The AAL
Small Cap Stock Fund
The AAL
Mid Cap Stock Fund
The AAL
International Fund
The AAL
Capital Growth Fund
The AAL
Equity Income Fund
The AAL
Balanced Fund
THE AAL
MUTUAL FUNDS
Semi-Annual Report October 29, 1999
The AAL
High Yield Bond Fund
The AAL
Municipal Bond Fund
The AAL
Bond Fund
The AAL
Money Market Fund
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<PAGE>
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<PAGE>
Table of Contents
[LOGO APPEARS HERE]
<TABLE>
<CAPTION>
<S> <C>
President's Letter................................ 2
Portfolio Perspectives
The AAL Small Cap Stock Fund.................... 4
The AAL Mid Cap Stock Fund...................... 6
The AAL International Fund...................... 8
The AAL Capital Growth Fund..................... 10
The AAL Equity Income Fund...................... 12
The AAL Balanced Fund........................... 14
The AAL High Yield Bond Fund.................... 16
The AAL Municipal Bond Fund..................... 18
The AAL Bond Fund............................... 20
The AAL Money Market Fund....................... 22
Schedule of Investments
The AAL Small Cap Stock Fund.................... 24
The AAL Mid Cap Stock Fund...................... 28
The AAL International Fund...................... 32
The AAL Capital Growth Fund..................... 35
The AAL Equity Income Fund...................... 39
The AAL Balanced Fund........................... 43
The AAL High Yield Bond Fund.................... 48
The AAL Municipal Bond Fund..................... 53
The AAL Bond Fund............................... 65
The AAL Money Market Fund....................... 68
Statement of Assets and Liabilities............... 70
Statement of Operations........................... 72
Statement of Changes in Net Assets................ 74
Notes to Financial Statements..................... 78
A Note on Forward Looking Statements.............. 85
Glossary of Terms................................. 85
Financial Highlights
The AAL Small Cap Stock Fund.................... 86
The AAL Mid Cap Stock Fund...................... 88
The AAL International Fund...................... 90
The AAL Capital Growth Fund..................... 92
The AAL Equity Income Fund...................... 94
The AAL Balanced Fund........................... 96
The AAL High Yield Bond Fund.................... 98
The AAL Municipal Bond Fund..................... 100
The AAL Bond Fund............................... 102
The AAL Money Market Fund....................... 104
</TABLE>
The AAL Mutual Funds Semi-Annual Report October 29, 1999 1
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . PRESIDENT'S LETTER
[Photo appears Here]
OCTOBER 29, 1999
Dear AAL Mutual Funds Shareholder:
[LOGO APPEARS HERE]
The Markets and Economy in Review
Dramatic stock market volatility seen in the spring continued into the fall. The
markets dropped sharply in mid-August, then rallied as the Dow Jones Industrial
Average (Dow) hit a record high of 11,326 on Aug. 25. After the high, the market
flattened for a time, then dropped slightly and then remained flat during the
remainder of the period.
The performance of large-cap stocks relative to that of small- and mid-cap
stocks saw a bit of a reversal in this 6-month period. After significant
underperformance by small- and mid-cap stocks, these stocks now appear to be
performing on par with large caps. Investment focus seems to be shifting more to
opportunities in the less expensive small- and mid-cap areas. Many believe the
smaller stocks offer good value and so they are taking advantage of the buying
opportunities.
The early volatility and subsequent flattening of the stock market can be
attributed, at least partially, to a couple of factors. Some investors are
selling portions of their domestic holdings in an effort to add more foreign
stocks to their portfolios. This is being done to make up for what was sold in
1997 and 1998 when the Asian markets were doing poorly. These days, more foreign
capital is leaving the U.S. than is coming in as the global economic recovery
makes markets abroad more attractive.
Growing investor conservatism also has affected the market. Both large and small
investors are moving some of their portfolios into cash positions as they wait
to see what happens with interest rates. The Federal Reserve has raised short-
term interest rates twice since June in an attempt to slow U.S. economic growth
to a more sustainable pace and to keep a lid on inflation. Any signs of
increased inflationary pressure may cause another increase.
A report from the National Association of Purchasing Management, released Oct.
1, has helped to raise inflation fears in the market. According to the report,
manufacturing grew much more strongly than expected in September, while prices
for raw materials soared to the highest level in more than four years.
Another concern to the market was the jump in average hourly earnings for the
month of
2 The AAL Mutual Funds Semi-Annual Report
<PAGE>
September. The increase was the largest monthly gain in more than 10 years. Wage
increases had been anticipated for most of the year because of record low
unemployment. Until now, companies had been able to make up for increased wages
through improved productivity: when workers produce more, they can earn higher
wages without putting pressure on prices. Only time will tell if the monthly
increase is an aberration or a sign of things to come.
Inflation worries are expected to play a role in the bond market as well.
Investors are watching for any sign of rising prices that might steer the
Federal Reserve toward raising interest rates. Until the inflation picture
becomes clear, it is expected that the bond market will remain flat. On the
positive side, higher interest rates provide investors with opportunities to
lock in higher current yields, making bonds more attractive than they have been
in the recent past.
While some investors are becoming conservative as the new year approaches, those
who are investing for the long term should not be concerned. Trying to time the
market and anticipate its every up and down is not the way to get ahead. The
only certainty about financial markets is the uncertainty of their direction.
Staying in the market, diversifying by asset class, and giving your investments
the time to realize their growth potential is a better strategy for long-term
investors than trying to figure out which way the markets are going next.
Sincerely,
/s/ Bob Same
Bob Same
PRESIDENT
THE AAL MUTUAL FUNDS
October 29, 1999 3
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . EQUITY-ORIENTED FUNDS
<TABLE>
<CAPTION>
<S> <C>
A Share Ticker.......................... AASMX
B Share Ticker.......................... BBSMX
A Share Assets.......................... $127,118,139
B Share Assets.......................... $ 17,130,577
I Share Assets.......................... $ 835,602
A Share NAV............................. $ 11.13
B Share NAV............................. $ 10.92
I Share NAV............................. $ 11.25
Number of Securities in Portfolio....... 141
</TABLE>
[Photo Appears Here]
The AAL Small Cap Stock Fund
As market valuations continue to change, you've used the phrase "growth at a
right price." Is this a continuing model for buying stocks?
Because the market has become very much momentum oriented, the concept of
"growth at a right price" is logical. We have factored it into our screening of
stocks.
Growth at a right price is valid if the condition of the company's fundamentals
and those of the respective industry are in line. We won't buy inexpensively
priced stocks if the fundamentals of the company, or its industry, don't show
the potential for growth. In other words, we won't buy inexpensive stocks just
because they are inexpensive.
Are there particular industry sectors that have benefited more from the recent
bounce in small-cap stocks?
We've seen a big bounce, particularly in semiconductors and
semiconductor/capital equipment-related companies. On a historical basis, these
have been seen as cyclical stocks and now it looks as though their growth cycles
are larger than we've seen in the past.
We've also been encouraged by energy stocks, particularly those of drillers.
With the rise in gas and oil prices over the last several months, there has been
renewed interest in this sector.
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Initial Net Asset Value ($9,600)
[Mountain Chart Appears Here]
<TABLE>
<CAPTION>
S&P SmallCap The AAL Small Cap
600 Index (1) Stock Fund
<S> <C> <C>
Jul 1, 96 9,597 10,000
Dec 31, 96 11,008 10,909
Dec 31, 97 12,863 13,700
Dec 31, 98 12,543 13,519
Oct 29, 99 11,851 13,478
</TABLE>
(1) An unmanaged index comprised of 600 stocks designed to represent performance
of the small-cap segment of the U.S. equity markets. It is not possible to
invest directly in the index.
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year Inception Date
-------------------------------
<S> <C> <C> <C>
Class A (without sales charge).......... 8.23% 6.54% 7/1/96
Class A** (with sales charge)........... 3.91% 5.23% 7/1/96
- ------------------------------------------------------------------------
Class B (without CDSC).................. 7.17% 1.82% 1/8/97
Class B** (with CDSC)................... 3.17% 0.78% 1/8/97
- ------------------------------------------------------------------------
Class I***.............................. 9.27% (2.07)% 12/29/97
- ------------------------------------------------------------------------
SEC Standardized Returns as of 9/30/99
Class A** (with sales charge)........... 9.85% 5.54%
Class B** (with CDSC)................... 9.28% 1.05%
Class I***.............................. 15.40% (1.91)%
</TABLE>
*Past performance is not an indication of future results. Investment return and
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
**Class A performance reflects the maximum sales charge of 4%. Prior to 1/1/97,
this was 4.75%. Class B performance reflects the maximum contingent deferred
sales charge (CDSC) of 5%, declining 1% each year during the first five years
and then converting to Class A shares after the fifth year.
***Class I shares have no sales load and are for institutional shareholders
only.
4 The AAL Mutual Funds Semi-Annual Report
<PAGE>
Will Y2K impact small businesses more adversely than others? Does this factor
into your screening of prospective stocks?
We don't think it will impact businesses directly, but it will affect industries
based on perceptions. Two of these types of industries are software companies
and computer consultants.
Many companies are reluctant to invest money in new software with Y2K right
around the corner. And in the case of consultants, many companies have had these
consulting firms in to look at and remedy potential Y2K problems earlier in the
year. So we do think that Y2K will impact some businesses, although it's likely
to be more through perception than reality. We have incorporated this factor
into our stock-screening process.
/s/ Kevin A. Schmitting
- ------------------------
Kevin A. Schmitting
PORTFOLIO MANAGER
Fund Allocations
[PIE CHART APPEARS HERE]
% of Net Assets
10/29/99
Technology............ 24%
Consumer Cyclicals.... 14%
Financials............ 14%
Cash & Cash Equivalents 8%
Energy................ 8%
Capital Goods......... 7%
Consumer Staples...... 6%
Health Care........... 6%
Basic Materials....... 5%
Communication Services 3%
Utilities............. 3%
Transportation........ 2%
-----------
Total 100%
5 Largest Holdings
% of Net Assets
Security 10/29/99
- -------- ---------------
Daisytek International Corporation......... 1.9%
Radian Group, Inc. ........................ 1.9%
NOVA Corporation........................... 1.8%
Lamar Advertising Company.................. 1.6%
BEA Systems, Inc. ......................... 1.5%
October 29, 1999 5
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT ... EQUITY-ORIENTED FUNDS
. . . . A Share Ticker . . . AASCX . . . . B Share Ticker . . . BBSCX . . . .
A Share Assets . . . $618,916,138 . . . . B Share Assets . . . . . . . .
$19,592,064 . . . . I Share Assets . . . $8,247,693. . . . A Share NAV . . .
$14.76 . . . . B Share NAV. . . $14.41 . . . . I Share NAV. . . $14.86 . . . .
Number of Securities in Portfolio . . . 100 . . . . . . .
[PHOTO APPEARS HERE]
The AAL Mid Cap Stock Fund
As market uncertainty continues, why should investors include mid-cap stocks in
their portfolios?
Investors looking to diversify their portfolios would be wise to consider mid-
cap stocks. Mid-cap stocks have historically provided higher long-term returns
and also more risk when compared to large-cap stocks. Mid-cap stocks often offer
the opportunities to invest in companies that are developing new products,
expanding markets, have seasoned management teams and provide the liquidity that
many investors seek.
Valuations on mid-cap stocks are also very attractive as they trade near 20-year
lows relative to their larger counterparts. Investors with a longer time horizon
and a higher than average risk tolerance may find mid-cap stocks an excellent
diversification tool at extremely attractive prices.
How do you position the Fund to take advantage of opportunities in the
communication sector?
The Fund's exposure to the broadly defined communications sector presently
approaches 5 percent. This includes telephone, cellular and long-distance
companies as well as the providers of equipment and services to those companies.
This exposure is approximately 2 percent greater than the general mid-cap market
exposure, as measured by the S&P
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Initial Net Asset Value ($9,600)
[Mountain Chart Appears Here]
AAL MID CAP S&P MID CAP
STOCK FUND 400 INDEX/1/
- --------------------------------------------
JUN 30, 93 9,597 10,000
DEC 31, 93 10,422 10,776
DEC 30, 94 9,923 10,388
DEC 29, 95 14,338 13,601
DEC 31, 96 15,592 16,214
DEC 31, 97 18,404 21,441
DEC 31, 98 18,786 25,534
OCT 30, 99 19,863 26,273
/1/ An unmanaged index comprised of 400 stocks designed to represent performance
of the mid-cap segment of the U.S. equity markets. It is not possible to
invest directly in the index.
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year 5-Year Inception Date
----------------------------------------
<S> <C> <C> <C> <C>
Class A (without sales charge).......... 22.08% 14.87% 12.17% 6/30/93
Class A** (with sales charge)........... 17.23% 13.93% 11.44% 6/30/93
- ---------------------------------------------------------------------------------
Class B (without CDSC).................. 20.60% NA 7.62% 1/8/97
Class B** (with CDSC)................... 16.60% NA 6.68% 1/8/97
- ---------------------------------------------------------------------------------
Class I***.............................. 22.81% NA 6.55% 12/29/97
- ---------------------------------------------------------------------------------
SEC Standardized Returns as of 9/30/99
Class A** (with sales charge)........... 19.98% 14.05% 10.91%
Class B** (with CDSC)................... 19.31% NA 5.35%
Class I***.............................. 25.63% NA 4.50%
</TABLE>
* Past performance is not an indication of future results. Investment return
and principal value will fluctuate, and shares, when redeemed, may be worth
more or less than their original cost.
** Class A performance reflects the maximum sales charge of 4%. Prior to
1/1/97, this was 4.75%. Class B performance reflects the maximum contingent
deferred sales charge (CDSC) of 5%, declining 1% each year during the first
five years and then converting to Class A shares after the fifth year.
*** Class I shares have no sales load and are for institutional shareholders
only.
6 The AAL Mutual Funds Semi-Annual Report
<PAGE>
MidCap 400 Index.
However, it's substantially less than our most aggressive counterparts, who may
have positions of 10 percent or even 20 percent in the sector. We firmly
believe that in the long run, this moderately aggressive approach to sector
exposures will provide more consistent and competitive results.
Our bias within this sector is to buy the companies supplying the tools to key
competitors who supply communications services. To remain competitive,
companies are spending large sums to have the latest and greatest technology. In
our view, the real beneficiaries of this environment are the suppliers of
equipment and services. We have investments in companies such as Comverse
Technologies, the leading provider of voicemail systems; ADC Telecom, a major
supplier of broadband technology; and Xilinx, a maker of the computer chips that
make all these services possible.
What other sectors or industries do you like?
Two other sectors that we see as great opportunities right now are the energy
and broadcasting sectors.
Energy stocks were beaten down badly last year as oil prices fell to levels not
seen in years. As a result, drilling activity for new oil and gas wells all but
stopped. The Organization of Petroleum Exporting Countries (OPEC) cut back its
production and oil prices rose dramatically through much of the summer.
However, the real impact in the natural gas market has yet to be felt. Since a
new gas well has a six- to nine-month lead time and very few new wells were
started during the last nine months, the natural gas supply for this winter is
essentially fixed. This means that even an average winter will cause a notable
increase in natural gas prices and favorably impact many energy companies.
The mid-cap broadcasting companies are primarily niche cable channels such as
Univision, the Spanish language station; and USA Networks, who offers the USA
Channel and the SciFi Channel. The Fund has positions in both of these companies
because they attract specific population segments that advertisers are eager to
reach. With rising rates and growing audiences, we feel these broadcasters
provide significant opportunity.
/s/ Michael R. Hochholzer
Michael R. Hochholzer
PORTFOLIO MANAGER
Fund Allocations
[Pie Chart Appears Here]
<TABLE>
<CAPTION>
% of Net Assets
10/29/99
---------------
<S> <C>
Technology.......................... 24%
Financials.......................... 15%
Consumer Cyclicals.................. 13%
Cash & Cash Equivalents............. 7%
Health Care......................... 7%
Utilities........................... 7%
Energy.............................. 6%
Basic Materials..................... 5%
Capital Goods....................... 4%
Consumer Staples.................... 4%
Communication Services.............. 3%
Fixed Income Investments............ 2%
Transportation...................... 2%
Preferred Stocks.................... 1%
---------------
Total 100%
</TABLE>
5 Largest Holdings
<TABLE>
<CAPTION>
% of Net Assets
Security 10/29/99
- -------- ---------------
<S> <C>
Royal Caribbean Cruises, Ltd.........2.1%
Concord EFS, Inc.....................2.0%
Xilinix, Inc.........................1.8%
Legato Systems, Inc..................1.7%
Southdown, Inc.......................1.6%
</TABLE>
October 29, 1999 7
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . EQUITY-ORIENTED FUNDS
<TABLE>
<CAPTION>
<S> <C>
A Share Ticker......................... AAITX
B Share Ticker......................... BBITX
A Share Assets......................... $167,824,569
B Share Assets......................... $ 11,275,645
I Share Assets......................... $ 2,214,494
A Share NAV............................ $ 12.56
B Share NAV............................ $ 12.35
I Share NAV............................ $ 12.63
Number of Securities in Portfolio...... 68
</TABLE>
[Photos Appear Here]
The AAL International Fund
Has your outlook on emerging markets changed in the past six months and are
there appropriate opportunities to invest in them?
Tighter liquidity conditions are generally bad for emerging markets. Countries
running fiscal or current account deficits that have to be funded in the global
capital markets are vulnerable to diminishing capital flows. The falling money
supply growth in the U.S. has weakened some emerging markets.
We remain cautious about emerging markets and prefer to wait for compelling
stock ideas before raising our exposure.
As seemingly more glowing reports come from Japan, how would you assess the
comeback of its markets and the economy in general?
Latest growth figures from Japan continue to exceed expectations. After a strong
first three months of this year, market participants predicted a fall in Gross
Domestic Product (GDP) for the second quarter. In fact, GDP rose an additional
0.2 percent, with much of the growth from private consumption.
With the Nikkei Index up about 30 percent this year already, the likelihood for
future gains hinges on further positive economic data, stabilizing the financial
sector and efforts at corporate restructuring.
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Initial Net Asset Value ($9,600)
[Mountain Chart Appears Here]
<TABLE>
<CAPTION>
The AAL
International Fund EAFE Index (1)
<S> <C> <C>
Aug 1, 95 9,597 10,000
Dec 29, 95 9,736 10,136
Dec 31, 96 10,924 10,581
Dec 31, 97 11,030 10,607
Dec 31, 98 12,250 12,540
Oct 29, 99 14,380 13,957
</TABLE>
(1) An unmanaged market capitalization-weighted equity index composed of a
sample of companies representative of the market structure in 20 countries.
Constituent stocks are selected on the basis of industry representation,
liquidity and sufficient float. It is not possible to invest directly in the
index.
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year Inception Date
-------------------------------
<S> <C> <C> <C>
Class A (without sales charge).......... 28.71% 9.99% 8/1/95
Class A** (with sales charge)........... 23.53% 8.93% 8/1/95
- -------------------------------------------------------------------------
Class B (without CDSC).................. 27.19% 9.09% 1/8/97
Class B** (with CDSC)................... 23.19% 8.17% 1/8/97
- -------------------------------------------------------------------------
Class I***.............................. 29.61% 14.23% 12/29/97
- -------------------------------------------------------------------------
SEC Standardized Returns as of 9/30/99
Class A** (with sales charge)........... 25.33% 8.16%
Class B** (with CDSC)................... 25.16% 6.98%
Class I***.............................. 31.53% 12.52%
</TABLE>
*Past performance is not an indication of future results. Investment return and
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
**Class A performance reflects the maximum sales charge of 4%. Prior to 1/1/97,
this was 4.75%. Class B performance reflects the maximum contingent deferred
sales charge (CDSC) of 5%, declining 1% each year during the first five years
and then converting to Class A shares after the fifth year.
***Class I shares have no sales load and are for institutional shareholders
only.
8 The AAL Mutual Funds Semi-Annual Report
<PAGE>
International investing involves additional risks including currency
fluctuations, economic and political instability, and accounting standards.
The competitiveness of the yen will impact the economy and the equity market as
well.
With some countries prospering and others struggling, how do you view the
European situation?
Improved sentiment surrounding European economic growth this year may not be
fully reflected in equity markets. Low interest rates and a competitive currency
have contributed to economic recovery. Business confidence is up, inflation
remains low and unemployment levels continue to improve.
France released strong second-quarter GDP figures and growth looks set to reach
2.0 percent to 2.5 percent this year. Meanwhile, the budget deficit is expected
to reach 2.3 percent of GDP and the government is introducing market
liberalization measures through deregulation and privatization.
Germany's strong industrial output figures for July indicate that the country
can look forward to stronger growth. And despite embarrassing local election
losses, Chancellor Gerhard Schroeder is determined to modernize the German
economy. By cutting pensions, lowering taxes, trimming budgets and updating
trade laws, Schroeder hopes employment and confidence will rebound in time to
keep his coalition in power.
While bond markets have already discounted interest rate increases, European
equity markets have not fully reflected the economic recovery.
/s/ Kathleen M. Harris
Kathleen M. Harris
PORTFOLIO MANAGER
/s/ Sean Roche
L. Sean Roche
PORTFOLIO MANAGER
Distribution of Fund Holdings
<TABLE>
<CAPTION>
% of Net Assets
Country 10/29/99
- ------- --------
<S> <C>
Continental Europe.................... 42%
Japan................................. 29%
United Kingdom........................ 16%
North America......................... 7%
Pacific Basic (excluding Japan)....... 5%
Emerging Markets...................... 1%
-----------
Total 100%
</TABLE>
5 Largest Holdings
<TABLE>
<CAPTION>
% of Net Assets
Security Country 10/29/99
- -------- ------- --------
<S> <C> <C>
NTT Mobile Communications Networks, Inc....Japan.................. 6.2%
Vodafone AirTouch plc......................United Kingdom......... 3.5%
Royal Kpn NV...............................Netherlands............ 3.4%
Fuji Bank, Ltd.............................Japan.................. 3.3%
Mannesmann AG..............................Germany................ 3.2%
</TABLE>
October 29, 1999 9
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . EQUITY-ORIENTED FUNDS
A Share Ticker..AALGX..B Share Ticker..BBLGX..A Share Assets..$3,838,968,851..
B Share Assets..$126,057,015. I Share Assets..$58,968,054..A Share NAV..$37.26
..B Share NAV..$36.49 I Share NAV..$37.30..Number of Securities in
Portfolio..94
[PHOTO APPEARS HERE]
The AAL Capital Growth Fund
Are cable and communications-related stocks still one of the larger growth areas
for the Fund?
Yes, cable and communications are still a major part of the Fund. The main
growth areas in the economy haven't changed. One is technology and another is
cable and communications, although it could be broadly classified as technology.
Health care and finances are other sectors that represent growth potential.
In order to be an economic engine of growth, a business or industry sector has
to be new and innovative or have a means of increasing productivity. With some
of the cable and communications advances, these certainly qualify as new ideas.
Computers and other technological advances are increasing productivity so they
would fall into the latter category.
Earlier this year, the value versus growth issue was back on the table. What's
your take on this issue and where's the Fund positioned?
It's been a very volatile year and there has been a big disparity between value
and growth at times. We are a capital appreciation or growth fund, and growth
has surpassed value in the latter portion of the year.
Because of the crosscurrents between value and growth, there's no real way to
position the Fund
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Initial Net Asset Value ($9,600)
[Mountain Chart Appears Here]
AAL CAPITAL S&P 500(R)
GROWTH FUND INDEX/1/
- -------------------------------------------
OCT 31 89 9,602 10,000
DEC 31 89 10,086 10,448
DEC 31 90 10,107 10,124
DEC 31 91 13,240 13,202
DEC 31 92 13,996 14,206
DEC 31 93 14,844 15,632
DEC 30 94 14,639 15,838
DEC 29 95 19,177 21,782
DEC 31 96 23,406 26,780
DEC 31 97 31,263 35,712
DEC 31 98 40,076 45,419
OCT 29 99 45,644 51,443
/1/ An unmanaged index comprised of 500 common stocks representative of the
stock market as a whole. It is not possible to invest directly in the index.
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year 5-Year 10-Year Inception Date
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A (without sales charge).......... 28.77% 25.22% 16.87% 14.64% 7/16/87
Class A** (with sales charge)........... 23.61% 24.20% 16.40% 14.25% 7/16/87
- --------------------------------------------------------------------------------------------
Class B (without CDSC).................. 27.48% NA NA 25.12% 1/8/97
Class B** (with CDSC)................... 23.48% NA NA 24.41% 1/8/97
- --------------------------------------------------------------------------------------------
Class I***.............................. 29.18% NA NA 24.75% 12/29/97
- --------------------------------------------------------------------------------------------
SEC Standardized Returns as of 9/30/99
Class A** (with sales charge)........... 24.75% 23.16% 15.55% 13.74%
Class B** (with CDSC)................... 24.62% NA NA 22.17%
Class I***.............................. 30.43% NA NA 21.32%
</TABLE>
* Past performance is not an indication of future results. Investment return
and principal value will fluctuate, and shares, when redeemed, may be worth
more or less than their original cost.
** Class A performance reflects the maximum sales charge of 4%. Prior to
1/1/97, this was 4.75%. Class B performance reflects the maximum contingent
deferred sales charge (CDSC) of 5%, declining 1% each year during the first
five years and then converting to Class A shares after the fifth year.
*** Class I shares have no sales load and are for institutional shareholders
only.
10 The AAL Mutual Funds Semi-Annual Report
<PAGE>
to take advantage of these shifts. Because of our orientation, it makes sense to
stay true to our investment style of favoring large-cap growth stocks.
Energy prices have risen dramatically in the past year or so. Does this provide
opportunities for the Fund?
We're taking a position in natural gas. Energy's not really a growth area, but
it represents 6 percent of the S&P 500(R) and we like to be at least market
weighted, compared to the index. In terms of energy stocks, we own more gas than
oil stocks. Because of the improved business practices through mergers of some
of the industry's major players, there are opportunities in the sector.
/s/ Frederick L. Plautz
- -----------------------
Frederick L. Plautz
PORTFOLIO MANAGER
Fund Allocations
[Pie Chart Appears Here]
% of Net Assets
10/29/99
---------------
Consumer Staples.......... 22%
Technology................ 18%
Financials................ 16%
Health Care................ 9%
Cash & Cash Equivalents.... 7%
Communication Services..... 7%
Consumer Cyclicals......... 7%
Energy..................... 7%
Capital Goods............... 6%
Utilities................... 1%
-----------
Total 100%
5 Largest Holdings
% of Net Assets
Security 10/29/99
- --------- --------
General Electric Company........... 3.8%
Microsoft Corporation.............. 3.6%
Cox Communications, Inc., Class A.. 3.4%
American International Group, Inc.. 3.3%
Comcast Corporation................ 3.1%
October 29, 1999 11
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . EQUITY-ORIENTED FUNDS
<TABLE>
<CAPTION>
<S> <C>
A Share Ticker......................... AAUTX
B Share Ticker......................... BBEIX
A Share Assets.........................$271,371,627
B Share Assets.........................$ 10,732,699
I Share Assets.........................$ 13,575,767
A Share NAV............................$ 14.06
B Share NAV............................$ 14.04
I Share NAV............................$ 14.08
Number of Securities in Portfolio...... 109
</TABLE>
[Photo Appears Here]
The AAL Equity Income Fund
As stock dividends generally continue to decline, does it make stock selection
tougher for the Fund?
We'd say yes and no. It's becoming harder and harder to find stocks with
attractive dividends. The stocks that tend to have attractive yields are those
which have slumped.
Our stock selection is not driven by the ability to yield a dividend. We look
for stocks with strong fundamentals at an attractive price. If they happen to
offer an attractive dividend, that's a nice feature. People should remember
there are two criteria in total return: One part is income and the other is
price, or capital appreciation. If people desire more income from their mutual
fund investment, they may be better suited in some type of fixed-income fund.
As many equity income funds shift their focus more toward total return and
perhaps away from the income objective, where does your Fund fit into that?
We fit into that theme very well. With the bull market of the last several
years, people are accustomed to seeing capital appreciation as part of the total
return--even in equity income funds.
As part of the discussion on where we fit into the equity income spectrum, it's
important to
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Initial Net Asset Value ($9,600)
[Mountain Chart Appears Here]
<TABLE>
<CAPTION>
The AAL Equity S&P 500/R/
Income Fund Index (1)
<S> <C> <C>
Mar 18, 94 9,597 10,000
Dec 30, 94 8,912 9,972
Dec 29, 95 11,511 13,716
Dec 31, 96 12,065 16,862
Dec 31, 97 14,764 22,487
Dec 31, 98 16,726 28,913
Oct 30, 99 17,091 32,392
</TABLE>
(1) An unmanaged index composed of 500 common stocks representative of the stock
market as a whole. It is not possible to invest directly in the index.
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year 5-Year Inception Date
---------------------------------------
<S> <C> <C> <C> <C>
Class A (without sales charge).......... 10.65% 13.13% 10.82% 3/18/94
Class A** (with sales charge)........... 6.20% 12.22% 10.01% 3/18/94
- ---------------------------------------------------------------------------------
Class B (without CDSC).................. 9.50% NA 12.23% 1/8/97
Class B** (with CDSC)................... 5.50% NA 11.36% 1/8/97
- ---------------------------------------------------------------------------------
Class I***.............................. 11.20% NA 9.23% 12/29/97
- ---------------------------------------------------------------------------------
SEC Standardized Returns as of 9/30/99
Class A** (with sales charge)........... 10.00% 11.86% 9.64%
Class B** (with CDSC)................... 9.35% NA 10.65%
Class I***.............................. 15.03% NA 8.02%
</TABLE>
*Past performance is not an indication of future results. Investment return and
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
**Class A performance reflects the maximum sales charge of 4%. Prior to 1/1/97,
this was 4.75%. Class B performance reflects the maximum contingent deferred
sales charge (CDSC) of 5%, declining 1% each year during the first five years
and then converting to Class A shares after the fifth year.
***Class I shares have no sales load and are for institutional shareholders
only.
12 The AAL Mutual Funds Semi-Annual Report
<PAGE>
know we've only been an equity income fund for two years (Sept. 1, 1997-Sept. 1,
1999). In those two years, the Fund's performance has placed us in the top 20
percent of all equity income funds, according to Lipper Inc.
Since you've only been an equity income fund for two years, what do the three-
and five-year return figures show in terms of where the Fund is at today?
The three- and five-year numbers are not indicative of the Fund's true
performance, relative to its equity income fund peers. They reflect some of the
performance prior to September 1, 1997, when it was known as The AAL Utilities
Fund. Because the mid-1990s were difficult periods for the utilities industry
due to deregulation and other issues, the Fund's returns were lower than they
may have been if we had been an equity income fund.
While the Fund primarily invests in large-cap stocks, you're also involved in
mid-cap stocks. Can you tell us what potential this offers shareholders?
This is one of the few AAL Mutual Funds that has no constraints on market
capitalization. If we find an attractive stock and it's a smaller company, we'll
buy it. If it is a small- or mid-cap stock, we place a premium on liquidity; we
like to be able to get in and out of these stocks in one day.
There is more value in the smaller-cap stocks and we have increased the number
of these names we own, but liquidity is a key factor. We don't have a target
figure, but the Fund currently holds about 30 percent in mid- and small-cap
stocks.
/s/ Lewis A. Bohannon
Lewis A. Bohannon
PORTFOLIO MANAGER
Fund Allocations
[Pie Chart Appears Here]
<TABLE>
<CAPTION>
% of Net Assets
10/29/99
--------
<S> <C>
Communication Services................15%
Energy................................13%
Financials............................12%
Capital Goods......................... 9%
Consumer Cyclicals.................... 9%
Health Care........................... 8%
Consumer Staples...................... 7%
Utilities............................. 7%
Basic Materials....................... 6%
Technology............................ 5%
Cash &Cash Equivalents................ 3%
Fixed Income Investments.............. 2%
Preferred Stocks...................... 2%
Transportation........................ 2%
-----------
Total 100%
</TABLE>
5 Largest Holdings
<TABLE>
<CAPTION>
% of Net Assets
Security 10/29/99
- -------- --------
<S> <C>
MCI WorldCom, Inc...............................3.0%
SBC Communications, Inc.........................2.8%
CVS Corporation.................................2.2%
Vodafone AirTouch plc ADR.......................2.2%
MediaOne Group, Inc. Convertible Securities.....2.1%
</TABLE>
October 29, 1999 13
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . EQUITY-ORIENTED FUNDS
..A Share Ticker..AABFX..B Share Ticker..BBBFX..A Share Assets..$219,512,291
..B Share Assets..$15,557,209..I Share Assets..$3,372,572..A Share NAV..$12.20
..B Share NAV..$12.15..I Share NAV..$12.19..Number of Securities in Portfolio
..151. . . . . . . .
[PHOTOS APPEARS HERE]
The AAL Balanced Fund
Have the asset allocation percentages remained fairly constant in the past six
months?
They have bounced around. More often than not, we've been toward the bottom of
the equity range--which, by the terms of the prospectus is 50 percent to 60
percent. We've taken advantage of the interest-rate levels to get some
performance from the bonds and money market instruments.
What benefit do shareholders get by investing in the Balanced Fund versus doing
their own asset allocation, using the Capital Growth and Bond Funds?
They get our management expertise and we've got "wiggle" room. We can do
tactical asset allocation. We can lean one way and then the other, as long as we
do it judiciously. If you used the Capital Growth Fund and the Bond Fund as a
way to comprise your asset allocation picture, you're locked into your original
percentages--unless you plan to readjust those allocations from time to time.
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Initial Net Asset Value ($9,600)
[PIE CHART APPEARS HERE]
THE AAL LEHMAN BROTHERS
BALANCED AGGREGATE S&P 500(R)
FUND BOND INDEX/2/ INDEX/1/
-------------------------------------------------------
DEC 29, 97 10,000 9,597 10,000
DEC 31, 97 10,000 9,597 10,000
DEC 31, 98 10,867 11,328 12,858
OCT 29, 99 10,830 12,094 14,405
/1/ An unmanaged index comprised of 500 common stocks representative of the
stock market as a whole. It is not possible to invest directly in the
index.
/2/ An unmanaged index that encompasses four major classes of fixed-income
securities in the U.S.: U.S. Treasury and U.S. government agency
securities, corporate debt obligations, mortgage-backed securities and
asset-backed securities.
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year Inception Date
------------------------------
<S> <C> <C> <C>
Class A (without sales charge).......... 14.33% 13.45% 12/29/97
Class A** (with sales charge)........... 9.79% 10.93% 12/29/97
- ------------------------------------------------------------------------
Class B (without CDSC).................. 13.23% 12.47% 12/29/97
Class B** (with CDSC)................... 9.23% 10.47% 12/29/97
- ------------------------------------------------------------------------
Class I***.............................. 14.86% 13.67% 12/29/97
- ------------------------------------------------------------------------
SEC Standardized Returns as of 9/30/99
Class A** (with sales charge)........... 9.99% 9.19%
Class B** (with CDSC)................... 9.70% 8.75%
Class I***.............................. 15.15% 12.02%
</TABLE>
* Past performance is not an indication of future results. Investment return
and principal value will fluctuate, and shares, when redeemed, may be worth
more or less than their original cost.
** Class A performance reflects the maximum sales charge of 4%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of
5%, declining 1% each year for the first five years and then converting to
Class A shares after the fifth year.
*** Class I shares have no sales load and are for institutional shareholders
only.
14 THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT
<PAGE>
How have interest-rate moves impacted your allocations?
When interest rates go up, as they have in recent months, the percentage in
equities goes down. As a result, we have increased our allocation in bonds
recently. The strategy is fairly simple, but the question always remains: How
quickly can we get out of money market instruments and into bonds?
/s/ Frederick L. Plautz
- -----------------------
Frederick L. Plautz
PORTFOLIO MANAGER
/s/ Al Onstad
- -------------
Al Onstad
PORTFOLIO MANAGER
Asset Mix
Stocks.................. 50%
Bonds................... 35%
Cash & Cash Equivalents. 15%
-----------
Total 100%
Fund Allocations
[PIE CHART APPEARS HERE]
% of Net Assets
10/29/99
--------
Fixed Income Investments...... 35%
Cash & Cash Equivalents....... 15%
Consumer Staples.............. 12%
Technology.................... 10%
Financials.................... 9%
Health Care................... 5%
Consumer Cyclicals............ 4%
Energy........................ 4%
Capital Goods................. 3%
Communication Services........ 3%
-----------
Total 100%
5 Largest Bond Holdings
% of Net Assets
Security 10/29/99
--------
U.S.Treasury Bond........................... 3.6%
Coupon Rate: 7.250%
Maturity Date: 5/15/2016
Government National Mortgage Association.... 1.6%
Coupon Rate: 6.500%
Maturity Date: 3/15/2029
Federal National Mortgage Association....... 1.5%
Coupon Rate: 6.500%
Maturity Date: 6/1/2013
Government National Mortgage Association.... 1.5%
Coupon Rate: 7.500%
Maturity Date: 10/15/2013
Government National Mortgage Association.... 1.5%
Coupon Rate: 7.500%
Maturity Date: 8/15/2029
5 Largest Common Stock Holdings
% of Net Assets
Security 10/29/99
--------
General Electric Company............ 2.1%
Microsoft Corporation............... 1.9%
American International Group, Inc... 1.8%
Cox Communications, Inc. Class A.... 1.8%
Comcast Corporation................. 1.7%
October 29, 1999 15
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . INCOME-ORIENTED FUNDS
<TABLE>
<CAPTION>
<S> <C>
A Share Ticker AAHYX
B Share Ticker BBHYX
A Share Assets $130,839,928
B Share Assets $ 11,630,608
I Share Assets $ 2,279,417
A Share NAV $ 7.83
B Share NAV $ 7.83
I Share NAV $ 7.82
Number of Securities in Portfolio 126
</TABLE>
[Photo Appears Here]
The AAL High Yield Bond Fund
With an improving world economy, as compared to this time a year ago, has the
outlook for high-yield bonds improved?
