<PAGE>
PAGE 1
Retirement Annuity Mutual Funds
1995 annual report
(Icon of) A snowflake, shaking hands and a basket of apples.
Offers six funds with separate goals and objectives to provide
investment flexibility with no initial sales charge.
Managed by IDS Life Insurance Company
<PAGE>
PAGE 2
(Icon of) A snowflake, shaking hands and a basket of apples.
The Retirement Annuity Mutual Funds provide several alternatives to
consider for investment through your annuity contracts.
<PAGE>
PAGE 3
Contents
The purpose of this annual report is to tell investors how the
Funds performed.
1995 annual report
From the president 4
Capital Resource Fund
From the portfolio manager 5
Ten largest holdings 6
Long-term performance 7
International Equity Fund
From the portfolio manager 8
Ten largest holdings 9
Long-term performance 10
Aggressive Growth Fund
From the portfolio manager 11
Ten largest holdings 12
Long-term performance 13
Special Income Fund
From the portfolio managers 14
Ten largest holdings 15
Long-term performance 16
Moneyshare Fund
From the portfolio manager 17
Managed Fund
From the portfolio manager 18
Ten largest holdings 19
Long-term performance 20
All Funds
Independent auditors' report 21
Financial statements 22
Notes to financial statements 29
Investments in securities 46
<PAGE>
PAGE 4
To our contract owners
(Photo of) William R. Pearce, President of the Funds
From the president
The stock and bond markets advanced strongly in 1995, more than
making up for ground lost during much of last year. As a result,
the Retirement Annuity mutual funds that invest primarily in U.S.
securities registered solid gains for the fiscal year ended Aug.
31, 1995.
While the stock and bond markets can be volatile on a short-term
basis, they historically have provided attractive returns over the
long term. A focus on long-term financial objectives and a
balanced investment program are good guidelines for investing in
today's economic environment.
The Retirement Annuity group of mutual funds allows you to take
advantage of long-term opportunities through a variety of
investment avenues. Your financial advisor can tell you about the
role each Fund can play in meeting your long-term financial
objectives.
William R. Pearce
<PAGE>
PAGE 5
Capital Resource Fund
(Photo of) Curt Weaver, Portfolio manager
From the portfolio manager
A highly selective investment approach paid off well for Capital
Resource Fund during the past fiscal year -- September 1994 through
August 1995. The result was a 17% total return for contract-
owners. (This figure does not reflect expenses that apply to the
variable accounts or subaccounts or to the annuity contract.)
After struggling for most of 1994, the stock market began 1995 on a
positive note that it sustained almost throughout the next eight
months. The driving forces in the advance included strong
corporate profits, moderate economic growth, low inflation and
declining long-term interest rates -- a sure-fire formula for
rising stock prices.
Growth stocks -- the core of this portfolio -- found the
environment especially favorable, and mounted their best march in
recent years. As has been the case for the past couple of years,
the key to our recent success was buying stocks of fundamentally
sound, growing companies whose prices had fallen to attractively
low levels. In many cases, these were companies that were
undergoing restructuring or being acquired -- part of what we call
the "corporate consolidation" of America.
The Fund's holdings spanned a wide range of business sectors,
including pharmaceuticals, health-care services, financial
services, technology and medical devices. In addition, we
maintained a mix of both large and small-company stocks. This
broadly diversified approach also provided some cushion for the
Fund during periods when a particular stock group lost ground.
Also of benefit to the Fund was our decision to maintain a small
cash reserve, as we preferred to keep nearly all assets invested in
stocks.
Given the market's strong performance this year, it has become
increasingly difficult to find investments that aren't over-priced.
Nevertheless, we plan to hold to our disciplined approach as we try
to build on our recent progress.
Curt Weaver
<PAGE>
PAGE 6
<TABLE>
<CAPTION>
Your Fund's ten largest holdings
Capital Resource Fund
(Pie chart) The ten holdings listed here make up 20.88% of the Fund's net assets
Percent Value
(of Fund's net assets)(as of Aug. 31, 1995)
<S> <C> <C>
RJR Nabisco 3.11% $119,700,000
A major factor in the tobacco and food markets,
coming in first or second in most of the competing
categories.
Tele-Communications Cl A 2.51 96,662,500
The largest cable system operator, with over 10
million subscribers in the United States.
Approximately 70% of its business is regulated.
UNUM 2.50 96,000,000
Through various subsidiaries, a provider of a
broad range of disability, health, life insurance
and group pension products.
Reader's Digest Cl A 2.41 92,500,000
Publisher and direct mail marketer of magazines,
books, recorded music and other products worldwide.
Apple Computer 2.24 86,000,000
A leading manufacturer of personal computers and
related software and peripherals.
Novell 1.83 70,200,000
A solid leader in local area network (LAN)
software. The company's NetWare family of products
is a leader in the information sharing among work
groups and enterprises.
Cardinal Health 1.63 62,744,800
A wholesale distributor of pharmaceutical, surgical
and hospital supplies and health and beauty aids.
Wal-Mart Stores 1.60 61,562,500
The world's largest retailer that operates a chain
of discount department stores under the names Wal-
Mart, Sam's Club and Bud's Warehouse Outlets located
in 45 states and Puerto Rico.
Northern Trust 1.58 60,750,000
Investment processing services for financial
institutions and corporate and government clinics.
Block (H&R) 1.47 56,550,000
This company operates or franchises North America's
largest individual tax service. It also owns
CompuServe, a computer service company that provides
communication and information services, including
electronic mail, database access, software, etc.
Excludes short-term securities.
</TABLE>
<PAGE>
PAGE 7
Your Fund's long-term performance
Capital Resource Fund
How your $10,000 has grown in Capital Resource Fund
Average annual total return
(as of Aug. 31, 1995)
1 year 5 years 10 years
+17.2% +16.0% +14.2%
Capital Resource Fund
$37,845
S&P 500
$10,000
'85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95
On the chart above you can see how the Fund's total return compared
to a widely cited performance index, Standard & Poor's 500 Stock
Index (S&P 500).
The S&P 500, an unmanaged list of common stocks, is frequently used
as a general measure of market performance. However, the S&P 500
companies are generally larger than those in which the Fund
invests.
Your investment and return values fluctuate so that your
accumulation units, when redeemed, may be worth more or less than
the original cost. This was a period of widely fluctuating
security prices. Past performance is no guarantee of future
results. The above chart does not reflect expenses that apply to
the variable accounts or the annuity contracts.
<PAGE>
PAGE 8
To our contract owners
International Equity Fund
(Photo of) Paul Hopkins, Portfolio manager
From the portfolio manager
Many foreign markets rebounded during the spring and summer,
allowing International Equity Fund to make up most of the ground
lost earlier in the fiscal year. Ultimately, for the September
1994 through August 1995 period, the Fund experienced a decline in
total return of 1.8%. (This figure does not reflect expenses that
apply to the variable accounts or subaccounts or to the annuity
contract.)
The period got off to a poor start, as fears of rising interest
rates in Southeast Asia and a currency devaluation in Mexico drove
down stock prices in those countries and created a ripple effect
that soon spread to other smaller foreign markets. The Japanese
market, on other hand, held up relatively well during that time,
only to slump early in 1995 under the impact of the Kobe
earthquake.
By spring, though, conditions throughout much of the world were
markedly improved. The driving force was falling interest rates in
many countries. As is usually the case, stock prices in many
countries responded positively to that trend.
As for the current fiscal year, many foreign markets still appear
attractively priced. In Japan, we anticipate that government
action on interest rates, fiscal spending and bad real estate debts
will accelerate earnings growth and push the market higher. In
Southeast Asia, strong growth and modest market valuations make for
a favorable outlook. In Europe, the markets have performed well
and may need time to digest the gains. Still, even there, the
prospect of lower interest rates should be positive for stocks in
the months ahead.
Overall, we are optimistic about the potential for international
stocks and expect the markets to post additional gains.
Paul Hopkins
<PAGE>
PAGE 9
<TABLE>
<CAPTION>
Your fund's ten largest holdings
International Equity Fund
Pie chart) The ten holdings listed here make up 15.02% of the Fund's net assets
Percent Value
(of Fund's net assets)(as of Aug. 31, 1995)
<S> <C> <C>
Siebe (United Kingdom) 1.81% 26,112,130
A United Kingdom engineering company with
significant U.S. presence via Foxboro in
control devices and process systems.
National Westminster (United Kingdom) 1.65 23,853,058
This company and its subsidiaries form the
NatWest Group, which provides an extensive
range of banking and financial services through
offices and branches in the United Kingdom and
overseas.
Telefonica (Spain) 1.57 22,635,809
Spain's monopoly operator of basic telephone and
telex services.
Rank Organisation (United Kingdom) 1.53 22,071,900
A major leisure-time company with interests in
film, television, travel and lodging.
Credit Commercial de France (France) 1.46 21,068,470
The parent company of a banking group primarily
engaged in retail banking, investment banking,
asset management and international private banking.
TDK (Japan) 1.43 20,579,600
This company and its subsidiaries are engaged in
the manufacturing of components for use in
electronic equipment and machineries.
Sandoz (Switzerland) 1.43 20,554,799
A manufacturer and seller of pharmaceuticals,
chemicals, seeds and agro-chemicals.
British Airways (United Kingdom) 1.40 20,163,550
One of the largest worldwide carriers. Operations
encompass the entire United Kingdom, a substantial
share of North Atlantic traffic, as well as routes
to Europe and the Far East.
Lyonnaise des Eaux Dumez (France) 1.38 19,892,700
A leading water utility that has diversified into
communications and contruction.
Rohm (Japan) 1.36 19,675,282
A producer of integrated circuits (ICs) and other
electronic components.
Excludes short-term securities.
</TABLE>
<PAGE>
PAGE 10
Your Fund's long-term performance
International Equity Fund
How your $10,000 has grown in International Equity Fund
Average annual total return International
(as of Aug. 31, 1995) Equity Fund
$13,616
Since
1 year 1/13/92
-1.8% +8.9%
Morgan Stanley Capital
International World Index
$10,000
1/13/92 '92 '93 '94 '95
On the chart above you can see how the Fund's total return compared
to a widely cited performance index, the Morgan Stanley Capital
International World Index (World Index).
The World Index, compiled from a composite of securities listed on
the markets of North America, Europe, Australasia and the Far East
is widely recognized by investors as the measurement index for
portfolios that invest in the major markets of the world.
Your investment and return values fluctuate so that your
accumulation units, when redeemed, may be worth more or less than
the original cost. This was a period of widely fluctuating
security prices. Past performance is no guarantee of future
results. The above chart does not reflect expenses that apply to
the variable accounts or the annuity contracts.
<PAGE>
PAGE 11
To our contract owners
Aggressive Growth Fund
(Photo of) Martin G. Hurwitz, Portfolio manager
From the portfolio manager
Sharp stock selection and a powerful market rally combined to
produce a total return of 26.8% for Aggressive Growth Fund during
the past fiscal year (September 1994 through August 1995). (This
figure does not reflect expenses that apply to the variable
accounts or subaccounts or to the annuity contract.)
The first several months of the period were dominated by volatility
in the stock market, as a tug of war developed between the positive
forces of low inflation and generally good corporate profits and
the negative influence of higher interest rates.
By early spring, the market's main questions had been answered to
its satisfaction: the economy was cooling down but appeared
unlikely to slip into recession; corporate profits were
encouragingly strong; inflation was staying at an unthreatening
level and long-term interest rates had not only stabilized but were
heading down. With those positive factors in place, the market
mounted a sustained advance that continued through much of the
summer.
To the particular benefit of this Fund, growth stocks responded
especially well in that environment. More specifically, stocks of
technology companies, which comprised the largest portion of the
portfolio, were often at the forefront of the rally.
Complementing our emphasis on technology was our decision to
gradually reduce the level of cash reserves in the portfolio --
from more than 30% of assets to about 10%. We put that money to
work in stocks, which ultimately provided a much greater overall
return than cash-equivalent investments.
Concurrent with a change in managers last January, we also reduced
the number of holdings in the portfolio. Although the emphasis has
remained on stocks of small and mid-size growth companies, stock-
selection criteria are now somewhat different. The top
consideration is outstanding company management, followed by strong
earnings and revenue growth and a good risk-reward ratio regarding
stock price.
Looking to the new fiscal year that began this fall, we're
encouraged by the continuation of what we believe is a favorable
formula for stocks -- a modestly growing economy, an ongoing low
rate of inflation and stable-to-declining interest rates. While we
may well see some volatility along the way, we expect to be
rewarded over the longer-term.
Martin G. Hurwitz
<PAGE>
PAGE 12
<TABLE>
<CAPTION>
Your Fund's ten largest holdings
Aggressive Growth Fund
(Pie chart) The ten holdings listed here make up 14.80% of the Fund's net assets
Percent Value
(of Fund's net assets)(as of Aug. 31, 1995)
<S> <C> <C>
Cisco Systems 2.25% $31,828,125
The leading designer and builder of devices
that link personal computers in powerful
networks. Cisco is a leader in the fast-growing
business network market.
HBO & Company 2.07 29,260,000
A health-care information service company that
provides a variety of computer-based information
systems and services to hospitals and their
affiliates.
IDEXX Laboratories 2.04 28,793,750
Developer, manufacturer and distributor of
biotechnology-based detection systems. The
company's products are currently used for animal
health, food quality assurance and biomedical
research applications.
Nokia Preferred 1.72 24,281,250
The parent company of a group engaged in the
production, sale and export of electronics and
electrotechnical products, including
telecommunication equipment, mobile phones
networks, and home and industrial electronic
products.
Oracle 1.28 18,056,250
One of the largest independent vendors of
database-management software offering a
variety of new products, enhancements and
applications software.
Micron Technology 1.20 16,912,500
Designer, manufacturer and marketer of
semiconductor memory components primarily
used in various computer applications.
CUC Intl 1.11 15,697,500
The leading provider of membership-based
services serving over 30 million members.
The company works in partnership with leading
banks to offer members the opportunity to
purchase goods and services at considerable
savings.
Parametric Technology 1.10 15,470,000
A producer of software products for the
automation of complex engineering tasks that
are essential to the development of virtually
all manufactured products.
Paychex 1.05 14,760,000
Provider of computerized payroll accounting
services to more than 172,000 small- to
medium-sized businesses nationwide.
Integrated Device Technology .98 13,830,000
Designer and manufacturer of high-performance
integrated circuits using CMOS and BiCMOS
process technology.
Excludes short-term securities.
</TABLE>
<PAGE>
PAGE 13
Your Fund's long-term performance
Aggressive Growth Fund
How your $10,000 has grown in Aggressive Growth Fund
Average annual total return
(as of Aug. 31, 1995)
Since
1 year 1/13/92
+26.8% +11.0%
Aggressive
Growth Fund
$14,610
S&P 500
$10,000
1/13/92 '92 '93 '94 '95
On the chart above you can see how the Fund's total return compared
to a widely cited performance index, the Standard & Poor's 500
Stock Index (S&P 500).
The S&P 500, an unmanaged list of larger stocks, is frequently used
as a general measure of market performance. However, the S&P 500
companies are generally larger than those in which Aggressive
Growth Fund invests.
Your investment and return values fluctuate so that your
accumulation units, when redeemed, may be worth more or less than
the original cost. This was a period of widely fluctuating
security prices. Past performance is no guarantee of future
results. The above chart does not reflect expenses that apply to
the variable accounts or the annuity contracts.
<PAGE>
PAGE 14
To our contract owners
Special Income Fund
(Photo of) Steven C. Merrell, Portfolio manager
From the portfolio manager
A much-improved bond market during 1995 set the stage for a strong
performance by Special Income Fund during the past fiscal year --
September 1994 through August 1995. For the 12 months, the total
return was 13.75%. (This figure does not reflect expenses that
apply to the variable accounts or subaccounts or to the annuity
contract.)
As is always the case for bond portfolios, the leading factor in
the Fund's performance during the period was the interest-rate
trend. In early 1994, the Federal Reserve began raising interest
rates to temper economic growth and thereby head off a potential
spike in the inflation rate. Along the way, bond prices
experienced a steep decline -- an automatic result of higher
interest rates. (Conversely, falling interest rates boost bond
prices.)
The lingering effect of higher rates was still troubling the bond
market when the Fund's fiscal year began, and the Fund lost ground
during the opening months. The turnaround came in December 1994.
With inflation fears abating somewhat, long-term interest rates
leveled off, allowing bonds to make modest progress. The forward
momentum soon turned into a powerful rally that continued largely
unabated through the end of the fiscal year in August.
Naturally, the Fund's performance benefited from the favorable
interest-rate trend. But some strategies we employed provided an
extra boost. Foremost was our decision to increase the average
maturity of the securities in the portfolio during the past spring
and summer. That enhanced the gain resulting from the rate
decline. In addition, early in 1995, we added to the Fund's
holdings of government and corporate bonds in emerging markets,
mainly in Latin America. These issues generated excellent gains
for us in the ensuing months.
As we embark upon a new fiscal year, we believe the positive
environment we've recently enjoyed remains in place. Economic
growth continues at a modest pace. Inflation has yet to reach a
threatening level. And interest rates, over the next several
months, appear likely to move somewhat lower. We are maintaining a
relatively aggressive portfolio structure and, if our outlook
proves to be correct, bonds should respond in a positive way.
Steven C. Merrell
<PAGE>
PAGE 15
<TABLE>
<CAPTION>
Your Fund's ten largest holdings
Special Income Fund
(Pie chart) the ten holdings listed here make up 10.42% of the Fund's net assets
Percent Value
(of Fund's net assets)(as of Aug. 31, 1995)
<S> <C> <C>
Gov't of Poland 1.37% $23,251,250
3.25% Stepup Nts 2014
Hydro Quebec 1.27 21,634,600
8.50% 2029
Mexican Cetes 1.24 21,081,199
Zero Coupon 1996
Republic of Argentina 1.23 20,987,313
7.31% 2005
GMAC 1.21 20,614,400
7.85% 1997
Republic of Brazil 1.02 17,447,020
4.00% 2014
United Kingdom Treasury .87 14,740,010
8.00% 2003
Gov't of Canada .84 14,229,289
7.82% 2001
Republic of Argentina .69 11,796,875
4.25% 2023
Atlantic Richfield .68 11,652,300
8.75% 2032
Excludes short-term securities and U.S. Treasury and government agency holdings.
</TABLE>
<PAGE>
PAGE 16
Your Fund's long-term performance
Special Income Fund
How your $10,000 has grown in Special Income Fund
Average annual total return Special Income Fund
(as of Aug. 31, 1995) $26,751
1 year 5 years 10 years
+13.8% +11.5% +10.3%
Lehman Aggregate
Bond Index
$10,000
'85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95
On the chart above you can see how the Fund's total return compared
to a widely cited performance index, the Lehman Aggregate Bond
Index.
The Lehman Aggregate Bond Index is made up of a representative list
of government and corporate bonds as well as asset-backed
securities and mortgage-backed securities. The index is frequently
used as a general measure of bond market performance. However, the
securities used to create the index may not be representative of
the bonds held in Special Income Fund.
Your investment and return values fluctuate so that your
accumulation units, when redeemed, may be worth more or less than
the original cost. This was a period of widely fluctuating
security prices. Past performance is no guarantee of future
results. The above chart does not reflect expenses that apply to
the variable accounts or the annuity contracts.
<PAGE>
PAGE 17
To our contract owners
Moneyshare Fund
(Photo of) Terry Fettig, Portfolio manager
From the portfolio manager
Ongoing economic growth fostered increases in short-term interest
rates during most of the Fund's fiscal year (September 1994 through
August 1995). Consistent with that trend, the Fund's yield also
increased. For the seven-day period ended August 31, 1995, the
Fund's compound annualized yield was 5.19%, and the simple
annualized yield was 5.06%. The Fund maintained a stable $1 per
share price throughout the 12-month period. (Although the fund
seeks to maintain $1 per share price, there is no assurance that it
will be able to do so. Also, an investment in the Fund is neither
insured nor guaranteed by the U.S. government.)
An extended rise in short-term interest rates began in February
1994, when the Federal Reserve Board started raising rates to slow
down the economy and, therefore, prevent a rapid increase in the
inflation rate. The trend continued until last spring. (The Fed
adjusts short-term rates based on the condition of the economy and
the inflation outlook. When the economy is weak and inflation is
low, the Fed usually lowers rates to stimulate the economy. When
the economy is growing rapidly, the Fed usually pushes up short-
term rates to moderate economic growth and keep inflation in
check.)
The Fed's efforts led to higher interest on the securities in which
the Fund invests and, ultimately, to a higher fund yield. The
higher-rate trend leveled off last spring, then reversed in July,
when the Fed lowered short-term rates slightly in the face of
weaker economic data and unthreatening inflation reports.
As we enter a new fiscal year, we expect the economy will continue
to expand at a modest pace in the months ahead while inflation
remains largely in check. In such a scenario, we think it's
probable that the Fed will either take a hands-off approach
regarding short-term rates or nudge them down a bit more. Given
that outlook, we have begun to gradually increase the average
maturity of the securities in the portfolio and expect to continue
that process as the year progresses.
Terry Fettig
<PAGE>
PAGE 18
To our contract owners
Managed Fund
(Photo of) Michael P. Ducar, Portfolio manager
(Photo of) Deborah L. Pederson, Portfolio manager
From the portfolio managers
Rebounds in the stock and bond markets led to improving performance
by Managed Fund during the last several months of the fiscal year
(September 1994 through August 1995). For the period as a whole,
the total return was nearly 12%. (This figure does not reflect
expenses that apply to the variable accounts or subaccounts or to
the annuity contract.)
