however, it would
be unrealistic to expect future annual gains to continue at the pace that we
have seen thus far in 2003. While our investment discipline does not depend on
either our economic or stock market forecast, we continue to be broadly
diversified and fully invested, focusing on stocks chosen for their bottom line
earnings improvement, relative price strength and reasonable valuation.
6
<Page>
Portfolio Managers' Report ING GROWTH OPPORTUNITIES FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
-----------------------------------------
SINCE INCEPTION
OF CLASS A, B AND C
1 YEAR 5 YEAR 06/05/95
------ ------ -------------------
Including Sales Charge:
Class A(1) 11.31% -2.73% 5.31%
Class B(2) 12.25% -2.51% 5.33%
Class C(3) 16.31% -2.25% 5.35%
Excluding Sales Charge:
Class A 18.10% -1.57% 6.05%
Class B 17.25% -2.27% 5.33%
Class C 17.31% -2.25% 5.35%
Russell MidCap Growth Index 32.64% 3.81% 9.54%(4)
Russell MidCap Index 30.63% 7.82% 12.41%(4)
Russell 3000 Index 18.24% 0.71% 10.24%(4)
</Table>
The table above illustrates the total return of ING Growth Opportunities Fund
against the Russell MidCap Growth Index, Russell MidCap Index and the Russell
3000 Index. The Indices are unmanaged and have no cash in their portfolios,
impose no sales charges and incur no operating expenses. An investor cannot
invest directly in an index. The Fund's performance is shown both with and
without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 2%,
respectively, for the 1 year and 5 year returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) Since inception performance for index is shown from 06/01/95.
The Fund may invest in securities of large, mid- and small-capitalization
companies, and the Russell 3000 Index tracks a larger number of companies than
the S&P 500 Index with a large range of market capitalizations.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. In exchange for higher growth potential, investing in
stocks of smaller and mid-sized companies may entail greater price volatility
than investing in stocks of larger companies. From time to time, the stock
market may not favor the growth securities in which the Fund invests.
See accompanying index descriptions on page 32.
7
<Page>
ING LARGECAP GROWTH FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: Effective June 2, 2003, Wellington Management
Company, LLP became the Sub-Adviser. Andrew J. Shilling, CFA, Senior Vice
President and Partner is the portfolio manager.
GOAL: The ING LargeCap Growth Fund (the "Fund") seeks capital appreciation by
investing in equity securities of large U.S. companies.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 15.90% compared to
the Russell 1000 Growth Index for which the total return was 12.43%.
PORTFOLIO SPECIFICS: During the six-month period ending November 30, 2003, nine
of ten sectors of the Russell 1000 Growth Index (the "Index") posted positive
returns. The Telecommunications Services, Materials and Information Technology
sectors led the way in the Index. Earlier in the period, lower quality and/or
higher market risk names attracted the most investor interest in the market.
This subsequently gave way to more of a focus on valuation, late in the period.
Generally stated, the outperformance of speculative shares in the market was
largely driven by a shift in investor risk aversion from extreme pessimism to a
more normal level.
Our investment approach is very much a "bottom-up" process; we pick stocks one
at a time based on the fundamentals of each holding. We seek undervalued growth
companies with sustainable growth potential as exhibited by characteristics such
as competitive advantage, strong financial position, and a demonstrated
management team. The Fund's industry weights are a fall-out of our "bottom-up"
investment process.
Against the backdrop of continued improvement in the economic and investment
spending environment, strong performance among the Fund's Financials and
Information Technology holdings was a primary driver of returns during the
period. Three top contributors to Fund returns were COUNTRYWIDE FINANCIAL
(thrifts & mortgage finance), APPLIED MATERIALS (semiconductor equipment) and
SYMANTEC (software & services). Three detractors from returns were
SCHERING-PLOUGH (pharmaceuticals), INTERACTIVECORP (internet retailing), and
SEAGATE TECHNOLOGY (computers & peripherals).
The Fund's out-performance versus the benchmark during the period was primarily
due to strong stock selection. Stock selection was strongest within the Health
Care and Financials sectors. Partially offsetting these results were weaker
relative returns within the Information Technology sector, though the sector was
a primary driver of absolute Fund returns, as noted above. In other words, our
Information Technology sector holdings returned less than the benchmark
holdings, in total. This can be attributed to our focus on finding traditional
growth stocks at reasonable valuations, versus the market's relatively greater
focus on higher market risk names for much of the period, as discussed above.
Sector allocation had a positive effect on the Fund's out-performance versus the
benchmark. Our investment approach is based on investing in sectors that have
the potential to outperform the market long-term. In keeping with this, the Fund
benefited from our elimination of holdings in the Consumer Staples sector, which
underperformed other sectors in the growth index.
MARKET OUTLOOK: The portfolio is well positioned to benefit from acceleration in
worldwide economic growth, which we expect to see over the next twelve months.
We believe the consumption environment will be sound next year, bolstered by
more jobs, tax cuts and an improving net worth position of households. Our
outlook for capital spending is even better. After more than two years of
downsizing, corporations are faced with an aging capital stock and we expect
that they will use the continued profits expansion to upgrade their investments,
especially in the technology area.
Our strategy is to build a diversified portfolio on a stock-by-stock basis,
identifying companies with sustainable strong revenue, earnings, and cash flow
growth. Currently, this results in an overweight position in the Consumer
Discretionary, Information Technology and Financials sectors. The Fund is now
underweight the Industrials and Health Care sectors, while having no holdings in
Consumer Staples, Energy, Materials, Telecommunications Services or Utilities.
8
<Page>
Portfolio Managers' Report ING LARGECAP GROWTH FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
---------------------------------------
SINCE INCEPTION
1 YEAR 5 YEAR 07/21/97
------ ------ ---------------
Including Sales Charge:
Class A(1) 12.29% -1.94% 4.52%
Class B(2) 13.36% -1.81% 4.81%
Class C(3) 17.42% -1.42% 4.81%
Excluding Sales Charge:
Class A 19.14% -0.77% 5.49%
Class B 18.36% -1.42% 4.81%
Class C 18.42% -1.42% 4.81%
Russell 1000 Growth Index 16.75% -4.12% 0.53%(4)
S&P 500 Index 15.13% -0.46% 3.17%(4)
</Table>
The table above illustrates the total return of ING LargeCap Growth Fund against
the Russell 1000 Growth Index and the S&P 500 Index. The Indices are unmanaged
and have no cash in their portfolios, impose no sales charges and incur no
operating expenses. An investor cannot invest directly in an index. The Fund's
performance is shown both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% 2% and 1%,
respectively, for the 1 year, 5 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) Since inception performance for index is shown from 08/01/97.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. The Fund invests in companies that the portfolio
managers believe have the potential for rapid growth, which may give the Fund a
higher risk of price volatility and less liquidity than a fund that emphasizes
other styles. The Fund may invest in mid-sized companies, which may be more
susceptible to price swings than larger companies. International investing does
pose special risks including currency fluctuations, economical and political
risks not found in investments that are solely domestic. Risks of foreign
investing are generally intensified for investments in emerging markets.
Exchange Traded Index Funds (ETF) present risks similar to those of an
investment in the underlying securities held by the ETF. Sometimes, the prices
of ETFs may vary significantly from the ETFs' underlying NAVs. The value of
convertible securities may fall when interest rates rise. Convertible securities
with longer maturities tend to be more sensitive to changes in interest rates,
usually making them more volatile than convertible securities with shorter
maturities. The use of certain derivatives may increase the volatility of the
Fund.
See accompanying index descriptions on page 32.
9
<Page>
ING MIDCAP OPPORTUNITIES FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Matthew
Price, CFA and David Campbell, Aeltus Investment Management, Inc., the
Sub-Adviser.
GOAL: The ING MidCap Opportunities Fund (the "Fund") seeks long-term capital
appreciation by investing primarily in the common stock of mid-sized U.S.
companies.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 17.49% compared to
the Russell Mid Cap Growth Index for which the total return was 20.59% and the
Russell MidCap Index for which the total return was 18.96%.
PORTFOLIO SPECIFICS: The management team focuses on three major elements in its
stock selection process: 1) earnings growth, 2) reasonable valuation, and 3)
relative price strength. Also, for risk control, the Fund is well diversified
with more than 65 names at all times, maintains a maximum position size of 3% of
total portfolio assets and avoids both low quality companies and stocks with a
share price below $5. Investment results during the past six months were
significantly influenced by both sector allocation and stock selection, but the
most important reason for not performing as well as the Russell Midcap Growth
Index was the large underweighted position in Technology. The Fund's three most
heavily weighted sectors have been technology, healthcare and consumer
discretionary and have collectively accounted for approximately two-thirds of
the total portfolio. Stocks in these sectors all participated in the markets'
advance during the past two quarters and contributed heavily to the Fund's gain.
Technology and consumer discretionary weightings were slightly increased over
the reporting period, with new names added to the Fund including Adobe Systems,
Agilent Technologies, Leapfrog Enterprises, Panera Bread and Michaels Stores.
The managers have reduced exposure to the healthcare sector. Stock selection was
also helpful in producing good returns, although in the aggregate, benchmark
holdings outperformed the Fund's positions. The Fund's energy exposure was
reduced during the most recent six-month period despite the fact that the price
of oil and natural gas remained high because of the Iraqi situation. The primary
reason for the underperformance of the Fund against the benchmark was mainly due
to an overweight in the energy sector and an underweight in technology. Nabors
Industries and Devon Energy positions were reduced, but because the entire
energy sector underperformed, this reduced sector exposure helped the Fund's
relative performance.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the outlook for the
stock market has become increasingly positive. In our opinion, however, it would
be unrealistic to expect future annual gains to continue at the pace that we
have seen thus far in 2003. While our investment discipline does not depend on
either our economic or stock market forecast, we continue to be broadly
diversified and fully invested, focusing on stocks chosen for their bottom line
earnings improvement, relative price strength and reasonable valuation.
10
<Page>
Portfolio Managers' Report ING MIDCAP OPPORTUNITIES FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
---------------------------------------
SINCE INCEPTION
1 YEAR 5 YEAR 07/21/97
------ ------ ---------------
Including Sales Charge:
Class A(1) 15.17% 6.80% 8.50%
Class B(2) 16.50% 7.02% 8.90%
Class C(3) 20.38% 7.25% 8.95%
Excluding Sales Charge:
Class A 22.20% 8.07% 9.72%
Class B 21.50% 7.32% 9.04%
Class C 21.38% 7.25% 8.95%
Russell MidCap Growth Index(4) 32.64% 3.81% 4.27%(5)
Russell MidCap Index 30.63% 7.82% 7.73%(5)
</Table>
The table above illustrates the total return of ING MidCap Opportunities Fund
against the Russell MidCap Growth Index and the Russell MidCap Index. The
Indices are unmanaged and have no cash in their portfolios, impose no sales
charges and incur no operating expenses. An investor cannot invest directly in
an index. The Fund's performance is shown both with and without the imposition
of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% 2% and 1%,
respectively, for the 1 year, 5 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) The Fund normally invests in mid-cap companies that the portfolio managers
feel have above average prospects for growth. The Russell MidCap Growth
Index tracks the performance of mid-cap growth companies.
(5) Since inception performance for index is shown from 08/01/97.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. While equities may offer the potential for greater
long-term growth than most debt securities, they generally have higher
volatility. The Fund invests in companies that the Sub-Adviser feels have the
potential for growth, which may give the Fund a higher risk of price volatility
than a fund that emphasizes other styles, such as a value-oriented style.
Securities of mid-sized companies may be more susceptible to price swings and
less liquid than investments in larger companies. From time to time, the stock
market may not favor the mid-cap growth securities in which the Fund invests.
Rather, the market could favor value-oriented stocks or large or small company
stocks, or may not favor equities at all. The Fund's investment in technology
sectors of the stock market and in initial public offerings has had a
significant impact on performance in 1999. There can be no assurance that these
factors will be repeated.
See accompanying index descriptions on page 32.
11
<Page>
ING SMALLCAP OPPORTUNITIES FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Matthew
Price, CFA and David Campbell, Aeltus Investment Management, Inc., the
Sub-Adviser.
GOAL: The Small Cap Opportunities Fund (the "Fund") seeks capital appreciation
through investment in a diversified portfolio consisting primarily of common
stocks of smaller, lesser-known U.S. companies.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 30.34% compared to
the Russell 2000 Growth index for which the return was 26.31%.
PORTFOLIO SPECIFICS: The management team focuses on three major elements in its
stock selection process: 1) earnings growth, 2) reasonable valuation, and 3)
relative price strength. Also, as risk control measures, the Fund is well
diversified with more than 65 names at all times, maintains a maximum position
size of 3% of total Fund assets and avoids both low quality companies and stocks
with a share price below $5. Investment performance was significantly influenced
by both favorable sector allocation and stock selection. The Fund's three most
heavily weighted economic sectors have been technology, health care and consumer
discretionary and have accounted for approximately two-thirds of the Fund's
assets. Stocks in these three sectors fully participated in the markets' advance
over the past two quarters and contributed heavily to the Fund's gain. While
technology and health care weightings have remained relatively constant for the
past six months, the managers have committed additional assets into the consumer
discretionary sector. New names in this sector included Shuffle Master, Petco
Animal Supplies, Panera Bread and Tractor Supply Company while existing holdings
in Hot Topic, Pacific Sunwear and Yankee Candle were increased. Favorable stock
selection also helped produce the recent favorable relative returns. In fact,
several stocks have more than doubled in price during this period including
Cognizant Technology, Kyphon, Strayer and Engineered Support Systems. The Fund's
energy exposure was reduced, from an overweighted position during most of the
reporting period, despite the continued high prices of oil and natural gas,
which were supported by the Iraqi situation. Headwaters and Key Energy positions
were sold profitably, but because the entire energy sector underperformed,
reduced exposure in the energy sector slightly helped the Fund's relative
performance. However, stock selection in technology, health care and consumer
discretionary sectors were the main positive influences of Fund performance.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the outlook for the
stock market has become increasingly positive. In our opinion, however, it would
be unrealistic to expect future annual gains to continue at the pace that we
have seen thus far in 2003. While our investment discipline does not depend on
either our economic or stock market forecast, we continue to be broadly
diversified and fully invested, focusing on stocks chosen for their bottom line
earnings improvement, relative price strength and reasonable valuation.
12
<Page>
Portfolio Managers' Report ING SMALLCAP OPPORTUNITIES FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
---------------------------------------
SINCE INCEPTION
OF CLASS A, B AND C
1 YEAR 5 YEAR 06/05/95
------ ------ -------------------
Including Sales Charge:
Class A(1) 18.35% 6.08% 7.59%
Class B(2) 19.72% 6.31% 7.59%
Class C(3) 23.70% 6.58% 7.58%
Excluding Sales Charge:
Class A 25.57% 7.34% 8.34%
Class B 24.72% 6.60% 7.59%
Class C 24.70% 6.58% 7.58%
Russell 2000 Growth Index 37.68% 2.53% 5.66%(5)
Russell 2000 Index(4) 36.29% 7.99% 10.12%(5)
</Table>
The table above illustrates the total return of ING SmallCap Opportunities Fund
against the Russell 2000 Growth Index and the Russell 2000 Index. The Indices
are unmanaged and have no cash in their portfolios, impose no sales charges and
incur no operating expenses. An investor cannot invest directly in an index. The
Fund's performance is shown both with and without the imposition of sales
charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 2%,
respectively, for the 1 year and 5 year returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) The Fund normally invests in small-cap companies that the portfolio
managers feel have above average prospects for growth. The Russell 2000
Growth Index tracks the performance of small-cap growth companies.
(5) Since inception performance for index is shown from 06/01/95.
PRINCIPAL RISK FACTOR(S): While equities may offer the potential for greater
long-term growth than most debt securities, they generally have higher
volatility. In exchange for higher growth potential, investing in stocks of
smaller companies may entail greater price volatility and less liquidity than
investing in stocks of larger companies. From time to time, the stock market may
not favor the small-sized growth securities in which the Fund invests. Rather,
the market could favor value-oriented stocks, or large company stocks or may not
favor equities at all. The Fund's investment in technology sectors of the stock
market and in initial public offerings has had a significant impact on
performance in 1999. There can be no assurance that these factors will be
repeated.
See accompanying index descriptions on page 32.
13
<Page>
ING DISCIPLINED LARGECAP FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Hugh T.M.
Whelan, CFA, Aeltus Investment Management, Inc., the Sub-Adviser.
GOAL: The ING Disciplined LargeCap Fund (the "Fund") seeks to outperform the
Standard & Poor's ("S&P") 500 Index, while maintaining a market level of risk by
investing at least 80% of its net assets in stocks included in the S&P 500.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 9.72%, compared to
10.80% for the Standard & Poor's ("S&P") 500 Index.
PORTFOLIO SPECIFICS: Our investment process is based on the historical
relationship between individual stock fundamentals and relative performance. We
build portfolios to increase exposure to companies with strong business momentum
and high quality earnings; companies that are attractive based on valuation; and
companies that are recognized in the marketplace for their attractive qualities
in terms of strong relative performance and positive revisions by analysts.
Conversely, we seek to minimize exposure to stocks that score poorly in these
areas. Our research and historical performance show that focusing on stocks with
these attractive fundamental traits has produced good relative performance over
time.
However, in the first three months of the reporting period, those normally
predictive fundamental qualities were not successful, contributing largely to
the underperformance of the Fund. In other words, returns attributable to
factors generally associated with good relative performance lagged the rate of
return on the benchmark. In the second half of the period we saw the market
return to rewarding strong fundamentals but not enough to compensate for the
first three months. The entire six-month period was dominated by bullish
investor sentiment that began in late March of 2003. Over the last six months,
only September witnessed negative returns on the broad market averages. For the
period, four of the seven factors in our index-relative ranking model,
specifically, price momentum, change in accruals, long-term price reversal and
1-year forward relative price-earnings ratio, were successfully predictive.
Within economic sectors, 6 of our 11 sector models were effective.
Underperformance during the period was due to individual security selection,
especially within the financials and information technology sectors. The largest
detractors from performance were our average underweights in Fleet Boston and
Wells Fargo and our overweight position in Oracle. Fleet Boston's shares surged
on the news of its acquisition by Banc of America. Wells Fargo's stock has done
well since the company announced that the top debt rating received by its
banking unit would lower the cost of its debt, thus potentially boosting the
bottom line. Oracle's stock has faltered since its attempt to acquire People
Soft, the outcome of which remains uncertain. The largest positive contributors
to performance came from our overweights in Nextel, Staples and Avaya. Nextel
and Staples had strong stock performance in the midst of positive earnings
growth. Avaya's stock has done well on the expectation of improved demand for
internet phone systems.
The impact of the Fund's sector allocation was negligible compared to the impact
of stock selection.
MARKET OUTLOOK: The current characteristics of the Fund include slightly
above-benchmark forecasted long term growth, and a one year forward price
earnings ratio lower than the benchmark. This is a direct result of our use of
historically predictive business momentum, valuation, and market recognition
factors in our stock ranking models. We believe that the high level of
volatility within the market which has weakened the link between investment
fundamentals and excess returns over the last three years is abating. The
portfolio is modestly overweight in the consumer discretionary and information
technology sectors and underweight in the financials and healthcare sectors.
However, our overall sector exposures are by design quite close to the S&P 500
so that nearly all of our relative performance is driven by individual stock
selection.
14
<Page>
Portfolio Managers' Report ING DISCIPLINED LARGECAP FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS
ENDED NOVEMBER 30, 2003
--------------------------------------------
SINCE INCEPTION
1 YEAR 12/30/98
------ ---------------
Including Sales Charge:
Class A(1) 5.92% -4.51%
Class B(2) 6.77% -4.40%
Class C(3) 10.62% -4.02%
Excluding Sales Charge:
Class A 12.38% -3.35%
Class B 11.77% -4.02%
Class C 11.62% -4.02%
S&P 500 Index 15.13% -1.60%(4)
</Table>
The table above illustrates the total return of ING Disciplined LargeCap Fund
against the S&P 500 Index. The Index is unmanaged and has no cash in its
portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 2%,
respectively, for the 1 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) Since inception performance for index is shown from 01/01/99.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. While equities may offer the potential for greater
long-term growth than most debt securities, they generally have higher
volatility. Derivatives are subject to the risk of changes in the market price
of the security and the risk of loss due to changes in interest rates. The use
of certain derivatives may also have a leveraging effect, which may increase the
volatility of the Fund. From time to time, the stock market may not favor the
large company growth oriented securities in which the Fund invests.
See accompanying index descriptions on page 32.
15
<Page>
ING FINANCIAL SERVICES FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: Steven L. Rayner, CFA, CPA, Vice-President and
Portfolio Manager; Robert M. Kloss, Vice-President & Portfolio Manager, Aeltus
Investment Management, Inc., the Sub-Adviser.
GOAL: The Financial Services Fund (the "Fund") seeks long-term capital
appreciation by investing primarily in the equity securities of companies
principally engaged in financial services.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 13.06% compared to
the 24.12% return for the Standard & Poors ("S&P") Financials Index.
PORTFOLIO SPECIFICS: As the financial sector extended its rally off the
mid-March lows, we continued to increase the Fund's exposure to companies which
we believed would benefit from an economic recovery. While the vast majority of
our holdings demonstrated meaningful price appreciation, the mutual fund-related
scandals that broke in September put a slight damper on our positions.
Given the benign interest rate climate that existed during the year, banks were
major contributors to our outperformance. Our large relative bet on mortgage
insurers -- which actually benefit from higher interest rates and a stronger
economy -- finally paid off during the period, as the mortgage refinance boom
lost steam and the market began to look forward to the prospect of higher rates
in 2004. The Fund also got a boost from Wall Street, as the equity market
recovery led to an improved outlook for the major securities brokers.
Among the individual stocks that were positive contributors to performance
during the six months ended November 30, 2003 were: diversified financial
CitiGroup; diversified banks Wells Fargo, FleetBoston Financial, and U.S.
Bancorp; regional banks Banknorth Group, Commerce Bancshares, and City National;
processing/fiduciary bank State Street; commercial financier CIT Group; mortgage
insurers PMI Group and Radian Group; multiline insurer Hartford Financial
Services Group; and securities brokers Merrill Lynch and Morgan Stanley.
On the negative side, our positions in the government-sponsored housing
enterprises, Fannie Mae and Freddie Mac, were impacted by accounting and
management problems at Freddie, and by other political and regulatory pressures.
Our holdings of asset manager Alliance Capital were buffeted by revelations of
improper trading activities in several of their mutual funds.
MARKET OUTLOOK: Our optimism six months ago over the earnings prospects for
companies in our sector was generally rewarded, as the economic recovery gained
steam -- albeit in fits and starts -- and improved earnings were largely
delivered. Despite lingering anxiety over lagging employment numbers in a
"jobless recovery", the preponderance of economic results have continued to be
favorable. Our decision to incrementally sell off defensive holdings and add to
our offensive positions has proceeded favorably thus far, and we expect to
continue this course as long as the macro-economic news remains constructive.
Our focus remains on finding what we believe to be the best relative values
among companies leveraged to an economic recovery, taking care to try to avoid
those that might be derailed by overly exuberant expectations or by the prospect
of higher interest rates coming to pass sometime during 2004. We believe that
modestly higher interest rates could actually benefit many of the companies in
our sector, as rates are lower than optimal for many companies and robust
economic activity could spur beneficial trends, like higher consumer spending
and possibly a return of commercial loan growth. We continue to see considerable
value within our universe of financial stocks, though selectivity is vital given
that the direction of rates is now more likely upward than downward.
16
<Page>
Portfolio Managers' Report ING FINANCIAL SERVICES FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED NOVEMBER 30, 2003
----------------------------------------------------------------------------
SINCE INCEPTION
OF CLASS B
1 YEAR 5 YEAR 10 YEAR 10/17/97
------ ------ ------- ---------------
Including Sales Charge:
Class A(1) 12.15% 3.87% 15.04% --
Class B(2) 13.12% 4.03% -- 4.74%
Excluding Sales Charge:
Class A 18.99% 5.11% 15.73% --
Class B 18.12% 4.31% -- 4.74%
S&P 500 Financials Index 18.26% 5.32% 15.68% 7.41%(3)
S&P 500 Index 15.13% -0.46% 10.67% 3.94%(3)
</Table>
The table above illustrates the total return of ING Financial Services Fund
against the S&P 500 Financials Index and the S&P 500 Index. The Indices are
unmanaged and have no cash in their portfolios, impose no sales charges and
incur no operating expenses. An investor cannot invest directly in an index. The
Fund's performance is shown both with and without the imposition of sales
charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% 2% and 1%,
respectively, for the 1 year, 5 year and since inception returns.
(3) Since inception performance for index is shown from 11/01/97.
PRINCIPAL RISK FACTOR(S): Because the Fund's portfolio is concentrated in the
financial services industry, it may be subject to greater risk than a portfolio
that is not concentrated in one industry. International investing does pose
special risks including currency fluctuation, economic and political risks not
found in investments that are solely domestic. The Fund may invest in small- and
mid-sized companies, which may be more susceptible to price swings and less
liquid than larger companies. The value of convertible or debt securities may
fall when interest rates rise. Profitablility of financial services companies
are more affected by changes in interest rates than some other companies.
See accompanying index descriptions on page 32.
17
<Page>
ING MAGNACAP FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by William F.
Coughlin, CFA, Aeltus Investment Management, Inc., the Sub-Adviser.
GOAL: The ING MagnaCap Fund ("the Fund") seeks growth of capital, with dividend
income as a secondary consideration.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 10.38% compared to
the Russell 1000 Value Index, Russell 1000 Index and Standard & Poors Barra
Value Index for which the total return was 11.15%, 11.79% and 11.34%,
respectively.
PORTFOLIO SPECIFICS: The investment team focuses on high quality companies
selling at low price to earnings ("P/E") multiples. The Fund is well diversified
with exposure to all the major economic sectors and remains sensitive to the
sector weightings of its Russell 1000 Value Index benchmark. During the first
half of the fiscal year, the positive effect of emphasizing economic sectors
that performed well was equally offset by the negative impact of somewhat lower
total returns for the specific holdings in the Fund. The Fund's largest sector
exposure was a 31.3% weighting in financial services, slightly below the 35.5%
benchmark weighting. While this underweighting had only a modestly negative
allocation impact on results, the disappointing performance of some holdings, in
particular, Fannie Mae and Freddie Mac, had a decidedly negative overall effect.
On the other hand, the most positive influence on Fund performance was a larger
position in technology stocks (9.5% for the Fund compared to 6.5% for the index)
combined with very strong returns on the specific stocks held over the period.
The performance of the rest of the portfolio was very much in line with the
benchmark, with returns from both sector allocation and stock selection very
much in balance.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the view of many is
that the outlook for the stock market has become increasingly positive. In our
opinion, however, it would be unrealistic to expect future annual gains to
continue at the pace that we have seen thus far in 2003. Nevertheless, we
believe our portfolio of high quality, low P/E stocks should participate in any
ongoing market advance, and also serve to reasonably protect asset value in the
event of a severe market correction.
18
<Page>
Portfolio Managers' Report ING MAGNACAP FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED NOVEMBER 30, 2003
--------------------------------------------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS B AND M OF CLASS C
1 YEAR 5 YEAR 10 YEAR 07/17/95 06/01/99
------ ------ ------- -------- ---------------
Including Sales Charge:
Class A(1) 7.07% -2.08% 8.11% -- --
Class B(2) 7.82% -1.84% -- 6.70% --
Class C(3) 11.94% -- -- -- 6.54%
Class M(4) 9.25% -2.01% -- 6.54% --
Excluding Sales Charge:
Class A 13.60% -0.91% 8.75% -- --
Class B 12.82% -1.60% -- 6.70% --
Class C 12.94% -- -- -- -3.77%
Class M 13.22% -1.31% -- -- --
Russell 1000 Value Index 17.16% 3.02% 11.42% 11.03%(6) 0.51%
Russell 1000 Index 16.94% 0.17% 10.68% 9.74%(6) -2.48%
S&P Barra Value Index(5) 17.67% 1.43% 10.07% 9.29%(6) -3.10%
</Table>
The table above illustrates the total return of ING MagnaCap Fund against the
Russell 1000 Value Index, Russell 1000 Index and the S&P Barra Value Index. The
Indices are unmanaged and have no cash in their portfolios, impose no sales
charges and incur no operating expenses. An investor cannot invest directly in
an index. The Fund's performance is shown both with and without the imposition
of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 2%,
respectively, for the 1 year and 5 year returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) Reflects deduction of the maximum Class M sales charge of 3.50%.
(5) The Fund invests in value securities that meet the Fund's disciplined
investment criteria. The S&P Barra Value Index tracks the performance of
companies with low price-to-book ratios.
(6) Since inception performance for index is shown from 08/01/95.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. While equities may offer the potential for greater
long-term growth than most debt securities, they generally have higher
volatility. International investing does pose special risks including currency
fluctuation, economical and political risks not found in domestic investments.
The value of convertible or debt securities may fall when interest rates rise.
From time to time, the stock market may not favor the value securities that meet
the Fund's disciplined investment criteria. Rather, the market could favor
growth-oriented stocks, or small company stocks or may not favor equities at
all.
See accompanying index descriptions on page 32.
19
<Page>
ING MIDCAP VALUE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT: A team of investment professionals led by Brandes
Investment Partners' MidCap Investment Committee, the Sub-Adviser.
GOAL: The Fund seeks long-term capital appreciation by investing at least 80% of
its assets in equity securities of U.S. issuers with equity market
capitalizations greater than $1 billion but no greater than $5 billion at the
time of purchase.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 23.09% compared to
the Russell Midcap Value Index for which the total return was 17.83%.
PORTFOLIO SPECIFICS: The Fund's advance during the period was broad-based, with
holdings in a wide range of industries registering gains. Advances for positions
in the communications equipment industry -- such as Avaya (0.0% of the Fund) and
Lucent Technologies (0.9%) -- made the most substantial contribution to returns.
Holdings in industries such as insurance and computers & peripherals also tended
to post sharp gains. Other key contributors included positions such as RJ
Reynolds (tobacco -- 2.4%), York International (building products -- 0.7%), and
AMR (airlines -- 1.8%).
MARKET OUTLOOK: During the six-month period ended November 30, 2003, we sold
several positions as their market prices advanced toward our estimate of their
fair values. We used the proceeds to purchase shares of new holdings at prices
that we consider attractive.
As a result of this buying and selling, many of the Fund's industry exposures
shifted. For example, exposure to the insurance industry increased, while
exposure to the computers & peripherals industry was eliminated. Keep in mind
that the Fund's industry exposures are not the product of top-down forecasts or
industry-level analysis, but merely stem from our company-by-company search for
compelling investment opportunities.
Overall, we offer no predictions regarding the short-term direction of the stock
market, or regarding mid-cap U.S. stocks in particular. Instead, we remain
focused on purchasing mid-cap stocks at discounts to their intrinsic values and
holding them until the broader market recognizes their true worth. We believe
that this approach may provide patient investors with favorable returns over the
long term.
20
<Page>
Portfolio Managers' Report ING MIDCAP VALUE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS A OF CLASS B AND C
1 YEAR 02/01/02 02/04/02
------ --------------- ----------------
Including Sales Charge:
Class A(1) 30.18% -0.52% --
Class B(2) 32.18% -- 0.73%
Class C(3) 36.18% -- 2.89%
Excluding Sales Charge:
Class A 38.12% 2.76% --
Class B 37.18% -- 2.89%
Class C 37.18% -- 2.89%
Russell MidCap Value Index 29.21% 9.65% 9.65%(4)
</Table>
The table above illustrates the total return of ING MidCap Value Fund against
the Russell MidCap Value Index. The Index is unmanaged and has no cash in its
portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% for the since
inception return.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the since
inception return.
(4) Since inception performance for index is shown from 02/01/02.
PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an
investment in equity securities. In exchange for higher growth potential,
investing in stocks of mid-sized companies may entail greater price volatility
than investing in stocks of larger companies. From time to time, the stock
market may not favor the mid-cap value securities in which the Fund invests.
See accompanying index descriptions on page 32.
21
<Page>
ING SMALLCAP VALUE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT: A team of investment professionals led by Brandes
Investment Partners' SmallCap Investment Committee, the Sub-Adviser.
GOAL: The Fund seeks long-term capital appreciation by investing at least 80% of
its assets in equity securities of U.S. issuers with equity market
capitalizations of $1.5 billion or less at the time of purchase.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 39.97% compared to
the Russell 200 Value Index for which the total return was 8.34%.
PORTFOLIO SPECIFICS: The Fund's advance during the period was broad-based, with
holdings in a wide range of industries registering gains. Advances for positions
in the textiles, apparel and luxury goods industry -- such as Vans (0.6% of the
Fund) and Tommy Hilfiger (2.5%) -- made the most substantial contribution to
returns.
Holdings in industries such as metals & mining and leisure equipment & products
also tended to post sharp gains. On a stock-by-stock basis, gains for positions
such as Gateway (computers & peripherals) and Avaya (communications equipment)
had the greatest impact on performance.
MARKET OUTLOOK: During the six-month period ended November 30, 2003, we sold
several positions as their market prices advanced toward our estimate of their
fair values. We used the proceeds to purchase shares of new holdings at prices
that we consider attractive.
As a result of this buying and selling, many of the Fund's industry exposures
shifted. For example, exposure to the food products industry increased, while
exposure to the communications equipment industry was eliminated. Keep in mind
that the Fund's industry exposures are not the product of top-down forecasts or
industry-level analysis, but merely stem from our company-by-company search for
compelling investment opportunities.
Overall, we offer no predictions regarding the short-term direction of the stock
market, or regarding small-cap U.S. stocks in particular. Instead, we remain
focused on purchasing small-cap stocks at discounts to their intrinsic values
and holding them until the broader market recognizes their true worth.
We believe that this approach may provide patient investors with favorable
returns over the long term.
22
<Page>
Portfolio Managers' Report ING SMALLCAP VALUE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS
ENDED NOVEMBER 30, 2003
----------------------------------------------------------------------------
SINCE INCEPTION SINCE INCEPTION SINCE INCEPTION
OF CLASS A OF CLASS B OF CLASS C
1 YEAR 02/01/2002 02/04/2002 02/07/2002
------ --------------- --------------- ---------------
Including Sales Charge:
Class A(1) 27.73% 10.75% -- --
Class B(2) 29.49% -- 12.60% --
Class C(3) 33.52% -- -- 15.25%
Excluding Sales Charge:
Class A 35.53% 14.39% -- --
Class B 34.49% -- 14.58% --
Class C 34.52% -- -- 15.25%
Russell 200 Value Index 17.76% 1.21% 1.21%(4) 1.21%(4)
</Table>
The table above illustrates the total return of ING SmallCap Value Fund against
the Russell 200 Value Index. The Index is unmanaged and has no cash in its
portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% for the since
inception return.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the since
inception return.
(4) Since inception performance for index is shown from 02/01/02.
PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an
investment in equity securities. In exchange for higher growth potential,
investing in stocks of smaller companies may entail greater price volatility
than investing in stocks of larger companies. From time to time, the stock
market may not favor the small-cap value securities in which the Fund invests.
See accompanying index descriptions on page 32.
23
<Page>
ING TAX EFFICIENT EQUITY FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by James A.
Vail, Senior Vice-President, Aeltus Investment Management, Inc., the
Sub-Adviser.
GOAL: The ING Tax Efficient Equity Fund (the "Fund") seeks long-term capital
appreciation by investing in a diversified portfolio of domestic equities while
seeking to provide taxable investors with high total return on an after-tax
basis.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 12.14% compared to a
10.80% total return for the Standard & Poors ("S&P") 500 Index.
PORTFOLIO SPECIFICS: In the last six months economic reports have indicated
strong domestic growth and rising corporate profits. Moreover, this strength
appears to be sustainable, making continued economic expansion a reasonable
expectation for 2004. Contained in the recent data are indications that
corporate and industrial spending are increasing, taking the baton from the
consumer, as it were, and supporting continued growth in gross domestic product
(GDP).
Helping the Fund to outperform were our holdings in the materials sector,
specifically Freeport Copper & Gold and Phelps Dodge. Rising gold prices in the
former and higher copper price in both cases contributed to the strength. Also
contributing to the good return were our holdings in biotech and semi-conductors
and an under-weight in consumer staples. The absence of utility holdings and
stock selection detracted from performance.
MARKET OUTLOOK: As the U.S. economy expands, it should provide the fuel for
global economic growth and better stock markets ahead. The combination of low
interest rates, stimulative fiscal policy, the weak U.S. dollar and recent tax
cuts are clearly having a positive impact on the domestic economy. Third quarter
GDP growth, which was initially reported at 7.2%, was recently revised to over
8%, the fastest in recent memory. Fourth quarter GDP growth is estimated at 4%
or more. With this level of economic growth, jobs should be created keeping
consumer confidence and spending stable. Capital spending by businesses also
appears to be emerging from its slump providing further strength to the economy.
Some observers believe the markets may be ahead of themselves, but in the
context of an expanding U.S. economy, corporate profitability may very well
exceed expectations. We believe this is what economic, market and corporate
fundamentals continue to suggest. As a result, we remain encouraged by the
outlook for the economy, the stock markets, and the portfolio.
24
<Page>
Portfolio Managers' Report ING TAX EFFICIENT EQUITY FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS
ENDED NOVEMBER 30, 2003
--------------------------------------------
SINCE INCEPTION
1 YEAR 12/15/98
------ ---------------
Including Sales Charge:
Class A(1) 6.55% -1.66%
Class B(2) 7.14% -1.52%
Class C(3) 11.23% -1.19%
Excluding Sales Charge:
Class A 13.05% -0.48%
Class B 12.14% -1.12%
Class C 12.23% -1.19%
S&P 500 Index 15.13% -0.46%(4)
</Table>
The table above illustrates the total return of ING Tax Efficient Equity Fund
against the S&P 500 Index. The Index is unmanaged and has no cash in its
portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 3%,
respectively, for the 1 year and since inception returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) Since inception performance for index is shown from 12/01/98.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. The Fund is managed to provide high after-tax returns.
Therefore, it may not provide as high a return before tax as other funds, as a
result may not be suitable for investors who are not subject to current income
tax. In exchange for higher growth potential, investing in stocks of mid-sized
and smaller companies may entail greater price volatility than investing in
those of larger companies.
See accompanying index descriptions on page 32.
25
<Page>
ING CONVERTIBLE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT: A team of investment professionals led by Anuradha Sahai,
Aeltus Investment Management, Inc., the Sub-Adviser.
GOAL: The ING Convertible Fund (the "Fund") seeks maximum total return which
consists of capital appreciation and current income, by investing at least 80%
in convertible securities.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, returned 11.34% compared to 8.36% and 8.34% for
the Merrill Lynch Convertible Index and First Boston Convertible Index (the
"index"), respectively.
PORTFOLIO SPECIFICS: The Fund was relatively defensively positioned versus its
peer group as well as the index at the beginning of the last six months. With
the shift in the market orientation, the Fund orientation also shifted from its
more defensive stance. It adopted a barbell approach with some heavy weights in
more defensive bond-like higher income names along with some equity sensitive
names with good fundamentals. This proved successful as the Fund tended to
outperform in general on both down days as well as up days versus its peer
group.
As evidenced by the NASDAQ Composite Index, the technology sector was the driver
of the majority of the gains in the convertible market due to its heavy weight
in the index. Despite the slight underweighting of the Fund to the benchmark,
the Fund handily outperformed in the sector, almost by double the return, as a
result of security selection. Overweighting and security selection also aided
the Fund in beating the benchmark by over eight times in the telecom sector,
which provided the next best return after technology. Security selection was the
major driver of performance in the industrials and consumer staples sectors as
well. An overweight sensitivity in the materials and financials sector benefited
the Fund also. This was somewhat offset by under performance in the consumer
discretionary and media sectors, due to the underweighting in these sectors.
Utilities was the only sector that hurt the Fund as a consequence of
overweighting in the sector and exposure to one holding that had pronounced
underperformance. Overall, security selection was the key to out-performance of
the Fund versus the benchmarks as well as the peer group.
MARKET OUTLOOK: U.S. economic indicators continuing to improve, but we still
believe that equity market valuations reflect over optimism about the strength
of the U.S. economy. Despite the likelihood that the Federal Reserve Board will
be less restrictive than feared, we think that profitability outlook for firms
will only slowly improve. We would like to see a return to corporate pricing
power and a continued decline in unemployment, especially after the Holiday
season, before we are convinced of the strength of the turnaround. Most
companies are not ready to commit to guide earnings far beyond the first quarter
of 2004. As a result, we believe that we could be in for a softer first half of
the year as investors realize that the economic growth may be more moderate than
current expectations.
In these volatile times, we believe convertible securities are attractive
relative to comparable asset classes due to their bond floor downside protection
while providing equity-like upside potential. Despite the fear of higher rates,
bond floors should be less affected due to improving balance sheets and lower
default risk. We continue to look for companies across the spectrum that will
likely benefit from a gradually recovering economy as we expect the market will
reward companies that typically benefit in the recovery part of the cycle. We
are looking to increase our weighting in the consumer cyclical and media sectors
to participate in the upside these sectors may witness with the improving
economic picture as well as from the benefit of an election year next year. A
bottom up approach, which relies on fundamental analysis and careful security
selection within our broader top down sector positioning strategy, continues to
be the foundation for our investment decisions.
26
<Page>
Portfolio Managers' Report ING CONVERTIBLE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
----------------------------------------------------------------------------
SINCE INCEPTION
OF CLASS B
1 YEAR 5 YEAR 10 YEAR 05/31/95
------ ------ ------- ---------------
Including Sales Charge:
Class A(1) 15.95% 7.66% 10.39% --
Class B(2) 17.21% 8.01% -- 12.38%
Class C(2) 21.21% 8.29% 10.36% --
Excluding Sales Charge:
Class A 23.03% 8.95% 11.04% --
Class B 22.21% 8.29% -- 12.38%
Class C 22.21% 8.29% 10.36% --
Merrill Lynch Convertible Index 22.00% 8.58% 9.46% 10.51%(4)
First Boston Convertible Index 22.60% 8.35% 9.21% 9.78%(4)
</Table>
The table above illustrates the total return of ING Convertible Fund against the
Merrill Lynch Convertible Index and the First Boston Convertible Index. The
Index is unmanaged and has no cash in its portfolio, imposes no sales charges
and incurs no operating expenses. An investor cannot invest directly in an
index. The Fund's performance is shown both with and without the imposition of
sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 2%,
respectively, for the 1 year and 5 year returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) Since inception performance for index is shown from 06/01/95.
PRINCIPAL RISK FACTOR(S): The credit standing of the issuer and other factors
may affect the investment value of a convertible security. The market value of
convertible debt securities tends to vary inversely with the level of interest
rates. Lower rated securities may be less liquid than higher quality
investments. The Fund also has exposure to financial, market and interst rate
risks. Higher yields reflect the higher credit risks associated with certain
lower rated securities in the Fund's portfolio and in some cases, the lower
market prices for those instruments. The Fund may also invest in small and
medium sized companies, which may be more susecptible to greater price
volatility than larger companies.
See accompanying index descriptions on page 32.
27
<Page>
ING EQUITY AND BOND FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: The equity and bond portions of the Fund are managed
by teams of investment professionals led by James A. Vail, CFA, and James
Kauffmann respectively, Aeltus Investment Management, Inc., the Sub-Adviser.
GOAL: The ING Equity & Bond Fund (the "Fund") seeks a balance of long-term
capital appreciation and current income by investing in both equities and debt
securities.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, returned 5.33% compared to 11.34% for the
Standard & Poor's (S&P) Barra Value Index, -1.04% for the Lehman Brothers
Aggregate Bond Index, 10.80% for the S&P 500 Index and 6.01% for the Composite
Index (60% S&P 500 Index / 40% Lehman Brothers Aggregate Bond Index).
PORTFOLIO SPECIFICS: EQUITY PORTFOLIO: The market as measured by the S&P 500
gained 10.80% in the last six months as economic data indicated strong domestic
growth and rising corporate profits. Moreover, this strength appears to be
sustainable, making continued economic expansion a reasonable expectation for
2004. Contained in the recent data are indications that corporate and industrial
spending are increasing, taking the baton from the consumer, as it were, and
supporting continued growth in the gross domestic product (GDP). As the U.S.
economy expands, it should provide the fuel for global economic growth and
better stock markets ahead.
The Equity portfolio's out-performance was aided by holdings in the materials
sector specifically, ALCOA and Freeport Copper and Gold. The growing U.S.
economy and anticipation of stronger demand for basic commodities in 2004 are
driving aluminum and copper prices higher. Gold prices are also up, helping
drive the relative performance of Freeport. Additional contributors to good
performance were Cigna in the insurance sector and Cendant in commercial
services. Performance was impeded by being underweight technology and overweight
energy.
PORTFOLIO SPECIFICS, FIXED INCOME PORTFOLIO: The Lehman Brothers Aggregate Bond
Index posted a -1.04% of total return during the period. Despite a significant
drop in interest rates following the war in Iraq, subsequent signs of renewed
economic growth have pushed yields higher. Treasuries have notched a -2.91% for
the last six months. Negative headlines at the agencies over the period
presented investors with -0.42% of excess returns. The credit sector realized
1.82% of excess returns while mortgages notched 0.15%, commercial
mortgage-backed securities printed -0.81%, and asset-backed securities hit
0.37%. Emerging markets tallied continued strong excess returns of 7.06%. But
high yield trumped all sectors with 11.60% of excess returns.
Chief sources of out-performance include an overweight in longer duration and
lower quality credits, which both outperformed shorter duration and high quality
names. An overweight to mortgage-backed securities also boosted excess returns
earlier in the period. Our short duration posture also assisted in beating the
index. Exposure to both high yield and emerging markets -- which were strong
performers over the last six months -- provided a further lift in excess
returns, although our conservative high yield security selection produced total
returns lower than that of the high yield index itself.
MARKET OUTLOOK, EQUITIES: The combination of low interest rates, stimulative
fiscal policy, the weak U.S. dollar and recent tax cuts are clearly having a
positive impact on the domestic economy. Third quarter GDP growth, which was
initially reported at 7.2%, was recently revised to over 8%, the fastest in
recent memory. Fourth quarter GDP growth is estimated at 4% or more. Ultimately,
we believe job creation and income growth are the keys to a sustainable
recovery. With this level of economic growth, jobs should be created, keeping
consumer confidence and spending stable. Capital spending by businesses also
appears to be emerging from its slump providing further strength to the economy.
Some observers believe the markets may be ahead of themselves, but in the
context of an expanding U.S. economy, corporate profitability may very well
exceed expectations. We believe this is what economic, market and corporate
fundamentals continue to suggest. As a result, we are encouraged by the outlook
for the economy, the stock markets, and the equity portfolio.
MARKET OUTLOOK, FIXED INCOME: The near-term prospects for inflationary problems
remain slight, productivity is gaining, labor costs are contained, and pricing
power is still transitory. The twin deficits -- federal and current account --
will remain challenges into the near term; and we are not optimistic on the
dollar.
Tactically, we are short in duration in the face of improving global economic
fundamentals. We are overweight commercial mortgages, asset-backed securities,
and longer-dated corporate bonds. Valuations are stretched in credit and
mortgage markets; yet alternatives are few as bond managers seek to add
incremental yield in the face of a rising rate environment. In the fixed income
portfolio both the high yield and emerging market targets were increased.
28
<Page>
Portfolio Managers' Report ING EQUITY AND BOND FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS
ENDED NOVEMBER 30, 2003
-----------------------------------------------------------------------------
SINCE INCEPTION
OF CLASS B
1 YEAR 5 YEAR 10 YEAR 05/31/95
------ ------ ------- ---------------
Including Sales Charge:
Class A(1) 5.89% 0.46% 7.05% --
Class B(2) 6.75% 0.72% -- 7.69%
Class C(3) 10.58% 0.98% 6.99% --
Excluding Sales Charge:
Class A 12.35% 1.66% 7.68% --
Class B 11.75% 0.99% -- 7.69%
Class C 11.58% 0.98% 6.99% --
S&P 500 Index 15.13% -0.46% 10.67% 10.23%(4)
Lehman Brothers Aggregate Bond Index 5.18% 6.47% 6.90% 7.19%(4)
Composite Index (60% S&P 500 Index/40%
Lehman Brothers Aggregate Bond Index) 11.33% 2.67% 9.47% 9.37%(4)
S&P Barra Value Index 17.67% 1.43% 10.07% 9.63%(4)
</Table>
The table above illustrates the total return of ING Equity and Bond Fund against
the S&P 500 Index, Lehman Brothers Aggregate Bond Index, Composite Index and the
S&P Barra Value Index. The Indices are unmanaged and have no cash in their
portfolios, impose no sales charges and incur no operating expenses. An investor
cannot invest directly in an index. The Fund's performance is shown both with
and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% and 2%,
respectively, for the 1 year and 5 year returns.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the 1
year return.
(4) Since inception performance for index is shown from 06/01/95.
PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an
investment in equity securities. Credit, interest rate and other risks that
accompany an investment in debt securities. The Fund may invest in foreign
securities. International investing does pose special risks, including currency
fluctuation, economic and political risks not found in investments that are
solely domestic. High yields reflect the higher credit risks associated with
certain lower-rated securities in the Fund's portfolio and in some cases, the
lower market prices for those instruments. High yield securities and securities
of smaller companies may be less liquid and more volatile than other
investments. The use of certain derivatives may also have a leveraging effect,
which may increase the volatility of the Fund. Because the Fund may invest in
other investment companies, you may pay a proportionate share of the expenses of
that other investment company, in addition to the expenses of the Fund.
See accompanying index descriptions on page 32.
29
<Page>
ING REAL ESTATE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: T. Ritson Ferguson, CFA, Managing Director and Chief
Investment Officer, Kenneth D. Campbell, Managing Director, ING Clarion Real
Estate Securities, the Sub-Adviser.
GOAL: The ING Real Estate Fund (the "Fund") seeks total return through
investment in common and preferred stocks of U.S. real estate investment trusts
(REITs) and real estate companies.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class A
shares, excluding sales charges, provided a total return of 18.01% compared to
the Wilshire Real Estate Securities Index which returned 18.99% for the same
period.
PORTFOLIO SPECIFICS: Real estate stock performance has surprised many observers
given the relatively weak fundamentals in many cities around the country
(especially for office and apartment properties). We, however, believe that the
strong total return performance is not inconsistent with the improving outlook
for the economy and the anticipated recovery in real estate fundamentals that is
likely to follow. It is also important to realize that real estate stock
valuations were low by historical standards at the beginning of the year. The
average real estate company's stock was trading at less than 10 times cash
earnings before depreciation. Much of the price appreciation in real estate
stocks this year is attributable to an expansion of the average multiple to 12
times cash earnings before depreciation which is in-line with the average
multiple observed since the mid-1980's.
In an environment of low interest rates and modest expectations for returns to
stocks, real estate has emerged as an increasingly popular investment for
institutional and individual investors alike. Real estate in general, and real
estate securities by extension, offer some of the most compelling total returns
in today's market. Real estate offers a very attractive current return relative
to the yields on bonds. Furthermore, real estate securities offer investors the
potential for principal appreciation in a rising interest rate environment
driven by improving earnings. Bonds, by contrast tend to experience price
depreciation when interest rates rise. Real estate securities look interesting
relative to other stock investments as well given their higher dividends and
more conservative pricing as a multiple of future earnings.
MARKET OUTLOOK: We continue to be optimistic about the return potential of real
estate stocks given the increasingly surprising strength of the economy. In late
November, the Commerce Department raised its estimate of GDP growth during the
third quarter to an astonishing 8.2%. Consumer and business confidence continues
to grow as well. The Conference Board reported that its index of consumer
confidence rose to 91.7, up ten points from October's level. The improving
economy and rising confidence finally seems to be translating to some much
needed job growth. Weekly reported initial jobless claims have been well below
the 400,000 level that many consider the level of a weak economy for much of the
last two months. A strengthening economy and job growth are expected to drive
increased demand for real estate. Given the low levels of new construction over
the last two years for most property types, we expect improved demand to lead to
increasing occupancies and stable-to-increased rents next year for owners of
real estate assets.
We remain constructive about the total return potential for Real Estate
Investment Trusts ("REITs") next year, given the improving fundamentals for real
estate and the still attractive valuations for REITs. As of November 30th, REITs
were: 1) yielding 5.84% (160 basis points higher than the yield on 10-year
Treasury bonds); 2) trading at a 12 multiple of forward earnings (equal to the
average multiple since the mid-80's); and 3) trading at only a modest premium of
3% to our estimates of private market value (or Net Asset Value).
30
<Page>
Portfolio Managers' Report ING REAL ESTATE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
---------------------------------------------------------------------------------------
SINCE INCEPTION SINCE INCEPTION SINCE INCEPTION SINCE INCEPTION
OF CLASS A OF CLASS B OF CLASS C OF CLASS I
1 YEAR 5 YEAR 12/20/02 11/20/02 01/17/03 12/31/96
------ ------ --------------- --------------- --------------- ---------------
Including Sales Charge:
Class A(1) -- -- 25.38% -- -- --
Class B(2) -- -- -- 27.75% -- --
Class C(3) -- -- -- -- 33.71% --
Class I(4) 32.83% 13.57% -- -- -- 10.13%
Excluding Sales Charge:
Class A -- -- 33.03% -- -- --
Class B -- -- -- 31.62% -- --
Class C -- -- -- -- 34.71%
Class I 32.83% 13.57% -- -- -- 10.13%
Wilshire Real Estate Security Index 34.79% 13.44% 32.85%(5) 11.54%(6) 36.85%(7) 9.60%(8)
</Table>
The table above illustrates the total return of ING Real Estate Fund against the
Wilshire Real Estate Security Index. The Index is unmanaged and has no cash in
its portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Reflects deduction of the maximum Class A sales charge of 5.75%.
(2) Reflects deduction of the Class B deferred sales charge of 5% for the since
inception return.
(3) Reflects deduction of the Class C deferred sales charge of 1% for the since
inception return.
(4) Reflects performance of predecessor mutual fund, CRA Realty Shares
portfolio through November 4, 2002, when the reorganization was completed.
(5) Since inception for the index is shown from 01/01/03.
(6) Since inception for the index is shown from 12/01/02.
(7) Since inception for the index is shown from 02/01/03.
(8) Since inception for the index is shown from 01/01/97.
PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an
investment in real estate equities and volatility due to non-diversification of
investments. Subject to risks similar to those associated with the direct
ownership of real estate. The Fund primarily invests in common and preferred
stocks of U.S. real estate investment trusts (REITs) and real estate companies.
Risk of concentration - because the Fund's investments are concentrated in the
real estate industry, the value of the Fund may be subject to greater volatility
than a fund with a portfolio that is less concentrated. These companies are
sensitive to factors such as changes in real estate assets, supply and demand,
and the management skill and credit worthiness of the issuer. REITs may also be
affected by tax and regulatory requirements. The Fund may invest in small- and
mid-sized companies, which may be more susceptible to price swings than larger
companies. Securities of smaller companies trade in lower volumes and may be
less liquid than securities of large, more established companies.
See accompanying index descriptions on page 32.
31
<Page>
INDEX DESCRIPTIONS
THE DOW JONES INDUSTRIAL AVERAGE is a price-weighted average of 30 blue-chip
stocks that are generally the leaders in their industry.
THE FIRST BOSTON CONVERTIBLE INDEX is an index representing the universe of
convertible securities.
THE LEHMAN BROTHERS AGGREGATE BOND INDEX is a widely recognized index of
publicly issued fixed rate U.S. government, Investment grade mortgage-backed and
corporate debt securities.
THE LEHMAN BROTHERS HIGH YIELD BOND INDEX is an unmanaged index that includes
all fixed income securities having a maximum quality rating of Ba1, a minimum
amount outstanding of $100m, and at least 1 year to maturity.
THE MERRILL LYNCH CONVERTIBLE INDEX is a market capitalization-weighted index
including all non-mandatory domestic corporate convertible securities with at
least an overall par of $50 million market value.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE, EX UK, INDEX is a free
float-adjusted market capitalization index that is designed to measure developed
market equity performance in Europe, excluding the UK.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) JAPAN INDEX is a free
float-adjusted market capitalization index that is designed to measure developed
market equity performance in Japan.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) UK INDEX is a free
float-adjusted market capitalization index that is designed to measure developed
market equity performance in the UK.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD INDEX is an unmanaged
index that reflects the stock markets of 22 countries, including the United
States, Europe, Canada, Australia, New Zealand and the Far East - comprising
approximately 1,500 securities - with values expressed in U.S. dollars.
THE NASDAQ 100 FINANCIAL INDEX is a capitalization-weighted index of the 100
largest financial companies, as well as foreign issues, including American
Depositary Receipts, traded on the Nasdaq National Market System and SmallCap
Market.
THE NASDAQ 100 INDEX is a modified capitalization-weighted index of the 100
largest and most active non-financial domestic and international issues listed
on the Nasdaq.
THE NASDAQ COMPOSITE INDEX is a broad-based capitalization-weighted index of all
Nasdaq National Market & SmallCap stocks.
THE RUSSELL 1000 GROWTH INDEX is an index that measures the performance of those
Russell 1000 Index companies with higher price-to-book ratios and higher
forecasted growth values.
THE RUSSELL 1000 VALUE INDEX measures the performance of those Russell 1000
securities with lower price-to-book ratios and lower forecasted growth values.
THE RUSSELL 200 VALUE INDEX measures the performance of those Russell 200
companies with lower price-to-book ratios and lower forecasted growth values.
THE RUSSELL 2000 GROWTH INDEX measures the performance of those Russell-2000
Index companies with higher price-to-book ratios and higher forecasted growth
values.
THE RUSSELL 2000 INDEX consists of the smallest 2,000 companies in the Russell
3000 Index.
THE RUSSELL 3000 INDEX measures the performance of the 3,000 largest U.S.
companies based on total market capitalization.
THE RUSSELL MIDCAP GROWTH INDEX consists of securities with capitalizations
between $450 million and $3.8 billion with greater than average growth
orientation.
THE RUSSELL MIDCAP INDEX measures the performance of the 800 smallest companies
in the Russell 1000 Index.
THE RUSSELL MIDCAP VALUE INDEX is an index that measures the performance of
Russell Midcap companies with lower price-to-book ratios and lower forecasted
growth values.
All indices are unmanaged.
An investor cannot invest directly in an index.
32
<Page>
INDEX DESCRIPTIONS
THE S&P 500 FINANCIALS INDEX is a capitalization-weighted index of all stocks
designed to measure the performance of the financial sector of the S&P Index.
THE S&P 500 INDEX is a capitalization-weighted index of 500 stocks chosen for
market size, liquidity, and industry group representation.
THE S&P BARRA GROWTH INDEX is a capitalization-weighted index of all the stocks
in the S&P 500 Index that have high price-to-book ratios.
THE S&P BARRA VALUE INDEX is a capitalization-weighted index of all the stocks
in the S&P 500 Index that have low price-to-book ratios.
THE S&P MIDCAP 400 INDEX is a capitalization-weighted index that measures the
performance of the mid-range sector of the U.S. stock market.
THE WILSHIRE REAL ESTATE SECURITY INDEX measures the performance of publicly
traded real estate securities, such as Real Estate Investment Trusts (REITs) and
Real Estate Operating Companies (REOCs). The Index is capitalization-weighted.
All indices are unmanaged.
An investor cannot invest directly in an index.
33
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING ING
GROWTH + GROWTH LARGECAP
VALUE OPPORTUNITIES GROWTH
FUND FUND FUND
---------------- ---------------- ----------------
ASSETS:
Investments in securities at value* $ 218,197,203 $ 180,652,748 $ 256,784,008
Short-term investments at amortized cost 1,682,000 790,000 --
Cash 2,416 -- 5,407,790
Cash collateral for securities loaned 58,996,743 -- 59,067,406
Receivables:
Investment securities sold 3,091,880 4,162,542 --
Fund shares sold 21,964 38,354 1,746,811
Dividends and interest 21,228 42,909 100,833
Prepaid expenses 32,602 29,588 35,087
Reimbursement due from manager -- -- 50,007
---------------- ---------------- ----------------
Total assets 282,046,036 185,716,141 323,191,942
---------------- ---------------- ----------------
LIABILITIES:
Payable for investment securities purchased 4,514,092 3,780,200 1,080,197
Payable for fund shares redeemed 375,366 295,950 288,987
Payable upon return of securities loaned 58,996,743 -- 59,067,406
Payable to custodian -- 95,735 --
Payable to affiliates 403,129 269,566 318,600
Payable for trustee fees 4,589 4,148 4,177
Other accrued expenses and liabilities 442,771 347,551 492,113
---------------- ---------------- ----------------
Total liabilities 64,736,690 4,793,150 61,251,480
---------------- ---------------- ----------------
NET ASSETS $ 217,309,346 $ 180,922,991 $ 261,940,462
================ ================ ================
NET ASSETS WERE COMPRISED OF:
Paid-in capital $ 686,983,420 $ 600,068,138 $ 624,462,186
Accumulated net investment loss (2,205,069) (1,232,981) (1,148,134)
Accumulated net realized loss on investments (513,740,691) (456,858,685) (390,513,879)
Net unrealized appreciation of investments 46,271,686 38,946,519 29,140,289
---------------- ---------------- ----------------
NET ASSETS $ 217,309,346 $ 180,922,991 $ 261,940,462
================ ================ ================
* Cost of investment in securities $ 171,925,517 $ 141,706,229 $ 227,643,719
</Table>
See Accompanying Notes to Financial Statements
34
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
ING ING ING
GROWTH + GROWTH LARGECAP
VALUE OPPORTUNITIES GROWTH
FUND FUND FUND
---------------- ---------------- ----------------
CLASS A:
Net Assets $ 48,362,085 $ 49,166,222 $ 74,202,863
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.00
Shares outstanding 4,942,681 3,766,378 4,463,853
Net asset value and redemption price per share $ 9.78 $ 13.05 $ 16.62
Maximum offering price per share (5.75%)(1) $ 10.38 $ 13.85 $ 17.63
CLASS B:
Net Assets $ 116,822,644 $ 54,174,520 $ 101,569,629
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.00
Shares outstanding 12,621,510 4,475,844 6,276,634
Net asset value and redemption price per share(2) $ 9.26 $ 12.10 $ 16.18
Maximum offering price per share $ 9.26 $ 12.10 $ 16.18
CLASS C:
Net Assets $ 51,878,275 $ 25,186,576 $ 50,869,811
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.00
Shares outstanding 5,607,185 2,077,164 3,152,622
Net asset value and redemption price per share(2) $ 9.25 $ 12.13 $ 16.14
Maximum offering price per share $ 9.25 $ 12.13 $ 16.14
CLASS I:
Net Assets n/a $ 52,392,562 $ 27,465,247
Shares authorized n/a unlimited unlimited
Par value n/a $ 0.01 $ 0.00
Shares outstanding n/a 3,874,430 1,604,672
Net asset value and redemption price per share n/a $ 13.52 $ 17.12
Maximum offering price per share n/a $ 13.52 $ 17.12
CLASS Q:
Net Assets $ 246,342 $ 3,111 $ 7,832,912
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.00
Shares outstanding 25,392 240 459,859
Net asset value and redemption price per share $ 9.70 $ 12.96 $ 17.03
Maximum offering price per share $ 9.70 $ 12.96 $ 17.03
</Table>
- ----------
(1) Maximum offering price is computed at 100/94.25 of net asset value. On
purchase of $50,000 or more, the offering price is reduced.
(2) Redemption price per share may be reduced for any applicable contingent
deferred sales charge.
See Accompanying Notes to Financial Statements
35
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING ING ING
MIDCAP SMALLCAP DISCIPLINED FINANCIAL
OPPORTUNITIES OPPORTUNITIES LARGECAP SERVICES
FUND FUND FUND FUND
---------------- ---------------- ---------------- ----------------
ASSETS:
Investments in securities at value* $ 177,162,450 $ 301,775,001 $ 82,533,364 $ 317,791,320
Short-term investments at amortized cost 679,000 7,950,000 432,000 9,772,000
Cash 1,007 -- 380 778
Cash collateral for futures -- -- 16,000 --
Cash collateral for securities loaned 47,739,843 74,561,535 544,335 --
Receivables:
Investment securities sold 2,958,013 -- 8,281,597 35,910
Fund shares sold 103,856 521,509 3,466 --
Dividends and interest 34,304 19,014 142,428 373,463
Variation margin receivable -- -- 275 --
Prepaid expenses 22,535 32,171 34,787 22,473
---------------- ---------------- ---------------- ----------------
Total assets 228,703,354 384,859,230 91,988,632 327,995,944
---------------- ---------------- ---------------- ----------------
LIABILITIES:
Payable for investment securities purchased 3,260,125 516,046 8,474,594 --
Payable for fund shares redeemed 111,372 386,048 149,699 477,956
Payable upon return of securities loaned 47,739,843 74,561,535 544,335 --
Payable to affiliates 301,023 499,713 110,941 355,488
Payable to custodian -- 27,148 -- --
Payable for trustee fees 4,755 3,068 2,665 9,175
Other accrued expenses and liabilities 218,008 362,355 152,124 666,287
---------------- ---------------- ---------------- ----------------
51,635,126 76,355,913 9,434,358 1,508,906
---------------- ---------------- ---------------- ----------------
NET ASSETS $ 177,068,228 $ 308,503,317 $ 82,554,274 $ 326,487,038
================ ================ ================ ================
NET ASSETS WERE COMPRISED OF:
Paid-in capital $ 315,542,409 $ 586,260,314 $ 132,956,519 $ 282,407,314
Undistributed net investment income
(accumulated net investment loss) (1,392,132) (2,684,000) (102,410) 194,694
Accumulated net realized gain (loss)
on investments (177,112,793) (368,454,618) (56,534,913) 1,275,294
Net unrealized appreciation of investments 40,030,744 93,381,621 6,235,078 42,609,736
---------------- ---------------- ---------------- ----------------
NET ASSETS $ 177,068,228 $ 308,503,317 $ 82,554,274 $ 326,487,038
================ ================ ================ ================
* Cost of investments in securities $ 137,131,706 $ 208,393,380 $ 76,300,477 $ 275,181,584
</Table>
See Accompanying Notes to Financial Statements
36
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
ING ING ING ING
MIDCAP SMALLCAP DISCIPLINED FINANCIAL
OPPORTUNITIES OPPORTUNITIES LARGECAP SERVICES
FUND FUND FUND FUND
---------------- ---------------- ---------------- ----------------
CLASS A:
Net Assets $ 49,810,293 $ 124,779,042 $ 5,713,181 $ 193,417,621
Shares authorized unlimited unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.01 $ 0.00
Shares outstanding 4,187,879 5,271,421 684,045 9,285,264
Net asset value and redemption price per share $ 11.89 $ 23.67 $ 8.35 $ 20.83
Maximum offering price per share (5.75%)(1) $ 12.62 $ 25.11 $ 8.86 $ 22.10
CLASS B:
Net Assets $ 47,224,661 $ 100,299,475 $ 34,629,080 $ 133,069,417
Shares authorized unlimited unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.01 $ 0.00
Shares outstanding 4,118,043 4,578,843 4,293,396 6,432,321
Net asset value and redemption price per share(2) $ 11.47 $ 21.90 $ 8.07 $ 20.69
Maximum offering price per share $ 11.47 $ 21.90 $ 8.07 $ 20.69
CLASS C:
Net Assets $ 73,547,411 $ 71,119,330 $ 20,707,737 n/a
Shares authorized unlimited unlimited unlimited n/a
Par value $ 0.01 $ 0.01 $ 0.01 n/a
Shares outstanding 6,444,787 3,253,435 2,567,246 n/a
Net asset value and redemption price per share(2) $ 11.41 $ 21.86 $ 8.07 n/a
Maximum offering price per share $ 11.41 $ 21.86 $ 8.07 n/a
CLASS I:
Net Assets $ 1,600,415 $ 11,512,331 $ 21,504,276
Shares authorized unlimited unlimited unlimited n/a
Par value $ 0.01 $ 0.01 $ 0.01 n/a
Shares outstanding 131,892 482,470 2,532,248 n/a
Net asset value and redemption price per share $ 12.13 $ 23.86 $ 8.49 n/a
Maximum offering price per share $ 12.13 $ 23.86 $ 8.49 n/a
CLASS Q:
Net Assets $ 4,885,448 $ 793,139 n/a n/a
Shares authorized unlimited unlimited n/a n/a
Par value $ 0.01 $ 0.01 n/a n/a
Shares outstanding 407,820 33,360 n/a n/a
Net asset value and redemption price per share $ 11.98 $ 23.78 n/a n/a
Maximum offering price per share $ 11.98 $ 23.78 n/a n/a
</Table>
- ----------
(1) Maximum offering price is computed at 100/94.25 of net asset value. On
purchase of $50,000 or more, the offering price is reduced.
(2) Redemption price per share may be reduced for any applicable contingent
deferred sales charge.
See Accompanying Notes to Financial Statements
37
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING
ING MIDCAP SMALLCAP
MAGNACAP VALUE VALUE
FUND FUND FUND
---------------- ---------------- ----------------
ASSETS:
Investments in securities at value* $ 376,454,952 $ 60,605,364 $ 46,253,503
Short-term investments at amortized cost 4,145,000 -- --
Cash -- 4,045,107 2,299,164
Cash collateral for securities loaned 69,837,027 10,703,414 7,076,010
Receivables:
Investment securities sold -- 508,146 --
Fund shares sold 28,438 1,163,914 998,631
Dividends and interest 944,840 69,393 37,684
Prepaid expenses 62,074 17,260 18,334
Reimbursement due from manager 284 12 678
---------------- ---------------- ----------------
Total assets 451,472,615 77,112,610 56,684,004
---------------- ---------------- ----------------
LIABILITIES:
Payable for investment securities purchased -- 2,184,269 212,969
Payable for fund shares redeemed 1,172,104 122,786 49,260
Payable upon return of securities loaned 69,837,027 10,703,414 7,076,010
Payable to affiliates 375,944 87,274 67,560
Payable to custodian 1,909 -- --
Payable for trustee fees 61,021 1,542 1,264
Other accrued expenses and liabilities 643,822 83,140 77,302
---------------- ---------------- ----------------
Total liabilities 72,091,827 13,182,425 7,484,365
---------------- ---------------- ----------------
NET ASSETS $ 379,380,788 $ 63,930,185 $ 49,199,639
================ ================ ================
NET ASSETS WERE COMPRISED OF:
Paid-in Capital $ 423,495,452 $ 64,311,319 $ 45,281,512
Accumulated net investment loss (443,612) (207,761) (288,888)
Accumulated net realized gain (loss) on investments (73,301,299) (415,158) 1,219,291
Net unrealized appreciation of investments 29,630,247 241,785 2,987,724
---------------- ---------------- ----------------
NET ASSETS $ 379,380,788 $ 63,930,185 $ 49,199,639
================ ================ ================
* Cost of investments in securities $ 346,824,705 $ 60,363,579 $ 43,265,779
</Table>
See Accompanying Notes to Financial Statements
38
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
ING ING
ING MIDCAP SMALLCAP
MAGNACAP VALUE VALUE
FUND FUND FUND
---------------- ---------------- ----------------
CLASS A:
Net Assets $ 306,287,493 $ 26,360,586 $ 19,276,182
Shares authorized 80,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 31,738,577 2,562,693 1,631,024
Net asset value and redemption price per share $ 9.65 $ 10.29 $ 11.82
Maximum offering price per share (5.75%)(1) $ 10.24 $ 10.92 $ 12.54
CLASS B:
Net Assets $ 55,652,527 $ 19,922,875 $ 13,106,228
Shares authorized 80,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 5,965,775 1,950,304 1,119,167
Net asset value and redemption price per share(2) $ 9.33 $ 10.22 $ 11.71
Maximum offering price per share $ 9.33 $ 10.22 $ 11.71
CLASS C:
Net Assets $ 11,421,652 $ 17,043,176 $ 16,437,447
Shares authorized 20,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 1,223,463 1,668,338 1,404,824
Net asset value and redemption price per share(2) $ 9.34 $ 10.22 $ 11.70
Maximum offering price per share $ 9.34 $ 10.22 $ 11.70
CLASS I:
Net Assets $ 7,585 $ 585,968 $ 378,950
Shares authorized 50,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 788 56,637 31,960
Net asset value and redemption price per share $ 9.63 $ 10.35 $ 11.86
Maximum offering price per share $ 9.63 $ 10.35 $ 11.86
CLASS M:
Net Assets $ 6,003,237 n/a n/a
Shares authorized 5,000,000 n/a n/a
Par value $ 0.00 n/a n/a
Shares outstanding 628,209 n/a n/a
Net asset value and redemption price per share(3) $ 9.56 n/a n/a
Maximum offering price per share $ 9.91 n/a n/a
CLASS Q:
Net Assets $ 8,294 $ 17,580 $ 832
Shares authorized 20,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 855 1,707 69
Net asset value and redemption price per share $ 9.70 $ 10.30 $ 11.97
Maximum offering price per share $ 9.70 $ 10.30 $ 11.97
</Table>
- ----------
(1) Maximum offering price is computed at 100/94.25 of net asset value. On
purchase of $50,000 or more, the offering price is reduced.
(2) Redemption price per share may be reduced for any applicable contingent
deferred sales charge.
(3) Maximum offering price is computed at 100/96.50 of net asset value. On
purchases of $50,000 or more, the offering price is reduced.
See Accompanying Notes to Financial Statements
39
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING ING
TAX EFFICIENT ING EQUITY AND REAL
EQUITY CONVERTIBLE BOND ESTATE
FUND FUND FUND FUND
---------------- ---------------- ---------------- ----------------
ASSETS:
Investments in securities at value* $ 32,954,679 $ 214,334,330 $ 73,847,429 $ 163,692,001
Short-term investments at amortized cost 778,000 184,000 5,907,000 --
Cash 1,427 855 24,264 1,710,403
Cash collateral for futures -- -- 3,000 --
Cash collateral for securities loaned 9,104,544 56,440,813 -- 2,353,876
Receivables:
Investment securities sold -- 501,025 402,345 --
Fund shares sold 1,346 168,217 290 26,565
Dividends and interest 30,374 1,198,224 307,609 739,817
Variation margin receivable -- -- 6,937 --
Other assets -- -- 13,000 --
Prepaid expenses 21,717 35,209 24,342 36,031
Reimbursement due from manager 655 -- 4,281 15,199
---------------- ---------------- ---------------- ----------------
Total assets 42,892,742 272,862,673 80,540,497 168,573,892
---------------- ---------------- ---------------- ----------------
LIABILITIES:
Securities sold short 11,550 -- 13,650 --
Payable for investment securities purchased -- 490,000 7,915,227 --
Payable for fund shares redeemed -- 271,822 121,377 54,529
Payable upon return of securities loaned 9,104,544 56,440,813 -- 2,353,876
Payable to affiliates 32,896 288,167 89,131 111,369
Payable for trustee fees 1,890 9,355 988 4,499
Other accrued expenses and liabilities 77,606 280,355 147,032 169,354
---------------- ---------------- ---------------- ----------------
Total liabilities 9,228,486 57,780,512 8,287,405 2,693,627
---------------- ---------------- ---------------- ----------------
NET ASSETS $ 33,664,256 $ 215,082,161 $ 72,253,092 $ 165,880,265
================ ================ ================ ================
NET ASSETS WERE COMPRISED OF:
Paid-in Capital $ 39,546,707 $ 283,323,598 $ 87,087,125 $ 134,104,883
Undistributed net investment income
(accumulated net investment loss) (75,511) 1,598,987 (138,282) 990,279
Accumulated net realized loss on investments (8,808,245) (88,572,366) (18,248,444) (654,196)
Net unrealized appreciation of investments 3,001,305 18,731,942 3,552,693 31,439,299
---------------- ---------------- ---------------- ----------------
NET ASSETS $ 33,664,256 $ 215,082,161 $ 72,253,092 $ 165,880,265
================ ================ ================ ================
* Cost of investment in securities $ 29,956,343 $ 195,602,388 $ 70,298,312 $ 132,518,779
</Table>
See Accompanying Notes to Financial Statements
40
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
ING ING ING
TAX EFFICIENT ING EQUITY AND REAL
EQUITY CONVERTIBLE BOND ESTATE
FUND FUND FUND FUND
---------------- ---------------- ---------------- ----------------
CLASS A:
Net Assets $ 27,782,631 $ 61,767,221 $ 37,400,634 $ 6,146,238
Shares authorized unlimited unlimited unlimited unlimited
Par Value $ 0.001 $ 0.00 $ 0.00 $ 0.00
Shares outstanding 2,864,459 3,463,475 3,080,255 506,153
Net asset value and redemption price per share $ 9.70 $ 17.83 $ 12.14 $ 12.14
Maximum offering price per share (5.75%)(1) $ 10.29 $ 18.92 $ 12.88 $ 12.88
CLASS B:
Net Assets $ 4,956,707 $ 76,760,391 $ 20,325,737 $ 863,352
Shares authorized unlimited unlimited unlimited unlimited
Par Value $ 0.001 $ 0.00 $ 0.00 $ 0.00
Shares outstanding 525,928 3,923,324 1,554,515 70,896
Net asset value and redemption price per share(2) $ 9.42 $ 19.57 $ 13.08 $ 12.18
Maximum offering price per share $ 9.42 $ 19.57 $ 13.08 $ 12.18
CLASS C:
Net Assets $ 924,918 $ 72,767,229 $ 14,193,010 $ 2,250,418
Shares authorized unlimited unlimited unlimited unlimited
Par Value $ 0.001 $ 0.00 $ 0.00 $ 0.00
Shares outstanding 98,785 3,984,445 1,224,186 180,371
Net asset value and redemption price per share(2) $ 9.36 $ 18.26 $ 11.59 $ 12.48
Maximum offering price per share $ 9.36 $ 18.26 $ 11.59 $ 12.48
CLASS Q:
Net Assets n/a $ 3,787,320 $ 333,711 n/a
Shares authorized n/a unlimited unlimited n/a
Par Value n/a $ 0.00 $ 0.00 n/a
Shares outstanding n/a 218,562 27,689 n/a
Net asset value and redemption price per share n/a $ 17.33 $ 12.05 n/a
Maximum offering price per share n/a $ 17.33 $ 12.05 n/a
CLASS I:
Net Assets n/a n/a n/a $ 156,620,257
Shares authorized n/a n/a n/a unlimited
Par Value n/a n/a n/a $ 0.00
Shares outstanding n/a n/a n/a 12,407,295
Net asset value and redemption price per share n/a n/a n/a $ 12.62
Maximum offering price per share n/a n/a n/a $ 12.62
</Table>
- ----------
(1) Maximum offering price is computed at 100/94.25 of net asset value. On
purchase of $50,000 or more, the offering price is reduced.
(2) Redemption price per share may be reduced for any applicable contingent
deferred sales charge.
See Accompanying Notes to Financial Statements
41
<Page>
STATEMENTS OF OPERATIONS for the six months ended November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING ING
GROWTH + GROWTH LARGECAP
VALUE OPPORTUNITIES GROWTH
FUND FUND(1) FUND
---------------- ---------------- ----------------
INVESTMENT INCOME:
Dividends, net of foreign taxes* $ 313,932 $ 480,770 $ 718,103
Interest 18,365 11,694 2,452
Securities loaned income 4,403 -- 3,534
---------------- ---------------- ----------------
Total investment income 336,700 492,464 724,089
---------------- ---------------- ----------------
EXPENSES:
Investment management fees 1,040,823 819,297 804,999
Distribution and service fees:
Class A 70,613 72,389 101,320
Class B 552,250 258,636 420,220
Class C 252,090 122,281 202,677
Class Q 276 4 9,372
Class T -- 587 --
Transfer agent fees:
Class A 32,151 27,750 110,162
Class B 75,361 35,155 155,037
Class C 34,435 16,612 74,625
Class I -- 1,677 19,521
Class Q 113 -- 5,675
Class T -- 93 --
Administrative service fees 260,821 194,167 107,332
Shareholder reporting expense 145,603 97,241 131,129
Registration fees 27,658 31,193 38,945
Professional fees 18,526 16,175 17,313
Custody and accounting fees 17,871 19,464 18,674
Trustee fees 6,405 5,124 4,758
Insurance expense 2,663 2,064 2,052
Miscellaneous expense 4,110 5,536 5,675
---------------- ---------------- ----------------
Total expenses 2,541,769 1,725,445 2,229,486
---------------- ---------------- ----------------
Less:
Net waived and reimbursed fees -- -- 357,263
---------------- ---------------- ----------------
Net expenses 2,541,769 1,725,445 1,872,223
---------------- ---------------- ----------------
Net investment loss (2,205,069) (1,232,981) (1,148,134)
---------------- ---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 26,797,490 12,470,166 36,379,053
Net change in unrealized appreciation (depreciation) of
investments 20,138,742 15,737,281 (3,522,922)
---------------- ---------------- ----------------
Net realized and unrealized gain on investments 46,936,232 28,207,447 32,856,131
---------------- ---------------- ----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 44,731,163 $ 26,974,466 $ 31,707,997
================ ================ ================
*Foreign taxes $ -- $ 1,304 $ 1,224
</Table>
- ----------
(1) Effective June 2, 2003, Class "T" shares converted into the corresponding
Class "A" shares within this Fund.
See Accompanying Notes to Financial Statements
42
<Page>
STATEMENTS OF OPERATIONS for the six months ended November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING ING ING
MIDCAP SMALLCAP DISCIPLINED FINANCIAL
OPPORTUNITIES OPPORTUNITIES LARGECAP SERVICES
FUND FUND FUND FUND
---------------- ---------------- ---------------- ----------------
INVESTMENT INCOME:
Dividends, net of foreign taxes* $ 264,008 $ 388,889 $ 694,079 $ 3,079,076
Interest 15,581 23,493 2,790 57,732
Securities loaned income 4,157 23,831 -- --
Other -- 10,634 -- --
---------------- ---------------- ---------------- ----------------
Total investment income 283,746 446,847 696,869 3,136,808
---------------- ---------------- ---------------- ----------------
EXPENSES:
Investment management fees 865,003 1,416,890 290,040 1,188,455
Distribution and service fees:
Class A 69,580 171,253 9,536 236,448
Class B 220,544 460,443 174,067 653,785
Class C 349,122 333,043 105,838 --
Class Q 5,786 1,015 -- --
Class T -- 92 -- --
Transfer agent fees:
Class A 33,240 89,684 4,165 349,534
Class B 31,590 72,322 22,803 257,729
Class C 49,930 52,349 13,864 --
Class I 80 828 309 --
Class Q 46 72 -- --
Class T -- 14 -- --
Administrative service fees 160,255 296,960 64,858 6,899
Shareholder reporting expense 56,200 111,405 38,765 148,615
Registration fees 38,730 45,363 30,117 21,872
Professional fees 10,689 23,961 8,815 26,619
Custody and accounting fees 10,651 27,172 29,032 28,914
Trustee fees 4,758 8,418 2,928 8,563
Insurance expense 1,960 3,317 861 3,540
Miscellaneous expense 9,388 16,246 3,281 6,254
---------------- ---------------- ---------------- ----------------
Total expenses 1,917,552 3,130,847 799,279 2,937,227
---------------- ---------------- ---------------- ----------------
Less:
Net waived and reimbursed fees 241,674 -- -- --
---------------- ---------------- ---------------- ----------------
Net expenses 1,675,878 3,130,847 799,279 2,937,227
---------------- ---------------- ---------------- ----------------
Net investment income (loss) (1,392,132) (2,684,000) (102,410) 199,581
---------------- ---------------- ---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES CONTRACTS:
Net realized gain on:
Investments 6,670,678 24,630,767 2,885,038 14,537,482
Futures contracts -- -- 50,566 --
---------------- ---------------- ---------------- ----------------
Net realized gain on investments and
futures contracts 6,670,678 24,630,767 2,935,604 14,537,482
---------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation
(depreciation) of investments and futures 21,978,925 52,223,815 4,729,495 23,866,049
---------------- ---------------- ---------------- ----------------
Net realized and unrealized gain on
investments and futures contracts 28,649,603 76,854,582 7,665,099 38,403,531
---------------- ---------------- ---------------- ----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 27,257,471 $ 74,170,582 $ 7,562,689 $ 38,603,112
================ ================ ================ ================
</Table>
See Accompanying Notes to Financial Statements
43
<Page>
STATEMENTS OF OPERATIONS for the six months ended November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING
ING MIDCAP SMALLCAP
MAGNACAP VALUE VALUE
FUND FUND FUND
---------------- ---------------- ----------------
INVESTMENT INCOME:
Dividends, net of foreign taxes* $ 2,971,732 $ 336,463 $ 161,487
Interest 11,206 374 64
Securities loaned income 3,367 2,920 4,300
Other 517 -- --
---------------- ---------------- ----------------
Total investment income 2,986,822 339,757 165,851
---------------- ---------------- ----------------
EXPENSES:
Investment management fees 957,050 236,989 192,969
Distribution and service fees:
Class A 264,143 23,820 18,355
Class B 255,051 75,455 51,723
Class C 44,477 64,240 66,324
Class M 24,507 -- --
Class Q 6,363 20 1
Transfer agent fees:
Class A 174,334 21,426 16,455
Class B 50,499 16,962 11,607
Class C 8,806 14,401 14,842
Class I -- 35 21
Class M 6,470 -- --
Class Q 26 -- --
Administrative service fees 7,137 23,698 19,297
Shareholder reporting expense 91,496 8,173 7,320
Registration fees 32,261 33,665 28,297
Professional fees 20,929 2,997 3,459
Custody and accounting fees 23,968 4,890 3,660
Trustee fees 6,405 549 915
Insurance expense 2,121 353 247
Miscellaneous expense 44,786 777 1,190
---------------- ---------------- ----------------
Total expenses 2,020,829 528,450 436,682
---------------- ---------------- ----------------
Less:
Net waived and reimbursed fees -- 10,265 11,276
---------------- ---------------- ----------------
Net expenses 2,020,829 518,185 425,406
---------------- ---------------- ----------------
Net investment income (loss) 965,993 (178,428) (259,555)
---------------- ---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 2,441,028 2,169,884 4,849,765
Net change in unrealized appreciation of investments 29,639,830 7,740,896 6,386,401
---------------- ---------------- ----------------
Net realized and unrealized gain on investments 32,080,858 9,910,780 11,236,166
---------------- ---------------- ----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 33,046,851 $ 9,732,352 $ 10,976,611
================ ================ ================
*Foreign taxes $ 21,116 $ -- $ --
</Table>
See Accompanying Notes to Financial Statements
44
<Page>
STATEMENTS OF OPERATIONS for the six months ended November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING
TAX EFFICIENT ING EQUITY AND ING
EQUITY CONVERTIBLE BOND REAL ESTATE
FUND FUND FUND(1) FUND
---------------- ---------------- ---------------- ----------------
INVESTMENT INCOME:
Dividends, net of foreign taxes* $ 181,726 $ 929,218 $ 371,942 $ 4,831,300
Interest 5,461 2,657,608 727,600 1,381
Securities loaned income 516 15,801 -- 41
---------------- ---------------- ---------------- ----------------
Total investment income 187,703 3,602,627 1,099,542 4,832,722
---------------- ---------------- ---------------- ----------------
EXPENSES:
Investment management fees 132,649 755,093 270,437 525,060
Distribution and service fees:
Class A 47,441 97,760 62,867 4,531
Class B 25,556 365,992 108,517 1,736
Class C 4,708 342,572 70,628 6,555
Class Q -- 5,612 386 --
Class T -- -- 135 --
Transfer agent fees:
Class A 24,127 56,972 30,795 5,227
Class B 4,549 74,049 18,427 488
Class C 837 69,527 12,017 1,911
Class I -- -- -- 108,985
Class Q -- 1,110 302 1,139
Class T -- -- 32 --
Administrative service fees 16,581 100,677 36,058 75,007
Shareholder reporting expense 7,488 67,710 44,886 9,153
Registration fees 18,722 18,863 32,611 28,060
Professional fees 2,951 14,806 18,227 15,166
Custody and accounting fees 3,843 23,106 18,300 13,029
Trustee fees 366 4,758 2,196 3,242
Insurance expense 318 1,937 907 --
Offering expense -- -- -- 53,425
Miscellaneous expense 584 4,100 2,232 7,310
---------------- ---------------- ---------------- ----------------
Total expenses 290,720 2,004,644 729,960 860,024
---------------- ---------------- ---------------- ----------------
Less:
Net waived and reimbursed fees 27,506 -- 44,790 93,322
---------------- ---------------- ---------------- ----------------
Net expenses 263,214 2,004,644 685,170 766,702
---------------- ---------------- ---------------- ----------------
Net investment income (loss) (75,511) 1,597,983 414,372 4,066,020
---------------- ---------------- ---------------- ----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FOREIGN CURRENCIES AND
FUTURES CONTRACTS:
Net realized gain (loss) on:
Investments 413,540 10,842,481 (3,787,898) 8,309,338
Foreign currencies -- 20,178 12,662 --
---------------- ---------------- ---------------- ----------------
Net realized gain (loss) on investments
and foreign currencies 413,540 10,862,659 (3,775,236) 8,309,338
---------------- ---------------- ---------------- ----------------
Net change in unrealized appreciation
(depreciation) on investments, foreign
currencies and futures contracts 3,434,194 9,065,929 6,961,526 12,853,556
---------------- ---------------- ---------------- ----------------
Net realized and unrealized gain on
investments and foreign currencies and
futures contracts 3,847,734 19,928,588 3,186,290 21,162,894
---------------- ---------------- ---------------- ----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,772,223 $ 21,526,571 $ 3,600,662 $ 25,228,914
================ ================ ================ ================
*Foreign taxes $ 160 $ -- $ -- $ --
</Table>
- ----------
(1) Effective June 2, 2003, Class "T" shares converted into the corresponding
Class "A" shares within this fund.
