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Dear Investor,
The six months ended June 30, 1999 provided investors with much to feel good
about, as well as some cause for concern. It proved to be a difficult
environment for bond investors and produced widely divergent returns from the
various sectors of the stock market. The Ultra Series Fund weathered this
difficult environment very well. Each of the funds (listed below in order of
return during this six-month period) out-performed its representative market
index, typically by a wide margin, and all but the Capital Appreciation Fund
performed at least in line with its peer group average:
Ultra Series Fund, Market Index and Peer Index Six Month Return
(Not Annualized)
Money Market Fund 2.24%
Representative Market (90-Day Bill) 2.23%
Lipper Money Market Fund Index 2.22%
Treasury 2000 0.99%
Representative Market (Lehman Intermediate Treasury Bond Index) -0.55%
Lipper Short U. S. Government Bond Fund Index 0.85%
Bond Fund 0.25%
Representative Market (Lehman Intermediate Govt./Corp. Bond Index) -0.58%
Lipper Short/Intermediate Investment Grade Bond Fund Index 0.01%
Balanced Fund 10.24%
Representative Market (Synthetic Index)* 5.60%
Lipper Balanced Fund Index 6.16%
Growth & Income Stock Fund 20.57%
Representative Market (S&P 500 Index) 12.39%
Lipper Growth & Income Fund Index 11.62%
Capital Appreciation Stock Fund 12.78%
Representative Market (S&P 1500 Index) 11.71%
Lipper Capital Appreciation Fund Index 14.97%
*The synthetic index is a composition of the S&P 500 Stock Index (45%), the
Lehman Brothers Intermediate Government/Corporate Bond Index (40%), and 90-day
U.S. Treasury Bills (15%).
The Growth & Income Fund's exemplary performance - substantially out-performing
both its peers and the recently very difficult-to-beat Standard & Poor's 500
Index - is especially noteworthy in view of its conservative investment
approach. This is illustrated by the fund's "beta". Beta is a measure of a
fund's volatility relative to the market's. At .91 as of June 30, it means the
Growth & Income Fund generally fluctuates week-to-week in value approximately 9%
less than the market. This reflects our "moderated risk" investment approach
pursued in various ways in each of the Ultra Series Funds.
The more modest performance of the Capital Appreciation Stock Fund relative to
its peers during this six-month period reflects the practice of many "capital
appreciation" funds to invest to varying degrees in stocks of Internet-related
and other very early-stage companies. These types of stocks produced truly
remarkable returns in recent months, in many cases in spite of the issuing
companies' lack of profits and, in some cases, lack of significant revenues.
With our "value" to "growth at a reasonable price" stock selection philosophy,
such unproven companies and even more established "high expectations" stocks
rarely qualify for inclusion in our portfolios. Their stock prices simply appear
too high relative to reasonable expectations. For the six months covered by this
report, this restrained the Capital Appreciation Stock Fund's relative
performance. It still out-performed the relevant market indexes and, overall,
the Ultra Series Fund performed very much as we expect relative to
representative securities markets and peer group averages.
Another indication of the strength of the funds' returns is the June 30, 1999
performance rankings from Morningstar, Inc., the widely followed provider of
mutual fund data and opinions. Six month return rankings (which would exactly
coincide with this reporting period) are not published by Morningstar, but
rankings for the twelve months ended June 30 were recently published, and they
illustrate the extremely competitive returns provided in recent months by the
Ultra Series Fund:
<PAGE>
Ultra Series Fund Morningstar Category Ranking*
Growth & Income 1st
Treasury 2000 7th
Capital Appreciation 9th
Balanced 12th
Bond 38th
*Percentile ranking, from 1 (best) to 100 (worst), among similar funds within
the Morningstar universe for the twelve months ended June 30, 1999.
This great consistency of high rankings throughout the Ultra Series family of
funds is quite unique among mutual fund groups. The Ultra Series Fund was
designed with a limited number of distinctly different funds - a limited number
to avoid unnecessary investor confusion and the temptation to "chase recent
performance" among essentially similar funds, and distinct differences to be
able to meet investors' changing needs over time. With this approach, it is
imperative that all of the funds be consistently good performers. The above
results indicate that this very difficult goal is being achieved quite well by
the CIMCO portfolio management teams.
In the overall investment environment, the six months ended June 30 saw the U.
S. economy continue to expand in spite of languishing overseas economies, rising
U. S. interest rates, wildly fluctuating world commodities prices, growing
domestic political uncertainty, the relentless approach of year 2000 and its
attendant concerns, etc. The next six months will almost certainly present
investors with a continuation of all of these threats plus new ones as yet
unrecognized. This is the nature of investing. It is an expression of confidence
in an uncertain world. But don't mistake this for confidence in our nation's and
our investment market's ability to avoid problems. Rather, it is a recognition
that challenges will occur, but accompanying this recognition is the confidence
that our nation, our companies and our citizens possess the abilities and
resources necessary to deal successfully with whatever problems arise. This is a
vote of confidence we at CIMCO are very comfortable making, and we appreciate
your vote of confidence in us as your investing partner.
Sincerely,
/s/ Lawrence R. Halverson
Lawrence R. Halverson, CFA
Vice President
Ultra Series Fund
<PAGE>
Management's Discussion of First Half 1999 Performance
Treasury 2000 Fund
Investment Objective: Seeks safety of capital and a relatively predictable
payout upon Portfolio Maturity, primarily by investing in Stripped Treasury
Securities.
Management's Discussion: The first half of 1999 saw interest rates increase
fitfully throughout the period. By June 30, rates had risen approximately a full
percentage point across all but the shortest end of the maturity spectrum. This
reflected the continuing strength of the U. S. economy which investors feared
would ultimately lead to excessive demands for credit and increasing
inflationary pressures. These fears were further fueled by expressions of
concern from the Federal Reserve Board, which culminated in its raising of the
Fed funds rate, by .25% late in June.
The Treasury 2000 Fund's investment approach of staying invested exclusively in
U. S. Treasury Strips or similar zero coupon securities with a maturity date of
November 15, 2000 allowed the Fund to maintain its value, avoiding the loss
experienced in the intermediate-term bond market and slightly exceeding the
average returns of similar mutual funds:
USF Treasury 2000 Fund 0.99%
Lehman Intermediate Treasury Bond Index -0.55%
Lipper Average of Target Maturity Funds 0.85%
The key operating factor causing the favorable difference between the Treasury
2000 Fund's return and that of the index was the Fund's shorter maturity
structure. This advantage was reduced somewhat by Fund expenses, which amounted
to .23% of Fund assets in this period, and transaction costs. Market indexes are
not actual investment funds and do not bear either expenses or transaction
costs.
Between now and the November 15, 2000 maturity and distribution date, the Fund's
returns will reflect changes in market interest rate levels, but will be
primarily impacted by the appreciation of the Fund's investment securities to
their face value at maturity. A Fund share purchased on June 30, 1999 and held
to the November 15, 2000 maturity date would provide an annualized yield to
maturity of approximately 6.6%.
As is always the case with target maturity funds like Treasury 2000, the
risk/return nature of the fund changes quite dramatically as the maturity date
of the fund approaches. It performs more and more like a money market mutual
fund. Its month-to-month variability of returns decrease, as do its overall
level of returns (barring an extreme change in interest rate levels). Investors
who selected this fund for its attractive returns relative to the certainty of
its value at maturity may be better served by either the Money Market Fund (for
investors seeking high stability of principal and "savings-type" returns), or
the Bond Fund (for investors willing to accept moderate variability in principal
values in the pursuit of higher yields). We encourage you to discuss these
alternatives with your representative or call the CUNA Mutual Life Insurance
Company offices at 1-800-798-5500.
CIMCO Inc. Bond Portfolio Management Team
<PAGE>
Management's Discussion of First Half 1999 Performance
Bond Fund
Investment Objective: Seeks a high level of current income consistent with the
prudent limitation of investment risk through investment in a diversified
portfolio of fixed income securities. The Fund emphasizes short to
intermediate-term, investment grade bonds.
Management's Discussion: Over the past six months, bond prices fell as interest
rates rose by almost one percentage point across the maturity spectrum. For
example, five year U. S. Treasury notes rose in yield from 4.6% in early January
to end the period at 5.8%. Most other sectors of the fixed income markets, such
as corporate bonds and mortgage-backed securities, also rose in yield but not
nearly as much.
In this environment, bond market returns were generally quite poor with the
longer maturities and, uncharacteristically, the highest qualities taking the
brunt of the price declines. The Ultra Series Bond Fund's shorter maturity
structure and diversification across many sectors of the bond market helped
protect investors from large price declines, but the Fund's total return over
the period was still slightly negative at -0.25%. This was in line with
comparable funds according to Lipper Analytical Services and exceeded the return
of its market benchmark, the Lehman Intermediate Government/Corporate Bond
Mutual Fund Index. The following table shows these comparisons plus some other
key sectors of the fixed income market, vividly illustrating the wide divergence
of returns experienced in the different sectors of the bond market in this
six-month period.
USF Bond Fund -0.25%
Lehman Intermediate Govt/Corp Bond Index -0.58%
Lehman Long Treasury Bond Index -6.65%
Lehman High Yield Corporate Bond Index +2.20%
Lipper Short/Intermediate Bond Funds +0.01%
A number of factors contributed to the rise in interest rates this year.
Continued strength in the U.S. economy and a growing perception that the rest of
the world was recovering from last year's global financial crisis raised fears
of increasing credit demands. A tight labor market and a sharp rise in oil
prices suggested pressure on wages and prices could lead to rising rates of
inflation. The Federal Reserve confirmed market concerns by raising interest
rates and issuing some tough anti-inflation rhetoric.
We were surprised at the magnitude of the increase in interest rates. Despite
inflation fears, the actual reported inflation numbers point to a mild 2% trend
rate. With Treasury bonds around 6%, the resulting 4% "real" rate of return
suggests that bonds currently offer quite good value relative to historical
measures.
The Bond Fund weathered this interest rate storm quite well owing to its broad
diversification and shorter maturity structure. Its average maturity is about 5
years and the credit quality remains high at AA. The Fund's 64 holdings are
spread among the following sectors: Governments 36%, Corporates 48%, and
Mortgage-Backed Securities 16%.
Looking forward, we will continue to maintain a well-diversified portfolio.
Yield spreads compared to Treasuries remains attractive, so we will emphasize
corporates and mortgage-backed securities. We intend to vigorously manage and,
more actively than in the past, trade the portfolio in pursuit of returns in
excess of our market benchmark and other similar funds. As always, we appreciate
the opportunity to serve our investors.
CIMCO Inc. Bond Portfolio Management Team
<PAGE>
Management's Discussion of First Half 1999 Performance
Balanced Fund
Investment Objective: Seeks a high total return through the combination of
income and capital growth by investing in common stocks of the type owned in the
Growth and Income and Capital Appreciation Stock Funds, bonds of the type owned
in the Bond Fund and money market instruments of the type owned in the Money
Market Fund.
Management's Discussion: During the first half of 1999, U. S. interest rates
advanced by approximately a full percentage point, moving from 4.7% on the
10-year U. S. Treasury bond and 5.2% on the 30-year bond to nearly 5.8% and 6.0%
respectively. This reflected investors' fears that continuing economic growth
would soon strain resources, especially our tight supply of labor, leading to
increasing inflation rates and concerted actions by the Federal Reserve to raise
short-term interest rates, which it did late in June with a .25% increase in the
federal funds rate.
Investors in U. S. stocks, however, saw only a little to worry about and much to
like in this environment. Led by stocks of the leading technology/communications
companies, and by some of the more speculative Internet-related issues, stock
market indexes advanced generally 10% to 20% before trailing off, bringing the
major indexes to record levels.
The Ultra Series Balanced Fund performed very well in this period, relative to
both market indexes and peer group averages, capitalizing on the favorable stock
market returns and generally preserving the values of its bond holdings:
Ultra Series Balanced Fund 12.78%
Synthetic Index* 5.60%
Lipper Index of Balanced Funds 6.16%
* 45% Standard & Poor's 500, 40% Lehman Intermediate Government/Corporate
Bond Index and 15% 90-day U. S. Treasury Bills.
For specific descriptions of the portfolio activities undertaken in each area,
please see the information provided for the Growth & Income Stock, Capital
Appreciation Stock, Bond and Money Market Funds elsewhere in this report. The
activities described for these funds were also employed within the Balanced
Fund, which generally maintained a portfolio mix of 55% stocks (a blend of the
Growth & Income and Capital Appreciation stocks), 42% bonds and 3% money market
investments throughout this period.
Looking ahead, there continue to be both risks and opportunities in the U. S.
economy and markets. After a difficult 1998 for many international economies,
most have stabilized and many are showing distinct signs of recovery. Commodity
prices, important to many of the struggling countries, have rebounded with oil
prices showing a particularly marked recovery. We disagree with those who see
this as signaling increasing inflation, including the Federal Reserve Board
which has been unable to resist increasing interest rates in response to its
inflationary fears. The Fed continues to exhibit a wonderful "bedside manner",
reassuring world investment markets when necessary, but has been too quick (in
our opinion) to "administer medication" in the form of changes in interest
rates. We see this as actually adding to short-term volatility in both the stock
and bond markets with little if any beneficial impact on long-term economic
fundamentals.
Overall, factors still favor continued stock market growth and moderate interest
rates. The world is "awash in a sea of excess savings" as the tremendous pool of
money seeking investments continues to grow faster than the amount of attractive
securities available for investment. Other positive long-term factors include
the technological revolution, which is raising corporate productivity and
citizens' living standards worldwide, and the increasing willingness and ability
of investors worldwide to invest in the U.S. markets.
In summary, we expect the bumpy ride to continue, possibly increasing as "Year
2000" concerns build to yearend, but we also look for both stocks and bonds to
provide continued good gains into the next Millennium. The Ultra Series Balanced
Fund is well positioned to benefit its investors in this environment.
CIMCO Inc. Balanced Portfolio Management Team
<PAGE>
Management's Discussion of First Half 1999 Performance
Growth and Income Stock Fund
Investment Objective: Seeks long-term growth of capital, with income as a
secondary consideration, by investing primarily in common stocks of companies
with financial and market strengths and long-term records of performance.
Management's Discussion: The market advanced sharply during the six-month period
ended June 30, 1999. This alone is certainly nothing new, but some interesting
changes occurred during this period. This recent leg of the market advance
wasn't concentrated in the largest growth stocks. Small-cap, mid-cap, and value
stocks began to participate, also; they even led through much of the second
quarter. And, this stock market advance continued in the face of increasing
interest rates through much of the period. Investors' growing fears about the
future of corporate profits were quickly set aside when first quarter earnings
came in strong, and were further buoyed when the Federal Reserve announced a
shift to a "neutral bias" after instituting a small .25% hike in the Fed funds
rate in late June.