Because of the detrimental effect of the higher-interest-rate trend
that dominated almost all of 1994, both stocks and bonds remained
in retreat when the period began in the fall of last year. (Higher
interest rates automatically depress bond prices, and that
condition usually spreads to stocks.)
The turning point for the markets and the Fund came in December,
when long-term interest rates stabilized and, at times, even moved
lower. That immediately helped bonds get back on their feet and
began to rouse the slumping stock market. The positive momentum
reached full swing by late winter and continued through the close
of fiscal year.
In October 1994, we made an asset allocation change, shifting more
money into stocks -- a move based on our belief that stocks would
outperform bonds. While this assessment proved to be correct, we
did not anticipate the remarkable rally that stocks would stage.
Ultimately, a severe downturn in our Mexican stocks and the
relatively conservative domestic investment approach we took, which
included a somewhat higher-than-normal cash position, resulted in
the stock portion of the portfolio lagging the popular market
averages until the last three months of the fiscal year.
As always, we maintained a broad mix of stocks during the period.
Overall, our substantial exposure to stocks in the electronics,
financial services, aerospace, computer and telecommunications
industries proved to be highly productive. On the other hand, our
holdings in energy, health-care services, foreign and REIT (real
estate investment trusts) were relatively poor performers.
On the bond side of the portfolio, we maintained a well-diversified
group of holdings, including U.S. Treasury, varying grades of
corporate bonds and mortgage-backed securities. Particularly
beneficial to our bond performance was our decision to lengthen the
duration of the portfolio -- a strategy that makes the portfolio
more sensitive to interest-rate changes. In this case, when long-
term rates came down, the portfolio enjoyed a performance boost.
Looking to the current fiscal year, we are maintaining our emphasis
on stocks of high-quality companies, complemented by our bond
holdings. As we have for some time, we continue to focus on
companies that: have a strong presence in foreign markets; are
restructuring; should benefit from telecommunications advances and
serve price-conscious consumers. All in all, we expect this mix to
provide a better return than a pure stock portfolio if the market
retreats, while still allowing us to capture a good portion of the
upswing should the market remain strong.
Michael P. Ducar
Deborah L. Pederson
<PAGE>
PAGE 19
<TABLE>
<CAPTION>
Your Fund's ten largest holdings (continued)
Managed Fund
(Pie chart) The ten holdings listed here make up 12.45% of the Fund's net assets
Percent Value
(of Fund's net assets)(as of Aug. 31, 1995)
<S> <C> <C>
General Electric 2.03% $61,818,750
A diversified company with interests
in manufacturing, broadcasting (NBC),
services and technology.
Intel 1.39 42,348,750
The world's number one semiconductor
manufacturer. Intel produces microcomputer
components, modules and systems.
Amoco 1.26 38,250,000
One of the major integrated domestic oil
and gas companies known traditionally for
its extensive petroleum marketing operations.
Royal Dutch Petroleum 1.25 38,160,000
A major oil company that includes Royal Dutch
(the Dutch version) and Shell Transport
(the English version).
United Technologies 1.23 37,518,750
A leading worldwide manufacturer of jet engines,
helicopters, heating/air conditioning equipment,
and elevators and escalators.
Nokia Preferred 1.12 33,993,750
The parent company of a group engaged in the
production, sale and export of electronics and
electrotechnical products, including
telecommunication equipment, mobile phones
networks, and home and industrial electronic
products.
Vishay Intertechnology 1.06 32,400,000
The dominant global producer of resistors and
capacitors for use in electronic components in
computers, telecommunications, consumer
electronics, automotive, industrial and other
markets.
Raytheon 1.06 32,350,000
Designer, manufacturer and seller of electronic
devices, equipment and systems for government and
commercial use. About two-thirds of sales are to
the military (missiles and electronics).
Travelers 1.03 31,200,000
Among the world's largest multi-line financial
services companies, focusing on insurance,
managed health care and investments.
Exxon 1.02 30,937,500
A major factor in the world crude oil, natural
gas and chemical industry and also has substantial
coal and mineral holdings.
Excludes short-term securities and U.S. Treasury and government agency holdings.
</TABLE>
<PAGE>
PAGE 20
Your Fund's long-term performance
Managed Fund
How your $10,000 has grown in Managed Fund
Average annual total return
(as of Aug. 31, 1995)
Since
1 year 5 years 4/30/86
+11.9% +13.2% +11.0%
Managed Fund
$26,439
S&P 500
$10,000
4/30/86 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95
On the chart above you can see how the Fund's total return compared
to a widely cited performance index, Standard & Poor's 500 Stock
Index (S&P 500).
The S&P 500, an unmanaged list of common stocks, is frequently used
as a general measure of market performance. However, the S&P 500
companies are generally larger than those in which the Fund
invests.
Your investment and return values fluctuate so that your
accumulation units, when redeemed, may be worth more or less than
the original cost. This was a period of widely fluctuating
security prices. Past performance is no guarantee of future
results. The above chart does not reflect expenses that apply to
the variable accounts or the annuity contracts.
<PAGE>
PAGE 21
The board of directors and shareholders
IDS Life Investment Series, Inc.
IDS Life Capital Resource Fund
IDS Life International Equity Fund
IDS Life Aggressive Growth Fund
IDS Life Special Income Fund, Inc.
IDS Life Moneyshare Fund, Inc. and
IDS Life Managed Fund, Inc.:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments in securities,
of IDS Life Capital Resource Fund, IDS Life International Equity
Fund, IDS Life Aggressive Growth Fund, IDS Life Special Income
Fund, Inc., IDS Life Moneyshare Fund, Inc. and IDS Life Managed
Fund, Inc. as of August 31, 1995, and the related statements of
operations for the year then ended and the statements of changes in
net assets for each of the years in the two-year period ended
August 31, 1995. We have also audited the financial highlights for
each of the years in the ten-year period ended August 31, 1995 for
IDS Life Capital Resource Fund, IDS Life Special Income Fund, Inc.,
and IDS Life Moneyshare Fund, Inc., each of the years in the nine-
year period ended August 31, 1995 and the period from April 30,
1986 (commencement of operations) to August 31, 1986 for IDS Life
Managed Fund, Inc., and for each of the years in the three year
period ended August 31, 1995 and the period from January 13, 1992
(commencement of operations) to August 31, 1992 for IDS Life
International Equity Fund and IDS Life Aggressive Growth Fund.
These financial statements and the financial highlights are the
responsibility of Fund management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and the financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. Investment securities held in custody are
confirmed to us by the custodian. As to securities purchased and
sold but not received or delivered, and securities on loan, we
request confirmations from brokers and, where replies are not
received, we carry out other appropriate auditing procedures. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
<PAGE>
PAGE 22
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of IDS Life Capital Resource Fund, IDS Life
International Equity Fund, IDS Life Aggressive Growth Fund, IDS
Life Special Income Fund, Inc., IDS Life Moneyshare Fund, Inc., and
IDS Life Managed Fund, Inc. at August 31, 1995 and the results of
their operations for the year then ended, the changes in their net
assets for each of the years in the two-year period ended August
31, 1995, and the financial highlights for the periods stated in
the first paragraph above, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
October 7, 1995
<PAGE>
PAGE 23
<TABLE>
<CAPTION>
Statements of assets and liabilities
Retirement Annuity Mutual Funds
August 31, 1995
Capital International Aggresive
Resource Equity Growth
Fund Fund Fund
Assets
___________________________________________________________________________________________________________________________________
<S> <C> <C> <C>
Investments in securities, at value (Note 1):
Investments in securities of unaffiliated
issuers (identified cost, $3,255,807,155;
$1,395,745,865 and $1,088,650,661, respectively) $3,622,612,161 $1,469,504,893 $1,417,982,369
Investments in securities of affiliated issuers
(identified cost, $272,811,155 for Capital
Resource Fund ) 254,420,213 -- --
Cash in bank on demand deposit (including foreign cash
of $4,163,659 for International Equity Fund) 16,044,568 2,195,160 520,902
Receivable for investment securities sold 25,165,723 3,275,322 6,226,347
Dividends and accrued interest receivable 5,277,316 4,765,340 396,544
Unrealized appreciation on forward foreign currency contracts
held, at value (Notes 1 and 4) -- 8,485,163 --
U.S. government securities held as collateral for
securities loaned (Note 6) 4,671,913 23,309,792 --
Receivable (for capital stock sold) from:
IDS Life accounts 367,206,996 2,420,087 518,782
IDS Life of New York accounts 17,524,595 123,071 --
___________________________________________________________________________________________________________________________________
Total assets 4,312,923,485 1,514,078,828 1,425,644,944
___________________________________________________________________________________________________________________________________
Liabilities
___________________________________________________________________________________________________________________________________
Dividends payable to separate accounts (Note 1) 394,283,931 5,845,560 3,030,321
Payable for investment securities purchased 49,717,392 16,202,707 9,783,895
Accrued investment management and services fee 2,121,101 1,088,468 786,110
Unrealized depreciation on forward foreign currency contracts
held, at value (Notes 1 and 4) 5,674 -- --
Payable for securities loaned (Note 6) 20,924,413 48,000,642 --
Payable (for capital stock redeemed) to:
IDS Life accounts 695,296 --
IDS Life of New York accounts 4 408,399 3,642
Other accrued expenses 461,562 655,447 148,368
___________________________________________________________________________________________________________________________________
Total liabilities 468,209,373 72,201,223 13,752,336
___________________________________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $3,844,714,112 $1,441,877,605 $1,411,892,608
___________________________________________________________________________________________________________________________________
Represented by
___________________________________________________________________________________________________________________________________
Capital stock - authorized 10,000,000,000
shares for each Fund of $.01 par value; outstanding,
157,440,979; 114,884,903 and 97,796,581 shares,
respectively $ 1,574,410 $ 1,148,849 $ 977,966
Additional paid-in capital 3,495,760,104 1,373,310,256 1,112,105,991
Undistributed (excess of distributions over) net
investment income (1,844,321) (6,056,376) (7,866)
Accumulated net realized gain (loss) on investments
in securities 810,735 (8,742,222) (30,514,798)
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies (Note 4) 348,413,184 82,217,098 329,331,315
___________________________________________________________________________________________________________________________________
Total - representing net assets applicable to outstanding
capital stock $3,844,714,112 $1,441,877,605 $1,411,892,608
___________________________________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 24.42 $ 12.55 $ 14.44
___________________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 24
Statements of assets and liabilities (continued)
Retirement Annuity Mutual Funds
August 31, 1995
Special Moneyshare Managed
Income Fund Fund
Fund
Assets
___________________________________________________________________________________________________________________________________
Investments in securities, at value (Note 1):
Investments in securities of unaffiliated
issuers (identified cost, $1,623,992,075;
$227,727,812 and $2,614,336,243, respectively) $1,681,272,841 $ 227,727,812 $3,042,488,703
Cash in bank on demand deposit -- 136,860 3,097,375
Receivable for investment securities sold 3,471,965 -- 5,618,995
Dividends and accrued interest receivable 27,660,103 100,897 13,067,325
U.S. government securities held as collateral for
securities loaned (Note 6) 674,883 -- 28,664,118
Receivable (for capital stock sold) from:
IDS Life accounts 10,572,061 1,085,129 11,653,859
IDS Life of New York accounts 461,852 40,415 699,250
___________________________________________________________________________________________________________________________________
Total assets 1,724,113,705 229,091,113 3,105,289,625
___________________________________________________________________________________________________________________________________
Liabilities
___________________________________________________________________________________________________________________________________
Disbursements in excess of cash on demand deposit 349,418 -- --
Dividends payable to separate accounts (Note 1) 11,683,525 974,856 19,999,666
Payable for investment securities purchased 5,096,427 1,000,000 7,422,789
Accrued investment management and services fee 925,069 102,129 1,631,878
Payable for securities loaned (Note 6) 2,668,883 -- 31,475,788
Payable (for capital stock redeemed) to:
IDS Life accounts -- -- 32,857
IDS Life of New York accounts -- -- 59,548
Other accrued expenses 191,099 73,162 450,443
___________________________________________________________________________________________________________________________________
Total liabilities 20,914,421 2,150,147 61,072,969
___________________________________________________________________________________________________________________________________
Net assets applicable to outstanding capital stock $1,703,199,284 $ 226,940,966 $3,044,216,656
___________________________________________________________________________________________________________________________________
Represented by
___________________________________________________________________________________________________________________________________
Capital stock - authorized 10,000,000,000
shares for each Fund of $.01 par value ($.001 for
Managed Fund); outstanding, 147,091,617;
226,959,381 and 205,056,931 shares, respectively $ 1,470,916 $ 2,269,594 $ 205,057
Additional paid-in capital 1,669,150,899 224,672,331 2,664,574,250
Undistributed (excess of distributions over) net
investment income 415,998 -- (613,294)
Accumulated net realized loss on investments
in securities (25,134,380) (959) (48,116,897)
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies 57,295,851 -- 428,167,540
___________________________________________________________________________________________________________________________________
Total - representing net assets applicable to outstanding
capital stock $1,703,199,284 $ 226,940,966 $3,044,216,656
___________________________________________________________________________________________________________________________________
Net asset value per share of outstanding capital stock $ 11.57 $ 1.00 $ 14.85
___________________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 25
Statements of operations
Retirement Annuity Mutual Funds
Year ended August 31, 1995
Capital International Aggressive
Resource Equity Growth
Fund Fund Fund
___________________________________________________________________________________________________________________________________
Income:
Investment income
Dividends (net of foreign taxes withheld of $367,254;
$2,782,744 and $30,97
6, respectively) $ 52,672,124 $ 22,808,667 $ 3,029,303
Dividends earned from affiliates 73,500 576,615 --
Interest 9,370,757 9,092,400 11,735,370
___________________________________________________________________________________________________________________________________
Total income 62,116,381 32,477,682 14,764,673
___________________________________________________________________________________________________________________________________
Expenses (Note 2):
Investment management services fee 20,450,401 10,869,439 6,579,414
Administrative services fee 702,000 301,873 277,355
Custodial fees and expenses 328,177 1,308,202 86,886
Directors and officers compensation 123,448 46,111 27,781
Printing and postage 444,136 236,868 168,851
Audit fees 26,245 22,427 20,827
Registration fees 350,000 135,311 87,952
Other 17,205 9,314 5,568
___________________________________________________________________________________________________________________________________
Total expenses 22,441,612 12,929,545 7,254,634
___________________________________________________________________________________________________________________________________
Investment income - net 39,674,769 19,548,137 7,510,039
___________________________________________________________________________________________________________________________________
Realized and unrealized gain (loss) on investments - net
___________________________________________________________________________________________________________________________________
Net realized gain (loss) on security transactions (including
$20,337,932 realized loss on investments of affiliated issuers
for Capital Resource Fund) (Note 3) 383,173,382 (8,690,223) 6,179,373
Net realized loss on foreign currency transactions (38,216) (8,288,964) (445)
___________________________________________________________________________________________________________________________________
Net realized gain (loss) on investments 383,135,166 (16,979,187) 6,178,928
Net change in unrealized appreciation or depreciation
of investments and on translation of assets and liabilities
in foreign currencies 128,698,908 (6,548,017) 270,146,371
___________________________________________________________________________________________________________________________________
Net gain (loss) on investments 511,834,074 (23,527,204) 276,325,299
___________________________________________________________________________________________________________________________________
Net increase (decrease) in net assets resulting
from operations $ 551,508,843 $ (3,979,067) $ 283,835,338
___________________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 26
Statements of operations
Retirement Annuity Mutual Funds
Year ended August 31, 1995
Special Moneyshare Managed
Income Fund Fund
Fund
___________________________________________________________________________________________________________________________________
Income:
Investment income
Dividends (net of foreign taxes withheld of $25,287; $0 and
$362,702, respectively) $ 1,414,894 $ -- $ 33,078,010
Interest (net of foreign taxes withheld of $150,104 for
Special Income Fund) 132,087,292 11,299,524 64,084,649
___________________________________________________________________________________________________________________________________
Total income 133,502,186 11,299,524 97,162,659
___________________________________________________________________________________________________________________________________
Expenses (Note 2):
Investment management and services fee 9,542,823 1,041,050 16,720,930
Admninstrative services fee 347,753 27,729 403,957
Custodial fees and expenses 152,386 27,498 225,382
Directors and officers compensation 67,338 6,896 97,928
Printing and postage 214,416 16,476 382,915
Audit fees 26,481 16,753 24,681
Registration fees 54,233 133 260,089
Other 13,029 1,034 15,491
___________________________________________________________________________________________________________________________________
Total expenses 10,418,459 1,137,569 18,131,373
___________________________________________________________________________________________________________________________________
Investment income - net 123,083,727 10,161,955 79,031,286
___________________________________________________________________________________________________________________________________
Realized and unrealized gain (loss) on investments - net
___________________________________________________________________________________________________________________________________
Net realized loss on security transactions (including
$617,500 realized gain on investments of affiliated
issuers for Managed Fund) (Note3) (19,788,125) (152) (45,928,261)
Net realized loss on foreign currency transactions (229,649) -- (5,845)
Net realized gain on closed or expired options
contracts written (Note 5) 580,156 -- --
Net realized loss on closed interest rate futures contracts (550,296) -- (3,491,434)
___________________________________________________________________________________________________________________________________
Net realized loss on investments (19,987,914) (152) (49,425,540)
Net change in unrealized appreciation or depreciation of
investments and on translation of assets and liabilities
in foreign currencies 94,905,201 -- 293,779,938
___________________________________________________________________________________________________________________________________
Net gain (loss) on investments 74,917,287 (152) 244,354,398
___________________________________________________________________________________________________________________________________
Net increase in net assets resulting from operations $ 198,001,014 $ 10,161,803 $ 323,385,684
___________________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 27
<TABLE>
<CAPTION>
Statements of changes in net assets
Retirement Annuity Mutual Funds
Year ended August 31,
Capital Resource Fund International Equity Fund
1995 1994 1995 1994
Operations and distributions
___________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Investment income - net $ 39,674,769 $ 30,730,527 $ 19,548,137 $ 7,630,484
Net realized gain (loss) on investments 383,135,166 300,809,352 (16,979,187) 24,648,901
Net change in unrealized appreciation or
depreciation of investments and on translation
of assets and liabilities in foreign currencies 128,698,908 (135,555,243) (6,548,017) 63,468,345
___________________________________________________________________________________________________________________________________
Net increase (decrease) in net assets
resulting from operations 551,508,843 195,984,636 (3,979,067) 95,747,730
___________________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (39,584,237) (30,730,527) (17,257,772) (2,495,587)
Net realized gain on investments (383,078,138) (300,690,606) -- (24,648,901)
Excess distributions of net
investment income (Note 1) (52,587) (14,735) -- --
Excess distributions of net realized
gain (Note 1) (977,300) -- -- (5,473,905)
___________________________________________________________________________________________________________________________________
Total distributions (423,692,262) (331,435,868) (17,257,772) (32,618,393)
___________________________________________________________________________________________________________________________________
Capital share transactions (Note 7)
___________________________________________________________________________________________________________________________________
Proceeds from sales 436,224,431 426,174,442 360,572,294 731,788,058
Reinvested distributions at net asset value 423,692,262 331,435,868 17,257,772 32,618,393
Payments for redemptions (42,461,613) (31,015,165) (26,008,343) (7,151,829)
___________________________________________________________________________________________________________________________________
Increase in net assets from capital
share transactions 817,455,080 726,595,145 351,821,723 757,254,622
___________________________________________________________________________________________________________________________________
Total increase in net assets 945,271,661 591,143,913 330,584,884 820,383,959
___________________________________________________________________________________________________________________________________
Net assets at beginning of year 2,899,442,451 2,308,298,538 1,111,292,721 290,908,762
___________________________________________________________________________________________________________________________________
Net assets at end of year $3,844,714,112 $2,899,442,451 $1,441,877,605 $1,111,292,721
___________________________________________________________________________________________________________________________________
Undistributed (excess of distributions over)
net investment income $ (1,844,321) $ (90,532) $ (6,056,376) $ 1,561,858
___________________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 28
Statements of changes in net assets
Retirement Annuity Mutual Funds
Year ended August 31,
Aggressive Growth Fund Special Income Fund
1995 1994 1995 1994
Operations and distributions
___________________________________________________________________________________________________________________________________
Investment income - net $ 7,510,039 $ 699,372 $ 123,083,727 $ 117,482,199
Net realized gain (loss) on investments 6,178,928 (31,561,811) (19,987,914) 20,195,502
Net change in unrealized appreciation or
depreciation of investments and on translation
of assets and liabilities in foreign currencies 270,146,371 16,989,673 94,905,201 (163,872,465)
___________________________________________________________________________________________________________________________________
Net increase (decrease) in net assets
resulting from operations 283,835,338 (13,872,766) 198,001,014 (26,194,764)
___________________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (7,502,171) (707,260) (121,683,870) (119,630,572)
Net realized gain on investments -- -- (2,300,916) (2,399,451)
Excess distributions of net investment
income (Note 1) (7,442) (7,868) (2,378,142) (1,451,679)
___________________________________________________________________________________________________________________________________
Total distributions (7,509,613) (715,128) (126,362,928) (123,481,702)
___________________________________________________________________________________________________________________________________
Capital share transactions (Note 7)
___________________________________________________________________________________________________________________________________
Proceeds from sales 383,256,895 482,655,450 86,906,199 200,309,350
Reinvested distributions at net asset value 7,509,613 715,128 126,362,928 123,481,702
Payments for redemptions (17,849,325) (5,228,787) (140,624,932) (166,515,324)
___________________________________________________________________________________________________________________________________
Increase in net assets from capital share
transactions 372,917,183 478,141,791 72,644,195 157,275,728
___________________________________________________________________________________________________________________________________
Total increase in net assets 649,242,908 463,553,897 144,282,281 7,599,262
___________________________________________________________________________________________________________________________________
Net assets at beginning of year 762,649,700 299,095,803 1,558,917,003 1,551,317,741
___________________________________________________________________________________________________________________________________
Net assets at end of year $1,411,892,608 $ 762,649,700 $1,703,199,284 $1,558,917,003
___________________________________________________________________________________________________________________________________
Undistributed (excess of distributions over) net
investment income $ (7,866) $ (7,868) $ 415,998 $ (1,399,857)
___________________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 29
Statements of changes in net assets
Retirement Annuity Mutual Funds
Year ended August 31,
Moneyshare Fund Managed Fund
1995 1994 1995 1994
Operations and distributions
___________________________________________________________________________________________________________________________________
Investment income - net $ 10,161,955 $ 5,413,679 $ 79,031,286 $ 75,979,672
Net realized gain (loss) on investments (152) (681) (49,425,540) 72,533,563
Net change in unrealized appreciation or
depreciation of investments and on translation
of assets and liabilities in foreign currencies -- -- 293,779,938 (113,344,204)
___________________________________________________________________________________________________________________________________
Net increase in net assets resulting from
operations 10,161,803 5,412,998 323,385,684 35,169,031
___________________________________________________________________________________________________________________________________
Distributions to shareholders from:
Net investment income (10,161,955) (5,413,679) (78,601,919) (75,894,536)
Net realized gain on investments -- -- (198,282) (71,974,644)
Excess distributions of net investment
income (Note 1) (126) -- -- --
___________________________________________________________________________________________________________________________________
Total distributions (10,162,081) (5,413,679) (78,800,201) (147,869,180)
___________________________________________________________________________________________________________________________________
Capital share transactions (Note 7)
___________________________________________________________________________________________________________________________________
Proceeds from sales 113,426,072 54,005,120 265,867,838 629,387,611
Reinvested distributions at net asset value 10,162,081 5,413,679 78,800,201 147,869,180
Payments for redemptions (75,889,680) (59,822,520) (44,391,869) (23,003,414)
___________________________________________________________________________________________________________________________________
Increase (decrease) in net assets from
capital share transactions 47,698,473 (403,721) 300,276,170 754,253,377
___________________________________________________________________________________________________________________________________
Total increase (decrease) in net assets 47,698,195 (404,402) 544,861,653 641,553,228
___________________________________________________________________________________________________________________________________
Net assets at beginning of year 179,242,771 179,647,173 2,499,355,003 1,857,801,775
___________________________________________________________________________________________________________________________________
Net assets at end of year $ 226,940,966 $ 179,242,771 $3,044,216,656 $2,499,355,003
___________________________________________________________________________________________________________________________________
Undistributed (excess of distributions over)
net investment income $ -- $ -- $ (613,294) $ 859,703
___________________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 30
___________________________________________________________________
1. Summary of significant accounting policies
Each Fund is registered under the Investment Company Act of 1940 as
amended (the 1940 Act), as a diversified, open-end management
investment company. Shares of each Fund are sold through the
purchase of an annuity contract offered by IDS Life Insurance
Company (IDS Life) or its affiliates.
