-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HvK2YGpmFAbh3Btc+ImOOD2fUV6/+TTnS3QFe0n8yHmjdbbUYYHbXpflHx53TKVn dxRi5+NQKh1M4KOYE2F/bA== 0000950135-06-001417.txt : 20060306 0000950135-06-001417.hdr.sgml : 20060306 20060306145329 ACCESSION NUMBER: 0000950135-06-001417 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060306 DATE AS OF CHANGE: 20060306 EFFECTIVENESS DATE: 20060306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS FUNDS CENTRAL INDEX KEY: 0000711202 IRS NUMBER: 942874420 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03626 FILM NUMBER: 06666957 BUSINESS ADDRESS: STREET 1: ONE HARBOUR PLACE STREET 2: SUITE 400 CITY: PORTSMOUTH STATE: NH ZIP: 03801 BUSINESS PHONE: 6034365152 MAIL ADDRESS: STREET 1: ONE HARBOUR PLACE STREET 2: SUITE 400 CITY: PORTSMOUTH STATE: NH ZIP: 03801 FORMER COMPANY: FORMER CONFORMED NAME: CITIZENS INVESTMENT TRUST DATE OF NAME CHANGE: 19951106 FORMER COMPANY: FORMER CONFORMED NAME: WORKING ASSETS COMMON HOLDINGS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: WORKING ASSETS MONEY FUND DATE OF NAME CHANGE: 19920531 0000711202 S000009286 Citizens Value Fund C000025348 Standard MYPVX 0000711202 S000009287 Citizens Core Growth C000025349 Standard WAIDX C000025350 Institutional WINIX C000025351 Administrative CGADX 0000711202 S000009288 Citizens Emerging Growth C000025352 Standard WAEGX C000025353 Institutional CEGIX C000025354 Administrative CGRDX 0000711202 S000009289 Citizens Small Cap Core Growth C000025355 Standard CSCSX 0000711202 S000009290 Citizens Global Equity C000025356 Standard WAGEX C000025357 Institutional CGEIX C000025358 Administrative CEADX 0000711202 S000009291 Citizens Income Fund C000025359 Standard WAIMX 0000711202 S000009292 Citizens Money Market C000025360 Standard WKAXX C000025361 Institutional WAIXX 0000711202 S000009293 Citizens Balanced Fund C000025362 Standard CFBLX 0000711202 S000009294 Citizens 300 Fund C000025363 Standard CFCDX N-CSRS 1 b58753ncnvcsrs.txt CITIZENS FUNDS As filed with the Securities and Exchange Commission on March 6, 2006 File No. 811-03626 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANY CITIZENS FUNDS (Exact Name of Registrant as Specified in Charter) One Harbour Place, Suite 400, Portsmouth, New Hampshire 03801 (Address of Principal Executive Offices) Registrant's Telephone Number, including Area Code: (603) 436-5152 June 30 (Date of fiscal year end) December 31, 2005 (Date of reporting period) ITEM 1. REPORT TO SHAREHOLDERS. [CITIZENS FUNDS LOGO] ----------------------- 2006 SEMI-ANNUAL REPORT ----------------------- AND SUPPLEMENTAL COMMENTARY [PICTURE] NOT A PART OF THE SEMI-ANNUAL REPORT 12.31.05 TABLE OF CONTENTS SUPPLEMENTAL COMMENTARY
Letter from the president 1 Citizens focus: Environmental issues take center stage 3 Market overview 7 SEMI-ANNUAL REPORT Risks of mutual fund investing 9 Benchmarks 10 Portfolio review 12 Portfolio composition 38 Holdings 40 Statements of assets and liabilities 64 Statements of operations 66 Statements of changes in net assets 68 Financial highlights 72 Financial notes 80 Supplemental information 89 Shareholder services 92
PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF CITIZENS FUNDS CAREFULLY BEFORE INVESTING. FOR THIS AND OTHER INFORMATION, PLEASE VISIT WWW.CITIZENSFUNDS.COM OR CALL 800.223.7010 FOR A FREE PROSPECTUS AND READ IT CAREFULLY BEFORE INVESTING. NOT A PART OF THE SEMI-ANNUAL REPORT LETTER FROM THE PRESIDENT Dear Shareholder, I am pleased to report that Citizens Funds had an excellent year in 2005. Our in-house, actively managed equity funds delivered strong positive returns, beating their primary benchmarks and a significant number of their respective peers. For the calendar year ended December 31, 2005 the total return for the S&P 500 Index was 4.91%, while our own Citizens Core Growth Fund standard shares returned 9.63%. The more aggressive Citizens Emerging Growth Fund standard shares achieved a total return of 12.19% for the same period. These returns and the positive performance of many of our other funds are further evidence that our significant investment in people, technology and investment data resources, are bearing fruit for our shareholders. It is worth noting that in 2005, the Dow Jones Industrial Average (DJIA) was basically flat, down -0.32% for the year. While on the surface this might suggest a relatively dull year for the market, we believe the figure hides dramatic activity underneath. Among the 30 stocks making up the DJIA, there were some enormous winners and some huge losers. For instance, Hewlett Packard's stock rallied over 38% while General Motors' stock fell 46% for the 2005 calendar year. In my opinion, this is a sign of powerful changes in our world. It is my observation that some of today's familiar household names seem to be in long periods of decline. At the same time, other companies, products and even countries are rising rapidly. Given the pace of technological change and the forces of globalization, I believe we are likely to see many more years where stock market averages hide the wide variance in individual stock returns. (CONTINUED) "I AM PLEASED TO REPORT THAT CITIZENS FUNDS HAD AN EXCELLENT YEAR IN 2005. OUR IN-HOUSE, ACTIVELY MANAGED EQUITY FUNDS DELIVERED STRONG POSITIVE RETURNS, BEATING THEIR PRIMARY BENCHMARKS AND A SIGNIFICANT NUMBER OF THEIR RESPECTIVE PEERS." - Sophia Collier, President [PHOTO] 1 NOT A PART OF THE SEMI-ANNUAL REPORT Citizens has sought to build an investment management team with the skills and resources to actively distinguish between tomorrow's winners and losers. Part of our strategy included the decision several years ago to more fully integrate our social and financial analysis to help ensure we have a more complete view of the companies we consider. We are one of the few investment management companies that have in-house social research and in-house investment management teams working together in an integrated process. We believe this gives us important insights into companies and helps us make better investment decisions. In my opinion, the time has passed when investors can simply put all of their assets in markets with the confidence that a "rising tide will lift all boats." The world is actively being remade and it is essential to find stocks where we believe value is being created, and avoid areas that are stale or declining. In 2006, Citizens will continue to seek strong returns for shareholders by emphasizing companies that we believe demonstrate a high level of environmental and social responsibility, and in our opinion, have the potential for strong financial results. Sincerely yours, /s/ Sophia Collier - ------------------ Sophia Collier President See pages 9 - 11 for important fund risks and benchmark and other disclosures. In considering performance of the funds for the six and twelve month periods, you should also consider the funds' longer term track records described elsewhere in this report. Of course, data presented reflects past performance which does not guarantee future results. NOT A PART OF THE SEMI-ANNUAL REPORT 2 CITIZENS FOCUS ENVIRONMENTAL ISSUES TAKE CENTER STAGE A company's disclosure of social and environmental risks helps in our assessment of investment risk associated with that company's stock. The data found in these reports is often a good indicator of a company's level of commitment in seeking to improve social and environmental performance. Our social research analysts use company disclosures to evaluate the effectiveness of social and environmental programs as a whole and to compare company performance against their industry peers. We believe evaluating a company's record of corporate responsibility helps us minimize investment risk and contributes to investment success by identifying more forward-thinking and potentially more promising companies. During the past few years, we have seen dramatic improvement in the disclosure of social and environmental risks. Intel, Hewlett-Packard and other companies held in Citizens Funds have been leaders in reporting such risks in their corporate citizenship reports. Citizens has been active in this area, meeting with companies in an effort to discus the content and quality of their social and environmental risk disclosure. In August, members of Citizens' social research team, along with other socially responsible investors, met with members of Intel's Corporate Responsibility team to discuss the content of the company's new Global Citizenship Report. Meetings like this one help companies understand what information we find most useful, and help us understand the challenges companies face when preparing such reports. (CONTINUED) "WE BELIEVE EVALUATING A COMPANY'S RECORD OF CORPORATE RESPONSIBILITY HELPS US MINIMIZE INVESTMENT RISK AND CONTRIBUTES TO INVESTMENT SUCCESS BY IDENTIFYING MORE FORWARD-THINKING AND POTENTIALLY MORE PROMISING COMPANIES." - Joanne Dowdell, VP of Corporate Responsibility [PHOTO] 3 NOT A PART OF THE SEMI-ANNUAL REPORT In September, Citizens met with Steven Farris, CEO of oil and gas exploration company Apache Corporation, in New York City to discuss the company's efforts to reduce greenhouse gas emissions, as well as the risks and opportunities regulating carbon emissions may pose for the company. We are encouraged by the company's willingness to engage in dialog with shareholders and are pleased to report Apache unveiled a new climate change section on its website in December. This reflects a positive shift in the company's approach to greenhouse gas emissions since we first began our discussions with the firm several months ago. The site states that Apache "shares the widespread concern that the emission of greenhouse gases is leading to changes in global climate." The company reports that greenhouse gas emissions data will be added to the new climate change section in 2006. In November, Citizens co-filed a shareholder resolution at SBC Communications, now known as AT&T. The resolution asks AT&T to issue a sustainability report using the Global Reporting Initiative as a guide for the disclosure of the company's social and environmental impacts, enabling analysts to better compare the company to its peers. The decision to file the resolution came after we completed an analysis of the company and determined AT&T's sustainability reporting was lacking compared to other companies in its peer group. AT&T has not yet responded to the proposal. TOXICS IN CONSUMER PRODUCTS -- A GROWING CONCERN Continuing its activism in the cosmetics industry, Citizens was lead filer of a resolution at Johnson & Johnson, and co-filer of a resolution at CVS, requesting the companies report on the feasibility of reformulating their cosmetic products to meet a European Union (EU) cosmetic directive -- currently the highest standard for consumer safety in the cosmetics industry. Johnson & Johnson later agreed to work with SRI investors and other stakeholders toward greater transparency and safer products. Based on those commitments we withdrew the resolution. Management at CVS has sent a letter of opposition to our proposal. We hope to update you on the status of this proposal in our Q1 2006 Shareholder Activism Report. In October, Citizens' Social Research Analyst Dr. Vesela Veleva published results of her regulatory review and analysis of toxics in cosmetics in Corporate Environmental Strategy (Issues 3 & 4, 2005). The article, entitled New EU Rules for the Cosmetics Industry: What Do They Mean for U.S. Companies and Stakeholders? examines and compares EU legislation and existing U.S. NOT A PART OF THE SEMI-ANNUAL REPORT 4 regulations for the cosmetic industry. Recent EU legislation bans over 1,000 dangerous chemicals in cosmetic products, while less than two dozen chemicals are restricted or banned for use in cosmetics products in the U.S. For a copy of the article go to our website at www.citizensfunds.com. The issue of toxics in consumer products has broad implications for human health and safety and the companies that manufacture such products. Citizens Funds has joined with other SRI funds and non-governmental organizations to encourage proxy voting agent, Institutional Shareholder Services, to revise its voting guidelines to include the topic of toxic chemicals in a company's products. The issue raised sufficient concern for Citizens that we adopted new proxy voting guidelines for the Funds in 2005. We support proposals asking companies to phase out specific toxic chemicals where safe alternatives are available. We also support proposals that ask companies to reformulate products globally. We believe failure to heed regulations and scientific research regarding the use of toxic chemicals may lead to market exclusion or lawsuits regarding product safety, all of which may hurt shareholder value. IS THERE A RELATIONSHIP BETWEEN GENDER AND FINANCIAL PERFORMANCE? [PHOTO] Citizens' social research team conducted a gender diversity study, which looked at the number of women on the board and in the upper management of companies in the Citizens Index. Results of the study, lead by Dr. Vesela Veleva, did indeed show a correlation between female representation on the board and in upper management and the total and average annual return of a company's stock. Results of the study show that companies with the highest percentage of gender diversity on the board and in upper management had approximately a 3% higher annual return, compared to those of companies with the lowest percentage of gender diversity for each of the 1-year and 3-year periods ended December 29, 2004. The December 2005 issue of Women's Business Boston published the preliminary results of the study. For a copy of the full article, go to our website at www.citizensfunds.com. 5 NOT A PART OF THE SEMI-ANNUAL REPORT DISCRIMINATION In November, and for the second year in a row, Citizens co-filed a shareholder resolution at YUM! Brands, the largest fast food company in the world, requesting the company to prepare a report addressing concerns about the company's treatment of employees and customers. The company's Taco Bell Corp. subsidiary has come under fire, and has been sued on more than one occasion for not making modifications necessary for its restaurants to be accessible by customers using wheelchairs or scooters. The United States District Court certified the most recent case against the company filed in California as a statewide class action. Our shareholder resolution calls for the company to provide a report that gives shareholders information regarding the status of the class action case. YUM! Brands has not yet responded to the proposal. The same proposal last year garnered 32.9% of the vote and if the proposal is included in the company's proxy statement again this year, we are hopeful for an even better result. LOOKING AHEAD We anticipate quite a bit of activity during the 2006 proxy voting season. Early indications suggest that environmental issues will once again lead the way in the number of shareholder proposals filed at companies, including toxic use reduction and climate change related proposals. Two corporate governance issues we will pay special attention to during the year are political contributions and executive compensation. The former has long been a hook used during election season to garner votes. Research that came out of The Center for Political Accountability more than three years ago revealed the risks to shareholders of companies not fully disclosing and, in some cases of not being fully aware of where contributions ultimately land. We believe shareholders have a right to know how such monies are being distributed and we will be more active on this issue in 2006. Socially responsible investors are no strangers to the issues and concerns of executive compensation. The SEC's recent vote to require companies to enhance their disclosure of executive pay further illustrates the need for companies to be more transparent. The proposed new rule, while not intended to reduce compensation, will certainly bring more pressure to bear on boards of directors to be more diligent. NOT A PART OF THE SEMI-ANNUAL REPORT 6 MARKET OVERVIEW While the economy continued to grow strongly, the stock market posted a modest 5.77% return as measured by the S&P 500 Index for the six months ended December 31, 2005. Why only modest gains? Three primary factors: increasing concern over consumer spending, long-term interest rates, and uncertainty. [300] Consumer spending, in our opinion, is a major driver of our economy's growth and we, as consumers, continue to purchase more and more and save less and less. In fact, the average savings rate of a U.S. citizen was -0.2 of disposable personal income as of December 31, 2005, and has been negative for over six months. We believe this indicates people are buying goods and services with the equity in their homes, personal savings and gains from investments, rather than their personal income. How long consumer spending can continue this way is an important question. We believe people need to increase their savings and in our opinion, that will mean eventually deferring spending or buying less. We believe, when this happens, the economy will slow. For the third quarter of 2005 consumer spending helped drive growth in Gross Domestic Product (GDP), a key measure of our economic health, to 4.1%. However, in the fourth quarter ended December 31, 2005, consumer spending slowed, contributing to a slower rate of growth for GDP at an estimated annual rate of 1.1%, according to the Bureau of Economic Analysis. We believe growth rates will continue to be impacted by a slowdown in consumer spending. The Federal Reserve increased the fed funds rate, the rate banks charge each other for short term borrowing, four times during the six months ended December 31, 2005. But, we believe short term rate increases had (CONTINUED) "WE FIND THIS TYPE OF MARKET PLACES A PREMIUM ON OUR STYLE OF ACTIVE INVESTMENT MANAGEMENT." - Jonathan White, CFA, Chief Market Stategist [PHOTO] 7 NOT A PART OF THE SEMI-ANNUAL REPORT very little effect on market performance or economic growth. In past years, our economy seemed to respond very quickly to such increases. That was when manufacturing represented about 40% of our economy, while today manufacturing is just 15%. With the advent of advanced inventory management technology, short term interest rates, in our opinion, have less of an affect on inventory financing and less affect on the market and the economy. Long term interest rates on the other hand do affect the market more readily, both directly as an investment alternative and indirectly through the cost of capital spending programs. However, ten year treasury notes have been fluctuating in a range between just under 4.0% and 4.6% for the last two years. In our view, long term rates remaining stable and relatively low for so long demonstrates that interest rates had little effect on continued economic growth and stock market performance. A hindrance to greater growth and market performance, in our opinion, was the climate of uncertainty and fear that we believe colored expectations for future company earnings, consumer spending and interest rates. The number of soldiers killed in Iraq reached 2,000 during the last months of the calendar year. The aftermath of the Katrina and Rita hurricane disasters created questions about their effect on the economy Energy prices skyrocketed and then declined almost as quickly, and the appointment of a new Federal Reserve chairman, Ben Bernanke, fueled further uncertainty with respect to interest rates in our opinion. In summary, we believe consumer spending drove the economy, increased short term interest rates had little effect, and a cloud of fear and uncertainty tempered the market making for a modest return of 5.77% the S&P 500 Index for the six month period ended December 31, 2005. By capitalization, mid cap stocks especially outperformed within the domestic market with the Russell Midcap Growth Index up 10.22% for the six month period. OUTLOOK With an economy expected to grow, albeit at a slower rate, and challenged with a growing trade deficit and over-extended consumers, it is most likely we will see the market stay within a narrow trading range in 2006. We find this type of market places a premium on our style of active investment management. In our opinion, finding good companies to invest in requires careful attention to company fundamentals, progressive environmental and social practices, industry trends, and merger and acquisition activity NOT A PART OF THE SEMI-ANNUAL REPORT 8 RISKS OF MUTUAL FUND INVESTING As with any fund that invests in stocks or fixed-income securities, the value of your investment will fluctuate in response to individual company actions, as well as general economic, political and market conditions. Reactions to these factors may differ among various stock types, and investments in specific funds may present unique risks -- and benefits -- given the nature of their focus. Many of these risks are discussed below and additional information on risks may also be found in the Citizens Funds prospectus. GROWTH INVESTING RISKS Growth stocks may be especially volatile, because their prices are largely based on estimates of future earnings. VALUE INVESTING RISKS Value stocks may fall or remain flat if certain conditions or investor perceptions do not change as expected, or if the companies prove not to be underpriced. SMALL- AND MEDIUM-SIZED COMPANY RISKS Small- and medium-sized companies pose unique investment risks as they may have less seasoned management, limited product lines, financing and market share challenges, and shares that trade with more volatility, less frequently or in smaller volumes. INDEX-RELATED RISKS The performance of the Citizens 300 Fund may deviate from that of the Citizens Index due to factors such as fund fees and expenses and the fund's holdings differing from that of the index. FOREIGN INVESTING RISKS Foreign markets pose unique investment risks, including political instability and currency risks, excessive taxation, different financial and auditing standards, increased market volatility and other factors. FIXED-INCOME INVESTING RISKS Interest rate increases can cause the value of bonds to decrease, meaning that a bond fund investment may lose value in a rising interest rate environment. There is also the chance that some of the fund's holdings will have their credit ratings down-graded or may default, potentially reducing the fund's income level and share price. 9 HIGH-YIELD SECURITY RISKS High-yield securities (so-called "junk bonds") offer the potential for higher returns but present significant volatility and risk of loss of principal and interest. MONEY MARKET RISKS Investments in the Citizens Money Market Fund are not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. BENCHMARKS When evaluating performance of any investment, it is useful to look at both absolute and relative return. In other words, how much did the fund generate or lose for shareholders in the reporting period, and how did that performance compare to the fund's benchmark? Below is a brief description of the benchmarks we use. Please keep in mind that these benchmark indices are unmanaged, meaning you cannot invest directly in them, and their performance does not reflect the impact of fees and expenses that apply to our funds. The S&P 500 INDEX includes a representative sample of 500 leading companies in the U.S. economy, focused on the large cap segment of the U.S. equity universe. The S&P 400 MIDCAP INDEX includes a representative sample of 400 leading companies in the U.S. economy, focused on the small -- mid cap segment of the U.S. equity universe. The RUSSELL 1000 GROWTH INDEX measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Index covers the large-cap segment of the U.S. equity universe. The RUSSELL MIDCAP GROWTH INDEX measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The Russell Midcap Index covers the mid cap segment of the U.S. equity universe; it includes the smallest 800 securities in the Russell 1000 Index. 10 The RUSSELL 2000 GROWTH INDEX measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index covers the small cap segment of the U.S. equity universe. The MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD INDEX is a market capitalization-weighted equity index of over 1,500 stocks traded in 23 world markets. The LEHMAN BROTHERS U.S. AGGREGATE INDEX is comprised of taxable, investment grade fixed income securities, including government, corporate, mortgage and asset-backed securities. The BLENDED INDEX is comprised of 60% S&P 500 Index and 40% Lehman Brothers U.S. Aggregate Index. The CITIZENS INDEX consists of 300 mostly U.S. companies that meet Citizens Advisers' financial and social criteria. The Citizens 300 Fund seeks to replicate the composition and performance of the Citizens Index. The DOW JONES INDUSTRIAL AVERAGE (DJIA), comprised of 30 companies, serves as a measure of the U.S. market, covering diverse industries including financial services, technology, retail, entertainment and consumer goods. 11 CITIZENS 300 FUND [PHOTO] "WE BELIEVE EXPANSION WILL CONTINUE, THOUGH AT DECREASING RATES AS A RESULT OF THE CURRENT ECONOMIC ENVIRONMENT." PORTFOLIO MANAGER Sophia Collier INVESTMENT GOAL Long-term capital appreciation INVESTMENT STRATEGY Invests mainly in stocks and other equities of U.S. large capitalization companies INCEPTION DATE Standard shares 8.29.03 RISKS Growth, value and index-related investing (See pages 9 - 11 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW HOW DID WE DO? The Citizens 300 Fund returned 5.28% versus the benchmark S&P 500 Index return of 5.77% for the six months ended December 31, 2005. Among the sectors delivering strong returns for the fund were energy, industrials, financials and materials. Relative to the benchmark, the fund's holdings within the consumer discretionary sector had superior price appreciation for the period. The fund also benefited from the strong performance of the fund's energy names. Meanwhile, an underweight of the information technology sector within the fund compared to the benchmark magnified the underperformance of the fund's holdings in the sector. Telecommunication services was the only sector that declined in both the benchmark and the fund for the six month period. The under-represen- tation of industrial material stocks CITIZENS 300 FUND 12 CITIZENS 300 FUND PERFORMANCE (as of 12.31.05)