The answer is yes and no. A healthy economy is good for businesses with debt,
because they can service that debt. On the other hand, there has been a
liquidity problem in the high-yield market--and in all riskier asset classes.
This means it's harder to sell bonds.
High-yield bonds also have been hit hard by earnings news. When an issuer's
stock gets bad news, it generally drops and that has been translating to their
bonds as well. While a healthier world economy has helped some sectors, a lack
of liquidity has dampened that fact. High-yield bonds generally are subject to
greater market fluctuations and risk of loss of income and principal than are
investments in lower-yielding fixed-income securities.
What's the current default rate for high-yield bonds and how does it compare to
historical rates?
The default rate has been increasing this year and as of early October, it was
around 5 percent. At this time last year, it was about 2 percent. Compare these
time frames to the early 1990s, when default rates on high-yield bonds were
between 8 percent and 10 percent. As far as the default rate goes, it's not as
high as it has been but it's higher than it has been in the past four or five
years.
The Fund hasn't been immune in this market environment, having incurred five
defaults to date. They've been more concentrated, primarily in energy when oil
dropped to $11 a barrel earlier this year. Even though the price has come back
into the low-20s per barrel, a lot of oil companies still haven't made a
recovery. Another sector for defaults is the textile industry. Because of the
North American Free Trade Agreement (NAFTA), many textile firms are
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Initial Net Asset Value ($9,600)
[Mountain Chart Appears Here]
<TABLE>
<CAPTION>
Merrill Lynch The AAL
High Yield High Yield
Master Index (1) Bond Fund
<S> <C> <C>
Jan 8, 97 9,597 10,000
Dec 31, 97 10,867 11,317
Dec 31, 98 10,623 11,732
Oct 29, 99 9,959 11,720
</TABLE>
(1) An unmanaged index comprised of more than 900 "cash-pay" high-yield bonds
representative of the high-yield market as a whole. It is not possible to
invest directly in the index.
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year Inception Date
------------------------------
<S> <C> <C> <C>
Class A (without sales charge).......... (1.59)% 1.33% 1/8/97
Class A** (with sales charge)........... (5.53)% (0.15)% 1/8/97
- ------------------------------------------------------------------------
Class B (without CDSC).................. (2.25)% 0.62% 1/8/97
Class B** (with CDSC)................... (6.16)% (0.45)% 1/8/97
- ------------------------------------------------------------------------
Class I***.............................. (1.26)% (4.45)% 12/29/97
SEC Standardized Returns as of 9/30/99
Class A** (with sales charge)........... (5.40)% 0.73%
Class B** (with CDSC)................... (6.04)% 0.47%
Class I***.............................. (1.03)% (3.28)%
</TABLE>
*Past performance is not an indication of future results. Investment return and
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
**Class A performance reflects the maximum sales charge of 4%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of
5%, declining 1% each year during the first five years and then converting to
Class A shares after the fifth year.
***Class I shares have no sales load and are for institutional shareholders
only.
16 The AAL Mutual Funds Semi-Annual Report
<PAGE>
finding themselves at a competitive disadvantage because of higher labor costs
in the U.S. Because the textile industry is very labor intensive, many U.S.
companies struggle to compete with Mexican counterparts.
Why have you increased the percentage of BB-rated bonds in the Fund?
They are the highest quality of the "junk bonds" but they're also the most
interest-rate sensitive portion of the high-yield market. They have
underperformed recently, but they tend to do better in a slower-growth economy.
Our goal is to have 30 percent to 35 percent of the Fund in this class; we're
currently in the mid-20s.
Are there other steps you can take to further decrease the Fund's volatility?
We think that by reducing the number of holdings in the Fund, we can potentially
reduce risk. By devoting more time to the companies we own, we can avoid some of
the pitfalls that exist within an environment of rising default rates.
/s/ David G. Carrol
David G. Carroll
PORTFOLIO MANAGER
Credit Quality
[Pie Chart Appears Here]
<TABLE>
<CAPTION>
% of Net Assets
10/29/99
--------
<S> <C>
B..................................... 60%
BB.................................... 29%
CCC................................... 9%
D..................................... 2%
-----------
Total 100%
</TABLE>
Average Quality: B
Average Maturity: 7.6 years
5 Largest Holdings
<TABLE>
<CAPTION>
% of Net Assets
Security 10/29/99
- -------- --------
<S> <C>
CSC Holdings, Inc.......................... 2.3%
Coupon Rate: 7.875%
Maturity Date: 2/15/2018
Century Communications Corporation......... 1.7%
Coupon Rate: 8.750%
Maturity Date: 10/1/2007
Call-Net Enterprises, Inc.................. 1.6%
Coupon Rate: 9.375%
Maturity Date: 5/15/2009
Charter Communications Holdings, LLC....... 1.6%
Coupon Rate: 8.625%
Maturity Date: 4/1/2009
CMS Energy Corporation..................... 1.6%
Coupon Rate: 7.500%
Maturity Date: 1/15/2009
</TABLE>
October 29, 1999 17
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . INCOME-ORIENTED FUNDS
. . . A Share Ticker . . .. . . AAMBX . . . . . . . . . . .B Share Ticker . .
.. . . NA . . . . . . . . . . .A Share Assets . . . . .. $486,363,840 . . . .
. . . .. . .B Share Assets . . . $7,676,927 . . . . I Share Assets . . .
$1,431,399 . . . . A Share NAV . . . $10.48 . . . . B Share NAV . . . $10.47 .
. . .I Share NAV . . . $10.47 . . . .Number of Securities in Portfolio . . . 209
. . .
The AAL Municipal Bond Fund
What have interest-rate moves done to the municipal bond market and the Fund?
For a time, the rising rates made other bonds, particularly corporate bonds,
more attractive than municipal bonds. Traditionally, municipal bonds have traded
in the same range as Treasuries but for the last few months, we delinked from
that market. As a result, we've underperformed corporates and Treasuries
recently.
On the municipal market side, there hasn't been a supply problem but a demand
problem. The spreads on corporate bonds widened significantly, making them more
attractive. There has been a record issuance of corporate bonds in light of this
fact and investors have been quick to buy them. We think the environment for
municipal bonds will improve, as the supply of corporate bonds slows down.
If the U.S. economy slows, will this dramatically affect the supply and
liquidity of municipal bonds?
If a slowing occurs, we can expect good things from the municipal market. Bond
markets like a slowing economy, as interest rates will ease. We wouldn't expect
an abundance of supply, since most state, local and regional entities are flush
in light of the flourishing economy in recent years; as a result, the demand for
municipal bonds may increase.
Also, if the economy slows, people may get nervous about equities and see that
municipal bonds are relatively inexpensive. This would lead to improved
liquidity within the municipal market.
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Initial Net Asset Value ($9,600)
[Mountain Chart Appears Here]
The AAL Municipal Lehman Brothers
Bond Fund Municipal Bond Index/1/
----------------- -----------------------
Oct 31, 89 9,602 10,000
Dec 31, 90 10,410 11,006
Dec 31, 91 11,591 12,343
Dec 31, 92 12,556 13,431
Dec 31, 93 13,973 15,080
Dec 30, 94 13,178 14,300
Dec 29, 95 15,582 16,797
Dec 31, 96 16,266 17,543
Dec 31, 97 17,947 19,153
Dec 31, 98 19,021 20,395
Oct 29, 99 17,947 19,913
/1/ An unmanaged broad-based index that provides a performance indicator of the
overall municipal bond market. It is not possible to invest directly in the
index.
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year 5-Year 10-Year Inception Date
---------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A (without sales charge).......... (5.12)% 6.50% 6.45% 6.26% 7/16/87
Class A** (with sales charge)........... (8.92)% 5.62% 6.02% 5.90% 7/16/87
- ----------------------------------------------------------------------------------------------
Class B (without CDSC).................. (5.98)% NA NA 2.92% 1/8/97
Class B** (with CDSC)................... (9.74)% NA NA 1.89% 1/8/97
- ----------------------------------------------------------------------------------------------
Class I***.............................. (4.91)% NA NA 0.23% 12/29/97
- ----------------------------------------------------------------------------------------------
SEC Standardized Returns as of 9/30/99
Class A** (with sales charge)........... (7.69)% 5.71% 6.36% 6.11%
Class B** (with CDSC)................... (8.40)% NA NA 2.77%
Class I***.............................. (3.58)% NA NA 1.40%
</TABLE>
*Past performance is not an indication of future results. Investment return and
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
**Class A performance reflects the maximum sales charge of 4%. Prior to 1/1/97,
this was 4.75%. Class B performance reflects the maximum contingent deferred
sales charge (CDSC) of 5%, declining 1% each year during the first five years
and then converting to Class A shares after the fifth year.
***Class I shares have no sales load and are for institutional shareholders
only.
18 The AAL Mutual Funds Semi-Annual Report
<PAGE>
Do you favor general obligation bonds or revenue bonds?
Before we discuss what I like, it's a good idea to differentiate between these
types of municipal bonds. A municipality's taxing ability backs general-
obligation bonds (GOs). Revenue bonds are debts whose obligations are paid from
anticipated revenues from a project.
If you look at our Fund, it's generally weighted toward revenue bonds. There's a
few reasons why we like revenue bonds: (1) they typically offer higher yields
than GOs; (2) you can track the performance of specific income stream, such as
municipally owned utilities or sales tax bonds, more readily; and (3) if you
thoroughly research an issuer and the revenue stream is improving, so should the
bond's credit rating.
Many GOs don't have the desired yield and there's also some political risk
involved with them. Because the bonds are backed by the municipality's or
state's ability to collect taxes, there are concerns beyond the ability to pay,
such as the willingness to pay. Consider the case of Orange County, California,
where it always had the ability to repay its debt. However, it wasn't until
officials were forced to pay that they in fact did repay all of the obligations.
/s/ Duane A. McAllister
Duane A. McAllister
PORTFOLIO MANAGER
Credit Quality
[PIE CHART APPEARS HERE]
% of Net Assets
10/29/99
AAA............. 59%
AA.............. 15%
A............... 14%
BBB............. 12%
----------------
Total 100%
Average Quality: AA
Average Maturity: 19.5 years
5 Largest Holdings
% of Net Assets
Security 10/29/99
- -------- --------
Metropolitan Pier and Exposition Authority
Illinois Hospitality Facilities Revenue Bonds...... 2.4%
Coupon Rate: 7.000% Maturity Date: 7/1/2026
Washington State Public Power Supply
System Revenue Refunding Bonds..................... 2.1%
Coupon Rate: 6.000% Maturity Date: 7/1/2007
Montana State University Revenue Bonds............. 2.0%
Coupon Rate: 5.750% Maturity Date: 5/15/2024
Foothill/Eastern Transportation California
Toll Road Revenue Bonds............................ 1.6%
Coupon Rate: 5.000% Maturity Date: 1/1/2035
Shelby County, Tennessee Health Education
and Housing Facilities Board Revenue Bonds......... 1.6%
Coupon Rate: 5.375% Maturity Date: 7/1/2029
5 Largest Fund Allocations
% of Net Assets
State 10/29/99
- ----- --------
Illinois...............14.2%
California.............11.9%
Texas..................11.8%
New York............... 8.1%
Washington............. 5.9%
October 29, 1999 19
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . INCOME-ORIENTED FUNDS
A Share Ticker . . . AAINX . . . . . . . B Share Ticker . . . NA . . . . . . . A
Share Assets . . . . .$351,616,384 . . . . . . . .B Share . Assets . . .
$3,558,551. . . . . . . I Share Assets . . . $48,537,783 . . . . . A Share NAV
. . $9.54 . . . . B Share NAV . . . $9.54 . . . . I Share NAV . . . $9.54
. . . . .Number of Securities in Portfolio . . . 62
[PHOTO APPEARS HERE]
The AAL Bond Fund
What changes has the Fund undergone since you became portfolio manager in mid-
July?
The primary change has been in diversification. A number of larger holdings
were sold and reinvested in a wide variety of new issues. The Fund's holdings in
foreign credits were substantially reduced as well, replaced by domestic
issuers. The bulk of the purchases were in the six- to 10-year maturity range.
The Fund's cash holdings were reduced to take advantage of higher yields and
wider spreads that became available during the quarter.
What sort of weighting does the Fund have in corporate, mortgage-backed, asset-
backed, Treasury bonds and cash?
The Fund has 57 percent in corporate bonds, 19 percent in mortgage-backed bonds,
11 percent in Treasuries, 8 percent in asset-backed bonds and 5 percent in cash.
As attractive investment issues present themselves, the cash position will be
drawn down to take advantage of these opportunities. The allocation to the
various asset classes is not static. It is reviewed on a regular basis to take
advantage of price changes across sectors. We'll sell those that have
appreciated and buy those bonds that have appreciation potential.
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Initial Net Asset Value ($9,600)
[Mountain Chart Appears Here]
Lehman Brothers
The AAL Bond Fund Aggregate Bond Index/1/
----------------- -----------------------
Oct 31, 1989 9,603 10,000
Dec 31, 1990 10,545 11,028
Dec 31, 1991 12,204 12,792
Dec 31, 1992 13,022 13,739
Dec 31, 1993 14,168 15,079
Dec 30, 1994 13,496 14,639
Dec 29, 1995 15,663 17,344
Dec 31, 1996 16,017 17,971
Dec 31, 1997 17,455 19,711
Dec 31, 1998 18,612 21,421
Oct 29, 1999 18,349 21,347
/1/ An unmanaged index that encompasses four major classes of fixed-income
securities in the U.S.: U.S. Treasury and U.S. government agency securities,
corporate debt obligations, mortgage-backed securities and asset-backed
securities. It is not possible to invest directly in the index.
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year 5-Year 10-Year Inception Date
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A (without sales charge).......... (1.29)% 6.32% 6.69% 6.83% 7/16/87
Class A** (with sales charge)........... (5.28)% 5.45% 6.26% 6.48% 7/16/87
- -------------------------------------------------------------------------------------------
Class B (without CDSC).................. (2.23)% NA NA 4.14% 1/8/97
Class B** (with CDSC)................... (6.14)% NA NA 3.14% 1/8/97
- -------------------------------------------------------------------------------------------
Class I***.............................. (0.90)% NA NA 3.17% 12/29/97
- -------------------------------------------------------------------------------------------
SEC Standardized Returns as of 9/30/99
Class A** (with sales charge)........... (6.17)% 5.38% 6.46% 6.51%
Class B** (with CDSC)................... (7.07)% NA NA 3.20%
Class I***.............................. (1.88)% NA NA 3.20%
</TABLE>
*Past performance is not an indication of future results. Investment return and
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
**Class A performance reflects the maximum sales charge of 4%. Prior to 1/1/97,
this was 4.75%. Class B performance reflects the maximum contingent deferred
sales charge (CDSC) of 5%, declining 1% each year during the first five years
and then converting to Class A shares after the fifth year.
***Class I shares have no sales load and are for institutional shareholders
only.
20 The AAL Mutual Funds Semi-Annual Report
<PAGE>
Can you tell us about the Fund's diversification?
The normal position size in the corporate and asset-backed portions is in the 1-
percent to 1.5-percent range of the Fund. This is done to reduce credit risk in
any one position while at the same time providing good industry representation.
This should position the Fund to "hit a lot of singles" as the portfolio is made
up of many positions that have an opportunity to perform.
/s/ Alan D. Onstad
Al Onstad
PORTFOLIO MANAGER
Credit Quality
[PIE CHART APPEARS HERE]
% of Net Assets
10/29/99
--------
AAA................34%
AA................. 6%
A..................19%
BBB................41%
--------------
Total 100%
Average Quality: A
Average Maturity: 7.3 years
5 Largest Holdings
% of Net Assets
Security 10/29/99
- -------- --------
U.S. Treasury Bonds...................... 5.3%
Coupon Rate: 7.250%
Maturity Date: 5/15/2016
Federal National Mortgage Association.... 4.4%
Coupon Rate: 5.500%
Maturity Date: 1/1/2014
Countrywide Home Loan Series 1997-6-A-3.. 3.8%
Coupon Rate: 6.750%
Maturity Date: 11/25/2027
Federal National Mortgage Association.... 3.4%
Coupon Rate: 6.500%
Maturity Date: 6/1/2013
Mercantile Bancorporation, Inc. ......... 3.0%
Coupon Rate: 7.625%
Maturity Date: 10/15/2002
October 29, 1999 21
<PAGE>
THE AAL MUTUAL FUNDS SEMI-ANNUAL REPORT . . . INCOME-ORIENTED FUNDS
. A Share Ticker . . AMMXX . . . . . . B Share Ticker . . . NA . . . . . . A
Share Assets . . . . .$319,585,342 . . . . . . B Share Assets. . . $2,165,709
. . . . . . I Share Assets. . . $18,567,214 . . . . . . A Share NAV . . . $1.00
. . . . . . B Share NAV . . . $1.00 . . . . . . I Share NAV . . . $1.00 . . . .
. . Number of Securities in Portfolio . . . 131 . . . . . . . .
[PHOTO APPEARS HERE]
The AAL Money Market Fund
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corp. (FDIC) 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.
The weighted average maturity seems to be increasing. Why is this?
It has increased since the first part of the year, although it's been
decreasing since the beginning of June. What we've tried to do is to stay close
to the Donoghue Weighted Average Maturity (WAM). We're generally within a few
days of that average all the time.
As shareholders continue to put money in the Fund, does this create problems in
terms of investing it for an attractive yield?
The Fund has grown at a little more than $1 million a week so far this year and
there haven't been any problems managing this flow of funds. We're looking for
commercial paper with a maturity window of 90 to 150 days and there have been a
sufficient number of attractively priced opportunities for the Fund.
However, the thought of the Y2K situation has created a period in December of
this year and January of 2000 when companies or banks have decided not to issue
commercial paper. For about a month in time, from about mid-December to mid-
January, almost nothing's coming due.
We plan to maintain liquidity because certain issuers--GE Capital, Ford Motor
and
Average Annual Total Returns*
October 29, 1999
<TABLE>
<CAPTION>
From Inception
1-Year 5-Year 10-Year Inception Date
-------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A (without sales charge).......... 4.46% 4.91% 4.59% 5.09% 3/10/88
- -------------------------------------------------------------------------------------------
Class B (without CDSC).................. 3.39% NA NA 3.91% 1/8/97
Class B** (with CDSC)................... (0.61)% NA NA 2.90% 1/8/97
- -------------------------------------------------------------------------------------------
Class I***.............................. 4.82% NA NA 4.99% 12/29/97
- -------------------------------------------------------------------------------------------
SEC Standardized Returns as of 9/30/99
Class A** (without sales charge)........ 4.47% 4.89% 4.62% 5.09%
Class B** (with CDSC)................... (0.60)% NA NA 2.87%
Class I***.............................. 4.82% NA NA 4.97%
</TABLE>
*Past performance is not an indication of future results. Investment return and
principal value will fluctuate, and shares, when redeemed, may be worth more or
less than their original cost.
**Class B performance reflects the maximum contingent deferred sales charge
(CDSC) of 5%, declining 1% each year during the first five years and then
converting to Class A shares after the fifth year.
***Class I shares have no sales load and are for institutional shareholders
only.
22 The AAL Mutual Funds Semi-Annual Report
<PAGE>
International Business Machines, to name a few--would allow us to sell that
paper. We've spent a lot of time preparing for the end of the year.
How have the interest-rate moves affected the Fund?
The Fund's yield tends to move with what the Federal Reserve Board (the Fed) is
doing. In May, the Fund's yield was 4.1 percent. As the Fed shifted to a
tightening bias and made 0.25-percent interest rate increases in June and
August, the Fund's yield is in the neighborhood of 4.5 percent--or about where
it was at the beginning of the year.
/s/ Michael R. Hilt
Michael R. Hilt
PORTFOLIO MANAGER
5 Largest Holdings
% of Net Assets
Security 10/29/99
- -------- --------
Procter & Gamble Company...................4.44%
Coupon Rate: 5.250% - 5.900%
Maturity Date: 11/4/99 - 2/2/2000
Coca-Cola Company..........................4.43%
Coupon Rate: 5.110% - 5.780%
Maturity Date: 11/5/99 - 2/7/2000
Walt Disney Company........................4.37%
Coupon Rate: 4.780% - 5.880%
Maturity Date: 11/1/99 - 2/16/2000
IBM Credit Corporation.....................4.37%
Coupon Rate: 5.230% - 5.920%
Maturity Date: 11/23/99 - 2/15/2000
Lucent Technologies, Inc. .................4.36%
Coupon Rate: 4.910% - 5.800%
Maturity Date: 11/10/99 - 2/24/2000
Average Quality: First Tier
Average Maturity: 58 Days
Short-Term Investment Comparison
October 29, 1999
[BAR CHART APPEARS HERE]
The AAL Money Market Fund 30-Day Yield (Class A shares)........4.79%
Salomon Brothers Short-Term Index*.............................4.44%
*Salomon Brothers Short-Term Index is an unmanaged index composed of 1-month
U.S. Treasury Bills
October 29, 1999 23
<PAGE>
The AAL Small Cap Stock Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective
--------------------
The Fund seeks long-term capital growth by investing primarily in a diversified
portfolio of common stocks, and securities convertible into common stocks of
small companies.
<TABLE>
<CAPTION>
Shares Common Stocks (91.8%) Market Value
=============================================================================================================
<S> <C> <C>
Basic Materials (5.1%)
- ---------------------
26,800 Cambrex Corporation.............................................................. $ 810,700
43,200 Casella Waste Systems, Inc.*..................................................... 580,500
27,800 Geon Company..................................................................... 729,750
37,000 Granite Construction, Inc........................................................ 765,438
54,000 Pope & Talbot, Inc............................................................... 783,000
30,000 Southdown, Inc................................................................... 1,449,375
21,500 Texas Industries, Inc............................................................ 769,969
128,400 Titanium Metals Corporation...................................................... 770,400
60,600 U.S. Aggregates, Inc.*........................................................... 723,412
-----------------------------------------------------
Total Basic Materials 7,382,544
-----------------------------------------------------
Capital Goods (6.9%)
- -------------------
30,900 Applied Power, Inc............................................................... 898,031
25,400 Artesyn Technologies, Inc.*...................................................... 501,650
53,300 Benchmark Electronics, Inc.*..................................................... 852,800
23,700 Methode Electronics, Inc......................................................... 379,200
13,800 Oak Industries, Inc.*............................................................ 565,800
84,100 Pinnacle Holdings, Inc.*......................................................... 2,018,400
102,538 Tetra Tech, Inc.*................................................................ 1,627,783
26,800 Tower Automotive, Inc.*.......................................................... 437,175
25,350 Valassis Communications, Inc.*................................................... 1,090,050
69,275 Vishay Intertechnology, Inc.*.................................................... 1,692,908
----------------------------------------------------------
Total Capital Goods 10,063,797
----------------------------------------------------------
Communication Services (3.0%)
- ----------------------------
74,900 Digital Microwave Corporation*................................................... 1,114,138
16,100 Dycom Industries, Inc.*.......................................................... 524,256
15,100 Gilat Satellite Networks, Ltd.*.................................................. 787,088
30,200 True North Communications, Inc................................................... 1,217,437
14,400 Zebra Technologies Corporation*.................................................. 783,000
----------------------------------------------------------
Total Communication Services 4,425,919
----------------------------------------------------------
Consumer Cyclicals (14.4%)
- -------------------------
48,000 Acxiom Corporation*.............................................................. 792,000
16,000 Ames Department Stores, Inc.*.................................................... 507,000
10,100 AnnTaylor Stores Corporation*.................................................... 429,881
27,800 Applebee's International, Inc.................................................... 800,988
177,500 Bombay Company, Inc.*............................................................ 732,188
21,500 CEC Entertainment, Inc.*......................................................... 689,344
12,600 Catalina Marketing Corporation*.................................................. 1,179,675
21,900 Columbia Sportswear Company*..................................................... 443,475
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
24 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
The AAL Cap Stock Fund - continued Schedule of Investments As of October 29, 1999
Shares Common Stock (91.8%) Market Value
=============================================================================================================
<S> <C> <C>
Consumer Cyclicals (14.4%) - continued
- --------------------------------------
83,600 Dura Automotive Systems, Inc.*.............................................. $ 1,567,500
15,200 Ethan Allen Interiors, Inc.................................................. 540,550
26,000 Forrester Research, Inc.*................................................... 1,238,250
46,800 Furniture Brands International, Inc.*....................................... 906,750
22,300 Gentex Corporation*......................................................... 383,281
63,300 Getty Images, Inc.*......................................................... 1,950,431
41,900 Lamar Advertising Company*.................................................. 2,262,600
100,700 NOVA Corporation*........................................................... 2,618,200
24,700 O'Reilly Automotive, Inc.*.................................................. 1,077,538
65,000 Pier 1 Imports, Inc......................................................... 385,937
78,400 Ross Stores, Inc............................................................ 1,617,000
17,900 Zale Corporation*........................................................... 749,562
-----------------------------------------------------
Total Consumer Cyclicals 20,872,150
-----------------------------------------------------
Consumer Staples (5.7%)
- ----------------------
164,000 Daisytek International Corporation*......................................... 2,726,500
27,000 Emmis Communications Corporation*........................................... 1,947,375
87,000 Flowers Industries, Inc..................................................... 1,468,125
38,300 Jack in the Box, Inc.*...................................................... 921,594
48,200 Koala Corporation*.......................................................... 762,162
10,100 Linens 'n Things, Inc.*..................................................... 401,475
-----------------------------------------------------
Total Consumer Staples 8,227,231
-----------------------------------------------------
Energy (7.6%)
- ------------
24,700 Atmos Energy Corporation.................................................... 560,381
21,800 BJ Services Company*........................................................ 748,013
37,300 Cascade Natural Gas Corporation............................................. 676,063
31,500 Credence Systems Corporation*............................................... 1,437,188
61,200 Nabors Industries, Inc.*.................................................... 1,388,475
95,400 Precision Drilling Corporation*............................................. 2,212,087
99,700 Pride International, Inc.*.................................................. 1,370,875
105,500 UTI Energy Corporation*..................................................... 2,024,281
22,200 Washington Gas Light Company................................................ 603,562
------------------------------------- ----------------
Total Energy 11,020,925
------------------------------------- ----------------
Financials (14.0%)
- ------------------
54,800 Annuity and Life Re (Holdings), Ltd.............................................. 1,287,800
43,500 Associated Banc-Corp............................................................. 1,673,388
33,900 Bank United Corporation.......................................................... 1,322,100
18,600 Centura Banks, Inc............................................................... 979,988
25,300 Commercial Federal Corporation................................................... 496,513
26,900 Community First Bankshares, Inc.................................................. 511,939
52,700 Cullen/Frost Bankers, Inc........................................................ 1,521,713
30,000 F & M Bancorporation, Inc........................................................ 1,085,625
50,300 FirstMerit Corporation........................................................... 1,329,806
17,700 Hudson United Bancorp............................................................ 556,444
231,800 INSpire Insurance Solutions, Inc.*............................................... 1,477,725
12,600 Legg Mason, Inc.................................................................. 458,325
82,100 Peoples Heritage Financial Group, Inc............................................ 1,559,900
10,000 Profit Recovery Group International, Inc.*....................................... 411,875
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 25
<PAGE>
<TABLE>
<CAPTION>
The AAL Small Cap Stock Fund - continued SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Shares Common Stocks (91.8%) Market Value
=============================================================================================================
<S> <C> <C>
Financials (14.0%) - continued
- ------------------------------
51,000 Radian Group, Inc........................................................... $ 2,693,438
7,400 SEI Investments Company..................................................... 721,268
9,300 U.S. Trust Corporation...................................................... 754,462
60,100 Waddell & Reed Financial, Inc., Class A..................................... 1,442,400
-----------------------------------------------------
Total Financials 20,284,709
-----------------------------------------------------
Health Care (6.4%)
- ------------------
11,700 Alpharma, Inc............................................................... 411,694
13,500 Biomatrix, Inc.*............................................................ 306,281
23,600 COR Therapeutics, Inc.*..................................................... 476,425
16,600 Coulter Pharmaceutical, Inc.*............................................... 282,200
15,900 Express Scripts, Inc.*...................................................... 781,088
2,600 IDEC Pharmaceuticals Corporation*........................................... 302,088
33,800 Interim Services, Inc.*..................................................... 555,587
17,700 IDEXX Laboratories, Inc.*................................................... 267,712
17,800 Inhale Therapeutic Systems, Inc.*........................................... 490,612
79,300 Omnicare, Inc............................................................... 733,525
32,400 Orthodontic Centers of America, Inc.*....................................... 445,500
37,600 Patterson Dental Company*................................................... 1,694,350
19,500 Priority Healthcare Corporation, Class B*................................... 391,219
8,700 Protein Design Labs, Inc.*.................................................. 348,544
34,300 Renal Care Group, Inc.*..................................................... 638,837
34,000 Superior Consultant Holdings Corporation*................................... 361,250
9,400 Universal Health Services, Inc.*............................................ 276,125
17,400 Vertex Pharmaceuticals, Inc.*............................................... 498,075
-----------------------------------------------------
Total Health Care 9,261,112
-----------------------------------------------------
Technology (23.9%)
- ------------------
52,100 Advanced Fibre Communications, Inc.*........................................ 1,139,688
81,900 Amkor Technology, Inc.*..................................................... 1,653,356
12,700 Aware, Inc.*................................................................ 404,019
48,600 BEA Systems, Inc.*.......................................................... 2,217,375
10,200 BISYS Group, Inc.*.......................................................... 520,200
38,500 Burr-Brown Corporation*..................................................... 1,513,531
9,300 C-Cor.net Corporation*...................................................... 365,025
9,600 CTS Corporation............................................................. 543,000
31,200 CIBER, Inc.*................................................................ 508,950
20,200 CommScope, Inc.*............................................................ 805,475
43,200 Computer Network Technology Corporation*.................................... 693,900
44,500 Cypress Semiconductor Corporation*.......................................... 1,137,531
20,500 DSP Communications, Inc.*................................................... 721,344
13,300 Dallas Semiconductor Corporation............................................ 783,038
124,200 Deltek Systems, Inc.*....................................................... 1,443,825
12,200 Electro Scientific Industries, Inc.*........................................ 658,800
26,000 Etec Systems, Inc.*......................................................... 992,875
21,200 Graco, Inc.................................................................. 710,200
19,900 Hyperion Solutions Corporation*............................................. 485,063
76,100 Kent Electronics Corporation*............................................... 1,479,194
20,200 Lattice Semiconductor Corporation*.......................................... 714,575
28,800 Macromedia, Inc.*........................................................... 1,855,800
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
26 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Small Cap Stock Fund - continued SCHEDULE OF INVESTMENTS AS OF
OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stock (91.8%) Market Value
===================================================================================================================================
<S> <C> <C>
Technology (23.9%) - continued
- ------------------------------
10,100 Mercury Interactive Corporation*................................................................... $ 819,363
18,400 National Data Corporation.......................................................................... 441,600
11,300 National Instruments Corporation*.................................................................. 339,706
12,400 Novellus Systems, Inc.*............................................................................ 961,000
52,800 PairGain Technologies, Inc.*....................................................................... 646,800
12,400 Plantronics, Inc.*................................................................................. 726,175
25,400 Plexus Corporation*................................................................................ 673,100
49,700 RSA Security, Inc.*................................................................................ 1,764,350
13,000 Remedy Corporation*................................................................................ 559,000
31,800 SportsLine USA, Inc.*.............................................................................. 1,142,812
16,900 Synopsys, Inc.*.................................................................................... 1,053,081
92,500 Telecom Semiconductor*............................................................................. 855,625
155,000 TETRA Technologies, Inc.*.......................................................................... 1,288,437
27,200 Whittman-Hart, Inc.*............................................................................... 1,045,500
20,700 Xircom, Inc.*...................................................................................... 1,044,056
------------------------------------------------
Total Technology 34,707,369
================================================
Transportation (2.0%)
- --------------------
33,800 Atlantic Coast Airlines Holdings, Inc.*............................................................ 785,850
34,700 M.S. Carriers, Inc.*............................................................................... 980,275
17,300 SkyWest, Inc....................................................................................... 429,256
15,200 USFreightways Corporation.......................................................................... 688,750
------------------------------------------------
Total Transportation 2,884,131
================================================
Utilities (2.8%)
- ---------------
74,900 MDU Resources Group, Inc........................................................................... 1,750,787
17,300 New Jersey Resources Corporation................................................................... 703,894
17,100 Philadelphia Suburban Corporation.................................................................. 393,300
22,000 Piedmont Natural Gas Company, Inc.................................................................. 704,000
14,100 United Water Resources, Inc........................................................................ 475,875
------------------------------------------------
Total Utilities 4,027,856
================================================
------------------------------------------------
Total Common Stocks
(cost basis $122,269,778) 133,157,743
-----------------------------------------------
Principal Amount Short-Term Investments (9.3%) Interest Rate/1/ Maturity Date
=============================================================================================================
$ 3,117,000 Coca-Cola Company/6/........................ 5.230% 11/24/99 3,105,679
10,448,000 Merrill Lynch & Company, Inc................ 5.280-5.300 11/1-11/29/99 10,427,744
------------------------------------------------
Total Short-Term Investments
(amortized cost basis $13,533,423) 13,533,423
================================================
------------------------------------------------
TOTAL INVESTMENTS (101.1%)
(amortized cost basis $135,803,201) 146,691,166
================================================
------------------------------------------------
Other Assets, Less Liabilities (-1.1%)(1,606,848)
================================================
------------------------------------------------
Net Assets (100.0%) $145,084,318
================================================
</TABLE>
* Non-income producing security
/1/ The interest rate reflects the discount rate at the date of purchase.
/6/ 4(2) Commercial paper
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 27
<PAGE>
The AAL Mid Cap Stock Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective
The Fund seeks long-term capital growth by investing in a diversified portfolio
of common stocks, and securities convertible into common stocks, of mid-sized
companies.
