[LOGO] CITIZENS FUNDS(R) Fundamentally Strong. Socially Responsible.
Annual Report 2003
[GRAPHIC]
TABLE OF CONTENTS
PORTFOLIO REVIEW 2
REPORT OF INDEPENDENT AUDITORS 21
PORTFOLIO HOLDINGS 22
STATEMENTS OF ASSETS AND LIABILITIES 38
STATEMENTS OF OPERATIONS 40
STATEMENTS OF CHANGES IN NET ASSETS 42
FINANCIAL HIGHLIGHTS 46
FINANCIAL NOTES 50
SUPPLEMENTAL INFORMATION 56
DEAR SHAREHOLDER
[PHOTO OF SOPHIA COLLIER]
Our fiscal year ended June 30, 2003 has been a year of hard work, reflection and
recovery for Citizens and many corporations throughout the world. In the second
half of our fiscal year ended June 30, our funds began to show good, positive
performance and shareholders once again had the pleasure of opening their
statements to see asset values increasing.
We have worked very hard to improve the performance of our funds and made
significant new investments in research, personnel and investment technology to
strengthen the fundamental social research process that is at the core of our
investment approach. We have also strengthened our advocacy efforts with the
corporations in which we invest, co-filing three shareholder resolutions, and
joining with other like-minded investors and corporations to support corporate
governance reforms and improved social responsibility.
As much progress as we have made, however, I am still not satisfied and believe
that we can dig deeper and do much more. In fiscal 2004 we will continue to
strengthen our investment process and find ways to advocate more effectively for
social responsibility. While the accounting scandals and revelations of
corporate malfeasance have led to higher awareness of the importance of ethics
and accountability, the work is far from done.
One area we have identified for advocacy is reform of the Boards of Directors of
corporations. Too often board members lack independence from management. For
example, board members may have additional relationships -- personal or business
- -- with the company or the Chief Executive. In other cases boards lack diversity
and exposure to a wider range of view points. Citizens has advocated for the
Securities and Exchange Commission to require companies to provide means for
shareholders to have much greater participation in the election of corporate
directors, including the option to nominate candidates for the Board. Often
times, shareholders are restricted to voting for or against a single
pre-selected slate.
Another area of long-time interest for Citizens Funds is the environment. We are
pleased that we have been able to invest in a number of profitable companies
that are creating positive environmental products that support energy efficiency
and alternative energy. In addition, we continue to encourage companies we own
to adopt energy efficient policies across all industries. We have also been
working to encourage companies to be more transparent in their operations and
embrace the Global Reporting Initiative (or GRI). The GRI provides companies a
standard way to report on their environmental impact, health and worker safety
and other similar values. This provides a means for benchmarks and best
practices to be identified. Lagging companies will be able to see what is
possible and, with effort, make progress towards better practices.
We look forward to the next year with optimism. Even though the last several
years have been difficult ones for the equity markets I strongly believe that
with energy, effort and sincerity we can make real progress. Thank you for
sticking with Citizens Funds.
Sincerely yours,
/s/ Sophia Collier
Sophia Collier, President
Please call (800) 223-7010 for a prospectus that contains information about fees
and expenses and should be read carefully before investing.
Distributed by Citizens Securities, Inc., Portsmouth, NH 03801
1
PORTFOLIO REVIEW CITIZENS CORE GROWTH FUND
Goal
Long-term capital appreciation
Strategy
Invests mainly in stocks of U.S. large-capitalization companies
Inception Dates
Standard shares
03/03/95
Institutional shares
01/25/96
Administrative shares
02/04/00
Important Notes
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Past
performance does not guarantee future results. All index and fund performance
figures assume reinvestment of dividends and distributions. Index results do not
include costs of investing, which would lower performance. The index is
unmanaged, and you cannot invest directly in it. When you sell your fund shares,
they may be worth more or less than what you paid for them. Fee waivers were
instituted in the past and during the report period to maintain expense limits,
without which returns would have been lower.
The S&P 500 Index is an unmanaged index comprised of 500 common stocks chosen
for market size, liquidity and industry group representation.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
AVERAGE ANNUAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 Since
Symbol Months Year Years Inception
Standard shares WAIDX 9.60% -1.73% -4.61% 8.53%
Institutional shares WINIX 9.93% -1.02% -3.93% 7.33%
Administrative shares CGADX 9.81% -1.36% N/A -16.20%
Positive factors throughout the period included strong consumer spending and an
accommodating Fed monetary policy. However, investors were still faced with a
weak U.S. economy. In addition to ongoing economic and geopolitical anxieties,
the majority of the year was characterized by low growth expectations, depressed
corporate earnings, flat capital expenditures, and lower global demand and
output.
U.S. stocks (as measured by the S&P 500 Index, the fund's benchmark) see-sawed
from quarter to quarter during the fiscal year ended June 30, 2003. During the
first three months of the period, stocks suffered their largest quarterly loss
(-17%) since 1987. In the following three months, a strong GDP report and a
surprise interest rate cut by the Fed set off a rally that pushed stock prices
up more than 8%. In the first three months of 2003, the war in Iraq dominated
people's minds, and stocks finished the quarter down 3%. However, the end of
major combat action in Iraq sparked a rally where stocks rebounded more than 15%
over the last three months of the period. All told, the S&P 500 Index ended the
12-month period relatively flat with a 0.25% gain.
In keeping with our quality growth approach, our strategy was to position the
portfolio to benefit from the early stages of a potential economic recovery. We
focused our attention on high-quality names (i.e., companies with healthy
balance sheets and stable, more predictable earnings) within higher-growth,
economically sensitive sectors. This led us to overweight technology and
underweight consumer staples and industrials -- allocation decisions that proved
their merit based on how these sectors of the index performed over the 12-month
period.
Citizens Core Growth Fund (Standard shares) generated a -1.73% return during the
12-month period ended June 30, 2003, underperforming its benchmark index, the
S&P 500 Index, which gained 0.25%.
The most positive contributions to performance during the period came from our
holdings in the health care, energy, and industrials sectors. The health care
sector as a whole was up 9%, and our overweighting and stock selection allowed
us to fully participate in the rally. In particular, our biotechnology holdings
alone produced a
2
CITIZENS CORE GROWTH FUND
13.8% gain during the period. Our stock selection in the energy sector produced
strong gains, as we were able to exploit our thesis that oil and gas prices
would remain high after the war. The energy sector within the S&P 500 Index lost
6.8% over the 12-month period, while our energy holdings generated a 9.9% gain.
Our stock selection within industrials also performed well, gaining 4.5% despite
the sector losing 1.6% within the index during the period.
PERFORMANCE OVER TIME (AS OF 06/30/03)
This chart shows performance since inception of a $10,000 hypothetical
investment in the fund's standard shares, compared with the performance over the
same period for the index shown.
[THE FOLLOWING WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Citizens Core S&P 500
Date Growth - Standard Index
---- ----------------- -------
3/3/1995 10,000 10,000
06/30/95 10,940 11,712
06/30/96 13,503 14,757
06/30/97 18,348 19,877
06/30/98 25,045 25,873
06/30/99 32,953 31,761
06/30/00 37,178 34,063
06/30/01 26,611 29,011
06/30/02 20,127 23,792
06/30/03 19,778 23,852
The biggest detractors from performance during the period came from our consumer
discretionary holdings. Our overweighting in Kohls detracted from performance,
as lower sales figures and excess inventory created a loss in that holding. Not
owning Best Buy also hurt, as the company's stock experienced a strong rebound
based on its sell-off of unproductive business units and continued strong demand
for electronics. Our commitment to the media industry also hurt
performance. However, that industry started to show improvement late in the
fiscal year.
Our ongoing commitment to owning high-quality companies was not fully rewarded
during the period -- particularly in the second and fourth quarters. While U.S.
stocks generated positive returns across the board during those two quarters,
the most speculative issues led the rally.
We believe that the economy is beginning the road to recovery and that the
market environment will ultimately reward our strategy of investing in
high-quality companies offering strong long-term prospects. We stand committed
to our disciplined long-term approach of investing in fundamentally and socially
strong companies for the benefit of our shareholders.
3
PORTFOLIO REVIEW CITIZENS EMERGING GROWTH FUND
Goal
Aggressive growth
Strategy
Invests mainly in stocks of young, growing, medium-capitalization companies
Inception Dates
Standard shares
02/08/94
Institutional shares
11/01/99
Administrative shares
02/04/00
Important Notes
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Past
performance does not guarantee future results. All index and fund performance
figures assume reinvestment of dividends and distributions. Index results do not
include costs of investing, which would lower performance. The index is
unmanaged, and you cannot invest directly in it. When you sell your fund shares,
they may be worth more or less than what you paid for them. Fee waivers were
instituted in the past and during the report period, without which returns would
have been lower.
Investments in the Citizens Emerging Growth Fund involve unique risks, as small-
and medium-sized companies may have inexperienced management, limited product
line, a difficult time obtaining financing or market share, and their shares may
be more volatile and not traded as frequently or in as large a volume as larger
companies.
The Russell MidCap Growth Index measures the performance of those Russell Midcap
companies with higher price-to-book ratios and higher forecasted growth
values. The stocks are also members of the Russell 1000 Growth index.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
AVERAGE ANNUAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 Since
Symbol Months Year Years Inception
Standard shares WAEGX 12.64% -7.28% 1.45% 10.67%
Institutional shares CEGIX 13.09% -6.57% N/A -9.82%
Administrative shares CGRDX 12.91% -6.80% N/A -17.85%
While strong consumer spending and an accommodating Fed monetary policy were
positives throughout the period, ongoing economic and geopolitical anxieties
lingered. The fiscal year ended June 30, 2003 was generally characterized by
muted corporate earnings, flat capital expenditures, and lower global demand and
output. However, during the second half of the fiscal year, capital expenditures
and corporate earnings showed signs of improvement.
Moving in alternating directions from quarter to quarter, the broad equity
market (as measured by the S&P 500 Index) was exceptionally volatile over the
12-month period. Stocks suffered their largest quarterly loss (-17%) since 1987
during the first three months of the period. In the following quarter, stock
prices gained more than 8% following a strong GDP report and a surprise interest
rate cut by the Fed. In the first three months of 2003, the war in Iraq
dominated people's minds, and stocks finished the quarter down 3%. However, the
end of major combat action in Iraq sparked a rally where stocks rebounded more
than 15% over the last three months of the period.
Mid-cap growth stocks (as measured by the Russell MidCap Growth Index, the
fund's benchmark) followed a similar see-saw pattern as the broad equity market.
However, while the S&P 500 ended the 12-month period with a 0.25% return,
mid-cap growth stocks gained 7.35%. Citizens Emerging Growth Fund (Standard
shares) generated a -7.28% return during the 12-month period ended June 30,
2003.
The general market trend during the period was that stocks of lower-quality
companies (i.e., unprofitable, low-dollar-priced companies with weak balance
sheets) experienced the most dramatic increases. This tendency impacted the
mid-cap market, where the smaller and most beaten-down stocks noticeably
outperformed stocks of larger and more fundamentally sound companies.
Early in the period our strategy was to position the portfolio to benefit from
the early stages of a potential economic recovery. This focused our attention on
stocks of high-quality companies within higher-growth, economically sensitive
sectors.
4
CITIZENS EMERGING GROWTH FUND
PERFORMANCE OVER TIME (AS OF 06/30/03)
This chart shows performance since inception (02/08/94) of a $10,000
hypothetical investment in the fund's standard shares, compared with the
performance (since 02/28/94) for the index shown.
[THE FOLLOWING WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Citizens Emerging Russell MidCap
Date Growth - Standard Growth Index
---- ----------------- --------------
02/08/94 10,000
02/28/94 10,060 10,000
06/30/94 9,930 9,110
06/30/95 12,238 11,518
06/30/96 17,431 14,235
06/30/97 18,134 16,739
06/30/98 24,127 20,758
06/30/99 32,837 24,974
06/30/00 59,781 37,108
06/30/01 37,353 25,415
06/30/02 27,961 18,721
06/30/03 25,927 20,097
The most positive contributions to performance came from the consumer staples,
health care and industrials sectors. Our underweighting in consumer staples paid
off, as that sector of the benchmark index experienced the biggest loss over the
12-month period. In health care, a significant overweighting and good stock
selection in biotechnology generated positive results. Strong gains came from
Gilead Sciences Inc., MedImmune Inc., and Neurocrine Biosciences Inc. Good stock
selection in industrials (more specifically, within commercial services and
suppliers) protected the portfolio from a sector of the index that was down
during the period.
The biggest detractors from performance during the period came from our consumer
discretionary, information technology and financials sector allocations. Our
consumer discretionary picks underperformed versus the index. Within that
sector, our investments in both media and automobiles hurt performance, although
they started to show improvement late in the fiscal year. Our holdings in
information technology, particularly software and hardware equipment, also
underperformed their more speculative peers. In software, strong performance by
some holdings was more than offset by stocks that suffered steep declines during
the period. Security selection in the financial sector also hurt performance.
We believe that the market will soon begin to take a longer-term view that
discriminates between companies offering strong long-term prospects and those
lacking solid fundamentals. When that happens, we feel that our commitment to
holding quality companies should reward our shareholders to a greater degree.
5
PORTFOLIO REVIEW CITIZENS SMALL CAP CORE GROWTH FUND
Goal
Capital appreciation
Strategy
Invests mainly in stocks of small-capitalization U.S. companies
Inception Dates
Standard shares
12/28/99
Important Notes
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Past
performance does not guarantee future results. All index and fund performance
figures assume reinvestment of dividends and distributions. Index results do not
include costs of investing, which would lower performance. The index is
unmanaged, and you cannot invest directly in it. When you sell your fund shares,
they may be worth more or less than what you paid for them. Fee waivers were
instituted in the past and during the report period to maintain expense limits,
without which returns would have been lower.
Investments in the Citizens Small Cap Core Growth Fund involve unique risks, as
small-and medium-sized companies may have inexperienced management, limited
product line, a difficult time obtaining financing or market share, and their
shares may be more volatile and not traded as frequently or in as large a volume
as larger companies.
The Russell 2000 Growth Index measures the performance of those Russell 2000
companies with higher price-to-book ratios and higher forecasted growth values.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
AVERAGE ANNUAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 Since
Symbol Months Year Years Inception
Standard shares CSCSX 14.08% -5.56% -8.21 -3.94%
Despite strong consumer spending and an accommodating Fed monetary policy
throughout the fiscal year ended June 30, 2003, the U.S. economy remained weak.
In addition to ongoing economic and geopolitical anxieties, the majority of the
period was characterized by muted corporate earnings, flat capital expenditures,
and lower global demand and output. However, during the second half of the
fiscal year, capital expenditures and corporate earnings started showing signs
of improvement.
U.S. stocks (as measured by the S&P 500 Index) moved in alternating directions
from quarter to quarter during the fiscal year ended June 30, 2003. During the
first three months of the period, stocks suffered their largest quarterly loss
(-17%) since 1987. In the following three months, a strong GDP report and a
surprise interest rate cut by the Fed set off a rally that pushed stock prices
up more than 8%. In the first three months of 2003, the war in Iraq dominated
people's minds, and stocks finished the quarter down 3%. However, the end of
major combat action in Iraq sparked a rally where stocks rebounded more than 15%
over the last three months of the period. All told, the S&P 500 Index ended the
12-month period relatively flat with a 0.25% gain.
Small-cap growth stocks (as measured by the Russell 2000 Growth Index, the
fund's benchmark) followed a similar pattern as the S&P 500 Index -- but with
even greater quarter-to-quarter volatility. In the end, small-cap growth stocks
finished the 12-month period with a small gain of 0.69%. The Citizens Small Cap
Core Growth Fund (Standard shares) generated a -5.56% return during the fiscal
year ended June 30, 2003.
Our strategy was to invest in high-quality small-cap stocks. However, the
general market trend during the period was that stocks of lower-quality
companies (i.e., unprofitable, low-dollar-priced companies with weak balance
sheets) experienced the most dramatic increases. This pattern was quite strong
in the small-cap market during the period, as the most beaten-down stocks
noticeably outperformed stocks of more fundamentally sound companies.
Positive contributions to the fund's performance during the period came from our
health care, industrials and consumer staples holdings. Within health care, our
6
CITIZENS SMALL CAP CORE GROWTH FUND
equipment and services holdings in Integra LifeSciences and Thoratec Corp.
performed strongly during the period. Within industrials, strong performers in
commercial services and suppliers included Career Education and United
Stationers Inc. Within consumer staples, good stock selection helped
performance, as did our avoidance of Fleming Cos., an index holding that went
bankrupt during the period.
PERFORMANCE OVER TIME (AS OF 06/30/03)
This chart shows performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over the
same period for the index shown.
[THE FOLLOWING WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Citizens Small Cap Russell 2000
Date Core Growth Growth Index
---- ------------------ ------------
12/28/99 10,000 10,000
06/30/00 11,230 10,651
06/30/01 9,537 8,165
06/30/02 9,197 6,124
06/30/03 8,686 6,166
The biggest detractors from performance came within the technology and consumer
discretionary sectors. In technology, our higher-quality holdings in both the
software and services and the hardware and equipment industries underperformed
more speculative issues. This was particularly noticeable during the rally late
in the period. In the consumer discretionary sector, solid stock selection in
automobiles and components and consumer durables and apparel were more than
offset by weak performance from our media, restaurants, and retailing holdings.
Our investments in both media and restaurants hurt performance, although they
started to show improvement late in the fiscal year. In retailing, a number of
our holdings suffered declines due to disappointing earnings, as a turnaround in
consumer spending on retail goods was slow to materialize.
We believe that the early stages of economic recovery are starting to take hold,
and that the market will soon begin to take a longer-term view regarding
companies offering strong long-term prospects. As the economy continues to
improve, we feel that our commitment to holding quality companies should reward
our shareholders to a greater degree.
7
PORTFOLIO REVIEW CITIZENS VALUE FUND
Goal
Long-term capital appreciation
Strategy
Invests mainly in stocks and other equities of U.S. large-capitalization
companies
Inception Dates
Standard shares
06/13/96
Important Notes
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Past
performance does not guarantee future results. All index and fund performance
figures assume reinvestment of dividends and distributions. Index results do not
include costs of investing, which would lower performance. The index is
unmanaged, and you cannot invest directly in it. When you sell your fund shares,
they may be worth more or less than what you paid for them. Fee waivers were
instituted in the past to maintain expense limits, without which returns would
have been lower.
The S&P 500 Index is an unmanaged index comprised of 500 common stocks chosen
for market size, liquidity and industry group representation.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
(1) Includes performance of the fund's predecessor, the Meyers Pride Value Fund,
for the periods prior to September 24, 2001.
(2) According to Lipper Analytical Services, Inc., within the large value
category for the period ended June 30, 2003, the fund's performance ranked it
125 out of 387 funds for one year, 278 out of 288 funds for three years, and 69
out of 207 funds for five years.
AVERAGE ANNUAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 Since
Symbol Months Year Years Inception
Standard shares(1) MYPVX 14.44% -1.14% 0.39% 5.71%
It was encouraging to see positive signs such as strong consumer spending and an
accommodating Fed monetary policy throughout the period. However, those two
factors alone were not enough to jump start a weak U.S. economy. In addition to
ongoing economic and geopolitical anxieties, the majority of the year was
characterized by low growth expectations, depressed corporate earnings, flat
capital expenditures, and lower global demand and output.
U.S. stocks (as measured by the S&P 500 Index) moved in alternating directions
from quarter to quarter during the fiscal year ended June 30, 2003. During the
first three months of the period, stocks suffered their largest quarterly loss
(-17%) since 1987. In the following three months, a strong GDP report and a
surprise interest rate cut by the Fed set off a rally that pushed stock prices
up more than 8%. In the first three months of 2003, the war in Iraq dominated
people's minds, and stocks finished the quarter down 3%. However, the end of
major combat action in Iraq sparked a rally where stocks rebounded more than 15%
over the last three months of the period. All told, the S&P 500 Index ended the
12-month period relatively flat with a 0.25% gain.
Fiscal 2003 was a year of successful transition for Citizens Value Fund. In
October 2002 Citizens Advisers began managing the fund in-house. Our approach is
to use fundamental analysis to identify high-quality companies (i.e., those with
healthy balance sheets and stable, more predictable earnings) that are selling
at a discount to their peers or historic values. We believe this "quality value"
style has excellent potential to be a rewarding investment strategy with a lower
risk profile.
The results over the last nine months of the period were encouraging. The fund
made up much of its loss from the beginning of the fiscal year, finishing with a
- -1.14% return for the 12 months ended June 30, 2003. This placed the fund in the
top third of its large-cap value peer group(2) for the one year period. (The
fund finished in the 97th percentile for three years and the 34th percentile for
five years.)
During the second half of the fiscal year the fund gained 14.44%, while its
benchmark index, the S&P 500 Index, returned 11.76%. Good stock selection across
most sectors
8
CITIZENS VALUE FUND
enabled the fund to perform well over the six months ended June 30, 2003.
Financials, health care, consumer discretionary and information technology were
the top contributing sectors. The weakest sectors were telecomm services and
energy.
PERFORMANCE OVER TIME (AS OF 06/30/03)
This chart shows performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over the
same period for the index shown.
[THE FOLLOWING WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Date Citizens Value Fund S&P 500 Index
---- ------------------- -------------
06/13/96 10,000 10,000
06/30/96 9,740 10,029
06/30/97 12,350 13,509
06/30/98 14,506 17,584
06/30/99 17,893 21,585
06/30/00 19,209 23,150
06/30/01 23,325 19,716
06/30/02 14,966 16,170
06/30/03 14,795 16,210
For the full year the fund benefited both from stocks it held as well as from
the stocks it avoided. The best performing stock for the year was Qualcomm,
which we held during two periods of rapid appreciation. Qualcomm benefited from
a resurgence of the wireless industry. The fund also benefited from owning AOL
Time Warner and FleetBoston, two large companies whose shares were under
pressure, but experienced nice recoveries during the year. Avoiding the shares
of ExxonMobil, Boeing and Lockheed Martin also benefited the fund versus the S&P
500, because these socially rejected companies experienced significant market
value declines during the 12-month period.