See Accompanying Notes to Financial Statements
45
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING GROWTH + VALUE FUND
------------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
---------------- ----------------
FROM OPERATIONS:
Net investment loss $ (2,205,069) $ (4,743,710)
Net realized gain (loss) on investments 26,797,490 (96,541,901)
Net change in unrealized appreciation of investments 20,138,742 21,655,719
---------------- ----------------
Net increase (decrease) in net assets resulting from operations 44,731,163 (79,629,892)
---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 11,669,506 22,504,824
Cost of shares redeemed (45,475,916) (111,119,568)
---------------- ----------------
Net decrease in net assets resulting from capital share transactions (33,806,410) (88,614,744)
---------------- ----------------
Net increase (decrease) in net assets 10,924,753 (168,244,636)
NET ASSETS:
Beginning of period 206,384,593 374,629,229
---------------- ----------------
End of period $ 217,309,346 $ 206,384,593
================ ================
Accumulated net investment loss at end of period $ (2,205,069) $ --
================ ================
</Table>
See Accompanying Notes to Financial Statements
46
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING GROWTH OPPORTUNITIES FUND ING LARGECAP GROWTH FUND
------------------------------------ ------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
---------------- ---------------- ---------------- ----------------
FROM OPERATIONS:
Net investment loss $ (1,232,981) $ (3,315,002) $ (1,148,134) $ (2,412,261)
Net realized gain (loss) on investments 12,470,166 (55,971,035) 36,379,053 (67,406,141)
Net change in unrealized appreciation (depreciation)
of investments 15,737,281 7,993,868 (3,522,922) 27,230,077
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from
operations 26,974,466 (51,292,169) 31,707,997 (42,588,325)
---------------- ---------------- ---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 15,722,902 14,322,951 86,443,482 37,811,932
Cost of shares redeemed (38,603,520) (79,882,586) (29,575,547) (101,232,282)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from
capital share transactions (22,880,618) (65,559,635) 56,867,935 (63,420,350)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets 4,093,848 (116,851,804) 88,575,932 (106,008,675)
NET ASSETS:
Beginning of period 176,829,143 293,680,947 173,364,530 279,373,205
---------------- ---------------- ---------------- ----------------
End of period $ 180,922,991 $ 176,829,143 $ 261,940,462 $ 173,364,530
================ ================ ================ ================
Accumulated net investment loss at end of period $ (1,232,981) $ -- $ (1,148,134) $ --
================ ================ ================ ================
</Table>
See Accompanying Notes to Financial Statements
47
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING MIDCAP OPPORTUNITIES FUND ING SMALLCAP OPPORTUNITIES FUND
------------------------------------ ------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
---------------- ---------------- ---------------- ----------------
FROM OPERATIONS:
Net investment loss $ (1,392,132) $ (2,858,315) $ (2,684,000) $ (6,705,515)
Net realized gain (loss) on investments 6,670,678 (35,686,206) 24,630,767 (136,228,953)
Net change in unrealized appreciation of investments 21,978,925 3,498,927 52,223,815 23,893,365
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from
operations 27,257,471 (35,045,594) 74,170,582 (119,041,103)
---------------- ---------------- ---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 14,546,813 19,074,655 31,904,431 64,613,733
Cost of shares redeemed (35,388,499) (98,427,376) (76,206,193) (144,373,057)
---------------- ---------------- ---------------- ----------------
Net decrease in net assets resulting from
capital share transactions (20,841,686) (79,352,721) (44,301,762) (79,759,324)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets 6,415,785 (114,398,315) 29,868,820 (198,800,427)
NET ASSETS:
Beginning of period 170,652,443 285,050,758 278,634,497 477,434,924
---------------- ---------------- ---------------- ----------------
End of period $ 177,068,228 $ 170,652,443 $ 308,503,317 $ 278,634,497
================ ================ ================ ================
Accumulated net investment loss at end of period $ (1,392,132) $ -- $ (2,684,000) $ --
================ ================ ================ ================
</Table>
See Accompanying Notes to Financial Statements
48
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING DISCIPLINED LARGECAP FUND ING FINANCIAL SERVICES FUND
------------------------------------ ------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
---------------- ---------------- ---------------- ----------------
FROM OPERATIONS:
Net investment income (loss) $ (102,410) $ (113,825) $ 199,581 $ 702,701
Net realized gain (loss) on investments 2,935,604 (18,751,052) 14,537,482 (725,878)
Net change in unrealized appreciation (depreciation)
of investments 4,729,495 4,799,759 23,866,049 (34,505,470)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from
operations 7,562,689 (14,065,118) 38,603,112 (34,528,647)
---------------- ---------------- ---------------- ----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A -- -- (697,897) (904,133)
Net realized gains:
Class A -- -- (7,418,744) (11,242,235)
Class B -- -- (5,117,566) (7,757,255)
---------------- ---------------- ---------------- ----------------
Total distributions -- -- (13,234,207) (19,903,623)
---------------- ---------------- ---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 1,986,085 10,784,368 7,878,902 26,466,948
Dividends reinvested -- -- 9,519,261 13,242,563
---------------- ---------------- ---------------- ----------------
1,986,085 10,784,368 17,398,163 39,709,511
Cost of shares redeemed (9,584,920) (35,260,799) (25,254,691) (78,411,061)
---------------- ---------------- ---------------- ----------------
Net decrease in net assets resulting from
capital share transactions (7,598,835) (24,476,431) (7,856,528) (38,701,550)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets (36,146) (38,541,549) 17,512,377 (93,133,820)
NET ASSETS:
Beginning of period 82,590,420 121,131,969 308,974,661 402,108,481
---------------- ---------------- ---------------- ----------------
End of period $ 82,554,274 $ 82,590,420 $ 326,487,038 $ 308,974,661
================ ================ ================ ================
Undistributed net investment income
(accumulated net investment loss) at end of
period $ (102,410) $ -- $ 194,694 $ 693,010
================ ================ ================ ================
</Table>
See Accompanying Notes to Financial Statements
49
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING MAGNACAP FUND
------------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
---------------- ----------------
FROM OPERATIONS:
Net investment income $ 965,993 $ 1,260,957
Net realized gain (loss) on investments 2,441,028 (73,313,713)
Net change in unrealized appreciation (depreciation) of investments 29,639,830 28,047,677
---------------- ----------------
Net increase (decrease) in net assets resulting from operations 33,046,851 (44,005,079)
---------------- ----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (2,057,070) (541,544)
Class I (103) --
Class M (4,890) --
Class Q (42,794) (37,713)
---------------- ----------------
Total distributions (2,104,857) (579,257)
---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 9,985,775 19,818,980
Net proceeds from shares issued in merger 137,589,132 --
Dividends reinvested 1,816,429 509,567
---------------- ----------------
149,391,336 20,328,547
Cost of shares redeemed (31,706,330) (66,540,583)
---------------- ----------------
Net increase (decrease) in net assets resulting from capital share
transactions 117,685,006 (46,212,036)
---------------- ----------------
Net increase (decrease) in net assets 148,627,000 (90,796,372)
NET ASSETS:
Beginning of period 230,753,788 321,550,160
---------------- ----------------
End of period $ 379,380,788 $ 230,753,788
================ ================
Undistributed net investment income (accumulated net investment loss)
at end of period $ (443,612) $ 695,252
================ ================
</Table>
See Accompanying Notes to Financial Statements
50
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING MIDCAP VALUE FUND ING SMALLCAP VALUE FUND
------------------------------------ ------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
---------------- ---------------- ---------------- ----------------
FROM OPERATIONS:
Net investment loss $ (178,428) $ (167,900) $ (259,555) $ (290,497)
Net realized gain (loss) on investments 2,169,884 (2,585,042) 4,849,765 (808,791)
Net change in unrealized depreciation of investments 7,740,896 (7,038,519) 6,386,401 (3,280,630)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from
operations 9,732,352 (9,791,461) 10,976,611 (4,379,918)
---------------- ---------------- ---------------- ----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A -- (66,920) -- (53,921)
Class B -- (10,431) -- (269)
Class C -- (8,620) -- (8,732)
Class I -- (1,546) -- (2,331)
Class Q -- (105) -- --
Net realized gains:
Class A -- (197,711) (1,073,901) (119,158)
Class B -- (153,548) (775,481) (76,523)
Class C -- (125,926) (949,961) (90,831)
Class I -- (2,253) (22,291) (2,504)
Class Q -- (180) (48) (6)
---------------- ---------------- ---------------- ----------------
Total distributions -- (567,240) (2,821,682) (354,275)
---------------- ---------------- ---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 20,782,333 20,390,316 11,954,395 16,776,369
Dividends reinvested -- 452,894 2,135,018 266,141
---------------- ---------------- ---------------- ----------------
20,782,333 20,843,210 14,089,413 17,042,510
Cost of shares redeemed (6,061,371) (17,802,172) (5,021,693) (15,157,416)
---------------- ---------------- ---------------- ----------------
Net increase in net assets resulting from
capital share transactions 14,720,962 3,041,038 9,067,720 1,885,094
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets 24,453,314 (7,317,663) 17,222,649 (2,849,099)
NET ASSETS:
Beginning of period 39,476,871 46,794,534 31,976,990 34,826,089
---------------- ---------------- ---------------- ----------------
End of period $ 63,930,185 $ 39,476,871 $ 49,199,639 $ 31,976,990
================ ================ ================ ================
Accumulated net investment loss at end of period $ (207,761) $ (29,333) $ (288,888) $ (29,333)
================ ================ ================ ================
</Table>
See Accompanying Notes to Financial Statements
51
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING TAX EFFICIENT EQUITY FUND ING CONVERTIBLE FUND
------------------------------------ ------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
---------------- ---------------- ---------------- ----------------
FROM OPERATIONS:
Net investment income (loss) $ (75,511) $ (51,846) $ 1,597,983 $ 4,069,736
Net realized gain (loss) on investments 413,540 (7,613,046) 10,862,659 (1,549,700)
Net change in unrealized appreciation (depreciation)
of investments 3,434,194 1,166,471 9,065,929 8,112,313
---------------- ---------------- ---------------- ----------------
Net decrease in net assets resulting from operations 3,772,223 (6,498,421) 21,526,571 10,632,349
---------------- ---------------- ---------------- ----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A -- -- (626,105) (1,038,306)
Class B -- -- (641,476) (1,007,242)
Class C -- -- (655,824) (1,039,451)
Class Q -- -- (45,508) (129,825)
---------------- ---------------- ---------------- ----------------
Total distributions -- -- (1,968,913) (3,214,824)
---------------- ---------------- ---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 167,567 591,224 24,550,447 19,562,889
Dividends reinvested -- -- 1,239,363 2,040,333
---------------- ---------------- ---------------- ----------------
167,567 591,224 25,789,810 21,603,222
Cost of shares redeemed (2,816,376) (6,371,872) (24,079,352) (74,420,958)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets resulting from
capital share transactions (2,648,809) (5,780,648) 1,710,458 (52,817,736)
---------------- ---------------- ---------------- ----------------
Net increase (decrease) in net assets 1,123,414 (12,279,069) 21,268,116 (45,400,211)
NET ASSETS:
Beginning of period 32,540,842 44,819,911 193,814,045 239,214,256
---------------- ---------------- ---------------- ----------------
End of period $ 33,664,256 $ 32,540,842 $ 215,082,161 $ 193,814,045
================ ================ ================ ================
Undistributed net investment income
(accumulated net investment loss) at end of period $ (75,511) $ -- $ 1,598,987 $ 1,969,917
================ ================ ================ ================
</Table>
See Accompanying Notes to Financial Statements
52
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING EQUITY AND BOND FUND
------------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
---------------- ----------------
FROM OPERATIONS:
Net investment income $ 414,372 $ 2,052,389
Net realized gain (loss) on investments (3,775,236) (10,770,814)
Net change in unrealized
appreciation (depreciation)
of investments 6,961,526 4,912,801
---------------- ----------------
Net increase (decrease) in
net assets resulting from operations 3,600,662 (3,805,624)
---------------- ----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (559,656) (1,077,960)
Class B (274,265) (368,267)
Class C (203,493) (273,453)
Class I -- --
Class Q (4,429) (4,292)
Class T -- (62,879)
Net realized gains:
Class A -- --
Class B -- --
Class C -- --
Class I -- --
In excess of net investment income:
Class I -- --
---------------- ----------------
Total distributions (1,041,843) (1,786,851)
---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 11,429,548 13,090,514
Dividends reinvested 764,038 1,413,761
---------------- ----------------
12,193,586 14,504,275
Cost of shares redeemed (14,781,669) (48,110,001)
---------------- ----------------
Net increase (decrease) in
net assets resulting from
capital share transactions (2,588,083) (33,605,726)
---------------- ----------------
Net increase (decrease) in net assets (29,264) (39,198,201)
NET ASSETS:
Beginning of period 72,282,356 111,480,557
---------------- ----------------
End of period $ 72,253,092 $ 72,282,356
================ ================
Undistributed net investment income
(accumulated net investment loss)
at end of period $ (138,282) $ 489,189
================ ================
<Caption>
ING REAL ESTATE FUND
--------------------------------------------------------
SIX MONTHS SEVEN MONTHS YEAR
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, OCTOBER 31,
2003 2003 2002
---------------- ---------------- ----------------
FROM OPERATIONS:
Net investment income $ 4,066,020 $ 2,676,211 $ 3,936,443
Net realized gain (loss) on investments 8,309,338 3,228,787 2,174,768
Net change in unrealized
appreciation (depreciation)
of investments 12,853,556 11,405,743 (193,441)
---------------- ---------------- ----------------
Net increase (decrease) in
net assets resulting from operations 25,228,914 17,310,741 5,917,770
---------------- ---------------- ----------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (101,023) (3,557) --
Class B (7,971) (1,521) --
Class C (26,247) (74) --
Class I (4,349,925) (2,053,561) (3,936,443)
Class Q -- -- --
Class T -- -- --
Net realized gains:
Class A (242,273) -- --
Class B (30,332) -- --
Class C (87,401) -- --
Class I (6,232,489) -- --
In excess of net investment income:
Class I -- -- (1,294,844)
---------------- ---------------- ----------------
Total distributions (11,077,661) (2,058,713) (5,231,287)
---------------- ---------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 28,954,953 23,221,408 31,057,798
Dividends reinvested 7,548,958 1,220,646 3,749,980
---------------- ---------------- ----------------
36,503,911 24,442,054 34,807,778
Cost of shares redeemed (11,708,035) (10,091,863) (14,351,398)
---------------- ---------------- ----------------
Net increase (decrease) in
net assets resulting from
capital share transactions 24,795,876 14,350,191 20,456,380
---------------- ---------------- ----------------
Net increase (decrease) in net assets 38,947,129 29,602,219 21,142,863
NET ASSETS:
Beginning of period 126,933,136 97,330,917 76,188,054
---------------- ---------------- ----------------
End of period $ 165,880,265 $ 126,933,136 $ 97,330,917
================ ================ ================
Undistributed net investment income
(accumulated net investment loss)
at end of period $ 990,279 $ 1,409,425 $ 214,000
================ ================ ================
</Table>
See Accompanying Notes to Financial Statements
53
<Page>
ING GROWTH + VALUE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
--------------------------------------------------------
SEVEN
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
-------------- ------------ ------------ ------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.88 9.96 13.88 24.91
Income (loss) from investment operations:
Net investment income (loss) $ (0.08) (0.13) (0.15) (0.13)
Net realized and unrealized gain (loss)
on investments $ 1.98 (1.95) (3.77) (8.68)
Total from investment operations $ 1.90 (2.08) (3.92) (8.81)
Less distributions from:
Net investment income $ -- -- -- 2.16
Tax return of capital $ -- -- -- 0.06
Total distributions $ -- -- -- 2.22
Net asset value, end of period $ 9.78 7.88 9.96 13.88
TOTAL RETURN(2) % 24.11 (20.88) (28.24) (38.02)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 48,362 51,218 90,290 160,251
Ratios to average net assets:
Net expenses(3) % 1.90 1.87 1.78 1.77
Net investment income (loss)(3) % (1.58) (1.42) (1.18) (1.52)
Portfolio turnover rate % 84 294 255 95
<Caption>
CLASS A
------------------------
YEAR ENDED OCTOBER 31,
------------------------
2000 1999
---------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period 19.76 10.44
Income (loss) from investment operations:
Net investment income (loss) (0.20) (0.17)
Net realized and unrealized gain (loss)
on investments 7.81 9.49
Total from investment operations 7.61 9.32
Less distributions from:
Net investment income 2.46 --
Tax return of capital -- --
Total distributions 2.46 --
Net asset value, end of period 24.91 19.76
TOTAL RETURN(2) 40.18 89.27
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) 257,601 81,225
Ratios to average net assets:
Net expenses(3) 1.57 1.69
Net investment income (loss)(3) (1.22) (1.30)
Portfolio turnover rate 163 197
<Caption>
CLASS B
--------------------------------------------------------
SEVEN
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
-------------- ------------ ------------ ------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.48 9.52 13.36 24.17
Income (loss) from investment operations:
Net investment income (loss) $ (0.10) (0.18) (0.23) (0.19)
Net realized and unrealized gain (loss)
on investments $ 1.88 (1.86) (3.61) (8.40)
Total from investment operations $ 1.78 (2.04) (3.84) (8.59)
Less distributions from:
Net investment income $ -- -- -- 2.16
Tax return of capital $ -- -- -- 0.06
Total distributions $ -- -- -- 2.22
Net asset value, end of period $ 9.26 7.48 9.52 13.36
TOTAL RETURN(2) % 23.80 (21.43) (28.74) (38.31)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 116,823 105,173 185,950 326,139
Ratios to average net assets:
Net expenses(3) % 2.60 2.57 2.48 2.47
Net investment income (loss)(3) % (2.28) (2.12) (1.88) (2.22)
Portfolio turnover rate % 84 294 255 95
<Caption>
CLASS B
------------------------
YEAR ENDED OCTOBER 31,
------------------------
2000 1999
---------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period 19.34 10.29
Income (loss) from investment operations:
Net investment income (loss) (0.36) (0.27)
Net realized and unrealized gain (loss)
on investments 7.65 9.32
Total from investment operations 7.29 9.05
Less distributions from:
Net investment income 2.46 --
Tax return of capital -- --
Total distributions 2.46 --
Net asset value, end of period 24.17 19.34
TOTAL RETURN(2) 39.33 87.95
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) 507,282 227,227
Ratios to average net assets:
Net expenses(3) 2.27 2.39
Net investment income (loss)(3) (1.92) (2.00)
Portfolio turnover rate 163 197
</Table>
(1) The Fund changed its fiscal year-end to May 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
See Accompanying Notes to Financial Statements.
54
<Page>
ING GROWTH + VALUE FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
--------------------------------------------------------
SEVEN
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
-------------- ------------ ------------ ------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.47 9.51 13.35 24.16
Income (loss) from investment operations:
Net investment income (loss) $ (0.10) (0.20) (0.25) (0.19)
Net realized and unrealized gain (loss)
on investments $ 1.88 (1.84) (3.59) (8.40)
Total from investment operations $ 1.78 (2.04) (3.84) (8.59)
Less distributions from:
Net investment income $ -- -- -- 2.16
Tax return of capital $ -- -- -- 0.06
Total distributions $ -- -- -- 2.22
Net asset value, end of period $ 9.25 7.47 9.51 13.35
TOTAL RETURN(2) % 23.83 (21.45) (28.76) (38.33)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 51,878 49,783 97,993 183,037
Ratios to average net assets:
Net expenses(3) % 2.60 2.57 2.48 2.47
Net investment income (loss)(3) % (2.28) (2.11) (1.88) (2.22)
Portfolio turnover rate % 84 294 255 95
<Caption>
CLASS C
------------------------
YEAR ENDED OCTOBER 31,
------------------------
2000 1999
---------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period 19.33 10.29
Income (loss) from investment operations:
Net investment income (loss) (0.33) (0.26)
Net realized and unrealized gain (loss)
on investments 7.62 9.30
Total from investment operations 7.29 9.04
Less distributions from:
Net investment income 2.46 --
Tax return of capital -- --
Total distributions 2.46 --
Net asset value, end of period 24.16 19.33
TOTAL RETURN(2) 39.35 87.85
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) 280,484 84,391
Ratios to average net assets:
Net expenses(3) 2.27 2.40
Net investment income (loss)(3) (1.92) (2.01)
Portfolio turnover rate 163 197
</Table>
(1) The Fund changed its fiscal year-end to May 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
See Accompanying Notes to Financial Statements.
55
<Page>
ING GROWTH OPPORTUNITIES FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
--------------------------------------------------------
FIVE
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
-------------- ------------ ------------ ------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.16 13.29 18.63 25.45
Income (loss) from investment operations:
Net investment income (loss) $ (0.08) (0.20) (0.27) (0.11)
Net realized and unrealized gain (loss)
on investments $ 1.97 (1.93) (5.07) (6.71)
Total from investment operations $ 1.89 (2.13) (5.34) (6.82)
Less distributions from:
Net realized gains from investments $ -- -- -- --
Total distributions $ -- -- -- --
Net asset value, end of period $ 13.05 11.16 13.29 18.63
TOTAL RETURN(2) % 16.94 (16.03) (28.66) (26.80)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 49,166 49,944 89,619 158,754
Ratios to average net assets:
Net expenses(3) % 1.82 1.85 1.80 1.73
Net investment income (loss)(3) % (1.24) (1.46) (1.62) (1.34)
Portfolio turnover rate % 44 355 473 217
<Caption>
CLASS A
------------------------
YEAR ENDED OCTOBER 31,
------------------------
2000 1999
---------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period 33.17 26.06
Income (loss) from investment operations:
Net investment income (loss) (0.21) (0.15)
Net realized and unrealized gain (loss)
on investments (6.02) 20.10
Total from investment operations (6.23) 19.95
Less distributions from:
Net realized gains from investments 1.49 12.84
Total distributions 1.49 12.84
Net asset value, end of period 25.45 33.17
TOTAL RETURN(2) (19.11) 93.26
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) 206,590 101,260
Ratios to average net assets:
Net expenses(3) 1.46 1.39
Net investment income (loss)(3) (0.86) (0.98)
Portfolio turnover rate 326 286
<Caption>
CLASS B
--------------------------------------------------------
FIVE
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
-------------- ------------ ------------ ------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.39 12.45 17.58 24.09
Income (loss) from investment operations:
Net investment income (loss) $ (0.11) (0.25) (0.37) (0.17)
Net realized and unrealized gain (loss)
on investments $ 1.82 (1.81) (4.76) (6.34)
Total from investment operations $ 1.71 (2.06) (5.13) (6.51)
Less distributions from:
Net realized gains from investments $ -- -- -- --
Total distributions $ -- -- -- --
Net asset value, end of period $ 12.10 10.39 12.45 17.58
TOTAL RETURN(2) % 16.46 (16.55) (29.18) (27.02)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 54,175 50,620 88,274 162,106
Ratios to average net assets:
Net expenses(3) % 2.52 2.55 2.50 2.43
Net investment income (loss)(3) % (1.95) (2.15) (2.32) (2.04)
Portfolio turnover rate % 44 355 473 217
<Caption>
CLASS B
------------------------
YEAR ENDED OCTOBER 31,
------------------------
2000 1999
---------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period 31.70 25.46
Income (loss) from investment operations:
Net investment income (loss) (0.35) (0.18)
Net realized and unrealized gain (loss)
on investments (5.77) 19.26
Total from investment operations (6.12) 19.08
Less distributions from:
Net realized gains from investments 1.49 12.84
Total distributions 1.49 12.84
Net asset value, end of period 24.09 31.70
TOTAL RETURN(2) (19.66) 91.84
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) 224,299 88,305
Ratios to average net assets:
Net expenses(3) 2.16 2.10
Net investment income (loss)(3) (1.56) (1.69)
Portfolio turnover rate 326 286
</Table>
(1) The Fund changed its fiscal year-end to May 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
See Accompanying Notes to Financial Statements.
56
<Page>
ING GROWTH OPPORTUNITIES FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
--------------------------------------------------------
FIVE
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
-------------- ------------ ------------ ------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.41 12.48 17.62 24.13
Income (loss) from investment operations:
Net investment income (loss) $ (0.11) (0.26) (0.41) (0.17)
Net realized and unrealized gain (loss)
on investments $ 1.83 (1.81) (4.73) (6.34)
Total from investment operations $ 1.72 (2.07) (5.14) (6.51)
Less distributions from:
Net realized gains from investments $ -- -- -- --
Total distributions $ -- -- -- --
Net asset value, end of period $ 12.13 10.41 12.48 17.62
TOTAL RETURN(2) % 16.52 (16.59) (29.17) (26.98)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 25,187 24,015 45,901 93,537
Ratioses to average net assets:
Net expenses(3) % 2.52 2.55 2.50 2.43
Net investment income (loss)(3) % (1.95) (2.15) (2.32) (2.04)
Portfolio turnover rate % 44 355 473 217
<Caption>
CLASS C
------------------------
YEAR ENDED OCTOBER 31,
------------------------
2000 1999
---------- ----------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period 31.75 25.48
Income (loss) from investment operations:
Net investment income (loss) (0.31) (0.10)
Net realized and unrealized gain (loss)
on investments (5.82) 19.21
Total from investment operations (6.13) 19.11
Less distributions from:
Net realized gains from investments 1.49 12.84
Total distributions 1.49 12.84
Net asset value, end of period 24.13 31.75
TOTAL RETURN(2) (19.65) 91.90
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) 130,389 21,006
Ratioses to average net assets:
Net expenses(3) 2.16 2.10
Net investment income (loss)(3) (1.56) (1.69)
Portfolio turnover rate 326 286
</Table>
(1) The Fund changed its fiscal year-end to May 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than on year.
See Accompanying Notes to Financial Statements.
57
<Page>
ING LARGECAP GROWTH FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
----------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- -----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 14.33 16.59 24.40 43.12
Income (loss) from investment operations:
Net investment income (loss) $ (0.05) (0.15) (0.18) (0.20)
Net realized and unrealized gain (loss)
on investments $ 2.34 (2.11) (7.63) (18.05)
Total from investment operations $ 2.29 (2.26) (7.81) (18.25)
Less distributions from:
Net investment income $ -- -- 0.00* --
Net realized gain from investments $ -- -- -- 0.47
Total distributions $ -- -- 0.00* 0.47
Net asset value, end of period $ 16.62 14.33 16.59 24.40
TOTAL RETURN(3) % 15.90 (13.62) (31.99) (42.67)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 74,203 40,941 65,642 161,824
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.45 1.60 1.58 1.47
Gross expenses prior to expense
reimbursement(4) % 1.78 1.76 1.58 1.47
Net investment income (loss) after expense
reimbursement(4)(5) % (0.77) (0.96) (1.12) (0.78)
Portfolio turnover rate % 129 291 536 331
<Caption>
CLASS A
----------------------------------------
THREE
YEAR MONTHS YEAR
ENDED ENDED ENDED
JUNE 30, JUNE 30, MARCH 31,
2000 1999(2) 1999
- -----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 28.09 24.94 15.73
Income (loss) from investment operations:
Net investment income (loss) $ (0.22) (0.02) (0.08)
Net realized and unrealized gain (loss)
on investments $ 15.63 3.17 9.77
Total from investment operations $ 15.41 3.15 9.69
Less distributions from:
Net investment income $ -- -- --
Net realized gain from investments $ 0.38 -- 0.48
Total distributions $ 0.38 -- 0.48
Net asset value, end of period $ 43.12 28.09 24.94
TOTAL RETURN(3) % 55.35 12.63 63.06
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 186,261 30,108 12,445
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.36 1.43 1.59
Gross expenses prior to expense
reimbursement(4) % 1.36 1.45 2.24
Net investment income (loss) after expense
reimbursement(4)(5) % (0.87) (0.56) (0.65)
Portfolio turnover rate % 139 27 253
</Table>
<Table>
<Caption>
CLASS B
----------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- -----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 13.99 16.30 24.14 42.94
Income (loss) from investment operations:
Net investment income (loss) $ (0.09) (0.24) (0.43) (0.41)
Net realized and unrealized gain (loss)
on investments $ 2.28 (2.07) (7.41) (17.92)
Total from investment operations $ 2.19 (2.31) (7.84) (18.33)
Less distributions from:
Net investment income $ -- -- -- --
Net realized gain from investments $ -- -- -- 0.47
Total distributions $ -- -- -- 0.47
Net asset value, end of period $ 16.18 13.99 16.30 24.14
TOTAL RETURN(3) % 15.57 (14.17) (32.48) (43.04)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 101,570 72,575 116,738 224,572
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.10 2.25 2.23 2.12
Gross expenses prior to expense
reimbursement(4) % 2.43 2.41 2.23 2.12
Net investment income (loss) after
expense reimbursement(4)(5) % (1.42) (1.61) (1.77) (1.43)
Portfolio turnover rate % 129 291 536 331
<Caption>
CLASS B
----------------------------------------
THREE
YEAR MONTHS YEAR
ENDED ENDED ENDED
JUNE 30, JUNE 30, MARCH 31,
2000 1999(2) 1999
- -----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 28.15 25.04 15.64
Income (loss) from investment operations:
Net investment income (loss) $ (0.39) (0.05) (0.08)
Net realized and unrealized gain (loss)
on investments $ 15.56 3.16 9.71
Total from investment operations $ 15.17 3.11 9.63
Less distributions from:
Net investment income $ -- -- --
Net realized gain from investments $ 0.38 -- 0.23
Total distributions $ 0.38 -- 0.23
Net asset value, end of period $ 42.94 28.15 25.04
TOTAL RETURN(3) % 55.37 12.42 62.28
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 333,256 49,057 20,039
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.01 2.08 2.24
Gross expenses prior to expense
reimbursement(4) % 2.01 2.10 2.89
Net investment income (loss) after
expense reimbursement(4)(5) % (1.52) (1.21) (1.28)
Portfolio turnover rate % 139 27 253
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Effective May 24, 1999, ING investments, LLC became the Investment Adviser
of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
* Amount represents less than $0.01 per share.
See Accompanying Notes to Financial Statements.
58
<Page>
ING LARGECAP GROWTH FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
----------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- -----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 13.95 16.25 24.07 42.82
Income (loss) from investment operations:
Net investment income (loss) $ (0.09) (0.25) (0.48) (0.39)
Net realized and unrealized gain (loss)
on investments $ 2.28 (2.05) (7.34) (17.89)
Total from investment operations $ 2.19 (2.30) (7.82) (18.28)
Less distributions from:
Net realized gain from investments $ -- -- -- 0.47
Total distributions $ -- -- -- 0.47
Net asset value, end of period $ 16.14 13.95 16.25 24.07
TOTAL RETURN(3) % 15.86 (14.15) (32.49) (43.04)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 50,870 31,516 54,048 117,222
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.10 2.25 2.23 2.12
Gross expenses prior to expense
reimbursement(4) % 2.43 2.41 2.23 2.12
Net investment income (loss) after
expense reimbursement(4)(5) % (1.42) (1.61) (1.77) (1.43)
Portfolio turnover rate % 129 291 536 331
<Caption>
CLASS C
----------------------------------------
THREE
YEAR MONTHS YEAR
ENDED ENDED ENDED
JUNE 30, JUNE 30, MARCH 31,
2000 1999(2) 1999
- -----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 28.07 24.97 15.63
Income (loss) from investment operations:
Net investment income (loss) $ (0.35) (0.06) (0.07)
Net realized and unrealized gain (loss)
on investments $ 15.48 3.16 9.65
Total from investment operations $ 15.13 3.10 9.58
Less distributions from:
Net realized gain from investments $ 0.38 -- 0.24
Total distributions $ 0.38 -- 0.24
Net asset value, end of period $ 42.82 28.07 24.97
TOTAL RETURN(3) % 54.38 12.41 61.97
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 152,682 17,755 8,004
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.01 2.08 2.25
Gross expenses prior to expense
reimbursement(4) % 2.01 2.10 2.90
Net investment income (loss) after
expense reimbursement(4)(5) % (1.52) (1.21) (1.26)
Portfolio turnover rate % 139 27 253
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Effective May 24, 1999, ING investments, LLC became the Investment Adviser
of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
See Accompanying Notes to Financial Statements.
59
<Page>
ING MidCap Opportunities Fund
(Unaudited) Financial HighlightsSelected data for a share of beneficial interest
outstanding throughout each period.
<Table>
<Caption>
CLASS A
------------------------------------------------------------
FIVE
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.12 11.11 14.58 19.12
Income (loss) from investment operations:
Net investment income (loss) $ (0.06) (0.12) (0.17)* (0.11)
Net realized and unrealized gain (loss)
on investments $ 1.83 (0.87) (3.30) (4.43)
Total from investment operations $ 1.77 (0.99) (3.47) (4.54)
Less distributions from:
Net realized gain from investments $ -- -- -- --
Total distributions $ -- -- -- --
Net asset value, end of period $ 11.89 10.12 11.11 14.58
TOTAL RETURN(3) % 17.49 (8.91) (23.80) (23.74)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 49,810 44,010 68,106 24,265
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.50 1.50 1.77 2.06
Gross expenses prior to expense
reimbursement(4) % 1.78 1.83 1.99 2.06
Net investment income (loss) after expense
reimbursement(4)(5) % (1.17) (1.15) (1.45) (1.52)
Portfolio turnover rate % 37 345 399 182
<Caption>
CLASS A
-------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------
2000 1999 1998(2)
-------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 21.29 12.96 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.15) (0.09) (0.03)
Net realized and unrealized gain (loss)
on investments $ 0.16 12.01 2.99
Total from investment operations $ 0.01 11.92 2.96
Less distributions from:
Net realized gain from investments $ 2.18 3.59 --
Total distributions $ 2.18 3.59 --
Net asset value, end of period $ 19.12 21.29 12.96
TOTAL RETURN(3) % (0.35) 103.24 29.60
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 25,742 6,291 610
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.66 1.74 1.80
Gross expenses prior to expense
reimbursement(4) % 1.66 1.74 2.42
Net investment income (loss) after expense
reimbursement(4)(5) % (0.96) (1.34) (1.10)
Portfolio turnover rate % 188 201 61
</Table>
<Table>
<Caption>
CLASS B
------------------------------------------------------------
FIVE
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.80 10.83 14.30 18.79
Income (loss) from investment operations:
Net investment income (loss) $ (0.10) (0.20) (0.25)* (0.14)
Net realized and unrealized gain (loss)
on investments $ 1.77 (0.83) (3.22) (4.35)
Total from investment operations $ 1.67 (1.03) (3.47) (4.49)
Less distributions from:
Net realized gain from investments $ -- -- -- --
Total distributions $ -- -- -- --
Net asset value, end of period $ 11.47 9.80 10.83 14.30
TOTAL RETURN(3) % 17.04 (9.51) (24.27) (23.90)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 47,225 43,183 69,621 28,448
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.20 2.20 2.47 2.76
Gross expenses prior to expense
reimbursement(4) % 2.48 2.53 2.69 2.76
Net investment income (loss) after
expense reimbursement(4)(5) % (1.87) (1.85) (2.15) (2.22)
Portfolio turnover rate % 37 345 399 182
<Caption>
CLASS B
-------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------
2000 1999 1998(2)
-------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 21.12 12.97 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.24) (0.07) (0.03)
Net realized and unrealized gain (loss)
on investments $ 0.09 11.81 3.00
Total from investment operations $ (0.15) 11.74 2.97
Less distributions from:
Net realized gain from investments $ 2.18 3.59 --
Total distributions $ 2.18 3.59 --
Net asset value, end of period $ 18.79 21.12 12.97
TOTAL RETURN(3) % (1.13) 101.73 29.70
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 35,551 8,252 140
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.36 2.40 2.50
Gross expenses prior to expense
reimbursement(4) % 2.36 2.40 3.27
Net investment income (loss) after
expense reimbursement(4)(5) % (1.66) (2.00) (2.05)
Portfolio turnover rate % 188 201 61
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) The Fund commenced operations on August 20, 1998.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Accompanying Notes to Financial Statements.
60
<Page>
ING MIDCAP OPPORTUNITIES FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
------------------------------------------------------------
FIVE
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.75 10.77 14.24 18.72
Income (loss) from investment operations:
Net investment income (loss) $ (0.10) (0.19) (0.25)* (0.14)
Net realized and unrealized gain (loss)
on investments $ 1.76 (0.83) (3.22) (4.34)
Total from investment operations $ 1.66 (1.02) (3.47) (4.48)
Less distributions from:
Net realized gain from investments $ -- -- -- --
Total distributions $ -- -- -- --
Net asset value, end of period $ 11.41 9.75 10.77 14.24
TOTAL RETURN(3) % 17.03 (9.47) (24.37) (23.93)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 73,547 67,730 100,888 18,901
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.20 2.20 2.47 2.76
Gross expenses prior to expense
reimbursement(4) % 2.48 2.53 2.69 2.76
Net investment income (loss) after expense
reimbursement(4)(5) % (1.87) (1.85) (2.15) (2.22)
Portfolio turnover rate % 37 345 399 182
<Caption>
CLASS C
-------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------
2000 1999 1998(2)
-------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 21.03 12.96 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.24) (0.07) (0.04)
Net realized and unrealized gain (loss)
on investments $ 0.11 11.73 3.00
Total from investment operations $ (0.13) 11.66 2.96
Less distributions from:
Net realized gain from investments $ 2.18 3.59 --
Total distributions $ 2.18 3.59 --
Net asset value, end of period $ 18.72 21.03 12.96
TOTAL RETURN(3) % (1.03) 101.16 29.60
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 25,939 4,560 87
Ratios to average net assets:
Net expenses after expense reimbursement(4) % 2.36 2.36 2.50
Gross expenses prior to expense
reimbursement(4) % 2.36 2.36 3.22
Net investment income (loss) after expense
reimbursement(4)(5) % (1.66) (1.98) (2.04)
Portfolio turnover rate % 188 201 61
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) The Fund commenced operations on August 20, 1998.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has aggreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary (expenses) subject to possible
recoupment by ING Investments, LLC within three years.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Accompanying Notes to Financial Statements.
61
<Page>
ING SMALLCAP OPPORTUNITIES FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
------------------------------------------------------------
FIVE
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 18.16 24.04 38.78 47.17
Income (loss) from investment operations:
Net investment income (loss) $ (0.18) (0.35) (0.51)* (0.23)
Net realized and unrealized gain (loss)
on investments $ 5.69 (5.53) (13.24) (8.16)
Total from investment operations $ 5.51 (5.88) (13.75) (8.39)
Less distributions from:
Net realized gain from investments $ -- -- 0.99 --
Total distributions $ -- -- 0.99 --
Net asset value, end of period $ 23.67 18.16 24.04 38.78
TOTAL RETURN(2) % 30.34 (24.46) (35.86) (17.79)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 124,779 118,570 183,810 159,641
Ratios to average net assets:
Net expenses(3) % 1.83 1.88 1.81 1.69
Net investment income (loss)(3) % (1.69) (1.80) (1.70) (1.41)
Portfolio turnover rate % 35 357 427 104
<Caption>
CLASS A
-------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------
2000 1999 1998
-------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 59.35 29.00 27.77
Income (loss) from investment operations:
Net investment income (loss) $ (0.54) (0.32) (0.27)
Net realized and unrealized gain (loss)
on investments $ (2.74) 38.23 2.23
Total from investment operations $ (3.28) 37.91 1.96
Less distributions from:
Net realized gain from investments $ 8.90 7.56 0.73
Total distributions $ 8.90 7.56 0.73
Net asset value, end of period $ 47.17 59.35 29.00
TOTAL RETURN(2) % (6.04) 146.94 7.59
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 177,286 123,377 45,461
Ratios to average net assets:
Net expenses(3) % 1.45 1.43 1.47
Net investment income (loss)(3) % (1.05) (1.21) (0.70)
Portfolio turnover rate % 134 223 257
</Table>
<Table>
<Caption>
CLASS B
------------------------------------------------------------
FIVE
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 16.87 22.48 36.60 44.64
Income (loss) from investment operations:
Net investment income (loss) $ (0.21) (0.48) (0.68)* (0.33)
Net realized and unrealized gain (loss)
on investments $ 5.24 (5.13) (12.45) (7.71)
Total from investment operations $ 5.03 (5.61) (13.13) (8.04)
Less distributions from:
Net realized gain from investments $ -- -- 0.99 --
Total distributions $ -- -- 0.99 --
Net asset value, end of period $ 21.90 16.87 22.48 36.60
TOTAL RETURN(2) % 29.82 (24.96) (36.31) (18.01)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 100,299 85,465 154,899 206,968
Ratios to average net assets:
Net expenses(3) % 2.53 2.58 2.51 2.39
Net investment income (loss)(3) % (2.08) (2.50) (2.40) (2.11)
Portfolio turnover rate % 35 357 427 104
<Caption>
CLASS B
-------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------
2000 1999 1998
-------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 57.06 28.26 27.27
Income (loss) from investment operations:
Net investment income (loss) $ (0.96) (0.60) (0.48)
Net realized and unrealized gain (loss)
on investments $ (2.56) 36.96 2.20
Total from investment operations $ (3.52) 36.36 1.72
Less distributions from:
Net realized gain from investments $ 8.90 7.56 0.73
Total distributions $ 8.90 7.56 0.73
Net asset value, end of period $ 44.64 57.06 28.26
TOTAL RETURN(2) % (6.71) 145.24 6.84
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 266,348 264,677 124,065
Ratios to average net assets:
Net expenses(3) % 2.15 2.15 2.18
Net investment income (loss)(3) % (1.75) (1.93) (1.43)
Portfolio turnover rate % 134 223 257
</Table>
(1) The Fund changed its fiscal year-end to May 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Accompanying Notes to Financial Statements.
62
<Page>
ING SMALLCAP OPPORTUNITIES FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
------------------------------------------------------------
FIVE
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- -------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 16.83 22.44 36.53 44.54
Income (loss) from investment operations:
Net investment income (loss) $ (0.21) (0.49) (0.67)* (0.33)
Net realized and unrealized gain (loss)
on investments $ 5.24 (5.12) (12.43) (7.68)
Total from investment operations $ 5.03 (5.61) (13.10) (8.01)
Less distributions from:
Net realized gain from investments $ -- -- 0.99 --
Total distributions $ -- -- 0.99 --
Net asset value, end of period $ 21.86 16.83 22.44 36.53
TOTAL RETURN(2) % 29.89 (25.00) (36.30) (17.98)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 71,119 63,406 119,498 78,658
Ratios to average net assets:
Net expenses(3) % 2.53 2.58 2.51 2.39
Net investment income (loss)(3) % (2.07) (2.50) (2.40) (2.11)
Portfolio turnover rate % 35 357 427 104
<Caption>
CLASS C
-------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------
2000 1999 1998
-------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 56.98 28.24 27.26
Income (loss) from investment operations:
Net investment income (loss) $ (0.97) (0.53) (0.55)
Net realized and unrealized gain (loss)
on investments $ (2.57) 36.83 2.26
Total from investment operations $ (3.54) 36.30 1.71
Less distributions from:
Net realized gain from investments $ 8.90 7.56 0.73
Total distributions $ 8.90 7.56 0.73
Net asset value, end of period $ 44.54 56.98 28.24
TOTAL RETURN(2) % (6.76) 145.12 6.81
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 104,094 72,581 29,746
Ratios to average net assets:
Net expenses(3) % 2.15 2.18 2.22
Net investment income (loss)(3) % (1.75) (1.96) (1.45)
Portfolio turnover rate % 134 223 257
</Table>
(1) The Fund changed its fiscal year-end to May 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Accompanying Notes to Financial Statements.
63
<Page>
ING DISCIPLINED LARGECAP FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
---------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR SEVEN MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, OCTOBER 31, OCTOBER 30,
2003 2003 2002 2001(1) 2000 1999(2)
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.61 8.43 9.87 11.17 11.14 10.00
Income (loss) from investment operations:
Net investment income (loss) $ 0.01 0.03 0.03 (0.01) -- 0.01
Net realized and unrealized gain (loss)
on investments $ 0.73 (0.85) (1.47) (1.29) 0.18 1.13
Total from investment operations $ 0.74 (0.82) (1.44) (1.30) 0.18 1.14
Less distributions from:
Net realized gain from investments $ -- -- -- -- 0.15 --
Total distributions $ -- -- -- -- 0.15 --
Net asset value, end of period $ 8.35 7.61 8.43 9.87 11.17 11.14
TOTAL RETURN(3) % 9.72 (9.73) (14.59) (11.64) 1.55 11.40
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 5,713 7,205 9,883 12,748 23,571 27,091
Ratios to average net assets:
Net expenses after expense reimbursement(4) % 1.56 1.54 1.33 1.45 1.37 1.29(5)
Gross expenses prior to expense
reimbursement(4) % 1.56 1.54 1.33 1.45 1.37 1.56
Net investment income (loss) after expense
reimbursement(4) % 0.12 0.32 0.12 (0.13) 0.01 0.23(5)
Portfolio turnover rate % 132 106 149 26 57 26
<Caption>
CLASS B
---------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR SEVEN MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, OCTOBER 31, OCTOBER 31,
2003 2003 2002 2001(1) 2000 1999(2)
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.37 8.23 9.70 11.04 11.09 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.02) (0.03) (0.07) (0.05) (0.08) (0.02)
Net realized and unrealized gain (loss)
on investments $ 0.72 (0.83) (1.40) (1.29) 0.18 1.11
Total from investment operations $ 0.70 (0.86) (1.47) (1.34) 0.10 1.09
Less distributions from:
Net realized gain from investments $ -- -- -- -- 0.15 --
Total distributions $ -- -- -- -- 0.15 --
Net asset value, end of period $ 8.07 7.37 8.23 9.70 11.04 11.09
TOTAL RETURN(3) % 9.50 (10.45) (15.15) (12.14) 0.83 10.90
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 34,629 34,358 53,185 76,726 94,028 99,249
Ratios to average net assets:
Net expenses after expense reimbursement(4) $ 2.26 2.24 2.03 2.15 2.07 1.99(5)
Gross expenses prior to expense
reimbursement(4) % 2.26 2.24 2.03 2.15 2.07 2.29
Net investment income (loss) after expense
reimbursement(4) % (0.58) (0.43) (0.58) (0.83) (0.70) (0.49)(5)
Portfolio turnover rate % 132 106 149 26 57 26
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) The Fund commenced operations on December 30, 1998.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) Expenses calculated net of taxes and advisor reimbursement.
See Accompanying Notes to Financial Statements.
64
<Page>
ING DISCIPLINED LARGECAP FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
---------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR SEVEN MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, OCTOBER 31, OCTOBER 31,
2003 2003 2002 2001(1) 2000 1999(2)
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.37 8.23 9.70 11.05 11.09 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.02) (0.04) (0.09) (0.05) (0.08) (0.02)
Net realized and unrealized gain (loss)
on investments $ 0.72 (0.82) (1.38) (1.30) 0.19 1.11
Total from investment operations $ 0.70 (0.86) (1.47) (1.35) 0.11 1.09
Less distributions from:
Net realized gain from investments $ -- -- -- -- 0.15 --
Total distributions $ -- -- -- -- 0.15 --
Net asset value, end of period $ 8.07 7.37 8.23 9.70 11.05 11.09
TOTAL RETURN(3) % 9.50 (10.45) (15.15) (12.12) 0.92 10.90
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 20,708 21,478 36,486 66,252 88,449 75,941
Ratios to average net assets:
Net expenses after expense reimbursement(4) % 2.26 2.24 2.03 2.15 2.07 1.99(5)
Gross expenses prior to expense
reimbursement(4) % 2.26 2.24 2.03 2.15 2.07 2.27
Net investment income (loss) after expense
reimbursement(4) % (0.58) (0.43) (0.58) (0.83) (0.70) (0.49)(5)
Portfolio turnover rate % 132 106 149 26 57 26
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) The Fund commenced operations on December 30, 1998.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) Expenses calculated net of taxes and advisor reimbursement.
See Accompanying Notes to Financial Statements.
65
<Page>
ING FINANCIAL SERVICES FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
---------------------------------------------------------
ELEVEN
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- ----------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 19.24 22.11 23.36 16.42
Income (loss) from investment operations:
Net investment income (loss) $ 0.05 0.12 0.14 0.31
Net realized and unrealized gain (loss)
on investments $ 2.44 (1.78) 1.29 7.11
Total from investment operations $ 2.49 (1.66) 1.43 7.42
Less distributions from:
Net investment income $ 0.08 0.09 0.33 0.33
Net realized gain from investments $ 0.82 1.12 2.35 0.15
Total distributions $ 0.90 1.21 2.68 0.48
Net asset value, end of period $ 20.83 19.24 22.11 23.36
TOTAL RETURN(3) % 13.06 (6.98) 7.05 46.01
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (millions) $ 193 182 231 252
Ratios to average net assets:
Expenses(4) % 1.52 1.52 1.48 1.42
Net investment income (loss)(4) % 0.43 0.54 0.54 1.48
Portfolio turnover rate % 22 19 43 39
<Caption>
CLASS A
----------------------------------------
SIX
YEAR YEAR YEAR
ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30,
2000 1999(2) 1998(2)
- -----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 24.38 27.52 25.87
Income (loss) from investment operations:
Net investment income (loss) $ 0.32 0.29 0.11
Net realized and unrealized gain (loss)
on investments $ (5.30) (2.70) 1.54
Total from investment operations $ (4.98) (2.41) 1.65
Less distributions from:
Net investment income $ 0.25 0.18 --
Net realized gain from investments $ 2.73 0.55 --
Total distributions $ 2.98 0.73 --
Net asset value, end of period $ 16.42 24.38 27.52
TOTAL RETURN(3) % (22.44) (8.61) 6.38
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (millions) $ 210 403 549
Ratios to average net assets:
Expenses(4) % 1.41 1.39 1.20
Net investment income (loss)(4) % 1.46 1.09 0.94
Portfolio turnover rate % 10 29 2
</Table>
<Table>
<Caption>
CLASS B
---------------------------------------------------------
ELEVEN
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31,
2003 2003 2002 2001(1)
- ----------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 19.12 22.03 23.28 16.35
Income (loss) from investment operations:
Net investment income (loss) $ (0.03) (0.07) (0.04) 0.15
Net realized and unrealized gain (loss)
on investments $ 2.42 (1.72) 1.29 7.12
Total from investment operations $ 2.39 (1.79) 1.25 7.27
Less distributions from:
Net investment income $ -- -- 0.15 0.19
Net realized gain from investments $ 0.82 1.12 2.35 0.15
Total distributions $ 0.82 1.12 2.50 0.34
Net asset value, end of period $ 20.69 19.12 22.03 23.28
TOTAL RETURN(3) % 12.62 (7.66) 6.22 45.01
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (millions) $ 133 127 171 183
Ratios to average net assets:
Expenses(4) % 2.27 2.27 2.23 2.17
Net investment income (loss)(4) % (0.32) (0.21) (0.21) 0.73
Portfolio turnover rate % 22 19 43 39
<Caption>
CLASS B
----------------------------------------
SIX
YEAR YEAR YEAR
ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30,
2000 1999(2) 1998(2)
- -----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 24.21 27.40 25.85
Income (loss) from investment operations:
Net investment income (loss) $ 0.22 0.08 0.01
Net realized and unrealized gain (loss)
on investments $ (5.32) (2.66) 1.54
Total from investment operations $ (5.10) (2.58) 1.55
Less distributions from:
Net investment income $ 0.03 0.06 --
Net realized gain from investments $ 2.73 0.55 --
Total distributions $ 2.76 0.61 --
Net asset value, end of period $ 16.35 24.21 27.40
TOTAL RETURN(3) % (23.00) (9.31) 6.00
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (millions) $ 148 343 360
Ratios to average net assets:
Expenses(4) % 2.16 2.14 1.95
Net investment income (loss)(4) % 0.71 0.34 0.19
Portfolio turnover rate % 10 29 2
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Effective June 30, 1998, the Financial Services Fund changed its year end
to June 30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
See Accompanying Notes to Financial Statements.
66
<Page>
ING MAGNACAP FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
---------------------------------------------------------------------------------
ELEVEN
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED YEAR ENDED JUNE 30,
NOVEMBER 30, MAY 31, MAY 31, MAY 31, ------------------------
2003 2003 2002 2001(1) 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.82 10.11 13.54 15.84 17.69 17.07
Income (loss) from investment operations:
Net investment income (loss) $ 0.04 0.06 0.07 0.05 0.07 0.07
Net realized and unrealized gain (loss)
on investments $ 0.87 (1.32) (1.53) (0.38) (0.08) 2.37
Total from investment operations $ 0.91 (1.26) (1.46) (0.33) (0.01) 2.44
Less distributions from:
Net investment income $ 0.08 0.03 0.07 0.09 0.05 0.04
Net realized gain from investments $ -- -- 1.90 1.88 1.79 1.78
Total distributions $ 0.08 0.03 1.97 1.97 1.84 1.82
Net asset value, end of period $ 9.65 8.82 10.11 13.54 15.84 17.69
TOTAL RETURN(2) % 10.38 (12.46) (10.96) (2.77) (0.36) 15.93
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 306,287 156,902 211,602 277,722 303,864 368,508
Ratios to average net assets:
Expenses(3) % 1.45 1.45 1.34 1.31 1.29 1.35
Net investment income (loss)(3) % 0.97 0.73 0.59 0.33 0.41 0.41
Portfolio turnover rate % 23 110 75 92 26 48
</Table>
<Table>
<Caption>
CLASS B
---------------------------------------------------------------------------------
ELEVEN
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED YEAR ENDED JUNE 30,
NOVEMBER 30, MAY 31, MAY 31, MAY 31, ------------------------
2003 2003 2002 2001(1) 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.48 9.75 13.14 15.44 17.36 16.86
Income (loss) from investment operations:
Net investment income (loss) $ 0.01 0.00* (0.02) (0.01) (0.05) (0.04)
Net realized and unrealized gain (loss)
on investments $ 0.84 (1.27) (1.47) (0.41) (0.08) 2.32
Total from investment operations $ 0.85 (1.27) (1.49) (0.42) (0.13) 2.28
Less distributions from:
Net investment income $ -- -- -- -- -- --
Net realized gain from investments $ -- -- 1.90 1.88 1.79 1.78
Total distributions $ -- -- 1.90 1.88 1.79 1.78
Net asset value, end of period $ 9.33 8.48 9.75 13.14 15.44 17.36
TOTAL RETURN(2) % 10.02 (13.03) (11.61) (3.40) (1.11) 15.12
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 55,653 50,677 79,685 112,286 87,167 116,227
Ratios to average net assets:
Expenses(3) % 2.15 2.15 2.04 2.01 1.99 2.05
Net investment income (loss)(3) % 0.23 0.03 (0.11) (0.37) (0.29) (0.29)
Portfolio turnover rate % 23 110 75 92 26 48
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
* Amount represents less than $0.01 per share.
See Accompanying Notes to Financial Statements.
67
<Page>
ING MAGNACAP FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
---------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS YEAR JUNE 1,
ENDED ENDED ENDED ENDED ENDED 1999(2) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30,
2003 2003 2002 2001(1) 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.48 9.76 13.14 15.44 17.37 16.69
Income (loss) from investment operations:
Net investment income (loss) $ 0.01 0.00* (0.01) (0.01) (0.10) --
Net realized and unrealized gain (loss)
on investments $ 0.85 (1.28) (1.47) (0.41) (0.04) 0.68
Total from investment operations $ 0.86 (1.28) (1.48) (0.42) (0.14) 0.68
Less distributions from:
Net investment income $ -- -- -- -- -- --
Net realized gain from investments $ -- -- 1.90 1.88 1.79 --
Total distributions $ -- -- 1.90 1.88 1.79 --
Net asset value, end of period $ 9.34 8.48 9.76 13.14 15.44 17.37
TOTAL RETURN(3) % 10.14 (13.11) (11.53) (3.41) (1.17) 4.07
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 11,422 8,291 9,693 10,887 3,660 601
Ratios to average net assets:
Expenses(4) % 2.15 2.15 2.04 2.01 1.99 1.12
Net investment income (loss)(4) % 0.25 0.03 (0.11) (0.37) (0.29) 0.42
Portfolio turnover rate % 23 110 75 92 26 48
</Table>
<Table>
<Caption>
CLASS M
---------------------------------------------------------------------------------
ELEVEN
SIX MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED YEAR ENDED JUNE 30,
NOVEMBER 30, MAY 31, MAY 31, MAY 31, ------------------------
2003 2003 2002 2001(1) 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.68 9.96 13.36 15.64 17.51 16.95
Income (loss) from investment operations:
Net investment income (loss) $ 0.02 0.03 0.02 -- (0.01) (0.01)
Net realized and unrealized gain (loss)
on investments $ 0.87 (1.31) (1.50) (0.39) (0.06) 2.35
Total from investment operations $ 0.89 (1.28) (1.48) (0.39) (0.07) 2.34
Less distributions from:
Net investment income $ 0.01 -- 0.02 0.01 0.01 --
Net realized gain from investments $ -- -- 1.90 1.88 1.79 1.78
Total distributions $ 0.01 -- 1.92 1.89 1.80 1.78
Net asset value, end of period $ 9.56 8.68 9.96 13.36 15.64 17.51
TOTAL RETURN(3) % 10.22 (12.85) (11.30) (3.21) (0.71) 15.41
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 6,003 7,445 12,074 17,440 13,050 16,351
Ratios to average net assets:
Expenses(4) % 1.90 1.90 1.79 1.76 1.74 1.80
Net investment income (loss)(4) % 0.46 0.28 0.14 (0.12) (0.04) (0.04)
Portfolio turnover rate % 23 110 75 92 26 48
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Commencement of offering of shares.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
* Amount represents less than $0.01 per share.
See Accompanying Notes to Financial Statements.
68
<Page>
ING MIDCAP VALUE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
---------------------------------------------
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31,
2003 2003 2002(1)
------------ ------------ -------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.36 10.28 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.02) 0.00* 0.00*
Net realized and unrealized gain (loss)
on investments $ 1.95 (1.77) 0.28
Total from investment operations $ 1.93 (1.77) 0.28
Less distributions from:
Net investment income $ -- 0.04 --
Net realized gain from investments $ -- 0.11 --
Total distributions $ -- 0.15 --
Net asset value, end of period $ 10.29 8.36 10.28
TOTAL RETURN(3) % 23.09 (16.94) 2.80
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 26,361 15,026 25,325
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 1.75 1.75 1.61
Gross expenses prior to expense
reimbursement(4) % 1.80 2.17 3.05
Net investment income (loss) after expense
reimbursement(4)(5) % (0.32) (0.10) 0.04
Portfolio turnover rate % 49 72 13
<Caption>
CLASS B
---------------------------------------------
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31,
2003 2003 2002(2)
------------ ------------ -------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.34 10.27 9.87
Income (loss) from investment operations:
Net investment income (loss) $ (0.04) (0.06) (0.01)
Net realized and unrealized gain (loss)
on investments $ 1.92 (1.75) 0.41
Total from investment operations $ 1.88 (1.81) 0.40
Less distributions from:
Net investment income $ -- 0.01 --
Net realized gain from investments $ -- 0.11 --
Total distributions $ -- 0.12 --
Net asset value, end of period $ 10.22 8.34 10.27
TOTAL RETURN(3) % 22.54 (17.40) 4.05
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 19,923 12,205 11,656
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 2.50 2.50 2.36
Gross expenses prior to expense
reimbursement(4) % 2.55 2.92 3.80
Net investment income (loss) after expense
reimbursement(4)(5) % (1.07) (0.82) (0.71)
Portfolio turnover rate % 99 72 13
<Caption>
CLASS C
---------------------------------------------
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31,
2003 2003 2002(2)
------------ ------------ -------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.34 10.26 9.87
Income (loss) from investment operations:
Net investment income (loss) $ (0.04) (0.05) (0.01)
Net realized and unrealized gain (loss)
on investments $ 1.92 (1.75) 0.40
Total from investment operations $ 1.88 (1.80) 0.39
Less distributions from:
Net investment income $ -- 0.01 --
Net realized gain from investments $ -- 0.11 --
Total distributions $ -- 0.12 --
Net asset value, end of period $ 10.22 8.34 10.26
TOTAL RETURN(3) % 22.54 (17.32) 3.95
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 17,043 12,034 9,731
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 2.50 2.50 2.36
Gross expenses prior to expense
reimbursement(4) % 2.55 2.92 3.80
Net investment income (loss) after expense
reimbursement(4)(5) % (1.06) (0.81) (0.71)
Portfolio turnover rate % 49 72 13
</Table>
(1) The Fund commenced operations on February 1, 2002.
(2) Class B and Class C commenced offering shares on February 4, 2002.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
* Amount represents less than $0.01 per share.
See Accompanying Notes to Financial Statements.
69
<Page>
ING SMALLCAP VALUE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
---------------------------------------------
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31,
2003 2003 2002(1)
------------ ------------ -------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.44 10.62 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.04) (0.05) (0.01)
Net realized and unrealized gain (loss)
on investments $ 3.16 (1.00) 0.63
Total from investment operations $ 3.12 (1.05) 0.62
Less distributions from:
Net investment income $ -- 0.04 --
Net realized gain from investments $ 0.74 0.09 --
Total distributions $ 0.74 0.13 --
Net asset value, end of period $ 11.82 9.44 10.62
TOTAL RETURN(3) % 33.52 (9.83) 6.20
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 19,276 12,280 18,435
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 1.75 1.75 1.62
Gross expenses prior to expense
reimbursement(4) % 1.80 2.17 3.65
Net investment income (loss) after expense
reimbursement(4)(5) % (0.89) (0.54) (0.39)
Portfolio turnover rate % 38 54 12
<Caption>
CLASS B
---------------------------------------------
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31,
2003 2003 2002(2)
------------ ------------ -------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.39 10.60 9.85
Income (loss) from investment operations:
Net investment income (loss) $ (0.08) (0.11) (0.02)
Net realized and unrealized gain (loss)
on investments $ 3.14 (1.01) 0.77
Total from investment operations $ 3.06 (1.12) 0.75
Less distributions from:
Net investment income $ -- -- --
Net realized gain from investments $ 0.74 0.09 --
Total distributions $ 0.74 0.09 --
Net asset value, end of period $ 11.71 9.39 10.60
TOTAL RETURN(3) % 33.05 (10.53) 7.61
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 13,106 8,233 7,889
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 2.50 2.50 2.37
Gross expenses prior to expense
reimbursement(4) % 2.55 2.92 4.40
Net investment income (loss) after expense
reimbursement(4)(5) % (1.63) (1.29) (1.14)
Portfolio turnover rate % 76 54 12
<Caption>
CLASS C
---------------------------------------------
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31,
2003 2003 2002(6)
------------ ------------ -------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.38 10.60 9.76
Income (loss) from investment operations:
Net investment income (loss) $ (0.08) (0.10) (0.01)
Net realized and unrealized gain (loss)
on investments $ 3.14 (1.02) 0.85
Total from investment operations $ 3.06 (1.12) 0.84
Less distributions from:
Net investment income $ -- 0.01 --
Net realized gain from investments $ 0.74 0.09 --
Total distributions $ 0.74 0.10 --
Net asset value, end of period $ 11.70 9.38 10.60
TOTAL RETURN(3) % 33.09 (10.55) 8.61
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 16,437 11,241 8,468
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 2.50 2.50 2.37
Gross expenses prior to expense
reimbursement(4) % 2.55 2.92 4.40
Net investment income (loss) after expense
reimbursement(4)(5) % (1.64) (1.28) (1.14)
Portfolio turnover rate % 38 54 12
</Table>
(1) The Fund commenced operations on February 1, 2002.
(2) Class B and Class C commenced offering shares on February 4, 2002.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
(6) Class C commenced offering of shares on February 7, 2002.
* Amount represents less than $0.01 per share.
See Accompanying Notes to Financial Statements.
70
<Page>
ING TAX EFFICIENT EQUITY FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR YEAR SEVEN MONTHS YEAR ENDED
ENDED ENDED ENDED ENDED OCTOBER 31,
NOVEMBER 30, MAY 31, MAY 31, MAY 31, ----------------
2003 2003 2002 2001(1) 2000 1999(2)
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.65 9.97 11.52 12.37 11.99 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.02) 0.00* -- 0.02 0.05 0.04
Net realized and unrealized gain (loss)
on investments $ 1.07 (1.32) (1.55) (0.84) 0.38 1.95
Total from investment operations $ 1.05 (1.32) (1.55) (0.82) 0.43 1.99
Less distributions from:
Net investment income $ -- -- -- 0.03 0.05 --
Total distributions $ -- -- -- 0.03 0.05 --
Net asset value, end of period $ 9.70 8.65 9.97 11.52 12.37 11.99
TOTAL RETURN(3) % 12.14 (13.24) (13.45) (6.66) 3.62 19.90
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 27,783 26,418 35,159 42,640 47,647 45,714
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 1.45 1.45 1.44 1.40 1.31 1.28
Gross expenses prior to expense
reimbursement(4) % 1.63 1.65 1.63 1.78 1.31 1.28
Net investment income (loss) after expense
reimbursement(4)(5) % (0.32) (0.01) (0.02) 0.25 0.36 0.49
Portfolio turnover rate % 40 69 27 9 14 9
<Caption>
CLASS B
------------------------------------------------------------------
SIX MONTHS YEAR YEAR SEVEN MONTHS YEAR ENDED
ENDED ENDED ENDED ENDED OCTOBER 31,
NOVEMBER 30, MAY 31, MAY 31, MAY 31, ----------------
2003 2003 2002 2001(1) 2000 1999(2)
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.44 9.79 11.41 12.28 11.96 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.05) (0.07) (0.09) (0.03) (0.04) (0.01)
Net realized and unrealized gain (loss)
on investments $ 1.03 (1.28) (1.53) (0.83) 0.39 1.97
Total from investment operations $ 0.98 (1.35) (1.62) (0.86) 0.35 1.96
Less distributions from:
Net investment income $ -- -- -- 0.01 0.03 --
Total distributions $ -- -- -- 0.01 0.03 --
Net asset value, end of period $ 9.42 8.44 9.79 11.41 12.28 11.96
TOTAL RETURN(3) % 11.61 (13.79) (14.20) (6.97) 2.94 19.60
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 4,957 5,220 8,268 9,930 8,268 7,059
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 2.20 2.20 2.19 2.05 1.96 1.95
Gross expenses prior to expense
reimbursement(4) % 2.28 2.30 2.28 2.43 2.47 2.66
Net investment income (loss) after expense
reimbursement(4)(5) % (1.07) (0.76) (0.77) (0.40) (0.29) (0.14)
Portfolio turnover rate % 40 69 27 9 14 9
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) The Fund commenced operations on December 15, 1998.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
* Amount represents less than $0.01 per share.
See Accompanying Notes to Financial Statements.
71
<Page>
ING TAX EFFICIENT EQUITY FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
------------------------------------------------------------------
SIX MONTHS YEAR YEAR SEVEN MONTHS YEAR ENDED
ENDED ENDED ENDED ENDED OCTOBER 31,
NOVEMBER 30, MAY 31, MAY 31, MAY 31, ----------------
2003 2003 2002 2001(1) 2000 1999(2)
- ----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.38 9.73 11.33 12.20 11.92 10.00
Income (loss) from investment operations:
Net investment income (loss) $ (0.05) (0.07) (0.10) (0.01) (0.04) --
Net realized and unrealized gain (loss)
on investments $ 1.03 (1.28) (1.50) (0.85) 0.39 1.92
Total from investment operations $ 0.98 (1.35) (1.60) (0.86) 0.35 1.92
Less distributions from:
Net investment income $ -- -- -- 0.01 0.07 --
Total distributions $ -- -- -- 0.01 0.07 --
Net asset value, end of period $ 9.36 8.38 9.73 11.33 12.20 11.92
TOTAL RETURN(3) % 11.69 (13.88) (14.12) (7.01) 2.91 19.20
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 925 903 1,392 2,202 2,870 1,222
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 2.20 2.20 2.19 2.05 1.95 1.97
Gross expenses prior to expense
reimbursement(4) % 2.28 2.30 2.28 2.43 2.47 2.64
Net investment income (loss) after expense
reimbursement(4)(5) % (1.07) (0.76) (0.77) (0.40) (0.32) (0.14)
Portfolio turnover rate % 40 69 27 9 14 9
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) The Fund commenced operations on December 15, 1998.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
See Accompanying Notes to Financial Statements.
72
<Page>
ING CONVERTIBLE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
--------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS YEAR THREE MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30, MARCH 31,
2003 2003 2002 2001(1) 2000 1999(2) 1999
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 16.20 15.35 17.89 27.70 23.27 21.92 19.12
Income (loss) from investment operations:
Net investment income (loss) $ 0.12 0.38 0.30 0.85 0.42 0.10 0.40
Net realized and unrealized gain (loss)
on investments $ 1.70 0.78 (2.34) (5.29) 8.02 1.35 3.17
Total from investment operations $ 1.82 1.16 (2.04) (4.44) 8.44 1.45 3.57
Less distributions from:
Net investment income $ 0.19 0.31 0.41 0.51 0.32 0.10 0.41
Net realized gain from investments $ -- -- 0.09 4.86 3.69 -- 0.36
Total distributions $ 0.19 0.31 0.50 5.37 4.01 0.10 0.77
Net asset value, end of period $ 17.83 16.20 15.35 17.89 27.70 23.27 21.92
TOTAL RETURN(3) % 11.34 7.80 (11.44) (17.78) 39.88 6.62 19.17
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 61,767 51,008 60,692 98,896 131,218 73,133 65,742
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.53 1.59 1.46 1.42 1.35 1.45 1.53
Gross expenses prior to expense
reimbursement(4) % 1.53 1.59 1.46 1.41 1.35 2.10 1.65
Net investment income (loss) after expense
reimbursement(4)(5) % 2.03 2.57 1.93 2.20 1.78 1.82 2.08
Portfolio turnover rate % 80 97 100 145 129 28 138
<Caption>
CLASS B
--------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS YEAR THREE MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30, MARCH 31,
2003 2003 2002 2001(1) 2000 1999(2) 1999
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 17.79 16.83 19.56 30.20 25.34 23.86 20.56
Income (loss) from investment operations:
Net investment income (loss) $ 0.13 0.35 0.24 0.49 0.29 0.07 0.29
Net realized and unrealized gain (loss)
on investments $ 1.81 0.83 (2.59) (5.49) 8.77 1.47 3.47
Total from investment operations $ 1.94 1.18 (2.35) (5.00) 9.06 1.54 3.76
Less distributions from:
Net investment income $ 0.16 0.22 0.28 0.34 0.19 0.06 0.27
Net realized gain from investments $ -- -- 0.10 5.30 4.01 -- 0.19
Total distributions $ 0.16 0.22 0.38 5.64 4.20 0.06 0.46
Net asset value, end of period $ 19.57 17.79 16.83 19.56 30.20 25.34 23.86
TOTAL RETURN(3) % 10.99 7.16 (12.04) (18.26) 39.21 6.47 18.52
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 76,760 72,364 88,650 125,366 139,704 68,091 58,736
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.18 2.24 2.11 2.07 2.00 2.10 2.18
Gross expenses prior to expense
reimbursement(4) % 2.18 2.24 2.11 2.06 2.00 2.10 2.30
Net investment income (loss) after expense
reimbursement(4)(5) % 1.39 1.92 1.28 1.55 1.13 1.17 1.44
Portfolio turnover rate % 80 97 100 145 129 28 138
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Effective May 24, 1999, ING Investments, LLC became the Investment Adviser
of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible
recoupment by ING Investments, LLC within three years.
See Accompanying Notes to Financial Statements.
73
<Page>
ING CONVERTIBLE FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
--------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS YEAR THREE MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30, MARCH 31,
2003 2003 2002 2001(1) 2000 1999(2) 1999
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 16.62 15.75 18.33 28.33 23.78 22.40 19.55
Income (loss) from investment operations:
Net investment income (loss) $ 0.12 0.32 0.22 0.58 0.28 0.07 0.28
Net realized and unrealized gain (loss)
on investments $ 1.68 0.78 (2.42) (5.26) 8.22 1.37 3.25
Total from investment operations $ 1.80 1.10 (2.20) (4.68) 8.50 1.44 3.53
Less distributions from:
Net investment income $ 0.16 0.23 0.29 0.35 0.19 0.06 0.25
Net realized gain from investments $ -- -- 0.09 4.97 3.76 -- 0.43
Total distributions $ 0.16 0.23 0.38 5.32 3.95 0.06 0.68
Net asset value, end of period $ 18.26 16.62 15.75 18.33 28.33 23.78 22.40
TOTAL RETURN(3) % 10.94 7.15 (12.03) (18.25) 39.24 6.45 18.45
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 72,767 66,412 81,247 118,363 156,592 100,276 95,998
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.18 2.24 2.11 2.07 2.00 2.10 2.18
Gross expenses prior to expense
reimbursement(4) % 2.18 2.24 2.11 2.06 2.00 2.10 2.30
Net investment income (loss) after expense
reimbursement(4)(5) % 1.39 1.92 1.28 1.55 1.13 1.17 1.44
Portfolio turnover rate % 80 97 100 145 129 28 138
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Effective May 24, 1999, ING Investments, LLC became the Investment Adviser
of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible
recoupment by ING Investments, LLC within three years.
See Accompanying Notes to Financial Statements.
74
<Page>
ING EQUITY AND BOND FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A
--------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS YEAR THREE MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30, MARCH 31,
2003 2003 2002 2001(1) 2000 1999(2) 1999
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.71 12.06 13.30 15.04 19.23 19.03 19.53
Income (loss) from investment operations:
Net investment income (loss) $ 0.08 0.31 0.39 0.93 0.51 0.10 0.36
Net realized and unrealized gain (loss)
on investments $ 0.54 (0.41) (1.13) (1.01) (0.60) 0.17 2.58
Total from investment operations $ 0.62 (0.10) (0.74) (0.08) (0.09) 0.27 2.94
Less distributions from:
Net investment income $ 0.19 0.25 0.45 0.51 0.39 0.07 0.43
Net realized gain from investments $ -- -- 0.05 1.15 3.71 -- 3.01
Total distributions $ 0.19 0.25 0.50 1.66 4.10 0.07 3.44
Net asset value, end of period $ 12.14 11.71 12.06 13.30 15.04 19.23 19.03
TOTAL RETURN(3) % 5.33 (0.66) (5.55) (0.61) (1.01) 1.42 17.10
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 37,401 32,179 57,042 61,477 63,592 9,619 9,519
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.57 1.60 1.48 1.32 1.40 1.49 1.59
Gross expenses prior to expense
reimbursement(4) % 1.70 1.71 1.45 1.53 1.61 1.75 1.97
Net investment income (loss) after expense
reimbursement(4)(5) % 1.47 2.62 3.11 3.54 3.26 2.06 2.08
Portfolio turnover rate % 150 129 145 76 173 63 165
</Table>
<Table>
<Caption>
CLASS B
--------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS YEAR THREE MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30, MARCH 31,
2003 2003 2002 2001(1) 2000 1999(2) 1999
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 12.61 12.97 14.28 16.09 20.59 20.38 20.07
Income (loss) from investment operations:
Net investment income (loss) $ 0.05 0.29 0.32 0.80 0.44 0.07 0.28
Net realized and unrealized gain (loss)
on investments $ 0.58 (0.47) (1.22) (0.98) (0.64) 0.18 2.74
Total from investment operations $ 0.63 (0.18) (0.90) (0.18) (0.20) 0.25 3.02
Less distributions from:
Net investment income $ 0.16 0.18 0.36 0.39 0.33 0.04 0.31
Net realized gain from investments $ -- -- 0.05 1.24 3.97 -- 2.40
Total distributions $ 0.16 0.18 0.41 1.63 4.30 0.04 2.71
Net asset value, end of period $ 13.08 12.61 12.97 14.28 16.09 20.59 20.38
TOTAL RETURN(3) % 5.02 (1.29) (6.26) (1.21) (1.58) 1.24 16.49
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 20,326 22,348 31,682 35,828 41,026 7,157 6,048
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.22 2.25 2.13 1.97 2.05 2.14 2.24
Gross expenses prior to expense
reimbursement(4) % 2.35 2.36 2.10 2.18 2.26 2.40 2.62
Net investment income (loss) after expense
reimbursement(4)(5) % 0.82 1.97 2.46 2.89 2.61 1.41 1.43
Portfolio turnover rate % 150 129 145 76 173 63 165
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Effective May 24, 1999, ING investments, LLC became the Investment Adviser
of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible
recoupment by ING Investments, LLC within three years.
See Accompanying Notes to Financial Statements.
75
<Page>
ING EQUITY AND BOND FUND (UNAUDITED) (CONTINUED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS C
--------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS YEAR THREE MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30, MARCH 31,
2003 2003 2002 2001(1) 2000 1999(2) 1999
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.21 11.57 12.78 14.45 18.53 18.35 19.90
Income (loss) from investment operations:
Net investment income (loss) $ 0.05 0.17 0.34 0.74 0.45 0.06 0.26
Net realized and unrealized gain (loss)
on investments $ 0.49 (0.34) (1.13) (0.91) (0.62) 0.16 2.52
Total from investment operations $ 0.54 (0.17) (0.79) (0.17) (0.17) 0.22 2.78
Less distributions from:
Net investment income $ 0.16 0.19 0.37 0.39 0.34 0.04 0.28
Net realized gain from investments $ -- -- 0.05 1.11 3.57 -- 4.05
Total distributions $ 0.16 0.19 0.42 1.50 3.91 0.04 4.33
Net asset value, end of period $ 11.59 11.21 11.57 12.78 14.45 18.53 18.35
TOTAL RETURN(3) % 4.89 (1.27) (6.20) (1.28) (1.53) 1.21 16.34
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 14,193 14,240 18,007 22,679 25,838 21,331 21,655
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 2.22 2.25 2.13 1.97 2.05 2.14 2.23
Gross expenses prior to expense
reimbursement(4) % 2.35 2.36 2.10 2.18 2.26 2.40 2.61
Net investment income (loss) after expense
reimbursement(4)(5) % 0.82 1.96 2.46 2.89 2.61 1.41 1.43
Portfolio turnover rate % 150 129 145 76 173 63 165
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Effective May 24, 1999, ING investments, LLC became the Investment Adviser
of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible
recoupment by ING Investments, LLC within three years.
See Accompanying Notes to Financial Statements.
76
<Page>
ING REAL ESTATE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS A CLASS B CLASS C
-------------------------------------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 (1) 2003 2003 (2) 2003 2003 (3)
- -----------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.06 10.06 11.10 10.00 11.37 9.96
Income (loss) from investment operations:
Net investment income (loss) $ 0.27 0.16 0.18 0.12 (0.05) (0.01)*
Net realized and unrealized gain (loss)
on investments $ 1.68 1.04 1.74 1.15 2.01 1.50
Total from investment operations $ 1.95 1.20 1.92 1.27 1.96 1.49
Less distributions from:
Net investment income $ 0.36 0.20 0.33 0.17 0.34 0.08
Net realized gain from investments $ 0.51 -- 0.51 -- 0.51 --
Total distributions $ 0.87 0.20 0.84 0.17 0.85 0.08
Net asset value, end of period $ 12.14 11.06 12.18 11.10 12.48 11.37
TOTAL RETURN(4) % 18.01 12.06 17.59 12.77 17.58 15.03
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 6,146 982 863 149 2,250 157
Ratios to average net assets:
Net expenses after expense
reimbursement(5)(6) % 1.38 1.45 2.13 2.20 2.13 2.20
Gross expenses prior to expense
reimbursement(5) % 1.50 1.53 2.25 2.30 2.25 2.30
Net investment income (loss) after
expense reimbursement(5)(6) % 8.24 0.01 4.31 1.91 4.41 (1.62)
Portfolio turnover rate % 78 62 78 62 78 62
</Table>
(1) Class A commenced offering of shares on December 20, 2002.
(2) Class B commenced offering of shares on November 20, 2002.
(3) Class C commenced offering of shares on January 17, 2003.
(4) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(5) Annualized for periods less than one year.
(6) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
* Per share data calculated using weighted average number of shares
outstanding throughout the period. See Accompanying Notes to Financial
Statements.
See Accompanying Notes to Financial Statements.
77
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited)
NOTE 1 -- ORGANIZATION
ORGANIZATION. The ING Funds contained within this book are comprised of ING
Equity Trust ("IET"), ING Investment Funds, Inc. ("IIF") and ING Mayflower Trust
("IMT"), all of which are open-end investment management companies registered
under the Investment Company Act of 1940, as amended.
IET is a Massachusetts business trust organized in 1998 with eighteen separate
series (Portfolios). Twelve of the Portfolios in this report are: ING Growth
Opportunities Fund ("Growth Opportunities"), ING LargeCap Growth Fund ("LargeCap
Growth"), ING MidCap Opportunities Fund ("MidCap Opportunities"), ING SmallCap
Opportunities Fund ("SmallCap Opportunities"), ING Disciplined LargeCap Fund
("Disciplined LargeCap"), ING Financial Services Fund ("Financial Services"),
ING MidCap Value Fund ("MidCap Value"), ING SmallCap Value Fund ("SmallCap
Value"), ING Tax Efficient Equity Fund ("Tax Efficient Equity"), ING Convertible
Fund ("Convertible"), ING Equity and Bond Fund ("Equity and Bond") and ING Real
Estate Fund ("Real Estate"). IIF is a Maryland Corporation organized in 1969
with one Portfolio, ING MagnaCap Fund ("MagnaCap"). IMT is a Massachusetts
business trust organized in 1993 with two separate series (Portfolios). One of
the Portfolios in this report is ING Growth + Value Fund ("Growth + Value"). The
investment objective of each Fund is described in each Fund's prospectus.
Each Fund offers at least two of the following classes of shares: Class A, Class
B, Class C, Class I, Class M, and Class Q. The separate classes of shares differ
principally in the applicable sales charges (if any), distribution fees,
shareholder servicing fees and transfer agency fees. Shareholders of each class
also bear certain expenses that pertain to that particular class. All
shareholders bear the common expenses of the Fund and earn income from the
portfolio pro rata based on the average daily net assets of each class, without
distinction between share classes. Dividends are determined separately for each
class based on income and expenses allocable to each class. Realized gains are
allocated to each class pro rata based on the net assets of each class on the
date of distribution. No class preferential dividend rights exist. Differences
in per share dividend rates generally results from the relative weighting of pro
rata income and realized gain allocations and from differences in separate class
expenses, including distribution, and shareholder servicing fees. Class B
shares, along with their pro rata reinvested dividend shares, automatically
convert to Class A shares approximately eight years after purchase.
REORGANIZATION. On December 17, 2001, the Boards of Directors/Trustees of each
of various ING Funds approved plans of reorganization which were intended to
decrease the number of corporate entities under which the ING Funds are
organized (the "Reorganization") and to align the open-end funds with similar
open-end funds that share the same prospectus. The Reorganization only resulted
in a change in corporate form of some of the ING Funds, with no change in the
substance or investment aspects of the ING Funds. The Reorganization was
consummated to align the ING Funds' corporate structures and expedite the Funds'
required filings with the Securities and Exchange Commission. Shareholders of
Growth + Value and MagnaCap did not approve the Reorganization; therefore those
Funds remain part of ING Mayflower Trust and ING Investment Funds, Inc.,
respectively.
As a result of the Reorganization, the following ING Funds reorganized into
series of ING Equity Trust: Convertible, Equity and Bond, Financial Services,
Growth Opportunities, LargeCap Growth, Disciplined LargeCap, SmallCap
Opportunities and Tax Efficient Equity (collectively, the "Reorganizing Funds").
In this regard, the Board approved the creation of a new series of ING Equity
Trust to serve as "shells" (the "Shell Funds") into which the Reorganized Funds
were reorganized. The plans of reorganization provided for, among other things,
the transfer of the assets and liabilities of the Reorganizing Funds to the
Shell Funds. Prior to September 23, 2002, the effective date of the
Reorganization, the Shell Funds had only nominal assets. For accounting
purposes, each Reorganizing Fund is considered the surviving entity, and the
financial statements shown for periods prior to September 23, 2002 are the
financial statements of the Reorganized Fund. MidCap Opportunities, MidCap Value
Fund and SmallCap Value were originally organized as series of ING Equity Trust,
and were not involved in the Reorganization.
Prior to the Reorganization, Convertible, Equity and Bond, and LargeCap Growth
were series of ING Mutual Funds ("IMF"). IMF is a Delaware business trust
registered as an open-end management investment company organized in 1992.
78
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 1 -- ORGANIZATION (CONTINUED)
Prior to the Reorganization, Financial Services was the sole series of ING
Financial Services Fund, Inc. ING Financial Services Fund, Inc. was a Maryland
corporation registered as an open-end management investment company organized in
1985.
Prior to the Reorganization, Tax Efficient Equity was a series of ING Funds
Trust ("IFT"). IFT is a Delaware business trust registered as an open-end
management investment company organized on July 30, 1998.
Prior to the Reorganization, Growth Opportunities was the sole series of ING
Growth Opportunities Fund, a Massachusetts business trust registered as an
open-end management investment company organized in 1986.
Prior to the Reorganization, SmallCap Opportunities was the sole series of ING
SmallCap Opportunities Fund, a Massachusetts business trust registered as an
open-end management investment company organized in 1986.
Prior to the Reorganization, Large Company Value was the sole series of ING
Large Company Value Fund, Inc., a Maryland corporation registered as an
open-end, diversified management investment company organized in April 1991.
Prior to the Reorganization, Disciplined LargeCap was a series of IMT. As
discussed above, IMT is a Massachusetts business trust registered as an open-end
management investment company organized in 1993.
On November 4, 2002, pursuant to an Agreement and Plan of Reorganization dated
August 20, 2002, all of the assets and liabilities of the CRA Realty Shares
Portfolio (the "Acquired Fund") were transferred to a newly created series of
the ING Equity Trust, the ING Real Estate Fund (the "Acquiring Fund") in
exchange for shares of the Acquiring Fund. These shares were then distributed to
shareholders of the Acquired Fund and the Acquired Fund was terminated.
This reorganization was accounted for as tax-free reorganization under the
Internal Revenue Code. Accordingly, no gain or loss was recognized by the
shareholders of the Acquired Fund upon the exchange of their Acquired Fund
Shares for shares of the Acquiring Fund.
Prior to November 4, 2002, Real Estate was organized as a series of The
Advisors' Inner Circle Fund, a Massachusetts business trust registered as an
open-end management investment company, established July 18, 1991.
On January 7, 2003, the Boards of Trustees of ING Funds approved plans of
reorganization. As a result of the 2003 Reorganization (the "2003
Reorganization"), the assets and liabilities of the ING Large Company Value Fund
were transferred to MagnaCap. For accounting purposes, MagnaCap is considered
the surviving entity. The financial statements shown for periods prior to
November 8, 2003, the effective date of the Reorganization, are the financial
statements for MagnaCap.
Effective October 1, 2002, ING Funds Distributor, Inc. changed its name to ING
Funds Distributor, LLC and is a wholly owned subsidiary of ING Groep N.V.
("ING").
ING is a global financial institution active in the fields of insurance, banking
and asset management in more than 65 countries.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are consistently followed by the
Funds in the preparation of their financial statements. Such policies are in
conformity with accounting principles generally accepted in the United States of
America for investment companies.
A. SECURITY VALUATION. Investments in equity securities traded on a national
securities exchange are valued at the last reported sale price. Portfolio
securities reported by NASDAQ will be valued at NASDAQ official closing
price. Portfolio securities traded on an exchange or NASDAQ for which there
has been no sale and securities traded in the over-the-counter-market are
valued at the mean between the last reported bid and ask prices. All
investments quoted in foreign currencies will be valued daily in U.S.
dollars on the basis of the foreign currency exchange rates prevailing at
that time. Debt securities are valued at bid prices obtained from
independent services or from one or more dealers making markets in the
securities. U.S. Government obligations are valued by using market
quotations or independent pricing services which use prices provided by
market-makers or estimates of market values obtained from yield data
relating to instruments or securities with similar characteristics.
Securities and assets for which market quotations are not readily available
(which may include certain restricted securities which are subject to
limitations as to their sale) are valued at their fair values as determined
in good faith by or under
79
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
the supervision of the Funds' Board of Directors ("Board"), in accordance
with methods that are specifically authorized by the Board. Securities
traded on exchanges, including foreign exchanges, which close earlier than
the time that a Fund calculates its net asset value may also be valued at
their fair values as determined in good faith by or under the supervision
of a Fund's Board, in accordance with methods that are specifically
authorized by the Board. If a significant event which is likely to impact
the value of one or more foreign securities held by a Fund occurs after the
time at which the foreign market for such security(ies) closes but before
the time that the Fund's net asset value is calculated on any business day,
such event may be taken into account in determining the fair value of such
security(ies) at the time the Fund calculates its net asset value. For
these purposes, significant events after the close of trading on a foreign
market may include, among others, securities trading in the U.S. and other
markets, corporate announcements, natural and other disasters, and
political and other events. Among other elements of analysis, the Board has
authorized the use of one or more research services to assist with the
determination of the fair value of foreign securities in light of
significant events. Research services use statistical analyses and
quantitative models to help determine fair value as of the time a Fund
calculates its net asset value. Unlike the closing price of a security on
an exchange, fair value determinations employ elements of judgment, and the
fair value assigned to a security may not represent the actual value that a
Fund could obtain if it were to sell the security at the time of the close
of the NYSE.
Investments in securities maturing in less than 60 days from the date of
acquisition are valued at amortized cost, which, when combined with accrued
interest, approximates market value.
B. SECURITY TRANSACTIONS AND REVENUE RECOGNITION. Securities transactions are
accounted for on the trade date. Realized gains and losses are reported on
the basis of identified cost of securities sold. Interest income is
recorded on an accrual basis. Dividend income is recorded on the
ex-dividend date, or for certain foreign securities, when the information
becomes available to the funds. Premium amortization and discount accretion
are determined by the effective yield method.