TOTAL RETURN AVERAGE ANNUAL RETURN Ticker 6 1 Since Share class symbol months year inception - -------------------------------------------------------------------------------------------- STANDARD SHARES CFCDX 5.28% 2.46% 8.01%
Data presented reflects past performance of the fund, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month-end may be obtained online at www.citizensfunds.com. Fee waivers are currently in effect and have been instituted in the past to maintain expense limits, without which returns would have been lower. Investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures assume reinvestment of dividends and distributions but do not reflect the deduction of taxes you would pay on fund distributions or redemptions of fund shares. in the fund relative to the benchmark, caused in part by fewer companies that meet our social responsibility standards, was a further detraction from fund performance during the period. Our holdings within the consumer discretionary sector contributed to positive fund performance for the period. Within the consumer discretionary sector of the fund, the returns for both eBay stock and McDonalds' stock contributed significantly to fund performance. eBay's stock returned nearly 30.53% during the six month period, while McDonalds' stock returned over 21.18% during the same period. Within the energy sector of the fund, Burlington Resources' stock returned 54.20% over the six months with the help of a takeover bid from ConocoPhillips, while shares of Valero returned nearly 29.98% for the same period. Within the underperforming sector of information technology, a stellar performance by Apple Computer, whose stock price nearly doubled during the period, was not sufficient to offset the performance of the stocks of tech bellwethers Dell, Cisco, Intel, and Oracle; each of which experienced declines during the last six months of the year. The fund and the underlying Citizens Index saw several minor changes to a number of their holdings during the last six months of the calendar year, reflecting the mergers and acquisitions environment and other corporate restructurings. Sprint completed its acquisition of Nextel, Procter & 13 CITIZENS 300 FUND Gamble completed its acquisition of Gillette and SBC became AT&T as the merger of the two telecom companies was finalized. Additionally, Ameriprise Financial was created with American Express' spin off of its financial planning business, and Fidelity National Financial partially spun off its title insurance business, Fidelity National Title Group. OUTLOOK We believe earnings growth will remain positive, but increasing costs of energy and capital will dampen the acceleration of growth. We believe expansion will continue, though at decreasing rates as a result of the current economic environment. CITIZENS 300 FUND 14 CITIZENS CORE GROWTH FUND CORE GROWTH [PHOTO] "EXPRESS SCRIPTS, INC. WAS ONE OF THE TOP PERFORMING STOCKS IN THE PORTFOLIO FOR THE SIX MONTHS ENDED DECEMBER 31, 2005. THE STOCK RETURNED 51.79% DURING THE PERIOD." PORTFOLIO MANAGER Jonathan White, CFA INVESTMENT GOAL Long term capital appreciation INVESTMENT STRATEGY Invests mainly in stocks of U.S. large capitalization companies INCEPTION DATES Standard shares 3.03.95 Institutional shares 1.25.96 Administrative shares 2.04.00 RISKS Growth investing (See pages 9 - 11 for important fund risk and benchmark disclosure) [CORE GROWTH] PORTFOLIO REVIEW HOW DID WE DO? For the six month period ended December 31, 2005, the Core Growth Fund standard shares returned 7.96% as compared with a 5.77% total return for the S&P 500 Index and a 7.11% total return for the Russell 1000 Growth Index. The fund maintained a healthy 10% position in energy stocks during the six month period -- modestly overweight compared with the S&P 500 Index and significantly overweight when compared to the Russell 1000 Growth Index for the same period. While those staples did very well for us in the third quarter of the calendar year, immediately following the aftermath from hurricanes Katrina and Rita, oil prices fell sharply and the energy stocks we held in the portfolio suffered accordingly. However, some energy stocks did recover somewhat during the last two months of the period. 15 CITIZENS CORE GROWTH FUND CITIZENS CORE GROWTH FUND PERFORMANCE (as of 12.31.05)
TOTAL RETURN AVERAGE ANNUAL RETURN Ticker 6 1 5 10 Since Share class symbol months year years years inception - ---------------------------------------------------------------------------------------------------- STANDARD SHARES WAIDX 7.96% 9.63% -2.93% 7.52% 9.07% INSTITUTIONAL SHARES WINIX 8.33% 10.41% -2.25% NA 8.42% ADMINISTRATIVE SHARES CGADX 8.18% 10.09% -2.54% NA -5.48%
Data presented reflects past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month end may be obtained online at www.citizensfunds.com. Fee waivers have been instituted in the past to maintain expense limits, without which returns would have been lower. Investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures assume reinvestment of dividends and distributions but do not reflect the deduction of taxes you would pay on fund distributions or redemptions of fund shares. Express Scripts, Inc. was one of the top performing stocks in the portfolio for the six months ended December 31, 2005. The stock returned 51.79% during the period. The company provides pharmacy benefit management services that make it more efficient to deliver prescription medicines to consumers. We like the company because their business is providing part of the solution to improved healthcare delivery; it is well managed, and has a record of beating earnings estimates. The company also administers the Express Scripts Foundation that sponsors programs and organizations that promote health issues among teens and families. Another positive contributor to performance this period was Burlington Resources, Inc. The company explores and produces oil and natural gas. The stock was very strong in the third quarter of 2005 as investors weighed the implications of increasingly tight energy supplies. In addition, when measured against other companies in the same industry on issues such as environment, human rights and safety, Burlington Resources did very well in comparison to its peers. The strong performance continued into the fourth quarter, helped by a takeover bid from ConocoPhillips. The worst performing holding for the fund for the last six months of 2005 was Pulte Homes, which we sold during the month of October of 2005, as the housing market showed signs of slowing in the face of rising interest rates and an over-extended consumer. We made modest changes in sector weightings in the portfolio, reducing healthcare to slightly over 10% of the CITIZENS CORE GROWTH FUND 16 portfolio by the end of the period. We also reduced our holdings within the consumer staples and discretionary sectors, including retail stocks, and did take some profits in energy stocks, trimming positions in Apache and Murphy Oil. We added State Street Corp. and Progressive Corporation in the financial sector, raising the overall percentage of financial stocks in the fund to approximately 19% by the end of the period. State Street Corp. added to our exposure in capital markets through investment management and support services while Progressive Corporation has a strong record in property casualty insurance. OUTLOOK Entering 2006, we take a cautious view of the market without being defensive. That means keeping a careful eye on the size of the positions in our portfolio, sticking with what we believe to be better quality companies and remaining well diversified across industry sectors. We will target the fund's sector weightings to track more closely to the S&P 500 Index rather than the more aggressive Russell 1000 Growth Index. We expect to maintain between 60 and 65 names in the fund, in our opinion enough to be diversified while enabling us to keep a close eye on what we own. 17 CITIZENS CORE GROWTH FUND CITIZENS EMERGING GROWTH FUND [PHOTO] "... NO MATTER WHAT THE OVERALL MARKET IS DOING, GENERALLY THERE ARE COMPANIES WHOSE STOCKS ARE PERFORMING WELL, AND OUR INVESTMENT SELECTION PROCESS WILL CONTINUE TO SEEK TO UNCOVER THE POTENTIAL LEADERS." CO-PORTFOLIO MANAGERS J. Michael Gallipo, CFA Jonathan White, CFA INVESTMENT GOAL Aggressive growth INVESTMENT STRATEGY Invests mainly in stocks young, growing, medium capitalization companies INCEPTION DATES Standard shares 2.08.94 Institutional shares 11.01.99 Administrative shares 2.04.00 RISKS Growth investing; small- and medium-sized company risks (See pages 9 - 11 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW HOW DID WE DO? The fund's standard shares returned 10.28% for the last six months of the calendar year ended December 31, 2005. This return was comfortably ahead of the S&P MidCap 400 Index of return of 8.39%, and slightly ahead of the Russell Midcap Growth Index return of 10.22% for the same period. Fund performance for the six month period benefited from our overweight position in stocks within the financial sector, as these stocks rallied during the last quarter of the 2005 calendar year. The outperformance validated our strategy of picking financial stocks that would be influenced by actions of the Federal Reserve. Our stock selection within the information technology sector was a significant contributor to positive fund performance, although the sector was fairly neutral when compared to the CITIZENS EMERGING GROWTH FUND 18 CITIZENS EMERGING GROWTH FUND PERFORMANCE (as of 12.31.05)
TOTAL RETURN AVERAGE ANNUAL RETURN Ticker 6 1 5 10 Since Share class symbol months year years years inception - ---------------------------------------------------------------------------------------------------- STANDARD SHARES WAEGX 10.28% 12.19% -5.25% 9.33% 11.57% INSTITUTIONAL SHARES CEGIX 10.74% 12.98% -4.63% NA -0.21% ADMINISTRATIVE SHARES CGRDX 10.58% 12.70% -4.92% NA -5.14%
[EMERGING GROWTH] Data presented reflects past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month end may be obtained online at www.citizensfunds.com. Fee waivers have been instituted in the past to maintain expense limits, without which returns would have been lower. Investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures assume reinvestment of dividends and distributions but do not reflect the deduction of taxes you would pay on fund distributions or redemptions of fund shares. benchmark for the last six months of the calendar year. Within the information technology sector, Apple Computer, Inc. was a large contributor to positive performance. The company's iPod brand dominance among the portable music players continues, with no real competition to date. On the corporate responsibility forefront, Apple has gone beyond the required environmental regulations, banning a more inclusive list of toxic chemicals from use in its products. Apple also introduced new recycling efforts, such as inviting consumers to bring old iPod units to Apple stores for disposal, in exchange for a 10% discount off a new iPod. The company has very progressive employee benefits, and received a perfect score on the Human Rights Campaigns Corporate Equality Index for 2005. These attributes are aligned with the criteria Citizens looks for when assessing a company for investment -- traditional fundamental analysis and in-depth assessment of select social and environmental factors. The fund's performance for the six month period also benefited from our stock selection of Intuitive Surgical, a healthcare company that specializes in remote surgical technology. This company is a great example of what we look for when considering investments for the fund. The company is a profitable emerging company, in our opinion, with well above average growth and a practical product line. The robotic surgical devices produced by the company are used to reduce trauma to surgical patients and can speed post-surgery recovery time. Competitors that produce similar technology simply do not exist, and we believe the company will continue to do well. 19 CITIZENS EMERGING GROWTH FUND Stocks that detracted from fund performance included Cooper Cos. The company is a maker of contact lenses and surgical products, and cut its earnings forecast in the fourth quarter of 2005, due to a loss in market share for disposable lenses. In our opinion, additional downward pressure was placed on the stock price as a result of a recent acquisition. As a result, we sold off the position in Coopers Cos. Another detractor from performance was the stock of Toll Bros. We sold off the position after the construction company guided down company earnings growth rates for 2006. This information, coupled with our concerns of a possible slow down in the real estate market, led us to the decision to remove the holding from the fund. OUTLOOK Our outlook for 2006 is fairly cautious. However, no matter what the overall market is doing, generally there are companies whose stocks are performing well, and our investment selection process will continue to seek to uncover the potential leaders. We believe the mid cap market is a great place to find more nimble companies that we believe demonstrate a high level of environmental and social responsibility, and in our opinion, have the potential for strong financial results. CITIZENS EMERGING GROWTH FUND 20 CITIZENS SMALL CAP CORE GROWTH FUND [PHOTO] "IN THE SMALL CAP MARKET IN PARTICULAR, WE BELIEVE THERE ARE MANY QUALITY COMPANIES THAT ARE IN DEFENSIBLE NICHES AND, IN OUR OPINION, OFFER GROWTH OPPORTUNITIES." CO-PORTFOLIO MANAGERS John White, CFA J. Michael Gallipo, CFA Sophia Collier INVESTMENT GOAL Capital appreciation INVESTMENT STRATEGY Invests mainly in stocks of small capitalization U.S. companies INCEPTION DATE Standard shares 12.28.99 RISKS Growth risks; small- and medium-sized company risks (See pages 9 - 11 for important fund risk and benchmark disclosure) [SMALL CAP CORE GROWTH] PORTFOLIO REVIEW HOW DID WE DO? For the six months ended December 31, 2005 the fund lagged its benchmark returning 6.09% as compared with 8.02% for the Russell 2000 Growth Index. However for the twelve months ended December 31, 2005, the fund was a stand out winner returning 8.16% versus 4.15% for the Russell 2000 Growth Index. Energy was the top performing sector for the fund, and contributed the most to fund performance for the last six months of the calendar year. The fund was underweight holdings within the financial sector compared to the benchmark for the six month period. However, the stocks we chose within the financial sector provided a much higher return than those within the benchmark. Our largest contributor to fund performance for the period was RPC, 21 CITIZENS SMALL CAP CORE GROWTH FUND CITIZENS SMALL CAP CORE GROWTH FUND PERFORMANCE (as of 12.31.05)
TOTAL RETURN AVERAGE ANNUAL RETURN Ticker 6 1 3 5 Since Share class symbol months year years years inception - ---------------------------------------------------------------------------------------------------- STANDARD SHARES CSCSX 6.09% 8.16% 17.13% 5.45% 3.42%
Data presented reflects past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month end may be obtained online at www.citizensfunds.com. Fee waivers have been instituted in the past to maintain expense limits, without which returns would have been lower. Investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures assume reinvestment of dividends and distributions but do not reflect the deduction of taxes you would pay on fund distributions or redemptions of fund shares. Inc., an oil field service company. RPC, Inc.'s stock returned 133.20% for the period. Despite the inherent risks of significant safety and environment liabilities, the company has successfully managed these risks with no record of significant environmental or safety violations to date. We believe high-energy prices may continue and RPC, Inc. may benefit from increased capital spending. Quality Systems, Inc. was another top contributor to the fund's performance for the six-month period. The company provides software for physicians' offices to help streamline the storage and retrieval of medical records. Quality Systems, Inc. is one of the many healthcare companies providing solutions for a challenged industry. Their stock returned 61.90% for the six months ended December 31, 2005. While the healthcare sector contributed to positive performance for the benchmark for the six month period, our holdings within the healthcare sector of the fund detracted from fund performance. Three out of the four stocks that detracted the most from fund performance were healthcare stocks, including the worst performing stock, Amerigroup, and we exited these three positions by the end of the 2005 calendar year. Amerigroup provides managed care services to Medicaid members. The firm aims to provide lower cost health services and depends on negotiated payments from individual states. Their stock price dropped 54.40% when the company missed earnings projections stemming from higher costs to provide services in a few states. This was the second quarter of missed CITIZENS SMALL CAP CORE GROWTH FUND 22 earnings projections and we sold off the entire position during the third quarter of the calendar year. OUTLOOK We remain cautious on the small cap market. However, in our view, businesses are in good shape having adopted more prudent growth practices in the most recent years. In the small cap market in particular, we believe there are many quality companies that are in defensible niches and, in our opinion, offer growth opportunities. We plan to remain modestly overweight in the energy and industrial sectors relative to the Russell 2000 Growth Index. We also plan to remain diversified across all of the sectors and avoid significant sector bets. 23 CITIZENS SMALL CAP CORE GROWTH FUND CITIZENS VALUE FUND [PHOTO] "WHILE IT IS DIFFICULT TO FORECAST ANY OF THE MARKETS FOR ANY GIVEN PERIOD, WE SEEK TO IDENTIFY THE AREAS WITHIN THE MARKETS THAT ARE GROWING AND WHERE THERE ARE STILL ATTRACTIVE VALUES AND POSITION OUR PORTFOLIO ACCORDINGLY." PORTFOLIO MANAGER Sophia Collier INVESTMENT GOAL Long-term capital appreciation INVESTMENT STRATEGY Invests mainly in stocks and other equities of U.S. large capitalization companies INCEPTION DATE Standard shares 6.13.96 RISKS Value risks (See pages 9 - 11 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW HOW DID WE DO? Citizens Value Fund had a total return of 4.48% for the six months ended December 31, 2005 versus a 5.77% gain for the benchmark S&P 500 Index for the same period. While the fund lagged the benchmark for the period, it outperformed the benchmark with a strong overall gain of 7.93% versus the S&P 500 Index total return of 4.91% for the full twelve months ended December 31, 2005. Some of the fund's big winners in the six months were transportation stocks led by FedEx and Norfolk Southern. Our success with FedEx is a good example of what we are seeking to do with the fund. The stock of FedEx returned 27.46% in the six months ended December 31, 2005, yet it still trades at an attractive discount relative to industry peer, United Parcel Service. CITIZENS VALUE FUND 24 CITIZENS VALUE FUND PERFORMANCE (as of 12.31.05)
TOTAL RETURN AVERAGE ANNUAL RETURN Ticker 6 1 3 5 Since Share class symbol months year years years inception - ---------------------------------------------------------------------------------------------------- STANDARD SHARES MYPVX 4.48% 7.93% 17.09% 1.61% 7.94%
