<PAGE>
American Independence Funds Trust
Annual Report
October 31, 2000
Money Market Fund
Short-Term Bond Fund
Intermediate Bond Fund
Stock Fund
International Multi-Manager Stock Fund
Kansas Tax-Exempt Bond Fund
--------------------------------------------------------------------------------
Important Customer Information, Investment Products:
. Are not deposits or obligations of, or guaranteed by, INTRUST Bank, N.A. or
any of its affiliates,
. Are not insured by the FDIC, and
. Are subject to investment risks, including possible loss of the principal
amount invested.
--------------------------------------------------------------------------------
This material must be accompanied or preceded by a prospectus.
American Independence Funds Trust is distributed by BISYS Fund Services Limited
Partnership.
<PAGE>
________________________________________________________________________________
American Independence Family of Mutual Funds - October 31, 2000
To Our Shareholders:
We are pleased to present this annual report for the 12 months ended
October 31, 2000, a time when our funds, as a group, more than held their own in
a challenging investment climate.
Perhaps our proudest accomplishment came with the American Independence
Stock Fund. On January 1, a highly experienced portfolio management team from
Barrow, Hanley, Mewhinney & Strauss, Inc. assumed subadvisory management
responsibility for the Stock Fund. Since then, the fund has soared to a 16.49
percent (Service Shares excluding sales charge), for the ten months ended
10/31/00, while the S&P 500 Index declined 1.81 percent.*
Other American Independence funds also have been shining in the mutual fund
universe. Our Short-Term Bond Fund received Morningstar's highest rating of five
stars, for risk-adjusted performance during the three-year period ended October
31 (among 1,751 fixed income funds); the fund also was awarded a Morningstar
"overall rating" of five stars.**
In addition, our Kansas Tax-Exempt Bond Fund received Morningstar's four-
star rating for the three- and five-year periods ended October 31 (among 1,719
and 1,473 municipals respectively), and for overall performance. Finally, our
Intermediate Bond Fund was awarded four stars for the most recent three years,
and for overall performance (among 1,751 fixed income funds).**
These successes notwithstanding, the 12-month period was anything but
smooth, with extraordinary volatility in both the stock and bond markets
littering the road to prosperity with an abundance of potholes.
Stocks: Tech names came crashing back to earth
There was a time, only a few months ago, when high-octane growth stocks
seemed impervious to the one-two punch of rising interest rates and doubts about
earnings growth. For roughly the first half of our reporting period, in fact,
many companies in the technology, telecommunications and biotechnology sectors
shrugged off these potential impediments and saw the prices of their stocks
climb ever higher. The Nasdaq Composite Index ("Nasdaq"), for example, reached
previously unheard-of levels, peaking at a closing high of 5048 on March 10.***
Then the tide turned against growth stocks. Over the next 10 weeks, the
Nasdaq lost 37 percent of its value. Other major indices also declined, though
not as dramatically. Since then, the technology-laden index has struggled to
recover, and made several attempts to regain ground. But as we write this letter
in the middle of November, Nasdaq has again slipped to its lowest levels in more
than a year.
<PAGE>
Still, for the 12 months ended October 31, 2000, both Nasdaq and the S&P
500 Index posted modest gains. All of which proves that short-term market
gyrations are best disregarded by the serious, long-term investor - who
understands that he or she can't control what the market might do day-to-day or
month-to-month, but who feels secure in his or her carefully crafted investment
strategy.
Bonds: It was better to be long than short this year
In its effort to stave off potential inflationary pressures, the Federal
Reserve began raising the Fed Funds rate - the rate banks charge one another for
overnight loans - in June 1999. Through May of this year, the Fed has hiked
rates seven times, four times during our 12-month reporting period.
Not surprisingly, fixed-income securities on the short end of the yield
curve, where the Fed's actions had the greatest impact, struggled throughout the
period. However, while the Fed influences rates for short-term paper, the bond
market itself sets yields for longer-term securities. A number of market
factors, including the Treasury Department's announcement that it would buy back
long Treasury bonds - thus making them more scarce in the fixed-income market -
helped drive long-term rates down, and bolster the prices of long securities.
(Interest rates and bond prices move in opposite directions.)
Throughout the year, our fixed-income portfolio managers continuously
monitored changing conditions in the credit market, and made a number of astute,
strategic moves to protect shareholders' capital and enhance returns. Their
results, as we noted earlier, were impressive and productive.
As always, we thank you for your support, and we look forward to fulfilling
your investment needs in the future.
Sincerely,
/s/ Thomas S. Gangel /s/ David Bunstine
Thomas S. Gangel, CFA David Bunstine
Director of Strategy and Research President
INTRUST Financial Services American Independence Funds Trust
<PAGE>
* The Standard and Poor's 500 Index is an unmanaged index generally
representative of the U.S. stock market as a whole. The index does not reflect
the deduction of fees associated with a mutual fund, such as investment
management and fund accounting fees. Investors cannot invest directly in an
index, although they can invest in its underlying securities.
** Morningstar ratings reflect historical risk-adjusted performance as of
October 31, 2000. The ratings are subject to change every month. Past
performance is not a guarantee of future results. Morningstar ratings are
calculated from a fund's 3-, 5-, and 10-year returns (with fee adjustments) in
excess of 90-day Treasury Bill returns and a risk factor that reflects fund
performance below 90-day Treasury Bill returns. The overall rating is a weighted
average of the 3-, 5- and 10-year rating (where applicable). Ten percent of the
funds in an investment category receive 5 stars, 22.5% receive 4 stars, 35%
receive 3 stars, 22.5% receive 2 stars and 10% receive 1 star.
*** The Nasdaq Composite Index is a market capitalization price-only index that
tracks the performance of domestic common stocks traded on the regular Nasdaq
market as well as National Market System-traded foreign common stocks and ADRs.
This material is authorized for distribution only when preceded or accompanied
by a prospectus. INTRUST Financial Services provides investment advisory and
other services to the Funds and receives a fee for those services. The Funds are
distributed by BISYS Fund Services Limited Partnership . Mutual funds are NOT
INSURED BY THE FDIC. There is no bank guarantee. Mutual funds may lose value.
The views expressed in this Shareholder Letter reflect those of the chief
investment officer through the end of the period covered by the report, as
stated on the cover. The chief investment officer's views are subject to change
based on market and other conditions.
<PAGE>
American Independence Funds Trust Money Market Fund
The American Independence Funds Trust Money Market Fund is managed by AMR
Investment Services, Inc., subadvisor to the Fund.
Objectives. We seek to provide investors with current income, liquidity and
a stable net asset value of $1.00 per share./1/
Strategy. We invest in high-quality, short-term obligations such as
certificates of deposit, commercial paper issued by corporations, bankers'
acceptances, bank notes and medium-term notes.
The Federal Reserve raised the Fed Funds rate - the rate banks charge one
another for overnight loans - four times during the period: in November,
February, March and May.
Early in the period, we kept the Fund's average maturity relatively short.
With the Federal Reserve steadily raising rates, a "shorter" portfolio enabled
us to respond more quickly to rising rates, and take advantage of rising-yield
opportunities.
In the period's final months, however, we began to feel that the Fed was
perhaps done with its tightening activity. This has been borne out, at least to
this point, by the fact that the Fed hasn't raised rates since May. We began
extending the portfolio, as we believe a longer average maturity works best in a
stable, or declining, interest-rate environment.
Performance. As of October 31, 2000, the Fund's 7-Day SEC yield was
6.15%.2 The weighted average maturity of the Fund's holdings was 49 days (versus
37 days six months ago)/3/.
Looking ahead, we believe the Fed likely will follow a neutral bias toward
interest rates, neither raising nor lowering rates in the foreseeable future;
the Fed Funds rate could stay unchanged for the next few Fed meetings. In fact,
it seems to us that the market, through its own activity, is hinting that the
Fed's next move could be to lower rates early next year. With this in mind, our
extended average maturity has us positioned to profit from a drop in interest
rates.
/1/ An investment in the Fund is 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.
/2/ Past performance is no indication of future performance. The yield set forth
reflects the waiver of a portion of the Fund's fees. In such instances, and
without waiver of fees, the yield would have been lower.
/3/ The composition of the Fund's holdings is subject to change.
<PAGE>
American Independence Funds Trust Short-Term Bond Fund
The American Independence Funds Trust Short-Term Bond Fund is managed by
Galliard Capital Management, Inc., subadvisor to the Fund.
Objective. We seek to provide as high a level of income as is consistent
with our philosophy of maintaining liquidity and safety of principal, by
investing in investment-grade, shorter-term securities.
Strategy. Our approach does not rely on a forecast of the future direction
of interest rates. Our strategy is to utilize fundamental security analysis to
attempt to find the most attractively priced, higher-yielding securities
available. We invest across all sectors of the fixed-income market. We use a
rigorous cash flow valuation process and pay strict attention to the timely
execution of trades, which can have a significant impact on long-term total
return.
As of October 31, 2000, the portfolio was invested in the following
sectors: mortgage-backed securities (16.3% of the Fund's net assets), U.S.
Treasury and agency debentures (39.6%), corporates (20.5%), taxable municipals
(13.8%), asset-backed securities (4.3%) and cash equivalents (5.5%). These
securities maintained an average credit quality of AA1, with a weighted average
maturity of 2.2 years./1/
For most of the period, interest rates ratcheted up on the short end of the
yield curve, as the Federal Reserve continued to battle prospective inflation by
tightening monetary policy. Consequently, the yield curve inverted - an unusual
situation in which 30-year bond yields were lower than short-term rates - and
total returns on the short end of the curve were under pressure.
These circumstances exacerbated existing market conditions on credit
spreads, the differences between yields on Treasury and non-Treasury securities
of like maturities. In a deteriorating corporate credit environment, many "old-
economy" companies tried to enhance equity shareholder value through actions
that have adversely impacted corporate bond prices. As a result, credit spreads
widened to levels not seen since the late 1980s and early 1990s, when an
economic recession and the Gulf War led to increased economic upheaval.
That said, we have strategically managed our corporate exposure
defensively; the average maturity of our corporate holdings was significantly
lower than that of our benchmark/peer group, and with longer-maturity corporate
bonds underperforming, our strategy served us well.
Performance. For the 12 months ended October 31, 2000, the Fund produced a
total return of 6.47% (excluding Service Class sales charge).2 In comparison,
the Lehman Brothers 1-3 Year Government Bond Index (the portfolio's "benchmark")
had a total return of 6.13%./3/
Going forward, we believe the environment is improving for the types of
bonds we favor - particularly in the mortgage and corporate markets. We believe
the stage is now set for continued improvement in spread product, with the
market fully discounting a slowdown/recession in upcoming years and relatively
stable interest rates. We are emphasizing taxable municipal securities, rather
than alternative fixed-income sectors, as a potential return-enhancing strategy.
What we really like about the taxable municipal market is that the issuers
generally are A-rated or better municipalities, and their general obligation
securities are backed by the taxing authority of the issuing municipalities. In
<PAGE>
addition, they aren't vulnerable to corporate bonds' "event risk," the risk that
a corporation's securities will lose value due to a negative announcement of
some sort by the company that issues the bonds.
With the economy slowing, gridlock emerging as a very real possibility in
Congress, and the Fed on hold with respect to interest rates, we anticipate a
relatively calm period in the fixed-income arena. Bond prices should remain
fairly stable, with yields acting as the principal earning component for
shareholders. This environment plays directly into our strategic positioning of
the fund.
<PAGE>
SHORT-TERM BOND FUND
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
1/21/97 10/31/97 10/31/98 10/31/99 10/31/00
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Short-Term Bond Fund* 9,625 10,122 10,827 11,081 11,800
--------------------------------------------------------------------
Lehman Brothers 1-3 Year Government
Bond Index 10,000 10,517 11,322 11,658 12,373
--------------------------------------------------------------------
</TABLE>
The chart above represents a comparison of a hypothetical $10,000 investment in
the Service Class from 1/21/97 to 10/31/00 versus a similar investment in the
Fund's benchmark, and represents the reinvestment of dividends and capital gains
in the Fund.
Average Annual Total Return as of 10/31/00/2/
Inception Date 1/21/97
Since Inception 5.54%
Since Inception* 4.47%
1 Year 6.47%
1 Year* 2.44%
/1/ The composition of the Fund's holdings is subject to change.
/2/ For the period(s) ended October 31, 2000. Past performance is no indication
of future performance. The total return set forth reflects the waiver of a
portion of the Fund's fees for certain periods since the inception date. In such
instances, and without waiver of fees, total return would have been lower. The
performance also reflects reinvestment of all dividends and capital gains
distributions. The Fund's investment return and principal value will fluctuate,
so that an investor's shares, when redeemed, may be worth more or less than
their original purchase price.
/3/ The Lehman Brothers 1-3 Year Government Bond Index is an unmanaged index
generally representative of short-term government bonds. The index does not
reflect the deduction of expenses associated with a mutual fund, such as
investment management and fund accounting fees. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
*Reflects maximum 3.75% sales charge.
<PAGE>
American Independence Funds Trust Intermediate Bond Fund
The American Independence Funds Trust Intermediate Bond Fund is managed by
Galliard Capital Management, Inc., subadvisor to the Fund.
Objectives. We seek to provide investors with a competitive total return as
is consistent with our philosophy of managing the Fund for a high level of
current income and investing primarily in high-quality fixed income securities.
Strategy. Our approach does not rely on a forecast of the future direction
of interest rates. Our strategy is to utilize fundamental security analysis to
attempt to find the most attractively priced, higher-yielding securities
available. We invest across all sectors of the fixed-income market. We use a
rigorous cash flow valuation process and pay strict attention to the timely
execution of trades, which can have a significant impact on long-term total
return.
As of October 31, 2000, the portfolio was invested in the following
sectors: corporates (24.1% of the Fund's net assets), mortgage-backed securities
(10.2%), U.S. Treasury and agency debentures (35.7%), taxable municipals
(11.3%), asset-backed securities (9.1%) and cash equivalents (9.6%). These
securities maintained an average credit quality of AA, with an weighted average
maturity of 4.8 years./1/
For most of the period, interest rates ratcheted up on the short end of the
yield curve, as the Federal Reserve continued to battle prospective inflation by
tightening monetary policy. Consequently, the yield curve inverted - an unusual
situation in which 30-year bond yields were lower than short-term rates - and
total returns on the short end of the curve were under pressure. However,
longer-term Treasury bonds performed reasonably well; among other factors, the
Treasury announced a long-bond buyback program, which boosted prices for these
securities.
These circumstances exacerbated existing market conditions on credit
spreads, the differences between yields on Treasury and non-Treasury securities
of like maturities. In a deteriorating corporate credit environment, many "old-
economy" companies tried to enhance equity shareholder value through actions
that have adversely impacted corporate bond prices. As a result, credit spreads
widened to levels not seen since the late 1980s and early 1990s, when an
economic recession and the Gulf War led to increased economic upheaval.
That said, we have strategically managed our corporate exposure
defensively; the average maturity of our corporate holdings was significantly
lower than that of our benchmark/peer group, and with longer-maturity corporate
bonds underperforming, our strategy served us well.
Performance. For the 12 months ended October 31, 2000, the Fund produced a
total return of 5.75% (excluding Service Class sales charge)./2/ In comparison,
the Lehman Brothers Intermediate Government/Credit Index (the portfolio's
"benchmark") had a total return of 6.44%./3/
Going forward, we believe the environment is improving for the types of
bonds we favor - particularly in the mortgage and corporate markets. We believe
the stage is now set for continued improvement in spread product, with the
market fully discounting a slowdown/recession in upcoming years and relatively
stable interest rates. We are emphasizing taxable municipal securities, rather
than alternative fixed-income sectors, as a potential return-enhancing strategy.
What we really like about the taxable municipal
<PAGE>
market is that the issuers generally are A-rated or better municipalities, and
their general obligation securities are backed by the taxing authority of the
issuing municipalities. In addition, they aren't vulnerable to corporate bonds'
"event risk," the risk that a corporation's securities will lose value due to a
negative announcement of some sort by the company that issues the bonds.
With the economy slowing, gridlock emerging as a very real possibility in
Congress, and the Fed on hold with respect to interest rates, we anticipate a
relatively calm period in the fixed-income arena. Bond prices should remain
fairly stable, with yields acting as the principal earning component for
shareholders. This environment plays directly into our strategic positioning of
the fund.
<PAGE>
[CHART APPEARS HERE]
INTERMEDIATE BOND FUND
<TABLE>
<CAPTION>
1/21/97 10/31/97 10/31/98 10/31/99 10/31/00
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Intermediate Bond Fund* 9,625 10,280 11,116 11,130 11,771
---------------------------------------------------------------------
Lehman Brothers Intermediate
Government/Credit Bond Index 10,000 10,636 11,604 11,719 12,473
---------------------------------------------------------------------
</TABLE>
The chart above represents a comparison of a hypothetical $10,000 investment in
the Service Class from 1/21/97 to 10/31/00 versus a similar investment in the
Fund's benchmark, and represents the reinvestment of dividends and capital gains
in the Fund.
Average Annual Total Return as of 10/31/00/2/
Inception Date 1/21/97
Since Inception 5.47%
Since Inception* 4.41%
1 Year 5.75%
1 Year* 1.83%
/1/ The composition of the Fund's holdings is subject to change.
/2/ For the period(s) ended October 31, 2000. Past performance is no indication
of future performance. The total return set forth reflects the waiver of a
portion of the Fund's fees for certain periods since the inception date. In such
instances, and without waiver of fees, total return would have been lower. The
performance also reflects reinvestment of all dividends and capital gains
distributions. The Fund's investment return and principal value will fluctuate,
so that an investor's shares, when redeemed, may be worth more or less than
their original purchase price.
/3/ The Lehman Brothers Intermediate Government/Credit Bond Index is an
unmanaged index generally representative of intermediate-term government and
corporate bonds. The index does not reflect the deduction of expenses associated
with a mutual fund, such as investment management and fund accounting fees.
Investors cannot invest directly in an index, although they can invest in its
underlying securities.
* Reflects maximum 3.75% sales charge.
<PAGE>
American Independence Funds Trust Stock Fund
The American Independence Funds Trust Stock Fund is managed by AMR Investment
Services, Inc., a wholly owned subsidiary of AMR Corporation. The Fund is
subadvised by a portfolio management team from Barrow, Hanley, Mewhinney &
Strauss, Inc.
Objectives. Our goal is to provide investors with long-term capital
appreciation. We attempt to outperform the stock market (as measured by the S&P
500 Index) over a full market cycle - which historically, lasts for
approximately five years. At the same time, we strive to reduce losses during
periods when the market is in decline.
Strategy. Our style is to identify larger, well-known companies we believe
to be undervalued and temporarily out of favor. We stay fully invested, with a
-----------
defensive, conservative orientation, based on our belief that superior returns
can be achieved while taking below-average risks. Emphasizing low price-to-book
valuations, as well as high dividend yields, can provide a measure of protection
in down markets. In addition, our equally strong emphasis on low price-to-
earnings ratios provides the potential for PE expansion and the generation of
strong excess returns in rising markets.
Early in the period, large-company growth stocks (especially in the
technology sector) - the type of stocks that generally do not fit our value
parameter - did exceedingly well. However, beginning in early spring, investor
sentiment rotated sharply to many value-oriented issues, and the Fund responded
by handsomely outperforming our benchmark, the S&P 500 Index, by a significant
margin for the 12 months as a whole.
Throughout the period, stock market momentum - whether it worked against us
or for us - did not affect the manner in which we tended to our task: uncovering
solid companies, with strong earnings prospects, selling at reasonable prices.
For example, we ended the period with a 16.5% weighting in utilities - including
Reliant Energy (4.9% of the portfolio's net assets) and Public Service
Enterprise Group (2.0%) - which is roughly seven times the overall market's
weighting. Utilities turned in a sparkling performance for us. We also were
significantly overweighted in financial stocks; our financial holdings rose
sharply, driven primarily by insurance names such as Allstate (4.6%), John
Hancock (1.5%) and Aon (2.3%). We also were fairly heavily invested in energy
for much of the year; we continue to own such names as Halliburton (2.9%), Baker
Hughes (4.0%) and Transocean Sedco Forex (3.0%).
As of October 31, 2000, approximately 95% of the portfolio was invested in
stocks, with 5% in cash or cash equivalents./1/
Performance. For the 12 months ended October 31, 2000, the Fund produced a
total return of 13.39% (excluding Service Class sales charge)./2/ In comparison,
the S&P 500 Index (the portfolio "benchmark") had a total return of 6.09%./3/
Going forward, we continue to be bullish about the energy and utility
sectors. We expect prices to continue to be high for these commodity-driven
businesses, which should accelerate earnings, especially in the producer group.
In the financial arena, we believe the property-and-casualty companies are well
positioned for strong growth.
<PAGE>
[CHART APPEARS HERE]
STOCK FUND
<TABLE>
<S> <C> <C> <C> <C> <C>
1/21/97 10/31/97 10/31/98 10/31/99 10/31/00
--------------------------------------------------------------------
Stock Fund* 9,500 10,744 12,088 12,156 13,782
--------------------------------------------------------------------
S&P 500 Index 10,000 11,798 14,393 18,088 19,190
--------------------------------------------------------------------
</TABLE>
The chart above represents a comparison of a hypothetical $10,000 investment in
the Service Class from 1/21/97 to 10/31/00 versus a similar investment in the
Fund's benchmark, and represents the reinvestment of dividends and capital gains
in the Fund.
Average Annual Total Return as of 10/31/00/2/
Inception Date 1/21/97
Since Inception 10.36%
Since Inception* 8.86%
1 Year 13.39%
1 Year* 7.76%
/1/ The composition of the Fund's holdings is subject to change.
/2/ For the period(s) ended October 31, 2000. Past performance is no indication
of future performance. The total return set forth reflects the waiver of a
portion of the Fund's fees for certain periods since the inception date. In such
instances, and without waiver of fees, total return would have been lower. The
performance also reflects reinvestment of all dividends and capital gains
distributions. The Fund's investment return and principal value will fluctuate,
so that an investor's shares, when redeemed, may be worth more or less than
their original purchase price.
/3/ The S&P 500 Index is an unmanaged index generally representative of the
stock market. The index does not reflect the deduction of expenses associated
with a mutual fund, such as investment management and fund accounting fees.
Investors cannot invest directly in an index, although they can invest in its
underlying securities.
* Reflects maximum 5.00% sales charge.
