American United Life
Pooled Equity Fund B
board of managers
james w. murphy, Chairman
Senior Vice President,
Corporate Finance, AUL
ronald D. anderson Professor,
School of Business,
Indiana University, Indianapolis, Indiana
jerry D. semler, Vice Chairman
Chairman, President, and
Chief Executive Officer, AUL
james P. shanahan
Senior Vice President,
Pension Division, AUL
leslie Lenkowsky Director,
Hudson Institute,
Indianapolis, Indiana
richard A. wacker Secretary to the Board, Associate General Counsel, AUL
custodian
National City BankIndianapolis, Indiana
legal counsel
Ice Miller Donadio
& Ryan Indianapolis, Indiana
investment Manager
American United Life
Insurance Company Indianapolis, Indiana
G. David Sapp,
Senior Vice President, Investments
This Report and the financial statements contained herein are submitted for the
general information of the participants in the Fund. The report is not
authorized for distribution to prospective investors in the Fund as sales
literature unless preceded or accompanied by an effective Prospectus which
contains further information concerning the sales charge and other pertinent
information.
American
United
Life
Pooled
Equity
Fund B
Semi-Annual Report
as of June 30, 1996
<PAGE>
A Message
From
The Chairman of the Board
of Managers
To All Participants in Fund B
U.S. economic growth was stronger than expected during the first half of 1996.
We experienced an increase in new home sales, strong employment gains, falling
commodity prices, and continued moderate inflation.
The stock market started the year off on a strong note, continuing the
remarkable advance which began during 1995. However, during February,
indications of faster than expected economic growth became unsettling to equity
investors who were undecided whether this increased growth would be positive or
negative for stocks. A strengthening economy suggests sustainable profit growth.
Yet higher interest rates could choke off business expansion, thereby hindering
future profits. As a result, the stock market remained in a volatile trading
range, as investors rotated rapidly from one investment theme to another.
Investment performance for Equity Fund B for the first half of 1996 was 8.7%.
As we begin the second half of 1996, we are experiencing continued evidence of
economic strength. All eyes are focused on the Federal Reserve Board to see if
it feels compelled to move into a more restrictive policy stance to prevent
inflationary pressures. During July, Federal Reserve Chairman Alan Greenspan
announced that he expects the economy to moderate in the months ahead without
any intervention from the Federal Reserve.
In this extended bull market, equity investors are preoccupied with second
quarter earnings announcements and the possibility of higher interest rates,
causing extreme trading volatility from day to day. Stocks should continue to
benefit from the favorable supply/demand situation and the fact that the June
through December period is typically strong for stocks during Presidential
election years. However, with earnings momentum slowing and the direction of
interest rates still uncertain, equity investing should remain challenging
during the remainder of 1996.
The performance for Equity Fund B is net of investment advisory fees but does
not reflect mortality and expense risk charges.
James W. Murphy
Chairman of the Board of Managers
Indianapolis, Indiana
July 15, 1996<PAGE>
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American United Life Pooled Equity Fund B
statement of net assets
June 30, 1996
(unaudited)
Assets:
Investments at market value (cost: $10,141,571)
Common stock $ 11,199,707
Money market mutual funds 727,609
Short-term notes 594,430
Long-term notes 251,563
12,773,309
Cash 35,534
Receivable for investments sold 7,179
Dividends and interest receivable 17,109
Due from AUL 327
Total assets 12,833,458
Liabilities
Due to AUL 11,980
Net Assets: $12,821,478
Units outstanding 1,195,049
Net Asset Value per unit $ 10.73
The accompanying notes are an integral part of the financial statements.<PAGE>
American United Life Pooled Equity Fund B