Data presented reflects past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month end may be obtained online at www.citizensfunds.com. Fee waivers have been instituted in the past to maintain expense limits, without which returns would have been lower. Investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures assume reinvestment of dividends and distributions but do not reflect the deduction of taxes you would pay on fund distributions or redemptions of fund shares. For the periods prior to September 24, 2001, performance includes that of the fund's predecessor, the Meyers Pride Value Fund. [VALUE] Like FedEx, UPS is a growing company with world-wide opportunity. But FedEx has been growing more rapidly. We believe the stock of FedEx will benefit as the company grows its profits, but we think the stock will also profit from a gradual increase of its valuation relative to UPS. FedEx has also been working to reduce its environmental impact. With a worldwide fleet of vans, planes and other vehicles, FedEx consumes a lot of energy. The company is installing solar electric systems, such as at its hub at Oakland International Airport. The company has also worked with Environmental Defense, an environmental non-profit organization, to develop a diesel-electric hybrid delivery van, which emits 90% less particulate matter and consumes 57% less fuel per mile than its existing vans. Another company that is typical of our relative value strategy is our largest holding, healthcare provider WellPoint, Inc. WellPoint, Inc. provides health benefits to some 34 million members nationwide. The stock was one of our top five contributors to fund performance, returning approximately 14% for the last six months of the calendar year. The company also communicates the relevance and importance of diversity to its employees by integrating diversity awareness into associate and management training. In January of 2005, the National Association for Female Executives named WellPoint, Inc. to its list of "Top 30 Companies for Female Executives" for the second year in a row. WellPoint, Inc. is growing strongly as a result of its acquisition strategy and we believe the company may do well under the new federal drug benefit plan. 25 CITIZENS VALUE FUND In the last quarter of the calendar year, the fund underperformed the S&P 500 Index due in part to ConocoPhillips, one of the fund's largest positions. ConocoPhillips' stock price declined when it announced its plans to acquire natural gas producer Burlington Resources. While we were disheartened by the immediate market reaction, in our view the acquisition did make sense so we used the price decline to add to our ConocoPhillips position. We still believe that ConocoPhillips remains one of the most attractively valued energy companies within our socially approved universe and we believe the holding will benefit the fund in 2006. In relative terms, the fund's underperformance was the result of what we did not hold as much as what we did hold. During the last six months of the calendar year a number of higher priced "growth" companies like Apple Computer and Starbucks had strong gains. As a fund with a value strategy, we did not hold these growth oriented stocks. We also did not hold some large members of the S&P 500 Index such as Wal-Mart and General Electric. These socially rejected companies underperformed for most of the year, yet rallied modestly in the last three months of the year. This contributed to the fund's outperformance for the year, but also to the relative underperformance in the last six months of the year. OUTLOOK While it is difficult to forecast any of the markets for any given period, we seek to identify the areas within the markets that are growing and where there are still attractive values and position our fund accordingly. For instance, we have brought our high technology weight up to an equal weight position with the benchmark anticipating continued strength in this sector. As always, we will focus on the names that show the best relative value and where we believe there is a catalyst for share price appreciation. CITIZENS VALUE FUND 26 CITIZENS GLOBAL EQUITY FUND [PHOTO] PORTFOLIO MANAGER The fund is managed by a team of portfolio managers at McLean Budden Limited INVESTMENT GOAL Capital appreciation INVESTMENT STRATEGY Invests in promising companies throughout the world INCEPTION DATES Standard shares 2.08.94 Institutional shares 11.01.99 Administrative shares 2.04.00 RISKS Growth and foreign investing (See pages 9 - 11 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW HOW DID WE DO? Despite posting a good nominal return, the fund's standard shares underperformed the benchmark during the last six months of the calendar year ended December 31, 2005 returning 8.95% versus the benchmark MSCI World Index return of 10.25%. After a relatively flat first half of the calendar year 2005, world markets came alive to finish the year on a very positive note. The advance was broad based with the exception of the telecommunication services sector. The material, industrial and financial sectors led the increase for the global markets as gold and copper reached 20-year highs and in general, most precious and base metals rose during the last half of the calendar year. Although up strongly at the start of the 2005 calendar year, the energy sector came off its highs during the third quarter. We believe the decline in the energy sector was the result of unseasonably warm weather acting as a catalyst for the long-awaited decrease in demand. [GLOBAL EQUITY] Japan came into focus after September's decisive election victory allowed Prime Minister Koizumi to continue his government reform efforts. We believe this helped produce a long awaited recovery in confidence that sent the Japanese market surging, led by the 27 CITIZENS GLOBAL EQUITY FUND CITIZENS GLOBAL EQUITY FUND PERFORMANCE (as of 12.31.05)
TOTAL RETURN AVERAGE ANNUAL RETURN Ticker 6 1 5 10 Since Share class symbol months year years years inception - --------------------------------------------------------------------------------------------------- STANDARD SHARES WAGEX 8.95% 7.73% -5.46% 6.64% 6.46% INSTITUTIONAL SHARES CGEIX 9.33% 8.47% -4.87% NA -2.46% ADMINISTRATIVE SHARES CEADX 9.06% 8.06% -5.19% NA -9.06%
Data presented reflects past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month end may be obtained online at www.citizensfunds.com. Fee waivers have been instituted in the past to maintain expense limits, without which returns would have been lower. Investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures assume reinvestment of dividends and distributions but do not reflect the deduction of taxes you would pay on fund distributions or redemptions of fund shares. financial sector. It is our opinion the financial sector within Japanese markets may benefit greatly from the government's continuing reform efforts. Japan's dominant role was attributed to strong performance in the financial, industrial and consumer discretionary sectors. The top performing stocks within the portfolio during the second half of the calendar year were Japanese industrial stock, Komatsu, and Japanese financial stock, Mitsubishi Tokyo UFJ. For the last six months of the calendar year, the fund's performance benefited from the underweight position in the utilities sector relative to the benchmark as the sector declined toward the end of the period. While positive fund performance in the last six months of the calendar year was driven by strong stock selection in the financial and industrial sectors, these factors were not enough to make up for stock selection that detracted from fund performance within the telecommunication services and consumer discretionary sectors for the same period. The overweight position in the healthcare sector also hurt results for the last six months of the calendar year. Currently, information technology (IT) is the most heavily weighted sector in the portfolio relative to the benchmark. After several years of low investment, we believe companies will be investing in their technology CITIZENS GLOBAL EQUITY FUND 28 infrastructures in order to drive internal margin improvements. We believe IT companies will be the net beneficiaries of this spending, and will drive their earnings growth. On a similar theme, as companies try to boost top-line growth, we believe advertising spending will increase, and we added to our holdings in WPP Group plc, a company which operates communications services worldwide. We believe WPP Group plc demonstrates strong fundamentals, and, on the socially responsible side, the company participates in charitable giving to organizations involved in the education of young people -- particularly the disadvantaged. OUTLOOK While the Europe, Australia, and Far East Index (EAFE) returned 14.99%, the total return of the S&P 500 Index was 5.77% for the six months ended December 31, 2005; we believe the benefits of global diversification remain apparent. We believe equity market returns for the next twelve months will be somewhat muted as the headwinds of interest rate increases, higher oil prices, and slower earnings growth keep the upside constrained. We expect that larger capitalization stocks will do better than smaller stocks as the market is expected to worry more about valuations and risk levels. 29 CITIZENS GLOBAL EQUITY FUND CITIZENS BALANCED FUND [PHOTO] "THE FEDERAL OPEN MARKET COMMITTEE ALSO MADE IT CLEAR THAT FUTURE POLICY WILL BE CLOSELY TIED TO ECONOMIC DATA RELEASES. WE CONTINUE TO BELIEVE WE CAN FIND SECURITIES WITHIN THIS ENVIRONMENT THAT WILL BENEFIT THE FUND." PORTFOLIO MANAGER Robert Magan, CFA INVESTMENT GOAL Current income and capital appreciation INVESTMENT STRATEGY Invests in a blend of stocks, bonds and money market securities INCEPTION DATE Standard shares 12.20.02 RISKS Growth and fixed income investing (See pages 9 - 11 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW HOW DID WE DO? The Citizens Balanced Fund returned 6.34% for the six month period ended December 31, 2005, comfortably ahead of the benchmark blended index (consisting of 60% S&P 500 Index and 40% Lehman Brothers U.S. Aggregate Index) results of 3.44% for the same period. The equity portion of the fund ended the last six months of the 2005 calendar year with a total return of approximately 10%, while the S&P 500 Index returned 5.77% for the same period. When compared to the S&P 500 Index, the outperformance of the equity portion of the fund was primarily driven by stock selection. Stock selection within the information technology sector provided significant contribution to total return of the fund, despite the underweight position of the information technology sector within the fund when compared to CITIZENS BALANCED FUND 30 CITIZENS BALANCED FUND PERFORMANCE (as of 12.31.05)
TOTAL RETURN AVERAGE ANNUAL RETURN Ticker 6 1 Since Share class symbol months year inception - ---------------------------------------------------------------------------------------------------- STANDARD SHARES CFBLX 6.34% 8.86% 10.08%
Data presented reflects past performance of the fund, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month end may be obtained online at www.citizensfunds.com. Fee waivers are currently in effect and have been instituted in the past to maintain expense limits, without which returns would have been lower. Investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures assume reinvestment of dividends and distributions but do not reflect the deduction of taxes you would pay on fund distributions or redemptions of fund shares. the S&P 500 Index. One of the holdings within this sector, Apple Computer, Inc. contributed significantly to positive fund performance, as its stock returned 67.78% for the last six months of the year. As the popularity of the iPod portable music player drove the stock price higher, we took our profits and sold off the position in an effort to reduce our exposure to what we believe may be increased volatility that may be introduced at higher price levels. We will continue to monitor the company closely and evaluate whether it is an appropriate investment for our strategy in the future. The stock price of Whole Foods Markets, Inc. returned 28.10% for the six months ended December 31, 2005. This return coupled with the significant weighting of the stock in the portfolio, contributed positively to the total return of the equity portion of the fund. Whole Foods is an industry leader in promoting sustainable and environmentally friendly farming and meat production. The grocer provides a "superior shopping experience" to the mundane task of buying groceries. A large selection of organic foods, pleasant smells and food-tasting opportunities for consumers lends to Whole Foods Markets Inc. broad appeal. [BALANCED] Certain stocks in the fund within the financial sector performed very well as anticipation of the Fed ending their recent pattern of raising interest rates increased optimism. Although financial stocks in the fund performed very well, the fund's underweight position in the financial sector when compared to the S&P 500 Index detracted from performance when the sector rallied towards the end of the six month period. 31 CITIZENS BALANCED FUND For the fixed income market, the Lehman Brothers U.S. Aggregate Index had a - -0.08% return for the six months ended December 31, 2005. During the six month period, the yield on the ten year U.S. treasury note increased to over 4.65%, but by the end of the six month period, the yield fell back to 4.35%, which is more favorable to the market value of longer-duration securities. The combination of an active Fed, healthy economic growth and potential inflation, pressured yields higher, which in turn negatively impacted the prices of fixed income investments. OUTLOOK We believe that the equity markets may continue to slow as the increases to the cost of doing business continue to accelerate and the recent interest rate increases take hold. The Fed raised rates on January 31, 2006 to 4.50% and also indicated that the Federal Open Market Committee (FOMC) left the door open for more rate hikes. The FOMC also made it clear that future policy will be closely tied to economic data releases. We continue to believe we can find securities within this environment that will benefit the fund. CITIZENS BALANCED FUND 32 CITIZENS INCOME FUND [PHOTO] PORTFOLIO MANAGER The fund is managed by a team of portfolio managers at Dwight Asset Management Company INVESTMENT GOAL Current income and monthly dividend payment INVESTMENT STRATEGY Invests in bonds that are diversified across sectors, including U.S. treasury, mortgages, corporate, and asset-backed securities INCEPTION DATE Standard shares 6.10.92 RISKS Fixed-income investing; high-yield security risks (See pages 9 - 11 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW On August 29, 2005 Dwight Asset Management Company assumed management for Citizens Income Fund as the new subadviser. Dwight, a Burlington Vermont based investment firm, is a wholly-owned, independently operated subsidiary of Old Mutual plc, a global financial services company with more than $260 billion in assets under management and world-wide operations in asset management, banking and insurance. The firm's depth of experience gives us confidence that we will benefit from their services. HOW DID WE DO? From the start of the six month period through August 31, 2005, the fund narrowly outperformed the benchmark Lehman Brothers U.S. Aggregate Index by 2 basis points. For the entire six month period ended December 31, 2005, the fund returned -0.32%, 24 basis points less than the -0.08% return of the Lehman Brothers U.S. Aggregate Index. [INCOME] The last six months of the calendar year witnessed noteworthy news events that impacted financial markets. Terrorist bombings in London, the war in Iraq, and the hurricanes that struck the U.S. gulf coast all had a significant impact on consumer confidence and oil prices. In our opinion, despite the 33 CITIZENS INCOME FUND CITIZENS INCOME FUND PERFORMANCE (as of 12.31.05)
TOTAL RETURN AVERAGE ANNUAL RETURN Ticker 6 1 5 10 Since Share class symbol months year years years inception - ---------------------------------------------------------------------------------------------------- STANDARD SHARES WAIMX -0.32% 0.90% 3.56% 4.50% 5.34%
Data presented reflects past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month end may be obtained online at www.citizensfunds.com. Fee waivers have been instituted in the past to maintain expense limits, without which returns would have been lower. Investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures assume reinvestment of dividends and distributions but do not reflect the deduction of taxes you would pay on fund distributions or redemptions of fund shares. immediate volatility caused by these events and the policy uncertainty following the appointment of Ben Bernanke as the next Federal Reserve Chairman, the economy remained quite resilient. For the last six months of the calendar year, the fund's performance benefited from maintaining a lower duration versus the benchmark as interest rates rose across all maturities. The fund's underweight to "spread" sectors (those sectors of the bond market, such as corporate debt obligations, that traditionally have a higher yield than U.S. treasury obligations) relative to the benchmark, helped returns as most spread sectors underperformed comparable duration treasuries. The fund's exposure to below investment grade corporate debt also helped returns as the sector outperformed both treasuries and other investment grade alternatives, for the period. For fixed income markets, the impact of rising interest rates on market values was enough to offset the income earned during the period. Contributing to the fund's underperformance relative to the benchmark was an underweight to certain asset-backed securities for the period, including home equity and auto loans, as these sectors performed well for the benchmark. OUTLOOK Our forecast has been and continues to be that the Fed will raise the fed funds rate to at least 4.75%, and we believe there is a very good chance that they could raise it to 5% before stepping to the sidelines. Our forecast is CITIZENS INCOME FUND 34 based on the belief that the economy will continue to grow above its potential rate during the first half of 2006, and in our opinion, core consumer inflation will creep higher. In our view, in this kind of environment it will be difficult for the Fed to stop tightening without jeopardizing its credibility, particularly given the presence of the new Federal Reserve chairman, Ben Bernanke. In the coming months, we will look for opportunities to add exposure in the fund to the asset-backed sector. We will look for opportunities to profit from what we believe will be an environment with increasing interest rate volatility, and by opportunistically changing our exposure to residential mortgages in the first half of 2006. 35 CITIZENS INCOME FUND CITIZENS MONEY MARKET FUND [PHOTO] "WE BELIEVE THE FED IS FOCUSED ON INFLATION BEING THE GREATEST CONCERN, AND WE FULLY EXPECT THEM TO CONTINUE RAISING SHORT TERM RATES IN 2006." PORTFOLIO MANAGER Robert Magan, CFA INVESTMENT GOAL Current income consistent with safety and liquidity INVESTMENT STRATEGY Invests exclusively in money market instruments INCEPTION DATES Standard shares 8.30.83 Institutional shares 2.01.96 RISKS Money market investing (See pages 9 - 11 for important fund risk and benchmark disclosure) PORTFOLIO REVIEW HOW DID WE DO? The 7-day simple yield on the standard shares of Citizens Money Market Fund rose to 3.20% as of December 31, 2005. The fund recorded a total return of 1.36% for the last six months of the year ended December 31, 2005. Generally, we kept the fund's average days to maturity shorter than our peers due to the rising interest rate environment experienced during the period. This strategy allowed us to take advantage of higher rates sooner than if we had owned longer maturities in the fund, and as investments with lower yields matured, we replaced them with securities that offered higher yields. The Federal Open Market Committee (FOMC) continued its measured pace of increasing the fed funds rate during the period. The result was an increase to the target rate of 4.25% at the end of the six CITIZENS MONEY MARKET FUND 36 CITIZENS MONEY MARKET FUND PERFORMANCE (as of 12.31.05)
TOTAL RETURN AVERAGE ANNUAL RETURN Ticker 6 1 5 10 Since Share class symbol months year years years inception - ---------------------------------------------------------------------------------------------------- STANDARD SHARES WKAXX 1.36% 2.21% 1.46% 2.98% NA INSTITUTIONAL SHARES WAIXX 1.53% 2.57% 1.74% NA 3.39%
Data presented reflects past performance, which is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Performance data current to the most recent month end may be obtained online at www.citizensfunds.com. Fee waivers have been instituted in the past to maintain expense limits, without which returns would have been lower. Investment return and principal value of an investment in the fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Performance figures assume reinvestment of dividends and distributions but do not reflect the deduction of taxes you would pay on fund distributions or redemptions of fund shares. month period. In the FOMC published policy statement that accompanied the 25-basis point increase in the fed funds rate on December 13, 2005, the Fed acknowledged that "economic activity appears solid." Keeping pace with the increasing fed rates were yields on commercial paper and certificates of deposit. OUTLOOK The Fed raised rates when they met on January 31, 2006 and in our view, has left the door open for more rate hikes. Once the Fed signals they have made their last rate increase for this cycle, we will begin to extend our maturity. The FOMC also made it clear that future policy will be closely tied to economic data releases. We believe the Fed is focused on inflation being the greatest concern, and we fully expect them to continue raising short term rates in 2006. We will be monitoring future data releases that indicate the direction and pace of inflation very closely. [MONEY MARKET] 37 CITIZENS MONEY MARKET FUND PORTFOLIO COMPOSITION (UNAUDITED) PORTFOLIO COMPOSITION
PERCENTAGE OF 300 FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Financials 24.2% Information Technology 16.3% Healthcare 14.6% Consumer Discretionary 12.6% Consumer Staples 10.0% Energy 8.7% Industrials 7.7% Telecommunication Services 3.4% Materials 1.4% Utilities 1.1% - ------------------------------------------------------------
PERCENTAGE OF CORE GROWTH FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Financials 18.3% Information Technology 16.1% Healthcare 13.0% Consumer Discretionary 11.2% Industrials 11.1% Energy 10.1% Consumer Staples 6.7% Cash Equivalents 4.6% Utilities 4.3% Telecommunication Services 2.9% Materials 1.7% - ------------------------------------------------------------
PERCENTAGE OF EMERGING GROWTH FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Information Technology 22.4% Consumer Discretionary 20.6% Healthcare 17.7% Financials 10.9% Industrials 9.8% Energy 9.4% Consumer Staples 2.8% Materials 2.3% Cash Equivalents 2.0% Telecommunication Services 1.3% Utilities 0.8% - ------------------------------------------------------------
SMALL CAP PERCENTAGE OF CORE GROWTH FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Information Technology 21.4% Industrials 18.4% Consumer Discretionary 14.0% Healthcare 12.3% Energy 10.9% Financials 9.5% Cash Equivalents 6.3% Materials 5.3% Consumer Staples 1.9% - ------------------------------------------------------------
PERCENTAGE OF VALUE FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Financials 21.1% Information Technology 14.6% Healthcare 13.2% Industrials 11.4% Energy 10.7% Consumer Discretionary 8.5% Consumer Staples 8.0% Materials 3.9% Utilities 3.6% Cash Equivalents 2.9% Telecommunication Services 2.1% - ------------------------------------------------------------
PERCENTAGE OF GLOBAL EQUITY FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Financials 21.6% Information Technology 16.3% Healthcare 12.1% Consumer Discretionary 11.8% Industrials 11.6% Energy 9.0% Consumer Staples 8.2% Materials 3.9% Telecommunication Services 3.4% Cash Equivalents 2.1% - ------------------------------------------------------------
SEE FINANCIAL NOTES 38 DECEMBER 31, 2005
PERCENTAGE OF BALANCED FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Equity Financials 12.4% Healthcare 9.6% Information Technology 9.4% Industrials 6.9% Consumer Discretionary 6.7% Energy 6.6% Consumer Staples 5.0% Utilities 2.1% Telecommunication Services 1.7% Materials 1.2% - ------------------------------------------------------------ Fixed Income U.S. Government Agency Obligations 16.0% Corporate Bonds 11.2% U.S. Government Obligations 4.6% Collateralized Mortgage Obligations 0.3% Foreign Government Bonds 0.2% - ------------------------------------------------------------ Cash Equivalents 6.1% - ------------------------------------------------------------
PERCENTAGE OF INCOME FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Cash Equivalents 27.4% U.S. Government Agency Obligations 26.3% U.S. Government Obligations 24.5% Corporate Bonds 11.5% Collateralized Mortgage Obligations 9.5% Foreign Government Bonds 0.8% - ------------------------------------------------------------