The S&P 500 returned 12.39% for this six-month period ended June 30, 1999. This
large capitalization growth stock index continued to outperform the S&P MidCap
index (up 6.88%) and the Russell 2000 small cap index (up 9.28%). The Ultra
Series Growth and Income Stock Fund outperformed all of these market indexes,
returning 20.57% for the period, which also significantly exceeded the returns
realized by similar mutual funds as represented by the Lipper Index of Growth
and Income Mutual Funds:
Ultra Series Growth and Income Stock Fund 20.57%
Russell 2000 Index (Small capitalization stocks) 9.28%
Standard & Poor's 400 Index (Middle capitalization stocks) 6.88%
Russell 1000 Index (Large capitalization stocks) 11.55%
Standard & Poor's 500 Index (Large capitalization stocks) 12.39%
Lipper Index of Growth and Income Funds 11.70%
Market performance during the period was driven by technology and communications
stocks, and by the market's newfound appreciation of the basic materials,
energy, and capital goods sectors. The same was true in the Growth and Income
Stock Fund where these sectors each outperformed not only the overall index, but
also the respective components of the S&P 500 market index. Fund performance was
further enhanced by strong results in the finance, consumer staples, utilities,
and consumer cyclicals relative to these sectors of the market index. The
transportation sector was the only area to negatively impact fund performance.
Significant contributors to the strong returns were Texas Instruments,
Honeywell, Rockwell, MediaOne Group, Motorola, Georgia Pacific and Hewlett
Packard.
The Fund approaches the end of the millennium with a modestly over-weighted
position in the energy sector and under-weighted positions in the healthcare and
finance sectors. Sector weights are a function of our "bottom-up" company
analysis and reflect the relative attractiveness of individual stocks, not any
macro-economic assessments of the broad sectors.
The market remains at lofty valuation levels as investors value stocks based on
the continuing strong earnings gains and the Fed's "neutral" stance. The next
six months will likely bring increased market volatility as future Fed action
will be hotly debated with each release of economic data, and the nearing of Y2K
may cause additional unrest. But while there may be some uneasy days ahead, the
financial underpinnings of the U. S. economy remain intact, and long term
investors should exercise discipline as they continue their accumulation of
sound investments like the Ultra Series Growth and Income Stock Fund to sustain
them into the new millennium.
CIMCO Inc. Common Stock Portfolio Management Team
<PAGE>
Management's Discussion of First Half 1999 Performance
Capital Appreciation Stock Fund
Investment Objective: Seeks a high level of long-term growth of capital by
investing in common stocks, including those of smaller companies and companies
undergoing significant change.
Management's Discussion: The U.S. stock market delivered solid returns during
the first half of 1999 as evidenced by the 11.71% return generated by Standard &
Poor's 1500 Super Composite Index. This index, which consists of all the
companies that appear in the S&P 500 Composite, MidCap 400 and SmallCap 600, is
the broadest of Standard & Poor's Indexes, representing stocks across all market
capitalization tiers. The six month results maintain the impressive 20%+ annual
rate of the return that the index has posted for the past four and a half years.
The first half of 1999 was marked by a dramatic style rotation between the first
and second quarters of the year. During the first quarter, performance was
driven by a narrow group of large-capitalization, high P/E growth stocks, much
as in 1998. In the second quarter, however, stock market performance broadened
dramatically as small- and mid-capitalization and lower P/E value stocks led the
market higher. With few signs of an economic slowdown, investors began to
recognize the attractive values in a number of economically sensitive stocks in
contrast to the higher prices of growth stocks.
The Capital Appreciation Stock Fund performed well during this period,
particularly during the second quarter as value stocks became better recognized.
The fund outperformed all relevant market indexes for this six-month period and
performed generally in line with the returns of similar mutual funds:
Ultra Series Capital Appreciation Stock Fund 12.78%
Russell 2000 Index (Small capitalization stocks) 9.28%
Standard & Poor's 400 Index (Middle capitalization stocks) 6.88%
Russell 1000 Index (Large capitalization stocks) 11.55%
Standard & Poor's 500 Index (Large capitalization stocks) 12.39%
Standard & Poor's 1500 Index (All capitalization sizes) 11.71%
Lipper Index of Capital Appreciation Funds 14.97%
Lipper Index of Growth Funds 11.89%
First half 1999 fund results benefited from strong performance in the
communication services, consumer cyclicals and utilities sectors. In the
communication services area, Sprint PCS, Tel Mex, and Vodafone all significantly
outperformed Standard & Poor's 1500 Index. Within the consumer cyclical sector,
Tiffany & Co. was the standout performer gaining 86%. Williams Companies, a
natural gas pipeline and telecommunications company, led the utilities sector's
out-performance. Basic materials, consumer staples, energy and transportation
sectors also outperformed their corresponding S&P Super Composite sectors.
Fund results were negatively impacted by poor performance in the technology
sector. Our investment expectations for stocks such as Cadence Design, 3Com Corp
and Keane are taking longer to unfold than anticipated. While we still believe
these holdings will generate solid long-term returns, near-term performance has
been disappointing. Our capital goods, finance, health care and diversified
sectors modestly lagged their corresponding S&P Super Composite sectors.
At present, our largest sector over-weights are in consumer cyclicals, consumer
staples, transportation and basic materials. We are most under-weight in the
communication services, health care, technology and finance sectors. These
sector weights are the result of our bottom-up analysis of the relative
attractiveness of individual stocks, not the result of any top-down view, though
we ensure that the fund remains well diversified across all economic sectors.
We believe that value-oriented stocks such as those in the Capital Appreciation
Stock Fund offer a better long-term risk-reward profile than traditional growth
stocks. With the market beginning to broaden out, a return to a more "normal"
environment in which value-oriented stocks more consistently perform well may
have begun. We believe the Capital Appreciation Stock Fund is well positioned to
benefit in this environment.
CIMCO Inc. Common Stock Portfolio Management Team
<PAGE>
Management's Discussion of First Half 1999 Performance
Mid-Cap Stock Fund
Investment Objective: Seeks long-term capital appreciation by investing in
common stocks of midsize and small companies.
Management's Discussion: The U.S. stock market turned in solid results during
the first half of 1999. Large stocks, as measured by the S&P 500, rose 12.39%
for the period. This exceeded the 6.88% rise for the S&P 400 MidCap Index, and
the 5.03% gain in the S&P 600 Small Cap Index. The six month results for larger
stocks maintain the impressive 20%+ annual rate of return that has been posted
during the last four and a half years.
The first half of 1999 was marked by a dramatic style rotation between the first
and second quarters of the year. During the first quarter, performance was
driven by a narrow group of large-capitalization, high P/E growth stocks, much
as in 1998. In the second quarter, however, stock market performance broadened
dramatically as small- and mid-capitalization and lower P/E value stocks led the
market higher. With few signs of an economic slowdown, investors began to
recognize the attractive values in a number of economically sensitive stocks in
contrast to the higher prices of growth equities.
The Ultra Series Mid-Cap Stock Fund was launched May 1, 1999. During its first
two months of operations, it returned 4.7%. This is in line with the return of
the overall mid-cap sector of the U. S. stock market, slightly trailing the 5.8%
return for the S&P 400 MidCap Index but exceeding the Frank Russell Midcap Index
return of 3.2%. Lipper Analytical Services' Mid Cap Mutual Fund Index advanced
6.5% during this two month period.
It is important for investors in the mid-cap segment to expect a wide range of
returns among the various market and peer group measures. This is true to some
degree in all market segments. Any one cross section of a market sector, as
compiled for a market index or as accumulated in a mutual fund, can be quite
different from another sampling of the sector. This is particularly true in the
mid-cap market sector (generally defined as stocks of companies with market
capitalizations -- the total market value of their outstanding shares of common
stock -- between $1 billion and $10 billion) because this size category is so
diverse in terms of individual company characteristics. (Note: We are also
impressed with the diversity of spellings used by the investment industry for
the mid-cap sector. When naming this new fund, we were uncomfortable "endorsing"
any one of the four common spellings - all shown by source in the paragraph
immediately above -- so we introduced a fifth!)
The May-June performance of your fund was boosted by a strong showing from
stocks in the consumer staples, health care, and technology sectors. Consumer
staples stocks Hannaford Brothers and TCA Cable outperformed the S&P 400 MidCap
Index. Within the health care sector, Alza, Genzyme, St Jude Medical, and Varian
Medical Systems showed strong results. Many of our technology holdings surpassed
the index returns, including Atmel, LSI Logic, Qualcomm, Quantum, Synopsis,
Storage Technology, Teradyne, and Varian Semiconductor.
Fund results were negatively affected by poor performance in the finance sector.
Stocks such as First Tennessee, Marshall & Ilsley, TCF Financial, Ambac, Mercury
General, and Partner Re turned in slightly negative returns for this period.
We continue to find attractive investment ideas, and have positioned the
portfolio versus the S&P 400 MidCap Index to be overweight in the finance and
health care sectors, while underweight the utilities and consumer cyclicals
sectors. We remain diversified across all economic sectors, with our difference
in weightings versus the index driven by the relative attractiveness of the
component stocks within the sectors.
Currently, we believe the mid-cap area offers an excellent combination of good
fundamentals and low valuations. While the S&P MidCap Index has lagged the
large-cap S&P 500 for five years, its long-term record is superior and we
believe the next five years will offer better relative returns for this sector.
CIMCO Inc. Common Stock Portfolio Management Team
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statements of Assets and Liabilities
June 30, 1999
(Unaudited)
Money Treasury Growth and Capital Mid-Cap
Market 2000 Bond Balanced Income Appreciation Stock
Assets: Fund Fund Fund Fund Stock Fund Stock Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Investments in securities,
at value, (note 2) - see
accompanying schedule
(cost $63,338,304) $63,338,304 $ -- $ -- $ -- $ -- $ -- $ --
(cost $1,673,211) -- 1,859,728 -- -- -- -- --
(cost $239,991,163) -- -- 237,500,483 -- -- -- --
(cost $439,460,755) -- -- -- 551,031,170 -- -- --
(cost $736,097,501) -- -- -- -- 1,064,677,582 -- --
(cost $549,721,181) -- -- -- -- -- 730,303,260 --
(cost $16,845,192) -- -- -- -- -- -- 17,586,199
Receivable for investment
securities sold -- -- 11,820,788 3,859,704 94,065 -- --
Accrued interest receivable 32,284 -- 2,842,797 3,029,492 133,324 110,234 2,219
Accrued dividends receivable -- -- -- 338,672 1,187,786 355,225 14,324
----------- ----------- ----------- ----------- ------------ ----------- -----------
Total assets 63,370,588 1,859,728 252,164,068 558,259,038 1,066,092,757 730,768,719 17,602,742
----------- ----------- ----------- ----------- ------------ ----------- -----------
Liabilities:
Payable for investment
securities purchased -- -- 11,913,610 9,921,789 -- -- 11,973
Dividends payable 8,084 -- -- -- -- -- --
Accrued management fees 23,643 5,502 107,289 307,625 510,172 470,084 13,445
Accrued other expenses 1,273 -- 4,419 9,587 17,805 12,672 43
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total liabilities 33,000 5,502 12,025,318 10,239,001 527,977 482,756 25,461
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net assets applicable to
outstanding capital stock $63,337,588 $1,854,226 $240,138,750 $548,020,036 $1,065,564,780 $730,285,963 $17,577,281
=========== =========== =========== =========== ============ =========== ===========
Represented by:
Capital stock, par value $.01 $633,376 $1,849 $230,907 $266,928 $291,170 $292,106 $16,796,179
Additional paid-in capital 62,704,212 1,665,860 243,299,007 425,088,779 693,571,849 507,213,182 --
Undistributed net
investment income -- -- 3,347,090 3,439,919 2,202,623 149,330 32,804
Accumulated net realized
gain (loss) on investments -- -- (4,247,574) 7,653,995 40,919,057 42,049,266 7,291
Unrealized appreciation
(depreciation) on investments -- 186,517 (2,490,680) 111,570,415 328,580,081 180,582,079 741,007
----------- ----------- ----------- ----------- ------------ ----------- -----------
Total net assets - representing
net assets applicable to
outstanding capital stock $63,337,588 $1,854,226 $240,138,750 $548,020,036 $1,065,564,780 $730,285,963 $17,577,281
=========== =========== =========== =========== ============ =========== ===========
Number of Class Z Shares
issued and outstanding(note 5) 63,337,588 184,870 23,090,749 26,692,813 29,116,951 29,210,648 1,678,896
=========== =========== =========== =========== ============ =========== ===========
Net asset value per share of
outstanding capital stock
(note 2) $1.00 $10.03 $10.40 $20.53 $36.60 $25.00 $10.47
=========== =========== =========== =========== ============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND
Investments in Securities
June 30, 1999
(Unaudited)
% Net Quality Rating Annualized Maturity Par
MONEY MARKET FUND INVESTMENTS: Assets (Unaudited)* Yield Date Amount Value
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS:
COMMERCIAL PAPER 69.1%
American Express Credit A-1/P-1 5.011 Dec 1, 1999 $1,000,000 $ 979,643
American Express Credit A-1/P-1 5.003 Dec 1, 1999 2,000,000 1,959,200
American General Finance A-1/P-1 5.040 Aug 16, 1999 2,000,000 1,987,427
Ameritech Corporation A-1+/P-1 4.925 July 13, 1999 3,150,000 3,144,939
AT&T Corp A-1+/P-1 4.865 July 27, 1999 1,000,000 996,577
Bell South Telecom Inc. A-1+/P-1 5.149 Aug 17, 1999 1,500,000 1,490,130
Caterpillar Financial Services Corp A-1/P-1 4.947 Aug 9, 1999 2,500,000 2,486,919
CIT Group Inc A-1/P-1 4.904 July 1, 1999 2,000,000 2,000,000
Coco-Cola Company A-1+/P-1 4.979 Aug 24, 1999 3,200,000 3,176,671
Consolidated Natural Gas A-1+/P-1 5.175 Aug 9, 1999 1,884,000 1,873,652
Deere & Company A-1/P-1 4.917 Aug 11, 1999 2,000,000 1,989,089
Deere & Company A-1/P-1 5.006 Aug 11, 1999 1,000,000 994,431
General Electric Capital Corporation A-1+/P-1 5.061 Sept 1,1999 3,000,000 2,974,528
General Motors Acceptance Corporation A-1/P-1 5.392 Oct 8, 1999 3,200,000 3,153,888
Lucent Technologies A-1/P-1 4.921 July 27, 1999 2,000,000 1,993,052
Madison Gas & Electric A-1+/P-1 4.990 July 12, 1999 2,000,000 1,997,006
Madison Gas & Electric A-1+/P-1 5.037 July 12, 1999 1,200,000 1,198,185
McGraw-Hill Companies A-1/P-1 4.931 July 7, 1999 1,768,000 1,766,585
McGraw-Hill Companies A-1/P-1 4.897 July 30,1999 300,000 298,847
McGraw-Hill Companies A-1/P-1 4.924 July 2, 1999 1,000,000 999,867
Merrill Lynch & Co Inc A-1+/P-1 4.905 July 19, 1999 1,200,000 1,197,132
Merrill Lynch & Co Inc A-1+/P-1 4.938 July 19, 1999 1,900,000 1,895,412
Morgan Stanley, Dean Witter, Discover
and Co. A-1/P-1 4.915 Aug 2, 1999 1,000,000 995,742
Motorola Inc A-1/P-1 4.926 July 30, 1999 1,000,000 996,142
Motorola Inc A-1/P-1 4.932 July 1, 1999 240,000 240,000
Walt Disney Company A-1/P-1 5.029 Nov 15, 1999 1,000,000 981,619
----------
TOTAL COMMERCIAL PAPER,
AT COST $43,766,683
----------
QUASI-GOVERNMENT/
GOVERNMENT SPONSORED 26.5%
Federal Home Loan Mortgage Corp 4.827 Aug 13, 1999 $ 960,000 $ 954,622
Federal Home Loan Bank 4.869 Aug 6, 1999 2,150,000 2,139,895
Federal Home Loan Bank 4.874 Aug 13, 1999 1,108,000 1,101,780
Federal Home Loan Bank 5.073 Dec 8, 1999 1,000,000 978,311
Federal Farm Credit Discount Notes 4.997 Aug 18, 1999 3,244,000 3,222,849
Federal Home Loan Mortgage Corp 4.918 July 9, 1999 3,000,000 2,996,820
Federal Home Loan Mortgage Corp 4.869 July 16, 1999 3,000,000 2,994,088
Federal National Mortgage Association 5.071 March 3, 2000 $439,000 424,737
Federal National Mortgage Association
Discount Notes 4.918 Sept 13, 1999 2,000,000 1,980,513
----------
TOTAL QUASI-GOVERNMENT/GOVERNMENT
SPONSORED, AT COST $16,793,615
----------
GOVERNMENT AGENCY BONDS 3.2%
Federal Home Loan Bank 5.092 March 29, 2000 $2,000,000 $1,999,326
----------
Annualized
Yield Shares Value
REGISTERED INVESTMENT COMPANY 1.2%
State Street Prime Money Market 4.850 778,680 $778,680
----------
TOTAL INVESTMENTS, MONEY MARKET
FUND AT COST $63,338,304
==========
</TABLE>
Notes to investments in securities:
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND
Investments in Securities
June 30, 1999
(Unaudited)
% of Interest Maturity Principal
TREASURY 2000 FUND INVESTMENTS: Net Assets Rate Date Amount Value
<S> <C> <C> <C> <C> <C>
GOVERNMENT GUARANTEED - U.S.:
U.S. Treasury Strip (Cost $1,673,211)* 100.3% 9.69% Nov 15, 2000 $2,000,000 $1,859,728
=========
</TABLE>
Notes to investments in securities:
Values of investment securities are determined as described in Note 2 of the
financial statements.
