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Previous: BROKEN HILL PROPRIETARY CO LTD, 6-K, 2000-12-27 |
Next: AAL MUTUAL FUNDS, NSAR-A, 2000-12-27 |
October 31, 2000
Equity and Balanced Funds
Index Funds
Fixed-Income Funds
President's Letter..........................................
The Markets and Economy in Review...........................
Portfolio Perspectives
The AAL Technology Stock Fund...........................
The AAL Aggressive Growth Fund..........................
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 Small Cap Index Fund II.........................
The AAL Mid Cap Index Fund II...........................
The AAL Large Company Index Fund II.....................
The AAL High Yield Bond Fund............................
The AAL Municipal Bond Fund.............................
The AAL Bond Fund.......................................
The AAL Money Market Fund...............................
Schedule of Investments
The AAL Technology Stock Fund...........................
The AAL Aggressive Growth Fund..........................
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 Small Cap Index Fund II.........................
The AAL Mid Cap Index Fund II...........................
The AAL Large Company Index Fund II.....................
The AAL High Yield Bond Fund............................
The AAL Municipal Bond Fund.............................
The AAL Bond Fund.......................................
The AAL Money Market Fund...............................
Statement of Assets and Liabilities.........................
Statement of Operations.....................................
Statement of Changes in Net Assets..........................
Notes to Financial Statements...............................
A Note on Forward Looking Statements........................
Glossary of Terms...........................................
Financial Highlights
The AAL Technology Stock Fund...........................
The AAL Aggressive Growth Fund..........................
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 Small Cap Index Fund II.........................
The AAL Mid Cap Index Fund II...........................
The AAL Large Company Index Fund II.....................
The AAL High Yield Bond Fund............................
The AAL Municipal Bond Fund.............................
The AAL Bond Fund.......................................
The AAL Money Market Fund...............................
[PHOTO OF ROBERT G. SAME APPEARS HERE]
We are pleased to provide you with the Semi-Annual Report for The AAL Mutual Funds for the six months ended October 31, 2000. On the following pages, you will find in-depth information on each of The AAL Mutual Funds. We have included commentaries from each of the portfolio managers which review past market events that affected performance and discussion of their investment strategy. We hope you find their comments informative.
The AAL Mutual Funds family offers a broad spectrum of long-term investment choices to meet most investment needs; growth, income, tax-free – even international holdings. Whether you want to create a new investment program, further diversify your assets or take advantage of specific market opportunities, you have access to the Funds that may help you meet your needs.
On July 1, 2000, we added five new funds to our fund family. These include two aggressive, actively managed funds, The AAL Technology Stock Fund and The AAL Aggressive Growth Fund, and three index funds, The AALSmall Cap Index Fund II, The AAL Mid Cap Index Fund II, and The AAL Large Company Index Fund II.
The AAL Mutual Funds family now offers the following investment options for your investment needs:
Equity and Balanced Fund
Index Funds
Fixed-Income Funds
If you have any questions about your investments or this report, please contact your local AAL representative. You can also access your account information 24 hours a day at our Web site, www.aalcmc.org, or through our automated telephone line at (800) 553-6319. By dialing this number you can access and speak with a Mutual Fund Service Center representative. The service center representatives are available from 7 a.m. to 8 p.m. Monday through Thursday, 7 a.m. to 6 p.m. Fridays and 9 a.m. to 1 p.m. on Saturdays.
Thank you for your
continued confidence in The AAL Mutual Funds.
Sincerely,
/s/ Robert G. Same
Robert G. Same
President
[PHOTO OF JAMES H. ABITZ APPEARS HERE]
The economy and the financial markets have been on a roller coaster ride in year 2000. U.S. Gross Domestic Product (GDP) grew at a 2.70% annualized rate in the third quarter of 2000, a significant slowdown from previous quarters. The economy had been growing at a 5.50% annualized rate in the first half of the year. This slowdown in the economy has been orchestrated by the Federal Reserve Board (Fed) as they have been operating under a restrictive monetary policy over the past year and a half.
With the current economic slowdown in place, the Fed has held the federal funds target interest rate steady at 6.50% since May of this year. However, the Fed has maintained their inflationary bias, as the labor markets remain tight. The current unemployment rate is at an extremely low 3.90% level.
Like the economy, the equity markets have experienced tremendous volatility in 2000. After years of outstanding performance, large-cap stocks have struggled in 2000. The S&P 500 Index, a good proxy for the large cap market, had a return of (1.03)% for the last six months. This should be of no surprise given the 28.56% annual returns experienced in the S&P 500 over the past five calendar years. Within the large cap universe, however, the value-oriented stocks performed better than growth stocks. The AAL Equity Income Fund showed a six month return of 5.64%. With three years of history now in place since the Fund changed investment objective to become an equity income fund, the Fund ranks in the top 18% of its peers in the Lipper Equity Income universe which includes 228 funds.
Since the beginning of 2000, mid-cap and small-cap stocks have outperformed large-cap stocks. The good performance of the mid-cap and small-cap markets can be seen in our Funds. The AAL Mid Cap Stock Fund had a six month return of 12.61%, which exceeded the passive S&P Mid Cap 400 Index by over 4.00%. The S&P SmallCap 600 Index returned 6.83% for the past six months, while The AAL Small Cap Stock Fund exceeded that Index with a return of 8.70%.
Technology stocks were challenged during the past six months due to a slowing economy and risk aversion by investors. Concerns about a worldwide economic slowdown and expectations of lower spending by business on technology infrastructure sent technology investors to the sidelines. Technology returns have been in negative territory since August.
International markets have also had a difficult year in 2000. The EAFE Index was down by 9.01% during the past six months. The major factors that contributed to this are the slowing growth in various countries and a weak currency in the European countries.
This has been a positive environment for quality bonds. Interest rates have generally declined over the last six months, which have led to positive returns for bonds. The Lehman Brothers Aggregate Bond Index posted returns of 5.80%. Investment grade bonds in both the taxable and tax-exempt markets have done well while the high-yield bond market has struggled.
The past several years have
been great periods of economic growth and strong equity markets. The future
challenges of slower growth and volatile markets will dictate the need for
skilled professional investment managers. It will also be a time for everyone to
carefully review their allocation of assets to be assured that it is meeting
their risk tolerance and their long-term financial goals.
/s/ James H. Abitz
James H. Abitz
Chief Investment Officer
[PHOTO OF BRIAN FLANAGAN APPEARS HERE]
[PHOTO OF JIM GROSSMAN APPEARS HERE]
A Share Ticker . . . AATSX . . . A Share Assets . . . $20,972,325 . . . B Share Assets . . . $2,330,464 . . . I Share Assets . . . $8,368,511 . . . A Share NAV . . . $8.90 . . . B Share NAV . . . $8.89 . . . I Share NAV . . . $8.95 . . . Number of Securities in Portfolio . . . 77
How would you assess the Fund’s performance since inception?
On a relative basis, the Fund’s performance has been very good. On an absolute basis, the Fund’s performance and the technology market performance have been disappointing. The Fund returned (11.00)% for the period July 1, 2000, through October 31, 2000, compared to a return of (17.35)% percent for the Fund’s benchmark Index, the Goldman Sachs Technology Composite Index. While the relative performance against the benchmark has been extremely positive, nobody likes to lose money. The Fund’s performance compared to its benchmark was the result of better relative investments in the communications equipment, semiconductor and software industries.
With the down-turn in the technology sector, what strategy are you using to achieve your desired performance?
Last year, investors’ appetite for risk was insatiable; however, today’s investors have become very risk-averse. Several Federal Reserve Board interest rate increases and rising oil prices have made many investors worry that a sustained worldwide economic slowdown may be on the horizon, which will lower spending by businesses on technology infrastructure. Many dot.com company failures have also created uncertainties as to whether some technology business models will survive. As investors have become more risk averse, they have required a higher rate-of-return on their investments, and therefore, prices on technology stocks have fallen. Further, as technology stocks with good and bad business models rose last year, technology stocks with both good and bad business models are falling today. This has created some attractive long-term investment opportunities.
The current technology market places a premium on stock selection. The key to a successful investment strategy is to identify those companies with superior technologies, solid business models and excellent management teams that can create high barriers-to-entry for their competitors and high switching costs for their customers. That is our strategy for The AAL Technology Stock Fund – invest in today’s technology leaders and emerging technologies that will produce tomorrow’s leaders. We implement this strategy by diversifying our investments across many technology industries including, but not limited to, software, telecommunications and networking equipment, and semiconductors. With the recent technology market downturn, we believe there are many attractive opportunities to invest in technology leaders and potential leaders that will provide excellent returns over the next five years.
How do you go about finding and selecting new technology stocks?
Finding and making investments involves a number of steps. We begin by evaluating technologies using independent consultants’ analysis, Wall Street analysts, as well as customer testimonies. We interview management teams to ensure they can take the technologies and develop a viable business model. Reading and evaluating financial documents and other Securities and Exchange Commission filings also provides invaluable insights into potential or existing investments. When this analysis leads to a potentially attractive investment, we determine the size of the market that the company’s product addresses, how quickly the market will develop, what percentage of the market the company can attain and the company’s long-term profitability potential. Finally, we combine all of this information to determine a price for the company’s stock that will lead to an acceptable rate of return.
Is there a new technology you are excited about, that may have an impact on the Fund?
There are a number of technologies that we believe will create many opportunities for years to come. The advances that have been made in increasing bandwidth around the world will lead to new applications that utilize that bandwidth. These applications will lead to a desire for more bandwidth, which will create opportunities for the capital equipment providers. Currently, we have increased our investments in the companies that are creating applications that take advantage of the increased bandwidth, and the service providers that are using those applications to derive revenue from their customer bases.
/s/ Brian Flanagan /s/ Jim Grossman Brian Flanagan Jim Grossman Portfolio Manager Portfolio Manager
**Since the fund has been in existence for less than one year, mountain chart performance has not been shown.**
Total Returns/1/
October 31, 2000
Because the Fund has been in operation for less than a year, total returns are not annualized.
From Inception
Inception/2/ Date
---------------------------------------------------------------------------------------------------------------------------------------
Class A (without sales charge) (11.00)% 7/1/2000
Class A/3/ (with sales charge) (14.59)% 7/1/2000
Class B (without CDSC) (11.10)% 7/1/2000
Class B/3/ (with CDSC) (15.55)% 7/1/2000
Class I/4/ (10.50)% 7/1/2000
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/3/ (with sales charge) (3.55)%
Class B/3/ (with CDSC) (4.50)%
Class I/4/ 1.00%
/1/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. The Fund primarily invests in technology-related industries; as a
consequence, the Fund may be subject to greater price volatility than a fund investing in a broad range of industries.
/2/Total returns are not annualized and measure the cumulative change in the value of an investment in the Fund.
/3/Class A performance reflects the maximum sales charge of 4.00%. Class B performance reflects the maximum contingent deferred sales
charge (CDSC) of 5.00%, declining 1.00% each year during the first five years and then converting to Class A shares after the fifth
year.
/4/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF MICHAEL DUGAS APPEARS HERE]
A Share Ticker . . . AAAGX . . . A Share Assets . . . $26,835,672 . . . B Share Assets . . . $2,313,096 . . . I Share Assets . . . $7,273,050 . . . A Share NAV . . . $9.17 . . . B Share NAV . . . $9.15 . . . I Share NAV . . . $9.21 . . . Number of Securities in Portfolio . . . 64
How has the Fund performed since inception?
Since its inception on July 1, 2000, the Fund returned (8.30)% trailing its benchmark, the S&P 500 Index, which returned (2.39)% for the period. This under-performance was primarily due to the volatility in the technology sector and a depreciation in growth stocks. Wireless communications, an area in which we had broad exposure, bore the brunt as investors wrestled with ongoing valuation concerns and seasonal slowing. This was compounded by unrealistic and accelerating expectations for worldwide subscriber growth, which were scaled back in part because of the unexpectedly high fees being commanded for broadband spectrum licenses in the U.K. and Germany.
Which holdings have most affected the Fund’s performance?
Nokia, our top holding at period-end, proved a catalyst for much of the concern. When management warned in July of declining cell phone margins for the quarter ended September 30, 2000, investors took this as a sign that the wireless sector at large was experiencing a slowdown, and bid Nokia’s shares lower. Texas Instruments also felt the effects, a leading semiconductor manufacturer with close ties to the wireless industry. Although Texas Instruments will most likely track the market movements of its industry counterparts, its fundamentals are such that we would probably consider any sell-off to be a buying opportunity.
Are there any stocks that have performed particularly well for the Fund?
As efforts to deregulate the power industry gather steam, energy companies are able to compete on price, thereby capitalizing on supply and demand imbalances. Our position in Enron continued to benefit from these trends. More recently, it has leveraged its expertise in marketing power and natural gas commodities to introduce broadband trading to the telecommunications industry. Phone.com has also been a very successful position for us. The company, which helped establish the wireless application protocol (WAP), provides technology that allows wireless devices to access Internet content. A recent merger agreement with Software.com, a provider of enhanced e-mail services, brings a host of synergies to the combined company and positions it as a world-class infrastructure supplier for carriers. One application that seems particularly attractive is unified messaging, a totally integrated package offering voice mail, e-mail and fax mail all in one device, either in voice or text. Additionally, the new company will be headed by the highly regarded former Cisco Systems executive, Donald Listwin, a move we believe solidifies the credibility of the combination.
What are your investment strategies for the future?
Going forward, we continue
to believe that real and enduring value can only be created through exhaustive,
company-by-company research. Over time, that is how we find the most compelling
opportunities regardless of the market’s volatility.
/s/ Michael Dugas
Michael Dugas
Portfolio Manager
**Since the fund has been in existence for less than one year, mountain chart performance has not been shown.**
Total Returns/1/
October 31, 2000
Because the Fund has been in operation for less than a year, total returns are not annualized.
From Inception
Inception/2/ Date
Class A (without sales charge) (8.30)% 7/1/2000
Class A/3/ (with sales charge) (12.00)% 7/1/2000
Class B (without CDSC) (8.50)% 7/1/2000
Class B/3/ (with CDSC) (13.08)% 7/1/2000
Class I/4/ (7.90)% 7/1/2000
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/3/ (with sales charge) (7.87)%
Class B/3/ (with CDSC) (8.90)%
Class I/4/ (3.60)%
/1/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. Stock companies that offer the potential for accelerated earnings or
revenue growth are likely to have increased price volatility.
/2/Total returns are not annualized and measure the cumulative change in the value of an investment in the Fund.
/3/Class A performance reflects the maximum sales charge of 4.00%. Class B performance reflects the maximum contingent deferred sales
charge (CDSC) of 5.00%, declining 1.00% each year during the first five years and then converting to Class A shares after the fifth
year.
/4/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF KEVIN SCHMITTING APPEARS HERE]
A Share Ticker . . . AASMX . . . B Share Ticker . . . BBSMX . . . A Share Assets . . . $237,069,145 . . . B Share Assets . . . $29,867,829. . . I Share Assets . . . $1,622,419 . . . A Share NAV . . . $15.87 . . . B Share NAV . . . $15.40. . . I Share NAV. . . $16.13. . . Number of Securities in Portfolio . . . 174
Discuss the Fund’s performance over the past six months.
Returns for the Fund over the past six months were 8.70%. This exceeded the returns of the S&P SmallCap 600 Index, which returned 6.83% over the same period. We generated these returns by remaining true to our investment philosophy, “growth at the right price.” This means we look for stocks that have good long-term fundamentals for growth, and are selling at an attractive price.
The major market indices have not performed well over the last six months. What has been the key to your success?
With the exception of the Dow Jones Industrial Average, the major market indices were flat or negative over the past six months. To generate positive returns for the Fund in a negative market environment, we place an emphasis on individual stock selection. We use traditional valuation methods and select individual stocks that have a positive earnings outlook. We did not invest heavily in “high-flying” sectors like the Internet. We determined that many Internet stocks were over-priced and would have difficulty sustaining their high valuations. The decision to avoid most Internet stocks paid-off as many of these stocks declined substantially this past spring and summer.
The selection of individual stocks was the primary reason behind the Fund’s recent success, although sector allocation played a limited role. Several individual stocks have performed very well for the Fund, such as Horizon Offshore, which returned 67%, and UTI Energy, 16%. In addition, several biotechnology companies, such as Protein Design Labs and Vertex Pharmaceuticals returned over 100%. A handful of other companies, including Southdown, 21% and Alliant Techsystems, 30%, made important contributions to the Fund.
The best performer has been Shaw Group. The company is involved in the design and construction of power generation facilities throughout the world. During the past six months, there has been increasing awareness of the power shortage in the U.S. This has brought increased attention to the abilities of Shaw Group and to its stock price, which has increased more than 100% since the beginning of May. Essentially, our investment team has done a good job of picking stocks over the past few months.
Although individual stock selection is critical to the Fund’s success, is there a sector that has recently performed well for the Fund?
There are two sectors that have performed fairly well for the Fund during this period, financials and healthcare. Both sectors have benefited from the possibility of a slowing U.S. economy. Financial stocks usually benefit from a stable interest rate environment, like the current environment. Generally, healthcare stocks are not sensitive to a slower economy. There is an investor perception that the demand for healthcare services is not dependent on the overall economic situation. Sectors such as consumer retail or technology are adversely affected by a slowing economy and lower consumer demand. We have scaled back our investment in stocks that will be affected by what we believe will be a continued slowing economy.
The technology sector as a whole has not performed very well over the last six months. How is the Fund positioned in this sector?
The technology sector remains an important area for
the Fund. Approximately one-quarter of the Fund’s assets are invested in
the technology sector. It has been a difficult time for technology stocks during
the past six months, due to a slowing economy and risk aversion by investors.
However, the Fund’s technology stocks have done a little better than the
sector as a whole. Once again, we select stocks on an individual basis. The
Fund’s bias towards more traditional valuation measures was helpful, as the
technology stocks with the highest valuations seemed to have the most difficult
time. We believe there are good investments in the technology sector, but an
investment in the technology sector places a premium on solid stock selection.
/s/ Kevin Schmitting
Kevin Schmitting
Portfolio Manager
[MOUNTAIN CHART APPEARS HERE]
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
The AAL Small Cap Stock Fund S&P 600 Index
Date Total Value Value
1-Jul-96 9,600.00 10,000.00
31-Jul-96 9,165.07 9,312.00
30-Aug-96 10,316.70 9,887.20
30-Sep-96 10,786.95 10,320.85
31-Oct-96 10,441.46 10,249.43
29-Nov-96 10,681.38 10,781.79
31-Dec-96 11,008.07 10,908.05
31-Jan-97 11,047.38 11,089.45
28-Feb-97 10,565.78 10,860.01
31-Mar-97 9,887.61 10,302.56
30-Apr-97 9,671.38 10,428.77
30-May-97 11,145.67 11,653.63
30-Jun-97 11,912.30 12,168.72
31-Jul-97 12,452.88 12,933.76
29-Aug-97 12,836.20 13,259.44
30-Sep-97 13,789.57 14,136.28
31-Oct-97 13,229.34 13,526.16
28-Nov-97 13,101.57 13,427.42
31-Dec-97 12,863.43 13,698.52
30-Jan-98 12,646.28 13,431.40
27-Feb-98 13,701.00 14,654.73
31-Mar-98 14,145.63 15,214.39
30-Apr-98 14,311.08 15,304.01
29-May-98 13,215.00 14,493.81
30-Jun-98 13,235.68 14,536.42
31-Jul-98 12,480.83 13,424.24
31-Aug-98 9,647.57 10,833.10
30-Sep-98 10,412.76 11,496.62
30-Oct-98 10,950.46 12,030.53
30-Nov-98 11,777.69 12,707.60
31-Dec-98 12,543.29 13,519.75
29-Jan-99 12,617.83 13,350.07
26-Feb-99 11,350.72 12,146.83
31-Mar-99 11,137.76 12,303.65
30-Apr-99 11,595.62 13,116.55
28-May-99 11,829.88 13,435.81
30-Jun-99 12,309.04 14,200.57
30-Jul-99 12,490.05 14,075.18
31-Aug-99 11,915.06 13,455.87
30-Sep-99 11,915.06 13,512.79
29-Oct-99 11,851.18 13,478.87
30-Nov-99 12,745.60 14,042.43
31-Dec-99 14,193.73 15,196.85
31-Jan-00 13,586.79 14,725.90
29-Feb-00 15,684.44 16,698.00
31-Mar-00 15,876.10 16,080.67
30-Apr-00 15,546.02 15,805.05
31-May-00 15,439.54 15,336.59
30-Jun-00 16,536.28 16,243.44
31-Jul-00 15,599.26 15,844.66
31-Aug-00 17,302.93 17,249.13
29-Sep-00 17,292.28 16,779.44
31-Oct-00 16,898.31 16,884.48
*An unmanaged index comprised of 600 stocks designed to represent performance of the small cap segment of the U.S. equity markets. “S&P SmallCap 600 Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
Average Annual Total Returns/1/
October 31, 2000
From Inception
1-Year Inception Date
---------------------------------------------------------------------------------------------------------------------------------------
Class A (without sales charge) 42.59% 13.93% 7/1/1996
Class A/2/ (with sales charge) 36.93% 12.86% 7/1/1996
Class B (without CDSC) 41.03% 10.90% 1/8/1997
Class B/2/ (with CDSC) 37.03% 10.50% 1/8/1997
Class I/3/ 43.38% 12.00% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/2/ (with sales charge) 39.28% 13.76%
Class B/2/ (with CDSC) 39.59% 11.50%
Class I/3/ 46.11% 13.36%
/1/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.
/2/Class A performance has been restated to reflect the maximum sales charge of 4.00%. Prior to 1/8/97, this was 4.75%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of 5.00%, declining 1.00% each year during the first five
years and then converting to Class A shares after the fifth year.
/3/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF MICHAEL HOCHHOLZER APPEARS HERE]
A Share Ticker . . . AASCX . . . B Share Ticker . . . BBSCX . . . A Share Assets . . . $890,845,432 . . . B Share Assets . . . $34,152,027. . . I Share Assets . . . $22,826,014 . . . A Share NAV . . . $18.84. . . B Share NAV . . . $18.14 . . . I Share NAV. . . $19.06. . . Number of Securities in Portfolio . . . 114
How would you assess the Fund’s performance over the last six months?
The Fund performed exceptionally well during the past six months. The three key comparisons one has for making such an assessment are performance relative to a passive benchmark or index, performance relative to other similar funds, and performance relative to history. The Fund measured up to each of these remarkably well.
The passive benchmark for the Fund is the S&P MidCap 400 Index, a commonly accepted measure of the midcap market as a whole. The Fund’s six month 12.61% return exceeded the Index by over 4%. Over 90% of the performance resulted from superior stock selection, particularly in the technology and capital goods sectors. Our investment process strives to choose the best stocks from each sector and industry as opposed to attempting to choose which industries are likely to perform better than others. We were very successful at this during the six month period.
Our other benchmark for the Fund is the entire Lipper Universe of MidCap Stock Funds. This is a group of over 600 public mutual funds that share our mandate of investing in midcap stocks. While we cannot be as precise in identifying the reasons for our success in this comparison as in the Index comparison, we can infer from the historical pattern of returns and certain industry data that the Fund had fewer holdings in the technology sector than many of its competitors. Given that the technology sector of the S&PMidCap400 Index as a whole returned slightly less than 3% during the period, large holdings in that sector would have brought down performance. The combination of our more industry-diversified approach and good stock selection was a winning one for the most recent six-month period. These results also placed the Fund in the top 40% of this universe for the 12 months ended October 31, 2000.
The final comparison for the Fund is historical. The long-term history of the domestic stock market suggests that one should expect an annualized return on midcap stocks in the range of 10 to 14%. A six-month period that provided a return of 12.61% must be considered a rousing success.
What were some of the stocks that contributed to the Fund’s positive performance?
The largest contributor to the Fund was clearly EOG Resources. This stock returned over 58% and was a relatively large position in the Fund throughout the period. EOG is an energy exploration and production company focused primarily on natural gas. The macro event of limited natural gas supply and increasing demand caused commodity prices to rise and brought investor attention to the industry. A substantial majority EOG’s production is natural gas (the rest is oil), making it one of the most direct plays available on the price of natural gas. In addition, EOG was one of the few exploration and production companies that was able to increase its production during the first half of 2000.
Other large contributors included several healthcare and biotech companies. PerkinElmer returned 76%, Millennium Pharmaceuticals was up 82% and IDEC Pharmaceuticals 87% during the period. While each of these positions was relatively modest during the period, they combined to provide a substantial boost to the overall performance.
What is your outlook for the next six months?
Going forward, we continue to be cautiously optimistic about the midcap market. Overall, the health of midcap companies continues to be very good. We are presented with plenty of companies that have the ability to continue to grow, even if the economy slows to a more normal, low single-digit pace. The recent correction, particularly in the technology sector, has brought valuations down to far more rational levels than just nine months ago. Our greatest fear at this juncture is that the combination of rising energy prices and rising interest rates will push the economy, both here and around the globe, into a recession. That would provide a very difficult environment for stocks, and while certainly possible, we don’t see it as probable.
In addition, after nearly
five years of underperforming their large cap counterparts, mid cap stocks have
performed well, both absolutely and relatively, for over a year now. That has
attracted the attention and dollars of a wide variety of investors. This is a
trend we believe can continue for some time as relative valuations remain near
historical lows.
/s/ Michael R. Hochholzer
Michael R. Hochholzer
Portfolio Manager
[MOUNTAIN CHART APPEARS HERE]
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
The AAL Mid Cap
Stock Fund S&P Mid Cap 400
Date Value Value
30-Jun-93 9,600.00 10,000.00
30-Jul-93 9,491.36 9,980.80
31-Aug-93 9,923.22 10,392.91
30-Sep-93 10,393.47 10,502.66
29-Oct-93 10,268.71 10,536.89
30-Nov-93 9,942.42 10,303.82
31-Dec-93 10,422.26 10,782.12
31-Jan-94 10,758.16 11,032.91
28-Feb-94 10,786.95 10,876.36
31-Mar-94 10,019.19 10,372.56
29-Apr-94 9,961.61 10,449.74
31-May-94 9,404.99 10,350.78
30-Jun-94 8,598.85 9,994.30
29-Jul-94 8,637.24 10,332.70
31-Aug-94 9,443.38 10,873.83
30-Sep-94 9,510.56 10,670.92
31-Oct-94 9,932.82 10,787.55
30-Nov-94 9,577.74 10,301.04
30-Dec-94 9,923.22 10,395.60
31-Jan-95 9,520.15 10,504.34
28-Feb-95 10,009.60 11,054.97
31-Mar-95 10,508.64 11,246.78
28-Apr-95 10,479.85 11,472.61
31-May-95 10,614.20 11,749.45
30-Jun-95 11,631.48 12,227.77
31-Jul-95 12,811.90 12,865.69
31-Aug-95 12,735.12 13,103.58
29-Sep-95 13,522.07 13,421.21
31-Oct-95 13,742.80 13,075.88
30-Nov-95 14,309.02 13,646.90
29-Dec-95 14,337.81 13,612.92
31-Jan-96 14,299.42 13,810.45
29-Feb-96 14,980.81 14,279.86
29-Mar-96 15,095.97 14,450.94
30-Apr-96 16,410.75 14,892.27
31-May-96 17,024.95 15,093.61
28-Jun-96 15,950.10 14,867.06
31-Jul-96 14,059.50 13,861.30
30-Aug-96 15,028.79 14,660.68
30-Sep-96 15,825.34 15,299.89
31-Oct-96 15,009.60 15,344.41
29-Nov-96 15,796.55 16,208.76
31-Dec-96 15,591.79 16,226.75
31-Jan-97 16,154.38 16,835.90
28-Feb-97 15,603.27 16,697.51
31-Mar-97 14,455.12 15,985.70
30-Apr-97 14,592.90 16,400.21
30-May-97 16,154.38 17,834.24
30-Jun-97 16,843.26 18,335.21
31-Jul-97 17,934.00 20,150.57
29-Aug-97 17,968.44 20,126.19
30-Sep-97 19,288.81 21,283.05
31-Oct-97 18,358.81 20,357.02
28-Nov-97 18,266.96 20,658.71
31-Dec-97 18,403.73 21,460.48
30-Jan-98 17,971.90 21,051.87
27-Feb-98 19,280.10 22,796.02
31-Mar-98 20,080.26 23,824.12
30-Apr-98 20,232.67 24,258.91
29-May-98 19,051.48 23,167.50
30-Jun-98 19,419.81 23,313.68
31-Jul-98 18,213.22 22,409.81
31-Aug-98 14,187.00 18,238.45
30-Sep-98 15,291.99 19,941.01
30-Oct-98 16,269.97 21,723.14
30-Nov-98 17,171.74 22,807.12
31-Dec-98 18,785.99 25,562.68
29-Jan-99 18,732.16 24,567.52
26-Feb-99 17,669.06 23,281.17
31-Mar-99 18,140.05 23,931.64
30-Apr-99 18,691.79 25,819.37
28-May-99 19,391.55 25,931.17
30-Jun-99 20,468.11 27,319.78
30-Jul-99 20,225.89 26,739.24
31-Aug-99 19,539.58 25,822.62
30-Sep-99 19,108.96 25,025.47
29-Oct-99 19,862.55 26,300.77
30-Nov-99 20,683.43 27,681.30
31-Dec-99 22,228.61 29,326.40
31-Jan-00 21,261.53 28,500.57
29-Feb-00 23,537.01 30,495.04
31-Mar-00 24,475.65 33,047.17
28-Apr-00 23,793.00 31,893.16
31-May-00 23,465.90 31,495.13
30-Jun-00 24,944.97 31,957.80
31-Jul-00 24,774.30 32,462.73
31-Aug-00 27,789.32 36,087.19
29-Sep-00 28,002.64 35,840.00
31-Oct-00 26,793.79 34,624.66
*An unmanaged index comprised of 400 stocks designed to represent performance of the mid cap segment of the U.S. equity markets. “S&P MidCap 400 Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard &Poor’s make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
Average Annual Total Returns/1/
October 31, 2000
From Inception
1-Year 5-Year Inception Date
---------------------------------------------------------------------------------------------------------------------------------------
Class A (without sales charge) 34.90% 14.29% 15.01% 6/30/1993
Class A/2/ (with sales charge) 29.46% 13.35% 14.37% 6/30/1993
Class B (without CDSC) 33.24% N/A 13.80% 1/8/1997
Class B/2/ (with CDSC) 29.24% N/A 13.44% 1/8/1997
Class I/3/ 35.50% N/A 15.94% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/2/ (with sales charge) 40.70% 14.73% 15.25%
Class B/2/ (with CDSC) 40.92% N/A 15.20%
Class I/3/ 47.33% N/A 18.39%
/1/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.
/2/Class A performance has been restated to reflect the maximum sales charge of 4.00%. Prior to 1/8/97, this was 4.75%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of 5.00%, declining 1.00% each year during the first five
years and then converting to Class A shares after the fifth year.
/3/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF KATHLEEN HARRIS APPEARS HERE]
[PHOTO OF L. SEAN ROCHE APPEARS HERE]
A Share Ticker . . . AAITX . . . B Share Ticker . . . BBITX . . . A Share Assets . . . $216,494,369. . . B Share Assets . . . $15,374,720. . . I Share Assets . . . $3,318,500. . . A Share NAV . . . $12.61 . . . B Share NAV . . . $12.26 . . . I Share NAV . . . $12.73 . . . Number of Securities in Portfolio . . . 72
Discuss the Fund’s performance over the past six months.
Returns for the Fund over the past six months were (10.31)%. The EAFE Index also had negative returns for the same period. The Index returned (9.01)%. An international fund enhances return, as compared to the Index, through stock selection, industry and sector allocation, and country allocation. The Fund’s returns were primarily a result of stock selection and industry and sector allocation. The Fund remained close to the EAFE Index’s country allocation weightings, so country allocation had a minimal impact on the Fund’s performance.
Which sector has most affected the Fund’s performance?
The telecommunication, software, and financial sectors have had the most impact on the Fund’s portfolio. Software giant SAP’s earnings turnaround pushed the stock’s price higher during the period. Returns for telecommunication stocks were generally negative. On the positive side, Japan’s mobile telephone giant NTT DoCoMo continued to rally and had positive returns. On the other hand, the Dutch telecom company KPN lost roughly half its value in a savage reaction to the high cost of cellular licenses and the likelihood of further stock issuance to pay for the licenses. Vivendi, which is still struggling to convince the market of the wisdom of its Seagrams acquisition, also suffered the consequences of investor disillusion with the telecommunication sector. In the financial sector, global financial giant HSBC and Japan’s Sakura Bank posted positive returns.
How do you view the current international market?
The forces behind this period’s flight to quality have been formidable; higher short-term rates, slower growth, rising oil prices and a surging dollar rightly caused investors to reduce their risk appetite. We have positioned the Fund’s portfolio to withstand the temporary impact of these forces.
We see increasing reasons for optimism in international markets and are further encouraged by the fact that recent market declines have gone a long way toward restoring balance in sentiment and valuations. Finally, the advent of broader, deeper financial markets, higher technology spending and rising productivity abroad stands to boost international economies and markets over the long term as they have in the U.S. in recent years.
Do you foresee any investment opportunities?
A recent purchase
illustrates some of the opportunities we see developing. We have been
accumulating Sun Hung Kai Properties, Inc., the bellwether Hong Kong property
company, because we believe that a decisive inflection point is at hand in this
important property market. Our purchase in part reflects our faith that the Hong
Kong economy, embattled since the 1997 Asian crisis, is on the verge of
translating falling unemployment and the Chinese economic recovery into greater
economic activity. This investment also reflects our conviction that gradually
receding oil prices, a soft economic landing and a favorable inflation outlook
mean that the Federal Reserve Board is now done raising interest rates. Hong
Kong interest rates, tied closely to those in the U.S., will react positively
when this scenario becomes evident, and we expect Sun Hung Kai to benefit
substantially in this environment. This economic environment is important for
restoring global liquidity and investor appetite for risk, events which we see
as the basis for a more optimistic market outlook.
/s/ Kathleen M. Harris
Kathleen M. Harris
Portfolio Manager
/s/ L. Sean Roche
L. Sean Roche
Portfolio Manager
[MOUNTAIN CHART APPEARS HERE]
Value of a $10,000 Investment In Class A Shares - Including 4% Sales Charge
The AAL International Fund EAFE Index
Date Value Value
1-Aug-95 9,600.00 10,000.00
31-Aug-95 9,616.12 9,618.54
29-Sep-95 9,577.74 9,806.39
31-Oct-95 9,558.54 9,542.79
30-Nov-95 9,558.54 9,808.31
29-Dec-95 9,735.51 10,203.49
31-Jan-96 10,149.17 10,245.38
29-Feb-96 10,110.69 10,280.01
29-Mar-96 10,264.61 10,498.32
30-Apr-96 10,659.04 10,803.54
31-May-96 10,601.32 10,604.73
28-Jun-96 10,649.42 10,664.42
31-Jul-96 10,293.47 10,352.73
30-Aug-96 10,322.33 10,375.41
30-Sep-96 10,514.73 10,651.04
31-Oct-96 10,610.94 10,542.04
29-Nov-96 10,986.12 10,961.48
31-Dec-96 10,923.86 10,820.49
31-Jan-97 11,123.20 10,441.70
28-Feb-97 11,372.38 10,612.59
31-Mar-97 11,352.44 10,651.01
30-Apr-97 11,332.51 10,707.53
30-May-97 11,850.79 11,404.31
30-Jun-97 12,209.61 12,033.22
31-Jul-97 12,289.34 12,227.90
29-Aug-97 11,890.66 11,314.67
30-Sep-97 12,060.10 11,948.50
31-Oct-97 11,372.38 11,030.08
28-Nov-97 11,183.00 10,917.64
31-Dec-97 11,030.07 11,012.87
30-Jan-98 11,324.64 11,516.53
27-Feb-98 11,728.31 12,255.50
31-Mar-98 12,088.34 12,632.87
30-Apr-98 12,164.71 12,732.86
29-May-98 12,284.73 12,671.05
30-Jun-98 12,131.98 12,766.97
31-Jul-98 12,011.97 12,896.40
31-Aug-98 10,975.52 11,298.67
30-Sep-98 10,615.49 10,952.27
30-Oct-98 11,171.90 12,093.94
30-Nov-98 11,771.95 12,713.52
31-Dec-98 12,250.26 13,215.07
29-Jan-99 12,765.46 13,176.05
26-Feb-99 12,330.40 12,862.04
31-Mar-99 12,525.03 13,398.92
30-Apr-99 12,994.43 13,941.84
28-May-99 12,547.93 13,223.84
30-Jun-99 12,914.29 13,739.40
30-Jul-99 13,269.21 14,147.78
31-Aug-99 13,647.02 14,199.45
30-Sep-99 13,864.54 14,342.38
29-Oct-99 14,379.74 14,879.59
30-Nov-99 15,169.71 15,396.58
31-Dec-99 17,108.75 16,778.45
31-Jan-00 16,467.46 15,712.37
29-Feb-00 17,658.43 16,135.34
31-Mar-00 17,601.17 16,760.81
28-Apr-00 16,101.01 15,878.81
31-May-00 15,562.78 15,490.98
30-Jun-00 16,307.14 16,096.81
31-Jul-00 15,654.39 15,421.95
31-Aug-00 15,952.14 15,555.81
29-Sep-00 15,001.65 14,798.37
31-Oct-00 14,440.52 14,448.80
*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/1/
October 31, 2000
From Inception
1-Year 5-Year Inception Date
---------------------------------------------------------------------------------------------------------------------------------------
Class A (without sales charge) 0.42% 8.60% 8.09% 8/1/1995
Class A/2/ (with sales charge) (3.57)% 7.71% 7.24% 8/1/1995
Class B (without CDSC) (0.73)% N/A 6.40% 1/8/1997
Class B/2/ (with CDSC) (4.70)% N/A 5.96% 1/8/1997
Class I/3/ 0.99% N/A 9.34% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/2/ (with sales charge) 3.91% 8.49% 8.17%
Class B/2/ (with CDSC) 2.96% N/A 7.24%
Class I/3/ 8.84% N/A 11.17%
/1/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. International securities carry additional risks such as currency
fluctuation, economic and political instability and different accounting standards.
