Table of Contents
Page
Letter to Shareholders 3
Fund Performance Reviews
Bond Fund 4
Balanced Fund 6
High Income Fund 8
Growth and Income Fund 10
Capital Appreciation Fund 12
Emerging Growth Fund 14
International Stock Fund 16
Family of Investments 18
Portfolios of Investments
Cash Reserves Fund 20
Bond Fund 21
Balanced Fund 23
High Income Fund 26
Growth and Income Fund 33
Capital Appreciation Fund 34
Emerging Growth Fund 35
International Stock Fund 37
Financial Statements
Statements of Assets & Liabilities 42
Statements of Operations 44
Statements of Changes in Net Assets 46
Financial Highlights 50
Notes to Financial Statements 54
<PAGE>
Letter to Shareholders
Dear Fellow Shareholder,
The six months ended April 30, 2000 saw stock market volatility increase to
record levels. Investors were further challenged by extreme sector rotation as
various market sectors took turns leading the way, then falling away.
Throughout this period, the Federal Reserve Board was gradually increasing its
upward pressure on general interest rate levels through repeated verbal warnings
as well as intermittent actual increases in the Federal Funds rate. But to date,
the economy has maintained its very strong and broad economic advance in spite
of these Fed attempts to temper growth and thereby curtail potential
inflationary pressures.
The increased stock market volatility and accelerating sector rotation, however,
signal growing uneasiness with the near-term economic outlook. Investors are
beginning to recognize that rising interest rates must eventually impact both
consumers and businesses. Even the Internet stock speculators are starting to
acknowledge that stocks of companies with a seemingly good idea but no earnings
may not be worth double digit multiples of revenues, especially in a rising
interest rate environment. As a result, most sectors of the stock market peaked
in March and declined, some quite sharply at times, through April.
This six-month period of wide swings in market direction provided many
opportunities for the MEMBERS Mutual Funds to illustrate their ability to
participate in favorable markets, and to provide some downside protection in
falling markets. As discussed in the following pages, all of the domestic funds
outperformed their representative market or peer group indexes over this
six-month period. In most cases, this performance edge was achieved primarily by
not losing as much of previous gains during market declines.
This relative stability in difficult markets is a hallmark of our investment
management style and philosophy. We manage all of the core portfolio funds (Cash
Reserves, Bond, Balanced, Growth and Income, and Capital Appreciation) with the
dual objectives of competitive returns and moderated risk. This dual emphasis
cannot eliminate the chances of significant declines in the funds' share values.
It does, however, usually moderate the fluctuations, making it less difficult
(though it's never easy!) for investors to start, and to stay with, their
long-term, systematic investment accumulation programs in spite of the
always-challenging investment markets. As a result, we expect our investors to
realize greater long-term success with their investment programs than those
investors who are attempting to invest "at just the right times" in more
volatile funds.
We expect continued Fed-induced increases in interest rates in the months ahead.
This should continue to put near-term pressure on both bonds and stocks.
However, most international economies continue to recover, and the underlying
economic foundation in the U.S. remains very sound. The Fed's goal is to temper
the rate of U.S. economic growth, not reverse it.
We believe this careful balance can be achieved, and that our investment markets
will resume their advance once attainment of this objective is more visible. If
so, the next few months could be a very favorable time to be adding to long-term
investment portfolios, and funds managed with an eye on risk should be the ideal
investment vehicles.
All of us at CIMCO thank you for your continued confidence in the MEMBERS Mutual
Funds.
Sincerely,
/s/ Lawrence R. Halverson
Lawrence R. Halverson, CFA
President
Fund Performance Review
MEMBERS Bond Fund
Bonds fared relatively poorly during the six month period ended April 30, 2000
as the yield curve became inverted. Rates on 90-day U.S. Treasury Bills rose
from 4.38% to 5.40% during the period, pressured by increases in short-term
interest rates by the Federal Reserve Board. Yields on the 10-year Treasury Bond
moved from 6.02% to 6.21% while rates on 30-year Treasury Bonds actually
declined from 6.16% to 5.96%. Long government bonds were by far the best
performing segment during the six month period, as reflected by the 4.54% return
of the Lehman Long Government Bond Index.
The MEMBERS Bond Fund provided a total return of 1.04% (Class A Shares at net
asset value) for the six month period ended April 30, 2000. This compares to a
return of 1.07% for the Lehman Brothers Intermediate Government/Corporate Bond
Index over the same period. The slight shortfall relative to this index is the
result of being somewhat under-weighted in long-dated treasuries versus the
index. The Bond Fund was structured to modestly outperform in a rising rate
environment, risking that performance might lag somewhat in a falling rate
environment. This being the case, the Fund performed reasonably well given the
significant inversion that occurred. Fund results were slightly ahead of the
Lipper Intermediate Investment Grade Bond Index, which returned 0.99% during the
period.
While the yield curve has inverted in the past, it has not occurred since 1994
and is a phenomenon that is typically associated with periods of economic
weakness. Never has there been an inverted yield curve with economic growth
above 5%, as it is today. The drop in rates at the long end of the yield curve
is primarily attributable to a supply/demand imbalance rather than a declining
economy. With available funds from the budget surplus, the United States
Treasury Department has been buying back 30-year bonds in the open market,
creating a lack of supply of long-term issues. As this has occurred, the demand
for high quality investments has increased and the result has been the inversion
in the U.S. Treasury yield curve.
Yields on corporate bonds have increased during the period, and the sector's
yield curve has remained fairly steep. We believe that this has created a very
compelling opportunity for investment-grade corporate bonds as an asset class as
yields are now above 8%. During the first few months of 2000, we increased our
allocation to corporate bonds to take advantage of these attractive yields.
As of April 30, 2000, the Fund held 44 securities that are well diversified
across the major sectors of the bond market. The portfolio currently has an
average maturity of 7.28 years and an average quality of AA. We continue to
employ an aggressive management style that entails active trading in an attempt
to capitalize on the unique and constantly changing pressures and resulting
imbalances in the bond market. Our goal is to deliver better total returns than
a more passive approach, but without significantly increasing our share price
volatility.
Going forward, we expect bond funds to perform very well after the current round
of Fed tightening. The Federal Reserve is on a mission to slow the economy to
relieve "imbalances" occurring with supply and demand. We believe that once this
slowdown is evident, the bond market will become a more attractive asset class
to investors who have stayed away due to the low nominal yields that were
offered in the past, and the unusually high equity returns. This performance is
unlikely to be achieved without a high degree of volatility, however, as has
been the case with the equity market. We are uncertain about how far rates must
rise to slow an economy that is experiencing such momentum, but we do believe
that yields only modestly above current levels on investment grade corporate
bonds will look very attractive to investors, particularly if the equity market
begins to discount an economic slowdown.
CIMCO Bond Portfolio Management Team -- Advisor
<PAGE>
Fund Performance Review
Bond Fund Diversification
of Investments Among Market Sectors
At this place, the shareholder report contains a pie chart showing the
following: Cash & Other Assets 9%, U.S. Government and Agency Obligations 41%,
Corporate Notes and Bonds 50%.
Bond Fund Annualized Performance
of $10,000 Since Inception
At this place, the shareholder report shows a line chart which shows the
following:
Class A Shares.......................................................$10,422
Class B Shares.......................................................$10,372
Lehman Brothers Intermediate Government/Corporate Bond Index.........$11,042
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the index on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Prospectus
and elsewhere in this report. Past performance is not indicative of future
performance. Indices are unmanaged and investors cannot invest in them.
Additionally, the Lehman index return does not reflect expenses or sales
charges.
<TABLE>
<CAPTION>
MEMBERS Bond Fund Average Annual Total Return
% Return Without Sales Charge % Return After Sales Charge***
12 Months Ended Since Inception 12 Months Ended Since Inception
04/30/00 to 04/30/00+ 04/30/00 to 04/30/00+
<S> <C> <C> <C> <C>
Class A Shares* 1.17% 3.72% -3.18% 1.79%
Class B Shares** 0.41 2.96 -3.88 1.58
Lipper Intermediate Investment Grade Bond Fund Index 0.41 3.49 -- --
Lehman Brothers Intermediate Government/Corporate Bond Index 1.52 4.34 -- --
<FN>
* Maximum Sales Charge is 4.3% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares.
*** Assuming Maximum Sales Charge
+ Funds commenced operations on December 29, 1997.
</FN>
</TABLE>
<PAGE>
Fund Performance Review
MEMBERS Balanced Fund
During the six months ended April 30, 2000, the U.S. stock market, as measured
by the S&P 500, returned 7.21%. Removing just seven large, high performing
stocks from the index would have reduced this gain to zero. For some time,
returns of capitalization-weighted indexes such as the S&P 500 have been driven
by a narrow group of stocks. Market breadth, however, has shown an improvement
during recent months as evidenced by the recent out-performance of small- and
medium-capitalization stocks relative to large-capitalization issues.
Bonds fared relatively poorly during the period as interest rates generally rose
and put downward pressure on bonds. The interest rate on 90-day U.S. Treasury
Bills rose from 4.38% to 5.40%, while the 10-year Treasury Bond yield moved from
6.02% to 6.21%. The yield on 30-year Treasury Bonds actually declined from 6.16%
to 5.96%, due in part to the Treasury retiring some of these bonds. This
resulted in an inversion of the yield curve. The Lehman Brothers Intermediate
Government/Corporate Bond Index, a broad representation of investment grade
bonds with maturity dates averaging four-to-five years, provided a total return
of 1.07% during the six month period. Money market yields rose along with
interest rates. On average, money market investments provided returns of about
2.55%, close to the 2.65% earned by 90-day U.S. Treasury Bills.
MEMBERS Balanced Fund provided a return of 6.72% (Class A Shares at net asset
value). This exceeded the 5.20% return of the Lipper Balanced Fund Index over
the same time frame despite the fact that most balanced funds take a more
aggressive posture than the MEMBERS Balanced Fund in constructing their mix of
stocks, bonds, and money market instruments. The Balanced Fund return was also
higher than the 4.07% gain realized from a hypothetical portfolio consisting of
45% S&P 500 index, 40% Lehman Brothers Intermediate Government/Corporate Bond
Index and 15% 90-day U.S. Treasury Bills.
The stocks and bonds owned in MEMBERS Balanced Fund are largely the same as the
securities comprising MEMBERS Capital Appreciation, Growth and Income and Bond
Funds. Please see the Fund Performance Reviews of those funds elsewhere in this
report for a more complete description of the Balanced Fund's portfolio
positioning and results.
Looking ahead, the Fund will continue to be managed as a diversified portfolio
of the most attractive stocks, bonds and money market investments identified by
the CIMCO manage-ment teams. The normal range of asset allocation exposures is
from 40% to 60% stocks, 40% to 60% bonds, and up to 20% money market
instruments. Currently, stocks comprise nearly 55% of net assets and bonds 40%
of net assets, with the remaining approximately 5% invested in money market
instruments.
These proportions vary over time in reaction to the pace at which the management
teams are finding attractive individual stocks and bonds. For example, as
attractively priced stocks become more plentiful, the stock portion of the
portfolio will grow, and vice versa. The management teams use this "bottom up"
asset allocation approach instead of the more commonly used "top down" asset
allocation tactics because we have observed that such market-timing tactics,
over the long term, are rarely successful.
The Balanced Fund, through its diversification and flexibility, may be the most
"investment efficient" of all the MEMBERS Mutual Funds. It is specifically
designed to help investors harvest broad market returns within long-term
investment programs, and most importantly, to manage their way through difficult
markets with the help of the risk reduction effects of its broad
diversification.
CIMCO Stock Portfolio Management Team -- Advisor
CIMCO Bond Portfolio Management Team -- Advisor
<PAGE>
Fund Performance Review
Balanced Fund Diversification
of Investments Among Market Sectors
At this place, the shareholder report contains a pie chart showing the
following: Common Stock 54%, U.S. Government Obligations 17%, Corporate Notes &
Bonds 22% and Cash and Other Assets 7%.
Balanced Fund Annualized Performance
of $10,000 Since Inception
At this place, the shareholder report shows a line chart which shows the
following:
Class A Shares.....................................................$12,712
Class B Shares.....................................................$12,852
Blended Synthetic Index............................................$12,724
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the index on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Prospectus
and elsewhere in this report. Past performance is not indicative of future
performance. Indices are unmanaged and investors cannot invest in them.
Additionally, the Blended index return does not reflect expenses or sales
charges.
<TABLE>
<CAPTION>
MEMBERS Balanced Fund Average Annual Total Return
% Return Without Sales Charge % Return After Sales Charge***
12 Months Ended Since Inception 12 Months Ended Since Inception
04/30/00 to 04/30/00+ 04/30/00 to 04/30/00+
<S> <C> <C> <C> <C>
Class A Shares* 7.81% 13.45% 2.14% 10.83%
Class B Shares** 7.00 12.64 2.50 11.35
Lipper Balanced Fund Index 4.99 11.26 -- --
Blended Synthetic Index 6.18 10.87 -- --
<FN>
* Maximum Sales Charge is 5.3% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares.
*** Assuming Maximum Sales Charge
+ Funds commenced operations on December 29, 1997.
</FN>
</TABLE>
<PAGE>
Fund Performance Review
MEMBERS High Income Fund
High yield bond markets were particularly challenging during the six months
ended April 30, 2000. Problems were especially evident during the first three
months of calendar year 2000 as high yield securities under-performed all other
major fixed income asset classes. The poor performance was mainly due to high
yield mutual funds experiencing nearly $3 billion in redemptions during the
first quarter of the new year. The outflows were primarily the result of
investors' liquidity concerns that were driven by rising short-term interest
rates and the resulting impact on credit quality in the high yield market. Also,
the U.S. Treasury yield curve became dramatically inverted during the period.
This inverted shape - a phenomenon not seen since 1994 - was driven by a
combination of inflation concerns and expected supply/demand imbalances.
Inversions of this nature are usually only witnessed during periods of economic
weakness. The front-end of the yield curve was under extreme pressure from
increases in short-term interest rates by the Federal Reserve Board, while the
long-end of the yield curve experienced a price rally after the announcement of
Treasury buybacks and the increased demand for high quality investments. As
such, most analysts attribute the current inversion to lack of supply of
long-term issues, not a declining economy.
Despite this difficult environment, the MEMBERS High Income Fund (Class A Shares
at net asset value) returned 2.45%, outperforming the 0.08% return of the Lehman
Brothers High Yield Index by 237 basis points. Strong relative performance was
primarily the result of good credit selection and overweight positions in
telecommunications and media sectors. Under-weighting health care and general
industrial sectors also contributed to the out-performance.
Although the telecommunications sector did not perform as well as it has in past
periods, it was still the top performing sector in the high yield market for
this period. Nextlink, one of the Fund's top performing holdings for the period,
financed its expansion into fiber-optic networks with high yield bonds. The
firm's stock price has risen substantially in response to strong growth, and the
price of its bonds were bid up significantly as well. We believe that future
prospects remain favorable for Nextlink as the company enters new markets and
gains a larger share of existing markets. The Fund continues to emphasize media
and cable holdings as we expect those companies to continue to outperform as
demand for voice and data transmission increases. Charter Communications, led by
Microsoft co-founder Paul Allen, continues to generate double-digit cash flow
growth and is among the industry leaders in subscriber growth. The company's
growth is the result of successful roll-outs of new products and services such
as digital video and high-speed Internet offerings.
Looking forward, we will continue to focus on bottom up research as the most
reliable means of identifying securities with yields that compensate for
associated credit risk. The U.S. interest rate backdrop has been most difficult
in recent months, and it is unlikely that volatility in the high yield market
will end any time soon.
CIMCO Bond Portfolio Management Team -- Advisor
Massachusetts Financial Services Company -- Subadvisor
<PAGE>
Fund Performance Review
High Income Fund Diversification
of Investments Among Market Sectors
At this place, the shareholder report contains a pie chart showing the
following: Cash and Other Assets 9%, Telecommunications 23%, Communications 16%,
Technology 6%, Finance 6%, Recreation 5% and Other Sectors 35%.
High Income Fund Annualized Performance
of $10,000 Since Inception
At this place, the shareholder report shows a line chart which shows the
following:
Class A Shares.......................................................$10,133
Class B Shares.......................................................$10,114
Lehman Brothers High Yield Bond Index................................$10,223
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the index on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Prospectus
and elsewhere in this report. Past performance is not indicative of future
performance. Indices are unmanaged and investors cannot invest in them.
Additionally, the Lehman index return does not reflect expenses or sales
charges.
<TABLE>
<CAPTION>
MEMBERS High Income Fund Average Annual Total Return
% Return Without Sales Charge % Return After Sales Charge***
12 Months Ended Since Inception 12 Months Ended Since Inception
04/30/00 to 04/30/00+ 04/30/00 to 04/30/00+
<S> <C> <C> <C> <C>
Class A Shares* -0.84% 2.48% -5.08% 0.57%
Class B Shares** -1.42 1.78 -5.50 0.49
Lipper High Yield Bond Index -2.94 1.21 -- --
Lehman Brothers High Yield Bond Index -3.52 0.95 -- --
<FN>
* Maximum Sales Charge is 4.3% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares.
*** Assuming Maximum Sales Charge
+ Funds commenced operations on December 29, 1997.
</FN>
</TABLE>
<PAGE>
Fund Performance Review
MEMBERS Growth and Income Fund
The U.S. equity market experienced a notable increase in volatility during the
six months ended April 30, 2000, with the major market indexes posting some of
the largest point gains and losses in history. While the S&P 500 gained 7.21%
during the period, the index essentially generated this return during the last
two months of 1999 while remaining in a volatile trading range during the first
four months of calendar year 2000. Technology and communication services stocks,
which had been leading the market averages higher, began to break down starting
in mid-March as concerns over valuation levels began to intensify. From its
March 10th peak through the end of April, the tech-heavy NASDAQ Composite Index
posted a decline of 23.5%. As this has occurred, it has been difficult for more
reasonably valued equities to move meaningfully higher, leaving the broad market
in a volatile trading range.
The MEMBERS Growth and Income Fund returned 8.08% (Class A Shares at net asset
value) during the six month period ended April 30, 2000, exceeding both the S&P
500 and the Lipper Large-Cap Value Index. As we have noted in the past, the S&P
500 return in recent years has been heavily skewed toward a very narrow group of
large-capitalization growth stocks. Since mid-March, we have begun to see a
broadening of this performance to include many more stocks. In addition, the
valuation divergence between the narrow group of stocks which had been leading
the averages higher and the rest of the market has begun to narrow. The
continuation of these trends would create a more favorable investment
environment for value-oriented funds relative to the S&P 500. During the six
month period, value-oriented funds lagged the S&P 500 as the Lipper Large-Cap
Value Index returned 2.44%. The MEMBERS Growth and Income Fund, however,
outpaced this peer group index by 564 basis points.
The out-performance of the MEMBERS Growth and Income Fund relative to the S&P
500 is primarily attributable to the strong relative performance exhibited by
the technology and consumer staples sectors. The Fund's technology sector
continued to generate strong results with holdings such as EMC Corp,
Hewlett-Packard, Texas Instruments and Nortel Networks advancing sharply, each
gaining over 80% during the six-month period. While these stocks generated
powerful moves during the market's euphoric phase for technology issues,
importantly, they in aggregate have also out-performed the sector during the
recent pull-back. In the consumer staples sector, Disney, the largest holding
within the sector, advanced over 63% during the reporting period.
Fund results were negatively impacted by modest relative sector
under-performance in the healthcare, transportation and diversified sectors. In
the healthcare sector, Bristol-Myers Squibb declined as a key new pharmaceutical
product was delayed. The transportation and diversified sectors posted
lackluster performance as holdings in those sectors failed to keep pace with the
returns generated by their corresponding S&P sectors.
We are presently over-weighted in the consumer staples, energy and technology
sectors while being under-weighted in the consumer cyclical, capital goods,
communication services and finance sectors. All other sectors approximate
benchmark weights. While our sector weightings are determined by the number of
attractive stocks that we identify through bottom-up fundamental analysis, the
degree to which sectors are over-weighted or under-weighted is generally limited
in the MEMBERS Growth and Income Fund to a range of one-half to one-and-one-half
times the benchmark index weight as a risk reduction technique.
We have stated for some time our belief that, in order for the overall equity
market to move meaningfully higher, we would need to see a broadening of market
leadership. While these rotations can be unnerving at times, we believe that a
more favorable investment foundation is being established. As the market
broadens, we believe that funds which are more broadly diversified, such as the
MEMBERS Growth & Income Fund, will be well-positioned. Volatility will likely
remain high and has the potential to be unsettling. The need to maintain
investment discipline during these volatile times is critical as we continue to
believe that stock market returns will prove to be rewarding over the long term.
CIMCO Stock Portfolio Management Team -- Advisor
<PAGE>
Fund Performance Review
Growth and Income Fund Diversification
of Investments Among Market Sectors
At this place, the shareholder report contains a pie chart showing the
following: Cash and Other Assets 4%, Financial Services 11%, Technology 31%,
Consumer Staples 15%, Communication Services 6%, Healthcare 9%, Energy 7%,
Capital Goods 6% and Other Sectors 11%.