Interest rate on stripped Treasury Security represents annualized yield to
maturity at date of purchase.
*At June 30, 1999, the cost of securities for federal income tax purposes was
$1,673,211. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation................................. $186,517
Gross unrealized depreciation................................. --
--------
Net unrealized appreciation................................... $186,517
========
<PAGE>
<TABLE>
<CAPTION>
BOND FUND
Investments in Securities
June 30, 1999
(Unaudited)
% Net Quality Rating Annualized Maturity
BOND FUND INVESTMENTS: Assets (Unaudited)* Yield Date Shares Value
<S> <C> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS: 11.2%
REGISTERED INVESTMENT COMPANY 2.0%
State Street Prime Money Market 4.850 4,809,169 $4,809,169
---------
% Net Quality Rating Annualized Maturity Par
Assets (Unaudited)* Yield Date Amount Value
COMMERCIAL PAPER 9.2%
American Express Credit Corp. A-1/P-1 5.00 Jul 14, 1999 $6,000,000 $5,989,340
Bell South Telecom Inc. A-1+/P-1 5.02 Jul 14, 1999 5,000,000 4,991,099
Ford Motor Credit Corp. A-1/P-1 4.93 Jul 1, 1999 5,000,000 5,000,000
General Electric Capital Corporation A-1+/P-1 4.78 Jul 1, 1999 6,000,000 6,000,000
---------
$21,980,439
---------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $26,789,608
---------
LONG-TERM INVESTMENTS:
U.S. GOVERNMENT & AGENCY BONDS: 33.3%
GOVERNMENT NOTES 11.8%
U.S. Treasury Note AAA 6.250 Jan 31, 2002 $7,000,000 $7,105,000
U.S. Treasury Note AAA 5.875 Nov 30, 2001 5,000,000 5,031,250
U.S. Treasury Note AAA 6.375 Aug 15, 2002 6,000,000 6,116,250
U.S. Treasury Note AAA 6.375 Sep 30, 2001 3,000,000 3,050,625
U.S. Treasury Note AAA 6.250 Oct 31, 2001 3,000,000 3,043,125
U.S. Treasury Note AAA 5.500 Feb 28, 2003 4,000,000 3,972,500
---------
$28,318,750
---------
GOVERNMENT AGENCIES 21.5%
Federal Home Loan Bank Note-CPI Floating
Rate AAA 4.614 Feb 20, 2007 $2,000,000 $1,928,660
Federal Home Loan Bank AAA 8.600 Aug 25, 1999 1,000,000 1,004,609
Federal Home Loan Bank AAA 6.930 Sept 09, 1999 1,000,000 1,002,770
Federal Home Loan Mortgage Corp.
CMO - 1978 AD AAA 7.000 Apr 15, 2025 1,000,000 987,044
Federal Home Loan Mortgage Corp.
CMO - Series 2137 AAA 6.500 Mar 15, 2023 3,000,000 2,952,165
Federal Home Loan Mortgagae Corp
Pool E00299 AAA 6.500 May 01, 2009 116,229 115,212
Federal Home Loan Mortgagae Corp AAA 6.220 Jun 24, 2008 3,000,000 2,895,360
FHLMC (Gold) - Pool D92482 AAA 7.000 Aug 01, 2018 1,962,240 1,961,593
FHLMC (Gold) - Pool D92564 AAA 7.000 Oct 01, 2018 2,863,643 2,862,698
Federal National Mortgage Association
96-M6 G AAA 7.750 Sep 17, 2023 1,000,000 1,004,295
Federal National Mortgage Association,
MTN AAA 5.900 Jul 09, 2003 3,000,000 2,954,280
Federal National Mortgage Association AAA 7.000 Aug 27, 2012 4,660,000 4,598,977
Federal National Mortgage Association AAA 7.000 July 1, 2029 5,500,000 5,458,750
Federal National Mortgage Association AAA 6.040 Feb 25, 2029 2,500,000 2,363,853
Government National Mortgage Assn.
Pool 493966 AAA 7.000 Jun 15, 2029 10,000,000 9,894,200
Government National Mortgage Assn.
Pool 2754 AAA 6.500 May 20, 2029 9,984,933 9,584,737
---------
$51,569,203
---------
TOTAL U.S.-GOVERNMENT & AGENCY BONDS,
(COST $80,771,182) $79,887,953
---------
NON - U.S. GOVERNMENT BONDS: 0.5%
CANADIAN PROVINCIALS 0.5%
Nova Scotia, Providence of A-3/A- 9.735 Jul 15, 2002 $1,000,000 $1,081,509
---------
TOTAL NON-U.S. GOVERNMENT
BONDS, (COST $1,084,334) $1,081,509
---------
U.S. CORPORATE BONDS: 45.8%
BASIC MATERIALS 0.4%
Paper/Forest Products 0.4%
Chesapeake Corp. BAA-3/BBB 7.200 Mar 15, 2005 $1,000,000 $1,010,372
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
BOND FUND INVESTMENTS, % Net Quality Rating Coupon Maturity Par
CONTINUED: Assets (Unaudited)* Rate Date Amount Value
<S> <C> <C> <C> <C> <C> <C>
CAPITAL GOODS 1.1%
Manufacturing-Diversified 1.1%
Giddings & Lewis BA1 7.500 Oct 01, 2005 2,500,000 $2,542,198
---------
CONSUMER STAPLES 2.3%
Food Retailers 0.8%
Great Atlantic & Pacific Tea BA-1/BBB- 7.750 Apr 15, 2007 2,000,000 1,934,866
---------
Media-TV/Radio/Cable 1.5%
Cox Radio, Inc. BAA-2/A- 6.375 May 15, 2005 3,700,000 3,555,303
---------
ENERGY 2.9%
Exploration/Drilling 1.6%
Anadarko Petroleum Corp. BAA-1/BBB+ 5.875 Oct 15, 2003 3,000,000 2,915,661
Southwestern Energy BAA-2/BBB+ 6.700 Dec 01, 2005 1,000,000 942,800
---------
3,858,461
---------
Oil-Domestic 0.2%
Ashland, Inc. BAA-2/BBB 6.860 May 1, 2009 500,000 478,693
---------
Oil-Services 1.1%
Foster Wheeler Corp. BAA-3/BBB 6.750 Nov 15, 2005 3,000,000 2,703,039
---------
FINANCE 15.0%
Banks 9.8%
Bank of America Corp. AA-2/A+ 6.625 Jun 15, 2004 5,000,000 4,999,330
Capital One Bank BAA-3/BBB- 7.080 Oct 30, 2001 4,300,000 4,325,585
Commercial Credit Co. AA-3/A+ 7.875 Jul 15, 2004 4,000,000 4,198,712
First Union Corp. A-1/A 6.625 Jun 15, 2004 10,000,000 9,982,050
---------
23,505,677
---------
Financial Services 5.2%
Ford Motor Company A-1/A 10.125 Nov 15, 2000 3,000,000 3,157,233
General Motors Acceptance Corp A-2/A 6.850 Jun 17, 2004 4,500,000 4,537,683
Lehman Brothers Holdings BAA-1/A- 6.625 Apr 1, 2004 2,000,000 1,953,364
Merrill Lynch & Co. AA-3/AA- 6.000 Feb 17, 2009 2,000,000 1,847,248
Paine Webber BAA-1/BBB+ 6.585 Jul 23, 2001 1,000,000 995,404
---------
12,490,932
---------
HEALTHCARE 0.7%
Medical Services 0.7%
Columbia/HCA Healthcare Corporation BA-2/BB+ 6.125 Dec 15, 2000 1,800,000 1,744,501
---------
TECHNOLOGY 2.2%
Computer Related 2.2%
Comdisco Inc. BAA-1/BBB+ 6.000 Jan 30, 2002 5,280,000 5,208,239
---------
COMMUNICATION SERVICES 2.9%
Telecom-Cel/Wireless 2.0%
Cable & Wireless BAA-1/A- 6.750 Dec 01, 2008 5,000,000 4,790,024
---------
Telephone 0.9%
AT&T Corp. A-1/AA- 7.750 Mar 1, 2007 2,000,000 2,100,000
---------
UTILITES 6.1%
Electric Power 3.0%
Edison Mission Energy 144A (B) A-3/A- 7.730 Jun 15, 2009 4,500,000 4,572,176
Illinois Power BAA-1/BBB 7.500 Jun 15, 2009 2,500,000 2,531,667
---------
7,103,843
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
BOND FUND INVESTMENTS, % Net Quality Rating Coupon Maturity Par
CONTINUED: Assets (Unaudited)* Rate Date Amount Value
<S> <C> <C> <C> <C> <C> <C>
Natural Gas 3.1%
Michigan Consolidated Gas A-2/A- 5.750 May 01, 2001 667,000 $662,610
Williams Companies, Inc. BAA-2/BBB- 6.200 Aug 01, 2002 7,000,000 6,874,350
---------
7,536,960
---------
TRANSPORTATION 2.9%
Airlines 1.1%
American Airlines A-2/BBB 8.040 Sep 16, 2011 1,849,377 1,918,018
Delta Air Lines BAA-1/BBB 8.540 Jan 02, 2007 263,780 278,014
Southwest Airlines A-1/A 8.700 Jul 01, 2011 18,641 20,518
United Airlines BAA-1/BBB 9.020 Apr 19, 2012 451,888 483,703
---------
2,700,253
---------
Railroads 0.2%
Union Pacific RR A-1-A- 6.540 Jul 01, 2015 418,593 397,754
---------
Trucking & Shipping 1.6%
Golden State Petroleum Transport 144A(B) BAA-2/BB+ 8.040 Feb 01, 2019 4,000,000 3,775,212
---------
MISCELLANEOUS 9.3%
Asset-Backed Securities 9.3%
Bear Stearns Commercial Mortgage
Security AAA 6.800 Sep 15, 2008 6,500,000 6,546,719
Merrill Lynch & Co., MLMI 1996-C2 A2 AAA 6.820 Nov 21, 2028 11,000,000 11,063,635
Residential Funding Mortgage Securities
II, 1998 HI2 (C) AAA/AAA 6.290 Jul 25, 2013 4,800,000 4,794,936
---------
22,405,290
---------
TOTAL U.S. CORPORATE BONDS,
(COST $111,049,730) $109,841,617
-----------
NON - U.S. CORPORATE BONDS: 8.3%
FOREIGN ISSUES: 8.3%
British Sky Broadcasting BAA-2/BBB- 6.875 Feb 23, 2009 3,000,000 2,741,331
British Sky Broadcasting BAA-2/BBB- 7.300 Oct 15, 2006 6,000,000 5,698,824
Xerox Cap Europe PLC A-2/A 5.875 May 15, 2004 6,000,000 5,842,386
YPF Sociedad Anonima BA-3/BBB- 8.000 Feb 15, 2004 500,000 491,295
YPF Sociedad Anonima BA-3/BBB- 9.125 Feb 24, 2009 5,000,000 5,125,960
-----------
TOTAL NON-U.S. CORPORATE BONDS,
(COST $20,296,308) $19,899,796
-----------
TOTAL INVESTMENTS, BOND FUND
(COST: $239,991,163)** $237,500,483
===========
</TABLE>
<PAGE>
BOND FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
BOND FUND INVESTMENTS, CONTINUED:
Notes to investments in securities:
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At June 30, 1999, the cost of securities for federal income tax purposes was
$239,991,163. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation.............................. $647,172
Gross unrealized depreciation.............................. (3,137,852)
---------
Net unrealized depreciation................................($2,490,680)
=========
***If applicable, this security provides a claim on the interest component of
the underlying mortgages, but not on their principal component. That is, the
security's cash flows depend on the amount of principal outstanding at the
payment date. If prepayments on the underlying mortgages are higher than
expected, the yield on the security may be adversely affected.