<PAGE>
American Independence Funds Trust International Multi-Manager Stock Fund/1/
The American Independence Funds Trust International Multi-Manager Stock Fund
seeks to achieve its investment objective by investing all of its investable
assets in the AMR Investment Services International Equity Portfolio. This
portfolio is managed by AMR Investment Services, Inc., a wholly owned subsidiary
of AMR Corporation. Practicing a "multi-manager" investment style, AMR
apportions responsibility for making investment management decisions to four
subadvisors: Templeton Investment Counsel, Inc. (Templeton), Merrill Lynch,
Lazard Asset Management (Lazard), and Independence Investment Associates, Inc.
(IIA).
Objective. The primary goal is to provide shareholders with long-term
capital appreciation by investing primarily in stocks of attractive companies in
markets outside the United States.
Strategy. Three of the portfolio subadvisors employ a value style of
investing, with distinct differences. Templeton combines value screens and
research with intensive fundamental analysis; Merrill Lynch focuses on earnings
and dividend yields; and Lazard searches for undervalued stocks using a country,
world and peer group perspective. These three subadvisors all perform
fundamental analysis, targeting stocks that have lower valuation ratios, and
higher growth prospects, than their respective markets' averages. In addition,
analysts routinely visit the companies in which they are interested, to gain
firsthand knowledge of companies' products, services and management.
IIA adds value to the overall portfolio's performance by ranking each of
the aggregate portfolio's holdings relative to each one's weighting in the
Morgan Stanley Capital International Europe, Australasia and Far East (MSCI
EAFE(R)) Index./2/ IIA thus identifies those stocks that constitute the
underlying managers' "best ideas" and purchases additional shares in those
specific stocks.
As of October 31, 2000, the Fund's portfolio was invested as follows:
Europe (66.1% of net assets), Asia (26.7%), Canada/Mexico (3.4%), cash and other
assets (3.8%).3 Since we're committed to putting all of our shareholders' money
to work in international stocks, each day we invest existing cash assets in a
basket of individual foreign market futures contracts.
Perhaps the biggest issue in international markets, specifically Europe,
was the weakness of the Euro, the new European currency. Since it was introduced
in January 1999, the value of the Euro has steadily plummeted. This has hampered
performance across Europe. Other factors that contributed pressure on European
markets included sharply higher oil prices, a decline in the U.S. stock market -
in many cases, foreign markets take the lead from the U.S. - and broad weakness
in telecommunications stocks from early March to the end of the period.
Telecommunication companies across Europe participated in an auction of
wireless, third-generation licenses. The bidding was fierce and companies were
forced to pay extremely high prices for the licenses they desired. As a result,
shareholder enthusiasm toward the telecom sector evaporated.
Performance. For the 12 months ended October 31, 2000, the Fund produced a
total return of 2.16% (excluding Service Class sales charge)./4/ In comparison,
the MSCI EAFE(R) Index (the portfolio's "benchmark") fell 2.90%, while the MSCI
EAFE(R) Value Index rose 1.39%./2/
<PAGE>
Our solid performance, relative to our benchmarks, was due in large measure
to our orientation toward value stocks, which performed well during the March-
October period, when technology and telecommunication issues declined
significantly.
With our eye on the next six to 12 months, we have positive expectations
toward Asia. While we are underweighted in Japan, we are overweighted in
Australia, Hong Kong, New Zealand and Singapore. Our managers have found a lot
of what they feel to be undervalued stocks throughout much of Asia. In Europe,
we are overweighted in financial, industrial and basic material companies. We
believe that oil prices should stabilize, if not fall, from their lofty levels
and the Euro will begin to find its footing; both factors could help European
stock prices recover in 2001.
<PAGE>
[CHART APPEARS HERE]
INTERNATIONAL MULTI-MANAGER STOCK FUND
<TABLE>
<S> <C> <C> <C> <C> <C>
1/20/97 10/31/97 10/31/98 10/31/99 10/31/00
----------------------------------------------------------------------
International Multi-Manager Stock Fund* 9,500 10,421 10,799 12,916 13,199
----------------------------------------------------------------------
Morgan Stanley Capital International
Europe, Australasia and Far East
(EAFE)(R) Index 10,000 10,585 11,638 14,358 13,976
----------------------------------------------------------------------
</TABLE>
The chart above represents a comparison of a hypothetical $10,000 investment in
the Service Class from 1/20/97 to 10/31/00 versus a similar investment in the
Fund's benchmark, and represents the reinvestment of dividends and capital gains
in the Fund.
Average Annual Total Return as of 10/31/00/4/
Inception Date 1/20/97
Since Inception 9.08%
Since Inception* 7.60%
1 Year 2.16%
1 Year* -2.93%
/1/ International investing involves increased risk and volatility.
/2/ The Morgan Stanley Capital International Europe, Australasia and Far East
(EAFE)(R) Index is an unmanaged index that is comprised of a sample of companies
representative of the market structure of 20 European and Pacific Basin
countries.
The Morgan Stanley Capital International indices measure performance for a
diverse range of developed country global stock markets including the United
States, Canada, Europe, Australia, New Zealand and the Far East. The foundation
of the various MSCI indices is a database of approximately 1,500 companies
listed on the stock exchanges of the 24 countries for which there are MSCI
national indices. The indices are capitalization weighted. Furthermore,
companies included in the indices replicated the industry composition of each
local market and, in addition, represent samplings of large-, medium- and small-
capitalization companies from each local market, taking into account the stocks'
liquidity. The indices do not reflect the deduction of expenses associated with
a mutual fund, such as investment management and fund accounting fees.
Investors cannot directly invest in an index, although they can invest in its
underlying securities.
/3/ The composition of the Fund's holdings is subject to change.
/4/ For the period(s) ended October 31, 2000. Past performance is no indication
of future performance. The total return set forth reflects the waiver of a
portion of the Fund's fees for certain periods since the inception date. In such
instances, and without waiver of fees, total return would have been lower. The
performance also reflects reinvestment of all dividends and capital gains
distributions. The Fund's investment return and principal value will fluctuate,
so that an investor's shares, when redeemed, may be worth more or less than
their original purchase price.
* Reflects maximum 5.00% sales charge.
<PAGE>
American Independence Funds Trust Kansas Tax-Exempt Bond Fund
The American Independence Funds Trust Kansas Tax-Exempt Bond Fund was managed by
a team of fixed-income portfolio managers at INTRUST Financial Services.
Effective November 1, 2000 the Fund will be managed by Galliard Capital
Management, Inc., subadvisor to the Fund.
Objectives. We seek to preserve capital while producing current income
that is free from both Federal and Kansas State income taxes./1/
Strategy. Nearly our entire portfolio is comprised of municipal bonds
issued by government entities in the state of Kansas. A small percentage of our
holdings can be in various non-Kansas securities, which by their special tax
treatment are exempt from Federal and Kansas income taxes. Examples of these are
bonds issued by Puerto Rico, Guam and the Virgin Islands.
We keep the portfolio's average maturity between seven and 12 years; we
are permitted by the prospectus to lower the average maturity to less than seven
years if we anticipate a volatile interest-rate environment.
As of October 31, 2000, approximately 97.2% of the portfolio was
comprised of Kansas bonds - with 0.2% invested in debt obligations issued in
Guam, and 2.6% in cash equivalents.
The securities within the Fund maintained an average credit quality of
AA+, with a weighted average maturity of approximately 8 years./2/
In its ongoing effort to contain potential inflationary pressures, the
Federal Reserve continued to raise short-term interest rates throughout the
period. The Fed's aggressive stance helped produce an inverted, taxable yield
curve - in which short-term rates were higher than long-term yields. However,
the municipal yield curve, the plane on which we operate, remained flat. This
relative, yield stability in the municipal market was productive for
shareholders.
Another positive factor was a dearth of Kansas municipal bonds; for the
calendar year 2000, through October 31, Kansas bond issuance was down 45% from
the previous year. In a supply-and-demand environment, lack of supply pushes up
bond prices, and the securities in our portfolio as a whole appreciated nicely
from this situation.
Performance. For the 12 months ended October 31, 2000, the Fund
produced a total return of 7.10% (excluding Service Class sales charge).3 In
comparison, the Lehman Brothers 7-Year General Obligation Index (the Fund's
"benchmark") had a total return of 6.77%./4/
Our relative outperformance was due, in part, to the limited supply of
new Kansas bonds, our longer-than-average maturity, and our overweighting in
stable general obligation bonds, which are backed by the full faith and credit
of the issuing authority.
Looking ahead, we don't expect the Federal Reserve to make any dramatic
moves over the next six months. In our market, interest rates have an enormous
impact, and we feel comfortable that the rate environment will remain
constructive for some time. We believe that municipal bonds still offer
tremendous value.
<PAGE>
[CHART APPEARS HERE]
KANSAS TAX-EXEMPT BOND FUND/1/
<TABLE>
<CAPTION>
12/10/10 10/31/91 10/31/92 10/31/93 10/31/94 10/31/95 10/31/96 10/31/97 10/31/98
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Kansas Tax-Exempt Bond Fund* 9,625 10,271 11,065 12,394 12,208 13,522 14,138 15,132 16,194
-------------------------------------------------------------------------------------------------------
Lehman Brothers 7-Year
General Obligation Index 10,000 10,896 11,764 13,162 12,896 14,534 15,224 16,380 17,599
-------------------------------------------------------------------------------------------------------
<CAPTION>
10/31/99 10/31/00
-------------------------
<S> <C> <C>
Kansas Tax-Exempt Bond Fund* 15,787 16,907
-------------------------
Lehman Brothers 7-Year
General Obligation Index 17,611 18,885
-------------------------
</TABLE>
The chart above represents a comparison of a hypothetical $10,000 investment in
the Service Class from 12/10/90 to 10/31/00 versus a similar investment in the
Fund's benchmark, and represents the reinvestment of dividends and capital gains
in the Fund.
Average Annual Total Return as of 10/31/00/3/
Inception Date/3/ 12/10/90
Since Inception 5.86%
Since Inception* 5.45%
1 Year 7.10%
1 Year/*/ 3.13%
5 Year 4.57%
5 Year/*/ 3.76%
/1/ Regional funds may be subject to additional risk, since the issues they
invest in are located in one geographical location. The Fund's income may be
subject to certain state and local taxes and, depending on your tax status, the
federal alternative minimum tax.
/2/ The composition of the Fund's holdings is subject to change.
/3/ For the period(s) ended October 31, 2000. Past performance is no indication
of future performance. The total return set forth reflects the waiver of a
portion of the Fund's fees for certain periods since the inception date. In such
instances, and without waiver of fees, total return would have been lower. The
Fund's investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their original
purchase price.
On May 17, 1997, the Kansas Tax-Exempt Income Portfolio (the "SEI Portfolio") of
the SEI Tax-Exempt Trust was reorganized into the INTRUST Funds Trust Kansas
Tax-Exempt Bond Fund, using substantially the same investment objectives,
policies and methodologies of the SEI Portfolio. The quoted performance of the
Fund includes performance of the SEI Portfolio from December 10, 1990 to May 16,
1997. The performance also reflects reinvestment of all dividends and capital
gains distributions.
/4/ The Lehman Brothers 7-Year General Obligation Index is an unmanaged index
generally representative of intermediate-term municipal bonds. The index does
not reflect the deductions of expenses associated with a mutual fund, such as
investment management and fund accounting fees. Investors cannot invest directly
in a index, although they can invest in its underlying securities.
* Reflects maximum 3.75% sales charge.
<PAGE>
Independent Auditors' Report
The Shareholders and Board of Trustees of the
American Independence Funds Trust:
We have audited the accompanying statements of assets and liabilities of the
American Independence Funds Trust - Money Market Fund, Short-Term Bond Fund,
Intermediate Bond Fund, Stock Fund, International Multi-Manager Stock Fund and
Kansas Tax-Exempt Bond Fund (the Trust), including the schedules of portfolio
investments as of October 31, 2000, and the related statements of operations,
statements of changes in net assets and the financial highlights for each of the
periods indicated herein. These financial statements and the financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. With respect to the Kansas Tax-Exempt Bond Fund, the
accompanying financial highlights for the year ended August 31, 1996, were
audited by other auditors whose report thereon dated October 11, 1996 expressed
an unqualified opinion on the financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included verification
of securities owned as of October 31, 2000, by confirmation with the custodian,
correspondence with brokers and other appropriate audit procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Trust as of October 31, 2000, and the results of their operations, the changes
in their net assets and the financial highlights for each of the periods
indicated herein, in conformity with accounting principles generally accepted in
the United States of America.
KPMG LLP
Columbus, Ohio
December 12, 2000
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Money Market Fund
Statement of Assets and Liabilities
October 31, 2000
Assets:
Investments, at amortized cost $ 65,513,253
Repurchase agreement, at cost 8,094,086
-----------------
Total Investments 73,607,339
Interest and dividends receivable 517,730
Unamortized organizational costs 28,005
Prepaid expenses and other assets 3,496
-----------------
Total Assets 74,156,570
Liabilities:
Dividends payable $ 397,956
Accrued expenses and other payables:
Investment advisory fees 9,706
Service organization fees 5,177
Administration fees 2,562
Custodian fees 1,294
Other payables 13,299
Total Liabilities 429,994
-----------------
Net Assets consist of:
Capital $ 73,710,669
Undistributed net investment income 15,907
-----------------
Net Assets $ 73,726,576
=================
Service Shares:
Net Assets $ 73,726,576
Outstanding Units of Beneficial Interest (Shares): 73,722,933
Offering and redemption price per share $ 1.00
=================
Statement of Operations
For the year ended October 31, 2000
Investment Income:
Interest income $ 4,884,351
-----------------
Total Income 4,884,351
Expenses:
Investment advisory fees $ 192,115
Service organization fees 192,115
12b-1 fees 192,115
Administration fees 153,692
Accounting fees 30,090
Transfer agent fees 12,000
Custodian fees 15,368
Other fees 82,039
Total expenses before waivers 869,534
Less expenses waived (411,540)
-----------------
Net expenses 457,994
-----------------
Net Investment Income 4,426,357
-----------------
Realized Gains on Investments:
Net realized gains on investment transactions 1,524
-----------------
Increase in Net Assets Resulting from
Operations $ 4,427,881
=================
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Money Market Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
Year ended Year ended
October 31, October 31,
2000 1999
-------------- --------------
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 4,426,357 $ 3,577,031
Net realized gains on investment transactions 1,524 499
-------------- --------------
Change in net assets resulting from operations 4,427,881 3,577,530
-------------- --------------
Distributions to Shareholders:
From net investment income (4,426,357) (3,577,031)
-------------- --------------
Total distributions to shareholders (4,426,357) (3,577,031)
Capital Transactions:
Proceeds from shares issued 140,644,154 231,631,408
Dividends reinvested 6,752 5,086
Cost of shares redeemed (164,289,922) (185,018,909)
-------------- --------------
Change in net assets from capital transactions (23,639,016) 46,617,585
-------------- --------------
Change in net assets (23,637,492) 46,618,084
Net Assets:
Beginning of period 97,364,068 50,745,984
-------------- --------------
End of period $ 73,726,576 $ 97,364,068
============== ==============
Share Transactions:
Issued 140,644,154 231,631,408
Reinvested 6,752 5,086
Redeemed (164,289,922) (185,018,909)
-------------- --------------
Change in shares (23,639,016) 46,617,585
============== ==============
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Short-Term Bond Fund
Statement of Assets and Liabilities
October 31, 2000
Assets:
Investments, at value (cost $50,253,708) $ 50,231,600
Investments in affiliates, at value (cost $1,375,406) 1,375,406
-----------------
Total Investments 51,607,006
Interest and dividends receivable 649,405
Receivable for investments sold 2,879
Unamortized organizational costs 7,388
Prepaid expenses and other assets 1,571
-----------------
Total Assets 52,268,249
Liabilities:
Dividends payable $ 255,057
Accrued expenses and other payables:
Investment advisory fees 8,380
Service organization fees 3,528
Administration fees 1,705
Custodian fees 882
Other payables 14,528
Total Liabilities 284,080
-----------------
Net Assets consist of:
Capital $ 52,460,846
Undistributed net investment income 3,027
Accumulated net realized losses on investment
transactions (457,596)
Net unrealized depreciation of investments (22,108)
-----------------
Net Assets $ 51,984,169
=================
Service Shares:
Net Assets $ 51,984,169
Outstanding Units of Beneficial Interest (Shares): 5,219,465
Redemption price per share $ 9.96
=================
Maximum Sales Charge - Service Shares 3.75%
-----------------
Maximum Offering Price (100%/(100%-
Maximum Sales Charge) of net asset value
adjusted to the nearest cent) per share -
Service Shares $ 10.35
=================
Statement of Operations
For the year ended October 31, 2000
Investment Income:
Interest income $ 3,377,350
Dividend income 24,971
Dividend income from affiliates 88,379
----------------
Total Income 3,490,700
Expenses:
Investment advisory fees $ 222,336
Service organization fees 138,959
12b-1 fees 138,959
Administration fees 111,168
Accounting fees 32,876
Transfer agent fees 12,000
Custodian fees 11,116
Other fees 49,810
Total expenses before waivers 717,224
Less expenses waived (360,146)
----------------
Net expenses 357,078
----------------
Net Investment Income 3,133,622
----------------
Realized/Unrealized Gains/(Losses) on
Investments:
Net realized losses on investment
transactions (444,448)
Net change in unrealized appreciation/depreciation
of investments 723,912
----------------
Net realized/unrealized gains/(losses) on
investments 279,464
----------------
Increase in Net Assets Resulting from
Operations $ 3,413,086
================
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Short-Term Bond Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
Year ended Year ended
October 31, October 31,
2000 1999
------------------- -------------------
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 3,133,622 $ 3,321,275
Net realized gains/(losses) on investment transactions (444,448) 38,185
Net change in unrealized appreciation/depreciation of investments 723,912 (1,901,420)
------------------- -------------------
Change in net assets resulting from operations 3,413,086 1,458,040
------------------- -------------------
Distributions to Shareholders:
From net investment income (3,133,622) (3,321,275)
From net realized gains on investment transactions (2,270) -
In excess of net realized gains (14,814) -
------------------- -------------------
Total distributions to shareholders (3,150,706) (3,321,275)
Capital Transactions:
Proceeds from shares issued 6,496,223 14,900,559
Dividends reinvested 1,031,666 1,065,943
Cost of shares redeemed (17,107,632) (14,172,666)
------------------- -------------------
Change in net assets from capital transactions (9,579,743) 1,793,836
------------------- -------------------
Change in net assets (9,317,363) (69,399)
Net Assets:
Beginning of period 61,301,532 61,370,931
------------------- -------------------
End of period $ 51,984,169 $ 61,301,532
=================== ===================
Share Transactions:
Issued 658,743 1,481,302
Reinvested 104,650 106,091
Redeemed (1,735,867) (1,412,655)
------------------- -------------------
Change in shares (972,474) 174,738
=================== ===================
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Intermediate Bond Fund
Statement of Assets and Liabilities
October 31, 2000
Assets:
Investments, at value (cost $44,799,592) $ 44,447,836
Investments in affiliates, at value (cost $344,294) 344,294
-----------------
Total Investments 44,792,130
Interest and dividends receivable 663,688
Receivable for investments sold 893,631
Unamortized organizational costs 6,864
Prepaid expenses and other assets 1,997
-----------------
Total Assets 46,358,310
Liabilities:
Dividends payable $ 234,967
Accrued expenses and other payables:
Investment advisory fees 11,448
Service organization fees 3,158
Administration fees 1,513
Custodian fees 789
Other payables 14,749
Total Liabilities 266,624
-----------------
Net Assets consist of:
Capital $ 47,581,202
Distributions in excess of net investment income (1,332)
Accumulated net realized losses on investment
transactions (1,136,428)
Net unrealized depreciation of investments (351,756)
-----------------
Net Assets $ 46,091,686
=================
Service Shares:
Net Assets $ 46,091,686
Outstanding Units of Beneficial Interest (Shares): 4,692,086
Redemption price per share $ 9.82
=================
Maximum Sales Charge - Service Shares 3.75%
-----------------
Maximum Offering Price (100%/(100%-
Maximum Sales Charge) of net asset value
adjusted to the nearest cent) per share -
Service Shares $ 10.20
=================
Statement of Operations
For the year ended October 31, 2000
Investment Income:
Interest income $ 3,292,158
Dividend income 327
Dividend income from affiliates 40,814
-----------------
Total Income 3,333,299
Expenses:
Investment advisory fees $ 197,230
Service organization fees 123,268
12b-1 fees 123,268
Administration fees 98,615
Accounting fees 33,962
Transfer agent fees 12,000
Custodian fees 9,861
Other fees 46,571
Total expenses before waivers 644,775
Less expenses waived (271,333)
-----------------
Net expenses 373,442
-----------------
Net Investment Income 2,959,857
-----------------
Realized/Unrealized Gains/(Losses) on
Investments:
Net realized losses on investment
transactions (1,025,742)
Net change in unrealized appreciation/depreciation
of investments 709,200
-----------------
Net realized/unrealized gains/(losses) on
investments (316,542)
-----------------
Increase in Net Assets Resulting from
Operations $ 2,643,315
=================
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Intermediate Bond Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