/2/Class A performance has been restated to reflect the maximum sales charge of 4.00%. Prior to 1/8/97, this was 4.75%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of 5.00%, declining 1.00% each year during the first five
years and then converting to Class A shares after the fifth year.
/3/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF FREDERICK PLAUTZ APPEARS HERE]
A Share Ticker. . . AALGX. . . B Share Ticker. . . BBLGX . . . I Share Ticker. . . IILGX . . . A Share Assets. . . $4,232,520,885. . . B Share Assets. . . $159,623,968. . .I Share Assets. . . $93,156,896. . . A Share NAV. . . $39.89. . . B Share NAV. . . $38.77. . .I Share NAV. . . $39.95. . .Number of Securities in Portfolio. . .126
How would you assess the Fund’s performance over the last six months?
The Fund has performed well relative to the S&P 500 Index over the last six months. The Fund had a total return of 3.32%, which exceeded the return of the S&P 500 Index, which was (1.03%) over the same period.
Has any specific sector performed particularly well or particularly poorly?
The best performing sector for the Fund was the financial sector. The financial sector of the S&P 500 Index was up just over 24%. The financial stocks in the Fund were up almost 28%. In addition, the Fund was over-weighted in this sector. At the end of October, the Fund’s weighting in financials was 19%, versus a weighting of 16% in the S&P 500 Index. Within the financial sector, the Fund’s best performing stocks were Cigna Corp., 54%, MGIC Investment Corp., 43% and MBNA Corp., 43%.
The technology sector had the worst performance over the last six months. The technology sector of the S&P 500 Index declined almost 18%, while the technology stocks in the Fund were down almost 22%. However, the Fund was very under-weighted in technology versus the S&P 500. At the end of October, the Fund’s weighting in technology was 15%, versus 27% for the S&P 500. Being so under weighted in technology more than offset the under performance of the technology stocks in the Fund. In the technology sector, the Fund’s worst performing stocks were Motorola, (37)%, ADC Telecommunications, (30)% and Intel Corp., (29)%.
How do you choose individual securities for the Fund?
In general, I look for stocks that have good long-term growth characteristics and are selling at an attractive price relative to those characteristics. Companies with good growth characteristics usually have a good market position in a rapidly growing market. The best companies also have a management team that consistently meets or beats earnings expectations. This is why I also look for stocks that have positive estimate revisions. Even the best companies can have difficulty growing earnings at the rate that the market expects quarter after quarter. I also pay attention to what the insiders of a company are doing. Insiders generally include officers, directors and employees. Insiders of a company may say everything is going well, but I am more likely to believe them if they have recently purchased large blocks of their company’s stock.
Hypothetically, how would you see this Fund fitting in with the other AAL Mutual Funds in a diversified portfolio?
Large capitalization domestic stocks are a major asset class comprising approximately 75% of the domestic equity market. Therefore, The AAL Capital Growth Fund should be a significant part of anyone’s asset allocation for domestic equities.
What do you foresee for the remainder of the year?
While it is always
dangerous to make predictions, since they are frequently wrong, it seems as
though the economy is definitely slowing. I think the equity market is
struggling to determine how much and how fast the economy will slow down in the
near term. During this period the equity market should experience higher
volatility as the market sorts out just how hard the soft landing is going to
be.
/s/ Frederick L. Plautz
Frederick L. Plautz
Portfolio Manager
[MOUNTAIN CHART APPEARS HERE]
Value of a $10,000 Investment In Class A Shares - Including 4% Sales Charge
The AAL Capital Growth Fund S&P 500 Index
Date Value Value
31-Oct-90 9,600.00 10,000.00
30-Nov-90 10,225.14 10,646.40
31-Dec-90 10,511.06 10,943.01
31-Jan-91 10,739.14 11,419.58
28-Feb-91 11,404.40 12,236.30
29-Mar-91 11,784.55 12,532.67
30-Apr-91 11,803.55 12,562.37
31-May-91 12,288.24 13,104.31
28-Jun-91 11,870.08 12,504.00
31-Jul-91 12,314.20 13,086.81
30-Aug-91 12,573.96 13,396.84
30-Sep-91 12,477.75 13,172.71
31-Oct-91 12,679.78 13,349.75
30-Nov-91 12,266.10 12,811.89
31-Dec-91 13,684.63 14,277.19
31-Jan-92 13,354.18 14,011.20
28-Feb-92 13,412.49 14,192.65
31-Mar-92 13,208.39 13,916.60
30-Apr-92 13,665.19 14,325.19
29-May-92 13,752.66 14,395.39
30-Jun-92 13,558.28 14,181.18
31-Jul-92 14,046.94 14,760.48
31-Aug-92 13,880.19 14,458.34
30-Sep-92 13,988.09 14,628.22
30-Oct-92 14,154.85 14,678.69
30-Nov-92 14,458.94 15,178.50
31-Dec-92 14,464.82 15,364.74
29-Jan-93 14,217.14 15,493.19
26-Feb-93 14,613.43 15,704.36
31-Mar-93 14,781.86 16,035.72
30-Apr-93 14,692.69 15,648.14
31-May-93 14,920.56 16,066.73
30-Jun-93 14,871.02 16,113.80
30-Jul-93 14,743.45 16,049.03
31-Aug-93 15,163.55 16,657.93
30-Sep-93 14,993.51 16,530.16
29-Oct-93 15,363.60 16,872.17
30-Nov-93 15,223.56 16,711.38
31-Dec-93 15,340.86 16,913.42
31-Jan-94 15,452.39 17,488.47
28-Feb-94 15,056.96 17,013.84
31-Mar-94 14,489.16 16,272.03
29-Apr-94 14,691.94 16,480.64
31-May-94 14,712.22 16,751.09
30-Jun-94 14,390.80 16,340.52
29-Jul-94 14,739.55 16,877.14
31-Aug-94 15,160.09 17,569.10
30-Sep-94 14,954.95 17,139.54
31-Oct-94 15,324.21 17,524.66
30-Nov-94 14,862.63 16,886.42
30-Dec-94 15,129.73 17,136.84
31-Jan-95 15,507.71 17,581.20
28-Feb-95 16,015.27 18,266.34
31-Mar-95 16,296.05 18,805.38
28-Apr-95 16,803.61 19,359.20
31-May-95 17,386.77 20,132.98
30-Jun-95 17,610.32 20,600.67
31-Jul-95 18,208.57 21,283.79
31-Aug-95 18,132.43 21,337.21
29-Sep-95 18,991.73 22,237.65
31-Oct-95 18,893.84 22,158.26
30-Nov-95 19,600.86 23,131.00
29-Dec-95 19,819.47 23,576.51
31-Jan-96 20,641.06 24,379.05
29-Feb-96 20,674.83 24,605.05
29-Mar-96 20,641.06 24,841.99
30-Apr-96 21,147.52 25,208.16
31-May-96 21,608.96 25,858.28
28-Jun-96 21,592.08 25,956.80
31-Jul-96 20,619.87 24,810.03
30-Aug-96 21,049.45 25,333.27
30-Sep-96 22,552.99 26,759.03
31-Oct-96 22,824.30 27,497.04
29-Nov-96 24,633.06 29,575.55
31-Dec-96 24,189.83 28,989.65
31-Jan-97 25,755.05 30,800.93
28-Feb-97 25,494.18 31,042.41
31-Mar-97 24,272.83 29,766.87
30-Apr-97 25,494.18 31,543.96
30-May-97 27,201.70 33,464.35
30-Jun-97 28,431.35 34,963.56
31-Jul-97 30,487.63 37,745.61
29-Aug-97 28,989.99 35,631.10
30-Sep-97 30,249.91 37,582.61
31-Oct-97 29,917.10 36,327.35
28-Nov-97 31,283.99 38,008.95
31-Dec-97 32,310.04 38,661.56
30-Jan-98 32,397.03 39,089.16
27-Feb-98 34,956.98 41,908.27
31-Mar-98 36,410.93 44,054.39
30-Apr-98 36,833.45 44,497.58
29-May-98 35,752.31 43,732.66
30-Jun-98 38,015.25 45,509.08
31-Jul-98 37,517.51 45,024.41
31-Aug-98 31,818.33 38,514.78
30-Sep-98 33,971.08 40,982.04
30-Oct-98 36,634.01 44,315.52
30-Nov-98 38,687.21 47,001.48
31-Dec-98 41,418.37 49,709.71
29-Jan-99 43,442.49 51,788.57
26-Feb-99 42,544.29 50,178.98
31-Mar-99 44,062.37 52,186.64
30-Apr-99 45,378.04 54,207.83
28-May-99 44,555.75 52,927.98
30-Jun-99 46,920.16 55,865.49
30-Jul-99 45,742.73 54,121.36
31-Aug-99 44,615.93 53,853.46
30-Sep-99 44,147.49 52,377.34
29-Oct-99 47,173.37 55,691.78
30-Nov-99 48,249.52 56,823.99
31-Dec-99 50,782.81 60,170.93
31-Jan-00 48,192.37 57,147.94
29-Feb-00 46,615.03 56,066.13
31-Mar-00 51,013.64 61,551.08
28-Apr-00 49,590.18 59,699.01
31-May-00 49,654.30 58,473.98
30-Jun-00 51,095.71 59,915.37
31-Jul-00 50,170.90 58,978.89
31-Aug-00 52,341.63 62,642.07
29-Sep-00 50,325.04 59,335.19
31-Oct-00 51,237.00 59,084.20
*An unmanaged index comprised of 500 stocks representative of the stock market as a whole. “S&P 500® Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard &Poor’s make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
Average Annual Total Returns/1/
October 31, 2000
From Inception
1-Year 5-Year 10-Year Inception Date
---------------------------------------------------------------------------------------------------------------------------------------
Class A (without sales charge) 8.61% 22.08% 18.24% N/A 7/16/1987
Class A/2/ (with sales charge) 4.28% 21.09% 17.75% N/A 7/16/1987
Class B (without CDSC) 7.47% N/A N/A 20.17% 1/8/1997
Class B/2/ (with CDSC) 3.47% N/A N/A 19.86% 1/8/1997
Class I/3/ 9.02% N/A N/A 18.89% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/2/ (with sales charge) 9.44% 20.53% 17.65% N/A
Class B/2/ (with CDSC) 8.81% N/A N/A 19.81%
Class I/3/ 14.42% N/A N/A 18.76%
/1/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.
/2/Class A performance has been restated to reflect the maximum sales charge of 4.00%. Prior to 1/8/97, this was 4.75%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of 5.00%, declining 1.00% each year during the first five
years and then converting to Class A shares after the fifth year.
/3/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF LEWIS BOHANNON APPEARS HERE]
A Share Ticker . . . AAUTX . . . B Share Ticker . . . BBEIX . . . A Share Assets . . . $288,466,792 . . . B Share Assets . . . $12,403,956 . . . I Share Assets . . . $8,239,190 . . . A Share NAV . . . $15.11 . . . B Share NAV . . . $15.09 . . . I Share NAV. . . $15.14 . . . Number of Securities in Portfolio . . . 101
What has the investment environment been like for the last six months?
The Fund returned 5.64% over the past six months compared to the S&P 500 Index which returned (1.03)% and the S&P 500/BARRA Value Index which returned 6.80%. The equity markets have experienced tremendous volatility over the last six months. We have seen the continuation of one trend that has been evident since the beginning of 2000 and the start of another that has only become evident in the last six months. After 3 to 4 years of outstanding performance, both large-cap and growth stocks have struggled in 2000. Since the beginning of 2000, mid cap and small cap stocks have outperformed large-cap stocks. Meanwhile, over the last six months, we have seen a significant deterioration in the performance of growth stocks, particularly technology stocks.
The initial concerns were higher interest rates, but more recently, the markets have become more concerned with earnings quality as the economy has continued to slow. This concern over earnings quality has led to much weaker performance in higher-priced growth stocks, particularly those in the technology industries.
How would you assess the Funds performance over the last six months?
The AAL Equity Income Fund has continued to experience very good performance, especially against the market indices. However, it has lost a little ground versus the Lipper Equity Income Universe. Both the Fund’s 30% exposure to smaller cap stocks and its more value-oriented focus have helped it considerably. The Fund celebrated its third anniversary of its change in Investment Objective to an equity income fund on September 1, 2000 (from a utility fund), and its three-year returns placed its performance in the top 18% among the 228 equity income funds.
What were some of the stocks that contributed to the Fund’s positive performance?
Two groups of stocks have led the way this year. The first is energy stocks, particularly the Fund’s holdings in several mid-cap oil field service equipment stocks. The second area of major strength has been in the Fund’s telecommunications equipment holdings, particularly those stocks that have exposure to the rapidly growing optical technology area.
What are some of the changes you are making as you implement your investment strategy?
The recent downward trend in technology has negatively impacted the Fund. However, we had been reducing the Fund’s exposure to growth stocks and technology stocks for most of the summer, which, in hindsight, was a fortuitous decision.
The major change in the Fund over the last six months is a reduction in all of our more growth-oriented holdings. These higher-growth stocks were all stocks that had been bought after the companies had “stumbled” and had sharp corrections in their share prices. We have held these stocks as they have bounced back and they have been a major factor in the Fund’s strong three-year performance record. However, as many of these stocks have gotten more expensive and the economy has begun to slow, we felt it prudent to reduce our overall exposure and continue to do so.
What is your outlook for the next six months?
I believe the U.S. economy will continue to slow. As a result, we will continue to see earnings disappointments for many companies. Because of our more value-oriented approach, any stock market weakness due to slowing earnings growth, will be viewed positively as it will present us with attractive buying opportunities.
Additionally, I do not look
for interest rates to rise. In recent months, the U.S. economy has slowed
considerably. There is less inflationary pressure today than earlier this year.
So, I would be very surprised if interest rates rose again this year.
/s/ Lewis A. Bohannon
Lewis A. Bohannon
Portfolio Manager
[MOUNTAIN CHART APPEARS HERE]
Value of a $10,000 Investment In Class A Shares - Including 4% Sales Charge
The AAL Equity S&P500/
Income Fund S&P 500 Index BARRA Index
Date Value Value Value
18-Mar-94 9,600.00 10,000.00 10,000.00
31-Mar-94 9,520.15 9,470.30 9,444.44
29-Apr-94 9,548.94 9,591.63 9,643.34
31-May-94 9,337.81 9,748.64 9,802.94
30-Jun-94 9,117.08 9,509.89 9,531.79
29-Jul-94 9,378.40 9,821.94 9,854.25
31-Aug-94 9,388.08 10,223.94 10,132.83
30-Sep-94 9,126.76 9,974.37 9,775.95
31-Oct-94 9,224.37 10,197.72 9,988.77
30-Nov-94 9,087.72 9,826.82 9,584.03
30-Dec-94 8,912.01 9,972.29 9,701.72
31-Jan-95 9,286.22 10,230.69 9,964.44
28-Feb-95 9,276.37 10,629.01 10,351.16
31-Mar-95 9,207.44 10,942.16 10,636.54
30-Apr-95 9,406.09 11,264.15 10,986.70
31-May-95 9,882.85 11,713.47 11,475.50
30-Jun-95 9,952.38 11,985.34 11,562.60
31-Jul-95 10,062.51 12,382.58 11,960.93
31-Aug-95 10,102.56 12,413.58 12,063.07
29-Sep-95 10,693.30 12,937.18 12,482.63
31-Oct-95 10,834.67 12,890.98 12,288.27
30-Nov-95 10,986.13 13,456.31 12,932.30
29-Dec-95 11,511.44 13,715.51 13,290.78
31-Jan-96 11,735.36 14,181.77 13,688.71
29-Feb-96 11,460.55 14,313.61 13,817.11
29-Mar-96 11,358.77 14,451.45 14,140.57
30-Apr-96 11,184.34 14,664.29 14,284.52
31-May-96 11,215.12 15,041.89 14,499.79
28-Jun-96 11,594.77 15,099.21 14,429.75
31-Jul-96 11,046.58 14,432.43 13,820.96
30-Aug-96 11,036.24 14,737.30 14,202.56
30-Sep-96 11,067.27 15,566.04 14,810.85
31-Oct-96 11,495.74 15,995.21 15,312.94
29-Nov-96 11,924.22 17,203.18 16,484.38
31-Dec-96 12,064.68 16,862.39 16,215.03
31-Jan-97 12,191.34 17,915.28 16,962.54
28-Feb-97 12,265.23 18,055.91 17,085.86
31-Mar-97 11,895.79 17,315.44 16,500.84
30-Apr-97 12,066.04 18,348.25 17,119.45
30-May-97 12,725.73 19,464.61 18,192.84
30-Jun-97 13,114.10 20,336.18 18,888.36
31-Jul-97 13,360.73 21,953.82 20,399.43
29-Aug-97 12,835.31 20,724.85 19,477.58
30-Sep-97 13,510.85 21,859.20 20,619.55
31-Oct-97 13,370.56 21,129.98 19,861.78
28-Nov-97 14,104.38 22,107.30 20,618.91
31-Dec-97 14,763.75 22,486.69 21,076.65
30-Jan-98 14,640.25 22,735.14 20,816.77
27-Feb-98 15,347.56 24,373.96 22,378.24
31-Mar-98 16,107.64 25,621.13 23,511.70
30-Apr-98 16,118.91 25,878.80 23,790.08
29-May-98 15,871.10 25,434.46 23,455.35
30-Jun-98 16,215.78 26,466.79 23,633.38
31-Jul-98 15,910.67 26,185.71 23,120.06
31-Aug-98 13,684.54 22,404.50 19,402.35
30-Sep-98 14,538.71 23,839.89 20,581.24
30-Oct-98 15,445.96 25,777.33 22,193.37
30-Nov-98 16,024.33 27,339.00 23,349.42
31-Dec-98 16,725.67 28,913.40 24,169.45
29-Jan-99 16,810.02 30,122.01 24,657.68
26-Feb-99 16,556.96 29,186.11 24,126.80
31-Mar-99 16,765.43 30,353.50 24,858.08
30-Apr-99 17,744.52 31,528.97 27,001.09
28-May-99 17,526.95 30,785.49 26,523.98
30-Jun-99 18,067.26 32,492.63 27,542.77
30-Jul-99 17,546.21 31,479.03 26,695.83
31-Aug-99 17,025.15 31,322.23 26,019.63
30-Sep-99 16,653.14 30,464.56 25,001.48
29-Oct-99 17,090.75 32,391.60 26,412.81
30-Nov-99 17,066.43 33,050.12 26,258.03
31-Dec-99 17,409.50 34,996.77 27,244.55
31-Jan-00 16,873.44 33,238.53 26,377.62
29-Feb-00 16,654.15 32,609.33 24,729.55
31-Mar-00 17,908.15 35,799.50 27,308.10
28-Apr-00 17,602.55 34,722.29 27,125.41
31-May-00 17,932.60 34,009.79 27,210.04
30-Jun-00 17,329.95 34,848.13 26,135.24
31-Jul-00 17,403.54 34,303.46 26,658.21
31-Aug-00 18,433.77 36,434.04 28,445.64
29-Sep-00 18,571.14 34,510.69 28,438.82
31-Oct-00 18,595.75 34,364.71 28,970.05
*An unmanaged index comprised of 500 stocks representative of the stock market as a whole. “S&P 500® Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard &Poor’s make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
**An unmanaged capitalization weighted index composed of the lowest price-to-book securities in the S&P 500 Index. The S&P 500/BARRA Index is designed so that approximately one-half of the S&P 500 Index market capitalization is characterized as “value” and the other half as “growth.” It is not possible to invest directly into either Index. The composition of the S&P 500/BARRA Value Index serves as a better reflection of the Fund’s current investment strategy than does the S&P 500 Index.
Average Annual Total Returns/1/
October 31, 2000
From Inception
1-Year 5-Year Inception Date
---------------------------------------------------------------------------------------------------------------------------------------
Class A (without sales charge) 8.81% 11.41% 10.50% 3/18/1994
Class A/2/ (with sales charge) 4.42% 10.50% 9.81% 3/18/1994
Class B (without CDSC) 7.71% N/A 11.00% 1/8/1997
Class B/2/ (with CDSC) 3.71% N/A 10.61% 1/8/1997
Class I/3/ 9.34% N/A 9.24% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/2/ (with sales charge) 7.06% 10.77% 9.93%
Class B/2/ (with CDSC) 6.32% N/A 10.83%
Class I/3/ 12.07% N/A 9.47%
/1/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.
/2/Class A performance has been restated to reflect the maximum sales charge of 4.00%. Prior to 1/8/97, this was 4.75%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of 5.00%, declining 1.00% each year during the first five
years and then converting to Class A shares after the fifth year.
/3/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF FREDERICK PLAUTZ APPEARS HERE]
[PHOTO OF ALAN ONSTAD APPEARS HERE]
A Share Ticker . . . AABFX . . . B Share Ticker . . . BBBFX . . . A Share Assets . . . $279,545,723 . . . B Share Assets . . . $19,970,880 . . . I Share Assets . . . $3,059,259 . . . A Share NAV . . . $12.68 . . . B Share NAV . . . $12.62 . . . I Share NAV . . . $12.67 . . . Number of Securities in Portfolio . . . 169
How has the equity portion of the Fund performed over the last six months?
The equity portion of the Fund has performed well over the last six months. With a return of more than 3%, this portion of the Fund outperformed the S&P 500 Index, which returned approximately (1.03%) for the same period.
Given the recent volatility in the equity markets, how have you changed your asset allocation?
Although there has been some volatility in the equity markets, our overall asset allocation has not changed considerably in the past six months. The Fund has a very conservative asset allocation of approximately 50% stocks, 35% bonds and 15% cash; a slightly higher cash position than we would normally carry. This is done partially to hedge against market volatility. This compares with our expected long-term allocation of 55% stocks, 35% bonds and 10% cash. The prospectus allows for a fairly wide range of asset allocation for the Fund. Because of market volatility, we are currently at the low end in all these areas.
Are there any sectors in which you have focused over the last six months?
We have paid the closest attention to the technology sector and it remains an important market segment for the Fund, with a technology weighting of just over 15% for the equity portion of the Fund’s portfolio. This compares with a weighting of approximately 28% technology in the S&P 500 Index. Given the recent volatility in the technology sector, we have chosen to under-weight this sector, focusing on individual stock selection. We will invest in technology stocks that have good long-term fundamentals for growth and are selling at an attractive price.
How has the bond portion of the Fund performed over the last six months?
While the bond portion of the portfolio has posted positive returns over the past six months, the returns could have been better. During August, one of the securities in the Fund experienced financial difficulties and it was sold from the portfolio. Since that time the price of that security has continued to decline, so we are glad we sold when we did.
It is important to remember that when interest rates decline, the price of bonds will generally rise, leading to a higher net asset value (NAV) for the Fund. Interest rates have generally declined over the last six months, with 10-year U.S. Treasuries declining from 6.50% in early May to 5.75% at the end of October. This decline in rates boosted returns in excess of 5.50% on the bond portion of the portfolio this year.
How has the corporate bond market performed over the last six months?
The corporate bond market has performed in line with the overall bond market and has done well versus U.S. Treasuries over the last several months. Due to a slowing economy, we have become defensive in our corporate bond holdings. We are reducing maturities of our holdings to the 4 to 10 year area and investing in industries with stable cash flows.
Where do you see the bond market headed?
Assuming the economy is headed for a “soft landing” during 2001, we expect interest rates to remain in a range between 5.50% and 6.00%. From a bond standpoint, this should result in stable returns in the area of 6.50%. We will continue to focus on securities that have solid cashflows and have the ability to maintain their value should the “soft landing” arrive with a little more force. Under this “soft landing” scenario, we would expect the Federal Reserve Board to neither raise nor lower rates early in the year. Should the strength of the economy change over the course of 2001, we could envision further rate reductions by the Federal Reserve Board, especially if a “hard landing” scenario begins to take shape. We believe that being a little cautious going into 2001 is the prudent thing to do and we have positioned the portfolio accordingly.
/s/ Frederick L. Plautz /s/ Alan D. Onstad Frederick L. Plautz Alan D. Onstad Portfolio Manager Portfolio Manager
[MOUNTAIN CHART APPEARS HERE]
Value of a $10,000 Investment In Class A Shares - Including 4% Sales Charge
The AAL Balanced Fund S&P 500Index Lehman Brothers Aggregate
Date Value Value Value
29-Dec-97 9,600.00 10,000.00 10,000.00
31-Dec-97 9,596.93 10,180.22 10,007.90
30-Jan-98 9,654.51 10,292.70 10,136.40
27-Feb-98 10,086.37 11,034.63 10,128.80
31-Mar-98 10,333.01 11,599.25 10,163.64
30-Apr-98 10,400.36 11,715.90 10,216.70
29-May-98 10,256.04 11,514.74 10,313.55
30-Jun-98 10,664.94 11,982.10 10,401.01
31-Jul-98 10,587.66 11,854.85 10,423.06
31-Aug-98 9,718.23 10,143.01 10,592.75
30-Sep-98 10,180.29 10,792.84 10,840.72
30-Oct-98 10,578.19 11,669.97 10,783.48
30-Nov-98 10,888.74 12,376.97 10,844.52
31-Dec-98 11,328.24 13,089.73 10,877.16
29-Jan-99 11,659.71 13,636.90 10,954.82
26-Feb-99 11,445.23 13,213.20 10,763.55
31-Mar-99 11,697.73 13,741.70 10,823.29
30-Apr-99 11,903.47 14,273.86 10,857.60
28-May-99 11,727.12 13,937.27 10,762.49
30-Jun-99 12,013.20 14,710.13 10,728.16
30-Jul-99 11,835.81 14,251.25 10,682.56
31-Aug-99 11,678.13 14,180.27 10,677.11
30-Sep-99 11,667.29 13,791.98 10,800.97
29-Oct-99 12,093.53 14,664.39 10,840.82
30-Nov-99 12,252.14 14,962.52 10,840.06
31-Dec-99 12,570.40 15,843.81 10,787.81
31-Jan-00 12,211.25 15,047.82 10,752.54
29-Feb-00 12,061.60 14,762.96 10,882.54
31-Mar-00 12,683.02 16,207.23 11,025.86
30-Apr-00 12,471.97 15,719.55 10,994.44
31-May-00 12,461.92 15,396.98 10,989.38
30-Jun-00 12,747.34 15,776.52 11,217.96
31-Jul-00 12,676.46 15,529.93 11,319.82
31-Aug-00 13,010.59 16,494.50 11,483.95
29-Sep-00 12,787.84 15,623.75 11,556.19
31-Oct-00 12,940.92 15,557.66 11,632.57
*An unmanaged index comprised of 500 stocks representative of the stock market as a
whole. “S&P 500® Index” is a trademark of The McGraw-Hill
Companies, Inc. and has been licensed for use by AAL. The product is not
sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard
&Poor’s make no representation regarding the advisability of investing
in the product. It is not possible to invest directly in the Index.
**An unmanaged index that encompasses five major classes of U.S. fixed-income securities: U.S. Treasury and Government Agency
securities, corporate debt obligations, mortgage-backed securities, asset-backed securities and commercial mortgage-backed
securities. It is not possible to invest directly in the Index.
Average Annual Total Returns/1/
October 31, 2000
From Inception
1-Year Inception Date
---------------------------------------------------------------------------------------------------------------------------------------
Class A (without sales charge) 7.01% 11.10% 12/29/1997
Class A/2/ (with sales charge) 2.71% 9.50% 12/29/1997
Class B (without CDSC) 5.94% 10.09% 12/29/1997
Class B/2/ (with CDSC) 1.94% 9.20% 12/29/1997
Class I/3/ 7.44% 11.40% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/2/ (with sales charge) 5.22% 9.34%
Class B/2/ (with CDSC) 4.42% 9.05%
Class I/3/ 10.05% 11.30%
/1/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.
/2/Class A performance reflects the maximum sales charge of 4.00%. Class B performance reflects the maximum contingent deferred sales
charge (CDSC) of 5.00%, declining 1.00% each year during the first five years and then converting to Class A shares after the fifth
year.
/3/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF BRIAN FLANAGAN APPEARS HERE]
A Share Assets . . . $10,044,724 . . . B Share Assets . . . $1,222,432 . . . A Share NAV . . . $10.18 . . . B Share NAV . . . $10.15 . . . Number of Securities in Portfolio . . . 601
How did the Fund’s performance compare to that of the index the Fund tracks?
The return for The AAL Small Cap Index Fund II was 1.80% since inception on July 1, 2000, through October 31, 2000. This compares to a return of 2.69% for the S&P SmallCap 600 Index* for the same period. The difference in returns between the Fund and the Index can, for the most part, be attributed to two factors, initial start-up costs and ongoing expenses. The Fund incurred initial “start-up” trading costs to fully invest money from initial investments, which accounted for approximately half of the difference between the Fund’s return and the return of the Index. The majority of the remaining performance differential can be attributed to the Fund’s ongoing expenses, which the Index does not incur.
How would you assess the small cap markets performance since the Fund’s inception?
The performance of the small cap market can best be characterized as average when compared to the rest of the market. The following table compares the performance of the S&P 600, S&P 400 and S&P 500 Indices, which are proxies for the small, mid and large cap markets, respectively.
Index Return for the period
July 1, 2000, through October 31, 2000
S&P SmallCap 600 Index 2.69%
S&P MidCap 400 Index 6.21%
S&P 500 Index (2.39)%
The absolute performance of the small cap market reflects the overall market’s concern over a potentially slowing economy. The market is evaluating what effect several interest-rate increases by the Federal Reserve Board are having on the economy. Concerns over the rising price of oil must also be factored in. Investors are hoping the Federal Reserve Board can engineer a “soft landing” and not send the economy into a recession. A “soft landing” would slow the economy enough to ease inflation fears while still allowing many small companies to prosper. However, if the interest rate increases by worldwide central banks and rising oil prices send the economy into a recession, many smaller companies will find it difficult to increase sales and profits. The effects on the worldwide economy of rising interest rates and oil prices will become more clear as we head into 2001.
Is there a sector that has performed particularly well?
The top performing sectors for the period were financials, 25%, health care, 12%, and utilities, 7%.
The financial and utility sectors performed well, as investors became more risk-averse and searched for value-oriented investments. The financial and utility sectors provided these opportunities as they sold at lower price-earnings ratios than many other sectors.
What do you foresee for the remainder of the year?
In our opinion, the
Fund’s tracking variance versus the S&P SmallCap 600 Index should
narrow now that the Fund has absorbed the initial start-up costs. As the Fund
assets continue to grow, the ongoing transaction costs will have an increasingly
smaller effect on the Fund.
/s/ Brian Flanagan
Brian Flanagan
Portfolio Manager
*An unmanaged index comprised of 600 stocks designed to represent performance of the small cap segment of the U.S. equity markets. “S&P SmallCap 600 Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index. Index funds are subject to the same market risks associated with the stocks in their respective indexes.
**Since the fund has been in existence for less than one year, mountain chart performance has not been shown.**
Total Returns/1/
October 31, 2000
Because the Fund has been in operation for less than a year, total returns are not annualized.
From Inception
Inception/2/ Date
------------------------------------------------------------------------------------------------------------------------------------
Class A (without sales charge) 1.80% 7/1/2000
Class A/3/ (with sales charge) (2.30)% 7/1/2000
Class B (without CDSC) 1.50% 7/1/2000
Class B/3/ (with CDSC) (3.50)% 7/1/2000
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/3/ (with sales charge) (2.78)%
Class B/3/ (with CDSC) (3.90)%
/1/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.
/2/Total returns are not annualized and measure the cumulative change in the
value of an investment in the Fund.
/3/Class A performance reflects the maximum sales charge of 4.00%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of
5.00%, declining 1.00% each year during the first five years and then converting
to Class A shares after the fifth year.
[PHOTO OF MICHAEL HOCHHOLZER APPEARS HERE]
A Share Ticker . . . AAMIX . . . A Share Assets . . . $12,821,817 . . . B Share Assets . . . $1,445,941 . . . A Share NAV . . . $10.49 . . . B Share NAV . . . $10.46 . . . Number of Securities in Portfolio . . . 400
How would you assess the Fund’s performance since inception?
The Fund has performed adequately during its start-up in light of the large cash flows that have come into the Fund. The Fund returned 4.90% since inception, trailing the S&P MidCap 400 Index* which returned 6.21% over the same period. Two factors account for nearly all of this shortfall. First, the MidCap Index was up over 2% on the first day of trading for the Fund. This means that the initial investment incurred not only relatively large transaction costs, but also a negative market impact. Second, the size of the Fund has nearly doubled during a period when the Index is up 6.21% in a very volatile fashion. Again, transaction costs and the market impact of uninvested cash during a rising market have created a higher than normal tracking error for the Fund.
On an absolute basis, the Fund’s 4.90% return compares well with other parts of the market. The mid cap market performed well in comparison to the S&P 500 Index which returned (2.39)% and the S&PSmallCap 600 Index which returned 2.69% for the period July 1, 2000 through October 31, 2000.
What factors influence the return of the Fund relative to the return of the Index?
Four key factors influence the return of the Fund as compared to that of the Index. Trading costs and cash flows are always a negative for the Fund. Cash levels and portfolio mismatch can be either a positive or a negative for the Fund as compared to the Index. These same factors apply to any index fund.
The Index enjoys the advantage of being simply a mathematical construction. At any time, the value of the Index is simply a weighted sum of the value of the stocks that make it up; one can arrive at that value while incurring no actual costs. The Fund, however, must own the securities that make up the Index, which is not without cost. To acquire those securities, the fund pays a commission, is impacted by the bid-ask spread, and incurs other fees, all of which come out of the value of the fund and cause it to have a return of less than the Index. When changes to the Index occur, these factors all apply twice. The Index simply replaces one security with the other and recalculates a value. The fund must sell a security, incurring cost, and buy another incurring cost. Each time a transaction occurs, the Fund falls a little further behind its benchmark index.
Cash flows into or out of the Fund also have an impact. Cash coming into the Fund creates a need for a transaction. The greater the cash flow, either in or out, the greater the transaction costs. The extreme example of this is the startup of the Fund. One hundred percent of the Fund must move from cash to securities. As the Fund becomes larger, the same cash flow has less of an impact because it represents a smaller portion of the Fund.
To facilitate cash flows in the Fund and optimize trading costs, the Fund carries a small cash position. This means that typically 99% of the Fund is invested in the securities that make up the Index, 1% of the Fund is in cash. This fact can work either for or against the Fund relative to the Index. If the Index goes down, the Fund benefits; if the index goes up the Fund gets hurt. For example, if the Fund is 99% invested and the Index increases by 10%, the Fund increases only 9.9%. We strive very hard to balance this impact against the reduced trading costs of making fewer, larger trades.
The last, and least
important, factor is portfolio mismatch. This refers to the inevitable small
differences between the Fund and the Index. For example, if XYZ Co. makes up
1.375% of the index, it may be 1.378% of the Fund. While this seems meaningless,
multiplied by 400 times and recent market volatility, it can add up. The systems
we have in place to assist in managing the Fund minimize this factor even at the
current size of the Fund.
/s/ Michael Hochholzer
Michael R. Hochholzer
Portfolio Manager
*An unmanaged index comprised of 400 stocks designed to represent performance of the mid cap segment of the U.S. equity markets. “S&P MidCap 400 Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard &Poor’s make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index. Index funds are subject to the same market risks associated with the stocks in their respective indexes.