PERCENTAGE OF MONEY MARKET FUND INVESTMENTS SECURITY ALLOCATION AT VALUE - ------------------------------------------------------------ Commercial Paper 78.0% Certificates of Deposit 10.9% U.S. Government Agency Obligations 7.0% Municipal Notes 4.1% - ------------------------------------------------------------
All portfolio compositions subject to change. SEE FINANCIAL NOTES 39 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- 300 FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 99.7% Air Freight - 1.6% FedEx Corp. 200 21 United Parcel Service, Class B 665 50 ----- 71 Airlines - 0.2% jetBlue Airways Corp. (a) 150 2 Southwest Airlines Co. 530 9 ----- 11 Apparel Manufacturers - 0.3% Columbia Sportswear Co. (a) 100 5 Jones Apparel Group, Inc. 200 5 Liz Claiborne, Inc. 100 4 ----- 14 Auto Manufacturing - 0.2% PACCAR, Inc. 100 7 Banks - 4.5% Bank of America Corp. 2,500 115 Bank of New York Co., Inc. 500 16 BB&T Corp. 300 13 Fifth Third Bancorp 400 15 First Horizon National Corp. 100 4 National City Corp. 400 13 North Fork Bancorporation, Inc. 300 8 Suntrust Banks, Inc. 300 22 ----- 206 Biotechnology - 1.1% Applera Corp. 200 5 Biogen Idec, Inc. (a) 200 9 Chiron Corp. (a) 100 4 Forest Laboratories, Inc. (a) 200 8 Genzyme Corp. (a) 200 15 MedImmune, Inc. (a) 200 7 ----- 48 Broadcasting - 0.2% Radio One, Inc., Class D (a) 200 2 Univision Communications, Inc. (a) 250 7 ----- 9
- ------------------------------------------------------------------------- 300 FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Chemicals - 2.0% Air Products & Chemicals, Inc. 200 12 Amgen, Inc. (a) 800 63 Engelhard Corp. 100 3 International Flavors & Fragrances, Inc. 100 3 Praxair, Inc. 200 11 ----- 92 Computers - 9.1% Apple Computer, Inc. (a) 540 39 Citrix Systems, Inc. (a) 125 4 Corning, Inc. (a) 880 17 Dell, Inc. (a) 1,500 45 EMC Corp. (a) 1,500 20 Intel Corp. 3,855 97 International Business Machines Corp. 950 79 Intuit, Inc. (a) 100 5 Lexmark International, Inc. (a) 50 2 National Instruments Corp. 100 3 Network Appliance, Inc. (a) 200 5 Novell, Inc. (a) 200 2 Oracle Corp. (a) 3,240 40 Pixar, Inc. (a) 100 5 Symantec Corp. (a) 750 13 Yahoo!, Inc. (a) 900 35 ----- 411 Construction - 0.4% Centex Corp. 100 7 D. R. Horton, Inc. 166 6 Lennar Corp. 100 6 ----- 19 Consumer Products - 1.1% Black & Decker Corp. 100 9 Clorox Co. 200 11 Kimberly-Clark Corp. 300 18 Newell Rubbermaid, Inc. 200 5 The Stanley Works 100 5 ----- 48 Electrical Equipment - 0.6% American Power Conversion Corp. 120 3 Emerson Electric Co. 300 22 Sanmina Corp. (a) 300 1 ----- 26 Electronics - 4.6% Adobe Systems, Inc. 400 15 Applied Materials, Inc. 1,000 18 Broadcom Corp., Class A (a) 200 9 Cisco Systems, Inc. (a) 3,955 68 Electronic Arts, Inc. (a) 200 10
SEE FINANCIAL NOTES 40 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- 300 FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Electronics (continued) Freescale Semiconductor, Inc., Class B (a) 320 8 JDS Uniphase Corp. (a) 1,600 4 Juniper Networks, Inc. (a) 300 7 Linear Technology Corp. 200 7 Maxim Integrated Products, Inc. 250 9 NVIDIA Corp. (a) 100 4 Rockwell Automation, Inc. 120 7 SPX Corp. 100 5 Texas Instruments, Inc. 1,000 32 Xilinx, Inc. 200 5 ----- 208 Energy & Utilities - 9.8% AES Corp. (a) 400 6 AGL Resources 100 3 Allegheny Energy, Inc. (a) 200 6 Anadarko Petroleum Corp. 150 14 Apache Corp. 200 14 Baker Hughes, Inc. 200 12 BJ Services Co. 200 7 BP Amoco plc ADR 2,225 142 Burlington Resources, Inc. 300 26 Calpine Corp. (a) (b) 300 -- ConocoPhillips 900 52 Devon Energy Corp. 300 19 Diamond Offshore Drilling, Inc. 100 7 DPL, Inc. 100 3 EOG Resources, Inc. 200 15 Equitable Resources, Inc. 70 3 Hawaiian Electric Industries, Inc. 100 3 KeySpan Corp. 100 4 Newfield Exploration Co. (a) 100 5 NiSource, Inc. 200 4 Noble Corp. 100 7 Noble Energy, Inc. 200 8 ONEOK, Inc. 100 3 Pepco Holdings, Inc. 100 2 Pioneer Natural Resources Co. 100 5 Pogo Producing Co. 100 5 Puget Energy, Inc. 100 2 Questar Corp. 100 8 Rowan Cos., Inc. 100 4 Smith International, Inc. 200 7 The Williams Cos., Inc. 400 9 UGI Corp. 100 2 Valero Energy Corp. 400 21 Western Gas Resources, Inc. 100 5 XTO Energy, Inc. 200 9 ----- 442 Entertainment - 2.6% Comcast Corp., Class A (a) 1,400 36 Time Warner, Inc. 2,950 51 Viacom, Inc. 1,000 33 ----- 120
- ------------------------------------------------------------------------- 300 FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Financial - Diversified - 13.2% AMBAC Financial Group, Inc. 100 8 American Express Co. 800 41 Citigroup, Inc. 3,200 154 Fannie Mae 600 29 Freddie Mac 400 26 Legg Mason, Inc. 100 12 Lehman Brothers Holdings, Inc. 200 26 MBNA Corp. 800 22 Mellon Financial Corp. 300 10 Merrill Lynch & Co., Inc. 600 41 MetLife, Inc. 500 25 Moody's Corp. 200 12 Northern Trust Corp. 200 10 SLM Corp. 300 17 State Street Corp. 200 11 Synovus Financial Corp. 190 5 Wachovia Corp. 1,000 53 Washington Mutual, Inc. 600 26 Wells Fargo & Co. 1,060 66 ----- 594 Financial Services - 1.1% Ameriprise Financial, Inc. 160 7 Charles Schwab Corp. 900 13 Golden West Financial Corp. 200 14 Principal Financial Group 200 9 T. Rowe Price Group, Inc. 100 7 ----- 50 Foods - 4.9% Bunge, Ltd. 100 6 Campbell Soup Co. 300 9 Coca-Cola Co. 1,500 60 General Mills, Inc. 200 10 H.J. Heinz Co. 200 7 Hershey Foods Corp. 150 8 Kellogg Co. 349 15 McCormick & Co., Inc. 100 3 Pepsi Bottling Group, Inc. 200 6 PepsiCo, Inc. 1,050 62
SEE FINANCIAL NOTES 41 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- 300 FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Foods (continued) Sara Lee Corp. 550 10 SUPERVALU, Inc. 100 3 Sysco Corp. 500 16 Wm.Wrigley Jr. Co. 130 9 ----- 224 Healthcare - 11.7% Allergan, Inc. 100 11 Baxter International, Inc. 400 15 Becton, Dickinson & Co. 200 12 Biomet, Inc. 140 5 Boston Scientific Corp. (a) 500 12 DENTSPLY International, Inc. 100 5 Eli Lilly & Co. 700 40 Express Scripts, Inc. (a) 100 8 Guidant Corp. 200 13 Health Management Associates, Inc., Class A 200 4 Johnson & Johnson, Inc. 1,900 115 Laboratory Corp. of America Holdings (a) 125 7 Medtronic, Inc. 800 46 Mylan Laboratories, Inc. 50 1 Pfizer, Inc. 4,650 109 Quest Diagnostics, Inc. 100 5 St. Jude Medical, Inc. (a) 200 10 Stryker Corp. 320 14 UnitedHealth Group, Inc. 800 50 WellPoint, Inc. (a) 400 32 Zimmer Holdings, Inc. (a) 200 13 ----- 527 Insurance - 4.5% American International Group, Inc. 1,665 113 Fidelity National Financial Corp. 100 4 Fidelity National Title Group, Class A (b) 17 -- Marsh & McLennan Cos., Inc. 300 10 MBIA, Inc. 100 6 The Allstate Corp. 400 21 The Hartford Financial Services Group, Inc. 185 16
- ------------------------------------------------------------------------- 300 FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- The Progressive Corp. 100 12 The St. Paul Travelers Cos., Inc. 470 21 ----- 203 Investment Banking & Brokerage - 0.8% The Goldman Sachs Group, Inc. 300 38 Leisure - 0.2% Harley-Davidson, Inc. 200 10 Manufacturing - 6.0% 3M Co. 500 39 Cintas Corp. 135 6 Crane Co. 100 4 Dana Corp. 100 1 Donaldson Co., Inc. 100 3 Dover Corp. 100 4 Eaton Corp. 100 7 Gentex Corp. 110 2 Graco, Inc. 100 4 Illinois Tool Works, Inc. 200 18 Ingersoll-Rand Co. 200 8 Masco Corp. 300 9 Mattel, Inc. 370 6 Nucor Corp. 100 7 Packaging Corp. of America 100 2 Pactiv Corp. (a) 200 4 Parker Hannifin Corp. 100 7 Pentair, Inc. 100 3 Procter & Gamble Co. 1,487 85 Smurfit-Stone Container Corp. (a) 300 4 Sonoco Products Co. 100 3 Temple-Inland, Inc. 100 4 Tyco International, Ltd. 1,310 38 Worthington Industries, Inc. 100 2 ----- 270 Office Equipment & Supplies - 0.2% Avery Dennison Corp. 120 7 Pitney Bowes, Inc. 100 4 ----- 11 Personal Care - 0.9% Alberto-Culver Co. 100 5 Avon Products, Inc. 300 9 Colgate-Palmolive Co. 360 19 The Estee Lauder Cos., Inc., Class A 200 7 ----- 40
SEE FINANCIAL NOTES 42 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- 300 FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Pharmaceuticals - 0.4% Barr Pharmaceuticals, Inc. (a) 100 6 McKesson Corp. 200 11 Watson Pharmaceuticals, Inc. (a) 100 3 ----- 20 Publishing - 0.4% Dow Jones & Co., Inc. 100 4 The McGraw-Hill Cos., Inc. 200 10 Tribune Co. 200 6 ----- 20 Railroads - 0.4% CSX Corp. 100 5 Norfolk Southern Corp. 300 14 ----- 19 Restaurants - 1.0% Darden Restaurants, Inc. 200 8 McDonald's Corp. 800 26 Wendy's International, Inc. 100 6 YUM! Brands, Inc. 150 7 ----- 47
- ------------------------------------------------------------------------- 300 FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Retail - 7.5% AutoZone, Inc. (a) 100 9 Bed Bath & Beyond, Inc. (a) 200 7 Best Buy & Co., Inc. 300 13 Big Lots, Inc. (a) 200 2 Chico's FAS, Inc. (a) 110 5 Coach, Inc. (a) 200 7 Costco Wholesale Corp. 300 15 CVS Corp. 610 16 Dollar General Corp. 200 4 Dollar Tree Stores, Inc. (a) 100 2 eBay, Inc. (a) 800 36 Family Dollar Stores, Inc. 150 4 Hasbro, Inc. 100 2 Home Depot, Inc. 1,365 56 Limited Brands, Inc. 330 7 Lowe's Cos., Inc. 500 33 Michaels Stores, Inc. 200 7 Nordstrom, Inc. 200 7 RadioShack Corp. 135 3 Staples, Inc. 495 11 Target Corp. 500 27 The Gap, Inc. 568 10 The TJX Cos., Inc. 300 7 Tiffany & Co. 200 8 Walgreen Co. 600 27 Whole Foods Market, Inc. 200 15 ----- 340 Services - 2.7% Apollo Group, Inc., Class A (a) 100 6 ARAMARK Corp. 200 6 Career Education Corp. (a) 100 3 Cendant Corp. 600 10 Ecolab, Inc. 200 7 Fair Isaac & Co., Inc. 100 4 Fastenal Co. 100 4 First Data Corp. 500 21 Fiserv, Inc. (a) 200 9 Johnson Controls, Inc. 100 7 Manpower, Inc. 100 5 Monster Worldwide, Inc. (a) 100 4 Omnicom Group, Inc. 100 9 Pall Corp. 100 3 Paychex, Inc. 200 8 Unisys Corp. (a) 500 3 Viad Corp. 31 1 W.W. Grainger, Inc. 100 7 Weight Watchers International, Inc. (a) 100 5 ----- 122 Telecommunications - 5.4% AT&T, Inc. 2,480 61 Lucent Technologies, Inc. (a) 2,300 6 Motorola, Inc. 1,500 34 QUALCOMM, Inc. 1,050 45 Scientific-Atlanta, Inc. 100 4
SEE FINANCIAL NOTES 43 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- 300 FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Telecommunications (continued) Sprint Nextel Corp. 1,804 42 Verizon Communications, Inc. 1,750 53 ----- 245 Transportation - 0.1% Ryder System, Inc. 100 4 ----- TOTAL COMMON STOCKS 4,516 Cost: $3,945 TOTAL INVESTMENTS - 99.7% 4,516 Cost: $3,945
Percentages indicated are based on net assets of $4,528. (a) Non-income producing security. (b) Value rounded to less than $1. ADR - American Depositary Receipt - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 44 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 95.7% Air Freight - 1.0% FedEx Corp. 35,000 3,619 Biotechnology - 1.5% Gilead Sciences, Inc. (a) 100,000 5,263 Chemicals - 3.1% Amgen, Inc. (a) 60,000 4,732 Praxair, Inc. 110,000 5,825 ------- 10,557 Computers - 2.9% Autodesk, Inc. (a) 130,000 5,583 Intel Corp. 180,000 4,493 ------- 10,076 Construction - 2.0% Fluor Corp. 90,000 6,953 Electrical Equipment - 1.1% Emerson Electric Co. 50,000 3,735 Electronics - 6.6% Agilent Technologies, Inc. (a) 90,000 2,996 Broadcom Corp., Class A (a) 100,000 4,715 NVIDIA Corp. (a) 125,000 4,570 Rockwell Automation, Inc. 75,000 4,437 Texas Instruments, Inc. 190,000 6,093 ------- 22,811 Energy & Utilities - 14.6% Apache Corp. 90,000 6,167 BJ Services Co. 170,000 6,234 Burlington Resources, Inc. 80,000 6,896 ConocoPhillips 90,000 5,236 Equitable Resources, Inc. 200,000 7,338 Murphy Oil Corp. 90,000 4,859 Questar Corp. 100,000 7,571 Silvan Power Co. (a) (b) 24,000 -- Valero Energy Corp. 110,000 5,676 Vulcan Power Co., Class A (a) (b) 40,000 -- ------- 49,977 Financial - Diversified - 7.9% Legg Mason, Inc. 67,500 8,079 Moody's Corp. 135,000 8,292 SLM Corp. 90,000 4,958 State Street Corp. 110,000 6,098 ------- 27,427
- ------------------------------------------------------------------------- CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Financial Services - 2.3% Franklin Resources, Inc. 85,000 7,991 Foods - 2.7% Dean Foods Co. (a) 125,000 4,708 PepsiCo, Inc. 80,000 4,726 ------- 9,434 Healthcare - 10.2% Allergan, Inc. 30,000 3,239 Express Scripts, Inc. (a) 80,000 6,704 Medtronic, Inc. 90,000 5,181 St. Jude Medical, Inc. (a) 100,000 5,020 UnitedHealth Group, Inc. 135,000 8,390 WellPoint, Inc. (a) 80,000 6,383 ------- 34,917 Insurance - 6.2% AFLAC, Inc. 130,000 6,035 The Allstate Corp. 60,000 3,244 The Chubb Corp. 70,000 6,835 The Progressive Corp. 45,000 5,255 ------- 21,369 Manufacturing - 6.4% HNI Corp. 100,000 5,493 Precision Castparts Corp. 140,000 7,253 Procter & Gamble Co. 78,000 4,515 Taiwan Semiconductor Manufacturing Co. Ltd. ADR 487,498 4,831 ------- 22,092 Publishing - 1.9% The McGraw-Hill Cos., Inc. 130,000 6,712 Real Estate - 1.9% Simon Property Group, Inc. 85,000 6,514 Retail - 9.9% Chico's FAS, Inc. (a) 165,000 7,248 Coach, Inc. (a) 150,000 5,001 CVS Corp. 120,000 3,170 Nordstrom, Inc. 200,000 7,481 Staples, Inc. 225,000 5,110 Whole Foods Market, Inc. 80,000 6,191 ------- 34,201 Services - 7.6% Accenture Ltd., Class A 180,000 5,197 Fastenal Co. 175,000 6,858
SEE FINANCIAL NOTES 45 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Services (continued) Fiserv, Inc. (a) 90,000 3,894 Getty Images, Inc. (a) 80,000 7,141 Paychex, Inc. 80,000 3,050 ------- 26,140 Telecommunications - 5.9% Alltel Corp. 85,000 5,363 Comverse Technology, Inc. (a) 200,000 5,318 Motorola, Inc. 225,000 5,083 Sprint Nextel Corp. 200,000 4,672 ------- 20,436 ------- TOTAL COMMON STOCKS 330,224 Cost: $264,616 SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 4.6% Fifth Third Bank, Inc., 3.40%, 01/03/06 (Proceeds at maturity $15,906, collateralized by Federal Home Loan Mortgage Corp. security, 4.00%, 06/12/13) Cost: $15,900 15,900 15,900 ------- TOTAL INVESTMENTS - 100.3% 346,124 Cost: $280,516
- ------------------------------------------------------------------------- CORE GROWTH FUND - ------------------------------------------------------------------------- Percentages indicated are based on net assets of $345,151.
(a) Non-income producing security. (b) On December 31, 2005, the fund owned the following restricted securities constituting 0.00% of net assets which may not be publicly sold without registration under the Securities Act of 1933. These securities are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Trust's Board of Trustees. Additional information on the securities is as follows: Vulcan Power Co., Class A Acquisition Date: March 3, 1995 Cost: $300 Value: $0 Silvan Power Co. Acquisition Date: July 27, 2004 Cost: $0 Value: $0 ADR - American Depositary Receipt - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 46 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- EMERGING GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 98.8% Apparel Manufacturers - 1.1% Gildan Activewear, Inc. (a) 45,000 1,928 Biotechnology - 4.0% Fisher Scientific International, Inc. (a) 26,900 1,664 Gilead Sciences, Inc. (a) 63,200 3,327 Protein Design Labs, Inc. (a) 70,000 1,989 ------- 6,980 Chemicals - 1.2% Praxair, Inc. 39,650 2,100 Computers - 10.1% Apple Computer, Inc. (a) 75,432 5,424 Autodesk, Inc. (a) 62,500 2,684 Corning, Inc. (a) 147,360 2,897 Palm, Inc. (a) 70,000 2,226 Webex Communications, Inc. (a) 75,000 1,622 Websense, Inc. (a) 37,865 2,485 ------- 17,338 Electrical Equipment - 1.1% WESCO International, Inc. (a) 45,000 1,923 Electronics - 7.8% Adobe Systems, Inc. 119,290 4,408 Broadcom Corp., Class A (a) 40,000 1,886 Freescale Semiconductor, Inc., Class B (a) 80,000 2,014 Lam Research Corp. (a) 59,000 2,105 MEMC Electronic Materials, Inc. (a) 139,500 3,093 ------- 13,506 Energy & Utilities - 10.4% Baker Hughes, Inc. 43,840 2,665 EOG Resources, Inc. 46,400 3,405 Murphy Oil Corp. 38,600 2,084 Newfield Exploration Co. (a) 57,484 2,878 ONEOK, Inc. 54,200 1,443 Patterson-UTI Energy, Inc. 85,200 2,807 Transocean, Inc. (a) 37,700 2,627 ------- 17,909 Financial - Diversified - 3.5% Legg Mason, Inc. 21,000 2,513 Moody's Corp. 56,988 3,501 ------- 6,014
- ------------------------------------------------------------------------- EMERGING GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Financial Services - 4.5% Chicago Mercantile Exchange Holdings, Inc. 9,856 3,622 Golden West Financial Corp. 27,080 1,787 T. Rowe Price Group, Inc. 33,055 2,381 ------- 7,790 Food - 1.2% Flowers Foods, Inc. 75,000 2,067 Healthcare - 10.8% C.R. Bard, Inc. 34,975 2,306 Coventry Health Care, Inc. (a) 30,000 1,709 Express Scripts, Inc. (a) 30,000 2,514 Intuitive Surgical, Inc. (a) 30,150 3,535 Laboratory Corp. of America Holdings (a) 33,000 1,777 Psychiatric Solutions, Inc. (a) 35,000 2,056 Respironics, Inc. (a) 41,000 1,520 Sierra Health Services, Inc. (a) 40,888 3,269 ------- 18,686 Hotels & Motels - 2.7% Choice Hotels International, Inc. 61,060 2,550 Starwood Hotels & Resorts Worldwide, Inc. 34,300 2,190 ------- 4,740 Insurance - 1.7% W. R. Berkley Corp. 61,525 2,930 Manufacturing - 4.3% Eagle Materials, Inc. 15,500 1,897 iRobot Corp. (a) 50,000 1,667 Oshkosh Truck Corp. 58,568 2,611 Roper Industries, Inc. 32,000 1,264 ------- 7,439 Pharmaceuticals - 2.3% McKesson Corp. 41,000 2,115 Pharmaceutical Product Development, Inc. 30,000 1,859 ------- 3,974 Publishing - 1.0% John Wiley & Sons, Inc. 44,400 1,733 Real Estate - 1.4% CB Richard Ellis Group, Inc., Class A (a) 40,000 2,354
SEE FINANCIAL NOTES 47 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- EMERGING GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Restaurants - 1.4% Sonic Corp. (a) 79,615 2,349 Retail - 12.3% American Eagle Outfitters, Inc. 56,000 1,287 Bed Bath & Beyond, Inc. (a) 45,000 1,627 Claire's Stores, Inc. 101,400 2,963 Coach, Inc. (a) 91,650 3,056 Coldwater Creek, Inc. (a) 45,000 1,374 Michaels Stores, Inc. 45,000 1,592 Nordstrom, Inc. 100,712 3,766 Polo Ralph Lauren 30,000 1,684 The Men's Wearhouse, Inc. (a) 44,000 1,295 Whole Foods Market, Inc. 35,900 2,778 ------- 21,422 Services - 11.6% CheckFree Corp. (a) 53,000 2,433 Cognizant Technology Solutions Corp. (a) 68,400 3,444 Corporate Executive Board Co. 46,549 4,175 Dun & Bradstreet Corp. (a) 19,200 1,286 Emdeon Corp. (a) 150,000 1,269 Expeditors International of Washington, Inc. 41,600 2,808 Getty Images, Inc. (a) 36,235 3,235 SCP Pool Corp. 45,000 1,675 ------- 20,325
- ------------------------------------------------------------------------- EMERGING GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Telecommunications - 2.6% Comverse Technology, Inc. (a) 85,600 2,276 NII Holdings, Inc. (a) 50,000 2,184 ------- 4,460 Transportation - 1.8% Landstar System, Inc. 74,480 3,109 ------- TOTAL COMMON STOCKS 171,076 Cost: $127,259 SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 2.0% Fifth Third Bank, Inc., 3.40%, 01/03/06 (Proceeds at maturity $3,425, collateralized by Federal Home Loan Mortgage Corp. security, 4.00%, 06/12/13) Cost: $3,424 3,424 3,424 ------- TOTAL INVESTMENTS - 100.8% 174,500 Cost: $130,683
Percentages indicated are based on net assets of $173,182. (a) Non-income producing security. - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 48 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- SMALL CAP CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 93.9% Apparel Manufacturers - 1.8% Carter's, Inc. (a) 10,000 589 Banks - 3.4% PrivateBancorp, Inc. 15,000 534 SVB Financial Group (a) 12,000 562 ------ 1,096 Computers - 10.7% Ansys, Inc. (a) 12,000 512 Blue Coat Systems Inc. (a) 12,500 571 Komag, Inc. (a) 10,000 347 Micros Systems, Inc. (a) 10,000 483 NETGEAR, Inc. (a) 35,300 679 Progress Software Corp. (a) 18,000 511 SRA International, Inc., Class A (a) 12,500 382 ------ 3,485 Construction - 1.8% Beacon Roofing Supply, Inc. (a) 20,000 575 Educational Services - 1.7% Bright Horizons Family Solutions, Inc. (a) 15,000 556 Electrical Equipment - 2.0% Genlyte Group (a) 12,004 643 Electronics - 5.4% Diodes, Inc. (a) 24,000 745 Sirf Technology Holdings, Inc. (a) 22,000 656 Trimble Navigation Ltd. (a) 10,000 355 ------ 1,756 Energy & Utilities - 13.6% Airgas, Inc. 15,845 521 Cal Dive International, Inc. (a) 18,000 646 Core Laboratories N.V. (a) 15,000 560 Headwaters, Inc. (a) 10,000 354 Holly Corp. 12,000 706 Hydril (a) 9,000 563 RPC, Inc. 41,100 1,084 ------ 4,434 Food - 0.8% Flowers Foods, Inc. 10,000 276
- ------------------------------------------------------------------------- SMALL CAP CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Healthcare - 13.0% American Healthways, Inc. (a) 10,000 453 American Medical Systems Holdings, Inc. (a) 16,000 285 Psychiatric Solutions, Inc. (a) 8,500 499 Quality Systems, Inc. 9,000 691 Respironics, Inc. (a) 16,000 593 Sierra Health Services, Inc. (a) 9,000 719 Sybron Dental Specialties, Inc. (a) 12,000 478 Ventana Medical Systems, Inc. (a) 12,000 508 ------ 4,226 Hotels & Motels - 1.3% Choice Hotels International, Inc. 10,000 418 Insurance - 2.6% Philadelphia Consolidated Holding Corp. (a) 5,500 532 RLI Corp. 6,000 299 ------ 831 Investment Banking & Brokerage - 3.6% Affiliated Managers Group, Inc. (a) 8,000 642 Investment Technology Group, Inc. (a) 15,000 532 ------ 1,174 Manufacturing - 9.6% Ceradyne, Inc. (a) 14,000 613 Eagle Materials, Inc. 4,000 489 Oshkosh Truck Corp. 11,000 490 Roper Industries, Inc. 13,520 534 Silgan Holdings, Inc. 10,000 361 The Manitowoc Co., Inc. 12,900 649 ------ 3,136 Multimedia - 1.0% Witness Systems, Inc. (a) 16,000 315 Personal Care - 2.1% Playtex Products, Inc. (a) 25,000 342 Steiner Leisure Ltd. (a) 10,000 355 ------ 697 Pharmaceuticals - 1.4% Pharmaceutical Product Development, Inc. 7,500 465
SEE FINANCIAL NOTES 49 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- SMALL CAP CORE GROWTH FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Retail - 5.1% Coldwater Creek, Inc. (a) 20,000 610 Genesco, Inc. (a) 15,000 582 Marinemax, Inc. (a) 15,000 474 ------ 1,666 Services - 10.7% Corporate Executive Board Co. 7,500 672 Labor Ready, Inc. (a) 27,000 562 LKQ Corp. (a) 15,000 519 Mobile Mini, Inc. (a) 10,000 474 Ritchie Bros. Auctioneers, Inc. 10,000 423 SCP Pool Corp. 12,500 465 The Advisory Board Co. (a) 8,000 381 ------ 3,496 Telecommunications - 2.3% Comtech Telecommunications Corp. (a) 10,000 305 NICE Systems Ltd. ADR (a) 9,000 434 ------ 739 ------ TOTAL COMMON STOCKS 30,573 Cost: $24,677 SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 6.3% Fifth Third Bank, Inc., 3.40%, 01/03/06 (Proceeds at maturity $2,058, collateralized by Federal Home Loan Mortgage Corp. security, 4.00%, 06/12/13) Cost: $2,058 2,058 2,058 ------ TOTAL INVESTMENTS - 100.2% 32,631 Cost: $26,735
Percentages indicated are based on net assets of $32,554. (a) Non-income producing security. ADR - American Depositary Receipt - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 50 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- VALUE FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 99.1% Air Freight - 2.3% FedEx Corp. 7,218 746 Chemicals - 1.1% Praxair, Inc. 6,781 359 Computers - 9.5% Dell, Inc. (a) 14,584 437 Hewlett-Packard Co. 20,417 586 Intel Corp. 18,998 474 International Business Machines Corp. 5,586 459 Microsoft Corp. 15,696 410 Oracle Corp. (a) 31,204 381 Symantec Corp. (a) 22,693 397 ------ 3,144 Construction - 1.1% URS Corp. (a) 9,580 360 Consumer Products - 1.0% Kimberly-Clark Corp. 5,460 326 Electrical Equipment - 1.5% Emerson Electric Co. 6,653 497 Electronics - 5.0% Cisco Systems, Inc. (a) 21,951 376 Freescale Semiconductor, Inc., Class B (a) 15,490 390 MEMC Electronic Materials, Inc. (a) 19,289 428 Rockwell Automation, Inc. 7,611 450 ------ 1,644 Energy & Utilities - 13.7% AES Corp. (a) 28,443 450 Allegheny Energy, Inc. (a) 12,750 404 Baker Hughes, Inc. 12,101 735 ConocoPhillips 21,316 1,239 Devon Energy Corp. 8,310 520 Patterson-UTI Energy, Inc. 13,070 431 Precision Drilling Trust 8,810 291 UGI Corp. 21,945 452 ------ 4,522 Financial - Diversified - 11.8% Capital One Financial Corp. 7,651 661 JPMorgan Chase & Co. 17,332 688