Year ended Year ended
October 31, October 31,
2000 1999
-------------------- -------------------
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 2,959,857 $ 3,151,555
Net realized losses on investment transactions (1,025,742) (114,143)
Net change in unrealized appreciation/depreciation of investments 709,200 (3,017,293)
-------------------- -------------------
Change in net assets resulting from operations 2,643,315 20,119
-------------------- -------------------
Distributions to Shareholders:
From net investment income (2,959,857) (3,151,555)
In excess of net realized gains - (26,524)
-------------------- -------------------
Total distributions to shareholders (2,959,857) (3,178,079)
Capital Transactions:
Proceeds from shares issued 9,187,452 20,003,672
Dividends reinvested 765,421 867,934
Cost of shares redeemed (19,636,093) (14,615,013)
-------------------- -------------------
Change in net assets from capital transactions (9,683,220) 6,256,593
-------------------- -------------------
Change in net assets (9,999,762) 3,098,633
Net Assets:
Beginning of period 56,091,448 52,992,815
-------------------- -------------------
End of period $ 46,091,686 $ 56,091,448
==================== ===================
Share Transactions:
Issued 946,052 1,966,594
Reinvested 78,733 85,790
Redeemed (2,022,973) (1,444,364)
-------------------- -------------------
Change in shares (998,188) 608,020
==================== ===================
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Stock Fund
Statement of Assets and Liabilities
October 31, 2000
Assets:
Investments, at value (cost $71,242,549) $ 80,011,405
Investments in affiliates, at value (cost $3,685,516) 3,685,516
-----------------
Total Investments 83,696,921
Dividends receivable 157,674
Unamortized organizational costs 10,190
Prepaid expenses and other assets 3,252
-----------------
Total Assets 83,868,037
Liabilities:
Accrued expenses and other payables:
Investment advisory fees $ 59,405
Service organization fees 5,463
Administration fees 2,660
Custodian fees 1,366
Other payables 8,150
Total Liabilities 77,044
-----------------
Net Assets consist of:
Capital $ 82,791,634
Undistributed net investment income 1,131,602
Accumulated net realized losses on investment
transactions (8,901,099)
Net unrealized appreciation of investments 8,768,856
-----------------
Net Assets $ 83,790,993
=================
Service Shares:
Net Assets $ 83,790,993
Outstanding Units of Beneficial Interest (Shares): 7,554,010
Redemption price per share $ 11.09
=================
Maximum Sales Charge - Service Shares 5.00%
-----------------
Maximum Offering Price (100%/(100%-
Maximum Sales Charge) of net asset value
adjusted to the nearest cent) per share -
Service Shares $ 11.67
=================
Statement of Operations
For the year ended October 31, 2000
Investment Income:
Dividend income $ 2,287,883
Dividend income from affiliates 168,015
Foreign tax withholding (4,586)
-----------------
Total Income 2,451,312
Expenses:
Investment advisory fees $ 811,956
Service organization fees 202,989
12b-1 fees 202,989
Administration fees 162,392
Accounting fees 30,000
Transfer agent fees 12,000
Custodian fees 16,238
Other fees 44,703
Total expenses before waivers 1,483,267
Less expenses waived (457,540)
-----------------
Net expenses 1,025,727
-----------------
Net Investment Income 1,425,585
-----------------
Realized/Unrealized Gains/(Losses) on
Investments:
Net realized losses on investment
transactions (7,121,471)
Net change in unrealized appreciation/depreciation
of investments 13,891,151
-----------------
Net realized/unrealized gains/(losses) on
investments 6,769,680
-----------------
Increase in Net Assets Resulting from
Operations $ 8,195,265
=================
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Stock Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
Year ended Year ended
October 31, October 31,
2000 1999
------------------- ---------------------
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 1,425,585 $ 995,165
Net realized gains/(losses) on investment transactions (7,121,471) 2,131,229
Net change in unrealized appreciation/depreciation of investments 13,891,151 (2,604,259)
------------------- ---------------------
Change in net assets resulting from operations 8,195,265 522,135
------------------- ---------------------
Distributions to Shareholders:
From net investment income (1,086,190) (694,971)
From net realized gains on investment transactions (2,064,548) (14,130,033)
In excess of net realized gains (1,779,623) -
------------------- ---------------------
Total distributions to shareholders (4,930,361) (14,825,004)
Capital Transactions:
Proceeds from shares issued 14,660,955 53,726,460
Dividends reinvested 2,679,001 7,647,655
Cost of shares redeemed (40,193,379) (44,215,795)
------------------- ---------------------
Change in net assets from capital transactions (22,853,423) 17,158,320
------------------- ---------------------
Change in net assets (19,588,519) 2,855,451
Net Assets:
Beginning of period 103,379,512 100,524,061
------------------- ---------------------
End of period $ 83,790,993 $ 103,379,512
=================== =====================
Share Transactions:
Issued 1,508,920 4,880,076
Reinvested 293,428 731,133
Redeemed (4,256,474) (3,931,066)
------------------- ---------------------
Change in shares (2,454,126) 1,680,143
=================== =====================
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
International Multi-Manager Stock Fund
Statement of Assets and Liabilities
October 31, 2000
Assets:
Investments in AMR Investment Services
International Equity Portfolio,
at value (cost $61,787,719) $ 60,196,372
Unamortized organizational costs 4,448
Prepaid expenses and other assets 1,871
-----------------
Total Assets 60,202,691
Liabilities:
Accrued expenses and other payables:
Investment advisory fees $ 17,347
Service organization fees 3,965
Administration fees 1,441
Other payables 10,654
Total Liabilities 33,407
-----------------
Net Assets consist of:
Capital $ 54,669,284
Undistributed net investment income 224,110
Accumulated net realized gains on investment
transactions 6,867,237
Net unrealized depreciation of investments (1,591,347)
-----------------
Net Assets $ 60,169,284
=================
Service Shares:
Net Assets $ 60,169,284
Outstanding Units of Beneficial Interest (Shares): 4,736,644
Redemption price per share $ 12.70
=================
Maximum Sales Charge - Service Shares 5.00%
-----------------
Maximum Offering Price (100%/(100%-
Maximum Sales Charge) of net asset value
adjusted to the nearest cent) per share -
Service Shares $ 13.37
=================
Statement of Operations
For the year ended October 31, 2000
Investment Income Allocated from
International Equity Portfolio:
Income from International Equity Portfolio $ 1,687,445
Foreign tax withholding (217,936)
Expenses from International Equity Portfolio (279,737)
-----------------
Total Income 1,189,772
Expenses:
Investment advisory fees $ 253,646
Service organization fees 158,528
12b-1 fees 158,528
Administration fees 95,118
Accounting fees 30,000
Transfer agent fees 12,000
Other fees 47,020
Total expenses before waivers 754,840
Less expenses waived (306,725)
-----------------
Net expenses 448,115
-----------------
Net Investment Income 741,657
-----------------
Realized/Unrealized Gains/(Losses) on
Investments:
Net realized gains on investment
transactions 6,228,475
Net change in unrealized appreciation/depreciation
of investments (5,224,492)
-----------------
Net realized/unrealized gains/(losses) on
investments 1,003,983
-----------------
Increase in Net Assets Resulting from
Operations $ 1,745,640
=================
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
International Multi-Manager Stock Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
Year ended Year ended
October 31, October 31,
2000 1999
------------------- -------------------
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 741,657 $ 931,117
Net realized gains on investment transactions 6,228,475 5,627,957
Net change in unrealized appreciation/depreciation of investments (5,224,492) 3,715,892
------------------- -------------------
Change in net assets resulting from operations 1,745,640 10,274,966
------------------- -------------------
Distributions to Shareholders:
From net investment income (854,824) (707,672)
From net realized gains on investment transactions (2,856,562) -
------------------- -------------------
Total distribution to shareholders (3,711,386) (707,672)
Capital Transactions:
Proceeds from shares issued 14,104,077 18,949,717
Dividends reinvested 1,938,090 353,424
Cost of shares redeemed (17,348,356) (20,933,756)
------------------- -------------------
Change in net assets from capital transactions (1,306,189) (1,630,615)
------------------- -------------------
Change in net assets (3,271,935) 7,936,679
Net Assets:
Beginning of period 63,441,219 55,504,540
------------------- -------------------
End of period $ 60,169,284 $ 63,441,219
=================== ===================
Share Transactions:
Issued 1,063,497 1,571,935
Reinvested 144,850 30,520
Redeemed (1,295,298) (1,759,367)
------------------- -------------------
Change in shares (86,951) (156,912)
=================== ===================
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Statement of Assets and Liabilities
October 31, 2000
Assets:
Investments, at value (cost $140,402,716) $ 139,354,792
Interest and dividends receivable 1,878,406
Prepaid expenses and other assets 1,752
----------------
Total Assets 141,234,950
Liabilities:
Dividends payable $ 541,552
Accrued expenses and other payables:
Investment advisory fees 23,377
Service organization fees 9,461
Administration fees 4,609
Custodian fees 2,365
Other payables 20,741
Total Liabilities 602,105
----------------
Net Assets consist of:
Capital 143,716,555
Undistributed net investment income 2,264
Accumulated net realized losses on investment
transactions (2,038,050)
Net unrealized depreciation of investments (1,047,924)
----------------
Net Assets $ 140,632,845
================
Service Shares:
Net Assets $ 140,632,845
Outstanding Units of Beneficial Interest (Shares): 13,585,898
Redemption price per share $ 10.35
================
Maximum Sales Charge - Service Shares 3.75%
----------------
Maximum Offering Price (100%/(100%-
Maximum Sales Charge) of net asset value
adjusted to the nearest cent) per share -
Service Shares $ 10.75
================
Statement of Operations
For the year ended October 31, 2000
Investment Income:
Interest Income $ 7,227,670
Dividend income 54,125
----------------
Total Income 7,281,795
Expenses:
Investment advisory fees $ 418,461
Service organization fees 348,718
12b-1 fees 348,718
Administration fees 278,976
Accounting fees 36,220
Transfer agent fees 12,000
Custodian fees 27,895
Other fees 95,101
Total expenses before waivers 1,566,089
Less expenses waived (729,145)
----------------
Net expenses 836,944
----------------
Net Investment Income 6,444,851
----------------
Realized/Unrealized Gains/(Losses) on
Investments:
Net realized losses on investment
transactions (1,380,263)
Net change in unrealized appreciation/depreciation
of investments 4,371,752
----------------
Net realized/unrealized gains/(losses) on
investments 2,991,489
----------------
Increase in Net Assets Resulting from
Operations $ 9,436,340
================
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
Year ended Year ended
October 31, October 31,
2000 1999
-------------------- --------------------
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income $ 6,444,851 $ 6,614,714
Net realized losses on investment transactions (1,380,263) (657,785)
Net change in unrealized appreciation/depreciation of investments 4,371,752 (10,012,344)
-------------------- --------------------
Change in net assets resulting from operations 9,436,340 (4,055,415)
-------------------- --------------------
Distributions to Shareholders:
From net investment income (6,444,851) (6,614,714)
In excess of net realized gains - (595,564)
-------------------- --------------------
Total distributions to shareholders (6,444,851) (7,210,278)
Capital Transactions:
Proceeds from shares issued 24,653,585 54,885,662
Dividends reinvested 696,883 779,890
Cost of shares redeemed (33,316,258) (31,710,177)
-------------------- --------------------
Change in net assets from capital transactions (7,965,790) 23,955,375
-------------------- --------------------
Change in net assets (4,974,301) 12,689,682
Net Assets:
Beginning of period 145,607,146 132,917,464
-------------------- --------------------
End of period $ 140,632,845 $ 145,607,146
==================== ====================
Share Transactions:
Issued 2,417,845 5,132,032
Reinvested 68,775 73,066
Redeemed (3,285,208) (3,018,624)
-------------------- --------------------
Change in shares (798,588) 2,186,474
==================== ====================
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Money Market Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Amortized
Amount Cost
------ ----
<S> <C> <C>
Bank Notes (22.7%)
Banking (22.7%)
Banco Popular de Puerto Rico, 6.79%*, $3,000,000 $3,000,000
11/27/00
Bank of America Corp., 6.71%*, 12/11/00 3,000,000 3,001,208
Bank One Corp., 6.68%*, 12/7/00 3,000,000 3,000,937
Branch Banking & Trust, 6.64%*, 11/17/00 3,000,000 2,999,537
Fleet National Bank, 6.78%*, 1/31/01 1,750,000 1,750,653
US Bank NA/Minnesota, 6.79%*, 12/18/00 3,000,000 3,003,738
----------
Total Bank Notes (Cost $16,756,073) 16,756,073
----------
Commercial Paper (24.1%)
Asset Backed Securities (12.0%)
Barton Capital Corp., 6.54%**, 1/23/01 (b) 3,000,000 2,954,765
Govco Inc., 6.57%**, 1/22/01 (b) 3,000,000 2,955,105
Moat Funding, 6.55%**, 1/29/01 (b) 3,000,000 2,951,421
----------
8,861,291
----------
Banking (4.0%)
Fortis Funding LLC, 6.46%**, 3/27/01 (b) 3,000,000 2,921,403
----------
Financial - Leasing Company (4.0%)
General Electric Capital Corp., 6.53%**, 1/25/01 3,000,000 2,953,746
----------
Food Products & Services (4.1%)
Unilever Capital Corp., 6.68%*, 12/7/00 (b) 3,000,000 3,000,000
----------
Total Commercial Paper (Cost $17,736,440) 17,736,440
----------
Funding Agreements (4.1%)
The Travelers Insurance Co., 6.87%*, 1/12/01 (c) 3,000,000 3,000,000
----------
Total Funding Agreements (Cost $3,000,000) 3,000,000
----------
Medium Term/Senior Notes (37.9%)
Banking (12.1%)
Firstar Corp., 6.97%*, 11/3/00 3,000,000 3,006,608
Wachovia Bank, 6.67%*, 1/26/00 3,000,000 2,999,951
Wells Fargo Co., 6.86%*, 12/15/00 3,000,000 3,005,944
----------
9,012,503
----------
Banking & Finance (4.1%)
Credit Suisse First Boston, 6.76%*, 1/15/01 3,000,000 3,000,000
----------
Brokerage Services (4.1%)
Goldman Sachs Group, Inc., 6.94%*, 1/25/01 3,000,000 3,001,271
----------
</TABLE>
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Money Market Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Amortized
Amount Cost
------ ----
<S> <C> <C>
Financial Services (13.5%)
Associates Corp., 6.80%*, 1/5/01 $3,000,000 $ 3,001,280
Merrill Lynch, 6.79%*, 11/1/00 3,000,000 3,003,224
Morgan Stanley Dean Witter, 6.94%*, 11/10/00 4,000,000 4,002,462
----------
10,006,966
Motor Vehicles (4.1%)
American Honda Finance, 6.66%*, 12/22/00 3,000,000 3,000,000
----------
Total Medium Term/Senior Notes (Cost $28,020,740) 28,020,740
----------
Repurchase Agreement (11.0%)
Goldman, Sachs & Co., 6.61% dated 8,094,086 8,094,086
----------
10/31/00, due 11/1/00, with a maturity
value of $8,095,572 (Collateralized by
Freddie Mac Bonds, principal amount of
$8,207,163, 7.00%, 6/1/29, market value of $8,255,968)
Total Repurchase Agreement (Cost $8,094,086) 8,094,086
----------
Total Investments (Cost $73,607,339) (a) - 99.8% 73,607,339
Other assets in excess of liabilities - 0.2% 119,237
----------
NET ASSETS - 100.0% $73,726,576
==========
</TABLE>
------------
(a) Cost for federal income tax and financial reporting purposes are the same.
(b) Represents Section 4(2) commercial paper which is exempt from registration
under the Securities Act of 1933, as amended. These securities have been
determined to be liquid by procedures approved by the board of trustees.
(c) Illiquid security with a market value which represents 4.1% of the market
value of the Fund's investments.
* Variable rate securities. The rate reflected on the Schedule of Portfolio
Investments is the rate in effect at October 31, 2000. Maturity date reflects
next rate change date.
** Discount Securities. The rate represents the effective yield on date of
purchase.
LLC - Limited Liability Corp.
See notes to financial statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Short-Term Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Asset Backed Securities (4.3%)
Household Consumer Loan Trust, Series $ 506,582 $ 507,390
1995-1, Class A, 6.86%*, 11/15/00
Main Place Fund, Series 1999-1, 6.81%*, 1,000,000 998,525
11/27/00
MBNA Master Credit Card Trust, 6.88%*, 750,000 751,954
--------
11/15/00
Total Asset Backed Securities (Cost $2,258,197) 2,257,869
---------
Collateralized Mortgage Obligations (16.3%)
Commercial Loan Funding Trust, Series 1, 357,798 357,082
Class A, 6.88%*, 11/15/00 (b)
Fannie Mae, Series 1999-19, Class LA, 1,750,000 1,738,266
6.50%, 9/25/08
Fannie Mae, Series 1999-19, Class PB, 1,500,000 1,483,298
6.00%, 6/25/08
Fannie Mae, Series 1999-19, Class PC, 1,250,000 1,231,831
6.00%, 9/25/14
Freddie Mac, Series 1694, Class A, 6.50%, 750,000 739,354
9/15/23
Freddie Mac, Series 1708, Class B, 6.00%, 107,969 107,579
4/15/06
Freddie Mac, Series 2091, Class PC, 1,250,000 1,226,581
6.00%, 6/15/16
Independent National Mortgage Corp., 206,095 210,852
9.14%*, 11/25/00
Merrill Lynch Mortgage Investors, Inc., 423,043 424,607
Series 1993-F, Class A3, 7.25%*, 11/15/00
Merrill Lynch Mortgage Investors, Inc., 106,654 106,257
Series 1992-H, Class A1-1, 7.79%*,
11/25/00
Merrill Lynch Mortgage Investors, Inc., 139,755 140,003
Series 1994-D, Class A, 7.92%*, 11/25/00
Merrill Lynch Mortgage Investors, Inc., 66,701 67,947
Series 1994-I, Class A1, 8.89%*, 11/25/00
Vendee Mortgage Trust, Series 1993-1, 631,963 630,393
---------
Class E, 7.00%, 1/15/16
Total Collateralized Mortgage Obligations (Cost $8,534,487) 8,464,050
---------
Corporate Bonds (20.5%)
Aerospace/Defense Equipment (0.3%)
Lockheed Martin Corp., 7.95%, 12/1/05 140,000 144,006
---------
Automotive (0.3%)
TRW, Inc., 6.63%, 6/1/04 165,000 157,880
---------
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Short-Term Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Banking (1.6%)
Citicorp, 9.50%, 2/1/02 $ 400,000 $ 412,496
PNC Bank N.A., 7.88%, 4/15/05 400,000 414,355
----------
826,851
----------
Computer Hardware (0.7%)
Sun Microsystems, Inc., 7.00%, 8/15/02 375,000 374,868
----------
Diversified (0.5%)
Tyco International Ltd., 6.50%, 11/1/01 250,000 248,796
----------
Financial Services (5.0%)
First Data Corp., 6.82%, 9/18/01 750,000 749,002
Ford Capital BV, 9.38%, 5/15/01 1,100,000 1,113,396
General Electric Capital Corp., 6.29%*, 750,000 746,104
----------
12/15/01
2,608,502
----------
Food/Beverage Products (1.1%)
Nabisco, Inc., 6.00%, 2/15/01 250,000 248,318
Whitman Corp., 7.50%, 8/15/01 300,000 300,171
----------
548,489
----------
Industrial Goods & Services (0.5%)
Cargill, Inc., 7.72%, 2/12/02 (b) 235,562 236,474
----------
Oil & Gas Exploration Products & Services (0.5%)
Union Pacific Resources, 6.50%, 5/15/05 275,000 266,522
----------
Oil Field Services (1.0%)
Colonial Pipeline, 7.13%, 8/15/02 (b) 500,000 497,184
----------
Paper/Forest Products (0.4%)
International Paper Co., 8.00%, 7/8/03 (b) 225,000 228,825
----------
Pipelines (0.8%)
Enron Corp., 9.13%, 4/1/03 400,000 417,532
----------
Railroads (1.7%)
Norfolk Southern Corp., 6.88%, 5/1/01 525,000 524,004
Union Pacific Corp., 7.37%*, 1/2/01 385,000 385,403
----------
909,407
----------
Restaurants/Food Services (1.5%)
McDonald's Corp., 6.00%, 6/23/02 800,000 788,612
----------
Retail Stores/Catalog (1.2%)
Mall of America Capital Co., LLC, 6.92%*, 600,000 600,000
----------
11/12/00 (b)
Telecommunications (3.4%)
AT&T Corp., 5.63%, 3/15/04 1,000,000 942,036
Bell Atlantic Financial Services, 6.74%*, 400,000 400,238
12/21/00
Sprint Corp., 8.13%, 7/15/02 400,000 405,057
----------
1,747,331
----------
Total Corporate Bonds (Cost $10,677,621) 10,601,279
----------
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Short-Term Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
U.S. Government Bond (2.7%)
Housing and Urban Development (2.7%)
Housing Urban Development, 7.13%, 8/1/03 $1,400,000 $1,424,353
----------
Total U.S. Government Bond (Cost $1,400,000) 1,424,353
----------
Medium Term/Senior Notes (2.2%)
Banking (0.8%)
Mercantile Bancorp, 7.05%, 6/15/04 400,000 398,358
----------
Diversified (1.4%)
USAA Capital Corp., 6.90%, 11/01/02 (b) 750,000 751,014
----------
Total Medium Term/Senior Notes (Cost $1,162,554) 1,149,372
----------
Taxable Municipal Bonds (13.8%)
Connecticut (1.5%)
State, GO, Series A, 5.70%, 1/15/01 800,000 798,440
----------
Illinois (0.8%)
State, GO, 7.30%, 1/1/04, Non-Callable, 400,000 406,116
----------
FGIC
Minnesota (1.9%)
Western Minnesota Power Agency, 1,000,000 997,390
----------
Revenue, Series A, 6.33%, 1/1/02,
AMBAC
New Jersey (3.4%)
Hudson County, GO, 6.09%, 9/1/05, FSA 765,000 752,408
State, GO, Series G, 6.38%, 8/1/01 1,000,000 998,480
----------
1,750,888
----------
New York (3.8%)
New York City, GO, Series K, 6.10%, 8/1/01 1,000,000 996,520
State, GO, Series C, 6.13%, 3/1/02 1,000,000 993,460
----------
1,989,980
----------
Oregon (0.5%)
Cow Creek Band Umpqua Tribe of Indians, 245,000 242,383
----------
Revenue, Series A, 6.20%, 7/1/03,
AMBAC (b)
Washington (1.9%)
State, Housing Trust Fund, GO, Series T, 1,000,000 999,861
----------
6.60%, 1/1/01
Total Taxable Municipal Bonds (Cost $7,214,853) 7,185,058
----------
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Short-Term Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount/Share Value
------------ -----
<S> <C> <C>
U.S. Government Agencies (27.8%)
Fannie Mae (16.5%)
7.15%, 11/1/03 $1,446,900 $ 1,449,331
5.13%, 2/13/04 4,750,000 4,577,066
6.00%, 11/1/14 1,290,231 1,243,891
8.50%, 8/1/30 978,082 1,000,753
7.36%, 6/1/40 250,000 250,234
------------
8,521,275
------------
Federal Home Loan Bank (3.6%)
5.63%, 3/19/01, Series 87 1,900,000 1,892,556
------------
Freddie Mac (7.7%)
5.00%, 1/15/04 750,000 718,820
6.00%, 3/1/07 1,953,548 1,900,455
6.00%, 6/1/07 1,429,053 1,390,222
------------
4,009,497
------------
Total U.S. Government Agencies (Cost $14,354,898) 14,423,328
------------
U.S. Government Agency Pass-Through Securities (3.7%)
Fannie Mae (3.0%)
6.00%, 11/1/06, Pool #252935 1,459,001 1,419,350
7.47%*, 11/1/00, Pool #365421 174,829 177,459
------------
1,596,809
------------
Freddie Mac (0.3%)
8.14%*, 11/1/00, Pool #846367 132,417 136,065
------------
Small Business Administration (0.4%)
10.73%*, 11/1/00, Pool #502966 30,627 33,370
10.13%*, 11/1/00, Pool #503653 53,102 55,977
9.98%*, 11/1/00, Pool #503664 96,379 102,172
------------
191,519
------------
Total U.S. Government Agency Pass-Through Securities (Cost $1,889,787) 1,924,393
------------
U.S. Treasury Obligations (5.4%)
U.S. Treasury Notes (5.4%)
5.88%, 11/15/04 2,800,000 2,801,898
------------
Total U.S. Treasury Obligations (Cost $2,761,311) 2,801,898
------------
Investment Companies (2.6%)
American AAdvantage U.S. Government 1,375,406 1,375,406
------------
Money Market Fund (c)
Total Investment Companies (Cost $1,375,406) 1,375,406
------------
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
short-Term Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Market
Value
-----
<S> <C>
Total Investments (Cost $51,629,114) (a) - 99.3% $51,607,006
Other assets in excess of liabilities - 0.7% 377,163
-------
NET ASSETS - 100.0% $51,984,169
===========
------------
</TABLE>
* Variable rate securities. This rate reflected on the Schedule of Portfolio
Investments is the rate in effect at October 31, 2000. Maturity date is next
rate change date.