C. FOREIGN CURRENCY TRANSLATION. The books and records of the Funds are
maintained in U.S. dollars. Any foreign currency amounts are translated
into U.S. dollars on the following basis:
(1) Market value of investment securities, other assets and
liabilities -- at the exchange rates prevailing at the end of the
day.
(2) Purchases and sales of investment securities, income and expenses
-- at the rates of exchange prevailing on the respective dates of
such transactions.
Although the net assets and the market values are presented at the foreign
exchange rates at the end of the day, the Funds do not isolate the portion
of the results of operations resulting from changes in foreign exchange
rates on investments from the fluctuations arising from changes in market
prices of securities held. Such fluctuations are included with the net
realized and unrealized gains or losses from investments. For securities
which are subject to foreign withholding tax upon disposition, liabilities
are recorded on the statement of assets and liabilities for the estimated
tax withholding based on the securities' current market value. Upon
disposition, realized gains or losses on such securities are recorded net
of foreign withholding tax. Reported net realized foreign exchange gains or
losses arise from sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise
from changes in the value of assets and liabilities other than investments
in securities at fiscal year end, resulting from changes in the exchange
rate. Foreign security and currency transactions may involve certain
considerations and risks not typically associated with investing in U.S.
companies and the U.S. Government. These risks include but are not limited
to revaluation of currencies and future adverse political and economic
developments which could cause securities and their markets to be less
liquid and prices more volatile than those of comparable U.S. companies and
the U.S. Government.
80
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. FOREIGN CURRENCY TRANSACTIONS AND FUTURES CONTRACTS. Certain funds may
enter into foreign currency exchange transactions to convert to and from
different foreign currencies and to and from the U.S. dollar in connection
with the planned purchases or sales of securities. The Funds either enter
into these transactions on a spot basis at the spot rate prevailing in the
foreign currency exchange market or use forward foreign currency contracts
to purchase or sell foreign currencies. When the contract is fulfilled or
closed, gains or losses are realized. Until then, the gain or loss is
included in unrealized appreciation or depreciation. Risks may arise upon
entering into forward contracts from the potential inability of
counterparties to meet the terms of their forward contracts and from
unanticipated movements in the value of foreign currencies relative to the
U.S. dollar.
Each Fund may enter into futures contracts involving foreign currency,
interest rates, securities and security indices, for hedging purposes only.
A futures contract obligates the seller of the contract to deliver and the
purchaser of the contract to take delivery of the type of foreign currency,
financial instrument or security called for in the contract at a specified
future time for a specified price. Upon entering into such a contract, a
Fund is required to deposit and maintain as collateral such initial margin
as required by the exchange on which the contract is traded. Pursuant to
the contract, a Fund agrees to receive from or pay to the broker an amount
equal to the daily fluctuations in the value of the contract. Such receipts
or payments are known as variation margins and are recorded as unrealized
gains or losses by the Fund. When the contract is closed, the Fund records
a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
There were no open futures contracts at November 30, 2003.
E. DISTRIBUTIONS TO SHAREHOLDERS. The Funds record distributions to their
shareholders on ex-dividend date. Each Fund pays dividends, if any, as
follows:
<Table>
<Caption>
ANNUALLY SEMI-ANNUALLY QUARTERLY
-------- ------------- ---------
Growth + MagnaCap Convertible
Value
Growth Equity and
Opportunities Bond
LargeCap Real Estate
Growth
MidCap
Opportunities
SmallCap
Opportunities
Disciplined
LargeCap
Financial
Services
MidCap Value
SmallCap Value
Tax Efficient
Equity
</Table>
Each Fund distributes capital gains, to the extent available, annually.
F. FEDERAL INCOME TAXES. It is the policy of the Funds to comply with the
requirements of the Subchapter M of Internal Revenue Code that are
applicable to regulated investment companies and to distribute
substantially all of their net investment income and any net realized
capital gains to their shareholders. Therefore, a federal income tax or
excise tax provision is not required. In addition, by distributing during
each calendar year substantially all of its net investment income and net
realized capital gains, each Fund intends not to be subject to any federal
excise tax. The Board intends to offset any net capital gains with any
available capital loss carryforward until each carryforward has been fully
utilized or expires. In addition, no capital gain distribution shall be
made until the capital loss carryforward has been fully utilized or
expires.
G. USE OF ESTIMATES. Management of the Funds has made certain estimates and
assumptions relating to the reporting of assets, liabilities, income, and
expenses to prepare these financial statements in conformity with
accounting principles generally accepted in the United States of America.
Actual results could differ from these estimates.
H. REPURCHASE AGREEMENTS. Each Fund may invest in repurchase agreements only
with government securities dealers recognized by the Board of Governors of
the Federal Reserve System or with member banks of the Federal Reserve
System. Under such agreements, the seller of the security agrees to
repurchase the agreement at a mutually agreed upon time and price. The
resale
81
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
price is in excess of the purchase price and reflects an agreed upon
interest rate for the period of time the agreement is outstanding. The
period of the repurchase agreements is usually short, from overnight to one
week, while the underlying securities generally have longer maturities.
Each Fund will always receive as collateral securities acceptable to it
whose market value is equal to at least 100% of the carrying amount of the
repurchase agreements, plus accrued interest, being invested by the Fund.
The underlying collateral is valued daily on a mark to market basis to
assure that the value, including accrued interest is at least equal to the
repurchase price. If the seller defaults, a Fund might incur a loss or
delay in the realization of proceeds if the value of the collateral
securing the repurchase agreement declines, and it might incur disposition
costs in liquidating the collateral.
I. OPTIONS CONTRACTS. All Funds may purchase put and call options and may
write (sell) put options and covered call options. The Funds may engage in
option transactions as a hedge against adverse movements in the value of
portfolio holdings or to increase market exposure. Option contracts are
valued daily and unrealized gains or losses are recorded based upon the
last sales price on the principal exchange on which the options are traded.
The Funds will realize a gain or loss upon the expiration or closing of the
option contract. When an option is exercised, the proceeds on sales of the
underlying security for a written call option, the purchase cost of the
security for a written put option, or the cost of the security for a
purchased put or call option is adjusted by the amount of premium received
or paid. Realized and unrealized gains or losses on option contracts are
reflected in the accompanying financial statements. The risk in writing a
call option is that the Funds give up the opportunity for profit if the
market price of the security increases and the option is exercised. The
risk in writing a put option is that the Funds may incur a loss if the
market price of the security decreases and the option is exercised. The
risk in buying an option is that the Funds pay a premium whether or not the
option is exercised. Risks may also arise from an illiquid secondary market
or from the inability of counterparties to meet the terms of the contract.
J. SECURITIES LENDING. Each Fund has the option to temporarily loan up to 30%
of its total assets to brokers, dealers or other financial institutions in
exchange for a negotiated lender's fee. The borrower is required to fully
collateralize the loans with cash, letters of credit or U.S. Government
securities.
K. OFFERING COSTS. Offering costs are capitalized and amortized on a straight
line basis over a period of twelve months.
L. ILLIQUID AND RESTRICTED SECURITIES. Each Fund may invest up to 15% of its
net assets in illiquid securities. Illiquid securities are not readily
marketable. Disposing of illiquid investments may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for
the Funds to sell them promptly at an acceptable price. The Funds also may
invest in restricted securities, which include those sold under Rule 144A
of the Securities Act of 1933 (1933 Act) or securities offered pursuant to
Section 4(2) of the 1933 Act, and/or are subject to legal or contractual
restrictions on resale and generally may not be publicly sold without
registration under the 1933 Act. Restricted securities may be considered
liquid pursuant to procedures adopted by the Board or may be deemed to be
illiquid because they may not be readily marketable. Restricted securities
are valued using market quotations when readily available. In the absence
of market quotations, the illiquid and restricted securities are valued
based upon their fair value determined under procedures approved by the
Board.
M. DELAYED DELIVERY TRANSACTIONS. The Funds may purchase or sell securities on
a when-issued or forward commitment basis. The price of the underlying
securities and date when the securities will be delivered and paid for are
fixed at the time the transaction is negotiated. The market value of such
is identified in each Fund's Portfolio of Investments. Losses may arise due
to changes in the market value of the securities or from the inability of
counterparties to meet the terms of the contract. In connection with such
purchases, the Funds are required to segregate liquid assets with the
Funds' custodian sufficient to cover the purchase price.
N. MORTGAGE DOLLAR ROLL TRANSACTIONS. In connection with a Fund's ability to
purchase or sell securities on a when-issued basis, Balanced and Growth and
Income may engage in dollar roll transactions with respect to
mortgage-backed securities issued by Government National Mortgage
Association, Federal National Mortgage Association and Federal Home Loan
Mortgage Corp. In a dollar roll transaction, a Fund sells a mortgage-backed
security to a financial institution, such as a bank or broker/dealer, and
simultaneously agrees to repurchase a substantially similar (i.e., same
type, coupon, and maturity) security from the institution
82
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
on a delayed delivery basis at an agreed upon price. The mortgage-backed
securities that are repurchased will bear the same interest rate as those
sold, but generally will be collateralized by different pools of mortgages
with different prepayment histories. The Funds account for dollar roll
transactions as purchases and sales.
NOTE 3 -- INVESTMENT TRANSACTIONS
For the six months ended November 30, 2003, the cost of purchases and proceeds
from the sales of securities, excluding short-term securities, were as follows:
<Table>
<Caption>
PURCHASES SALES
--------- -----
Growth + Value $ 172,612,557 $ 202,309,652
Growth Opportunities 76,284,064 100,954,495
LargeCap Growth 321,771,113 270,738,990
MidCap Opportunities 63,553,558 84,013,823
SmallCap Opportunities 97,085,080 149,574,600
Disciplined LargeCap 108,056,693 115,362,176
Financial Services 67,590,119 83,905,656
MagnaCap 176,618,735 56,250,218
MidCap Value 35,511,803 22,457,079
SmallCap Value 17,557,943 14,185,779
Tax Efficient Equity 12,662,458 14,875,162
Convertible 146,103,387 144,101,481
Equity and Bond 102,682,899 105,461,783
Real Estate 134,080,020 112,224,070
</Table>
NOTE 4 -- INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES
The Funds entered into an Investment Management Agreement with ING Investments,
LLC (the "Manager", the "Investment Manager" or the "Adviser") a wholly-owned
subsidiary of ING. The investment management agreements compensate the
Investment Manager with a fee, computed daily and payable monthly, based on the
average daily net assets of each Fund, at the following annual rates:
<Table>
<Caption>
AS A PERCENT OF AVERAGE NET ASSETS
----------------------------------
Growth + Value 1.00%
Growth Opportunities 0.95%
LargeCap Growth 0.75% on first $500 million; 0.675%
on next $500 million; and
0.65% in excess of $1 billion
MidCap Opportunities 1.00%
SmallCap Opportunities 1.00%
Disciplined LargeCap 0.70%
Financial Services 1.00% on first $30 million;
0.75% on next $95 million; and
0.70% in excess of $125 million
MagnaCap 1.00% on first $30 million;
0.75% on next $220 million;
0.625% on next $200 million; and
0.50% in excess of $450 million
MidCap Value 1.00%
SmallCap Value 1.00%
Tax Efficient Equity 0.80%
Convertible 0.75% on first $500 million; 0.675%
on next $500 million; and
0.65% in excess of $1 billion
Equity and Bond 0.75% on first $500 million; 0.675%
on next $500 million; and
0.65% in excess of $1 billion
Real Estate 0.70%
</Table>
Aeltus Investment Management, Inc. ("Aeltus"), a registered investment advisor,
serves as Sub-Adviser to the Growth Opportunities Fund, MidCap Opportunities
Fund, SmallCap Opportunities Fund, Disciplined LargeCap Fund, Financial Services
Fund, MagnaCap Fund, Tax Efficient Equity Fund, Convertible Fund and the Equity
and Bond Fund pursuant to a subadvisory agreement between the Investment Manager
and Aeltus. Prior to September 2, 2003, the Investment Manager was responsible
for the day-to-day management of these Funds. Brandes Investment Partners, LP
("Brandes"), a registered investment advisor, serves as Sub-Adviser to the
MidCap Value and SmallCap Value Funds pursuant to a subadvisory agreement
between the Investment Manager and Brandes.
Effective June 2, 2003, Wellington Management Company, LLP became the
Sub-Adviser to the LargeCap Growth Fund.
Clarion CRA Securities, L.P. ("CRA"), a registered investment advisor, became
the Sub-Adviser to the Real Estate Fund pursuant a subadvisory agreement between
the Manager and CRA.
ING Funds Services, LLC (the "Administrator" or "IFS"), serves as administrator
to each Fund except Financial Services and MagnaCap. The Funds pay the
Administrator a fee calculated at an annual rate of 0.10% of each Funds' average
daily net assets.
Financial Services and MagnaCap have entered into a service agreement with IFS
whereby IFS will act as Shareholder Service Agent for the Funds. The agreement
provides that IFS will be compensated for incoming and outgoing shareholder
telephone calls and letters, and all reasonable out-of-pocket expenses incurred
in connection with the performance of such services. Prior to March 1, 2002, IFS
acted as Shareholder Service Agent for LargeCap Growth, Convertible and Equity
and Bond.
Growth + Value, Growth Opportunities, MidCap Opportunities, SmallCap
Opportunities and Disciplined LargeCap also pay IFS an annual shareholder
account servicing fee of $5.00, payable semi-annually, for each account of
beneficial owners of shares.
NOTE 5 -- DISTRIBUTION AND SERVICE FEES
Each share class of the Funds (except as noted below) has adopted a Plan
pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plans"), whereby ING Funds
Distributor, LLC (the "Distributor") is reimbursed or compensated (depending on
the class of shares) by the Funds for expenses incurred in the distribution of
each Fund's shares ("Distribution Fees"). Pursuant to the 12b-1 Plans, the
Distributor is entitled to a
83
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 5 -- DISTRIBUTION AND SERVICE FEES (CONTINUED)
payment each month to reimburse or compensate expenses incurred in the
distribution and promotion of each Fund's shares, including expenses incurred in
printing prospectuses and reports used for sales purposes, expenses incurred in
preparing and printing sales literature and other such distribution related
expenses, including any distribution or shareholder servicing fees ("Service
Fees") paid to securities dealers who have executed a distribution agreement
with the Distributor. Under the 12b-1 Plans, each class of shares of the Fund
pays the Distributor a combined Distribution and Service Fee based on average
daily net assets at the following rates:
<Table>
<Caption>
CLASS A CLASS B CLASS C CLASS I CLASS M CLASS Q CLASS T
------- ------- ------- ------- ------- ------- -------
Growth + Value 0.30% 1.00% 1.00% N/A N/A 0.25% N/A
Growth Opportunities 0.30 1.00 1.00 N/A N/A 0.25 0.95%
LargeCap Growth 0.35 1.00 1.00 N/A N/A 0.25 N/A
MidCap Opportunities 0.30 1.00 1.00 N/A N/A 0.25 N/A
SmallCap Opportunities 0.30 1.00 1.00 N/A N/A 0.25 0.95
Disciplined LargeCap 0.30 1.00 1.00 N/A N/A 0.25 N/A
Financial Services 0.25 1.00 N/A N/A N/A N/A N/A
MagnaCap 0.30 1.00 1.00 N/A 0.75% 0.25 N/A
MidCap Value 0.25 1.00 1.00 N/A N/A 0.25 N/A
SmallCap Value 0.25 1.00 1.00 N/A N/A 0.25 N/A
Tax Efficient Equity 0.35 1.00 1.00 N/A N/A N/A N/A
Convertible 0.35 1.00 1.00 N/A N/A 0.25 N/A
Equity and Bond 0.35 1.00 1.00 N/A N/A 0.25 0.75
Real Estate 0.25 1.00 1.00 N/A N/A 0.25 N/A
</Table>
Beginning March 1, 2001, the Distributor agreed to waive 0.10% of the
Distribution fee for the Tax Efficient Equity Fund for Class A only.
For the six months ended November 30, 2003, the Distributor has retained
$122,604 as sales charges from the proceeds of Class A Shares sold, $2,269 and
$21,295 from the proceeds of Class A Shares and Class C Shares redeemed,
respectively and $25 from the proceeds of Class M Shares sold.
NOTE 6 -- OTHER TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
At November 30, 2003, the Funds had the following amounts recorded in payable to
affiliates on the accompanying Statements of Assets and Liabilities (see Notes
4, 5 and 7):
<Table>
<Caption>
ACCRUED ACCRUED
INVESTMENT ACCRUED DISTRIBUTION
MANAGEMENT ADMINISTRATIVE AND SERVICE
FEES AND SERVICE FEES FEES TOTAL
------------ ---------------- ------------ ------------
Growth + Value $ 174,994 $ 17,499 $ 210,636 $ 403,129
Growth Opportunities 138,362 14,564 116,640 269,566
LargeCap Growth 155,288 20,704 142,608 318,600
MidCap Opportunities 147,027 14,254 139,742 301,023
SmallCap Opportunities 246,578 24,657 228,478 499,713
Disciplined LargeCap 47,243 6,749 56,949 110,941
Financial Services 199,418 -- 156,070 355,488
MagnaCap 232,194 3,625 140,125 375,944
MidCap Value 49,311 4,853 33,110 87,274
SmallCap Value 37,461 3,746 26,353 67,560
Tax Efficient Equity 21,972 2,740 8,184 32,896
Convertible 130,615 17,411 140,141 288,167
Equity and Bond 44,247 5,899 38,985 89,131
Real Estate 94,339 13,488 3,542 111,369
</Table>
At November 30, 2003, ING Life Insurance & Annuity Company, a wholly-owned
indirect subsidiary of ING Groep N.V., held 66.00% of the Tax Efficient Equity
Fund. At November 30, 2003, certain non-affiliated individuals and entities
owned separately the following percentage of the Real Estate Fund: 22.76% and
5.78%. Also at November 30, 2003, one shareholder owned 6.15%, 6.13% and 5.24%
of the Growth & Value, Disciplined LargeCap and Financial Services Funds,
respectively. Investment activities of these shareholders could have a material
impact on the Funds.
84
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 7 -- EXPENSE LIMITATIONS
For the following Funds, the Investment Manager has voluntarily agreed to limit
expenses, excluding interest, taxes, brokerage and extraordinary expenses to the
levels listed below:
<Table>
<Caption>
CLASS A CLASS B CLASS C CLASS I CLASS Q CLASS T
------- ------- ------- ------- ------- -------
LargeCap Growth(1) 1.45% 2.10% 2.10% 1.10% 1.35% N/A
MidCap Opportunities(2) 1.50% 2.20% 2.20% 1.20% 1.35% N/A
MidCap Value 1.75% 2.50% 2.50% 1.50% 1.75% N/A
SmallCap Value 1.75% 2.50% 2.50% 1.50% 1.75% N/A
Tax Efficient Equity 1.45% 2.20% 2.20% N/A N/A N/A
Convertible 1.60% 2.25% 2.25% N/A 1.50% N/A
Equity and Bond 1.60% 2.25% 2.25% N/A 1.50% 2.00%
Real Estate 1.45% 2.20% 2.20% 1.00% 1.25% N/A
</Table>
- ----------
(1) Prior to June 2, 2003, the expense limitation rates for Class A, Class B,
Class C, Class I and Class Q were 1.60%, 2.25%, 2.25% 1.25% and 1.50%,
respectively.
(2) Prior to January 1, 2002, there was no expense limitation for the Fund.
Each Fund will at a later date reimburse the Investment Manager for expenses
waived during the previous 36 months, but only if, after such reimbursement, the
Fund's expense ratio does not exceed the percentage described above. Waived and
reimbursed fees and any recoupment by the Investment Manager of such waived and
reimbursed fees are reflected on the accompanying Statements of Operations for
each Fund.
Outstanding reimbursement balances due to the Funds, if any, under their
respective expense limitation agreements are reflected in Reimbursement Due from
Manager on the accompanying Statements of Assets and Liabilities.
As of November 30, 2003, the cumulative amounts of reimbursed fees that are
subject to possible recoupment by the Investment Manager are as follows:
<Table>
LargeCap Growth $ 629,083
MidCap Opportunities 1,044,439
MidCap Value 258,265
SmallCap Value 238,490
Tax Efficient Equity 189,457
Real Estate 93,322
</Table>
NOTE 8 -- LINE OF CREDIT
All of the Funds included in this report, in addition to certain other funds
managed by the Adviser, have entered into an unsecured committed revolving line
of credit agreement (the "Credit Agreement") with The Bank of New York for an
aggregate amount of $125,000,000. The proceeds may be used to: (1) temporarily
finance the purchase and sale of securities; (2) finance the redemption of
shares of an investor in the Funds; and (3) enable the Funds to meet other
emergency expenses as defined in the Credit Agreement. The Funds to which the
line of credit is available pay a commitment fee equal to 0.09% per annum on the
daily unused portion of the committed line amount payable quarterly in arrears.
At November 30, 2003, the Funds did not have any loans outstanding under the
line of credit.
85
<Page>
NOTES TO FINANCIAL STATEMENTS as of September 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES
Transactions in capital shares and dollars were as follows:
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
GROWTH + VALUE (NUMBER OF SHARES)
Shares sold 431,852 1,525,553 346,658 775,059
Shares redeemed (1,992,059) (4,091,241) (1,788,877) (6,243,894)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (1,560,207) (2,565,688) (1,442,219) (5,468,835)
============== ============== ============== ==============
GROWTH + VALUE ($)
Shares sold $ 5,675,854 $ 12,691,301 $ 3,426,213 $ 5,705,478
Shares redeemed (18,840,447) (32,447,566) (15,372,586) (47,161,811)
-------------- -------------- -------------- --------------
Net decrease $ (13,164,593) $ (19,756,265) $ (11,946,373) $ (41,456,333)
============== ============== ============== ==============
<Caption>
CLASS C SHARES CLASS Q SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
GROWTH + VALUE (NUMBER OF SHARES)
Shares sold 198,117 555,346 -- 2,650
Shares redeemed (1,251,557) (4,193,623) (1,592) (15,845)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (1,053,440) (3,638,277) (1,592) (13,195)
============== ============== ============== ==============
GROWTH + VALUE ($)
Shares sold $ 2,567,439 $ 4,087,044 $ -- $ 21,001
Shares redeemed (11,250,119) (31,396,649) (12,764) (113,542)
-------------- -------------- -------------- --------------
Net decrease $ (8,682,680) $ (27,309,605) $ (12,764) $ (92,541)
============== ============== ============== ==============
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
GROWTH OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 1,078,846 978,264 147,016 237,656
Shares redeemed (1,787,332) (3,247,365) (544,626) (2,452,695)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (708,486) (2,269,101) (397,610) (2,215,039)
============== ============== ============== ==============
GROWTH OPPORTUNITIES ($)
Shares sold $ 12,526,412 $ 10,243,050 $ 1,887,581 $ 2,305,753
Shares redeemed (21,023,755) (34,151,206) (6,289,149) (24,220,971)
-------------- -------------- -------------- --------------
Net decrease $ (8,497,343) $ (23,908,156) $ (4,401,568) $ (21,915,218)
============== ============== ============== ==============
<Caption>
CLASS C SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
GROWTH OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 98,829 180,590
Shares redeemed (329,588) (1,551,613)
-------------- --------------
Net decrease in shares outstanding (230,759) (1,371,023)
============== ==============
GROWTH OPPORTUNITIES ($)
Shares sold $ 1,308,909 $ 1,773,541
Shares redeemed (3,891,465) (15,424,361)
-------------- --------------
Net decrease $ (2,582,556) $ (13,650,820)
============== ==============
</Table>
86
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS I SHARES CLASS Q SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
GROWTH OPPORTUNITIES (NUMBER OF SHARES)
Shares sold -- 53 -- --
Shares redeemed (115) (271,522) -- (517)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (115) (271,469) -- (517)
============== ============== ============== ==============
GROWTH OPPORTUNITIES ($)
Shares sold $ -- $ 607 $ -- $ --
Shares redeemed (1,607) (2,824,023) -- (5,708)
-------------- -------------- -------------- --------------
Net decrease $ (1,607) $ (2,823,416) $ -- $ (5,708)
============== ============== ============== ==============
<Caption>
CLASS T SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
GROWTH OPPORTUNITIES (NUMBER OF SHARES)
Shares sold -- --
Shares redeemed (719,377) (327,604)
-------------- --------------
Net decrease in shares outstanding (719,377) (327,604)
============== ==============
GROWTH OPPORTUNITIES ($)
Shares sold $ -- $ --
Shares redeemed (7,397,544) (3,256,317)
-------------- --------------
Net decrease $ (7,397,544) $ (3,256,317)
============== ==============
</Table>
- ----------
(1) Effective June 2, 2003, Class "T" Shares converted into the corresponding
"A" Shares within this Fund.
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
LARGECAP GROWTH (NUMBER OF SHARES)
Shares sold 2,379,483 1,731,633 1,719,448 408,627
Shares redeemed (772,500) (2,830,849) (628,817) (2,383,990)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding 1,606,983 (1,099,216) 1,090,631 (1,975,363)
============== ============== ============== ==============
LARGECAP GROWTH ($)
Shares sold $ 36,512,625 $ 23,912,505 $ 26,208,282 $ 5,315,977
Shares redeemed (11,853,996) (38,399,684) (9,498,516) (31,662,290)
-------------- -------------- -------------- --------------
Net increase (decrease) $ 24,658,629 $ (14,487,179) $ 16,709,766 $ (26,346,313)
============== ============== ============== ==============
<Caption>
CLASS C SHARES CLASS I SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
LARGECAP GROWTH (NUMBER OF SHARES)
Shares sold 1,216,567 224,913 158,278 289,678
Shares redeemed (322,731) (1,291,661) (59,401) (325,759)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares
outstanding 893,836 (1,066,748) 98,877 (36,081)
============== ============== ============== ==============
LARGECAP GROWTH ($)
Shares sold $ 18,266,222 $ 2,920,608 $ 2,491,370 $ 3,894,597
Shares redeemed (4,880,113) (17,091,851) (925,751) (4,467,218)
-------------- -------------- -------------- --------------
Net increase (decrease) $ 13,386,109 $ (14,171,243) $ 1,565,619 $ (572,621)
============== ============== ============== ==============
<Caption>
CLASS Q SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
LARGECAP GROWTH (NUMBER OF SHARES)
Shares sold 191,072 133,122
Shares redeemed (152,571) (706,874)
-------------- --------------
Net increase (decrease) in shares
outstanding 38,501 (573,752)
============== ==============
LARGECAP GROWTH ($)
Shares sold $ 2,964,983 $ 1,768,245
Shares redeemed (2,417,171) (9,611,239)
-------------- --------------
Net increase (decrease) $ 547,812 $ (7,842,994)
============== ==============
</Table>
87
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
MIDCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 489,280 992,635 395,051 266,036
Shares redeemed (648,668) (2,775,471) (685,136) (2,287,890)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (159,388) (1,782,836) (290,085) (2,021,854)
============== ============== ============== ==============
MIDCAP OPPORTUNITIES ($)
Shares sold $ 5,307,248 $ 9,131,612 $ 4,225,057 $ 2,389,023
Shares redeemed (7,048,445) (25,266,178) (7,201,652) (20,376,679)
-------------- -------------- -------------- --------------
Net decrease $ (1,741,197) $ (16,134,566) $ (2,976,595) $ (17,987,656)
============== ============== ============== ==============
<Caption>
CLASS C SHARES CLASS I SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
MIDCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 223,533 186,646 8,054 204,879
Shares redeemed (727,230) (2,602,475) (925,842) (2,687,084)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (503,697) (2,415,829) (917,788) (2,482,205)
============== ============== ============== ==============
MIDCAP OPPORTUNITIES ($)
Shares sold $ 2,345,870 $ 1,634,606 $ 89,457 $ 1,868,172
Shares redeemed (7,627,627) (23,006,547) (10,171,439) (24,766,277)
-------------- -------------- -------------- --------------
Net decrease $ (5,281,757) $ (21,371,941) $ (10,081,982) $ (22,898,105)
============== ============== ============== ==============
<Caption>
CLASS Q SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
MIDCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 249,320 441,646
Shares redeemed (321,135) (550,075)
-------------- --------------
Net decrease in shares outstanding (71,815) (108,429)
============== ==============
MIDCAP OPPORTUNITIES ($)
Shares sold $ 2,579,181 $ 4,051,242
Shares redeemed (3,339,336) (5,011,695)
-------------- --------------
Net decrease $ (760,155) $ (960,453)
============== ==============
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
SMALLCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 1,165,264 2,959,197 194,878 297,293
Shares redeemed (2,421,909) (4,076,167) (683,379) (2,120,010)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (1,256,645) (1,116,970) (488,501) (1,822,717)
============== ============== ============== ==============
SMALLCAP OPPORTUNITIES ($)
Shares sold $ 23,934,747 $ 53,600,429 $ 3,893,435 $ 4,862,420
Shares redeemed (47,514,775) (73,261,386) (13,203,004) (35,339,503)
-------------- -------------- -------------- --------------
Net decrease $ (23,580,028) $ (19,660,957) $ (9,309,569) $ (30,477,083)
============== ============== ============== ==============
<Caption>
CLASS C SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
SMALLCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 61,384 182,010
Shares redeemed (574,988) (1,741,349)
-------------- --------------
Net decrease in shares outstanding (513,604) (1,559,339)
============== ==============
SMALLCAP OPPORTUNITIES ($)
Shares sold $ 1,362,436 $ 2,953,005
Shares redeemed (11,079,969) (29,151,596)
-------------- --------------
Net decrease $ (9,717,533) $ (26,198,591)
============== ==============
</Table>
88
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS T SHARES CLASS I SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
SMALLCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 31,584 -- 78,915 167,562
Shares redeemed (135,877) (110,464) (62,264) (146,229)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares
outstanding (104,293) (110,464) 413,779 21,333
============== ============== ============== ==============
SMALLCAP OPPORTUNITIES ($)
Shares sold $ 1,010,979 $ -- $ 1,691,207 $ 2,851,630
Shares redeemed (2,788,141) (1,899,687) (1,277,428) (2,570,785)
-------------- -------------- -------------- --------------
Net increase (decrease) $ (1,777,162) $ (1,899,687) $ 413,779 $ 280,845
============== ============== ============== ==============
<Caption>
CLASS Q SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
SMALLCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 440 18,182
Shares redeemed (16,798) (120,129)
-------------- --------------
Net increase (decrease) in shares
outstanding (16,358) (101,947)
============== ==============
SMALLCAP OPPORTUNITIES ($)
Shares sold $ 11,627 $ 346,249
Shares redeemed (342,876) (2,150,100)
-------------- --------------
Net increase (decrease) $ (331,249) $ (1,803,851)
============== ==============
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
DISCIPLINED LARGECAP (NUMBER OF SHARES)
Shares sold 48,459 1,293,110 190,514 179,270
Shares redeemed (311,276) (1,518,287) (556,290) (1,981,016)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (262,817) (225,177) (365,776) (1,801,746)
============== ============== ============== ==============
DISCIPLINED LARGECAP ($)
Shares sold $ 176,664 $ 8,987,874 $ 1,532,513 $ 1,245,114
Shares redeemed (2,251,210) (10,542,573) (4,385,563) (13,755,648)
-------------- -------------- -------------- --------------
Net decrease $ (2,074,546) $ (1,554,699) $ (2,853,050) $ (12,510,534)
============== ============== ============== ==============
<Caption>
CLASS C SHARES CLASS I SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
DISCIPLINED LARGECAP (NUMBER OF SHARES)
Shares sold 22,962 77,832 -- 466
Shares redeemed (368,353) (1,596,429) -- (10)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding (345,391) (1,518,597) -- 456
============== ============== ============== ==============
DISCIPLINED LARGECAP ($)
Shares sold $ 276,908 $ 548,074 $ -- $ 3,306
Shares redeemed (2,948,147) (10,962,505) -- (73)
-------------- -------------- -------------- --------------
Net increase (decrease) $ (2,671,239) $ (10,414,431) $ -- $ 3,233
============== ============== ============== ==============
</Table>
89
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
FINANCIAL SERVICES (NUMBER OF SHARES)
Shares sold 193,477 1,082,704 193,524 347,119
Dividends reinvested 277,727 432,021 192,903 326,747
Shares redeemed (650,498) (2,484,607) (587,692) (1,819,279)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (179,294) (969,882) (201,265) (1,145,413)
============== ============== ============== ==============
FINANCIAL SERVICES ($)
Shares sold $ 3,966,297 $ 20,078,234 $ 3,912,605 $ 6,388,714
Dividends reinvested 5,632,271 7,547,322 3,886,990 5,695,241
Shares redeemed (13,315,713) (45,376,537) (11,938,978) (33,034,524)
-------------- -------------- -------------- --------------
Net decrease $ (3,717,145) $ (17,750,981) $ (4,139,383) $ (20,950,569)
============== ============== ============== ==============
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
MAGNACAP (NUMBER OF SHARES)
Shares sold 626,962 1,637,596 287,562 342,031
Shares issued in merger 14,679,883 -- 443,560 --
Dividends reinvested 191,553 58,790 -- 52
Shares redeemed (1,554,049) (4,837,146) (743,285) (2,535,432)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares
outstanding 13,944,349 (3,140,760) (12,163) (2,193,349)
============== ============== ============== ==============
MAGNACAP ($)
Shares sold $ 5,722,091 $ 13,316,165 $ 2,801,596 $ 2,679,550
Shares issued in merger 131,292,274 -- 4,106,720 --
Dividends reinvested 1,771,341 471,273 -- 407
Shares redeemed (14,314,149) (39,584,790) (6,582,012) (20,001,817)
-------------- -------------- -------------- --------------
Net increase (decrease) $ 124,471,557 $ (25,797,352) $ 326,304 $ (17,321,860)
============== ============== ============== ==============
<Caption>
CLASS C SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
MAGNACAP (NUMBER OF SHARES)
Shares sold 105,359 455,850
Shares issued in merger 235,540 --
Dividends reinvested -- 20
Shares redeemed (94,691) (471,682)
-------------- --------------
Net increase (decrease) in shares
outstanding 246,208 (15,812)
============== ==============
MAGNACAP ($)
Shares sold $ 1,242,412 $ 3,661,386
Shares issued in merger 2,182,354 --
Dividends reinvested -- 174
Shares redeemed (833,287) (3,860,761)
-------------- --------------
Net increase (decrease) $ 2,591,479 $ (199,201)
============== ==============
<Caption>
CLASS M SHARES CLASS Q SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
MAGNACAP (NUMBER OF SHARES)
Shares sold 24,957 19,464 -- --
Shares issued in merger -- -- 807 --
Dividends reinvested 506 -- 4,830 4,708
Shares redeemed (254,975) (374,176) (847,174) (2,564)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares
outstanding (229,512) (354,712) (841,537) 2,144
============== ============== ============== ==============
MAGNACAP ($)
Shares sold $ 219,676 $ 155,322 $ -- $ --
Shares issued in merger -- -- 7,766 --
Dividends reinvested 4,431 -- 40,556 37,713
Shares redeemed (2,267,097) (3,054,885) (7,709,767) (38,330)
-------------- -------------- -------------- --------------
Net increase (decrease) $ (2,042,990) $ (2,899,563) $ (7,661,445) $ (617)
============== ============== ============== ==============
<Caption>
CLASS I SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
MAGNACAP (NUMBER OF SHARES)
Shares sold -- 777
Shares issued in merger 2 --
Dividends reinvested 11 --
Shares redeemed (2) --
-------------- --------------
Net increase (decrease) in shares
outstanding 11 777
============== ==============
MAGNACAP ($)
Shares sold $ -- $ 6,557
Shares issued in merger 18 --
Dividends reinvested 101 --
Shares redeemed (18) --
-------------- --------------
Net increase (decrease) $ 101 $ 6,557
============== ==============
</Table>
90
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
MIDCAP VALUE (NUMBER OF SHARES)
Shares sold 1,020,618 1,049,073 619,320 818,080
Dividends reinvested -- 34,385 -- 18,033
Shares redeemed (255,071) (1,749,286) (132,498) (507,980)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding 765,547 (665,828) 486,822 328,133
============== ============== ============== ==============
MIDCAP VALUE ($)
Shares sold $ 9,750,292 $ 7,733,617 $ 5,878,403 $ 6,257,727
Dividends reinvested -- 232,444 -- 121,903
Shares redeemed (2,362,174) (11,804,691) (1,223,218) (3,593,419)
-------------- -------------- -------------- --------------
Net increase (decrease) $ 7,388,118 $ (3,838,630) $ 4,655,185 $ 2,786,211
============== ============== ============== ==============
<Caption>
CLASS C SHARES CLASS I SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
MIDCAP VALUE (NUMBER OF SHARES)
Shares sold 505,356 822,471 33,437 21,374
Dividends reinvested -- 13,972 -- 562
Shares redeemed (280,390) (341,110) (327) (5,297)
-------------- -------------- -------------- --------------
Net increase in shares outstanding 224,966 495,333 33,110 16,639
============== ============== ============== ==============
MIDCAP VALUE ($)
Shares sold $ 4,846,501 $ 6,239,930 $ 307,137 $ 154,508
Dividends reinvested -- 94,463 -- 3,799
Shares redeemed (2,473,030) (2,367,968) (2,949) (36,094)
-------------- -------------- -------------- --------------
Net increase $ 2,373,471 $ 3,966,425 $ 304,188 $ 122,213
============== ============== ============== ==============
<Caption>
CLASS Q SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
MIDCAP VALUE (NUMBER OF SHARES)
Shares sold -- 550
Dividends reinvested -- 42
Shares redeemed -- --
-------------- --------------
Net increase in shares outstanding -- 592
============== ==============
MIDCAP VALUE ($)
Shares sold $ -- $ 4,534
Dividends reinvested -- 285
Shares redeemed -- --
-------------- --------------
Net increase $ -- $ 4,819
============== ==============
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
SMALL CAP VALUE (NUMBER OF SHARES)
Shares sold 401,351 746,668 298,953 490,662
Dividends reinvested 83,900 16,962 55,029 6,823
Shares redeemed (155,622) (1,197,761) (111,490) (364,790)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding 329,629 (434,131) 242,492 132,695
============== ============== ============== ==============
SMALL CAP VALUE ($)
Shares sold $ 4,583,685 $ 6,815,426 $ 3,335,227 $ 4,485,147
Dividends reinvested 940,522 145,698 611,375 58,605
Shares redeemed (1,683,176) (10,467,147) (1,203,813) (3,120,196)
-------------- -------------- -------------- --------------
Net increase (decrease) $ 3,841,031 $ (3,506,023) $ 2,742,789 $ 1,423,556
============== ============== ============== ==============
</Table>
91
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS C SHARES CLASS I SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
SMALL CAP VALUE (NUMBER OF SHARES)
Shares sold 350,224 566,589 6,783 30,646
Dividends reinvested 50,521 6,643 1,983 564
Shares redeemed (193,848) (174,091) (362) (10,123)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares
outstanding 206,897 399,141 8,404 21,087
============== ============== ============== ==============
SMALL CAP VALUE ($)
Shares sold $ 3,960,905 $ 5,189,793 $ 74,578 $ 286,003
Dividends reinvested 560,781 57,003 22,291 4,835
Shares redeemed (2,130,817) (1,484,104) (3,887) (78,363)
-------------- -------------- -------------- --------------
Net increase (decrease) $ 2,390,869 $ 3,762,692 $ 92,982 $ 212,475
============== ============== ============== ==============
<Caption>
CLASS Q SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
SMALL CAP VALUE (NUMBER OF SHARES)
Shares sold -- --
Dividends reinvested 4 --
Shares redeemed -- (695)
-------------- --------------
Net increase (decrease) in shares
outstanding 4 (695)
============== ==============
SMALL CAP VALUE ($)
Shares sold $ -- $ --
Dividends reinvested 49 --
Shares redeemed -- (7,606)
-------------- --------------
Net increase (decrease) $ 49 $ (7,606)
============== ==============
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
TAX EFFICIENT EQUITY (NUMBER OF SHARES)
Shares sold 8,740 52,162 6,079 16,842
Shares redeemed (199,023) (525,395) (99,002) (242,184)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (190,283) (473,233) (92,923) (225,342)
============== ============== ============== ==============
TAX EFFICIENT EQUITY ($)
Shares sold $ 79,924 $ 426,204 $ 55,134 $ 132,368
Shares redeemed (1,817,094) (4,130,250) (885,478) (1,924,280)
-------------- -------------- -------------- --------------
Net decrease $ (1,737,170) $ (3,704,046) $ (830,344) $ (1,791,912)
============== ============== ============== ==============
<Caption>
CLASS C SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
TAX EFFICIENT EQUITY (NUMBER OF SHARES)
Shares sold 3,705 4,153
Shares redeemed (12,629) (39,527)
-------------- --------------
Net decrease in shares outstanding (8,924) (35,374)
============== ==============
TAX EFFICIENT EQUITY ($)
Shares sold $ 32,509 $ 32,652
Shares redeemed (113,804) (317,342)
-------------- --------------
Net decrease $ (81,295) $ (284,690)
============== ==============
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
CONVERTIBLE (NUMBER OF SHARES)
Shares sold 761,267 538,399 334,245 421,161
Dividends reinvested 27,982 51,808 23,551 41,633
Shares redeemed (473,546) (1,397,320) (502,882) (1,662,300)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding 315,703 (807,113) (145,086) (1,199,506)
============== ============== ============== ==============
CONVERTIBLE ($)
Shares sold $ 12,627,379 $ 8,104,116 $ 6,191,468 $ 6,866,145
Dividends reinvested 460,270 762,272 424,608 674,288
Shares redeemed (7,890,801) (20,483,502) (9,266,163) (26,789,834)
-------------- -------------- -------------- --------------
Net increase (decrease) $ 5,196,848 $ (11,617,114) $ (2,650,087) $ (19,249,401)
============== ============== ============== ==============
</Table>
92
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS C SHARES CLASS Q SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
CONVERTIBLE (NUMBER OF SHARES)
Shares sold 318,526 283,725 12,883 17,167
Dividends reinvested 18,668 32,094 2,508 8,275
Shares redeemed (349,374) (1,478,629) (52,905) (347,993)
-------------- -------------- -------------- --------------
Net decrease in shares outstanding (12,180) (1,162,810) (37,514) (322,551)
============== ============== ============== ==============
CONVERTIBLE ($)
Shares sold $ 5,521,588 $ 4,341,342 $ 210,012 $ 251,286
Dividends reinvested 314,461 485,833 40,024 117,940
Shares redeemed (6,068,021) (22,218,447) (854,367) (4,929,175)
-------------- -------------- -------------- --------------
Net decrease $ (231,972) $ (17,391,272) $ (604,331) $ (4,559,949)
============== ============== ============== ==============
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
EQUITY AND BOND (NUMBER OF SHARES)
Shares sold 610,750 804,559 198,592 235,194
Dividends reinvested 38,995 87,922 13,657 20,392
Shares redeemed (316,572) (2,874,377) (429,407) (926,352)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstanding 333,173 (1,981,896) (217,158) (670,766)
============== ============== ============== ==============
EQUITY AND BOND ($)
Shares sold $ 7,372,632 $ 8,696,083 $ 2,660,027 $ 2,763,564
Dividends reinvested 458,409 945,153 172,958 237,706
Shares redeemed (3,901,701) (31,480,050) (5,632,863) (10,795,160)
-------------- -------------- -------------- --------------
Net increase (decrease) $ 3,929,340 $ (21,838,814) $ (2,799,878) $ (7,793,890)
============== ============== ============== ==============
<Caption>
CLASS C SHARES CLASS Q SHARES
-------------------------------- --------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
-------------- -------------- -------------- --------------
EQUITY AND BOND (NUMBER OF SHARES)
Shares sold 107,682 151,062 14,880 5,355
Dividends reinvested 11,415 16,285 379 404
Shares redeemed (165,493) (453,636) (6,690) (2,579)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares
outstanding (46,396) (286,289) 8,569 3,180
============== ============== ============== ==============
EQUITY AND BOND ($)
Shares sold $ 1,223,445 $ 1,566,442 $ 173,444 $ 56,544
Dividends reinvested 128,242 168,388 4,429 4,292
Shares redeemed (1,865,922) (4,682,884) (78,989) (27,501)
-------------- -------------- -------------- --------------
Net increase (decrease) $ (837,452) $ (2,948,054) $ 98,884 $ 33,335
============== ============== ============== ==============
<Caption>
CLASS T SHARES
--------------------------------
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003
-------------- --------------
EQUITY AND BOND (NUMBER OF SHARES)
Shares sold -- 666
Dividends reinvested -- 5,021
Shares redeemed (261,871) (96,290)
-------------- --------------
Net increase (decrease) in shares
outstanding (261,871) (90,603)
============== ==============
EQUITY AND BOND ($)
Shares sold $ -- $ 7,881
Dividends reinvested -- 58,222
Shares redeemed (3,302,194) (1,124,406)
-------------- --------------
Net increase (decrease) $ (3,302,194) $ (1,058,303)
============== ==============
</Table>
93
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
-------------------------------- --------------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003(1) 2003 2003(2)
-------------- -------------- -------------- --------------
REAL ESTATE (NUMBER OF SHARES)
Shares sold 469,919 94,587 55,600 16,002
Dividends reinvested 27,082.00 341 2,283 28
Shares redeemed (79,606) (6,170) (421) (2,596)
-------------- -------------- -------------- --------------
Net increase in shares outstanding 417,395 88,758 57,462 13,434
============== ============== ============== ==============
REAL ESTATE ($)
Shares sold $ 4,563,688 $ 1,008,855 $ 671,496 $ 165,222
Dividends reinvested 323,153 3,536 27,387 294
Shares redeemed -- (64,742) (4,979) (26,513)
-------------- -------------- -------------- --------------
Net increase $ 4,886,841 $ 947,649 $ 693,904 $ 139,003
============== ============== ============== ==============
<Caption>
CLASS C SHARES
--------------------------------
SIX MONTHS PERIOD
ENDED ENDED
NOVEMBER 30, MAY 31,
2003 2003(3)
-------------- --------------
REAL ESTATE (NUMBER OF SHARES)
Shares sold 200,117 13,845
Dividends reinvested 8,763 7
Shares redeemed (42,361) --
-------------- --------------
Net increase in shares outstanding 166,519 13,852
============== ==============
REAL ESTATE ($)
Shares sold $ 2,406,837 $ 156,401
Dividends reinvested 107,569 74
Shares redeemed (525,634) --
-------------- --------------
Net increase $ 1,988,772 $ 156,475
============== ==============
</Table>
- ----------
(1) Commenced offering of shares on December 20, 2002.
(2) Commenced offering of shares on November 20, 2002.
(3) Commenced offering of shares on January 17, 2003.
<Table>
<Caption>
CLASS I SHARES
--------------------------------------------------
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, OCTOBER 31,
2003 2003(1) 2002(2)(3)
-------------- -------------- --------------
REAL ESTATE (NUMBER OF SHARES)
Shares sold 1,795,165 2,062,228 2,943
Dividends reinvested 577,473 115,070 343
Shares redeemed (936,769) (962,686) (1,331)
-------------- -------------- --------------
Net increase in shares outstanding 1,435,869 1,214,612 1,955
============== ============== ==============
REAL ESTATE ($)
Shares sold $ 21,312,932 $ 21,890,930 $ 31,057
Dividends reinvested 7,090,849 1,216,742 3,751
Shares redeemed (11,177,422) (10,000,608) (14,352)
-------------- -------------- --------------
Net increase $ 17,226,359 $ 13,107,064 $ 20,456
============== ============== ==============
</Table>
- ----------
(1) Changed its fiscal year end to May 31.
(2) Reflects history of a predecessor mutual fund (see Note 1)
(3) Dollar amounts in thousands.
NOTE 10 -- SECURITIES LENDING
Under an agreement with Bank of New York ("BNY"), the Funds can lend their
securities to approved brokers, dealers and other financial institutions. Loans
are collateralized by cash and U.S. Government securities. The collateral must
be in an amount equal to at least 105% of the market value of non-U.S.
securities loaned and 102% of the market value of U.S. securities loaned. The
cash collateral received is invested in approved investments as defined in the
Securities Lending Agreement with BNY (the "Agreement"). The cash collateral
received is reflected on the Statement of Assets and Liabilities as Cash
collateral for securities loaned. Generally, in the event of counterparty
default, the Funds have the right to use the collateral to offset losses
incurred. The Agreement contains certain guarantees by BNY in the event of
counterparty default and/or a borrower's failure to return a loaned security,
however there would be a potential loss to the Funds in the event the Funds are
delayed or prevented from exercising their right to dispose of the collateral.
The Funds bear the risk of loss with respect to the investment of collateral.
Engaging in securities lending could have a leveraging effect, which may
94
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 10 -- SECURITIES LENDING (CONTINUED)
intensify the credit, market and other risks associated with investing in a
Fund. At November 30, 2003, the Funds had securities on loan with the following
market values:
<Table>
<Caption>
VALUE OF
SECURITIES VALUE OF
LOANED COLLATERAL
------------ ------------
Growth + Value $ 57,447,411 $ 58,996,743
LargeCap Growth 57,570,070 59,067,406
MidCap Opportunities 46,618,611 47,739,843
SmallCap Opportunities 72,495,947 74,561,535
Disciplined LargeCap 531,895 544,335
MagnaCap 68,339,628 69,837,027
MidCap Value 10,233,244 10,703,414
SmallCap Value 6,698,302 7,076,010
Tax Efficient Equity 8,855,052 9,104,544
Convertible 55,005,232 56,440,813
Real Estate 2,330,941 2,353,876
</Table>
NOTE 11 -- WHEN ISSUED SECURITIES
The Equity and Bond Fund, at times, may purchase FNMA/GNMA certificates on a
delayed delivery, forward or when-issued basis with payment and delivery often
taking place a month or more after the initiation of the transaction. It is the
Fund's policy to record when-issued FNMA/GNMA certificates (and the
corresponding obligation to pay for the securities) at the time the purchase
commitment becomes fixed -- generally on the trade date. It is also the Fund's
policy to segregate assets to cover its commitments for when-issued securities
on trade date.
NOTE 12 -- FEDERAL INCOME TAXES
Dividends paid by the Funds from net investment income and distributions of net
realized short-term capital gains are, for federal income tax purposes, taxable
as ordinary income to shareholders. The tax composition of dividends and
distributions to shareholders for six months ended November 30, 2003 were as
follows:
<Table>
<Caption>
ORDINARY LONG-TERM RETURN
INCOME CAPITAL GAINS OF CAPITAL
-------------- -------------- --------------
Financial Services $ 697,897 $ 12,536,310 $ --
MagnaCap 2,104,857 -- --
MidCap Value -- -- --
SmallCap Value -- 2,287,778 --
Convertible 1,968,913 -- --
Equity and Bond 1,041,843 -- --
Real Estate 4,485,166 6,014,297 --
</Table>
The tax composition of dividends and distributions to shareholders for year
ended May 31, 2003 was as follows:
<Table>
<Caption>
ORDINARY LONG-TERM RETURN
INCOME CAPITAL GAINS OF CAPITAL
-------------- -------------- --------------
LargeCap Growth $ 39,544 $ -- $ --
MidCap Opportunities -- -- --
SmallCap Opportunities -- 12,207,533 --
Financial Services 9,145,857 36,691,181 --
Large Company Value 667,555 2,912,638 561,447
MagnaCap 1,362,303 57,821,108 --
Convertible 5,995,821 1,501,596 --
Equity and Bond 4,225,295 143,651 --
Real Estate(1)(2) 4,948,496 -- 282,791
</Table>
The amount of distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations, which
may differ from accounting principles generally accepted in the United States of
America. These "book/tax" differences are either considered temporary or
permanent in nature. Key differences are the treatment of short-term capital
gains, foreign currency transactions, wash sale deferrals and other differences.
To the extend that these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassifications. To the extent
distributions exceed net investment income and/or net realized capital gains for
tax purposes, they are reported as distributions of paid-in capital.
Capital loss carryforwards, which may be used to offset future realized capital
gains for federal income tax purposes were as follows at May 31, 2003:
<Table>
<Caption>
AMOUNT EXPIRATION DATES
------------- ----------------
Growth + Value $ 521,848,512 2009-2011
Growth Opportunities 463,537,631 2009-2011
LargeCap Growth 418,624,352 2008-2011
MidCap Opportunities 183,253,255 2007-2011
SmallCap Opportunities 72,918,566 2008-2011
Disciplined LargeCap 43,471,296 2008-2011
Financial Services 561,113 2011
Large Company Value 13,580,973 2011
MagnaCap 10,576,002 2011
MidCap Value 2,489,425 2011
SmallCap Value 370,613 2011
Tax Efficient Equity 7,756,432 2007-2011
Convertible 99,314,637 2010-2011
Equity and Bond 6,627,917 2010-2011
Real Estate(3) 4,405,808 2007-2008
</Table>
(1) For the Year ended October 31, 2002.
(2) Composition of dividends and distributions presented herein and within the
financial statements may differ from final amounts reported based on the
Fund's tax year end of December 31, 2002.
(3) For the tax year ended December 31, 2002.
95
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 13 -- ILLIQUID SECURITIES
Pursuant to guidelines adopted by the Funds' Board of Directors, the following
securities have been deemed to be illiquid. The Funds currently limit investment
in illiquid securities to 15% of the Fund's net assets, at market value, at time
of purchase.
<Table>
<Caption>
INITIAL PERCENT
ACQUISITION OF NET
FUND SECURITY SHARES DATE COST VALUE ASSETS
- ------------------ ---------------------------- ------ ----------- ------------ ------------ -------
Financial Services Prosperity Bancshares, Inc. 286,600 $ 1,792,009 $ 6,207,756 1.90%
Convertible WinStar Communications, Inc. 51,932 11/06/98 2,364,096 5 0.00%
Equity and Bond Dayton Superior Corp. 400 08/31/01 7,446 4 0.00%
Iridium World Comm 500 08/31/01 50,507 5 0.00%
North Atlantic Trading Co. 370 08/31/01 0 0 0.00%
SA Telecommunications, Inc. -- 08/06/96 2,000,000 0 0.00%
WinStar Communications, Inc. 500,000 386,500 50 0.00%
------------ ------------ ----
$ 2,444,453 $ 59 0.00%
============ ============ ====
</Table>
NOTE 14 -- REORGANIZATION
On November 8, 2003, the MagnaCap Fund as listed below ("Acquiring Fund"),
acquired the assets and certain liabilities of Large Company Value Fund, also
listed below ("Acquired Fund"), in a tax-free reorganization in exchange for
shares of the Acquiring Fund, pursuant to a plan of reorganization approved by
the Acquired Fund's shareholders. The number and value of shares issued by the
Acquiring Fund are presented in Note 9 - Capital Shares. Net assets and
unrealized appreciation/(depreciation) as of the reorganization date were as
follows:
<Table>
<Caption>
ACQUIRED FUND
UNREALIZED
ACQUIRING ACQUIRED TOTAL NET ASSETS OF TOTAL NET ASSETS OF APPRECIATION
FUND FUND ACQUIRED FUND (000) ACQUIRING FUND (000) (DEPRECIATION)(000)
------------ ------------------------ ------------------- -------------------- -------------------
MagnaCap Fund Large Company Value Fund $ 147,505 $ 230,749 $ 9,420
</Table>
NOTE 15 -- OTHER INFORMATION
As with many financial services companies, ING Investments and affiliates of ING
Investments (collectively, "ING") have received requests for information from
various governmental and self-regulatory agencies in connection with
investigations related to trading in investment company shares. In each case,
full cooperation and responses are being provided. ING is also conducting an
internal review of investment company share trading as well as reviewing their
policies and procedures in this area.
NOTE 16 -- SUBSEQUENT EVENTS
On November 11, 2003, the Board of Trustees of ING Funds approved a proposal to
reorganize the ING Growth + Value Fund and the ING Growth Opportunities Fund,
"Disappearing Funds" into the ING MidCap Opportunities Fund, "Surviving Fund"
(the "2004 Reorganization"). The proposed reorganization is subject to approval
by shareholders of the Disappearing Funds. If shareholder approval is obtained,
it is expected that the 2004 Reorganization would take place late in the second
quarter of 2004.
Effective December 1, 2003, the investment management fee for SmallCap
Opportunities changed to the following annual rates based on average daily net
assets:
1.00% on first $100 million;
0.90% on the next $150 million;
0.80% on the next $250 million; and
0.75% in excess of $500 million
96
<Page>
ING
Growth +
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 100.4%
AIRLINES: 1.5%
224,400 @,L Airtran Holdings, Inc. $ 3,312,144
---------------
3,312,144
---------------
APPAREL: 1.6%
84,600 @ Coach, Inc. 3,370,464
---------------
3,370,464
---------------
AUTO PARTS & EQUIPMENT: 1.0%
20,000 Johnson Controls, Inc. 2,188,800
---------------
2,188,800
---------------
BANKS: 2.3%
65,400 Banknorth Group, Inc. 2,143,158
74,800 UCBH Holdings, Inc. 2,924,680
---------------
5,067,838
---------------
BIOTECHNOLOGY: 4.7%
77,200 @,L Celgene Corp. 3,530,356
66,300 @,L Genzyme Corp. 3,098,862
77,200 @,L Integra Lifesciences Holdings Corp. 2,423,308
17,900 @ Invitrogen Corp. 1,220,243
---------------
10,272,769
---------------
BUILDING MATERIALS: 0.5%
11,000 @ American Standard Cos., Inc. 1,096,700
---------------
1,096,700
---------------
COMMERCIAL SERVICES: 5.7%
37,700 @ Alliance Data Systems Corp. 1,130,246
15,800 @,L Apollo Group, Inc. 1,090,674
63,500 @ Career Education Corp. 3,246,755
50,200 @,L Corporate Executive Board Co. 2,439,720
48,100 @ Education Management Corp. 3,251,560
33,100 @ Paychex, Inc. 1,273,357
---------------
12,432,312
---------------
COMPUTERS: 4.9%
43,400 @ CACI Intl., Inc. 2,160,018
30,700 @,L Micros Systems, Inc. 1,328,082
123,600 @,L Netscreen Technologies, Inc. 3,114,720
173,500 @,L Network Appliance, Inc. 4,009,585
---------------
10,612,405
---------------
DISTRIBUTION/WHOLESALE: 0.5%
74,100 @ Ingram Micro, Inc. 1,080,378
---------------
1,080,378
---------------
DIVERSIFIED FINANCIAL SERVICES: 1.0%
170,700 @ Ameritrade Holding Corp. 2,145,699
---------------
2,145,699
---------------
ELECTRICAL COMPONENTS & EQUIPMENT: 1.2%
122,400 American Power Conversion 2,675,664
---------------
2,675,664
---------------
ELECTRONICS: 7.2%
45,000 @,L Agilent Technologies, Inc. 1,272,600
97,050 @ Benchmark Electronics, Inc. 3,564,647
50,400 @,L Dionex Corp. 2,367,792
110,800 L Gentex Corp. $ 4,669,111
93,000 @ Jabil Circuit, Inc. 2,558,430
36,100 @ Waters Corp. 1,154,478
---------------
15,587,058
---------------
ENGINEERING & CONSTRUCTION: 2.1%
57,500 Fluor Corp. 2,107,950
53,100 @ Jacobs Engineering Group, Inc. 2,439,414
---------------
4,547,364
---------------
ENTERTAINMENT: 2.2%
29,500 Gtech Holdings Corp. 1,467,920
97,300 L International Game Technology 3,375,337
---------------
4,843,257
---------------
ENVIRONMENTAL CONTROL: 2.6%
42,000 @ Stericycle, Inc. 2,074,800
138,800 @,L Tetra Tech, Inc. 3,539,400
---------------
5,614,200
---------------
FOOD: 2.7%
65,400 @ Dean Foods Co. 2,145,774
95,300 @,L Performance Food Group Co. 3,746,243
---------------
5,892,017
---------------
HEALTHCARE-PRODUCTS: 5.9%
30,600 @,L Advanced Neuromodulation
Systems, Inc. 1,291,014
36,400 @ Gen-Probe, Inc. 1,263,808
25,900 @ Inamed Corp. 2,029,524
31,800 @,L Patterson Dental Co. 2,165,580
34,100 @ St. Jude Medical, Inc. 2,159,894
35,500 @ Varian Medical Systems, Inc. 2,449,855
22,400 @,L Zimmer Holdings, Inc. 1,476,608
---------------
12,836,283
---------------
HEALTHCARE-SERVICES: 1.7%
37,300 @,L Amsurg Corp. 1,387,933
13,500 @,L Anthem, Inc. 973,620
22,400 @ Coventry Health Care, Inc. 1,341,760
---------------
3,703,313
---------------
HOME FURNISHINGS: 0.9%
13,700 Harman Intl. Industries, Inc. 1,866,899
---------------
1,866,899
---------------
HOUSEHOLD PRODUCTS/WARES: 0.5%
37,800 @ Yankee Candle Co., Inc. 1,115,856
---------------
1,115,856
---------------
INSURANCE: 1.5%
18,400 MBIA, Inc. 1,069,408
62,100 WR Berkley Corp. 2,120,715
---------------
3,190,123
---------------
INTERNET: 0.9%
107,550 @,L United Online, Inc. 1,958,486
---------------
1,958,486
---------------
MACHINERY-DIVERSIFIED: 1.5%
72,300 Cognex Corp. 1,986,081
38,700 Rockwell Automation, Inc. 1,286,775
---------------
3,272,856
---------------
</Table>
See Accompanying Notes to Financial Statements
97
<Page>
ING
Growth +
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
MEDIA: 1.1%
65,100 @,L Univision Communications, Inc. $ 2,348,808
---------------
2,348,808
---------------
MISCELLANEOUS MANUFACTURING: 1.1%
29,100 L Danaher Corp. 2,421,120
---------------
2,421,120
---------------
OFFICE/BUSINESS EQUIPMENT: 1.0%
185,500 @,L Xerox Corp. 2,259,390
---------------
2,259,390
---------------
OIL AND GAS: 4.8%
189,100 L Chesapeake Energy Corp. 2,307,020
91,200 @ Evergreen Resources, Inc. 2,556,336
87,000 Patina Oil & Gas Corp. 3,904,560
56,400 @ Patterson-UTI Energy, Inc. 1,620,372
---------------
10,388,288
---------------
PHARMACEUTICALS: 4.7%
26,700 @ AdvancePCS 1,486,122
26,200 L Allergan, Inc. 1,957,926
89,400 Mylan Laboratories 2,263,608
113,200 Omnicare, Inc. 4,518,944
400 @ Pharmaceutical Resources, Inc. 29,032
---------------
10,255,632
---------------
RETAIL: 12.7%
33,200 Applebees Intl., Inc. 1,285,172
26,000 @,L Autozone, Inc. 2,487,160
51,300 CBRL Group, Inc. 2,116,125
100,400 @,L Chico's Fas, Inc. 3,853,351
49,800 Dollar General Corp. 1,051,776
122,100 @ HOT Topic, Inc. 3,638,580
48,800 L Michaels Stores, Inc. 2,305,800
42,300 @,L Panera Bread Co. 1,648,854
44,000 Petsmart, Inc. 1,063,040
29,400 Regis Corp. 1,203,930
81,200 @,L Sonic Corp. 2,506,644
22,600 Tiffany & Co. 1,024,910
78,400 @ Tractor Supply Co. 3,413,536
---------------
27,598,878
---------------
SAVINGS AND LOANS: 1.7%
23,600 Independence Community Bank 872,728
72,200 New York Community
Bancorp, Inc. 2,804,970
---------------
3,677,698
---------------
SEMICONDUCTORS: 5.2%
111,100 @,L Altera Corp. 2,814,163
91,400 @,L Broadcom Corp. 3,329,702
58,200 Linear Technology Corp. 2,510,748
71,200 @,L Xilinx, Inc. 2,676,408
---------------
11,331,021
---------------
SOFTWARE: 7.1%
62,200 L Adobe Systems, Inc. 2,570,104
91,800 @,L Avid Technology, Inc. 4,854,384
26,300 National Instruments Corp. 1,190,601
143,400 @ Packeteer, Inc. 2,720,155
107,200 @ Veritas Software Corp. 4,075,851
---------------
15,411,095
---------------
TELECOMMUNICATIONS: 3.1%
19,500 L Adtran, Inc. $ 1,283,490
70,900 @,L Foundry Networks, Inc. 1,868,924
92,420 @,L Utstarcom, Inc. 3,500,870
---------------
6,653,284
---------------
TEXTILES: 1.3%
40,400 @ Mohawk Industries, Inc. 2,912,032
---------------
2,912,032
---------------
TRANSPORTATION: 2.0%
56,400 CH Robinson Worldwide, Inc. 2,218,212
38,700 @ Forward Air Corp. 1,100,628
47,100 @ Swift Transportation Co., Inc. 938,232
---------------
4,257,072
---------------
Total Common Stock
(Cost $171,925,517) 218,197,203
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.8%
REPURCHASE AGREEMENT: 0.8%
$ 1,682,000 Morgan Stanley Repurchase
Agreement, 1.030%, due 12/01/03,
$1,682,144 to be received upon
repurchase (Collateralized by
$1,745,000 Student Loan Marketing
Association, 0.000%, Market Value
$1,710,784 due 12/18/03 1,682,000
---------------
Total Short-term Investments
(Cost $1,682,000) 1,682,000
---------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $173,607,517)* 101.2% $ 219,879,203
OTHER ASSETS AND
LIABILITIES-NET (1.2) (2,569,857)
----- ---------------
NET ASSETS 100.0% $ 217,309,346
===== ===============
</Table>
@ Non-income producing security
L Loaned security, a portion or all of the security is on loan at November
30, 2003.
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 47,008,445
Gross Unrealized Depreciation (736,759)
---------------
Net Unrealized Appreciation $ 46,271,686
===============
</Table>
See Accompanying Notes to Financial Statements
98
<Page>
ING
Growth
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 97.4%
AIRLINES: 0.5%
60,000 @ Airtran Holdings, Inc. $ 885,600
---------------
885,600
---------------
APPAREL: 1.5%
69,000 @ Coach, Inc. 2,748,960
---------------
2,748,960
---------------
AUTO PARTS AND EQUIPMENT: 1.3%
21,900 Johnson Controls, Inc. 2,396,736
---------------
2,396,736
---------------
BANKS: 1.0%
54,600 Banknorth Group, Inc. 1,789,242
---------------
1,789,242
---------------
BIOTECHNOLOGY: 4.4%
28,600 @ Amgen, Inc. 1,644,786
64,100 @ Celgene Corp. 2,931,293
58,200 @ Digene Corp. 2,313,450
14,600 @ Invitrogen Corp. 995,282
---------------
7,884,811
---------------
BUILDING MATERIALS: 0.5%
9,200 @ American Standard Cos., Inc. 917,240
---------------
917,240
---------------
COMMERCIAL SERVICES: 4.8%
32,300 @ Alliance Data Systems Corp. 968,354
53,100 @ Career Education Corp. 2,715,003
9,300 @ Corporate Executive Board Co. 451,980
39,000 @ Education Management Corp. 2,636,400
17,400 Strayer Education, Inc. 1,944,102
---------------
8,715,839
---------------
COMPUTERS: 6.5%
41,100 @ CACI Intl., Inc. 2,045,547
58,100 @ Dell, Inc. 2,004,450
299,400 @ EMC Corp. 4,113,756
154,200 @ Network Appliance, Inc. 3,563,562
---------------
11,727,315
---------------
DISTRIBUTION/WHOLESALE: 0.5%
61,600 @ Ingram Micro, Inc. 898,128
---------------
898,128
---------------
DIVERSIFIED FINANCIAL SERVICES: 2.0%
144,000 @ Ameritrade Holding Corp. 1,810,080
38,300 Citigroup, Inc. 1,801,632
---------------
3,611,712
---------------
ELECTRONICS: 4.5%
37,000 @ Agilent Technologies, Inc. 1,046,360
92,200 Gentex Corp. 3,885,308
46,400 @ Jabil Circuit, Inc. 1,276,464
62,500 @ Waters Corp. 1,998,750
---------------
8,206,882
---------------
ENGINEERING AND CONSTRUCTION: 2.2%
50,000 Fluor Corp. 1,833,000
47,500 @ Jacobs Engineering Group, Inc. 2,182,150
---------------
4,015,150
---------------
ENTERTAINMENT: 0.6%
32,200 International Game Technology $ 1,117,018
---------------
1,117,018
---------------
FOOD: 2.4%
59,400 @ Dean Foods Co. 1,948,914
25,800 @ Performance Food Group Co. 1,014,198
36,400 Sysco Corp. 1,322,048
---------------
4,285,160
---------------
HEALTHCARE-PRODUCTS: 7.5%
22,100 @ Advanced Neuromodulation
Systems, Inc. 932,399
41,200 @ Boston Scientific Corp. 1,478,668
30,000 @ Gen-Probe, Inc. 1,041,600
11,200 @ Inamed Corp. 877,632
36,600 Medtronic, Inc. 1,654,320
26,600 @ Patterson Dental Co. 1,811,460
34,415 @ St. Jude Medical, Inc. 2,179,846
16,400 @ Varian Medical Systems, Inc. 1,131,764
38,600 @ Zimmer Holdings, Inc. 2,544,512
---------------
13,652,201
---------------
HEALTHCARE-SERVICES: 2.3%
25,500 A Aetna, Inc. 1,641,690
8,900 @ Coventry Health Care, Inc. 533,110
36,800 UnitedHealth Group, Inc. 1,983,520
---------------
4,158,320
---------------
HOUSEHOLD PRODUCTS/WARES: 0.6%
35,700 @ Yankee Candle Co., Inc. 1,053,864
---------------
1,053,864
---------------
INSURANCE: 2.6%
41,000 Aflac, Inc. 1,474,770
18,200 American Intl. Group 1,054,690
14,800 MBIA, Inc. 860,176
40,500 WR Berkley Corp. 1,383,075
---------------
4,772,711
---------------
INTERNET: 1.6%
89,000 @ InterActiveCorp. 2,923,650
---------------
2,923,650
---------------
MACHINERY-DIVERSIFIED: 2.0%
60,300 Cognex Corp. 1,656,441
59,100 Rockwell Automation, Inc. 1,965,075
---------------
3,621,516
---------------
MEDIA: 2.0%
33,500 @ Echostar Communications Corp. 1,155,080
26,500 @ Univision Communications, Inc. 956,120
38,000 Viacom, Inc. 1,494,160
---------------
3,605,360
---------------
MISCELLANEOUS MANUFACTURING: 1.1%
24,900 Danaher Corp. 2,071,680
---------------
2,071,680
---------------
OIL AND GAS: 6.4%
44,915 Apache Corp. 3,224,897
156,900 Chesapeake Energy Corp. 1,914,180
48,755 @,@@ Nabors Industries Ltd. 1,809,786
87,200 @ Patterson-UTI Energy, Inc. 2,505,256
</Table>
See Accompanying Notes to Financial Statements
99
<Page>
ING
Growth
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
OIL AND GAS (CONTINUED)
85,400 XTO Energy, Inc. $ 2,158,912
---------------
11,613,031
---------------
PHARMACEUTICALS: 6.4%
54,600 @ AdvancePCS 3,039,036
11,800 Allergan, Inc. 881,814
72,600 Mylan Laboratories 1,838,232
101,088 Omnicare, Inc. 4,035,433
55,300 Pfizer, Inc. 1,855,315
---------------
11,649,830
---------------
RETAIL: 12.6%
26,700 Applebees Intl., Inc. 1,033,557
10,900 @ Autozone, Inc. 1,042,694
48,400 CBRL Group, Inc. 1,996,500
78,400 @ Chico's FAS, Inc. 3,008,992
41,600 Dollar General Corp. 878,592
70,950 @ HOT Topic, Inc. 2,114,310
39,900 Michaels Stores, Inc. 1,885,275
58,875 @ Pacific Sunwear of California 1,339,995
35,100 @ Panera Bread Co. 1,368,198
64,500 Petsmart, Inc. 1,558,320
24,400 Regis Corp. 999,180
34,000 @ Sonic Corp. 1,049,580
118,500 @ Staples, Inc. 3,217,275
26,300 Tiffany & Co. 1,192,705
---------------
22,685,173
---------------
SAVINGS AND LOANS: 1.0%
19,600 Independence Community Bank 724,808
25,700 New York Community
Bancorp, Inc. 998,445
---------------
1,723,253
---------------
SEMICONDUCTORS: 7.7%
156,800 @ Altera Corp. 3,971,744
75,500 @ Broadcom Corp. 2,750,465
50,600 Linear Technology Corp. 2,182,884
130,000 @ Xilinx, Inc. 4,886,700
---------------
13,791,793
---------------
SOFTWARE: 4.2%
43,500 Adobe Systems, Inc. 1,797,420
34,200 @ Avid Technology, Inc. 1,808,496
104,914 @ Veritas Software Corp. 3,988,935
---------------
7,594,851
---------------
TELECOMMUNICATIONS: 4.3%
123,300 @ Cisco Systems, Inc. 2,793,978
66,800 @ Nextel Communications, Inc. 1,692,044
86,400 @ Utstarcom, Inc. 3,272,832
---------------
7,758,854
---------------
TEXTILES: 1.4%
33,900 @ Mohawk Industries, Inc. 2,443,512
---------------
2,443,512
---------------
TRANSPORTATION: 1.0%
35,500 @ Forward Air Corp. 1,009,620
39,100 @ Swift Transportation Co., Inc. 778,872
---------------
1,788,492
---------------
Total Common Stock
(Cost $137,300,063) 176,107,884
---------------
MUTUAL FUNDS: 2.5%
EQUITY FUND: 2.5%
43,600 Midcap Spdr Trust Series 1 $ 4,544,864
---------------
Total Mutual Funds
(Cost $4,406,166) 4,544,864
---------------
Total Long-Term Investments
(Cost $141,706,229) $ 180,652,748
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.4%
REPURCHASE AGREEMENT: 0.4%
$ 790,000 Morgan Stanley Repurchase
Agreement dated 11/28/03,
1.030%, due 12/01/03,
$790,068 to be received upon
repurchase (Collateralized by
$805,000 Student Loan Marketing
Association, 0.000%, Market Value
$805,000, due 12/18/03 and
$10,000 U.S. Treasury Bill,
0.000%, Market Value $9,996,
due 12/11/03) 790,000
---------------
Total Short-term Investments
(Cost $790,000) 790,000
---------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $142,496,229)* 100.3% $ 181,442,748
OTHER ASSETS AND
LIABILITIES-NET (0.3) (519,757)
----- ---------------
NET ASSETS 100.0% $ 180,922,991
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
A Related Party
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 40,138,947
Gross Unrealized Depreciation (1,192,428)
---------------
Net Unrealized Appreciation $ 38,946,519
===============
</Table>
See Accompanying Notes to Financial Statements
100
<Page>
ING
LargeCap
Growth
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 98.0%
ADVERTISING: 3.5%
114,930 Omnicom Group $ 9,155,324
---------------
9,155,324
---------------
BIOTECHNOLOGY: 0.7%
40,480 @ Genzyme Corp. 1,892,035
---------------
1,892,035
---------------
COMMERCIAL SERVICES: 7.5%
178,760 @,L Apollo Group, Inc. 12,339,803
43,700 McKesson Corp. 1,276,040
103,200 Moody's Corp. 5,911,296
---------------
19,527,139
---------------
COMPUTERS: 8.9%
361,940 @ Dell, Inc. 12,486,930
374,680 @ EMC Corp. 5,148,103
178,510 @@ Seagate Technology, Inc. 3,525,573
83,170 @ Sungard Data Systems, Inc. 2,247,253
---------------
23,407,859
---------------
DIVERSIFIED FINANCIAL SERVICES: 10.5%
45,590 L Capital One Financial Corp. 2,722,635
133,090 Citigroup, Inc. 6,260,554
127,460 Countrywide Financial Corp. 13,459,776
34,770 Fannie Mae 2,433,900
53,110 Franklin Resources, Inc. 2,540,251
---------------
27,417,116
---------------
HEALTHCARE-PRODUCTS: 4.2%
192,890 Guidant Corp. 10,950,365
---------------
10,950,365
---------------
HOME BUILDERS: 1.4%
36,490 Lennar Corp. 3,572,371
---------------
3,572,371
---------------
INSURANCE: 1.8%
132,700 @@ ACE Ltd. 4,836,915
---------------
4,836,915
---------------
INTERNET: 10.9%
140,490 @,L eBay, Inc. 7,846,367
65,330 L InterActiveCorp. 2,146,091
211,420 @,L Symantec Corp. 6,940,919
273,330 @,L Yahoo!, Inc. 11,747,722
---------------
28,681,099
---------------
MEDIA: 9.0%
59,340 L Clear Channel
Communications, Inc. 2,481,005
190,630 L Comcast Corp. 5,747,495
72,850 L Cox Communications, Inc. 2,469,615
159,120 Echostar Communications Corp. 5,486,458
202,980 @,L Univision Communications, Inc. 7,323,518
---------------
23,508,091
---------------
PHARMACEUTICALS: 14.6%
110,320 Abbott Laboratories $ 4,876,144
208,630 @@,L AstraZeneca PLC ADR 9,586,548
144,740 L Eli Lilly & Co. 9,923,373
114,840 @ Forest Laboratories, Inc. 6,274,858
24,750 @,L Gilead Sciences, Inc. 1,452,330
93,530 @ Medco Health Solutions, Inc. 3,407,298
157,520 @@ Serono SA ADR 2,721,946
---------------
38,242,497
---------------
RETAIL: 4.5%
96,080 @ Autozone, Inc. 9,191,013
43,490 Best Buy Co., Inc. 2,696,380
---------------
11,887,393
---------------
SEMICONDUCTORS: 5.4%
302,570 @,L Altera Corp. 7,664,098
130,460 Analog Devices, Inc. 6,490,385
---------------
14,154,483
---------------
SOFTWARE: 8.5%
228,930 L Bea Systems, Inc. 2,907,411
254,810 L First Data Corp. 9,644,559
65,170 @,L Mercury Interactive Corp. 3,049,956
255,020 Microsoft Corp. 6,554,014
---------------
22,155,940
---------------
TELECOMMUNICATIONS: 6.6%
93,930 @@ Amdocs Ltd. 2,350,129
865,300 @,L Corning, Inc. 9,916,338
41,076 NTL, Inc. 2,676,512
151,010 @@,L Telefonaktiebolaget LM
Ericsson ADR 2,452,402
---------------
17,395,381
---------------
Total Common Stock
(Cost $227,643,719) 256,784,008
---------------
TOTAL INVESTMENTS IN
SECURITIES (COST
$227,643,719)* 98.0% $ 256,784,008
OTHER ASSETS AND
LIABILITIES-NET 2.0 5,156,454
----- ---------------
NET ASSETS 100.0% $ 261,940,462
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
ADR American Depositary Receipt
PLC Public Limited Company
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 32,197,527
Gross Unrealized Depreciation (3,057,238)
---------------
Net Unrealized Appreciation $ 29,140,289
===============
</Table>
See Accompanying Notes to Financial Statements
101
<Page>
ING
MidCap
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 100.0%
AIRLINES: 0.4%
52,000 @ Airtran Holdings, Inc. $ 767,520
---------------
767,520
---------------
APPAREL: 1.4%
61,000 @ Coach, Inc. 2,430,240
---------------
2,430,240
---------------
AUTO PARTS AND EQUIPMENT: 1.3%
20,300 Johnson Controls, Inc. 2,221,632
---------------
2,221,632
---------------
BANKS: 1.6%
24,700 Bank of Hawaii Corp. 1,021,345
53,300 Banknorth Group, Inc. 1,746,641
---------------
2,767,986
---------------
BIOTECHNOLOGY: 2.2%
62,910 @,L Celgene Corp. 2,876,874
15,600 @ Invitrogen Corp. 1,063,452
---------------
3,940,326
---------------
BUILDING MATERIALS: 1.3%
22,700 @ American Standard Cos., Inc. 2,263,190
---------------
2,263,190
---------------
CHEMICALS: 0.6%
14,000 Praxair, Inc. 1,004,920
---------------
1,004,920
---------------
COMMERCIAL SERVICES: 5.3%
30,600 @ Alliance Data Systems Corp. 917,388
51,800 @ Career Education Corp. 2,648,534
40,500 @ Corporate Executive Board Co. 1,968,300
43,400 @ Education Management Corp. 2,933,840
25,800 @ Paychex, Inc. 992,526
---------------
9,460,588
---------------
COMPUTERS: 2.9%
42,000 @ CACI Intl., Inc. 2,090,340
134,300 @,L Network Appliance, Inc. 3,103,673
---------------
5,194,013
---------------
DISTRIBUTION/WHOLESALE: 0.5%
60,300 @ Ingram Micro, Inc. 879,174
---------------
879,174
---------------
DIVERSIFIED FINANCIAL SERVICES: 2.0%
139,100 @,L Ameritrade Holding Corp. 1,748,487
24,300 Bear Stearns Cos., Inc. 1,760,778
---------------
3,509,265
---------------
ELECTRICAL COMPONENTS & EQUIPMENT: 1.3%
104,900 American Power Conversion 2,293,114
---------------
2,293,114
---------------
ELECTRONICS: 5.4%
38,000 @,L Agilent Technologies, Inc. 1,074,640
112,700 L Gentex Corp. 4,749,178
66,700 @ Jabil Circuit, Inc. 1,834,917
60,200 @ Waters Corp. 1,925,196
---------------
9,583,931
---------------
ENGINEERING & CONSTRUCTION: 2.6%
44,700 L Fluor Corp. $ 1,638,702
63,700 @ Jacobs Engineering Group, Inc. 2,926,378
---------------
4,565,080
---------------
ENTERTAINMENT: 0.7%
33,300 L International Game Technology 1,155,177
---------------
1,155,177
---------------
FOOD: 2.2%
58,000 @ Dean Foods Co. 1,902,980
48,700 @,L Performance Food Group Co. 1,914,397
---------------
3,817,377
---------------
HEALTHCARE-PRODUCTS: 7.0%
30,800 @ Gen-Probe, Inc. 1,069,376
10,900 @ Inamed Corp. 854,124
25,900 @,L Patterson Dental Co. 1,763,790
35,400 @ St. Jude Medical, Inc. 2,242,236
60,200 @,L Varian Medical Systems, Inc. 4,154,402
37,100 @,L Zimmer Holdings, Inc. 2,445,632
---------------
12,529,560
---------------
HEALTHCARE-SERVICES: 2.2%
23,300 A Aetna, Inc. 1,500,054
29,600 @ Amsurg Corp. 1,101,416
11,500 @,L Anthem, Inc. 829,380
8,700 @ Coventry Health Care, Inc. 521,130
---------------
3,951,980
---------------
HOME FURNISHINGS: 0.9%
12,100 Harman Intl. Industries, Inc. 1,648,867
---------------
1,648,867
---------------
HOUSEHOLD PRODUCTS/WARES: 0.6%
37,200 @ Yankee Candle Co., Inc. 1,098,144
---------------
1,098,144
---------------
INSURANCE: 2.5%
31,800 MBIA, Inc. 1,848,216
48,500 @ Proassurance Corp. 1,498,650
31,150 WR Berkley Corp. 1,063,773
---------------
4,410,639
---------------
INTERNET: 1.1%
59,200 @,L InterActiveCorp. 1,944,720
---------------
1,944,720
---------------
MACHINERY-DIVERSIFIED: 3.1%
58,400 Cognex Corp. 1,604,248
73,300 Rockwell Automation, Inc. 2,437,225
21,900 @ Zebra Technologies Corp. 1,392,183
---------------
5,433,656
---------------
MEDIA: 2.0%
40,900 @ Echostar Communications Corp. 1,410,232
59,300 @,L Univision Communications, Inc. 2,139,544
---------------
3,549,776
---------------
MISCELLANEOUS MANUFACTURING: 1.1%
23,000 L Danaher Corp. 1,913,600
---------------
1,913,600
---------------
</Table>
See Accompanying Notes to Financial Statements
102
<Page>
ING
MidCap
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
OFFICE/BUSINESS EQUIPMENT: 1.1%
159,400 @,L Xerox Corp. $ 1,941,492
---------------
1,941,492
---------------
OIL AND GAS: 5.4%
26,100 Apache Corp. 1,873,980
85,400 L Chesapeake Energy Corp. 1,041,880
21,400 Devon Energy Corp. 1,056,304
23,900 @,@@,L Nabors Industries Ltd. 887,168
94,100 @ Patterson-UTI Energy, Inc. 2,703,493
79,300 L XTO Energy, Inc. 2,004,704
---------------
9,567,529
---------------
PHARMACEUTICALS: 5.7%
49,900 @,L AdvancePCS 2,777,434
23,500 L Allergan, Inc. 1,756,155
71,150 Mylan Laboratories 1,801,518
93,800 Omnicare, Inc. 3,744,496
---------------
10,079,603
---------------
RETAIL: 15.0%
22,400 @,L Autozone, Inc. 2,142,784
40,900 @ Bed Bath & Beyond, Inc. 1,727,616
51,000 CBRL Group, Inc. 2,103,750
69,600 @,L Chico's FAS, Inc. 2,671,248
40,600 Dollar General Corp. 857,472
99,000 @ HOT Topic, Inc. 2,950,200
41,000 L Michaels Stores, Inc. 1,937,250
34,400 @,L Panera Bread Co. 1,340,912
62,800 Petsmart, Inc. 1,517,248
24,000 Regis Corp. 982,800
62,100 @ Sonic Corp. 1,917,027
123,400 @ Staples, Inc. 3,350,310
57,700 Tiffany & Co. 2,616,695
12,800 @ Tractor Supply Co. 557,312
---------------
26,672,624
---------------
SAVINGS AND LOANS: 1.8%
19,100 Independence Community Bank 706,318
63,866 New York Community
Bancorp, Inc. 2,481,194
---------------
3,187,512
---------------
SEMICONDUCTORS: 5.9%
113,700 @,L Altera Corp. 2,880,021
77,400 @,L Broadcom Corp. 2,819,682
47,800 Linear Technology Corp. 2,062,092
69,500 @,L Xilinx, Inc. 2,612,505
---------------
10,374,300
---------------
SOFTWARE: 6.9%
53,600 L Adobe Systems, Inc. 2,214,752
33,300 @,L Avid Technology, Inc. 1,760,904
43,300 @ D&B Corp. 2,089,225
59,500 Fair Isaac Corp. 3,282,020
81,800 @ Veritas Software Corp. 3,110,118
---------------
12,457,019
---------------
TELECOMMUNICATIONS: 1.7%
77,425 @,L Utstarcom, Inc. $ 2,932,859
---------------
2,932,859
---------------
TEXTILES: 1.3%
32,600 @ Mohawk Industries, Inc. 2,349,808
---------------
2,349,808
---------------
TOYS/GAMES/HOBBIES: 0.5%
28,400 @,L Leapfrog Enterprises, Inc. 891,760
---------------
891,760
---------------
TRANSPORTATION: 2.5%
68,900 CH Robinson Worldwide, Inc. 2,709,837
31,600 @ Forward Air Corp. 898,704
38,400 @,L Swift Transportation Co., Inc. 764,928
---------------
4,373,469
---------------
Total Common Stock
(Cost $137,131,706) 177,162,450
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.4%
REPURCHASE AGREEMENT: 0.4%
$ 679,000 Morgan Stanley Repurchase
Agreement dated 11/28/03,
1.030%, due 12/01/03,
$679,058 to be received upon
repurchase (Collateralized by
$690,000 Student Loan Marketing
Association, 0.000%, Market Value
$690,000, due 12/18/03 and
$10,000 U.S. Treasury Bill, 0.000%,
Market Value $9,996, due 12/11/03) 679,000
---------------
Total Short-term Investments
(Cost $679,000) 679,000
---------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $137,810,706)* 100.4% $ 177,841,450
OTHER ASSETS AND
LIABILITIES-NET (0.4) (773,222)
----- ---------------
NET ASSETS 100.0% $ 177,068,228
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
A Related Party
L Loaned security, a portion or all of this security is on loan as of
November 30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 40,612,511
Gross Unrealized Depreciation (581,767)
---------------
Net Unrealized Appreciation $ 40,030,744
===============
</Table>
See Accompanying Notes to Financial Statements
103
<Page>
ING
SmallCap
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 96.1%
AEROSPACE/DEFENSE: 0.8%
43,950 Engineered Support
Systems, Inc. $ 2,329,350
---------------
2,329,350
---------------
AIRLINES: 1.2%
252,200 @,L Airtran Holdings, Inc. 3,722,472
---------------
3,722,472
---------------
BANKS: 4.2%
136,300 Southwest Bancorp of
Texas, Inc. 5,210,749
67,800 UCBH Holdings, Inc. 2,650,980
97,300 Westamerica Bancorporation 5,137,440
---------------
12,999,169
---------------
BIOTECHNOLOGY: 5.0%
36,300 @,L Celgene Corp. 1,659,999
105,500 @,L Digene Corp. 4,193,625
144,000 @,L Integra Lifesciences
Holdings Corp. 4,520,160
82,985 @,L Martek Biosciences Corp. 5,040,509
---------------
15,414,293
---------------
COMMERCIAL SERVICES: 5.5%
216,300 @,L Administaff, Inc. 3,235,848
61,400 @ Advisory Board Co. 2,254,608
51,000 @ Concorde Career Colleges, Inc. 1,351,500
44,300 @ Corporate Executive Board Co. 2,152,980
36,600 @,L Education Management Corp. 2,474,160
48,400 Strayer Education, Inc. 5,407,732
---------------
16,876,828
---------------
COMPUTERS: 7.5%
114,200 @ Anteon Intl. Corp. 4,357,872
67,200 @ CACI Intl., Inc. 3,344,544
167,100 @ Cognizant Technology
Solutions Corp. 7,664,877
259,800 @,L Cray, Inc. 2,720,106
88,600 @,L Micros Systems, Inc. 3,832,836
47,700 @,L Netscreen Technologies, Inc. 1,202,040
---------------
23,122,275
---------------
DISTRIBUTION/WHOLESALE: 1.8%
153,100 @ SCP Pool Corp. 5,484,042
---------------
5,484,042
---------------
ELECTRICAL COMPONENTS & EQUIPMENT: 1.5%
111,300 @ Wilson Greatbatch
Technologies, Inc. 4,663,470
---------------
4,663,470
---------------
ELECTRONICS: 1.7%
145,800 @,L Benchmark Electronics, Inc. 5,355,234
---------------
5,355,234
---------------
ENTERTAINMENT: 2.8%
81,500 GTECH Holdings Corp. 4,055,440
66,200 @ Penn National Gaming, Inc. 1,563,644
105,415 @,L Shuffle Master, Inc. 3,152,963
---------------
8,772,047
---------------
ENVIRONMENTAL CONTROL: 2.4%
29,400 @,L Stericycle, Inc. $ 1,452,360
237,200 @,L Tetra Tech, Inc. 6,048,600
---------------
7,500,960
---------------
FOOD: 3.3%
59,850 Flowers Foods, Inc. 1,562,085
141,600 @,L Performance Food Group Co. 5,566,296
76,900 @ United Natural Foods, Inc. 2,952,191
---------------
10,080,572
---------------
HEALTHCARE-PRODUCTS: 7.3%
82,350 @,L Advanced Neuromodulation
Systems, Inc. 3,474,347
74,300 @ Gen-Probe, Inc. 2,579,696
56,200 @ Inamed Corp. 4,403,832
157,401 @ Kyphon, Inc. 4,312,787
43,500 @,L Techne Corp. 1,569,480
256,520 @ Thoratec Corp. 3,614,367
92,300 @ Wright Medical Group, Inc. 2,571,478
---------------
22,525,987
---------------
HEALTHCARE-SERVICES: 4.2%
186,600 @ Amsurg Corp. 6,943,386
63,000 @ Odyssey Healthcare, Inc. 2,243,430
42,600 @,L Pediatrix Medical Group, Inc. 2,285,916
104,300 @ Province Healthcare Co. 1,598,919
---------------
13,071,651
---------------
HOUSEHOLD PRODUCTS/WARES: 0.9%
97,600 @ Yankee Candle Co., Inc. 2,881,152
---------------
2,881,152
---------------
INSURANCE: 2.8%
95,245 L HCC Insurance Holdings, Inc. 2,963,072
63,700 @ Philadelphia Consolidated
Holding Co. 3,225,131
83,600 @,L Proassurance Corp. 2,583,240
---------------
8,771,443
---------------
INTERNET: 1.7%
83,200 @ At Road, Inc. 1,047,488
65,343 @,L Digital Insight Corp. 1,553,203
74,700 @,L Digital River, Inc. 1,718,847
48,570 @ eCollege.com, Inc. 1,078,254
---------------
5,397,792
---------------
LODGING: 1.0%
98,600 Station Casinos, Inc. 3,074,348
---------------
3,074,348
---------------
MACHINERY-DIVERSIFIED: 1.3%
148,760 Cognex Corp. 4,086,437
---------------
4,086,437
---------------
MISCELLANEOUS MANUFACTURING: 1.1%
11,200 @ Applied Films Corp. 371,728
68,400 @ Esco Technologies, Inc. 2,907,000
---------------
3,278,728
---------------
OIL AND GAS: 3.8%
118,600 @,L Evergreen Resources, Inc. 3,324,358
47,750 Patina Oil & Gas Corp. 2,143,020
</Table>
See Accompanying Notes to Financial Statements
104
<Page>
ING
SmallCap
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
OIL AND GAS (CONTINUED)
184,600 @ Southwestern Energy Co. $ 3,767,686
117,000 @ Unit Corp. 2,410,200
---------------
11,645,264
---------------
PHARMACEUTICALS: 2.1%
30,200 @,L Pharmaceutical Resources, Inc. 2,191,916
133,749 @ VCA Antech, Inc. 4,179,656
---------------
6,371,572
---------------
RETAIL: 14.3%
87,400 L Applebees Intl., Inc. 3,383,254
137,800 CBRL Group, Inc. 5,684,250
135,200 @,L Chico's FAS, Inc. 5,188,976
50,200 @,L Dick's Sporting Goods, Inc. 2,639,516
216,975 @ HOT Topic, Inc. 6,465,854
100,400 MSC Industrial Direct Co. 2,644,536
240,842 @ Pacific Sunwear of California 5,481,564
59,400 @ Panera Bread Co. 2,315,412
72,800 @ Petco Animal Supplies, Inc. 2,435,888
31,200 @,L PF Chang's China Bistro, Inc. 1,684,176
40,800 Regis Corp. 1,670,760
110,300 @,L Sonic Corp. 3,404,961
20,000 @ Tractor Supply Co. 870,800
---------------
43,869,947
---------------
SEMICONDUCTORS: 5.5%
131,500 @ Actel Corp. 3,604,415
453,600 @ GlobespanVirata, Inc. 2,785,104
258,700 @,L Kulicke & Soffa Industries, Inc. 4,263,376
42,500 @ Mattson Technology, Inc. 652,375
88,700 @ Omnivision Technologies, Inc. 5,779,692
---------------
17,084,962
---------------
SOFTWARE: 5.1%
126,000 @,L Avid Technology, Inc. 6,662,880
53,700 Global Payments, Inc. 2,437,980
349,400 @ Packeteer, Inc. 6,627,769
---------------
15,728,629
---------------
TELECOMMUNICATIONS: 4.5%
59,800 L Adtran, Inc. 3,936,036
320,600 @,L Foundry Networks, Inc. 8,451,016
50,400 @,L KVH Industries, Inc. 1,589,616
---------------
13,976,668
---------------
TOYS/GAMES/HOBBIES: 1.1%
91,700 @,L Leapfrog Enterprises, Inc. 2,879,380
21,200 @ RC2 Corp. 451,136
---------------
3,330,516
---------------
TRANSPORTATION: 1.7%
54,600 @ Forward Air Corp. 1,552,824
153,060 @ Knight Transportation, Inc. 3,708,644
---------------
5,261,468
---------------
Total Common Stock
(Cost $204,172,216) 296,677,276
---------------
MUTUAL FUNDS: 1.7%
EQUITY FUND: 1.7%
85,965 L I Shares Russell 2000 Growth
Index Fund $ 5,097,725
---------------
Total Mutual Funds
(Cost $4,221,164) 5,097,725
---------------
Total Long-Term Investments
(Cost $208,393,380) 301,775,001
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 2.6%
REPURCHASE AGREEMENT: 2.6%
$ 7,950,000 Repurchase Agreement
dated 11/28/03, 1.060%,
due 12/01/03, $7,950,702 to
be received upon repurchase
(Collateralized by Federal
National Mortgage Association,
4.750%, market value $7,950,563,
due 02/21/2013), 1.06%,
due 12/01/03 7,950,000
---------------
Total Short-term Investments
(Cost $7,950,000) 7,950,000
---------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $216,343,380)* 100.4% $ 309,725,001
OTHER ASSETS AND
LIABILITIES-NET (0.4) (1,221,684)
----- ---------------
NET ASSETS 100.0% $ 308,503,317
===== ===============
</Table>
@ Non-income producing security
L Loaned security, a portion or all of the security is on loan at November
30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 94,744,418
Gross Unrealized Depreciation (1,362,797)
---------------
Net Unrealized Appreciation $ 93,381,621
===============
</Table>
See Accompanying Notes to Financial Statements
105
<Page>
ING
Disciplined
LargeCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 100.0%
ADVERTISING: 0.6%
6,300 Omnicom Group $ 501,858
---------------
501,858
---------------
AEROSPACE/DEFENSE: 0.9%
6,950 Boeing Co. 266,811
4,350 Goodrich Corp. 119,669
3,850 United Technologies Corp. 329,944
---------------
716,424
---------------
AGRICULTURE: 1.4%
16,600 Altria Group, Inc. 863,200
11,450 Monsanto Co. 310,524
---------------
1,173,724
---------------
APPAREL: 0.9%
4,900 Jones Apparel Group, Inc. 169,050
8,200 Nike, Inc. 551,450
---------------
720,500
---------------
AUTO MANUFACTURERS: 1.5%
48,500 Ford Motor Co. 640,200
4,250 General Motors Corp. 181,815
4,700 @ Paccar, Inc. 376,987
---------------
1,199,002
---------------
AUTO PARTS & EQUIPMENT: 0.2%
21,250 Delphi Corp. 186,575
---------------
186,575
---------------
BANKS: 6.1%
21,850 Bank of America Corp. 1,648,145
9,150 Bank One Corp. 396,744
13,250 SouthTrust Corp. 425,988
15,950 US Bancorp 441,975
23,800 Wachovia Corp. 1,088,849
13,500 Wells Fargo & Co. 773,954
3,750 Zions Bancorporation 231,263
---------------
5,006,918
---------------
BEVERAGES: 2.8%
20,100 Coca-Cola Co. 934,650
28,300 PepsiCo, Inc. 1,361,796
---------------
2,296,446
---------------
BIOTECHNOLOGY: 0.7%
10,464 @ Amgen, Inc. 601,785
---------------
601,785
---------------
CHEMICALS: 0.6%
7,550 Dow Chemical Co. 283,503
5,850 Engelhard Corp. 174,447
3,800 @ Hercules, Inc. 38,152
---------------
496,102
---------------
COMMERCIAL SERVICES: 1.8%
28,900 @ Cendant Corp. 640,424
7,350 H&R Block, Inc. 399,032
12,000 @ Paychex, Inc. 461,640
---------------
1,501,096
---------------
COMPUTERS: 5.0%
14,300 @ Apple Computer, Inc. $ 299,156
20,650 @ Dell, Inc. 712,425
52,200 @ EMC Corp. 717,228
22,937 Hewlett-Packard Co. 497,504
13,850 @ International Business
Machines Corp. 1,253,979
4,900 @ Lexmark Intl., Inc. 379,260
12,800 @ Network Appliance, Inc. 295,808
18,700 X Seagate Technology, Inc. --
---------------
4,155,360
---------------
COSMETICS/PERSONAL CARE: 3.0%
23,750 Gillette Co. 801,088
12,650 Kimberly-Clark Corp. 685,883
10,450 Procter & Gamble Co. 1,005,708
---------------
2,492,679
---------------
DIVERSIFIED FINANCIAL SERVICES: 9.2%
10,700 American Express Co. 489,097
4,150 Bear Stearns Cos., Inc. 300,709
7,850 Capital One Financial Corp. 468,802
41,650 Citigroup, Inc. 1,959,215
4,800 Countrywide Financial Corp. 506,880
8,200 Fannie Mae 574,000
34,550 JP Morgan Chase & Co. 1,221,688
8,000 Lehman Brothers Holdings, Inc. 577,680
17,950 Merrill Lynch & Co., Inc. 1,018,663
8,800 Morgan Stanley 486,464
---------------
7,603,198
---------------
ELECTRIC: 2.7%
23,250 @ AES Corp. 206,228
12,750 Centerpoint Energy, Inc. 123,675
6,850 Constellation Energy Group, Inc. 257,834
14,150 @ Edison Intl. 288,943
9,400 Exelon C 581,108
6,000 Southern Co. 175,620
12,600 TXU Corp. 278,964
16,550 Xcel Energy, Inc. 276,385
---------------
2,188,757
---------------
ELECTRICAL COMPONENTS & EQUIPMENT: 0.3%
3,450 Emerson Electric Co. 210,588
---------------
210,588
---------------
ELECTRONICS: 0.4%
4,300 Perkinelmer, Inc. 72,713
19,300 @ Sanmina-SCI Corp. 235,267
---------------
307,980
---------------
FOOD: 1.1%
18,900 Conagra Foods, Inc. 463,050
12,850 HJ Heinz Co. 463,885
---------------
926,935
---------------
FOREST PRODUCTS & PAPER: 0.3%
4,200 International Paper Co. 156,282
4,700 @ Louisiana-Pacific Corp. 85,023
---------------
241,305
---------------
HAND/MACHINE TOOLS: 0.1%
2,550 Snap-On, Inc. 76,551
---------------
76,551
---------------
</Table>
See Accompanying Notes to Financial Statements
106
<Page>
ING
Disciplined
LargeCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
HEALTHCARE-PRODUCTS: 2.9%
19,750 @ Boston Scientific Corp. $ 708,828
9,500 Guidant Corp. 539,315
23,800 Johnson & Johnson 1,173,102
---------------
2,421,245
---------------
HEALTHCARE-SERVICES: 2.2%
5,400 @ Anthem, Inc. 389,448
6,400 @ Humana, Inc. 142,912
13,850 UnitedHealth Group, Inc. 746,515
5,500 @ WellPoint Health Networks 514,195
---------------
1,793,070
---------------
HOME FURNISHINGS: 0.2%
2,800 Whirlpool Corp. 191,296
---------------
191,296
---------------
HOUSEHOLD PRODUCTS/WARES: 0.5%
5,550 Fortune Brands, Inc. 379,176
---------------
379,176
---------------
INSURANCE: 4.0%
11,300 @@ ACE Ltd. 411,885
21,150 American Intl. Group 1,225,642
7,000 Chubb Corp. 458,150
5,700 Cigna Corp. 305,805
7,250 Lincoln National Corp. 284,273
15,250 Prudential Financial, Inc. 596,428
---------------
3,282,183
---------------
INTERNET: 0.8%
5,200 @ eBay, Inc. 290,420
11,400 @ Symantec Corp. 374,262
---------------
664,682
---------------
MACHINERY-CONSTRUCTION & MINING: 0.3%
2,900 Caterpillar, Inc. 220,545
---------------
220,545
---------------
MACHINERY-DIVERSIFIED: 0.9%
8,150 Deere & Co. 499,025
7,500 Rockwell Automation, Inc. 249,375
---------------
748,400
---------------
MEDIA: 2.4%
17,750 @ Comcast Corp. 556,995
6,500 McGraw-Hill Cos., Inc. 445,250
35,400 @ Time Warner, Inc. 576,312
16,100 Walt Disney Co. 371,749
---------------
1,950,306
---------------
MINING: 0.5%
7,300 @ Alcoa, Inc. 239,513
3,600 Newmont Mining Corp. 173,304
---------------
412,817
---------------
MISCELLANEOUS MANUFACTURING: 5.4%
14,300 @ 3M Co. 1,130,272
5,550 Danaher Corp. 461,760
81,050 General Electric Co. 2,323,703
6,900 Honeywell Intl., Inc. 204,861
16,200 @@ Tyco Intl. Ltd. 371,790
---------------
4,492,386
---------------
OFFICE/BUSINESS EQUIPMENT: 0.5%
9,550 Pitney Bowes, Inc. $ 379,613
---------------
379,613
---------------
OIL AND GAS: 6.3%
16,400 ChevronTexaco Corp. 1,231,639
13,678 ConocoPhillips 776,090
8,250 Devon Energy Corp. 407,220
50,100 Exxon Mobil Corp. 1,812,116
12,300 Marathon Oil Corp. 364,203
12,200 Occidental Petroleum Corp. 447,496
2,850 Sunoco, Inc. 136,829
---------------
5,175,593
---------------
PACKAGING AND CONTAINERS: 0.2%
3,250 @ Sealed Air Corp. 171,503
---------------
171,503
---------------
PHARMACEUTICALS: 4.9%
12,800 Abbott Laboratories 565,760
9,200 Eli Lilly & Co. 630,752
18,250 Merck & Co., Inc. 740,950
63,640 Pfizer, Inc. 2,135,122
---------------
4,072,584
---------------
PIPELINES: 0.2%
19,900 Williams Cos., Inc. 186,662
---------------
186,662
---------------
RETAIL: 10.8%
10,950 @ Bed Bath & Beyond, Inc. 462,528
9,150 Best Buy Co., Inc. 567,300
13,850 CVS Corp. 518,821
7,400 Federated Department Stores 363,266
25,700 Gap, Inc. 552,550
35,450 Home Depot, Inc. 1,303,141
6,350 Lowe's Cos., Inc. 370,205
28,900 McDonald's Corp. 740,707
6,500 RadioShack Corp. 202,475
17,250 @ Staples, Inc. 468,338
14,200 @ Starbucks Corp. 455,394
35,500 Wal-Mart Stores, Inc. 1,975,219
22,100 Walgreen Co. 813,501
4,250 Wendy's Intl., Inc. 165,028
---------------
8,958,473
---------------
SEMICONDUCTORS: 5.9%
16,050 @ Altera Corp. 406,547
35,400 @ Applied Materials, Inc. 860,219
80,150 Intel Corp. 2,679,414
9,950 Maxim Integrated Products 518,196
13,100 Texas Instruments, Inc. 389,856
---------------
4,854,232
---------------
SOFTWARE: 5.0%
8,550 Adobe Systems, Inc. 353,286
5,900 @ Citrix Systems, Inc. 141,718
10,450 IMS Health, Inc. 240,664
86,700 S Microsoft Corp. 2,228,189
39,950 @ Oracle Corp. 479,800
17,800 @ Siebel Systems, Inc. 234,604
12,850 @ Veritas Software Corp. 488,569
---------------
4,166,830
---------------
</Table>
See Accompanying Notes to Financial Statements
107
<Page>
ING
Disciplined
LargeCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: 5.1%
15,850 @ Avaya, Inc. $ 215,560
56,500 @ Cisco Systems, Inc. 1,280,289
6,250 @ Comverse Technology, Inc. 120,188
17,350 Motorola, Inc. 243,594
29,450 @ Nextel Communications, Inc. 745,969
6,100 Qualcomm, Inc. 271,755
6,100 Scientific-Atlanta, Inc. 176,168
35,250 Verizon Communications, Inc. 1,155,142
---------------
4,208,665
---------------
TOYS/GAMES/HOBBIES: 0.6%
7,450 Hasbro, Inc. 164,720
17,500 Mattel, Inc. 354,200
---------------
518,920
---------------
TRANSPORTATION: 0.8%
9,350 United Parcel Service, Inc. 680,400
---------------
680,400
---------------
Total Common Stock
(Cost $76,300,477) 82,533,364
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.5%
REPURCHASE AGREEMENT: 0.5%
$ 432,000 Morgan Stanley Repurchase
Agreement dated 11/28/03,
1.030%, due 12/01/03, $432,037
to be recieved upon repurchase
(Collateralized by $450,000
Student Loan Government Fund,
0.000%, Market Value $441,176,
due 12/18/03) 432,000
---------------
Total Short-term Investments
(Cost $432,000) 432,000
---------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $76,732,477)* 100.5% $ 82,965,364
OTHER ASSETS AND
LIABILITIES-NET (0.5) (411,090)
----- ---------------
NET ASSETS 100.0% $ 82,554,274
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
S Segregated securities for when-issued or delayed delivery securities held
at November 30, 2003.
