Retirement Annuity Mutual Funds
Managed by IDSLife Insurance Company
Funds with separate goals and objectives to provide investment flexibility with
no initial sales charge.
The Retirement Annuity Mutual Funds provide several alternatives to consider for
investment through your annuity contracts.
Contents
From the president 3
Capital Resource Fund
From the portfolio manager 4
Ten largest holdings 5
Special Income Fund
From the portfolio manager 6
Ten largest holdings 7
Managed Fund
From the portfolio manager 8
Ten largest holdings 9
Moneyshare Fund
From the portfolio manager 10
International Equity Fund
From the portfolio manager 11
Ten largest holdings 12
Aggressive Growth Fund
From the portfolio manager 13
Ten largest holdings 14
Global Yield Fund
From the portfolio manager 15
Ten largest holdings 16
Growth Dimensions Fund
From the portfolio manager 17
Ten largest holdings 18
Income Advantage Fund
From the portfolio manager 19
Ten largest holdings 20
All Funds
Financial statements 21
Notes to financial statements 32
Investments in securities 50
<PAGE>
To our contract owners
From the president
The stock and bond markets advanced for the majority of the past six
months. As a result, the IDS Life Retirement Annuity Mutual Funds that
invest primarily in U.S. securities experienced positive results for that
period - September 1996 through February 1997.
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 IDS Life Retirement Annuity Mutual Funds allow you to take advantage
of long-term opportunities through a variety of investment avenues. Your
American Express financial advisor can tell you about the role each fund
can play in meeting your long-term financial objectives. One of the funds,
Capital Resource, has a new manager. Joe Barsky, who assumed that role
last January, describes significant changes to the Fund's investment style
in his report on page 4.
Your advisor also can help make sure your investment and protection
strategies continue to fit your financial situation. As your objectives
and time horizons change, talk to your advisor about the broad range of
American Express products and services designed to help you meet a variety
of investment and protection needs.
William R. Pearce
(picture of )William R. Pearce
President of the Funds
<PAGE>
Capital Resource Fund
From the portfolio manager
Capital Resource Fund produced positive results during the first half of
the fiscal year, as the stock market continued to enjoy relatively smooth
sailing. For the period -- September 1996 through February 1997 -- the
Fund's return was 9.43%. (This figure does not reflect expenses that apply
to the variable accounts, subaccounts, or the annuity contract.)
Buoyed by low long-term interest rates and ongoing reports of moderate
economic growth, tame inflation and good corporate profits, the stock
market started moving higher almost in tandem with the beginning of the
fiscal year. Aside from a few, relatively brief retreats, the rally
continued through February.
As has been true in recent years, stocks of large companies
("large-caps") generally performed far better than stocks of small
companies ("small-caps"). While the Fund clearly participated in the
rally, its emphasis on small-cap stocks continued to temper its
performance during the period.
Beyond that, the Fund has also had a value-stock focus in recent years,
which has been a disadvantage in an investment environment that has mainly
favored growth stocks. Moreover, the Fund held sizable positions in a few
stocks that proved to be either weak or negative performers.
Since I became manager of the Fund last January, I have substantially
restructured its investments. This has consisted of selling the small-cap
holdings in favor of larger-capitalization issues, reducing the number of
stocks in the portfolio, concentrating on stocks of companies with greater
earnings growth, and eliminating the major holdings that had been a drag
on performance. While the portfolio remains well-diversified by industry
group, this restructuring has left it with substantial exposure to three
groups that I believe have especially bright, long-term growth prospects:
financial services, technology and health care.
Looking to the rest of 1997, I think the trend of the stock market will
largely depend on whether the Federal Reserve raises short-term interest
rates and, if it does, by how much. No change in rates would be a positive
factor, while a rate increase almost surely would be negative. What I
think is more important, though, is that the longer-term outlook for
stocks appears quite favorable, thanks in large part to the substantial
support the market is likely to continue to receive from baby-boomers
investing for retirement. In the meantime, I look forward to reporting on
the Fund's progress in the annual report you'll receive after the fiscal
year concludes in August.
Joseph M. Barsky
(picture of) Joseph M. Barsky
Portfolio manager
<PAGE>
Capital Resource Fund
(of Fund's net assets) (as of Feb. 28, 1997)
State Street Boston 2.37% $104,487,500
Investment processing services for financial institutions and
corporate and government clients.
General Electric 1.65 72,825,213
A diversified company with interests in manufacturing, broadcasting
(NBC) services and technology.
Intel 1.61 70,937,500
The world's number one semiconductor manufacturer. Intel produces
microcomputer components, modules and systems.
Royal Dutch Petroleum 1.57 69,200,000
Royal Dutch Petroleum Co., which includes Royal Dutch (the Dutch
version) and Shell Transport (the English version), is a major oil
company.
Westinghouse Electric 1.56 69,000,000
A diversified, global company which engages in a wide variety of
businessses through its Westinghouse/CBS Group and its Industries &
Technology Group.
Microsoft 1.54 68,250,000
This company develops, manufactures, licenses, sells, and supports a
wide range of software products.
Guidant 1.52 67,000,000
Designs, develops, manufactures and markets a broad range of products
for us in vascular intervention, primarily the treatment of coronary
artery disease, cardiac rhythm management and other forms of minimall
invasive surgery.
General Signal 1.48 65,437,500
The largest cable system operator, with over 10 million subscribers in
the United States. Approximately 70% of its business is regulated.
ACE 1.47 65,000,000
Largest provider of Directors and Officers insurance and one of the
leading providers of excess liability insurance in the world.
Carnival Cl A 1.44 63,450,000
The ten holdings listed here make up 16.21% of the Fund's net assets
<PAGE>
Special Income Fund
From the portfolio manager
Led by investments in foreign markets and high-yield U.S. corporate bonds,
Special Income Fund enjoyed a productive first half of the fiscal year.
For the period -- September 1996 through February 1997 -- the Fund's total
return was 7.45%. (This figure does not reflect expenses that apply to the
variable accounts, subaccounts, or the annuity contract.)
Thanks to reports of moderate economic growth and benign inflation, the
mood of the U.S. bond market began improving about when the period began
last September. Investors' confidence increased through the fall, driving
long-term interest rates lower and bond prices higher. The rally stalled
out over the winter, though, and ultimately turned into a retreat, as
concern about a strengthening economy leading to higher inflation spawned
a rising-rate trend that took a toll on the market.
In that environment, the best-performing U.S.
fixed-income investments proved to be high-yield bonds, which tend to
thrive during periods of economic growth and well-behaved inflation. As
has been true for some time, I kept between 15% and 20% of assets invested
in such securities, which not only provided a substantial yield but some
price appreciation as well. Complementing those holdings were investments
in so-called "emerging" foreign markets such as Russia, Mexico, Venezuela
and Argentina. They comprised between 10% and 15% of assets and were among
the best-performing sectors of the worldwide bond market.
On the investment-grade side of the portfolio (high-yield and emerging
market bonds are considered to be below investment grade, or lower
quality), I kept the assets diversified among high-grade U.S. corporate
bonds, mortgage-backed bonds and U.S. Treasury bonds. Investments in those
high-quality sectors, which comprised about 70% of assets, provided
positive results, though less impressive than those of the emerging market
and high-yield U.S. corporate bonds described previously.
For the rest of the fiscal year, I think it's likely that the Federal
Reserve will raise short-term interest rates higher to keep inflation in
check. If so, long-term interest rates will probably follow suit,
presenting a hurdle to the U.S. bond market. Given that outlook, I have
assumed a more defensive posture vis-a-vis the market.
Steven C. Merrell
(picture of) Steven C. Merrell
Portfolio manager
<PAGE>
Special Income Fund
(of Fund's net assets) (as of Feb. 28, 1997)
United Mexican States 1.24% $24,064,950
11.50% 2026
Govt of Venezuela 1.15 22,295,000
6.625% 2007
Hydro Quebec 1.13 21,898,600
8.50% 2029
General Motors Acceptance 1.05 20,295,200
7.85% 1997
United Kingdom Treasury .83 16,188,698
8.00% 2003
Cityscape Financial .77 15,000,000
11.00% 1998
Govt of Canada .76 14,728,651
7.64% 2001
Wal-Mart Stores .76 14,642,588
7.00% 2006
Univision Network .69 13,454,650
7.00% Sub Nts 2002
Morgan (JP) .69 13,383,920
4.00% Sr Sub Nts Series A 2012
Excludes U.S. Treasury and government agency holdings.
The ten holdings listed here make up 9.07% of the Fund's net assets
<PAGE>
Managed Fund
From the portfolio managers
Supported by an overall strong stock market and a rally in the bond market
last fall, Managed Fund's total return was 15.88% during the first half of
the fiscal year -- September 1996 through February 1997. (This figure does
not reflect expenses that apply to the variable accounts, subaccounts, or
the annuity contract.)
The beginning of the period coincided with the outset of the stock
market's latest advance. Thanks to an unthreatening inflation rate, decent
economic growth, generally solid corporate profits and relatively low
long-term interest rates, stocks gained ground throughout most of the past
six months, ultimately breaking through 7,000 on the Dow Jones Industrial
Average in mid-February.
This portfolio was
well-prepared for the rally, with about 65%-70% of the portfolio's assets
invested in stocks. During the previous summer, we repositioned the stock
holdings with an emphasis on companies with above-average earnings growth
in the following sectors: technology, financial services, health care and
consumer products. To the portfolio's benefit, these sectors were among
the best performers over the past six months. In addition, we reduced the
number of stock holdings from 125 to about 90, which we believe provides
ample diversification while allowing the potential for the Fund to benefit
from more concentrated investments in fewer stocks.
The bond market as a whole was less consistent than stocks during the
period, as it advanced smartly during the fall but then gave back much of
the gain over the winter. The up-and-down pattern followed investors'
outlooks for economic growth and inflation. Last fall, most were expecting
weaker growth and low inflation --a view that flip-flopped a few months
later. Given our expectation of a rather volatile market, we maintained an
essentially "neutral" structure in the bond part of the portfolio. That
strategy kept the value of our holdings from experiencing excessive
changes. To help maintain the income level of the bond investments, we
also added some higher-yielding securities.
Looking to the rest of the fiscal year, while we aren't pessimistic, we do
think investors should expect more modest returns than we've seen in
recent years, especially from stocks. But no matter what the markets may
bring, our current plan is to stay largely with the investment structure
we've employed in recent months.
Alfred Henderson
Deborah L. Pederson
(picture of) Alfred Henderson
Portfolio manager
(picture of) Deborah L. Pederson
Portfolio manager
<PAGE>
Managed Fund
(of Fund's net assets) (as of Feb. 28, 1997)
Intel 2.04% $81,578,125
As the world's number one semiconductor manufacturer, Intel produces
microcomputer components, modules and systems.
Compaq Computer 1.75 69,740,000
Manufacturer of high-performance laptop, portable and desktop personal
computers.
General Electric 1.54 61,725,000
A diversified company with interests in manufacturing, broadcasting
(NBC), services and technology.
Crown Cork & Seal 1.53 61,050,000
A leading producer of packaging materials, including metal cans and
plastic containers.
UNUM 1.48 59,200,000
$2.34 Cv Pfd
Through various subsidiaries, UNUM provides a broad range of
disability, health, life insurance and group pensions products.
Green Tree Financial 1.48 59,062,500
A diversified financial services company that originates conditional
sales contracts for manufactured homes, home improvements, consumer
products and equipment financing, and provides commercial financing to
manufacturers and dealers.
Boston Scientific 1.41 56,312,500
Developer, manufacturer and marketer of medical devices. The company's
products are used in a broad range of medical specialties, including
cardiology, vascular surgery, urology, gastroenterology and radiology.
Travelers 1.37 54,965,625
Among the world's largest multi-line financial services companies,
focusing on insurance, managed health care and investments.
Philip Morris 1.28 51,347,500
The largest cigarette company that has become the second largest
packaged-food company in the world as a result of the Kraft
acquisition.
Merck 1.21 48,300,000
One of the world's largest drug manufacturers.
Excludes U.S. Treasury and government agency holdings.
The ten holdings listed here make up 15.09% of the Fund's net assets
<PAGE>
Moneyshare Fund
From the portfolio manager
Moneyshare Fund's yield was little changed during the first half of its
fiscal year -- September 1996 through February 1997 -- reflecting
generally stable short-term interest rates over the period.
For the seven-day period ended February 28, 1997, the Fund's compound
annualized yield was 4.99%, and the simple annualized yield was 4.87%. In
keeping with its objective, the Fund maintained a $1 per share price
throughout the six months. (Although the Fund seeks to maintain a stable
$1 per share price, there is no assurance that it will be able to do so.
An investment in the Fund is neither insured nor guaranteed by the U.S.
government.)
With inflation remaining subdued and the economy showing no signs of
either overheating or falling into recession, the Federal Reserve Board
(Fed) elected to leave short-term interest unchanged during the past six
months. (By way of background, the Fed adjusts short-term rates based on
the condition of the economy and the inflation outlook. When the economy
appears weak and inflation is low, the Fed usually lowers rates to
stimulate economic growth. When the economy is strong, the Fed usually
raises rates to reign in economic growth and thereby keep inflation in
check.)
Given that uneventful environment, I kept the average maturity of the
securities in the portfolio in a neutral range -- between
35 and 45 days. At the end of February, the maturity level was
approximately 49 days. (The longer the average maturity, the longer it
takes the Fund's yield to respond to a change in interest rates.) As
always, the entire portfolio remained invested in commercial paper, bank
letters of credit and certificates of deposit.
As for the rest of the fiscal year, I expect the moderate economic growth
we've experienced in recent years to continue, accompanied by a modest
increase in the inflation rate. Should that forecast prove to be accurate,
I think the Fed probably will push short-term interest rates somewhat
higher. In such a scenario, rates on the short-term securities the Fund
invests in would rise as well and ultimately lead to a slightly higher
yield.
Terry Fettig
(picture of) Terry Fettig
Portfolio manager
<PAGE>
International Equity Fund
From the portfolio manager
Foreign stock markets continued their up-and-down performance during the
first half of International Equity Fund's fiscal year -- September 1996
through February 1997. The positive outweighed the negatives, however, and
the Fund's total return was 4.14% during the period. (This figure does not
reflect expenses that apply to the variable accounts, subaccounts, or the
annuity contract.)
The major foreign markets trailed the powerful advance of the U.S. stock
market during the past six months. Japan, the Fund's largest area of
investment, showed periodic signs of a comeback, but returns there were
penalized by currency weakness, as the yen continued to lose value versus
the U.S. dollar. As the period progressed, I scaled back the Fund's
exposure to Japan from about 30% to about 19%. At this point, the Japanese
market has a two-tier structure -- companies that are competitive on a
worldwide basis and those that are not. Stocks in the former group have
been the best performers of late, and that is where I am concentrating the
Fund's Japanese investments.
In the well-established markets of Europe, the United Kingdom provided
positive results, thanks in part to a favorable currency situation -- the
pound strengthening versus the dollar. The Fund's U.K. exposure was about
15% during the six months. In continental Europe, including France,
Germany and Italy, each of which comprised about 6% of assets, stocks
gained ground. But like Japan, returns were eroded by the dollar's rise in
value versus the local currencies.
Still, there were some notable exceptions to that trend, particularly the
so-called "emerging" markets in Latin America, including Mexico and
Brazil. While the Fund's investments there were not substantial, their
generous returns enhanced Fund performance.
Looking to the rest of the fiscal year, because of the U.S. stock market's
remarkable rally in recent years, foreign stocks as a whole are relatively
inexpensive. In addition, the U.S. economy may experience slower growth
this year, while the trade deficit is likely to increase. Those factors,
in combination with the possibility that the federal government may take
measures to reign in the dollar, should help shift investors' attention --
and capital -- to foreign markets.
Paul Hopkins
(picture of) Paul Hopkins
Portfolio manager
<PAGE>
International Equity Fund
(of Fund's net assets) (as of Feb. 28, 1997)
Philips Electronics (Netherlands) 2.22% $44,338,314
Manufactures electronic products for industrial and consumer use.
Glaxo Wellcome (United Kingdom) 2.07 41,396,495
Engaged in the research, development, manufacture and distribution of
pharmaceuticals, which are marketed primarily to wholesale drug
distributors, hospitals, pharmacies and health maintenance
organizations.
Stet Risp (Italy) 2.06 41,088,921
Ente Nazionale Idrocarburi (Italy) 1.90 38,031,586
HSBC Holdings (Hong Kong) 1.87 37,410,953
Malayan Banking (Malaysia) 1.71 34,109,745
Provides banking and financial services and is engaged in merchange
banking, offshort banking, financing, leasing and hire purchase,
nominee and trustee services, general and life insurance, factoring
services, discounting and investment management.
Novartis (Switzerland) 1.62 32,333,777
A holding company that's operations are structured around
pharmaceuticals, nutrition, seeds, agro and MBT (Maters Builders
Technologies)
NEC (Japan) 1.57 31,451,545
Operates with a synergistic business concept of "C & C," the
integration of computers and communications. These operations comprise
three product categories: Communications Systems and Equipment,
Computers and Industrial Electronic Systems, and Electron Devices.
TDK (Japan) 1.51 30,141,756
This company and its subsidiaries are engaged in the manufacturing of
components for use in electronic equipment and machinery.
Great Universal Stores (United Kingdom) 1.34 26,905,184
Principal activities are catalogue home shopping and ancillary
activities, Burberry products and retailing, overseas retailing,
property investment, CCN information services, consumer and corporate
finance.
The ten holdings listed here make up 17.87% of the Fund's net assets
<PAGE>
Aggressive Growth Fund
From the portfolio manager
The favorable environment for stocks continued during the past six months,
enabling the Fund to record positive results. For the first half of the
fiscal year -- September 1996 through February 1997 -- the Fund's return
was 5.42%. (This figure does not reflect expenses that apply to the
variable accounts, subaccounts, or the annuity contract.)
Shaking off the effects of a summer slump originally brought on by a
rise in long-term interest rates, the stock market began moving
forward again last fall. Buoyed by ongoing reports of modest economic
growth, well-behaved inflation, healthy corporate profits and a
subsequent decline in interest rates, stocks soon mounted a remarkable
rally that, aside from a few relatively brief setbacks, continued
through the end of the period in February.
As has been the case in recent years, stocks of large companies generally
performed better than those of smaller companies. Because Aggressive
Growth's investment focus is on the latter group of stocks, this trend
worked to the disadvantage of the Fund. Still, smaller stocks did
participate in the rally, and the Fund produced a gain in each of the six
months.
I kept the Fund's investments well-diversified during the period, with
stocks of technology, health care, energy and financial services companies
comprising the areas of greatest emphasis. Although all groups contributed
to the Fund's positive performance, thanks to rising oil prices,
energy-related stocks were especially rewarding. To cushion the Fund
against potential market volatility, I maintained a higher-than-normal
level of cash reserves when the period began. As the period progressed and
the market gathered positive momentum, however, I lowered that level by
putting more money to work in stocks.
As for the months ahead, my investment outlook might be called cautiously
positive. While the investment fundamentals that have powered the stock
market in recent years -- moderate economic growth, low inflation, good
corporate profits and relatively low long-term interest rates -- remain
essentially in place at this time (mid-February), I think stocks are
likely to encounter a more trying environment before the year is out.
Still, barring a major setback, sharp stock selection should ultimately
prove rewarding.
Martin G. Hurwitz
(picture of)Martin G. Hurwitz
Portfolio manager
<PAGE>
Aggressive Growth Fund
(of Fund's net assets) (as of Feb. 28, 1997)
HBO & Co 2.43% $51,862,500
A health-care information service company that provides a variety of
computer-based information systems and services to hospitals and their
affiliates.
Tyco Intl 1.46 31,152,000
A diverse, New England-based producer of packaging, cable
manufacturing, fire extinguishing systems, alarms and controls, plus
miscellaneous simple electronic parts.
Cisco Systems 1.37 29,203,125
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.
Parametric Technology 1.14 24,241,250
A producer of software products for the automation of complex
engineering tasks that are essential to the development of virtually
all manufactured products.
SunAmerica 1.00 21,286,000
A diversified financial services company specializing in retirement
savings and investment products and services.
Dollar General .97 20,671,187
Seeks profitable growth by providing value in consumable basic
merchandise to low-, middle- and fixed-income families through a chain
of small stores.
Fruit of the Loom .95 20,233,125
Company is a vertically integrated international basic apparel
company, emphasizing branded products for consumers ranging from
infants to senior citizens.
Miller (Herman) .92 19,725,000
A leader in the design and development of furniture and furniture
systems.
Safeway .89 19,057,500
A food retailer, operating stores in the United States and Canada.
Bank of Boston .85 18,090,000
A multi-bank holding company that through its subsidiaries both
nationally and internationally, provides a wide range of financial
services to corporate and institutional customers, governments,
individuals and other financial institutions.
The ten holdings listed here make up 11.98% of the Fund's net assets
<PAGE>
Global Yield Fund
From the portfolio manager
Despite the negative impact of generally weak foreign currencies, Global
Yield Fund provided positive performance during the first half of the
fiscal year -- September 1996 through February 1997. For the six months,
the Fund's total return was 3.67%. (This figure does not reflect expenses
that apply to the variable accounts, subaccounts, or the annuity contact.)
As is usually the case, the largest portion of the Fund's portfolio (up to
49% at one point) remained invested in U.S. government bonds. This proved
to be highly beneficial last fall, as the U.S. bond market, supported by
ongoing low inflation and declining long-term interest rates, rallied
strongly from September through November. The resultant higher bond prices
boosted the value of the Fund's holdings and, thus, investors' annuity
value. The rally petered out, though, during the winter, as concerns about
the possibility of increasing inflation drove interest rates up and bond
values down. Still, all in all, it was a productive period for the U.S.
market.
Foreign markets were more of a mixed bag. While securities in some markets
gained ground, returns to U.S. investors were reduced because of declines
in the value of local currencies compared with the U.S. dollar. This was
especially so in Germany and Japan, whose mark and yen, respectively,
experienced large losses. I was able to mitigate the situation, however,
by "hedging" those currencies -- an investment strategy that reduces the
effect of currency fluctuations.
Several "emerging" markets, however, not only performed well but their
gains were unimpaired by currency translations because investments in
securities issued in these markets are denominated in U.S. dollars.
Included in this group are Mexico, Argentina, Brazil and Venezuela. While
the Fund's exposure to those markets was relatively small compared to the
major markets of the U.S. and Europe, their generous returns had a potent
effect on the Fund's performance.
Looking toward the rest of the fiscal year, I expect the dollar to level
out against foreign currencies based on two factors: ongoing appreciation
by the dollar would ultimately become a serious drag on U.S. exports, and
the economies of Germany and Japan are improving, which should boost the
value of local currencies. Therefore, I'm maintaining exposure to those
markets, as well as smaller ones, and, of course, the U.S.
Ray Goodner
(picture of) Ray Goodner
Portfolio manager
<PAGE>
Global Yield Fund
(of Fund's net assets) (as of Feb. 28, 1997)
U.S. Treasury 13.29% $9,259,777
7.50% 2001-16
Federal Republic of Germany 5.27 3,670,551
7.50% 2004
United Kingdom Treasury 3.91 2,726,518
8.00% 2003
United Kingdom Treasury 3.63 2,527,098
7.75% 2006
Govt of Italy 3.42 2,382,458
8.50% 2004
United Mexican States 3.29 2,291,900
11.50% 2026
Federal Republic of Germany 3.20 2,228,017
6.00% 2016
Govt of Sweden 3.05 2,125,005
8.00% 2007
Federal Natl Mtge Assn 2.86 1,994,380
7.50% 2025
Govt of Canada 2.57 1,791,216
8.00% 2023
Note: Certain foreign investment risks include: changes in currency exchange
rates, adverse political or economic order, and lack of similar regulatory
requirements followed by U.S. companies.
The ten holdings listed here make up 44.49% of the Fund's net assets
<PAGE>
Growth Dimensions Fund
From the portfolio manager
The Fund recorded total return of 15.69% during the first half of its
fiscal year -- September 1996 through February 1997 -- as it capitalized
on a favorable environment for stocks. (This figure does not reflect
expenses that apply to the variable accounts, subaccounts, or the annuity
contract.)
Shaking off a mid-summer slump, the stock market began moving higher
almost in step with the start of the fiscal period. Supported by strong
cash flows into stock mutual funds, reports of moderate inflation and
largely healthy corporate profits, stocks put together four months of
strong gains before faltering in the face of higher long-term interest
rates last December. The market soon got back on its feet, however, and
registered still another impressive advance in January and February.
Characteristic of the market in recent years, stocks of large companies,
or "large caps," generally fared better than their smaller counterparts
during the past six months. Moreover, those with above-average earnings
increases -- growth stocks -- were in particular favor with investors. For
a large-cap growth fund such as this one, that proved to be an ideal
combination.
As has been the case for some time, stocks in the technology,
telecommunications, health care and financial/business services sectors --
where I continue to find most of corporate America's greatest earnings
growth -- comprised the bulk of the Fund's portfolio. Looking at
individual stocks, several of the largest holdings were stellar
performers, including Intel, Cisco Systems, General Electric and Citicorp.
Aside from a few refinements, the basic structure of the portfolio was
virtually unchanged during the past six months.
The same could be said of
the investment environment. As I prepare this report in mid-March,
inflation remains well-behaved, the economy continues to grow, companies
continue to report decent profits, long-term interest rates have yet to
reach a threateningly high level and investors continue to pour money into
the stock market. All of these factors work in stocks' favor.
Still, after two straight years of substantial advances, it's difficult to
imagine that the stock market will always have the wind at its back in
1997. If not, investors may well have to settle for less-generous results
in the near term. In any event, I am sticking with the investment themes
that have been successful for the Fund in recent years, as I continue to
expect them to prove rewarding over the long run.
Gordon Fines
(picture of) Gordon Fines
Portfolio manager
<PAGE>
Growth Dimensions Fund
(of Fund's net assets) (as of Feb. 28, 1997)
Intel 3.74% $27,069,750
The world's number one semiconductor manufacturer, Intel produces
microcomputer components, modules and systems.
General Electric 3.44 24,864,888
A diversified company with interests in manufacturing, broadcasting
(NBC), services and technology.
Citicorp 3.28 23,758,625
The parent of Citibank, the largest bank in the U.S., it has a
substantial worldwide corporate and retail banking presence.
Cisco Systems 2.86 20,731,437
A leader in the "router" segment of the networks industry. Cisco
routers allow interconnection of PC's, minicomputers and mainframe to
local and global networks.
Pfizer 2.58 18,645,687
A leading producer of pharmaceutical, hospital products, animal health
items, non-prescription medications and specialty chemicals.
Monsanto 2.24 16,194,150
This company and its subsidiaries manufacture and sell a diverse line
of agricultural products; chemical products, including plastics and
manufactured fibers; pharmaceuticals; and food products, including
low-calorie sweeteners.
Norwest 2.11 15,253,350
As a diversified financial services organization, this company
operates through subsidiaries engaged in banking and in related
businesses.
Microsoft 2.06 14,878,500
Microsoft has a leading franchise in microcomputer operating systems,
DOS, Windows and Windows NT.
Boeing 2.01 14,560,425
The largest producer of commercial aircraft in the free world with
over 50% of the market.
Johnson & Johnson 1.92 13,922,200
A major producer of health care products, including consumer products,
medical and dental devices and products, and a wide variety of ethical
and over-the-counter drugs.
