Retirement
Annuity Mutual Funds
1999 semiannual report
Funds with separate
goals and objectives
to provide investment
flexibility with no initial sales charge.
American Express Financial Advisors
Managed by IDS Life Insurance Company
<PAGE>
The Retirement Annuity Mutual Funds provide several alternatives to consider for
investment through your annuity contracts.
Contents
From the chairman 3
Capital Resource Fund
From the portfolio manager 4
The 10 largest holdings 5
Special Income Fund
From the portfolio manager 6
The 10 largest holdings 7
Managed Fund
From the portfolio managers 8
The 10 largest holdings 9
Moneyshare Fund
From the portfolio manager 10
International Equity Fund
From the portfolio manager 11
The 10 largest holdings 12
Aggressive Growth Fund
From the portfolio manager 13
The 10 largest holdings 14
Global Yield Fund
From the portfolio manager 15
The 10 largest holdings 16
Growth Dimensions Fund
From the portfolio manager 17
The 10 largest holdings 18
Income Advantage Fund
From the portfolio manager 19
The 10 largest holdings 20
All Funds
Financial statements 21
Notes to financial statements 32
Investments in securities 52
<PAGE>
To our contract owners
From the chairman
It is an honor for me to join the IDS Mutual Fund Group as chairman of the board
and chief executive officer for each of the funds. I have served for the past
eight years as governor of Minnesota and also for the past 20 years as a
constitutional officer responsible for the pension investments made on behalf of
government employees. My responsibility in the upcoming years is to serve your
interests.
By law, half the members of a mutual fund board must be independent of their
investment manager and distributor. I am one of those persons. I am not an
employee of American Express Financial Corporation (AEFC), nor do I own stock in
American Express Company. Both are fine companies, but the law clearly states
that to fully represent your interests I must be independent.
Having said that, I have a great deal of respect for the capabilities of AEFC
and for the services it provides to investors. Your financial advisor assists
you in financial planning, conducts regular investment reviews and responds to
your questions and needs. This is a very personal service that makes AEFC a
partner in your financial future. I know that AEFC has an investment focus on
the long-term performance of our economy and that it wants you to participate in
that growth. Consistent with that, our board is here to serve you and represent
your interests in a professional manner.
Arne H. Carlson
(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
<PAGE>
To our contract owners
Capital Resource Fund
From the portfolio manager
The Fund took advantage of a resounding recovery by the stock market to post an
unusually strong gain during the first half of the fiscal year. For the six
months -- September 1998 through February 1999 -- the Fund's value increased
31.44%. (This figure does not reflect expenses that apply to the variable
accounts, subaccounts, or the annuity contract.)
When the period began, stock investors were still licking their wounds suffered
during a late-summer nosedive that took the market down by nearly 20% and cut
some stocks' prices by as much as 50%. But, with the remarkable resilience that
has been its hallmark in recent years, the market soon righted itself and set
out to regain the lost ground.
Supported along the way by three reductions in short-term interest rates by the
Federal Reserve Board, stocks not only recouped their losses by fall's end but
went on to establish a new all-time high by early January. The rally petered out
over the final six weeks of the period, as stocks finally took a break from
their spectacular climb.
To the Fund's advantage, most of the market's surge was spurred by
large-capitalization growth stocks of companies with strong, if not dominant,
positions in their industries. Especially productive were technology stocks,
including Cisco Systems, EMC, Texas Instruments, Solectron, IBM and Intel, all
of which were among the Fund's larger holdings during the six months.
Pharmaceuticals also made a solid contribution, with Guidant, Pfizer and Merck
among the best performers. Another substantial area of investment was retailing,
which saw Wal-Mart, Fred Meyer and The Gap make healthy gains. The results for
financial services stocks, a relatively small exposure for the Fund, were mixed
but, on the whole, positive. I made only minor changes to the portfolio over the
period, adding somewhat to technology while reducing financial services a bit. I
kept cash reserves quite low, preferring to keep the vast majority of the
portfolio invested in stocks.
Looking toward the rest of the fiscal year, while the investment environment
remains reasonably good, I think any stock gains will likely be rather modest
compared with what we enjoyed during the past six months. As for the Fund, I
expect to keep the portfolio structure largely intact unless there is a
meaningful change in the types of stocks that have provided leadership for the
market.
Joseph M. Barsky
(picture of) Joseph M. Barsky
Joseph M. Barsky
Portfolio Manager
<PAGE>
The 10 largest holdings
Capital Resource Fund
Percent Value
(of net assets) (as of Feb. 28, 1999)
Microsoft 2.96% $165,137,499
General Electric 2.88 160,500,000
Tyco Intl 2.67 148,875,000
Safeway 2.38 132,825,000
Wal-Mart Stores 2.32 129,562,500
Gap 2.09 116,437,500
Merck & Co 2.05 114,450,000
Intel 1.94 107,943,750
Texas Instruments 1.92 107,025,000
Dayton Hudson 1.91 106,356,250
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 23.12% of net assets
<PAGE>
To our contract owners
Special Income Fund
From the portfolio manager
A gradually improving environment for corporate, mortgage-backed and
emerging-market bonds helped the Fund produce positive results for the first
half of the fiscal year. For the six months -- September 1998 through February
1999 -- the Fund's value increased 2.36%. (This figure does not reflect expenses
that apply to the variable accounts, subaccounts, or the annuity contract.)
At the outset of the period, most sectors of the bond market were still feeling
the effects of last summer's "flight to quality" that stemmed from economic
turmoil in Asia, Russia and parts of Latin America. That condition resulted in a
big boost in price for U.S. Treasury bonds at the expense of corporate,
mortgage-backed and emerging-market issues.
But by autumn, the mood of the market began to change. Encouraged by three
reductions in short-term interest rates by the Federal Reserve, investors
decided that it was time to venture outside the ultra-safe world of Treasuries.
The result was generally rising prices for the Fund's high-grade corporate and
mortgage-backed holdings. The trend that continued through the winter until it
was reversed by a run-up in long-term interest rates in February.
A sore spot in previous months, low-grade corporate and emerging-market bonds
also enjoyed improving performance during the final few months of the period. In
the case of low-grades, ongoing economic strength in the U.S. provided a boost
to prices, while a return to relative economic stability in emerging markets (in
the case of the Fund's investments, Argentina, Korea and Mexico and Russia)
proved beneficial for values among those bonds.
As for the rest of the fiscal year, with inflation remaining remarkably low, I
think it's unlikely that interest rates will rise substantially. Largely stable
rates would provide a solid foundation for the bond market as a whole, which in
turn would be good for Fund performance.
Steven C. Merrell
(picture of) Steven C. Merrell
Steven C. Merrell
Portfolio Manager
<PAGE>
The 10 largest holdings
Special Income Fund
Percent Value
(of net assets) (as of Feb. 28, 1999)
Hydro-Quebec 1.30% $24,386,731
8.50% 2029
Time Warner 1.15 21,606,868
7.57% 2024
United Kingdom Treasury .92 17,147,234
8.00% 2003
Bank One .78 14,573,371
6.00% 2009
Qwest Communications Intl .75 13,978,749
7.50% 2008
Wal-Mart CRAVE Trust .66 12,400,669
7.00% 2006
Nationwide CSN Trust .66 12,390,235
9.88% 2025
Govt of Canada .66 12,351,687
10.50% 2001
Morgan (JP) .64 11,901,477
4.00% 2012
Cleveland Electric Illuminating .63 11,758,704
9.50% 2005
Excludes U.S. Treasury and government agency holdings.
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 8.15% of net assets
<PAGE>
To our contract owners
Managed Fund
From the portfolio managers
A strong rebound by the U.S. stock market set the stage for a substantial gain
by the Fund during the first half of the fiscal year. For the six months --
September 1998 through February 1999 -- the Fund's value appreciated 18.78%.
(This figure does not reflect expenses that apply to the variable accounts,
subaccounts, or the annuity contract.)
When the period began last fall, stocks were in the final stage of a late-summer
downturn that ultimately drove the market down by nearly 20%. But before
investors had time to fully assess the damage, stocks scrambled to their feet
and, with another display of the remarkable resilience they've shown in recent
years, started to move forward. Soon, buoyed by three reductions in short-term
interest rates by the Federal Reserve, the advance turned into a roaring rally
that continued until February, when a rise in long-term interest rates and
concerns about the strength of corporate profits sent stocks into a modest
retreat.
The Fund's performance was similarly consistent, as the Fund racked up five
straight months of solid gains before tailing off. Leading the way were holdings
among large-capitalization stocks, particularly in the technology, health care,
consumer product and financial services groups. Prominent performers included
General Electric, MCI WorldCom, Merck, Microsoft, Washington Mutual, Intel and
Cisco Systems.
There was less excitement on the bond side, but in the end it turned out to be a
positive period for those securities. Looking at the Fund's core holdings,
corporate bonds performed best, thanks largely to ongoing strength in the
economy, while U.S. Treasury issues were hindered by an overall rise in
long-term interest rates. Although only a minor part of the Fund's portfolio,
bond holdings in small foreign markets enjoyed better results and, thus, helped
performance.
As the second half of the fiscal year begins, the asset allocation is about 65%
stocks and 35% bonds, with the great majority of the holdings in the U.S. Unless
there is a marked change in the investment environment, we expect to stay
roughly with that mix in the months ahead.
Alfred Henderson
(picture of) Alfred Henderson
Alfred Henderson
Portfolio Manager
Deborah L. Pederson
(picture of) Deborah L. Pederson
Deborah L. Pederson
Portfolio Manager
<PAGE>
The 10 largest holdings
Managed Fund
Percent Value
(of net assets) (as of Feb. 28, 1999)
MCI WorldCom 2.57% $130,691,962
General Electric 2.47 125,390,625
Citigroup 2.08 105,749,999
Microsoft 2.03 103,285,999
Merck & Co 1.77 89,924,999
Cisco Systems 1.72 87,419,922
Home Depot 1.68 85,054,687
Washington Mutual 1.50 76,000,000
Tyco Intl 1.47 74,484,023
AirTouch Communications 1.43 72,849,999
Excludes U.S. Treasury and government agency holdings.
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 18.72% of net assets
<PAGE>
To our contract owners
Moneyshare Fund
From the portfolio manager
Moneyshare Fund's yield declined somewhat during the first half of the fiscal
year (September 1998 through February 1999), reflecting a drop in short-term
interest rates over the period.
For the seven-day period ended Feb. 26, 1999, the Fund's compound annualized
yield was 4.53%, and the simple annualized yield was 4.43%. In keeping with its
objective, the Fund maintained a $1 per share price throughout the six months.
(An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.)
Despite ongoing solid economic growth, inflation remained remarkably low during
the period. In recent years, these factors led the Federal Reserve Board to
leave short-term interest rates virtually unchanged. But this past fall, with
financial chaos in Asia, Russia and parts of Latin America threatening to
severely restrict worldwide lending, the Fed reduced rates three times in less
than three months.
(By way of background, the Fed usually adjusts short-term interest rates based
on the condition of the economy and the inflation outlook. When the economy
appears weak and inflation is low, the Fed often lowers rates to stimulate
economic growth. When the economy is strong, the Fed often raises rates to reign
in economic growth and thereby keep inflation in check.)
In response to the Fed's interest-rate cuts, issuers of commercial paper -- the
core of the Fund's investment portfolio -- also lowered the interest on their
securities. Therefore, the yield on the Fund declined as well. To combat that, I
added more longer-term securities, a strategy that increases the portfolio's
average maturity and, in turn, the yield.
Looking to the second half of the fiscal year, with the economy continuing to
show robust growth, I think it's unlikely that the Fed will follow up with
additional interest-rate reductions. Of course, renewed financial turmoil
overseas could change that scenario, as it did last year. But at this point
(mid-March) I plan to structure the portfolio based on a largely stable
interest-rate environment.
Terry Fettig
(picture of) Terry Fettig
Terry Fettig
Portfolio manager
<PAGE>
To our contract owners
International Equity Fund
From the portfolio manager
Generally strong stock markets in Europe provided the foundation for a healthy
gain by the Fund during the past six months. For the first half of the fiscal
year -- September 1998 through February 1999 -- the Fund's value increased by
10.25%. (This figure does not reflect expenses that apply to the variable
accounts, subaccounts, or the annuity contract.)
The period actually got off to a bad start, as financial woes in several
emerging economies and the collapse of a so-called "hedge" fund fostered worries
that stock markets around the globe might soon come under heavy selling
pressure. European markets were particularly affected, causing the Fund to lose
more than 8% of its value in September.
But, thanks in part to repeated interest-rate cuts in the United States and
Europe, those concerns quickly faded, allowing the markets and the Fund to begin
advancing. In fact, by the end of October, the Fund had made up all of the lost
ground and was on its way to recording four straight months of solid gains. The
run eventually came to an end in February, when a rise in long-term interest
rates drove European markets into a modest retreat.
The great bulk of the portfolio (up to about 80%) remained invested in those
markets over the six months. They included the United Kingdom, Germany, Italy,
France, Spain, Switzerland and the Netherlands. For the most part, I
concentrated on stocks of companies undergoing corporate restructuring --
strengthening their business positions through cost reduction and other
streamlining efforts. As for specific stock sectors, the greatest emphasis was
on banking and telecommunications, which at times accounted for as much as 40%
of the investments and made the biggest contributions to Fund performance.
As for the rest of the fiscal year, I continue to believe the best opportunity
for gain lies in Europe, where many stocks offer a combination of good corporate
profit growth and still-reasonable prices. Reflecting that view, the portfolio
remains heavily concentrated in those markets.
Peter Lamaison
(picture of) Peter Lamaison
Peter Lamaison
Portfolio Manager
<PAGE>
The 10 largest holdings
International Equity Fund
Percent Value
(of net assets) (as of Feb. 28, 1999)
Telecom Italia (Italy) 7.01% $149,689,936
Mannesmann (Germany) 4.17 89,134,055
UBS (Switzerland) 3.44 73,561,537
Ericsson (LM) Cl B (Sweden) 3.41 72,879,354
General Electric (United Kingdom) 3.23 69,069,759
Vodafone (United Kingdom) 3.19 68,178,837
Henkel KGaA (Germany) 2.82 60,342,340
Banque Natl de Paris (France) 2.81 60,009,746
Credito Italiano (Italy) 2.78 59,289,139
Suez Lyonnaise des Eaux (France) 2.76 59,051,390
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 35.62% of net assets
<PAGE>
To our contract owners
Aggressive Growth Fund
From the portfolio manager
A strong rebound by the stock market set the stage for a substantial gain by the
Fund during the first half of the fiscal year. For the six months -- September
1998 through February 1999 -- the Fund's value appreciated 18.85%. (This figure
does not reflect expenses that apply to the variable accounts, subaccounts, or
the annuity contract.)
The period began with stocks trying to regroup from a steep, late-summer decline
that drove down the broad market by nearly 20% and cut prices on certain stocks
roughly in half. But investors barely had time to total up their losses before
the market started to move forward. Supported by three reductions in short-term
interest rates by the Federal Reserve Board during the fall, stocks turned a
tentative advance into a roaring rally that, by the end of November, made up the
lost ground and ultimately propelled the market to an all-time high in early
January. Although stocks cooled off quickly in February, their performance for
the six months as a whole could hardly have been more impressive.
Consistent with the pattern of recent years, stocks of large, fast-growing
companies ("large-caps") most often led the market's resurgence. While that
worked to the disadvantage of this Fund, which concentrates on small- and
mid-cap stocks, the overall positive tone of the market was good for Fund
performance. The biggest contributors to the Fund's gain were technology-related
stocks, which, because of additional investments and price run-ups among several
holdings, accounted for as much as 50% of the Fund's portfolio during the
winter. Most of the rest of the portfolio was spread among stocks in the health
care, retailing and biotechnology sectors.
As for changes to the portfolio, in an effort to protect the Fund's value from
an ongoing downturn in the market, I raised the level of cash reserves
considerably in early fall. However, when it appeared that the market had
regained positive momentum, I put nearly all of that cash to work in stocks -- a
strategy that enhanced Fund performance in the ensuing months. Beyond that, I
added to holdings among retailers and Internet-related companies, which also
worked to the Fund's benefit.
As the second half of the fiscal year begins, small- and mid-cap stocks continue
to lag the performance of their bigger brethren. I expect that difference to be
made up at some point, and I'm keeping the Fund invested to take advantage of a
potential turnaround in that trend.
Martin G. Hurwitz
(picture of) Martin G. Hurwitz
Martin G. Hurwitz
Portfolio manager
<PAGE>
The 10 largest holdings
Aggressive Growth Fund
Percent Value
(of net assets) (as of Feb. 28, 1999)
Watson Pharmaceuticals 1.71% $38,166,874
Knight/Trimark Group Cl A 1.48 33,012,500
MCI WorldCom 1.48 33,000,000
Uniphase 1.44 32,165,624
Outdoor Systems 1.44 32,128,125
Cisco Systems 1.41 31,544,530
Metzler Group 1.39 31,024,999
Safeway 1.29 28,874,999
Mercury Interactive 1.29 28,841,562
Micron Technology 1.16 25,931,250
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 14.09% of net assets
<PAGE>
To our contract owners
Global Yield Fund
From the portfolio manager
An improving environment for bonds in most major markets led to a productive six
months for the Fund. For the first half of the fiscal year -- September 1998
through February 1999 -- the Fund's value appreciated 4.23%. (This figure does
not reflect expenses that apply to the variable accounts, subaccounts, or the
annuity contact.)
The period got off to a strong start, as a decline in long-term interest rates
boosted bond values in the U.S. and Europe, where the great majority of the
assets were invested. Although rates soon leveled off, major-market bonds held
their own during the winter, while emerging-market bonds rebounded nicely from
their debacle in the late summer of last year. The six months ended on a down
note, however, as a run-up in rates penalized bond values during February.
On the currency front, the dollar lost considerable ground against European
currencies early in the period, then recovered over the ensuing months. Overall,
currency fluctuations had a slightly positive effect on the Fund's performance
for the period as a whole.
U.S. bonds, chiefly Treasury issues, made up the bulk of the investments (as
much as 58%), followed by European (about 40%) and emerging-market issues (about
10%). I essentially avoided the Japanese bond market, which continued to
struggle in the face of ongoing economic weakness.
Looking toward the second half of the fiscal year, I expect to increase the
investment exposure to Europe at some point, based on my belief that European
bonds offer good value. The main exposure, however, will probably remain to be
the U.S., whose government bonds not only provide unsurpassed quality but hold
promise for price appreciation should interest rates come down. Finally, I plan
to gradually reduce holdings in the emerging markets (largely Korea, Hong Kong
and Mexico), especially if bond prices in those regions rise further.
Michael Ng
(picture of) Michael Ng
Michael Ng
Portfolio manager
<PAGE>
The 10 largest holdings
Global Yield Fund
Percent Value
(of net assets) (as of Feb. 28, 1999)
United Kingdom Treasury 3.13% $6,389,600
8.00% 2003
Govt of Norway 3.04 6,213,073
7.00% 2001
Federal Republic of Germany 2.80 5,727,842
6.50% 2027
United Kingdom Treasury 2.60 5,303,095
8.50% 2005
Govt of Denmark 2.26 4,617,403
7.00% 2024
Govt of Sweden 1.97 4,023,979
8.00% 2007
Govt of Canada 1.82 3,725,582
8.00% 2023
Federal Republic of Germany 1.82 3,724,362
6.00% 2016
Govt of Italy 1.79 3,655,555
8.50% 2004
Federal Republic of Germany 1.78 3,646,055
7.50% 2004
Excludes U.S. Treasury and government agency holdings.
Note: Certain foreign investment risks include: changes in currency
exchange rates, adverse political or economic order, and lack of similar
regulatory requirements followed by U.S. companies.
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 23.01% of net assets
<PAGE>
To our contract owners
Growth Dimensions Fund
From the portfolio manager
A tremendous surge by the U.S. stock market during the past six months paved the
way for a substantial gain by the Fund. For the first half of the fiscal year --
September 1998 through February 1999 -- the Fund's value increased 33.49%. (This
figure does not reflect expenses that apply to the variable accounts,
subaccounts, or the annuity contract.)
The U.S. stock market was still licking its wounds from a late-summer tumble
when the period began. But, with ongoing reports of solid economic growth and
low inflation, stocks eventually regained their footing and, supported by three
reductions in short-term interest rates by the Federal Reserve Board during the
fall, mounted a furious recovery. The positive performance continued through the
winter, finally petering out in February as concerns about a potential increase
in the inflation rate and a slowdown in corporate profits put the brakes on the
rally.
For the Fund, whose performance generally tracked that of the stock market as a
whole over the six months, its emphasis on technology, health care, financial
services and retailing stocks paid off well. Looking at specific stocks, General
Electric, Cisco Systems, Microsoft, Wal-Mart, Pfizer, IBM and Safeway -- all
among the Fund's largest holdings -- made particularly strong contributions. For
the most part, large-capitalization growth stocks were at the forefront of the
market's advance. That worked to the Fund's advantage, as such issues form the
core of its investment portfolio.
The only change of note during the period was the addition of a modest amount of
utility stocks last fall. I bought those to provide some cushion for the Fund in
the event of a sharp downturn in the market. Should the investment environment
become more stable, I'll probably eliminate those holdings.
As we begin the second half of the fiscal year, the stock market continues to
wrestle with questions about the strength of corporate profits and the direction
of long-term interest rates in the months ahead. On the positive side, the
economy still appears to have plenty of vigor, while inflation remains unusually
low. It may take some time before those factors are sorted out, which in turn
will most likely result in a continuation of substantial swings in stock prices.
Gordon M. Fines
(picture of) Gordon M. Fines
Gordon M. Fines
Portfolio manager
<PAGE>
The 10 largest holdings
Growth Dimensions Fund
Percent Value
(of net assets) (as of Feb. 28, 1999)
Cisco Systems 3.78% $110,361,843
Wal-Mart Stores 3.53 103,071,287
General Electric 3.38 98,577,094
Intl Business Machines 3.35 97,851,999
Pfizer 2.85 83,358,112
Microsoft 2.60 75,873,175
America Online 2.57 74,929,844
Safeway 2.50 72,978,674
Time Warner 2.29 66,989,700
BellSouth 2.19 64,023,875
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 29.04% of net assets
<PAGE>
To our contract owners
Income Advantage Fund
From the portfolio manager
The Fund recovered from a bad start to generate a positive result for the first
half of the fiscal year. For the six months -- September 1998 through February
1999 -- the Fund's value increased 0.92%. (This figure does not reflect expenses
that apply to the variable accounts, subaccounts, or the annuity contract.)
When the period began last fall, high-yield bonds were stuck in their worst
slump since 1990. With many smaller markets in Asia, Latin America and Eastern
Europe in near free-fall as a result of the economic malaise dubbed the "Asian
flu," investors sought the sanctuary of U.S. Treasury bonds. At the same time,
they abandoned high-yield issues, which saw their prices sink in response.
Reflecting the difficult environment, the Fund's value declined by more than 6%
during September and October.
In the meantime, the Federal Reserve was busy cutting short-term interest rates
to try to bring some stability to the financial markets. The effort paid off
rather quickly, as the high-yield sector reversed direction in November, nearly
wiping out the previous months' loss. Although they stumbled a bit in December,
high-yields finished the six months in good fashion, with gains in the final two
months that put the Fund in positive territory for the period as a whole.
As we begin the second half of the fiscal year, I'm encouraged by the
fundamentals in the high-yield bond sector. The economy continues to be healthy;
inflation has yet to show signs of a meaningful increase; the supply/demand
relationship among high-yield issues is in reasonably good balance; and it
appears that the Federal Reserve may not need to increase short-term interest
rates. Assuming there are no major changes in those factors in the months ahead,
I think high-yields should perform relatively well, which in turn would lead to
more consistent, positive performance for the Fund.
Jack Utter
(picture of) Jack Utter
Jack Utter
Portfolio manager
<PAGE>
The 10 largest holdings
Income Advantage Fund
Percent Value
(of net assets) (as of Feb. 28, 1999)
EchoStar DBS 1.36% $8,261,500
Sr Nts 9.38% 2009
Chancellor Media .98 5,935,999
Sr Nts 8.00% 2008
Abbey Healthcare Group .93 5,649,375
Sr Sub Nts 9.50% 2002
CSC Holdings .85 5,157,478
Preferred 11.13% Pay-in-kind Series M
Outsourcing Solutions .84 5,112,149
Sr Sub Nts Series B 11.00% 2006
Nextel Partners .83 5,075,999
Zero Coupon Sr Disc Nts 6.78% 2004
Warren (SD) .73 4,437,000
Preferred 14.00% Series B
Oxford Automotive .72 4,398,750
Company Guaranty 10.13% 2007
Dobson/Sygnet Communications .72 4,369,999
Sr Nts 12.25% 2008
Motor & Gears .72 4,361,562
Sr Nts Series D 10.75% 2006
For further detail about these holdings, please refer to the section
entitled "Investments in securities" herein.