- ------------------------------------------------------------------------- VALUE FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Lehman Brothers Holdings, Inc. 6,317 810 Merrill Lynch & Co., Inc. 9,196 623 MetLife, Inc. 10,741 526 Wachovia Corp. 10,878 575 ------ 3,883 Financial Services - 1.9% Golden West Financial Corp. 9,235 610 Foods - 5.1% Bunge, Ltd. 10,206 578 Kellogg Co. 16,057 694 PepsiCo, Inc. 6,936 410 ------ 1,682 Healthcare - 13.5% Baxter International, Inc. 15,490 583 Becton, Dickinson & Co. 7,856 472 Cooper Cos., Inc. 3,552 182 Coventry Health Care, Inc. (a) 5,768 329 Johnson & Johnson, Inc. 13,500 811 Omnicare, Inc. 7,302 418 Pfizer, Inc. 20,775 484 WellPoint, Inc. (a) 14,459 1,154 ------ 4,433 Insurance - 6.3% American International Group, Inc. 10,602 724 The Allstate Corp. 6,052 327 The Chubb Corp. 4,067 397 The Hartford Financial Services Group, Inc. 6,938 596 ------ 2,044 Manufacturing - 6.6% 3M Co. 7,523 583 Eagle Materials, Inc. 3,724 456 Ingersoll-Rand Co. 10,040 405 National-Oilwell Varco, Inc. (a) 6,006 377 Nucor Corp. 5,744 383 ------ 2,204 Publishing - 1.4% The McGraw-Hill Cos., Inc. 8,779 453 Railroads - 2.4% Norfolk Southern Corp. 17,660 792
SEE FINANCIAL NOTES 51 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- VALUE FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Real Estate - 1.7% General Growth Properties 5,869 276 Simon Property Group, Inc. 3,713 284 ------ 560 Restaurants - 1.3% McDonald's Corp. 12,554 423 Retail - 6.8% CVS Corp. 25,478 673 Home Depot, Inc. 11,147 451 Nordstrom, Inc. 16,892 632 Target Corp. 8,817 485 ------ 2,241 Services - 1.3% Johnson Controls, Inc. 5,608 409 Telecommunications - 3.8% Alltel Corp. 5,791 365 Motorola, Inc. 24,812 561 Sprint Nextel Corp. 14,189 331 ------ 1,257 ------ TOTAL COMMON STOCKS 32,589 Cost: $28,390
- ------------------------------------------------------------------------- VALUE FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 3.0% Fifth Third Bank, Inc., 3.40%, 01/03/06 (Proceeds at maturity $972, collateralized by Federal Home Loan Mortgage Corp. security, 4.00%, 06/12/13) Cost: $971 971 971 ------ TOTAL INVESTMENTS - 102.1% 33,560 Cost: $29,361
Percentages indicated are based on net assets of $32,866. (a) Non-income producing security. - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 52 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- GLOBAL EQUITY FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 98.1% Automobile Manufacturing - 4.5% Bayerische Motoren Werke AG 26,000 1,139 Toyota Motor Co. ADR 8,000 837 Volvo AB ADR 36,000 1,695 ------ 3,671 Banks - 6.2% Bank of New York Co., Inc. 40,000 1,274 Julius Baer Holding Ltd. 11,000 780 Royal Bank of Scotland Group plc 50,301 1,518 UBS AG ADR 15,000 1,427 ------ 4,999 Biotechnology - 1.8% Roche Holding AG 10,000 1,502 Broadcasting - 3.4% Clear Channel Communications, Inc. 37,000 1,164 Viacom, Inc., Class B (a) 49,000 1,597 ------ 2,761 Computers - 12.1% Check Point Software Technologies Ltd. (a) 36,000 724 First Data Corp. 37,000 1,591 Intel Corp. 59,000 1,473 International Business Machines Corp. 10,000 822 Intuit, Inc. (a) 17,000 906 Microsoft Corp. 85,000 2,222 SAP AG 6,500 1,179 Yahoo!, Inc. (a) 23,000 901 ------ 9,818 Construction - 1.2% Fluor Corp. 12,500 966 Consumer Products - 1.0% Kimberly-Clark de Mexico SA de CV ADR 45,000 804 Electronics - 1.4% Cisco Systems, Inc. (a) 65,000 1,113 Energy & Utilities - 10.0% Apache Corp. 27,500 1,884 BG Group plc ADR 25,800 1,281 BP Amoco plc 179,000 1,907
- ------------------------------------------------------------------------- GLOBAL EQUITY FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Gold Fields Ltd. ADR 46,000 811 Statoil ASA ADR 50,000 1,148 Valero Energy Corp. 20,800 1,073 ------ 8,104 Entertainment - 1.9% Comcast Corp., Class A (a) 58,000 1,490 Live Nation (a) 4,625 61 ------ 1,551 Financial - Diversified - 13.0% American Express Co. 16,000 823 Bank of America Corp. 19,000 877 Citigroup, Inc. 52,000 2,524 Deutsche Boerse AG 25,000 2,557 Fannie Mae 12,000 586 HSBC Holdings plc ADR 10,000 805 Mitsubishi UFJ Financial Group, Inc. 32 434 Mitsubishi UFJ Financial Group, Inc. ADR 148,000 2,026 ------ 10,632 Food & Beverages - 3.1% Nestle SA 4,000 1,197 PepsiCo, Inc. 22,000 1,299 ------ 2,496 Healthcare - 10.3% Beckman Coulter, Inc. 25,000 1,423 Boston Scientific Corp. (a) 45,000 1,102 Eli Lilly & Co. 15,000 849 GlaxoSmithKline plc 58,000 1,466 Novartis AG ADR 33,000 1,732 Pfizer, Inc. 76,000 1,771 ------ 8,343 Insurance - 2.4% American International Group, Inc. 14,000 955 ING Groep NV 28,000 971 ------ 1,926 Manufacturing - 9.3% 3M Co. 20,000 1,550 Johnson Matthey plc 33,000 802 Komatsu, Ltd. 120,000 1,985 L'Air Liquide ADR 20,000 788 Rexam plc 93,000 813 Tyco International, Ltd. 56,000 1,616 ------ 7,554
SEE FINANCIAL NOTES 53 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- GLOBAL EQUITY FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Office Equipment & Supplies - 3.9% Avery Dennison Corp. 29,000 1,602 Canon, Inc. ADR 26,000 1,530 ------ 3,132 Personal Care - 4.1% Colgate-Palmolive Co. 23,000 1,261 Henkel KGaA ADR 10,000 922 The Estee Lauder Cos., Inc., Class A 35,000 1,172 ------ 3,355 Retail - 2.2% Kohl's Corp. (a) 22,000 1,069 PETsMART, Inc. 27,000 693 ------ 1,762 Services - 1.9% WPP Group plc 144,000 1,558 Telecommunications - 4.4% France Telecom SA ADR 28,000 696 Telefonaktiebolaget LM Ericsson ADR 24,000 826 Verizon Communications, Inc. 23,000 693 Vodafone Group plc 630,000 1,359 ------ 3,574 ------ TOTAL COMMON STOCKS 79,621 Cost: $69,921 SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 2.1% Fifth Third Bank, Inc., 3.40%, 01/03/06 (Proceeds at maturity $1,740, collateralized by Federal Home Loan Mortgage Corp. security, 4.00%, 06/12/13) Cost: $1,739 1,739 1,739 ------ TOTAL INVESTMENTS - 100.2% 81,360 Cost: $71,660
- ------------------------------------------------------------------------- GLOBAL EQUITY FUND - ------------------------------------------------------------------------- Percentages indicated are based on net assets of $81,199. (a) Non-income producing security. ADR - American Depositary Receipt
The fund's portfolio holdings as of December 31, 2005, were distributed among the following countries: PERCENTAGE OF TOTAL INVESTMENTS ------------------------- SHORT TERM EQUITY & OTHER TOTAL ------------------------- Bermuda 2.0% 2.0% France 1.8% 1.8% Germany 7.1% 7.1% Israel 0.9% 0.9% Japan 8.4% 8.4% Mexico 1.0% 1.0% Netherlands 1.2% 1.2% Norway 1.4% 1.4% South Africa 1.0% 1.0% Sweden 3.1% 3.1% Switzerland 8.2% 8.2% United Kingdom 14.1% 14.1% United States 47.7% 2.1% 49.8% ---------------------------- TOTAL 97.9% 2.1% 100.0%
- -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 54 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- BALANCED FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- COMMON STOCKS - 61.8% Banks - 0.5% People's Bank 1,600 50 Biotechnology - 1.3% Gilead Sciences, Inc. (a) 2,350 124 Chemicals - 2.3% Amgen, Inc. (a) 1,350 106 Praxair, Inc. 2,075 110 ----- 216 Computers - 2.8% Autodesk, Inc. (a) 1,750 75 Corning, Inc. (a) 3,900 77 Intel Corp. 3,100 78 Progress Software Corp. (a) 1,000 28 ----- 258 Electronics - 2.4% Agilent Technologies, Inc. (a) 1,800 60 Rockwell Automation, Inc. 1,350 80 Texas Instruments, Inc. 2,750 88 ----- 228 Energy & Utilities - 8.9% Apache Corp. 1,300 89 BJ Services Co. 3,050 112 Burlington Resources, Inc. 1,425 123 ConocoPhillips 1,600 93 Equitable Resources, Inc. 2,725 100 Murphy Oil Corp. 2,000 108 Questar Corp. 1,300 98 Valero Energy Corp. 2,000 103 ----- 826 Financial - Diversified - 7.0% Legg Mason, Inc. 1,100 132 Merrill Lynch & Co., Inc. 1,500 102 Moody's Corp. 1,725 106 Northern Trust Corp. 1,600 83 SLM Corp. 1,400 77 State Street Corp. 1,500 83 Wachovia Corp. 1,500 79 ----- 662 Financial Services - 1.0% Franklin Resources, Inc. 1,000 94
- ------------------------------------------------------------------------- BALANCED FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Foods - 1.9% Dean Foods Co. (a) 2,200 83 PepsiCo, Inc. 1,525 90 ----- 173 Healthcare - 7.1% Allergan, Inc. 700 76 Express Scripts, Inc. (a) 1,450 121 Johnson & Johnson, Inc. 500 30 Laboratory Corp. of America Holdings (a) 1,525 82 Pfizer, Inc. 3,625 85 St. Jude Medical, Inc. (a) 1,900 95 UnitedHealth Group, Inc. 1,700 106 WellPoint, Inc. (a) 1,000 80 ----- 675 Insurance - 3.2% American International Group, Inc. 1,200 82 The Allstate Corp. 2,175 118 The Chubb Corp. 1,025 100 ----- 300 Manufacturing - 4.4% HNI Corp. 1,600 88 Ingersoll-Rand Co. 2,050 83 Precision Castparts Corp. 2,025 105 Procter & Gamble Co. 1,425 82 Taiwan Semiconductor Manufacturing Co. Ltd. ADR 6,350 63 ----- 421 Publishing - 1.0% The McGraw-Hill Cos., Inc. 1,800 93 Real Estate - 0.7% Simon Property Group, Inc. 900 69 Retail - 7.1% Chico's FAS, Inc. (a) 2,225 98 Coach, Inc. (a) 2,000 67 CVS Corp. 3,000 79 Nordstrom, Inc. 3,000 112 Polo Ralph Lauren 1,600 90 Staples, Inc. 4,150 94 Whole Foods Market, Inc. 1,750 135 ----- 675 Services - 5.6% ARAMARK Corp. 2,750 76 Cognizant Technology Solutions Corp. (a) 1,750 88 Corporate Executive Board Co. 900 81 Fastenal Co. 1,750 69 Fiserv, Inc. (a) 1,350 58
SEE FINANCIAL NOTES 55 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- BALANCED FUND SECURITY SHARES VALUE($) - ------------------------------------------------------------------------- Services (continued) Getty Images, Inc. (a) 925 83 W.W. Grainger, Inc. 1,025 73 ----- 528 Telecommunications - 4.6% Alltel Corp. 1,475 93 Comverse Technology, Inc. (a) 3,025 80 j2 Global Communications, Inc. (a) 1,350 58 Motorola, Inc. 3,400 77 Scientific-Atlanta, Inc. 1,450 62 Sprint Nextel Corp. 2,825 66 ----- 436 ----- TOTAL COMMON STOCKS 5,828 Cost: $5,033 SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS - 0.3% First Horizon Alternative Mortgage Securities, 5.50%, 03/25/35 (b) 19 19 4.77%, 06/25/35 (b) 13 12 ----- Cost: $32 31 CORPORATE BONDS - 11.2% Banks - 1.1% Bank of America Corp., 4.38%, 12/01/10 50 49 Capital One Bank, 6.50%, 06/13/13 50 53 ----- 102
- ------------------------------------------------------------------------- BALANCED FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- Chemicals - 0.4% Amgen, Inc., 6.50%, 12/01/07 40 41 Computers - 0.2% Corning, Inc., 6.20%, 03/15/16 15 15 Construction - 0.2% KB Home, 5.88%, 01/15/15 15 14 Pulte Homes, Inc., 6.00%, 02/15/35 10 9 ----- 23 Energy & Utilities - 0.8% Atmos Energy, 4.95%, 10/15/14 15 14 Chesapeake Energy Corp., 6.88%, 01/15/16 20 21 Enterprise Products Partners LP, 4.95%, 06/01/10 20 20 XTO Energy, Inc., 5.30%, 06/30/15 20 20 ----- 75 Entertainment - 0.3% Comcast Cable Communications, 8.38%, 05/01/07 25 26 Financial - Diversified - 4.2% CIT Group, Inc., 5.00%, 02/01/15 50 49 Citigroup, Inc., 4.52%, 05/18/10 50 50 Countrywide Financial, 4.25%, 12/19/07 50 49 HSBC Finance Corp., 4.63%, 09/15/10 50 49 International Lease Finance Corp., 5.80%, 08/15/07 50 50 JPMorgan Chase & Co., 3.13%, 12/11/06 50 49 Liberty Mutual Group, 5.75%, 03/15/14 (c) 10 10 Merrill Lynch, 4.25%, 09/14/07 50 49 Riddell Bell Holdings, 8.38%, 10/01/12 15 14 SLM Corp., 3.63%, 03/17/08 35 34 ----- 403 Financial Services - 0.5% Franklin Resources, Inc., 3.70%, 04/15/08 48 47 Food - 0.5% Pepsi Bottling Group, Inc., 5.63%, 02/17/09 (c) 50 51
SEE FINANCIAL NOTES 56 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- BALANCED FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- Healthcare - 0.5% Medtronic, Inc., 4.75%, 09/15/15 (c) 50 49 Investment Banking & Brokerage - 0.2% The Goldman Sachs Group, Inc., 5.00%, 10/01/14 15 15 Manufacturing - 0.1% American Standard, Inc., 7.38%, 02/01/08 5 5 Real Estate - 0.1% Brandywine Realty Trust, 5.40%, 11/01/14 5 5 Restaurants - 0.6% Dominos, Inc., 8.25%, 07/01/11 7 7 McDonald's Corp., 5.00%, 02/15/15 50 49 ----- 56 Telecommunications - 1.5% AT&T, Inc., 5.88%, 02/01/12 50 52 Directv Holdings, 6.38%, 06/15/15 30 29 Sprint Nextel Corp., 6.00%, 01/15/07 50 50 7.38%, 08/01/15 10 11 ----- 142 ----- TOTAL CORPORATE BONDS 1,055 Cost: $1,066 FOREIGN GOVERNMENT BOND - 0.2% United Mexican States, 6.75%, 09/27/34 15 16 Cost: $15 U.S. GOVERNMENT AGENCY OBLIGATIONS - 16.0% Federal Farm Credit Bank - 1.3% 5.83%, 01/14/08 25 26 5.43%, 10/24/12 100 99 ----- 125 Federal Home Loan Bank - 3.9% 4.28%, 11/05/07 100 99 4.50%, 02/15/08 100 100
- ------------------------------------------------------------------------- BALANCED FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- 4.10%, 06/13/08 20 20 3.38%, 07/21/08 30 29 5.20%, 05/11/12 15 15 6.00%, 12/28/15 100 100 ----- 363 Federal Home Loan Mortgage Corporation - 4.2% 3.25%, 11/02/07 15 15 3.25%, 02/25/08 4 4 4.55%, 01/20/11 5 5 4.50%, 01/15/13 9 9 5.00%, 10/01/18 102 101 5.50%, 10/01/18 67 67 5.20%, 03/05/19 40 39 5.50%, 08/20/19 20 20 6.00%, 12/01/20 50 51 5.00%, 06/01/35 97 94 ----- 405 Federal National Mortgage Association - 6.6% 3.25%, 01/15/08 9 9 5.25%, 01/15/09 14 14 6.38%, 06/15/09 3 3 4.13%, 05/15/10 20 20 5.00%, 08/10/10 100 98 6.00%, 05/10/12 25 25 4.38%, 09/15/12 4 4 5.00%, 04/15/15 20 20 5.55%, 08/04/15 100 99 5.00%, 10/01/18 98 97 5.00%, 09/01/19 40 40 6.50%, 07/01/32 3 3 6.00%, 11/01/32 2 2 5.50%, 03/01/33 25 25 4.58%, 12/01/34 38 37 4.88%, 01/01/35 23 23 4.82%, 08/01/35 98 97 ----- 616 ----- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 1,509 Cost: $1,526 U.S. TREASURY NOTES - 4.5% 6.50%, 02/15/10 100 108 4.00%, 03/15/10 100 99 3.88%, 05/15/10 35 34 4.75%, 05/15/14 10 10 4.00%, 02/15/15 100 97 4.13%, 05/15/15 30 29 5.38%, 02/15/31 50 56 ----- Cost: $433 433
SEE FINANCIAL NOTES 57 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- BALANCED FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 6.1% Fifth Third Bank, Inc., 3.40%, 01/03/06 (Proceeds at maturity $581, collateralized by Federal Home Loan Mortgage Corp. security, 4.00%, 06/12/13) Cost: $581 581 581 ----- TOTAL INVESTMENTS - 100.1% 9,453 Cost: $8,686
Percentages indicated are based on net assets of $9,447. (a) Non-income producing security. (b) Variable rate security. The rate presented represents the rate in effect at December 31, 2005. (c) Rule 144A security. ADR - American Depositary Receipt - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 58 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- INCOME FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS - 12.6% Crusade Global Trust, 4.50%, 11/19/37 (a) 483 484 First Horizon Alternative Mortgage Securities, 4.77%, 06/25/34 (a) 995 988 First Union National Bank Commercial Mortgage, 6.94%, 10/15/32 542 553 6.42%, 08/15/33 300 318 Granite Mortgages plc, 3.96%, 03/20/25 (a) 631 631 Greenwich Capital Commercial Funding Corp., 4.95%, 01/11/35 525 520 3.92%, 08/10/42 429 421 LB-UBS Commercial Mortgage Trust, 7.95%, 05/15/25 525 577 6.65%, 11/15/27 425 454 6.37%, 12/15/28 500 529 MLCC Mortgage Investors, Inc., 4.61%, 03/25/30 (a) 696 696 Puma Finance Limited, 4.50%, 08/09/35 (a) (b) 838 839 ------ Cost: $7,027 7,010 CORPORATE BONDS - 15.1% Biotechnology - 0.9% Genentech, Inc., 4.75%, 07/15/15 500 487 Broadcasting - 2.1% Comcast Corp., 5.85%, 11/15/15 500 506 Grupo Televisa SA, 6.63%, 03/18/25 400 408 Rogers Cable, Inc., 5.50%, 03/15/14 250 234 ------ 1,148 Construction - 0.4% KB Home, 5.88%, 01/15/15 250 236
- ------------------------------------------------------------------------- INCOME FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- Electrical Equipment - 0.5% Flextronics International, Ltd., 6.50%, 05/15/13 250 254 Energy & Utilities - 1.3% Chesapeake Energy Corp., 6.88%, 01/15/16 250 256 Enterprise Products Partners LP, 4.95%, 06/01/10 480 471 ------ 727 Entertainment - 0.9% News America, Inc., 6.40%, 12/15/35 (b) 500 504 Financial - Diversified - 1.8% CIT Group, Inc., 5.20%, 11/03/10 500 501 Lehman Brothers Holdings, 5.00%, 01/14/11 500 499 ------ 1,000 Insurance - 1.4% Berkley (WR) Corp., 5.60%, 05/15/15 300 299 Fidelity National Financial, 5.25%, 03/15/13 250 234 UnumProvident Finance Co., 6.85%, 11/15/15 (b) 250 260 ------ 793 Investment Banking & Brokerage - 0.9% The Goldman Sachs Group, Inc., 5.00%, 10/01/14 500 490 Manufacturing - 0.9% Hutchison Whampoa International, Ltd., 6.50%, 02/13/13 (b) 500 529 Real Estate - 0.9% Simon Property Group LP, 5.10%, 06/15/15 500 484 Restaurants - 0.5% Dominos, Inc., 8.25%, 07/01/11 250 261
SEE FINANCIAL NOTES 59 CITIZENS FUNDS HOLDINGS (UNAUDITED)
- ------------------------------------------------------------------------- INCOME FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- Telecommunications - 2.6% America Movil, S.A. de C.V., 5.50%, 03/01/14 500 494 AT&T, Inc., 4.13%, 09/15/09 500 483 Sprint Nextel Corp., 7.38%, 08/01/15 500 527 ------ 1,504 ------ TOTAL CORPORATE BONDS 8,417 Cost: $8,359 FOREIGN GOVERNMENT BOND - 1.1% United Mexican States, 7.50%, 04/08/33 500 592 ------ Cost: $569 592 U.S. GOVERNMENT AGENCY OBLIGATIONS - 34.6% Federal Home Loan Mortgage Corporation - 10.9% 5.50%, 01/01/34 (c) (d) 6,100 6,043 Federal National Mortgage Association - 23.7% 4.13%, 05/15/10 480 469 5.00%, 04/15/15 980 995 4.50%, 01/01/19 (c) (d) 2,700 2,627 5.00%, 01/15/21 (c) (d) 3,100 3,066 6.50%, 01/01/35 (c) (d) 1,400 1,436 5.00%, 01/01/36 (c) (d) 4,800 4,649 ------ 13,242 ------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 19,285 Cost: $19,272 U.S. TREASURY NOTES - 32.2% 4.25%, 11/30/07 4,000 3,988 4.38%, 11/15/08 4,000 4,002 4.38%, 12/15/10 1,880 1,881 4.00%, 11/15/12 3,000 2,935 4.50%, 11/15/15 2,961 2,985 5.38%, 02/15/31 1,940 2,179 ------ Cost: $17,889 17,970
- ------------------------------------------------------------------------- INCOME FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 36.1% Fifth Third Bank, Inc., 3.40%, 01/03/06 (Proceeds at maturity $20,193, collateralized by Federal Home Loan Mortgage Corp. security, 3.45%, 03/12/08) (e) 20,185 20,185 Cost: $20,185 ------ TOTAL INVESTMENTS - 131.7% 73,459 Cost: $73,301
Percentages indicated are based on net assets of $55,786. (a) Variable rate security. The rate presented represents the rate in effect at December 31, 2005. (b) Rule 144A security. (c) Security was traded on a "to be announced" basis. (d) Security was acquired under a mortgage dollar roll transaction. (e) Security considered collateral for "to be announced" mortgage dollar roll transactions. - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 60 DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- MONEY MARKET FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT - 10.7% City National Bank of New Jersey, 3.75%, 03/14/06 (a) 100 100 First Tennessee Bank, 4.18%, 01/26/06 2,500 2,500 HSBC Bank plc, 3.76%, 01/20/06 4,000 4,000 Self Help Credit Union, 3.95%, 03/13/06 (a) 100 100 Wells Fargo Bank, 4.31%, 01/26/06 600 600 Wilmington Trust Corp., 4.35%, 02/01/06 1,892 1,892 ------ TOTAL CERTIFICATES OF DEPOSIT 9,192 Cost: $9,192 COMMERCIAL PAPER - 76.4% American General Finance Corp., 4.34%, 01/05/06 556 556 Atlantis One Funding Corp., 4.31%, 02/17/06 (b) 2,163 2,151 4.44%, 03/20/06 (b) 2,000 1,981 BMW Finance, 4.10%, 01/05/06 (b) 2,500 2,499 4.36%, 01/09/06 (b) 303 303 4.25%, 01/31/06 (b) 1,400 1,395 Charta Corp., 4.19%, 01/23/06 (b) 1,497 1,493 4.21%, 01/24/06 (b) 2,500 2,494 Cooperative Association of Tractor Dealers, 4.12%, 01/09/06 2,000 1,997 4.33%, 01/09/06 150 150 4.48%, 04/05/06 1,500 1,483 4.50%, 04/13/06 110 109 4.53%, 04/21/06 510 503 Countrywide Home Loans, 4.44%, 03/06/06 4,200 4,168 First Data Corp., 4.31%, 01/11/06 521 520 Fountain Square, 4.31%, 01/10/06 (b) 1,538 1,536 4.34%, 01/17/06 (b) 500 499 Galaxy Funding, Inc., 4.28%, 01/13/06 (b) 3,900 3,895 4.26%, 01/24/06 (b) 250 249
- ------------------------------------------------------------------------- MONEY MARKET FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- Harley-Davidson Funding, 4.23%, 01/25/06 (b) 700 698 4.32%, 01/27/06 (b) 1,135 1,131 4.27%, 01/30/06 (b) 400 399 4.29%, 02/24/06 (b) 1,500 1,491 ING America Insurance, 4.11%, 01/12/06 2,500 2,497 4.19%, 01/18/06 1,000 998 JPMorgan Chase & Co., 4.20%, 01/17/06 2,500 2,495 Metlife Funding, Inc., 4.32%, 01/23/06 (b) 400 399 4.21%, 02/08/06 (b) 2,766 2,754 4.29%, 02/21/06 (b) 1,128 1,121 Mid States Federal Credit Union Corp., 4.29%, 01/12/06 3,000 2,996 4.30%, 01/24/06 1,214 1,211 New York Times Co., 4.20%, 01/06/06 2,500 2,499 4.35%, 02/27/06 1,300 1,291 Procter & Gamble, 4.20%, 01/03/06 (b) 1,750 1,749 4.21%, 01/04/06 (b) 1,066 1,066 Rabobank, 4.29%, 01/10/06 900 899 4.28%, 01/11/06 1,520 1,518 The Stanley Works, 4.38%, 01/10/06 (b) 2,517 2,514 UBS Finance Corp., 4.41%, 01/10/06 106 106 4.18%, 01/19/06 1,010 1,008 4.19%, 01/26/06 1,300 1,296 4.18%, 01/27/06 1,514 1,509 4.38%, 02/21/06 200 199 Verizon Network Funding, 4.32%, 01/17/06 200 200 4.27%, 01/19/06 3,019 3,012 4.31%, 02/06/06 717 714 ------ TOTAL COMMERCIAL PAPER 65,751 Cost: $65,751 MUNICIPAL NOTES - 4.1% New York State Housing Finance Agency, 4.38%, 11/15/29 (c) 3,500 3,500 Cost: $3,500
SEE FINANCIAL NOTES 61 CITIZENS FUNDS HOLDINGS (UNAUDITED) DECEMBER 31, 2005 ($ X 1,000)
- ------------------------------------------------------------------------- MONEY MARKET FUND SECURITY, RATE, MATURITY DATE PRINCIPAL($) VALUE($) - ------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS - 6.9% Federal Home Loan Bank - 3.3% 4.45%, 05/19/06 2,873 2,824 Federal Home Loan Mortgage Corporation - 1.4% 4.36%, 04/04/06 1,210 1,197 Federal National Mortgage Association - 2.2% 4.26%, 03/01/06 828 822 4.34%, 03/08/06 1,077 1,069 ------ TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 5,912 ------ Cost: $5,912 TOTAL INVESTMENTS - 98.1% 84,355 Cost: $84,355
Percentages indicated are based on net assets of $86,015. (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 December 31, 2005. - -------------------------------------------------------------------------------- SEE FINANCIAL NOTES 62 (THIS PAGE INTENTIONALLY LEFT BLANK) 63 STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
300 Core Growth Emerging Growth Fund Fund Fund - ---------------------------------------------------------------------------------------------- ASSETS Investments, at value $4,516,145 $330,223,570 $ 171,075,877 Repurchase agreements -- 15,900,072 3,423,830 ------------------------------------------- Total investments 4,516,145 346,123,642 174,499,707 Cash 3,079 -- -- Foreign currency -- -- -- Receivables: Interest and dividends 2,924 212,478 57,726 Investments sold -- -- -- Tax reclaims -- -- -- Capital shares issued 220 79,410 26,645 Due from investment adviser 9,577 -- -- Prepaid expenses 8,595 43,587 31,641 ------------------------------------------- Total assets 4,540,540 346,459,117 174,615,719 LIABILITIES Payables: Dividends to shareholders -- -- -- Investments purchased -- -- -- Capital shares redeemed 1,142 164,353 664,736 Investment management fees 2,236 427,106 423,379 Administrative fees 1,677 128,132 63,507 Shareholder service fees 595 165,863 23,593 Distribution fees 2,795 181,521 105,369 Other accrued expenses 4,252 240,657 153,167 ------------------------------------------- Total liabilities 12,697 1,307,632 1,433,751 - ---------------------------------------------------------------------------------------------- NET ASSETS $4,527,843 $345,151,485 $ 173,181,968 - ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- NET ASSETS Standard Shares: Net assets $4,527,843 $289,451,009 $ 167,398,676 Number of shares outstanding 397,691 13,599,074 10,762,837 Net asset value, offering and redemption price per share $ 11.39 $ 21.28 $ 15.55 Institutional Shares: Net assets -- $ 54,030,396 $ 767,977 Number of shares outstanding -- 3,031,797 47,444 Net asset value, offering and redemption price per share -- $ 17.82 $ 16.19 Administrative Shares: Net assets -- $ 1,670,080 $ 5,015,315 Number of shares outstanding -- 76,542 315,678 Net asset value, offering and redemption price per share -- $ 21.82 $ 15.89 Net assets consist of: Paid-in capital $3,978,770 $337,555,988 $ 316,189,299 Accumulated (Distributions in excess of) net investment income/loss 110 (788,305) (1,133,538) Accumulated net realized gains/losses on investments and foreign currencies (22,571) (57,224,107) (185,690,951) Net unrealized appreciation/depreciation on investments and foreign currencies 571,534 65,607,909 43,817,158 - ---------------------------------------------------------------------------------------------- NET ASSETS $4,527,843 $345,151,485 $ 173,181,968 - ---------------------------------------------------------------------------------------------- Investments, at cost $3,944,611 $280,515,733 $ 130,682,549 Foreign currency, at cost -- -- --