The ten holdings listed here make up 26.24% of the Fund's net assets
<PAGE>
Income Advantage Fund
From the portfolio manager
Income Advantage Fund posted a solid gain during the first half of the
fiscal year, as high-yield bonds continued to perform well. For the six
months -- September 1996 through February 1997 -- the Fund's total return
was 8.60%. (This figure does not reflect expenses that apply to the
variable accounts, subaccounts, or the annuity contract.)
Supported by reports of moderate economic growth and ongoing low
inflation, which in turn eased concerns that the Federal Reserve would
raise short-term interest rates, the bond market staged a strong rally
that lasted into December of last year. In early 1997, though, data
indicating a more vigorous economy began to emerge, renewing speculation
that the Fed would soon need to raise rates to keep a lid on inflation.
Although the Fed ultimately decided to leave rates alone, the bond market
struggled through the final two months of the period.
For the most part, the environment proved favorable for high-yield bonds,
which respond well to a growing economy and subdued inflation. In
addition, the technical condition of the high-yield sector of the bond
market remained sound, as a healthy demand for these securities, both from
individual and professional investors, kept a substantial supply of new
issues from becoming a burden.
Changes to the portfolio were modest during this period. I reduced what
had been an above-average exposure to bonds of gaming companies, which had
been strong performers; reduced holdings among zero-coupon bonds in an
effort to lessen the Fund's volatility; and moved some money from
subordinated securities to more senior securities to reduce risk to the
Fund in the event of a weakening economy. By the end of the period, the
portfolio was not substantially over-weighted in any business sector -- a
prudent approach, I believe, given the length of the current economic
cycle.
Jack Utter
(picture of) Jack Utter
Portfolio manager
<PAGE>
Income Advantage Fund
(of Fund's net assets) (as of Feb. 28, 1997)
Olympic Financial 1.78% $3,138,437
13.00% 2000
Cablevision Systems 1.62 2,849,847
11.125% Pay-in-kind
Norcal Waste Systems 1.58 2,784,375
13.00% Sr Nts 2005
Paracelsus Healthcare 1.53 2,701,875
10.00% 2006
Pathmark Stores 1.49 2,618,750
11.625% 2002
Paccar Financial 1.48 2,598,854
5.31% 1997
Veritas Holdings 1.47 2,587,500
9.625% 2003
Pueblo Xtra Intl 1.43 2,509,000
9.50% 2003
Cal Energy 1.36 2,398,000
9.50% 2006
Gorges 1.33 2,345,625
11.50% 2006
The ten holdings listed here make up 15.07% of the Fund's net assets
<PAGE>
Statements of assets and liabilities
Retirement Annuity Mutual Funds
Feb. 28, 1997 (Unaudited)
<TABLE>
<CAPTION>
Capital Special Managed
Resource Income Fund
Fund Fund
<S> <C> <C> <C>
Assets
Investments in securities, at value (Note 1):
(identified cost, $4,048,973,553; $1,888,176,600 and
$3,443,927,842, respectively) $4,438,429,076 $1,936,644,566 $4,134,592,661
Cash in bank on demand deposit 8,599 -- 3,659,167
Receivable for investment securiti 33,483,168 49,582,302 31,119,647
Dividends and accrued interest receivable 4,949,007 28,233,329 18,532,813
U.S. government securities held as collateral for
securities loaned (Note 5) 2,716,726 24,681,400 75,307,646
Receivable (for capital stock sold) from:
IDS Life accounts 689,118 8,158,968 17,129,492
IDS Life of New York accounts 2,372 539,963 1,120,204
-------------- -------------- --------------
Total assets $4,480,278,066 $2,047,840,528 $4,281,461,630
============== ============== ==============
Liabilities
Disbursements in excess of cash on demand deposit $ -- $ 138,701 $ --
Dividends payable to separate accounts (Note 1) 5,990,002 12,262,878 25,343,083
Payable for investment securities purchased 13,633,739 55,056,073 38,430,441
Accrued investment management and services fee 2,331,749 900,743 1,935,440
Payable upon return of securities loaned (Note 5) 36,367,726 38,240,130 216,861,116
Payable (for capital stock redeemed) to:
IDS Life accounts 6,233,131 -- --
IDS Life of New York accounts 74,530 -- --
Other accrued expenses 452,487 357,500 370,951
Open option contracts written, at value
(premium received, $382,500 for Special Income and
$476,844 for Managed) (Note 8) -- 330,769 756,875
Total liabilities 65,083,364 107,286,794 283,697,906
-------------- -------------- --------------
Net assets applicable to outstanding capital stock $4,415,194,702 $1,940,553,734 $3,997,763,724
============== ============== ==============
Represented by
Capital stock -- authorized 10,000,000,000 shares for each
Fund of $.01 par value ($.001 for Managed Fund); outstanding,
185,151,980; 163,072,491; and 231,791,985 shares, respectively $ 1,851,520 $ 1,630,725 $ 231,792
Additional paid-in capital 4,178,812,620 1,858,274,252 3,102,985,258
Excess of distributions over net investment income (2,085,297) (2,184,020) (1,876,547)
Accumulated net realized gain (loss) (Note 1) (152,839,664) 32,445,063 206,017,184
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies (Note 7) 389,455,523 50,387,714 690,406,037
-------------- -------------- --------------
Total-- representing net assets applicable to outstanding
capital stock $4,415,194,702 $1,940,553,734 $3,997,763,724
============== ============== ==============
Net asset value per share of outstanding capital stock $ 23.85 $ 11.90 $ 17.25
============== ============== ==============
See accompanying notes to financial statements.
<PAGE>
Statements of assets and liabilities (continued)
Retirement Annuity Mutual Funds
Feb. 28, 1997 (Unaudited)
Moneyshare International Aggressive
Fund Equity Growth
Fund Fund
Assets
Investments in securities, at value (Note 1):
Investments in securities of unaffiliated
issuers (identified cost, $370,377,696;
$2,182,490,413 and $1,819,149,239, respectively) $370,377,696 $2,416,689,143 $2,058,052,839
Investments in securities of affiliated issuers
(identified cost, $9,453,520 for Aggressive Growth Fund) -- -- 12,237,500
Cash in bank on demand deposit 186,869 -- --
Receivable for investment securities sold -- 5,420,696 162,697,890
Dividends and accrued interest receivable 317,545 2,711,820 1,033,251
Unrealized appreciation on foreign currency contracts
held, at value (Notes 1 and 4) -- 629 --
U.S. government securities held as collateral for securities loaned (Note 5) -- 28,156,731 --
Receivable (for capital stock sold) from:
IDS Life accounts 308,552 589,004 805,268
IDS Life of New York accounts 6,833 18,425 83,594
-------------- -------------- --------------
Total assets $371,197,495 $2,453,586,448 $2,234,910,342
============== ============== ==============
Liabilities
Disbursements in excess of cash on demand deposit -- 238,555 20,608,154
Dividends payable to separate accounts (Note 1) 1,337,876 601,045 2,457,877
Payable for investment securities purchased 2,999,139 45,707,063 73,751,324
Accrued investment management and services fee 139,721 1,342,805 1,103,281
Unrealized depreciation on foreign currency
contracts held, at value (Notes 1 and 4) -- 63,968 397,310
Payable upon return of securities loaned (Note 5) -- 403,764,456 3,055,000
Payable (for capital stock redeemed) to:
IDS Life accounts 1,729,081 2,111,645 --
IDS Life of New York accounts 77,168 62,962 --
Other accrued expenses 33,827 300,974 252,500
-------------- -------------- --------------
Total liabilities 6,316,812 454,193,473 101,625,446
-------------- -------------- --------------
Net assets applicable to outstanding capital stock $364,880,683 $1,999,392,975 $2,133,284,896
============== ============== ==============
Represented by
Capital stock -- authorized 10,000,000,000
shares for each Fund of $.01 par value;
outstanding, 364,910,046; 146,549,428
and 140,803,973 shares, respectively $ 3,649,100 $ 1,465,494 $ 1,408,040
Additional paid-in capital 361,232,083 1,796,157,756 1,791,765,598
Undistributed (excess of distributions over) net investment income (714) 2,603,940 (9,195)
Accumulated net realized gain (loss) (Note 1) 214 (34,674,891) 98,442,393
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies (Note 4) -- 233,840,676 241,678,060
Total-- representing net assets applicable to outstanding
capital stock -------------- -------------- --------------
$364,880,683 $1,999,392,975 $2,133,284,896
-------------- -------------- --------------
Net asset value per share of outstanding capital stock $ 1.00 $ 13.64 $ 15.15
============== ============== ==============
See accompanying notes to financial statements.
<PAGE>
Statements of assets and liabilities (continued)
Retirement Annuity Mutual Funds
Feb. 28, 1997 (Unaudited)
Global Growth Income
Yield Dimensions Advantage
Fund Fund Fund
Assets
Investments in securities, at value (Note 1):
(identified cost, $74,671,808; $680,176,396 and
$176,856,837, respectively) $74,867,825 $726,567,677 $180,859,847
Cash in bank on demand deposit 87,894 95,142 75,999
Receivable for investment securities sold -- 4,050,040 250,438
Dividends and accrued interest receivable 1,243,255 743,657 3,201,156
Unrealized appreciation on foreign currency
contracts held, at value (Notes 1 and 4) 51,551 -- --
Receivable (for capital stock sold) from:
IDS Life accounts 799,713 7,154,775 1,948,915
IDS Life of New York accounts 55,796 415,391 145,356
-------------- -------------- --------------
Total assets 77,106,034 739,026,682 186,481,711
-------------- -------------- --------------
Liabilities
Dividends payable to separate accounts (Note 1) 106,072 1,356,936 1,105,684
Payable for investment securities purchased 7,198,532 13,601,952 9,096,038
Accrued investment management and services fee 41,286 331,931 75,914
Accrued administrative service fee 2,949 26,344 6,122
Unrealized depreciation on foreign currency
contracts held, at value (Notes 1 and 4) 20,743 -- --
Other accrued expenses 58,421 177,167 174,658
-------------- -------------- --------------
Total liabilities 7,428,003 15,494,330 10,458,416
-------------- -------------- --------------
Net assets applicable to outstanding capital stock $69,678,031 $723,532,352 $176,023,295
============== ============== ==============
Represented by
Capital stock -- authorized 10,000,000,000
shares for each Fund of $.01 par value;
outstanding, 6,782,609; 63,161,590 and
17,295,879 shares, respectively $ 67,826 $ 631,616 $ 172,959
Additional paid-in capital 69,381,061 684,052,642 171,918,100
Undistributed (excess of distributions over) net investment income 434,841 (81) (2,641)
Accumulated net realized loss (Notes 1 and 9) (415,548) (7,543,106) (68,133)
Unrealized appreciation of investments and on translation
of assets and liabilities in foreign currencies (Note 4) 209,851 46,391,281 4,003,010
-------------- -------------- --------------
Total-- representing net assets applicable to outstanding capital stock $69,678,031 $723,532,352 $176,023,295
-------------- -------------- --------------
Net asset value per share of outstanding capital stock $ 10.27 $ 11.46 $ 10.18
============== ============== ==============
See accompanying notes to financial statements.
<PAGE>
Statements of operations
Retirement Annuity Mutual Funds
Six months ended Feb. 28, 1997 (Unaudited)
Capital Special Managed
Resource Income Fund
Fund Fund
Investment income
Income:
Dividends (net of foreign taxes withheld of $17,625;
$0 and $92,506, respectively) $ 20,033,333 $ 253,563 $ 17,381,946
Dividends earned from affiliates 379,250 -- 145,750
Interest (net of foreign taxes withheld of $112,958 for
Special Income Fund) 8,419,950 76,988,145 46,027,615
-------------- -------------- --------------
Total income 28,832,533 77,241,708 63,555,311
-------------- -------------- --------------
Expenses (Note 2):
Investment management services fee 13,859,730 5,834,392 11,251,921
Administrative services fees and expenses 816,413 466,941 643,350
Custodian fees and expenses 469,648 202,517 200,808
Compensation of board members and officers 14,750 15,222 8,542
Printing and postage 258,218 44,700 121,984
Audit fees 12,805 12,518 11,988
Other 112,951 134,321 114,110
-------------- -------------- --------------
Total expenses 15,544,515 6,710,611 12,352,703
-------------- -------------- --------------
Investment income-- net 13,288,018 70,531,097 51,202,608
-------------- -------------- --------------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on security transactions (including
$773,277,221 and $21,294,699 realized loss on investments
of affiliated issuers for Capital Resource Fund and
Managed Fund) (Note 3) (150,979,706) 34,950,396 206,271,009
Net realized gain (loss) on foreign currency transactions (1,622) 17,818 13,560
Net realized gain on option contracts written (Note 8) -- 95,656 1,161,360
Net realized loss on financial futures contracts (Note 7) -- (5,578,019) (783,611)
-------------- -------------- --------------
Net realized gain (loss) on investments and foreign currencies (150,981,328) 29,485,851 206,662,318
Net change in unrealized appreciation or depreciation
of investments and on translation of assets and liabilities
in foreign currencies 535,969,991 42,218,821 296,358,221
-------------- -------------- --------------
Net gain on investments and foreign currencies 384,988,663 71,704,672 503,020,539
-------------- -------------- --------------
Net increase in net assets resulting from operations $398,276,681 $142,235,769 $554,223,147
============== ============== ==============
See accompanying notes to financial statements.
<PAGE>
Statements of operations (continued)
Retirement Annuity Mutual Funds
Six months ended Feb. 28, 1997 (Unaudited)
Moneyshare International Aggressive
Fund Equity Growth
Fund Fund
Investment Income
Income:
Dividends (net of foreign taxes withheld of $0;
$1,439,518 and $10,248, respectively) $ -- $ 9,651,077 $ 3,762,911
Interest 8,716,480 4,359,300 10,060,018
-------------- -------------- --------------
Total income 8,716,480 $14,010,377 13,822,929
-------------- -------------- --------------
Expenses (Note 2):
Investment management services fee 820,833 8,099,556 6,432,080
Administrative services fees and expenses 40,414 459,972 490,034
Custodian fees and expenses 15,322 889,464 157,963
Compensation of board members and officers 6,652 8,518 10,610
Printing and postage 7,651 44,343 68,894
Audit fees 7,221 11,402 10,388
Other 14,959 161,905 135,328
-------------- -------------- --------------
Total expenses 913,052 9,675,160 7,305,297
-------------- -------------- --------------
Investment income-- net 7,803,428 4,335,217 6,517,632
-------------- -------------- --------------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on security transactions (Note 3) 134 (47,442,185) 99,140,267
Net realized gain on foreign currency transactions -- 3,354,333 1,329
Net realized gain on option contracts written (Note 8) -- -- 404,923
-------------- -------------- --------------
Net realized gain (loss) on investments and foreign currencies 134 (44,087,852) 99,546,519
Net change in unrealized appreciation or depreciation
of investments and on translation of assets and liabilities
in foreign currencies -- 117,764,342 (8,147,650)
-------------- -------------- --------------
Net gain on investments and foreign currencies 134 73,676,490 91,398,869
-------------- -------------- --------------
Net increase in net assets resulting from operations $7,803,562 $78,011,707 $97,916,501
============== ============== ==============
See accompanying notes to financial statements.
<PAGE>
Statements of operations (continued)
Retirement Annuity Mutual Funds
Six months ended Feb. 28, 1997 (Unaudited)
Global Growth Income
Yield Dimensions Advantage
Fund Fund Fund
Investment income
Income:
Dividends $ -- $ 2,114,647 $ 75,368
Interest 1,397,912 1,679,076 5,105,722
-------------- -------------- --------------
Total income 1,397,912 3,793,723 5,181,090
-------------- -------------- --------------
Expenses (Note 2):
Investment management services fee 180,037 1,375,690 324,938
Administrative services fees and expenses 12,860 109,231 24,697
Custodian fees and expenses 34,148 157,340 112,461
Compensation of board members and officers 10,520 8,920 4,248
Printing and postage 5,761 8,887 7,302
Audit fees 12,060 13,905 14,595
Other 113 337 672
-------------- -------------- --------------
Total expenses 255,499 1,674,310 488,913
-------------- -------------- --------------
Investment income-- net 1,142,413 2,119,413 4,692,177
-------------- -------------- --------------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on security transactions (Note 3) 12,890 (7,105,098) (4,539)
Net realized loss on foreign currency transactions (434,841) -- --
-------------- -------------- --------------
Net realized loss on investments and foreign currencies (421,951) (7,105,098) (4,539)
Net change in unrealized appreciation or depreciation
of investments and on translation of assets and liabilities
in foreign currencies 81,127 46,583,556 4,349,723
-------------- -------------- --------------
Net gain (loss) on investments and foreign currencies (340,824) 39,478,458 4,345,184
-------------- -------------- --------------
Net increase in net assets resulting from operations $ 801,589 $41,597,871 $9,037,361
============== ============== ==============
See accompanying notes to financial statements.
<PAGE>
Statements of changes in net assets
Retirement Annuity Mutual Funds
Capital Resource Fund Special Income Fund
Six months ended Year ended Six months ended Year ended
Feb. 28, 1997 Aug. 31, 1996 Feb. 28, 1997 Aug. 31, 1996
(Unaudited) (Unaudited)
Operations and distributions
Investment income-- net $ 13,288,018 $ 49,437,780 $ 70,531,097 $ 140,371,676
Net realized gain (loss) on investments
and foreign currencies (150,981,328) 679,462,201 29,485,851 32,869,470
Net change in unrealized appreciation or
depreciation of investments and on
translation of assets and liabilities
in foreign currencies 535,969,991 (494,927,652) 42,218,821 (49,126,958)
----------- ------------ ---------- -----------
Net increase in net assets
resulting from operations 398,276,681 233,972,329 142,235,769 124,114,188
----------- ------------ ---------- -----------
Distributions to shareholders from:
Net investment income (11,201,100) (47,593,459) (68,411,260) (135,814,306)
Net realized gain (671,576,857) (10,771,339) (11,869,083) --
Excess distributions of net investment
income (Note 1) (2,085,297) (1,869,994) (2,184,020) --
----------- ------------ ---------- -----------
Total distributions (684,863,254) (60,234,792) (82,464,363) (135,814,306)
----------- ------------ ---------- -----------
Capital share transactions (Note 6)
Proceeds from sales 55,650,133 410,478,022 44,370,094 214,108,604
Reinvested distributions at net asset value 671,576,857 60,234,792 82,464,363 135,814,306
Payments for redemptions (397,314,579) (117,295,599) (157,899,755) (129,574,450)
----------- ------------ ---------- -----------
Increase (decrease) in net assets from
capital share transactions 329,912,411 353,417,215 (31,065,298) 220,348,460
----------- ------------ ---------- -----------
Total increase in net assets 43,325,838 527,154,752 28,706,108 208,648,342
----------- ------------ ---------- -----------
Net assets at beginning of period 4,371,868,864 3,844,714,112 1,911,847,626 1,703,199,284
----------- ------------ ---------- -----------
Net assets at end of period $4,415,194,702 $4,371,868,864 $1,940,553,734 $1,911,847,626
----------- ------------ ---------- -----------
Excess of distributions over net
investment income $ (2,085,297) $ (2,086,918) $ (2,184,020) $ (2,119,837)
============== ================= ================= =================
See accompanying notes to financial statements.
<PAGE>
Statements of changes in net assets (continued)
Retirement Annuity Mutual Funds
Managed Fund Moneyshare Fund
Six months ended Year ended Six months ended Year ended
Feb. 28, 1997 Aug. 31, 1996 Feb. 28, 1997 Aug. 31, 1996
(Unaudited) (Unaudited)
Operations and distributions
Investment income-- net $ 51,202,608 $ 98,305,594 $ 7,803,428 $ 12,658,921
Net realized gain on investments
and foreign currencies 206,662,318 275,882,292 134 325
Net change in unrealized appreciation or
depreciation of investments and on
translation of assets and liabilities in
foreign currencies 296,358,221 (34,119,724) -- --
----------- ------------ ---------- -----------
Net increase in net assets resulting
from operations 554,223,147 340,068,162 7,803,562 12,659,246
----------- ------------ ---------- -----------
Distributions to shareholders from:
Net investment income (48,977,557) (97,692,300) (7,802,714) (12,658,921)
Net realized gain (229,851,535) -- -- --
Excess distributions of net investment
income (Note 1) (1,876,547) (784,045) (714) --
----------- ------------ ---------- -----------
Total distributions (280,705,639) (98,476,345) (7,803,428) (12,658,921)
----------- ------------ ---------- -----------
Capital share transactions (Note 6)
Proceeds from sales 71,522,945 203,558,285 198,328,271 247,288,271
Reinvested distributions at net asset value 280,705,639 98,476,345 7,803,428 12,658,921
Payments for redemptions (109,899,662) (105,925,809) (129,371,007) (198,768,626)
----------- ------------ ---------- -----------
Increase in net assets from capital share
transactions 242,328,922 196,108,821 76,760,692 61,178,566
----------- ------------ ---------- -----------
Total increase in net assets 515,846,430 437,700,638 76,760,826 61,178,891
----------- ------------ ---------- -----------
Net assets at beginning of period 3,481,917,294 3,044,216,656 288,119,857 226,940,966
----------- ------------ ---------- -----------
Net assets at end of period $3,997,763,724 $3,481,917,294 $364,880,683 $288,119,857
----------- ------------ ---------- -----------
Excess of distributions over net
investment income $ (1,876,547) $ (2,225,051) $ (714) $ (714)
============== ================= ================= =================
See accompanying notes to financial statements.
<PAGE>
Statements of changes in net assets (continued)
Retirement Annuity Mutual Funds
International Equity Fund Aggressive Growth Fund
Six months ended Year ended Six months ended Year ended
Feb. 28, 1997 Aug. 31, 1996 Feb. 28, 1997 Aug. 31, 1996
(Unaudited) (Unaudited)
Operations and distributions
Investment income-- net $ 4,335,217 $ 21,510,160 $ 6,517,632 $ 11,060,108
Net realized gain (loss) on investments
and foreign currencies (44,087,852) 89,338,162 99,546,519 243,201,058
Net change in unrealized appreciation or
depreciation of investments and on
translation of assets and liabilities in
foreign currencies 117,764,342 33,859,236 (8,147,650) (79,505,605)
----------- ------------ ---------- -----------
Net increase in net assets resulting from
operations 78,011,707 144,707,558 97,916,501 174,755,561
----------- ------------ ---------- -----------
Distributions to shareholders from:
Net investment income -- (15,453,784) (6,508,156) (11,052,242)
Net realized gain (30,049,649) (23,947,543) (213,792,618) --
Excess distributions of net investment
income (Note 1) -- (18,917,064) (9,195) (7,244)
----------- ------------ ---------- -----------
Total distributions (30,049,649) (58,318,391) (220,309,969) (11,059,486)
----------- ------------ ---------- -----------
Capital share transactions (Note 6)
Proceeds from sales 113,972,638 335,601,053 142,784,527 388,624,475
Reinvested distributions at net asset value 30,049,649 58,318,391 220,309,969 11,059,486
Payments for redemptions (67,041,763) (47,735,823) (48,511,014) (34,177,762)
----------- ------------ ---------- -----------
Increase in net assets from capital share
transactions 76,980,524 346,183,621 314,583,482 365,506,199
----------- ------------ ---------- -----------
Total increase in net assets 124,942,582 432,572,788 192,190,014 529,202,274
----------- ------------ ---------- -----------
Net assets at beginning of period 1,874,450,393 1,441,877,605 1,941,094,882 1,411,892,608
----------- ------------ ---------- -----------
Net assets at end of period $1,999,392,975 $1,874,450,393 $2,133,284,896 $1,941,094,882
----------- ------------ ---------- -----------
Undistributed (excess of distributions over)
net investment income $ 2,603,940 $ (1,731,277) $ (9,195) $ (9,476)
============== ============== ============== ==============
See accompanying notes to financial statements.
<PAGE>
Statements of changes in net assets (continued)
Retirement Annuity Mutual Funds
Global Yield Growth Dimensions Fund
Six months ended For the period Six months ended For the period
Feb. 28, 1997 from May 1, 1996* Feb. 28, 1997 from May 1, 1996*
(Unaudited) to Aug. 31, 1996 (Unaudited) to Aug. 31, 1996
Operations and distributions
Investment income-- net $ 1,142,413 $ 154,190 $ 2,119,413 $ 413,128
Net realized loss on investments and
foreign currencies (421,951) (3,709) (7,105,098) (438,008)
Net change in unrealized appreciation or
depreciation of investments and on
translation of assets and liabilities in
foreign currencies 81,127 128,724 46,583,556 (192,275)
----------- ------------ ---------- -----------
Net increase (decrease) in net assets resulting
from operations 801,589 279,205 41,597,871 (217,155)
----------- ------------ ---------- -----------
Distributions to shareholders from:
Net investment income (707,572) (144,078) (2,119,413) (413,128)
Excess distributions of net investment
income (Note 1) -- -- (81) --
----------- ------------ ---------- -----------
Total distributions (707,572) (144,078) (2,119,494) (413,128)
Capital share transactions
Proceeds from sales 48,484,565 20,834,514 513,523,201 171,304,119
Reinvested distributions at net asset value 707,572 144,078 2,119,494 413,128
Payments for redemptions (539,074) (182,768) (2,409,263) (266,421)
----------- ------------ ---------- -----------
Increase in net assets from capital share
transactions 48,653,063 20,795,824 513,233,432 171,450,826
----------- ------------ ---------- -----------
Total increase in net assets 48,747,080 20,930,951 552,711,809 170,820,543
----------- ------------ ---------- -----------
Net assets at beginning of period 20,930,951 -- 170,820,543 --
----------- ------------ ---------- -----------
Net assets at end of period $69,678,031 $20,930,951 $723,532,352 $170,820,543
----------- ------------ ---------- -----------
Undistributed (excess of distributions over)
net investment income $ 434,841 $ -- $ (81) $ --
============== ============== ============== ==============
*Commencement of operations.
See accompanying notes to financial statements.
<PAGE>
Statements of changes in net assets (continued)
Retirement Annuity Mutual Funds
Income Advantage Fund
Six months ended For the period
Feb. 28, 1997 from May 1, 1996*
(Unaudited) to Aug. 31, 1996
Operations and distributions
Investment income-- net $ 4,692,177 $ 582,774
Net realized loss on investments
and foreign currencies (4,539) (66,235)
Net change in unrealized appreciation or
depreciation of investments and on
translation of assets and liabilities in
foreign currencies 4,349,723 (346,713)
--------- --------
Net increase in net assets
resulting from operations 9,037,361 169,826
--------- --------
Distributions to shareholders from:
Net investment income (4,689,536) (582,774)
Excess distributions of net investment
income (Note 1) (2,641) --
--------- --------
Total distributions (4,692,177) (582,774)
--------- --------
Capital share transactions
Proceeds from sales 118,823,552 48,762,664
Reinvested distributions at net asset value 4,692,177 582,774
Payments for redemptions (675,770) (94,338)
--------- --------
Increase in net assets from capital share
transactions 122,839,959 49,251,100
--------- --------
Total increase in net assets 127,185,143 48,838,152
--------- --------
Net assets at beginning of period 48,838,152 --
--------- --------
Net assets at end of period $176,023,295 $48,838,152
--------- --------
Excess of distributions over net
investment income $ (2,641) $ (2,641)
============ ===========
*Commencement of operations.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Retirement Annuity Mutual Funds
1. Summary of significant accounting policies
Each Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, (non-diversified for Global Yield) open-end management investment
company.