statement of operations
for the six months ended June 30, 1996
(unaudited)
Net Investment Income:
Income
Dividends $ 118,890
Interest 35,838
154,728
Expenses
Investment management services 18,888
Mortality and expense risks charges 56,663
75,551
Net investment income 79,177
Gain on Investments:
Net realized gain 208,701
Net unrealized gain 734,766
Net gain 943,467
Increase in Net Assets from Operations $ 1,022,644
The accompanying notes are an integral part of the financial statements.<PAGE>
American United Life Pooled Equity Fund B
statement of changes IN net assets
for the six months ended June 30, 1996 and 1995
(unaudited)
1996 1995
Operations:
Net investment income $ 79,177 $ 86,567
Net realized gain 208,701 598,197
Net unrealized gain 734,766 646,700
Increase 1,022,644 1,331,464
Contract Owner Transactions:
Proceeds from units sold 416,756 192,286
Payments for units withdrawn (1,142,953) (793,430)
Payments for units redeemed (1,252) (3,089)
Decrease (727,449) (604,233)
Net increase 295,195 727,231
Net Assets at beginning of year 12,526,283 11,706,272
Net Assets at end of period $ 12,821,478 $12,433,503
Units sold 40,822 22,465
Units withdrawn (109,695) (92,488)
Units redeemed (121) (362)
Net decrease (68,994) (70,385)
Units outstanding at beginning of year 1,264,043 1,416,743
Units outstanding at end of period 1,195,049 1,346,358
The accompanying notes are an integral part of the financial statements.<PAGE>
American United Life Pooled Equity Fund B
schedule of investments
June 30, 1996
(unaudited)
Market
Description Shares Value
Common Stock (87.7%)
Banks & Financial (7.8%)
American Express Company 6,500 $ 290,063
Banc One Corporation 10,120 344,080
Ohio Casualty Corporation 6,400 222,400
Salomon, Inc. 3,100 136,400
992,943
Broadcasting & Publishing (9.9%)
Chris-Craft Industries, Inc.* 6,272 275,184
Deluxe Corporation 6,600 234,300
Gibson Greetings, Inc. 16,600 228,250
Harland (John H.) Company 6,100 150,213
Meredith Corporation 4,600 192,050
Moore Corporation, Ltd. 9,600 181,200
1,261,197
Chemicals (1.7%)
Carlisle Companies, Inc. 1,700 90,313
Quaker Chemical Corporation 9,900 126,225
216,538
Electrical Equipment & Electronics (7.5%)
Baldor Electric Company 9,530 214,425
Dynatech Corporation* 17,900 581,750
General Electric Company 1,800 156,150
952,325
Entertainment & Leisure (4.7%)
CPI Corporation 17,900 295,350
Fleetwood Enterprises, Inc. 9,700 300,700
596,050
Food & Beverage (1.7%)
Michael Foods, Inc. 14,800 172,050
Seagram Company, Ltd. 1,400 47,075
219,125
Furniture & Apparel (13.8%)
Blair Corporation 2,500 59,062
Hillenbrand Industries, Inc. 8,000 298,000
Kellwood Corporation 9,700 178,238
La Z Boy Chair Company 9,300 280,162
*does not pay cash dividends
The accompanying notes are an integral part of the financial statements.<PAGE>
American United Life Pooled Equity Fund B
schedule of investments (continued)
June 30, 1996
(unaudited)
Market
Description Shares Value
Common Stock (87.7%), continued
Furniture & Apparel (13.8%), continued
Liz Claiborne, Inc. 12,500 $ 432,812
Oshkosh B'Gosh, Inc. Class A 11,800 212,400
Reebok International 9,100 305,988
1,766,662
Health Care (6.2%)
Acuson Corporation 9,500 152,000
Guidant Corporation 1,816 89,438
Lilly (Eli) and Company 2,086 135,590
McKesson Company 4,400 209,550
Merck & Company, Inc. 3,200 206,800
793,378
Information Processing & Telecommunications (7.1%)
Apple Computer, Inc. 6,300 132,300
Cray Research, Inc.* 660 15,923
International Business Machines Corporation 2,300 227,700
Sun Microsystems, Inc.* 8,100 476,887
Telxon Corporation 5,100 59,925
912,735
Machinery (2.7%)
Lawson Products, Inc. 8,000 202,000
Precision Castparts Corporation 3,500 147,000
349,000
Merchandising (4.9%)
Longs Drug Stores Corporation 6,800 303,450
Mac Frugal's Bargains Close-outs, Inc. 6,800 120,700
Mercantile Stores Co. 3,400 199,325
623,475
Metals & Mining (2.2%)
Aluminum Company of America 2,800 160,650
Oregon Steel Mills, Inc. 8,900 120,150
280,800
*does not pay cash dividends
The accompanying notes are an integral part of the financial statements.<PAGE>
American United Life Pooled Equity Fund B