<TABLE>
<CAPTION>
Shares Common Stocks (90.9%) Market Value
=============================================================================================================
<S> <C> <C>
Basic Materials (4.8%)
- ----------------------
125,000 Champion International Corporation.............................................. $ 7,226,563
112,700 Minerals Technologies, Inc...................................................... 4,860,187
412,500 RPM, Inc........................................................................ 4,924,219
80,600 Rayonier, Inc................................................................... 3,304,600
220,500 Southdown, Inc.................................................................. 10,652,906
-----------------------------------------------------
Total Basic Materials.................. 30,968,475
-----------------------------------------------------
Capital Goods (4.2%)
- --------------------
393,600 Azurix Corporation*............................................................. 5,535,000
228,400 Pentair, Inc.................................................................... 8,593,550
113,600 SPX Corporation*................................................................ 9,627,600
205,300 Tower Automotive, Inc.*......................................................... 3,348,956
-----------------------------------------------------
Total Capital Goods.................... 27,105,106
-----------------------------------------------------
Communication Services (3.1%)
- -----------------------------
64,100 Adelphia Communications Corporation*............................................ 3,501,463
189,000 CenturyTel, Inc................................................................. 7,642,687
107,000 Univision Communications, Inc.*................................................. 9,101,687
-----------------------------------------------------
Total Communication Services........... 20,245,837
-----------------------------------------------------
Consumer Cyclicals (13.0%)
- --------------------------
81,100 Catalina Marketing Corporation*................................................. 7,592,988
72,500 Cintas Corporation.............................................................. 4,368,125
314,100 Furniture Brands International, Inc.*........................................... 6,085,688
101,100 Harley-Davidson, Inc............................................................ 5,996,494
163,300 Houghton Mifflin Company........................................................ 6,919,837
75,630 Intimate Brands, Inc............................................................ 3,100,830
160,500 Navigant Consulting, Inc.*...................................................... 4,584,281
199,625 Outdoor Systems, Inc.*.......................................................... 8,459,109
85,100 Reader's Digest Association, Inc................................................ 2,744,475
538,500 Republic Services, Inc.*........................................................ 6,596,625
251,500 Tommy Hilfiger Corporation*..................................................... 7,104,875
225,100 USA Networks, Inc.*............................................................. 10,143,569
187,500 Williams-Sonoma, Inc.*.......................................................... 10,078,125
-----------------------------------------------------
Total Consumer Cyclicals 83,775,021
-----------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
28 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Mid Cap Stock Fund - continued SCHEDULE OF INVESTMENTS AS OF
OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (90.9%) Market Value
=============================================================================================================
<S> <C> <C>
Consumer Staples (4.4%)
584,300 Blockbuster, Inc................................................................ $ 7,084,637
273,200 Keebler Foods Company*.......................................................... 8,725,325
119,050 Outback Steakhouse, Inc.*....................................................... 2,738,150
166,100 Starbucks Corporation*.......................................................... 4,515,844
336,600 Tyson Foods, Inc................................................................ 5,133,150
-----------------------------------------------------
Total Consumer Staples 28,197,106
-----------------------------------------------------
Energy (6.3%)
227,600 BJ Services Company*............................................................ 7,809,525
324,000 EOG Resources, Inc.............................................................. 6,743,250
283,800 Nabors Industries, Inc.*........................................................ 6,438,713
200,000 Niagara Mohawk Power Corporation*............................................... 3,175,000
344,500 Noble Drilling Corporation*..................................................... 7,643,594
254,000 Precision Drilling Corporation*................................................. 5,889,625
116,500 Tosco Corporation............................................................... 2,948,906
-----------------------------------------------------
Total Energy 40,648,613
-----------------------------------------------------
Financials (14.5%)
186,100 Associated Banc-Corp............................................................ 7,159,025
249,500 Charter One Financial, Inc...................................................... 6,128,344
474,575 Concord EFS, Inc.*.............................................................. 12,843,186
59,700 E*TRADE Group, Inc.*............................................................ 1,421,606
85,900 FINOVA Group, Inc............................................................... 3,784,969
266,800 First Industrial Realty Trust, Inc.............................................. 6,586,625
305,000 Golden State Bancorp, Inc.*..................................................... 6,366,875
11,400 M&T Bank Corporation............................................................ 5,648,700
140,700 MGIC Investment Corporation..................................................... 8,406,825
87,800 Marshall & Ilsley Corporation................................................... 5,893,575
169,355 Old Kent Financial Corporation.................................................. 6,901,216
440,500 Peoples Heritage Financial Group, Inc........................................... 8,369,500
109,900 Protective Life Corporation..................................................... 3,977,006
65,000 S&P 400 Mid-Cap Depository Receipts............................................. 4,895,313
135,000 SouthTrust Corporation.......................................................... 5,400,000
-----------------------------------------------------
Total Financials 93,782,765
-----------------------------------------------------
Health Care (7.2%)
153,100 BioChem Pharma, Inc.*........................................................... 3,148,119
103,000 Biogen, Inc.*................................................................... 7,634,875
50,000 Elan Corporation plc ADR*....................................................... 1,287,500
180,800 Forest Laboratories, Inc.*...................................................... 8,294,200
132,800 Genzyme Corporation*............................................................ 5,079,600
229,000 Health Management Associates, Inc., Class A*.................................... 2,032,375
79,200 MedImmune, Inc.*................................................................ 8,870,400
86,100 Stryker Corporation............................................................. 5,316,675
80,800 VISX, Inc.*..................................................................... 5,055,050
-----------------------------------------------------
Total Health Care 46,718,794
-----------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 29
<PAGE>
The AAL Mid Cap Stock Fund - continued SCHEDULE OF INVESTMENTS AS OF
OCTOBER 29, 1999
<TABLE>
<CAPTION>
Share Common Stocks (90.9%) Market Value
=============================================================================================================
<S> <C> <C>
Technology (23.6%)
90,000 3Com Corporation*............................................................... $ 2,610,000
120,100 Altera Corporation*............................................................. 5,839,863
72,500 Analog Devices, Inc.*........................................................... 3,851,563
175,000 BEA Systems, Inc.*.............................................................. 7,984,375
244,100 Cabletron Systems, Inc.*........................................................ 4,042,906
123,800 Carrier Access Corporation*..................................................... 6,120,362
152,900 Comdisco, Inc................................................................... 3,086,669
51,100 Comverse Technology, Inc.*...................................................... 5,799,850
221,200 Cypress Semiconductor Corporation*.............................................. 5,654,425
91,900 Electronic Arts, Inc.*.......................................................... 7,426,669
117,800 Fiserv, Inc.*................................................................... 3,769,600
115,300 LSI Logic Corporation*.......................................................... 6,132,519
201,400 Legato Systems, Inc.*........................................................... 10,825,250
33,600 Lexmark International Group, Inc.*.............................................. 2,622,900
112,800 Linear Technology Corporation................................................... 7,888,950
142,800 Macromedia, Inc.*............................................................... 9,201,675
51,100 Novellus Systems, Inc.*......................................................... 3,960,250
29,100 PMC-Sierra, Inc.*............................................................... 2,742,675
127,100 Pixar*.......................................................................... 4,837,744
209,900 RSA Security, Inc.*............................................................. 7,451,450
105,800 Synopsys, Inc.*................................................................. 6,592,662
144,300 Tandy Corporation............................................................... 9,081,881
140,500 Teradyne, Inc.*................................................................. 5,409,250
45,000 VERITAS Software Corporation*................................................... 4,854,375
71,800 Vitesse Semiconductor Corporation*.............................................. 3,293,825
148,500 Xilinx, Inc.*................................................................... 11,675,812
-----------------------------------------------------
Total Technology 152,757,500
-----------------------------------------------------
Transportation (2.4%)
94,400 Comair Holdings, Inc............................................................ 2,178,572
257,500 Royal Caribbean Cruises, Ltd.................................................... 13,663,594
-----------------------------------------------------
Total Transportation 15,842,166
-----------------------------------------------------
Utilities (7.4%)
52,100 AES Corporation*................................................................ 2,940,394
229,400 CMS Energy Corporation.......................................................... 8,459,125
332,450 MDU Resources Group, Inc........................................................ 7,771,019
204,200 National Fuel Gas Company....................................................... 9,980,275
397,000 NiSource, Inc................................................................... 8,138,500
114,500 Nicor, Inc...................................................................... 4,436,875
278,600 Sierra Pacific Resources........................................................ 6,268,500
-----------------------------------------------------
Total Utilities 47,994,688
-----------------------------------------------------
-----------------------------------------------------
Total Common Stocks
(cost basis $527,947,192) 588,036,071
-----------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
30 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Mid Cap Stock Fund - continued SCHEDULE OF INVESTMENTS AS OF
OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Preferred Stocks (0.7%) Market Value
=============================================================================================================
<S> <C> <C>
21,500 AES Corporation Trust Convertible Securities, Series A $ 1,698,500
95,000 Readers Digest Association, Inc. Trust Automatic Common Exchange Securities....... 2,826,250
-----------------------------------------------------
Total Preferred Stocks
(cost basis $4,810,634) 4,524,750
=====================================================
Principal Amount Long-Term Fixed Income Investments (1.7%) Interest Rate Maturity Date
==================================================================================================
$ 1,400,000 BEA Systems, Inc., Convertible Bonds/2/........... 4.000% 6/15/2005 2,525,250
4,750,000 BEA Systems, Inc., Convertible Bonds.............. 4.000 6/15/2005 8,567,812
-------------------------------------------------------
Total Long-Term Fixed Income Investments
(amortized cost basis $4,653,008) 11,093,062
=======================================================
-------------------------------------------------------
Total Long-Term Investments
(amortized cost basis $537,410,834) 603,653,883
=======================================================
Short-Term Investments (8.2%) Interest Rate/1/ Maturity Date
==============================================================================
12,625,000 Coca-Cola Company/6/........................ 5.230% 11/24/99 $ 12,579,147
18,200,000 GTE Corporation............................. 5.220 11/17/99 18,152,498
22,431,000 Merrill Lynch & Company, Inc................ 5.280-5.300 11/1-11/29/99 22,381,080
---------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $53,112,725) 53,112,725
=========================================================
---------------------------------------------------------
TOTAL INVESTMENTS (101.5%)
(amortized cost basis $590,523,559) 656,766,608
=========================================================
---------------------------------------------------------
Other Assets, Less Liabilities (-1.5%) (10,010,713)
=========================================================
---------------------------------------------------------
Total Net Assets (100.0%) $646,755,895
=========================================================
</TABLE>
* Non-Income Producing Security
/1/ The Interest rate reflects the discount rate at the date of purchase.
/2/ 144A Security
/6/ 4(2) Commercial paper
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are on integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 31
<PAGE>
The AAL International Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective
The Fund seeks long-term capital growth by investing primarily in a diversified
portfolio of foreign stocks.
<TABLE>
<CAPTION>
Shares Common Stocks (97.2%) Industry Market Value
===================================================================================================================================
<S> <C> <C> <C>
Australia (1.6%)
269,570 Australia & New Zealand Banking Group, Ltd........ Banking & Finance $ 1,777,722
363,787 Coca-Cola Amatil, Ltd............................. Food & Beverage 1,121,984
-------------------------------------------------------------------
Total Australia 2,899,706
-------------------------------------------------------------------
Canada (3.7%)
56,300 BCE, Inc.......................................... Technology 3,391,244
50,400 Manulife Financial Corporation*................... Insurance 606,486
53,300 Seagram Company, Ltd.............................. Food & Beverage 2,643,439
-------------------------------------------------------------------
Total Canada 6,641,169
-------------------------------------------------------------------
France (8.3%)
16,120 Carrefour SA...................................... Retail Stores 2,982,048
13,837 Equant NV*........................................ Technology 1,345,304
78,254 Rhodia SA......................................... Drugs & Medicine 1,509,314
23,660 Suez Lyonnaise des Eaux........................... Construction 3,817,332
29,500 Valeo SA.......................................... Automotive 2,117,774
44,130 Vivendi........................................... Utilities 3,341,987
-------------------------------------------------------------------
Total France 15,113,759
-------------------------------------------------------------------
Germany (11.0%)
80,782 Bayerische Motoren Werke AG....................... Transportation 2,602,447
6,637 Celanese AG....................................... Chemicals 103,591
66,368 Hoechst AG........................................ Holding Company 2,905,431
37,880 Mannesmann AG..................................... Machinery 5,840,862
70,867 Metallgesellshaft AG.............................. Basic Materials 1,477,079
6,267 SAP Aktiengesellschaft............................ Business Services 2,702,043
29,690 Siemens AG........................................ Consumer Products 2,652,564
30,674 Veba AG........................................... Diversified Manufacturing 1,674,915
-------------------------------------------------------------------
Total Germany 19,958,932
-------------------------------------------------------------------
Greece (0.5%)
40,120 Hellenic Telecommunication Organization SA........ Technology 850,149
-------------------------------------------------------------------
Total Greece 850,149
-------------------------------------------------------------------
Hong Kong (2.0%)
504,000 China Telecom (Hong Kong), Ltd.*................. Technology 1,725,517
192,000 Hutchinson Whampoa, Ltd........................... Holding Company 1,927,537
-------------------------------------------------------------------
Total Hong Kong 3,653,054
-------------------------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
32 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL International Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (97.2%) Industry Market Value
====================================================================================================================================
<C> <S> <C> <C>
Hungary (0.5%)
18,400 Gedeon Richter....................................... Drugs & Medicine $839,577
-------------------------------------------------------------------
Total Hungary 839,577
-------------------------------------------------------------------
Italy (6.2%)
981,123 Banca Nazionale del Lavoro*.......................... Banking & Finance 3,320,597
60,000 Banca Popolare di Bergamo Credito Varesino SpA....... Banking & Finance 1,289,679
289,700 Mediaset SpA ........................................ Media 2,889,692
197,412 Telecom Italia SpA................................... Technology 1,703,545
443,900 Unicredito Italiano SpA.............................. Banking & Finance 2,076,261
-------------------------------------------------------------------
Total Italy 11,279,774
-------------------------------------------------------------------
Japan (29.1%)
439,000 Fuji Bank, Ltd....................................... Banking & Finance 6,015,427
87,000 Fujitsu, Ltd. ....................................... Technology 2,617,670
21,000 Ito-Yokado Company, Ltd.............................. Retail Stores 1,678,229
78,000 Kao Corporation...................................... Retail Stores 2,376,773
20,000 Murata Manufacturing Company, Ltd.................... Electronics 2,568,034
186 Nippon Telegraph & Telephone Corporation............. Technology 2,851,667
425 NTT Mobile Communication Network, Inc................ Technology 11,280,663
162,000 Nikko Securities Company, Ltd........................ Banking & Finance 1,521,272
16,000 Rohm Company, Ltd.................................... Electronics 3,587,581
488,000 Sakura Bank, Ltd..................................... Banking & Finance 4,189,805
127,000 Sanwa Bank, Ltd...................................... Banking & Finance 1,887,476
3,040 Shohkoh Fund & Company, Ltd.......................... Banking & Finance 1,858,490
26,000 TDK Corporation ..................................... Electronics 2,543,695
72,000 Takeda Chemical Industries, Ltd...................... Health Care 4,132,618
16,000 Takefuji Corporation................................. Banking & Finance 2,069,758
36,000 Yamanouchi Pharmaceutical Company, Ltd............... Health Care 1,631,660
-------------------------------------------------------------------
Total Japan 52,810,818
-------------------------------------------------------------------
Netherlands (9.3%)
38,000 Gucci Group NV....................................... Retail Stores 3,068,500
29,883 Laurus NV ........................................... Retail Stores 664,310
29,900 Royal Dutch Petroleum Company........................ Oil-International 1,786,018
121,943 Royal Kpn NV......................................... Technology 6,253,520
92,848 Verenigde Nederlands Uitgeversbedrijven Verenigd
Bezit................................................ Publishing/Printing 3,137,548
66,961 Vendex Kbb NV........................................ Retail Stores 1,953,088
-------------------------------------------------------------------
Total Netherlands 16,862,984
-------------------------------------------------------------------
New Zealand (1.2%)
542,144 Telecom Corporation of New Zealand, Ltd. ............ Technology 2,178,894
-------------------------------------------------------------------
Total New Zealand 2,178,894
-------------------------------------------------------------------
South Korea (0.3%)
17,300 Korea Telecom Corporation*........................... Technology 609,825
-------------------------------------------------------------------
Total South Korea 609,825
-------------------------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 33
<PAGE>
The AAL International Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (97.2%) Industry Market Value
====================================================================================================================================
<C> <S> <C> <C>
Spain (2.3%)
22,537 Banco Popular Espanol SA......................... Banking & Finance $1,516,048
156,945 Telefonica SA* .................................. Technology 2,580,008
-------------------------------------------------------------------
Total Spain 4,096,056
-------------------------------------------------------------------
Sweden (1.7%)
115,556 Hennes & Mauritz AB.............................. Retail Stores 3,064,867
-------------------------------------------------------------------
Total Sweden 3,064,867
-------------------------------------------------------------------
Switzerland (2.9%)
5,753 Clariant AG...................................... Chemicals 2,518,377
1,890 Novartis AG...................................... Health Care 2,828,116
-------------------------------------------------------------------
Total Switzerland 5,346,493
-------------------------------------------------------------------
United Kingdom (16.6%)
57,434 AstraZeneca plc.................................. Medical Supplies 2,593,672
162,950 British American Tobacco plc..................... Holding Company 1,086,957
619,500 British Aerospace plc............................ Aerospace/Defense 3,634,251
196,755 British Sky Broadcasting Group plc............... Technology 2,108,320
295,600 Diageo plc....................................... Consumer Products 2,997,716
125,826 Glaxo Wellcome plc............................... Drugs & Medicine 3,708,295
170,200 Imperial Chemical Industries plc................. Chemicals 1,696,693
148,655 Railtrack Group plc.............................. Holding Company 3,034,572
366,930 Reed International plc........................... Holding Company 2,142,031
424,200 Somerfield plc................................... Retail Stores 887,521
1,343,447 Vodafone AirTouch plc............................ Technology 6,260,895
-------------------------------------------------------------------
Total United Kingdom 30,150,923
-------------------------------------------------------------------
-------------------------------------------------------------------
Total Common Stocks
(cost basis $138,753,347) 176,356,980
-------------------------------------------------------------------
Principal Amount Short-Term Investments (4.0%) Interest Rate/1/ Maturity Date
====================================================================================================================
<C> <S> <C> <C> <C>
$7,200,000 Gillette Company........................................................ 5.300% 11/1/99 7,197,880
-------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $7,197,880) 7,197,880
-------------------------------------------------------------------
-------------------------------------------------------------------
TOTAL INVESTMENTS (101.2%)
(amortized cost basis $145,951,227) 183,554,860
-------------------------------------------------------------------
-------------------------------------------------------------------
Other Assets, Less Liabilities (-1.2%) (2,240,152)
-------------------------------------------------------------------
-------------------------------------------------------------------
Net Assets (100.0%) $181,314,708
-------------------------------------------------------------------
</TABLE>
*Non-income producing security
/1/The interest rate reflects the discount rate at the date of purchase.
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are an integral part of this
schedule.
34 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Capital Growth Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective
The Fund seeks long-term capital growth by investing primarily in a diversified
portfolio of common stocks and securities convertible into common stocks.
<TABLE>
<CAPTION>
Shares Common Stocks (92.7%) Market Value
=============================================================================================================
<C> <S> <C>
Basic Materials (0.1%)
162,500 Eastman Chemical Company........................................................... $6,266,406
-----------------------------------------------------
Total Basic Materials 6,266,406
-----------------------------------------------------
Capital Goods (5.9%)
437,000 Cordant Technologies, Inc.......................................................... 13,628,938
1,133,500 General Electric Company...........................................................153,660,094
617,400 Herman Miller, Inc................................................................. 13,389,863
152,300 Honeywell, Inc..................................................................... 16,058,131
98,300 PACCAR, Inc. ...................................................................... 4,632,387
197,000 Rockwell International Corporation................................................. 9,542,187
406,200 United Technologies Corporation.................................................... 24,575,100
-----------------------------------------------------
Total Capital Goods 235,486,700
-----------------------------------------------------
Communication Services (6.7%)
1,660,843 AT&T Corporation................................................................... 77,644,410
257,200 Adelphia Communications Corporation*............................................... 14,049,550
671,100 Bell Atlantic Corporation.......................................................... 43,579,556
300,000 MCI WorldCom, Inc.*................................................................ 25,743,750
397,000 Motorola, Inc. .................................................................... 38,682,688
870,139 SBC Communications, Inc............................................................ 44,322,706
262,000 Sprint Corporation................................................................. 19,469,875
65,500 Sprint PCS Group*.................................................................. 5,432,406
-----------------------------------------------------
Total Communication Services 268,924,941
-----------------------------------------------------
Consumer Cyclicals (7.0%)
325,000 Family Dollar Stores, Inc.......................................................... 6,703,125
329,800 Gannett Company, Inc............................................................... 25,435,825
672,700 Harley-Davidson, Inc............................................................... 39,899,519
1,943,400 Ross Stores, Inc. ................................................................. 40,082,625
433,600 New York Times Company, Class A.................................................... 17,452,400
1,037,000 Tiffany and Company................................................................ 61,701,500
106,700 Times Mirror Company............................................................... 7,695,737
1,471,200 Wal-Mart Stores, Inc............................................................... 84,042,300
-----------------------------------------------------
Total Consumer Cyclicals 283,013,031
-----------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 35
<PAGE>
The AAL Capital Growth Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (92.7%) Market Value
===================================================================================================================
<S> <C> <C>
Common Staples (21.6%)
388,000 Alberto-Culver Company.............................................................$ 9,142,250
260,000 Cablevision Systems Corporation, Class A*.......................................... 17,566,250
3,008,000 Comcast Corporation................................................................ 126,712,000
45,150 Corn Products International, Inc................................................... 1,470,197
3,011,400 Cox Communications, Inc., Class A*................................................. 136,830,488
109,200 Dean Foods Company................................................................. 5,050,500
623,000 General Mills, Inc................................................................. 54,317,813
372,000 Kimberly-Clark Corporation......................................................... 23,482,500
1,697,916 Liberty Media Group*............................................................... 67,386,041
1,721,349 MediaOne Group, Inc.*.............................................................. 122,323,363
231,200 MediaOne Group, Inc. `ATI' Premium Income Exchangeable Securities 6.250% 8/15/2001. 24,044,800
1,667,600 Philip Morris Companies, Inc....................................................... 42,002,675
709,600 Procter & Gamble Company........................................................... 74,419,300
539,700 Safeway, Inc.*..................................................................... 19,058,156
715,600 Time Warner, Inc................................................................... 49,868,375
3,807,400 Walgreen Company................................................................... 95,898,887
-----------------------------------------------------------
Total Consumer Staples 869,573,595
-----------------------------------------------------------
Energy (6.8%)
310,000 Apache Corporation, Inc............................................................ 12,090,000
633,200 BP Amoco plc ADR................................................................... 36,567,300
225,500 Chevron Corporation................................................................ 20,590,969
245,100 Columbia Energy Group.............................................................. 15,931,500
415,300 ENSCO International, Inc........................................................... 8,046,438
1,012,800 EOG Resources, Inc................................................................. 21,078,900
1,086,300 Exxon Corporation.................................................................. 80,454,094
375,500 Halliburton Company................................................................ 14,151,656
325,500 MidAmerican Energy Holdings Company................................................ 10,944,937
382,900 Nabors Industries, Inc. *.......................................................... 8,687,044
727,600 Royal Dutch Petroleum Company ADR.................................................. 43,610,525
-----------------------------------------------------------
Total Energy 272,153,363
-----------------------------------------------------------
Financials (16.3%)
401,500 American Express Company........................................................... 61,831,000
1,295,468 American International Group, Inc................................................. 133,352,237
117,400 Associates First Capital Corporation............................................... 4,285,100
607,000 Bank of America Corporation........................................................ 39,075,625
703,300 CIGNA Corporation.................................................................. 52,571,675
1,004,100 Citigroup, Inc..................................................................... 54,346,913
1,903,600 Conseco, Inc....................................................................... 46,281,275
684,800 Fannie Mae......................................................................... 48,449,600
27,300 Hartford Life, Inc................................................................. 1,426,425
497,400 Household International, Inc....................................................... 22,196,475
391,900 J.P. Morgan & Company, Inc........................................................ 51,289,912
</TABLE>
36 The accompanying notes to the financial statements are an integral part of
this schedule.
The AAL Mutual Funds Semi-annual Report
<PAGE>
The AAL Capital Growth Fund - continued SCHEDULE OF INVESTMENTS AS OF OCTOBER
29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (92.7%) Market Value
===================================================================================================================
<C> <S> <C>
Financials (16.3%) - continued
959,793 MBNA Corporation...................................................................$ 26,514,282
529,100 MGIC Investment Corporation........................................................ 31,613,725
362,000 Morgan Stanley Dean Witter & Company............................................... 39,933,125
962,000 National City Corporation.......................................................... 28,379,000
94,500 Northern Trust Corporation......................................................... 9,125,156
234,340 Starwood Hotels & Resorts Worldwide, Inc........................................... 5,375,174
-----------------------------------------------------
Total Financials 656,046,699
-----------------------------------------------------
Health Care (9.6%)
361,200 Elan Corporation plc ADR*.......................................................... 9,300,900
543,300 Eli Lilly & Company................................................................ 37,419,788
637,700 Johnson & Johnson.................................................................. 66,799,075
421,800 Medtronic, Inc. ................................................................... 14,604,825
1,511,600 Merck & Company, Inc............................................................... 120,266,675
2,255,100 Pfizer, Inc. ...................................................................... 89,076,450
657,600 Schering-Plough Corporation........................................................ 32,551,200
313,600 Wellpoint Health Networks, Inc.*................................................... 18,188,800
-----------------------------------------------------
Total Health Care 388,207,713
-----------------------------------------------------
Technology (17.8%)
1,380,900 ADC Telecommunications, Inc.*...................................................... 65,851,669
207,700 Arrow Electronics, Inc.*........................................................... 4,530,456
15,600 At Home Corporation* .............................................................. 583,050
1,500,400 Automatic Data Processing, Inc..................................................... 72,300,525
950,850 Cisco Systems, Inc.* .............................................................. 70,362,900
238,075 Computer Associates International, Inc............................................. 13,451,238
227,000 Computer Sciences Corporation*..................................................... 15,592,063
630,866 First Data Corporation............................................................. 28,822,690
283,000 Gateway, Inc.* .................................................................... 18,695,688
171,600 Hewlett-Packard Company............................................................ 12,709,125
1,118,200 Intel Corporation.................................................................. 86,590,612
1,643,448 Lucent Technologies, Inc........................................................... 105,591,534
1,555,800 Microsoft Corporation*............................................................. 144,008,737
362,300 National Data Corporation.......................................................... 8,695,200
1,077,200 Tellabs, Inc.* .................................................................... 68,132,900
-----------------------------------------------------
Total Technology 715,918,387
-----------------------------------------------------
Transportation (0.1%)
86,600 CNF Transportation, Inc. .......................................................... 2,863,212
-----------------------------------------------------
Total Transportation 2,863,212
-----------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 37
<PAGE>
The AAL Capital Growth Fund - continued SCHEDULE OF INVESTMENTS AS OF OCTOBER
29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (92.7%) Market Value
====================================================================================================================================
<S> <C> <C>
Utilities (0.8%)
788,000 Edison International.................................................................................$23,344,500
234,300 Entergy Corporation ................................................................................. 7,014,356
-----------------------------------------------------
Total Utilities 30,358,856
-----------------------------------------------------
-----------------------------------------------------
Total Common Stocks
(cost basis $1,690,622,280) 3,728,812,903
-----------------------------------------------------
Principal Amount Short-Term Investments (7.4%) Interest Rate/1/ Maturity Date
===================================================================================================================
$35,370,000 AT&T Corporation........................................... 5.240-5.260% 12/6-12/7/99 35,177,063
35,231,000 Bell Atlantic Network Funding Corporation.................. 5.260-5.270 11/4-11/8/99 35,196,457
38,337,000 Ford Motor Credit Company.................................. 5.250-5.700 12/17/99-1/10/2000 37,975,002
54,874,000 General Electric Capital Corporation....................... 5.260-5.940 11/23/99-1/20/2000 54,523,159
13,582,000 GTE Corporation ........................................... 5.220 11/17/99 13,546,551
16,850,000 Heller Financial, Inc...................................... 5.320 11/22/99 16,792,729
64,800,000 Merrill Lynch & Company, Inc............................... 5.280-5.300 11/1-12/10/99 64,609,616
25,808,000 Toyota Motor Corporation................................... 5.240-5.260 11/18-11/30/99 25,710,168
13,010,000 Transamerica Finance Corporation........................... 5.340 12/2/99 12,946,793
---------------------------------------------------
Total Short-Term Investments
(amortized cost basis $296,477,538) 296,477,538
---------------------------------------------------
---------------------------------------------------
TOTAL INVESTMENTS (100.1%)
(amortized cost basis $1,987,099,818) 4,025,290,441
---------------------------------------------------
---------------------------------------------------
Other Assets, Less Liabilities (-0.1%) (1,296,521)
---------------------------------------------------
---------------------------------------------------
Net Assets (100.0%) $4,023,993,920
---------------------------------------------------
</TABLE>
*Non-income producing security
/1/The interest rate reflects the discount rate at the date of purchase.
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are an integral part of this
schedule.
38 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Equity Income Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective
The Fund seeks current income, long-term income growth and capital growth by
investing primarily in a diversified portfolio of income-producing equity
securities.
<TABLE>
<CAPTION>
Shares Common Stocks (92.7%) Market Value
=============================================================================================================
<C> <S> <C>
Basic Materials (5.9%)
28,596 E.I. du Pont de Nemours and Company...............................................$ 1,842,655
55,000 International Paper Company....................................................... 2,894,375
97,000 Masco Corporation................................................................. 2,958,500
100,000 Plum Creek Timber Company, Inc.................................................... 2,625,000
119,300 Southdown, Inc. .................................................................. 5,763,681
52,000 USX - US Steel Group.............................................................. 1,329,250
-----------------------------------------------------
Total Basic Materials 17,413,461
-----------------------------------------------------
Capital Goods (8.9%)
64,000 AlliedSignal, Inc................................................................. 3,644,000
57,000 BFGoodrich Company................................................................ 1,350,188
44,000 Boeing Company.................................................................... 2,026,750
21,000 Corning, Inc. .................................................................... 1,651,125
154,774 Delphi Automotive Systems Corporation............................................. 2,544,098
55,000 Emerson Electric Company.......................................................... 3,303,437
38,000 Honeywell, Inc.................................................................... 4,006,625
34,000 Lockheed Martin Corporation....................................................... 680,000
50,000 Pitney Bowes, Inc................................................................. 2,278,125
67,000 Tenneco, Inc. .................................................................... 1,072,000
62,000 United Technologies Corporation................................................... 3,751,000
-----------------------------------------------------
Total Capital Goods 26,307,348
-----------------------------------------------------
Communication Services (14.7%)
116,053 AT&T Corporation.................................................................. 5,425,478
56,600 Bell Atlantic Corporation......................................................... 3,675,463
90,000 Cable & Wireless plc ADR.......................................................... 3,150,000
35,000 GTE Corporation................................................................... 2,625,000
102,024 MCI WorldCom, Inc.*............................................................... 8,754,934
162,147 SBC Communications, Inc........................................................... 8,259,363
102,825 Telefonica SA ADR*................................................................ 5,134,823
137,500 Vodafone AirTouch plc ADR......................................................... 6,591,406
-----------------------------------------------------
Total Communication Services 43,616,467
-----------------------------------------------------
Consumer Cyclicals (9.0%)
61,000 AutoZone, Inc.* .................................................................. 1,620,313
52,000 Convergys Corporation*............................................................ 1,017,250
48,000 Dayton Hudson Corporation......................................................... 3,102,000
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
38 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Equity Income Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (92.7%) Market Value
=============================================================================================================
<C> <S> <C>
Consumer Cyclicals (9.0%) - continued
126,250 Dollar General Corporation........................................................$ 3,329,844
33,000 Ford Motor Company................................................................ 1,810,875
14,000 Gannett Company, Inc.............................................................. 1,079,750
24,000 General Motors Corporation........................................................ 1,686,000
165,500 Hasbro, Inc. ..................................................................... 3,413,437
54,000 Home Depot, Inc................................................................... 4,077,000
143,000 Kmart Corporation*................................................................ 1,438,937
52,000 Lowe's Companies, Inc............................................................. 2,860,000
28,000 New York Times Company, Class A................................................... 1,127,000
-----------------------------------------------------
Total Consumer Cyclicals 26,562,406
-----------------------------------------------------
Consumer Staples (6.9%)
44,000 Albertson's, Inc. ................................................................ 1,597,750
71,000 Flowers Industries, Inc........................................................... 1,198,125
105,000 Fox Entertainment Group, Inc.*.................................................... 2,270,625
43,000 H.J. Heinz Company................................................................ 2,053,250
43,888 Liberty Media Group*.............................................................. 1,741,805
78,800 MediaOne Group, Inc.*............................................................. 5,599,725
76,000 Ralston Purina Company............................................................ 2,389,250
86,000 Sara Lee Corporation.............................................................. 2,327,375
73,000 Tyson Foods, Inc. ................................................................ 1,113,250
-----------------------------------------------------
Total Consumer Staples 20,291,155
-----------------------------------------------------
Energy (12.8%)
85,000 BJ Services Company* ............................................................. 2,916,563
73,048 BP Amoco plc ADR ................................................................. 4,218,522
73,000 Coastal Corporation............................................................... 3,075,125
19,500 Columbia Energy Group............................................................. 1,267,500
109,191 Conoco, Inc., Class B............................................................. 2,961,806
27,000 Consolidated Natural Gas Company.................................................. 1,728,000
74,000 Halliburton Company............................................................... 2,788,875
36,000 Mobil Corporation................................................................. 3,474,000
169,000 Noble Drilling Corporation*....................................................... 3,749,687
96,000 Questar Corporation............................................................... 1,728,000
87,000 Texaco, Inc. ..................................................................... 5,339,625
71,000 Transocean Offshore, Inc........................................................... 1,930,312
72,000 Williams Companies, Inc............................................................ 2,700,000
-----------------------------------------------------
Total Energy 37,878,015
-----------------------------------------------------
Financials (12.3%)
48,910 Associates First Capital Corporation.............................................. 1,785,215
31,900 Banc One Corporation.............................................................. 1,198,244
32,000 Bank of New York Company, Inc..................................................... 1,340,000
44,000 Chase Manhattan Corporation....................................................... 3,844,500
32,000 CIGNA Corporation................................................................. 2,392,000
64,000 Citigroup, Inc.................................................................... 3,464,000
63,000 Conseco, Inc. .................................................................... 1,531,688
40,000 Crescent Real Estate Equities Company............................................. 667,500
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
40 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Equity Income Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (92.7%) Market Value
=============================================================================================================
<C> <S> <C>
Financials (12.3%) - continued
52,000 Duke Realty Investments, Inc......................................................$ 1,020,500
25,000 Equity Residential Properties Trust............................................... 1,045,313
31,000 Fannie Mae........................................................................ 2,193,250
111,000 First Industrial Realty Trust, Inc................................................ 2,740,312
24,000 Fleet Boston Corporation.......................................................... 1,047,000
41,000 Freddie Mac....................................................................... 2,216,562
60,000 Mellon Bank Corporation........................................................... 2,216,250
23,000 Mercantile Bankshares Corporation................................................. 828,000
39,000 Simon Property Group, Inc......................................................... 899,437
93,581 Starwood Hotels & Resorts Worldwide, Inc.......................................... 2,146,514
53,000 Torchmark Corporation............................................................. 1,652,937
13,000 Union Planters Corporation........................................................ 578,500
27,000 XL Capital, Ltd................................................................... 1,449,563
-----------------------------------------------------
Total Financials 36,257,285
-----------------------------------------------------
Health Care (8.2%)
39,000 Baxter International, Inc......................................................... 2,530,125
148,200 CVS Corporation .................................................................. 6,437,438
64,000 Elan Corporation plc ADR*......................................................... 1,648,000
33,000 Eli Lilly & Company............................................................... 2,272,875
29,000 Johnson & Johnson................................................................. 3,037,750
78,000 Medtronic, Inc. .................................................................. 2,700,750
34,000 Merck & Company, Inc.............................................................. 2,705,125
36,000 Warner-Lambert Company............................................................ 2,873,250
-----------------------------------------------------
Total Health Care 24,205,313
-----------------------------------------------------
Technology (5.2%)
31,000 ADC Telecommunications, Inc.*..................................................... 1,478,313
40,000 CIENA Corporation* ............................................................... 1,410,000
78,000 First Data Corporation............................................................ 3,563,625
38,000 International Business Machines Corporation....................................... 3,738,250
82,444 Lucent Technologies, Inc.......................................................... 5,297,027
-----------------------------------------------------
Total Technology 15,487,215
-----------------------------------------------------
Transportation (1.6%)
90,500 Royal Caribbean Cruises, Ltd. .................................................... 4,802,156
-----------------------------------------------------
Total Transportation 4,802,156
-----------------------------------------------------
Utilities (7.2%)
36,000 Ameren Corporation................................................................ 1,361,250
64,000 CMS Energy Corporation............................................................ 2,360,000
73,000 Central and South West Corporation................................................ 1,619,687
22,650 Consolidated Edison, Inc.......................................................... 864,947
48,000 Dominion Resources, Inc........................................................... 2,310,000
65,000 Edison International.............................................................. 1,925,625
34,995 NSTAR* ........................................................................... 1,331,997
73,100 New Century Energies, Inc......................................................... 2,380,319
56,000 PG&E Corporation.................................................................. 1,284,500
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 41
<PAGE>
The AAL Equity Income Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (92.7%) Market Value
=========================================================================================================================
<C> <S> <C>
Utilities (7.2%) - continued
67,000 Pinnacle West Capital Corporation.........................................................$ 2,470,625
87,000 Texas Utilities Company .................................................................. 3,371,250
----------------------------------------------------
Total Utilities 21,280,200
----------------------------------------------------
----------------------------------------------------
Total Common Stocks
(cost basis $222,178,276) 274,101,021
----------------------------------------------------
Preferred Stocks (2.1%)
======================================================================================
135,000 MediaOne Group, Inc. Convertible Securities........................................... 6,167,813
----------------------------------------------------
Total Preferred Stocks
(cost basis $5,864,063) 6,167,813
----------------------------------------------------
Principal Amount Long-Term Fixed Income Investments (1.9%) Interest Rate Maturity Date
=========================================================================================================
$ 1,650,000 Texas Utilities Electric Bonds.................................... 9.750% 5/1/2021 1,780,764
3,150,000 U.S. Treasury Notes .............................................. 6.875 3/31/2000 3,171,656
500,000 U.S. Treasury Bonds .............................................. 7.500 11/15/2016 551,719
----------------------------------------------------
Total Long-Term Fixed Income Investments
(amortized cost basis $5,628,276) 5,504,139
----------------------------------------------------
----------------------------------------------------
Total Long-Term Investments
(amortized cost basis $233,670,615) 285,772,973
----------------------------------------------------
Short-Term Investments (6.1%)/1/
================================================
4,262,000 Coca-Cola Company/6/........................................ 5.230 11/24/99 4,246,521
5,768,000 GTE Corporation............................................. 5.220 11/17/99 5,752,946
8,186,000 Merrill Lynch & Company, Inc................................ 5.280-5.300 11/1-11/29/99 8,163,032
----------------------------------------------------
Total Short-Term Investments
(amortized cost basis $18,162,499) 18,162,499
----------------------------------------------------
----------------------------------------------------
TOTAL INVESTMENTS (102.8%)
(amortized cost basis $251,833,114) 303,935,472
----------------------------------------------------
----------------------------------------------------
Other Assets, Less Liabilities (-2.8%) (8,255,379)
----------------------------------------------------
----------------------------------------------------
Total Net Assets (100.0%) $295,680,093
----------------------------------------------------
</TABLE>
*Non-income producing security
/1/The interest rate reflects the discount rate at the date of purchase.
/6/4(2) Commercial paper
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are an integral part of this
schedule.
42 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Balanced Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective
The Fund seeks long-term total return through a balance between income and the
potential for long-term capital growth by investing primarily in a diversified
portfolio of common stocks, bonds and money market instruments.