**Since the fund has been in existence for less than one year, mountain chart performance has not been shown.**
Total Returns/1/
October 31, 2000
From Inception
Inception/2/ Date
---------------------------------------------------------------------------------------------
Class A (without sales charge) 4.90% 7/1/2000
Class A/3/ (with sales charge) 0.67% 7/1/2000
Class B (without CDSC) 4.60% 7/1/2000
Class B/3/ (with CDSC) (0.40)% 7/1/2000
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/3/ (with sales charge) 4.61%
Class B/3/ (with CDSC) 3.70%
/1/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.
/2/Total returns are not
annualized and measure the cumulative change in the value of an investment in
the Fund.
/3/Class A performance reflects the maximum sales charge of 4.00%.
Class B performance reflects the maximum contingent deferred sales charge (CDSC)
of 5.00%, declining 1.00% each year during the first five years and then
converting to Class A shares after the fifth year.
[PHOTO OF DAVID SCHNARSKY APPEARS HERE]
A Share Ticker . . . AALCX . . . A Share Assets . . . $15,819,231 . . . B Share Assets . . . $1,549,026 . . . A Share NAV . . . $9.76 . . . B Share NAV . . . $9.74 . . . Number of Securities in Portfolio . . . 500
How would you assess the Fund’s performance since inception?
The Fund has performed quite well relative to its benchmark, the S&P 500 Index*. Returns are slightly in excess of the Index. Advantageous timing of purchases on the first day of trading in this Fund contributed significantly to its performance. The Fundnet asset value has been flat since its inception at mid-year, as large cap stocks continue to labor. It appears that the bull market run over the past 5 years is taking a pause.
One of the advantages of managing an index fund is that no investment strategy needs to be implemented. This is an advantage in that, despite the best efforts of sophisticated money managers, they often invoke a strategy that is out of sync with the direction that the stock market ultimately takes, damaging their performance. Our charter is simply to hold all 500 stocks in the S&P 500 Index and to maintain their relative weights exactly in line with that of the Index at all times and the Fund’s performance will tend to follow.
What sector contributed the most to the Fund’s performance?
Over the past quarter, surprisingly, the utilities sector was the top performer. This sector benefited from the changing regulatory environment and the move into unregulated businesses by many companies. The generally tight market for power has caused utility stock prices to rise. The falling interest rate environment has also contributed to the utility sector’s performance. Because utility stocks are higher yielding, they tend to be sensitive to interest rates. When interest rates fall, the stock price usually rises.
The other strong performing sector in the third quarter was the financial group. This group also benefited from declining interest rates. Various industries within the group have improving fundamentals, including the insurance industry. Insurance groups are experiencing higher rates for coverage, especially in the property/casualty area.
On a year-to-date basis, utilities are the top group, with health care, energy and financials contributing strongly. Health Care performance was driven by a mix of different companies, including drug, medical device, hospital management and health maintenance organization firms. Meanwhile, the energy sector benefited from strong prices for crude oil and natural gas.
What has the investment environment been like for the last six months?
The environment has not been conducive to strong stock gains. The environment at the beginning of the year 2000 was somewhat speculative as the boom in Internet stocks and other technology stocks reached its zenith. Some amount of air was due to be let out of this speculative bubble and this process started with a vengeance in the second quarter and continued into the third as evidenced by the collapse of the technology-heavy NASDAQ (over-the-counter) market.
The tight posture of the Federal Reserve Board has helped to keep a lid on the broad market, as the robust economy of 1999 and of the first half of 2000 brought unemployment down to record low levels. This posture has led the Federal Reserve Board to raise short-term interest rates numerous times over the past year and to slow down the growth of the money supply, a critical measure of the potential flow of money into the capital markets. With the price of oil rising dramatically over the past year, the Federal Reserve Board has maintained a cautious outlook for inflation and will likely maintain its tight posture.
High oil prices and the
falling value of the Euro currency have caused some concern about corporate
profits. This concern tends to dampen the outlook for all stocks. The high price
of oil has put pressure on the economy due to its effect on transportation costs
and raw material prices, while the falling value of the Euro currency against
the dollar has raised concerns for the competitive position of U.S.
manufacturers that sell into the Eurozone markets.
/s/ David J. Schnarsky
David J. Schnarsky
Portfolio Manager
*An unmanaged index comprised of 500 stocks representative of the stock market as a whole. “S&P 500® Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard &Poor’s make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index. Index funds are subject to the same market risks associated with the stocks in their respective indexes.
**Since the fund has been in existence for less than one year, mountain chart performance has not been shown.**
Total Returns/1/
October 31, 2000
Because the Fund has been in operation for less than a year, total returns are not annualized.
From Inception
Inception/2/ Date
------------------------------------------------------------------------------------------
Class A (without sales charge) (2.40)% 7/1/2000
Class A/3/ (with sales charge) (6.33)% 7/1/2000
Class B (without CDSC) (2.60)% 7/1/2000
Class B/3/ (with CDSC) (7.47)% 7/1/2000
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/3/ (with sales charge) (5.57)%
Class B/3/ (with CDSC) (6.71)%
/1/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.
/2/Total returns are not annualized and measure the cumulative change in the value of an investment in the Fund.
/3/Class A performance reflects the maximum sales charge of 4.00%. Class B performance reflects the maximum contingent deferred sales
charge (CDSC) of 5.00%, declining 1.00% each year during the first five years and then converting to Class A shares after the fifth
year.
[PHOTO OF BENJAMIN TROSKY APPEARS HERE]
A Share Ticker . . . AAHYX . . . B Share Ticker . . . BBHYX . . . A Share Assets . . . $123,987,149 . . . B Share Assets . . . $10,382,702 . . . I Share Assets . . . $1,739,425 . . . A Share NAV . . . $6.88 . . . B Share NAV . . . $6.88 . . . I Share NAV . . . $6.87 . . . Number of Securities in Portfolio . . . 128
How has the Fund performed since you became sub-adviser?
PIMCO became sub-adviser to The AAL High Yield Bond Fund on July 1, 2000. Since then, the Fund has returned (3.37)% compared to the Merrill Lynch High Yield Bond Index, which returned (1.62)%. Most of this under performance is attributable to a poor performing high yield market. Returns have also been negatively effected as we transition the Fund’s portfolio holdings based on our investment strategy.
How would you describe your investment strategy?
Our investment strategy for the Fund is to invest in higher quality issues while still generating high current income, consistent with the Fund’s Investment Objective. Over the past six months, we have been transitioning the Fund’s portfolio to a higher quality portfolio. Selecting bonds for the Fund’s portfolio is a balancing act between yield (the interest a bond is paying relative to its price) and its credit rating (the ability of an issuer to make the interest payments). A high yield bond rated “BB”will generally have a lower yield than a high yield bond rated “CCC.” However, the high yield bond rated “BB” will generally have a higher credit quality than the “CCC” rated high yield bond. The yield on a particular issue should be commensurate with the risk or credit rating of the issuer. Bonds with a higher yield are generally riskier than bonds with a lower yield.
In transitioning the Fund’s portfolio, we have significantly reduced the Fund’s weighting in “B” rated bonds. This movement away from lower quality bonds was a strong positive as their performance significantly lagged the market. The benefits of moving to a higher quality portfolio were partially offset by the liquidation of distressed or poor performing issues in a relatively illiquid high yield market. We scaled back our investment in the telecommunication sector, which contributed to returns. The Fund also invested in non-cyclical industries that further helped returns as cyclical sectors such as steel and autos lagged in performance relative to other industries.
Could you discuss the high yield market’s recent poor performance?
A combination of higher interest rates, a slowing economy and increased underwriting standards will continue to put downward pressure on the high yield market. The high yield market lagged higher-quality bonds as lingering concerns about defaults, profits and other mutual fund redemptions put selling pressure on the market. While oil prices at their highest level in a decade raised concern about accelerating inflation, the Federal Reserve Board remained on hold amid continued signs of slowing growth. There were large disparities in quality tiers as “BB” rated issues showed positive returns while “B” and “CCC” rated issues performed negatively.
Though defaults appeared to have leveled off, investors continue to display sensitivity to any signs of credit weakness. Energy and utilities posted the best total returns as soaring energy prices resulted in a broad-based rally.
How will you position the Fund in the coming months?
Given the current
environment and our negative outlook in the short-term, we have positioned the
Fund conservatively and will continue to focus on the best companies in their
respective industries. We have lowered the duration targets to approximately a
half-year below the benchmark in order to reflect a more cautious view of the
credit environment. We will avoid issuers that will be negatively effected by
reduced consumer spending, such as retail, restaurants, and home builders. In
addition, we will position the Fund to withstand the effects of higher oil
prices by avoiding transportation and basic materials. Finally we will hold
select “B” rated issues where the valuations are compelling relative
to intrinsic credit worthiness.
/s/ Benjamin L. Trosky
Benjamin L. Trosky
Portfolio Manager
[MOUNTAIN CHART APPEARS HERE]
Value of a $10,000 Investment In Class A Shares - Including 4% Sales Charge
Merrill Lynch High
The AAL High Yield Bond Fund Yield Bond Cash Pay Index
Date Value Value
8-Jan-97 9,600.00 10,000.00
31-Jan-97 9,640.14 10,108.00
28-Feb-97 9,867.39 10,249.82
31-Mar-97 9,599.77 10,135.94
30-Apr-97 9,741.77 10,251.29
30-May-97 10,050.83 10,457.85
30-Jun-97 10,178.95 10,617.12
31-Jul-97 10,447.56 10,871.93
29-Aug-97 10,449.76 10,852.91
30-Sep-97 10,695.36 11,032.63
31-Oct-97 10,680.75 11,105.89
28-Nov-97 10,774.78 11,211.06
31-Dec-97 10,867.33 11,317.45
30-Jan-98 11,039.47 11,485.97
27-Feb-98 11,120.07 11,533.41
31-Mar-98 11,196.82 11,632.83
30-Apr-98 11,214.47 11,688.08
29-May-98 11,215.90 11,769.43
30-Jun-98 11,224.82 11,827.69
31-Jul-98 11,241.75 11,895.11
31-Aug-98 10,402.33 11,381.83
30-Sep-98 10,353.59 11,404.60
30-Oct-98 10,119.87 11,217.33
30-Nov-98 10,654.41 11,728.17
31-Dec-98 10,622.79 11,732.04
29-Jan-99 10,727.54 11,848.07
26-Feb-99 10,571.09 11,757.67
31-Mar-99 10,609.53 11,859.02
30-Apr-99 10,770.76 12,044.50
28-May-99 10,585.25 11,960.91
30-Jun-99 10,562.86 11,938.42
30-Jul-99 10,551.92 11,955.97
31-Aug-99 10,397.78 11,834.62
30-Sep-99 10,200.31 11,789.17
29-Oct-99 9,958.67 11,720.21
30-Nov-99 10,086.73 11,854.29
31-Dec-99 10,224.47 11,916.52
31-Jan-00 10,161.44 11,857.42
29-Feb-00 10,185.81 11,867.61
31-Mar-00 10,012.38 11,701.70
28-Apr-00 10,011.74 11,705.80
31-May-00 9,838.99 11,576.92
30-Jun-00 10,026.16 11,775.12
31-Jul-00 9,943.98 11,860.01
31-Aug-00 10,056.95 12,004.82
29-Sep-00 9,882.51 11,934.72
31-Oct-00 9,688.63 11,584.55
*An unmanaged index comprised of 500 stocks representative of the stock market as a whole. “S&P 500® Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard &Poor’s make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
Average Annual Total Returns/1/
October 31, 2000
From Inception
1-Year Inception Date
-----------------------------------------------------------------------------------------
Class A (without sales charge) (2.71)% 0.25% 1/8/1997
Class A/2/ (with sales charge) (6.65)% (0.83)% 1/8/1997
Class B (without CDSC) (3.41)% (0.45)% 1/8/1997
Class B/2/ (with CDSC) (7.27)% (0.98)% 1/8/1997
Class I/3/ (2.38)% (3.72)% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/2/ (with sales charge) (7.02)% (0.32)%
Class B/2/ (with CDSC) (7.66)% (0.45)%
Class I/3/ (2.92)% (3.15)%
/1/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. High yields bonds generally are
subject to greater market fluctuations and risk of loss of income and principal
than investments in lower-yielding higher-quality fixed-income securities.
/2/Class A performance reflects the maximum sales charge of 4.00%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of
5.00%, declining 1.00% each year during the first five years and then converting
to Class A shares after the fifth
year.
/3/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF DUANE MCALLISTER APPEARS HERE]
A Share Ticker . . . AAMBX . . . A Share Assets . . . $473,272,150 . . . B Share Assets . . . $7,628,859 . . . I Share Assets . . . $1,065,969 . . . A Share NAV . . . $10.78 . . . B Share NAV . . . $10.78 . . . I Share NAV . . . $10.78 . . . Number of Securities in Portfolio . . . 221
How would you assess the Fund’s performance over the last six months?
The AAL Municipal Bond Fund outperformed its Lipper peer group over the last six months. This has been a favorable period for most of the bond market, with longer-term U.S. Treasury rates declining, and an especially positive period for the municipal market. A very manageable new supply of bonds matched by solid investor demand helped the municipal market outperform most sectors of the taxable market. Our Fund benefited from a modestly longer maturity structure than our peers, but also successful strategic positioning along the municipal yield curve.
How has the changing interest rate environment impacted this Fund? Does the structure of the Fund change as market conditions change?
Interest rates have been volatile. In 1999, they rose steadily as the Federal Reserve Board (Fed) attempted to moderate economic growth. It wasn’t until early in 2000 that we began to see the Fed’s efforts working their way through the system and long-term rates gradually declining again. The concept this Fund has adopted for managing through these changes is a relatively simple one. The general level of interest rates is our starting point for managing the Fund. If rates are high, relative to recent history, some modest over-weight in longer maturities may be appropriate. Conversely, a defensive posture may be warranted if rates have declined too far. Right now, we’re near the mid-range of recent years and a more neutral posture seems prudent.
Are there certain municipalities or regions of the country that you focus on when making investment decisions?
The Fund is always broadly diversified geographically. The theory of not have too many eggs in any one basket certainly applies here. At times, various states and/or regions of the country have experienced more economic weakness than others, and our geographic diversification has helped minimize the impact on the Fund during those periods. We currently have investments in over 35 different states and all regions of the country. In fact, our top four state allocations (Illinois, California, Texas and New York) essentially blanket the country. Other than remaining diversified, however, the state decision is just one of many when selecting securities for the Fund. Other considerations such as quality, maturity, call features and yield are also very important.
What is your outlook for the economy?
The economy does seem to be
slowing, as hoped for by the Fed. If the pace of economic growth remains
moderate, then inflation should remain under control as well. This scenario
would be a favorable one for the bond market. If the economy were to slow more
than expected, leading to fears of a recession, then high quality municipal
bonds may do particularly well. Credit spreads in the corporate bond market have
already widened a bit as a precaution against such a scenario. Yet, anything
short of a deep recession would generally benefit the municipal market relative
to other investment choices.
/s/ Duane A. McAllister
Duane A. McAllister
Portfolio Manager
[MOUNTAIN CHART APPEARS HERE]
Value of a $10,000 Investment In Class A Shares - Including 4% Sales Charge
The AAL Municipal Lehman Brothers
Bond Fund Muni Bond Index
Date Total Value Value
31-Oct-90 9,600.00 10,000.00
30-Nov-90 9,755.38 10,201.00
31-Dec-90 9,850.11 10,245.88
31-Jan-91 9,899.56 10,383.18
28-Feb-91 9,949.01 10,473.51
29-Mar-91 10,085.27 10,477.70
30-Apr-91 10,165.55 10,617.06
31-May-91 10,185.62 10,711.55
28-Jun-91 10,259.78 10,700.84
31-Jul-91 10,351.48 10,831.39
30-Aug-91 10,412.61 10,974.36
30-Sep-91 10,641.59 11,117.03
31-Oct-91 10,693.30 11,217.08
30-Nov-91 10,651.93 11,248.49
31-Dec-91 10,966.80 11,490.33
31-Jan-92 10,935.32 11,516.76
28-Feb-92 10,872.35 11,520.21
31-Mar-92 10,973.36 11,524.82
30-Apr-92 11,026.58 11,627.39
29-May-92 11,111.73 11,764.60
30-Jun-92 11,382.59 11,962.24
31-Jul-92 11,760.21 12,321.11
31-Aug-92 11,522.84 12,200.36
30-Sep-92 11,647.96 12,279.66
30-Oct-92 11,440.16 12,159.32
30-Nov-92 11,647.96 12,376.97
31-Dec-92 11,880.55 12,503.22
29-Jan-93 11,958.13 12,648.26
26-Feb-93 12,268.44 13,106.12
31-Mar-93 12,291.37 12,967.20
30-Apr-93 12,336.27 13,098.17
31-May-93 12,336.27 13,171.52
30-Jun-93 12,626.78 13,391.48
30-Jul-93 12,592.68 13,408.89
31-Aug-93 12,774.53 13,687.80
30-Sep-93 13,043.40 13,843.84
29-Oct-93 13,054.90 13,870.14
30-Nov-93 12,859.37 13,748.08
31-Dec-93 13,220.69 14,038.17
31-Jan-94 13,313.95 14,198.20
28-Feb-94 12,940.88 13,830.47
31-Mar-94 12,524.46 13,267.57
29-Apr-94 12,465.44 13,380.34
31-May-94 12,489.05 13,496.75
30-Jun-94 12,550.10 13,414.42
29-Jul-94 12,717.43 13,659.91
31-Aug-94 12,705.48 13,707.72
30-Sep-94 12,598.20 13,506.21
31-Oct-94 12,344.06 13,265.80
30-Nov-94 12,053.61 13,025.69
30-Dec-94 12,469.08 13,312.26
31-Jan-95 12,715.50 13,692.99
28-Feb-95 13,085.14 14,091.45
31-Mar-95 13,311.24 14,253.50
28-Apr-95 13,336.19 14,270.61
31-May-95 13,660.55 14,725.84
30-Jun-95 13,663.40 14,597.73
31-Jul-95 13,741.33 14,736.40
31-Aug-95 13,870.70 14,923.56
29-Sep-95 13,948.65 15,017.58
31-Oct-95 14,209.97 15,235.33
30-Nov-95 14,535.21 15,488.24
29-Dec-95 14,743.48 15,636.92
31-Jan-96 14,805.41 15,755.76
29-Feb-96 14,731.03 15,648.62
29-Mar-96 14,508.92 15,448.32
30-Apr-96 14,424.31 15,405.07
31-May-96 14,441.49 15,398.91
28-Jun-96 14,586.78 15,566.75
31-Jul-96 14,727.02 15,708.41
30-Aug-96 14,690.08 15,705.27
30-Sep-96 14,978.03 15,925.14
31-Oct-96 15,157.40 16,105.10
29-Nov-96 15,513.45 16,399.82
31-Dec-96 15,390.47 16,330.94
31-Jan-97 15,367.76 16,361.97
28-Feb-97 15,526.03 16,512.50
31-Mar-97 15,251.78 16,289.58
30-Apr-97 15,382.45 16,426.41
30-May-97 15,638.22 16,672.81
30-Jun-97 15,829.75 16,851.21
31-Jul-97 16,415.75 17,317.99
29-Aug-97 16,145.48 17,155.20
30-Sep-97 16,413.28 17,359.35
31-Oct-97 16,517.76 17,470.44
28-Nov-97 16,632.92 17,573.52
31-Dec-97 16,981.45 17,830.09
30-Jan-98 17,174.47 18,013.74
27-Feb-98 17,135.07 18,019.15
31-Mar-98 17,111.63 18,035.37
30-Apr-98 16,997.54 17,954.21
29-May-98 17,341.56 18,237.88
30-Jun-98 17,410.78 18,309.01
31-Jul-98 17,415.73 18,354.78
31-Aug-98 17,737.99 18,639.28
30-Sep-98 18,015.75 18,872.27
30-Oct-98 17,897.60 18,872.27
30-Nov-98 17,966.35 18,938.33
31-Dec-98 17,997.31 18,985.67
29-Jan-99 18,229.94 19,211.60
26-Feb-99 18,077.18 19,127.07
31-Mar-99 18,117.01 19,153.85
30-Apr-99 18,152.96 19,201.73
28-May-99 17,992.45 19,090.36
30-Jun-99 17,670.76 18,815.46
30-Jul-99 17,673.12 18,883.20
31-Aug-99 17,360.02 18,732.13
30-Sep-99 17,316.98 18,739.62
29-Oct-99 16,981.22 18,537.24
30-Nov-99 17,207.23 18,733.73
31-Dec-99 16,982.67 18,593.23
31-Jan-00 16,842.22 18,513.28
29-Feb-00 17,093.38 18,728.03
31-Mar-00 17,565.54 19,138.18
28-Apr-00 17,405.29 19,025.26
31-May-00 17,253.92 18,926.33
30-Jun-00 17,763.12 19,427.50
31-Jul-00 18,006.83 19,697.93
31-Aug-00 18,302.67 20,001.47
29-Sep-00 18,208.79 19,897.67
31-Oct-00 18,424.24 20,114.75
*An unmanaged index comprised of 500 stocks representative of the stock market as a whole. “S&P 500® Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard &Poor’s make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
Average Annual Total Returns/1/
October 31, 2000
From Inception
1-Year 5-Year 10-Year Inception Date
------------------------------------------------------------------------------------------------------
Class A (without sales charge) 8.50% 5.33% 6.74% N/A 7/16/1987
Class A/2/ (with sales charge) 4.13% 4.48% 6.30% N/A 7/16/1987
Class B (without CDSC) 7.66% N/A N/A 4.13% 1/8/1997
Class B/2/ (with CDSC) 3.66% N/A N/A 3.66% 1/8/1997
Class I/3/ 8.93% N/A N/A 3.21% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/2/ (with sales charge) 0.92% 4.61% 6.35% N/A
Class B/2/ (with CDSC) 0.25% N/A N/A 3.44%
Class I/3/ 5.47% N/A N/A 2.86%
/1/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.
/2/Class A performance has been restated to reflect the maximum sales charge of 4.00%. Prior to 1/8/97, this was 4.75%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of 5.00%, declining 1.00% each year during the first five
years and then converting to Class A shares after the fifth year.
/3/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF ALAN ONSTAD APPEARS HERE]
A Share Ticker. . . AAINX . . . I Share Ticker. . . IIINX . . . A Share Assets. . . $321,344,743. . . B Share Assets. . . $3,768,662. . . I Share Assets. . . $49,181,880. . . A Share NAV. . . $9.48. . .B Share NAV. . . $9.49. . . I Share NAV. . . $9.49. . .Number of Securities in Portfolio. . .72
How would you assess the Fund’s performance over the past six months?
The past six months have been relatively good for the Fund. Interest rates have generally declined over this timeframe, which has led to positive returns for bonds. It is important to remember that when interest rates decline, the price of bonds will generally rise, leading to a higher net asset value (NAV) for the Fund.
Returns for the Fund over the past six months were 5.09%, which exceeded the returns available in much of the stock market over the same time. The Fund performed in-line with the Lehman Brothers Aggregate Bond Index which posted returns of 5.80%.
Do you change your investment philosophy in response to market conditions?
The investment philosophy of the Fund is to be well-diversified across sectors of the market, to be well-diversified across industries, and to purchase securities with good liquidity. This combination of diversification and liquidity drives the investment strategy of the Fund.
The Fund’s strategy, while guided by diversification and liquidity, is more adaptable to current and future economic conditions. Analyzing which sectors offer the best value, which industries and companies have the potential to outperform, and what direction the economy is headed are all examples of factors which shape our investment strategy. The Fund strives to be well-diversified across sectors, industries and issuers. The sectors in which the Fund invests are US Treasuries, Agencies, Mortgage-Backed Securities and Corporate Bonds.
Given the current market volatility, we have added more liquid and higher quality investments to the Fund. We have continued to focus on diversification and the Fund’s industry representation to minimize the impact of a downturn in one particular industry. We believe the current economic slowdown in the United States will continue and have moved into more stable industries over the past several months. We will remain invested across a broad range of industries and market sectors, which should limit the effects of an economic slowdown on the portfolio.
When you invest in corporate bonds, do you focus on a particular sector?
The corporate bond portion of the portfolio, which is about 50% of the Fund’s total portfolio, is diversified by industry and issuer. Lately, we have focused on industries which are able to weather an economic slowdown. Examples of these industries include natural gas, electric utilities and cable/media. These industries have stable cash flows in most economic environments, which will reduce the volatility of their bond prices should the economy slow. Another way the Fund attempts to reduce its price volatility is to invest most of its corporate bonds in the 4 to 10 year maturity range.
Where do you see the bond market headed?
Assuming the economy is
headed for a “soft landing” during 2001, we expect interest rates to
remain in a range between 5.50% and 6.00%. From a bond standpoint, this should
result in stable returns around the 6.50% area. We will continue to focus on
securities that have solid cashflows and have the ability to maintain their
value should the “soft landing” arrive with a little more force. Under
this “soft landing” scenario, we would expect the Federal Reserve
Board to neither raise nor lower rates early in the year. Should the strength of
the economy change over the course of 2001, we could envision further rate
reductions by the Federal Reserve Board, especially if a “hard
landing” scenario begins to take shape. We believe that being a little
cautious going into 2001 is the prudent thing to do and we have positioned the
portfolio accordingly. The Fund has nearly half its assets in AAA securities and
many of the lower rated securities are in those industries with stable cash
flows. The Fund continues to be primarily invested in 4 to 10 year securities
which provide a degree of safety should a “hard landing” occur.
/s/ Alan D. Onstad
Alan D. Onstad
Portfolio Manager
[MOUNTAIN CHART APPEARS HERE]
Value of a $10,000 Investment
In Class A Shares - Including 4% Sales Charge
Lehman Brothers
Date The AAL Bond Fund Aggregate Bond Index
31-Oct-90 9,600.00 10,000.00
30-Nov-90 9,791.28 10,215.00
31-Dec-90 9,928.28 10,374.35
31-Jan-91 10,045.12 10,503.00
28-Feb-91 10,119.98 10,592.27
29-Mar-91 10,179.73 10,665.36
30-Apr-91 10,293.54 10,780.54
31-May-91 10,359.87 10,843.07
28-Jun-91 10,346.86 10,837.65
31-Jul-91 10,471.88 10,988.29
30-Aug-91 10,687.31 11,225.64
30-Sep-91 10,906.34 11,453.52
31-Oct-91 11,059.17 11,580.65
30-Nov-91 11,143.92 11,687.20
31-Dec-91 11,490.40 12,034.31
31-Jan-92 11,289.57 11,870.64
28-Feb-92 11,351.65 11,947.87
31-Mar-92 11,295.74 11,880.56
30-Apr-92 11,371.17 11,966.29
29-May-92 11,569.01 12,192.10
30-Jun-92 11,774.55 12,359.86
31-Jul-92 12,046.23 12,612.14
31-Aug-92 12,157.57 12,739.80
30-Sep-92 12,326.45 12,890.94
30-Oct-92 12,131.86 12,719.92
30-Nov-92 12,069.05 12,722.83
31-Dec-92 12,260.38 12,925.16
29-Jan-93 12,498.67 13,173.03
26-Feb-93 12,717.95 13,403.46
31-Mar-93 12,774.99 13,459.52
30-Apr-93 12,873.78 13,553.13
31-May-93 12,846.51 13,570.31
30-Jun-93 13,086.21 13,816.22
30-Jul-93 13,126.05 13,894.35
31-Aug-93 13,376.32 14,138.04
30-Sep-93 13,412.65 14,176.86
29-Oct-93 13,456.73 14,229.76
30-Nov-93 13,270.10 14,108.78
31-Dec-93 13,339.17 14,185.25
31-Jan-94 13,515.72 14,376.78
28-Feb-94 13,212.81 14,127.00
31-Mar-94 12,883.43 13,778.67
29-Apr-94 12,745.77 13,668.65
31-May-94 12,727.68 13,666.76
30-Jun-94 12,708.13 13,636.52
29-Jul-94 12,899.93 13,907.45
31-Aug-94 12,927.11 13,924.62
30-Sep-94 12,749.28 13,719.70
31-Oct-94 12,718.84 13,707.41
30-Nov-94 12,650.20 13,677.02
30-Dec-94 12,706.19 13,771.59
31-Jan-95 12,914.85 14,044.14
28-Feb-95 13,176.03 14,378.01
31-Mar-95 13,274.20 14,466.16
28-Apr-95 13,437.89 14,668.31
31-May-95 13,862.76 15,235.93
30-Jun-95 13,946.86 15,347.59
31-Jul-95 13,888.20 15,313.35
31-Aug-95 14,040.44 15,498.03
29-Sep-95 14,164.58 15,648.98
31-Oct-95 14,337.56 15,852.42
30-Nov-95 14,551.64 16,089.89
29-Dec-95 14,746.92 16,315.79
31-Jan-96 14,821.79 16,423.96
29-Feb-96 14,496.02 16,138.52
29-Mar-96 14,370.30 16,026.35
30-Apr-96 14,268.18 15,936.29
31-May-96 14,220.95 15,903.93
28-Jun-96 14,378.62 16,117.52
31-Jul-96 14,428.67 16,161.69
30-Aug-96 14,411.95 16,134.70
30-Sep-96 14,640.72 16,415.60
31-Oct-96 14,959.59 16,779.37
29-Nov-96 15,216.93 17,066.80
31-Dec-96 15,079.90 16,908.08
31-Jan-97 15,140.74 16,959.82
28-Feb-97 15,170.05 17,001.88
31-Mar-97 15,028.99 16,813.50
30-Apr-97 15,185.51 17,065.36
30-May-97 15,308.12 17,226.63
30-Jun-97 15,499.58 17,431.11
31-Jul-97 15,897.13 17,900.88
29-Aug-97 15,779.18 17,748.37
30-Sep-97 16,005.34 18,010.15
31-Oct-97 16,230.33 18,271.48
28-Nov-97 16,269.38 18,355.53
31-Dec-97 16,434.09 18,540.19
30-Jan-98 16,623.83 18,778.24
27-Feb-98 16,565.48 18,764.16
31-Mar-98 16,625.33 18,828.71
30-Apr-98 16,682.71 18,926.99
29-May-98 16,835.46 19,106.42
30-Jun-98 16,966.09 19,268.44
31-Jul-98 16,974.09 19,309.29
31-Aug-98 17,268.94 19,623.65
30-Sep-98 17,648.71 20,083.04
30-Oct-98 17,500.78 19,977.00
30-Nov-98 17,420.48 20,090.07
31-Dec-98 17,523.46 20,150.54
29-Jan-99 17,610.91 20,294.42
26-Feb-99 17,285.91 19,940.07
31-Mar-99 17,405.00 20,050.74
30-Apr-99 17,451.46 20,114.30
28-May-99 17,263.20 19,938.10
30-Jun-99 17,193.61 19,874.50
30-Jul-99 17,095.13 19,790.03
31-Aug-99 17,074.99 19,779.94
30-Sep-99 17,248.69 20,009.39
29-Oct-99 17,275.54 20,083.22
30-Nov-99 17,303.18 20,081.82
31-Dec-99 17,234.39 19,985.02
31-Jan-00 17,176.56 19,919.67
29-Feb-00 17,341.68 20,160.50
31-Mar-00 17,526.85 20,426.01
28-Apr-00 17,426.79 20,367.80
31-May-00 17,395.43 20,358.43
30-Jun-00 17,752.85 20,781.89
31-Jul-00 17,886.54 20,970.58
31-Aug-00 18,154.74 21,274.66
29-Sep-00 18,268.41 21,408.48
31-Oct-00 18,313.54 21,549.99
*An unmanaged index comprised of 500 stocks representative of the stock market as a whole. “S&P 500® Index” is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by AAL. The product is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard &Poor’s make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
Average Annual Total Returns/1/
October 31, 2000
From Inception
1-Year 5-Year 10-Year Inception Date
---------------------------------------------------------------------------------------------------------
Class A (without sales charge) 6.01% 5.02% 6.67% N/A 7/16/1987
Class A/2/ (with sales charge) 1.74% 4.17% 6.24% N/A 7/16/1987
Class B (without CDSC) 5.10% N/A N/A 4.38% 1/8/1997
Class B/2/ (with CDSC) 1.10% N/A N/A 3.91% 1/8/1997
Class I/3/ 6.56% N/A N/A 4.34% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A/2/ (with sales charge) 1.66% 4.37% 6.34% N/A
Class B/2/ (with CDSC) 1.01% N/A N/A 3.96%
Class I/3/ 6.35% N/A N/A 4.33%
/1/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.
/2/Class A performance has been restated to reflect the maximum sales charge of 4.00%. Prior to 1/8/97, this was 4.75%. Class B
performance reflects the maximum contingent deferred sales charge (CDSC) of 5.00%, declining 1.00% each year during the first five
years and then converting to Class A shares after the fifth year.
/3/Class I shares have no sales load and are for institutional shareholders only.
[PHOTO OF MICHAEL HILT APPEARS HERE]
A Share Ticker . . . AMMXX . . . A Share Assets . . . $382,319,114 . . . B Share Assets . . . $2,892,075 . . . I Share Assets . . . $31,071,207 . . . A Share NAV . . . $1.00 . . . B Share NAV . . . $1.00 . . . I Share NAV . . . $1.00 . . . Number of Securities in Portfolio . . . 116
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.
How has the Fund performed over the last six months?
On a fee-adjusted basis, the Fund has performed in-line with other money market funds in our peer group. The AAL Money Market Fund maintains a neutral weighted average maturity when compared to its peer group, which should enable the Fund to continue to perform in-line with the peer group. In a rising interest rate environment, a longer weighted average maturity would result in under performance, as it would take longer to reinvest in commercial paper bearing a higher interest rate. Similarly, in a declining interest rate environment, a shorter weighted average maturity would result in under performance, as commercial paper would be reinvested more quickly into commercial paper bearing a lower interest rate.
While the Fund endeavors to take advantage of rising interest rates by lowering the weighted average maturity and delaying the impact of declining interest rates by extending the weighted average maturity, the Fund’s weighted average maturity does not differ materially from the peer group’s weighted average maturity. As a general rule, the Fund attempts to stay within 10% of the peer group’s weighted average maturity in order to minimize the risk of the Fund having either a yield or return that varies significantly from the peer group.
How do you select issues for the Fund?
The AAL Money Market Fund purchases commercial paper only from those companies that have been deemed to have strong credit quality and provide good liquidity. An approved list of issuers has been developed and maintained, and all companies on the approved list are reviewed and analyzed on a continual basis. Each quarter, investment analysts review the list of approved securities, paying particular attention to any potential for deterioration in an issuer’s credit fundamentals. Each issue is deemed either to have an appropriately low risk of credit deterioration or a heightened risk of credit deterioration, and it is removed from the approved list of issuers from which we select our investments for the Fund. If an issue is removed from the approved list, we then stop making additional investments in that issuer’s commercial paper. In cases where we believe that the short-term risk of credit deterioration exists, we may try to sell existing holdings if possible. In addition to reviewing the credit worthiness of issuers currently on the list, the analysts, portfolio manager, and traders also make recommendations for possible additions to the list of approved issuers. Before an issuer is added to the approved list, a thorough credit analysis is undertaken and a favorable opinion of the issuer’s ability to repay its debt and avoid any deterioration in its credit profile must be made.
Where do you see the Fund going from here?
Interest rates have leveled-off after a series of rate increases by the Federal Reserve Board. The bond markets are cautious, waiting to see whether interest rates will increase or decrease. We have positioned the Fund to take advantage of changing interest rates. Because the Fund’s weighted average maturity is short, typically between 40 and 65 days, the yield on the Fund will respond reasonably quickly to interest rate changes.
The AAL Money Market Fund
will continue to purchase high quality commercial paper and maintain a neutral
weighted average maturity. As a result, we expect the Fund to continue to
perform in-line with the peer group. We also expect that due to our rigorous
credit analysis, we will be able to avoid making investments in issuers
experiencing deterioration in their credit profile. Because the strategy we
employ is based on significant risk control, we believe the Fund will provide
investors with a short-term investment vehicle offering a competitive yield
while keeping the level of risk low.
/s/ Michael R. Hilt
Michael R. Hilt
Portfolio Manager
The AAL Money Market Fund
October 31, 2000
7 Day Yield+ 7 Day Effective Yield+
---------------------------------------------------------------
A Shares 5.80% 5.97%
B Shares 4.53% 4.63%
I Shares 6.17% 6.36%
+Yield quotations more closely reflect the current earnings of the Fund than the total return.