Less successful investments made during the early part of the year included
Calpine and Digital Lightwave. These were names that had fallen significantly in
price at the time they were acquired. However, each of them continued to have
financial and operational issues that precipitated further declines. The current
quality value strategy seeks to avoid investing in highly distressed companies
and these holdings were sold in October 2002 when the new strategy was put in
place.
Our outlook is positive for the Citizens Value Fund. We believe we are in the
early stages of an economic recovery and that a disciplined, fundamentally
driven value strategy should outperform over the long term.
9
PORTFOLIO REVIEW CITIZENS BALANCED FUND
Goal
Current income and capital appreciation
Strategy
Invests in a blend of stocks, bonds, and money market securities
Inception Dates
Standard shares
12/20/02
Important Notes
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Past
performance does not guarantee future results. All index and fund performance
figures assume reinvestment of interest, dividends and distributions. Index
results do not include costs of investing, which would lower performance. The
index is unmanaged, and you cannot invest directly in it. When you sell your
fund shares, they may be worth more or less than what you paid for them. Fee
waivers are currently in effect and have been instituted in the past to maintain
expense limits, without which returns would have been lower.
The S&P 500 Index is an unmanaged index comprised of 500 common stocks chosen
for market size, liquidity and industry group representation. The Lehman
Brothers U.S. Aggregate Bond Index is an unmanaged index of taxable, investment-
grade fixed-income securities, including government, corporate, mortgage and
asset-backed securities. Interest rate increases can cause the value of bonds to
decrease, meaning that a bond fund investment may lose value in a rising
interest rate environment.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
(1) Blended Index is comprised of 60% S&P 500 Index and 40% Lehman Brothers U.S.
Aggregate Bond Index.
TOTAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 Since
Symbol Months Year Years Inception
Standard shares N/A 5.29% N/A N/A 4.87%
Since the fund's inception on December 20, 2002, through June 30, 2003, both
domestic equity and bond prices experienced gains. In the first three months of
2003, the war in Iraq dominated people's minds, and stocks (as measured by the
S&P 500 Index) finished the quarter down 3%. However, the end of major combat
action in Iraq sparked a rally where stocks rebounded more than 15% over the
last three months of the period. During the last six months of fiscal 2003, the
S&P 500 Index gained 11.76% and the Lehman Brothers U.S. Aggregate Bond Index
gained 3.93%.
The Citizens Balanced Fund generated a total return of 4.87% from its inception
date through June 30, 2003, while its benchmark index, a blended index of 60%
S&P 500 Index and 40% Lehman Brothers U.S. Aggregate Bond Index, gained 8.64%.
Since the fund started we have taken a gradual but increasingly aggressive
posture in allocating the portfolio between stocks and bonds. Our cautious
pre-war stance shifted in a more opportunistic direction based on timely
resolution of the conflict in Iraq. Believing that the economy would gradually
recover and the market would move to the upside, we adjusted the fund's equity
allocation from 66% on March 31, 2003, to 68.4% as of June 30, 2003. While our
thesis of increasing our overweight to equities proved valid, our commitment to
investing in high-quality stocks (i.e., companies with healthy balance sheets
and stable, more predictable earnings) within higher-growth, economically
sensitive sectors was not fully rewarded in the last six months of fiscal 2003.
Stocks generated positive returns during that period. However, the most
speculative issues generated the biggest gains.
Positive contributions to performance in our equity holdings came from our
underweighting to consumer staples, as that turned out to be one of the weakest
performing (albeit, still positive) sectors of the S&P 500 Index during the last
half of fiscal 2003. Stock selection was also strong within the sector,
particularly in the food and staples retailing industry and household and
personal products industry. Positive contributions also came from health care,
where good stock selection in the pharmaceuticals and biotechnology industry
created gains.
10
CITIZENS BALANCED FUND
PERFORMANCE OVER TIME (AS OF 06/30/03)
This chart shows performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over the
same period for the index shown.
[THE FOLLOWING WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Citizens Balanced
Date Fund - Standard Balanced Index
---- ----------------- --------------
12/20/02 10,000 10,000
12/31/02 9,960 9,998
03/31/03 9,735 9,864
06/30/03 10,487 10,864
Detractors from our equity performance came from our technology,
telecommunications and consumer discretionary holdings. In technology, our
overweighting versus the equity portion of the benchmark proved helpful.
However, our holdings in the hardware and equipment industry and software and
services industry underperformed. Our telecommunications holdings made a
negative contribution to return, as some of the companies that faltered and were
sold during the first calendar quarter of 2003 subsequently achieved strong
performance during the following quarter. Within the consumer discretionary
sector our overweighting in retailer Kohls detracted from performance, as lower
sales figures and excess inventory created a loss for that holding. Not owning
Best Buy also hurt, as the company's stock experienced a strong rebound based on
its sell-off of unproductive business units and continued strong demand for
electronics. Our commitment to the media industry detracted from performance.
However, that industry started to show improvement late in the period.
The fixed-income portion of the fund lagged the Lehman Brothers U.S. Aggregate
Bond Index. This was due primarily to our underweighting in the corporate market
versus the index, where both investment-quality and lower-quality higher-yield
corporates outperformed higher-quality issues. As the asset size of the fund
increases we plan to boost our allocation to investment-quality corporates,
assuming market fundamentals continue to support such a move.
We believe that the market will soon begin to take a longer-term view that
discriminates between companies offering strong long-term prospects and those
lacking solid fundamentals. When that happens, we feel that our commitment to
holding quality companies should reward shareholders to a greater degree.
11
PORTFOLIO REVIEW CITIZENS GLOBAL EQUITY FUND
Goal
Capital appreciation
Strategy
Invests mainly in stocks and other equities of foreign and U.S. companies
Inception Dates
Standard shares
02/08/94
Institutional shares
11/01/99
Administrative shares
02/04/00
Important Notes
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Past
performance does not guarantee future results. All index and fund performance
figures assume reinvestment of dividends and distributions. Index results do not
include costs of investing, which would lower performance. The index is
unmanaged, and you cannot invest directly in it. When you sell your fund shares,
they may be worth more or less than what you paid for them. Fee waivers were
instituted in the past to maintain expense limits, without which returns would
have been lower.
Investments in the Citizens Global Equity Fund involve risks of investing in
foreign markets, including political instability and currency risks, excessive
taxation, different financial and auditing standards, increased market
volatility and other factors.
The Morgan Stanley Capital International (MSCI) World Index is an unmanaged
market capitalization weighted equity index of over 1,500 stocks traded in 22
world markets.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
AVERAGE ANNUAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 Since
Symbol Months Year Years Inception
Standard shares WAGEX 4.94% -5.84% -1.88% 5.35%
Institutional shares CGEIX 5.24% -5.21% N/A -10.97%
Administrative shares CEADX 5.05% -5.52% N/A -21.50%
Over the first six to nine months of fiscal year 2003, stocks around the world
struggled to make progress against a combination of slowing economic activity
and growing economic and geopolitical anxieties. Much of the period was
characterized by lower growth expectations, depressed corporate earnings, flat
capital expenditures, and lower global demand and output. Until the last quarter
or so, the monetary stimulus administered by global central banks appeared to
have failed to jump start the global economy or boost global equity prices. More
recently, there have been increasing signs of an incipient -- albeit anemic --
economic recovery.
Throughout the fiscal year, global equity markets showed unprecedented quarterly
volatility. After a near-panic rout in the first three months, global equity
markets moved up sharply on a technical bounce only to languish again in the
following three months on geopolitical concerns. A similar whiplash took place
during the last three months of the period -- one which we believe marks a
turning point in global markets.
Despite a 17.04% gain in the last three months of the period, global equity
markets (as measured by the MSCI World Index, the fund's benchmark index) were
down -2.36% over the fiscal year ended June 30, 2003. Citizens Global Equity
Fund (Standard shares) generated a return of -5.84% during this period.
Investment themes developed during the period included our overweight in energy,
where we favored natural gas companies that would benefit from capacity
constraints and increased demand. We also looked to biotechnology in order to
add higher growth potential within our health care allocation. In addition, we
focused our telecommunications exposure on entrenched local carriers and
wireless companies.
During the period our best performing sectors included energy, information
technology, and telecommunications. Within the energy sector EnCana was the best
performing of our natural gas holdings. In telecommunications, Vodafone and
Telefonica were standouts during the period. Other strong performers included
two financial stocks, Citigroup and Amvescap -- each benefiting from the surge
in global equity markets. In general, our defensive stocks within the
utilities, materials and consumer staples
12
CITIZENS GLOBAL EQUITY FUND
sectors performed resiliently under a difficult market backdrop.
PERFORMANCE OVER TIME (AS OF 06/30/03)
This chart shows performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over the
same period for the index shown.
[THE FOLLOWING WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Citizens Global Merrill Lynch 1-Year
Date Equity - Standard Treasury Note Index
---- ----------------- --------------------
02/08/94 10,000 10,000
06/30/94 9,800 9,942
06/30/95 10,758 11,002
06/30/96 12,107 13,031
06/30/97 14,734 15,934
06/30/98 17,939 18,647
06/30/99 21,946 21,569
06/30/00 33,648 24,199
06/30/01 22,312 19,287
06/30/02 17,328 16,352
06/30/03 16,317 15,966
Detractors from performance came from our holdings within the consumer
discretionary and financials sectors. We held a number of stocks that
underperformed for their own individual reasons. Sony's stock price suffered
after it announced a profits warning toward the end of the period. In a
disparate financials sector, Allianz and Mitsubishi Tokyo Financial failed to
perform and were subsequently sold. In very volatile trading, companies like
ASML Holding, which we view as an early recovery stock, moved to the downside,
although it did start to show improvement during the rally late in the fiscal
year.
We are looking to the first half of fiscal 2004 to provide confirmation that the
easing of monetary conditions around the world is indeed sufficient to stimulate
economic growth. Should that occur, we expect psychology in equity markets
worldwide to recover markedly. Coupled with better than anticipated earnings
releases, we believe these signs will underpin further rallies from current
levels. Accordingly, we are positioning the fund for what we expect to be better
markets ahead and are retaining our overweights to the growth areas of
technology and telecommunications in particular.
13
PORTFOLIO REVIEW CITIZENS INTERNATIONAL GROWTH FUND
Goal
Capital appreciation
Strategy
Invests mainly in stocks and other equities of foreign companies
Inception Dates
Standard shares
12/20/00
Important Notes
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Past
performance does not guarantee future results. All index and fund performance
figures assume reinvestment of dividends and distributions. Index results do not
include costs of investing, which would lower performance. The index is
unmanaged, and you cannot invest directly in it. When you sell your fund shares,
they may be worth more or less than what you paid for them. Fee waivers were
instituted in the past and during the report period to maintain expense limits,
without which returns would have been lower.
Investments in the Citizens International Growth Fund involve risks of investing
in foreign markets, including political instability and currency risks,
excessive taxation, different financial and auditing standards, increased market
volatility and other factors.
The MSCI EAFE Index is an unmanaged index of foreign stock funds and is an
aggregate of 21 individual country indices that collectively represent many of
the major markets of the world.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
AVERAGE ANNUAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 Since
Symbol Months Year Years Inception
Standard shares N/A 4.26% -9.06 N/A -17.67%
Over the first six to nine months of the fiscal year ended June 30, 2003, stock
markets around the world struggled to make progress against a combination of
slowing economic activity and growing economic and geopolitical anxieties. Much
of the period was characterized by lower growth expectations, depressed
corporate earnings, flat capital expenditures, and lower global demand and
output. Until the last quarter or so, the monetary stimulus administered by
global central banks appeared to have failed to jump start the economy or boost
equity prices. More recently, there have been increasing signs of an incipient
- -- albeit anemic -- economic recovery.
Throughout the fiscal year, foreign equity markets showed unprecedented
quarterly volatility. After a near-panic rout in first three months, global
equity markets moved up sharply on a technical bounce only to languish in the
following three months on geopolitical concerns. A similar whiplash took place
during the last three months of the period -- one which we believe marks a
turning point in international markets. Despite a 19.27% gain over the last
three months of the period, foreign equity markets (as measured by the MSCI EAFE
Index, the fund's benchmark index) were down -6.43% over the 12-month period.
Citizens International Growth Fund (Standard shares) generated a return of
- -9.06% during this period.
In large part, this underperformance can be attributed to our focus on
high-quality, large-cap companies (i.e., companies with healthy balance sheets
and stable, more predictable earnings) during a period in which more speculative
companies led the fledgling recovery. Although growth-oriented sectors such as
technology began to recover toward the end of the period, in general more
defensive value stocks performed better.
Positive contributions to the fund's return came from our overweight to energy.
EnCana and Precision Drilling did well -- both offering exposure to natural gas
prices. Both oil and natural gas surged over the 12-month period, mainly on
supply/demand imbalances. Other positive sector performance came from the basic
materials and
14
CITIZENS INTERNATIONAL GROWTH FUND
utilities areas, where strong commodity prices and lower interest rates
respectively helped buoy financial performance.
PERFORMANCE OVER TIME (AS OF 06/30/03)
This chart shows performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over the
same period for the index shown.
[THE FOLLOWING WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Citizens MSCI
Date International Growth EAFE Index
---- -------------------- ----------
12/20/00 10,000 10,000
06/30/01 8,220 8,688
06/30/02 6,730 7,863
06/30/03 6,120 8,129
Our overweight to technology detracted from performance over the 12 months,
despite having racked up gains in the last quarter of the fiscal year. We
increased our exposure when prices were falling during the first three months of
the period. However, technology stocks -- and in particular the semi-conductor
industry -- have remained quite volatile. We are retaining our overweight in
this sector given that a recovery in levels of capital expenditure is already
being seen, albeit unevenly.
We are looking to the first half of fiscal 2004 to provide confirmation that the
easing of monetary conditions around the world is indeed sufficient to stimulate
economic growth. Should that occur, we expect psychology in equity markets
worldwide to recover markedly. Coupled with better than anticipated earnings
releases, we believe these signs will underpin further rallies from current
levels. Accordingly, we are positioning the fund for better markets ahead and
are retaining our overweights to the growth areas of technology and
telecommunications in particular.
15
PORTFOLIO REVIEW CITIZENS INCOME FUND
Goal
Current income and monthly dividend payment
Strategy
Invests mainly in bonds and mortgage-backed securities
Inception Dates
Standard shares
06/10/92
Important Notes
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Past
performance does not guarantee future results. All index and fund performance
figures assume reinvestment of interest, dividends and distributions. Index
results do not include costs of investing, which would lower performance. The
index is unmanaged, and you cannot invest directly in it. When you sell your
fund shares, they may be worth more or less than what you paid for them. Fee
waivers were instituted in the past to maintain expense limits, without which
returns would have been lower.
The Lehman Brothers U.S. Aggregate Bond Index is an unmanaged index of taxable,
investment-grade fixed-income securities, including government, corporate,
mortgage and asset-backed securities. Interest rate increases can cause the
value of bonds to decrease, meaning that a bond fund investment may lose value
in a rising interest rate environment.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
AVERAGE ANNUAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 Since
Symbol Months Year Years Inception
Standard shares WAIMX 5.67% 11.28% 4.38% 5.74%
Throughout the fiscal year ended June 30, 2003, interest rates have trended
downward in reaction to an ongoing effort by the Federal Reserve Bank to restart
the economy. The federal funds rate (the rate banks charge each other for
overnight loans) declined from 1.75% in June 2002 to 1.00% at the end of the
fiscal year, marking a 40-year low.
Strong consumer spending and an accommodating Fed monetary policy were positives
throughout the period. However, those two factors alone were not enough to jump
start a weak U.S. economy. In addition to ongoing economic and geopolitical
anxieties, the majority of the year was characterized by low growth
expectations, depressed corporate earnings, flat capital expenditures, and lower
global demand and output.
While declining interest rates pushed yields on bond funds lower over the past
year, they have had a positive impact on the total return investors have earned
on bond fund investments. For the fiscal year ended June 30, 2003, the Citizens
Income Fund generated a total return of 11.28%, outperforming its benchmark
index, the Lehman Brothers U.S. Aggregate Bond Index, which gained 10.40%.
Our thesis early in the fiscal year was that corporate spreads (the difference
between yields on corporate bonds and U.S. Treasury bonds) were too wide and
that corporate bonds in general were undervalued. Therefore, we increased our
corporate exposure to take advantage of this market condition. After a slow
start through the summer of 2002, the corporate bond market experienced one of
its best performing periods in two decades, signaling an upturn in profit growth
over the next 12 months.
Within the corporate market, we were overweighted in financials, cable, and
telecommunications versus the benchmark index. These sectors performed well
during the period due to a number of factors, including improving balance
sheets, cost-cutting measures, and improvements in productivity. Specifically,
the fund holdings that performed well included Bear Stearns and Goldman Sachs in
the financials sector, Comcast and Cox in the cable industry, and Verizon in the
telecommunications sector.
16
CITIZENS INCOME FUND
PERFORMANCE OVER TIME (AS OF 06/30/03)
This chart shows performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over the
same period for the index shown.
[THE FOLLOWING WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Citizens Lehman Brothers
Date Income U.S. Aggregate Bond Index
---- -------- -------------------------
06/10/92 10,000 10,000
06/30/92 10,080 10,117
06/30/93 11,096 11,310
06/30/94 11,100 11,162
06/30/95 12,255 12,563
06/30/96 12,927 13,193
06/30/97 14,163 14,268
06/30/98 15,649 15,773
06/30/99 15,770 16,269
06/30/00 16,298 17,011
06/30/01 17,579 18,922
06/30/02 17,427 20,554
06/30/03 19,393 22,872
At different points throughout the fiscal year, there were various factors that
detracted from performance. Being underweight in mortgage-backed securities and
Treasuries had a negative impact during a flight-to-quality in bond markets
during July and August 2002. Our underweighting in lower-quality,
higher-yielding corporates also was a detractor, as that sector of the bond
market performed strongly throughout most of the 12-month period ended June 30,
2003. Despite these short-term challenges, the portfolio generated strong
risk-managed returns during the fiscal year.
We believe that improving corporate balance sheets and a gradually improving
economic picture will be some of the key factors influencing the fixed-income
market in the first half of fiscal 2004. That said, it is our opinion that the
Fed appears unlikely to raise interest rates until there are clear signs of a
stronger and sustainable economic recovery. Within this environment, we will
remain cautious as we look for opportunities to increase yield while attempting
to minimize share price volatility.
17
PORTFOLIO REVIEW CITIZENS ULTRA SHORT BOND FUND
Goal
High level of current income consistent with preservation of capital
Strategy
Invests mainly in short-duration investment-grade securities
Inception Dates
Standard shares
11/21/02
Important Notes
The table and graph do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. Past
performance does not guarantee future results. All index and fund performance
figures assume reinvestment of dividends and distributions. Index results do not
include costs of investing, which would lower performance. The index is
unmanaged, and you cannot invest directly in it. When you sell your fund shares,
they may be worth more or less than what you paid for them. Fee waivers are
currently in effect and have been instituted in the past to maintain expense
limits, without which returns would have been lower.
The Merrill Lynch 1-Year Treasury Note Index is an unmanaged index that tracks
the performance of U.S. Treasury notes with maturities of approximately one
year. The index is produced by Merrill Lynch, Pierce, Fenner & Smith, Inc.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
TOTAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 Since
Symbol Months Year Years Inception
Standard shares N/A 1.58% N/A N/A 2.12%
Throughout the fiscal year ended June 30, 2003, interest rates have trended
downward in reaction to an ongoing effort by the Federal Reserve Bank to restart
the economy. The federal funds rate (the rate banks charge each other for
overnight loans) declined from 1.75% in June 2002 to 1.00% at the end of the
fiscal year, marking a 40-year low.
Strong consumer spending and an accommodating Fed monetary policy were positives
throughout the period. However, those two factors alone were not enough to jump
start a weak U.S. economy. In addition to ongoing economic and geopolitical
anxieties, the majority of the year was characterized by low growth
expectations, depressed corporate earnings, flat capital expenditures, and lower
global demand and output.
Since the inception of the fund on November 21, 2002, short-term interest rates
declined in reaction to a reduction of the federal funds rate. The yield on the
Merrill Lynch 1-Year Treasury Note Index (the fund's benchmark index) fell from
1.52% in the beginning of December 2002 to 1.05% as of June 30, 2003. While
declining rates have negatively impacted the fund's yield, they had a positive
impact on the total return of the fund.
During this historically low interest rate environment, the 30-day yield on the
Citizens Ultra Short Bond Fund (Standard shares) stood at 1.56% as of June 30,
2003. Since its inception on November 21, 2002 through June 30, 2003, the fund
generated a total return of 2.12%, outperforming its benchmark index, which
gained 1.27%.
Since its inception, the fund's strategy has been to focus on share price
stability as well as increasing yield when possible. This was achieved by owning
low-duration, high-quality corporate bonds and asset-backed securities. In
particular, our corporate exposure made a strong contribution to the fund's
yield and total return since inception. Also, the fund's asset-backed securities
outperformed U.S. Treasuries and government agency issues.
Other funds have benefited from buying higher-yielding, lower-quality
securities. Avoiding these types of issues has hampered fund performance to some
degree, as the
18
CITIZENS ULTRA SHORT BOND FUND
market has favored more speculative issues during the last two quarters of the
fiscal year. Going forward, we plan to continue to stay clear of lower-quality
issues due to their increased credit risk and their potential negative impact on
the fund's share price in the event of a default.