(icon of) pie chart
The 10 holdings listed here make up 8.68% of net assets
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of assets and liabilities
Retirement Annuity Mutual Funds
Feb. 28, 1999 (Unaudited)
Assets
Capital Special Managed
Resource Income Fund
Fund Fund
Investments in securities, at value (Note 1):
(identified cost, $3,949,372,548; $1,910,787,534 and $4,047,085,938,
<S> <C> <C> <C>
respectively) $5,544,655,011 $1,850,828,604 $5,181,151,255
Cash in bank on demand deposit 73,145 605,046 56,528
Receivable for investment securities sold 63,155,405 2,321,189 28,023,611
Dividends and accrued interest receivable 3,086,293 31,032,278 28,520,458
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 4) -- -- 1,643
U.S. government securities held as collateral for securities loaned (Note 5) -- 14,931,078 299,549,629
---------- -----------
Receivable for capital stock sold 196,093 8,361,954 27,593,261
------- --------- ----------
Total assets 5,611,165,947 1,908,080,149 5,564,896,385
============= ============= =============
Liabilities
Dividends payable to shareholders (Note 1) 1,318,167 10,963,126 31,750,715
Payable for investment securities purchased 26,762,916 1,250,000 17,387,980
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 4) -- -- 15,745
Accrued investment management and services fee 2,609,323 945,953 2,440,392
Payable upon return of securities loaned (Note 5) -- 22,024,678 435,237,479
---------- -----------
Payable for capital stock redeemed 3,258,298 -- --
Other accrued expenses 530,976 103,449 262,753
------- ------- -------
Total liabilities 34,479,680 35,287,206 487,095,064
---------- ---------- -----------
Net assets applicable to outstanding capital stock $5,576,686,267 $1,872,792,943 $5,077,801,321
============== ============== ==============
Represented by
Capital stock-- $.01 par value ($.001 for Managed Fund) (Note 1) $ 1,716,347 $ 1,715,453 $ 275,559
Additional paid-in capital 3,799,050,642 1,953,995,381 3,871,196,571
Undistributed (excess of distributions over) net investment income (61,478) 2,195,824 (4,065,696)
Accumulated net realized gain (loss) 180,698,293 (25,090,544) 76,309,436
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (Note 4) 1,595,282,463 (60,023,171) 1,134,085,451
------------- ----------- -------------
Total-- representing net assets applicable to outstanding capital stock $5,576,686,267 $1,872,792,943 $5,077,801,321
============== ============== ==============
Shares outstanding 171,634,686 171,545,345 275,558,995
----------- ----------- -----------
Net asset value per share of outstanding capital stock $ 32.49 $ 10.92 $ 18.43
-------------- -------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of assets and liabilities (continued)
Retirement Annuity Mutual Funds
Feb. 28, 1999 (Unaudited)
Assets
Moneyshare International Aggressive
Fund Equity Growth
Fund Fund
Investments in securities, at value (Note 1):
Investments in securities of unaffiliated issuers
(identified cost, $542,798,084; $1,876,306,143 and $1,871,360,802,
<S> <C> <C> <C>
respectively) $542,798,084 $2,271,221,706 $2,193,834,767
Investments in securities of affiliated issuers
(identified cost, $6,730,104 and $30,800,566 for International Equity Fund
and Aggressive Growth Fund, respectively) -- 6,446,563 44,383,750
---- --------- ----------
Total investments in securities (identified cost, $1,883,036,247 and $1,902,161,368
for International Equity Fund and Aggressive Growth Fund, respectively) 542,798,084 2,277,668,269 2,238,218,517
Cash in bank on demand deposit -- 107,623 217,020
Receivable for investment securities sold -- 2,409,668 24,329,749
Dividends and accrued interest receivable 516,576 3,440,811 456,302
Unrealized appreciation on foreign currency contracts held, at value (Notes 1 and 4) -- 70,256 --
U.S. government securities held as collateral for securities loaned (Note 5) -- -- 2,641,942
Receivable for capital stock sold 290,014 165,053 88,750
------- ------- ------
Total assets 543,604,674 2,283,861,680 2,265,952,280
----------- ------------- -------------
Liabilities
Disbursements in excess of cash on demand deposit 764,883 -- --
Dividends payable to shareholders (Note 1) 1,841,165 -- 500,170
Payable for investment securities purchased -- 20,671,307 26,292,764
Accrued investment management and services fee 208,728 1,438,053 1,169,604
Unrealized depreciation on foreign currency contracts held, at value (Notes 1 and 4) -- 33,086 --
Payable upon return of securities loaned (Note 5) -- 122,604,800 2,641,942
Payable for capital stock redeemed 724,907 2,518,349 2,498,575
Other accrued expenses 36,602 520,189 171,255
Option contracts written, at value (premium received
$1,537,074 for Aggressive Growth Fund) (Note 8) -- -- 2,149,531
---- ---- ---------
Total liabilities 3,576,285 147,785,784 35,423,841
--------- ----------- ----------
Net assets applicable to outstanding capital stock $540,028,389 $2,136,075,896 $2,230,528,439
============ ============== ==============
Represented by
Capital stock-- $.01 par value (Note 1) $ 5,400,742 $ 1,366,262 $ 1,539,922
Additional paid-in capital 534,629,892 1,643,645,117 1,981,661,717
Undistributed net investment income 80 1,055,513 1,297,004
Accumulated net realized gain (loss) (2,325) 95,526,880 (89,414,896)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (Note 4) -- 394,482,124 335,444,692
---- ----------- -----------
Total-- representing net assets applicable to outstanding capital stock $540,028,389 $2,136,075,896 $2,230,528,439
============ ============== ==============
Shares outstanding 540,074,174 136,626,207 153,992,186
----------- ----------- -----------
Net asset value per share of outstanding capital stock $ 1.00 $ 15.63 $ 14.48
------------ -------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of assets and liabilities (continued)
Retirement Annuity Mutual Funds
Feb. 28, 1999 (Unaudited)
Assets
Global Growth Income
Yield Dimensions Advantage
Fund Fund Fund
Investments in securities, at value (Note 1):
(identified cost, $201,994,705; $2,065,519,785 and $656,007,816,
<S> <C> <C> <C>
respectively) $202,835,230 $2,935,445,072 $600,613,618
Cash in bank on demand deposit -- 58,658 32,628
Receivable for investment securities sold 102,157 5,538,108 775,795
Dividends and accrued interest receivable 4,201,587 1,688,704 12,917,982
U.S. government securities held as collateral for securities loaned (Note 5) -- 19,226,949 --
Receivable for capital stock sold 604,152 4,931,426 4,690,749
------- --------- ---------
Total assets 207,743,126 2,966,888,917 619,030,772
----------- ------------- -----------
Liabilities
Disbursements in excess of cash on demand deposit 41,510 -- --
Dividends payable to shareholders (Note 1) 646,679 2,006,673 4,922,270
Payable for investment securities purchased 1,519,099 18,183,537 5,121,712
Accrued investment management and services fee 143,174 1,434,692 309,700
Payable upon return of securities loaned (Note 5) 1,100,000 24,686,949 --
Payable for capital stock redeemed -- -- --
Other accrued expenses 20,186 11,627 37,104
------ ------ ------
Total liabilities 3,470,648 46,323,478 10,390,786
--------- ---------- ----------
Net assets applicable to outstanding capital stock $204,272,478 $2,920,565,439 $608,639,986
============ ============== ============
Represented by
Capital stock-- $.01 par value (Note 1) $ 199,118 $ 1,651,239 $ 672,121
Additional paid-in capital 205,634,900 2,096,996,160 678,460,982
Undistributed (excess of distributions over) net investment income 62,141 (6) (275,165)
Accumulated net realized gain (loss) (2,561,980) (48,007,241) (14,823,754)
Unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies (Note 7) 938,299 869,925,287 (55,394,198)
------- ----------- -----------
Total-- representing net assets applicable to outstanding capital stock $204,272,478 $2,920,565,439 $608,639,986
============ ============== ============
Shares outstanding 19,911,846 165,123,867 67,212,119
---------- ----------- ----------
Net asset value per share of outstanding capital stock $ 10.26 $ 17.69 $ 9.06
------------ -------------- ------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of operations
Retirement Annuity Mutual Funds
Six months ended Feb. 28, 1999 (Unaudited)
Investment income
Capital Special Managed
Resource Income Fund
Fund Fund
Income:
<S> <C> <C> <C>
Dividends $ 19,651,798 $ 1,003,324 $ 14,711,181
Interest 3,469,340 74,093,408 67,965,060
Less foreign taxes withheld (119,400) -- (113,363)
-------- ---- --------
Total income 23,001,738 75,096,732 82,562,878
---------- ---------- ----------
Expenses (Note 2):
Investment management services fee 15,490,765 5,693,796 14,021,447
Administrative services fees and expenses 889,990 310,898 665,891
Custodian fees and expenses 159,214 66,108 184,060
Compensation of board members and officers 15,806 9,070 15,119
Printing and postage 79,647 80,877 73,398
Audit fees 11,000 11,500 10,250
Other 6,355 26,087 4,084
----- ------ -----
Total expenses 16,652,777 6,198,336 14,974,249
---------- --------- ----------
Investment income (loss)-- net 6,348,961 68,898,396 67,588,629
--------- ---------- ----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 182,970,473 (18,480,537) 77,815,292
Foreign currency transactions -- (219,178) (198,183)
---- -------- --------
Net realized gain (loss) on investments 182,970,473 (18,699,715) 77,617,109
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and liabilities in foreign
currencies 1,187,948,939 (6,136,479) 673,324,562
------------- ---------- -----------
Net gain (loss) on investments and foreign currencies 1,370,919,412 (24,836,194) 750,941,671
------------- ----------- -----------
Net increase (decrease) in net assets resulting from operations $1,377,268,373 $44,062,202 $818,530,300
============== =========== ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of operations (continued)
Retirement Annuity Mutual Funds
Six months ended Feb. 28, 1999 (Unaudited)
Investment income
Moneyshare International Aggressive
Fund Equity Growth
Fund Fund
Income:
<S> <C> <C> <C>
Dividends $ -- $ 6,616,093 $ 2,959,831
Interest 12,948,651 4,979,101 10,129,548
Less foreign taxes withheld -- (1,057,153) (12,392)
--- ---------- -------
Total income 12,948,651 10,538,041 13,076,987
---------- ---------- ----------
Expenses (Note 2):
Investment management services fee 1,249,199 8,348,772 6,544,165
Administrative services fees and expenses 61,188 475,199 506,882
Custodian fees and expenses 20,022 745,014 142,540
Compensation of board members and officers 5,632 9,344 10,031
Printing and postage 5,954 107,919 64,279
Audit fees 8,000 9,875 8,500
Other -- 717 15,178
--- --- ------
Total expenses 1,349,995 9,696,840 7,291,575
--------- --------- ---------
Investment income (loss)-- net 11,598,656 841,201 5,785,412
---------- ------- ---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (including $3,556,849 realized gain
on investments of affiliated issuers for Aggressive Growth Fund) (Note 3) 206 101,085,053 (79,010,037)
Foreign currency transactions -- (5,558,173) --
Options contracts written (Note 8) -- -- 2,843,538
--- --- ---------
Net realized gain (loss) on investments 206 95,526,880 (76,166,499)
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and liabilities in foreign
currencies -- 107,063,858 440,759,883
--- ----------- -----------
Net gain (loss) on investments and foreign currencies 206 202,590,738 364,593,384
--- ----------- -----------
Net increase (decrease) in net assets resulting from operations $11,598,862 $203,431,939 $370,378,796
=========== ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of operations (continued)
Retirement Annuity Mutual Funds
Six months ended Feb. 28, 1999 (Unaudited)
Investment income
Global Growth Income
Yield Dimensions Advantage
Fund Fund Fund
Income:
<S> <C> <C> <C>
Dividends $ -- $ 9,758,285 $ 3,124,069
Interest 6,329,376 3,634,231 27,247,650
Less foreign taxes withheld -- (59,108) --
--- ------- ---
Total income 6,329,376 13,333,408 30,371,719
--------- ---------- ----------
Expenses (Note 2):
Investment management services fee 822,066 7,602,001 1,770,046
Administrative services fees and expenses 59,727 459,452 96,497
Custodian fees and expenses 25,527 139,097 55,504
Compensation of board members and officers 5,080 8,528 12,080
Printing and postage 10,155 44,353 5,291
Audit fees 8,000 10,000 8,500
Other 1,956 818 1,594
----- --- -----
Total expenses 932,511 8,264,249 1,949,512
------- --------- ---------
Investment income (loss)-- net 5,396,865 5,069,159 28,422,207
--------- --------- ----------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (2,533,033) (47,341,139) (14,821,590)
Foreign currency transactions 102,277 -- --
Options contracts written (Note 8) -- (606,416) --
--- -------- ---
Net realized gain (loss) on investments (2,430,756) (47,947,555) (14,821,590)
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and liabilities in foreign
currencies 4,632,061 724,889,605 (7,046,885)
--------- ----------- ----------
Net gain (loss) on investments and foreign currencies 2,201,305 676,942,050 (21,868,475)
--------- ----------- -----------
Net increase (decrease) in net assets resulting from operations $7,598,170 $682,011,209 $ 6,553,732
========== ============ ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
Retirement Annuity Mutual Funds
Operations and distributions
Capital Resource Fund Special Income Fund
Feb. 28, 1999 Aug. 31, 1998 Feb. 28, 1999 Aug. 31, 1998
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 6,348,961 $ 18,039,721 $ 68,898,396 $ 143,058,301
Net realized gain (loss) on investments 182,970,473 448,373,910 (18,699,715) (465,418)
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities in foreign currencies 1,187,948,939 (503,365,840) (6,136,479) (110,599,748)
------------- ------------ ---------- ------------
Net increase (decrease) in net assets resulting from operations 1,377,268,373 (36,952,209) 44,062,202 31,993,135
------------- ----------- ---------- ----------
Distributions to shareholders from:
Net investment income (6,287,482) (19,551,462) (68,808,561) (138,696,945)
Net realized gain (401,677,258) (108,000,072) (4,108,552) (42,097,397)
Excess distributions of net investment income (Note 1) (61,478) (60,536) -- --
------- ------- --- ---
Total distributions (408,026,218) (127,612,070) (72,917,113) (180,794,342)
------------ ------------ ----------- ------------
Capital share transactions (Note 6)
Proceeds from sales 40,274,642 94,373,230 66,114,879 111,114,932
Reinvested distributions at net asset value 408,026,218 127,612,070 72,917,113 180,794,342
Payments for redemptions (293,762,877) (471,105,969) (89,879,995) (213,929,824)
------------ ------------ ----------- ------------
Increase (decrease) in net assets from capital share transactions 154,537,983 (249,120,669) 49,151,997 77,979,450
----------- ------------ ---------- ----------
Total increase (decrease) in net assets 1,123,780,138 (413,684,948) 20,297,086 (70,821,757)
Net assets at beginning of period 4,452,906,129 4,866,591,077 1,852,495,857 1,923,317,614
------------- ------------- ------------- -------------
Net assets at end of period $5,576,686,267 $4,452,906,129 $1,872,792,943 $1,852,495,857
============== ============== ============== ==============
Undistributed (excess of distributions over) net investment
income $ (61,478) $ (61,479) $ 2,195,824 $ 2,105,989
-------------- -------------- -------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets (continued)
Retirement Annuity Mutual Funds
Operations and distributions
Managed Fund Moneyshare Fund
Feb. 28, 1999 Aug. 31, 1998 Feb. 28, 1999 Aug. 31, 1998
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 67,588,629 $ 123,735,373 $ 11,598,656 $20,307,017
Net realized gain (loss) on investments 77,617,109 433,344,561 206 (1,891)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 673,324,562 (467,198,242) -- --
----------- ------------ --- ---
Net increase (decrease) in net assets resulting from operations 818,530,300 89,881,692 11,598,862 20,305,126
----------- ---------- ---------- ----------
Distributions to shareholders from:
Net investment income (63,179,832) (120,816,343) (11,598,658) (20,307,015)
Net realized gain (431,748,610) (354,443,189) -- --
Excess distributions of net investment income (Note 1) (4,065,696) (2,711,871) -- --
---------- ---------- --- ---
Total distributions (498,994,138) (477,971,403) (11,598,658) (20,307,015)
------------ ------------ ----------- -----------
Capital share transactions (Note 6)
Proceeds from sales 62,885,340 164,843,111 285,995,035 372,906,239
Reinvested distributions at net asset value 473,723,371 477,971,403 11,598,658 20,307,015
Payments for redemptions (191,297,009) (286,373,658) (185,426,508) (386,699,143)
------------ ------------ ------------ ------------
Increase (decrease) in net assets from capital share transactions 345,311,702 356,440,856 112,167,185 6,514,111
----------- ----------- ----------- ---------
Total increase (decrease) in net assets 664,847,864 (31,648,855) 112,167,389 6,512,222
Net assets at beginning of period 4,412,953,457 4,444,602,312 427,861,000 421,348,778
------------- ------------- ----------- -----------
Net assets at end of period $5,077,801,321 $4,412,953,457 $540,028,389 $427,861,000
============== ============== ============ ============
Undistributed (excess of distributions over) net investment income $ (4,065,696) $ (4,408,797) $ 80 $ 82
-------------- -------------- ------------ ------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets (continued)
Retirement Annuity Mutual Funds
Operations and distributions
International Equity Fund Aggressive Growth Fund
Feb. 28, 1999 Aug. 31, 1998 Feb. 28, 1999 Aug. 31, 1998
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 841,201 $ 20,701,441 $ 5,785,412 $ 1,982,389
Net realized gain (loss) on investments 95,526,880 20,930,910 (76,166,499) 138,926,753
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities in foreign currencies 107,063,858 46,999,648 440,759,883 (522,716,812)
----------- ---------- ----------- ------------
Net increase (decrease) in net assets resulting from operations 203,431,939 88,631,999 370,378,796 (381,807,670)
----------- ---------- ----------- ------------
Distributions to shareholders from:
Net investment income -- (21,412,151) (4,491,647) (1,982,434)
Net realized gain (10,584,503) (27,841,143) (148,760,451) (212,438,792)
Excess distributions of net investment income (Note 1) -- (8,929,492) -- (1,274,187)
--- ---------- --- ----------
Total distributions (10,584,503) (58,182,786) (153,252,098) (215,695,413)
----------- ----------- ------------ ------------
Capital share transactions (Note 6)
Proceeds from sales 90,281,203 131,026,007 35,962,241 123,640,158
Reinvested distributions at net asset value 10,584,503 58,182,786 153,252,098 215,695,413
Payments for redemptions (180,370,578) (301,899,906) (151,403,972) (193,668,539)
------------ ------------ ------------ ------------
Increase (decrease) in net assets from capital share transactions (79,504,872) (112,691,113) 37,810,367 145,667,032
----------- ------------ ---------- -----------
Total increase (decrease) in net assets 113,342,564 (82,241,900) 254,937,065 (451,836,051)
Net assets at beginning of period 2,022,733,332 2,104,975,232 1,975,591,374 2,427,427,425
------------- ------------- ------------- -------------
Net assets at end of period $2,136,075,896 $2,022,733,332 $2,230,528,439 $1,975,591,374
============== ============== ============== ==============
Undistributed net investment income $ 1,055,513 $ 214,312 $ 1,297,004 $ 3,239
-------------- -------------- -------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial statements
Statements of changes in net assets (continued)
Retirement Annuity Mutual Funds
Operations and distributions
Global Yield Fund Growth Dimensions Fund
Feb. 28, 1999 Aug. 31, 1998 Feb. 28, 1999 Aug. 31, 1998
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 5,396,865 $ 9,143,827 $ 5,069,159 $ 10,926,250
Net realized gain (loss) on investments (2,430,756) (732,605) (47,947,555) 14,132,367
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities in foreign currencies 4,632,061 (4,143,433) 724,889,605 (31,064,162)
--------- ---------- ----------- -----------
Net increase (decrease) in net assets resulting from operations 7,598,170 4,267,789 682,011,209 (6,005,545)
--------- --------- ----------- ----------
Distributions to shareholders from:
Net investment income (4,923,554) (8,768,516) (5,069,158) (10,926,249)
Net realized gain (60,153) (557,107) (2,459,211) --
------- -------- ---------- ---
Total distributions (4,983,707) (9,325,623) (7,528,369) (10,926,249)
---------- ---------- ---------- -----------
Capital share transactions (Note 6)
Proceeds from sales 18,308,126 64,799,779 303,530,447 683,285,147
Reinvested distributions at net asset value 4,983,707 9,325,623 7,528,369 10,926,249
Payments for redemptions (4,971,250) (4,907,859) (24,500,856) (24,581,947)
---------- ---------- ----------- -----------
Increase (decrease) in net assets from capital share transactions 18,320,583 69,217,543 286,557,960 669,629,449
---------- ---------- ----------- -----------
Total increase (decrease) in net assets 20,935,046 64,159,709 961,040,800 652,697,655
Net assets at beginning of period 183,337,432 119,177,723 1,959,524,639 1,306,826,984
----------- ----------- ------------- -------------
Net assets at end of period $204,272,478 $183,337,432 $2,920,565,439 $1,959,524,639
============ ============ ============== ==============
Undistributed (excess of distributions over) net investment income $ 62,141 $ (411,170) $ (6) $ (7)
------------ ------------ -------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets (continued)
Retirement Annuity Mutual Funds
Operations and distributions
Income Advantage Fund
Feb. 28, 1999 Aug. 31, 1998
Six months ended Year ended
(Unaudited)
<S> <C> <C>
Investment income (loss)-- net $ 28,422,207 $ 43,597,676
Net realized gain (loss) on investments (14,821,590) 6,264,774
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities in foreign currencies (7,046,885) (57,363,291)
---------- -----------
Net increase (decrease) in net assets resulting from operations 6,553,732 (7,500,841)
--------- ----------
Distributions to shareholders from:
Net investment income (28,089,579) (43,596,675)
Net realized gain (6,531,786) (1,952,622)
Excess distributions of net investment income (275,165) --
-------- ---
Total distributions (34,896,530) (45,549,297)
----------- -----------
Capital share transactions (Note 6)
Proceeds from sales 50,152,739 262,609,367
Reinvested distributions at net asset value 34,896,530 45,549,297
Payments for redemptions (12,347,482) (11,144,825)
----------- -----------
Increase (decrease) in net assets from capital share transactions 72,701,787 297,013,839
---------- -----------
Total increase (decrease) in net assets 44,358,989 243,963,701
Net assets at beginning of period 564,280,997 320,317,296
----------- -----------
Net assets at end of period $608,639,986 $564,280,997
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to financial statements
Retirement Annuity Mutual Funds
(Unaudited as to Feb. 28, 1998)
1
Summary of significant
accounting policies
Each Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, (non-diversified for Global Yield) open-end management investment
company. Each Fund has 10 billion authorized shares of capital stock.
The primary investments of each Fund are as follows:
Capital Resource invests primarily in U.S. common stocks;
Special Income invests primarily in investment-grade bonds;
Managed invests primarily in stocks, convertible securities, bonds and
money market instruments; Moneyshare invests primarily in money market
securities; International Equity invests primarily in common stocks of
foreign issuers; Aggressive Growth invests primarily in stocks of
small- and medium-sized companies; Global Yield invests primarily in
debt securities of U.S. and foreign issuers; Growth Dimensions invests
primarily in common stocks of U.S. and foreign companies showing
potential for significant growth; and
Income Advantage invests primarily in long-term, high-yielding, high
risk debt securities below investment grade issued by U.S. and foreign
corporations.
Shares of each Fund are sold through the purchase of an annuity contract offered
by IDS Life Insurance Company (IDS Life) or its affiliates.
The Fund's significant accounting policies are summarized as follows:
Use of estimates
Preparing financial statements that conform to generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.
<PAGE>
Valuation of securities
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Securities for which market quotations are not readily available are valued at
fair value according to methods selected in good faith by the board. Short-term
securities in all Funds, except Moneyshare Fund, maturing in more than 60 days
from the valuation date are valued at the market price or approximate market
value based on the current interest rates; those maturing in 60 days or less are
valued at amortized cost. Pursuant to Rule 2a-7 of the 1940 Act, all securities
in Moneyshare Fund are valued at amortized cost which approximates market value
in order to maintain a constant net asset value of $1 per share.
Option transactions
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Funds, except Moneyshare Fund, may buy and
sell put and call options and write covered call options on portfolio securities
and write cash-secured puts. The risk in writing a call option is that the Funds
give up the opportunity for profit if the market price of the security
increases. The risk in writing a put option is that the Funds may incur a loss
if the market price of the security decreases and the option is exercised. The
risk in buying an option is that the Funds pay a premium whether or not the
option is exercised. The Funds also have the additional risk of being unable to
enter into a closing transaction if a liquid secondary market does not exist.
The Funds also may write over-the-counter options where completing the
obligation depends upon the credit standing of the other party.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Funds
will realize a gain or loss when the option transaction expires or closes. When
an option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid.
<PAGE>
Notes to financial statements
Retirement Annuity Mutual Funds
Futures transactions
To gain exposure to or protect itself from market changes, the Funds, except
Moneyshare Fund, may buy and sell financial futures contracts. The Funds also
may buy or write put and call options on futures contracts. Risks of entering
into futures contracts and related options include the possibility of an
illiquid market and that a change in the value of the contract or option may not
correlate with changes in the value of the underlying securities.
Upon entering into a futures contract, the Funds are required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Funds each day. The variation margin payments are equal to the
daily changes in the contract value and recorded as unrealized gains and losses.
The Funds recognize a realized gain or loss when the contract is closed or
expires.
Foreign currency translations and foreign currency contracts
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars at the closing rate of exchange. Foreign
currency amounts related to the purchase or sale of securities and income and
expenses are translated at the exchange rate on the transaction date. In the
statement of operations, net realized gains or losses from foreign currency
transactions, if any, may arise from sales of foreign currency, closed forward
contracts, exchange gains or losses realized between the trade date and
settlement date on securities transactions, and other translation gains or
losses on dividends, interest income and foreign withholding taxes.
The Funds, except Moneyshare Fund, also may enter into forward foreign currency
exchange contracts for operational purposes. The net U.S. dollar value of
foreign currency underlying all contractual commitments held by the Funds and
the resulting unrealized appreciation and/or depreciation are determined using
foreign currency exchange rates from an independent pricing service. The Funds
are subject to the credit risk that the other party will not complete its
contract obligations.
<PAGE>
Illiquid securities
As of Feb. 28, 1999, investments in securities for Special Income Fund, Managed
Fund and Income Advantage Fund included issues that are illiquid. The Funds
currently limit investments in illiquid securities to 10% of the net assets, at
market value, at the time of purchase. The aggregate value of such securities at
Feb. 28, 1999, was $9,056,250, $2,565,872, and $5,948,916 that represents 0.48%,
0.05%, and 0.98% of net assets for Special Income Fund, Managed Fund, and Income
Advantage Fund, respectively. Pursuant to guidelines adopted by the board,
certain unregistered securities are determined to be liquid and are not included
within the 10% limitation specified above.
Securities purchased on a when-issued basis
Delivery and payment for securities that have been purchased by Global Yield
Fund on a forward-commitment or when-issued basis can take place one month or
more after the transaction date. During this period, such securities are subject
to market fluctuations and they may affect the Fund's net assets the same as
owned securities. The Fund designates cash or liquid high-grade short-term debt
securities at least equal to the amount of its commitment. As of Feb. 28, 1999,
the Fund had entered into outstanding when-issued or forward commitments of
$1,478,583.
<PAGE>
Notes to financial statements
Retirement Annuity Mutual Funds
Federal taxes
Each Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute all of its
taxable income to the Variable Accounts. No provision for income or excise taxes
is thus required. Each Fund is treated as a separate entity for federal income
tax purposes.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes, the timing and amount of
market discount recognized as ordinary income, foreign tax credits and losses
deferred due to "wash sale" transactions. The character of distributions made
during the year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes. The effect on
dividend distributions of certain book-to-tax differences is presented as
"excess distributions" in the statement of changes in net assets. Also, due to
the timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains (losses)
are recorded by the Funds.
Dividends
As of Feb. 28, 1999, dividends declared for each Fund payable March 1, 1999 are
as follows:
Capital Resource $0.008
Special Income $0.064
Managed $0.116
Moneyshare $0.003
International Equity $0.000
Aggressive Growth $0.003
Global Yield $0.033
Growth Dimensions $0.012
Income Advantage $0.074
Distributions to the Variable Accounts are recorded as of the close of business
on the record date and are payable on the first business day following the
record date. Dividends from net investment income are declared daily and paid
monthly for Special Income, Moneyshare, Global Yield and Income Advantage Funds
and declared and paid quarterly for Capital Resource, Managed, International
Equity, Aggressive Growth and Growth Dimensions Funds. Capital gain
distributions, if any, will be made annually. However, an additional capital
gain distribution may be made during the fiscal year in order to comply with the
Internal Revenue Code, as applicable to regulated investment companies.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. For U.S.
dollar denominated bonds, interest income includes level-yield amortization of
premium and discount. For foreign bonds, the Funds amortize premium and original
issue discount daily and market discount is recognized at the time of sale.
<PAGE>
2
Investment
management and
services agreement
The Funds have entered into an agreement with IDS Life for managing investments,
record keeping and other services that are based solely on the assets of each
Fund. The management fee is a percentage of each Fund's average daily net assets
in reducing percentages annually as follows:
Fund Percentage Range
Capital Resource 0.630% to 0.570%
Special Income 0.610% to 0.535%
Managed 0.630% to 0.550%
Moneyshare 0.510% to 0.440%
International Equity 0.870% to 0.795%
Aggressive Growth 0.650% to 0.575%
Global Yield 0.840% to 0.780%
Growth Dimensions 0.630% to 0.570%
Income Advantage 0.620% to 0.545%
IDS Life, in turn, pays to American Express Financial Corporation (AEFC) a fee
based on a percentage of each Fund's average daily net assets for the year. This
fee is equal to 0.35% for International Equity Fund and 0.25% for each remaining
Fund. In addition to paying its own management fee, brokerage commissions, taxes
and costs of certain legal services, each Fund will reimburse IDS Life an amount
equal to the cost of certain expenses incurred and paid by IDS Life in
connection with each Fund's operations. The Funds also pay custodian fees to
American Express Trust Company, an affiliate of IDS Life. The reimbursement paid
by Moneyshare Fund will be limited to 0.25% of the Fund's average daily net
assets.
AEFC has a Sub-investment Advisory Agreement with American Express Asset
Management International Inc. (International), a wholly-owned subsidiary of
AEFC.
The Funds have also entered into an Administrative Services Agreement with AEFC.
Under this agreement, each Fund pays AEFC a fee for administration and
accounting services at a percentage of each Fund's average daily net assets in
reducing percentages annually as follows:
Fund Percentage Range
Capital Resource 0.050% to 0.030%
Special Income 0.050% to 0.025%
Managed 0.040% to 0.020%
Moneyshare 0.030% to 0.020%
International Equity 0.060% to 0.035%
Aggressive Growth 0.060% to 0.035%
Global Yield 0.060% to 0.040%
Growth Dimensions 0.050% to 0.030%
Income Advantage 0.050% to 0.025%
Additional administrative service expenses paid by the Funds are office
expenses, consultants' fees and compensation of officers and employees. Under
this agreement, the Funds also pay taxes, audit and certain legal fees,
registration fees for shares, compensation of board members, corporate filing
fees and any other expenses properly payable by the Funds and approved by the
board.
<PAGE>
Notes to financial statements
Retirement Annuity Mutual Funds
3
Securities
transactions
For the six months ended Feb. 28, 1999, cost of purchases and proceeds from
sales of securities aggregated, respectively, $1,425,112,139 and $1,296,753,404
for Moneyshare Fund. Cost of purchases and proceeds from sales of securities
(other than short-term obligations) aggregated for each Fund are as follows:
Fund Purchases Proceeds
Capital Resource $1,454,371,769 $1,654,089,019
Special Income 558,686,781 458,334,510
Managed 1,107,516,282 995,515,271
International Equity 994,979,177 1,041,129,522
Aggressive Growth 1,911,117,367 1,789,975,343
Global Yield 4,684,844 1,953,316
Growth Dimensions 584,257,884 348,845,226
Income Advantage 174,958,713 121,988,530
Net realized gains and losses on investment sales are determined on an
identified cost basis.
Brokerage commissions paid to brokers affiliated with IDS Life for the six
months ended Feb. 28, 1999 are as follows:
Capital Resource $272,010
Managed 46,389
Aggressive Growth 88,443
Growth Dimensions 79,507
<PAGE>
<TABLE>
<CAPTION>
4
Foreign currency
contracts
As of Feb. 28, 1999, Managed Fund and International Equity Fund had entered into
foreign currency exchange contracts that obligate the Fund to deliver currencies
at specified future dates. The unrealized appreciation and/or depreciation on
these contracts is included in the accompanying financial statements. See
"Summary of significant accounting policies." The terms of the open contracts
are as follows:
Managed Fund
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
<S> <C> <C> <C> <C>
March 3, 1999 2,315,514 3,695,908 $ -- $15,745
British Pound U.S. Dollar
March 4, 1999 547,653 879,504 1,643 --
British Pound U.S. Dollar
$1,643 $15,745
International Equity Fund
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
March 1, 1999 2,452,530 294,671,443 $31,948 $ --
U.S. Dollar Japanese Yen
March 1, 1999 4,361,912 6,280,281 -- 26,797
U.S. Dollar Swiss Franc
March 2, 1999 4,712,866 2,947,015 11,051 --
U.S. Dollar British Pound
March 2, 1999 2,191,603 2,403,750 -- 5,917
Euro Dollar U.S. Dollar
March 2, 1999 5,931,741 706,766,969 27,257 --
U.S. Dollar Japanese Yen
March 3, 1999 3,141,914 1,959,850 -- 372
U.S. Dollar British Pound
$70,256 $33,086
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to financial statements
Retirement Annuity Mutual Funds
5
Lending of
portfolio securities
Presented below is information regarding securities on loan as of Feb. 28, 1999.
Special International
Income Managed Equity
<S> <C> <C> <C>
Value of securities on loan to brokers $22,448,289 $419,392,118 $118,007,924
Collateral received for securities loaned:
Cash $ 7,093,600 $135,687,850 $122,604,800
U.S. government securities, at value 14,931,078 299,549,629 --
Total collateral received for securities
loaned $22,024,678 $435,237,479 $122,604,800
Aggressive Global Growth
Growth Yield Dimensions
Value of securities on loan to brokers $ 2,290,600 $ 1,012,500 $ 24,539,840
Collateral received for securities loaned:
Cash $ -- $ 1,100,000 $ 5,460,000
U.S. government securities, at value 2,641,942 -- 19,226,949
Total collateral received for securities
loaned $ 2,641,942 $ 1,100,000 $ 24,686,949
Income from securities lending amounted to $31,152, $151,764, $332,501, $39,931,
$233,136, $7,727 and $44,709 for Capital Resource, Special Income, Managed,
International Equity, Aggressive Growth, Global Yield and Growth Dimensions,
respectively, for the six months ended Feb. 28, 1999.
The risks to each Fund of securities lending are that the borrower may not
provide additional collateral when required or return the securities when due.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
6
Capital share
transactions
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended Feb. 28, 1999
Capital Special
Resource Income Managed
<S> <C> <C> <C>
Sold 1,313,385 5,974,471 3,432,991
Issued for reinvested distributions 13,766,498 6,577,398 28,260,196
Redeemed (9,593,335) (8,130,832) (11,919,040)
Net increase (decrease) 5,486,548 4,421,037 19,774,147
Six months ended Feb. 28, 1999
International Aggressive
Moneyshare Equity Growth
Sold 286,020,234 6,228,629 2,507,357
Issued for reinvested distributions 11,599,662 730,218 11,146,204
Redeemed (185,442,922) (12,262,170) (10,450,155)
Net increase (decrease) 112,176,974 (5,303,323) 3,203,406
Six months ended Feb. 28, 1999
Global Growth Income
Yield Dimensions Advantage
Sold 1,742,620 18,756,301 5,556,531
Issued for reinvested distributions 473,201 429,061 3,866,535
Redeemed (474,392) (1,522,962) (1,360,870)
Net increase (decrease) 1,741,429 17,662,400 8,062,196
Year ended Aug.31, 1998
Capital Special
Resource Income Managed
Sold 3,111,763 9,406,202 8,609,654
Issued for reinvested distributions 4,593,438 15,335,152 26,654,679
Redeemed (15,545,239) (18,015,220) (15,015,022)
Net increase (decrease) (7,840,038) 6,726,134 20,249,311
Year ended Aug.31, 1998
International Aggressive
Moneyshare Equity Growth
Sold 372,938,041 8,581,401 7,220,136
Issued for reinvested distributions 20,308,748 4,293,695 13,613,493
Redeemed (386,732,614) (20,393,377) (11,448,329)
Net increase (decrease) 6,514,175 (7,518,281) 9,385,300
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to financial statements
Retirement Annuity Mutual Funds
Year ended Aug. 31, 1998
Global Growth Income
Yield Dimensions Advantage
<S> <C> <C> <C>
Sold 6,193,224 47,550,647 25,022,142
Issued for reinvested distributions 894,227 493,421 4,401,276
Redeemed (470,748) (1,469,624) (1,093,400)
Net increase (decrease) 6,616,703 46,574,444 28,330,018
7
Interest rate
futures contracts
As of Feb. 28, 1999, the market value for Global Yield Fund on 10 open purchase
contracts, was $1,162,500 with a net unrealized gain of $2,083. See "Summary of
significant accounting policies."
8
Options contracts
written
Contracts and premium amounts associated with options contracts written by
Aggressive Growth Fund during the six months ended Feb. 28, 1999 are as follows:
Calls
Contracts Premium
Balance Aug. 31, 1998 -- $ --
Opened 17,200 6,714,180
Closed or expired (9,295) (3,174,763)
Exercise (5,905) (2,002,343)
Balance Feb. 28, 1999 2,000$ 1,537,074
See "Summary of significant accounting policies."
Contracts and premium amounts associated with options contracts written by
Growth Dimensions Fund during the six months ended Feb. 28, 1999 are as follows:
Calls
Contracts Premium
Balance Aug. 31, 1998 -- $ --
Opened 2,426 1,143,310
Closed or expired (2,426) (1,143,310)
Balance Feb. 28, 1999 -- $ --
See "Summary of significant accounting policies."
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Capital Resource Fund
Financial highlights
9
Financial highlights
The tables below show certain important financial information for evaluating
each Fund's results.