<TABLE>
<CAPTION>
Shares Common Stocks (50.1%) Market Value
=============================================================================================================
<S> <C> <C>
Basic Materials (0.1%)
5,200 Eastman Chemical Company......................................................... $200,525
-----------------------------------------------------
Total Basic Materials 200,525
-----------------------------------------------------
Capital Goods (3.2%)
14,000 Cordant Technologies, Inc. ...................................................... 436,625
36,300 General Electric Company......................................................... 4,920,919
19,800 Herman Miller, Inc. ............................................................. 429,413
4,900 Honeywell, Inc. ................................................................. 516,644
3,100 PACCAR, Inc. .................................................................... 146,087
6,300 Rockwell International Corporation............................................... 305,156
13,000 United Technologies Corporation.................................................. 786,500
-----------------------------------------------------
Total Capital Goods 7,541,344
-----------------------------------------------------
Communication Services (3.6%)
53,143 AT&T Corporation................................................................. 2,484,435
8,200 Adelphia Communications Corporation*............................................. 447,925
21,500 Bell Atlantic Corporation........................................................ 1,396,156
9,600 MCI WorldCom, Inc.*.............................................................. 823,800
12,700 Motorola, Inc. .................................................................. 1,237,456
27,899 SBC Communications, Inc. ........................................................ 1,421,106
8,400 Sprint Corporation............................................................... 624,225
2,100 Sprint PCS Group*................................................................ 174,169
-----------------------------------------------------
Total Communication Services 8,609,272
-----------------------------------------------------
Consumer Cyclicals (3.8%)
10,400 Family Dollar Stores, Inc. ...................................................... 214,500
10,600 Gannett Company, Inc. ........................................................... 817,525
21,500 Harley-Davidson, Inc. ........................................................... 1,275,219
62,200 Ross Stores, Inc. ............................................................... 1,282,875
13,900 New York Times Company, Class A.................................................. 559,475
33,200 Tiffany and Company.............................................................. 1,975,400
3,400 Times Mirror Company............................................................. 245,225
47,100 Wal-Mart Stores, Inc. ........................................................... 2,690,587
-----------------------------------------------------
Total Consumer Cyclicals 9,060,806
-----------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 43
<PAGE>
The AAL Balanced Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (50.1%) Market Value
=============================================================================================================
<S> <C> <C>
Consumer Staples (11.7%)
12,400 Alberto-Culver Company......................................................... $292,175
8,300 Cablevision Systems Corporation, Class A*...................................... 560,769
96,300 Comcast Corporation............................................................ 4,056,638
1,400 Corn Products International, Inc. ............................................. 45,588
96,400 Cox Communications, Inc., Class A*............................................. 4,380,175
3,500 Dean Foods Company............................................................. 161,875
19,900 General Mills, Inc. ........................................................... 1,735,031
11,900 Kimberly-Clark Corporation..................................................... 751,188
54,300 Liberty Media Group*........................................................... 2,155,031
55,100 MediaOne Group, Inc.*.......................................................... 3,915,544
7,400 MediaOne Group, Inc. `ATI' Premium Income Exchangeable
Securities 6.250% 8/15/2001.................................................... 769,600
53,400 Philip Morris Companies, Inc. ................................................. 1,345,012
22,700 Procter & Gamble Company....................................................... 2,380,662
17,300 Safeway, Inc.*................................................................. 610,906
22,900 Time Warner, Inc. ............................................................. 1,595,844
121,900 Walgreen Company............................................................... 3,070,356
-----------------------------------------------------
Total Consumer Staples 27,826,394
-----------------------------------------------------
Energy (3.6%)
9,900 Apache Corporation, Inc. ...................................................... 386,100
20,200 BP Amoco plc ADR............................................................... 1,166,550
7,200 Chevron Corporation............................................................ 657,450
7,800 Columbia Energy Group.......................................................... 507,000
13,300 ENSCO International, Inc. ..................................................... 257,687
32,400 EOG Resources, Inc. ........................................................... 674,325
34,800 Exxon Corporation.............................................................. 2,577,375
12,000 Halliburton Company............................................................ 452,250
10,400 MidAmerican Energy Holdings Company............................................ 349,700
12,300 Nabors Industries, Inc.*....................................................... 279,056
23,300 Royal Dutch Petroleum Company ADR.............................................. 1,396,544
-----------------------------------------------------
Total Energy 8,704,037
-----------------------------------------------------
Financials (8.8%)
12,900 American Express Company....................................................... 1,986,600
41,475 American International Group, Inc. ............................................ 4,269,333
3,800 Associates First Capital Corporation........................................... 138,700
19,400 Bank of America Corporation.................................................... 1,248,875
22,500 CIGNA Corporation.............................................................. 1,681,875
32,100 Citigroup, Inc. ............................................................... 1,737,413
60,900 Conseco, Inc. ................................................................. 1,480,631
21,900 Fannie Mae..................................................................... 1,549,425
900 Hartford Life, Inc. ........................................................... 47,025
15,900 Household International, Inc. ................................................. 709,538
12,500 J.P. Morgan & Company, Inc. ................................................... 1,635,937
30,700 MBNA Corporation............................................................... 848,087
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
44 The AAL Mutual Funds Semi-Annual report
<PAGE>
The AAL Balanced Fund - continued SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Shares Common Stocks (50.1%) Market Value
=============================================================================================================
<S> <C> <C>
Financials (8.8%) continued
16,900 MGIC Investment Corporation.................................................... $1,009,775
11,600 Morgan Stanley Dean Witter & Company........................................... 1,279,625
30,800 National City Corporation...................................................... 908,600
3,000 Northern Trust Corporation..................................................... 289,687
7,508 Starwood Hotels & Resorts Worldwide, Inc. ..................................... 172,215
-----------------------------------------------------
Total Financials 20,993,341
-----------------------------------------------------
Health Care (5.2%)
11,600 Elan Corporation plc ADR*...................................................... 298,700
17,400 Eli Lilly & Company............................................................ 1,198,425
20,400 Johnson & Johnson.............................................................. 2,136,900
13,500 Medtronic, Inc. ............................................................... 467,438
48,400 Merck & Company, Inc. ......................................................... 3,850,825
72,200 Pfizer, Inc. .................................................................. 2,851,900
21,000 Schering-Plough Corporation.................................................... 1,039,500
10,000 Wellpoint Health Networks, Inc.*............................................... 580,000
-----------------------------------------------------
Total Health Care 12,423,688
-----------------------------------------------------
Technology (9.6%)
44,200 ADC Telecommunications, Inc.*.................................................. 2,107,788
6,600 Arrow Electronics, Inc.*....................................................... 143,963
500 At Home Corporation*........................................................... 18,687
48,000 Automatic Data Processing, Inc. ............................................... 2,313,000
30,400 Cisco Systems, Inc.*........................................................... 2,249,600
7,600 Computer Associates International, Inc. ....................................... 429,400
7,300 Computer Sciences Corporation*................................................. 501,419
20,200 First Data Corporation......................................................... 922,887
9,100 Gateway, Inc.*................................................................. 601,169
5,500 Hewlett-Packard Company........................................................ 407,344
35,800 Intel Corporation.............................................................. 2,772,262
52,600 Lucent Technologies, Inc. ..................................................... 3,379,550
49,800 Microsoft Corporation*......................................................... 4,609,612
11,600 National Data Corporation...................................................... 278,400
34,500 Tellabs, Inc.*................................................................. 2,182,125
-----------------------------------------------------
Total Technology 22,917,206
-----------------------------------------------------
Transportation (0.1%)
2,800 CNF Transportation, Inc. ...................................................... 92,575
-----------------------------------------------------
Total Transportation 92,575
-----------------------------------------------------
Utilities (0.4%)
25,200 Edison International........................................................... 746,550
7,500 Entergy Corporation............................................................ 224,531
-----------------------------------------------------
Total Utilities 971,081
-----------------------------------------------------
-----------------------------------------------------
Total Common Stocks
(cost basis $99,400,343) 119,340,269
-----------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 45
<PAGE>
The AAL Balanced Fund - continued SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Long-Term Fixed-Income Investments (35.4%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
U.S. Government Agency Investments (6.8%)
$ 3,703,476 Federal National Mortgage Association 15 Yr. Pass Through.................. 6.500% 6/1/2013 $3,637,447
1,907,480 Federal National Mortgage Association 15 Yr. Pass Through.................. 5.500 1/1/2014 1,795,255
3,499,122 Government National Mortgage Association 15 Yr. Pass Through............... 7.500 10/15/2013 3,555,255
3,494,814 Government National Mortgage Association 30 Yr. Pass Through............... 7.500 8/15/2029 3,505,948
3,928,793 Government National Mortgage Association 30 Yr. Pass Through............... 6.500 3/15/2029 3,756,252
-----------------------------------------------
Total U.S. Government Agency
Investments 16,250,157
-----------------------------------------------
U.S. Government Investments (4.5%)
8,000,000 U.S. Treasury Bonds........................................................ 7.250 5/15/2016 8,622,496
2,000,000 U.S. Treasury Notes........................................................ 6.500 10/15/2006 2,035,624
-----------------------------------------------
Total U.S. Government Investments 10,658,120
-----------------------------------------------
Asset-Backed Securities (1.4%)
1,000,000 Green Tree Financial Corporation Series 1999-5 Class A-4................... 7.330 4/1/2031 1,002,170
1,500,000 Green Tree Financial Corporation Series 1998-1 Class A-6................... 6.330 11/1/2029 1,426,050
900,000 Harley-Davidson Eaglemark Motorcycle Trust Series 1999-1
Class Certificates......................................................... 6.710 8/15/2000 880,452
-----------------------------------------------
Total Asset-Backed Securities 3,308,672
-----------------------------------------------
Corporate Investments (22.7%)
1,400,000 American Airlines, Inc. ................................................... 7.024 10/15/2009 1,392,496
1,300,000 Arizona Public Service Company............................................. 6.250 1/15/2005 1,244,001
2,000,000 AT&T Capital Corporation................................................... 6.875 1/15/2001 2,005,158
1,000,000 Avalon Bay Communities, Inc. .............................................. 7.500 8/1/2009 966,319
1,000,000 Bank of America Corporation................................................ 6.625 6/15/2004 991,937
1,000,000 Cabot Industrial Properties, L.P. ......................................... 7.125 5/1/2004 968,332
1,765,000 CBS Corporation............................................................ 7.150 5/20/2005 1,747,161
1,000,000 CIT Group, Inc. ........................................................... 7.125 10/15/2004 1,004,214
1,000,000 Coastal Corporation........................................................ 6.500 5/15/2006 957,263
1,500,000 Comdisco, Inc. ............................................................ 5.950 4/30/2002 1,450,510
1,000,000 Countrywide Home Loans, Inc. .............................................. 6.250 4/15/2009 922,130
1,500,000 Edison International, Inc. ................................................ 6.875 9/15/2004 1,487,657
1,000,000 Edison Mission Holdings Company/2/......................................... 8.137 10/1/2019 952,639
1,000,000 El Paso Energy Corporation................................................. 6.750 5/15/2009 950,177
1,000,000 EOP Operating, L.P. ....................................................... 6.800 1/15/2009 929,389
2,000,000 Fidelity Investments/2/.................................................... 7.490 6/15/2019 1,984,254
1,000,000 FPL Group Capital, Inc. ................................................... 7.625 9/15/2006 1,017,365
1,000,000 Guidant Corporation........................................................ 6.150 2/15/2006 935,898
1,000,000 Household Finance Corporation.............................................. 7.200 7/15/2006 999,407
1,500,000 Joseph E. Seagram & Sons, Inc. ............................................ 6.625 12/15/2005 1,438,056
1,000,000 KN Energy, Inc. ........................................................... 6.650 3/1/2005 969,638
1,500,000 Kroger Company............................................................. 7.625 9/15/2006 1,510,538
1,745,000 Mercantile Bancorporation, Inc. ........................................... 7.625 10/15/2002 1,778,244
500,000 News America Holdings, Inc. ............................................... 8.625 2/1/2003 520,692
1,999,879 Niagara Mohawk Power Corporation........................................... 7.625 10/1/2005 2,014,744
1,000,000 Northern Border Pipeline Company/2/........................................ 7.750 9/1/2009 1,011,293
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
46 The AAL Mutual Funds Semi-Annual report
<PAGE>
The AAL Balanced Fund - continued SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Long-Term Fixed-Income Investments (35.4%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<C> <S> <C> <C> <C>
Corporate Investments (22.7%) - continued
$1,000,000 Northern Trust Corporation................................................. 7.100% 8/1/2009 $991,318
1,500,000 Oneok, Inc. ............................................................... 7.750 8/15/2006 1,514,082
1,000,000 Pentair, Inc. ............................................................. 7.850 10/15/2009 993,654
1,500,000 PSI Energy, Inc. .......................................................... 7.850 10/15/2007 1,512,728
940,000 Raytheon Company........................................................... 6.750 3/15/2018 829,174
1,000,000 Raytheon Company........................................................... 6.500 7/15/2005 955,079
1,000,000 Society National Bank...................................................... 7.250 6/1/2005 1,006,914
1,500,000 Sun Microsystems, Inc. .................................................... 7.500 8/15/2006 1,523,298
500,000 TCI Communications, Inc. .................................................. 8.650 9/15/2004 537,700
1,500,000 Texas Utilities Eastern Funding Company/2/................................. 6.450 5/15/2005 1,425,143
1,000,000 Textron Financial Corporation.............................................. 7.370 10/15/2003 988,339
1,000,000 Times Mirror Company....................................................... 7.450 10/15/2009 1,010,390
1,500,000 Tyco International Group SA/2/............................................. 6.875 9/5/2002 1,491,715
2,000,000 Union Pacific Company...................................................... 5.780 10/15/2001 1,961,828
1,000,000 United Technologies Corporation............................................ 7.500 9/15/2029 1,009,139
1,000,000 United Technologies Corporation............................................ 6.500 6/1/2009 968,066
1,000,000 USX Corporation............................................................ 6.650 2/1/2006 959,745
2,000,000 Waste Management, Inc./2/.................................................. 6.000 5/15/2001 1,888,168
500,000 Williams Companies, Inc. .................................................. 7.625 7/15/2019 487,408
-----------------------------------------------
Total Corporate Investments 54,203,400
-----------------------------------------------
-----------------------------------------------
Total Long-Term Fixed Income Investments
(amortized cost basis $85,352,151) 84,420,349
-----------------------------------------------
Short-Term Investments (14.0%)/1/
===========================================================================
104,000 AT&T Corporation........................................................... 5.320 11/19/99 103,692
6,753,000 Coca-Cola Company/6/....................................................... 5.230 11/24/99 6,728,474
8,000,000 GTE Corporation............................................................ 5.220 11/17/99 7,979,120
9,389,000 International Lease Finance Corporation.................................... 5.240 11/16/99 9,365,767
9,284,000 Mobile Corporation......................................................... 5.200 11/1/99 9,281,318
-----------------------------------------------
Total Short-Term Investments
(amortized cost basis $33,458,371) 33,458,371
-----------------------------------------------
-----------------------------------------------
TOTAL INVESTMENTS (99.5%)
(amortized cost basis $218,210,865) 237,218,989
-----------------------------------------------
-----------------------------------------------
Other Assets, Less Liabilities (0.5%) 1,223,083
-----------------------------------------------
-----------------------------------------------
Net Assets (100.0%) $238,442,072
-----------------------------------------------
</TABLE>
*Non-income producing security
/1/The interest rate reflects the discount rate at the date of purchase.
/2/144A security
/6/4(2) Commercial paper
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 47
<PAGE>
The AAL High Yield Bond Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective:
The Fund seeks high current income and secondarily capital growth by investing
primarily in a diversified portfolio of high risk, high yield bonds commonly
referred to as "junk bonds."
<TABLE>
<CAPTION>
Principal Amount Long-Term Fixed-Income Obligations (92.8%) Interest Rate Maturity Date Market Value
====================================================================================================================================
<C> <S> <C> <C> <C>
Chemicals (2.1%)
$2,000,000 LaRoche Industries, Inc.................................................. 9.500% 9/15/2007 $ 500,000
1,500,000 PCI Chemicals Canada, Inc................................................ 9.250 10/15/2007 1,140,000
1,650,000 Royster-Clark, Inc./2/ .................................................. 10.250 4/1/2009 1,452,000
-----------------------------------------------
Total Chemicals 3,092,000
-----------------------------------------------
Construction (5.2%)
1,250,000 Amatek Industries Property, Ltd.......................................... 12.000 2/15/2008 1,165,625
1,000,000 American Standard, Inc................................................... 7.625 2/15/2010 890,000
1,650,000 Building One Services Corporation........................................ 10.500 5/1/2009 1,468,500
1,000,000 Fortress Group, Inc. .................................................... 13.750 5/15/2003 600,000
750,000 ISG Resources, Inc. ..................................................... 10.000 4/15/2008 667,500
1,500,000 Omega Cabinets, Ltd. .................................................... 10.500 6/15/2007 1,455,000
1,250,000 Penhall International Corporation........................................ 12.000 8/1/2006 1,250,000
-----------------------------------------------
Total Construction 7,496,625
-----------------------------------------------
Consumer Products (3.7%)
1,000,000 Commemorative Brands, Inc................................................ 11.000 1/15/2007 692,500
1,850,000 Doskocil Manufacturing Company, Inc...................................... 10.125 9/15/2007 647,500
1,000,000 Polaroid Corporation..................................................... 11.500 2/15/2006 990,000
1,250,000 Revlon Consumer Products Corporation..................................... 8.625 2/1/2008 681,250
1,250,000 Salton, Inc. ........................................................... 10.750 12/15/2005 1,275,000
1,250,000 Samsonite Corporation.................................................... 10.750 6/15/2008 1,037,500
-----------------------------------------------
Total Consumer Products 5,323,750
-----------------------------------------------
Containers (1.1%)
1,650,000 Anchor Glass Containers Corporation...................................... 11.250 4/1/2005 1,625,250
-----------------------------------------------
Total Containers 1,625,250
-----------------------------------------------
Energy (6.7%)
500,000 Abraxas Petroleum Corporation............................................ 12.875 3/15/2003 505,000
1,500,000 Abraxas Petroleum Corporation............................................ 11.500 11/1/2004 945,000
1,500,000 Clark Refining & Marketing Corporation................................... 8.375 11/15/2007 1,260,000
1,000,000 Crown Central Petroleum Corporation...................................... 10.875 2/1/2005 720,000
2,500,000 Energy Corporation of America............................................ 9.500 5/15/2007 1,250,000
1,250,000 KCS Energy, Inc./5/...................................................... 11.000 1/15/2003 987,500
1,000,000 Key Energy Services, Inc................................................. 14.000 1/15/2009 1,075,000
1,000 Key Energy Services, Inc. (Warrants)*.................................... 20,000
2,500,000 Northern Offshore ASA.................................................... 10.000 5/15/2005 1,525,000
1,000,000 RBF Finance Company...................................................... 11.000 3/15/2006 1,050,000
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
48 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL High Yield Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Long-Term Fixed-Income Obligations (92.8%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Energy (6.7%) - continued
.........................
$1,500,000 Transamerican Energy Corporation/5/........................................11.500% 6/15/2002 $ 165,000
500,000 XCL, Ltd./2//5/............................................................13.500 5/1/2004 175,000
-----------------------------------------------
Total Energy 9,677,500
-----------------------------------------------
Financials (2.7%)
.................
750,000 AmeriCredit Corporation.................................................... 9.875 4/15/2006 733,125
1,700,000 AMERSCO, Inc. .............................................................10.000 3/15/2004 918,000
1,250,000 Arcadia Financial, Ltd. ...................................................11.500 3/15/2007 775,000
750 Arcadia Financial, Ltd. (Warrants)*........................................ 7,500
2,000,000 Imperial Credit Industries, Inc. .......................................... 9.875 1/15/2007 1,520,000
-----------------------------------------------
Total Financials 3,953,625
-----------------------------------------------
Food & Beverages (3.5%)
.......................
1,650,000 Fresh Foods, Inc. .........................................................10.750 6/1/2006 1,505,625
1,500,000 SFC New Holdings, Inc. ....................................................12.125 10/1/2002 1,380,000
71,840 SFC New Holdings, Inc. Subordinated Notes*................................. 0.000 12/15/2009 0
1,900,000 Smithfield Foods, Inc. .................................................... 7.625 2/15/2008 1,691,000
750,000 Viskase Companies, Inc. ...................................................10.250 12/1/2001 555,000
-----------------------------------------------
Total Food & Beverages 5,131,625
-----------------------------------------------
Food Retailers (1.3%)
.....................
1,000,000 Fleming Companies, Inc. ...................................................10.625 12/15/2001 1,002,500
1,000,000 Fleming Companies, Inc. ...................................................10.500 12/1/2004 920,000
-----------------------------------------------
Total Food Retailers 1,922,500
-----------------------------------------------
Forest Products & Paper (5.0%)
..............................
500,000 American Pad & Paper Company...............................................13.000 11/15/2005 76,250
1,250,000 American Tissue, Inc./2/...................................................12.500 7/15/2006 1,189,063
1,250,000 Four M Corporation.........................................................12.000 6/1/2006 1,156,250
1,000,000 Gaylord Container Corporation.............................................. 9.375 6/15/2007 915,000
1,500,000 Indah Kiat Finance Muritius, Ltd. .........................................10.000 7/1/2007 967,500
1,750,000 Sweetheart Cup Company, Inc. ..............................................10.500 9/1/2003 1,522,500
1,500,000 Sweetheart Cup Company, Inc. .............................................. 9.625 9/1/2000 1,455,000
-----------------------------------------------
Total Forest Products & Paper 7,281,563
-----------------------------------------------
Health Care (3.3%)
..................
1,500,000 ICN Pharmaceuticals, Inc. ................................................. 9.250 8/15/2005 1,413,750
500 Imagyn, Inc. (Warrants)*................................................... 5
1,250,000 Mariner Post-Acute Network, Inc./5/........................................ 9.500 11/1/2007 56,250
2,000,000 Tenet Healthcare Corporation............................................... 8.000 1/15/2005 1,885,000
1,250,000 Triad Hospitals Holdings, Inc./2/..........................................11.000 5/15/2009 1,225,000
1,000,000 Vencor, Inc./5/............................................................ 9.875 5/1/2005 180,000
-----------------------------------------------
Total Health Care 4,760,005
-----------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 49
<PAGE>
The AAL High Yield Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Long-Term Fixed-Income Investments (92.8%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Leisure (7.5%)
..............
$1,650,000 Circus Circus Enterprise, Inc. ............................................ 7.625% 7/15/2013 $ 1,388,063
2,500,000 HMH Properties, Inc. ...................................................... 7.875 8/1/2005 2,275,000
1,250,000 Harrahs Operating Company, Inc. ........................................... 7.875 12/15/2005 1,192,187
1,250,000 Livent, Inc./5/............................................................ 9.375 10/15/2004 325,000
1,070,000 Prime Hospitality Corporation.............................................. 9.250 1/15/2006 1,027,200
1,250,000 Regal Cinemas, Inc. ....................................................... 9.500 6/1/2008 937,500
1,500,000 Riviera Holdings Corporation...............................................10.000 8/15/2004 1,320,000
1,000,000 Silver Cinemas International, Inc. ........................................10.500 4/15/2005 500,000
1,250,000 Trump Atlantic City Associates Funding, Inc. ..............................11.250 5/1/2006 1,031,250
1,167,073 United Artists Theatre Circuit, Inc. ...................................... 9.300 7/1/2015 858,440
-----------------------------------------------
Total Leisure 10,854,640
-----------------------------------------------
Manufacturing-Auto (1.8%)
.........................
1,650,000 Breed Technologies, Inc./5/.................................................9.250 4/15/2008 49,500
1,650,000 Federal-Mogul Corporation...................................................7.875 7/1/2010 1,485,577
1,250,000 Talon Automotive Group LLC..................................................9.625 5/1/2008 1,012,500
-----------------------------------------------
Total Manufacturing-Auto 2,547,577
-----------------------------------------------
Media (1.9%)
............
1,250,000 Spanish Broadcasting System, Inc. ......................................... 9.625 11/1/2009 1,256,250
1,000,000 United Pan-Europe Communications/2/........................................11.250 11/1/2009 992,500
500,000 United Pan-Europe Communications/2/........................................10.875 11/1/2007 503,125
-----------------------------------------------
Total Media 2,751,875
-----------------------------------------------
Media-Broadcasting (1.4%)
.........................
2,000,000 Chancellor Media Corporation................................................8.000 11/1/2008 1,975,000
-----------------------------------------------
Total Media-Broadcasting 1,975,000
-----------------------------------------------
Media-Cable (6.6%)
..................
2,500,000 Century Communications Corporation..........................................8.750 10/1/2007 2,400,000
2,500,000 Charter Communication Holdings LLC..........................................8.625 4/1/2009 2,362,500
1,650,000 Comcast Cable Communications, Inc. .........................................6.200 11/15/2008 1,519,464
3,500,000 CSC Holdings, Inc. .........................................................7.875 2/15/2018 3,298,750
-----------------------------------------------
Total Media-Cable 9,580,714
-----------------------------------------------
Metals-Diversified (2.9%)
.........................
1,500,000 Algoma Steel Corporation...................................................12.375 7/15/2005 1,290,000
1,650,000 Oglebay Norton Company.....................................................10.000 2/1/2009 1,592,250
1,650,000 Sheffield Steel Corporation................................................11.500 12/1/2005 1,357,125
-----------------------------------------------
Total Metals-Diversified 4,239,375
-----------------------------------------------
Miscellaneous Manufacturing (7.2%)
..................................
1,650,000 BGF Industries, Inc. ......................................................10.250 1/15/2009 1,336,500
1,650,000 Global Imaging Systems, Inc................................................10.750 2/15/2007 1,592,250
1,500,000 High Voltage Engineering Corporation.......................................10.500 8/15/2004 1,380,000
1,000,000 IMPAC Group, Inc. .........................................................10.125 3/15/2008 900,000
2,000,000 Indesco International, Inc. ............................................... 9.750 4/15/2008 1,000,000
1,850,000 Morris Materials Handling Corporation...................................... 9.500 4/1/2008 610,500
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
50 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL High Yield Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Long-term Fixed-Income Investments (92.8%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<C> <S> <C> <C> <C>
Miscellaneous Manufacturing (7.2%) - continued
$ 1,750,000 Paragon Corporate Holdings, Inc.......................................... 9.625% 4/1/2008 $577,500
1,250,000 RBX Corporation ......................................................... 12.000 1/15/2003 975,000
1,250,000 Russell-Stanley Holdings, Inc............................................ 10.875 2/15/2009 1,137,500
1,250,000 W.R. Carpenter North America, Inc........................................ 10.625 6/15/2007 925,000
-----------------------------------------------
Total Miscellaneous Manufacturing 10,434,250
-----------------------------------------------
Pollution Control (3.0%)
2,500,000 Allied Waste, Inc. North America......................................... 7.875 1/1/2009 2,100,000
2,000,000 Envirosource, Inc. ...................................................... 9.750 6/15/2003 1,200,000
1,190,000 HydroChem Industrial Services, Inc....................................... 10.375 8/1/2007 1,035,300
-----------------------------------------------
Total Pollution Control 4,335,300
-----------------------------------------------
Restaurants/Food Services (2.9%)
1,250,000 American Restaurant Group, Inc........................................... 11.500 2/15/2003 1,046,875
1,000,000 AmeriServe Finance Trust/2/ ............................................. 12.000 9/15/2006 880,000
2,000,000 AmeriServe Food Distribution, Inc........................................ 8.875 10/15/2006 1,300,000
1,000,000 Tricon Global Restaurants, Inc........................................... 7.650 5/15/2008 959,294
-----------------------------------------------
Total Restaurants/Food Services 4,186,169
-----------------------------------------------
Retail Stores (1.9%)
750,000 Brown Shoe Company, Inc.................................................. 9.500 10/15/2006 750,000
1,250,000 Just For Feet, Inc./2 5/................................................. 11.000 5/1/2009 150,000
1,500,000 The Pantry, Inc. ........................................................ 10.250 10/15/2007 1,425,000
1,250,000 Vista Eyecare, Inc....................................................... 12.750 10/15/2005 400,000
-----------------------------------------------
Total Retail Stores 2,725,000
-----------------------------------------------
Technology (2.8%)
1,650,000 Amkor Technologies, Inc./2/.............................................. 10.500 5/1/2009 1,579,875
1,250,000 Amkor Technologies, Inc./2/.............................................. 9.250 5/1/2006 1,212,500
1,500,000 Viasystems Group, Inc. .................................................. 9.750 6/1/2007 1,200,000
-----------------------------------------------
Total Technology 3,992,375
-----------------------------------------------
Telecommunications (12.1%)
1,500,000 Alestra SA de R.L. de C.V./2/............................................ 12.125 5/15/2006 1,455,000
2,500,000 Call-Net Enterprises, Inc................................................ 9.375 5/15/2009 2,275,000
1,250,000 GlobeNet Communications Group, Ltd./2/................................... 13.000 7/15/2007 1,250,000
1,250,000 Iridium Capital Corporation/5/........................................... 11.250 7/15/2005 75,000
1,650,000 Level 3 Communications, Inc.............................................. 9.125 5/1/2008 1,538,625
2,000,000 Metrocall, Inc........................................................... 11.000 9/15/2008 1,220,000
1,650,000 PSINet, Inc. ............................................................ 10.000 2/15/2005 1,612,875
1,250,000 Pac-West Telecommunications, Inc......................................... 13.500 2/1/2009 1,271,875
1,250,000 Paging Network, Inc...................................................... 10.000 10/15/2008 375,000
1,000,000 Primus Telecommunications Group, Inc./2/................................. 12.750 10/15/2009 987,500
1,500,000 Primus Telecommunications Group, Inc..................................... 11.250 1/15/2009 1,395,000
2,000,000 Spectrasite Holdings, Inc................................................ 0.000 4/15/2009 1,040,000
500 Unifi Communications, Inc. (Warrants)*................................... 5
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 51
<PAGE>
The AAL High Yield Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Long-Term Fixed-Income Investments (92.8%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<C> <S> <C> <C> <C>
Telecommunications (12.1%) - continued
$ 1,000,000 USA Mobile Communications, Inc........................................... 9.500% 2/1/2004 $760,000
1,000,000 Williams Communications Group............................................ 10.700 10/1/2007 1,031,250
1,250,000 Worldwide Fiber, Inc./2/ ................................................ 12.000 8/1/2009 1,250,000
----------------------------------------------------
Total Telecommunications 17,537,130
----------------------------------------------------
Textiles (1.7%)
1,650,000 Anvil Knitwear, Inc...................................................... 10.875 3/15/2007 1,076,625
1,650,000 Galey & Lord, Inc........................................................ 9.125 3/1/2008 404,250
1,650,000 Ntex, Inc. .............................................................. 11.500 6/1/2006 990,000
----------------------------------------------------
Total Textiles 2,470,875
----------------------------------------------------
Transportation (1.9%)
1,000,000 Allied Holdings, Inc. ................................................... 8.625 10/1/2007 860,000
1,250,000 Petro Stopping Centers, L.P.............................................. 10.500 2/1/2007 1,200,000
1,000,000 Transportation Maritima Mexicana S.A. de C.V............................. 10.000 11/15/2006 732,500
----------------------------------------------------
Total Transportation 2,792,500
----------------------------------------------------
Utilities (2.6%)
2,500,000 CMS Energy Corporation................................................... 7.500 1/15/2009 2,298,307
1,500,000 Calpine Corporation ..................................................... 7.625 4/15/2006 1,415,625
----------------------------------------------------
Total Utilities 3,713,932
----------------------------------------------------
----------------------------------------------------
Total Long-Term Fixed-Income Investments
(amortized cost basis $165,400,145) 134,401,155
----------------------------------------------------
Short-Term Investments (4.5%)/1/
===============================================================
2,470,000 Coca-Cola Company/6/..................................................... 5.230 11/24/99 2,461,029
4,062,000 Merrill Lynch & Company, Inc........................................ 5.280-5.300 11/1-11/29/99 4,051,416
----------------------------------------------------
Total Short-Term Investments
(amortized cost basis $6,512,445) 6,512,445
----------------------------------------------------
----------------------------------------------------
TOTAL INVESTMENTS (97.3%)
(amortized cost basis $171,912,590) 140,913,600
----------------------------------------------------
----------------------------------------------------
Other Assets, Less Liabilities (2.7%) 3,836,353
----------------------------------------------------
----------------------------------------------------
Total Net Assets (100.0%) $144,749,953
----------------------------------------------------
</TABLE>
* Non income-producing security
/1/ The interest rate reflects the discount rate at the date of purchase
/2/ 144A security
/5/ Security in default
/6/ 4(2) Commercial paper
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are an integral part of this
schedule.
52 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Municipal Bond Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective
The Fund seeks a high level of current income exempt from federal income taxes,
consistent with capital preservation by investing primarily in a diversified
portfolio of municipal securities.