(a) Represents cost for federal tax and financial reporting purposes and differs
from market value by net unrealized depreciation of securities as follows:
Unrealized appreciation $ 251,181
Unrealized depreciation (273,289)
----------
Net unrealized depreciation $ (22,108)
===========
(b) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Securities Act of 1933, as amended. These securities
have been determined to be liquid by procedures approved by the board of
trustees.
(c) Affiliate.
AMBAC - Insured by AMBAC Indemnity Corp.
FGIC - Insured by Financial Guaranty Insurance Corp.
FSA - Insured by Financial Security Assurance Inc.
GO - General Obligation
LLC - Limited Liability Corp.
See notes to financial statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Intermediate Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------- -----
<S> <C> <C>
Asset Backed Securities (9.1%)
EQCC Home Equity Loan Trust, Series $ 694,728 $ 695,211
1995-3, Class A4, 7.10%, 2/15/12
EQCC Home Equity Loan Trust, Series 700,000 708,131
1996-2, Class A4, 7.50%, 6/15/21
Green Tree Financial Corp., Series 1997-7, 459,235 431,775
Class A8, 6.86%, 7/15/29
Household Consumer Loan Trust, Series 344,281 343,497
1997-1, Class A3, 6.97%*, 11/15/00
Main Place Fund, Series 1999-1, 6.81%*, 1,000,000 998,525
11/27/00
Premier Auto Trust, Series 1997-1, Class B, 1,000,000 999,665
----------
6.55%, 9/6/03
Total Asset Backed Securities (Cost $4,204,168) 4,176,804
----------
Collateralized Mortgage Obligations (10.2%)
American Housing Trust, Series VI, Class 425,380 444,160
1-I, 9.15%, 5/25/20
Asset Securitization Corp., Series 1997-D4, 750,000 762,393
Class A1C, 7.42%, 4/14/29
GMAC Commercial Mortgage Securities, 350,000 353,366
Inc., Series 1996-C1, Class A2B, 7.22%,
2/15/06
Independent National Mortgage Corp., 128,279 131,343
Series 1994-V, Class M, 9.33%*, 11/25/00
Merrill Lynch Mortgage Investors, Inc., 106,654 106,257
Series 1992-H, Class A1-1, 7.79%*,
11/25/00
Merrill Lynch Mortgage Investors, Inc., 66,701 67,947
Series 1994-I, Class A1, 8.89%*, 11/25/00
Merrill Lynch Mortgage Investors, Inc., 1,000,000 1,001,446
Series 1997-C1, Class A3, 7.12%, 6/18/29
Resolution Trust Corp., Series 1995-1, 448,166 447,368
Class A2D, 7.50%, 10/25/28
Saco I, Inc., Series 1997-2, Class 1A2, 364,468 360,953
7.00%, 8/25/36 (b)
Vendee Mortgage Trust, Series 1995-1C, 361,570 362,338
Class 3E, 8.00%, 7/15/18
Vendee Mortgage Trust, Series 1997-1, 641,370 641,367
----------
Class 2C, 7.50%, 9/15/17
Total Collateralized Mortgage Obligations (Cost $4,713,834) 4,678,938
----------
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Intermediate Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------- -----
<S> <C> <C>
Corporate Bonds (24.1%)
Areospace/Defense Equipment (0.3%)
Lockheed Martin Corp., 7.95%, 12/1/05 $ 125,000 $ 128,577
----------
Airlines (2.3%)
Continental Airlines, Series 972A, 916,952 899,471
7.15%, 6/30/07 (b)
NWA Trust, 8.26%, 3/10/06 (b) 179,550 180,684
----------
1,080,155
----------
Automotive (0.3%)
TRW, Inc., 6.63%, 6/1/04 150,000 143,528
----------
Banking (4.2%)
Amsouth Bancorp, 6.13%, 3/1/09 225,000 199,599
Bank One Corp., 7.63%, 8/1/05 300,000 303,394
Chase Capital VI, 7.34%*, 11/1/00, 750,000 709,633
Callable 8/1/03 @ 100
First Bank System, Inc., 7.63%, 5/1/05 350,000 355,640
PNC Bank N.A., 7.88%, 4/15/05 350,000 362,560
----------
1,930,826
----------
Consumer Goods & Services (0.3%)
Bausch & Lomb, 6.75%, 12/15/04 165,000 146,130
----------
Electric Utility (2.1%)
Utilicorp, 6.88%, 10/1/04, AMBAC 1,000,000 972,694
----------
Electrical & Electronic (1.1%)
Philips Electronics N.V., 7.75%, 4/15/04 500,000 504,730
----------
Entertainment (0.3%)
Clear Channel Communications, 7.88%, 150,000 151,431
----------
6/15/05
Financial Services (4.5%)
Ford Motor Credit Co., 6.70%, 7/16/04 360,000 351,834
Goldman Sachs Group LP, 7.88%, 1/15/03 (b) 375,000 381,518
Prudential Insurance, 7.65%, 7/1/07 (b) 250,000 247,646
Qwest Capital Funding, 7.75%, 8/15/06 (b) 225,000 228,237
Reliastar Financial Corp., 7.13%, 3/1/03 600,000 600,364
Terra Nova Holdings, 7.20%, 8/15/07 250,000 217,912
----------
2,027,511
----------
Industrial Goods & Services (2.1%)
Aramark Corp., 6.75%, 8/1/04 500,000 481,426
Nabisco, Inc., 6.00%, 2/15/11 250,000 248,318
Tyco International Ltd., 6.50%, 11/1/01 225,000 223,917
----------
953,661
----------
Life Insurance (0.8%)
American General Corp., 7.75%, 4/1/05 350,000 357,695
----------
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Intermediate Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Oil & Gas Transmission (1.8%)
Coastal Corp., 9.75%, 8/1/03 $ 375,000 $ 399,643
Duke Energy Field Services Corp., 7.50%, 145,000 146,452
8/16/05
Phillips Petroleum Co., 8.50%, 5/25/05 250,000 263,987
----------
810,082
----------
Retail Stores/Catalog (1.5%)
Kohls Corp., 6.70%, 2/1/06 200,000 195,536
May Department Stores Co., 7.15%, 8/15/04 500,000 502,234
----------
697,770
----------
Schools (1.7%)
Harvard University, 8.13%, 4/15/07 750,000 796,740
----------
Telecommunications (0.8%)
Comcast Cable, 6.20%, 11/15/08 250,000 231,058
Koninklijke Kpn N.V., 7.50%, 10/1/05 (b) 150,000 149,216
----------
380,274
----------
Total Corporate Bonds (Cost $11,250,132) 11,081,804
----------
U.S. Government Bond (5.2%)
Housing Urban Development, 7.22%, 8/1/07 2,316,000 2,400,932
----------
Total U.S. Government Bond (Cost $2,316,000) 2,400,932
----------
Medium Term/Senior Notes (6.1%)
Aluminum (0.6%)
Reynolds Metals, 7.00%, 5/15/09 300,000 294,870
----------
Banking (1.9%)
Mercantile Bancorp, 7.05%, 6/15/04 350,000 348,563
United Missouri Bancshares, Inc., 7.30%, 2/24/03 500,000 503,254
----------
851,817
----------
Electronic Components/Instruments (0.3%)
Solectron Corp., 7.38%, 3/1/06 (b) 150,000 147,092
----------
Entertainment (0.6%)
Viacom, Inc., 7.75%, 6/1/05 275,000 281,118
----------
Financial Services (1.7%)
Paine Webber Group, 6.90%, 8/15/03 750,000 752,084
----------
Semiconductors (1.0%)
Applied Materials, Inc., 6.70%, 9/6/05 500,000 483,771
----------
Total Medium Term/Senior Notes (Cost $2,826,092) 2,810,752
----------
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Intermediate Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Taxable Municipal Bonds (11.3%)
Minnesota (2.5%)
St. Paul, GO, 6.05%, 2/1/07 $1,195,000 $1,139,360
----------
New York (3.3%)
New York City, Series K, GO, 6.10%, 8/1/01 750,000 747,390
State, Series C, GO, 6.13%, 3/1/02 800,000 794,768
----------
1,542,158
----------
Pennsylvania (1.6%)
Philadelphia Authority, Industrial 750,000 721,358
----------
Development, Revenue, Series A, 5.49%,
4/15/04, MBIA
Washington (2.2%)
State, Housing Trust Fund, Series T, 6.60%, 1/1/03 1,000,000 1,001,990
----------
West Virginia (1.7%)
West Virginia, 7.25%, 11/1/08 800,000 803,840
----------
Total Taxable Municipal Bonds (Cost $5,349,668) 5,208,706
---------
U.S. Government Agencies (13.4%)
Fannie Mae (13.4%)
6.00%, 5/15/08 2,000,000 1,926,965
6.00%, 4/25/10 1,353,221 1,311,996
6.00%, 9/25/14 1,000,000 985,465
6.00%, 11/1/14 1,224,562 1,180,581
6.50%, 3/1/29 800,957 772,356
---------
Total U.S. Government Agencies (Cost $6,203,989) 6,177,363
----------
U.S. Government Agency Pass-Through Securities (5.2%)
Fannie Mae (4.9%)
7.47%*, 11/1/00, Pool #365421 361,793 367,236
7.13%, 6/1/04, Pool #375168 968,551 970,682
6.18%, 8/1/08, Pool #380581 975,406 938,352
----------
2,276,270
----------
Freddie Mac (0.3%)
8.14%*, 11/1/00, Pool #846367 132,417 136,065
----------
Total U.S. Government Agency Pass-Through Securities
(Cost $2,466,964) 2,412,335
----------
U.S. Treasury Obligations (11.9%)
U.S. Treasury Notes (11.9%)
6.75%, 5/15/05 1,000,000 1,037,032
6.25%, 2/15/07 750,000 765,235
5.63%, 5/15/08 3,750,000 3,697,935
----------
Total U.S. Treasury Obligations (Cost $5,468,745) 5,500,202
----------
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Intermediate Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Investment Companies (0.7%)
American AAdvantage U.S. Government 344,294 $ 344,294
-----------
Money Market Fund (c)
Total Investment Companies (Cost $344,294) 344,294
-----------
Total Investments (Cost $45,143,886) (a) - 97.2% 44,792,130
Other assets in excess of liabilities - 2.8% 1,299,556
-----------
NET ASSETS - 100.0% $46,091,686
===========
</TABLE>
------------
* Variable rate securities. This rate reflected on the Schedule of Portfolio
Investments is the rate in effect at October 31, 2000. The maturity date is the
next rate change date.
(a) Represents cost for federal income tax and financial reporting purposes and
differs from market value by net unrealized depreciation of securities as
follows:
Unrealized appreciation $ 249,498
Unrealized depreciation (601,254)
---------
Net unrealized depreciation $(351,756)
==========
(b) Represents a restricted security purchased under Rule 144A which is exempt
from registration under the Securities Act of 1933, as amended. These
securities have been determined to be liquid by procedures approved by the board
of trustees.
(c) Affiliate.
AMBAC - Insured by AMBAC Indemnity Corp.
GO - General Obligation
LP - Limited Partnership
MBIA - Insured by Municipal Bond Insurance Assoc.
NV - Naamloze Vennootschaap (Dutch Corp.)
See notes to financial statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Stock Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Common Stocks (95.4%)
Banking (8.0%)
Bank of America Corp. 33,500 $1,610,093
Bank One Corp. 35,700 1,303,050
Chase Manhattan Corp. 33,200 1,510,600
First Union Corp. 47,100 1,427,719
PNC Financial Services Group 12,411 829,986
----------
6,681,448
----------
Chemicals (3.0%)
Crompton Corp. 58,600 468,800
Dow Chemical Co. 38,100 1,166,813
Millenium Chemicals, Inc. 57,000 919,125
----------
2,554,738
----------
Consumer Goods & Services (1.4%)
Cendant Corp. (b) 52,500 630,000
Newell Rubbermaid, Inc. 27,000 518,063
----------
1,148,063
----------
Diversified (4.0%)
Honeywell International, Inc. 33,800 1,818,862
ITT Industries, Inc. 47,800 1,556,488
----------
3,375,350
----------
Electric Utility (16.5%)
American Electric Power Company, Inc. 43,000 1,784,500
Entergy Corp. 93,700 3,589,880
FirstEnergy Corp. 67,300 1,741,388
Public Service Enterprise Group, Inc. 41,200 1,709,800
Reliant Energy, Inc. 99,900 4,127,118
TXU Corp. 23,900 885,794
----------
13,838,480
----------
Electrical & Electronic (0.3%)
Emerson Electric Co. 3,600 264,375
----------
Financial Services (8.3%)
Citigroup, Inc. 32,933 1,733,099
Household International, Inc. 19,400 976,063
John Hancock Financial Services, Inc. (b) 40,800 1,290,300
Washington Mutual, Inc. 67,600 2,974,400
----------
6,973,862
----------
Insurance (6.9%)
Allstate Corp. 95,600 3,847,900
Aon Corp. 47,000 1,947,563
----------
5,795,463
----------
Non-Hazardous Waste Removal (3.3%)
Waste Management Inc. 136,600 2,732,000
----------
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Stock Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Market
Shares Value
------ -----
<S> <C> <C>
Oil & Gas Exploration Products & Services (25.3%)
Baker Hughes, Inc. 97,300 $ 3,344,687
BP Amoco PLC ADR 49,516 2,522,221
Global Marine, Inc. (b) 27,300 723,450
Halliburton Co. 66,100 2,449,831
Occidental Petroleum Corp. 111,300 2,212,088
Phillips Petroleum Co. 52,300 3,229,524
Texaco, Inc. 43,400 2,563,313
Transocean Sedco Forex, Inc. 47,000 2,491,000
Williams Companies, Inc. 38,300 1,601,419
------------
21,137,533
------------
Pharmaceuticals (3.6%)
Bristol-Myers Squibb Co. 24,500 1,492,969
Watson Pharmaceuticals, Inc. (b) 24,500 1,532,781
------------
3,025,750
------------
Real Estate Investment Trust (2.3%)
Crescent Real Estate Equities Co. 96,400 1,940,050
------------
Retail Stores/Catalog (5.2%)
Federated Department Stores, Inc. (b) 49,000 1,595,562
Kmart Corp. (b) 212,600 1,262,313
May Department Stores Co. 57,250 1,502,813
------------
4,360,688
------------
Telecommunications (5.3%)
SBC Communications, Inc. 36,100 2,082,519
Verizon Communications 40,992 2,369,850
------------
4,452,369
------------
Tobacco (2.0%)
Imperial Tobacco Group PLC ADR 85,500 1,667,250
------------
Total Common Stocks (Cost $71,178,563) 79,947,419
------------
Investment Companies (4.5%)
American AAdvantage U.S. Government 3,685,516 3,685,516
Money Market Fund (c)
Federated Treasury Obligations Fund 63,986 63,986
------------
Total Investment Companies (Cost $3,749,502) 3,749,502
------------
Total Investments (Cost $74,928,065) (a) - 99.9% 83,696,921
Other assets in excess of liabilities - 0.1% 94,072
------------
NET ASSETS - 100.0% $ 83,790,993
============
</TABLE>
____________
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Stock Fund
Schedule of Portfolio Investments
October 31, 2000
a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for financial
reporting purposes in excess of federal income tax reporting of $649,215. Cost
for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
Unrealized appreciation $ 13,622,100
Unrealized depreciation (5,502,459)
------------
Net unrealized appreciation $ 8,119,641
============
(b) Represents non-income producing securities.
(c) Affiliate.