X Fair value determined by ING Funds Valuation Committee appointed by the
Funds' Board of Directors/Trustees.
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 7,050,699
Gross Unrealized Depreciation (815,621)
---------------
Net Unrealized Appreciation $ 6,235,078
===============
</Table>
See Accompanying Notes to Financial Statements
108
<Page>
ING
Financial
Services
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 97.3%
BANKS: 32.5%
135,200 Bank of America Corp. $ 10,198,136
101,000 Bank of New York Co., Inc. 3,098,680
157,300 Banknorth Group, Inc. 5,154,721
234,748 Charter One Financial, Inc. 7,798,329
96,000 City National Corp. 6,072,960
34,300 Comerica, Inc. 1,788,745
133,729 Commerce Bancshares, Inc. 6,381,550
86,500 Fifth Third Bancorp 5,028,245
147,594 Fleetboston Financial Corp. 5,992,316
118,900 Keycorp 3,304,231
281,700 Mellon Financial Corp. 8,112,960
62,500 North Fork Bancorporation, Inc. 2,495,625
286,600 I Prosperity Bancshares, Inc. 6,207,756
80,300 State Street Corp. 4,092,088
57,400 UnionBanCal Corp. 3,269,504
302,500 US Bancorp 8,382,275
131,000 Wachovia Corp. 5,993,250
222,600 Wells Fargo & Co. 12,761,658
---------------
106,133,029
---------------
DIVERSIFIED FINANCIAL SERVICES: 34.3%
124,100 @ Affiliated Managers Group 8,252,650
168,840 Alliance Capital Management
Holding LP 5,436,648
95,000 American Express Co. 4,342,450
82,700 Capital One Financial Corp. 4,938,844
150,700 CIT Group, Inc. 5,254,909
411,200 Citigroup, Inc. 19,342,849
35,600 Countrywide Financial Corp. 3,759,360
266,300 @ E*TRADE Group, Inc. 2,884,029
90,600 Fannie Mae 6,342,000
70,000 Franklin Resources, Inc. 3,348,100
160,000 Freddie Mac 8,707,200
91,200 Goldman Sachs Group, Inc. 8,762,496
205,100 JP Morgan Chase & Co. 7,252,336
104,200 Lehman Brothers Holdings, Inc. 7,524,282
120,600 Merrill Lynch & Co., Inc. 6,844,050
168,700 Morgan Stanley 9,325,736
---------------
112,317,939
---------------
HOME BUILDERS: 2.2%
161,100 DR Horton, Inc. 7,040,070
---------------
7,040,070
---------------
INSURANCE: 26.4%
211,000 @@ Ace Ltd. 7,690,950
121,200 Aflac, Inc. 4,359,564
226,040 American Intl. Group 13,099,017
31,250 Axis Capital Holdings Ltd. 892,188
66,800 Delphi Financial Group 3,547,080
163,900 Hartford Financial Services
Group, Inc. 9,014,500
99,700 Marsh & Mclennan Cos., Inc. $ 4,430,668
167,800 Metlife, Inc. 5,485,382
236,400 PMI Group, Inc. 8,801,172
98,000 Prudential Financial, Inc. 3,832,780
179,600 Radian Group, Inc. 8,863,260
198,800 Scottish Annuity & Life
Holdings LTD. 4,164,860
75,543 Travelers Property Casualty Corp. 1,178,471
227,700 Willis Group Holdings Ltd. 7,525,485
42,200 @@ XL Capital Ltd. 3,173,440
---------------
86,058,817
---------------
SOFTWARE: 1.9%
164,900 First Data Corp. 6,241,465
---------------
6,241,465
---------------
Total Common Stock
(Cost $275,181,584) 317,791,320
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 3.0%
REPURCHASE AGREEMENT: 3.0%
$ 9,772,000 Bank of New York Repurchase
Agreement dated 11/28/03,
1.060%, due 12/01/03, $9,772,863
to be received upon repurchase
(Collateralized by Federal
National Mortgage Association,
7.125%, market value $9,967,725,
due 01/15/2030) 9,772,000
---------------
Total Short-term Investments
(Cost $9,772,000) 9,772,000
---------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $284,953,584)* 100.3% $ 327,563,320
OTHER ASSETS AND
LIABILITIES-NET (0.3) (1,076,282)
----- ---------------
NET ASSETS 100.0% $ 326,487,038
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
I Illiquid Security
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized depreciation consists of:
<Table>
Gross Unrealized Appreciation $ 52,156,604
Gross Unrealized Depreciation (9,546,868)
---------------
Net Unrealized Depreciation $ 42,609,736
===============
</Table>
See Accompanying Notes to Financial Statements
109
<Page>
ING
MagnaCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 99.2%
AEROSPACE/DEFENSE: 3.1%
145,900 General Dynamics Corp. $ 11,798,933
---------------
11,798,933
---------------
AGRICULTURE: 4.2%
304,315 L Altria Group, Inc. 15,824,380
---------------
15,824,380
---------------
APPAREL: 1.6%
89,900 Nike, Inc. 6,045,775
---------------
6,045,775
---------------
BANKS: 6.0%
134,600 Bank of America Corp. 10,152,878
218,500 Wells Fargo & Co. 12,526,605
---------------
22,679,483
---------------
BUILDING MATERIALS: 1.7%
238,200 L Masco Corp. 6,479,040
---------------
6,479,040
---------------
CHEMICALS: 4.1%
247,200 Dow Chemical Co. 9,282,360
86,500 Praxair, Inc. 6,208,970
---------------
15,491,330
---------------
COMPUTERS: 2.7%
464,056 Hewlett-Packard Co. 10,065,375
---------------
10,065,375
---------------
COSMETICS/PERSONAL CARE: 2.6%
181,200 Kimberly-Clark Corp. 9,824,664
---------------
9,824,664
---------------
DIVERSIFIED FINANCIAL SERVICES: 15.1%
205,000 Citigroup, Inc. 9,643,200
180,000 Fannie Mae 12,600,000
221,300 Freddie Mac 12,043,146
210,400 L Merrill Lynch & Co., Inc. 11,940,200
208,200 L Morgan Stanley 11,509,296
---------------
57,735,842
---------------
ELECTRICAL COMPONENTS & EQUIPMENT: 3.4%
209,800 Emerson Electric Co. 12,806,192
---------------
12,806,192
---------------
ELECTRONICS: 3.0%
402,000 @@ Koninklijke Philips Electronics NV 11,424,840
---------------
11,424,840
---------------
FOOD: 4.4%
191,000 @@ Nestle SA ADR 11,097,100
95,700 @@,L Unilever NV 5,751,570
---------------
16,848,670
---------------
FOREST PRODUCTS & PAPER: 1.7%
173,100 International Paper Co. 6,441,051
---------------
6,441,051
---------------
HEALTHCARE-PRODUCTS: 2.4%
192,700 Baxter Intl., Inc. $ 5,360,914
72,000 L Beckman Coulter, Inc. 3,682,800
---------------
9,043,714
---------------
HEALTHCARE-SERVICES: 2.9%
93,400 L Quest Diagnostics 6,815,398
285,400 @,L Tenet Healthcare Corp. 4,169,694
---------------
10,985,092
---------------
INSURANCE: 7.2%
191,100 American Intl. Group 11,074,245
83,000 John Hancock Financial
Services, Inc. 3,050,250
267,600 Metlife, Inc. 8,747,844
119,300 Prudential Financial, Inc. 4,665,823
---------------
27,538,162
---------------
MEDIA: 2.7%
116,900 Gannett Co., Inc. 10,123,540
---------------
10,123,540
---------------
MISCELLANEOUS MANUFACTURING: 3.8%
481,000 Honeywell Intl., Inc. 14,280,890
---------------
14,280,890
---------------
OIL AND GAS: 12.1%
126,000 Apache Corp. 9,046,800
207,900 @@,L BP PLC ADR 8,875,251
137,500 ChevronTexaco Corp. 10,326,250
313,100 Exxon Mobil Corp. 11,324,827
151,900 @@ Royal Dutch Petroleum Co. 6,820,310
---------------
46,393,438
---------------
PHARMACEUTICALS: 3.5%
331,800 Bristol-Myers Squibb Co. 8,742,930
111,700 Merck & Co., Inc. 4,535,020
---------------
13,277,950
---------------
RETAIL: 2.5%
367,100 McDonald's Corp. 9,408,773
---------------
9,408,773
---------------
SAVINGS AND LOANS: 3.2%
263,000 L Washington Mutual, Inc. 12,048,030
---------------
12,048,030
---------------
SEMICONDUCTORS: 1.3%
143,200 Intel Corp. 4,787,176
---------------
4,787,176
---------------
TELECOMMUNICATIONS: 4.0%
295,700 SBC Communications, Inc. 6,883,896
250,800 Verizon Communications, Inc. 8,218,716
---------------
15,102,612
---------------
Total Common Stock
(Cost $346,824,705) 376,454,952
---------------
</Table>
See Accompanying Notes to Financial Statements
110
<Page>
ING
MagnaCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 1.1%
REPURCHASE AGREEMENT: 1.1%
$ 4,145,000 Morgan Stanley Repurchase
Agreement dated 11/28/03,
1.030%, due 12/01/03, $44,145,356
to be received upon repurchase
(Collateralized by $4,210,000
Student Loan Government Fund,
0.000%, Market Value $4,127,451
due 12/18/03 and U.S. Treasury Bill,
0.000%, Market Value $24,501,
due 12/11/03) $ 4,145,000
---------------
Total Short-term Investments
(Cost $4,145,000) 4,145,000
---------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $350,969,705)* 100.3% $ 380,599,952
OTHER ASSETS AND
LIABILITIES-NET (0.3) (1,219,164)
----- ---------------
NET ASSETS 100.0% $ 379,380,788
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
ADR American Depositary Receipt
PLC Public Limited Company
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 45,237,743
Gross Unrealized Depreciation (15,607,496)
---------------
Net Unrealized Appreciation $ 29,630,247
===============
</Table>
See Accompanying Notes to Financial Statements
111
<Page>
ING
MidCap
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 94.8%
AGRICULTURE: 6.9%
87,840 Loews Corp. $ 2,029,104
26,830 L RJ Reynolds Tobacco Holdings, Inc. 1,481,016
25,640 UST, Inc. 922,784
---------------
4,432,904
---------------
AIRLINES: 3.4%
88,190 @,L AMR Corp. 1,131,478
85,000 L Delta Air Lines, Inc. 1,065,900
---------------
2,197,378
---------------
APPAREL: 2.0%
91,160 @,@@ Tommy Hilfiger Corp. 1,252,538
---------------
1,252,538
---------------
AUTO PARTS & EQUIPMENT: 7.2%
157,610 Delphi Corp. 1,383,816
350,850 L Goodyear Tire & Rubber Co. 2,368,237
105,000 Visteon Corp. 824,250
---------------
4,576,303
---------------
BUILDING MATERIALS: 0.7%
10,731 York Intl. Corp. 428,703
---------------
428,703
---------------
CHEMICALS: 7.2%
75,830 Great Lakes Chemical Corp. 1,722,099
48,050 Lubrizol Corp. 1,447,747
44,470 Sherwin-Williams Co. 1,442,162
---------------
4,612,008
---------------
COMMERCIAL SERVICES: 5.4%
36,250 L RR Donnelley & Sons Co. 1,017,175
496,070 @ Service Corp. 2,455,547
---------------
3,472,722
---------------
COMPUTERS: 1.6%
63,640 @,L Unisys Corp. 1,038,605
---------------
1,038,605
---------------
DIVERSIFIED FINANCIAL SERVICES: 1.3%
24,000 CIT Group, Inc. 836,880
---------------
836,880
---------------
ELECTRIC: 5.0%
134,440 L Allegheny Energy, Inc. 1,445,230
48,380 Alliant Energy Corp. 1,182,891
162,000 @,L Mirant Corp. 52,650
21,770 @,L PG&E Corp. 546,862
---------------
3,227,633
---------------
FOOD: 11.6%
44,000 L Albertson's, Inc. 936,320
212,800 @ Del Monte Foods Co. 2,036,496
56,100 Sensient Technologies Corp. 1,057,485
57,812 @,L Smithfield Foods, Inc. 1,355,691
218,964 L Winn-Dixie Stores, Inc. 1,977,245
---------------
7,363,237
---------------
HAND/MACHINE TOOLS: 1.5%
21,200 Black & Decker Corp. 983,468
---------------
983,468
---------------
HEALTHCARE-SERVICES: 1.1%
46,000 @,L Tenet Healthcare Corp. 672,060
---------------
672,060
---------------
HOUSEHOLD PRODUCTS/WARES: 3.0%
72,280 @,L American Greetings $ 1,526,554
24,110 Tupperware Corp. 371,535
---------------
1,898,089
---------------
INSURANCE: 15.4%
43,170 @ Allmerica Financial Corp. 1,180,700
13,060 American National Insurance 1,096,126
80,960 @ CNA Financial Corp. 1,893,653
45,700 Nationwide Financial Services 1,491,648
127,350 L Phoenix Cos., Inc. 1,432,688
23,500 Safeco Corp. 879,605
119,060 Unumprovident Corp. 1,777,566
---------------
9,751,986
---------------
OFFICE/BUSINESS EQUIPMENT: 4.3%
205,360 IKON Office Solutions, Inc. 1,739,399
84,960 @,L Xerox Corp. 1,034,813
---------------
2,774,212
---------------
OIL AND GAS: 2.3%
83,180 Diamond Offshore Drilling 1,459,809
---------------
1,459,809
---------------
PIPELINES: 3.3%
299,870 EL Paso Corp. 2,129,077
---------------
2,129,077
---------------
RETAIL: 7.4%
137,420 Dillard's, Inc. 2,315,527
208,280 @,L Toys R US, Inc. 2,445,207
---------------
4,760,734
---------------
SEMICONDUCTORS: 1.0%
51,400 @,L Micron Technology, Inc. 668,714
---------------
668,714
---------------
TELECOMMUNICATIONS: 3.2%
180,270 @,L Lucent Technologies, Inc. 576,864
186,430 @,L Tellabs, Inc. 1,491,440
---------------
2,068,304
---------------
Total Common Stock
(Cost $60,363,579) 60,605,364
---------------
TOTAL INVESTMENTS IN
SECURITIES (COST
$60,363,579)* 94.8% $ 60,605,364
OTHER ASSETS AND
LIABILITIES-NET 5.2 3,324,821
----- ---------------
NET ASSETS 100.0% $ 63,930,185
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
L Loaned security, a portion or all of the security is on loan at November
30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 5,665,724
Gross Unrealized Depreciation (5,423,939)
---------------
Net Unrealized Appreciation $ 241,785
===============
</Table>
See Accompanying Notes to Financial Statements
112
<Page>
ING
SmallCap
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 94.0%
APPAREL: 5.7%
105,990 @ Skechers U.S.A., Inc. $ 787,506
88,540 @,@@ Tommy Hilfiger Corp. 1,216,539
60,690 @ Vans, Inc. 776,832
---------------
2,780,877
---------------
AUTO PARTS & EQUIPMENT: 8.4%
50,690 @ Aftermarket Technology Corp. 674,684
27,600 Cooper Tire & Rubber Co. 552,276
193,809 L Goodyear Tire & Rubber Co. 1,308,211
204,880 Visteon Corp. 1,608,308
---------------
4,143,479
---------------
BUILDING MATERIALS: 1.5%
18,650 York Intl. Corp. 745,068
---------------
745,068
---------------
CHEMICALS: 10.3%
22,570 @ Cytec Industries, Inc. 818,163
56,380 L Great Lakes Chemical Corp. 1,280,389
22,830 Lubrizol Corp. 687,868
239,150 Polyone Corp. 1,422,942
93,990 Wellman, Inc. 817,713
---------------
5,027,075
---------------
COMMERCIAL SERVICES: 5.6%
52,880 Kelly Services, Inc. 1,506,022
256,010 @ Service Corp. 1,267,250
---------------
2,773,272
---------------
ELECTRICAL COMPONENTS & EQUIPMENT: 4.7%
64,750 Belden, Inc. 1,275,575
58,320 @ Rayovac Corp. 1,049,177
---------------
2,324,752
---------------
ELECTRONICS: 2.8%
104,560 @ Kemet Corp. 1,380,192
---------------
1,380,192
---------------
FOOD: 9.2%
125,440 @ Del Monte Foods Co. 1,200,460
82,430 Interstate Bakeries 1,298,272
58,240 Sensient Technologies Corp. 1,097,824
96,087 L Winn-Dixie Stores, Inc. 867,666
---------------
4,464,222
---------------
HAND/MACHINE TOOLS: 1.1%
38,420 Starrett (L.S.) Co. 548,253
---------------
548,253
---------------
HEALTHCARE-SERVICES: 3.1%
71,700 @,L Orthodontic Centers of America 508,353
15,400 @,L Pacificare Health Systems 1,002,694
---------------
1,511,047
---------------
HOME BUILDERS: 3.1%
66,150 @,L Fleetwood Enterprises, Inc. 672,746
81,300 @ National RV Holdings, Inc. 873,975
---------------
1,546,721
---------------
HOUSEHOLD PRODUCTS/WARES: 4.5%
48,320 @,L American Greetings $ 1,020,518
78,920 Tupperware Corp. 1,216,158
---------------
2,236,676
---------------
HOUSEWARES: 0.8%
10,450 National Presto Industries, Inc. 372,020
---------------
372,020
---------------
INSURANCE: 3.8%
15,000 @ Allmerica Financial Corp. 410,250
3,560 American National Insurance 298,791
102,910 L Phoenix Cos., Inc. 1,157,737
---------------
1,866,778
---------------
IRON/STEEL: 2.2%
117,480 Ryerson Tull, Inc. 1,058,495
---------------
1,058,495
---------------
LEISURE TIME: 1.0%
33,650 @ K2, Inc. 514,845
---------------
514,845
---------------
LODGING: 1.8%
80,510 @ Prime Hospitality Corp. 887,220
---------------
887,220
---------------
MACHINERY-DIVERSIFIED: 2.8%
34,990 Tecumseh Products Co. 1,399,600
---------------
1,399,600
---------------
METAL FABRICATE/HARDWARE: 1.3%
124,620 @ Wolverine Tube, Inc. 655,501
---------------
655,501
---------------
MINING: 1.5%
89,340 @ Stillwater Mining Co. 752,243
---------------
752,243
---------------
MISCELLANEOUS MANUFACTURING: 8.0%
55,300 Brink's Co. 1,227,659
44,550 Federal Signal Corp. 674,933
67,459 Myers Industries, Inc. 845,261
45,730 Trinity Industries, Inc. 1,186,694
---------------
3,934,547
---------------
RETAIL: 7.3%
10,110 Blair Corp. 252,750
89,230 Dillard's, Inc. 1,503,526
47,220 @ Jack in The Box, Inc. 984,537
67,780 @ Payless Shoesource, Inc. 873,006
---------------
3,613,819
---------------
SOFTWARE: 2.6%
45,800 @ American Management Systems 682,878
173,050 @,L Midway Games, Inc. 584,909
---------------
1,267,787
---------------
</Table>
See Accompanying Notes to Financial Statements
113
<Page>
ING
SmallCap
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
TOYS/GAMES/HOBBIES: 0.9%
33,040 @,L Jakks Pacific, Inc. $ 449,014
---------------
449,014
---------------
Total Common Stock
(Cost $43,265,779) 46,253,503
---------------
TOTAL INVESTMENTS IN
SECURITIES (COST
$43,265,779)* 94.0% $ 46,253,503
OTHER ASSETS AND
LIABILITIES-NET 6.0 2,946,136
----- ---------------
NET ASSETS 100.0% $ 49,199,639
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
L Loaned security, a portion or all of the security is on loan at November
30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 5,241,702
Gross Unrealized Depreciation (2,253,978)
---------------
Net Unrealized Appreciation $ 2,987,724
===============
</Table>
See Accompanying Notes to Financial Statements
114
<Page>
ING
Tax Efficient
Equity
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 97.9%
AEROSPACE/DEFENSE: 3.0%
10,200 @ Alliant Techsystems, Inc. $ 520,506
6,000 General Dynamics Corp. 485,220
---------------
1,005,726
---------------
AIRLINES: 1.2%
23,300 Southwest Airlines Co. 418,934
---------------
418,934
---------------
AUTO MANUFACTURERS: 1.6%
32,700 @,L General Motors Corp. 542,820
---------------
542,820
---------------
BANKS: 5.8%
9,600 Bank of America Corp. 724,128
18,600 US Bancorp 515,406
12,500 Wells Fargo & Co. 716,625
---------------
1,956,159
---------------
BEVERAGES: 1.5%
10,600 PepsiCo, Inc. 510,072
---------------
510,072
---------------
BIOTECHNOLOGY: 2.7%
5,700 @,L Amgen, Inc. 327,807
14,950 @,L Biogen IDEC, Inc. 570,791
---------------
898,598
---------------
CHEMICALS: 1.5%
13,700 Dow Chemical Co. 514,435
---------------
514,435
---------------
COMPUTERS: 3.5%
16,700 Hewlett-Packard Co. 362,223
9,100 @ International Business
Machines Corp. 823,914
---------------
1,186,137
---------------
DIVERSIFIED FINANCIAL SERVICES: 9.4%
7,000 L Capital One Financial Corp. 418,040
21,733 Citigroup, Inc. 1,022,320
31,500 @,L E*TRADE Group, Inc. 341,145
8,200 Fannie Mae 574,000
4,800 L Goldman Sachs Group, Inc. 461,184
4,900 Lehman Brothers Holdings, Inc. 353,829
---------------
3,170,518
---------------
ELECTRONICS: 1.9%
11,600 Parker Hannifin Corp. 637,884
---------------
637,884
---------------
ENVIRONMENTAL CONTROL: 1.5%
10,400 @ Stericycle, Inc. 513,760
---------------
513,760
---------------
HEALTHCARE-PRODUCTS: 3.1%
13,000 Medtronic, Inc. 587,600
6,800 @,L Zimmer Holdings, Inc. 448,256
---------------
1,035,856
---------------
INSURANCE: 3.5%
9,700 American Intl. Group $ 562,115
9,400 Chubb Corp. 615,230
---------------
1,177,345
---------------
LEISURE TIME: 1.4%
10,200 L Harley-Davidson, Inc. 481,134
---------------
481,134
---------------
MEDIA: 4.2%
14,700 @,L Cablevision Systems Corp. 304,584
10,900 @ Fox Entertainment Group, Inc. 311,195
21,100 @,L Time Warner, Inc. 343,508
19,900 L Walt Disney Co. 459,491
---------------
1,418,778
---------------
MINING: 3.2%
25,000 L Freeport-McMoRan
Copper & Gold, Inc. 1,088,250
---------------
1,088,250
---------------
MISCELLANEOUS MANUFACTURING: 10.4%
9,000 @ 3M Co. 711,360
6,100 Eaton Corp. 628,239
24,000 General Electric Co. 688,080
15,200 L Honeywell Intl., Inc. 451,288
42,600 @@,L Tyco Intl. Ltd. 977,670
---------------
3,456,637
---------------
OIL AND GAS SERVICES: 3.1%
15,100 Schlumberger Ltd. 708,492
10,600 L Weatherford Intl. Ltd. 347,468
---------------
1,055,960
---------------
PHARMACEUTICALS: 11.8%
10,500 Abbott Laboratories 464,100
4,200 @,L Barr Laboratories, Inc. 346,668
10,000 L Eli Lilly & Co. 685,600
9,400 @,L Gilead Sciences, Inc. 551,592
20,800 Pfizer, Inc. 697,841
8,700 @@,L Teva Pharmaceutical Industries ADR 524,052
17,100 Wyeth 673,740
---------------
3,943,593
---------------
RETAIL: 7.6%
9,300 Best Buy Co., Inc. 576,600
25,700 L Gap, Inc. 552,550
12,600 Home Depot, Inc. 463,176
17,500 @ Staples, Inc. 475,125
8,800 Wal-Mart Stores, Inc. 489,632
---------------
2,557,083
---------------
SEMICONDUCTORS: 8.8%
24,200 @ Applied Materials, Inc. 588,060
24,000 Intel Corp. 802,320
21,800 @,L National Semiconductor Corp. 974,896
28,000 @,L Nvidia Corp. 592,200
---------------
2,957,476
---------------
SOFTWARE: 1.8%
23,600 Microsoft Corp. 606,520
---------------
606,520
---------------
</Table>
See Accompanying Notes to Financial Statements
115
<Page>
ING
Tax Efficient
Equity
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: 3.7%
24,900 @ Cisco Systems, Inc. $ 564,234
15,000 Qualcomm, Inc. 668,250
---------------
1,232,484
---------------
TRANSPORTATION: 1.7%
9,000 Union Pacific Corp. 573,120
---------------
573,120
---------------
Total Common Stock
(Cost $29,934,013) 32,939,279
---------------
<Caption>
CONTRACTS
- ----------------------------------------------------------------------------------------------
OPTIONS: 0.00%
ELECTRONICS: 0.00%
110 USD Put, 40 strike,
expires 01/17/04 15,400
---------------
Total Options
(Cost $22,330) 15,400
---------------
Total Long-Term Investments
(Cost $29,956,343) 32,954,679
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 2.3%
REPURCHASE AGREEMENT: 2.3%
$ 778,000 Morgan Stanley Repurchase
Agreement dated 11/28/03,
1.030%, due 12/01/03,
$778,067 to be received upon
repurchase (Collateralized by
$810,000 Student Loan
Government Fund, 0.000%,
Market Value $794,118 due 12/18/03) 778,000
---------------
Total Short-Term Investments
(Cost $778,000) 778,000
---------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $30,734,343)* 100.2% $ 33,732,679
OTHER ASSETS AND
LIABILITIES-NET (0.2) (68,423)
----- ---------------
NET ASSETS 100.0% $ 33,664,256
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
ADR American Depositary Receipt
L Loaned security, a portion or all of the security is on loan at November
30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 4,450,752
Gross Unrealized Depreciation (1,449,447)
---------------
Net Unrealized Appreciation $ 3,001,305
===============
</Table>
See Accompanying Notes to Financial Statements
116
<Page>
ING
Convertible
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 4.8%
BIOTECHNOLOGY: 0.4%
35,000 @,L Medimmune, Inc. $ 833,000
---------------
833,000
---------------
FOOD: 1.3%
86,262 @ Dean Foods Co. 2,830,256
---------------
2,830,256
---------------
HEALTHCARE-SERVICES: 0.9%
74,600 @ Community Health Systems, Inc. 2,020,168
---------------
2,020,168
---------------
MISCELLANEOUS MANUFACTURING: 0.5%
36,000 General Electric Co. 1,032,120
---------------
1,032,120
---------------
RETAIL: 1.1%
60,000 Wendy's Intl., Inc. 2,329,800
---------------
2,329,800
---------------
TELECOMMUNICATIONS: 0.6%
30,000 Qualcomm, Inc. 1,336,500
---------------
1,336,500
---------------
Total Common Stock
(Cost $8,646,232) 10,381,844
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS: 72.1%
ADVERTISING: 0.5%
$ 1,000,000 L Lamar Advertising Co., 2.88%,
due 12/31/10 997,500
---------------
997,500
---------------
AEROSPACE/DEFENSE: 0.7%
1,960,000 Spacehab, Inc., 8.00%,
due 10/15/07 1,543,500
---------------
1,543,500
---------------
AGRICULTURE: 0.8%
1,490,000 L Bunge Limited Finance Corp.,
3.75%, due 11/15/22 1,627,825
---------------
1,627,825
---------------
AIRLINES: 0.5%
990,000 # JetBlue Airways Corp., 3.50%,
due 07/15/33 1,155,825
---------------
1,155,825
---------------
AUTO PARTS & EQUIPMENT: 1.0%
4,000,000 L Lear Corp., 3.68%, due 02/20/22 2,070,000
---------------
2,070,000
---------------
BIOTECHNOLOGY: 4.1%
2,500,000 Amgen, Inc., 1.03%, due 03/01/32 1,871,875
1,485,000 # ICOS Corp., 2.00%, due 07/01/23 1,520,269
5,511,000 L Millennium Pharmaceuticals, Inc.,
5.50%, due 01/15/07 5,442,112
---------------
8,834,256
---------------
BUILDING MATERIALS: 1.1%
$ 2,000,000 @@ Gujarat Ambuja Cements, 1.00%,
due 01/30/06 $ 2,433,602
---------------
2,433,602
---------------
COAL: 1.0%
1,980,000 # Massey Energy Co., 4.75%,
due 05/15/23 2,118,600
---------------
2,118,600
---------------
COMMERCIAL SERVICES: 1.5%
1,475,000 # Exult, Inc., 2.50%, due 10/01/10 1,410,469
2,000,000 L Quanta Services, Inc., 4.00%,
due 07/01/07 1,825,000
---------------
3,235,469
---------------
COMPUTERS: 0.4%
4,000 # ASML Holding NV, 4.25%,
due 11/30/04 4,055
100,000 @@ Bull SA, 2.25%, due 01/01/05 804,325
---------------
808,380
---------------
DISTRIBUTION/WHOLESALE: 1.5%
4,000,000 Costco Wholesale Corp., 1.37%,
due 08/19/17 3,320,000
---------------
3,320,000
---------------
ELECTRIC: 2.3%
1,000,000 # Centerpoint Energy, Inc., 3.75%,
due 05/15/23 1,066,250
3,960,000 L PPL Energy Supply LLC, 2.63%,
due 05/15/23 3,920,400
---------------
4,986,650
---------------
ELECTRONICS: 5.0%
1,500,000 #,L Flextronics Intl. Ltd., 1.00%,
due 08/01/10 1,871,250
4,495,000 # Flir Systems, Inc., 3.00%,
due 06/01/23 4,770,319
2,500,000 # Invision Technologies, Inc., 3.00%,
due 10/01/23 2,800,000
990,000 #,L Vishay Intertechnology, Inc., 3.63%,
due 08/01/23 1,316,700
---------------
10,758,269
---------------
FOOD: 1.0%
3,000,000 # General Mills, Inc., 1.89%,
due 10/28/22 2,103,750
---------------
2,103,750
---------------
HEALTHCARE-SERVICES: 2.7%
2,000,000 Laboratory Corp. of America Holdings,
1.89%, due 09/11/21 1,432,500
1,000,000 L Quest Diagnostics, 1.75%,
due 11/30/21 1,033,750
5,000,000 L Universal Health Services, Inc., .43%,
due 06/23/20 3,318,750
---------------
5,785,000
---------------
</Table>
See Accompanying Notes to Financial Statements
117
<Page>
ING
Convertible
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
INSURANCE: 2.6%
$ 3,770,000 American Intl. Group, .50%,
due 05/15/07 $ 3,510,812
1,970,000 # AmerUs Group Co., 2.00%,
due 03/06/32 2,159,613
---------------
5,670,425
---------------
INTERNET: 1.9%
4,000,000 E*TRADE Group, Inc., 6.00%,
due 02/01/07 4,030,000
---------------
4,030,000
---------------
LEISURE TIME: 0.9%
2,000,000 Aristocrat Leisure Ltd., 5.00%,
due 05/31/06 1,885,000
---------------
1,885,000
---------------
LODGING: 1.9%
2,000,000 Four Seasons Hotels, Inc., 4.18%,
due 09/23/29 4,170,000
---------------
4,170,000
---------------
MINING: 3.4%
1,500,000 @@ Inco Ltd., 0.31%, due 03/29/21 1,421,250
1,985,000 #,@@ Inco Ltd., 1.00%, due 03/14/23 2,453,956
3,000,000 #,@@,L Placer Dome, Inc., 2.75%,
due 10/15/23 3,543,750
---------------
7,418,956
---------------
MISCELLANEOUS MANUFACTURING: 3.6%
3,430,000 #,L Eastman Kodak Co., 3.38%,
due 10/15/33 3,721,550
3,500,000 # Tyco Intl. Group SA, 2.75%,
due 01/15/18 4,077,500
---------------
7,799,050
---------------
OIL AND GAS: 3.8%
3,498,000 Devon Energy Corp., 4.90%,
due 08/15/08 3,567,960
2,500,000 L Kerr-McGee Corp., 5.25%,
due 02/15/10 2,581,250
1,985,000 # Pride Intl., Inc., 3.25%,
due 05/01/33 1,982,519
---------------
8,131,729
---------------
OIL AND GAS SERVICES: 1.3%
1,975,000 Cooper Cameron Corp., 1.75%,
due 05/17/21 1,930,563
1,000,000 # Schlumberger Ltd., 2.13%,
due 06/01/23 945,000
---------------
2,875,563
---------------
PACKAGING AND CONTAINERS: 1.0%
2,000,000 #,L Sealed Air Corp., 3.00%,
due 06/30/33 2,077,500
---------------
2,077,500
---------------
PHARMACEUTICALS: 5.2%
990,000 # Amylin Pharmaceuticals, Inc., 2.25%,
due 06/30/08 1,071,675
5,000,000 L Cephalon, Inc., 2.50%, due 12/15/06 4,712,500
3,000,000 # NPS Pharmaceuticals, Inc., 3.00%,
due 06/15/08 3,307,500
$ 1,500,000 # Watson Pharmaceuticals, Inc.,
1.75%, due 03/15/23 $ 1,995,000
---------------
11,086,675
---------------
RETAIL: 2.0%
6,000,000 Duane Reade, Inc., 2.15%,
due 04/16/22 3,180,000
990,000 # Triarc Cos., 5.00%, due 05/15/23 1,059,300
---------------
4,239,300
---------------
SEMICONDUCTORS: 2.7%
3,000,000 L Advanced Micro Devices, Inc.,
4.75%, due 02/01/22 3,262,500
1,000,000 # Cypress Semiconductor Corp.,
1.25%, due 06/15/08 1,580,000
1,000,000 LTX Corp., 4.25%, due 08/15/06 977,500
---------------
5,820,000
---------------
SOFTWARE: 3.1%
2,000,000 # Fair Isaac Corp., 1.50%, due 08/15/23 2,150,000
2,500,000 L First Data Corp., 2.00%, due 03/01/08 2,618,750
1,370,000 # MSC Software Corp., 2.50%,
due 05/05/08 1,834,088
---------------
6,602,838
---------------
TELECOMMUNICATIONS: 14.0%
5,000,000 Aether Systems, Inc., 6.00%,
due 03/22/05 4,943,750
1,980,000 #,L Commonwealth Telephone
Enterprises, Inc., 3.25%,
due 07/15/23 1,994,850
2,980,000 Finisar Corp., 5.25%, due 10/15/08 2,976,275
2,000,000 L Nextel Communications, Inc.,
6.00%, due 06/01/11 2,350,000
5,000,000 # Nextel Partners, Inc., 1.50%,
due 11/15/08 5,868,749
1,000,000 L Nortel Networks Corp., 4.25%,
due 09/01/08 948,750
1,470,000 Primus Telecommunications GP,
5.75%, due 02/15/07 1,440,600
1,970,000 #,L Primus Telecommunications GP,
3.75%, due 09/15/10 2,822,025
1,980,000 #,L RF Micro Devices, Inc., 1.50%,
due 07/01/10 3,390,750
1,000,000 # Utstarcom, Inc., .88%, due 03/01/08 1,736,250
1,000,000 L Utstarcom, Inc., .88%, due 03/01/08 1,736,250
---------------
30,208,249
---------------
TRANSPORTATION: 0.6%
985,000 #,L Yellow Corp., 5.00%, due 08/08/23 1,188,156
---------------
1,188,156
---------------
Total Convertible Corporate Bonds
(Cost $140,098,777) 154,982,067
---------------
CORPORATE BONDS: 1.3%
SEMICONDUCTORS: 1.1%
0 @@ Silicon-On-Insulator Technologies 2,453,610
TRANSPORTATION: 0.2%
490,000 #,L Yellow Corp., 3.38%, due 11/25/23 506,538
---------------
Total Corporate Bonds
(Cost $2,861,578) 2,960,148
---------------
</Table>
See Accompanying Notes to Financial Statements
118
<Page>
ING
Convertible
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
MUTUAL FUNDS: 2.2%
EQUITY FUND: 2.2%
$ 45,000 L SPDR Trust Series 1 $ 4,792,500
---------------
Total Mutual Funds
(Cost $3,977,768) 4,792,500
---------------
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
PREFERRED STOCK: 19.2%
AUTO MANUFACTURERS: 2.8%
55,000 Ford Motor Co. Capital Trust II 2,743,950
39,600 L General Motors Corp. 1,113,948
85,000 General Motors Corp. 2,132,650
---------------
5,990,548
---------------
DIVERSIFIED FINANCIAL SERVICES: 1.0%
88,300 Gabelli Asset Management, Inc. 2,233,990
---------------
2,233,990
---------------
ELECTRIC: 1.0%
45,000 Calpine Capital Trust II 2,131,875
---------------
2,131,875
---------------
ELECTRICAL COMPONENTS & EQUIPMENT: 0.1%
3,500 # General Cable Corp. 198,188
---------------
198,188
---------------
ENVIRONMENTAL CONTROL: 1.1%
34,700 Allied Waste Industries, Inc. 2,451,208
---------------
2,451,208
---------------
FOREST PRODUCTS & PAPER: 0.6%
25,000 International Paper Capital 1,215,625
---------------
1,215,625
---------------
HEALTHCARE-SERVICES: 0.8%
20,000 Anthem, Inc. 1,705,800
---------------
1,705,800
---------------
INSURANCE: 5.7%
60,000 Hartford Financial Services Group, Inc. 3,429,000
39,200 PMI Group, Inc. 993,720
20,000 Prudential Financial, Inc. 1,234,000
62,000 Reinsurance Group of America 3,592,899
118,000 @,L Travelers Property Casualty Corp. 2,809,580
---------------
12,059,199
---------------
MEDIA: 1.0%
19,850 News Corp Finance Trust II 2,079,288
---------------
2,079,288
---------------
OFFICE/BUSINESS EQUIPMENT: 0.5%
9,900 Xerox Corp. 1,167,210
---------------
1,167,210
---------------
OIL AND GAS: 1.6%
29,400 Ameranda Hess Corp. 1,492,050
15,000 # Chesapeake Energy Corp. 1,033,125
9,700 Chesapeake Energy Corp. 1,001,525
---------------
3,526,700
---------------
PHARMACEUTICALS: 1.3%
44,500 Omnicare, Inc. 2,693,585
---------------
2,693,585
---------------
RETAIL: 0.5%
30,000 Toys R US, Inc. $ 1,140,000
---------------
1,140,000
---------------
TELECOMMUNICATIONS: 1.2%
2,455 Lucent Technologies Capital Trust I 2,624,550
1 @,I,X Winstar Communications, Inc. --
51,931 @,I,X Winstar Communications, Inc. 5
---------------
2,624,555
---------------
Total Preferred Stock
(Cost $40,018,033) 41,217,771
---------------
Total Long-Term Investments
(Cost $195,602,388) 214,334,330
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.1%
REPURCHASE AGREEMENT: 0.1%
$ 184,000 Morgan Stanley Repurchase
Agreement dated 11/28/03, 1.030%,
due 12/01/03, $184,016 to be received upon
repurchase (Collateralized by
$185,080 REFC, 0.000%,
Market Value $188,782 due 07/15/29) 184,000
---------------
Total Short-term Investments
(Cost $184,000) 184,000
---------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $195,786,388)* 99.7% $ 214,518,330
OTHER ASSETS AND
LIABILITIES-NET 0.3 563,831
----- ---------------
NET ASSETS 100.0% $ 215,082,161
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
# Securities with purchase pursuant to Rule 144A, under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers. These securities have been determined to be liquid
under the guidelines established by the Fund's Board of Trustees.
I Illiquid Security
L Loaned security, a portion or all of the security is on loan at November
30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 22,240,681
Gross Unrealized Depreciation (3,609,432)
---------------
Net Unrealized Appreciation $ 18,631,249
===============
</Table>
See Accompanying Notes to Financial Statements
119
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 55.4%
AEROSPACE/DEFENSE: 0.7%
6,100 General Dynamics Corp. $ 493,307
---------------
493,307
---------------
AIRLINES: 0.3%
10,900 Southwest Airlines Co. 195,982
---------------
195,982
---------------
AUTO MANUFACTURERS: 0.9%
39,600 @ General Motors Corp. 657,360
---------------
657,360
---------------
BANKS: 3.2%
13,200 Bank of America Corp. 995,676
15,000 US Bancorp 415,650
15,600 Wells Fargo & Co. 894,348
---------------
2,305,674
---------------
BIOTECHNOLOGY: 1.0%
18,055 @ Biogen IDEC, Inc. 689,340
---------------
689,340
---------------
CHEMICALS: 0.6%
12,200 Dow Chemical Co. 458,110
---------------
458,110
---------------
COMMERCIAL SERVICES: 0.8%
24,900 @ Cendant Corp. 551,784
---------------
551,784
---------------
COMPUTERS: 1.5%
39,000 @ EMC Corp. 535,860
25,884 Hewlett-Packard Co. 561,424
---------------
1,097,284
---------------
DIVERSIFIED FINANCIAL SERVICES: 8.2%
8,300 Capital One Financial Corp. 495,676
38,800 Citigroup, Inc. 1,825,153
38,000 @ E*TRADE Group, Inc. 411,540
6,100 Fannie Mae 427,000
4,900 Goldman Sachs Group, Inc. 470,792
12,300 JP Morgan Chase & Co. 434,928
8,300 Lehman Brothers Holdings, Inc. 599,343
7,400 Merrill Lynch & Co., Inc. 419,950
15,700 Morgan Stanley 867,896
---------------
5,952,278
---------------
ELECTRONICS: 1.0%
13,600 Parker Hannifin Corp. 747,864
---------------
747,864
---------------
FOREST PRODUCTS & PAPER: 0.7%
11,700 Bowater, Inc. 478,530
---------------
478,530
---------------
HEALTHCARE-PRODUCTS: 0.8%
12,100 Johnson & Johnson 596,409
---------------
596,409
---------------
HEALTHCARE-SERVICES: 1.1%
8,400 @ WellPoint Health Networks 785,316
---------------
785,316
---------------
INSURANCE: 5.4%
17,200 American Intl. Group $ 996,740
9,400 Chubb Corp. 615,230
19,400 Hartford Financial Services Group, Inc. 1,067,000
13,600 PMI Group, Inc. 506,328
48,400 Unumprovident Corp. 722,612
---------------
3,907,910
---------------
MEDIA: 2.0%
13,100 @ Fox Entertainment Group, Inc. 374,005
35,800 @ Time Warner, Inc. 582,824
19,800 Walt Disney Co. 457,182
---------------
1,414,011
---------------
MINING: 3.4%
44,700 @ Alcoa, Inc. 1,466,607
22,000 Freeport-McMoRan
Copper & Gold, Inc. 957,660
---------------
2,424,267
---------------
MISCELLANEOUS MANUFACTURING: 3.7%
7,200 Eaton Corp. 741,528
22,100 General Electric Co. 633,607
27,500 Honeywell Intl., Inc. 816,475
22,500 @@ Tyco Intl. Ltd. 516,375
---------------
2,707,985
---------------
OIL AND GAS: 4.8%
15,600 Anadarko Petroleum Corp. 700,908
11,768 Apache Corp. 844,942
7,400 ChevronTexaco Corp. 555,740
27,600 Exxon Mobil Corp. 998,292
19,000 @ Transocean, Inc. 368,220
---------------
3,468,102
---------------
OIL AND GAS SERVICES: 2.8%
17,300 Baker Hughes, Inc. 499,278
15,300 @ BJ Services Co. 487,917
21,100 Halliburton Co. 492,685
15,200 @ Smith Intl., Inc. 570,608
---------------
2,050,488
---------------
PHARMACEUTICALS: 3.1%
5,100 @ Barr Laboratories, Inc. 420,954
34,775 Pfizer, Inc. 1,166,701
17,200 Wyeth 677,680
---------------
2,265,335
---------------
RETAIL: 3.2%
21,300 Home Depot, Inc. 782,988
11,150 xx International Fast Food Corp. --
22,300 McDonald's Corp. 571,549
34,600 @ Staples, Inc. 939,390
---------------
2,293,927
---------------
SAVINGS AND LOANS: 1.2%
18,600 Washington Mutual, Inc. 852,066
---------------
852,066
---------------
SEMICONDUCTORS: 1.6%
25,700 @ National Semiconductor Corp. 1,149,304
---------------
1,149,304
---------------
</Table>
See Accompanying Notes to Financial Statements
120
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: 2.8%
26,800 AT&T Corp. $ 531,444
23,400 SBC Communications, Inc. 544,752
27,848 Verizon Communications, Inc. 912,579
---------------
1,988,775
---------------
TRANSPORTATION: 0.6%
10,200 Norfolk Southern Corp. 218,382
3,400 Union Pacific Corp. 216,512
---------------
434,894
---------------
Total Common Stock
(Cost $36,163,202) 39,966,302
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
CORPORATE BONDS: 12.8%
AIRLINES: 0.8%
$ 217,000 American Airlines, Inc., 7.024%,
due 10/15/09 216,239
117,000 American Airlines, Inc., 7.324%,
due 10/15/09 96,366
57,917 American Airlines, Inc., 6.977%,
due 05/23/21 51,477
34,550 Continental Airlines, Inc., 6.900%,
due 07/02/19 34,011
42,530 Continental Airlines, Inc., 6.545%,
due 08/02/20 41,984
30,000 Delta Air Lines, Inc., 7.779%,
due 11/18/05 27,266
23,000 Delta Air Lines, Inc., 7.299%,
due 09/18/06 20,463
79,893 US Airways Pass Through Trust,
6.850%, due 01/30/18 75,533
---------------
563,339
---------------
AUTO MANUFACTURERS: 0.3%
23,000 Ford Motor Co., 6.625%,
due 10/01/28 19,905
49,000 Ford Motor Co., 6.375%,
due 02/01/29 40,997
138,000 General Motors Corp., 8.375%,
due 07/15/33 150,765
---------------
211,667
---------------
BANKS: 2.2%
82,000 #,@@ Banco Bradesco SA, 8.750%,
due 10/24/13 85,690
52,000 Bank of America Corp., 6.375%,
due 02/15/08 57,447
14,000 # BankAmerica Institutional, Class B,
7.700%, due 12/31/26 15,637
30,000 BankBoston Capital Trust III,
1.890%, due 06/15/27 28,354
7,000 BankBoston Corp., 1.746%,
due 06/08/28 6,494
53,000 Barnett Capital I, 8.060%,
due 12/01/26 60,057
18,000 Barnett Capital II, 7.950%,
due 12/01/26 20,170
4,000 Chase Capital VI, 1.788%,
due 08/01/28 3,663
$ 45,000 # Corestates Capital Trust II, 1.800%,
due 01/15/27 $ 42,063
203,000 # Dresdner Funding Trust I, 8.151%,
due 06/30/31 225,478
53,000 FBS Capital I, 8.090%, due 11/15/26 59,898
108,000 First Union Institutional Capital II,
7.850%, due 01/01/27 121,966
84,000 #,@@ HBOS PLC, 5.375%, due 11/29/49 83,330
20,000 @@,C Hongkong & Shanghai Banking
Corp. Ltd., 1.313%, due 07/29/49 16,354
40,000 @@ HSBC Bank PLC, 1.163%,
due 06/29/49 32,311
88,000 @@ HSBC Holdings PLC, 7.500%,
due 07/15/09 102,397
53,000 M & T Bank Corp., 3.850%,
due 04/01/13 52,432
100,000 Mellon Capital I, 7.720%,
due 12/01/26 110,659
40,000 @@,C National Westminster Bank PLC,
1.313%, due 11/29/49 33,266
8,000 Nationsbank Cap Trust III, 1.700%,
due 01/15/27 7,515
70,000 # Rabobank Capital Funding II,
5.260%, due 12/29/49 70,000
47,000 RBS Capital Trust I, 4.709%,
due 12/29/49 44,286
20,000 @@ Societe Generale, 1.309%,
due 11/29/49 16,257
50,000 @@,C Standard Chartered PLC, 1.275%,
due 01/29/49 38,077
10,000 @@,C Standard Chartered PLC, 1.250%,
due 07/29/49 7,323
120,000 @@,C Standard Chartered PLC, 1.500%,
due 11/29/49 90,147
100,000 @@,C Standard Chartered PLC, 1.400%,
due 12/29/49 75,626
70,000 Wells Fargo & Co., 3.120%,
due 08/15/08 68,610
---------------
1,575,507
---------------
BEVERAGES: 0.3%
96,000 #,@@ Cia Brasileira de Bebidas, 8.750%,
due 09/15/13 101,760
20,000 Constellation Brands, Inc., 8.000%,
due 02/15/08 22,275
86,000 # Miller Brewing Co., 4.250%,
due 08/15/08 86,560
---------------
210,595
---------------
CHEMICALS: 0.0%
19,000 Dow Chemical Co., 5.750%,
due 11/15/09 20,208
---------------
20,208
---------------
COMMERCIAL SERVICES: 0.1%
27,000 @@ Quebecor Media, Inc., 11.125%,
due 07/15/11 31,185
58,000 United Rentals North America, Inc.,
10.750%, due 04/15/08 65,105
---------------
96,290
---------------
</Table>
See Accompanying Notes to Financial Statements
121
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES: 1.2%
$ 75,000 Boeing Capital Corp., 7.375%,
due 09/27/10 $ 85,993
110,000 X,#,@@ Brazilian Merchant Voucher
Receivables Ltd., 5.911%,
due 06/15/11 108,625
57,000 Citigroup Capital II, 7.750%,
due 12/01/36 64,111
85,000 Countrywide Home Loans, Inc.,
4.250%, due 12/19/07 86,658
105,000 # Farmers Exchange Capital, 7.050%,
due 07/15/28 94,901
14,000 Ford Motor Credit Co., 5.625%,
due 10/01/08 13,978
38,000 Ford Motor Credit Co., 7.375%,
due 10/28/09 40,248
136,000 XX,# Mangrove Bay Pass-Through Trust,
6.102%, due 07/15/33 134,683
20,000 Nexstar Finance, Inc., 12.000%,
due 04/01/08 22,450
61,000 # OneAmerica Financial Partners, Inc.,
7.000%, due 10/15/33 60,201
65,000 #,@@ PF Export Receivables Master Trust,
3.748%, due 06/01/13 62,999
58,473 #,@@ PF Export Receivables Master Trust,
6.436%, due 06/01/15 58,467
6,000 Technical Olympic USA, Inc.,
10.375%, due 07/01/12 6,690
30,000 # Wachovia Capital Trust V, 7.965%,
due 06/01/27 34,472
---------------
874,476
---------------
ELECTRIC: 1.1%
92,000 # Consumers Energy Co., 4.800%,
due 02/17/09 93,268
25,000 @@ Empresa Nacional de Electricidad
SA/Chile, 7.750%, due 07/15/08 26,864
199,000 @@ Empresa Nacional de Electricidad
SA/Chile, 8.350%, due 08/01/13 219,516
81,000 # Indianapolis Power & Light, 6.300%,
due 07/01/13 83,394
36,000 Nisource Finance Corp., 7.625%,
due 11/15/05 39,340
82,000 # Ohio Edison Co., 4.000%,
due 05/01/08 80,605
120,000 Ohio Power Co., 6.375%,
due 07/15/33 121,655
65,000 # PG&E Corp., 6.875%, due 07/15/08 69,550
18,000 # Power Contract Financing LLC,
5.200%, due 02/01/06 18,247
18,000 # Power Contract Financing LLC,
6.256%, due 02/01/10 18,101
---------------
770,540
---------------
ENTERTAINMENT: 0.1%
26,000 Cinemark USA, Inc., 9.000%,
due 02/01/13 28,990
27,000 Six Flags, Inc., 9.750%, due 06/15/07 28,080
---------------
57,070
---------------
ENVIRONMENTAL CONTROL: 0.1%
73,000 Allied Waste North America,
7.625%, due 01/01/06 76,650
---------------
76,650
---------------
FOOD: 0.5%
$ 38,000 Kroger Co., 7.250%, due 06/01/09 $ 43,133
26,000 Kroger Co., 5.500%, due 02/01/13 26,381
70,000 Safeway, Inc., 4.800%, due 07/16/07 72,421
103,000 Supervalu, Inc., 7.875%,
due 08/01/09 119,635
97,000 Tyson Foods, Inc., 7.250%,
due 10/01/06 106,219
---------------
367,789
---------------
FOREST PRODUCTS & PAPER: 0.3%
51,000 @@ Abitibi-Consolidated, Inc., 6.950%,
due 12/15/06 52,388
29,000 @@ Abitibi-Consolidated, Inc., 6.950%,
due 04/01/08 29,564
52,000 Georgia-Pacific Corp., 8.875%,
due 02/01/10 59,150
68,000 Weyerhaeuser Co., 7.375%,
due 03/15/32 72,800
---------------
213,902
---------------
HOME BUILDERS: 0.0%
13,000 K Hovnanian Enterprises, Inc.,
6.500%, due 01/15/14 13,033
---------------
13,033
---------------
INSURANCE: 0.4%
87,000 # Farmers Insurance Exchange,
8.625%, due 05/01/24 89,871
58,000 # Monumental Global Funding II,
3.850%, due 03/03/08 58,226
95,000 # Zurich Capital Trust I, 8.376%,
due 06/01/37 108,703
---------------
256,800
---------------
IRON/STEEL: 0.0%
50,000 Armco, Inc., 9.000%, due 09/15/07 35,250
---------------
35,250
---------------
LEISURE TIME: 0.1%
42,000 @@ Royal Caribbean Cruises Ltd.,
7.000%, due 10/15/07 44,573
---------------
44,573
---------------
LODGING: 0.3%
45,000 Mandalay Resort Group, 10.250%,
due 08/01/07 51,638
68,000 MGM Mirage, 6.000%, due 10/01/09 69,275
68,000 Park Place Entertainment Corp.,
9.375%, due 02/15/07 76,160
36,000 Starwood Hotels & Resorts
Worldwide, Inc., 7.375%,
due 05/01/07 38,745
---------------
235,818
---------------
MEDIA: 0.5%
29,000 AOL Time Warner, Inc., 6.875%,
due 05/01/12 32,311
42,000 # CCO Holdings LLC/CCO Holdings
Capital Corp., 8.750%,
due 11/15/13 41,580
75,000 Comcast Corp., 10.625%,
due 07/15/12 95,201
26,000 CSC Holdings, Inc., 10.500%,
due 05/15/16 28,860
</Table>
See Accompanying Notes to Financial Statements
122
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
MEDIA (CONTINUED)
$ 49,000 # Dex Media, Inc., 8.000%,
due 11/15/13 $ 49,980
25,000 # Echostar DBS Corp., 4.410%,
due 10/01/08 25,938
34,000 #, @@ Echostar DBS Corp., 5.750%,
due 10/01/08 34,213
26,000 Spanish Broadcasting System,
9.625%, due 11/01/09 27,560
41,000 Time Warner, Inc., 6.950%,
due 01/15/28 43,295
---------------
378,938
---------------
MISCELLANEOUS MANUFACTURING: 0.1%
105,000 General Electric Co., 5.000%,
due 02/01/13 105,576
---------------
105,576
---------------
MULTI-NATIONAL: 0.3%
83,000 @@ Corp Andina de Fomento CAF,
6.875%, due 03/15/12 92,456
100,000 @@ Corp Andina de Fomento CAF,
5.200%, due 05/21/13 99,506
---------------
191,962
---------------
OIL AND GAS: 0.9%
65,000 Amerada Hess Corp., 5.900%,
due 08/15/06 69,668
41,000 Chesapeake Energy Corp., 9.000%,
due 08/15/12 47,150
90,000 Enterprise Products Partners LP,
6.875%, due 03/01/33 93,715
215,000 @@ Husky Oil Co., 8.900%, due 08/15/28 251,819
111,000 Pemex Project Funding Master Trust,
7.375%, due 12/15/14 117,105
45,000 Valero Energy Corp., 8.750%,
due 06/15/30 55,037
44,000 Valero Energy Corp., 7.500%,
due 04/15/32 48,408
---------------
682,902
---------------
PACKAGING AND CONTAINERS: 0.4%
32,000 @@ Crown European Holdings SA,
10.875%, due 03/01/13 37,120
78,000 Owens-Brockway, 8.875%,
due 02/15/09 84,825
91,000 # Sealed Air Corp., 6.950%,
due 05/15/09 101,607
82,000 # Sealed Air Corp., 5.625%,
due 07/15/13 83,271
---------------
306,823
---------------
PIPELINES: 0.4%
105,000 CenterPoint Energy Resources Corp.,
8.125%, due 07/15/05 112,189
130,000 Plains All American Pipeline LP/PAA
Finance Corp., 7.750%,
due 10/15/12 149,500
---------------
261,689
---------------
REAL ESTATE: 0.3%
$ 78,000 EOP Operating LP, 7.750%,
due 11/15/07 $ 89,107
94,000 Liberty Property LP, 7.750%,
due 04/15/09 109,282
---------------
198,389
---------------
REITs: 0.3%
24,000 Liberty Property Trust, 6.375%,
due 08/15/12 25,776
103,000 Simon Property Group LP, 6.375%,
due 11/15/07 112,968
53,000 Simon Property Group LP, 4.875%,
due 03/18/10 53,604
---------------
192,348
---------------
SAVINGS AND LOANS: 0.1%
88,000 Washington Mutual, Inc., 4.375%,
due 01/15/08 90,094
---------------
90,094
---------------
TELECOMMUNICATIONS: 1.7%
8,000 # ACC Escrow Corp., 10.000%,
due 08/01/11 8,800
31,000 American Tower Corp., 9.375%,
due 02/01/09 32,705
13,000 # American Towers, Inc., 7.250%,
due 12/01/11 13,098
201,000 AT&T Corp., 7.800%, due 11/15/11 228,619
79,000 AT&T Wireless Services, Inc.,
8.125%, due 05/01/12 90,337
26,000 @ MCI Communications Corp., 7.81%,
due 08/15/06 21,125
26,000 Nextel Communications, Inc.,
7.375%, due 08/01/15 27,495
17,000 Qwest Communications Intl.,
7.500%, due 11/01/08 17,574
24,000 # Qwest Corp., 8.875%, due 03/15/12 27,360
39,000 # Qwest Services Corp., 13.500%,
due 12/15/10 46,069
83,000 Sprint Capital Corp., 6.000%,
due 01/15/07 87,702
99,000 Sprint Capital Corp., 6.875%,
due 11/15/28 93,578
150,000 TCI Communications Finance,
9.650%, due 03/31/27 182,062
116,000 @@ TELUS Corp., 8.000%, due 06/01/11 133,447
43,000 Verizon Florida, Inc., 6.125%,
due 01/15/13 45,914
170,000 Verizon Virginia, Inc., 4.625%,
due 03/15/13 162,596
500,000 I WinStar Communications, Inc.,
0.00%, due 04/15/10 50
---------------
1,218,531
---------------
Total Corporate Bonds
(Cost $9,528,906) 9,250,759
---------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 7.9%
AUTOMOBILE: 0.1%
40,000 USAA Auto Owner Trust, 2.040%,
due 02/16/10 39,334
---------------
39,334
---------------
</Table>
See Accompanying Notes to Financial Statements
123
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
BANKS: 0.4%
$ 276,176 XX Bank of America Mortgage Services,
1.570%, due 11/25/33 $ 276,090
---------------
276,090
---------------
COMMERCIAL MORTGAGE
BACKED SECURITIES: 2.3%
303,000 CS First Boston Mortgage Securities
Corp., 3.861%, due 03/15/36 302,259
100,000 CS First Boston Mortgage Securities
Corp., 3.382%, due 05/15/38 94,770
40,000 CS First Boston Mortgage Securities
Corp., 7.580%, due 04/14/62 46,945
215,000 DLJ Commercial Mortgage Corp.,
6.240%, due 11/12/31 235,988
570,000 DLJ Commercial Mortgage Corp.,
7.300%, due 06/10/32 656,782
97,000 GE Capital Commercial Mortgage
Corp., 5.994%, due 12/10/35 105,351
75,000 GMAC Commercial Mortgage
Securities, Inc., 6.700%,
due 04/15/34 84,409
62,000 JP Morgan Chase Commercial
Mortgage Securities Corp., 5.161%,
due 10/12/37 63,399
150,000 Wachovia Bank Commercial
Mortgage Trust, 3.989%,
due 06/15/35 140,222
---------------
1,730,125
---------------
CREDIT CARD: 0.4%
55,000 Bank One Issuance Trust, 4.540%,
due 09/15/10 55,873
55,000 Capital One Master Trust, 4.900%,
due 03/15/10 57,766
95,000 Citibank Credit Card Issuance Trust,
5.650%, due 06/16/08 101,859
75,000 MBNA Credit Card Master Note Trust,
4.950%, due 06/15/09 79,591
---------------
295,089
---------------
HOME EQUITY: 1.7%
248,000 XX Bayview Financial Acquisition Trust,
1.66%, due 12/28/34 248,000
465,777 Emergent Home Equity Loan Trust,
7.080%, due 12/15/28 495,064
172,000 XX Merrill Lynch Mortgage Investors, Inc.,
1.46%, due 07/25/34 172,000
62,689 Residential Asset Mortgage Products,
Inc., 1.429%, due 06/25/33 62,645
230,000 XX Residential Asset Securities Corp.,
1.43%, due 12/25/33 230,000
---------------
1,207,709
---------------
OTHER ASSET BACKED SECURITIES: 0.3%
118,868 XX Amortizing Residential Collateral
Trust, 1.369%, due 05/25/32 118,794
11,000 Chase Funding Mortgage Loan,
2.734%, due 09/25/24 10,876
7,000 Chase Funding Mortgage Loan,
4.045%, due 05/25/33 6,891
57,000 Chase Funding Mortgage Loan
Asset-Backed Certificates, 1.419%,
due 07/25/33 57,036
---------------
193,597
---------------
WHOLE LOAN COLLATERALLIZED MORTGAGE: 1.6%
$ 73,686 XX Bank of America Mortgage Securities,
5.500%, due 11/25/33 $ 72,765
132,545 Citicorp Mortgage Securities, Inc.,
1.619%, due 10/25/33 132,164
95,227 Countrywide Alternative Loan Trust,
1.519%, due 07/25/18 95,227
114,000 CS First Boston Mortgage Securities
Corp., 4.187%, due 10/25/33 113,134
70,743 MASTR Asset Securitization Trust,
8.000%, due 06/25/33 73,600
110,647 XX MASTR Asset Securitization Trust,
1.57%, due 11/25/33 110,716
331,000 XX MLCC Mortgage Investors, Inc., .
1.49%, due 01/25/29 331,000
178,240 Residential Accredit Loans, Inc.,
1.569%, due 03/25/18 178,084
130,000 Wells Fargo Mortgage Backed
Securities Trust, 4.500%,
due 08/25/18 120,784
---------------
1,227,474
---------------
WL COLLATERALLIZED PLANNED
AMORTIZATION CLASS: 1.1%
317,833 GSR Mortgage Loan Trust, 1.519%,
due 10/25/32 317,671
189,414 MASTR Alternative Loans Trust,
8.500%, due 05/25/33 197,411
182,000 Residential Funding Securities Corp.,
4.750%, due 02/25/33 182,177
54,968 Residential Funding Securities Corp.,
8.500%, due 05/25/33 61,521
---------------
758,780
---------------
Total Collateralized Mortgage Obligations
(Cost $5,752,833) 5,728,198
---------------
U.S. TREASURY OBLIGATIONS: 4.9%
U.S. TREASURY BONDS: 1.2%
350,000 6.250%, due 08/15/23 395,541
459,000 5.375%, due 02/15/31 475,711
---------------
871,252
---------------
U.S. TREASURY NOTES: 3.2%
1,561,000 1.625%, due 10/31/05 1,550,879
26,000 2.625%, due 11/15/06 26,074
180,000 3.375%, due 11/15/08 180,239
555,000 4.250%, due 11/15/13 551,965
---------------
2,309,157
---------------
U.S. TREASURY STRIP PRINCIPAL: 0.5%
650,000 0.000%, due 05/15/16 347,553
---------------
347,553
---------------
Total U.S. Treasury Obligations
(Cost $3,556,211) 3,527,962
---------------
U.S. GOVERNMENT AGENCY OBLIGATIONS: 19.1%
FEDERAL HOME LOAN MORTGAGE
CORPORATION: 5.8%
290,000 2.875%, due 09/15/05 294,206
280,000 5.875%, due 03/21/11 300,244
274,359 5.500%, due 01/01/14 284,316
142,168 6.000%, due 04/01/14 148,660
</Table>
See Accompanying Notes to Financial Statements
124
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION (CONTINUED)
$ 208,000 6.000%, due 01/15/28 $ 216,134
314,267 7.000%, due 06/01/29 331,688
339,413 6.500%, due 12/01/31 354,281
400,000 TBA 5.500%, due 12/15/33 402,375
929,000 TBA 6.500%, due 12/15/33 969,644
546,000 1.770%, due 01/01/49 546,000
361,000 4.500%, due 12/31/49 370,138
---------------
4,217,686
---------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION: 12.5%
320,000 2.375%, due 04/13/06 317,988
440,000 5.250%, due 04/15/07 471,560
325,000 2.875%, due 05/19/08 314,451
290,000 4.000%, due 09/02/08 291,610
6,413 5.500%, due 07/01/16 6,612
316,549 6.000%, due 08/01/16 330,769
870,000 TBA 5.000%, due 12/01/17 881,419
100,000 TBA 4.500%, due 12/15/18 99,313
192,276 6.000%, due 07/25/24 201,262
41,944 8.000%, due 08/01/30 45,332
70,850 7.500%, due 09/01/30 75,617
429,044 7.000%, due 06/01/32 453,114
100,000 7.000%, due 07/01/32 105,551
474,999 6.500%, due 10/01/32 495,470
190,444 1.519%, due 10/25/33 190,944
1,528,000 TBA 5.000%, due 12/01/33 1,500,305
1,153,000 TBA 5.500%, due 12/01/33 1,160,566
1,831,000 TBA 6.000%, due 12/15/33 1,881,352
141,000 X 4.750%, due 12/25/42 145,584
---------------
8,968,819
---------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION: 0.8%
278,215 6.500%, due 06/15/29 292,802
151,929 7.500%, due 11/15/29 162,861
105,279 8.000%, due 07/15/30 114,002
---------------
569,665
---------------
Total U.S. Government
Agency Obligations
(Cost $13,640,397) 13,756,170
---------------
OTHER BONDS: 1.6%
SOVEREIGN: 1.7%
49,000 @@ ARG Boden, 6.16%, due 08/03/12 28,935
70,000 @@ Brazilian Government Intl. Bond,
10.000%, due 08/07/11 74,340
74,000 @@ Brazilian Government Intl. Bond,
2.188%, due 04/15/12 65,612
44,000 @@ Brazilian Government Intl. Bond,
11.000%, due 08/17/40 45,232
86,000 @@,XX Central Bank of Nigeria, 5.09%,
due 01/05/10 33,325
57,000 @@ Colombia Government Intl. Bond,
10.000%, due 01/23/12 60,563
24,000 @@ Colombia Government Intl. Bond,
11.750%, due 02/25/20 27,780
43,000 @@ Dominican Republic Intl. Bond,
9.040%, due 01/23/13 33,405
44,000 @@ Ecuador Government
International Bond,
7.000%, due 08/15/30 31,039
$ 27,000 @@ El Salvador Government
International Bond, 7.750%,
due 01/24/23 $ 28,091
46,000 @@ Mexico Government Intl. Bond,
4.625%, due 10/08/08 46,184
73,000 @@ Mexico Government Intl. Bond,
6.625%, due 03/03/15 75,008
6,000 @@ Panama Government Intl. Bond,
9.375%, due 07/23/12 6,810
48,108 @@ Panama Government Intl. Bond,
1.938%, due 07/17/16 42,072
34,000 @@ Peru Government Intl. Bond,
9.125%, due 02/21/12 37,910
18,000 @@ Peru Government Intl. Bond,
4.500%, due 03/07/17 15,807
63,000 @@ Philippine Government Intl. Bond,
9.875%, due 01/15/19 62,685
43,000 @@ Republic of Bulgaria, 8.250%,
due 01/15/15 50,284
158,000 @@ Russia Government Intl. Bond,
5.000%, due 03/31/30 148,425
86,000 @@ Turkey Government Intl. Bond,
12.375%, due 06/15/09 107,285
12,000 @@ Turkey Government Intl. Bond,
9.500%, due 01/15/14 13,140
13,067 #,@@ Ukraine Government Intl. Bond,
11.000%, due 03/15/07 14,524
14,000 #,@@ Ukraine Government Intl. Bond,
7.650%, due 06/11/13 14,245
13,000 @@ Uruguay Government Intl. Bond,
7.250%, due 02/15/11 11,310
30,000 @@ Uruguay Government Intl. Bond,
7.500%, due 03/15/15 24,300
58,000 #,@@ Venezuela Government Intl. Bond,
10.750%, due 09/19/13 57,275
57,000 @@ Venezuela Government Intl. Bond,
9.250%, due 09/15/27 47,595
---------------
Total Other Bonds
(Cost $1,179,244) 1,203,181
---------------
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
PREFERRED STOCK: 0.5%
AUTO PARTS & EQUIPMENT: 0.2%
4,840 Delphi Trust I 122,936
---------------
122,936
---------------
BANKS: 0.1%
15 # DG Funding Trust 162,750
---------------
162,750
---------------
OIL AND GAS: 0.2%
4,360 @@ Nexen, Inc. 110,962
---------------
110,962
---------------
TELECOMMUNICATIONS: 0.0%
10 XO Communications, Inc. --
---------------
Total Preferred Stock
(Cost $393,176) 396,648
---------------
</Table>
See Accompanying Notes to Financial Statements
125
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
CONTRACTS VALUE
- ----------------------------------------------------------------------------------------------
OPTIONS: 0.0%
ELECTRONICS: 0.0%
130 USD Put, 40 strike, expires 01/17/04 $ 18,200
---------------
Total Options
(Cost $26,390) 18,200
---------------
<Caption>
NUMBER OF
WARRANTS VALUE
- ----------------------------------------------------------------------------------------------
WARRANTS: 0.0%
BUILDING MATERIALS: 0.0%
400 I, @ Dayton Superior Corp. 4
---------------
4
---------------
DIVERSIFIED FINANCIAL SERVICES: 0.0%
370 I,X,@ North Atlantic Trading Co. --
---------------
--
---------------
TELECOMMUNICATIONS: 0.0%
500 I, @ Iridium World Communications, Inc. 5
---------------
5
---------------
Total Warrants
(Cost $57,953) 9
---------------
Total Long-Term Investments
(Cost $70,298,312) 73,847,429
---------------
SHORT-TERM INVESTMENTS: 8.1%
REPURCHASE AGREEMENT: 8.1%
$ 897,000 Morgan Stanley Repurchase Agreement
dated 11/28/03, 1.030%, due
12/01/03, $897,077 to be received
upon repurchase (Collateralized by
$897,858 REFC, 0.000%,
Market Value $915,816 due 07/15/29) $ 897,000
---------------
5,010,000 Deutsche Bank Repurchase Agreement
dated 11/28/03, 1.060%, due 12/01/03,
$5,010,443 to be received upon
repurchase (Collateralized by
$5,010,425 Federal National Mortgage
Association, 4.750%, Market Value
$5,110,633 due 02/21/13) 5,010,000
---------------
Total Short-term Investments
(Cost $5,907,000) 5,907,000
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $76,205,312)* 110.4% $ 79,754,429
OTHER ASSETS AND
LIABILITIES-NET (10.4) (7,501,337)
----- ---------------
NET ASSETS 100.0% $ 72,253,092
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
# Securities with purchase pursuant to Rule 144A, under the Securities Act
of 1933 and may not be resold subject to that rule except to qualified
institutional buyers. These securities have been determined to be liquid
under the guidelines established by the Fund's Board of Trustees.