(B) Restricted security sold within the terms of a private placement memorandum
exempt from registration under section 144A of the Securities Act of 1933,
as amended, and maybe sold only to dealers in that program or other
"qualified institutional investors." On June 30, 1999, the total market
value of these investments was $8,347,388 or 3.48% of total net assets.
(C) Represents a security whose interest rate increases at predetermined dates.
The rate disclosed is the rate currently in effect.
ABS Asset Backed Security
CMO Collateralized Mortgage Obligation
CPI Consumer Price Index
IO Interest Only
MTN Medium Term Note
PLC Public Limited Company
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Investments in Securities
June 30, 1999
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
% Net Quality Rating Annualized Maturity
BALANCED FUND INVESTMENTS: Assets (Unaudited)* Yield Date Shares Value
SHORT-TERM INVESTMENTS: 5.2%
REGISTERED INVESTMENT COMPANY 3.4%
State Street Prime Money Market 4.850 18,650,117 $18,650,117
----------
% Net Quality Rating Annualized Maturity Par
Assets (Unaudited)* Yield Date Amount Value
COMMERCIAL PAPER 1.8%
American Express Credit Corp. A-1/P-1 5.00 Jul 14, 1999 $5,000,000 $4,991,116
General Electric Capital Corporation A-1+/P-1 4.78 Jul 1, 1999 5,000,000 5,000,000
----------
$9,991,116
----------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $28,641,233
----------
% Net Quality Rating Coupon Maturity Par
LONG-TERM INVESTMENTS: Assets (Unaudited)* Rate Date Amount Value
U.S. GOVERNMENT & AGENCY BONDS: 18.9%
GOVERNMENT NOTES 10.1%
U.S. Treasury Notes AAA 5.875 Nov 30, 2001 $5,000,000 $5,031,250
U.S. Treasury Notes AAA 6.250 Jan 31, 2002 8,000,000 8,120,000
U.S. Treasury Notes AAA 4.000 Oct 31, 2000 5,000,000 4,910,940
U.S. Treasury Notes AAA 6.375 Aug 15, 2002 8,000,000 8,155,000
U.S. Treasury Notes AAA 6.375 Sep 30, 2001 10,000,000 10,168,750
U.S. Treasury Notes AAA 6.250 Aug 31, 2002 5,500,000 5,589,375
U.S. Treasury Notes AAA 7.250 Aug 15, 2004 6,000,000 6,375,000
U.S. Treasury Notes AAA 5.000 Feb 28, 2001 2,000,000 1,985,000
U.S. Treasury Notes AAA 4.625 Dec 31, 2000 5,000,000 4,940,625
----------
$55,275,940
----------
GOVERNMENT AGENCIES 8.8%
Federal Home Loan Bank-CPI Floating Rate AAA 4.614 Feb 20, 2007 $5,000,000 $4,821,650
Federal Home Loan Bank Bond AAA 5.190 Oct 20, 2003 5,000,000 4,818,955
Federal Home Loan Mortgage Corp. AAA 6.220 Jun 24, 2008 5,000,000 4,825,600
Federal Home Loan Mortgage CMO-FHR -
1978 AD AAA 7.000 Apr 15,2025 2,045,655 2,019,151
Federal Home Loan Mortgage CMO-FHR -
1991 PC AAA 6.000 Mar 15, 2024 3,000,000 2,869,995
Federal Home Loan Mortgage CMO-FHR -
Series 2137 TL AAA 6.500 Mar 15, 2023 3,000,000 2,952,165
Federal National Mortgage Assn. AAA 7.000 Aug 27, 2012 4,000,000 3,947,620
Federal National Mortgage Assn. AAA 6.040 Feb 25, 2009 2,500,000 2,363,853
Federal National Mortgage Assn. AAA 7.500 Apr 1, 2022 2,368,522 2,403,056
Federal National Mortgage Assn.
Pool 50665 AAA 7.500 Dec 1, 2022 3,164,562 3,210,702
Federal National Mortgage Assn. -
96-M6 G AAA 7.750 Sep 17, 2023 4,000,000 4,017,180
Federal National Mortgage Assn. -
MBS 2523473 AAA 7.000 Mar 1, 2029 5,000,000 4,962,500
Government National Mortgage Assn.
Pool 2754 AAA 6.500 May 20, 2029 4,992,466 4,792,368
----------
$48,004,795
----------
TOTAL U.S. GOVERNMENT & AGENCY
BONDS, (COST: $104,632,605) $103,280,735
==========
U.S. CORPORATE BONDS: 19.6%
BASIC MATERIALS 0.4%
Paper/Forest Products 0.4%
Temple-Inland, Inc. BAA-2/BBB+ 7.250 Sep 15, 2004 $2,000,000 $2,012,038
----------
CAPITAL GOODS 0.1%
Manufacturing-Diversified 0.1%
Giddings & Lewis BA1 7.500 Oct 01, 2005 500,000 508,439
----------
CONSUMER CYCLICAL 0.6%
Commercial/Consumer 0.6%
Hertz Corporation A-3/A- 7.000 Apr 15, 2001 3,000,000 3,022,440
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
BALANCED FUND INVESTMENTS % Net Quality Rating Coupon Maturity Par
CONTINUED: Assets (Unaudited)* Rate Date Amount Value
CONSUMER STAPLES 1.2%
Drug Stores 0.1%
Bergen Brunswig BAA-1/BBB+ 7.250 Jun 01, 2005 500,000 $494,030
----------
Food Retailers 0.4%
Great Atlantic & Pacific Tea BA-1/BBB- 7.750 Apr 15, 2007 2,500,000 2,418,583
----------
Media-TV/Radio/Cable 0.7%
Cox Radio, Inc. BAA-2/A- 6.375 May 15, 2005 4,000,000 3,843,572
----------
ENERGY 1.7%
Exploration/Drilling 0.7%
Anadarko Petroleum Corp BAA-1/BBB+ 5.875 Oct 15, 2003 4,000,000 3,887,548
----------
Oil-Domestic 0.8%
Ashland, Inc. BAA-2/BBB 6.860 May 1, 2009 4,500,000 4,308,232
----------
Oil-Services 0.2%
Foster Wheeler Corp. BAA-3/BBB 6.750 Nov 15, 2005 1,020,000 919,033
----------
FINANCE 5.5%
Banks 2.6%
Bank Of America Corp. AA-2/A+ 6.625 Jun 15, 2004 5,000,000 4,999,330
Capital One Bank BAA-3/BBB- 7.080 Oct 30, 2001 3,800,000 3,822,610
Well Fargo Company A-1/A 8.750 May 1, 2002 5,000,000 5,304,195
----------
14,126,135
----------
Financial Services 2.9%
Ford Motor Company A-1/A 10.125 Nov 15, 2000 2,700,000 2,841,510
General Motors Acceptance Corp A2/A 6.850 Jun 17, 2004 4,500,000 4,537,683
Lehman Brothers Holdings BAA-1/A 6.625 Apr 1, 2004 5,000,000 4,883,410
Merrill Lynch & Co. AA-3/AA- 6.000 Feb 17, 2009 4,000,000 3,694,496
----------
15,957,099
----------
HEALTHCARE 0.2%
Medical Services 0.2%
Columbia/HCA Healthcare Corporation BA-2/BB+ 6.125 Dec 15, 2000 1,000,000 969,167
----------
TECHNOLOGY 1.0%
Computer Related 1.0%
Comdisco Inc. BAA-1/BBB+ 6.000 Jan 30, 2002 5,750,000 5,671,852
----------
COMMUNICATION SERVICES 1.6%
Telecom-Cel/Wireless 0.7%
Cable & Wireless BAA-1/A- 6.750 Dec 01, 2008 4,000,000 3,832,020
----------
Telephone 0.9%
AT&T Corp. A-1/AA- 7.750 Mar 1, 2007 2,000,000 2,100,000
Sprint Spectrum (Step Coupon) (A) BAA-3/BBB+ Aug 15, 2006 3,000,000 2,745,000
----------
4,845,000
----------
UTILITIES 2.7%
Electric Power 1.3%
Edison Mission Energy 144A (B) A-3/A- 7.730 Jun 15, 2009 4,500,000 4,572,176
Illinois Power BAA-1/BBB 7.500 Jun 15, 2009 2,500,000 2,531,667
----------
7,103,843
----------
Natural Gas 1.4%
Williams Companies, Inc. BAA-2/BBB- 6.200 Aug 1, 2002 8,000,000 7,856,400
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
BALANCED FUND INVESTMENTS % Net Quality Rating Coupon Maturity Par
CONTINUED: Assets (Unaudited)* Rate Date Amount Value
TRANSPORTATION 0.9%
Airlines 0.5%
American Airlines A-2/BBB 8.040 Sep 16, 2011 924,688 $959,009
Delta Air Lines BAA-1/BBB 8.540 Jan 02, 2007 1,333,419 1,405,366
United Airlines BAA-1/BBB 9.020 Apr 19, 2012 451,888 483,703
----------
2,848,078
----------
Trucking & Shipping 0.4%
Federal Express A-3/BBB+ 7.890 Sep 23, 2008 448,943 457,880
Golden State Petroleum Transport Corp.,
144A (B) BAA-2/BB+ 8.040 Feb 01, 2019 2,000,000 1,887,606
----------
2,345,486
----------
MISCELLANEOUS 3.7%
Asset-Backed Securities 3.7%
Bear Stearns Commercial Mortgage
Security AAA 6.800 Sep 15, 2008 5,000,000 5,035,938
Merrill Lynch & Co., MLMI 1996-C2 A2 AAA 6.820 Nov 21, 2028 10,500,000 10,560,742
Residential Funding Mortgage Securities
II, 1998-HI2 (C) AAA/AAA 6.290 Jul 25, 2013 4,800,000 4,794,936
----------
20,391,616
----------
TOTAL U.S. CORPORATE BONDS,
(COST $108,340,636) $107,360,611
----------
NON-U.S. CORPORATE BONDS: 2.6%
FOREIGN ISSUES: 2.6%
British Sky Broadcasting BAA-2/BBB- 7.300 Oct 15, 2006 $3,000,000 $2,849,412
Xerox Cap Europe PLC A-2/A 5.875 May 15, 2004 6,000,000 5,842,386
YPF Sociedad Anonima BA-3/BBB- 9.125 Feb 24, 2009 4,700,000 4,818,402
YPF Sociedad Anonima BA-3/BBB- 8.000 Feb 15, 2004 1,000,000 982,590
----------
TOTAL NON-U.S. CORPORATE BONDS,
(COST $14,609,141) $14,492,790
----------
% Net
Assets Shares Value
COMMON STOCKS: 54.4%
FOREIGN ISSUES: 3.2%
BP Amoco PLC/ADR 29,973 $3,252,071
Glaxo Wellcome PLC - ADR 46,150 2,613,244
Koninklijke (Royal) Philips Electronics
N.V. - ADR 38,824 3,916,371
Telefonos de Mexico SP ADR - Cl L 39,000 3,151,687
Vodafone AirTouch PLC-SP ADR 24,225 4,772,325
----------
TOTAL FOREIGN ISSUES,(COST $7,748,053) $17,705,698
----------
DOMESTIC ISSUES: 51.2%
BASIC MATERIALS 2.5%
Chemicals 2.0%
The Dow Chemical Company 34,200 $4,339,125
Praxair, Inc. 62,500 3,058,594
Rohm and Haas Company 78,300 3,357,112
----------
10,754,831
----------
Paper/Forest Products 0.5%
Willamette Industries, Inc. 63,200 2,911,150
----------
CAPITAL GOODS 4.1%
Containers 0.8%
Owens-Illinois, Inc. *** 125,800 4,112,087
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
<S> <C> <C>
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
Electrical Equipment 1.6%
Honeywell Inc. 30,000 $3,476,250
Raychem Corporation 56,200 2,079,400
Rockwell International Corporation 49,900 3,031,425
----------
8,587,075
----------
Environmental 0.6%
Waste Management, Inc. 64,327 3,457,576
----------
Machinery/Equipment 0.5%
Pall Corporation 123,300 2,735,719
----------
Manufacturing-Diversified 0.6%
United Technologies Corporation 45,000 3,225,938
----------
CONSUMER CYCLICAL 5.4%
Commercial/Consumer 0.5%
IMS Health Incorporated 89,000 2,781,250
----------
Printing/Publishing 0.7%
PRIMEDIA Inc. *** 215,200 3,644,950
----------
Retail-Discount 0.6%
Wal-Mart Stores, Inc. 69,600 3,358,200
----------
Retail-General 2.2%
Dayton Hudson Corporation 123,600 8,034,000
Sears, Roebuck & Co. 91,000 4,055,187
----------
12,089,187
----------
Retail-Specialty 1.4%
Tiffany & Co. 80,500 7,768,250
----------
CONSUMER STAPLES 7.6%
Cosmetics/Toiletries 1.0%
Kimberly-Clark Corporation 99,100 5,648,700
----------
Drug Stores 0.8%
CVS Corporation 83,252 4,225,039
----------
Food Producers 2.6%
General Mills, Inc. 35,500 2,853,312
Nabisco Holdings Corp. - Class A 115,700 5,004,025
Sara Lee Corporation 131,600 2,985,675
Tyson Foods, Inc. - Class A 141,125 3,175,313
----------
14,018,325
----------
Food Retailers 0.8%
Safeway Inc. *** 84,200 4,167,900
----------
Media-TV/Radio/Cable 2.4%
Cox Communications, Inc. *** 109,800 4,042,012
MediaOne Group, Inc. *** 123,100 9,155,563
----------
13,197,575
----------
ENERGY 3.2%
Exploration/Drilling 0.5%
Kerr-McGee Corporation 55,100 2,765,331
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
<S> <C> <C> <C>
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
Oil-Domestic 1.3%
Unocal Corporation 86,200 $3,415,675
USX-Marathon Group 108,700 3,539,544
----------
6,955,219
----------
Oil-International 0.6%
Exxon Corporation 42,300 3,262,388
----------
Oil-Services 0.8%
Schlumberger Limited 73,100 4,655,556
----------
FINANCE 7.6%
Banks 3.2%
Bank One Corporation 98,890 5,890,136
Bank of America Corporation 99,798 7,316,441
Wells Fargo Company 106,400 4,548,600
----------
17,755,177
----------
Financial Services 2.0%
A. G. Edwards, Inc. 65,900 2,125,275
Household International, Inc. 94,100 4,457,988
Morgan Stanley Dean Witter and Co. 35,000 3,587,500
MBIA, Inc. 16,400 1,061,900
----------
11,232,663
----------
Insurance Companies 2.4%
The Allstate Corporation 113,214 4,061,552
Citigroup Inc. 150,429 7,145,378
Everest Reinsurance Holdings, Inc. 60,600 1,977,075
----------
13,184,005
----------
HEALTHCARE 4.8%
Biotech-Spec. Pharmaceutical 0.5%
Centocor, Inc. *** 60,800 2,834,800
----------
Drugs 3.2%
American Home Products Corporation 122,400 7,038,000
Bristol-Myers Squibb Company 96,200 6,776,087
Pharmacia & Upjohn, Inc. 61,200 3,476,925
----------
17,291,012
----------
Medical Services 1.1%
Aetna Inc. 67,400 6,028,088
----------
TECHNOLOGY 10.2%
Communications Equipment 1.0%
Motorola, Inc. 56,700 5,372,325
----------
Computer Related 6.4%
3Com Corporation *** 121,000 3,229,188
EMC Corporation *** 171,900 9,454,500
Gateway, Inc. *** 65,100 3,840,900
Hewlett-Packard Company 58,800 5,909,400
International Business Machines
Corporation 73,600 9,512,800
Seagate Technology, Inc. *** 112,800 2,890,500
----------
34,837,288
----------
Computer Software/Services 0.5%
Keane, Inc. *** 114,500 2,590,562
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
<S> <C> <C> <C>
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
Semiconductors 2.3%
Conexant Systems, Inc. *** 48,500 2,816,031
Micron Technology, Inc. *** 73,550 2,964,984
Texas Instruments Incorporated 48,300 7,003,500
----------
12,784,515
----------
COMMUNICATION SERVICES 2.1%
Telephone - Long Distance 0.7%
AT & T Corp. 67,650 3,775,716
----------
Telephone 1.4%
Ameritech Corporation 53,000 3,895,500
GTE Corporation 50,900 3,855,675
----------
7,751,175
----------
UTILITIES 1.5%
Electric Power 0.6%
Northern States Power Company 58,200 1,407,712
PG&E Corporation 64,350 2,091,375
----------
3,499,087
----------
Natural Gas 0.9%
The Williams Companies, Inc. 113,500 4,830,844
----------
TRANSPORTATION 1.7%
Airlines 0.5%
Delta Air Lines, Inc. 44,400 2,558,550
----------
Railroads 0.4%
Norfolk Southern Corporation 66,800 2,012,350
----------
Trucking & Shipping 0.8%
FDX Corporation *** 79,400 4,307,450
----------
MISCELLANEOUS 0.5%
Professional Services 0.5%
Interim Services Inc. *** 125,200 2,582,250
----------
TOTAL DOMESTIC ISSUES,
(COST: $175,489,087) $279,550,103
-----------
TOTAL COMMON STOCKS,
(COST: $183,237,140) $297,255,801
-----------
TOTAL INVESTMENTS, BALANCED FUND
(COST: $439,460,775)** $551,031,170
===========
</TABLE>
Notes to investments in securities:
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At June 30, 1999, the cost of securities for federal income tax purposes
was $439,460,755. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation.............................$116,356,766
Gross unrealized depreciation............................. (4,786,351)