ADR - American Depositary Receipt
PLC - Public Limited Company
See notes to financial statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Municipal Bonds (97.4%)
Guam (0.2%)
Guam Government, Series A, 5.90%, $ 250,000 $ 251,315
----------
9/1/05, Callable 3/1/01 @ 100
Kansas (97.2%)
Anthony, Electric, Revenue, 5.30%, 12/1/17, 1,215,000 1,137,544
Callable 12/1/05 @ 100
Barton County, School District #428, 1,390,000 1,390,000
Great Bend, GO, Series A, 5.30%, 9/1/15,
Callable 9/1/06 @ 100
Bourbon County, School District #234, 285,000 295,331
GO, Series B, 5.63%, 9/1/11, Callable
9/1/06 @ 100, FSA
Brown County, Horton School District 500,000 507,500
#430, GO, 5.38%, 9/1/13, Callable 9/1/06
@ 100, FSA
Butler & Sedgwick County, School District 370,000 381,563
#385, Andover, 5.70%, 9/1/15, Callable
9/1/03 @ 100, FSA
Butler & Sedgwick County, School District 1,775,000 1,879,280
#385, GO, 5.60%, 9/1/12, FSA
Butler County, School District #402, GO, 250,000 249,450
4.15%, 10/1/01, FSA
Butler County, School District #402, GO, 250,000 249,375
4.30%, 10/1/02, FSA
Butler County, School District #402, GO, 500,000 503,750
5.25%, 10/1/12, Callable 4/1/04 @ 100,
FSA
Coffey County, GO, 4.65%, 9/1/05 690,000 690,000
Coffeyville, Community College, COP, 250,000 253,750
5.88%, 10/1/14, Callable 10/1/04 @ 100
Coffeyville, Water & Sewer Revenue, 465,000 465,516
4.60%, 10/1/04, Callable 10/1/01 @ 100,
AMBAC
Coffeyville, Water & Sewer Revenue, 490,000 490,544
4.70%, 10/1/05, Callable 10/1/01 @ 100,
AMBAC
Cowley County, School District #470, GO, 500,000 521,875
5.45%, 12/1/12, Callable 12/1/06 @ 100,
FGIC
Cowley County, School District #470, GO, 1,000,000 1,046,250
5.50%, 12/1/16, Callable 12/1/06 @ 100, FGIC
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Dickinson County, Abilene School District $ 265,000 $ 265,901
#435, GO, Series 1992, 5.40%, 4/1/01,
Callable 10/1/00 @100
Dickinson County, Abilene School District 300,000 301,098
#435, GO, Series 1992, 5.60%, 4/1/03,
Callable 10/1/00 @100
Dodge City, School District #443, GO, 1,020,000 957,525
4.40%, 9/1/12, Callable 9/1/08 @ 100, FSA
Dodge City, School District #443, GO, 975,000 906,750
4.70%, 9/1/15, Callable 9/1/08 @ 100, FSA
Dodge, Pollution Control Revenue, 6.63%, 700,000 730,625
5/1/05
Dodge, School District #443, GO, 4.80%, 360,000 360,450
3/1/08, Callable 3/1/04 @ 100, FSA
Dodge, School District #443, GO, 5.00%, 250,000 246,875
3/1/14, Callable 3/1/04 @ 100, FSA
Douglas County, School District #497, 1,000,000 1,020,000
GO, 5.00%, 9/1/07
Douglas County, School District #497, 250,000 249,765
GO, Series 1993 A, 4.50%, 9/1/02,
Callable 9/1/01 @ 100
El Dorado, Water Utility System 230,000 228,563
Revenue, 4.40%, 10/1/02
El Dorado, Water Utility System 305,000 303,475
Revenue, 4.45%, 10/1/03
El Dorado, Water Utility System 350,000 349,125
Revenue, 4.65%, 10/1/05
El Dorado, Water Utility System Revenue, 275,000 273,625
4.70%, 10/1/06, Callable 10/1/05 @ 100
El Dorado, Water Utility System Revenue, 200,000 198,000
4.75%, 10/1/07, Callable 10/1/05 @ 100
Ellsworth County, School District #328, GO, 500,000 496,875
5.25%, 9/1/15, Callable 9/1/06 @ 100, FSA
Finney County, GO, 5.00%, 12/1/10, 500,000 505,000
Callable 12/1/07 @ 100, MBIA
Finney County, GO, 4.40%, 12/1/13, 1,010,000 938,038
Callable 12/1/07 @ 100, AMBAC
Finney County, GO, 4.50%, 12/1/15, 1,100,000 994,125
Callable 12/1/07 @ 100, AMBAC
Franklin County, GO, Series B, 4.75%, 330,000 330,000
9/1/05, Callable 9/1/03 @ 100
Franklin County, School District #290, GO, 500,000 502,500
5.25%, 9/1/14, Callable 9/1/06 @ 100,
FSA
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Franklin County, School District #290, GO, $ 335,000 $ 332,488
5.30%, 9/1/16, Callable 9/1/06 @ 100,
FSA
Garden City, GO, Series B, 5.45%, 250,000 256,563
11/1/04, Callable 11/1/03 @ 100, MBIA
Gardner, Electric Utilities Revenue, 500,000 512,240
7.00%, 11/1/09, Callable 11/1/01 @ 101
Gove County, GO, 5.15%, 4/1/12, Callable 560,000 562,100
10/1/01 @ 101, AMBAC
Gray County, School District #102, GO, 250,000 266,563
6.80%, 9/1/15, Callable 9/1/05 @ 100
Gray County, School District #102, GO, 800,000 753,000
5.00%, 9/1/15, Callable 9/1/08 @ 100
Great Bend, Water System Revenue Series 1,000,000 895,000
A, 5.15%, 9/1/19, Callable 9/1/08 @ 100
Harvey County, School District #373, GO, 500,000 521,250
5.55%, 9/1/13, Callable 9/1/05 @ 100, FSA
Harvey County, School District #373, GO, 2,000,000 1,829,999
4.80%, 9/1/18, Callable 9/1/08 @ 100, FSA
Hays, GO, Series A, 5.15%, 9/1/09, 250,000 254,375
Callable 9/1/03 @ 100, FGIC
Hays, GO, Series A, 5.25%, 9/1/10, 250,000 255,000
Callable 9/1/03 @ 100, FGIC
Hays, Water & Sewer Revenue, 5.20%, 260,000 261,300
9/1/11, Callable 9/1/03 @ 100, MBIA
Jefferson County, School District #340, 300,000 315,375
GO, 6.00%, 9/1/06, Prerefunded 9/1/04 @
100, FSA
Jefferson County, School District #340, 320,000 337,600
GO, 6.10%, 9/1/07, Prerefunded 9/1/04 @
100, FSA
Jefferson County, School District #340, 330,000 348,975
GO, 6.20%, 9/1/08, Prerefunded 9/1/04 @
100, FSA
Johnson County, School District #223, GO, 1,000,000 987,500
5.00%, 9/1/14, Callable 9/1/09 @ 100,
FGIC
Johnson County, School District #232, GO, 1,050,000 1,065,750
5.40%, 9/1/14, Callable 9/1/07 @ 100,
MBIA
Johnson County, School District #233, GO, 485,000 496,519
5.65%, 9/1/03, Callable 3/1/02 @ 101,
AMBAC
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Johnson County, School District #233, GO, $ 500,000 $ 513,750
5.95%, 9/1/05, Callable 3/1/02 @ 101,
AMBAC
Johnson County, School District #512, GO, 1,135,000 1,126,488
Series A, 4.60%, 10/1/08
Johnson County, School District #512, GO, 1,185,000 1,099,088
Series A, 4.00%, 10/1/09, Callable 10/1/08
@ 100
Johnson County, School District #512, GO, 1,290,000 1,201,313
Series A, 4.30%, 10/1/11, Callable 10/1/08
@ 100
Johnson County, School District #512, GO, 500,000 491,250
Series B, 5.25%, 10/1/17, Callable 10/1/06
@ 100
Johnson County, Water District #001 250,000 253,125
Revenue, 5.13%, 12/1/08, Callable 12/1/03
@ 100
Johnson County, Water District #001 250,000 250,493
Revenue, Series 1990-A, 6.90%, 12/1/00
Johnson County, Water District #001, 1,115,000 1,149,844
Revenue, Series B, 5.25%, 12/1/05
Junction City, Water & Sewer, GO, 1,620,000 1,508,624
4.80%, 9/1/16, Callable 9/1/08 @ 100, MBIA
Kansas City, GO, 5.45%, 4/1/17, Callable 340,000 340,000
10/1/06 @ 100, FGIC
Kansas City, GO, Series B, 5.38%, 9/1/10, 1,500,000 1,533,749
Callable 9/1/05 @ 100, MBIA
Kansas City, Pollution Control, Revenue, 500,000 501,250
General Motors Corp., 5.45%, 4/1/06,
Callable 10/1/01 @ 101
Kearny County, School District #215, GO, 700,000 679,875
4.80%, 9/1/13, Callable 9/1/06 @ 100,
MBIA
Kingman County. School District #331, 1,545,000 1,602,937
5.80%, 10/1/16, Callable 10/1/10 @ 100,
FGIC
Labette County, Single Family Mortgage 410,000 419,930
Revenue, 7.65%, 12/1/11, Callable 6/1/08
@ 103, GNMA
Lawrence Kansas Hospital Revenue, 1,000,000 1,012,500
6.00%, 7/1/19, Callable 7/1/09 @100
Lawrence, Sales Tax, GO, Series V, 500,000 507,500
5.50%, 9/1/12, Callable 9/1/04 @ 100
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Lawrence, Water & Sewer System $ 395,000 $ 408,331
Revenue, 5.70%, 11/1/11, Callable 11/1/05 @ 100
Lawrence, Water & Sewer System 505,000 499,950
Revenue, 5.25%, 11/1/15, Callable 11/1/06
@ 100
Lawrence, Water & Sewer System 250,000 244,375
Revenue, 5.20%, 11/01/16, Callable
11/1/06 @100
Leavenworth County, School District 400,000 391,000
#453, GO, 4.70%, 9/1/11, Callable 9/1/07
@ 100, FGIC
Leavenworth County, School District 460,000 451,375
#453, GO, 4.80%, 9/1/12, Callable 9/1/07
@ 100, FGIC
Leavenworth County, School District 340,000 340,425
#469, GO, 4.60%, 9/1/05, FSA
Leavenworth Hospital Revenue, 6.13%, 415,000 377,650
4/1/15, Callable 4/1/07 @ 102
Leawood, GO, Series A, 5.25%, 9/1/09, 250,000 256,250
Callable 9/1/06 @ 100
Leawood, GO, Series A, 5.35%, 9/1/10, 250,000 257,188
Callable 9/1/06 @ 100
Leawood, GO, Series A, 5.40%, 9/1/11, 375,000 384,375
Callable 9/1/06 @ 100
Leawood, GO, Series B, 5.00%, 9/1/10, 400,000 404,500
Callable 9/1/06 @ 100
Lyons County, School District #253, GO, 650,000 671,938
5.60%, 10/1/10, Callable 10/1/03 @ 102
Manhattan, GO, 5.40%, 11/1/16, Callable 405,000 405,506
11/1/04 @ 100
Manhattan, GO, Series 189, 5.85%, 250,000 253,440
11/1/02, Callable 11/1/01 @ 100
Marion County, School District #411, GO, 660,000 665,775
5.30%, 4/1/13, Callable 4/1/03 @ 101.5
McPherson County, School District #400, 250,000 254,063
GO, 5.20%, 12/1/10, Callable 12/1/05 @
100, FGIC
McPherson County, School District #400, 250,000 252,813
GO, 5.25%, 12/1/12, Callable 12/1/05 @
100, FGIC
McPherson, Electric Utility Revenue, 105,000 105,197
5.55%, 3/1/09, Callable 3/1/02 @ 100,
AMBAC
McPherson, GO, Series 116, 5.00%, 500,000 500,820
11/1/06, Callable 11/1/00 @ 100, AMBAC
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Meade, Industrial Revenue, 6.50%, $ 1,000,000 $ 1,093,750
10/1/06
Miami County, School District #367, GO, 900,000 855,000
5.00%, 9/1/16, Callable 9/1/08 @ 100,
FGIC
Miami County, School District #368, GO, 500,000 514,375
6.50%, 12/1/05, Callable 6/1/02 @ 100,
AMBAC
Miami County, School District #416, GO, 250,000 251,248
6.00%, 9/1/02, Callable 9/1/00 @ 100,
AMBAC
Miami County, School District, GO, Series 550,000 575,438
A, 5.85%, 9/1/13, Prerefunded 9/1/04 @
100, AMBAC
Nemaha County, School District #441, 250,000 250,768
GO, 5.40%, 3/1/02, Callable 3/1/01 @ 100,
AMBAC
Nemaha County, School District #441, 250,000 250,793
GO, 5.75%, 3/1/07, Callable 3/1/01 @ 100,
AMBAC
Neosho County, School District #413, GO, 260,000 262,595
5.65%, 9/1/01
Newton, Wastewater Treatment System 120,000 120,640
Revenue, 6.20%, 3/1/01
Newton, Wastewater Treatment System 130,000 132,925
Revenue, 6.40%, 3/1/02
Newton, Wastewater Treatment System 700,000 673,750
Revenue, 4.90%, 3/1/12, Callable 3/1/07
@ 100
Olathe, GO, 4.35%, 4/1/09, Callable 1,710,000 1,645,874
4/1/07, FSA
Olathe, Health Facility Revenue, 5.20%, 1,000,000 966,250
9/1/17, Callable 9/1/05 @ 100
Olathe, Labette County, Mortgage Loan 5,000 5,197
Revenue, 7.15%, 2/1/15, Callable 8/1/01
@ 103, GNMA
Olathe, Multifamily Housing Revenue, 240,000 246,300
5.50%, 6/1/04, FNMA
Osage County, School District #434, GO, 2,215,000 2,131,937
4.75%, 9/1/14, Callable 9/1/03 @ 100.5,
FSA
Osborne, GO, Series 1992, 5.50%, 135,000 135,672
12/1/01, Callable 12/1/00 @ 100
Osborne, GO, Series 1992, 5.60%, 140,000 140,088
12/1/02, Callable 12/1/00 @ 100
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Osborne, GO, Series 1992, 5.70%, $ 150,000 $ 150,107
12/1/03, Callable 12/1/00 @ 100
Osborne, GO, Series 1992, 5.80%, 155,000 155,116
12/1/04, Callable 12/1/00 @ 100
Ottawa, Waterworks & Electric System 250,000 250,350
Revenue, 6.15%, 12/1/00, MBIA
Ottawa, Waterworks & Electric System 250,000 254,965
Revenue, 6.25%, 12/1/01, MBIA
Pawnee County, School District #495, GO, 255,000 259,144
5.10%, 9/1/04, Callable 9/1/03 @ 100, FSA
Pottawatomie County, School District 500,000 509,650
#320, GO, Series 1990, 6.60%, 10/1/02,
Callable 10/1/01 @ 100, AMBAC
Pottawatomie County, School District 700,000 682,500
#322, GO, 4.95%, 10/01/12, Callable
10/1/04 @ 100
Pratt, Electric System Revenue, 6.60%, 250,000 272,188
11/1/07, AMBAC
Pratt, Electric System Revenue, 4.95%, 635,000 632,619
11/1/10, Callable 11/1/05 @ 101, AMBAC
Pratt, Electric System Revenue, 5.00%, 415,000 415,000
11/1/11, Callable 11/1/05 @ 101, AMBAC
Pratt, Electric System Revenue, 6.00%, 250,000 250,000
11/1/12, Prerefunded 11/1/00 @ 100,
AMBAC
Reno County, Mortgage, Series B, 8.70%, 60,000 62,314
9/1/11, Callable 9/1/01 @ 103
Rice County, Union School District #444, 755,000 732,350
5.08%, 9/1/14, Callable 9/1/07 @ 100
Salina Hospital Revenue, 5.30%, 10/1/13, 750,000 752,813
Callable 10/1/03 @ 100, AMBAC
Salina, Water & Sewer Revenue, 5.00%, 330,000 331,238
9/1/07, Callable 9/1/02 @ 100, MBIA
Saline County, School District #305, GO, 2,025,000 1,931,343
4.75%, 9/1/14, Callable 9/1/08 @ 100, FSA
Scott County, School District #466, GO, 685,000 687,891
Series 1993, 5.38%, 9/1/06, Callable 9/1/01
@ 100
Sedgwick & Shawnee Counties, Single 610,000 606,950
Family Revenue, 4.90%, 6/1/16
Sedgwick & Shawnee Counties, Single 1,130,000 1,210,513
Family Revenue, 6.70%, 6/1/29
Sedgwick & Shawnee Counties, Single 260,000 289,575
Family Revenue Series B-1, 8.05%,
5/1/14, GNMA
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
<TABLE>
<CAPTION>
Principal Market
Amount Value
------ -----
<S> <C> <C>
Sedgwick County, Family Mortgage, $ 650,000 $ 684,125
Series A-2, 6.50%, 12/1/16, Callable
12/1/07 @ 105, GNMA
Sedgwick County, Mortgage Loan 305,000 315,721
Revenue Series A, 7.30%, 12/1/12,
Callable 9/1/01 @ 103, GNMA
Sedgwick County, School District #260, 1,595,000 1,644,843
5.50%, 10/1/13, Callable 10/1/09 @100,
FGIC
Sedgwick County, School District #260, 1,675,000 1,716,874
5.50%, 10/1/14, Callable 10/1/09 @ 100,
FGIC
Sedgwick County, School District #260, 1,220,000 1,186,450
GO, 4.65%, 10/1/11, Callable 10/1/08 @
100, AMBAC
Sedgwick County, School District #261, 1,525,000 1,393,469
GO, 4.75%, 11/1/17, Callable 11/1/09 @
100, FSA
Sedgwick County, School District #265, 1,000,000 968,750
GO, 4.30%, 10/1/07, FSA
Sedgwick County, School District #265, 1,000,000 957,500
GO, 4.25%, 10/1/08, FSA
Sedgwick County, School District #265, 1,000,000 958,750
GO, 4.35%, 10/1/09, FSA
Sedgwick County, School District #266, 650,000 654,063
GO, 5.25%, 9/1/13, Callable 9/1/02 @ 101,
FGIC
Seward County, GO, Series B, 6.00%, 250,000 252,335
8/15/08, Callable 8/15/01 @ 100, AMBAC
Seward County, GO, Series B, 6.00%, 250,000 251,723
8/15/13, Callable 8/15/01 @ 100, AMBAC
Seward County, School District #480, GO, 1,640,000 1,619,499
5.00%, 9/1/14, Callable 9/1/06 @ 100, FSA
Seward County, School District #483, 600,000 600,750
Kismet-Plains, GO, 5.20%, 10/1/12,
Callable 10/1/06 @ 100
Shawnee County, GO, Series B, 5.50%, 250,000 256,250
9/1/09, Prerefunded 9/1/03 @ 100
Shawnee County, GO, Series B, 5.50%, 250,000 256,250
9/1/11, Prerefunded 9/1/03 @ 100
Shawnee County, GO, Series C, 5.60%, 500,000 509,375
9/1/04, Callable 9/1/02 @ 100
Shawnee County, Health Care Revenue, 500,000 501,875
5.15%, 8/15/10, Callable 8/15/05 @ 100,
FSA
</TABLE>
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
Principal Market
Amount Value
------ -----
Shawnee County, School District #345, $ 250,000 $ 260,625
GO, 5.75%, 9/1/11, Prerefunded 9/1/04 @
100, MBIA
Shawnee County, School District #345, 1,590,000 1,560,187
GO, 4.75%, 9/1/11, Callable 9/1/04 @
101.5, MBIA
Shawnee County, School District #437, 700,000 715,750
Auburn-Washburn, GO, Series 1992,
6.25%, 3/1/03, Callable 3/1/02 @ 100,
FGIC
Shawnee County, School District #501, 1,515,000 1,492,275
GO, 4.35%, 2/1/06
Shawnee County, School District #501, 1,675,000 1,643,593
GO, 4.38%, 2/1/07, Callable 2/1/06 @ 100
Shawnee County, School District #501, 1,130,000 1,070,675
GO, 4.38%, 8/1/11, Callable 8/1/08 @ 100,
FSA
State, Department of Transportation, 1,000,000 1,051,250
Highway Revenue, 5.50%, 9/1/14
State, Development Finance Authority 345,000 343,275
Educational, 4.80%, 10/1/08, Callable
10/1/04 @ 100
State, Development Finance Authority 500,000 499,375
Educational, 5.00%, 10/1/12, Callable
10/1/04 @ 100
State, Development Finance Authority 250,000 254,063
Revenue, 5.13%, 6/1/06, Callable 6/1/03
@ 102, AMBAC
State, Development Finance Authority 1,365,000 1,315,519
Revenue, 4.20%, 6/1/07, FSA
State, Development Finance Authority 500,000 500,000
Revenue, 5.00%, 8/1/11, Callable 8/1/09
@ 100, MBIA
State, Development Finance Authority 1,000,000 1,018,750
Revenue, 5.50%, 5/1/14, Callable 5/1/07
@ 100
State, Development Finance Authority 1,500,000 1,524,374
Revenue, 5.50%, 8/1/15, Callable 8/1/11
@ 100, MBIA
State, Development Finance Authority 1,000,000 922,500
Revenue, 5.00%, 4/1/19, Callable 4/1/09
@ 100, AMBAC
State, Development Finance Authority 250,000 253,438
Revenue, Department of Corrections, El
Dorado, Project L, 5.63%, 2/1/03,
Callable 2/1/01 @ 102, MBIA
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
Principal Market
Amount Value
------ -----
State, Development Finance Authority $ 500,000 $ 507,580
Revenue, Project K-II, 5.50%, 10/1/10,
Callable 10/1/01 @ 101
State, Development Finance Authority 500,000 507,705
Revenue, Project K-II, 5.60%, 10/1/11,
Callable 10/1/01 @ 101
State, Development Finance Authority 500,000 509,375
Revenue, Series J, 5.40%, 4/1/10, Callable
4/1/05 @ 100
State, Development Finance Authority, 500,000 497,500
Health Facilities Revenue, Hays Medical
Center Inc., 5.38%, 11/15/16, Callable
11/15/06 @ 102, MBIA
State, Development Finance Authority, 500,000 500,000
Health Facilities Revenue, Hays Medical
Center Inc., 5.50%, 11/15/17, Callable
11/15/07 @ 100, MBIA
State, Development Financial Authority, 500,000 508,750
Health Facilities Revenue, Hays Medical
Center Inc., Series B, 5.38%, 11/15/10,
Callable 11/15/07 @ 100, MBIA
State, Development Finance Authority, 475,000 488,656
Health Facilities Revenue, Stormont
Health Care, 5.40%, 11/15/05, MBIA
State, Development Finance Authority, 500,000 516,875
Health Facilities Revenue, Stormont Health
Care, 5.75%, 11/15/10, Callable 11/15/06
@ 100, MBIA
State, Development Finance Authority, 1,000,000 1,023,750
Health Facilities Revenue, Stormont Health
Care, 5.80%, 11/15/16, Callable 11/15/06
@ 100, MBIA
State, Development Finance Authority, 1,500,000 1,500,000
Health Facilities Revenue, Stormont Health
Care, 4.65%*, 11/1/00, Callable 11/15/01 @100, MBIA
State, Development Finance Authority, 1,000,000 976,250
Water Supply, 4.40%, 4/1/06, AMBAC
State, Public Water Supply Revenue, 1,000,000 962,500
4.15%, 4/1/06
State, Turnpike Authority Revenue, 260,000 265,200
5.40%, 9/1/09, Callable 9/1/03 @ 102,
AMBAC
State, Turnpike Authority Revenue, 1,915,000 1,991,599
5.50%, 9/1/06, AMBAC
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
Principal Market
Amount Value
------ -----
Sumner County, Bridge Improvement, $ 435,000 $ 442,121
GO, Series 1992, 6.00%, 11/1/04, Callable
11/1/01 @ 100, AMBAC
Sumner County, Bridge Improvement, 250,000 254,093
GO, Series 1992, 6.00%, 11/1/05, Callable
11/1/01 @ 100, AMBAC
Sumner County, School District #357, 375,000 379,688
Belle Plaine, GO, 5.55%, 9/1/13, Callable
9/1/03 @ 100
Thomas County, School District #315, 1,055,000 967,963
GO, Series A, 4.35%, 9/1/13, Callable
9/1/07 @ 100, FSA
Topeka Public Building Commission 1,100,000 1,027,125
Revenue, 5.00%, 6/1/19, Callable 6/1/09
@ 100, MBIA
Topeka, GO, Series A, 5.50%, 8/15/16, 500,000 501,875
Callable 8/15/01 @ 101
Topeka, Hospital Revenue, 6.75%, 500,000 500,395
11/15/00, MBIA
University of Kansas Hospital Authority, 1,645,000 1,657,337
5.50%, 9/1/15, Callable 9/1/09 @ 100,
AMBAC
Washburn University of Topeka, 435,000 446,419
Revenue, 5.30%, 7/1/06, AMBAC
Washburn University of Topeka, 460,000 474,950
Revenue, 5.35%, 7/1/07, AMBAC
Washburn University of Topeka, 485,000 503,188
Revenue, 5.45%, 7/1/08, AMBAC
Wellington, Water & Sewer Revenue, 1,000,000 961,250
5.15%, 5/1/18, Callable 5/1/08 @ 100,
AMBAC
Wichita, GO, 4.70%, 9/1/12, Callable 565,000 546,638
9/1/04 @ 101
Wichita, GO, Series 746, 5.30%, 9/1/12, 750,000 760,313
Callable 9/1/04 @ 100
Wichita, Hospital Improvements Series 1,215,000 1,211,963
XI, Revenue, 5.00%, 11/15/04
Wichita, Hospital Improvements Series 2,085,000 2,084,999
XI, Revenue, 5.40%, 11/15/08
Wichita, Hospital Improvements Series 2,000,000 2,104,999
XI, Revenue, 6.75%, 11/15/19, Callable
11/15/09 @ 101
Wichita, Hospital Revenue, 6.00%, 7/1/04, 567,000 581,884
Callable 7/31/00 @ 100
Continued
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
Principal Market
Amount/Shares Value
------------- -----
Wichita, Multifamily Housing Revenue, $ 660,000 $ 677,325
5.90%, 12/1/16, Callable 12/1/05 @ 102
Wichita, Water & Sewer Revenue, 405,000 401,456
4.75%, 10/1/08, Callable 10/1/04 @ 101, FGIC
Wichita, Water & Sewer Revenue, 900,000 893,250
4.88%, 10/1/09, Callable 10/1/04 @ 101, FGIC
Wichita, Water & Sewer Revenue, 2,000,000 1,944,999
4.70%, 10/1/12, Callable 10/1/05 @ 101, FGIC
Wyandotte County, Government Utility 950,000 966,625
System Revenue, 5.00%, 9/1/05,
AMBAC
Wyandotte County, Government Utility 2,000,000 1,814,999
System Revenue, 4.75%, 9/1/18,
Callable 3/1/09 @ 101, MBIA
Wyandotte County, School District #203, 295,000 297,531
Piper, GO, Series 1992, 5.90%, 9/1/04,
Callable 9/1/01 @ 100
Wyandotte County, School District #203, 500,000 506,365
Piper, GO, Series 1992, 6.60%, 9/1/13,
Callable 9/1/01 @ 100
Wyandotte County/Kansas City, 1,500,000 1,475,625
------------
University, GO, 4.30%, 9/1/05, AMBAC
136,772,919
------------
Total Municipal Bonds (Cost $138,072,158) 137,024,234
------------
Investment Companies (1.7%)
Federated Tax-Exempt Money Market Fund 2,330,558 2,330,558
------------
Total Investment Companies (Cost $2,330,558) 2,330,558
------------
Total Investments (Cost $140,402,716) (a) - 99.1% 139,354,792
Other assets in excess of liabilities - 0.9% 1,278,053
------------
NET ASSETS - 100.0% $140,632,845
============
------------
* Variable rate securities. This rate reflected on the Schedule of Portfolio
Investments is the rate in effect at October 31, 2000. Maturity date reflects
next rate change date.
