AFBA
Five Star
FundSM
Semiannual Report
September 30, 1999
100% pure no-load
mutual funds
MESSAGE
To Our Shareholders
The six months ending September 30, 1999 continued
trends started more than a year ago. Economic
expansion continued and market indices advanced,
but market volatility persisted.
This report includes the second in a series of
discussions concerning overall portfolio and
investment strategies of the various AFBA Five
Star Funds. The Portfolio Management Review
immediately following this letter will discuss
international investing generally, and techniques
used by Kornitzer Capital Management, Inc. in the
AFBA Five Star USA Global Fund.
In the past year, investors have been deluged with
news reports about Year 2000 impact on investments
and mutual funds. The directors and officers of
the AFBA Five Star Fund understand these concerns,
and have paid very close attention to such issues.
I am happy to report that all mission critical
systems with respect to the AFBA Five Star Fund,
including transfer agency, custodian, and
portfolio accounting, are Y2K compliant.
Monitoring and testing of such systems will
continue through year-end, and we will do whatever
is required to assure that your investment is
secure, and that your account information is
properly processed.
Investment Results - Total Return
One Year Ended Since Inception
9/30/99 6/3/97 to 9/30/99
Balanced 6.76% 3.69%
Equity 18.59% 7.70%
High Yield 1.21% 1.02%
USA Global 25.97% 9.37%
Performance data contained in this report is for
past periods only. Past performance is not
predictive of future performance. Investment
return and share value will fluctuate, and
redemption value may be more or less than original
cost.
We appreciate the opportunity to serve all of our
investors, both old and new, and will be happy to
answer your questions, hear your comments, or to
provide additional information.
Sincerely,
C.C. Blanton
/s/C.C. Blanton
Chairman
Portfolio Management Review
Is Now the Time to Go Global?
Since the start of the Asian financial crisis
during the summer of 1997, world financial markets
have been particularly volatile. Although there
remains many troubled spots in the world, notably
Indonesia and Latin America, most of Asia is on
the mend and the United States economy remains
very strong. We thought this would be a good time
to review the AFBA Five Star USA Global Fund
assets managed by Kornitzer Capital Management.
The Fund invests in U.S-based companies that
receive at least 40% of their sales or income from
outside the U.S. The objective is to own companies
taking advantage of worldwide growth, while
minimizing the risks associated with owning
foreign stocks. So read on to learn of the
advantages of this global investing approach.
Why Invest Globally?
A primary reason for investing globally is
diversification. Because U.S. and foreign stock
markets do not move up and down together in lock
step, investors may reduce the overall risk of
their portfolio (typically measured by the
standard deviation of returns) by including both
domestic and international stocks in their
portfolios.
CHART - Figure 1. Contribution to World GDP, 1997
A second reason for investing globally is economic
growth potential. Asia and the developing world
have experienced growth rates that have
outstripped those of the U.S. and Europe - largely
driven by a combination of population growth and
productivity improvements. Rapid economic
expansion gives companies the opportunity to
generate strong revenue and earnings growth.
Where to Invest?
There are ample opportunities to invest outside of
the United States. The U.S. stock market accounted
for 47% of total world stock market capitalization
through 1997. With over half of the world's equity
capitalization in foreign stocks, investors should
not ignore international opportunities. Additional
evidence of the importance of taking a global view
of investing is provided by Figure 1, which shows
the allocation of total contribution to worldwide
GDP. Note that the United States accounts for only
one fifth of the world's economy.
Foreign vs. Domestic Investing - Differences
Investing in foreign stocks (or in international
mutual funds, which buy foreign stocks) adds
several additional risks and costs not generally
encountered by purely domestic investors.
Commissions and Taxes. While commissions are fully
negotiable in the U.S., the government or stock
exchange in other countries often fixes them. Not
surprisingly, fixed commission rates generally
lead to higher costs for the foreign stock
investor. Additionally, investors will frequently
have to deal with withholding taxes on dividends.
Liquidity. Transaction volumes on U.S. exchanges
are generally much higher than on foreign
exchanges, leading to superior liquidity
associated with domestic markets. This becomes
very important when investment managers - faced
with redemptions from their mutual funds - are
forced to sell stocks. In addition, some countries
restrict the type and number of shares foreign
investors may own.
Exchange Rules. Many foreign stock exchanges
require extended clearance and settlement periods.
E.g., stock trades settle in 5 days on the Italian
Stock Exchange versus 3 days on the NYSE. Also,
rules governing the safekeeping of shares held by
custodian banks may not be as developed as in the
United States, putting those shares at risk should
the custodian fail.
Supervision of Exchanges and Legal Remedies. There
is generally less enforcement of security laws and
supervision of stock exchanges in developing
countries. Attempting to deal with a legal issue
related to a foreign investment might require you
to sue a company in a country where you have far
fewer rights than what you may have in the United
States. And collecting a judgement from a U.S.
court against a foreign company may also be
impossible.
Information. There is usually less publicly
available information regarding foreign companies
than there is for U.S.-based companies. In
particular, foreign accounting practices may not
require companies to report financial information
as frequently as is required of U.S.-based
corporations, and foreign companies are not
necessarily subject to uniform accounting and
auditing standards.
Political Risk. These are generally risks
associated with the stability of national
governments, including; coups, assassinations,
civil unrest, expropriation of foreigner's assets
and nationalization of corporations. For example,
the French government nationalized steel and
chemical companies in the mid-1980's in an effort
to protect jobs.