The investment objectives of each Fund are as follows:
Capital Resource invests primarily in U.S. common stocks;
Special Income invests primarily in investment grade bonds;
Managed invests in stocks, convertible securities, bonds and money
market instruments;
Moneyshare invests in money market securities;
International Equity invests primarily in common stocks of foreign
issuers;
Aggressive Growth invests primarily in stocks of small- and
medium-sized companies;
Global Yield invests primarily in debt securities of U.S. and foreign
issuers;
Growth Dimensions invests primarily in common stocks of U.S. and
foreign companies showing potential for significant growth;
Income Advantage invests primarily in long-term, high-yielding,
high-risk debt securities below investment grade issued by U.S. and
foreign corporations.
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:
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
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 when market quotations are not readily
available. Determination of fair value involves, among other things,
references to market indexes, matrices and data from independent brokers.
Short-term securities in Capital Resource, Special Income, Managed,
International Equity, Aggressive Growth, Global Yield, Growth Dimensions
and Income Advantage 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.
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 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 and 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 and/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 Feb. 28, 1997, investments in securities for Special Income Fund,
Managed Fund, Aggressive Growth Fund, Global Yield, and Income Advantage
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
Feb. 28, 1997, was $33,833,144, $16,286,675, $3,270,000, $761,250 and
$6,203,400 that represents 1.74%, 0.41%, 0.15%, 1.09%, and 3.52% of net
assets for Special Income Fund, Managed Fund, Aggressive Growth Fund,
Global Yield Fund and Income Advantage Fund respectively. Pursuant to
guidelines adopted by the board, certain unregistered securities are
determined to be liquid and are not included within the limitations
specified above.
Securities purchased on a when-issued basis
Delivery and payment for securities that have been purchased by Special
Income Fund on a forward-commitment or when-issued basis can take place
one month or more after the transaction date. During this period, such
securities are subject to market fluctuations and they may affect each
Fund's net assets the same as owned securities. The Fund designates cash
or liquid high-grade debt securities at least equal to the amount of its
commitment. As of Feb. 28, 1997, the Fund had entered into outstanding
when-issued or forward-commitment of $24,327,513.
Federal 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.
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.
Dividends
At Feb. 28, 1997, dividends declared for each Fund payable March 3,
1997 are as follows:
Capital Resource $0.032
Special Income $0.075
Managed $0.110
Moneyshare $0.004
International Equity $0.004
Aggressive Growth $0.017
Global Yield $0.021
Growth Dimensions $0.022
Income Advantage $0.069
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,
Moneyshare, Global Yield and Income Advantage Funds and declared and paid
quarterly for Capital Resource, Managed, International Equity, Aggressive
Growth and Growth Dimensions Funds. 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.
2. Investment management and services agreement
The Funds have entered into an agreement with IDS Life for managing
investments, record keeping 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 annually as follows:
Fund Percentage Range
- --------------------------------------------------------------------------------
Capital Resource 0.630% to 0.570%
Special Income 0.610% to 0.535%
Managed 0.630% to 0.550%
Moneyshare 0.510% to 0.440%
International Equity 0.870% to 0.795%
Aggressive Growth 0.650% to 0.575%
Global Yield 0.840% to 0.780%
Growth Dimensions 0.630% to 0.570%
Income Advantage 0.620% to 0.545%
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 0.35% 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 Trust
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.
The Funds have also 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 annually as follows:
Fund Percentage Range
- --------------------------------------------------------------------------------
Capital Resource 0.050% to 0.030%
Special Income 0.050% to 0.025%
Managed 0.040% to 0.020%
Moneyshare 0.030% to 0.020%
International Equity 0.060% to 0.035%
Aggressive Growth 0.060% to 0.035%
Global Yield 0.060% to 0.040%
Growth Dimensions 0.050% to 0.030%
Income Advantage 0.050% to 0.025%
Additional administrative services paid by the Funds are office expenses,
consultant's fees and compensation of officers and employees. Under this
agreement, the Funds also pay taxes, audit and certain legal fees,
registration fees for shares, compensation of board members, corporate
filing fees, organizational expenses, and any other expenses properly
payable by the Funds approved by the board.
3. Securities transactions
For the six months ended Feb. 28, 1997, cost of purchases and proceeds
from sales of securities aggregated, respectively, $1,145,983,135 and
$1,065,429,447 for Moneyshare Fund. Cost of purchases and proceeds from
sales of securities (other than short-term obligations) aggregated for
each Fund are as follows:
Fund Purchases Proceeds
- --------------------------------------------------------------------------------
Capital Resource $3,603,575,110 $3,642,891,664
Special Income 596,859,002 617,175,168
Managed 1,320,316,503 1,313,468,631
International Equity 944,628,601 738,337,344
Aggressive Growth 1,914,242,151 1,707,527,660
Global Yield 40,370,763 1,000,940
Growth Dimensions 510,888,096 52,273,163
Income Advantage 179,286,856 65,560,147
Net realized gains and losses on investment sales are determined on an
identified cost basis.
Brokerage commissions paid to brokers affiliated with IDS Life for the six
months ended Feb. 28, 1997 are as follows:
Capital Resource $467,604
Managed 90,720
Aggressive Growth 23,052
Growth Dimensions 8,107
4. Foreign currency contracts
At Feb. 28, 1997, International Equity Fund, Aggressive Growth Fund and
Global Yield Fund had entered into foreign currency exchange contracts
that obligate the Funds to deliver currencies at a specified future date.
The unrealized appreciation and/or depreciation (see Summary of
significant accounting policies) on these contracts is included in the
accompanying financial statements. The terms of the open contracts are as
follows:
International Equity Fund
<TABLE>
<CAPTION>
Currency to Currency to Unrealized Unrealized
Exchange date be delivered be received appreciation depreciation
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
03-03-97 16,554,496 1,996,306,715 $ -- $ 5,489
U.S. Dollar Japanese Yen
03-03-97 1,343,372 822,842 -- 3,168
U.S. Dollar British Pound
03-03-97 497,350 829,281,074 -- 7,101
U.S. Dollar Italian Lira
03-03-97 6,634,582 16,431,870 -- 16,834
U.S. Dollar Malaysian Dollar
03-04-97 4,565,206 2,794,568 -- 13,554
U.S. Dollar British Pound
03-04-97 16,532,561 1,996,306,715 -- --
U.S. Dollar Japanese Yen
03-04-97 1,996,306,715 16,524,692 -- --
Japanese Yen U.S. Dollar
03-04-97 1,201,764 2,016,620,558 -- 9,591
U.S. Dollar Italian Lira
03-04-97 4,271,023 10,588,079 -- 6,794
U.S. Dollar Malaysian Dollar
03-05-97 8,540,308 5,243,860 629 --
U.S. Dollar British Pound
03-05-97 2,162,300 5,365,424 -- 1,437
U.S. Dollar Malaysian Dollar
03-06-97 1,594,254 1,237,899 -- --
Australian Dollar U.S. Dollar ---- -------
$629 $63,968
==== =======
Aggressive Growth Fund
Currency to Currency to Unrealized Unrealized
Exchange date be delivered be received appreciation depreciation
- -------------------------------------------------------------------------------------------------------------------
03-05-97 624,579 456,520 $-- $397,310
Canadian Dollar U.S. Dollar
Global Yield Fund
Currency to Currency to Unrealized Unrealized
Exchange date be delivered be received appreciation depreciation
- -------------------------------------------------------------------------------------------------------------------
03-03-97 1,573,451 2,626,483,790 $ -- $20,743
U.S. Dollar Italian Lira
03-14-97 752,467 93,005,000 19,591 --
U.S. Dollar Japanese Yen
03-21-97 615,169 76,300,000 18,830 --
U.S. Dollar Japanese Yen
03-24-97 901,270 110,000,000 13,130 --
U.S. Dollar Japanese Yen
$51,551 $20,743
------- -------
</TABLE>
5. Lending of portfolio securities
Presented below is information regarding securities on loan at Feb. 28, 1997.
<TABLE>
<CAPTION>
Capital Special International Aggressive
Resource Income Managed Equity Growth
<S> <C> <C> <C> <C> <C>
Value of securities on loan to brokers $35,654,000 $33,949,348 $210,313,320 $385,870,944 $2,884,375
Collateral received for securities loaned:
Cash $33,651,000 $13,558,730 $141,553,470 $375,607,725 $3,055,000
U.S. Government Securities, at value 2,716,726 24,681,400 75,307,646 28,156,731 --
Total collateral received for securities
loaned $36,367,726 $38,240,130 $216,861,116 $403,764,456 $3,055,000
For the six months ended Feb. 28, 1997, income from securities lending
amounted to $46,646, $125,995, $404,944, $523,348 and $109,273 for Capital
Resource, Special Income, Managed, International Equity and Aggressive
Growth Funds, respectively, for the period ended Feb. 28, 1997.
</TABLE>
The risks to each Fund of securities lending are that the borrower may not
provide additional collateral when required or return the securities when due.
6. Capital share transactions
Transactions in shares of each Fund for the six months ended Feb. 28, 1997 and
the year ended Aug. 31, 1996 were as follows:
<TABLE>
<CAPTION>
Six months ended Feb. 28, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Special International Aggressive
Resource Income Managed Moneyshare Equity Growth
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sold 2,190,375 3,735,584 4,155,027 198,345,158 8,381,895 8,719,603
Issued for reinvested
distributions 27,742,560 6,921,392 15,300,711 7,804,087 2,159,914 14,126,036
Redeemed (15,779,133) (13,295,989) (5,274,241) (129,382,104) (4,905,151) (3,037,725)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 14,153,802 (2,639,013) 14,181,497 76,767,141 5,636,658 19,807,914
Six months ended Feb. 28, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Global Growth Income
Yield Dimensions Advantage
- ------------------------------------------------------------------------------------------------------------------------------------
Sold 4,689,790 46,006,916 11,908,907
Issued for reinvested
distributions 68,171 185,004 467,560
Redeemed (51,938) (210,396) (78,933)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase 4,706,023 45,981,524 12,297,534
Year ended Aug. 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Special International Aggressive
Resource Income Managed Moneyshare Equity Growth
- ------------------------------------------------------------------------------------------------------------------------------------
Sold 15,763,681 18,199,129 13,012,081 247,309,082 25,280,136 24,647,795
Issued for reinvested
distributions 2,332,581 11,583,367 6,196,744 12,659,993 4,329,590 675,192
Redeemed (4,539,063) (11,162,609) (6,655,268) (198,785,551) (3,581,859) (2,123,509)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase 13,557,199 18,619,887 12,553,557 61,183,524 26,027,867 23,199,478
Year ended Aug. 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Global Growth Income
Yield Dimensions Advantage
- ------------------------------------------------------------------------------------------------------------------------------------
Sold 2,080,476 17,165,340 4,948,431
Issued for reinvested
distributions 14,337 41,469 59,529
Redeemed (18,227) (26,743) (9,615)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase 2,076,586 17,180,066 4,998,345
</TABLE>
7. Interest rate futures contracts
At Feb. 28, 1997, investments in securities for Special Income Fund
included securities valued at $5,386,700 that were pledged as collateral
to cover initial margin deposits on 600 open sales contracts. The market
value of the open contracts at Feb. 28, 1997 was $66,543,750 with a net
unrealized gain (see Summary of significant accounting policies) of
$1,881,250.
8. Options contracts written
The number of contracts and premium amounts associated with option
contracts written (see Summary of significant accounting policies) by
Special Income Fund during the six months ended Feb. 28, 1997 is as
follows:
<TABLE>
<CAPTION>
Puts Calls
- ------------------------------------------------------------------------------------------------------------------------------------
Contracts Premium Contracts Premium
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance Aug. 31, 1996 -- $ -- -- $ --
Opened 1,050 305,000 79,550 481,856
Closed or expired (200) (105,250) (78,600) (218,356)
Exercised -- -- (100) (80,750)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance Feb. 28, 1997 850 $ 199,750 850 $ 182,750
- ------------------------------------------------------------------------------------------------------------------------------------
The number of contracts and premium amounts associated with option
contracts written (see Summary of significant accounting policies) by
Managed Fund during the six months ended Feb. 28, 1997 is as follows:
Puts Calls
- ------------------------------------------------------------------------------------------------------------------------------------
Contracts Premium Contracts Premium
- ------------------------------------------------------------------------------------------------------------------------------------
Balance Aug. 31, 1996 -- $ -- 2,300 $ 396,260
Opened 415 211,206 5,915 2,509,896
Closed or expired (150) (88,312) (4,005) (1,782,366)
Exercised (265) (122,894) (3,660) (646,946)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance Feb. 28, 1997 -- $ -- 550 $ 476,844
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The number of contracts and premium amounts associated with option
contracts written by Aggressive Growth Fund during the six months ended
Feb. 28, 1997 is as follows:
Calls
- --------------------------------------------------------------------------------
Contracts Premium
- --------------------------------------------------------------------------------
Balance Aug. 31, 1996 -- $ --
Opened 4,800 1,100,923
Closed or expired (4,800) (1,100,923)
Exercised -- --
- --------------------------------------------------------------------------------
Balance Feb. 28, 1997 -- $ --
- --------------------------------------------------------------------------------
The number of contracts and premium amounts associated with option
contracts written by Growth Dimensions Fund during the six months ended
Feb. 28, 1997 is as follows:
Puts
- --------------------------------------------------------------------------------
Contracts Premium
- --------------------------------------------------------------------------------
Balance Aug. 31, 1996 -- $ --
Opened 560 1,023,358
Closed or expired (560) (1,023,358)
Exercised -- --
- --------------------------------------------------------------------------------
Balance Feb. 28, 1997 -- $ --
- --------------------------------------------------------------------------------
9. Capital loss carryover
For federal income tax purposes, Growth Dimensions and Income Advantage
Fund had capital loss carryovers at Aug. 31, 1996 of $428,324 and $63,594,
respectively, which, if not offset by subsequent capital gains, will
expire in 2004. It is unlikely the board will authorize a distribution of
any net realized gain for a Fund until its capital loss carryover has been
offset or expires.
<PAGE>
10. Financial highlights
<TABLE>
<CAPTION>
The tables below show certain important information for evaluating each
Fund's results.
Capital Resource Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes*
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, $25.57 $24.42 $23.43 $24.58 $23.90 $23.15 $17.54 $20.17 $15.06 $17.71
beginning of period
Income from investment operations:
Net investment income .08 .30 .29 .29 .23 .21 .40 .52 .39 .31
Net gains (losses) on securities 2.33 1.22 3.70 1.56 1.89 1.75 6.61 (2.06) 5.38 (2.54)
(both realized and unrealized)
Total from investment operations 2.41 1.52 3.99 1.85 2.12 1.96 7.01 (1.54) 5.77 (2.23)
Less distributions:
Dividends from net investment
income (.07) (.29) (.29) (.29) (.23) (.21) (.40) (.52) (.39) (.31)
Distributions from realized gains(4.05) (.07) (2.71) (2.71) (1.21) (1.00) (1.00) (.57) (.27) (.11)
Excess distributions from net
investment income (.01) (.01) -- -- -- -- -- -- -- --
Total distributions (4.13) (.37) (3.00) (3.00) (1.44) (1.21) (1.40) (1.09) (.66) (.42)
Net asset value, end of period $23.85 $25.57 $24.42 $23.43 $24.58 $23.90 $23.15 $17.54 $20.17 $15.06
Ratios/supplemental data
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net assets, end of period $4,415 $4,372 $3,845 $2,899 $2,308 $1,681 $1,191 $702 $660 $454
(in millions)
Ratio of expenses to average .69%## .68% .69% .68% .68% .70% .70% .70% .73% .69%
daily net assets
Ratio of net income to average .59%## 1.15% 1.22% 1.20% .94% .91% 1.94% 2.69% 2.22% 2.01%
daily net assets
Portfolio turnover rate (excluding 84% 131% 88% 85% 65% 63% 74% 82% 42% 111%
short-term securities)
Total return*** 9.43% 6.15% 17.18% 7.61% 8.87% 8.54% 40.68% (7.79%) 38.72% (12.59%)
Average brokerage $0.0513 $0.0565 -- -- -- -- -- -- -- --
commission rate#
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Six months ended Feb. 28, 1997 (Unaudited).
*** Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
# Beginning in fiscal 1996, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period by the total number of related shares purchased
and sold.
## Adjusted to an annual basis.
<PAGE>
Special Income Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes*
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net asset value, $11.54 $11.58 $11.05 $12.08 $11.26 $10.72 $10.10 $11.11 $10.88 $11.09
beginning of period
Income from investment operations:
Net investment income .43 .88 .88 .84 .85 .90 .97 .99 1.03 1.03
Net gains (losses) on securities .43 (.07) .56 (.99) .82 .54 .62 (1.01) .23 (.21)
(both realized and unrealized)
Total from investment operations .86 .81 1.44 (.15) 1.67 1.44 1.59 (.02) 1.26 .82
Less distributions:
Dividends from net investment (.43) (.85) (.87) (.85) (.85) (.90) (.97) (.99) (1.03) (1.03)
income
Distributions from realized gains (.07) -- (.02) (.02) -- -- -- -- -- --
Excess distributions from net -- -- (.02) (.01) -- -- -- -- -- --
investment income
Total distributions (.50) (.85) (.91) (.88) (.85) (.90) (.97) (.99) (1.03) (1.03)
Net asset value, end of period $11.90 $11.54 $11.58 $11.05 $12.08 $11.26 $10.72 $10.10 $11.11 $10.88
Ratios/supplemental data
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net assets, end of period $1,941 $1,912 $1,703 $1,559 $1,551 $1,136 $800 $641 $565 $428
(in millions)
Ratio of expenses to average .69%# .68% .68% .67% .69% .71% .70% .71% .73% .69%
daily net assets
Ratio of net income to average 7.27%# 7.47% 8.08% 7.20% 7.41% 8.22% 9.31% 9.42% 9.37% 9.45%
daily net assets
Portfolio turnover rate (excluding 33% 56% 56% 57% 77% 92% 97% 118% 132% 169%
short-term securities)
Total return*** 7.45% 7.08% 13.75% (1.30%) 15.47% 13.96% 16.54% (.12%) 12.19% 7.76%
Average brokerage
commission rate# -- $0.0546 -- -- -- -- -- -- -- --
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Six months ended Feb. 28, 1997 (Unaudited).
*** Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
# Adjusted to an annual basis.
## Beginning in fiscal 1996, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period by the total number of related shares purchased
and sold.
<PAGE>
Managed Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes*
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net asset value, $16.00 $14.85 $13.65 $14.32 $13.08 $12.59 $10.93 $12.08 $9.87 $11.34
beginning of period
Income from investment operations:
Net investment income .23 .46 .40 .47 .49 .56 .58 .65 .48 .42
Net gains (losses) on securities
(both realized and unrealized) 2.31 1.15 1.20 (.26) 1.60 .95 2.11 (.67) 2.25 (1.47)
Total from investment operations
2.54 1.61 1.60 .21 2.09 1.51 2.69 (.02) 2.73 (1.05)
Less distributions:
Dividends from net investment
income (.23) (.46) (.40) (.47) (.49) (.56) (.58) (.65) (.48) (.42)
Distributions from realized gains
(1.06) -- -- (.41) (.36) (.46) (.45) (.48) (.04) --
Excess distributions from net
investment income
(1.29) (.46) (.40) (.88) (.85) (1.02) (1.03) (1.13) (.52) (.42)
Total distributions
Net asset value, end of period $17.25 $16.00 $14.85 $13.65 $14.32 $13.08 $12.59 $10.93 $12.08 $ 9.87
Ratios/supplemental data
Net assets, end of period $ 3,998 $ 3,482 $3,044 $2,499 $1,858 $1,169 $810 $545 $462 $381
(in millions)
Ratio of expenses to average .65%# .65% .68% .68% .69% .71% .70% .71% .73% .69%
daily net assets
Ratio of net income to average 2.68%# 2.94% 2.96% 3.46% 3.70% 4.35% 4.86% 5.42% 5.06% 4.42%
daily net assets
Portfolio turnover rate (excluding 36% 85% 72% 79% 58% 50% 52% 37% 69% 62%
short-term securities)
Total return*** 15.88% 10.95% 11.94% 1.51% 16.33% 12.14% 25.24% (.23%) 28.47% (9.06%)
Average brokerage $0.0467 $0.0606 -- -- -- -- -- -- -- --
commission rate#
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Six months ended Feb. 28, 1997 (Unaudited).
*** Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
# Adjusted to an annual basis.
## Beginning in fiscal 1996, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period by the total number of related shares purchased
and sold.
<PAGE>
Moneyshare Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes*
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net asset value,
beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income .02 .05 .05 .03 .03 .04 .07 .08 .09 .07
Less distributions:
Dividends from
net investment income (.02) (.05) (.05) (.03) (.03) (.04) (.07) (.08) (.09) (.07)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Ratios/supplemental data
1997** 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net assets, end of period $365 $288 $227 $179 $180 $246 $285 $274 $160 $102
(in millions)
Ratio of expenses to average .57%# .56% .59% .57% .60% .60% .57% .62% .54% .58%
daily net assets
Ratio of net income to average 4.88%# 5.02% 5.23% 3.12% 2.67% 3.93% 6.55% 7.85% 8.68% 6.77%
daily net assets
Total return*** 2.43% 5.16% 5.27% 3.15% 2.73% 3.98% 6.77% 8.18% 8.99% 7.01%
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Six months ended Feb. 28, 1997 (Unaudited).
*** Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
# Adjusted to annual basis.
<PAGE>
International Equity Fund
Financial highlights
Per share income and capital changes*
Fiscal period ended Aug. 31,
1997** 1996 1995 1994 1993 1992***
Net asset value, 13.30 $12.55 $12.91 $11.60 $10.01 $10.00
beginning of period
Income from investment operations:
Net investment income .03 .20 .17 .14 .15 .05
Net gains (losses) on securities .52 1.01 (.37) 1.61 1.81 .01
(both realized and unrealized)
Total from investment operations .55 1.21 (.20) 1.75 1.96 .06
Less distributions:
Dividends from net investment income -- (.44) (.16) (.08) (.15) (.05)
Distributions from realized gains (.21) (.02) -- (.29) (.22) --
Excess distributions from -- -- -- (.07) -- --
realized gains
Total distributions (.21) (.46) (.16) (.44) (.37) (.05)
Net asset value, end of period $13.64 $13.30 $12.55 $12.91 $11.60 $10.01
Ratios/supplemental data
1997** 1996 1995 1994 1993 1992***
Net assets, end of period $1,999 $1,874 $1,442 $1,111 $291 $39
(in millions)
Ratio of expenses to average .99%# .96% 1.03% .98% 1.10% 1.57%#
daily net assets
Ratio of net income to average .44%# 1.28% 1.56% 1.09% 1.37% .93%#
daily net assets
Portfolio turnover rate (excluding 40% 58% 38% 51% 62% 22%
short-term securities)
Total return## 4.14% 9.64% (1.77%) 15.11% 19.76% .55%
Average brokerage $0.0186 $0.0186 -- -- -- --
commission rate###
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Six months ended Feb. 28, 1997 (Unaudited).
*** Commencement of operations. Period from Jan. 13, 1992 to Aug. 31, 1992.
# Adjusted to an annual basis.
## Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
### Beginning in fiscal 1996, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period by the total number of related shares purchased
and sold.
<PAGE>
Aggressive Growth Fund
Financial highlights
Per share income and capital changes*
Fiscal period ended Aug. 31,
1997*** 1996 1995 1994 1993 1992**
Net asset value, $16.04 $14.44 $11.46 $11.68 $9.00 $10.00
beginning of period
Income from investment operations:
Net investment income .05 .10 .08 .01 .02 .02
Net gains (losses) on securities .82 1.60 2.98 (.22) 2.68 (1.00)
(both realized and unrealized)
Total from investment operations .87 1.70 3.06 (.21) 2.70 (.98)
Less distributions:
Dividends from net investment income (.05) (.10) (.08) (.01) (.02) (.02)
Distributions from realized gains (1.71) -- -- -- -- --
Total distributions (1.76) (.10) (.08) (.01) (.02) (.02)
Net asset value, end of period $15.15 $16.04 $14.44 $11.46 $11.68 $9.00
Ratios/supplemental data
1997*** 1996 1995 1994 1993 1992**
Net assets, end of period $2,133 $1,941 $1,412 $763 $299 $57
(in millions)
Ratio of expenses to average .69%# .69% .70% .69% .75% .98%#
daily net assets
Ratio of net income to average .61%# .65% .72% .14% .28% .21%#
daily net assets
Portfolio turnover rate (excluding 97% 189% 116% 59% 55% 28%
short-term securities)
Total return## 5.42% 11.82% 26.80% (1.77%) 29.98% (9.76%)
Average brokerage $0.0429 $0.0531 -- -- -- --
commission rate###
* For a share outstanding throughout the period. Rounded to the nearest cent.
** Commencement of operations. Period from Jan. 13, 1992 to Aug. 31, 1992.
*** Six months ended Feb. 28, 1997 (Unaudited).
# Adjusted to an annual basis.
## Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
### Beginning in fiscal 1996, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period by the total number of related shares purchased
and sold.
</TABLE>
<PAGE>
Global Yield Fund
Financial highlights
Per share income and capital changes*
Fiscal period ended Aug. 31,
1997*** 1996**
Net asset value, $10.08 $10.00
beginning of period
Income from investment operations:
Net investment income .25 .12
Net gains on securities .12 .07
(both realized and unrealized)
Total from investment operations .37 .19
Less distributions:
Dividends from net investment (.18) (.11)
income
Net asset value, end of period $10.27 $10.08
Ratios/supplemental data
1997*** 1996**
Net assets, end of period $70 $21
(in millions)
Ratio of expenses to average 1.17%# 1.77%#
daily net assets
Ratio of net income to average 5.24%# 4.96%#
daily net assets
Portfolio turnover rate (excluding 3% 4%
short-term securities)
Total return## 3.67% 1.95%
* For a share outstanding throughout the period.Rounded to the nearest cent.
** Commencement of operations. Period from May 1 to Aug. 31, 1996.
*** Six months ended Feb. 28, 1997 (Unaudited).
# Adjusted to an annual basis.
## Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
<PAGE>
Growth Dimensions Fund
Financial highlights
Per share income and capital changes*
Fiscal period ended Aug. 31,
1997*** 1996**
Net asset value, $9.94 $10.00
beginning of period
Income from investment operations:
Net investment income .04 .03
Net gains(losses) on securities 1.52 (.06)
(both realized and unrealized)
Total from investment operations 1.56 (.03)
Less distributions:
Dividends from net investment (.04) (.03)
income
Net asset value, end of period $11.46 $9.94
Ratios/supplemental data
1997*** 1996**
Net assets, end of period $724 $171
(in millions)
Ratio of expenses to average .77%# 1.04%#
daily net assets
Ratio of net income to average .97%# 1.69%#
daily net assets
Portfolio turnover rate (excluding 10% 4%
short-term securities)
Total return## 15.69% (.22%)
Average brokerage $0.0345 $0.0559
commission rate###
* For a share outstanding throughout the period.Rounded to the nearest cent.
** Commencement of operations. Period from May 1 to Aug. 31, 1996.
*** Six months ended Feb. 28, 1997 (Unaudited).
# Adjusted to an annual basis.
## Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
### Beginning in fiscal year 1996, the Fund is required to disclose an average
brokerage commission rate. The rate is calculated by dividing the total
brokerage commissions paid on applicable purchases and sales of portfolio
securities for the period by the total number of related shares purchased
and sold.