SEE FINANCIAL NOTES 64 AS OF DECEMBER 31, 2005
Small Cap Core Value Global Equity Balanced Income Money Market Growth Fund Fund Fund Fund Fund Fund - ------------------------------------------------------------------------------------------ $30,573,047 $32,588,612 $ 79,620,952 $8,872,534 $53,274,499 $84,354,735 2,057,530 971,214 1,739,330 580,544 20,184,879 -- - ------------------------------------------------------------------------------------------ 32,630,577 33,559,826 81,360,282 9,453,078 73,459,378 84,354,735 -- -- 101 -- 5,948 1,783,776 -- -- 101,359 -- -- -- 3,809 29,961 89,831 38,198 319,405 110,041 -- 2,563,069 -- 46,986 -- -- -- -- 97,631 -- -- -- 8,910 189,650 15,221 89,727 1,704 274,469 -- -- -- 9,948 -- -- 11,333 10,707 26,803 8,590 12,238 21,220 - ------------------------------------------------------------------------------------------ 32,654,629 36,353,213 81,691,228 9,646,527 73,798,673 86,544,241 -- -- -- 3,026 10,811 5,737 -- 3,360,350 -- 169,046 17,786,531 -- 1,242 15,109 103,924 -- 19,292 328,592 39,681 55,539 206,462 14,473 92,124 77,233 11,904 11,901 30,969 3,178 21,260 33,100 3,681 3,385 11,013 734 5,650 10,376 19,841 19,835 51,098 5,297 35,432 -- 24,200 21,443 89,077 3,784 41,823 74,542 - ------------------------------------------------------------------------------------------ 100,549 3,487,562 492,543 199,538 18,012,923 529,580 - ------------------------------------------------------------------------------------------ $32,554,080 $32,865,651 $ 81,198,685 $9,446,989 $55,785,750 $86,014,661 - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ $32,554,080 $32,865,651 $ 78,810,967 $9,446,989 $55,785,750 $73,558,419 2,790,523 2,712,007 4,560,174 751,757 5,683,887 73,657,616 $ 11.67 $ 12.12 $ 17.28 $ 12.57 $ 9.81 $ 1.00 -- -- $ 840,661 -- -- $12,456,242 -- -- 46,923 -- -- 12,461,689 -- -- $ 17.92 -- -- $ 1.00 -- -- $ 1,547,057 -- -- -- -- -- 88,035 -- -- -- -- -- $ 17.57 -- -- -- $28,126,772 $35,832,883 $ 192,806,593 $8,700,189 $61,694,225 $86,053,253 (160,837) (20,675) (237,026) (658) (7,885) -- (1,307,371) (7,145,122) (121,072,407) (19,263) (6,058,951) (38,592) 5,895,516 4,198,565 9,701,525 766,721 158,361 -- - ------------------------------------------------------------------------------------------ $32,554,080 $32,865,651 $ 81,198,685 $9,446,989 $55,785,750 $86,014,661 - ------------------------------------------------------------------------------------------ $26,735,061 $29,361,261 $ 71,660,201 $8,686,357 $73,301,017 $84,354,735 -- -- 102,267 -- -- --
SEE FINANCIAL NOTES 65 STATEMENTS OF OPERATIONS (UNAUDITED)
300 Core Growth Emerging Growth Fund Fund Fund - --------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 115 $ 304,095 $ 37,892 Dividend (1) 37,236 1,307,367 436,389 - --------------------------------------------------------------------------------------------- Total investment income 37,351 1,611,462 474,281 EXPENSES Investment management fees 4,530 847,665 841,583 Administrative fees 3,398 254,301 126,238 Distribution fees: Standard shares 5,663 360,109 202,465 Administrative shares -- 2,006 6,564 Shareholder service fees: Standard shares 1,414 363,993 55,170 Institutional shares -- 354 57 Administrative shares -- 9 9 Transfer agent expenses: Standard shares 5,109 335,433 241,145 Institutional shares -- 1,636 184 Administrative shares -- 428 475 Accounting expenses 5,574 61,768 33,089 Custody expenses 2,783 5,080 3,038 Registration expenses 6,562 17,265 16,327 Trustee expenses 658 31,404 15,979 Other expenses 2,114 118,316 65,496 - --------------------------------------------------------------------------------------------- Total expenses before reimbursements or waivers 37,805 2,399,767 1,607,819 Reimbursements or waivers from adviser (17,463) -- -- - --------------------------------------------------------------------------------------------- Net expenses 20,342 2,399,767 1,607,819 - --------------------------------------------------------------------------------------------- NET INVESTMENT INCOME/LOSS $ 17,009 $ (788,305) $(1,133,538) REALIZED AND UNREALIZED GAINS/LOSSES ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Realized gains/losses on investments and foreign currency transactions $ 99,300 $16,223,906 $ 4,617,688 Change in unrealized appreciation/depreciation on investments and foreign currencies 120,416 10,302,532 13,093,925 - --------------------------------------------------------------------------------------------- Net realized and unrealized gains/losses on investments and foreign currencies 219,716 26,526,438 17,711,613 CHANGE IN NET ASSETS FROM OPERATIONS $236,725 $25,738,133 $16,578,075 (1) Dividend income net of withholding taxes. For the six months ended December 31, 2005, withholding taxes for the Global Equity Fund were $3,468.
SEE FINANCIAL NOTES 66 FOR THE SIX MONTHS ENDED DECEMBER 31, 2005
Small Cap Core Value Global Equity Balanced Income Money Market Growth Fund Fund Fund Fund Fund Fund - --------------------------------------------------------------------------------------- $ 26,617 $ 12,784 $ 25,190 $ 62,857 $ 1,318,919 $1,657,104 39,474 211,329 599,230 22,378 -- -- - --------------------------------------------------------------------------------------- 66,091 224,113 624,420 85,235 1,318,919 1,657,104 78,825 108,025 419,914 24,923 185,617 156,517 23,648 23,148 62,987 5,751 42,835 67,079 39,413 38,580 101,488 9,586 71,391 -- -- -- 1,958 -- -- -- 9,160 8,552 25,900 2,168 15,400 24,300 -- -- 35 -- -- 193 -- -- 9 -- -- -- 46,264 38,737 142,411 7,306 58,545 103,956 -- -- 143 -- -- 687 -- -- 916 -- -- -- 6,936 6,792 26,428 5,135 13,038 17,577 913 1,737 7,595 2,662 1,546 3,916 7,058 5,897 16,663 7,139 6,563 13,566 2,715 2,457 8,617 392 5,399 8,453 11,996 10,863 32,773 2,403 21,853 32,550 - --------------------------------------------------------------------------------------- 226,928 244,788 847,837 67,465 422,187 428,794 -- -- -- (17,481) -- -- - --------------------------------------------------------------------------------------- 226,928 244,788 847,837 49,984 422,187 428,794 - --------------------------------------------------------------------------------------- $ (160,837) $ (20,675) $ (223,417) $ 35,251 $ 896,732 $1,228,310 1,654,222 $ $ 781,912 $4,203,008 $ 59,943 $ (814,161) $ (58) 355,500 508,978 3,203,900 337,666 (261,785) -- - --------------------------------------------------------------------------------------- 2,009,722 1,290,890 7,406,908 397,609 (1,075,946) (58) $1,848,885 $1,270,215 $7,183,491 $432,860 $ (179,214) $1,228,252
SEE FINANCIAL NOTES 67 STATEMENTS OF CHANGES IN NET ASSETS
300 FUND CORE GROWTH FUND - ---------------------------------------------------------------------------------------------- For the For the six months six months ended For the ended For the 12/31/05 year ended 12/31/05 year ended (Unaudited) 06/30/05 (Unaudited) 06/30/05 - ---------------------------------------------------------------------------------------------- OPERATIONS Net investment income/loss $ 17,009 $ 46,001 $ (788,305) $ (708,531) Realized gains/losses on investments 99,300 34,659 16,223,906 13,066,631 Change in unrealized appreciation on investments 120,416 61,219 10,302,532 15,286,460 - ---------------------------------------------------------------------------------------------- Change in net assets from operations 236,725 141,879 25,738,133 27,644,560 Dividends to Shareholders: From net investment income: Standard Shares (41,803) (34,591) -- -- From net realized gains on investments: Standard Shares (142,460) (24,271) -- -- - ---------------------------------------------------------------------------------------------- Total dividends (184,263) (58,862) -- -- Change in net assets from capital transactions (1,814,246) (642,155) (4,277,592) (48,783,373) CHANGE IN NET ASSETS $(1,761,784) $ (559,138) $ 21,460,541 $(21,138,813) - ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- NET ASSETS Beginning of period $ 6,289,627 $6,848,765 $323,690,944 $344,829,757 End of period $ 4,527,843 $6,289,627 $345,151,485 $323,690,944 - ---------------------------------------------------------------------------------------------- Accumulated net investment income/loss $ 110 $ 24,904 $ (788,305) -- - ---------------------------------------------------------------------------------------------- CAPITAL TRANSACTIONS Standard Shares Proceeds from shares issued $ 966,634 $2,053,618 $ 8,554,090 $ 13,543,217 Dividends reinvested 181,336 58,104 -- -- Cost of shares redeemed (2,962,216) (2,753,877) (19,878,457) (48,788,003) ------------------------------------------------------ Net change (1,814,246) (642,155) (11,324,367) (35,244,786) ------------------------------------------------------ Institutional Shares Proceeds from shares issued -- -- $ 20,006,954 $ 18,399,176 Cost of shares redeemed -- -- (12,832,170) (31,826,203) ------------------------------------------------------ Net change -- -- 7,174,784 (13,427,027) ------------------------------------------------------ Administrative Shares Proceeds from shares issued -- -- $ 250,922 $ 426,879 Cost of shares redeemed -- -- (378,931) (538,439) ------------------------------------------------------ Net change -- -- (128,009) (111,560) ------------------------------------------------------ CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS $(1,814,246) $ (642,155) $ (4,277,592) $(48,783,373) - ---------------------------------------------------------------------------------------------- SHARE TRANSACTIONS Standard Shares Issued 83,162 185,089 413,187 728,440 Reinvested 15,673 5,039 -- -- Redeemed (259,100) (246,122) (961,711) (2,622,290) ------------------------------------------------------ Net change (160,265) (55,994) (548,524) (1,893,850) ------------------------------------------------------ Institutional Shares Issued -- -- 1,156,785 1,176,634 Redeemed -- -- (744,204) (2,082,889) ------------------------------------------------------ Net change -- -- 412,581 (906,255) ------------------------------------------------------ Administrative Shares Issued -- -- 11,875 22,427 Redeemed -- -- (18,018) (28,441) ------------------------------------------------------ Net change -- -- (6,143) (6,014) ------------------------------------------------------ CHANGE IN SHARES FROM SHARE TRANSACTIONS (160,265) (55,994) (142,086) (2,806,119) - ----------------------------------------------------------------------------------------------
SEE FINANCIAL NOTES 68
EMERGING GROWTH FUND SMALL CAP CORE GROWTH FUND VALUE FUND - --------------------------------------------------------------------------------------- For the For the For the six months six months six months ended For the ended For the ended For the 12/31/05 year ended 12/31/05 year ended 12/31/05 year ended (Unaudited) 06/30/05 (Unaudited) 06/30/05 (Unaudited) 06/30/05 - --------------------------------------------------------------------------------------- $ (1,133,538) $ (2,286,103) $ (160,837) $ (300,309) $ (20,675) $ (28,176) 4,617,688 (2,034,432) 1,654,222 (2,896,785) 781,912 1,338,604 13,093,925 17,191,037 355,500 4,753,730 508,978 1,273,049 - --------------------------------------------------------------------------------------- 16,578,075 12,870,502 1,848,885 1,556,636 1,270,215 2,583,477 -- -- -- -- -- -- -- -- -- (1,298,737) -- -- - --------------------------------------------------------------------------------------- -- -- -- (1,298,737) -- -- (9,262,711) (27,903,648) 646,123 99,867 3,804,539 1,336,365 $ 7,315,364 $(15,033,146) $ 2,495,008 $ 357,766 $ 5,074,754 $ 3,919,842 - --------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------- $165,866,604 $180,899,750 $30,059,072 $29,701,306 $27,790,897 $23,871,055 $173,181,968 $165,866,604 $32,554,080 $30,059,072 $32,865,651 $27,790,897 - --------------------------------------------------------------------------------------- $ (1,133,538) -- $ (160,837) -- $ (20,675) -- - --------------------------------------------------------------------------------------- $ 9,167,344 $ 13,949,825 $ 3,497,232 $ 7,867,590 $ 6,439,908 $ 8,531,488 -- -- -- 1,265,634 -- -- (15,635,668) (34,269,158) (2,851,109) (9,033,357) (2,635,369) (7,195,123) - --------------------------------------------------------------------------------------- (6,468,324) (20,319,333) 646,123 99,867 3,804,539 1,336,365 - --------------------------------------------------------------------------------------- $ 57,651 $ 559,501 -- -- -- -- (2,068,859) (1,710,905) -- -- -- -- - --------------------------------------------------------------------------------------- (2,011,208) (1,151,404) -- -- -- -- - --------------------------------------------------------------------------------------- $ 237,805 $ 890,326 -- -- -- -- (1,020,984) (7,323,237) -- -- -- -- - --------------------------------------------------------------------------------------- (783,179) (6,432,911) -- -- -- -- - --------------------------------------------------------------------------------------- $ (9,262,711) $(27,903,648) $ 646,123 $ 99,867 $ 3,804,539 $ 1,336,365 - --------------------------------------------------------------------------------------- 617,400 1,059,522 308,092 750,734 534,681 795,995 -- -- -- 117,843 -- -- (1,061,181) (2,599,019) (250,394) (876,978) (218,203) (671,471) - --------------------------------------------------------------------------------------- (443,781) (1,539,497) 57,698 (8,401) 316,478 124,524 - --------------------------------------------------------------------------------------- 3,829 41,357 -- -- -- -- (136,472) (124,903) -- -- -- -- - --------------------------------------------------------------------------------------- (132,643) (83,546) -- -- -- -- - --------------------------------------------------------------------------------------- 15,851 67,524 -- -- -- -- (66,848) (576,879) -- -- -- -- - --------------------------------------------------------------------------------------- (50,997) (509,355) -- -- -- -- - --------------------------------------------------------------------------------------- (627,421) (2,132,398) 57,698 (8,401) 316,478 124,524 - ---------------------------------------------------------------------------------------
SEE FINANCIAL NOTES 69 STATEMENTS OF CHANGES IN NET ASSETS
GLOBAL EQUITY FUND BALANCED FUND - ------------------------------------------------------------------------------------------------ For the For the six months six months ended For the ended For the 12/31/05 year ended 12/31/05 year ended (Unaudited) 06/30/05 (Unaudited) 06/30/05 - ------------------------------------------------------------------------------------------------ OPERATIONS Net investment income/loss $ (223,417) $ 141,025 $ 35,251 $ 40,601 Realized gains/losses on investments and foreign currency transactions 4,203,008 6,000,124 59,943 (77,836) Change in unrealized appreciation/ depreciation on investments and foreign currencies 3,203,900 (2,235,549) 337,666 350,600 - ------------------------------------------------------------------------------------------------ Change in net assets from operations 7,183,491 3,905,600 432,860 313,365 Dividends to Shareholders: From net investment income: Standard Shares -- -- (35,908) (41,749) Institutional Shares -- -- -- -- From net realized gains on investments: Standard Shares -- -- -- (72,335) - ------------------------------------------------------------------------------------------------ Total dividends -- -- (35,908) (114,084) Change in net assets from capital transactions (10,824,808) (22,076,750) 3,558,577 2,488,096 CHANGE IN NET ASSETS $ (3,641,317) $(18,171,150) $3,955,529 $2,687,377 - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ NET ASSETS Beginning of period $ 84,840,002 $103,011,152 $5,491,460 $2,804,083 End of period $ 81,198,685 $ 84,840,002 $9,446,989 $5,491,460 - ------------------------------------------------------------------------------------------------ Accumulated net investment income/loss $ (237,026) $ (13,609) $ (658) $ (1) - ------------------------------------------------------------------------------------------------ CAPITAL TRANSACTIONS Standard Shares Proceeds from shares issued $ 2,843,276 $ 7,159,084 $4,058,148 $3,202,991 Dividends reinvested -- -- 30,106 116,909 Cost of shares redeemed (11,327,429) (26,154,054) (529,677) (831,804) ------------------------------------------------------ Net change (8,484,153) (18,994,970) 3,558,577 2,488,096 ------------------------------------------------------ Institutional Shares Proceeds from shares issued $ -- $ 613,484 -- -- Dividends reinvested -- -- -- -- Cost of shares redeemed (2,185,640) (3,015,760) -- -- ------------------------------------------------------ Net change (2,185,640) (2,402,276) -- -- ------------------------------------------------------ Administrative Shares Proceeds from shares issued $ 127,206 $ 313,429 -- -- Cost of shares redeemed (282,221) (992,933) -- -- ------------------------------------------------------ Net change (155,015) (679,504) -- -- ------------------------------------------------------ CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS $(10,824,808) $(22,076,750) $3,558,577 $2,488,096 - ------------------------------------------------------------------------------------------------ SHARE TRANSACTIONS Standard Shares Issued 170,880 468,530 329,669 278,643 Reinvested -- -- 2,413 10,053 Redeemed (677,669) (1,701,043) (43,002) (72,998) ------------------------------------------------------ Net change (506,789) (1,232,513) 289,080 215,698 ------------------------------------------------------ Institutional Shares Issued -- 38,057 -- -- Reinvested -- -- -- -- Redeemed (129,424) (198,226) -- -- ------------------------------------------------------ Net change (129,424) (160,169) -- -- ------------------------------------------------------ Administrative Shares Issued 7,435 20,183 -- -- Redeemed (16,606) (62,430) -- -- ------------------------------------------------------ Net change (9,171) (42,247) -- -- ------------------------------------------------------ CHANGE IN SHARES FROM SHARE TRANSACTIONS (645,384) (1,434,929) 289,080 215,698 - ------------------------------------------------------------------------------------------------
SEE FINANCIAL NOTES 70
INCOME FUND MONEY MARKET FUND - ---------------------------------------------------------- For the For the six months six months ended For the ended For the 12/31/05 year ended 12/31/05 year ended (Unaudited) 06/30/05 (Unaudited) 06/30/05 - ---------------------------------------------------------- $ 896,732 $ 2,111,638 $ 1,228,310 $ 1,134,923 (814,161) 352,980 (58) (29,451) (261,785) 552,719 -- -- - ---------------------------------------------------------- (179,214) 3,017,337 1,228,252 1,105,472 (904,618) (2,182,135) (1,035,611) (951,801) -- -- (192,699) (183,122) -- -- -- -- - ---------------------------------------------------------- (904,618) (2,182,135) (1,228,310) (1,134,923) 272,794 (3,800,843) (3,472,135) (4,726,157) $ (811,038) $(2,965,641) $(3,472,193) $(4,755,608) - ---------------------------------------------------------- - ---------------------------------------------------------- $56,596,788 $59,562,429 $89,486,854 $94,242,462 $55,785,750 $56,596,788 $86,014,661 $89,486,854 - ---------------------------------------------------------- $ (7,885) $ 1 -- -- - ---------------------------------------------------------- $ 3,900,984 $ 5,746,190 $27,816,516 $67,336,900 821,435 2,140,899 1,006,187 946,951 (4,449,625) (11,687,932) (31,988,475) (74,764,898) - ---------------------------------------------------------- 272,794 (3,800,843) (3,165,772) (6,481,047) - ---------------------------------------------------------- -- -- $ 1,414,852 $ 4,217,756 -- -- 192,340 187,562 -- -- (1,913,555) (2,650,428) - ---------------------------------------------------------- -- -- (306,363) 1,754,890 - ---------------------------------------------------------- -- -- -- -- -- -- -- -- - ---------------------------------------------------------- -- -- -- -- - ---------------------------------------------------------- $ 272,794 $(3,800,843) $(3,472,135) $(4,726,157) - ---------------------------------------------------------- 394,446 572,962 27,816,516 67,336,900 83,375 214,215 1,006,187 946,951 (452,360) (1,168,437) (31,988,475) (74,764,898) - ---------------------------------------------------------- 25,461 (381,260) (3,165,772) (6,481,047) - ---------------------------------------------------------- -- -- 1,414,853 4,217,756 -- -- 192,340 187,562 -- -- (1,913,555) (2,650,428) - ---------------------------------------------------------- -- -- (306,362) 1,754,890 - ---------------------------------------------------------- -- -- -- -- -- -- -- -- - ---------------------------------------------------------- -- -- -- -- - ---------------------------------------------------------- 25,461 (381,260) (3,472,134) (4,726,157) - ----------------------------------------------------------
SEE FINANCIAL NOTES 71 FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA INVESTMENT ACTIVITIES DIVIDENDS - ------------------------------------------------------------------------------------------------------------------ Net asset Net realized value, Net and unrealized Total from From net beginning investment Redemption gains/losses investment investment of period income/loss fee on investments operations income - ------------------------------------------------------------------------------------------------------------------ 300 FUND STANDARD SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $11.27 0.07 -- 0.53 0.60 (0.11) Year ended June 30, 2005 11.16 0.08 -- 0.13 0.21 (0.06) Period ended June 30, 2004 (3) 10.00 0.03 -- 1.14 1.17 (0.01) - ------------------------------------------------------------------------------------------------------------------ CORE GROWTH FUND STANDARD SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $19.72 (0.06) -- 1.62 1.56 -- Year ended June 30, 2005 18.10 (0.06) -- 1.68 1.62 -- Year ended June 30, 2004 16.44 (0.12) -- 1.78 1.66 -- Year ended June 30, 2003 16.73 (0.04) -- (0.25) (0.29) -- Year ended June 30, 2002 22.12 (0.09) -- (5.30) (5.39) -- Year ended June 30, 2001 32.59 (0.16) -- (9.01) (9.17) -- INSTITUTIONAL SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $16.45 0.01 -- 1.36 1.37 -- Year ended June 30, 2005 14.99 0.07 -- 1.39 1.46 -- Year ended June 30, 2004 13.52 0.01 -- 1.46 1.47 -- Year ended June 30, 2003 13.66 0.05 -- (0.19) (0.14) -- Year ended June 30, 2002 17.94 0.04 -- (4.32) (4.28) -- Year ended June 30, 2001 26.59 0.01 -- (7.36) (7.35) -- ADMINISTRATIVE SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $20.17 (0.02) -- 1.67 1.65 -- Year ended June 30, 2005 18.44 0.02 -- 1.71 1.73 -- Year ended June 30, 2004 16.68 (0.08) -- 1.84 1.76 -- Year ended June 30, 2003 16.91 0.01 -- (0.24) (0.23) -- Year ended June 30, 2002 22.27 (0.01) -- (5.35) (5.36) -- Year ended June 30, 2001 32.66 (0.03)(4) -- (9.06) (9.09) -- - ------------------------------------------------------------------------------------------------------------------ (1) Not annualized. (2) Annualized. (3) For the period August 29, 2003, commencement of operations, to June 30, 2004. (4) Based on average shares outstanding.