C Bond may be called prior to maturity date.
I Illiquid Security
X Market Value determined by ING Valuation Committee appointed by the Fund's
Board of Directors.
XX Value of securities obtained from one or more dealers making markets in
the securities which have been adjusted based on the Fund's valuation
procedures.
* Cost for federal income tax purposes is the same as for financial
statement purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 6,343,909
Gross Unrealized Depreciation (2,786,603)
---------------
Net Unrealized Appreciation $ 3,557,306
===============
</Table>
See Accompanying Notes to Financial Statements
126
<Page>
ING
Real Estate
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------------------------
COMMON STOCK: 98.7%
HEALTHCARE-PRODUCTS: 0.7%
56,300 Ventas, Inc. $ 1,127,126
---------------
1,127,126
---------------
HOME BUILDERS: 4.3%
20,500 @ Hovnanian Enterprises, Inc. 1,891,125
18,700 Lennar Corp. 1,830,730
55,600 @ Technical Olympic USA, Inc. 1,498,976
46,500 @ Toll Brothers, Inc. 1,925,565
---------------
7,146,396
---------------
LODGING: 4.0%
191,300 @ Starwood Hotels & Resorts
Worldwide, Inc. 6,594,111
---------------
6,594,111
---------------
REAL ESTATE: 1.6%
109,800 Catellus Development Corp. 2,580,300
---------------
2,580,300
---------------
REITs: 88.1%
143,700 Acadia Realty Trust 1,734,459
46,400 AMB Property Corp. 1,459,744
203,900 Arden Realty, Inc. 5,957,958
10,000 Boston Properties, Inc. 462,500
176,100 Camden Property Trust 7,403,244
47,000 Chelsea Property Group, Inc. 2,538,000
100,000 Corporate Office Properties
Trust Sbi MD 2,069,000
109,000 Developers Diversified
Realty Corp. 3,434,590
200,600 Equity Residential 5,889,616
105,000 @ First Potomac Realty Trust 1,785,000
90,600 Gables Residential Trust 2,926,380
87,200 General Growth Properties, Inc. 7,028,320
158,600 Health Care REIT, Inc. 5,538,312
113,100 Heritage Property
Investment Trust 3,183,765
176,600 Hersha Hospitality Trust 1,631,784
99,500 Home Properties of NY, Inc. 4,004,875
532,500 @ Host Marriott Corp. 5,937,375
124,700 Keystone Property Trust 2,526,422
175,200 Liberty Property Trust 6,627,816
207,200 Macerich Co. 8,743,840
156,600 Mack-Cali Realty Corp. 6,248,340
203,700 Maguire Properties, Inc. 4,664,730
117,900 Mills Corp. 5,110,965
201,700 New Plan Excel Realty Trust 4,931,565
142,100 Pennsylvania Real Estate
Investment Trust 4,902,450
188,200 Prentiss Properties Trust 5,975,350
168,100 Prologis $ 5,127,050
110,400 Regency Centers Corp. 4,360,800
52,100 Shurgard Storage Centers, Inc. 1,943,330
123,600 Simon Property Group, Inc. 5,864,820
434,600 Trizec Properties, Inc. 6,053,978
229,900 United Dominion Realty Trust, Inc. 4,241,655
108,500 Vornado Realty Trust 5,936,035
---------------
146,244,068
---------------
Total Common Stock
(Cost $132,518,779) 163,692,001
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $132,518,779)* 98.7% $ 163,692,001
OTHER ASSETS AND
LIABILITIES-NET 1.3 2,188,264
----- ---------------
NET ASSETS 100.0% $ 165,880,265
===== ===============
</Table>
@ Non-income producing security
REITs Real Estate Investment Trusts
* Cost for federal income tax purposes is the same as for financial
statement purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 31,344,725
Gross Unrealized Depreciation (171,503)
---------------
Net Unrealized Appreciation $ 31,173,222
===============
</Table>
See Accompanying Notes to Financial Statements
127
<Page>
SHAREHOLDER MEETING INFORMATION (Unaudited)
A SPECIAL MEETING OF SHAREHOLDERS OF THE ING RETAIL FUNDS (FORMERLY PLIGRIM
RETAIL FUNDS) AND VARIABLE PRODUCTS HELD JULY 22, 2003, AT THE OFFICES OF ING
FUNDS, 7337 EAST DOUBLETREE RANCH ROAD, SCOTTSDALE, AZ 85258.
A BRIEF DESCRIPTION OF EACH MATTER VOTED UPON AS WELL AS THE RESULTS ARE
OUTLINED BELOW:
1. To approve a Sub-Advisory Agreement between ING Investments, LLC and ING
Aeltus Investment Management, Inc., with no change in the Adviser, the
portfolio manager(s), or the overall management fee paid by the Fund.
2. To transact such other business, not currently contemplated, that may
properly come before the Special Meeting or any adjournment(s) thereof in
the discretion of the proxies or their substitutes.
<Table>
<Caption>
SHARES VOTED
AGAINST OR SHARES BROKER TOTAL SHARES
PROPOSAL SHARES VOTED FOR WITHHELD ABSTAINED NON-VOTE VOTED
-------- ---------------- ------------ --------- -------- ------------
ING Convertible Fund 1 9,590,412 248,443 319,867 -- 10,158,722
ING Equity and Bond Fund 1 5,798,657 68,271 162,928 -- 6,029,856
ING Financial Services Fund 1 13,388,499 341,458 298,507 -- 14,028,464
ING Growth Opportunities Fund 1 11,271,875 314,530 234,256 -- 11,820,661
ING MagnaCap Fund 1 16,389,876 429,328 529,351 -- 17,348,555
ING MidCap Opportunities Fund 1 14,170,301 353,237 550,343 -- 15,073,881
ING SmallCap Opportunities Fund 1 13,401,843 307,307 316,357 -- 14,025,507
ING Tax Efficient Equity Fund 1 3,047,281 13,126 21,474 -- 3,081,881
ING Convertible Fund 2 9,523,301 275,844 359,577 -- 10,158,722
ING Equity and Bond Fund 2 5,714,223 134,301 181,332 -- 6,029,856
ING Financial Services Fund 2 13,257,094 417,995 353,375 -- 14,028,464
ING Growth Opportunities Fund 2 11,144,124 384,043 292,494 -- 11,820,661
ING MagnaCap Fund 2 16,179,702 543,555 625,298 -- 17,348,555
ING MidCap Opportunities Fund 2 13,919,022 568,982 585,877 -- 15,073,881
ING SmallCap Opportunities Fund 2 13,091,030 494,380 440,097 -- 14,025,507
ING Tax Efficient Equity Fund 2 3,037,678 21,632 22,571 -- 3,081,881
</Table>
128
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited)
The business and affairs of the Trusts are managed under the direction of the
Trusts' Board of Trustees. A Trustee who is not an interested person of the
Trusts, as defined in the 1940 Act, is an independent trustee ("Independent
Trustee"). The Trustees and Officers of the Trust are listed below. The
Statement of Additional Information includes additional information about
trustees of the Registrant and is available, without charge, upon request at
1-800-992-0180.
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY
AND AGE TRUST SERVED(1) PAST FIVE YEARS BY TRUSTEE TRUSTEE
- ----------------------------- ----------- -------------- ------------------------ ------------- ------------------------
INDEPENDENT TRUSTEES
Paul S. Doherty(2) Trustee October Mr. Doherty is President 116 --
7337 E. Doubletree Ranch Rd. 1999 - Present and Partner, Doherty,
Scottsdale, AZ 85258 Wallace, Pillsbury and
Born: 1934 Murphy, P.C., Attorneys
(1996 - Present);
Director, Tambrands,
Inc. (1993 - 1998); and
Trustee of each of the
funds managed by
Northstar Investment
Management
Corporation (1993 -
1999).
J. Michael Earley(3) Trustee February President and Chief 116 --
7337 E. Doubletree Ranch Rd. 2002 - Present Executive Officer,
Scottsdale, AZ 85258 Bankers Trust Company,
Born: 1945 N.A. (1992 - Present).
R. Barbara Gitenstein(2) Trustee February President, College of 116 --
7337 E. Doubletree Ranch Rd. 2002 - Present New Jersey (1999 -
Scottsdale, AZ 85258 Present). Formerly,
Born: 1948 Executive Vice
President and Provost,
Drake University (1992 -
1998).
Walter H. May(2) Trustee October Retired. Formerly, 116 Best Prep Charity
7337 E. Doubletree Ranch Rd. 1999 - Present Managing Director and (1991 - Present).
Scottsdale, AZ 85258 Director of Marketing,
Born: 1936 Piper Jaffray, Inc.;
Trustee of each of the
funds managed by
Northstar Investment
Management
Corporation (1996 -
1999).
Jock Patton(2) Trustee August 1995 - Private Investor 116 Director, Hypercom, Inc.
7337 E. Doubletree Ranch Rd. Present for ING (June 1997 - Present). (January 1999 -
Scottsdale, AZ 85258 Investment Formerly Director and Present); JDA Software
Born: 1945 Funds, Inc. Chief Executive Officer, Group, Inc.
Rainbow Multimedia (January 1999 -
October 1999 - Group, Inc. (January Present); Buick of
Present for ING 1999 - December 2001); Scottsdale, Inc.; and
Mayflower Director of Stuart National Airlines, Inc.
Trust and ING Entertainment, Inc.;
Equity Trust Director of Artisoft, Inc.
(1994 - 1998).
</Table>
129
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY
AND AGE TRUST SERVED(1) PAST FIVE YEARS BY TRUSTEE TRUSTEE
- ----------------------------- ----------- -------------- ------------------------ ------------- ------------------------
David W.C. Putnam(3) Trustee October President and Director, 116 Anchor International
7337 E. Doubletree Ranch Rd. 1999 - Present F.L. Putnam Securities Bond (December 2000 -
Scottsdale, AZ 85258 Company, Inc. and its Present); Progressive
Born: 1939 affiliates; President, Capital Accumulation
Secretary and Trustee, Trust (August 1998 -
The Principled Equity Present); Principled
Market Fund. Formerly, Equity Market Fund
Trustee, Trust Realty (November 1996 -
Trust (December Corp.; Present), Mercy
Anchor Investment Endowment
Trust; Bow 2000 - Foundation (1995 -
Present); Ridge Mining Present); Director,
Company and each of F.L. Putnam Investment
the F.L. Putnam funds Management Company
managed by Northstar (December 2001 -
Investment Foundation Present); Asian
Management American Bank and
Corporation (1994 - Trust Company (June
1999). 1992 - Present); and
Notre Dame Health
Care Center (1991 -
Present) F.L. Putnam
Securities Company, Inc.
(June 1978 - Present);
and an Honorary
Trustee, Mercy Hospital
(1973 - Present).
Blaine E. Rieke(3) Trustee February General Partner, 116 Morgan Chase Trust Co.
7337 E. Doubletree Ranch Rd. 2001 - Present Huntington Partners (January 1998 -
Scottsdale, AZ 85258 (January 1997 - Present).
Born: 1933 Present). Chairman of
the Board and Trustee
of each of the funds
managed by ING
Investment
Management Co. LLC
(November 1998 -
February 2001).
Roger B. Vincent(3) Trustee February President, Springwell 116 Director, AmeriGas
7337 E. Doubletree Ranch Rd. 2002 - Present Corporation (1989 - Propane, Inc. (1998 -
Scottsdale, AZ 85258 for ING Present). Formerly, Present).
Born: 1945 Investment Director Tatham
Funds, Inc. and Offshore, Inc. (1996 -
ING Equity 2000).
Trust
October
1999 - Present
for ING
Mayflower
Trust
Richard A. Wedemeyer(2) Trustee February Retired. Mr. Wedemeyer 116 Touchstone Consulting
7337 E. Doubletree Ranch Rd. 2001 - Present was formerly Vice Group (1997 - Present).
Scottsdale, AZ 85258 President -- Finance
Born: 1936 and Administration,
Channel Corporation
(June 1996 - April 2002).
Formerly Vice President,
Operations and
Administration, Jim
Henson Productions.
(1979 - 1997); Trustee,
First Choice Funds
(1997 - 2001); and of
each of the funds
managed by ING
Investment
Management Co. LLC
(1998 - 2001).
</Table>
130
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY
AND AGE TRUST SERVED(1) PAST FIVE YEARS BY TRUSTEE TRUSTEE
- ------------------------------------- ----------- -------------- ------------------------- ------------- ----------------------
TRUSTEES WHO ARE "INTERESTED PERSONS"
Thomas J. McInerney(4) Trustee February Chief Executive Officer, 170 Director, Hemisphere
7337 E. Doubletree Ranch Rd. 2001 - Present ING U.S. Financial Inc. (May 2003 -
Scottsdale, AZ 85258 Services Present); Equitable
Born: 1956 (September 2001 - Life Insurance Co.,
Present); General Golden American Life
Manager and Chief Insurance Co., Life
Executive Officer, ING Insurance Company of
U.S. Worksite Financial Georgia, Midwestern
Services (December United Life
2000 - Present); Insurance Co.,
Member ING Americas ReliaStar Life
Executive Committee Insurance Co.,
(2001 - Present); Security Life of
President, Chief Denver, Security
Executive Officer and Connecticut Life
Director of Northern Insurance Co.,
Life Insurance Company Southland Life
(March 2001 - October Insurance Co., USG
2002), ING Aeltus Annuity and Life
Holding Company, Inc. Company, and United
(2000 - Present), ING Life and Annuity
Retail Holding Insurance Co. Inc
Company (1998 - (March 2001 -
Present), ING Life Present); Director,
Insurance and Annuity Ameribest Life
Company Insurance Co.,
(September 1997 - (March 2001 to
November 2002) and January 2003);
ING Retirement Director, First
Holdings, Inc. (1997 - Columbine Life
Present). Formerly, Insurance Co. (March
General Manager and 2001 to December
Chief Executive Officer, 2002); Member of the
ING Worksite Division Board, National
(December 2000 - Commission on
October 2001), Retirement Policy,
President ING-SCI, Inc. Governor's Council
(August 1997 - on Economic
December 2000); Competitiveness and
President, Aetna Technology of
Financial Services Connecticut,
(August 1997 - Connecticut Business
December 2000). and Industry
Association,
Bushnell;
Connecticut Forum;
Metro Hartford
Chamber of Commerce;
and is Chairman,
Concerned Citizens
for Effective
Government.
</Table>
131
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY
AND AGE TRUST SERVED(1) PAST FIVE YEARS BY TRUSTEE TRUSTEE
- ------------------------------------- ----------- -------------- ------------------------- ------------- ----------------------
John G. Turner(5) Trustee October Chairman, Hillcrest 116 Director, Hormel Foods
7337 E. Doubletree Ranch Rd. 1999 - Present Capital Partners Corporation
Scottsdale, AZ 85258 (May 2002 - (March 2000 -
Born: 1939 Present); President, Present); Shopko
Turner Investment Stores, Inc. (August
Company (January 1999 - Present); and
2002 - Present). Mr. M.A. Mortenson
Turner was formerly Company (March 2002
Vice Chairman of ING - Present).
Americas (2000 -
2002); Chairman and
Chief Executive
Officer of ReliaStar
Financial Corp. and
ReliaStar Life
Insurance Company
(1993 - 2000);
Chairman of
ReliaStar United
Services Life
Insurance Company
(1995 - 1998);
Chairman of
ReliaStar Life
Insurance Company of
New York (1995 -
2001); Chairman of
Northern Life
Insurance Company
(1992 - 2001);
Chairman and Trustee
of the Northstar
affiliated
investment companies
(1993 - 2001) and
Director, Northstar
Investment
Management
Corporation and its
affiliates (1993 -
1999).
</Table>
- ----------
(1) Trustees serve until their successors are duly elected and qualified,
subject to the Board's retirement policy.
(2) Valuation Committee member.
(3) Audit Committee member.
(4) Mr. McInerney is an "interested person," as defined under the 1940 Act,
because of his affiliation with ING U.S. Financial Services and ING U.S.
Worksite Financial Services, both affiliates of ING Investments, LLC.
(5) Mr. Turner is an "interested person," as defined under the 1940 Act,
because of his affiliation with ING Americas, an affiliate of ING
Investments, LLC.
132
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
TERM OF OFFICE OCCUPATION(S)
NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE
AND AGE HELD WITH THE TRUST TIME SERVED(1) PAST FIVE YEARS
- ------------------------------------- --------------------------- ------------------------- --------------------------------
OFFICERS:
James M. Hennessy President and Chief February 2001 to President and Chief Executive
7337 E. Doubletree Ranch Rd. Executive Officer Present Officer of ING Capital
Scottsdale, AZ 85258 Corporation, LLC, ING Funds
Born: 1949 Chief Operating June 2000 to Present Services, LLC, ING Advisors,
Officer Inc., ING Investments, LLC,
Lexington Funds Distributor,
Senior Executive Vice June 2000 - Inc., Express America T.C.
President February 2001 Inc. and EAMC Liquidation
Corp. (since December 2001);
Senior Vice President April 1995 - June 2000 Executive Vice President and
for ING Investment Chief Operating Officer of ING
Secretary Funds, Inc. Funds Distributor, LLC (since
June 2000). Formerly,
April 1995 - February Executive Vice President and
2001 for ING Chief Operating Officer of ING
Investment Funds, Inc. Quantitative Management, Inc.
(October 2001 to September
November 1999 - 2002); Senior Executive Vice
Februrary 2001 for President (June 2000 to
ING Equity Trust and December 2000) and Secretary
ING Mayflower Trust (April 1995 to December 2000)
of ING Capital Corporation,
LLC, ING Funds Services, LLC,
ING Investments, LLC, ING
Advisors, Inc., Express
America T.C. Inc., and EAMC
Liquidation Corp.; and
Executive Vice President, ING
Capital Corporation, LLC and
its affiliates (May 1998 to
June 2000) and Senior Vice
President, ING Capital
Corporation, LLC and its
affiliates (April 1995 to
April 1998).
Stanley D. Vyner Executive Vice July 1996 - Present for Executive Vice President of
7337 E. Doubletree Ranch Rd. President ING Investment Funds, ING Advisors, Inc. and ING
Scottsdale, Arizona 85258 Inc. Investments, LLC (July 2000 to
Born: 1950 present) and Chief Investment
November 1999 - Officer of the International
Present for ING Equity Portfolios, ING Investments,
Trust and ING LLC (July 1996 to present).
Mayflower Trust Formerly, President and Chief
Executive Officer of ING
Investments, LLC (August 1996
to August 2002).
Michael J. Roland Executive Vice February 2002 - Executive Vice President,
7337 E. Doubletree Ranch Rd. President and Present Chief Financial Officer and
Scottsdale, AZ 85258 Assistant Secretary Treasurer of ING Funds
Born: 1958 Services, LLC, ING Funds
Principal Financial June 1998 - Present Distributor, LLC, ING
Officer for ING Investment Advisors, Inc., ING
Funds, Inc. Investments, LLC (December
2001 to present), Lexington
November 1999 - Funds Distributor, Inc.,
Present for ING Equity Express America T.C. Inc. and
Trust and ING EAMC Liquidation Corp. (since
Mayflower Trust December 2001). Formerly,
Executive Vice President,
Senior Vice June 1998 - February Chief Financial Officer and
President 2002 for ING Treasurer of ING Quantitative
Investment Funds, Inc. Management, Inc. (December
2001 to October 2002); Senior
November 1999 - Vice President, ING Funds
February 2002 for ING Services, LLC, ING
Equity Trust and ING Investments, LLC, and ING
Mayflower Trust Funds Distributor, LLC (June
1998 to December 2001) and
Chief Financial Officer of
Endeavor Group (April 1997 to
June 1998).
</Table>
133
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
TERM OF OFFICE OCCUPATION(S)
NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE
AND AGE HELD WITH THE TRUST TIME SERVED(1) PAST FIVE YEARS
- ------------------------------------- --------------------------- ------------------------- --------------------------------
Robert S. Naka Senior Vice President November 1999 - Senior Vice President and
7337 E. Doubletree Ranch Rd. Present Assistant Secretary of ING
Scottsdale, AZ 85258 Assistant Secretary Funds Services, LLC, ING Funds
Born: 1963 July 1996 - Present for Distributor, LLC, ING
Vice President ING Investment Funds, Advisors, Inc., ING
Inc. Investments, LLC (October 2001
Assistant Vice to present) and Lexington
President November 1999 - Funds Distributor, Inc. (since
Present for ING Equity December 2001). Formerly,
Trust and ING Senior Vice President and
Mayflower Trust Assistant Secretary for ING
Quantitative Management, Inc.
May 1997 - November (October 2001 to October
1999 for ING 2002); Vice President, ING
Investment Funds, Inc. Investments, LLC (April 1997
to October 1999), ING Funds
July 1996 - May 1997 Services, LLC (February 1997
for ING Investment to August 1999) and Assistant
Funds, Inc. Vice President, ING Funds
Services, LLC (August 1995 to
February 1997).
Kimberly A. Anderson Senior Vice President November 2003 - Vice President and Assistant
7337 E. Doubletree Ranch Rd. Present Secretary of ING Funds
Scottsdale, AZ 85258 Services, LLC, ING Funds
Born: 1964 Vice President February 2001 - Distributor, LLC, ING
November 2003 Advisors, Inc., ING
Investments, LLC (since
Secretary February 2001 - October 2001) and Lexington
August 2003 Funds Distributor, Inc. (since
December 2001). Formerly, Vice
President for ING Quantitative
Management, Inc. (October 2001
to October 2002); Assistant
Vice President of ING Funds
Services, LLC (November 1999
to January 2001) and has held
various other positions with
ING Funds Services, LLC for
more than the last five years.
Robyn L. Ichilov Vice President November 1997 - Vice President of ING Funds
7337 E. Doubletree Ranch Rd. Present for ING Services, LLC (since October
Scottsdale, AZ 85258 Investment Funds, Inc. 2001) and ING Investments, LLC
Born: 1967 (since August 1997);
November 1999 - Accounting Manager, ING
Present for ING Equity Investments, LLC (since
Trust and ING November 1995)
Mayflower Trust
Treasurer May 1998 - Present
for ING Investment
Funds, Inc.
November 1999 -
Present for ING Equity
Trust and ING
Mayflower Trust
J. David Greenwald Vice President August 2003 - Present Vice President of Mutual Fund
7337 E. Doubletree Ranch Rd. Compliance of ING Funds
Scottsdale, Arizona 85258 Services, LLC (May 2003 -
Born: 1957 Present). Formerly Assistant
Treasurer and Director of
Mutual Fund Compliance and
Operations of American
Skandia, A Prudential
Financial Company (October
1996 - May 2003).
</Table>
134
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
TERM OF OFFICE OCCUPATION(S)
NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE
AND AGE HELD WITH THE TRUST TIME SERVED(1) PAST FIVE YEARS
- ------------------------------------- --------------------------- ------------------------- --------------------------------
Lauren D. Bensinger Vice President February 2003 - Vice President and Chief
7337 E. Doubletree Ranch Rd. Present Compliance Officer, ING Funds
Scottsdale, Arizona 85258 Distributor, LLC. (July 1995
Born: 1954 to Present); Vice President
(February 1996 to Present) and
Chief Compliance Officer
(October 2001 to Present) ING
Investments, LLC; Vice
President and Chief Compliance
Officer, ING Advisors, Inc.
(July 2000 to Present),
Formerly Vice President and
Chief Compliance Officer ING
Quantitative Management, Inc.
(July 2000 to September 2002),
and Vice President, ING Fund
Services, LLC (July 1995 to
Present).
Todd Modic Vice President August 2003 - Present Vice President of Financial
7337 E. Doubletree Ranch Rd. Reporting-Fund Accounting of
Scottsdale, AZ 85258 Assistant Vice August 2001 - ING Funds Services, LLC
Born: 1967 President August 2003 (September 2002 to present).
Formerly, Director of
Financial Reporting of ING
Investments, LLC (March 2001
to September 2002). Director
of Financial Reporting, Axient
Communications, Inc. (May 2000
to January 2001) and Director
of Finance, Rural/Metro
Corporation (March 1995 to May
2000).
Huey P. Falgout, Jr. Secretary August 2003 - Present Counsel, ING U.S. Financial
7337 E. Doubletree Ranch Rd. Services (November 2002 -
Scottsdale, Arizona 85258 Present). Formerly, Associate
Born: 1963 General Counsel of AIG
American General (January 1999
- November 2002) and Associate
General Counsel of Van Kampen,
Inc. (April 1992 - January
1999).
Susan P. Kinens Assistant Vice February 2003 - Assistant Vice President and
7337 E. Doubletree Ranch Rd. President and Present Assistant Secretary, ING Funds
Scottsdale, AZ 85258 Assistant Secretary Services, LLC (December 2002 -
Born: 1976 Present); and has held various
other positions with ING Funds
Services, LLC for the last
five years.
Maria M. Anderson Assistant Vice August 2001 - Present Assistant Vice President of ING
7337 E. Doubletree Ranch Rd. President Funds Services, LLC (since October
Scottsdale, AZ 85258 2001). Formerly, Manager of Fund
Born: 1958 Accounting and Fund Compliance,
ING Investments, LLC
(September 1999 to November
2001); Section Manager of Fund
Accounting, Stein Roe Mutual
Funds (July 1998 to August
1999); and Financial Reporting
Analyst, Stein Roe Mutual
Funds (August 1997 to July
1998).
Theresa Kelety Assistant Secretary August 2003 - Present Counsel, ING U.S. Financial Services
7337 E. Doubletree Ranch Rd. (April 2003 - Present). Formerly,
Scottsdale, Arizona 85258 Senior Associate with Shearman &
Born: 1963 Sterling (February 2000 -
April 2003) and Associate with
Sutherland Asbill & Brennan
(1996 - February 2000).
</Table>
- ----------
(1) The officers hold office until the next annual meeting of the Trustees and
until their successors have been elected and qualified.
135
<Page>
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<Page>
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<Page>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<Page>
ING Funds Distributor, LLC offers the funds listed below. Before investing in a
fund, shareholders should carefully review the fund's prospectus. Investors may
obtain a copy of a prospectus of any ING Fund by calling (800) 992-0180.
INTERNATIONAL EQUITY FUNDS
ING Emerging Countries Fund
ING Foreign Fund
ING International Fund
ING International Growth Fund
ING International SmallCap Growth Fund
ING International Value Fund
ING Precious Metals Fund
ING Russia Fund
INTERNATIONAL GLOBAL EQUITY FUNDS
ING Global Equity Dividend Fund
ING Global Real Estate Fund
ING Worldwide Growth Fund
DOMESTIC EQUITY GROWTH FUNDS
ING Growth Fund
ING Growth + Value Fund
ING Growth Opportunities Fund
ING LargeCap Growth Fund
ING MidCap Opportunities Fund
ING SmallCap Opportunities Fund
ING Small Company Fund
ING Technology Fund
ING Disciplined LargeCap Fund
DOMESTIC EQUITY INDEX FUNDS
ING Index Plus LargeCap Fund
ING Index Plus MidCap Fund
ING Index Plus SmallCap Fund
DOMESTIC EQUITY VALUE FUNDS
ING Financial Services Fund
ING MagnaCap Fund
ING Tax Efficient Equity Fund
ING Value Opportunity Fund
ING SmallCap Value Fund
ING MidCap Value Fund
DOMESTIC EQUITY GROWTH AND INCOME FUNDS
ING Equity and Bond Fund
ING Convertible Fund
ING Real Estate Fund
ING Balanced Fund
ING Growth and Income Fund
FIXED INCOME FUNDS
ING Bond Fund
ING Classic Money Market Fund*
ING Government Fund
ING GNMA Income Fund
ING High Yield Opportunity Fund
ING High Yield Bond Fund
ING Intermediate Bond Fund
ING Lexington Money Market Trust*
ING National Tax Exempt Bond Fund
ING Money Market Fund*
ING Aeltus Money Market Fund*
ING Strategic Bond Fund
STRATEGIC ALLOCATION FUNDS
ING Strategic Allocation Growth Fund
ING Strategic Allocation Balanced Fund
ING Strategic Allocation Income Fund
LOAN PARTICIPATION FUND
ING Prime Rate Trust
ING Senior Income Fund
* An investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation 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.
<Page>
INVESTMENT MANAGER
ING Investments, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
ADMINISTRATOR
ING Funds Services, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
DISTRIBUTOR
ING Funds Distributor, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
1-800-992-0180
TRANSFER AGENT
DST Systems, Inc.
P.O. Box 419368
Kansas City, Missouri 64141-6368
CUSTODIAN
Bank of New York
100 Colonial Center Parkway, Suite 300
Lake Mary, FL 32746
LEGAL COUNSEL
Dechert LLP
1775 Eye Street, N.W.
Washington, D.C. 20006
INDEPENDENT AUDITORS
KPMG LLP
99 High Street
Boston, MA 02110
A prospectus containing more complete information regarding the Funds, including
charges and expenses, may be obtained by calling ING Funds Distributor, LLC at
1-800-992-0180. Please read the prospectus carefully before you invest or send
money. The Funds' proxy voting record will be available without charge on or
about August 31, 2004 on the Funds' website at www.ingfunds.com and on the SEC's
website at www.sec.gov.
[ING FUNDS LOGO]
DEABCSAR1103-012904
<Page>
SEMI-ANNUAL REPORT
NOVEMBER 30, 2003
CLASSES I AND Q
DOMESTIC EQUITY GROWTH FUNDS
ING GROWTH + VALUE FUND
ING GROWTH OPPORTUNITIES FUND
ING LARGECAP GROWTH FUND
ING MIDCAP OPPORTUNITIES FUND
ING SMALLCAP OPPORTUNITIES FUND
ING DISCIPLINED LARGECAP FUND
DOMESTIC EQUITY VALUE FUNDS
ING MAGNACAP FUND
ING MIDCAP VALUE FUND
ING SMALLCAP VALUE FUND
DOMESTIC EQUITY AND INCOME FUNDS
ING CONVERTIBLE FUND
ING EQUITY AND BOND FUND
ING REAL ESTATE FUND
[GRAPHIC]
[ING FUNDS LOGO]
<Page>
TABLE OF CONTENTS
<Table>
President's Letter 1
Market Perspective 2
Portfolio Managers' Reports 4
Index Descriptions 28
Statements of Assets and Liabilities 30
Statements of Operations 38
Statements of Changes in Net Assets 42
Financial Highlights 48
Notes to Financial Statements 60
Portfolios of Investments 77
Shareholder Meeting Information 105
Trustee and Officer Information 106
</Table>
<Page>
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<Page>
PRESIDENT'S LETTER
[PHOTO OF JAMES M. HENNESSY]
JAMES M. HENNESSY
Dear Shareholder,
What a difference a few months can make. In my last letter to our shareholders
in the annual report, it was hard to escape the sense of anxiety that many
investors were experiencing. Now, six months later, I believe there may be a
renewed sense of optimism among investors -- cautious optimism, to be sure, but
optimism nevertheless.
And I believe there are good, solid reasons for this improved outlook. For one,
many key corporations have been reporting profits in recent months. Granted, the
numbers are modest, but they have been noteworthy, consistent and credible
because many of these same companies are employing stricter accounting standards
following the Enron debacle. Going hand-in-hand with these upbeat figures are
the improving price-to-earning ratios and improving valuations that many
investors are now seeing.
This renewed confidence has been tempered, however, by recent events and news
stories concerning mutual fund trading practices, including after-hours trading
and market timing. As with many financial services companies, ING Investments,
LLC ("ING Investments"), investment adviser to the ING Funds, and affiliates of
ING Investments (collectively, "ING") have received requests for information
from various governmental and self-regulatory agencies in connection with
investigations related to trading in investment company shares. In each case,
full cooperation and responses are being provided. ING is also conducting an
internal review of investment company share trading, as well as reviewing their
policies and procedures in this area.
Also, I want to clearly state that ING Funds does not condone the illegal
practice of after-hours trading. In addition, it has been our long-standing
policy to discourage inappropriate fund trading in our funds. In fact, over the
years, ING Funds has taken a variety of steps to address inappropriate fund
trading activity. We were among the first fund groups to employ innovative
techniques such as making extensive use of fair-value pricing for foreign
securities.
ING Funds believes that mutual funds are an important vehicle for individual
investors, because mutual funds provide the opportunity for investment in
professionally managed and monitored, diversified portfolios. As such, we
consider the fair treatment of committed investors to be of the utmost
importance. We continue to look for effective strategies to address fund trading
issues. We hope that the increased attention this issue is now receiving will
make it easier for the industry to effectively address inappropriate fund
trading in the future.
On behalf of everyone at ING Funds, thank you for your continued support. We
look forward to helping you meet your investment goals in the future.
Sincerely,
/s/ James M. Hennessy
James M. Hennessy
President
ING Funds
January 9, 2004
1
<Page>
MARKET PERSPECTIVE: SIX MONTHS ENDED NOVEMBER 30, 2003
During the six months ended November 30, 2003, GLOBAL EQUITIES were strong
practically across the board, after bouncing sharply from low points in March
and April as major conflict in Iraq quickly ended. The Morgan Stanley Capital
International ("MSCI") World Index rose 14.7% in dollars. The period started
with the world's major economies still weak after recession. Some would get
weaker still. But by the end, a remarkable acceleration in the U.S. had improved
the outlook in that country and dragged the rest of the world into growth.
U.S. EQUITIES returned 10.8% in the six months, based on the Standard & Poor's
("S&P") 500 Index including dividends. This implied, by the end of November, a
market trading at about 17.2 times 2004 estimated earnings. This is a not
particularly compelling level, similar to those seen during much of the period.
But what a difference six months makes. By the end of May the first quarter
Gross Domestic Product ("GDP") growth, reported at just 1.4% annualized, had
included corporate earnings only about 2.4% higher than in the same quarter of
2002 and declining equipment and software expenditure. But second quarter GDP
growth estimates were revised up to a healthy 3.3%, with corporate profits from
current production advancing 14.3%. Spending on equipment and software rose by
8.3%. Productivity growth was estimated at the excellent rate of 6.8%. Then in
the last days of November, third quarter GDP growth was revised up to a
remarkable 8.2% annualized. This was the best showing since the first quarter of
1984. The components of this figure were as encouraging as the total. Consumer
spending rose 6.4% and while half of this could be attributed to an income tax
cut enacted earlier in the year, nothing could dilute the importance of the rise
in business fixed investment of 16.7% within which equipment and software
purchases rose a buoyant 18.4%. Profits rose 11.8% annualized from the second
quarter and fully 30% from the third quarter of 2002. The lingering concern had
been the slow growth in jobs. But here too there was progress. The employment
report showed that the economy had created 286,000 jobs in the three months
through October, while by the end of November unemployment claims had fallen to
about 350,000. Add to this continued expansion in the manufacturing and service
industries, booming housing and construction and a raft of other positive
statistics and it seemed clear that the U.S. economy was confidently on the
move.
U.S. FIXED INCOME markets had been propelled higher in May when Federal Open
Market Committee ("FOMC") Chairman Greenspan asserted that to forestall
deflation, the Federal Reserve might purchase bonds. But after disappointing
markets by only reducing the Fed Funds rate by 0.25% at the end of June and
appearing to downplay the likelihood of bond purchases after all, bond yields
soared. The ten-year Treasury yield at the end of November was 4.32%, almost
exactly 1% above the starting yield on May 30. Conversely the 13-week bill rate
fell by 0.18%. For the six months, according to Lehman Brothers Fixed Income
Indices, U.S. Treasuries had a return of -2.9%. Corporate Investment Grade Bonds
did less badly, returning -0.9%. But the high yield sector performed much better
than investment grade bonds, given its closer affinity with equities. The Lehman
Brothers High Yield Bond Index rose 9.5% for the six months ended November 30,
2003.
CURRENCIES were never far from the headlines during the six months, particularly
the weakening dollar against the Euro. The main reasons for the Euro's strength
over the last year have been the growing realization that the U.S.'s current
account deficit, approximately $500 billion per annum, is unsustainable,
together with the fact that other major trading partners like China and (until
recently) Japan have been able to stop their currencies from rising. The Bank of
Japan has spent an astonishing $162 billion in 2003 to slow the Yen's rise.
Unsurprisingly, despite presently tame inflation, the world's oldest "real"
currency, GOLD, which is denominated in dollars, rose by the end of November to
nearly $400 an ounce, the highest level in at least eight years.
JAPAN soared 32.6% in dollar terms in the six months to November 30, based on
the MSCI Japan Index, with one third of this due to yen appreciation. By the end
of the period the Japanese stock market was trading at a P/E multiple of about
20 times 2004 earnings. More and more commentators seemed willing to say that
the worst was over for an economy that has been in the doldrums for more than a
decade. Surprisingly good second quarter GDP growth of 3.9% annualized was
followed up by growth of 2.2% in the third quarter. But this was entirely export
led; domestic demand remained weak. Little wonder that the Bank of Japan has
been spending so much to keep the yen from appreciating.
2
<Page>
MARKET PERSPECTIVE: SIX MONTHS ENDED NOVEMBER 30, 2003
Japan's underlying problems: chronic deflation and a banking system weak and
paralyzed by a massive volume of non-performing loans have still to be solved. A
nervous market fell by more than 3% in November.
EUROPEAN EX UK (UNITED KINGDOM) markets, as represented by the MSCI Europe ex UK
Index, rose 17.9% in dollars during the six months ended November 30, 2003. At
these levels markets trade at an undemanding 141/2 times 2004 earnings.
Stagnating economies remained the problem. In early September the Eurozone
reported a slight second quarter contraction in GDP, after practically no
increase in the first. The European Central Bank reduced rates just once to 2%,
twice the level of the accelerating U.S. The European Union's "stability pact"
under which countries must keep their budget deficits to a maximum of 3% of GDP
or face sanctions, was effectively abandoned in November when blatant offenders
France and Germany said they would not comply. On a more positive note Germany
finally found the political will to make the labor market more flexible, by
reducing unemployment benefits and allowing small businesses to hire more
temporary help, while France slimmed the expensive pension plan for state
employees. The relief that met the region's 0.4% third quarter GDP growth was
tempered by the fact that, as in Japan, the entire source of the gain was
exports. Consumer spending was stagnant while business investment fell, a
difficult environment for profit growth. The appeal of stocks in the Eurozone
rests on their cheapness. Investors are hoping that this is based on a corporate
earnings outlook that is too pessimistic.
The UK market rose 14.8% in dollars in the period under review, based on the
MSCI UK Index, more than one third of this due to sterling strength. At those
levels the UK market was trading at about 17.8 times 2004 earnings. As in the
U.S., barely positive GDP growth in the first quarter improved to a much
healthier 3.1% annualized in the third quarter. A robust service sector and a
bubbling housing market were behind a fairly healthy level of domestic demand,
supported by the lowest rate of unemployment in G8, just 5% by the end of
November. While inflation is a very tame 1.4%, the worryingly high level of
consumer indebtedness caused the Bank of England to raise short-term interest
rates by 0.25% to 3.75%, making it the first of the world's major central banks
to do so. This may well mark the turning point in global interest rates.
3
<Page>
ING GROWTH + VALUE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Matthew S.
Price, CFA, and David C. Campbell, ING Investments, LLC.
GOAL: The ING Growth + Value Fund (the "Fund") seeks capital appreciation by
investing in a diversified portfolio of equity securities, including common and
preferred stock.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class Q
shares provided a total return of 24.20% compared to the Russell MidCap Growth
Index, Russell MidCap Index and Russell 2000 Index for which the total return
was 20.59%, 18.96% and 24.65%, respectively.
PORTFOLIO SPECIFICS: The current management team took over investment
responsibility for this Fund in June of 2003. The investment process focuses on
three major elements: 1) earnings growth, 2) reasonable valuation, and 3)
relative price strength. Also, for risk control, the Fund is well diversified
with more than 65 names at all times, maintains a maximum position size of 3% of
total Fund assets and avoids both low quality companies and stocks with a share
price below $5. Investment performance over the past six months was positively
influenced by both sector allocation and stock selection. The Fund's three most
heavily weighted economic sectors have been technology, consumer discretionary
and industrials, which have accounted for more than two-thirds of the Fund's
assets. Stocks in these sectors participated in the markets' advance over the
past two quarters and contributed significantly to the Fund's overall gain. The
consumer discretionary and technology sector weightings were meaningfully
increased over the reporting period, with new investments in those sectors
including Johnson Controls, Panera Bread, Adobe Systems, Foundry Networks and
Broadcom. Both the Fund's overweighted industrial and underweighted health care
exposure were reduced during the period with the Flir Industries, FTI
Consulting, Web MD and Medimmune positions eliminated. Overall, the primary
reasons for the Fund's favorable performance versus the Russell MidCap Growth
Index was good stock selection in the consumer discretionary sector, an
overweighted position in the strong industrial sector and a continuing
underweighted sector position in health care.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the outlook for the
stock market has become increasingly positive. In our opinion, however, it would
be unrealistic to expect future annual gains to continue at the pace that we
have seen thus far in 2003. While our investment discipline does not depend on
either our economic or stock market forecast, we continue to be broadly
diversified and fully invested, focusing on stocks chosen for their bottom line
earnings improvement, relative price strength and reasonable
valuation.
4
<Page>
Portfolio Managers' Report ING GROWTH + VALUE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
--------------------------------------
SINCE INCEPTION
1 YEAR 06/05/00
------ ---------------
Class Q 26.47% -22.89%
Russell MidCap Growth Index 32.64% -9.24%(1)
Russell MidCap Index 30.63% 3.83%(1)
Russell 2000 Index 36.29% 5.43%(1)
</Table>
The table above illustrates the total return of ING Growth + Value Fund against
the Russell MidCap Growth Index, Russell MidCap Index and the Russell 2000
Index. The Indices are unmanaged and have no cash in their portfolios, impose no
sales charges and incur no operating expenses. An investor cannot invest
directly in an index. The Fund's performance is shown both with and without the
imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Since inception performance for index is shown from 06/01/00.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. In exchange for higher growth potential, investing in
stocks of smaller and mid-sized companies may entail greater price volatility
than investing in stocks of larger companies. From time to time, the stock
market may not favor the mix of growth and value securities in which the Fund
invests.
See accompanying index descriptions on page 28.
5
<Page>
ING GROWTH OPPORTUNITIES FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Matthew
Price, CFA and David Campbell, Aeltus Investment Management, Inc., the
Sub-Adviser.
GOAL: The Growth Opportunities Fund (the "Fund") seeks long-term growth of
capital through investment in a portfolio consisting primarily of common stocks
of U.S. companies that have above-average prospects for growth.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class I
shares provided a total return of 17.16% compared to the Russell MidCap Growth
Index, Russell MidCap Index and Russell 3000 Index for which the total return
was 20.59%, 18.96% and 12.70%, respectively.
PORTFOLIO SPECIFICS: The management team focuses on three major elements in its
stock selection process: 1) earnings growth, 2) reasonable valuation, and 3)
relative price strength. Also, for risk control, the Fund is well diversified
with more than 65 names at all times, maintains a maximum position size of 3% of
total Fund assets and avoids both low quality companies and stocks with a share
price below $5. Investment performance over the past six months was
significantly influenced by both sector allocation and stock selection, but the
portfolio's underweighted position in the sharply advancing technology sector
was probably the most important reason why the Fund did not perform as well as
the benchmark. The Fund's three most heavily weighted sectors have been
technology, health care and consumer discretionary and have accounted for
approximately two-thirds of the Fund's total assets. Stocks in these sectors all
participated in the markets' advance over the reporting period and contributed
heavily to the Fund's gain. Technology and consumer discretionary weightings
were slightly increased in the past six months, with new investments in these
stock groups including Adobe Systems, Agilent Technologies, Leapfrog
Enterprises, Panera Bread and Michaels Stores. The managers have reduced
exposure to both the health care and energy sectors during the most recent
six-month period and while stock selection was helpful in producing recent
returns, benchmark issues generally outperformed the Fund's holdings. The
positions in Nabors Industries and Devon Energy were reduced, but because the
entire energy sector underperformed, the overall sector exposure hindered the
Fund's relative performance.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the outlook for the
stock market has become increasingly positive. In our opinion, however, it would
be unrealistic to expect future annual gains to continue at the pace that we
have seen thus far in 2003. While our investment discipline does not depend on
either our economic or stock market forecast, we continue to be broadly
diversified and fully invested, focusing on stocks chosen for their bottom line
earnings improvement, relative price strength and reasonable
valuation.
6
<Page>
Portfolio Managers' Report ING GROWTH OPPORTUNITIES FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
---------------------------------------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS I OF CLASS Q
1 YEAR 5 YEAR 03/31/97 06/01/00
------ ------ --------------- ---------------
Class I 18.49% -1.17% 3.53% --
Class Q 18.25% -- -- -21.95%
Russell MidCap Growth Index 32.64% 3.81% 7.68%(2) -9.24%
Russell MidCap Index 30.63% 7.82% 10.72%(2) 3.83%
Russell 3000 Index(1) 18.24% 0.71% 7.10%(2) -5.46%
</Table>
The table above illustrates the total return of ING Growth Opportunities Fund
against the Russell MidCap Growth Index, Russell MidCap Index and the Russell
3000 Index. The Indices are unmanaged and have no cash in their portfolios,
impose no sales charges and incur no operating expenses. An investor cannot
invest directly in an index. The Fund's performance is shown both with and
without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) The Fund may invest in securities of large, mid- and small-capitalization
companies, and the Russell 3000 Index tracks a large range of market
capitalizations.
(2) Since inception performance for index is shown from 04/01/97.
The Fund may invest in securities of large, mid- and small-capitalization
companies, and the Russell 3000 Index tracks a larger number of companies than
the S&P 500 Index with a large range of market capitalizations.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. In exchange for higher growth potential, investing in
stocks of smaller and mid-sized companies may entail greater price volatility
than investing in stocks of larger companies. From time to time, the stock
market may not favor the growth securities in which the Fund invests.
See accompanying index descriptions on page 28.
7
<Page>
ING LARGECAP GROWTH FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: Effective June 2, 2003, Wellington Management
Company, LLP became the Sub-Adviser. Andrew J. Shilling, CFA, Senior Vice
President and Partner is the portfolio manager.
GOAL: The ING LargeCap Growth Fund (the "Fund") seeks capital appreciation by
investing in equity securities of large U.S. companies.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class I
shares provided a total return of 16.30% compared to the Russell 1000 Growth
Index for which the total return was 12.43%.
PORTFOLIO SPECIFICS: During the six-month period ending November 30, 2003, nine
of ten sectors of the Russell 1000 Growth Index (the "Index") posted positive
returns. The Telecommunications Services, Materials and Information Technology
sectors led the way in the Index. Earlier in the period, lower quality and/or
higher market risk names attracted the most investor interest in the market.
This subsequently gave way to more of a focus on valuation, late in the period.
Generally stated, the outperformance of speculative shares in the market was
largely driven by a shift in investor risk aversion from extreme pessimism to a
more normal level.
Our investment approach is very much a "bottom-up" process; we pick stocks one
at a time based on the fundamentals of each holding. We seek undervalued growth
companies with sustainable growth potential as exhibited by characteristics such
as competitive advantage, strong financial position, and a demonstrated
management team. The Fund's industry weights are a fall-out of our "bottom-up"
investment process.
Against the backdrop of continued improvement in the economic and investment
spending environment, strong performance among the Fund's Financials and
Information Technology holdings was a primary driver of returns during the
period. Three top contributors to Fund returns were COUNTRYWIDE FINANCIAL
(thrifts & mortgage finance), APPLIED MATERIALS (semiconductor equipment) and
SYMANTEC (software & services). Three detractors from returns were
SCHERING-PLOUGH (pharmaceuticals), INTERACTIVECORP (internet retailing), and
SEAGATE TECHNOLOGY (computers & peripherals).
The Fund's out-performance versus the benchmark during the period was primarily
due to strong stock selection. Stock selection was strongest within the Health
Care and Financials sectors. Partially offsetting these results were weaker
relative returns within the Information Technology sector, though the sector was
a primary driver of absolute Fund returns, as noted above. In other words, our
Information Technology sector holdings returned less than the benchmark
holdings, in total. This can be attributed to our focus on finding traditional
growth stocks at reasonable valuations, versus the market's relatively greater
focus on higher market risk names for much of the period, as discussed above.
Sector allocation had a positive effect on the Fund's out-performance versus the
benchmark. Our investment approach is based on investing in sectors that have
the potential to outperform the market long-term. In keeping with this, the Fund
benefited from our elimination of holdings in the Consumer Staples sector, which
underperformed other sectors in the growth index.
MARKET OUTLOOK: The portfolio is well positioned to benefit from acceleration in
worldwide economic growth, which we expect to see over the next twelve months.
We believe the consumption environment will be sound next year, bolstered by
more jobs, tax cuts and an improving net worth position of households. Our
outlook for capital spending is even better. After more than two years of
downsizing, corporations are faced with an aging capital stock and we expect
that they will use the continued profits expansion to upgrade their investments,
especially in the technology area.
Our strategy is to build a diversified portfolio on a stock-by-stock basis,
identifying companies with sustainable strong revenue, earnings, and cash flow
growth. Currently, this results in an overweight position in the Consumer
Discretionary, Information Technology and Financials sectors. The Fund is now
underweight the Industrials and Health Care sectors, while having no holdings in
Consumer Staples, Energy, Materials, Telecommunications Services or
Utilities.
8
<Page>
Portfolio Managers' Report ING LARGECAP GROWTH FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
---------------------------------------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS I OF CLASS Q
1 YEAR 5 YEAR 01/08/02 07/21/97
------ ------ --------------- ---------------
Class I 19.89% -- -10.33% --
Class Q 19.42% -0.50% -- 5.77%
Russell 1000 Growth Index 16.75% -4.12% -5.11%(1) 0.53%(2)
S&P 500 Index 15.13% -0.46% -2.50%(1) 3.17%(2)
</Table>
The table above illustrates the total return of ING LargeCap Growth Fund against
the Russell 1000 Growth Index and the S&P 500 Index. The Indices are unmanaged
and have no cash in their portfolios, impose no sales charges and incur no
operating expenses. An investor cannot invest directly in an index. The Fund's
performance is shown both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Since inception performance for index is shown from 01/01/02.
(2) Since inception performance for index is shown from 08/01/97.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. The Fund invests in companies that the portfolio
managers believe have the potential for rapid growth, which may give the Fund a
higher risk of price volatility and less liquidity than a fund that emphasizes
other styles. The Fund may invest in mid-sized companies, which may be more
susceptible to price swings than larger companies. International investing does
pose special risks including currency fluctuations, economical and political
risks not found in investments that are solely domestic. Risks of foreign
investing are generally intensified for investments in emerging markets.
Exchange Traded Index Funds (ETF) present risks similar to those of an
investment in the underlying securities held by the ETF. Sometimes, the prices
of ETFs may vary significantly from the ETFs' underlying NAVs. The value of
convertible securities may fall when interest rates rise. Convertible securities
with longer maturities tend to be more sensitive to changes in interest rates,
usually making them more volatile than convertible securities with shorter
maturities. The use of certain derivatives may increase the volatility of the
Fund.
See accompanying index descriptions on page 28.
9
<Page>
ING MIDCAP OPPORTUNITIES FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Matthew
Price, CFA and David Campbell, Aeltus Investment Management, Inc., the
Sub-Adviser.
GOAL: The ING MidCap Opportunities Fund (the "Fund") seeks long-term capital
appreciation by investing primarily in the common stock of mid-sized U.S.
companies.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class I
shares provided a total return of 17.42% compared to the Russell Mid Cap Growth
Index for which the total return was 20.59% and the Russell MidCap Index for
which the total return was 18.96%.
PORTFOLIO SPECIFICS: The management team focuses on three major elements in its
stock selection process: 1) earnings growth, 2) reasonable valuation, and 3)
relative price strength. Also, for risk control, the Fund is well diversified
with more than 65 names at all times, maintains a maximum position size of 3% of
total portfolio assets and avoids both low quality companies and stocks with a
share price below $5. Investment results during the past six months were
significantly influenced by both sector allocation and stock selection, but the
most important reason for not performing as well as the Russell Midcap Growth
Index was the large underweighted position in Technology. The Fund's three most
heavily weighted sectors have been technology, healthcare and consumer
discretionary and have collectively accounted for approximately two-thirds of
the total portfolio. Stocks in these sectors all participated in the markets'
advance during the past two quarters and contributed heavily to the Fund's gain.
Technology and consumer discretionary weightings were slightly increased over
the reporting period, with new names added to the Fund including Adobe Systems,
Agilent Technologies, Leapfrog Enterprises, Panera Bread and Michaels Stores.
The managers have reduced exposure to the healthcare sector. Stock selection was
also helpful in producing good returns, although in the aggregate, benchmark
holdings outperformed the Fund's positions. The Fund's energy exposure was
reduced during the most recent six-month period despite the fact that the price
of oil and natural gas remained high because of the Iraqi situation. The primary
reason for the underperformance of the Fund against the benchmark was mainly due
to an overweight in the energy sector and an underweight in technology. Nabors
Industries and Devon Energy positions were reduced, but because the entire
energy sector underperformed, this reduced sector exposure helped the Fund's
relative performance.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the outlook for the
stock market has become increasingly positive. In our opinion, however, it would
be unrealistic to expect future annual gains to continue at the pace that we
have seen thus far in 2003. While our investment discipline does not depend on
either our economic or stock market forecast, we continue to be broadly
diversified and fully invested, focusing on stocks chosen for their bottom line
earnings improvement, relative price strength and reasonable valuation.
10
<Page>
Portfolio Managers' Report ING MIDCAP OPPORTUNITIES FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
---------------------------------------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS I OF CLASS Q
1 YEAR 5 YEAR 08/20/98 04/04/00
------ ------ --------------- ---------------
Class I 22.40% 8.45% 8.45% 10.12%
Class Q 22.49% -- -- -13.47%
Russell MidCap Growth Index(1) 32.64% 3.81% -13.15%(2) 7.84%(3)
Russell MidCap Index 30.63% 7.82% 1.54%(2) 11.08%(3)
</Table>
The table above illustrates the total return of ING MidCap Opportunities Fund
against the Russell MidCap Growth Index and the Russell MidCap Index. The
Indices are unmanaged and have no cash in their portfolios, impose no sales
charges and incur no operating expenses. An investor cannot invest directly in
an index. The Fund's performance is shown both with and without the imposition
of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) The Fund normally invests in mid-cap companies that the portfolio managers
feel have above average prospects for growth. The Russell MidCap Growth
Index tracks the performance of mid-cap growth companies.
(2) Since inception performance for index is shown from 09/01/98.
(3) Since inception performance for index is shown from 04/01/00.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. While equities may offer the potential for greater
long-term growth than most debt securities, they generally have higher
volatility. The Fund invests in companies that the Sub-Adviser feels have the
potential for growth, which may give the Fund a higher risk of price volatility
than a fund that emphasizes other styles, such as a value-oriented style.
Securities of mid-sized companies may be more susceptible to price swings and
less liquid than investments in larger companies. From time to time, the stock
market may not favor the mid-cap growth securities in which the Fund invests.
Rather, the market could favor value-oriented stocks or large or small company
stocks, or may not favor equities at all. The Fund's investment in technology
sectors of the stock market and in initial public offerings has had a
significant impact on performance in 1999. There can be no assurance that these
factors will be repeated.
See accompanying index descriptions on page 28.
11
<Page>
ING SMALLCAP OPPORTUNITIES FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Matthew
Price, CFA and David Campbell, Aeltus Investment Management, Inc., the
Sub-Adviser.
GOAL: The Small Cap Opportunities Fund (the "Fund") seeks capital appreciation
through investment in a diversified portfolio consisting primarily of common
stocks of smaller, lesser-known U.S. companies.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class I
shares provided a total return of 30.60% compared to the Russell 2000 Growth
index for which the return was 26.31%.
PORTFOLIO SPECIFICS: The management team focuses on three major elements in its
stock selection process: 1) earnings growth, 2) reasonable valuation, and 3)
relative price strength. Also, as risk control measures, the Fund is well
diversified with more than 65 names at all times, maintains a maximum position
size of 3% of total Fund assets and avoids both low quality companies and stocks
with a share price below $5. Investment performance was significantly influenced
by both favorable sector allocation and stock selection. The Fund's three most
heavily weighted economic sectors have been technology, health care and consumer
discretionary and have accounted for approximately two-thirds of the Fund's
assets. Stocks in these three sectors fully participated in the markets' advance
over the past two quarters and contributed heavily to the Fund's gain. While
technology and health care weightings have remained relatively constant for the
past six months, the managers have committed additional assets into the consumer
discretionary sector. New names in this sector included Shuffle Master, Petco
Animal Supplies, Panera Bread and Tractor Supply Company while existing holdings
in Hot Topic, Pacific Sunwear and Yankee Candle were increased. Favorable stock
selection also helped produce the recent favorable relative returns. In fact,
several stocks have more than doubled in price during this period including
Cognizant Technology, Kyphon, Strayer and Engineered Support Systems. The Fund's
energy exposure was reduced, from an overweighted position during most of the
reporting period, despite the continued high prices of oil and natural gas,
which were supported by the Iraqi situation. Headwaters and Key Energy positions
were sold profitably, but because the entire energy sector underperformed,
reduced exposure in the energy sector slightly helped the Fund's relative
performance. However, stock selection in technology, health care and consumer
discretionary sectors were the main positive influences of Fund performance.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the outlook for the
stock market has become increasingly positive. In our opinion, however, it would
be unrealistic to expect future annual gains to continue at the pace that we
have seen thus far in 2003. While our investment discipline does not depend on
either our economic or stock market forecast, we continue to be broadly
diversified and fully invested, focusing on stocks chosen for their bottom line
earnings improvement, relative price strength and reasonable valuation.
12
<Page>
Portfolio Managers' Report ING SMALLCAP OPPORTUNITIES FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
------------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS I OF CLASS Q
1 YEAR 04/01/99 04/04/00
------ --------------- ---------------
Class I 26.11% 2.22% --
Class Q 25.89% -- -18.26%
Russell 2000 Growth Index 37.68% 1.19% -10.55%(2)
Russell 2000 Index(1) 36.29% 8.49% 1.74%(2)
</Table>
The table above illustrates the total return of ING SmallCap Opportunities Fund
against the Russell 2000 Growth Index and the Russell 2000 Index. The Indices
are unmanaged and have no cash in their portfolios, impose no sales charges and
incur no operating expenses. An investor cannot invest directly in an index. The
Fund's performance is shown both with and without the imposition of sales
charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) The Fund normally invests in small-cap companies that the portfolio managers
feel have above average prospects for growth. The Russell 2000 Growth Index
tracks the performance of small-cap growth companies.
(2) Since inception performance for index is shown from 04/01/00.
PRINCIPAL RISK FACTOR(S): While equities may offer the potential for greater
long-term growth than most debt securities, they generally have higher
volatility. In exchange for higher growth potential, investing in stocks of
smaller companies may entail greater price volatility and less liquidity than
investing in stocks of larger companies. From time to time, the stock market may
not favor the small-sized growth securities in which the Fund invests. Rather,
the market could favor value-oriented stocks, or large company stocks or may not
favor equities at all. The Fund's investment in technology sectors of the stock
market and in initial public offerings has had a significant impact on
performance in 1999. There can be no assurance that these factors will be
repeated.
See accompanying index descriptions on page 28.
13
<Page>
ING DISCIPLINED LARGECAP FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by Hugh T.M.
Whelan, CFA, Aeltus Investment Management, Inc., the Sub-Adviser.
GOAL: The ING Disciplined LargeCap Fund (the "Fund") seeks to outperform the
Standard & Poor's ("S&P") 500 Index, while maintaining a market level of risk by
investing at least 80% of its net assets in stocks included in the S&P 500.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class I
shares provided a total return of 9.97%, compared to 10.80% for the Standard &
Poor's ("S&P") 500 Index.
PORTFOLIO SPECIFICS: Our investment process is based on the historical
relationship between individual stock fundamentals and relative performance. We
build portfolios to increase exposure to companies with strong business momentum
and high quality earnings; companies that are attractive based on valuation; and
companies that are recognized in the marketplace for their attractive qualities
in terms of strong relative performance and positive revisions by analysts.
Conversely, we seek to minimize exposure to stocks that score poorly in these
areas. Our research and historical performance show that focusing on stocks with
these attractive fundamental traits has produced good relative performance over
time.
However, in the first three months of the reporting period, those normally
predictive fundamental qualities were not successful, contributing largely to
the underperformance of the Fund. In other words, returns attributable to
factors generally associated with good relative performance lagged the rate of
return on the benchmark. In the second half of the period we saw the market
return to rewarding strong fundamentals but not enough to compensate for the
first three months. The entire six-month period was dominated by bullish
investor sentiment that began in late March of 2003. Over the last six months,
only September witnessed negative returns on the broad market averages. For the
period, four of the seven factors in our index-relative ranking model,
specifically, price momentum, change in accruals, long-term price reversal and
1-year forward relative price-earnings ratio, were successfully predictive.
Within economic sectors, 6 of our 11 sector models were effective.
Underperformance during the period was due to individual security selection,
especially within the financials and information technology sectors. The largest
detractors from performance were our average underweights in Fleet Boston and
Wells Fargo and our overweight position in Oracle. Fleet Boston's shares surged
on the news of its acquisition by Banc of America. Wells Fargo's stock has done
well since the company announced that the top debt rating received by its
banking unit would lower the cost of its debt, thus potentially boosting the
bottom line. Oracle's stock has faltered since its attempt to acquire People
Soft, the outcome of which remains uncertain. The largest positive contributors
to performance came from our overweights in Nextel, Staples and Avaya. Nextel
and Staples had strong stock performance in the midst of positive earnings
growth. Avaya's stock has done well on the expectation of improved demand for
internet phone systems.
The impact of the Fund's sector allocation was negligible compared to the impact
of stock selection.
MARKET OUTLOOK: The current characteristics of the Fund include slightly
above-benchmark forecasted long term growth, and a one year forward price
earnings ratio lower than the benchmark. This is a direct result of our use of
historically predictive business momentum, valuation, and market recognition
factors in our stock ranking models. We believe that the high level of
volatility within the market which has weakened the link between investment
fundamentals and excess returns over the last three years is abating. The
portfolio is modestly overweight in the consumer discretionary and information
technology sectors and underweight in the financials and healthcare sectors.
However, our overall sector exposures are by design quite close to the S&P 500
so that nearly all of our relative performance is driven by individual stock
selection.
14
<Page>
Portfolio Managers' Report ING DISCIPLINED LARGECAP FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
-------------------------------------
SINCE INCEPTION
1 YEAR 12/30/98
------ ---------------
Class I 12.90% -3.02%
S&P 500 Index 15.13% -1.60%(1)
</Table>
The table above illustrates the total return of ING Disciplined LargeCap Fund
against the S&P 500 Index. The Index is unmanaged and has no cash in its
portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Since inception performance for index is shown from 01/01/99.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. While equities may offer the potential for greater
long-term growth than most debt securities, they generally have higher
volatility. Derivatives are subject to the risk of changes in the market price
of the security and the risk of loss due to changes in interest rates. The use
of certain derivatives may also have a leveraging effect, which may increase the
volatility of the Fund. From time to time, the stock market may not favor the
large company growth oriented securities in which the Fund invests.
See accompanying index descriptions on page 28.
15
<Page>
ING MAGNACAP FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: A team of investment professionals led by William F.
Coughlin, CFA, Aeltus Investment Management, Inc., the Sub-Adviser.
GOAL: The ING MagnaCap Fund ("the Fund") seeks growth of capital, with dividend
income as a secondary consideration.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class Q
shares provided a total return of 10.65% compared to the Russell 1000 Value
Index, Russell 1000 Index and Standard & Poors Barra Value Index for which the
total return was 11.15%, 11.79% and 11.34%, respectively.
PORTFOLIO SPECIFICS: The investment team focuses on high quality companies
selling at low price to earnings ("P/E") multiples. The Fund is well diversified
with exposure to all the major economic sectors and remains sensitive to the
sector weightings of its Russell 1000 Value Index benchmark. During the first
half of the fiscal year, the positive effect of emphasizing economic sectors
that performed well was equally offset by the negative impact of somewhat lower
total returns for the specific holdings in the Fund. The Fund's largest sector
exposure was a 31.3% weighting in financial services, slightly below the 35.5%
benchmark weighting. While this underweighting had only a modestly negative
allocation impact on results, the disappointing performance of some holdings, in
particular, Fannie Mae and Freddie Mac, had a decidedly negative overall effect.
On the other hand, the most positive influence on Fund performance was a larger
position in technology stocks (9.5% for the Fund compared to 6.5% for the index)
combined with very strong returns on the specific stocks held over the period.
The performance of the rest of the portfolio was very much in line with the
benchmark, with returns from both sector allocation and stock selection very
much in balance.
MARKET OUTLOOK: Recent statistics suggest that the U.S. economy is recovering
from its three-year downturn even more strongly than most forecasters had
anticipated. With solid gains in corporate earnings, low ongoing levels of
inflation and improving consumer and investor confidence, the view of many is
that the outlook for the stock market has become increasingly positive. In our
opinion, however, it would be unrealistic to expect future annual gains to
continue at the pace that we have seen thus far in 2003. Nevertheless, we
believe our portfolio of high quality, low P/E stocks should participate in any
ongoing market advance, and also serve to reasonably protect asset value in the
event of a severe market correction.
16
<Page>
Portfolio Managers' Report ING MAGNACAP FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
-----------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS I OF CLASS Q
1 YEAR 03/05/03 11/19/99
------ --------------- ---------------
Class I 14.28% -2.89% --
Class Q 13.97% -- -4.75%
Russell 1000 Value Index 17.16% 28.96%(2) 1.24%(3)
Russell 1000 Index 16.94% 29.03%(2) -4.52%(3)
S&P Barra Value Index(1) 17.67% 31.19%(2) -1.15%(3)
</Table>
The table above illustrates the total return of ING MagnaCap Fund against the
Russell 1000 Value Index, Russell 1000 Index and the S&P Barra Value Index. The
Indices are unmanaged and have no cash in their portfolios, impose no sales
charges and incur no operating expenses. An investor cannot invest directly in
an index. The Fund's performance is shown both with and without the imposition
of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) The Fund invests in value securities that meet the Fund's disciplined
investment criteria. The S&P Barra Value Index tracks the performance of
companies with low price-to-book ratios.
(2) Since inception performance for index is shown from 03/01/03.
(3) Since inception performance for index is shown from 12/01/99.
PRINCIPAL RISK FACTOR(S): Exposure to financial and market risks that accompany
investments in equities. While equities may offer the potential for greater
long-term growth than most debt securities, they generally have higher
volatility. International investing does pose special risks including currency
fluctuation, economical and political risks not found in domestic investments.
The value of convertible or debt securities may fall when interest rates rise.
From time to time, the stock market may not favor the value securities that meet
the Fund's disciplined investment criteria. Rather, the market could favor
growth-oriented stocks, or small company stocks or may not favor equities at
all.
See accompanying index descriptions on page 28.
17
<Page>
ING MIDCAP VALUE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT: A team of investment professionals led by Brandes
Investment Partners' MidCap Investment Committee, the Sub-Adviser.
GOAL: The Fund seeks long-term capital appreciation by investing at least 80% of
its assets in equity securities of U.S. issuers with equity market
capitalizations greater than $1 billion but no greater than $5 billion at the
time of purchase.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class I
shares provided a total return of 23.36% compared to the Russell Midcap Value
Index for which the total return was 17.83%.
PORTFOLIO SPECIFICS: The Fund's advance during the period was broad-based, with
holdings in a wide range of industries registering gains. Advances for positions
in the communications equipment industry -- such as Avaya (0.0% of the Fund) and
Lucent Technologies (0.9%) -- made the most substantial contribution to returns.
Holdings in industries such as insurance and computers & peripherals also tended
to post sharp gains. Other key contributors included positions such as RJ
Reynolds (tobacco -- 2.4%), York International (building products -- 0.7%), and
AMR (airlines -- 1.8%).
MARKET OUTLOOK: During the six-month period ended November 30, 2003, we sold
several positions as their market prices advanced toward our estimate of their
fair values. We used the proceeds to purchase shares of new holdings at prices
that we consider attractive.
As a result of this buying and selling, many of the Fund's industry exposures
shifted. For example, exposure to the insurance industry increased, while
exposure to the computers & peripherals industry was eliminated. Keep in mind
that the Fund's industry exposures are not the product of top-down forecasts or
industry-level analysis, but merely stem from our company-by-company search for
compelling investment opportunities.
Overall, we offer no predictions regarding the short-term direction of the stock
market, or regarding mid-cap U.S. stocks in particular. Instead, we remain
focused on purchasing mid-cap stocks at discounts to their intrinsic values and
holding them until the broader market recognizes their true worth. We believe
that this approach may provide patient investors with favorable returns over the
long term.
18
<Page>
Portfolio Managers' Report ING MIDCAP VALUE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
------------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS I OF CLASS Q
1 YEAR 03/04/02 04/17/02
------ --------------- ---------------
Class I 38.93% 2.40% --
Class Q 38.44% -- 0.24%
Russell MidCap Value Index 29.21% 9.12%(1) 6.76%(2)
</Table>
The table above illustrates the total return of ING MidCap Value Fund against
the Russell MidCap Value Index. The Index is unmanaged and has no cash in its
portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Since inception performance for index is shown from 03/01/02.
(2) Since inception performance for the index is shown from 05/01/02.
PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an
investment in equity securities. In exchange for higher growth potential,
investing in stocks of mid-sized companies may entail greater price volatility
than investing in stocks of larger companies. From time to time, the stock
market may not favor the mid-cap value securities in which the Fund invests.
See accompanying index descriptions on page 28.
19
<Page>
ING SMALLCAP VALUE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT: A team of investment professionals led by Brandes
Investment Partners' SmallCap Investment Committee, the Sub-Adviser.
GOAL: The Fund seeks long-term capital appreciation by investing at least 80% of
its assets in equity securities of U.S. issuers with equity market
capitalizations of $1.5 billion or less at the time of purchase.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class I
shares provided a total return of 36.11% compared to the Russell 200 Value Index
for which the total return was 8.34%.
PORTFOLIO SPECIFICS: The Fund's advance during the period was broad-based, with
holdings in a wide range of industries registering gains. Advances for positions
in the textiles, apparel and luxury goods industry -- such as Vans (0.6% of the
Fund) and Tommy Hilfiger (2.5%) -- made the most substantial contribution to
returns.
Holdings in industries such as metals & mining and leisure equipment & products
also tended to post sharp gains. On a stock-by-stock basis, gains for positions
such as Gateway (computers & peripherals) and Avaya (communications equipment)
had the greatest impact on performance.
MARKET OUTLOOK: During the six-month period ended November 30, 2003, we sold
several positions as their market prices advanced toward our estimate of their
fair values. We used the proceeds to purchase shares of new holdings at prices
that we consider attractive.
As a result of this buying and selling, many of the Fund's industry exposures
shifted. For example, exposure to the food products industry increased, while
exposure to the communications equipment industry was eliminated. Keep in mind
that the Fund's industry exposures are not the product of top-down forecasts or
industry-level analysis, but merely stem from our company-by-company search for
compelling investment opportunities.
Overall, we offer no predictions regarding the short-term direction of the stock
market, or regarding small-cap U.S. stocks in particular. Instead, we remain
focused on purchasing small-cap stocks at discounts to their intrinsic values
and holding them until the broader market recognizes their true worth.
We believe that this approach may provide patient investors with favorable
returns over the long term.
20
<Page>
Portfolio Managers' Report ING SMALLCAP VALUE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
----------------------------------------------
SINCE INCEPTION SINCE INCEPTION
OF CLASS I OF CLASS Q
1 YEAR 03/07/02 04/30/02
------ --------------- ---------------
Class I 36.11% 13.75% --
Class Q 35.83% -- 10.37%
Russell 200 Value Index 17.76% 1.97%(1) 1.73%(2)
</Table>
The table above illustrates the total return of ING SmallCap Value Fund against
the Russell 200 Value Index. The Index is unmanaged and has no cash in its
portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Since inception performance for index is shown from 03/01/02.
(2) Since inception performance for index is shown from 05/01/02.
PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an
investment in equity securities. In exchange for higher growth potential,
investing in stocks of smaller companies may entail greater price volatility
than investing in stocks of larger companies. From time to time, the stock
market may not favor the small-cap value securities in which the Fund invests.
See accompanying index descriptions on page 28.
21
<Page>
ING CONVERTIBLE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT: A team of investment professionals led by Anuradha Sahai,
Aeltus Investment Management, Inc., the Sub-Adviser.
GOAL: The ING Convertible Fund (the "Fund") seeks maximum total return which
consists of capital appreciation and current income, by investing at least 80%
in convertible securities.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class Q
shares returned 11.44% compared to 8.36% and 8.34% for the Merrill Lynch
Convertible Index and First Boston Convertible Index (the "index"),
respectively.
PORTFOLIO SPECIFICS: The Fund was relatively defensively positioned versus its
peer group as well as the index at the beginning of the last six months. With
the shift in the market orientation, the Fund orientation also shifted from its
more defensive stance. It adopted a barbell approach with some heavy weights in
more defensive bond-like higher income names along with some equity sensitive
names with good fundamentals. This proved successful as the Fund tended to
outperform in general on both down days as well as up days versus its peer
group.
As evidenced by the NASDAQ Composite Index, the technology sector was the driver
of the majority of the gains in the convertible market due to its heavy weight
in the index. Despite the slight underweighting of the Fund to the benchmark,
the Fund handily outperformed in the sector, almost by double the return, as a
result of security selection. Overweighting and security selection also aided
the Fund in beating the benchmark by over eight times in the telecom sector,
which provided the next best return after technology. Security selection was the
major driver of performance in the industrials and consumer staples sectors as
well. An overweight sensitivity in the materials and financials sector benefited
the Fund also. This was somewhat offset by under performance in the consumer
discretionary and media sectors, due to the underweighting in these sectors.
Utilities was the only sector that hurt the Fund as a consequence of
overweighting in the sector and exposure to one holding that had pronounced
underperformance. Overall, security selection was the key to out-performance of
the Fund versus the benchmarks as well as the peer group.
MARKET OUTLOOK: U.S. economic indicators continuing to improve, but we still
believe that equity market valuations reflect over optimism about the strength
of the U.S. economy. Despite the likelihood that the Federal Reserve Board will
be less restrictive than feared, we think that profitability outlook for firms
will only slowly improve. We would like to see a return to corporate pricing
power and a continued decline in unemployment, especially after the Holiday
season, before we are convinced of the strength of the turnaround. Most
companies are not ready to commit to guide earnings far beyond the first quarter
of 2004. As a result, we believe that we could be in for a softer first half of
the year as investors realize that the economic growth may be more moderate than
current expectations.
In these volatile times, we believe convertible securities are attractive
relative to comparable asset classes due to their bond floor downside protection
while providing equity-like upside potential. Despite the fear of higher rates,
bond floors should be less affected due to improving balance sheets and lower
default risk. We continue to look for companies across the spectrum that will
likely benefit from a gradually recovering economy as we expect the market will
reward companies that typically benefit in the recovery part of the cycle. We
are looking to increase our weighting in the consumer cyclical and media sectors
to participate in the upside these sectors may witness with the improving
economic picture as well as from the benefit of an election year next year. A
bottom up approach, which relies on fundamental analysis and careful security
selection within our broader top down sector positioning strategy, continues to
be the foundation for our investment decisions.
22
<Page>
Portfolio Managers' Report ING CONVERTIBLE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
----------------------------------------
SINCE INCEPTION
1 YEAR 5 YEAR 08/31/95
------ ------ ---------------
Class Q 23.29% 9.30% 12.48%
Merrill Lynch Convertible Index 22.00% 8.58% 9.75%(1)
First Boston Convertible Index 22.60% 8.35% 9.03%(1)
</Table>
The table above illustrates the total return of ING Convertible Fund against the
First Boston Convertible Index. The Index is unmanaged and has no cash in its
portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Since inception performance for index is shown from 09/01/95.
PRINCIPAL RISK FACTOR(S): The credit standing of the issuer and other factors
may affect the investment value of a convertible security. The market value of
convertible debt securities tends to vary inversely with the level of interest
rates. Lower rated securities may be less liquid than higher quality
investments. The Fund also has exposure to financial, market and interst rate
risks. Higher yields reflect the higher credit risks associated with certain
lower rated securities in the Fund's portfolio and in some cases, the lower
market prices for those instruments. The Fund may also invest in small and
medium sized companies, which may be more susecptible to greater price
volatility than larger companies.
See accompanying index descriptions on page 28.
23
<Page>
ING EQUITY AND BOND FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: The equity and bond portions of the Fund are managed
by teams of investment professionals led by James A. Vail, CFA, and James
Kauffmann respectively, Aeltus Investment Management, Inc., the Sub-Adviser.
GOAL: The ING Equity & Bond Fund (the "Fund") seeks a balance of long-term
capital appreciation and current income by investing in both equities and debt
securities.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class Q
shares returned 5.32% compared to 11.34% for the Standard & Poor's (S&P) Barra
Value Index, -1.04% for the Lehman Brothers Aggregate Bond Index, 10.80% for the
S&P 500 Index and 6.01% for the Composite Index (60% S&P 500 Index / 40% Lehman
Brothers Aggregate Bond Index).
PORTFOLIO SPECIFICS: EQUITY PORTFOLIO: The market as measured by the S&P 500
gained 10.80% in the last six months as economic data indicated strong domestic
growth and rising corporate profits. Moreover, this strength appears to be
sustainable, making continued economic expansion a reasonable expectation for
2004. Contained in the recent data are indications that corporate and industrial
spending are increasing, taking the baton from the consumer, as it were, and
supporting continued growth in the gross domestic product (GDP). As the U.S.
economy expands, it should provide the fuel for global economic growth and
better stock markets ahead.
The Equity portfolio's out-performance was aided by holdings in the materials
sector specifically, ALCOA and Freeport Copper and Gold. The growing U.S.
economy and anticipation of stronger demand for basic commodities in 2004 are
driving aluminum and copper prices higher. Gold prices are also up, helping
drive the relative performance of Freeport. Additional contributors to good
performance were Cigna in the insurance sector and Cendant in commercial
services. Performance was impeded by being underweight technology and overweight
energy.
PORTFOLIO SPECIFICS, FIXED INCOME PORTFOLIO: The Lehman Brothers Aggregate Bond
Index posted a -1.04% of total return during the period. Despite a significant
drop in interest rates following the war in Iraq, subsequent signs of renewed
economic growth have pushed yields higher. Treasuries have notched a -2.91% for
the last six months. Negative headlines at the agencies over the period
presented investors with -0.42% of excess returns. The credit sector realized
1.82% of excess returns while mortgages notched 0.15%, commercial
mortgage-backed securities printed -0.81%, and asset-backed securities hit
0.37%. Emerging markets tallied continued strong excess returns of 7.06%. But
high yield trumped all sectors with 11.60% of excess returns.
Chief sources of out-performance include an overweight in longer duration and
lower quality credits, which both outperformed shorter duration and high quality
names. An overweight to mortgage-backed securities also boosted excess returns
earlier in the period. Our short duration posture also assisted in beating the
index. Exposure to both high yield and emerging markets which were strong
performers over the last six months -- provided a further lift in excess
returns, although our conservative high yield security selection produced total
returns lower than that of the high yield index itself.
MARKET OUTLOOK, EQUITIES: The combination of low interest rates, stimulative
fiscal policy, the weak U.S. dollar and recent tax cuts are clearly having a
positive impact on the domestic economy. Third quarter GDP growth, which was
initially reported at 7.2%, was recently revised to over 8%, the fastest in
recent memory. Fourth quarter GDP growth is estimated at 4% or more. Ultimately,
we believe job creation and income growth are the keys to a sustainable
recovery. With this level of economic growth, jobs should be created, keeping
consumer confidence and spending stable. Capital spending by businesses also
appears to be emerging from its slump providing further strength to the economy.
Some observers believe the markets may be ahead of themselves, but in the
context of an expanding U.S. economy, corporate profitability may very well
exceed expectations. We believe this is what economic, market and corporate
fundamentals continue to suggest. As a result, we are encouraged by the outlook
for the economy, the stock markets, and the equity portfolio.
MARKET OUTLOOK, FIXED INCOME: The near-term prospects for inflationary problems
remain slight, productivity is gaining, labor costs are contained, and pricing
power is still transitory. The twin deficits -- federal and current account --
will remain challenges into the near term; and we are not optimistic on the
dollar.
Tactically, we are short in duration in the face of improving global economic
fundamentals. We are overweight commercial mortgages, asset-backed securities,
and longer-dated corporate bonds. Valuations are stretched in credit and
mortgage markets; yet alternatives are few as bond managers seek to add
incremental yield in the face of a rising rate environment. In the fixed income
portfolio both the high yield and emerging market targets were increased.
24
<Page>
Portfolio Managers' Report ING EQUITY AND BOND FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
----------------------------------------
SINCE INCEPTION
1 YEAR 5 YEAR 08/31/95
------ ------ ---------------
Class Q 12.46% 1.77% 7.41%
S&P 500 Index 15.13% -0.46% 9.77%(1)
Lehman Brothers Aggregate Bond Index 5.18% 6.47% 7.19%(1)
Composite Index (60% S&P 500 Index/40%
Lehman Brothers Aggregate Bond Index) 11.33% 2.67% 9.11%(1)
S&P Barra Value Index 17.67% 1.43% 9.27%(1)
</Table>
The table above illustrates the total return of ING Equity and Bond Fund against
the S&P Barra Value Index, Lehman Brothers Aggregate Bond Index, Lipper Balanced
Fund Index, and the Composite Index . The Indices are unmanaged and have no cash
in their portfolios, impose no sales charges and incur no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Since inception performance for index is shown from 09/01/95.
PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an
investment in equity securities. Credit, interest rate and other risks that
accompany an investment in debt securities. The Fund may invest in foreign
securities. International investing does pose special risks, including currency
fluctuation, economic and political risks not found in investments that are
solely domestic. High yields reflect the higher credit risks associated with
certain lower-rated securities in the Fund's portfolio and in some cases, the
lower market prices for those instruments. High yield securities and securities
of smaller companies may be less liquid and more volatile than other
investments. The use of certain derivatives may also have a leveraging effect,
which may increase the volatility of the Fund. Because the Fund may invest in
other investment companies, you may pay a proportionate share of the expenses of
that other investment company, in addition to the expenses of the Fund.
See accompanying index descriptions on page 28.
25
<Page>
ING REAL ESTATE FUND Portfolio Managers' Report
PORTFOLIO MANAGEMENT TEAM: T. Ritson Ferguson, CFA, Managing Director and Chief
Investment Officer, Kenneth D. Campbell, Managing Director, ING Clarion Real
Estate Securities, the Sub-Adviser.
GOAL: The ING Real Estate Fund (the "Fund") seeks total return through
investment in common and preferred stocks of U.S. real estate investment trusts
(REITs) and real estate companies.
PERFORMANCE: For the six-months ended November 30, 2003, the Fund's Class I
shares provided a total return of 18.25% compared to the Wilshire Real Estate
Securities Index which returned 18.99% for the same period.
PORTFOLIO SPECIFICS: Real estate stock performance has surprised many observers
given the relatively weak fundamentals in many cities around the country
(especially for office and apartment properties). We, however, believe that the
strong total return performance is not inconsistent with the improving outlook
for the economy and the anticipated recovery in real estate fundamentals that is
likely to follow. It is also important to realize that real estate stock
valuations were low by historical standards at the beginning of the year. The
average real estate company's stock was trading at less than 10 times cash
earnings before depreciation. Much of the price appreciation in real estate
stocks this year is attributable to an expansion of the average multiple to 12
times cash earnings before depreciation which is in-line with the average
multiple observed since the mid-1980's.
In an environment of low interest rates and modest expectations for returns to
stocks, real estate has emerged as an increasingly popular investment for
institutional and individual investors alike. Real estate in general, and real
estate securities by extension, offer some of the most compelling total returns
in today's market. Real estate offers a very attractive current return relative
to the yields on bonds. Furthermore, real estate securities offer investors the
potential for principal appreciation in a rising interest rate environment
driven by improving earnings. Bonds, by contrast tend to experience price
depreciation when interest rates rise. Real estate securities look interesting
relative to other stock investments as well given their higher dividends and
more conservative pricing as a multiple of future earnings.
MARKET OUTLOOK: We continue to be optimistic about the return potential of real
estate stocks given the increasingly surprising strength of the economy. In late
November, the Commerce Department raised its estimate of GDP growth during the
third quarter to an astonishing 8.2%. Consumer and business confidence continues
to grow as well. The Conference Board reported that its index of consumer
confidence rose to 91.7, up ten points from October's level. The improving
economy and rising confidence finally seems to be translating to some much
needed job growth. Weekly reported initial jobless claims have been well below
the 400,000 level that many consider the level of a weak economy for much of the
last two months. A strengthening economy and job growth are expected to drive
increased demand for real estate. Given the low levels of new construction over
the last two years for most property types, we expect improved demand to lead to
increasing occupancies and stable-to-increased rents next year for owners of
real estate assets.
We remain constructive about the total return potential for Real Estate
Investment Trusts ("REITs") next year, given the improving fundamentals for real
estate and the still attractive valuations for REITs. As of November 30th, REITs
were: 1) yielding 5.84% (160 basis points higher than the yield on 10-year
Treasury bonds); 2) trading at a 12 multiple of forward earnings (equal to the
average multiple since the mid-80's); and 3) trading at only a modest premium of
3% to our estimates of private market value (or Net Asset Value).
26
<Page>
Portfolio Managers' Report ING REAL ESTATE FUND
<Table>
<Caption>
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIODS ENDED NOVEMBER 30, 2003
---------------------------------------
SINCE INCEPTION
1 YEAR 5 YEAR 12/31/96
------ ------ ---------------
Class I 32.83% 13.57% 10.12%
Wilshire Real Estate Security Index 34.79% 13.44% 10.15%(1)
</Table>
The table above illustrates the total return of ING Real Estate Fund against the
Wilshire Real Estate Security Index. The Index is unmanaged and has no cash in
its portfolio, imposes no sales charges and incurs no operating expenses. An
investor cannot invest directly in an index. The Fund's performance is shown
both with and without the imposition of sales charges.
The performance table does not reflect the deduction of taxes that a shareholder
will pay on Fund distributions or the redemption of Fund shares.
Total returns reflect the fact that the Investment Manager has waived certain
fees and expenses otherwise payable by the Fund. Total returns would have been
lower had there been no waiver to the Fund.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING"
STATEMENTS.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY
THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS'
VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY.
(1) Since inception for the index is shown from 01/01/97.
PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an
investment in real estate equities and volatility due to non-diversification of
investments. Subject to risks similar to those associated with the direct
ownership of real estate. The Fund primarily invests in common and preferred
stocks of U.S. real estate investment trusts (REITs) and real estate companies.
Risk of concentration - because the Fund's investments are concentrated in the
real estate industry, the value of the Fund may be subject to greater volatility
than a fund with a portfolio that is less concentrated. These companies are
sensitive to factors such as changes in real estate assets, supply and demand,
and the management skill and credit worthiness of the issuer. REITs may also be
affected by tax and regulatory requirements. The Fund may invest in small- and
mid-sized companies, which may be more susceptible to price swings than larger
companies. Securities of smaller companies trade in lower volumes and may be
less liquid than securities of large, more established companies.
See accompanying index descriptions on page 28.
27
<Page>
INDEX DESCRIPTIONS
THE DOW JONES INDUSTRIAL AVERAGE is a price-weighted average of 30 blue-chip
stocks that are generally the leaders in their industry.
THE FIRST BOSTON CONVERTIBLE INDEX is an index representing the universe of
convertible securities.
THE LEHMAN BROTHERS AGGREGATE BOND INDEX is a widely recognized index of
publicly issued fixed rate U.S. government, Investment grade mortgage-backed and
corporate debt securities.
THE LEHMAN BROTHERS HIGH YIELD BOND INDEX is an unmanaged index that includes
all fixed income securities having a maximum quality rating of Ba1, a minimum
amount outstanding of $100m, and at least 1 year to maturity.
THE MERRILL LYNCH CONVERTIBLE INDEX is a market capitalization-weighted index
including all non-mandatory domestic corporate convertible securities with at
least an overall par of $50 million market value.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) EUROPE, EX UK, INDEX is a free
float-adjusted market capitalization index that is designed to measure developed
market equity performance in Europe, excluding the UK.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) JAPAN INDEX is a free
float-adjusted market capitalization index that is designed to measure developed
market equity performance in Japan.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) UK INDEX is a free
float-adjusted market capitalization index that is designed to measure developed
market equity performance in the UK.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD INDEX is an unmanaged
index that reflects the stock markets of 22 countries, including the United
States, Europe, Canada, Australia, New Zealand and the Far East - comprising
approximately 1,500 securities - with values expressed in U.S. dollars.
THE NASDAQ 100 FINANCIAL INDEX is a capitalization-weighted index of the 100
largest financial companies, as well as foreign issues, including American
Depositary Receipts, traded on the Nasdaq National Market System and SmallCap
Market.
THE NASDAQ 100 INDEX is a modified capitalization-weighted index of the 100
largest and most active non-financial domestic and international issues listed
on the Nasdaq.
THE NASDAQ COMPOSITE INDEX is a broad-based capitalization-weighted index of all
Nasdaq National Market & SmallCap stocks.
THE RUSSELL 1000 GROWTH INDEX is an index that measures the performance of those
Russell 1000 Index companies with higher price-to-book ratios and higher
forecasted growth values.
THE RUSSELL 1000 VALUE INDEX measures the performance of those Russell 1000
securities with lower price-to-book ratios and lower forecasted growth values.