Fiscal period ended Aug. 31,
Per share income and capital changes(a)
1999b 1998 1997 1996 1995
Net asset value, beginning
<S> <C> <C> <C> <C> <C>
of period $26.80 $27.97 $25.57 $24.42 $23.43
Income from investment operations:
Net investment income (loss) .04 .11 .16 .30 .29
Net gains (losses) (both
realized and unrealized) 8.15 (.54) 6.45 1.22 3.70
Total from investment operations 8.19 (.43) 6.61 1.52 3.99
Less distributions:
Dividends from net investment income (.04) (.11) (.15) (.29) (.29)
Distributions from realized gains (2.46) (.63) (4.05) (.07) (2.71)
Excess distributions from realized gains -- -- (.01) (.01) --
Total distributions (2.50) (.74) (4.21) (.37) (3.00)
Net asset value, end of period $32.49 $26.80 $27.97 $25.57 $24.42
Ratios/supplemental data
1999b 1998 1997 1996 1995
Net assets, end of period
(in millions) $5,577 $4,453 $4,867 $4,372 $3,845
Ratio of expenses to average
daily net assets .66%c .66% .67% .68% .69%
Ratio of net investment income
(loss) to average daily net assets .25%c .34% .61% 1.15% 1.22%
Portfolio turnover rate
(excluding short-term securities) 29% 68% 110% 131% 88%
Total return(d) 31.44% (1.67%) 28.47% 6.15% 17.18%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 28, 1999 (Unaudited).
c Adjusted to an annual basis.
d Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to financial statements
Special Income Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes(a)
1999b 1998 1997 1996 1995
Net asset value, beginning
<S> <C> <C> <C> <C> <C>
of period $11.08 $11.99 $11.54 $11.58 $11.05
Income from investment operations:
Net investment income (loss) .41 .88 .85 .88 .88
Net gains (losses) (both realized
and unrealized) (.14) (.68) .52 (.07) .56
Total from investment operations .27 .20 1.37 .81 1.44
Less distributions:
Dividends from net investment
income (.41) (.85) (.84) (.85) (.87)
Distributions from realized gains (.02) (.26) (.07) -- (.02)
Excess distributions from
realized gains -- -- (.01) -- (.02)
Total distributions (.43) (1.11) (.92) (.85) (.91)
Net asset value, end of period $10.92 $11.08 $11.99 $11.54 $11.58
Ratios/supplemental data
1999b 1998 1997 1996 1995
Net assets, end of period
(in millions) $1,873 $1,852 $1,923 $1,912 $1,703
Ratio of expenses to average
daily net assets .68%c .67% .68% .68% .68%
Ratio of net investment income
(loss) to average daily net assets 7.52%c 7.39% 7.18% 7.47% 8.08%
Portfolio turnover rate
(excluding short-term securities) 26% 48% 73% 56% 56%
Total return(d) 2.36% 1.54% 12.24% 5.82% 13.75%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 28, 1999 (Unaudited).
c Adjusted to an annual basis.
d Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Managed Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes(a)
1999b 1998 1997 1996 1995
Net asset value, beginning
<S> <C> <C> <C> <C> <C>
of period $17.25 $18.87 $16.00 $14.85 $13.65
Income from investment operations:
Net investment income (loss) .26 .49 .46 .46 .40
Net gains (losses) (both realized
and unrealized) 2.89 (.12) 3.93 1.15 1.20
Total from investment operations 3.15 .37 4.39 1.61 1.60
Less distributions:
Dividends from net investment
income (.25) (.48) (.45) (.46) (.40)
Distributions from realized gains (1.71) (1.50) (1.06) -- --
Excess distributions from net
investment income (.01) (.01) (.01) -- --
Total distributions (1.97) (1.99) (1.52) (.46) (.40)
Net asset value, end of period $18.43 $17.25 $18.87 $16.00 $14.85
1999b 1998 1997 1996 1995
Net assets, end of period $5,078 $4,413 $4,445 $3,482 $3,044
(in millions)
Ratio of expenses to average daily
net assets .63%c .64% .64% .65% .68%
Ratio of net investment income
(loss) to average daily net assets 2.86%c 2.56% 2.65% 2.94% 2.96%
Portfolio turnover rate
(excluding short-term securities) 22% 50% 72% 85% 72%
Total return(d) 18.78% 1.74% 27.50% 11.01% 11.93%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 28, 1999 (Unaudited).
c Adjusted to an annual basis.
d Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to financial statements
Moneyshare Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes(a)
1999b 1998 1997 1996 1995
Net asset value, beginning
<S> <C> <C> <C> <C> <C>
of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) .02 .05 .05 .05 .05
Less distributions:
Dividends from net investment
income (.02) (.05) (.05) (.05) (.05)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
Ratios/supplemental data
1999b 1998 1997 1996 1995
Net assets, end of period
(in millions) $540 $428 $421 $288 $227
Ratio of expenses to average daily
net assets .56%c .57% .57% .56% .59%
Ratio of net investment income
(loss) to average daily net assets 4.82%c 5.13% 4.97% 5.02% 5.23%
Total returnd 2.37% 5.25% 5.05% 5.15% 5.27%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 28, 1999 (Unaudited).
c Adjusted to an annual basis.
d Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changesa
1999b 1998 1997 1996 1995
Net asset value, beginning
<S> <C> <C> <C> <C> <C>
of period $14.25 $14.09 $13.30 $12.55 $12.91
Income from investment operations:
Net investment income (loss) .01 .14 .18 .20 .17
Net gains (losses) (both realized
and unrealized) 1.45 .42 1.06 1.01 (.37)
Total from investment operations 1.46 .56 1.24 1.21 (.20)
Less distributions:
Dividends from net investment
income -- (.15) (.17) (.44) (.16)
Distributions from realized gains (.08) (.19) (.28) (.02) --
Excess distributions from
realized gains -- (.06) -- -- --
Total distributions (.08) (.40) (.45) (.46) (.16)
Net asset value, end of period $15.63 $14.25 $14.09 $13.30 $12.55
Ratios/supplemental data
1999b 1998 1997 1996 1995
Net assets, end of period
(in millions) $2,136 $2,023 $2,105 $1,874 $1,442
Ratio of expenses to average daily
net assets .73%c .94% .97% .96% 1.03%
Ratio of net investment income
(loss) to average daily net assets .58%c .94% 1.30% 1.28% 1.56%
Portfolio turnover rate (excluding
short-term securities) 54% 86% 91% 58% 38%
Total returnd 10.25% 4.09% 9.34% 9.64% (1.80%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 28, 1999 (Unaudited).
c Adjusted to an annual basis.
d Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to financial statements
Aggressive Growth Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changesa
1999b 1998 1997 1996 1995
Net asset value, beginning
<S> <C> <C> <C> <C> <C>
of period $13.10 $17.17 $16.04 $14.44 $11.46
Income from investment operations:
Net investment income (loss) .04 .01 .08 .10 .08
Net gains (losses) (both realized
and unrealized) 2.37 (2.57) 2.84 1.60 2.98
Total from investment operations 2.41 (2.56) 2.92 1.70 3.06
Less distributions:
Dividends from net investment
income (.03) (.01) (.08) (.10) (.08)
Distributions from realized gains (1.00) (1.49) (1.71) -- --
Excess distributions from
realized gains -- (.01) -- -- --
Total distributions (1.03) (1.51) (1.79) (.10) (.08)
Net asset value, end of period $14.48 $13.10 $17.17 $16.04 $14.44
Ratios/supplemental data
1999b 1998 1997 1996 1995
Net assets, end of period
(in millions) $2,231 $1,976 $2,427 $1,941 $1,412
Ratio of expenses to average daily
net assets .68%c .66% .68% .69% .70%
Ratio of net investment income
(loss) to average daily net assets .54%c .08% .47% .65% .72%
Portfolio turnover rate (excluding
short-term securities) 94% 176% 218% 189% 116%
Total returnd 18.85% (16.40%) 18.60% 11.82% 26.80%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 28, 1999 (Unaudited).
c Adjusted to an annual basis.
d Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Global Yield Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changesa
1999c 1998 1997 1996b
Net asset value, beginning
<S> <C> <C> <C> <C>
of period $10.09 $10.32 $10.08 $10.00
Income from investment operations:
Net investment income (loss) .30 .60 .51 .12
Net gains (losses) (both realized
and unrealized) .13 (.21) .14 .07
Total from investment operations .43 .39 .65 .19
Less distributions:
Dividends from net investment
income (.26) (.58) (.41) (.11)
Distributions from realized gains -- (.04) -- --
Total distributions (.26) (.62) (.41) (.11)
Net asset value, end of period $10.26 $10.09 $10.32 $10.08
Ratios/supplemental data
1999c 1998 1997 1996b
Net assets, end of period
(in millions) $204 $183 $119 $21
Ratio of expenses to average daily
net assets .96%d .95% .97% 1.77%d
Ratio of net investment income
(loss) to average daily net assets 5.55%d 5.81% 5.66% 4.96%d
Portfolio turnover rate (excluding
short-term securities) 1% 14% 36% 4%
Total returne 4.23% 3.82% 6.47% 2.00%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Commencement of operations. Period from May 1, 1996 to Aug. 31, 1996.
c Six months ended Feb. 28, 1999 (Unaudited).
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to financial statements
Growth Dimensions Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes(a)
1999c 1998 1997 1996b
Net asset value, beginning
<S> <C> <C> <C> <C>
of period $13.29 $12.95 $9.94 $10.00
Income from investment operations:
Net investment income (loss) .03 .08 .10 .03
Net gains (losses) (both realized
and unrealized) 4.42 .34 3.01 (.06)
Total from investment operations 4.45 .42 3.11 (.03)
Less distributions:
Dividends from net investment
income (.03) (.08) (.10) (.03)
Distributions from realized gains (.02) -- -- --
Total distributions (.05) (.08) (.10) (.03)
Net asset value, end of period $17.69 $13.29 $12.95 $9.94
Ratios/supplemental data
1999c 1998 1997 1996b
Net assets, end of period
(in millions) $2,921 $1,960 $1,307 $171
Ratio of expenses to average
daily net assets .69%d .69% .72% 1.04%d
Ratio of net investment income
(loss) to average daily net assets .42%d .59% 1.04% 1.69%d
Portfolio turnover rate (excluding
short-term securities) 15% 34% 29% 4%
Total return(e) 33.49% 3.19% 31.40% (.22%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Commencement of operations. Period from May 1, 1996 to Aug. 31, 1996.
c Six months ended Feb. 28, 1999 (Unaudited).
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Advantage Fund
Financial highlights
Fiscal period ended Aug. 31,
Per share income and capital changes(a)
1999c 1998 1997 1996b
Net asset value, beginning
<S> <C> <C> <C> <C>
of period $9.54 $10.39 $9.77 $10.00
Income from investment operations:
Net investment income (loss) .45 .95 .88 .18
Net gains (losses) (both realized
and unrealized) (.37) (.80) .62 (.23)
Total from investment operations .08 .15 1.50 (.05)
Less distributions:
Dividends from net investment
income (.45) (.95) (.88) (.18)
Distributions from realized gains (.11) (.05) -- --
Total distributions (.56) (1.00) (.88) (.18)
Net asset value, end of period $9.06 $9.54 $10.39 $9.77
Ratios/supplemental data
1999c 1998 1997 1996b
Net assets, end of period
(in millions) $609 $564 $320 $49
Ratio of expenses to average
daily net assets .71%d .69% .69% 1.53%d
Ratio of net investment income
(loss) to average daily net assets 10.28%d 9.21% 8.88% 8.14%d
Portfolio turnover rate (excluding
short-term securities) .23% 66% 104% 22%
Total returne .92% 1.03% 16.80% (.50%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Commencement of operations. Period from May 1, 1996 to Aug. 31, 1996.
c Six months ended Feb. 28, 1999 (Unaudited).
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Capital Resource Fund
Feb. 28, 1999 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Common stocks (98.1%)
Issuer Shares Value(a)
Aerospace & defense (0.9%)
Raytheon Cl B 900,000 $48,093,750
Automotive & related (2.4%)
Federal-Mogul 1,300,000 63,943,750
General Motors 400,000 33,025,000
Lear 1,000,000(b) 35,312,500
Total 132,281,250
Banks and savings & loans (2.1%)
State Street 1,000,000 76,687,500
Washington Mutual 1,000,000 40,000,000
Total 116,687,500
Beverages & tobacco (1.5%)
Coca-Cola 1,300,000 83,118,750
Building materials & construction (1.4%)
Masco 1,600,000 42,000,000
Weyerhaeuser 650,000 36,237,500
Total 78,237,500
Communications equipment & services (1.2%)
Lucent Technologies 650,000 66,015,625
Computers & office equipment (20.8%)
3Com 1,500,000(b) 47,156,250
America Online 450,000(b) 40,021,875
Ascend Communications 300,000(b) 23,081,250
BMC Software 850,000(b) 34,743,750
Cisco Systems 1,000,000(b) 97,812,500
Compaq Computer 2,080,000 73,320,000
Computer Sciences 1,000,000 66,625,000
Electronic Data Systems 1,000,000 46,500,000
EMC 400,000(b) 40,950,000
Equant 396,000(b,c) 28,512,000
First Data 1,500,000 57,375,000
Hewlett-Packard 800,000 53,150,000
Intl Business Machines 600,000 102,000,000
Microsoft 1,100,000(b) 165,137,499
Network Associates 1,000,000(b) 47,000,000
Novell 1,500,000(b) 29,062,500
Parametric Technology 2,500,000(b) 38,437,500
Solectron 1,700,000(b) 75,968,750
Unisys 2,500,000 74,531,250
Yahoo! 120,000(b) 18,420,000
Total 1,159,805,124
<PAGE>
Electronics (4.6%)
Intel 900,000 $107,943,750
Jabil Circuit 150,000 4,893,750
Teradyne 750,000(b) 35,718,750
Texas Instruments 1,200,000 107,025,000
Total 255,581,250
Energy (3.0%)
Anadarko Petroleum 1,200,000 33,000,000
Exxon 1,200,000 79,875,000
Texaco 500,000 23,281,250
Tosco 1,500,000 31,031,250
Total 167,187,500
Financial services (5.0%)
Associates First Capital Cl A 2,000,000 81,250,000
Citigroup 1,000,000 58,750,000
MBNA 2,000,000 48,500,000
Morgan Stanley, Dean
Witter, Discover & Co 1,000,000 90,500,000
Total 279,000,000
Food (0.8%)
Sara Lee 1,600,000 43,500,000
Health care (7.4%)
Bristol-Myers Squibb 800,000 100,750,000
Guidant 1,000,000 57,000,000
Medtronic 100,000 7,062,500
Merck & Co 1,400,000 114,450,000
Pfizer 800,000 105,550,000
Warner-Lambert 400,000 27,625,000
Total 412,437,500
Health care services (1.3%)
United Healthcare 1,500,000 73,968,750
Household products (2.6%)
Colgate-Palmolive 400,000 33,950,000
Gillette 900,000 48,262,500
Procter & Gamble 700,000 62,650,000
Total 144,862,500
Industrial equipment & services (2.8%)
Illinois Tool Works 1,500,000 103,125,000
Ingersoll-Rand 1,100,000 52,250,000
Total 155,375,000
<PAGE>
See accompanying notes to investments in securities.
Common stocks (continued)
Issuer Shares Value(a)
Insurance (5.7%)
ACE 2,000,000(c) $54,500,000
American Intl Group 900,000 102,543,750
Lincoln Natl 700,000 66,281,250
Progressive Corp 750,000 96,375,000
Total 319,700,000
Leisure time & entertainment (0.7%)
Carnival Cl A 900,000 40,050,000
Media (4.0%)
Clear Channel
Communications 1,000,000(b) 60,000,000
Comcast Special Cl A 675,000 47,882,814
Infinity Broadcasting Cl A 1,830,000(b) 43,462,500
MediaOne Group 1,350,000(b) 73,575,000
Total 224,920,314
Multi-industry conglomerates (5.5%)
General Electric 1,600,000 160,500,000
Tyco Intl 2,000,000(c) 148,875,000
Total 309,375,000
Paper & packaging (1.0%)
Earthshell 400,000(b) 3,725,000
Willamette Inds 1,500,000 54,656,250
Total 58,381,250
Restaurants & lodging (1.2%)
Wendy's Intl 2,700,000 64,631,250
<PAGE>
Retail (17.8%)
Circuit City Stores 1,300,000 $70,525,000
CVS 1,500,000 79,500,000
Dayton Hudson 1,700,000 106,356,250
Gap 1,800,000 116,437,500
Home Depot 1,500,000 89,531,250
Kohl's 1,200,000(b) 82,800,000
Meyer (Fred) 500,000(b) 32,125,000
Office Depot 2,200,000(b) 78,512,500
Rite Aid 1,800,000 74,475,000
Safeway 2,300,000(b) 132,825,000
Wal-Mart Stores 1,500,000 129,562,500
Total 992,650,000
Transportation (1.2%)
Burlington Northern Santa Fe 750,000 24,843,750
Canadian Natl Railway 500,000(c) 24,156,250
Union Pacific 400,000 18,750,000
Total 67,750,000
Utilities -- gas (0.5%)
Enron 400,000 26,000,000
Utilities -- telephone (2.7%)
AT&T 1,250,000 102,656,250
MCI WorldCom 600,000(b) 49,500,000
Total 152,156,250
Total common stocks
(Cost: $3,876,483,600) $5,471,766,063
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Capital Resource Fund
(Percentages represent
value of investments
compared to net assets)
Short-term securities (1.3%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (0.7%)
Federal Home Loan Mtge Corp Disc Nts
03-02-99 4.79% $1,400,000 $1,399,445
03-16-99 4.75 1,900,000 1,895,761
03-19-99 4.75 900,000 897,640
03-23-99 4.7 915,000,000 14,952,199
03-31-99 4.76 5,700,000 5,675,984
Federal Natl Mtge Assn Disc Nt
03-24-99 4.76 10,000,000 9,967,014
Total 34,788,043
Commercial paper (0.6%)
AT&T
03-30-99 4.85 4,200,000 4,182,531
Ciesco LP
04-09-99 4.85 7,400,000 7,359,294
CXC
03-04-99 4.90 2,100,000(d) 2,098,580
Falcon Asset
03-18-99 4.87 5,500,000(d) 5,485,921
Fleet Funding
03-10-99 4.85% $3,700,000(d) $3,694,539
Ford Motor Credit
03-02-99 4.85 4,100,000 4,098,343
GTE Funding
03-26-99 4.84 4,000,000 3,985,540
Merrill Lynch
03-03-99 4.82 5,500,000 5,497,067
Salomon Smith Barney
03-03-99 4.83 1,700,000 1,699,090
Total 38,100,905
Total short-term securities
(Cost: $72,888,948) $72,888,948
Total investments in securities
(Cost: $3,949,372,548)(e) $5,544,655,011
See accompanying notes to investments in securities.
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. As of Feb. 28, 1999, the
value of foreign securities represented 4.59% of net assets.
(d) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(e) At Feb. 28, 1999, the cost of securities for federal income tax purpose was
approximately $3,949,373,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation....................................$1,690,225,000
Unrealized depreciation...................................... (94,943,000)
Net unrealized appreciation................................$1,595,282,000
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Special Income Fund
Feb. 28, 1999 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Bonds (92.3%)
Issuer Coupon Principal Value(a)
rate amount
Government obligations (17.6%)
City of Moscow
(U.S. Dollar) Zero Coupon
12-31-98 21.80% $6,153,151(c,f) $954,354
Govt of Algeria
(U.S. Dollar)
03-04-00 7.06 1,636,364(c) 1,341,818
09-04-06 6.60 2,672,727(c) 1,122,545
Govt of Canada
(Canadian Dollar)
03-01-01 10.50 17,000,000(c) 12,351,687
Govt of Poland
(Polish Zloty)
06-12-02 12.00 18,900,000(c) 4,960,951
Govt of Russia
(Russian Ruble)
09-27-00 14.00 25,337,218(b,c) 32,789
12-15-20 6.63 11,600,000(c,f) 826,500
(Russian Ruble) Zero Coupon
01-27-99 10.00 46,597,000(b,c,f,m) --
05-05-99 -- 7,747,000(b,c,f,m) --
(U.S. Dollar)
07-24-05 8.75 2,725,000(c,e) 599,500
06-24-28 12.75 1,230,000(c,e) 328,256
12-29-49 6.63 13,109,370(c) 1,343,710
Province of Mendoza
(U.S. Dollar)
09-04-07 10.00 3,200,000(c,e) 2,060,000
Republic of Argentina
(Argentine Peso)
07-10-02 8.75 8,500,000(c,e) 6,802,517
07-10-02 8.75 2,500,000(c) 2,000,740
02-12-07 11.75 8,500,000(c) 6,805,313
(U.S. Dollar)
12-04-05 11.00 5,500,000(c) 4,950,000
Republic of Colombia
(U.S. Dollar)
02-15-27 8.38 5,000,000(c,d) 3,737,500
Republic of Korea
(U.S. Dollar)
04-15-08 8.88 4,500,000(c) 4,756,703
Republic of Philippines
(U.S. Dollar)
01-15-19 9.88 4,500,000(c) 4,473,806
Resolution Funding Corp
10-15-19 8.13 38,059,000 47,237,293
U.S. Treasury
11-30-99 5.63 14,000,000 14,072,667
11-15-00 5.75 5,000,000 5,047,991
05-15-02 7.50 6,170,000 6,574,184
06-30-02 6.25 17,000,000(d) 17,512,317
08-15-02 6.38 10,900,000 11,272,782
03-31-03 5.50 7,500,000 7,554,049
08-15-04 7.25 8,200,000 8,933,241
11-15-05 5.88 40,000,000 41,098,764
05-15-16 7.25 12,700,000(o) 14,671,186
11-15-16 7.50 39,750,000 47,064,270
<PAGE>
02-15-21 7.88% $3,700,000 $4,624,957
United Kingdom Treasury
(British Pound)
06-10-03 8.00 9,500,000(c) 17,147,234
United Mexican States
(U.S. Dollar)
02-17-09 10.38 9,000,000(c) 8,910,000
12-31-19 6.25 15,000,000(c) 11,193,750
05-15-26 11.50 8,250,000(c,d) 8,652,188
Total 331,015,562
Mortgage-backed securities (12.6%)
Federal Home Loan Mtge Corp
05-01-07 9.00 4,478,970 4,629,688
03-01-13 5.50 4,637,752 4,512,688
08-01-24 8.00 3,740,495 3,894,266
01-01-25 9.00 1,033,073 1,095,884
07-01-28 6.00 9,780,732 9,491,222
09-01-28 6.00 29,600,854 28,730,911
Collateralized Mtge Obligation
03-15-22 7.00 10,455,000 10,451,276
04-15-22 8.50 10,000,000 10,461,700
07-15-22 7.00 12,940,000 12,958,763
Federal Natl Mtge Assn
09-01-07 8.50 4,925,780 5,089,957
11-01-21 8.00 393,225 410,676
04-01-22 8.00 2,465,476 2,574,894
04-01-23 8.50 4,819,646 5,105,162
06-01-24 9.00 4,861,088 5,200,683
02-01-27 7.50 10,671,249 10,958,519
09-01-28 6.50 14,797,658 14,704,433
10-01-28 6.00 20,223,743 19,612,379
11-01-28 6.00 9,095,722 8,820,758
11-01-28 6.50 19,864,532 19,740,378
01-01-29 6.50 19,958,544 19,832,805
12-01-29 6.50 24,879,889 24,723,147
Collateralized Mtge Obligation
05-18-26 5.00 10,000,000 9,168,219
Govt Natl Mtge Assn
06-20-24 6.88 3,896,965(j) 3,974,904
Total 236,143,312
Aerospace & defense (0.6%)
BE Aerospace
Sr Sub Nts
11-01-08 9.50 2,500,000 2,656,250
Sr Sub Nts Series B
02-01-06 9.88 5,000,000 5,187,500
L-3 Communications
Sr Sub Nts Series B
05-01-07 10.38 1,710,000 1,885,275
Newport News Shipbuilding
Sr Nts
12-01-06 8.63 1,250,000 1,340,625
Total 11,069,650
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Airlines (0.3%)
AMR
05-15-01 9.50% $4,500,000 $4,801,234
Automotive & related (1.2%)
Arvin Capital
Company Guaranty
02-01-27 9.50 5,000,000 5,421,936
Ford Motor Credit
01-15-03 7.50 5,000,000 5,249,624
Hayes Lemmerz Intl
Company Guaranty Series B
07-15-07 9.13 3,000,000 3,172,500
MSX Intl
Company Guaranty
01-15-08 11.38 2,450,000 2,431,625
Trident Automotive
Sr Sub Nts Series B
12-15-05 10.00 5,300,000 5,459,000
Total 21,734,685
Banks and savings & loans (4.7%)
Banca Commercial Italian
(U.S. Dollar)
07-15-07 8.25 5,000,000(c) 5,449,519
Bank One
Medium-term Nts Series A
02-17-09 6.00 15,000,000 14,573,371
BankBoston Capital
Company Guaranty Series B
12-15-26 8.25 5,000,000 5,114,985
Crestar Capital
Company Guaranty
12-15-26 8.16 5,000,000 5,357,621
Cullen/Frost Capital
Series A
02-01-27 8.42 5,000,000 5,107,640
Dao Heng Bank
(U.S. Dollar) Sub Nts
01-24-07 7.75 9,000,000(c,e) 7,139,159
Fleet Financial Group
06-15-01 9.90 5,000,000 5,421,692
12-01-01 9.00 5,000,000 5,384,056
Greenpoint Capital
Company Guaranty
06-01-27 9.10 2,500,000 2,704,574
Mellon Capital
Company Guaranty Series A
12-01-26 7.72 2,000,000 2,053,075
Morgan (JP)
Sr Sub Medium-term Nts Series A
02-15-12 4.00 13,400,000(h) 11,901,477
<PAGE>
Provident Trust
Company Guaranty
04-15-28 8.29% $5,500,000 $5,847,224
Union Planters Bank
Sub Nts
03-15-18 6.50 5,000,000 4,853,989
US Capital
02-01-27 8.41 3,500,000(e) 3,585,109
Washington Mutual Capital
Company Guaranty
06-01-27 8.38 3,000,000(e) 3,238,584
Wilshire Financial Services
Series B
08-15-04 13.00 6,000,000(b) 960,000
Total 88,692,075
Building materials & construction (0.5%)
Masco
10-01-01 9.00 5,000,000 5,378,848
Tyco Intl Group
(U.S. Dollar) Company Guaranty
01-15-29 6.88 4,300,000(c) 4,237,850
Total 9,616,698
Chemicals (0.3%)
Allied Waste North America
Sr Nts
01-01-09 7.88 4,950,000(e) 5,011,875
Commercial finance (0.1%)
Netia Holdings
(U.S. Dollar) Company Guaranty Series B
11-01-07 10.25 2,000,000(c) 1,885,000
Communications equipment & services (3.3%)
Celcaribe
Sr Nts
03-15-04 13.50 1,700,000 1,440,750
Units
03-15-04 13.50 1,450,000(e) 2,584,625
Comcast Cellular Holdings
Sr Nts Series B
05-01-07 9.50 3,000,000 3,423,750
EchoStar DBS
Sr Nts
02-01-09 9.38 2,050,000(e) 2,065,375
Iridium LLC/Capital
Company Guaranty Series A
07-15-05 13.00 4,000,000 3,280,000
IXC Communications
Sr Sub Nts
04-15-08 9.00 2,000,000 2,120,000
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Special Income Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
KMC Telecom Holdings
Zero Coupon Sr Disc Nts
02-15-03 12.68% $3,000,000(g) $1,590,000
Level 3 Communications
Sr Nts
05-01-08 9.13 1,375,000 1,340,625
MJD Communications
Sr Sub Nts Series B
05-01-08 9.50 1,000,000 1,010,000
Nextel Communications
Sr Disc Nts
01-15-04 10.13 4,000,000 4,060,000
NTL
Zero Coupon Sr Nts
10-01-03 7.87 9,625,000(g) 6,605,156
Zero Coupon Sr Nts Series B
02-01-01 11.48 5,000,000(g) 4,350,000
PhoneTel Technologies
Sr Nts
12-15-06 12.00 8,500,000(b) 3,825,000
Poland Telecom
(U.S. Dollar) Company Guaranty
06-01-04 14.00 5,000,000(c) 2,750,000
RCN
Zero Coupon Sr Disc Nts Series B
02-15-03 9.80 2,870,000(g) 1,549,800
TCI Telecommunications
Sr Nts
02-15-28 7.13 2,000,000 2,111,928
Telehub Communications
Zero Coupon Company Guaranty
07-31-01 13.88 2,500,000(g) 1,521,875
Triton Communications
Zero Coupon Company Guaranty
05-01-03 13.92 2,000,000(g) 1,135,000
US West Capital Funding
Company Guaranty
07-15-28 6.88 9,250,000 9,407,800
Versatel Telecom
(U.S. Dollar) Sr Nts
05-15-08 13.25 5,500,000(c) 5,637,500
Total 61,809,184
Computers & office equipment (0.8%)
At Home
Cv Sub Deb
12-12-18 .53 1,250,000(e) 935,738
Globix
Sr Nts
05-01-05 13.00 3,410,000 3,034,900
Hewlett-Packard
Zero Coupon Cv Sub Nts
10-15-17 3.12 5,000,000(e,f) 2,737,500
<PAGE>
PSINet
Sr Nts Series B
02-15-05 10.00% $3,005,000 $3,125,200
Solectron
Cv Sub Nts
01-27-19 4.00 5,500,000(e) 2,626,250
Verio
Sr Nts
12-01-08 11.25 2,250,000(e) 2,430,000
Total 14,889,588
Electronics (0.8%)
Hyundai Semiconductor
(U.S. Dollar) Sr Nts
05-15-07 8.63 8,500,000(c,e) 7,470,782
Kent Electronics
Cv Sub Nts
09-01-04 4.50 1,250,000 965,625
STMicroelectronics
(U.S. Dollar) Zero Coupon Cv Sub Nts
06-10-08 .50 2,150,000(c,f) 1,999,436
Thomas & Betts
01-15-06 6.50 4,500,000 4,526,721
Total 14,962,564
Energy (3.5%)
Forcenergy
Sr Sub Nts
11-01-06 9.50 2,100,000 756,000
Gulf Canada Resources
(U.S. Dollar)