SEE FINANCIAL NOTES 72
TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net Ratio of Ratio of net Ratio of From Net asset assets, expenses to investment expenses to net Total value, Total end of average net income/loss average net Portfolio realized dividends to end return period assets, net of to average net assets, prior to turnover gains shareholders of period (%) ($ x 1,000) reimbursement (%) assets (%) reimbursement (%) rate (%) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ (0.37) (0.48) $11.39 5.28(1) $ 4,528 0.90(2) 0.75(2) 1.67(2) 7.04(1) (0.04) (0.10) 11.27 1.84 6,290 0.90 0.67 1.39 31.76 -- (0.01) 11.16 11.71(1) 6,849 0.90(2) 0.38(2) 1.94(2) 32.98(1) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $21.28 7.96(1) $289,451 1.52(2) (0.57)(2) 1.52(2) 43.75(1) -- -- 19.72 8.95 278,940 1.55 (0.32) 1.55 101.34 -- -- 18.10 10.10 290,352 1.50 (0.65) 1.52 228.43 -- -- 16.44 (1.73) 285,339 1.37 (0.28) 1.53 183.75 -- -- 16.73 (24.37) 326,793 1.34 (0.43) 1.44 76.40 (1.30) (1.30) 22.12 (28.42) 472,779 1.34 (0.62) 1.42 44.95 - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $17.82 8.33(1) $ 54,030 0.80(2) 0.16(2) 0.80(2) 43.75(1) -- -- 16.45 9.74 43,083 0.80 0.42 0.80 101.34 -- -- 14.99 10.96 52,842 0.77 0.08 0.79 228.43 -- -- 13.52 (1.02) 63,571 0.69 0.36 0.76 183.75 -- -- 13.66 (23.86) 85,140 0.68 0.23 0.73 76.40 (1.30) (1.30) 17.94 (27.98) 123,912 0.68 0.04 0.74 44.95 - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $21.82 8.18(1) $ 1,670 1.09(2) (0.15)(2) 1.09(2) 43.75(1) -- -- 20.17 9.38 1,667 1.14 0.09 1.14 101.34 -- -- 18.44 10.55 1,635 1.11 (0.27) 1.13 228.43 -- -- 16.68 (1.36) 2,426 1.00 0.09 1.06 183.75 -- -- 16.91 (24.07) 2,029 0.94 (0.05) 1.01 76.40 (1.30) (1.30) 22.27 (28.11) 1,964 0.94 (0.14) 5.63 44.95 - ------------------------------------------------------------------------------------------------------------------------------------
SEE FINANCIAL NOTES 73 FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA INVESTMENT ACTIVITIES DIVIDENDS - ------------------------------------------------------------------------------------------------------------------ Net asset Net realized value, Net and unrealized Total from From net beginning investment Redemption gains/losses investment investment of period income/loss fee on investments operations income - ------------------------------------------------------------------------------------------------------------------ EMERGING GROWTH FUND STANDARD SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $14.10 (0.10)(1) -- 1.55 1.45 -- Year ended June 30, 2005 13.01 (0.18)(1) -- 1.27 1.09 -- Year ended June 30, 2004 10.96 (0.20) -- 2.25 2.05 -- Year ended June 30, 2003 11.82 (0.17) -- (0.69) (0.86) -- Year ended June 30, 2002 15.79 (0.20) -- (3.77) (3.97) -- Year ended June 30, 2001 33.48 (0.21) -- (11.41) (11.62) -- INSTITUTIONAL SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $14.62 (0.06)(1) -- 1.63 1.57 -- Year ended June 30, 2005 13.41 (0.10)(1) -- 1.31 1.21 -- Year ended June 30, 2004 11.23 (0.15) -- 2.33 2.18 -- Year ended June 30, 2003 12.02 (0.10) -- (0.69) (0.79) -- Year ended June 30, 2002 15.96 (0.11)(1) -- (3.83) (3.94) -- Year ended June 30, 2001 33.61 (0.12) -- (11.46) (11.58) -- ADMINISTRATIVE SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $14.37 (0.08)(1) -- 1.60 1.52 -- Year ended June 30, 2005 13.22 (0.14)(1) -- 1.29 1.15 -- Year ended June 30, 2004 11.11 (0.14) -- 2.25 2.11 -- Year ended June 30, 2003 11.92 (0.10) -- (0.71) (0.81) -- Year ended June 30, 2002 15.87 (0.13) -- (3.82) (3.95) -- Year ended June 30, 2001 33.57 (0.17)(1) -- (11.46) (11.63) -- - ------------------------------------------------------------------------------------------------------------------ SMALL CAP CORE GROWTH FUND STANDARD SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $11.00 (0.06) -- 0.73 0.67 -- Year ended June 30, 2005 10.84 (0.11) -- 0.77 0.66 -- Year ended June 30, 2004 8.67 (0.13) -- 2.30 2.17 -- Year ended June 30, 2003 9.18 (0.09) -- (0.42) (0.51) -- Year ended June 30, 2002 9.52 (0.08) -- (0.26) (0.34) -- Year ended June 30, 2001 11.23 (0.05) -- (1.64) (1.69) -- - ------------------------------------------------------------------------------------------------------------------ (1) Based on average shares outstanding. (2) Not annualized. (3) Annualized.
SEE FINANCIAL NOTES 74
TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net Ratio of Ratio of net Ratio of From Net asset assets, expenses to investment expenses to net Total value, Total end of average net income/loss average net Portfolio realized dividends to end return period assets, net of to average net assets, prior to turnover gains shareholders of period (%) ($ x 1,000) reimbursement (%) assets (%) reimbursement (%) rate (%) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $15.55 10.28(2) $167,399 1.92(3) (1.36)(3) 1.92(3) 30.96(2) -- -- 14.10 8.38 157,963 1.96 (1.39) 1.96 109.56 -- -- 13.01 18.70 165,782 1.93 (1.47) 1.94 151.80 -- -- 10.96 (7.28) 157,911 1.95 (1.56) 1.97 315.89 -- -- 11.82 (25.14) 190,812 1.80 (1.39) 1.86 202.57 (6.07) (6.07) 15.79 (37.52) 283,760 1.68 (1.09) 1.75 136.63 - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $16.19 10.74(2) $ 768 1.35(3) (0.82)(3) 1.35(3) 30.96(2) -- -- 14.62 9.02 2,633 1.33 (0.76) 1.33 109.56 -- -- 13.41 19.41 3,534 1.30 (0.85) 1.31 151.80 -- -- 11.23 (6.57) 5,379 1.25 (0.86) 1.28 315.89 -- -- 12.02 (24.69) 6,428 1.20 (0.78) 1.26 202.57 (6.07) (6.07) 15.96 (37.21) 19,676 1.30 (0.69) 1.36 136.63 - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $15.89 10.58(2) $ 5,015 1.58(3) (1.01)(3) 1.58(3) 30.96(2) -- -- 14.37 8.70 5,270 1.64 (1.08) 1.64 109.56 -- -- 13.22 18.99 11,584 1.60 (1.13) 1.62 151.80 -- -- 11.11 (6.80) 8,561 1.51 (1.13) 1.54 315.89 -- -- 11.92 (24.89) 8,444 1.47 (1.07) 1.53 202.57 (6.07) (6.07) 15.87 (37.43) 9,497 1.55 (0.96) 2.06 136.63 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $11.67 6.09(2) $ 32,554 1.44(3) (1.02)(3) 1.44(3) 39.80(2) (0.50) (0.50) 11.00 6.21 30,059 1.51 (1.07) 1.51 120.89 -- -- 10.84 25.03 29,701 1.53 (1.37) 1.53 207.80 -- -- 8.67 (5.56) 17,821 1.45 (1.12) 1.58 349.79 -- -- 9.18 (3.57) 18,459 1.34 (0.93) 1.40 294.26 (0.02) (0.02) 9.52 (15.08) 15,503 1.34 (0.57) 3.20 146.62 - ------------------------------------------------------------------------------------------------------------------------------------
SEE FINANCIAL NOTES 75 FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA INVESTMENT ACTIVITIES DIVIDENDS - ------------------------------------------------------------------------------------------------------------------ Net realized and unrealized Net asset gains/losses value, Net on investments Total from From net beginning investment Redemption and foreign investment investment of period income/loss fee currencies operations income - ------------------------------------------------------------------------------------------------------------------ VALUE FUND STANDARD SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $11.60 (0.01) -- 0.53 0.52 -- Year ended June 30, 2005 10.51 (0.01) -- 1.10 1.09 -- Year ended June 30, 2004 8.64 (0.02) -- 1.89 1.87 -- Year ended June 30, 2003 8.74 (0.05) -- (0.05) (0.10) -- One month period ended June 30, 2002(3) 10.21 (0.01) -- (1.46) (1.47) -- Year ended May 31, 2002 15.29 (0.08) -- (3.57) (3.65) -- Year ended May 31, 2001 14.58 (0.07) -- 2.70 2.63 -- - ------------------------------------------------------------------------------------------------------------------ GLOBAL EQUITY FUND STANDARD SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $15.86 (0.05)(4) --(5) 1.47 1.42 -- Year ended June 30, 2005 15.18 0.02(4) --(5) 0.66 0.68 -- Year ended June 30, 2004 13.39 (0.10)(4) --(5) 1.89 1.79 -- Year ended June 30, 2003 14.22 (0.03)(4) 0.02 (0.82) (0.83) -- Year ended June 30, 2002 18.31 (0.11)(4) 0.01 (3.99) (4.09) -- Year ended June 30, 2001 29.99 (0.16) -- (9.61) (9.77) -- INSTITUTIONAL SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $16.39 --(4) --(5) 1.53 1.53 -- Year ended June 30, 2005 15.58 0.12(4) --(5) 0.69 0.81 -- Year ended June 30, 2004 13.65 0.04(4) --(5) 1.89 1.93 -- Year ended June 30, 2003 14.40 0.05(4) 0.02 (0.82) (0.75) -- Year ended June 30, 2002 18.46 (0.01)(4) 0.01 (4.06) (4.06) -- Year ended June 30, 2001 30.08 (0.05)(4) -- (9.66) (9.71) -- ADMINISTRATIVE SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $16.11 (0.02)(4) --(5) 1.48 1.46 -- Year ended June 30, 2005 15.36 0.06(4) --(5) 0.69 0.75 -- Year ended June 30, 2004 13.51 (0.02)(4) --(5) 1.87 1.85 -- Year ended June 30, 2003 14.30 0.01(4) 0.02 (0.82) (0.79) -- Year ended June 30, 2002 18.38 (0.06)(4) 0.01 (4.03) (4.08) -- Year ended June 30, 2001 30.02 (0.11)(4) -- (9.62) (9.73) -- - ------------------------------------------------------------------------------------------------------------------ (1) Not Annualized. (2) Annualized. (3) Subsequent to the annual report as of May 31, 2002, the Citizens Value Fund changed its fiscal year end to June 30. (4) Based on average shares outstanding. (5) Less than $0.005 per share.
SEE FINANCIAL NOTES 76
TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net Ratio of Ratio of net Ratio of From Net asset assets, expenses to investment expenses to net Total value, Total end of average net income/loss average net Portfolio realized dividends to end return period assets, net of to average net assets, prior to turnover gains shareholders of period (%) ($ x 1,000) reimbursement (%) assets (%) reimbursement (%) rate (%) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $12.12 4.48(1) $ 32,866 1.58(2) (0.13)(2) 1.58(2) 49.31(1) -- -- 11.60 10.37 27,791 1.70 (0.11) 1.70 172.95 -- -- 10.51 21.64 23,871 1.78 (0.23) 1.78 130.18 -- -- 8.64 (1.14) 16,226 1.90 (0.62) 1.90 209.72 -- 8.74 (14.40)(1) 21,060 1.95(2) (1.33)(2) 2.05(2) 5.87(1) -- (1.43) (1.43) 10.21 (25.58) 24,981 1.95 (1.04) 2.54 34.77 (1.92) (1.92) 15.29 20.71 14,378 1.95 (0.65) 4.63 62.55 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $17.28 8.95(1) $ 78,811 2.03(2) (0.55)(2) 2.03(2) 8.70(1) -- -- 15.86 4.48 80,384 2.05 0.13 2.05 80.36 -- -- 15.18 13.37 95,625 2.01 (0.60) 2.01 49.16 -- -- 13.39 (5.84) 101,846 1.91 (0.26) 1.91 42.05 -- -- 14.22 (22.34) 135,881 1.84 (0.66) 1.84 132.82 (1.91) (1.91) 18.31 (33.69) 236,080 1.82 (0.71) 1.82 151.95 - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $17.92 9.33(1) $ 841 1.40(2) -- (2) 1.40(2) 8.70(1) -- -- 16.39 5.20 2,891 1.39 0.75 1.39 80.36 -- -- 15.58 14.14 5,244 1.37 0.25 1.37 49.16 -- -- 13.65 (5.21) 6,688 1.26 0.42 1.26 42.05 -- -- 14.40 (21.99) 9,531 1.27 (0.05) 1.27 132.82 (1.91) (1.91) 18.46 (33.35) 16,475 1.39 (0.23) 1.42 151.95 - ------------------------------------------------------------------------------------------------------------------------------------ -- -- $17.57 9.06(1) $ 1,547 1.74(2) (0.25)(2) 1.74(2) 8.70(1) -- -- 16.11 4.88 1,566 1.73 0.40 1.73 80.36 -- -- 15.36 13.69 2,142 1.71 (0.11) 1.71 49.16 -- -- 13.51 (5.52) 2,059 1.59 0.11 1.59 42.05 -- -- 14.30 (22.20) 2,207 1.64 (0.39) 1.64 132.82 (1.91) (1.91) 18.38 (33.52) 1,748 1.68 (0.48) 3.18 151.95 - ------------------------------------------------------------------------------------------------------------------------------------
SEE FINANCIAL NOTES 77 FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA INVESTMENT ACTIVITIES DIVIDENDS - ------------------------------------------------------------------------------------------------------------------ Net asset Net realized value, Net and unrealized Total from From net beginning investment Redemption gains/losses investment investment of period income/loss fee on investments operations income - ------------------------------------------------------------------------------------------------------------------ BALANCED FUND STANDARD SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $11.87 0.05 -- 0.70 0.75 (0.05) Year ended June 30, 2005 11.35 0.12 -- 0.75 0.87 (0.12) Year ended June 30, 2004 10.47 0.06 -- 1.12 1.18 (0.06) Period ended June 30, 2003(3) 10.00 0.02 -- 0.47 0.49 (0.02) - ------------------------------------------------------------------------------------------------------------------ INCOME FUND STANDARD SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $10.00 0.16 -- (0.19) (0.03) (0.16) Year ended June 30, 2005 9.86 0.37 -- 0.15 0.52 (0.38) Year ended June 30, 2004 10.28 0.34 -- (0.40) (0.06) (0.36) Year ended June 30, 2003 9.62 0.37 -- 0.69 1.06 (0.40) Year ended June 30, 2002 10.28 0.58 -- (0.66) (0.08) (0.58) Year ended June 30, 2001 10.20 0.68 -- 0.10 0.78 (0.70) - ------------------------------------------------------------------------------------------------------------------ MONEY MARKET FUND STANDARD SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $ 1.00 0.01 -- -- 0.01 (0.01) Year ended June 30, 2005 1.00 0.01 -- -- 0.01 (0.01) Year ended June 30, 2004 1.00 --(4) -- -- --(4) --(4) Year ended June 30, 2003 1.00 0.01 -- -- 0.01 (0.01) Year ended June 30, 2002 1.00 0.02 -- -- 0.02 (0.02) Year ended June 30, 2001 1.00 0.05 -- -- 0.05 (0.05) INSTITUTIONAL SHARES - ------------------------------------------------------------------------------------------------------------------ Six months ended December 31, 2005 (Unaudited) $ 1.00 0.02 -- -- 0.02 (0.02) Year ended June 30, 2005 1.00 0.02 -- -- 0.02 (0.02) Year ended June 30, 2004 1.00 --(4) -- -- --(4) --(4) Year ended June 30, 2003 1.00 0.01 -- -- 0.01 (0.01) Year ended June 30, 2002 1.00 0.02 -- -- 0.02 (0.02) Year ended June 30, 2001 1.00 0.05 -- -- 0.05 (0.05) - ------------------------------------------------------------------------------------------------------------------ (1) Not Annualized. (2) Annualized. (3) For the period December 20, 2002, commencement of operations, to June 30, 2003. (4) Less than $0.005 per share.