PERFORMANCE OVER TIME (AS OF 06/30/03)
This chart shows performance since inception of a $10,000 hypothetical
investment in the fund's Standard shares, compared with the performance over the
same period for the index shown.
[THE FOLLOWING WAS REPRESENTED BY A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Citizens Ultra Merrill Lynch 1-Year
Date Short Bond Fund Treasury Note Index
---- --------------- --------------------
11/30/02 10,000 10,000
12/31/02 10,053 10,039
03/31/03 10,139 10,083
06/30/03 10,212 10,127
We believe that improving corporate balance sheets and a gradually improving
economic picture will be some of the key factors influencing the fixed-income
market in the first half of fiscal 2004. That said, it appears that the Fed is
unlikely to raise interest rates until there are clear signs of a stronger and
sustainable economic recovery. Within this environment, we will remain cautious
as we look for opportunities to pick up yield while attempting to minimize share
price volatility.
19
PORTFOLIO REVIEW CITIZENS MONEY MARKET FUND
Goal
Current income consistent with safety and liquidity
Strategy
Invests exclusively in money market instruments
Inception Dates
Standard shares
08/30/83
Institutional shares
02/01/96
Important Notes
The table does not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Past performance does
not guarantee future results. When you sell your fund shares, they may be worth
more or less than what you paid for them.
Investments in the Citizens Money Market Fund are not insured or guaranteed by
the FDIC or any other government agency. Although the fund seeks to preserve the
value of your investment at $1.00 per share, it is possible to lose money by
investing in the fund.
Information contained in the Portfolio Review is not audited and therefore is
excluded from the Report of Independent Auditors.
AVERAGE ANNUAL RETURNS (AS OF 06/30/2003)
Ticker 6 1 5 10 Since
Symbol Months Year Years Years Inception
Standard shares WKAXX 0.22% 0.65% 3.25% 3.65% N/A
Institutional shares WAIXX 0.35% 0.95% 3.57% N/A 4.08%
Throughout the fiscal year ended June 30, 2003, interest rates trended downward
in reaction to an ongoing effort by the Federal Reserve Bank to restart the
economy. The federal funds rate (the rate banks charge each other for overnight
loans) declined from 1.75% in June 2002 to 1.00% at the end of the fiscal year,
marking a 40-year low.
In reaction to the Fed lowering rates, the yields offered by money market
instruments also continued to fall throughout the fiscal year. Commercial paper
rates in general have taken a very similar path as the federal funds rate,
dropping from approximately 1.75% in June 2002 to approximately 0.99% in June
2003.
One of the most significant factors impacting all money market funds during the
period was the 50 basis point interest rate cut by the Fed in November 2002.
This hurt performance because most of the investment community did not expect
such a large cut in the Fed funds rate.
During this historically low interest rate environment, the seven-day simple
yield on the Citizens Money Market Fund (Standard shares) moved from 0.94% as of
June 30, 2002, to 0.36% as of June 30, 2003. Over the 12-month period the fund's
Standard shares had a total return of 0.65%.
The fund's strategy during the period remained focused on investing in
high-quality securities of socially responsible companies, avoiding those with
credit and headline risk, and keeping the fund's weighted average maturity in
line with that of its peers.
We believe that improving corporate balance sheets and a gradually improving
economic picture will be some of the key factors influencing the fixed-income
market in the first half of fiscal 2004. That said, it appears that the Fed is
unlikely to raise rates until there are clear signs of a stronger and
sustainable economic recovery. Within this environment, we will remain cautious
as we look for opportunities to pick up yield while staying relatively close to
the weighted average maturity of our peers.
20
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Trustees of Citizens Funds:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolio holdings, and the related statements of operations and of changes
in net assets and the financial highlights present fairly, in all material
respects, the financial position of Citizens Core Growth Fund, Citizens Emerging
Growth Fund, Citizens Small Cap Core Growth Fund, Citizens Value Fund, Citizens
Balanced Fund, Citizens Global Equity Fund, Citizens International Growth Fund,
Citizens Income Fund, Citizens Ultra Short Bond Fund and Citizens Money Market
Fund (the "Funds") at June 30, 2003, the results of each of their operations,
the changes in each of their net assets and the financial highlights for each of
the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at June
30, 2003 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
Columbus, Ohio
August 15, 2003
21
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Core Growth Fund
Security Shares Value($)
- --------------------------------------------------------------------------------
COMMON STOCKS - 97.7%
Air Freight - 1.6%
FedEx Corp. 93,060 5,773
Airlines - 0.6%
Southwest Airlines Co. 116,000 1,995
Banks - 1.7%
Bank of America Corp. 44,000 3,477
PNC Bank Corp. 54,000 2,636
--------
6,113
Biotechnology - 4.4%
Amgen, Inc. (a) 134,150 8,912
Cephalon, Inc. (a) 60,000 2,470
Gilead Sciences, Inc. (a) 48,000 2,668
Millenium Pharmaceuticals, Inc. (a) 87,000 1,369
--------
15,419
Broadcasting - 3.0%
Clear Channel
Communications, Inc. (a) 188,000 7,969
Fox Entertainment Group, Inc.,
Class A (a) 95,000 2,734
--------
10,703
Computers - 12.8%
Dell Computer Corp. (a) 106,500 3,404
Intel Corp. 257,200 5,346
International Business
Machines Corp. 67,000 5,527
Mercury Interactive Corp. (a) 66,000 2,548
Microsoft Corp. 492,100 12,602
Oracle Corp. (a) 381,000 4,580
Seagate Technology (a) 160,000 2,824
Symantec Corp. (a) 57,700 2,531
Veritas Software Corp. (a) 92,000 2,638
Yahoo!, Inc. (a) 88,000 2,883
--------
44,883
Electronics - 7.7%
Adobe Systems, Inc. 145,000 4,651
Analog Devices, Inc. (a) 88,000 3,064
Broadcom Corp., Class A (a) 107,000 2,665
Cisco Systems, Inc. (a) 201,900 3,370
Electronic Arts, Inc. (a) 24,000 1,776
Flextronics International (a) 336,000 3,492
Juniper Networks, Inc. (a) 133,000 1,645
Marvel Technology Group, Ltd. (a) 58,000 1,993
Maxim Integrated Products, Inc. 75,000 2,564
Texas Instruments, Inc. 99,000 1,742
--------
26,962
Energy & Utilities - 5.4%
Apache Corp. 41,600 2,706
Baker Hughes, Inc. 77,000 2,585
BJ Services Co. (a) 67,000 2,503
ConocoPhillips 63,000 3,452
Devon Energy Corp. 50,000 2,670
EOG Resources, Inc. 86,000 3,599
Vulcan Power Co., Class A (a) (b) 40,000 --
Weatherford International, Ltd. (a) 38,739 1,623
--------
19,138
Entertainment - 3.5%
AOL Time Warner, Inc. (a) 461,000 7,417
Comcast Corp., Class A (a) 53,000 1,600
Viacom, Inc. (a) 78,424 3,424
--------
12,441
Financial - Diversified - 9.8%
American Express Co. 124,945 5,224
Citigroup, Inc. 286,700 12,270
J.P.Morgan Chase & Co. 130,000 4,443
Janus Capital Group, Inc. 160,000 2,624
Legg Mason, Inc. 27,000 1,754
Mellon Financial Corp. 65,000 1,804
State Street Corp. 67,000 2,640
Wells Fargo & Co. 75,000 3,780
--------
34,539
Foods - 3.8%
Campbell Soup Co. 141,000 3,455
PepsiCo, Inc. 180,500 8,032
Wm.Wrigley Jr. Co. 31,000 1,743
--------
13,230
Health Care - 15.1%
AmerisourceBergen Corp. 39,000 2,705
Barr Laboratories, Inc. (a) 56,000 3,668
Boston Scientific Corp. (a) 26,500 1,619
Eli Lilly & Co. 64,900 4,476
Express Scripts, Inc. (a) 27,000 1,845
Johnson & Johnson, Inc. 102,948 5,321
Medtronic, Inc. 53,338 2,559
Merck & Co., Inc. 61,000 3,694
Mylan Laboratories, Inc. 53,000 1,843
Pfizer, Inc. 492,200 16,808
St. Jude Medical, Inc. (a) 32,000 1,840
UnitedHealth Group, Inc. 94,000 4,723
WellPoint Health Networks, Inc. (a) 20,000 1,686
--------
52,787
See Financial Notes
22
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Core Growth Fund (cont.)
Security Shares Value($)
- --------------------------------------------------------------------------------
Insurance - 4.3%
American International Group, Inc. 167,934 9,267
Willis Group Holdings, Ltd. 78,700 2,420
XL Capital, Ltd. 41,000 3,403
--------
15,090
Investment Banking & Brokerage - 1.0%
The Goldman Sachs Group, Inc. 40,000 3,350
Leisure - 0.5%
Harley-Davidson, Inc. 44,000 1,754
Manufacturing - 3.6%
3M Co. 84,300 10,873
Illinois Tool Works, Inc. 28,000 1,844
--------
12,717
Personal Care - 2.5%
Colgate-Palmolive Co. 88,800 5,146
Gillette Co. 110,000 3,505
--------
8,651
Publishing - 1.0%
Gannett Co., Inc. 45,800 3,518
Restaurants - 1.3%
Brinker International, Inc. (a) 76,000 2,738
YUM! Brands, Inc. (a) 63,000 1,862
--------
4,600
Retail - 5.9%
Costco Wholesale Corp. (a) 118,400 4,334
eBay, Inc. (a) 18,000 1,875
InterActiveCorp, Inc. (a) 98,096 3,882
Kohl's Corp. (a) 35,700 1,834
Target Corp. 94,000 3,557
Tiffany & Co. 53,000 1,732
Walgreen Co. 121,200 3,648
--------
20,862
Services - 4.9%
Apollo Group, Inc., Class A (a) 62,000 3,829
Cendant Corp. (a) 336,000 6,155
First Data Corp. 42,000 1,740
Fiserv, Inc. (a) 73,000 2,600
Paychex, Inc. 88,000 2,579
--------
16,903
Telecommunications - 3.3%
Amdocs, Ltd. (a) 111,600 2,678
Nextel Communications, Inc. (a) 141,000 2,549
QUALCOMM, Inc 81,000 2,896
Verizon Communications, Inc. 88,000 3,472
--------
11,595
--------
Total Common Stocks 343,023
Cost:$296,814
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 1.6%
Fifth Third Bank,
0.95%, 07/01/03
(Proceeds at maturity $5,735,
collateralized by Federal Home Loan
Mortgage Corporation security, 5.00%, 10/15/31)
Cost: $5,735 5,735 5,735
--------
TOTAL INVESTMENTS - 99.3% 348,758
Cost: $302,549 (c)
Percentages indicated are based on net assets of $351,336.
(a) Non-income producing security.
(b) Restricted security constituting 0.00% of net assets which may not be
publicly sold without registration under the Securities Act of 1933. This
security is valued at its fair value as determined in good faith under
consistently applied procedures under the general supervision of the Trust's
Board of Trustees. Additional information on the security is as follows:
Acquisition Date: March 3, 1995
Cost: $300
Value: $0
(c) Represents cost for financial reporting purposes and differs for federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $9,488. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $43,385
Unrealized depreciation (6,664)
-------
Net unrealized appreciation $36,721
23
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Emerging Growth Fund
Security Shares Value($)
- --------------------------------------------------------------------------------
COMMON STOCKS - 100.0%
Airlines - 2.3%
Jetblue Airways Corp. (a) 92,300 3,903
Biotechnology - 8.8%
Allergan, Inc. 33,600 2,591
Gilead Sciences, Inc. (a) 59,200 3,290
IDEC Pharmaceuticals Corp. (a) 21,500 731
MedImmune, Inc. (a) 56,600 2,059
Millenium Pharmaceuticals, Inc. (a) 228,465 3,593
Neurocrine Biosciences, Inc. (a) 55,686 2,781
--------
15,045
Computers - 13.0%
Cognos, Inc. ADR (a) 84,600 2,284
Hyperion Solutions Corp. (a) 52,000 1,756
Intuit, Inc. (a) 21,000 935
Mercury Interactive Corp. (a) 81,212 3,136
Network Associates, Inc. (a) 162,100 2,055
Pixar, Inc. (a) 29,760 1,811
Seagate Technology (a) 160,000 2,824
Symantec Corp. (a) 36,200 1,588
Veritas Software Corp. (a) 90,000 2,580
Yahoo!, Inc. (a) 104,600 3,426
--------
22,395
Construction - 0.9%
Standard Pacific Corp. 48,700 1,615
Electrical Equipment - 2.0%
Fairchild Semiconductor Corp. (a) 67,930 869
Symbol Technologies, Inc. 203,481 2,647
--------
3,516
Electronics - 18.1%
Adobe Systems, Inc. 91,300 2,928
Analog Devices, Inc. (a) 56,890 1,981
Broadcom Corp., Class A (a) 125,500 3,126
Conexant Systems, Inc. (a) 427,000 1,751
Electronic Arts, Inc. (a) 33,700 2,493
Flextronics International (a) 168,800 1,754
International Rectifier Corp. (a) 31,900 856
Intersil Corp., Class A (a) 87,800 2,336
Jabil Circuit, Inc. (a) 89,600 1,980
Juniper Networks, Inc. (a) 130,200 1,611
Linear Technology Corp. 47,600 1,533
Marvel Technology Group, Ltd. (a) 83,600 2,873
Maxim Integrated Products, Inc. 37,500 1,282
Qlogic Corp. (a) 34,700 1,677
Sandisk Corp. (a) 69,700 2,812
--------
30,993
Energy & Utilities - 3.8%
Devon Energy Corp. 33,488 1,788
Noble Energy, Inc. 39,928 1,509
Smith International, Inc. (a) 39,588 1,454
Weatherford International, Ltd. (a) 44,359 1,860
--------
6,611
Financial - Diversified - 2.7%
Jefferies Group, Inc. 70,300 3,501
The Bear Stearns Cos., Inc. 16,300 1,180
--------
4,681
Health Care - 9.8%
AdvancePCS (a) 74,200 2,837
Cytyc Corp. (a) 273,400 2,876
SICOR, Inc. (a) 82,500 1,678
St. Jude Medical, Inc. (a) 36,600 2,105
Trimeris, Inc. (a) 76,800 3,508
WellPoint Health Networks, Inc. (a) 45,500 3,835
--------
16,839
Insurance - 4.1%
Anthem, Inc. (a) 31,500 2,430
W.R.Berkley Corp. 52,227 2,753
Willis Group Holdings, Ltd. 60,400 1,857
--------
7,040
Investment Banking & Brokerage - 2.2%
Affiliated Managers Group, Inc. (a) 62,080 3,784
Leisure - 1.5%
Harley-Davidson, Inc. 65,000 2,591
Multimedia - 4.2%
Cox Radio, Inc., Class A (a) 147,600 3,411
Emmis Communications Corp.,
Class A (a) 163,900 3,762
--------
7,173
Restaurants - 1.8%
Brinker International, Inc. (a) 48,400 1,743
YUM! Brands, Inc. (a) 46,315 1,369
--------
3,112
Retail - 8.5%
Abercrombie & Fitch Co. (a) 59,500 1,690
Bed Bath & Beyond, Inc. (a) 39,300 1,525
Claire's Stores, Inc. 58,100 1,473
Costco Wholesale Corp. (a) 54,000 1,976
Fastenal Co. 76,400 2,594
Hasbro, Inc. 106,000 1,854
Tiffany & Co. 105,300 3,442
--------
14,554
See Financial Notes
24
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Emerging Growth Fund (cont.)
Security Shares Value($)
- --------------------------------------------------------------------------------
Services - 12.6%
Apollo Group, Inc., Class A (a) 41,600 2,569
Career Education Corp. (a) 54,200 3,708
Corporate Executive Board Co. (a) 61,700 2,519
Fiserv, Inc. (a) 72,800 2,592
FTI Consulting, Inc. (a) 140,800 3,516
Getty Images, Inc. (a) 43,800 1,809
Kroll, Inc. (a) 4,062 110
Lamar Advertising Co. (a) 69,600 2,451
Paychex, Inc. 83,003 2,433
--------
21,707
Telecommunications - 3.7%
Amdocs, Ltd. (a) 88,200 2,117
Nextel Communications, Inc. (a) 138,300 2,500
UTStarcom, Inc. (a) 48,600 1,729
--------
6,346
--------
Total Common Stocks 171,905
Cost: $154,844
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 3.1%
Fifth Third Bank,
0.95%, 07/01/03
(Proceeds at maturity $5,307,
collateralized by Federal National
Mortgage Bank security, 7.00%, 12/01/17)
Cost: $5,307 5,307 5,307
--------
TOTAL INVESTMENTS - 103.1% $177,212
Cost: $160,151 (b)
Percentages indicated are based on net assets of $171,851.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs for federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $2,293. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $17,884
Unrealized depreciation (3,115)
-------
Net unrealized appreciation $14,769
ADR - American Depositary Receipt
Citizens Small Cap Core Growth Fund
Security Shares Value($)
- --------------------------------------------------------------------------------
COMMON STOCKS - 99.9%
Airlines - 2.3%
Jetblue Airways Corp. (a) 9,780 414
Banks - 4.1%
East West Bancorp, Inc. 10,270 371
Hudson United Bancorp 6,320 216
UCBH Holdings, Inc. 4,860 139
--------
726
Biotechnology - 3.1%
Exact Sciences Corp. (a) 16,350 179
Neurocrine Biosciences, Inc. (a) 5,794 289
SangStat Medical Corp. (a) 6,700 88
--------
556
Computers - 11.3%
Cognos, Inc. ADR (a) 8,300 224
Embarcadero Technologies, Inc. (a) 36,630 256
Hutchinson Technology, Inc. (a) 12,400 408
Hyperion Solutions Corp. (a) 5,800 196
Magma Design Automation, Inc. (a) 13,670 234
Mercury Interactive Corp. (a) 2,230 86
Network Associates, Inc. (a) 17,870 227
Synaptics, Inc. (a) 27,900 376
--------
2,007
Electrical Equipment - 4.0%
Fairchild Semiconductor Corp. (a) 18,290 234
Mindspeed Technologies, Inc. (a) 4,634 13
Symbol Technologies, Inc. 22,324 290
Wilson Greatbatch Technologies, Inc. (a) 5,100 184
--------
721
Electronics - 15.1%
Chippac, Inc. (a) 48,800 374
Conexant Systems, Inc. (a) 68,600 281
Daktronics, Inc. (a) 14,270 233
Integrated Circuit Systems, Inc. (a) 11,270 354
International Rectifier Corp. (a) 8,740 234
Intersil Corp., Class A (a) 12,500 333
Photon Dynamics, Inc. (a) 9,900 274
Sandisk Corp. (a) 6,930 280
Zoran Corp. (a) 15,820 304
--------
2,667
Energy & Utilities - 4.4%
Newfield Exploration Co. (a) 8,790 330
Precision Drilling Corp. (a) 6,690 253
Western Gas Resources, Inc. 5,050 200
--------
783
25
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Small Cap Core Growth Fund (cont.)