-----------
Net unrealized appreciation...............................$111,570,415
===========
***This security is non-income producing.
****If applicable, this security provides a claim on the interest component of
the underlying mortgages, but not on their principal component. That is, the
security's cash flows depend on the amount of principal outstanding at the
payment date. If prepayments on the underlying mortgages are higher than
expected, the yield on the security may be adversely affected.
(A) Represents a security that remains zero coupon until a predetermined date,
at which the stated coupon rate becomes the effective rate.
(B) Restricted security sold within the terms of a private placement memorandum
exempt from registration under section 144A of the Securities Act of 1933,
as amended, and maybe sold only to dealers in that program or other
"qualified institutional investors." On December 31, 1998, the total market
value of these investments was $6,459,782 or 1.18% of total net assets.
(C) Represents a security whose interest rate increases at predetermined dates.
The rate disclosed is the rate currently in effect.
ABS Asset Backed Security
ADR American Depositary Receipt
CMO Collateralized Mortgage Obligation
CPI Consumer Price Index
IO Interest Only
MTN Medium Term Note
PLC Pubic Limited Company
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Investments in Securities
June 30, 1999
(Unaudited)
<S> <C> <C> <C> <C>
GROWTH AND INCOME STOCK % Net Quality Annualized
FUND INVESTMENTS: Assets Rating* Yield Shares Value
SHORT-TERM INVESTMENTS:
REGISTERED INVESTMENT COMPANY 3.6%
State Street Prime Money Market 4.850 $38,377,151 $38,377,151
----------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $38,377,151
----------
% Net
LONG-TERM INVESTMENTS: Assets Shares Value
COMMON STOCKS: 96.3%
FOREIGN ISSUES: 6.3%
BP Amoco PLC- ADR 122,540 $13,295,590
Glaxo Wellcome PLC - ADR 190,050 10,761,581
Koninklijke (Royal) Philips Electronics
N.V. - ADR 186,944 18,857,976
Nortel Networks Corporation 200,400 17,397,225
Vodafone Airtouch PLC-SP ADR*** 36,600 7,210,200
----------
TOTAL FOREIGN ISSUES,
(COST: $38,267,948) $67,522,572
----------
DOMESTIC ISSUES: 90.0%
BASIC MATERIALS 4.0%
Chemicals 2.9%
The Dow Chemical Company 155,550 $19,735,406
PPG Industries, Inc. 192,900 11,393,156
----------
31,128,562
Paper/Forest Products 1.0%
Georgia-Pacific Group 231,800 10,981,525
----------
CAPITAL GOODS 6.0%
Containers 0.6%
Crown Cork & Seal Company, Inc. 217,900 6,210,150
----------
Electrical Equipment 2.5%
Honeywell Inc. 126,000 14,600,250
Rockwell International Corporation 198,800 12,077,100
----------
26,677,350
----------
Environmental 1.6%
Waste Management, Inc. 319,799 17,189,196
----------
Manufacturing-Diversified 1.4%
United Technologies Corporation 200,600 14,380,512
----------
CONSUMER CYCLICAL 4.3%
Auto Parts Manufacturers 1.1%
Dana Corporation 257,485 11,860,403
----------
Retail-Discount 1.8%
Wal-Mart Stores, Inc. 406,100 19,594,325
----------
Retail-General 1.3%
Sears, Roebuck & Co. 315,100 14,041,644
----------
CONSUMER STAPLES 16.5%
Beverages 1.4%
PepsiCo, Inc. 377,600 14,608,400
----------
Cosmetics/Toiletries 2.4%
Kimberly-Clark Corporation 442,900 25,245,300
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
<S> <C> <C> <C> <C>
GROWTH AND INCOME STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
Drug Stores 1.6%
CVS Corporation 341,006 17,306,055
----------
Entertainment 1.5%
The Walt Disney Company*** 511,500 15,760,594
----------
Food Producers 4.8%
ConAgra, Inc. 380,500 10,130,812
General Mills, Inc. 183,200 14,724,700
Nabisco Holdings Corp. - Class A 367,700 15,903,025
Sara Lee Corporation 452,200 10,259,288
----------
51,017,825
----------
Food Retailers 1.9%
The Kroger Co.*** 711,600 19,880,325
----------
Media-TV/Radio/Cable 2.9%
MediaOne Group, Inc.*** 418,100 31,096,188
----------
ENERGY 5.8%
Oil-Domestic 2.2%
Unocal Corporation 271,450 10,756,206
USX-Marathon Group 389,450 12,681,466
----------
23,437,672
----------
Oil-International 2.1%
Exxon Corporation 141,200 10,890,050
Texaco Inc. 182,900 11,431,250
----------
22,321,300
----------
Oil-Services 1.5%
Schlumberger Limited 254,900 16,233,944
----------
FINANCE 14.1%
Banks 7.0%
Bank of America Corporation 344,571 25,261,361
Bank One Corporation 408,540 24,333,664
First Union Corporation 246,800 11,599,600
Wachovia Corporation 152,100 13,014,056
----------
74,208,682
----------
Financial Services 2.9%
Household International, Inc. 358,000 16,960,250
Morgan Stanley Dean Witter and Co. 134,000 13,735,000
----------
30,695,250
----------
Insurance Companies 4.2%
The Allstate Corporation 633,226 22,716,983
Citigroup Inc. 472,386 22,438,335
----------
45,155,318
----------
HEALTHCARE 8.1%
Drugs 4.2%
American Home Products Corporation 322,000 18,515,000
Bristol-Myers Squibb Company 371,800 26,188,663
----------
44,703,663
----------
Medical Prods/Supply 1.6%
Johnson & Johnson 177,300 17,375,400
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
<S> <C> <C> <C> <C>
GROWTH AND INCOME STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
Medical Services 2.3%
Aetna Inc. 211,000 18,871,312
Tenet Healthcare Corporation*** 292,800 5,435,100
----------
24,306,412
----------
TECHNOLOGY 17.2%
Communications Equipment 3.6%
Harris Corporation 370,900 14,534,644
Motorola, Inc. 248,200 23,516,950
----------
38,051,594
----------
Computer Related 7.7%
EMC Corporation*** 396,000 21,780,000
Hewlett-Packard Company 239,300 24,049,650
International Business Machines
Corporation 280,600 36,267,550
----------
82,097,200
----------
Computer Software/Services 2.9%
Computer Associates International, Inc. 444,900 24,469,500
Computer Sciences Corporation*** 84,800 5,867,100
----------
30,336,600
----------
Semiconductors 3.0%
Texas Instruments Incorporated 222,700 32,291,500
----------
COMMUNICATION SERVICES 6.1%
Telephone - Long Distance 2.8%
AT&T Corp. 241,751 13,492,728
Sprint Corporation 315,200 16,646,500
----------
30,139,228
----------
Telephone 3.2%
Ameritech Corporation 226,600 16,655,100
GTE Corporation 232,950 17,645,962
----------
34,301,062
----------
UTILITIES 3.7%
Electric Power 1.9%
Duke Energy Corporation 126,100 6,856,688
Northern States Power Company 229,700 5,555,868
PG&E Corporation 255,300 8,297,250
----------
20,709,806
----------
Natural Gas 1.8%
The Williams Companies, Inc. 445,000 18,940,312
----------
TRANSPORTATION 2.0%
Airlines 0.8%
Delta Air Lines, Inc. 138,900 8,004,112
----------
Railroads 1.3%
Burlington Northern Santa Fe Corporation 220,200 6,826,200
Norfolk Southern Corporation 227,700 6,859,462
----------
13,685,662
----------
MISCELLANEOUS 2.3%
Diversified 2.3%
AlliedSignal Inc. 212,400 13,381,200
Minnesota Mining and Manufacturing
Company 131,400 11,423,588
----------
24,804,788
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Investments in Securities (Continued)
December 31, 1998
<S> <C> <C> <C>
GROWTH AND INCOME STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
TOTAL DOMESTIC ISSUES,
(COST: $659,452,402) $958,777,859
------------
TOTAL COMMON STOCKS,
(COST: $697,728,351) $1,026,300,431
------------
TOTAL INVESTMENTS, GROWTH AND INCOME
FUND, (COST: $736,097,501)** $1,064,677,582
============
</TABLE>
Notes to investments in securities:
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings, if applicable, (unaudited). See
the current Prospectus and Statement of Additional Information for a complete
description of these ratings.
**At June 30, 1999, the cost of securities for federal income tax purposes was
$736,097,501. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation............................. $349,309,979
Gross unrealized depreciation............................. (20,729,898)