Table 1. Top 10 Most Widely Held ADRs*
<TABLE>
<CAPTION>
SOURCE OF REVENUES
COMPANY COUNTRY INFORMATION SOURCE USAREST OF WORLD
</CAPTION>
<S> <C> <C> <C> <C>
Royal Dutch Petroleum Netherlands RD 1998 Annual Report 21% 79%
BP Amoco p.l.c. United Kingdom BP 1998 Annual Report 47% 53%
Nokia Corporation Finland NOK 1998 Annual Report 21%+ 79%
Unilever N.V. Netherlands UN 1998 Annual Report 21% 79%
SmithKline Beecham United Kingdom SBH 1998 Annual Report 51% 49%
Telefonos de Mexico Mexico Na Na Na
Elan Corporation Ireland ELN 1998 Annual Report 74% 26%
Royal Philips Electronics Netherlands PHG 1998 Annual Report 24% 76%
YPF Sociedad Anonima Argentina YPF 1998 Annual Report 3% 97%
LM Ericsson Telephone Sweden ERICY 1998 Annual Report 10%# 90%
</TABLE>
+ 21% from Americas
# Includes North America
*Most widely held ADRs as of July 23, 1999
Table 2. Top 10 Holdings in the AFBA Five Star USA Global Fund*
<TABLE>
<CAPTION>
SOURCE OF REVENUES
COMPANY COUNTRY INFORMATION SOURCE USAREST OF WORLD
</CAPTION>
<S> <C> <C> <C> <C>
Cisco Systems USA CSCO 1998 Annual Report 41% 59%
National Semiconductor USA NSM 1998 Annual Report 38% 62%
Intel USA INTC 1998 Annual Report 45%# 55%
McDonald's USA MCD 1998 Annual Report 39% 61%
Analog Devices USA ADI 1998 Annual Report 50%# 50%
Sara Lee USA SLE 1998 Annual Report 53% 47%
Applied Micro Circuits USA AMCC 1998 Annual Report 59% 41%
Microsoft USA MSFT 1998 Annual Report 47% 53%
Hewlett-Packard USA HWP 1998 Annual Report 46% 54%
Johnson & Johnson USA JNJ 1998 Annual Report 53% 47%
</TABLE>
# Includes North America
* AFBA Five Star USA Global Top 10 Holdings as of 9/30/99, statement of
assets. Subject to change.
How Global is your Mutual Fund?
Table 1 shows the top ten most widely held ADRs
along with the fraction of revenue that each
company receives from the United States. Note that
some of the companies get a substantial amount
(and sometimes a majority) of their revenue from
customers in the U.S. Other widely held
international stocks with significant percentages
of their sales coming from the U.S. include; Sony
of Japan (32%), News Corporation of Australia
(74%), DaimlerChrysler of Germany (50%), Novartis
of Switzerland (37%), and Seagram of Canada (68%).
Clearly, owning foreign securities may not provide
the diversification across the world's economies
that might be expected. Similarly, Table 2 shows
the ten largest holdings of the AFBA Five Star USA
Global Fund as of September 30, 1999. Note that
the revenue outside of the United States as a
percentage of total revenue is comparable to the
majority of the widely held foreign stocks in
Table 1. Table 2 demonstrates that it is possible
to build a portfolio with significant
international (non-U.S.) revenue exposure without
investing on foreign exchanges or directly in
foreign stocks. Indeed, this is one of the key
objectives of the AFBA Five Star USA Global Fund.
Why do we Expect U.S. Companies to Dominate?
Recognized Brand Names. From Calcutta to Cairo,
many products of U.S.-based companies are as
recognizable in other countries as the best
foreign brands. Building a worldwide recognized
brand takes years of hard work, billions of
dollars in marketing, and a great product. For
example, Coca-Cola was introduced in France in
1933. Thirty-three years later, in 1966, it became
the number-one soft drink, and today, has a 6-to-1
lead over the second-place brand. What does it
take to maintain the leading brand position? Coca-
Cola invested 3 billion francs in France from 1989
through 1997.
Customization of Products. Local tastes often
dictate which products will succeed or fail. The
reluctance or inability to design products that
satisfy the tastes of customers in a particular
country assures long-term failure. Consider what
it takes to be a worldwide success. McDonald's, a
U.S.-based company, has developed the world's
largest restaurant chain by tailoring its menu to
the local tastes of virtually every country.
Low Penetration. The vast majority of recognized
and widely distributed brands of U.S. companies
still have tremendous growth opportunities
overseas. While many of these products are used
daily in the U.S. (such as computers, cell phones
and pharmaceuticals), they are just beginning to
be discovered by consumers in many of the most
populous countries. Importantly, in many of the
countries with the lowest penetration, branded
products have already attained high levels of
brand recognition.
Superior Products. In many industries U.S.
companies have very little, if any, foreign
competition. Often the only competitors are other
U.S. companies. Nowhere is this more evident than
in the technology sector. Intel, Microsoft and
Cisco Systems, all of which receive more than one-
half of their revenue from outside the United
States, primarily compete with other U.S.-based
firms.
In summary, we are extremely excited about
prospects for global growth. Looking around the
world we see rising population and wealth, and a
rapid adoption of new products and technologies.
The world's demand for such diverse products as
microprocessors, software, Internet infrastructure
equipment, soft drinks, aircraft, fast food, and
wireless communications equipment should continue
to be very strong. Respectively, we see the world
leaders in each of these areas as Intel,
Microsoft, Cisco Systems, Coca-Cola, Boeing,
McDonald's, and Motorola - all U.S.-based
companies. In many other industries we see the
same pattern of high growth markets with U.S.-
based corporations in product leadership positions
moving quickly to capture that growth. We believe
that owning these opportunistic U.S.-based
corporations, rather than their foreign
competitors is the smartest, and safest, way to
play global growth.
We hope this discussion of the AFBA Five Star USA
Global Fund has been useful in giving you insight
to the management of the Fund. We look forward to
discussing other AFBA Funds with you in the
future.