Security Shares Value($)
- --------------------------------------------------------------------------------
Financial - Diversified - 2.7%
BOK Financial Corp. (a) 2,538 98
Jefferies Group, Inc. 7,790 388
--------
486
Health Care - 13.2%
American Medical Systems
Holdings, Inc. (a) 22,500 379
Cytyc Corp. (a) 32,200 339
Merit Medical Systems, Inc. (a) 17,810 356
SICOR, Inc. (a) 6,300 128
The Medicines Co. (a) 6,500 128
Therasense, Inc. (a) 36,720 367
Thoratec Corp. (a) 20,180 301
Trimeris, Inc. (a) 7,730 353
--------
2,351
Insurance - 1.9%
W.R.Berkley Corp. 6,453 340
Investment Banking & Brokerage - 2.4%
Affiliated Managers Group, Inc. (a) 6,937 423
Manufacturing - 6.2%
A.O. Smith Corp. 9,520 268
Applied Films Corp. (a) 11,740 304
BorgWarner, Inc. 2,830 182
Pentair, Inc. 3,450 135
Ryland Group, Inc. 3,205 222
--------
1,111
Multimedia - 4.2%
Cox Radio, Inc., Class A (a) 15,460 357
Emmis Communications Corp., Class A (a) 17,200 395
--------
752
Restaurants - 5.0%
Brinker International, Inc. (a) 5,310 191
Jack in the Box, Inc. (a) 16,700 372
RARE Hospitality International, Inc. (a) 10,180 333
--------
896
Retail - 5.6%
Aeropostale, Inc. (a) 8,200 176
Claire's Stores, Inc. 6,450 164
Fastenal Co. 8,410 285
The Men's Wearhouse, Inc. (a) 17,100 374
--------
999
Services - 11.1%
Career Education Corp. (a) 6,180 424
Coinstar, Inc. (a) 5,430 102
Corporate Executive Board Co. (a) 9,030 366
Documentum, Inc. (a) 9,770 192
FTI Consulting, Inc. (a) 14,830 370
Getty Images, Inc. (a) 4,700 194
Kroll, Inc. (a) 838 23
Overture Services, Inc. (a) 17,400 315
--------
1,986
Telecommunications - 1.7%
Commonwealth Telephone
Enterprises, Inc. (a) 4,150 183
Tekelec (a) 10,890 123
--------
306
Waste Management - 1.6%
Waste Connections, Inc. (a) 8,130 285
--------
Total Common Stocks 17,809
Cost: $16,011
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 3.4%
Fifth Third Bank,
0.95%, 07/01/03
(Proceeds at maturity $599,
collateralized by Federal National
Mortgage Association security, 6.50%, 08/01/14)
Cost: $599 599 599
--------
TOTAL INVESTMENTS - 103.3% 18,408
Cost: $16,610 (b)
Percentages indicated are based on net assets of $17,821.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs for
federal income tax purposes by the amount of losses recognized for
financial reporting purposes in excess of federal income tax reporting
of approximately $171. Cost for federal income tax purposes differs
from value by net unrealized appreciation of securities as follows:
Unrealized appreciation $1,790
Unrealized depreciation (163)
------
Net unrealized appreciation $1,627
ADR - American Depositary Receipt
See Financial Notes
26
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Value Fund
Security Shares Value($)
- --------------------------------------------------------------------------------
COMMON STOCKS - 99.1%
Air Freight - 2.2%
FedEx Corp. 5,800 360
Auto Manufacturers - 0.5%
PACCAR, Inc. 1,235 83
Banks - 3.2%
BB&T Corp. 4,700 161
U.S.Bancorp 14,500 355
--------
516
Chemicals - 1.9%
Engelhard Corp. 3,800 94
Praxair, Inc. 3,670 221
--------
315
Computers - 13.2%
Automatic Data Processing 10,500 356
Hewlett-Packard Co. 25,790 549
Intel Corp. 23,080 480
Microsoft Corp. 25,000 640
Synopsys, Inc. (a) 1,600 99
--------
2,124
Construction - 2.5%
Lafarge North America, Inc. 3,300 102
Masco Corp. 12,400 296
--------
398
Consumer Finance - 0.5%
Capital One Financial Corp. 1,740 86
Consumer Products - 2.7%
Kimberly-Clark Corp. 8,520 444
Electronics - 1.9%
Intersil Corp., Class A (a) 3,100 82
SPX Corp. (a) 5,020 222
--------
304
Energy & Utilities - 6.1%
Anadarko Petroleum Corp. 3,600 160
Apache Corp. 1,500 98
Burlington Resources, Inc. 2,230 121
ConocoPhillips 7,900 433
KeySpan Corp. 2,200 78
Valero Energy Corp. 2,600 94
--------
984
Entertainment - 1.7%
Viacom, Inc. (a) 6,330 276
Financial - Diversified - 16.6%
Citigroup, Inc. 11,700 500
Fannie Mae 3,500 236
FleetBoston Financial Corp. 17,500 519
Freddie Mac 9,000 457
J.P.Morgan Chase & Co. 7,100 243
MBNA Corp. 15,900 331
The Bear Stearns Cos., Inc. 1,100 80
Washington Mutual, Inc. 7,600 314
--------
2,680
Foods - 4.1%
H.J. Heinz Co. 6,800 224
Pepsi Bottling Group, Inc. 5,700 114
Sara Lee Corp. 17,080 322
--------
660
Health Care - 7.7%
Baxter International, Inc. 15,140 393
Becton, Dickinson & Co. 5,710 222
CIGNA Corp. 1,600 75
Guidant Corp. 8,200 364
Laboratory Corporation of America Holdings (a) 4,300 130
Tenet Healthcare Corp. (a) 5,900 69
--------
1,253
Insurance - 5.2%
Anthem, Inc. (a) 2,100 162
Fidelity National Financial Corp. 3,850 118
Hartford Financial Services Group, Inc. 4,800 242
The Allstate Corp. 9,050 323
--------
845
Manufacturing - 2.8%
Deere & Co. 4,700 215
Eaton Corp. 1,010 79
ITT Industries, Inc. 1,300 85
Pactiv Corp. (a) 4,200 83
--------
462
Pharmaceuticals - 4.6%
Bristol-Myers Squibb Co. 17,900 486
McKesson Corp. 7,500 268
--------
754
Publishing - 2.9%
Gannett Co., Inc. 3,200 246
McGraw-Hill Cos., Inc. 3,500 217
--------
463
Restaurants - 3.1%
McDonald's Corp. 22,870 505
27
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Value Fund (cont.)
Security Shares Value($)
- --------------------------------------------------------------------------------
Retail - 7.0%
CVS Corp. 12,800 358
Kroger Co. (a) 19,880 332
Office Depot, Inc. (a) 5,800 84
Polo Ralph Lauren 3,100 80
Target Corp. 7,600 288
--------
1,142
Services - 2.8%
Cendant Corp. (a) 13,680 250
Omnicom Group, Inc. 2,800 201
--------
451
Telecommunications - 5.9%
Alltel Corp. 2,800 135
BellSouth Corp. 6,660 177
QUALCOMM,Inc 5,060 181
SBC Communications, Inc. 10,100 259
UTStarcom, Inc. (a) 6,000 213
--------
965
--------
Total Common Stocks 16,070
Cost: $15,038
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 0.7%
Fifth Third Bank,
0.95%, 07/01/03
(Proceeds at maturity $118,
collateralized by Federal Home Loan
Mortgage Corporation security, 6.50%, 01/01/19)
Cost: $118 118 118
--------
TOTAL INVESTMENTS - 99.8% 16,188
Cost: $15,156 (b)
Percentages indicated are based on net assets of $16,226.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs for federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $176. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $1,187
Unrealized depreciation (331)
------
Net unrealized appreciation $856
Citizens Balanced Fund
Security Shares Value($)
- --------------------------------------------------------------------------------
COMMON STOCKS - 67.7%
Air Freight - 1.8%
FedEx Corp. 304 19
Banks - 1.3%
Bank of America Corp. 181 14
Biotechnology - 5.5%
Amgen, Inc. (a) 438 29
Gilead Sciences, Inc. (a) 531 30
--------
59
Broadcasting - 3.4%
Clear Channel Communications, Inc. (a) 854 36
Computers - 9.7%
Dell Computer Corp. (a) 684 22
Intel Corp. 1,053 22
Microsoft Corp. (a) 700 18
Oracle Corp. (a) 1,711 21
Symantec Corp. (a) 471 20
--------
103
Electronics - 3.8%
Analog Devices, Inc. (a) 639 22
Flextronics International (a) 1,764 19
--------
41
Energy & Utilities - 3.1%
Apache Corp. 220 14
Baker Hughes, Inc. 213 7
ConocoPhillips 201 11
--------
32
Financial - Diversified - 5.3%
American Express Co. 675 28
Citigroup, Inc. 654 28
--------
56
Health Care - 8.1%
Pfizer, Inc. 811 28
St. Jude Medical, Inc. (a) 505 29
UnitedHealth Group, Inc. 574 29
--------
86
Insurance - 4.7%
Willis Group Holdings Ltd. 704 22
XL Capital Ltd. 344 28
--------
50
See Financial Notes
28
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Balanced Fund (cont.)
Security Shares Value($)
- --------------------------------------------------------------------------------
Investment Banking & Brokerage - 2.0%
The Goldman Sachs Group, Inc. 250 21
Leisure - 2.4%
Harley-Davidson, Inc. 631 25
Manufacturing - 3.1%
3M Co. 112 14
Illinois Tool Works, Inc. 274 18
--------
32
Personal Care - 2.3%
Colgate-Palmolive Co. 429 24
Retail - 8.2%
Costco Wholesale Corp. (a) 697 25
Kohl's Corp. (a) 718 37
Walgreen Co. 833 25
--------
87
Services - 1.7%
Cendant Corp. (a) 1,004 19
Telecommunications - 1.3%
Verizon Communications, Inc. 351 16
--------
Total Common Stocks 720
Cost: $697
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 17.5%
Federal Farm Credit Bank - 0.5%
5.10%, 11/24/03 5 5
Federal Home Loan Mortgage Corporation - 1.6%
2.88%, 09/15/05 3 3
3.25%, 02/25/08 4 4
4.50%, 01/15/13 9 10
--------
17
Federal National Mortgage Association - 15.4%
1.88%, 12/15/04 6 6
3.25%, 01/15/08 9 9
5.25%, 01/15/09 14 16
6.38%, 06/15/09 3 4
4.38%, 09/15/12 4 4
4.38%, 03/15/13 30 31
6.50%, 07/01/32 12 12
6.00%, 11/01/32 14 14
5.50%, 03/01/33 44 45
5.50%, 04/01/33 22 23
--------
164
--------
Total U.S. Government Agency Obligations 186
Cost: $184
U.S. TREASURY NOTES - 4.3%
3.38%, 01/15/07 5 5
2.63%, 05/15/08 20 20
3.63%, 05/15/13 20 20
--------
Cost: $44 45
REPURCHASE AGREEMENTS - 9.4%
Fifth Third Bank,
0.95%, 07/01/03
(Proceeds at maturity $99,
collateralized by Federal National
Mortgage Association Security, 6.75%, 07/01/09)
Cost: $99 99 99
--------
TOTAL INVESTMENTS - 98.9% 1,050
Cost: $1,024 (b)
Percentages indicated are based on net assets of $1,061.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and federal income tax
purposes and differs from value by net unrealized appreciation of securities as
follows:
Unrealized appreciation $32
Unrealized depreciation (6)
---
Net unrealized appreciation $26
29
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Global Equity Fund
Security Shares Value($)
- --------------------------------------------------------------------------------
COMMON STOCKS - 98.0%
Automobile Manufacturing - 1.9%
Honda Motor Co., Ltd. 36,900 1,398
Volkswagen AG 15,800 664
--------
2,062
Banks - 1.3%
Royal Bank of Scotland Group plc 51,390 1,442
Biotechnology - 3.6%
Amgen, Inc. (a) 24,000 1,595
Applied Biosystems Group 57,800 1,100
Invitrogen Corp. (a) 34,700 1,331
--------
4,026
Broadcasting - 3.5%
British Sky Broadcasting Group plc (a) 99,303 1,100
Cox Communications, Inc., Class A (a) 50,900 1,624
Univision Communications, Inc. (a) 38,000 1,155
--------
3,879
Chemicals - 1.4%
Shin-Etsu Chemical Co. 45,400 1,550
Computers - 8.5%
Automatic Data Processing, Inc. 27,900 945
Dell Computer Corp. (a) 42,400 1,355
EMC Corp. (a) 60,000 628
Intel Corp. 40,300 838
International Business
Machines Corp. 14,700 1,213
Microsoft Corp. 107,400 2,750
Oracle Corp. (a) 95,200 1,144
SAP AG 4,900 574
--------
9,447
Electrical Equipment - 4.4%
Analog Devices, Inc. (a) 29,900 1,041
Applied Materials, Inc. (a) 78,000 1,237
Celestica, Inc. (a) 18,800 296
Emerson Electric Co. 30,300 1,549
Flextronics International Ltd. (a) 76,800 798
--------
4,921
Electronics - 2.5%
Cisco Systems, Inc. (a) 80,400 1,342
Sony Corp. 51,100 1,438
--------
2,780
Energy & Utilities - 9.9%
Encana Corp. 65,943 2,509
EOG Resources, Inc. 46,600 1,950
Noble Corp. (a) 40,000 1,372
Precision Drilling Corp. (a) 38,530 1,441
Scottish Power plc 308,672 1,854
Weatherford International, Ltd. (a) 42,000 1,760
--------
10,886
Financial - Diversified - 9.9%
Amvescap plc 250,275 1,726
Citigroup, Inc. 69,500 2,974
HBOS plc 65,861 853
HSBC Holdings plc 147,066 1,738
UBS AG 36,576 2,035
Wells Fargo & Co. 30,300 1,527
--------
10,853
Financial Services - 1.5%
American Express Co. 40,700 1,702
Food & Beverages - 3.5%
Nestle SA 5,415 1,117
PepsiCo, Inc. 31,500 1,402
The Coca-Cola Co. 30,200 1,402
--------
3,921
Health & Beauty Aids - 1.5%
L'Oreal SA 23,191 1,635
Health Care - 11.0%
AstraZeneca plc 21,407 858
Cardinal Health, Inc. 14,000 900
Eli Lilly & Co. 10,000 690
GlaxoSmithKline plc 87,927 1,774
HCA, Inc. 23,100 740
Medtronic, Inc. 26,600 1,276
Merck & Co., Inc. 15,800 957
Novartis AG 29,336 1,161
Pfizer, Inc. 62,400 2,131
Sanofi-Synthelabo SA 27,697 1,622
--------
12,109
Insurance - 6.2%
American International Group, Inc. 21,200 1,170
AXA 87,416 1,356
ING Groep NV 93,338 1,622
Marsh & McLennan Cos., Inc. 41,600 2,124
Swiss Re 11,499 637
--------
6,909
Investment Banking & Brokerage - 1.6%
The Goldman Sachs Group, Inc. 21,000 1,759
See Financial Notes
30
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Global Equity Fund (cont.)
Security Shares Value($)
- --------------------------------------------------------------------------------
Manufacturing - 3.3%
3M Co. 7,500 968
Assa Abloy AB, Class B 87,400 846
CRH plc 47,927 751
Ingersoll-Rand Co., Class A 7,700 364
Komatsu, Ltd. 192,000 736
--------
3,665
Office Equipment & Supplies - 2.1%
Canon, Inc. 51,000 2,340
Personal Care - 2.2%
Gillette Co. 48,000 1,529
Kimberly-Clark Corp. 18,300 954
--------
2,483
Railroads - 1.1%
Norfolk Southern Corp. 63,100 1,212
Retail - 3.1%
Li & Fung, Ltd. 414,000 534
Target Corp. 40,300 1,525
Tesco plc 74,626 270
The TJX Cos., Inc. 58,300 1,098
--------
3,427
Services - 3.2%
Ecolab, Inc. 46,400 1,188
Omnicom Group, Inc. 21,000 1,506
Sysco Corp. 28,200 847
--------
3,541
Telecommunications - 10.8%
Alltel Corp. 21,300 1,027
Nokia Oyj 163,250 2,688
NTT DoCoMo, Inc. 853 1,847
SBC Communications, Inc. 46,700 1,193
Telefonica SA (a) 129,590 1,505
Vodafone Group plc 1,803,361 3,526
--------
11,786
--------
Total Common Stocks 108,335
Cost: $114,751
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 1.2%
Fifth Third Bank,
0.95%, 07/01/03
(Proceeds at maturity $1,381,
collateralized by Federal Home Loan
Mortgage Corporation security, 7.00%, 05/01/31)
Cost: $1,381 1,381 1,381
--------
TOTAL INVESTMENTS - 99.2% 109,716
Cost: $116,132 (b)
Percentages indicated are based on net assets of $110,593.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs for federal
income tax purposes by the amount of losses recognized for financial reporting
purposes in excess of federal income tax reporting of approximately $642. Cost
for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
Unrealized appreciation $5,288
Unrealized depreciation (12,346)
-------
Net unrealized depreciation $(7,058)
The fund's portfolio holdings as of June 30, 2003, were distributed among the
following countries:
Percentage of Net Assets
-------------------------------
Short Term
Equity & Other Total
-------------------------------
Bermuda 0.3% 0.3%
Canada 3.6% 3.6%
Finland 2.4% 2.4%
France 4.2% 4.2%
Germany 1.1% 1.1%
Hong Kong 0.5% 0.5%
Ireland 0.7% 0.7%
Japan 8.4% 8.4%
Netherlands 1.5% 1.5%
Singapore 0.7% 0.7%
Spain 1.4% 1.4%
Sweden 0.8% 0.8%
Switzerland 4.5% 4.5%
United Kingdom 13.7% 13.7%
United States 54.2% 1.2% 55.4%
------------------------------
98.0% 1.2% 99.2%
31
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens International Growth Fund
Security Shares Value($)
- --------------------------------------------------------------------------------
COMMON STOCKS - 98.9%
Apparel Manufacturers - 1.8%
Gucci Group NV 529 52
Automobile Manufacturing - 4.8%
Honda Motor Co. Ltd. 1,300 49
Toyota Motor Corp. 2,400 62
Volkswagen AG 600 25
--------
136
Banks - 3.6%
Barclays plc 8,511 63
Royal Bank of Scotland Group plc 1,422 40
--------
103
Biotechnology - 1.7%
Roche Holding AG 605 47
Broadcasting - 2.2%
British Sky Broadcasting Group plc (a) 5,514 61
Computers - 2.1%
SAP AG 500 59
Electrical Equipment - 5.8%
ASML Holding NV (a) 4,914 47
Celestica, Inc. (a) 3,614 57
Flextronics International Ltd.(a) 5,970 62
--------
166
Electronics - 1.8%
Sony Corp. 1,800 51
Energy & Utilities - 12.2%
BP Amoco plc 11,115 77
Encana Corp. 2,594 99
Precision Drilling Corp. (a) 1,815 68
Scottish Power plc 17,272 104
--------
348
Financial - Diversified - 12.9%
Amvescap plc 11,038 76
HBOS plc 5,026 65
HSBC Holdings plc 8,133 96
Lloyds TSB Group plc 4,759 34
UBS AG 1,780 99
--------
370
Food & Beverages - 2.6%
Nestle SA 354 73
Health & Beauty Aids - 2.5%
L'Oreal SA 1,008 71
Health Care - 10.4%
AstraZeneca plc 1,095 44
GlaxoSmithKline ADR 2,546 103
Novartis AG 2,492 99
Sanofi-Synthelabo SA 849 50
--------
296
Insurance - 6.5%
AXA ADR 4,123 64
ING Groep NV 4,960 86
Swiss Re 603 33
--------
183
Manufacturing - 3.5%
Assa Abloy AB, Class B 2,000 19
CRH plc 2,955 47
Komatsu Ltd. 9,000 34
--------
100
Office Equipment & Supplies - 2.7%
Canon, Inc. ADR 1,656 76
Retail - 5.0%
Carrefour SA 1,286 63
Li & Fung Ltd. 28,000 36
Tesco plc 11,951 43
--------
142
Telecommunications - 16.8%
Nippon Telegraph & Telephone Corp. 6 24
Nokia Oyj 7,400 122
NTT DoCoMo, Inc. 42 91
Telefonica SA ADR (a) 1,081 37
Telefonica SA (a) 7,001 81
Vodafone Airtouch plc ADR 6,305 124
--------
479
--------
Total Common Stocks 2,813
Cost: $2,767
See Financial Notes
32
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens International Growth Fund (cont.)
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 0.9%
Fifth Third Bank,
0.95%, 07/01/03
(Proceeds at maturity $24,
collateralized by Federal
Home Loan Bank security, 7.03%, 10/01/26)
Cost: $24 24 24
--------
TOTAL INVESTMENTS - 99.8% 2,837
Cost: $2,791 (b)
Percentages indicated are based on net assets of $2,842.
(a) Non-income producing security.
(b) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for financial
reporting purposes in excess of federal income tax reporting of approximately
$158. Cost for federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
Unrealized appreciation $42
Unrealized depreciation (153)
-----
Net unrealized depreciation $(111)
ADR - American Depositary Receipt
The fund's portfolio holdings as of June 30, 2003, were distributed among the
following countries:
Percentage of Net Assets
-------------------------------
Short Term
Equity & Other Total
-------------------------------
Canada 5.9% 5.9%
Finland 4.3% 4.3%
France 8.7% 8.7%
Germany 2.9% 2.9%
Hong Kong 1.3% 1.3%
Ireland 1.6% 1.6%
Japan 13.6% 13.6%
Netherlands 6.5% 6.5%
Singapore 2.2% 2.2%
Spain 4.2% 4.2%
Sweden 0.7% 0.7%
Switzerland 12.4% 12.4%
United Kingdom 32.6% 32.6%
United States 2.0% 0.9% 2.9%
-------------------------------
Total 98.9% 0.9% 99.8%
Citizens Income Fund
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
CORPORATE BONDS - 65.4%
Banks - 8.8%
Banknorth Group, Inc.,
3.75%, 05/01/08 500 510
First Tennessee Bank,
4.50%, 05/15/13 1,000 1,012
Fleet Boston Financial Corp.,
3.85%, 02/15/08 1,000 1,038
Greater Bay Bankcorp.,
5.25%, 03/31/08 (a) 1,000 1,016
Sovereign Bancorp, Inc.,
10.50%, 11/15/06 1,000 1,201
Webster Bank,
5.90%, 01/15/13 250 263
Wilmington Trust Corp.,
4.90%, 04/15/13 (a) 1,000 1,024
--------
6,064
Broadcasting - 12.2%
Clear Channel
Communications, Inc.,
4.40%, 05/15/11 2,000 2,007
Comcast Corp.,
5.85%, 01/15/10 1,000 1,100
5.30%, 01/15/14 1,000 1,028
Cox Communications, Inc.,
7.10%, 10/01/12 1,000 1,194
4.60%, 06/01/13 1,000 1,002
Liberty Media Corp.,
5.70%, 05/15/13 1,000 1,017
Univison Communications, Inc.,
7.85%, 07/15/11 1,000 1,190
--------
8,538
Construction - 1.8%
Pulte Homes Inc.,
8.10%, 03/01/11 1,000 1,227
Electrical Equipment - 3.0%
Fairchild Semiconductor,
10.50%, 02/01/09 500 563
Flextronics International, Ltd.,
6.50%, 05/15/13 (a) 1,000 962
9.90%,07/01/10 500 548
--------
2,073
Energy & Utilities - 3.0%
Valero Energy Corp.,
4.75%, 06/15/13 1,000 978
XTO Energy, Inc.,
6.25%, 04/15/13 (a) 1,000 1,062
--------
2,040
33
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Income Fund (cont.)