The significant accounting policies followed by the Funds are
summarized as follows:
Valuation of securities
Securities traded on national securities exchanges or included in
the NASDAQ National Market System are valued at the last quoted
sales price at the close of each business day; securities traded
over-the-counter but not included in the NASDAQ National Market
System and securities for which a last quoted sales price is not
readily available are valued at the mean of the bid and asked
prices. Bonds and other securities are valued at fair value as
determined by the board of directors when market quotations are not
readily available. Determination of fair value involves, among
other things, references to market indexes, matrixes and data from
independent brokers. Short-term securities in Capital Resource
Fund, International Equity Fund, Aggressive Growth Fund, Special
Income Fund and Managed Fund maturing in more than 60 days from the
valuation date are valued at the market price or approximate market
value based on the current interest rates; those maturing in 60
days or less are valued at amortized cost. Pursuant to Rule 2a-7
of the 1940 Act, all securities in Moneyshare Fund are valued at
amortized cost which approximates market value in order to maintain
a constant net asset value of $1 per share.
Option transactions
In order to produce incremental earnings, protect gains and
facilitate buying and selling of securities for investment
purposes, the Funds may buy and sell put and call options and write
covered call options on portfolio securities and write cash-secured
puts. The risk in writing a call option is that the Funds give up
the opportunity for profit if the market price of the security
increases. The risk in writing a put option is that the Funds may
incur a loss if the market price of the security decreases and the
option is exercised. The risk in buying an option is that the
Funds pay a premium whether or not the option is exercised. The
Funds also have the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.
The Funds also may write over-the-counter options where the
completion of the obligation is dependent upon the credit standing
of the other party.
Option contracts are valued daily and unrealized appreciation or
depreciation is recorded. The Funds will realize a gain or loss
upon expiration or closing of the option transaction. When an
option is exercised the proceeds on sales for a written call
option, the purchase cost for a written put option or the cost of a
security for a purchased put or call option is adjusted by the
amount of premium received or paid.
<PAGE>
PAGE 31
Futures transactions
In order to gain exposure to or protect itself from changes in the
market, the Funds may buy and sell stock index and interest rate
futures contracts. The Funds also may buy or write put and call
options on futures contracts. Risks of entering into futures
contracts and related options include the possibility that there
may be an illiquid market and a change in the value of the contract
or option may not correlate with changes in the value of the
underlying securities.
Upon entering into a futures contract, the Funds may be required to
deposit either cash or securities in an amount (initial margin)
equal to a certain percentage of the contract value. Subsequent
payments (variation margin) are made or received by the Funds each
day. The variation margin payments are equal to the daily changes
in the contract value and recorded as unrealized gains and losses.
The Funds recognize a realized gain or loss when the contract is
closed or expires.
Foreign currency translations and forward foreign currency
contracts Securities and other assets and liabilities denominated
in foreign currencies are translated daily into U.S. dollars at the
closing rate of exchange. Foreign currency amounts related to the
purchase or sale of securities, income and expenses are translated
at the exchange rate on the transaction date. In the statement of
operations, net realized gains or losses from foreign currency
transactions may arise from sales of foreign currency, closed
forward contracts, exchange gains or losses realized between the
trade date and settlement dates on securities transactions, and
other translation gains or losses on dividends, interest income and
foreign withholding taxes.
The Funds also may enter into forward foreign currency exchange
contracts for operational purposes. The net U.S. dollar value of
foreign currency underlying all contractual commitments held by the
Funds and the resulting unrealized appreciation or depreciation are
determined using foreign currency exchange rates from an
independent pricing service. The Funds are subject to the credit
risk that the other party will not complete the obligations of the
contract.
Illiquid securities
At Aug. 31, 1995, investments in securities for Special Income Fund
included issues that are illiquid. The Funds currently limit
investments in illiquid securities to 10% of the net assets, at
market value, at the time of purchase. The aggregate value of such
securities at Aug. 31, 1995, was $10,233,991, which represents 0.6
percent of net assets for Special Income Fund. Pursuant to
guidelines adopted by the board of directors, certain unregistered
securities are determined to be liquid and are not included within
the limitations specified above.
Federal income taxes
Since each Fund intends to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to the Variable
Accounts, no provision for income or excise taxes is required.
Each Fund is treated as a separate entity for federal income tax
purposes.<PAGE>
PAGE 32
Net investment income (loss) and net realized gains (losses) may
differ for financial statement and tax purposes primarily because
of the deferral of losses on certain futures contracts, the
recognition of certain foreign currency gains (losses) as ordinary
income (loss) for tax purposes, the timing and amount of market
discount recognized as ordinary income, foreign tax credits and
losses deferred due to "wash sale" transactions. The character of
distributions made during the year from net investment income or
net realized gains may differ from their ultimate characterization
for federal income tax purposes. The effect on dividend
distributions of certain book-to-tax differences is presented as
"excess distributions" in the statement of changes in net assets.
Also, due to the timing of dividend distributions, the fiscal year
in which amounts are distributed may differ from the year that the
income or realized gains (losses) are recorded by the Funds.
On the Statements of Assets and Liabilities, due to permanent
book-to-tax differences, undistributed net investment income and
accumulated net realized gain (loss) have been increased
(decreased), resulting in net reclassification adjustments to
additional paid-in capital as follows:
<TABLE>
<CAPTION>
Capital International Aggressive Special
Resource Equity Growth Income Moneyshare Managed
_______________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Undistributed net investment income $(1,791,734) $(9,908,599) $(424) $2,794,140 $126 $(1,902,364)
Accumulated net realized gain (loss) 1,788,035 8,236,965 444 (2,793,728) (126) 1,897,869
_______________________________________________________________________________________________________________________
Additional paid-in capital reduction
(increase) $ (3,699) 1,671,634) $ 20 $ 412 $ -- $ (4,495)
_______________________________________________________________________________________________________________________
</TABLE>
Dividends
At Aug. 31, 1995, dividends were declared of $2.782 per share for
Capital Resource Fund, $.051 for International Equity Fund, $.031
for Aggressive Growth Fund, $.080 for Special Income Fund, $.004
for Moneyshare Fund and $.098 for Managed Fund payable Sept. 1,
1995. Distributions to the Variable Accounts are recorded as of the
close of business on the record date and are payable on the first
business day following the record date. Dividends from net
investment income are declared daily and paid monthly for Special
Income Fund and Moneyshare Fund and declared and paid quarterly for
Capital Resource Fund, International Equity Fund, Aggressive Growth
Fund and Managed Fund. Capital gain distributions (if any) will be
made annually. However, an additional capital gain distribution
may be made during the fiscal year in order to comply with the
Internal Revenue Code, as applicable to regulated investment
companies.
Other
Security transactions are accounted for on the date the securities
are purchased or sold. Dividend income is recognized on the
ex-dividend date and interest income, including amortization of
premium and discount on a level yield basis, is accrued daily.
<PAGE>
PAGE 33
___________________________________________________________________
2. Investment management and services agreement
Under the terms of a prior agreement that ended March 19, 1995,
Capital Resource Fund, International Equity Fund, Aggressive Growth
Fund, Special Income Fund and Managed Fund paid IDS Life a fee for
managing its investments, recordkeeping and other specified
services. The fee was a percentage of each Fund's average daily
net assets consisting of a group asset charge in reducing
percentages from 0.46% to 0.32% annually on the combined net assets
of all non-money market funds in the IDS MUTUAL FUND GROUP and an
individual annual asset charge of 0.25% of average daily net assets
for each Fund, except International Equity Fund. International
Equity Fund's individual annual asset charge was 0.50%.
Also under the terms of a prior agreement, the investment
management and services fee for Moneyshare Fund was paid to IDS
Life. The fee was computed on a graduated fee scale equal on an
annual basis to 0.54% of the first $1 billion of average daily net
assets and scaled down thereafter in reducing percentages of each
succeeding $500 million to 0.46% of all average daily net assets in
excess of $2.5 billion.
Effective March 20, 1995, the Funds entered into a new agreement
with IDS Life for managing investments, recordkeeping and other
services that are based solely on the assets of each Fund. The
management fee is a percentage of each Fund's average daily net
assets in reducing percentages from 0.63% to 0.57% annually for
Capital Resource, 0.87% to 0.795% for International Equity, 0.65%
to 0.575% for Aggressive Growth, 0.61% to 0.535% for Special
Income, 0.51% to 0.44% for Moneyshare and 0.63% to 0.55% for
Managed.
IDS Life, in turn, pays to American Express Financial Corporation
(AEFC) a fee based on a percentage of each Fund's average daily net
assets for the year. This fee is equal to 0.50% for International
Equity Fund and 0.25% for each remaining fund. In addition to
paying its own management fee, brokerage commissions, taxes and
costs of certain legal services, each Fund will reimburse IDS Life
an amount equal to the cost of certain expenses incurred and paid
by IDS Life in connection with each Fund's operations. The Funds
also pay custodian fees to American Express Turst Company, an
affiliate of IDS Life. The reimbursement paid by Moneyshare Fund
will be limited to 0.25% of the Fund's average daily net assets.
Also effective March 20, 1995, the Funds entered into an
Administrative Services Agreement with AEFC. Under this agreement,
each Fund pays AEFC for administration and accounting services at a
percentage of each Fund's average daily net assets in reducing
percentages from 0.05% to 0.03% annually for Capital Resource,
0.06% to 0.035% for International Equity, 0.06% to 0.035% for
Aggressive Growth, 0.05% to 0.025% for Special Income, 0.03% to
0.02% for Moneyshare and 0.04% to 0.02% for Managed.
<PAGE>
PAGE 34
The Funds have a retirement plan for its independent directors.
Upon retirement, directors receive monthly payments equal to
one-half of the retainer fee for as many months as they served as a
director up to 120 months. There are no death benefits. The plan
is not funded but the Funds recognizes the cost of payments during
the time the directors serve on the Board. The retirement plan
expense for the year ended Aug. 31, 1995 amounted to $34,211 for
Capital Resource Fund, $12,333 for International Equity Fund,
$6,265 for Aggressive Growth Fund, $16,913 for Special Income Fund,
$90 for Moneyshare Fund and $26,246 for Managed Fund.
___________________________________________________________________
3. Securities transactions
For the year ended Aug. 31, 1995, cost of purchases and proceeds
from sales of securities aggregated, respectively, $1,557,902,434
and $1,509,500,672 for Moneyshare Fund; cost of purchases and
proceeds from sales of securities (other than short-term
obligations) aggregated, respectively, $3,290,598,747 and
$2,793,528,177 for Capital Resource Fund; $796,997,285 and
$428,353,414 for International Equity Fund; $1,309,099,586 and
$1,001,772,351 for Aggressive Growth Fund; $822,023,049 and
$803,674,931 for Special Income Fund; $1,944,561,485 and
$1,703,214,649 for Managed Fund. Net realized gains (losses) on
investment sales are determined on the basis of identified costs.
Brokerage commissions paid to brokers affiliated with IDS Life were
1,057,532 for Capital Resource Fund, $375,342 for Aggressive Growth
Fund and $226,262 for Managed Fund for the year ended Aug. 31,
1995.
___________________________________________________________________
4. Forward foreign currency contracts
At Aug. 31, 1995, Capital Resource Fund and International Equity
Fund had entered into forward foreign currency exchange contracts
that obligate the Funds to deliver currencies at a specified future
date. The gross unrealized appreciation (depreciation) on these
contracts is included in the accompanying financial statements. The
terms of the open contracts are as follows:
<PAGE>
PAGE 35
Capital Resource Fund
___________________________________________________________________
Currency to Currency to Unrealized
Exchange date be delivered be received depreciation
___________________________________________________________________
Sept. 5, 1995 1,548,461 2,071,500 $ 5,674
U.S. Dollar Canadian Dollar
___________________________________________________________________
International Equity Fund
Currency to Currency to Unrealized
Exchange date be delivered be received depreciation
___________________________________________________________________
Sept. 1, 1995 1,017,258 100,708,594 $12,851
U.S. Dollar Japanese Yen
Sept. 6, 1995 869,172 560,765 --
U.S. Dollar British Pound
Sept. 9, 1995 3,845,354 2,490,031 19,173
U.S. Dollar British Pound
Sept. 29, 1995 2,943,451 14,932,714 16,013
U.S. Dollar French Franc
Sept. 29, 1995 441,902 2,237,039 1,449
U.S. Dollar French Franc
Oct. 31, 1995 44,760,040 38,152,097 832,471
Swiss Franc U.S. Dollar
Nov. 30, 1995 11,090,820,000 118,000,000 3,149,559
Japanese Yen U.S. Dollar
June 28, 1996 2,685,237,500 33,100,000 4,453,647
Japanese Yen U.S. Dollar
__________
$8,485,163
___________________________________________________________________
___________________________________________________________________
5. Options contracts written
The number of contracts and premium amounts associated with option
contracts written by Special Income Fund during the year ended Aug.
31, 1995 is as follows:
Puts Calls
Contracts Premiums Contracts Premium
___________________________________________________________________
Balance Aug. 31, 1994 -- $ -- -- $ --
___________________________________________________________________
Opened 450 164,437 2700 415,719
Closed or expired (250) (84,187) (700) (285,719)
Exercised (200) (80,250) (2,000) (130,000)
___________________________________________________________________
Balance Aug. 31, 1995 -- $ -- -- $ --
<PAGE>
PAGE 36
___________________________________________________________________
6. Lending of portfolio securities
<TABLE><CAPTION>
Presented below is information regarding securities on loan at Aug. 31, 1995.
Capital International Special
Resource Equity Income Managed
_______________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Value of securities on loan to brokers $20,147,414 $46,880,312 $2,566,350 $30,872,386
_______________________________________________________________________________________________________________________
Collateral received for securities loaned:
Cash $16,252,500 $24,690,850 $1,994,000 $ 2,811,670
U.S. Government Securities, at value 4,671,913 23,309,792 674,883 28,664,118
_______________________________________________________________________________________________________________________
Total collateral received for securities
loaned $20,924,413 $48,000,642 $2,668,883 $31,475,788
_______________________________________________________________________________________________________________________
</TABLE>
For the year ended Aug. 31, 1995, income from security lending
transactions amounted to $327,293, $444,845, $51,926 and $402,142
for Capital Resource Fund, International Equity Fund, Special
Income Fund and Managed Fund, respectively, and has been included
with interest income in the statement of operations.
The risks related to security lending transactions are the borrower
may not provide additional collateral when required or return the
securities when due.
___________________________________________________________________
7. Capital share transactions
Transactions in shares of each Fund for the years ended Aug. 31,
1995 and 1994 were as follows:
<TABLE><CAPTION>
Number of shares: Year ended Aug. 31, 1995
_______________________________________________________________________________________________________________________
Capital International Aggressive Special
Resource Equity Growth Income Moneyshare Managed
_______________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Shares at beginning of year 123,760,195 86,049,715 66,571,368 141,040,088 179,257,043 183,064,969
Sold 18,048,365 29,602,833 32,035,435 7,654,880 113,435,448 19,490,950
Issued for reinvested
distributions 17,356,230 1,338,365 638,223 11,415,969 10,162,908 5,727,716
Redeemed (1,723,811) (2,106,010) (1,448,445) (13,019,320) (75,896,018) (3,226,704)
_______________________________________________________________________________________________________________________
Net increase 33,680,784 28,835,188 31,225,213 6,051,529 47,702,338 21,991,962
_______________________________________________________________________________________________________________________
Shares at end of year 157,440,979 114,884,903 97,796,581 147,091,617 226,959,381 205,056,931
_______________________________________________________________________________________________________________________
Number of shares: Year ended Aug. 31, 1994
_______________________________________________________________________________________________________________________
Capital International Aggressive Special
Resource Equity Growth Income Moneyshare Managed
______________________________________________________________________________________________________________________
Shares at beginning of year 93,921,903 25,082,644 25,614,230 128,401,403 179,660,778 129,702,882
Sold 17,017,814 58,988,542 41,343,092 16,667,636 54,009,530 44,299,470
Issued for reinvested
distributions 14,130,743 2,534,743 61,199 10,704,857 5,414,112 10,732,030
Redeemed (1,310,265) (556,214) (447,153) (14,733,808) (59,827,377) (1,669,413)
_______________________________________________________________________________________________________________________
Net increase (decrease) 29,838,292 60,967,071 40,957,138 12,638,685 (403,735) 53,362,087
_______________________________________________________________________________________________________________________
Shares at end of year 123,760,195 86,049,715 66,571,368 141,040,088 179,257,043 183,064,969
_______________________________________________________________________________________________________________________
/TABLE
<PAGE>
PAGE 37
___________________________________________________________________
8. Tax loss carryforward
For federal income tax purposes, International Equity Fund,
Aggressive Growth Fund, Special Income Fund and Managed Fund had
capital loss carryovers at Aug. 31, 1995 of $11,050,244,
$29,350,034, $20,031,747 and 47,700,266, respectively, which, if
not offset by subsequent capital gains, will expire in 2000 through
2004. It is unlikely the board of directors will authorize a
distribution of any net realized gain for a Fund until its capital
loss carryover has been offset or expires.
___________________________________________________________________
9. Financial highlights
"Financial Highlights" showing per share data and selected ratio
information is presented on pages 5-10 of the prospectus.