Growth and Income Fund Annualized Performance
of $10,000 Since Inception
At this place, the shareholder report shows a line chart which shows the
following:
Class A Shares....................................................$13,719
Class B Shares....................................................$13,893
S&P 500 Index.....................................................$15,725
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the index on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Prospectus
and elsewhere in this report. Past performance is not indicative of future
performance. Indices are unmanaged and investors cannot invest in them.
Additionally, the S&P index return does not reflect expenses or sales charges.
<TABLE>
<CAPTION>
Members Growth and Income Fund Average Annual Total Return
% Return Without Sales Charge % Return After Sales Charge***
12 Months Ended Since Inception 12 Months Ended Since Inception
04/30/00 to 04/30/00+ 04/30/00 to 04/30/00+
<S> <C> <C> <C> <C>
Class A Shares* 5.76% 17.21% 0.14% 14.51%
Class B Shares** 5.02 16.36 0.52 15.13
Lipper Large-Cap Value Index 1.22 12.63 -- --
S&P 500 Index 10.15 21.40 -- --
<FN>
* Maximum Sales Charge is 5.3% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares.
*** Assuming Maximum Sales Charge
+ Funds commenced operations on December 29, 1997.
</FN>
</TABLE>
<PAGE>
Fund Performance Review
MEMBERS Capital Appreciation Fund
The market provided more high drama during the six month period ended April 30,
2000. Volatility stole the show as intra-day moves of more than three percentage
points in the NASDAQ Composite Index became the rule rather than the exception.
Most domestic stock indexes posted impressive gains during the period, and
small- and mid-capitalization stocks significantly outperformed their larger-cap
brethren. Returns of 21.22% and 18.72% by the S&P 400 MidCap Index and the
Russell 2000 Small Cap Index upstaged the 7.21% return of the S&P 500 Index, as
well as the 8.37% gain for the S&P 1500 Super Composite Index.
The MEMBERS Capital Appreciation Fund, with its mid- to large-capitalization
orientation, returned 12.66% (Class A Shares at net asset value) during the six
month period. This outperformed the S&P Super Composite Index (an index
comprised of large, mid, and small capitalization stocks), but lagged the 14.65%
for similar mutual funds as measured by Lipper Analytical Services' Multi-Cap
Core Index.
Fund performance was driven by stocks in the technology, healthcare and energy
sectors which outperformed the overall market and the corresponding S&P sector
return. Notable contributors to results include technology holdings such as ADC
Telecom, Micron Technology, EMC Corp. and Texas Instruments. In healthcare, Elan
Corp. and Pharmacia outperformed while Weatherford International led the energy
sector. Other strong performers during the period include Primedia Inc., a
consumer cyclical holding, and Telmex, a communications services sector holding.
The capital goods and finance sectors were the weakest performing sectors during
the period. The capital goods sector return was depressed by the poor
performance in Owens-Illinois, a position which was eliminated during the period
due to difficult industry conditions. Finance sector results lagged as shares of
Associates First Capital and First Security Corp. underperformed.
We enter the second half of the fiscal year with modestly over-weighted
positions relative to the S&P 1500 Super Composite Index in the consumer
cyclical, basic materials and technology sectors. Our analysis of company
fundamentals lead us to believe that stocks in these sectors offer the most
favorable risk/return profile. We are currently underweight the capital goods,
finance and healthcare sectors as we believe that the current valuations of
these stocks adequately reflect their outlook. Our sector weights reflect the
areas where we are finding stocks with the strongest fundamentals and
attractiveness, not general assessments of the sectors or the overall economy.
While the Fund's sector exposures may deviate from the index weights, the Fund
remains well diversified at all times.
The Federal Reserve has begun to tighten monetary policy in an effort to control
inflationary influences and slow the economy to a more sustainable growth rate.
While the slowing effects of the rate hikes will not be felt for several months,
a more immediate impact was the sudden cooling off of several highly valued
technology industries. A rotation out of "new era" technology and biotech
companies became evident toward the end of March as investors began to reassess
the merits and fundamentals of these companies now that the economic playing
field has changed. Market breadth has also improved as investors have
rediscovered value in the small- and mid-cap names that have been overlooked
during the last several quarters. A sustained recovery in small- and mid-cap
stocks will benefit the Capital Appreciation Fund with its investment profile
across all capitalization sectors.
Although the U.S. economy is currently growing at an unsustainable pace, the
core fundamentals of the economy remain healthy and conducive to strong company
performance. The speculation regarding the timing and magnitude of Federal
Reserve-led rate increases have unsettled the market, generating significant
volatility. The market will likely remain turbulent for the duration of the
Federal Reserve's tightened monetary policy. Investors should continue to focus
on their long-term investment accumulation programs and not try to "time" the
market volatility. We continue to believe that long-term investors will be
rewarded by accumulating a diversified portfolio of quality, reasonably priced
securities like those we seek to provide in MEMBERS Capital Appreciation Fund.
CIMCO Stock Portfolio Management Team -- Advisor
<PAGE>
Fund Performance Review
Capital Appreciation Fund Diversification
of Investments Among Market Sectors
At this place, the shareholder report contains a pie chart showing the
following: Consumer Staples 8%, Technology 30%, Financial Services 11%, Consumer
Cyclicals 11%, Energy 6%, Healthcare 9%, Other Sections 8%, Cash and Other
Assets 5%, Communication Services 6% and Capital Goods 6%.
Capital Appreciation Fund Annualized Performance
of $10,000 Since Inception
At this place, the shareholder report shows a line chart which shows the
following:
Class A Shares......................................................$14,654
Class B Shares......................................................$14,870
S&P 1500 Super Composite Index......................................$15,481
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the index on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Prospectus
and elsewhere in this report. Past performance is not indicative of future
performance. Indices are unmanaged and investors cannot invest in them.
Additionally, the S&P index return does not reflect expenses or sales charges.
<TABLE>
<CAPTION>
MEMBERS Capital Appreciation Fund Average Annual Total Return
% Return Without Sales Charge % Return After Sales Charge***
12 Months Ended Since Inception 12 Months Ended Since Inception
04/30/00 to 04/30/00+ 04/30/00 to 04/30/00+
<S> <C> <C> <C> <C>
Class A Shares* 16.14% 20.57% 10.01% 17.79%
Class B Shares** 15.28 19.71 10.78 18.53
Lipper Multi-Cap Core Index 17.08 19.45 -- --
S&P1500 Super Composite Index 11.28 20.59 -- --
<FN>
* Maximum Sales Charge is 5.3% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares.
*** Assuming Maximum Sales Charge
+ Funds commenced operations on December 29, 1997.
</FN>
</TABLE>
<PAGE>
Fund Performance Review
MEMBERS Emerging Growth Fund
The MEMBERS Emerging Growth Fund was added to the fund family on February 29,
2000. During the period from the Fund's inception through April 30, 2000, the
Fund experienced the same high level of volatility associated with the
technology stock-heavy NASDAQ Composite Index. In months leading up to the
Fund's inception, technology stocks were market leaders, nearly to the exclusion
of all other sectors. This significant out-performance also registered in the
form of high valuations for many technology stocks relative to other industries
and groups. These higher valuations, along with rising interest rates and
structural changes in the economy, set the stage for the aforementioned
volatility.
During the period from inception through April 30, 2000, the NASDAQ Composite
Index returned -15.65% while the Fund fell -14.20% (Class A Shares at net asset
value). Both of these declines are primarily attributable to heavy exposure in
technology and communication services issues during the recent period of
weakness for these sectors. Small capitalization stocks also fell under
pressure, declining -9.05% during this period, after having experienced a
resurgence during the last two months of 1999 and the first two months of 2000.
More broadly diversified indexes posted positive returns during this period. The
S&P 500 gained 6.48% from inception through April 30, 2000, outperforming the
Fund due largely to its lower weightings in technology stocks and
larger-capitalization issues.
Major positions in Oracle Inc. and Cisco Systems had a positive impact on
performance during the reporting period, despite the difficult environment for
technology issues. Oracle, the world's largest database software maker, rose due
to strong earnings and sales outlooks. Cisco Systems, the world's largest maker
of Internet equipment, rose on news of sales growth and the announcement of
several strategic acquisitions and new business alliances. Holdings in Microsoft
and Qualcomm - two of last year's best performers - caused a drag on performance
during the period. After surging 16-fold in 1999, and leading the charge at the
outset of 2000, shares of Qualcomm tumbled after reporting chip and cell phone
shipments would likely fall in the first quarter. Microsoft's stock price
suffered due to uncertainties surrounding the Justice Department's anti-trust
suit against the firm and slowing demand for personal computers.
The Fund continues to emphasize technology and communication services issues due
to the long-term growth prospects for companies in these areas. Companies in
lower growth sectors such as consumer staples, basic materials and financial
services are being de-emphasized, and, as such, the Fund is under-weighted in
those areas.
Going forward, changes in the structure of the economy will probably extend the
current "new versus old economy" discussion among investors for many more
months. Technology stocks have been beneficiaries of increased investor
awareness of the shift from an industrial to an information-based economy.
However, many technology stocks are expensive from a valuation perspective,
increasing their exposure to changes in investor sentiment. As such, these
stocks will probably continue to experience high levels of volatility in
response to economic news and other industry events such as the potential
breakup of Microsoft. It is unlikely that the MEMBERS Emerging Growth Fund will
be immune to such shifts in the investment landscape. Investors who own the
Fund, or are considering adding the Fund to an existing portfolio, should be
aware of this risk exposure and its potential to produce strong long-term
returns.
CIMCO Stock Portfolio Management Team - Advisor
Massachusetts Financial Services Company -- Subadvisor
<PAGE>
Fund Performance Review
Emerging Growth Fund Diversification
of Investments Among Market Sectors
At this place, the shareholder report contains a pie chart showing the
following:
Emerging Growth Fund Annualized Performance
of $10,000 Since Inception
At this place, the shareholder report shows a line chart which shows the
following: Technology 15%, Consumer Cyclicals 6%, Other Sections 19%, Cash and
Other Assets 15% and Communication Services 15%.
MEMBERS Emerging Growth is a new fund, therefore, it does not have historical
investment performance.
In the future, the performance will be shown in this report along with the other
funds.
<PAGE>
Fund Performance Review
MEMBERS International Stock Fund
International stock markets ended 1999 on a high note, finishing a great year
for international equity investors. However, much of the fanfare has since
subsided as international stocks posted only modestly positive gains during the
first four months of 2000. World economies have experienced strong-to-moderate
recoveries with very few countries not participating in the current global
expansion. The euro continued to fall in value relative to the dollar, causing
currency drag on U.S. investors' holdings from European nations. Stocks of
technology, media and telecommunications companies around the world experienced
strong rallies during the period, but some of their gains were diminished by
profit taking toward the end of March.
Overall, the dominant theme in late 1999 and early 2000 was greater than
expected economic growth and a perceived threat of inflation. Rapidly rising oil
prices also shocked investors into analyzing, and possibly over-analyzing,
global price levels. Like in the U.S., some central banks in other
industrialized nations and the European Union raised short-term interest rates
in an effort to thwart potential inflationary pressures.
During the six-month period ended April 30, 2000, the MEMBERS International
Stock Fund posted a total return of -3.78% (Class A Shares at net asset value).
The Morgan Stanley Europe, Australasia, and Far East (EAFE) Index gained 6.84%.
Less industrialized nations also experienced positive results with the Morgan
Stanley Emerging Market Free Index rising 13.88% during the period. Smaller
company stocks, while beginning to show some signs of life, failed to keep pace
with their larger-capitalization counterparts during the period. More modest
positive local market returns were pushed into negative territory by currency
translation effects. The Morgan Stanley Small-Cap EAFE Index posted a decline of
-1.46% during the six month period. Growth-oriented stocks continued their
dominance, although evidence of a style rotation away from these stocks was
noticeable during the first four months of 2000.
The Fund employs a value-oriented management style in all three international
sectors. The allocation of new monies flowing into the Fund remains 70% to
international large-cap, 15% to international small-cap, and 15% to emerging
markets. Since the beginning of the year, the large-cap (EAFE) segment of the
Fund was repositioned with the intention of reducing the Fund's exposure to
"deep value" stocks while increasing exposure to stocks with more well-defined
growth prospects. Special attention was placed on enhancing risk control
processes. In the recent past, as markets became more expensive, the
subadvisor's search for reasonably valued securities placed stronger emphasis on
smaller stocks that have performed much differently from the broad market
indexes, and in some cases, may have had limited liquidity. Now, after the
restructuring, the EAFE segment of the Fund is more balanced by market
capitalization, country and sector classifications.
We continue to believe that this segmented investment approach to international
equity markets will, over the long term, provide solid risk-adjusted returns and
excellent diversification benefits to compliment domestic holdings in most long
term investment programs.
CIMCO Stock Portfolio Management Team -- Advisor
IAI International Limited -- Subadvisor
Lazard Asset Management -- Subadvisor
<PAGE>
Fund Performance Review
International Stock Fund
Geographical Diversification of Investments
International Stock Fund Cumulative Performance
of $10,000 Since Inception
At this place, the shareholder report contains a pie chart showing the
following: France 6%, United Kingdom 15%, Germany 8%, Japan 19%, Cash and Other
Assets 4%, Other Countries 33%, Spain 4% Netherlands 5% and Switzerland 6%.
International Stock Fund Annualized Performance
of $10,000 Since Inception
At this place, the shareholder report shows a line chart which shows the
following:
Class A Shares........................................................$11,033
Class B Shares........................................................$11,103
Morgan Stanley Capital International Europe, Asia & Far East Index....$14,619
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the index on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Prospectus
and elsewhere in this report. Past performance is not indicative of future
performance. Indices are unmanaged and investors cannot invest in them.
Additionally, the EAFE Index return does not reflect expenses or sales charges.
<TABLE>
<CAPTION>
MEMBERS International Stock Fund Average Annual Total Return
% Return Without Sales Charge % Return After Sales Charge***
12 Months Ended Since Inception 12 Months Ended Since Inception
04/30/00 to 04/30/00+ 04/30/00 to 04/30/00+
<S> <C> <C> <C> <C>
Class A Shares* -0.93% 6.77% -6.16% 4.30%
Class B Shares** -1.62 5.98 -5.71 4.58
Lipper International Stock Fund Index 22.53 17.98 -- --
Morgan Stanley Capital International Europe,
Asia & Far East Index 14.19 17.67 -- --
<FN>
* Maximum Sales Charge is 5.3% for A Shares.
** Maximum Contingent Deferred Sales Charge is 4.5% for B Shares.
*** Assuming Maximum Sales Charge
+ Funds commenced operations on December 29, 1997.
</FN>
</TABLE>
<PAGE>
Family of Investments
CASH RESERVES FUND
Investment Objective
The Cash Reserves Fund seeks high current income from money market instruments
consistent with the preservation of capital and liquidity. The Fund intends to
maintain a stable net asset value of $1.00 per share.
Portfolio Management
The Fund is managed by a team of CIMCO's portfolio managers.
Primary Investment Strategies
The Cash Reserves Fund invests exclusively in U.S. dollar-denominated money
market securities maturing in thirteen months or less from the date of purchase,
including those issued by U.S. and foreign financial institutions, corporate
issuers, the U.S. Government and its agencies and instrumentalities,
municipalities, foreign governments, and multinational organizations such as the
World Bank. At least 95% of the Fund's assets must be rated in the highest
short-term category (or its unrated equivalent), and 100% of the Fund's assets
must be invested in securities rated in the two highest categories.
For a listing of the securities held in the portfolio on April 30, 2000, please
turn to page 20.
BOND FUND
Investment Objective
The Bond Fund seeks to generate a high level of current income, consistent with
the prudent limitation of risk, primarily through investment in a diversified
portfolio of income bearing debt securities.
Portfolio Management
The Fund is managed by a team of CIMCO's portfolio managers.
Primary Investment Strategies
To keep current income relatively stable and to limit share price volatility,
the Bond Fund emphasizes investment grade securities and maintains an
intermediate (typically 3 to 6 years) average portfolio duration. Under normal
circumstances, the Fund invests at least 80% of its assets in such securities.
The Fund may employ active trading and typically invests in the following
instruments: o Corporate Debt Securities o U.S. Government Debt Securities o
Foreign Government Debt Securities o Other issuer Debt Securities.
The Fund may also invest in asset-backed and mortgage-backed securities,
including securities backed by credit union originated loans, to the extent
permitted by law and available in the market.
For a listing of the securities held in the portfolio at April 30, 2000, please
turn to page 21.
BALANCED FUND
Investment Objective
The Balanced Fund seeks a high total return through the combination of income
and capital appreciation.
Portfolio Management
The Fund is managed by a team of CIMCO's portfolio managers.
Primary Investment Strategies
The Balanced Fund invests in a broadly diversified array of securities including
common stocks, bonds and money market instruments. The percentage of the Fund's
assets invested in equity securities, income bearing securities and money market
instruments may vary somewhat depending upon the availability of attractively
priced stocks and bonds and anticipated cash needs of the Fund. Generally,
however, common stocks will constitute 60% to 40% of the Fund's assets, bonds
will constitute 40% to 60% of the Fund's assets and money market instruments may
constitute up to 20% of the Fund's assets.
For a listing of the securities held in the portfolio at April 30, 2000, please
turn to page 23.
HIGH INCOME FUND
Investment Objective
The High Income Fund seeks high current income by investing primarily in a
diversified portfolio of lower-rated, higher-yielding income securities. The
Fund also seeks capital appreciation, but only when consistent with its primary
goal.
Portfolio Management
CIMCO uses one or more subadvisors under a "manager of managers" approach to
make investment decisions for this Fund. Massachusetts Financial Services
Company (MFS) is the only subadvisor currently used by CIMCO to manage the
assets of the Fund.
Primary Investment Strategies
The High Income Fund invests primarily in lower-rated, higher-yielding income
bearing securities, such as "junk" bonds. Because the performance of these
securities has historically been strongly influenced by economic conditions, the
Fund may rotate securities selection by business sector according to the
economic outlook. Under normal market conditions, the Fund invests at least 80%
of its assets in bonds rated lower than investment grade (BBB/Baa) and their
unrated equivalents or other high-yielding securities. For a listing of the
securities held in the portfolio at April 30, 2000, please turn to page 26.
GROWTH AND INCOME FUND
Investment Objective
The Growth and Income Fund seeks long-term capital growth with income as a
secondary consideration.
Portfolio Management
The Fund is managed by a team of CIMCO's portfolio managers.
Primary Investment Strategies
The Growth and Income Fund focuses on stocks of companies with financial and
market strengths and a long-term record of financial performance, and will,
under normal market conditions, maintain at least 80% of its assets in such
stocks. Primarily through ownership of a diversified portfolio of common stocks
and securities convertible into common stocks, the Fund will seek a rate of
return in excess of returns typically available from less variable investment
alternatives. The Fund will typically invest in securities representing every
sector of the S&P 500 in approximately the same weightings such sector has in
the S&P 500.
For a listing of the securities held in the portfolio at April 30, 2000, please
turn to page 33.
CAPITAL APPRECIATION FUND
Investment Objective
The Capital Appreciation Fund seeks long-term capital appreciation.
Portfolio Management
The Fund is managed by a team of CIMCO's portfolio managers.
Primary Investment Strategies
The Capital Appreciation Fund invests primarily in common stocks, and will,
under normal market conditions, maintain at least 80% of its assets in such
securities. The Fund seeks stocks that have a low market price relative to the
portfolio managers' expected level and certainty of the issuing company's future
earnings. Relative to the Growth and Income Fund, the Capital Appreciation Fund
will include some smaller, less developed issuers and some companies undergoing
more significant changes in their operations or experiencing significant changes
in their markets. The Fund will diversify its holdings among various industries
and among companies within those industries but will often be less diversified
than the Growth and Income Fund.
For a listing of the securities held in the portfolio at April 30, 2000, please
turn to page 34.
EMERGING GROWTH FUND
Investment Objective
The Emerging Growth Fund seeks long-term capital appreciation.
Portfolio Management
CIMCO uses one or more subadvisors under a "manager of managers" approach to
make investment decisions for this Fund. Massachusetts Financial Services
Company (MFS) is the only subadvisor currently used by CIMCO to manage the
assets of the Fund.
Primary Investment Strategies
The Emerging Growth Fund invests generally in common stocks, securities
convertible into common stocks and related equity securities. The Fund seeks
securities of emerging growth companies, which are companies that are either: o
relatively small or early in their life cycle, but have the potential to become
much larger enterprises, or o major enterprises whose rates of earnings growth
are anticipated to accelerate because of changes such as new management, new
products, changes in demand for the company's products, or changes in the
economy or segments of the economy affecting the company.
For a listing of the securities held in the portfolio at April 30, 2000, please
turn to page 35.
INTERNATIONAL STOCK FUND
Investment Objective
The International Stock Fund seeks long-term growth of capital by investing
primarily in foreign equity securities.