Sincerely,
/s/John C. Kornitzer /s/Kent W. Gasaway
John C. Kornitzer Kent W. Gasaway
President Sr. Vice President
Tom W. Laming
/s/Tom W. Laming
Sr. Vice President
AFBA FIVE STAR
BALANCED FUND
SCHEDULE OF INVESTMENTS
September 30, 1999 (unaudited)
SHARES COMPANY MARKET VALUE
COMMON STOCKS - 54.12%
CAPITAL GOODS - 2.63%
1,500 Lockheed Martin Corp. $ 49,031
1,000 Tyco International Ltd. 103,250
152,281
CONSUMER CYCLICAL - 13.99%
3,000 Carnival Corp. 130,500
6,000 Elcor Corp. 150,000
4,000 Ethan Allen Interiors, Inc. 127,250
2,900 Interface, Inc. Cl. A 14,862
4,000 Kmart Corp.* 46,750
5,000 Mirage Resorts, Inc.* 70,313
7,000 ServiceMaster Co. 112,437
8,000 Strayer Education, Inc. 159,000
811,112
CONSUMER STAPLES - 3.35%
4,000 Disney (Walt) Holding Co.* 103,500
3,000 PepsiCo, Inc. 90,750
194,250
ENERGY - 3.42%
17,000 Frontier Oil Corp.* 115,813
1,500 Global Marine, Inc.* 24,656
1,000 McDermott International, Inc. 20,250
1,500 Nabors Industries, Inc.* 37,500
198,219
FINANCIAL - 9.88%
2,000 American Express Co.* 269,250
3,000 Kansas City Southern Industries, Inc. 139,313
1,500 Union Planters Corp. 61,125
2,000 UNUMProvident Corp. 58,875
1,500 Washington Mutual, Inc.* 43,875
572,438
HEALTH CARE - 4.50%
1,000 American Home Products Corp. 41,500
2,500 Merck & Company, Inc. 162,031
3,000 Quintiles Transnational Corp.* 57,094
260,625
TECHNOLOGY - 10.83%
1,500 Alcatel Alsthom ADR 41,625
1,250 Cisco Systems, Inc. 85,703
3,000 Diebold, Inc. 69,375
1,250 Intel Corp. 92,891
1,000 International Business Machines Corp. 121,375
750 Microsoft Corp.* 67,922
3,000 Scientific-Atlantic, Inc. 148,687
627,578
TRANSPORTATION & SERVICES - 4.10%
3,000 FDX Corp. 116,250
8,000 Southwest Airlines Co. 121,500
237,750
UTILITIES - 1.42%
2,000 Enron Corp. 82,500
TOTAL COMMON STOCKS 3,136,753
CONVERTIBLE PREFERRED STOCKS - 8.53%
1,600 Bethlehem Steel Corp. 53,600
1,000 Cyprus Amax Minerals Co. 48,125
2,000 Freeport-McMoran Copper & Gold, Inc. 35,250
8,200 ICO Holdings, Inc. 106,600
2,000 Kmart Financing I 95,250
4,000 Tesoro Petroleum Corp. 62,750
2,500 Texas Industries 93,125
TOTAL CONVERTIBLE PREFERRED STOCKS 494,700
FACE
AMOUNT DESCRIPTION MARKET VALUE
CORPORATE BONDS - 14.77%
$200,000 Eagle Geophysical, Inc., 10.75%, due 7-15-08 $ 37,000
175,000 Frontier Oil Corp., 9.125%, due 2-15-06 167,125
5,000 Giant Industries, Inc., 9.75%, due 11-15-03 4,937
5,000 HS Resources, Inc., 9.875%, due 12-1-03 5,063
40,000 ICO Holdings, Inc., 10.375%, due 6-1-07 34,200
100,000 Kaiser Aluminum & Chemical Corp., 12.75%, due 2-1-03
100,000
5,000 Nortek, Inc., 9.875%, due 3-1-04 4,925
130,000 Pilgrim's Pride Corp., 10.875%, due 8-1-03 131,300
75,000 Plains Resources, Inc., 10.25%, due 3-15-06 76,125
150,000 Republic Group, Inc., 9.50%, due 7-15-08 139,500
75,000 Specialty Retailers, Inc., 9.00%, due 7-15-07 44,625
105,000 United Refining Co., 10.75%, due 6-15-07 69,825
50,000 Wiser Oil Co., 9.50%, due 5-15-07 41,250
TOTAL CORPORATE BONDS 855,875
CONVERTIBLE CORPORATE BONDS - 21.05%
30,000 Allwaste, Inc., 7.25%, due 6-1-14 $ 2,400
55,000 Callon Petroleum Co., 10.25%, due 9-15-04 54,312
200,000 HMT Technology Corp., 5.75%, due 1-15-04 76,000
125,000 Hexcel Corp., 7.00%, due 8-1-03 99,688
95,000 Integrated Device Technology, Inc., 5.50%, due 6-1-02
90,369
155,000 Intevac, Inc., 6.50%, due 3-1-04 81,375
9,000 Kerr McGee Corp., 7.50%, due 5-15-14 8,741
175,000 Key Energy Group, Inc., 5.00%, due 9-15-04 122,500
150,000 Lomak Petroleum, Inc., 6.00%, due 2-1-07 93,375
100,000 Micron Technology, Inc., 7.00%, due 7-1-04 117,625
10,000 Moran Energy, Inc., 8.75%, due 1-15-08 9,725
100,000 National Semiconductor Corp., 6.50%, due 10-1-02 100,000
10,000 OHM Corp., 8.00%, due 10-1-06 9,125
50,000 Sabratek Corp., 6.00%, due 4-15-05 13,375
50,000 Southern Mineral Corp., 6.875%, due 10-1-07 17,250
150,000 Sunrise Assisted Living, Inc., 5.50%, due 6-15-02 145,500
205,000 Swift Energy Co., 6.25%, due 11-15-06 169,381
10,000 Weston (Roy F.), Inc., 7.00%, due 4-15-02 9,200
TOTAL CONVERTIBLE CORPORATE BONDS 1,219,941
TOTAL INVESTMENTS - 98.47% 5,707,269
Other assets less liabilities - 1.53% 88,820
TOTAL NET ASSETS - 100.00% $ 5,796,089
The identified cost of investments owned at
September 30, 1999, was the same for federal
income tax and book purposes.
Net unrealized depreciation for federal
income tax purposes was $533,892, which is
comprised of unrealized appreciation
of $416,094, and unrealized depreciation of
$949,986.
*Non-income producing security
See accompanying Notes to Financial
Statements.