<PAGE>
PAGE 38
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1995 investments compared to total net assets)
Capital Resource Fund
Investment in securities of unaffiliated issuers
Bonds (2.4%)
Issuer Principal Value(a)
Amount
__________________________________________________________________________________
<S> <C> <C>
Foreign (0.9%)
Cemex (U.S. Dollar)
4.25% Cv 1997 20,000,000 (e) $ 16,800,000
Rogers Communication (U.S. Dollar)
Zero Coupon Cv with attached put
5.51% 2013 50,000,000 (g) 17,062,500
Total 33,862,500
__________________________________________________________________________________
Health care services (0.5%)
Service Corp Intl
6.50% Cv 2001 12,000,000 19,695,000
__________________________________________________________________________________
Media (1.0%)
Comcast
1.125% Cv 2007 75,000,000 39,750,000
__________________________________________________________________________________
Total bonds
(Cost: $89,146,099) $ 93,307,500
__________________________________________________________________________________
Common & preferred stocks & warrants (89.9%)
Issuer Shares Value(a)
__________________________________________________________________________________
Aerospace & defense (0.4%)
General Dynamics 300,000 $ 15,787,500
__________________________________________________________________________________
Airlines (0.6%)
Southwest Airlines 850,000 21,993,750
__________________________________________________________________________________
Automotive & related (0.5%)
General Motors 400,000 18,800,000
__________________________________________________________________________________
Banks and savings & loans (5.2%)
Bank of New York 300,000 13,050,000
First Chicago
$5.50 Cv Pfd 1,492,700 32,093,050
NBD Bancorp 700,000 25,025,000
Northern Trust 1,350,000 60,750,000
Norwest 700,000 21,087,500
State Street Boston 1,324,200 48,829,875
Total 200,835,425
__________________________________________________________________________________
Beverages & tobacco (5.6%)
American Brands 1,000,000 42,000,000
RJR Nabisco 4,200,000 119,700,000
UST 2,000,000 54,500,000
Total 216,200,000
__________________________________________________________________________________
Chemicals (0.7%)
Browning Ferris
$7.25 Cv Pfd 225,000 8,015,625
Sigma-Aldrich 400,000 19,200,000
Total 27,215,625
__________________________________________________________________________________
Computers & office equipment (11.4%)
Apple Computer 2,000,000 86,000,000
Automatic Data Processing 800,000 52,000,000
Compaq Computer 300,000 (b) 14,325,000
First Data 400,000 23,350,000
Fiserv 800,000 (b) 22,800,000
FTP Software 205,000 (b) 4,766,250
<PAGE>
PAGE 39
Hewlett-Packard 250,000 20,000,000
HNC Software 300,000 (b) 7,462,500
Hummingbird Communications 250,000 (b) 8,218,750
Network General 300,000 (b) 10,556,250
Novell 3,900,000 (b) 70,200,000
Pitney Bowes 1,000,000 40,625,000
Policy Mgmt Systems 600,000 (b) 29,700,000
Reynolds & Reynolds Cl A 1,100,000 35,337,500
Technology Solutions 300,000 (b) 4,687,500
Transaction Systems 250,000 (b) 6,125,000
VIASOFT 295,000 (b) 3,097,500
Total 439,251,250
__________________________________________________________________________________
Energy (1.0%)
Mobil 250,000 23,812,500
Unocal 500,000 14,562,500
Total 38,375,000
__________________________________________________________________________________
Financial services (2.7%)
Block (H&R) 1,450,000 56,550,000
Travelers 1,000,000 48,000,000
Total 104,550,000
__________________________________________________________________________________
Food (4.2%)
General Mills 945,000 48,785,625
Kellogg 102,900 6,945,750
Nabisco Holdings Cl A 525,000 15,028,125
Pioneer Hi-Bred Intl 500,000 21,500,000
Quaker Oats 400,000 13,900,000
Tootsie Roll 800,000 31,900,000
Wrigley, Wm Jr 500,000 22,562,500
Total 160,622,000
__________________________________________________________________________________
Foreign (6.1%)
Amway Asia Pacific 300,000 11,925,000
Amway Japan Ltd ADR 500,000 (b) 9,000,000
Astra 850,000 (b) 28,191,100
Femsa Coke 1,100,000 (b,f) 25,437,500
Fulcrum 60,000 (b) 1,230,000
Groupo Casa Autrey ADR 1,000,000 17,250,000
Moore 500,000 (f) 10,437,500
News Corp Ltd ADR 520,000 11,830,000
News Corp Ltd ADR Pfd 260,000 5,265,000
Panamerican Beverages 127,500 3,793,125
Renaissance Energy 125,000 (b) 2,734,695
Repsol S. A. ADR 300,000 9,487,500
Reuters Holdings ADR 300,000 15,712,500
Rogers Communication Cl B 1,600,000 (b) 16,384,896
Royal Dutch Petroleum 110,000 13,117,500
Seagram Ltd 600,000 22,200,000
Sony ADR 450,000 24,806,250
Tamro 1,500,000 6,087,000
Total 234,889,566
__________________________________________________________________________________
Health care (5.3%)
Benson Eyecare 850,000 (b) 7,862,500
Bristol-Myers Squibb 300,000 20,587,500
Centocor 1,500,000 (b) 18,187,500
Genentech 500,000 (b) 23,562,500
Guidant 400,000 (f) 10,100,000
IVAX 750,000 19,218,750
Mylan Labs 1,178,850 26,966,194
Stryker 900,000 37,575,000
Warner-Lambert 300,000 27,112,500
Watson Pharmaceuticals 300,000 (b) 12,412,500
Total 203,584,944
__________________________________________________________________________________
Health care services (6.5%)
Beverly Enterprises 1,300,000 (b) 17,225,000
Cardinal Health 1,172,800 62,744,800
Caremark Intl 1,000,000 20,750,000
Charter Medical 825,000 (b) 16,603,125
Foundation Health 500,000 (b) 17,312,500
<PAGE>
PAGE 40
Gulf South Medical Supply 250,000 (b) 7,062,500
Health Management Systems 300,000 (b) 9,225,000
Horizon Healthcare 250,000 (b) 5,468,750
Retirement Care 250,000 (b) 4,187,500
Service Corp Intl 470,000 16,450,000
Stewart Enterprises Cl A 700,000 22,312,500
United Healthcare 1,000,000 42,250,000
Universal Health Services Cl B 260,300 (b) 8,947,813
Total 250,539,488
__________________________________________________________________________________
Household products (1.1%)
Dial Arizona 400,000 9,600,000
Newell 1,000,000 25,000,000
Playtex Products 600,000 (b) 5,925,000
Total 40,525,000
__________________________________________________________________________________
Industrial machines & services (3.9%)
Caterpillar 400,000 26,850,000
General Signal 700,000 24,850,000
Giddings & Lewis Wisc 1,250,000 20,468,750
Greenfield Industries 400,000 13,500,000
Illinois Tool Works 250,000 15,312,500
Stewart & Stevenson 300,000 9,562,500
WMX Technologies 1,300,000 38,187,500
Total 148,731,250
__________________________________________________________________________________
Industrial transportation (0.4%)
Arnold Industries 800,000 14,300,000
__________________________________________________________________________________
Insurance (5.5%)
ACE Limited 1,000,000 30,750,000
Aetna Life & Casualty 300,000 20,475,000
American Intl Group 450,000 36,281,250
Horace Mann Educators 1,000,000 28,375,000
Reliance Group Holdings 50,000 393,750
UNUM 2,000,000 96,000,000
Total 212,275,000
__________________________________________________________________________________
Leisure time & entertainment (2.1%)
Carnival Cl A 400,000 8,700,000
Circus Circus Enterprises 341,700 (b) 11,190,675
Gaylord Entertainment Cl A 315,000 8,741,250
Harrah's Entertainment 400,000 (b) 12,750,000
Intl Game Technology 1,100,000 15,675,000
Primadonna Resorts 900,000 (b) 18,225,000
Station Casinos 300,000 (b) 5,812,500
Total 81,094,425
__________________________________________________________________________________
Media (12.7%)
ACS Enterprises 400,000 (b) 7,250,000
American Telecasting 350,000 (b) 3,762,500
Comcast Cl A 1,850,000 39,312,500
Cox Communications 600,000 (b) 11,850,000
Dun & Bradstreet 564,100 32,647,287
Gannett 675,000 36,112,500
Information Resources 600,000 (b) 7,725,000
Jacor Communications 551,000 (b) 9,160,375
Liberty Media Cl A 1,925,000 (b) 51,132,812
Marvel Entertainment Group 1,500,000 (b) 21,562,500
People's Choice TV 300,000 (b) 5,775,000
Reader's Digest Cl A 2,000,000 92,500,000
Tele-Communications Cl A 5,225,000 (b) 96,662,500
Time Warner 1,000,000 42,125,000
Turner Broadcasting Cl B 950,000 29,212,500
Viacom Wts C 350,000 (b) 1,487,500
Total 488,277,974
__________________________________________________________________________________
Metals (--%)
Webco Industries 141,700 (b) 921,050
__________________________________________________________________________________
Multi-Industry (2.1%)
General Electric 725,000 42,684,375
Interim Services 325,000 (b) 8,450,000
<PAGE>
PAGE 41
Minnesota Mining & Manufacturing 300,000 16,387,500
Romac 63,300 (b) 1,028,625
Westinghouse Electric 1,000,000 13,625,000
Total 82,175,500
__________________________________________________________________________________
Paper & packaging (1.7%)
Champion Intl 300,000 16,987,500
Crown Cork & Seal 300,000 (b) 13,500,000
Kimberly-Clark 300,000 19,162,500
Stone Container 750,000 (b) 16,312,500
Total 65,962,500
__________________________________________________________________________________
Restaurants & lodging (0.6%)
Darden Restaurants 750,000 (b) 7,687,500
McDonald's 400,000 14,600,000
Total 22,287,500
__________________________________________________________________________________
Retail (5.6%)
Arbor Drugs 500,000 9,375,000
Federated Department Stores 700,000 (b) 18,900,000
Food Lion Cl A 3,000,000 17,250,000
Josten's 300,000 7,200,000
May Department Stores 300,000 12,712,500
Perrigo 650,000 (b) 8,775,000
Quality Food Centers 825,000 20,418,750
Rite Aid 600,000 16,800,000
Ross Stores 300,000 4,800,000
Walgreen 1,550,000 37,975,000
Wal-Mart Stores 2,500,000 61,562,500
Total 215,768,750
__________________________________________________________________________________
Telecommunication equipment & services (0.8%)
NEXTEL Communications Cl A 1,750,000 (b) 31,281,250
__________________________________________________________________________________
__________________________________________________________________________________
Textiles & apparel (0.4%)
Liz Claiborne 600,000 13,650,000
__________________________________________________________________________________
Utilities - telephone (2.8%)
AT & T 500,000 28,250,000
MCI Communications 600,000 14,437,500
Pacific Telesis Group 650,000 18,443,750
U.S. West 875,000 38,062,500
Windstar 500,000(b) 6,687,500
Total 105,881,250
__________________________________________________________________________________
Total common & preferred stocks & warrants
(Cost: $3,093,132,392) $3,455,775,997
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (1.9%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (--%)
Federal Home Loan Mtge Corp Disc Nts
09-08-95 5.69% $ 600,000 $ 599,337
Federal Natl Mtge Assn Disc Nts
09-11-95 5.68 700,000 698,902
Total 1,298,239
__________________________________________________________________________________
Commercial paper (1.9%)
A.I. Credit
09-11-95 5.74 4,600,000 4,592,704
AT & T
09-21-95 5.75 4,200,000 4,186,653
<PAGE>
PAGE 42
Bell Atlantic
09-14-95 5.74 9,700,000 9,679,964
Ciesco
09-13-95 5.75 6,500,000 6,487,607
Colgate Palmolive
09-19-95 5.76 7,000,000 (c) 6,979,945
Goldman Sachs
09-12-95 5.75 1,000,000 998,252
Metlife Funding
09-21-95 5.75 6,000,000 5,980,900
Pepsico
09-28-95 5.76 2,500,000 (c) 2,489,275
Pitney Bowes
09-20-95 5.75 3,100,000 3,090,625
Reed Elsevier
09-12-95 5.75 9,800,000 (c) 9,782,872
Safeco Credit
09-13-95 5.76 4,900,000 4,890,625
Sandoz
09-22-95 5.75 3,900,000 (c) 3,886,964
SW Bell Telephone
09-08-95 5.76 1,300,000 1,298,549
Toyota Motor
09-01-95 5.75 4,400,000 4,400,000
Transamerica Financial
09-27-95 5.77 3,500,000 3,485,490
Total 72,230,425
__________________________________________________________________________________
Total short-term securities
(Cost: $73,528,664) $ 73,528,664
__________________________________________________________________________________
Total investments in securities of unaffiliated issuers
(Cost: $3,255,807,155) $3,622,612,161
__________________________________________________________________________________
Investments in securities of affiliated issuers (d)
Common stocks (6.6%)
Issuer Shares Value(a)
__________________________________________________________________________________
Bolle America 325,000(b) 2,884,375
Career Horizons 525,000(b) 13,125,000
CIBER 340,000(b) 7,990,000
Community Psych Centers 2,629,300 30,894,275
Coram Healthcare 3,875,000(b) 18,890,625
DAKA Intl 300,000(b) 7,987,500
Envoy 600,000(b) 6,300,000
FPA Medical Management 400,000(b) 4,400,000
HCC Insurance 500,000(b) 15,500,000
Health Management 650,000(b,f) 8,815,625
Insurance Auto Auctions 1,100,000(b) 14,025,000
NBTY 1,425,000(b) 8,460,938
Norton McNaughton 715,000(b) 15,193,750
Owens & Minor 2,100,000 30,450,000
PMT Services 475,000(b) 8,906,250
Regency Health Services 1,100,000(b) 12,650,000
Renaissance Solutions 350,000(b) 6,912,500
Spiegel Cl A 810,000 9,618,750
SysteMed 1,275,000(b) 8,128,125
Ventritex 1,150,000(b) 23,287,500
__________________________________________________________________________________
Total investments in securities of affiliated issuers
(Cost: $272,811,155) $ 254,420,213
__________________________________________________________________________________
Total investments in securities
(Cost: $3,528,618,310)(h) $3,877,032,374
__________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Commercial paper sold within terms of a private placement memorandum, exempt from
registration under section 4(2) of the Securities Act of 1933, as amended, and may be
sold only to dealers in that program or other "accredited investors." These securities
have been determined to be liquid under guidelines established by the board of directors.
(d) Investments representing 5% or more of the outstanding voting securities of the issuer.
<PAGE>
PAGE 43
(e) Represents a security sold under Rule 144A which is exempt from registration under the
Securities Act of 1933, as amended. This security has been determined to be liquid under
guidelines established by the board of directors.
(f) Security is partially or fully on loan. See Note 6 to the financial statements.
(g) For zero coupon bonds, the interest rate disclosed represents the annualized effective
yield on the date of acquisition.
(h) At Aug. 31, 1995, the cost of securities for federal income tax purposes was $3,537,538,476
and the aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation ..................................... $ 435,636,636
Unrealized depreciation ..................................... (96,142,738)
__________________________________________________________________________________
Net unrealized appreciation ................................. $ 339,493,898
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 44
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1995 investments compared to total net assets)
International Equity Fund
__________________________________________________________________________________
Common stocks (91.8%)
Issuer Shares Value(a)
__________________________________________________________________________________
<S> <C> <C>
Argentina (1.0%)
Multi-industry conglomerates
Perez Naviera B shares 3,047,940 $ 14,453,331
__________________________________________________________________________________
Australia (4.1%)
Banks and savings & loans (0.7%)
Westpac Banking 2,616,000 9,833,544
__________________________________________________________________________________
Energy (0.5%)
Broken Hill Proprietary 516,516 7,494,647
__________________________________________________________________________________
Industrial transportation (0.8%)
Brambles Inds 1,183,616 11,905,993
__________________________________________________________________________________
Metals (1.6%)
CRA 736,800 11,798,378
Pasminco 9,132,600 11,534,474
___________
Total 23,332,852
__________________________________________________________________________________
Paper & packaging (0.5%)
Amcor 925,000 7,203,900
__________________________________________________________________________________
Brazil (0.6%)
Communications equipment
Telebras ADR 203,800(c) 8,585,075
__________________________________________________________________________________
Canada (1.7)
Aerospace & defense (0.5%)
Bombardier Cl B 600,800 7,327,102
__________________________________________________________________________________
Communications equipment (0.3%)
BCE Mobile 150,300(b) 4,687,430
__________________________________________________________________________________
Electronics (0.5%)
Northern Telecom 177,300 6,515,775
__________________________________________________________________________________
Energy (0.4%)
Rennaissance Energy 255,300(b) 5,585,341
__________________________________________________________________________________
Chile (0.6%)
Utilities - telephone
Telefonos de Chile 116,000 8,468,000
__________________________________________________________________________________
Denmark (0.8%)
Utilities - telephone
TeleDanmark B Shares 220,000 11,552,420
__________________________________________________________________________________
France (8.1%)
Automotive & related (0.4%)
Peugeot 44,305(b) 5,856,678
__________________________________________________________________________________
Banks and savings & loans (1.8%)
Banque Nationale de Paris 122,600 5,029,542
Credit Commercial de France 494,930 21,068,470
______________
Total 26,098,012
__________________________________________________________________________________
Building materials (0.5%)
Lafarge-Coppee (Bearer) 92,614 6,919,748
Lafarge-Coppee Bonus Shares 9,261 691,945
______________
Total 7,611,693
__________________________________________________________________________________
Energy (2.0%)
Societe Nationale Elf Aquitaine 259,820 19,026,359
Total Petroleum Cl B 157,500(c) 9,251,865
_________
Total 28,278,224
__________________________________________________________________________________
<PAGE>
PAGE 45
Financial services (0.4%)
Cie de Suez 131,900 5,437,182
__________________________________________________________________________________
Food (0.7%)
Danone 61,000 10,009,978
__________________________________________________________________________________
Insurance (0.5%)
Union des Assurances Federales 65,000 6,582,745
__________________________________________________________________________________
Metals (0.4%)
Usinor Sacilor 392,840(b) 6,453,968
__________________________________________________________________________________
Multi-industry conglomerates (1.4%)
Lyonnaise des Eaux Dumez 207,000 19,892,700
__________________________________________________________________________________
Germany (1.5%)
Banks and savings & loans (0.9%)
Commerzbank 55,000 12,440,065
__________________________________________________________________________________
Chemicals (0.4%)
Henkel Pfd Shares 13,250 5,058,108
__________________________________________________________________________________
Retail (0.2%)
Karstadt 14,040 6,240,204
__________________________________________________________________________________
Hong Kong (2.5%)
Multi-industry conglomerates (1.6%)
Hutchison Whampoa 2,897,000 13,957,746
Swire Pacific Cl A 1,200,000 8,990,400
___________
Total 22,948,146
__________________________________________________________________________________
Real estate (0.5%)
Sun Hung Kai Properties 941,000 6,837,306
__________________________________________________________________________________
Retail (0.4%)
Dairy Farm Intl 5,500,000(c) 5,115,000
__________________________________________________________________________________
Indonesia (0.2%)
Multi-industry conglomerates
India Fund 350,000 3,412,500
__________________________________________________________________________________
Italy (2.2%)
Insurance (0.6%)
INA 5,993,800 8,295,419
__________________________________________________________________________________
Communications equipment (1.6%)
Stet Risp 2,900,000 7,084,700
Telecom Italia 5,256,000 8,441,136
Telecom Italia Mobil 5,256,000 7,742,088
______________
Total 23,267,924
__________________________________________________________________________________
Japan (28.8%)
Banks and savings & loans (3.8%)
Fuji Bank 391,000 8,198,488
Mitsubishi Bank 185,000(c) 3,784,545
Sakura Bank 1,000,000 10,637,000
Sanwa Bank 883,000 16,889,141
Sumitomo Trust & Banking 1,148,000 15,617,392
____________
Total 55,126,566
__________________________________________________________________________________
Building materials (4.7%)
Asahi Glass 720,000 8,174,160
Daiwa Kosho Lease 880,000 8,568,560
JGC 200,300(c) 2,376,559
NGK Spark Plug 1,280,000(c) 16,888,320
Nihon Cement 1,429,000 9,134,168
Raito Kogyo 424,000 9,107,520
Sho-Bond 180,000(b,c) 5,909,940
Tostem 225,000 7,042,275
___________
Total 67,201,502
__________________________________________________________________________________
Chemicals (0.9%)
Sekisui Chemical 1,014,000 12,757,134
__________________________________________________________________________________
<PAGE>
PAGE 46
Electronics (5.5%)
Hitachi 1,022,000(b) 11,184,768
Kyocera 165,000 14,581,875
Rohm 319,000(c) 19,675,282
TDK 400,000 20,579,600
Yokogawa Electric 1,370,000 12,891,700
___________
Total 78,913,225
__________________________________________________________________________________
Health care (1.1%)
Banyu Pharmaceuticals 433,000 4,782,918
Sankyo Pharmaceuticals 465,000 10,368,570
____________
Total 898,000 15,151,488
__________________________________________________________________________________
Industrial equipment & services (1.8%)
Mitsubishi Heavy Inds 2,000,000 14,298,000
Secom 170,000 11,180,730
____________
Total 25,478,730
__________________________________________________________________________________
Insurance (1.1%)
Tokio Marine & Fire 1,381,000 16,385,565
__________________________________________________________________________________
Leisure time & entertainment (0.3%)
Sega Enterprises 110,400(c) 4,799,198
__________________________________________________________________________________
Metals (0.6%)
Hitachi Metals 718,000 8,371,880
__________________________________________________________________________________
Paper & packaging (0.7%)
Nippon Paper Inds 1,530,000 9,764,460
__________________________________________________________________________________
Real estate (1.7%)
Mitsubishi Estates 620,000 7,292,440
Mitsui Fudosan 1,300,000 16,754,400
____________
Total 24,046,840
__________________________________________________________________________________
Retail (1.6%)
Amway Japan 52,000 1,882,868
Autobocs Seven 40,000(b) 4,132,320
Family Mart 31,500 1,385,465
Ito-Yokado 132,000 7,034,412
Marui 472,000 8,303,896
___________
Total 22,738,961
__________________________________________________________________________________
Telecommunications (1.1%)
DDI 1,800 15,207,896
__________________________________________________________________________________
Transportation (0.7%)
Nippon Express 1,184,000 10,220,288