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Alabama (1.5%)
$ 1,000,000 Birmingham, Alabama General Obligation Bonds
(Series A)................................................................. 5.900% 6/1/2018 $1,005,000
2,150,000 Jefferson County, Alabama Sewer Revenue Bonds
(Series A) (FGIC Insured).................................................. 5.750 2/1/2038 2,023,687
4,000,000 Lauderdale County and Florence, Alabama Health
Care Authority General Obligation Bonds
(Coffee Health Group) (Series A) (MBIA Insured)............................ 5.375 7/1/2029 3,585,000
1,000,000 Lauderdale County and Florence, Alabama Health
Care Authority Revenue Bonds (Coffee Health Group)
(Series A) (MBIA Insured).................................................. 5.250 7/1/2024 888,750
-----------------------------------------------
Total Alabama 7,502,437
-----------------------------------------------
Alaska (1.7%)
2,130,000 Alaska Industrial Development Authority Power
Revenue Bonds (Snettisham Hydroelectric Project)
(1st Series) (AMBAC Insured) (Subject to `AMT')............................ 6.000 1/1/2014 2,137,988
2,260,000 Alaska Industrial Development Authority Power
Revenue Bonds (Snettisham Hydroelectric Project)
(1st Series) (AMBAC Insured) (Subject to `AMT')............................ 6.000 1/1/2015 2,254,350
4,500,000 Alaska State Housing Finance Corporation Revenue
Bonds (Series A) (MBIA Insured)............................................ 6.000 6/1/2049 4,224,375
-----------------------------------------------
Total Alaska 8,616,713
-----------------------------------------------
Arizona (2.0%)
1,000,000 Arizona Acquisition Authority Student Loan Revenue
Bonds (Series A-1) (Subject to `AMT')...................................... 5.900 5/1/2019 980,000
1,000,000 Arizona Acquisition Authority Student Loan Revenue
Bonds (Series B-1) (Subject to `AMT')...................................... 6.150 5/1/2029 981,250
500,000 Mesa, Arizona Industrial Development Authority
Revenue Bonds (Discovery Health Systems) (Series A)........................ 5.625 1/1/2029 472,500
7,715,000 Navajo County, Arizona Pollution Control Corporation
Revenue Bonds (Series A) (MBIA/IBC Insured)/4/............................. 5.875 8/15/2028 7,637,850
-----------------------------------------------
Total Arizona 10,071,600
-----------------------------------------------
Arkansas (0.3%)
1,300,000 Arkansas State Development Finance Authority
Single Family Mortgage Revenue Bonds (Series F)
(Subject to `AMT') (GNMA Insured)........................................... 7.450 1/1/2027 1,391,000
-----------------------------------------------
Total Arkansas 1,391,000
-----------------------------------------------
California (11.9%)
1,000,000 Alpine, California Unified School District Capital
Appreciation General Obligation Bonds
(Series B) (FSA Insured).................................................... 0.000 8/1/2024 221,250
1,200,000 Alta Loma, California School District Capital
Appreciation General Obligation Bonds
(Series A) (FGIC Insured)................................................... 0.000 8/1/2019 361,500
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 53
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
California (11.9%) - continued
$ 1,220,000 Alta Loma, California School District Capital
Appreciation General Obligation Bonds
(Series A) (FGIC Insured).................................................. 0.000% 8/1/2015 $484,950
2,220,000 Benicia, California Unified School District General
Obligation Bonds (Series A) (FGIC Insured)................................. 0.000 8/1/2022 552,225
1,015,000 California Rural Home Mortgage Finance Authority
Single Family Mortgage Revenue Bonds (Series A-3)
(GNMA/FHLMC/FNMA Insured) (Subject to `AMT')............................... 7.250 12/1/2024 1,100,006
4,855,000 Contra Costa County, California Home Mortgage
Revenue Bonds (Escrowed to Maturity)....................................... 7.500 5/1/2014 5,795,656
10,135,000 Foothill/Eastern Transportation California Toll Road
Revenue Bonds (Series A)................................................... 5.000 1/1/2035 8,057,325
7,145,000 Foothill/Eastern Transportation California Toll Road
Revenue Bonds (Series A)................................................... 0.000 1/1/2014 5,966,075
6,000,000 Foothill/Eastern Transportation California Toll Road
Revenue Bonds (Series A)................................................... 0.000 1/1/2013 5,010,000
605,000 Foothill/Eastern Transportation California Toll Road
Revenue Bonds (Series A)................................................... 0.000 1/1/2012 504,419
5,000,000 Foothill/Eastern Transportation California Toll Road
Revenue Bonds (Series A)................................................... 0.000 1/1/2011 4,168,750
5,000,000 Foothill/Eastern Transportation California Toll Road
Revenue Bonds (Series A)................................................... 0.000 1/1/2010 4,043,750
5,000,000 Foothill/Eastern Transportation California Toll Road
Revenue Bonds (Series A)................................................... 0.000 1/1/2009 4,018,750
1,335,000 Foothill/Eastern Transportation California Toll Road
Revenue Bonds (Series A)................................................... 0.000 1/1/2005 1,034,625
4,200,000 Fresno, California Sewer Revenue Bonds
(Series A-1) (AMBAC Insured)............................................... 6.250 9/1/2014 4,515,000
3,500,000 Orange County, California Transit Authority Sales Tax
Revenue Bonds (Series M) (MBIA Insured).................................... 6.000 2/15/2009 3,749,375
4,200,000 Pomona, California Single Family Housing Revenue
Bonds (Escrowed to Maturity)............................................... 7.600 5/1/2023 5,013,750
2,000,000 San Bernardino County, California Single Family
Mortgage Revenue Bonds (Series A-1) Insured)............................... 5.000 12/1/2031 2,042,500
1,910,000 San Jose, California Unified School District Capital
Appreciation General Obligation Bonds
(Santa Clara County) (Series C) (FGIC Insured)/3/.......................... 0.000 8/1/2020 520,475
1,640,000 Saratoga, California United School District Capital
Appreciation General Obligation Bonds
(Series B) (MBIA Insured).................................................. 0.000 3/1/2024 373,100
1,500,000 Saratoga, California United School District Capital
Appreciation General Obligation Bonds
(Series B) (MBIA Insured).................................................. 0.000 9/1/2023 352,500
3,600,000 Tahoe-Truckee California Unified School
District #1-A Capital Appreciation General
Obligation Bonds (FGIC Insured)............................................ 0.000 8/1/2022 904,500
-----------------------------------------------
Total California 58,790,481
-----------------------------------------------
Colorado (1.2%)
1,000,000 Dawson Ridge Metropolitan District #1, Colorado
General Obligation Bonds (Series A)
(Escrowed to Maturity)..................................................... 0.000 10/1/2012 441,250
760,000 Dawson Ridge Metropolitan District #1,
Colorado General Obligation Bonds (Series B)
(Escrowed to Maturity)..................................................... 0.000 10/1/2012 335,350
1,000,000 Denver, Colorado Health and Hospital Revenue
Bonds (Series A)........................................................... 5.150 12/1/2011 907,500
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
54 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Colorado (1.2%) - continued
$ 4,500,000 E-470 Public Highway Authority Colorado
Capital Appreciation Revenue Bonds (Series B)
(MBIA Insured)............................................................. 0.000% 9/1/2022 $1,130,625
1,000,000 Jefferson County, Colorado School District #R-001
General Obligation Bonds (Series A) (FGIC Insured)......................... 5.000 12/15/2017 893,750
2,000,000 Mesa County, Colorado Residual Revenue Bonds
(Escrowed to Maturity)..................................................... 0.000 12/1/2011 1,007,500
1,250,000 University of Colorado Hospital Authority Revenue
Bonds (Series A) (AMBAC Insured)........................................... 5.000 11/15/2029 1,053,125
-----------------------------------------------
Total Colorado 5,769,100
-----------------------------------------------
Florida (2.5%)
3,000,000 Escambia County, Florida Health Facilities Authority
Revenue Bonds (Ascension Health Credit)
(Series A-1) (AMBAC Insured)/3/............................................ 5.750 11/15/2029 2,891,250
2,860,000 Florida Housing Finance Corporation Revenue Bonds
(Sunset Place) (Series K-1)................................................ 6.100 10/1/2029 2,763,475
1,670,000 Manatee County, Florida Housing Finance Authority
Single Family Revenue Bonds (Series 1)
(GNMA Insured) (Subject to `AMT').......................................... 7.200 5/1/2028 1,803,600
2,000,000 Orange County, Florida Health Facilities Authority
Revenue Bonds (Orlando Regional Healthcare Project)
(Series A) (MBIA Insured).................................................. 6.250 10/1/2018 2,087,500
1,100,000 Orange County, Florida Health Facilities Authority
Revenue Bonds (Mayflower Retirement Project)
(Asset Guaranteed)......................................................... 5.250 6/1/2019 995,500
1,845,000 Tampa Bay, Florida Water Utility Systems Revenue Bonds
(FGIC Insured)............................................................. 5.000 10/1/2011 1,787,344
-----------------------------------------------
Total Florida 12,328,669
-----------------------------------------------
Georgia (1.1%)
2,000,000 Baldwin County, Georgia Hospital Authority Revenue
Bonds (Oconee Regional Medical Center)..................................... 5.250 12/1/2022 1,660,000
4,000,000 Georgia Municipal Electric Authority Power Revenue
Refunding Bonds (Series Z) (FGIC Insured).................................. 5.500 1/1/2012 3,985,000
-----------------------------------------------
Total Georgia 5,645,000
-----------------------------------------------
Illinois (14.2%)
2,270,000 Bolingbrook, Illinois Capital Appreciation General
Obligation Bonds (Series B) (MBIA Insured)................................. 0.000 1/1/2012 1,135,000
1,000,000 Broadview, Illinois Tax Increment Revenue Bonds............................ 5.375 7/1/2015 902,500
2,000,000 Broadview, Illinois Tax Increment Revenue Bonds............................ 5.250 7/1/2012 1,865,000
3,500,000 Chicago, Illinois Board of Education Capital
Appreciation General Obligation Bonds (Chicago
School Reform Project) (Series A) (FGIC Insured)........................... 0.000 12/1/2014 1,404,375
2,770,000 Chicago, Illinois O'Hare International Airport Special
Facilities Revenue Bonds (United Airlines Project)
(Series A)................................................................. 5.350 9/1/2016 2,420,288
1,980,000 Chicago, Illinois Single Family Mortgage Revenue
Bonds (GNMA Insured) (Subject to `AMT').................................... 7.250 9/1/2028 2,108,700
6,500,000 Chicago, Illinois Single Family Mortgage Revenue
Bonds (Series C-1999) (GNMA/FNMA/FHLMC
Insured) (Subject to `AMT')................................................ 7.050 10/1/2030 7,020,000
1,815,000 Cook County, Illinois School District #99 - Cicero
General Obligation Bonds (FGIC Insured).................................... 8.500 12/1/2016 2,305,050
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 55
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Illinois (14.2%) - continued
$ 1,565,000 Cook County, Illinois School District #99 - Cicero
General Obligation Bonds (FGIC Insured).................................... 8.500% 12/1/2014 $1,979,725
1,250,000 Cook County, Illinois School District #99 - Cicero
General Obligation Bonds (FGIC Insured).................................... 8.500 12/1/2011 1,578,125
880,000 Cook County, Illinois School District #99 - Cicero
Obligation Bonds (FGIC Insured)............................................ 8.500 12/1/2006 1,056,000
765,000 Cook County, Illinois School District #100
General Obligation Bonds
(Berwyn South Project) (FSA Insured)....................................... 8.200 12/1/2009 933,300
2,250,000 Cook County, Illinois General Obligation Bonds
(Series B) (FGIC Insured).................................................. 5.500 11/15/2022 2,064,375
3,960,000 Cook County, Illinois General Obligation Bonds
(Series B) (MBIA Insured).................................................. 5.125 11/15/2017 3,534,300
2,620,000 Du Page County, Illinois General Obligation
Bonds (Stormwater Project)................................................. 5.600 1/1/2021 2,508,650
9,400,000 Hoffman Estates, Illinois Tax Increment Jr. Lien
Capital Appreciation Revenue Bonds......................................... 0.000 5/15/2003 7,813,750
1,000,000 Illinois Development Finance Authority Revenue
Bonds (Bradley University Project)
(AMBAC Insured)............................................................ 5.375 8/1/2024 907,500
950,000 Illinois Development Finance Authority Revenue
Bonds (Letter of Credit Government Program)
(Series A) (MBIA Insured).................................................. 0.000 1/1/2011 502,312
4,900,000 Illinois Educational Facilities Authority Revenue
Bonds (Medical Term-Northwestern University)............................... 5.250 11/1/2032 4,648,875
2,500,000 Illinois Educational Facilities Authority Revenue
Bonds (Northwestern University)............................................ 5.250 11/1/2032 2,390,625
225,000 Illinois Regional Transit Authority Revenue Bonds
(Series 94-D) (FGIC Insured)............................................... 7.100 6/1/2025 250,875
635,000 Illinois Regional Transit Authority Revenue Bonds
(Series A) (AMBAC Insured)................................................. 6.250 6/1/2024 685,800
3,000,000 Illinois Regional Transit Authority Revenue Bonds
(Series A) (FGIC Insured).................................................. 6.700 11/1/2021 3,232,500
2,855,000 McHenry County, Illinois Community School
District #047 Crystal Lake General Obligation
Bonds (FSA Insured)........................................................ 6.000 2/1/2015 2,879,981
10,650,000 Metropolitan Pier and Exposition Authority Illinois
Hospitality Facilities Revenue Bonds (McCormick
Place Convention Center Project)/4/........................................ 7.000 7/1/2026 12,007,875
1,600,000 Southwestern Illinois Development Authority
Revenue Bonds (Anderson Hospital Project).................................. 5.500 8/15/2020 1,386,000
2,500,000 Winnebago County, Illinois School District #122
Capital Appreciation General Obligation Bonds
(Harlem-Loves Park Project) (FSA Insured).................................. 0.000 1/1/2016 918,750
-----------------------------------------------
Total Illinois 70,440,231
-----------------------------------------------
Indiana (2.2%)
2,000,000 Indiana State Development Finance Environmental
Authority Revenue Bonds (USX Corporate Project)............................ 6.250 7/15/2030 1,892,500
4,550,000 Indiana Transportation Finance Authority Revenue
Bonds (MBIA Insured)....................................................... 7.250 6/1/2015 5,255,250
1,500,000 Indianapolis, Indiana Local Public Improvement
Revenue Bonds (Series E)................................................... 5.750 2/1/2029 1,410,000
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
56 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Indiana (2.2%) - continued
$ 2,000,000 Lawrence Township, Indiana Metropolitan School
District General Obligation Bonds.......................................... 6.875% 7/5/2011 $2,222,500
-----------------------------------------------
Total Indiana 10,780,250
-----------------------------------------------
Iowa (0.4%)
855,000 Iowa Financial Authority Revenue Bonds
(Mercy Health System) (Series V)........................................... 5.250 8/15/2027 759,881
1,100,000 Keokuk, Iowa Hospital Facilities Revenue Refunding
Bonds (Keokuk Area Hospital Project)....................................... 5.400 12/1/2015 970,750
-----------------------------------------------
Total Iowa 1,730,631
-----------------------------------------------
Kansas (0.1%)
510,000 Labette County, Kansas Single Family Revenue
Bonds (Series A-2) (GNMA Insured).......................................... 7.650 12/1/2011 535,500
-----------------------------------------------
Total Kansas 535,500
-----------------------------------------------
Kentucky (2.4%)
2,615,000 Florence, Kentucky Housing Facilities Revenue
Bonds (Bluegrass Housing, Inc. Project)
(ACA Insured).............................................................. 6.300 8/15/2019 2,598,656
7,950,000 Jefferson County, Kentucky Health Facilities
Revenue Bonds (MBIA Insured)............................................... 5.125 10/1/2027 6,856,875
2,500,000 Kentucky State Property and Buildings Community
Revenue Bonds (Project #64) (MBIA Insured)................................. 5.375 5/1/2016 2,387,500
-----------------------------------------------
Total Kentucky 11,843,031
-----------------------------------------------
Louisiana (0.2%)
1,090,000 Lafayette, Louisiana Public Special Import Sales Tax
(Series B) (FGIC Insured).................................................. 5.600 3/1/2018 1,042,313
-----------------------------------------------
Total Louisiana 1,042,313
-----------------------------------------------
Massachusetts (1.4%)
2,010,000 Massachusetts State Development Finance Agency
Revenue Bonds (Northern Berkshire Community
Services, Inc.) (Series A) (ACA Insured)................................... 6.250 8/15/2019 1,952,213
2,000,000 Massachusetts State Health and Educational
Facilities Authority Revenue Bonds
(Milford-Whittinsville Project) (Series C)................................. 5.750 7/15/2013 1,832,500
3,000,000 Massachusetts State Turnpike Authority
Metropolitan Highway System Revenue Bonds
(Series A) (MBIA Insured).................................................. 5.000 1/1/2027 2,546,250
500,000 Massachusetts State Turnpike Authority Revenue
Bonds (Series A) (FGIC Insured)............................................ 5.125 1/1/2023 466,875
-----------------------------------------------
Total Massachusetts 6,797,838
-----------------------------------------------
Michigan (4.6%)
2,500,000 Comstock Park, Michigan Public Schools General
Obligation Bonds (FSA/Q-SBLF Insured)...................................... 5.500 5/1/2021 2,343,750
2,195,000 Detroit, Michigan City School District General
Obligation Bonds (Series B) (FGIC Insured)................................. 5.000 5/1/2017 1,964,525
2,000,000 Dickinson County, Michigan Healthcare Systems
Hospital Revenue Bonds..................................................... 5.700 11/1/2018 1,765,000
2,500,000 Dickinson County, Michigan Healthcare Systems
Hospital Revenue Bonds..................................................... 5.500 11/1/2013 2,268,750
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 57
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Michigan (4.6%) - continued
$ 1,000,000 Hillsdale, Michigan Hospital Finance Authority
Revenue Bonds (Hillsdale Community
Health Center Project)..................................................... 5.250% 5/15/2026 $763,750
135,000 Hillsdale, Michigan Hospital Finance Authority
Hospital Revenue Bonds (Hillsdale Community
Health Center)............................................................. 4.800 5/15/2005 128,081
260,000 Hillsdale, Michigan Hospital Finance Authority
Hospital Revenue Bonds (Hillsdale Community
Health Center)............................................................. 4.700 5/15/2004 248,625
100,000 Hillsdale, Michigan Hospital Finance Authority
Hospital Revenue Bonds (Hillsdale Community
Health Center)............................................................. 4.600 5/15/2002 97,375
145,000 Hillsdale, Michigan Hospital Finance Authority
Hospital Revenue Bonds (Hillsdale Community
Health Center)............................................................. 4.300 5/15/2000 144,169
3,000,000 John Tolfree Health Systems Corporation,
Michigan Mortgage Revenue Bonds............................................ 6.000 9/15/2023 2,685,000
2,500,000 Michigan Municipal Bond Authority Revenue Bonds
(Clean Water Revolving Fund)............................................... 5.500 10/1/2019 2,375,000
5,500,000 Michigan Public Power Agency Revenue Refunding
Bonds (Belle River Project) (MBIA Insured)................................. 5.000 1/1/2019 4,833,125
2,500,000 Michigan State Hospital Finance Authority Revenue
Bonds (Hackley Hospital Project) (Series A)................................ 5.300 5/1/2013 2,312,500
1,065,000 Wayne County, Michigan Downriver System
Sewer Disposal General Obligation Bonds
(Series B) (MBIA Insured).................................................. 5.125 11/1/2016 978,469
-----------------------------------------------
Total Michigan 22,908,119
-----------------------------------------------
Minnesota (0.8%)
4,000,000 Spring Lake Park, Minnesota Independent School
District #016 General Obligation Bonds
(MBIA Insured)............................................................. 5.250 2/1/2014 3,800,000
-----------------------------------------------
Total Minnesota 3,800,000
-----------------------------------------------
Missouri (1.5%)
2,000,000 Lees Summit, Missouri Industrial Development
Authority Health Facilities Revenue Bonds
(John Knox Village)........................................................ 6.000 8/15/2017 1,910,000
5,220,000 Missouri State Housing Development Community
Single Family Mortgage Revenue Bonds
(Subject to `AMT') (GNMA/FNMA Insured)..................................... 7.300 3/1/2028 5,689,800
-----------------------------------------------
Total Missouri 7,599,800
-----------------------------------------------
Montana (2.4%)
2,005,000 Montana State Health Facilities Authority Health
Care Revenue Bonds (Sidney Health Center)
(ACA Insured).............................................................. 6.250 9/1/2029 1,979,938
10,000,000 Montana State University Revenue Bonds
(Series F) (MBIA Insured)/3/............................................... 5.750 5/15/2024 9,737,500
-----------------------------------------------
Total Montana 11,717,438
-----------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
58 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Nevada (0.7%)
$ 4,000,000 Clark County, Nevada Industrial Development
Revenue Bonds (Nevada Power Company Project)
(Series B) (Subject to `AMT').............................................. 5.900% 10/1/2030 $3,635,000
-----------------------------------------------
Total Nevada 3,635,000
-----------------------------------------------
New Jersey (0.2%)
1,000,000 New Jersey Economic Development Authority
Revenue Bonds (Transportation Sublease Project)
(Series A) (FSA Insured)................................................... 5.250 5/1/2017 936,250
-----------------------------------------------
Total New Jersey 936,250
-----------------------------------------------
New Mexico (2.2%)
2,000,000 Bernalillo County, New Mexico Gross Receipts Tax
Revenue Bonds.............................................................. 5.750 10/1/2016 1,990,000
3,250,000 Bernalillo County, New Mexico Gross Receipts Tax
Revenue Bonds.............................................................. 5.250 10/1/2026 2,937,188
1,000,000 New Mexico Mortgage Finance Authority Single
Family Mortgage Capital Appreciation
Revenue Bonds.............................................................. 0.000 9/1/2019 527,500
3,000,000 New Mexico State Hospital Equipment Council
Hospital Revenue Bonds (Mexico Medical Center, Inc.)....................... 5.500 6/1/2028 2,692,500
2,525,000 New Mexico Mortgage Finance Authority
Revenue Bonds (Series F)................................................... 7.000 1/1/2026 2,768,031
-----------------------------------------------
Total New Mexico 10,915,219
-----------------------------------------------
New York (8.1%)
2,000,000 New York Dormitory Authority State University
Educational Facilities Revenue Bonds (Series A)............................ 7.500 5/15/2013 2,335,000
5,000,000 New York Dormitory Authority State University
Educational Facilities Revenue Bonds (Series A)............................ 5.875 5/15/2017 4,943,750
3,500,000 New York Dormitory Authority State University
Educational Facilities Revenue Bonds (Series A)............................ 5.875 5/15/2011 3,613,750
5,000,000 New York Dormitory Authority State University
Educational Facilities Revenue Bonds (Series B)............................ 5.250 5/15/2019 4,431,250
1,000,000 New York State Dormitory Authority Revenue
Bonds (Good Samaritan Hospital Project)
(Asset Guaranteed)......................................................... 5.500 7/1/2011 997,500
2,445,000 New York State Local Government Assistance
Corporation Revenue Bonds (Series E)
(FSA Insured).............................................................. 5.375 4/1/2019 2,261,625
3,000,000 New York State Local Government Assistance
Corporation Revenue Bonds (Series E)
(MBIA Insured)............................................................. 5.250 4/1/2016 2,827,500
3,000,000 New York State Medical Care Facilities Finance
Agency Revenue Bonds (Mental Health Services
Project) (FSA Insured)..................................................... 5.375 2/15/2014 2,883,750
2,500,000 New York State Tollway Authority Service Contract
Revenue Bonds (Series A-2) (MBIA Insured).................................. 5.000 4/1/2018 2,206,250
2,500,000 Suffolk County, New York Judicial Facilities Service
Agreement Revenue Bonds (John P. Cohalan
Complex) (AMBAC Insured)................................................... 5.000 4/15/2016 2,253,125
1,000,000 Triborough Bridge and Tunnel Authority Revenue
Bonds (General Purpose) (Series B)......................................... 5.375 1/1/2019 923,750
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 59
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<C> <S> <C> <C> <C>
New York (8.1%) - continued
$ 7,060,000 Triborough Bridge and Tunnel Authority Revenue
Bonds (Series B).......................................................... 5.000% 1/1/2020 $6,177,500
5,000,000 Triborough Bridge and Tunnel Authority Revenue
Bonds (Series Q).......................................................... 5.000 1/1/2017 4,418,750
-----------------------------------------------
Total New York 40,273,500
-----------------------------------------------
North Carolina (1.2%)
2,000,000 New Hanover County, North Carolina Hospital
Revenue Bonds (New Hanover Regional
Medical Center Project)................................................... 5.000 10/1/2028 1,700,000
2,385,000 Piedmont Triad Airport Authority North Carolina
Revenue Bonds (Series A) (FSA Insured)/3/................................. 6.375 7/1/2016 2,495,306
1,000,000 Piedmont Triad Airport Authority North Carolina
Revenue Bonds (Series A) (FSA Insured)/3/................................. 6.000 7/1/2024 996,250
1,035,000 Wake County, North Carolina Hospital
Revenue Bonds (MBIA Insured).............................................. 5.125 10/1/2026 945,731
-----------------------------------------------
Total North Carolina 6,137,287
-----------------------------------------------
North Dakota (0.3%)
1,500,000 Oliver County, North Dakota Pollution Control
Revenue Bonds (Square Butte Electric
Cooperative Project) (Series A) (AMBAC Insured) .......................... 5.300 1/1/2027 1,346,250
-----------------------------------------------
Total North Dakota 1,346,250
-----------------------------------------------
Ohio (0.9%)
1,000,000 Hamilton County, Ohio Sales Tax Revenue Bonds
(Hamilton County Football Project) (Series B)
(MBIA Insured)............................................................ 5.000 12/1/2018 881,250
2,575,000 Montgomery County, Ohio Grandview
Hospital and Medical Center Revenue Bonds................................. 5.650 12/1/2012 2,372,219
100,000 Ohio State Higher Education Facilities Revenue
Bonds (Case Western Reserve University Project)........................... 6.000 10/1/2022 102,000
1,000,000 Portage County, Ohio Hospital Revenue Bonds
(Robinson Memorial Hospital) (AMBAC Insured).............................. 5.750 11/15/2019 972,500
-----------------------------------------------
Total Ohio 4,327,969
-----------------------------------------------
Oklahoma (0.7%)
175,000 Tulsa, Oklahoma Industrial Authority Hospital
Revenue Bonds (St. John's Medical Center Project)......................... 6.250 2/15/2017 187,906
100,000 Tulsa, Oklahoma Industrial Authority Hospital
Revenue Bonds (St. John's Medical Center Project)......................... 6.250 2/15/2014 107,375
675,000 Tulsa, Oklahoma Industrial Authority Educational
Facilities Revenue Bonds (Holland Hall
School Project) (Series A)................................................ 5.250 12/1/2019 599,906
2,970,000 Tulsa, Oklahoma Industrial Authority Educational
Facilities Revenue Bonds (Holland Hall
School Project) (Series B)................................................ 5.000 12/1/2014 2,691,563
-----------------------------------------------
Total Oklahoma 3,586,750
-----------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
60 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Pennsylvania (0.7%)
$ 200,000 Pennsylvania State Higher Education Facilities
Authority Health Services Revenue Bonds
(Allegheny, Delaware Project) (Obligation A)
(MBIA Insured)............................................................. 4.900% 11/15/2001 $200,000
1,400,000 Philadelphia, Pennsylvania Gas Works Revenue
Bonds (Series A) (FSA Insured)............................................. 5.375 7/1/2013 1,366,750
2,540,000 Philadelphia, Pennsylvania Hospital and Higher
Education Facilities Authority Revenue Bonds
(Children's Hospital Project) (Series A)................................... 5.000 2/15/2021 2,130,425
-----------------------------------------------
Total Pennsylvania 3,697,175
-----------------------------------------------
South Carolina (1.9%)
2,000,000 Loris, South Carolina Community Hospital
District Revenue Bonds (Series B).......................................... 5.625 1/1/2020 1,735,000
1,250,000 Loris, South Carolina Community Hospital
District Revenue Bonds (Series A).......................................... 5.500 1/1/2016 1,101,563
3,805,000 South Carolina Jobs Economic Development
Authority Hospital Facilities Revenue Bonds
(Georgetown Memorial Hospital)
(AMBAC Insured)............................................................ 5.875 11/1/2029 3,657,556
1,250,000 South Carolina Jobs Economic Development
Authority Hospital Facilities Revenue Bonds
(Georgetown Memorial Hospital)
(AMBAC Insured)............................................................ 5.500 11/1/2016 1,190,625
2,080,000 South Carolina Jobs Economic Development
Authority Hospital Facilities Revenue Bonds
(Georgetown Memorial Hospital)
(AMBAC Insured)............................................................ 5.000 11/1/2023 1,768,000
-----------------------------------------------
Total South Carolina 9,452,744
-----------------------------------------------
Tennessee (2.2%)
1,000,000 Franklin, Tennessee Special School District
General Obligation Bonds (FSA Insured)..................................... 0.000 6/1/2017 342,500
3,240,000 Franklin, Tennessee Special School District
General Obligation Bonds (FSA Insured)..................................... 0.000 6/1/2015 1,275,750
1,500,000 Metropolitan Government Nashville and
Davidson County Tennessee Health and
Educational Facilities Revenue Bonds (Series A)
(AMBAC Insured)/3/......................................................... 5.875 11/15/2028 1,458,750
9,000,000 Shelby County, Tennessee Health Education and
Housing Facilities Board Revenue Bonds
(St. Jude's Children's Research Project)/4/................................ 5.375 7/1/2029 7,965,000
-----------------------------------------------
Total Tennessee 11,042,000
-----------------------------------------------
Texas (11.8%)
1,970,000 Brazos River Authority, Texas Revenue Bonds
(Houston Industries, Inc.) (Project A)..................................... 5.125 5/1/2019 1,740,988
1,420,000 Carroll, Texas Independent School District Capital
Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 2/15/2013 654,975
1,365,000 Carroll, Texas Independent School District Capital
Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 2/15/2012 658,612
1,845,000 Cleburne, Texas Capital Appreciation General
Obligation Bonds (FSA Insured)............................................. 0.000 2/15/2016 691,875
5,930,000 Crowley, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured)................................. 5.125 8/1/2025 5,173,925
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 61
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<C> <S> <C> <C> <C>
Texas (11.8%) - continued
$ 2,870,000 Frisco, Texas Independent School District
Capital Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000% 8/15/2024 $631,400
2,625,000 Granbury, Texas Independent School District
Capital Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 8/1/2014 1,109,062
2,625,000 Granbury, Texas Independent School District
Capital Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 8/1/2015 1,040,156
2,500,000 Harris County, Texas Health Facilities Development
Corporation Revenue Bonds (Christus Health
Project) (Series A) (MBIA Insured)......................................... 5.375 7/1/2029 2,243,750
2,365,000 Houston, Texas Independent School District General
Obligation Bonds (Series A) (PSF/GTD Insured).............................. 5.000 2/15/2024 2,030,944
1,100,000 Houston, Texas Water and Sewer System
Revenue Bonds (Series D) (MBIA Insured)/3/................................. 6.125 12/1/2029 1,094,500
3,810,000 Lamar, Texas Independent School District General
Obligation Bonds (PSF/GTD Insured)......................................... 5.375 2/15/2020 3,467,100
5,270,000 Leander, Texas Independent School District
Capital Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 8/15/2017 1,785,213
4,855,000 Leander, Texas Independent School District
Capital Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 8/15/2016 1,766,006
4,935,000 Leander, Texas Independent School District
Capital Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 8/15/2015 1,918,481
3,010,000 Midlothian, Texas Independent School District
Capital Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 2/15/2019 884,187
1,510,000 Midlothian, Texas Independent School District
Capital Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 2/15/2018 473,763
1,760,000 Parker County, Texas Hospital District Revenue
Bonds (Campbell Health Systems)............................................ 6.250 8/15/2019 1,641,200
4,260,000 Rockwall, Texas Independent School District
Capital Appreciation General Obligation Bonds
(PSF/GTD Insured).......................................................... 0.000 8/15/2015 1,656,075
7,000,000 San Antonio, Texas Independent School District General
Obligation Bonds (PSF/GTD Insured)/4/...................................... 5.500 8/15/2024 6,571,250
1,275,000 South San Antonio, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured)................................. 6.000 8/15/2019 1,281,375
1,250,000 South San Antonio, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured)/4/.............................. 6.000 8/15/2018 1,257,813
1,180,000 South San Antonio, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured)................................. 6.000 8/15/2017 1,190,325
2,000,000 Travis County, Texas Health Facilities Development
Corporation Revenue Bonds (Ascension Health
Credit) (Series A) (MBIA Insured)/3/....................................... 6.250 11/15/2017 2,040,000
2,810,000 Victoria County, Texas Hospital Revenue Bonds
(Citizens Medical Center Project).......................................... 5.500 2/15/2019 2,423,625
1,465,000 Victoria County, Texas Hospital Revenue Bonds
(Citizens Medical Center Project).......................................... 5.500 2/15/2015 1,305,681
1,320,000 Victoria County, Texas Hospital Revenue Bonds
(Citizens Medical Center Project).......................................... 5.400 2/15/2013 1,194,600
2,090,000 Wylie, Texas Independent School District Capital
Appreciation General Obligation Bonds
(Collin County Project) (PSF/GTD Insured).................................. 0.000 8/15/2020 577,363
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
62 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
Texas (11.8%) - continued
$ 3,770,000 Wylie, Texas Independent School District Prerefunded
General Obligation Bonds (PSF Guaranteed).................................. 7.000% 8/15/2024 $4,316,650
1,800,000 Wylie, Texas Independent School District Prerefunded
General Obligation Bonds (PSF/GTD Insured)................................. 7.000 8/15/2024 2,061,000
3,280,000 Wylie, Texas Independent School District Unrefunded
Balance General Obligation Bonds (PSF/GTD Insured)......................... 7.000 8/15/2024 3,616,200
-----------------------------------------------
Total Texas 58,498,094
-----------------------------------------------
Utah (1.1%)
5,360,000 Intermountain Power Agency Special Obligation
Revenue Bonds (Series A) (MBIA Insured).................................... 5.000 7/1/2021 4,616,300
715,000 Intermountain Power Agency Utah Power Supply
Revenue Bonds (Series B) (MBIA/IBC Insured)................................ 5.000 7/1/2016 639,031
-----------------------------------------------
Total Utah 5,255,331
-----------------------------------------------
Vermont (0.3%)
1,250,000 Vermont Health and Educational Buildings Finance
Agency Revenue Bonds (Northwestern Medical
Center Project) (Series A)................................................. 6.000 9/1/2006 1,242,188
-----------------------------------------------
Total Vermont 1,242,188
-----------------------------------------------
Virginia (0.5%)
3,000,000 Fairfax County, Virginia Industrial Development
Authority Revenue Bonds (Inova Health
Systems Project)........................................................... 5.250 8/15/2019 2,673,750
-----------------------------------------------
Total Virginia 2,673,750
-----------------------------------------------
Washington (6.0%)
2,000,000 King County, Washington Public Hospital
District #001 Facilities Revenue Bonds
(Valley Medical Center) (AMBAC Insured).................................... 5.750 9/1/2020 1,937,500
2,275,000 Pierce County, Washington School District
General Obligation Bonds (AMBAC Insured)................................... 5.450 12/1/2013 2,246,563
4,500,000 Quinault Indian Nation, Washington Revenue Bonds
(Quinault Beach Project) (Series A) (ACA Insured)4......................... 5.800 12/1/2015 4,241,250
2,000,000 Seattle, Washington Drain and Wastewater Utility
Revenue Bonds (MBIA Insured)............................................... 5.750 11/1/2022 1,922,500
5,000,000 Washington State General Obligation Bonds
(Series A)................................................................. 6.750 2/1/2015 5,487,500
3,625,000 Washington State Health Care Facilities Authority
Revenue Bonds (Swedish Health Systems)
(AMBAC Insured)............................................................ 5.125 11/15/2022 3,153,750
10,000,000 Washington State Public Power Supply Systems
Revenue Refunding Bonds (Nuclear Project #2)
(Series A)................................................................. 6.000 7/1/2007 10,487,500
-----------------------------------------------
Total Washington 29,476,563
-----------------------------------------------
Wisconsin (4.1%)
1,520,000 Kimberly, Wisconsin Area School District General
Obligation Bonds (FGIC Insured)............................................ 5.700 3/1/2019 1,470,600
3,950,000 Wisconsin State General Obligation Bonds
(Series C)/3/.............................................................. 6.000 5/1/2020 3,954,937
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 63
<PAGE>
The AAL Municipal Bond Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Municipal Bond Investments (97.3%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<C> <S> <C> <C> <C>
Wisconsin (4.1%) - continued
$ 1,000,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Children's Hospital
Project) (AMBAC Insured)................................................... 5.625% 2/15/2015 $981,250
5,710,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Howard Young
Medical Center, Inc. Project).............................................. 5.125 8/15/2028 4,518,037
2,090,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Kenosha Hospital and
Medical Center Project).................................................... 5.625 5/15/2029 1,813,075
1,845,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Lawrence
University Project)........................................................ 5.000 10/15/2013 1,702,012
3,250,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Mercy Health System
Corporation) (AMBAC Insured)............................................... 5.375 8/15/2019 2,994,063
2,710,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Mercy Hospital of
Janesville, Inc.).......................................................... 6.600 8/15/2022 2,754,038
--------------------------------------------------
Total Wisconsin 20,188,012
--------------------------------------------------
Wyoming (1.1%)
5,785,000 Wyoming State Farm Loan Board Capital
Facilities Revenue Bonds................................................... 5.750 10/1/2020 5,625,912
--------------------------------------------------
Total Wyoming 5,625,912
--------------------------------------------------
United States Territories (0.9%)
1,050,000 District of Columbia, American Association of Homes
and Services Revenue Bonds (ACA Insured)................................... 6.000 7/1/2024 1,004,062
3,750,000 Guam Power Authority Revenue Bonds (Series A)
(MBIA/IBC Insured)......................................................... 5.250 10/1/2034 3,295,313
--------------------------------------------------
Total United States Territories 4,299,375
--------------------------------------------------
--------------------------------------------------
Total Municipal Bond Investments
(amortized cost basis $483,479,536) 481,919,520
--------------------------------------------------
Short-Term Tax-Exempt Variable Rate Investments (1.7%)
======================================================
8,668,992 Citifunds Institutional Tax-Free Reserves............................................................. 8,668,992
--------------------------------------------------
Total Short-Term Tax-Exempt Variable
Rate Investments (cost basis $8,668,992) 8,668,992
--------------------------------------------------
--------------------------------------------------
TOTAL INVESTMENTS (99.0%)
(amortized cost basis $492,148,528) 490,588,512
--------------------------------------------------
--------------------------------------------------
Other Assets, Less Liabilities (1.0%) 4,883,654
--------------------------------------------------
--------------------------------------------------
Net Assets (100%) $495,472,166
--------------------------------------------------
</TABLE>
/3/When-issued security
/4/Pledged as security for when-issued securities.
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are an integral part of this
schedule.
64 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Bond Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective
The Fund seeks a high level of current income, consistent with capital
preservation by investing primarily in a diversified portfolio of investment
grade bonds.
<TABLE>
<CAPTION>
Principal Amount Long-Term Fixed-Income Investments (96.0%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<S> <C> <C> <C> <C>
U.S. Government Agency Investments (14.4%)
$ 13,888,034 Federal National Mortgage Association
15 Yr. Pass Through........................................................ 6.500% 6/1/2013 $13,640,425
18,842,639 Federal National Mortgage Association
15 Yr. Pass Through........................................................ 5.500 1/1/2014 17,761,562
9,821,982 Government National Mortgage Association
15 Yr. Pass Through........................................................ 6.500 3/15/2029 9,390,630
8,487,405 Government National Mortgage Association
30 Yr. Pass Through........................................................ 7.500 8/15/2029 8,514,446
8,553,408 Government National Mortgage Association
30 Yr. Pass Through........................................................ 7.500 10/15/2013 8,690,622
-----------------------------------------------
Total U.S. Government
Agency Investments 57,997,685
-----------------------------------------------
U.S. Government Agency Investments (8.4%)
20,000,000 U.S. Treasury Bonds........................................................ 7.250 5/15/2016 21,556,240
7,500,000 U.S. Treasury Bonds........................................................ 5.250 11/15/2028 6,447,653
6,000,000 U.S. Treasury Notes........................................................ 6.500 10/15/2006 6,106,872
-----------------------------------------------
Total U.S. Government
Investments 34,110,765
-----------------------------------------------
Asset-Backed Securities (7.6%)
3,000,000 Associates Manufactured Housing Pass
Through Certificates Series 1996-1......................................... 7.900 3/15/2027 3,042,840
5,250,000 Green Tree Financial Corporation
Series 1997-6 Class A-5.................................................... 6.680 1/15/2029 5,238,135
5,000,000 Green Tree Financial Corporation
Series 1997-6 Class A-7.................................................... 7.140 1/15/2029 4,936,200
5,000,000 Green Tree Financial Corporation
Series 1996-7 Class A-6.................................................... 7.650 10/15/2027 4,871,550
5,000,000 Green Tree Financial Corporation
Series 1996-6 Class A-6.................................................... 7.950 9/15/2027 5,123,250
3,000,000 Green Tree Home Improvement
Loan Trust Series 1997-C A-2............................................... 8.100 9/15/2027 3,040,590
4,500,000 Harley-Davidson Eaglemark Motorcycle
Trust Series 1999-1 Class Certificates..................................... 6.710 8/15/2002 4,402,260
-----------------------------------------------
Total Asset-Backed Securities 30,654,825
-----------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 65
<PAGE>
The AAL Bond Fund - continued SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Long-Term Fixed-Income Investments (96.0%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<C> <S> <C> <C> <C>
Collateralized Mortgage Investments (3.8%)
$ 15,360,000 Countrywide Home Loans, Inc.