08-15-99 9.00 5,000,000(c) 5,034,996
Honam Oil Refinery
(U.S. Dollar)
10-15-05 7.13 9,000,000(c,e) 8,234,999
Lodestar Holdings
Company Guaranty
05-15-05 11.50 5,000,000 4,212,500
Michael Petroleum
Sr Nts Series B
04-01-05 11.50 1,250,000 904,688
Occidental Petroleum
Medium-term Nts
06-01-00 10.98 5,000,000 5,232,707
Medium-term Nts with attached put
08-01-19 9.25 8,725,000 9,624,392
Oryx Energy
04-01-01 10.00 5,000,000 5,325,557
PDV America
Sr Nts
08-01-03 7.88 7,500,000 6,718,316
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Pennzenergy
Cv
08-15-08 4.90% $1,250,000 $1,218,750
R & B Falcon
04-15-08 6.95 5,000,000 4,051,864
Roil
(U.S. Dollar)
12-05-02 12.78 5,220,000(c,e) 939,600
Swift Energy
Cv Sub Nts
11-15-06 6.25 1,090,000 784,800
Union Pacific Resources
05-15-28 7.15 7,500,000 6,593,057
USX
03-01-08 6.85 6,500,000 6,351,226
Total 65,983,452
Energy equipment & services (0.7%)
DI Inds
Sr Nts
07-01-07 8.88 2,250,000 1,665,000
Global Marine
09-01-07 7.13 10,000,000 10,034,610
Pride Intl
Zero Coupon Cv Sub Deb
04-24-18 5.84 5,000,000(f) 1,100,000
Total 12,799,610
Financial services (4.1%)
Airplanes GPA Cl D
(U.S. Dollar) Series 1
03-15-19 10.88 2,750,000(c) 2,982,100
AirTours
(British Pound) Cv Sub Nts
01-05-04 5.75 750,000(c) 1,409,594
American General Finance
Sr Nts
11-01-03 5.75 5,000,000 4,941,383
Arcadia Financial
Sr Nts
03-15-07 11.50 3,645,000 2,947,894
Associates
11-01-03 5.75 6,700,000 6,650,892
Beneficial
Medium-term Nts
02-18-13 6.25 10,000,000 10,048,213
California Infrastructure-
Southern California Edison
03-25-02 6.14 9,235,000 9,290,410
Ford Capital
05-15-02 9.88 5,000,000 5,552,632
Household Finance
04-01-00 9.55 6,500,000 6,749,189
<PAGE>
Marlin Water Trust
Sr Nts
12-15-01 7.09% $10,000,000 $10,010,936
Ohio Savings Capital
Company Guaranty
06-03-27 9.50 5,000,000 5,846,799
Salomon
Medium-term Sr Nts Series D
10-06-99 6.99 5,000,000 5,049,700
SASCO
02-25-28 6.76 2,500,000 2,509,000
Tjiwi Kimia Finance Mauritius
(U.S. Dollar) Company Guaranty
08-01-04 10.00 4,350,000(c) 2,305,500
Total 76,294,242
Food (0.3%)
Ameriserve Food Distributions
Company Guaranty
07-15-07 10.13 2,500,000 2,134,375
Daya Guna
(U.S. Dollar) Company Guaranty
06-01-07 10.00 4,750,000(c,e) 2,994,014
Total 5,128,389
Furniture & appliances (0.3%)
Interface
Sr Sub Nts Series B
11-15-05 9.50 5,000,000 5,287,500
Health care (0.7%)
Elan Finance
Zero Coupon Cv Company Guaranty
12-14-18 7.28 2,500,000(e,f) 1,503,125
Lilly (Eli)
01-01-36 6.77 10,000,000 9,958,366
Sepracor
Cv
12-15-05 7.00 2,000,000(e) 2,465,000
Total 13,926,491
Health care services (1.9%)
Abbey Healthcare Group
Sr Sub Nts
11-01-02 9.50 250,000 245,625
Columbia/HCA Healthcare
06-15-25 7.69 4,260,000 3,754,199
Fountain View
Company Guaranty Series B
04-15-08 11.25 2,150,000 1,886,625
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Special Income Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Magellan Health Services
Sr Sub Nts
02-15-08 9.00% $2,500,000 $2,162,500
Novacare
Cv Sub Deb
01-15-00 5.50 2,950,000 2,079,750
Owens & Minor
Company Guaranty Sr Sub Nts
06-01-06 10.88 4,550,000 4,874,188
Oxford Health Plans
Sr Nts
05-15-05 11.00 1,125,000(e) 1,147,500
Service Corp Intl
03-15-20 6.30 11,000,000 10,800,868
Tenet Healthcare
Sr Sub Nts
12-01-08 8.13 9,000,000(e) 8,929,734
Total 35,880,989
Household products (0.4%)
Chattem
Company Guaranty Series B
04-01-08 8.88 2,200,000 2,233,000
Revlon Consumer Products
Sr Nts
02-01-06 8.13 4,250,000 4,048,125
Scotts
Sr Sub Nts
01-15-09 8.63 585,000(e) 601,088
Total 6,882,213
Industrial equipment & services (0.8%)
AGCO
Sr Sub Nts
03-15-06 8.50 1,025,000 954,531
Case
08-01-05 7.25 5,475,000 5,544,245
Clark Equipment
03-01-01 9.75 5,000,000 5,332,062
Terex
Company Guaranty
04-01-08 8.88 3,800,000(d) 3,771,500
Total 15,602,338
Insurance (2.3%)
Americo Life
Sr Sub Nts
06-01-05 9.25 4,500,000 4,606,875
Berkshire Hathaway
Cv Sr Nts
12-02-01 1.00 800,000 1,422,000
Executive Risk Capital
Company Guaranty Series B
02-01-27 8.68 3,500,000 3,786,691
<PAGE>
Nationwide CSN Trust
02-15-25 9.88% $10,500,000(e) $12,390,235
New England Mutual
02-15-24 7.88 5,000,000(e) 5,046,115
SAFECO Capital
Company Guaranty
07-15-37 8.07 10,000,000 10,096,007
Veritas Holdings
(U.S. Dollar) Sr Nts
12-15-03 9.63 2,545,000(c) 2,538,638
Zurich Capital
(U.S. Dollar) Company Guaranty
06-01-37 8.38 3,750,000(c,e) 4,040,512
Total 43,927,073
Leisure time & entertainment (3.5%)
AMC Entertainment
Sr Sub Nts
02-01-11 9.50 5,000,000(e) 4,900,000
Coast Hotels & Casino
Company Guaranty Series B
12-15-02 13.00 1,600,000 1,882,000
Hammons (JQ) Hotels
1st Mtge
02-15-04 8.88 3,400,000 3,213,000
Loews Cineplex Entertainment
Sr Sub Nts
08-01-08 8.88 4,500,000 4,477,500
Premier Parks
Sr Nts
04-01-06 9.25 2,150,000 2,316,625
Zero Coupon Sr Disc Nts
04-01-03 10.00 5,250,000(g) 3,681,563
Speedway Motorsports
08-15-07 8.50 4,000,000 4,205,000
Time Warner
08-15-04 7.98 1,500,000 1,616,457
08-15-06 8.11 3,000,000 3,318,776
08-15-07 8.18 3,000,000 3,358,770
02-01-24 7.57 20,000,000 21,606,868
Sr Nts
01-15-28 6.95 5,000,000 5,068,301
Trump Holdings & Funding
Sr Nts
06-15-05 15.50 2,500,000 2,493,750
United Artists Theatres
Series 1995A
07-01-15 9.30 4,722,378 4,257,601
Total 66,396,211
Media (5.3%)
Ackerley Group
Sr Sub Nts
01-15-09 9.00 2,850,000 2,964,000
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Australis Media
(U.S. Dollar)
11-01-00 14.00% $397,098(c) $322,069
05-15-03 15.75 81,770(b,c) 8
(U.S. Dollar) Zero Coupon
05-15-03 15.75 10,000,000(b,c,g) 1,000
Benedek Broadcasting
Sr Nts
03-01-05 11.88 1,500,000 1,623,750
Chancellor Media
Sr Nts
11-01-08 8.00 10,000,000(e) 10,600,000
Clear Channel Communications
Cv Sr Nts
04-01-03 2.63 2,000,000 2,275,000
Comcast Cable Communications
11-15-08 6.20 6,100,000 6,046,810
Cox Communications
06-15-25 7.63 10,000,000 11,108,143
CSC Holdings
Sr Sub Deb
05-15-16 10.50 5,000,000 6,075,000
Emmis Communications
Sr Sub Nts
03-15-09 8.13 1,800,000(e) 1,804,500
Globo Communicacoes Participacoes
(U.S. Dollar) Sr Nts
12-05-08 10.63 8,000,000(c,e) 4,440,000
Groupe Videotron
(U.S. Dollar) Sr Nts
02-15-05 10.63 2,000,000(c) 2,167,500
Heritage Media
Sr Sub Nts
02-15-06 8.75 2,000,000 2,147,500
Lamar Advertising
Company Guaranty
12-01-06 9.63 1,350,000 1,461,375
Liberty Group Operating
Company Guaranty
02-01-08 9.38 1,075,000 1,096,500
MDC Communications
(U.S. Dollar) Sr Sub Nts
12-01-06 10.50 1,700,000(c) 1,717,000
News America Holdings
10-15-12 10.13 10,000,000 11,447,668
Rogers Cablesystems
(Canadian Dollar)
01-15-14 6.56 2,700,000(c) 1,836,021
Spanish Broadcasting System
06-15-02 12.50 1,680,000 1,856,400
STC Broadcasting
Sr Sub Nts
03-15-07 11.00 6,750,000 7,197,188
TCI Communications
08-01-15 8.75 5,000,000 6,170,841
<PAGE>
Telewest Communication
(British Pound) Cv
02-19-07 5.25% 1,020,000(c) $1,661,578
Time Warner Entertainment
Sr Nts
07-15-33 8.38 2,500,000 2,985,948
TV Azteca
(U.S. Dollar)
02-15-07 10.50 2,500,000(c) 2,025,000
Veninfotel
(U.S. Dollar) Cv Pay-in-kind
03-01-02 10.00 6,037,500(c,k,n) 9,056,250
Total 100,087,049
Metals (1.9%)
Alcan Aluminum
(U.S. Dollar)
01-15-22 8.88 6,750,000(c) 7,334,024
Bar Technologies
Company Guaranty
04-01-01 13.50 4,500,000(e) 4,747,500
EnviroSource
Sr Nts
06-15-03 9.75 890,000 772,075
Sr Nts Series B
06-15-03 9.75 2,100,000 1,821,750
Grupo Minero Mexico
(U.S. Dollar) Company Guaranty Series A
04-01-08 8.25 4,500,000(c) 3,825,000
Imexsa Export Trust
(U.S. Dollar)
05-31-03 10.13 4,604,820(c,e) 4,167,362
Southern Peru Copper
(U.S. Dollar)
05-30-07 7.90 2,000,000(c) 1,801,552
WMC Finance USA
(U.S. Dollar)
11-15-13 7.25 10,000,000(c) 10,613,981
Total 35,083,244
Miscellaneous (4.0%)
Adams Outdoor Advertising
Sr Nts
03-15-06 10.75 4,500,000 4,910,625
Advance Stores
Company Guaranty Series B
04-15-08 10.25 3,700,000 3,792,500
Advanced Glassfiber Yarn
Sr Sub Nts
01-15-09 9.88 1,770,000(e) 1,792,125
Alliance Imaging
Sr Sub Nts
12-15-05 9.63 3,000,000 2,955,000
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Special Income Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Azteca Holdings
(U.S. Dollar)
06-15-02 11.00% $3,500,000(c,d) $2,992,500
Bistro Trust
Sub Nts
12-31-02 9.50 10,000,000(e) 9,581,000
Colonial Capital
Company Guaranty Series A
01-15-27 8.92 3,000,000 2,978,082
Continucare
Cv Sr Sub Nts
10-31-02 8.00 1,000,000 342,500
CTI Holdings
(U.S. Dollar) Zero Coupon Sr Nts
04-15-08 11.50 3,325,000(c,g) 1,463,000
Delphes 2
(U.S. Dollar)
05-05-09 7.75 4,500,000(c) 4,455,000
FCB/NC Capital
Company Guaranty
03-01-28 8.05 4,625,000 4,844,934
Great Central Mines
(U.S. Dollar) Sr Nts
04-01-08 8.88 2,500,000(c,e) 2,475,000
Guangdong Enterprises
(U.S. Dollar) Sr Nts
05-22-07 8.88 3,600,000(c,e) 1,170,398
Jasmine Submarine Telecom
(U.S. Dollar) Sr Nts
05-30-11 8.48 1,172,625(c,e) 954,272
Jorgensen (Earle M)
Sr Nts
04-01-05 9.50 1,225,000 1,127,000
Network Associates
Zero Coupon Cv Sub Deb
02-13-18 3.24 3,700,000(f) 1,752,875
Nextel Partners
Zero Coupon Sr Disc Nts
02-01-04 13.60 9,600,000(e,g) 5,076,000
NSM Steel
Company Guaranty
02-01-06 12.00 2,125,000(b,e) 425,000
02-01-08 12.25 5,300,000(b,e) 477,000
Outsourcing Solutions
Sr Sub Nts Series B
11-01-06 11.00 1,775,000 1,748,375
Pindo Deli Finance Mauritius
(U.S. Dollar) Company Guaranty
10-01-07 10.75 2,200,000(c) 1,166,000
Provident Companies
03-15-38 7.41 11,000,000 10,950,775
PTC Intl Finance
(U.S. Dollar) Zero Coupon Company Guaranty
07-01-02 10.75 6,000,000(c,g) 4,290,000
<PAGE>
Purina Mills
Sr Sub Nts
03-15-10 9.00% $1,475,000 $1,380,969
Stellex Inds
Sr Sub Nts Series B
11-01-07 9.50 1,500,000 1,306,875
Transamerica Energy
06-15-02 11.50 1,000,000 300,000
Zero Coupon
06-15-99 13.00 2,100,000(g) 630,000
Total 75,337,805
Multi-industry conglomerates (2.1%)
Packaged Ice
Company Guaranty Series B
02-01-05 9.75 8,525,000 8,727,469
Pierce Leahy
Sr Sub Nts
07-15-06 11.13 812,000(e) 899,290
Prime Succession
Sr Sub Nts
08-15-04 10.75 1,635,000 1,177,200
Tenneco
06-15-07 7.63 6,000,000 6,061,016
US Inds/USI America Holdings
Company Guaranty
10-15-03 7.13 10,000,000(e) 9,804,109
USI American Holdings
Sr Nts Series B
12-01-06 7.25 5,000,000 5,072,982
Westinghouse Electric
06-01-01 8.88 5,000,000 5,229,661
Xerox
Cv Sub Deb
04-21-18 .57 3,200,000(e) 1,945,504
Total 38,917,231
Paper & packaging (2.2%)
APP Intl Finance
(U.S. Dollar)
10-01-05 11.75 5,000,000(c) 3,327,358
Chesapeake
05-01-03 9.88 5,000,000 5,660,213
Crown Cork & Seal
04-15-23 8.00 5,000,000 4,874,418
Gaylord Container
Sr Nts
06-15-07 9.75 2,200,000 2,101,000
Sr Nts Series B
06-15-07 9.38 5,000,000 4,662,500
Graham Packaging/GPC Capital
Company Guaranty Series B
01-15-08 8.75 2,500,000 2,540,625
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Owens-Illinois
Sr Nts
05-15-04 7.85% $5,000,000 $5,120,724
Repap New Brunswick
(U.S. Dollar) Sr Nts
04-15-05 10.63 2,000,000(c) 1,510,000
Riverwood Intl
Company Guaranty
04-01-08 10.88 3,750,000 3,482,813
Silgan Holdings
06-01-09 9.00 4,125,000 4,238,438
Stone Container
Sr Sub Deb
04-01-02 12.25 3,000,000 3,022,500
Total 40,540,589
Restaurants & lodging (0.5%)
Domino's
Sr Sub Nts
01-15-09 10.38 3,275,000(e) 3,381,438
Extended Stay America
Sr Sub Nts
03-15-08 9.15 4,750,000 4,524,375
Signature Resorts
Sr Nts
05-15-06 9.25 1,900,000 1,824,000
Total 9,729,813
Retail (1.6%)
Amazon.com
Zero Coupon Sr Disc Nts
05-01-03 10.00 4,850,000(g) 3,110,063
Costco Companies
Zero Coupon Cv Sub Nts
08-19-17 .82 1,250,000(f) 1,153,125
Dayton Hudson
12-01-22 8.50 3,000,000 3,282,528
Eye Care Centers of America
Sr Sub Nts
05-01-08 9.13 4,000,000(e) 3,690,000
Home Depot
Cv Sub Nts
10-01-01 3.25 500,000 1,287,500
Kroger
Sr Nts
07-15-06 8.15 3,000,000 3,324,610
Rite Aid
Cv Sub Nts
09-15-02 5.25 875,000 1,111,250
Wal-Mart CRAVE Trust
07-17-06 7.00 12,237,423(e) 12,400,669
Total 29,359,745
<PAGE>
Textiles & apparel (0.4%)
Texon Intl
(Deutsche Mark) Sr Nts
02-01-08 3.11% 4,000,000(c) $1,978,822
VF Corp
05-01-01 9.50 5,000,000 5,344,864
Total 7,323,686
Transportation (1.0%)
Greater Beijing
(U.S. Dollar) Sr Nts
06-15-04 9.25 3,000,000(c) 1,710,000
06-15-07 9.50 5,500,000(c) 2,970,000
Hermes Europe Rail
(U.S. Dollar) Sr Nts
01-15-09 10.38 6,600,000(c,e) 6,979,500
Navigator Gas Transportation
(U.S. Dollar)
06-30-07 10.50 3,000,000(c,e) 2,381,250
Zhuhai Highway
(U.S. Dollar) Sub Nts
07-01-08 12.00 10,000,000(c,e) 5,350,000
Total 19,390,750
Utilities -- electric (5.8%)
Boston Edison
06-01-20 9.88 5,000,000 5,405,786
Cleveland Electric Illuminating
07-01-00 7.19 5,000,000 5,068,540
07-01-04 7.67 2,000,000 2,098,428
1st Mtge Series B
05-15-05 9.50 11,000,000 11,758,704
CMS Energy
Sr Nts
05-15-02 8.13 5,000,000 5,150,765
Connecticut Light & Power
1st Mtge Series C
06-01-02 7.75 5,000,000 5,141,268
Espirito Santo-Escelsa
(U.S. Dollar)
07-15-07 10.00 815,000(c) 456,400
Hydro-Quebec
(U.S. Dollar) Local Govt Guaranty Series 1989HH
12-01-29 8.50 20,000,000(c) 24,386,731
Korea Electric Power
(U.S. Dollar)
02-01-27 7.00 6,200,000(c) 5,741,979
Midland Cogeneration
Series 1991-C
07-23-02 10.33 1,245,926 1,328,469
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Special Income Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Midland Funding
Series 1994-C
07-23-02 10.33% $1,073,274 $1,144,378
Series A
07-23-05 11.75 5,000,000 5,731,250
Natl Power
(U.S. Dollar) Foreign Govt Guaranty
12-15-16 8.40 7,500,000(c) 5,711,916
Sithe Independence Funding
Series A
12-30-13 9.00 7,500,000 8,446,584
Texas Utilities Electric
Medium-term Nts 1st Mtge Series B
03-01-02 9.70 6,000,000 6,562,499
Texas-New Mexico Power
1st Mtge Series U
09-15-00 9.25 3,500,000 3,626,875
TU Electric Capital
Company Guaranty
01-30-37 8.18 10,000,000 10,529,304
Total 108,289,876
Utilities -- telephone (6.2%)
Bell Atlantic
08-01-31 9.00 7,500,000 8,238,136
Bell Atlantic Financial Services
Cv
09-15-05 4.25 2,375,000(e) 2,657,031
Bell Telephone of Pennsylvania
03-15-33 7.38 10,000,000 9,981,001
Call-Net Enterprises
(U.S. Dollar) Sr Nts
08-15-08 8.00 3,625,000(c) 3,461,875
Geotek Communications
Cv Sr Sub Nts
02-15-01 12.00 4,135,000(b) 5,169
Grupo Iusacell
(U.S. Dollar)
07-15-04 10.00 1,500,000(c) 1,365,000
Intermedia Communications
Sr Nts
03-01-09 9.50 5,000,000(e) 4,975,000
Sr Nts Series B
11-01-07 8.88 5,600,000 5,376,000
06-01-08 8.60 3,500,000(e) 3,316,250
Zero Coupon Sr Disc Nts
05-15-01 8.97 1,000,000(g) 820,000
<PAGE>
McLeod USA
Sr Nts
03-15-08 8.38% $1,535,000 $1,565,700
02-15-09 8.13 5,000,000(e) 4,962,500
Metrocall
Sr Sub Nts
10-01-07 10.38 1,750,000 1,701,875
MetroNet Communications
(U.S. Dollar) Sr Nts
11-01-08 10.63 4,000,000(c,e) 4,490,000
(U.S. Dollar) Zero Coupon Sr Disc Nts
06-15-03 9.95 3,800,000(c,g) 2,622,000
Omnipoint Communications
Sr Nts
08-15-06 11.63 10,000,000 7,962,500
Paging Network
Sr Sub Nts
08-01-07 10.13 3,250,000 2,827,500
Philippine Long Distance Telephone
(U.S. Dollar) Medium-term Nts Series E
03-06-07 7.85 3,000,000(c,d,e)2,563,432
03-06-17 8.35 8,000,000(c,e) 6,184,872
Qwest Communications Intl
11-01-08 7.50 13,250,000(e) 13,978,749
Sr Nts
11-01-08 7.25 1,750,000(e) 1,776,250
Rogers Cantel
(U.S. Dollar)
06-01-08 9.38 4,650,000(c) 5,132,438
RSL Communications
(U.S. Dollar) Company Guaranty
11-15-06 12.25 6,150,000(c) 6,657,375
U S WEST Communications
11-10-26 7.20 6,000,000 5,970,579
WorldCom
04-01-07 7.75 7,000,000 7,662,195
Total 116,253,427
Municipal bonds (0.4%)
New Jersey Economic Development
Authority State Pension Funding
Revenue Bond (MBIA Insured)
02-15-29 7.43 7,000,000(l) 7,816,900
Total bonds
(Cost: $1,798,033,814) $1,737,870,050
See accompanying notes to investments in securities.
<PAGE>
Common stocks (0.1%)
Issuer Shares Value(a)
BayCorp Holdings 28(b) $124
Celcaribe 276,420(b) 1,105,680
Intermedia Communications 3,727(b) 67,552
Nextel Communications Cl A 6,197(b) 186,297
Specialty Foods 15,000(b) 300
Total common stocks
(Cost: $519,580) $1,359,953
Preferred stocks & other (1.9%)
Bar Technologies
Warrants 4,500 $247,500
Bell Technology
Warrants 3,410 170,500
CNF Trust I
5.00% Cv Series A 34,000 2,031,500
Coltec Capital
5.25% Cv 45,500(e) 1,814,313
Dairy Mart
Warrants 10,000(e) 2,700
Federal-Mogul Finance Trust
7.00% Cm Cv 18,500 1,077,625
Finova Finance Trust
5.50% Cv 33,000 2,359,500
Geotek Communications
Warrants 250,000(m) --
Houston Inds
7.00% Cv ACES 11,250(i) 1,231,875
Intermedia Communications
7.00% Cv Series F 150,000 2,456,250
Intl Paper Capital
5.25% Cm Cv 26,250 1,275,803
KMC Telecom Holdings
Warrants 3,000 7,500
Lincoln Natl
7.75% Cm Cv 84,000(d) 2,194,500
MediaOne Group
4.50% Cm Cv Series D 10,750 1,171,750
<PAGE>
Nakornthai Strip Mill
Warrants 3,355,391 $3
Newell Financial Trust
5.25% Cm Cv 25,000 1,296,875
Owens-Illinois
Cv 40,000 1,555,000
Paxson Communications
12.50% Pay-in-kind
Exchangeable 43,180(n) 3,950,970
Poland Telecom
Warrants 5,000 50
Price Communications
Warrants 23,048 1,140,876
Republic of Argentina
Warrants 5,500(c) 126,500
Suiza Capital
5.50% Cm Cv 21,800(e) 790,250
5.50% Cv 39,300 1,424,625
TCI Pacific
Communications Cl A 3,325 1,123,850
Telehub Communications
Warrants 2,500 25,000
Tosco Financing Trust
5.75% Cv 37,500 1,631,250
Tower Automotive Capital
6.75% Cv 40,000 1,690,000
Unifi Communications
Warrants 7,000 70
Union Pacific Capital
6.25% Cm Cv 37,500 1,762,500
Versatel
Warrants 5,500 220,000
Wendys Financing
5.00% Cm Cv Series A 38,000 2,071,000
Total preferred stocks & other
(Cost: $35,485,674) $34,850,135
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Special Income Fund
(Percentages represent
value of investments
compared to net assets)
Short-term securities (4.1%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (3.3%)
Federal Home Loan Bank Disc Nt
03-03-99 4.71% $6,700,000 $6,696,501
Federal Home Loan Mtge Corp Disc Nts
03-12-99 4.77 2,400,000 2,395,892
03-15-99 4.72 5,600,000 5,588,327
03-23-99 4.79 2,500,000 2,492,033
03-26-99 4.77 2,300,000 2,291,789
03-31-99 4.76 7,900,000 7,866,715
Federal Natl Mtge Assn Disc Nt
03-24-99 4.76 35,000,000 34,884,549
Total 62,215,806
Commercial paper (0.8%)
Alabama Power
03-02-99 4.83% $3,500,000 $3,498,594
Alcoa
04-12-99 4.88 11,100,000 11,034,066
Total 14,532,660
Total short-term securities
(Cost: $76,748,466) $76,748,466
Total investments in securities
(Cost: $1,910,787,534)(p) $1,850,828,604
See accompanying notes to investments in securities.
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. For long-term debt securities, item identified is in
default as to payment of interest and/or principal.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated. As of Feb. 28,
1999, the value of foreign securities represented 17.75% of net assets.
(d) Security is partially or fully on loan. See Note 5 to the financial
statements.
(e) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(f) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(g) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(h) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 28, 1999.
(i) ACES are automatically convertible to the underlying equity securities.
(j) Adjustable rate mortgage; interest rate varies to reflect current market
conditions; rate shown is the effective rate on Feb. 28, 1999.
(k) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 28, 1999, is as follows:
Acquisition
Security date Cost
Veninfotel
(U.S. Dollar) Cv Pay-in-kind 10.00% 200203-05-97 thru 09-01-98 $6,037,500
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Special Income Fund
(l) The following abbreviation is used in portfolio descriptions to identify the
insurer of the issue:
MBIA -- Municipal Bond Investors Assurance
(m) Negligible market value.
(n) Pay-in-kind securities are securities in which the issuer makes interest or
dividend payments in cash or in additional securities. The securities usually
have the same terms as the original holdings.
(o) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 1 to the financial statements):
Type of security Notional amount
Purchase contracts
British Long Gilt March 1999 $1,000,000
(p) At Feb. 28, 1999, the cost of securities for federal income tax purposes was
approximately $1,904,838,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation........................................$75,160,000
Unrealized depreciation.......................................(129,169,000)
Net unrealized depreciation...................................$(54,009,000)
<PAGE>
Retirement Annuity Mutual Funds
Managed Fund
Feb. 28, 1999 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Common stocks (62.4%)
Issuer Shares Value(a)
Aerospace & defense (1.0%)
AlliedSignal 400,000 $16,550,000
Boeing 350,000 12,446,875
United Technologies 170,000 21,058,750
Total 50,055,625
Airlines (1.2%)
Southwest Airlines 2,100,000 63,262,500
Automotive & related (0.7%)
Tower Automotive 1,772,600(b) 33,014,675
Banks and savings & loans (2.5%)
BankAmerica 325,000 21,226,563
UnionBanCal 313,500 9,855,656
Washington Mutual 1,900,000 76,000,000
Wells Fargo 500,000 18,375,000
Total 125,457,219
Beverages & tobacco (0.8%)
Coca-Cola 610,000 39,001,875
Building materials & construction (1.5%)
Martin Marietta Materials 1,110,672 56,991,357
Masco 650,000 17,062,500
Total 74,053,857
Communications equipment & services (1.9%)
ADC Telecommunications 550,000(b) 22,275,000
Globalstar
Telecommunications 1,000(b) 15,563
Loral Space &
Communications 693,700(b) 12,486,600
Nokia Oyj ADR Cl A 290,000(c) 39,331,250
Northern Telecom 400,000(c) 23,225,000
Total 97,333,413
Computers & office equipment (7.2%)
Cisco Systems 893,750(b) 87,419,922
Compaq Computer 1,270,000 44,767,500
Compuware 160,000(b) 8,950,000
EMC 100,000(b) 10,237,500
Intl Business Machines 60,000 10,200,000
Microsoft 688,000(b) 103,285,999
Network Associates 625,000(b) 29,375,000
Paymentech 600,000(b) 11,475,000
Solectron 1,200,000(b) 53,625,000
Sun Microsystems 100,000(b) 9,731,250
Total 369,067,171
<PAGE>
Electronics (3.7%)
American Power
Conversion 1,350,000(b) $48,431,250
Applied Materials 202,700(b) 11,275,188
Intel 575,000 68,964,062
Maxim Integrated Products 565,000(b 23,553,438
Teradyne 150,000(b) 7,143,750
Texas Instruments 300,000 26,756,250
Total 186,123,938
Energy (1.0%)
Anadarko Petroleum 650,000 17,875,000
Royal Dutch Petroleum 800,000(c) 35,100,000
Total 52,975,000
Financial services (6.9%)
Associates First
Capital Cl A 1,000,000 40,625,000
Citigroup 1,800,000 105,749,999
Fannie Mae 625,000 43,750,000
Household Intl 750,000 30,468,750
MBNA 2,150,000 52,137,500
Merrill Lynch & Co 225,000 17,268,750
Morgan Stanley, Dean
Witter, Discover & Co 725,000 65,612,500
Total 355,612,499
Food (1.2%)
Sara Lee 900,000 24,468,750
U.S. Foodservice 830,000(b) 38,543,125
Total 63,011,875
Furniture & appliances (0.4%)
Leggett & Platt 1,050,000 21,984,375
Health care (7.5%)
Amgen 550,000(b) 68,681,250
Bristol-Myers Squibb 450,000 56,671,875
Elan ADR 687,200(b,c,d)52,699,650
Merck & Co 1,100,000 89,924,999
Pfizer 500,000 65,968,750
Schering-Plough 925,000 51,742,188
Total 385,688,712
Health care services (2.5%)
AmeriSource Health Cl A 200,000(b) 14,925,000
Cardinal Health 225,000 16,242,188
HEALTHSOUTH
Rehabilitation 2,900,000(b) 33,712,500
McKesson HBOC 300,000(d) 20,400,000
United Healthcare 875,000 43,148,437
Total 128,428,125
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Common stocks (continued)
Issuer Shares Value(a)
Household products (1.4%)
Gillette 450,000 $24,131,250
Procter & Gamble 500,000 44,750,000
Total 68,881,250
Industrial equipment & services (0.7%)
Illinois Tool Works 500,000 34,375,000
Insurance (1.1%)
American General 250,000 18,312,500
American Intl Group 50,000 5,696,875
Travelers Property
Casualty Cl A 425,000 16,123,438
UNUM 361,000 16,154,750
Total 56,287,563
Leisure time & entertainment (2.0%)
Disney (Walt) 800,000 28,150,000
Time Warner 1,100,000 70,950,000
Total 99,100,000
Media (0.6%)
Infinity Broadcasting Cl A 525,000(b) 12,468,750
TeleWest
Communications 3,775,000(b,c) 16,549,978
Total 29,018,728
Multi-industry conglomerates (5.7%)
Cendant 2,300,000(b) 38,093,750
Century Business Services 800,000(b) 9,350,000
Emerson Electric 400,000 22,975,000
General Electric 1,250,000 125,390,625
Modis Professional
Services 625,000(b) 8,554,688
Tyco Intl 1,000,625(c) 74,484,023
Xerox 200,000 11,037,500
Total 289,885,586
<PAGE>
Paper & packaging (--%)
Asia Pulp & Paper 1,000(b,c) $6,875
Restaurants & lodging (0.5%)
Extended Stay America 2,200,000(b) 19,250,000
Florida Panthers Holdings 700,000(b) 7,131,250
Total 26,381,250
Retail (4.8%)
Home Depot 1,425,000 85,054,687
Nordstrom 250,000 10,062,500
Republic Inds 1,450,000(b) 17,762,500
Rite Aid 935,500 38,706,313
Safeway 375,000(b) 21,656,250
Wal-Mart Stores 800,000 69,100,000
Total 242,342,250
Transportation (0.4%)
Union Pacific 450,000 21,093,750
Utilities -- electric (0.6%)
Carolina Power & Light 775,000 30,903,125
Utilities -- telephone (4.6%)
AirTouch Communications 800,000(b) 72,849,999
BCE 350,000(c,d) 14,153,125
Intermedia Communications 2,167(b) 39,277
MCI WorldCom 1,584,145(b) 130,691,962
Omnipoint 500(b) 5,813
U S WEST
Communications Group 275,000 14,660,938
Total 232,401,114
Total common stocks
(Cost: $1,996,471,243) $3,175,747,350
See accompanying notes to investments in securities.