__________________________________________________________________________________
Wire & cable (2.4%)
Nippon Denso 800,000 14,401,600
NTN 1,261,000 8,422,219
Sumitomo Electric Inds 950,000 12,340,500
___________
Total 35,164,319
__________________________________________________________________________________
Miscellaneous (0.8%)
Itochu 1,848,000 11,490,864
__________________________________________________________________________________
Malaysia (2.6%)
Banks and savings & loans (0.3%)
Malayan Banking 603,500 4,958,356
__________________________________________________________________________________
Building materials (0.6%)
United Engineers 1,370,000 9,169,410
__________________________________________________________________________________
Leisure time & entertainment (0.3%)
Resorts World 809,000 4,214,890
__________________________________________________________________________________
Multi-industry conglomerates (0.7%)
Sime Darby 3,720,000 9,467,400
__________________________________________________________________________________
Utilities - telephone (0.7%)
Telekom Malaysia 1,497,000 10,499,958
__________________________________________________________________________________
<PAGE>
PAGE 47
Mexico (1.1%)
Building materials (0.9%)
Cemex & Telmex Series A ADR 75,000 649,995
Cemex & Telmex Series B ADR 1,130,000 5,193,644
Empresas ICA Sociedad Controladora ADR 553,500(c) 6,642,000
___________
Total 12,485,639
__________________________________________________________________________________
Financial services (0.1%)
Banorte Series C 828,000(b) 1,253,146
__________________________________________________________________________________
Retail (0.1%)
Benavides B Shares 586,900 748,001
__________________________________________________________________________________
Netherlands (4.5%)
Chemicals (1.1%)
Akzo Nobel 140,260 16,546,192
__________________________________________________________________________________
Food (1.1%)
Unilever 127,000 15,661,640
__________________________________________________________________________________
Industrial equipment & services (0.2%)
Stork VMF 116,035 2,928,143
__________________________________________________________________________________
Insurance (0.9%)
Intl Nederlanden Groep 227,055 12,619,490
__________________________________________________________________________________
Media (1.2%)
Elsevier 1,400,000 17,707,200
__________________________________________________________________________________
New Zealand (1.2%)
Paper & packaging
Carter Holt Harvey 3,851,000 8,764,876
Fletcher Challenge 3,263,100 8,869,106
___________
Total 17,633,982
__________________________________________________________________________________
Norway (0.5%)
Energy (0.3%)
Saga Petroleum Cl A 343,860 4,315,443
__________________________________________________________________________________
Industrial transportation (0.2%)
First Olsen Tankers 408,000(b) 3,116,712
__________________________________________________________________________________
Philippines (0.4%)
Utilities - telephone
Philippines Long Distance Telephone ADR 99,900(c) 6,281,213
__________________________________________________________________________________
Singapore (4.1%)
Automotive & related (0.8%)
Cycle & Carriage 1,306,000 11,945,982
__________________________________________________________________________________
Banks and savings & loan (1.2%)
Development Bank Singapore 539,500(b) 6,149,221
Overseas Union Bank 1,714,350 10,613,541
___________
Total 16,762,762
__________________________________________________________________________________
Beverages & tobacco (0.7%)
Fraser & Neave 916,600 10,383,245
__________________________________________________________________________________
Industrial equipment & services (0.5%)
Sembawang Shipyard 1,243,000 7,127,362
__________________________________________________________________________________
Industrial transportation (0.9%)
Keppel 1,647,000 13,210,587
__________________________________________________________________________________
Spain (4.3%)
Banks and savings & loans (1.8%)
Argentaria Bancaria de Espana 380,000 14,514,860
Banco Popular de Espana 70,000 10,773,490
___________
Total 25,288,350
__________________________________________________________________________________
Energy (0.9%)
Repsol 414,000 12,990,906
__________________________________________________________________________________
Telecommunications (1.6%)
Telefonica 1,669,800 22,635,809
__________________________________________________________________________________
<PAGE>
PAGE 48
Sweden (1.7%)
Industrial equipment & services
Asea B Free Shares 94,500 8,366,463
Ericsson (LM) B Free 750,000(b) 16,034,250
____________
Total 24,400,713
__________________________________________________________________________________
Switzerland (2.7%)
Banks and savings & loans (1.3%)
Swiss Bank 113,500(b) 19,381,374
__________________________________________________________________________________
Health care (1.4%)
Sandoz 28,500 20,554,799
__________________________________________________________________________________
Thailand (0.5%)
Banks and savings & loans
Siam Commercial Bank 616,000 6,636,784
__________________________________________________________________________________
United Kingdom (16.1%)
Banks and savings & loans (1.7%)
Natl Westminster 2,611,744 23,853,058
__________________________________________________________________________________
Beverages & tobacco (1.7%)
BAT Inds 1,310,000 10,246,820
Guinness 1,780,000 13,563,600
_____________
Total 23,810,420
__________________________________________________________________________________
Health care (1.7%)
Glaxo Holdings 1,643,800 19,541,494
SmithKline Beecham 580,065 5,383,583
______________
Total 24,925,077
__________________________________________________________________________________
Leisure time & entertainment (1.5%)
Rank Organisation 3,225,000 22,071,900
__________________________________________________________________________________
Machinery (1.8%)
Siebe 2,530,000 26,112,130
__________________________________________________________________________________
Metals (0.8%)
RTZ 907,000 12,288,943
__________________________________________________________________________________
Multi-industry conglomerates (2.0%)
Ampolex 3,953,821 9,331,018
BTR 2,000,000 10,584,000
Framlington Maghreb Fund Units 50,000(b) 2,281,250
Hanson 2,172,800 7,300,608
___________
Total 29,496,876
__________________________________________________________________________________
Retail (2.6%)
Argyll Group 3,230,000 17,645,490
Kingfisher 1,128,095 7,965,479
Next 1,958,100 11,729,019
____________
Total 37,339,988
__________________________________________________________________________________
Transportation (1.4%)
British Airways 3,050,000 20,163,550
__________________________________________________________________________________
Utilities - telephone (0.9%)
Vodafone Group 3,328,995 13,688,827
__________________________________________________________________________________
Total common stocks
(Cost: $1,250,927,329) $1,324,276,435
__________________________________________________________________________________
Other (0.1%)
Japan
Fujitsu
Warrants 11,000 $ 1,342,020
__________________________________________________________________________________
Total other
(Cost: $2,036,136) $ 1,342,020
__________________________________________________________________________________
<PAGE>
PAGE 49
Bond (0.5%)
Issuer Principal Value (a)
Amount
__________________________________________________________________________________
Renong
(U.S. Dollar)
2.50% Cv 2005 $6,000,000(d) $ 7,125,000
(Cost $6,005,618)
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (9.5%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.4%)
Federal Natl Mtge Assn
09-05-95 5.68% $ 900,000 $ 899,435
09-12-95 5.67 4,300,000 4,292,576
___________
Total 5,192,011
__________________________________________________________________________________
Commercial paper (9.1%)
Banc One Milwaukee
09-19-95 5.74 3,700,000 3,688,069
Barclays U.S. Funding
09-29-95 5.75 5,700,000 5,674,686
BBV Finance (Delaware)
09-21-95 5.76 6,000,000 5,980,900
CAFCO
09-22-95 5.75 2,500,000 2,491,658
Cargill
09-22-95 5.74 5,000,000 4,983,317
09-22-95 5.77 5,000,000 4,983,317
Ciesco LP
09-27-95 5.75 5,900,000 5,875,626
CIT Group
09-06-95 5.79 3,900,000 3,896,885
09-29-95 5.79 5,900,000 5,873,614
Colgate Palmolive
09-18-95 5.78 2,700,000(e) 2,692,669
09-28-95 5.77 4,300,000(e) 4,281,521
Commerzbank
09-15-95 5.76 8,000,000 7,982,173
Deutsche Bank Financial
09-11-95 5.76 2,800,000 2,795,551
Harris Bank
09-18-95 5.77 6,500,000 6,500,000
Intel
09-26-95 5.74 4,200,000 4,183,346
Lilly (Eli)
10-02-95 5.76 6,500,000 6,467,984
Metlife
09-21-95 5.76 10,200,000 10,167,530
Natl Bank Detroit Canada
09-28-95 5.75 2,000,000 1,991,420
PACCAR Financial
09-20-95 5.75 5,000,000 4,984,905
Penney (JC) Funding
09-11-95 5.76 3,700,000 3,694,111
09-20-95 5.76 2,700,000 2,691,835
PepsiCo
09-29-95 5.77 900,000 895,989
Pitney Bowes Credit
10-10-95 5.68 4,000,000 3,972,454
SAFECO Credit
09-14-95 5.80 3,700,000 3,692,291
Southern California Gas
10-11-95 5.77 2,500,000 2,484,083
Toyota Motor
09-05-95 5.76 6,900,000 6,895,607
Transamerica Financial
09-27-95 5.77 6,400,000 6,373,468
<PAGE>
PAGE 50
USL Capital
10-06-95 5.76 4,400,000 4,375,531
U S WEST
09-07-95 5.94 1,000,000 998,887
___________
Total 131,569,427
__________________________________________________________________________________
Total short-term securities
(Cost: $136,776,782) $ 136,761,438
__________________________________________________________________________________
Total investments in securities
(Cost: $1,395,745,865)(f) $1,469,504,893
__________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Security is partially or fully on loan. See Note 6 to the financial statements.
(d) Represents a security sold under Rule 144A, which is exempt from registration under
the Securities Act of 1933, as amended. This security has been determined to be liquid
under guidelines established by the board of directors.
(e) Commercial paper sold within terms of a private placement memorandum, exempt from
registration under section 4(2) of the Securities Act of 1933, as amended, and may be
sold only to dealers in that program or other "accredited investors." This security has
been determined to be liquid under guidelines established by the board of directors.
(f) At Aug. 31, 1995, this also represents the cost of securities for federal income tax
purposes. The aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $ 127,406,605
Unrealized depreciation (53,647,577)
__________________________________________________________________________________
Net unrealized appreciation $ 73,759,028
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 51
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1995 investments compared to total net assets)
Aggressive Growth Fund
__________________________________________________________________________________
Bond (0.3 %)
Issuer Principal Value(a)
Amount
__________________________________________________________________________________
<S> <C> <C>
Boston Chicken
Zero Coupon Cv with attached put
8.00% 2015 $20,000,000 (e) $ 4,675,000
(Cost: $4,249,115)
__________________________________________________________________________________
Common & preferred stocks (87.9%)
Issuer Shares Value(a)
__________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (0.5%)
Loral 140,000 7,665,000
__________________________________________________________________________________
Automotive & related (0.3%)
Titan Wheel Intl 157,600 4,215,800
__________________________________________________________________________________
Banks and savings & loans (2.9%)
Bank of Boston 280,000 12,320,000
Citicorp 175,000 11,615,625
First Fidelity Bancorporation 120,000 7,845,000
Green Tree Financial 160, 000 9,320,000
Total 41,100,625
__________________________________________________________________________________
Beverages & tobacco (0.7%)
Canandaigua Wine 210,000 (b) 9,922,500
__________________________________________________________________________________
Building materials (1.2%)
Centex 250,000 7,312,500
Tyco Intl 150,000 8,868,750
Total 16,181,250
__________________________________________________________________________________
Chemicals (2.1%)
Air Products & Chem 130,000 6,971,250
IMC Global 120,000 7,590,000
Praxair 310,000 8,060,000
U.S. Filter 350,000 (b) 7,700,000
Total 30,321,250
__________________________________________________________________________________
Communications equipment (5.2%)
ADC Telecommunications 280,000 (b) 10,850,000
See accompanying notes to investments in securities.
Andrew 110,000 (b) 6,407,500
Ascend Communications 100,000 (b) 6,450,000
BroadBand Technologies 220,000 (b) 5,390,000
Cascade Communications 100,000 (b) 4,550,000
EIS Intl 330,000 (b) 6,228,750
General Instrument 180,000 (b) 6,570,000
Mobile Telecommunication Technologies 225,000 (b) 6,918,750
Stratacom 140,000 (b) 6,860,000
Tellabs 275,000 (b) 12,856,250
Total 73,081,250
__________________________________________________________________________________
Computers & office equipment (19.4%)
American Management Systems 375,000 (b) 9,562,500
Broadway & Seymour 370,000 (b) 10,498,750
Ceridian 210,000 (b) 9,187,500
Cisco Systems 485,000 (b) 31,828,125
Computer Sciences 180,000 (b) 10,845,000
Computron Software 12,700 (b) 241,300
First Data 130,000 7,588,750
Gateway 2000 250,000 (b) 6,656,250
Informix 280,000 (b) 7,840,000
<PAGE>
PAGE 52
Intersolv 290,000 (b) 5,727,500
Key Tronic 300,000 (b) 4,575,000
Komag 110,000 (b) 6,847,500
Macromedia 150,000 (b) 7,462,500
Mercury Interactive 270,000 (b) 6,108,750
MicroAge 440,000 (b) 5,170,000
Minnesota Educational Computing 230,000 (b) 6,670,000
National Data 225,000 5,793,750
NETCOM 190,000 (b) 7,101,250
Network General 250,000 (b) 8,796,875
Novell 300,000 (b) 5,400,000
Oracle 450,000 (b) 18,056,250
Parametric Technology 280,000 (b) 15,470,000
Sanmina 150,000 (b) 6,825,000
Sierra On-line 270,000 (b) 10,530,000
Silicon Graphics 180,000 (b) 7,605,000
Softkey Intl 190,000 (b) 7,576,250
Sterling Software 200,000 (b) 8,925,000
Storemedia 106,700 (b) 4,428,050
Symantec 220,000 (b) 6,352,500
Synopsys 115,000 (b) 6,670,000
3Com 300,000 (b) 11,700,000
Wonderware 180,000 (b) 6,210,000
Total 274,249,350
__________________________________________________________________________________
Electronics (11.5%)
AVX 231,900 (b) 7,362,825
Applied Materials 90,000 (b) 9,360,000
Atmel 260,000 (b) 8,222,500
Credence Systems 210,000 (b) 7,402,500
Cypress Semiconductor 140,000 (b) 6,387,500
GaSonics Intl 150,000 (b) 5,212,500
Intel 125,000 7,671,875
Integrated Device Technology 240,000 (b) 13,830,000
ITI Technologies 260,000 (b) 7,280,000
ITEL 185,000 (b) 6,983,750
KLA Instruments 80,000 (b) 6,840,000
LAM Research 100,000 (b) 6,025,000
Linear Technology 120,000 9,720,000
Maxim Integrated Products 140,000 (b) 10,675,000
Microchip Technologies 250,000 (b) 9,500,000
Micron Technology 220,000 16,912,500
Molex 180,000 7,740,000
Plasma & Materials Technologies 80,000 (b) 1,520,000
Vishay Intertechnology 130,000 (b) 5,265,000
Xilinx 180,000 (b) 7,717,500
Total 161,628,450
__________________________________________________________________________________
Energy (0.5%)
Noble Affiliates 240,000 6,630,000
__________________________________________________________________________________
Energy equipment and services (1.6%)
Baker Hughes 350,000 7,875,000
Fluor 130,000 7,605,000
Global Marine 1,100,000 (b) 7,425,000
Total 22,905,000
__________________________________________________________________________________
Financial services (3.1%)
ADVANTA A 20,000 827,500
ADVANTA B 200,000 7,475,000
First Financial Management 50,000 4,506,250
Olympic Financial 300,000 (b) 6,862,500
Paychex 360,000 14,760,000
Price (T. Rowe) Associates 75,000 3,562,500
Salomon 160,000 6,140,000
Total 44,133,750
__________________________________________________________________________________
Foreign (7.1%)
Astra A 205,000 6,799,030
Autoliv 120,000 (b) 7,252,680
Danka Business Systems 400,000 12,100,000
Loewen Group 210,000 8,032,500
Nera Telecom 42,000 (b) 1,372,875
Nokia Preferred 350,000 (b) 24,281,250
Renaissance Energy 275,000 (b) 6,016,329
<PAGE>
PAGE 53
SAP Preferred 75,000 11,104,650
Schlumberger 120,000 7,740,000
Seagram 210,000 7,770,000
Teva Pharmaceutical ADR 200,000 7,575,000
Total 100,044,314
__________________________________________________________________________________
Health care (9.1%)
Amgen 170,000 (b) 8,138,750
AMSCO Intl 400,000 (b) 7,150,000
Arrow Intl 150,000 6,150,000
Autoimmune 291,500 (b) 4,190,312
Biogen 140,000 (b) 7,665,000
Biomet 450,000 (b) 7,312,500
CliniCom 325,000 (b) 6,987,500
Cordis 110,000 (b) 8,497,500
Emisphere Technologies 252,400 (b) 1,956,100
Forest Labs 164,100 (b) 7,343,475
Gensia 300,000 (b) 1,687,500
Gilead Sciences 275,000 (b) 5,981,250
IDEXX Laboratories 850,000 (b) 28,793,750
Medtronic 90,000 8,493,750
SciClone Pharmaceuticals 602,100 (b) 5,268,375
Sequus Pharmaceuticals 353,300 (b) 4,637,062
Target Therapeutics 160,000 (b) 7,800,000
Total 128,052,824
__________________________________________________________________________________
Health care services (5.2%)
Caremark Intl 350,000 7,262,500
Curative Technologies 140,000 (b) 1,837,500
Foundation Health 106,800 (b) 3,697,950
HBO & Company 532,000 29,260,000
Medaphis 250,000 (b) 5,781,250
Patterson Dental 250,000 (b) 6,500,000
PhyCor 180,000 (b) 7,515,000
Physician Resources Group 275,000 (b) 4,846,875
Stewart Enterprises 220,000 7,012,500
Total 73,713,575
__________________________________________________________________________________
Industrial equipment & services (4.9%)
Case 200,000 7,550,000
Cincinnati Milacron 225,000 7,453,125
Computational Systems 85,000 (b) 1,317,500
Energy Biosystems
8% Cv Pfd 35,000 (b,c) 1,627,500
KEMET 120,000 (b) 6,840,000
Lincoln Electric 250,000 (b) 7,406,250
Littlefuse 215,000 (b) 7,148,750
Sanifill 300,000 (b) 9,562,500
Thermo Electron 300,000 (b) 12,937,500
United Waste Systems 200,000 (b) 7,750,000
Total 69,593,125
__________________________________________________________________________________
Insurance (0.6%)
Horace Mann Educators 275,000 7,803,125
__________________________________________________________________________________
Leisure time & entertainment (1.3%)
Ride 421,700 (b) 7,379,750
Station Casinos 385,000 (b) 7,459,375
3DO 300,000 (b) 3,862,500
Total 18,701,625
__________________________________________________________________________________
Media (1.3%)
Infinity Broadcasting Cl A 225,000 (b) 8,071,875
Thomas Nelson 53,400 1,361,700
Viacom Cl B 170,000 (b) 8,266,250
Total 17,699,825
__________________________________________________________________________________
Multi-industry conglomorates (0.8%)
Kelly Services 250,000 7,187,500
Veeco Instruments 206,000 (b) 4,635,000
Total 11,822,500
__________________________________________________________________________________
<PAGE>
PAGE 54
Paper & packaging (1.0 %)
Crown Cork & Seal 175,000 (b) 7,875,000
Stone Container 300,000 6,525,000
Total 14,400,000
__________________________________________________________________________________
Restaurants & lodging (1.3%)
Applebee's Intl 150,000 4,500,000
Boston Chicken 50,000 (b) 1,200,000
Hospitality Franchise 260,000 (b) 12,187,500
Total 17,887,500
__________________________________________________________________________________
Retail (5.3%)
CUC Intl 460,000 (b) 15,697,500
Egghead 500,000 (b) 6,000,000
Family Dollar Stores 400,000 7,300,000
Federated Dept Stores 260,000 (b) 7,020,000
General Nutrition 184,200 (b) 7,690,350
Jostens 330,000 7,920,000
Office Depot 210,000 (b) 6,536,250
Rite Aid 260,000 7,280,000
Viking Office Products 270,000 (b) 9,720,000
Total 75,164,100
__________________________________________________________________________________
Textiles & apparel (0.5%)
Nine West Group 175,000 (b) 7,459,375
__________________________________________________________________________________
Utilities - telephone (0.5%)
Palmer Wireless 300,000 (b) 6,900,000
__________________________________________________________________________________
Total common & preferred stocks
(Cost: $912,331,536) $1,241,276,113
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (12.2%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.3%)
Federal Home Loan Mtge Corp Disc Nts
09-20-95 5.66% $4,500,000 $ 4,486,605
__________________________________________________________________________________
Certificate of Deposit (0.4 %)
NationsBank Nts
09-12-95 5.75 5,600,000 5,587,527
__________________________________________________________________________________
Commercial paper (11.5%)
Amer General
09-13-95 5.76 8,100,000 8,084,529
10-11-95 5.77 8,200,000 8,147,702
Avco
09-27-95 5.75 3,900,000 3,883,860
CAFCO
09-05-95 5.75 7,300,000 7,295,352
09-14-95 5.75 5,000,000 4,989,672
10-26-95 5.75 6,000,000 5,947,750
Cargill
09-05-95 5.75 4,900,000 4,896,897
09-22-95 5.77 5,000,000 4,983,317
CIT Group
09-26-95 5.76 8,400,000 8,366,575
Commerzbank U.S. Finance
10-03-95 5.76 2,200,000 2,188,795
CPC Intl
09-21-95 5.89 9,700,000(d) 9,665,850
Dresdner U.S. Finance
09-06-95 5.83 7,000,000 6,993,743
Fleet Funding
09-19-95 5.75 7,000,000(d) 6,979,945
Goldman Sachs
09-12-95 5.75 7,800,000 7,786,367
<PAGE>
PAGE 55
Household Finance
09-12-95 5.78 8,500,000 8,485,066
Lilly (Eli)
10-13-95 5.70 7,500,000 7,444,951
Merrill Lynch
11-07-95 5.76 2,500,000 2,472,422
Metlife Funding
09-01-95 5.75 7,600,000 7,600,000
Mobil Australia
10-31-95 5.79 3,500,000(d) 3,465,366
Motorola
09-14-95 5.75 4,200,000 4,191,325
Norfolk Southern
09-18-95 5.96 1,100,000(d) 1,096,370
Pacific Mutual
09-06-95 5.76 1,100,000 1,099,123
Penney J.C. Funding
09-11-95 5.76 900,000 898,568
PepsiCo
09-29-95 5.77 6,500,000 6,471,032
Pitney Bowes Credit
10-10-95 5.68 6,000,000 5,958,681
Safeco Credit
09-07-95 5.95 6,000,000 5,992,379
Sandoz
10-24-95 5.75 5,500,000 5,451,149
11-20-95 5.78 3,500,000 3,454,010
Southwestern Bell Capital
10-05-95 5.67 3,000,000(d) 2,981,881
USL Capital
10-12-95 5.77 1,800,000 1,788,253
US WEST
09-08-95 5.92 2,900,000 2,896,194
Total 161,957,124
__________________________________________________________________________________
Total short-term securities
(Cost: $172,070,010) $ 172,031,256
__________________________________________________________________________________
Total investments in securities
(Cost: $1,088,650,661)(f) $1,417,982,369
__________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Represents securities sold under Rule 144A, which are exempt from registration
under the Securities Act of 1933, as amended. These securities have been determined to
be liquid under guidelines established by the board of directors.