-----------
Net unrealized appreciation............................... $328,580,081
===========
***This security is non-income producing.
ADR American Depositary Receipt
PLC Public Limited Company
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND
Investments in Securities
June 30, 1999
(Unaudited)
<S> <C> <C> <C> <C>
CAPITAL APPRECIATION STOCK % Net Quality Annualized
FUND INVESTMENTS: Assets Rating* Yield Shares Value
SHORT-TERM INVESTMENTS:
REGISTERED INVESTMENT COMPANY 3.5%
State Street Prime Money Market 4.850 25,413,008 $25,413,008
----------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $25,413,008
----------
% Net
LONG-TERM INVESTMENTS: Assets Shares Value
COMMON STOCKS: 96.6%
FOREIGN ISSUES: 9.1%
Ace Limited 295,600 $ 8,350,700
Elan Corp PLC - ADR *** 445,400 12,359,850
Mutual Risk Management Ltd. 405,564 13,535,698
Telefonos de Mexico SP ADR - Cl L 191,000 15,435,187
Vodafone AirTouch PLC-SP ADR*** 83,625 16,474,125
----------
TOTAL FOREIGN ISSUES
(COST: $42,320,294) $66,155,560
----------
DOMESTIC ISSUES: 87.5%
BASIC MATERIALS 4.6%
Chemicals 3.5%
Praxair, Inc. 175,900 $ 8,608,106
Rohm and Haas Company 229,000 9,818,375
The Dexter Corporation 167,400 6,832,013
----------
25,258,494
----------
Paper/Forest Products 1.1%
Willamette Industries, Inc. 175,700 8,093,181
----------
CAPITAL GOODS 7.1%
Containers 2.5%
Owens-Illinois, Inc.*** 563,700 18,425,944
----------
Electrical Equipment 1.5%
Raychem Corporation 292,200 10,811,400
----------
Machinery/Equipment 1.2%
Pall Corporation 388,600 8,622,063
----------
Manufacturing-Diversified 1.9%
Illinois Tool Works, Inc. 167,600 13,743,200
----------
CONSUMER CYCLICAL 12.4%
Commercial/Consumer 1.0%
IMS Health Incorporated 242,600 7,581,250
----------
Printing/Publishing 1.9%
PRIMEDIA Inc.*** 820,600 13,898,913
----------
Retail-General 3.4%
Dayton Hudson Corporation 381,900 24,823,500
----------
Retail-Specialty 6.1%
The Sherwin-Williams Company 414,200 11,494,050
The TJX Companies, Inc. 428,400 14,271,075
Tiffany & Co. 197,700 19,078,050
----------
44,843,175
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
<S> <C> <C> <C>
CAPITAL APPRECIATION STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
CONSUMER STAPLES 12.7%
Drug Stores 0.9%
Rite Aid Corporation 253,800 $6,249,825
----------
Food Producers 4.0%
Nabisco Holdings Corp. - Class A 257,500 11,136,875
Sara Lee Corporation 253,200 5,744,475
Tyson Foods, Inc. - Class A 542,700 12,210,750
----------
29,092,100
----------
Food Retailers 2.5%
Safeway Inc.*** 366,200 18,126,900
----------
Media-TV/Radio/Cable 5.3%
Cox Communications, Inc.*** 359,400 13,230,412
MediaOne Group, Inc.*** 347,300 25,830,438
----------
39,060,850
----------
ENERGY 5.6%
Exploration/Drilling 1.0%
Kerr-McGee Corporation 148,700 7,462,881
----------
Oil-Domestic 4.6%
Unocal Corporation 246,950 9,785,394
USX-Marathon Group 370,200 12,054,638
Weatherford International, Inc. 325,900 11,936,088
----------
33,776,120
----------
FINANCE 11.5%
Banks 5.1%
First Security Corporation 452,600 12,333,350
SunTrust Banks, Inc. 168,200 11,679,388
Wells Fargo Company 307,800 13,158,450
----------
37,171,188
----------
Financial Services 2.1%
A. G. Edwards, Inc. 195,700 6,311,325
MBIA, Inc. 134,300 8,695,925
----------
15,007,250
----------
Insurance Companies 4.3%
Citigroup Inc. 446,398 21,203,905
Everest Reinsurance Holdings, Inc. 319,500 10,423,688
----------
31,627,593
----------
HEALTHCARE 6.4%
Biotech-Spec. Pharmaceutical 1.5%
Centocor, Inc.*** 229,000 10,677,125
Crescendo Pharmaceuticals Corporation*** 6,260 107,985
----------
10,785,110
----------
Drugs 1.4%
Pharmacia & Upjohn, Inc. 174,700 9,925,144
----------
Medical Prods/Supply 1.5%
ALZA Corporation*** 218,600 11,121,275
----------
Medical Services 2.0%
Aetna Inc. 163,600 14,631,975
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
<S> <C> <C> <C>
CAPITAL APPRECIATION STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
TECHNOLOGY 17.9%
Computer Related 7.4%
3Com Corporation*** 329,300 $ 8,788,194
EMC Corporation*** 409,800 22,539,000
Gateway, Inc.*** 227,200 13,404,800
Seagate Technology, Inc.*** 372,100 9,535,062
----------
54,267,056
Computer Software/Services 4.8%
Autodesk, Inc. 287,900 8,511,044
Cadence Design Systems, Inc.*** 492,400 6,278,100
Keane, Inc.*** 505,000 11,425,625
PeopleSoft, Inc. 520,500 8,978,625
----------
35,193,394
----------
Semiconductors 5.7%
Conexant Systems Inc.*** 123,199 7,153,242
Dallas Semiconductor Corporation 253,800 12,816,900
Micron Technology, Inc.*** 176,150 7,101,047
Texas Instruments Incorporated 100,600 14,587,000
----------
41,658,189
----------
COMMUNICATION SERVICES 1.4%
Telecom-Cel/Wireless 0.5%
Sprint PCS Group*** 63,500 3,627,438
----------
Telephone 0.9%
CenturyTel, Inc. 167,400 6,654,150
----------
UTILITIES 3.7%
Electric Power 1.2%
MidAmerican Energy Holdings Co.*** 249,000 8,621,625
----------
Natural Gas 2.5%
Sonat Inc. 162,000 5,366,250
The Williams Companies, Inc. 306,600 13,049,662
----------
18,415,912
----------
TRANSPORTATION 2.7%
Airlines 0.8%
Midwest Express Holdings, Inc.*** 169,875 5,775,750
----------
Trucking & Shipping 1.8%
FDX Corporation*** 245,200 13,302,100
----------
MISCELLANEOUS 1.5%
Professional Services 1.5%
Interim Services Inc.*** 537,200 11,079,750
---------
TOTAL DOMESTIC ISSUES,
(COST: $481,987,879) $638,734,692
-----------
TOTAL COMMON STOCKS,
(COST: $524,308,173) $704,890,252
-----------
TOTAL INVESTMENTS, CAPITAL APPRECIATION
STOCK FUND (COST: $549,721,181)** $730,303,260
===========
</TABLE>
<PAGE>
CAPITAL APPRECIATION STOCK FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
Notes to investments in securities:
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings, if applicable, (unaudited). See
the current Prospectus and Statement of Additional Information for a complete
description of these ratings.
**At June 30, 1999, the cost of securities for federal income tax purposes was
$549,721,181. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation............................ $210,466,053
Gross unrealized depreciation............................ (29,883,974)
-----------
Net unrealized appreciation.............................. $180,582,079
===========
***This security is non-income producing.
ADR American Depositary Receipt
PLC Public Limited Company
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Investments in Securities
June 30, 1999
(Unaudited)
MID-CAP STOCK FUND % Net Annualized
INVESTMENTS: Assets Yield Shares Value
<S> <C> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS: 5.2%
REGISTERED INVESTMENT COMPANY 3.8%
State Street Prime Money Market 4.850 672,980.39 $672,980
-------
COMMERCIAL PAPER 1.4%
Procter & Camble Co. 5.085 253,506.12 253,506
-------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $926,486
-------
% Net
LONG-TERM INVESTMENTS: Assets Shares Value
COMMON STOCKS: 94.7%
FOREIGN ISSUES: 2.7%
London Pacific Group Limited - SP ADR 3,000 $69,000
Newbridge Networks Corporation*** 6,100 175,375
PartnerRe Ltd. 4,600 171,925
Zindart Limited - ADR*** 6,500 53,625
-------
TOTAL FOREIGN ISSUES,
(COST: $519,144) $469,925
-------
DOMESTIC ISSUES: 92.0%
BASIC MATERIALS 3.2%
Metals & Mining 0.8%
USEC Inc. 9,500 $141,313
-------
Paper/Forest Products 1.3%
Bemis Company, Inc. 2,800 111,300
Westvaco Corporation 4,100 118,900
-------
230,200
-------
Steel 1.1%
Bethlehem Steel Corporation*** 12,600 96,863
Texas Industries, Inc. 2,700 104,625
-------
201,488
-------
CAPITAL GOODS 8.3%
Construction 1.4%
Fluor Corporation 2,700 109,350
McDermott International, Inc. 4,700 132,775
-------
242,125
-------
Electrical Equipment 2.2%
Advanced Lighting Technologies, Inc.*** 8,000 72,000
Hubbell Incorporated - Class B 2,600 117,975
Molex Incorporated 4,400 162,800
Security Dynamics Technologies, Inc.*** 2,000 42,500
-------
395,275
-------
Machinery/Equipment 2.5%
Federal Signal Corporation 10,200 216,112
Kaydon Corporation 6,500 218,563
-------
434,675
-------
Manufacturing-Diversified 1.2%
National Service Industries. Inc. 2,900 104,400
Premark International, Inc. 2,900 108,750
-------
213,150
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
MID-CAP STOCK FUND % Net
INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Office Supplies/Equipment 1.0%
Herman Miller, Inc. 8,000 $168,000
-------
CONSUMER CYCLICAL 15.2%
Apparel/Textiles 1.6%
V.F. Corporation 4,500 192,375
Wellman Inc. 5,300 84,469
-------
276,844
-------
Auto Parts Manufacturing 0.3%
Durakon Industries, Inc.*** 3,000 47,063
-------
Furniture/Appliances 2.2%
Ethan Allen Interiors Inc. 8,900 335,975
Flexsteel Industries, Inc. 4,000 53,250
-------
389,225
-------
Homebuilding/Supplies 1.7%
Lennar Corporation 5,000 120,000
M/I Schottenstein Homes, Inc. 4,000 73,750
Oakwood Homes Corporation 3,000 39,375
U.S. Home Corporation*** 2,000 71,000
-------
304,125
-------
Leisure Time/Gaming 0.9%
Champion Enterprises, Inc.*** 6,000 111,750
K2 Inc. 6,000 53,625
-------
165,375
-------
Lodging/Hotels 1.1%
Host Marriott Corp. 7,400 87,875
Prime Hospitality Corp.*** 9,200 110,400
-------
198,275
-------
Printing/Publishing 1.7%
A. H. Belo Corporation, Class A 8,100 159,468
Hollinger International Inc. 11,900 141,312
-------
300,780
-------
Retail-Discount 1.3%
Dollar General Corporation 6,750 195,750
Duckwall-ALCO Stores, Inc.*** 3,000 31,500
-------
227,250
-------
Retail-Specialty 4.4%
Catherines Stores Corporation*** 3,000 37,125
Borders Group, Inc.*** 7,700 121,756
Ross Stores, Inc. 3,600 181,350
Tiffany & Co. 2,500 241,250
Wilson, The Leather Experts Inc.*** 4,000 65,750
Zale Corporation*** 3,000 120,000
-------
767,231
-------
CONSUMER STAPLES 7.1%
Cosmetics/Toiletries 0.2%
Perrigo Company*** 5,000 38,125
-------
Food Producers/Distributors 2.8%
Flowers Industries, Inc. 9,800 212,538
Tyson Foods, Inc. - Class A 12,500 281,250
-------
493,788
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
MID-CAP STOCK FUND % Net
INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Food Retailers 1.6%
Hannaford Brothers Co. 5,100 $272,850
-------
Media-TV/Radio/Cable 1.4%
TCA Cable TV, Inc. 4,400 244,200
-------
Retail-Restaurants 1.1%
CKE Restaurants, Inc. 9,800 159,250
Rainforest Cafe, Inc.*** 6,000 30,375
-------
189,625
-------
ENERGY 4.9%
Exploration/Drilling 4.5%
BJ Services Company*** 7,800 229,613
ENSCO International Incorporated 10,800 215,325
Santa Fe International Corporation 5,700 131,100
Smith International, Inc*** 5,100 221,530
-------
797,568
-------
Oil-Domestic 0.4%
Remington Oil & Gas Corporation*** 9,000 43,875
Tesoro Petroleum Corporation*** 2,000 31,875
-------
75,750
-------
FINANCE 14.8%
Banks 6.8%
Associated Banc-Corp 3,800 157,700
Bank United Corp. - Class A 2,500 100,468
Bay View Capital Corporation 1,000 20,500
Commercial Federal Corporation 5,000 115,938
First Security Corporation 7,300 198,925
First Tennessee National Corporation 4,100 157,080
Hibernia Corporation 9,700 152,169
Marshall & Ilsley Corporation 1,900 122,312
SunTrust Banks, Inc. 200 13,888
TCF Financial Corporation 5,600 156,100
-------
1,195,081
-------
Financial Services 2.4%
Arcadia Financial Ltd.*** 10,000 77,500
The Bear Stearns Companies Inc. 5,300 247,775
Reliance Group, Holdings 12,400 92,225
-------
417,500
-------
Insurance Companies 4.4%
Ambac Financial Group. Inc. 2,200 125,675
American Medical Security Group, Inc.*** 5,000 43,125
Financial Industries Corporation*** 3,000 36,000
Mercury General Corporation 5,800 197,200
MGIC Investment Corporation 3,700 179,912
MMI Companies, Inc. 5,000 84,375
PICO Holdings, Inc.*** 3,000 75,938
PXRE Corporation 2,000 36,250
-------
778,475
-------
Real Estate Investment 1.2%
LNR Property Corporation 3800 81,225
New Plan Excel Realty Trust 7600 136,800
-------
218,025
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
MID-CAP STOCK FUND % Net
INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
HEALTHCARE 10.1%
Biotech-Spec. Pharmaceutical 1.4%
Centocor, Inc.*** 5,400 $251,775
-------
Drugs 2.7%
Chiron Corporation*** 10,900 226,175
Copley Pharmaceutical, Inc.*** 6,000 61,500
Genzyme Corporation*** 3,300 160,050
ICN Pharmaceuticals, Inc. 1,000 32,188
-------
479,913
-------
Medical Products/Supplies 4.4%
ALZA Corporation*** 5,200 264,550
Genzyme Surgical Products*** 590 2,600
Mentor Corporation 4,000 74,500
St. Jude Medical, Inc.*** 4,600 163,875
Sunrise Medical Inc.*** 7,000 49,875
Sybron International Corporation*** 7,800 214,986
-------
770,386
-------
Medical Services 1.6%
Chronimed Inc.*** 5,000 38,750
Genesis Health Ventures, Inc.*** 8,000 24,000
Humana Inc.*** 7,000 90,562
NABI*** 15,800 44,438
Trigon Healthcare, Inc.*** 2,400 87,300
-------
285,050
-------
TECHNOLOGY 19.2%
Communication Equipment 2.6%
ADC Telecommunications, Inc.*** 3,400 154,912
Comdial Corporation*** 8,000 56,500
Norstan *** 1,800 22,388
QUALCOMM Incorporated*** 1,600 229,600
-------
463,400
-------
Computer Related 3.2%
Data General Corporation*** 8,400 122,325
Exabyte Corporation*** 8,000 31,000
Quantum Corporation&*** 6,900 166,463
Storage Technology Corporation*** 10,600 241,150
-------
560,938
-------
Computer Software/Services 5.5%
Autodesk, Inc. 5,100 150,768
Aztec Technology Partners, Inc. 25,000 46,875
Keane, Inc.*** 6,200 140,275
Rainbow Technologies, Inc.*** 3,000 35,438
Sterling Software, Inc.*** 6,700 178,806
Structural Dynamics Research Corporation*** 7,100 131,794
Sybase, Inc.*** 7,000 77,000
Synopsys, Inc.*** 2,900 160,044
Wall Data Incorporated*** 4,000 38,250
-------
959,250
-------
Electronics 3.6%
Arrow Electronics, Inc.*** 6,000 114,000
W. W. Grainger, Inc. 2,700 145,294
Tech-Sym Corporation*** 3,500 83,125
Teradyne, Inc.*** 2,800 200,900
Varian Medical Systems, Inc. 3,500 88,375
-------
631,694
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Investments in Securities (Continued)
June 30, 1999
(Unaudited)
MID-CAP STOCK FUND % Net
INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Photography/Imaging 0.6%
Polariod Corporation 3,700 $102,213
-------
Semiconductors 3.7%
Atmel Corporation*** 6,700 175,456
Etec Systems, Inc.*** 3,900 129,675
LSI Logic Corporation 5,200 239,850
Varian Semiconductor Equipment
Associates, Inc.*** 6,500 110,500
-------
655,481
-------
COMMUNICATION SERVICES 1.2%
Telephone 1.2%
CenturyTel, Inc. 5,200 206,700
-------
UTILITIES 3.3%
Electric Power 3.0%
El Paso Electric Company*** 14,300 127,806
Florida Progress Corporation 4,100 169,381
Midamerican Energy Holdings Company*** 5,100 176,588
UniSource Energy Corporation*** 4,500 53,719
-------
527,494
-------
Natural Gas 0.3%
Questar Corporation 2,600 49,725
-------
TRANSPORTATION 2.3%
Airlines 0.7%
Midwest Express Holdings, Inc.*** 3,600 122,400
-------
Transportation-Miscellaneous 0.8%
The Hertz Corporation, Class A 2,400 148,800
-------
Trucking & Shipping 0.8%
Airborne Freight Corporation 5,000 138,438
-------
MISCELLANEOUS 2.4%
Professional Services 2.4%
Business Resource Group*** 10,000 33,125
EZCORP, Inc. 10,000 68,750
Manpower Inc. 9,000 203,625
Modis Professional Services, Inc.*** 7,800 107,250
-------
412,750
-------
TOTAL DOMESTIC ISSUES,
(COST: $15,399,562) $16,189,788
----------
TOTAL INVESTMENTS, MID-CAP STOCK FUND,
(COST: $16,845,192)** $17,586,199
==========
</TABLE>
Notes to investments in securities:
Values of investment securities are determined as described in Note 2 of the
financial statements.