Average Annual Total Returns/1/
October 31, 2000
From Inception
1-Year 5-Year 10-Year Inception Date
---------------------------------------------------------------------------------------------------------------------------------------
Class A (without sales charge) 5.77% 5.11% 4.41% N/A 3/10/1988
Class B (without CDSC) 4.75% N/A N/A 4.12% 1/8/1997
Class B/2/ (with CDSC) 0.75% N/A N/A 3.65% 1/8/1997
Class I/3/ 6.13% N/A N/A 5.37% 12/29/1997
SEC Quarterly Standardized Returns as of September 29, 2000
Class A (without sales charge) 5.64% 5.09% 4.42% N/A
Class B/2/ (with CDSC) 0.65% N/A N/A 3.62%
Class I/3/ 6.00% N/A N/A 5.34%
/1/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.
/2/Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5.00%, declining 1.00% each year during the
first five years and then converting to Class A shares after the fifth year.
/3/Class I shares have no sales load and are for institutional shareholders only.
Schedule of Investments as of October 31, 2000
Investment Objective
The Fund seeks long-term capital appreciation by investing primarily in a diversified portfolio of common
stocks and securities convertible into common stocks.
Shares Common Stocks (90.7%) Market Value
=====================================================================
Consumer Cyclicals (1.3%)
3,300 Gemstar-TV Guide International, Inc.* $226,256
2,500 Macrovision Corporation* 182,188
---------------------------------------------------------------------
Total Consumer Cyclicals 408,444
---------------------------------------------------------------------
Consumer Staples (1.6%)
9,200 Comcast Corporation* 374,900
4,600 Pixar Animation Studios* 151,800
---------------------------------------------------------------------
Total Consumer Staples 526,700
---------------------------------------------------------------------
Health Care (2.5%)
4,300 Cephalon, Inc.* 230,588
6,100 Intermune Pharmaceuticals, Inc.* 305,000
900 Protein Design Labs, Inc.* 121,570
2,000 Sepracor, Inc.* 136,250
----------------------------------------------------------------------
Total Health Care 793,408
----------------------------------------------------------------------
Technology (85.3%)
2,800 I2 Technologies, Inc.* 476,000
7,300 ADC Telecommunications, Inc.* 156,037
3,100 Agile Software Corporation* 233,663
3,500 Akamai Technologies, Inc.* 178,500
18,300 America Online, Inc.* 922,869
5,600 Analog Devices, Inc.* 364,000
3,100 Applied Materials, Inc.* 164,688
3,900 Ariba, Inc.* 492,862
2,700 Art Technology Group, Inc.* 169,425
3,500 Avici Systems, Inc.* 151,813
4,700 BEA Systems, Inc.* 337,225
5,100 Blue Martini Software, Inc.* 191,888
4,300 Bookham Technology plc ADR* 144,856
15,300 Broadbase Software, Inc.* 164,475
2,500 Broadcom Corporation* 555,937
400 CacheFlow, Inc.* 43,200
4,200 Caliper Technologies Corporation* 236,775
5,900 CIENA Corporation* 620,237
27,300 Cisco Systems, Inc.* 1,470,787
9,600 Corning, Inc. 734,400
4,900 Corvis Corporation* 321,563
6,100 Critical Path, Inc.* $296,231
12,100 Dell Computer Corporation* 356,950
6,800 Electronic Arts, Inc.* 340,000
9,700 EMC Corporation* 863,906
5,800 Extreme Networks, Inc.* 481,037
4,900 GlobeSpan, Inc.* 376,994
10,200 Hewlett-Packard Company 473,663
12,600 HomeStore.com, Inc.* 428,400
3,200 Inktomi Corporation* 203,000
6,000 Integrated Device Technology, Inc.* 337,875
20,000 Intel Corporation 900,000
5,300 International Business Machines
Corporation 522,050
5,300 Intersil Holding Corporation* 254,069
30,600 Intertrust Technologies Corporation* 306,000
5,400 Intuit, Inc.* 331,762
11,200 Ixia* 262,500
3,500 JDS Uniphase Corporation* 285,031
3,800 Juniper Networks, Inc.* 741,000
9,600 Lucent Technologies, Inc. 223,800
4,900 MatrixOne, Inc.* 145,469
2,700 Mercury Interactive Corporation* 299,700
1,900 Micromuse, Inc.* 322,406
19,800 Microsoft Corporation* 1,363,725
6,000 Motorola, Inc. 149,625
3,200 Network Appliance, Inc.* 380,800
22,177 Nortel Networks Corporation 1,009,053
2,200 Novellus Systems, Inc.* 90,062
2,600 Nuance Communications, Inc.* 224,250
3,400 NVIDIA Corporation* 211,278
14,000 Oracle Corporation* 462,000
33,600 Parametric Technology Corporation* 413,700
3,100 PerkinElmer, Inc. 370,450
1,900 Phone.com, Inc.* 175,869
3,700 PMC-Sierra, Inc.* 627,150
3,200 QLogic Corporation* 309,600
1,500 Redback Networks, Inc.* 159,656
1,900 Research in Motion, Ltd.* 190,000
3,400 Scientific-Atlanta, Inc. 232,688
3,600 Siebel Systems, Inc.* $377,775
3,900 STMicroelectronics NV* 202,556
7,900 Sun Microsystems, Inc.* 875,913
6,200 Texas Instruments, Inc. 304,188
4,200 VeriSign, Inc.* 554,400
2,800 VERITAS Software Corporation* 394,844
6,200 Vignette Corporation* 184,838
3,300 Vitesse Semiconductor Corporation* $230,794
3,363 webMethods, Inc.* 298,887
4,600 Xilinx, Inc.* 333,212
-----------------------------------------------------------------------
Total Technology 27,010,356
-----------------------------------------------------------------------
Total Common Stocks
(cost basis $31,499,618) 28,738,908
-----------------------------------------------------------------------
Principal
Amount Short-Term Investments (13.0%) Interest Rate/1/ Maturity Date Market Value
====================================================================================================================================
$660,000 BellSouth Telecommunications, Inc. 6.450% 11/1/2000 $660,000
500,000 General Motors Acceptance Corporation 6.460 11/1/2000 500,000
600,000 Gillette Company 6.460 11/2/2000 599,892
434,000 Merrill Lynch & Company, Inc. 6.510 11/7/2000 433,528
756,000 New Jersey Natural Gas 6.500 11/6/2000 755,318
660,000 Verizon Global Funding Discount Notes 6.480 11/3/2000 659,762
500,000 Wisconsin Energy Corporation 6.480 11/2/2000 499,909
------------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $4,108,409) 4,108,409
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (103.7%)
(amortized cost basis $35,608,027) 32,847,317
------------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-3.7%) (1,176,017)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets (100.0%) $31,671,300
------------------------------------------------------------------------------------------------------------------------------------
*Non-income producing security.
/1/The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
Investment Objective
The Fund seeks long-term capital appreciation by investing primarily in a diversified portfolio of common
stocks and securities convertible into common stocks.
Shares Common Stocks (79.3%) Market Value
===============================================================
Capital Goods (3.7%)
6,770 Boeing Company $459,091
4,755 ONI Systems Corporation* 385,452
11,020 Symbol Technologies, Inc. 500,721
---------------------------------------------------------------
Total Capital Goods 1,345,264
Communication Services (12.5%)
10,710 China Mobile (Hong Kong), Ltd.
ADR* 327,994
5,965 Level 3 Communications, Inc.* 284,456
31,225 McLeodUSA, Inc.* 601,081
3,110 NTL, Inc.* 136,646
20 NTT Mobile Communications Network,
Inc. 492,736
6,545 Sprint Corporation (PCS Group)* 249,528
9,580 Telefonaktiebolaget LM Ericsson,
Class B* 127,163
14,512 Telefonica SA* 276,413
3,615 Telefonica SA ADR* 209,444
7,615 Telefonos de Mexico SA de CV Class L
ADR 410,734
15,500 TyCom, Ltd.* 519,250
20,405 Vodafone Group plc ADR 868,488
2,680 Winstar Communications, Inc.* 52,260
---------------------------------------------------------------
Total Communication Services 4,556,193
Consumer Cyclicals (4.4%)
10,090 Amazon.com, Inc.* 369,546
3,355 DoubleClick, Inc.* 54,519
2,805 eBay, Inc. 144,457
10,215 Gap, Inc. 263,675
7,985 Home Depot, Inc. 343,355
8,206 Palm, Inc.* 439,534
---------------------------------------------------------------
Total Consumer Cyclicals 1,615,086
Consumer Staples (14.6%)
5,770 Cablevision Systems Corporation* 429,865
22,710 Comcast Corporation* 925,432
5,805 Cox Communications, Inc.* 255,783
5,985 Gillette Company $208,727
9,360 Infinity Broadcasting Corporation* 311,220
70,450 Liberty Media Group* 1,268,100
19,285 Time Warner, Inc. 1,463,924
12,475 Walt Disney Company* 446,761
---------------------------------------------------------------
Total Consumer Staples 5,309,812
Financials (3.1%)
6,015 American Express Company 360,900
1,250 Chase Manhattan Corporation 56,875
18,225 E*TRADE Group, Inc.* 265,402
3,720 Fifth Third Bancorp 191,115
12,815 Firstar Corporation 252,295
---------------------------------------------------------------
Total Financials 1,126,587
Health Care (4.8%)
3,865 Eli Lilly and Company 345,434
3,790 Genzyme Corporation* 269,090
6,340 Guidant Corporation* 335,624
14,575 Medtronic, Inc. 791,605
---------------------------------------------------------------
Total Health Care 1,741,753
Technology (29.3%)
1,270 I2 Technologies, Inc.* 215,900
12,305 Analog Devices, Inc.* 799,825
6,605 Applied Materials, Inc.* 350,891
10,030 ASM Lithography Holding NV
ADR* 278,959
2,085 Avanex Corporation* 211,758
9,355 Cisco Systems, Inc.* 504,001
8,620 Electronic Arts, Inc.* 431,000
3,345 EMC Corporation* 297,914
11,680 Exodus Communications, Inc.* 392,010
3,075 Inktomi Corporation* 195,070
12,680 Integrated Device Technology, Inc.* 714,043
6,330 JDS Uniphase Corporation* 515,499
2,295 Microsoft Corporation* 158,068
49,875 Nokia Corporation ADR* 2,132,156
8,125 Phone.com, Inc.* 752,070
7,495 QUALCOMM, Inc.* $487,995
4,100 Sony Corporation 327,440
28,695 Telefonaktiebolaget LM Ericsson
ADR* 398,143
17,425 Texas Instruments, Inc. 854,914
1,820 VeriSign, Inc.* 240,240
2,920 VERITAS Software Corporation* 411,766
---------------------------------------------------------------
Total Technology 10,669,662
Utilities (6.9%)
3,020 Dominion Resources, Inc. $179,879
11,745 Duke Energy Corporation 1,015,208
16,090 Enron Corporation 1,320,386
---------------------------------------------------------------
Total Utilities 2,515,473
Total Common Stocks
(cost basis $30,885,864) 28,879,830
---------------------------------------------------------------
Principal
Amount Short-Term Investments (23.1%) Interest Rate/1/ Maturity Date Market Value
==============================================================================================================================
$8,400,000 Federal Home Loan Mortgage Corporation
Discount Notes 6.450% 11/1/2000 8,400,000
------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $8,400,000) 8,400,000
------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (102.4%)
(amortized cost basis $39,285,864) 37,279,830
------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-2.4%) (858,012)
------------------------------------------------------------------------------------------------------------------------------
Net Assets (100.0%) $36,421,818
------------------------------------------------------------------------------------------------------------------------------
*Non-income producing security.
/1/The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
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.
Shares Common Stocks (93.5%) Market Value
===================================================================
Basic Materials (2.9%)
37,800 Cambrex Corporation $1,509,638
72,300 Delta and Pine Land Company 1,766,831
279,000 Methanex Corporation* 1,116,000
132,200 NS Group, Inc.* 1,130,310
179,600 PolyOne Corporation 1,414,350
60,600 U.S. Aggregates, Inc. 848,400
-------------------------------------------------------------------
Total Basic Materials 7,785,529
Capital Goods (12.1%)
43,400 Alliant Techsystems, Inc.* 3,903,288
64,800 Artesyn Technologies, Inc.* 2,632,500
99,100 Benchmark Electronics, Inc.* 3,988,775
23,500 Cognex Corporation* 787,250
17,200 CTS Corporation 738,525
34,450 Dycom Industries, Inc.* 1,296,181
19,800 Electro Scientific Industries, Inc.* 691,763
33,100 Graco, Inc. 1,189,531
34,200 Harman International Industries, Inc. 1,641,600
83,600 Horizon Offshore, Inc.* 1,149,500
65,600 KEMET Corporation* 1,828,600
17,250 Merix Corporation* 805,628
57,700 Nordson Corporation 1,655,269
39,700 Oshkosh Truck Corporation 1,632,662
26,400 Plexus Corporation* 1,664,850
98,600 Power Integrations, Inc.* 1,324,937
19,600 Shaw Group, Inc.* 1,597,400
45,000 Stewart & Stevenson Services, Inc. 1,080,000
46,300 Teledyne Technologies, Inc.* 1,160,394
107,700 TETRA Technologies, Inc.* 1,554,919
-------------------------------------------------------------------
Total Capital Goods 32,323,572
Consumer Cyclicals (14.2%)
23,200 99 CENTS Only Stores* 520,550
80,500 Acxiom Corporation* 3,240,125
71,700 Catalina Marketing Corporation* 2,814,225
126,100 Dura Automotive Systems, Inc.* 1,063,969
75,500 Furniture Brands International, Inc.* 1,274,063
79,400 Gentex Corporation* 1,965,150
41,200 Getty Images, Inc.* 1,308,100
338,800 Hasbro, Inc. 3,642,100
88,200 Insight Enterprises, Inc.* $2,866,500
212,800 JAKKS Pacific, Inc.* 1,875,300
45,300 Lands' End, Inc.* 1,161,945
29,600 Linens 'n Things, Inc.* 910,200
14,800 Macrovision Corporation* 1,078,550
56,700 Management Network Group, Inc.* 747,731
62,600 META Group, Inc.* 602,525
19,700 Michaels Stores, Inc.* 478,956
93,700 O'Reilly Automotive, Inc.* 1,686,600
127,000 Pier 1 Imports, Inc. 1,682,750
101,600 Ross Stores, Inc. 1,339,850
191,900 ShopKo Stores, Inc.* 1,223,362
75,900 Steiner Leisure, Ltd.* 1,669,800
44,037 Tetra Tech, Inc.* 1,530,286
102,200 Tommy Hilfiger Corporation* 1,188,075
31,800 True North Communications, Inc. 1,198,462
49,900 Williams-Sonoma, Inc.* 1,038,544
-------------------------------------------------------------------
Total Consumer Cyclicals 38,107,718
Consumer Staples (6.5%)
40,300 Applebee's International, Inc. 1,217,185
5,700 Bindley Western Industries, Inc. 204,844
40,900 CEC Entertainment, Inc.* 1,303,687
98,100 Citadel Communications
Corporation* 1,189,462
44,300 Constellation Brands, Inc.* 2,159,625
74,600 Dreyer's Grand Ice Cream, Inc. 1,837,025
67,900 Emmis Communications
Corporation* 1,816,325
46,800 Jack in the Box, Inc.* 1,146,600
70,000 Patterson Dental Company* 2,191,875
83,100 Pinnacle Holdings, Inc.* 1,308,825
17,300 Priority Healthcare Corporation,
Class B* 929,875
73,000 Spherion Corporation* 866,875
25,100 Washington Federal, Inc. 560,044
17,800 Whole Foods Market, Inc.* 823,250
-------------------------------------------------------------------
Total Consumer Staples 17,555,497
Energy (4.9%)
56,600 Chieftain International, Inc.* 1,146,150
46,950 Cross Timbers Oil Company $883,247
225,900 Key Energy Services, Inc.* 2,033,100
35,300 National-Oilwell, Inc.* 1,032,525
23,400 Patterson Energy, Inc.* 658,125
113,300 Precision Drilling Corporation* 3,243,213
82,100 Pride International, Inc.* 2,078,156
106,800 UTI Energy Corporation* 2,142,675
-------------------------------------------------------------------
Total Energy 13,217,191
Financials (12.4%)
73,300 Annuity and Life Re (Holdings), Ltd. 2,020,331
9,100 Arthur J. Gallagher & Company 574,437
67,200 Bank United Corporation 3,809,400
136,500 Banknorth Group, Inc. 2,474,063
46,300 Centura Banks, Inc. 1,779,656
20,700 Commerce Bancorp, Inc. 1,253,644
96,800 Commercial Federal Corporation 1,694,000
60,300 Community First Bankshares, Inc. 934,650
93,100 Cullen/Frost Bankers, Inc. 3,101,394
42,000 E.W. Blanch Holdings, Inc. 792,750
35,100 Eaton Vance Corporation 1,748,419
89,900 Fidelity National Financial, Inc. 2,208,169
80,800 First American Corporation 1,691,750
109,800 FirstMerit Corporation 2,504,813
77,100 Hudson United Bancorp 1,725,112
84,600 Mutual Risk Management, Ltd. 1,533,375
29,700 Radian Group, Inc. 2,104,987
33,300 Raymond James Financial, Inc. 1,125,956
-------------------------------------------------------------------
Total Financials 33,076,906
Health Care (13.2%)
33,100 Alpharma, Inc. 1,284,694
22,300 Barr Laboratories, Inc.* 1,407,688
63,200 BioSource International, Inc.* 1,346,950
38,500 Cephalon, Inc.* 2,064,563
30,600 COR Therapeutics, Inc.* 1,728,900
31,200 Digene Corporation* 1,012,537
29,100 DURA Pharmaceuticals, Inc.* 1,002,131
168,600 Hooper Holmes, Inc. 1,600,014
30,300 InterMune Pharmaceuticals, Inc.* 1,515,000
35,306 King Pharmaceuticals, Inc.* 1,582,150
37,100 Medicis Pharmaceutical Corporation* 2,731,488
14,000 MiniMed, Inc.* 1,021,125
144,100 Omnicare, Inc. 2,521,750
27,500 Orthodontic Centers of America, Inc.* 917,812
23,300 Pharmaceutical Product Development,
Inc.* 729,581
19,300 PolyMedica Corporation* 1,109,750
24,200 Province Healthcare Company* 1,019,425
56,400 STERIS Corporation* $846,000
12,100 TECHNE Corporation* 1,364,275
39,300 Triad Hospitals, Inc.* 1,090,575
20,700 Trigon Healthcare, Inc.* 1,483,931
22,600 Universal Health Services, Inc.* 1,895,575
31,400 Varian Medical Systems, Inc.* 1,534,675
25,900 Vertex Pharmaceuticals, Inc.* 2,411,533
-------------------------------------------------------------------
Total Health Care 35,222,122
Technology (23.5%)
22,800 Actel Corporation* 835,050
46,300 Adaptive Broadband Corporation* 743,694
37,100 Advanced Power Technology, Inc.* 1,189,519
12,200 Agile Software Corporation* 919,575
48,600 Alliance Semiconductor Corporation* 972,000
23,600 Alpha Industries, Inc.* 941,050
68,900 Anixter International, Inc.* 1,670,825
27,100 APW, Ltd.* 1,251,681
30,400 Aware, Inc.* 940,500
57,000 BISYS Group, Inc.* 2,686,125
19,400 Black Box Corporation* 1,277,975
52,500 Broadbase Software, Inc.* 564,375
9,500 Caliper Technologies Corporation* 535,563
63,800 C-Cube Microsystems, Inc.* 1,244,100
297,200 CIBER, Inc.* 2,321,875
9,800 Coherent, Inc.* 341,163
135,800 Computer Network Technology
Corporation* 4,127,043
38,000 Cytyc Corporation* 2,255,657
41,900 Dallas Semiconductor Corporation 1,660,287
80,500 DMC Stratex Networks, Inc.* 1,861,563
13,100 DuPont Photomasks, Inc.* 735,237
32,000 Efficient Networks, Inc.* 1,342,499
27,600 Hyperion Solutions Corporation* 386,400
151,900 IMRglobal Corporation* 1,253,175
177,300 InterTrust Technologies Corporation* 1,773,000
45,400 IXYS Corporation* 1,149,187
28,500 Jack Henry & Associates, Inc. 1,567,500
70,000 Kent Electronics Corporation* 1,303,750
37,400 MatrixOne, Inc.* 1,110,312
84,100 Meade Instruments Corporation* 1,540,081
30,100 Mercury Computer Systems, Inc.* 933,100
20,900 Methode Electronics, Inc. 786,362
24,600 National Instruments Corporation* 1,148,513
86,500 NOVA Corporation* 1,356,969
145,000 Parametric Technology Corporation* 1,785,313
101,200 Photronics, Inc.* 2,283,325
62,100 Plantronics, Inc.* 2,833,313
51,300 RadiSys Corporation* 1,359,450
19,800 RSA Security, Inc.* $1,148,400
38,400 ScanSource, Inc.* 1,833,600
44,100 Terayon Communication Systems, Inc.* 986,738
57,600 Trimble Navigation, Ltd.* 1,368,000
26,700 Verity, Inc.* 627,450
41,700 Woodward Governor Company 1,867,380
149,800 Xircom, Inc.* 2,115,925
-------------------------------------------------------------------
Total Technology 62,934,599
Transportation (1.4%)
30,800 Atlantic Coast Airlines Holdings,
Inc.* 1,101,100
16,600 Expeditors International of
Washington, Inc. 861,125
16,100 SkyWest, Inc. $813,050
42,400 USFreightways Corporation 1,091,800
-------------------------------------------------------------------
Total Transportation 3,867,075
Utilities (2.4%)
98,400 MDU Resources Group, Inc. 2,878,200
49,000 Philadelphia Suburban Corporation 1,148,438
43,500 Piedmont Natural Gas Company, Inc. 1,326,750
40,200 WGL Holdings, Inc. 1,025,100
-------------------------------------------------------------------
Total Utilities 6,378,488
-------------------------------------------------------------------
Total Common Stocks
(cost basis $225,386,627) 250,468,697
-------------------------------------------------------------------
Principal
Amount Short-Term Investments (7.0%) Interest Rate/1/ Maturity Date Market Value
=========================================================================================================================
$3,657,000 AT&T Corporation 6.560% 11/7/2000 $3,653,002
3,607,000 Countrywide Home Loans, Inc. 6.560-6.580 11/6/2000-11/8/2000 3,602,830
5,013,000 Exxon Asset Management 6.480 11/2/2000 5,012,098
1,372,000 Ford Motor Credit Company 6.480 11/3/2000 1,371,504
5,000,000 General Motors Acceptance Corporation 6.450 11/1/2000 5,000,000
-------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $18,639,434) 18,639,434
-------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.5%)
(amortized cost basis $244,026,061) 269,108,131
-------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-0.5%) (1,348,738)
Net Assets (100.0%) $267,759,393
*Non-income producing security.
/1/The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes
to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
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.
Shares Common Stocks (91.5%) Market Value
===================================================================
Basic Materials (2.3%)
129,200 Bowater, Inc. $6,992,950
214,100 Southdown, Inc. 15,174,337
-------------------------------------------------------------------
Total Basic Materials 22,167,287
-------------------------------------------------------------------
Capital Goods (7.4%)
138,900 BFGoodrich Company 5,686,219
200,200 Jabil Circuit, Inc.* 11,423,912
256,350 MasTec, Inc.* 7,418,128
183,700 Nordson Corporation 5,269,894
884,300 Republic Services, Inc.* 11,882,781
174,900 SCI Systems, Inc.* 7,520,700
98,700 Shaw Group, Inc.* 8,044,050
71,000 SPX Corporation 8,777,375
151,600 Vishay Intertechnology, Inc.* 4,548,000
-------------------------------------------------------------------
Total Capital Goods 70,571,059
-------------------------------------------------------------------
Communication Services (1.5%)
237,800 Broadwing, Inc.* 6,717,850
71,200 Telephone and Data Systems, Inc. 7,511,600
-------------------------------------------------------------------
Total Communication Services 14,229,450
-------------------------------------------------------------------
Consumer Cyclicals (5.9%)
264,000 Acxiom Corporation* 10,626,000
271,100 AutoZone, Inc.* 7,268,869
185,500 Cintas Corporation 8,602,562
150,500 E. W. Scripps Company 8,794,844
558,300 Hasbro, Inc. 6,001,725
60,400 Macrovision Corporation* 4,401,650
72,800 RadioShack Corporation 4,340,700
192,100 Readers Digest Association, Inc. Trust
Automatic Common Exchange
Securities 6,195,225
-------------------------------------------------------------------
Total Consumer Cyclicals 56,231,575
-------------------------------------------------------------------
Consumer Staples (6.5%)
237,500 Keebler Foods Company 9,618,750
124,000 Manpower, Inc. 4,316,750
158,550 Outback Steakhouse, Inc.* 4,518,675
248,100 Pixar Animation Studios* 8,187,300
283,500 Starbucks Corporation* 12,668,906
241,200 Univision Communications, Inc.* $9,225,900
459,600 USA Networks, Inc.* 9,306,900
137,600 Valassis Communications, Inc.* 3,818,400
-------------------------------------------------------------------
Total Consumer Staples 61,661,581
-------------------------------------------------------------------
Energy (9.5%)
214,000 BJ Services Company* 11,221,625
445,200 EOG Resources, Inc. 17,529,750
202,900 Global Marine, Inc.* 5,376,850
117,900 Lone Star Technologies, Inc.* 4,733,685
331,500 Nabors Industries, Inc.* 16,873,350
266,500 Noble Drilling Corporation* 11,076,406
307,000 Precision Drilling Corporation* 8,787,875
324,800 Rowan Companies, Inc.* 8,180,900
193,200 Valero Energy Corporation 6,387,675
-------------------------------------------------------------------
Total Energy 90,168,116
-------------------------------------------------------------------
Financials (10.8%)
566,200 Banknorth Group, Inc. 10,262,375
172,000 Countrywide Credit Industries, Inc. 6,439,250
387,300 First Industrial Realty Trust, Inc. 11,957,888
464,400 Golden State Bancorp, Inc. 12,132,450
156,500 M&T Bank Corporation 7,856,300
120,800 Marshall & Ilsley Corporation 5,473,750
213,100 MGIC Investment Corporation 14,517,437
169,600 North Fork Bancorporation, Inc. 3,423,800
201,012 Old Kent Financial Corporation 5,565,520
239,600 Protective Life Corporation 5,540,750
252,600 SouthTrust Corporation 8,177,925
187,300 Zions Bancorporation 10,758,044
-------------------------------------------------------------------
Total Financials 102,105,489
-------------------------------------------------------------------
Health Care (13.8%)
136,300 ALZA Corporation* 11,031,781
163,500 Cephalon, Inc.* 8,767,688
58,200 Forest Laboratories, Inc.* 7,711,500
95,200 Genzyme Corporation* 6,759,200
612,900 Health Management Associates, Inc.* 12,143,081
47,500 IDEC Pharmaceuticals Corporation* 9,315,938
75,700 Incyte Genomics, Inc.* 2,772,513
185,300 InterMune Pharmaceuticals, Inc.* 9,265,000
181,200 IVAX Corporation* $7,882,200
123,900 Millennium Pharmaceuticals, Inc.* 8,990,494
97,600 MiniMed, Inc.* 7,118,700
104,400 Omnicare, Inc. 1,827,000
21,100 Protein Design Labs, Inc.* 2,850,148
67,000 Quest Diagnostics, Inc.* 6,448,750
118,400 Sepracor, Inc.* 8,066,000
154,500 Teva Pharmaceutical Industries , Ltd. 9,134,812
111,000 Trigon Healthcare, Inc.* 7,957,312
30,900 Vertex Pharmaceuticals, Inc.* 2,877,080
-------------------------------------------------------------------
Total Health Care 130,919,197
-------------------------------------------------------------------
Technology (26.5%)
79,400 Agile Software Corporation* 5,984,775
487,000 Atmel Corporation* 7,274,562
86,100 CheckFree Corporation* 4,283,475
154,300 Comdisco, Inc. 1,899,819
46,400 Comverse Technology, Inc.* 5,185,200
367,075 Concord EFS, Inc.* 15,164,786
185,500 Critical Path, Inc.* 9,008,344
231,800 Cypress Semiconductor Corporation* 8,678,012
198,300 Cytyc Corporation* 11,770,969
139,000 DST Systems, Inc.* 8,565,875
150,900 Electronic Arts, Inc.* 7,545,000
114,900 Fiserv, Inc.* 6,025,069
104,500 GlobeSpan, Inc.* 8,039,969
289,700 Homestore.com, Inc.* 9,849,800
198,600 Integrated Device Technology, Inc.* $11,183,663
172,900 Intersil Holding Corporation* 8,288,394
299,000 Intuit, Inc.* 18,369,812
157,100 MatrixOne, Inc.* 4,663,906
138,380 Nortel Networks Corporation 6,296,290
69,700 NVIDIA Corporation* 4,331,200
779,700 Parametric Technology Corporation* 9,600,056
143,600 PerkinElmer, Inc. 17,160,200
113,500 QLogic Corporation* 10,981,125
120,000 Rational Software Corporation* 7,162,500
34,800 VeriSign, Inc.* 4,593,600
190,000 Vignette Corporation* 5,664,375
194,600 Vitesse Semiconductor Corporation* 13,609,838
148,200 Waters Corporation* 10,753,762
97,586 webMethods, Inc.* 8,672,956
-------------------------------------------------------------------
Total Technology 250,607,332
-------------------------------------------------------------------
Utilities (7.3%)
258,700 Exelon Corporation 15,554,338
524,650 MDU Resources Group, Inc. 15,346,013
316,500 National Fuel Gas Company 16,972,312
198,700 Nicor, Inc. 7,016,594
570,300 NiSource, Inc. 14,221,856
-------------------------------------------------------------------
Total Utilities 69,111,113
-------------------------------------------------------------------
Total Common Stocks
(cost basis $740,107,373) 867,772,199
-------------------------------------------------------------------
Shares Preferred Stocks (1.1%) Interest Rate Maturity Date Market Value
===================================================================================================================================
130,500 Calpine Capital Trust II Convertible Preferred 5.500% 2/1/2005 10,766,250
Total Preferred Stocks
(cost basis $10,063,651) 10,766,250
-----------------------------------------------------------------------------------------------------------------------------------
Principal
Amount Long-Term Fixed Income Investments (1.1%) Interest Rate Maturity Date Market Value
===================================================================================================================================
$912,000 BEA Systems, Inc., Convertible Bonds 4.000% 6/15/2005 $9,912,300
-----------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income Investments
(amortized cost basis $1,905,085) 9,912,300
-----------------------------------------------------------------------------------------------------------------------------------
Principal
Amount Short-Term Investments (5.9%) Interest Rate/1/ Maturity Date Market Value
===================================================================================================================================
$8,000,000 American Express Credit Corporation 6.450% 11/1/2000 $8,000,000
12,255,000 American General Finance Corporation 6.480 11/7/2000 12,241,765
6,000,000 Baltimore Gas & Electric Company 6.470 11/3/2000 5,997,843
10,402,000 Countrywide Home Loans, Inc. 6.580 11/13/2000 10,379,185
7,637,000 Ford Motor Credit Company 6.490 11/6/2000 7,630,116
3,456,000 General Motors Acceptance Corporation 6.530 11/8/2000 3,451,612
2,478,000 Merrill Lynch & Company, Inc. 6.530 11/9/2000 2,474,404
5,259,000 Toyota Motor Credit Corporation 6.460 11/3/2000 5,258,056
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $55,432,981) 55,432,981
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.6%)
(amortized cost basis $807,509,090) 943,883,730
Other Assets, Less Liabilities (0.4%) 3,939,743
Total Net Assets (100.0%) $947,823,473
*Non-income producing security.
/1/The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
Investment Objective
The Fund seeks long-term capital growth by investing primarily in a diversified portfolio of foreign
stocks.
Shares Common Stocks (98.1%) Industry Market Value
=======================================================================================================================================
Brazil (0.8%)
115,578 Embratel Participacoes SA ADR Telephone $1,870,919
---------------------------------------------------------------------------------------------------------------------------------------
Total Brazil 1,870,919
---------------------------------------------------------------------------------------------------------------------------------------
Canada (1.9%)
97,524 Nortel Networks Corporation Telephone-Cellular & Wireless 4,412,591
---------------------------------------------------------------------------------------------------------------------------------------
Total Canada 4,412,591
---------------------------------------------------------------------------------------------------------------------------------------
France (13.2%)
56,210 Alcatel Services-Computer Systems 3,425,870
121,653 Aventis SA Pharmaceuticals 8,765,368
32,240 Carrefour SA Retail-Food Chains 2,161,723
78,254 Rhodia SA Chemicals 977,760
25,350 Suez Lyonnaise des Eaux SA Water Utilities 3,863,635
31,597 Total Fina Elf SA Oil & Gas Exploration/Production 4,515,770
63,251 Valeo SA Auto Parts & Equipment 2,750,510
63,381 Vivendi Services-Commercial & Consumer 4,550,624
---------------------------------------------------------------------------------------------------------------------------------------
Total France 31,011,260
---------------------------------------------------------------------------------------------------------------------------------------
Germany (5.8%)
10,133 Allianz AG Life & Health Insurance 3,407,443
64,966 Dresdner Bank AG Banks-Major Regional 2,624,083
70,391 E.ON AG Manufacturing-Diversified 3,556,246
30,848 MG Technologies AG Financials-Diversified 321,633
19,057 SAP Aktiengesellschaft Computer Software/Services 3,739,676
5,122 United Internet AG* Services-Advertising & Marketing 32,563
---------------------------------------------------------------------------------------------------------------------------------------
Total Germany 13,681,644
---------------------------------------------------------------------------------------------------------------------------------------
Hong Kong (5.3%)
578,000 China Mobile, Ltd. Telephone-Cellular & Wireless 3,724,227
1,612,000 China Unicom, Ltd. Telephone-Cellular & Wireless 3,234,831
173,000 Hutchison Whampoa, Ltd. Financial-Diversified 2,146,195
243,000 MTR Corporation, Ltd. Railroads 359,882
371,000 Sun Hung Kai Properties, Ltd. Investment Bank/Broker 3,068,357
---------------------------------------------------------------------------------------------------------------------------------------
Total Hong Kong 12,533,492
---------------------------------------------------------------------------------------------------------------------------------------
Italy (6.5%)
1,125,741 Banca Nazionale del Lavoro Banks-Major Regional 3,645,275
666,362 Eni SpA Oil & Gas Drilling Equipment 3,603,789
340,298 Mediaset SpA TV, Radio, Cable 4,918,268
382,381 Telecom Italia Mobile SpA Telephone-Cellular & Wireless 3,247,823
---------------------------------------------------------------------------------------------------------------------------------------
Total Italy 15,415,155
---------------------------------------------------------------------------------------------------------------------------------------
Japan (20.6%)
104,000 Bridgestone Corporation Auto Parts & Equipment 1,030,605
108,000 Fujitsu, Ltd. Communications Equipment 1,922,879
107,000 Kao Corporation Personal Care $3,204,523
20,700 Matsushita Communication Industrial
Company, Ltd. Telephone-Cellular & Wireless 2,711,054
618 Mizuho Holdings, Inc. Financial-Diversified 4,748,783
26,000 Murata Manufacturing Company, Ltd. Electronic Component Distributors 3,109,914
518 Nippon Telegraph and Telephone
Corporation Telephone 4,710,976
230,000 Nissan Motor Company, Ltd. Auto Parts & Equipment 1,577,762
109,000 Nomura Securities Company, Ltd. Financial-Diversified 2,311,050
160 NTT Mobile Communications
Network, Inc. Telephone-Cellular & Wireless 3,941,886
90,000 Pioneer Corporation House Furnishings 2,786,064
15,400 Rohm Company, Ltd. Electronic Component Distributors 3,880,102
488,000 Sakura Bank, Ltd. Banks-Major Regional 3,553,193
5,960 Shohkoh Fund & Company, Ltd. Financial-Diversified 489,087
61,960 Takeda Chemical Industries, Ltd. Pharmaceuticals 4,080,113
16,000 Takefuji Corporation Financial-Diversified 1,582,616
60,000 Yamanouchi Pharmaceutical
Company, Ltd. Pharmaceuticals 2,714,626
---------------------------------------------------------------------------------------------------------------------------------------
Total Japan 48,355,233
---------------------------------------------------------------------------------------------------------------------------------------
Mexico (1.1%)
50,430 Telefonos de Mexico SA de CV ADR Telephone 2,720,068
---------------------------------------------------------------------------------------------------------------------------------------
Total Mexico 2,720,068
---------------------------------------------------------------------------------------------------------------------------------------
Netherlands (13.9%)
43,699 Gucci Group NV Retail-Specialty Apparel 4,271,577
65,938 ING Groep NV Banks-Major Regional 4,522,932
193,043 Koninklijke (Royal) KPN NV Telephone 3,906,024
62,163 Koninklijke Philips Electronics NV Electronic Component Distributors 2,440,255
51,961 KPNQwest NV* Telephone 1,257,512
131,380 Royal Ahold NV Distribution-Food/Health 3,812,103
75,617 Unilever NV Foods 3,788,221
133,881 VNU NV Publishing 6,298,547
106,850 Wolters Kluwer NV Publishing 2,402,019
---------------------------------------------------------------------------------------------------------------------------------------
Total Netherlands 32,699,190
---------------------------------------------------------------------------------------------------------------------------------------
Singapore (1.2%)
236,000 DBS Group Holdings, Ltd. Banks-Major Regional 2,782,797
---------------------------------------------------------------------------------------------------------------------------------------
Total Singapore 2,782,797
---------------------------------------------------------------------------------------------------------------------------------------
South Korea (1.9%)
74,536 Korea Telecom Corporation ADR Telephone-Cellular & Wireless 2,748,515
67,430 SK Telecom Company, Ltd. ADR Telephone-Cellular & Wireless 1,689,964
---------------------------------------------------------------------------------------------------------------------------------------
Total South Korea 4,438,479
---------------------------------------------------------------------------------------------------------------------------------------
Spain (1.6%)
195,274 Telefonica SA* Telephone 3,719,426
---------------------------------------------------------------------------------------------------------------------------------------
Total Spain 3,719,426
---------------------------------------------------------------------------------------------------------------------------------------
Sweden (2.1%)
80,685 Skandinaviska Enskilda Banken Banks-Major Regional 950,211
303,364 Telefonaktiebolaget LM Ericsson AB Telephone-Cellular & Wireless 4,026,809
---------------------------------------------------------------------------------------------------------------------------------------
Total Sweden 4,977,020
---------------------------------------------------------------------------------------------------------------------------------------
Switzerland (1.7%)
2,630 Novartis AG Health Care-Drugs $3,988,660
---------------------------------------------------------------------------------------------------------------------------------------
Total Switzerland 3,988,660
---------------------------------------------------------------------------------------------------------------------------------------
Turkey (0.3%)
56,449 Turkcell Iletisim Hizmetleri AS ADR Telephone 617,411
---------------------------------------------------------------------------------------------------------------------------------------
Total Turkey 617,411
---------------------------------------------------------------------------------------------------------------------------------------
United Kingdom (20.2%)
89,017 AstraZeneca Group plc Pharmaceuticals 4,186,526
774,220 BAE SYSTEMS plc Aerospace/Defense 4,418,012
283,187 Cable and Wireless plc Telephone-Cellular & Wireless 4,021,445
102,690 COLT Telecom Group plc Telephone-Cellular & Wireless 3,280,354
544,025 Diageo plc Beverages-Non-Alcoholic 5,146,396
157,039 Glaxo Wellcome plc Pharmaceuticals 4,517,123
303,332 HSBC Holdings plc Banks-Regional 4,333,944
157,978 Railtrack Group plc Railroads 2,448,693
604,792 Reed International plc Publishing 5,589,518
424,200 Somerfield plc Retail-Food Chains 471,197
255,340 Telewest Communications plc* TV, Radio, Cable 423,589
2,094,750 Vodafone Group plc Telephone-Cellular & Wireless 8,736,996
---------------------------------------------------------------------------------------------------------------------------------------
Total United Kingdom 47,573,793
---------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks
(cost basis $222,603,400) 230,797,138
---------------------------------------------------------------------------------------------------------------------------------------
Principal Amount Short-Term Investments (2.3%) Interest Rate/1/ Maturity Date Market Value
=======================================================================================================================================
$5,300,000 United Parcel Service of America, Inc. 6.550% 11/1/2000 $5,300,000
---------------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $5,300,000) 5,300,000
---------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.4%)
(amortized cost basis $227,903,400) 236,097,138
---------------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-0.4%) (909,549)
---------------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (100.0%) $235,187,589
*Non income-producing security
/1/ The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
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.