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
Financial - Diversified - 12.1%
American General Finance Corp.,
5.40%, 10/01/12 1,000 1,079
Bear Stearns Co., Inc.,
4.65%, 07/02/18 1,000 973
Citigroup, Inc.,
3.50%, 02/01/08 1,000 1,029
4.90%, 05/07/15 1,000 1,028
Countrywide Financial,
4.25%, 12/19/07 1,000 1,050
Greenpoint Financial Corp.,
3.20%, 06/06/08 (a) 1,000 992
J.P.Morgan Chase & Co.,
5.25%, 05/01/15 1,000 1,047
MBNA America Bank Corp.,
7.10%, 11/15/12 1,000 1,173
--------
8,371
Financial Services - 1.4%
Prudential Financial, Inc.,
4.50%, 07/15/13 1,000 998
Health Care - 1.6%
AmerisourceBergen Corp.,
8.10%, 09/01/08 1,000 1,100
Insurance - 4.8%
Ace, Ltd.,
6.00%, 04/01/07 1,000 1,101
Anthem, Inc.,
6.80%, 08/01/12 1,000 1,167
Chubb Corp.,
3.95%, 04/01/08 (a) 500 518
Marsh & McLennan Cos, Inc.,
3.60%, 02/15/08 500 515
--------
3,301
Investment Banking & Brokerage - 3.1%
The Goldman Sachs Group, Inc.,
4.10%, 01/15/08 500 525
5.25%, 04/01/13 500 533
5.50%, 11/15/14 1,000 1,086
--------
2,144
Manufacturing - 1.6%
American Standard, Inc.,
7.40%, 02/01/08 1,000 1,105
Retail - 6.5%
Dominos, Inc.,
8.25%, 07/01/11 (a) 1,000 1,033
Kroger Co.,
5.50%, 02/01/13 1,000 1,056
The GAP, Inc.,
10.55%, 12/15/08 1,000 1,214
Tricon Global Restaurants,
8.90%, 04/15/11 1,000 1,185
--------
4,488
Services - 2.3%
Cendant Corp.,
6.25%, 01/15/08 1,000 1,107
Fiserv, Inc.,
4.00%, 04/15/08 (a) 500 515
--------
1,622
Telecommunications - 3.2%
Verizon Global Funding Corp.,
7.40%, 09/01/12 1,000 1,220
4.40%, 06/01/13 1,000 997
--------
2,217
--------
Total Corporate Bonds 45,288
Cost: $42,783
FOREIGN GOVERNMENT BONDS - 1.5%
United Mexican States
4.60%, 10/08/08 1,000 1,021
Cost: $997
U.S. GOVERNMENT AGENCY OBLIGATIONS - 24.6%
Federal Home Loan Mortgage
Corporation - 5.8%
4.50%, 07/23/07 2,000 2,065
4.00%, 06/12/13 2,000 1,964
--------
4,029
Federal National Mortgage Association - 13.0%
6.50%, 08/01/31 1,952 2,035
6.00%, 08/01/32 1,744 1,813
5.50%, 04/01/33 4,915 5,089
--------
8,937
Government National Mortgage Association - 5.8%
6.00%, 04/15/31 152 159
6.50%, 12/15/31 1,280 1,344
6.50%, 06/15/32 2,417 2,538
--------
4,041
--------
Total U.S. Government Agency Obligations 17,007
Cost: $16,782
See Financial Notes
34
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Income Fund (cont.)
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES - 3.7%
3.40%, 01/15/07 2,320 2,548
Cost: $2,499
REPURCHASE AGREEMENTS - 2.3%
Fifth Third Bank,
0.95%, 07/01/03
(Proceeds at maturity $1,574,
collateralized by Federal National
Mortgage Association security, 6.50%, 03/01/19)
Cost: $1,574 1,574 1,574
--------
TOTAL INVESTMENTS - 97.5% 67,438
Cost: $64,635 (b)
Percentages indicated are based on net assets of $69,137.
(a) Rule 144A security.
(b) Represents cost for financial reporting purposes and federal income tax
purposes and differs from value by net unrealized appreciation of securities as
follows:
Unrealized appreciation $2,955
Unrealized depreciation (152)
------
Net unrealized appreciation $2,803
Citizens Ultra Short Bond Fund
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS - 0.8%
Bear Stearns Asset Backed Securities, Inc.
5.49%, 06/25/32 76 76
Cost: $78
CORPORATE BONDS - 47.7%
Automotive Finance - 15.1%
BMW Vehicle Owner Trust
1.94%, 02/25/07 250 252
Ford Credit Auto Owner Trust
5.25%, 09/15/05 100 103
Goldman Sachs Auto Loan Trust
2.08%, 04/16/07 250 252
Harley-Davidson Motorcycle Trust
1.34%, 01/15/08 193 193
Honda Auto Receivables
Owner Trust
2.16%, 10/21/08 200 200
Toyota Trust
1.69%, 03/15/07 250 251
Volkswagen Alt,
2.36%, 12/20/05 150 152
--------
1,403
Banks - 5.5%
Bank of America Corp.
7.88%, 05/16/05 100 112
JP Morgan Chase & Co.,
1.47%, 02/05/04 150 150
Wells Fargo Co.,
1.06%, 03/24/05 250 250
--------
512
Broadcasting - 4.7%
Clear Channel
Communications, Inc.,
7.25%, 09/15/03 200 202
TCI Communications
8.00%, 08/01/05 210 229
--------
431
Computers - 2.4%
Hewlett-Packard Co.
7.15%, 06/15/05 200 221
Financial - Diversified - 10.8%
American Express Co.
7.20%, 09/17/07 100 109
American General Finance
7.45%, 01/15/05 50 54
35
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Ultra Short Bond Fund (cont.)
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
Financial - Diversified (cont.)
Citibank Credit Card Master Trust
6.65%, 11/15/06 150 161
Citicorp
7.63%, 05/01/05 50 56
Countrywide Capital
5.25%,06/15/04 250 259
Goldman Sachs
7.25%, 10/01/05 (a) 100 112
Merrill Lynch & Co.
1.50%, 04/28/05 250 250
-------
1,001
Personal Care - 2.8%
Gillette Co.
3.50%, 10/15/07 250 256
Pharmaceuticals - 1.1%
Pfizer, Inc.
3.63%, 11/01/04 100 103
Retail - 2.3%
Kroger Co.
7.38%, 03/01/05 200 216
Telecommunications - 3.0%
CBS Corp.
7.15%, 05/20/05 150 165
Chesapeake (Bell Atlantic Virginia)
6.13%, 07/15/05 100 107
-------
272
-------
Total Corporate Bonds 4,415
Cost: $4,387
YANKEE BONDS - 2.7%
Province of Ontario
2.35%, 06/30/06 250 253
Cost: $250
U.S. GOVERNMENT AGENCY OBLIGATIONS - 26.8%
Federal Home Loan Bank - 9.2%
2.70%, 10/07/05 200 200
2.00%, 10/16/06 200 200
2.75%, 10/30/06 200 202
2.04%, 12/29/06 250 250
-------
852
Federal Home Loan Mortgage Corporation - 6.1%
4.20%, 11/7/05 100 101
5.83%, 02/09/06 100 110
3.67%, 02/12/08 250 254
5.50%, 03/15/30 97 98
-------
563
Federal National Mortgage Association - 9.3%
2.88%, 12/02/05 100 101
2.38%, 03/17/06 250 252
3.50%, 10/15/07 250 255
5.50%, 11/25/13 123 124
4.03%, 08/25/29 126 128
-------
860
Student Loan Marketing Association - 2.2%
1.27%, 06/16/08 200 200
-------
Total U.S. Government Agency Obligations 2,475
Cost: $2,466
REPURCHASE AGREEMENTS - 23.7%
Fifth Third Bank,
0.95%, 07/01/03
(Proceeds at maturity $2,192,
collateralized by Federal Home Loan
Mortgage Corporation security, 8.00%, 12/01/30)
Cost: $2,192 2,192 2,192
-------
TOTAL INVESTMENTS - 101.7% 9,411
Cost: $9,373 (b)
Percentages indicated are based on net assets of $9,252.
(a) Rule 144A security.
(b) Represents cost for financial reporting purposes and for federal income tax
purposes and differs from value by net unrealized appreciation of securities as
follows:
Unrealized appreciation $46
Unrealized depreciation (8)
---
Net unrealized appreciation $38
36
PORTFOLIO HOLDINGS JUNE 30, 2003 ($ X 1,000)
Citizens Money Market Fund
Security, Rate, Maturity Date Principal($) Value($)
- --------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 8.9%
Bank of New York,
2.14%, 08/12/03 3,000 3,000
City National Bank of New Jersey,
1.50%, 03/17/04 (a) 100 100
Independence Federal Savings Bank,
2.05%, 09/26/03 (a) 100 100
Mercantile Safe Deposit and Trust,
1.60%, 12/09/03 3,000 3,000
1.20%, 06/02/04 2,000 2,000
Self Help Credit Union,
1.30%, 03/14/04 (a) 100 100
US Bank,
1.42%, 01/08/04 2,000 2,000
--------
Total Certificates of Deposit 10,300
Cost: $10,300
COMMERCIAL PAPER - 71.2%
American Express Corp.
0.87%, 08/25/03 3,500 3,495
American General Finance Corp.
1.30%, 07/31/03 5,250 5,244
Atlantis One Funding Corp.
1.20%, 07/18/03 (b) 2,530 2,529
1.19%, 09/25/03 (b) 2,800 2,792
Blue Ridge Asset
1.23%, 07/08/03 (b) 4,006 4,005
Citicorp
1.20%, 07/02/03 5,315 5,315
Cooperative Association of
Tractor Dealers
1.27%, 07/16/03 1,541 1,540
1.25%, 09/12/03 4,000 3,990
1.00%, 10/10/03 1,100 1,097
0.97%, 12/08/03 3,500 3,485
Dow Jones & Co, Inc.,
1.08%, 01/06/04 (b) 1,988 1,977
Galaxy Funding, Inc.,
1.25%, 07/28/03 (b) 5,000 4,996
The Goldman Sachs Group, Inc.
1.16%, 08/18/03 3,059 3,054
0.92%, 01/26/04 2,200 2,188
Harley-Davidson, Inc.,
1.17%, 07/09/03 (b) 2,827 2,826
Home Depot Funding Corp.,
1.08%, 12/02/03 (b) 5,200 5,176
J.P.Morgan Chase & Co.
1.23%, 07/24/03 5,263 5,259
Marsh and McLennan Cos., Inc.,
1.20%, 07/14/03 (b) 2,741 2,740
McGraw-Hill Co.,
0.91%, 08/22/03 3,285 3,281
Pfizer, Inc.,
1.00%, 07/30/03 (b) 3,000 2,998
Stellar Funding Group, Inc.,
1.55%, 07/25/03 (b) 2,024 2,022
1.27%, 09/18/03 (b) 2,188 2,182
Toronto Dominion Holdings USA,
0.92%, 09/11/03 3,272 3,266
UBS Finance Corp.,
1.31%, 07/01/03 3,025 3,024
Verizon Network Funding,
1.18%, 08/27/03 3,731 3,723
--------
Total Commercial Paper
Cost: $82,204 $82,204
CORPORATE BONDS - 11.9%
The Bear Stearns Cos.,
1.02%, 03/25/04 (c) 5,000 5,000
Merrill Lynch and Co., Inc.,
1.59%, 03/08/04 (c) 5,000 5,013
Pelican Capital LLC,
1.28%, 04/01/28 (c) 560 560
Redding Life Care LLC,
1.10%, 10/01/05 (c) 3,200 3,200
--------
Total Corporate Bonds 13,773
Cost: $13,773
MUNICIPAL NOTES - 3.0%
New York State Housing
Finance Agency
1.05%, 11/15/29 (c) 3,500 3,500
Cost: $3,500
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.5%
Student Loan Marketing Association
0.88%, 10/16/03 (c) 4,000 4,000
Cost: $4,000
--------
TOTAL INVESTMENTS - 98.5% 113,777
Cost: $113,777 (d)
Percentages indicated are based on net assets of $115,533.
(a) Restricted security which may not be publicly sold without registration
under the Securities Act of 1933.
(b) Rule 144A security.
(c) Variable rate security. The rate presented represents the rate in effect at
June 30, 2003.
(d) Represents cost for financial reporting and federal income tax purposes.
37
STATEMENTS OF ASSETS AND LIABILITIES AS OF JUNE 30, 2003
Core Growth Emerging Growth Small Cap Core Value Balanced
Fund Fund Growth Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------------
Assets
Investments, at value $ 343,023,127 $ 171,904,920 $ 17,808,644 $ 16,069,547 $ 950,430
Repurchase agreements 5,735,282 5,307,430 599,407 118,430 99,266
Total investments 348,758,409 177,212,350 18,408,051 16,187,977 1,049,696
Cash -- -- -- -- --
Foreign currency -- -- -- -- --
Receivables:
Interest and dividends 54,411 21,639 1,156 19,464 2,047
Investments sold 7,287,479 4,590,928 881,569 1,056,550 --
Tax reclaims -- -- -- -- --
Due from investment adviser -- -- -- -- 2,503
Deferred offering costs -- -- -- -- 4,974
Prepaid expenses 21,976 16,494 5,730 8,868 11,283
Total assets 356,122,275 181,841,411 19,296,506 17,272,859 1,070,503
Liabilities
Payables:
Dividends to shareholders -- -- -- -- 1,177
Investments purchased 4,350,625 9,703,045 1,446,494 1,013,763 --
Investment management fees 66,184 71,165 4,909 6,431 --
Administrative fees 14,600 7,116 732 674 44
Shareholder service fees 13,742 6,233 686 740 50
Distribution fees 29,913 17,230 1,831 1,685 110
Other accrued expenses 311,104 185,796 20,632 23,247 8,056
Total liabilities 4,786,168 9,990,585 1,475,284 1,046,540 9,437
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets $ 351,336,107 $ 171,850,826 $ 17,821,222 $ 16,226,319 $ 1,061,066
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets
Standard Shares:
Net assets $ 285,339,325 $ 157,910,911 $ 17,821,222 $ 16,226,319 $ 1,061,066
Number of shares outstanding 17,354,197 14,402,471 2,055,060 1,878,160 101,357
Net asset value, offering and redemption
price per share $ 16.44 $ 10.96 $ 8.67 $ 8.64 $ 10.47
Institutional Shares:
Net assets $ 63,570,617 $ 5,378,621 -- -- --
Number of shares outstanding 4,703,497 478,966 -- -- --
Net asset value, offering and redemption
price per share $ 13.52 $ 11.23 -- -- --
Administrative Shares:
Net assets $ 2,426,165 $ 8,561,294 -- -- --
Number of shares outstanding 145,428 770,598 -- -- --
Net asset value, offering and redemption
price per share $ 16.68 $ 11.11 -- -- --
Net assets consist of:
Paid-in capital $ 435,326,849 $ 380,541,309 $ 20,465,809 $ 26,864,662 $ 1,011,306
Accumulated net investment income/loss -- -- -- -- 156
Accumulated net realized gains/losses
on investments and foreign currencies (130,199,625) (225,752,081) (4,442,537) (11,670,348) 23,843
Net unrealized appreciation/depreciation
on investments and foreign currencies 46,208,883 17,061,598 1,797,950 1,032,005 25,761
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets $ 351,336,107 $ 171,850,826 $ 17,821,222 $ 16,226,319 $ 1,061,066
- ---------------------------------------------------------------------------------------------------------------------------------
Investments, at cost $ 302,549,526 $ 160,150,752 $ 16,610,101 $ 15,155,972 $ 1,023,935
Foreign currency, at cost -- -- -- -- --
Global Equity International Income Ultra Short Money Market
Fund Growth Fund Fund Bond Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------------
Assets
Investments, at value $ 108,335,119 $ 2,813,046 $ 65,864,102 $ 7,219,416 $ 113,776,636
Repurchase agreements 1,380,576 24,415 1,574,159 2,191,947 --
Total investments 109,715,695 2,837,461 67,438,261 9,411,363 113,776,636
Cash -- -- -- -- 1,783,988
Foreign currency 18,558 1,869 -- -- --
Receivables:
Interest and dividends 89,953 2,256 737,997 48,555 127,217
Investments sold 1,182,636 -- 2,239,423 -- --
Tax reclaims 113,604 2,475 -- -- --
Due from investment adviser -- -- -- 877 --
Deferred offering costs -- -- -- 4,119 --
Prepaid expenses 16,872 5,875 8,328 12,700 18,065
Total assets 111,137,318 2,849,936 70,424,009 9,477,614 115,705,906
Liabilities
Payables:
Dividends to shareholders -- -- 206,365 16,816 41,054
Investments purchased 363,627 -- 998,310 200,000 --
Investment management fees 46,678 929 18,628 -- 16,655
Administrative fees 4,668 115 2,866 371 4,759
Shareholder service fees 2,981 112 1,412 125 3,026
Distribution fees 10,946 299 7,165 927 --
Other accrued expenses 115,859 6,645 51,782 7,452 107,219
Total liabilities 544,759 8,100 1,286,528 225,691 172,713
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets $ 110,592,559 $ 2,841,836 $ 69,137,481 $ 9,251,923 $ 115,533,193
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets
Standard Shares:
Net assets $ 101,846,160 $ 2,841,836 $ 69,137,481 $ 9,251,923 $ 104,641,351
Number of shares outstanding 7,608,736 464,342 6,723,820 919,611 104,714,694
Net asset value, offering and redemption
price per share $ 13.39 $ 6.12 $ 10.28 $ 10.06 $ 1.00
Institutional Shares:
Net assets $ 6,687,767 -- -- -- $ 10,891,842
Number of shares outstanding 489,889 -- -- -- 10,893,633
Net asset value, offering and redemption
price per share $ 13.65 -- -- -- $ 1.00
Administrative Shares:
Net assets $ 2,058,632 -- -- -- --
Number of shares outstanding 152,420 -- -- -- --
Net asset value, offering and redemption
price per share $ 13.51 -- -- -- --
Net assets consist of:
Paid-in capital $ 249,571,591 $ 3,841,073 $ 72,117,057 $ 9,222,446 $ 115,542,276
Accumulated net investment income/loss (570,287) (57,479) -- (976) --
Accumulated net realized gains/losses
on investments and foreign currencies (132,010,761) (988,663) (5,782,978) (8,032) (9,083)
Net unrealized appreciation/depreciation
on investments and foreign currencies (6,397,984) 46,905 2,803,402 38,485 --
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets $ 110,592,559 $ 2,841,836 $ 69,137,481 $ 9,251,923 $ 115,533,193
- ---------------------------------------------------------------------------------------------------------------------------------
Investments, at cost $ 116,132,179 $ 2,790,722 $ 64,634,859 $ 9,372,878 $ 113,776,636
Foreign currency, at cost 18,656 1,872 -- -- --
See Financial Notes
38 & 39
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2003
Core Growth Emerging Growth Small Cap Core Value Balanced
Fund Fund Growth Fund Fund Fund(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Income
Interest $ 126,138 $ 92,374 $ 11,345 $ 7,149 $ 2,994
Dividend(3) 3,655,792 561,378 40,119 198,217 2,068
Total investment income 3,781,930 653,752 51,464 205,366 5,062
Expenses
Investment management fees 1,735,879 1,673,022 78,127 129,824 1,909
Administrative fees 347,173 166,775 15,625 16,034 294
Distribution fees:
Standard shares 695,810 385,583 39,064 40,084 735
Administrative shares 4,944 17,919 -- -- --
Shareholder service fees:
Standard shares 704,901 140,915 15,504 16,639 280
Institutional shares 1,145 163 -- -- --
Administrative shares 179 244 -- -- --
Transfer agent expenses:
Standard shares 777,676 573,988 59,522 66,568 7,269
Institutional shares 3,773 553 -- -- --
Administrative shares 1,050 1,637 -- -- --
Accounting expenses 133,123 65,418 9,386 8,325 8,098
Custody expenses 14,505 13,339 8,509 4,697 15,154
Offering costs -- -- -- -- 5,520
Registration expenses 14,967 15,284 5,686 7,920 8,702
Trustee expenses 70,691 34,220 3,226 1,983 71
Other expenses 273,115 133,474 11,490 12,759 1,609
Total expenses before
reimbursements or waivers 4,778,931 3,222,534 246,139 304,833 49,641
Reimbursements or waivers from adviser (476,211) (42,503) (19,593) -- (45,784)
Net expenses 4,302,720 3,180,031 226,546 304,833 3,857
Net investment income/loss $ (520,790) $ (2,526,279) $ (175,082) $ (99,467) $ 1,205
Realized and unrealized
gains/losses on investments
and foreign currency transactions
Realized gains/losses on investments
and foreign currency transactions $ (39,810,514) $ (45,670,710) $ (3,605,564) $ (10,282,004) $ 24,140
Change in unrealized
appreciation/depreciation
on investments and foreign currencies 29,592,435 31,865,153 2,748,439 9,608,668 25,761
Net realized and unrealized gains/losses
on investments and foreign currencies (10,218,079) (13,805,557) (857,125) (673,336) 49,901
Change in net assets from operations $ (10,738,869) $ (16,331,836) $ (1,032,207) $ (772,803) $ 51,106
Global Equity International Income Ultra Short Money Market
Fund Growth Fund Fund Bond Fund(2) Fund
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Income
Interest $ 19,522 $ 1,253 $ 3,536,378 $ 82,660 $ 1,956,303
Dividend(3) 1,927,570 52,645 -- -- --
Total investment income 1,947,092 53,898 3,536,378 82,660 1,956,303
Expenses
Investment management fees 1,180,182 27,935 443,943 12,468 431,640
Administrative fees 118,017 2,661 68,298 3,562 123,325
Distribution fees:
Standard shares 271,487 6,651 170,747 8,906 --
Administrative shares 5,018 -- -- -- --
Shareholder service fees:
Standard shares 66,576 2,407 30,545 1,001 67,616
Institutional shares 187 -- -- -- 620
Administrative shares 169 -- -- -- --
Transfer agent expenses:
Standard shares 370,279 10,622 118,864 14,394 283,937
Institutional shares 651 -- -- -- 2,042
Administrative shares 1,581 -- -- -- --
Accounting expenses 51,709 6,693 32,992 10,226 46,813
Custody expenses 9,373 6,655 4,816 2,737 6,843
Offering costs -- -- -- 6,249 --
Registration expenses 19,776 -- 6,627 10,864 29,166
Trustee expenses 24,056 556 13,748 789 25,215
Other expenses 73,726 883 47,977 4,435 94,455
Total expenses before
reimbursements or waivers 2,192,787 65,063 938,557 75,631 1,111,672
Reimbursements or waivers from adviser -- (15,859) -- (75,631) --
Net expenses 2,192,787 49,204 938,557 -- 1,111,672
Net investment income/loss $ (245,695) $ 4,694 $ 2,597,821 $ 82,660 $ 844,631
Realized and unrealized
gains/losses on investments
and foreign currency transactions
Realized gains/losses on investments
and foreign currency transactions $ (20,092,299) $ (543,939) $ 3,091,917 $ (2,413) --
Change in unrealized
appreciation/depreciation
on investments and foreign currencies 10,231,205 263,354 1,619,468 38,485 --
Net realized and unrealized gains/losses
on investments and foreign currencies (9,861,094) (280,585) 4,711,385 36,072 --
Change in net assets from operations $ (10,106,789) $ (275,891) $ 7,309,206 $ 118,732 $ 844,631
(1) For the period December 20, 2002 (commencement of operations) to June 30,
2003.