<PAGE>
Preferred stocks & other (1.5%)
Issuer Shares Value(a)
Allegiance Telecom
Warrants 2,450 $93,100
American Mobile Satellite
Warrants 2,000 5,000
CNF Trust I
5.00% Cv Series A 28,500 1,702,875
Coltec Capital
5.25% Cv 38,500 (j) 1,535,188
Concentric Network
13.50% Pay-in-kind
Series B 1,065 (f) 1,022,400
Federal-Mogul Finance Trust
7.00% Cm Cv 18,500 1,077,625
Finova Finance Trust
5.50% Cv 33,000 2,359,500
Globalstar
Telecommunications 200,000 8,798,600
Houston Inds
7.00% Cv ACES 11,250(p) 1,231,875
Intermedia Communications
7.00% Cv Series F 150,000 2,456,250
Intl Paper Capital
5.25% Cm Cv 26,250 1,275,803
KMC Telecom Holdings
Warrants 2,800 7,000
Lincoln Natl
7.75% Cm Cv 84,000(d) 2,194,500
Loral Space &
Communications 400,000(j) 21,249,999
MediaOne Group
4.50% Cm Cv Series D 10,750 1,171,750
Mexico Value
Rights 1,000(c,e) --
<PAGE>
Newell Financial Trust
5.25% Cm Cv 25,000 $1,296,875
Omnipoint
Cv 240,000(j) 6,840,000
Owens-Illinois
Cv 40,000 1,555,000
Pinto Totta Intl Finance
7.77% 5,000(c,j) 4,418,750
Primus Telecommunications
Warrants 2,300 28,750
Sinclair Capital
11.63% 30,000 3,352,500
Suiza Capital
5.50% Cv 53,600 1,943,000
TCI Pacific
Communications Cl A 3,325 1,123,850
Tosco Financing Trust
5.75% Cv 37,500 1,631,250
Tower Automotive Capital
6.75% Cv 34,000 1,436,500
Unifi Communications
Warrants 2,000 20
Union Pacific Capital
6.25% Cm Cv 37,500 1,762,500
Versatel
Warrants 2,700 108,000
Wendys Financing
5.00% Cm Cv Series A 38,000 2,071,000
Total preferred stocks & other
(Cost: $79,058,123) $73,749,460
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (32.9%)
Issuer Coupon Principal Value(a)
rate amount
Government obligations (10.7%)
City of Moscow
(U.S. Dollar) Zero Coupon
12-31-98 21.80% $3,691,890(b,c,k) $572,612
Govt of Algeria
(U.S. Dollar)
03-04-00 7.06 545,455(c) 447,273
09-04-06 6.60 890,909(c) 374,182
Govt of Russia
(Russian Ruble)
09-27-00 14.00 30,008,878(b,c) 38,834
12-15-20 6.63 13,600,000(c) 969,000
(U.S. Dollar)
07-24-05 8.75 1,565,000(c,j) 344,300
06-24-28 12.75 680,000(c,j) 181,475
12-29-49 6.63 314,112(c) 32,196
Govt Trust Certs Israel
11-15-01 9.25 1,685,242 1,731,371
People's Republic of China
(U.S. Dollar)
07-03-01 7.38 2,000,000(c,d) 1,961,902
01-15-96 9.00 2,500,000(c) 2,421,473
Republic of Argentina
(Argentine Peso)
02-12-07 11.75 1,750,000(c) 1,401,094
(U.S. Dollar)
03-31-23 5.75 8,065,000(c) 5,378,347
Republic of Panama
(U.S. Dollar)
02-13-02 7.88 1,000,000(c,j) 967,500
09-30-27 8.88 2,000,000(c) 1,790,000
Resolution Funding Corp
Zero Coupon
07-15-20 6.56 5,000,000(k) 1,350,316
U.S. Treasury
02-28-99 5.88 82,000,000(d) 81,999,999
01-31-00 5.38 25,000,000(d) 25,077,703
02-15-00 8.50 20,000,000 20,644,572
03-31-01 6.38 61,000,000(d) 62,454,429
05-31-01 6.50 10,000,000 10,275,939
06-30-03 5.38 40,000,000(d) 40,142,412
08-15-03 5.75 43,300,000(d) 44,064,050
02-15-04 5.88 12,500,000 12,831,554
02-15-06 5.63 20,000,000(d) 20,280,872
10-15-06 6.50 21,000,000 22,399,360
05-15-08 5.63 50,000,000(d) 50,984,940
11-15-16 7.50 62,000,000(d) 73,408,421
08-15-22 7.25 1,000,000 1,178,843
08-15-23 6.25 2,000,000 2,112,620
11-15-24 7.50 8,000,000 9,804,546
TIPS
07-15-02 3.63 10,000,000(h) 10,175,332
Zero Coupon
05-15-05 6.46 18,000,000(k) 12,923,206
11-15-21 6.26 35,000,000(k) 9,122,365
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
United Mexican States
(U.S. Dollar)
05-15-26 11.50% $3,750,000(c,d) $3,932,813
(U.S. Dollar) Series A
12-31-19 6.25 4,000,000(c) 2,985,000
Total 536,760,851
Mortgage-backed securities (4.9%)
Federal Home Loan Mtge Corp
08-01-24 8.00 2,864,388 2,982,143
11-01-25 6.50 6,828,660 6,792,058
Federal Natl Mtge Assn
07-01-04 7.40 10,000,000(d) 10,776,045
01-01-09 5.50 19,513,782 19,068,672
06-01-10 6.50 6,661,082 6,713,105
08-01-11 8.50 5,364,074 5,608,776
04-01-13 6.00 15,786,904 15,652,671
05-01-13 6.00 11,564,596 11,461,509
09-01-13 6.00 4,733,743 4,691,546
04-01-22 8.00 2,674,415 2,793,106
04-01-23 8.50 3,213,208 3,403,558
05-01-23 6.50 1,920,388 1,910,094
05-01-24 6.00 5,223,777 5,078,922
06-01-24 9.00 1,882,239 2,013,733
02-01-25 8.50 1,451,388 1,527,847
05-01-25 8.50 1,745,891 1,837,865
09-01-25 6.50 4,359,122 4,333,011
11-01-25 7.50 5,018,110 5,156,308
02-01-26 7.00 6,606,576 6,691,801
07-01-26 7.50 5,403,651 5,550,792
02-01-27 7.50 5,282,268 5,424,467
03-01-28 6.00 14,509,602 14,070,977
04-01-28 6.00 19,170,512 18,589,026
10-01-28 6.00 20,081,096 19,474,045
11-01-28 6.00 26,958,086 26,143,142
Collateralized Mtge Obligation
Trust Series Z
02-25-24 6.00 8,012,773(i) 7,038,259
Govt Natl Mtge Assn
12-01-08 7.00 11,932,573 12,238,286
05-15-24 7.00 17,935,605 18,211,096
Merrill Lynch Mtge Investors
06-15-21 8.01 1,065,709(m) 991,276
Total 246,224,136
Aerospace & defense (0.2%)
BE Aerospace
Sr Sub Nts Series B
02-01-06 9.88 2,500,000 2,593,750
L-3 Communications
Sr Sub Nts Series B
05-01-07 10.38 690,000 760,725
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Newport News Shipbuilding
Sr Nts
12-01-06 8.63% $1,000,000 $1,072,500
Northrop-Grumman
03-01-06 7.00 3,750,000 3,824,541
Total 8,251,516
Airlines (0.2%)
Continental Airlines
Series 1974B
01-02-17 6.90 5,000,000 4,937,350
Series 1996A
04-15-15 6.94 4,745,693 4,808,383
Total 9,745,733
Automotive & related (0.1%)
Arvin Capital
Company Guaranty
02-01-27 9.50 3,000,000 3,253,161
MSX Intl
Company Guaranty
01-15-08 11.38 1,485,000 1,473,863
Total 4,727,024
Banks and savings & loans (1.8%)
Banco General
(U.S. Dollar)
08-01-02 7.70 3,750,000(c,j) 3,457,803
BankAmerica
Sub Nts Series B
12-31-26 7.70 3,700,000(j) 3,811,780
Capital One Bank
05-15-08 6.70 5,300,000 4,990,898
Corp Andina de Fomento
(U.S. Dollar)
02-01-03 7.10 5,200,000(c) 5,095,826
Crestar Capital
Company Guaranty
12-15-26 8.16 7,000,000 7,500,668
Cullen/Frost Capital
Series A
02-01-27 8.42 3,200,000 3,268,890
Dao Heng Bank
(U.S. Dollar) Sub Nts
01-24-07 7.75 8,500,000(c,j) 6,742,540
Firstar Capital
Company Guaranty Series B
12-15-26 8.32 3,000,000 3,161,401
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Greenpoint Capital
Company Guaranty
06-01-27 9.10% $2,000,000 $2,163,659
M & I Capital
Company Guaranty
12-01-26 7.65 5,700,000 5,804,930
Mellon Capital
Company Guaranty Series A
12-01-26 7.72 1,800,000 1,847,768
Morgan (JP)
Sr Sub Medium-term Nts Series A
02-15-12 4.00 5,000,000(m) 4,440,850
Norwest
Sr Medium-term Nts Series G
09-15-02 6.38 5,800,000 5,873,673
Provident Trust
Company Guaranty
04-15-28 8.29 5,500,000 5,847,224
Riggs Natl
Sub Nts
02-01-06 8.50 4,900,000 5,114,375
Union Planters Bank
Sub Nts
03-15-18 6.50 10,000,000 9,707,977
Union Planters Capital
Company Guaranty
12-15-26 8.20 5,000,000 5,031,836
US Capital
02-01-27 8.41 3,000,000(j) 3,072,951
Washington Mutual Capital
Company Guaranty
06-01-27 8.38 2,900,000(j) 3,130,631
Wilshire Financial Services
Series B
08-15-04 13.00 1,500,000(b) 240,000
Total 90,305,680
Building materials & construction (0.3%)
Foster Wheeler
11-15-05 6.75 6,100,000 5,895,691
Southdown
Sr Sub Nts Series B
03-01-06 10.00 1,400,000 1,543,500
Tyco Intl Group
(U.S. Dollar) Company Guaranty
06-15-28 7.00 8,000,000(c) 8,018,670
Total 15,457,861
Chemicals (0.1%)
Allied Waste North America
Sr Nts
01-01-09 7.88 2,825,000(j) 2,860,313
USA Waste Services
Sr Nts
10-01-07 7.13 4,500,000 4,670,413
Total 7,530,726
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Commercial finance (--%)
Netia Holdings
(U.S. Dollar) Company Guaranty Series B
11-01-07 10.25% $1,600,000(c) $1,508,000
Communications equipment & services (0.7%)
Celcaribe
Units
03-15-04 13.50 1,450,000(j) 2,584,625
EchoStar DBS
Sr Nts
02-01-09 9.38 2,460,000(j) 2,478,450
GST Telecom/GST Network Funding
Zero Coupon Sr Disc Nts
05-01-03 10.50 2,000,000(j,l) 940,000
Iridium LLC/Capital
Company Guaranty Series C
07-15-05 11.25 630,000 478,800
IXC Communications
Sr Sub Nts
04-15-08 9.00 2,000,000 2,120,000
Jordan Telecommunications Products
Sr Nts Series B
08-01-07 9.88 4,600,000 4,496,500
Zero Coupon Sr Disc Nts Series B
08-01-00 11.74 2,000,000(l) 1,620,000
KMC Telecom Holdings
Zero Coupon Sr Disc Nts
02-15-03 12.68 2,800,000(l) 1,484,000
Level 3 Communications
Sr Nts
05-01-08 9.13 1,375,000 1,340,625
MJD Communications
Sr Sub Nts Series B
05-01-08 9.50 1,000,000 1,010,000
NTL
Zero Coupon Sr Nts Series B
04-01-03 9.78 3,825,000(l) 2,620,125
PhoneTel Technologies
Sr Nts
12-15-06 12.00 3,000,000(b) 1,350,000
RCN
Zero Coupon Sr Disc Nts Series B
02-15-03 9.80 2,400,000(l) 1,296,000
TCI Telecommunications
Sr Nts
02-15-28 7.13 1,300,000 1,372,753
Triton Communications
Zero Coupon Company Guaranty
05-01-03 10.86 4,000,000(l) 2,270,000
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Versatel Telecom
(U.S. Dollar) Sr Nts
05-15-08 13.25% $2,700,000(c) $2,767,500
Vialog
Company Guaranty
11-15-01 12.75 5,000,000 4,200,000
Total 34,429,378
Computers & office equipment (0.1%)
At Home
Cv Sub Deb
12-12-18 .53 1,250,000(j) 935,738
Cooperative Computing
Sr Sub Nts
02-01-08 9.00 2,000,000 1,752,500
Hewlett-Packard
Zero Coupon Sub Nts
10-14-17 3.33 3,300,000(k) 1,868,625
Solectron
Cv Sub Nts
01-27-19 4.00 5,500,000(j) 2,626,250
Total 7,183,113
Electronics (0.1%)
Hyundai Semiconductor
(U.S. Dollar) Sr Nts
05-15-07 8.63 4,000,000(c,j) 3,515,662
Kent Electronics
Cv Sub Nts
09-01-04 4.50 1,250,000 965,625
STMicroelectronics
(U.S. Dollar) Zero Coupon Cv Sub Nts
06-10-08 .50 1,575,000(c,k) 1,464,703
Total 5,945,990
Energy (0.6%)
ESI Tractebel
Company Guaranty Series B
12-30-11 7.99 1,250,000 1,176,688
Forcenergy
Sr Sub Nts
11-01-06 9.50 1,000,000 360,000
Honam Oil Refinery
(U.S. Dollar)
10-15-05 7.13 5,750,000(c,j) 5,261,250
Lodestar Holdings
Company Guaranty
05-15-05 11.50 5,000,000 4,212,500
Parker & Parsley Petroleum
Sr Nts
08-15-07 8.25 4,200,000 3,833,555
Pennzenergy
Cv
08-15-08 4.90 950,000 926,250
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Roil
(U.S. Dollar)
12-05-02 12.78% $4,350,000(c,j) $783,000
Swift Energy
Cv Sub Nts
11-15-06 6.25 900,000 648,000
Tatneft Finance
(U.S. Dollar) Company Guaranty
10-29-02 9.00 2,600,000(c,j) 396,500
USX
03-01-08 6.85 12,000,000 11,725,340
Total 29,323,083
Energy equipment & services (0.2%)
DI Inds
Sr Nts
07-01-07 8.88 1,500,000 1,110,000
Global Marine
09-01-07 7.13 4,500,000 4,515,575
Northern Offshore ASA
(U.S. Dollar) Company Guaranty
05-15-05 10.00 2,000,000(c,j) 780,000
Pool Energy Services
Company Guaranty Series B
04-01-08 8.63 1,000,000 1,005,000
Pride Intl
Zero Coupon Cv Sub Deb
04-24-18 7.35 5,000,000(k) 1,100,000
Total 8,510,575
Financial services (0.9%)
Airplanes GPA Cl D
(U.S. Dollar) Series 1
03-15-19 10.88 1,750,000(c) 1,897,700
AirTours
(British Pound) Cv Sub Nts
01-05-04 5.75 750,000(c) 1,409,594
Arcadia Financial
Sr Nts
03-15-07 11.50 1,575,000 1,273,781
Associates Corp of North America
Sr Nts
10-15-02 6.38 10,000,000 10,145,368
Avco Financial Services
Sr Nts
07-15-99 7.25 4,750,000 4,781,224
Bat-Crave-800
08-12-00 6.68 5,000,000(j) 5,044,671
08-12-00 6.86 3,000,000 3,026,748
Fleet Capital
Company Guaranty
12-11-26 7.92 2,200,000 2,283,167
Merrill Lynch Mtge Investors Cl D
Series 1996-C2
12-21-28 6.96 7,500,000 7,207,950
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Salomon
Sr Nts
01-15-06 6.75% $4,000,000 $4,023,521
Standard Credit Card Trust
10-07-04 5.95 3,000,000 3,004,470
Wilmington Trust
05-01-08 6.63 3,200,000 3,185,542
Total 47,283,736
Food (0.1%)
Ameriserve Food Distributions
Company Guaranty
10-15-06 8.88 1,000,000 932,500
07-15-07 10.13 1,750,000 1,494,063
Daya Guna
(U.S. Dollar) Company Guaranty
06-01-07 10.00 1,200,000(c,j) 756,382
Total 3,182,945
Furniture & appliances (0.1%)
Interface
Sr Sub Nts Series B
11-15-05 9.50 1,500,000 1,586,250
Lifestyle Furnishings
Company Guaranty
08-01-06 10.88 2,150,000 2,418,750
Total 4,005,000
Health care (0.2%)
Alaris Medical Systems
Company Guaranty
12-01-06 9.75 3,600,000 3,694,500
Elan Finance
Zero Coupon Cv Company Guaranty
12-14-18 2.76 2,500,000(j,k) 1,503,125
Sepracor
Cv
12-15-05 7.00 2,000,000(j) 2,465,000
Watson Pharmaceuticals
Sr Nts
05-15-08 7.13 2,550,000 2,562,409
Total 10,225,034
Health care services (0.5%)
Abbey Healthcare Group
Sr Sub Nts
11-01-02 9.50 2,000,000(d) 1,965,000
Fountain View
Company Guaranty Series B
04-15-08 11.25 2,150,000 1,886,625
Magellan Health Services
Sr Sub Nts
02-15-08 9.00 2,000,000 1,730,000
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Manor Care
Sr Nts
06-15-06 7.50% $6,000,000 $6,230,245
Novacare
Cv Sub Deb
01-15-00 5.50 2,950,000 2,079,750
Owens & Minor
Company Guaranty Sr Sub Nts
06-01-06 10.88 1,200,000 1,285,500
Oxford Health Plans
Sr Nts
05-15-05 11.00 1,125,000(j) 1,147,500
Paracelsus Healthcare
Sr Sub Nts
08-15-06 10.00 1,000,000 853,750
Physician Sales & Service
Company Guaranty
10-01-07 8.50 1,050,000 1,071,000
Tenet Healthcare
Sr Nts
12-01-03 8.63 2,500,000(j) 2,578,125
Sr Sub Nts
12-01-08 8.13 6,300,000 6,250,814
Total 27,078,309
Household products (0.1%)
Chattem
Company Guaranty Series B
04-01-08 8.88 2,200,000 2,233,000
Revlon Consumer Products
Sr Nts
02-01-06 8.13 2,750,000 2,619,375
Scotts
Sr Sub Nts
01-15-09 8.63 1,050,000(j) 1,078,875
Total 5,931,250
Industrial equipment & services (0.2%)
AGCO
Sr Sub Nts
03-15-06 8.50 800,000 745,000
Case
08-01-05 7.25 5,000,000 5,063,238
Terex
Company Guaranty
04-01-08 8.88 2,100,000 2,084,250
Total 7,892,488
Insurance (1.5%)
American General Institute Capital
Company Guaranty Series A
12-01-45 7.57 14,350,000(j) 15,078,096
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
American United Life Insurance
03-30-26 7.75% $2,500,000(j,n) $2,565,872
Americo Life
Sr Sub Nts
06-01-05 9.25 1,600,000 1,638,000
Arkwright CSN Trust
08-15-26 9.63 3,000,000(j) 3,377,392
Berkshire Hathaway
Cv Sr Nts
12-02-01 1.00 800,000 1,422,000
Conseco Financing Trust
Company Guaranty
11-15-26 8.70 3,800,000 3,668,545
Executive Risk Capital
Company Guaranty Series B
02-01-27 8.68 3,000,000 3,245,735
Leucadia Natl
Sr Sub Nts
10-15-06 7.88 5,000,000 4,842,883
Metropolitan Life Insurance
11-01-25 7.80 6,900,000(j) 7,587,509
Minnesota Mutual Life
09-15-25 8.25 2,700,000(j) 3,082,769
Nationwide CSN Trust
02-15-25 9.88 9,000,000(j) 10,620,202
New England Mutual
02-15-24 7.88 2,000,000(j) 2,018,446
Principal Mutual
03-01-44 8.00 2,500,000(j) 2,667,393
SAFECO Capital
Company Guaranty
07-15-37 8.07 5,000,000 5,048,004
SunAmerica
08-30-05 7.34 5,000,000 5,358,623
Veritas Holdings
(U.S. Dollar) Sr Nts
12-15-03 9.63 2,386,000(c) 2,380,035
Zurich Capital
(U.S. Dollar) Company Guaranty
06-01-37 8.38 3,750,000(c,j) 4,040,512
Total 78,642,016
Leisure time & entertainment (0.6%)
AMC Entertainment
Sr Sub Nts
03-15-09 9.50 2,000,000 1,965,000
Hollywood Park
Sr Sub Nts
02-15-07 9.25 1,875,000(j) 1,872,656
Lodgenet Entertainment
Sr Nts
12-15-06 10.25 2,000,000 1,997,500
Premier Parks
Sr Nts
04-01-06 9.25 1,250,000 1,346,875
Zero Coupon Sr Disc Nts
04-01-03 10.00 3,000,000(l) 2,103,750
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Regal Cinemas
Sr Sub Nts
06-01-08 9.50% $3,000,000 $3,000,000
Riviera Holdings
Company Guaranty
08-15-04 10.00 2,250,000 1,977,188
Time Warner
02-01-24 7.57 5,900,000 6,374,026
Sr Nts
01-15-28 6.95 5,000,000 5,068,301
Trump Atlantic City Assn/Funding
1st Mtge Company Guaranty
05-01-06 11.25 1,000,000 850,000
United Artists Theatres
Series 1995A
07-01-15 9.30 1,888,951 1,703,040
Venetian Casino/LV Sands
Company Guaranty
11-15-04 12.25 2,410,000 2,491,338
Total 30,749,674
Media (1.8%)
Adelphia Communications
Sr Nts Series B
02-01-08 8.38 3,000,000 3,127,500
Antenna TV
08-01-07 9.00 3,000,000 2,737,500
CBS
Sr Nts
05-20-05 7.15 5,000,000 5,101,962
Central Euro Media
(U.S. Dollar) Sr Nts
08-15-04 9.38 3,675,000(c) 2,976,750
Chancellor Media
Sr Nts
11-01-08 8.00 3,000,000(j) 3,180,000
Clear Channel Communications
Cv Sr Nts
04-01-03 2.63 1,500,000 1,706,250
Comcast Cable Communications
11-15-08 6.20 6,100,000 6,046,810
Cox Communications
11-15-15 7.25 5,000,000 5,293,915
06-15-25 7.63 5,000,000 5,554,072
CSC Holdings
Sr Nts
07-15-08 7.25 5,000,000 5,087,654
Sr Sub Nts
11-01-05 9.25 2,000,000 2,155,000
Globo Communicacoes Participacoes
(U.S. Dollar) Sr Nts
12-05-08 10.63 5,000,000(c,j) 2,775,000
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Golden Sky Systems
Sr Sub Nts
08-01-06 12.38% $1,500,000(j) $1,606,875
Lamar Advertising
Company Guaranty
12-01-06 9.63 1,100,000 1,190,750
MDC Communications
(U.S. Dollar) Sr Sub Nts
12-01-06 10.50 1,350,000(c) 1,363,500
Outdoor Systems
Company Guaranty
10-15-06 9.38 2,500,000 2,712,500
06-15-07 8.88 10,000,000 10,749,999
Rogers Cablesystems
(Canadian Dollar)
01-15-14 6.56 5,000,000(c) 3,400,040
TCI Communications
08-01-15 8.75 3,850,000 4,751,548
Tele-Communications
02-15-23 8.75 3,500,000 3,896,859
Telewest Communication
(British Pound) Cv
02-19-07 5.25 1,020,000(c) 1,661,578
Time Warner Entertainment
Sr Nts
07-15-33 8.38 10,000,000 11,943,790
Total 89,019,852
Metals (0.3%)
Grupo Minero Mexico
(U.S. Dollar) Company Guaranty Series A
04-01-08 8.25 4,750,000(c) 4,037,500
Imexsa Export Trust
(U.S. Dollar)
05-31-03 10.13 2,762,892(c,j) 2,500,417
Ormet
Company Guaranty
08-15-08 11.00 2,700,000(j) 2,568,375
P&L Coal Holdings
Company Guaranty Series B
05-15-08 8.88 3,000,000 3,108,750
Pen Holdings
Company Guaranty Series B
06-15-08 9.88 3,000,000 3,030,000
Total 15,245,042
Miscellaneous (1.5%)
Adams Outdoor Advertising
Sr Nts
03-15-06 10.75 2,000,000 2,182,500
Advanced Glassfiber Yarn
Sr Sub Nts
01-15-09 9.88 2,130,000(j) 2,156,625
Alliance Imaging
Sr Sub Nts
12-15-05 9.63 2,000,000 1,970,000
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
AMSC Acquisition
Company Guaranty Series B
04-01-08 12.25% $2,000,000 $980,000
APP Finance VI Mauritius
(U.S. Dollar) Zero Coupon Cv
11-18-12 10.78 85,000,000(c,k) 10,279,688
Bistro Trust
Sub Nts
12-31-02 9.50 12,000,000(j) 11,497,199
Continucare
Cv Sr Sub Nts
10-31-02 8.00 1,000,000 342,500
Delphes 2
(U.S. Dollar)
05-05-09 7.75 9,000,000(c) 8,910,000
First Empire Capital
Company Guaranty
02-01-27 8.23 4,000,000 4,130,788
Grant Geophysical
Company Guaranty Series B
02-15-08 9.75 1,925,000 1,258,469
Great Central Mines
(U.S. Dollar) Sr Nts
04-01-08 8.88 2,500,000(c,j) 2,475,000
Guangdong Enterprises
(U.S. Dollar) Sr Nts
05-22-07 8.88 4,000,000(c,j) 1,300,442
ISG Resources
04-15-08 10.00 2,760,000 2,794,500
Jasmine Submarine Telecom
(U.S. Dollar) Sr Nts
05-30-11 8.48 867,743(c,j) 706,161
Jorgensen (Earle M)
Sr Nts
04-01-05 9.50 1,225,000 1,127,000
Murrin Murrin Holdings
(U.S. Dollar) Sr Nts
08-31-07 9.38 1,000,000(c) 897,500
Network Associates
Zero Coupon Cv Sub Deb
02-13-18 3.24 2,800,000(k) 1,326,500
Norcal Waste Systems
Company Guaranty Series B
11-15-05 13.50 2,000,000 2,205,000
NSM Steel
Company Guaranty
02-01-06 12.00 2,050,000(b,j) 410,000
Oshkosh Truck
Company Guaranty
03-01-08 8.75 3,000,000 3,071,250
Outsourcing Solutions
Sr Sub Nts Series B
11-01-06 11.00 1,125,000 1,108,125
Pierce Leahy Command
Company Guaranty
05-15-08 8.13 4,050,000(j) 4,060,125
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Provident Companies
03-15-38 7.41% $5,000,000 $4,977,626
SC Intl
09-01-07 9.25 1,950,000 1,974,375
Stellex Inds
Sr Sub Nts Series B
11-01-07 9.50 1,350,000 1,176,188
Vesta Capital
01-15-27 8.52 5,000,000(j) 4,440,913
Total 77,758,474
Multi-industry conglomerates (0.6%)
Coltec Inds
Company Guaranty
04-15-08 7.50 5,000,000 5,275,000
Crane
06-15-99 7.25 2,000,000 2,007,008
Hutchison Whampoa Finance
(U.S. Dollar) Company Guaranty
08-01-17 7.45 1,275,000(c,j) 1,084,578
08-01-27 7.50 1,250,000(c,j) 1,032,538
Packaged Ice
Company Guaranty Series B
02-01-05 9.75 6,300,000 6,449,625
Pierce Leahy
Sr Sub Nts
07-15-06 11.13 812,000 899,290
Prime Succession
Sr Sub Nts
08-15-04 10.75 980,000 705,600
USI American Holdings
Sr Nts Series B
12-01-06 7.25 3,350,000 3,398,898
Westinghouse Electric
06-01-01 8.88 9,750,000 10,197,837
Xerox
Cv Sub Deb
04-21-18 .57 2,400,000(j) 1,459,128
Total 32,509,502
Paper & packaging (0.4%)
Ball
Company Guaranty
08-01-08 8.25 1,750,000 1,824,375
Gaylord Container
Sr Nts
06-15-07 9.75 1,750,000 1,671,250
Sr Nts Series B
06-15-07 9.38 3,250,000 3,030,625
Graham Packaging/GPC Capital
Company Guaranty Series B
01-15-08 8.75 2,000,000 2,032,500
Owens-Illinois
Sr Nts
05-15-07 8.10 4,350,000 4,531,239
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Quno Corp
(U.S. Dollar) Sr Nts
05-15-05 9.13% $2,500,000(c) $2,625,000
Repap New Brunswick
(U.S. Dollar) Sr Nts
06-01-04 9.00 1,200,000(c) 1,128,000
04-15-05 10.63 3,000,000(c) 2,265,000
Riverwood Intl
Company Guaranty Sr Nts
04-01-06 10.25 2,000,000 2,032,500
Silgan Holdings
06-01-09 9.00 1,650,000 1,695,375
Total 22,835,864
Restaurants & lodging (0.2%)
Domino's
Sr Sub Nts
01-15-09 10.38 1,950,000(j) 2,013,375
Extended Stay America
Sr Sub Nts
03-15-08 9.15 4,000,000 3,810,000
Signature Resorts
Sr Nts
05-15-06 9.25 3,000,000 2,880,000
Total 8,703,375
Retail (0.5%)
Amazon.com
Zero Coupon Sr Disc Nts
05-01-03 10.00 2,900,000(l) 1,859,625
Costco Companies
Zero Coupon Cv Sub Nts
08-19-17 .82 1,250,000(k) 1,153,125
Home Depot
Cv Sub Nts
10-01-01 3.25 500,000 1,287,500
Maxim Group
Company Guaranty Series B
10-15-07 9.25 2,500,000 2,493,750
Meyer (Fred)
Company Guaranty
03-01-08 7.45 6,075,000 6,425,277
Pep Boys - Manny, Moe & Jack
06-01-05 7.00 4,200,000 4,264,974
Pueblo Xtra Intl
Sr Nts
08-01-03 9.50 1,000,000 956,250
Rite Aid
Cv Sub Nts
09-15-02 5.25 875,000 1,111,250
Safeway
11-15-03 6.05 1,300,000 1,289,926
Wal-Mart CRAVE Trust
07-17-06 7.00 4,079,141(j) 4,133,557
Total 24,975,234
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Textiles & apparel (0.1%)
Galey & Lord
Company Guaranty
03-01-08 9.13% $3,000,000 $2,377,500
Loomis Fargo
01-15-04 10.00 500,000 498,125
Steel Heddle Mfg
Company Guaranty Series B
06-01-08 10.63 1,200,000 838,500
Westpoint Stevens
Sr Nts
06-15-08 7.88 3,250,000 3,347,500
Total 7,061,625
Transportation (0.4%)
Atlas Air Series C
01-02-10 8.01 9,274,268 9,173,457
Enterprises Shipholding
(U.S. Dollar) Sr Nts
05-01-08 8.88 3,250,000(c) 2,563,431
Greater Beijing
(U.S. Dollar) Sr Nts
06-15-04 9.25 5,120,000(c) 2,918,400
Hermes Europe Rail
(U.S. Dollar) Sr Nts
01-15-09 10.38 3,300,000(c,j) 3,489,750
Stena Line
(U.S. Dollar) Sr Nts
06-01-08 10.63 1,000,000(c) 848,750
Zhuhai Highway
(U.S. Dollar) Sub Nts
07-01-08 12.00 5,000,000(c,j) 2,675,000
Total 21,668,788
Utilities -- electric (1.6%)
Alabama Power
1st Mtge
12-01-24 9.00 2,200,000 2,367,794
Arizona Public Service
1st Mtge Sale Lease-backed Obligation
12-30-15 8.00 3,600,000 3,979,056
CalEnergy
Sr Nts
09-15-06 9.50 1,325,000 1,479,031
Cleveland Electric Illuminating
07-01-04 7.67 6,500,000 6,819,891
1st Mtge Series B
05-15-05 9.50 9,000,000 9,620,758
CMS Energy
Sr Nts
05-15-02 8.13 5,000,000 5,150,765
11-15-04 7.63 2,500,000 2,557,913
Connecticut Light & Power
1st Mtge Series C
06-01-02 7.75 5,000,000 5,141,268
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
El Paso Electric
1st Mtge Series D
02-01-06 8.90% $2,750,000 $3,141,875
Espirito Santo-Escelsa
(U.S. Dollar)
07-15-07 10.00 1,630,000(c) 912,800
Israel Electric
(U.S. Dollar) Sr Nts
12-15-06 7.25 2,700,000(c) 2,655,288
Jersey Central Power & Light
1st Mtge
11-01-25 6.75 7,200,000 6,744,768
Korea Electric Power
(U.S. Dollar)
12-01-03 6.38 4,000,000(c) 3,709,748
Public Service Electric & Gas
1st & Ref Mtge (AMBAC Insured)
01-01-16 6.75 2,600,000(g) 2,654,899
Salton Sea Funding
Series C
05-30-10 7.84 1,325,000 1,409,350
Sithe Independence Funding
Series A
12-30-13 9.00 1,500,000 1,689,317
Texas Utilities Electric
08-01-07 7.17 5,000,000 5,283,616
TU Electric Capital
Company Guaranty
01-30-37 8.18 5,000,000 5,264,652
Virginia Electric & Power
02-01-07 6.75 5,000,000 5,103,827
Western Massachusetts Electric
1st Mtge Series B
07-01-01 7.38 2,750,000 2,791,975
Wisconsin Electric Power
12-01-95 6.88 2,800,000 2,855,592
Total 81,334,183
Utilities -- gas (0.1%)
Columbia Gas System
Series E
11-28-10 7.32 7,000,000 7,249,909
Utilities -- telephone (1.2%)
360 Communications
04-01-09 7.60 3,000,000 3,266,463
Airtouch Communications
05-01-08 6.65 10,000,000 10,281,713
Allegiance Telecom
Zero Coupon Sr Disc Nts Series B
02-15-03 11.94 2,450,000(l) 1,408,750
Bell Atlantic Financial Services
Cv
09-15-05 4.25 2,075,000(j) 2,321,406
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Call-Net Enterprises
(U.S. Dollar) Sr Nts
08-15-08 8.00% $1,750,000(c) $1,671,250
Geotek Communications
Cv Sr Sub Nts
02-15-01 12.00 1,655,000(b) 2,069
Grupo Iusacell
(U.S. Dollar)
07-15-04 10.00 1,250,000(c) 1,137,500
Hyperion Telecommunications
Sr Nts Series B
09-01-04 12.25 1,500,000 1,597,500
Intermedia Communications
Sr Nts Series B
11-01-07 8.88 1,000,000 960,000
06-01-08 8.60 3,000,000(j) 2,842,500
McLeod USA
Sr Nts
03-15-08 8.38 2,300,000 2,346,000
02-15-09 8.13 2,250,000(j) 2,233,125
Metrocall
Sr Sub Nts
11-01-07 9.75 1,000,000 942,500
MetroNet Communications
(U.S. Dollar) Sr Nts
11-01-08 10.63 1,200,000(c,j) 1,347,000
(U.S. Dollar) Zero Coupon Sr Disc Nts
06-15-03 9.95 2,300,000(c,l) 1,587,000
Nextlink Communications
Sr Nts
11-15-08 10.75 3,000,000(j) 3,112,500
Philippine Long Distance Telephone
(U.S. Dollar) Medium-term Nts Series E
03-06-07 7.85 3,000,000(c,j) 2,563,432
Primus Telecommunications Group
Sr Nts
08-01-04 11.75 2,300,000 2,346,000
Qwest Communications Intl
11-01-08 7.50 2,500,000(j) 2,637,500
Rogers Cantel
(U.S. Dollar)
06-01-08 9.38 2,800,000(c) 3,090,500
RSL Communications
(U.S. Dollar) Company Guaranty
11-15-06 12.25 3,000,000(c) 3,247,500
U S WEST Communications
11-10-26 7.20 5,000,000 4,975,483
WorldCom
04-01-07 7.75 4,000,000 4,378,397
Total 60,296,088
Total bonds
(Cost: $1,709,452,301) $1,669,552,054
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Managed Fund
(Percentages represent
value of investments
compared to net assets)
Short-term securities (5.2%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government notes (3.2%)
Federal Home Loan Mtge Corp Disc Nts
03-08-99 4.78% $30,000,000 $29,964,338
03-08-99 4.79 29,800,000 29,764,538
03-12-99 4.81 14,600,000 14,574,799
03-18-99 4.77 19,000,000 18,952,268
03-25-99 4.77 23,600,000 23,519,039
04-14-99 4.78 17,000,000 16,896,819
04-23-99 4.79 15,000,000 14,891,031
Federal Natl Mtge Assn Disc Nt
03-24-99 4.76 10,900,000 10,864,045
Total 159,426,877
Commercial paper (1.9%)
AT&T
03-30-99 4.85 8,500,000 8,464,647
Ciesco LP
03-09-99 4.82 3,900,000(o) 3,894,800
Clorox
03-04-99 4.82 5,500,000 5,496,333
Dresdner US Finance
03-02-99 4.86 15,100,000 15,093,897
Fleet Funding
03-09-99 4.87 11,600,000(o) 11,584,372
03-10-99 4.85 13,800,000(o) 13,779,634
GTE Funding
03-10-99 4.83 4,800,000 4,792,931
03-16-99 4.86 10,300,000 10,276,410
03-23-99 4.85 800,000 797,424
Kredietbank North America Finance
04-27-99 4.86 5,400,000 5,355,462
Natl Australia Funding (Delaware)
03-16-99 4.85 2,400,000 2,394,526
Paccar Financial
03-23-99 4.83 5,900,000 5,881,041
UBS Finance (Delaware)
03-16-99 4.85 10,000,000 9,977,239
Total 97,788,716
Letter of credit (0.1%)
Bank of America-
AES Hawaii
03-19-99 4.86 4,900,000 4,886,798
Total short-term securities
(Cost: $262,104,271) $262,102,391
Total investments in securities
(Cost: $4,047,085,938)(q) $5,181,151,255
See accompanying notes to investments in securities.