*Moody's/Standard & Poors' quality ratings, if applicable, (unaudited). See
the current Prospectus and Statement of Additional Information for a complete
description of these ratings.
**At June 30, 1999, the cost of securities for federal income tax purposes was
$16,845,192. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation................................ $1,336,560
Gross unrealized depreciation................................ (595,553)
----------
Net unrealized appreciation.................................. $741,007
==========
***This security is non-income producing.
ADR American Depositary Receipt
PLC Public Limited Company
REIT Real Estate Investment Trust
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statements of Operations
Six Months Ended June 30, 1999
(Unaudited)
Money Treasury Growth and Capital Mid-Cap
Market 2000 Bond Balance Income Appreciation Stock
Fund Fund Fund Fund Stock Fund Stock Fund Fund
Investment income (note 2):
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income $1,460,357 $56,649 $7,130,480 $6,588,576 $584,328 $313,921 $23,415
Dividend income -- -- -- 1,720,688 7,133,236 2,717,999 34,222
---------- ---------- ------------ ---------- ----------- ----------- ----------
Total income 1,460,357 56,649 7,130,480 8,309,264 7,717,564 3,031,920 57,637
---------- ---------- ------------ ---------- ----------- ----------- ----------
Expenses (note 4):
Management fees 133,028 4,112 642,822 1,728,194 2,799,424 2,671,635 24,790
Trustees' fees 199 -- 798 1,628 3,053 2,241 15
Audit fees 373 -- 1,496 3,054 5,723 4,202 28
---------- ---------- ------------ ---------- ----------- ----------- ----------
Total net expenses 133,560 4,112 645,116 1,732,876 2,808,200 2,678,078 24,833
---------- ---------- ------------ ---------- ----------- ----------- ----------
Net investment incomes 1,326,757 52,537 6,485,364 6,576,388 4,909,364 353,842 32,804
Realized and unrealized
gain (loss) on investments
(notes 2 and 3):
Realized gain (loss)
on investments:
Proceeds from sale of
investments and principal
pay downs (notes 2 and 3): 229,286,222 -- 1,237,349,512 963,051,675 293,904,324 267,891,936 54,012,891
Cost of investments sold (229,286,222) -- (1,241,597,086) (952,921,239) (252,985,267) (225,842,670) (54,005,600)
----------- ---------- ------------ ---------- ----------- ----------- ----------
Net realized gain (loss)
on investments -- -- (4,247,574) 10,130,436 40,919,057 42,049,266 7,291
----------- ---------- ------------ ---------- ----------- ----------- ----------
Net change in unrealized
appreciation or
depreciation on investments -- (34,215) (2,826,486) 31,882,485 131,453,534 40,209,173 741,007
----------- ---------- ------------ ---------- ----------- ----------- ----------
Net gain (loss) on investments -- (34,215) (7,074,060) 42,012,921 172,372,591 82,258,439 748,298
----------- ---------- ------------ ---------- ----------- ----------- ----------
Net increase in net assets
resulting from operations $1,326,757 $18,322 $(588,696) $48,589,309 $177,281,955 $82,612,281 $781,102
=========== ========== ============ ========== =========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 1999 and the Year Ended December 31, 1998
(Unaudited)
MONEY MARKET FUND TREASURY 2000 FUND BOND FUND
Operations: 1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
Net investment income $1,326,757 $2,251,161 $52,537 $106,292 $6,485,364 $12,280,579
Net realized gain (loss) on
investments -- -- -- -- (4,247,574) 159,188
Net change in unrealized
appreciation or depreciation on
investments -- -- (34,215) 21,682 (2,826,486) (85,864)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets from
operations 1,326,757 2,251,161 18,322 127,974 (588,696) 12,353,903
----------- ----------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income (1,326,757) (2,251,161) -- -- (3,208,315) (12,272,877)
From realized gains on investments -- -- -- -- (3,484) (155,703)
Return of capital -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets from
distributions (1,326,757) (2,251,161) -- -- (3,211,799) (12,428,580)
----------- ----------- ----------- ----------- ----------- -----------
Class Z Share transactions (note 5):
Proceeds from sale of shares 24,951,087 45,266,763 -- 7,253 17,269,801 30,878,732
Net asset value of shares issued
in reinvestment of distributions 1,325,965 2,249,737 -- -- 3,211,799 12,428,580
----------- ----------- ----------- ----------- ----------- -----------
26,277,052 47,516,500 -- 7,253 20,481,600 43,307,312
Cost of shares repurchased (19,355,952) (32,270,164) -- -- (4,823,505) (3,791,053)
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets derived from
capital share transactions 6,921,100 15,246,336 -- 7,253 15,658,095 39,516,259
----------- ----------- ----------- ----------- ----------- -----------
Increase in net assets 6,921,100 15,246,336 18,322 135,277 11,857,600 39,441,582
Net assets:
Beginning of year 56,416,488 41,170,152 1,835,904 1,700,677 228,281,150 188,839,568
----------- ----------- ----------- ----------- ----------- -----------
End of year $63,337,588 $56,416,488 $1,854,226 $1,835,904 $240,138,750 $228,281,150
=========== =========== =========== =========== =========== ===========
Undistributed net investment
income included in net assets -- -- -- -- $3,347,090 $70,041
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statements of Changes in Net Assets (Continued)
Six Months Ended June 30, 1999 and the Year Ended December 31, 1998
(Unaudited)
GROWTH AND INCOME CAPITAL APPRECIATION
BALANCED FUND STOCK FUND STOCK FUND
Operations: 1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
Net investment income $6,576,388 $12,088,130 $4,909,364 $8,354,361 $353,842 $1,650,475
Net realized gain (loss) on
investments 10,130,436 (2,476,442) 40,919,057 34,291,135 42,049,266 15,075,685
Net change in unrealized
appreciation or depreciation on
investments 31,882,485 38,583,512 131,453,534 73,755,119 40,209,173 86,357,794
----------- ----------- ------------ ----------- ----------- -----------
Change in net assets from
operations 48,589,309 48,195,200 177,281,955 116,400,615 82,612,281 103,083,954
----------- ----------- ------------ ----------- ----------- -----------
Distributions to shareholders:
From net investment income (3,180,943) (12,093,642) (2,714,832) (8,355,956) (199,398) (1,663,199)
From realized gains on investments -- (19,797) (3,766,864) (30,527,402) (425,180) (14,650,506)
Return of capital -- -- -- -- -- --
----------- ----------- ------------ ----------- ----------- -----------
Change in net assets from
distributions (3,180,943) (12,113,439) (6,481,696) (38,883,358) (624,578) (16,313,705)
----------- ----------- ------------ ----------- ----------- -----------
Class Z Share transactions (note 5):
Proceeds from sale of shares 53,047,525 98,736,778 66,244,904 138,687,461 32,451,917 74,042,102
Net asset value of shares issued
in reinvestment of distributions 3,180,943 12,113,439 6,481,696 38,883,358 624,578 16,313,705
----------- ----------- ------------ ----------- ----------- -----------
56,228,468 110,850,217 72,726,600 177,570,819 33,076,495 90,355,807
Cost of shares repurchased (3,609,140) (6,743,348) (11,135,701) (12,049,887) (15,151,301) (2,947,225)
----------- ----------- ------------ ----------- ----------- -----------
Change in net assets derived from
capital share transactions 52,619,328 104,106,869 61,590,899 165,520,932 17,925,194 87,408,582
----------- ----------- ------------ ----------- ----------- -----------
Increase (decrease) in net assets 98,027,694 140,188,630 232,391,158 243,038,189 99,912,897 174,178,831
Net assets:
Beginning of year 449,992,342 309,803,712 833,173,622 590,135,433 630,373,066 456,194,235
----------- ----------- ------------ ----------- ----------- -----------
End of year $548,020,036 $449,992,342 $1,065,564,780 $833,173,622 $730,285,963 $630,373,066
=========== =========== ============ =========== =========== ===========
Undistributed net investment
income included in net assets $3,439,919 $27,494 $2,202,623 -- $149,330 --
=========== =========== ============ =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
ULTRA SERIES FUND
Statements of Changes in Net Assets (Continued)
Six Months Ended June 30, 1999 and the Year Ended December 31, 1998
(Unaudited)
MID-CAP STOCK FUND
Operations: 1999 1998
Net investment income $32,804 $ --
Net realized gain (loss) on
investments 7,291 --
Net change in unrealized
appreciation or depreciation on
investments 741,007 --
---------- ----------
Change in net assets from
operations 781,102 --
---------- ----------
Distributions to shareholders:
From net investment income -- --
From realized gains on investments -- --
Return of capital -- --
---------- ----------
Change in net assets from
distributions -- --
---------- ----------
Class Z Share transactions (note 5):
Proceeds from sale of shares 16,863,604 --
Net asset value of shares issued
in reinvestment of distributions -- --
---------- ----------
16,863,604 --
Cost of shares repurchased (67,425) --
---------- ----------
Change in net assets derived from
capital share transactions 16,796,179 --
---------- ----------
Increase (decrease) in net assets 17,577,281 --
Net assets:
Beginning of year -- --
---------- ----------
End of year $17,577,281 --
========== ==========
Undistributed net investment
income included in net assets $32,804 --
========== ==========
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND
Financial Highlights
Six Months Ended June 30, 1999 and the Year Ended December 31
(Unaudited)
------------------------------- MONEY MARKET FUND ---------------------------------
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.02 0.05 0.05 0.05 0.05
-----------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.02) (0.05) (0.05) (0.05) (0.05)
-----------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
====================================================================================================================================
Total Return* 2.22% 4.61% 4.75% 5.17% 5.21%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $63,338 $56,416 $41,170 $21,011 $11,374
Ratio of Expenses to Average Net Assets** 0.45% 0.45% 0.50% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 4.44% 4.99% 5.05% 4.74% 5.17%
====================================================================================================================================
</TABLE>
For the Money Market Fund, the "seven-day average" yield for the seven days
ended June 30, 1999, was 4.53% and the "effective" yield for that period was
4.63%.
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. If the Expense Reimbursement Agreement had not been
in effect and if the full expenses allowable under the Investment Advisory
Agreement between the Ultra Series Fund and the Investment Adviser had been
charged, the resulting ratio of expenses to average net assets would have
been 0.51%, 0.67%, and 0.73% for 1997, 1996, and 1995, respectively
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND
Financial Highlights
Six Months Ended June 30, 1999 and the Year Ended December 31
(Unaudited)
---------------------------------- TREASURY 2000 FUND ------------------------------
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period) 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $9.93 $9.24 $8.64 $8.47 $7.00
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income -- 0.58 0.58 0.58 0.58
Net Realized and Unrealized Gain (Loss)
on Investments 0.10 0.11 0.02 (0.41) 0.89
------ ------ ------ ------ ------
Total from Investment Operations 0.10 0.69 0.60 0.17 1.47
------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income -- -- -- -- --
Distributions from Realized Capital Gains -- -- -- -- --
------ ------ ------ ------ ------
Total Distributions -- -- -- -- --
------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.03 $9.93 $9.24 $8.64 $8.47
====================================================================================================================================
Total Return* 1.00% 7.52% 6.85% 2.10% 20.99%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,854 $1,836 $1,701 $1,585 $1,545
Ratio of Expenses to Average Net Assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of Net Investment Income to Average
Net Assets 5.70% 6.01% 6.56% 7.03% 7.40%
====================================================================================================================================
</TABLE>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
<PAGE>
<TABLE>
<CAPTION>
BOND FUND
Financial Highlights
Six Months Ended June 30, 1999 and the Year Ended December 31
(Unaudited)
---------------------------------------- BOND FUND ---------------------------------
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.57 $10.54 $10.33 $10.63 $9.67
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.30 0.63 0.54 0.65 0.60
Net Realized and Unrealized Gain (Loss)
on Investments (0.33) 0.02 0.20 (0.28) 0.96
------ ------ ------ ------ ------
Total from Investment Operations (0.03) 0.65 0.74 0.37 1.56
------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.14) (0.62) (0.51) (0.64) (0.59)
Distributions from Realized Capital Gains -- -- (0.02) (0.03) (0.01)
------ ------ ------ ------ ------
Total Distributions (0.14) (0.62) (0.53) (0.67) (0.60)
------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.40 $10.57 $10.54 $10.33 $10.63
====================================================================================================================================
Total Return* (0.25%) 6.18% 7.45% 2.86% 16.37%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $240,139 $228,281 $188,840 $26,572 $13,725
Ratio of Expenses to Average Net Assets** 0.55% 0.55% 0.56% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 5.50% 5.94% 6.50% 6.25% 6.08%
Portfolio Turnover Rate 328.64% 142.98% 30.71% 25.67% 14.74%
====================================================================================================================================
</TABLE>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. If the Expense Reimbursement Agreement had not been
in effect and if the full expenses allowable under the Investment Advisory
Agreement between the Ultra Series Fund and the Investment Adviser had been
charged, the resulting ratio of expenses to average net assets would have
been 0.57%, 0.67%, and 0.68% for 1997, 1996, and 1995, respectively.
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND
Financial Highlights
Six Months Ended June 30, 1999 and the Year Ended December 31
(Unaudited)
------------------------------------- BALANCED FUND --------------------------------
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $18.74 $17.02 $15.29 $14.63 $12.90
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.25 0.57 0.62 0.58 0.55
Net Realized and Unrealized Gain (Loss)
on Investments 1.67 1.72 1.93 0.98 2.29
------ ------ ------ ------ ------
Total from Investment Operations 1.92 2.29 2.55 1.56 2.84
------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.13) (0.57) (0.63) (0.58) (0.55)
Distributions from Realized Capital Gains -- -- (0.19) (0.32) (0.56)
------ ------ ------ ------ ------
Total Distributions (0.13) (0.57) (0.82) (0.90) (1.11)
------------------------------------------------------------------------------------
Net Asset Value, End of Period $20.53 $18.74 $17.02 $15.29 $14.63
====================================================================================================================================
Total Return* 10.23% 13.40% 16.87% 10.79% 22.27%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $548,020 $449,992 $309,804 $194,725 $110,969
Ratio of Expenses to Average Net Assets** 0.69% 0.70% 0.68% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 2.64% 3.20% 3.81% 3.91% 4.03%
Portfolio Turnover Rate 127.37% 78.71% 21.15% 33.48% 36.68%
====================================================================================================================================
</TABLE>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. If the Expense Reimbursement Agreement had not been
in effect and if the full expenses allowable under the Investment Advisory
Agreement between the Ultra Series Fund and the Investment Adviser had been
charged, the resulting ratio of expenses to average net assets would have
been 0.69%, 0.65%, and 0.68% for 1997, 1996, and 1995, respectively.