Series 1997-6 A-3.......................................................... 6.750% 11/25/2027 $15,236,659
-----------------------------------------------
Total Collateralized
Mortgage Investments 15,236,659
-----------------------------------------------
Corporate Investments (61.8%)
4,500,000 American Airlines, Inc. ................................................... 7.024 10/15/2009 4,475,880
5,000,000 Arizona Public Service Company............................................. 6.250 1/15/2005 4,784,620
11,000,000 AT&T Capital Corporation................................................... 6.875 1/15/2001 11,028,369
6,000,000 Avalon Bay Communities, Inc. .............................................. 7.500 8/1/2009 5,797,914
5,000,000 Bank of America Corporation................................................ 6.625 6/15/2004 4,959,685
5,000,000 Cabot Industrial Properties, L.P. ......................................... 7.125 5/1/2004 4,841,660
5,500,000 CBS Corporation............................................................ 7.150 5/20/2005 5,444,412
4,000,000 CIT Group, Inc. ........................................................... 7.125 10/15/2004 4,016,856
5,000,000 Coastal Corporation........................................................ 6.500 5/15/2006 4,786,315
8,500,000 Comdisco, Inc. ............................................................ 5.950 4/30/2002 8,219,559
5,000,000 Countrywide Home Loans, Inc. .............................................. 6.250 4/15/2009 4,610,650
3,500,000 Edison International, Inc. ................................................ 6.875 9/15/2004 3,471,198
5,000,000 Edison Mission Holdings Company/2/......................................... 8.137 10/1/2019 4,763,195
4,000,000 El Paso Energy Corporation................................................. 6.750 5/15/2009 3,800,708
4,000,000 EOP Operating, L.P. ....................................................... 6.800 1/15/2009 3,717,556
8,000,000 Fidelity Investments/2/.................................................... 7.490 6/15/2019 7,937,016
4,000,000 FPL Group Capital, Inc. ................................................... 7.625 9/15/2006 4,069,460
5,500,000 Guidant Corporation........................................................ 6.150 2/15/2006 5,147,439
5,000,000 Household Finance Corporation.............................................. 7.200 7/15/2006 4,997,035
4,500,000 Joseph E. Seagram & Sons, Inc. ............................................ 6.625 12/15/2005 4,314,168
5,000,000 KN Energy, Inc. ........................................................... 6.650 3/1/2005 4,848,190
4,500,000 Kroger Company............................................................. 7.625 9/15/2006 4,531,613
12,000,000 Mercantile Bancorporation, Inc. ........................................... 7.625 10/15/2002 12,228,612
2,500,000 News America Holdings, Inc. ............................................... 8.625 2/1/2003 2,603,463
5,561,099 Niagara Mohawk Power Corporation........................................... 7.625 10/1/2005 5,602,435
4,000,000 Northern Border Pipeline Company/2/........................................ 7.750 9/1/2009 4,045,172
4,000,000 Northern Trust Corporation................................................. 7.100 8/1/2009 3,965,272
6,000,000 Oneck, Inc. ............................................................... 7.750 8/15/2006 6,056,327
4,000,000 Pentair, Inc. ............................................................. 7.850 10/15/2009 3,974,616
6,500,000 PSI Energy, Inc. .......................................................... 7.850 10/15/2007 6,555,152
4,500,000 Raytheon Company........................................................... 6.750 3/15/2018 3,969,450
5,500,000 Raytheon Company........................................................... 6.500 7/15/2005 5,252,935
4,000,000 Society National Bank...................................................... 7.250 6/1/2005 4,027,656
4,500,000 Sun Microsystems, Inc. .................................................... 7.500 8/15/2006 4,569,894
8,500,000 TCI Communications, Inc. .................................................. 8.650 9/15/2004 9,140,909
8,500,000 Texas Utilities Eastern Funding Company/2/................................. 6.450 5/15/2005 8,075,808
4,000,000 Textron Financial Corporation.............................................. 7.370 10/15/2003 3,953,356
5,000,000 Times Mirror Company....................................................... 7.450 10/15/2009 5,051,950
9,000,000 Tyco International Group SA 2.............................................. 6.875 9/5/2002 8,950,293
10,000,000 Union Pacific Company...................................................... 5.780 10/15/2001 9,809,140
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
66 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Bond Fund - continued SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Long-Term Fixed-Income Investments (96.0%) Interest Rate Maturity Date Market Value
===================================================================================================================================
<C> <S> <C> <C> <C>
Corporate Investments (61.8%) - continued
$ 4,000,000 United Technologies Corporation............................................ 6.500% 6/1/2009 $3,872,264
3,000,000 United Technologies Corporation............................................ 7.500 9/15/2029 3,027,417
4,000,000 USX Corporation............................................................ 6.650 2/1/2006 3,838,980
8,000,000 Waste Management, Inc./2/.................................................. 6.000 5/15/2001 7,552,672
5,000,000 Waste Management, Inc. .................................................... 7.000 10/1/2004 4,372,065
4,500,000 Williams Companies, Inc. .................................................. 7.625 7/15/2019 4,386,661
--------------------------------------------------
Total Corporate Investments 249,445,997
--------------------------------------------------
--------------------------------------------------
Total Long-Term Fixed-Income Investments
(amortized cost basis $393,269,083) 387,445,931
--------------------------------------------------
Short-Term Investments (2.7%)/1/
===========================================================================
6,187,000 Merrill Lynch & Company, Inc. ............................................. 5.280 11/2/99 6,184,250
4,882,000 Xerox Corporation.......................................................... 5.250 11/1/99 4,880,576
--------------------------------------------------
Total Short-Term Investments
(amortized cost basis $11,064,826) 11,064,826
--------------------------------------------------
--------------------------------------------------
TOTAL INVESTMENTS (98.7%)
(amortized cost basis $404,333,909) 398,510,757
--------------------------------------------------
--------------------------------------------------
Other Assets, Less Liabilities (1.3%) 5,201,961
--------------------------------------------------
--------------------------------------------------
Net Assets (100.0%) $403,712,718
--------------------------------------------------
</TABLE>
/1/The interest rate reflects the discount rate at the date of purchase.
/2/144A security
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 67
<PAGE>
The AAL Money Market Fund SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
Investment Objective
The Fund seeks a high level of current income, consistent with liquidity and the
preservation of capital, by investing in a diversified portfolio of high-
quality, short-term money market instruments.
<TABLE>
<CAPTION>
Principal Amount Commercial Paper (99.0%) Interest Rate Range* Maturity Date Range Market Value
==========================================================================================================================
<C> <S> <C> <C> <C>
$14,958,000 American Express Credit Corporation.................... 5.110-5.880% 11/9/99-2/23/2000 $14,823,836
13,571,000 American General Finance Corporation................... 5.150-5.990 11/12/99-2/17/2000 13,419,324
8,800,000 Associates Corporation of North America................ 4.830-5.740 12/20/99-1/14/2000 8,716,870
4,094,000 AT&T Corporation....................................... 5.700 2/2/2000 4,032,419
14,045,000 BellSouth Telecommunications, Inc. .................... 5.650-5.670 1/19/2000-2/9/2000 13,846,367
1,325,000 Cargill, Inc. ......................................... 4.870 2/4/2000 1,307,613
1,500,000 Carolina Power & Light Company......................... 5.200 11/5/99 1,498,700
9,924,000 CIT Group, Inc. ....................................... 5.120-5.800 11/17/99-2/15/2000 9,840,584
15,194,000 Coca-Cola Company/6/................................... 5.110-5.780 11/5/99-2/7/2000 15,066,475
5,000,000 Consolidated Natural Gas Company....................... 5.380-5.450 11/15/99-1/25/2000 4,966,485
14,928,000 E. I. du Pont de Nemours & Company..................... 5.110-5.810 11/2/99-2/22/2000 14,835,894
4,663,000 Federal National Mortgage Association.................. 5.440 1/18/2000 4,606,629
11,443,000 Ford Motor Credit Company.............................. 5.260-5.700 12/3/99-1/10/2000 11,360,692
4,783,000 Gannett Company........................................ 5.850 1/14/2000-1/20/2000 4,722,679
15,018,000 General Electric Capital Corporation................... 5.150-5.970 11/5/99-2/18/2000 14,837,464
11,248,000 General Mills, Inc. ................................... 4.970-5.270 11/12/99-12/1/99 11,206,006
13,393,000 General Motors Acceptance Corporation.................. 5.160-5.900 11/16/99-2/1/2000 13,263,482
14,226,000 Goldman Sachs Group, L.P. ............................. 5.810-5.980 1/13/2000-2/14/2000 14,007,531
6,000,000 GTE Corporation........................................ 6.000 3/2/2000 5,876,000
5,656,000 Hershey Foods Corporation.............................. 5.180-5.270 11/8/99-11/23/99 5,642,229
13,383,000 Household Finance Corporation.......................... 5.210-5.750 11/24/99-1/11/2000 13,288,356
15,044,000 IBM Credit Corporation................................. 5.230-5.920 11/23/99-2/15/2000 14,863,173
8,630,000 International Lease Finance Corporation................ 5.210-5.870 11/9/99-2/9/2000 8,524,528
11,728,000 John Deere Capital Corporation......................... 5.130-5.710 11/4/99-1/13/2000 11,671,233
15,004,000 Lucent Technologies, Inc. ............................. 4.910-5.800 11/10/99-2/24/2000 14,847,567
1,995,000 McGraw-Hill, Inc. ..................................... 5.160 11/2/99 1,994,142
2,497,000 Merrill Lynch & Company, Inc. ......................... 5.950-5.960 1/28/2000-1/31/2000 2,459,269
14,546,000 Norwest Financial, Inc. ............................... 5.120-5.980 11/15/99-2/16/2000 14,359,735
15,219,000 Procter & Gamble Company............................... 5.250-5.900 11/4/99-2/2/2000 15,109,351
6,367,000 Sears Roebuck Acceptance Corporation................... 5.200-5.280 11/24/99-12/13/99 6,335,248
3,931,000 Shell Oil Company...................................... 5.260-5.270 11/1/99-11/19/99 3,926,128
3,000,000 Southern California Edison Company..................... 5.280 1/26/2000 2,957,321
5,138,000 Toyota Motor Corporation............................... 5.270 12/13/99 5,104,906
10,365,000 Transamerica Finance Corporation....................... 4.850-5.340 11/3/99-1/12/2000 10,327,061
4,854,000 Wal-Mart Stores, Inc. ................................. 5.290-5.300 11/9/99-12/7/99 4,833,032
15,006,000 Walt Disney Company.................................... 4.780-5.880 11/1/99-2/16/2000 14,867,316
1,311,000 Warner-Lambert, Inc. .................................. 5.270 11/18/99 1,307,354
2,150,000 Xerox Corporation...................................... 5.280 12/6/99 2,138,333
------------------------------------------------
Total Commercial Paper 336,791,332
------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
68 The AAL Mutual Funds Semi-Annual Report
<PAGE>
The AAL Money Market Fund - continued
SCHEDULE OF INVESTMENTS AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
Principal Amount Variable Rate Obligations (0.7%) Market Value
=============================================================================================================
<C> <S> <C>
$ 2,492,874 Fidelity Domestic Portfolio Class III........................................ $ 2,492,874
-----------------------------------------------------
Total Variable Rate Obligations 2,492,874
-----------------------------------------------------
-----------------------------------------------------
TOTAL INVESTMENTS (99.7%)
(amortized cost basis $339,284,206) 339,284,206
-----------------------------------------------------
-----------------------------------------------------
Other Assets, Less Liabilities (0.3%) 1,034,059
-----------------------------------------------------
-----------------------------------------------------
Total Net Assets (100.0%) $340,318,265
-----------------------------------------------------
</TABLE>
* The interest rate shown reflects the coupon rate or, for the securities
purchased at a discount, the discount rate at the date of purchase.
/6/4(2) commercial paper
See page 85 for a complete discussion of Investment Terms.
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 69
<PAGE>
Statement of Assets and Liabilities As of October 29, 1999
<TABLE>
<CAPTION>
The AAL The AAL The AAL The AAL
Small Cap Stock Fund Mid Cap Stock Fund International Fund Capital Growth Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments at cost................................ $135,803,201 $590,523,559 $145,951,227 $1,987,099,818
Investments at value $146,691,166 $656,766,608 $183,554,860 $4,025,290,441
Unamortized organization &
initial registration expenses...................... 12,136 -- 11,163 --
Dividend and interest receivable................... 43,645 408,768 404,853 2,509,338
Prepaid expenses................................... 43,086 50,309 38,792 169,142
Receivable from securities sold.................... 2,516,897 6,631,978 5,189 --
Receivable for forward contracts held............... -- -- 2,714,484 --
Cash............................................... 74,668 2,028 373,918 1,405,849
- -----------------------------------------------------------------------------------------------------------------------------------
Total Assets $149,381,598 $663,859,691 $187,103,259 $4,029,374,770
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities
Payable for forward currency contracts held........ $ -- $ -- $ 2,721,335 $ --
Payable for investment purchased................... 3,863,263 16,035,287 2,721,335 --
Income distributions payable....................... -- -- -- --
Redemptions payable................................ 78,483 -- -- 2,050,505
Payable to affiliate............................... 129,297 488,345 147,915 2,491,875
Accrued expenses................................... 226,237 580,164 197,966 838,470
- -----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 4,297,280 17,103,796 5,788,551 5,380,850
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets
Trust capital (beneficial interest)................ 150,672,308 544,578,403 155,222,974 1,935,442,591
Accumulated undistributed net investment
income (loss)...................................... (887,107) (765,521) 77,795 3,209,182
Accumulated net realized gain (loss) on investments (15,588,848) 36,699,964 (11,587,614) 47,151,524
Net unrealized appreciation (depreciation) on:
Investments...................................... 10,887,965 66,243,049 37,603,633 2,038,190,623
Foreign currency contracts....................... -- -- (6,851) --
Foreign currency related transactions............ -- -- 4,771 --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Net Assets 145,084,318 646,755,895 181,314,708 4,023,993,920
- -----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Capital $149,381,598 $663,859,691 $187,103,259 $4,029,374,770
- -----------------------------------------------------------------------------------------------------------------------------------
Class A share capital.............................. $127,118,139 $618,916,138 $167,824,569 $3,838,968,851
Shares of beneficial interest outstanding (Class A) 11,418,000 41,934,338 13,356,543 103,028,825
Net asset value per share.......................... $11.13 $14.76 $12.56 $37.26
Maximum public offering price...................... $11.59 $15.38 $13.08 $38.81
Class B share capital.............................. $ 17,130,577 $ 19,592,064 $ 11,275,645 $ 126,057,015
Shares of beneficial interest outstanding (Class B) 1,568,069 1,360,050 912,797 3,454,520
Net asset value per share.......................... $10.92 $14.41 $12.35 $36.49
Class I share capital.............................. $ 835,602 $ 8,247,693 $ 2,214,494 $ 58,968,054
Shares of beneficial interest outstanding (Class I) 74,254 555,164 175,318 1,580,726
Net asset value per share.......................... $11.25 $14.86 $12.63 $37.30
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
70 The AAL Mutual Funds Semi-Annual Report
<PAGE>
Statement of Assets and Liabilities As of October 29, 1999
<TABLE>
<CAPTION>
The AAL The AAL The AAL
Equity Income Fund Balanced Fund High Yield Bond Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments at cost............................... $251,833,114 $218,210,865 $171,912,590
Investments at value $303,935,472 $237,218,989 $140,913,600
Unamortized organization &
initial registration expenses..................... -- 50,967 14,453
Dividend and interest receivable.................. 458,021 1,340,668 4,749,161
Prepaid expenses.................................. 56,380 65,806 51,093
Receivable from securities sold................... 63,105 -- 1,267,396
Receivable for foward contracts held.............. -- -- --
Cash.............................................. 115,060 74,727 93,272
- --------------------------------------------------------------------------------------------------------------
Total Assets $304,628,038 $238,751,157 $147,088,975
- --------------------------------------------------------------------------------------------------------------
Liabilities
Payable for forward currency contracts held....... $ -- $ -- $ --
Payable for investment purchased.................. 8,492,263 -- 1,589,815
Income distributions payable...................... -- -- 358,044
Redemptions payable............................... 186,672 -- 105,227
Payable to affiliate.............................. 171,591 159,312 89,083
Accrued expenses.................................. 97,419 149,773 196,853
- --------------------------------------------------------------------------------------------------------------
Total Liabilities 8,947,945 309,085 2,339,022
- --------------------------------------------------------------------------------------------------------------
Net Assets
Trust capital (beneficial interest)............... 245,836,515 223,292,367 180,580,069
Accumulated undistributed net investment
income (loss)..................................... (38,198) 476,604 15,284
Accumulated net realized gain (loss) on investments (2,220,582) (4,335,023) (4,846,410)
Net unrealized appreciation (depreciation) on:
Investments..................................... 52,102,358 19,008,124 (30,998,990)
Foreign currency contracts...................... -- -- --
Foreign currency related transactions........... -- -- --
- --------------------------------------------------------------------------------------------------------------
Total Net Assets 295,680,093 $238,442,072 144,749,953
- --------------------------------------------------------------------------------------------------------------
Total Liabilities and Capital $304,628,038 $238,751,157 $147,088,975
- --------------------------------------------------------------------------------------------------------------
Class A share capital............................. $271,371,627 $219,512,291 $130,839,928
Shares of beneficial interest outstanding (Class A) 19,298,036 17,986,332 16,713,110
Net asset value per share......................... $14.06 $12.20 $7.83
Maximum public offering price..................... $14.65 $12.71 $8.16
Class B share capital............................. $ 10,732,699 $ 15,557,209 $ 11,630,608
Shares of beneficial interest outstanding (Class B) 764,247 1,280,487 1,485,664
Net asset value per share......................... $14.04 $12.15 $7.83
Class I share capital............................. $ 13,575,767 $ 3,372,572 $ 2,279,417
Shares of beneficial interest outstanding (Class I) 964,141 276,557 291,406
Net asset value per share......................... $14.08 $12.19 $7.82
</TABLE>
Statement of Assets and Liabilities As of October 29, 1999
<TABLE>
<CAPTION>
The AAL The AAL The AAL
Municipal Bond Fund Bond Fund Money Market Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments at cost............................... $492,148,528 $404,333,909 $339,284,206
Investments at value $490,588,512 $398,510,757 $339,284,206
Unamortized organization &
initial registration expenses..................... -- -- --
Dividend and interest receivable.................. 7,210,812 5,356,534 8,962
Prepaid expenses.................................. 56,374 49,548 76,153
Receivable from securities sold................... 35,097,213 -- --
Receivable for foward contracts held.............. -- -- --
Cash.............................................. 211,197 582,906 1,833,143
- --------------------------------------------------------------------------------------------------------------
Total Assets $533,164,108 $404,499,745 $341,202,464
- --------------------------------------------------------------------------------------------------------------
Liabilities
Payable for forward currency contracts held....... $ -- $ -- $ --
Payable for investment purchased.................. 36,543,079 -- --
Income distributions payable...................... 347,685 459,315 68,115
Redemptions payable............................... 402,206 -- 566,359
Payable to affiliate.............................. 283,418 222,865 107,041
Accrued expenses.................................. 115,554 104,847 142,684
- --------------------------------------------------------------------------------------------------------------
Total Liabilities 37,691,942 787,027 884,199
- --------------------------------------------------------------------------------------------------------------
Net Assets
Trust capital (beneficial interest)............... 507,893,184 430,460,300 340,283,054
Accumulated undistributed net investment
income (loss)..................................... ( 47,081) 96,451 35,211
Accumulated net realized gain (loss) on investments (10,813,921) (21,020,881) --
Net unrealized appreciation (depreciation) on:
Investments..................................... (1,560,016) (5,823,152) --
Foreign currency contracts...................... -- -- --
Foreign currency related transactions........... -- -- --
- --------------------------------------------------------------------------------------------------------------
Total Net Assets 495,472,166 403,712,718 340,318,265
- --------------------------------------------------------------------------------------------------------------
Total Liabilities and Capital $533,164,108 $404,499,745 $341,292,464
- --------------------------------------------------------------------------------------------------------------
Class A share capital............................. $486,363,840 $351,616,384 $319,585,342
Shares of beneficial interest outstanding (Class A) 46,425,716 36,856,353 319,585,342
Net asset value per share......................... $10.48 $9.54 $1.00
Maximum public offering price..................... $10.92 $9.94
Class B share capital............................. $ 7,676,927 $ 3,558,551 $ 2,165,709
Shares of beneficial interest outstanding (Class B) 733,036 372,832 2,165,709
Net asset value per share......................... $10.47 $9.54 $1.00
Class I share capital............................. $ 1,431,399 $ 48,537,783 $ 18,567,214
Shares of beneficial interest outstanding (Class I) 136,677 5,087,125 18,567,214
Net asset value per share......................... $10.47 $9.54 $1.00
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
AAL Mutual Funds Semi-Annual Report 71
<PAGE>
Statement of Operations FOR THE PERIOD ENDED OCTOBER 29, 1999
<TABLE>
<CAPTION>
The AAL The AAL The AAL The AAL
Small Cap Stock Fund Mid Cap Stock Fund International Fund Capital Growth Fund
==================================================================================================================================
<S> <C> <C> <C> <C>
Investment Income
Dividends........................... $ 302,143 $ 2,440,269 $ 1,595,223 $ 18,344,985
Taxable interest.................... 199,439 1,022,382 109,236 5,239,760
Tax exempt interest................. -- -- -- --
Foreign dividend withholding........ -- -- (208,156) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 501,582 3,462,651 1,496,303 23,584,745
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses
Adviser fees........................ 493,780 2,117,695 204,720 10,063,496
Sub-Adviser fees.................... -- -- 299,041 --
Audit fees and legal fees........... 8,302 12,822 21,751 9,970
Custody fees........................ 11,518 16,940 74,206 60,329
Administrative service and
pricing fees....................... 21,993 21,585 25,115 21,303
Amortization of organizational costs
& registration fees................ 3,615 -- 7,285 --
Printing and postage expense Class A 111,572 257,245 79,242 408,047
Printing and postage expense Class B 17,742 28,994 14,958 59,881
Printing and postage expense Class I 31 71 29 123
Distribution expense Class A........ 154,253 762,658 188,401 4,544,927
Distribution expense Class B........ 83,957 92,811 50,773 572,110
SEC and state registration expense.. 26,122 35,943 19,705 66,698
Transfer agent fees Class A......... 309,077 633,990 218,369 1,629,773
Transfer agent fees Class B......... 53,472 47,262 26,475 146,229
Transfer agent fees Class I......... 80 126 44 273
Shareholder maintenance
fees Class A....................... 67,391 174,901 58,916 445,635
Shareholder maintenance
fees Class B....................... 14,163 13,484 7,404 42,842
Shareholder maintenance
fees Class I....................... 20 44 15 84
Trustees fees and expenses.......... 6,983 6,983 6,938 6,983
Other expenses...................... 4,618 4,618 4,583 27,368
- ----------------------------------------------------------------------------------------------------------------------------------
Total Expenses 1,388,689 4,228,172 1,307,970 18,106,071
- ----------------------------------------------------------------------------------------------------------------------------------
Less reimbursement from Adviser/1/.. -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Net Expenses 1,388,689 4,228,172 1,307,970 18,106,071
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) (887,107) (765,521) 188,333 5,478,674
- ----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses) on Investments
Net realized gains (losses) on investments (2,468,791) 32,476,744 5,267,117 15,249,660
Net realized gain (losses) on
foreign currency transactions...... -- -- 187,563 --
Increase (decrease) in unrealized
appreciation on investments........ 6,045,775 6,195,383 11,588,128 131,546,219
Decrease in unrealized appreciation
on foreign currency transactions.... -- -- (108,227) --
- ----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses)
on Investments $ 3,576,984 38,672,127 16,934,581 146,795,879
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $ 2,689,877 $37,906,606 $17,122,914 $152,274,553
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/During the period ended October 29, 1999, the following Funds had class
specific reimbursements: The AAL High Yield Bond Fund Class A $72,864, Class B
$18,496; The AAL Money Market Fund Class A $150,614, Class B $917; The AAL
Balanced Fund Class B $14,940.
The accompanying notes to the financial statements are an integral part of this
schedule.
72 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
The AAL The AAL The ALL
Equity Income Fund Balanced Fund High Yield Bond Fund
==================================================================================================================
<S> <C> <C> <C>
Investment Income
Dividends........................................ $ 2,393,868 $ 510,120 $ --
Taxable interest................................. 572,903 3,283,791 8,372,159
Tax exempt interest.............................. -- -- --
Foreign dividend withholding..................... -- -- --
- ------------------------------------------------------------------------------------------------------------------
Total Investment Income 2,966,771 3,793,911 8,372,159
- ------------------------------------------------------------------------------------------------------------------
Expenses
Adviser fees..................................... 653,138 560,544 402,447
Sub-Adviser fees................................. -- -- --
Audit fees and legal fees........................ 6,528 7,590 10,282
Custody fees..................................... 5,995 9,780 4,162
Administrative service and
pricing fees.................................... 21,687 23,572 25,436
Amortization of organizational costs
& registration fees............................. -- 7,378 3,314
Printing and postage expense Class A............. 67,080 81,532 40,440
Printing and postage expense Class B............. 6,556 18,578 6,374
Printing and postage expense Class I............. 61 18 50
Distribution expense Class A..................... 332,930 234,148 165,094
Distribution expense Class B..................... 51,316 68,176 59,784
SEC and state registration expense............... 29,503 24,225 29,598
Transfer agent fees Class A...................... 182,837 157,641 70,382
Transfer agent fees Class B...................... 15,964 16,177 13,266
Transfer agent fees Class I...................... 141 58 80
Shareholder maintenance
fees Class A.................................... 54,008 31,057 20,347
Shareholder maintenance
fees Class B.................................... 4,692 4,495 3,244
Shareholder maintenance
fees Class I.................................... 40 17 26
Trustees fees and expenses....................... 6,983 7,153 6,983
Other expenses................................... 4,618 978 3,084
- ------------------------------------------------------------------------------------------------------------------
Total Expenses 1,444,077 1,253,117 864,393
- ------------------------------------------------------------------------------------------------------------------
Less reimbursement from Adviser/1/............... -- (14,940) (91,360)
- ------------------------------------------------------------------------------------------------------------------
Total Net Expenses 1,444,077 1,238,177 773,033
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 1,522,694 2,555,734 7,599,126
- ------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses) on Investents
Net realized gains (losses) on investments....... (927,108) (3,303,957) (1,745,934)
Net realized gain (losses) on
foreign currency transactions................... -- -- --
Increase (decrease) in unrealized
appreciation on investments..................... (11,681,313) 4,855,183 (17,420,878)
Decrease in unrealized appreciation
on foreign currency transactions................ -- -- --
- ------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses)
on Investments (12,608,421) 1,551,226 (19,166,812)
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $(11,085,727) $ 4,106,960 $(11,567,686)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The AAL The AAL The AAL
Municipal Bond Fund Bond Fund Money Market Fund
====================================================================================================================
<S> <C> <C> <C>
Investment Income
Dividends........................................ $ -- $ -- $ --
Taxable interest................................. 66,591 13,523,210 8,254,098
Tax exempt interest.............................. 14,124,131 -- --
Foreign dividend withholding..................... -- -- --
- --------------------------------------------------------------------------------------------------------------------
Total Investment Income 14,190,722 13,523,210 8,254,098
- --------------------------------------------------------------------------------------------------------------------
Expenses
Adviser fees..................................... 1,122,939 904,804 799,949
Sub-Adviser fees................................. -- -- --
Audit fees and legal fees........................ 30,024 13,107 6,379
Custody fees..................................... 10,940 10,245 8,072
Administrative service and
pricing fees.................................... 38,507 23,467 21,431
Amortization of organizational costs
& registration fees............................. -- -- --
Printing and postage expense Class A............. 45,059 59,787 201,422
Printing and postage expense Class B............. 551 1,275 1,639
Printing and postage expense Class I............. 13 71 108
Distribution expense Class A..................... 630,365 442,093 188,267
Distribution expense Class B..................... 38,317 17,041 8,028
SEC and state registration expense............... 30,684 28,758 46,033
Transfer agent fees Class A...................... 128,113 177,790 321,246
Transfer agent fees Class B...................... 4,369 3,903 3,352
Transfer agent fees Class I...................... 19 199 155
Shareholder maintenance
fees Class A.................................... 35,584 50,569 65,689
Shareholder maintenance
fees Class B.................................... 1,213 1,054 617
Shareholder maintenance
fees Class I.................................... 5 57 39
Trustees fees and expenses....................... 6,983 6,983 6,983
Other expenses................................... 4,618 4,618 4,618
- --------------------------------------------------------------------------------------------------------------------
Total Expenses 2,128,303 1,745,821 1,684,027
- --------------------------------------------------------------------------------------------------------------------
Less reimbursement from Adviser/1/............... -- -- (515,066)
- --------------------------------------------------------------------------------------------------------------------
Total Net Expenses 2,128,303 1,745,821 1,168,961
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 12,062,419 11,777,389 7,085,137
- --------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses) on Investments
Net realized gains (losses) on investments....... (11,504,686) (13,813,912) --
Net realized gain (losses) on
foreign currency transactions................... -- --
Increase (decrease) in unrealized
appreciation on investments..................... (35,211,101) (2,084,783) --
Decrease in unrealized appreciation
on foreign currency transactions................ -- -- --
- --------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gains (Losses)
on Investments (46,715,787) (15,898,695) --
- --------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $(34,653,368) $(4,121,306) $7,085,137
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The AAL Mutual Funds Semi-Annual Report 73
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
The AAL Small Cap Stock Fund The AAL Mid Cap Stock Fund
Year Ended Period Ended Year Ended Period Ended
4/30/99 10/29/99 4/30/99 10/29/99
===================================================================================================================================
<S> <C> <C> <C> <C>
Operations
Net investment income (loss).................... $ (1,612,190) $ (887,107) $ (1,839,180) $ (765,521)
Net realized gains (losses) on
investment transactions......................... (12,910,797) (2,468,791) (5,548,797) 32,476,744
Net realized gains (losses) on
foreign currency transactions................... -- -- -- --
Increase (decrease) in unrealized appreciation
on investments ................................. (12,219,909) 6,045,775 (57,120,248) 6,195,383
Increase (decrease) in unrealized appreciation on
foreign currency................................ -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations (26,742,896) 2,689,877 (53,410,631) 37,906,606
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions from net investment income
Class A......................................... -- -- -- --
Capital gains distributions Class A............. (3,279,485) -- (31,399,679) --
Distributions from net investment income
Class B......................................... -- -- -- --
Capital gains distributions Class B............. (367,213) -- (764,973) --
Distributions from net investment income
Class I......................................... -- -- -- --
Capital gains distributions Class I............. (25,739) -- (104,348) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders (3,672,437) -- (32,269,000) --
- -----------------------------------------------------------------------------------------------------------------------------------
Trust Shares Transactions
Purchase of trust shares........................ 51,592,646 20,861,090 83,653,124 37,597,067
Income dividends reinvested..................... -- -- -- --
Capital gains distributions reinvested.......... 3,651,227 -- 32,027,978 --
Redemption of trust shares...................... (27,332,479) (11,055,379) (107,894,234) (37,054,323)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Trust Capital 27,911,394 9,805,711 7,786,868 542,744
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets (2,503,939) 12,495,588 (77,892,763) 38,449,350
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets Beginning of Period 135,092,669 132,588,730 686,199,308 608,306,545
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets End of Period $132,588,730 $145,084,318 $ 608,306,545 $646,755,895
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated Undistributed
Net Investment Income $ -- $ (887,107) $ -- $ (765,521)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
74 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
The AAL International Fund The AAL Capital Growth Fund
Year Ended Period Ended Year Ended Period Ended
4/30/99 10/29/99 4/30/99 10/29/99
============================================================================================================================
<S> <C> <C> <C> <C>
Operations
Net investment income (loss).................... $ 859,681 $ 188,333 $ 8,529,494 $ 5,478,674
Net realized gains (losses) on
investment transactions......................... (16,079,763) 5,267,117 44,101,168 15,249,660
Net realized gains (losses) on
foreign currency transactions................... (847,376) 187,563 -- --
Increase (decrease) in unrealized appreciation
on investments ................................. 26,954,543 11,588,128 632,727,988 131,546,219
Increase (decrease) in unrealized appreciation on
foreign currency................................ (1,064,532) (108,227) -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 9,822,553 17,122,914 685,358,650 152,274,553
- ----------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions from net investment income
Class A......................................... (5,508,439) -- (9,039,308) (2,932,029)
Capital gains distributions Class A............. (1,077,355) -- (44,133,195) --
Distributions from net investment income
Class B......................................... (270,859) -- -- --
Capital gains distributions Class B............. (68,393) -- (1,163,264) --
Distributions from net investment income
Class I......................................... (81,218) -- (69,685) (113,485)
Capital gains distributions Class I............. (13,741) -- (187,263) --
- ----------------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders (7,020,005) -- (54,592,715) (3,045,514)
- ----------------------------------------------------------------------------------------------------------------------------
Trust Shares Transactions
Purchase of trust shares........................ 26,644,938 14,597,952 530,840,060 262,688,773
Income dividends reinvested..................... 5,762,541 -- 9,003,264 3,008,216
Capital gains distributions reinvested.......... 1,143,152 -- 45,010,862 --
Redemption of trust shares...................... (30,259,775) (9,022,563) (291,194,908) (139,953,117)
- ----------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Trust Capital 3,290,856 5,575,389 293,659,278 125,743,872
- ----------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets 6,093,404 22,698,303 924,425,213 274,972,911
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets Beginning of Period 152,523,001 158,616,405 2,824,595,796 3,749,021,009
- ----------------------------------------------------------------------------------------------------------------------------
Net Assets End of Period $158,616,405 $181,314,708 $3,749,021,009 $4,023,993,920
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Accumulated Undistributed
Net Investment Income $ (110,538) $ 77,795 $ 776,022 $ 3,209,182
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The AAL Equity Income Fund
Year Ended Period Ended
4/30/99 10/29/99
===============================================================================
<S> <C> <C>
Operations
Net investment income (loss).................... $ 2,834,430 $ 1,522,694
Net realized gains (losses) on
investment transactions......................... (1,457,948) (927,108)
Net realized gains (losses) on
foreign currency transactions................... -- --
Increase (decrease) in unrealized appreciation
on investments ................................. 24,969,242 (11,681,313)
Increase (decrease) in unrealized appreciation on
foreign currency................................ -- --
- ------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 26,345,724 (11,085,727)
- ------------------------------------------------------------------------------
Distributions to Shareholders
Distributions from net investment income
Class A......................................... (2,771,066) (1,495,038)
Capital gains distributions Class A............. (12,438,445) --
Distributions from net investment income
Class B......................................... (22,587) (5,920)
Capital gains distributions Class B............. (394,272) --
Distributions from net investment income
Class I......................................... (152,592) (108,741)
Capital gains distributions Class I............. (477,318) --
- ------------------------------------------------------------------------------
Total Distributions to Shareholders (16,256,280) (1,609,699)
- ------------------------------------------------------------------------------
Trust Shares Transactions
Purchase of trust shares........................ 78,746,226 36,712,645
Income dividends reinvested..................... 2,714,811 1,488,592
Capital gains distributions reinvested.......... 12,525,314 --
Redemption of trust shares...................... (27,659,752) (14,801,081)
- ------------------------------------------------------------------------------
Net Increase (Decrease) in Trust Capital 66,326,599 23,400,156
- ------------------------------------------------------------------------------
Net Increase in Net Assets 76,416,043 10,704,730
- ------------------------------------------------------------------------------
Net Assets Beginning of Period 208,559,320 284,975,363
- ------------------------------------------------------------------------------
Net Assets End of Period $284,975,363 $295,680,093
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Accumulated Undistributed
Net Investment Income $ 48,807 $ (38,198
- ------------------------------------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
The AAL Mutual Funds Semi-Annual Report 75
<PAGE>
Statement of Changes in Net Assets - continued
<TABLE>
<CAPTION>
The AAL Balanced Fund The AAL High Yield Bond Fund
Period Ended Period Ended Year Ended Period Ended
4/30/99 10/29/99 4/30/99 10/29/99
===================================================================================================================
<S> <C> <C> <C> <C>
Operations
Net investment income (loss).................. $ 1,884,718 $ 2,555,734 $ 12,701,268 $ 7,599,126
Net realized gains (losses) on
investment transactions....................... (951,699) (3,303,957) (2,968,117) (1,745,934)
Net realized gains (losses) on
foreign currency transactions................. -- -- -- --
Increase (decrease) in unrealized appreciation
on investments................................ 13,169,175 4,855,183 (14,351,533) (17,420,878)
Increase (decrease) in unrealized appreciation
on foreign currency........................... -- -- -- --
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations 14,102,194 4,106,960 (4,618,382) (11,567,686)
- -------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders
Distributions from net investment income
Class A....................................... (1,500,115) (2,274,112) (11,543,313) (6,891,333)
Capital gains distributions
Class A....................................... (41,657) -- (868,111) --
Distributions from net investment income
Class B....................................... (77,069) (97,442) (992,940) (582,507)
Capital gains distributions
Class B....................................... (3,381) -- (79,266) --
Distributions from net investment income
Class I....................................... (29,552) (41,304) (165,015) (125,286)
Capital gains distributions
Class I....................................... (748) -- (15,776) --
- -------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders (1,652,522) (2,412,858) (13,664,421) (7,599,126)
- -------------------------------------------------------------------------------------------------------------------
Trust Shares Transactions
Purchase of trust shares...................... 138,049,644 74,647,688 70,417,151 25,722,995
Income dividends reinvested................... 1,578,142 2,373,926 8,735,599 5,072,011
Capital gains distributions
reinvested.................................... 45,128 -- 760,946 --
Redemption of trust shares.................... (10,806,194) (12,667,103) (25,812,174) (13,419,011)
- -------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Trust
Capital 128,866,720 64,354,511 54,101,522 17,375,995
- -------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets 141,316,392 66,048,613 35,818,719 (1,790,817)
- -------------------------------------------------------------------------------------------------------------------
Net Assets Beginning of Period 31,077,067 172,393,459 110,722,051 146,540,770
- -------------------------------------------------------------------------------------------------------------------
Net Assets End of Period $172,393,459 $238,442,072 $146,540,770 $144,749,953
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
Accumulated Undistributed
Net Investment Income $ 333,728 $ 476,604 $ 15,284 $ 15,284
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes to the financial statements are an integral part of this
schedule.
76 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
The AAL Municipal Bond Fund The AAL Bond Fund The AAL Money Market Fund
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss)..... $ 22,532,856 $ 12,062,419 $ 21,237,229 $ 11,777,389 $ 12,365,667 $ 7,085,137
Net realized gains (losses) on
investment transactions.......... 5,587,589 (11,504,686) 3,344,719 (13,813,912) -- --
Net realized gains (losses) on
foreign currency transactions.... -- -- -- -- -- --
Increase (decrease) in unrealized
appreciationon investments....... 4,309,037 (35,211,101) (6,610,062) (2,084,783) -- --
Increase (decrease) in unrealized
appreciation on foreign currency. -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net
Assets Resulting from Operations 32,429,482 (34,653,368) 17,971,886 (4,121,306) 12,365,667 7,085,137
- -----------------------------------------------------------------------------------------------------------------------------------
Distribution to Shareholders
Distributions from net investment
income Class A................... (22,312,462) (11,891,086) (18,958,827) (10,288,612) (11,846,827) (6,649,217)
Capital gains distributions
Class A.......................... (7,691,473) -- -- -- -- --
Distributions from net investment
income Class B................... (206,793) (149,458) (96,253) (82,611) (48,170) (30,544)
Capital gains distributions
Class B.......................... (94,607) -- -- -- -- --
Distributions from net investment
income Class I................... (13,601) (21,875) (2,182,149) (1,406,166) (470,670) (405,376)
Capital gains distributions
Class I.......................... (8,405) -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders (30,327,341) (12,062,419) (21,237,229) (11,777,389) (12,365,667) (7,085,137)
- -----------------------------------------------------------------------------------------------------------------------------------
Trust Shares Transactions
Purchase of trust shares......... 81,733,880 34,228,305 84,626,055 32,732,874 424,973,734 222,362,267
Income dividends reinvested...... 18,276,929 9,804,253 16,241,614 8,973,649 12,076,865 6,928,937
Capital gains distributions
reinvested....................... 6,555,174 -- -- -- -- --
Redemption of trust shares....... (48,331,549) (32,987,005) (66,671,353) (37,112,820) (371,525,997) (196,670,108)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Trust
Capital 58,234,434 11,045,553 34,196,316 4,593,703 65,524,602 32,621,096
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets 60,336,575 (35,670,234) 30,930,973 (11,304,992) 65,524,602 32,621,096
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets Beginning of Period 470,805,825 531,142,400 384,086,737 415,017,710 242,172,567 307,697,169
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets End of Period $531,142,400 $495,472,166 $415,017,710 $403,712,718 $ 307,697,169 $ 340,318,265
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated Undistributed
Net Investment Income $ (47,081) $ (47,081) $ 96,451 $ 96,451 $ 35,211 $ 35,211
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The AAL Mutual Funds Semi-Annual Report 77
<PAGE>
Notes to Financial Statements AS OF OCTOBER 29, 1999
A: Organization
The AAL Mutual Funds (the "Trust") was organized as a Massachusetts Business
Trust on March 31, 1987, and is registered as an open-end diversified management
company under the Investment Company Act of 1940. The Trust commenced operations
on July 16, 1987, and currently consists of The AAL Small Cap Stock, Mid Cap
Stock, International, Capital Growth, Equity Income, Balanced, High Yield Bond,
Municipal Bond, Bond, Money Market, and U.S. Government Zero Coupon Target Funds
2001 and 2006. The 12 AAL Mutual Funds are collectively referred to as the
"Funds". The financial statements of the two U.S. Government Zero Coupon Target
Funds are included in a separate annual report.