<PAGE>
Income Advantage Fund
Financial highlights
Per share income and capital changes*
Fiscal period ended Aug. 31,
1997*** 1996**
Net asset value, $9.77 $10.00
beginning of period
Income from investment operations:
Net investment income .43 .18
Net gains (losses) on securities .41 (.23)
(both realized and unrealized)
Total from investment operations .84 (.05)
Less distributions:
Dividends from net (.43) (.18)
investment income
Net asset value, end of period $10.18 $9.77
Ratios/supplemental data
1997*** 1996**
Net assets, end of period $176 $49
(in millions)
Ratio of expenses to average .94%# 1.53%#
daily net assets
Ratio of net income to average 8.98%# 8.14%#
daily net assets
Portfolio turnover rate (excluding 67% 22%
short-term securities)
Total return## 8.60% (.48%)
* For a share outstanding throughout the period.Rounded to the nearest cent.
** Commencement of operations. Period from May 1 to Aug. 31, 1996.
*** Six months ended Feb. 28, 1997 (Unaudited).
# Adjusted to an annual basis.
## Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
<PAGE>
Retirement Annuity Mutual Funds (Percentages represent value of
Capital Resource Fund investments compared to total net assets)
Feb. 28, 1997 (Unaudited)
Common stocks(98.2%)
Issuer Shares Value(a)
Aerospace & defense (1.8%)
Boeing 500,000 $ 50,875,000
Raytheon 610,000 28,746,250
Total 79,621,250
Banks and savings & loans (10.1%)
Bank of Boston 650,000 48,993,750
First Union 700,000 61,425,000
KeyCorp 1,000,000 53,500,000
Mellon Bank 750,000 60,281,250
Norwest 900,000 44,775,000
SouthTrust 1,000,000 39,625,000
State Street Boston 1,300,000 104,487,500
Washington Mutual 650,000 34,368,750
Total 447,456,250
Beverages & tobacco (2.5%)
Anheuser-Busch 1,100,000 48,950,000
Coca-Cola 1,000,000 61,000,000
Total 109,950,000
Building materials & construction (2.6%)
Sherwin-Williams 1,000,000 56,125,000
Tyco Intl 1,000,000 59,000,000
Total 115,125,000
Chemicals (2.2%)
Betz Laboratories 957,500 62,117,812
Praxair 700,000 34,037,500
Total 96,155,312
Communications equipment & services (0.6%)
ADC Telecommunications 100,000(b) 2,700,000
Motorola 400,000 22,350,000
Total 25,050,000
Computers & office equipment (11.1%)
Adaptec 1,000,000(b) 38,062,500
Cisco Systems 500,000(b) 27,812,500
Compaq Computer 800,000(b) 63,400,000
Computer Sciences 500,000(b) 33,750,000
Fiserv 1,150,000(b) 37,662,500
Hewlett-Packard 526,500 29,484,000
Ikon Office Solutions 750,000 30,937,500
Microsoft 700,000(b) 68,250,000
Novell 4,750,000(b,d)48,093,750
Parametric Technology 625,000(b) 35,234,375
Solectron 900,000(b) 47,587,500
Sterling Commerce 1,000,000(b) 29,000,000
Total 489,274,625
Electronics (5.2%)
Intel 500,000 70,937,500
KLA Instruments 600,000(b) 25,012,500
Microchip Technology 675,000(b) 25,228,125
Molex 1,000,000 35,750,000
Teradyne 1,500,000(b) 40,875,000
Thomas & Betts 750,000 33,468,750
Total 231,271,875
Energy (4.4%)
Exxon 600,000 59,925,000
Mobil 350,000 42,962,500
Noble Affiliates 700,000 27,300,000
Tosco 900,000 25,087,500
Unocal 1,000,000 38,625,000
Total 193,900,000
Energy equipment & services (1.5%)
Fluor 600,000 36,375,000
Transocean Offshore 500,000 27,937,500
Total 64,312,500
Environmental services (1.3% )
USA Waste Service 1,700,000(b) 61,200,000
Financial services (3.2%)
Associates First
Capital Cl A 500,000 24,125,000
Franklin Resources 500,000 29,250,000
Morgan Stanley 568,350 35,877,094
Travelers Group 950,000 50,943,750
Total 140,195,844
Food (1.7%)
ConAgra 800,000 42,400,000
Quaker Oats 600,000 21,525,000
Tootsie Roll Inds 225,001(d) 9,506,292
Total 73,431,292
Health care (10.3%)
ALZA 1,500,000(b) 42,562,500
Amgen 800,000(b) 48,900,000
Baxter Intl 1,100,000 50,600,000
Boston Scientific 700,000(b) 46,375,000
Bristol-Myers Squibb 200,000 26,100,000
Guidant 1,000,000 67,000,000
Johnson & Johnson 1,000,000 57,625,000
Lilly (Eli) 364,200 31,821,975
Merck 600,000 55,200,000
Watson Pharmaceuticals 700,000(b) 30,537,500
Total 456,721,975
Health care services (1.5%)
Tenet Healthcare 2,000,000(b) 54,250,000
United Healthcare 200,000 9,975,000
Total 64,225,000
Household products (2.3%)
Gillette 500,000 39,562,500
Procter & Gamble 500,000 60,062,500
Total 99,625,000
Industrial equipment & services (3.1%)
AGCO 1,000,000 28,375,000
Deere & Co 1,200,000 51,150,000
Illinois Tool Works 700,000 59,062,500
Total 138,587,500
Insurance (2.4%)
American Intl Group 500,000 60,500,000
Progressive Corp Ohio 700,000 46,287,500
Total 106,787,500
Leisure time & entertainment (1.4%)
Carnival Cl A 1,800,000 63,450,000
Media (0.7%)
Digital Generation 100,000(b) 487,500
Time Warner 700,000 28,700,000
Total 29,187,500
Multi-industry conglomerates (5.8%)
Emerson Electric 500,000 49,500,000
General Electric 707,900 72,825,213
General Signal 1,500,000 65,437,500
Westinghouse Electric 4,000,000 69,000,000
Total 256,762,713
Paper & packaging (1.3%)
Crown Cork & Seal 1,000,000 55,500,000
Restaurants & lodging (0.6%)
Hilton Hotels 1,000,000 25,125,000
Retail (8.6%)
American Stores 1,000,000 44,750,000
Arbor Drugs 1,500,000 28,875,000
AutoZone 1,900,000(b) 47,025,000
Federated Dept Stores 1,500,000(b) 52,125,000
Kmart 3,000,000(b,e)37,500,000
Kohl's 500,000(b) 23,000,000
Rite Aid 1,300,000 54,762,500
Safeway 1,000,000(b,e)48,125,000
Wal-Mart Stores 1,700,000 44,837,500
Total 381,000,000
Textiles & apparel (0.8%)
Nike Cl B 500,000 35,937,500
Transportation (0.7%)
Union Pacific 500,000 30,125,000
Foreign (10.5%)(f)
ACE 1,000,000 65,000,000
Amway Asia Pacific 963,600 39,146,250
Baan 350,000(b) 15,531,250
BioChem Pharma 500,000(b) 26,500,000
Elan ADR 700,000(b,e)24,237,500
Mid Ocean 500,000(b) 24,750,000
Nokia ADR 550,000(e) 32,175,000
Novartis 29,000(b) 33,168,713
Royal Dutch Petroleum 400,000 69,200,000
Schlumberger 500,000 50,312,500
SGS-THOMSON
Microelectronics 500,000(b) 33,000,000
SmithKline Beecham ADR 700,000 51,975,000
Total 464,996,213
Total common stocks
(Cost: $3,946,455,881) $4,334,974,849
Other (--%)
Novartis
Rights 29,000(b) $ 1,836,476
Viacom
Warrants 350,000 10,938
Total 1,847,414
Total other
(Cost: $ 908,625) $ 1,847,414
Short-term securities(2.3%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
Commercial paper (2.2%)
Abbott Laboratories
03-25-97 5.26% $11,100,000 $11,061,224
American General Capital
03-04-97 5.31 5,500,000(c) 5,497,580
ANZ (Delaware)
03-06-97 5.31 1,700,000 1,698,751
Bell Atlantic
03-18-97 5.27 12,000,000 11,970,250
BellSouth Capital Funding
03-25-97 5.30 5,600,000 5,579,014
BOC Group
04-01-97 5.30 3,800,000 3,782,755
Cargill Global
03-17-97 5.30 800,000(c) 798,115
03-17-97 5.35 2,200,000(c) 2,194,808
Ciesco LP
03-24-97 5.27 4,800,000 4,783,900
CIT Group Holdings
03-12-97 5.32 6,700,000 6,689,150
Colgate-Palmolive
03-20-97 5.27 6,400,000(c) 6,382,267
Commerzbank U.S. Finance
03-19-97 5.25 2,500,000 2,493,437
Dean Witter, Discover & Co.
03-19-97 5.34 8,800,000 8,776,680
Fleet Funding
04-01-97 5.28 3,600,000(c) 3,583,725
Gannett
03-10-97 5.29 300,000(c) 299,605
Gateway Fuel
04-08-97 5.31 5,700,000 5,668,292
Lincoln Natl
03-07-97 5.32 1,800,000(c) 1,798,410
NBD Bank Canada
03-25-97 5.27 4,600,000 4,583,900
SBC Communications Capital
03-21-97 5.27 5,900,000(c) 5,882,792
Transamerica Finance
03-03-97 5.31 900,000 899,734
04-21-97 5.38 2,200,000 2,182,417
Total 96,606,806
Certificate of deposit (0.1%)
Morgan Guaranty
03-06-97 5.30 5,000,000 5,000,007
Total short-term securities
(Cost: $101,609,047) $101,606,813
Total investment in securities
(Cost: $4,048,973,553) (g) $4,438,429,076
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Commercial paper sold within terms of a private placement memorandum, exempt
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.
(d) Investments representing 5% or more of the outstanding voting securities of
the issuer. Transactions with companies that are or were affiliates during the
six months ended Feb. 28, 1997 are as follows:
<TABLE>
<CAPTION>
Beginning Purchase Sales Ending Dividend
Issuer cost cost cost cost income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Apple Computer $ 351,119,690 $ -- $351,119,690 $ -- $ --
Arbour Health Care 10,510,400 560,160 11,070,560 -- --
Coram Healthcare 53,056,518 525,635 53,582,153 -- --
Data Processing Res 7,191,913 1,980,000 9,171,913 -- --
Fulcrum 12,349,507 -- 12,349,507 -- --
Giddings & Lewis 35,781,980 -- 35,781,980 -- 63,000
Highlands Insurance Group 11,771,851 -- 11,771,851 -- --
Interim Services -- 55,325,150 55,325,150 -- --
New England Business
Services 16,439,262 -- 16,439,262 -- --
Novell * 271,423,011 -- 207,240,186 64,182,825 --
Owens & Minor 36,989,691 -- 36,989,691 -- 135,000
PRI Automation -- 14,108,748 14,108,748 -- --
PacifiCare Health Systems
CIB 69,745,990 -- 69,745,990 -- --
Quality Food Centers 19,161,528 -- 19,161,528 -- --
Primadonna Resorts 29,029,535 -- 29,029,535 -- --
Secure Computing 16,450,748 -- 16,450,748 -- --
Station Casinos 24,837,880 -- 24,837,880 -- --
Tootsie Roll Inds * 31,269,770 1,968,777 25,321,471 7,917,076 181,250
- ------------------------------------------------------------------------------------------------------------------------------------
$ 997,129,274 $ 74,468,470 $999,497,843 $ 72,099,901 $ 379,250
- ------------------------------------------------------------------------------------------------------------------------------------
* Issuer was not an affiliate for the entire fiscal period
</TABLE>
(e) Security is partially or fully on loan. See Note 5 to the financial
statements.
(f) Foreign security values are stated in U.S. dollars.
(g) At Feb. 28, 1997, the cost of securities for federal income tax purposes was
approximately $4,048,974,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $468,320,000
Unrealized depreciation (78,865,000)
Net unrealized appreciation $389,455,000
See accompanying notes to investments in securities.
<PAGE>
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds (Percentages represent value of
Special Income Fund investments compared to total net assets)
Feb. 28, 1997 (Unaudited)
====================================================================================================================================
Issuer Coupon Maturity Principal Value(a)
rate year amount
Bonds (92.6%)
U.S. government obligations (14.3%)
<S> <C> <C> <C> <C>
U.S. Treasury 3.375% 2007 $17,017,680 $ 17,065,500
5.875 2005 50,000,000 47,750,500
6.375 2002 10,900,000(h) 10,892,043
7.00 2006 30,000,000 30,846,000
7.25 2016 12,700,000(i) 13,194,665
7.50 2016 40,000,000 42,558,000
7.875 2021 12,000,000 13,300,440
8.125 2019 42,200,000 47,897,422
Resolution Funding Corp 8.125 2019 48,059,000 53,792,919
Total 277,297,489
Mortgage backed securities (19.2%)
Federal Home Loan Mtge Corp 8.00 2024 8,431,093 8,617,673
8.50 2027 10,320,750 10,688,375
9.00 2007-25 12,508,821 13,017,891
Collateralized Mtge Obligation 3.24 2023 6,101,857 3,192,309
7.00 2022 23,395,000 22,430,745
8.50 2022 10,000,000 10,637,000
Inverse Floater 4.17 2024 16,150,000(g) 9,368,292
Federal Natl Mtge Assn 6.00 2024-26 28,479,077 26,362,597
6.50 2010-25 98,960,286 94,965,305
7.00 2025 7,535,718 7,348,757
7.50 2025-27 71,037,365 70,939,389
8.00 2021-22 5,556,966 5,680,940
8.50 2007-23 19,213,784 20,042,219
9.00 2024 9,258,513 9,845,873
Collateralized Mtge Obligation
Inverse Floater 3.29 2024 13,627,812(g) 6,195,476
3.30 2023 7,244,751(g) 5,130,563
Govt Natl Mtge Assn 6.00 2023-24 40,430,603 37,551,944
7.00 2024 7,210,969(j) 7,391,244
Structured Asset Securities Corp
Collateralized Mtge Obligation 6.76 2028 2,500,000 2,483,594
Total 371,890,186
Aerospace & defense (0.7%)
Airplanes Cl D 10.875 2019 2,750,000 3,148,750
Alliant Techsystems
Sr Sub Nts 11.75 2003 3,000,000(d) 3,330,000
BE Aerospace 9.875 2006 5,000,000(d) 5,231,250
Newport News 8.625 2006 1,250,000 1,293,750
Total 13,003,750
Airlines (0.3%)
AMR 9.50 2001 4,500,000 4,912,200
Automotive & related (2.2%)
Arvin Capital 9.50 2027 5,000,000 4,994,200
Ford Motor Credit 7.50 2003 5,000,000 5,168,650
General Motors Acceptance 7.85 1997 20,000,000 20,295,200
Medium-term Nts 5.95 1998 10,000,000 9,969,000
Mascotech
Cv 4.50 2003 3,500,000 3,027,500
Total 43,454,550
Banks and savings & loans (1.4%)
First Nationwide 10.625 2003 2,940,000(d) 3,263,400
Fleet/Norstar Financial 9.00 2001 5,000,000 5,421,550
9.90 2001 5,000,000 5,550,400
Morgan (JP)
Sr Sub Nts Series A 4.00 2012 13,400,000(k) 13,383,920
Total 27,619,270
Building materials & construction (0.6%)
Masco 9.00 2001 5,000,000 5,427,650
McQuay (AAF)
Sr Nts 8.875 2003 6,670,000 6,736,700
Total 12,164,350
Chemicals (0.4%)
General Chemical 9.25 2003 5,000,000 5,137,500
ISP Holdings 9.75 2002 1,733,000(d) 1,841,312
Total 6,978,812
Communications equipment & services (0.9%)
Celcaribe
Zero Coupon Cv 5.95 1998 1,700,000(d,m) 1,538,500
Zero Coupon Cv 16.23 1998 1,450,000(d,m) 1,856,000
CenCall Communications
Zero Coupon Cv 22.79 1999 4,000,000(m) 3,060,000
Comcast Cellular
Zero Coupon with attached put 9.53 2000 4,475,000(l) 3,283,531
GST Telecommunications
Zero Coupon 2.84 2000 1,745,000(d,m) 1,361,100
Intl Cabletel
Zero Coupon 11.48 2001 5,000,000(d,m) 3,431,250
Shared Technologies
Zero Coupon 12.25 1999 4,000,000(d,m) 3,410,000
Total 17,940,381
Computers & office equipment (0.3%)
HMT Technology 5.75 2004 2,040,000(d) 2,154,750
Softkey Intl
Cv 5.50 2000 5,000,000(d) 3,925,000
Total 6,079,750
Electronics (0.3%)
Cirrus Logic
Sub Nts 6.00 2003 2,375,000(d) 2,039,531
Thomas & Betts 6.50 2006 4,500,000(d) 4,267,575
Total 6,307,106
Energy (2.5%)
Forcenergy
Sr Sub Nts 9.50 2006 2,100,000 2,215,500
Honam Oil 7.125 2005 9,000,000(d) 8,753,850
Occidental Petroleum
Medium-term Nts 10.98 2000 5,000,000 5,608,150
with attached put 9.25 2019 8,725,000 10,156,947
Oryx Energy 10.00 2001 5,000,000 5,434,800
PDV America 7.875 2003 7,500,000 7,594,650
Transamerican Refining 18.00 2002 3,000,000(k) 2,782,500
Triton Energy
Sr Sub Disc Nts 9.75 2000 5,000,000 5,293,750
Total 47,840,147
Financial services (2.1%)
Cityscape Financial 11.00 1998 15,000,000 15,000,000
First Union REIT
Sub Nts 8.875 2003 4,000,000 3,780,000
GPA Delaware 8.75 1998 1,500,000 1,526,250
Household Finance
Sr Sub Nts 9.55 2000 6,500,000 7,021,040
Malan Realty REIT
Cv 9.50 2004 1,490,000(d) 1,493,725
Olympic Financial 13.00 2000 6,500,000 7,418,125
Salomon Brothers Holdings
Medium-term Nts 6.99 1999 5,000,000 5,042,900
Total 41,282,040
Furniture & appliances (0.3%)
Interface 9.50 2005 5,000,000(d) 5,212,500
Health care (0.6%)
Dade Intl
Sr Sub Nts 11.125 2006 3,000,000(e) 3,281,250
Lilly (Eli) 6.77 2036 10,000,000 9,104,200
Total 12,385,450
Health care services (2.1%)
Columbia/HCA Healthcare 7.69 2025 6,500,000 6,521,255
Foundation Health 7.75 2003 3,250,000 3,351,140
Healthsource
Cv 5.00 2003 180,000(e) 177,300
Magellan Health
Sr Sub Nts 11.25 2004 5,000,000(d) 5,581,250
Merit Behavioral 11.50 2005 2,000,000(d) 2,192,500
Novacare
Sub Deb 5.50 2000 3,000,000 2,715,000
Owens & Minor
Sr Sub Nts 10.875 2006 2,000,000 2,200,000
Tenet Healthcare
Sr Nts 8.625 2003 4,000,000 4,200,000
Sr Sub Nts 10.125 2005 11,800,000 13,024,250
Total 39,962,695
Household products (0.2%)
Revlon Consumer Products 9.375 2001 2,500,000 2,584,375
Sweetheart Cup
Sr Sub Nts 9.625 2000 2,000,000 2,065,000
Total 4,649,375
Industrial equipment & services (0.9%)
AGCO 8.50 2006 2,800,000(d) 2,915,500
Case 7.25 2005 5,475,000 5,454,085
Clark Equipment 9.75 2001 5,000,000 5,443,300
IDEX 9.75 2002 3,000,000 3,135,000
Molten Metal Technology
Sub Nts 5.50 2006 1,000,000(e) 667,500
Total 17,615,385
Insurance (1.3%)
Americo Life 9.25 2005 4,500,000 4,483,125
Executive Risk Capital Trust 8.675 2027 3,500,000(d) 3,538,885
Nationwide CSN Trust 9.875 2025 6,500,000(d) 11,536,560
New England Mutual
Credit Sensitive Nts 7.875 2024 5,000,000(d) 4,958,200
Total 24,516,770
Leisure time & entertainment (1.1%)
Coast Hotels 13.00 2002 1,600,000(d) 1,800,000
E & S Holdings
Sr Sub Nts 10.375 2006 1,500,000(d) 1,578,750
Hammons (JQ) Hotels 8.875 2004 3,400,000 3,391,500
Plitt Theatres 10.875 2004 5,000,000 5,150,000
Trump Atlantic City Funding 11.25 2006 7,500,000 7,256,250
Trump Holdings
Sr Nts 15.50 2005 2,500,000 2,862,500
Total 22,039,000
Media (5.0%)
Ackerley Communications
Sr Secured Nts 10.75 2003 2,500,000(d) 2,681,250
American Telecasting
Zero Coupon 9.73 2000 4,000,000(e,m) 1,200,000
Cablevision Systems 10.50 2016 5,000,000 5,275,000
10.75 2004 2,000,000 2,075,000
Cox Communications 7.625 2025 10,000,000 9,766,200
Heritage Media Services 8.75 2006 2,000,000 1,960,000
Lamar Advertising 9.625 2006 1,350,000 1,417,500
News America Holdings 8.875 2023 2,500,000 2,714,500
10.125 2012 10,000,000 11,351,400
People's Choice TV
Zero Coupon 10.43 2000 5,000,000(m) 2,300,000
Scandinavian Broadcasting
Cv Sub Deb 7.25 2005 4,670,000 4,203,000
Time Warner Entertainment 6.21 2000 2,500,000 2,509,375
7.975 2004 1,500,000 1,544,265
8.11 2006 3,000,000 3,099,510
8.18 2007 3,000,000 3,108,360
8.375 2033 7,500,000(d) 7,580,250
9.15 2023 10,000,000 11,012,600
United Artist Theatre 9.30 2015 4,915,733(d) 4,553,197
Univision Network
Sub Nts 7.00 2002 14,390,000(e) 13,454,650
ViaCom 7.00 2003 2,500,000 2,355,025
8.00 2006 3,000,000 2,970,000
Total 97,131,082
Metals (0.5%)
Bar Technologies
with warrants 13.50 2001 4,500,000(d) 4,612,500
Santa Fe Gold 8.375 2005 5,000,000 5,231,250
Total 9,843,750
Multi-industry conglomerates (0.7%)
Mark IV Inds 8.75 2003 3,500,000 3,609,375
Prime Succession Acquisition 10.75 2004 2,125,000(d) 2,353,437
Talley Mfg & Technology
Sr Nts 10.75 2003 2,500,000 2,637,500
USI American Holdings
Sr Nts 7.25 2006 6,000,000(d) 5,831,820
Total 14,432,132
Natural gas (0.4%)
Transco Energy 9.875 2020 6,000,000 7,070,640
Paper & packaging (2.5%)
APP Intl Finance 11.75 2005 5,000,000 5,512,500
Chesapeake 9.875 2003 5,000,000 5,678,400
Crown Cork & Seal 8.00 2023 5,000,000 4,902,800
Federal Paperboard 10.00 2011 6,000,000 7,369,080
Gaylord 1996 5,500,000 6,105,000
Grupo Industrial Durango 12.625 2003 4,000,000 4,500,000
Pope & Talbot 8.375 2013 4,000,000 3,531,520
Scotia Pacific Holding 7.95 2015 6,378,272 6,412,077
Silgan
Sr Sub Nts 11.75 2002 2,000,000 2,152,500
Silgan Holdings
Sr Disc Deb 13.25 2002 552,000 560,970
Stone Container
Sr Nts 12.625 1998 1,500,000 1,588,125
Total 48,312,972
Retail (1.9%)
Dairy Mart Convenience Stores
Sr Sub Nts 10.25 2004 1,500,000 1,477,500
Dayton Hudson 8.50 2022 3,000,000 3,030,750
Eye Care Center 12.00 2003 3,000,000 3,255,000
Kroger 8.15 2006 3,000,000 3,101,250
9.25 2005 3,000,000 3,165,000
Penn Traffic
Sr Nts 8.625 2003 3,500,000 2,870,000
Pueblo Xtra Intl
Sr Nts 9.50 2003 4,000,000 3,860,000
Revco (DS)
Sr Nts 9.125 2000 2,000,000 2,093,020
Wal-Mart Stores 7.00 2006 14,566,985(d) 14,642,588
Total 37,495,108
Textiles & apparel (0.8%)
Dominion Textiles 9.25 2006 1,000,000 1,040,000
Pillowtex 10.00 2006 4,500,000(d) 4,764,375
Polysindo Intl Finance 11.375 2006 2,300,000 2,507,000
VF Corp 9.50 2001 5,000,000 5,482,650
Westpoint Stevens 8.75 2001 2,500,000 2,606,250
Total 16,400,275
Transportation (0.3%)
CSX
Medium-term Nts 9.23 1998 5,000,000 5,134,950
Utilities -- electric (4.4%)
Boston Edison 9.875 2020 5,000,000 5,426,400
Cleveland Electric 9.50 2005 6,000,000 6,336,720
Long Island Lighting 9.625 2024 9,000,000 9,128,790
Louisiana Power & Light
Sale Lease-backed Obligation 10.67 2017 2,500,000 2,661,300
Midland Cogeneration Venture 10.33 2002 1,708,953 1,837,124
10.33 2002 1,472,137(d) 1,582,548
11.75 2005 5,000,000 5,693,750
Niagara Mohawk Power 7.75 2006 10,500,000 9,970,485
Ohio Edison 6.875 2005 2,000,000 1,895,100
RGS Funding AEGCO
Sale Lease-backed Obligation 9.82 2022 2,484,779 2,971,373
RGS Funding IME
Sale Lease-backed Obligation 9.82 2022 2,484,803 2,971,403
Sithe Independent Funding 9.00 2013 7,500,000(d) 7,655,175
Texas-New Mexico Power
1st Mtge 9.25 2000 3,500,000 3,718,750
Texas Utilities 9.70 2002 6,000,000 6,704,280
Texas Utilities Electric
1st Mtge 9.75 2021 6,350,000 7,171,690
TU Electric Captial 8.175 2037 10,000,000(k) 10,028,300
Total 85,753,188
Utilities -- telephone (2.6%)
Bell Telephone of Pennsylvania 7.375 2033 10,000,000 9,581,900
CCPR Services 10.00 2007 1,500,000(d) 1,503,750
Geotek Communications
Cv 12.00 2001 4,630,000(e) 4,514,250
Zero Coupon 18.71 2005 5,000,000(d,m) 3,050,000
GTE 10.25 2020 7,000,000 7,938,560
New England Tel & Tel 9.00 2031 7,500,000 8,174,175
Omnipoint 11.625 2006 10,000,000(d) 10,100,000
U S WEST 7.20 2026 6,000,000 5,617,800
Total 50,480,435
Miscellaneous (1.4%)
Adams Outdoor Advertising 10.75 2006 4,500,000(e) 4,871,250
Coty 10.25 2005 1,500,000 1,635,000
Outsourcing Solutions 11.00 2006 1,775,000(d,h) 1,921,438
Packard Bioscience
Sr Sub Nts 9.375 2007 2,000,000(d) 2,035,000
Petersburg
Zero Coupon 20.83 2004 5,000,000(d,l) 4,101,950
Pierce Leahy 11.125 2006 1,250,000(d) 1,390,625
US Trust Capital 8.41 2027 3,500,000(d) 3,590,545
Unifi Communications
with warrants 14.00 2004 7,000,000(d) 7,280,000
Total 26,825,808
Foreign (20.4%)(c)
Alcan Aluminum
(U.S. Dollar) 8.875 2022 6,750,000 7,236,608
ALFA Bank Loan Participation
(U.S. Dollar) 10.85 1997 5,000,000 5,000,000
BAA Euro
(British Pound) 5.75 2006 2,000,000 3,463,117
Banca Italy N.Y.