(d) Commerical paper sold within terms of a private placement memorandum, exempt from
registration under section 4(2) of the Securities Act of 1933, as amended, and may be
sold only to dealers in that program or other "accredited investors." These securities
have been determined to be liquid under guidelines established by the board of directors.
(e) For zero coupon bonds, the interest rate disclosed represents the annualized effective
yield on the date of acquisition.
(f) At Aug. 31, 1995, the cost of securities for federal income tax purposes was
$1,089,815,426 and the aggregate gross unrealized appreciation and depreciation based on
that cost was:
Unrealized appreciation...................................... $ 337,503,485
Unrealized depreciation...................................... (9,336,542)
__________________________________________________________________________________
Net unrealized appreciation.................................. $ 328,166,943
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 56
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1995 investments compared to total net assets)
Special Income Fund
Bonds (92.8%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
___________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (14.0%)
Resolution Financial Trust Company Strips
Zero Coupon 8.03% 2015 70,000,000(k) $ 17,949,400
Resolution Funding 8.125 2019 7,065,000 8,083,278
U.S. Treasury Bonds 7.25 2016 12,700,000 13,415,518
7.50 2016 40,000,000 43,398,400
8.125 2019 50,000,000 57,973,500
U.S. Treasury Notes 6.375 2002 14,000,000 14,136,080
7.50 2001 50,000,000 53,405,500
7.875 1996 30,000,000 30,300,300
Total 238,661,976
___________________________________________________________________________________________________________________________________
Mortgage backed securities (18.2%)
Federal Home Loan Mtge Corp 8.00 2024 4,876,823 4,983,528
8.00 2024 5,802,648 5,929,610
9.00 2007 14,724,221 15,437,462
9.00 2025 4,653,507 4,858,541
Collateralized Mtge Obligation 7.00 2022 10,455,000 10,046,210
7.00 2022 12,940,000 12,417,095
8.50 2022 10,000,000 10,731,400
Inverse Floater 2.90 2023 6,101,857(g) 3,193,773
Inverse Floater 3.56 2024 16,150,000(g) 7,957,912
Federal Natl Mtge Assn 6.00 2024 9,727,651 9,128,817
6.50 2023 70,216,631 67,539,973
6.50 2010 14,589,673 14,393,587
8.00 2021 898,870 918,250
8.00 2022 5,994,391 6,123,630
8.50 2007 15,338,113 15,922,648
8.50 2023 12,287,226 12,701,920
9.00 2005 31,173,102 32,702,454
9.00 2024 12,895,107 13,459,267
Inverse Floater 3.76 2023 7,244,751(g) 4,388,581
Inverse Floater 1.75 2021 10,977,637(g) 6,630,822
Government Natl Mtge Assn 6.00 2023 19,644,461 18,355,392
6.00 2024 24,024,378 22,447,899
Adjustable Rate Mortgage 6.00 2024 9,544,390(i) 9,699,486
Total 309,968,257
___________________________________________________________________________________________________________________________________
Airlines (1.1%)
AMR 9.50 2001 4,500,000 4,920,660
See accompanying notes to investments in securities.
Delta Air Lines
Sr Deb 10.375 2011 6,250,000 7,316,687
Reno Air
Cv 9.00 2002 1,000,000(d,h) 995,000
United Air Lines 10.67 2004 4,500,000 5,229,990
Total 18,462,337
___________________________________________________________________________________________________________________________________
Automotive & related (2.2%)
Ford Motor Credit 7.50 2003 5,000,000 5,181,850
GMAC 5.95 1998 10,000,000 9,829,500
7.85 1997 20,000,000 20,614,400
Mascotech 4.50 2003 3,500,000 2,616,250
Total 38,242,000
___________________________________________________________________________________________________________________________________
Banks and savings & loans (1.1%)
BankAmerica 7.50 2002 7,500,000 7,769,925
Fleet/Norstar Fin'l 9.00 2001 5,000,000 5,537,250
9.90 2001 5,000,000 5,716,350
Total 19,023,525
<PAGE>
PAGE 57
___________________________________________________________________________________________________________________________________
Building materials (1.3%)
Centex 9.05 1996 5,000,000 5,092,100
Georgia-Pacific 8.125 2023 5,000,000 4,990,750
MDC Holding 11.125 2003 2,500,000 2,246,875
Masco 9.00 2001 5,000,000 5,572,950
Peters (JM) 12.75 2002 1,380,000 1,243,725
Southdown
Sub Nts 14.00 2001 3,000,000 3,382,500
Total 22,528,900
___________________________________________________________________________________________________________________________________
Chemicals (0.7%)
G-I Holdings
Zero Coupon
Sub Nts 11.37 1998 4,000,000(k) 2,910,000
General Chemical 9.25 2003 5,000,000 4,975,000
Huntsman 11.00 2004 3,500,000 3,845,625
Total 11,730,625
___________________________________________________________________________________________________________________________________
Computers & office equipment (0.2%)
Conner Peripherals
Cv 6.50 2002 3,000,000 2,610,000
___________________________________________________________________________________________________________________________________
Electronics (0.2%)
Berg Electronics 11.375 2003 3,000,000 3,165,000
___________________________________________________________________________________________________________________________________
Energy (2.9%)
Atlantic Richfield 8.75 2032 10,000,000 11,652,300
Mesa Capital 12.75 1998 5,000,000(j) 4,625,000
Occidental Petroleum 10.98 2000 5,000,000 5,820,150
with attached put 9.25 2019 8,725,000 10,332,319
Oryx Energy 10.00 2001 5,000,000 5,456,250
PDV America 7.875 2003 7,500,000 6,853,050
Triton Energy
Zero Coupon 9.75 1996 5,000,000(l) 4,525,000
Total 49,264,069
___________________________________________________________________________________________________________________________________
Energy equipment & services (0.2%)
McDermott 9.375 2002 3,000,000 3,378,150
___________________________________________________________________________________________________________________________________
Financial services (1.8%)
Developers Div Realty 7.00 1999 1,500,000 1,520,625
First Union REIT
Sub Nts 8.875 2003 4,000,000 3,560,000
GPA Delaware 8.75 1998 3,000,000 2,670,000
Household Finance 9.55 2000 6,500,000 7,250,685
Liberty Property Trust
Cv 8.00 2001 1,250,000 1,268,750
Malan Realty REIT
Cv 9.50 2004 2,750,000 2,437,187
Olympic Financial 13.00 2000 6,500,000 6,865,625
Salomon 8.91 1998 4,800,000 4,983,888
Total 30,556,760
___________________________________________________________________________________________________________________________________
Food (0.1%)
Specialty Foods 11.25 2003 1,000,000(d) 995,000
Zero Coupon 13.00 1999 1,000,000(d,l) 515,000
Total 1,510,000
___________________________________________________________________________________________________________________________________
Foreign (21.3%)(c)
Aegon
(Euro Dollar) Cv 4.75 2004 1,175,000 1,421,750
Alcan Aluminum
(U.S. Dollar) 8.875 2022 6,750,000 7,338,398
Banca Italy N.Y.
(U.S. Dollar) 8.25 2007 5,000,000 5,206,600
Carter Holt Harvey
(U.S. Dollar) 8.875 2004 5,000,000 5,636,150
City of Helsinki
(U.S. Dollar) Sr Nts 7.95 2006 2,000,000(e) 1,889,200
(U.S. Dollar) 8.40 2007 1,800,000(e) 1,768,500
(U.S. Dollar) 8.45 2006 1,200,000(e) 1,176,000
(U.S. Dollar) 8.70 2006 1,600,000(e) 1,596,480
(U.S. Dollar) 9.20 2006 1,500,000(e) 1,524,750
<PAGE>
PAGE 58
Doman Industries
(U.S. Dollar) 8.75 2004 5,000,000 4,856,250
Ford Capital BV
(U.S. Dollar) 9.875 2002 5,000,000 5,814,700
Govt of Canada
(Canadian Dollar) 7.82 2001 17,000,000 14,229,289
Govt of Poland
(U.S. Dollar) Stepup Nts 3.25 2014 38,000,000(j) 23,251,250
(U.S. Dollar) 7.75 2000 7,000,000(d) 7,000,000
(U.S. Dollar) Stepup Nts 2.75 2024 15,000,000(j) 6,581,250
Groupe Videotron
(U.S. Dollar) 10.625 2005 2,000,000 2,110,000
Guang Dong Enterprise
(U.S. Dollar) 8.75 2003 7,500,000(d) 6,756,000
Gulf Canada Resources
(U.S. Dollar) 9.00 1999 5,000,000 5,075,000
Hydro Quebec
(U.S. Dollar) 8.50 2029 20,000,000 21,634,600
Korea Electric Power
(U.S. Dollar) 7.75 2013 3,100,000 3,132,395
MacMillan Bloedel
(U.S. Dollar) 8.50 2004 7,500,000 8,123,025
Mexican U.S. Series C
(U.S. Dollar) 6.938 2019 4,000,000(b,g) 2,845,000
Mexican Cetes
(Mexican Peso)
Zero Coupon
Treasury Bill -- 1996 79,102,180 10,662,104
Treasury Bill -- 1996 152,704,770 21,081,199
Treasury Bill -- 1996 40,277,580 5,663,431
Ogden
(Euro Dollar) Cv 6.00 2002 2,200,000 2,021,250
Petronas
(U.S. Dollar) Cv 7.75 2015 10,000,000(d) 10,203,700
Philip Long Distance Telephone
(U.S. Dollar) 10.625 2004 2,500,000 2,675,000
Province of Quebec
(U.S. Dollar) 11.00 2015 2,500,000 2,996,475
PT Indah Kiat Pulp & Paper
(U.S. Dollar) 11.875 2002 5,000,000 5,156,250
Pueblo Extra Int'l
(U.S. Dollar) Sr Nts 9.50 2003 4,000,000 3,840,000
Qantas Air
(U.S. Dollar) 7.50 2003 7,500,000(d) 7,494,375
Repap New Brunswick
(U.S. Dollar) 10.625 2005 2,000,000 2,027,500
Republic of Argentina
(U.S. Dollar) 4.25 2023 25,000,000 11,796,875
(U.S. Dollar) 7.125 2023 10,000,000 5,712,500
(U.S. Dollar) 7.31 2005 34,300,000 20,987,313
Republic of Brazil
(U.S. Dollar) 4.00 2014 35,113,500 17,447,020
(U.S. Dollar) 4.00 2024 10,000,000 4,543,750
(U.S. Dollar) 5.187 2024 7,500,000(j) 4,298,438
(U.S. Dollar) 6.06 2001 9,500,000 7,855,313
(U.S. Dollar) 6.75 2012 5,000,000 2,640,625
(U.S. Dollar) 7.25 2006 10,000,000 6,200,000
Republic of Columbia
(U.S. Dollar) 7.25 2004 5,300,000 4,851,885
Republic of Italy
(U.S. Dollar) 6.875 2023 7,500,000 6,760,800
Rogers Cable Systems
(Canadian Dollar) 9.65 2014 2,700,000 1,684,106
Rogers Cantel Mobile
(U.S. Dollar) 10.75 2001 3,000,000 3,108,750
Tarkett
(U.S. Dollar) 9.00 2002 4,000,000(d) 4,050,000
Telecom Argentina
(U.S. Dollar) 8.375 2000 5,000,000(d) 4,400,000
Telekom Malaysia
(U.S. Dollar) 7.875 2025 10,000,000(d) 10,285,700
United Kingdom Treasury
(British Pound) 8.00 2003 9,500,000 14,740,010
United Mexican States
(U.S. Dollar) 8.50 2002 9,000,000 7,957,620
WMC Finance USA
(U.S. Dollar) 7.25 2013 10,000,000 9,898,900
Total 362,007,476
<PAGE>
PAGE 59
___________________________________________________________________________________________________________________________________
Furniture & appliances (0.6%)
Black & Decker 6.625 2000 10,000,000 9,950,000
___________________________________________________________________________________________________________________________________
Health care (0.1%)
Chiron
Cv 1.90 2000 1,400,000 1,263,500
___________________________________________________________________________________________________________________________________
Health care services (1.8%)
Amerisource Distribution
Pay-in-kind -- 2005 1,996,339(m) 2,138,578
Charter Medical
Sr Sub Nt 11.25 2004 5,000,000(d) 5,400,000
Columbia/HCA Healthcare 7.69 2025 6,500,000 6,559,735
Foundation Health 7.75 2003 3,250,000 3,309,800
Hillhaven 10.125 2001 3,000,000 3,266,250
Tenet Healthcare
Sr Sub Nt 10.125 2005 8,800,000 9,262,000
Total 29,936,363
___________________________________________________________________________________________________________________________________
Household products (0.3%)
Revlon Consumer Products 9.375 2001 2,500,000 2,481,250
Sweetheart Cup
Sr Sub Nt 9.625 2000 2,000,000 1,975,000
Total 4,456,250
___________________________________________________________________________________________________________________________________
Industrial machines & services (1.0%)
ADT Operations 9.25 2003 3,500,000 3,626,875
Case 7.25 2005 5,000,000 5,052,200
Clark Equipment 9.75 2001 5,000,000 5,623,750
IDEX 9.75 2002 3,000,000 3,172,500
Total 17,475,325
___________________________________________________________________________________________________________________________________
Industrial transportation (0.3%)
CSX 9.23 1998 5,000,000 5,315,950
___________________________________________________________________________________________________________________________________
Insurance (1.3%)
Americo Life 9.25 2005 4,500,000 4,156,875
NAC Re
Cv 5.25 2002 2,000,000(d,e) 1,975,000
Nationwide CSN Trust 9.875 2025 6,500,000(d) 7,245,355
Nationwide Mutual 7.50 2024 4,000,000(d) 3,726,000
New England Mutual
Credit Sensitive Nts 7.875 2024 5,000,000(d) 4,756,750
Total 21,859,980
___________________________________________________________________________________________________________________________________
Leisure time & entertainment (0.8%)
Bally's Park Place Funding
1st Mtge 9.25 2004 3,500,000 3,294,375
GNF Bally 10.625 2003 2,450,000 2,128,438
MGM Grand Hotel Finance 12.00 2002 3,000,000 3,296,250
Premier Parks 12.00 2003 2,500,000 2,525,000
Trump Taj Mahal
Pay-in-kind -- 1999 3,627,187(m) 3,046,837
Total 14,290,900
___________________________________________________________________________________________________________________________________
Media (4.4%)
Ackerley Communications
Sr Secured Nts 10.75 2003 2,500,000(d) 2,628,125
Adelphia Communications 12.50 2002 3,000,000 3,093,750
Benedek Broadcast
Sr Nts 11.875 2005 1,875,000(d) 1,980,469
Cablevision Systems 10.75 2004 2,000,000 2,132,500
Continental Cablevision
Sr Deb 8.875 2005 5,000,000 5,031,250
Cox Communications 7.625 2025 10,000,000 9,865,100
News America Holdings 7.50 2000 7,000,000 7,140,000
8.875 2023 7,000,000 7,691,250
12.00 2001 5,000,000 5,581,250
Paramount Communications 7.00 2003 2,500,000 2,381,325
Scandinavian Broadcasting
Cv 7.25 2005 5,000,000(d) 5,437,500
Time Warner Entertainment 8.375 2033 7,500,000 7,509,375
6.835 2000 2,500,000(j) 2,521,875
<PAGE>
PAGE 60
7.975 2004 1,500,000 1,524,375
8.11 2006 3,000,000 3,063,750
8.18 2007 3,000,000 3,060,000
Zero Coupon Cv 6.59 2012 4,750,000(k) 1,603,125
ViaCom Intl 8.00 2006 3,000,000 2,925,000
Total 75,170,019
___________________________________________________________________________________________________________________________________
Metals (0.8%)
Magma Copper 12.00 2001 5,000,000 5,531,250
Sahaviriya
Cv 3.50 2005 3,000,000(d,h) 3,030,000
Santa Fee Gold 8.375 2005 5,000,000 4,956,250
Total 13,517,500
___________________________________________________________________________________________________________________________________
Multi-industry (0.5%)
Fairchild Industries 12.25 1999 2,000,000 2,037,500
Mark IV Industries 8.75 2003 3,500,000 3,587,500
Tally
Zero Coupon 12.25 1998 1,750,000(l) 1,225,000
Tally Mfg & Technology 10.75 2003 2,500,000 2,500,000
Total 9,350,000
___________________________________________________________________________________________________________________________________
Natural gas (1.2%)
Tenneco Credit 9.625 2001 10,000,000 11,242,000
Transco Energy 9.875 2020 6,000,000 7,267,500
Transtexas Gas
Sr Secured Nts 11.50 2002 2,500,000 2,631,250
Total 21,140,750
___________________________________________________________________________________________________________________________________
Paper & packaging (3.1%)
Chesapeake 9.875 2003 5,000,000 5,826,700
Crown Cork & Seal 8.00 2023 5,000,000 5,072,100
Federal Paperboard 10.00 2011 6,000,000 7,271,100
Gaylord
Zero Coupon 11.23 1996 5,500,000(l) 5,500,000
Owens Illinois 11.00 2003 5,000,000 5,475,000
Plastic Container 10.75 2001 2,000,000 2,052,500
Pope & Talbot 8.375 2013 4,000,000 3,739,480
Sapi
Cv 7.50 2002 2,000,000(d) 2,062,500
Scotia Pacific Holding 7.95 2015 6,822,720 6,971,250
Silgan
Sr Sub Nt 11.75 2002 2,000,000 2,112,500
Zero Coupon 13.25 1995 2,000,000(l) 1,862,500
Stone Container 9.875 2001 3,000,000 2,977,500
12.625 1998 1,500,000 1,650,000
Total 52,573,130
___________________________________________________________________________________________________________________________________
Restaurants & lodging (0.2%)
Hammons (John Q) Hotel 8.875 2004 3,400,000 3,221,500
___________________________________________________________________________________________________________________________________
Retail (2.0%)
Dairy Mart Stores 10.25 2004 1,500,000 1,261,875
Eye Care Ctr
Cv 12.00 2003 3,000,000(d) 2,550,000
Kroger 9.25 2005 3,000,000 3,240,000
Pathmark Stores 9.625 2003 5,000,000 5,000,000
Penn Traffic 9.625 2005 6,000,000 4,860,000
Penney (JC) 9.05 2001 5,000,000 5,563,650
Pep Boys
Cv 4.00 1999 1,500,000 1,410,000
Ralph's Grocery 10.45 2004 3,500,000 3,430,000
Revco 9.125 2000 2,000,000 2,085,000
Stop & Shop 9.75 2002 3,000,000 3,243,750
Super-Rite Foods
Sr Sub Nts 10.625 2002 2,000,000 2,170,000
Total 34,814,275
___________________________________________________________________________________________________________________________________
Telecommunications equipment & services (0.8%)
Celcaribe 13.50 2004 3,150,000(d,k) 2,384,750
CenCall Communications
Zero Coupon 16.48 1999 4,000,000(l) 2,075,000
Comcast Cellular
Zero Coupon with attached put 9.53 1995 5,500,000(k) 4,104,375
<PAGE>
PAGE 61
Panamsat
Sr Nts 9.75 2000 3,000,000 3,120,000
U.S. Cellular
Zero Coupon with attached put 6.00 2015 3,400,000(k) 1,202,750
Total 12,886,875
___________________________________________________________________________________________________________________________________
Textiles & apparel (0.9%)
Dominion Textiles 8.875 2003 4,000,000 3,985,000
JP Stevens 9.00 2017 2,500,000 2,475,000
VF 9.50 2001 5,000,000 5,663,100
WestPoint Stevens 8.75 2001 2,500,000 2,471,875
Total 14,594,975
___________________________________________________________________________________________________________________________________
Utilities - electric (4.9%)
Arizona Public Service 8.75 2024 2,500,000 2,690,800
Boston Edison 9.875 2020 5,000,000 5,647,600
Cleveland Electric 9.50 2005 6,000,000 6,112,260
Long Island Lighting 9.625 2024 9,000,000 9,326,340
Louisiana Power & Light
Sale Lease-Backed Obligation 10.67 2017 2,500,000 2,664,750
Midland Cogeneration Venture 10.33 2002 2,010,227 2,078,072
10.33 2002 1,731,663(d) 1,790,107
11.75 2005 5,000,000 5,206,250
North Atlantic Energy 9.05 2002 4,718,000 4,930,310
Pacific Gas & Electric 7.25 2026 6,000,000 5,778,120
RGS Funding AEGCO
Sale Lease-Backed Obligation 9.82 2022 2,483,988 3,010,767
RGS Funding IME
Sale Lease-Backed Obligation 9.82 2022 2,485,315 3,012,375
Sithe Independent Funding 9.00 2013 7,500,000(d) 8,080,050
Texas-New Mexico Power 11.25 1997 5,000,000 5,143,750
1st Mtge 9.25 2000 3,500,000 3,648,750
Texas Utilities 9.70 2002 6,000,000 6,934,320
Texas Utilities Electric
1st Mtge 9.75 2021 6,350,000 7,365,683
Total 83,420,304
___________________________________________________________________________________________________________________________________
Utilities - telephone (1.7%)
Bell Telephone Company of Pennsylvania 7.375 2033 10,000,000 9,794,400
GTE 10.25 2020 7,000,000 8,112,370
Geotek Comm
Zero Coupon Cv 7.10 2005 5,000,000(d,k) 2,500,000
New England Tel & Tel 9.00 2031 7,500,000 8,357,625
Total 28,764,395
___________________________________________________________________________________________________________________________________
Miscellaneous (0.8%)
Coty 10.25 2005 1,500,000(h) 1,554,375
KinderKare Learning Center 10.375 2001 3,000,000 3,108,750
Samsonite 11.125 2005 2,500,000(d) 2,553,125
Standard Credit Card 8.625 2002 6,590,000 6,813,442
Total 14,029,692
___________________________________________________________________________________________________________________________________
Total bonds
(Cost: $1,516,490,971) $1,579,140,758
___________________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 62
<TABLE>
<CAPTION>
Common & preferred stocks and warrants (0.7%)
________________________________________________________________________________________
Issuer Shares Value(a)
________________________________________________________________________________________
<S> <C> <C>
ABN Amro Holdings
6% Cv 41,100 $ 1,502,040
Celcaribe 276,420(b,d) 359,346
Envirodyne Industries 90,890(b) 397,644
Federated Department Stores
Warrants Exp 02-15-96 6,000(b) 25,875
First Chicago
2.875% Cm Cv 42,500 2,571,250
First Nationwide Bank
11.50% 25,000 2,687,500
Great Bay Power 30,222(b) 249,332
Methanex 200,000(b) 1,475,000
Nat'l Health Investors
8.50% Cv 40,000 1,065,000
Purity Supreme
Warrants Exp 08-06-97 8,664(b,e) 173
Security Pacific
1.75% Cv 73,500 1,745,625
Southdown
Warrants Exp 10-15-96 30,000(b,e) 135,000
Specialty Foods 15,000(b) 26,250
Triangle Wire Cable 84,444(b,e) 168,888
_______________________________________________________________________________________
Total common & preferred stocks & warrants
(Cost: $17,777,944) $12,408,923
_______________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 63
<TABLE>
<CAPTION>
Short-term securities (5.3%)
_______________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
_______________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.4%)
Federal Home Loan Mtge Corp Disc Notes 5.66 800,000 $ 797,610
09-20-95
Federal Natl Mtge Assn Disc Notes
09-26-95 5.68 5,900,000 5,876,728
Total 6,674,338
_______________________________________________________________________________________
Commercial paper (4.7%)
Alabama Power
09-19-95 5.73 4,900,000 4,885,961
Albertson's
09-14-95 5.73 5,200,000 5,189,240
American General
10-11-95 5.74 4,200,000 4,173,213
AT&T Capital
09-21-95 5.72 5,800,000 5,781,569
Avco Financial
09-27-95 5.73 5,500,000 5,477,239
10-04-95 5.73 7,400,000 7,361,131
Barclays US Funding
09-28-95 5.72 4,000,000 3,982,840
CAFCO
09-05-95 5.73 3,100,000 3,098,026
Cargill
09-25-95 5.73 1,400,000(f) 1,394,652
USL Capital
10-03-95 5.72 3,400,000 3,382,713
Intel Corp
09-05-95 5.74 6,600,000 6,595,791
Metlife Fund
09-05-95 5.72 3,100,000 3,098,030
Motorola
09-12-95 5.73 7,500,000 7,486,869
Paccar Financial
10-05-95 5.73 5,000,000 4,972,942
Pacific Mutual Life
09-06-95 5.74 11,900,000 11,890,513
Penney (JC) Funding
09-20-95 5.73 600,000 598,186
Total 79,368,915
_______________________________________________________________________________________
Letter of credit (0.2%)
First Chicago
Commed Fuel
10-05-95 5.75 3,700,000 3,679,907
_______________________________________________________________________________________
Total short-term securities
(Cost: $89,723,160) $ 89,723,160
_______________________________________________________________________________________
Total investments in securities
(Cost: $1,623,992,075)(m) $1,681,272,841
_______________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing. For long-term debt securities, items identified are
in default as to payment of interest or principal.