On January 8, 1997, the Trust began issuing two classes of Fund shares in The
AAL Small Cap Stock, Mid Cap Stock, International, Capital Growth, Equity
Income, High Yield Bond, Municipal Bond, Bond, and Money Market Funds. The
Series A shares are subject to a maximum 4.00% sales charge of the offering
price and a 0.25% annual service fee. Series B shares are offered at net asset
value and a 1.00% annual 12b-1 and service fee. In addition, Series B shares
have a contingent deferred sales charge of 5% declining 1% each year upon
redemption during the first five years. The AAL Balanced Fund added Class B
shares on its inception date of December 29, 1997.
On December 29, 1997, the Trust began issuing a third class of fund shares
(institutional) in The AAL Small Cap Stock, Mid Cap Stock, International,
Capital Growth, Equity Income, Balanced, High Yield Bond, Municipal Bond, Bond,
and Money Market Funds. The Series I shares are offered at net asset value and
have no annual 12b-1 charges. Each class of shares has identical rights and
privileges except with respect to voting matters affecting a single class of
shares and the exchange privilege of each class of shares.
B: Significant Accounting Policies
The Funds' principal accounting policies are:
Valuation--Securities traded on national securities exchanges abroad are
valued at last reported sales prices. Each over-the-counter security for which
the last sales price is available from NASDAQ is valued at that price. Interest
bearing money market instruments are valued at a cost that approximates the
market. All other instruments held by The AAL Money Market Fund and money market
investments with a remaining maturity of 60 days or less held by the other Funds
are valued on an amortized cost basis. The AAL International Fund invests in
foreign equity securities, whose values are subject to change in market
conditions, as well as changes in political and regulatory environments. All
other securities are valued at the latest bid quotation if such quotations are
readily available. Otherwise, such securities are valued at a fair value as
determined in good faith by the Investment Adviser under supervision of the
Board of Trustees.
Foreign Currency Translation--The books and records of the Funds are maintained
in U.S. dollars. The market values of securities and other assets and
liabilities that are not traded in United States currency are recorded in the
financial statements after translation to U.S. dollars at the time net asset
value is calculated. For federal income tax purposes The AAL International Fund
does treat as ordinary income the effect of changes in foreign exchange arising
from actual foreign currency transactions and the effect of changes in foreign
exchange rates from the fluctuations arising from trade date and settlement date
differences.
Net realized and unrealized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of forward foreign
currency exchange contracts, disposition of foreign currencies, and the
difference between the amount of net investment income accrued and the U.S.
dollar amount actually received. That portion of both realized and unrealized
gains and losses on investments that result from fluctuations in foreign
currency exchange rates is not separately disclosed.
Foreign Currency Contracts--In connection with purchases and sales of securities
denominated in foreign currencies, The AAL International Fund may enter into
forward currency contracts. Additionally, The AAL International Fund may enter
into such contract to hedge certain other foreign currency denominated
investments. These contracts are recorded at market values, and the related
realized and unrealized foreign exchange gains and losses are included in the
statement of operations. In the event that counter parties fail to settle these
forward contracts, The AAL International Stock Fund could be exposed to foreign
currency fluctuations. Certain Funds also utilized earnings and profits
distributed to shareholders on redemption of shares as part of the dividend paid
deduction.
Federal Income Taxes--Each Fund intends to comply with the requirements of the
Internal Revenue Code which are applicable to regulated investment companies and
to distribute substantially all of their taxable income to their shareholders.
The Funds accordingly anticipate paying no Federal income taxes and no Federal
income tax provision was required. Certain funds also utilized earnings and
profits distributed to shareholders on redemption of shares as part of the
dividend paid deduction.
Income and Expenses--The Funds are charged for those expenses that are directly
attributed to each portfolio, such as 12B1 fees, transfer agent, printing,
postage, and shareholder service fees. Expenses that are not directly
attributable to a portfolio are typically allocated among the Fund portfolios in
proportion to their respective net assets, number of shareholder accounts or
other reasonable basis. Net investment income for the class-specific expenses
and realized and unrealized gains or losses are allocated directly to each class
based upon the relative net asset value of outstanding shares, or the value of
dividend eligible shares, as appropriate for each class of shares. Each class
is charged directly for expenses specifically attributed to that class.
Distributions to Shareholders--Net investment income is distributed to each
shareholder as a dividend. Dividends to shareholders are recorded on the ex-
dividend date. Dividends from The AAL Capital Growth Fund are declared and paid
semi-annually. Dividends from The AAL Small Cap Stock, Mid Cap Stock, and
International Funds are declared and paid annually. Dividends from The AAL
Equity Income and Balanced Funds are declared and paid quarterly. Dividends
from The AAL High Yield Bond, Municipal Bond, Bond, and Money Market Funds are
declared daily and distributed monthly. Dividends from net realized gains from
securities transactions, if any, are distributed at least annually in the
calendar year.
Credit Risk--The Funds may be susceptible to credit risk with respect to the
extent the issuer defaults on its payment obligation. The Funds' policy is to
monitor the creditworthiness of the issuer and does not anticipate
nonperformance on the instruments.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
78 The AAL Mutual Funds Semi-Annual Report
<PAGE>
Notes to Financial Statements - continued AS OF OCTOBER 29, 1999
Other--For financial statement purposes, investment security transactions are
accounted for on the trade date. Dividend income is recognized on the ex-
dividend date, and interest income is recognized on an accrual basis. Discounts
and premiums on municipal bonds are amortized over the life of the respective
bonds. Discounts on bonds purchased are amortized over the life of the
respective bonds in The AAL Mid Cap Stock, Equity Income, Balanced, High Yield
Bond, and Bond Funds. Realized gains or losses on sales are determined on a
specific cost identification basis. The Funds have no right to require
registration of unregistered securities. The cost incurred with the
organization and initial registration of shares for The AAL Small Cap Stock,
International, Balanced and High Yield Bond Funds is being amortized over the
period of benefit, but not to exceed 60 months from each Fund's commencement of
operation.
Generally accepted accounting principles require that permanent financial
reporting and tax differences be reclassified to trust capital.
C: Investment Advisory Management Fees and Transactions with Related Parties
The Trust has entered into an Investment Advisory Agreement with AAL Capital
Management Corporation, ("The Advisor"), under which each of the mutual fund
portfolios pay a fee for investment advisory services. Effective September 1,
1999, the annual rates of fees as a percent of average daily net assets under
the investment advisory agreement were as follows:
<TABLE>
<CAPTION>
(M-Millions) $0 to $50M $50 to $200M $200 to $500M $500 to $1,000M over $1,000M
==============================================================================================================
<S> <C> <C> <C> <C> <C>
The AAL Small Cap Stock Fund 0.70% 0.70% 0.65% 0.65% 0.65%
The AAL Mid Cap Stock Fund 0.70% 0.70% 0.65% 0.65% 0.65%
The AAL International Fund 0.65% 0.60% 0.60% 0.60% 0.60%
The AAL Capital Growth Fund 0.65% 0.65% 0.65% 0.575% 0.50%
The AAL Equity Income Fund 0.45% 0.45% 0.45% 0.45% 0.45%
The AAL Balanced Fund 0.55% 0.55% 0.55% 0.55% 0.55%
The AAL High Yield Bond Fund 0.55% 0.55% 0.55% 0.55% 0.55%
The AAL Municipal Bond Fund 0.45% 0.45% 0.45% 0.45% 0.45%
The AAL Bond Fund 0.45% 0.45% 0.45% 0.45% 0.45%
The AAL Money Market Fund 0.50% 0.50% 0.50% 0.45% 0.45%
</TABLE>
The AAL International Fund has entered into a sub-advisory agreement with
Oechsle International Advisors, which is paid 0.40% of 1% on the first $50
million of average daily net assets and 0.35% of 1% on average daily net assets
over $50 million (payable from the annual advisory fee paid to the advisor).
The Trust has entered into an Administrative Services Agreement with Aid
Association for Lutherans (AAL) pursuant to which AAL provides certain
administrative services. AAL earned the following fees from the respective
Funds for the period ended October 29, 1999: $22,500 for The AAL International
Fund, $20,000 for The AAL Small Cap Stock, Mid Cap Stock, Capital Growth, Equity
Income, Balanced, High Yield Bond, Municipal Bond, Bond, and Money Market Funds,
respectively.
The Trust has also contracted with AAL Capital Management Corporation for
certain shareholder maintenance services. These shareholder services include:
pre-processing and quality control of new accounts, shareholder correspondence,
account response and answering customer inquires regarding account status,
option and facilitating shareholder telephone transactions. Fees and cost
reimbursements charged to the Funds under terms of the contract approximated
$3.98 per year per shareholder account.
The Trust has adopted a Distribution Plan ("the Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plan authorizes the Trust to use
a portion of its assets to finance certain activities relating to the
distribution of its shares to investors. On the Class A shares, a service fee of
0.25% of 1% of average net assets for the AAL Small Cap Stock, Mid Cap Stock,
International, Capital Growth, Equity Income, Balanced, High Yield Bond,
Municipal Bond, and Bond Funds; 0.125% of 1% of average net assets for the AAL
Money Market Fund. On the Class B Shares, a service fee of 0.25% of 1% of
average net assets and a 12b-1 Distribution Fee of 0.75% of 1% of average net
assets for The AAL Small Cap Stock, Mid Cap Stock, International, Capital
Growth, Equity Income, Balanced, High Yield Bond, Municipal Bond, and Bond
Funds; a service fee of 0.125% of 1% of average net assets and a 12b-1
Distribution Fee of 0.75% of 1% of average net assets for the AAL Money Market
Fund. There is no 12b-1 Distribution Fee on Class I shares.
Trustees of the Trust not affiliated with AAL or the Adviser received $57,742 in
fees for the period ended October 29, 1999. No remuneration has been paid by
the Trust to any of the officers or affiliated Trustees of the Trust. In
addition, the Trust reimbursed unaffiliated Trustees for reasonable expenses
incurred in relation to attendance at the meetings.
The Adviser voluntarily has reimbursed various Funds since inception. As of
October 29, 1999, the Adviser is waiving expenses of The AAL Money Market Fund
of 0.325% based on average daily net assets. In addition, AAL Capital
Management Corporation is waiving all expenses in excess of 1.00% for Class A
and 1.75% for Class B of The AAL High Yield Bond Fund and 1.25% for Class A and
2.00% for Class B for The AAL Balanced Fund. Voluntary waiver of expenses to
these Funds may be modified or discontinued at any time by the Adviser.
AAL is the ultimate parent company for AAL Capital Management Corporation.
The AAL Mutual Funds Semi-Annual Report 79
<PAGE>
Notes to Financial Statements - continued AS OF OCTOBER 29, 1999
D: Security Transactions
During the year ended April 30, 1999, and the period ended October 29, 1999,
purchases and sales of securities other than short-term obligations were as
follows
<TABLE>
<CAPTION>
Purchases Sales
----------------------------- -----------------------------
Year Period Year Period
Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99
=============================================================================================
<S> <C> <C> <C> <C>
The AAL Small Cap Fund $ 162,781,255 $107,659,164 $ 138,767,607 $106,224,506
The AAL Mid Cap Fund 726,385,475 393,424,358 752,711,455 414,775,762
The AAL International Fund 154,642,180 47,293,503 133,011,319 42,301,452
The AAL Capital Growth Fund 501,444,062 100,616,204 259,149,531 113,063,068
The AAL Equity Income Fund 81,651,026 46,841,637 29,495,234 21,257,561
The AAL Balanced Fund 266,878,645 143,682,155 156,387,748 90,833,539
The AAL High Yield Bond Fund 119,953,262 45,921,036 68,434,062 34,095,087
The AAL Municipal Bond Fund 527,979,636 502,377,832 471,600,151 498,128,338
The AAL Bond Fund 2,233,070,486 480,455,481 2,213,905,742 473,717,035
</TABLE>
For the year ended April 30, 1999, and period ended October 29, 1999, The AAL
Bond Fund purchased $1,249,352,154 and $218,026,523 and sold $1,246,093,792 and
$190,229,984 in U.S. Government Obligations.
For the year ended April 30, 1999, and period ended October 29, 1999, The AAL
Municipal Bond Fund purchased $21,568,998 and $6,286,250 and sold $21,564,850
and $6,317,344 in U.S. Government Obligations.
For the period ended April 30, 1999, and period ended October 29, 1999, The AAL
Balanced Fund purchased $104,802,878 and $42,720,391 and sold $101,319,024 and
$40,952,656 in U.S. Government Obligations.
At April 30, 1999, the AAL Small Cap Fund had accumulated a net realized capital
loss carryover of $5,169,704 expiring in 2007; The AAL International Fund had
accumulated a net realized capital loss carryover of $17,042,294 expiring in
2007; The AAL Equity Income Fund had accumulated a net realized capital loss
carryover of $1,466,623 expiring in 2007; The AAL High Yield Bond Fund had
accumulated a net realized capital loss carryover of $1,271,115 expiring in
2007; and the AAL Bond Fund had accumulated a net realized capital loss
carryover of $2,246,041 expiring in 2005. To the extent that these Funds realize
net capital gains, taxable distributions to shareholders will be offset by any
unused capital loss carryover.
The gross unrealized appreciation and depreciation on investments at year ended
April 30, 1999 and the period ended October 29, 1999, were as follows:
<TABLE>
<CAPTION>
4/30/99 10/29/99
------------------------------------------------ ------------------------------------------------
Net Unrealized Net Unrealized
Appreciation Appreciation
Appreciation (Depreciation) (Depreciation) Appreciation (Depreciation) (Depreciation)
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
The AAL Small Cap Stock Fund $ 15,707,959 $(10,865,769) $ 4,842,190 $ 20,571,860 $ (9,683,895) $ 10,887,965
The AAL Mid Cap Stock Fund 87,065,009 (27,017,343) 60,047,666 105,662,425 (39,419,376) 66,243,049
The AAL International Fund 28,491,489 (2,365,446) 26,126,043 44,184,961 (6,588,179) 37,596,782
The AAL Capital Growth Fund 1,951,269,701 (44,625,297) 1,906,644,404 2,115,509,566 (77,318,943) 2,038,190,623
The AAL Equity Income Fund 77,412,812 (13,629,141) 63,783,671 75,291,976 (23,189,618) 52,102,358
The AAL Balanced Fund 16,570,935 (2,417,994) 14,152,941 24,191,862 (5,183,738) 19,008,124
The AAL High Yield Bond Fund 2,652,342 (16,230,454) (13,578,112) 705,273 (31,704,263) (30,998,990)
The AAL Municipal Bond Fund 34,368,583 (717,498) 33,651,085 11,266,439 (12,826,455) (1,560,016)
The AAL Bond Fund 1,816,883 (5,555,252) (3,738,369) 1,028,121 (6,851,273) (5,823,152)
</TABLE>
80 The AAL Mutual Funds Semi-Annual Report
<PAGE>
Notes to Financial Statements - continued AS OF OCTOBER 29, 1999
E: Trust Transactions
Transactions in trust shares were as follows:
<TABLE>
<CAPTION>
The AAL Small Cap Stock Fund
---------------------------------------------------------------------------------------------
Class A Class B Class I
-------------------------- ------------------------- ------------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 3,891,500 1,646,159 582,841 182,314 64,638 23,924
Income dividends reinvested -- -- -- -- -- --
Capital gains reinvested 301,427 -- 34,300 -- 2,374 --
Shares redeemed (2,240,144) (870,736) (190,256) (89,060) (23,860) (22,925)
---------- --------- -------- ------- ------- -------
Net increase of trust shares 1,952,783 775,423 426,885 93,254 43,152 999
========== ========= ======== ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
The AAL Mid Cap Stock Fund
----------------------------------------------------------------------------------------------
Class A Class B Class I
------------------------- ------------------------- -------------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 5,215,260 2,219,382 454,559 153,733 466,914 189,322
Income dividends reinvested -- -- -- -- -- --
Capital gains reinvested 2,474,310 -- 61,459 -- 8,275 --
Shares redeemed (7,729,989) (2,401,144) (130,314) (38,213) (89,278) (93,003)
---------- ---------- -------- ------- ------- -------
Net increase of trust shares (40,419) (181,762) 385,704 115,520 385,911 96,319
========== ========== ======== ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
The AAL International Fund
---------------------------------------------------------------------------------------------
Class A Class B Class I
------------------------- ------------------------- ------------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 2,076,339 1,146,364 232,322 77,329 154,736 18,644
Income dividends reinvested 511,948 -- 25,527 -- 2,869 --
Capital gains reinvested 100,659 -- 6,597 -- 482 --
Shares redeemed (2,677,235) (732,081) (106,607) (38,281) (35,591) (7,034)
---------- --------- -------- ------- ------- -------
Net increase of trust shares 11,711 414,283 157,839 39,048 122,496 11,610
========== ========= ======== ======= ======= =======
</TABLE>
The AAL Mutual Funds Semi-Annual Report 81
<PAGE>
Notes to Financial Statements - continued AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
The AAL Capital Growth Fund
---------------------------------------------------------------------------
Class A Class B Class I
--------------------- --------------------- ----------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 14,225,458 6,243,621 1,321,138 481,113 1,311,222 585,833
Income dividends reinvested 281,631 78,178 -- -- 2,137 2,993
Capital gains reinvested 1,425,758 -- 38,349 -- 6,025 --
Shares redeemed (9,060,976) (3,496,652) (179,708) (75,076) (112,134) (316,002)
---------- ---------- --------- -------- --------- ---------
Net increase of trust shares 6,871,871 2,825,147 1,179,779 406,037 1,207,250 272,824
========== ========== ========= ======== ========= =========
</TABLE>
<TABLE>
<CAPTION>
The AAL Equity Income Fund
----------------------------------------------------------------------------
Class A Class B Class I
-------------------- --------------------- ----------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 4,854,885 2,271,087 398,839 129,722 435,407 144,715
Income dividends reinvested 193,170 101,020 1,588 413 2,545 3,240
Capital gains reinvested 916,949 -- 29,216 -- 5,698 --
Shares redeemed (1,922,099) (933,029) (40,545) (21,782) (43,650) (78,862)
---------- ---------- -------- -------- -------- --------
Net increase of trust shares 4,042,905 1,439,078 389,098 108,353 400,000 69,093
========== ========== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
The AAL Balanced Fund
----------------------------------------------------------------------------
Class A Class B Class I
--------------------- --------------------- ----------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 11,236,840 4,785,690 806,943 327,523 89,291 93,341
Income dividends reinvested 128,272 187,106 6,598 7,997 2,580 3,359
Capital gains reinvested 3,654 -- 298 -- 67 --
Shares redeemed (898,275) (1,016,052) (49,617) (34,725) (5,018) (6,787)
---------- ---------- -------- -------- ------- ------
Net increase of trust shares 10,470,491 4,956,744 764,222 300,795 86,920 89,913
========== ========== ======== ======== ======= ======
</TABLE>
82 The AAL Mutual Funds Semi-Annual Report
<PAGE>
Notes to Financial Statements - continued AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
The AAL High Yield Bond Fund
------------------------------------------------------------------------------
Class A Class B Class I
------------------------ --------------------- ---------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 6,706,091 2,853,350 495,697 148,574 247,545 40,808
Income dividends reinvested 863,591 556,675 66,641 42,415 13,102 10,034
Capital gains reinvested 75,664 -- 6,434 -- 1,262 --
Shares redeemed (2,630,009) (1,491,191) (121,281) (94,725) (31,405) (7,284)
---------- ---------- -------- -------- ------- --------
Net increase of trust shares 5,015,337 1,918,834 447,491 96,264 230,504 43,558
========== ========== ======== ======== ======= ========
</TABLE>
<TABLE>
<CAPTION>
The AAL Municipal Bond Fund
------------------------------------------------------------------------------
Class A Class B Class I
----------------------- --------------------- ----------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 6,657,054 2,918,327 340,431 101,746 44,426 86,579
Income dividends reinvested 1,557,452 886,153 14,626 11,495 1,175 2,019
Capital gains reinvested 556,748 -- 7,148 -- 725 --
Shares redeemed (4,140,561) (2,983,907) (26,502) (32,632) (2,176) (464)
---------- ---------- ------- ------- ------ ------
Net increase of trust shares 4,630,693 820,573 335,703 80,609 44,150 88,134
========== ========== ======= ======= ====== ======
</TABLE>
<TABLE>
<CAPTION>
The AAL Bond Fund
------------------------------------------------------------------------------
Class A Class B Class I
----------------------- --------------------- ----------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 6,448,271 2,577,816 200,975 85,101 1,733,386 733,250
Income dividends reinvested 1,565,781 895,304 8,007 7,224 37,306 31,451
Capital gains reinvested -- -- -- -- -- --
Shares redeemed (6,383,869) (3,635,105) (39,787) (31,937) (194,999) (181,920)
---------- ---------- ------- ------- --------- --------
Net increase of trust shares 1,630,183 (161,985) 169,195 60,388 1,575,693 582,781
========== ========== ======= ======= ========= ========
</TABLE>
The AAL Mutual Funds Semi-Annual Report 83
<PAGE>
Notes to Financial Statements - continued AS OF OCTOBER 29, 1999
<TABLE>
<CAPTION>
The AAL Money Market Fund
-------------------------------------------------------------------------------------
Class A Class B Class I
---------------------------- ----------------------- --------------------------
Year Period Year Period Year Period
Ended Ended Ended Ended Ended Ended
4/30/99 10/29/99 4/30/99 10/29/99 4/30/99 10/29/99
Shares Shares Shares Shares Shares Shares
=====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Shares purchased 367,653,413 194,232,453 3,041,527 1,465,281 54,278,795 26,664,533
Income dividends reinvested 11,608,802 6,530,703 47,572 30,335 420,490 367,899
Capital gains reinvested -- -- -- -- -- --
Shares redeemed (331,856,369) (169,321,113) (2,661,451) (958,177) (37,008,177) (26,390,818)
------------ ------------ ---------- --------- ----------- -----------
Net increase of trust shares 47,405,846 31,442,043 427,648 537,439 17,691,108 641,614
============ ============ ========== ========= =========== ===========
</TABLE>
F: Forward Currency Contracts
As of October 29, 1999, The AAL International Fund had entered into forward
currency contracts, as summarized below, resulting in net unrealized
depreciation of $6,851.
<TABLE>
<CAPTION>
Settlement Date Currency to U.S. Value Currency to U.S. Value of
Through Be Delivered April 30, 1999 Be Received April 30, 1999
=====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
11/1/99 824,707 U.S. Dollar $ 824,707 85,629,339 Japanese Yen $ 820,519
11/2/99 53,770 U.S. Dollar 53,770 51,059 EURO 53,667
11/2/99 210,506 U.S. Dollar 210,506 127,325 British Pound Sterling 208,934
11/2/99 1,228,342 U.S. Dollar 1,228,342 9,543,600 Hong Kong Dollar 1,228,342
11/3/99 86,319 U.S. Dollar 86,319 52,359 British Pound Sterling 85,919
11/4/99 140,602 U.S. Dollar 140,602 85,811 British Pound Sterling 140,813
11/5/99 177,089 U.S. Dollar 177,089 107,431 British Pound Sterling 176,290
---------- ----------
$2,721,335 $2,714,484
========== ==========
</TABLE>
84 The AAL Mutual Funds Semi-Annual Report
<PAGE>
A Note on Forward-Looking Statements
Except for the historical information contained in the foregoing reports on each
of the Funds, the matters discussed in those reports may constitute forward-
looking statements that are made pursuant to the safe harbor provisions of the
Securities Litigation Reform Act of 1995. These include discussion about each
portfolio manager's predictions, assessments, analyses and outlooks for relevant
securities and investment markets, market sectors, industries and individual
stocks or other investment securities. These statements involve risks and
uncertainties. In addition to the general risks described for each Fund in its
current prospectus, other factors bearing on these reports include the accuracy
of each portfolio manager's forecasts and predictions, the appropriateness of
the investment strategies designed by the portfolio managers to capitalize on
their forecasts and predictions should they prove true, and the ability of the
portfolio managers to implement their strategies efficiently and effectively.
Any one or more of these factors, as well as other risks affecting the
securities markets and investment instruments generally, could cause the actual
results of any Fund to differ materially from the projected results for the
Fund, either on an overall basis or on a relative basis as compared to the
benchmark index selected for the particular Fund.
GLOSSARY OF TERMS
* Non income-producing security -- A non income-producing security is a
security which has not paid a dividend or interest payment in the past
calendar year.
2 144A security -- A 144A security is a security that has not been fully
registered with the SEC. Because it is not fully registered it is considered
an illiquid or restricted security. Once the security is registered, it loses
its 144A classification and is no longer restricted. 144A securities are for
institutional or accredited investors, such as mutual funds.
3 When-issued security -- A when-issued security is a securities issue that has
been authorized and is sold to investors before the certficates are ready for
delivery.
4 Pledged as security for when-issued securities -- A pledged security is a
security that is pledged as collateral for a when-issued security. A pledged
security is no longer collateral once the when-issued security purchased is
settled.
5 Security in default -- A security in default is a security that has missed
its last interest payment.
6 4(2) Commercial paper -- 4(2) commercial paper is a security that has not
been fully registered with the SEC. Because it is not fully registered it is
considered an illiquid or restricted security. Once the security is
registered, it loses its 4(2) classification and is no longer restricted.
4(2) commercial paper is for institutional or accredited investors, such as
mutual funds.