AFBA FIVE STAR
EQUITY FUND
SCHEDULE OF INVESTMENTS
September 30, 1999 (unaudited)
SHARES COMPANY MARKET VALUE
COMMON STOCKS - 97.19%
CAPITAL GOODS - 3.60%
2,000 Lockheed Martin Corp. $ 65,375
2,400 Tyco International Ltd. 247,800
313,175
CONSUMER CYCLICAL - 14.33%
6,400 Barnes & Noble, Inc.* 166,400
5,800 Brunswick Corp. 144,275
5,500 Coachmen Industries, Inc. 84,562
10,700 CompUSA, Inc.* 65,537
6,600 Elcor Corp. 165,000
7,400 Ethan Allen Interiors, Inc. 235,413
14,800 Mirage Resorts, Inc.* 208,125
11,000 ServiceMaster Co. 176,688
1,246,000
CONSUMER STAPLES - 12.75%
8,400 Disney (Walt) Holding Co.* 217,350
5,500 McDonald's Corp. 236,500
7,600 PepsiCo, Inc. 229,900
9,600 Sara Lee Corp. 225,000
6,800 Viad Corp. 200,600
1,109,350
ENERGY - 2.78%
4,100 Royal Dutch Petroleum Co. 242,156
FINANCIAL - 16.65%
7,200 Allstate Corp. 179,550
2,700 American Express Co.* 363,488
2,500 American Financial Group, Inc.* 70,156
2,300 CIT Group, Inc. Cl. A 47,294
5,100 Fleet Financial Group, Inc. 186,788
3,500 Kansas City Southern Industries, Inc. 162,531
3,800 PNC Bank Corp. 200,212
3,600 Union Planters Corp. 146,700
3,100 UNUMProvident Corp. 91,256
1,447,975
HEALTH CARE - 10.78%
5,400 Abbott Laboratories 198,450
2,900 Johnson & Johnson* 266,437
4,000 Merck & Company, Inc. 259,250
4,900 Schering-Plough Corp. 213,763
937,900
TECHNOLOGY - 23.72%
4,900 Analog Devices* 251,125
7,500 Atmel Corp.* 253,594
7,050 Cisco Systems, Inc. 483,366
9,200 Diebold, Inc. 212,750
2,600 Hewlett-Packard Co. 239,200
4,200 Microsoft Corp.* 380,362
4,900 Scientific-Atlantic, Inc. 242,856
2,063,253
TRANSPORTATION & SERVICES - 5.74%
6,600 FDX Corp. 255,750
16,000 Southwest Airlines Co. 243,000
498,750
UTILITIES - 6.84%
9,200 Enron Corp. 379,500
2,800 GTE Corp. 215,250
594,750
TOTAL COMMON STOCKS 8,453,309
FACE
AMOUNT DESCRIPTION MARKET VALUE
REPURCHASE AGREEMENT - 2.70%
$235,000 UMB Bank, n.a., 4.70%, due 10-1-99
(Collateralized by Federal National
Mortgage Discount Notes,
due 10-5-99 with a value of $239,824) $ 235,000
TOTAL INVESTMENTS - 99.89% 8,688,309
Other assets less liabilities - 0.11% 9,651
TOTAL NET ASSETS - 100.00% $ 8,697,960
The identified cost of investments owned at
September 30, 1999, was the same for federal
income tax and book purposes.
Net unrealized appreciation for federal
income tax purposes was $753,300, which is
comprised of unrealized appreciation
of $1,534,052, and unrealized depreciation of
$780,752.
*Non-income producing security
See accompanying Notes to Financial
Statements.
AFBA FIVE STAR
HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
September 30, 1999 (unaudited)
SHARES COMPANY MARKET VALUE
CONVERTIBLE PREFERRED STOCKS - 14.14%
2,000 Bethlehem Steel Corp. $ 67,000
2,000 Cyprus Amax Minerals Co. 96,250
1,800 Freeport-McMoran Copper & Gold, Inc. 31,725
7,200 ICO Holdings, Inc. 93,600
3,000 Kmart Financing I 142,875
5,000 Tesoro Petroleum Corp. 78,438
2,500 TXI Capital Trust I 93,125
2,000 Union Pacific Capital Trust 91,250
TOTAL CONVERTIBLE PREFERRED STOCKS 694,263
FACE
AMOUNT DESCRIPTION MARKET VALUE
CORPORATE BONDS - 38.90%
$50,000 Advance Stores, Inc., 10.25%, due 4-15-08 $ 46,750
35,000 Callon Petroleum Co., 10.00%, due 12-15-01 33,862
100,000 Callon Petroleum Co., 10.125%, due 9-15-02 97,250
175,000 Eagle Geophysical, Inc., 10.75%, due 7-15-08 32,375
100,000 Fairchild Semiconductor Corp., 10.125%, due 3-15-07
98,750
200,000 Frontier Oil Corp., 9.125%, due 2-15-06 191,000
205,000 Giant Industries, Inc., 9.75%, due 11-15-03 202,438
180,000 HS Resources, Inc., 9.875%, due 12-1-03 182,250
50,000 ICO Holdings, Inc., 10.375%, due 6-1-07 42,750
125,000 Kaiser Aluminum & Chemical Corp., 12.75%, due 2-1-03
125,000
25,000 Kmart Corp., 9.35%, due 1-2-20 26,874
44,000 Kmart Corp., 9.78%, due 1-5-20 46,925
5,000 Nortek, Inc., 9.875%, due 3-1-04 4,925
220,000 Pilgrim's Pride Corp., 10.875%, due 8-1-03 222,200
150,000 Plains Resources, Inc., 10.25%, due 3-15-06 152,250
100,000 Purina Mills, Inc., 9.00%, due 3-15-10 21,500
150,000 Republic Group, Inc., 9.50%, due 7-15-08 139,500
125,000 Specialty Retailers, Inc., 9.00%, due 7-15-07 74,375
130,000 United Refining Co., 10.75%, due 6-15-07 86,450
100,000 Wiser Oil Co., 9.50%, due 5-15-07 82,500
TOTAL CORPORATE BONDS 1,909,924
CONVERTIBLE CORPORATE BONDS - 39.37%
$32,000 Allwaste, Inc., 7.25%, due 6-1-14 $ 2,560
300,000 Exide Corp., 2.90%, due 12-15-05 176,250
175,000 HMT Technology Corp., 5.75%, due 1-15-04 66,500
125,000 Hexel Corp., 7.00%, due 8-1-03 99,688
195,000 Integrated Device Technology, Inc., 5.50%, due 6-1-02
185,494
225,000 Intevac, Inc., 6.50%, due 3-1-04 118,125
67,000 Kerr McGee Corp., 7.50%, due 5-15-14 65,074
175,000 Key Energy Group, Inc., 5.00%, due 9-15-04 122,500
150,000 Lomak Petroleum, Inc., 6.00%, due 2-1-07 93,375
90,000 Micron Technology, Inc., 7.00%, due 7-1-04 105,862
210,000 Moran Energy, Inc., 8.75%, due 1-15-08 204,225
100,000 National Semiconductor Corp., 6.50%, due 10-1-02 100,000
35,000 OHM Corp., 8.00%, due 10-1-06 31,937
75,000 Sabratek Corp., 6.00%, due 4-15-05 20,062
50,000 Southern Mineral Corp., 6.875%, due 10-1-07 17,250
175,000 Sunrise Assisted Living, Inc., 5.50%, due 6-15-02 169,750
282,000 Swift Energy Co., 6.25%, due 11-15-06 233,003
110,000 VLSI Technology, Inc., 8.25%, due 10-1-05 112,200
10,000 Weston (Roy F.), Inc., 7.00%, due 4-15-02 9,200
TOTAL CONVERTIBLE CORPORATE BONDS 1,933,055
REPURCHASE AGREEMENT - 5.90%
290,000 UMB Bank, n.a., 4.70%, due 10-1-99
(Collateralized by Federal National
Mortgage Discount Notes,
due 10-5-99 with a value of $296,782) 290,000
TOTAL INVESTMENTS - 98.31% 4,827,242
Other assets less liabilities - 1.69% 82,767
TOTAL NET ASSETS - 100.00% $ 4,910,009
The identified cost of investments owned at
September 30, 1999, was the same for federal
income tax and book purposes.