(a) Represents cost for federal income tax and financial reporting purposes and
differs from market value by net unrealized depreciation of securities as
follows:
Unrealized appreciation $ 1,412,450
Unrealized depreciation (2,460,374)
---------
Net unrealized depreciation $(1,047,924)
=========
See notes to financial statements.
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Schedule of Portfolio Investments
October 31, 2000
AMBAC - Insured by AMBAC Indemnity Corp.
COP - Certificate of Participation
FGIC - Insured by Financial Guaranty Insurance Corp.
FNMA - Federal National Mortgage Association
FSA - Insured by Financial Security Assurance Inc.
GNMA - Government National Mortgage Assoc.
GO - General Obligation
MBIA - Insured by Municipal Bond Insurance Assoc.
See notes to financial statements.
<PAGE>
American Independence Funds Trust
Notes to Financial Statements
October 31, 2000
--------------------------------------------------------------------------------
1. Organization:
Effective March 1, 2000, the INTRUST Funds Trust changed its name to the
American Independence Funds Trust (the "Trust"). The Trust was established as a
Delaware business trust and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end, diversified management
investment company. The Trust currently offers eleven series, including the
NestEgg Funds. The accompanying financial statements and financial highlights
are those of the Money Market Fund, Short-Term Bond Fund, Intermediate Bond
Fund, Stock Fund, International Multi-Manager Stock Fund, and Kansas Tax-Exempt
Bond Fund (individually a "Fund", collectively the "Funds"). The Trust is
authorized to offer two classes of shares: Service and Premium. The Premium
shares, which have not yet been offered for sale, may be subject to higher 12b-1
distribution fees. Each Fund is currently offered in the Service Class only.
The Funds' investment objectives are as follows:
Fund Objective
---- ---------
Money Market Fund Seeks to provide investors with current income,
liquidity and the maintenance of a stable net
asset value of $1.00 per share.
Short-Term Bond Fund Seeks to provide investors with as high a level
of current income as is consistent with liquidity
and safety of principal.
Intermediate Bond Fund Seeks to provide investors with a competitive
total return.
Stock Fund Seeks to provide investors with long-term capital
appreciation.
International Multi-Manager
Stock Fund Seeks to provide investors with long-term capital
appreciation by investing in equity securities of
issuers based outside the United States.
Kansas Tax-Exempt Bond Fund Seeks to preserve capital while producing current
income for the investor that is exempt from both
federal and Kansas state income taxes.
The International Multi-Manager Stock Fund seeks to achieve its objective by
investing all of its investable assets in the International Equity Portfolio, a
series of the AMR Investment Services Trust (the "Portfolio"). The percentage
of the Portfolio owned by the Fund as of October 31, 2000 was approximately
4.87%. The financial statements of the Portfolio, including its schedule of
investments, are included elsewhere in this report and should be read in
conjunction with the International Multi-Manager Stock Fund's financial
statements.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America. 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.
Security Valuation
Securities of the Money Market Fund are valued utilizing the amortized cost
method permitted in accordance with Rule 2a-7 under the 1940 Act. Under the
amortized cost method, discount or premium is amortized on a constant basis to
the maturity of the security. Equity securities held by a Fund are valued at
the last reported sales price on the securities exchange or in the principal
over-the-counter market in which such securities are traded, as of the close of
business on the day the securities are being valued or, lacking any sales, at
the last available bid price. Debt securities held by a Fund generally are
valued based on mean prices. Short-term debt investments having maturities of
60 days or less are valued at amortized cost, which
Continued
<PAGE>
American Independence Funds Trust
Notes to Financial Statements
October 31, 2000
--------------------------------------------------------------------------------
approximates market value. Investments in investment companies are valued at
their net asset values as reported by such companies. The differences between
cost and market values of such investments are reflected as unrealized
appreciation or depreciation. Securities for which market quotations are not
readily available are valued at fair market value by the investment adviser (or
the sub-adviser) in accordance with guidelines approved by the Trust's Board of
Trustees. Securities may be valued by independent pricing services, approved by
the Trust's Board of Trustees, which use prices provided by market makers or
estimates of market value obtained from yield data relating to instruments or
securities with similar characteristics. Valuation of securities held by the
Portfolio is discussed in the accompanying notes to the financial statements for
the Portfolio included elsewhere in this report.
Securities Purchased on a When-issued Basis:
Each Fund may purchase securities on a "when-issued" basis. When-issued
securities are securities purchased for delivery beyond the normal settlement
date at a stated price and/or yield, thereby involving the risk that the price
and/or yield obtained may be more or less than those available in the market
when delivery takes place. At the time a Fund makes the commitment to purchase
a security on a when-issued basis, the Fund records the transaction and reflects
the value of the security in determining net asset value. Normally, the
settlement date occurs within one month of the purchase. No payment is made by
the Fund and no interest accrues to the Fund during the period between purchase
and settlement. The Fund establishes a segregated account in which it maintains
cash and marketable securities equal in value to commitments for when-issued
securities. The Funds held no such securities as of October 31, 2000.
Repurchase Agreements:
The Funds may enter into repurchase agreements with any bank and broker-dealer
which, in the opinion of the Board of Trustees, presents a minimal risk of
bankruptcy. Under a repurchase agreement a Fund acquires securities and obtains
a simultaneous commitment from the seller to repurchase the securities at a
specified time and at an agreed upon yield. The agreements will be fully
collateralized and the values of the collateral, including accrued interest,
marked-to-market daily. If the seller should default on its obligation to
repurchase the securities, a Fund may experience a loss of income and a decrease
in the value of any collateral, problems in exercising its rights to the
underlying securities and costs and time delays in connection with the
disposition of securities.
Security Transactions and Related Income:
The Funds, other than the International Multi-Manager Stock Fund, record
security transactions on a trade date basis. Net realized gains or losses from
sales of securities are determined on the specific identification cost method.
Interest income is recorded on the accrual basis and includes, where applicable,
the amortization of premiums or the accretion of discounts. Dividend income is
recorded on the ex-dividend date.
The International Multi-Manager Stock Fund records its share of the investment
income, expenses, and unrealized and realized gains and losses of the Portfolio
on a daily basis. The income, expenses, and gains and losses are allocated
daily to investors in the Portfolio based upon their investments in the
Portfolio. Such investments are adjusted based on daily market values.
Expenses:
Expenses directly attributable to a Fund are charged directly to that Fund,
while the expenses which are attributable to more than one Fund of the Trust are
allocated among the respective funds based on relative net assets or another
appropriate basis. In addition to accruing its own expenses, the International
Multi-Manager Stock Fund records its proportionate share of the expenses of the
Portfolio on a daily basis.
Continued
<PAGE>
American Independence Funds Trust
Notes to Financial Statements
October 31, 2000
--------------------------------------------------------------------------------
Organizational Costs:
Costs incurred in connection with the organization and initial registration of
the Funds have been deferred and are being amortized using the straight-line
method over a period of five years beginning with the commencement of each
Fund's operations. In the event that any of the initial shares are redeemed
during such period by any holder thereof, the related Fund will be reimbursed by
such holder for any unamortized organizational costs in the proportion as the
number of initial shares being redeemed bears to the number of initial shares
outstanding at the time of redemption.
Distributions to Shareholders:
Distributions from net investment income for the Money Market Fund, Short-Term
Bond Fund, Intermediate Bond Fund and the Kansas Tax-Exempt Bond Fund are
declared daily and paid monthly. Distributions from net investment income for
the Stock Fund and the International Multi-Manager Stock Fund are declared and
paid annually. Distributions from net realized capital gains, if any, are
distributed at least annually.
Distributions from net investment income and from net realized capital gains are
determined in accordance with income tax regulations which may differ from
accounting principles generally accepted in the United States of America. These
"book/tax" differences are primarily due to differing treatments for mortgage-
backed securities, expiring capital loss carryforwards and deferrals of certain
losses.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassifications.
Dividends and distributions to shareholders which exceed net investment income
and net realized gains for financial reporting purposes but not for tax purposes
are reported as dividends in excess of net investment income or distributions in
excess of net realized gains. To the extent they exceed net investment income
and net realized capital gains for tax purposes, they are reported as
distributions of capital.
As of October 31, 2000, the following reclassifications have been made to
increase (decrease) such accounts with any offsetting adjustments made to
capital:
<TABLE>
<CAPTION>
Accumulated Net
Undistributed Net Realized Gains (Losses)
Investment Income on Investments
----------------- --------------
<S> <C> <C>
Money Market Fund $ 1,524 $ (1,524)
Short-Term Bond Fund (175) 175
Intermediate Bond Fund (371) 371
Stock Fund 5 (5)
International Multi-Manager Stock Fund (565,177) (270,853)
</TABLE>
Federal Income Taxes:
The Trust treats each Fund as a separate entity for federal income tax purposes.
Each Fund intends to continue to qualify as a regulated investment company by
complying with the provisions available to certain investment companies as
defined in applicable sections of the Internal Revenue Code, and to make
distributions from net investment income and from net realized capital gains
sufficient to relieve it from all, or substantially all, federal income taxes.
3. Related Party Transactions:
The Trust and INTRUST Financial Services, Inc. (the "Adviser") are parties to an
investment advisory agreement under which the Adviser is entitled to receive an
annual fee, computed daily and paid monthly, equal to the following percentages
of the Funds' average daily net assets: 0.25% of the Money Market Fund; 0.40%
of the Short-Term Bond Fund and the Intermediate Bond Fund; 1.00% of the Stock
Fund; 0.40% of the International Multi-Manager Stock Fund; and 0.30% of the
Kansas Tax-Exempt Bond Fund. The investment advisory agreement for the
International Multi-Manager Stock Fund also provides for an investment advisory
fee of 1.25% of the average daily net assets of the Fund if the Fund does not
invest all of
Continued
<PAGE>
American Independence Funds Trust
Notes to Financial Statements
October 31, 2000
--------------------------------------------------------------------------------
its assets in the Portfolio or another investment company. The Adviser assumed
responsibility as investment adviser from INTRUST Bank, N.A. on March 1, 2000.
The Adviser is party to a sub-investment advisory agreement under which the
subadvisers are entitled to receive a fee from the Adviser, computed daily and
paid monthly, equal to the following percentages of the Funds' average daily net
assets: 0.20% of the Money Market Fund; 0.125% of the Short-Term Bond Fund and
the Intermediate Bond Fund; and 0.45% of the Stock Fund. The individual
subadvisers are listed as follows:
AMR Investment Services, Inc. - The Money Market Fund, the Stock Fund
(previously managed by Ark Asset Management Co., Inc. until December 31,
1999) and the International Multi-Manager Stock Fund.
Galliard Capital Management, Inc. - The Short-Term Bond Fund and
Intermediate Bond Fund.
Barrow, Hanley, Mewhinney & Strauss, Inc. - Retained by AMR to provide
portfolio investment management services for the Stock Fund.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
and BISYS Fund Services, Inc. ("BISYS Inc.") are subsidiaries of The BISYS
Group, Inc. Certain officers of the Fund are associated with BISYS, which is an
Ohio Limited Partnership. Such officers are paid no fees directly by the Funds
for serving as officers of the Fund.
The Trust and BISYS (the "Administrator") are parties to an administration
agreement under which the Administrator provides services for a fee that is
computed daily and paid monthly, at an annual rate of 0.20% of each Fund's
average daily net assets, except for the International Multi-Manager Stock Fund
which pays at an annual rate of 0.15%.
The Trust and BISYS (the "Distributor") are parties to a distribution agreement
under which shares of the Funds are sold on a continuous basis. Each class is
subject to a distribution plan (the "Plans") pursuant to Rule 12b-1 under the
1940 Act. As provided under the Plans, the Trust will pay the Distributor up to
an annual rate of 0.25% of the average daily net assets of the Service Shares of
each Fund and 0.75% of the average daily net assets of the Premium Shares of
each Fund.
BISYS Inc. serves the Funds as Transfer Agent and Fund Accountant. Under the
terms of the Transfer Agent and Fund Accounting agreements, BISYS Inc., receives
from each fund a minimum annual fee, plus out of pocket charges.
Other financial organizations ("Service Organizations"), including affiliates of
the Adviser, also may provide administrative services for the Funds, such as
maintaining shareholder accounts and records. The Funds may pay fees to Service
Organizations in amounts up to an annual rate of 0.25% of the average daily net
assets of the Funds' shares owned by shareholders with whom the Service
Organizations have a servicing relationship.
Fees may be voluntarily reduced to assist the Funds in maintaining competitive
expense ratios. For the Kansas Tax-Exempt Bond Fund, fees are waived to
maintain total annual operating expenses at an annual rate of no more than 0.60%
of average daily net assets for both Service Shares and Premium Shares.
Continued
<PAGE>
American Independence Funds Trust
Notes to Financial Statements
October 31, 2000
--------------------------------------------------------------------------------
Additional information regarding related party transactions is as follows for
the year ended October 31, 2000:
<TABLE>
<CAPTION>
Service
Investment organization Transfer
advisory fees fees 12b-1 fees agent fees
waived waived waived waived
------ ------ ------ ------
<S> <C> <C> <C> <C>
Money Market Fund $ 76,846 $130,636 $192,115 $11,943
Short-Term Bond Fund 116,726 94,491 138,959 9,970
Intermediate Bond Fund 54,239 83,822 123,268 10,004
Stock Fund 105,554 138,032 202,989 10,965
International Multi-Manager Stock Fund 31,705 107,799 158,528 8,693
Kansas Tax-Exempt Bond Fund 135,564 237,128 348,718 7,735
</TABLE>
4. Shares of Beneficial Interest:
The Trust has an unlimited number of shares of beneficial interest, with a par
value of $0.001, which may, without shareholder approval, be divided into an
unlimited number of series of such shares and any series may be classified or
reclassified into one or more classes. Currently, shares of the Trust are
authorized to be offered through eleven series and two classes: Service and
Premium. As of and for the year ended October 31, 2000, no shareholders were in
the Premium class. Shareholders are entitled to one vote for each full share
held and will vote in the aggregate and not by class or series, except as
otherwise expressly required by law or when the Board of Trustees has determined
that the matter to be voted on affects only the interest of shareholders of a
particular class or series.
5. Securities Transactions:
The cost of security purchases and the proceeds from the sale of securities
(excluding short-term securities) during the year ended October 31, 2000 were as
follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
Short-Term Bond Fund $31,417,601 $40,326,049
Intermediate Bond Fund 18,322,069 28,089,997
Stock Fund 68,485,357 94,575,944
Kansas Tax-Exempt Bond Fund 8,067,022 25,122,620
</TABLE>
Continued
<PAGE>
American Independence Funds Trust
Notes to Financial Statements
October 31, 2000
--------------------------------------------------------------------------------
6. Concentration of Credit Risk:
The Money Market Fund's policy of concentrating in the banking industry (more
than 25% of its total assets) could increase the Fund's exposure to economic or
regulatory developments relating to or affecting banks. Banks are subject to
extensive governmental regulation, which may limit both the amounts and types of
loans and other financial commitments they can make and the interest rates and
fees they can charge. The financial condition of banks is largely dependent on
the availability and cost of capital funds, and can fluctuate significantly when
interest rates change. In addition, general economic conditions may affect the
financial condition of banks.
The Kansas Tax-Exempt Bond Fund invests in debt instruments of municipal
issuers, primarily Kansas. The issuers' abilities to meet their obligations may
be affected by economic developments in Kansas or a region of the state. The
Fund invests in securities, which include revenue bonds, tax-exempt commercial
paper, tax and revenue anticipation notes, and general obligation bonds. At
October 31, 2000, the Fund had the following concentrations by industry sector
(as a percentage of total investments):
Development 5.60%
Education 0.22%
Facilities 0.78%
General 2.39%
General Obligation 15.66%
Higher Education 2.01%
Medical 4.88%
Multi-family Housing 0.73%
Nursing Home 0.73%
Pollution 1.09%
Power 5.17%
School District 34.89%
Single-family Housing 2.33%
Transportation 3.25%
Utilities 9.13%
Water 11.14%
------
100.00%
======
Continued
<PAGE>
American Independence Funds Trust
Notes to Financial Statements
October 31, 2000
--------------------------------------------------------------------------------
7. Federal Income Tax Information:
At October 31, 2000, the following Funds had a capital loss carryforward which
is available to offset future capital gains, if any:
<TABLE>
<CAPTION>
Amount Expires
------ -------
<S> <C> <C>
Short Term Bond Fund $ 457,596 2008
Intermediate Bond Fund 48,125 2007
Intermediate Bond Fund 1,088,303 2008
Stock Fund 8,251,884 2008
Kansas Tax-Exempt Bond Fund (As of August 31, 2000) 657,785 2008
</TABLE>
It is the intent of the Funds to use these carryforwards to offset future
capital gains.
Capital losses incurred after October 31, 1999, within the Kansas Tax-Exempt
Fund's fiscal year are deemed to arise on the first business day of the
following fiscal year for tax purposes. The Kansas Tax-Exempt Bond Fund has
incurred and will elect to defer such capital losses of $ 1,376,837.
8. Other Federal Income Tax Information (unaudited):
For the taxable year ended October 31, 2000, 50.53% of the income dividends paid
by the Stock Fund qualify for the dividends received deduction available to
corporations.
During the taxable year ended August 31, 2000, the Kansas Tax-Exempt Bond Fund
declared tax-exempt income distributions in the amount of $ 6,523,634.
During the year ended October 31, 2000, the following Funds declared long-term
capital gain distributions in the following amounts:
<TABLE>
<CAPTION>
Amount
------
<S> <C>
Short-Term Bond Fund $ 17,088
International Multi-Manager Stock Fund 2,856,567
</TABLE>
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Money Market Fund
Financial Highlights, Service Shares
<TABLE>
<CAPTION>
January 23,
For the For the For the 1997 to
Year ended Year ended Year ended October 31,
October 31, 2000 October 31, 1999 October 31, 1998 1997 (a)
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------------ ------------------ ------------------ ------------------
Investment Activities
Net investment income 0.058 0.046 0.050 0.038
------------------ ------------------ ------------------ ------------------
Total from Investment Activities 0.058 0.046 0.050 0.038
------------------ ------------------ ------------------ ------------------
Distributions
Net investment income (0.058) (0.046) (0.050) (0.038)
------------------ ------------------ ------------------ ------------------
Total Distributions (0.058) (0.046) (0.050) (0.038)
------------------ ------------------ ------------------ ------------------
Net change in net asset value - - - -
------------------ ------------------ ------------------ ------------------
Net Asset Value, End of Period $ 1.000 1.000 $ 1.000 $ 1.000
================== ================== ================== ==================
Total Return 5.95% 4.70% 5.13% 3.86% (b)
Ratios/Supplemental Data:
Net assets at end of year (000) $ 73,727 $ 97,364 $ 50,746 $ 55,566
Ratio of expenses to average net assets 0.60% 0.59% 0.67% 0.71% (c)
Ratio of net investment income to average net assets 5.76% 4.61% 5.04% 4.92% (c)
Ratio of expenses to average net assets* 1.13% 1.13% 1.03% 1.11% (c)
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Short-Term Bond Fund
Financial Highlights, Service Shares
<TABLE>
<CAPTION>
January 21,
For the For the For the 1997 to
Year ended Year ended Year ended October 31,
October 31, 2000 October 31, 1999 October 31, 1998 1997 (a)
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.90 $ 10.20 $ 10.08 $ 10.00
------------------ ------------------ ------------------ ------------------
Investment Activities
Net investment income 0.56 0.53 0.57 0.42
Net realized and unrealized gains/(losses)
on investments 0.06 (0.30) 0.12 0.08
------------------ ------------------ ------------------ ------------------
Total from Investment Activities 0.62 0.23 0.69 0.50
------------------ ------------------ ------------------ ------------------
Distributions
Net investment income (0.56) (0.53) (0.57) (0.42)
Net realized gains on investments - (d) - - -
In excess of net realized gains - (d) - - -
------------------ ------------------ ------------------ ------------------
Total Distributions (0.56) (0.53) (0.57) (0.42)
------------------ ------------------ ------------------ ------------------
Net change in net asset value 0.06 (0.30) 0.12 0.08
------------------ ------------------ ------------------ ------------------
Net Asset Value, End of Period $ 9.96 $ 9.90 $ 10.20 $ 10.08
================== ================== ================== ==================
Total Return (excludes sales charge) 6.47% 2.35% 6.96% 5.13% (b)
Ratios/Supplemental Data:
Net assets at end of year (000) $ 51,984 $ 61,302 $ 61,371 $ 52,682
Ratio of expenses to average net assets 0.64% 0.65% 0.67% 0.78% (c)
Ratio of net investment income to average net
assets 5.64% 5.31% 5.59% 5.48% (c)
Ratio of expenses to average net assets* 1.29% 1.30% 1.13% 1.25% (c)
Portfolio turnover rate 57.96% 58.94% 55.75% 84.41% (b)
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Distribution per share was less than $0.005.