THE RUSSELL 200 VALUE INDEX measures the performance of those Russell 200
companies with lower price-to-book ratios and lower forecasted growth values.
THE RUSSELL 2000 GROWTH INDEX measures the performance of those Russell-2000
Index companies with higher price-to-book ratios and higher forecasted growth
values.
THE RUSSELL 2000 INDEX consists of the smallest 2,000 companies in the Russell
3000 Index.
THE RUSSELL 3000 INDEX measures the performance of the 3,000 largest U.S.
companies based on total market capitalization.
THE RUSSELL MIDCAP GROWTH INDEX consists of securities with capitalizations
between $450 million and $3.8 billion with greater than average growth
orientation.
THE RUSSELL MIDCAP INDEX measures the performance of the 800 smallest companies
in the Russell 1000 Index.
THE RUSSELL MIDCAP VALUE INDEX is an index that measures the performance of
Russell Midcap companies with lower price-to-book ratios and lower forecasted
growth values.
All indices are unmanaged.
An investor cannot invest directly in an index.
28
<Page>
INDEX DESCRIPTIONS
THE S&P 500 FINANCIALS INDEX is a capitalization-weighted index of all stocks
designed to measure the performance of the financial sector of the S&P Index.
THE S&P 500 INDEX is a capitalization-weighted index of 500 stocks chosen for
market size, liquidity, and industry group representation.
THE S&P BARRA GROWTH INDEX is a capitalization-weighted index of all the stocks
in the S&P 500 Index that have high price-to-book ratios.
THE S&P BARRA VALUE INDEX is a capitalization-weighted index of all the stocks
in the S&P 500 Index that have low price-to-book ratios.
THE S&P MIDCAP 400 INDEX is a capitalization-weighted index that measures the
performance of the mid-range sector of the U.S. stock market.
THE WILSHIRE REAL ESTATE SECURITY INDEX measures the performance of publicly
traded real estate securities, such as Real Estate Investment Trusts (REITs) and
Real Estate Operating Companies (REOCs). The Index is
capitalization-weighted.
All indices are unmanaged.
An investor cannot invest directly in an index.
29
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING ING
GROWTH+ GROWTH LARGECAP
VALUE OPPORTUNITIES GROWTH
FUND FUND FUND
--------------- --------------- ---------------
ASSETS:
Investments in securities at value* $ 218,197,203 $ 180,652,748 $ 256,784,008
Short-term investments at amortized cost 1,682,000 790,000 --
Cash 2,416 -- 5,407,790
Cash collateral for securities loaned 58,996,743 -- 59,067,406
Receivables:
Investment securities sold 3,091,880 4,162,542 --
Fund shares sold 21,964 38,354 1,746,811
Dividends and interest 21,228 42,909 100,833
Prepaid expenses 32,602 29,588 35,087
Reimbursement due from manager -- -- 50,007
--------------- --------------- ---------------
Total assets 282,046,036 185,716,141 323,191,942
--------------- --------------- ---------------
LIABILITIES:
Payable for investment securities purchased 4,514,092 3,780,200 1,080,197
Payable for fund shares redeemed 375,366 295,950 288,987
Payable upon return of securities loaned 58,996,743 -- 59,067,406
Payable to custodian -- 95,735 --
Payable to affiliates 403,129 269,566 318,600
Payable for trustee fees 4,589 4,148 4,177
Other accrued expenses and liabilities 442,771 347,551 492,113
--------------- --------------- ---------------
Total liabilities 64,736,690 4,793,150 61,251,480
--------------- --------------- ---------------
NET ASSETS $ 217,309,346 $ 180,922,991 $ 261,940,462
=============== =============== ===============
NET ASSETS WERE COMPRISED OF:
Paid-in capital $ 686,983,420 $ 600,068,138 $ 624,462,186
Accumulated net investment loss (2,205,069) (1,232,981) (1,148,134)
Accumulated net realized loss on investments (513,740,691) (456,858,685) (390,513,879)
Net unrealized appreciation of investments 46,271,686 38,946,519 29,140,289
--------------- --------------- ---------------
NET ASSETS $ 217,309,346 $ 180,922,991 $ 261,940,462
=============== =============== ===============
* Cost of investment in securities $ 171,925,517 $ 141,706,229 $ 227,643,719
</Table>
See Accompanying Notes to Financial Statements
30
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
ING ING ING
GROWTH+ GROWTH LARGECAP
VALUE OPPORTUNITIES GROWTH
FUND FUND FUND
--------------- --------------- ---------------
CLASS A:
Net Assets $ 48,362,085 $ 49,166,222 $ 74,202,863
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.00
Shares outstanding 4,942,681 3,766,378 4,463,853
Net asset value and redemption price per share $ 9.78 $ 13.05 $ 16.62
Maximum offering price per share (5.75%)(1) $ 10.38 $ 13.85 $ 17.63
CLASS B:
Net Assets $ 116,822,644 $ 54,174,520 $ 101,569,629
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.00
Shares outstanding 12,621,510 4,475,844 6,276,634
Net asset value and redemption price per share(2) $ 9.26 $ 12.10 $ 16.18
Maximum offering price per share $ 9.26 $ 12.10 $ 16.18
CLASS C:
Net Assets $ 51,878,275 $ 25,186,576 $ 50,869,811
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.00
Shares outstanding 5,607,185 2,077,164 3,152,622
Net asset value and redemption price per share(2) $ 9.25 $ 12.13 $ 16.14
Maximum offering price per share $ 9.25 $ 12.13 $ 16.14
CLASS I:
Net Assets n/a $ 52,392,562 $ 27,465,247
Shares authorized n/a unlimited unlimited
Par value n/a $ 0.01 $ 0.00
Shares outstanding n/a 3,874,430 1,604,672
Net asset value and redemption price per share n/a $ 13.52 $ 17.12
Maximum offering price per share n/a $ 13.52 $ 17.12
CLASS Q:
Net Assets $ 246,342 $ 3,111 $ 7,832,912
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.00
Shares outstanding 25,392 240 459,859
Net asset value and redemption price per share $ 9.70 $ 12.96 $ 17.03
Maximum offering price per share $ 9.70 $ 12.96 $ 17.03
</Table>
- ----------
(1) Maximum offering price is computed at 100/94.25 of net asset value. On
purchase of $50,000 or more, the offering price is reduced.
(2) Redemption price per share may be reduced for any applicable contingent
deferred sales charge.
See Accompanying Notes to Financial Statements
31
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING ING
MIDCAP SMALLCAP DISCIPLINED
OPPORTUNITIES OPPORTUNITIES LARGECAP
FUND FUND FUND
--------------- --------------- ---------------
ASSETS:
Investments in securities at value* $ 177,162,450 $ 301,775,001 $ 82,533,364
Short-term investments at amortized cost 679,000 7,950,000 432,000
Cash 1,007 -- 380
Cash collateral for futures -- -- 16,000
Cash collateral for securities loaned 47,739,843 74,561,535 544,335
Receivables:
Investment securities sold 2,958,013 -- 8,281,597
Fund shares sold 103,856 521,509 3,466
Dividends and interest 34,304 19,014 142,428
Variation margin receivable -- -- 275
Prepaid expenses 22,535 32,171 34,787
--------------- --------------- ---------------
Total assets 228,703,354 384,859,230 91,988,632
--------------- --------------- ---------------
LIABILITIES:
Payable for investment securities purchased 3,260,125 516,046 8,474,594
Payable for fund shares redeemed 111,372 386,048 149,699
Payable upon return of securities loaned 47,739,843 74,561,535 544,335
Payable to affiliates 301,023 499,713 110,941
Payable to custodian -- 27,148 --
Payable for trustee fees 4,755 3,068 2,665
Other accrued expenses and liabilities 218,008 362,355 152,124
--------------- --------------- ---------------
51,635,126 76,355,913 9,434,358
--------------- --------------- ---------------
NET ASSETS $ 177,068,228 $ 308,503,317 $ 82,554,274
=============== =============== ===============
NET ASSETS WERE COMPRISED OF:
Paid-in capital $ 315,542,409 $ 586,260,314 $ 132,956,519
Accumulated net investment loss (1,392,132) (2,684,000) (102,410)
Accumulated net realized loss
on investments (177,112,793) (368,454,618) (56,534,913)
Net unrealized appreciation of investments 40,030,744 93,381,621 6,235,078
--------------- --------------- ---------------
NET ASSETS $ 177,068,228 $ 308,503,317 $ 82,554,274
=============== =============== ===============
* Cost of investments in securities $ 137,131,706 $ 208,393,380 $ 76,300,477
</Table>
See Accompanying Notes to Financial Statements
32
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
ING ING ING
MIDCAP SMALLCAP DISCIPLINED
OPPORTUNITIES OPPORTUNITIES LARGECAP
FUND FUND FUND
--------------- --------------- ---------------
CLASS A:
Net Assets $ 49,810,293 $ 124,779,042 $ 5,713,181
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.01
Shares outstanding 4,187,879 5,271,421 684,045
Net asset value and redemption price per share $ 11.89 $ 23.67 $ 8.35
Maximum offering price per share (5.75%)(1) $ 12.62 $ 25.11 $ 8.86
CLASS B:
Net Assets $ 47,224,661 $ 100,299,475 $ 34,629,080
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.01
Shares outstanding 4,118,043 4,578,843 4,293,396
Net asset value and redemption price per share(2) $ 11.47 $ 21.90 $ 8.07
Maximum offering price per share $ 11.47 $ 21.90 $ 8.07
CLASS C:
Net Assets $ 73,547,411 $ 71,119,330 $ 20,707,737
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.01
Shares outstanding 6,444,787 3,253,435 2,567,246
Net asset value and redemption price per share(2) $ 11.41 $ 21.86 $ 8.07
Maximum offering price per share $ 11.41 $ 21.86 $ 8.07
CLASS I:
Net Assets $ 1,600,415 $ 11,512,331 $ 21,504,276
Shares authorized unlimited unlimited unlimited
Par value $ 0.01 $ 0.01 $ 0.01
Shares outstanding 131,892 482,470 2,532,248
Net asset value and redemption price per share $ 12.13 $ 23.86 $ 8.49
Maximum offering price per share $ 12.13 $ 23.86 $ 8.49
CLASS Q:
Net Assets $ 4,885,448 $ 793,139 n/a
Shares authorized unlimited unlimited n/a
Par value $ 0.01 $ 0.01 n/a
Shares outstanding 407,820 33,360 n/a
Net asset value and redemption price per share $ 11.98 $ 23.78 n/a
Maximum offering price per share $ 11.98 $ 23.78 n/a
</Table>
- ----------
(1) Maximum offering price is computed at 100/94.25 of net asset value. On
purchase of $50,000 or more, the offering price is reduced.
(2) Redemption price per share may be reduced for any applicable contingent
deferred sales charge.
See Accompanying Notes to Financial Statements
33
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING
ING MIDCAP SMALLCAP
MAGNACAP VALUE VALUE
FUND FUND FUND
--------------- --------------- ---------------
ASSETS:
Investments in securities at value* $ 376,454,952 $ 60,605,364 $ 46,253,503
Short-term investments at amortized cost 4,145,000 -- --
Cash -- 4,045,107 2,299,164
Cash collateral for securities loaned 69,837,027 10,703,414 7,076,010
Receivables:
Investment securities sold -- 508,146 --
Fund shares sold 28,438 1,163,914 998,631
Dividends and interest 944,840 69,393 37,684
Prepaid expenses 62,074 17,260 18,334
Reimbursement due from manager 284 12 678
--------------- --------------- ---------------
Total assets 451,472,615 77,112,610 56,684,004
--------------- --------------- ---------------
LIABILITIES:
Payable for investment securities purchased -- 2,184,269 212,969
Payable for fund shares redeemed 1,172,104 122,786 49,260
Payable upon return of securities loaned 69,837,027 10,703,414 7,076,010
Payable to affiliates 375,944 87,274 67,560
Payable to custodian 1,909 -- --
Payable for trustee fees 61,021 1,542 1,264
Other accrued expenses and liabilities 643,822 83,140 77,302
--------------- --------------- ---------------
Total liabilities 72,091,827 13,182,425 7,484,365
--------------- --------------- ---------------
NET ASSETS $ 379,380,788 $ 63,930,185 $ 49,199,639
=============== =============== ===============
NET ASSETS WERE COMPRISED OF:
Paid-in Capital $ 423,495,452 $ 64,311,319 $ 45,281,512
Accumulated net investment loss (443,612) (207,761) (288,888)
Accumulated net realized gain (loss) on investments (73,301,299) (415,158) 1,219,291
Net unrealized appreciation of investments 29,630,247 241,785 2,987,724
--------------- --------------- ---------------
NET ASSETS $ 379,380,788 $ 63,930,185 $ 49,199,639
=============== =============== ===============
*Cost of investments in securities $ 346,824,705 $ 60,363,579 $ 43,265,779
</Table>
See Accompanying Notes to Financial Statements
34
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
ING ING
ING MIDCAP SMALLCAP
MAGNACAP VALUE VALUE
FUND FUND FUND
--------------- --------------- ---------------
CLASS A:
Net Assets $ 306,287,493 $ 26,360,586 $ 19,276,182
Shares authorized 80,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 31,738,577 2,562,693 1,631,024
Net asset value and redemption price per share $ 9.65 $ 10.29 $ 11.82
Maximum offering price per share (5.75%)(1) $ 10.24 $ 10.92 $ 12.54
CLASS B:
Net Assets $ 55,652,527 $ 19,922,875 $ 13,106,228
Shares authorized 80,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 5,965,775 1,950,304 1,119,167
Net asset value and redemption price per share(2) $ 9.33 $ 10.22 $ 11.71
Maximum offering price per share $ 9.33 $ 10.22 $ 11.71
CLASS C:
Net Assets $ 11,421,652 $ 17,043,176 $ 16,437,447
Shares authorized 20,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 1,223,463 1,668,338 1,404,824
Net asset value and redemption price per share(2) $ 9.34 $ 10.22 $ 11.70
Maximum offering price per share $ 9.34 $ 10.22 $ 11.70
CLASS I:
Net Assets $ 7,585 $ 585,968 $ 378,950
Shares authorized 50,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 788 56,637 31,960
Net asset value and redemption price per share $ 9.63 $ 10.35 $ 11.86
Maximum offering price per share $ 9.63 $ 10.35 $ 11.86
CLASS M:
Net Assets $ 6,003,237 n/a n/a
Shares authorized 5,000,000 n/a n/a
Par value $ 0.00 n/a n/a
Shares outstanding 628,209 n/a n/a
Net asset value and redemption price per share(3) $ 9.56 n/a n/a
Maximum offering price per share $ 9.91 n/a n/a
CLASS Q:
Net Assets $ 8,294 $ 17,580 $ 832
Shares authorized 20,000,000 unlimited unlimited
Par value $ 0.00 $ 0.001 $ 0.001
Shares outstanding 855 1,707 69
Net asset value and redemption price per share $ 9.70 $ 10.30 $ 11.97
Maximum offering price per share $ 9.70 $ 10.30 $ 11.97
</Table>
- ----------
(1) Maximum offering price is computed at 100/94.25 of net asset value. On
purchase of $50,000 or more, the offering price is reduced.
(2) Redemption price per share may be reduced for any applicable contingent
deferred sales charge.
(3) Maximum offering price is computed at 100/96.50 of net asset value. On
purchases of $50,000 or more, the offering price is reduced.
See Accompanying Notes to Financial Statements
35
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING
ING EQUITY AND REAL
CONVERTIBLE BOND ESTATE
FUND FUND FUND
--------------- --------------- ---------------
ASSETS:
Investments in securities at value* $ 214,334,330 $ 73,847,429 $ 163,692,001
Short-term investments at amortized cost 184,000 5,907,000 --
Cash 855 24,264 1,710,403
Cash collateral for futures -- 3,000 --
Cash collateral for securities loaned 56,440,813 -- 2,353,876
Receivables:
Investment securities sold 501,025 402,345 --
Fund shares sold 168,217 290 26,565
Dividends and interest 1,198,224 307,609 739,817
Variation margin receivable -- 6,937 --
Other assets -- 13,000 --
Prepaid expenses 35,209 24,342 36,031
Reimbursement due from manager -- 4,281 15,199
--------------- --------------- ---------------
Total assets 272,862,673 80,540,497 168,573,892
--------------- --------------- ---------------
LIABILITIES:
Securities sold short -- 13,650 --
Payable for investment securities purchased 490,000 7,915,227 --
Payable for fund shares redeemed 271,822 121,377 54,529
Payable upon return of securities loaned 56,440,813 -- 2,353,876
Payable to affiliates 288,167 89,131 111,369
Payable for trustee fees 9,355 988 4,499
Other accrued expenses and liabilities 280,355 147,032 169,354
--------------- --------------- ---------------
Total liabilities 57,780,512 8,287,405 2,693,627
--------------- --------------- ---------------
NET ASSETS $ 215,082,161 $ 72,253,092 $ 165,880,265
=============== =============== ===============
NET ASSETS WERE COMPRISED OF:
Paid-in Capital $ 283,323,598 $ 87,087,125 $ 134,104,883
Undistributed net investment income
(accumulated net investment loss) 1,598,987 (138,282) 990,279
Accumulated net realized loss on investments (88,572,366) (18,248,444) (654,196)
Net unrealized appreciation of investments 18,731,942 3,552,693 31,439,299
--------------- --------------- ---------------
NET ASSETS $ 215,082,161 $ 72,253,092 $ 165,880,265
=============== =============== ===============
* Cost of investment in securities $ 195,602,388 $ 70,298,312 $ 132,518,779
</Table>
See Accompanying Notes to Financial Statements
36
<Page>
STATEMENTS OF ASSETS AND LIABILITIES as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
ING ING
ING EQUITY AND REAL
CONVERTIBLE BOND ESTATE
FUND FUND FUND
--------------- --------------- ---------------
CLASS A:
Net Assets $ 61,767,221 $ 37,400,634 $ 6,146,238
Shares authorized unlimited unlimited unlimited
Par Value $ 0.00 $ 0.00 $ 0.00
Shares outstanding 3,463,475 3,080,255 506,153
Net asset value and redemption price per share $ 17.83 $ 12.14 $ 12.14
Maximum offering price per share (5.75%)(1) $ 18.92 $ 12.88 $ 12.88
CLASS B:
Net Assets $ 76,760,391 $ 20,325,737 $ 863,352
Shares authorized unlimited unlimited unlimited
Par Value $ 0.00 $ 0.00 $ 0.00
Shares outstanding 3,923,324 1,554,515 70,896
Net asset value and redemption price per share(2) $ 19.57 $ 13.08 $ 12.18
Maximum offering price per share $ 19.57 $ 13.08 $ 12.18
CLASS C:
Net Assets $ 72,767,229 $ 14,193,010 $ 2,250,418
Shares authorized unlimited unlimited unlimited
Par Value $ 0.00 $ 0.00 $ 0.00
Shares outstanding 3,984,445 1,224,186 180,371
Net asset value and redemption price per share(2) $ 18.26 $ 11.59 $ 12.48
Maximum offering price per share $ 18.26 $ 11.59 $ 12.48
CLASS Q:
Net Assets $ 3,787,320 $ 333,711 n/a
Shares authorized unlimited unlimited n/a
Par Value $ 0.00 $ 0.00 n/a
Shares outstanding 218,562 27,689 n/a
Net asset value and redemption price per share $ 17.33 $ 12.05 n/a
Maximum offering price per share $ 17.33 $ 12.05 n/a
CLASS I:
Net Assets n/a n/a $ 156,620,257
Shares authorized n/a n/a unlimited
Par Value n/a n/a $ 0.00
Shares outstanding n/a n/a 12,407,295
Net asset value and redemption price per share n/a n/a $ 12.62
Maximum offering price per share n/a n/a $ 12.62
</Table>
- ----------
(1) Maximum offering price is computed at 100/94.25 of net asset value. On
purchase of $50,000 or more, the offering price is reduced.
(2) Redemption price per share may be reduced for any applicable contingent
deferred sales charge.
See Accompanying Notes to Financial Statements
37
<Page>
STATEMENTS OF OPERATIONS for the six months ended November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING ING
GROWTH + GROWTH LARGECAP
VALUE OPPORTUNITIES GROWTH
FUND FUND(1) FUND
--------------- --------------- ---------------
INVESTMENT INCOME:
Dividends, net of foreign taxes* $ 313,932 $ 480,770 $ 718,103
Interest 18,365 11,694 2,452
Securities loaned income 4,403 -- 3,534
--------------- --------------- ---------------
Total investment income 336,700 492,464 724,089
--------------- --------------- ---------------
EXPENSES:
Investment management fees 1,040,823 819,297 804,999
Distribution and service fees:
Class A 70,613 72,389 101,320
Class B 552,250 258,636 420,220
Class C 252,090 122,281 202,677
Class Q 276 4 9,372
Class T -- 587 --
Transfer agent fees:
Class A 32,151 27,750 110,162
Class B 75,361 35,155 155,037
Class C 34,435 16,612 74,625
Class I -- 1,677 19,521
Class Q 113 -- 5,675
Class T -- 93 --
Administrative service fees 260,821 194,167 107,332
Shareholder reporting expense 145,603 97,241 131,129
Registration fees 27,658 31,193 38,945
Professional fees 18,526 16,175 17,313
Custody and accounting fees 17,871 19,464 18,674
Trustee fees 6,405 5,124 4,758
Insurance expense 2,663 2,064 2,052
Miscellaneous expense 4,110 5,536 5,675
--------------- --------------- ---------------
Total expenses 2,541,769 1,725,445 2,229,486
--------------- --------------- ---------------
Less:
Net waived and reimbursed fees -- -- 357,263
--------------- --------------- ---------------
Net expenses 2,541,769 1,725,445 1,872,223
--------------- --------------- ---------------
Net investment loss (2,205,069) (1,232,981) (1,148,134)
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 26,797,490 12,470,166 36,379,053
Net change in unrealized appreciation (depreciation)
of investments 20,138,742 15,737,281 (3,522,922)
--------------- --------------- ---------------
Net realized and unrealized gain on investments 46,936,232 28,207,447 32,856,131
--------------- --------------- ---------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 44,731,163 $ 26,974,466 $ 31,707,997
=============== =============== ===============
* Foreign taxes $ -- $ 1,304 $ 1,224
</Table>
- ----------
(1) Effective June 2, 2003, Class "T" shares converted into the corresponding
Class "A" shares within this Fund.
See Accompanying Notes to Financial Statements
38
<Page>
STATEMENTS OF OPERATIONS for the six months ended November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING ING
MIDCAP SMALLCAP DISCIPLINED
OPPORTUNITIES OPPORTUNITIES LARGECAP
FUND FUND FUND
--------------- --------------- ---------------
INVESTMENT INCOME:
Dividends, net of foreign taxes* $ 264,008 $ 388,889 $ 694,079
Interest 15,581 23,493 2,790
Securities loaned income 4,157 23,831 --
Other -- 10,634 --
--------------- --------------- ---------------
Total investment income 283,746 446,847 696,869
--------------- --------------- ---------------
EXPENSES:
Investment management fees 865,003 1,416,890 290,040
Distribution and service fees:
Class A 69,580 171,253 9,536
Class B 220,544 460,443 174,067
Class C 349,122 333,043 105,838
Class Q 5,786 1,015 --
Class T -- 92 --
Transfer agent fees:
Class A 33,240 89,684 4,165
Class B 31,590 72,322 22,803
Class C 49,930 52,349 13,864
Class I 80 828 309
Class Q 46 72 --
Class T -- 14 --
Administrative service fees 160,255 296,960 64,858
Shareholder reporting expense 56,200 111,405 38,765
Registration fees 38,730 45,363 30,117
Professional fees 10,689 23,961 8,815
Custody and accounting fees 10,651 27,172 29,032
Trustee fees 4,758 8,418 2,928
Insurance expense 1,960 3,317 861
Miscellaneous expense 9,388 16,246 3,281
--------------- --------------- ---------------
Total expenses 1,917,552 3,130,847 799,279
--------------- --------------- ---------------
Less:
Net waived and reimbursed fees 241,674 -- --
--------------- --------------- ---------------
Net expenses 1,675,878 3,130,847 799,279
--------------- --------------- ---------------
Net investment income (loss) (1,392,132) (2,684,000) (102,410)
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES CONTRACTS:
Net realized gain on:
Investments 6,670,678 24,630,767 2,885,038
Futures contracts -- -- 50,566
--------------- --------------- ---------------
Net realized gain on investments and
futures contracts 6,670,678 24,630,767 2,935,604
--------------- --------------- ---------------
Net change in unrealized appreciation
(depreciation) of investments and futures 21,978,925 52,223,815 4,729,495
--------------- --------------- ---------------
Net realized and unrealized gain on investments
and futures contracts 28,649,603 76,854,582 7,665,099
--------------- --------------- ---------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 27,257,471 $ 74,170,582 $ 7,562,689
=============== =============== ===============
</Table>
See Accompanying Notes to Financial Statements
39
<Page>
STATEMENTS OF OPERATIONS for the six months ended November 30, 2003 (Unaudited)
<Table>
<Caption>
ING ING
ING MIDCAP SMALLCAP
MAGNACAP VALUE VALUE
FUND FUND FUND
--------------- --------------- ---------------
INVESTMENT INCOME:
Dividends, net of foreign taxes* $ 2,971,732 $ 336,463 $ 161,487
Interest 11,206 374 64
Securities loaned income 3,367 2,920 4,300
Other 517 -- --
--------------- --------------- ---------------
Total investment income 2,986,822 339,757 165,851
--------------- --------------- ---------------
EXPENSES:
Investment management fees 957,050 236,989 192,969
Distribution and service fees:
Class A 264,143 23,820 18,355
Class B 255,051 75,455 51,723
Class C 44,477 64,240 66,324
Class M 24,507 -- --
Class Q 6,363 20 1
Transfer agent fees:
Class A 174,334 21,426 16,455
Class B 50,499 16,962 11,607
Class C 8,806 14,401 14,842
Class I -- 35 21
Class M 6,470 -- --
Class Q 26 -- --
Administrative service fees 7,137 23,698 19,297
Shareholder reporting expense 91,496 8,173 7,320
Registration fees 32,261 33,665 28,297
Professional fees 20,929 2,997 3,459
Custody and accounting fees 23,968 4,890 3,660
Trustee fees 6,405 549 915
Insurance expense 2,121 353 247
Miscellaneous expense 44,786 777 1,190
--------------- --------------- ---------------
Total expenses 2,020,829 528,450 436,682
--------------- --------------- ---------------
Less:
Net waived and reimbursed fees -- 10,265 11,276
--------------- --------------- ---------------
Net expenses 2,020,829 518,185 425,406
--------------- --------------- ---------------
Net investment income (loss) 965,993 (178,428) (259,555)
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 2,441,028 2,169,884 4,849,765
Net change in unrealized appreciation of investments 29,639,830 7,740,896 6,386,401
--------------- --------------- ---------------
Net realized and unrealized gain on investments 32,080,858 9,910,780 11,236,166
--------------- --------------- ---------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 33,046,851 $ 9,732,352 $ 10,976,611
=============== =============== ===============
* Foreign taxes $ 21,116 $ -- $ --
</Table>
See Accompanying Notes to Financial Statements
40
<Page>
STATEMENTS OF OPERATIONS for the six months ended November 30, 2003 (Unaudited)
<Table>
<Caption>
ING
ING EQUITY AND ING
CONVERTIBLE BOND REAL ESTATE
FUND FUND(1) FUND
--------------- --------------- ---------------
INVESTMENT INCOME:
Dividends $ 929,218 $ 371,942 $ 4,831,300
Interest 2,657,608 727,600 1,381
Securities loaned income 15,801 -- 41
--------------- --------------- ---------------
Total investment income 3,602,627 1,099,542 4,832,722
--------------- --------------- ---------------
EXPENSES:
Investment management fees 755,093 270,437 525,060
Distribution and service fees:
Class A 97,760 62,867 4,531
Class B 365,992 108,517 1,736
Class C 342,572 70,628 6,555
Class Q 5,612 386 --
Class T -- 135 --
Transfer agent fees:
Class A 56,972 30,795 5,227
Class B 74,049 18,427 488
Class C 69,527 12,017 1,911
Class I -- -- 108,985
Class Q 1,110 302 1,139
Class T -- 32 --
Administrative service fees 100,677 36,058 75,007
Shareholder reporting expense 67,710 44,886 9,153
Registration fees 18,863 32,611 28,060
Professional fees 14,806 18,227 15,166
Custody and accounting fees 23,106 18,300 13,029
Trustee fees 4,758 2,196 3,242
Insurance expense 1,937 907 --
Offering expense -- -- 53,425
Miscellaneous expense 4,100 2,232 7,310
--------------- --------------- ---------------
Total expenses 2,004,644 729,960 860,024
--------------- --------------- ---------------
Less:
Net waived and reimbursed fees -- 44,790 93,322
--------------- --------------- ---------------
Net expenses 2,004,644 685,170 766,702
--------------- --------------- ---------------
Net investment income (loss) 1,597,983 414,372 4,066,020
--------------- --------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, FOREIGN CURRENCIES AND
FUTURES CONTRACTS:
Net realized gain (loss) on:
Investments 10,842,481 (3,787,898) 8,309,338
Foreign currencies 20,178 12,662 --
--------------- --------------- ---------------
Net realized gain (loss) on investments
and foreign currencies 10,862,659 (3,775,236) 8,309,338
--------------- --------------- ---------------
Net change in unrealized appreciation
(depreciation) on investments, foreign currencies
and futures contracts 9,065,929 6,961,526 12,853,556
--------------- --------------- ---------------
Net realized and unrealized gain on investments
and foreign currencies and futures contracts 19,928,588 3,186,290 21,162,894
--------------- --------------- ---------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 21,526,571 $ 3,600,662 $ 25,228,914
=============== =============== ===============
</Table>
- ----------
(1) Effective June 2, 2003, Class "T" shares converted into the corresponding
Class "A" shares within this fund.
See Accompanying Notes to Financial Statements
41
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING GROWTH + VALUE FUND ING GROWTH OPPORTUNITIES FUND
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
FROM OPERATIONS:
Net investment loss $ (2,205,069) $ (4,743,710) $ (1,232,981) $ (3,315,002)
Net realized gain (loss) on investments 26,797,490 (96,541,901) 12,470,166 (55,971,035)
Net change in unrealized appreciation
of investments 20,138,742 21,655,719 15,737,281 7,993,868
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from operations 44,731,163 (79,629,892) 26,974,466 (51,292,169)
--------------- --------------- --------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 11,669,506 22,504,824 15,722,902 14,322,951
Cost of shares redeemed (45,475,916) (111,119,568) (38,603,520) (79,882,586)
--------------- --------------- --------------- ---------------
Net decrease in net assets resulting from
capital share transactions (33,806,410) (88,614,744) (22,880,618) (65,559,635)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets 10,924,753 (168,244,636) 4,093,848 (116,851,804)
NET ASSETS:
Beginning of period 206,384,593 374,629,229 176,829,143 293,680,947
--------------- --------------- --------------- ---------------
End of period $ 217,309,346 $ 206,384,593 $ 180,922,991 $ 176,829,143
=============== =============== =============== ===============
Accumulated net investment loss at end of period $ (2,205,069) $ -- $ (1,232,981) $ --
=============== =============== =============== ===============
</Table>
See Accompanying Notes to Financial Statements
42
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING LARGECAP GROWTH FUND ING MIDCAP OPPORTUNITIES FUND
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
FROM OPERATIONS:
Net investment loss $ (1,148,134) $ (2,412,261) $ (1,392,132) $ (2,858,315)
Net realized gain (loss) on investments 36,379,053 (67,406,141) 6,670,678 (35,686,206)
Net change in unrealized appreciation (depreciation)
of investments (3,522,922) 27,230,077 21,978,925 3,498,927
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting from
operations 31,707,997 (42,588,325) 27,257,471 (35,045,594)
--------------- --------------- --------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 86,443,482 37,811,932 14,546,813 19,074,655
Cost of shares redeemed (29,575,547) (101,232,282) (35,388,499) (98,427,376)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting from
capital share transactions 56,867,935 (63,420,350) (20,841,686) (79,352,721)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets 88,575,932 (106,008,675) 6,415,785 (114,398,315)
NET ASSETS:
Beginning of period 173,364,530 279,373,205 170,652,443 285,050,758
--------------- --------------- --------------- ---------------
End of period $ 261,940,462 $ 173,364,530 $ 177,068,228 $ 170,652,443
=============== =============== =============== ===============
Accumulated net investment loss at end of period $ (1,148,134) $ -- $ (1,392,132) $ --
=============== =============== =============== ===============
</Table>
See Accompanying Notes to Financial Statements
43
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING SMALLCAP OPPORTUNITIES FUND ING DISCIPLINED LARGECAP FUND
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
FROM OPERATIONS:
Net investment loss $ (2,684,000) $ (6,705,515) $ (102,410) $ (113,825)
Net realized gain (loss) on investments 24,630,767 (136,228,953) 2,935,604 (18,751,052)
Net change in unrealized appreciation of investments 52,223,815 23,893,365 4,729,495 4,799,759
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting from
operations 74,170,582 (119,041,103) 7,562,689 (14,065,118)
--------------- --------------- --------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 31,904,431 64,613,733 1,986,085 10,784,368
Cost of shares redeemed (76,206,193) (144,373,057) (9,584,920) (35,260,799)
--------------- --------------- --------------- ---------------
Net decrease in net assets resulting from
capital share transactions (44,301,762) (79,759,324) (7,598,835) (24,476,431)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets 29,868,820 (198,800,427) (36,146) (38,541,549)
NET ASSETS:
Beginning of period 278,634,497 477,434,924 82,590,420 121,131,969
--------------- --------------- --------------- ---------------
End of period $ 308,503,317 $ 278,634,497 $ 82,554,274 $ 82,590,420
=============== =============== =============== ===============
Accumulated net investment loss at end of period $ (2,684,000) $ -- $ (102,410) $ --
=============== =============== =============== ===============
</Table>
See Accompanying Notes to Financial Statements
44
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING MAGNACAP FUND ING MIDCAP VALUE FUND
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
FROM OPERATIONS:
Net investment income (loss) $ 965,993 $ 1,260,957 $ (178,428) $ (167,900)
Net realized gain (loss) on investments 2,441,028 (73,313,713) 2,169,884 (2,585,042)
Net change in unrealized appreciation (depreciation)
of investments 29,639,830 28,047,677 7,740,896 (7,038,519)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting
from operations 33,046,851 (44,005,079) 9,732,352 (9,791,461)
--------------- --------------- --------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (2,057,070) (541,544) -- (66,920)
Class B -- -- -- (10,431)
Class C -- -- -- (8,620)
Class I (103) -- -- (1,546)
Class M (4,890) -- -- --
Class Q (42,794) (37,713) -- (105)
Net realized gains:
Class A -- -- -- (197,711)
Class B -- -- -- (153,548)
Class C -- -- -- (125,926)
Class I -- -- -- (2,253)
Class Q -- -- -- (180)
--------------- --------------- --------------- ---------------
Total distributions (2,104,857) (579,257) -- (567,240)
--------------- --------------- --------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 9,985,775 19,818,980 20,782,333 20,390,316
Net proceeds from shares issued in merger 137,589,132 -- -- --
Dividends reinvested 1,816,429 509,567 -- 452,894
--------------- --------------- --------------- ---------------
149,391,336 20,328,547 20,782,333 20,843,210
Cost of shares redeemed (31,706,330) (66,540,583) (6,061,371) (17,802,172)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting from
capital share transactions 117,685,006 (46,212,036) 14,720,962 3,041,038
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets 148,627,000 (90,796,372) 24,453,314 (7,317,663)
NET ASSETS:
Beginning of period 230,753,788 321,550,160 39,476,871 46,794,534
--------------- --------------- --------------- ---------------
End of period $ 379,380,788 $ 230,753,788 $ 63,930,185 $ 39,476,871
=============== =============== =============== ===============
Undistributed net investment income (accumulated
net investment loss) at end of period $ (443,612) $ 695,252 $ (207,761) $ (29,333)
=============== =============== =============== ===============
</Table>
See Accompanying Notes to Financial Statements
45
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING SMALLCAP VALUE FUND ING CONVERTIBLE FUND
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
FROM OPERATIONS:
Net investment gain (loss) $ (259,555) $ (290,497) $ 1,597,983 $ 4,069,736
Net realized gain (loss) on investments 4,849,765 (808,791) 10,862,659 (1,549,700)
Net change in unrealized appreciation (depreciation)
of investments 6,386,401 (3,280,630) 9,065,929 8,112,313
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting from
operations 10,976,611 (4,379,918) 21,526,571 10,632,349
--------------- --------------- --------------- ---------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A -- (53,921) (626,105) (1,038,306)
Class B -- (269) (641,476) (1,007,242)
Class C -- (8,732) (655,824) (1,039,451)
Class I -- (2,331) -- --
Class Q -- -- (45,508) (129,825)
Net realized gains:
Class A (1,073,901) (119,158) -- --
Class B (775,481) (76,523) -- --
Class C (949,961) (90,831) -- --
Class I (22,291) (2,504) -- --
Class Q (48) (6) -- --
--------------- --------------- --------------- ---------------
Total distributions (2,821,682) (354,275) (1,968,913) (3,214,824)
--------------- --------------- --------------- ---------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 11,954,395 16,776,369 24,550,447 19,562,889
Dividends reinvested 2,135,018 266,141 1,239,363 2,040,333
--------------- --------------- --------------- ---------------
14,089,413 17,042,510 25,789,810 21,603,222
Cost of shares redeemed (5,021,693) (15,157,416) (24,079,352) (74,420,958)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting from
capital share transactions 9,067,720 1,885,094 1,710,458 (52,817,736)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets 17,222,649 (2,849,099) 21,268,116 (45,400,211
NET ASSETS:
Beginning of period 31,976,990 34,826,089 193,814,045 239,214,256
--------------- --------------- --------------- ---------------
End of period $ 49,199,639 $ 31,976,990 $ 215,082,161 $ 193,814,045
=============== =============== =============== ===============
Undistributed net investment income (accumulated
net investment loss) at end of period $ (288,888) $ (29,333) $ 1,598,987 $ 1,969,917
=============== =============== =============== ===============
</Table>
See Accompanying Notes to Financial Statements
46
<Page>
STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
<Table>
<Caption>
ING EQUITY AND BOND FUND ING REAL ESTATE FUND
------------------------------ -----------------------------------------------
SIX MONTHS YEAR SIX MONTHS SEVEN MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, OCTOBER 31,
2003 2003 2003 2003 2002
------------- ------------- ------------- ------------- -------------
FROM OPERATIONS:
Net investment income $ 414,372 $ 2,052,389 $ 4,066,020 $ 2,676,211 $ 3,936,443
Net realized gain (loss) on investments (3,775,236) (10,770,814) 8,309,338 3,228,787 2,174,768
Net change in unrealized
appreciation (depreciation) of investments 6,961,526 4,912,801 12,853,556 11,405,743 (193,441)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in
net assets resulting from operations 3,600,662 (3,805,624) 25,228,914 17,310,741 5,917,770
------------- ------------- ------------- ------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (559,656) (1,077,960) (101,023) (3,557) --
Class B (274,265) (368,267) (7,971) (1,521) --
Class C (203,493) (273,453) (26,247) (74) --
Class I -- -- (4,349,925) (2,053,561) (3,936,443)
Class Q (4,429) (4,292) -- -- --
Class T -- (62,879) -- -- --
Net realized gains:
Class A -- -- (242,273) -- --
Class B -- -- (30,332) -- --
Class C -- -- (87,401) -- --
Class I -- -- (6,232,489) -- --
In excess of net investment income:
Class I -- -- -- -- (1,294,844)
------------- ------------- ------------- ------------- -------------
Total distributions (1,041,843) (1,786,851) (11,077,661) (2,058,713) (5,231,287)
------------- ------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 11,429,548 13,090,514 28,954,953 23,221,408 31,057,798
Dividends reinvested 764,038 1,413,761 7,548,958 1,220,646 3,749,980
------------- ------------- ------------- ------------- -------------
12,193,586 14,504,275 36,503,911 24,442,054 34,807,778
Cost of shares redeemed (14,781,669) (48,110,001) (11,708,035) (10,091,863) (14,351,398)
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in
net assets resulting from capital
share transactions (2,588,083) (33,605,726) 24,795,876 14,350,191 20,456,380
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets (29,264) (39,198,201) 38,947,129 29,602,219 21,142,863
NET ASSETS:
Beginning of period 72,282,356 111,480,557 126,933,136 97,330,917 76,188,054
------------- ------------- ------------- ------------- -------------
End of period $ 72,253,092 $ 72,282,356 $ 165,880,265 $ 126,933,136 $ 97,330,917
============= ============= ============= ============= =============
Undistributed net investment income
(accumulated net investment loss)
at end of period $ (138,282) $ 489,189 $ 990,279 $ 1,409,425 $ 214,000
============= ============= ============= ============= =============
</Table>
See Accompanying Notes to Financial Statements
47
<Page>
ING GROWTH + VALUE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS Q
--------------------------------------------------------------------
SIX MONTHS YEAR YEAR SEVEN MONTHS JUNE 5,
ENDED ENDED ENDED ENDED 2000(2) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, OCTOBER 31,
2003 2003 2002 2001(1) 2001
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.81 9.86 13.88 24.90 26.73
Income (loss) from investment operations:
Net investment income (loss) $ (0.07) (0.14) (0.11) (0.18) (0.05)
Net realized and unrealized gain (loss) on investments $ 1.96 (1.91) (3.91) (8.62) (1.78)
Total from investment operations $ 1.89 (2.05) (4.02) (8.80) (1.83)
Less distributions from:
Net investment income $ -- -- -- 2.16 --
Tax return of capital $ -- -- -- 0.06 --
Total distributions $ -- -- -- 2.22 --
Net asset value, end of period $ 9.70 7.81 9.86 13.88 24.90
TOTAL RETURN(3) % 24.20 (20.79) (28.96) (38.00) (6.85)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 246 211 396 454 1,346
Ratios to average net assets:
Net expenses(4) % 1.82 1.82 1.71 1.69 1.53
Net investment income (loss)(4) % (1.49) (1.35) (0.93) (1.43) (1.19)
Portfolio turnover rate % 84 294 255 95 163
</Table>
(1) The Fund changed its fiscal year-end to May 31.
(2) Commencement of operations of the class.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
See Accompanying Notes to Financial Statements.
48
<Page>
ING GROWTH OPPORTUNITIES FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS I
---------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR FIVE MONTHS
ENDED ENDED ENDED ENDED YEAR ENDED DECEMBER 31,
NOVEMBER 30, MAY 31, MAY 31, MAY 31, ----------------------------
2003 2003 2002 2001(1) 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.54 13.68 19.10 26.05 33.76 26.28 21.36
Income (loss) from investment operations:
Net investment income (loss) $ (0.05) (0.12) (0.19) (0.08) (0.15) (0.17) (0.05)
Net realized and unrealized gain (loss)
on investments $ 2.03 (2.02) (5.23) (6.87) (6.07) 20.49 5.18
Total from investment operations $ 1.98 (2.14) (5.42) (6.95) (6.22) 20.32 5.13
Less distributions from:
Net realized gains from investments $ -- -- -- -- 1.49 12.84 0.21
Total distributions $ -- -- -- -- 1.49 12.84 0.21
Net asset value, end of period $ 13.52 11.54 13.68 19.10 26.05 33.76 26.28
TOTAL RETURN(2) % 17.16 (15.64) (28.38) (26.68) (18.74) 93.86 24.06
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 52,393 44,704 56,719 79,174 108,005 132,953 83,233
Ratios to average net assets:
Net expenses(3) % 1.37 1.43 1.37 1.31 1.16 1.00 1.00
Net investment income (loss)(3) % (0.80) (1.04) (1.21) (0.92) (0.56) (0.61) (0.13)
Portfolio turnover rate % 44 355 473 217 326 286 98
<Caption>
CLASS Q
-----------------------------------------------------------------
SIX MONTHS YEAR YEAR FIVE MONTHS JUNE 1,
ENDED ENDED ENDED ENDED 2000(4) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, DECEMBER 31,
2003 2003 2002 2001(1) 2000
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.07 13.16 18.70 25.48 32.58
Income (loss) from investment operations:
Net investment income (loss) $ (0.07) (0.12) (0.34)* (0.10) (0.15)
Net realized and unrealized gain (loss) on investments $ 1.96 (1.97) (5.20) (6.68) (5.46)
Total from investment operations $ 1.89 (2.09) (5.54) (6.78) (5.61)
Less distributions from:
Net realized gains from investments $ -- -- -- -- 1.49
Total distributions $ -- -- -- -- 1.49
Net asset value, end of period $ 12.96 11.07 13.16 18.70 25.48
TOTAL RETURN(2) % 17.07 (15.88) (29.63) (26.61) (17.55)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 3 3 10 7,947 10,274
Ratios to average net assets:
Net expenses(3) % 1.68 1.68 1.62 1.56 1.41
Net investment income (loss)(3) % (1.12) (1.31) (1.49) (1.17) (0.81)
Portfolio turnover rate % 44 355 473 217 326
</Table>
(1) The Fund changed its fiscal year-end to May 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) Commencement of operations of Class Q.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Accompanying Notes to Financial Statements.
49
<Page>
ING LARGECAP GROWTH FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS I
---------------------------------------
SIX MONTHS YEAR JANUARY 8,
ENDED ENDED 2002(1) TO
NOVEMBER 30, MAY 31, MAY 31,
2003 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 14.71 16.93 21.04
Income (loss) from investment operations:
Net investment income (loss) $ (0.02) (0.06) (0.02)
Net realized and unrealized gain (loss) on investments $ 2.43 (2.16) (4.09)
Total from investment operations $ 2.41 (2.22) (4.11)
Net asset value, end of period $ 17.12 14.71 16.93
TOTAL RETURN(2) % 16.30 (13.11) (19.53)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 27,465 22,156 26,106
Ratios to average net assets:
Net expenses after expense reimbursement(3)(4) % 0.88 1.05 0.96
Gross expenses prior to expense reimbursement(3) % 1.22 1.21 0.96
Net investment income (loss) after expense reimbursement(3)(4) % (0.21) (0.42) (0.43)
Portfolio turnover rate % 129 291 536
<Caption>
CLASS Q
--------------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR ELEVEN MONTHS YEAR THREE MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30, MARCH 31,
2003 2003 2002 2001(5) 2000 1999(6) 1999
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 14.66 16.92 24.81 43.71 28.43 25.24 15.66
Income (loss) from investment
operations:
Net investment income (loss) $ (0.04) (0.15) (0.44) (0.17) (0.20) (0.03) (0.02)
Net realized and unrealized gain
(loss) on investments $ 2.41 (2.11) (7.44) (18.26) 15.86 3.22 9.87
Total from investment operations $ 2.37 (2.26) (7.88) (18.43) 15.66 3.19 9.85
Less distributions from:
Net investment income $ -- -- 0.01 -- -- -- --
Net realized gain from investments $ -- -- -- 0.47 0.38 -- 0.27
Total distributions $ -- -- 0.01 0.47 0.38 -- 0.27
Net asset value, end of period $ 17.03 14.66 16.92 24.81 43.71 28.43 25.24
TOTAL RETURN(2) % 16.01 (13.36) (31.77) (42.50) 55.57 12.64 63.76
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 7,833 6,178 16,840 12,534 24,838 6,044 4,908
Ratios to average net assets:
Net expenses after expense
reimbursement(3)(4) % 1.13 1.31 1.21 1.19 1.26 1.23 1.26
Gross expenses prior to expense
reimbursement(3) % 1.46 1.47 1.21 1.19 1.26 1.25 1.91
Net investment income (loss) after
expense reimbursement(3)(4) % (0.44) (0.66) (0.76) (0.50) (0.77) (0.36) (0.28)
Portfolio turnover rate % 129 291 536 331 139 27 253
</Table>
(1) Commencement of operations of Class I.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
(5) The Fund changed its fiscal year end to May 31.
(6) Effective May 24, 1999, ING investments, LLC became the Investment Adviser
of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
See Accompanying Notes to Financial Statements.
50
<Page>
ING MIDCAP OPPORTUNITIES FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS I
--------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR FIVE MONTHS YEAR ENDED AUGUST 20,
ENDED ENDED ENDED ENDED DECEMBER 31, 1998(2) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, --------------- DECEMBER 31,
2003 2003 2002 2001(1) 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.33 11.29 14.73 19.26 21.34 12.99 10.00
Income (loss) from investment operations:
Net investment loss $ (0.05) (0.11) (0.11)* (0.06) (0.13) (0.15) (0.02)
Net realized and unrealized gain (loss)
on investments $ 1.85 (0.85) (3.33) (4.47) 0.23 12.09 3.01
Total from investment operations $ 1.80 (0.96) (3.44) (4.53) 0.10 11.94 2.99
Less distributions from:
Net realized gain on investments $ -- -- -- -- 2.18 3.59 --
Total distributions $ -- -- -- -- 2.18 3.59 --
Net asset value, end of period $ 12.13 10.33 11.29 14.73 19.26 21.34 12.99
TOTAL RETURN(3) % 17.42 (8.50) (23.35) (23.52) 0.08 103.19 29.90
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 1,600 10,844 39,874 52,007 68,006 67,954 33,441
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.09 1.09 1.26 1.52 1.36 1.41 1.50
Gross expenses prior to expense
reimbursement(4) % 1.37 1.41 1.50 1.52 1.36 1.41 2.01
Net investment loss after expense
reimbursement(4)(5) % (0.80) (0.71) (0.95) (0.97) (0.66) (1.04) (0.70)
Portfolio turnover rate % 37 345 399 182 188 201 61
<Caption>
CLASS Q
-----------------------------------------------------------------
SIX MONTHS YEAR YEAR FIVE MONTHS APRIL 14,
ENDED ENDED ENDED ENDED 2000(2) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, DECEMBER 31,
2003 2003 2002 2001(1) 2000
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.19 11.16 14.63 19.16 22.57
Income (loss) from investment operations:
Net investment income (loss) $ (0.06) (0.09) (0.17)* (0.08) (0.06)
Net realized and unrealized gain (loss) on investments $ 1.85 (0.88) (3.30) (4.45) (1.17)
Total from investment operations $ 1.79 (0.97) (3.47) (4.53) (1.23)
Less distributions from:
Net realized gain from investments $ -- -- -- -- 2.18
Total distributions $ -- -- -- -- 2.18
Net asset value, end of period $ 11.98 10.19 11.16 14.63 19.16
TOTAL RETURN(3) % 17.57 (8.69) (23.72) (23.64) (5.86)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 4,885 4,886 6,563 3,071 3,264
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 1.31 1.33 1.63 1.82 1.61
Gross expenses prior to expense reimbursement(4) % 1.59 1.66 1.69 1.82 1.61
Net investment income (loss) after expense
reimbursement(4)(5) % (0.98) (0.98) (1.35) (1.28) (0.91)
Portfolio turnover rate % 37 345 399 182 188
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Commencement of operations of class.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
* Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Accompanying Notes to Financial Statements.
51
<Page>
ING SMALLCAP OPPORTUNITIES FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS I
------------------------------------------------------------------------
SIX MONTHS YEAR YEAR FIVE MONTHS YEAR ENDED
ENDED ENDED ENDED ENDED DECEMBER 31,
NOVEMBER 30, MAY 31, MAY 31, MAY 31, -----------------
2003 2003 2002 2001(1) 2000 1999(2)
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 18.27 24.07 39.02 47.47 59.54 31.78
Income (loss) from investment operations:
Net investment loss $ (0.13) (0.23) (0.36)** (0.14) (1.00) (0.08)
Net realized and unrealized gain (loss)
on investments $ 5.72 (5.57) (13.60) (8.31) (2.17) 35.40
Total from investment operations $ 5.59 (5.80) (13.96) (8.45) (3.17) 35.32
Less distributions from:
Net realized gain from investments $ -- -- 0.99 -- 8.90 7.56
Total distributions $ -- -- 0.99 -- 8.90 7.56
Net asset value, end of period $ 23.86 18.27 24.07 39.02 47.47 59.54
TOTAL RETURN(3) % 30.60 (24.10) (36.17) (17.80) (5.21) 126.05
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 11,512 8,510 10,700 --* --* --*
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 1.67 1.46 1.41 1.31 1.15 0.47(5)
Gross expenses prior to expense reimbursement(4) % 1.67 1.41 1.50 1.52 1.36 1.41
Net investment income (loss) after expense
reimbursement(4)(5) % (1.49) (1.37) (1.34) (1.03) (0.75) (0.35)(5)
Portfolio turnover rate % 35 357 423 104 134 223
<Caption>
CLASS Q
------------------------------------------------------------------
SIX MONTHS YEAR YEAR FIVE MONTHS APRIL 4,
ENDED ENDED ENDED ENDED 2000(6) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, DECEMBER 31,
2003 2003 2002 2001(1) 2000
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 18.22 24.07 38.81 47.20 60.86
Income (loss) from investment operations:
Net investment loss $ (0.18) (0.53) (0.51)** (0.20) (0.27)
Net realized and unrealized gain (loss) on investments $ 5.74 (5.32) (13.24) (8.19) (4.49)
Total from investment operations $ 5.56 (5.85) (13.75) (8.39) (4.76)
Less distributions from:
Net realized gain from investments $ -- -- 0.99 -- 8.90
Total distributions $ -- -- 0.99 -- 8.90
Net asset value, end of period $ 23.78 18.22 24.07 38.81 47.20
TOTAL RETURN(3) % 30.52 (24.30) (35.83) (17.78) (8.29)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 793 906 3,651 2,832 2,545
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 1.64 1.70 1.66 1.56 1.40
Gross expenses prior to expense reimbursement(4) % 1.64 1.70 1.66 1.56 1.40
Net investment income (loss) after expense
reimbursement(4)(5) % (1.51) (1.62) (1.62) (1.28) (1.10)
Portfolio turnover rate % 35 357 423 104 134
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Commencement of operations of the Fund.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
(6) Commencement of operations of Class Q.
* Amount represents less than $1,000.
** Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Accompanying Notes to Financial Statements.
52
<Page>
ING DISCIPLINED LARGECAP FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS I
----------------------------------------------------------------------------
SIX MONTHS YEAR YEAR SEVEN MONTHS YEAR DECEMBER 31,
ENDED ENDED ENDED ENDED ENDED 1998(2) TO
NOVEMBER 30, MAY 31, MAY 31, MAY 31, OCTOBER 31, OCTOBER 31,
2003 2003 2002 2001(1) 2000 1999
- -------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 7.72 8.52 9.94 11.25 11.17 10.00
Income (loss) from investment operations:
Net investment income (loss) $ 0.02 0.05 0.04 0.02 0.04 0.06
Net realized and unrealized gain (loss)
on investments $ 0.75 (0.85) (1.46) (1.33) 0.19 1.11
Total from investment operations $ 0.77 (0.80) (1.42) (1.31) 0.23 1.17
Less distributions from:
Net realized gain from investments $ -- -- -- -- 0.15 --
Total distributions $ -- -- -- -- 0.15 --
Net asset value, end of period $ 8.49 7.72 8.52 9.94 11.25 11.17
TOTAL RETURN(3) % 9.97 (9.39) (14.28) (11.64) 2.00 11.70
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 21,504 19,550 21,578 25,172 28,473 27,927
Ratios to average net assets:
Net expenses after expense reimbursement(4) % 1.13 1.12 1.00 1.04 1.07 0.98(5)
Gross expenses prior to expense
reimbursement(4) % 1.13 1.12 1.00 1.04 1.07 1.23
Net investment income (loss) after expense
reimbursement(4) % 0.55 0.70 0.46 0.27 0.34 0.62(5)
Portfolio turnover rate % 132 106 149 26 57 26
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) The Fund commenced operations on December 30, 1998.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) Expenses calculated net of taxes and advisor reimbursement.
See Accompanying Notes to Financial Statements.
53
<Page>
ING MAGNACAP FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS I CLASS Q
------------------------- -------------------------------------------------------------
SIX MONTHS MARCH 5, SIX MONTHS YEAR YEAR ELEVEN MONTHS NOVEMBER 19,
ENDED 2003(1) TO ENDED ENDED ENDED ENDED 1999(3) TO
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30,
2003 2003 2003 2003 2002 2001(2) 2000
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.82 7.55 8.82 10.11 13.55 15.84 16.26
Income (loss) from investment
operations:
Net investment income (loss) $ 0.07 0.01 (21.24) 0.08 0.09 0.07 0.05
Net realized and unrealized gain
(loss) on investments $ 0.86 1.26 22.17 (1.32) (1.52) (0.38) (0.47)
Total from investment operations $ 0.93 1.27 0.93 (1.24) (1.43) (0.31) (0.42)
Less distributions from:
Net investment income $ 0.13 -- 0.05 0.05 0.11 0.10 --
Net realized gain from investments $ -- -- -- -- 1.90 1.88 --
Total distributions $ 0.13 -- 0.05 0.05 2.01 1.98 --
Net asset value, end of period $ 9.62 8.82 9.70 8.82 10.11 13.55 15.84
TOTAL RETURN(4) % 10.65 16.82 10.86 (12.27) (10.75) (2.60) (2.58)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 8 7 8 7,431 8,495 11,184 9,928
Ratios to average net assets:
Expenses(5) % 0.94 0.92 1.20 1.22 1.12 1.11 1.24
Net investment income (loss)(5) % 1.44 2.06 0.96 0.95 0.81 0.53 0.46
Portfolio turnover rate % 23 110 45 110 75 92 26
</Table>
(1) Commencement of operations of Class I.
(2) The Fund changed its fiscal year end to May 31.
(3) Commencement of operations of Class Q.
(4) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(5) Annualized for periods less than one year.
See Accompanying Notes to Financial Statements.
54
<Page>
ING MIDCAP VALUE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS I CLASS Q
------------------------------------ ------------------------------------
SIX MONTHS YEAR MARCH 4, SIX MONTHS YEAR APRIL 17,
ENDED ENDED 2002(1) TO ENDED ENDED 2002(2) TO
NOVEMBER 30, MAY 31, MAY 31, NOVEMBER 30, MAY 31, MAY 31,
2003 2003 2002 2003 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 8.39 10.30 10.20 8.36 10.28 10.52
Income (loss) from investment operations:
Net investment income (loss) $ (0.00)* 0.01 0.01 (0.00)* 0.00* 0.00*
Net realized and unrealized gain (loss)
on investments $ 1.96 (1.74) 0.09 1.94 (1.75) (0.24)
Total from investment operations $ 1.96 (1.73) 0.10 1.94 (1.75) (0.24)
Less distributions from:
Net investment income $ -- 0.07 -- -- 0.06 --
Net realized gain from investments $ -- 0.11 -- -- 0.11 --
Total distributions $ -- 0.18 -- -- 0.17 --
Net asset value, end of period $ 10.35 8.39 10.30 10.30 8.36 10.28
TOTAL RETURN(3) % 23.36 (16.35) 0.98 23.21 (16.62) (2.28)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 586 197 71 18 14 11
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 1.28 1.28 1.24 1.43 1.54 1.52
Gross expenses prior to expense reimbursement(4) % 1.32 1.70 2.60 1.57 1.96 2.28
Net investment income (loss) after expense
reimbursement(4)(5) % 0.17 0.46 0.38 0.00 0.14 0.43
Portfolio turnover rate % 49 72 13 99 72 13
</Table>
(1) Commencement of operations of Class I.
(2) Commencement of operations of Class Q.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
* Amount represents less than $0.01 per share.
See Accompanying Notes to Financial Statements.
55
<Page>
ING SMALLCAP VALUE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS I CLASS Q
------------------------------------ ------------------------------------
SIX MONTHS YEAR MARCH 7, SIX MONTHS YEAR APRIL 30,
ENDED ENDED 2002(1) TO ENDED ENDED 2002(2) TO
NOVEMBER 30, MAY 31, MAY 31, NOVEMBER 30, MAY 31, MAY 31,
2003 2003 2002 2003 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.44 10.63 10.32 9.53 10.63 11.01
Income (loss) from investment operations:
Net investment income (loss) $ (0.02) (0.05) 0.00* (0.01) 0.33 0.00*
Net realized and unrealized gain (loss)
on investments $ 3.18 (0.97) 0.31 3.19 (1.34) (0.38)
Total from investment operations $ 3.16 (1.02) 0.31 3.18 (1.01) (0.38)
Less distributions from:
Net investment income $ -- 0.08 -- -- -- --
Net realized gain from investments $ 0.74 0.09 -- 0.74 0.09 --
Total distributions $ 0.74 0.17 -- 0.74 0.09 --
Net asset value, end of period $ 11.86 9.44 10.63 11.97 9.53 10.63
TOTAL RETURN(3) % 33.95 (9.49) 3.00 33.83 (9.47) (3.45)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 379 222 26 1 1 8
Ratios to average net assets:
Net expenses after expense reimbursement(4)(5) % 1.29 1.32 1.23 1.10 1.35 1.42
Gross expenses prior to expense reimbursement(4) % 1.34 1.73 2.78 1.37 1.73 2.42
Net investment income (loss) after expense
reimbursement(4)(5) % (0.43) (0.13) 0.17 (0.24) (0.32) 0.00
Portfolio turnover rate % 38 54 12 76 54 12
</Table>
(1) The Fund commenced operations on February 1, 2002.
(2) Class B and Class C commenced offering shares on February 4, 2002.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
* Amount represents less than $0.01 per share.
See Accompanying Notes to Financial Statements.
56
<Page>
ING CONVERTIBLE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS Q
----------------------------------------------------------------------------
ELEVEN THREE
SIX MONTHS YEAR YEAR MONTHS YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30, MARCH 31,
2003 2003 2002 2001(1) 2000 1999(2) 1999
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 15.74 14.91 17.37 26.85 22.51 21.22 18.47
Income (loss) from investment operations:
Net investment income (loss) $ 0.18 0.41 0.36 0.59 0.44 0.09 0.43
Net realized and unrealized gain (loss)
on investments $ 1.60 0.76 (2.28) (4.84) 7.82 1.31 3.09
Total from investment operations $ 1.78 1.17 (1.92) (4.25) 8.26 1.40 3.52
Less distributions from:
Net investment income $ 0.19 0.34 0.45 0.53 0.35 0.11 0.46
Net realized gain from investments $ -- -- 0.09 4.70 3.57 -- 0.31
Total distributions $ 0.19 0.34 0.54 5.23 3.92 0.11 0.77
Net asset value, end of period $ 17.33 15.74 14.91 17.37 26.85 22.51 21.22
TOTAL RETURN(3) % 11.44 8.11 (11.12) (17.50) 40.36 6.62 19.66
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 3,787 4,030 8,626 29,629 56,165 17,537 8,741
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.33 1.36 1.19 1.15 1.25 1.23 1.23
Gross expenses prior to expense
reimbursement(4) % 1.33 1.36 1.19 1.14 1.25 1.23 1.35
Net investment income (loss) after expense
reimbursement(4)(5) % 2.23 2.78 2.23 2.47 1.88 2.04 2.37
Portfolio turnover rate % 80 97 100 145 129 28 138
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Effective May 24, 1999, ING Investments, LLC became the Investment Manager
of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding thededuction of
sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
See Accompanying Notes to Financial Statements.
57
<Page>
ING EQUITY AND BOND FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS Q
----------------------------------------------------------------------------
ELEVEN THREE
SIX MONTHS YEAR YEAR MONTHS YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, MAY 31, MAY 31, JUNE 30, JUNE 30, MARCH 31,
2003 2003 2002 2001(1) 2000 1999(2) 1999
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.63 11.98 13.23 14.94 19.04 18.85 18.48
Income (loss) from investment operations:
Net investment income (loss) $ 0.09 0.28 0.42 0.44 0.54 0.11 0.44
Net realized and unrealized gain (loss)
on investments $ 0.52 (0.38) (1.15) (0.54) (0.57) 0.16 2.50
Total from investment operations $ 0.61 (0.10) (0.73) (0.10) (0.03) 0.27 2.94
Less distributions from:
Net investment income $ 0.19 0.25 0.47 0.47 0.40 0.08 0.50
Net realized gain from investments $ -- -- 0.05 1.14 3.67 -- 2.07
Total distributions $ 0.19 0.25 0.52 1.61 4.07 0.08 2.57
Net asset value, end of period $ 12.05 11.63 11.98 13.23 14.94 19.04 18.85
TOTAL RETURN(3) % 5.32 (0.61) (5.53) (0.70) (0.60) 1.44 17.49
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 334 222 191 373 230 190 176
Ratios to average net assets:
Net expenses after expense
reimbursement(4)(5) % 1.50 1.50 1.40 1.25 1.30 1.25 1.25
Gross expenses prior to expense
reimbursement(4) % 1.63 1.61 1.40 1.46 1.51 1.51 1.63
Net investment income (loss) after expense
reimbursement(4)(5) % 1.55 2.70 3.31 3.61 3.36 2.30 2.41
Portfolio turnover rate % 150 129 145 76 173 63 165
</Table>
(1) The Fund changed its fiscal year end to May 31.
(2) Effective May 24, 1999, ING investments, LLC became the Investment Adviser
of the Fund, concurrently Nicholas-Applegate Capital Management was
appointed as sub-advisor and the Fund changed its year end to June 30.
(3) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(4) Annualized for periods less than one year.
(5) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
See Accompanying Notes to Financial Statements.
58
<Page>
ING REAL ESTATE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period.
<Table>
<Caption>
CLASS I
--------------------------------------------------------------------------
SIX MONTHS PERIOD
ENDED ENDED YEAR ENDED OCTOBER 31,
NOVEMBER 30, MAY 31, -----------------------------------------------
2003 2003(1) 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 11.45 9.98 9.77 9.57 8.24 9.10 11.49
Income (loss) from investment operations:
Net investment income (loss) $ 0.32 0.20 0.60 0.50 0.69 0.49 0.35
Net realized and unrealized gain (loss)
on investments $ 1.73 1.47 0.23 0.27 1.21 (0.80) (1.85)
Total from investment operations $ 2.05 1.67 0.83 0.77 1.90 (0.31) (1.50)
Less distributions from:
Net investment income $ 0.37 0.20 0.62 0.57 0.57 0.55 0.40
Net realized gain from investments $ 0.51 -- -- -- -- -- 0.49
Total distributions $ 0.88 0.20 0.62 0.57 0.57 0.55 0.89
Net asset value, end of period $ 12.62 11.45 9.98 9.77 9.57 8.24 9.10
TOTAL RETURN(2) % 18.25 16.95 8.06 7.88 23.78 3.70 (14.16)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000's) $ 156,620 125,645 97,331 76,188 64,447 55,968 55,617
Ratios to average net assets:
Net expenses after expense
reimbursement(3)(4) % 1.00 1.00 0.98 1.00 1.00 1.00 1.00
Gross expenses prior to expense
reimbursement(3) % 1.12 1.19 0.98 1.03 1.05 1.11 1.17
Net investment income (loss) after expense
reimbursement(3)(4) % 5.35 4.26 4.29 4.84 5.71 5.37 3.29
Portfolio turnover rate % 78 62 106 77 93 67 74
</Table>
(1) On November 4, 2002, pursuant to an Agreement and Plan of Reorganization
dated August 20, 2002, all of the assets and liabilities of the CRA Realty
Shares Portfolio were transferred to the newly created ING Real Estate Fund
in exchange for shares of the ING Real Estate Fund. The financial highlight
information presented for periods prior to November 4, 2002 reflects the
activity of the CRA Realty Shares Portfolio. The ING Real Estate Fund has
adopted a fiscal year end of May 31.
(2) Total return is calculated assuming reinvestment of all dividends and
capital gain distributions at net asset value and excluding the deduction
of sales charges. Total return for less than one year is not annualized.
(3) Annualized for periods less than one year.
(4) The Investment Adviser has agreed to limit expenses, (excluding interest,
taxes, brokerage and extraordinary expenses) subject to possible recoupment
by ING Investments, LLC within three years.
See Accompanying Notes to Financial Statements.
59
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited)
NOTE 1 -- ORGANIZATION
ORGANIZATION. The ING Funds contained within this book are comprised of ING
Equity Trust ("IET"), ING Investment Funds, Inc. ("IIF") and ING Mayflower Trust
("IMT"), all of which are open-end investment management companies registered
under the Investment Company Act of 1940, as amended.
IET is a Massachusetts business trust organized in 1998 with eighteen separate
series (Portfolios). Ten of the Portfolios in this report are: ING Growth
Opportunities Fund ("Growth Opportunities"), ING LargeCap Growth Fund ("LargeCap
Growth"), ING MidCap Opportunities Fund ("MidCap Opportunities"), ING SmallCap
Opportunities Fund ("SmallCap Opportunities"), ING Disciplined LargeCap Fund
("Disciplined LargeCap"), ING MidCap Value Fund ("MidCap Value"), ING SmallCap
Value Fund ("SmallCap Value"), ING Convertible Fund ("Convertible"), ING Equity
and Bond Fund ("Equity and Bond") and ING Real Estate Fund ("Real Estate"). IIF
is a Maryland Corporation organized in 1969 with one Portfolio, ING MagnaCap
Fund ("MagnaCap"). IMT is a Massachusetts business trust organized in 1993 with
two separate series (Portfolios). One of the Portfolios in this report is ING
Growth + Value Fund ("Growth + Value"). The investment objective of each Fund is
described in each Fund's prospectus.
Each Fund offers at least two of the following classes of shares: Class A, Class
B, Class C, Class I, Class M, and Class Q. The separate classes of shares differ
principally in the applicable sales charges (if any), distribution fees,
shareholder servicing fees and transfer agency fees. Shareholders of each class
also bear certain expenses that pertain to that particular class. All
shareholders bear the common expenses of the Fund and earn income from the
portfolio pro rata based on the average daily net assets of each class, without
distinction between share classes. Dividends are determined separately for each
class based on income and expenses allocable to each class. Realized gains are
allocated to each class pro rata based on the net assets of each class on the
date of distribution. No class preferential dividend rights exist. Differences
in per share dividend rates generally results from the relative weighting of pro
rata income and realized gain allocations and from differences in separate class
expenses, including distribution, and shareholder servicing fees. Class B
shares, along with their pro rata reinvested dividend shares, automatically
convert to Class A shares approximately eight years after purchase.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are consistently followed by the
Funds in the preparation of their financial statements. Such policies are in
conformity with accounting principles generally accepted in the United States of
America for investment companies.
A. SECURITY VALUATION. Investments in equity securities traded on a national
securities exchange are valued at the last reported sale price. Portfolio
securities reported by NASDAQ will be valued at NASDAQ official closing
price. Portfolio securities traded on an exchange or NASDAQ for which there
has been no sale and securities traded in the over-the-counter-market are
valued at the mean between the last reported bid and ask prices. All
investments quoted in foreign currencies will be valued daily in U.S.
dollars on the basis of the foreign currency exchange rates prevailing at
that time. Debt securities are valued at bid prices obtained from
independent services or from one or more dealers making markets in the
securities. U.S. Government obligations are valued by using market
quotations or independent pricing services which use prices provided by
market-makers or estimates of market values obtained from yield data
relating to instruments or securities with similar characteristics.
Securities and assets for which market quotations are not readily available
(which may include certain restricted securities which are subject to
limitations as to their sale) are valued at their fair values as determined
in good faith by or under the supervision of the Funds' Board of Directors
("Board"), in accordance with methods that are specifically authorized by
the Board. Securities traded on exchanges, including foreign exchanges,
which close earlier than the time that a Fund calculates its net asset value
may also be valued at their fair values as determined in good faith by or
under the supervision of a Fund's Board, in accordance with methods that are
specifically authorized by the Board. If a significant event which is likely
to impact the value of one or more foreign securities held by a Fund occurs
after the time at which the foreign market for such security(ies) closes but
before the time that the Fund's net asset value is calculated on any
business day, such event may be taken into account in determining the fair
value of such security(ies) at the time the Fund
60
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
calculates its net asset value. For these purposes, significant events after
the close of trading on a foreign market may include, among others,
securities trading in the U.S. and other markets, corporate announcements,
natural and other disasters, and political and other events. Among other
elements of analysis, the Board has authorized the use of one or more
research services to assist with the determination of the fair value of
foreign securities in light of significant events. Research services use
statistical analyses and quantitative models to help determine fair value as
of the time a Fund calculates its net asset value. Unlike the closing price
of a security on an exchange, fair value determinations employ elements of
judgment, and the fair value assigned to a security may not represent the
actual value that a Fund could obtain if it were to sell the security at the
time of the close of the NYSE.
Investments in securities maturing in less than 60 days from the date of
acquisition are valued at amortized cost, which, when combined with accrued
interest, approximates market value.
B. SECURITY TRANSACTIONS AND REVENUE RECOGNITION. Securities transactions are
accounted for on the trade date. Realized gains and losses are reported on
the basis of identified cost of securities sold. Interest income is recorded
on an accrual basis. Dividend income is recorded on the ex-dividend date, or
for certain foreign securities, when the information becomes available to
the funds. Premium amortization and discount accretion are determined by the
effective yield method.
C. FOREIGN CURRENCY TRANSLATION. The books and records of the Funds are
maintained in U.S. dollars. Any foreign currency amounts are translated into
U.S. dollars on the following basis:
(1) Market value of investment securities, other assets and liabilities --
at the exchange rates prevailing at the end of the day.
(2) Purchases and sales of investment securities, income and expenses --
at the rates of exchange prevailing on the respective dates of such
transactions.
Although the net assets and the market values are presented at the foreign
exchange rates at the end of the day, the Funds do not isolate the portion
of the results of operations resulting from changes in foreign exchange
rates on investments from the fluctuations arising from changes in market
prices of securities held. Such fluctuations are included with the net
realized and unrealized gains or losses from investments. For securities
which are subject to foreign withholding tax upon disposition, liabilities
are recorded on the statement of assets and liabilities for the estimated
tax withholding based on the securities' current market value. Upon
disposition, realized gains or losses on such securities are recorded net of
foreign withholding tax. Reported net realized foreign exchange gains or
losses arise from sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise
from changes in the value of assets and liabilities other than investments
in securities at fiscal year end, resulting from changes in the exchange
rate. Foreign security and currency transactions may involve certain
considerations and risks not typically associated with investing in U.S.
companies and the U.S. Government. These risks include but are not limited
to revaluation of currencies and future adverse political and economic
developments which could cause securities and their markets to be less
liquid and prices more volatile than those of comparable U.S. companies and
the U.S. Government.
D. FOREIGN CURRENCY TRANSACTIONS AND FUTURES CONTRACTS. Certain funds may enter
into foreign currency exchange transactions to convert to and from different
foreign currencies and to and from the U.S. dollar in connection with the
planned purchases or sales of securities. The Funds either enter into these
transactions on a spot basis at the spot rate prevailing in the foreign
currency exchange market or use forward foreign currency contracts to
purchase or sell foreign currencies. When the contract is fulfilled or
closed, gains or losses are realized. Until then, the gain or loss is
included in unrealized appreciation or depreciation. Risks may arise upon
entering into forward contracts from the potential inability of
counterparties to meet the
61
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
terms of their forward contracts and from unanticipated movements in the
value of foreign currencies relative to the U.S. dollar.
Each Fund may enter into futures contracts involving foreign currency,
interest rates, securities and security indices, for hedging purposes only.
A futures contract obligates the seller of the contract to deliver and the
purchaser of the contract to take delivery of the type of foreign currency,
financial instrument or security called for in the contract at a specified
future time for a specified price. Upon entering into such a contract, a
Fund is required to deposit and maintain as collateral such initial margin
as required by the exchange on which the contract is traded. Pursuant to the
contract, a Fund agrees to receive from or pay to the broker an amount equal
to the daily fluctuations in the value of the contract. Such receipts or
payments are known as variation margins and are recorded as unrealized gains
or losses by the Fund. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
There were no open futures contracts at November 30, 2003.
E. DISTRIBUTIONS TO SHAREHOLDERS. The Funds record distributions to their
shareholders on ex-dividend date. Each Fund pays dividends, if any, as
follows:
<Table>
<Caption>
ANNUALLY SEMI-ANNUALLY QUARTERLY
-------- ------------- ---------
Growth + MagnaCap Convertible
Value
Growth Equity and
Opportunities Bond
LargeCap Real Estate
Growth
MidCap
Opportunities
SmallCap
Opportunities
Disciplined
LargeCap
MidCap Value
SmallCap Value
</Table>
Each Fund distributes capital gains, to the extent available, annually.
F. FEDERAL INCOME TAXES. It is the policy of the Funds to comply with the
requirements of the Subchapter M of Internal Revenue Code that are
applicable to regulated investment companies and to distribute substantially
all of their net investment income and any net realized capital gains to
their shareholders. Therefore, a federal income tax or excise tax provision
is not required. In addition, by distributing during each calendar year
substantially all of its net investment income and net realized capital
gains, each Fund intends not to be subject to any federal excise tax. The
Board intends to offset any net capital gains with any available capital
loss carryforward until each carryforward has been fully utilized or
expires. In addition, no capital gain distribution shall be made until the
capital loss carryforward has been fully utilized or expires.
G. USE OF ESTIMATES. Management of the Funds has made certain estimates and
assumptions relating to the reporting of assets, liabilities, income, and
expenses to prepare these financial statements in conformity with accounting
principles generally accepted in the United States of America. Actual
results could differ from these estimates.
H. REPURCHASE AGREEMENTS. Each Fund may invest in repurchase agreements only
with government securities dealers recognized by the Board of Governors of
the Federal Reserve System or with member banks of the Federal Reserve
System. Under such agreements, the seller of the security agrees to
repurchase the agreement at a mutually agreed upon time and price. The
resale price is in excess of the purchase price and reflects an agreed upon
interest rate for the period of time the agreement is outstanding. The
period of the repurchase agreements is usually short, from overnight to one
week, while the underlying securities generally have longer maturities. Each
Fund will always receive as collateral securities acceptable to it whose
market value is equal to at least 100% of the carrying amount of the
repurchase agreements, plus accrued interest, being invested by the Fund.
The underlying collateral is valued daily on a mark to market basis to
assure that the value, including accrued interest is at least equal to the
repurchase price. If the seller defaults, a Fund might incur a loss or delay
in the realization of proceeds if the value of the collateral securing the
repurchase agreement declines, and it might incur disposition costs in
liquidating the collateral.
I. OPTIONS CONTRACTS. All Funds may purchase put and call options and may write
(sell) put options and covered call options. The Funds may engage in option
transactions as a hedge against adverse movements in the value of portfolio
holdings or to increase market exposure. Option contracts are valued daily
and unrealized gains or losses are recorded based upon the last sales price
on the principal exchange on which the options are traded. The Funds will
realize a gain or loss upon the expiration or closing of the option
contract. When an option is exercised, the proceeds on sales of the
underlying security for a written call option, the purchase cost of the
security for a written put option, or the cost of the security for a
purchased put or call option is adjusted by the
62
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
amount of premium received or paid. Realized and unrealized gains or losses
on option contracts are reflected in the accompanying financial statements.
The risk in writing a call option is that the Funds give up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Funds may incur a
loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Funds pay a premium
whether or not the option is exercised. Risks may also arise from an
illiquid secondary market or from the inability of counterparties to meet
the terms of the contract.
J. SECURITIES LENDING. Each Fund had the option to temporarily loan up to 30%
of its total assets to brokers, dealers or other financial institutions in
exchange for a negotiated lender's fee. The borrower is required to fully
collateralize the loans with cash, letters of credit or U.S. Government
securities.
K. OFFERING COSTS. Offering costs are capitalized and amortized on a straight
line basis over a period of twelve months.
L. ILLIQUID AND RESTRICTED SECURITIES. Each Fund may invest up to 15% of its
net assets in illiquid securities. Illiquid securities are not readily
marketable. Disposing of illiquid investments may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for
the Funds to sell them promptly at an acceptable price. The Funds also may
invest in restricted securities, which include those sold under Rule 144A of
the Securities Act of 1933 (1933 Act) or securities offered pursuant to
Section 4(2) of the 1933 Act, and/or are subject to legal or contractual
restrictions on resale and generally may not be publicly sold without
registration under the 1933 Act. Restricted securities may be considered
liquid pursuant to procedures adopted by the Board or may be deemed to be
illiquid because they may not be readily marketable. Restricted securities
are valued using market quotations when readily available. In the absence of
market quotations, the illiquid and restricted securities are valued based
upon their fair value determined under procedures approved by the Board.
M. DELAYED DELIVERY TRANSACTIONS. The Funds may purchase or sell securities on
a when-issued or forward commitment basis. The price of the underlying
securities and date when the securities will be delivered and paid for are
fixed at the time the transaction is negotiated. The market value of such is
identified in each Fund's Portfolio of Investments. Losses may arise due to
changes in the market value of the securities or from the inability of
counterparties to meet the terms of the contract. In connection with such
purchases, the Funds are required to segregate liquid assets with the Funds'
custodian sufficient to cover the purchase price.
N. MORTGAGE DOLLAR ROLL TRANSACTIONS. In connection with a Fund's ability to
purchase or sell securities on a when-issued basis, Balanced and Growth and
Income may engage in dollar roll transactions with respect to
mortgage-backed securities issued by Government National Mortgage
Association, Federal National Mortgage Association and Federal Home Loan
Mortgage Corp. In a dollar roll transaction, a Fund sells a mortgage-backed
security to a financial institution, such as a bank or broker/dealer, and
simultaneously agrees to repurchase a substantially similar (i.e., same
type, coupon, and maturity) security from the institution on a delayed
delivery basis at an agreed upon price. The mortgage-backed securities that
are repurchased will bear the same interest rate as those sold, but
generally will be collateralized by different pools of mortgages with
different prepayment histories. The Funds account for dollar roll
transactions as purchases and sales.
NOTE 3 -- INVESTMENT TRANSACTIONS
For the six months ended November 30, 2003, the cost of purchases and proceeds
from the sales of securities, excluding short-term securities, were as follows:
<Table>
<Caption>
PURCHASES SALES
--------- -----
Growth + Value $ 172,612,557 $ 202,309,652
Growth Opportunities 76,284,064 100,954,495
LargeCap Growth 321,771,113 270,738,990
MidCap Opportunities 63,553,558 84,013,823
SmallCap Opportunities 97,085,080 149,574,600
Disciplined LargeCap 108,056,693 115,362,176
MagnaCap 176,618,735 56,250,218
MidCap Value 35,511,803 22,457,079
SmallCap Value 17,557,943 14,185,779
Convertible 146,103,387 144,101,481
Equity and Bond 102,682,899 105,461,783
Real Estate 134,080,020 112,224,070
</Table>
NOTE 4 -- INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES
The Funds entered into an Investment Management Agreement with ING Investments,
LLC (the "Manager", the "Investment Manager" or the "Adviser") a wholly-owned
subsidiary of ING. The investment management agreements compensate the
Investment Manager with a fee, computed daily
63
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 4 -- INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES (CONTINUED)
and payable monthly, based on the average daily net assets of each Fund, at the
following annual rates:
<Table>
<Caption>
AS A PERCENT OF AVERAGE NET ASSETS
----------------------------------
Growth + Value 1.00%
Growth Opportunities 0.95%
LargeCap Growth 0.75% on first $500 million; 0.675%
on next $500 million; and
0.65% in excess of $1 billion
MidCap Opportunities 1.00%
SmallCap Opportunities 1.00%
Disciplined LargeCap 0.70%
MagnaCap 1.00% on first $30 million;
0.75% on next $220 million; 0.625%
on next $200 million; and
0.50% in excess of $450 million
MidCap Value 1.00%
SmallCap Value 1.00%
Convertible 0.75% on first $500 million; 0.675%
on next $500 million; and
0.65% in excess of $1 billion
Equity and Bond 0.75% on first $500 million; 0.675%
on next $500 million; and
0.65% in excess of $1 billion
Real Estate 0.70%
</Table>
Aeltus Investment Management, Inc. ("Aeltus"), a registered investment advisor,
serves as Sub-Adviser to the Growth Opportunities Fund, MidCap Opportunities
Fund, SmallCap Opportunities Fund, Disciplined LargeCap Fund, MagnaCap Fund,
Convertible Fund and the Equity and Bond Fund pursuant to a subadvisory
agreement between the Investment Manager and Aeltus. Prior to September 2, 2003,
the Investment Manager was responsible for the day-to-day management of these
Funds. Brandes Investment Partners, LP ("Brandes"), a registered investment
advisor, serves as Sub-Adviser to the MidCap Value and SmallCap Value Funds
pursuant to a subadvisory agreement between the Investment Manager and Brandes.
Effective June 2, 2003, Wellington Management Company, LLP became the
Sub-Adviser to the LargeCap Growth Fund.
Clarion CRA Securities, L.P. ("CRA"), a registered investment advisor, became
the Sub-Adviser to the Real Estate Fund pursuant a subadvisory agreement between
the Investment Manager and CRA.
ING Funds Services, LLC (the "Administrator" or "IFS"), serves as administrator
to each Fund except Financial Services and MagnaCap. The Funds pay the
Administrator a fee calculated at an annual rate of 0.10% of each Funds' average
daily net assets.
Financial Services and MagnaCap have entered into a service agreement with IFS
whereby IFS will act as Shareholder Service Agent for the Funds. The agreement
provides that IFS will be compensated for incoming and outgoing shareholder
telephone calls and letters, and all reasonable out-of-pocket expenses incurred
in connection with the performance of such services. Prior to March 1, 2002, IFS
acted as Shareholder Service Agent for LargeCap Growth, Convertible and Equity
and Bond.
Growth + Value, Growth Opportunities, MidCap Opportunities, SmallCap
Opportunities and Disciplined LargeCap also pay IFS an annual shareholder
account servicing fee of $5.00, payable semi-annually, for each account of
beneficial owners of shares.
NOTE 5 -- DISTRIBUTION AND SERVICE FEES
Each share class of the Funds (except as noted below) has adopted a Plan
pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plans"), whereby ING Funds
Distributor, LLC (the "Distributor") is reimbursed or compensated (depending on
the class of shares) by the Funds for expenses incurred in the distribution of
each Fund's shares ("Distribution Fees"). Pursuant to the 12b-1 Plans, the
Distributor is entitled to a payment each month to reimburse or compensate
expenses incurred in the distribution and promotion of each Fund's shares,
including expenses incurred in printing prospectuses and reports used for sales
purposes, expenses incurred in preparing and printing sales literature and other
such distribution related expenses, including any distribution or shareholder
servicing fees ("Service Fees") paid to securities dealers who have executed a
distribution agreement with the Distributor. Under the 12b-1 Plans, each class
of shares of the Fund pays the Distributor a combined Distribution and Service
Fee based on average daily net assets at the following rates:
<Table>
<Caption>
CLASS A CLASS B CLASS C CLASS I CLASS M CLASS Q
------- ------- ------- ------- ------- -------
Growth + Value 0.30% 1.00% 1.00% N/A N/A 0.25%
Growth Opportunities 0.30 1.00 1.00 N/A N/A 0.25
LargeCap Growth 0.35 1.00 1.00 N/A N/A 0.25
MidCap Opportunities 0.30 1.00 1.00 N/A N/A 0.25
SmallCap Opportunities 0.30 1.00 1.00 N/A N/A 0.25
Disciplined LargeCap 0.30 1.00 1.00 N/A N/A 0.25
MagnaCap 0.30 1.00 1.00 N/A 0.75% 0.25
MidCap Value 0.25 1.00 1.00 N/A N/A 0.25
SmallCap Value 0.25 1.00 1.00 N/A N/A 0.25
Convertible 0.35 1.00 1.00 N/A N/A 0.25
Equity and Bond 0.35 1.00 1.00 N/A N/A 0.25
Real Estate 0.25 1.00 1.00 N/A N/A 0.25
</Table>
64
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 5 -- DISTRIBUTION AND SERVICE FEES (CONTINUED)
Beginning March 1, 2001, the Distributor agreed to waive 0.10% of the
Distribution fee for the Tax Efficient Equity Fund for Class A only.
For the six months ended November 30, 2003, the Distributor has retained
$122,604 as sales charges from the proceeds of Class A Shares sold, $2,269
and $21,295 from the proceeds of Class A Shares and Class C Shares redeemed,
respectively and $25 from the proceeds of Class M Shares sold.
NOTE 6-- OTHER TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
At November 30, 2003, the Funds had the following amounts recorded in payable to
affiliates on the accompanying Statements of Assets and Liabilities (see Notes
4, 5 and 7):
<Table>
<Caption>
ACCRUED ACCRUED
INVESTMENT ACCRUED DISTRIBUTION
MANAGEMENT ADMINISTRATIVE AND SERVICE
FEES AND SERVICE FEES FEES TOTAL
---------- ---------------- ------------ -----
Growth + Value $ 174,994 $ 17,499 $ 210,636 $ 403,129
Growth
Opportunities 138,362 14,564 116,640 269,566
LargeCap
Growth 155,288 20,704 142,608 318,600
MidCap
Opportunities 147,027 14,254 139,742 301,023
SmallCap
Opportunities 246,578 24,657 228,478 499,713
Disciplined
LargeCap 47,243 6,749 56,949 110,941
MagnaCap 232,194 3,625 140,125 375,944
MidCap Value 49,311 4,853 33,110 87,274
SmallCap Value 37,461 3,746 26,353 67,560
Convertible 130,615 17,411 140,141 288,167
Equity and Bond 44,247 5,899 38,985 89,131
Real Estate 94,339 13,488 3,542 111,369
</Table>
At November 30, 2003, certain non-affiliated individuals and entities owned
separately the following percentage of the Real Estate Fund: 22.76% and 5.78%.
Also at November 30, 2003, one shareholder owned 6.15% and 6.13% of the Growth +
Value and Disciplined LargeCap Funds, respectively. Investment activities of
these shareholders could have a material impact on the Funds.