(c) Foreign securities values are stated in U.S. dollars; principal amounts are denominated
in the currency indicated.
(d) Represents securities sold under Rule 144A, which are exempt from registration under the
Securities Act of 1933, as amended. These securities have been determined to be liquid under
guidelines established by the board of directors.
(e) Identifies issues considered to be illiquid as to their marketability (see Note 1 to the
financial statements). Information concerning such security holdings at Aug. 31, 1995, is as
follows:
<PAGE>
PAGE 64
Security Acquisition Purchase
date cost
_______________________________________________________________________________________
City of Helsinki
7.95% 2006 02-07-95 $1,851,900
8.40% 2007 02-07-95 1,739,592
8.45% 2006 02-07-95 1,153,368
8.70% 2006 02-07-95 1,565,584
9.20% 2006 02-07-95 1,500,000
NAC Re Cv
5.25% 2002 01-20-94 1,870,000
Purity Supreme Warrants
Exp 08-06-97 07-29-92 -
Southdown Warrants
Exp 10-15-96 10-30-91 90,000
Triangle Wire Cable 01-13-92 2,000,018
_______________________________________________________________________________________
(f) Commercial paper sold within terms of a private placement memorandum, exempt from
registration under section 4(2) of the Securities Act of 1933, as amended, and may be
sold only to dealers in that program or other "accredited investors." These securities
have been determined to be liquid under guidelines established by the board of directors.
(g) Inverse floaters represent securities that pay interest at a rate that increases
(decreases) in the same magnitude as, or in a multiple of, a decline (increase) in the
LIBOR (London InterBank Offered Rate) Index. Interest rate disclosed is the rate in effect
on Aug. 31, 1995.
(h) Security is partially or fully on loan. See Note 6 to the financial statements.
(i) Adjustable rate mortgage; interest rate varies to reflect current market conditions;
shown is the effective rate on Aug. 31, 1995.
(j) Interest rate varies to reflect current market conditions; rate shown is the effective
rate on Aug. 31, 1995.
(k) For zero coupon bonds, the interest rate disclosed represents the annualized effective
yield on the date of acquisition.
(l) For zero coupon bonds, the interest rate disclosed represents the annualized effective
yield from the date of acquisition to interest reset date shown in the maturity year column.
(m) Pay-in-kind securities are securities in which the issuer has the option to make interest
payments in cash or in additional securities. These securities issued as interest usually have
the same terms, including maturity date, as the pay-in-kind securities.
(n) At Aug. 31, 1995, the cost of securities for federal income tax purposes was $1,623,974,298
and the aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation . . . . . . . . . . . . . . . . . . . . . . $77,448,997
Unrealized depreciation . . . . . . . . . . . . . . . . . . . . . .(20,150,454)
_______________________________________________________________________________________
Net unrealized appreciation . . . . . . . . . . . . . . . . . . . . $57,298,543
_______________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 65
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1995 investments compared to total net assets)
Moneyshare Fund
__________________________________________________________________________________________
Short-term securities
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________________
<S> <C> <C> <C>
Commercial paper (73.2%)
Automotive & related (1.6%)
USL Capital
10-12-95 5.77 $3,600,000 $ 3,576,507
__________________________________________________________________________________________
Banks and savings & loans (9.1%)
ABN AMRO North Amer Finance
10-13-95 5.71 5,000,000 4,967,158
10-13-95 5.72 2,000,000 1,986,817
Bank of New York
06-03-96 6.41 1,000,000 1,000,000
BBV Finance Delaware
11-03-95 5.80 3,100,000 3,068,915
Deutsche Bank Financial
09-21-95 5.75 2,700,000 2,691,420
Harris Trust Bank Notes
09-18-95 5.77 3,000,000 3,000,000
Societe Generale
10-26-95 5.77 4,000,000 3,965,045
Total 20,679,355
__________________________________________________________________________________________
Commercial finance (1.9%)
Ciesco LP
09-21-95 5.92 3,000,000 2,990,283
09-27-95 5.75 1,400,000 1,394,216
Total 4,384,499
__________________________________________________________________________________________
Energy (2.4%)
Chevron Transport
09-07-95 5.77 5,400,000(b) 5,394,834
__________________________________________________________________________________________
Financial services (31.9%)
Associates North Amer
10-12-95 5.79 1,200,000 1,192,155
Beneficial
01-23-96 5.84 1,000,000(c) 1,000,000
CIT Group Holdings
09-06-95 5.79 6,900,000 6,894,490
Commercial Credit
09-01-95 5.75 7,700,000 7,700,000
Fleet Funding
09-19-95 5.75 1,300,000(b) 1,296,276
09-25-95 5.79 4,900,000(b) 4,881,217
10-27-95 5.79 3,800,000(b) 3,766,129
General Electric Capital Services
10-02-95 5.76 6,000,000 5,970,395
10-16-95 5.72 4,000,000 3,971,800
Goldman Sachs
09-15-95 5.96 3,000,000 2,993,152
10-18-95 5.76 5,000,000 4,962,922
Merrill Lynch
09-15-95 5.80 3,100,000 3,093,044
10-23-95 5.77 2,200,000 2,181,823
11-07-95 5.76 500,000 494,714
Nat'l Australia Funding
10-05-95 5.70 6,700,000 6,664,386
PACCAR Financial
11-29-95 5.75 3,300,000 3,253,742
Transamerica Finance
10-23-95 5.78 5,000,000 4,958,689
10-27-95 5.77 4,100,000 4,063,519
USAA Capital
09-22-95 5.73 3,000,000 2,990,078
Total 72,328,531
<PAGE>
PAGE 66
__________________________________________________________________________________________
Health care (3.9%)
Amgen
11-17-95 5.80 5,000,000 4,938,828
Lilly (Eli)
10-02-95 5.75 4,000,000 3,980,298
Total 8,919,126
__________________________________________________________________________________________
Insurance (6.9%)
American General
09-12-95 5.76 5,700,000(b) 5,690,020
Aon
10-23-95 5.75 1,600,000 1,586,827
11-06-95 5.94 2,300,000 2,275,543
Safeco Credit
09-12-95 5.73 6,000,000 5,989,587
Total 15,541,977
__________________________________________________________________________________________
Retail (2.3%)
Penney (JC)
09-06-95 5.75 5,300,000 5,295,789
__________________________________________________________________________________________
Soaps & cosmetics(4.1%)
Colgate Palmolive
09-18-95 5.77 4,300,000(b) 4,288,324
10-20-95 5.75 5,000,000(b) 4,961,413
Total 9,249,737
__________________________________________________________________________________________
Transportation (1.1%)
Consolidated Rail
09-22-95 5.96 2,600,000(b) 2,591,097
__________________________________________________________________________________________
Utilities - electric (4.1%)
Bayshore Fuel
10-11-95 5.77 9,400,000 9,340,258
__________________________________________________________________________________________
Utilities - telephone (3.9%)
AT&T Capital
10-16-95 5.71 4,900,000 4,865,455
Southwestern Bell Capital
09-12-95 5.88 4,000,000(b) 3,992,911
Total 8,858,366
__________________________________________________________________________________________
Total commercial paper
(Cost: $166,160,076) $166,160,076
__________________________________________________________________________________________
Letters of credit (23.2%)
Domestic (6.1%)
Bank of Amer
Aes Baarbers Point
10-20-95 5.78 5,000,000 4,961,004
Bank of New York
River Fuel
09-14-95 5.78 5,000,000(b) 4,989,636
First Chicago
Commed Fuel
09-18-95 5.74 4,000,000 3,989,271
Total 13,939,911
<PAGE>
PAGE 67
__________________________________________________________________________________________
International (17.1%)
Banque Pariabas
75 State Street
10-04-95 5.77 4,600,000 4,575,670
Barclays Bank
Banco Real
10-25-95 5.72 3,000,000 2,974,260
10-25-95 6.10 2,000,000 1,981,700
Credit Agricole
Louis Dreyfus
09-08-95 5.77 3,800,000 3,795,737
09-11-95 5.76 1,000,000 998,400
09-26-95 5.76 800,000 796,800
Credit Suisse
Pasimco Finance
09-11-95 5.75 1,500,000 1,497,604
Pemex Capital
09-05-95 5.91 2,500,000 2,498,358
09-27-95 5.85 3,500,000 3,485,213
10-05-95 5.74 5,000,000 4,972,894
Societe Generale
JMG Funding
10-24-95 5.75 4,000,000 3,966,139
Union Bank of Switzerland
River Fuel Trust
09-14-95 5.75 7,200,000(b) 7,185,050
Total 38,727,825
__________________________________________________________________________________________
Total letters of credit
(Cost: $52,667,736) $ 52,667,736
__________________________________________________________________________________________
Certificates of deposit (3.9%)
Domestic (3.0%)
Nationsbank of North Carolina
09-12-95 5.75 6,900,000 6,900,000
__________________________________________________________________________________________
International (0.9%)
Societe Generale Callable
06-13-96 6.30 1,000,000 1,000,000
Societe Generale Yankee
09-03-96 6.05 1,000,000 1,000,000
Total 2,000,000
__________________________________________________________________________________________
Total certificates of deposit
(Cost: $8,900,000) $ 8,900,000
__________________________________________________________________________________________
Total investments in securities
(Cost: $227,727,812)(d) $227,727,812
__________________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Commercial paper sold within terms of a private placement memorandum, exempt from
registration under Section 4(2) of the Securities Act of 1933, as amended, and may be
sold only to dealers in that program or other "accredited investors." These securities
have been determined to be liquid under guidelines established by the board of directors.
(c) Interest rate varies to reflect current market conditions; rate shown is the effective
rate on Aug 31, 1995.
(d) At Aug. 31, 1995, this cost also represents the cost of securities for federal income
tax purposes.
</TABLE>
<PAGE>
PAGE 68
<TABLE>
<CAPTION>
Investments in securities
Retirement Annuity Mutual Funds (Percentages represent value of
August 31, 1995 investments compared to total net assets)
Managed Fund
Bonds (22.8%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
__________________________________________________________________________________
<S> <C> <C> <C> <C>
U.S. government obligations (5.8%)
U.S. Treasury Bond 8.875% 2017 $32,450,000 $ 40,241,894
6.25 2023 14,000,000 13,141,100
U.S. Treasury Notes
5.125 1998 11,500,000 11,265,110
5.375 1998 25,000,000 24,656,250
5.50 1996 10,400,000(g) 10,388,352
5.625 1997 30,200,000 30,090,072
5.75 2003 20,500,000 19,826,985
7.50 2001 1,666,000 1,779,471
7.50 2005 4,400,000(g) 4,761,900
7.75 2000 20,100,000 21,381,576
Total 177,532,710
__________________________________________________________________________________
Mortgage-backed securities (4.0%)
Federal Home Loan Mtge Corp 8.00 2024 5,157,635 5,270,484
Trust Series Z 6.00 2023 5,552,100(j) 4,436,683
Trust Series Z 6.50 2023 5,206,629(j) 4,178,320
Federal Natl Mtge Assn 6.00 2024 6,905,669 6,480,556
6.50 2010 11,676,650 11,519,716
6.50 2023 2,728,590 2,624,576
Trust Series Z 7.00 2016 4,960,470(j) 4,741,019
7.40 2004 10,000,000(g) 10,541,400
8.00 2022 6,502,390 6,642,582
8.50 2023 8,191,767 8,468,239
9.00 2024 4,993,055 5,211,501
Trust Series Z 6.00 2024 6,564,024(j) 4,870,834
Trust Series Z 7.00 2019 5,953,203(j) 5,705,490
Trust Series Z 7.00 2022 12,952,948(j) 12,135,099
Trust Series Z 7.50 2014 6,436,972(j) 6,106,691
Governmant Natl Mtge Assn 7.00 2024 25,322,003 24,942,173
Total 123,875,363
__________________________________________________________________________________
Aerospace & defense (--%)
Alliant Tech Systems
Sr Sub Nts 11.75 2003 700,000 761,250
__________________________________________________________________________________
Automotive & related (0.3%)
GMAC 5.95 1998 7,000,000 6,899,690
8.375 1997 1,400,000 1,444,282
Total 8,343,972
__________________________________________________________________________________
Banks and savings & loans (0.4%)
First USA Bank 6.88 1996 6,700,000 6,749,982
Riggs Natl
Sub Nts 8.50 2006 4,900,000 4,808,125
Total 11,558,107
__________________________________________________________________________________
Building materials (0.2%)
Georgia Pacific 8.125 2023 3,000,000 2,994,450
Owens Corning Fiberglass 9.375 2012 1,500,000 1,697,100
Schuller Int'l Group 10.875 2004 1,750,000 1,929,375
Total 6,620,925
__________________________________________________________________________________
Communications equipment (0.3%)
Celcaribe
Zero Coupon 2.14 2004 1,450,000(d,f) 1,254,250
Cencel 10.125 1999 3,100,000(h) 1,608,125
Comcast Cellular
Zero Coupon attached put 9.45 2000 5,000,000(f) 3,731,250
U.S. Cellular
Zero Coupon Cv attached put 6.00 2015 10,000,000(f) 3,537,500
Total 10,131,125
<PAGE>
PAGE 69
__________________________________________________________________________________
Computers & office equipment (0.7%)
Conner Peripherals
Cv 6.75 2001 10,000,000 8,700,000
Silicon Graphics
Zero Coupon Cv attached put 4.15 2013 20,000,000(d,f) 13,750,000
Total 22,450,000
__________________________________________________________________________________
Energy (0.3%)
Parker & Parsley 8.25 2007 4,200,000 4,279,422
Standard Oil 9.00 2019 4,000,000 4,331,400
Total 8,610,822
__________________________________________________________________________________
Financial services (1.5%)
Associates Corp NA 7.25 1998 10,000,000 10,252,800
AVCO Financial 7.25 1999 4,750,000 4,869,272
Corporate Property Investors 7.18 2013 2,200,000(d) 2,065,206
General Electric Capital 8.65 2018 1,000,000 1,016,580
GPA Delaware 8.75 1998 1,900,000 1,691,000
Int'l Lease Finance 9.82 1995 2,000,000 2,021,280
Olympic Financial 13.00 2000 2,000,000 2,112,500
Salomon Brothers 6.75 2006 4,000,000 3,630,880
Salomon-Oracle ELK
Cv Pfd 7.25 1996 15,010,000(i) 6,698,212
Salomon Hewlett-Packard ELK
Cv Pfd 5.25 1997 10,000,000(i) 9,912,500
Total 44,270,230
__________________________________________________________________________________
Foreign (2.5%)(c)
Bank of China
(U.S. Dollar) 8.25 2014 2,500,000 2,307,100
Carter Holt Harvey
(U.S. Dollar) 8.375 2015 4,500,000 4,871,295
Doman Inds
(U.S. Dollar) 8.75 2004 2,000,000 1,942,500
Gov't Certificates of Israel
(U.S. Dollar) 9.25 2001 3,000,000 3,268,200
Hydro Quebec
(Canadian Dollar) 10.875 2001 2,500,000 2,085,443
(U.S. Dollar) 9.50 2030 2,500,000 2,996,925
KFW Int'l Finance
(U.S. Dollar) 8.00 2010 4,000,000 4,382,560
LeGrand
(U.S. Dollar) 8.50 2025 1,800,000 1,995,714
Mexican U.S. Series D
(U.S. Dollar) 6.25 2019 1,500,000(k) 910,313
(U.S. Dollar) 7.25 2019 1,500,000(k) 1,066,875
Petronas
(U.S. Dollar) 7.75 2015 6,000,000(d) 6,122,220
Phillipines Long Distance Telephone
(U.S. Dollar) 10.625 2004 1,400,000 1,498,000
Poland
(Euro Dollar) Stepup 3.25 2014 4,600,000 2,814,625
PT Inda Kiat Pulp & Paper
(U.S. Dollar) 11.875 2002 2,500,000 2,578,125
Quno
(U.S. Dollar) 9.125 2005 2,500,000 2,475,000
Republic of Argentina
(U.S. Dollar) 7.312 2005 7,000,000(k) 4,283,125
Republic of Brazil
(U.S. Dollar) 4.00 2014 1,040,400(k) 516,949
(U.S. Dollar) 6.75 2012 1,600,000 845,000
Republic of Colombia
(U.S. Dollar) 7.25 2004 5,000,000 4,577,250
Republic of Italy
(U.S. Dollar) 6.875 2023 5,000,000 4,507,200
Republic of New Brunswick
(U.S. Dollar) 10.625 2005 1,400,000(g) 1,419,250
Roche Holding
(U.S. Dollar) Cv attached put 6.65 2010 30,000,000(d,f) 11,700,000
Rogers Cable System
(Canadian Dollar) 9.65 2014 5,000,000 3,118,715
Telekom Malaysia
(U.S. Dollar) 7.875 2025 3,000,000(d) 3,085,710
Total 75,368,094
<PAGE>
PAGE 70
__________________________________________________________________________________
Health care (0.5%)
Johnson & Johnson 8.00 1998 10,000,000 10,227,400
Schering-Plough
Zero Coupon 7.31 1996 5,000,000(d,f) 4,638,850
Total 14,866,250
__________________________________________________________________________________
Health care services (0.4%)
Charter Medical
Sr Sub 11.25 2004 2,000,000(d) 2,160,000
Foundation Health
Sr Nts 7.75 2003 6,600,000 6,721,440
La Petite Holdings 9.625 2001 1,200,000 1,045,500
Tenet Healthcare
Sr Sub 10.125 2005 2,000,000 2,105,000
Total 12,031,940
__________________________________________________________________________________
Household products (0.1%)
Sweetheart Cup 9.625 2000 2,000,000 1,975,000
__________________________________________________________________________________
Industrial equipment & services (0.2%)
Case 7.25 2005 5,000,000 5,052,200
__________________________________________________________________________________
Insurance (0.6%)
Aetna Life & Casualty 7.25 2023 4,200,000 3,815,406
Nationwide Mutual 7.50 2024 4,000,000(d) 3,726,000
New England Mutual
Credit Sensitive Nts 7.875 2024 2,000,000(d) 1,902,700
Principal Mutual 8.00 2044 2,500,000(d) 2,341,900
SunAmerica 7.34 2005 5,000,000 5,084,650
Total 16,870,656
__________________________________________________________________________________
Leisure time & entertainment (0.1%)
Alliance Entertainment 11.25 2005 1,000,000(d) 1,003,750
Premier Parks 12.00 2003 1,400,000 1,414,000
Trump Tajmahal
Zero Coupon Pay-in-kind -- 1999 2,250,000(i) 1,890,000
Total 4,307,750
__________________________________________________________________________________
Media (1.8%)
Aldelphia Communications 9.875 2005 1,500,000 1,381,875
America Media Oper 11.625 2004 875,000 900,156
Benedek Broadcasting 11.875 2005 1,575,000(d) 1,663,594
Comcast
Cv 3.375 2005 10,000,000 10,312,500
Cv 1.125 2007 10,000,000 5,300,000
Cox Communication 7.625 2025 5,000,000 4,932,550
News America Holdings 7.50 2000 4,000,000 4,080,000
Paramount Communications 7.00 2003 2,000,000 1,905,060
TCI Communications 8.75 2015 3,000,000 3,129,990
Tele-Communications 7.875 2013 1,150,000 1,095,467
8.75 2023 1,500,000 1,493,670
Time Warner
Zero Coupon Cv 6.62 2012 41,900,000(f) 14,141,250
Viacom Intl 8.00 2006 4,000,000 3,900,000
Total 54,236,112
__________________________________________________________________________________
Multi-industry conglomerates (0.2%)
Crane 7.25 1999 2,000,000 2,022,560
Fairchild Inds 12.25 1999 1,600,000 1,630,000
Tally Inds 5.00 1998 2,500,000(h) 1,750,000
Total 5,402,560
__________________________________________________________________________________
Paper & packaging (0.4%)
Container 10.75 2002 2,500,000 2,640,625
Gaylord 3.10 1996 2,150,000(h) 2,150,000
Pope and Talbot 8.375 2013 3,800,000 3,552,506
Stone Container 9.875 2001 2,500,000 2,481,250
Total 10,824,381
<PAGE>
PAGE 71
__________________________________________________________________________________
Retail (0.3%)
Grand Union 12.00 2004 1,700,000 1,623,500
Penn Traffic 9.625 2005 3,500,000 2,835,000