Shares Common Stocks (90.5%) Market Value
===================================================================
Basic Materials (0.2%)
48,350 Corn Products International, Inc. $1,214,794
173,800 Eastman Chemical Company 7,451,675
-------------------------------------------------------------------
Total Basic Materials 8,666,469
-------------------------------------------------------------------
Capital Goods (6.4%)
405,900 Dover Corporation 17,225,381
3,637,600 General Electric Company 199,385,950
660,500 Herman Miller, Inc. 17,255,563
305,462 Honeywell International, Inc. 16,437,674
105,200 PACCAR, Inc. 4,424,975
434,500 United Technologies Corporation 30,333,531
-------------------------------------------------------------------
Total Capital Goods 285,063,074
-------------------------------------------------------------------
Communication Services (3.2%)
547,300 MediaOne Group, Inc. Convertible
Securities 22,678,744
930,739 SBC Communications, Inc. 53,692,006
280,300 Sprint Corporation 7,147,650
140,100 Sprint Corporation (PCS Group)* 5,341,312
717,900 Verizon Communications 41,503,594
481,400 WorldCom, Inc.* 11,433,250
-------------------------------------------------------------------
Total Communication Services 141,796,556
-------------------------------------------------------------------
Consumer Cyclicals (10.8%)
347,700 Family Dollar Stores, Inc. 6,758,419
352,800 Gannett Company, Inc. 20,462,400
1,439,200 Harley-Davidson, Inc. 69,351,450
463,800 New York Times Company 17,044,650
771,300 Ross Stores, Inc. 10,171,519
2,218,600 Tiffany & Company 94,706,487
285,400 Tribune Company 10,577,638
4,072,800 Walgreen Company 185,821,500
1,573,700 Wal-Mart Stores, Inc. 71,406,637
-------------------------------------------------------------------
Total Consumer Cyclicals 486,300,700
-------------------------------------------------------------------
Consumer Staples (14.9%)
275,200 Adelphia Communications
Corporation* 9,133,200
415,100 Alberto-Culver Company 13,931,794
278,100 Cablevision Systems Corporation* 20,718,450
3,217,700 Comcast Corporation* $131,121,275
3,221,300 Cox Communications, Inc.* 141,938,531
116,800 Dean Foods Company 3,737,600
1,332,800 General Mills, Inc. 55,644,400
397,900 Kimberly-Clark Corporation 26,261,400
3,632,532 Liberty Media Group* 65,385,576
1,783,800 Philip Morris Companies, Inc. 65,331,675
577,300 Safeway, Inc.* 31,571,094
765,500 Time Warner, Inc. 58,109,105
1,266,900 Walt Disney Company* 45,370,856
-------------------------------------------------------------------
Total Consumer Staples 668,254,956
-------------------------------------------------------------------
Energy (9.3%)
331,600 Apache Corporation* 18,341,625
127,900 BJ Services Company* 6,706,756
677,400 BP Amoco plc ADR 34,505,062
241,200 Chevron Corporation 19,808,550
444,200 ENSCO International, Inc. 14,769,650
2,166,900 EOG Resources, Inc. 85,321,688
1,162,000 Exxon Mobil Corporation 103,635,875
289,300 Global Marine, Inc.* 7,666,450
401,700 Halliburton Company 14,888,006
551,100 Nabors Industries, Inc.* 28,050,990
206,000 Noble Drilling Corporation* 8,561,875
634,100 Precision Drilling Corporation* 18,151,113
778,300 Royal Dutch Petroleum Company
ADR 46,211,563
116,000 Smith International, Inc.* 8,178,000
-------------------------------------------------------------------
Total Energy 414,797,203
-------------------------------------------------------------------
Financials (18.9%)
1,288,500 American Express Company 77,310,000
2,078,652 American International Group, Inc. 203,707,896
125,600 Associates First Capital Corporation 4,662,900
649,300 Bank of America Corporation 31,206,981
752,300 CIGNA Corporation 91,742,985
1,432,133 Citigroup, Inc. 75,365,999
732,500 Fannie Mae 56,402,500
532,100 Household International, Inc. 26,771,281
419,200 J.P. Morgan & Company, Inc. 69,377,600
1,026,693 MBNA Corporation 38,565,156
566,000 MGIC Investment Corporation $38,558,750
774,400 Morgan Stanley Dean Witter &
Company 62,194,000
1,029,000 National City Corporation 21,994,875
202,200 Northern Trust Corporation 17,262,825
250,640 Starwood Hotels & Resorts
Worldwide, Inc. 7,425,210
207,100 State Street Corporation 25,833,654
-------------------------------------------------------------------
Total Financials 848,382,612
-------------------------------------------------------------------
Health Care (10.8%)
386,300 Elan Corporation plc ADR* 20,063,456
682,200 Johnson & Johnson 62,847,675
451,200 Medtronic, Inc. 24,505,800
1,617,000 Merck & Company, Inc. 145,428,938
3,618,300 Pfizer, Inc. 156,265,331
703,400 Schering-Plough Corporation 36,356,988
335,500 WellPoint Health Networks, Inc.* 39,232,531
-------------------------------------------------------------------
Total Health Care 484,700,719
-------------------------------------------------------------------
Technology (15.3%)
5,776,400 ADC Telecommunications, Inc.* 123,470,550
70,061 Agilent Technologies, Inc.* 3,244,700
222,200 Arrow Electronics, Inc.* 7,110,400
1,605,000 Automatic Data Processing, Inc. 104,826,562
2,411,500 Cisco Systems, Inc.* $129,919,563
242,800 Computer Sciences Corporation* 15,296,400
674,866 First Data Corporation 33,827,658
302,800 Gateway, Inc.* 15,627,508
367,200 Hewlett-Packard Company 17,051,850
1,671,100 Intel Corporation 75,199,500
845,900 Microsoft Corporation* 58,261,363
1,274,100 Motorola, Inc. 31,772,869
387,600 National Data Corporation 14,777,250
1,152,300 Tellabs, Inc.* 57,542,981
-------------------------------------------------------------------
Total Technology 687,929,154
-------------------------------------------------------------------
Transportation (0.1%)
92,700 CNF, Inc. 2,473,931
-------------------------------------------------------------------
Total Transportation 2,473,931
-------------------------------------------------------------------
Utilities (0.6%)
262,200 Columbia Energy Group 18,862,012
250,600 Entergy Corporation 9,601,113
-------------------------------------------------------------------
Total Utilities 28,463,125
-------------------------------------------------------------------
Total Common Stocks
(cost basis $1,933,407,254) 4,056,828,499
-------------------------------------------------------------------
Principal
Amount Short-Term Investments (9.3%) Interest Rate/1/ Maturity Date Market Value
=======================================================================================================================================
$24,676,000 American Express Credit Corporation 6.460-6.470% 11/30/2000-12/6/2000 $24,533,871
26,001,000 American General Finance Corporation 6.450-6.470 11/3/2000-11/29/2000 25,940,266
22,917,000 AT&T Corporation 6.460-6.510 11/8/2000-12/12/2000 22,786,073
25,000,000 BellSouth Telecommunications, Inc. 6.450 11/2/2000 24,995,521
13,597,000 CIT Group, Inc. 6.490 11/7/2000 13,582,293
19,132,000 Coca-Cola Company 6.450 11/17/2000 19,077,155
20,667,000 Countrywide Home Loans, Inc. 6.520 11/9/2000-11/22/2000 20,622,100
19,295,000 E.I. du Pont de Nemours & Company 6.450 11/15/2000 19,246,602
25,000,000 Ford Motor Credit Company 6.460-6.470 11/1/2000-12/1/2000 24,938,761
25,000,000 General Electric Capital Corporation 6.450-6.460 12/11/2000-12/13/2000 24,815,599
18,817,000 General Motors Acceptance Corporation 6.480-6.490 12/7/2000-12/8/2000 18,692,328
25,000,000 Goldman Sachs Group, L.P. 6.490 11/6/2000 24,977,465
9,900,000 Hershey Foods Corporation 6.470 11/17/2000 9,871,532
24,760,000 Household Finance Corporation 6.460-6.480 11/28/2000-12/5/2000 24,624,078
15,090,000 International Business Machines Corporation 6.450 11/16/2000 15,049,446
13,000,000 MDU Resources Group, Inc. 6.480 11/14/2000 12,969,580
24,458,000 Merrill Lynch & Company, Inc. 6.470 11/8/2000-12/4/2000 24,397,029
13,587,000 Motorola, Inc. 6.470 11/22/2000-11/27/2000 13,524,140
Principal
Amount Short-Term Investments (9.3%) Interest Rate/1/ Maturity Date Market Value
=======================================================================================================================================
$5,006,000 SBC Communications, Inc. 6.460% 12/28/2000 $4,954,797
25,000,000 Toyota Motor Credit Corporation 6.450-6.460 11/8/2000-12/14/2000 24,892,416
23,780,000 Wisconsin Energy Corporation 6.480 12/15/2000 23,591,662
---------------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $418,082,714) 418,082,714
---------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.8%)
(amortized cost basis $2,351,489,968) 4,474,911,213
---------------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (0.2%) 10,390,536
Net Assets (100.0%) $4,485,301,749
*Non-income producing security.
/1/ The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes
to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
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.
Shares Common Stocks (93.0%) Market Value
===================================================================
Basic Materials (5.2%)
28,596 E.I. du Pont de Nemours and
Company $1,297,544
55,000 International Paper Company 2,014,375
100,000 Plum Creek Timber Company, Inc. 2,593,750
119,300 Southdown, Inc. 8,455,387
115,000 USX - U.S. Steel Group 1,832,812
-------------------------------------------------------------------
Total Basic Materials 16,193,868
-------------------------------------------------------------------
Capital Goods (7.8%)
40,000 BFGoodrich Company 1,637,500
55,000 Emerson Electric Company 4,039,062
135,250 Honeywell International, Inc. 7,278,141
50,000 Pitney Bowes, Inc. 1,484,375
94,000 Tyco International, Ltd. 5,328,625
62,000 United Technologies Corporation 4,328,375
-------------------------------------------------------------------
Total Capital Goods 24,096,078
-------------------------------------------------------------------
Communication Services (11.5%)
94,616 AT&T Corporation 2,193,909
2,203 Avaya, Inc.* 29,603
90,000 Cable and Wireless plc ADR 3,875,625
135,000 MediaOne Group, Inc. Convertible
Securities 5,594,062
113,147 SBC Communications, Inc. 6,527,168
106,000 Sprint Corporation 2,703,000
104,881 Telefonica SA ADR* 6,076,543
99,300 Verizon Communications 5,740,781
62,500 Vodafone Group plc ADR 2,660,156
-------------------------------------------------------------------
Total Communication Services 35,400,847
-------------------------------------------------------------------
Consumer Cyclicals (8.1%)
52,000 Convergys Corporation* 2,265,250
77,200 CVS Corporation 4,086,775
154,774 Delphi Automotive Systems
Corporation 2,428,017
157,812 Dollar General Corporation 2,446,086
57,690 Ford Motor Company 1,507,146
14,000 Gannett Company, Inc. $812,000
45,000 Home Depot, Inc. 1,935,000
84,000 Lowe's Companies, Inc. 3,837,750
97,000 Masco Corporation 1,812,687
28,000 New York Times Company 1,029,000
96,000 Target Corporation 2,652,000
4,321 Visteon Corporation 76,424
-------------------------------------------------------------------
Total Consumer Cyclicals 24,888,135
-------------------------------------------------------------------
Consumer Staples (3.8%)
44,000 Albertson's, Inc. 1,042,250
96,000 Flowers Industries, Inc. 1,476,000
105,000 Fox Entertainment Group, Inc.* 2,257,500
43,000 H.J. Heinz Company 1,803,313
87,776 Liberty Media Group* 1,579,968
76,000 Ralston Purina Company 1,843,000
86,000 Sara Lee Corporation 1,854,375
-------------------------------------------------------------------
Total Consumer Staples 11,856,406
-------------------------------------------------------------------
Energy (14.3%)
79,000 BJ Services Company* 4,142,563
178,191 Conoco, Inc., Class B 4,844,568
98,000 EOG Resources, Inc. 3,858,750
74,000 Halliburton Company 2,742,625
83,000 Nabors Industries, Inc.* 4,224,700
111,000 Noble Drilling Corporation* 4,613,437
118,000 Phillips Petroleum Company 7,286,500
123,000 Precision Drilling Corporation* 3,520,875
97,000 Texaco, Inc. 5,729,062
100,000 Valero Energy Corporation 3,306,250
-------------------------------------------------------------------
Total Energy 44,269,330
-------------------------------------------------------------------
Financials (20.4%)
81,900 Bank One Corporation 2,989,350
54,000 Bank of America Corporation 2,595,375
74,000 Bank of New York Company, Inc. 4,259,625
90,000 Chase Manhattan Corporation 4,095,000
40,000 CIGNA Corporation 4,878,000
129,333 Citigroup, Inc. $6,806,149
40,000 Crescent Real Estate Equities
Company 805,000
52,000 Duke-Weeks Realty Corporation 1,231,750
25,000 Equity Residential Properties Trust 1,176,563
95,000 Fannie Mae 7,315,000
111,000 First Industrial Realty Trust, Inc. 3,427,125
77,000 FleetBoston Financial Corporation 2,926,000
122,000 Freddie Mac 7,320,000
75,000 Mellon Financial Corporation 3,618,750
39,000 Simon Property Group, Inc. 870,187
53,000 Torchmark Corporation 1,765,563
102,000 Wells Fargo & Company 4,723,875
27,000 XL Capital, Ltd. 2,075,625
-------------------------------------------------------------------
Total Financials 62,878,937
-------------------------------------------------------------------
Health Care (5.8%)
25,000 ALZA Corporation* 2,023,438
56,000 Baxter International, Inc.* 4,602,500
30,000 Elan Corporation plc ADR* 1,558,125
29,000 Johnson & Johnson 2,671,625
99,000 Pfizer, Inc. 4,275,562
125,000 Serono SA ADR* 2,828,125
-------------------------------------------------------------------
Total Health Care 17,959,375
-------------------------------------------------------------------
Technology (6.1%)
102,000 ADC Telecommunications, Inc.* 2,180,250
40,000 CIENA Corporation* 4,205,000
48,000 Corning, Inc. 3,672,000
78,000 First Data Corporation $3,909,750
38,000 International Business Machines
Corporation 3,743,000
26,444 Lucent Technologies, Inc. 616,476
52,000 Parametric Technology Company* 640,250
-------------------------------------------------------------------
Total Technology 18,966,726
-------------------------------------------------------------------
Utilities (10.0%)
36,000 Ameren Corporation 1,431,000
43,800 American Electric Power Company,
Inc. 1,817,700
64,000 CMS Energy Corporation 1,728,000
22,650 Consolidated Edison, Inc. 796,997
48,000 Dominion Resources, Inc. 2,859,000
65,000 Edison International 1,551,875
60,000 National Fuel Gas Company 3,217,500
34,995 NSTAR 1,353,869
56,000 PG&E Corporation 1,508,500
67,000 Pinnacle West Capital Corporation 2,910,313
96,000 Questar Corporation 2,598,000
87,000 TXU Corporation 3,224,437
72,000 Williams Companies, Inc. 3,010,500
113,305 Xcel Energy, Inc. 2,896,359
-------------------------------------------------------------------
Total Utilities 30,904,050
-------------------------------------------------------------------
Total Common Stocks
(cost basis $232,746,816) 287,413,752
-------------------------------------------------------------------
Principal Interest
Amount Long-Term Fixed Income Investments (0.7%) Rate Maturity Date Market Value
===================================================================================================================================
$500,000 U.S. Treasury Bonds 7.500% 11/15/2016 $575,888
1,650,000 Texas Utilities Electric Bonds 9.750 5/1/2021 1,750,412
-----------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income Investments
(amortized cost basis $2,390,175) 2,326,300
-----------------------------------------------------------------------------------------------------------------------------------
Principal
Amount Short-Term Investments (6.2%) Interest Rate/1/ Maturity Date Market Value
===================================================================================================================================
$4,583,000 AT&T Corporation 6.560% 11/6/2000 $4,578,824
5,578,000 Countrywide Home Loans, Inc. 6.520-6.580 11/3/2000-11/7/2000 5,573,587
5,395,000 General Motors Acceptance Corporation 6.450 11/1/2000 5,395,000
3,530,000 Gillette Company 6.460 11/2/2000 3,529,367
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $19,076,778) 19,076,778
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.9%)
(amortized cost basis $254,213,769) 308,816,830
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (0.1%) 293,108
-----------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (100.0%) $309,109,938
* Non income-producing security
/1/ The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
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.
Shares Common Stocks (49.9%) Market Value
===================================================================
Basic Materials (0.1%)
1,800 Corn Products International, Inc. $45,225
6,500 Eastman Chemical Company 278,688
-------------------------------------------------------------------
Total Basic Materials 323,913
-------------------------------------------------------------------
Capital Goods (3.5%)
15,100 Dover Corporation 640,806
135,700 General Electric Company 7,438,056
24,600 Herman Miller, Inc. 642,675
11,387 Honeywell International, Inc. 612,763
3,900 PACCAR, Inc. 164,044
16,200 United Technologies Corporation 1,130,963
-------------------------------------------------------------------
Total Capital Goods 10,629,307
-------------------------------------------------------------------
Communication Services (1.7%)
18,500 MediaOne Group, Inc. Convertible
Securities 766,594
34,699 SBC Communications, Inc. 2,001,698
10,500 Sprint Corporation 267,750
5,200 Sprint Corporation (PCS Group)* 198,250
26,800 Verizon Communications 1,549,375
18,000 WorldCom, Inc.* 427,500
-------------------------------------------------------------------
Total Communication Services 5,211,167
-------------------------------------------------------------------
Consumer Cyclicals (6.0%)
13,000 Family Dollar Stores, Inc. 252,687
13,200 Gannett Company, Inc. 765,600
53,700 Harley-Davidson, Inc. 2,587,669
17,300 New York Times Company 635,775
28,700 Ross Stores, Inc. 378,481
82,800 Tiffany & Company 3,534,525
10,600 Tribune Company 392,863
152,000 Walgreen Company 6,935,000
58,700 Wal-Mart Stores, Inc. 2,663,513
-------------------------------------------------------------------
Total Consumer Cyclicals 18,146,113
-------------------------------------------------------------------
Consumer Staples (8.2%)
10,300 Adelphia Communications
Corporation* 341,831
15,500 Alberto-Culver Company 520,219
10,400 Cablevision Systems Corporation* $774,800
120,000 Comcast Corporation* 4,890,000
120,200 Cox Communications, Inc.* 5,296,313
4,400 Dean Foods Company 140,800
49,700 General Mills, Inc. 2,074,975
14,800 Kimberly-Clark Corporation 976,800
135,500 Liberty Media Group* 2,439,000
66,600 Philip Morris Companies, Inc. 2,439,225
21,500 Safeway, Inc.* 1,175,781
28,600 Time Warner, Inc. 2,171,026
47,300 Walt Disney Company* 1,693,931
-------------------------------------------------------------------
Total Consumer Staples 24,934,701
-------------------------------------------------------------------
Energy (5.1%)
12,400 Apache Corporation* 685,875
4,800 BJ Services Company* 251,700
25,300 BP Amoco plc ADR 1,288,719
9,000 Chevron Corporation 739,125
16,600 ENSCO International, Inc. 551,950
80,800 EOG Resources, Inc. 3,181,500
43,400 Exxon Mobil Corporation 3,870,738
10,800 Global Marine, Inc.* 286,200
15,000 Halliburton Company 555,938
20,600 Nabors Industries, Inc.* 1,048,540
7,700 Noble Drilling Corporation* 320,031
23,700 Precision Drilling Corporation* 678,412
29,000 Royal Dutch Petroleum Company
ADR 1,721,875
4,300 Smith International, Inc.* 303,150
-------------------------------------------------------------------
Total Energy 15,483,753
-------------------------------------------------------------------
Financials (10.5%)
48,100 American Express Company 2,886,000
77,512 American International Group, Inc. 7,596,176
4,700 Associates First Capital Corporation 174,488
24,200 Bank of America Corporation 1,163,113
28,100 CIGNA Corporation 3,426,795
53,466 Citigroup, Inc. 2,813,648
27,300 Fannie Mae 2,102,100
19,900 Household International, Inc. 1,001,219
15,600 J.P. Morgan & Company, Inc. $2,581,800
38,300 MBNA Corporation 1,438,644
21,100 MGIC Investment Corporation 1,437,437
28,900 Morgan Stanley Dean Witter &
Company 2,321,031
38,400 National City Corporation 820,800
7,500 Northern Trust Corporation 640,312
9,308 Starwood Hotels & Resorts
Worldwide, Inc. 275,749
7,700 State Street Corporation 960,498
-------------------------------------------------------------------
Total Financials 31,639,810
-------------------------------------------------------------------
Health Care (6.0%)
14,400 Elan Corporation plc ADR* 747,900
25,500 Johnson & Johnson 2,349,188
16,800 Medtronic, Inc. 912,450
60,300 Merck & Company, Inc. 5,423,231
135,000 Pfizer, Inc. 5,830,312
26,200 Schering-Plough Corporation 1,354,212
12,500 WellPoint Health Networks, Inc.* 1,461,719
-------------------------------------------------------------------
Total Health Care 18,079,012
-------------------------------------------------------------------
Technology (8.3%)
195,600 ADC Telecommunications, Inc.* 4,180,950
2,626 Agilent Technologies, Inc.* 121,617
8,300 Arrow Electronics, Inc.* 265,600
59,900 Automatic Data Processing, Inc. $3,912,219
90,000 Cisco Systems, Inc.* 4,848,750
9,100 Computer Sciences Corporation* 573,300
25,200 First Data Corporation 1,263,150
11,300 Gateway, Inc.* 583,193
13,800 Hewlett-Packard Company 640,837
62,300 Intel Corporation 2,803,500
31,600 Microsoft Corporation* 2,176,450
47,500 Motorola, Inc. 1,184,531
14,500 National Data Corporation 552,812
43,000 Tellabs, Inc.* 2,147,313
-------------------------------------------------------------------
Total Technology 25,254,222
-------------------------------------------------------------------
Transportation (0.1%)
3,500 CNF, Inc. 93,406
-------------------------------------------------------------------
Total Transportation 93,406
-------------------------------------------------------------------
Utilities (0.4%)
9,800 Columbia Energy Group 704,988
9,300 Entergy Corporation 356,306
-------------------------------------------------------------------
Total Utilities 1,061,294
-------------------------------------------------------------------
Total Common Stocks
(cost basis $118,908,735) $150,856,698
-------------------------------------------------------------------
Principal Interest Maturity Market
Amount Long-Term Fixed Income Investments (33.3%) Rate Date Value
=======================================================================================================================================
Asset-Backed Securities (2.7%)
$1,000,000 Bear Stearns Commercial Mortgage Securities Series 2000-WF2
Class A1 7.110% 9/15/2009 $1,004,629
1,000,000 EQCC Home Equity Loan Trust Series 1997-3 Class A7 6.930 2/15/2029 959,244
1,000,000 Green Tree Financial Corporation Series 1999-5 Class A4 7.330 4/1/2031 998,320
1,500,000 Green Tree Financial Corporation Series 1998-1 Class A6 6.330 11/1/2029 1,421,895
900,000 Harley-Davidson Eaglemark Motorcycle Trust Series 1999-1
Class Certificates 6.710 1/15/2007 880,200
2,000,000 Morgan Stanley Dean Witter Capital, Inc. Series 2000-LIF2 Class
A1 6.960 7/15/2008 1,997,344
1,000,000 Vanderbilt Mortgage Finance Series 2000-B Class IA2 8.045 7/7/2012 1,020,660
---------------------------------------------------------------------------------------------------------------------------------------
Total Asset-Backed Securities 8,282,292
---------------------------------------------------------------------------------------------------------------------------------------
Collateralized Mortgage Investments (1.8%)
1,000,000 First Union National Bank Commercial Mortgage Trust Series
1999-C4 Class A2 7.390 11/15/2009 1,016,776
969,993 Heller Financial Commercial Mortgage Asset Series 2000-PH1
Class A1 7.715 9/15/2008 997,970
$972,450 J.P. Morgan Commercial Mortgage Finance Corporation Series
2000-C9 Class A1 7.590% 10/15/2032 $994,020
1,300,000 Nationslink Funding Corporation Series 1999-2 Class A3 7.181 12/20/2006 1,310,031
1,000,000 Residential Asset Securities Corporation Series 2000-KS1 Class AI4 8.040 10/25/2008 1,015,270
---------------------------------------------------------------------------------------------------------------------------------------
Total Collateralized Mortgage Investments 5,334,067
---------------------------------------------------------------------------------------------------------------------------------------
Finance (2.5%)
1,000,000 Cabot Industrial Properties, L.P. 7.125 5/1/2004 979,934
1,500,000 Comdisco, Inc. 5.950 4/30/2002 1,125,330
1,000,000 EOP Operating, L.P. 6.800 1/15/2009 932,200
1,000,000 First Security Corporation 6.875 11/15/2006 983,299
2,600,000 Mack-Cali Realty, L.P. 7.000 3/15/2004 2,528,451
1,000,000 Sun Communities Operating, L.P. 7.375 5/1/2001 998,285
---------------------------------------------------------------------------------------------------------------------------------------
Total Finance 7,547,499
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Consumer Goods (0.4%)
1,100,000 ConAgra, Inc. 7.500 9/15/2005 1,109,733
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Consumer Goods 1,109,733
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Energy (2.8%)
1,000,000 Alberta Energy Company, Ltd. 7.650 9/15/2010 1,006,663
1,165,000 Coastal Corporation 6.500 5/15/2006 1,120,800
1,000,000 El Paso Energy Corporation 6.750 5/15/2009 950,411
1,500,000 Enron Corporation 6.400 7/15/2006 1,442,677
1,000,000 Enterprise Products Operating, L.P. 8.250 3/15/2000 1,020,461
1,000,000 Petroleum Geo-Services ASA 6.650 3/30/2008 934,138
1,000,000 Tosco Corporation 7.250 1/1/2007 991,960
1,000,000 USX Corporation 6.650 2/1/2006 968,246
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Energy 8,435,356
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Manufacturing (0.5%)
1,500,000 International Paper Company2 8.125 7/8/2005 1,535,238
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Manufacturing 1,535,238
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Services (2.9%)
1,000,000 Clear Channel Communications, Inc. 7.875 6/15/2005 1,008,578
1,000,000 Continental Cablevision, Inc. 8.875 9/15/2005 1,060,631
1,000,000 Equifax, Inc. 6.300 7/1/2005 965,868
1,000,000 Guidant Corporation 6.150 2/15/2006 934,123
1,700,000 News America Holdings 8.500 2/15/2005 1,771,861
1,000,000 Time Warner, Inc. 8.110 8/15/2006 1,036,194
2,000,000 Waste Management, Inc. 6.000 5/15/2001 1,965,000
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Services 8,742,255
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Transportation (0.4%)
1,400,000 American Airlines, Inc. 7.024 10/15/2009 1,363,642
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Transportation 1,363,642
---------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Agencies (9.1%)
$987,410 Federal Home Loan Mortgage Corporation Gold 30 Yr. Pass Through 8.000% 6/1/2030 $1,000,948
1,919,740 Federal Home Loan Mortgage Corporation Gold 30 Yr. Pass Through 7.500 12/1/2029 1,919,913
1,914,819 Federal Home Loan Mortgage Corporation Gold 30 Yr. Pass Through 7.000 10/1/2029 1,879,337
1,750,000 Federal National Mortgage Association 7.250 5/15/2030 1,849,647
1,750,000 Federal National Mortgage Association 7.125 6/15/2010 1,804,241
1,804,368 Federal National Mortgage Association 15 Yr. Pass Through 5.500 1/1/2014 1,703,052
1,939,107 Federal National Mortgage Association 30 Yr. Pass Through 8.000 6/1/2030 1,963,268
2,654,789 Federal National Mortgage Association 30 Yr. Pass Through 8.000 2/1/2030 2,688,160
2,969,852 Federal National Mortgage Association 30 Yr. Pass Through 7.500 8/1/2030 2,965,724
1,994,305 Federal National Mortgage Association 30 Yr. Pass Through 7.500 8/1/2030 1,991,532
3,611,564 Federal National Mortgage Association 30 Yr. Pass Through 7.500 3/1/2030 3,606,544
2,392,263 Federal National Mortgage Association 30 Yr. Pass Through 7.500 1/1/2030 2,390,181
1,896,298 Federal National Mortgage Association 30 Yr. Pass Through 7.000 9/1/2029 1,859,738
---------------------------------------------------------------------------------------------------------------------------------------
Total U.S. Government Agencies 27,622,285
---------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Securities (4.4%)
5,000,000 U.S. Treasury Bonds 8.750 5/15/2017 6,424,000
4,250,000 U.S. Treasury Bonds 7.250 5/15/2016 4,782,453
1,500,000 U.S. Treasury Bonds 12.000 8/15/2013 2,051,848
---------------------------------------------------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 13,258,301
---------------------------------------------------------------------------------------------------------------------------------------
Utilities (5.8%)
1,300,000 Arizona Public Service Company 6.250 1/15/2005 1,248,255
1,000,000 Cable & Wireless Optus Finance Property, Ltd.2 8.000 6/22/2010 1,039,020
1,000,000 CSW Investments2 7.450 8/1/2006 956,729
1,000,000 Edison Mission Holdings Company 8.137 10/1/2019 977,860
1,000,000 Enogex, Inc.2 8.125 1/15/2010 1,005,568
1,500,000 LCI International, Inc. 7.250 6/15/2007 1,466,910
1,500,000 NRG Northeast Generating LLC2 8.842 6/15/2015 2,009,080
2,000,000 NRG Northeast Generating LLC2 8.065 12/15/2004 1,549,770
1,500,000 ONEOK, Inc. 7.750 8/15/2006 1,519,276
1,000,000 Sierra Pacific Resources 8.750 5/15/2005 1,030,994
1,000,000 Sprint Capital Corporation 6.375 5/1/2009 898,130
1,500,000 TXU Eastern Funding Company 6.450 5/15/2005 1,415,361
1,490,000 UtiliCorp United, Inc. 7.625 11/15/2009 1,440,350
1,000,000 Vodafone Group plc2 7.750 2/15/2010 1,018,390
---------------------------------------------------------------------------------------------------------------------------------------
Total Utilities 17,575,693
---------------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed-Income Investments
(amortized cost basis $100,351,718) 100,806,361
---------------------------------------------------------------------------------------------------------------------------------------
Principal Interest Maturity Market
Amount Short-Term Investments (16.1%) Rate1 Date Value
===================================================================================================================================
$4,411,000 American Express Credit Corporation 6.480% 11/13/2000 $4,401,472
3,806,000 American General Finance Corporation 6.500 11/14/2000 3,797,066
4,836,000 AT&T Corporation 6.560-6.570 11/14/2000-11/16/2000 4,823,297
6,000,000 Countrywide Home Loans, Inc. 6.480-6.520 11/2/2000-11/9/2000 5,996,172
4,645,000 Ford Motor Credit Company 6.480 11/3/2000 4,643,328
6,000,000 General Electric Capital Corporation 6.470 11/1/2000 6,000,000
4,605,000 General Motors Acceptance Corporation 6.490 11/7/2000 4,600,019
5,310,000 Goldman Sachs Group, L.P. 6.490 11/6/2000 5,305,214
3,686,000 Household Finance Corporation 6.480 11/8/2000 3,681,356
5,508,000 Wisconsin Energy Corporation 6.490 11/17/2000 5,492,112
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $48,740,036) 48,740,036
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.3%)
(amortized cost basis $268,000,489) 300,403,095
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (0.7%) 2,172,767
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets (100.0%) $302,575,862
*Non-income producing security.
.
/1/ The interest rate reflects the discount rate at the date of purchase.
/2/ 144A security
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
Investment Objective
The Fund seeks capital growth that tracks the performance of the S&P SmallCap 600 Index, by
investing primarily in common stocks of the Index.