NOTE 7 -- EXPENSE LIMITATIONS
For the following Funds, the Investment Manager has voluntarily agreed to limit
expenses, excluding interest, taxes, brokerage and extraordinary expenses to the
levels listed below:
<Table>
<Caption>
CLASS A CLASS B CLASS C CLASS I CLASS Q CLASS T
------- ------- ------- ------- ------- -------
LargeCap
Growth(1) 1.45% 2.10% 2.10% 1.10% 1.35% N/A
MidCap
Opportunities(2) 1.50% 2.20% 2.20% 1.20% 1.35% N/A
MidCap Value 1.75% 2.50% 2.50% 1.50% 1.75% N/A
SmallCap Value 1.75% 2.50% 2.50% 1.50% 1.75% N/A
Convertible 1.60% 2.25% 2.25% N/A 1.50% N/A
Equity and
Bond 1.60% 2.25% 2.25% N/A 1.50% 2.00%
Real Estate 1.45% 2.20% 2.20% 1.00% 1.25% N/A
</Table>
- ----------
(1) Prior to June 2, 2003, the expense limitation rates for Class A, Class B,
Class C, Class I and Class Q were 1.60%, 2.25%, 2.25%, 1.25%, and 1.50%,
respectively.
(2) Prior to January 1, 2002, there was no expense limitation for the Fund.
Each Fund will at a later date reimburse the Investment Manager for expenses
waived during the previous 36 months, but only if, after such reimbursement, the
Fund's expense ratio does not exceed the percentage described above. Waived and
reimbursed fees and any recoupment by the Investment Manager of such waived and
reimbursed fees are reflected on the accompanying Statements of Operations for
each Fund.
Outstanding reimbursement balances due to the Funds, if any, under their
respective expense limitation agreements are reflected in Reimbursement Due from
Manager on the accompanying Statements of Assets and Liabilities.
As of November 30, 2003, the cumulative amounts of reimbursed fees that are
subject to possible recoupment by the Investment Manager are as follows:
<Table>
LargeCap Growth $ 629,083
MidCap Opportunities 1,044,439
MidCap Value 258,265
SmallCap Value 238,490
Real Estate 93,322
</Table>
65
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 8 -- LINE OF CREDIT
All of the Funds included in this report, in addition to certain other funds
managed by the Adviser, have entered into an unsecured committed revolving line
of credit agreement (the "Credit Agreement") with The Bank of New York for an
aggregate amount of $125,000,000. The proceeds may be used to: (1) temporarily
finance the purchase and sale of securities; (2) finance the redemption of
shares of an investor in the Funds; and (3) enable the Funds to meet other
emergency expenses as defined in the Credit Agreement. The Funds to which the
line of credit is available pay a commitment fee equal to 0.09% per annum on the
daily unused portion of the committed line amount payable quarterly in arrears.
At November 30, 2003, the Funds did not have any loans outstanding under the
line of credit.
NOTE 9 -- CAPITAL SHARES
Transactions in capital shares and dollars were as follows:
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
---------------------------------- -----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
GROWTH + VALUE (NUMBER OF SHARES)
Shares sold 431,852 1,525,553 346,658 775,059
Shares redeemed (1,992,059) (4,091,241) (1,788,877) (6,243,894)
--------------- --------------- --------------- ---------------
Net decrease in shares outstanding (1,560,207) (2,565,688) (1,442,219) (5,468,835)
=============== =============== =============== ===============
GROWTH + VALUE ($)
Shares sold $ 5,675,854 $ 12,691,301 $ 3,426,213 $ 5,705,478
Shares redeemed (18,840,447) (32,447,566) (15,372,586) (47,161,811)
--------------- --------------- --------------- ---------------
Net decrease $ (13,164,593) $ (19,756,265) $ (11,946,373) $ (41,456,333)
=============== =============== =============== ===============
<Caption>
CLASS C SHARES CLASS Q SHARES
---------------------------------- -----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
GROWTH + VALUE (NUMBER OF SHARES)
Shares sold 198,117 555,346 -- 2,650
Shares redeemed (1,251,557) (4,193,623) (1,592) (15,845)
--------------- --------------- --------------- ---------------
Net decrease in shares outstanding (1,053,440) (3,638,277) (1,592) (13,195)
=============== =============== =============== ===============
GROWTH + VALUE ($)
Shares sold $ 2,567,439 $ 4,087,044 $ -- $ 21,001
Shares redeemed (11,250,119) (31,396,649) (12,764) (113,542)
--------------- --------------- --------------- ---------------
Net decrease $ (8,682,680) $ (27,309,605) $ (12,764) $ (92,541)
=============== =============== =============== ===============
<Caption>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------ ------------ ------------ ------------ ------------ ------------
GROWTH OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 1,078,846 978,264 147,016 237,656 98,829 180,590
Shares redeemed (1,787,332) (3,247,365) (544,626) (2,452,695) (329,588) (1,551,613)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease in shares outstanding (708,486) (2,269,101) (397,610) (2,215,039) (230,759) (1,371,023)
============ ============ ============ ============ ============ ============
GROWTH OPPORTUNITIES ($)
Shares sold $ 12,526,412 $ 10,243,050 $ 1,887,581 $ 2,305,753 $ 1,308,909 $ 1,773,541
Shares redeemed (21,023,755) (34,151,206) (6,289,149) (24,220,971) (3,891,465) (15,424,361)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease $ (8,497,343) $(23,908,156) $ (4,401,568) $(21,915,218) $ (2,582,556) $(13,650,820)
============ ============ ============ ============ ============ ============
</Table>
66
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS I SHARES CLASS Q SHARES CLASS T SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------ ------------ ------------ ------------ ------------ ------------
GROWTH OPPORTUNITIES (NUMBER OF SHARES)
Shares sold -- 53 -- -- -- --
Shares redeemed (115) (271,522) -- (517) (719,377) (327,604)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease in shares outstanding (115) (271,469) -- (517) (719,377) (327,604)
============ ============ ============ ============ ============ ============
GROWTH OPPORTUNITIES ($)
Shares sold $ -- $ 607 $ -- $ -- $ -- $ --
Shares redeemed (1,607) (2,824,023) -- (5,708) (7,397,544) (3,256,317)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease $ (1,607) $ (2,823,416) $ -- $ (5,708) $ (7,397,544) $ (3,256,317)
============ ============ ============ ============ ============ ============
</Table>
- ----------
(1) Effective June 2, 2003, Class "T" Shares converted into the corresponding
"A" Shares within this Fund.
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
LARGECAP GROWTH (NUMBER OF SHARES)
Shares sold 2,379,483 1,731,633 1,719,448 408,627
Shares redeemed (772,500) (2,830,849) (628,817) (2,383,990)
--------------- --------------- --------------- ---------------
Net decrease in shares outstanding 1,606,983 (1,099,216) 1,090,631 (1,975,363)
=============== =============== =============== ===============
LARGECAP GROWTH ($)
Shares sold $ 36,512,625 $ 23,912,505 $ 26,208,282 $ 5,315,977
Shares redeemed (11,853,996) (38,399,684) (9,498,516) (31,662,290)
--------------- --------------- --------------- ---------------
Net decrease $ 24,658,629 $ (14,487,179) $ 16,709,766 $ (26,346,313)
=============== =============== =============== ===============
<Caption>
CLASS C SHARES CLASS I SHARES CLASS Q SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------ ------------ ------------ ------------ ------------ ------------
LARGECAP GROWTH (NUMBER OF SHARES)
Shares sold 1,216,567 224,913 158,278 289,678 191,072 133,122
Shares redeemed (322,731) (1,291,661) (59,401) (325,759) (152,571) (706,874)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in shares
outstanding 893,836 (1,066,748) 98,877 (36,081) 38,501 (573,752)
============ ============ ============ ============ ============ ============
LARGECAP GROWTH ($)
Shares sold $ 18,266,222 $ 2,920,608 $ 2,491,370 $ 3,894,597 $ 2,964,983 $ 1,768,245
Shares redeemed (4,880,113) (17,091,851) (925,751) (4,467,218) (2,417,171) (9,611,239)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) $ 13,386,109 $(14,171,243) $ 1,565,619 $ (572,621) $ 547,812 $ (7,842,994)
============ ============ ============ ============ ============ ============
</Table>
67
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
MIDCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 489,280 992,635 395,051 266,036
Shares redeemed (648,668) (2,775,471) (685,136) (2,287,890)
--------------- --------------- --------------- ---------------
Net decrease in shares outstanding (159,388) (1,782,836) (290,085) (2,021,854)
=============== =============== =============== ===============
MIDCAP OPPORTUNITIES ($)
Shares sold $ 5,307,248 $ 9,131,612 $ 4,225,057 $ 2,389,023
Shares redeemed (7,048,445) (25,266,178) (7,201,652) (20,376,679)
--------------- --------------- --------------- ---------------
Net decrease $ (1,741,197) $ (16,134,566) $ (2,976,595) $ (17,987,656)
=============== =============== =============== ===============
<Caption>
CLASS C SHARES CLASS I SHARES CLASS Q SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------ ------------ ------------ ------------ ------------ ------------
MIDCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 223,533 186,646 8,054 204,879 249,320 441,646
Shares redeemed (727,230) (2,602,475) (925,842) (2,687,084) (321,135) (550,075)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease in shares outstanding (503,697) (2,415,829) (917,788) (2,482,205) (71,815) (108,429)
============ ============ ============ ============ ============ ============
MIDCAP OPPORTUNITIES ($)
Shares sold $ 2,345,870 $ 1,634,606 $ 89,457 $ 1,868,172 $ 2,579,181 $ 4,051,242
Shares redeemed (7,627,627) (23,006,547) (10,171,439) (24,766,277) (3,339,336) (5,011,695)
------------ ------------ ------------ ------------ ------------ ------------
Net decrease $ (5,281,757) $(21,371,941) $(10,081,982) $(22,898,105) $ (760,155) $ (960,453)
============ ============ ============ ============ ============ ============
<Caption>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
---------------------------- ---------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------- ------------- ------------- ------------- ------------- -------------
SMALLCAP OPPORTUNITIES (NUMBER OF
SHARES)
Shares sold 1,165,264 2,959,197 194,878 297,293 61,384 182,010
Shares redeemed (2,421,909) (4,076,167) (683,379) (2,120,010) (574,988) (1,741,349)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) in shares
outstanding (1,256,645) (1,116,970) (488,501) (1,822,717) (513,604) (1,559,339)
============= ============= ============= ============= ============= =============
SMALLCAP OPPORTUNITIES ($)
Shares sold $ 23,934,747 $ 53,600,429 $ 3,893,435 $ 4,862,420 $ 1,362,436 $ 2,953,005
Shares redeemed (47,514,775) (73,261,386) (13,203,004) (35,339,503) (11,079,969) (29,151,596)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) $ (23,580,028) $ (19,660,957) $ (9,309,569) $ (30,477,083) $ (9,717,533) $ (26,198,591)
============= ============= ============= ============= ============= =============
</Table>
68
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS T SHARES CLASS I SHARES CLASS Q SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------ ------------ ------------ ------------ ------------ ------------
SMALLCAP OPPORTUNITIES (NUMBER OF SHARES)
Shares sold 31,584 -- 78,915 167,562 440 18,182
Shares redeemed (135,877) (110,464) (62,264) (146,229) (16,798) (120,129)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in shares
outstanding (104,293) (110,464) 413,779 21,333 (16,358) (101,947)
============ ============ ============ ============ ============ ============
SMALLCAP OPPORTUNITIES ($)
Shares sold $ 1,010,979 $ -- $ 1,691,207 $ 2,851,630 $ 11,627 $ 346,249
Shares redeemed (2,788,141) (1,899,687) (1,277,428) (2,570,785) (342,876) (2,150,100)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) $ (1,777,162) $ (1,899,687) $ 413,779 $ 280,845 $ (331,249) $ (1,803,851)
============ ============ ============ ============ ============ ============
<Caption>
CLASS A SHARES CLASS B SHARES
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
DISCIPLINED LARGECAP (NUMBER OF SHARES)
Shares sold 48,459 1,293,110 190,514 179,270
Shares redeemed (311,276) (1,518,287) (556,290) (1,981,016)
--------------- --------------- --------------- ---------------
Net decrease in shares outstanding (262,817) (225,177) (365,776) (1,801,746)
=============== =============== =============== ===============
DISCIPLINED LARGECAP ($)
Shares sold $ 176,664 $ 8,987,874 $ 1,532,513 $ 1,245,114
Shares redeemed (2,251,210) (10,542,573) (4,385,563) (13,755,648)
--------------- --------------- --------------- ---------------
Net decrease $ (2,074,546) $ (1,554,699) $ (2,853,050) $ (12,510,534)
=============== =============== =============== ===============
<Caption>
CLASS C SHARES CLASS I SHARES
--------------- --------------- --------------- ---------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
DISCIPLINED LARGECAP (NUMBER OF SHARES)
Shares sold 22,962 77,832 -- 466
Shares redeemed (368,353) (1,596,429) -- (10)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares
outstanding (345,391) (1,518,597) -- 456
=============== =============== =============== ===============
DISCIPLINED LARGECAP ($)
Shares sold $ 276,908 $ 548,074 $ -- $ 3,306
Shares redeemed (2,948,147) (10,962,505) -- (73)
--------------- --------------- --------------- ---------------
Net increase (decrease) $ (2,671,239) $ (10,414,431) $ -- $ 3,233
=============== =============== =============== ===============
</Table>
69
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
---------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------- ------------- ------------ ------------- ------------ ------------
MAGNACAP (NUMBER OF SHARES)
Shares sold 626,962 1,637,596 287,562 342,031 105,359 455,850
Shares issued in merger 14,679,883 -- 443,560 -- 235,540 --
Dividends reinvested 191,553 58,790 -- 52 -- 20
Shares redeemed (1,554,049) (4,837,146) (743,285) (2,535,432) (94,691) (471,682)
------------- ------------- ------------ ------------- ------------ ------------
Net increase (decrease) in shares
outstanding 13,944,349 (3,140,760) (12,163) (2,193,349) 246,208 (15,812)
============= ============= ============ ============= ============ ============
MAGNACAP ($)
Shares sold $ 5,722,091 $ 13,316,165 $ 2,801,596 $ 2,679,550 $ 1,242,412 $ 3,661,386
Shares issued in merger 131,292,274 -- 4,106,720 -- 2,182,354 --
Dividends reinvested 1,771,341 471,273 -- 407 -- 174
Shares redeemed (14,314,149) (39,584,790) (6,582,012) (20,001,817) (833,287) (3,860,761)
------------- ------------- ------------ ------------- ------------ ------------
Net increase (decrease) $ 124,471,557 $ (25,797,352) $ 326,304 $ (17,321,860) $ 2,591,479 $ (199,201)
============= ============= ============ ============= ============ ============
<Caption>
CLASS M SHARES CLASS Q SHARES CLASS I SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------ ------------ ------------ ------------ ------------ ------------
MAGNACAP (NUMBER OF SHARES)
Shares sold 24,957 19,464 -- -- -- 777
Shares issued in merger -- -- 807 -- 2 --
Dividends reinvested 506 -- 4,830 4,708 11 --
Shares redeemed (254,975) (374,176) (847,174) (2,564) (2) --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in shares
outstanding (229,512) (354,712) (841,537) 2,144 11 777
============ ============ ============ ============ ============ ============
MAGNACAP ($)
Shares sold $ 219,676 $ 155,322 $ -- $ -- $ -- $ 6,557
Shares issued in merger -- -- 7,766 -- 18 --
Dividends reinvested 4,431 -- 40,556 37,713 101 --
Shares redeemed (2,267,097) (3,054,885) (7,709,767) (38,330) (18) --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) $ (2,042,990) $ (2,899,563) $ (7,661,445) $ (617) $ 101 $ 6,557
============ ============ ============ ============ ============ ============
</Table>
70
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES
--------------- --------------- --------------- ---------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
MIDCAP VALUE (NUMBER OF SHARES)
Shares sold 1,020,618 1,049,073 619,320 818,080
Dividends reinvested -- 34,385 -- 18,033
Shares redeemed (255,071) (1,749,286) (132,498) (507,980)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares
outstanding 765,547 (665,828) 486,822 328,133
=============== =============== =============== ===============
MIDCAP VALUE ($)
Shares sold $ 9,750,292 $ 7,733,617 $ 5,878,403 $ 6,257,727
Dividends reinvested -- 232,444 -- 121,903
Shares redeemed (2,362,174) (11,804,691) (1,223,218) (3,593,419)
--------------- --------------- --------------- ---------------
Net increase (decrease) $ 7,388,118 $ (3,838,630) $ 4,655,185 $ 2,786,211
=============== =============== =============== ===============
<Caption>
CLASS C SHARES CLASS I SHARES CLASS Q SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------ ------------ ------------ ------------ ------------ ------------
MIDCAP VALUE (NUMBER OF SHARES)
Shares sold 505,356 822,471 33,437 21,374 -- 550
Dividends reinvested -- 13,972 -- 562 -- 42
Shares redeemed (280,390) (341,110) (327) (5,297) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase in shares outstanding 224,966 495,333 33,110 16,639 -- 592
============ ============ ============ ============ ============ ============
MIDCAP VALUE ($)
Shares sold $ 4,846,501 $ 6,239,930 $ 307,137 $ 154,508 $ -- $ 4,534
Dividends reinvested -- 94,463 -- 3,799 -- 285
Shares redeemed (2,473,030) (2,367,968) (2,949) (36,094) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase $ 2,373,471 $ 3,966,425 $ 304,188 $ 122,213 $ -- $ 4,819
============ ============ ============ ============ ============ ============
<Caption>
CLASS A SHARES CLASS B SHARES
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
SMALL CAP VALUE (NUMBER OF SHARES)
Shares sold 401,351 746,668 298,953 490,662
Dividends reinvested 83,900 16,962 55,029 6,823
Shares redeemed (155,622) (1,197,761) (111,490) (364,790)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares
outstanding 329,629 (434,131) 242,492 132,695
=============== =============== =============== ===============
SMALL CAP VALUE ($)
Shares sold $ 4,583,685 $ 6,815,426 $ 3,335,227 $ 4,485,147
Dividends reinvested 940,522 145,698 611,375 58,605
Shares redeemed (1,683,176) (10,467,147) (1,203,813) (3,120,196)
--------------- --------------- --------------- ---------------
Net increase (decrease) $ 3,841,031 $ (3,506,023) $ 2,742,789 $ 1,423,556
=============== =============== =============== ===============
</Table>
71
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS C SHARES CLASS I SHARES CLASS Q SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------ ------------ ------------ ------------ ------------ ------------
SMALL CAP VALUE (NUMBER OF SHARES)
Shares sold 350,224 566,589 6,783 30,646 -- --
Dividends reinvested 50,521 6,643 1,983 564 4 --
Shares redeemed (193,848) (174,091) (362) (10,123) -- (695)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in shares
outstanding 206,897 399,141 8,404 21,087 4 (695)
============ ============ ============ ============ ============ ============
SMALL CAP VALUE ($)
Shares sold $ 3,960,905 $ 5,189,793 $ 74,578 $ 286,003 $ -- $ --
Dividends reinvested 560,781 57,003 22,291 4,835 49 --
Shares redeemed (2,130,817) (1,484,104) (3,887) (78,363) -- (7,606)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) $ 2,390,869 $ 3,762,692 $ 92,982 $ 212,475 $ 49 $ (7,606)
============ ============ ============ ============ ============ ============
<Caption>
CLASS A SHARES CLASS B SHARES
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
CONVERTIBLE (NUMBER OF SHARES)
Shares sold 761,267 538,399 334,245 421,161
Dividends reinvested 27,982 51,808 23,551 41,633
Shares redeemed (473,546) (1,397,320) (502,882) (1,662,300)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares
outstanding 315,703 (807,113) (145,086) (1,199,506)
=============== =============== =============== ===============
CONVERTIBLE ($)
Shares sold $ 12,627,379 $ 8,104,116 $ 6,191,468 $ 6,866,145
Dividends reinvested 460,270 762,272 424,608 674,288
Shares redeemed (7,890,801) (20,483,502) (9,266,163) (26,789,834)
--------------- --------------- --------------- ---------------
Net increase (decrease) $ 5,196,848 $ (11,617,114) $ (2,650,087) $ (19,249,401)
=============== =============== =============== ===============
</Table>
72
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS C SHARES CLASS Q SHARES
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
CONVERTIBLE (NUMBER OF SHARES)
Shares sold 318,526 283,725 12,883 17,167
Dividends reinvested 18,668 32,094 2,508 8,275
Shares redeemed (349,374) (1,478,629) (52,905) (347,993)
--------------- --------------- --------------- ---------------
Net decrease in shares outstanding (12,180) (1,162,810) (37,514) (322,551)
=============== =============== =============== ===============
CONVERTIBLE ($)
Shares sold $ 5,521,588 $ 4,341,342 $ 210,012 $ 251,286
Dividends reinvested 314,461 485,833 40,024 117,940
Shares redeemed (6,068,021) (22,218,447) (854,367) (4,929,175)
--------------- --------------- --------------- ---------------
Net decrease $ (231,972) $ (17,391,272) $ (604,331) $ (4,559,949)
=============== =============== =============== ===============
<Caption>
CLASS A SHARES CLASS B SHARES
---------------------------------- ----------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003
--------------- --------------- --------------- ---------------
EQUITY AND BOND (NUMBER OF SHARES)
Shares sold 610,750 804,559 198,592 235,194
Dividends reinvested 38,995 87,922 13,657 20,392
Shares redeemed (316,572) (2,874,377) (429,407) (926,352)
--------------- --------------- --------------- ---------------
Net increase (decrease) in shares
outstanding 333,173 (1,981,896) (217,158) (670,766)
=============== =============== =============== ===============
EQUITY AND BOND ($)
Shares sold $ 7,372,632 $ 8,696,083 $ 2,660,027 $ 2,763,564
Dividends reinvested 458,409 945,153 172,958 237,706
Shares redeemed (3,901,701) (31,480,050) (5,632,863) (10,795,160)
--------------- --------------- --------------- ---------------
Net increase (decrease) $ 3,929,340 $ (21,838,814) $ (2,799,878) $ (7,793,890)
=============== =============== =============== ===============
<Caption>
CLASS C SHARES CLASS Q SHARES CLASS T SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003 2003 2003 2003 2003
------------ ------------ ------------ ------------ ------------ ------------
EQUITY AND BOND (NUMBER OF SHARES)
Shares sold 107,682 151,062 14,880 5,355 -- 666
Dividends reinvested 11,415 16,285 379 404 -- 5,021
Shares redeemed (165,493) (453,636) (6,690) (2,579) (261,871) (96,290)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in shares
outstanding (46,396) (286,289) 8,569 3,180 (261,871) (90,603)
============ ============ ============ ============ ============ ============
EQUITY AND BOND ($)
Shares sold $ 1,223,445 $ 1,566,442 $ 173,444 $ 56,544 $ -- $ 7,881
Dividends reinvested 128,242 168,388 4,429 4,292 -- 58,222
Shares redeemed (1,865,922) (4,682,884) (78,989) (27,501) (3,302,194) (1,124,406)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) $ 837,452 $ (2,948,054) $ 98,884 $ 33,335 $ (3,302,194) $ (1,058,303)
============ ============ ============ ============ ============ ============
</Table>
73
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 9 -- CAPITAL SHARES (CONTINUED)
<Table>
<Caption>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
--------------------------- --------------------------- ---------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
2003 2003(1) 2003 2003(2) 2003 2003(3)
------------ ------------ ------------ ------------ ------------ ------------
REAL ESTATE (NUMBER OF SHARES)
Shares sold 469,919 94,587 55,600 16,002 200,117 13,845
Dividends reinvested 27,082.00 341 2,283 28 8,763 7
Shares redeemed (79,606) (6,170) (421) (2,596) (42,361) --
------------ ------------ ------------ ------------ ------------ ------------
Net increase in shares outstanding 417,395 88,758 57,462 13,434 166,519 13,852
============ ============ ============ ============ ============ ============
REAL ESTATE ($)
Shares sold $ 4,563,688 $ 1,008,855 $ 671,496 $ 165,222 $ 2,406,837 $ 156,401
Dividends reinvested 323,153 3,536 27,387 294 107,569 74
Shares redeemed -- (64,742) (4,979) (26,513) (525,634) --
------------ ------------ ------------ ------------ ------------ ------------
Net increase $ 4,886,841 $ 947,649 $ 693,904 $ 139,003 $ 1,988,772 $ 156,475
============ ============ ============ ============ ============ ============
</Table>
- ----------
(1) Commenced offering of shares on December 20, 2002.
(2) Commenced offering of shares on November 20, 2002.
(3) Commenced offering of shares on January 17, 2003.
<Table>
<Caption>
CLASS I SHARES
------------------------------------------
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
NOVEMBER 30, MAY 31, OCTOBER 31,
2003 2003(1) 2002(2)(3)
------------ ------------ ------------
REAL ESTATE (NUMBER OF SHARES)
Shares sold 1,795,165 2,062,228 2,943
Dividends reinvested 577,473 115,070 343
Shares redeemed (936,769) (962,686) (1,331)
------------ ------------ ------------
Net increase in shares outstanding 1,435,869 1,214,612 1,955
============ ============ ============
REAL ESTATE ($)
Shares sold $ 21,312,932 $ 21,890,930 $ 31,057
Dividends reinvested 7,090,849 1,216,742 3,751
Shares redeemed (11,177,422) (10,000,608) (14,352)
------------ ------------ ------------
Net increase $ 17,226,359 $ 13,107,064 $ 20,456
============ ============ ============
</Table>
- ----------
(1) Changed its fiscal year end to May 31.
(2) Reflects history of a predecessor mutual fund (see Note 1)
(3) Dollar amounts in thousands.
NOTE 10 -- SECURITIES LENDING
Under an agreement with Bank of New York
("BNY"), the Funds can lend their securities to approved brokers, dealers and
other financial institutions. Loans are collateralized by cash and U.S.
Government securities. The collateral must be in an amount equal to at least
105% of the market value of non-U.S. securities loaned and 102% of the market
value of U.S. securities loaned. The cash collateral received is invested in
approved investments as defined in the Securities Lending Agreement with BNY
(the "Agreement"). The cash collateral received is reflected on the Statement of
Assets and Liabilities as Cash collateral for securities loaned. Generally, in
the event of counterparty default, the Funds have the right to use the
collateral to offset losses incurred. The Agreement contains certain guarantees
by BNY in the event of counterparty default and/or a borrower's failure to
return a loaned security, however there would be a potential loss to the Funds
in the event the Funds are delayed or prevented from exercising their right to
dispose of the collateral. The Funds bear the risk of loss with respect to the
investment of collateral. Engaging in securities lending could have a leveraging
effect, which may intensify the credit,
74
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 10 -- SECURITIES LENDING (CONTINUED)
market and other risks associated with investing in a Fund. At November 30,
2003, the Funds had securities on loan with the following market values:
<Table>
<Caption>
VALUE OF
SECURITIES VALUE OF
LOANED COLLATERAL
------------- -------------
Growth + Value $ 57,447,411 $ 58,996,743
LargeCap Growth 57,570,070 59,067,406
MidCap Opportunities 46,618,611 47,739,843
SmallCap Opportunities 72,495,947 74,561,535
Disciplined LargeCap 531,895 544,335
MagnaCap 68,339,628 69,837,027
MidCap Value 10,233,244 10,703,414
SmallCap Value 6,698,302 7,076,010
Convertible 55,005,232 56,440,813
Real Estate 2,330,941 2,353,876
</Table>
NOTE 11 -- WHEN ISSUED SECURITIES
The Equity and Bond Fund, at times, may purchase FNMA/GNMA certificates on a
delayed delivery, forward or when-issued basis with payment and delivery often
taking place a month or more after the initiation of the transaction. It is the
Fund's policy to record when-issued FNMA/GNMA certificates (and the
corresponding obligation to pay for the securities) at the time the purchase
commitment becomes fixed -- generally on the trade date. It is also the Fund's
policy to segregate assets to cover its commitments for when-issued securities
on trade date.
NOTE 12 -- FEDERAL INCOME TAXES
Dividends paid by the Funds from net investment income and distributions of net
realized short-term capital gains are, for federal income tax purposes, taxable
as ordinary income to shareholders. The tax composition of dividends and
distributions to shareholders for six months ended November 30, 2003 were as
follows:
<Table>
<Caption>
ORDINARY LONG-TERM RETURN
INCOME CAPITAL GAINS OF CAPITAL
------------ ------------- ------------
MagnaCap $ 2,104,857 $ -- $ --
SmallCap Value -- 2,287,778 --
Convertible 1,968,913 -- --
Equity and Bond 1,041,843 -- --
Real Estate 4,485,166 6,014,297 --
</Table>
The tax composition of dividends and distributions to shareholders for year
ended May 31, 2003 was as follows:
<Table>
<Caption>
ORDINARY LONG-TERM RETURN
INCOME CAPITAL GAINS OF CAPITAL
------------ ------------- ------------
LargeCap Growth $ 39,544 $ -- $ --
SmallCap Opportunities -- 12,207,533 --
Large Company Value 667,555 2,912,638 561,447
MagnaCap 1,362,303 57,821,108 --
Convertible 5,995,821 1,501,596 --
Equity and Bond 4,225,295 143,651 --
Real Estate(1)(2) 4,948,496 -- 282,791
</Table>
The amount of distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations, which
may differ from accounting principles generally accepted in the United States of
America. These "book/tax" differences are either considered temporary or
permanent in nature. Key differences are the treatment of short-term capital
gains, foreign currency transactions, wash sale deferrals and other differences.
To the extend that these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassifications. To the extent
distributions exceed net investment income and/or net realized capital gains for
tax purposes, they are reported as distributions of paid-in capital.
Capital loss carryforwards, which may be used to offset future realized capital
gains for federal income tax purposes were as follows at May 31, 2003:
<Table>
<Caption>
AMOUNT EXPIRATION DATES
-------------- ----------------
Growth + Value $ 521,848,512 2009-2011
Growth Opportunities 463,537,631 2009-2011
LargeCap Growth 418,624,352 2008-2011
MidCap Opportunities 183,253,255 2007-2011
SmallCap Opportunities 72,918,566 2008-2011
Disciplined LargeCap 43,471,296 2008-2011
Large Company Value 13,580,973 2011
MagnaCap 10,576,002 2011
MidCap Value 2,489,425 2011
SmallCap Value 370,613 2011
Convertible 99,314,637 2010-2011
Equity and Bond 6,627,917 2010-2011
Real Estate(3) 4,405,808 2007-2008
</Table>
- ----------
(1) For the Year ended October 31, 2002.
(2) Composition of dividends and distributions presented herein and within the
financial statements may differ from final amounts reported based on the
Fund's tax year end of December 31, 2002.
(3) For the tax year ended December 31, 2002.
75
<Page>
NOTES TO FINANCIAL STATEMENTS as of November 30, 2003 (Unaudited) (Continued)
NOTE 13 -- ILLIQUID SECURITIES
Pursuant to guidelines adopted by the Funds' Board of Directors, the following
securities have been deemed to be illiquid. The Funds currently limit investment
in illiquid securities to 15% of the Fund's net assets, at market value, at time
of purchase.
<Table>
<Caption>
INITIAL PERCENT
ACQUISITION OF NET
FUND SECURITY SHARES DATE COST VALUE ASSETS
- --------------- ---------------------------- ------- ----------- ------------ ----- --------
Convertible WinStar Communications, Inc. 51,932 11/06/98 $ 2,364,096 $ 5 0.00%
Equity and Bond Dayton Superior Corp. 400 08/31/01 7,446 4 0.00%
Iridium World Comm 500 08/31/01 50,507 5 0.00%
North Atlantic Trading Co. 370 08/31/01 0 0 0.00%
SA Telecommunications, Inc. -- 08/06/96 2,000,000 0 0.00%
WinStar Communications, Inc. 500,000 386,500 50 0.00%
------------ ----- ----
$ 2,444,453 $ 59 0.00%
============ ===== ====
</Table>
NOTE 14 -- REORGANIZATION
On November 8, 2003, the MagnaCap Fund as listed below ("Acquiring Fund"),
acquired the assets and certain liabilities of Large Company Value Fund, also
listed below ("Acquired Fund"), in a tax-free reorganization in exchange for
shares of the Acquiring Fund, pursuant to a plan of reorganization approved by
the Acquired Fund's shareholders. The number and value of shares issued by the
Acquiring Fund are presented in Note 9 - Capital Shares. Net assets and
unrealized appreciation/(depreciation) as of the reorganization date were as
follows:
<Table>
<Caption>
ACQUIRED FUND
UNREALIZED
ACQUIRING ACQUIRED TOTAL NET ASSETS OF TOTAL NET ASSETS OF APPRECIATION
FUND FUND ACQUIRED FUND (000) ACQUIRING FUND (000) (DEPRECIATION)(000)
- ------------- ------------------------ ------------------- -------------------- -------------------
MagnaCap Fund Large Company Value Fund $ 147,505 $ 230,749 $ 9,420
</Table>
NOTE 15 -- OTHER INFORMATION
As with many financial services companies, ING Investments and affiliates of ING
Investments (collectively, "ING") have received requests for information from
various governmental and self-regulatory agencies in connection with
investigations related to trading in investment company shares. In each case,
full cooperation and responses are being provided. ING is also conducting an
internal review of investment company share trading as well as reviewing their
policies and procedures in this area.
NOTE 16 -- SUBSEQUENT EVENTS
On November 11, 2003, the Board of Trustees of ING Funds approved a proposal to
reorganize the ING Growth + Value Fund and the ING Growth Opportunities Fund,
"Disappearing Funds" into the ING MidCap Opportunities Fund, "Surviving Fund"
(the "2004 Reorganization"). The proposed reorganization is subject to approval
by shareholders of the Disappearing Funds. If shareholder approval is obtained,
it is expected that the 2004 Reorganization would take place late in the second
quarter of 2004.
Effective December 1, 2003, the investment management fee for SmallCap
Opportunities changed to the following annual rates based on average daily net
assets:
1.00% on first $100 million;
0.90% on the next $150 million;
0.80% on the next $250 million; and
0.75% in excess of $500 million
76
<Page>
ING
Growth +
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
COMMON STOCK: 100.4%
AIRLINES: 1.5%
224,400 @,L Airtran Holdings, Inc. $ 3,312,144
--------------
3,312,144
--------------
APPAREL: 1.6%
84,600 @ Coach, Inc. 3,370,464
--------------
3,370,464
--------------
AUTO PARTS & EQUIPMENT: 1.0%
20,000 Johnson Controls, Inc. 2,188,800
--------------
2,188,800
--------------
BANKS: 2.3%
65,400 Banknorth Group, Inc. 2,143,158
74,800 UCBH Holdings, Inc. 2,924,680
--------------
5,067,838
--------------
BIOTECHNOLOGY: 4.7%
77,200 @,L Celgene Corp. 3,530,356
66,300 @,L Genzyme Corp. 3,098,862
77,200 @,L Integra Lifesciences Holdings
Corp. 2,423,308
17,900 @ Invitrogen Corp. 1,220,243
--------------
10,272,769
--------------
BUILDING MATERIALS: 0.5%
11,000 @ American Standard Cos., Inc. 1,096,700
--------------
1,096,700
--------------
COMMERCIAL SERVICES: 5.7%
37,700 @ Alliance Data Systems Corp. 1,130,246
15,800 @,L Apollo Group, Inc. 1,090,674
63,500 @ Career Education Corp. 3,246,755
50,200 @,L Corporate Executive Board Co. 2,439,720
48,100 @ Education Management Corp. 3,251,560
33,100 @ Paychex, Inc. 1,273,357
--------------
12,432,312
--------------
COMPUTERS: 4.9%
43,400 @ CACI Intl., Inc. 2,160,018
30,700 @,L Micros Systems, Inc. 1,328,082
123,600 @,L Netscreen Technologies, Inc. 3,114,720
173,500 @,L Network Appliance, Inc. 4,009,585
--------------
10,612,405
--------------
DISTRIBUTION/WHOLESALE: 0.5%
74,100 @ Ingram Micro, Inc. 1,080,378
--------------
1,080,378
--------------
DIVERSIFIED FINANCIAL SERVICES: 1.0%
170,700 @ Ameritrade Holding Corp. 2,145,699
--------------
2,145,699
--------------
ELECTRICAL COMPONENTS & EQUIPMENT: 1.2%
122,400 American Power Conversion 2,675,664
--------------
2,675,664
ELECTRONICS: 7.2%
45,000 @,L Agilent Technologies, Inc. 1,272,600
97,050 @ Benchmark Electronics, Inc. 3,564,647
50,400 @,L Dionex Corp. 2,367,792
110,800 L Gentex Corp. $ 4,669,111
93,000 @ Jabil Circuit, Inc. 2,558,430
36,100 @ Waters Corp. 1,154,478
--------------
15,587,058
--------------
ENGINEERING & CONSTRUCTION: 2.1%
57,500 Fluor Corp. 2,107,950
53,100 @ Jacobs Engineering Group, Inc. 2,439,414
--------------
4,547,364
--------------
ENTERTAINMENT: 2.2%
29,500 Gtech Holdings Corp. 1,467,920
97,300 L International Game Technology 3,375,337
--------------
4,843,257
--------------
ENVIRONMENTAL CONTROL: 2.6%
42,000 @ Stericycle, Inc. 2,074,800
138,800 @,L Tetra Tech, Inc. 3,539,400
--------------
5,614,200
--------------
FOOD: 2.7%
65,400 @ Dean Foods Co. 2,145,774
95,300 @,L Performance Food Group Co. 3,746,243
--------------
5,892,017
--------------
HEALTHCARE-PRODUCTS: 5.9%
30,600 @,L Advanced Neuromodulation
Systems, Inc. 1,291,014
36,400 @ Gen-Probe, Inc. 1,263,808
25,900 @ Inamed Corp. 2,029,524
31,800 @,L Patterson Dental Co. 2,165,580
34,100 @ St. Jude Medical, Inc. 2,159,894
35,500 @ Varian Medical Systems, Inc. 2,449,855
22,400 @,L Zimmer Holdings, Inc. 1,476,608
--------------
12,836,283
--------------
HEALTHCARE-SERVICES: 1.7%
37,300 @,L Amsurg Corp. 1,387,933
13,500 @,L Anthem, Inc. 973,620
22,400 @ Coventry Health Care, Inc. 1,341,760
--------------
3,703,313
--------------
HOME FURNISHINGS: 0.9%
13,700 Harman Intl. Industries, Inc. 1,866,899
--------------
1,866,899
--------------
HOUSEHOLD PRODUCTS/WARES: 0.5%
37,800 @ Yankee Candle Co., Inc. 1,115,856
--------------
1,115,856
--------------
INSURANCE: 1.5%
18,400 MBIA, Inc. 1,069,408
62,100 WR Berkley Corp. 2,120,715
--------------
3,190,123
--------------
INTERNET: 0.9%
107,550 @,L United Online, Inc. 1,958,486
--------------
1,958,486
--------------
MACHINERY-DIVERSIFIED: 1.5%
72,300 Cognex Corp. 1,986,081
38,700 Rockwell Automation, Inc. 1,286,775
--------------
3,272,856
--------------
</Table>
See Accompanying Notes to Financial Statements
77
<Page>
ING
Growth +
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
MEDIA: 1.1%
65,100 @,L Univision Communications, Inc. $ 2,348,808
--------------
2,348,808
--------------
MISCELLANEOUS MANUFACTURING: 1.1%
29,100 L Danaher Corp. 2,421,120
--------------
2,421,120
--------------
OFFICE/BUSINESS EQUIPMENT: 1.0%
185,500 @,L Xerox Corp. 2,259,390
--------------
2,259,390
--------------
OIL AND GAS: 4.8%
189,100 L Chesapeake Energy Corp. 2,307,020
91,200 @ Evergreen Resources, Inc. 2,556,336
87,000 Patina Oil & Gas Corp. 3,904,560
56,400 @ Patterson-UTI Energy, Inc. 1,620,372
--------------
10,388,288
--------------
PHARMACEUTICALS: 4.7%
26,700 @ AdvancePCS 1,486,122
26,200 L Allergan, Inc. 1,957,926
89,400 Mylan Laboratories 2,263,608
113,200 Omnicare, Inc. 4,518,944
400 @ Pharmaceutical Resources, Inc. 29,032
--------------
10,255,632
--------------
RETAIL: 12.7%
33,200 Applebees Intl., Inc. 1,285,172
26,000 @,L Autozone, Inc. 2,487,160
51,300 CBRL Group, Inc. 2,116,125
100,400 @,L Chico's Fas, Inc. 3,853,351
49,800 Dollar General Corp. 1,051,776
122,100 @ HOT Topic, Inc. 3,638,580
48,800 L Michaels Stores, Inc. 2,305,800
42,300 @,L Panera Bread Co. 1,648,854
44,000 Petsmart, Inc. 1,063,040
29,400 Regis Corp. 1,203,930
81,200 @,L Sonic Corp. 2,506,644
22,600 Tiffany & Co. 1,024,910
78,400 @ Tractor Supply Co. 3,413,536
--------------
27,598,878
--------------
SAVINGS AND LOANS: 1.7%
23,600 Independence Community Bank 872,728
72,200 New York Community
Bancorp, Inc. 2,804,970
--------------
3,677,698
--------------
SEMICONDUCTORS: 5.2%
111,100 @,L Altera Corp. 2,814,163
91,400 @,L Broadcom Corp. 3,329,702
58,200 Linear Technology Corp. 2,510,748
71,200 @,L Xilinx, Inc. 2,676,408
--------------
11,331,021
--------------
SOFTWARE: 7.1%
62,200 L Adobe Systems, Inc. 2,570,104
91,800 @,L Avid Technology, Inc. 4,854,384
26,300 National Instruments Corp. 1,190,601
143,400 @ Packeteer, Inc. 2,720,155
107,200 @ Veritas Software Corp. 4,075,851
--------------
15,411,095
--------------
TELECOMMUNICATIONS: 3.1%
19,500 L Adtran, Inc. $ 1,283,490
70,900 @,L Foundry Networks, Inc. 1,868,924
92,420 @,L Utstarcom, Inc. 3,500,870
--------------
6,653,284
--------------
TEXTILES: 1.3%
40,400 @ Mohawk Industries, Inc. 2,912,032
--------------
2,912,032
--------------
TRANSPORTATION: 2.0%
56,400 CH Robinson Worldwide, Inc. 2,218,212
38,700 @ Forward Air Corp. 1,100,628
47,100 @ Swift Transportation Co., Inc. 938,232
--------------
4,257,072
--------------
Total Common Stock
(Cost $171,925,517) 218,197,203
--------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.8%
REPURCHASE AGREEMENT: 0.8%
$ 1,682,000 Morgan Stanley Repurchase
Agreement, 1.030%, due 12/01/03,
$1,682,144 to be received upon
repurchase (Collateralized by
$1,745,000 Student Loan Marketing
Association, 0.000%, Market Value
$1,710,784 due 12/18/03 1,682,000
--------------
Total Short-term Investments
(Cost $1,682,000) 1,682,000
--------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $173,607,517)* 101.2% $ 219,879,203
OTHER ASSETS AND
LIABILITIES-NET (1.2) (2,569,857)
----- --------------
NET ASSETS 100.0% $ 217,309,346
===== ==============
</Table>
@ Non-income producing security
L Loaned security, a portion or all of the security is on loan at November
30, 2003.
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 47,008,445
Gross Unrealized Depreciation (736,759)
--------------
Net Unrealized Appreciation $ 46,271,686
==============
</Table>
See Accompanying Notes to Financial Statements
78
<Page>
ING
Growth
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
COMMON STOCK: 97.4%
AIRLINES: 0.5%
60,000 @ Airtran Holdings, Inc. $ 885,600
--------------
885,600
--------------
APPAREL: 1.5%
69,000 @ Coach, Inc. 2,748,960
--------------
2,748,960
--------------
AUTO PARTS AND EQUIPMENT: 1.3%
21,900 Johnson Controls, Inc. 2,396,736
--------------
2,396,736
--------------
BANKS: 1.0%
54,600 Banknorth Group, Inc. 1,789,242
--------------
1,789,242
--------------
BIOTECHNOLOGY: 4.4%
28,600 @ Amgen, Inc. 1,644,786
64,10 0 @ Celgene Corp. 2,931,293
58,200 @ Digene Corp. 2,313,450
14,600 @ Invitrogen Corp. 995,282
--------------
7,884,811
--------------
BUILDING MATERIALS: 0.5%
9,200 @ American Standard Cos., Inc. 917,240
--------------
917,240
--------------
COMMERCIAL SERVICES: 4.8%
32,300 @ Alliance Data Systems Corp. 968,354
53,100 @ Career Education Corp. 2,715,003
9,300 @ Corporate Executive Board Co. 451,980
39,000 @ Education Management Corp. 2,636,400
17,400 Strayer Education, Inc. 1,944,102
--------------
8,715,839
--------------
COMPUTERS: 6.5%
41,100 @ CACI Intl., Inc. 2,045,547
58,100 @ Dell, Inc. 2,004,450
299,400 @ EMC Corp. 4,113,756
154,200 @ Network Appliance, Inc. 3,563,562
--------------
11,727,315
--------------
DISTRIBUTION/WHOLESALE: 0.5%
61,600 @ Ingram Micro, Inc. 898,128
--------------
898,128
--------------
DIVERSIFIED FINANCIAL SERVICES: 2.0%
144,000 @ Ameritrade Holding Corp. 1,810,080
38,300 Citigroup, Inc. 1,801,632
--------------
3,611,712
--------------
ELECTRONICS: 4.5%
37,000 @ Agilent Technologies, Inc. 1,046,360
92,200 Gentex Corp. 3,885,308
46,400 @ Jabil Circuit, Inc. 1,276,464
62,500 @ Waters Corp. 1,998,750
--------------
8,206,882
--------------
ENGINEERING AND CONSTRUCTION: 2.2%
50,000 Fluor Corp. 1,833,000
47,500 @ Jacobs Engineering Group, Inc. 2,182,150
--------------
4,015,150
--------------
ENTERTAINMENT: 0.6%
32,200 International Game Technology $ 1,117,018
--------------
1,117,018
--------------
FOOD: 2.4%
59,400 @ Dean Foods Co. 1,948,914
25,800 @ Performance Food Group Co. 1,014,198
36,400 Sysco Corp. 1,322,048
--------------
4,285,160
--------------
HEALTHCARE-PRODUCTS: 7.5%
22,100 @ Advanced Neuromodulation
Systems, Inc. 932,399
41,200 @ Boston Scientific Corp. 1,478,668
30,000 @ Gen-Probe, Inc. 1,041,600
11,200 @ Inamed Corp. 877,632
36,600 Medtronic, Inc. 1,654,320
26,600 @ Patterson Dental Co. 1,811,460
34,415 @ St. Jude Medical, Inc. 2,179,846
16,400 @ Varian Medical Systems, Inc. 1,131,764
38,600 @ Zimmer Holdings, Inc. 2,544,512
--------------
13,652,201
--------------
HEALTHCARE-SERVICES: 2.3%
25,500 A Aetna, Inc. 1,641,690
8,900 @ Coventry Health Care, Inc. 533,110
36,800 UnitedHealth Group, Inc. 1,983,520
--------------
4,158,320
--------------
HOUSEHOLD PRODUCTS/WARES: 0.6%
35,700 @ Yankee Candle Co., Inc. 1,053,864
--------------
1,053,864
--------------
INSURANCE: 2.6%
41,000 Aflac, Inc. 1,474,770
18,200 American Intl. Group 1,054,690
14,800 MBIA, Inc. 860,176
40,500 WR Berkley Corp. 1,383,075
--------------
4,772,711
--------------
INTERNET: 1.6%
89,000 @ InterActiveCorp. 2,923,650
--------------
2,923,650
--------------
MACHINERY-DIVERSIFIED: 2.0%
60,300 Cognex Corp. 1,656,441
59,100 Rockwell Automation, Inc. 1,965,075
--------------
3,621,516
--------------
MEDIA: 2.0%
33,500 @ Echostar Communications Corp. 1,155,080
26,500 @ Univision Communications, Inc. 956,120
38,000 Viacom, Inc. 1,494,160
--------------
3,605,360
--------------
MISCELLANEOUS MANUFACTURING: 1.1%
24,900 Danaher Corp. 2,071,680
--------------
2,071,680
--------------
OIL AND GAS: 6.4%
44,915 Apache Corp. 3,224,897
156,900 Chesapeake Energy Corp. 1,914,180
48,755 @,@@ Nabors Industries Ltd. 1,809,786
87,200 @ Patterson-UTI Energy, Inc. 2,505,256
</Table>
See Accompanying Notes to Financial Statements
79
<Page>
ING
Growth
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
OIL AND GAS (CONTINUED)
85,400 XTO Energy, Inc. $ 2,158,912
--------------
11,613,031
--------------
PHARMACEUTICALS: 6.4%
54,600 @ AdvancePCS 3,039,036
11,800 Allergan, Inc. 881,814
72,600 Mylan Laboratories 1,838,232
101,088 Omnicare, Inc. 4,035,433
55,300 Pfizer, Inc. 1,855,315
--------------
11,649,830
--------------
RETAIL: 12.6%
26,700 Applebees Intl., Inc. 1,033,557
10,900 @ Autozone, Inc. 1,042,694
48,400 CBRL Group, Inc. 1,996,500
78,400 @ Chico's FAS, Inc. 3,008,992
41,600 Dollar General Corp. 878,592
70,950 @ HOT Topic, Inc. 2,114,310
39,900 Michaels Stores, Inc. 1,885,275
58,875 @ Pacific Sunwear of California 1,339,995
35,100 @ Panera Bread Co. 1,368,198
64,500 Petsmart, Inc. 1,558,320
24,400 Regis Corp. 999,180
34,000 @ Sonic Corp. 1,049,580
118,500 @ Staples, Inc. 3,217,275
26,300 Tiffany & Co. 1,192,705
--------------
22,685,173
--------------
SAVINGS AND LOANS: 1.0%
19,600 Independence Community Bank 724,808
25,700 New York Community
Bancorp, Inc. 998,445
--------------
1,723,253
--------------
SEMICONDUCTORS: 7.7%
156,800 @ Altera Corp. 3,971,744
75,500 @ Broadcom Corp. 2,750,465
50,600 Linear Technology Corp. 2,182,884
130,000 @ Xilinx, Inc. 4,886,700
--------------
13,791,793
--------------
SOFTWARE: 4.2%
43,500 Adobe Systems, Inc. 1,797,420
34,200 @ Avid Technology, Inc. 1,808,496
104,914 @ Veritas Software Corp. 3,988,935
--------------
7,594,851
--------------
TELECOMMUNICATIONS: 4.3%
123,300 @ Cisco Systems, Inc. 2,793,978
66,800 @ Nextel Communications, Inc. 1,692,044
86,400 @ Utstarcom, Inc. 3,272,832
--------------
7,758,854
--------------
TEXTILES: 1.4%
33,900 @ Mohawk Industries, Inc. 2,443,512
--------------
2,443,512
--------------
TRANSPORTATION: 1.0%
35,500 @ Forward Air Corp. 1,009,620
39,100 @ Swift Transportation Co., Inc. 778,872
--------------
1,788,492
--------------
Total Common Stock
(Cost $137,300,063) 176,107,884
--------------
MUTUAL FUNDS: 2.5%
EQUITY FUND: 2.5%
43,600 Midcap Spdr Trust Series 1 $ 4,544,864
--------------
Total Mutual Funds
(Cost $4,406,166) 4,544,864
--------------
Total Long-Term Investments
(Cost $141,706,229) $ 180,652,748
--------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.4%
REPURCHASE AGREEMENT: 0.4%
$ 790,000 Morgan Stanley Repurchase
Agreement dated 11/28/03,
1.030%, due 12/01/03,
$790,068 to be received upon
repurchase (Collateralized by
$805,000 Student Loan Marketing
Association, 0.000%, Market Value
$805,000, due 12/18/03 and
$10,000 U.S. Treasury Bill,
0.000%, Market Value $9,996,
due 12/11/03) 790,000
--------------
Total Short-term Investments
(Cost $790,000) 790,000
--------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $142,496,229)* 100.3% $ 181,442,748
OTHER ASSETS AND
LIABILITIES-NET (0.3) (519,757)
----- --------------
NET ASSETS 100.0% $ 180,922,991
===== ==============
</Table>
@ Non-income producing security
@@ Foreign Issuer
A Related Party
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 40,138,947
Gross Unrealized Depreciation (1,192,428)
--------------
Net Unrealized Appreciation $ 38,946,519
==============
</Table>
See Accompanying Notes to Financial Statements
80
<Page>
ING
LargeCap
Growth
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
COMMON STOCK: 98.0%
ADVERTISING: 3.5%
114,930 Omnicom Group $ 9,155,324
--------------
9,155,324
--------------
BIOTECHNOLOGY: 0.7%
40,480 @ Genzyme Corp. 1,892,035
--------------
1,892,035
--------------
COMMERCIAL SERVICES: 7.5%
178,760 @,L Apollo Group, Inc. 12,339,803
43,700 McKesson Corp. 1,276,040
103,200 Moody's Corp. 5,911,296
--------------
19,527,139
--------------
COMPUTERS: 8.9%
361,940 @ Dell, Inc. 12,486,930
374,680 @ EMC Corp. 5,148,103
178,510 @@ Seagate Technology, Inc. 3,525,573
83,170 @ Sungard Data Systems, Inc. 2,247,253
--------------
23,407,859
--------------
DIVERSIFIED FINANCIAL SERVICES: 10.5%
45,590 L Capital One Financial Corp. 2,722,635
133,090 Citigroup, Inc. 6,260,554
127,460 Countrywide Financial Corp. 13,459,776
34,770 Fannie Mae 2,433,900
53,110 Franklin Resources, Inc. 2,540,251
--------------
27,417,116
--------------
HEALTHCARE-PRODUCTS: 4.2%
192,890 Guidant Corp. 10,950,365
--------------
10,950,365
--------------
HOME BUILDERS: 1.4%
36,490 Lennar Corp. 3,572,371
--------------
3,572,371
--------------
INSURANCE: 1.8%
132,700 @@ ACE Ltd. 4,836,915
--------------
4,836,915
--------------
INTERNET: 10.9%
140,490 @,L eBay, Inc. 7,846,367
65,330 L InterActiveCorp. 2,146,091
211,420 @,L Symantec Corp. 6,940,919
273,330 @,L Yahoo!, Inc. 11,747,722
--------------
28,681,099
--------------
MEDIA: 9.0%
59,340 L Clear Channel
Communications, Inc. 2,481,005
190,630 L Comcast Corp. 5,747,495
72,850 L Cox Communications, Inc. 2,469,615
159,120 Echostar Communications Corp. 5,486,458
202,980 @,L Univision Communications, Inc. 7,323,518
--------------
23,508,091
--------------
PHARMACEUTICALS: 14.6%
110,320 Abbott Laboratories $ 4,876,144
208,630 @@,L AstraZeneca PLC ADR 9,586,548
144,740 L Eli Lilly & Co. 9,923,373
114,840 @ Forest Laboratories, Inc. 6,274,858
24,750 @,L Gilead Sciences, Inc. 1,452,330
93,530 @ Medco Health Solutions, Inc. 3,407,298
157,520 @@ Serono SA ADR 2,721,946
--------------
38,242,497
--------------
RETAIL: 4.5%
96,080 @ Autozone, Inc. 9,191,013
43,490 Best Buy Co., Inc. 2,696,380
--------------
11,887,393
--------------
SEMICONDUCTORS: 5.4%
302,570 @,L Altera Corp. 7,664,098
130,460 Analog Devices, Inc. 6,490,385
--------------
14,154,483
--------------
SOFTWARE: 8.5%
228,930 L Bea Systems, Inc. 2,907,411
254,810 L First Data Corp. 9,644,559
65,170 @,L Mercury Interactive Corp. 3,049,956
255,020 Microsoft Corp. 6,554,014
--------------
22,155,940
--------------
TELECOMMUNICATIONS: 6.6%
93,930 @@ Amdocs Ltd. 2,350,129
865,300 @,L Corning, Inc. 9,916,338
41,076 NTL, Inc. 2,676,512
151,010 @@,L Telefonaktiebolaget LM
Ericsson ADR 2,452,402
--------------
17,395,381
--------------
Total Common Stock
(Cost $227,643,719) 256,784,008
--------------
TOTAL INVESTMENTS IN
SECURITIES (COST
$227,643,719)* 98.0% $ 256,784,008
OTHER ASSETS AND
LIABILITIES-NET 2.0 5,156,454
----- --------------
NET ASSETS 100.0% $ 261,940,462
===== ==============
</Table>
@ Non-income producing security
@@ Foreign Issuer
ADR American Depositary Receipt
PLC Public Limited Company
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 32,197,527
Gross Unrealized Depreciation (3,057,238)
--------------
Net Unrealized Appreciation $ 29,140,289
==============
</Table>
See Accompanying Notes to Financial Statements
81
<Page>
ING
MidCap
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
COMMON STOCK: 100.0%
AIRLINES: 0.4%
52,000 @ Airtran Holdings, Inc. $ 767,520
--------------
767,520
--------------
APPAREL: 1.4%
61,000 @ Coach, Inc. 2,430,240
--------------
2,430,240
--------------
AUTO PARTS AND EQUIPMENT: 1.3%
20,300 Johnson Controls, Inc. 2,221,632
--------------
2,221,632
--------------
BANKS: 1.6%
24,700 Bank of Hawaii Corp. 1,021,345
53,300 Banknorth Group, Inc. 1,746,641
--------------
2,767,986
--------------
BIOTECHNOLOGY: 2.2%
62,910 @,L Celgene Corp. 2,876,874
15,600 @ Invitrogen Corp. 1,063,452
--------------
3,940,326
--------------
BUILDING MATERIALS: 1.3%
22,700 @ American Standard Cos., Inc. 2,263,190
--------------
2,263,190
--------------
CHEMICALS: 0.6%
14,000 Praxair, Inc. 1,004,920
--------------
1,004,920
--------------
COMMERCIAL SERVICES: 5.3%
30,600 @ Alliance Data Systems Corp. 917,388
51,800 @ Career Education Corp. 2,648,534
40,500 @ Corporate Executive Board Co. 1,968,300
43,400 @ Education Management Corp. 2,933,840
25,800 @ Paychex, Inc. 992,526
--------------
9,460,588
--------------
COMPUTERS: 2.9%
42,000 @ CACI Intl., Inc. 2,090,340
134,300 @,L Network Appliance, Inc. 3,103,673
--------------
5,194,013
--------------
DISTRIBUTION/WHOLESALE: 0.5%
60,300 @ Ingram Micro, Inc. 879,174
--------------
879,174
--------------
DIVERSIFIED FINANCIAL SERVICES: 2.0%
139,100 @,L Ameritrade Holding Corp. 1,748,487
24,300 Bear Stearns Cos., Inc. 1,760,778
--------------
3,509,265
--------------
ELECTRICAL COMPONENTS & EQUIPMENT: 1.3%
104,900 American Power Conversion 2,293,114
--------------
2,293,114
--------------
ELECTRONICS: 5.4%
38,000 @,L Agilent Technologies, Inc. 1,074,640
112,700 L Gentex Corp. 4,749,178
66,700 @ Jabil Circuit, Inc. 1,834,917
60,200 @ Waters Corp. 1,925,196
--------------
9,583,931
--------------
ENGINEERING & CONSTRUCTION: 2.6%
44,700 L Fluor Corp. $ 1,638,702
63,700 @ Jacobs Engineering Group, Inc. 2,926,378
--------------
4,565,080
--------------
ENTERTAINMENT: 0.7%
33,300 L International Game Technology 1,155,177
--------------
1,155,177
--------------
FOOD: 2.2%
58,000 @ Dean Foods Co. 1,902,980
48,700 @,L Performance Food Group Co. 1,914,397
--------------
3,817,377
--------------
HEALTHCARE-PRODUCTS: 7.0%
30,800 @ Gen-Probe, Inc. 1,069,376
10,900 @ Inamed Corp. 854,124
25,900 @,L Patterson Dental Co. 1,763,790
35,400 @ St. Jude Medical, Inc. 2,242,236
60,200 @,L Varian Medical Systems, Inc. 4,154,402
37,100 @,L Zimmer Holdings, Inc. 2,445,632
--------------
12,529,560
--------------
HEALTHCARE-SERVICES: 2.2%
23,300 A Aetna, Inc. 1,500,054
29,600 @ Amsurg Corp. 1,101,416
11,500 @,L Anthem, Inc. 829,380
8,700 @ Coventry Health Care, Inc. 521,130
--------------
3,951,980
--------------
HOME FURNISHINGS: 0.9%
12,100 Harman Intl. Industries, Inc. 1,648,867
--------------
1,648,867
--------------
HOUSEHOLD PRODUCTS/WARES: 0.6%
37,200 @ Yankee Candle Co., Inc. 1,098,144
--------------
1,098,144
--------------
INSURANCE: 2.5%
31,800 MBIA, Inc. 1,848,216
48,500 @ Proassurance Corp. 1,498,650
31,150 WR Berkley Corp. 1,063,773
--------------
4,410,639
--------------
INTERNET: 1.1%
59,200 @,L InterActiveCorp. 1,944,720
--------------
1,944,720
--------------
MACHINERY-DIVERSIFIED: 3.1%
58,400 Cognex Corp. 1,604,248
73,300 Rockwell Automation, Inc. 2,437,225
21,900 @ Zebra Technologies Corp. 1,392,183
--------------
5,433,656
--------------
MEDIA: 2.0%
40,900 @ Echostar Communications Corp. 1,410,232
59,300 @,L Univision Communications, Inc. 2,139,544
--------------
3,549,776
--------------
MISCELLANEOUS MANUFACTURING: 1.1%
23,000 L Danaher Corp. 1,913,600
--------------
1,913,600
--------------
</Table>
See Accompanying Notes to Financial Statements
82
<Page>
ING
MidCap
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- ----------------------------------------------------------------------------
OFFICE/BUSINESS EQUIPMENT: 1.1%
159,400 @,L Xerox Corp. $ 1,941,492
--------------
1,941,492
--------------
OIL AND GAS: 5.4%
26,100 Apache Corp. 1,873,980
85,400 L Chesapeake Energy Corp. 1,041,880
21,400 Devon Energy Corp. 1,056,304
23,900 @,@@,L Nabors Industries Ltd. 887,168
94,100 @ Patterson-UTI Energy, Inc. 2,703,493
79,300 L XTO Energy, Inc. 2,004,704
--------------
9,567,529
--------------
PHARMACEUTICALS: 5.7%
49,900 @,L AdvancePCS 2,777,434
23,500 L Allergan, Inc. 1,756,155
71,150 Mylan Laboratories 1,801,518
93,800 Omnicare, Inc. 3,744,496
--------------
10,079,603
--------------
RETAIL: 15.0%
22,400 @,L Autozone, Inc. 2,142,784
40,900 @ Bed Bath & Beyond, Inc. 1,727,616
51,000 CBRL Group, Inc. 2,103,750
69,600 @,L Chico's FAS, Inc. 2,671,248
40,600 Dollar General Corp. 857,472
99,000 @ HOT Topic, Inc. 2,950,200
41,000 L Michaels Stores, Inc. 1,937,250
34,400 @,L Panera Bread Co. 1,340,912
62,800 Petsmart, Inc. 1,517,248
24,000 Regis Corp. 982,800
62,100 @ Sonic Corp. 1,917,027
123,400 @ Staples, Inc. 3,350,310
57,700 Tiffany & Co. 2,616,695
12,800 @ Tractor Supply Co. 557,312
--------------
26,672,624
--------------
SAVINGS AND LOANS: 1.8%
19,100 Independence Community Bank 706,318
63,866 New York Community
Bancorp, Inc. 2,481,194
--------------
3,187,512
--------------
SEMICONDUCTORS: 5.9%
113,700 @,L Altera Corp. 2,880,021
77,400 @,L Broadcom Corp. 2,819,682
47,800 Linear Technology Corp. 2,062,092
69,500 @,L Xilinx, Inc. 2,612,505
--------------
10,374,300
--------------
SOFTWARE: 6.9%
53,600 L Adobe Systems, Inc. 2,214,752
33,300 @,L Avid Technology, Inc. 1,760,904
43,300 @ D&B Corp. 2,089,225
59,500 Fair Isaac Corp. 3,282,020
81,800 @ Veritas Software Corp. 3,110,118
--------------
12,457,019
--------------
TELECOMMUNICATIONS: 1.7%
77,425 @,L Utstarcom, Inc. $ 2,932,859
--------------
2,932,859
--------------
TEXTILES: 1.3%
32,600 @ Mohawk Industries, Inc. 2,349,808
--------------
2,349,808
--------------
TOYS/GAMES/HOBBIES: 0.5%
28,400 @,L Leapfrog Enterprises, Inc. 891,760
--------------
891,760
--------------
TRANSPORTATION: 2.5%
68,900 CH Robinson Worldwide, Inc. 2,709,837
31,600 @ Forward Air Corp. 898,704
38,400 @,L Swift Transportation Co., Inc. 764,928
--------------
4,373,469
--------------
Total Common Stock
(Cost $137,131,706) 177,162,450
--------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.4%
REPURCHASE AGREEMENT: 0.4%
$679,000 Morgan Stanley Repurchase
Agreement dated 11/28/03,
1.030%, due 12/01/03,
$679,058 to be received upon
repurchase (Collateralized by
$690,000 Student Loan Marketing
Association, 0.000%, Market Value
$690,000, due 12/18/03 and
$10,000 U.S. Treasury Bill, 0.000%,
Market Value $9,996, due 12/11/03) 679,000
--------------
Total Short-term Investments
(Cost $679,000) 679,000
--------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $137,810,706)* 100.4% $ 177,841,450
OTHER ASSETS AND
LIABILITIES-NET (0.4) (773,222)
----- --------------
NET ASSETS 100.0% $ 177,068,228
===== ==============
</Table>
@ Non-income producing security
@@ Foreign Issuer
A Related Party
L Loaned security, a portion or all of this security is on loan as of
November 30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 40,612,511
Gross Unrealized Depreciation (581,767)
--------------
Net Unrealized Appreciation $ 40,030,744
==============
</Table>
See Accompanying Notes to Financial Statements
83
<Page>
ING
SmallCap
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCK: 96.1%
AEROSPACE/DEFENSE: 0.8%
43,950 Engineered Support
Systems, Inc. $ 2,329,350
-----------
2,329,350
-----------
AIRLINES: 1.2%
252,200 @,L Airtran Holdings, Inc. 3,722,472
-----------
3,722,472
-----------
BANKS: 4.2%
136,300 Southwest Bancorp of
Texas, Inc. 5,210,749
67,800 UCBH Holdings, Inc. 2,650,980
97,300 Westamerica Bancorporation 5,137,440
-----------
12,999,169
-----------
BIOTECHNOLOGY: 5.0%
36,300 @,L Celgene Corp. 1,659,999
105,500 @,L Digene Corp. 4,193,625
144,000 @,L Integra Lifesciences
Holdings Corp. 4,520,160
82,985 @,L Martek Biosciences Corp. 5,040,509
-----------
15,414,293
-----------
COMMERCIAL SERVICES: 5.5%
216,300 @,L Administaff, Inc. 3,235,848
61,400 @ Advisory Board Co. 2,254,608
51,000 @ Concorde Career Colleges, Inc. 1,351,500
44,300 @ Corporate Executive Board Co. 2,152,980
36,600 @,L Education Management Corp. 2,474,160
48,400 Strayer Education, Inc. 5,407,732
-----------
16,876,828
-----------
COMPUTERS: 7.5%
114,200 @ Anteon Intl. Corp. 4,357,872
67,200 @ CACI Intl., Inc. 3,344,544
167,100 @ Cognizant Technology
Solutions Corp. 7,664,877
259,800 @,L Cray, Inc. 2,720,106
88,600 @,L Micros Systems, Inc. 3,832,836
47,700 @,L Netscreen Technologies, Inc. 1,202,040
-----------
23,122,275
-----------
DISTRIBUTION/WHOLESALE: 1.8%
153,100 @ SCP Pool Corp. 5,484,042
-----------
5,484,042
-----------
ELECTRICAL COMPONENTS & EQUIPMENT: 1.5%
111,300 @ Wilson Greatbatch
Technologies, Inc. 4,663,470
-----------
4,663,470
-----------
ELECTRONICS: 1.7%
145,800 @,L Benchmark Electronics, Inc. 5,355,234
-----------
5,355,234
-----------
ENTERTAINMENT: 2.8%
81,500 GTECH Holdings Corp. 4,055,440
66,200 @ Penn National Gaming, Inc. 1,563,644
105,415 @,L Shuffle Master, Inc. 3,152,963
-----------
8,772,047
-----------
ENVIRONMENTAL CONTROL: 2.4%
29,400 @,L Stericycle, Inc. $ 1,452,360
237,200 @,L Tetra Tech, Inc. 6,048,600
-----------
7,500,960
-----------
FOOD: 3.3%
59,850 Flowers Foods, Inc. 1,562,085
141,600 @,L Performance Food Group Co. 5,566,296
76,900 @ United Natural Foods, Inc. 2,952,191
-----------
10,080,572
-----------
HEALTHCARE-PRODUCTS: 7.3%
82,350 @,L Advanced Neuromodulation
Systems, Inc. 3,474,347
74,300 @ Gen-Probe, Inc. 2,579,696
56,200 @ Inamed Corp. 4,403,832
157,401 @ Kyphon, Inc. 4,312,787
43,500 @,L Techne Corp. 1,569,480
256,520 @ Thoratec Corp. 3,614,367
92,300 @ Wright Medical Group, Inc. 2,571,478
-----------
22,525,987
-----------
HEALTHCARE-SERVICES: 4.2%
186,600 @ Amsurg Corp. 6,943,386
63,000 @ Odyssey Healthcare, Inc. 2,243,430
42,600 @,L Pediatrix Medical Group, Inc. 2,285,916
104,300 @ Province Healthcare Co. 1,598,919
-----------
13,071,651
-----------
HOUSEHOLD PRODUCTS/WARES: 0.9%
97,600 @ Yankee Candle Co., Inc. 2,881,152
-----------
2,881,152
-----------
INSURANCE: 2.8%
95,245 L HCC Insurance Holdings, Inc. 2,963,072
63,700 @ Philadelphia Consolidated
Holding Co. 3,225,131
83,600 @,L Proassurance Corp. 2,583,240
-----------
8,771,443
-----------
INTERNET: 1.7%
83,200 @ At Road, Inc. 1,047,488
65,343 @,L Digital Insight Corp. 1,553,203
74,700 @,L Digital River, Inc. 1,718,847
48,570 @ eCollege.com, Inc. 1,078,254
-----------
5,397,792
-----------
LODGING: 1.0%
98,600 Station Casinos, Inc. 3,074,348
-----------
3,074,348
-----------
MACHINERY-DIVERSIFIED: 1.3%
148,760 Cognex Corp. 4,086,437
-----------
4,086,437
-----------
MISCELLANEOUS MANUFACTURING: 1.1%
11,200 @ Applied Films Corp. 371,728
68,400 @ Esco Technologies, Inc. 2,907,000
-----------
3,278,728
-----------
OIL AND GAS: 3.8%
118,600 @,L Evergreen Resources, Inc. 3,324,358
47,750 Patina Oil & Gas Corp. 2,143,020
</Table>
See Accompanying Notes to Financial Statements
84
<Page>
ING
SmallCap
Opportunities
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------------
184,600 @ Southwestern Energy Co. $ 3,767,686
117,000 @ Unit Corp. 2,410,200
-----------
11,645,264
-----------
PHARMACEUTICALS: 2.1%
30,200 @,L Pharmaceutical Resources, Inc. 2,191,916
133,749 @ VCA Antech, Inc. 4,179,656
-----------
6,371,572
-----------
RETAIL: 14.3%
87,400 L Applebees Intl., Inc. 3,383,254
137,800 CBRL Group, Inc. 5,684,250
135,200 @,L Chico's FAS, Inc. 5,188,976
50,200 @,L Dick's Sporting Goods, Inc. 2,639,516
216,975 @ HOT Topic, Inc. 6,465,854
100,400 MSC Industrial Direct Co. 2,644,536
240,842 @ Pacific Sunwear of California 5,481,564
59,400 @ Panera Bread Co. 2,315,412
72,800 @ Petco Animal Supplies, Inc. 2,435,888
31,200 @,L PF Chang's China Bistro, Inc. 1,684,176
40,800 Regis Corp. 1,670,760
110,300 @,L Sonic Corp. 3,404,961
20,000 @ Tractor Supply Co. 870,800
-----------
43,869,947
-----------
SEMICONDUCTORS: 5.5%
131,500 @ Actel Corp. 3,604,415
453,600 @ GlobespanVirata, Inc. 2,785,104
258,700 @,L Kulicke & Soffa Industries, Inc. 4,263,376
42,500 @ Mattson Technology, Inc. 652,375
88,700 @ Omnivision Technologies, Inc. 5,779,692
-----------
17,084,962
-----------
SOFTWARE: 5.1%
126,000 @,L Avid Technology, Inc. 6,662,880
53,700 Global Payments, Inc. 2,437,980
349,400 @ Packeteer, Inc. 6,627,769
-----------
15,728,629
-----------
TELECOMMUNICATIONS: 4.5%
59,800 L Adtran, Inc. 3,936,036
320,600 @,L Foundry Networks, Inc. 8,451,016
50,400 @,L KVH Industries, Inc. 1,589,616
-----------
13,976,668
-----------
TOYS/GAMES/HOBBIES: 1.1%
91,700 @,L Leapfrog Enterprises, Inc. 2,879,380
21,200 @ RC2 Corp. 451,136
-----------
3,330,516
-----------
TRANSPORTATION: 1.7%
54,600 @ Forward Air Corp. 1,552,824
153,060 @ Knight Transportation, Inc. 3,708,644
-----------
5,261,468
-----------
Total Common Stock
(Cost $204,172,216) 296,677,276
-----------
MUTUAL FUNDS: 1.7%
EQUITY FUND: 1.7%
85,965 L I Shares Russell 2000 Growth
Index Fund $ 5,097,725
-----------
Total Mutual Funds
(Cost $4,221,164) 5,097,725
-----------
Total Long-Term Investments
(Cost $208,393,380) 301,775,001
-----------
<Caption>
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 2.6%
REPURCHASE AGREEMENT: 2.6%
$7,950,000 Repurchase Agreement
dated 11/28/03, 1.060%,
due 12/01/03, $7,950,702 to
be received upon repurchase
(Collateralized by Federal
National Mortgage Association,
4.750%, market value $7,950,563,
due 02/21/2013), 1.06%,
due 12/01/03 7,950,000
-------------
Total Short-term Investments
(Cost $7,950,000) 7,950,000
-------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $216,343,380)* 100.4% $ 309,725,001
OTHER ASSETS AND
LIABILITIES-NET (0.4) (1,221,684)
----- -------------
NET ASSETS 100.0% $ 308,503,317
===== =============
</Table>
@ Non-income producing security
L Loaned security, a portion or all of the security is on loan at November
30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 94,744,418
Gross Unrealized Depreciation (1,362,797)
------------
Net Unrealized Appreciation $ 93,381,621
============
</Table>
See Accompanying Notes to Financial Statements
85
<Page>
ING
Disciplined
LargeCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCK: 100.0%
ADVERTISING: 0.6%
6,300 Omnicom Group $ 501,858
-----------
501,858
-----------
AEROSPACE/DEFENSE: 0.9%
6,950 Boeing Co. 266,811
4,350 Goodrich Corp. 119,669
3,850 United Technologies Corp. 329,944
-----------
716,424
-----------
AGRICULTURE: 1.4%
16,600 Altria Group, Inc. 863,200
11,450 Monsanto Co. 310,524
-----------
1,173,724
-----------
APPAREL: 0.9%
4,900 Jones Apparel Group, Inc. 169,050
8,200 Nike, Inc. 551,450
-----------
720,500
-----------
AUTO MANUFACTURERS: 1.5%
48,500 Ford Motor Co. 640,200
4,250 General Motors Corp. 181,815
4,700 @ Paccar, Inc. 376,987
-----------
1,199,002
-----------
AUTO PARTS & EQUIPMENT: 0.2%
21,250 Delphi Corp. 186,575
-----------
186,575
-----------
BANKS: 6.1%
21,850 Bank of America Corp. 1,648,145
9,150 Bank One Corp. 396,744
13,250 SouthTrust Corp. 425,988
15,950 US Bancorp 441,975
23,800 Wachovia Corp. 1,088,849
13,500 Wells Fargo & Co. 773,954
3,750 Zions Bancorporation 231,263
-----------
5,006,918
-----------
BEVERAGES: 2.8%
20,100 Coca-Cola Co. 934,650
28,300 PepsiCo, Inc. 1,361,796
-----------
2,296,446
-----------
BIOTECHNOLOGY: 0.7%
10,464 @ Amgen, Inc. 601,785
-----------
601,785
-----------
CHEMICALS: 0.6%
7,550 Dow Chemical Co. 283,503
5,850 Engelhard Corp. 174,447
3,800 @ Hercules, Inc. 38,152
-----------
496,102
-----------
COMMERCIAL SERVICES: 1.8%
28,900 @ Cendant Corp. 640,424
7,350 H&R Block, Inc. 399,032
12,000 @ Paychex, Inc. 461,640
-----------
1,501,096
-----------
COMPUTERS: 5.0%
14,300 @ Apple Computer, Inc. $ 299,156
20,650 @ Dell, Inc. 712,425
52,200 @ EMC Corp. 717,228
22,937 Hewlett-Packard Co. 497,504
13,850 @ International Business
Machines Corp. 1,253,979
4,900 @ Lexmark Intl., Inc. 379,260
12,800 @ Network Appliance, Inc. 295,808
18,700 Seagate Technology, Inc. --
-----------
4,155,360
-----------
COSMETICS/PERSONAL CARE: 3.0%
23,750 Gillette Co. 801,088
12,650 Kimberly-Clark Corp. 685,883
10,450 Procter & Gamble Co. 1,005,708
-----------
2,492,679
-----------
DIVERSIFIED FINANCIAL SERVICES: 9.2%
10,700 American Express Co. 489,097
4,150 Bear Stearns Cos., Inc. 300,709
7,850 Capital One Financial Corp. 468,802
41,650 Citigroup, Inc. 1,959,215
4,800 Countrywide Financial Corp. 506,880
8,200 Fannie Mae 574,000
34,550 JP Morgan Chase & Co. 1,221,688
8,000 Lehman Brothers Holdings, Inc. 577,680
17,950 Merrill Lynch & Co., Inc. 1,018,663
8,800 Morgan Stanley 486,464
-----------
7,603,198
-----------
ELECTRIC: 2.7%
23,250 @ AES Corp. 206,228
12,750 Centerpoint Energy, Inc. 123,675
6,850 Constellation Energy Group, Inc. 257,834
14,150 @ Edison Intl. 288,943
9,400 Exelon Corp. 581,108
6,000 Southern Co. 175,620
12,600 TXU Corp. 278,964
16,550 Xcel Energy, Inc. 276,385
-----------
2,188,757
-----------
ELECTRICAL COMPONENTS & EQUIPMENT: 0.3%
3,450 Emerson Electric Co. 210,588
-----------
210,588
-----------
ELECTRONICS: 0.4%
4,300 Perkinelmer, Inc. 72,713
19,300 @ Sanmina-SCI Corp. 235,267
-----------
307,980
-----------
FOOD: 1.1%
18,900 Conagra Foods, Inc. 463,050
12,850 HJ Heinz Co. 463,885
-----------
926,935
-----------
FOREST PRODUCTS & PAPER: 0.3%
4,200 International Paper Co. 156,282
4,700 @ Louisiana-Pacific Corp. 85,023
-----------
241,305
-----------
HAND/MACHINE TOOLS: 0.1%
2,550 Snap-On, Inc. 76,551
-----------
76,551
-----------
</Table>
See Accompanying Notes to Financial Statements
86
<Page>
ING
Disciplined
LargeCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------------
HEALTHCARE-PRODUCTS: 2.9%
19,750 @ Boston Scientific Corp. $ 708,828
9,500 Guidant Corp. 539,315
23,800 Johnson & Johnson 1,173,102
-----------
2,421,245
-----------
HEALTHCARE-SERVICES: 2.2%
5,400 @ Anthem, Inc. 389,448
6,400 @ Humana, Inc. 142,912
13,850 UnitedHealth Group, Inc. 746,515
5,500 @ WellPoint Health Networks 514,195
-----------
1,793,070
-----------
HOME FURNISHINGS: 0.2%
2,800 Whirlpool Corp. 191,296
-----------
191,296
-----------
HOUSEHOLD PRODUCTS/WARES: 0.5%
5,550 Fortune Brands, Inc. 379,176
-----------
379,176
-----------
INSURANCE: 4.0%
11,300 @@ ACE Ltd. 411,885
21,150 American Intl. Group 1,225,642
7,000 Chubb Corp. 458,150
5,700 Cigna Corp. 305,805
7,250 Lincoln National Corp. 284,273
15,250 Prudential Financial, Inc. 596,428
-----------
3,282,183
-----------
INTERNET: 0.8%
5,200 @ eBay, Inc. 290,420
11,400 @ Symantec Corp. 374,262
----------
664,682
-----------
MACHINERY-CONSTRUCTION & MINING: 0.3%
2,900 Caterpillar, Inc. 220,545
-----------
220,545
-----------
MACHINERY-DIVERSIFIED: 0.9%
8,150 Deere & Co. 499,025
7,500 Rockwell Automation, Inc. 249,375
-----------
748,400
-----------
MEDIA: 2.4%
17,750 @ Comcast Corp. 556,995
6,500 McGraw-Hill Cos., Inc. 445,250
35,400 @ Time Warner, Inc. 576,312
16,100 Walt Disney Co. 371,749
-----------
1,950,306
-----------
MINING: 0.5%
7,300 @ Alcoa, Inc. 239,513
3,600 Newmont Mining Corp. 173,304
-----------
412,817
-----------
MISCELLANEOUS MANUFACTURING: 5.4%
14,300 @ 3M Co. 1,130,272
5,550 Danaher Corp. 461,760
81,050 General Electric Co. 2,323,703
6,900 Honeywell Intl., Inc. 204,861
16,200 @@ Tyco Intl. Ltd. 371,790
-----------
4,492,386
-----------
OFFICE/BUSINESS EQUIPMENT: 0.5%
9,550 Pitney Bowes, Inc. $ 379,613
-----------
379,613
-----------
OIL AND GAS: 6.3%
16,400 ChevronTexaco Corp. 1,231,639
13,678 ConocoPhillips 776,090
8,250 Devon Energy Corp. 407,220
50,100 Exxon Mobil Corp. 1,812,116
12,300 Marathon Oil Corp. 364,203
12,200 Occidental Petroleum Corp. 447,496
2,850 Sunoco, Inc. 136,829
-----------
5,175,593
-----------
PACKAGING AND CONTAINERS: 0.2%
3,250 @ Sealed Air Corp. 171,503
-----------
171,503
-----------
PHARMACEUTICALS: 4.9%
12,800 Abbott Laboratories 565,760
9,200 Eli Lilly & Co. 630,752
18,250 Merck & Co., Inc. 740,950
63,640 Pfizer, Inc. 2,135,122
-----------
4,072,584
-----------
PIPELINES: 0.2%
19,900 Williams Cos., Inc. 186,662
-----------
186,662
-----------
RETAIL: 10.8%
10,950 @ Bed Bath & Beyond, Inc. 462,528
9,150 Best Buy Co., Inc. 567,300
13,850 CVS Corp. 518,821
7,400 Federated Department Stores 363,266
25,700 Gap, Inc. 552,550
35,450 Home Depot, Inc. 1,303,141
6,350 Lowe's Cos., Inc. 370,205
28,900 McDonald's Corp. 740,707
6,500 RadioShack Corp. 202,475
17,250 @ Staples, Inc. 468,338
14,200 @ Starbucks Corp. 455,394
35,500 Wal-Mart Stores, Inc. 1,975,219
22,100 Walgreen Co. 813,501
4,250 Wendy's Intl., Inc. 165,028
-----------
8,958,473
-----------
SEMICONDUCTORS: 5.9%
16,050 @ Altera Corp. 406,547
35,400 @ Applied Materials, Inc. 860,219
80,150 Intel Corp. 2,679,414
9,950 Maxim Integrated Products 518,196
13,100 Texas Instruments, Inc. 389,856
-----------
4,854,232
-----------
SOFTWARE: 5.0%
8,550 Adobe Systems, Inc. 353,286
5,900 @ Citrix Systems, Inc. 141,718
10,450 IMS Health, Inc. 240,664
86,700 S Microsoft Corp. 2,228,189
39,950 @ Oracle Corp. 479,800
17,800 @ Siebel Systems, Inc. 234,604
12,850 @ Veritas Software Corp. 488,569
-----------
4,166,830
-----------
</Table>
See Accompanying Notes to Financial Statements
87
<Page>
ING
Disciplined
LargeCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS: 5.1%
15,850 @ Avaya, Inc. $ 215,560
56,500 @ Cisco Systems, Inc. 1,280,289
6,250 @ Comverse Technology, Inc. 120,188
17,350 Motorola, Inc. 243,594
29,450 @ Nextel Communications, Inc. 745,969
6,100 Qualcomm, Inc. 271,755
6,100 Scientific-Atlanta, Inc. 176,168
35,250 Verizon Communications, Inc. 1,155,142
-----------
4,208,665
-----------
TOYS/GAMES/HOBBIES: 0.6%
7,450 Hasbro, Inc. 164,720
17,500 Mattel, Inc. 354,200
-----------
518,920
-----------
TRANSPORTATION: 0.8%
9,350 United Parcel Service, Inc. 680,400
-----------
680,400
-----------
Total Common Stock
(Cost $76,300,477) 82,533,364
-----------
<Caption>
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.5%
REPURCHASE AGREEMENT: 0.5%
$ 432,000 Morgan Stanley Repurchase
Agreement dated 11/28/03,
1.030%, due 12/01/03, $432,037
to be recieved upon repurchase
(Collateralized by $450,000
Student Loan Government Fund,
0.000%, Market Value $441,176,
due 12/18/03) 432,000
-----------
Total Short-term Investments
(Cost $432,000) 432,000
-----------
TOTAL INVESTMENTS IN SECURITIES
(COST $76,732,477)* 100.5% $ 82,965,364
OTHER ASSETS AND
LIABILITIES-NET (0.5) (411,090)
----- -------------
NET ASSETS 100.0% $ 82,554,274
===== =============
</Table>
@ Non-income producing security
@@ Foreign Issuer
S Segregated securities for when-issued or delayed delivery securities held at
November 30, 2003.
X Fair value determined by ING Funds Valuation Committee appointed by the
Funds' Board of Directors/Trustees.