Pep Boys 7.00 2005 4,200,000 4,196,430
Ralphs Grocery 10.45 2004 1,500,000 1,470,000
Total 10,124,930
__________________________________________________________________________________
Restaurants & lodging (--%)
Flagstar 10.875 2002 1,500,000 1,381,875
__________________________________________________________________________________
Utilities - electric (1.0%)
Alabama Power 9.00 2024 2,200,000 2,375,516
Arizona Public Service
Sale-Leased Obligation Bond 8.00 2015 3,600,000 3,578,112
California Energy 9.875 2003 1,000,000(g) 1,011,250
Cleveland Electric Illuminating 9.50 2005 2,000,000 2,037,420
Commonwealth Edison 8.375 2023 5,000,000 5,223,900
Jersey Central Power & Light 6.75 2025 7,200,000 6,394,104
Long Island Lighting 9.75 2021 2,500,000 2,633,975
Salton Sea 7.84 2010 1,325,000(d) 1,316,758
Sithe Independent Funding 9.00 2013 1,500,000(d) 1,616,010
Texas Utilities 5.875 1998 5,000,000 4,937,250
Total 31,124,295
__________________________________________________________________________________
Utilities-gas (0.5%)
ARKLA 9.875 1997 5,000,000 5,216,700
Coastal 10.25 2004 2,500,000 2,989,700
Transcontinental Energy 9.375 2001 5,000,000 5,568,750
Transtexas Gas
Sr Sub 11.50 2002 2,000,000 2,105,000
Total 15,880,150
__________________________________________________________________________________
Utilities - telephone (0.3%)
AT&T
Zero Coupon Cv 0.00 1999 5,000,000(d,f) 4,250,000
GTE Florida 9.625 2030 3,200,000 3,388,864
Total 7,638,864
__________________________________________________________________________________
Miscellaneous (0.4%)
Coty 10.25 2005 1,500,000(g) 1,554,375
KinderKare Learning Center 10.375 2001 2,750,000 2,849,688
Carco Auto
Asset-Backed Obligation 7.875 1998 3,325,000 3,370,320
Standard Credit Card Trust 5.95 2004 3,000,000 2,860,260
8.625 2002 1,750,000 1,809,336
Samsonite 11.125 2005 750,000(d,g) 765,937
Total 13,209,916
__________________________________________________________________________________
Total bonds
(Cost: $669,059,203) $694,449,477
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Common & preferred stocks (66.4%)
Issuer Shares Value(a)
__________________________________________________________________________________
<S> <C> <C>
Aerospace & defense (4.6%)
Allied Signal 350,000 $ 15,531,250
Boeing 70,000 4,462,500
General Dyamics 150,000 7,893,750
Loral 500,000 27,375,000
Northrop Grumman 250,000 15,218,750
Raytheon 400,000 32,350,000
United Technologies 450,000 37,518,750
Total 140,350,000
__________________________________________________________________________________
Automotive & related (0.3%)
General Motors 200,000 9,400,000
__________________________________________________________________________________
<PAGE>
PAGE 72
Banks and savings & loans (1.4%)
BankAmerica 250,000 14,125,000
First Chicago 400,000 25,350,000
First Nationwide
$11.50 Pfd 20,000 2,150,000
Total 41,625,000
__________________________________________________________________________________
Beverages & tobacco (0.8%)
Coca-Cola 400,000 25,700,000
__________________________________________________________________________________
Building materials (1.6%)
Clayton Homes 800,000 18,900,000
Tyco Int'l 500,000 29,562,500
Total 48,462,500
__________________________________________________________________________________
Chemicals (0.7%)
DuPont (EI) 150,000 9,806,250
Morton Int'l 250,000 8,125,000
Praxair 100,000 2,600,000
Total 20,531,250
__________________________________________________________________________________
Communications equipment (2.7%)
ADC Telecommunications 230,000(b) 8,912,500
DSC Communcation 420,000(b,g) 22,050,000
General Instrument 300,000(b) 10,950,000
Motorola 360,000 26,910,000
Scientific Atlanta 650,000 13,000,000
Total 81,822,500
__________________________________________________________________________________
Computers & office equipment (5.7%)
American Power Conversion 1,000,000(b,g) 16,750,000
Compaq Computer 500,000(b) 23,875,000
Computer Associates 350,000 24,325,000
Hewlett Packard 350,000 28,000,000
Int'l Business Machines 200,000 20,675,000
Microsoft 230,000(b) 21,275,000
Oracle Systems 275,000(b) 11,034,375
Xerox 230,000(g) 27,772,500
Total 173,706,875
__________________________________________________________________________________
Electronics (2.5%)
Intel 690,000(g) 42,348,750
Vishay Intertechnology 800,000(b) 32,400,000
Total 74,748,750
__________________________________________________________________________________
Energy (3.4%)
Amoco 600,000 38,250,000
Exxon 450,000 30,937,500
Mobil 300,000 28,575,000
Noble Affiliates 200,000 5,525,000
Total 103,287,500
__________________________________________________________________________________
Financial services (2.7%)
Aimco 110,000 2,255,000
Federal National Mortgage 240,000 22,890,000
First Financial Management 300,000 27,037,500
Travelers 650,000 31,200,000
Total 83,382,500
__________________________________________________________________________________
Food (0.4%)
ConAgra 300,000 11,362,500
__________________________________________________________________________________
Foreign (c) (5.7%)
ASEA Class A 200,000(b) 17,816,400
News Corp Ltd ADR 600,000(g) 13,650,000
Nokia Preferred 490,000(b) 33,993,750
Northern Telcom 700,000 25,725,000
Royal Dutch Petroleum 320,000(g) 38,160,000
Singer 600,000 17,475,000
Tele Danmark 600,000(b) 15,975,000
Total 400,000 11,900,000
Total 174,695,150<PAGE>
PAGE 73
__________________________________________________________________________________
Furniture & appliances (0.5%)
Black & Decker 500,000 16,187,500
__________________________________________________________________________________
Health care (1.5%)
American Home Products 20,000 1,540,000
Merck 330,000 16,458,750
Pfizer 550,000 27,156,250
Total 45,155,000
__________________________________________________________________________________
Health care services (3.0%)
Beverly Enterprises 400,000(b) 5,300,000
Cardinal Distribution 150,000 8,025,000
Columbia/HCA Healthcare 650,000(g) 30,550,000
PacifiCare Health
Systems Class B 350,000(b) 20,037,500
United Healthcare 620,000 26,195,000
Total 90,107,500
__________________________________________________________________________________
Household products (1.7%)
Gillette 600,000 25,050,000
Proctor & Gamble 400,000 27,750,000
Total 52,800,000
__________________________________________________________________________________
Industrial equipment & services (3.4%)
Caterpillar 450,000 30,206,250
Deere 150,000 12,825,000
Illinois Tool Works 250,000 15,312,500
Stewart & Stevenson 500,000 15,937,500
WMX Technologies 500,000 14,687,500
York Int'l 300,000 13,350,000
Total 102,318,750
__________________________________________________________________________________
Industrial transportation (1.3%)
Federal Express 170,000(b) 12,197,500
Norfolk Southern 160,000 11,320,000
Union Pacific 255,000 16,702,500
Total 40,220,000
__________________________________________________________________________________
Insurance (1.6%)
General Re 170,000 25,266,250
Unum 500,000 24,000,000
Total 49,266,250
__________________________________________________________________________________
Leisure time & entertainment (0.1%)
Disney (Walt) 50,000 2,806,250
__________________________________________________________________________________
Media (3.5%)
American Greetings Cl A 100,000 3,075,000
CBS 300,000(g) 23,925,000
Comcast
Class SPL 750,000 16,031,250
Tele-Communications Cl A 900,000(b) 16,650,000
Time Warner 600,000 25,275,000
Turner Broadcasting Cl B 700,000 21,525,000
Total 106,481,250
__________________________________________________________________________________
Metals (1.1%)
Alumax 400,000(b) 13,650,000
Freeport Copper Cl B 500,000(b) 11,687,500
Ucar Intl 300,000(b) 8,250,000
Total 33,587,500
__________________________________________________________________________________
Multi-industry conglomerates (5.0%)
ALCO Standard 180,000(g) 14,490,000
ALCO Standard
2.375% Cv Pfd 100,000 8,987,500
6.50% Cv Pfd 129,250 10,469,250
Emerson Electric 360,000 25,695,000
General Electric 1,050,000 61,818,750
<PAGE>
PAGE 74
Manpower 200,000 5,750,000
Olsten 380,000 13,775,000
Westinghouse Electric 900,000 12,262,500
Total 153,248,000
__________________________________________________________________________________
Paper & packaging (0.8%)
Crown Cork & Seal 550,000(b,g) 24,750,000
__________________________________________________________________________________
Real Estate Investment Trust (2.8%)
Bay Apartment 150,000 3,131,250
Dean Witter 460,000(g) 23,460,000
Duke Realty 220,000 6,490,000
Equity Residential 130,000 3,835,000
First Industrial 140,000 2,782,500
Healthcare Property 150,000 4,856,250
Merry Land & Investment 130,000 2,795,000
Nationwide Health 150,000 5,868,750
Oasis 140,000 3,167,500
Paragon 220,000 3,877,500
RFS Hotel 350,000 4,987,500
ROC Communities 250,000 5,531,250
Shurgard Storage Center 150,000 3,637,500
Storage USA 100,000 2,937,500
Summit Properties 190,000 3,467,500
Weeks 200,000 5,100,000
Total 85,925,000
__________________________________________________________________________________
Restaurants & lodging (0.9%)
McDonalds 400,000 14,600,000
Wendy's Int'l 600,000 11,775,000
Total 26,375,000
__________________________________________________________________________________
Retail (2.3%)
CUC Int'l 840,000(b) 28,665,000
Home Depot 480,000 19,140,000
OfficeMax 300,000(b) 7,050,000
Pep Boys 500,000 13,750,000
Total 68,605,000
__________________________________________________________________________________
Utilities-electric (1.5%)
California Energy 500,000(b,g) 10,437,500
Cinergy 400,000 10,250,000
FPL Group 200,000 7,775,000
Northern States Power 200,000 8,525,000
SCE 600,000 9,975,000
Total 46,962,500
__________________________________________________________________________________
Utilities-gas (0.4%)
Enron 350,000 11,768,750
__________________________________________________________________________________
Utilities - telephone (2.5%)
Airtouch Communications 570,000(b) 18,525,000
Century Telephone 200,000 5,575,000
LIN Broadcasting 200,000(b) 25,700,000
MCI Communications 600,000 14,437,500
MFS Communications
2.68% Cv Pfd 305,873 12,668,880
Total 76,906,380
__________________________________________________________________________________
Total common & preferred stocks
(Cost: $1,615,117,355) $2,022,545,155
__________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 75
<TABLE>
<CAPTION>
Put options purchased (0.4%)
Issuer Number Exercise Expiration Value(a)
of price date
contracts
<S> <C> <C> <C> <C>
S&P 500 2,000 $ 540 December 1995 $ 1,225,000
2,000 545 December 1995 1,450,000
6,000 550 December 1995 4,875,000
2,000 555 December 1995 1,900,000
2,000 560 December 1995 2,300,000
Total put options purchased
(Cost: $16,368,500) $11,750,000
__________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Short-term securities (10.3%)
__________________________________________________________________________________
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
__________________________________________________________________________________
<S> <C> <C> <C>
U.S. government agency (0.2%)
Federal Natl Mtge Assn Disc Notes
09-05-95 5.68% $5,000,000 $4,996,861
__________________________________________________________________________________
Commercial paper (10.1%)
ABN Amro North Amer Finance
10-13-95 5.72 2,600,000 2,581,684
Amer General Finance
09-12-95 5.76 6,500,000(e) 6,488,620
09-13-95 5.76 8,700,000 8,683,383
Amgen
10-13-95 5.78 6,300,000 6,257,811
Aon
10-10-95 5.75 5,300,000 5,264,350
AT&T Capital
10-23-95 5.75 7,000,000 6,939,350
AVCO Financial Services
09-27-95 5.75 2,600,000 2,589,240
10-26-95 5.78 8,400,000 8,324,021
Barclays U.S. Funding
09-29-95 5.74 1,000,000 995,559
BBV Finance Delaware
09-18-95 5.76 7,000,000 6,981,026
11-15-95 5.82 6,500,000 6,419,862
Becton Dickinson Real Estate
09-20-95 5.76 3,600,000 3,589,113
Bell Atlantic Network Funding
09-28-95 5.75 3,500,000 3,485,038
CAFCO
09-12-95 5.70 3,100,000 3,093,705
Cargill Financial
09-05-95 5.75 3,500,000 3,497,783
CIT Group Holdings
09-06-95 5.79 1,600,000 1,598,722
09-29-95 5.79 4,600,000 4,579,428
Ciesco LP
09-27-95 5.75 3,200,000 3,186,780
Commerzbank U.S. Finance
09-15-95 5.75 5,800,000 5,787,076
10-03-95 5.76 9,000,000 8,954,160
Consolidated Rail
09-08-95 5.76 10,000,000(e) 9,988,839
CPC Intl
09-25-95 5.95 7,400,000(e) 7,368,901
Credit Agricole USA
10-16-95 5.77 5,700,000 5,656,854
Deutsche Bank Financial
09-22-95 5.75 5,100,000 5,082,953
Dresdner U.S.
09-06-95 5.83 6,000,000 5,994,637
Dun & Bradstreet
10-31-95 5.74 7,800,000 7,722,815
<PAGE>
PAGE 76
Gateway Fuel
10-23-95 5.77 1,700,000 1,685,003
General Electric Capital Services
10-10-95 5.79 4,500,000 4,471,920
Goldman Sachs Group
09-12-95 5.75 3,700,000 3,693,533
Household Finance
10-05-95 5.77 7,800,000 7,757,715
Lincoln Natl
09-28-95 5.74 5,300,000(e) 5,277,382
Metlife Funding
09-12-95 5.75 9,600,000 9,583,221
Mobil Australia Finance
09-05-95 5.76 7,300,000(e) 7,295,344
09-26-95 5.77 3,600,000 3,585,625
Natl Australia Funding
09-19-95 5.77 4,100,000 4,088,223
Norfolk Southern
09-18-95 5.96 8,447,000(e) 8,419,124
11-08-95 5.73 5,000,000(e) 4,944,033
PACCAR Financial
09-14-95 5.91 3,300,000 3,291,586
11-29-95 5.75 4,700,000 4,631,733
Pitney Bowes Credit
09-20-95 5.75 3,900,000 3,888,206
10-03-95 5.77 3,400,000 3,382,652
11-06-95 5.73 6,000,000 5,934,787
Reed Elsevier
10-02-95 5.75 8,300,000 8,259,118
SAFECO
09-25-95 5.75 4,800,000 4,779,352
10-02-95 5.76 3,400,000 3,381,191
Sandoz
09-21-95 5.75 4,000,000 3,987,333
11-17-95 5.80 7,600,000 7,503,835
Southern California Gas
10-11-95 5.76 6,200,000 6,160,527
Southwest Bell Capital
09-05-95 5.75 5,000,000 4,996,822
10-25-95 5.76 5,000,000(e) 4,957,175
Sysco
09-08-95 5.74 9,000,000(e) 8,989,990
Toyota Motor Credit
09-29-95 5.75 5,300,000 5,276,421
Transamerica Finance
09-21-95 5.71 2,700,000 2,690,308
UBS Finance
09-22-95 5.74 7,000,000 6,976,643
USAA Capital
10-24-95 5.78 4,200,000 4,163,350
USL Capital
09-07-95 5.75 12,800,000 12,787,797
10-06-95 5.75 800,000 795,551
Total 308,747,210
__________________________________________________________________________________
Total short-term securities
(Cost: $313,791,185) $ 313,744,071
__________________________________________________________________________________
Total investments in securities
(Cost: $2,614,336,243)(m) $3,042,488,703
__________________________________________________________________________________
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial statements.
(b) Presently non-income producing.
(c) Foreign securities values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated.
(d) Represents securities sold under Rule 144A, which are exempt from registration under
the Securities Act of 1933, as amended. These securities have been determined to be
liquid under guidelines established by the board of directors.
(e) Commercial paper sold within terms of a private placement memorandum, exempt from
registration under Section 4(2) of the Securities Act of 1933, as amended, and may be
sold only to dealers in that program or other "accredited investors." These securities
have been determined to be liquid under guidelines established by the board of directors.
(f) For zero coupon bonds, the interest rate disclosed represents the annualized effective
yield on the date of acquistion.
(g) Security is partially or fully on loan. See Note 6 to the financial statements.
(h) For these securities, the interest rate disclosed represents the annualized effective
yield on the date of acquistion to interest reset date shown in the maturity year column.
<PAGE>
PAGE 77
(i) ELKS are equity-linked securities that are structured as an interest-bearing debt
security of a brokerage firm and linked to the common stock of another company. The
terms of ELKS differ from those of ordinary debt securities in that the principal amount
received at maturity is not fixed, but is based on the price of the common stock the ELK
is linked to. The principal amount disclosed equals the current estimated future value
of the amount to be received upon maturity.
(j) This security is a collateralized mortgage obligation that pays no interest or principal
during its initial accrual period until payment of a previous series within the trust have
been paid off. Interest is accrued at an effective yield.
(k) Interest rate varies to reflect current market conditions; rate shown is the effective
rate on Aug. 31, 1995.
(l) Pay-in-Kind securities are securities in which the issuer has the option to make interest
payments in cash or in additional securities. These securities issued as interest usually
have the same terms, including maturity date, as the pay-in-Kind securities.
(m) At Aug. 31, 1995, the cost of securities for federal income tax purposes was $2,613,371,435
and the aggregate gross unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation....................................... $ 452,064,016
Unrealized depreciation....................................... (22,946,748)
___________________________________________________________________________________
Unrealized appreciation....................................... $ 429,117,268
___________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 78
Quick telephone reference
American Express Telephone Transaction Service
Redemptions and exchanges, dividend payments or reinvestments and
automatic payment arrangements
National/Minnesota: 800-437-3133
Mpls./St. Paul area: 671-3800
American Express Shareholder Service
Fund performance, objectives and account inquiries
612-671-3733
TTY Service
For the hearing impaired
800-846-4852
American Express Infoline
Automated account information (TouchToneR phones only), including
current fund prices and performance, account values and recent
account transactions
National/Minnesota: 800-272-4445
Mpls./St. Paul area: 671-1630
AMERICAN
EXPRESS
FINANCIAL
ADVISORS
Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN 55440-0010
<PAGE>
PAGE 79
STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) Headings. 2) The headings in the
annual report are
placed in a blue
strip at the top
of the page.
3) There are pictures, icons 3) Each picture, icon and
and graphs throughout the graph is described to
annual report. the left of the text.
4) Footnotes for charts and 4) The footnotes for each
graphs are described at chart or graph are typed
the left margin. below the description of
the chart or graph.