(2) For the period November 21, 2002 (commencement of operations) to June 30,
2003.
(3) Dividend income net of withholding taxes. For the year ended June 30, 2003,
withholding taxes for the Citizens Global Equity and International Growth Funds
were $157,794 and $5,826, respectively.
See Financial Notes
40 & 41
STATEMENTS OF CHANGES IN NET ASSETS
Small Cap
Core Growth Fund Emerging Growth Fund Core Growth Fund
- ----------------------------------------------------------------------------------------------------------------------------------
For the For the For the For the For the
year ended year ended year ended year ended year ended
06/30/03 06/30/02 06/30/03 06/30/02 06/30/03
- ----------------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income/loss $ (520,790) $ (1,512,276) $ (2,526,279) $ (3,375,032) $ (175,082)
Realized gains/losses on investments
and foreign currency transactions (39,810,514) (39,059,766) (45,670,710) (65,722,098) (3,605,564)
Change in unrealized appreciation/
depreciation on investments 29,592,435 (99,310,432) 31,865,153 (5,409,210) 2,748,439
Change in net assets from operations (10,738,869) (139,882,474) (16,331,836) (74,506,340) (1,032,207)
Dividends to Shareholders:
>From net investment income:
Standard shares -- -- -- -- --
>From net realized gains on investments:
Standard shares -- -- -- -- --
Total dividends -- -- -- -- --
Change in net assets from capital transactions (51,887,083) (44,810,423) (17,500,693) (32,743,870) 394,033
Change in net assets $ (62,625,952) $(184,692,897) $ (33,832,529) $(107,250,210) $ (638,174)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period $ 413,962,059 $ 598,654,956 $ 205,683,355 $ 312,933,565 $ 18,459,396
End of period $ 351,336,107 $ 413,962,059 $ 171,850,826 $ 205,683,355 $ 17,821,222
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income/loss -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Capital Transactions
Standard Shares
Proceeds from shares issued $ 20,813,812 $ 42,567,841 $ 37,852,532 $ 56,221,231 $ 5,237,434
Dividends reinvested -- -- -- -- --
Cost of shares redeemed (53,825,105) (77,794,151) (55,356,284) (80,428,934) (4,843,401)
Net change (33,011,293) (35,226,310) (17,503,752) (24,207,703) 394,033
Institutional Shares
Proceeds from shares issued $ 27,922,878 $ 31,393,835 $ 2,821,812 $ 3,944,080 --
Cost of shares redeemed (47,184,580) (41,615,831) (3,432,566) (13,893,132) --
Net change (19,261,702) (10,221,996) (610,754) (9,949,052) --
Administrative Shares
Proceeds from shares issued $ 1,251,277 $ 943,987 $ 6,162,025 $ 9,721,056 --
Cost of shares redeemed (865,365) (306,104) (5,548,212) (8,308,171) --
Net change 385,912 637,883 613,813 1,412,885 --
Change in net assets
from capital transactions $ (51,887,083) $ (44,810,423) $ (17,500,693) $ (32,743,870) $ 394,033
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Share Transactions
Standard Shares
Issued 1,364,126 2,152,690 3,719,462 4,217,604 672,716
Reinvested -- -- -- -- --
Redeemed (3,545,634) (3,989,536) (5,464,486) (6,041,917) (628,978)
Net change (2,181,508) (1,836,846) (1,745,024) (1,824,313) 43,738
Institutional Shares
Issued 2,233,874 1,964,990 273,794 293,475 --
Redeemed (3,763,348) (2,637,569) (329,608) (991,621) --
Net change (1,529,474) (672,579) (55,814) (698,146) --
Administrative Shares
Issued 80,682 47,642 597,115 721,866 --
Redeemed (55,257) (15,822) (534,955) (611,698) --
Net change 25,425 31,820 62,160 110,168 --
Change in shares from
share transactions (3,685,557) (2,477,605) (1,738,678) (2,412,291) 43,738
- ----------------------------------------------------------------------------------------------------------------------------------
Small Cap
Core Growth Fund Value Fund Balanced Fund
- ----------------------------------------------------------------------------------------------------------------------------------
For the For the For the period For the For the period
year ended year ended 06/01/02 - year ended 12/20/02(1) -
06/30/02 06/30/03 06/30/02 5/31/02 06/30/03
Operations
Net investment income/loss $ (156,548) $ (99,467) $ (25,121) $ (201,215) $ 1,205
Realized gains/losses on investments
and foreign currency transactions 815,380 (10,282,004) (163,773) (771) 24,140
Change in unrealized appreciation/
depreciation on investments (1,534,841) 9,608,668 (3,403,915) (6,143,982) 25,761
Change in net assets from operations (876,009) (772,803) (3,592,809) (6,345,968) 51,106
Dividends to Shareholders:
>From net investment income:
Standard shares -- -- -- -- (1,502)
>From net realized gains on investments:
Standard shares -- -- -- (2,126,224) --
Total dividends -- -- -- (2,126,224) (1,502)
Change in net assets from capital transactions 3,832,696 (4,060,871) (328,336) 19,075,057 1,011,462
Change in net assets $ 2,956,687 $ (4,833,674) $ (3,921,145) $ 10,602,865 $ 1,061,066
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period $ 15,502,709 $ 21,059,993 $ 24,981,138 $ 14,378,273 --
End of period $ 18,459,396 $ 16,226,319 $ 21,059,993 $ 24,981,138 $ 1,061,066
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income/loss -- -- -- -- $ 156
Capital Transactions
Standard Shares
Proceeds from shares issued $ 12,270,553 $ 6,319,550 $ 938,031 $ 24,800,162 $ 1,049,586
Dividends reinvested -- -- -- 2,070,609 325
Cost of shares redeemed (8,437,857) (10,380,421) (1,266,367) (7,795,714) (38,449)
Net change 3,832,696 (4,060,871) (328,336) 19,075,057 1,011,462
Institutional Shares
Proceeds from shares issued -- -- -- -- --
Cost of shares redeemed -- -- -- -- --
Net change -- -- -- -- --
Administrative Shares
Proceeds from shares issued -- -- -- -- --
Cost of shares redeemed -- -- -- -- --
Net change -- -- -- -- --
Change in net assets
from capital transactions $ 3,832,696 $ (4,060,871) $ (328,336) $ 19,075,057 $ 1,011,462
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Share Transactions
Standard Shares
Issued 1,251,105 819,291 100,445 1,987,625 104,984
Reinvested -- -- -- 165,516 33
Redeemed (868,569) (1,349,990) (138,633) (646,233) (3,660)
Net change 382,536 (530,699) (38,188) 1,506,908 101,357
Institutional Shares
Issued -- -- -- -- --
Redeemed -- -- -- -- --
Net change -- -- -- -- --
Administrative Shares
Issued -- -- -- -- --
Redeemed -- -- -- -- --
Net change -- -- -- -- --
Change in shares from
share transactions 382,536 (530,699) (38,188) 1,506,908 101,357
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Commencement of operations.
See Financial Notes
42 & 43
STATEMENTS OF CHANGES IN NET ASSETS
Global Equity Fund International Growth Fund
- ------------------------------------------------------------------------------------------------------------------
For the For the For the For the
year ended year ended year ended year ended
06/30/03 06/30/02 06/30/03 06/30/02
- ------------------------------------------------------------------------------------------------------------------
Operations
Net investment income/loss $ (245,695) $ (1,187,621) $ 4,694 $ (6,805)
Realized gains/losses on investments
and foreign currency transactions (20,092,299) (58,190,264) (543,939) (445,542)
Change in unrealized
appreciation/depreciation
on investments and foreign currencies 10,231,205 8,768,398 263,354 (148,631)
Change in net assets from operations (10,106,789) (50,609,487) (275,891) (600,978)
Dividends to Shareholders:
From net investment income:
Standard shares -- -- -- --
Institutional shares -- -- -- --
Total dividends -- -- -- --
Change in net assets from
capital transactions (26,919,108) (56,075,279) (50,039) 2,131,472
Change in net assets $ (37,025,897) $(106,684,766) $ (325,930) $ 1,530,494
- ------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period $ 147,618,456 $ 254,303,222 $ 3,167,766 $ 1,637,272
End of period $ 110,592,559 $ 147,618,456 $ 2,841,836 $ 3,167,766
- ------------------------------------------------------------------------------------------------------------------
Accumulated net investment income/loss $ (570,287) $ (723,041) $ (57,479) $ (25,644)
- ------------------------------------------------------------------------------------------------------------------
Capital Transactions
Standard Shares
Proceeds from shares issued $ 25,646,368 $ 198,374,332 $ 2,826,850 $ 4,791,279
Dividends reinvested -- -- -- --
Cost of shares redeemed (50,286,863) (251,921,233) (2,876,889) (2,659,807)
Net change (24,640,495) (53,546,901) (50,039) 2,131,472
Institutional Shares
Proceeds from shares issued $ 37,771,071 $ 54,298,201 -- --
Dividends reinvested -- -- -- --
Cost of shares redeemed (40,033,225) (57,777,479) -- --
Net change (2,262,154) (3,479,278) -- --
Administrative Shares
Proceeds from shares issued $ 706,362 $ 1,591,347 -- --
Cost of shares redeemed (722,821) (640,447) -- --
Net change (16,459) 950,900 -- --
Change in net assets from
capital transactions $ (26,919,108) $ (56,075,279) $ (50,039) $ 2,131,472
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Share Transactions
Standard Shares
Issued 1,995,494 12,492,604 497,446 644,662
Reinvested -- -- -- --
Redeemed (3,944,883) (15,828,132) (504,006) (372,894)
Net change (1,949,389) (3,335,528) (6,560) 271,768
Institutional Shares
Issued 2,906,867 3,421,162 -- --
Reinvested -- -- -- --
Redeemed (3,078,716) (3,652,158) -- --
Net change (171,849) (230,996) -- --
Administrative Shares
Issued 55,041 99,269 -- --
Redeemed (56,965) (40,048) -- --
Net change (1,924) 59,221 -- --
Change in shares from
share transactions (2,123,162) (3,507,303) (6,560) 271,768
- ------------------------------------------------------------------------------------------------------------------
Ultra Short
Income Fund Bond Fund Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------------------
For the For the For the period For the For the
year ended year ended 11/21/02(1) - year ended year ended
06/30/03 06/30/02 06/30/03 06/30/03 6/30/02
- ---------------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income/loss $ 2,597,821 $ 4,289,896 $ 82,660 $ 844,631 $ 2,637,823
Realized gains/losses on investments
and foreign currency transactions 3,091,917 (7,467,992) (2,413) -- --
Change in unrealized
appreciation/depreciation
on investments and foreign currencies 1,619,468 2,469,102 38,485 -- --
Change in net assets from operations 7,309,206 (708,994) 118,732 844,631 2,637,823
Dividends to Shareholders:
From net investment income:
Standard shares (2,770,272) (4,272,706) (89,255) (710,661) (2,026,320)
Institutional shares -- -- -- (133,970) (602,601)
Total dividends (2,770,272) (4,272,706) (89,255) (844,631) (2,628,921)
Change in net assets from
capital transactions (2,889,480) 830,365 9,222,446 (15,276,980) (13,884,963)
Change in net assets $ 1,649,454 $ (4,151,335) $ 9,251,923 $ (15,276,980) $ (13,876,061)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets
Beginning of period $ 67,488,027 $ 71,639,362 $- $ 130,810,173 $ 144,686,234
End of period $ 69,137,481 $ 67,488,027 $ 9,251,923 $ 115,533,193 $ 130,810,173
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulated net investment income/loss -- $ (3,553) $ (976) -- --
Capital Transactions
Standard Shares
Proceeds from shares issued $ 15,862,291 $ 26,499,837 $ 10,640,331 $ 90,075,370 $ 131,426,668
Dividends reinvested 2,594,958 3,903,979 70,753 742,720 2,214,847
Cost of shares redeemed (21,346,729) (29,573,451) (1,488,638) (100,447,452) (136,588,995)
Net change (2,889,480) 830,365 9,222,446 (9,629,362) (2,947,480)
Institutional Shares
Proceeds from shares issued -- -- -- $ 3,128,338 $ 17,644,804
Dividends reinvested -- -- -- 144,697 658,558
Cost of shares redeemed -- -- -- (8,920,653) (29,240,845)
Net change -- -- -- (5,647,618) (10,937,483)
Administrative Shares
Proceeds from shares issued -- -- -- -- --
Cost of shares redeemed -- -- -- -- --
Net change -- -- -- -- --
Change in net assets from
capital transactions $ (2,889,480) $ 830,365 $ 9,222,446 $ (15,276,980) $ (13,884,963)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Share Transactions
Standard Shares
Issued 1,597,468 2,597,522 1,060,718 90,075,370 131,415,588
Reinvested 262,370 383,963 7,042 742,730 2,214,857
Redeemed (2,151,369) (2,932,132) (148,149) (100,447,452) (136,588,544)
Net change (291,531) 49,353 919,611 (9,629,352) (2,958,099)
Institutional Shares
Issued -- -- -- 3,128,339 17,655,439
Reinvested -- -- -- 144,697 658,558
Redeemed -- -- -- (8,920,653) (29,240,845)
Net change -- -- -- (5,647,617) (10,926,848)
Administrative Shares
Issued -- -- -- -- --
Redeemed -- -- -- -- --
Net change -- -- -- -- --
Change in shares from
share transactions (291,531) 49,353 919,611 (15,276,969) (13,884,947)
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Commencement of operations.
See Financial Notes
44 & 45
FINANCIAL HIGHLIGHTS
Dividends to
Selected Per Share Data Investment Activities Shareholders
- ------------------------------------------------------------------------------------------------------------------------------
Net asset Net realized
value, Net and unrealized Total from From net
beginning investment Redemption gains/losses investment investment
of period income/loss fee on investments operations income
- ------------------------------------------------------------------------------------------------------------------------------
Core Growth Fund
Standard Shares
Year ended June 30, 2003 $16.73 (0.04) -- (0.25) (0.29) --
Year ended June 30, 2002 22.12 (0.09) -- (5.30) (5.39) --
Year ended June 30, 2001 32.59 (0.16) -- (9.01) (9.17) --
Year ended June 30, 2000 30.52 (0.22) -- 4.08 3.86 --
Year ended June 30, 1999 23.46 (0.15) -- 7.52 7.37 --
Institutional Shares
Year ended June 30, 2003 $13.66 0.05 -- (0.19) (0.14) --
Year ended June 30, 2002 17.94 0.04 -- (4.32) (4.28) --
Year ended June 30, 2001 26.59 0.01 -- (7.36) (7.35) --
Year ended June 30, 2000 25.02 -- -- 3.36 3.36 --
Year ended June 30, 1999 19.13 0.01 -- 6.19 6.20 --
Administrative Shares
Year ended June 30, 2003 $16.91 0.01 -- (0.24) (0.23) --
Year ended June 30, 2002 22.27 (0.01) -- (5.35) (5.36) --
Year ended June 30, 2001 32.66 (0.03)(1) -- (9.06) (9.09) --
Period ended June 30, 2000(2) 32.09 (0.01) -- 0.58 0.57 --
- ------------------------------------------------------------------------------------------------------------------------------
Emerging Growth Fund
Standard Shares
Year ended June 30, 2003 $11.82 (0.17) -- (0.69) (0.86) --
Year ended June 30, 2002 15.79 (0.20) -- (3.77) (3.97) --
Year ended June 30, 2001 33.48 (0.21) -- (11.41) (11.62) --
Year ended June 30, 2000 21.76 (0.30)(1) -- 16.58 16.28 --
Year ended June 30, 1999 17.55 (0.19) -- 6.19 6.00 --
Institutional Shares
Year ended June 30, 2003 $12.02 (0.10) -- (0.69) (0.79) --
Year ended June 30, 2002 15.96 (0.11)(1) -- (3.83) (3.94) --
Year ended June 30, 2001 33.61 (0.12) -- (11.46) (11.58) --
Period ended June 30, 2000(5) 25.67 (0.11) -- 12.61 12.50 --
Administrative Shares
Year ended June 30, 2003 $11.92 (0.10) -- (0.71) (0.81) --
Year ended June 30, 2002 15.87 (0.13) -- (3.82) (3.95) --
Year ended June 30, 2001 33.57 (0.17)(1) -- (11.46) (11.63) --
Period ended June 30, 2000(6) 28.70 (0.10)(1) -- 4.97 4.87 --
- ------------------------------------------------------------------------------------------------------------------------------
Small Cap Core Growth Fund
Standard Shares
Year ended June 30, 2003 $9.18 (0.09) -- (0.42) (0.51) --
Year ended June 30, 2002 9.52 (0.08) -- (0.26) (0.34) --
Year ended June 30, 2001 11.23 (0.05) -- (1.64) (1.69) --
Period ended June 30, 2000(7) 10.00 -- -- 1.23 1.23 --
- ------------------------------------------------------------------------------------------------------------------------------
Value Fund
Standard Shares
Year ended June 30, 2003 $8.74 (0.05) -- (0.05) (0.10) --
One month period ended June 30, 2002(8) 10.21 (0.01) -- (1.46) (1.47) --
Year ended May 31, 2002 15.29 (0.08) -- (3.57) (3.65) --
Year ended May 31, 2001 14.58 (0.07) -- 2.70 2.63 --
Year ended May 31, 2000 14.03 (0.08) -- 2.05 1.97 --
Year ended May 31, 1999 12.98 (0.08) -- 1.95 1.87 --
- ------------------------------------------------------------------------------------------------------------------------------
Balanced Fund
Standard Shares
- ------------------------------------------------------------------------------------------------------------------------------
Period ended June 30, 2003(9) $10.00 0.02 -- 0.47 0.49 (0.02)
- ------------------------------------------------------------------------------------------------------------------------------
Dividends to Shareholders Ratios and Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------------
Net Ratio of
From Net asset assets, expenses to
net Total value, Total end of average net
realized dividends to end return period assets, net of
gains shareholders of period (%) ($x1,000) reimbursement(%)
- -------------------------------------------------------------------------------------------------------------------------------
Core Growth Fund
Standard Shares
Year ended June 30, 2003 -- -- $16.44 (1.73) $285,339 1.37
Year ended June 30, 2002 -- -- 16.73 (24.37) 326,793 1.34
Year ended June 30, 2001 (1.30) (1.30) 22.12 (28.42) 472,779 1.34
Year ended June 30, 2000 (1.79) (1.79) 32.59 12.82 699,399 1.49
Year ended June 30, 1999 (0.31) (0.31) 30.52 31.58 578,286 1.58
Institutional Shares
Year ended June 30, 2003 -- -- $13.52 (1.02) $63,571 0.69
Year ended June 30, 2002 -- -- 13.66 (23.86) 85,140 0.68
Year ended June 30, 2001 (1.30) (1.30) 17.94 (27.98) 123,912 0.68
Year ended June 30, 2000 (1.79) (1.79) 26.59 13.67 180,779 0.74
Year ended June 30, 1999 (0.31) (0.31) 25.02 32.62 98,705 0.83
Administrative Shares
Year ended June 30, 2003 -- -- $16.68 (1.36) $2,426 1.00
Year ended June 30, 2002 -- -- 16.91 (24.07) 2,029 0.94
Year ended June 30, 2001 (1.30) (1.30) 22.27 (28.11) 1,964 0.94
Period ended June 30, 2000(2) -- -- 32.66 1.78(3) 21 0.99(4)
- -------------------------------------------------------------------------------------------------------------------------------
Emerging Growth Fund
Standard Shares
Year ended June 30, 2003 -- -- $10.96 (7.28) $157,911 1.95
Year ended June 30, 2002 -- -- 11.82 (25.14) 190,812 1.80
Year ended June 30, 2001 (6.07) (6.07) 15.79 (37.52) 283,760 1.68
Year ended June 30, 2000 (4.56) (4.56) 33.48 82.19 386,670 1.69
Year ended June 30, 1999 (1.79) (1.79) 21.76 36.04 136,137 1.82
Institutional Shares
Year ended June 30, 2003 -- -- $11.23 (6.57) $5,379 1.25
Year ended June 30, 2002 -- -- 12.02 (24.69) 6,428 1.20
Year ended June 30, 2001 (6.07) (6.07) 15.96 (37.21) 19,676 1.30
Period ended June 30, 2000(5) (4.56) (4.56) 33.61 55.02(3) 16,284 1.24(4)
Administrative Shares
Year ended June 30, 2003 -- -- $11.11 (6.80) $8,561 1.51
Year ended June 30, 2002 -- -- 11.92 (24.89) 8,444 1.47
Year ended June 30, 2001 (6.07) (6.07) 15.87 (37.43) 9,497 1.55
Period ended June 30, 2000(6) -- -- 33.57 16.97(3) 8 1.55(4)
- -------------------------------------------------------------------------------------------------------------------------------
Small Cap Core Growth Fund
Standard Shares
Year ended June 30, 2003 -- -- $8.67 (5.56) $17,821 1.45
Year ended June 30, 2002 -- -- 9.18 (3.57) 18,459 1.34
Year ended June 30, 2001 (0.02) (0.02) 9.52 (15.08) 15,503 1.34
Period ended June 30, 2000(7) -- -- 11.23 12.30(3) 8,397 1.49(4)
- -------------------------------------------------------------------------------------------------------------------------------
Value Fund
Standard Shares
Year ended June 30, 2003 -- -- $8.64 (1.14) $16,226 1.90
One month period ended June 30, 2002(8) -- -- 8.74 (14.40)(3) 21,060 1.95(4)
Year ended May 31, 2002 (1.43) (1.43) 10.21 (25.58) 24,981 1.95
Year ended May 31, 2001 (1.92) (1.92) 15.29 20.71 14,378 1.95
Year ended May 31, 2000 (1.42) (1.42) 14.58 14.36 8,726 1.95
Year ended May 31, 1999 (0.82) (0.82) 14.03 15.43 4,611 1.95
- -------------------------------------------------------------------------------------------------------------------------------
Balanced Fund
Standard Shares
- -------------------------------------------------------------------------------------------------------------------------------
Period ended June 30, 2003(9) -- (0.02) $10.47 4.87(3) $1,061 1.30(4)
- -------------------------------------------------------------------------------------------------------------------------------
Ratios and Supplemental Data
- ---------------------------------------------------------------------------------------
Ratio of net Ratio of
investment expenses to
income/loss average net Portfolio
to average net assets, prior to turnover
assets(%) reimbursement(%) rate(%)
- ---------------------------------------------------------------------------------------
Core Growth Fund
Standard Shares
Year ended June 30, 2003 (0.28) 1.53 183.75
Year ended June 30, 2002 (0.43) 1.44 76.40
Year ended June 30, 2001 (0.62) 1.42 44.95
Year ended June 30, 2000 (0.75) 1.52 20.04
Year ended June 30, 1999 (0.68) 1.58 18.04
Institutional Shares
Year ended June 30, 2003 0.36 0.76 183.75
Year ended June 30, 2002 0.23 0.73 76.40
Year ended June 30, 2001 0.04 0.74 44.95
Year ended June 30, 2000 0.00 0.74 20.04
Year ended June 30, 1999 0.05 0.83 18.04
Administrative Shares
Year ended June 30, 2003 0.09 1.06 183.75
Year ended June 30, 2002 (0.05) 1.01 76.40
Year ended June 30, 2001 (0.14) 5.63 44.95
Period ended June 30, 2000(2) (0.27)(4) 101.59(4) 20.04
- ---------------------------------------------------------------------------------------
Emerging Growth Fund
Standard Shares
Year ended June 30, 2003 (1.56) 1.97 315.89
Year ended June 30, 2002 (1.39) 1.86 202.57
Year ended June 30, 2001 (1.09) 1.75 136.63
Year ended June 30, 2000 (1.09) 1.75 159.95
Year ended June 30, 1999 (1.20) 1.83 208.49
Institutional Shares
Year ended June 30, 2003 (0.86) 1.28 315.89
Year ended June 30, 2002 (0.78) 1.26 202.57
Year ended June 30, 2001 (0.69) 1.36 136.63
Period ended June 30, 2000(5) (0.61)(4) 1.31(4) 159.95
Administrative Shares
Year ended June 30, 2003 (1.13) 1.54 315.89
Year ended June 30, 2002 (1.07) 1.53 202.57
Year ended June 30, 2001 (0.96) 2.06 136.63
Period ended June 30, 2000(6) (0.90)(4) 158.14(4) 159.95
- ---------------------------------------------------------------------------------------
Small Cap Core Growth Fund
Standard Shares
Year ended June 30, 2003 (1.12) 1.58 349.79
Year ended June 30, 2002 (0.93) 1.40 294.26
Year ended June 30, 2001 (0.57) 3.20 146.62
Period ended June 30, 2000(7) 0.00(4) 5.98(4) 20.16
- ---------------------------------------------------------------------------------------
Value Fund
Standard Shares
Year ended June 30, 2003 (0.62) 1.90 209.72
One month period ended June 30, 2002(8) (1.33)(4) 2.05(4) 5.87
Year ended May 31, 2002 (1.04) 2.54 34.77
Year ended May 31, 2001 (0.65) 4.63 62.55
Year ended May 31, 2000 (0.68) 7.11 72.32
Year ended May 31, 1999 (0.79) 10.32 73.70
- ---------------------------------------------------------------------------------------
Balanced Fund
Standard Shares
- ---------------------------------------------------------------------------------------
Period ended June 30, 2003(9) 0.41(4) 16.73(4) 140.42
- ---------------------------------------------------------------------------------------
(1) Based on average shares outstanding.