Net unrealized depreciation for federal
income tax purposes was $585,674, which is
comprised of unrealized appreciation
of $61,639, and unrealized depreciation of
$647,313.
See accompanying Notes to Financial
Statements.
AFBA FIVE STAR
USA GLOBAL FUND
SCHEDULE OF INVESTMENTS
September 30, 1999 (unaudited)
SHARES COMPANY MARKET VALUE
COMMON STOCKS - 93.58%
BASIC MATERIALS - 3.97%
2,700 Praxair, Inc. $ 124,200
5,900 Sigma-Aldrich Corp. 187,325
311,525
CAPITAL GOODS - 8.71%
3,100 Allied Signal, Inc. 185,806
2,000 Applied Materials, Inc.* 155,750
3,500 Boeing Co. 149,188
4,900 Teleflex, Inc. 193,244
683,988
CONSUMER CYCLICAL - 4.22%
18,700 Interface, Inc. Cl. A 95,837
3,500 Korn/Ferry International* 80,719
4,400 Lear Corp.* 154,825
331,381
CONSUMER STAPLES - 17.24%
4,400 Bestfoods, Inc. 213,400
3,900 Coca-Cola Co. 187,444
6,200 McDonald's Corp. 266,600
2,000 Procter & Gamble Co. 187,500
11,000 Sara Lee Corp. 257,812
3,500 Wrigley, (Wm.) Jr. Co. 240,844
1,353,600
ENERGY - 4.82%
1,900 Mobil Corp. 191,425
3,000 Schlumberger Ltd. 186,938
378,363
FINANCIAL - 1.33%
2,500 AFLAC, Inc. 104,687
HEALTH CARE - 11.92%
5,600 American Home Products Corp. 232,400
3,300 Bristol Myers-Squibb Co. 222,750
2,700 Johnson & Johnson* 248,062
1,900 Quintiles Transnational Corp.* 36,159
4,500 Schering-Plough Corp. 196,313
935,684
TECHNOLOGY - 41.37%
5,100 Analog Devices, Inc.* 261,375
4,500 Applied Micro Circuits Corp. 256,500
6,100 Cisco Systems, Inc. 418,231
2,700 Dallas Semiconductor 144,281
4,300 Etec Systems, Inc.* 161,788
2,700 Hewlett-Packard Co. 248,400
23,000 HMT Technology Corp.* 80,500
3,900 Integrated Device Technology, Inc.* 72,150
3,800 Intel Corp. 282,388
16,000 Intevac, Inc.* 72,000
2,800 Microsoft Corp.* 253,575
2,500 Motorola, Inc. 220,000
12,500 National Semiconductor Corp.* 381,250
2,600 Rockwell International Corp. 136,500
5,600 Seagate Technology, Inc.* 172,550
5,400 Thermoquest Corp.* 54,675
8,600 Western Digital Corp.* 32,250
3,248,413
TOTAL COMMON STOCKS 7,347,641
FACE
AMOUNT DESCRIPTION MARKET VALUE
REPURCHASE AGREEMENT - 6.88%
$ 540,000 UMB Bank, n.a., 4.70%, due 10-1-99
(Collateralized by Federal National
Mortgage Discount Notes,
due 10-5-99 with a value of $551,595) $ 540,000
TOTAL INVESTMENTS - 100.46% 7,887,641
Other assets less liabilities - (0.46%) (36,046)
TOTAL NET ASSETS - 100.00% $ 7,851,595
The identified cost of investments owned at
September 30, 1999, was the same for federal
income tax and book purposes.
Net unrealized appreciation for federal
income tax purposes was $978,361, which is
comprised of unrealized appreciation
of $1,593,826, and unrealized depreciation of
$615,465.
*Non-income producing security
See accompanying Notes to Financial Statements.
STATEMENT OF ASSETS
AND LIABILITIES
September 30, 1999 (unaudited)
<TABLE>
<CAPTION>
BALANCED EQUITY HIGH YIELD USA GLOBAL
FUND FUND FUND FUND
</CAPTION>
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (identified cost $6,241,161,
$7,935,009, $5,412,916 and $6,909,279, respectively) $ 5,707,269 $ 8,688,309 $ 4,827,242 $ 7,887,641
Cash 28,863 - 3,781 10,085
Dividends receivable 8,731 11,034 6,988 5,105
Interest receivable 57,152 30 104,336 70
Receivable for investments sold 13,125 154,715 - -
Total assets 5,815,140 8,854,088 4,942,347 7,902,901
LIABILITIES AND NET ASSETS:
Cash overdraft - 80,793 - -
Fees payable 4,902 7,420 4,040 6,775
Payable for investments purchased 14,149 67,915 28,298 44,531
Total liabilities 19,051 156,128 32,338 51,306
NET ASSETS $ 5,796,089 $ 8,697,960 $ 4,910,009 $ 7,851,595
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 6,320,669 $ 8,362,042 $ 5,467,452 $ 7,029,374
Accumulated undistributed (over distributed)
net investment income 11,999 (3,126) 19,105 4,516
Accumulated undistributed net realized gain (loss)
on sale of investments (2,687) (414,256) 9,126 (160,656)
Net unrealized appreciation (depreciation)
in value of investments (533,892) (753,300) (585,674) 978,361
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 5,796,089 $ 8,697,960 $ 4,910,009 $ 7,851,595
Capital shares, $1.00 par value:
Authorized 10,000,000 10,000,000 10,000,000 10,000,000
Outstanding 581,104 743,765 548,972 643,890
NET ASSET VALUE PER SHARE $ 9.97 $ 11.69 $ 8.94 $ 12.19
</TABLE>
See accompanying Notes to Financial Statements.