(U.S. Dollar) 8.25 2007 5,000,000 5,284,150
Banque Audi
(U.S. Dollar) 9.375 2001 2,500,000(d) 2,612,500
CEI Citicorp
(Argentina Peso) 11.25 2007 5,000,000(d) 4,862,500
(U.S. Dollar) 8.50 2002 4,000,000(d) 3,950,000
Carter Holt Harvey
(U.S. Dollar) 8.875 2004 5,000,000 5,448,850
Celestica Intl
(U.S. Dollar) Sr Sub Nts 10.50 2006 2,000,000(d) 2,190,000
Dao Heng Bank
(U.S. Dollar) Sub Nts 7.75 2007 5,500,000(e) 5,582,500
Deutsche Bank Finance
(U.S. Dollar) Zero Coupon 4.50 2017 7,440,000(d,l) 3,059,700
Delta Electronic
(U.S. Dollar) .50 2004 1,680,000(d) 1,688,400
Dominion Textiles
(U.S. Dollar) 8.875 2003 4,000,000 4,120,000
Ford Capital BV
(U.S. Dollar) 9.875 2002 5,000,000 5,678,850
FSW Intl
(U.S. Dollar) 12.50 2006 2,750,000(d) 2,942,500
Globo Communicacoes
(U.S. Dollar) 10.50 2006 1,250,000(d) 1,284,375
Govt of Algeria
(U.S. Dollar) 2006 6,000,000 4,905,000
Govt of Argentina
(Argentina Peso) 11.75 2007 8,300,000(h) 8,746,125
(Duetsch Mark) 7.125 2023 6,500,000(k) 5,395,000
(U.S. Dollar) 11.375 2017 7,000,000(h) 7,437,500
Govt of Bulgaria
(U.S. Dollar) 6.31 2011 16,500,000(k,o) 9,920,625
Govt of Canada
(Canadian Dollar) 7.64 2001 17,000,000 14,728,651
Govt of Panama
(U.S. Dollar) 6.525 2016 4,309,755(k) 3,652,517
Govt of Poland
(Polish Zloty) 12.00 2002 18,900,000 4,885,242
(U.S. Dollar) 2.75 2024 10,000,000(k) 5,600,000
(U.S. Dollar) 3.75 2014 5,000,000(k) 4,175,000
Govt of Russia
(U.S. Dollar) 6.38 2049 7,000,000(n) 4,221,910
(U.S. Dollar) 6.60 2029 4,750,000(n) 3,402,187
(U.S. Dollar) 9.25 2001 12,100,000(d,n) 11,979,000
Govt of Venezuela
(U.S. Dollar) 6.625 2007 24,500,000(k) 22,295,000
Grupo Televisa
(U.S. Dollar) 11.375 2003 250,000 272,500
(U.S. Dollar) 13.25 2008 4,000,000(m) 2,765,000
Groupe Videotron
(U.S. Dollar) 10.625 2005 2,000,000 2,247,500
Gulf Canada Resources
(U.S. Dollar) 9.00 1999 5,000,000 5,243,750
Hydro Quebec
(U.S. Dollar) 8.50 2029 20,000,000 21,898,600
Imexsa Export Trust
(U.S. Dollar) 10.125 2003 5,000,000(d) 5,206,250
Ivaco
(U.S. Dollar) 11.50 2005 2,000,000 2,150,000
MacMillan Bloedel
(U.S. Dollar) 8.50 2004 7,500,000 7,907,250
MDC Communications
(U.S. Dollar) 10.50 2006 1,700,000 1,785,000
Natl Power
(U.S. Dollar) 8.40 2016 7,500,000 7,413,000
Ogden Euro
(U.S. Dollar) Cv 6.00 2002 2,200,000 2,081,750
Perez Companc
(U.S. Dollar) 9.00 2004 3,000,000(d) 3,000,000
Petronas
(U.S. Dollar) Cv 7.75 2015 10,000,000(d) 10,297,500
Philippine Long Distance
(U.S. Dollar) 7.85 2007 3,000,000(d) 2,987,700
(U.S. Dollar) 8.35 2017 3,000,000(d) 2,954,220
Ras Laffan Liquid Natural Gas
(U.S. Dollar) 8.29 2014 10,800,000(d) 11,423,700
Repap New Brunswick
(U.S. Dollar) 10.625 2000 2,000,000 2,022,500
Republic of Brazil
(U.S. Dollar) C Bonds 8.00 2014 6,057,535(k) 4,785,453
(U.S. Dollar) Inverse Floater 6.563 2012 5,750,000(g) 4,657,500
Republic of Columbia
(U.S. Dollar) 8.70 2016 3,000,000 3,045,000
Republic of Italy
(U.S. Dollar) 6.875 2023 7,500,000 7,052,850
Republic of Panama
(U.S. Dollar) 7.875 2002 2,500,000(d) 2,507,350
Rogers Cable Systems
(Canadian Dollar) 9.65 2014 2,700,000 1,945,572
Rogers Cantel Mobile
(U.S. Dollar) 9.375 2008 4,650,000 4,940,625
(U.S. Dollar) 11.125 2002 1,000,000 1,062,500
State of Isreal
(U.S. Dollar) 6.375 2005 3,700,000 3,464,347
Tarkett Intl
(U.S. Dollar) 9.00 2002 4,000,000(d) 4,080,000
Telekom Malaysia
(U.S. Dollar) 7.875 2025 10,000,000(d) 10,187,900
Transport Maritima Mex
(U.S. Dollar) 10.00 2006 2,550,000(d) 2,537,250
TV Azteca
(U.S. Dollar) 10.50 2007 2,500,000 2,562,500
United Kingdom Treasury
(British Pound) 8.00 2003 9,500,000 16,188,698
United Mexican States
(U.S. Dollar) 11.375 2016 5,500,000(h) 6,070,625
(U.S. Dollar) 11.50 2026 21,525,000(h) 24,064,950
Vneshekonom Bank
(U.S. Dollar) Zero Coupon 7.50 1997 9,000,000(l) 7,515,000
WMC Finance
(U.S. Dollar) 7.25 2013 10,000,000 9,762,500
Zhuhai Highway
(U.S. Dollar) 11.50 2008 10,000,000(d) 11,425,000
Total 395,259,647
Total bonds
(Cost: $1,746,227,402) $1,797,291,193
</TABLE>
Common stocks (.01%)
Issuer Shares Value(a)
Celcaribe 276,420(b,d)$ 587,392
Great Bay Power 28(b) 233
Methanex 200,000(b) 1,950,000
Specialty Foods 15,000(b) 5,625
Triangle Wire & Cable 84,444(b,e) 84,444
Total common stocks
(Cost: $6,512,694) $2,627,694
Preferred stocks & other (.04%)
American Communications Services
Warrants 6,000(d) $ 330,000
Bar Technologies
Warrants 4,500(d) 247,500
Dairy Mart Convenience Stores
Warrants 10,000 25,000
Eye Care Center
Warrants 3,000(d) 12,000
First Nationwide Bank
11.50% 25,000 2,893,750
Geotek
Warrants 250,000(d) 437,500
Paxson Communications
12.50% Pay-in-kind 33,600 3,376,800
Station Casinos
7% Cv 15,000 690,000
Total preferred stocks & other
(Cost: $6,723,375) $8,012,550
Short-term securities (6.6%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
Commercial paper (6.6%)
American General Finance
03-03-97 5.31% $4,700,000 $4,698,621
03-20-97 5.34 5,300,000 5,285,147
Ameritech Capital Funding
03-17-97 5.31 3,500,000(f) 3,491,787
ANZ (Delaware)
03-06-97 5.31 400,000 399,706
Avco Financial Services
05-12-97 5.40 4,900,000 4,844,656
BHP Finance
04-08-97 5.37 1,500,000 1,491,147
BOC Group
03-24-97 5.30% 7,000,000(f) 6,983,573
03-24-97 5.28 8,700,000(f) 8,670,763
Cargill
03-10-97 5.34 3,300,000 3,295,555
Commercial Credit
04-08-97 5.31 10,000,000 9,944,372
First Chicago NBD
03-11-97 5.31 9,000,000 8,986,775
Fleet Funding
03-13-97 5.32 2,600,000(f) 2,595,389
Gannett
03-10-97 5.29 1,500,000 1,498,024
Gateway Fuel
03-13-97 5.32 1,300,000 1,297,703
General Electric Capital
03-17-97 5.35 8,200,000 8,180,611
Goldman Sachs Group
03-13-97 5.32 2,700,000 2,695,230
Natl Australia Funding (Delaware)
03-07-97 5.34 3,700,000 3,696,732
03-12-97 5.36 2,800,000 2,794,877
Novartis Finance
03-04-97 5.32 4,700,000(f) 4,697,924
Paccar Financial
03-06-97 5.29 2,800,000 2,797,947
03-27-97 5.31 7,800,000 7,770,200
Reed Elsevier
03-14-97 5.29 10,100,000(f)10,080,779
03-14-97 5.36 6,700,000(f) 6,685,662
03-25-97 5.35 3,000,000(f) 2,989,380
04-09-97 5.33 4,000,000(f) 3,977,033
Transamerica Finance
03-14-97 5.29 1,200,000 1,197,716
UBS Finance (Delaware)
03-14-97 5.27 700,000 698,673
U S WEST Communications
04-02-97 5.31 7,000,000 6,967,147
Total 128,713,129
Total short-term securities
(Cost: $128,713,129) $128,713,129
Total investments in securities
(Cost: $1,888,176,600)(p) $1,936,644,566
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) 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 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.
(e) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 28, 1997, is as follows:
Acquisition Purchase
Security date cost
- --------------------------------------------------------------------------------
Adams Outdoor Advertising
10.75% 2006 03-05-96 thru 04-16-96 $4,518,750
American Telecasting
Zero Coupon
11.75% 2000 03-07-96 thru 03-08-96 2,635,000
Dade Intl*
Sr Sub Nts
11.125% 2006 04-30-96 3,000,000
Dao Heng Bank*
7.75% 2007 01-16-97 5,494,335
Geotek Communications
Cv
12% 2001 03-04-96 4,630,000
Healthsource*
5% 2003 06-28-96 thru 07-03-96 419,850
Molten Metal Technology*
Sub Nts
5.50% 2006 10-30-96 700,000
Triangle Wire & Cable 01-13-92 2,000,018
Univision Network
Sub Nts
7.00 % 2002 09-26-96 thru 11-05-96 12,687,250
*Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended.
(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."
This security has been determined to be liquid under guidelines established by
the board.
(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 Feb. 28, 1997. Inverse floaters in the
aggregate represent 1.1% of the Fund's net assets as of Feb. 28, 1997.
(h) Security is partially or fully on loan. See Note 5 to the financial
statements.
(i) Partially pledged as initial margin deposit on the following open interest
rate futures contract (See Note 7 to the financial statements):
Type of security Notional amount
- --------------------------------------------------------------------------------
Sales contracts
U.S. Treasury Bonds March 1990 $600,000,000
(j) Adjustable rate mortgage; interest rate varies to reflect current market
conditions; rate shown is the effective rate on Feb. 28, 1997.
(k) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 28, 1997.
(l) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(m) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(n) At Feb. 28, 1997, the cost of securities purchased, including interest
purchased, on a when-issued basis was $24,327,513.
(o) At Feb. 28, 1997, securities valued at $511,063 were held to cover open call
options written as follows:
Issuer Number of Exercise Expiration Value
contracts price date
- --------------------------------------------------------------------------------
Govt of Bulgaria 850 $59 March 1997 $211,047
At Feb. 28, 1997, cash or short-term securities were designated to cover open
put options written as follows:
Issuer Number of Exercise Expiration Value
contracts price date
- --------------------------------------------------------------------------------
Govt of Bulgaria 850 $59 March 1997 $119,723
(p) At Feb. 28, 1997, the cost of securities for federal income tax purposes was
approximately $1,884,670,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.............................$75,045,000
Unrealized depreciation.............................(23,070,000)
Net unrealized appreciation.........................$51,975,000
See accompanying notes to investments in securities.
<PAGE>
Retirement Annuity Mutual Funds
Managed Fund (Percentages represent value of
Feb. 28, 1997 (Unaudited) investments compared to total net assets)
Issuer Shares Value(a)
Common stocks (63.8%)
Aerospace & defense (3.4%)
Allied Signal 400,000 $ 28,900,000
Boeing 450,000 45,787,500
Lockheed Martin 267,802 23,700,477
United Technologies 480,000 36,120,000
Total 134,507,977
Airlines (0.4%)
Southwest Airlines 600,000 14,100,000
Banks and savings & loans (2.2%)
Citicorp 230,000 26,852,500
Norwest 700,000 34,825,000
Washington Mutual 497,300 26,294,738
Total 87,972,238
Beverages & tobacco (2.7%)
Anheuser-Busch 300,000 13,350,000
Coca-Cola 740,000 45,140,000
Philip Morris 380,000 51,347,500
Total 109,837,500
Building materials & construction (2.4%)
Clayton Homes 1,918,750 27,342,188
Martin Marietta Materials 1,144,624 30,189,458
Tyco Intl 625,000 36,875,000
Total 94,406,646
Communications equipment & services (1.0%)
ADC Telecommunications 700,000(b) 18,900,000
Loral Space Communication 1,325,000(b) 21,365,625
Total 40,265,625
Computers & office equipment (7.2%)
American Power Conversion 900,000(b) 18,787,500
Cisco Systems 200,000(b) 11,125,000
Compaq Computer 880,000(b) 69,740,000
Computer Associates 530,000 23,055,000
First Data 700,000 25,637,500
First USA Paymentech 318,500(b) 9,515,187
Hewlett Packard 500,000 28,000,000
Ikon Office Solutions 1,000 41,250
Learning 800,000(b) 7,700,000
Microsoft 400,000(b,g)39,000,000
Oracle Systems 300,000(b) 11,775,000
Solectron 475,000(b) 25,115,625
3 Com 500,000(b) 16,554,688
Total 286,046,750
Electronics (2.9%)
Intel 575,000 81,578,125
Maxim Integrated Products 500,000(b) 24,812,500
Tencor Instruments 250,000(b) 10,015,625
Total 116,406,250
Energy (1.6%)
Amoco 340,000 28,730,000
Shell Transport & Trading 330,000(g) 33,453,750
Total 62,183,750
Energy equipment & services (0.3%)
Transocean Offshore 200,000 11,175,000
Financial services (4.8%)
Advanta Cl A 553,800(g,n)22,913,475
Dean Witter, Discover & Co 850,000 32,618,750
Federal Natl Mortgage 600,000 24,000,000
Green Tree Financial 1,575,000 59,062,500
Travelers Group 1,025,000 54,965,625
Total 193,560,350
Food (0.5%)
ConAgra 400,000 21,200,000
Health care (4.6%)
Amgen 475,000(b) 29,034,375
Boston Scientific 850,000(b,g)56,312,500
Medtronic 300,000 19,425,000
Merck 525,000 48,300,000
Pfizer 350,000(l) 32,068,750
Total 185,140,625
Health care services (1.6%)
Cardinal Health 242,500 14,913,750
PacifiCare Health
Systems Cl B 200,000(b,g)16,750,000
United Healthcare 650,000 32,418,750
Total 64,082,500
Household products (1.2%)
Gillette 150,000 11,868,750
Proctor & Gamble 298,515 35,859,114
Total 47,727,864
Industrial equipment & services (1.9%)
Deere & Co 700,000 29,837,500
Illinois Tool Works 525,000 44,296,875
Total 74,134,375
Insurance (2.0%)
PennCorp Financial Group 800,000(g) 28,000,000
Terra Nova Hldgs 500,000 10,250,000
TIG Hldgs 325,000 11,618,750
Travelers/Aetna
Property/Casualty 850,000 31,343,750
UNUM 100 7,687
Total 81,220,187
Leisure time & entertainment (0.3%)
Disney (Walt) 150,000 11,137,500
Media (0.6%)
CS Wireless Systems 550(o) --
Time Warner 600,000 24,600,000
Total 24,600,000
Metals (0.4%)
Freeport Copper Cl B 500,000 17,000,000
Multi-industry conglomerates (5.2%)
American Standard 570,000(b) 25,650,000
Emerson Electric 355,000 35,145,000
General Electric 600,000 61,725,000
General Signal 650,000 28,356,250
Republic Inds 1,259,915(b) 44,726,982
Westinghouse Electric 700,000 12,075,000
Total 207,678,232
Paper & packaging (2.6%)
Crown Cork & Seal 1,100,000 61,050,000
International Paper 300,000 12,525,000
Kimberly-Clark 285,000 30,210,000
Total 103,785,000
Restaurants & lodging (1.0%)
Extended Stay America 2,000,000 39,500,000
Retail (2.4%)
CUC Intl 1,500,000(b,g)35,812,500
Dollar General 1,031,375 29,265,266
Home Depot 600,000 32,700,000
Total 97,777,766
Transportation (0.4%)
Union Pacific 250,000(g) 15,062,500
Utilities -- electric (0.3%)
CMS Energy 400,000 13,100,000
Utilities -- telephone (2.9%)
AT & T 350,000 $ 13,956,250
AirTouch Communications 1,500,000(b) 40,875,000
GTE 660,000 30,855,000
MCI Communications 880,000 31,460,000
Total 117,146,250
Miscellaneous (0.7%)
Service Intl 1,000,000 29,000,000
Foreign (6.3%) (c)
BCE 650,000(g) 31,525,000
British Telecommunications 1,000 69,750
CANTV ADR 149,700(b) 4,752,975
Ericsson Cl B 1,350,000 42,588,281
Northern Telecom 560,000 40,250,000
Novartis 27,700 31,681,840
SmithKline Beecham 630,000 46,777,500
Telebras 150,000 14,550,000
TOTAL950,000 37,643,750
Total 249,839,096
Total common stocks
(Cost: $1,890,031,704) $2,549,593,981
Preferred stocks & other (3.2%)
ALCO Standard
6.50% Cv 349,250 32,654,875
Clearnet Communications
Warrants 6,270 43,890
First Nationwide
$11.50 20,000 2,315,000
Loral Space Communication
6.00% Cv 400,000(d) 21,200,000
Mexico Value Rights 1,000(o) --
Novartis Rights 27,700 1,754,152
Paxson
12.50% Pay-in-kind 25,800(k) 2,592,900
Time Warner
10.25% Pay-in-kind 6,451(d,k) 7,160,610
UNUM
$2.34 Cv 800,000 59,200,000
Total preferred stocks & other
(Cost: $107,093,278) $126,921,427
<TABLE>
<CAPTION>
Bonds (28.8%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
U.S. government obligations (7.9%)
<S> <C> <C> <C> <C>
U.S. Treasury 5.125% 1998 $ 4,000,000 $ 3,943,160
5.375 1997-98 78,000,000(l) 77,677,250
5.75 2003 20,300,000 19,558,847
5.875 2004 12,500,000 12,095,125
6.375 1999 15,000,000 15,081,900
6.50 2005 10,000,000 9,961,000
6.625 2001 13,000,000 13,126,880
6.75 1999 30,000,000 30,393,000
7.00 2006 6,650,000 6,837,530
7.50 2016 17,450,000 18,565,928
7.75 2000 56,000,000(g) 58,259,600
7.875 2004 5,000,000 5,401,150
8.00 2021 20,000,000 22,485,000
Zero Coupon 6.46 2005 18,000,000(f) 10,560,420
Resolution Funding Corp
Zero Coupon 6.62 2011 28,000,000(f) 10,304,840
Total 314,251,630
Mortgage-backed securities (6.6%)
Federal Home Loan Mtge Corp 6.50 2025 33,503,450 31,971,337
8.00 2024 4,476,883 4,575,957
Collateralized Mtge Obligation
Trust Series Z 6.50 2023 5,707,422(i) 4,912,606
Federal Natl Mtge Assn 5.50 2009 26,317,327 24,848,294
6.00 2024 6,335,793 5,896,216
6.50 2010-25 17,900,069 17,375,479
7.00 2003-26 9,503,824 9,268,034
7.40 2004 10,000,000 10,439,900
7.50 2025-27 43,329,799 43,261,446
8.00 2022-27 15,152,072 15,441,865
8.50 2023-25 18,714,019 19,462,696
9.00 2024 3,584,946 3,812,375
Collateralized Mtge Obligation
Trust Series Z 6.00 2024 7,144,361(i) 5,306,974
7.00 2022 14,299,177(i) 12,815,568
Govt Natl Mtge Assn 7.00 2008-24 42,026,516 41,660,500
Merrill Lynch Mtge Investors 6.96 2028 7,500,000 7,119,141
8.21 2021 1,805,606(d) 1,702,066
Standard Credit Card 5.95 2004 3,000,000 2,862,780
Total 262,733,234
Aerospace & defense (0.3%)
Airplanes Cl D 10.875 2019 1,750,000 2,003,750
Alliant Techsystems
Sr Sub Nts 11.75 2003 700,000(d) 777,000
BE Aerospace 9.875 2006 2,500,000(d) 2,615,625
Newport News
Sr Nts 8.625 2006 1,000,000(d) 1,035,000
Northrup-Grumman 7.00 2006 3,750,000(d) 3,659,887
Total 10,091,262
Airlines (0.2%)
Continental Air 6.94 2015 5,000,000(m) 4,916,850
Northwest Airlines 8.07 2015 1,984,099 2,038,047
8.97 2015 986,709 1,032,275
Total 7,987,172
Automotive & related (0.3%)
Arvin Capital 9.50 2027 3,000,000 2,996,520
GMAC
Medium-term Nts 5.95 1998 7,000,000 6,991,250
8.375 1997 1,400,000 1,406,146
Total 11,393,916
Banks and savings & loans (0.9%)
BankAmerica 7.70 2026 3,700,000(d) 3,590,258
Banque Audi 9.375 2001 1,000,000(d) 1,045,000
First Nationwide
Sr Sub Nts 10.625 2003 3,970,000 4,406,700
Firststar Capital 8.32 2026 3,000,000(d) 3,059,550
Mellon Capital 7.72 2026 1,800,000 1,748,718
Morgan (JP)
Medium-term Nts 4.00 2012 5,000,000 4,994,000
Norwest
Sr Nts 6.375 2002 5,800,000(d) 5,732,314
Riggs Natl
Sub Nts 8.50 2006 4,900,000 5,089,875
Union Planter 8.20 2026 5,000,000(d) 4,982,400
Total 34,648,815
Building materials & construction (0.2%)
AAF McQuay
Sr Nts 8.875 2003 3,000,000 3,030,000
Owens Corning Fiberglass 9.375 2012 1,500,000 1,661,145
Schuller Intl Group 10.875 2004 1,750,000 1,951,250
Southdown 10.00 2006 1,400,000(d) 1,491,000
Total 8,133,395
Communications equipment & services (0.2%)
Celcaribe
Zero Coupon Cv 10.31 1998 1,450,000(d,h) 1,856,000
Comcast Cellular
Zero Coupon with attached put 9.53 2000 2,000,000(f) 1,467,500
Geotek Telecommunications
Cv 12.00 2001 1,850,000(m) 1,803,750
GST Telecommunications
Zero Coupon Cv 5.25 2000 550,000(d,h) 429,000
Shared Technologies
Zero Coupon 12.25 1999 3,500,000(d,h) 2,983,750
Total 8,540,000
Computers & office equipment (0.5%)
Anacomp
Pay-in-kind 13.00 2002 2,149,500(k) 2,251,601
Softkey
Cv 5.50 2000 23,000,000(d) 18,055,000
Total 20,306,601
Energy (0.3%)
Forcenergy
Sr Sub Nts 9.50 2006 1,000,000 1,055,000
Honam Oil 7.125 2005 5,750,000(d) 5,592,738
Parker & Parsley 8.25 2007 4,200,000 4,400,214
UNC
Sr Nts 9.125% 2003 2,300,000 2,357,500
Total 13,405,452
Energy equipment & services (0.1%)
Foster Wheeler 6.75 2005 6,100,000 5,885,890
Financial services (0.9%)
Associates Corp NA 6.375 2002 10,000,000 9,844,500
AVCO Financial 7.25 1999 4,750,000 4,841,818
Corporate Property Investors 7.18 2013 2,200,000(d) 2,090,594
DVI
Sr Nts 9.875 2004 3,000,000 3,105,000
GPA Delaware 8.75 1998 1,000,000 1,017,500