(2) For the period February 4, 2000, commencement of operations, to June 30,
2000.
(3) Not annualized.
(4) Annualized.
(5) For the period November 1, 1999, commencement of operations, to June 30,
2000.
(6) For the period February 4, 2000, commencement of operations, to June 30,
2000.
(7) For the period December 28, 1999, commencement of operations, to June 30,
2000.
(8) Subsequent to the annual report as of May 31, 2002, the Citizens Value Fund
changed its fiscal year end to June 30.
(9) For the period December 20, 2002, commencement of operations, to June 30,
2003.
See Financial Notes
46 & 47
FINANCIAL HIGHLIGHTS
Dividends to
Selected Per Share Data Investment Activities Shareholders
- ------------------------------------------------------------------------------------------------------------------------------
Net asset Net realized
value, Net and unrealized Total from From net
beginning investment Redemption gains/losses investment investment
of period income/loss fee on investments operations income
- ------------------------------------------------------------------------------------------------------------------------------
Global Equity Fund
Standard Shares
Year ended June 30, 2003 $14.22 (0.03)(1) 0.02 (0.82) (0.83) --
Year ended June 30, 2002 18.31 (0.11)(1) 0.01 (3.99) (4.09) --
Year ended June 30, 2001 29.99 (0.16) -- (9.61) (9.77) --
Year ended June 30, 2000 20.22 (0.22)(1) -- 10.94 10.72 --
Year ended June 30, 1999 16.95 (0.12) -- 3.86 3.74 --
Institutional Shares
Year ended June 30, 2003 $14.40 0.05(1) 0.02 (0.82) (0.75) --
Year ended June 30, 2002 18.46 (0.01)(1) 0.01 (4.06) (4.06) --
Year ended June 30, 2001 30.08 (0.05)(1) -- (9.66) (9.71) --
Period ended June 30, 2000(2) 23.45 (0.05)(1) -- 7.63 7.58 --
Administrative Shares
Year ended June 30, 2003 $14.30 0.01(1) 0.02 (0.82) (0.79) --
Year ended June 30, 2002 18.38 (0.06)(1) 0.01 (4.03) (4.08) --
Year ended June 30, 2001 30.02 (0.11)(1) -- (9.62) (9.73) --
Period ended June 30, 2000(5) 33.45 (0.06) -- (3.37) (3.43) --
- ------------------------------------------------------------------------------------------------------------------------------
International Growth Fund
Standard Shares
Year ended June 30, 2003 $6.73 0.01(1) 0.04 (0.66) (0.61) --
Year ended June 30, 2002 8.22 (0.02)(1) 0.02 (1.49) (1.49) --
Period ended June 30, 2001(6) 10.00 0.04(1) -- (1.82) (1.78) --
- ------------------------------------------------------------------------------------------------------------------------------
Income Fund
Standard Shares
Year ended June 30, 2003 $9.62 0.37 -- 0.69 1.06 (0.40)
Year ended June 30, 2002 10.28 0.58 -- (0.66) (0.08) (0.58)
Year ended June 30, 2001 10.20 0.68 -- 0.10 0.78 (0.70)
Year ended June 30, 2000 10.51 0.65 -- (0.32) 0.33 (0.63)
Year ended June 30, 1999 11.03 0.59 -- (0.50) 0.09 (0.59)
- ------------------------------------------------------------------------------------------------------------------------------
Ultra Short Bond Fund
Standard Shares
Period ended June 30, 2003(8) $10.00 0.14(1) -- 0.07 0.21 (0.15)
- ------------------------------------------------------------------------------------------------------------------------------
Money Market Fund
Standard Shares
Year ended June 30, 2003 $1.00 0.01 -- -- 0.01 (0.01)
Year ended June 30, 2002 1.00 0.02 -- -- 0.02 (0.02)
Year ended June 30, 2001 1.00 0.05 -- -- 0.05 (0.05)
Year ended June 30, 2000 1.00 0.05 -- -- 0.05 (0.05)
Year ended June 30, 1999 1.00 0.04 -- -- 0.04 (0.04)
Institutional Shares
Year ended June 30, 2003 $1.00 0.01 -- -- 0.01 (0.01)
Year ended June 30, 2002 1.00 0.02 -- -- 0.02 (0.02)
Year ended June 30, 2001 1.00 0.05 -- -- 0.05 (0.05)
Year ended June 30, 2000 1.00 0.05 -- -- 0.05 (0.05)
Year ended June 30, 1999 1.00 0.05 -- -- 0.05 (0.05)
Dividends to Shareholders Ratios and Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------------
Net Ratio of
From Net asset assets, expenses to
net Total value, Total end of average net
realized dividends to end return period assets, net of
gains shareholders of period (%) ($x1,000) reimbursement(%)
- -------------------------------------------------------------------------------------------------------------------------------
Global Equity Fund
Standard Shares
Year ended June 30, 2003 -- -- $13.39 (5.84) $101,846 1.91
Year ended June 30, 2002 -- -- 14.22 (22.34) 135,881 1.84
Year ended June 30, 2001 (1.91) (1.91) 18.31 (33.69) 236,080 1.82
Year ended June 30, 2000 (0.95) (0.95) 29.99 53.27 354,818 1.82
Year ended June 30, 1999 (0.47) (0.47) 20.22 22.34 90,549 1.96
Institutional Shares
Year ended June 30, 2003 -- -- $13.65 (5.21) $6,688 1.26
Year ended June 30, 2002 -- -- 14.40 (21.99) 9,531 1.27
Year ended June 30, 2001 (1.91) (1.91) 18.46 (33.35) 16,475 1.39
Period ended June 30, 2000(2) (0.95) (0.95) 30.08 32.55(3) 12,544 1.39(4)
Administrative Shares
Year ended June 30, 2003 -- -- $13.51 (5.52) $2,059 1.59
Year ended June 30, 2002 -- -- 14.30 (22.20) 2,207 1.64
Year ended June 30, 2001 (1.91) (1.91) 18.38 (33.52) 1,748 1.68
Period ended June 30, 2000(5) -- -- 30.02 (10.25)(3) 1 1.68(4)
- ------------------------------------------------------------------------------------------------------------------------------
International Growth Fund
Standard Shares
Year ended June 30, 2003 -- -- $6.12 (9.06) $2,842 1.85
Year ended June 30, 2002 -- -- 6.73 (18.13) 3,168 1.85
Period ended June 30, 2001(6) -- -- 8.22 (17.80)(3) 1,637 1.85(4)
- ------------------------------------------------------------------------------------------------------------------------------
Income Fund
Standard Shares
Year ended June 30, 2003 -- (0.40) $10.28 11.28 $69,137 1.37
Year ended June 30, 2002 -- (0.58) 9.62 (0.87) 67,488 1.38
Year ended June 30, 2001 --(7) (0.70) 10.28 7.87 71,639 1.40
Year ended June 30, 2000 (0.01) (0.64) 10.20 3.35 61,836 1.45
Year ended June 30, 1999 (0.02) (0.61) 10.51 0.78 62,837 1.45
- ------------------------------------------------------------------------------------------------------------------------------
Ultra Short Bond Fund
Standard Shares
Period ended June 30, 2003(8) -- (0.15) $10.06 2.12(3) $9,252 0.00(4)
- ------------------------------------------------------------------------------------------------------------------------------
Money Market Fund
Standard Shares
Year ended June 30, 2003 -- (0.01) $1.00 0.65 $104,641 0.93
Year ended June 30, 2002 -- (0.02) 1.00 1.71 114,271 0.92
Year ended June 30, 2001 -- (0.05) 1.00 5.23 117,211 0.89
Year ended June 30, 2000 -- (0.05) 1.00 4.67 112,700 1.17
Year ended June 30, 1999 -- (0.04) 1.00 4.07 105,740 1.19
Institutional Shares
Year ended June 30, 2003 -- (0.01) $1.00 0.95 $10,892 0.63
Year ended June 30, 2002 -- (0.02) 1.00 1.97 16,539 0.67
Year ended June 30, 2001 -- (0.05) 1.00 5.43 27,475 0.70
Year ended June 30, 2000 -- (0.05) 1.00 5.04 23,370 0.81
Year ended June 30, 1999 -- (0.05) 1.00 4.58 22,464 0.70
Ratios and Supplemental Data
- ---------------------------------------------------------------------------------------
Ratio of net Ratio of
investment expenses to
income/loss average net Portfolio
to average net assets, prior to turnover
assets(%) reimbursement(%) rate(%)
- ---------------------------------------------------------------------------------------
Global Equity Fund
Standard Shares
Year ended June 30, 2003 (0.26) 1.91 42.05
Year ended June 30, 2002 (0.66) 1.84 132.82
Year ended June 30, 2001 (0.71) 1.82 151.95
Year ended June 30, 2000 (0.79) 1.83 120.69
Year ended June 30, 1999 (0.88) 1.96 64.07
Institutional Shares
Year ended June 30, 2003 0.42 1.26 42.05
Year ended June 30, 2002 (0.05) 1.27 132.82
Year ended June 30, 2001 (0.23) 1.42 151.95
Period ended June 30, 2000(2) (0.25)(4) 1.43(4) 120.69
Administrative Shares
Year ended June 30, 2003 0.11 1.59 42.05
Year ended June 30, 2002 (0.39) 1.64 132.82
Year ended June 30, 2001 (0.48) 3.18 151.95
Period ended June 30, 2000(5) (0.48)(4) 296.20(4) 120.69
- ---------------------------------------------------------------------------------------
International Growth Fund
Standard Shares
Year ended June 30, 2003 0.18 2.45 90.26
Year ended June 30, 2002 (0.23) 3.06 158.84
Period ended June 30, 2001(6) 0.86(4) 17.47(4) 39.88
- ---------------------------------------------------------------------------------------
Income Fund
Standard Shares
Year ended June 30, 2003 3.80 1.37 195.73
Year ended June 30, 2002 5.77 1.38 54.05
Year ended June 30, 2001 6.55 1.48 60.53
Year ended June 30, 2000 6.34 1.47 52.96
Year ended June 30, 1999 5.50 1.49 44.07
- ---------------------------------------------------------------------------------------
Ultra Short Bond Fund
Standard Shares
Period ended June 30, 2003(8) 2.29(4) 2.10(4) 56.04
- ---------------------------------------------------------------------------------------
Money Market Fund
Standard Shares
Year ended June 30, 2003 0.65 0.93 N/A
Year ended June 30, 2002 1.72 0.92 N/A
Year ended June 30, 2001 5.08 0.89 N/A
Year ended June 30, 2000 4.59 1.18 N/A
Year ended June 30, 1999 4.00 1.24 N/A
Institutional Shares
Year ended June 30, 2003 0.98 0.63 N/A
Year ended June 30, 2002 1.95 0.67 N/A
Year ended June 30, 2001 5.22 0.70 N/A
Year ended June 30, 2000 4.93 0.82 N/A
Year ended June 30, 1999 4.47 0.70 N/A
(1) Based on average shares outstanding.
(2) For the period November 1, 1999, commencement of operations, to June 30,
2000.
(3) Not annualized.
(4) Annualized.
(5) For the period February 4, 2000, commencement of operations, to June 30,
2000.
(6) For the period December 20, 2000, commencement of operations, to June 30,
2001.
(7) Less than $0.005 per share.
(8) For the period November 21, 2002, commencement of operations, to June 30,
2003.
See Financial Notes
48 & 49
ORGANIZATION
Citizens Funds (the "Trust"), a Massachusetts Business Trust, is registered as
an open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"). The Trust contains the following funds
(individually a "fund," collectively the "funds"):
Fund Short Name
Citizens Core Growth Fund Core Growth Fund
Citizens Emerging Growth Fund Emerging Growth Fund
Citizens Small Cap Core Growth Fund Small Cap Core Growth Fund
Citizens Value Fund Value Fund
Citizens Balanced Fund Balanced Fund
Citizens Global Equity Fund Global Equity Fund
Citizens International Growth Fund International Growth Fund
Citizens Income Fund Income Fund
Citizens Ultra Short Bond Fund Ultra Short Bond Fund
Citizens Money Market Fund Money Market Fund
The funds are authorized to issue an unlimited number of shares of beneficial
interest with no par value. The Core Growth Fund, Emerging Growth Fund and
Global Equity Fund currently offer three classes of shares: Standard shares,
Institutional shares and Administrative shares. The Money Market Fund offers two
classes of shares: Standard shares and Institutional shares. The Small Cap Core
Growth Fund, Value Fund, Balanced Fund, International Growth Fund, Income Fund
and Ultra Short Bond Fund offer one class of shares: Standard shares. Each class
of shares in the funds has identical rights and privileges except with respect
to fees paid under class-specific agreements, voting rights on matters affecting
a single class of shares, and the exchange privilege of each class of shares.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
funds in the preparation of their financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America ("GAAP"). The preparation of financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses for the
period. Actual results could differ from those estimates.
Securities Valuation Equity securities are valued at the last sale price on the
primary exchange on which such securities are traded or on the principal
over-the-counter market on which such securities are traded, as of the close of
business on the day the securities are valued, or lacking any sales, at the last
available bid price for domestic securities and halfway between the bid and ask
price for international securities. Equity securities traded on the NASDAQ stock
market are valued at the NASDAQ official closing price. Fixed-income investments
generally are valued at the bid price for securities. Securities may also be
valued on the basis of valuations furnished by a pricing service that uses both
dealer-supplied valuations and valuations based upon analysis of market data or
other factors if these valuations are believed to more accurately reflect the
fair value of such securities. Investments for which market quotations are not
readily available are valued at fair value, using procedures determined in good
faith by the Board of Trustees. Short-term securities maturing within 60 days
and investments of the Money Market Fund are valued at amortized cost, which
approximates fair value. Under the amortized cost method, premium or discount,
if any, is amortized or accreted, respectively, on a constant (straight-line)
basis to the maturity of the security.
Security Transactions and Related Investment Income Security transactions are
accounted for on the trade date (date the order to buy or sell is executed). The
cost of securities sold is determined on the identified cost
50
FINANCIAL NOTES
basis, unless otherwise specified. Interest income is recorded on an accrual
basis and includes, where applicable, the amortization or accretion of a premium
or discount. Dividend income is recorded on the ex-dividend date.
Foreign Currency Translation The accounting records of the funds are maintained
in U.S. dollars. Investment securities and other assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the
current rate of exchange. Purchases and sales of securities, and income and
expenses, are translated into U.S. dollars at the prevailing rate of exchange on
the respective dates of such transactions. The changes in foreign exchange rates
on investments are not isolated on the Statement of Operations. Such
fluctuations are included with the net realized and unrealized gain or loss on
investments.
Foreign Currency Contracts The Global Equity Fund and International Growth Fund
use foreign currency contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign currency
or if the counterparties do not perform under the contract's terms. The U.S.
dollar value of foreign currency contracts is determined using the contractual
currency exchange rates established at the time of each trade. There were no
open foreign currency contracts as of June 30, 2003.
Repurchase Agreements The funds may acquire repurchase agreements with an entity
which is a member of the Federal Reserve System collateralized by instruments
issued by the U.S.Government, its agencies or instrumentalities. The repurchase
price generally equals the price paid by a fund plus interest negotiated on the
basis of current short-term rates, which may be more or less than the rate on
the underlying securities. It is the funds' policy to receive collateral
securities of which the value, including accrued interest, is at least equal to
102% of the amount to be repaid to the funds under each agreement at its
maturity. Collateral subject to repurchase agreements is held by the funds'
custodian or another qualified custodian. If the counterparty defaults, and the
fair value of the collateral declines, realization of the collateral by the
funds may be delayed or limited.
Restricted Securities The funds are permitted to invest in privately placed
securities. These securities may be resold in transactions exempt from
registration, or to the public, if the securities are registered under the
Securities Act of 1933. Disposal of these securities may involve time-consuming
negotiations and expense, and the prompt sale at an acceptable price may be
difficult.
Redemption Fee The Global Equity Fund and International Growth Fund charge a
redemption fee of 2% (paid to the funds) with respect to shares of those funds
redeemed within 60 days of purchase. The fee does not apply to shares purchased
through the reinvestment of dividends or other distributions, redemptions by the
funds of accounts below minimum balances, redemptions due to shareholder death
or disability, or certain omnibus accounts or retirement plans. For the year
ended June 30, 2003, the Global Equity and International Growth Funds collected
$158,810 and $20,283 respectively, in redemption fees. These fees are included
in the "increase/ decrease in net assets from capital transactions" amounts in
the Statements of Changes in Net Assets.
Dividends to Shareholders The Core Growth Fund, Emerging Growth Fund, Small Cap
Core Growth Fund, Value Fund, Global Equity Fund and International Growth Fund
declare and distribute dividends from net investment income, if any, to
shareholders annually. The Balanced Fund declares and distributes dividends from
net investment income to shareholders quarterly. The Income Fund declares and
distributes dividends from net investment income to shareholders monthly.