Portfolio Management
CIMCO uses one or more subadvisors under a "manager of managers" approach to
make investment decisions for this fund. IAI International Limited and Lazard
Asset Management are the subadvisors currently used by CIMCO to manage the
assets of the Fund.
Primary Investment Strategies
Under normal market conditions, the International Stock Fund invests at least
80% of its assets in foreign equity securities. Foreign securities are issued by
companies organized or whose principal operations are outside the U.S., issued
by a foreign government, principally traded outside of the U.S., or quoted or
denominated in a foreign currency. Equity securities include common stocks,
securities convertible into common stocks, preferred stocks, and other
securities representing equity interests such as American depository receipts,
European depository receipts and Global depository receipts.
For a listing of the securities held in the portfolio at April 30, 2000, please
turn to page 37.
<PAGE>
CASH RESERVES FUND-- Portfolio of Investments (Unaudited)
Value
Par Value (Note 2)
COMMERCIAL PAPER (A) - 53.50%
Finance - 25.77%
$ 300,000 American General Finance Co.
6.162%, due 05/08/00 $ 299,648
300,000 Caterpillar Financial Services Corp.
6.119%, due 05/10/00 299,550
365,000 Ford Motor Credit Corp.
6.114%, due 05/12/00 364,331
350,000 General Electric Capital Corp.
6.136%, due 05/22/00 348,771
300,000 General Motors Acceptance Corp.
5.995%, due 05/01/00 300,000
200,000 Merrill Lynch & Co.
6.175%, due 05/10/00 299,547
1,911,847
Communication - 4.96%
370,000 Bellsouth Telecommunications, Inc.
6.241%, due 06/01/00 368,050
Utilities - 4.70%
350,000 MDU Resources Group
6.145%, due 05/24/00 348,652
Energy - 4.04%
300,000 Pacific Gas & Electric Corp.
6.163%, due 05/15/00 299,293
Technology - 4.03%
300,000 Emerson Electric Co.
6.124%, due 05/17/00 299,199
Chemicals - 4.02%
300,000 du Pont (E.I.) de Nemours & Co.
6.143%, due 06/07/00 298,150
Consumer Staples - 3.96%
295,000 Procter & Gamble Co.
6.154%, due 06/07/00 293,861
Media - 2.02%
300,000 Disney (Walt) Co
6.111%, due 05/03/00 149,950
Total Commercial Paper 3,969,002
( Cost $3,969,002 )
<PAGE>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (A) - 45.97%
Federal Home Loan Mortgage Corp. - 13.97%
$ 200,000 6.163%, due 06/15/00 $ 198,495
845,000 6.213%, due 06/19/00 838,042
1,036,537
Federal Farm Credit Bank - 13.35%
500,000 6.056%, due 05/04/00 499,753
493,000 6.060%, due 06/02/00 490,414
990,167
Federal National Mortgage Association - 12.03%
500,000 5.040%, due 06/15/00 496,275
250,000 6.047%, due 06/22/00 396,649
892,924
Federal Home Loan Bank - 6.62%
500,000 6.162%, due 08/18/00 491,038
Total U.S. Government and Agency Obligations 3,410,666
( Cost $3,410,666 )
CERTIFICATE OF DEPOSIT - 0.58%
42,666 State Street Eurodollar
5.000%, due 05/01/00 42,666
Total Certificate of Deposit 42,666
( Cost $42,666 )
TOTAL INVESTMENTS - 100.05% 7,422,334
( Cost $7,422,334** )
NET OTHER ASSETS AND LIABILITIES - (0.05)% (3,407)
TOTAL NET ASSETS - 100.00% $ 7,418,927
================================================================================
** Aggregate cost for Federal tax purposes.
(A) Rate noted represents annualized yield at time of purchase.
<PAGE>
BOND FUND-- Portfolio of Investments (Unaudited)
Value
Par Value (Note 2)
CORPORATE NOTES AND BONDS - 50.30%
Energy - 14.55%
$ 350,000 Ashland, Inc., Senior Note
6.625%, due 02/15/08 $ 314,708
300,000 DPL, Inc., 144A Senior Note (C)
8.250%, due 03/01/07 296,234
300,000 Dynegy Holdings, Inc., Senior Note
8.125%, due 03/15/05 296,632
250,000 Keyspan Gas East, MTN
7.875%, due 02/01/10 253,888
335,000 Petro Geo-Services ASA, Yankee
Senior Note(D)
7.125%, due 03/30/28 278,269
250,000 Texas Utilities Co.
6.375%, due 02/01/04 237,089
175,000 Union Oil Company of California
6.500%, due 05/01/08 158,438
250,000 Valero Energy Corp.
7.375%, due 03/15/06 234,881
250,000 YPF Sociedad Anonima, Yankee (D)
8.000%, due 02/15/04 243,861
2,314,000
Finance - 13.43%
300,000 Amerco, Senior Note
8.800%, due 02/04/05 294,585
250,000 Bank One Corp., Subordinate Debenture
7.750%, due 07/15/25 236,471
250,000 Barclays Bank PLC, Yankee,
Subordinate Note(D)
7.400%, due 12/15/09 240,292
300,000 Block Financial Corp.
8.500%, due 04/15/07 298,396
200,000 First Union Capital II, Series A
7.950%, due 11/15/29 188,033
300,000 Heller Financial, Inc., 144A (C)
7.375%, due 11/01/09 282,475
300,000 SunTrust Banks, Inc., Subordinate Note
7.750%, due 05/01/10 297,228
300,000 Wells Fargo Co.
6.400%, due 04/26/02 299,791
2,137,271
Industrials - 5.29%
300,000 Avnet, Inc
7.875%, due 02/15/05 298,649
290,000 Foster Wheeler Corp.
6.750%, due 11/15/05 243,105
300,000 Goodyear Tire & Rubber Co.
8.500%, due 03/15/07 299,971
841,725
<PAGE>
Retail - 4.26%
$ 250,000 Autozone, Inc.
6.000%, due 11/01/03 $ 233,536
500,000 Great Atlantic & Pacific Tea Co.
7.750%, due 04/15/07 443,701
677,237
Aerospace/Defense - 3.93%
394,000 Lockheed Martin Corp.
6.500%, due 04/15/03 375,008
250,000 Raytheon Co., 144A (C)
8.200%, due 03/01/06 249,465
624,473
Capital Goods - 2.60%
250,000 Cummins Engine, Inc.
6.450%, due 03/01/05 229,007
200,000 Lear Corp., Series B
7.960%, due 05/15/05 183,909
412,916
Health Services - 2.23%
250,000 Bergen Brunswig Corp., Senior Note
7.375%, due 01/15/03 206,983
150,000 Columbia/HCA Healthcare Corp.
6.125%, due 12/15/00 147,594
354,577
Building and Construction - 1.70%
300,000 Owens Corning, Inc.
7.700%, due 05/01/08 270,773
Telecommunications - 1.57%
250,000 AT&T Corp., Debenture
8.625%, due 12/01/31 250,105
Consumer Services - 0.74%
200,000 Service Corp. International
7.200%, due 06/01/06 118,000
Total Corporate Notes and Bonds 8,001,077
(Cost $8,186,797)
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 41.22%
U.S. Treasury Notes - 23.73%
500,000 10.750%, due 02/15/03 550,938
1,000,000 11.125%, due 08/15/03 1,130,000
500,000 10.750%, due 08/15/05 591,719
500,000 6.500%, due 08/15/05 499,063
500,000 6.250%, due 02/15/07 493,125
500,000 6.500%, due 02/15/10 510,000
3,774,845
U.S. GOVERNMENT AND AGENCY OBLIGATIONS (continued)
Government National Mortgage Association - 10.81%
$ 778,492 6.500%, due 04/15/26 $ 731,482
426 7.500%, due 02/15/30 419
500,000 8.000%, due 04/20/30 498,657
500,000 7.500%, due 05/01/30 488,750
1,719,308
Federal Home Loan Mortgage Corp. - 3.49%
555,782 8.000%, due 02/01/30 555,817
Federal National Mortgage Association - 3.19%
295,000 6.290%, due 01/22/08 273,393
250,000 7.000%, due 08/27/12 234,239
507,632
Total U.S. Government and Agency Obligations
( Cost $6,604,952 ) 6,557,602
Shares
INVESTMENT COMPANY - 4.29%
682,516 State Street Prime Money Market
5.640% 682,516
Total Investment Company 682,516
( Cost $682,516 )
COMMERCIAL PAPER (A) - 3.13%
$ 500,000 Avnet, Inc.
3.260%, due 05/16/00 $ 498,708
Total Commercial Paper 498,708
( Cost $498,708 )
TOTAL INVESTMENTS - 98.94% 15,739,903
( Cost $15,972,973** )
NET OTHER ASSETS AND LIABILITIES - 1.06% 167,927
TOTAL NET ASSETS - 100.00% $ 15,907,830
---
** Aggregate cost for Federal tax purposes.
(A) Rate noted represents annualized yield at time of purchase.
(C) Security sold within the terms of private placement memorandum exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional investors." These securities have been
determined to be liquid under guidelines established by the Board of
Directors.
(D) Notes and bonds, issued by foreign entities, denominated in U.S.
dollars. The aggregate of these securities are 4.79% of total net
assets.
MTN Medium Term Note
<PAGE>
BALANCED FUND-- Portfolio of Investments (Unaudited)
Value
Shares (Note 2)
COMMON STOCKS - 53.74%
Technology - 16.94%
12,800 3Com Corp.* $ 504,800
16,000 ADC Telecommunications, Inc.* 972,000
12,300 Compuware Corp.* 154,519
8,500 Conexant Systems, Inc.* 508,937
10,400 EMC Corp.* 1,444,950
14,100 Gateway, Inc.* 779,025
5,800 Hewlett-Packard Co. 783,000
7,900 International Business Machines Corp. 881,838
25,500 Keane, Inc.* 736,313
16,968 Koninklijke (Royal) Philips
Electronics N.V. 757,197
4,400 Micron Technology, Inc.* 612,700
5,800 Motorola, Inc. 690,562
12,800 Seagate Technology, Inc.* 650,400
7,900 Texas Instruments, Inc. 1,286,713
10,762,954
Consumer Staples - 7.02%
11,000 Cox Communications, Inc., Class A* 470,937
12,500 CVS Corp. 543,750
12,800 Disney (Walt) Co. 554,400
6,800 General Mills, Inc. 247,350
10,500 Kimberly-Clark Corp. 609,656
11,700 McDonald's Corp. 446,062
7,800 MediaOne Group, Inc.* 589,875
10,700 Nabisco Holdings Corp., Class A 401,919
8,900 Safeway, Inc.* 392,713
13,400 Sara Lee Corp. 201,000
4,457,662
Financial Services - 6.06%
14,000 Allstate Corp. 330,750
10,196 Bank of America Corp. 499,604
10,190 Bank One Corp. 310,795
12,000 Citigroup, Inc. 713,250
10,000 Countrywide Credit Industries, Inc. 276,250
11,500 Household International, Inc. 480,125
6,500 MBIA, Inc. 321,344
5,600 Morgan Stanley Dean Witter & Co. 429,800
11,900 Wells Fargo Co. 488,644
3,850,562
Healthcare - 4.91%
6,700 Aetna, Inc. 387,762
9,000 ALZA Corp.* 396,563
14,000 American Home Products Corp. 786,625
9,800 Bristol-Myers Squibb Co. 513,888
4,400 Glaxo Wellcome PLC, ADR 276,375
4,992 Johnson & Johnson 411,840
6,902 Pharmacia Corp. 344,669
3,117,722
Consumer Cyclical - 4.12%
8,100 IMS Health, Inc. $ 138,206
5,200 Lowe's Cos., Inc. 257,400
19,000 PRIMEDIA, Inc.* 396,625
15,100 Target Corp. 1,005,094
6,800 Tiffany & Co. 494,275
5,900 Wal-Mart Stores, Inc. 326,712
2,618,312
Capital Goods - 3.69%
5,000 Dover Corp. 254,062
6,800 Emerson Electric Co. 373,150
7,000 Honeywell International, Inc. 392,000
6,000 Illinois Tool Works, Inc. 384,375
13,000 Pall Corp. 290,063
7,000 Rockwell International Corp. 275,625
6,000 United Technologies Corp. 373,125
2,342,400
Energy - 3.61%
6,664 BP Amoco PLC, ADR 339,864
4,700 Exxon Mobil Corp. 365,131
5,600 Kerr-McGee Corp. 289,800
8,400 Schlumberger, Ltd. 643,125
1,316 Transocean Sedco Forex, Inc. 61,852
8,800 Unocal Corp. 284,350
13,300 USX-Marathon Group 310,056
2,294,178
Communication Services - 3.44%
7,000 AT&T Corp. 326,812
5,500 GTE Corp. 372,625
8,000 Sprint Corp. (FON Group) 492,000
7,500 Telefonos de Mexico SA, Class L, ADR 441,094
11,750 Vodafone AirTouch, PLC, ADR 552,250
2,184,781
Basic Materials - 1.66%
3,500 Dow Chemical Co. 395,500
2,400 Praxair, Inc. 106,650
8,000 Rohm and Haas Co. 285,000
7,000 Willamette Industries, Inc. 267,312
1,054,462
Utilities - 1.11%
10,000 PG & E Corp. 259,375
12,000 Williams Cos., Inc. 447,750
707,125
Transportation - 0.78%
4,000 Delta Air Lines, Inc. 211,000
7,600 FedEx Corp.* 286,425
497,425
COMMON STOCKS (continued)
Miscellaneous - 0.40%
15,000 Interim Services, Inc.* $ 256,875
Total Common Stocks 34,144,458
( Cost $26,927,839 )
Par Value
CORPORATE NOTES AND BONDS - 22.41%
Finance - 7.41%
$ 500,000 Abbey National PLC, Yankee
Subordinate Debenture (D)
7.950%, due 10/26/29 486,925
350,000 Bank One Corp., Subordinate Debenture
7.750%, due 07/15/25 331,059
250,000 Barclays Bank PLC, Yankee
Subordinate Note (D)
7.400%, due 12/15/09 240,293
700,000 Block Financial Corp.
8.500%, due 04/15/07 696,257
300,000 First Union Capital II, Series A
7.950%, due 11/15/29 282,050
700,000 Heller Financial, Inc., 144A (C)
7.375%, due 11/01/09 659,107
650,000 Paine Webber Group, Inc.
7.625%, due 12/01/09 616,951
700,000 SunTrust Banks, Inc., Subordinate Note
7.750%, due 05/01/10 693,532
700,000 Wells Fargo Co.
6.400%, due 04/26/02 699,511
4,705,685
Energy - 4.43%
750,000 Ashland, Inc., Senior Note
6.625%, due 02/15/08 674,375
500,000 DPL, Inc., 144A, Senior Note (C)
8.250%, due 03/01/07 493,724
250,000 Keyspan Gas East, MTN
7.875%, due 02/01/10 253,888
600,000 Petro Geo-Services ASA, Yankee,
Senior Note(D)
7.125%, due 03/30/28 498,392
692,000 Valero Energy Corp.
7.375%, due 03/15/06 650,151
250,000 YPF Sociedad Anonima, Yankee (D)
8.000%, due 02/15/04 243,861
2,814,391
Industrials - 3.58%
393,000 Amerco, Senior Note
7.200%, due 04/01/02 379,969
500,000 Amerco, Senior Note
8.800%, due 02/04/05 490,975
Industrials (continued)
$ 700,000 Avnet, Inc.
7.875%, due 02/15/05 $ 696,847
250,000 Foster Wheeler Corp.
6.750%, due 11/15/05 209,573
500,000 Goodyear Tire & Rubber Co.
8.500%, due 03/15/07 499,951
2,277,315
Telecommunications - 1.46%
450,000 AT&T Corp., Debenture
8.625%, due 12/01/31 450,189
500,000 CSC Holdings, Inc., Series B,
Senior Note
8.125%, due 07/15/09 473,593
923,782
Aerospace/Defense - 1.14%
500,000 Lockheed Martin Corp.
6.500%, due 04/15/03 475,898
250,000 Raytheon Co., 144A (C)
8.200%, due 03/01/06 249,465
725,363
Retail - 1.07%
250,000 Autozone, Inc.
6.000%, due 11/01/03 233,536
500,000 Great Atlantic & Pacific Tea Co.
7.750%, due 04/15/07 443,702
677,238
Building and Construction - 0.99%
700,000 Owens Corning, Inc.
7.700%, due 05/01/08 631,803
Capital Goods - 0.93%
250,000 Cummins Engine, Inc.
6.450%, due 03/01/05 229,007
420,000 Meritor Automotive, Inc.
6.800%, due 02/15/09 360,185
589,192
Consumer Staples - 0.72%
500,000 Conagra, Inc., Senior Note
6.700%, due 08/01/27 457,952
Health Services - 0.40%
250,000 Bergen Brunswig Corp., Senior Note
7.375%, due 01/15/03 206,983
50,000 Columbia/HCA Healthcare Corp.
6.125%, due 12/15/00 49,198
256,181
Consumer Services - 0.28%
300,000 Service Corp. International
7.200%, due 06/01/06 177,000
Total Corporate Notes and Bonds 14,235,902
( Cost $14,504,018 )
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 16.96%
U.S. Treasury Notes - 10.89%
$ 500,000 5.500%, due 08/31/01 $ 492,656
1,000,000 6.500%, due 03/31/02 996,250
500,000 10.750%, due 02/15/03 550,937
2,000,000 11.125%, due 08/15/03 2,260,000
500,000 10.750%, due 08/15/05 591,719
500,000 6.500%, due 08/15/05 499,063
1,500,000 6.500%, due 02/15/10 1,530,000
6,920,625
Federal National Mortgage Association - 3.73%
300,000 6.290%, due 01/22/08 278,027
500,000 7.000%, due 08/27/12 468,478
634,740 8.000%, due 09/01/29 633,904
499,659 8.000%, due 03/01/30 499,066
499,603 7.500%, due 04/01/30 488,961
2,368,436
Federal Home Loan Mortgage Corp. - 1.55%
987,082 8.000%, due 02/01/30 987,144
Government National Mortgage Association - 0.79%
527 7.500%, due 07/15/26 519
1,277 7.500%, due 02/15/30 1,256
500,000 8.000%, due 04/20/30 498,657
500,432
Total U.S. Government and Agency Obligations 10,776,637
( Cost $10,844,636 )
INVESTMENT COMPANY - 4.95%
3,148,188 State Street Prime Money Market
5.640% $ 3,148,188
Total Investment Company 3,148,188
( Cost $3,148,188 )
TOTAL INVESTMENTS - 98.06% 62,305,185
(Cost $55,424,681**)
NET OTHER ASSETS AND LIABILITIES - 1.94% 1,230,653
TOTAL NET ASSETS - 100.00% $ 63,535,838
* Non-income producing security.
** Aggregate cost for Federal tax purposes.
(C) Security sold within the terms of private placement memorandum exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional investors." These securities have been
determined to be liquid under guidelines established by the Board of
Directors.
(D) Notes and bonds, issued by foreign entities, denominated in U.S.
dollars. The aggregate of these securities are 2.31% of total net
assets.
ADR American Depositary Receipt
MTN Medium Term Note
ABS Asset Backed Security
<PAGE>
HIGH INCOME FUND-- Portfolio of Investments (Unaudited)
Value
Par Value (Note 2)
CORPORATE NOTES AND BONDS - 89.66%
Telecommunications - 23.35%
$125,000 360Networks, Inc., Yankee
Senior Note (D)
12.000%, due 08/01/09 $ 115,625
90,000 Adelphia Business Solutions
Senior Subordinate Note
12.000%, due 11/01/07 90,675
125,000 Adelphia Communications, Series B
Senior Note
8.375%, due 02/01/08 111,875
20,000 Adelphia Communications, Senior Note
9.375%, due 11/15/09 18,700
25,000 Avalon Cable Holdings LLC, Step Coupon
Senior Discount Note (B)
11.875%, due 12/01/08 16,250
75,000 Benedek Communications, Step Coupon
Senior Discount Note (B)
13.250%, due 05/15/06 65,250
110,000 Chancellor Media Corp., Series B
8.750%, due 06/15/07 110,000
40,000 Citadel Broadcasting Co.
9.250%, due 11/15/08 38,250
45,000 Classic Cable, Inc., 144A
Senior Subordinate Note (C)
10.500%, due 03/01/10 44,325
125,000 Colt Telecom Group PLC, Yankee,
Step Coupon
Senior Discount Note (B)(D)
12.000%, due 12/15/06 107,812
100,000 CSC Holdings, Inc. Senior
Subordinate Note
9.250%, due 11/01/05 100,250
27,000 CSC Holdings, Inc., Series M, PIK
11.125%, due 04/01/08 29,093
145,000 Cumulus Media, Inc.
10.375%, due 07/01/08 131,588
175,000 Echostar DBS Corp.