Homeside 11.25 2003 2,500,000(d) 2,862,500
KFW Intl Finance 8.00 2010 4,000,000 4,343,400
Olympic Financial 13.00 2000 2,000,000 2,282,500
Salomon Brothers 6.75 2006 4,000,000 3,775,760
Total 34,163,572
Furniture & appliances (0.2%)
Interface 9.50 2005 3,500,000(d) 3,648,750
Life Style Furniture 10.875 2006 3,150,000(d) 3,484,687
Total 7,133,437
Health care (--%)
IMED 9.75 2006 1,600,000(d) 1,650,000
Health care services (0.7%)
Columbia/HCA Healthcare 7.69 2025 3,600,000 3,611,772
Foundation Health
Sr Nts 7.75 2003 6,600,000 6,805,392
Magellan Health
Sr Sub Nts Cl A 11.25 2004 2,000,000(d) 2,232,500
Manor Care 7.50 2006 6,000,000 6,086,880
Merit Behavioral 11.50 2005 1,300,000(d) 1,425,125
Owens & Minor 10.875 2006 1,200,000 1,320,000
Paracelsus Healthcare
Sr Sub Nts 10.00 2006 2,000,000(d) 1,965,000
Tenet Healthcare
Sr Nts 8.625 2003 2,500,000 2,625,000
Sr Sub Nts 10.125 2005 2,000,000 2,207,500
Total 28,279,169
Household products (--%)
Sweetheart Cup
Sr Sub Nts 9.625 2000 2,000,000 2,065,000
Industrial equipment & services (0.2%)
AGCO 8.50 2006 2,200,000(d) 2,290,750
Case 7.25 2005 5,000,000 4,980,900
Total 7,271,650
Insurance (1.1%)
American United Life 7.75 2026 2,500,000(m) 2,360,075
Americo Life 9.25 2005 1,600,000 1,594,000
Arkwright 9.625 2026 3,000,000(d) 3,337,800
Conseco Financing 8.70 2026 3,800,000 3,970,278
Leucadoa Natil
Sr Sub Nts 7.875 2006 5,000,000 4,971,150
Met Life 7.80 2025 6,900,000(d) 6,782,562
MN Mutual Surplus 8.25 2025 2,700,000(d) 2,838,078
Nationwide Mutual
Credit Sensitive Nts 9.875 2025 5,900,000(d) 9,888,480
New England Mutual
Credit Sensitive Nts 7.875 2024 2,000,000(d) 1,983,280
Principal Mutual 8.00 2044 2,500,000(d) 2,475,800
SunAmerica
Medium term Nts 7.34 2005 5,000,000 5,018,650
Total 45,220,153
Leisure time & entertainment (0.1%)
Plitt Theatres 10.875 2004 3,000,000 3,090,000
Trump Atlantic City Associates 11.25 2006 2,250,000 2,176,875
Total 5,266,875
Media (1.4%)
Cablevision Systems 9.25 2005 3,000,000 3,007,500
Cox Communications 7.25 2015 5,000,000 4,768,600
7.625 2025 5,000,000 4,883,100
CS Wireless Systems 11.38 2006 2,000,000(d) 760,000
Lamar Advertising 9.625 2006 1,100,000 1,155,000
MDC Communications
Sr Sub Nts 10.50 2006 1,350,000 1,417,500
News American Holdings 7.50 2000 4,000,000 4,082,080
7.75 2045 10,000,000 9,517,200
Outdoor Systems
Sr Sub Nts 9.375 2006 2,500,000 2,600,000
Tele-Communications 8.75 2023 3,500,000 3,365,005
Time Warner 8.375 2033 5,000,000(d) 5,053,500
9.15 2023 5,000,000 5,506,300
United Artist Theatre 9.30 2015 1,966,293(d) 1,821,279
Universal Outdoor
Sr Sub Nts 9.75 2006 2,500,000(d) 2,631,250
Viacom Intl 7.00 2003 2,000,000 1,884,020
8.00 2006 4,000,000 3,960,000
Total 56,412,334
Metals (0.1%)
Ryerson Tull 8.50 2001 4,000,000 4,150,000
Multi-industry conglomerates (0.2%)
Crane 7.25 1999 2,000,000 2,032,680
Prime Succession 10.75 2004 1,275,000(d) 1,412,062
USI American Hldgs
Sr Nts 7.25 2006 4,000,000(d) 3,887,880
Total 7,332,622
Paper & packaging (0.2%)
Crown Paper 11.00 2005 2,000,000(g) 1,950,000
Gaylord 12.75 2005 2,150,000 2,386,500
Pope & Talbot 8.375 2013 3,800,000 3,354,944
Riverwood Intl
Sr Nts 10.25 2006 2,000,000(g) 1,925,000
Total 9,616,444
Retail (0.3%)
Bruno's
Sr Sub Nts 10.50 2005 250,000 262,500
Pep Boys - Manny,
Moe & Jack 7.00 2005 4,200,000 4,137,588
Wal-Mart 7.00 2006 4,855,662(d) 4,880,863
White Rose Foods
Zero Coupon Sr Disc Nts 26.29 1998 1,000,000(f) 800,000
Total 10,080,951
Textiles & apparel (0.1%)
Dominion Textiles 9.25 2006 2,000,000 2,080,000
Polysindo Intl Finance 11.375 2006 1,825,000 1,989,250
Total 4,069,250
Utilities -- electric (1.5%)
Alabama Power 9.00 2024 2,200,000 2,401,476
Arizona Public Service
Sale Lease-backed Obligation 8.00 2015 3,600,000 3,711,024
Cal Energy
Sr Nts 9.50 2006 1,325,000(d) 1,444,250
California Energy
Sr Nts 9.875 2003 1,000,000 1,077,500
Cleveland Electric Illuminating 9.50 2005 7,000,000 7,392,840
El Paso Electric 8.90 2006 2,750,000 2,921,875
First PV Funding 10.15 2016 1,440,000 1,526,400
Jersey Central Power & Light 6.75 2025 7,200,000 6,301,152
Long Island Lighting 9.75 2021 2,500,000 2,535,100
Niagara Mohawk Power 7.75 2006 5,500,000 5,222,635
Ohio Edison 6.875 2005 1,000,000 947,550
Public Services Electric & Gas 6.75 2016 2,600,000 2,429,414
Salton Sea 7.84 2010 1,325,000(d) 1,321,515
Sithe Independent Funding 9.00 2013 1,500,000(d) 1,531,035
TU Electric 8.175 2037 5,000,000 5,014,150
Texas Utilities 5.875 1998 5,000,000 4,988,200
Virginia Electric Power 6.75 2007 5,000,000 4,862,750
Wisconsin Electric Power 6.875 2095 2,800,000 2,556,148
Total 58,185,014
Utilities -- gas (0.4%)
ARKLA 9.875 1997 5,000,000 5,020,200
Columbia Gas 7.32 2010 7,000,000 6,827,660
Transcontinental Energy 9.375 2001 5,000,000 5,470,400
Total 17,318,260
Utilities -- telephone (0.2%)
MFS Telecommunications
Zero Coupon Cv 10.58 1999 3,000,000(h) 2,677,500
Pricellular Wireless
Sr Nts 10.75 2004 2,000,000(d) 2,112,500
US West Communications 7.20 2026 5,000,000 4,681,500
Total 9,471,500
Miscellaneous (0.6%)
Adams Outdoor Advertising 10.75 2006 3,000,000(m) 3,247,500
Coty 10.25 2005 1,500,000 1,635,000
Marshall & Ilsley 7.65 2026 5,700,000(d) 5,517,600
Norcal Waste System
Sr Nts 13.00 2005 2,000,000(d) 2,250,000
Outsourcing Solutions 11.00 2006 1,125,000(d) 1,217,813
Pierce Leahy 11.125 2006 1,250,000(d) 1,390,625
TMM Transportation 10.00 2006 2,050,000 2,039,750
US Trust Capital 8.41 2027 3,000,000(d) 3,077,610
Unifi Communications 14.00 2004 2,000,000(d) 2,080,000
Total 22,455,898
Foreign (3.1%)(c)
ALFA Bank Loan Participation
(U.S. Dollar) 10.85 1997 3,000,000(j) 3,000,000
Bank of China
(U.S. Dollar) 8.25 2014 2,500,000 2,517,875
CAF
(U.S. Dollar) 7.10 2003 5,200,000 5,164,744
CEI Citicorp Hldgs
(U.S. Dollar) 8.50 2002 2,000,000(d) 1,975,000
(U.S. Dollar) 11.25 2007 2,000,000(d) 1,945,000
China Light & Power
(U.S. Dollar) 7.50 2006 7,000,000 7,091,140
Dao Heng Bank
(U.S. Dollar) 7.75 2007 3,900,000(m) 3,958,500
Govt Certificates of Israel
(U.S. Dollar) 9.25 2001 2,789,576 2,954,663
Govt of Algeria
(U.S. Dollar) 7.06 2006 2,000,000 1,635,000
Govt of Panama
(U.S. Dollar) 7.875 2002 1,000,000 1,002,940
Govt of Poland
(U.S. Dollar) Step-up Nts 3.75 2014 9,950,000(j) 8,308,250
Govt of Russia
(U.S. Dollar) 9.25 2001 2,050,000 (d) 2,029,500
Govt of Venezuela
(U.S. Dollar) 6.625 2007 1,750,000(j) 1,592,500
Grupo Televisa
Sr Nts 11.875 2006 1,250,000(d) 1,406,250
Imexsa Export Trust
(U.S. Dollar) 10.125 2003 3,000,000(d) 3,123,750
Israel Electric
(U.S. Dollar) 7.25 2006 2,700,000(d) 2,677,050
Peoples Republic of China
(U.S.Dollar) 7.375 2001 2,000,000 2,046,250
(U.S. Dollar) 9.00 2096 2,500,000 2,690,850
Perez Companc
(U.S. Dollar) 9.00 2004 1,000,000(d) 1,000,000
Petronas
(U.S. Dollar) Cv 7.75 2015 6,000,000(d) 6,178,500
Philippine Long Dist Tel
(U.S. Dollar) 7.85 2007 1,500,000(d) 1,493,850
(U.S. Dollar) 8.35 2017 1,500,000(d) 1,477,110
Quno Corp
(U.S. Dollar) 9.125 2005 2,500,000 2,650,000
Republic of Argentina
(U.S. Dollar) 7.125 2023 8,500,000 7,055,000
(U.S. Dollar) 11.375 2017 2,000,000(g) 2,125,000
Republic of Brazil
(U.S. Dollar) 8.00 2014 1,652,055 1,305,123
(U.S. Dollar) Inverse Floater 6.875 2012 500,000(j) 405,000
Ras Laffon
(U.S. Dollar) 8.29 2014 6,000,000(d) 6,346,500
Rogers Cable System
(Canadian Dollar) 7.06 2014 5,000,000 3,602,912
Rogers Cantel Mobile
(U.S. Dollar) 9.375 2008 2,800,000 2,975,000
State of Israel
(U.S. Dollar) 6.375 2005 1,850,000 1,732,173
Telekom Malaysia
(U.S. Dollar) 7.875 2025 3,000,000(d) 3,056,370
United Mexican States
(U.S. Dollar) 11.375 2016 4,750,000(g) 5,242,813
(U.S. Dollar) 11.50 2026 3,500,000(g) 3,913,000
Usinor Sacilor
(U.S. Dollar) 7.25 2006 8,000,000 7,934,320
Veritas Holdings
(U.S. Dollar) 9.625 2003 3,750,000(d) 3,881,250
Zhuhai Highway
(U.S. Dollar) 11.50 2008 5,000,000(d) 5,712,500
Total 123,205,683
Total bonds
(Cost: $1,139,429,371) $1,150,725,179
</TABLE>
Short-term securities (7.7%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
Commercial paper (7.7%)
Alabama Power
04-24-97 5.29% $12,150,000 $12,054,319
Albertson's
03-19-97 5.32 4,900,000 4,887,040
04-04-97 5.25 8,200,000 8,159,497
Associates Corp North America
04-16-97 5.34 11,400,000 11,317,546
04-23-97 5.31 8,600,000 8,533,276
BOC Group
03-24-97 5.30 2,900,000 2,890,217
BellSouth Telecommunications
04-10-97 5.33 5,800,000 5,765,844
BHP Finance
03-07-97 5.32 2,000,000 1,998,233
03-21-97 5.27 2,525,000 2,517,635
04-03-97 5.27 7,500,000 7,463,906
CAFCO
03-20-97 5.29 4,300,000 4,288,040
04-07-97 5.28 15,000,000(e)14,919,062
CIT Group Holdings
03-12-97 5.32 6,200,000 6,189,959
Campbell Soup
04-04-97 5.35 6,500,000(e) 6,467,403
Cargill Global
03-17-97 5.34 4,900,000(e) 4,888,458
Ciesco LP
03-04-97 5.32 4,200,000 4,198,149
03-18-97 5.30 8,000,000 7,980,053
Commerzbank U.S. Finance
04-21-97 5.30 7,500,000 7,444,113
Consolidated Natural Gas
03-13-97 5.26 8,000,000 7,986,000
Dean Witter, Discover & Co
03-03-97 5.32 11,900,000 11,896,496
03-31-97 5.31 2,500,000 2,489,000
First Chicago NBD
03-26-97 5.27 10,000,000 9,963,542
Fleet Funding
04-22-97 5.31 10,000,000(e) 9,923,878
Gannett
03-10-97 5.29 10,000,000 9,986,825
03-10-97 5.29 14,400,000(e)14,381,028
Gateway Fuel
04-02-97 5.27 8,900,000 8,858,467
General Electric
03-21-97 5.34 4,300,000 4,287,315
General Electric Capital
04-18-97 5.35 12,300,000 12,205,650
Merrill Lynch
03-11-97 5.32 4,500,000 4,493,375
Michigan Consolidated Gas
03-26-97 5.27 11,376,000 11,334,525
Novartis Finance
03-06-97 5.32 5,400,000(e) 5,396,032
Paccar Financial
03-27-97 5.31 8,100,000 8,069,053
Reed Elsevier
03-14-97 5.29 3,600,000(e) 3,593,149
03-24-97 5.27 6,900,000(e) 6,876,856
SBC Communications Capital
04-03-97 5.35 7,500,000(e) 7,463,494
Siemens
03-05-97 5.35 7,800,000 7,795,381
Societe Generale North America
03-07-97 5.36 3,400,000 3,396,985
05-14-97 5.36 6,600,000 6,523,412
Southwestern Bell Telephone
04-14-97 5.32 7,200,000 7,149,768
St. Paul Companies
04-01-97 5.27 8,000,000(e) 7,963,833
Toyota Motor Credit
03-07-97 5.32 6,400,000 6,394,347
04-08-97 5.32 7,000,000 6,960,913
Total short-term securities
(Cost: $307,373,489) $ 307,352,074
Total investments in securities
(Cost: $3,443,927,842)(p) $4,134,592,661
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated.
(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.
(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.
(f) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield from the date of acquisition.
(g) Security is partially or fully on loan. See Note 5 to the financial
statements.
(h) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(i) 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.
(j) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 28, 1997.
(k) Pay-in-kind securities are securities in which the issuer has the option to
make interest payments in cash or in additional securities. The securities
issued as interest usually have the same terms, including maturity date, as the
pay-in-kind securities.
(l) At Feb. 28, 1997, securities valued at $9,790,010 were held to cover open
call options written as follows:
Issuer Number of Exercise Expiration Value
contracts price date
- --------------------------------------------------------------------------------
Pfizer 200 95 Mar. 1997 35,000
Total $756,875
(m) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 28, 1997, is as follows:
Acquisition Purchase
Security date cost
- --------------------------------------------------------------------------------
Adams Outdoor Advertising
10.75% 2006 03-05-96 thru 09-17-96 $3,000,000
American United Life
7.75% 2026 02-13-96 2,500,000
Continental Air*
6.94% 2015 01-24-96 5,100,000
Dao Heng Bank*
7.75% 2007 01-16-97 3,900,000
Geoteck Telecommunications
12% Cv 2001 03-04-96 2,000,000
- --------------------------------------------------------------------------------
*Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended.
(n) Investments representing 5% or more of the outstanding voting securities of
the issuer. Transactions with companies that are or were affiliates during the
period ended Feb. 28, 1997 are as follows:
Beginning Purchase Sales Ending Dividend
Issuer cost cost cost cost income
- --------------------------------------------------------------------------------
Advanta Cl A* $-- $64,584,408 $39,163,996 $25,420,412 $ 145,750
*Issuer was not an affiliate for the entire period ended Feb. 28, 1997.
(o) Negligible market value.
(p) At Feb. 28, 1997, the cost of securities for federal income tax purposes was
approximately $3,442,311,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation..............$733,515,000
Unrealized depreciation...............(41,233,000)
- ------------------------------------------------------
Net unrealized appreciation..........$692,282,000
- ------------------------------------------------------
<PAGE>
Retirement Annuity Mutual Funds
Moneyshare Fund (Percentages represent value of
Feb. 28, 1997 (Unaudited) investments compared to total net assets)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. government agency (0.6%)
Federal Home Loan Bank
01-28-98 5.78% $2,000,000 $ 2,000,000
Total U. S. government agency
(Cost: $2,000,000) 2,000,000
Certificate of deposit (5.2%)
ABN Amro Yankee
03-18-97 5.53 1,000,000 999,960
Bank of New York
03-03-98 5.83 3,000,000 2,999,138
Canadian Imperial Bank Yankee
01-08-98 5.83 3,000,000 3,000,000
03-11-97 5.37 5,000,000 5,000,000
Societe Generale Yankee
12-16-97 5.73 3,000,000 3,000,000
12-24-97 5.49 4,000,000(c) 3,997,714
Total certificates of deposit
(Cost: $18,996,812) 18,996,812
Commercial paper (79.2%)
Automotive & related (1.7%)
Ford Motor Credit
03-05-97 5.33 6,200,000 6,196,349
Banks and savings & loans (13.1%)
ABN Amro North America Finance
05-07-97 5.33 5,000,000 4,950,401
ANZ (Delaware)
04-21-97 5.44 5,000,000 4,961,963
First Bank Minneapolis
10-24-97 5.28 3,000,000(c) 2,998,870
03-06-98 5.30 2,000,000(c) 1,999,217
First Union
06-06-97 5.95 1,000,000 1,000,000
Kredietbank North America Finance
03-12-97 5.29 2,400,000 2,396,135
04-11-97 5.28 6,700,000 6,659,940
04-21-97 5.30 5,500,000 5,459,016
National Australia Funding (Delaware)
04-25-97 5.40 4,000,000 3,967,367
04-28-97 5.34 8,900,000 8,824,004
NBD Bank Canada
03-25-97 5.27 4,600,000 4,583,900
Total 47,800,813
Broker dealers (7.2%)
Goldman Sachs Group
03-18-97 5.39 6,700,000 6,683,105
Merrill Lynch
03-04-97 5.39 3,700,000 3,698,350
03-17-97 5.40 4,000,000 3,990,489
10-16-97 5.38 2,500,000(c) 2,500,000
Morgan Stanley Group
05-14-97 5.33 5,000,000 4,945,836
05-20-97 5.34 4,500,000 4,447,200
Total 26,264,980
Commercial finance (4.0%)
Ciesco LP
03-05-97 5.33 4,700,000 4,697,227
03-07-97 5.35 4,800,000 4,795,736
04-14-97 5.33 5,000,000 4,967,672
Total 14,460,635
Consumer finance (0.3%)
Avco Financial Services
05-12-97 5.40 1,000,000 989,340
Energy (4.2%)
Chevron UK
04-17-97 5.29 5,700,000 5,660,634
Mobil Australia Finance (Delaware)
03-03-97 5.39 4,700,000(b) 4,698,608
04-30-97 5.35 5,000,000(b) 4,955,750
Total 15,314,992
Financial services (26.2%)
American General Finance
03-20-97 5.34 3,400,000 3,390,472
04-18-97 5.41 5,000,000(b) 4,964,400
Associates North America
03-31-97 5.36 6,000,000 5,973,450
04-16-97 5.34 2,400,000 2,383,777
04-22-97 5.34 5,000,000 4,961,722
04-23-97 5.31 2,500,000 2,480,604
Beneficial
03-06-97 5.33 5,600,000 5,595,870
CAFCO
04-17-97 5.39 4,600,000(b) 4,567,990
04-21-97 5.37 3,700,000(b) 3,672,114
04-25-97 5.31 7,700,000(b) 7,638,004
CIT Group Holdings
04-23-97 5.35 5,000,000 4,960,913
Commercial Credit
04-10-97 5.28 4,900,000 4,871,417
Commerzbank U.S. Finance
03-12-97 5.30 6,500,000 6,489,513
03-25-97 5.35 6,300,000 6,277,698
Deutsche Bank Financial
12-04-97 5.80 2,000,000 2,000,000
Fleet Funding
03-13-97 5.35 5,900,000(b) 5,889,537
04-01-97 5.28 3,300,000(b) 3,285,081
04-07-97 5.30 4,000,000(b) 3,978,334
04-22-97 5.31 4,000,000(b) 3,969,551
General Electric Capital
03-13-97 5.33 2,400,000 2,395,752
03-17-97 5.35 5,800,000 5,786,286
Total 95,532,485
Food (2.8%)
Cambell Soup
11-17-97 5.49 4,000,000 3,846,880
CPC Intl
06-02-97 5.33 6,500,000(b) 6,411,676
Total 10,258,556
Health care (1.7%)
Novartis Finance
04-02-97 5.32 5,500,000 5,474,089
Pfizer
03-05-97 5.36 700,000(b) 699,586
Total 6,173,675
Insurance (4.2%)
Metlife Funding
05-20-97 5.32 1,900,000 1,877,833
SAFECO Credit
03-18-97 5.42 6,000,000 5,984,842
03-24-97 5.52 1,200,000 1,195,822
03-28-97 5.37 6,500,000 6,474,016
Total 15,532,513
Media (0.8%)
Reed Elsevier
04-09-97 5.33 3,000,000(b) 2,982,775
Metals (2.3%)
BHP Finance
03-07-97 5.32 8,500,000 8,492,492
Multi-industry conglomerates (3.7%)
BOC Group
04-01-97 5.30 6,200,000 6,171,864
General Electric
03-03-97 5.32 7,200,000 7,197,880
Total 13,369,744
Utilities -- gas (3.9%)
Michigan Consolidated Gas
04-01-97 5.37 2,100,000 2,090,452
Southern California Gas
05-13-97 5.34 4,800,000(b) 4,748,608
05-22-97 5.33 7,700,000(b) 7,607,570
Total 14,446,630
Utilities -- telephone (3.1%)
Southwestern Bell Telephone
04-11-97 5.32 6,400,000 6,361,515
U S WEST Communications
04-04-97 5.33 5,000,000 4,975,020
Total 11,336,535
Total commercial paper
(Cost: $289,152,514) 289,152,514
Letters of credit (16.5%)
ABN Amro-Formosa Plastics
03-25-97 5.27 5,000,000 4,982,433
Bank of America-AES Barbers Point
03-07-97 5.46 5,000,000 4,995,500
Bank of America-Formosa Plastics
03-21-97 5.31 7,600,000 7,577,665
Bank of New York-River Fuel
04-15-97 5.34 5,000,000(b) 4,966,875
Barclays Bank-Banco de Columbia
04-28-97 5.35 3,900,000 3,866,384
Canadian Imperial Bank-Commed Fuel
04-14-97 5.34 3,000,000 2,980,420
Credit Suisse-Cemex
03-11-97 5.32 4,000,000 3,994,089
Credit Suisse-Cofco
04-18-97 5.30 4,000,000 3,971,733
Credit Suisse-Sinochem
03-17-97 5.47 3,200,000 3,192,220
Credit Suisse-Sunkyong America
05-27-97 5.29 4,000,000 3,948,863
Natl Westminster Bank-Nebraska Higher Education
03-21-97 5.28 5,000,000 4,985,333
Societe Generale-Nacional Financiera
04-29-97 5.28 2,800,000 2,775,771
Westdeutsche Landesbank-Beal Argentina
03-06-97 5.35 3,000,000 2,997,771
Westdeutsche Landesbank-
Comision Federale de Electricidad
03-10-97 5.35 5,000,000 4,993,313
Total letters of credit
(Cost: $60,228,370 60,228,370
Total investments in securities
(Cost: $370,377,696)(d) $370,377,696
(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."
This security has been determined to be liquid under guidelines established by
the board.
(c) Interest rate varies to reflect current market conditions; rate shown is the
effective rate on Feb. 28, 1997.
(d) At Feb. 28, 1997, the cost also represents the cost of securities for
federal income tax purposes.