Dividends from net investment income for the Ultra Short Bond Fund and the Money
Market Fund are declared daily and paid monthly. The funds' net realized gains,
if any, are distributed to shareholders at least annually.
51
FINANCIAL NOTES
Additional dividends may also be paid to the funds' shareholders to the extent
necessary to avoid federal excise tax on certain undistributed income and net
realized gains. The amount of dividends from net investment income and net
realized gains is determined in accordance with federal income tax regulations
which may differ from GAAP. These "book/tax" differences are either considered
temporary or permanent in nature. To the extent these differences are permanent
in nature (i.e., reclassification of market discounts, gain/loss, paydowns, and
distributions) such amounts are reclassified to capital; temporary differences
do not require reclassification.
Offering Costs Expenses incurred in connection with the offering of fund shares
(such as drafting of registration statements and agreements) for the Balanced
and Ultra Short Bond Funds were paid by the funds and amounted to $10,368 for
each fund. Such expenses are being amortized over a 12-month period starting
with the commencement of operations.
Federal Income Taxes Each fund is a separate taxable entity for federal tax
purposes. Each fund has qualified and intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code,
as amended and distributes substantially all of its taxable net investment
income and net realized gains, if any, to their shareholders.
FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Management Fee Citizens Advisers, Inc. (the "Adviser") serves as
Adviser to each of the funds. Under the terms of the management contract, the
Adviser is paid a fee that is computed daily based on an annual rate for each
fund's average daily net assets. Those rates are as follows:
Fund Fee Rate
Core Growth Fund 0.50%
Emerging Growth Fund 1.00%
Small Cap Core Growth Fund 0.50%
Value Fund 0.70%
Balanced Fund 0.65%
Global Equity Fund 1.00%
International Growth Fund 1.05%
Income Fund 0.65%
Ultra Short Bond Fund 0.35%
Money Market Fund 0.35%
>From July 1, 2002 through October 30, 2002, the Adviser was paid a fee based on
an annual rate of 1.00% for the Value Fund.
State Street Global Advisors Funds Management, Inc. serves as the Sub-Adviser
for the Global Equity Fund and International Growth Fund. For its services, the
Sub-Adviser receives a fee computed daily based on an annual rate for each
funds' average daily net assets, paid by the Adviser as follows:
Fund Fee Rate
Global Equity Fund 0.35% of the first $500 million, 0.25% thereafter
International Growth Fund 0.40% of the first $500 million, 0.30% thereafter
For the period July 1, 2002 through October 30, 2002, Meyers Capital Management,
LLC ("Meyers") served as the Sub-Adviser for the Citizens Value Fund. For its
services, Meyers received a fee based on an annual rate of 0.30% of the first
$100 million of average daily net assets and 0.45% of average daily net assets
in excess of $100 million, paid by the Adviser.
Distribution Fee Citizens Securities, Inc. (the "Distributor") is a wholly owned
subsidiary of the Adviser and serves as the funds' Distributor. Pursuant to Rule
12b-1 under the 1940 Act, the Trust's shareholders have adopted
52
FINANCIAL NOTES
a separate distribution plan with respect to the funds' Standard and
Administrative shares pursuant to which the funds, except the Money Market Fund,
compensate the Distributor for services in an amount equal to 0.25% per annum of
average annual net assets.
Administrative and Shareholder Service Fees The Adviser, with whom certain
officers and Trustees are affiliated, performs administrative duties for the
Trust under a separate administrative contract, which provides for the
reimbursement of out of pocket expenses as well as fees for services rendered.
In accordance with the terms of the administrative contract, fees and expenses
are accrued daily based on average daily net assets of each fund at the annual
rate of 0.10%. Effective July 1, 2003 the fee for these services is an annual
rate of 0.15%. Pursuant to the administrative contract for the year ended June
30, 2003, the Adviser was also paid a fee of $100,000 annually for services
rendered in connection with the preparation and filing of annual and semi-annual
reports and annual updates to the Trust's registration statement. The Adviser
may also be compensated an hourly rate for services rendered in connection with
the preparation and filing of any and all regulatory communications and
shareholder reports and communication except those described above.
In addition, Citizens Securities, Inc., a wholly owned subsidiary of the
Adviser, provides a number of administrative services to the Trust relating
primarily to shareholder services and communications, and is paid an account fee
for providing such services and communications for each of the individual funds
with the exception of the Core Growth Fund, Standard shares. The Core Growth
Fund, Standard shares, may be charged a shareholder service fee of up to 0.35%
based on the average daily net assets of the class. For the year ended June 30,
2003, a fee of 0.25% was charged.
Transfer Agency, Fund Accounting and Custody BISYS Fund Services Ohio, Inc.
provides transfer agency and fund accounting services to the funds pursuant to
certain fee arrangements. Transfer agent expenses also include the cost of
services rendered by third parties to provide sub-transfer agency services.
Fifth Third Bank acts as custodian for the funds. Custody expenses may be
incurred or offset from fees or credits arising from cash balances maintained on
deposit.
Trustee Fees Certain officers and Trustees of the Trust are "interested
persons," as defined in the 1940 Act, of the Adviser. Currently, each Trustee
who is not an "interested person" receives an annual retainer of $12,000 and
$1,250 for each day's attendance at a Trustee meeting. The Trustees have elected
a Chair, who receives an additional annual retainer of $5,000; and a Vice Chair,
Audit Committee Chair and Social Responsibility Chair -- who receive an
additional annual retainer of $2,500.
Expense Allocation Expenses directly attributable to a fund are charged to that
fund. Expenses not directly attributable to a fund are allocated proportionately
among various or all funds within the Trust in relation to the net assets of
each fund or on another reasonable basis. Expenses specific to a class are
charged to that class.
53
FINANCIAL NOTES
Fee Reductions and Reimbursements For the year ended June 30, 2003, the Adviser
contractually agreed to limit the total expenses, exclusive of taxes, brokerage
commissions and extraordinary expenses, for certain classes of the funds to the
extent they exceeded the following limits:
Expense
Fund Class Limitation
Core Growth Fund Standard 1.39%
Institutional 0.74%
Administrative 1.06%
Emerging Growth Fund Institutional 1.30%
Administrative 1.55%
Small Cap Core Growth Fund Standard 1.45%
Value Fund Standard 1.95%
Global Equity Fund Standard 2.05%
Institutional 1.39%
Administrative 1.68%
International Growth Fund Standard 1.85%
Income Fund Standard 1.40% of the first
$100 million of
net assets and
1.25% thereafter
Money Market Fund Standard 1.50% of the first
$40 million of net
assets and 1.00%
thereafter
Effective July 1, 2003 there are no contractual limits on total expenses.
For the period July 1, 2002 to November 30, 2002, the Adviser contractually
agreed to limit total expenses for the Core Growth Fund to 1.34%, 0.68% and
0.94% for the Standard, Institutional and Administrative shares, respectively.
For the period July 1, 2002 to December 31, 2002, the Adviser voluntarily waived
0.10% of its fee for the Emerging Growth Fund when the fund's monthly average
net assets exceeded $100 million. In addition, the Adviser voluntarily waived
fees and reimbursed expenses so that total annual operating expenses did not
exceed 1.30% on the Balanced Fund and 0.00% on the Ultra Short Bond Fund. The
Adviser may terminate these waivers at any time.
Investment Transactions The following summarizes purchases and sales of
investment securities, other than short-term investments, by fund for the year
ended June 30, 2003:
Fund Purchases Sales
Core Growth Fund $625,238,774 $680,218,150
Emerging Growth Fund 517,182,539 531,635,376
Small Cap Core Growth Fund 54,221,257 53,444,334
Value Fund 33,127,408 36,973,002
Balanced Fund 1,564,211 668,305
Global Equity Fund 49,060,888 74,816,583
International Growth Fund 2,396,224 2,319,854
Income Fund 127,757,386 131,303,900
Ultra Short Bond Fund 9,170,933 2,262,532
Meyers Pride Value Fund Reorganization The Trust entered an agreement and plan
of reorganization and liquidation with Meyers Investment Trust on behalf of its
series Meyers Pride Value Fund, pursuant to which the net assets of the Meyers
Pride Value Fund ($12,506,840) were transferred to the Citizens Value Fund in
exchange for 1,083,741 shares of the Citizens Value Fund. The reorganization,
which qualified as a tax-free exchange for federal income tax purposes, was
completed on September 24, 2001, following approval by shareholders of the
Meyers Pride Value Fund at a special shareholder meeting. The aggregate net
assets of the Meyers Pride Value Fund and the Citizens Value Fund were
$12,506,840 and $0, respectively, prior to the reorganization and the combined
net assets were $12,506,840 immediately after the reorganization.
Subsequent Event On July 1, 2003, the Citizens Money Market Fund transferred all
security related assets to the Citizens Prime Money Market Fund.
54
FINANCIAL NOTES
Federal Tax Information
The tax character of dividends paid by the funds during the past two fiscal
years were as follows:
Fiscal Year Ended 2003 Dividends Paid From
-------------------------
Ordinary Net long-term Total taxable Tax return Total
income capital gains dividends of capital dividends paid(1)
- ----------------------------------------------------------------------------------------------------
Balanced Fund $ 325 $ -- $ 325 $ -- $ 325
Income Fund 2,872,716 -- 2,872,716 -- 2,872,716
Ultra Short Bond Fund 72,439 -- 72,439 -- 72,439
Money Market Fund 909,800 -- 909,800 -- 909,800
Fiscal Year Ended 2002 Dividends Paid From Ordinary Net long-term Total taxable
Tax return Total income capital gains dividends of capital dividends paid(1)
Fiscal Year Ended 2002 Dividends Paid From
-------------------------
Ordinary Net long-term Total taxable Tax return Total
income capital gains dividends of capital dividends paid(1)
- ----------------------------------------------------------------------------------------------------
Income Fund $4,341,300 $ -- $4,341,300 $ -- $4,341,300
Money Market Fund 2,937,861 -- 2,937,861 -- 2,937,861
As of June 30, 2003 the components of accumulated earnings/deficit on a tax
basis for the funds were as follows:
Undistributed Undistributed Accumulated Unrealized Total
ordinary long-term Accumulated Dividends capital and appreciation/ accumulated
income capital gains earnings payable other losses depreciation(2) earnings/deficit
- -----------------------------------------------------------------------------------------------------------------------------------
Core Growth Fund $ -- $ -- $ -- $ -- $(120,712,170) $ 36,721,428 $ (83,990,742)
Emerging Growth Fund -- -- -- -- (223,459,606) 14,769,123 (208,690,483)
Small Cap Core Growth Fund -- -- -- -- (4,271,892) 1,627,305 (2,644,587)
Value Fund -- -- -- -- (11,494,098) 855,755 (10,638,343)
Balanced Fund 25,176 -- 25,176 (1,177) -- 25,761 49,760
Global Equity Fund -- -- -- -- (131,939,653) (7,057,879) (138,997,532)
International Growth Fund -- -- -- -- (888,473) (110,930) (999,403)
Income Fund 206,365 -- 206,365 (206,365) (5,782,978) 2,803,402 (2,979,576)
Ultra Short Bond Fund 15,840 -- 15,840 (16,816) (8,032) 38,485 29,477
Money Market Fund 41,054 -- 41,054 (41,054) (9,083) -- (9,083)
As of June 30, 2003, the funds had the following net capital loss carryforwards,
which are available to offset future realized gains:
Amount Expires Amount Expires Amount Expires
- -----------------------------------------------------------------------------------------------------------------------
Core Growth Fund $ -- -- $ 74,089,417 2010 $ 46,622,753 2011
Emerging Growth Fund 8,861,924 2009 170,319,594 2010 36,170,306 2011
Small Cap Core Growth Fund -- 644,241 2010 3,579,720 2011
Value Fund -- -- 1,388,344 2010 4,976,984 2011
Global Equity Fund -- -- 107,010,861 2010 8,937,477 2011
International Growth Fund -- -- 432,059 2010 33,758 2011
Income Fund 339,912 2009 836,643 2010 4,606,423 2011
Citizens Money
Market Fund 9,083 2009 -- -- -- --
(1) Total dividends paid may differ from the amount reported in the Statements
of Changes in Net Assets because for tax purposes dividends are recognized when
actually paid.
(2) The differences between book-basis and tax-basis unrealized
appreciation/depreciation are attributable primarily to: tax deferral of losses
on wash sales, the realization for tax purposes of unrealized gains/losses on
certain derivative instruments, the difference between book and tax amortization
methods for premium and market discount, the realization for tax purposes of
unrealized gains/losses on investments in passive foreign investment companies,
and the return of capital adjustments from real estate investment trusts.
55
FINANCIAL NOTES
Net capital losses incurred after October 31, 2002, and within the taxable year
are deemed to arise on the first business day of each fund's next taxable year.
For the year ended June 30, 2003, the fund deferred to July 1, 2003 post October
capital losses, and post October currency losses of:
Capital losses Currency losses
- --------------------------------------------------------------------
Emerging Growth Fund $ 8,107,782 $ --
Small Cap Core Growth Fund 47,931 --
Value Fund 5,128,770 --
Global Equity Fund 15,421,030 570,285
International Growth Fund 365,177 57,479
Ultra Short Bond Fund 8,032 --
SUPPLEMENTAL INFORMATION (UNAUDITED)
Federal Tax Information For the fiscal year ended June 30, 2003, $1,502 of
dividends paid by the Balanced Fund may be subject to a maximum tax rate of 15%,
as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The funds intend to designate the maximum amount allowable as taxed at a maximum
rate of 15%. Complete information will be reported in conjunction with your 2003
Form 1099-DIV.
For the tax year ended June 30, 2003, 7.06% of income dividends paid by the
Citizens Balanced Fund qualify for the dividends received deduction available to
corporations.
The Funds' Trustees and Officers A Board of Trustees oversees and monitors the
management of the Trust. These oversight responsibilities include selection of
the investment adviser and election of officers, who are in turn responsible for
the day to day operations of the Trust. The tables below show the Trustees and
officers of Citizens Funds as of June 30, 2003. The Trustees in the first table
(Interested Trustees) are considered interested persons under the 1940 Act,
because they have an affiliation with the funds' Adviser or Distributor.
The Trustees in the second table (Independent Trustees) are not considered
interested persons and have no affiliation with the funds' Adviser or
Distributor. The third table lists fund officers who are not Trustees. All of
these officers are considered interested persons.
The term of office for each Trustee is eight years, except that Sophia Collier
has an open-ended term. Each Trustee is a Trustee for ten funds within the
Citizens Funds complex, and no Trustee is currently a trustee or director for
any other mutual fund or company, except Mitchell A. Johnson, who is a
trustee/director of three funds at FBR Funds and a director of the Federal
Agricultural Mortgage Corporation. Except as noted below, the address for each
Trustee and officer in connection with their fund duties is 230 Commerce Way,
Portsmouth, NH 03801.
AFFILIATED TRUSTEES
Position(s) with Funds and Date of Principal Occupation(s) During
Name and Age Election or Appointment Past 5 Years
Sophia Collier(1) Trustee since 10/91 Portfolio Manager, Citizens Funds,
46 years President 1991-1998 and since 8/02 since 3/95. Majority Owner and
Chair of the Board of Directors,
Citizens Advisers, Inc., since
12/91. President, Citizens
Advisers, Inc., 12/91 - 9/98 and
since 7/02. Chair of the Board of
Directors, Northpoint Technology,
Ltd., since 1/97.
Mitchell A. Johnson(1) Trustee 12/97 - 8/01 and since 11/02 President, MAJ Capital Management
60 years Trustee Emeritus 8/01 -11/02 (personal investments), since
8/94. Senior Vice President,
Corporate Finance, Student Loan
Marketing Association, 5/73 - 8/94.
56
SUPPLEMENTAL INFORMATION (UNAUDITED)
INDEPENDENT TRUSTEES
Position(s) with Funds and Date of Principal Occupation(s) During
Name and Age Election or Appointment Past 5 Years
Judy Belk Trustee since 5/01 Vice President & Senior Advisor,
50 years Rockefeller Philanthropy Advisors,
since 2/03. Senior Advisor and
Consultant to Philanthropic and
Non-Profit Organizations, 11/00-1/03.
Vice President, Global Public Affairs,
Levi Strauss & Co., 6/90-6/00.
Walter D. Bristol, Jr. Trustee since 5/01 Executive Vice President for
53 years Vice Chair of the Board since 8/02 Corporate Operations and Chief
Financial Officer, American Heart
Association, since 5/96.
Jeannie H. Diefenderfer Trustee since 5/01 Vice President, Verizon, since
42 years 8/02. Group President, Verizon,
8/01-7/02. Senior Vice
President, Verizon, 5/98-7/01.
Executive Director, Verizon,
2/96-4/98.
Pablo S. Eisenberg Trustee since 12/99 Senior Fellow, Public Policy
71 years Institute, Georgetown University,
since 1/99. Executive Director,
Center for Community Change,
5/75-6/98.
Orlando Hernandez Trustee since 8/01 Vice President of Finance,Texas
56 years Instruments, 5/76-4/01.
Martha S. Pope Trustee since 12/99 Trustee, National Park Foundation,
58 years Chair of the Board since 8/02 since 8/00. Trustee, Hofstra
University, since 6/00. Senior
Advisor for the Northern Ireland
Peace Negotiations, 1/95-7/98.
OFFICERS WHO ARE NOT TRUSTEES
Position(s) with Funds and Date of Principal Occupation(s) During
Name and Age Election or Appointment Past 5 Years
Sean P. Driscoll Treasurer since 3/99 Senior Vice President, Citizens
38 years Advisers, Inc, since 4/03. Vice
President, Citizens Advisers, Inc.,
10/99-4/03. Director, Citizens
Advisers, Inc., 11/98-10/99. Director, Fund
Administration, State Street Bank
and Trust Company, 3/98-11/98.
Marcia Kovalik Secretary since 5/03 Vice President, Citizens Advisers,
40 years Asst. Secretary 5/01-5/03 Inc., since 4/03. Counsel, Citizens
Advisers, Inc., 2/01-4/03.
Associate, Boynton, Waldron,
Doleac, Woodman
& Scott, P.A., 9/95-2/01.
Alaina Metz(2) Asst. Secretary since 2/01 Chief Administrative Officer,
35 years BISYS Fund Services Ohio, Inc.,
since 6/95.
James Darden Rives Asst. Treasurer since 5/03 Controller, Finance and
50 years Accounting, Citizens Advisers,
Inc., since 5/03.
Controller, Video Network
Communications, Inc., 4/97-4/03.
(1) Sophia Collier and each officer listed as an interested person of the funds,
is interested by virtue of their position or affiliation with the funds'
investment adviser. Mitchell A. Johnson is considered an interested person as a
result of a business relationship with Northpoint Technology, Inc., of which
Sophia Collier is Chair of the Board of Directors.
(2) Address: BISYS Fund Services, 3435 Stelzer Road, Columbus, OH 43219
The funds' Statement of Additional Information includes additional information
about the Trustees and officers and is available, without charge, by calling
800.223.7010.
57
[LOGO] CITIZENS FUNDS (R)
Fundamentally Strong. Socially Responsible.
Trustees
Judy Belk
Walter D. Bristol, Jr.
Sophia Collier
Jeannie H. Diefenderfer
Pablo S. Eisenberg
Orlando Hernandez
Mitchell A. Johnson
Martha S. Pope
Distributor
Citizens Securities, Inc.
230 Commerce Way
Portsmouth, NH 03801
800.223.7010
603.436.5152
Manager
Citizens Advisers, Inc.
230 Commerce Way
Portsmouth, NH 03801
800.223.7010
603.436.5152
Custodian
Fifth Third Bank
Cincinnati, OH 45263
Transfer and
Accounting Agent
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, OH 43219
Legal Counsel
Bingham McCutchen LLP
Boston, MA 02110
Independent Auditors
PricewaterhouseCoopers LLP
Columbus, OH 43215
At Citizens Funds, we want our investors to know how much we value their
business. That's why we offer a comprehensive range of services that includes
everything from attentive telephone representatives to an informative web site.
Exchanges Between
Citizens Funds
You can move your money easily from any one of our funds to another.
Individual Retirement
Plans (IRA)
We offer investors the opportunity to invest in a variety of IRAs, including
Traditional, Roth and Rollover. Citizens Funds are also available for 401(k),
403(b), SEP and SIMPLE retirement plans.
Automatic Investment Plan
Invest automatically on a monthly or quarterly basis with payroll deduction or
electronic transfer from your bank.
Unparalleled Customer
Service
Our representatives are welltrained professionals whose goal is to satisfy most
requests during the first phone call.
Representatives are available from 9 A.M. to 6 P.M. (ET) Monday - Friday at
800.223.7010.
www.citizensfunds.com
Our web site offers daily fund prices and performance, fund and manager
profiles, fund prospectuses and applications, shareholder activism updates,
online account access and transactions and much more.
Intelligent Communications
Citizens Funds was a pioneer of the plain English prospectus well before it
became the standard for the rest of the mutual fund industry. We try to bring
that same spirit of innovation, plain-speak and respect for our shareholders to
all our communications.
Proxy Voting
A description of the policies and procedures that the funds use to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, by calling 800.223.7010, on the funds' website, and on the SEC's
website at http://www.sec.gov.
- --------------------------------------------------------------------------------
Citizens Funds are distributed by Citizens Securities, Inc., Portsmouth, NH
03801 and are available through such popular mutual fund supermarkets as Charles
Schwab's Mutual Fund OneSource(R) and Fidelity Investments' FundsNetwork(R).
Citizens Funds(R)is a trademark of Citizens Advisers, Inc.
This report is intended for shareholders of Citizens Funds and is not authorized
for distribution to other persons unless accompanied or preceded by a
prospectus. Please call 800.223.7010 for a prospectus that contains complete
details of fees and expenses and should be read carefully before investing.
Printed on recycled paper with soy-based inks. AR 8/03