schedule of investments (continued)
June 30, 1996
(unaudited)
Market
Description Shares Value
Common Stock (87.7%), continued
Oil & Oil Services (3.5%)
Royal Dutch Petroleum Company 1,300 $ 199,875
Valero Energy Corporation 10,100 252,500
452,375
Transportation (3.5%)
Alexander & Baldwin, Inc. 10,500 253,312
Norfolk Southern Corporation 2,300 194,925
448,237
Miscellaneous (10.5%)
Boeing Company 2,600 226,525
Cross (A.T.) Company Class A 12,200 216,550
Fluor Daniels Corporation 6,697 73,667
Ford Motor Co. 8,100 262,238
Kelly Services 9,800 286,650
Sealright, Inc. 7,700 83,737
Stanhome, Inc. 7,000 185,500
1,334,867
Total common stock (cost: $8,566,479) 11,199,707
Money Market Mutual Funds (5.7%)
Dreyfus Cash Management 323,278 323,278
Merrill Lynch Institutional Fund 404,331 404,331
Total money market mutual funds (cost: $727,609) 727,609
Interest Maturity Principal
Rate Date Amount
Notes (6.6%)
Short-term Notes (4.6%)
Ford Motor Co. 5.51% 8/26/96 600,000
594,430
Long-term Notes (2.0%)
U.S. Treasury Notes 6.50% 5/15/97 250,000
251,563
Total Notes (cost: $847,483) 845,993
Total Investments (cost: $10,141,571) $ 12,773,309
*does not pay cash dividends
The accompanying notes are an integral part of the financial statements.<PAGE>
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notes to financial statements
1. Significant Accounting Policies
American United Life Pooled Equity Fund B (Fund B) is registered under the
Investment Company Act of 1940 as an open-end, diversified management
investment company. Fund B was established and is managed by American
United Life Insurance Company (AUL) for the purpose of issuing group and
individual variable annuities.
Investments are valued at closing prices for those securities traded on
organized exchanges and at bid prices for securities traded over-the-counter.
Gains and losses on the sale of investments are determined on a first-in,
first-out (FIFO) basis.
Dividends are included in income as of the ex-dividend date. Interest income is
accrued daily.
No provision for federal income taxes is considered necessary because generally
no tax is applicable to increases in net assets representing reserves for
qualified pension plans. Operations of Fund B form a part of and are taxed with
those of AUL, which is taxed as a life insurance company under the Internal
Revenue Code.
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 at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
2. Investments
Net realized and unrealized gain on investments is summarized below.
Common Long-Term
Stock Notes
Net Realized Gain:
Proceeds from securities sold $ 1,763,581 $
Cost of securities sold (1,554,880)
$ 208,701 $
Net change in Unrealized Gain (Loss):
Market value at end of period $ 11,199,707 251,563
Less: investments purchased (715,815) (253,053)
Add: investments sold at cost 1,554,878
Less: market value at beginning of year (11,302,514)
$ 736,256 (1,490)
<PAGE>
notes to financial statements (continued)
3. Transactions With AUL
Fund B pays AUL an annual fee of 1.2% of its average daily net assets for
providing investment management services and for mortality and expense risks
charges. The expense incurred during the six months ended June 30, 1996 and
1995 was $75,551 and $70,634, respectively.
AUL withholds a portion of the proceeds obtained from contract owners to pay
commissions and certain expenses under a sales and administrative services
agreement with Fund B. The amount AUL retained during the six months ended
June 30, 1996 and 1995 was $17,176 and $8,712, respectively.
4. Net Assets
Proceeds from units sold less payments $(4,782,186)
for units withdrawn and redeemed
Net investment income 3,900,283
Net realized gains 11,071,644
Unrealized gain 2,631,737
$ 12,821,478
The unrealized gain of $2,631,737 consists of common stock appreciation and
depreciation of $3,223,882 and $590,655, and
amortization of bond premium of $1,490, respectively.
<PAGE>
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American United Life Insurance Company
Pooled Equity Fund B
P.O. Box 1995
Indianapolis, IN 46206-9101<PAGE>
first
class
mail
P-13960