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. Items identified are in default as to payment of
interest and/or principal.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated. As of Feb. 28,
1999, the value of foreign securities represented 7.94% of net assets.
(d) Security is partially or fully on loan. See Note 5 to the financial
statements.
(e) Negligible market value.
(f) Pay-in-kind securities are securities in which the issuer makes interest or
dividend payments in cash or in additional securities. The securities usually
have the same terms as the original holdings.
(g) The following abbreviation is used in portfolio descriptions to identify the
insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
(h) U.S. Treasury inflation-protection securities (TIPS) are securities in which
the principal amount is adjusted for inflation and the semiannual interest
payments equal a fixed percentage of the inflation-adjusted principal amount.
(i) This security is a collateralized mortgage obligation that pays no interest
or principal during its initial accrual period until previous series within the
trust have been paid off. Interest is accrued at an effective yield; similar to
a zero coupon bond.
(j) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(k) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(l) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(m) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 28, 1999.
(n) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 28, 1999, is as follows:
Security Acquisition Cost
dates
American United Life Insurance *
7.75% 2026 02-13-96 $2,500,000
*Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended.
(o) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(p) ACES are automatically convertible to the underlying equity securities.
(q) At Feb. 28, 1999, the cost of securities for federal income tax purposes was
approximately $4,045,423,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation..............................$1,324,161,000
Unrealized depreciation................................(188,433,000)
Net unrealized appreciation..........................$1,135,728,000
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Moneyshare Fund
Feb. 28, 1999 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Certificates of deposit (0.8%)
Bank of Montreal Yankee
05-10-99 5.75% $1,000,000 $999,906
Canadian Imperial Bank Yankee
04-01-99 5.75 1,500,000 1,499,932
Credit Agricole Yankee
05-19-99 5.75 1,000,000 999,825
U.S. Bank Minneapolis
04-23-99 5.80 1,000,000 1,000,000
Total certificates of deposit
(Cost: $4,499,663) $4,499,663
Commercial paper (88.9%)
Automotive & related (5.5%)
Daimler-Benz
03-05-99 5.25% $9,000,000 $8,992,260
03-18-99 5.25 4,700,000 4,687,200
03-26-99 5.09 5,000,000 4,981,212
04-21-99 5.10 1,300,000 1,290,392
Ford Motor Credit
07-08-99 4.87 10,000,000 9,826,426
Total 29,777,490
Banks and savings & loans (24.7%)
ABN Amro Canada
07-12-99 4.84 5,000,000 4,909,250
08-03-99 4.76 5,000,000 4,896,097
08-04-99 4.76 8,300,000 8,126,422
ANZ (Delaware)
04-06-99 4.93 6,000,000 5,969,157
04-13-99 4.93 10,000,000 9,939,125
BBV Finance (Delaware)
04-14-99 4.90 6,600,000 6,559,098
04-26-99 4.89 4,800,000 4,762,493
First Union Natl Bank
11-18-99 5.03 2,000,000(c) 2,000,000
Morgan Guaranty
11-29-99 4.99 5,000,000(c) 5,000,000
NBD Bank Canada
03-01-99 4.85 3,800,000 3,798,980
03-02-99 5.19 500,000 499,786
Societe Generale North America
04-26-99 4.85 5,100,000 5,060,560
04-28-99 4.85 12,800,000 12,697,601
U.S. Bank Minneapolis
07-23-99 4.95 10,000,000 10,000,000
07-30-99 4.98 3,300,000 3,300,000
08-09-99 4.89 6,300,000 6,300,000
Wachovia Bank
03-03-99 5.18 3,400,000 3,400,000
<PAGE>
Westdeutsche Landesbank Yankee
04-29-99 4.89% $3,900,000 $3,900,000
05-10-99 4.88 4,900,000 4,900,000
05-24-99 4.86 5,000,000 5,000,000
05-28-99 4.93 5,000,000 5,000,000
08-12-99 4.88 5,000,000 5,000,000
Westpac Capital
04-08-99 4.88 8,800,000 8,752,773
06-10-99 4.92 3,400,000 3,353,112
Total 133,124,454
Broker dealers (9.9%)
Bear Stearns
04-23-99 4.85 9,400,000 9,331,067
06-18-99 4.85 5,000,000 4,926,617
07-15-99 4.87 4,200,000 4,123,203
Goldman Sachs Group
03-18-99 5.23 7,400,000 7,380,004
01-07-00 5.09 1,000,000(c) 1,000,000
Merrill Lynch
10-21-99 4.92 1,000,000(c) 1,000,000
01-28-00 4.93 3,000,000(c) 3,000,000
Morgan Stanley, Dean Witter,
Discover & Co
03-26-99 5.02 3,800,000 3,785,978
08-20-99 4.94 4,700,000 4,590,506
Salomon Smith Barney
05-14-99 4.86 5,000,000 4,949,439
UBS Finance (Delaware)
04-09-99 4.90 6,600,000 6,563,545
08-09-99 5.00 1,000,000 977,859
10-08-99 4.92 1,000,000 970,514
10-12-99 4.95 1,000,000 969,796
Total 53,568,528
Chemicals (0.9%)
Rohm & Haas
07-29-99 4.86 5,000,000(b) 4,899,722
Commercial finance (18.1%)
Avco Financial Services
03-23-99 5.19 1,000,000 996,583
03-26-99 5.13 3,800,000 3,785,579
CAFCO
04-27-99 4.87 5,100,000(b) 5,059,713
04-27-99 4.88 5,500,000(b) 5,456,373
05-03-99 4.88 5,400,000(b) 5,352,907
05-21-99 4.88 800,000(b) 791,091
Ciesco LP
04-12-99 4.92 8,600,000 8,548,917
Delaware Funding
03-22-99 4.87 5,500,000(b) 5,482,923
04-22-99 4.85 6,400,000(b) 6,353,920
04-27-99 4.85 8,500,000(b) 8,433,133
See accompanying notes to investments in securities.
<PAGE>
Commercial paper (continued)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Falcon Asset
03-29-99 4.87% $5,000,000(b) $4,979,833
04-06-99 4.89 6,100,000(b) 6,068,707
04-15-99 4.88 5,900,000(b) 5,862,795
04-16-99 4.92 5,300,000(b) 5,265,444
New Center Asset Trust
06-04-99 4.93 5,900,000 5,823,057
Preferred Receivables
04-19-99 4.88 5,500,000(b) 5,462,210
Variable Funding Capital
03-10-99 4.87 3,300,000(b) 3,295,100
03-18-99 4.87 6,100,000(b) 6,084,354
05-10-99 4.88 5,000,000(b) 4,951,800
Total 98,054,439
Energy (2.1%)
Chevron Transport
03-01-99 5.12 6,300,000(b) 6,298,206
06-08-99 4.78 5,000,000(b) 4,932,947
Total 11,231,153
Financial services (13.5%)
CIT Group Holdings
05-04-99 4.91 5,400,000 5,351,787
Corporate Receivables
05-04-99 4.85 4,100,000(b) 4,063,920
05-06-99 4.88 4,900,000(b) 4,855,388
05-27-99 4.90 6,100,000(b) 6,027,010
GMAC
04-30-99 4.91 5,500,000 5,453,870
Intl Lease Finance
05-11-99 4.91 5,000,000 4,951,029
Natl Rural Utilities
03-09-99 5.18 2,400,000 2,396,580
03-29-99 5.16 2,000,000 1,991,500
04-09-99 4.91 7,900,000 7,856,363
Sheffield Receivables
03-08-99 4.87 5,000,000(b) 4,993,925
03-16-99 4.94 10,000,000(b) 9,976,860
Windmill Funding
04-01-99 5.06 3,100,000(b) 3,085,792
04-20-99 4.89 5,000,000(b) 4,965,117
09-27-99 4.90 3,000,000 2,916,260
<PAGE>
Xerox Credit
04-09-99 4.91% $4,100,000 $4,077,353
Total 72,962,754
Health care (0.9%)
Glaxo Wellcome
04-07-99 4.88 5,000,000(b) 4,973,837
Insurance (2.9%)
American General
05-05-99 4.90 6,000,000 5,946,065
American General Finance
05-07-99 4.89 10,000,000 9,907,617
Total 15,853,682
Miscellaneous (7.1%)
CXC
04-12-99 4.94 7,100,000(b) 7,057,652
04-16-99 4.87 5,000,000(b) 4,967,867
05-12-99 4.88 3,900,000(b) 3,861,360
05-14-99 4.89 4,700,000(b) 4,652,076
Fleet Funding
04-05-99 4.88 5,400,000(b) 5,373,082
04-15-99 4.89 12,500,000(b) 12,420,687
Total 38,332,724
Multi-industry conglomerates (3.3%)
General Electric
03-23-99 4.87 6,100,000 6,080,277
06-03-99 4.94 5,000,000 4,935,333
General Electric Capital
04-30-99 5.14 3,000,000 2,973,857
General Electric Capital Services
04-30-99 4.87 3,700,000 3,669,287
Total 17,658,754
Total commercial paper
(Cost: $480,437,537) $480,437,537
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Moneyshare Fund
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Letters of credit (10.7%)
Bank of New York-
River Fuel
05-04-99 4.88% $7,300,000(b) $7,235,492
Barclays Bank-
Banco de Columbia
05-07-99 4.85 5,000,000 4,953,521
Canadian Imperial Bank-
Commed Fuel
04-07-99 4.82 5,000,000 4,973,892
04-22-99 4.82 3,800,000 3,772,526
Chase Manhattan-
Somerset Railroad
03-25-99 4.87 5,800,000 5,779,684
Dresdner Bank-
ContiFinancial
03-04-99 4.85 5,000,000 4,996,632
04-09-99 4.86 4,800,000 4,773,432
05-11-99 4.86 5,000,000 4,950,725
First Chicago-
Commed Fuel
04-15-99 4.86% 5,000,000 4,968,601
Union Bank Switzerland-
River Fuel Trust
03-17-99 4.86 3,700,000 3,691,009
03-24-99 4.86 2,800,000 2,790,550
04-05-99 4.90 5,000,000 4,974,820
Total letters of credit
(Cost: $57,860,884) $57,860,884
Total investments in securities
(Cost: $542,798,084)(d) $542,798,084
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(c) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 28, 1999.
(d) Also represents the cost of securities for federal income tax purposes
at Feb. 28, 1999.
<PAGE>
Retirement Annuity Mutual Funds
International Equity Fund
Feb. 28, 1999 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Common stocks (94.3%)
Issuer Shares Value(a)
Canada (4.6%)
Banks and savings & loans (0.5%)
Toronto-Dominion Bank 243,600 $10,030,873
Communications equipment & services (1.9%)
Newbridge Networks 214,600(b) 5,215,231
Northern Telecom 606,100(d) 35,191,681
Total 40,406,912
Energy (0.8%)
Petro-Canada 1,523,400 16,364,352
Multi-industry conglomerates (1.4%)
Bombardier Cl B 1,977,600(b) 29,045,713
France (13.8%)
Banks and savings & loans (2.8%)
Banque Natl de Paris 750,744(b) 60,009,746
Electronics (1.0%)
SGS-Thomson
Microelectronics 239,484(b) 21,367,840
Energy (2.6%)
Total Petroleum Cl B 532,936(b) 55,666,497
Household products (0.9%)
Rhone-Poulenc Cl A 424,482(b) 19,485,464
Industrial equipment & services (1.8%)
Castorama Dubois 178,298 37,639,439
Utilities -- electric (2.8%)
Suez Lyonnaise des Eaux 294,934 59,051,390
Utilities -- telephone (1.9%)
France Telecom 436,232 40,889,072
<PAGE>
Germany (10.8%)
Automotive & related (2.5%)
Volkswagen AG 823,202 53,311,055
Banks and savings & loans (1.3%)
Bayerische Vereinsbank 504,804(b) 28,639,651
Chemicals (2.8%)
Henkel KGaA 751,803 60,342,340
Industrial equipment & services (4.2%)
Mannesmann 662,860(b) 89,134,055
Italy (14.6%)
Banks and savings & loans (7.6%)
Banca Intesa 8,246,434(b,d) 45,606,903
Credito Italiano 11,257,574(b) 59,289,139
Instituto Bancario
San Paolo di Torino 3,342,179(d) 58,428,308
Total 163,324,350
Utilities -- telephone (7.0%)
Telecom Italia 11,760,400(b) 79,522,650
Telecom Italia 6,654,586(d) 70,167,286
Total 149,689,936
Japan (7.3%)
Electronics (1.9%)
Matsushita Communication
Industrial 475,000 24,590,037
TDK 236,000 16,933,189
Total 41,523,226
Health care (0.5%)
Takeda Chemical Inds 291,000 10,010,371
Health care services (0.9%)
Yamanouchi Pharmaceutical 660,000 20,144,190
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
International Equity Fund
(Percentages represent
value of investments
compared to net assets)
Common stocks (continued)
Issuer Shares Value(a)
Household products (0.4%)
Shiseido 676,000 $8,207,384
Utilities -- telephone (3.6%)
Nippon Telegraph &
Telephone 6,825(b) 56,277,982
NTT Mobile Communication
Network 5,100 20,725,939
Total 77,003,921
Mexico (0.3%)
Beverages & tobacco
Fomento Economico
Mexicano ADR 245,000(c) 6,446,563
Netherlands (5.9%)
Energy (0.8%)
Royal Dutch Petroleum 406,941 17,897,265
Household products (1.2%)
Unilever 2,580,482(b) 24,735,468
Industrial equipment & services (2.5%)
Philips Electronics 749,651(b) 52,339,358
Utilities -- telephone (1.4%)
Equant 416,002 30,050,820
Singapore (2.2%)
Banks and savings & loans
Oversea-Chinese Banking 3,705,000(b) 24,733,098
Overseas Union Bank 6,070,000(b) 22,197,990
Total 46,931,088
South Korea (0.6%)
Electronics
Samsung Electronics 169,711(b) 11,956,751
<PAGE>
Spain (5.9%)
Banks and savings & loans (0.9%)
Argentaria 805,086(b,d) $19,297,187
Utilities -- electric (2.4%)
Endesa ADR 855,525 22,707,259
Iberdrola 1,884,957(b) 29,533,318
Total 52,240,577
Utilities -- telephone (2.6%)
Telefonica de Espana 1,192,905 54,562,520
Sweden (4.3%)
Banks and savings & loans (0.9%)
Nordbanken Holding 3,183,828(b) 19,286,356
Communications equipment & services (3.4%)
Ericsson (LM) Cl B 2,749,936(b) 72,879,354
Switzerland (4.3%)
Banks and savings & loans (3.4%)
UBS 236,294 73,561,537
Health care (0.9%)
Novartis 10,815(b) 18,976,827
Thailand (0.1%)
Banks and savings & loans
Thai Farmers Bank 1,396,000(b) 2,335,089
See accompanying notes to investments in securities.
<PAGE>
Common stocks (continued)
Issuer Shares Value(a)
United Kingdom (19.5%)
Banks and savings & loans (0.6%)
Standard Chartered 1,062,409 $13,879,311
Energy (0.8%)
Shell Transport & Trading 3,236,308(b) 18,091,933
Health care (0.9%)
Zeneca Group ADR 483,970 20,162,529
Insurance (0.2%)
Allied Zurich 320,179 4,729,428
Media (2.2%)
British Sky
Broadcasting Group 5,012,157 46,297,294
Multi-industry conglomerates (5.0%)
General Electric 8,440,537(b) 69,069,759
Williams 6,173,405 38,420,186
Total 107,489,945
Retail (2.5%)
Great Universal Stores 4,193,906(b) $53,579,246
Utilities -- telephone (7.3%)
Cable & Wireless
Communications 2,402,430(b) 28,381,587
Orange 4,012,555 58,434,036
Vodafone 3,703,379 68,178,837
Total 154,994,460
Total common stocks
(Cost: $1,629,157,413) $2,014,008,683
Other (0.6%)
Issuer Shares Value(a)
Banca Intesa
Warrants 10,662,896 $12,134,376
Total other
(Cost: $2,347,168) $12,134,376
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
International Equity Fund
(Percentages represent
value of investments
compared to net assets)
Short-term securities (11.8%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (7.3%)
Federal Home Loan Bank Disc Nt
03-19-99 4.75% $30,200,000 $30,120,809
Federal Home Loan Mtge Corp Disc Nts
03-09-99 4.75 41,100,000 41,045,886
03-11-99 4.74 26,000,000 25,959,093
03-12-99 4.79 6,700,000 6,688,483
03-15-99 4.73 9,600,000 9,579,904
03-17-99 4.74 15,000,000 14,964,675
04-23-99 4.79 15,300,000 15,188,852
Federal Natl Mtge Assn Disc Nt
03-24-99 4.76 11,600,000 11,561,736
Total 155,109,438
Commercial paper (4.5%)
AT&T
03-30-99 4.85 6,300,000 6,273,797
Cargill Global
03-01-99 4.86 3,400,000(e) 3,399,082
Ciesco LP
03-09-99 4.82 12,500,000(e) 12,483,333
03-17-99 4.86 2,500,000(e) 2,493,963
Delaware Funding
03-22-99 4.87 14,000,000(e) 13,950,343
Dresdner US Finance
03-01-99 4.86 15,000,000 14,995,958
Fleet Funding
03-10-99 4.85 5,500,000(e) 5,491,883
GMAC
03-10-99 4.85 20,000,000 19,970,545
Natl Australia Funding (Delaware)
03-16-99 4.85 6,900,000 6,884,262
Novartis Finance
03-11-99 4.83 4,000,000(e) 3,993,573
Rohm & Haas
03-22-99 4.85 5,800,000(e) 5,782,139
Salomon Smith Barney
04-01-99 4.86 700,000 696,894
Total 96,415,772
Total short-term securities
(Cost: $251,531,666) $251,525,210
Total investments in securities
(Cost: $1,883,036,247)(f) $2,277,668,269
See accompanying notes to investments in securities.
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements. Foreign security values are stated in U.S. dollars.
(b) Non-income producing.
(c) Investments representing 5% or more of the outstanding voting securities of
the issuer. Transactions with companies that are or were affiliates during the
six months ended Feb. 28, 1999 are as follows:
Issuer Beginning Purchase Sales Ending Dividend Value(a)
cost cost cost cost income
Fomento Economico
Mexicano ADR* $6,730,104 $-- $-- $6,730,104 $-- $6,446,563
*Issuer was not an affiliate for the entire period ended Feb. 28, 1999.
(d) Security is partially or fully on loan. See Note 5 to the financial
statements.
(e) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(f) At Feb. 28, 1999, the cost of securities for federal income tax purposes was
approximately $1,883,036,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.....................................$452,865,000
Unrealized depreciation......................................(58,233,000)
Net unrealized appreciation.................................$394,632,000
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Aggressive Growth Fund
Feb. 28, 1999 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Common stocks (91.4%)
Issuer Shares Value(a)
Aerospace & defense (0.2%)
L-3 Communications
Holdings 100,000(b) $4,287,500
Airlines (1.8%)
Comair Holdings 275,000 10,346,875
SkyWest 350,000 11,003,125
Southwest Airlines 600,000 18,075,000
Total 39,425,000
Banks and savings & loans (1.5%)
Creditrust 360,000(b) 9,000,000
MicroFinancial 220,000(b) 2,695,000
UnionBanCal 400,000 12,575,000
Zions Bancorp 137,000 8,768,000
Total 33,038,000
Beverages & tobacco (0.6%)
Beringer Wine Estates
Holdings Cl B 325,000(b) 13,101,563
Communications equipment & services (2.1%)
American Tower Cl A 650,000(b) 17,428,125
Gilat Satellite Networks 230,000(b,c) 13,627,500
Loral Space &
Communications 250,000(b) 4,500,000
Orbital Sciences 405,000(b) 11,188,125
Total 46,743,750
Computers & office equipment (32.3%)
3Com 425,000(b) 13,360,938
Acxiom 225,000(b) 5,385,938
American Management
Systems 550,000(b) 18,356,250
Analytical Surveys 113,000(b) 2,938,000
Ascend Communications 300,000(b) 23,081,250
At Home Corp Series A 35,000(b) 3,714,375
BindView Development 220,000(b) 4,950,000
Bottomline Technologies 117,500(b) 2,467,500
Cambridge Technology
Partners 300,000(b) 7,537,500
CBT Group Public ADR 400,000(b,c) 6,375,000
Cisco Systems 322,500(b) 31,544,530
CMGI 40,000(b) 4,905,000
Cognex 200,000(b) 5,000,000
Compuware 225,000(b) 12,585,938
Earthlink Network 100,000(b) 6,018,750
Electronics for Imaging 150,000(b) 5,240,625
EMC 100,000(b) 10,237,500
Entrust Technologies 100,000(b) 2,462,500
Equant 150,000(b,c) 10,800,000
Excite 125,000(b) 12,812,500
Exodus Communications 40,000(b) 2,935,000
Fiserv 500,000(b) 23,500,000
FORE Systems 1,000,000(b) 14,500,000
Gemstar Intl Group 230,000(b) 14,720,000
<PAGE>
GeoTel Communications 250,000(b) $10,765,625
IDX Systems 80,000(b) 1,900,000
Information Advantage 115,000(b) 1,380,000
Informix 1,350,000(b) 11,812,500
InfoSpace.com 100,000(b) 5,450,000
Inktomi 40,000(b) 2,485,000
Legato Systems 500,000(b) 24,624,999
Maxtor 1,650,000(b) 13,612,500
Mercury Interactive 445,000(b) 28,841,562
Metzler Group 730,000(b) 31,024,999
MindSpring Enterprises 100,000(b) 8,550,000
Natl Data 150,000 7,246,875
Netscape Communications 275,000(b) 21,295,313
Network Associates 250,000(b) 11,750,000
Network Solutions Cl A 41,200(b) 7,477,800
Novell 750,000(b) 14,531,250
ONYX Software 90,000(b) 1,670,625
Parametric Technology 374,500(b) 5,757,938
Peregrine Systems 187,500(b) 4,804,688
Policy Management Systems 289,150(b) 10,572,047
Profit Recovery Group Intl 356,300(b) 11,757,900
PSINet 650,000(b) 23,278,125
Qualix Group 375,000(b) 2,390,625
Quantum 500,000(b) 8,218,750
Rational Software 375,000(b) 11,132,813
Read-Rite 800,000(b) 6,800,000
Safeguard Scientifics 475,000(b) 17,753,125
Seagate Technology 675,000(b) 19,532,813
Secure Computing 1,000,000(b,d) 18,875,000
Security Dynamics
Technologies 600,000(b) 11,100,000
Security First Technologies 170,000(b) 11,156,250
SERENA Software 78,000(b) 1,023,750
Software AG Systems 600,000(b) 6,712,500
Sterling Commerce 825,000(b) 21,450,000
SunGard Data Systems 394,200(b) 15,620,175
Sykes Enterprises 220,000(b) 6,270,000
Unisys 820,000(b) 24,446,249
USWeb 100,000(b) 3,368,750
Verio 100,000(b) 2,837,500
VeriSign 170,000(b) 16,660,000
Verity 130,000(b) 5,021,250
VerticalNet 24,400(b) 1,006,500
Yahoo! 30,000(b) 4,605,000
Total 721,999,890
Electronics (10.0%)
Altera 290,000(b) 14,101,250
Atmel 800,000(b) 13,750,000
C-Cube Microsystems 455,000(b) 8,531,250
Cree Research 450,000(b) 14,709,375
Galileo Technology 150,000(b) 3,075,000
Kent Electronics 417,000(b) 4,743,375
KLA-Tencor 300,000(b) 15,543,750
Level One Communications 300,000(b) 10,050,000
See accompanying notes to investments in securities.
<PAGE>
Common stocks (continued)
Issuer Shares Value(a)
LSI Logic 480,000(b) $12,450,000
Micron Technology 450,000(b) 25,931,250
PRI Automation 150,000(b) 4,500,000
SIPEX 295,000(b) 3,374,063
SLI 675,000(b) 15,103,125
Teradyne 150,000(b) 7,143,750
Uniphase 365,000(b,g) 32,165,624
Veeco Instruments 300,000(b) 11,475,000
Vitesse Semiconductor 260,000(b) 11,943,750
Xilinx 250,000(b) 17,437,500
Total 226,028,062
Energy (0.1%)
Tesoro Petroleum 334,800(b) 2,678,400
Financial services (2.7%)
E*TRADE Group 55,000(b) 2,523,125
Federated Investors Cl B 600,000 11,512,500
Heller Financial 266,500 6,445,969
Knight/Trimark Group Cl A 950,000(b) 33,012,500
Sirrom Capital 800,000 5,700,000
Total 59,194,094
Food (0.5%)
Suiza Foods 275,000(b) 10,175,000
Furniture & appliances (0.6%)
Ethan Allen Interiors 280,000 12,600,000
Health care (8.6%)
Albany Molecular Research 120,000(b) 2,400,000
Alkermes 212,000(b) 5,949,250
Allergan 175,000 14,262,500
ALZA 275,000(b) 14,420,313
Anesta 440,000(b) 8,717,500
Biogen 100,000(b,g) 9,612,500
Forest Laboratories 253,100(b) 12,512,631
Genentech 160,000(b) 12,770,000
Guidant 300,000 17,100,000
IDEXX Laboratories 530,000(b) 11,858,750
IVAX 750,000(b) 11,062,500
MedImmune 1,300(b) 71,500
PathoGenesis 350,000(b,f) 16,034,375
Pharmaceutical Product
Development 450,000(b) 15,637,500
Watson Pharmaceuticals 790,000(b) 38,166,874
Zila 790,000(b) 3,234,063
Total 193,810,256
Health care services (2.7%)
Health Management
Systems 1,220,000(b,d) 6,481,250
IMS Health 315,000 11,182,500
McKesson HBOC 180,000 12,240,000
MEDE AMERICA 65,000(b) 1,113,125
<PAGE>
Medical Manager 400,000(b) $11,200,000
Pediatrix Medical Group 200,000(b) 6,175,000
Sunrise Assisted Living 290,000(b) 11,201,250
Total 59,593,125
Household products (1.3%)
ServiceMaster 590,000 11,025,625
Steiner Leisure 645,000(b,c,d,e)19,027,500
Total 30,053,125
Industrial equipment & services (1.2%)
Catalytica 760,000(b) 10,830,000
Iron Mountain 500,000(b) 15,312,500
Total 26,142,500
Insurance (0.5%)
Nationwide Financial
Services Cl A 268,750 12,211,328
Leisure time & entertainment (2.8%)
Circus Circus Enterprises 800,000(b) 13,700,000
Harley-Davidson 257,700 14,898,281
Mirage Resorts 477,000(b) 9,301,500
SFX Entertainment Cl A 200,000(b) 12,225,000
Ticketmaster Online-
Citysearch Cl B 120,000(b) 4,335,000
Travel Services Intl 480,000(b) 7,320,000
Total 61,779,781
Media (4.5%)
Adelphia Communications
Cl A 250,000(b) 14,093,750
Chancellor Media 200,000(b) 8,750,000
Outdoor Systems 1,150,000(b) 32,128,125
Snyder Communications 300,000(b) 10,275,000
USA Networks 425,000(b) 16,893,750
Young & Rubicam 475,000(b) 17,931,250
Total 100,071,875
Miscellaneous (0.3%)
Intraware 150,000(b) 2,831,250
Corporate Executive Board 129,000(b) 3,160,500
Total 5,991,750
Multi-industry conglomerates (1.1%)
Danaher 400,000 19,300,000
Global Imaging Systems 312,500(b) 5,761,719
Total 25,061,719
Restaurants & lodging (1.2%)
Darden Restaurants 600,000 13,200,000
Papa John's Intl 312,950(b) 13,535,088
Total 26,735,088
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Aggressive Growth Fund
(Percentages represent
value of investments
compared to net assets)
Common stocks (continued)
Issuer Shares Value(a)
Retail (8.4%)
Bed Bath & Beyond 500,000(b) $14,718,750
Best Buy 100,000(b,g) 9,275,000
eBay 15,000(b,g) 5,010,000
Intimate Brands 550,000 21,621,875
Lands' End 220,000(b) 6,668,750
Office Depot 500,000(b) 17,843,750
Rite Aid 470,300 19,458,663
Safeway 500,000(b) 28,874,999
Spiegel Cl A 700,000(b) 4,987,500
Staples 592,500(b) 17,423,203
Tiffany & Co 275,000 15,726,563
TJX Companies 420,000 11,996,250
Williams-Sonoma 400,000(b) 13,675,000
Total 187,280,303
Textiles & apparel (0.3%)
Steve Madden 650,000(b) 5,850,000
Transportation (1.3%)
Airborne Freight 550,000 21,450,000
Hunt (JB) Transport Services 300,000 7,050,000
Total 28,500,000
Utilities -- telephone (4.8%)
ALLTEL 250,000 14,968,750
COLT Telecom Group ADR 280,000(b,c) 20,860,000
Crown Castle Intl 750,000(b) $12,750,000
Energis 440,000(b,c) 10,579,448
Global TeleSystems Group 100,000(b) 5,550,000
Intermedia Communications 5,288(b) 95,845
MCI WorldCom 400,000(b) 33,000,000
Omnipoint 750,000(b) 8,718,750
Total 106,522,793
Total common stocks
(Cost: $1,694,329,710) $2,038,874,902
Preferred stocks (1.1%)
Issuer Shares Value(a)
Federal-Mogul Finance Trust
7.00% Cm Cv 69,000(e) $4,019,250
Sinclair Broadcast Group
6.00% Cv 100,000 4,150,000
Snyder Strypes Trust
6.50% Cv 155,000 4,805,000
Suiza Capital
5.50% Cm Cv 302,326(e) 10,959,317
5.50% Cv 174 6,308
Total preferred stocks
(Cost: $29,814,228) $23,939,875
See accompanying notes to investments in securities.