STATEMENTS
OF OPERATIONS
Six months ended September 30, 1999 (unaudited)
<TABLE>
<CAPTION>
BALANCED EQUITY HIGH YIELD USA GLOBAL
FUND FUND FUND FUND
</CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Dividends (net of foreign taxes withheld) $ 34,628 $ 37,652 $ 26,145 $ 25,370
Interest 112,602 10,803 191,839 15,754
147,230 48,455 217,984 41,124
Expenses (Note 2):
Management fees 27,388 41,912 21,722 35,638
Registration fees and expenses 11,250 11,154 10,979 10,904
Total expenses before reimbursement 38,638 53,066 32,701 46,542
Less: expense reimbursement (8,847) (7,758) (9,171) (8,147)
Net expenses 29,791 45,308 23,530 38,395
Net investment income 117,439 3,147 194,454 2,729
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions
(excluding repurchase agreements):
Proceeds from sales of investments 1,033,906 927,094 632,286 477,973
Cost of investments sold 1,028,140 879,604 620,856 408,033
Net realized gain (loss) from
sales of investments 5,766 47,490 11,430 69,940
Gain from option contracts written - - - -
Net realized gain (loss) from
investment transactions 5,766 47,490 11,430 69,940
Unrealized appreciation (depreciation) on investments:
Beginning of period (330,992) 753,893 (453,742) 459,732
End of period (533,892) 753,300 (585,674) 978,361
Increase (decrease) in net unrealized appreciation
(depreciation) on investments (202,900) (593) (131,932) 518,629
Net gain (loss) on investments (197,134) 46,897 (120,502) 588,569
Increase (decrease) in net assets resulting
from operations $ (79,695) $ 50,044 $ 73,952 $ 591,298
</TABLE>
See accompanying Notes to Financial Statements.
STATEMENTS OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
BALANCED FUND EQUITY FUND
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPTEMBER 30, ENDED SEPTEMBER 30, ENDED
1999 MARCH 31, 1999 MARCH 31,
(unaudited) 1999 (unaudited) 1999
</CAPTION>
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 117,439 $ 190,516 $ 3,147 $ 34,57
Net realized gain (loss) from investment transactions 5,766 (7,993) 47,490 (460,819)
Net unrealized appreciation (depreciation)
of investments during the period (202,900) (409,071) (593) 497,523
Net increase (decrease) in net assets
resulting from operations (79,695) (226,548) 50,044 71,276
DISTRIBUTIONS TO SHAREHOLDERS FROM:**
Net investment income (127,035) (171,597) (13,499) (32,370)
Net realized gain from investment transactions - (9,146) - -
Total distributions to shareholders (127,035) (180,743) (13,499) (32,370)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:*
Proceeds from shares sold 1,435,352 4,673,972 1,662,268 5,048,164
Net asset value of shares issued for
reinvestment of distributions 124,735 175,665 13,419 32,141
1,560,087 4,849,637 1,675,687 5,080,305
Cost of shares repurchased (894,458) (810,261) (336,453) (1,388,846)
Net increase from capital share transactions 665,629 4,039,376 1,339,234 3,691,459
Total increase in net assets 458,899 3,632,085 1,375,779 3,730,365
NET ASSETS:
Beginning of period 5,337,190 1,705,105 7,322,181 3,591,816
End of period $ 5,796,089 $ 5,337,190 $ 8,697,960 $ 7,322,181
Undistributed net investment income at end of period $ 11,999 $ 21,595 $ (3,126) $ 7,226
*Shares issued and repurchased:
Number of shares sold 133,579 427,995 135,835 449,255
Number of shares issued for reinvestment
of distributions 11,913 17,250 1,105 2,890
145,492 445,245 136,940 452,145
Number of shares repurchased (86,699) (72,592) (27,567) (122,896)
Net increase 58,793 372,653 109,373 329,249
**Distributions to shareholders:
Income dividends per share $ .24 $ .40 $ .02 $ .06
Capital gains distribution per share $ - $ .02 $ - $ -
</TABLE>
See accompanying Notes to Financial Statements.
STATEMENTS OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
HIGH YIELD FUND USA GLOBAL FUND
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED YEAR
SEPTEMBER 30, ENDED SEPTEMBER 30, ENDED
1999 MARCH 31, 1999 MARCH 31,
(unaudited) 1999 (unaudited) 1999
</CAPTION>
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 194,454 $ 217,793 $ 2,729 $ 29,145
Net realized gain (loss) from investment transactions 11,430 (2,303) 69,940 (191,248)
Net unrealized appreciation (depreciation)
of investments during the period (131,932) (471,993) 518,629 277,431
Net increase (decrease) in net assets
resulting from operations 73,952 (256,503) 591,298 115,328
DISTRIBUTIONS TO SHAREHOLDERS FROM:**
Net investment income (191,596) (201,852) (11,334) (21,277)
Net realized gain from investment transactions - (11,115) - -
Total distributions to shareholders (191,596) (212,967) (11,334) (21,277)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:*
Proceeds from shares sold 1,342,955 3,074,965 1,607,837 3,076,895
Net asset value of shares issued for
reinvestment of distributions 187,655 205,296 11,262 21,084
1,530,610 3,280,261 1,619,099 3,097,979
Cost of shares repurchased (494,854) (214,474) (181,647) (303,021)
Net increase from capital share transactions 1,035,756 3,065,787 1,437,452 2,794,958
Total increase in net assets 918,112 2,596,317 2,017,416 2,889,009
NET ASSETS:
Beginning of period 3,991,897 1,395,580 5,834,179 2,945,170
End of period $ 4,910,009 $ 3,991,897 $ 7,851,595 $ 5,834,179
Undistributed net investment income at end of period $ 19,105 $ 16,247 $ 4,516 $ 13,121
*Shares issued and repurchased:
Number of shares sold 144,659 305,962 130,741 289,988
Number of shares issued for reinvestment
of distributions 20,603 21,917 935 1,964
165,262 327,879 131,676 291,952
Number of shares repurchased (54,047) (21,499) (15,147) (28,294)
Net increase 111,215 306,380 116,529 263,658
**Distributions to shareholders:
Income dividends per share $ .39 $ .58 $ .02 $ .05
Capital gains distribution per share $ - $ .03 $ - $ -
</TABLE>
See accompanying Notes to Financial Statements.