<PAGE>
Retirement Annuity Mutual Funds
International Equity Fund (Percentages represent value of
Feb. 28, 1997 (Unaudited) investments compared to total net assets)
Issuer Shares Value(a)
Common stocks (95.5%)
Australia
Banks and savings & loans (1.0%)
Westpac Banking 3,488,000(c) $19,777,849
Metals (2.9%)
CRA 654,905(c) 9,813,757
MIM Holdings 11,282,032 15,686,278
Pasminco 11,377,382 21,209,636
WMC Limited 1,947,000(c) 12,281,606
Total 58,991,277
Paper & packaging (0.3%)
Amcor 925,000(c) 6,092,806
Austria (1.0%)
Energy (0.6%)
OMV 96,430 11,370,026
Machinery (0.4%)
Boehler-Uddeholm 107,600(d) 7,435,533
Brazil (2.0%)
Communications equipment & services (1.1%)
Telebras ADR 220,000 21,340,000
Energy (0.4%)
Petroleo Brasileiro ADR 400,000 8,050,000
Utilities -- electric (0.5%)
CEMIG ADR 250,000(c) 10,325,000
Canada (1.1%)
Aerospace & defense (0.6%)
Bombardier Cl B 600,800 11,515,383
Communications equipment & services (0.5%)
BCE Mobile 350,300(b) 11,134,667
France (8.8%)
Banks and savings & loans (2.2%)
Banque Nationale de Paris 500,000 22,695,346
Credit Commercial de France 446,000 20,909,921
Total 43,605,267
Building materials & construction (1.0%)
Lafarge Registered Fidelitie330,251 20,702,301
Energy (1.3%)
Societe Nationale Elf
Aquitaine 81,963 7,843,694
Total Petroleum Cl B 231,310 18,460,122
Total 26,303,816
Industrial equipment & services (1.2%)
Michelin 380,030 23,809,430
Leisure time & entertainment (1.2%)
Accor 178,153 24,525,365
Media (0.3%)
Groupe AB ADR 557,110(b) 7,103,152
Multi-industry conglomerates (1.1%)
Lyonnaise des Eaux Dumez 207,000 21,154,346
Utilities -- electric (0.5%)
SGS THOMSON
Microelectronics 138,520 9,108,997
Germany (6.2%)
Automotive & related (1.1%)
Daimler-Benz 304,000(c) 22,072,875
Chemicals (2.1%)
Bayer 446,010(c) 18,843,253
Hoechst 536,273(c) 22,768,031
Total 41,611,284
Communications equipment & services (0.5%)
Deutsche Telekom 574,256(c) 11,066,631
Leisure time & entertainment (0.7%)
Adidas 146,200(c) 14,000,593
Miscellaneous (1.8%)
Degussa 38,506(c) 16,439,456
SGL Carbon 141,340(d) 19,276,112
Total 35,715,568
Hong Kong (7.3%)
Banks and savings & loans (1.9%)
HSBC Holdings 1,532,800 37,410,953
Communications equipment & services (0.5%)
Hong Kong
Telecommunications 6,830,000 11,774,797
Multi-industry conglomerates (1.1%)
Hutchison Whampoa 1,449,000 11,040,070
Swire Pacific Cl A 1,200,000 10,305,151
Total 21,345,221
Real estate (3.8%)
Cheung Kong Holdings 2,791,000 26,671,229
Henderson Land 1,024,000 9,157,379
New World Development 1,920,000 11,901,287
Sun Hung Kai Properties 1,413,000 16,331,146
Wharf Holdings 2,720,000 12,083,110
Total 76,144,151
Indonesia (0.1%)
Multi-industry conglomerates
India Fund 350,000(b) 2,975,000
Italy (5.6%)
Banks and savings & loans (0.9%)
Credito Italiano 14,010,000(c) 19,132,210
Communications equipment & services (2.7%)
Stet Risp 11,760,400 41,088,921
Telecom Italia 5,256,000(c) 12,335,616
Total 53,424,537
Energy (1.9%)
Ente Nazionale
Idrocarburi 7,709,087(c) 38,031,586
Media (0.1%)
Seat Risp 8,095,500 1,871,259
Japan (15.8%)
Electronics (6.1%)
Fujitsu 1,222,000 12,054,878
Mitsumi Electric 886,000(c) 16,525,739
NEC 2,710,000 31,451,545
Shinko Electric Inds 300,000(c) 10,295,946
Sony 292,000 21,083,644
TDK 450,000 30,141,756
Total 121,553,508
Financial services (0.8%)
Yasuda Fire & Marine 3,018,000 15,061,226
Food (0.8%)
Kirin Brewery 1,919,000 16,385,393
Health care (0.5%)
Banyu Pharmaceuticals 750,000 10,942,551
Industrial equipment & services (2.6%)
DAI Nippon Printing 1,000,000 16,662,521
Mitsubishi Heavy Inds 2,300,000 16,568,846
Secom 340,000 19,166,045
Total 52,397,412
Metals (0.7%)
Nippon Steel 5,086,000 13,533,993
Real estate (0.9%)
Sumitomo Realty &
Development 2,690,000 18,887,754
Retail (0.8%)
Takashimaya 1,400,000 15,435,629
Transportation (0.4%)
Nippon Express 1,340,000 8,631,185
Wire & cable (1.6%)
Denso 959,000 18,443,836
Sumitomo Electric Inds 1,025,000(c) 14,190,085
Total 32,633,921
Miscellaneous (0.6%)
Mitsubishi Material 2,977,000 11,056,087
Korea (0.2%)
Electronics
Samsung Electronics 52,400 4,300,257
Malaysia (3.9%)
Automotive & related (0.3%)
Perushaan Otomobil
Nasional 729,000 4,814,982
Banks and savings & loans (1.7%)
Malayan Banking 2,871,000 34,109,745
Building materials & construction (0.5%)
United Engineers 1,135,000 10,467,780
Multi-industry conglomerates (0.5%)
Sime Darby 2,818,000 10,668,224
Utilities -- electric (0.9%)
Tenega Nasional 3,825,000 18,331,653
Mexico (2.2%)
Building materials & construction (0.9%)
Cemex ADR Series B 2,038,000(c) 17,896,187
Media (0.4%)
Grupo Televisa ADR 375,000(b,c) 9,187,500
Miscellaneous (0.9%)
Grupo Industrial 3,051,000 17,309,543
Netherlands (5.6%)
Chemicals (1.3%)
Akzo Nobel 183,860 26,495,448
Financial services (1.1%)
Ing Groep 567,637 21,982,886
Furniture & appliances (2.2%)
Philips Electronics 981,910(c) 44,338,314
Textiles & apparel (1.0%)
Gucci 289,944(b) 18,897,767
New Zealand (0.3%)
Paper & packaging
Carter Holt Harvey 2,736,100 6,199,226
Peru (0.4%)
Communications equipment & services
Telefonica Del Peru ADR 350,000 7,700,000
Phillipines (1.0%)
Electronics (0.3%)
Manila Electric 620,000 4,921,102
Financial services (0.3%)
Philippine Commercial
Intl Bank 441,000 6,406,110
Utilities -- telephone (0.4%)
Philippines Long Distance
Telephone ADR 131,900(c) 7,650,200
Portugal (.03%)
Building materials & construction
Cimpor-Cimentos de
Portugal ADR 117,000 5,105,855
Banks and savings & loan (1.9%)
Overseas Union Bank 2,470,000 19,233,250
United Overseas Bank 1,685,000 19,149,070
Total 38,382,320
Beverages & tobacco (0.5%)
Fraser & Neave 1,099,000 9,868,256
Real estate (2.7%)
City Developments 2,145,000 21,216,766
DBS Land 3,967,000 15,444,999
Straights Steamship 5,420,000 18,478,569
Total 55,140,334
Transportation (1.1%)
Keppel 1,647,000 11,900,454
Singapore Airlines 1,063,000 9,395,860
Total 21,296,314
Spain (1.4%)
Communications equipment & services (1.0%)
Telefonica 847,087(c) 19,501,113
Energy (0.4%)
Repsol 231,090 8,786,079
Sweden (3.4%)
Industrial equipment & services
ABB AB Class B Shares 150,000(b,c)16,790,186
Ericsson (LM) B Free 825,000 26,250,925
Total 43,041,111
Switzerland (3.4%)
Financial services (1.0%)
Credit Suisse Group 188,892(c) 20,150,103
Health care (2.4%)
Novartis 28,270(c) 32,333,777
Roche Holdings 1,722 14,502,836
Total 46,836,613
Taiwan (0.4%)
Multi-industry conglomerates
Taiwan Fund 322,800(c) 8,070,000
Thailand (0.4%)
Communications equipment & services (0.2%)
Advanced Info Service 459,000 4,431,357
Financial services (0.2%)
Industrial Finance
of Thailand 1,234,100 3,264,562
United Kingdom (15.5%)
Banks and savings & loans (2.0%)
HSBC Holdings 706,200 18,196,465
Lloyds TSB 2,657,010 22,005,790
Total 40,202,255
Building materials & construction (1.0%)
Redland 3,348,000 19,085,622
Electronics (0.6%)
Premier Farnell 1,538,210 12,439,064
Energy (1.1%)
Shell Transport & Trading 1,282,761 21,780,841
Food (1.1%)
Unilever 833,670 21,406,270
Furniture & appliances (0.5%)
Emi Group 557,880 10,485,748
Health care (2.2%)
Glaxo Wellcome 2,443,866 41,396,495
Smith & Nephew 762,950 2,392,102
Total 43,788,597
Leisure time & entertainment (1.2%)
Granada Group 1,595,290 23,612,224
Machinery (1.3%)
Siebe1,667,882 26,336,979
Multi-industry conglomerates (0.6%)
Framlington Maghreb
Fund Units 50,000(b) 2,725,000
Johnson Matthey 921,950 8,093,734
Total 10,818,734
Paper & packaging (0.2%)
Smurfit Group 1,724,727 4,354,165
Retail (2.1%)
Great Universal Stores 2,527,770 26,905,184
Kingfisher 1,375,920 15,171,715
Total 42,076,899
Transportation (0.8%)
NFC 5,774,420 16,223,712
Utilities -- electric (0.8%)
BG 6,004,150 16,673,573
Total common stocks
(Cost: $1,683,882,057) $1,910,276,163
Preferred stocks & other (1.7%)
BNP
Warrants 347,900 $ 3,978,094
Euro Paper
Warrants 159,488 1,915,047
Henkel KGaA 410,940(c) 21,930,446
Keppel
Warrants 1,292,000 4,151,076
Novartis
Rights 28,270 1,790,248
Total preferred stock & other
(Cost: $25,763,788) $33,764,911
Short-term securities (23.6%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
Certificate of deposit (0.3%)
Morgan Guaranty
04-28-97 5.40 6,100,000 $ 6,045,146
Commercial paper (22.5%)
Aluminum Co of America
03-06-97 5.32 10,000,000 9,992,653
Associates Corp North America
04-07-97 5.32 4,800,000 4,773,952
Avco Financial Services
03-27-97 5.35 10,000,000 9,957,670
04-01-97 5.35 3,300,000 3,283,664
Bell Atlantic
03-18-97 5.27 13,500,000 13,466,531
BellSouth Capital Funding
03-25-97 5.34 4,500,000 4,483,136
BOC Group
03-17-97 5.30 3,000,000 2,992,960
03-24-97 5.29 3,600,000 3,587,879
CAFCO
03-20-97 5.35% 1,800,000 1,794,956
Campbell Soup
11-17-97 5.49 10,200,000(e) 9,784,293
Cargill
03-05-97 5.36 8,000,000 7,994,896
03-06-97 5.36 7,000,000 6,994,520
03-10-94 5.34 5,000,000 4,993,265
Cargill Global
03-17-97 5.34 5,900,000(e) 5,886,102
Chevron UK
04-17-97 5.29 6,900,000 6,849,061
Commerzbank U.S. Finance
03-19-97 5.27 15,000,000 14,960,625
Consolidated Natural Gas
04-29-97 5.29 6,000,000 5,944,615
Dean Witter Discover & Co
03-19-97 5.30 9,000,000 8,976,240
04-15-97 5.38 9,400,000 9,331,862
Deutsche Bank Financial
04-10-97 5.28 5,100,000 5,070,250
First Chicago NBD
04-14-97 5.34 12,000,000 11,919,325
Ford Motor Credit
03-11-97 5.33 8,000,000 7,988,222
04-09-97 5.28 10,000,000 9,943,125
Gannett
03-11-97 5.29 10,000,000(e) 9,985,361
03-20-97 5.27 8,500,000(e) 8,476,448
Glaxo Wellcome
05-12-97 5.30 7,000,000(e) 6,919,517
Goldman Sachs Group
05-05-97 5.36 7,600,000 7,522,391
Kredietbank North America Finance
03-12-97 5.29 9,500,000 9,484,702
04-18-97 5.30 8,000,000 7,943,893
Merrill Lynch
03-03-97 5.27 1,300,000 1,299,619
03-03-97 5.34 4,000,000 3,998,820
Metlife Funding
03-24-97 5.44 7,800,000 6,974,350
05-20-97 5.32 7,800,000 7,702,247
Mobil Australia Finance (Delaware)
03-14-97 5.33 6,500,000(e) 6,487,560
04-02-97 5.37 8,088,000(e) 8,046,533
08-22-97 5.33 5,000,000(e) 4,863,889
Morgan Stanley Group
04-18-97 5.41 5,000,000 4,961,647
Natl Australia Funding (Delaware)
03-07-97 5.34 9,600,000 9,591,520
05-15-97 5.37 7,800,000 7,708,281
Northern States Power
03-10-97 5.41 7,400,000 7,388,463
03-25-97 5.46 8,000,000 7,968,949
Novartis Finance
03-03-97 5.31% 1,900,000 1,899,441
03-17-97 5.28 2,500,000 2,494,156
03-21-97 5.26 9,000,000 8,973,750
Paccar Financial
03-27-97 5.32 10,800,000 10,758,660
Pfizer
03-03-97 5.30 20,000,000(e)19,994,144
03-12-94 5.37 8,300,000(e) 8,284,072
Reed Elsevier
03-18-97 5.37 3,200,000(e) 3,190,941
04-16-97 5.40 10,100,000(e)10,026,795
SAFECO Credit
03-04-97 5.52 5,700,000 5,679,113
05-01-97 5.38 11,300,000 11,191,602
SBC Communications Capital
04-03-97 5.35 11,500,000(e)11,444,024
Siemens
05-19-97 5.34 11,000,000 10,863,844
Societe Generale North America
06-14-97 5.36 5,400,000 5,337,337
Transamerica Finance
03-04-975 5.37 8,100,000 8,095,095
03-27-97 5.47 5,300,000 5,276,931
USAA Capital
05-01-97 5.31 7,000,000 6,932,851
05-09-97 5.32 10,000,000 9,891,694
U S WEST Communications
03-26-97 5.36 6,500,000 6,475,986
04-04-97 5.33 5,000,000 4,975,019
Total 450,079,447
Letters of credit (0.8%)
Bank of America-
AES Barbers Point
03-13-97 5.32 4,500,000 4,492,050
Bank of America-
Formosa Plastics
03-06-97 5.32 3,100,000 3,097,718
Credit Agricole-
Louis Dreyfus
04-16-97 5.28 9,000,000 8,933,708
Total 16,523,476
Total short-term securities
(Cost: $472,844,568) $ 472,648,069
Total investments in securities
(Cost: $2,182,490,413)(f) $2,416,689,143
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Security is partially or fully on loan. See Note 5 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.
(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.
(f) At Feb. 28, 1997, the cost of securities for federal income tax purposes was
approximately $2,182,490,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation....................$279,474,000
Unrealized depreciation.....................(45,275,000)
- ------------------------------------------------------------
Net unrealized appreciation................$234,199,000
- ------------------------------------------------------------
<PAGE>
Retirement Annuity Mutual Funds
Aggressive Growth Fund (Percentages represent value of
Feb. 28, 1997 (Unaudited) investments compared to net assets)
Investments in securities of unaffiliated issuers
Common stocks (82.0%)
Issuer Shares Value(a)
Automotive & related (0.3%)
Miller Inds 443,700(b) 5,657,175
Banks and savings & loans (4.9%)
Bank of Boston 240,000 18,090,000
Bank of New York 200,000 7,750,000
Barnett Banks 340,000 15,725,000
Charter One Financial 281,000 13,382,625
Magna Group 360,000 11,475,000
MBNA 400,000 12,800,000
SouthTrust 325,000 12,878,125
Washington Mutual 226,950 11,999,981
Total 104,100,731
Building materials & construction (1.5%)
Tyco Intl 528,000 31,152,000
Chemicals (2.5%)
Betz Laboratories 56,100 3,639,487
Crompton & Knowles 440,000 8,360,000
Praxair 275,000 13,371,875
Republic Inds 311,000(b) 11,040,500
Sigma-Aldrich 173,000 5,298,125
USA Waste Service 300,000(b) 10,800,000
Total 52,509,987
Communications equipment & services (1.6%)
Andrew 87,500(b) 4,812,500
Mastec 192,000(b) 10,080,000
PairGain Technologies 156,000(b) 4,611,750
Tellabs 340,000(b) 13,557,500
Total 33,061,750
Computers & office equipment (10.7%)
American Power Conversion 328,700(b) 6,861,612
Billing Information Concepts275,000(b) 7,356,250
BMC Software 319,000 13,657,188
BTG 325,000(b) 6,500,000
Cadence Design Systems 274,000(b) 10,103,750
Cisco Systems 525,000(b) 29,203,125
Computer Task Group 335,000 14,363,125
Electronic Arts 320,000(b) 10,000,000
Equifax 425,000 12,643,750
Fiserv 176,000(b) 5,764,000
HMT Technology 258,000(b) 4,934,250
Hutchinson Technology 60,000(b) 1,927,500
Ikon Office Solutions 252,000 10,395,000
Imnet Systems 230,000(b) 5,606,250
McAfee Associates 200,000(b) 9,175,000
Parametric Technology 430,000(b) 24,241,250
Pegasystems 43,400(b) 1,117,550
Reynolds & Reynolds Cl A 385,000 10,780,000
Sanmina 200,000(b) 9,250,000
Silicon Graphics 556,300(b) 13,420,738
Solectron 200,000(b) 10,575,000
Structural Dynamics Research514,000(b) 10,215,750
Template Software 80,000(b) 1,090,000
Total 229,181,088
Electronics (6.0%)
ANADIGICS 130,000(b) 3,347,500
ESS Technology 350,000(b) 9,209,375
Etec Systems 70,800(b) 2,566,500
FSI Intl 822,000(b) 12,227,250
Kent Electronics 234,000(b) 6,435,000
KLA Instruments 311,000(b) 12,964,813
Lattice Semiconductor 129,000(b) 6,159,750
LSI Logic 394,000(b) 13,593,000
Maxim Intergrated Products 209,000(b) 10,371,625
Micron Technology 143,000 5,362,500
Oak Technology 480,000(b) 6,480,000
Speedfam Intl 105,000(b) 3,911,250
Tencor Instruments 186,000(b) 7,451,625
Transcrypt Intl 220,000(b) 1,952,500
Vitesse Semiconductor 325,000(b) 13,629,688
Xilinx2 53,000(b) 11,416,625
Total 127,079,001
Energy (1.2%)
Forcenergy 127,300(b) 3,309,800
Noble Affiliates 143,400 5,592,600
Pogo Producing 73,100 2,512,813
Tosco 492,750 13,735,406
Total 25,150,619
Energy equipment & services (2.0%)
Cooper Cameron 190,000(b) 12,445,000
Edge Petroleum 65,000(b) 1,129,375
Global Inds 298,200(b) 5,442,150
Global Marine 670,000(b) 12,478,750
Lone Star Technologies 545,000(b) 8,583,750
Patterson Energy 55,000(b) 1,265,000
Rowan Companies 52,250 1,038,469
Total 42,382,494
Financial services (4.0%)
Edwards (AG) 440,000 15,620,000
Franklin Resources 278,000 16,263,000
Household Intl 110,000 10,656,250
Mego Mortgage 350,000(b) 5,118,750
RAC Financial Group 420,000(b) 13,702,500
Schwab (Charles) 440,000 16,500,000
Winthrop Resources 260,000 8,450,000
Total 86,310,500
Food (1.7%)
Delta & Pine Land 325,000 12,065,625
JP Foodservice 450,000(b) 12,768,750
Tyson Foods 525,000 10,631,250
Total 35,465,625
Furniture & appliances (1.5%)
Leggett & Platt 370,000 13,273,750
Miller (Herman) 300,000 19,725,000
Total 32,998,750
Health care (8.3%)
Acuson 500,000(b) 13,875,000
ALZA 450,000(b) 12,768,750
Bio-Technology General 336,000(b) 5,460,000
Biogen 360,000(b) 17,730,000
Biosite Diagnostics 100,000(b) 1,212,500
Boston Scientific 220,000(b) 14,575,000
Centocor 270,000(b) 10,226,250
Cephalon 321,000(b) 7,583,625
DENTSPLY Intl 273,000 14,264,250
DepoTech 428,000(b) 7,597,000
Guidant 96,000 6,432,000
Human Genome Sciences 130,000(b) 4,940,000
IDEXX Laboratories 204,000(b) 7,599,000
ILEX Oncology 57,300(b) 737,738
Scherer (RP) 172,400(b) 9,956,100
Sepracor 406,000(b) 9,794,750
U. S. Surgical 385,000 16,410,625
Watson Pharmaceuticals 385,000(b) 16,795,625
Total 177,958,213
Health care services (9.1%)
Beverly Enterprises 794,000(b) 11,413,750
Cardinal Health 240,000 14,760,000
Foundation Health 330,000(b) 12,457,500
FPA Medical Management 500,000(b) 12,875,000
Genesis Health Ventures 132,900 4,601,662
HBO & Co 900,000 51,862,500
Health Mgmt Associates 564,000(b) 14,946,000
HEALTHSOUTH 131,000(b) 5,272,750
Integrated Health Services 235,200 6,997,200
Medical Resources 536,000(b) 5,393,500
Mid Atlantic Medical Services462,000(b) 6,814,500
NABI 525,000(b) 5,053,125
NovaCare 800,000(b) 10,000,000
PhyCor 347,000(b) 10,540,125
Quorum Health Group 166,000(b) 5,208,250
Tenet Healthcare 581,000(b) 15,759,625
Total 193,955,487
Household products (1.4%)
Estee Lauder 89,600 4,166,400
Newell 367,000 13,624,875
Samsonite 250,000(b) 11,875,000
Total 29,666,275
Industrial equipment & services (2.1%)
DT Inds 284,000 8,378,000
Harnischfeger Inds 300,000 13,162,500
Integrated Process Equipment181,800(b) 4,590,450
Prime Service 252,100(b) 5,955,863
United Waste Systems 350,000(b) 12,600,000
Total 44,686,813
Insurance (2.3%)
Equitable of Iowa 19,800 1,051,875
Everest Reinsurance Holdings250,000 7,875,000
Providian 153,500 8,576,812
SunAmerica 464,000 21,286,000
UNUM 145,000 11,146,875
Total 49,936,562
Leisure time & entertainment (0.3%)
Brunswick 127,050 3,636,806
WMS Inds 130,000(b) 2,583,750
Total 6,220,556
Media (1.0%)
American Radio Systems 334,000 11,189,000
Outdoor Systems 372,900(b) 11,187,000
Total 22,376,000
Multi-industry conglomerates (1.7%)
Apollo Group 330,000(b) 8,910,000
Employee Solutions 666,000(b) 15,900,750
Lancaster Colony 250,000 11,437,500
Total 36,248,250
Paper & packaging (0.8%)
Sealed Air 330,000(b) 13,571,250
Silgan Holdings 165,000(b) 4,207,500
Total 17,778,750
Restaurants & lodging (0.7%)
CapStar Hotel 560,000(b) 13,440,000
CKE Restaurants 113,400 2,197,124
Total 15,637,124
Retail (8.3%)
CarMax Group 69,000(b) 1,388,625
Costco Companies 635,000(b) 16,271,875
CVS 275,000 12,718,750
Dollar General 728,500 20,671,187
Dominick's Supermarkets 531,000(b) 9,823,500
Family Dollar Stores 655,000 15,474,375
Hollywood Entertainment 104,400(b) 2,505,600
Kohl's 247,000(b) 11,362,000
Maxim Group 315,000(b) 4,882,500
Rexall Sundown 280,000(b) 7,315,000
Rite Aid 350,000 14,743,750
Safeway 396,000(b) 19,057,500
U.S. Office Products 340,000(b) 10,880,000
Vons Companies 220,000(b) 14,987,500
Walgreen 363,000 15,518,250
Total 177,600,412
Textiles & apparel (1.5%)
Burlington Coat
Factory Warehouse 419,000(b) 6,285,000
Fruit of the Loom 495,000 20,233,125
Stage Stores 300,000(b) 6,375,000
Total 32,893,125
Transportation (0.7%)
Coach USA 250,000(b) 8,000,000
Hvide Marine 336,000(b) 6,972,000
Total 14,972,000
Utilities -- telephone (0.4%)
Brooks Fiber Properties 21,800(b) 463,250
Tel-Save Holdings 480,000(b) 8,580,000
Total 9,043,250
Miscellaneous (0.5%)
American Oilfield Divers 225,000(b) 2,587,500
General Cigar Holdings 34,300(b) 617,400
Judge Group 560,000(b) 3,710,000
U.S. Rentals 150,000(b) 2,850,000
Total 9,764,900
Foreign (5.0%) (h)
ACE 175,000 11,375,000
Amer Group 419,000(b) 8,749,217
ASM Lithography Holding 200,000(b) 13,300,000
Baan 305,000(b,f)13,534,375
Belle 21,075,000(b) 6,723,115
BioChem Pharma 210,000(b) 11,130,000
Euro-Nevada Mining 185,900 6,092,629
Mid Ocean 307,000(b) 15,196,500
Multicanal Participacoes
ADR 80,000(b) 1,020,000
Steiner Leisure 425,000(b) 9,987,500
Swire Pacific 1,089,000(b) 9,351,925
Total 106,460,261
Total common stocks
(Cost: $1,511,411,288) $1,750,247,698
Preferred stock (0.1%)
Energy Biosystems
8% Cv 35,000(c) $1,588,790
Total preferred stock
(Cost: $1,418,377) $1,588,790
<TABLE>
<CAPTION>
Bonds (1.1%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
<S> <C> <C> <C> <C>
HMT Technology
Cv Sub Nts 5.75% 2004 $2,700,000(c) $ 2,851,875
Cirrus Logic
Cv Sub Nts 6.00 2003 5,000,000(c) 4,293,750
Park Electrochemical
Cv Sub Nts 5.50 2006 4,500,000 4,095,000
Richy Electronics
Cv Sub Nts 7.00 2006 3,000,000(g) 3,270,000
Thermo Electron
Cv 4.25 2003 7,500,000(c) 8,175,000
Total bonds
(Cost: $22,725,646) $22,685,625
</TABLE>
Short-term securities (13.3%)
Commercial paper (13.0%)
ABB Treasury Center USA
03-27-97 5.27% $ 600,000(d)$ 597,725
Abbott Laboratories
03-25-97 5.26 12,000,000 11,958,080
Albertson's
04-04-97 5.25 3,000,000 2,985,182
04-11-97 5.33 7,500,000 7,454,729
American General Finance
03-19-97 5.43 9,000,000 8,975,112
04-16-97 5.28 6,700,000 6,655,054
Ameritech Capital Funding
04-14-97 5.37 4,100,000(d) 4,071,461
Associates Corp North America
04-23-97 5.31 6,900,000 6,846,466
BHP Finance
03-07-97 5.32 5,300,000 5,295,318
BOC Group
03-24-97 5.29 3,900,000 3,886,869
CAFCO
03-20-97 5.35 1,900,000 1,894,675
Cargill
03-06-97 5.36 8,000,000 7,993,738
03-10-97 5.34 6,700,000 6,690,975
04-21-97 5.28 9,700,000 9,626,793
Ciesco LP
03-07-97 5.35 1,100,000 1,099,023
Commercial Credit
04-07-97 5.31 6,400,000 6,365,269
04-08-97 5.31 10,000,000 9,944,372
Commerzbank U.S. Finance
03-26-97 5.27 6,500,000 6,476,302
CPC Intl
03-11-97 5.35 1,900,000(d) 1,897,043
Fleet Funding
03-10-97 5.35 5,100,000(d) 5,093,217
03-13-97 5.35 2,800,000(d) 2,795,035
General Electric Capital Services
04-18-97 5.34 7,500,000 7,442,470
Household Finance
03-11-97 5.34 5,500,000 5,491,887
Kellogg
04-03-97 5.28 6,178,000 6,148,268
04-09-97 5.28 4,500,000 4,474,406
Metlife Funding
03-24-97 5.44 5,400,000 5,380,213
Mobil Australia Finance (Delaware)
03-17-97 5.41 10,500,000(d)10,471,798
Northern States Power
03-10-97 5.41 6,000,000 5,990,646
Novartis Finance
03-19-97 5.27 9,000,000 8,976,375
Paccar Financial
03-19-97 5.44 6,000,000 5,982,349
03-27-97 5.32 4,900,000 4,881,244
04-02-97 5.32 4,700,000 4,677,858
Rabobank USA Finance
04-17-97 5.44 10,000,000 9,926,079
Reed Elsevier
03-18-97 5.37 4,600,000(d) 4,586,977
SBC Communications Capital
03-27-97 5.32 2,100,000(d) 2,091,962
Siemens
03-05-97 5.35 2,700,000 2,698,401
Societe Generale North America
05-14-97 5.33 6,500,000 6,405,073
St. Paul Companies
03-14-97 5.31 6,500,000(d) 6,487,583
Toyota Motor Credit
03-24-97 5.31 7,200,000 7,175,620
Transamerica Finance
03-04-97 5.37 1,900,000 1,898,850
03-20-97 5.38 12,700,000 12,660,317
03-21-97 5.38 7,400,000 7,375,321
03-21-97 5.39 10,185,000 10,151,032
UBS Finance (Delaware)
03-14-97 5.27 3,400,000 3,393,554
U S WEST Communications
03-13-97 5.36 3,900,000 3,893,071
USAA Capital
03-10-97 5.37 10,900,000 10,881,828
Total 278,145,620
Letter of credit (0.3%)
Bank of America -
Formosa Plastics
03-18-97 5.42 5,400,000 5,385,106
Total short-term securities
(Cost: $283,593,928) $ 283,530,726
Total investments in securities of unaffiliated issuers
(Cost: $1,819,149,239) $2,058,052,839
Investments in securities of affiliated issuer (e)
Issuer Shares Value(a)
Emisphere Technologies 550,000(b) $ 12,237,500
Total investments in securities of affiliated issuer
(Cost: $9,453,520) $ 12,237,500
Total investments in securities
(Cost: $1,828,602,759)(i) $2,070,290,339
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Represents securities sold under Rule 144A, which are 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.
(d) Commercial paper sold within terms of a private placement memorandum, except
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.
(e) Investments representing 5% or more of the outstanding voting securities of
the issuer. Transactions with companies that are or were affiliates during the
year ended Feb. 28, 1997 are as follows:
Beginning Purchase Sales Ending Dividend
Issuer cost cost cost cost income
- --------------------------------------------------------------------------------
Emisphere Technologies* $ -- $9,453,520 $ -- $9,453,520 $--
Heftel Broadcasting* 12,266,622 -- 12,266,622 -- --
- --------------------------------------------------------------------------------
Total $12,266,622 $9,453,520 $12,266,622 $9,453,520 $--
- --------------------------------------------------------------------------------
*Issuer was not an affiliate for the entire fiscal year.
(f) Security is partially or fully in loan. See Note 6 to the financial
statement.
(g) Identifies issuers considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 28, 1997 is as follows:
Acquisition Purchase
Security date cost
- --------------------------------------------------------------------------------
Richy Electronics* 02-21-96 $3,000,000
*Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended.
(h) Foreign securities values are stated in U.S. dollars.