Shares Common Stocks (99.7%) Market Value
===============================================================
Basic Materials (3.4%)
400 A.M. Castle & Company $3,950
600 Arch Chemicals, Inc. 11,662
900 Birmingham Steel Corporation* 2,194
1,000 Buckeye Technologies, Inc.* 17,125
800 Cambrex Corporation 31,950
700 Caraustar Industries, Inc. 7,044
400 ChemFirst, Inc. 9,200
400 Chesapeake Corporation 7,850
300 Cleveland-Cliffs, Inc. 6,187
400 Commercial Metals Company 10,900
400 Commonwealth Industries, Inc. 2,325
1,000 Corn Products International, Inc. 25,125
1,100 Delta and Pine Land Company 26,881
300 Deltic Timber Corporation 5,831
1,300 DIMON, Inc. 3,981
600 Florida Rock Industries, Inc. 23,325
1,000 Georgia Gulf Corporation 13,375
400 IMCO Recycling, Inc. 2,225
800 Lilly Industries, Inc. 24,000
900 MacDermid, Inc. 19,350
400 Material Sciences Corporation* 4,050
700 Mississippi Chemical Corporation 3,150
800 OM Group, Inc. 37,000
1,100 Omnova Solutions, Inc. 6,188
200 Penford Corporation 2,550
2,900 PolyOne Corporation 22,838
400 Pope & Talbot, Inc. 6,225
200 Quaker Chemical Corporation 3,437
400 Quanex Corporation 7,925
300 Republic Group, Inc. 5,644
1,400 Steel Dynamics, Inc.* 16,800
300 Steel Technologies, Inc. 1,650
600 Texas Industries, Inc. 13,988
---------------------------------------------------------------
Total Basic Materials 385,925
---------------------------------------------------------------
Capital Goods (14.3%)
800 AAR Corporation 9,550
300 Alliant Techsystems, Inc.* 26,981
200 Amcast Industrial Corporation 2,000
700 A.O. Smith Corporation 9,888
1,000 AptarGroup, Inc. 20,688
1,200 Artesyn Technologies, Inc.* $48,750
500 Astec Industries, Inc.* 5,156
1,000 Baldor Electric Company 19,875
500 Barnes Group, Inc. 9,625
700 B/E Aerospace, Inc.* 11,550
700 Belden, Inc. 18,156
600 Benchmark Electronics, Inc.* 24,150
600 Black Box Corporation* 39,525
800 BMC Industries, Inc. 4,750
700 Brady Corporation 21,700
400 Brush Engineered Materials, Inc. 8,175
100 Butler Manufacturing Company 2,462
800 C&D Technologies, Inc. 47,300
1,000 C-COR.net Corporation* 15,625
900 Checkpoint Systems, Inc.* 7,144
700 CLARCOR, Inc. 13,388
1,300 Cognex Corporation* 43,550
600 Cohu, Inc. 9,487
900 CTS Corporation 38,644
400 CUNO, Inc.* 10,150
700 Dionex Corporation* 22,706
1,300 Dycom Industries, Inc.* 48,913
900 Electro Scientific Industries, Inc.* 31,444
500 Esterline Technologies Corporation* 11,156
400 Flow International Corporation* 5,000
1,200 Foster Wheeler Corporation 8,850
400 Gardner Denver, Inc.* 7,350
1,200 GenCorp, Inc. 10,050
700 Graco, Inc. 25,156
800 Griffon Corporation* 6,100
1,100 Harman International Industries, Inc. 52,800
1,000 IDEX Corporation 32,250
800 Insituform Technologies, Inc.* 28,550
200 Insteel Industries, Inc. 687
409 Intermagnetics General Corporation* 10,481
400 Ionics, Inc.* 8,375
400 Itron, Inc.* 2,350
1,300 JLG Industries, Inc. 18,119
700 Kaman Corporation 10,150
2,600 KEMET Corporation* 72,475
200 Lawson Products, Inc. 5,425
300 Lindsay Manufacturing Company 6,300
400 Lydall, Inc.* $4,225
700 Manitowoc Company, Inc. 19,031
1,000 Milacron, Inc. 15,937
1,000 Mueller Industries, Inc.* 23,313
640 Myers Industries, Inc. 8,480
100 Nashua Corporation 581
400 New England Business Service, Inc. 6,950
1,100 Orbital Sciences Corporation* 8,731
400 Park Electrochemical Corporation 26,425
1,300 Paxar Corporation 10,644
1,300 Plexus Corporation* 81,981
600 Regal-Beloit Corporation 10,050
800 Reliance Steel & Aluminum Company 19,000
300 Robbins & Myers, Inc. 7,256
1,000 Roper Industries, Inc. 35,000
600 RTI International Metals, Inc.* 8,700
500 School Specialty, Inc.* 7,688
500 Scott Technologies, Inc.* 11,500
1,000 SLI, Inc. 8,250
500 Speciality Equipment Companies, Inc.* 15,156
400 SPS Technologies, Inc.* 20,650
900 Standard Register Company 10,800
300 Standex International Corporation 5,494
1,100 Stillwater Mining Company* 31,900
500 Technitrol, Inc. 55,438
900 Teledyne Technologies, Inc.* 22,556
400 TETRA Technologies, Inc.* 5,775
400 Thomas Industries, Inc. 8,400
700 Three-Five Systems, Inc.* 24,150
1,100 Tredegar Corporation 20,969
1,000 United Stationers, Inc.* 30,063
400 URS Corporation* 5,125
1,100 Valence Technology, Inc.* 15,331
700 Valmont Industries, Inc. 14,262
1,300 Vicor Corporation* 70,200
1,500 Washington Group International, Inc.* 15,750
800 Watsco, Inc. 7,536
700 Watts Industries, Inc. 7,831
300 Wolverine Tube, Inc.* 4,087
500 ZixIt Corporation* 12,219
---------------------------------------------------------------
Total Capital Goods 1,610,390
---------------------------------------------------------------
Communication Services (1.0%)
900 Aeroflex, Inc.* 53,550
700 Aware, Inc.* 21,656
1,500 General Communication, Inc.* 11,719
1,000 Pac-West Telecomm, Inc.* 8,688
2,300 Talk.com, Inc.* 7,116
500 TelCom Semiconductor, Inc.* 7,031
---------------------------------------------------------------
Total Communication Services 109,760
---------------------------------------------------------------
Consumer Cyclicals (18.1%)
300 4Kids Entertainment, Inc.* $4,331
1,000 99 Cents Only Stores* 22,438
500 Aaron Rents, Inc. 8,375
600 ABM Industries, Inc. 16,762
400 Action Performance Companies, Inc.* 950
700 ADVO, Inc.* 25,769
800 Ames Department Stores, Inc.* 3,150
400 Anchor Gaming* 33,975
200 Angelica Corporation 1,775
900 AnnTaylor Stores Corporation* 27,000
800 Apogee Enterprises, Inc. 4,200
600 Applica, Inc.* 3,038
600 Applied Industrial Technologies, Inc. 10,163
500 A.T. Cross Company* 2,406
700 Arctic Cat, Inc. 8,969
400 Ashworth, Inc.* 2,950
1,200 Aztar Corporation* 18,150
300 Bassett Furniture Industries, Inc. 3,787
1,000 Bombay Company, Inc.* 2,500
500 Books-A-Million, Inc.* 1,250
500 Brown Shoe Company, Inc. 4,906
300 Building Materials Holding Corporation* 2,625
1,300 Burlington Coat Factory Warehouse
Corporation 20,475
1,400 Casey's General Stores, Inc. 17,500
1,700 Catalina Marketing Corporation* 66,725
700 Cato Corporation 8,400
1,100 Central Parking Corporation 21,106
1,100 Cerner Corporation* 68,131
1,400 Champion Enterprises, Inc.* 5,425
300 Chemed Corporation 9,862
600 Chico's FAS, Inc.* 19,425
1,300 ChoicePoint, Inc.* 66,544
400 Coachmen Industries, Inc. 3,350
700 Cone Mills Corporation* 2,931
600 Constellation Brands, Inc.* 29,250
1,600 Copart, Inc.* 24,100
600 Cost Plus, Inc.* 16,800
200 CPI Corporation 4,038
400 Cyrk, Inc.* 1,550
100 DAMARK International, Inc.* 1,275
400 Department 56, Inc.* 5,675
500 Discount Auto Parts, Inc.* 3,594
300 Dixie Group, Inc.* 956
500 Dress Barn, Inc.* 12,531
2,035 D.R. Horton, Inc. 37,647
500 Elcor Corporation 7,781
400 Enesco Group, Inc.* 2,700
1,100 Ethan Allen Interiors, Inc. 32,175
400 Factory 2-U Stores, Inc.* $12,775
1,000 Fedders Corporation 4,250
900 Fleetwood Enterprises, Inc. 11,869
600 Footstar, Inc.* 21,525
900 Fossil, Inc.* 11,756
600 Franklin Covey Company* 4,800
500 F.Y.I., Inc.* 20,063
600 G&K Services, Inc. 16,575
2,200 Gentex Corporation* 54,450
900 Goody's Family Clothing, Inc.* 3,234
300 Gottschalks, Inc.* 1,462
600 Group 1 Automotive, Inc.* 5,962
700 Gymboree Corporation* 6,256
100 Haggar Corporation 1,300
1,900 HA-LO Industries, Inc.* 7,363
500 Hancock Fabrics, Inc. 2,188
800 Hartmarx Corporation* 2,100
300 Huffy Corporation* 3,000
700 Hughes Supply, Inc. 13,125
800 Information Resources, Inc.* 4,250
1,250 Insight Enterprises, Inc.* 40,625
300 Insurance Auto Auctions, Inc.* 3,600
1,500 Interface, Inc. 13,688
700 Intermet Corporation 5,250
500 JAKKS Pacific, Inc.* 4,406
400 J. Baker, Inc. 1,562
500 Jo-Ann Stores, Inc.* 3,250
500 K2, Inc.* 4,750
700 Kellwood Company 13,606
600 Kroll-O'Gara Company* 3,525
300 K-Swiss, Inc. 8,250
1,800 La-Z-Boy, Inc. 28,350
1,600 Lennox International, Inc. 12,700
400 Libbey, Inc. 10,900
200 Lillian Vernon Corporation 1,850
1,200 Linens 'n Things, Inc.* 36,900
1,300 MascoTech, Inc. 21,694
500 Mayor's Jewelers, Inc.* 1,813
600 M.D.C. Holdings, Inc. 16,425
400 Meade Instruments Corporation* 7,325
1,200 Men's Wearhouse, Inc.* 35,100
1,000 Michaels Stores, Inc.* 24,312
400 Midas, Inc. 5,550
1,100 Midway Games, Inc.* 8,525
500 Monaco Coach Corporation* 8,531
300 National Presto Industries, Inc.* 9,113
900 Nautica Enterprises, Inc.* 11,363
300 NVR, Inc.* 31,020
1,500 O'Reilly Automotive, Inc.* 27,000
300 OshKosh B'Gosh, Inc. $4,800
200 Oxford Industries, Inc. 3,500
900 Pacific Sunwear of California, Inc.* 18,450
700 Pegasus Solutions, Inc.* 11,944
900 Penton Media, Inc. 27,506
1,600 Pep Boys-Manny, Moe & Jack 7,200
800 Phillips-Van Heusen Corporation 9,500
2,900 Pier 1 Imports, Inc. 38,425
700 Pinnacle Entertainment, Inc.* 15,969
800 Polaris Industries, Inc. 27,800
700 Pre-Paid Legal Services, Inc.* 30,713
1,500 Profit Recovery Group International,
Inc.* 8,063
600 Quiksilver, Inc.* 11,475
1,200 Regis Corporation 18,150
400 Royal Appliance Manufacturing
Company* 2,300
600 Russ Berrie and Company, Inc. 13,612
400 Ryland Group, Inc. 12,900
400 Salton, Inc.* 9,150
900 Scotts Company* 32,175
500 SCP Pool Corporation* 12,938
600 Shaw Group, Inc.* 48,900
800 ShopKo Stores, Inc.* 5,100
500 Simpson Industries, Inc. 5,906
400 Simpson Manufacturing Company,
Inc.* 17,050
200 Skyline Corporation 4,338
300 Spartan Motors, Inc.* 750
300 Standard Motor Products, Inc. 2,512
800 Standard Pacific Corporation 15,000
1,300 Stein Mart, Inc.* 20,150
1,300 Stride Rite Corporation 6,987
800 Sturm, Ruger & Company, Inc. 6,750
600 TBC Corporation* 2,925
1,000 Tenneco Automotive, Inc. 4,313
1,300 Tetra Tech, Inc.* 45,175
400 Thomas Nelson, Inc. 2,675
300 Thor Industries, Inc. 6,000
1,300 Timberland Company* 67,113
600 Titan International, Inc. 2,737
1,100 Toll Brothers, Inc.* 35,750
400 Toro Company 14,000
1,400 Tower Automotive, Inc.* 15,400
600 Universal Forest Products, Inc. 8,100
600 Wabash National Corporation 4,800
400 WD-40 Company 8,750
400 Wet Seal, Inc.* 7,500
600 Winnebago Industries, Inc. 6,900
1,200 Wolverine World Wide, Inc. $12,975
1,100 Zale Corporation* 37,262
---------------------------------------------------------------
Total Consumer Cyclicals 2,041,089
---------------------------------------------------------------
Consumer Staples (7.3%)
300 Agribrands International, Inc.* 13,050
500 American Italian Pasta Company* 10,031
800 Applebee's International, Inc.* 24,162
1,100 Bindley Western Industries, Inc. 39,531
1,000 Bowne & Company, Inc. 8,375
500 CDI Corporation* 7,938
900 CEC Entertainment, Inc.* 28,687
1,000 Cheesecake Factory, Inc.* 44,313
2,000 Chiquita Brands International, Inc.* 3,875
300 Coca-Cola Bottling Company
Consolidated 10,800
300 Consolidated Graphics, Inc.* 3,225
800 Consolidated Products, Inc.* 6,050
1,200 Earthgrains Company 24,300
800 Edgewater Technology, Inc.* 3,925
1,100 Fleming Companies, Inc. 15,606
1,100 Great Alantic & Pacific Tea Company,
Inc. 11,000
900 Hain Celestial Group, Inc.* 35,719
300 Hall, Kinion & Associates, Inc.* 7,931
600 Heidrick & Struggles International, Inc.* 37,088
600 IHOP Corporation* 12,675
500 International Multifoods Corporation 8,469
200 J & J Snack Foods Corporation* 2,687
1,100 Jack in the Box, Inc.* 26,950
800 John H. Harland Company 11,100
1,200 Labor Ready, Inc.* 3,600
600 Landry's Seafood Restaurants, Inc. 4,837
600 Luby's, Inc. 3,525
800 Marcus Corporation 11,350
500 Michael Foods, Inc. 13,469
300 Nash Finch Company 3,712
500 Nature's Sunshine Products, Inc. 3,531
2,000 NBTY, Inc.* 13,000
900 Owens & Minor, Inc. 13,613
300 Panera Bread Company* 6,188
2,100 Patterson Dental Company* 65,756
500 Performance Food Group Company* 20,250
1,300 Prime Hospitality Corporation* 12,350
700 Priority Healthcare Corporation* 37,625
900 Ralcorp Holdings, Inc.* 12,656
1,800 Ruby Tuesday, Inc. 24,412
900 Ryan's Family Steak Houses, Inc.* 7,538
400 Schweitzer-Mauduit International, Inc. 6,475
1,700 Smithfield Foods, Inc.* $48,769
600 Sonic Corporation* 21,900
1,900 Spherion Corporation* 22,563
300 Taco Cabana, Inc.* 2,522
600 Triarc Companies, Inc.* 14,963
500 United Natural Foods, Inc.* 6,281
400 Volt Information Sciences, Inc.* 8,700
800 Whole Foods Market, Inc.* 37,000
---------------------------------------------------------------
Total Consumer Staples 824,072
---------------------------------------------------------------
Energy (5.4%)
500 Atwood Oceanics, Inc.* 16,781
1,000 Barrett Resources Corporation* 36,375
800 Cabot Oil & Gas Corporation 15,700
500 Cal Dive International, Inc.* 24,875
2,100 Cross Timbers Oil Company 39,506
600 Dril-Quip, Inc.* 19,800
1,400 Friede Goldman Halter, Inc.* 8,050
600 HS Resources, Inc.* 18,675
1,500 Input/Output, Inc.* 12,656
1,400 Louis Dreyfus Natural Gas
Corporation* 44,887
1,300 Newfield Exploration Company* 49,075
500 Nuevo Energy Company* 9,062
600 Oceaneering International, Inc.* 8,438
600 Offshore Logistics, Inc.* 10,350
500 Patina Oil & Gas Corporation 8,781
500 Plains Resources, Inc.* 9,562
1,200 Pogo Producing Company 30,000
1,900 Pride International, Inc.* 48,094
600 Remington Oil & Gas Corporation* 5,513
600 SEACOR SMIT, Inc.* 25,125
700 Seitel, Inc.* 10,500
600 St. Mary Land & Exploration
Company 14,063
600 Stone Energy Corporation* 30,720
700 Swift Energy Company* 22,750
800 UGI Corporation 18,550
900 Unisource Energy Corporation 13,444
800 Veritas DGC, Inc.* 24,000
1,800 Vintage Petroleum, Inc. 38,025
---------------------------------------------------------------
Total Energy 613,357
---------------------------------------------------------------
Financials (12.6%)
2,200 AmeriCredit Corporation* 59,125
700 Anchor BanCorp Wisconsin, Inc. 10,806
1,200 Arthur J. Gallagher & Company 75,750
700 Cash America International, Inc. 3,631
1,300 Centura Banks, Inc. 49,969
800 Chittenden Corporation $21,250
1,000 Commerce Bancorp, Inc. 60,563
1,700 Commercial Federal Corporation 29,750
1,300 Community First Bankshares, Inc. 20,150
1,600 Cullen/Frost Bankers, Inc. 53,300
400 Dain Rauscher Corporation 37,525
700 Delphi Financial Group, Inc.* 25,900
900 Downey Financial Corporation 42,975
1,100 Eaton Vance Corporation 54,794
1,100 Enhance Financial Services Group, Inc. 12,787
300 E. W. Blanch Holdings, Inc. 5,662
2,000 Fidelity National Financial, Inc. 49,125
1,900 First American Corporation 39,781
800 First BanCorp 18,350
1,200 First Midwest Bancorp, Inc. 30,075
2,100 Fremont General Corporation 7,613
400 GBC Bancorp 12,750
400 Hilb, Rogal and Hamilton Company 15,850
1,400 Hudson United Bancorp 31,325
1,300 Imperial Bancorp* 31,606
1,000 Investors Financial Services
Corporation 71,688
700 Jefferies Group, Inc. 19,075
600 MAF Bancorp, Inc. 14,400
800 Morgan Keegan, Inc. 15,950
1,200 Mutual Risk Management, Ltd. 21,750
700 National Discount Brokers Group, Inc.* 34,081
800 Provident Bankshares Corporation 15,150
600 Queens County Bancorp, Inc. 16,800
1,200 Radian Group, Inc. 85,050
1,400 Raymond James Financial, Inc. 47,337
800 Riggs National Corporation 9,000
300 RLI Corporation 11,737
200 SCPIE Holdings, Inc. 3,800
700 Selective Insurance Group, Inc. 12,075
1,300 South Financial Group, Inc. 13,244
900 Southwest Bancorporation of Texas, Inc.* 32,850
430 Southwest Securities Group, Inc. 12,148
1,000 Staten Island Bancorp, Inc. 19,313
1,100 Susquehanna Bancshares, Inc. 15,537
900 Trenwick Group, Ltd. 17,663
1,825 TrustCo Bank Corp New York 21,900
600 Tucker Anthony Sutro 13,875
1,200 United Bankshares, Inc. 23,400
1,500 Washington Federal, Inc. 33,469
700 Whitney Holding Corporation 25,856
500 Zenith National Insurance Corporation 11,375
---------------------------------------------------------------
Total Financials 1,418,935
---------------------------------------------------------------
Health Care (12.8%)
600 ADAC Laboratories, Inc.* $7,800
900 Administaff, Inc.* 31,950
800 Advance Paradigm, Inc.* 39,100
1,800 Advanced Tissue Sciences, Inc.* 12,825
1,400 Alliance Pharmaceutical Corporation* 19,775
1,300 Alpharma, Inc. 50,456
1,100 Barr Laboratories, Inc.* 69,438
700 Biomatrix, Inc.* 13,388
1,600 Bio-Technology General Corporation* 16,800
1,300 Cephalon, Inc.* 69,712
400 CONMED Corporation* 5,875
500 Cooper Companies, Inc. 17,875
1,700 COR Therapeutics, Inc.* 96,050
1,700 Coventry Health Care, Inc.* 31,025
200 Curative Health Services, Inc.* 1,100
700 Cygnus, Inc.* 6,256
500 Datascope Corporation 17,312
500 Diagnostic Products Corporation 22,813
1,400 DURAPharmaceuticals, Inc.* 48,213
800 Enzo Biochem, Inc.* 30,800
500 Hanger Orthopedic Group, Inc.* 1,625
400 Hologic, Inc.* 2,650
2,000 Hooper Holmes, Inc. 18,980
1,000 IDEXX Laboratories, Inc.* 24,000
800 Immune Response Corporation* 4,850
900 Invacare Corporation 25,650
700 Laser Vision Centers, Inc.* 2,844
600 MAXIMUS, Inc.* 14,737
900 Medicis Pharmaceutical Corporation* 66,262
500 MemberWorks, Inc.* 17,188
700 Mentor Corporation 12,337
1,400 Mid Atlantic Medical Services, Inc.* 23,800
400 Morrison Management Specialists, Inc. 13,400
700 Noven Pharmaceuticals, Inc.* 31,194
700 On Assignment, Inc.* 17,631
1,000 Organogenesis, Inc.* 12,540
1,500 Orthodontic Centers of America, Inc.* 50,062
400 Osteotech, Inc.* 2,200
700 PAREXEL International Corporation* 6,125
400 Pediatrix Medical Group, Inc.* 6,375
800 Pharmaceutical Product Development,
Inc.* 25,050
400 PolyMedica Corporation* 23,000
1,000 Province Healthcare Company* 42,125
1,100 Regeneron Pharmaceuticals, Inc.* 29,425
1,300 Renal Care Group, Inc.* 30,550
900 ResMed, Inc.* 22,950
800 Respironics, Inc.* 15,700
800 Sierra Health Services, Inc.* 4,350
700 Sola International, Inc.* $3,019
200 Spacelabs Medical, Inc.* 2,125
600 Sunrise Medical, Inc.* 5,588
700 Syncor International Corporation* 17,981
700 TECHNE Corporation* 78,925
800 Theragenics Corporation* 3,750
1,000 Universal Health Services, Inc., Class B* 83,875
2,700 US Oncology, Inc.* 14,513
1,000 Varian Medical Systems, Inc.* 48,875
100 Vertex Pharmaceuticals, Inc.* 9,311
400 Vital Signs, Inc. 12,450
---------------------------------------------------------------
Total Health Care 1,436,575
---------------------------------------------------------------
Technology (18.2%)
800 Actel Corporation* 29,300
1,100 Adaptive Broadband Corporation* 17,669
800 Allen Telecom, Inc.* 14,950
1,200 Alliance Semiconductor Corporation* 24,000
1,300 Alpha Industries, Inc.* 51,838
1,200 American Management Systems, Inc.* 25,950
400 Analogic Corporation 14,125
600 Analysts International Corporation 3,750
1,100 Anixter International, Inc.* 26,675
1,200 APW, Ltd.* 55,425
1,500 Aspect Communications Corporation* 24,726
800 Aspen Technology, Inc.* 33,050
600 Audiovox Corporation* 8,213
800 Auspex Systems, Inc.* 8,100
1,100 Avant! Corporation* 18,494
700 Avid Technology, Inc.* 9,713
900 AVT Corporation* 5,653
700 AXT, Inc.* 26,950
500 BARRA, Inc.* 30,562
1,200 Billing Concepts Corporation* 3,600
1,700 BISYS Group, Inc.* 80,113
1,600 Brightpoint, Inc.* 10,650
300 Brooktrout, Inc.* 4,331
1,250 Cable Design Technologies Corporation* 28,828
300 CACI International, Inc.* 6,187
1,400 C-Cube Microsystems, Inc.* 27,300
1,800 CIBER, Inc.* 14,063
800 Coherent, Inc.* 27,850
600 Computer Task Group, Inc.* 3,150
400 Concord Communications, Inc.* 3,100
1,900 Dallas Semiconductor Corporation 75,288
400 Davox Corporation* 3,900
1,100 Dendrite International, Inc.* 23,925
400 Digi International, Inc.* 2,900
2,200 DMC Stratex Networks, Inc.* 50,875
600 Electroglas, Inc.* 8,437
1,400 eLoyalty Corporation* $13,475
1,200 Epicor Software Corporation* 2,362
700 ePresence, Inc.* 4,944
1,300 ESS Technology, Inc.* 20,150
600 Exabyte Corporation* 4,650
1,000 FactSet Research Systems, Inc. 37,870
500 Fair, Isaac and Company, Inc. 20,500
1,000 FileNET Corporation* 26,500
1,100 General Instrument Corporation* 12,581
600 Gerber Scientific, Inc. 4,800
700 Great Plains Software, Inc.* 27,256
600 Helix Technology Corporation 16,725
900 HNC Software, Inc.* 18,281
700 Hutchinson Technology, Inc.* 15,356
900 Hyperion Solutions Corporation* 12,600
400 Innovex, Inc.* 5,600
700 Inter-Tel, Inc. 8,094
900 InterVoice-Brite, Inc.* 8,803
1,300 Jack Henry & Associates, Inc. 71,500
800 Kent Electronics Corporation* 14,900
400 Kronos, Inc.* 14,575
1,400 Kulicke and Soffa Industries, Inc.* 20,563
700 Mercury Computer Systems, Inc.* 21,700
1,100 Methode Electronics, Inc. 41,387
500 MICROS Systems, Inc.* 9,875
1,000 National Data Corporation 38,125
1,600 National Instruments Corporation* 74,700
600 Network Equipment Technologies, Inc.* 5,700
800 NYFIX, Inc.* 31,600
2,300 P-Com, Inc.* 12,937
700 Pericom Semiconductor Corporation* 18,550
700 Phoenix Technologies, Ltd.* 11,244
400 Photon Dynamics, Inc.* 14,400
1,000 Photronics, Inc.* 22,562
1,500 Pinnacle Systems, Inc.* 18,938
800 Pioneer-Standard Electronics, Inc. 11,100
1,500 Plantronics, Inc.* 68,438
1,000 Progress Software Corporation* 15,813
600 Project Software & Development, Inc.* 7,800
800 Proxim, Inc.* 48,500
400 QRS Corporation* 3,375
500 RadiSys Corporation* 13,250
1,800 Read-Rite Corporation* 13,388
900 Remedy Corporation* 15,412
1,000 Robotic Vision Systems, Inc.* 5,469
1,300 RSA Security, Inc.* 75,400
2,700 S3, Inc.* 24,384
800 SAGA SYSTEMS, Inc.* 4,300
1,100 Silicon Valley Group, Inc.* 36,231
800 SpeedFam-IPEC, Inc.* 7,600
200 SPSS, Inc.* $4,500
400 Standard Microsystems Corporation* 9,600
400 StarTek, Inc.* 10,175
650 SymmetriCom, Inc.* 8,287
900 Systems & Computer Technology
Corporation* 12,994
500 Telxon Corporation* 11,219
500 THQ, Inc.* 10,250
700 Trimble Navigation, Ltd.* 16,625
600 Ultratech Stepper, Inc.* 14,100
900 Verity, Inc.* 21,150
600 ViaSat, Inc.* 13,200
900 Visual Networks, Inc.* 3,319
900 Xircom, Inc.* 12,712
600 X-Rite, Inc. 4,050
1,000 Zebra Technologies Corporation* 43,812
---------------------------------------------------------------
Total Technology 2,053,896
---------------------------------------------------------------
Transportation (3.3%)
900 American Freightways Corporation* 14,512
500 Arkansas Best Corporation* 8,000
700 Atlantic Coast Airlines Holdings, Inc.* 25,025
1,600 Expeditors International of Washington,
Inc. 83,000
700 Forward Air Corporation* 28,788
1,100 Fritz Companies, Inc.* 8,938
400 Frozen Food Express Industries, Inc.* 875
700 Heartland Express, Inc.* 12,163
700 Kirby Corporation* 12,906
300 Landstar System, Inc.* 14,175
900 Mesa Air Group, Inc.* 5,287
400 Midwest Express Holdings, Inc.* 7,600
300 M.S. Carriers, Inc.* 4,687
600 Oshkosh Truck Corporation 24,675
500 Roadway Express, Inc. 10,281
1,700 Rollins Truck Leasing Corporation $8,925
900 SkyWest, Inc. 45,450
700 USFreightways Corporation 18,025
1,400 Werner Enterprises, Inc. 19,600
700 Yellow Corporation* 12,600
---------------------------------------------------------------
Total Transportation 365,512
---------------------------------------------------------------
Utilities (3.3%)
300 American States Water Company 9,356
900 Atmos Energy Corporation 20,813
1,400 Avista Corporation 31,413
200 Bangor Hydro-Electric Company 4,912
300 Cascade Natural Gas Corporation 5,531
300 Central Vermont Public Service
Corporation 3,019
600 CH Energy Group, Inc. 23,625
900 Energen Corporation 25,762
100 Green Mountain Power Corporation 775
500 Laclede Gas Company 10,938
600 New Jersey Resources Corporation 23,962
700 Northwest Natural Gas Company 16,406
600 NorthWestern Corporation 13,275
400 NUI Corporation 12,475
1,200 Philadelphia Suburban Corporation 28,125
1,000 Piedmont Natural Gas Company, Inc. 30,500
1,100 RGS Energy Group, Inc. 32,450
1,400 Southern Union Company 26,338
900 Southwest Gas Corporation 18,788
700 Southwestern Energy Company* 5,600
500 UIL Holdings Corporation 23,406
---------------------------------------------------------------
Total Utilities 367,469
---------------------------------------------------------------
Total Common Stocks
(cost basis $11,144,494) 11,226,980
---------------------------------------------------------------
Principal
Amount Short-Term Investments (1.4%) Interest Rate/1/ Maturity Date Market Value
===================================================================================================================================
$160,000 Coca-Cola Company 6.250% 11/2/2000 $159,971
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $159,971) 159,971
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (101.1%)
(amortized cost basis $11,304,465) 11,386,951
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-1.1%) (119,795)
-----------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (100.0%) $11,267,156
-----------------------------------------------------------------------------------------------------------------------------------
*Non-income producing security.
/1/ The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
Investment Objective
The Fund seeks total
returns that track the performance of the S&P MidCap 400 Index, by investing
primarily in common stocks comprising the Index.