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND
Financial Highlights
Six Months Ended June 30, 1999 and the Year Ended December 31
(Unaudited)
------------------------ GROWTH AND INCOME STOCK FUND -----------------------------
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $30.56 $27.20 $21.32 $18.20 $15.06
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.17 0.34 0.31 0.34 0.37
Net Realized and Unrealized Gain (Loss)
on Investments 6.10 4.52 6.36 3.93 4.37
------ ------ ------ ------ ------
Total from Investment Operations 6.27 4.86 6.67 4.27 4.74
-----------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.09) (0.34) (0.32) (0.34) (0.37)
Distributions from Realized Capital Gains (0.14) (1.16) (0.47) (0.81) (1.23)
------ ------ ------ ------ ------
Total Distributions (0.23) (1.50) (0.79) (1.15) (1.60)
-----------------------------------------------------------------------------------
Net Asset Value, End of Period $36.60 $30.56 $27.20 $21.32 $18.20
====================================================================================================================================
Total Return* 20.57% 17.92% 31.42% 22.02% 31.75%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,065,565 $833,174 $590,135 $232,841 $102,138
Ratio of Expenses to Average Net Assets** 0.60% 0.60% 0.61% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 1.04% 1.17% 1.39% 1.78% 2.28%
Portfolio Turnover Rate 12.10% 17.69% 20.39% 40.55% 57.80%
====================================================================================================================================
</TABLE>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. If the Expense Reimbursement Agreement had not been
in effect and if the full expenses allowable under the Investment Advisory
Agreement between the Ultra Series Fund and the Investment Adviser had been
charged, the resulting ratio of expenses to average net assets would have
been 0.61%, 0.65%, and 0.69% for 1997, 1996, and 1995, respectively.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND
Financial Highlights
Six Months Ended June 30, 1999 and the Year Ended December 31
(Unaudited)
-------------------------- CAPITAL APPRECIATION STOCK FUND --------------------------
<S> <C> <C> <C> <C> <C>
(For a share outstanding throughout the period): 1999 1998 1997 1996 1995
Net Asset Value, Beginning of Period $22.19 $18.85 $14.60 $12.51 $9.97
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.01 0.06 0.07 0.13 0.14
Net Realized and Unrealized Gain (Loss)
on Investments 2.82 3.87 4.52 2.55 2.91
------ ------ ------ ------ ------
Total from Investment Operations 2.83 3.93 4.59 2.68 3.05
-------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.01) (0.06) (0.07) (0.13) (0.14)
Distributions from Realized Capital Gains (0.01) (0.53) (0.27) (0.46) (0.37)
------ ------ ------ ------ ------
Total Distributions (0.02) (0.59) (0.34) (0.59) (0.51)
-------------------------------------------------------------------------------------
Net Asset Value, End of Period $25.00 $22.19 $18.85 $14.60 $12.51
====================================================================================================================================
Total Return* 12.78% 20.90% 31.57% 21.44% 30.75%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $730,286 $630,373 $456,194 $98,674 $38,117
Ratio of Expenses to Average Net Assets** 0.79% 0.80% 0.82% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets 0.10% 0.31% 0.70% 0.96% 1.37%
Portfolio Turnover Rate 21.63% 18.67% 17.06% 49.77% 61.32%
====================================================================================================================================
</TABLE>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to May 1, 1997, CUNA Mutual Life Insurance
Company and its affiliates absorbed certain expenses under the terms of an
Expense Reimbursement Agreement between the Ultra Series Fund and CUNA Mutual
Life Insurance Company. If the Expense Reimbursement Agreement had not been
in effect and if the full expenses allowable under the Investment Advisory
Agreement between the Ultra Series Fund and the Investment Adviser had been
charged, the resulting ratio of expenses to average net assets would have
been 0.83%, 0.66%, and 0.75% for 1997, 1996, and 1995, respectively.
<PAGE>
<TABLE>
<CAPTION>
MID-CAP STOCK FUND
Financial Highlights
Six Months Ended June 30, 1999 and the Year Ended December 31
(Unaudited)
---------------------------------- MID-CAP STOCK FUND -------------------------------
<S> <C>
(For a share outstanding throughout the period) 1999
Net Asset Value, Beginning of Period $10.00
------
Income from Investment Operations
Net Investment Income 0.02
Net Realized and Unrealized Gain (Loss)
on Investments 0.45
------
Total from Investment Operations 0.47
-------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income --
Distributions from Realized Capital Gains --
------
Total Distributions --
-------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.47
====================================================================================================================================
Total Return* 4.70%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $17,577
Ratio of Expenses to Average Net Assets 0.95%
Ratio of Net Investment Income to Average
Net Assets 1.26%
Portfolio Turnover Rate 0.88%
====================================================================================================================================
</TABLE>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
<PAGE>
ULTRA SERIES FUND
Notes to Financial Statements
(1) Description of the Fund
The Ultra Series Fund (the "Fund"), a Massachusetts Business Trust, is
registered under the Investment Company Act of 1940 (the "1940 Act"), as
amended, as a diversified, open-end management investment company. The Fund
is a series fund with seven investment portfolios (the "funds"), each with
different investment objectives and policies and each having available two
separate classes of common stock with a par value of $.01 per share. Fund
shares are sold and redeemed at a price equal to the shares' net asset
value. The assets of each fund are held separate from the assets of the
other funds.
Effective May 1, 1997, the shares of each fund were divided into Class Z
and Class C Shares. Class Z Shares are offered to all insurance company
separate accounts issued by, and all qualified retirement plans sponsored
by, CUNA Mutual Life Insurance Company or its affiliates ("CUNA Mutual
Life"). Class C Shares are offered to separate accounts of insurance
companies other than CUNA Mutual Life, and to qualified retirement plans of
companies not affiliated with the Fund or CUNA Mutual Life. Both classes of
shares are identical in all respects except that: Class C Shares may be
subject to a distribution fee (note 4); each class will have exclusive
voting rights with respect to matters that affect just that class; and each
class will bear a different name or designation. All income earned and
expenses incurred by the Fund are borne on a pro-rata basis by each
outstanding share of each class based on the daily net asset value of
shares of that class. As of June 30, 1999, no Class C Shares have been
issued.
(2) Significant Accounting Policies
(a) Valuation of Investment Securities
Portfolio securities for which market quotations are readily available
are valued at current market value. If market quotations or valuations
are not available, or if such quotations or valuations are believed to
be inaccurate, unreliable or not reflective of market value, portfolio
securities are valued according to procedures adopted by the funds'
board of trustees in good faith at fair value.
Pricing services value domestic and foreign equity securities (and
occasionally fixed-income securities) traded on a securities exchange
or Nasdaq at the last reported sale price, up to the time of valuation.
If there are no reported sales of a security on the valuation date, it
is valued at the mean between the published bid and asked prices
reported by the exchange or Nasdaq. If there are no sales and no
published bid and asked quotations for a security on the valuation date
or the security is not traded on an exchange or Nasdaq, the pricing
service may obtain market quotations directly from broker-dealers.
Fixed-income securities are valued at prices obtained from a pricing
service, when such prices are available. In circumstances where prices
are not available from the fund's pricing service, securities may be
valued using market quotations obtained from one or more dealers or a
quotation system. Short-term securities with maturities of 60 days or
less are valued at amortized cost, which approximates market value.
(b) Share Valuation and Dividends to Shareholders
The net asset value of the shares of each fund is determined on a daily
basis based on the valuation of the net assets of the funds divided by
the number of shares of the fund outstanding. Expenses, including the
investment advisory, advisory/administrative, and distribution fees
(note 4), are accrued daily and reduce the net asset value per share.
Dividends on the Money Market Fund will be declared and reinvested
daily in additional full and fractional shares of the Money Market
Fund. Dividends of ordinary income from the Bond Fund, Balanced Fund,
Growth and Income Stock Fund, Capital Appreciation Stock Fund, and
Mid-Cap Stock Fund will be declared and reinvested quarterly in
additional full and fractional shares of the respective funds. All net
realized capital gains of these funds, if any, will be declared and
reinvested at least annually. The Treasury 2000 Fund will utilize an
annual consent dividend procedure which provides the fund with the
deduction for dividends constructively paid to shareholders.
(c) Federal Income Taxes
Each fund intends to distribute all of its taxable income and to comply
with the other requirements of the Internal Revenue Code applicable to
regulated investment companies. Accordingly, no provision for income or
excise taxes is required.
Net investment income and net realized gains (losses) for the funds may
differ for financial statement and tax purposes. 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. 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) were
recorded by the funds.
<PAGE>
For federal income tax purposes, at December 31, 1998, the Balanced
Fund had a capital loss carryover of $2,476,442 that will expire in the
year 2006 if not offset by subsequent capital gains. It is unlikely
that the Board of Trustees will authorize a distribution of any net
realized capital gains until the available capital loss carryover has
been offset or expires.
(d) Security Transactions and Investment Income
Security transactions are recorded on the trade date basis. Realized
gains and losses from security transactions are reported on the
identified cost basis. Interest, including amortization of premium and
discount, is accrued daily and dividend income is recorded on the
ex-dividend date.
(e) 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.
(f) Change in Certifying Accountant
On June 14, 1999 KPMG LLP resigned as independent accountants for the
MEMBERS Mutual Funds and Ultra Series Fund (the "Funds"). KPMG's
reports for the Funds' financial statements for the past two years have
not contained any adverse opinion or disclaimer of opinion and have not
been qualified as to uncertainty, audit scope or accounting principles.
In addition there have not been any disagreements with KPMG during the
Funds' two most recent fiscal years on any matter of accounting
principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to the satisfaction of KPMG,
would have caused it to make a reference to the subject matter of the
disagreement in connection with it's reports. The Funds' board of
directors, upon the recommendation of the audit committee, appointed
PricewaterhouseCoopers LLP as independent accountants for the Funds on
June 15, 1999 for the upcoming fiscal year.
(3) Purchase and Sales of Investment Securities
The cost of securities purchased and the proceeds from securities sold
(including maturities, excluding short-term securities for all funds except
Money Market) for each fund during the six-month period ended June 30,
1999, were as follows:
<TABLE>
<CAPTION>
Money Treasury Growth and Capital Mid-Cap
Market 2000 Bond Balanced Income Stock Appreciation Stock
Fund Fund Fund Fund Fund Stock Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Total costs of securities
purchased $230,275,127 $ -- $801,232,736 $691,039,762 $159,813,265 $153,071,516 $16,057,185
=========== ========== =========== =========== =========== =========== ===========
Total proceeds received
on security sales and
principal paydowns $229,286,222 $ -- $807,567,356 $651,917,353 $114,435,585 $146,798,382 $145,770
=========== ========== =========== =========== =========== =========== ===========
</TABLE>
(4) Transactions with Affiliates
Fees and Expenses
The Fund has entered into an investment advisory agreement with CIMCO Inc.
(the "Investment Adviser"), an affiliated company. The fees under the
agreement, paid monthly, are calculated as a percentage of the average
daily net assets for each portfolio at the following annual rates:
Money Market 0.45%
Treasury 2000 0.45%
Bond 0.55%
Balanced 0.70%
Growth and Income Stock 0.60%
Capital Appreciation Stock 0.80%
Mid-Cap Stock 1.00%
Under this unified fee structure, the Investment Adviser is responsible for
providing or obtaining services and paying certain expenses including
custodian fees, transfer agent fees, pricing costs, and accounting and
legal fees as indicated in the investment advisory agreement.
The Investment Advisor has entered into a Subadvisor Agreement for the
management of a portion of the investments in the Mid-Cap Stock Fund. The
Investment Advisor is solely responsible for the payment of all fees to the
Subadvisor. The Subadvisor for this Fund is Heartland Advisors, Inc.
In addition to the unified investment advisory fee and Subadvisor
Agreement, each fund also pays certain expenses including trustees fees,
brokerage commissions, interest expense, audit fees, and other
extraordinary expenses.
All capital shares outstanding at June 30, 1999, are owned by separate
investment accounts of CUNA Mutual Life.
Certain officers and directors of the Fund are also officers of CUNA Mutual
Life or CIMCO Inc. During the six-month period ended June 30, 1999, the
Fund made no direct payments to its officers and paid trustees' fees of
approximately $7,934 to its unaffiliated trustees.
<PAGE>
Distribution Plan
All shares are distributed through CUNA Brokerage Service, Inc.("CBS"), and
affiliated company, or other registered broker-dealers authorized by CBS.
Class C Shares may also be subject to an asset-based distribution fee
pursuant to Rule 12b-1 under the 1940 Act, equal to not more than 0.25%, on
an annual basis, of the average value of the daily net assets of each
series of the Fund attributable to Class C Shares on an annual basis.
(5) Share Activity
<TABLE>
<CAPTION>
Transactions in Class Z Shares of each fund for the year ended December 31, 1998 and for the six-month period ended June 30,
1999, were as follows:
Money Treasury Growth and Capital Mid-Cap
Market 2000 Bond Balanced Income Stock Appreciation Stock
Fund Fund Fund Fund Fund Stock Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Shares outstanding at
December 31, 1997 41,170,152 184,138 17,909,312 18,199,350 21,692,803 24,200,359
Shares sold, including
reinvestment of
dividends 47,516,500 732 4,043,397 6,194,436 5,984,581 4,353,976
Shares repurchased (32,270,164) -- (353,989) (375,123) (413,009) (142,237)
---------- -------- --------- --------- --------- ---------
Shares outstanding at
December 31, 1998 56,416,488 184,870 21,598,720 24,018,663 27,264,375 28,412,098
---------- -------- --------- --------- --------- ---------
Shares sold, including
reinvestment of
dividends 26,277,052 -- 1,945,563 2,857,120 2,178,974 1,420,861 1,685,515
Shares repurchased (19,355,952) -- (453,534) (182,970) (326,398) (622,311) (6,619)
---------- -------- --------- --------- --------- --------- --------
Shares outstanding at
June 30, 1999 63,337,588 184,870 23,090,749 26,692,813 29,116,951 29,210,648 1,678,896
</TABLE>
<PAGE>
ULTRA SERIES FUND
Officers and Trustees
OFFICERS BOARD OF TRUSTEES
Michael S. Daubs, President Gwendolyn M. Boeke
Lawrence R. Halverson, Vice President Michael S. Daubs
Thomas J. Merfeld, Secretary Alfred L. Disrud
Mary E. Hoffmann, Treasurer Lawrence R. Halverson
Michael G. Joneson, Assistant Secretary Keith S. Noah
Robert M. Buckingham, Assistant Secretary Thomas C. Watt
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