Senior Note
9.375%, due 02/01/09 169,750
150,000 Energis PLC, Senior Note
9.750%, due 06/15/09 148,500
165,000 Esat Telecom Group PLC, Series B,
Yankee Senior Note (D)
11.875%, due 12/01/08 193,050
55,000 Focal Communications CP, Series B,
Step Coupon Senior Discount Note (B)
12.125%, due 02/15/08 35,750
75,000 Focal Communications CP, 144A
Senior Note (C)
11.875%, due 01/15/10 75,094
100,000 Fox Sports Networks LLC
Senior Note
8.875%, due 08/15/07 99,500
75,000 Frontiervision LP/Capital
Senior Subordinate Note
11.000%, due 10/15/06 76,500
Telecommunications (continued)
$ 40,000 Frontiervision Holdings LP,
Step Coupon Senior Discount Note (B)
11.875%, due 09/15/07 $ 34,800
35,000 Globenet Communication Group, Ltd.,
Series B, Yankee Senior Note (D)
13.000%, due 07/15/07 35,000
40,000 Granite Broadcasting Corp. Senior
Subordinate Note
10.375%, due 05/15/05 37,600
175,000 GT Group Telecom, 144A, Step
Coupon (B)(C)
13.250%, due 02/01/10 93,625
135,000 Insight Midwest/Insight Capital, Inc.,
144A Senior Note (C)
9.750%, due 10/01/09 136,688
125,000 Jazztel PLC, Yankee
Senior Note (D)
14.000%, due 04/01/09 128,125
25,000 Level 3 Communications, 144A
Senior Note (C)
10.750%, due 03/15/08 21,955
160,000 LIN Holdings Corp., Step Coupon
Senior Discount Note (B)
10.000%, due 03/01/08 95,200
115,000 Mediacom LLC/Capital, Series B
Senior Note
8.500%, due 04/15/08 106,950
130,000 MGC Communications, Inc./Mpower
Communications, 144A
Senior Note (C)
13.000%, due 04/01/10 119,600
40,000 Northeast Optic Network Senior Note
12.750%, due 08/15/08 38,800
150,000 NTL Communications Corp., Series B,
Step Coupon Senior Note (B)
12.375%, due 10/01/08 97,875
80,000 NTL, Inc., Series B, Step Coupon
Senior Note (B)
9.750%, due 04/01/08 50,700
50,000 NTL, Inc., Series B, Step Coupon
Senior Note (B)
9.750%, due 04/15/09 43,934
100,000 Paxson Communications
Senior Subordinate Note
11.625%, due 10/01/02 101,750
74,000 PTC International Finance II S.A.,
144A (C) 11.250%, due 12/01/09 76,960
65,000 Spectrasite Holdings, Inc.,
Senior Discount Note
12.000%, due 07/15/08 40,300
175,000 Spectrasite Holdings, Inc., Step Coupon
Senior Discount Note (B)
11.250%, due 04/15/09 96,250
30,000 Spectrasite Holdings, Inc., 144A
Senior Note (C)
10.750%, due 03/15/10 29,550
170,000 Tele1 Europe B.V., Yankee
Senior Note (D)
13.000%, due 05/15/09 174,250
CORPORATE NOTES AND BONDS (continued)
Telecommunications (continued)
$ 150,000 Telemundo Holdings, Inc., Series B,
Step Coupon Senior Discount Note (B)
11.500%, due 08/15/08 $ 96,750
40,000 Telewest Communication PLC, Step
Coupon, Yankee Debenture (B)(D)
11.000%, due 10/01/07 37,600
60,000 Telewest Communication PLC, 144A,
Step Coupon Senior Discount Note (B)(C)
9.250%, due 04/15/09 34,200
75,000 Telewest Communication PLC, 144A,
Step Coupon Senior Discount Note (B)(C)
11.375%, due 02/01/10 42,000
30,000 Telewest Communication PLC, 144A
Senior Note (C)
9.875%, due 02/01/10 29,400
80,000 Time Warner Telecom LLC
Senior Note
9.750%, due 07/15/08 78,400
190,000 United Pan-Europ Communications N.V.,
Series B, Yankee Senior Note (D)
10.875%, due 08/01/09 171,950
85,000 Verio, Inc.
Senior Note
10.375%, due 04/01/05 81,388
150,000 VSTR Wire Co./VSTR Wire Holdings, 144A
Senior Note (C)
10.375%, due 11/15/09 152,250
90,000 XM Satellite Radio, Inc., 144A (C)
14.000%, due 03/15/10 81,000
60,000 Young Broadcasting, Inc., Series B
8.750%, due 06/15/07 53,325
4,196,012
Communication - 15.76%
185,000 Allegiance Telecom, Inc., Step Coupon (B)
11.750%, due 02/15/08 130,425
75,000 Allegiance Telecom, Inc.
Senior Note
12.875%, due 05/15/08 81,750
130,000 Centennial Cellular Corp.
Senior Subordinate Note
10.750%, due 12/15/08 129,350
100,000 Charter Commercial Holdings LLC
Senior Note
8.250%, due 04/01/07 89,000
260,000 Charter Commercial Holdings LLC,
Step Coupon Senior Discount Note (B)
9.920%, due 04/01/11 143,000
90,000 Crown Castle International Corp.
Senior Note
9.000%, due 05/15/11 83,700
135,000 Dolphin Telecom PLC, Step Coupon, Yankee
Senior Discount Note (B)(D)
11.500%, due 06/01/08 43,200
<PAGE>
Communication (continued)
$ 25,000 Dolphin Telecom PLC, Step Coupon,
Yankee Senior Discount Note (B)(D)
14.000%, due 05/15/09 $ 8,250
60,000 Esprit Telecom Group PLC, Yankee
Senior Note (D)
10.875%, due 06/15/08 49,800
75,000 Exodus Communications, Inc.
Senior Note
11.250%, due 07/01/08 75,938
45,000 Exodus Communications, Inc.
Senior Note
10.750%, due 12/15/09 44,887
100,000 Hermes Europe Railtel B.V., Yankee
Senior Note (D)
10.375%, due 01/15/09 86,000
120,000 ICG Holdings, Inc., Step Coupon (B)
12.500%, due 05/01/06 96,000
90,000 Intermedia Communication, Series B
Senior Note
8.875%, due 11/01/07 84,150
25,000 ITC Deltacom, Inc.
Senior Note
11.000%, due 06/01/07 25,000
40,000 ITC Deltacom, Inc.
Senior Note
9.750%, due 11/15/08 38,400
10,000 Lenfest Communications
Senior Note
8.375%, due 11/01/05 10,022
35,000 Lenfest Communications
Senior Subordinate Note
10.500%, due 06/15/06 38,511
50,000 Lenfest Communications
Senior Subordinate Note
8.250%, due 02/15/08 48,683
175,000 Metronet Communications, Yankee,
Step Coupon Senior Discount Note (B)(D)
9.950%, due 06/15/08 137,742
75,000 Millicom International Cellular,
Yankee, Step Coupon Senior
Discount Note (B)(D)
13.500%, due 06/01/06 63,000
55,000 MJD Communications, Inc., Series B
Senior Subordinate Note
9.500%, due 05/01/08 50,050
100,000 Nextel Communications, Step Coupon
Senior Discount Note (B)
9.750%, due 10/31/07 71,750
265,000 Nextel Communications, Step Coupon
Senior Discount Note (B)
9.950%, due 02/15/08 186,494
45,000 Nextel International, Inc., Step Coupon
Senior Discount Note (B)
12.125%, due 04/15/08 28,350
25,000 Nextlink Communications Senior Note
9.625%, due 10/01/07 23,375
CORPORATE NOTES AND BONDS (continued)
Communication (continued)
$ 190,000 Nextlink Communications
Senior Note
10.750%, due 06/01/09 $ 186,675
65,000 Rural Cellular Corp., Series B
Senior Subordinate Note
9.625%, due 05/15/08 62,725
31,882 Rural Cellular Corp., Series B, PIK
11.375%, due 05/15/10 30,607
25,000 Telesystem International Wireless,
Yankee, Step Coupon
Senior Discount Note (B)(D)
13.250%, due 06/30/07 15,750
55,000 Telewest Communications PLC, Yankee
Debenture (D)
9.625%, due 10/01/06 52,800
115,000 Triton PCS, Inc., Step Coupon (B)
11.000%, due 05/01/08 82,513
220,000 United International Holdings,
Series B, Step Coupon
Senior Discount Note (B)
10.750%, due 02/15/08 143,000
175,000 Versatel Telecom BV
Senior Note (D)
13.250%, due 05/15/08 177,625
160,000 Viatel, Inc., Step Coupon
Senior Discount Note (B)
12.500%, due 04/15/08 88,800
15,000 Viatel, Inc.,
Senior Note
11.250%, due 04/15/08 13,650
110,000 Western Wireless
Senior Subordinate Note
10.500%, due 02/01/07 111,100
2,832,072
Finance - 5.99%
110,000 AMSC Acquisition Co., Inc., Series B
12.250%, due 04/01/08 80,300
87,743 Crown Castle International Corp., PIK
12.750%, due 12/15/10 89,498
65,000 DTI Holdings, Inc., Series B, Step Coupon
Senior Discount Note (B)
12.500%, due 03/01/08 27,300
150,000 Global Crossing Holding LTD
9.625%, due 05/15/08 147,000
30,000 Madison River Capital/Madison River
Financial, 144A Senior Note (C)
13.250%, due 03/01/10 28,200
150,000 Ono Finance PLC (D)
13.000%, due 05/01/09 153,000
150 Ono Finance PLC, Series A, 144A,
Zero Coupon (B)(C)(D)
0.000%, due 05/31/09 22,500
200,000 P & L Coal Holdings Corp., Series B
9.625%, due 05/15/08 179,500
Finance (continued)
$ 90,000 Silgan Holdings, Inc.
Senior Subordinate Note
9.000%, due 06/01/09 $ 84,600
160,000 Thermadyne Holdings Corp., Step Coupon
Debenture (B)
12.500%, due 06/01/08 67,200
80,000 Thermadyne Manufacturing Corp.
9.875%, due 06/01/08 64,800
175,000 Willis Corroon Corp.
9.000%, due 02/01/09 132,125
1,076,023
Technology - 5.93%
110,000 Argo-Tech Corp.
8.625%, due 10/01/07 81,400
50,000 Argo-Tech Corp., Series D
8.625%, due 10/01/07 37,000
95,000 Be Aerospace, Inc., Series B
Senior Subordinate Note
8.000%, due 03/01/08 76,475
25,000 Be Aerospace, Inc.
Senior Subordinate Note
9.500%, due 11/01/08 21,625
75,000 Completel Europe N.V., Series B
Yankee, Step Coupon (B)(D)
14.000%, due 02/15/09 37,500
80,000 Globix Corp., 144A, Senior Note (C)
12.500%, due 02/01/10 70,400
175,000 K & F Industries, Series B
Senior Subordinate Note
9.250%, due 10/15/07 163,625
225,000 Level 3 Communications, Inc.
Senior Note
9.125%, due 05/01/08 195,750
115,000 Metromedia Fiber Network, Series B
Senior Note
10.000%, due 11/15/08 109,250
60,000 Northpoint Comm Goup, Inc., 144A
Senior Note (C)
12.875%, due 02/15/10 53,400
210,000 PSINET, Inc.
Senior Note
11.000%, due 08/01/09 184,800
35,000 Unisys Corp.
Senior Note
7.875%, due 04/01/08 33,425
1,064,650
Recreation - 5.09%
140,000 Argosy Gaming Co.
10.750%, due 06/01/09 145,600
150,000 Aztar Corp.
Senior Subordinate Note
8.875%, due 05/15/07 139,875
CORPORATE NOTES AND BONDS (continued)
Recreation (continued)
$ 150,000 Boyd Gaming Corp.
Senior Subordinate Note
9.500%, due 07/15/07 $ 141,750
160,000 Coast Hotels & Casino
9.500%, due 04/01/09 150,400
75,000 Hollywood Park, Inc., Series B
9.250%, due 02/15/07 74,625
30,000 Horseshoe Gaming Holding Corp.,
Series B
8.625%, due 05/15/09 28,125
75,000 Isle of Capri Casinos
8.750%, due 04/15/09 67,687
75,000 Park Place Entertainment
Senior Subordinate Note
7.875%, due 12/15/05 69,750
100,000 Station Casinos
Senior Subordinate Note
8.875%, due 12/01/08 96,000
913,812
Energy - 3.97%
110,000 Anacomp, Inc., Series B
Senior Subordinate Note
10.875%, due 04/01/04 101,200
155,000 Chesapeake Energy Corp., Series B
9.625%, due 05/01/05 148,800
75,000 Clark R&M, Inc.
Senior Note
8.625%, due 08/15/08 57,375
45,000 Continental Resources
10.250%, due 08/01/08 40,106
100,000 Forest Oil Corp.
10.500%, due 01/15/06 101,500
170,000 Ocean Energy, Inc., Series B
8.875%, due 07/15/07 167,875
80,000 Pioneer Natural Resource
9.625%, due 04/01/10 81,874
15,000 Pride International, Inc.
Senior Note
10.000%, due 06/01/09 15,037
713,767
Basic Materials - 3.82%
100,000 Applied Extrusion Technology, Series B
Senior Note
11.500%, due 04/01/02 100,250
90,000 Buckeye Technologies, Inc.
Senior Subordinate Note
9.250%, due 09/15/08 89,100
50,000 Fibermark, Inc.
Senior Note
9.375%, due 10/15/06 46,000
Basic Materials (continued)
$ 75,000 Huntsman ICI Chemicals
10.125%, due 07/01/09 $ 75,000
100,000 Polymer Group, Inc., Series B
9.000%, due 07/01/07 90,000
80,000 Sovereign Specialty Chemical, 144A
Senior Subordinate Note (C)
11.875%, due 03/15/10 80,800
50,000 Sterling Chemicals, Inc., Series B
12.375%, due 07/15/06 52,000
70,000 Synthetic Industries, Inc., 144A (C)
13.000%, due 12/13/00 68,950
95,000 US Timberlands Klam/Fin
Senior Note
9.625%, due 11/15/07 83,600
685,700
Building and Construction - 3.61%
100,000 American Standard, Inc.
7.375%, due 02/01/08 91,750
25,000 American Standard, Inc.
7.625%, due 02/15/10 23,062
50,000 Building Materials Corp., Series B
Senior Note
7.750%, due 07/15/05 43,375
130,000 Building Materials Corp., Series B
Senior Note
8.625%, due 12/15/06 115,375
50,000 Building Materials Corp., Series B
Senior Note
8.000%, due 10/15/07 42,500
125,000 Formica Corp., Series B
Senior Subordinate Note
10.875%, due 03/01/09 107,500
65,000 MMI Products, Inc., Series B
Senior Subordinate Note
11.250%, due 04/15/07 65,488
60,000 Nortek, Inc., Senior Subordinate Note
9.875%, due 03/01/04 56,700
110,000 Nortek, Inc., Series B
Senior Note
9.250%, due 03/15/07 102,575
648,325
Metals and Mining - 3.46%
85,000 AK Steel Corp.
Senior Note
9.125%, due 12/15/06 83,406
30,000 Algoma Steel, Inc., Yankee (D)
12.375%, due 07/15/05 29,550
85,000 Commonwealth Industries
Senior Subordinate Note
10.750%, due 10/01/06 84,362
CORPORATE NOTES AND BONDS (continued)
Metals and Mining (continued)
$ 60,000 Doe Run Resources Corp., Series B
11.250%, due 03/15/05 $ 27,000
160,000 Kaiser Aluminum & Chemical Co.
Senior Note
9.875%, due 02/15/02 155,200
95,000 Metal Management, Inc.
10.000%, due 05/15/08 68,400
50,000 Russel Metals, Inc., Yankee (D)
10.000%, due 06/01/09 50,750
125,000 WCI Steel, Inc., Series B
Senior Note
10.000%, due 12/01/04 123,125
621,793
Containers/Packaging - 2.95%
65,000 Ball Corp.
8.250%, due 08/01/08 61,262
105,000 Gaylord Container Corp., Series B
Senior Note
9.750%, due 06/15/07 93,713
135,000 Gaylord Container Corp.
Senior Subordinate Note
9.875%, due 02/15/08 106,650
180,000 Riverwood International
10.250%, due 04/01/06 177,750
85,000 U.S. Can Corp., Series B
10.125%, due 10/15/06 90,950
530,325
Consumer Staples - 2.57%
90,000 Finlay Enterprises, Inc.
9.000%, due 05/01/08 80,100
50,000 International Utility Structures, Yankee
Senior Subordinate Note (D)
10.750%, due 02/01/08 41,500
40,000 Pierce Leahy Corp.
Senior Subordinate Note
11.125%, due 07/15/06 40,800
30,000 Remington Products Co. LLC, Series B
Senior Subordinate Note
11.000%, due 05/15/06 25,200
5,000 Revlon Consumer Products, Senior Note
8.125%, due 02/01/06 3,550
115,000 Samsonite Corp.
Senior Subordinate Note
10.750%, due 06/15/08 96,600
110,000 Sealy Mattress Co., Series B
Senior Subordinate Note
9.875%, due 12/15/07 107,250
80,000 Simmons Co., Series B
Senior Subordinate Note
10.250%, due 03/15/09 67,600
462,600
Retail - 2.35%
$ 75,000 Duane Reade, Inc.
9.250%, due 02/15/08 $ 67,500
15,000 J Crew Group, Series B, Step Coupon
Debenture (B)
13.125%, due 10/15/08 8,250
85,000 J Crew Operating Corp.
Senior Subordinate Note
10.375%, due 10/15/07 73,100
40,000 Jitney-Jungle Stores (E)
12.000%, due 03/01/06 7,200
10,000 Jitney-Jungle Stores (E)
10.375%, due 09/15/07 100
60,000 Musicland Group, Inc., Series B
9.875%, due 03/15/08 49,200
50,000 Pathmark Stores, Subordinate Note
11.625%, due 06/15/02 13,875
75,000 Southland Corp.
Senior Subordinate Debenture
5.000%, due 12/15/03 65,625
150,000 Williams Scotsman, Inc.
9.875%, due 06/01/07 136,500
421,350
Chemicals and Drugs - 1.67%
55,000 Lyondell Chemical Co., Series A
9.625%, due 05/01/07 54,244
90,000 Lyondell Chemical Co., Series B
9.875%, due 05/01/07 88,762
75,000 NL Industries
Senior Note
11.750%, due 10/15/03 76,875
5,000 PCI Chemicals Canada, Inc., Yankee (D)
9.250%, due 10/15/07 4,006
90,000 Sterling Chemicals, Inc., Series A
Senior Subordinate Note
11.250%, due 04/01/07 75,600
299,487
Industrial - 1.47%
100,000 Blount, Inc.
13.000%, due 08/01/09 98,000
50,000 General Binding Corp.
9.375%, due 06/01/08 25,500
100,000 Moog, Inc., Series B
Senior Subordinate Note
10.000%, due 05/01/06 97,229
55,000 Numatics, Inc., Series B
Senior Subordinate Note
9.625%, due 04/01/08 43,450
264,179
Durable Goods - 1.41%
25,000 Dura Operating Corp., Series B
9.000%, due 05/01/09 22,250
CORPORATE NOTES AND BONDS (continued)
Durable Goods (continued)
$ 100,000 Hayes Lemmerz International, Inc.
11.000%, due 07/15/06 $ 100,750
50,000 International Knife & Saw, Inc.
Senior Subordinate Note
11.375%, due 11/15/06 32,500
35,000 Motors and Gears, Inc., Series D
Senior Note
10.750%, due 11/15/06 33,250
20,000 Oxford Automotive, Inc., Series D
10.125%, due 06/15/07 18,600
65,000 Simonds Industries
10.250%, due 07/01/08 46,800
254,150
Consumer Services - 1.18%
40,000 Eldorado Resorts LLC
Senior Subordinate Note
10.500%, due 08/15/06 39,000
20,000 Iron Mountain, Inc.
10.125%, due 10/01/06 19,550
65,000 Iron Mountain, Inc
8.750%, due 09/30/09 58,013
100,000 Prime Hospitality Corp., Series B
Senior Subordinate Note
9.750%, due 04/01/07 96,000
212,563
Media - 1.06%
50,000 Albritton Communications, Series B
Senior Subordinate Debenture
9.750%, due 11/30/07 46,500
100,000 AMFM, Inc.
8.000%, due 11/01/08 99,625
60,000 Satelites Mexicanos SA, Series B (D)
10.125%, due 11/01/04 45,000
191,125
Printing - 1.06%
110,000 Hollinger International Publishing
9.250%, due 03/15/07 106,150
5,000 Mail-Well I Corp., Series B
8.750%, due 12/15/08 4,350
35,000 Quebecor World (USA), Inc.
Senior Subordinate Note
7.750%, due 02/15/09 32,048
50,000 World Color Press, Inc.
Senior Subordinate Note
8.375%, due 11/15/08 47,658
190,206
Defense Electronics - 0.70%
$ 125,000 L-3 Communications Corp., Series B
Senior Subordinate Note
10.375%, due 05/01/07 $ 125,625
Schools - 0.60%
120,000 Kindercare Learning Centers, Series B
Senior Subordinate Note
9.500%, due 02/15/09 108,300
Transportation - 0.58%
115,000 Gulfmark Offshore
8.750%, due 06/01/08 104,650
Machinery - 0.49% 100,000 Columbus McKinnon Corp.