<PAGE>
Bonds (0.8%)
Issuer Coupon Principal Value(a)
rate amount
Continucare
Cv Sr Sub Nts
10-31-02 8.00% $4,000,000(e) $1,370,000
Elan Finance
Zero Coupon Cv Company Guaranty
12-14-18 3.25 18,000,000(e,h) 10,822,500
Wind River Systems
Cv Sub Nts
08-01-02 5.00 6,800,000 6,757,500
Total bonds
(Cost: $20,720,012) $18,950,000
Options purchased (0.2%)
Issuer Shares Exercise Expiration Value(a)
price date
Calls
Acxiom 100,000 $22 May 1999 $368,750
Bed Bath & Beyond 100,000 30 May 1999 293,750
Centocor 200,000 45 March 1999 143,750
Circuit City 30,000 50 July 1999 303,750
Electronics for Imaging 100,000 30 April 1999 637,500
FINOVA Group 150,000 50 April 1999 665,625
Kansas City Southern Inds 120,000 40 March 1999 907,500
Pacific Sunwear of California 250,000 25 March 1999 1,140,625
Pediatrix Medical Group 20,000 30 May 1999 141,250
Sunrise Assisted Living 60,000 40 March 1999 90,000
TJ Maxx 100,000 30 April 1999 156,250
Total options purchased
(Cost: $5,692,428) $4,848,750
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Aggressive Growth Fund
Short-term securities (6.8%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agency (4.4%)
Federal Home Loan Mtge Corp Disc Nts
03-02-99 4.79% $1,900,000 $1,899,246
03-04-99 4.83 16,700,000 16,688,867
03-05-99 4.73 19,400,000 19,384,739
03-24-99 4.77 15,000,000 14,950,417
03-26-99 4.77 20,200,000 20,127,885
04-06-99 4.77 25,000,000 24,874,652
Total 97,925,806
Commercial paper (2.1%)
Alcoa
04-12-99 4.88 9,000,000 8,946,540
Cargill Global
03-01-99 4.86 1,300,000(i) 1,299,649
Ciesco LP
03-09-99 4.82 3,100,000(i) 3,095,867
Delaware Funding
03-08-99 4.86 7,700,000(i) 7,690,684
Dresdner US Finance
03-02-99 4.86 4,100,000 4,098,343
Gateway Fuel
03-15-99 4.84 1,400,000 1,397,001
GTE Funding
03-26-99 4.85% 5,500,000 5,480,076
Household Finance
03-09-99 4.86 5,100,000 5,093,143
Natl Rural Utilities
03-05-99 4.84 4,100,000 4,096,706
Pacific Gas & Electric
03-08-99 4.83 5,500,000 5,493,359
Total 46,691,368
Letter of credit (0.3%)
Bank of America-
AES Hawaii
03-12-99 4.83 7,000,000 6,987,816
Total short-term securities
(Cost: $151,604,990) $151,604,990
Total investments in securities
(Cost: $1,902,161,368)(j) $2,238,218,517
See accompanying notes to investments in securities.
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. As of Feb. 28, 1999, the
value of foreign securities represented 3.64% of net assets.
(d) Investments representing 5% or more of the outstanding voting securities of
the issuer. Transactions with companies that are or were affiliates during the
six months ended Feb. 28, 1999 are as follows:
Issuer Beginning Purchase Sales Ending Dividend Value(a)
cost cost cost cost income
Health Management
Systems $13,565,943 $143,750 $464,375 $13,245,318 $-- $6,481,250
Secure Computing 12,952,228 -- 1,082,813 11,869,415 -- 18,875,000
Steiner Leisure* 6,314,583 671,250 1,300,000 5,685,833 -- 19,027,500
Total $32,832,754 $815,000 $2,847,188 $30,800,566 $-- $44,383,750
*Issuer was not an affiliate for the entire period ended Feb. 28, 1999.
(e) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(f) Security is partially or fully on loan. See Note 5 to the financial
statements.
(g) At Feb. 28, 1999, securities valued at $22,390,625 were held to cover open
call options written as follows:
Issuer Shares Exercise Expiration Value(a)
price date
Best Buy 60,000 $95 March 1999 $262,500
Biogen 100,000 90 March 1999 875,000
eBay 15,000 285 March 1999 972,187
Uniphase 25,000 100 March 1999 39,844
Total $2,149,531
(h) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(i) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(j) At Feb. 28, 1999, the cost of securities for federal income tax purposes was
approximately $1,902,096,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation...................................$452,129,000
Unrealized depreciation...................................(116,006,000)
Net unrealized appreciation...............................$336,123,000
<PAGE>
Retirement Annuity Mutual Funds
Global Yield Fund
Feb. 28, 1999 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Bonds (92.9%)(c)
Issuer Coupon Principal Value(a)
rate amount
Argentina (1.4%)
Comp Nav Perez Companc
(U.S. Dollar)
01-30-04 9.00% $1,000,000(d) $940,000
Republic of Argentina
(Japanese Yen)
03-27-01 5.50 110,000,000 907,045
(U.S. Dollar)
03-31-05 6.19 1,410,000 1,155,319
Total 3,002,364
Australia (0.8%)
New South Wales Treasury
(Australian Dollar)
03-01-08 8.00 2,700,000(d) 1,927,136
Bermuda (0.1%)
Central Euro Media
(Deutsche Mark) Sr Nts Series RG
08-15-04 4.45 750,000 303,569
Brazil (0.1%)
Espirito Santo-Escelsa
(U.S. Dollar)
07-15-07 10.00 410,000 229,600
Canada (3.1%)
Govt of Canada
(Canadian Dollar)
02-01-06 7.00 2,000,000 1,461,932
06-01-23 8.00 4,200,000 3,725,582
Rogers Communication
(Canadian Dollar) Sr Nts
07-15-07 6.37 2,000,000 1,349,380
Total 6,536,894
Cayman Islands (--%)
Roil
(U.S. Dollar)
12-05-02 12.78 870,000(d) 156,600
China (0.1%)
Zhuhai Highway
(U.S. Dollar) Sub Nts
07-01-08 12.00 500,000(d) 267,500
<PAGE>
Denmark (3.5%)
Govt of Denmark
(Danish Krone)
05-15-03 8.00% 7,700,000 $1,302,732
03-15-06 8.00 7,500,000 1,343,318
11-10-24 7.00 24,850,000 4,617,403
Total 7,263,453
France (0.2%)
Govt of France
(European Currency Unit)
04-25-05 7.50 400,000 531,258
Germany (6.7%)
Bayerische Landesbank
(U.S. Dollar) Sub Nts
12-01-08 5.88 800,000 786,834
Federal Republic of Germany
(Deutsche Mark)
11-11-04 7.50 2,776,314 3,646,055
06-20-16 6.00 2,914,364 3,724,362
07-04-27 6.50 4,243,723 5,727,842
Total 13,885,093
Greece (0.7%)
Hellenic Republic
(Greek Drachma)
03-21-00 9.80 477,000,000 1,633,248
Hong Kong (2.3%)
Dao Heng Bank
(U.S. Dollar) Sub Nts
01-24-07 7.75 1,000,000(d) 793,240
Hutchison Whampoa Finance
(U.S. Dollar) Company Guaranty
08-01-27 7.50 2,000,000(d) 1,652,061
Mass Transit Railway
(U.S. Dollar)
02-04-09 7.50 2,500,000 2,492,869
Total 4,938,170
Indonesia (0.2%)
Tjiwi Kimia Finance Mauritius
(U.S. Dollar) Company Guaranty
08-01-04 10.00 1,300,000 689,000
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Global Yield Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Israel (0.4%)
Israel Electric
(U.S. Dollar) Sr Nts
12-15-26 7.88% $1,000,000(d) $935,940
Italy (3.5%)
Govt of Italy
(Italian Lira)
09-15-01 7.75 1,265,317 1,538,325
01-01-04 8.50 2,757,875 3,655,555
11-01-26 7.25 1,575,191 2,223,498
Total 7,417,378
Japan (0.6%)
Sony
(U.S. Dollar)
03-04-03 6.13 1,500,000 1,510,814
Malaysia (0.7%)
Petronas
(U.S. Dollar)
08-15-15 7.75 2,000,000 1,727,738
Mexico (3.1%)
Banco Nacional de Comercio Exterior
(U.S. Dollar)
02-02-04 7.25 2,000,000 1,760,000
Petroleos Mexicanos
(U.S. Dollar) Company Guaranty
12-02-08 9.38 1,500,000(d) 1,488,750
United Mexican States
(British Pound) Medium-term Nts Series E
05-30-02 14.48 750,000 1,146,911
(U.S. Dollar)
09-15-16 11.38 2,150,000(g) 2,176,875
Total 6,572,536
Norway (4.0%)
Govt of Norway
(Norwegian Krone)
05-31-01 7.00 47,270,000 6,213,073
05-15-09 5.50 16,040,000 2,114,341
Total 8,327,414
Panama (0.4%)
Banco General
(U.S. Dollar)
08-01-02 7.70 1,000,000(d) 922,081
<PAGE>
Peru (0.3%)
Southern Peru Copper
(U.S. Dollar)
05-30-07 7.90% $1,000,000 $900,776
Philippines (0.4%)
Philippine Long Distance Telephone
(U.S. Dollar) Medium-term Nts Series E
03-06-07 7.85 1,200,000(d) 1,025,373
Poland (0.8%)
Govt of Poland
(U.S. Dollar)
10-27-14 4.00 2,000,000(f) 1,808,750
Russia (0.1%)
Govt of Russia
(U.S. Dollar)
06-10-03 11.75 375,000(d) 105,234
07-24-05 8.75 425,000(d) 93,500
Tatneft Finance
(U.S. Dollar) Company Guaranty
10-29-02 9.00 800,000(d) 122,000
Total 320,734
Slovenia (1.5%)
Republic of Slovenia
(Deutsche Mark)
06-16-04 5.75 5,500,000 3,290,100
South Korea (0.6%)
Korea Development Bank
(U.S. Dollar)
05-15-06 7.25 1,500,000 1,431,984
Spain (1.7%)
Govt of Spain
(European Monetary Unit)
04-30-99 9.40 1,202,024 1,333,926
04-30-06 8.80 1,021,721 1,453,320
01-31-29 6.00 732,033 915,482
Total 3,702,728
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Sweden (3.4%)
Govt of Sweden
(Swedish Krona)
02-09-05 6.00% 15,000,000 $2,022,945
08-15-07 8.00 26,200,000 4,023,979
Paulson Enterprenad
(Swedish Krona)
12-15-00 8.29 9,000,000 1,097,266
Total 7,144,190
United Kingdom (10.8%)
Colt Telecom Group
(Deutsche Mark)
07-31-08 4.2 51,500,000 858,005
United Kingdom Treasury
(British Pound)
03-03-00 9.00 2,000,000 3,332,018
11-06-01 7.00 1,125,000 1,898,533
06-07-02 7.00 1,000,000 1,710,273
06-10-03 8.00 3,540,000 6,389,600
12-07-05 8.50 2,715,000 5,303,095
09-08-06 7.75 1,500,000 2,856,114
Total 22,347,638
United States (38.3%)
California Infrastructure-
Pacific Gas & Electric
(U.S. Dollar)
06-25-03 6.16 1,050,000 1,058,841
Citicorp
(Deutsche Mark)
09-19-09 6.25 3,000,000 1,821,456
DTE Burns Harbor LLC
(U.S. Dollar) Sr Nts
01-30-03 6.57 1,300,000(d) 1,270,750
Federal Natl Mtge Assn
(U.S. Dollar)
02-15-08 5.75 2,000,000 1,991,646
03-01-10 5.50 1,500,000(b) 1,455,938
07-01-13 6.00 1,987,818 1,969,590
02-01-27 7.50 597,560 613,646
03-01-27 7.50 1,246,261 1,279,810
06-01-27 7.50 1,046,259 1,074,425
Federated Dept Stores
(U.S. Dollar)
02-15-28 7.00 1,500,000 1,477,972
First Union-
Lehman Brothers Cl A3
(U.S. Dollar) Series 1997-C1
04-18-29 7.50 1,150,000 1,145,757
Firstar Capital
(U.S. Dollar) Company Guaranty Series B
12-15-26 8.32 1,000,000 1,053,800
Ford Motor Credit
(U.S. Dollar)
09-10-02 6.55 3,000,000 3,053,501
<PAGE>
GTE North
(U.S. Dollar) Series F
02-15-10 6.38% $2,000,000 $2,036,985
MGM Grand
(U.S. Dollar)
02-01-05 6.95 1,500,000 1,412,049
Morgan (JP)
(U.S. Dollar) Sr Sub Medium-term Nts Series A
02-15-12 4.00 1,000,000 888,170
Nationwide CSN Trust
(U.S. Dollar)
02-15-25 9.88 1,500,000(d) 1,770,034
New York Life Insurance
(U.S. Dollar)
12-15-23 7.50 1,000,000(d) 985,453
Railcar Leasing
(U.S. Dollar)
01-15-13 7.13 3,000,000(d) 3,170,884
Texas Utilities Electric
(U.S. Dollar)
08-01-07 7.17 2,000,000 2,113,447
TU Electric Capital
(U.S. Dollar) Company Guaranty
01-30-37 8.18 1,000,000 1,052,930
U.S. Treasury
(U.S. Dollar)
02-15-00 5.88 4,500,000 4,535,977
11-15-00 5.75 1,500,000 1,514,397
11-30-00 4.63 1,000,000 991,412
11-15-01 7.50 1,650,000 1,744,073
04-30-03 5.75 1,425,000 1,448,571
02-15-05 7.50 5,600,000 6,201,462
11-15-16 7.50 13,725,000 16,250,494
02-15-20 8.50 3,150,000 4,149,142
02-15-27 6.63 1,300,000 1,451,378
TIPS
01-15-07 3.38 3,000,000(e) 2,995,051
USX
(U.S. Dollar)
03-01-08 6.85 2,000,000 1,954,223
Watson Pharmaceuticals
(U.S. Dollar) Sr Nts
05-15-08 7.13 1,200,000 1,205,839
Zurich Capital
(U.S. Dollar) Company Guaranty
06-01-37 8.38 1,000,000(d) 1,077,470
Total 78,216,573
Venezuela (0.3%)
Govt of Venezuela
(U.S. Dollar) Series DM
03-31-07 2.42 2,631,000(f) 798,691
Total bonds
(Cost: $188,924,798) $189,765,323
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Global Yield Fund
(Percentages represent
value of investments
compared to net assets)
Short-term securities (6.4%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (5.6%)
Federal Home Loan Bank Disc Nt
03-19-99 4.75% $800,000 $797,902
Federal Home Loan Mtge Corp Disc Nts
03-09-99 4.75 1,500,000 1,498,025
03-11-99 4.79 1,800,000 1,797,145
03-12-99 4.77 2,200,000 2,196,235
03-15-99 4.72 1,100,000 1,097,707
03-18-99 4.76 1,300,000 1,296,741
03-23-99 4.79 1,300,000 1,295,857
03-26-99 4.77 1,400,000 1,395,012
Total 11,374,624
Commercial paper (0.8%)
Natl Australia Funding
(Delaware)
03-16-99 4.85% $800,000 $798,175
Paccar Financial
03-23-99 4.83 900,000 897,108
Total 1,695,283
Total short-term securities
(Cost: $13,069,907) $13,069,907
Total investments in securities
(Cost: $201,994,705)(h) $202,835,230
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) At Feb. 28, 1999, the cost of securities purchased, including interest
purchased, on a when-issued basis was $1,478,583.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) U.S. Treasury inflation-protection securities (TIPS) are securities in which
the principal amount is adjusted for inflation and the semiannual interest
payments equal a fixed percentage of the inflation-adjusted principal amount.
(f) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 28, 1999.
(g) Security is partially or fully on loan. See Note 5 to the financial
statements.
(h) At Feb. 28, 1999, the cost of securities for federal income tax purpose was
approximately $201,767,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.....................................$6,963,000
Unrealized depreciation.....................................(5,895,000)
Net unrealized appreciation.................................$1,068,000
<PAGE>
Retirement Annuity Mutual Funds
Growth Dimensions Fund
Feb. 28, 1999 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Common stocks (94.1%)
Issuer Shares Value(a)
Aerospace & defense (0.6%)
United Technologies 141,000 $17,466,375
Airlines (1.7%)
AMR 303,500(b) 16,825,281
Southwest Airlines 1,103,900 33,254,988
Total 50,080,269
Automotive & related (0.7%)
Ford Motor 365,100 21,654,994
Banks and savings & loans (3.7%)
BankAmerica 289,774 18,925,864
State Street 589,500 45,207,282
Wachovia 75,200 6,396,700
Wells Fargo 1,036,900 38,106,075
Total 108,635,921
Beverages & tobacco (0.6%)
Coca-Cola 295,200 18,874,350
Chemicals (1.5%)
Waste Management 898,200 43,899,525
Communications equipment & services (2.4%)
Lucent Technologies 407,300 41,366,406
Tellabs 340,800(b) 27,285,300
Total 68,651,706
Computers & office equipment (18.3%)
America Online 842,500(b) 74,929,844
BMC Software 439,326(b) 17,957,450
Cisco Systems 1,128,300(b) 110,361,843
Compaq Computer 1,193,400 42,067,350
EMC 421,300(b) 43,130,588
Hewlett-Packard 401,500 26,674,656
Intl Business Machines 575,600 97,851,999
Microsoft 505,400(b) 75,873,175
Network Associates 280,500(b) 13,183,500
Novell 898,400(b) 17,406,500
Solectron 140,400(b) 6,274,125
Sun Microsystems 67,000(b) 6,519,938
Total 532,230,968
Electronics (4.7%)
Applied Materials 252,500(b) 14,045,313
Intel 491,200 58,913,299
Teradyne 69,900(b) 3,328,988
Texas Instruments 463,400 41,329,487
Uniphase 224,900(b) 19,819,313
Total 137,436,400
<PAGE>
Energy (1.5%)
Exxon 322,800 $21,486,375
Mobil 280,800 23,359,050
Total 44,845,425
Energy equipment & services (0.1%)
Schlumberger 53,300(c) 2,588,381
Financial services (6.5%)
Associates First Capital Cl A 415,262 16,870,019
Citigroup 869,800 51,100,749
Fannie Mae 477,400 33,418,000
MBNA 1,052,950 25,534,038
Morgan Stanley, Dean
Witter, Discover & Co 435,490 39,411,845
Paychex 344,050 14,579,119
Schwab (Charles) 112,000 8,351,000
Total 189,264,770
Health care (11.8%)
ALZA 140,300(b) 7,356,981
Boston Scientific 320,400(b) 8,490,600
Bristol-Myers Squibb 477,200 60,097,375
Elan ADR 350,900(b,c,e) 26,909,644
Johnson & Johnson 177,700 15,171,138
Medtronic 407,200 28,758,500
Merck & Co 561,700 45,918,975
Pfizer 631,800 83,358,112
Schering-Plough 673,600 37,679,500
Warner-Lambert 421,200 29,089,125
Total 342,829,950
Health care services (2.7%)
Cardinal Health 561,450 40,529,672
IMS Health 435,700 15,467,350
McKesson HBOC 332,457 22,607,076
Total 78,604,098
Household products (1.1%)
Gillette 337,200 18,082,350
Procter & Gamble 157,400 14,087,300
Total 32,169,650
Industrial equipment & services (0.6%)
Illinois Tool Works 252,700 17,373,125
Insurance (1.7%)
ACE 593,500(c) 16,172,875
American Intl Group 294,112 33,510,386
Total 49,683,261
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Growth Dimensions Fund
(Percentages represent
value of investments
compared to net assets)
Common stocks (continued)
Issuer Shares Value(a)
Leisure time & entertainment (2.3%)
Time Warner 1,038,600 $66,989,700
Media (3.8%)
CBS 842,240 31,057,600
Clear Channel
Communications 280,400(b) 16,824,000
Comcast Special Cl A 238,300 16,904,406
Gannett 589,886 37,457,761
New York Times Cl A 280,800 8,704,800
Total 110,948,567
Multi-industry conglomerates (5.4%)
General Electric 982,700 98,577,094
Tyco Intl 561,472(c) 41,794,572
Xerox 301,200 16,622,475
Total 156,994,141
Restaurants & lodging (1.0%)
Marriott Intl Cl A 842,000 30,312,000
Retail (13.1%)
Costco Companies 463,100(b) 37,192,719
CVS 631,700 33,480,100
Dayton Hudson 856,000 53,553,500
Home Depot 828,200 49,433,188
Kroger 350,600(b) 22,679,438
Safeway 1,263,700(b) 72,978,674
TJX Companies 238,000 6,797,875
Wal-Mart Stores 1,193,300 103,071,287
Total 379,186,781
<PAGE>
Transportation (0.2%)
Kansas City Southern Inds 155,000 $7,246,250
Utilities -- electric (1.2%)
CMS Energy 476,900 19,731,737
Duke Energy 280,900 15,976,188
Total 35,707,925
Utilities -- gas (0.8%)
El Paso Energy 655,600 23,888,425
Utilities -- telephone (6.1%)
AirTouch Communications 281,000(b) 25,588,563
BellSouth 1,384,300 64,023,875
MCI WorldCom 702,000(b) 57,915,000
U S WEST Communications
Group 601,600 32,072,800
Total 179,600,238
Total common stocks
(Cost: $1,876,482,469) $2,747,163,195
Options purchased (--%)
Issuer Shares Exercise Expiration Value(a)
price date
Put
America Online 180,000 $75 April 1999 $596,250
Total options purchased
(Cost: $1,348,353) $596,250
See accompanying notes to investments in securities.
<PAGE>
Short-term securities (6.4%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (1.5%)
Federal Home Loan Mtge Corp Disc Nts
03-09-99 4.74% $7,800,000 $7,789,752
03-11-99 4.79 20,700,000 20,667,155
03-24-99 4.77 15,000,000 14,950,417
Total 43,407,324
Commercial paper (4.9%)
AT&T
03-30-99 4.85 2,000,000 1,991,682
CAFCO
03-18-99 4.85 1,600,000(d) 1,595,921
Cargill Global
03-01-99 4.86 4,300,000(d) 4,298,839
Ciesco LP
03-09-99 4.82 4,900,000(d) 4,893,467
03-19-99 4.89 2,200,000(d) 2,193,523
04-09-99 4.85 4,600,000 4,574,696
Clorox
03-04-99 4.82 5,800,000 5,796,133
Dresdner US Finance
03-01-99 4.86 4,500,000 4,498,787
03-02-99 4.85 5,400,000 5,397,817
Fleet Funding
04-07-99 4.87 8,100,000(d) 8,057,441
GTE Funding
03-10-99 4.83 5,000,000 4,992,636
03-23-99 4.85 6,700,000 6,678,426
Household Finance
03-09-99 4.84 4,200,000 4,194,377
Kredietbank North America Finance
04-27-99 4.86 8,000,000 7,934,018
<PAGE>
Natl Australia Funding (Delaware)
03-16-99 4.85% $11,400,000 $11,373,999
NBD Bank Canada
03-03-99 4.86 6,000,000 5,996,767
Paccar Financial
03-23-99 4.83 6,100,000 6,080,399
Pacific Gas & Electric
03-19-99 4.85 6,300,000 6,283,095
Pacific Life Insurance
03-12-99 4.83 3,600,000 3,593,734
Preferred Receivables
03-12-99 4.87 10,600,000(d) 10,581,434
Reed Elsevier
03-22-99 4.83 5,200,000(d) 5,183,987
Salomon Smith Barney
03-04-99 4.90 5,100,000 5,096,550
04-01-99 4.86 5,900,000 5,873,824
04-07-99 4.86 10,000,000 9,947,567
Sheffield Receivables
03-23-99 4.86 2,900,000(d) 2,890,662
Variable Funding Capital
04-05-99 4.88 4,300,000(d) 4,278,522
Total 144,278,303
Total short-term securities
(Cost: $187,688,963) $187,685,627
Total investments in securities
(Cost: $2,065,519,785)(f) $2,935,445,072
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. As of Feb. 28, 1999, the
value of foreign securities represented 2.99% of net assets.
(d) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(e) Security is partially or fully on loan. See Note 5 to the financial
statements.