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Intermediate Bond Fund
Financial Highlights, Service Shares
<TABLE>
<CAPTION>
January 23,
For the For the For the 1997 to
Year ended Year ended Year ended October 31,
October 31, 2000 October 31, 1999 October 31, 1998 1997 (a)
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.86 $ 10.43 $ 10.21 $ 10.00
------------------ ------------------ ------------------ ------------------
Investment Activities
Net investment income 0.58 0.57 0.59 0.45
Net realized and unrealized gains/(losses) on
investments (0.04) (0.56) 0.22 0.21
------------------ ------------------ ------------------ ------------------
Total from Investment Activities 0.54 0.01 0.81 0.66
------------------ ------------------ ------------------ ------------------
Distributions
Net investment income (0.58) (0.57) (0.59) (0.45)
In excess of net realized gains - (0.01) - -
------------------ ------------------ ------------------ ------------------
Total Distributions (0.58) (0.58) (0.59) (0.45)
------------------ ------------------ ------------------ ------------------
Net change in net asset value (0.04) (0.57) 0.22 0.21
------------------ ------------------ ------------------ ------------------
Net Asset Value, End of Period $ 9.82 $ 9.86 $ 10.43 $ 10.21
================== ================== ================== ==================
Total Return (excludes sales charge) 5.75% 0.11% 8.16% 6.77% (b)
Ratios/Supplemental Data:
Net assets at end of year (000) $ 46,092 $ 56,091 $ 52,993 $ 46,492
Ratio of expenses to average net assets 0.76% 0.76% 0.78% 0.90% (c)
Ratio of net investment income to average net assets 6.01% 5.69% 5.74% 5.83% (c)
Ratio of expenses to average net assets* 1.31% 1.31% 1.14% 1.27% (c)
Portfolio turnover rate 37.86% 46.98% 39.07% 108.73% (b)
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Stock Fund
Financial Highlights, Service Shares
<TABLE>
<CAPTION>
January 21,
For the For the For the 1997 to
Year ended Year ended Year ended October 31,
October 31, 2000 October 31, 1999 October 31, 1998 1997 (a)
-------------------- ------------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.33 $ 12.07 $ 11.31 $ 10.00
-------------------- ------------------- ------------------ ----------------
Investment Activities
Net investment income 0.18 0.11 0.07 0.04
Net realized and unrealized gains/
(losses) on investments 1.09 (0.03) 1.28 1.27
-------------------- ------------------- ------------------ ----------------
Total from Investment Activities 1.27 0.08 1.35 1.31
-------------------- ------------------- ------------------ ----------------
Distributions
Net investment income (0.11) (0.09) (0.05) -
Net realized gains on investments (0.21) (1.73) (0.54) -
In excess of net realized gains (0.19) - - -
-------------------- ------------------- ------------------ ----------------
Total Distributions (0.51) (1.82) (0.59) -
-------------------- ------------------- ------------------ ----------------
Net change in net asset value 0.76 (1.74) 0.76 1.31
-------------------- ------------------- ------------------ ----------------
Net Asset Value, End of Period $ 11.09 $ 10.33 $ 12.07 $ 11.31
===================== =================== ================== ================
Total Return (excludes sales charge) 13.39% 0.56% 12.49% 13.10% (b)
Ratios/Supplemental Data:
Net assets at end of year (000) $ 83,791 $ 103,380 $ 100,524 $ 79,834
Ratio of expenses to average net assets 1.26% 1.29% 1.32% 1.41% (c)
Ratio of net investment income to average 1.76% 0.89% 0.66% 0.63% (c)
net assets
Ratio of expenses to average net assets* 1.83% 1.84% 1.70% 1.80% (c)
Portfolio turnover rate 87.85% 112.35% 102.36% 71.76% (b)
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
International Multi-Manager Stock Fund
Financial Highlights, Service Shares
<TABLE>
<CAPTION>
January 20,
For the For the For the 1997 to
Year ended Year ended Year ended October 31,
October 31, 2000 October 31, 1999 October 31, 1998 1997 (a)
-------------------- -------------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 13.15 $ 11.14 $ 10.97 $ 10.00
-------------------- -------------------- ------------------- --------------------
Investment Activities
Net investment income 0.16 0.21 0.18 0.11
Net realized and unrealized gains
/(losses) on investments 0.17 1.95 0.21 0.86
-------------------- -------------------- ------------------- --------------------
Total from Investment Activities 0.33 2.16 0.39 0.97
-------------------- -------------------- ------------------- --------------------
Distributions
Net investment income (0.18) (0.15) (0.13) -
Net realized gains on investments (0.60) - (0.09) -
-------------------- -------------------- ------------------- --------------------
Total Distributions (0.78) (0.15) (0.22) -
-------------------- -------------------- ------------------- --------------------
Net change in net asset value (0.45) 2.01 0.17 0.97
-------------------- -------------------- ------------------- --------------------
Net Asset Value, End of Period $ 12.70 $ 13.15 $ 11.14 $ 10.97
==================== ==================== =================== ====================
Total Return (excludes sales charge) 2.16% 19.61% 3.61% 9.70%
Ratios/Supplemental Data:
Net assets at end of year (000) $ 60,169 $ 63,441 $ 55,505 $ 41,135
Ratio of expenses to average net assets 1.15% 1.09% 1.29% 1.42%
Ratio of net investment income to average
net assets 1.17% 1.57% 1.55% 1.91%
Ratio of expenses to average net assets* 1.63% 1.57% 1.59% 1.75%
Portfolio Turnover Rate 45.05% 62.67% 23.54% 15.00%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover rate represents that of the International Equity
Portfolio.
See Notes to Financial Statements
<PAGE>
AMERICAN INDEPENDENCE FUNDS TRUST
Kansas Tax-Exempt Bond Fund
Financial Highlights, Service Shares
<TABLE>
<CAPTION>
September 1,
For the For the For the 1997 to
Year ended Year ended Year ended October 31,
October 31, 2000 October 31, 1999 October 31, 1998 1997 (b)
----------------- ---------------- ---------------- --------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 10.12 $ 10.90 $ 10.73 $ 10.66
----------------- ---------------- ---------------- --------------
Investment Activities
Net investment income 0.47 0.47 0.53 0.09
Net realized and unrealized gains/(losses) on investments 0.23 (0.73) 0.20 0.07
----------------- ---------------- ---------------- --------------
Total from Investment Activities 0.70 (0.26) 0.73 0.16
----------------- ---------------- ---------------- --------------
Distributions
Net investment income (0.47) (0.47) (0.53) (0.09)
Net realized gains on investments - - (0.03) -
In excess of net realized gains - (0.05) - -
----------------- ---------------- ---------------- --------------
Total Distributions (0.47) (0.52) (0.56) (0.09)
----------------- ---------------- ---------------- --------------
Net change in net asset value 0.23 (0.78) 0.17 0.07
----------------- ---------------- ---------------- --------------
Net Asset Value, End of Period $ 10.35 $ 10.12 $ 10.90 $ 10.73
================= ================ ================ ==============
Total Return (excludes sales charge) 7.10% (2.51%) 7.01% 1.51%(c)
Ratios/Supplemental Data:
Net assets at end of year (000) $ 140,633 $ 145,607 $ 132,917 $ 103,616
Ratio of expenses to average net assets 0.60% 0.54% 0.21% 0.21%(d)
Ratio of net investment income to average net assets 4.62% 4.44% 4.90% 5.10%(d)
Ratio of expenses to average net assets* 1.12% 1.14% 1.00% 0.82%(d)
Portfolio Turnover Rate 5.88% 21.26% 13.51% 5.87%(e)
</TABLE>
<TABLE>
<CAPTION>
Years ended August 31, (a)
1997 1996
--------- ---------
<S> <C> <C>
Net Asset Value, Beginning of Period $ 10.51 $ 10.63
--------- ---------
Investment Activities
Net investment income 0.55 0.56
Net realized and unrealized gains/(losses) on investment 0.19 (0.12)
--------- ---------
Total from Investment Activities 0.74 0.44
--------- ---------
Distributions
Net investment income (0.59) (0.56)
Net realized gains on investments - -
In excess of net realized gains - -
--------- ---------
Total Distributions (0.59) (0.56)
--------- ---------
Net change in net asset value 0.15 (0.12)
--------- ---------
Net Asset Value, End of Period $ 10.66 $ 10.51
========= =========
Total Return (excludes sales charge) 7.27% 4.23%
Ratios/Supplemental Data:
Net assets at end of year (000) $ 96,780 $ 72,065
Ratio of expenses to average net assets 0.21% 0.21%
Ratio of net investment income to average net assets 5.20% 5.31%
Ratio of expenses to average net assets* 0.62% 0.51%
Portfolio Turnover Rate 8.78% 12.71%
</TABLE>
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) Formerly the Kansas Tax-Free Income Portfolio of the SEI Tax-Exempt Trust.
(b) For the period from September 1, 1997, through October 31, 1997. The Kansas
Tax-Exempt Bond Fund changed its fiscal year end from August 31 to October
31.
(c) Not annualized.
(d) Annualized.
See Notes to Financial Statements
<PAGE>
American Independence Funds Trust
Shareholder Vote
October 31, 2000
(Unaudited)
--------------------------------------------------------------------------------
A special shareholder meeting was held on December 28, 1999. At the meeting,
Shareholders of the Stock Fund voted on the approval of a new investment sub-
advisory agreement between INTRUST Financial Services, Inc. and AMR Investment
Services, Inc. ("AMR") and an investment sub-advisory agreement between AMR and
Barrow, Hanley, Mewhinney & Strauss, Inc. ("Barrow, Hanley") with respect to the
Fund, pursuant to which AMR and Barrow, Hanley would serve as the new sub-
advisers of the Fund.
Shares Voted For: 9,650,120.735
Shares Against: 0.000
Shares Abstained: 225.769
A special shareholder meeting was held on October 27, 2000. At the meeting,
Shareholders of the Kansas Tax-Exempt Bond Fund voted on the approval of a new
investment sub-advisory agreement between INTRUST Financial Services, Inc. and
Galliard Capital Management Inc. ("Galliard") with respect to the Fund, pursuant
to which Galliard would serve as the new sub-adviser of the Fund.
Shares Voted For: 13,403,849.678
Shares Against: 0.000
Shares Abstained: 13,458.245
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Trustees
AMR Investment Services International Equity Portfolio
We have audited the accompanying statement of assets and liabilities of the AMR
Investment Services International Equity Portfolio, including the schedule of
investments, as of October 31, 2000, and the related statement of operations,
the statement of changes in net assets, and the financial highlights for each of
the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit in accordance with accounting standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting amounts and disclosures in the
financial statements. Our procedures included confirmation of investments owned
as of October 31, 2000, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
AMR Investment Services International Equity Portfolio October 31, 2000, the
results of its operations, the changes in net assets, and financial highlights
for each of the periods indicated therein, in conformity with accounting
principles generally accepted in the United States.
Ernst & Young LLP
Dallas, TX
December 15, 2000
<PAGE>
International Equity Market Overview
The events of the past twelve months have been volatile. Although the cans
of Spam and powdered milk remain, Y2K uncertainty is but a distant memory. Most
major markets set highs early in the fiscal year, only to grind lower and
achieve 12- month lows in October. Investors began to focus on a host of
negative issues: the uncertainty regarding a soft landing in the U.S., higher
inflation and oil prices, a weaker Euro, and profit warnings at many technology
and telecommunication companies.
Sentiment quickly shifted to value stocks from growth stocks. Technology and
telecommunication stocks went from being "the stocks you couldn't do without" to
the stocks you would later ask, "how could I have paid so much for stocks that
didn't have any earnings?"
The Bank of Japan hiked rates for the first time in 10 years, ending 18
months of 0% interest rates, while the European Central Bank raised rates seven
times. Most governments in Europe must feel like they won the lottery, as
auctions for third generation licenses raised much more than expected with the
final tally nearing 100 billion Euros. Although Greece will become the twelfth
member of the European Monetary Union ("EMU") on January 1, 2001, a government -
supported referendum in Denmark to join EMU was defeated, further delaying
government-supported referendums in Sweden and the UK.
Despite the many changes, a few constants remain. The U.S. continues to be
the growth engine for the world. The much-anticipated U.S. slowdown and more
balanced growth worldwide are now forecast for 2001, having failed to
materialize during 1999 or 2000. Also, the Euro continued to grind lower as
sustained strong growth in the U.S. and credibility issues with the European
Central Bank undermined interest rate hikes.
Given the number of significant economic events that occurred over the past
twelve months, the volatility in the markets should have come as no surprise to
investors. The EAFE Index posted negative returns for the fiscal year, falling
2.9% in U.S. dollar terms. At March-end, the Index was up almost 13% after five
months of the fiscal year. All of the return occurred in November and December
of 1999, as the Index was flat for the first quarter of 2000. From April
through October 2000, five of the seven months were negative, wiping out all the
gains previously achieved and pushing the Index into negative territory for the
fiscal year.
The prevalent theme during the 12-month period was not country selection, but
rather sector selection. Technology was the top-performing sector for the
fiscal year, up over 13%, and one of only two sectors (healthcare was up almost
3%) that had positive performance for the fiscal year. Given the returns of the
technology sector, the shift away from this area discussed for the U.S. equity
market is not readily apparent because of strong returns late in 1999 and early
in 2000. The change in sentiment is more apparent in the telecommunications
sector, as it was the worst performing sector for the year, off over 9%; it was
down almost 40% over the second and third quarters of 2000.
On a country basis, many of the smaller European markets were the top
performers. Denmark, Finland, Italy, Norway and Sweden each returned over 10%
for the fiscal year. Of the major markets, France was the top performer, up
almost 8%, Germany was up 3%. While the UK was down over 6%. Japan followed
up a 60% return last fiscal year with a -12% return for the latest fiscal year.
<PAGE>
The change in sentiment early in 2000 was swift and conclusive, but similar
to the 1998 Asian crisis, many good technology and telecommunication stocks were
unjustifiably decimated. Thus, the fiscal year ended with many opportunities
for value investors.
Top 10 Holdings as of October 31, 2000
Aventis SA 2.3%
Ing Groep NV 2.1%
Total Fina 1.8%
Akzo Nobel NV 1.8%
Telefonica de Espana 1.7%
E. On Ag 1.7%
BAE Systems 1.7%
Philips Electronics NV 1.6%
United OverSeas Bank 1.6%
Zurich Financial Services Group 1.5%
<PAGE>
Country Allocation as of October 31, 2000
<TABLE>
<CAPTION>
MSCI
Fund EAFE Index
------------------------------
<S> <C> <C> <C>
France 9.0% 11.2%
Germany 6.9% 8.6%
Netherlands 6.3% 5.5%
Spain 3.7% 2.9%
Italy 2.9% 4.5%
Ireland 2.3% 0.4%
Finland 2.0% 2.6%
Portugal 1.0% 0.5%
Austria 0.8% 0.2%
Belgium 0.0% 0.8%
------------------------------
Euro 34.9% 37.2%
UK 23.0% 21.4%
Switzerland 6.0% 6.1%
Sweden 3.8% 2.9%
Norway 0.9% 0.4%
Denmark 0.2% 0.9%
------------------------------
Other Non -Euro 10.9% 10.3%
Japan 15.2% 25.4%
Hong Kong 3.3% 2.0%
Singapore 3.6% 1.0%
Australia 3.6% 2.6%
New Zealand 1.0% 0.1%
South Korea 0.8% 0.0%
Malaysia 0.2% 0.0%
------------------------------
Other Asia 12.5% 5.7%
Mexico 0.5% 0.0%
Canada 3.0% 0.0%
------------------------------
Other 3.5% 0.0%
Total 100.0% 100.0%
==============================
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Statement of Assets and Liabilities
October 31, 2000
================================================================================
<TABLE>
<S> <C>
ASSETS:
Investments in securities at value (cost - $1,198,645,000)........... $ 1,252,833,000
Cash, including foreign currency..................................... 4,020,000
Dividends and interest receivable.................................... 1,908,000
Reclaims receivable.................................................. 205,000
Receivable for investments sold...................................... 8,173,000
Receivable for variation margin on open futures contracts............ 166,000
-----------------------
Total assets.................................................. 1,267,305,000
-----------------------
LIABILITIES:
Payable for investments purchased.................................... 1,204,000
Payable upon return of securities loaned............................. 94,293,000
Management and investment advisory fees payable...................... 1,259,000
Unrealized depreciation on foreign currency contracts................ 1,444,000
Other liabilities.................................................... 384,000
-----------------------
Total liabilities............................................. 98,584,000
-----------------------
Net assets applicable to investors' beneficial interests................. $ 1,168,721,000
=======================
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIOS
Statement of Operations
Year Ended October 31, 2000
================================================================================
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income........................................................ $ 6,410,000
Dividend income (net of foreign taxes of $5,122,000)................... 26,758,000
Income derived from commission recapture............................... 299,000
Income derived from securities lending, net............................ 969,000
--------------------
Total investment income........................................... 34,436,000
--------------------
EXPENSES:
Management and investment advisory fees................................ 5,029,000
Custodian fees......................................................... 1,349,000
Professional fees...................................................... 38,000
Other expenses......................................................... 7,000
--------------------
Total expenses.................................................... 6,423,000
--------------------
Net investment income.......................................................... 28,013,000
--------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on:
Investments............................................................ 202,261,000
Foreign currency transactions.......................................... (57,517,000)
Futures contracts...................................................... (1,440,000)
Change in net unrealized appreciation or (depreciation) of:
Investments............................................................ (8,783,000)
Futures contracts...................................................... 97,000
Foreign currency contracts and translations............................ (109,311,000)
--------------------
Net gain (loss) on investments.................................... 25,307,000
--------------------
Net increase (decrease) in net assets resulting from
operations.................................................................. $53,320,000
====================
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Statements of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, October 31,
2000 1999
----------------- -----------------
<S> <C> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income..................................................... $ 28,013,000 $ 27,114,000
Net realized gain (loss) on investments, futures contracts
and foreign currency transactions...................................... 143,304,000 111,938,000
Change in net unrealized appreciation
or depreciation of investments, futures contracts and
foreign currency translations.......................................... (117,997,000) 79,728,000
---------------- ----------------
Net increase in net assets
resulting from operations..................................... 53,320,000 218,780,000
---------------- ----------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTERESTS:
Contributions............................................................. 1,485,799,000 948,727,000
Withdrawals............................................................... (1,712,523,000) (853,527,000)
---------------- ----------------
Net increase (decrease) in net assets resulting
from transactions in investors'
beneficial interests.......................................... (226,724,000) 95,200,000
---------------- ----------------
Net increase (decrease) in net assets.......................................... (173,404,000) 313,980,000
---------------- ----------------
NET ASSETS:
Beginning of period........................................................ 1,342,125,000 1,028,145,000
---------------- ----------------
End of period.............................................................. $1,168,721,000 $1,342,125,000
================ ================
----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS:
----------------------------------------------------------------------------------------------------------------------------------
RATIOS:
Expenses to average net assets (annualized) .............................. 0.44% 0.37%
Net investment income to average net assets (annualized)................. 1.93% 2.27%
Portfolio turnover rate (not annualized)................................... 45% 63%
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements
October 31, 2000
1. Organization and Significant Accounting Policies
The AMR Investment Services Trust (the "Trust") is registered under
the Investment Company Act of 1940, as amended, as a no load, open-end
management investment company which was organized as a trust under the laws of
the State of New York pursuant to a Declaration of Trust dated as of June 27,
1995 and amended on August 11, 1995. The AMR Investment Services International
Equity Portfolio (the "Portfolio") is one of the portfolios of the Trust. The
Portfolio commenced active operations on November 1, 1995. The Declaration of
Trust permits the Board of Trustees (the "Trustees") to issue beneficial
interests in the Portfolio.
AMR Investment Services, Inc. (the "Manager") is a wholly-owned
subsidiary of AMR Corporation, the parent company of American Airlines, Inc.
("American"), and was organized in 1986 to provide business management,
advisory, administrative and asset management consulting services.
The following is a summary of the significant accounting policies
followed by the Portfolio.
Security Valuation
Equity securities that are primarily traded on domestic securities
exchanges are valued at the last quoted sales price on a designated exchange
prior to the close of trading on the New York Stock Exchange (the "Exchange")
or, lacking any current sales, on the basis of the last current bid price prior
to the close of trading on the Exchange. Portfolio securities that are
primarily traded on foreign securities exchanges are generally valued at the
preceding closing values of such securities on their respective exchanges where
primarily traded. Over-the-counter equity securities are valued on the basis of
the last bid price on that date prior to the close of trading. Debt securities
(other than short-term securities) normally will be valued on the basis of
prices provided by a pricing service and may take into account appropriate
factors such as institution-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics and other
market data. In some cases, the prices of debt securities may be determined
using quotes obtained from brokers. Securities for which market quotations are
not readily available are valued at fair value, as determined in good faith and
pursuant to procedures approved by the Trust's Board of Trustees (the "Board").
Investment grade short-term obligations with 60 days or less to maturity are
valued using the amortized cost method.
Security Transactions and Investment Income
Security transactions are recorded on the trade date of the security
purchase or sale. Dividend income is recorded on the ex-dividend date except
certain dividends from foreign securities which are recorded as soon as the
information is available to the Portfolio. Interest income is earned from
settlement date, recorded on the accrual basis, and adjusted, if necessary, for
amortization of premiums or accretion of discounts on investment grade short-
term securities and zero coupon instruments. For financial and tax reporting
purposes, realized gains and losses are determined on the basis of specific lot
identification.
Currency Translation
All assets and liabilities initially expressed in foreign currency
values are converted into U.S. dollar values at the bid price of such currencies
against U.S. dollars as last quoted by a recognized dealer. Income, expenses
and purchases and sales of investments are translated into U.S. dollars at the
rate of exchange prevailing on the respective dates of such transactions. The
Portfolio includes that portion of the results of operations resulting from
changes in foreign exchange rates with net realized and unrealized gain on
investments, as appropriate.
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements
October 31, 2000
Forward Foreign Currency Contracts
The Portfolio may enter into forward foreign currency contracts to
hedge the exchange rate risk on investment transactions or to hedge the value of
portfolio securities denominated in foreign currencies. Forward foreign
currency contracts are valued at the forward exchange rate prevailing on the day
of valuation.
Futures Contracts
The Portfolio may enter into financial futures contracts which are
contracts to buy a standard quantity of securities at a specified price on a
future date. Upon entering into a futures contract, the Portfolio is required
to deposit with a financial intermediary an amount ("initial margin") equal to a
certain percentage of the face value indicated in the futures contract.
Subsequent payments ("variation margin") are made or received by the Portfolio
dependent upon the daily fluctuations in the value of the underlying security
and are recorded for financial reporting purposes as unrealized gains or losses
by the Portfolio. When entering into a closing transaction, the Portfolio will
realize a gain or loss equal to the difference between the value of the futures
contract to sell and the futures contract to buy. Futures contracts are valued
at the most recent settlement price established each day by the board of trade
or exchange on which they are traded.
Federal Income and Excise Taxes
The Portfolio will be treated as a partnership for federal income tax
purposes. As such, each investor in the Portfolio will be taxed on its share of
the Portfolio's ordinary income and capital gains. It is intended that the
Portfolio's assets will be managed in such a way that an investor in the
Portfolio will be able to satisfy the requirements of sub-chapter M of the
Internal Revenue Code.
Deferred Organization Expenses
Expenses incurred by the Portfolio in connection with its organization
are being amortized on a straight-line basis over a five-year period.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimated.