Shares Common Stocks (98.6%) Market Value
===================================================================
Basic Materials (3.4%)
990 Airgas, Inc.* $6,682
1,640 AK Steel Holding Corporation 15,170
590 Albemarle Corporation 13,681
350 A. Schulman, Inc. 3,828
840 Bowater, Inc. 45,465
970 Cabot Corporation 21,340
515 Cabot Microelectonics Corporation* 22,757
290 Carpenter Technology Corporation 8,990
1,670 Crompton Corporation 13,360
550 Cytec Industries, Inc.* 19,044
490 Ferro Corporation 10,045
120 H.B. Fuller Company 4,057
1,670 IMC Global, Inc. 21,606
740 Longview Fibre Company 10,083
760 Lubrizol Corporation 16,482
1,700 Lyondell Chemical Company 24,437
700 Martin Marietta Materials, Inc. 26,880
60 MAXXAM, Inc.* 1,140
270 Minerals Technologies, Inc. 8,454
580 Olin Corporation 10,295
560 P.H. Glatfelter Company 5,845
330 Rayonier, Inc. 11,612
1,490 RPM, Inc. 13,317
1,520 Solutia, Inc.* 19,380
1,440 Sonoco Products Company 27,810
600 Southdown, Inc. 42,525
1,180 Timber Company 33,409
580 UCAR International, Inc.* 4,785
340 Universal Corporation 9,520
740 Wausau-Mosinee Paper Corporation 6,475
-------------------------------------------------------------------
Total Basic Materials 478,474
-------------------------------------------------------------------
Capital Goods (7.3%)
810 AGCO Corporation 9,214
460 Albany International Corporation* 4,945
1,100 American Standard Companies, Inc.* 50,463
470 AMETEK, Inc. 10,222
460 Carlisle Companies, Inc. 19,147
830 Chubb Corporation 19,868
1,000 Diebold, Inc. 26,000
590 Donaldson Company, Inc. $13,349
680 Federal Signal Corporation 15,895
520 Flowserve Corporation* 10,465
330 Granite Construction, Inc. 7,528
540 Harsco Corporation 10,901
1,170 Herman Miller, Inc. 30,566
1,030 Hillenbrand Industries, Inc. 47,638
810 HON INDUSTRIES, Inc. 19,491
2,910 Jabil Circuit, Inc.* 166,052
420 Jacobs Engineering Group, Inc* 17,377
360 Kaydon Corporation 7,898
360 Kennametal, Inc. 10,575
300 MagneTek, Inc.* 3,263
460 Newport News Shipbuilding, Inc. 22,626
480 Nordson Corporation 13,770
710 Pentair, Inc. 21,167
820 Precision Castparts Corporation 30,955
1,150 Reynolds & Reynolds Company 20,556
310 Ryerson Tull, Inc. 2,325
2,230 SCI Systems, Inc.* 95,890
1,150 Sensormatic Electronics Corporation* 20,700
190 Sequa Corporation* 7,006
570 SPX Corporation* 70,466
340 Stewart & Stevenson Services, Inc. 8,160
2,160 Symbol Technologies, Inc. 98,145
360 Tecumseh Products Company 14,355
520 Teleflex, Inc. 17,972
530 Trinity Industries, Inc. 12,753
2,070 Vishay Intertechnology, Inc.* 62,100
540 Wallace Computer Services, Inc. 7,830
520 York International Corporation 14,138
-------------------------------------------------------------------
Total Capital Goods 1,041,771
-------------------------------------------------------------------
Communication Services (1.8%)
520 ANTEC Corporation* 6,338
3,210 Broadwing, Inc.* 90,682
1,020 Powerwave Technologies, Inc.* 49,087
800 Price Communications Corporation* 17,300
910 Telephone and Data Systems, Inc. 96,005
-------------------------------------------------------------------
Total Communication Services 259,412
-------------------------------------------------------------------
Consumer Cyclicals (13.2%)
1,470 Abercrombie & Fitch Company* $34,637
790 ACNielsen Corporation* 18,911
1,330 Acxiom Corporation* 53,532
1,710 A.H. Belo Corporation 32,811
700 American Eagle Outfitters, Inc.* 24,106
1,140 Apollo Group, Inc.* 44,602
1,017 ArvinMeritor, Inc. 17,035
280 Bandag, Inc. 9,992
960 Barnes & Noble, Inc.* 18,120
1,020 BJ's Wholesale Club, Inc.* 33,596
710 Blyth, Inc. 18,460
1,160 Borders Group, Inc.* 16,095
320 Borg Warner, Inc. 12,080
1,050 Callaway Golf Company 16,800
1,340 CDW Computer Centers, Inc.* 86,346
2,520 Cintas Corporation* 116,865
730 Claire's Stores, Inc. 14,691
2,070 Clayton Homes, Inc. 19,018
990 DeVry, Inc.* 36,568
1,570 Dollar Tree Stores, Inc.* 61,426
1,200 Dun & Bradstreet Corporation* 25,950
1,980 Electronic Arts, Inc.* 99,000
2,550 Family Dollar Stores, Inc. 49,566
620 Fastenal Company* 35,611
1,000 Federal-Mogul Corporation 3,250
720 Furniture Brands International, Inc.* 12,150
1,280 Galileo International, Inc. 25,280
500 GTECH Holdings Corporation* 8,656
980 Harte-Hanks, Inc. 21,683
370 Houghton Mifflin Company 13,621
1,110 International Game Technology* 40,654
750 International Speedway Corporation 24,094
1,700 Jones Apparel Group, Inc.* 47,281
530 Lancaster Colony Corporation 12,521
360 Lands' End, Inc.* 9,234
960 Lear Corporation* 26,160
570 Lee Enterprises, Inc. 15,746
900 Lennar Corporation 28,913
1,170 Mandalay Resort Group* 24,351
410 Media General, Inc. 15,580
350 Modine Manufacturing Company 9,231
760 Mohawk Industries, Inc.* 16,577
150 NCH Corporation 5,850
320 NCO Group, Inc.* 7,000
710 Nieman Marcus Group, Inc.* 26,359
1,660 OfficeMax, Inc.* 4,773
720 Ogden Corporation* 9,900
4,380 Park Place Entertainment Corporation* 55,845
390 Payless ShoeSource, Inc.* 22,596
740 Pittston Company $11,748
1,490 Readers Digest Association, Inc. 54,664
450 Rollins, Inc. 8,128
1,150 Ross Stores, Inc. 15,166
2,110 Saks, Inc.* 21,496
340 Scholastic Corporation* 27,200
1,890 Shaw Industries, Inc. 35,083
1,170 Six Flags, Inc.* 18,281
800 Sothebys Holdings, Inc.* 21,750
320 Superior Industries International, Inc. 10,900
500 Sylvan Learning Systems, Inc.* 7,719
840 Tech Data Corporation* 34,965
700 True North Communications, Inc. 26,381
780 Unifi, Inc.* 6,776
1,000 United Rentals, Inc.* 21,500
600 USG Corporation 10,237
560 Valspar Corporation 15,294
1,390 Viad Corporation 29,711
750 Warnaco Group, Inc. 1,969
180 Washington Post Company 96,142
470 Wellman, Inc. 7,050
720 WestPoint Stevens, Inc. 5,175
780 Williams-Sonoma, Inc.* 16,234
-------------------------------------------------------------------
Total Consumer Cyclicals 1,886,692
-------------------------------------------------------------------
Consumer Staples (6.9%)
310 Banta Corporation 7,149
1,940 Bergen Brunswig Corporation 17,581
510 Bob Evans Farms, Inc. 9,594
950 Brinker International, Inc.* 37,288
580 Carter-Wallace, Inc. 15,914
800 CBRL Group, Inc.* 14,300
600 Chris-Craft Industries, Inc.* 44,100
520 Church & Dwight Company, Inc. 10,270
500 Dean Foods Company 16,000
1,400 Dial Corporation 15,662
770 Dole Food Company, Inc. 9,288
340 Dreyer's Grand Ice Cream, Inc. 8,372
1,350 Energizer Holdings, Inc.* 26,663
1,450 Flowers Industries, Inc. 22,294
1,620 Hispanic Broadcasting Corporation* 50,625
2,100 Hormel Foods Corporation 35,306
1,500 IBP, Inc. 30,844
960 Interstate Bakeries Corporation 13,440
340 J.M. Smucker Company 7,565
500 Kelly Services, Inc. 11,094
500 Korn/Ferry Inernational* 17,500
350 Lance, Inc. 3,522
320 Lone Star Steakhouse & Saloon, Inc. 2,700
1,040 Manpower, Inc. 36,205
980 McCormick & Company, Inc. $31,054
1,420 Modis Professional Services, Inc.* 5,857
1,160 Outback Steakhouse, Inc.* 33,060
310 Papa John's International, Inc.* 7,789
1,020 Perrigo Company* 6,757
1,000 PSS World Medical, Inc.* 3,000
890 Quanta Services, Inc.* 27,646
1,480 R.J. Reynolds Tobacco Holdings, Inc. 52,910
2,610 Robert Half International, Inc.* 79,605
690 Ruddick Corporation 9,056
450 Suiza Foods Corporation* 20,841
3,310 Tyson Foods, Inc. 37,031
720 Universal Foods Corporation* 14,220
3,040 Univision Communications, Inc.* 116,280
760 Valassis Communications, Inc.* 21,090
1,650 Westwood One, Inc.* 31,247
1,960 Whitman Corporation* 25,480
-------------------------------------------------------------------
Total Consumer Staples 986,199
-------------------------------------------------------------------
Energy (5.6%)
1,300 BJ Services Company* 68,169
800 Cooper Cameron Corporation* 43,600
2,070 ENSCO International, Inc. 68,827
2,590 Global Marine, Inc.* 68,635
1,620 Grant Prideco, Inc.* 30,071
790 Hanover Compressor Company* 25,774
720 Helmerich & Payne, Inc. 22,635
680 Murphy Oil Corporation 39,397
870 Noble Affiliates, Inc. 31,918
2,030 Noble Drilling Corporation 84,372
2,420 Ocean Energy, Inc.* 33,578
1,160 Pennzoil-Quaker State Company 13,630
1,450 Pioneer Natural Resources Company* 18,941
830 Smith International, Inc.* 58,515
910 Tidewater, Inc. 42,031
1,240 Ultramar Diamond Shamrock
Corporation 32,550
870 Valero Energy Corporation 28,764
1,380 Varco International, Inc.* 23,805
1,720 Weatherford International, Inc.* 62,780
-------------------------------------------------------------------
Total Energy 797,992
-------------------------------------------------------------------
Financials (11.3%)
1,260 A.G. Edwards, Inc. 63,945
860 Allmerica Financial Corporation 54,234
1,090 Ambac Financial Group, Inc. 86,996
800 American Financial Group, Inc. 17,150
990 Associated Banc-Corp 23,822
740 Astoria Financial Corporation 27,750
2,150 Banknorth Group, Inc. 38,969
700 City National Corporation $24,062
1,720 Compass Bancshares, Inc. 31,283
1,550 Dime Bancorp, Inc. 37,878
4,370 E*TRADE Group, Inc.* 63,638
690 Everest Re Group, Ltd. 40,451
1,900 First Tennessee National Corporation 43,700
700 First Virginia Banks, Inc. 28,962
1,250 FirstMerit Corporation 28,516
600 Greater Bay Bancorp 19,538
1,470 GreenPoint Financial Corporation 43,733
2,360 Hibernia Corporation 28,173
550 Horace Mann Educators Corporation 9,247
450 HSB Group, Inc. 17,803
930 Legg Mason, Inc. 48,302
1,580 Marshall & Ilsley Corporation 71,594
980 Mercantile Bankshares Corporation 36,872
700 Mony Group, Inc.* 28,787
3,020 National Commerce Bancorporation 64,175
2,570 North Fork Bancorporation, Inc. 51,882
810 Ohio Casualty Corporation 6,809
1,710 Old Republic International Corporation 44,460
1,170 Pacific Century Financial Corporation 14,844
670 PMI Group, Inc. 49,496
950 Protective Life Corporation 21,969
710 Provident Financial Group, Inc. 21,478
900 Roslyn Bancorp, Inc. 19,519
800 SEI Investments Company* 72,600
800 Silicon Valley Bancshares* 37,000
3,320 Sovereign Bancorp, Inc. 27,597
1,290 TCF Financial Corporation 52,164
990 Unitrin, Inc. 30,752
1,200 Waddell & Reed Financial, Inc. 38,250
750 Webster Financial Corporation 18,281
510 Westamerica Bancorporation 18,328
570 Wilmington Trust Corporation 29,996
1,330 Zions Bancorporation 76,392
-------------------------------------------------------------------
Total Financials 1,611,397
-------------------------------------------------------------------
Health Care (15.0%)
330 Acuson Corporation* 7,528
800 AmeriSource Health Corporation* 34,750
740 Apria Healthcare Group, Inc.* 14,800
450 Beckman Coulter, Inc. 31,528
2,820 Chiron Corporation* 122,141
790 Covance, Inc.* 6,814
740 DENTSPLY International, Inc. 25,669
790 Edwards Lifesciences Corporation* 10,616
620 Express Scripts, Inc.* 41,656
710 First Health Group Corporation* 27,690
1,320 Forest Laboratories, Inc.* 174,900
1,740 Foundation Health Systems, Inc.* $35,126
1,320 Genzyme Corporation* 93,720
780 Gilead Sciences, Inc.* 67,080
3,520 Health Management Associates, Inc.* 69,740
1,170 ICN Pharmaceuticals, Inc. 44,533
680 IDEC Pharmaceuticals Corporation* 133,365
1,040 Incyte Genomics, Inc.* 38,090
2,420 IVAX Corporation* 105,270
850 Lincare Holdings, Inc.* 35,753
3,060 Millennium Pharmaceuticals, Inc.* 222,041
1,040 MiniMed, Inc.* 75,855
1,800 Mylan Laboratories, Inc. 50,400
1,380 Omnicare, Inc. 24,150
1,200 Oxford Health Plans, Inc.* 40,500
500 PacifiCare Health Systems, Inc.* 5,219
700 Protein Design Labs, Inc.* 94,555
780 Quest Diagnostics, Inc.* 75,075
1,000 Quorum Health Group, Inc.* 13,375
1,120 Sepracor, Inc.* 76,300
970 STERIS Corporation* 14,550
2,950 Stryker Corporation* 139,019
1,490 Sybron International Corporation* 36,878
620 Trigon Healthcare, Inc.* 44,446
900 Vertex Pharmaceuticals, Inc.* 83,798
820 VISX, Inc.* 17,579
-------------------------------------------------------------------
Total Health Care 2,134,509
-------------------------------------------------------------------
Technology (23.4%)
5,200 3Com Corporation* 92,300
630 ADTRAN, Inc.* 23,940
820 Affiliated Computer Services, Inc.* 45,664
1,420 Arrow Electronics, Inc.* 45,440
6,760 Atmel Corporation* 100,978
1,340 Avnet, Inc. 36,012
660 Avocent Corporation* 46,819
3,580 Cadence Design Systems, Inc.* 91,961
930 Cambridge Technology Partners, Inc.* 3,604
1,190 CheckFree Holdings Corporation* 59,203
1,060 Cirrus Logic, Inc.* 45,712
2,190 Comdisco, Inc. 26,964
730 CommScope, Inc.* 18,478
3,100 Concord EFS, Inc.* 128,069
700 Credence Systems Corporation* 13,125
840 CSG Systems International, Inc.* 39,007
1,810 Cypress Semiconductor Corporation* 67,762
400 DSP Group, Inc.* 11,350
1,960 DST Systems, Inc.* 120,785
1,940 Fiserv, Inc.* 101,729
1,240 Gartner Group, Inc., Class B* 10,850
990 Harris Corporation 31,371
500 Imation Corporation* $9,906
600 InFocus Corporation* 26,512
4,180 Informix Corporation* 17,765
1,590 Integrated Device Technology, Inc.* 89,537
1,000 International Rectifier Corporation* 44,625
3,110 Intuit, Inc.* 191,071
560 Jeffries Group, Inc.* 20,160
1,000 Keane, Inc.* 13,000
580 L-3 Communciations Holdings, Inc.* 38,244
1,800 Lam Research Corporation* 34,875
1,400 Lattice Semiconductor Corporation* 40,863
1,240 Legato Systems, Inc.* 11,044
690 Litton Industries, Inc.* 35,837
820 Macromedia, Inc.* 63,191
2,250 Marchfirst, Inc.* 13,078
700 MasTec, Inc.* 20,256
940 Mentor Graphics Corporation* 22,031
1,310 Micrel, Inc.* 59,277
1,690 Microchip Technology, Inc.* 53,446
500 Mynd Corporation* 6,375
1,980 Network Associates, Inc.* 38,115
990 NOVA Corporation* 15,531
1,030 Nvidia Corporation* 64,005
1,100 Polycom, Inc.* 71,500
1,420 QLogic Corporation* 137,385
2,160 Quantum Corporation* 32,400
2,900 Rational Software Corporation* 173,094
800 Retek, Inc.* 31,550
660 Sawtek, Inc.* 33,577
960 Semtech Corporation* 30,960
1,450 Storage Technology Corporation* 14,138
510 Structural Dynamics Research
Corporation* 5,259
2,020 SunGard Data Systems, Inc.* 103,272
1,260 Sybase, Inc.* 26,381
560 Sykes Enterprises, Inc.* 3,010
900 Symantec Corporation* 35,156
990 Synopsys, Inc.* 34,526
730 Titan Corporaiton* 9,764
480 Transaction Systems Architects, Inc.* 6,480
1,280 TranSwitch Corporation* 73,920
1,160 TriQuint Semiconductor, Inc.* 44,443
2,780 Vitesse Seiconductor Corporation* 194,426
1,980 Waters Corporation* 143,674
1,100 Wind River Systems, Inc.* 45,169
-------------------------------------------------------------------
Total Technology 3,339,951
-------------------------------------------------------------------
Transportation (1.4%)
720 Airborne Freight Corporation 7,290
320 Alaska Air Group, Inc.* 8,300
550 Alexander & Baldwin, Inc. $13,716
310 Arnold Industries, Inc. 5,444
600 Atlas Air, Inc.* 21,750
660 C.H. Robinson Worldwide, Inc. 36,094
710 CNF Transportation, Inc. 18,948
600 EGL, Inc.* 17,100
800 GATX Corporation 33,650
500 J.B. Hunt Transport Services, Inc.* 6,531
490 Overseas Shipholding Group, Inc. 11,760
930 Swift Transportation Company, Inc.* 13,253
720 Wisconsin Central Transportation
Corporation* 9,225
-------------------------------------------------------------------
Total Transportation 203,061
-------------------------------------------------------------------
Utilities (9.3%)
760 AGL Resources, Inc. 15,485
1,740 Allegheny Energy, Inc. 71,231
1,030 ALLETE 22,209
1,170 Alliant Energy Corporation 35,466
1,430 American Water Works Company, Inc. 34,856
280 Black Hills Corporation 8,750
2,080 Calpine Corporation* 164,190
390 Cleco Corporation 18,548
1,270 Conectiv, Inc. 22,781
1,920 DPL, Inc. 54,480
870 DQE, Inc. 30,396
1,950 Energy East Corporation 39,366
470 Hawaiian Electric Industries, Inc. 15,481
620 IDACORP, Inc. $30,574
1,230 IPALCO Enterprises, Inc. 27,598
830 Kansas City Power & Light Company 19,972
1,770 Kinder Morgan, Inc. 68,256
1,900 LG&E Energy Corporation 46,669
1,330 MCN Energy Group, Inc. 32,751
1,500 Montana Power Company 42,375
630 National Fuel Gas Company 33,784
1,730 NiSource, Inc. 43,142
2,160 Northeast Utilities 44,010
870 NSTAR, Inc. 33,658
1,160 OGE Energy Corporation 23,852
1,610 Potomac Electric Power Company 36,829
540 Public Service Company of New Mexico 14,884
1,220 Puget Sound Energy, Inc. 29,966
1,180 Questar Corporation 31,934
1,490 SCANA Corporation 39,485
1,170 Sierra Pacific Resources 20,109
1,860 TECO Energy, Inc. 51,847
1,390 UtiliCorp United, Inc. 36,922
820 Vectren Corporation 18,962
1,000 Western Resources Inc. 21,375
690 WGL Holdings, Inc. 17,595
1,820 Wisconsin Energy Corporation 34,239
-------------------------------------------------------------------
Total Utilities 1,334,027
-------------------------------------------------------------------
Total Common Stocks
(cost basis $13,731,261) 14,073,485
-------------------------------------------------------------------
Principal
Amount Short-Term Investments (2.0%) Interest Rate/1/ Maturity Date Market Value
===================================================================================================================================
$289,000 Gillette Company 6.530% 11/2/2000 $288,948
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $288,948) 288,948
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.6%)
(amortized cost basis $14,020,209) 14,362,433
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-0.6%) (94,675)
-----------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (100.0%) $14,267,758
-----------------------------------------------------------------------------------------------------------------------------------
* Non-income producing security.
/1/ The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
Investment Objective
The Fund seeks total
returns that track the performance of the S&P 500 Index, by investing
primarily in common stocks comprising the Index.
Shares Common Stocks (99.3%) Market Value
===================================================================
Basic Materials (2.2%)
300 Air Products and Chemicals, Inc. $11,194
400 Alcan Aluminum, Ltd. 12,625
1,100 Alcoa, Inc. 31,556
100 Allegheny Technologies, Inc. 2,025
825 Archer Daniels Midland Company 9,075
100 Ball Corporation 3,512
100 Bemis Company, Inc. 2,588
100 Bethlehem Steel Corporation* 288
100 Boise Cascade Corporation 2,869
100 Crown Cork & Seal Company, Inc. 912
900 Dow Chemical Company 27,562
100 Eastman Chemical Company 4,288
100 Ecolab, Inc. 3,919
1,400 E.I. du Pont de Nemours and Company 63,525
100 Engelhard Corporation 2,087
100 FMC Corporation* 7,600
200 Georgia-Pacific Group 5,375
100 Great Lakes Chemical Corporation 3,338
100 Hercules, Inc. 1,831
100 International Flavors & Fragrances, Inc. 1,675
600 International Paper Company 21,975
100 Louisiana-Pacific Corporation 850
100 Mead Corporation 2,894
100 Nucor Corporation 3,469
200 Owens-Illinois, Inc.* 1,188
200 Pactiv Corporation* 2,100
1,700 Pharmacia Corporation 93,500
100 Potlatch Corporation 3,350
200 PPG Industries, Inc. 8,925
200 Praxair, Inc. 7,450
200 Rohm and Haas Company 6,012
100 Sigma-Aldrich Corporation 3,575
100 Temple-Inland, Inc. 4,475
100 Union Carbide Corporation 4,300
100 USX-U.S. Steel Group 1,594
100 Vulcan Materials Company 4,200
100 Westvaco Corporation 2,850
300 Weyerhaeuser Company 14,081
100 Willamette Industries, Inc. 3,631
100 Worthington Industries, Inc. 956
100 W.R. Grace & Company* $381
-------------------------------------------------------------------
Total Basic Materials 389,600
-------------------------------------------------------------------
Capital Goods (10.0%)
200 Allied Waste Industries, Inc.* 1,850
200 American Power Conversion
Corporation* 2,587
100 Avery Dennison Corporation 5,050
500 Barrick Gold Corporation 6,688
100 BFGoodrich Company 4,094
1,300 Boeing Company 88,156
100 Briggs & Stratton Corporation 3,569
400 Caterpillar, Inc. 14,025
100 Cooper Industries, Inc. 3,825
1,300 Corning, Inc. 99,450
100 Crane Company 2,619
200 Danaher Corporation 12,625
300 Deere & Company 11,044
200 Dover Corporation 8,487
100 Eaton Corporation 6,806
600 Emerson Electric Company 44,062
100 Fluor Corporation 3,500
2,500 Ford Motor Company 65,313
200 Freeport-McMoRan Copper & Gold,
Inc., Class B* 1,587
300 General Dynamics Corporation 21,469
13,500 General Electric Company 739,969
800 General Motors Corporation 49,700
300 Homestake Mining Company* 1,238
1,000 Honeywell International, Inc. 53,813
400 Illinois Tool Works, Inc. 22,225
200 Inco, Ltd.* 3,087
200 Ingersoll-Rand Company 7,550
100 ITT Industries, Inc. 3,256
200 Johnson Controls, Inc. 11,925
500 Lockheed Martin Corporation 17,925
100 McDermott International, Inc. 969
100 Millipore Corporation 5,250
600 Minnesota Mining and Manufacturing
Company 57,975
200 Molex, Inc. 10,800
100 National Service Industries, Inc. $2,044
200 Newmont Mining Corporation 2,713
100 Northrop Grumman Corporation 8,400
100 Pall Corporation 2,156
100 Parker Hannifin Corporation 4,137
100 Phelps Dodge Corporation 4,675
300 Pitney Bowes, Inc. 8,906
400 Placer Dome, Inc. 3,250
200 Power-One, Inc.* 14,188
200 Rockwell International Corporation 7,862
300 Sanmina Corporation* 34,294
100 Sealed Air Corporation* 4,812
800 Solectron Corporation* 35,200
100 Textron, Inc. 5,044
200 Thermo Electron Corporation* 5,800
100 Thomas & Betts Corporation 1,513
100 Timken Company 1,406
2,293 Tyco International, Ltd. 129,984
700 United Technologies Corporation 48,869
800 Waste Management, Inc. 16,000
-------------------------------------------------------------------
Total Capital Goods 1,733,741
-------------------------------------------------------------------
Communication Services (6.3%)
400 ALLTEL Corporation 25,775
5,100 AT&T Corporation 118,256
325 Avaya, Inc.* 4,367
2,500 BellSouth Corporation 120,781
100 CenturyTel, Inc. 3,850
1,200 Global Crossing, Ltd.* 28,350
1,000 Nextel Communications, Inc.* 38,438
2,200 Qwest Communications International,
Inc.* 106,975
4,600 SBC Communications, Inc. 265,363
1,200 Sprint Corporation 30,600
1,200 Sprint Corporation (PCS Group)* 45,750
3,700 Verizon Communications 213,906
3,900 WorldCom, Inc.* 92,625
-------------------------------------------------------------------
Total Communication Services 1,095,036
-------------------------------------------------------------------
Consumer Cyclicals (6.7%)
100 Adolph Coors Company 6,369
100 American Greetings Corporation 1,819
1,200 Anheuser-Busch Companies, Inc. 54,900
100 Armstrong Holdings, Inc. 288
100 AutoZone, Inc.* 2,681
300 Bed Bath & Beyond, Inc.* 7,744
300 Best Buy Company, Inc.* 15,056
100 Black & Decker Corporation 3,762
100 Brown-Forman Corporation, Class B 6,088
100 Brunswick Corporation 1,944
900 Cendant Corporation* $10,800
100 Centex Corporation 3,700
200 Circuit City Stores, Inc.-Circuit City
Group 2,650
100 Consolidated Stores Corporation* 1,187
200 Convergys Corporation* 8,713
100 Cooper Tire & Rubber Company 1,094
600 Costco Wholesale Corporation* 21,975
100 Cummins Engine Company, Inc. 3,400
500 CVS Corporation 26,469
200 Dana Corporation 4,438
700 Delphi Automotive Systems Corporation 10,981
100 Dillard's, Inc. 1,050
400 Dollar General Corporation 6,200
200 Dow Jones & Company, Inc. 11,775
200 Federated Department Stores, Inc.* 6,513
200 Fortune Brands, Inc. 5,888
400 Gannett Company, Inc. 23,200
1,100 Gap, Inc. 28,394
200 Genuine Parts Company 4,262
200 Goodyear Tire & Rubber Company 3,700
100 H&R Block, Inc. 3,569
100 Harcourt General, Inc. 5,605
400 Harley-Davidson, Inc. 19,275
100 Harrah's Entertainment, Inc.* 2,862
200 Hasbro, Inc. 2,150
3,100 Home Depot, Inc. 133,300
400 IMS Health, Inc. 9,450
400 Interpublic Group of Companies, Inc. 17,175
300 J.C. Penney Company, Inc. 3,506
100 Kaufman and Broad Home Corporation 2,975
600 Kmart Corporation* 3,563
100 Knight Ridder 5,025
400 Kohl's Corporation* 21,675
200 Leggett & Platt, Inc. 3,275
500 Limited, Inc. 12,625
100 Liz Claiborne, Inc. 4,250
100 Longs Drug Stores Corporation 2,187
500 Lowe's Companies, Inc. 22,844
600 Masco Corporation 11,212
500 Mattel, Inc. 6,469
400 May Department Stores Company 10,500
100 Maytag Corporation 2,862
300 McGraw-Hill Companies, Inc. 19,256
100 Meredith Corporation 3,175
200 Moody's Corporation 5,262
100 Navistar International Corporation* 3,306
300 NIKE, Inc. 11,981
300 Newell Rubbermaid, Inc. 5,756
200 New York Times Company 7,350
100 Nordstrom, Inc. $1,644
400 Office Depot, Inc.* 3,325
300 Omnicom Group, Inc. 27,675
100 PACCAR, Inc. 4,206
100 Pulte Corporation 3,331
300 RadioShack Corporation 17,888
100 Reebok International, Ltd.* 2,156
100 Russell Corporation 1,600
400 Sears, Roebuck & Company 11,892
200 Sherwin-Williams Company 4,338
100 Snap-on, Inc. 2,556
100 Springs Industries, Inc. 2,356
100 Stanley Works 2,662
600 Staples, Inc. 8,550
1,200 Target Corporation 33,150
100 Tiffany & Company 4,269
400 TJX Companies, Inc. 10,900
200 Toys "R" Us, Inc.* 3,438
400 Tribune Company 14,825
100 TRW, Inc. 4,200
100 Tupperware Corporation 1,713
100 VF Corporation 2,731
100 Visteon Corporation 1,769
1,300 Walgreen Company 59,312
6,100 Wal-Mart Stores, Inc. 276,787
100 Whirlpool Corporation 4,350
-------------------------------------------------------------------
Total Consumer Cyclicals 1,161,103
-------------------------------------------------------------------
Consumer Staples (9.5%)
100 Alberto-Culver Company 3,356
500 Albertson's, Inc. 11,844
300 Avon Products, Inc. 14,550
500 Campbell Soup Company 14,625
400 Cardinal Health, Inc. 37,900
800 Carnival Corporation 19,850
800 Clear Channel Communications, Inc.* 48,050
300 Clorox Company 13,387
3,300 Coca-Cola Company 199,237
500 Coca-Cola Enterprises, Inc. 9,187
700 Colgate-Palmolive Company 41,132
1,200 Comcast Corporation* 48,900
700 ConAgra Foods, Inc. 14,963
100 Darden Restaurants, Inc. 2,250
100 Deluxe Corporation 2,256
200 Fort James Corporation 6,588
300 General Mills, Inc. 12,525
1,400 Gillette Company 48,825
200 Hershey Foods Corporation 10,862
500 Hilton Hotels Corporation 4,750
400 H.J. Heinz Company $16,775
500 Kellogg Company 12,688
800 Kimberly-Clark Corporation 52,800
1,100 Kroger Company* 24,819
300 Marriott International, Inc. 12,150
1,800 McDonald's Corporation* 55,800
300 McKesson HBOC, Inc. 8,419
400 Nabisco Group Holdings Corporation 11,550
1,900 PepsiCo, Inc. 92,031
3,000 Phillip Morris Companies, Inc. 109,875
1,800 Procter & Gamble Company 128,587
200 Quaker Oats Company 16,312
400 Ralston Purina Company 9,700
100 R.R. Donnelley & Sons Company 2,150
600 Safeway, Inc.* 32,812
1,100 Sara Lee Corporation 23,719
500 Seagram Company, Ltd. 28,562
200 Starbucks Corporation* 8,938
100 SUPERVALU, Inc. 1,538
400 SYSCO Corporation 20,875
1,900 Time Warner, Inc. 144,229
100 TRICON Global Restaurants, Inc.* 3,000
700 Unilever 35,569
200 UST, Inc. 5,050
2,000 Viacom, Inc., Class B* 113,750
2,800 Walt Disney Company* 100,275
100 Wendy's International, Inc. 2,175
100 Winn-Dixie Stores, Inc. 1,925
200 Wm. Wrigley Jr. Company 15,838
-------------------------------------------------------------------
Total Consumer Staples 1,656,948
-------------------------------------------------------------------
Energy (5.9%)
200 Amerada Hess Corporation 12,400
345 Anadarko Petroleum Corporation 22,097
200 Apache Corporation* 11,062
100 Ashland, Inc. 3,275
400 Baker Hughes, Inc. 13,750
200 Burlington Resources, Inc. 7,200
900 Chevron Corporation 73,913
800 Conoco, Inc., Class B 21,750
200 Devon Energy Corporation 10,080
4,800 Exxon Mobil Corporation 428,100
600 Halliburton Company 22,237
200 Kerr-McGee Corporation 13,062
200 Nabors Industries, Inc.* 10,180
500 Occidental Petroleum Corporation 9,938
400 Phillips Petroleum Company 24,700
100 Rowan Companies, Inc.* 2,519
3,000 Royal Dutch Petroleum Company 178,125
800 Schlumberger, Ltd. $60,900
100 Sunoco, Inc. 2,994
800 Texaco, Inc. 47,250
100 Tosco Corporation 2,863
300 Transocean Sedco Forex, Inc. 15,900
300 Unocal Corporation 10,237
400 USX-Marathon Group 10,875
-------------------------------------------------------------------
Total Energy 1,015,407
-------------------------------------------------------------------
Financials (15.9%)
400 AFLAC, Inc. 29,225
1,000 Allstate Corporation 40,250
1,900 American Express Company 114,000
400 American General Corporation 32,200
3,250 American International Group, Inc. 318,500
500 AmSouth Bancorporation 6,969
300 Aon Corporation 12,431
900 Associates First Capital Corporation 33,413
2,200 Bank of America Corporation 105,737
1,000 Bank of New York Company, Inc. 57,563
1,500 BANK ONE Corporation 54,750
500 BB&T Corporation 15,937
200 Bear Stearns Companies, Inc. 12,125
300 Capital One Financial Corporation 18,938
1,800 Charles Schwab Corporation 63,225
210 Charter One Financial, Inc. 4,817
1,700 Chase Manhattan Corporation 77,350
300 Chubb Corporation 25,331
300 CIGNA Corporation 36,585
200 Cincinnati Financial Corporation 7,350
300 CIT Group, Inc. 5,231
6,100 Citigroup, Inc. 321,012
200 Comerica, Inc. 12,062
400 Conseco, Inc. 2,775
100 Countrywide Credit Industries, Inc. 3,744
1,400 Fannie Mae 107,800
600 Fifth Third Bancorp 30,825
1,300 First Union Corporation 39,406
1,300 Firstar Coporation 25,594
1,200 FleetBoston Financial Corporation 45,600
300 Franklin Resources, Inc. 12,852
1,000 Freddie Mac 60,000
200 Golden West Financial Corporation 11,213
400 Hartford Financial Services Group, Inc. 29,775
600 Household International, Inc. 30,187
310 Huntington Bancshares, Inc. 4,456
200 Jefferson-Pilot Corporation 13,750
300 J.P. Morgan & Company, Inc. 49,650
500 KeyCorp 12,344
400 Lehman Brothers Holdings, Inc. $25,800
200 Lincoln National Corporation 9,675
200 Loews Corporation 18,188
400 Marsh & McLennan Companies, Inc. 52,300
200 MBIA, Inc. 14,537
1,100 MBNA Corporation 41,319
600 Mellon Financial Corporation 28,950
1,200 Merrill Lynch & Company, Inc. 84,000
200 MGIC Investment Corporation 13,625
1,600 Morgan Stanley Dean Witter &
Company 128,500
800 National City Corporation 17,100
400 Northern Trust Corporation 34,150
100 Old Kent Financial Corporation 2,769
200 Paine Webber Group, Inc. 14,250
400 PNC Financial Services Group, Inc. 26,750
200 Progressive Corporation 19,650
200 Providian Financial Corporation 20,800
300 Regions Financial Corporation 7,069
100 SAFECO Corporation 2,419
200 SouthTrust Corporation 6,475
300 State Street Corporation 37,422
300 Stilwell Financial, Inc. 13,444
300 St. Paul Companies, Inc. 15,375
200 Summit Bancorp 7,500
400 SunTrust Banks, Inc. 19,525
300 Synovus Financial Corporation 6,469
100 Torchmark Corporation 3,331
100 T. Rowe Price Associates, Inc. 4,681
100 Union Planters Corporation 3,381
300 UNUMProvident 8,475
200 USA Education, Inc. 11,175
1,000 U.S. Bancorp 24,188
200 Wachovia Corporation 10,800
700 Washington Mutual, Inc. 30,800
2,200 Wells Fargo & Company 101,887
-------------------------------------------------------------------
Total Financials 2,751,751
-------------------------------------------------------------------
Health Care (11.2%)
2,100 Abbott Laboratories 110,906
200 Aetna, Inc. 11,563
200 Allergan, Inc. 16,813
200 ALZA Corporation* 16,187
1,800 American Home Products Corporation 114,300
1,400 Amgen, Inc.* 81,113
100 Bausch & Lomb, Inc. 3,856
500 Baxter International, Inc.* 41,094
300 Becton, Dickinson and Company 10,050
300 Biogen, Inc.* 18,056
150 Biomet, Inc. $5,428
500 Boston Scientific Corporation* 7,969
2,700 Bristol-Myers Squibb Company 164,531
100 C.R. Bard, Inc. 4,188
1,600 Eli Lilly and Company 143,000
400 Guidant Corporation* 21,175
700 HCA - The Healthcare Company 27,956
500 HEALTHSOUTH Corporation* 6,000
200 Humana, Inc.* 2,425
2,000 Johnson & Johnson 184,250
200 King Pharmaceuticals, Inc.* 8,962
100 Manor Care, Inc.* 1,669
300 MedImmune, Inc.* 19,612
1,600 Medtronic, Inc. 86,900
3,200 Merck & Company, Inc. 287,800
8,600 Pfizer, Inc. 371,413
100 Quintiles Transnational Corporation* 1,394
2,000 Schering-Plough Corporation 103,375
100 St. Jude Medical, Inc.* 5,500
400 Tenet Healthcare Corporation* 15,725
300 UnitedHealth Group, Inc.* 32,812
200 Watson Pharmaceuticals, Inc.* 12,512
100 WellPoint Health Networks, Inc.* 11,694
-------------------------------------------------------------------
Total Health Care 1,950,228
-------------------------------------------------------------------
Technology (27.8%)
100 Adaptec, Inc.* 1,581
1,000 ADC Telecommunications, Inc.* 21,375
400 Adobe Systems, Inc. 30,425
400 Advanced Micro Devices, Inc.* 9,050
600 Agilent Technologies, Inc.* 27,788
500 Altera Corporation* 20,469
3,100 America Online, Inc.* 156,333
500 Analog Devices, Inc.* 32,500
100 Andrew Corporation* 2,631
400 Apple Computer, Inc.* 7,825
1,100 Applied Materials, Inc.* 58,437
100 Autodesk, Inc. 2,206
900 Automatic Data Processing, Inc. 58,781
300 BMC Software, Inc.* 6,094
400 Broadcom Corporation* 88,950
200 Cabletron Systems, Inc.* 5,425
100 Ceridian Corporation* 2,500
9,700 Cisco Systems, Inc.* 522,587
200 Citrix Systems, Inc.* 4,425
2,300 Compaq Computer Corporation 69,943
800 Computer Associates International, Inc. 25,500
300 Computer Sciences Corporation* 18,900
500 Compuware Corporation* 3,938
300 Comverse Technology, Inc.* $33,525
300 Conexant Systems, Inc.* 7,894
3,500 Dell Computer Corporation* 103,250
400 Eastman Kodak Company 17,950
600 Electronic Data Systems Corporation 28,163
3,000 EMC Corporation* 267,187
100 Equifax, Inc. 3,450
500 First Data Corporation 25,062
400 Gateway, Inc.* 20,644
2,800 Hewlett-Packard Company 130,025
9,200 Intel Corporation 414,000
2,500 International Business Machines
Corporation 246,250
1,300 JDS Uniphase Corporation* 105,869
200 KLA-Tencor Corporation* 6,763
100 Lexmark International, Inc.* 4,100
500 Linear Technology Corporation 32,281
400 LSI Logic Corporation* 13,150
4,500 Lucent Technologies, Inc. 104,906
400 Maxim Integrated Products, Inc.* 26,525
200 Mercury Interactive Corporation* 22,200
700 Micron Technology, Inc.* 24,325
7,300 Microsoft Corporation* 502,787
2,900 Motorola, Inc. 72,319
200 National Semiconductor Corporation* 5,200
100 NCR Corporation* 4,313
500 Network Appliance, Inc.* 59,500
4,100 Nortel Networks Corporation 186,550
400 Novell, Inc.* 3,600
100 Novellus Systems, Inc.* 4,094
7,700 Oracle Corporation* 254,100
800 Palm, Inc.* 42,850
300 Parametric Technology Corporation* 3,694
500 Paychex, Inc. 28,344
300 PE Corporation 35,100
300 PeopleSoft, Inc.* 13,092
100 PerkinElmer, Inc. 11,950
100 Polaroid Corporation 1,006
1,100 QUALCOMM, Inc.* 71,620
400 Raytheon Company 13,675
100 Sabre, Inc. 3,344
100 Sapient Corporation* 3,556
300 Scientific-Atlanta, Inc. 20,531
400 Seagate Technology, Inc.* 27,950
600 Siebel Systems, Inc.* 62,962
2,200 Sun Microsystems, Inc.* 243,925
100 Tektronix, Inc.* 7,125
500 Tellabs, Inc.* 24,969
200 Teradyne, Inc.* 6,250
2,300 Texas Instruments, Inc. $112,844
400 Unisys Corporation* 5,100
600 VERITAS Software Corporation* 84,609
100 W.W. Grainger, Inc. 3,194
900 Xerox Corporation 7,594
500 Xilinx, Inc.* 36,219
800 Yahoo!, Inc.* 46,900
-------------------------------------------------------------------
Total Technology 4,826,048
-------------------------------------------------------------------
Transportation (0.5%)
200 AMR Corporation* 6,550
500 Burlington Northern Santa Fe Corporation 13,281
200 CSX Corporation 5,063
100 Delta Air Lines, Inc. 4,725
300 FedEx Corporation* 14,058
500 Norfolk Southern Corporation 7,062
100 Ryder System, Inc. 1,975
600 Southwest Airlines Company 17,100
300 Union Pacific Corporation 14,063
100 US Airways Group, Inc.* 3,775
-------------------------------------------------------------------
Total Transportation 87,652
-------------------------------------------------------------------
Utilities (3.3%)
600 AES Corporation* 33,900
100 Ameren Corporation 3,975
400 American Electric Power Company, Inc. 16,600
200 Cinergy Corporation 6,125
100 CMS Energy Corporation 2,700
300 Coastal Corporation 22,631
200 Columbia Energy Group 14,387
200 Consolidated Edison, Inc. 7,037
200 Constellation Energy Group, Inc. 8,338
200 CP&L Energy, Inc. 8,062
400 Dominion Resources, Inc. 23,825
100 DTE Energy Company $3,612
600 Duke Energy Corporation 51,863
400 Dynegy, Inc. 18,525
100 Eastern Enterprises 6,438
400 Edison International 9,550
400 El Paso Energy Corporation 25,075
1,100 Enron Corporation 90,269
300 Entergy Corporation 11,494
475 Exelon Corporation 28,559
300 FirstEnergy Corporation 7,762
100 Florida Progress Corporation 5,319
300 FPL Group, Inc. 19,800
100 GPU, Inc. 3,306
100 KeySpan Corporation 3,519
200 Niagara Mohawk Holdings, Inc.* 3,200
100 Nicor, Inc. 3,531
100 ONEOK, Inc. 3,962
100 Peoples Energy Corporation 3,438
500 PG&E Corporation 13,469
200 Pinnacle West Capital Corporation 8,688
100 PPL Corporation 4,119
200 Public Service Enterprise Group, Inc. 8,300
400 Reliant Energy, Inc. 16,525
200 Sempra Energy 4,137
800 Southern Company 23,500
300 TXU Corporation 11,119
600 Williams Companies, Inc. 25,088
455 Xcel Energy, Inc. 11,631
-------------------------------------------------------------------
Total Utilities 573,378
-------------------------------------------------------------------
Total Common Stocks
(cost basis $17,594,850) 17,240,892
-------------------------------------------------------------------
Principal
Amount Short-Term Investments (1.1%) Interest Rate/1/ Maturity Date Market Value
===================================================================================================================================
$199,000 BellSouth Telecommunications, Inc. 6.500% 11/1/2000 $199,000
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $199,000) 199,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.4%)
(amortized cost basis $17,793,850) 17,439,892
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-0.4%) (71,635)
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets (100.0%) $17,368,257
-----------------------------------------------------------------------------------------------------------------------------------
*Non-income producing security.