8.500%, due 04/01/08 88,500
Waste Disposal - 0.34%
50,000 Allied Waste North America, Series B
7.625%, due 01/01/06 37,000
35,000 Allied Waste North America, Series B
10.000%, due 08/01/09 23,713
60,713
Health Care Services - 0.19%
35,000 Alaris Medical, Inc., Step Coupon
Senior Discount Note (B)
11.125%, due 08/01/08 9,450
30,000 Prime Medical Services, Inc.
8.750%, due 04/01/08 25,200
34,650
Capital Goods - 0.06%
35,000 Newcor, Inc., Series B
Senior Subordinate Note
9.875%, due 03/01/08 10,500
Total Corporate Notes and Bonds 16,111,077
( Cost $17,514,120 )
Shares
PREFERRED STOCK - 0.64%
Media - 0.64%
1,350 Primedia, Inc., Series H 116,100
Total Preferred Stock 116,100
( Cost $122,785 )
COMMON STOCK - 0.44%
Technology - 0.29%
750 Completel Holdings LLC, 144A (C)* $ 51,000
Communication - 0.15%
719 Viatel, Inc.* 27,502
Total Common Stock 78,502
( Cost $0)
WARRANTS AND RIGHTS - 0.27%
Communication - 0.27%
185 Allegiance Telecom, Inc. 43
110 American Mobile SAT 8,250
90 Jazztel PLC, 144A (C) 15,817
50 Versatel Telecom BV, 144A (C) 24,019
48,129
Finance - 0.00%#
325 DTI Holdings, Inc., 144A (C) 3
Total Warrants and Rights 48,132
( Cost $6,800)
CERTIFICATE OF DEPOSIT - 7.17%
$1,289,475 State Street Eurodollar
5.000%, due 05/01/00 $ 1,289,475
Total Certificate of Deposit 1,289,475
( Cost $1,289,475 )
TOTAL INVESTMENTS - 98.18% 17,643,286
( Cost $18,933,180** )
NET OTHER ASSETS AND LIABILITIES - 1.82% 326,575
TOTAL NET ASSETS - 100.00% $ 17,969,861
* Non income producing.
** Aggregate cost for Federal tax purposes.
# Amount represents less than 0.01%.
PIK Payment-In-Kind
(B) Represents securities that remain zero coupon until predetermined
date, at which the stated coupon rate becomes the effective rate.
(C) Security sold within the terms of private placement memorandum exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional investors." These securities have been
determined to be liquid under guidelines established by the Board of
Directors.
(D) Notes and bonds, issued by foreign entities, denominated in U.S.
dollars. The aggregate of these securities are 11.03% of total net
assets.
(E) In default.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACT TO SELL
Net
Unrealized
Contracts to Deliver In Exchange For Value in Settlement Date Appreciation
Eruo Monetary Unit U.S. Dollars U.S. Dollars 06/16/00 $1,541
(25,000) (24,348) (22,807)
As of April 30, 2000, the Fund had entered into the following forward foreign
currency exchange contract resulting in net unrealized appreciation of $1,541.
<PAGE>
GROWTH AND INCOME FUND-- Portfolio of Investments (Unaudited)
Value
Shares (Note 2)
COMMON STOCKS - 96.23%
Technology - 31.19%
34,600 Automatic Data Processing, Inc. $ 1,861,912
30,200 Compaq Computer Corp. 883,350
45,700 Computer Associates International, Inc. 2,550,631
30,000 Computer Sciences Corp.* 2,446,875
32,300 EMC Corp.* 4,487,681
41,700 Harris Corp. 1,347,431
24,100 Hewlett-Packard Co. 3,253,500
4,800 Intel Corp. 608,700
29,200 International Business Machines Corp. 3,259,450
77,376 Koninklijke (Royal) Philips
Electronics N.V. 3,452,904
26,600 Lanier Worldwide, Inc.* 51,538
25,100 Motorola, Inc. 2,988,469
33,500 Nortel Networks Corp. 3,793,875
24,400 Texas Instruments, Inc. 3,974,150
39,900 Xerox Corp. 1,054,856
36,015,322
Consumer Staples - 15.41%
52,200 CVS Corp. 2,270,700
79,700 Disney (Walt) Co. 3,452,006
21,500 General Mills, Inc. 782,062
44,600 Kimberly-Clark Corp. 2,589,588
101,900 Kroger Co.* 1,891,519
36,600 McDonald's Corp. 1,395,375
23,500 MediaOne Group, Inc.* 1,777,188
35,900 Nabisco Holdings Corp., Class A 1,348,494
39,400 PepsiCo, Inc. 1,445,488
56,100 Sara Lee Corp. 841,500
17,793,920
Financial Services - 10.76%
70,000 Allstate Corp. 1,653,750
33,492 Bank of America Corp. 1,641,108
39,670 Bank One Corp. 1,209,935
43,000 Citigroup, Inc. 2,555,813
23,100 First Union Corp. 736,312
51,000 Household International, Inc. 2,129,250
20,000 Morgan Stanley Dean Witter & Co. 1,535,000
15,400 Wachovia Corp. 965,388
12,426,556
Healthcare - 8.47%
53,300 American Home Products Corp. 2,994,794
31,900 Baxter International, Inc. 2,077,487
37,900 Bristol-Myers Squibb Co. 1,987,381
6,380 Edwards Lifesciences Corp.* 95,700
20,000 Glaxo Wellcome PLC, ADR 1,256,250
16,600 Johnson & Johnson 1,369,500
9,781,112
Energy - 6.68%
26,606 BP Amoco PLC, ADR 1,356,906
15,200 Exxon Mobil Corp. 1,180,850
27,200 Schlumberger, Ltd. 2,082,500
19,700 Texaco, Inc. 975,150
4,452 Transocean Sedco Forex, Inc. 209,244
27,900 Unocal Corp. 901,518
43,000 USX-Marathon Group 1,002,438
7,708,606
Capital Goods - 6.30%
29,000 Emerson Electric Co. $ 1,591,375
49,000 Honeywell International, Inc. 2,744,000
24,000 Rockwell International Corp. 945,000
32,000 United Technologies Corp. 1,990,000
7,270,375
Communication Services - 6.00%
26,500 ALLTEL Corp. 1,765,562
18,978 AT&T Corp. 886,035
25,000 GTE Corp. 1,693,750
42,000 Sprint Corp. (FON Group) 2,583,000
6,928,347
Consumer Cyclical - 3.14%
29,438 Dana Corp. 894,179
29,700 Sears, Roebuck & Co. 1,087,762
29,600 Wal-Mart Stores, Inc. 1,639,100
3,621,041
Utilities - 3.13%
21,000 Duke Energy Corp. 1,207,500
28,000 PG & E Corp. 726,250
45,000 Williams Cos., Inc. 1,679,063
3,612,813
Basic Materials - 2.89%
11,000 Dow Chemical Co. 1,243,000
23,000 Georgia-Pacific Group 845,250
23,000 PPG Industries, Inc. 1,250,625
3,338,875
Miscellaneous - 1.20%
16,000 Minnesota Mining and Manufacturing Co. 1,384,000
Transportation - 1.06%
20,900 Burlington Northern Santa Fe Corp. 504,213
13,600 Delta Air Lines, Inc. 717,400
1,221,613
Total Common Stocks 111,102,580
(Cost $95,886,115 )
INVESTMENT COMPANY - 3.80%
4,390,238 State Street Prime Money Market
5.640% 4,390,238
Total Investment Company 4,390,238
(Cost $4,390,238 )
TOTAL INVESTMENTS - 100.03% 115,492,818
(Cost $100,276,353** )
NET OTHER ASSETS AND LIABILITIES - (0.03)% (38,205)
TOTAL NET ASSETS - 100.00% $ 115,454,613
* Non-income producing security.
** Aggregate cost for Federal tax purposes.
ADR American Depositary Receipt
<PAGE>
CAPITAL APPRECIATION FUND-- Portfolio of Investments (Unaudited)
Value
Shares (Note 2)
COMMON STOCKS - 95.51%
Technology - 30.00%
22,700 3Com Corp.* $ 895,231
32,900 ADC Telecommunications, Inc.* 1,998,675
35,000 Autodesk, Inc. 1,343,125
42,100 Cadence Design Systems, Inc.* 707,806
30,500 Compuware Corp.* 383,156
14,000 Conexant Systems, Inc.* 838,250
14,400 Dallas Semiconductor Corp. 618,300
17,400 EMC Corp.* 2,417,512
27,600 Gateway, Inc.* 1,524,900
42,600 Keane, Inc.* 1,230,075
7,200 Micron Technology, Inc.* 1,002,600
56,900 PeopleSoft, Inc.* 793,044
22,100 Seagate Technology, Inc.* 1,122,956
12,700 Texas Instruments, Inc. 2,068,513
16,944,143
Financial Services - 11.29%
35,000 Ace, Ltd. 837,812
32,000 Associates First Capital Corp., Class A 710,000
27,000 Citigroup, Inc. 1,604,813
15,000 Countrywide Credit Industries, Inc. 414,375
18,000 First Security Corp. 254,250
11,000 Freddie Mac 505,313
10,800 MBIA, Inc. 533,925
12,800 SunTrust Banks, Inc. 649,600
21,100 Wells Fargo Co.* 866,419
6,376,507
Consumer Cyclical - 10.90%
22,100 IMS Health, Inc. 377,081
16,900 Lowe's Cos., Inc. 836,550
50,600 PRIMEDIA, Inc.* 1,056,275
29,100 Sherwin-Williams Co. 723,862
26,500 Target Corp. 1,763,906
11,700 Tiffany & Co. 850,444
28,500 TJX Cos., Inc. 546,844
6,154,962
Healthcare - 8.55%
11,900 Aetna, Inc. 688,712
17,400 ALZA Corp.* 766,688
41,400 Boston Scientific Corp.* 1,097,100
32,900 Elan Corp., PLC, ADR* 1,410,588
17,313 Pharmacia Corp. 864,568
4,827,656
Consumer Staples - 8.40%
22,800 Brinker International, Inc.* 726,750
26,700 Cox Communications, Inc., Class A* 1,143,094
13,900 MediaOne Group, Inc.* 1,051,187
18,900 Nabisco Holdings Corp., Class A 709,931
25,200 Safeway, Inc.* 1,111,950
4,742,912
Communication Services - 6.20%
1,000 AT&T Wireless Group* 31,812
17,600 CenturyTel, Inc. 431,200
9,000 Sprint Corp. (PCS Group) 495,000
Communication Services (continued)
22,500 Telefonos de Mexico SA, Class L, ADR $ 1,323,281
26,000 Vodafone AirTouch, PLC, ADR 1,222,000
3,503,293
Energy - 6.19%
25,300 Grant Prideco, Inc.* 487,025
11,100 Kerr-McGee Corp. 574,425
23,100 Unocal Corp. 746,419
28,200 USX-Marathon Group 657,412
25,300 Weatherford International, Inc.* 1,027,813
3,493,094
Capital Goods - 5.94%
20,000 Dover Corp. 1,016,250
12,000 Grainger (W.W.), Inc. 520,500
19,000 Illinois Tool Works, Inc. 1,217,187
27,000 Pall Corp. 602,438
3,356,375
Basic Materials - 3.03%
13,300 Praxair, Inc. 591,019
18,000 Rohm and Haas Co. 641,250
12,500 Willamette Industries, Inc. 477,344
1,709,613
Utilities - 2.36%
12,000 El Paso Energy Corp. 510,000
22,000 Williams Cos., Inc. 820,875
1,330,875
Transportation - 1.50%
16,500 FedEx Corp.* 621,844
9,000 Midwest Express Holdings, Inc.* 227,813
849,657
Miscellaneous - 1.15%
38,000 Interim Services, Inc.* 650,750
Total Common Stocks 53,939,837
( Cost $43,237,205 )
INVESTMENT COMPANY - 4.35%
2,454,775 State Street Prime Money Market
5.640% 2,454,775
Total Investment Company 2,454,775
( Cost $2,454,775 )
TOTAL INVESTMENTS - 99.86% 56,394,612
( Cost $45,691,980** )
NET OTHER ASSETS AND LIABILITIES - 0.14% 79,041
TOTAL NET ASSETS - 100.00% $ 56,473,653
* Non-income producing security.
** Aggregate cost for Federal tax purposes.
ADR American Depositary Receipt
<PAGE>
EMERGING GROWTH FUND-- Portfolio of Investments (Unaudited)
Value
Shares (Note 2)
COMMON STOCKS - 85.35%
Technology - 44.58%
100 Advanced Micro Devices, Inc.* $ 8,775
5,970 Altera Corp.* 610,432
200 Amkor Technology, Inc.* 12,238
4,180 Analog Devices, Inc.* 321,076
50 Apple Computer, Inc.* 6,203
5,340 Applied Materials, Inc.* 543,679
1,300 ARM Holdings, PLC* 13,227
7,200 ARM Holdings, PLC, ADR* 228,600
300 Arrow Electronics, Inc. 13,144
1,800 Automatic Data Processing, Inc. 96,862
5,120 BMC Software, Inc.* 239,680
1,050 Cabletron Systems, Inc.* 24,019
1,400 Cadence Design Systems, Inc.* 23,538
15,800 Cisco Systems, Inc.* 1,095,384
1,100 Compaq Computer Corp. 32,175
2,920 Computer Associates International, Inc. 162,972
1,000 Computer Sciences Corp.* 81,563
900 Conductus, Inc.* 14,400
1,725 Dell Computer Corp.* 86,466
900 Electronic Data Systems Corp. 61,875
2,000 EMC Corp.* 277,875
600 First Data Corp. 29,213
800 Flextronics International, Ltd.* 56,200
1,750 Hewlett-Packard Co. 236,250
360 Infineon Technologies AG* 24,791
4,670 Intel Corp. 592,214
800 International Business Machines Corp. 89,300
70 Internet Commerce Corp., Class A* 1,571
2,460 Lam Research Corp.* 112,852
330 lastminute.com, PLC* 1,105
1,910 LSI Logic Corp.* 119,375
1,000 Lucent Technologies, Inc. 62,188
3,070 Micron Technology, Inc.* 427,498
6,820 Microsoft Corp.* 475,695
2,125 Motorola, Inc. 253,008
1,910 National Semiconductor Corp.* 116,032
5,266 Nortel Networks Corp. 596,375
1,030 Novellus Systems, Inc.* 68,688
14,400 Oracle Corp.* 1,151,100
100 PMC-Sierra, Inc.* 19,188
200 Sanmina Corp.* 12,013
80 SAP AG, ADR 3,930
900 SCI Systems, Inc.* 47,925
20 Seagate Technology, Inc.* 1,016
120 SIPEX Corp.* 2,745
1,740 Solectron Corp.* 81,454
3,880 Sun Microsystems, Inc.* 356,717
4,400 Tandy Corp. 250,800
1,560 Teradyne, Inc.* 171,600
1,760 Texas Instruments, Inc. 286,660
4,440 Xilinx, Inc.* 325,230
9,926,916
Communication Services - 15.38%
1,890 AT&T Corp. - Liberty Media Group, Class A* $ 94,382
1,800 AT&T Wireless Group* 57,262
2,000 China Telecom (Hong Kong), Ltd.* 14,443
3,215 CIENA Corp.* 397,454
580 Corning, Inc. 114,550
830 EchoStar Communications Corp., Class A* 52,861
3,080 Ericsson (LM) AB Telefonaktiebolaget, ADR 272,388
195 FLAG Telecom Holdings, Ltd.* 3,802
20 France Telecom S.A. 3,095
740 Global Crossing, Ltd.* 23,310
730 Intermedia Communications, Inc.* 29,748
950 JDS Uniphase Corp.* 98,562
1,220 Koninklijke KPN NV 122,944
1,470 MCI WorldCom, Inc.* 66,793
6,280 Metromedia Fiber Network, Inc., Class A* 193,895
120 MGC Communications, Inc.* 5,880
9,600 Nokia Oyj, ADR 546,000
200 Powerwave Technologies, Inc.* 41,612
4,180 QUALCOMM, Inc.* 453,269
2,830 Sonera Oyj 155,652
900 Sprint Corp. (FON Group) 55,350
2,090 Sprint Corp. (PCS Group) 114,950
170 Time Warner Telecom, Inc., Class A* 9,307
500 Versatel Telecom International NV* 20,046
51,430 Vodafone AirTouch, PLC 235,009
2,440 VoiceStream Wireless Corp.* 241,560
3,424,124
Consumer Cyclical - 6.24%
1,600 Bed Bath & Beyond, Inc.* 58,700
2,010 Best Buy Co., Inc.* 162,307
3,840 Circuit City Stores-Circuit City Group 225,840
3,800 Costco Wholesale Corp.* 205,437
700 Harley-Davidson, Inc. 27,869
3,160 Home Depot, Inc. 177,157
2,340 Kohl's Corp.* 112,320
500 Limited, Inc. 22,594
200 Lowe's Cos., Inc. 9,900
4,200 Oakley, Inc.* 48,300
1,000 Sears, Roebuck & Co. 36,625
200 Target Corp. 13,312
5,240 Wal-Mart Stores, Inc. 290,165
1,390,526
Capital Goods - 4.12%
400 American Superconductor Corp.* 15,275
20 Credence Systems Corp.* 2,855
1,400 General Electric Co. 220,150
400 Hadco Corp.* 32,925
750 Honeywell International, Inc. 42,000
11,680 Tyco International, Ltd. 536,550
800 United Technologies Corp. 49,750
200 Waters Corp.* 19,000
918,505
COMMON STOCKS (continued)
Healthcare - 3.89%
2,000 Abbott Laboratories $ 76,875
500 American Home Products Corp. 28,094
100 Bausch & Lomb, Inc. 6,037
1,300 BioSource International, Inc.* 12,756
200 BioSphere Medical, Inc.* 4,700
900 Boston Scientific Corp.* 23,850
170 Genentech, Inc.* 19,890
200 Guidant Corp.* 11,475
3,560 Immunex Corp.* 140,175
1,700 Medtronic, Inc. 88,294
1,860 PE Corp-PE Biosystems Group 111,600
800 Pfizer, Inc. 33,700
600 Pharmacia Corp. 29,962
1,920 Sepracor, Inc.* 176,640
900 Warner-Lambert Co. 102,431
866,479
Consumer Staples - 3.88%
600 Albertson's, Inc. 19,538
300 Anheuser-Busch Cos., Inc. 21,169
550 Carson, Inc.* 2,406
6,300 CVS Corp. 274,050
1,700 Disney (Walt) Co. 73,631
7,900 Kroger Co.* 146,644
600 McDonald's Corp. 22,875
6,870 Safeway, Inc.* 303,139
863,452
Financial Services - 2.83%
500 American International Group, Inc. 54,844
1,400 Chase Manhattan Corp. 100,887
2,170 Citigroup, Inc. 128,979
1,700 Freddie Mac 78,094
300 Goldman Sachs Group, Inc. 27,975
950 Household International, Inc. 39,662
200 Lehman Brothers Holdings, Inc. 16,413
1,210 Merrill Lynch & Co., Inc. 123,344
490 Morgan Stanley Dean Witter & Co. 37,608
500 Schwab (Charles) Corp. 22,250
630,056
Energy - 2.17%
150 Baker Hughes, Inc. 4,772
400 Enron Corp. 27,875
560 EOG Resources, Inc. 13,930
800 Global Marine, Inc.* 19,200
470 Grant Prideco, Inc.* 9,047
560 Halliburton Co. 24,745
1,770 Noble Drilling Corp.* 70,689
Energy (continued)
2,480 Schlumberger, Ltd. $ 189,875
800 Smith International, Inc.* 60,800
900 Transocean Sedco Forex, Inc. 42,300
470 Weatherford International, Inc.* 19,094
482,327
Building and Construction - 1.00%
350 Bouygues SA 223,366
Utilities - 0.87%
2,120 Calpine Corp.* 193,980
Miscellaneous - 0.29%
580 Cendant Corp.* 8,954
870 Learning Tree International, Inc.* 41,706
130 Vivendi (Ex-Gen Des Eaux) 12,858
63,518
Aerospace/Defense - 0.10%
400 General Dynamics Corp. 23,400
Total Common Stocks 19,006,649
( Cost $20,109,951 )
Par Value
CERTIFICATE OF DEPOSIT - 14.48%
$3,224,373 State Street Eurodollar
5.000%, due 05/01/00 3,224,373
Total Certificate of Deposit 3,224,373
( Cost $3,224,373 )
TOTAL INVESTMENTS - 99.83% 22,231,022
( Cost $23,334,324** )
NET OTHER ASSETS AND LIABILITIES - 0.17% 38,955
TOTAL NET ASSETS - 100.00% $ 22,269,977
* Non-income producing security.