2. Transactions with Affiliates
Management Agreement
The Trust and the Manager are parties to a Management Agreement which
obligates the Manager to provide or oversee the provision of all administrative,
investment advisory and portfolio management services. Investment assets of the
Portfolio are managed by multiple investment advisers which have entered into
separate investment advisory agreements with the Manager. As compensation for
performing the duties required under the Management Agreement, the Manager
receives from the Portfolio an annualized fee equal to .10% of the average daily
net assets of the Portfolio plus amounts paid by the Manager to the investment
advisors hired by the
<PAGE>
Manager to direct investment activities of the Portfolio. Management fees are
paid as follows (dollars in thousands):
<TABLE>
<CAPTION>
Amount paid to Net Amount paid to
Management Fee Rate Management Fee Investment Advisors Manager
------------------- -------------- ------------------- -------------------
<S> <C> <C> <C>
.25% - .70% $5,029 $3,579 $1,450
</TABLE>
Other
Certain officers or trustees of the Portfolio are also current or
former officers or employers of the Manager or American. The Portfolio makes no
direct payments to its officers. Unaffiliated trustees and their spouses are
provided free unlimited air transportation on American. However, the Portfolio
compensates each Trustee with payments in an amount equal to the Trustee's
income tax on the value of this free airline travel. For the year ended October
31, 2000, the cost of air transportation was not material to the Portfolio.
3. Investment Transactions
The aggregate cost of purchases and proceeds from sales of
investments, other than short-term obligations, for the year ended October 31,
2000 were $596,501,000 and $795,199,000, respectively.
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements
October 31, 2000
4. Commitments
In order to protect itself against a decline in the value of
particular foreign currencies against the U.S. dollar, the Portfolio has entered
into forward contracts to deliver or receive foreign currency in exchange for
U.S. dollars as described below. The Portfolio bears the market risk that
arises from changes in foreign exchange rates, and accordingly, the unrealized
gain (loss) on these contracts is reflected in the accompanying financial
statements. The Portfolio also bears the credit risk if the counterparty fails
to perform under the contract. At October 31, 2000, the Portfolio had
outstanding forward foreign currency contracts as follows:
<TABLE>
<CAPTION>
Contracts to Deliver
--------------------
(amounts in thousands) Settlement Unrealized
Date Value Gain/(Loss)
------------------ ------------------- ---------------------
<S> <C> <C> <C> <C>
2,445 Australian Dollar 11/10/00 $ 1,267 $ 69
3,098 Canadian Dollar 11/10/00 2,028 49
407 Euro Currency 11/2/00 345 (6)
20,892 Euro Currency 11/10/00 17,738 418
1,864,851 Japanese Yen 11/10/00 17,123 180
1,663 Pound Sterling 11/2/00 2,415 (27)
9,451 Pound Sterling 11/10/00 13,717 65
1,040 Singapore Dollar 11/1/00 593 -
17,069 Swiss Franc 11/10/00 4,086 107
------------------- ---------------------
Total contracts to deliver
(Receivable amount $60,167) $59,312 $ 855
=================== =====================
Contracts to Receive
--------------------
(amounts in thousands)
3,093 Australian Dollar 11/10/00 $ 1,604 $ (167)
4,210 Canadian Dollar 11/10/00 2,756 (86)
25,845 Euro Currency 11/10/00 21,943 (1,164)
2,231 Japanese Yen 11/10/00 20,486 (526)
11,360 Pound Sterling 11/10/00 16,485 (81)
22,173 Swiss Franc 11/10/00 5,246 (275)
------------------- ---------------------
Total contracts to receive
(Payable amount $70,819) $68,520 $(2,299)
=================== =====================
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements
October 31 2000
5. Securities Lending
The Portfolio participates in a securities lending program under which
securities are loaned to selected institutional investors. All such loans
require collateralization with cash, securities of the U.S. Government and its
agencies or letters of credit that at all times equal at least 100% of the
market value of the loaned securities plus accrued interest. The Portfolio may
bear the risk of delay in recovery of, or even loss of rights in, the securities
loaned should the borrower of securities fail financially. The Portfolio
receives the interest on the collateral less any fees and rebates paid to agents
and transferees of securities. The Portfolio also continues to receive interest
on the securities loaned, and any gain or loss in the market price of securities
loaned that may occur during the term of the loan will be for the account of the
Portfolio.
At October 31, 2000, securities with a market value of approximately
$90,607,776 were loaned by the Portfolio. The custodian for the Portfolio held
an investment in the AMR Investments Enhanced Yield Business Trust and the
American Select Cash Reserve Fund (the "Funds") totaling $94,292,512. In
addition, the custodian held non-cash collateral totaling $162,712. The Manager
serves as Trustee and as investment adviser to the Funds. The Manager receives
from the Funds annualized fees equal to 0.10% of the average daily net assets.
6. Commission Recapture
The Portfolios of the Trust have established brokerage commission
recapture arrangements with certain brokers or dealers. If a Portfolio
investment adviser chooses to execute a transaction through a participating
broker, the broker rebates a portion of the commission back to the Portfolio.
Any collateral benefit received through participation in the commission
recapture program is directed exclusively to the Portfolios.
7. Futures Contracts
A summary of obligations under these financial instruments at October
31, 2000 is as follows:
<TABLE>
<CAPTION>
Unrealized
Market Appreciation/
Type of Future Expiration Contracts Value (Depreciation)
----------------------------- ------------------ ------------------ ------------------ --------------------
<S> <C> <C> <C> <C>
Hang Seng Index Nov. 2000 4 $ 385,762 $ 4,122
Spain IBEX Index Nov. 2000 7 617,201 360
Sweden OMX Index Nov. 2000 55 646,469 11,814
Australia Allord Index Dec. 2000 13 552,401 (1,749)
Canada S&P Index Dec. 2000 17 1,267,793 (80,207)
France CAC Index Dec. 2000 47 2,572,088 72,525
Germany DAX Index Dec. 2000 13 1,962,448 87,356
Italy MIB Index Dec. 2000 5 1,014,365 31,679
Japan Nikkei 300 Index Dec. 2000 233 5,861,805 (103,691)
UK FTSE Index Dec. 2000 52 4,900,546 75,387
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Schedule of Investments
October 31, 2000
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Shares Value
-------------------------------------------
<S> <C> <C>
STOCKS - 96.21%
AUSTRALIA COMMON STOCK - 3.45%
Australia & New Zealand Banking Group 1,646,602 $ 12,158,000
Broken Hill Property 323,260 3,132,000
Cable and Wireless Optus, 144a (Note A) 1,407,803 2,982,000
CSR Limited 1,850,000 3,787,000
Mayne Nickless Limited 965,000 2,560,000
News Corporation Preferred Rights 345,000 3,093,000
Onesteel Limited 86,190 41,000
QBE Insurance Group Limited 1,899,848 8,761,000
Westralian Sands 360,594 753,000
WMC Limited 785,000 3,000,000
-----------------------
TOTAL AUSTRALIA COMMON STOCK 40,267,000
-----------------------
AUSTRIA - 0.75%
PREFERRED STOCK - 0.35%
Bank Austria AG, 144a (Note A) 76,000 4,107,000
-----------------------
TOTAL AUSTRIA PREFERRED STOCK 4,107,000
-----------------------
COMMON STOCK - 0.40%
Boehler-Uddeholm 66,825 2,096,000
Evn Energie-Versorgung Niederoesterreich AG 13,380 322,000
VA Technologie AG, 144a (Note A) 11,000 445,000
Wienerberger Baust 97,000 1,823,000
-----------------------
TOTAL AUSTRIA COMMON STOCK 4,686,000
-----------------------
TOTAL AUSTRIA 8,793,000
-----------------------
CANADA COMMON STOCK - 2.86%
Alcan Aluminum Limited 125,000 3,933,000
BCE, Incorporated 236,170 6,340,000
Canadian National Railway Company 101,300 3,184,000
Canadian Natural Resources Limited 33,037 973,000
Husky Energy Incorporated 240,000 1,894,000
Manulife Financial Corporation 533,010 13,820,000
Transcanada Pipelines Limited 351,000 3,335,000
-----------------------
TOTAL CANADA COMMON STOCK 33,479,000
-----------------------
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Schedule of Investments
October 31,2000
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------------------------------------------
<S> <C> <C>
DENMARK COMMON STOCK - 0.21%
Tele Danmark AS 52,000 2,458,000
-----------------------
TOTAL DENMARK COMMON STOCK 2,458,000
-----------------------
FINLAND COMMON STOCK - 2.31%
Enso-Gutzeit OY, "R" 212,000 2,174,000
Konecranes International 96,000 2,237,000
Metsa-Serla OY, "B" 100,000 627,000
Metso OYJ 173,869 1,327,000
Nordic Baltic Holdings 882,300 6,656,000
UPM-Kymmene OY 496,390 14,033,000
-----------------------
TOTAL FINLAND COMMON STOCK 27,054,000
-----------------------
FRANCE COMMON STOCK - 8.69%
Alcatel Alsthom CG 90,250 5,500,000
Aventis SA 374,773 27,002,000
Axa SA 94,007 12,430,000
Banque Nationale de Paris 190,500 16,406,000
BIC SA 117,845 4,081,000
Lagardere S.C.A. 43,500 2,467,000
Pechiney SA 51,800 1,932,000
Pernod-Ricard 88,817 4,066,000
Saint Gobain 21,284 2,813,000
Total Fina 150,472 21,504,000
Vivendi 47,225 3,391,000
-----------------------
TOTAL FRANCE COMMON STOCK 101,592,000
-----------------------
GERMANY COMMON STOCK - 6.62%
Allianz AG 18,005 6,098,000
BASF AG 57,000 2,232,000
BAYER AG 90,000 3,902,000
Bayer Hypo Vereins 105,800 5,807,000
BBS Kraftfahrzeugt 15,260 206,000
Boss (Hugo) AG 26,400 6,722,000
Depfa DT Pfander 64,700 4,771,000
Dragerwerk AG 93,857 688,000
E.on AG 395,661 20,083,000
Gehe AG 118,800 4,320,000
Krones AG 105,000 2,581,000
Merck KGAA 94,000 3,570,000
Muenchener Rueckversicherung AG, DEM 10 13,676 4,295,000
Muenchener Rueckversicherung AG, DEM 5 293 26,000
Thyssen Krupp AG 427,800 6,092,000
Volkswagen AG 78,500 3,917,000
Vossloh AG 138,145 2,049,000
-----------------------
TOTAL GERMANY COMMON STOCK 77,359,000
-----------------------
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Schedule of Investments
October 31,2000
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------------------------------------------
<S> <C> <C>
-
HONG KONG COMMON STOCK - 3.28% -
Cheung Kong Holdings Limited 330,000 3,650,000
Henderson Land Development Company 1,581,000 6,812,000
Hong Kong Electric Holdings 2,714,400 8,962,000
Huaneng Power International 9,916,000 3,878,000
Hutchinson Whampoa Limited 165,000 2,052,000
New World Development Company Limited 1,803,000 2,138,000
South China Morning Post 7,557,000 5,184,000
Swire Pacific 918,200 5,663,000
-----------------------
TOTAL HONG KONG COMMON STOCK 38,339,000
-----------------------
-
IRELAND COMMON STOCK - 1.30% -
Allied Irish Banks 641,948 6,530,000
Greencore Group 1,471,180 3,429,000
Jefferson Smurfit 2,945,742 5,244,000
-----------------------
TOTAL IRELAND COMMON STOCK 15,203,000
-----------------------
-
ITALY COMMON STOCK - 2.79% -
Alleanza Assicuraz 249,100 3,300,000
BCA Naz Del Lavoro 1,030,000 3,335,000
Eni SPA 2,374,895 12,844,000
Sao Paolo Imi SPA 226,980 3,675,000
STET Telecom Italia 811,670 9,391,000
-----------------------
TOTAL ITALY COMMON STOCK 32,545,000
-----------------------
-
JAPAN COMMON STOCK - 14.60% -
Best Denki Company 300,000 1,682,000
Canon, Incorporated 367,000 14,554,000
Circle K Japan Company 175,800 5,668,000
Fujitsu 281,000 5,003,000
Hitachi Limited 483,000 5,176,000
Kanamoto Company 310,000 1,675,000
KAO Corporation 249,000 7,457,000
Komatsu 711,000 3,152,000
Makita Corporation 105,000 765,000
Matsushita Electric Industrial Company 164,000 4,761,000
Matsuzakaya Company 500,000 1,149,000
Mizuho Holdings 749 5,755,000
Namco 254,200 6,565,000
Nikko Securities Company Limited 311,000 2,683,000
Nintendo Company Limited 93,500 15,457,000
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Schedule of Investments
October 31,2000
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------------------------------------------
<S> <C> <C>
Nippon Telephone & Telegraph Company 1,040 9,458,000
Nissan Motor Company 1,921,000 13,178,000
Nomura Securities 350,000 7,421,000
NTT Mobile Communication 240 5,913,000
Okumura Corporation 700,000 2,052,000
Orix Corporation 30,900 3,240,000
Promise Company Limited 62,200 4,666,000
Sakura Bank 690,000 5,023,000
Sankyo Company 288,000 6,344,000
Sanyo Shinpan Finance Company 124,000 2,953,000
Sony Corporation 161,300 12,882,000
Sumitomo Electrical Industries 132,000 2,436,000
Sumitomo Trust & Banking 412,000 3,170,000
TDK Corporation 64,700 6,518,000
Welfide 501,000 3,602,000
Yamato Kogyo Company Limited 87,000 284,000
-----------------------
TOTAL JAPAN COMMON STOCK 170,642,000
-----------------------
LUXEMBOURG COMMON STOCK - 0.24%
Stolt-Nielsen SA, "B" 152,000 2,810,000
-----------------------
TOTAL LUXEMBOURG COMMON STOCK 2,810,000
-----------------------
MALAYSIA COMMON STOCK - 0.21%
Golden Hope Plantations BHD 2,603,000 2,493,000
-----------------------
TOTAL MALAYSIA COMMON STOCK 2,493,000
-----------------------
MEXICO COMMON STOCK - 0.52%
Industrias Penoles 430,000 501,000
Telmex ADR 104,000 5,610,000
-----------------------
TOTAL MEXICO COMMON STOCK 6,111,000
-----------------------
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Schedule of Investments
October 31,2000
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------------------------------------------
<S> <C> <C>
NETHERLANDS COMMON STOCK - 6.03%
Akzo Nobel NV 463,074 21,059,000
CNH Global NV 240,000 2,325,000
Ing Groep NV 363,649 24,943,000
Philips Electronics NV 476,312 18,697,000
Wolters Kluwer 150,300 3,379,000
-----------------------
TOTAL NETHERLANDS COMMON STOCK 70,403,000
-----------------------
NEW ZEALAND COMMON STOCK - 0.94%
Carter Holt Harvey Limited 1,205,889 799,000
Fisher & Paykel Limited 880,000 2,514,000
Fletcher Challenge Building 2,340,177 1,672,000
Telecom Corporation of New Zealand 2,700,477 5,980,000
-----------------------
TOTAL NEW ZEALAND COMMON STOCK 10,965,000
-----------------------
NORWAY COMMON STOCK - 1.16%
DNB Holdings, AS 810,000 3,510,000
Kvaerner Industries AS, Series A 349,877 3,442,000
Norsk Hydro AS 90,000 3,571,000
Nycomed AS, Series B 324,320 2,982,000
-----------------------
TOTAL NORWAY COMMON STOCK 13,505,000
-----------------------
PORTUGAL COMMON STOCK - 0.94%
Electric De Portugal 571,600 1,551,000
Portugal Telecom 1,059,125 9,426,000
-----------------------
-----------------------
TOTAL PORTUGAL COMMON STOCK 10,977,000
-----------------------
SINGAPORE COMMON STOCK - 3.43%
Development Bank of Singapore Group Holdings 540,795 6,377,000
Creative Technology 348,350 5,655,000
Natsteel Electronics 2,094,000 5,439,000
Overseas Chinese Bank 715,650 4,566,000
United OverSeas Bank 2,439,225 18,064,000
-----------------------
TOTAL SINGAPORE COMMON STOCK 40,101,000
-----------------------
SPAIN COMMON STOCK - 3.52%
Banco Popular Espanol 84,000 2,510,000
Endesa SA 287,545 4,680,000
Iberdrola SA 200,357 2,447,000
Repsol SA (RG) 706,090 11,204,000
Telefonica de Espana 1,062,861 20,244,000
-----------------------
TOTAL SPAIN COMMON STOCK 41,085,000
-----------------------
SOUTH KOREA COMMON STOCK - 0.76%
Hyundai Electrical Industries 340,000 2,089,000
Kookmin Bank GDR, 144a (Note A) 208,356 2,396,000
LG Electronics, Incorporated 182,000 2,536,000
Korea Electric Power Corporation 80,860 1,806,000
-----------------------
TOTAL SOUTH KOREA COMMON STOCK 8,827,000
-----------------------
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Schedule of Investments
October 31,2000
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------------------------------------------
<S> <C> <C>
SWEDEN COMMON STOCK - 3.36%
Assidoman 72,800 23,000
Assidoman AB, 144a (Note A) 72,800 1,232,000
Astrazeneca 27,847 1,312,000
Autoliv, Incorporated 125,000 2,732,000
Electrolux AB, "B" 918,970 11,556,000
Foreningssparbk 208,000 2,979,000
Granges AB 15,000 210,000
Investor AB 389,900 5,137,000
Nordic Baltic Holdings 411,060 3,031,000
Stora Enso OY, Series A 62,062 632,000
Stora Enso OY, Series R 152,602 1,560,000
Svedala Industries, "A" Free 180,000 2,677,000
Svenska Handelsbanken 230,390 3,610,000
Volvo AB 170,000 2,613,000
-----------------------
TOTAL SWEDEN COMMON STOCK 39,304,000
-----------------------
SWITZERLAND COMMON STOCK - 5.79%
ABB AG 86,006 7,641,000
Clariant 12,700 3,871,000
Novartis AG 4,997 7,579,000
Roche Holdings AG 421 3,845,000
Saurer AG 8,469 3,697,000
Schweitz Ruckversiche 2,500 4,929,000
Sig Schweitz Industries AG 21,225 12,511,000
Sulzer AG 9,967 6,436,000
Zurich Financial Services Group 35,399 17,128,000
-----------------------
TOTAL SWITZERLAND COMMON STOCK 67,637,000
-----------------------
UNITED KINGDOM - 22.45%
Alliance and Lei PLC 467,000 3,994,000
Allied Domecq PLC 2,063,794 10,676,000
Astrazeneca 95,110 4,458,000
BAA PLC 1,172,280 9,754,000
BAE PLC 3,433,083 19,517,000
BG Group PLC 470,587 1,886,000
BP Amoco 739,330 6,275,000
British American Tobacco Industries PLC 708,985 4,973,000
British Energy PLC 538,750 1,408,000
British Telecommunications 1,103,810 12,951,000
Cadbury Schweppes 598,220 3,700,000
Celltech Group 431,137 8,577,000
Commercial Union PLC 305,970 4,096,000
Cookson Group PLC 2,944,055 8,016,000
Diageo 502,443 4,746,000
GKN PLC 186,700 2,141,000
Great Universal Stores PLC 531,900 3,676,000
Halifax Group PLC 322,500 2,538,000
Hanson PLC 2,166,340 11,435,000
HSBC Holdings PLC 381,665 5,442,000
Imperial Chemical Industries PLC 412,000 2,525,000
Innogy Holdings 460,000 1,336,000
Invensys 1,584,108 3,784,000
Lasmo PLC 1,340,000 2,851,000
Lattice Group 470,587 1,005,000
Lloyds TSB Group PLC 630,321 6,425,000
Marconi PLC 285,000 3,600,000
Marks & Spencer 500,000 1,394,000
National Grid Group PLC 633,400 5,496,000
</TABLE>
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Schedule of Investments
October 31,2000
------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------------------------------------------
<S> <C> <C>
National Power PLC 460,000 1,857,000
Next PLC 290,000 2,887,000
Northern Foods PLC 1,000,000 1,625,000
PowerGen PLC 473,000 3,668,000
Prudential Corporation 294,565 3,965,000
Reed International PLC 1,630,020 15,077,000
Royal Bank of Scotland PLC 198,784 4,465,000
Safeway PLC 709,677 2,952,000
Scapa Group 471,000 793,000
Shell Transportation & Trading Company PLC 535,000 4,308,000
Smiths Industries PLC 522,900 5,604,000
Stagecoach Holdings 1,370,000 1,373,000
Tesco PLC 3,925,097 14,976,000
Thames Water Group PLC 173,983 3,052,000
TI Group PLC 681,500 3,681,000
Tomkins 1,543,478 3,676,000
Unilever PLC 2,230,171 15,099,000
United News & Media PLC 446,072 5,587,000
Williams PLC 1,893,034 9,074,000
-----------------------
TOTAL UNITED KINGDOM 262,394,000
-----------------------
TOTAL STOCKS 1,124,343,000
-----------------------
SHORT TERM INVESTMENTS - 10.99%
American Select Cash Reserve Fund 60,449,783 60,450,000
AMR Investments Enhanced Yield Business Trust 68,040,302 68,040,000
-----------------------
TOTAL SHORT TERM INVESTMENTS 128,490,000
-----------------------
-
TOTAL INVESTMENTS - 107.20% (Cost $ 1,198,645) 1,252,833,000
-----------------------
LIABILITIES, NET OF OTHER ASSETS - (7.20%) (84,112,000)
-----------------------
TOTAL NET ASSETS - 100% $ 1,168,721,000
=======================
</TABLE>
Based on the cost of investments of $1,205,597 for federal income tax purposes
at October 31, 2000, the aggregate gross unrealized appreciation was $172,199,
the aggregate gross unrealized depreciation was $124,963, and the net unrealized
appreciation of investments was $47,236.
(A) Security exempt from registration under Rule 144a of the Securities Act of
1933. These securities may be resold in transactions exempt from registration,
normally to qualified institutional buyers. At the period end, the value of
these securities amounted to $11,162 or 0.96% of net assets.
ABBREVIATIONS:
ADR - American Depository Receipt
GDR - Global Depository Receipt
<PAGE>
AMR INVESTMENT SERVICES INTERNATIONAL EQUITY PORTFOLIO
Notes to Financial Statements
October 31, 2000
Consumer Discretionary.................................... 12.35%
Consumer Staples.......................................... 6.51%
Energy.................................................... 5.41%
Finance................................................... 27.13%
Healthcare................................................ 6.36%
Industrials............................................... 12.68%
Information Technology.................................... 5.27%
Materials................................................. 6.65%
Publishing................................................ 0.29%
Telecommunication Services................................ 7.77%
Utilities................................................. 5.79%
Short-Term Investments.................................... 10.99%
Other Assets.............................................. (7.20%)
-------
Net Assets......................................... 100.00%
=======