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 7,050,699
Gross Unrealized Depreciation (815,621)
-------------
Net Unrealized Appreciation $ 6,235,078
=============
</Table>
See Accompanying Notes to Financial Statements
88
<Page>
ING
MagnaCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCK: 99.2%
AEROSPACE/DEFENSE: 3.1%
145,900 General Dynamics Corp. $ 11,798,933
-------------
11,798,933
-------------
AGRICULTURE: 4.2%
304,315 L Altria Group, Inc. 15,824,380
-------------
15,824,380
-------------
APPAREL: 1.6%
89,900 Nike, Inc. 6,045,775
-------------
6,045,775
-------------
BANKS: 6.0%
134,600 Bank of America Corp. 10,152,878
218,500 Wells Fargo & Co. 12,526,605
-------------
22,679,483
-------------
BUILDING MATERIALS: 1.7%
238,200 L Masco Corp. 6,479,040
-------------
6,479,040
-------------
CHEMICALS: 4.1%
247,200 Dow Chemical Co. 9,282,360
86,500 Praxair, Inc. 6,208,970
-------------
15,491,330
-------------
COMPUTERS: 2.7%
464,056 Hewlett-Packard Co. 10,065,375
-------------
10,065,375
-------------
COSMETICS/PERSONAL CARE: 2.6%
181,200 Kimberly-Clark Corp. 9,824,664
-------------
9,824,664
-------------
DIVERSIFIED FINANCIAL SERVICES: 15.1%
205,000 Citigroup, Inc. 9,643,200
180,000 Fannie Mae 12,600,000
221,300 Freddie Mac 12,043,146
210,400 L Merrill Lynch & Co., Inc. 11,940,200
208,200 L Morgan Stanley 11,509,296
-------------
57,735,842
-------------
ELECTRICAL COMPONENTS & EQUIPMENT: 3.4%
209,800 Emerson Electric Co. 12,806,192
-------------
12,806,192
-------------
ELECTRONICS: 3.0%
402,000 @@ Koninklijke Philips Electronics NV 11,424,840
-------------
11,424,840
-------------
FOOD: 4.4%
191,000 @@ Nestle SA ADR 11,097,100
95,700 @@,L Unilever NV 5,751,570
-------------
16,848,670
-------------
FOREST PRODUCTS & PAPER: 1.7%
173,100 International Paper Co. 6,441,051
-------------
6,441,051
-------------
HEALTHCARE-PRODUCTS: 2.4%
192,700 Baxter Intl., Inc. $ 5,360,914
72,000 L Beckman Coulter, Inc. 3,682,800
-------------
9,043,714
-------------
HEALTHCARE-SERVICES: 2.9%
93,400 L Quest Diagnostics 6,815,398
285,400 @,L Tenet Healthcare Corp. 4,169,694
-------------
10,985,092
-------------
INSURANCE: 7.2%
191,100 American Intl. Group 11,074,245
83,000 John Hancock Financial
Services, Inc. 3,050,250
267,600 Metlife, Inc. 8,747,844
119,300 Prudential Financial, Inc. 4,665,823
-------------
27,538,162
-------------
MEDIA: 2.7%
116,900 Gannett Co., Inc. 10,123,540
-------------
10,123,540
-------------
MISCELLANEOUS MANUFACTURING: 3.8%
481,000 Honeywell Intl., Inc. 14,280,890
-------------
14,280,890
-------------
OIL AND GAS: 12.1%
126,000 Apache Corp. 9,046,800
207,900 @@,L BP PLC ADR 8,875,251
137,500 ChevronTexaco Corp. 10,326,250
313,100 Exxon Mobil Corp. 11,324,827
151,900 @@ Royal Dutch Petroleum Co. 6,820,310
-------------
46,393,438
-------------
PHARMACEUTICALS: 3.5%
331,800 Bristol-Myers Squibb Co. 8,742,930
111,700 Merck & Co., Inc. 4,535,020
-------------
13,277,950
-------------
RETAIL: 2.5%
367,100 McDonald's Corp. 9,408,773
-------------
9,408,773
-------------
SAVINGS AND LOANS: 3.2%
263,000 L Washington Mutual, Inc. 12,048,030
-------------
12,048,030
-------------
SEMICONDUCTORS: 1.3%
143,200 Intel Corp. 4,787,176
-------------
4,787,176
-------------
TELECOMMUNICATIONS: 4.0%
295,700 SBC Communications, Inc. 6,883,896
250,800 Verizon Communications, Inc. 8,218,716
-------------
15,102,612
-------------
Total Common Stock
(Cost $346,824,705) 376,454,952
-------------
</Table>
See Accompanying Notes to Financial Statements
89
<Page>
ING
MagnaCap
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 1.1%
REPURCHASE AGREEMENT: 1.1%
$ 4,145,000 Morgan Stanley Repurchase
Agreement dated 11/28/03,
1.030%, due 12/01/03,
$44,145,356 to be received
upon repurchase (Collateralized
by $4,210,000 Student Loan
Government Fund, 0.000%, Market
Value $4,127,451 due 12/18/03
and U.S. Treasury Bill, 0.000%,
Market Value $24,501,
due 12/11/03) $ 4,145,000
-------------
Total Short-term Investments
(Cost $4,145,000) 4,145,000
-------------
TOTAL INVESTMENTS IN
SECURITIES
(COST $350,969,705)* 100.3% $ 380,599,952
OTHER ASSETS AND
LIABILITIES-NET (0.3) (1,219,164)
----- -------------
NET ASSETS 100.0% $ 379,380,788
===== =============
</Table>
@ Non-income producing security
@@ Foreign Issuer
ADR American Depositary Receipt
PLC Public Limited Company
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 45,237,743
Gross Unrealized Depreciation (15,607,496)
-------------
Net Unrealized Appreciation $ 29,630,247
=============
</Table>
See Accompanying Notes to Financial Statements
90
<Page>
ING
MidCap
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCK: 94.8%
AGRICULTURE: 6.9%
87,840 Loews Corp. $ 2,029,104
26,830 L RJ Reynolds Tobacco Holdings, Inc. 1,481,016
25,640 UST, Inc. 922,784
-------------
4,432,904
-------------
AIRLINES: 3.4%
88,190 @,L AMR Corp. 1,131,478
85,000 L Delta Air Lines, Inc. 1,065,900
-------------
2,197,378
-------------
APPAREL: 2.0%
91,160 @,@@ Tommy Hilfiger Corp. 1,252,538
-------------
1,252,538
-------------
AUTO PARTS & EQUIPMENT: 7.2%
157,610 Delphi Corp. 1,383,816
350,850 L Goodyear Tire & Rubber Co. 2,368,237
105,000 Visteon Corp. 824,250
-------------
4,576,303
-------------
BUILDING MATERIALS: 0.7%
10,731 York Intl. Corp. 428,703
-------------
428,703
-------------
CHEMICALS: 7.2%
75,830 Great Lakes Chemical Corp. 1,722,099
48,050 Lubrizol Corp. 1,447,747
44,470 Sherwin-Williams Co. 1,442,162
-------------
4,612,008
-------------
COMMERCIAL SERVICES: 5.4%
36,250 L RR Donnelley & Sons Co. 1,017,175
496,070 @ Service Corp. 2,455,547
-------------
3,472,722
-------------
COMPUTERS: 1.6%
63,640 @,L Unisys Corp. 1,038,605
-------------
1,038,605
-------------
DIVERSIFIED FINANCIAL SERVICES: 1.3%
24,000 CIT Group, Inc. 836,880
-------------
836,880
-------------
ELECTRIC: 5.0%
134,440 L Allegheny Energy, Inc. 1,445,230
48,380 Alliant Energy Corp. 1,182,891
162,000 @,L Mirant Corp. 52,650
21,770 @,L PG&E Corp. 546,862
-------------
3,227,633
-------------
FOOD: 11.6%
44,000 L Albertson's, Inc. 936,320
212,800 @ Del Monte Foods Co. 2,036,496
56,100 Sensient Technologies Corp. 1,057,485
57,812 @,L Smithfield Foods, Inc. 1,355,691
218,964 L Winn-Dixie Stores, Inc. 1,977,245
-------------
7,363,237
-------------
HAND/MACHINE TOOLS: 1.5%
21,200 Black & Decker Corp. 983,468
-------------
983,468
-------------
HEALTHCARE-SERVICES: 1.1%
46,000 @,L Tenet Healthcare Corp. 672,060
-------------
672,060
-------------
HOUSEHOLD PRODUCTS/WARES: 3.0%
72,280 @,L American Greetings $ 1,526,554
24,110 Tupperware Corp. 371,535
-------------
1,898,089
-------------
INSURANCE: 15.4%
43,170 @ Allmerica Financial Corp. 1,180,700
13,060 American National Insurance 1,096,126
80,960 @ CNA Financial Corp. 1,893,653
45,700 Nationwide Financial Services 1,491,648
127,350 L Phoenix Cos., Inc. 1,432,688
23,500 Safeco Corp. 879,605
119,060 Unumprovident Corp. 1,777,566
-------------
9,751,986
-------------
OFFICE/BUSINESS EQUIPMENT: 4.3%
205,360 IKON Office Solutions, Inc. 1,739,399
84,960 @,L Xerox Corp. 1,034,813
-------------
2,774,212
-------------
OIL AND GAS: 2.3%
83,180 Diamond Offshore Drilling 1,459,809
-------------
1,459,809
-------------
PIPELINES: 3.3%
299,870 EL Paso Corp. 2,129,077
-------------
2,129,077
-------------
RETAIL: 7.4%
137,420 Dillard's, Inc. 2,315,527
208,280 @,L Toys R US, Inc. 2,445,207
-------------
4,760,734
-------------
SEMICONDUCTORS: 1.0%
51,400 @,L Micron Technology, Inc. 668,714
-------------
668,714
-------------
TELECOMMUNICATIONS: 3.2%
180,270 @,L Lucent Technologies, Inc. 576,864
186,430 @,L Tellabs, Inc. 1,491,440
-------------
2,068,304
-------------
Total Common Stock
(Cost $60,363,579) 60,605,364
-------------
TOTAL INVESTMENTS IN
SECURITIES (COST
$60,363,579)* 94.8% $ 60,605,364
OTHER ASSETS AND
LIABILITIES-NET 5.2 3,324,821
----- -------------
NET ASSETS 100.0% $ 63,930,185
===== =============
</Table>
@ Non-income producing security
@@ Foreign Issuer
L Loaned security, a portion or all of the security is on loan at November
30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 5,665,724
Gross Unrealized Depreciation (5,423,939)
-------------
Net Unrealized Appreciation $ 241,785
=============
</Table>
See Accompanying Notes to Financial Statements
91
<Page>
ING
SmallCap
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCK: 94.0%
APPAREL: 5.7%
105,990 @ Skechers U.S.A., Inc. $ 787,506
88,540 @,@@ Tommy Hilfiger Corp. 1,216,539
60,690 @ Vans, Inc. 776,832
-------------
2,780,877
-------------
AUTO PARTS & EQUIPMENT: 8.4%
50,690 @ Aftermarket Technology Corp. 674,684
27,600 Cooper Tire & Rubber Co. 552,276
193,809 L Goodyear Tire & Rubber Co. 1,308,211
204,880 Visteon Corp. 1,608,308
-------------
4,143,479
-------------
BUILDING MATERIALS: 1.5%
18,650 York Intl. Corp. 745,068
-------------
745,068
-------------
CHEMICALS: 10.3%
22,570 @ Cytec Industries, Inc. 818,163
56,380 L Great Lakes Chemical Corp. 1,280,389
22,830 Lubrizol Corp. 687,868
239,150 Polyone Corp. 1,422,942
93,990 Wellman, Inc. 817,713
-------------
5,027,075
-------------
COMMERCIAL SERVICES: 5.6%
52,880 Kelly Services, Inc. 1,506,022
256,010 @ Service Corp. 1,267,250
-------------
2,773,272
-------------
ELECTRICAL COMPONENTS & EQUIPMENT: 4.7%
64,750 Belden, Inc. 1,275,575
58,320 @ Rayovac Corp. 1,049,177
-------------
2,324,752
-------------
ELECTRONICS: 2.8%
104,560 @ Kemet Corp. 1,380,192
-------------
1,380,192
-------------
FOOD: 9.2%
125,440 @ Del Monte Foods Co. 1,200,460
82,430 Interstate Bakeries 1,298,272
58,240 Sensient Technologies Corp. 1,097,824
96,087 L Winn-Dixie Stores, Inc. 867,666
-------------
4,464,222
-------------
HAND/MACHINE TOOLS: 1.1%
38,420 Starrett (L.S.) Co. 548,253
-------------
548,253
-------------
HEALTHCARE-SERVICES: 3.1%
71,700 @,L Orthodontic Centers of America 508,353
15,400 @,L Pacificare Health Systems 1,002,694
-------------
1,511,047
-------------
HOME BUILDERS: 3.1%
66,150 @,L Fleetwood Enterprises, Inc. 672,746
81,300 @ National RV Holdings, Inc. 873,975
-------------
1,546,721
-------------
HOUSEHOLD PRODUCTS/WARES: 4.5%
48,320 @,L American Greetings $ 1,020,518
78,920 Tupperware Corp. 1,216,158
-------------
2,236,676
-------------
HOUSEWARES: 0.8%
10,450 National Presto Industries, Inc. 372,020
-------------
372,020
-------------
INSURANCE: 3.8%
15,000 @ Allmerica Financial Corp. 410,250
3,560 American National Insurance 298,791
102,910 L Phoenix Cos., Inc. 1,157,737
-------------
1,866,778
-------------
IRON/STEEL: 2.2%
117,480 Ryerson Tull, Inc. 1,058,495
-------------
1,058,495
-------------
LEISURE TIME: 1.0%
33,650 @ K2, Inc. 514,845
-------------
514,845
-------------
LODGING: 1.8%
80,510 @ Prime Hospitality Corp. 887,220
-------------
887,220
-------------
MACHINERY-DIVERSIFIED: 2.8%
34,990 Tecumseh Products Co. 1,399,600
-------------
1,399,600
-------------
METAL FABRICATE/HARDWARE: 1.3%
124,620 @ Wolverine Tube, Inc. 655,501
-------------
655,501
-------------
MINING: 1.5%
89,340 @ Stillwater Mining Co. 752,243
-------------
752,243
-------------
MISCELLANEOUS MANUFACTURING: 8.0%
55,300 Brink's Co. 1,227,659
44,550 Federal Signal Corp. 674,933
67,459 Myers Industries, Inc. 845,261
45,730 Trinity Industries, Inc. 1,186,694
-------------
3,934,547
-------------
RETAIL: 7.3%
10,110 Blair Corp. 252,750
89,230 Dillard's, Inc. 1,503,526
47,220 @ Jack in The Box, Inc. 984,537
67,780 @ Payless Shoesource, Inc. 873,006
-------------
3,613,819
-------------
SOFTWARE: 2.6%
45,800 @ American Management Systems 682,878
173,050 @,L Midway Games, Inc. 584,909
-------------
1,267,787
-------------
</Table>
See Accompanying Notes to Financial Statements
92
<Page>
ING
SmallCap
Value
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited) (Continued)
<Table>
<Caption>
SHARES VALUE
- --------------------------------------------------------------------------------
TOYS/GAMES/HOBBIES: 0.9%
33,040 @,L Jakks Pacific, Inc. $ 449,014
-------------
449,014
-------------
Total Common Stock
(Cost $43,265,779) 46,253,503
-------------
TOTAL INVESTMENTS IN
SECURITIES (COST
$43,265,779)* 94.0% $ 46,253,503
OTHER ASSETS AND
LIABILITIES-NET 6.0 2,946,136
----- -------------
NET ASSETS 100.0% $ 49,199,639
===== =============
</Table>
@ Non-income producing security
@@ Foreign Issuer
L Loaned security, a portion or all of the security is on loan at November
30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 5,241,702
Gross Unrealized Depreciation (2,253,978)
-------------
Net Unrealized Appreciation $ 2,987,724
=============
</Table>
See Accompanying Notes to Financial Statements
93
<Page>
ING
Convertible
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------------------
COMMON STOCK: 4.8%
BIOTECHNOLOGY: 0.4%
35,000 @,L Medimmune, Inc. $ 833,000
---------------
833,000
---------------
FOOD: 1.3%
86,262 @ Dean Foods Co. 2,830,256
---------------
2,830,256
---------------
HEALTHCARE-SERVICES: 0.9%
74,600 @ Community Health Systems, Inc. 2,020,168
---------------
2,020,168
---------------
MISCELLANEOUS MANUFACTURING: 0.5%
36,000 General Electric Co. 1,032,120
---------------
1,032,120
---------------
RETAIL: 1.1%
60,000 Wendy's Intl., Inc. 2,329,800
---------------
2,329,800
---------------
TELECOMMUNICATIONS: 0.6%
30,000 Qualcomm, Inc. 1,336,500
---------------
1,336,500
---------------
Total Common Stock
(Cost $8,646,232) 10,381,844
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------
CONVERTIBLE CORPORATE BONDS: 72.1%
ADVERTISING: 0.5%
$ 1,000,000 L Lamar Advertising Co., 2.88%,
due 12/31/10 997,500
---------------
997,500
---------------
AEROSPACE/DEFENSE: 0.7%
1,960,000 Spacehab, Inc., 8.00%,
due 10/15/07 1,543,500
---------------
1,543,500
---------------
AGRICULTURE: 0.8%
1,490,000 L Bunge Limited Finance Corp.,
3.75%, due 11/15/22 1,627,825
---------------
1,627,825
---------------
AIRLINES: 0.5%
990,000 # JetBlue Airways Corp., 3.50%,
due 07/15/33 1,155,825
---------------
1,155,825
---------------
AUTO PARTS & EQUIPMENT: 1.0%
4,000,000 L Lear Corp., 3.68%, due 02/20/22 2,070,000
---------------
2,070,000
---------------
BIOTECHNOLOGY: 4.1%
2,500,000 Amgen, Inc., 1.03%, due 03/01/32 1,871,875
1,485,000 # ICOS Corp., 2.00%, due 07/01/23 1,520,269
5,511,000 L Millennium Pharmaceuticals, Inc.,
5.50%, due 01/15/07 5,442,112
---------------
8,834,256
---------------
BUILDING MATERIALS: 1.1%
$ 2,000,000 @@ Gujarat Ambuja Cements, 1.00%,
due 01/30/06 $ 2,433,602
---------------
2,433,602
---------------
COAL: 1.0%
1,980,000 # Massey Energy Co., 4.75%,
due 05/15/23 2,118,600
---------------
2,118,600
---------------
COMMERCIAL SERVICES: 1.5%
1,475,000 # Exult, Inc., 2.50%, due 10/01/10 1,410,469
2,000,000 L Quanta Services, Inc., 4.00%,
due 07/01/07 1,825,000
---------------
3,235,469
---------------
COMPUTERS: 0.4%
4,000 # ASML Holding NV, 4.25%,
due 11/30/04 4,055
100,000 @@ Bull SA, 2.25%, due 01/01/05 804,325
---------------
808,380
---------------
DISTRIBUTION/WHOLESALE: 1.5%
4,000,000 Costco Wholesale Corp., 1.37%,
due 08/19/17 3,320,000
---------------
3,320,000
---------------
ELECTRIC: 2.3%
1,000,000 # Centerpoint Energy, Inc., 3.75%,
due 05/15/23 1,066,250
3,960,000 L PPL Energy Supply LLC, 2.63%,
due 05/15/23 3,920,400
---------------
4,986,650
---------------
ELECTRONICS: 5.0%
1,500,000 #,L Flextronics Intl. Ltd., 1.00%,
due 08/01/10 1,871,250
4,495,000 # Flir Systems, Inc., 3.00%,
due 06/01/23 4,770,319
2,500,000 # Invision Technologies, Inc., 3.00%,
due 10/01/23 2,800,000
990,000 #,L Vishay Intertechnology, Inc., 3.63%,
due 08/01/23 1,316,700
---------------
10,758,269
---------------
FOOD: 1.0%
3,000,000 # General Mills, Inc., 1.89%,
due 10/28/22 2,103,750
---------------
2,103,750
---------------
HEALTHCARE-SERVICES: 2.7%
2,000,000 Laboratory Corp. of America Holdings,
1.89%, due 09/11/21 1,432,500
1,000,000 L Quest Diagnostics, 1.75%,
due 11/30/21 1,033,750
5,000,000 L Universal Health Services, Inc., .43%,
due 06/23/20 3,318,750
---------------
5,785,000
---------------
</Table>
See Accompanying Notes to Financial Statements
94
<Page>
<Table>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------
INSURANCE: 2.6%
$ 3,770,000 American Intl. Group, .50%,
due 05/15/07 $ 3,510,812
1,970,000 # AmerUs Group Co., 2.00%,
due 03/06/32 2,159,613
---------------
5,670,425
---------------
INTERNET: 1.9%
4,000,000 E*TRADE Group, Inc., 6.00%,
due 02/01/07 4,030,000
---------------
4,030,000
---------------
LEISURE TIME: 0.9%
2,000,000 Aristocrat Leisure Ltd., 5.00%,
due 05/31/06 1,885,000
---------------
1,885,000
---------------
LODGING: 1.9%
2,000,000 Four Seasons Hotels, Inc., 4.18%,
due 09/23/29 4,170,000
---------------
4,170,000
---------------
MINING: 3.4%
1,500,000 @@ Inco Ltd., 0.31%, due 03/29/21 1,421,250
1,985,000 #,@@ Inco Ltd., 1.00%, due 03/14/23 2,453,956
3,000,000 #,@@,L Placer Dome, Inc., 2.75%,
due 10/15/23 3,543,750
---------------
7,418,956
---------------
MISCELLANEOUS MANUFACTURING: 3.6%
3,430,000 #,L Eastman Kodak Co., 3.38%,
due 10/15/33 3,721,550
3,500,000 # Tyco Intl. Group SA, 2.75%,
due 01/15/18 4,077,500
---------------
7,799,050
---------------
OIL AND GAS: 3.8%
3,498,000 Devon Energy Corp., 4.90%,
due 08/15/08 3,567,960
2,500,000 L Kerr-McGee Corp., 5.25%,
due 02/15/10 2,581,250
1,985,000 # Pride Intl., Inc., 3.25%,
due 05/01/33 1,982,519
---------------
8,131,729
---------------
OIL AND GAS SERVICES: 1.3%
1,975,000 Cooper Cameron Corp., 1.75%,
due 05/17/21 1,930,563
1,000,000 # Schlumberger Ltd., 2.13%,
due 06/01/23 945,000
---------------
2,875,563
---------------
PACKAGING AND CONTAINERS: 1.0%
2,000,000 #,L Sealed Air Corp., 3.00%,
due 06/30/33 2,077,500
---------------
2,077,500
---------------
PHARMACEUTICALS: 5.2%
990,000 # Amylin Pharmaceuticals, Inc., 2.25%,
due 06/30/08 1,071,675
5,000,000 L Cephalon, Inc., 2.50%, due 12/15/06 4,712,500
3,000,000 # NPS Pharmaceuticals, Inc., 3.00%,
due 06/15/08 3,307,500
$ 1,500,000 # Watson Pharmaceuticals, Inc.,
1.75%, due 03/15/23 $ 1,995,000
---------------
11,086,675
---------------
RETAIL: 2.0%
6,000,000 Duane Reade, Inc., 2.15%,
due 04/16/22 3,180,000
990,000 # Triarc Cos., 5.00%, due 05/15/23 1,059,300
---------------
4,239,300
---------------
SEMICONDUCTORS: 2.7%
3,000,000 L Advanced Micro Devices, Inc.,
4.75%, due 02/01/22 3,262,500
1,000,000 # Cypress Semiconductor Corp.,
1.25%, due 06/15/08 1,580,000
1,000,000 LTX Corp., 4.25%, due 08/15/06 977,500
---------------
5,820,000
---------------
SOFTWARE: 3.1%
2,000,000 # Fair Isaac Corp., 1.50%, due 08/15/23 2,150,000
2,500,000 L First Data Corp., 2.00%, due 03/01/08 2,618,750
1,370,000 # MSC Software Corp., 2.50%,
due 05/05/08 1,834,088
---------------
6,602,838
---------------
TELECOMMUNICATIONS: 14.0%
5,000,000 Aether Systems, Inc., 6.00%,
due 03/22/05 4,943,750
1,980,000 #,L Commonwealth Telephone Enterprises, Inc.,
3.25%, due 07/15/23 1,994,850
2,980,000 Finisar Corp., 5.25%, due 10/15/08 2,976,275
2,000,000 L Nextel Communications, Inc.,
6.00%, due 06/01/11 2,350,000
5,000,000 # Nextel Partners, Inc., 1.50%,
due 11/15/085,868,749
1,000,000 L Nortel Networks Corp., 4.25%,
due 09/01/08 948,750
1,470,000 Primus Telecommunications GP,
5.75%, due 02/15/07 1,440,600
1,970,000 #,L Primus Telecommunications GP,
3.75%, due 09/15/10 2,822,025
1,980,000 #,L RF Micro Devices, Inc., 1.50%,
due 07/01/10 3,390,750
1,000,000 # Utstarcom, Inc., .88%, due 03/01/08 1,736,250
1,000,000 L Utstarcom, Inc., .88%, due 03/01/08 1,736,250
---------------
30,208,249
---------------
TRANSPORTATION: 0.6%
985,000 #,L Yellow Corp., 5.00%, due 08/08/23 1,188,156
---------------
1,188,156
---------------
Total Convertible Corporate Bonds
(Cost $140,098,777) 154,982,067
---------------
CORPORATE BONDS: 1.3%
SEMICONDUCTORS: 1.1%
0 @@ Silicon-On-Insulator Technologies 2,453,610
TRANSPORTATION: 0.2%
490,000 #,L Yellow Corp., 3.38%, due 11/25/23 506,538
---------------
Total Corporate Bonds
(Cost $2,861,578) 2,960,148
---------------
</Table>
See Accompanying Notes to Financial Statements
95
<Page>
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------
MUTUAL FUNDS: 2.2%
EQUITY FUND: 2.2%
$ 45,000 L SPDR Trust Series 1 $ 4,792,500
---------------
Total Mutual Funds
(Cost $3,977,768) 4,792,500
---------------
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------------------
PREFERRED STOCK: 19.2%
AUTO MANUFACTURERS: 2.8%
55,000 Ford Motor Co. Capital Trust II 2,743,950
39,600 L General Motors Corp. 1,113,948
85,000 General Motors Corp. 2,132,650
---------------
5,990,548
---------------
DIVERSIFIED FINANCIAL SERVICES: 1.0%
88,300 Gabelli Asset Management, Inc. 2,233,990
---------------
2,233,990
---------------
ELECTRIC: 1.0%
45,000 Calpine Capital Trust II 2,131,875
---------------
2,131,875
---------------
ELECTRICAL COMPONENTS & EQUIPMENT: 0.1%
3,500 # General Cable Corp. 198,188
---------------
198,188
---------------
ENVIRONMENTAL CONTROL: 1.1%
34,700 Allied Waste Industries, Inc. 2,451,208
---------------
2,451,208
---------------
FOREST PRODUCTS & PAPER: 0.6%
25,000 International Paper Capital 1,215,625
---------------
1,215,625
---------------
HEALTHCARE-SERVICES: 0.8%
20,000 Anthem, Inc. 1,705,800
---------------
1,705,800
---------------
INSURANCE: 5.7%
60,000 Hartford Financial Services Group, Inc. 3,429,000
39,200 PMI Group, Inc. 993,720
20,000 Prudential Financial, Inc. 1,234,000
62,000 Reinsurance Group of America 3,592,899
118,000 @,L Travelers Property Casualty Corp. 2,809,580
---------------
12,059,199
---------------
MEDIA: 1.0%
19,850 News Corp Finance Trust II 2,079,288
---------------
2,079,288
---------------
OFFICE/BUSINESS EQUIPMENT: 0.5%
9,900 Xerox Corp. 1,167,210
---------------
1,167,210
---------------
OIL AND GAS: 1.6%
29,400 Ameranda Hess Corp. 1,492,050
15,000 # Chesapeake Energy Corp. 1,033,125
9,700 Chesapeake Energy Corp. 1,001,525
---------------
3,526,700
---------------
PHARMACEUTICALS: 1.3%
44,500 Omnicare, Inc. 2,693,585
---------------
2,693,585
---------------
RETAIL: 0.5%
30,000 Toys R US, Inc. $ 1,140,000
---------------
1,140,000
---------------
TELECOMMUNICATIONS: 1.2%
2,455 Lucent Technologies Capital Trust I 2,624,550
1 @,I,X Winstar Communications, Inc. --
51,931 @,I,X Winstar Communications, Inc. 5
---------------
2,624,555
---------------
Total Preferred Stock
(Cost $40,018,033) 41,217,771
---------------
Total Long-Term Investments
(Cost $195,602,388) 214,334,330
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 0.1%
REPURCHASE AGREEMENT: 0.1%
$ 184,000 Morgan Stanley Repurchase Agreement
dated 11/28/03, 1.030%, due 12/01/03,
$184,016 to be received upon
repurchase (Collateralized by
$185,080 REFC, 0.000%, Market Value
$188,782 due 07/15/29) 184,000
---------------
Total Short-term Investments
(Cost $184,000) 184,000
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $195,786,388)* 99.7% $ 214,518,330
OTHER ASSETS AND LIABILITIES-NET 0.3 563,831
----- ---------------
NET ASSETS 100.0% $ 215,082,161
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
# Securities with purchase pursuant to Rule 144A, under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers. These securities have been determined to be liquid
under the guidelines established by the Fund's Board of Trustees.
I Illiquid Security
L Loaned security, a portion or all of the security is on loan at November
30, 2003
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 22,240,681
Gross Unrealized Depreciation (3,609,432)
---------------
Net Unrealized Appreciation $ 18,631,249
===============
</Table>
See Accompanying Notes to Financial Statements
96
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------------------
COMMON STOCK: 55.4%
AEROSPACE/DEFENSE: 0.7%
6,100 General Dynamics Corp. $ 493,307
---------------
493,307
---------------
AIRLINES: 0.3%
10,900 Southwest Airlines Co. 195,982
---------------
195,982
---------------
AUTO MANUFACTURERS: 0.9%
39,600 @ General Motors Corp. 657,360
---------------
657,360
---------------
BANKS: 3.2%
13,200 Bank of America Corp. 995,676
15,000 US Bancorp 415,650
15,600 Wells Fargo & Co. 894,348
---------------
2,305,674
---------------
BIOTECHNOLOGY: 1.0%
18,055 @ Biogen IDEC, Inc. 689,340
---------------
689,340
---------------
CHEMICALS: 0.6%
12,200 Dow Chemical Co. 458,110
---------------
458,110
---------------
COMMERCIAL SERVICES: 0.8%
24,900 @ Cendant Corp. 551,784
---------------
551,784
---------------
COMPUTERS: 1.5%
39,000 @ EMC Corp. 535,860
25,884 Hewlett-Packard Co. 561,424
---------------
1,097,284
---------------
DIVERSIFIED FINANCIAL SERVICES: 8.2%
8,300 Capital One Financial Corp. 495,676
38,800 Citigroup, Inc. 1,825,153
38,000 @ E*TRADE Group, Inc. 411,540
6,100 Fannie Mae 427,000
4,900 Goldman Sachs Group, Inc. 470,792
12,300 JP Morgan Chase & Co. 434,928
8,300 Lehman Brothers Holdings, Inc. 599,343
7,400 Merrill Lynch & Co., Inc. 419,950
15,700 Morgan Stanley 867,896
---------------
5,952,278
---------------
ELECTRONICS: 1.0%
13,600 Parker Hannifin Corp. 747,864
---------------
747,864
---------------
FOREST PRODUCTS & PAPER: 0.7%
11,700 Bowater, Inc. 478,530
---------------
478,530
---------------
HEALTHCARE-PRODUCTS: 0.8%
12,100 Johnson & Johnson 596,409
---------------
596,409
---------------
HEALTHCARE-SERVICES: 1.1%
8,400 @ WellPoint Health Networks 785,316
---------------
785,316
---------------
INSURANCE: 5.4%
17,200 American Intl. Group $ 996,740
9,400 Chubb Corp. 615,230
19,400 Hartford Financial Services Group, Inc. 1,067,000
13,600 PMI Group, Inc. 506,328
48,400 Unumprovident Corp. 722,612
---------------
3,907,910
---------------
MEDIA: 2.0%
13,100 @ Fox Entertainment Group, Inc. 374,005
35,800 @ Time Warner, Inc. 582,824
19,800 Walt Disney Co. 457,182
---------------
1,414,011
---------------
MINING: 3.4%
44,700 @ Alcoa, Inc. 1,466,607
22,000 Freeport-McMoRan Copper & Gold, Inc. 957,660
---------------
2,424,267
---------------
MISCELLANEOUS MANUFACTURING: 3.7%
7,200 Eaton Corp. 741,528
22,100 General Electric Co. 633,607
27,500 Honeywell Intl., Inc. 816,475
22,500 @@ Tyco Intl. Ltd. 516,375
---------------
2,707,985
---------------
OIL AND GAS: 4.8%
15,600 Anadarko Petroleum Corp. 700,908
11,768 Apache Corp. 844,942
7,400 ChevronTexaco Corp. 555,740
27,600 Exxon Mobil Corp. 998,292
19,000 @ Transocean, Inc. 368,220
---------------
3,468,102
---------------
OIL AND GAS SERVICES: 2.8%
17,300 Baker Hughes, Inc. 499,278
15,300 @ BJ Services Co. 487,917
21,100 Halliburton Co. 492,685
15,200 @ Smith Intl., Inc. 570,608
---------------
2,050,488
---------------
PHARMACEUTICALS: 3.1%
5,100 @ Barr Laboratories, Inc. 420,954
34,775 Pfizer, Inc. 1,166,701
17,200 Wyeth 677,680
---------------
2,265,335
---------------
RETAIL: 3.2%
21,300 Home Depot, Inc. 782,988
11,150 XX International Fast Food Corp. --
22,300 McDonald's Corp. 571,549
34,600 @ Staples, Inc. 939,390
---------------
2,293,927
---------------
SAVINGS AND LOANS: 1.2%
18,600 Washington Mutual, Inc. 852,066
---------------
852,066
---------------
SEMICONDUCTORS: 1.6%
25,700 @ National Semiconductor Corp. 1,149,304
---------------
1,149,304
---------------
</Table>
See Accompanying Notes to Financial Statements
97
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS: 2.8%
26,800 AT&T Corp. $ 531,444
23,400 SBC Communications, Inc. 544,752
27,848 Verizon Communications, Inc. 912,579
---------------
1,988,775
---------------
TRANSPORTATION: 0.6%
10,200 Norfolk Southern Corp. 218,382
3,400 Union Pacific Corp. 216,512
---------------
434,894
---------------
Total Common Stock
(Cost $36,163,202) 39,966,302
---------------
<Caption>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------
CORPORATE BONDS: 12.8%
AIRLINES: 0.8%
$ 217,000 American Airlines, Inc., 7.024%,
due 10/15/09 216,239
117,000 American Airlines, Inc., 7.324%,
due 10/15/09 96,366
57,917 American Airlines, Inc., 6.977%,
due 05/23/21 51,477
34,550 Continental Airlines, Inc., 6.900%,
due 07/02/19 34,011
42,530 Continental Airlines, Inc., 6.545%,
due 08/02/20 41,984
30,000 Delta Air Lines, Inc., 7.779%,
due 11/18/05 27,266
23,000 Delta Air Lines, Inc., 7.299%,
due 09/18/06 20,463
79,893 US Airways Pass Through Trust,
6.850%, due 01/30/18 75,533
---------------
563,339
---------------
AUTO MANUFACTURERS: 0.3%
23,000 Ford Motor Co., 6.625%,
due 10/01/28 19,905
49,000 Ford Motor Co., 6.375%,
due 02/01/29 40,997
138,000 General Motors Corp., 8.375%,
due 07/15/33 150,765
---------------
211,667
---------------
BANKS: 2.2%
82,000 #,@@ Banco Bradesco SA, 8.750%,
due 10/24/13 85,690
52,000 Bank of America Corp., 6.375%,
due 02/15/08 57,447
14,000 # BankAmerica Institutional, Class B,
7.700%, due 12/31/26 15,637
30,000 BankBoston Capital Trust III,
1.890%, due 06/15/27 28,354
7,000 BankBoston Corp., 1.746%,
due 06/08/28 6,494
53,000 Barnett Capital I, 8.060%,
due 12/01/26 60,057
18,000 Barnett Capital II, 7.950%,
due 12/01/26 20,170
4,000 Chase Capital VI, 1.788%,
due 08/01/28 3,663
$ 45,000 # Corestates Capital Trust II, 1.800%,
due 01/15/27 $ 42,063
203,000 # Dresdner Funding Trust I, 8.151%,
due 06/30/31 225,478
53,000 FBS Capital I, 8.090%, due 11/15/26 59,898
108,000 First Union Institutional Capital II,
7.850%, due 01/01/27 121,966
84,000 #,@@ HBOS PLC, 5.375%, due 11/29/49 83,330
20,000 @@,C Hongkong & Shanghai Banking
Corp. Ltd., 1.313%, due 07/29/49 16,354
40,000 @@ HSBC Bank PLC, 1.163%,
due 06/29/49 32,311
88,000 @@ HSBC Holdings PLC, 7.500%,
due 07/15/09 102,397
53,000 M & T Bank Corp., 3.850%,
due 04/01/13 52,432
100,000 Mellon Capital I, 7.720%,
due 12/01/26 110,659
40,000 @@,C National Westminster Bank PLC,
1.313%, due 11/29/49 33,266
8,000 Nationsbank Cap Trust III, 1.700%,
due 01/15/27 7,515
70,000 # Rabobank Capital Funding II,
5.260%, due 12/29/49 70,000
47,000 RBS Capital Trust I, 4.709%,
due 12/29/49 44,286
20,000 @@ Societe Generale, 1.309%,
due 11/29/49 16,257
50,000 @@,C Standard Chartered PLC, 1.275%,
due 01/29/49 38,077
10,000 @@,C Standard Chartered PLC, 1.250%,
due 07/29/49 7,323
120,000 @@,C Standard Chartered PLC, 1.500%,
due 11/29/49 90,147
100,000 @@,C Standard Chartered PLC, 1.400%,
due 12/29/49 75,626
70,000 Wells Fargo & Co., 3.120%,
due 08/15/08 68,610
---------------
1,575,507
---------------
BEVERAGES: 0.3%
96,000 #,@@ Cia Brasileira de Bebidas, 8.750%,
due 09/15/13 101,760
20,000 Constellation Brands, Inc., 8.000%,
due 02/15/08 22,275
86,000 # Miller Brewing Co., 4.250%,
due 08/15/08 86,560
---------------
210,595
---------------
CHEMICALS: 0.0%
19,000 Dow Chemical Co., 5.750%,
due 11/15/09 20,208
---------------
20,208
---------------
COMMERCIAL SERVICES: 0.1%
27,000 @@ Quebecor Media, Inc., 11.125%,
due 07/15/11 31,185
58,000 United Rentals North America, Inc.,
10.750%, due 04/15/08 65,105
---------------
96,290
---------------
</Table>
See Accompanying Notes to Financial Statements
98
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES: 1.2%
$ 75,000 Boeing Capital Corp., 7.375%,
due 09/27/10 $ 85,993
110,000 X,#,@@ Brazilian Merchant Voucher Receivables Ltd.,
5.911%, due 06/15/11 108,625
57,000 Citigroup Capital II, 7.750%,
due 12/01/36 64,111
85,000 Countrywide Home Loans, Inc.,
4.250%, due 12/19/07 86,658
105,000 # Farmers Exchange Capital, 7.050%,
due 07/15/28 94,901
14,000 Ford Motor Credit Co., 5.625%,
due 10/01/08 13,978
38,000 Ford Motor Credit Co., 7.375%,
due 10/28/09 40,248
136,000 XX,# Mangrove Bay Pass-Through Trust,
6.102%, due 07/15/33 134,683
20,000 Nexstar Finance, Inc., 12.000%,
due 04/01/08 22,450
61,000 # OneAmerica Financial Partners, Inc.,
7.000%, due 10/15/33 60,201
65,000 #,@@ PF Export Receivables Master Trust,
3.748%, due 06/01/13 62,999
58,473 #,@@ PF Export Receivables Master Trust,
6.436%, due 06/01/15 58,467
6,000 Technical Olympic USA, Inc.,
10.375%, due 07/01/12 6,690
30,000 # Wachovia Capital Trust V, 7.965%,
due 06/01/27 34,472
---------------
874,476
---------------
ELECTRIC: 1.1%
92,000 # Consumers Energy Co., 4.800%,
due 02/17/09 93,268
25,000 @@ Empresa Nacional de Electricidad
SA/Chile, 7.750%, due 07/15/08 26,864
199,000 @@ Empresa Nacional de Electricidad SA/Chile,
8.350%, due 08/01/13 219,516
81,000 # Indianapolis Power & Light, 6.300%,
due 07/01/13 83,394
36,000 Nisource Finance Corp., 7.625%,
due 11/15/05 39,340
82,000 # Ohio Edison Co., 4.000%,
due 05/01/08 80,605
120,000 Ohio Power Co., 6.375%,
due 07/15/33 121,655
65,000 # PG&E Corp., 6.875%, due 07/15/08 69,550
18,000 # Power Contract Financing LLC,
5.200%, due 02/01/06 18,247
18,000 # Power Contract Financing LLC,
6.256%, due 02/01/10 18,101
---------------
770,540
---------------
ENTERTAINMENT: 0.1%
26,000 Cinemark USA, Inc., 9.000%,
due 02/01/13 28,990
27,000 Six Flags, Inc., 9.750%, due 06/15/07 28,080
---------------
57,070
---------------
ENVIRONMENTAL CONTROL: 0.1%
73,000 Allied Waste North America,
7.625%, due 01/01/06 76,650
---------------
76,650
---------------
FOOD: 0.5%
$ 38,000 Kroger Co., 7.250%, due 06/01/09 $ 43,133
26,000 Kroger Co., 5.500%, due 02/01/13 26,381
70,000 Safeway, Inc., 4.800%, due 07/16/07 72,421
103,000 Supervalu, Inc., 7.875%,
due 08/01/09 119,635
97,000 Tyson Foods, Inc., 7.250%,
due 10/01/06 106,219
---------------
367,789
---------------
FOREST PRODUCTS & PAPER: 0.3%
51,000 @@ Abitibi-Consolidated, Inc., 6.950%,
due 12/15/06 52,388
29,000 @@ Abitibi-Consolidated, Inc., 6.950%,
due 04/01/08 29,564
52,000 Georgia-Pacific Corp., 8.875%,
due 02/01/10 59,150
68,000 Weyerhaeuser Co., 7.375%,
due 03/15/32 72,800
---------------
213,902
---------------
HOME BUILDERS: 0.0%
13,000 K Hovnanian Enterprises, Inc.,
6.500%, due 01/15/14 13,033
---------------
13,033
---------------
INSURANCE: 0.4%
87,000 # Farmers Insurance Exchange,
8.625%, due 05/01/24 89,871
58,000 # Monumental Global Funding II,
3.850%, due 03/03/08 58,226
95,000 # Zurich Capital Trust I, 8.376%,
due 06/01/37 108,703
---------------
256,800
---------------
IRON/STEEL: 0.0%
50,000 Armco, Inc., 9.000%, due 09/15/07 35,250
---------------
35,250
---------------
LEISURE TIME: 0.1%
42,000 @@ Royal Caribbean Cruises Ltd.,
7.000%, due 10/15/07 44,573
---------------
44,573
---------------
LODGING: 0.3%
45,000 Mandalay Resort Group, 10.250%,
due 08/01/07 51,638
68,000 MGM Mirage, 6.000%, due 10/01/09 69,275
68,000 Park Place Entertainment Corp.,
9.375%, due 02/15/07 76,160
36,000 Starwood Hotels & Resorts Worldwide, Inc.,
7.375%, due 05/01/07 38,745
---------------
235,818
---------------
MEDIA: 0.5%
29,000 AOL Time Warner, Inc., 6.875%,
due 05/01/12 32,311
42,000 # CCO Holdings LLC/CCO Holdings Capital Corp.,
8.750%, due 11/15/13 41,580
75,000 Comcast Corp., 10.625%,
due 07/15/12 95,201
26,000 CSC Holdings, Inc., 10.500%,
due 05/15/16 28,860
</Table>
See Accompanying Notes to Financial Statements
99
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------
MEDIA (CONTINUED)
$ 49,000 # Dex Media, Inc., 8.000%,
due 11/15/13 $ 49,980
25,000 # Echostar DBS Corp., 4.410%,
due 10/01/08 25,938
34,000 #, @@ Echostar DBS Corp., 5.750%,
due 10/01/08 34,213
26,000 Spanish Broadcasting System,
9.625%, due 11/01/09 27,560
41,000 Time Warner, Inc., 6.950%,
due 01/15/28 43,295
---------------
378,938
---------------
MISCELLANEOUS MANUFACTURING: 0.1%
105,000 General Electric Co., 5.000%,
due 02/01/13 105,576
---------------
105,576
---------------
MULTI-NATIONAL: 0.3%
83,000 @@ Corp Andina de Fomento CAF,
6.875%, due 03/15/12 92,456
100,000 @@ Corp Andina de Fomento CAF,
5.200%, due 05/21/13 99,506
---------------
191,962
---------------
OIL AND GAS: 0.9%
65,000 Amerada Hess Corp., 5.900%,
due 08/15/06 69,668
41,000 Chesapeake Energy Corp., 9.000%,
due 08/15/12 47,150
90,000 Enterprise Products Partners LP,
6.875%, due 03/01/33 93,715
215,000 @@ Husky Oil Co., 8.900%, due 08/15/28 251,819
111,000 Pemex Project Funding Master Trust,
7.375%, due 12/15/14 117,105
45,000 Valero Energy Corp., 8.750%,
due 06/15/30 55,037
44,000 Valero Energy Corp., 7.500%,
due 04/15/32 48,408
---------------
682,902
---------------
PACKAGING AND CONTAINERS: 0.4%
32,000 @@ Crown European Holdings SA,
10.875%, due 03/01/13 37,120
78,000 Owens-Brockway, 8.875%,
due 02/15/09 84,825
91,000 # Sealed Air Corp., 6.950%,
due 05/15/09 101,607
82,000 # Sealed Air Corp., 5.625%,
due 07/15/13 83,271
---------------
306,823
---------------
PIPELINES: 0.4%
105,000 CenterPoint Energy Resources Corp.,
8.125%, due 07/15/05 112,189
130,000 Plains All American Pipeline LP/PAA
Finance Corp., 7.750%, due 10/15/12 149,500
---------------
261,689
---------------
REAL ESTATE: 0.3%
$ 78,000 EOP Operating LP, 7.750%,
due 11/15/07 $ 89,107
94,000 Liberty Property LP, 7.750%,
due 04/15/09 109,282
---------------
198,389
---------------
REITs: 0.3%
24,000 Liberty Property Trust, 6.375%,
due 08/15/12 25,776
103,000 Simon Property Group LP, 6.375%,
due 11/15/07 112,968
53,000 Simon Property Group LP, 4.875%,
due 03/18/10 53,604
---------------
192,348
---------------
SAVINGS AND LOANS: 0.1%
88,000 Washington Mutual, Inc., 4.375%,
due 01/15/08 90,094
---------------
90,094
---------------
TELECOMMUNICATIONS: 1.7%
8,000 # ACC Escrow Corp., 10.000%,
due 08/01/11 8,800
31,000 American Tower Corp., 9.375%,
due 02/01/09 32,705
13,000 # American Towers, Inc., 7.250%,
due 12/01/11 13,098
201,000 AT&T Corp., 7.800%, due 11/15/11 228,619
79,000 AT&T Wireless Services, Inc.,
8.125%, due 05/01/12 90,337
26,000 @ MCI Communications Corp., 7.81%,
due 08/15/062 1,125
26,000 Nextel Communications, Inc.,
7.375%, due 08/01/15 27,495
17,000 Qwest Communications Intl.,
7.500%, due 11/01/08 17,574
24,000 # Qwest Corp., 8.875%, due 03/15/12 27,360
39,000 # Qwest Services Corp., 13.500%,
due 12/15/10 46,069
83,000 Sprint Capital Corp., 6.000%,
due 01/15/07 87,702
99,000 Sprint Capital Corp., 6.875%,
due 11/15/28 93,578
150,000 TCI Communications Finance,
9.650%, due 03/31/27 182,062
116,000 @@ TELUS Corp., 8.000%, due 06/01/11 133,447
43,000 Verizon Florida, Inc., 6.125%,
due 01/15/13 45,914
170,000 Verizon Virginia, Inc., 4.625%,
due 03/15/13 162,596
500,000 I WinStar Communications, Inc.,
0.00%, due 04/15/10 50
---------------
1,218,531
---------------
Total Corporate Bonds
(Cost $9,528,906) 9,250,759
---------------
COLLATERALIZED MORTGAGE OBLIGATIONS: 7.9%
AUTOMOBILE: 0.1%
40,000 USAA Auto Owner Trust, 2.040%,
due 02/16/10 39,334
---------------
39,334
---------------
</Table>
See Accompanying Notes to Financial Statements
100
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------
BANKS: 0.4%
$ 276,176 XX Bank of America Mortgage Services,
1.570%, due 11/25/33 $ 276,090
---------------
276,090
---------------
COMMERCIAL MORTGAGE
BACKED SECURITIES: 2.3%
303,000 CS First Boston Mortgage Securities
Corp., 3.861%, due 03/15/36 302,259
100,000 CS First Boston Mortgage Securities
Corp., 3.382%, due 05/15/38 94,770
40,000 CS First Boston Mortgage Securities
Corp., 7.580%, due 04/14/62 46,945
215,000 DLJ Commercial Mortgage Corp.,
6.240%, due 11/12/31 235,988
570,000 DLJ Commercial Mortgage Corp.,
7.300%, due 06/10/32 656,782
97,000 GE Capital Commercial Mortgage
Corp., 5.994%, due 12/10/35 105,351
75,000 GMAC Commercial Mortgage Securities, Inc.,
6.700%, due 04/15/34 84,409
62,000 JP Morgan Chase Commercial Mortgage Securities
Corp., 5.161%, due 10/12/37 63,399
150,000 Wachovia Bank Commercial Mortgage Trust,
3.989%, due 06/15/35 140,222
---------------
1,730,125
---------------
CREDIT CARD: 0.4%
55,000 Bank One Issuance Trust, 4.540%,
due 09/15/10 55,873
55,000 Capital One Master Trust, 4.900%,
due 03/15/10 57,766
95,000 Citibank Credit Card Issuance Trust,
5.650%, due 06/16/08 101,859
75,000 MBNA Credit Card Master Note Trust,
4.950%, due 06/15/09 79,591
---------------
295,089
---------------
HOME EQUITY: 1.7%
248,000 XX Bayview Financial Acquisition Trust,
1.66%, due 12/28/34 248,000
465,777 Emergent Home Equity Loan Trust,
7.080%, due 12/15/28 495,064
172,000 XX Merrill Lynch Mortgage Investors, Inc.,
1.46%, due 07/25/34 172,000
62,689 Residential Asset Mortgage Products,
Inc., 1.429%, due 06/25/33 62,645
230,000 XX Residential Asset Securities Corp.,
1.43%, due 12/25/33 230,000
---------------
1,207,709
---------------
OTHER ASSET BACKED SECURITIES: 0.3%
118,868 XX Amortizing Residential Collateral
Trust, 1.369%, due 05/25/32 118,794
11,000 Chase Funding Mortgage Loan,
2.734%, due 09/25/24 10,876
7,000 Chase Funding Mortgage Loan,
4.045%, due 05/25/33 6,891
57,000 Chase Funding Mortgage Loan Asset-Backed
Certificates, 1.419%, due 07/25/33 57,036
---------------
193,597
---------------
WHOLE LOAN COLLATERALLIZED MORTGAGE: 1.6%
$ 73,686 XX Bank of America Mortgage Securities,
5.500%, due 11/25/33 $ 72,765
132,545 Citicorp Mortgage Securities, Inc.,
1.619%, due 10/25/33 132,164
95,227 Countrywide Alternative Loan Trust,
1.519%, due 07/25/18 95,227
114,000 CS First Boston Mortgage Securities Corp.,
4.187%, due 10/25/33 113,134
70,743 MASTR Asset Securitization Trust,
8.000%, due 06/25/33 73,600
110,647 XX MASTR Asset Securitization Trust,
1.57%, due 11/25/33 110,716
331,000 XX MLCC Mortgage Investors, Inc., .
1.49%, due 01/25/29 331,000
178,240 Residential Accredit Loans, Inc.,
1.569%, due 03/25/18 178,084
130,000 Wells Fargo Mortgage Backed Securities Trust,
4.500%, due 08/25/18 120,784
---------------
1,227,474
---------------
WL COLLATERALLIZED PLANNED
AMORTIZATION CLASS: 1.1%
317,833 GSR Mortgage Loan Trust, 1.519%,
due 10/25/32 317,671
189,414 MASTR Alternative Loans Trust,
8.500%, due 05/25/33 197,411
182,000 Residential Funding Securities Corp.,
4.750%, due 02/25/33 182,177
54,968 Residential Funding Securities Corp.,
8.500%, due 05/25/33 61,521
---------------
758,780
---------------
Total Collateralized Mortgage Obligations
(Cost $5,752,833) 5,728,198
---------------
U.S. TREASURY OBLIGATIONS: 4.9%
U.S. TREASURY BONDS: 1.2%
350,000 6.250%, due 08/15/23 395,541
459,000 5.375%, due 02/15/31 475,711
---------------
871,252
---------------
U.S. TREASURY NOTES: 3.2%
1,561,000 1.625%, due 10/31/05 1,550,879
26,000 2.625%, due 11/15/06 26,074
180,000 3.375%, due 11/15/08 180,239
555,000 4.250%, due 11/15/13 551,965
---------------
2,309,157
---------------
U.S. TREASURY STRIP PRINCIPAL: 0.5%
650,000 0.000%, due 05/15/16 347,553
---------------
347,553
---------------
Total U.S. Treasury Obligations
(Cost $3,556,211) 3,527,962
---------------
U.S. GOVERNMENT AGENCY OBLIGATIONS: 19.1%
FEDERAL HOME LOAN MORTGAGE CORPORATION: 5.8%
290,000 2.875%, due 09/15/05 294,206
280,000 5.875%, due 03/21/11 300,244
274,359 5.500%, due 01/01/14 284,316
142,168 6.000%, due 04/01/14 148,660
</Table>
See Accompanying Notes to Financial Statements
101
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- -------------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION (CONTINUED)
$ 208,000 6.000%, due 01/15/28 $ 216,134
314,267 7.000%, due 06/01/29 331,688
339,413 6.500%, due 12/01/31 354,281
400,000 TBA 5.500%, due 12/15/33 402,375
929,000 TBA 6.500%, due 12/15/33 969,644
546,000 1.770%, due 01/01/49 546,000
361,000 4.500%, due 12/31/49 370,138
---------------
4,217,686
---------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION: 12.5%
320,000 2.375%, due 04/13/06 317,988
440,000 5.250%, due 04/15/07 471,560
325,000 2.875%, due 05/19/08 314,451
290,000 4.000%, due 09/02/08 291,610
6,413 5.500%, due 07/01/16 6,612
316,549 6.000%, due 08/01/16 330,769
870,000 TBA 5.000%, due 12/01/17 881,419
100,000 TBA 4.500%, due 12/15/18 99,313
192,276 6.000%, due 07/25/24 201,262
41,944 8.000%, due 08/01/30 45,332
70,850 7.500%, due 09/01/30 75,617
429,044 7.000%, due 06/01/32 453,114
100,000 7.000%, due 07/01/32 105,551
474,999 6.500%, due 10/01/32 495,470
190,444 1.519%, due 10/25/33 190,944
1,528,000 TBA 5.000%, due 12/01/33 1,500,305
1,153,000 TBA 5.500%, due 12/01/33 1,160,566
1,831,000 TBA 6.000%, due 12/15/33 1,881,352
141,000 X 4.750%, due 12/25/42 145,584
---------------
8,968,819
---------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION: 0.8%
278,215 6.500%, due 06/15/29 292,802
151,929 7.500%, due 11/15/29 162,861
105,279 8.000%, due 07/15/30 114,002
---------------
569,665
---------------
Total U.S. Government Agency Obligations
(Cost $13,640,397) 13,756,170
---------------
OTHER BONDS: 1.6%
SOVEREIGN: 1.7%
49,000 @@ ARG Boden, 6.16%, due 08/03/12 28,935
70,000 @@ Brazilian Government Intl. Bond,
10.000%, due 08/07/11 74,340
74,000 @@ Brazilian Government Intl. Bond,
2.188%, due 04/15/12 65,612
44,000 @@ Brazilian Government Intl. Bond,
11.000%, due 08/17/40 45,232
86,000 @@,XX Central Bank of Nigeria, 5.09%,
due 01/05/10 33,325
57,000 @@ Colombia Government Intl. Bond,
10.000%, due 01/23/12 60,563
24,000 @@ Colombia Government Intl. Bond,
11.750%, due 02/25/20 27,780
43,000 @@ Dominican Republic Intl. Bond,
9.040%, due 01/23/13 33,405
44,000 @@ Ecuador Government International Bond,
7.000%, due 08/15/30 31,039
$ 27,000 @@ El Salvador Government International Bond,
7.750%, due 01/24/23 $ 28,091
46,000 @@ Mexico Government Intl. Bond,
4.625%, due 10/08/08 46,184
73,000 @@ Mexico Government Intl. Bond,
6.625%, due 03/03/15 75,008
6,000 @@ Panama Government Intl. Bond,
9.375%, due 07/23/12 6,810
48,108 @@ Panama Government Intl. Bond,
1.938%, due 07/17/16 42,072
34,000 @@ Peru Government Intl. Bond,
9.125%, due 02/21/12 37,910
18,000 @@ Peru Government Intl. Bond,
4.500%, due 03/07/17 15,807
63,000 @@ Philippine Government Intl. Bond,
9.875%, due 01/15/19 62,685
43,000 @@ Republic of Bulgaria, 8.250%,
due 01/15/15 50,284
158,000 @@ Russia Government Intl. Bond,
5.000%, due 03/31/30 148,425
86,000 @@ Turkey Government Intl. Bond,
12.375%, due 06/15/09 107,285
12,000 @@ Turkey Government Intl. Bond,
9.500%, due 01/15/14 13,140
13,067 #,@@ Ukraine Government Intl. Bond,
11.000%, due 03/15/07 14,524
14,000 #,@@ Ukraine Government Intl. Bond,
7.650%, due 06/11/13 14,245
13,000 @@ Uruguay Government Intl. Bond,
7.250%, due 02/15/11 11,310
30,000 @@ Uruguay Government Intl. Bond,
7.500%, due 03/15/15 24,300
58,000 #,@@ Venezuela Government Intl. Bond,
10.750%, due 09/19/13 57,275
57,000 @@ Venezuela Government Intl. Bond,
9.250%, due 09/15/27 47,595
---------------
Total Other Bonds
(Cost $1,179,244) 1,203,181
---------------
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------------------
PREFERRED STOCK: 0.5%
AUTO PARTS & EQUIPMENT: 0.2%
4,840 Delphi Trust I 122,936
---------------
122,936
---------------
BANKS: 0.1%
15 # DG Funding Trust 162,750
---------------
162,750
---------------
OIL AND GAS: 0.2%
4,360 @@ Nexen, Inc. 110,962
---------------
110,962
---------------
TELECOMMUNICATIONS: 0.0%
10 XO Communications, Inc. --
---------------
Total Preferred Stock
(Cost $393,176) 396,648
---------------
</Table>
See Accompanying Notes to Financial Statements
102
<Page>
ING
Equity and
Bond
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
(Continued)
<Table>
<Caption>
CONTRACTS VALUE
- -------------------------------------------------------------------------------------
OPTIONS: 0.0%
ELECTRONICS: 0.0%
130 USD Put, 40 strike, expires 01/17/04 $ 18,200
---------------
Total Options
(Cost $26,390) 18,200
---------------
<Caption>
NUMBER OF
WARRANTS VALUE
- -------------------------------------------------------------------------------------
WARRANTS: 0.0%
BUILDING MATERIALS: 0.0%
400 I, @ Dayton Superior Corp. 4
---------------
4
---------------
DIVERSIFIED FINANCIAL SERVICES: 0.0%
370 I,X,@ North Atlantic Trading Co. --
---------------
--
---------------
TELECOMMUNICATIONS: 0.0%
500 I, @ Iridium World Communications, Inc. 5
---------------
5
---------------
Total Warrants
(Cost $57,953) 9
---------------
Total Long-Term Investments
(Cost $70,298,312) 73,847,429
---------------
SHORT-TERM INVESTMENTS: 8.1%
REPURCHASE AGREEMENT: 8.1%
$ 897,000 Morgan Stanley Repurchase Agreement
dated 11/28/03, 1.030%, due
12/01/03, $897,077 to be received
upon repurchase (Collateralized by
$897,858 REFC, 0.000%,
Market Value $915,816 due 07/15/29) $ 897,000
---------------
5,010,000 Deutsche Bank Repurchase Agreement
dated 11/28/03, 1.060%, due 12/01/03,
$5,010,443 to be received upon
repurchase (Collateralized by
$5,010,425 Federal National Mortgage
Association, 4.750%, Market Value
$5,110,633 due 02/21/13) 5,010,000
---------------
Total Short-term Investments
(Cost $5,907,000) 5,907,000
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $76,205,312)* 110.4% $ 79,754,429
OTHER ASSETS AND LIABILITIES-NET (10.4) (7,501,337)
----- ---------------
NET ASSETS 100.0% $ 72,253,092
===== ===============
</Table>
@ Non-income producing security
@@ Foreign Issuer
# Securities with purchase pursuant to Rule 144A, under the Securities Act of
1933 and may not be resold subject to that rule except to qualified
institutional buyers. These securities have been determined to be liquid
under the guidelines established by the Fund's Board of Trustees.
C Bond may be called prior to maturity date.
I Illiquid Security
X Market Value determined by ING Valuation Committee appointed by the Fund's
Board of Directors.
XX Value of securities obtained from one or more dealers making markets in the
securities which have been adjusted based on the Fund's valuation
procedures.
* Cost for federal income tax purposes is the same as for financial statement
purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 6,343,909
Gross Unrealized Depreciation (2,786,603)
---------------
Net Unrealized Appreciation $ 3,557,306
===============
</Table>
See Accompanying Notes to Financial Statements
103
<Page>
ING
Real Estate
Fund PORTFOLIO OF INVESTMENTS as of November 30, 2003 (Unaudited)
<Table>
<Caption>
SHARES VALUE
- -------------------------------------------------------------------------------------
COMMON STOCK: 98.7%
HEALTHCARE-PRODUCTS: 0.7%
56,300 Ventas, Inc. $ 1,127,126
---------------
1,127,126
---------------
HOME BUILDERS: 4.3%
20,500 @ Hovnanian Enterprises, Inc. 1,891,125
18,700 Lennar Corp. 1,830,730
55,600 @ Technical Olympic USA, Inc. 1,498,976
46,500 @ Toll Brothers, Inc. 1,925,565
---------------
7,146,396
---------------
LODGING: 4.0%
191,300 @ Starwood Hotels & Resorts
Worldwide, Inc. 6,594,111
---------------
6,594,111
---------------
REAL ESTATE: 1.6%
109,800 Catellus Development Corp. 2,580,300
---------------
2,580,300
---------------
REITs: 88.1%
143,700 Acadia Realty Trust 1,734,459
46,400 AMB Property Corp. 1,459,744
203,900 Arden Realty, Inc. 5,957,958
10,000 Boston Properties, Inc. 462,500
176,100 Camden Property Trust 7,403,244
47,000 Chelsea Property Group, Inc. 2,538,000
100,000 Corporate Office Properties
Trust Sbi MD 2,069,000
109,000 Developers Diversified
Realty Corp. 3,434,590
200,600 Equity Residential 5,889,616
105,000 @ First Potomac Realty Trust 1,785,000
90,600 Gables Residential Trust 2,926,380
87,200 General Growth Properties, Inc. 7,028,320
158,600 Health Care REIT, Inc. 5,538,312
113,100 Heritage Property Investment Trust 3,183,765
176,600 Hersha Hospitality Trust 1,631,784
99,500 Home Properties of NY, Inc. 4,004,875
532,500 @ Host Marriott Corp. 5,937,375
124,700 Keystone Property Trust 2,526,422
175,200 Liberty Property Trust 6,627,816
207,200 Macerich Co. 8,743,840
156,600 Mack-Cali Realty Corp. 6,248,340
203,700 Maguire Properties, Inc. 4,664,730
117,900 Mills Corp. 5,110,965
201,700 New Plan Excel Realty Trust 4,931,565
142,100 Pennsylvania Real Estate
Investment Trust 4,902,450
188,200 Prentiss Properties Trust 5,975,350
168,100 Prologis $ 5,127,050
110,400 Regency Centers Corp. 4,360,800
52,100 Shurgard Storage Centers, Inc. 1,943,330
123,600 Simon Property Group, Inc. 5,864,820
434,600 Trizec Properties, Inc. 6,053,978
229,900 United Dominion Realty Trust, Inc. 4,241,655
108,500 Vornado Realty Trust 5,936,035
---------------
146,244,068
---------------
Total Common Stock
(Cost $132,518,779) 163,692,001
---------------
TOTAL INVESTMENTS IN SECURITIES
(COST $132,518,779)* 98.7% $ 163,692,001
OTHER ASSETS AND LIABILITIES-NET 1.3 2,188,264
----- ---------------
NET ASSETS 100.0% $ 165,880,265
===== ===============
</Table>
@ Non-income producing security
REITs Real Estate Investment Trusts
* Cost for federal income tax purposes is the same as for financial
statement purposes. Net unrealized appreciation consists of:
<Table>
Gross Unrealized Appreciation $ 31,344,725
Gross Unrealized Depreciation (171,503)
---------------
Net Unrealized Appreciation $ 31,173,222
===============
</Table>
See Accompanying Notes to Financial Statements
104
<Page>
SHAREHOLDER MEETING INFORMATION (Unaudited)
A SPECIAL MEETING OF SHAREHOLDERS OF THE ING RETAIL FUNDS (FORMERLY PLIGRIM
RETAIL FUNDS) AND VARIABLE PRODUCTS HELD JULY 22, 2003, AT THE OFFICES OF ING
FUNDS, 7337 EAST DOUBLETREE RANCH ROAD, SCOTTSDALE, AZ 85258.
A BRIEF DESCRIPTION OF EACH MATTER VOTED UPON AS WELL AS THE RESULTS ARE
OUTLINED BELOW:
1. To approve a Sub-Advisory Agreement between ING Investments, LLC and ING
Aeltus Investment Management, Inc., with no change in the Adviser, the
portfolio manager(s), or the overall management fee paid by the Fund.
2. To transact such other business, not currently contemplated, that may
properly come before the Special Meeting or any adjournment(s) thereof in the
discretion of the proxies or their substitutes.
<Table>
<Caption>
SHARES VOTED
AGAINST OR SHARES BROKER TOTAL SHARES
PROPOSAL SHARES VOTED FOR WITHHELD ABSTAINED NON-VOTE VOTED
-------- ---------------- ------------- --------- -------- ------------
ING Convertible Fund 1 9,590,412 248,443 319,867 -- 10,158,722
ING Equity and Bond Fund 1 5,798,657 68,271 162,928 -- 6,029,856
ING Growth Opportunities Fund 1 11,271,875 314,530 234,256 -- 11,820,661
ING MagnaCap Fund 1 16,389,876 429,328 529,351 -- 17,348,555
ING MidCap Opportunities Fund 1 14,170,301 353,237 550,343 -- 15,073,881
ING SmallCap Opportunities Fund 1 13,401,843 307,307 316,357 -- 14,025,507
ING Convertible Fund 2 9,523,301 275,844 359,577 -- 10,158,722
ING Equity and Bond Fund 2 5,714,223 134,301 181,332 -- 6,029,856
ING Growth Opportunities Fund 2 11,144,124 384,043 292,494 -- 11,820,661
ING MagnaCap Fund 2 16,179,702 543,555 625,298 -- 17,348,555
ING MidCap Opportunities Fund 2 13,919,022 568,982 585,877 -- 15,073,881
ING SmallCap Opportunities Fund 2 13,091,030 494,380 440,097 -- 14,025,507
</Table>
105
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited)
The business and affairs of the Trusts are managed under the direction of the
Trusts' Board of Trustees. A Trustee who is not an interested person of the
Trusts, as defined in the 1940 Act, is an independent trustee ("Independent
Trustee"). The Trustees and Officers of the Trust are listed below. The
Statement of Additional Information includes additional information about
trustees of the Registrant and is available, without charge, upon request at
1-800-992-0180.
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY
AND AGE TRUST SERVED(1) PAST FIVE YEARS BY TRUSTEE TRUSTEE
- ----------------------------- ----------- --------------- -------------------------- --------------- -------------------------
INDEPENDENT TRUSTEES
Paul S. Doherty(2) Trustee October Mr. Doherty is President 116 --
7337 E. Doubletree Ranch Rd. 1999 - Present and Partner, Doherty,
Scottsdale, AZ 85258 Wallace, Pillsbury and
Born: 1934 Murphy, P.C., Attorneys
(1996 - Present);
Director, Tambrands, Inc.
(1993 - 1998); and Trustee
of each of the funds
managed by Northstar
Investment Management
Corporation (1993 - 1999).
J. Michael Earley(3) Trustee February President and Chief 116 --
7337 E. Doubletree Ranch Rd. 2002 - Present Executive Officer, Bankers
Scottsdale, AZ 85258 Trust Company, N.A. (1992
Born: 1945 - Present).
R. Barbara Gitenstein(2) Trustee February President, College of New 116 --
7337 E. Doubletree Ranch Rd. 2002 - Present Jersey (1999 - Present).
Scottsdale, AZ 85258 Formerly, Executive Vice
Born: 1948 President and Provost,
Drake University (1992 -
1998).
Walter H. May(2) Trustee October Retired. Formerly, 116 Best Prep Charity
7337 E. Doubletree Ranch Rd. 1999 - Present Managing Director and (1991 - Present).
Scottsdale, AZ 85258 Director of Marketing,
Born: 1936 Piper Jaffray, Inc.;
Trustee of each of the
funds managed by Northstar
Investment Management
Corporation (1996 - 1999).
Jock Patton(2) Trustee August 1995 - Private Investor (June 116 Director, Hypercom, Inc.
7337 E. Doubletree Ranch Rd. Present for ING 1997 - Present). Formerly (January 1999 -
Scottsdale, AZ 85258 Investment Director and Chief Present); JDA Software
Born: 1945 Funds, Inc. Executive Officer, Rainbow Group, Inc.
Multimedia Group, Inc. (January 1999 -
October 1999 - (January 1999 - December Present); Buick of
Present for ING 2001); Director of Stuart Scottsdale, Inc.; and
Mayflower Entertainment, Inc.; National Airlines, Inc.
Trust and ING Director of Artisoft, Inc.
Equity Trust (1994 - 1998).
</Table>
106
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY
AND AGE TRUST SERVED(1) PAST FIVE YEARS BY TRUSTEE TRUSTEE
- ----------------------------- ----------- --------------- -------------------------- --------------- -------------------------
David W.C. Putnam(3) Trustee October President and Director, 116 Anchor International
7337 E. Doubletree Ranch Rd. 1999 - Present F.L. Putnam Securities Bond (December 2000 -
Scottsdale, AZ 85258 Company, Inc. and its Present); Progressive
Born: 1939 affiliates; President, Capital Accumulation
Secretary and Trustee, The Trust (August 1998 -
Principled Equity Market Present); Principled
Fund. Formerly, Trustee, Equity Market Fund
Trust Realty Trust (November 1996 -
(December Corp.; Anchor Present), Mercy
Investment Trust; Bow 2000 Endowment
- Present); Ridge Mining Foundation (1995 -
Company and each of the Present); Director,
F.L. Putnam funds managed F.L. Putnam Investment
by Northstar Investment Management Company
Foundation Management (December 2001 -
Corporation (1994 - 1999). Present); Asian
American Bank and
Trust Company (June
1992 - Present); and
Notre Dame Health
Care Center (1991 -
Present) F.L. Putnam
Securities Company, Inc.
(June 1978 - Present);
and an Honorary
Trustee, Mercy Hospital
(1973 - Present).
Blaine E. Rieke(3) Trustee February General Partner, 116 Morgan Chase Trust Co.
7337 E. Doubletree Ranch Rd. 2001 - Present Huntington Partners (January 1998 -
Scottsdale, AZ 85258 (January 1997 - Present). Present).
Born: 1933 Chairman of the Board and
Trustee of each of the
funds managed by ING
Investment Management Co.
LLC (November 1998 -
February 2001).
Roger B. Vincent(3) Trustee February President, Springwell 116
7337 E. Doubletree Ranch Rd. 2002 - Present Corporation (1989 -
Scottsdale, AZ 85258 for ING Present). Formerly, Director, AmeriGas
Born: 1945 Investment Director Tatham Propane, Inc. (1998 -
Funds, Inc. and Offshore, Inc. (1996 - Present).
ING Equity 2000).
Trust
October
1999 - Present
for ING
Mayflower
Trust
Richard A. Wedemeyer(2) Trustee February Retired. Mr. Wedemeyer 116 Touchstone Consulting
7337 E. Doubletree Ranch Rd. 2001 - Present was formerly Vice Group (1997 - Present).
Scottsdale, AZ 85258 President -- Finance
Born: 1936 and Administration,
Channel Corporation
(June 1996 - April 2002).
Formerly Vice President,
Operations and
Administration, Jim
Henson Productions.
(1979 - 1997); Trustee,
First Choice Funds
(1997 - 2001); and of
each of the funds
managed by ING
Investment
Management Co. LLC
(1998 - 2001).
</Table>
107
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY
AND AGE TRUST SERVED(1) PAST FIVE YEARS BY TRUSTEE TRUSTEE
- ----------------------------- ----------- --------------- -------------------------- --------------- -------------------------
TRUSTEES WHO ARE
"INTERESTED PERSONS"
Thomas J. McInerney(4) Trustee February Chief Executive Officer, 170 Director, Hemisphere
7337 E. Doubletree Ranch Rd. 2001 - Present ING U.S. Financial Inc. (May 2003 -
Scottsdale, AZ 85258 Services (September 2001 - Present); Equitable Life
Born: 1956 Present); General Manager Insurance Co., Golden
and Chief Executive American Life Insurance
Officer, ING U.S. Worksite Co., Life Insurance
Financial Services Company of Georgia,
(December 2000 - Present); Midwestern United Life
Member ING Americas Insurance Co., ReliaStar
Executive Committee (2001 Life Insurance Co.,
- Present); President, Security Life of Denver,
Chief Executive Officer Security Connecticut
and Director of Northern Life Insurance Co.,
Life Insurance Company Southland Life
(March 2001 - October Insurance Co., USG
2002), ING Aeltus Holding Annuity and Life
Company, Inc. (2000 - Company, and United
Present), ING Retail Life and Annuity
Holding Company (1998 - Insurance Co. Inc
Present), ING Life (March 2001 - Present);
Insurance and Annuity Director, Ameribest Life
Company (September 1997 - Insurance Co., (March
November 2002) and ING 2001 to January 2003);
Retirement Holdings, Inc. Director, First
(1997 - Present). Columbine Life
Formerly, General Manager Insurance Co. (March
and Chief Executive 2001 to December
Officer, ING Worksite 2002); Member of the
Division (December 2000 - Board, National
October 2001), President Commission on
ING-SCI, Inc. (August 1997 Retirement Policy,
- December 2000); Governor's Council on
President, Aetna Financial Economic
Services (August 1997 - Competitiveness and
December 2000). Technology of
Connecticut,
Connecticut Business
and Industry
Association, Bushnell;
Connecticut Forum;
Metro Hartford
Chamber of Commerce;
and is Chairman,
Concerned Citizens for
Effective Government.
</Table>
108
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE AND PRINCIPAL PORTFOLIOS IN OTHER
POSITION(S) LENGTH OF OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS
NAME, ADDRESS HELD WITH TIME DURING THE OVERSEEN HELD BY
AND AGE TRUST SERVED(1) PAST FIVE YEARS BY TRUSTEE TRUSTEE
- ----------------------------- ----------- --------------- -------------------------- --------------- -------------------------
John G. Turner(5) Trustee October Chairman, Hillcrest 116 Director, Hormel Foods
7337 E. Doubletree Ranch Rd. 1999 - Present Capital Partners (May 2002 Corporation
Scottsdale, AZ 85258 - Present); President, (March 2000 - Present);
Born: 1939 Turner Investment Company Shopko Stores, Inc.
(January 2002 - Present). (August 1999 - Present);
Mr. Turner was formerly and M.A. Mortenson
Vice Chairman of ING Company (March 2002 -
Americas (2000 - 2002); Present).
Chairman and Chief
Executive Officer of
ReliaStar Financial Corp.
and ReliaStar Life
Insurance Company (1993 -
2000); Chairman of
ReliaStar United Services
Life Insurance Company
(1995 - 1998); Chairman of
ReliaStar Life Insurance
Company of New York (1995
- 2001); Chairman of
Northern Life Insurance
Company (1992 - 2001);
Chairman and Trustee of
the Northstar affiliated
investment companies (1993
- 2001) and Director,
Northstar Investment
Management Corporation and
its affiliates (1993 -
1999).
</Table>
- ----------
(1) Trustees serve until their successors are duly elected and qualified,
subject to the Board's retirement policy.
(2) Valuation Committee member.
(3) Audit Committee member.
(4) Mr. McInerney is an "interested person," as defined under the 1940 Act,
because of his affiliation with ING U.S. Financial Services and ING U.S.
Worksite Financial Services, both affiliates of ING Investments, LLC.
(5) Mr. Turner is an "interested person," as defined under the 1940 Act, because
of his affiliation with ING Americas, an affiliate of ING Investments, LLC.
109
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
TERM OF OFFICE OCCUPATION(S)
NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE
AND AGE HELD WITH THE TRUST TIME SERVED(1) PAST FIVE YEARS
- ----------------------------- ------------------------ ------------------------------ -------------------------------------------
OFFICERS:
James M. Hennessy President and Chief February 2001 to Present President and Chief Executive Officer of
7337 E. Doubletree Ranch Rd. Executive Officer ING Capital Corporation, LLC, ING Funds
Scottsdale, AZ 85258 June 2000 to Present Services, LLC, ING Advisors, Inc., ING
Born: 1949 Chief Operating Investments, LLC, Lexington Funds
Officer June 2000 - Distributor, Inc., Express America T.C.
February 2001 Inc. and EAMC Liquidation Corp. (since
Senior Executive Vice December 2001); Executive Vice President
President April 1995 - June 2000 and Chief Operating Officer of ING Funds
for ING Investment Funds, Inc. Distributor, LLC (since June 2000).
Senior Vice President Formerly, Executive Vice President and
April 1995 - February Chief Operating Officer of ING
Secretary 2001 for ING Quantitative Management, Inc. (October
Investment Funds, Inc. 2001 to September 2002); Senior Executive
Vice President (June 2000 to December
November 1999 - Februrary 2001 2000) and Secretary (April 1995 to
for ING Equity Trust and ING December 2000) of ING Capital
Mayflower Trust Corporation, LLC, ING Funds Services,
LLC, ING Investments, LLC, ING Advisors,
Inc., Express America T.C. Inc., and EAMC
Liquidation Corp.; and Executive Vice
President, ING Capital Corporation, LLC
and its affiliates (May 1998 to June
2000) and Senior Vice President, ING
Capital Corporation, LLC and its
affiliates (April 1995 to April 1998).
Stanley D. Vyner Executive Vice July 1996 - Present for Executive Vice President of ING Advisors,
7337 E. Doubletree Ranch Rd. President ING Investment Funds, Inc. and ING Investments, LLC (July 2000
Scottsdale, Arizona 85258 Inc. to present) and Chief Investment Officer
Born: 1950 of the International Portfolios, ING
November 1999 - Investments, LLC (July 1996 to present).
Present for ING Equity Formerly, President and Chief Executive
Trust and ING Officer of ING Investments, LLC (August
Mayflower Trust 1996 to August 2002).
Michael J. Roland Executive Vice February 2002 - Executive Vice President, Chief Financial
7337 E. Doubletree Ranch Rd. President and Present Officer and Treasurer of ING Funds
Scottsdale, AZ 85258 Assistant Secretary Services, LLC, ING Funds Distributor,
Born: 1958 LLC, ING Advisors, Inc., ING Investments,
Principal Financial June 1998 - Present LLC (December 2001 to present), Lexington
Officer for ING Investment Funds Distributor, Inc., Express America
Funds, Inc. T.C. Inc. and EAMC Liquidation Corp.
(since December 2001). Formerly,
November 1999 - Executive Vice President, Chief Financial
Present for ING Equity Officer and Treasurer of ING Quantitative
Trust and ING Management, Inc. (December 2001 to
Mayflower Trust October 2002); Senior Vice President, ING
Funds Services, LLC, ING Investments,
Senior Vice President June 1998 - February LLC, and ING Funds Distributor, LLC (June
2002 for ING 1998 to December 2001) and Chief
Investment Funds, Inc. Financial Officer of Endeavor Group
(April 1997 to June 1998).
November 1999 -
February 2002 for ING
Equity Trust and ING
Mayflower Trust
</Table>
110
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
TERM OF OFFICE OCCUPATION(S)
NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE
AND AGE HELD WITH THE TRUST TIME SERVED(1) PAST FIVE YEARS
- ----------------------------- ------------------------ ------------------------------ -------------------------------------------
Robert S. Naka Senior Vice President November 1999 - Senior Vice President and Assistant
7337 E. Doubletree Ranch Rd. Present Secretary of ING Funds Services, LLC, ING
Scottsdale, AZ 85258 Assistant Secretary Funds Distributor, LLC, ING Advisors,
Born: 1963 July 1996 - Present for Inc., ING Investments, LLC (October 2001
Vice President ING Investment Funds, to present) and Lexington Funds
Inc. Distributor, Inc. (since December 2001).
Assistant Vice Formerly, Senior Vice President and
President November 1999 - Assistant Secretary for ING Quantitative
Present for ING Equity Management, Inc. (October 2001 to October
Trust and ING 2002); Vice President, ING Investments,
Mayflower Trust LLC (April 1997 to October 1999), ING
Funds Services, LLC (February 1997 to
May 1997 - November August 1999) and Assistant Vice
1999 for ING President, ING Funds Services, LLC
Investment Funds, Inc. (August 1995 to February 1997).
July 1996 - May 1997
for ING Investment
Funds, Inc.
Kimberly A. Anderson Senior Vice President November 2003 - Vice President and Assistant Secretary of
7337 E. Doubletree Ranch Rd. Present ING Funds Services, LLC, ING Funds
Scottsdale, AZ 85258 Distributor, LLC, ING Advisors, Inc., ING
Born: 1964 Vice President February 2001 - Investments, LLC (since October 2001) and
November 2003 Lexington Funds Distributor, Inc. (since
December 2001). Formerly, Vice President
Secretary February 2001 - for ING Quantitative Management, Inc.
August 2003 (October 2001 to October 2002); Assistant
Vice President of ING Funds Services, LLC
(November 1999 to January 2001) and has
held various other positions with ING
Funds Services, LLC for more than the
last five years.
Robyn L. Ichilov Vice President November 1997 - Vice President of ING Funds Services, LLC
7337 E. Doubletree Ranch Rd. Present for ING (since October 2001) and ING Investments,
Scottsdale, AZ 85258 Investment Funds, Inc. LLC (since August 1997); Accounting
Born: 1967 Manager, ING Investments, LLC (since
November 1999 - November 1995).
Present for ING Equity
Trust and ING
Mayflower Trust
Treasurer May 1998 - Present
for ING Investment
Funds, Inc.
November 1999 -
Present for ING Equity
Trust and ING
Mayflower Trust
J. David Greenwald Vice President August 2003 - Present Vice President of Mutual Fund Compliance
7337 E. Doubletree Ranch Rd. of ING Funds Services, LLC (May 2003 -
Scottsdale, Arizona 85258 Present). Formerly Assistant Treasurer
Born: 1957 and Director of Mutual Fund Compliance
and Operations of American Skandia, A
Prudential Financial Company (October
1996 - May 2003).
</Table>
111
<Page>
TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued)
<Table>
<Caption>
PRINCIPAL
TERM OF OFFICE OCCUPATION(S)
NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE
AND AGE HELD WITH THE TRUST TIME SERVED(1) PAST FIVE YEARS
- ----------------------------- ------------------------ ------------------------------ -------------------------------------------
Lauren D. Bensinger Vice President February 2003 - Vice President and Chief Compliance
7337 E. Doubletree Ranch Rd. Present Officer, ING Funds Distributor, LLC. (July
Scottsdale, Arizona 85258 1995 to Present); Vice President (February
Born: 1954 1996 to Present) and Chief Compliance
Officer (October 2001 to Present) ING
Investments, LLC; Vice President and Chief
Compliance Officer, ING Advisors, Inc.
(July 2000 to Present), Formerly Vice
President and Chief Compliance Officer ING
Quantitative Management, Inc. (July 2000
to September 2002), and Vice President,
ING Fund Services, LLC (July 1995 to
Present).
Todd Modic Vice President August 2003 - Present Vice President of Financial Reporting-Fund
7337 E. Doubletree Ranch Rd. Accounting of ING Funds Services, LLC
Scottsdale, AZ 85258 Assistant August 2001 - (September 2002 to present). Formerly,
Born: 1967 Vice President August 2003 Director of Financial Reporting of ING
Investments, LLC (March 2001 to September
2002). Director of Financial Reporting,
Axient Communications, Inc. (May 2000 to
January 2001) and Director of Finance,
Rural/Metro Corporation (March 1995 to May
2000).
Huey P. Falgout, Jr. Secretary August 2003 - Present Counsel, ING U.S. Financial Services
7337 E. Doubletree Ranch Rd. (November 2002 - Present). Formerly,
Scottsdale, Arizona 85258 Associate General Counsel of AIG American
Born: 1963 General (January 1999 - November 2002) and
Associate General Counsel of Van Kampen,
Inc. (April 1992 - January 1999).
Susan P. Kinens Assistant Vice February 2003 - Assistant Vice President and Assistant
7337 E. Doubletree Ranch Rd. President and Present Secretary, ING Funds Services, LLC
Scottsdale, AZ 85258 Assistant Secretary (December 2002 - Present); and has held
Born: 1976 various other positions with ING Funds
Services, LLC for the last five years.
Maria M. Anderson Assistant Vice August 2001 - Present Assistant Vice President of ING Funds
7337 E. Doubletree Ranch Rd. President Services, LLC (since October 2001).
Scottsdale, AZ 85258 Formerly, Manager of Fund Accounting and
Born: 1958 Fund Compliance, ING Investments, LLC
(September 1999 to November 2001); Section
Manager of Fund Accounting, Stein Roe
Mutual Funds (July 1998 to August 1999);
and Financial Reporting Analyst, Stein Roe
Mutual Funds (August 1997 to July 1998).
Theresa Kelety Assistant Secretary August 2003 - Present Counsel, ING U.S. Financial Services
7337 E. Doubletree Ranch Rd. (April 2003 - Present). Formerly, Senior
Scottsdale, Arizona 85258 Associate with Shearman & Sterling
Born: 1963 (February 2000 - April 2003) and Associate
with Sutherland Asbill & Brennan (1996 -
February 2000).
</Table>
- ----------
(1) The officers hold office until the next annual meeting of the Trustees and
until their successors have been elected and qualified.
112
<Page>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<Page>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<Page>
ING Funds Distributor, LLC offers the funds listed below. Before investing in a
fund, shareholders should carefully review the fund's prospectus. Investors may
obtain a copy of a prospectus of any ING Fund by calling (800) 992-0180.
INTERNATIONAL EQUITY FUNDS
ING Emerging Countries Fund
ING Foreign Fund
ING International Fund
ING International Growth Fund
ING International SmallCap Growth Fund
ING International Value Fund
ING Precious Metals Fund
ING Russia Fund
INTERNATIONAL GLOBAL EQUITY FUNDS
ING Global Equity Dividend Fund
ING Global Real Estate Fund
ING Worldwide Growth Fund
DOMESTIC EQUITY GROWTH FUNDS
ING Growth Fund
ING Growth + Value Fund
ING Growth Opportunities Fund
ING LargeCap Growth Fund
ING MidCap Opportunities Fund
ING SmallCap Opportunities Fund
ING Small Company Fund
ING Technology Fund
ING Disciplined LargeCap Fund
DOMESTIC EQUITY INDEX FUNDS
ING Index Plus LargeCap Fund
ING Index Plus MidCap Fund
ING Index Plus SmallCap Fund
DOMESTIC EQUITY VALUE FUNDS
ING Financial Services Fund
ING MagnaCap Fund
ING Tax Efficient Equity Fund
ING Value Opportunity Fund
ING SmallCap Value Fund
ING MidCap Value Fund
DOMESTIC EQUITY GROWTH AND INCOME FUNDS
ING Equity and Bond Fund
ING Convertible Fund
ING Real Estate Fund
ING Balanced Fund
ING Growth and Income Fund
FIXED INCOME FUNDS
ING Bond Fund
ING Classic Money Market Fund*
ING Government Fund
ING GNMA Income Fund
ING High Yield Opportunity Fund
ING High Yield Bond Fund
ING Intermediate Bond Fund
ING Lexington Money Market Trust*
ING National Tax Exempt Bond Fund
ING Money Market Fund*
ING Aeltus Money Market Fund*
ING Strategic Bond Fund
STRATEGIC ALLOCATION FUNDS
ING Strategic Allocation Growth Fund
ING Strategic Allocation Balanced Fund
ING Strategic Allocation Income Fund
LOAN PARTICIPATION FUND
ING Prime Rate Trust
ING Senior Income Fund
* An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation 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.
<Page>
INVESTMENT MANAGER
ING Investments, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
ADMINISTRATOR
ING Funds Services, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
DISTRIBUTOR
ING Funds Distributor, LLC
7337 E. Doubletree Ranch Road
Scottsdale, Arizona 85258
1-800-992-0180
TRANSFER AGENT
DST Systems, Inc.
P.O. Box 419368
Kansas City, Missouri 64141-6368
CUSTODIAN
Bank of New York
100 Colonial Center Parkway, Suite 300
Lake Mary, FL 32746
LEGAL COUNSEL
Dechert LLP
1775 Eye Street, N.W.
Washington, D.C. 20006
INDEPENDENT AUDITORS
KPMG LLP
99 High Street
Boston, MA 02110
A prospectus containing more complete information regarding the Funds, including
charges and expenses, may be obtained by calling ING Funds Distributor, LLC at
1-800-992-0180. Please read the prospectus carefully before you invest or send
money. The Funds' proxy voting record will be available without charge on or
about August 31, 2004 on the Funds' website at www.ingfunds.com and on the SEC's
website at www.sec.gov.
[ING FUNDS LOGO]
DEI&QSAR1103-012904
<Page>
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, Registrant had adopted a
code of ethics, as defined in Item 2 of Form N-CSR, that applies to the
Registrant's principal executive officer and principal financial officer. There
were no amendments to the Code during the period covered by the report. The
Registrant did not grant any waivers, including implicit waivers, from any
provisions of the Code during the period covered by this report. The code of
ethics is filed herewith pursuant to Item 10(a)(1), Exhibit 99.CODE ETH.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees has determined that David Putnam is an audit committee
financial expert, as defined in Item 3 of Form N-CSR. Mr. Putnam is
"independent" for purposes of Item 3 of Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. RESERVED.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. RESERVED.
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based on our evaluation conducted within 90 days of the filing date,
hereof, the design and operation of the registrant's disclosure controls
and procedures are effective to ensure that material information
relating to the registrant is made known to the certifying officers by
others within the appropriate entities, particularly during the period
in which Forms N-CSR are being prepared, and the registrant's disclosure
controls and procedures allow timely preparation and review of the
information for the registrant's Form N-CSR and the officer
certifications of such Form N-CSR.
(b) There were no significant changes in the registrant's internal controls
or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
(a)(1) Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached
hereto as EX-99.CODE ETH.
<Page>
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2
under the Act (17 CFR 270.30a-2) is attached hereto as EX-99.CERT.
(b) The officer certifications required by Section 906 of the Sarbanes-Oxley
Act of 2002 are attached hereto as EX-99.906CERT
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant): ING Mayflower Trust
---------------------
By /s/ James M. Hennessy
----------------------------------------------
James M. Hennessy
President and Chief Executive Officer
Date February 9, 2004
----------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ James M. Hennessy
----------------------------------------------
James M. Hennessy
President and Chief Executive Officer
Date February 9, 2004
----------------
By /s/ Micheal J. Roland
----------------------------------------------
Michael J. Roland
Executive Vice President and Chief Financial Officer
Date February 9, 2004
----------------