** Aggregate cost for Federal tax purposes.
ADR American Depositary Receipt
<PAGE>
INTERNATIONAL STOCK FUND-- Portfolio of Investments (Unaudited)
Value
Shares (Note 2)
COMMON STOCKS - 95.23%
Australia - 3.15%
48,051 Broken Hill Proprietary Co., Ltd. $ 517,459
14,900 Cochlear, Ltd. 193,611
109,931 Telstra Corp., Ltd.* 471,226
1,182,296
Belgium - 1.20%
400 Creyf's N.V. 9,273
3,281 Dexia Belgium 425,364
100 Dexia* 13,409
448,046
Brazil - 2.32%
3,100 Companhia Brasileira de Distribuicao
Grupo Pao de Acucar, ADR 88,350
10,100 Companhia Cervejaria Brahma, ADR 156,550
3,558 Companhia Energetica
de Minas Gerais, S.A., ADR 54,193
11,800 Companhia Paranaense de Energia-Copel, ADR 87,025
3,900 Embratel Participacoes, S.A., ADR 87,750
13,300 Souza Cruz, S.A. 81,030
6,814 Tele Norte Leste Participacoes, S.A., ADR 121,379**
2,200 Tele Sudeste Celular Participacoes, S.A., ADR 94,050
800 Telesp Celular Participacoes S.A., ADR 35,300
2,600 Telesp-Telecomunicacoes de Sao Paulo S.A. 65,650
871,277
Chile - 0.32%
5,900 Administradora de Fondos
de Pensiones Provida, S.A., ADR 121,688
Denmark - 0.26%
700 Falck A/S 96,968
Finland - 1.90%
7,700 Amer Group, Ltd. 206,502
2,400 Sampo Insurance Co., Class A* 90,764
13,960 UPM-Kymmene Oyj 361,695
2,400 Vaisala Oyj 53,455
712,416
France - 6.37%
2,800 Carbone-Lorraine, S.A. 122,183
3,400 Compagnie de Saint-Gobain 463,950
2,202 Groupe Danone 481,442
2,700 Neopost, S.A.* 71,428
8,000 Renault S.A. 363,640
1,400 Scor, ADR 59,675
1,200 Societe Generale, Class A 248,512
3,693 Suez Lyonnaise des Eaux, S.A. 579,135
2,389,965
Germany - 7.05%
8,680 BASF AG $ 375,216
8,587 Bayer AG 355,583
7,500 DaimlerChrysler AG 436,368
5,500 Deutsche Telekom AG 352,504
2,200 Hawesko Holding AG 53,800
4,000 Siemens AG 590,188
3,011 Techem AG* 81,298
19,000 ThyssenKrupp AG 397,277
2,642,234
Greece - 0.35%
3,811 Hellenic Telecommunications
Organization, S.A. 85,535
4,000 Hellenic Telecommunications
Organization, S.A., ADR 46,750
132,285
Hong Kong - 2.28%
132,000 CDL Hotels International, Ltd. 38,130
730 China Telecom (Hong Kong), Ltd., ADR* 107,082
154,000 Esprit Holdings, Ltd.* 164,099
30,000 Shaw Brothers (Hong Kong), Ltd. 30,812
33,000 Sun Hung Kai Properties, Ltd. 261,612
36,000 VTech Holdings, Ltd. 149,284
47,000 Yue Yuen Industrial Holdings, Ltd. 102,578
853,597
Hungary - 0.25%
2,650 Magyar Tavkozlesi Rt., ADR 92,253
India - 1.91%
6,109 Bharat Heavy Electricals, Ltd.* 14,037
3,250 Hindalco Industries, Ltd. 52,491
5,500 Hindalco Industries, Ltd., GDR 93,500
430 Infosys Technologies, Ltd. 79,794
4,300 Larsen & Toubro, Ltd., GDR, 144A (C) 46,005
20,000 Mahanagar Telephone Nigam, Ltd. 103,116
19,200 Reliance Industries, Ltd. 152,588
720 Satyam Computer Services, Ltd. 51,464
26,500 State Bank of India 125,124
718,119
Indonesia - 0.31%
4,500 Gulf Indonesia Resources, Ltd. 31,500
27,500 PT Hanjaya Mandala Sampoerna*. 39,945
150,000 PT Indah Kiat Pulp & Paper Corp. Tbk* 45,095
116,540
Ireland - 0.70%
34,600 Anglo Irish Bank Corp. PLC 76,435
184,500 Waterford Wedgwood PLC 187,856
264,291
COMMON STOCKS (continued)
Israel - 0.43%
25,500 Bank Hapoalim, Ltd. $ 78,324
230 Check Point Software Technologies, Ltd.* 39,790
4,100 Partner Communications Co., Ltd, ADR* 43,819
161,933
Italy - 3.26%
71,000 ENI SpA* 353,067
8,600 Industrie Natuzzi SpA, ADR 94,600
14,700 Interpump Group SpA 61,607
113,011 Telecom Italia SpA 711,976
1,221,250
Japan - 18.72%
1,200 ADERANS Co., Ltd. 52,331
31,000 Dai Nippon Printing Co., Ltd. 526,115
5,000 Diamond Lease Co., Ltd. 74,441
12,000 Fuji Photo Film Co., Ltd. 481,089
7,000 Fujitsu, Ltd. 198,324
100 H.I.S. Co., Ltd. 6,018
61,000 Hitachi, Ltd. 728,577
6,000 Hitachi Medical Corp. 58,386
1,580 Hokuto Corp. 56,760
7,000 Honda Motor Co., Ltd. 313,041
3,960 IMPACT 21 Co., Ltd. 59,397
4,000 Japan Digital Laboratory Co., Ltd. 59,627
1,000 Kawasumi Laboratories, Inc. 8,888
4,000 Maruichi Steel Tube, Ltd. 46,776
27,000 Matsushita Electric Industrial Co., Ltd. 714,967
1,500 Meitec Corp. 47,081
3,000 Ministop Co., Ltd. 64,441
10,000 Nippon Shinyaku Co., Ltd. 68,978
35 Nippon Telegraph and Telephone Corp. 434,239
107,000 Sakura Bank, Ltd. 750,947
27,000 Sankyo Co., Ltd. 594,972
47,000 Sumitomo Corp. 526,550
2,900 Torii Pharmaceutical Co., Ltd. 63,367
105,000 Toshiba Corp. 1,018,842
4 Yoshinoya D&C Co., Ltd. 65,552
7,019,706
Malaysia - 0.14%
31,000 Jaya Tiasa Holdings Berhad 51,395
Mexico - 3.50%
68,000 Carso Global Telecom* 180,659
5,776 Cemex S.A. de C.V., ADR* 126,350
3,190 Fomento Economico Mexicano,
S.A. de C.V., ADR 131,588
45,000 Grupo Financiero Banamex Accival,
S.A. de C.V., Class O* 162,593
33,000 Grupo Financiero Banorte, S.A. de
C.V., Class O* 44,888
Mexico (continued)
9,400 Grupo Iusacell S.A. de C.V., ADR* $ 149,813
3,300 Grupo Televisa, S.A., GDR* 209,344
12,800 Kimberly-Clark de Mexico, S.A.
de C.V.,Class A 41,216
1,400 Telefonos de Mexico S.A., ADR, Class L 82,337
7,200 Tubos de Acero de Mexico, S.A., ADR 107,550
35,000 Wal-Mart de Mexico S.A. de C.V., Series C* 74,575
1,310,913
Netherlands - 5.09%
2,800 Beter Bed Holding N.V. 93,928
2,600 Fugro N.V. 121,728
6,000 Hunter Douglas N.V. 136,910
11,000 ING Groep N.V. 600,206
12,400 Koninklijke (Royal) Philips Electronics N.V. 553,158
8,400 Laurus N.V. 89,728
6,300 N.V. Holdingmaatschappij De Telegraaf 174,397
2,200 PinkRoccade N.V.* 138,001
1,908,056
Norway - 1.17%
6,300 Ekornes ASA 45,033
17,400 Merkantildata ASA 119,518
19,000 P4 Radio Hele Norge ASA 127,325
16,200 Tandberg Television ASA* 146,557
438,433
Peru - 0.27%
3,000 Credicorp, Ltd. 31,688
4,700 Telefonica del Peru S.A.A., ADR 71,088
102,776
Philippines - 0.57%
631,000 Benpres Holdings Corp.* 88,647
16,600 Manila Electric Co., Class B 29,754
5,200 Philippine Long Distance Telephone Co., ADR 95,875
214,276
Poland - 0.11%
2,900 Bank Handlowy W. Warszawie, GDR, 144A (C) 41,833
Portugal - 0.41%
4 Banco Totta & Acores, S.A., Registered 101
2,900 Seguros Mundial Confianca, S.A.* 155,099
155,200
Russia - 0.53%
3,300 OAO Lukoil Holding, ADR 198,924
Singapore - 0.12%
41,000 Want Want Holdings, Ltd. 45,100
COMMON STOCKS (continued)
South Africa - 1.49%
19,500 ABSA Group, Ltd. $ 69,021
4,300 Impala Platinum Holdings, Ltd. 136,347
37,800 Old Mutual PLC 85,334
70,700 Sanlam, Ltd.* 83,937
13,600 Sasol, Ltd. 79,829
3,100 South African Breweries PLC 22,660
11,200 South African Breweries PLC, Ltd. 82,590
559,718
South Korea - 3.17%
7,200 Hanvit Bank, GDR, 144A* (C) 20,700
4,700 Hyundai Electronics Industries Co. 74,539
6,871 Kookmin Bank 74,298
4,300 Korea Electric Power Corp. 125,929
2,500 Korea Telecom Corp., ADR 86,250
1,900 L.G. Chemical, Ltd. 43,658
600 Pohang Iron & Steel Co., Ltd. 46,929
2,400 Pohang Iron & Steel Co., Ltd., ADR 50,400
2,255 Samsung Electronics, GDR, 144A (C) 363,450
1,484 Samsung Fire & Marine Insurance 30,355
8,439 SK Telecom Co., Ltd., ADR 270,575
1,187,083
Spain - 3.60%
3,800 Aldeasa, S.A. 71,337
2,200 Banco Pastor, S.A. 88,801
32,216 Endesa, S.A.* 698,801
32,578 Iberdrola, S.A. 417,891
6,400 Prosegur, CIA de Seguridad S.A. 74,590
1,351,420
Sweden - 1.00%
3,100 Elanders AB, Class B 98,896
3,600 Getinge Industrier AB, Class B 33,330
5,950 Industrial & Financial Systems AB, Class B* 101,830
5,300 Nobel Biocare AB 141,885
375,941
Switzerland - 6.06%
5,500 ABB, Ltd. 616,706
65 Bank Sarasin & Cie, Registered, Class B 174,770
340 Edipresse, S.A. 164,513
980 Gretag Imaging Group, Registered* 196,772
52 Roche Holding AG 542,690
2,360 UBS AG* 577,795
2,273,246
Taiwan - 1.52%
3,400 ASE Test, Ltd.* 100,725
5,400 Asustek Computer, Inc., GDR, 144A* (C) 71,280
5,500 China Steel Corp., GDR 78,031
4,917 Compal Electronics, Inc.* 68,961
Taiwan (continued)
700 GigaMedia, Ltd.* $ 16,800
4,470 Taiwan Semiconductor
Manufacturing Co., Ltd., ADR* 233,837
569,634
Turkey - 0.96%
670,000 Erciyas Biracilik ve Malt Sanayii A.S.* 49,858
4,300 Turkiye Garanti Bankasi A.S., 144A (C)* 145,025
5,121,300 Yapi ve Kredi Bankasi A.S. 163,328
358,211
United Kingdom - 14.62%
20,000 Abbey National PLC 228,242
32,200 AMEC PLC 88,734
83,700 Ashtead Group PLC 119,888
17,450 AstraZeneca Group PLC 731,088
20,100 Barclays PLC 516,033
20,000 Bass PLC 234,002
31,000 Boots Co. PLC 237,579
39,000 CGU PLC 558,919
78,200 Corporate Services Group PLC 109,575
23,600 Dialog Corp. PLC* 33,803
1,947 Euromoney Publications PLC 71,993
3,700 Games Workshop Group PLC 10,369
20,600 Hogg Robinson PLC 79,539
24,100 Man (E D & F) Group PLC 186,481
19,600 Northgate PLC 106,803
47,000 ScottishPower PLC 377,762
64,300 Shell Transport & Trading Co. PLC 525,571
5,700 Signet Group PLC, ADR 149,625
16,488 SSL International PLC 167,498
78,000 Tesco PLC 265,342
106,000 Unilever PLC 633,721
15,900 Victrex PLC 48,767
5,481,334
Venezuela - 0.12%
1,600 Compania Anonima Nacional Telefonos
de Venezuela, ADR 46,400
Total Common Stocks 35,714,757
( Cost $33,322,389 )
PREFERRED STOCKS - 0.81%
Brazil - 0.31%
1,535,000 Banco Itau, S.A. 114,774
Columbia - 0.04%
2,100 Banco Ganadero, S.A., ADR 14,700
Germany - 0.46%
2,900 Fielmann AG 94,910
870 ProSieben Media AG 78,538
173,448
Total Preferred Stocks 302,922
( Cost $221,397 )
WARRANTS AND RIGHTS - 0.01%
Singapore - 0.01%
4,100 Want Want Holdings, Ltd. $ 1,353
Total Warrants and Rights 1,353
( Cost $205 )
Par Value
CERTIFICATE OF DEPOSIT - 3.65%
$1,369,739 State Street Eurodollar
5.000%, due 05/01/00 1,369,739
Total Certificate of Deposit 1,369,739
( Cost $1,369,739 )
TOTAL INVESTMENTS - 99.70% 37,388,771
( Cost $34,913,730** )
NET OTHER ASSETS AND LIABILITIES - 0.30% 112,896
TOTAL NET ASSETS - 100.00% $ 37,501,667
* Non-income producing security.
** Aggregate cost for Federal tax purposes.
(C) Security sold within the terms of private placement memorandum exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"qualified institutional investors." These securities have been
determined to be liquid under guidelines established by the Board of
Directors.
ADR American Depositary Receipt
GDR Global Depository Receipt
OTHER INFORMATION:
Industry Concentration as a Percentage of Net Assets: % of Net Assets
Finance 16.42%
Communication 10.13%
Technology 8.92%
Energy 7.95%
Health 6.45%
Consumer Staples 6.13%
Business Services 5.69%
Capital Goods 5.68%
Consumer Cyclical 4.86%
Chemical & Drugs 4.24%
Industrial 3.77%
Certificate of Deposit 3.65%
Metals & Mining 3.01%
Consumer Durables 2.97%
Retail 2.44%
Building & Construction 2.19%
Media 1.78%
Printing 1.40%
Basic Materials 1.31%
Consumer Services 0.55%
Agriculture 0.16%
Net Other Assets and Liabilities 0.30%
100.00%
<PAGE>
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<PAGE>
<TABLE>
<CAPTION>
Statements of Assets and Liabilities (Unaudited)
Cash Reserves Bond Balanced
Fund Fund Fund
Investments (Notes 2):
<S> <C> <C> <C>
Investments at cost $ 7,422,334 $ 15,972,973 $ 55,424,681
Net unrealized appreciation (depreciation) -- (233,070) 6,880,504
Total investments at value 7,422,334 15,739,903 62,305,185
Cash 368,074 -- --
Foreign currency (Cost $42,828) (Note 2) -- -- --
Receivables:
Investments sold -- 1,895,725 3,140,148
Fund shares sold 27,000 15,422 597,564
Dividends and interest 18 249,207 437,515
Due from Advisor, net 8,813 5,933 --
Net unrealized appreciation on forward
currency contracts -- -- --
Deferred organization and offering costs 22,377 22,377 22,377
Prepaid insurance 215 399 1,310
Other assets -- -- --
Total Assets 7,848,831 17,928,966 66,504,099
LIABILITIES:
Payable to custodian -- 84,707 383,974
Payables:
Investments purchased 367,861 1,813,875 2,369,091
Due to Advisor, net -- -- 19,915
Fund shares repurchased -- 7,972 47,141
Administration and transfer agent fees 7,753 7,907 10,303
Distribution fees - Class B 1,672 5,228 26,750
Shareholder servicing fees -- 3,280 12,715
Accrued expenses and other payables 52,618 98,167 98,372
Total Liabilities 429,904 2,021,136 2,968,261
NET ASSETS $ 7,418,927 $ 15,907,830 $ 63,535,838
NET ASSETS consist of:
Paid-in capital $ 7,389,114 $ 16,616,260 $ 57,194,429
Accumulated undistributed (distributions in
excess of) net investment income 29,771 12,080 (2,259)
Accumulated net realized gain (loss) on investments
sold and foreign currency related transactions 42 (487,440) (536,836)
Net unrealized appreciation (depreciation) of investments
(including appreciation (depreciation) of foreign
currency related transactions) -- (233,070) 6,880,504
TOTAL NET ASSETS $ 7,418,927 $ 15,907,830 $ 63,535,838
Class A Shares:
Net Assets $ 4,715,104 $ 7,485,078 $ 18,804,508
Shares of beneficial interest outstanding 4,715,957 785,173 1,493,956
NET ASSET VALUE and redemption price per share $ 1.00 $ 9.53 $ 12.59
Sales charge of offering price* 0.056 0.43 0.70
Maximum offering price per share $ 1.056 $ 9.96 $ 13.29
Class B Shares:
Net Assets $ 2,703,823 $ 8,422,752 $ 44,731,330
Shares of beneficial interest outstanding 2,702,960 883,136 3,551,079
NET ASSET VALUE and offering price per share** $ 1.00 $ 9.54 $ 12.60
<FN>
* Sales charge of offering price is 5.3% for the Cash Reserves Fund,
4.3% for the Bond Fund, 5.3% for the Balanced Fund, 4.3% for the High
Income Fund and 5.3% for the Growth and Income Fund, Capital
Appreciation Fund, Emerging Growth Fund and International Stock Fund.
** Redemption price per share is equal to the Net Asset Value per share
less any applicable deferred sales charge.