The AAL Mutual Funds Semi-Annual Report 85
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL Small Cap Stock Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98 4/30/97
================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period..................................... $10.89 $ 13.84 $ 9.84 $ 10.00
Income from Investment Operations
- ---------------------------------
Net investment income.................................................... (0.06) (0.12) (0.10) (0.06)
Net realized and unrealized gain (loss) on investments................... 0.30 (2.51) 4.73 0.17
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations......................................... 0.24 (2.63) 4.63 0.11
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income.................................................... -- -- -- --
Net realized capital gains............................................... -- (0.32) (0.63) (0.27)
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions...................................................... -- (0.32) (0.63) (0.27)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value............................... 0.24 (2.95) 4.00 (0.16)
Net asset value: End of period........................................... $11.13 $ 10.89 $ 13.84 $ 9.84
================================================================================================================================
Total return (b)......................................................... 2.20% (18.97)% 47.97% (0.78)%
Net assets, end of period (in millions).................................. $127.1 $ 116.0 $ 120.3 $ 44.5
Ratio of expenses to average net assets (a).............................. 1.88% 1.82% 1.71% 2.06%
Ratio of net investment income (loss) to average net assets (a).......... (1.17)% (1.15)% (1.05)% (1.20)%
Portfolio turnover rate.................................................. 78.58% 112.96% 105.60% 138.50%
- --------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a)........................... 1.88% 1.82% 1.71% 2.06%
Ratio of net investment income (loss) to average net assets (a)....... (1.17)% (1.15)% (1.05)% (1.20)%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
86 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/29/99 4/30/99 4/30/98 4/30/97
=================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period.......................................... $ 10.74 $ 13.73 $ 9.81 $ 11.17
Income from Investment Operations
- ---------------------------------
Net investment income......................................................... (0.11) (0.22) (0.16) (0.03)
Net realized and unrealized gain (loss) on investments........................ 0.29 (2.50) 4.67 (1.33)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations.............................................. 0.18 (2.72) 4.51 (1.36)
=================================================================================================================================
Less Distributions from:
- ------------------------
Net investment income......................................................... -- -- -- --
Net realized capital gains.................................................... -- (0.27) (0.59) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions........................................................... -- (0.27) (0.59) --
=================================================================================================================================
Net increase (decrease) in net asset value.................................... 0.18 (2.99) 3.92 (1.36)
Net asset value: End of period................................................ $ 10.92 $ 10.74 $ 13.73 $ 9.81
=================================================================================================================================
Total return (b).............................................................. 1.77% (19.85)% 46.86% (12.18)%
Net assets, end of period (in millions)....................................... $ 17.1 $ 15.8 $ 14.4 $ 3.4
Ratio of expenses to average net assets (a)................................... 2.71% 2.89% 2.60% 3.20%
Ratio of net investment income (loss) to average net assets (a)............... (1.99)% (2.22)% (1.94)% (2.39)%
Portfolio turnover rate....................................................... 78.58% 112.96% 105.60% 138.50%
=================================================================================================================================
If the Fund had paid all of their expenses without the adviser's voluntary
expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a).................................. 2.71% 2.89% 2.60% 3.20%
Ratio of net investment income (loss) to average net assets (a).............. (1.99)% (2.22)% (1.94)% (2.39)%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
=================================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period................................................ $ 10.95 $ 13.87 $ 12.45
Income from Investment Operations
- ---------------------------------
Net investment income............................................................... (0.01) (0.04) (0.01)
Net realized and unrealized gain (loss) on investments.............................. 0.31 (2.52) 1.43
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations.................................................... 0.30 (2.56) 1.42
=================================================================================================================================
Less Distributions from:
- ------------------------
Net investment income............................................................... -- -- --
Net realized capital gains.......................................................... -- (0.36) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions................................................................. -- (0.36) --
=================================================================================================================================
Net increase (decrease) in net asset value.......................................... 0.30 (2.92) 1.42
Net asset value: End of period...................................................... $ 11.25 $ 10.95 $ 13.87
=================================================================================================================================
Total return (b).................................................................... 2.74% (18.41)% 11.41%
Net assets, end of period (in millions)............................................. $ 0.8 $ 0.8 $ 0.4
Ratio of expenses to average net assets (a)......................................... 0.85% 1.08% 1.19%
Ratio of net investment income (loss) to average net assets (a)..................... (0.13)% (0.40)% (0.39)%
Portfolio turnover rate............................................................. 78.58% 112.96% 105.60%
=================================================================================================================================
If the Fund had paid all of their expenses without the adviser's voluntary
expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a)........................................ 0.85% 1.08% 1.19%
Ratio of net investment income (loss) to average net assets (a).................... (0.13)% (0.40)% (0.39)%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
The AAL Mutual Funds Semi-Annual Report 87
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL Mid Cap Stock Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98 4/30/97 4/30/96 4/30/95
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value: Beginning of period................... $ 13.89 $ 15.93 $12.71 $ 17.11 $ 10.92 $ 10.38
Income from Investment Operations
- ---------------------------------
Net investment income.................................. (0.02) (0.04) (0.04) (0.12) (0.10) (0.05)
Net realized and unrealized gain (loss) on investments. 0.89 (1.25) 4.75 (1.63) 6.29 0.59
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations....................... 0.87 (1.29) 4.71 (1.75) 6.19 0.54
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income.................................. -- -- -- -- -- --
Net realized capital gains............................. -- (0.75) (1.49) (2.65) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions.................................... -- (0.75) (1.49) (2.65) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value............. 0.87 (2.04) 3.22 (4.40) 6.19 0.54
Net asset value: End of period......................... $ 14.76 $ 13.89 $ 15.93 $ 12.71 $ 17.11 $ 10.92
- ------------------------------------------------------------------------------------------------------------------------------------
Total return (b)...................................... 6.26% (7.62)% 38.73% (11.08)% 56.59% 5.20%
Net assets, end of period (in millions)............... $618.9 $584.9 $671.5 $461.7 $425.0 $220.8
Ratio of expenses to average net assets (a)........... 1.30% 1.37% 1.30% 1.35% 1.39% 1.54%
Ratio of net investment income (loss) to average net
assets (a)........................................... (0.21)% (0.28)% (0.27)% (0.94)% (0.82)% (0.77)%
Portfolio turnover rate............................... 64.60% 125.94% 104.73% 112.60% 90.14% 88.18%
- ------------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the
adviser's voluntary expense reimbursement, the ratios
would have been as follows:
Ratio of expenses to average net assets (a)............ 1.30% 1.37% 1.30% 1.35% 1.39% 1.54%
Ratio of net investment income (loss) to average net
assets (a)........................................... (0.21)% (0.28)% (0.27)% (0.94)% (0.82)% (0.77)%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
88 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/29/99 4/30/99 4/30/98 4/30/97
================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period .................................. $13.64 $ 15.78 $ 12.69 $ 13.67
Income from Investment Operations
- ---------------------------------
Net investment income ................................................. (0.09) (0.17) (0.12) (0.03)
Net realized and unrealized gain (loss) on investments ................ 0.86 (1.27) 4.65 (0.95)
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ...................................... 0.77 (1.44) 4.53 (0.98)
================================================================================================================================
Less Distributions from:
- ------------------------
Net investment income ................................................. -- -- -- --
Net realized capital gains ............................................ -- (0.70) (1.44) --
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions ................................................... -- (0.70) (1.44) --
================================================================================================================================
Net increase (decrease) in net asset value ............................ 0.77 (2.14) 3.09 (0.98)
Net asset value: End of period ........................................ $14.41 $ 13.64 $ 15.78 $ 12.69
================================================================================================================================
Total return (b) ...................................................... 5.65% (8.70)% 37.41% (7.17)%
Net assets, end of period (in millions) ............................... $19.6 $ 17.0 $ 13.6 $ 3.3
Ratio of expenses to average net assets (a) ........................... 2.47% 2.56% 2.33% 2.29%
Ratio of net investment income (loss) to average net assets (a) ....... (1.38)% (1.46)% (1.30)% (1.41)%
Portfolio turnover rate ............................................... 64.60% 125.94% 104.73% 112.60%
- --------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a) ....................... 2.47% 2.56% 2.33% 2.29%
Ratio of net investment income (loss) to average net assets (a) ... (1.38)% (1.46)% (1.30)% (1.41)%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
======================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period .................................... $13.94 $ 15.96 $ 14.40
Income from Investment Operations
- ---------------------------------
Net investment income ................................................... 0.03 0.02 --
Net realized and unrealized gain (loss) on investments .................. 0.89 (1.25) 1.56
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ........................................ 0.92 (1.23) 1.56
======================================================================================================================
Less Distributions from:
- ------------------------
Net investment income ................................................... -- -- --
Net realized capital gains .............................................. -- (0.79) --
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions ..................................................... -- (0.79) --
======================================================================================================================
Net increase (decrease) in net asset value .............................. 0.92 (2.02) 1.56
Net asset value: End of period .......................................... $14.86 $ 13.94 $ 15.96
======================================================================================================================
Total return (b) ........................................................ 6.60% (7.17)% 10.83%
Net assets, end of period (in millions) ................................. $ 8.2 $ 6.4 $ 1.2
Ratio of expenses to average net assets (a) ............................. 0.71% 0.85% 0.86%
Ratio of net investment income (loss) to average net assets (a) ......... 0.39% 0.33% 0.18%
Portfolio turnover rate ................................................. 64.60% 125.94% 104.73%
======================================================================================================================
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a) ......................... 0.71% 0.85% 0.86%
Ratio of net investment income (loss) to average net assets (a) ..... 0.39% 0.33% 0.18%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
The AAL Mutual Funds Semi-Annual Report 89
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL International Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Period Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98 4/30/97 4/30/96
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Net asset value: Beginning of period ............................ $ 11.35 $ 11.15 $ 11.37 $ 11.08 $10.00
Income from Investment Operations
- ---------------------------------
Net investment income ........................................... 0.02 0.08 0.17 0.01 0.05
Net realized and unrealized gain (loss) on investments .......... 1.19 0.65 0.56 0.68 1.05
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ................................ 1.21 0.73 0.73 0.69 1.10
====================================================================================================================================
Less Distributions from:
- ------------------------
Net investment income ........................................... -- (0.44) (0.37) (0.34) (0.02)
Net realized capital gains ...................................... -- (0.09) (0.58) (0.06) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions ............................................. -- (0.53) (0.95) (0.40) (0.02)
====================================================================================================================================
Net increase (decrease) in net asset value ...................... 1.21 0.20 (0.22) 0.29 1.08
Net asset value: End of period .................................. $ 12.56 $ 11.35 $ 11.15 $ 11.37 $11.08
====================================================================================================================================
Total return (b) ................................................ 10.66% 6.82% 7.34% 6.32% 11.07%
Net assets, end of period (in millions) ......................... $167.8 $146.9 $144.2 $116.2 $57.1
Ratio of expenses to average net assets (a) ..................... 1.54% 1.74% 1.91% 2.10% 2.15%
Ratio of net investment income (loss) to average net assets (a) . 0.29% 0.64% 1.36% 0.88% 0.94%
Portfolio turnover rate ......................................... 26.25% 100.90% 19.90% 12.95% 1.30%
====================================================================================================================================
If the Fund had paid all of their expenses without the
adviser's voluntary expense reimbursement, the ratios would
have been as follows:
Ratio of expenses to average net assets (a) ................... 1.54% 1.74% 1.91% 2.10% 2.32%
Ratio of net investment income (loss) to average net assets (a) 0.29% 0.64% 1.36% 0.88% 0.77%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
90 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/29/99 4/30/99 4/30/98 4/30/97
===============================================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period................................ $ 11.23 $ 11.05 $ 11.34 $ 10.98
Income from Investment Operations
- ---------------------------------
Net investment income............................................... (0.04) (0.03) 0.13 --
Net realized and unrealized gain (loss) on investments.............. 1.16 0.64 0.49 0.36
- -------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations.................................... 1.12 0.61 0.62 0.36
- -------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income............................................... -- (0.34) (0.33) --
Net realized capital gains.......................................... -- (0.09) (0.58) --
- -------------------------------------------------------------------------------------------------------------------------------
Total Distributions................................................. -- (0.43) (0.91) --
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value.......................... 1.12 0.18 (0.29) 0.36
Net asset value: End of period ..................................... $ 12.35 $ 11.23 $ 11.05 $ 11.34
===============================================================================================================================
Total return (b).................................................... 9.97% 5.72% 6.30% 3.28%
Net assets, end of period (in millions)............................. $ 11.3 $ 9.8 $ 7.9 $ 2.6
Ratio of expenses to average net assets (a)......................... 2.63% 2.85% 2.90% 2.94%
Ratio of net investment income (loss) to average net assets (a)..... (0.81)% (0.52)% 0.34% (0.03)%
Portfolio turnover rate............................................. 26.25% 100.90% 19.90% 12.95%
- -------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without
the adviser's voluntary expense reimbursement, the
ratios would have been as follows:
Ratio of expenses to average net assets (a)........................ 2.63% 2.85% 2.90% 2.94%
Ratio of net investment income (loss) to average net assets (a).... (0.81)% (0.52)% 0.34% (0.03)%
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
</TABLE>
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
=================================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period................................................ $ 11.37 $ 11.17 $ 10.11
Income from Investment Operations
- ---------------------------------
Net investment income............................................................... 0.06 0.15 0.03
Net realized and unrealized gain (loss) on investments.............................. 1.20 0.65 1.03
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations.................................................... 1.26 0.80 1.06
- ---------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income............................................................... -- (0.51) --
Net realized capital gains.......................................................... -- (0.09) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions................................................................. -- (0.60) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value.......................................... 1.26 0.20 1.06
Net asset value: End of period ..................................................... $ 12.63 $ 11.37 $ 11.17
=================================================================================================================================
Total return (b).................................................................... 11.08% 7.49% 10.48%
Net assets, end of period (in millions)............................................. $ 2.2 $ 1.9 $ 0.5
Ratio of expenses to average net assets (a)......................................... 0.83% 1.09% 1.19%
Ratio of net investment income (loss) to average net assets (a)..................... 0.96% 1.10% 2.38%
Portfolio turnover rate............................................................. 26.25% 100.90% 19.90%
- ---------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's voluntary
expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a)........................................ 0.83% 1.09% 1.19%
Ratio of net investment income (loss) to average net assets (a).................... 0.96% 1.10% 2.38%
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
</TABLE>
The AAL Mutual Funds Semi-Annual Report 91
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL Capital Growth Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98 4/30/97 4/30/96 04/30/95
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value: Beginning of period............... $ 35.87 $ 29.64 $ 21.50 $ 18.79 $ 15.56 $ 14.49
Income from Investment Operations
- ---------------------------------
Net investment income.............................. 0.06 0.09 0.10 0.13 0.20 0.27
Net realized and unrealized gain (loss)
on investments..................................... 1.36 6.69 9.26 3.68 3.76 1.70
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations................... 1.42 6.78 9.36 3.81 3.96 1.97
===================================================================================================================================
Less Distributions from:
- ------------------------
Net investment income.............................. (0.03) (0.09) (0.08) (0.15) (0.22) (0.30)
Net realized capital gains......................... -- (0.46) (1.14) (0.95) (0.51) (0.60)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions................................ (0.03) (0.55) (1.22) (1.10) (0.73) (0.90)
===================================================================================================================================
Net increase (decrease) in net asset value......... 1.39 6.23 8.14 2.71 3.23 1.07
Net asset value: End of period..................... $ 37.26 $ 35.87 $ 29.64 $ 21.50 $ 18.79 $ 15.56
===================================================================================================================================
Total return (b)................................... 3.96% 23.20% 44.48% 20.55% 25.85% 14.37%
Net assets, end of period (in millions)............ $3,839.0 $3,594.5 $2,766.7 $1,794.4 $1,381.4 $1,032.2
Ratio of expenses to average net assets (a)........ 0.93% 0.97% 0.98% 1.06% 1.12% 1.17%
Ratio of net investment income (loss) to
average net assets (a)............................. 0.31% 0.30% 0.39% 0.62% 1.16% 1.89%
Portfolio turnover rate............................ 2.79% 8.74% 17.96% 24.30% 44.26% 33.34%
- -----------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses
without the adviser's voluntary expense
reimbursement, the ratios would have been
as follows:
Ratio of expenses to average net assets (a)....... 0.93% 0.97% 0.98% 1.06% 1.12% 1.17%
Ratio of net investment income (loss) to
average net assets (a)............................ 0.31% 0.30% 0.39% 0.62% 1.16% 1.89%
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
</TABLE>
92 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/29/99 4/30/99 4/30/98 4/30/97
=============================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period.................... $ 35.29 $ 29.38 $ 21.45 $ 20.66
Income from Investment Operations
- ---------------------------------
Net investment income................................... 0.12 (0.19) 0.04 (0.01)
Net realized and unrealized gain (loss) on investments.. 1.32 6.56 9.06 0.80
- -------------------------------------------------------------------------------------------------------------
Total from Investment Operations........................ (1.20) 6.37 9.10 0.79
=============================================================================================================
Less Distributions from:
- ------------------------
Net investment income................................... -- -- (0.03) --
Net realized capital gains.............................. -- (0.46) (1.14) --
- -------------------------------------------------------------------------------------------------------------
Total Distributions..................................... -- (0.46) (1.17) --
=============================================================================================================
Net increase (decrease) in net asset value.............. 1.20 5.91 7.93 0.79
Net asset value: End of period.......................... $ 36.49 $ 35.29 $ 29.38 $ 21.45
=============================================================================================================
Total return (b)........................................ 3.40% 21.94% 43.25% 3.82%
Net assets, end of period (in millions)................. $ 126.1 $ 107.6 $ 54.9 $ 11.0
Ratio of expenses to average net assets (a)............. 1.96% 1.99% 1.90% 1.89%
Ratio of net investment income (loss) to average net
assets (a)............................................. (0.72)% (0.74)% (0.58)% (0.39)%
Portfolio turnover rate................................. 2.79% 8.74% 17.96% 24.30%
- -------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the
adviser's voluntary expense reimbursement, the ratios
would have been as follows:
Ratio of expenses to average net assets (a)............ 1.96% 1.99% 1.90% 1.89%
Ratio of net investment income (loss) to average net
assets (a)............................................ (0.72)% (0.74)% (0.58)% (0.39)%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
==============================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period.................... $ 35.89 $ 29.67 $ 26.05
Income from Investment Operations
- ---------------------------------
Net investment income................................... 0.13 0.21 0.02
Net realized and unrealized gain (loss) on investments.. 1.37 6.67 3.60
- ----------------------------------------------------------------------------------------------
Total from Investment Operations........................ 1.50 6.88 3.62
==============================================================================================
Less Distributions from:
- ------------------------
Net investment income................................... (0.09) (0.20) --
Net realized capital gains.............................. -- (0.46) --
- ----------------------------------------------------------------------------------------------
Total Distributions..................................... (0.09) (0.66) --
==============================================================================================
Net increase (decrease) in net asset value.............. 1.41 6.22 3.62
Net asset value: End of period.......................... $ 37.30 $ 35.89 $ 29.67
==============================================================================================
Total return (b)........................................ 4.17% 23.55% 13.90
Net assets, end of period (in millions)................. $ 59.0 $ 46.9 $ 3.0
Ratio of expenses to average net assets (a)............. 0.54% 0.60% 0.58%
Ratio of net investment income (loss) to average net
assets (a)............................................. 0.70% 0.62% 0.52%
Portfolio turnover rate................................. 2.79% 8.74% 17.96%
- ----------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the
adviser's voluntary expense reimbursement, the ratios
would have been as follows:
Ratio of expenses to average net assets (a)............ 0.54% 0.60% 0.58%
Ratio of net investment income (loss) to average net
assets (a)............................................ 0.70% 0.62% 0.52%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
The AAL Mutual Funds Semi-Annual Report 93
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL Equity Income Fund
<TABLE>
<CAPTION>
Period Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98 4/30/97 4/30/96 04/30/95
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value: Beginning of period............... $ 14.68 $ 14.31 $ 11.34 $ 10.90 $ 9.47 $ 9.95
Income from Investment Operations
- ---------------------------------
Net investment income.............................. 0.08 0.16 0.27 0.39 0.36 0.34
Net realized and unrealized gain (loss)
on investments..................................... (0.62) 1.17 3.44 0.46 1.42 (0.50)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations................... (0.54) 1.33 3.71 0.85 1.78 (0.16)
- ----------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- -----------------------
Net investment income.............................. (0.08) (0.17) (0.29) (0.41) (0.35) (0.32)
Net realized capital gains......................... -- (0.79) (0.45) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions................................ (0.08) (0.96) (0.74) (0.41) (0.35) (0.32)
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value......... (0.62) 0.37 2.97 0.44 1.43 (0.48)
Net asset value: End of period..................... $ 14.06 $ 14.68 $ 14.31 $ 11.34 $ 10.90 $ 9.47
==================================================================================================================================
Total return (b)................................... (3.68)% 10.08% 33.50% 7.88% 18.90% (1.51)%
Net assets, end of period (in millions)............ $271.4 $262.2 $197.7 $134.2 $114.5 $70.9
Ratio of expenses to average net assets (a)........ 0.98% 1.05% 1.11% 1.15% 1.20% 1.19%
Ratio of net investment income (loss) to
average net assets (a)............................. 1.06% 1.22% 2.17% 3.57% 3.58% 4.08%
Portfolio turnover rate............................ 7.65% 13.35% 64.00% 5.14% 21.79% 24.65%
- ----------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses
without the adviser's voluntary expense
reimbursement, the ratios would have been
as follows:
Ratio of expenses to average net assets (a)....... 0.98% 1.05% 1.11% 1.15% 1.20% 1.19%
Ratio of net investment income (loss) to
average net assets (a)............................ 1.06% 1.22% 2.17% 3.57% 3.58% 4.08%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
94 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/29/99 4/30/99 4/30/98 4/30/97
================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period ................................... $14.66 $14.31 $11.37 $11.40
Income from Investment Operations
- ---------------------------------
Net investment income .................................................. -- 0.02 0.19 0.05
Net realized and unrealized gain (loss) on investments ................. (0.61) 1.17 3.41 (0.06)
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ....................................... (0.61) 1.19 3.60 (0.01)
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income .................................................. (0.01) (0.05) (0.21) (0.02)
Net realized capital gains ............................................. -- (0.79) (0.45) --
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions .................................................... (0.01) (0.84) (0.66) (0.02)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ............................. (0.62) 0.35 2.94 (0.03)
Net asset value: End of period ......................................... $14.04 $14.66 $14.31 $11.37
================================================================================================================================
Total return (b) ....................................................... (4.17)% 8.97% 32.42% (0.04)%
Net assets, end of period (in millions) ................................ $10.7 $ 9.6 $ 3.8 $ 0.5
Ratio of expenses to average net assets (a) ............................ 2.03% 2.09% 2.04% 1.99%
Ratio of net investment income (loss) to average net assets (a) ........ 0.01% 0.16% 0.96% 2.36%
Portfolio turnover rate ................................................ 7.65% 13.35% 64.00% 5.14%
- --------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a) .......................... 2.03% 2.09% 2.04% 1.99%
Ratio of net investment income (loss) to average net assets (a) ...... 0.01% 0.16% 0.96% 2.36%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
=====================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period ................................... $14.70 $14.32 $13.14
Income from Investment Operations
- ---------------------------------
Net investment income .................................................. 0.11 0.21 0.08
Net realized and unrealized gain (loss) on investments ................. (0.62) 1.19 1.16
- ---------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ....................................... (0.51) 1.40 1.24
- ---------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income .................................................. (0.11) (0.23) (0.06)
Net realized capital gains ............................................. -- (0.79) --
- ---------------------------------------------------------------------------------------------------------------------
Total Distributions .................................................... (0.11) (1.02) (0.06)
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ............................. (0.62) 0.38 1.18
Net asset value: End of period ......................................... $14.08 $14.70 $14.32
=====================================================================================================================
Total return (b) ....................................................... (3.46)% 10.62% 9.34%
Net assets, end of period (in millions) ................................ $13.6 $13.2 $ 7.1
Ratio of expenses to average net assets (a) ............................ 0.51% 0.60% 0.68%
Ratio of net investment income (loss) to average net assets (a) ........ 1.54% 1.65% 2.10%
Portfolio turnover rate ................................................ 7.65% 13.35% 64.00%
- ---------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a) .......................... 0.51% 0.60% 0.68%
Ratio of net investment income (loss) to average net assets (a) ...... 1.54% 1.65% 2.10%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
The AAL Mutual Funds Semi-Annual Report 95
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL Balanced Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98
===================================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period...................................................... $ 12.15 $ 10.81 $ 10.00
Income from Investment Operations
- ---------------------------------
Net investment income..................................................................... 0.14 0.21 0.04
Net realized and unrealized gain (loss) on investments.................................... 0.05 1.34 0.80
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations.......................................................... 0.19 1.55 0.84
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- -----------------------
Net investment income..................................................................... (0.14) (0.20) (0.03)
Net realized capital gains................................................................ -- (0.01) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions....................................................................... (0.14) (0.21) (0.03)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value................................................ 0.05 1.34 0.81
Net asset value: End of period............................................................ $ 12.20 $ 12.15 $ 10.81
====================================================================================================================================
Total return (b).......................................................................... 1.60% 14.45% 8.37%
Net assets, end of period (in millions)................................................... $219.5 $158.3 $ 27.7
Ratio of expenses to average net assets (a)............................................... 1.14% 1.15% 1.37%
Ratio of net investment income (loss) to average net assets (a)........................... 2.58% 2.26% 2.19%
Portfolio turnover rate................................................................... 52.81% 213.46% 11.52%
- ------------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's voluntary expense
reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a).............................................. 1.14% 1.23% 1.63%
Ratio of net investment income (loss) to average net assets (a).......................... 2.58% 2.17% 1.93%
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and distributions
but does not reflect any deduction for sales charge. Periods less than one year are not
annualized.
</TABLE>
96 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS B SHARES 10/29/99 4/30/99 4/30/98
==================================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period.................................................... $12.10 $10.79 $10.00
Income from Investment Operations
- ---------------------------------
Net investment income................................................................... 0.08 0.14 0.03
Net realized and unrealized gain (loss) on investments.................................. 0.05 1.31 0.78
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.13 1.45 0.81
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income .................................................................. (0.08) (0.13) (0.02)
Net realized capital gains.............................................................. -- (0.01) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.08) (0.14) (0.02)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value.............................................. 0.05 1.31 0.79
Net asset value: End of period ......................................................... $12.15 $12.10 $10.79
===================================================================================================================================
Total return (b) ...................................................................... 1.12% 13.47% 8.10%
Net assets, end of period (in millions)................................................. $15.6 $11.9 $2.3
Ratio of expenses to average net assets (a)............................................. 2.16% 1.98% 2.11%
Ratio of net investment income (loss) to average net assets (a)......................... 1.56% 1.42% 1.45%
Portfolio turnover rate................................................................. 52.81% 213.46% 11.52%
- -----------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's voluntary expense
reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a) ........................................... 2.38% 2.18% 2.50%
Ratio of net investment income (loss) to average net assets (a)........................ 1.34% 1.22% 1.06%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
===================================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period ................................................... $12.13 $10.79 $10.00
Income from Investment Operations
- ---------------------------------
Net investment income................................................................... 0.17 0.23 0.04
Net realized and unrealized gain (loss) on investments.................................. 0.06 1.35 0.78
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations........................................................ 0.23 1.58 0.82
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income .................................................................. (0.17) (0.23) (0.03)
Net realized capital gains.............................................................. -- (0.01) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions..................................................................... (0.17) (0.24) (0.03)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value.............................................. 0.06 1.34 0.79
Net asset value: End of period ......................................................... $12.19 $12.13 $10.79
===================================================================================================================================
Total return (b)........................................................................ 1.91% 14.73% 8.17%
Net assets, end of period (in millions)................................................. $3.4 $2.3 $1.1
Ratio of expenses to average net assets (a)............................................. 0.52% 0.88% 1.95%
Ratio of net investment income (loss) to average net assets (a)......................... 3.20% 2.50% 1.73%
Portfolio turnover rate................................................................. 52.81% 213.46% 11.52%
- -----------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's voluntary expense
reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a)............................................ 0.52% 0.88% 1.95%
Ratio of net investment income (loss) to average net assets (a)........................ 3.20% 2.50% 1.73%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
The AAL Mutual Funds Semi-Annual Report 97
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL High Yield Bond Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98 4/30/96
===============================================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period ................................... $ 8.92 $ 10.31 $ 9.88 $ 10.00
Income from Investment Operations
- ---------------------------------
Net investment income .................................................. 0.43 0.91 0.92 0.27
Net realized and unrealized gain (loss) on investments ................. (1.09) (1.33) 0.53 (0.12)
- -------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ....................................... (0.66) (0.42) 1.45 0.15
- -------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income .................................................. (0.43) (0.91) (0.92) (0.27)
Net realized capital gains ............................................. -- (0.06) (0.10) --
- -------------------------------------------------------------------------------------------------------------------------------
Total Distributions .................................................... (0.43) (0.97) (1.02) (0.27)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ............................. (1.09) (1.39) 0.43 (0.12)
Net asset value: End of period ......................................... $ 7.83 $ 8.92 $ 10.31 $ 9.88
===============================================================================================================================
Total return (b) ....................................................... (7.54)% (3.96)% 15.12% 1.51%
Net assets, end of period (in millions) ................................ $130.8 $131.9 $100.8 $ 44.7
Ratio of expenses to average net assets (a) ............................ 1.00% 1.00% 0.99% 1.00%
Ratio of net investment income (loss) to average net assets (a) ........ 10.44% 9.81% 8.94% 9.11%
Portfolio turnover rate ................................................ 24.41% 54.67% 112.37% 36.90%
- -------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a) .......................... 1.11% 1.16% 1.18% 1.28%
Ratio of net investment income (loss) to average net assets (a) ...... 10.33% 9.64% 8.75% 8.83%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
98 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/29/99 4/30/99 4/30/98 4/30/97
===============================================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period ................................... $ 8.92 $10.31 $ 9.88 $10.00
Income from Investment Operations
- ---------------------------------
Net investment income .................................................. 0.41 0.84 0.84 0.25
Net realized and unrealized gain (loss) on investments ................. (1.09) (1.33) 0.53 (0.12)
- -------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ....................................... (0.68) (0.49) 1.37 0.13
- -------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income .................................................. (0.41) (0.84) (0.84) (0.25)
Net realized capital gains ............................................. -- (0.06) (0.10) --
- -------------------------------------------------------------------------------------------------------------------------------
Total Distributions .................................................... (0.41) (0.90) (0.94) (0.25)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ............................. (1.09) (1.39) 0.43 (0.12)
Net asset value: End of period ......................................... $ 7.83 $ 8.92 $10.31 $ 9.88
===============================================================================================================================
Total return (b) ....................................................... (7.85)% (4.62)% 14.27% 1.31%
Net assets, end of period (in millions) ................................ $11.6 $12.4 $ 9.7 $ 2.7
Ratio of expenses to average net assets (a) ............................ 1.72% 1.71% 1.74% 1.75%
Ratio of net investment income (loss) to average net assets (a) ........ 9.72% 9.09% 8.22% 8.66%
Portfolio turnover rate ................................................ 24.41% 54.67% 112.37% 36.90%
- -------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a) .......................... 2.03% 1.98% 2.05% 2.00%
Ratio of net investment income (loss) to average net assets (a) ...... 9.41% 8.82% 7.90% 8.41%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
==================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period ................................... $ 8.91 $10.31 $10.29
Income from Investment Operations
- ---------------------------------
Net investment income .................................................. 0.45 0.93 0.31
Net realized and unrealized gain (loss) on investments ................. (1.09) (1.34) 0.02
- ------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ....................................... (0.64) (0.41) 0.33
- ------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income .................................................. (0.45) (0.93) (0.31)
Net realized capital gains ............................................. -- (0.06) --
- ------------------------------------------------------------------------------------------------------------------
Total Distributions .................................................... (0.45) (0.99) (0.31)
- ------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ............................. (1.09) (1.40) 0.02
Net asset value: End of period ......................................... $ 7.82 $ 8.91 $10.31
==================================================================================================================
Total return (b) ....................................................... (7.37)% (3.85)% 3.28%
Net assets, end of period (in millions) ................................ $ 2.3 $ 2.2 $ 0.2
Ratio of expenses to average net assets (a) ............................ 0.64% 0.76% 0.75%
Ratio of net investment income (loss) to average net assets (a) ........ 10.81% 10.34% 9.53%
Portfolio turnover rate ................................................ 24.41% 54.67% 112.37%
- ------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a) .......................... 0.64% 0.76% 0.75%
Ratio of net investment income (loss) to average net assets (a) ...... 10.81% 10.34% 9.53%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
The AAL Mutual Funds Semi-Annual Report 99
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL Municipal Bond Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98 4/30/97 4/30/96 4/30/95
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value: Beginning of period................... $ 11.47 $ 11.40 $ 10.92 $ 10.91 $ 10.69 $ 10.56
Income from Investment Operations
- ---------------------------------
Net investment income.................................. 0.26 0.52 0.52 0.52 0.52 0.52
Net realized and unrealized gain (loss) on investments. (0.99) 0.25 0.61 0.19 0.30 0.19
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations....................... (0.73) 0.77 1.13 0.71 0.82 0.71
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income.................................. (0.26) (0.52) (0.52) (0.52) (0.52) (0.52)
Net realized capital gains............................. -- (0.18) (0.13) (0.18) (0.08) (0.06)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions.................................... (0.26) (0.70) (0.65) (0.70) (0.60) (0.58)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value............. (0.99) 0.07 0.48 0.01 0.22 0.13
Net asset value: End of period......................... $ 10.48 $ 11.47 $ 11.40 $ 10.92 $ 10.91 $ 10.69
====================================================================================================================================
Total return (b)....................................... (6.45)% 6.80% 10.50% 6.64% 7.74% 7.01%
Net assets, end of period (in millions)................ $ 486.4 $ 523.1 $ 467.1 $ 421.7 $ 412.8 $ 377.8
Ratio of expenses to average net assets (a)............ 0.82% 0.81% 0.85% 0.89% 0.95% 0.98%
Ratio of net investment income (loss) to average net
assets (a)............................................ 4.72% 4.47% 4.55% 4.69% 4.69% 5.01%
Portfolio turnover rate................................ 97.81% 94.56% 139.18% 119.79% 130.52% 172.49%
- ------------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the
adviser's voluntary expense reimbursement, the ratios
would have been as follows:
Ratio of expenses to average net assets (a)........... 0.82% 0.81% 0.85% 0.89% 0.95% 0.98%
Ratio of net investment income (loss) to average net
assets (a)........................................... 4.72% 4.47% 4.55% 4.69% 4.69% 5.01%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
100 The AAL Mutual Funds Semi-Annual Report
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL Municipal Bond Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended
CLASS B SHARES 10/29/99 4/30/99 4/30/98 4/30/97
=============================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period.................... $ 11.47 $ 11.40 $ 10.92 $ 11.02
Income from Investment Operations
- ---------------------------------
Net investment income................................... 0.21 0.42 0.42 0.14
Net realized and unrealized gain (loss) on investments.. (1.00) 0.25 0.61 (0.10)
- -------------------------------------------------------------------------------------------------------------
Total from Investment Operations........................ (0.79) 0.67 1.03 0.04
- -------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income................................... (0.21) (0.42) (0.42) (0.14)
Net realized capital gains.............................. -- (0.18) (0.13) --
- -------------------------------------------------------------------------------------------------------------
Total Distributions..................................... (0.21) (0.60) (0.55) (0.14)
- -------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value.............. (1.00) 0.07 0.48 0.10
Net asset value: End of period.......................... $ 10.47 $ 11.47 $ 11.40 $ 10.92
=============================================================================================================
Total return (b)........................................ (6.92)% 5.93% 9.58% 0.34%
Net assets, end of period (in millions)................. $ 7.7 $ 7.5 $ 3.6 $ 0.8
Ratio of expenses to average net assets (a)............. 1.65% 1.64% 1.74% 1.69%
Ratio of net investment income (loss) to average net
assets (a)............................................. 3.90% 3.65% 3.67% 4.09%
Portfolio turnover rate................................. 97.81% 94.56% 139.18% 119.79%
- -------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the
adviser's voluntary expense reimbursement, the ratios
would have been as follows:
Ratio of expenses to average net assets (a)............ 1.65% 1.64% 1.74% 1.69%
Ratio of net investment income (loss) to average net
assets (a)............................................ 3.90% 3.65% 3.67% 4.09%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
==============================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period.................... $ 11.47 $ 11.40 $ 11.59
Income from Investment Operations
- ---------------------------------
Net investment income................................... 0.28 0.55 0.18
Net realized and unrealized gain (loss) on investments.. (1.00) 0.25 (0.19)
- ----------------------------------------------------------------------------------------------
Total from Investment Operations........................ (0.72) 0.80 (0.01)
- ----------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income................................... (0.28) (0.55) (0.18)
Net realized capital gains.............................. -- (0.18) --
- ----------------------------------------------------------------------------------------------
Total Distributions..................................... (0.28) (0.73) (0.18)
- ----------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value.............. (1.00) 0.07 (0.19)
Net asset value: End of period.......................... $ 10.47 $ 11.47 $ 11.40
==============================================================================================
Total return (b)........................................ (6.39)% 7.09% (0.09)%
Net assets, end of period (in millions)................. $ 1.4 $ 0.6 $ 0.0
Ratio of expenses to average net assets (a)............. 0.50% 0.51% 0.60%
Ratio of net investment income (loss) to average net
assets (a)............................................. 5.09% 4.78% 4.79%
Portfolio turnover rate................................. 97.81% 94.56% 139.18%
- ----------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the
adviser's voluntary expense reimbursement, the ratios
would have been as follows:
Ratio of expenses to average net assets (a)............ 0.50% 0.51% 0.60%
Ratio of net investment income (loss) to average net
assets (a)............................................ 5.09% 4.78% 4.79%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
The AAL Mutual Funds Semi-Annual Report 101
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL Bond Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98 4/30/97 4/30/96 4/30/95
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value: Beginning of period .............. $ 9.92 $ 9.99 $ 9.63 $ 9.62 $ 9.61 $ 9.69
Income from Investment Operations
- ---------------------------------
Net investment income ............................. 0.28 0.53 0.57 0.60 0.58 0.58
Net realized and unrealized gain (loss) on
investments ..................................... (0.38) (0.07) 0.36 0.01 0.01 (0.08)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations .................. (0.10) 0.46 0.93 0.61 0.59 0.50
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income ............................. (0.28) (0.53) (0.57) (0.60) (0.58) (0.58)
Net realized capital gains ........................ -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions ............................... (0.28) (0.53) 0.57 (0.60) (0.58) (0.58)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........ (0.38) (0.07) 0.36 0.01 0.01 (0.08)
Net asset value: End of period .................... $ 9.54 $ 9.92 $ 9.99 $ 9.63 $ 9.62 $ 9.61
===================================================================================================================================
Total return (b) .................................. (1.01)% 4.61% 9.86% 6.43% 6.18% 5.47%
Net assets, end of period (in millions) ........... $351.6 $367.2 $353.4 $389.3 $430.8 $429.4
Ratio of expenses to average net assets (a) ....... 0.91% 0.93% 0.95% 0.98% 1.01% 1.03%
Ratio of net investment income (loss) to average
net assets (a) .................................. 5.82% 5.23% 5.77% 6.10% 5.89% 6.12%
Portfolio turnover rate ........................... 123.84% 572.56% 483.76% 212.49% 125.77% 44.57%
- -----------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without
the adviser's voluntary expense reimbursement, the
ratios would have been as follows:
Ratio of expenses to average net assets (a) ..... 0.91% 0.93% 0.95% 0.98% 1.01% 1.03%
Ratio of net investment income (loss) to
average net assets (a) ........................ 5.82% 5.23% 5.77% 6.10% 5.89% 6.12%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
102 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/29/99 4/30/99 4/30/98 4/30/97
===================================================================================================================================
<S> <C> <C> <C> <C>
Net asset value: Beginning of period...................................... $9.92 $9.99 $9.64 $9.71
Income from Investment Operations
- ---------------------------------
Net investment income..................................................... 0.23 0.43 0.48 0.18
Net realized and unrealized gain (loss) on investments.................... (0.38) (0.07) 0.35 (0.07)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations.......................................... (0.15) 0.36 0.83 0.11
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income..................................................... (0.23) (0.43) (0.48) (0.18)
Net realized capital gains................................................ -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions....................................................... (0.23) (0.43) (0.48) (0.18)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value................................ (0.38) (0.07) 0.35 (0.07)
Net asset value: End of period ........................................... $9.54 $9.92 $9.99 $9.64
===================================================================================================================================
Total return (b).......................................................... (1.49)% 3.60% 8.75% 0.96%
Net assets, end of period (in millions)................................... $3.6 $3.1 $1.4 $0.4
Ratio of expenses to average net assets (a)............................... 1.92% 1.90% 1.92% 1.86%
Ratio of net investment income (loss) to average net assets (a)........... 4.82% 4.28% 4.74% 5.51%
Portfolio turnover rate................................................... 123.84% 572.56% 483.76% 212.49%
- -----------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's voluntary
expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a).............................. 1.92% 1.90% 1.92% 1.86%
Ratio of net investment income (loss) to average net assets (a).......... 4.82% 4.28% 4.74% 5.51%
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and distributions but does not
reflect any deduction for sales charge. Periods less than one year are not annualized.
</TABLE>
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
===================================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period........................................................ $9.92 $9.99 $10.06
Income from Investment Operations
- ---------------------------------
Net investment income....................................................................... 0.30 0.57 0.20
Net realized and unrealized gain (loss) on investments...................................... (0.38) (0.07) (0.07)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations............................................................ (0.08) 0.50 0.13
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income....................................................................... (0.30) (0.57) (0.20)
Net realized capital gains.................................................................. -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distributions......................................................................... (0.30) (0.57) (0.20)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value.................................................. (0.38) (0.07) (0.07)
Net asset value: End of period ............................................................. $9.54 $9.92 $9.99
===================================================================================================================================
Total return (b)............................................................................ (0.81)% 5.02% 1.24%
Net assets, end of period (in millions)..................................................... $48.5 $44.7 $29.3
Ratio of expenses to average net assets (a)................................................. 0.51% 0.54% 0.56%
Ratio of net investment income (loss) to average net assets (a)............................. 6.53% 5.63% 6.29%
Portfolio turnover rate..................................................................... 123.84 572.56% 483.76%
- -----------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's voluntary expense
reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a)................................................ 0.51% 0.54% 0.56%
Ratio of net investment income (loss) to average net assets (a)............................ 6.53% 5.63% 6.29%
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
</TABLE>
The AAL Mutual Funds Semi-Annual Report 103
<PAGE>
Financial Highlights PER SHARE INFORMATION
The AAL Money Market Fund
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/29/99 4/30/99 4/30/98 4/30/97 4/30/96 4/30/95
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net asset value: Beginning of period....................$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations
- ---------------------------------
Net investment income................................... 0.02 0.05 0.05 0.05 0.05 0.04
Net realized and unrealized gain (loss) on investments.. -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations........................ 0.02 0.05 0.05 0.05 0.05 0.04
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions from:
- ------------------------
Net investment income................................... (0.02) (0.05) (0.05) (0.05) (0.05) (0.04)
Net realized capital gains.............................. -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions..................................... (0.02) (0.05) (0.05) (0.05) (0.05) (0.04)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value.............. -- -- -- -- -- --
Net asset value: End of period..........................$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====================================================================================================================================
Total return (b)........................................ 2.22% 4.68% 5.12% 5.21% 4.94% 3.92%
Net assets, end of period (in millions).................$ 319.6 $ 288.1 $ 240.7 $ 189.6 $ 116.0 $ 70.2
Ratio of expenses to average net assets (a)............. 0.75% 0.79% 0.68% 0.55% 0.83% 1.17%
Ratio of net investment income (loss) to average net
assets (a)............................................. 4.41% 4.54% 4.98% 4.91% 4.89% 3.95%
Portfolio turnover rate................................. N/A N/A N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the
adviser's voluntary expense reimbursement, the ratios
would have been as follows:
Ratio of expenses to average net assets (a)............ 1.07% 1.12% 1.04% 1.10% 1.28% 1.42%
Ratio of net investment income (loss) to average net
assets (a)............................................ 4.09% 4.22% 4.62% 4.36% 4.46% 3.70%
</TABLE>
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge. Periods
less than one year are not annualized.
104 The AAL Mutual Funds Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
Period Ended Year Ended Year Ended Period Ended
<S> <C> <C> <C> <C>
CLASS B SHARES 10/29/99 4/30/99 4/30/98 4/30/97
==================================================================================================================================
Net asset value: Beginning of period....................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations
- ---------------------------------
Net investment income...................................................... 0.02 0.04 0.04 0.01
Net realized and unrealized gain (loss) on investments..................... -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations........................................... 0.02 0.04 0.04 0.01
==================================================================================================================================
Less Distributions from:
- ------------------------
Net investment income...................................................... (0.02) (0.04) (0.04) (0.01)
Net realized capital gains................................................. -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions........................................................ (0.02) (0.04) (0.04) (0.01)
==================================================================================================================================
Net increase (decrease) in net asset value................................. -- -- -- --
Net asset value: End of period............................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
==================================================================================================================================
Total return (b)........................................................... 1.67% 3.67% 4.26% 1.32%
Net assets, end of period (in millions).................................... $ 2.2 $ 1.6 $ 1.2 $ 0.6
Ratio of expenses to average net assets (a)................................ 1.85% 2.79% 1.65% 1.78%
Ratio of net investment income (loss) to average net assets (a)............ 3.33% 2.54% 4.02% 3.81%
Portfolio turnover rate.................................................... N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a)................................ 2.19% 3.11% 2.01% 3.54%
Ratio of net investment income (loss) to average net assets (a)............ 2.99% 2.22% 3.67% 2.05%
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
</TABLE>
<TABLE>
Period Ended Year Ended Period Ended
CLASS I SHARES 10/29/99 4/30/99 4/30/98
==================================================================================================================================
<S> <C> <C> <C>
Net asset value: Beginning of period..................................................... $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations
- ---------------------------------
Net investment income.................................................................... 0.02 0.05 0.02
Net realized and unrealized gain (loss) on investments................................... -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations......................................................... 0.02 0.05 0.02
==================================================================================================================================
Less Distributions from:
- ------------------------
Net investment income.................................................................... (0.02) (0.05) (0.02)
Net realized capital gains............................................................... -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions...................................................................... (0.02) (0.05) (0.02)
==================================================================================================================================
Net increase (decrease) in net asset value............................................... -- -- --
Net asset value: End of period........................................................... $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------------------------------------------------------------------------------------------
Total return (b)......................................................................... 2.42% 4.99% 1.67%
Net assets, end of period (in millions).................................................. $ 18.6 $ 17.9 $ 0.2
Ratio of expenses to average net assets (a).............................................. 0.35% 0.49% 0.67%
Ratio of net investment income (loss) to average net assets (a).......................... 4.79% 4.76% 5.11%
Portfolio turnover rate.................................................................. N/A N/A N/A
==================================================================================================================================
If the Fund had paid all of their expenses without the adviser's
voluntary expense reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a)............................................ 0.58% 0.72% 1.43%
Ratio of net investment income (loss) to average net assets (a)........................ 4.57% 4.53% 4.36%
(a) Calculated on an annualized basis.
(b) Total return calculations assume reinvestment of all dividends and
distributions but does not reflect any deduction for sales charge.
Periods less than one year are not annualized.
</TABLE>
The AAL Mutual Funds Semi-Annual Report 105
<PAGE>
Board of Trustees
John O. Gilbert - Chairman of the Board
F. Gregory Campbell
Woodrow E. Eno
Richard L. Gady
John H. Pender
Edward W. Smeds
Lawrence M. Woods
Officers
Robert G. Same - President
James H. Abitz - Vice-President
Woodrow E. Eno - Vice-President
Charles D. Gariboldi - Treasurer
Fredrick D. Kelvsven - Secretary
Investment Adviser & Distributor
AAL Capital Management Corporation
222 West College Avenue
Appleton, WI 54919-0007
Sub-Adviser (The AAL International Fund Only)
Oechsle International Advisors, LLC
One International Place
Boston, MA 02110
Custodian
Citibank, N.A.
111 Wall Street
New York, NY 10043
Transfer Agent & Disbursing Agent
Firstar Trust Company
615 East Michigan Street
P.O. Box 2981
Milwaukee, WI 53201-2981
Legal Counsel
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, WI 53202
Independent Accountants
PricewaterhouseCoopers LLP
Suite 1500
100 East Wisconsin Avenue
Milwaukee, WI 53202
This report is submitted for the information of shareholders of The AAL Mutual
Funds. It is not authorized for distribution to prospective investors unless
preceded or accompanied by the current prospectus for The AAL Mutual Funds which
contains more complete information about the Funds, including investment
policies, charges and expenses.
[LOGO]
AAL Capital Management Corporation
--------------------------------------
A Subsidiary of Aid Association for Lutherans
222 W. College Ave, Appleton, WI 54919-0007
(800) 553-6319
www.aal.org . e-mail; [email protected]
Member NASD
C-50032SAR 12-99