1. SIGNIFICANT ACCOUNTING POLICIES:
The AFBA Five Star Fund, Inc. (the Fund), a
Maryland corporation, is registered under the
Investment Company Act of 1940, as amended, as a
diversified open-end management investment company
with the following series: AFBA Five Star Balanced
Fund, AFBA Five Star Equity Fund, AFBA Five Star
High Yield Fund and AFBA Five Star USA Global
Fund. The Fund was organized on January 9, 1997
and commenced operations on June 3, 1997. The
following is a summary of significant accounting
policies consistently followed by the Fund in the
preparation of its financial statements.
A. Security Valuation - Corporate stocks, bonds
and options traded on a national securities
exchange or national market are valued at the
latest sales price thereof, or if no sale was
reported on that date, the mean between the
closing bid and asked price is used.
Securities which are traded over-the-counter are
priced at the mean between the latest bid and
asked price. Securities not currently traded are
valued at fair value as determined by the Board of
Directors. Securities with maturities of 60 days
or less when acquired or subsequently within 60
days of maturity are valued at amortized cost,
which approximates market value.
B. Federal and State Taxes - The Fund complied
with the requirements of the Internal Revenue Code
applicable to regulated investment companies and
therefore, no provision for federal or state tax
is required. As of March 31, 1999, the Equity,
High Yield and USA Global Funds had accumulated
net realized losses on sales of investments for
federal income tax purposes of $461,746, $2,303
and $160,297, respectively, which expire in 2007.
C. Options - In order to produce incremental
earnings and protect gains, the Fund may write
covered call options on portfolio securities. When
a Fund writes an option, an amount equal to the
premium received by the Fund is reflected as an
asset and an equivalent liability. The amount of
the liability is subsequently marked to market to
reflect the current market value of the option
written. If an option which a Fund has written
either expires on its stipulated expiration date,
or if a Fund enters into a closing purchase
transaction, the Fund realizes a gain (or loss if
the cost of a closing purchase transaction exceeds
the premium received when the option was written)
without regard to any unrealized gain or loss on
the underlying security, and the liability related
to such option is extinguished. If a call option
which the Fund has written is exercised, the Fund
realizes a capital gain or loss from the sale of
the underlying security and the proceeds from such
sale are increased by the premium originally
received. The primary risks associated with the
use of options are an imperfect correlation
between the change in market value of the
securities held by the Fund and the price of the
option, the possibility of an illiquid market, and
the inability of the counterparty to meet the
terms of the contract. There were no outstanding
covered call options or transactions in call
options written as of and for the period ended
September 30, 1999.
D. Expense Limitation - Jones & Babson, Inc., the
underwriter and distributor of the Fund, has
voluntarily agreed to pay certain expenses of the
Fund so that the total annual operating expenses
of a portfolio will not exceed 1.08% of its
average daily net assets. Jones & Babson, Inc. may
be reimbursed by the Fund for such expenses at a
later date if such reimbursement does not cause a
portfolio's expenses to exceed the expense
limitation percentage noted above.
E. Security Transactions and Investment Income -
Security transactions are accounted for on the
date the securities are purchased or sold.
Dividend income less foreign taxes withheld (if
any) are recorded on the ex-dividend date.
Interest income is recognized on the accrual
basis. Realized gains and losses from investment
transactions and unrealized appreciation and
depreciation of investments are reported on the
identified cost basis. Market discounts on debt
securities are amortized; premiums are not
amortized.
F. Distributions to Shareholders - Distributions
to shareholders are recorded on the ex-dividend
date. Distributions are determined in accordance
with income tax regulations, which may differ from
generally accepted accounting principles. These
differences are primarily due to differing
treatments for deferral of post October and wash
sale losses.
G. Use of Estimates - The preparation of financial
statements in conformity with generally accepted
accounting principles requires management to make
estimates and assumptions that affect the amounts
reported in the financial statements and
accompanying notes. Actual results could differ
from such estimates.
2. MANAGEMENT FEES:
Management fees are paid to AFBA Investment
Management Company at the rate of 1% per annum of
the average daily net asset values of the Fund for
services which include administration, and all
other operating expenses of the Fund except the
cost of acquiring and disposing of portfolio
securities, the taxes, if any, imposed directly on
the Fund and its shares and the cost of qualifying
the Funds' shares for sale in any jurisdiction.
3. INVESTMENT TRANSACTIONS:
Investment transactions for the period ended
September 30, 1999, (excluding maturities of short-
term commercial notes and repurchase agreements)
are as follows:
Balanced Fund
Purchases $ 2,457,730
Proceeds from sales 1,033,906
Equity Fund
Purchases $ 2,864,092
Proceeds from sales 927,094
High Yield Fund
Purchases $ 1,931,951
Proceeds from sales 632,287
USA Global Fund
Purchases $ 1,823,029
Proceeds from sales 477,973
FINANCIAL HIGHLIGHTS
Condensed data for a share of capital
stock outstanding throughout the period.