(1) Fund commended investment operations on February 29, 2000.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
High Income Growth and Income Capital Appreciation Emerging Growth International Stock
Fund Fund Fund Fund (1) Fund
<S> <C> <C> <C> <C>
$ 18,933,180 $ 100,276,353 $ 45,691,980 $ 23,334,324 $ 34,913,730
(1,289,894) 15,216,465 10,702,632 (1,103,302) 2,475,041
17,643,286 115,492,818 56,394,612 22,231,022 37,388,771
-- -- -- -- --
-- -- -- -- 38,715
1,349,426 -- -- 4,453,915 2,030,566
16,463 726,895 411,548 137,301 39,889
428,789 80,421 31,327 4,153 152,007
3,562 -- -- 163 --
1,541 -- -- -- --
22,377 22,377 22,377 20,594 22,377
460 2,092 1,030 -- 1,045
-- -- -- -- 79
19,465,904 116,324,603 56,860,894 26,847,148 39,673,449
1,281,411 13,135 2,091 3,169,478 1,350,379
37,264 729,457 271,447 1,379,350 751,615
-- 12,360 18,542 -- 15,092
4,060 22,415 45,393 2,725 192
8,951 10,190 10,966 9,383 10,139
6,196 48,836 21,913 1,541 2,737
3,707 22,928 11,374 4,402 7,862
154,454 10,669 5,515 10,292 33,766
1,496,043 869,990 387,241 4,577,171 2,171,782
$ 17,969,861 $ 115,454,613 $ 56,473,653 $ 22,269,977 $ 37,501,667
$ 19,745,368 $ 102,372,420 $ 46,802,416 $ 25,658,281 $ 38,168,980
40,151 (69,540) (183,497) (3,826) (159,513)
(527,305) (2,064,732) (847,898) (2,273,079) (2,976,367)
(1,288,353) 15,216,465 10,702,632 (1,111,399) 2,468,567
$ 17,969,861 $ 115,454,613 $ 56,473,653 $ 22,269,977 $ 37,501,667
$ 7,973,653 $ 33,355,105 $ 20,042,958 $ 19,052,696 $ 33,066,068
916,403 2,345,158 1,299,720 2,219,997 3,263,137
$ 8.70 $ 14.22 $ 15.42 $ 8.58 $ 10.13
0.39 0.80 0.86 0.48 0.57
$ 9.09 $ 15.02 $ 16.28 $ 9.06 $ 10.70
$ 9,996,208 $ 82,099,508 $ 36,430,695 $ 3,217,281 $ 4,435,599
1,146,357 5,794,884 2,398,071 375,132 439,544
$ 8.72 $ 14.17 $ 15.19 $ 8.58 $ 10.09
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations For the Period Ended April 30, 2000 (Unaudited)
Cash Reserves Bond Balanced
Fund Fund Fund
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends $ -- $ -- $ 163,479
Interest 221,141 573,680 894,380
Less: Foreign taxes withheld -- -- --
Total investment income 221,141 573,680 1,057,859
EXPENSES:
Management fees (Note 3) 15,380 39,164 177,815
Administration and transfer agent fees (Note 3) 45,645 48,612 63,873
Registration expenses 11,348 11,052 12,058
Custodian fees 4,267 3,915 6,407
Professional fees 5,594 5,499 7,572
Reports to shareholder expense 491 1,050 3,460
Trustees' fees 271 463 1,989
Distribution fees - Class B (Note 3) 11,966 30,231 142,413
Shareholder servicing fees - Class A (Note 3) -- 9,505 20,919
Shareholder servicing fees - Class B (Note 3) -- 10,077 47,471
Amortization of organization and offering costs (Note 2) 4,190 4,190 4,190
Other expenses 910 4,501 8,038
Total expenses before reimbursement 100,062 168,259 496,205
Less reimbursement (Note 3) (66,948) (67,532) (52,759)
Total expenses net of reimbursement/waiver 33,114 100,727 443,446
NET INVESTMENT INCOME (LOSS) 188,027 472,953 614,413
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 2)
Net realized gain (loss) on investments (including net
realized gain on foreign currency related transactions) -- (137,954) (322,444)
Net change in unrealized appreciation (depreciation)
on investments (including a net unrealized appreciation
(depreciation) on foreign currency related transactions) -- (205,763) 2,960,671
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS -- (343,717) 2,638,227
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 188,027 $ 129,236 $ 3,252,640
<FN>
(1) Fund commenced investment operations on February 29, 2000.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
High Income Growth and Income Capital Appreciation Emerging Growth International Stock
Fund Fund Fund Fund (1) Fund
<S> <C> <C> <C> <C>
$ 4,978 $ 682,743 $ 158,414 $ 5,422 $ 350,432
882,650 95,066 49,787 35,923 42,671
-- -- -- (86) (33,293)
887,628 777,809 208,201 41,259 359,810
48,904 265,961 174,695 26,819 201,554
50,391 77,810 61,206 16,625 59,037
12,222 15,579 11,591 5,547 10,846
5,079 5,551 5,694 3,163 47,464
6,145 10,138 7,269 2,714 7,239
1,307 6,025 3,027 784 2,641
600 2,817 1,307 171 1,212
36,639 253,666 112,229 2,173 14,821
10,016 36,336 20,822 8,215 43,049
12,213 84,555 37,410 724 4,941
4,190 4,190 4,190 4,251 4,190
6,421 5,353 3,642 524 15,875
194,127 767,981 443,082 71,710 412,869
(68,568) (30,753) (51,349) (26,625) (90,764)
125,559 737,228 391,733 45,085 322,105
762,069 40,581 (183,532) (3,826) 37,705
(132,106) (1,751,538) (261,497) (2,273,079) (2,976,078)
(238,525) 9,308,520 5,419,243 (1,111,399) 1,396,394
(370,631) 7,556,982 5,157,746 (3,384,478) (1,579,684)
$ 391,438 $ 7,597,563 $ 4,974,214 $ (3,388,304) $ (1,541,979)
</TABLE>
<PAGE>
Statements of Changes in Net Assets For the Period Ended April 30, 2000
<TABLE>
<CAPTION>
Cash Reserves Bond
Fund Fund
Six Months Ended Six Months Ended
April 30, 2000 Year Ended April 30, 2000 Year Ended
(unaudited) October 31, 1999 (unaudited) October 31, 1999
<S> <C> <C> <C> <C>
NET ASSETS at beginning of period $ 7,981,951 $ 5,233,081 $ 15,498,925 $ 7,022,297
Increase in net assets from operations:
Net investment income (loss) 188,027 262,711 472,953 578,153
Net realized gain (loss) -- 42 (137,954) (341,357)
Net change in unrealized appreciation (depreciation) -- -- (205,763) (89,553)
Net increase (decrease) in net assets from operations 188,027 262,753 129,236 147,243
Distributions to shareholders from:
Net investment income
Class A (117,464) (193,602) (244,492) (345,079)
Class B (70,514) (69,068) (228,736) (233,074)
Net realized gains
Class A -- -- -- (28,262)
Class B -- -- -- (9,835)
Total distributions (187,978) (262,670) (473,228) (616,250)
Capital Stock transactions:
Class A Shares
Shares sold 1,218,558 1,463,270 703,650 3,599,208
Issued to shareholders in reinvestment of
distributions 95,771 192,249 198,287 372,980
Shares redeemed (1,079,617) (1,513,071) (1,240,586) (514,328)
Net increase (decrease) from capital stock
transactions 234,712 142,448 (338,649) 3,457,860
Class B Shares
Shares sold 1,992,226 4,494,991 2,118,162 6,343,163
Issued to shareholders in reinvestment of
distributions 58,770 68,769 174,789 228,798
Shares redeemed (2,848,781) (1,957,421) (1,201,405) (1,084,186)
Net increase (decease) from capital stock
transactions (797,785) 2,606,339 1,091,546 5,487,775
Total increase (decrease) in net assets (563,024) 2,748,870 408,905 8,476,628
NET ASSETS at end of period (including line A) $ 7,418,927 $ 7,981,951 $ 15,907,830 $ 15,498,925
(A) Undistributed (distribution in excess of)
net investment income $ 29,771 $ 29,722 $ 12,080 $ 12,355
OTHER INFORMATION:
Capital Share transactions:
Class A Shares
Shares sold 1,218,547 1,467,709 73,265 361,356
Issued to shareholders in reinvestment of distributions 95,760 193,165 20,634 37,674
Shares redeemed (1,079,595) (1,517,727) (128,985) (51,766)
Net increase (decrease) in shares outstanding 234,712 143,147 (35,086) 347,264
Class B Shares
Shares sold 1,992,227 4,542,489 219,566 637,845
Issued to shareholders in reinvestment of distributions 58,770 68,511 18,189 23,198
Shares redeemed (2,848,781) (2,004,599) (125,066) (109,947)
Net increase (decrease) in shares outstanding (797,784) 2,606,401 112,689 551,096
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Balanced High Income Growth and Income
Fund Fund Fund
Six Months Ended Six Months Ended Six Months Ended
April 30, 2000 Year Ended April 30, 2000 Year Ended April 30, 2000 Year Ended
(unaudited) October 31, 1999 (unaudited) October 31, 1999 (unaudited) October 31, 1999
<S> <C> <C> <C> <C> <C>
$ 46,560,118 $ 23,109,847 $ 17,278,309 $ 9,677,254 $ 81,501,997 $ 25,577,029
614,413 722,479 762,069 1,198,240 40,581 56,087
(322,444) 129,310 (132,106) (327,673) (1,751,538) (118,122)
2,960,671 3,512,277 (238,525) 38,689 9,308,520 5,867,753
3,252,640 4,364,066 391,438 909,256 7,597,563 5,805,718
(232,034) (431,006) (359,674) (639,267) (74,556) (104,915)
(386,604) (291,473) (401,431) (558,973) (35,566) --
(105,600) (11,733) -- (18,678) (39,692) (10,773)
(237,904) (20,814) -- (6,615) (89,517) (29,659)
(962,142) (755,026) (761,105) (1,223,533) (239,331) (145,347)
5,488,440 22,621,347 569,433 2,118,956 8,709,227 17,647,334
293,562 439,832 281,002 645,554 113,775 114,550
(2,986,063) (25,576,825) (592,336) (871,164) (3,333,467) (5,460,361)
2,795,939 (2,515,646) 258,099 1,893,346 5,489,535 12,301,523
14,837,664 23,989,683 1,934,412 7,053,287 26,034,683 40,923,793
552,166 304,240 254,059 462,448 123,942 29,580
(3,500,547) (1,937,046) (1,385,351) (1,493,749) (5,053,776) (2,990,299)
11,889,283 22,356,877 803,120 6,021,986 21,104,849 37,963,074
16,975,720 23,450,271 691,552 7,601,055 33,952,616 55,924,968
$ 63,535,838 $ 46,560,118 $ 17,969,861 $ 17,278,309 $ 115,454,613 $ 81,501,997
$ (2,259) $ 1,966 $ 40,151 $ 39,187 $ (69,540) $ 1
442,310 2,004,630 62,875 227,759 639,010 1,367,430
23,947 38,008 32,480 69,992 8,392 9,102
(242,237) (2,240,465) (66,171) (93,192) (243,378) (461,584)
224,020 (197,827) 29,184 204,559 404,024 914,948
1,194,021 2,031,097 215,993 753,638 1,920,980 3,142,758
44,753 25,453 28,399 50,649 9,343 2,458
(281,653) (159,197) (153,552) (159,042) (372,176) (233,327)
957,121 1,897,353 90,840 645,245 1,558,147 2,911,889
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets For the Period Ended April 30, 2000
Capital Appreciation Emerging Growth
Fund Fund (1)
Six Months Ended Period Ended
April 30, 2000 Year Ended April 30, 2000
(unaudited) October 31, 1999 (unaudited)
<S> <C> <C> <C>
NET ASSETS at beginning of period $ 36,824,494 $ 20,435,388 $ 20,000,000
Increase in net assets from operations:
Net investment income (loss) (183,532) (159,055) (3,826)
Net realized gain (loss) (261,497) (390,468) (2,273,079)
Net change in unrealized appreciation (depreciation) 5,419,243 4,901,372 (1,111,399)
Net increase (decrease) in net assets from operations 4,974,214 4,351,849 (3,388,304)
Distributions to shareholders from:
Net investment income
Class A -- -- --
Class B -- -- --
Net realized gains
Class A (14,447) (10,034) --
Class B (26,348) -- --
Total distributions (40,795) (10,034) --
Capital Stock transactions:
Class A Shares
Shares sold 6,191,071 8,326,212 2,137,283
Issued to shareholders in reinvestment of distributions 14,391 10,009 --
Shares redeemed (1,250,267) (10,439,625) (24,342)
Net increase (decrease) from capital stock transactions 4,955,195 (2,103,404) 2,112,941
Class B Shares
Shares sold 11,984,101 15,597,190 3,593,391
Issued to shareholders in reinvestment of distributions 26,124 -- --
Shares redeemed (2,249,680) (1,446,495) (48,051)
Net increase from capital stock transactions 9,760,545 14,150,695 3,545,340
Total increase in net assets 19,649,159 16,389,106 2,269,977
NET ASSETS at end of period (including line A) $ 56,473,653 $ 36,824,494 $ 22,269,977
(A) Undistributed (distribution in excess of)
net investment income $ (183,497) $ 35 $ (3,826)
OTHER INFORMATION:
Capital Share transactions:
Class A Shares
Shares sold 413,714 645,448 222,492
Issued to shareholders in reinvestment of distributions 997 815 --
Shares redeemed (82,924) (893,051) (2,395)
Net increase (decrease) in shares outstanding 331,787 (246,788) 220,097
Class B Shares
Shares sold 808,526 1,219,845 380,341
Issued to shareholders in reinvestment of distributions 1,827 -- --
Shares redeemed (151,919) (120,110) (5,309)
Net increase in shares outstanding 658,434 1,099,735 375,032
<FN>
(1) Fund commenced investment operations on February 29, 2000.
</FN>
</TABLE>
<PAGE>
International Stock
Fund
Six Months Ended
April 30, 2000 Year Ended
(unaudited) October 31, 1999
$ 36,540,092 $ 29,005,768
--------------- ----------------
37,705 416,820
(2,976,078) 2,602,484
1,396,394 1,996,743
--------------- ----------------
(1,541,979) 5,016,047
--------------- ----------------
(440,689) (402,357)
(23,618) (10,711)
(2,379,485) (1,172,577)
(255,311) (66,391)
--------------- ----------------
(3,099,103) (1,652,036)
--------------- ----------------
1,305,252 1,024,723
2,819,698 1,575,095
(130,654) (192,494)
--------------- ----------------
3,994,296 2,407,324
--------------- ----------------
1,688,510 1,965,892
276,978 76,883
(357,127) (279,786)
--------------- ----------------
1,608,361 1,762,989
--------------- ----------------
961,575 7,534,324
--------------- ----------------
$ 37,501,667 $ 36,540,092
=============== ================
$ (159,513) $ 267,089
=============== ================
118,867 93,829
255,360 151,888
(12,030) (18,840)
--------------- ----------------
362,197 226,877
--------------- ----------------
154,438 180,336
25,337 7,421
(32,518) (26,738)
--------------- ----------------
147,257 161,019
--------------- ----------------
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights for a Share of Beneficial Interest Outstanding Throughout each Period
CASH RESERVES FUND
Class A Class B
Six Months Ended Six Months Ended
4/30/00 Year Ended Inception(a) to 4/30/00 Year Ended Inception(a) to
(unaudited) 10/31/99 10/31/98 (unaudited) 10/31/99 10/31/98
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations:
Net investment income 0.03 0.05 0.04 0.02 0.04 0.03
Total from investment operations 0.03 0.05 0.04 0.02 0.04 0.03
Less Distributions:
Distributions from net investment income (0.03) (0.05) (0.04) (0.02) (0.04) (0.03)
Total distributions (0.03) (0.05) (0.04) (0.02) (0.04) (0.03)
Net increase in net asset value -- -- -- -- -- --
Net Asset Value, End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total Return+ 2.62% (2) 4.60% 4.21% (2) 2.24% (2) 3.81% 3.50%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) $ 4,715 $ 4,481 $ 4,339 $ 2,704 $ 3,501 $ 894
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor 2.29% (1) 2.63% 4.76% (1) 3.04% (1) 3.38% 5.51%(1)
After reimbursement of expenses by Advisor 0.55% (1) 0.55% 0.55% (1) 1.30% (1) 1.30% 1.30%(1)
Ratios of net investment income to average
net assets:
Before reimbursement of expenses by Advisor 5.21% (1) 2.33% 0.67% (1) 4.46% (1) 1.84% (0.08)%(1)
After reimbursement of expenses by Advisor 6.95% (1) 4.41% 4.88% (1) 6.20% (1) 3.92% 4.13%(1)
BOND FUND
Net Asset Value, Beginning of Period $ 9.74 $ 10.14 $ 10.00 $ 9.75 $ 10.14 $ 10.00
Income from Investment Operations:
Net investment income 0.31 0.51 0.45 0.27 0.44 0.39
Net realized and unrealized gain (loss)
on investments (0.21) (0.35) 0.14 (0.21) (0.35) 0.14
Total from investment operations 0.10 0.16 0.59 0.06 0.09 0.53
Less Distributions:
Distributions from net investment income (0.31) (0.51) (0.45) (0.27) (0.44) (0.39)
Distributions from capital gains -- (0.05) -- -- (0.04) --
Total distributions (0.31) (0.56) (0.45) (0.27) (0.48) (0.39)
Net increase (decrease) in net asset value (0.21) (0.40) (0.14) (0.21) (0.39) 0.14
Net Asset Value, End of Period $ 9.53 $ 9.74 $ 10.14 $ 9.54 $ 9.75 $ 10.14
Total Return+ 1.04% (2) 1.60% 6.08%(2) 0.76%(2) 0.94% 5.36%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) $ 7,485 $ 7,991 $ 4,797 $ 8,423 $ 7,508 $ 2,225
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor 1.76%(1) 2.02% 4.83%(1) 2.51%(1) 2.77% 5.58%(1)
After reimbursement of expenses by Advisor 0.90%(1) 0.90% 0.60%(1) 1.65%(1) 1.65% 1.35%(1)
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor 5.57%(1) 4.06% 1.14%(1) 4.82%(1) 3.46% 0.39%(1)
After reimbursement of expenses by Advisor 6.43%(1) 5.18% 5.37%(1) 5.68%(1) 4.58% 4.62%(1)
Portfolio Turnover 266% 725% 95% 266% 725% 95%
<FN>
(1) Annualized
(2) Not annualized.
+ Total return without applicable sales charge.
(a) Fund commenced investment operations on December 29, 1997.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights for a Share of Beneficial Interest Outstanding Throughout each Period 51
BALANCED FUND
Class A Class B
Six Months Ended Six Months Ended
4/30/00 Year Ended Inception(a) to 4/30/00 Year Ended Inception(a) to
(unaudited) 10/31/99 10/31/98 (unaudited) 10/31/99 10/31/98
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 12.05 $ 10.68 $ 10.00 $ 12.05 $ 10.68 $ 10.00
Income from Investment Operations:
Net investment income 0.17 0.27 0.21 0.13 0.18 0.14
Net realized and unrealized gain on
investments 0.62 1.38 0.68 0.62 1.38 0.68
Total from investment operations 0.79 1.65 0.89 0.75 1.56 0.82
Less Distributions:
Distributions from net investment income (0.17) (0.27) (0.21) (0.12) (0.18) (0.14)
Distributions from capital gains (0.08) (0.01) -- (0.08) (0.01) --
Total distributions (0.25) (0.28) (0.21) (0.20) (0.19) (0.14)
Net increase in net asset value 0.54 1.37 0.68 0.55 1.37 0.68
Net Asset Value, End of Period $ 12.59 $ 12.05 $ 10.68 $ 12.60 $ 12.05 $ 10.68
Total Return+ 6.72%(2) 15.58% 8.92%(2) 6.32%(2) 14.72% 8.24%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) $ 18,805 $ 15,297 $ 15,670 $ 44,731 $ 31,263 $ 7,440
Ratios of expenses to average net assets:
Before reimbursement of expense by Advisor 1.29%(1) 1.47% 3.40%(1) 2.04%(1) 2.22% 4.15%(1)
After reimbursement of expenses by Advisor 1.10%(1) 1.10% 1.10%(1) 1.85%(1) 1.85% 1.85%(1)
Ratios of net investment income (loss) to
average net assets:
Before reimbursement of expenses by Advisor 2.58%(1) 1.99% 0.23%(1) 1.83%(1) 1.25% (0.52)%(1)
After reimbursement of expenses by Advisor 2.77%(1) 2.36% 2.53%(1) 2.02%(1) 1.62% 1.78%(1)
Portfolio Turnover 134% 349% 60% 134% 349% 60%
HIGH INCOME FUND
Net Asset Value, Beginning of Period $ 8.88 $ 8.85 $ 10.00 $ 8.90 $ 8.85 $ 10.00
Income from Investment Operations:
Net investment income 0.40 0.80 0.61 0.36 0.74 0.55
Net realized and unrealized gain (loss)
on investments (0.18) 0.06 (1.15) (0.18) 0.06 (1.15)
Total from investment operations 0.22 0.86 (0.54) 0.18 0.80 (0.60)
Less Distributions:
Distributions from net investment income (0.40) (0.80) (0.61) (0.36) (0.74) (0.55)
Distributions from capital gains -- (0.03) -- -- (0.01) --
Total distributions (0.40) (0.83) (0.61) (0.36) (0.75) (0.55)
Net increase (decrease) in net asset value (0.18) 0.03 (1.15) (0.18) 0.05 (1.15)
Net Asset Value, End of Period $ 8.70 $ 8.88 $ 8.85 $ 8.72 $ 8.90 $ 8.85
Total Return+ 2.45%(2) 9.69% (5.78)%(2) 1.96%(2) 9.02% (6.39)%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) $ 7,974 $ 7,879 $ 6,045 $ 9,996 $ 9,399 $ 3,632
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor 1.77%(1) 1.97% 3.52%(1) 2.72%(1) 2.52% 4.27%(1)
After reimbursement of expenses by Advisor 1.00%(1) 1.00% 1.00%(1) 1.75%(1) 1.75% 1.75%(1)
Ratios of net investment income to average
net assets:
Before reimbursement of expenses by Advisor 8.22%(1) 7.75% 4.95%(1) 7.47%(1) 7.16% 4.20%(1)
After reimbursement of expenses by Advisor 8.99%(1) 8.72% 7.47%(1) 8.24%(1) 8.13% 6.72%(1)
Portfolio Turnover 30% 48% 56% 30% 48% 56%
<FN>
(1) Annualized.
(2) Not annualized.
+ Total return without applicable sales charge.