SEE FINANCIAL NOTES 78
TO SHAREHOLDERS RATIOS AND SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------------------------ Net Ratio of Ratio of net Ratio of From Net asset assets, expenses to investment expenses to net Total value, Total end of average net income/loss average net Portfolio realized dividends to end return period assets, net of to average net assets, prior to turnover gains shareholders of period (%) ($ x 1,000) reimbursement (%) assets (%) reimbursement (%) rate (%) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ -- (0.05) $12.57 6.34(1) $ 9,447 1.30(2) 0.92(2) 1.75(2) 31.79(1) (0.23) (0.35) 11.87 7.76 5,491 1.30 1.07 2.33 109.56 (0.24) (0.30) 11.35 11.31 2,804 1.30 0.60 4.30 98.20 -- (0.02) 10.47 4.87(1) 1,061 1.30(2) 0.41(2) 16.73(2) 140.42(1) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ -- (0.16) $ 9.81 (0.32)(1) $55,786 1.48(2) 3.14(2) 1.48(2) 229.30(1) -- (0.38) 10.00 5.34 56,597 1.48 3.66 1.48 111.76 -- (0.36) 9.86 (0.63) 59,562 1.45 3.28 1.45 64.37 -- (0.40) 10.28 11.28 69,137 1.37 3.80 1.37 195.73 -- (0.58) 9.62 (0.87) 67,488 1.38 5.77 1.38 54.05 --(4) (0.70) 10.28 7.87 71,639 1.40 6.55 1.48 60.53 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ -- (0.01) $ 1.00 1.36(1) $73,558 1.00(2) 2.70(2) 1.00(2) N/A -- (0.01) 1.00 1.21 76,724 1.00 1.19 1.00 N/A -- --(4) 1.00 0.10 83,231 0.98 0.10 0.98 N/A -- (0.01) 1.00 0.65 104,641 0.93 0.65 0.93 N/A -- (0.02) 1.00 1.71 114,271 0.92 1.72 0.92 N/A -- (0.05) 1.00 5.23 117,211 0.89 5.08 0.89 N/A - ------------------------------------------------------------------------------------------------------------------------------------ -- (0.02) $ 1.00 1.53(1) $12,456 0.68(2) 3.02(2) 0.68(2) N/A -- (0.02) 1.00 1.53 12,763 0.68 1.55 0.68 N/A -- --(4) 1.00 0.41 11,011 0.67 0.41 0.67 N/A -- (0.01) 1.00 0.95 10,892 0.63 0.98 0.63 N/A -- (0.02) 1.00 1.97 16,539 0.67 1.95 0.67 N/A -- (0.05) 1.00 5.43 27,475 0.70 5.22 0.70 N/A - ------------------------------------------------------------------------------------------------------------------------------------
SEE FINANCIAL NOTES 79 FINANCIAL NOTES (UNAUDITED) ORGANIZATION Citizens Funds (the "trust"), a Massachusetts Business Trust, is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). The trust offers the following funds (individually a "fund," collectively the "funds"):
FUND SHORT NAME - -------------------------------------------------------------------------------- Citizens 300 Fund 300 Fund Citizens Core Growth Fund Core Growth Fund Citizens Emerging Growth Fund Emerging Growth Fund Citizens Small Cap Core Growth Fund Small Cap Core Growth Fund Citizens Value Fund Value Fund Citizens Global Equity Fund Global Equity Fund Citizens Balanced Fund Balanced Fund Citizens Income Fund Income Fund Citizens 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 300 Fund, Small Cap Core Growth Fund, Value Fund, Balanced Fund, and Income Fund offer one class of shares: Standard shares. Each class of shares in the funds has identical rights and privileges except with respect to fees paid under class-specific agreements, voting rights on matters affecting a single class of shares, and the exchange privilege of each class of shares. INDEMNIFICATIONS Under the funds' organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the trust. In addition, in the normal course of business, the funds enter into contracts with vendors and others that provide for general indemnifications. The funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. 80 SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the funds in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. SECURITIES VALUATION The board of trustees has approved procedures to be used to value each fund's securities for the purpose of determining the fund's net asset value (NAV). Equity securities traded on an exchange are valued at the market price determined as the closing sale or official closing price on that exchange. For securities not traded on an exchange, or if an exchange price is not readily available, securities are valued at a market price determined by independent third party pricing vendors approved by the funds' valuation committee. The market price for debt obligations is determined by an independent third party pricing service which use a matrix, formula or other objective method that considers the effect of market indices, yield curves and other specific adjustments. Short-term securities maturing within 60 days and all securities in the Money Market Fund are valued at amortized cost, unless it is determined that using this method would not reflect a security's fair value. Under the amortized cost method, premium or discount, if any, is amortized or accreted, respectively, on a constant basis to the maturity of the security. If a price for a given security is unavailable or deemed unreliable by the adviser, the market price may be determined using quotations received from one or more brokers that make a market in the security. When such prices or quotations are not available, or when the adviser believes they are unreliable, the funds' valuation committee will value securities using fair value procedures approved by the funds' board of trustees. Fair value procedures may also be used if the adviser determines that a significant event has occurred between the time at which a market price is determined and the time at which a fund's NAV is calculated. The Global Equity Fund uses a fair value model developed by an independent third party pricing service in its valuation considerations for foreign equity securities on days when there is a specific percentage change in the value of a domestic equity security index. This percentage is determined by the funds' valuation committee. 81 FINANCIAL NOTES (UNAUDITED) SECURITY TRANSACTIONS AND REL ATED INVESTMENT INCOME Changes in holdings of portfolio securities shall be reflected no later than on the first business day following the trade date. However, for financial reporting purposes, portfolio security transactions are reported on trade date. The cost of securities sold is determined on the identified cost basis, unless otherwise specified. Interest income is recorded on an accrual basis and includes, where applicable, the amortization or accretion of a premium or discount. Dividend income is recorded on the ex-dividend date. FOREIGN CURRENCY TRANSLATION The accounting records of the funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current rate of exchange. Purchases and sales of securities, and income and expenses, are translated into U.S. dollars at the prevailing rate of exchange on the respective dates of such transactions. The changes in foreign exchange rates on investments are not isolated on the Statement of Operations. Such fluctuations are included with the net realized and unrealized gain or loss on investments. FOREIGN CURRENCY CONTRACTS Foreign currency contracts are used to facilitate transactions in foreign-denominated securities. Losses may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contract's terms. The U.S. dollar value of foreign currency contracts is determined using the current rate of exchange. There were no foreign currency contracts open at December 31, 2005. REPURCHASE AGREEMENTS The funds may acquire repurchase agreements with an entity that is a member bank of the Federal Reserve System and government securities dealers that are on the Federal Reserve Bank of New York's list of primary dealers, collateralized by instruments issued by the U.S. government, its agencies or instrumentalities. The repurchase price generally equals the price paid by a fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying securities. It is the funds' policy to receive collateral securities of which the value, including accrued interest, is at least equal to 102% of the amount to be repaid to the funds under each agreement at its maturity. Collateral 82 subject to repurchase agreements is held by the funds' custodian. If the counterparty defaults, and the fair value of the collateral declines, realization of the collateral by the funds may be delayed or limited. SECURITIES TRADED ON A TO-BE-ANNOUNCED BASIS The Income Fund may invest in to-be-announced ("TBA") mortgage pass-through securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac for forward delivery. The fund purchases TBA securities, which have not yet been issued by the issuer, and for which specific information may not be known at the time of purchase. The forward purchases may be rolled from month to month on or prior to the delivery dates of such securities and therefore delivery of securities may not occur. MORTGAGE DOLLAR ROLLS The Income Fund enters into dollar roll transactions in which the fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar securities to settle on a specified future date. The fund treats dollar roll transactions as purchases and sales in the portfolio. The risk of entering into a mortgage dollar roll is that the market value of the securities the fund is obligated to repurchase under the agreement may decline below the repurchase price. The fund will hold aside or segregate cash, short-term money market instruments, or high quality debt securities in an amount sufficient to cover any commitments or to limit any potential risk. RESTRICTED SECURITIES The funds are permitted to invest in privately placed securities. These securities may be resold in transactions exempt from registration, or to the public, if the securities are registered under the Securities Act of 1933. Disposal of these securities may involve time-consuming negotiations and expense, and the prompt sale at an acceptable price may be difficult. REDEMPTION FEE The Global Equity Fund charges a redemption fee of 2% (paid to the fund) with respect to shares of the fund redeemed or exchanged within 60 days of purchase. The fee does not apply to shares purchased through the reinvestment of dividends or other distributions, redemptions by the fund of accounts with below minimum balances, redemptions due to shareholder death or disability, or certain omnibus accounts or retirement plans. For the period ended December 31, 2005, the Global Equity Fund 83 FINANCIAL NOTES (UNAUDITED) collected $968 in redemption fees. These fees are included in the "change in net assets from capital transactions" amounts in the Statements of Changes in Net Assets. DIVIDENDS TO SHAREHOLDERS The 300 Fund, Core Growth Fund, Emerging Growth Fund, Small Cap Core Growth Fund, Value Fund, and Global Equity Fund declare and distribute dividends from net investment income, if any, to shareholders annually. The Balanced Fund declares and distributes dividends from net investment income to shareholders quarterly. The Income Fund declares and distributes dividends from net investment income to shareholders monthly. Dividends from net investment income for the Money Market Fund are declared daily and paid monthly. The funds' net realized gains, if any, are distributed to shareholders at least annually. Additional dividends may also be paid to the funds' shareholders to the extent necessary to avoid federal excise tax on certain undistributed income and net realized gains. The amounts of dividends from net investment income and net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions), such amounts are reclassified to capital; temporary differences do not require reclassification. FEDERAL INCOME TAX Each fund is a separate taxable entity for federal tax purposes. Each fund has qualified and intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and distributes substantially all of its taxable net investment income and net realized gains, if any, to its shareholders. 84 FEES AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT MANAGEMENT FEE Citizens Advisers, Inc. (the "adviser") serves as adviser to each of the funds. Under the terms of the management agreement, the adviser is paid a fee that is computed daily based on an annual rate of each fund's average daily net assets. Those rates are as follows:
FUND FEE RATE - -------------------------------------------------------------------------------- 300 Fund 0.20% Core Growth Fund 0.50% Emerging Growth Fund 1.00% Small Cap Core Growth Fund 0.50% Value Fund 0.70% Global Equity Fund 1.00% Balanced Fund 0.65% Income Fund 0.65% Money Market Fund 0.35% - --------------------------------------------------------------------------------
McLean Budden Limited serves as the subadviser for the Global Equity Fund. For its services, the subadviser receives a fee computed daily based on an annual rate of 0.33% of the fund's average daily net assets up to $50 million, 0.30% on the next $50 million, and 0.25% on assets thereafter. The fee is paid by the adviser. Effective August 29, 2005, Dwight Asset Management Company began serving as the subadviser for the Income Fund. For its services, the subadviser receives a fee computed daily based on an annual rate of 0.25% of the fund's average daily net assets. The fee is paid by the adviser. Prior to August 29, 2005, all advisory services were performed by the adviser. DISTRIBUTION FEE Citizens Securities, Inc. (the "distributor") is a wholly owned subsidiary of the adviser and serves as the funds' distributor. Pursuant to Rule 12b-1 under the 1940 Act, the trust's shareholders have adopted a separate distribution plan with respect to the funds' Standard and Administrative shares pursuant to which the funds, except the Money Market Fund, compensate the distributor for services in an amount equal to 0.25% per annum of average annual net assets represented by such shares. 85 FINANCIAL NOTES (UNAUDITED) ADMINISTRATIVE AND SHAREHOLDER SERVICE FEES The adviser, with whom certain officers and a trustee are affiliated, performs administrative duties for the trust under a separate administrative contract, which provides for the reimbursement of out-of-pocket expenses as well as fees for services rendered. In accordance with the terms of the administrative contract, fees are accrued daily based on average daily net assets of each fund at the annual rate of 0.15%. In addition, Citizens Advisers provides a number of administrative services to the trust, relating primarily to shareholder services and communications, and is paid an account fee and is reimbursed for out-of-pocket expenses as well, for providing such services and communications for each of the individual funds with the exception of the Core Growth Fund, Standard shares. The Core Growth Fund, Standard shares may be charged a shareholder service fee of up to 0.35% based on the average daily net assets of the class. For the period ended December 31, 2005, a fee of 0.25% was charged. TRANSFER AGENCY, FUND ACCOUNTING AND CUSTODY BISYS Fund Services Ohio, Inc. provides transfer agency and fund accounting services to the funds pursuant to certain fee arrangements. As transfer agent for the funds, BISYS is paid a fee based on the number of funds and shareholder accounts, other service fees, and is reimbursed for out-of-pocket expenses as well. Transfer agent expenses also include the cost of services rendered by third parties to provide sub-transfer agency services. As fund accountant for the funds, BISYS is paid a fee based on assets (ranging from 0.0125% - 0.035%) and the number of share classes per fund, subject to certain minimums, other service fees, and is reimbursed for out-of-pocket expenses as well. Fifth Third Bank acts as a custodian for the funds and is paid a fee based on the funds' assets and other transaction based fees, subject to certain minimums. Custody expenses may be incurred or offset from fees or credits arising from cash balances maintained on deposit. TRUSTEE FEES All of the officers and one of the trustees of the trust are "interested persons," as defined in the 1940 Act, of the adviser. Currently, each trustee who is not an "interested person" receives an annual retainer of $12,000 and $1,250 for each day's attendance at a trustee meeting. The independent trustees include a chair of the board, who receives an additional annual retainer of $5,000; and an audit committee chair, social responsibility committee chair, and nominating committee chair who each receive an additional annual retainer of $2,500. 86 ALLOCATIONS Expenses directly attributable to a fund are charged to that fund. Expenses not directly attributable to a fund are allocated proportionately among various or all funds within the trust in relation to the net assets of each fund or on another reasonable basis. Expenses specific to a class are charged to that class. FEE REDUCTIONS AND REIMBURSEMENTS For the period ended December 31, 2005, the adviser limited the total expenses, exclusive of taxes, brokerage commissions and extraordinary expenses, for certain funds to the extent they exceeded the following limits:
FUND EXPENSE LIMITATION - -------------------------------------------------------------------------------- 300 Fund 0.90% Balanced Fund 1.30% - --------------------------------------------------------------------------------
The expense limitations above are voluntary and may be removed by the adviser at any time. INVESTMENT TRANSACTIONS The following summarizes purchases and sales of investment securities, other than short-term investments and U.S. Government securities, by fund for the period ended December 31, 2005:
FUND PURCHASES SALES - ----------------------------------------------------------------------------------------------------------- 300 Fund $ 330,185 $ 2,319,989 Core Growth Fund 139,969,395 142,959,439 Emerging Growth Fund 51,289,380 62,163,169 Small Cap Core Growth Fund 12,302,577 11,859,722 Value Fund 18,473,825 14,904,247 Global Equity Fund 7,109,710 17,289,905 Balanced Fund 5,583,308 2,155,415 Income Fund 72,152,350 81,217,164 - -----------------------------------------------------------------------------------------------------------
87 FINANCIAL NOTES (UNAUDITED) FEDERAL INCOME TAX INFORMATION At December 31, 2005, the cost, gross unrealized appreciation and gross unrealized depreciation on securities by fund, for federal income tax purposes, were as follows:
NET UNREALIZED TAX UNREALIZED TAX UNREALIZED APPRECIATION/ FUND TAX COST APPRECIATION DEPRECIATION DEPRECIATION - -------------------------------------------------------------------------------------------------------- 300 Fund $ 3,976,040 $ 715,175 $ (175,070) $ 540,105 Core Growth Fund 280,521,556 67,407,638 (1,805,552) 65,602,086 Emerging Growth Fund 130,697,525 46,619,141 (2,816,959) 43,802,182 Small Cap Core Growth Fund 26,745,121 6,195,579 (310,123) 5,885,456 Value Fund 29,522,617 4,366,646 (329,437) 4,037,209 Global Equity Fund 71,881,653 13,351,314 (3,872,685) 9,478,629 Balanced Fund 8,689,056 836,097 (72,075) 764,022 Income Fund 73,301,017 271,762 (113,401) 158,361 Money Market Fund 84,354,735 -- -- -- - --------------------------------------------------------------------------------------------------------
88 SUPPLEMENTAL INFORMATION (UNAUDITED) PORTFOLIO HOLDINGS DISCLOSURE Each fund, except the Money Market Fund, posts its full portfolio holdings monthly, with a 30-day lag, on www.citizensfunds.com. The portfolio holdings are posted within approximately five business days after month end. The funds' portfolio holdings will remain available until the following month's information is posted. In addition, each fund's, except the Money Market Fund's, top ten portfolio holdings in order of position size and as a percentage of the total portfolio as well as sector breakdowns and portfolio characteristics are available quarterly, within approximately fifteen business days after quarter end on www.citizensfunds.com. Each fund's top ten portfolio holdings, sector breakdown and portfolio characteristics remain available until the following quarter's information is posted. Details of the funds' portfolio holdings policies and procedures, which includes a discussion of any exceptions, are contained in the funds' SAI. Each fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year within 60 days of such quarters' end on Form N-Q. You can receive a copy of the funds' Form N-Q without charge by calling 800.223.7010 or by visiting the website at www.citizensfunds.com. The funds' Form N-Q is also available through a variety of methods. You can: - -- find it on the EDGAR Database of the SEC internet site at www.sec.gov - -- have copies sent to you (after paying a copying fee) by writing the SEC's Public Reference Section, Washington, D.C. 20549-0102, or by electronic request to publicinfo@sec.gov - -- view and copy it in person at the SEC's Public Reference Room in Washington D.C.; for more information call 202.942.8090. 89 SUPPLEMENTAL INFORMATION (UNAUDITED) TABLE OF SHAREHOLDER EXPENSES As a shareholder of the funds, you may incur two types of costs: (1) redemption fees (for Global Equity Fund only) and (2) ongoing costs, including management fees; distribution fees; and other fund expenses This example is intended to help you understand your ongoing costs (in dollars) of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2005 through December 31, 2005. ACTUAL EXPENSES The table on the opposite page provides information about actual account values and actual expenses. You may use the information below, together with your account value, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The table on the opposite page also provides information about hypothetical account values and hypothetical expenses based on each fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees and other individual shareholder fees mentioned in the prospectus. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. 90
- --------------------------------------------------------------------------------------------------------- DECEMBER 31, 2005 - --------------------------------------------------------------------------------------------------------- Expenses Annualized Beginning Ending paid during expense ratio account account period* during the period value value 07/01/05 -- 07/01/05 -- 07/01/05 12/31/05 12/31/05 12/31/05 - --------------------------------------------------------------------------------------------------------- 300 FUND Standard -- actual $ 1,000.00 $ 1,052.80 $ 4.66 0.90% Standard -- hypothetical 1,000.00 1,020.67 4.58 0.90% - --------------------------------------------------------------------------------------------------------- CORE GROWTH FUND Standard -- actual $ 1,000.00 $ 1,079.60 $ 7.97 1.52% Standard -- hypothetical 1,000.00 1,017.54 7.73 1.52% Institutional -- actual 1,000.00 1,083.30 4.20 0.80% Institutional -- hypothetical 1,000.00 1,021.17 4.08 0.80% Administrative -- actual 1,000.00 1,081.80 5.72 1.09% Administrative -- hypothetical 1,000.00 1,019.71 5.55 1.09% - --------------------------------------------------------------------------------------------------------- EMERGING GROWTH FUND Standard -- actual $ 1,000.00 $ 1,102.80 $ 10.18 1.92% Standard -- hypothetical 1,000.00 1,015.53 9.75 1.92% Institutional -- actual 1,000.00 1,107.40 7.17 1.35% Institutional -- hypothetical 1,000.00 1,018.40 6.87 1.35% Administrative -- actual 1,000.00 1,105.80 8.39 1.58% Administrative -- hypothetical 1,000.00 1,017.24 8.03 1.58% - --------------------------------------------------------------------------------------------------------- SMALL CAP CORE GROWTH FUND Standard -- actual $ 1,000.00 $ 1,060.90 $ 7.48 1.44% Standard -- hypothetical 1,000.00 1,017.95 7.32 1.44% - --------------------------------------------------------------------------------------------------------- VALUE FUND Standard -- actual $ 1,000.00 $ 1,044.80 $ 8.14 1.58% Standard -- hypothetical 1,000.00 1,017.24 8.03 1.58% - --------------------------------------------------------------------------------------------------------- GLOBAL EQUITY FUND Standard -- actual $ 1,000.00 $ 1,089.50 $ 10.69 2.03% Standard -- hypothetical 1,000.00 1,014.97 10.31 2.03% Institutional -- actual 1,000.00 1,093.30 7.39 1.40% Institutional -- hypothetical 1,000.00 1,018.15 7.12 1.40% Administrative -- actual 1,000.00 1,090.60 9.17 1.74% Administrative -- hypothetical 1,000.00 1,016.43 8.84 1.74% - --------------------------------------------------------------------------------------------------------- BALANCED FUND Standard -- actual $ 1,000.00 $ 1,063.40 $ 6.76 1.30% Standard -- hypothetical 1,000.00 1,018.65 6.61 1.30% - --------------------------------------------------------------------------------------------------------- INCOME FUND Standard -- actual $ 1,000.00 $ 996.80 $ 7.45 1.48% Standard -- hypothetical 1,000.00 1,017.74 7.53 1.48% - --------------------------------------------------------------------------------------------------------- MONEY MARKET FUND Standard -- actual $ 1,000.00 $ 1,013.60 $ 5.08 1.00% Standard -- hypothetical 1,000.00 1,020.16 5.09 1.00% Institutional -- actual 1,000.00 1,015.30 3.45 0.68% Institutional -- hypothetical 1,000.00 1,021.78 3.47 0.68% - ---------------------------------------------------------------------------------------------------------
*Expenses are equal to the average account value times the fund's annualized expense ratio multiplied by 184/365 (to reflect the one-half year period. 91 SHAREHOLDER SERVICES (UNAUDITED) At Citizens Funds, we want our investors to know how much we value their business. That's why we offer a comprehensive range of services that includes everything from highly trained client shareholder representatives to an informative website. EXCHANGES BETWEEN CITIZENS FUNDS* You can move your money from any one of our funds to another. RETIREMENT INVESTING We offer investors the opportunity to invest in a variety of IRAs, including Traditional, Roth and Rollover. Citizens Funds are also available for 401(k), SEP and SIMPLE retirement plans. AUTOMATIC INVESTMENT PLAN Invest automatically on a monthly or quarterly basis with payroll deduction or electronic transfer from your bank. UNPARALLELED CUSTOMER SERVICE Our representatives are well trained professionals whose goal is to satisfy most requests during the first phone call. Representatives are available from 9 AM to 6 PM (ET) Monday - Friday at 800.223.7010. CLIENT WEALTH MANAGEMENT Receive personal, one on one advice and consultation from our Client Wealth Management specialist. WWW.CITIZENSFUNDS.COM Citizens Funds' website offers daily fund prices and monthly performance updates, fund and manager profiles, the funds' prospectus and applications, shareholder activism updates, online account access and transactions and much more. INTELLIGENT COMMUNICATIONS Citizens Funds was a pioneer of the plain English prospectus well before it became the standard for the rest of the mutual fund industry. We try to bring that same spirit of innovation, plain-speak and respect for our shareholders to all our communications. PROXY VOTING A description of the policies and procedures that the funds use to determine how to vote proxies relating to portfolio securities and a copy of the funds' voting record for the 12-month period ended June 30, 2005 are available on-line at www.citizensfunds.com without charge, or upon request, by calling 800.223.7010, or on the SEC's website at www.sec.gov. *Citizens Global Equity Fund charges a redemption fee of 2% on shares redeeemed or exchanges within 60 days of purchase. 92 NOTES - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 93 [CITIZENS FUNDS LOGO] - -------------------------------------------------------------------------------- TRUSTEES CUSTODIAN Walter D. Bristol, Jr. Fifth Third Bank Sophia Collier Cincinnati, OH 45263 Jeannie H. Diefenderfer Pablo S. Eisenberg TRANSFER AND ACCOUNTING AGENT Orlando Hernandez BISYS Fund Services Ohio, Inc. Martha S. Pope Columbus, OH 43219 Henry L.P. Schmelzer LEGAL COUNSEL MANAGER Bingham McCutchen LLP Citizens Advisers, Inc. Boston, MA 02110 One Harbour Place Suite 400 INDEPENDENT REGISTERED PUBLIC Portsmouth, NH 03801 ACCOUNTING FIRM 800.223.7010 PricewaterhouseCoopers LLP 603.436.5152 Columbus, OH 43215 DISTRIBUTOR Citizens Securities, Inc. One Harbour Place Suite 400 Portsmouth, NH 03801 800.223.7010 603.436.5152 - -------------------------------------------------------------------------------- Citizens Funds are distributed by Citizens Securities, Inc., Portsmouth, NH 03801 and are available through such popular mutual fund supermarkets as Charles Schwab's Mutual Fund OneSource(R) and Fidelity Investments' FundsNetwork(R). Citizens Funds(R) is a trademark of Citizens Advisers, Inc. This report is intended for shareholders of Citizens Funds and is not authorized for distribution to other persons unless accompanied or preceded by a prospectus. PLEASE CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF CITIZENS FUNDS CAREFULLY BEFORE INVESTING. FOR THIS AND OTHER INFORMATION, PLEASE VISIT WWW.CITIZENSFUNDS.COM OR CALL 800.223.7010 FOR A FREE PROSPECTUS AND READ IT CAREFULLY BEFORE INVESTING. (C)2006 CITIZENS ADVISERS NOT A PART OF THE SEMI-ANNUAL REPORT ITEM 2. CODE OF ETHICS. Not Applicable. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not Applicable. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not Applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not Applicable. ITEM 6. SCHEDULE OF INVESTMENTS Not Applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not Applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not Applicable ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS Not Applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant of Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Not Applicable. (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2). Certifications pursuant to Rule 30a-2(a) are attached hereto. (a)(3) Not Applicable. (b) A certification of each principal executive officer and principal officer of the registrant as required by Rule 30a-2(b) under the Act of 1940. Certifications pursuant to Rule 30a-2(b) are furnished herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Citizens Funds By: /s/ Sophia Collier -------------------------- Sophia Collier President Date: March 6, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Sophia Collier -------------------------- Sophia Collier President Date: March 6, 2006 By: /s/ Sean P. Driscoll -------------------------- Sean P. Driscoll Treasurer Date: March 6, 2006 EX-99.12(A)(2) 2 b58753ncexv99w12xayx2y.txt CERTIFICATIONS OF PEO & PFO EXHIBIT 12(a)(2) CERTIFICATION I, Sophia Collier, certify that: 1. I have reviewed this report on Form N-CSR of Citizens Funds (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and) 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 6, 2006 /s/ Sophia Collier ------------------------- Sophia Collier Principal Executive Officer EXHIBIT 12(a)(2) CERTIFICATION I, Sean P. Driscoll, certify that: 1. I have reviewed this report on Form N-CSR of Citizens Funds (the "registrant"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 6, 2006 /s/ Sean P. Driscoll ------------------------- Sean P. Driscoll Principal Financial Officer EX-99.12(B) 3 b58753ncexv99w12xby.txt 906 CERTIFICATION EXHIBIT 12(b) This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, and accompanies the report on Form N-CSR for the period December 31, 2005 of Citizens Funds (the "Registrant"). Each of the undersigned, being the Principal Executive Officer and Principal Financial Officer of the Registrant, hereby certifies that, to such officer's knowledge: 1. the Form N-CSR fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and 2. the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: March 6, 2006 /s/ Sophia Collier --------------------------- Sophia Collier Principal Executive Officer Date: March 6, 2006 /s/ Sean P Driscoll --------------------------- Sean P. Driscoll Principal Financial Officer This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of Form N-CSR or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----