(f) At Feb. 28, 1999, the cost of securities for federal income tax purpose was
approximately $2,065,520,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation.....................................$882,702,000
Unrealized depreciation......................................(12,777,000)
Net unrealized appreciation.................................$869,925,000
<PAGE>
Retirement Annuity Mutual Funds
Income Advantage Fund
Feb. 28, 1999 (Unaudited)
(Percentages represent
value of investments
compared to net assets)
Bonds (82.1%)
Issuer Coupon Principal Value(a)
rate amount
Government obligations (0.1%)
Govt of Russia
(Russian Ruble)
12-15-20 6.63% 1,550,000(b,c) $110,438
(U.S. Dollar)
12-29-49 6.63 33,677(c) 3,452
Republic of Korea
(U.S. Dollar)
04-15-08 8.88 250,000(c) 264,261
Total 378,151
Aerospace & defense (1.2%)
BE Aerospace
Sr Sub Nts
11-01-08 9.50 1,000,000 1,062,500
Compass Aerospace
Sr Sub Nts
04-15-05 10.13 2,300,000(e) 2,236,750
L-3 Communications
Sr Sub Nts Series B
05-01-07 10.38 1,060,000 1,168,650
Sequa
10-15-99 9.63 2,500,000 2,553,125
Total 7,021,025
Automotive & related (2.1%)
EV Intl
Company Guaranty Series A
03-15-07 11.00 2,500,000 2,243,750
Hayes Lemmerz Intl
Company Guaranty Series B
07-15-07 9.13 2,000,000 2,115,000
MSX Intl
Company Guaranty
01-15-08 11.38 1,725,000 1,712,063
Oxford Automotive
Company Guaranty
06-15-07 10.13 4,250,000 4,398,750
Penda
Sr Nts Series B
03-01-04 10.75 1,200,000 1,227,000
Venture Holdings Trust
Sr Nts Series B
07-01-05 9.50 1,000,000 1,005,000
Total 12,701,563
Banks and savings & loans (0.1%)
CEI Citicorp Holdings
(Argentine Peso)
02-14-07 11.25 500,000(c,e) 361,250
Wilshire Financial Services
01-01-04 13.00 2,300,000(b) 368,000
Series B
08-15-04 13.00 450,000(b) 72,000
Total 801,250
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Beverages & tobacco (0.4%)
Canandaigua Brands
Company Guaranty
03-01-09 8.50% $2,500,000 $2,518,750
Building materials & construction (0.5%)
Formica
Sr Sub Nts
03-01-09 10.88 2,875,000(e) 2,857,031
Chemicals (0.5%)
Allied Waste North America
Sr Nts
01-01-09 7.88 2,825,000(e) 2,860,313
Commercial finance (0.5%)
Advance Holding
Zero Coupon Series B
04-15-03 12.33 1,900,000(g) 1,163,750
Netia Holdings
(U.S. Dollar) Company Guaranty Series B
11-01-07 10.25 1,725,000(c) 1,625,813
Total 2,789,563
Communications equipment & services (12.6%)
21st Century Telecom Group
Zero Coupon Sr Disc Nts
02-15-03 12.25 1,500,000(g) 525,000
Allegiance Telecom
Zero Coupon Sr Disc Nts Series B
02-15-03 12.06 4,950,000(g) 2,846,250
AMSC Acquisition
Company Guaranty Series B
04-01-08 12.25 1,500,000 735,000
Bestel
(U.S. Dollar) Zero Coupon
05-15-01 12.75 2,850,000(c,g) 1,681,500
Birch Telecom
06-15-08 14.00 2,000,000(e) 1,835,000
Caprock Communications
Sr Nts Series B
07-15-08 12.00 3,000,000 3,075,000
Comcast Cellular Holdings
Sr Nts Series B
05-01-07 9.50 2,500,000 2,853,125
Crown Castle Intl
Zero Coupon Sr Disc Nts
11-15-02 10.01 2,250,000(g) 1,650,938
CTI Holdings
(U.S. Dollar) Zero Coupon Sr Nts
04-15-03 11.50 950,000(c,g) 418,000
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Dobson/Sygnet Communications
Sr Nts
12-15-08 12.25% $4,000,000(e) $4,369,999
EchoStar DBS
Sr Nts
02-01-09 9.38 8,200,001(e) 8,261,500
Esprit Telecom Group
(U.S. Dollar) Sr Nts
12-15-07 11.50 1,250,000(c) 1,325,000
06-15-08 10.88 2,000,000(c) 2,080,000
GST Equipment Funding
Sr Nts
05-01-07 13.25 750,000 757,500
GST Telecom/GST Network Funding
Zero Coupon Sr Disc Nts
05-01-03 10.50 3,000,000(e,g) 1,410,000
GST Telecommunications
Sr Sub Nts
11-15-07 12.75 750,000 690,938
Iridium LLC/Capital
Company Guaranty Series A
07-15-05 13.00 1,000,000 820,000
Company Guaranty Series C
07-15-05 11.25 510,000 387,600
Company Guaranty Series D
07-15-05 10.88 2,800,000 2,100,000
Jordan Telecommunications Products
Sr Nts Series B
08-01-07 9.88 3,700,000 3,616,750
Zero Coupon Sr Disc Nts Series B
08-01-00 9.19 3,250,000(g) 2,632,500
KMC Telecom Holdings
Zero Coupon Sr Disc Nts
02-15-03 12.68 1,500,000(g) 795,000
Level 3 Communications
Sr Nts
05-01-08 9.13 375,000 365,625
MJD Communications
Sr Sub Nts Series B
05-01-08 9.50 600,000 606,000
Nextel Communications
Sr Disc Nts
01-15-04 10.13 2,500,000 2,537,500
08-15-04 9.75 500,000 508,750
Northeast Optic Network
Sr Nts
08-15-08 12.75 2,000,000 2,045,000
NTL
Sr Nts Series B
02-15-07 10.00 2,000,000(e) 2,135,000
Zero Coupon Sr Nts Series B
02-01-01 8.94 5,000,000(g) 4,350,000
Pathnet
Sr Nts
04-15-08 12.25 1,400,000 812,000
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Phone Tel Technologies
Sr Nts
12-15-06 12.00% $2,130,000(b) $958,500
Price Comm Cellular Holdings
Sr Nts
08-15-08 11.25 2,500,000 2,362,500
RCN
Zero Coupon Sr Disc Nts Series B
02-15-03 9.80 700,000(g) 378,000
Satelites Mexicanos
(U.S. Dollar) Sr Nts Series B
11-01-04 10.13 2,000,000(c) 1,600,000
Talton Holdings
Company Guaranty Sr Nts Series B
06-30-07 11.00 750,000 681,563
Telehub Communications
Zero Coupon Company Guaranty
07-31-01 13.88 3,000,000(g) 1,826,250
Triton Communications
Zero Coupon Company Guaranty
05-01-03 10.86 4,000,000(g) 2,270,000
Unisite
Zero Coupon Sub Nts
12-15-00 13.00 1,000,000(d,g) 1,160,900
Versatel Telecom
(U.S. Dollar) Sr Nts
05-15-08 13.25 1,400,000(c,e) 1,489,250
05-15-08 13.25 2,700,000(c) 2,767,500
Vialog
Company Guaranty
11-15-01 12.75 3,720,000 3,124,800
Total 76,845,738
Computers & office equipment (2.0%)
Anacomp
Sr Sub Nts Series B
04-01-04 10.88 1,500,000 1,563,750
Concentric Network
Sr Nts
12-15-07 12.75 600,000 650,250
Cooperative Computing
Sr Sub Nts
02-01-08 9.00 2,250,000 1,971,563
Decisionone Holdings
Zero Coupon
08-01-02 9.88 1,425,000(b,g) 42,750
Globix
Sr Nts
05-01-05 13.00 2,050,000 1,824,500
PSINet
Sr Nts
11-01-08 11.50 1,500,000(e) 1,680,000
Sr Nts Series B
02-15-05 10.00 1,700,000 1,768,000
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Verio
Sr Nts
04-01-05 10.38% $500,000 $516,250
12-01-08 11.25 2,250,000(e) 2,430,000
Total 12,447,063
Consumer finance -- personal loans (0.4%)
Crown Paper
Sr Sub Nts
09-01-05 11.00 3,000,000 2,355,000
Electronics (0.4%)
Hyundai Semiconductor
(U.S. Dollar) Sr Nts
05-15-07 8.63 1,500,000(c,e) 1,318,373
Metromedia Fiber Network
Sr Nts
11-15-08 10.00 1,250,000(e) 1,312,500
Total 2,630,873
Energy (5.5%)
Belco Oil & Gas
Sr Sub Nts Series B
09-15-07 8.88 2,000,000 1,860,000
Canadian Forest Oil
(U.S. Dollar) Company Guaranty
09-15-07 8.75 1,900,000(c) 1,691,000
Clark R&M
Sr Sub Nts
11-15-07 8.88 1,400,000 1,162,000
Costilla Energy
Sr Nts
10-01-06 10.25 2,250,000 1,462,500
Energy Corp of America
Sr Sub Nts Series A
05-15-07 9.50 1,500,000 1,378,125
Forcenergy
Sr Sub Nts
11-01-06 9.50 500,000 180,000
Sr Sub Nts Series B
02-15-07 8.50 750,000 275,625
Forest Oil
Company Guaranty
01-15-06 10.50 600,000 591,000
Houston Exploration
Sr Sub Nts Series B
01-01-08 8.63 1,450,000 1,435,500
HS Resources
Company Guaranty
11-15-06 9.25 1,000,000 948,750
Sr Sub Nts
12-01-03 9.88 1,400,000 1,391,250
Sr Sub Nts Series B
11-15-06 9.25 2,000,000 1,897,500
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Hurricane Hydrocarbons
(U.S. Dollar) Sr Nts
11-01-04 11.75% $2,250,000(c,e) $1,125,000
Lodestar Holdings
Company Guaranty
05-15-05 11.50 4,650,000 3,917,625
Michael Petroleum
Sr Nts Series B
04-01-05 11.50 500,000 361,875
Nuevo Energy
Company Guaranty Series B
06-01-08 8.88 3,000,000 2,730,000
Ocean Energy
Company Guaranty Series B
07-01-08 8.38 2,250,000 2,115,000
Panda Global Energy
(U.S. Dollar) Company Guaranty
04-15-04 12.50 4,245,000(c,e) 1,825,350
Rayovac
Sr Sub Nts Series B
11-01-06 10.25 2,412,000 2,632,095
Roil
(U.S. Dollar)
12-05-02 12.78 1,740,000(c,e) 313,200
Tesoro Petroleum
Company Guaranty Series B
07-01-08 9.00 2,150,000 2,098,938
Transamerica Energy
06-15-02 11.50 2,200,000 660,000
Zero Coupon
06-15-99 17.13 2,400,000(g) 720,000
XCL
05-01-04 13.50 1,000,000(e) 700,000
Total 33,472,333
Energy equipment & services (1.0%)
Dailey Intl
Company Guaranty Series B
02-15-08 9.50 1,000,000 501,250
DI Inds
Sr Nts
07-01-07 8.88 1,000,000 740,000
Grant Geophysical
Company Guaranty Series B
02-15-08 9.75 1,225,000 800,844
Grey Wolf
Company Guaranty Series C
07-01-07 8.88 250,000 185,313
Northern Offshore ASA
(U.S. Dollar) Company Guaranty
05-15-05 10.00 3,400,000(c,e) 1,325,999
Plains Resources
Company Guaranty Series D
03-15-06 10.25 1,000,000 1,012,500
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Seven Seas Petroleum
Sr Nts Series B
05-15-05 12.50% $2,000,000 $1,300,000
Total 5,865,906
Financial services (1.2%)
Arcadia Financial
Sr Nts
03-15-07 11.50 4,830,000 3,906,263
Gemini Inds
12-23-01 13.50 1,500,000(d) 1,200,000
Tjiwi Kimia Finance Mauritius
(U.S. Dollar) Company Guaranty
08-01-04 10.00 3,000,000(c) 1,590,000
Tri Polyta Finance BV
(U.S. Dollar) Zero Coupon Company Guaranty
12-01-03 10.25 2,100,000(b,c,f) 714,000
Total 7,410,263
Food (1.8%)
Ameriserve Food Distributions
Company Guaranty
07-15-07 10.13 1,300,000 1,109,875
Aurora Foods
Sr Sub Nts Series D
02-15-07 9.88 2,000,000 2,177,500
Chiquita Brands Intl
Sr Nts
01-15-04 9.63 1,000,000 1,032,500
Daya Guna
(U.S. Dollar) Company Guaranty
06-01-07 10.00 1,250,000(c,e) 787,898
RAB Enterprises
Sr Nts
05-01-05 10.50 2,400,000(e) 1,821,000
Specialty Foods
Sr Nts Series B
08-15-01 10.25 1,100,000 995,500
Stroh Brewery
Sr Sub Nts
07-01-06 11.10 3,261,000 2,767,774
Total 10,692,047
Furniture & appliances (0.2%)
Lifestyle Furnishings
Company Guaranty
08-01-06 10.88 1,000,000 1,125,000
Health care (0.9%)
Alaris Medical Systems
Company Guaranty
12-01-06 9.75 3,225,000 3,309,656
Zero Coupon Sr Disc Nts
08-01-03 11.12 4,000,000(e,g) 2,420,000
Total 5,729,656
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Health care services (2.6%)
Abbey Healthcare Group
Sr Sub Nts
11-01-02 9.50% $5,750,000 $5,649,375
Fountain View
Company Guaranty Series B
04-15-08 11.25 950,000 833,625
Magellan Health Services
Sr Sub Nts
02-15-08 9.00 2,000,000 1,730,000
Oxford Health Plans
Sr Nts
05-15-05 11.00 1,775,000(e) 1,810,500
Paracelsus Healthcare
Sr Sub Nts
08-15-06 10.00 2,250,000 1,920,938
Physician Sales & Service
Company Guaranty
10-01-07 8.50 2,250,000 2,295,000
Tenet Healthcare
Sr Nts
01-15-05 8.00 1,500,000 1,512,987
Total 15,752,425
Household products (0.3%)
Revlon Worldwide
Zero Coupon Sr Disc Nts Series B
03-15-01 10.59 1,000,000(f) 557,500
Scotts
Sr Sub Nts
01-15-09 8.63 1,050,000(e) 1,078,875
Total 1,636,375
Industrial equipment & services (1.9%)
Clark Materials Handling
Sr Nts Series D
11-15-06 10.75 2,250,000 2,351,250
Grove Holdings/Capital
Zero Coupon
05-01-03 11.63 1,000,000(g) 335,000
Grove Inds
05-01-10 14.50 725,387(e) 471,502
HDA Parts System
Sr Sub Nts with Rights
08-01-05 12.00 1,000,000(e) 942,500
Motor & Gears
Sr Nts Series D
11-15-06 10.75 4,250,000 4,361,562
Park-Ohio Inds
Sr Sub Nts
12-01-07 9.25 1,500,000(e) 1,552,500
Thermadyne Holdings
Zero Coupon
06-01-03 12.49 3,000,000(g) 1,350,000
Total 11,364,314
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Insurance (0.6%)
Americo Life
Sr Sub Nts
06-01-05 9.25% $2,000,000 $2,047,500
Veritas Holdings
(U.S. Dollar) Sr Nts
12-15-03 9.63 1,591,000(c) 1,587,023
Total 3,634,523
Leisure time & entertainment (5.6%)
Coast Hotels & Casino
Company Guaranty Series B
12-15-02 13.00 1,900,000 2,234,875
Hammons (JQ) Hotels
1st Mtge
02-15-04 8.88 1,500,000 1,417,500
HMH Properties
Sr Nts Series C
12-01-08 8.45 2,000,000 1,985,000
Hollywood Park
Sr Sub Nts
02-15-07 9.25 3,000,000(e) 2,996,249
Hollywood Theaters
Company Guaranty
08-01-07 10.63 1,100,000 495,000
Icon Health & Fitness
Sr Sub Nts Series B
07-15-02 13.00 1,000,000(b) 700,000
Isle of Capri Casinos/Capital
1st Mtge Series B
08-31-04 13.00 2,750,000 2,994,063
Lodgenet Entertainment
Sr Nts
12-15-06 10.25 2,000,000 1,997,500
Mohegan Tribal Gaming
Sr Sub Nts
01-01-09 8.75 2,000,000(e) 2,042,500
Premier Cruises
Sr Nts
03-15-08 11.00 2,000,000(e) 690,000
Premier Parks
Sr Nts
04-01-06 9.25 800,000 862,000
Regal Cinemas
Sr Sub Nts
06-01-08 9.50 2,000,000(e) 2,000,000
12-15-10 8.88 3,000,000(e) 2,902,500
Riviera Holdings
Company Guaranty
08-15-04 10.00 950,000 834,813
Trump Atlantic City Assn/Funding
1st Mtge Company Guaranty
05-01-06 11.25 2,550,000 2,167,500
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Trump Holdings & Funding
Sr Nts
06-15-05 15.50% $1,200,000 $1,197,000
United Artists Theatres
Series 1995A
07-01-15 9.30 1,652,839 1,490,167
Sr Sub Nts Series B
04-15-08 9.75 2,000,000 1,800,000
Venetian Casino/LV Sands
Company Guaranty
11-15-04 12.25 1,525,000 1,576,469
11-15-05 10.00 600,000 576,000
Waterford Gaming/LLC
Sr Nts
11-15-03 12.75 1,230,000 1,383,750
Total 34,342,886
Media (11.1%)
Ackerley Group
Sr Sub Nts
01-15-09 9.00 575,000 598,000
Adams Outdoor Advertising
Sr Nts
03-15-06 10.75 1,500,000 1,636,875
Adelphia Communications
Sr Nts Series B
02-01-08 8.38 3,500,000 3,648,750
Zero Coupon Sr Nts Pay-in-kind Series B
02-15-04 9.50 60,991(f,j) 63,049
Australis Holdings
(U.S. Dollar) Zero Coupon Sr Disc Nts
11-01-00 12.80 2,260,000(b,c,g) 22,600
Australis Media
(U.S. Dollar)
11-01-00 14.00 267,062(c) 216,602
05-15-03 15.75 47,958(b,c) 5
(U.S. Dollar) Zero Coupon
05-15-03 15.75 4,500,000(b,c,g) 450
Benedek Communications
Zero Coupon Sr Disc Nts
05-15-01 13.46 2,250,000(g) 1,648,125
Big City Radio
Zero Coupon Company Guaranty
03-15-01 11.25 2,000,000(g) 1,410,000
Bresnan Communications
Sr Nts
02-01-09 8.00 700,000(e) 708,750
Capstar Broadcasting
Zero Coupon Sr Disc Nts
02-01-02 7.49 1,000,000(e,g) 846,250
CBS Radio
Pay-in-kind Sub Deb
01-15-09 11.38 1,052,800(j) 1,221,248
Central Euro Media
(U.S. Dollar) Sr Nts
08-15-04 9.38 2,150,000(c) 1,741,500
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Chancellor Media
Sr Nts
11-01-08 8.00% $5,600,000(e) $5,935,999
Sr Sub Nts
10-01-04 9.38 1,500,000 1,586,250
Coaxial Communications/Phoenix
Company Guaranty
08-15-06 10.00 2,500,000 2,637,500
Emmis Communications
Sr Sub Nts
03-15-09 8.13 1,075,000(e) 1,077,688
Globo Communicacoes Participacoes
(U.S. Dollar) Sr Nts
12-05-08 10.63 2,250,000(c,e) 1,248,750
Golden Sky Systems
Sr Sub Nts
08-01-06 12.38 3,000,000(e) 3,213,750
Jacor Communications
Company Guaranty
12-15-06 9.75 3,250,000 3,615,625
Liberty Group Operating
Company Guaranty
02-01-08 9.38 275,000 280,500
MDC Communications
(U.S. Dollar) Sr Sub Nts
12-01-06 10.50 3,000,000(c) 3,030,000
OpTel
Sr Nts Series B
02-15-05 13.00 2,250,000 2,292,188
Outdoor Systems
Company Guaranty
06-15-07 8.88 3,665,000 3,939,874
Paxson Communications
Sr Sub Nts
10-01-02 11.63 2,250,000 2,289,375
Pegasus Media & Communications
Series B
07-01-05 12.50 1,500,000 1,665,000
Sr Nts Series B
10-15-05 9.63 750,000 776,250
Price Communications Wireless
Sr Nts
12-15-06 9.13 3,000,000(e) 3,150,000
Sr Sub Nts
07-15-07 11.75 2,500,000 2,775,000
Radio Unica
Zero Coupon Company Guaranty
08-01-02 11.74 2,000,000(g) 1,102,500
Regional Independent Medical
07-01-08 10.50 3,600,000(c) 3,726,000
Sinclair Broadcast Group
Sr Sub Nts
12-15-07 8.75 450,000 455,625
Spanish Broadcasting System
06-15-02 12.50 1,000,000 1,105,000
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Telemundo Holdings
Zero Coupon Sr Disc Nts
08-15-03 11.50% $4,000,000(e,g) $2,320,000
Telewest Communication
(U.S. Dollar)
10-01-06 9.63 1,500,000(c) 1,605,000
(U.S. Dollar) Sr Nts
11-01-08 11.25 2,000,000(c,e) 2,365,000
Veninfotel
(U.S. Dollar) Cv Pay-in-kind
03-01-02 10.00 1,050,000(c,d,j) 1,575,000
Total 67,530,078
Metals (2.9%)
AK Steel
Sr Nts
02-15-09 7.88 3,500,000(e) 3,491,250
Bar Technologies
Company Guaranty
04-01-01 13.50 1,500,000(e) 1,582,500
EnviroSource
Sr Nts
06-15-03 9.75 3,000,000 2,602,500
Great Lakes Acquisition
Zero Coupon Series B
05-15-03 13.12 1,500,000(g) 840,000
Great Lakes Carbon
Company Guaranty Pay-in-kind Series B
05-15-08 10.25 2,125,000(j) 2,194,063
Imexsa Export Trust
(U.S. Dollar)
05-31-03 10.13 920,964(c,e) 833,472
Maxxam Group Holdings
Sr Nts Series B
08-01-03 12.00 1,000,000 1,013,750
Neenah
Sr Sub Nts
05-01-07 11.13 900,000 940,500
NSM Steel
Company Guaranty
02-01-08 12.25 1,200,000(b,e) 108,000
Ormet
Company Guaranty
08-15-08 11.00 3,500,000(e) 3,329,375
Sheffield Steel
1st Mtge Series B
12-01-05 11.50 1,000,000 930,000
Total 17,865,410
Miscellaneous (6.5%)
Advance Stores
Company Guaranty Series B
04-15-08 10.25 800,000 820,000
Advanced Glassfiber Yarn
Sr Sub Nts
01-15-09 9.88 2,120,000(e) 2,146,500
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Argo-Tech
Company Guaranty
10-01-07 8.63% $1,750,000 $1,645,000
Sr Sub Nts
10-01-07 8.63 3,000,000 2,820,000
Bistro Trust
Sub Nts
12-31-02 9.50 1,000,000(e) 958,100
Booth Creek Ski Holdings
Sr Nts Series B
03-15-07 12.50 500,000 482,500
Centaur Mining & Exploration
(U.S. Dollar) Company Guaranty
12-01-07 11.00 1,500,000(c) 1,440,000
Comforce Operating
Sr Nts Series B
12-01-07 12.00 750,000 744,375
Great Central Mines
(U.S. Dollar) Sr Nts
04-01-08 8.88 1,750,000(c,e) 1,732,500
ISG Resources
04-15-08 10.00 2,705,000 2,738,813
Knology Holdings
Zero Coupon Sr Disc Nts
10-15-02 12.46 1,500,000(g) 796,875
Nextel Partners
Zero Coupon Sr Disc Nts
02-01-04 6.78 9,600,000(e,g) 5,075,999
Norcal Waste Systems
Company Guaranty Series B
11-15-05 13.50 2,475,000 2,728,688
NSM Steel
Zero Coupon Company Guaranty
02-01-06 14.01 1,050,000(b,e,f) 210,000
NTEX
(U.S. Dollar) Sr Nts
06-01-06 11.50 1,400,000(c) 1,305,500
Omnipoint Communications
Sr Nts
02-17-06 8.53 1,877,147(e,h) 1,637,811
Outsourcing Solutions
Sr Sub Nts Series B
11-01-06 11.00 5,190,000 5,112,149
Pierce Leahy Command
Company Guaranty
05-15-08 8.13 3,625,000 3,634,063
Purina Mills
Sr Sub Nts
03-15-10 9.00 575,000 538,344
SC Intl
09-01-07 9.25 1,700,000 1,721,250
Stellex Inds
Sr Sub Nts Series B
11-01-07 9.50 1,250,000 1,089,063
Total 39,377,530
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Multi-industry conglomerates (0.6%)
Communications & Power Inds
Sr Sub Nts Series B
08-01-05 12.00% $1,000,000 $1,057,500
Jordan Inds
Zero Coupon Sr Sub Debs Series B
04-01-02 11.75 1,608,386(g) 977,094
Prime Succession
Sr Sub Nts
08-15-04 10.75 2,560,000 1,843,200
Total 3,877,794
Paper & packaging (3.9%)
Bear Island LLC/Finance
Sr Nts Series B
12-01-07 10.00 1,550,000 1,544,188
Berry Plastics
Sr Sub Nts
04-15-04 12.25 750,000(e) 787,500
BPC Holding
Sr Nts Pay-in-kind Series B
06-15-06 12.50 1,600,000(j) 1,688,000
Doman Inds
(U.S. Dollar)
03-15-04 8.75 1,500,000(c) 1,110,000
(U.S. Dollar) Sr Nts Series B
11-15-07 9.25 350,000(c) 241,063
Gaylord Container
Sr Nts
06-15-07 9.75 1,300,000 1,241,500
02-15-08 9.88 4,500,000 3,689,999
Graham Packaging/GPC Capital
Zero Coupon Sr Disc Nts Series B
01-15-03 10.03 1,500,000(g) 1,050,000
Grupo Industrial Durango
(U.S. Dollar)
08-01-03 12.63 1,000,000(c) 880,000
Repap New Brunswick
(U.S. Dollar) Sr Nts
06-01-04 9.00 650,000(c) 611,000
04-15-05 10.63 3,750,000(c) 2,831,250
Riverwood Intl
Company Guaranty
08-01-07 10.63 500,000 513,125
Company Guaranty Sr Nts
04-01-06 10.25 3,250,000 3,302,812
Silgan Holdings
06-01-09 9.00 825,000 847,688
Stone Container
Sr Nts
08-01-16 12.58 2,000,000 2,077,500
Stone Container Finance-Canada
(U.S. Dollar) Company Guaranty
08-15-06 11.50 1,500,000(c,e) 1,511,250
Total 23,926,875
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Restaurants & lodging (1.1%)
American Restaurant Group
Company Guaranty Series B
02-15-03 11.50% $1,000,000 $895,000
Domino's
Sr Sub Nts
01-15-09 10.38 2,600,000(e) 2,684,500
Prime Hospitality
Sr Sub Nts Series B
04-01-07 9.75 2,750,000 2,853,125
Total 6,432,625
Retail (2.6%)
Amazon.com
Zero Coupon Sr Disc Nts
05-01-03 10.00 2,900,000(g) 1,859,625
Dairy Mart Convenience Stores
Sr Sub Nts
03-15-04 10.25 2,850,000 2,682,563
Meyer (Fred)
Zero Coupon Sr Sub Debs Pay-in-kind
06-15-07 13.63 9(f,j) 10
Maxim Group
Company Guaranty Series B
10-15-07 9.25 1,500,000 1,496,250
Musicland Group
Company Guaranty Series B
03-15-08 9.88 2,500,000 2,587,500
Pathmark Stores
Sr Sub Nts
05-01-03 9.63 1,500,000 1,513,125
Sub Nts
06-15-02 11.63 3,500,000 3,499,999
Pueblo Xtra Intl
Sr Nts
08-01-03 9.50 900,000 860,625
Sr Nts Series C
08-01-03 9.50 1,000,000 956,250
United Auto Group
Sr Sub Nts Series A
07-15-07 11.00 750,000 604,688
Total 16,060,635
Textiles & apparel (1.7%)
Anvil Knitwear
Sr Nts Series B
03-15-07 10.88 1,500,000 547,500
Galey & Lord
Company Guaranty
03-01-08 9.13 1,000,000 792,500
GFSI
Sr Sub Nts Series B
03-01-07 9.63 4,000,000(e) 3,750,000
GFSI Holdings
Zero Coupon Sr Disc Nts Series B
09-15-04 10.77 2,700,000(g) 2,251,125
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Hosiery Corp of America
Sr Sub Nts
08-01-02 13.75% $1,000,000 $1,070,000
Pillowtex
Company Guaranty Sr Sub Nts Series B
12-15-07 9.00 500,000 514,375
Polysindo Intl Finance
(U.S. Dollar) Zero Coupon Company Guaranty
06-15-06 6.89 1,495,000(b,c,f) 388,700
Steel Heddle Group
Zero Coupon Series B
06-01-03 13.74 1,600,000(g) 386,000
Steel Heddle Mfg
Company Guaranty Series B
06-01-08 10.63 1,200,000 838,500
Total 10,538,700
Transportation (1.6%)
American Architectural
Company Guaranty
12-01-07 11.75 1,000,000 798,750
Autopistas Del Sol
(U.S. Dollar) Sr Nts
08-01-09 10.25 1,500,000(c,e) 1,125,000
Enterprises Shipholding
(U.S. Dollar) Sr Nts
05-01-08 8.88 3,100,000(c) 2,445,119
Global Ocean Carriers
Sr Nts
07-15-07 10.25 2,500,000 1,137,500
Greater Beijing
(U.S. Dollar) Sr Nts
06-15-04 9.25 350,000(c) 199,500
06-15-07 9.50 500,000(c) 270,000
Hermes Europe Rail
(U.S. Dollar) Sr Nts
01-15-09 10.38 2,600,000(c,e) 2,749,500
Trico Marine Services
Company Guaranty Series G
08-01-05 8.50 1,000,000 810,000
Total 9,535,369
Utilities -- electric (--%)
Espirito Santo-Escelsa
(U.S. Dollar)
07-15-07 10.00 330,000(c) 184,800
Utilities -- gas (0.3%)
Bellwether Exploration
Sr Nts
04-01-07 10.88 1,000,000 971,250
Empire Gas
Sr Nts
07-15-99 7.00 1,000,000(h) 735,000
Total 1,706,250
See accompanying notes to investments in securities.
<PAGE>
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Utilities -- telephone (7.4%)
Allegiance Telecom
Sr Nts
05-15-08 12.88% $250,000 $266,875
CCPR Services
Company Guaranty
02-01-07 10.00 3,000,000 3,108,749
Colt Telecommunications Group
(U.S. Dollar) Zero Coupon
12-15-01 5.72 1,000,000(c,g) 850,000
Geotek Communications
Cv Sr Sub Nts
02-15-01 12.00 500,000(b) 625
Grupo Iusacell
(U.S. Dollar)
07-15-04 10.00 600,000(c) 546,000
Hyperion Telecommunications
Sr Nts Series B
09-01-04 12.25 2,000,000 2,130,000
Zero Coupon Sr Disc Nts Series B
04-15-01 15.61 250,000(g) 195,000
Intermedia Communications
Sr Nts Series B
11-01-07 8.88 1,975,000 1,896,000
06-01-08 8.60 600,000(e) 568,500
Zero Coupon Sr Disc Nts Series B
07-15-02 9.51 3,125,000(g) 2,171,875
ITC Deltacom
Sr Nts
06-01-07 11.00 1,528,000 1,680,800
03-01-08 8.88 1,600,000 1,600,000
11-15-08 9.75 500,000(e) 525,000
McLeod USA
Sr Nts
03-15-08 8.38 1,345,000 1,371,900
02-15-09 8.13 2,250,000(e) 2,233,125
Metrocall
Sr Sub Nts
10-01-07 10.38 1,750,000 1,701,875
MetroNet Communications
(U.S. Dollar) Sr Nts
08-15-07 12.00 750,000(c) 847,500
11-01-08 10.63 1,050,000(c,e) 1,178,625
(U.S. Dollar) Zero Coupon Sr Disc Nts
11-01-02 10.74 800,000(c,g) 576,000
06-15-03 9.95 3,550,000(c,g) 2,449,500
NEXTLINK Communications
Sr Nts
04-15-06 12.50 1,000,000 1,092,500
11-15-08 10.75 1,250,000(e) 1,296,875
Omnipoint Communications
Sr Nts
08-15-06 11.63 2,750,000 2,189,688
Paging Network
Sr Sub Nts
08-01-07 10.13 2,000,000 1,740,000
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Bonds (continued)
Issuer Coupon Principal Value(a)
rate amount
Philippine Long Distance Telephone
(U.S. Dollar) Medium-term Nts Series E
03-06-07 7.85% $1,500,000(c,e) $1,281,716
Poland Telecom
(U.S. Dollar) Company Guaranty
06-01-04 14.00 100,000(c) 55,000
Poland Telecom Finance
(U.S. Dollar) Company Guaranty Series B
12-01-07 14.00 2,225,000(c) 1,980,250
Primus Telecommunications Group
Sr Nts
08-01-04 11.75 1,175,000 1,198,500
Sr Nts Series B
05-15-08 9.88 2,500,000 2,350,000
Pronet
Sr Sub Nts
06-15-05 11.88 2,000,000 2,120,000
RSL Communications
(U.S. Dollar) Company Guaranty
11-15-06 12.25 1,225,000(c) 1,326,063
(U.S. Dollar) Sr Nts
11-15-08 10.50 2,750,000(c,e) 2,825,624
Total 45,354,165
Total bonds
(Cost: $550,653,084) $499,622,279
See accompanying notes to investments in securities.
<PAGE>
Common stocks (0.9%)
Issuer Shares Value(a)
Concentric Network 3,804(b) $166,901
Core Capital 22,223(d) 315,567
Global Tele Systems Group 10,900(b) 604,950
ICO Global Communications 4,000 2,859,999
Intermedia Communications 71,733(b) 1,300,161
Nextel Communications Cl A 2,323(b) 69,835
OpTel 2,250(b,e) 45,000
Wilshire Real Estate
Investment Trust 30,000 95,625
Total common stocks
(Cost: $6,545,413) $5,458,038
Preferred stocks & other (8.9%)
Issuer Shares Value(a)
21st Century Telecom Group
13.75% Pay-in-kind 443(i) $287,950
Warrants 400 8,000
Allegiance Telecom
Warrants 4,950 188,100
American Mobile Satellite
Warrants 1,500 3,750
American Restaurant Group
12.00% Pay-in-kind Series B 528(i) 528,000
Warrants 500 5
APP Finance II Mauritius Cl B
12.00% 4,075(b,c) 1,915,250
Australis Holdings
Warrants 1,760 18
Belco Oil & Gas
6.50% Cv 40,000 632,500
Bell Technology
Warrants 2,050 102,500
Bestel
Warrants 2,850 28,500
Capstar Broadcasting
12.00% Pay-in-kind
Exchangeable 10,600(i) 1,261,400
Capstar Communications
12.63% Pay-in-kind
Series E 10,055(i) 1,224,196
Century Maintenance
13.25% Pay-in-kind 21,273(e,i) 2,217,710
Chesapeake Energy
7.00% Cv 10,000 90,000
Clark Materials Handling
13.00% 1,597 1,612,970
Communications & Power Inds
14.00% Pay-in-kind
Series B 29,691(i) 3,236,319
Concentric Network
13.50% Pay-in-kind
Series B 2,663(i) 2,556,480
Core Capital
10.00% Cv Series A/I 22,223(d) 519,352
<PAGE>
Crown Castle Intl
12.75% Pay-in-kind 3,000(e,i) $3,344,999
CSC Holdings
11.13% Pay-in-kind
Series M 44,081(i) 5,157,478
Fairfield Mfg
11.25% Pay-in-kind 1,300(i) 1,260,999
Geotek Communications
Warrants 40,000(k) --
Hyperion Telecommunications
12.88% Pay-in-kind
Series B 566(i) 500,910
Intermedia Communications
7.00% Cv Series F 60,000 982,500
13.50% Pay-in-kind
Series B 2,437(i) 2,607,590
Iridium World Communications
Warrants 1,700 119,000
IXC Communications
12.50% Pay-in-kind
Series B 599(i) 648,418
Jitney-Jungle Stores of America Cl A
15.00% 20,000 2,787,500
Kelley Oil & Gas
2.63% Cv 36,375 131,859
KMC Telecom Holdings
Warrants 1,500 3,750
Knology Holdings
Warrants 1,500 4,125
Lady Luck Gaming
Pay-in-kind 15,000(d,i) 525,000
Liberty Group Publishing
14.75% Cv 83,593 2,089,825
MetroNet Communications
Warrants 750 54,489
Nakornthai Strip Mill
Warrants 759,711(c) 1
Nebco Evans Holdings
11.25% Pay-in-kind 22,089(i) 883,560
Nextel Communications
11.13% Pay-in-kind
Series E 1,086(i) 1,020,840
NTL
13.00% Pay-in-kind
Series B 3,606(e,i) 4,110,840
Pathnet
Warrants 1,400 14,000
Paxson Communications
12.50% Pay-in-kind
Exchangeable 25,660(i) 2,347,890
Pegasus Communications
12.75% Pay-in-kind 7,450(i) 836,263
12.75% Pay-in-kind Series A 129(i) 140,610
Poland Telecom
Warrants 2,325 89,001
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
(Percentages represent
value of investments
compared to net assets)
Preferred stocks & other (continued)
Issuer Shares Value(a)
Price Communications
Warrants 4,472 $221,364
Primus Telecommunications
Warrants 1,175 14,688
RSL Communications
Warrants 1,250 125,000
SGW Holding
12.50% Pay-in-kind
Series B 11,633(d,i) 197,761
Cv Series A 9,677(d) 99,996
Warrants 250(d) 79,125
Sinclair Capital
11.63% 20,000 2,235,000
Telehub Communications
Warrants 3,000 30,000
Unifi Communications
Warrants 1,000 10
Unisite
Warrants 500(d,k) $--
Unisite Cl C
Warrants 540(d) 276,215
Versatel
Warrants 4,100 164,000
Vialog
Warrants 3,720 186,000
Warren (SD)
14.00% Series B 87,000 4,437,000
Total preferred stocks & other
(Cost: $57,416,624) $54,140,606
See accompanying notes to investments in securities.
<PAGE>
Short-term securities (6.8%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agency (5.4%)
Federal Home Loan Mtge Corp Disc Nts
03-11-99 4.79% $8,200,000 $8,186,989
03-12-99 4.77 5,400,000 5,390,757
03-23-99 4.79 5,300,000 5,283,111
03-25-99 4.77 8,700,000 8,670,153
03-26-99 4.77 4,900,000 4,882,544
Total 32,413,554
Commercial paper (1.4%)
Alcoa
04-12-99 4.88 1,100,000 1,093,466
CAFCO
03-18-99 4.85 1,500,000(l) 1,496,176
Falcon Asset
03-18-99 4.87 2,000,000(l) 1,994,881
GTE Funding
03-02-99 4.83 2,600,000 2,598,956
Novartis Finance
03-17-99 4.83 1,800,000(l) 1,795,662
Total 8,979,141
Total short-term securities
(Cost: $41,392,695) $41,392,695
Total investments in securities
(Cost: $656,007,816)(m) $600,613,618
See accompanying notes to investments in securities.
<PAGE>
Investments in securities
Retirement Annuity Mutual Funds
Income Advantage Fund
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. For long-term debt securities, item identified is in
default as to payment of interest and/or principal.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated. As of Feb. 28,
1999, the value of foreign securities represented 12.69% of net assets.
(d) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 28, 1999, is as follows:
Security Acquisition Cost
dates
Core Capital
Common 10-30-97 $444,460
Preferred 10.00% Cv Series A/I 10-30-97 555,575
Gemini Inds
13.50% 2001 12-23-96 1,500,000
Lady Luck Gaming
Preferred Pay-in-kind 11-19-98 525,000
SGW Holding
Preferred 12.50% Pay-in-kind Series B 08-12-97 thru 10-15-98 199,004
Preferred Cv Series A 08-12-97 100,002
Warrants 08-12-97 78,900
Unisite
Warrants 12-17-97 --
Zero Coupon Sub Nts 13.00% 2000 12-18-97 1,000,000
Unisite Cl C
Warrants 12-17-97 250,090
Veninfotel
(U.S. Dollar) Cv Pay-in-kind 10.00% 200203-05-97 thru 09-01-98 1,050,000
(e) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(f) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(g) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(h) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 28, 1999.
(i) Pay-in-kind securities are securities in which the issuer makes interest or
dividend payments in cash or in additional securities. The securities usually
have the same terms as the original holdings.
<PAGE>
(j) Pay-in-kind securities are securities in which the issuer has the option to
make interest or dividend payments in cash or in additional securities. The
securities issued as interest or dividends usually have the same terms,
including maturity date, as the pay-in-kind securities.
(k) Negligible market value.
(l) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(m) At Feb. 28, 1999, the cost of securities for federal income tax purposes was
approximately $655,050,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation......................................$14,057,000
Unrealized depreciation......................................(68,493,000)
Net unrealized depreciation.................................$(54,436,000)
<PAGE>
Bulk Rate
U.S. POSTAGE
PAID
Permit No. 85
Spencer, IA
Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN 55440-0010
.........S-6462 P (4/99)