(i) At Feb. 28, 1997, the cost of securities for federal income tax purposes was
approximately $1,828,603,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.................$286,622,000
Unrealized depreciation..................(44,935,000)
- -----------------------------------------------------------
Net unrealized appreciation.............$241,687,000
- -----------------------------------------------------------
<PAGE>
Retirement Annuity Mutual Funds
Feb. 28, 1997 (Unaudited) (Percentages represent value of
Global Yield Fund investments compared to total net assets)
<TABLE>
<CAPTION>
Bonds (80.0%) (b)
Issuer Coupon Maturity Principal Value(a)
rate year amount
<S> <C> <C> <C> <C>
Argentina (6.7%)
Argentina Republic
(Japenese Yen) 5.50 % 2001 $110,000,000 $ 911,879
(U.S. Dollar) 5.25 2023 500,000(d) 332,500
(U.S. Dollar) 6.625 2005 1,470,000(d) 1,330,350
(U.S. Dollar) 11.375 2017 1,000,000 1,062,500
Perez Companc
(U.S. Dollar) 9.00 2004 1,000,000(c) 1,000,000
Total 4,637,229
Australia (2.8%)
Govt of Australia
(Australian Dollar) 6.75 2006 1,000,000 728,068
12.00 2001 1,350,000 1,247,561
Total 1,975,629
Brazil (1.2%)
Republic of Brazil
(U.S. Dollar) 6.56 2012 1,000,000(d) 810,000
Canada (2.8%)
Govt of Canada
(Canadian Dollar) 8.00 2023 2,200,000 1,791,216
(Canadian Dollar) 10.50 2001 160,000 138,623
Total 1,929,839
Denmark (1.9%)
Govt of Denmark
(Danish Krone) 8.00 2003 7,700,000 1,344,798
France (1.3%)
Govt of France
(European Currency Unit) 7.50 2005 400,000 512,242
(French Franc) 1.28 2006 2,000,000(d) 381,146
Total 893,388
Germany (8.5%)
Federal Republic of Germany
(Deutsche Mark) 6.00 2016 3,800,000 2,228,017
(Deutsche Mark) 7.50 2004 5,430,000 3,670,551
Total 5,898,568
Hong Kong (1.0%)
Dao Heng Bank
(U.S. Dollar) Sub Nts 7.75 2007 750,000(e) 761,250
Israel (1.4%)
Israel Electric
(U.S. Dollar) Sr Nts 7.875 2026 1,000,000(c) 998,600
Italy (5.6%)
Govt of Italy
(Italian Lira) 7.75 2001 2,450,000,000 1,491,805
(Italian Lira) 8.50 2004 3,820,000,000 2,382,458
Total 3,874,263
Japan (0.4%)
Japan Development Bank
(Japanese Yen) 5.00 1999 30,000,000 274,963
BNCE
(U.S. Dollar) 7.25 2004 600,000 556,500
United Mexican States
(Japanese Yen) 5.00 1998 30,000,000 256,926
(U.S. Dollar) 9.875 2007 1,000,000 1,047,500
(U.S. Dollar) 11.50 2026 2,050,000 2,291,900
Total 4,152,826
Philippines (1.7%)
Philippine Long Distance
(U.S. Dollar) 7.85 2007 1,200,000(c) 1,195,080
Spain (1.9%)
Govt of Spain
(Spanish Peseta) 8.00 2004 179,000,000 1,336,145
Supra National (1.0%)
Asian Development Bank
(Japanese Yen) 5.00 2003 69,000,000 670,666
Sweden (3.0%)
Govt of Sweden
(Swedish Krona) 8.00 2007 14,600,000 2,125,005
United Kingdom (7.5%)
United Kingdom Treasury
(British Pound) 7.75 2006 1,500,000 2,527,098
(British Pound) 8.00 2003 1,600,000 2,726,518
Total 5,253,616
United States (23.3%)
Federal Natl Mtge Assn
(U.S. Dollar) 7.50 2025 2,000,000 1,994,380
Federal Natl Mtge Assn
(U.S. Dollar) 7.50 2027 1,000,000 997,810
Firstar Capital Trust
(U.S. Dollar) 8.32 2026 1,000,000(c) 1,019,850
New York Life Insurance
(U.S. Dollar) 7.50 2023 1,000,000(c) 953,410
J.P. Morgan
(U.S. Dollar) Sr Sub Nts Series A 4.00 2012 1,000,000(d) 998,800
TU Electric Capital
(U.S. Dollar) 8.175 2037 1,000,000(d) 1,002,830
U.S. Treasury
(U.S. Dollar) 7.50 2001-16 8,725,000 9,259,777
Total 16,226,857
Venzuela (2.0%)
Govt of Venezuela
(U.S. Dollar) 6.44 2007 500,000(d) 455,000
6.625 2007 1,000,000(d) 910,000
Total 1,365,000
Total bonds
(Cost: $55,527,705) $55,723,722
</TABLE>
Short-term securities (27.5%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
Commercial paper
CAFCO
4-04-97 5.28% $2,400,000(f)$2,388,100
Cargill
3-07-97 5.26 700,000 699,388
Ciesco LP
3-04-97 5.32 1,000,000 999,559
3-24-97 5.27 800,000 797,317
Consolidated Natural Gas
3-10-97 5.25 2,800,000 2,796,325
Fleet Funding
4-01-97 5.28 3,500,000(f) 3,484,177
Gannett
3-21-97 5.27 600,000(f) 598,250
Gillette
3-03-97 5.37 700,000(f) 699,791
Kredietbank North America Finance
3-12-97 5.29 1,600,000 1,597,424
Michigan Consolidated Gas
3-26-97 5.27 2,500,000 2,490,885
Reed Elsevier
3-14-97 5.29 900,000(f) 898,287
3-21-97 5.28 700,000(f) 697,954
3-24-97 5.27 1,000,000(f) 996,646
Total short-term securities
(Cost: $19,144,103) $19,144,103
Total investments in securities
(Cost: $74,671,808) (g) $74,867,825
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Foreign securities values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated.
(c) 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.
(d) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 28, 1997.
(e) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements.) Information concerning such security
holdings at Feb. 28, 1997 is as follows:
Acquisition Purchase
Security date cost
- ---------------------------------------------------------------------
Dao Heng Bank* 01-16-97 $ 749,227
*Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended.
(f) Commercial paper sold within terms of a private placement memorandum, exempt
from registration udner 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.
(g) At Feb. 28, 1997, the cost of securities for federal income tax purposes was
approximately $74,658,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.......................$1,099,000
Unrealized depreciation........................(889,000)
- --------------------------------------------------------
- --------------------------------------------------------
Net unrealized appreciation.....................$210,000
- --------------------------------------------------------
<PAGE>
Retirement Annuity Mutual Funds
Growth Dimensions Fund (Percentages represent value of
Feb. 28, 1997 (Unaudited) investments compared to net assets)
Common stocks (87.7%)
Issuer Shares Value(a)
Aerospace & defense (4.3%)
Boeing 143,100 $ 14,560,425
Lockheed Martin 75,300 6,664,050
United Technologies 127,200 9,571,800
Total 30,796,275
Airlines (1.1%)
AMR 101,800(b) 8,004,025
Automotive & related (1.0%)
Chrysler 216,300 7,327,163
Banks and savings & loans (7.2%)
Barnett Banks 89,000 4,116,250
Citicorp 203,500 23,758,625
Norwest 306,600 15,253,350
State Street Boston 108,100 8,688,537
Total 51,816,762
Beverages & tobacco (2.7%)
Anheuser-Busch 159,000 7,075,500
Coca-Cola 203,500 12,413,500
Total 19,489,000
Building materials & construction (0.8%)
Tyco Intl 95,336 5,624,824
Chemicals (3.7%)
IMC Global 101,800 3,550,275
Monsanto 445,200 16,194,150
Praxair 50,800 2,470,150
USA Waste Service 127,200(b) 4,579,200
Total 26,793,775
Communications equipment & services (2.0%)
ADC Telecommunications 139,800(b) 3,774,600
Andrew 76,400(b) 4,202,000
Ascend Communications 25,400(b) 1,327,150
Tellabs 127,200(b) 5,072,100
Total 14,375,850
Computers & office equipment (14.6%)
Cisco Systems 372,700(b) 20,731,437
Compaq Computer 133,600(b) 10,587,800
Computer Associates Intl 89,100 3,875,850
Computer Sciences 95,400(b) 6,439,500
First Data 190,700 6,984,388
Hewlett-Packard 216,200 12,107,200
Ikon Office Solutions 89,000 3,671,250
Microsoft 152,600(b) 14,878,500
Oracle 190,700(b) 7,484,975
Parametric Technology 154,200(b) 8,693,025
Reynolds & Reynolds Cl A 369,000 10,332,000
Total 105,785,925
Electronics (3.7%)
Intel 190,800 27,069,750
Energy (2.4%)
Exxon 63,600 6,352,050
Mobil 63,600 7,806,900
Unocal 85,900 3,317,887
Total 17,476,837
Energy equipment & services (0.7%)
Fluor 77,500 4,698,438
Financial services (2.9%)
Household Intl 38,200 3,700,625
MBNA 203,500 6,512,000
Morgan Stanley 89,100 5,624,437
Travelers Group 95,400 5,115,825
Total 20,952,887
Food (2.1%)
ConAgra 254,400 13,483,200
Pioneer Hi-Bred Intl 25,430 1,732,419
Total 15,215,619
Health care (9.1%)
Amgen 127,200(b) 7,775,100
Boston Scientific 63,600(b) 4,213,500
Johnson & Johnson 241,600 13,922,200
Lilly (Eli) 20,300 1,773,713
Medtronic 111,400 7,213,150
Merck 133,600 12,291,200
Pfizer 203,500 18,645,687
Total 65,834,550
Health care services (1.7%)
Cardinal Health 92,300 5,676,450
HBO & Co 82,700 4,765,587
HEALTHSOUTH 44,600(b) 1,795,150
Total 12,237,187
Household products (2.9%)
Gillette 133,600 10,571,100
Procter & Gamble 89,000 10,691,125
Total 21,262,225
Industrial equipment & services (1.9%)
Deere & Co 235,400 10,033,925
Illinois Tool Works 45,800 3,864,375
Total 13,898,300
Insurance (1.6%)
American Intl Group 63,550 7,689,550
UNUM 53,350 4,101,281
Total 11,790,831
Leisure time & entertainment (1.6%)
Marriot Intl 152,700 8,093,100
Mirage Resorts 127,133(b) 3,162,433
Total 11,255,533
Media (0.2%)
Belo (AH) Cl A 44,500 1,679,875
Metals (0.6%)
Aluminum Co of America 63,600 4,531,500
Multi-industry conglomerates (6.2%)
Emerson Electric 111,300 11,018,700
General Electric 241,700 24,864,888
Minnesota Mining & Mfg 78,200 7,194,400
Westinghouse Electric 95,440 1,646,340
Total 44,724,328
Paper & packaging (0.6%)
Crown Cork & Seal 76,300 4,234,650
Restaurants & lodging (1.1%)
HFS 76,300(b) 5,226,550
Promus Hotel 67,900(b) 2,401,963
Total 7,628,513
Retail (1.9%)
Albertson's 48,450 1,707,863
CarMax Group 22,200(b) 446,775
CUC Intl 77,500(b) 1,850,312
Home Depot 700 38,150
Safeway 203,600(b) 9,798,250
Total 13,841,350
Textiles & apparel (1.0%)
Fruit of the Loom Cl A 50,900(b) 2,080,538
Nike Cl B 76,300 5,484,062
Total 7,564,600
Utilities -- electric (0.6%)
CMS Energy 127,200 4,165,800
Utilities -- telephone (1.4%)
AirTouch Communications 127,200(b) 3,466,200
BellSouth 143,200 6,712,500
Total 10,178,700
Foreign (6.1%)(c)
ACE 109,400 7,111,000
British Telecommunications 25,400 1,771,650
Ericsson (LM) ADR 267,200 8,429,325
Northern Telecommunications 25,500 1,832,813
Royal Dutch Petroleum 63,600 11,002,800
Schlumberger 44,500 4,477,812
SmithKline Beecham ADR 127,200 9,444,600
Total 44,070,000
Total common stocks
(Cost: $588,143,280) $634,325,072
Call options purchased (0.1%)
Issuer Number of Exercise Expiration Value(a)
contracts price date
Phillip Morris 600 $125 June 97 $866,250
Total call options purchased
(Cost: $655,312) $866,250
Short-term securities (12.6%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
Commercial paper (11.9%)
ABB Treasury Center USA
03-27-97 5.27% $1,400,000(d)$1,394,692
Abbott Laboratories
03-25-97 5.26 6,500,000 6,477,293
Ciesco LP
03-04-97 5.32 3,100,000 3,098,633
03-18-97 5.30 6,100,000 6,084,791
Commerzbank U.S. Finance
03-19-97 5.27 5,500,000 5,485,562
Dean Witter, Discover & Co
03-19-97 5.38 3,200,000 3,190,023
Deutsche Bank Financial
04-10-97 5.28 5,200,000 5,169,667
Gannett
03-10-97 5.29 2,200,000(d) 2,197,102
03-12-97 5.29 2,400,000(d) 2,396,135
Gillette
03-03-97 5.37 4,800,000(d) 4,798,568
Goldman Sachs Group
03-13-97 5.32 4,900,000 4,891,343
Kredietbank North America Finance
04-18-97 5.31 4,400,000 4,369,083
Mobil Australia Finance (Delaware)
03-14-97 5.33 4,000,000(d) 3,992,344
NBD Bank Canada
03-20-97 5.27 3,200,000 3,191,133
Novartis Finance
03-04-97 5.32 800,000(d) 799,647
03-07-97 5.32 6,000,000(d) 5,994,700
03-17-97 5.29 3,200,000 3,192,505
PACCAR Financial
03-20-97 5.28 1,700,000 1,695,281
Pfizer
03-11-97 5.31 3,800,000(d)3,794,416
Reed Elsevier
03-21-97 5.28 5,100,000(d)5,085,097
SBC Communications Capital
03-27-97 5.32 2,700,000(d)2,689,665
Transamerica Finance
03-07-97 5.33 4,600,000 4,595,929
03-17-97 5.29 1,400,000 1,396,721
Total 85,980,330
Letter of credit (0.7%)
Bank of America -
Formosa Plastics
03-06-97 5.32 5,400,000 5,396,025
Total short-term securities
(Cost: $91,377,804) $ 91,376,355
Total investments in securities
(Cost: $680,176,396)(e) $726,567,677
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) 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.
(e) At Feb. 28, 1997, the cost of securities for federal income tax purposes was
approximately $680,176,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation................$56,201,000
Unrealized depreciation.................(9,809,000)
- -----------------------------------------------------------
Net unrealized appreciation............$46,392,000
- -----------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
Retirement Annuity Mutual Funds
Income Advantage Fund (Percentages represent value of
Feb. 28, 1997 (Unaudited) investments compared to total net assets)
Bonds (88.1%)
Issuer Coupon Maturity Principal Value(a)
rate year amount
U. S. government obligations (1.3%)
<S> <C> <C> <C> <C>
U.S. Treasury 7.00 % 2006 $2,250,000 $ 2,313,450
Aerospace & defense (0.3%)
Newport News 9.25 2006 500,000 522,500
Banks and savings & loans (1.2%)
First Nationwide 10.625 2003 1,930,000(i) 2,142,300
Beverages & tobacco (0.9%)
Stroh Brewery 11.10 2001 1,500,000 1,584,375
Communications equipment & services (12.6%)
CenCall Communications
Zero Coupon 15.37 1999 1,500,000(f) 1,147,500
Comcast Cellular
Zero Coupon with attached put
Series A 10.69 2000 900,000(e) 660,375
Comcast Cellular
Zero Coupon with attached put
Series B 10.32 2000 1,500,000(e) 1,104,375
Geotek Communications
Zero Coupon Series B 11.75 2000 1,250,000(f) 762,500
Globalstar
with warrants 11.375 2004 1,500,000(d) 1,560,000
Intl Cabletel 10.00 2007 2,000,000(d) 2,035,000
MFS Communications
Zero Coupon 6.90 1999 1,950,000(f) 1,740,375
Nextlink Communications
Sr Nts 12.50 2006 1,000,000 1,087,500
Omnipoint 11.625 2006 2,000,000 2,020,000
Optel
Units 13.00 2005 1,750,000 (d) 1,765,312
Pagemart Nationwide
Zero Coupon 12.51 2000 2,500,000(f) 1,762,500
Peoples Telephone 12.25 2002 750,000 792,188
Phonetel Technologies 12.00 2006 1,000,000 1,065,000
Priceellular Wire 10.85 2004 1,500,000 1,584,375
Pronet
Sr Sub Nts 11.875 2005 750,000(d) 725,625
RSL Communications
Sr Nts with warrants 12.25 2006 1,250,000 1,325,000
Unifi Communications
with warrants 14.00 2004 1,000,000 1,040,000
Total 22,177,625
Computers & office equipment (1.4%)
Anacomp
Pay-in-kind 13.00 2002 1,612,125(g) 1,688,701
Unisys 11.75 2004 775,000 849,594
Total 2,538,295
Electronics (0.9%)
Advanced Micro Devices 11.00 2003 1,400,000 1,573,250
Energy (3.4%)
Costilla Energy 10.25 2006 1,250,000 1,321,875
Forcenergy 8.50 2007 500,000 (d) 498,750
9.50 2006 500,000 527,500
Harcor Energy
Sr Nts 14.875 2002 500,000 581,875
Rayovac 10.25 2006 1,000,000(d) 1,060,000
Statia Terminals 11.75 2003 750,000(d) 803,437
Transamerican Refining 18.00 2002 1,250,000 1,159,375
Total 5,952,812
Energy equipment & services (0.3%)
Noble Drilling 9.125 2006 500,000 547,500
Financial services (3.5%)
Cityscape Financial 11.00 1998 1,500,000(j) 1,500,000
Gemini 13.50 2001 1,500,000(i,j) 1,500,000
Olympic Financial 13.00 2000 2,750,000 3,138,437
Total 6,138,437
Food (2.0%)
Gorges 11.50 2006 2,250,000(d) 2,345,625
Specialty Foods 10.25 2001 1,100,000(d) 1,086,250
Total 3,431,875
Furniture & appliances (0.6%)
Lifestyle Furnishings Intl 10.875 2006 1,000,000(d) 1,106,250
Health care (4.0%)
La Petite Holdings 9.625 2001 1,100,000 1,123,375
Magellan Health Services
Sr Sub Nts 11.25 2004 500,000 558,125
Paracelsus Healthcare 10.00 2006 2,750,000 2,701,875
Regency Health Services 12.25 2003 500,000 538,125
Tenet Healthcare 10.125 2005 500,000 551,875
8.625 2007 1,500,000 1,539,225
Total 7,012,600
Household Products (0.6%)
Revlon Worldwide 10.75 2001 1,500,000 983,850
Industrial equipment & services (1.4%)
Clark Materials Handling 10.75 2006 1,000,000(d) 1,065,000
Motors & Gears 10.75 2006 1,250,000 1,309,375
Total 2,374,375
Insurance (0.7%)
Reliance Group Holdings 9.00 2000 1,250,000 1,300,000
Leisure time & entertainment (6.3%)
Alliance Entertainment 11.25 2005 250,000 185,000
Boomtown 11.50 2003 1,110,000 1,209,900
Coast Hotels & Casino
1st Mtge Nts 13.00 2002 1,400,000(d) 1,575,000
Lodgenet Entertainment 10.25 2006 2,000,000(d) 2,010,000
Plitt Theatres 10.875 2004 1,750,000 1,802,500
PRT Funding 11.625 2004 500,000 358,750
Stratosphere -- 2002 750,000(b) 641,250
Trump Atlantic City Funding
1st Mtge Nts 11.25 2006 550,000 532,125
Trump Holdings
Sr Secured Nts 15.50 2005 1,200,000 1,374,000
Waterford Gaming 12.75 2003 1,300,000(d) 1,391,000
Total 11,079,525
Media (14.2%)
Adams Outdoor Advertising
Sr Nts 10.75 2006 2,000,000(j) 2,165,000
Adelphia Communications
Sr Nts Pay-in-kind 9.50 2004 2,000,000(g) 1,820,000
Benedek Communications
Zero Coupon 11.89 2006 1,250,000(f) 800,000
Echostar Satellite Broadcasting
8.25 2001 750,000 748,125
Zero Coupon Cv 12.02 2000 2,150,000(f) 1,741,500
Heritage Media Services 8.75 2006 1,250,000 1,225,000
Jacor Communications 9.75 2006 1,500,000 1,597,500
Lamar Advertising 9.625 2006 1,500,000 1,575,000
MDC Communications Corp 10.50 2006 1,750,000 1,837,500
Paxson Communications
Sr Sub Nts 11.625 2002 1,750,000 1,868,125
Pegasus Media & Communications 12.50 2005 1,250,000 1,375,000
People's Choice TV
Zero Coupon Cv with warrants 14.03 2000 3,100,000(f) 1,426,000
Petersen Publishing 11.125 2006 2,000,000(d) 2,175,000
United Artist Theatre 9.30 2015 1,720,514(d) 1,593,625
United Intl Holdings
Zero Coupon 13.16 1999 2,100,000(e) 1,564,500
Viacom Intl 8.00 2006 1,500,000 1,485,000
Total 24,996,875
Metals (1.2%)
Envirosource 9.75 2003 1,500,000 1,473,750
NS Group
with warrants 13.50 2003 575,000 638,250
Total 2,112,000
Multi-industry conglomerates (1.5%)
J.B. Poindexter 12.50 2004 500,000 510,000
Prime Succession 10.75 2004 1,840,000 2,037,800
Total 2,547,800
Paper & packaging (4.1%)
BPC Holding
Sr Nts Pay-in-kind 12.50 2006 600,000(d,g) 642,000
Crown Paper 11.00 2005 1,000,000 975,000
Gaylord 12.75 2005 1,525,000 1,692,750
Riverwood
Sr Nts 10.25 2006 1,250,000 1,203,125
Silgan
Sr Sub Nts 11.75 2002 1,500,000 1,614,375
Warren (SD)
Sr Nts 12.00 2004 1,000,000 1,110,000
Total 7,237,250
Restaurants & lodging (0.7%)
Alliance Gaming 12.875 2003 1,175,000 1,289,563
Retail (5.8%)
Duane Reade
Zero Coupon 21.49 1999 150,000(f) 107,250
Finlay Enterprises
Zero Coupon 6.01 1998 2,000,000(f) 1,867,500
Grand Union 12.00 2004 1,500,000 1,545,000
Pathmark Stores 11.625 2002 2,500,000 2,618,750
Pueblo Xtra Intl 9.50 2003 2,600,000 2,509,000
Ralphs Grocery 10.45 2004 1,500,000 1,620,000
Total 10,267,500
Textiles & apparel (0.7%)
Polysindo Intl Financial 11.375 2006 1,200,000 1,308,000
Utilities -- electric (1.4%)
Cal Energy 9.50 2006 2,200,000(d) 2,398,000
Utilities -- gas (1.0%)
Empire Gas 7.00 2004 750,000(i) 667,500
Trans Texas Gas 11.50 2002 1,000,000 1,107,500
Total 1,775,000
Miscellaneous (4.5%)
CCPR Services 10.00 2007 1,750,000(d) 1,754,375
Norcal Waste Systems
Sr Nts 13.00 2005 2,475,000(d,i) 2,784,375
Outsourcing Solutions 11.00 2006 1,075,000(d) 1,163,688
SC Intl 13.00 2005 2,000,000 2,275,000
Total 7,977,438
Foreign (11.6%)
Australis Holdings
(U.S. Dollar) Zero Coupon 14.99 2000 1,760,000(f,j) 1,038,400
Australis Media
(U.S. Dollar)
Zero Coupon with warrants 14.80 2000 1,250,000(f,h) 725,000
CEI Citicorp Holdings
(Argentine Peso) Series B 11.25 2007 500,000(d) 486,250
Diamond Cable Communications
(U.S. Dollar) Zero Coupon 10.75 2002 1,000,000(f) 612,500
Fresh Delmonte
(U.S. Dollar) 10.00 2003 2,100,000 2,105,250
Globo Communicacoes
(U.S. Dollar) 10.50 2006 1,000,000(d) 1,027,500
Grupo Televisa
(U.S. Dollar) Sr Nts 11.875 2006 1,250,000 1,406,250
Gulf Canada Resources
(U.S. Dollar) 9.25 2004 1,000,000 1,062,500
Intl Semi-Tech
(U.S. Dollar) Zero Coupon 12.72 2000 1,000,000(f) 575,000
Ministry Finance Russia
(U.S. Dollar) 9.25 2001 900,000 (d) 891,000
Newsquest Capital
(U.S. Dollar) Series B 11.00 2006 1,500,000 1,625,625
Philippine Long Distance
(U.S. Dollar) 7.85 2007 750,000(d) 746,925
(U.S. Dollar) 8.35 2017 750,000(d) 738,555
Repap New Brunswick
(U.S. Dollar) 9.875 2000 1,200,000 1,213,500
Republic of Argentina
(U.S. Dollar) 11.75 2007 700,000 737,626
Telewest
(U.S. Dollar) 9.625 2006 1,500,000 1,533,750
TMM Transportation
(U.S. Dollar) 10.00 2006 1,050,000 1,044,750
Venezuela
(U.S. Dollar) 6.625 2007 250,000(c) 227,500
Veritas Holdings
(U.S. Dollar) 9.625 2003 2,500,000(d) 2,587,500
Total 20,385,381
Total bonds
(Cost: $150,848,267) $155,073,826
</TABLE>
Common stocks (0.1%)
Issuer Shares Value(a)
Globalstar 3,500(b) $211,750
Harcor Energy 10,000(b) 48,125
Total 259,875
Total common stocks
(Cost: $265,812 $259,875
Preferred stock & other (3.5%)
American Communications Services
Warrants 350(b,d,)$ 19,250
American Radio Systems
11.375% Pay-in-kind 10,000(d,g) 1,035,000
APP Intl Finance
12.00% 1,250(d) 1,257,812
Cablevision Systems
11.125% Pay-in-kind 31,061 (b,g)2,849,847
Geotek Communications
Warrants 40,000(b) 70,000
Paxson Communications
12.50% Pay-in-kind 4,000(d,g) 402,000
Pegasus Media & Communications
12.75% 5,500 547,250
Total 6,181,159
Total preferred stock & other
(Cost: $6,396,402) $6,181,159
Short-term securities (11.0%)
Issuer Annualized Amount Value(a)
yield on payable at
date of maturity
purchase
U.S. government agency (2.0%)
Federal Home Loan Mtge Corp Disc Nt
03-14-97 5.22% $3,500,000$ 3,493,415
Commercial paper (9.0%)
Albertson's
03-19-97 5.32 800,000 797,884
Bell Atlantic
03-18-97 5.27 1,300,000 1,296,777
BHP Finance
03-07-97 5.32 1,200,000 1,198,940
Kellogg
03-13-97 5.25 3,800,000 3,793,363
Lincoln Natl Life
03-24-97 5.27 1,800,000(k) 1,793,962
Natl Australia Funding (Delaware)
5-27-97 5.35 1,600,000 1,578,215
PACCAR Financial
03-04-97 5.31 2,600,000 2,598,854
Toyota Motor Credit
03-24-97 5.31 900,000 896,952
US WEST Communications
03-13-97 5.36 1,900,000 1,896,625
Total 15,851,572
Total short-term securities
(Cost: $19,346,356) $ 19,344,987
Total investments in securities
(Cost: $176,856,837)(l) $180,859,847
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. For long-term debt securities, items identified are in
default as to payment of interest or principal.
(c) Foreign security values are stated in U.S. dollars; principal amounts are
denominated in the currency indicated.
(d) Represents a security sold under Rule 144A, which are 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.
(e) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(f) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to the interest reset date disclosed.
(g) Pay-in-kind securities are securities in which the issuer has the option to
make interest payments in cash or in additional securities. The securities
issued as interest usually have the same terms, including maturity date, as the
pay-in-kind securities.
(h) Pay-in-kind securities are securities in which the issuer makes interest
payments in additional securities. These securities usually have the same terms
as the original holdings.
(i) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions, rate shown is the effective rate on Feb. 28, 1997.
(j) Identifies issues considered to be illiquid as to either their marketability
(see Note 1 to the financial statements). Information concerning such security
holdings at Feb. 28, 1997 is as follows:
Acquisition Purchase
Security date cost
- -----------------------------------------------------------------------
Adams Outdoor Advertising 09-17-96 $2,057,500
Australis Holdings 10-29-96 986,832
Gemini 12-23-96 1,500,000
(k) 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.
(l) At Feb. 28, 1997, the cost of securities for federal income tax purposes was
approximately $176,775,000 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
Unrealized appreciation.........................$5,151,000
Unrealized depreciation.........................(1,066,000)
- --------------------------------------------------------------
Net unrealized appreciation....................$(4,085,000)
- --------------------------------------------------------------
Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN 55440-0010
Quick telephone reference
IDSLife Surrenders and exchanges, National/Minnesota:
Insurance Company dollar-cost averaging and 800-437-0602
automated partial surrenders
Mpls./St. Paul area:
671-4738
TTY Service For the hearing impaired 800-285-8846
American Express Automated account information National/Minnesota:
Infoline (TouchTone(R) phones only) 800-272-4445
Mpls./St. Paul area:
671-1630