(a) Fund commenced investment operations on December 29, 1997.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights for a Share of Beneficial Interest Outstanding Throughout each Period
GROWTH AND INCOME FUND
Class A Class B
Six Months Ended Six Months Ended
4/30/00 Year Ended Inception(a) to 4/30/00 Year Ended Inception(a) to
(unaudited) 10/31/99 10/31/98 (unaudited) 10/31/99 10/31/98
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 13.21 $ 10.88 $ 10.00 $ 13.18 $ 10.88 $ 10.00
Income from Investment Operations:
Net investment income (loss) 0.04 0.09 0.07 (0.01) (0.01) 0.01
Net realized and unrealized gain on
investments 1.02 2.33 0.89 1.02 2.33 0.89
Total from investment operations 1.06 2.42 0.96 1.01 2.32 0.90
Less Distributions:
Distributions from net investment income (0.03) (0.09) (0.07) -- -- (0.01)
Distributions from capital gains (0.02) -- -- (0.02) (0.02) --
Distributions in excess of net investment
income -- -- (0.01) -- -- (0.01)
Total distributions (0.05) (0.09) (0.08) (0.02) (0.02) (0.02)
Net increase in net asset value 1.01 2.33 0.88 0.99 2.30 0.88
Net Asset Value, End of Period $ 14.22 $ 13.21 $ 10.88 $ 14.17 $ 13.18 $ 10.88
Total Return+ 8.08%(2) 22.33% 9.57%(2) 7.73%(2) 21.32% 8.97%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) $ 33,355 $ 25,646 $ 11,169 $ 82,100 $ 55,856 $ 14,408
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor 1.06%(1) 1.25% 2.41%(1) 1.81%(1) 2.00% 3.16%(1)
After reimbursement of expenses by Advisor 1.00%(1) 1.00% 1.00%(1) 1.75%(1) 1.75% 1.75%(1)
Ratios of net investment income (loss) to average
net assets:
Before reimbursement of expenses by Advisor 0.55%(1) 0.35% (0.60)%(1) (0.20)%(1) (0.40)% (1.35)%(1)
After reimbursement of expenses by Advisor 0.61%(1) 0.60% 0.81%(1) (0.14)%(1) (0.15)% 0.06%(1)
Portfolio Turnover 8% 19% 5% 8% 19% 5%
CAPITAL APPRECIATION FUND
Net Asset Value, Beginning of Period $ 13.70 $ 11.04 $ 10.00 $ 13.54 $ 10.98 $ 10.00
Income from Investment Operations:
Net investment income (loss) (0.02) (0.00)* 0.01 (0.09) (0.12) (0.02)
Net realized and unrealized gain on investments 1.75 2.68 1.04 1.75 2.68 1.01
Total from investment operations 1.73 2.68 1.05 1.66 2.56 0.99
Less Distributions:
Distributions from net investment income -- -- -- -- -- --
Distributions from capital gains (0.01) (0.02) -- (0.01) -- --
Distributions in excess of net investment income -- -- (0.01) -- -- (0.01)
Total distributions (0.01) (0.02) (0.01) (0.01) --
(0.01)
Net increase in net asset value 1.72 2.66 1.04 1.65 2.56
0.98
Net Asset Value, End of Period $ 15.42 $ 13.70 $ 11.04 $ 15.19 $ 13.54 $ 10.98
Total Return+ 12.66%(2) 24.29% 10.51%(2) 12.30%(2) 23.32% 9.91%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) $ 20,043 $ 13,262 $ 13,410 $ 36,431 $ 23,563 $7,025
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor 1.42%(1) 1.71% 3.28%(1) 2.17%(1) 2.46% 4.03%(1)
After reimbursement of expenses by Advisor 1.20%(1) 1.20% 1.20%(1) 1.95%(1) 1.95% 1.95%(1)
Ratios of net investment income (loss) to
average net assets:
Before reimbursement of expenses by Advisor (0.53)%(1) (0.68) (1.97)(1) (1.28)(1) (1.46)% (2.72)(1)
After reimbursement of expenses by Advisor (0.31)(1) (0.05)% 0.11%(1) (1.06)(1) (1.03)% (0.64)(1)
Portfolio Turnover 6% 68% 10% 6% 68% 10%
<FN>
(1) Annualized.
(2) Not annualized.
+ Total return without applicable sales charge.
(a) Fund commenced investment operations on December 29, 1997.
* Amount represents less than $(0.01).
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights for a Share of Beneficial Interest Outstanding Throughout each Period
EMERGING GROWTH FUND
Class A Class B
Inception(b) to Inception(b) to
4/30/00 4/30/00(b)
(unaudited) (unaudited)
<S> <C> <C>
Net Asset Value, Beginning of Period $ 10.00 $ 10.00
Income from Investment Operations:
Net investment income -- --
Net realized and unrealized gain on investments (1.42) (1.42)
Total from investment operations (1.42) (1.42)
Net decrease in net asset value (1.42) (1.42)
Net Asset Value, End of Period $ 8.58 $ 8.58
Total Return+ (14.20)%(2) (14.20)%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) $ 19,053 $ 3,217
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor 1.94%(1) 2.69%(1)
After reimbursement of expenses by Advisor 1.20%(1) 1.95%(1)
Ratios of net investment income (loss) to average net assets:
Before reimbursement of expenses by Advisor (0.79)%(1) (1.54)%(1)
After reimbursement of expenses by Advisor (0.05)%(1) (0.80)%(1)
Portfolio Turnover 52% 52%
INTERNATIONAL STOCK FUND
Six Months Ended Six Months Ended
4/30/00 Year Ended Inception(a) to 4/30/00 Year Ended Inception(a) to
(unaudited) 10/31/99 10/31/98 (unaudited) 10/31/99 10/31/98
Net Asset Value, Beginning of Period $ 11.45 $ 10.34 $ 10.00 $ 11.38 $ 10.28 $ 10.00
Income from Investment Operations:
Net investment income (loss) 0.02 0.14 0.08 (0.02) 0.05 0.03
Net realized and unrealized gain (loss)
on investments (0.38) 1.56 0.27 (0.38) 1.56 0.26
Total from investment operations (0.36) 1.70 0.35 (0.40) 1.61 0.29
Less Distributions:
Distributions from net investment income (0.14) (0.14) (0.01) (0.07) (0.05) (0.01)
Distributions from capital gains (0.82) (0.45) -- (0.82) (0.46) --
Total distributions (0.96) (0.59) (0.01) (0.89) (0.51) (0.01)
Net increase (decrease) in net asset value (1.32) 1.11 0.34 (1.29) 1.10 0.28
Net Asset Value, End of Period $ 10.13 $ 11.45 $ 10.34 $ 10.09 $ 11.38 $ 10.28
Total Return+ (3.78)%(2) 17.00% 3.60%(2) (4.12)%(2) 16.09% 2.90%(2)
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's) $ 33,066 $ 33,214 $ 27,656 $ 4,436 $ 3,326 $ 1,350
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor 2.08%(1) 2.18% 2.76%(1) 2.83%(1) 2.93% 3.51%(1)
After reimbursement of expenses by Advisor 1.60%(1) 1.60% 1.60%(1) 2.35%(1) 2.35% 2.35%(1)
Ratios of net investment income (loss) to
average net assets:
Before reimbursement of expenses by Advisor (0.20)%(1) 0.72% (0.01)%(1) (0.95)%(1) 0.05% (0.76)%(1)
After reimbursement of expenses by Advisor 0.28%(1) 1.30% 1.15%(1) (0.47)%(1) 0.63% 0.40%(1)
Portfolio Turnover 68% 57% 60% 68% 57% 60%
<FN>
(1) Annualized.
(2) Not annualized.
+ Total return without applicable sales charge.
(a) Fund commenced investment operations on December 29, 1997.
(b) Fund commenced investment operations on February 29, 2000.
</FN>
</TABLE>
<PAGE>
Notes to Financial Statements (Unaudited)
1. ORGANIZATION
MEMBERS Mutual Funds, a Delaware Business Trust (the "Trust"), is registered
under the Investment Company Act of 1940, as amended (the "1940 Act") as an
open-end, management investment company. As of the date of this report, the
Trust offers eight Funds (individually, a "Fund," collectively, the "Funds")
each with two classes of shares: Class A and Class B. Each class of shares
represents an interest in the assets of the respective Fund and has identical
voting, dividend, liquidation and other rights, except that each class of shares
bears its own distribution fees and its proportional share of fund level
expenses, is subject to its own sales charges, if any, and has exclusive voting
rights on matters pertaining to the Rule 12b-1 plan as it relates to that class.
The accompanying financial statements include the Cash Reserves Fund, Bond Fund,
Balanced Fund, High Income Fund, Growth and Income Fund, Capital Appreciation
Fund, Emerging Growth Fund and the International Stock Fund.
The only transactions of the Funds prior to commencement of operations were the
sale of 49,000 Class A shares and 1,000 Class B shares of Cash Reserves Fund at
$1 per share and the sale of 4,900 Class A shares and 100 Class B shares of Bond
Fund, Balanced Fund, High Income Fund, Growth and Income Fund, Capital
Appreciation Fund and International Stock Fund at $10 per share on November 10,
1997.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles 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 during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by each Fund in the
preparation of its financial statements
Portfolio Valuation: Investments in securities which are traded on a recognized
stock exchange or for which price quotations are available will normally be
valued on the basis of market quotations furnished by a pricing service which
has been approved by The Board of Trustees. Short-term obligations that mature
in sixty days or less are valued at amortized cost, which constitutes fair
value. All other securities and other assets are appraised at their fair values
as determined in good faith by and under the general supervision of The Board of
Trustees.
Security Transactions and Investment Income: Security transactions are accounted
for on a trade date basis. Net realized gains or losses on sales are determined
by the identified cost method. Interest income is recorded on the accrual basis.
Dividend income is recorded on ex-dividend date.
Federal Income Taxes: It is each Fund's intention to qualify as a regulated
investment company for federal income tax purposes by complying with the
appropriate provisions of the Internal Revenue Code of 1986, as amended.
Accordingly, no provisions for federal income taxes are required in the
accompanying financial statements.
Classes: Class-specific expenses are borne by that class. Income, non-class
specific expenses, and realized and unrealized gains/losses are allocated to the
respective classes on the basis of relative net assets.
Expenses: Expenses that are directly related to one of the Funds are charged
directly to that Fund. Other operating expenses of the Fund are prorated to the
Funds on the basis of relative net assets.
Organization and Offering Costs: Each Fund bears all costs in connection with
its organization, including registration and notification fees and expenses with
respect to the sale of their shares under federal and state securities
regulation. These organization and offering costs are being amortized on a
straight-line basis over five years and one year, respectively. In the event any
of the initial shares of a Fund are redeemed by any holder thereof during the
amortization period, the proceeds of such redemptions will be reduced by an
amount equal to the pro-rata portion of unamortized deferred organizational
expenses in the same proportion as the number of shares being redeemed bears to
the number of initial shares of such Fund outstanding at the time of such
redemption. To the extent that proceeds of the redemptions are less than such
pro-rata portion of any unamortized organizational expenses, CIMCO has agreed to
reimburse the Fund promptly.
Repurchase Agreements: Each Fund may engage in repurchase agreements. In a
repurchase agreement, a security is purchased for a relatively short period
(usually not more than 7 days) subject to the obligation to sell it back to the
issuer at a fixed time and price plus accrued interest. The Funds will enter
into repurchase agreements only with member banks of the Federal Reserve System
and with "primary dealers" in U.S. Government securities.
Foreign Currency Transactions: The books and records are maintained in U.S.
dollars. Foreign currency amounts are translated into U.S. dollars on the
following basis:
(1) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(2) purchases and sales of investment securities, income, and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The High Income and International Stock Funds report certain foreign
currency-related transactions as components of realized gains or losses for
financial reporting purposes, whereas such components are treated as ordinary
income for federal income tax purposes.
The Funds do not isolate the portion of gains and losses on investments in
securities that is due to changes in the foreign exchange rates from that which
is due to change in market prices of securities. Such amounts are categorized as
gain or loss on investments for financial reporting purposes.
Forward Foreign Currency Exchange Contracts: The High Income and International
Stock Funds may each purchase or sell forward foreign currency contracts for
defensive or hedging purposes when the Fund's Investment Advisor anticipates
that the foreign currency will appreciate or depreciate in value. The Funds
realize a gain or a loss at the time the forward contracts are closed out or
offset by a matching contract.
Futures Contracts: The Funds (other than the Cash Reserves Fund) may purchase
and sell futures contracts and purchase and write options on futures contracts.
Cash or securities are deposited with brokers in order to establish and maintain
a position. Subsequent payments made or received by the Fund based on the daily
change in the market value of the position are recorded as unrealized gains or
losses until the contract is closed out, at which time the gains or losses are
realized.
3. ADVISORY, ADMINISTRATION AND DISTRIBUTION AGREEMENTS
The Trust has entered into an Investment Advisory Agreement with CIMCO Inc. (the
"Investment Advisor"). For its investment advisory services to the Portfolios,
CIMCO is entitled to receive a fee, which is calculated daily and paid monthly,
at an annual rate based upon the following percentages of average daily net
assets: 0.40% for the Cash Reserves Fund; 0.50% for the Bond Fund; 0.65% for the
Balanced Fund; 0.55% for the High Income Fund and Growth and Income Fund; 0.75%
for the Capital Appreciation Fund; 0.75% for the Emerging Growth Fund and 1.05%
for the International Stock Fund. The Investment Advisor has entered into
Subadvisor Agreements for the management of the investments of the High Income
Fund, the Emerging Growth Fund, and the International Stock Fund. The Investment
Advisor is solely responsible for the payment of all fees to the Subadvisors.
The Subadvisors for these funds are Massachusetts Financial Services Company for
the High Income Fund and Emerging Growth Fund and IAI International Limited and
Lazard Asset Management for the International Stock Fund.
The Investment Advisor contractually agrees to waive a portion of its fees and
to reimburse the Funds for certain expenses so that total expenses will not
exceed certain expense limitations. The Investment Advisor has agreed to waive
fees and/or reimburse expenses with respect to the Funds in order that total
expenses will not exceed the following amounts:
Fund Class A Class B
-----------------------------------------------------
Cash Reserves Fund 0.55% 1.30%
Bond Fund 0.90% 1.65%
Balanced Fund 1.10% 1.85%
High Income Fund 1.00% 1.75%
Growth and Income Fund 1.00% 1.75%
Capital Appreciation Fund 1.20% 1.95%
Emerging Growth Fund 1.20% 1.95%
International Stock Fund 1.60% 2.35%
For the period ended April 30, 2000, the Investment Advisor reimbursed expenses
of $66,948 for the Cash Reserves Fund, $67,532 for the Bond Fund, $52,759 for
the Balanced Fund, $68,568 for the High Income Fund, $30,753 for the Growth and
Income Fund, $51,349 for the Capital Appreciation Fund, $26,625 for the Emerging
Growth Fund and $90,764 for the International Stock Fund.
Any reimbursements or fee reductions made by the Investment Advisor to a Fund
are subject to repayment by the Fund within the subsequent three years, to the
extent that the Fund is able to make the repayment within its expense cap. Since
December 29, 1997 through April 30, 2000, the Investment Advisor reimbursed
expenses of $341,243 for the Cash Reserves Fund, $355,708 for the Bond Fund,
$339,943 for the Balanced Fund, $365,094 for the High Income Fund, $311,939 for
the Growth and Income Fund, $332,040 for the Capital Appreciation Fund, $26,625
for the Emerging Growth Fund and $508,451 for the International Stock Fund.
The Trust and PFPC Inc. ("PFPC"), are parties to an agreement under which PFPC
provides administration services for a fee calculated daily and paid monthly, at
the annual rate of 0.15% of the first $500 million of the combined average daily
net assets and 0.12% of the next $500 million of the combined average daily net
assets and 0.09% of the combined average daily net assets over $1 billion.
Currently, at April 30, 2000, the Funds are at the minimum of $3,500 per Fund,
per Class, per month until aggregate net assets reach $448 million.
In addition, PFPC also provides certain fund accounting, custody administration
and transfer agency services pursuant to certain fee arrangements. Pursuant to
such fee arrangements, PFPC compensates the Trust's custodian bank, State
Street, for its services in addition to the fees PFPC receives.
CUNA Brokerage Services, Inc. (CUNA Brokerage) serves as distributor of the
Funds. The Trust adopted Distribution Plans (the "Plans") with respect to the
Trust's Class A and Class B shares pursuant to Rule 12b-1 under the 1940 Act.
Under the Plans, the Trust will pay service fees for Class A and Class B shares
at an aggregate annual rate of 0.25% of each Fund's daily net assets
attributable to the respective class of shares for all Funds except the Cash
Reserves Fund. The Trust will also pay distribution fees for Class B shares at
an aggregate annual rate of 0.75% of each Fund's daily net assets attributable
to Class B. The distribution fees are used to reimburse CUNA Brokerage for its
distribution expenses with respect to Class B shares only, including but not
limited to: (1) initial and ongoing sales compensation to selling brokers and
others engaged in the sale of Fund shares, (2) marketing, promotional and
overhead expenses incurred in connection with the distribution of Fund shares,
and (3) interest expenses on unreimbursed distribution expenses. The service
fees will be used to compensate selling brokers and others for providing
personal and account maintenance services to shareholders.
In addition to distribution fees, CUNA Brokerage received sales charges paid by
the purchasers or redeemers of the Funds' shares. For the period ended April 30,
2000, sales charges received by CUNA Brokerage were as follows:
Cash Reserves $79,126
Bond 125,859
Balanced 847,207
High Income 111,392
Growth and Income 1,456,558
Capital Appreciation 691,950
Emerging Growth 189,478
International Stock 100,074
Certain officers and trustees of the Funds are also officers of the Trust. The
Funds do not compensate its officers or affiliated trustees. Effective September
4, 1997, the Trust pays each unaffiliated trustee $1,000 per Board of Trustees
meeting attended.
4. DIVIDENDS FROM NET INVESTMENT INCOME AND DISTRIBUTIONS OF CAPITAL GAINS
With respect to the Cash Reserves Fund, Bond Fund, and High Income Fund,
dividends from net investment income are declared daily and net realized gains
from investment transactions, if any, are distributed to shareholders annually.
The Balanced Fund declares dividends from net investment income monthly and net
realized gains from investment transactions, if any, are distributed to
shareholders annually. The Growth and Income Fund declares dividends from net
investment income quarterly and net realized gains from investment transactions,
if any, are distributed to shareholders annually. The Capital Appreciation Fund,
Emerging Growth Fund and the International Stock Fund declare dividends from net
investment income annually and net realized gains from investment transactions,
if any, are distributed to shareholders annually.
5. SECURITIES TRANSACTIONS
For the period ended April 30, 2000, aggregate cost of purchases and proceeds
from sales of securities, other than short-term investments, were as follows:
<TABLE>
<CAPTION>
U.S. Government Other Investment
Securities Securities
------------------------------ -----------------------------
Fund Purchases Sales Purchases Sales
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bond $ 22,951,333 $23,437,534 $ 17,043,761 $ 16,533,559
Balanced 43,940,889 42,851,413 38,301,801 26,124,161
High Income -- -- 4,892,649 5,241,970
Growth and Income -- -- 32,342,417 7,479,615
Capital Appreciation -- -- 15,976,567 2,842,688
Emerging Growth -- -- 32,381,765 9,997,454
International Stock -- -- 27,778,648 24,677,781
</TABLE>
At April 30, 2000, the aggregate gross unrealized appreciation (depreciation)
and net unrealized appreciation (depreciation) for all securities as computed on
a federal income tax basis for each fund were as follows:
Fund Appreciation (Depreciation) Net
--------------------------------------------------------------------
Bond $ 18,043 $ (251,113) $ (233,070)
Balanced 8,710,285 (1,829,781) 6,880,504
High Income 207,916 (1,496,269) (1,288,353)
Growth and Income 21,179,074 (5,962,609) 15,216,465
Capital Appreciation 13,264,792 (2,562,160) 10,702,632
Emerging Growth 631,603 (1,734,905) (1,103,302)
International Stock 4,749,744 (2,281,176) 2,468,568
6. FOREIGN SECURITIES
Each Fund may invest in foreign securities, although only the High Income Fund
and International Stock Fund anticipate having significant investments in such
securities. The International Stock Fund may invest all of its assets in foreign
securities and the High Income Fund may invest up to half of its assets in
foreign securities. No Fund will concentrate its investments in any particular
foreign country.
Foreign securities means securities that are: (1) issued by companies organized
outside the U.S. or whose principal operations are outside the U.S. ("foreign
issuers"), (2) issued by foreign governments or their agencies or
instrumentalities (also "foreign issuers"), (3) principally traded outside the
U.S., or (4) quoted or denominated in a foreign currency ("non-dollar
securities"). Foreign securities include ADR's, EDR's, GDR's, and foreign money
market securities.
7. FINANCIAL INSTRUMENTS
Investing in certain financial instruments including forward foreign currency
contracts and futures contracts involves risk other than that reflected in the
Statement of Assets and Liabilities. Risk associated with these instruments
include potential for an imperfect correlation between the movements in the
prices of instruments and the prices of the underlying securities and interest
rates, an illiquid secondary market for the instruments or inability of
counterparties to perform under the terms of the contracts, and changes in the
value of foreign currency relative to the U.S. dollar. The High Income Fund and
International Stock Fund enter into these contracts primarily to protect these
Funds from adverse currency movement.
8. CONCENTRATION OF RISK
The High Income Fund invests in securities offering high current income which
generally will be in the lower rating categories of recognized ratings agencies
(so-called "junk bonds"). These securities generally involve more credit risk
than securities in the higher rating categories. In addition, the trading market
for high yield securities may be relatively less liquid than the market for
higher-rated securities. The Fund generally invests at least 80% of its assets
in high yield securities.
9. CAPITAL SHARES AND AFFILIATED OWNERSHIP
Each fund is authorized to issue an unlimited number of shares of beneficial
interest with no par value. Each Fund currently offers two classes of shares,
Class A and Class B. At April 30, 2000, investments in the Funds by affiliates
were as follows:
<TABLE>
<CAPTION>
CUNA Mutual CUNA Mutual CUMIS
Fund Class Life Insurance Company Insurance Society Insurance Society, Inc.
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Reserves A $ 1,678,265 $ 1,677,146 $ --
Bond A 1,633,811 1,632,721 --
High Income A 5,296,119 -- --
Emerging Growth A 4,290,000 -- 12,869,142
Emerging Growth B -- -- 858
International Stock A 3,495,364 5,824,441 20,808,357
</TABLE>