<TABLE>
<CAPTION>
BALANCED FUND
FOR THE SIX MONTH YEAR FOR THE PERIOD
PERIOD ENDED ENDED FROM JUNE 3, 1997
SEPTEMBER 30, 1999 MARCH 31, (inception)
(unaudited) 1999 TO MARCH 31, 1998
</CAPTION>
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.22 $ 11.39 $ 10.01
Income from investment operations:
Net investment income 0.22 0.42 0.25
Net gains on securities
(both realized and unrealized) (0.23) (1.17) 1.40
Total from investment operations (0.01) (0.75) 1.65
Less distributions:
Dividends from net investment income (0.24) (0.40) (0.23)
Distributions from capital gains - (0.02) (0.04)
Total distributions (0.24) (0.42) (0.27)
Net asset value, end of period $ 9.97 $ 10.22 $ 11.39
Total return* (0.20%) (6.53%) 16.64%
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 6 $ 5 $ 2
Ratio of expenses to average net assets** 1.08% 1.08% 1.08%
Ratio of net investment income to average
net assets** 4.27% 4.76% 4.06%
Ratio of expenses to average net assets
before voluntary expense reimbursement** 1.40% 1.33% 1.10%
Ratio of net investment income to average net assets
before voluntary expense reimbursement** 3.94% 4.51% 4.04%
Portfolio turnover rate 19% 53% 57%
</TABLE>
*Total return not annualized for periods less than one full year
**Annualized for periods less than one full year
<TABLE>
<CAPTION>
EQUITY FUND
FOR THE SIX MONTH YEAR FOR THE PERIOD
PERIOD ENDED ENDED FROM JUNE 3, 1997
SEPTEMBER 30, 1999 MARCH 31, (inception)
(unaudited) 1999 TO MARCH 31, 1998
</CAPTION>
<S> <C> <C> <C>
Net asset value, beginning of period $ 11.54 $ 11.77 $ 10.01
Income from investment operations:
Net investment income - 0.05 0.06
Net gains on securities
(both realized and unrealized) 0.17 (0.22) 1.81
Total from investment operations 0.17 (0.17) 1.87
Less distributions:
Dividends from net investment income (0.02) (0.06) (0.05)
Distributions from capital gains - - (0.06)
Total distributions (0.02) (0.06) (0.11)
Net asset value, end of period $ 11.69 $ 11.54 $ 11.77
Total return* 1.47% (1.43%) 18.81%
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 9 $ 7 $ 4
Ratio of expenses to average net assets** 1.08% 1.08% 1.04%
Ratio of net investment income to average
net assets** 0.08% 0.61% 0.94%
Ratio of expenses to average net assets
before voluntary expense reimbursement** 1.27% 1.23% -
Ratio of net investment income to average net assets
before voluntary expense reimbursement** (0.11%) 0.46% -
Portfolio turnover rate 11% 64% 76%
</TABLE>
*Total return not annualized for periods less than one full year
**Annualized for periods less than one full year
<TABLE>
<CAPTION>
HIGH YIELD FUND
FOR THE SIX MONTH YEAR FOR THE PERIOD
PERIOD ENDED ENDED FROM JUNE 3, 1997
SEPTEMBER 30, 1999 MARCH 31, (inception)
(unaudited) 1999 TO MARCH 31, 1998
</CAPTION>
<S> <C> <C> <C>
Net asset value, beginning of period $ 9.12 $ 10.62 $ 10.01
Income from investment operations:
Net investment income 0.41 0.60 0.34
Net gains on securities
(both realized and unrealized) (0.20) (1.49) 0.59
Total from investment operations 0.21 (0.89) 0.93
Less distributions:
Dividends from net investment income (0.39) (0.58) (0.32)
Distributions from capital gains - (0.03) -
Total distributions (0.39) (0.61) (0.32)
Net asset value, end of period $ 8.94 $ 9.12 $ 10.62
Total return* 2.26% (8.45%) 9.37%
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 5 $ 4 $ 1
Ratio of expenses to average net assets** 1.08% 1.08% 1.08%
Ratio of net investment income to average
net assets** 8.94% 7.47% 5.51%
Ratio of expenses to average net assets
before voluntary expense reimbursement** 1.50% 1.46% 1.11%
Ratio of net investment income to average net assets
before voluntary expense reimbursement** 8.52% 7.09% 5.48%
Portfolio turnover rate 15% 11% 31%
</TABLE>
*Total return not annualized for periods less than one full year
**Annualized for periods less than one full year
<TABLE>
<CAPTION>
GLOBAL FUND
FOR THE SIX MONTH YEAR FOR THE PERIOD
PERIOD ENDED ENDED FROM JUNE 3, 1997
SEPTEMBER 30, 1999 MARCH 31, (inception)
(unaudited) 1999 TO MARCH 31, 1998
</CAPTION>
<S> <C> <C> <C>
Net asset value, beginning of period $ 11.06 $ 11.17 $ 10.01
Income from investment operations:
Net investment income 0.02 0.05 0.07
Net gains on securities
(both realized and unrealized) 1.13 (0.11) 1.14
Total from investment operations 1.15 (0.06) 1.21
Less distributions:
Dividends from net investment income (0.02) (0.05) (0.05)
Distributions from capital gains - - -
Total distributions (0.02) (0.05) (0.05)
Net asset value, end of period $ 12.19 $ 11.06 $ 11.17
Total return* 10.40% (0.52%) 12.16%
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 8 $ 6 $ 3
Ratio of expenses to average net assets** 1.08% 1.08% 1.04%
Ratio of net investment income to average
net assets** 0.08% 0.67% 1.07%
Ratio of expenses to average net assets
before voluntary expense reimbursement** 1.30% 1.30% -
Ratio of net investment income to average net assets
before voluntary expense reimbursement** (0.15%) 0.45% -
Portfolio turnover rate 7% 19% 42%
</TABLE>
*Total return not annualized for periods less than one full year
**Annualized for periods less than one full year
This report has been prepared for the
information of the Shareholders of the AFBA
Five Star Fund, and is not to be construed as
an offering of the shares of the Fund. Shares
of the Fund are offered only by the
Prospectus, a copy of which may be obtained
by calling the Fund at
1-800-243-9865.
Distributors: Jones & Babson, Inc., Kansas City, Missouri
AFBA Five Star Fund
AFBA Five Star Balanced Fund
AFBA Five Star Equity Fund
AFBA Five Star High Yield Fund
AFBA Five Star USA Global Fund
AFBA
Five Star
FundSM
AFBA Investment Management Company
909 N. Washington Street
Alexandria, Virginia 22314
1-800-243-9865
www.afba.com
Shareholder Inquiries 1-888-578-2733
JB17E-1 (11/99) 510747