/1/ The interest rate reflects the discount rate at the date of purchase.
See page 117 for a complete discussion of investment terms.
The accompanying notes
to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
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”.
=======================================================================================================================================
Principal
Amount Long-Term Fixed Income Investments (86.4%) Interest Rate Maturity Date Market Value
=======================================================================================================================================
Finance (3.8%)
750,000 Forest City Enterprises, Inc. 8.500% 3/15/2008 701,250
1,000,000 Golden State Holdings, Inc. 7.000 8/1/2003 957,632
300,000 Golden State Holdings, Inc. 6.750 8/1/2001 296,171
2,000,000 Imperial Credit Industries, Inc. 9.875 1/15/2007 862,500
500,000 MFN Financial Corporation 11.155 3/23/2001 485,000
1,650,000 RBF Finance Company 11.000 3/15/2006 1,876,875
=======================================================================================================================================
Total Finance 5,179,428
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Consumer Goods (1.8%)
300,000 Flag, Ltd. 8.250 1/30/2008 250,500
1,650,000 Fresh Foods, Inc. 10.750 6/1/2006 540,375
71,840 SFC New Holdings, Inc. Subordinated Notes/7/ 0.000 12/15/2009 7
1,900,000 Smithfield Foods, Inc. 7.625 2/15/2008 1,710,000
=======================================================================================================================================
Total Industrial-Consumer Goods 2,500,882
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Energy (8.4%)
1,500,000 Coastal Corporation 7.359 7/21/2003 1,501,251
1,450,000 Ferrellgas Partners, L.P. 9.375 6/15/2006 1,421,000
750,000 Giant Industries, Inc. 9.750 11/15/2003 738,750
100,000 Gulf Canada Resources, Ltd. 9.625 7/1/2005 103,000
1,000,000 Gulf Canada Resources, Ltd. 9.250 1/15/2004 1,010,000
350,000 HS Resources, Inc. 9.875 12/1/2003 350,000
1,000,000 HS Resources, Inc. 9.250 11/15/2006 997,500
500,000 HS Resources, Inc. Series B 9.250 11/15/2006 498,750
1,500,000 Pioneer Natural Resources Company 9.625 4/1/2010 1,576,188
500,000 Pride Petroleum Services, Inc. 9.375 5/1/2007 506,250
1,500,000 R&B Falcon Corporation 9.500 12/15/2008 1,601,250
7,473 TransTexas Gas Corporation 15.000 3/15/2005 5,764
1,000,000 Vintage Petroleum, Inc. 9.000 12/15/2005 1,007,500
500,000 XCL, Ltd. /2//5/ 13.500 5/1/2004 90,000
=======================================================================================================================================
Total Industrial-Energy 11,407,203
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Manufacturing (14.3%)
1,250,000 Abitibi-Consolidated, Inc. 8.300 8/1/2005 1,258,603
600,000 Advanced Lighting Technologies, Inc. 8.000 3/15/2008 411,000
2,900,000 Allied Waste North America, Inc. 7.625 1/1/2006 2,581,000
1,650,000 BREED Technologies, Inc. /2//5/ 9.250 4/15/2008 165
1,650,000 Building Materials Corporation of America 7.750 7/15/2005 495,000
1,025,000 Consolidated Container Company LLC 10.125 7/15/2009 922,500
1,450,000 Crown Cork & Seal Company, Inc. 7.125 9/1/2002 1,131,406
$650,000 Fisher Scientific International, Inc. 9.000% 2/1/2008 $593,125
400,000 Huntsman Corporation /2/ 9.500 7/1/2007 232,000
750,000 Huntsman ICI Chemicals LLC 10.125 7/1/2009 712,500
700,000 Huntsman Polymers Corporation 11.750 12/1/2004 675,500
250,000 ISP Holdings, Inc. 9.000 10/15/2003 212,500
2,500,000 Lear Corporation 8.110 5/15/2009 2,327,657
100,000 Levi Strauss & Company 6.800 11/1/2003 81,750
1,650,000 Lyondell Chemical Company 9.625 5/1/2007 1,600,500
800,000 Nortek, Inc. 9.125 9/1/2007 716,000
500,000 Polymer Group, Inc. 9.000 7/1/2007 355,000
1,250,000 RBX Corporation 12.000 1/15/2003 625,000
1,000,000 Silgan Holdings, Inc. 9.000 6/1/2009 855,000
700,000 Sterling Chemicals, Inc. 12.375 7/15/2006 672,000
1,650,000 Stone Container Corporation 10.750 10/1/2002 1,674,750
1,250,000 Talon Automotive Group LLC 9.625 5/1/2008 287,500
300,000 Waste Management, Inc. 7.000 5/15/2005 283,838
800,000 WMX Technologies, Inc. 7.100 8/1/2026 771,737
=======================================================================================================================================
Total Industrial-Manufacturing 19,476,031
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Services (31.4%)
800,000 Abbey Healthcare Group, Inc. 9.500 11/1/2002 794,000
1,500,000 Beckman Coulter, Inc. 7.100 3/4/2003 1,459,910
750,000 Beverly Enterprises, Inc. 9.000 2/15/2006 678,750
500,000 British Sky Broadcasting Group plc 8.200 7/15/2009 463,062
1,500,000 British Sky Broadcasting Group plc 7.300 10/15/2006 1,357,966
500,000 Cadmus Communications Corporation 9.750 6/1/2009 491,250
2,500,000 Century Communications Corporation 8.750 10/1/2007 2,131,250
2,500,000 Charter Communications Holdings LLC 8.625 4/1/2009 2,250,000
2,500,000 Comcast Cable Communications, Inc. 6.200 11/15/2008 2,307,030
1,950,000 EchoStar DBS Corporation 9.250 2/1/2006 1,925,625
800,000 Fox/Liberty Networks LLC 8.875 8/15/2007 804,000
1,800 Fresenius Medical Care Capital Trust II 7.875 2/1/2008 1,674,000
800,000 Garden State Newspapers, Inc. 8.625 7/1/2011 736,000
1,650,000 Harrah's Operating Company, Inc. 7.500 1/15/2009 1,543,164
2,150,000 HCA - The Healthcare Company 6.910 6/15/2005 2,025,997
300,000 HCA - The Healthcare Company 6.730 7/15/2045 287,684
2,500,000 HMH Properties, Inc. 7.875 8/1/2005 2,375,000
500,000 Horseshoe Gaming Holding Corporation 8.625 5/15/2009 482,500
1,000,000 Horseshoe Gaming LLC 9.375 6/15/2007 1,001,250
1,650,000 International Game Technology 7.875 5/15/2004 1,608,750
1,250,000 Isle of Capri Casinos, Inc. 8.750 4/15/2009 1,134,375
532,000 ITT Corporation 6.250 11/15/2000 531,703
900,000 John Q. Hammons Hotels, Inc. 8.875 2/15/2004 832,500
450,000 LIN Television Corporation 8.375 3/1/2008 423,000
750,000 Mail-Well I Corporation 8.750 12/15/2008 555,000
1,400,000 Mirage Resorts, Inc. 7.250 10/15/2006 1,320,652
1,000,000 Park Place Entertainment Corporation 8.875 9/15/2008 980,000
900,000 Price Communications Wireless, Inc. 9.125 12/15/2006 900,000
$500,000 PRIMEDIA, Inc. 7.625% 4/1/2008 $450,000
400,000 Renaissance Media Group LLC 10.000 4/15/2008 280,000
2,100,000 Riviera Holdings Corporation 10.000 8/15/2004 1,863,750
600,000 Telewest Communications plc 11.000 10/1/2007 522,000
2,500,000 Tenet Healthcare Corporation 8.000 1/15/2005 2,459,375
2,000,000 Triad Hospitals Holdings, Inc. 11.000 5/15/2009 2,080,000
2,500,000 United Pan-Europe Communications NV 10.875 11/1/2007 1,975,000
=======================================================================================================================================
Total Industrial-Services 42,704,543
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Transportation (0.3%)
400,000 Dunlop Standard Aerospace Holdings plc 11.875 5/15/2009 398,000
=======================================================================================================================================
Total Industrial-Transportation 398,000
---------------------------------------------------------------------------------------------------------------------------------------
Sovereign/Provincial (2.6%)
1,500,000 Mexico Government International Bond 8.500 2/1/2006 1,471,500
2,000,000 Sovereign Bancorp, Inc. 10.500 11/15/2006 2,030,000
=======================================================================================================================================
Total Sovereign/Provincial 3,501,500
---------------------------------------------------------------------------------------------------------------------------------------
Utilities (23.8%)
1,000,000 Azurix Corporation/2/ 10.375 2/15/2007 920,000
1,250,000 Call-Net Enterprises, Inc. 8.000 8/15/2008 500,000
3,500,000 Calpine Corporation 7.625 4/15/2006 3,375,684
2,500,000 CMS Energy Corporation 7.500 1/15/2009 2,179,047
1,250,000 Crown Castle International Corporation 10.750 8/1/2011 1,281,250
800,000 FairPoint Communications, Inc. 12.500 5/1/2010 720,000
1,500,000 FLAG Telecom Holdings, Ltd. 11.625 3/30/2010 1,260,000
3,250,000 Global Crossing, Ltd./2/ 9.125 11/15/2006 3,099,687
1,350,000 ICG Holdings, Inc. /7/ 0.000 5/1/2006 222,750
1,000,000 KPNQwest NV 8.125 6/1/2009 890,000
2,500,000 Level 3 Communications, Inc. 9.125 5/1/2008 2,018,750
300,000 Leviathan Finance Corporation 10.375 6/1/2009 315,000
2,500,000 McLeodUSA, Inc. 0.000 3/1/2007 2,087,500
1,650,000 Metromedia Fiber Network, Inc. 10.000 11/15/2008 1,460,250
2,500,000 Nextel Communications, Inc. 9.375 11/15/2009 2,412,500
500,000 Nextel Partners, Inc./2/ 11.000 3/15/2010 497,500
1,650,000 NEXTLINK Communications, Inc. 10.750 6/1/2009 1,447,875
705,000 NTL, Inc. 9.750 4/1/2008 394,800
3,100,000 Rogers Cantel, Inc. 9.375 6/1/2008 3,162,000
750,000 TeleCorp PCS, Inc. 10.625 7/15/2010 748,125
2,500,000 Williams Communications Group, Inc. 10.875 10/1/2009 2,106,250
1,650,000 Worldwide Fiber, Inc. 12.000 8/1/2009 1,303,500
=======================================================================================================================================
Total Utilities 32,402,468
=======================================================================================================================================
Total Long-Term Fixed Income Investments
(amortized cost basis $128,973,673) $117,570,055
===================================================================================================================================
Shares Common Stocks (0.2%) Market Value
89,428 Abraxas Petroleum Corporation $268,283
89,428 Abraxas Petroleum Corporation (Warrants)* 13,414
750 Arcadia Financial, Ltd. (Warrants)* 750
925 TransTexas Gas Corporation 14,337
500 Unifi Communications, Inc. (Warrants)* 5
===================================================================================================================================
Total Common Stocks (Warrants)
(cost basis $171,167) $296,789
===================================================================================================================================
Shares Preferred Stocks (0.0%) Market Value
8,854 TransTexas Gas Corporation $443
===================================================================================================================================
Total Preferred Stocks
(cost basis $4,629) $443
-----------------------------------------------------------------------------------------------------------------------------------
Principal
Amount Short-Term Investments (9.8%) Interest Rate/1/ Maturity Date Market Value
===================================================================================================================================
$100,000 Campbell Soup Company 6.530% 12/6/2000 99,365
600,000 CDC Communications, Inc. 6.520 11/1/2000 600,000
100,000 ConAgra, Inc. 6.670 11/16/2000 99,722
400,000 Cox Communications, Inc. 6.700 12/13/2000 396,873
500,000 Edison Midwest Corporation 6.720 11/1/2000 500,000
300,000 General Electric Capital Corporation 6.470-6.490 12/7/2000-12/20/2000 297,590
500,000 Ingersoll-Rand Company 6.710 11/15/2000 498,695
300,000 Infinity Broadcasting, Inc. 6.710 12/1/2000 298,323
500,000 International Paper Company 6.710 12/8/2000 496,552
300,000 KFW International Finance 6.480 12/6/2000 298,110
4,300,000 Motorola, Inc. 6.460 12/27/2000 4,256,723
1,100,000 TRW, Inc. 6.710 12/1/2000 1,093,849
4,400,000 Verizon Global Funding Discount Notes 6.460-6.500 12/5/2000-12/19/2000 4,370,589
===================================================================================================================================
Total Short-Term Investments
(amortized cost basis $13,306,391) 13,306,391
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (96.4%)
(amortized cost basis $142,455,860) 131,173,678
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (3.6%) 4,935,598
-----------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (100.0%) $136,109,276
-----------------------------------------------------------------------------------------------------------------------------------
* Non income-producing security
/1/ The interest rate reflects the discount rate at the date of purchase
/2/ 144A Security
/5/ Security in default
/7/ Step Coupon Bonds
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
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.
Principal Interest Maturity Market
Amount Municipal Bond Investments (98.3%) Rate Date Value
=======================================================================================================================================
Alabama (0.4%)
$1,000,000 Alabama 21st Century Authority Tobacco Settlement Revenue
Bonds 5.750% 12/1/2020 $956,250
1,000,000 Birmingham, Alabama Multifamily Housing Revenue Bonds
(Beaconview Apartments Project) (Series A) (MBIA Insured) 5.600 7/1/2020 986,250
---------------------------------------------------------------------------------------------------------------------------------------
Total Alabama 1,942,500
---------------------------------------------------------------------------------------------------------------------------------------
Alaska (1.5%)
2,105,000 Alaska Industrial Development & Export Authority Power
Revenue Bonds (Snettisham Hydroelectric Project) (1st Series)
(AMBAC Insured) (Subject to 'AMT') 6.000 1/1/2015 2,202,356
1,985,000 Alaska Industrial Development & Export Authority Power
Revenue Bonds (Snettisham Hydroelectric Project) (1st Series)
(AMBAC Insured) (Subject to 'AMT') 6.000 1/1/2014 2,084,250
3,000,000 Northern Tobacco Securitization Corporation Alaska Tobacco
Settlement Revenue Bonds 6.200 6/1/2022 2,996,250
---------------------------------------------------------------------------------------------------------------------------------------
Total Alaska 7,282,856
---------------------------------------------------------------------------------------------------------------------------------------
Arizona (1.3%)
4,080,000 Maricopa County, Arizona Industrial Development Authority
Single Family Mortgage Revenue Bonds (Series 1C)
(GNMA/FNMA/FHLMC Insured) (Subject to 'AMT') 6.000 12/1/2024 4,564,500
1,000,000 Maricopa County, Arizona Elementary School District #068
Alhambra General Obligation Bonds (AMBAC Insured) 5.125 7/1/2012 1,006,250
500,000 Phoenix, Arizona Industrial Development Authority Single
Family Mortgage Revenue Bonds (Series 1A) (GNMA/FNMA/
FHLMC Insured) 5.875 6/1/2016 515,625
---------------------------------------------------------------------------------------------------------------------------------------
Total Arizona 6,086,375
---------------------------------------------------------------------------------------------------------------------------------------
Arkansas (0.9%)
980,000 Arkansas State Development Finance Authority Single Family
Mortgage Revenue Bonds (Series F) (GNMA Insured) (Subject
to 'AMT') 7.450 1/1/2027 999,355
2,000,000 Blytheville, Arkansas Solid Waste Recycling and Sewer
Treatment Revenue Bonds (Nucor Corporation Project) (Subject
to 'AMT') 6.900 12/1/2021 2,070,000
335,000 Paragould, Arkansas Water Sewer & Electric Revenue Bonds
(AMBAC Insured) 5.650 12/1/2025 334,581
800,000 Paragould, Arkansas Water Sewer & Electric Revenue Bonds
(AMBAC Insured) 5.600 12/1/2020 799,000
---------------------------------------------------------------------------------------------------------------------------------------
Total Arkansas 4,202,936
---------------------------------------------------------------------------------------------------------------------------------------
California (9.0%)
$1,250,000 California Rural Home Mortgage Finance Authority Single Family
Mortgage Revenue Bonds (Series D) (GNMA/FNMA Insured)
(Subject to 'AMT') 6.000% 6/1/2031 $1,362,500
1,100,000 California State Veterans General Obligation Bonds (Subject to
'AMT') 6.250 2/1/2014 1,103,410
3,855,000 Contra Costa County, California Home Mortgage Revenue
Bonds (GNMA Insured) (Escrowed to Maturity) 7.500 5/1/2014 4,775,381
7,145,000 Foothill/Eastern Transportation Corridor Agency California Toll
Road Revenue Bonds (Series A) 0.000 1/1/2014 6,573,400
6,000,000 Foothill/Eastern Transportation Corridor Agency California Toll
Road Revenue Bonds (Series A) 0.000 1/1/2013 5,520,000
5,000,000 Foothill/Eastern Transportation Corridor Agency California Toll
Road Revenue Bonds (Series A) 0.000 1/1/2011 4,587,500
5,000,000 Foothill/Eastern Transportation Corridor Agency California Toll
Road Revenue Bonds (Series A) (Escrowed to Maturity) 0.000 1/1/2009 4,450,000
1,335,000 Foothill/Eastern Transportation Corridor Agency California Toll
Road Revenue Bonds (Series A) (Escrowed to Maturity) 0.000 1/1/2005 1,103,044
870,000 Golden West Schools Financing Authority California Revenue
Bonds (Series A) (MBIA Insured) 5.800 2/1/2024 926,550
1,000,000 Los Angeles, California Department of Water and Power Electric
Plant Revenue Bonds 6.100 2/15/2017 1,052,500
4,200,000 Pomona, California Single Family Mortgage Revenue Bonds
(Series A) (GNMA/FNMA Insured) (Escrowed to Maturity) 7.600 5/1/2023 5,334,000
3,480,000 Sacramento County, California Single Family Mortgage Revenue
Bonds (Subject to 'AMT') (Escrowed to Maturity) 8.250 1/1/2021 4,624,050
1,950,000 San Bernardino County, California Single Family Mortgage Revenue
Bonds (Series A-1) (GNMA/FNMA Insured) (Subject to 'AMT') 6.250 12/1/2031 2,006,062
---------------------------------------------------------------------------------------------------------------------------------------
Total California 43,418,397
---------------------------------------------------------------------------------------------------------------------------------------
Colorado (2.6%)
770,000 Colorado Educational and Cultural Facilities Authority Revenue
Bonds (Academy Charter School Project) 7.125 12/15/2030 747,863
2,250,000 Colorado Educational and Cultural Facilities Authority Revenue
Bonds (Bromley East Project) (Series A) 7.250 9/15/2030 2,219,062
1,235,000 Colorado Health Facilities Authority Revenue Bonds (Boulder
Hospital) (Series B) (MBIA Insured) 6.000 10/1/2012 1,256,613
1,765,000 Colorado Housing and Finance Authority Revenue Bonds (Single
Family Program) (Series A-2) (Subject to 'AMT') 7.450 10/1/2016 1,950,325
1,100,000 Colorado Housing and Finance Authority Revenue Bonds (Single
Family Program) (Series A-3) 7.250 4/1/2010 1,216,875
1,000,000 Colorado Housing and Finance Authority Revenue Bonds (Single
Family Program) (Series C-3) (FHA/VA Insured) 7.150 10/1/2030 1,111,250
1,000,000 Colorado Housing and Finance Authority Revenue Bonds
(Series E-3) 6.600 8/1/2017 1,085,000
1,220,000 Denver, Colorado City and County Certificates of Participation
(Series A) (MBIA Insured) 5.500 5/1/2017 1,230,675
1,000,000 Denver, Colorado Health and Hospital Authority Healthcare
Revenue Bonds (Series A) 5.150 12/1/2011 901,250
$1,000,000 Routt County, Colorado School District #RE02 Steamboat
Springs General Obligation Bonds (MBIA Insured) 5.000% 12/1/2017 $955,000
---------------------------------------------------------------------------------------------------------------------------------------
Total Colorado 12,673,913
---------------------------------------------------------------------------------------------------------------------------------------
Florida (5.6%)
3,490,000 Clay County, Florida Housing Finance Authority Single Family
Mortgage Revenue Bonds (GNMA/FNMA Insured) (Subject
to 'AMT') 6.000 4/1/2029 3,585,975
3,225,000 Escambia County, Florida Health Facilities Authority Revenue
Bonds (Azalea Trace, Inc.) 6.000 1/1/2015 2,999,250
620,000 Florida State Board of Education Capital Outlay General
Obligation Bonds (MBIA Insured) 9.125 6/1/2014 861,025
1,050,000 Florida State Board of Education Capital Outlay General
Obligation Bonds (Series A) 5.000 1/1/2018 996,188
765,000 Hillsborough County, Florida Industrial Development Authority
Revenue Bonds (Health Facilities Project- University Community
Hospital) (Series A) 4.500 8/15/2003 736,312
1,145,000 Leon County, Florida Educational Facilities Authority Certificates
of Participation (Escrowed to Maturity) 8.500 9/1/2017 1,538,594
2,220,000 Manatee County, Florida Housing Finance Authority Single
Family MortgageRevenue Bonds (Series 1) (GNMA/FNMA/
FHLMC Insured) (Subject to 'AMT') 7.200 5/1/2028 2,430,900
1,775,000 Orange County, Florida Housing Finance Authority Homeowner
Revenue Bonds (Series B-1) (GNMA/FNMA Insured) (Subject to
'AMT') 5.900 9/1/2028 1,808,281
1,000,000 Orange County, Florida Health Facilities Authority Revenue
Bonds (Adventist Health Systems) 5.850 11/15/2010 991,250
1,320,000 Orange County, Florida Health Facilities Authority Revenue
Bonds (Adventist Health Systems) 5.750 11/15/2008 1,310,100
2,000,000 Orange County, Florida Health Facilities Authority Revenue
Bonds (Orlando Regional Healthcare Project) (Series A) (MBIA
Insured) 6.250 10/1/2018 2,202,500
1,800,000 Palm Beach County, Florida Housing Finance Authority Single
Family Homeowner Revenue Bonds (Series A-1) (GNMA/FNMA
Insured) (Subject to 'AMT') 5.900 10/1/2027 1,833,750
3,000,000 Pinellas County, Florida Housing Finance Authority Single Family
Housing Revenue Bonds (Multi-County Program) (Series A-1)
(GNMA/FNMA Insured) (Subject to 'AMT') 7.200 9/1/2029 3,318,750
2,000,000 Pinnellas County, Florida Housing Finance Authority Single Family
Housing Revenue Bonds (Multi-County Program) (Series B-1)
(Subject to 'AMT') 7.250 9/1/2029 2,207,500
---------------------------------------------------------------------------------------------------------------------------------------
Total Florida 26,820,375
---------------------------------------------------------------------------------------------------------------------------------------
Georgia (0.3%)
1,500,000 Savannah, Georgia Economic Development Authority Student
Housing Revenue Bonds (State University Project) (Series A)
(ACA Insured) 6.750 11/15/2020 1,576,875
---------------------------------------------------------------------------------------------------------------------------------------
Total Georgia 1,576,875
---------------------------------------------------------------------------------------------------------------------------------------
Illinois (12.4%)
$1,000,000 Broadview, Illinois Tax Increment Revenue Bonds 5.375% 7/1/2015 $960,000
2,000,000 Broadview, Illinois Tax Increment Revenue Bonds 5.250 7/1/2012 1,942,500
1,830,000 Chicago, Illinois Single Family Mortgage Revenue Bonds
(Series A) (GNMA/FNMA/FHLMC Insured) (Subject to 'AMT') 7.250 9/1/2028 1,978,687
2,200,000 Chicago, Illinois Single Family Mortgage Revenue Bonds
(Series C) (GNMA/FNMA/FHLMC Insured) (Subject to 'AMT') 7.000 3/1/2032 2,409,000
6,500,000 Chicago, Illinois Single Family Mortgage Revenue Bonds
(Series C) (GNMA/FNMA/FHLMC Insured) (Subject to 'AMT') 7.050 10/1/2030 6,979,375
2,250,000 Cook County, Illinois General Obligation Bonds (Series B)
(FGIC Insured) 5.500 11/15/2022 2,216,250
1,815,000 Cook County, Illinois School District #99 Cicero General
Obligation Bonds (FGIC Insured) 8.500 12/1/2016 2,429,831
1,565,000 Cook County, Illinois School District #99 Cicero General
Obligation Bonds (FGIC Insured) 8.500 12/1/2014 2,071,669
1,250,000 Cook County, Illinois School District #99 Cicero General
Obligation Bonds (FGIC Insured) 8.500 12/1/2011 1,612,500
765,000 Cook County, Illinois School District #100 Berwyn South
General Obligation Bonds (FSA Insured) 8.200 12/1/2009 948,600
4,000,000 Illinois Development Finance Authority Hospital Revenue
Bonds (Adventist Health System/Sunbelt Obligation) 5.500 11/15/2029 3,280,000
1,290,000 Illinois Development Finance Authority Revenue Bonds
(Community Rehabilitation Providers) (Series A) 5.700 7/1/2007 1,251,300
4,900,000 Illinois Educational Facilities Authority Revenue Bonds
(Northwestern University) 5.250 11/1/2032 4,924,500
2,500,000 Illinois Educational Facilities Authority Revenue Bonds
(Northwestern University) 5.250 11/1/2032 2,537,500
1,600,000 Illinois Health Facilities Authority Revenue Bonds (Bethesda
Home and Retirement) (Series A) 6.250 9/1/2014 1,548,000
4,180,000 Illinois Health Facilities Authority Revenue Bonds (Rush-
Presbyterian-St. Lukes) (Series A) (MBIA Insured) 5.250 11/15/2014 4,117,300
1,000,000 Illinois Health Facilities Authority Revenue Bonds (Riverside
Health System) 6.850 11/15/2029 1,027,500
2,500,000 Illinois Health Facilities Authority Revenue Bonds (Advocate
Health Care) (Series B) (MBIA/IBC Insured) 5.250 8/15/2018 2,356,250
2,000,000 Illinois Health Facilities Authority Revenue Bonds (Swedish
American Hospital) 6.875 11/15/2030 2,037,500
2,125,000 Illinois Health Facilities Authoriy Revenue Bonds (Thorek
Hospital and Medical Center) 5.250 8/15/2018 1,707,969
3,065,000 Illinois State Sales Tax Revenue Bonds (Series L) 0.000 6/15/2012 3,271,887
3,035,000 McHenry County, Illinois Community High School District
#157 General Obligation Bonds (FSA Insured) 9.000 12/1/2017 4,226,238
3,000,000 Regional Transportation Authority Illinois Revenue Bonds
(Series A) (FGIC Insured) 6.700 11/1/2021 3,431,250
500,000 Southwestern Illinois Development Authority Revenue Bonds
(Anderson Hospital) 5.625 8/15/2029 403,125
---------------------------------------------------------------------------------------------------------------------------------------
Total Illinois 59,668,731
---------------------------------------------------------------------------------------------------------------------------------------
Indiana (2.1%)
$2,225,000 Allen County, Indiana Industrial Certificates of Participation
(MBIA/IBC Insured) 6.500% 11/1/2017 $2,286,188
4,550,000 Indiana Transportation Finance Authority Highway Revenue
Bonds (MBIA/IBC Insured) 7.250 6/1/2015 5,425,875
2,500,000 Petersburg, Indiana Industrial Pollution Control Revenue Bonds
(Indianapolis Power and Light Company) (Series A) (MBIA/IBC
Insured) 6.100 1/1/2016 2,581,250
---------------------------------------------------------------------------------------------------------------------------------------
Total Indiana 10,293,313
---------------------------------------------------------------------------------------------------------------------------------------
Iowa (0.2%)
1,100,000 Iowa Finance Authority Economic Development Revenue
Bonds (Foundation for Affordable Housing Project) (Series A) 5.650 4/1/2033 1,134,375
---------------------------------------------------------------------------------------------------------------------------------------
Total Iowa 1,134,375
---------------------------------------------------------------------------------------------------------------------------------------
Kansas (0.9%)
4,140,000 Kansas City, Kansas Utility System Revenue Bonds (FGIC Insured) 6.375 9/1/2023 4,326,300
---------------------------------------------------------------------------------------------------------------------------------------
Total Kansas 4,326,300
---------------------------------------------------------------------------------------------------------------------------------------
Kentucky (1.2%)
1,750,000 Jefferson County, Kentucky Capital Projects Corporation
Revenue Bonds (MBIA Insured) 5.375 6/1/2018 1,745,625
1,000,000 Jefferson County, Kentucky School District Finance Corporation
School Building Revenue Bonds (Series A) (FSA Insured) 5.250 1/1/2019 977,500
3,000,000 Trimble County, Kentucky Pollution Control Revenue Bonds
(Series B) (AMBAC Insured) (Subject to 'AMT') 6.550 11/1/2020 3,127,500
---------------------------------------------------------------------------------------------------------------------------------------
Total Kentucky 5,850,625
---------------------------------------------------------------------------------------------------------------------------------------
Louisiana (6.1%)
4,765,000 East Baton Rouge, Louisanna Mortgage Finance Authority Single
Family Revenue Bonds (Series A) (GNMA/FNMA Insured) (Subject
to 'AMT') 6.125 4/1/2026 4,884,125
490,000 East Baton Rouge, Louisanna Mortgage Finance Authority Single
Family Revenue Bonds (Series B) (GNMA/FNMA Insured) (Subject
to 'AMT') 6.125 10/1/2022 501,638
3,200,000 Jefferson Parish, Louisiana Home Mortgage Authority Single
Family Mortgage Revenue Bonds (Series A-2) (GNMA/FNMA
Insured) (Subject to 'AMT') 7.500 12/1/2030 3,532,000
1,745,000 Jefferson Parish, Louisianna Home Mortgage Authority Single
Family Mortgage Revenue Bonds (Series D-1) (FNMA/GNMA
Insured) 7.500 6/1/2026 1,917,319
1,250,000 Louisiana Housing Finance Agency Single Family Mortgage
Revenue Bonds (Series D-2) (GNMA/FNMA Insured) (Subject
to 'AMT') 7.050 6/1/2031 1,364,062
10,000,000 Louisiana Local Government Environment Facilities Community
Development Authority Revenue Bonds (Capital Projects and
Equipment Acquisition Program) (ACA Insured) 6.550 9/1/2025 10,375,000
3,000,000 Louisiana Public Facilities Authority Hospital Revenue Bonds
(Lake Charles Memorial) (AMBAC/TCRS Insured) 8.625 12/1/2030 3,682,500
$2,605,000 Regional Transportation Authority Louisiana Sales Tax
Revenue Bonds (Series A) (FGIC Insured) 8.000% 12/1/2012 $3,279,044
---------------------------------------------------------------------------------------------------------------------------------------
Total Louisiana 29,535,688
---------------------------------------------------------------------------------------------------------------------------------------
Maryland (0.2%)
1,005,000 Prince Georges County, Maryland Housing Authority Single
Family Mortgage Revenue Bonds (Series A) (GNMA/FNMA/FHLMC
Insured) (Subject to 'AMT') 6.000 8/1/2032 1,110,525
---------------------------------------------------------------------------------------------------------------------------------------
Total Maryland 1,110,525
---------------------------------------------------------------------------------------------------------------------------------------
Massachusetts (1.4%)
2,000,000 Massachusetts State Health and Educational Facilities Authority
Revenue Bonds (Milford-Whitinsville Regional) (Series C) 5.750 7/15/2013 1,797,500
4,000,000 Massachusetts State Industrial Finance Agency Revenue Bonds
(Bradford College) (ACA Insured) 5.250 11/1/2018 3,200,000
500,000 Massachusetts State Turnpike Authority Revenue Bonds (Series A)
(FGIC Insured) (Escrowed to Maturity) 5.125 1/1/2023 482,500
1,170,000 Westfield, Massachusetts General Obligation Bonds (FGIC Insured) 6.500 5/1/2014 1,295,775
---------------------------------------------------------------------------------------------------------------------------------------
Total Massachusetts 6,775,775
---------------------------------------------------------------------------------------------------------------------------------------
Michigan (5.8%)
3,965,000 Chelsea, Michigan Economic Development Corporation Limited
Obligation Revenue Bonds (United Methodist Retirement) 5.400 11/15/2027 2,914,275
545,000 Chelsea, Michigan Economic Development Corporation Limited
Obligation Revenue Bonds (United Methodist Retirement) 4.900 11/15/2006 480,281
515,000 Chelsea, Michigan Economic Development Corporation Limited
Obligation Revenue Bonds (United Methodist Retirement) 4.800 11/15/2005 461,569
1,750,000 Dickinson County, Michigan Healthcare System Hospital Revenue
Bonds 5.700 11/1/2018 1,395,625
2,500,000 Dickinson County, Michigan Healthcare System Hospital Revenue
Bonds 5.500 11/1/2013 2,134,375
1,850,000 East China School District, Michigan General Obligation Bonds
(FGIC Insured) 5.000 5/1/2015 1,803,750
2,000,000 East Lansing, Michigan Building Authority General Obligation Bonds 5.700 4/1/2020 2,042,500
2,090,000 Grand Rapids, Michigan Building Authority General Obligation
Bonds (AMBAC Insured) 5.375 8/1/2017 2,071,713
1,000,000 Grand Valley, Michigan State University Revenue Bonds
(MBIA Insured) 5.250 10/1/2017 1,002,500
1,000,000 Hillsdale, Michigan Hospital Finance Authority Hospital 'Revenue
Bonds (Hillsdale Community Health Center) 5.250 5/15/2026 702,500
135,000 Hillsdale, Michigan Hospital Finance Authority Hospital 'Revenue
Bonds (Hillsdale Community Health Center) 4.800 5/15/2005 126,394
260,000 Hillsdale, Michigan Hospital Finance Authority Hospital Revenue
Bonds (Hillsdale Community Health Center) 4.700 5/15/2004 246,675
100,000 Hillsdale, Michigan Hospital Finance Authority Hospital Revenue
Bonds (Hillsdale Community Health Center) 4.600 5/15/2002 97,625
3,000,000 John Tolfree Health Systems Corporation Michigan Mortgage
Revenue Bonds 6.000 9/15/2023 2,482,500
475,000 Kalkaska County, Michigan Hospital Authority Revenue Bonds 6.400 4/1/2001 475,161
$7,000,000 Michigan Public Power Agency Revenue Bonds (Belle River
Project) (Series B) 5.000% 1/1/2019 $6,588,750
2,000,000 Michigan State Hospital Finance Authority Revenue Bonds
(Hackley Hospital) (Series A) 5.300 5/1/2013 1,795,000
1,000,000 Trenton, Michigan Building Authority General Obligation Bonds
(AMBAC Insured) 5.600 10/1/2019 1,011,250
---------------------------------------------------------------------------------------------------------------------------------------
Total Michigan 27,832,443
---------------------------------------------------------------------------------------------------------------------------------------
Minnesota (1.3%)
375,000 Chaska, Minnesota Economic Development Authority School
Facilities Lease Revenue Bonds (Independent School District #112)
(Series A) 5.125 12/1/2010 375,938
300,000 Scott County, Minnesota Housing and Redevelopment Authority
Facilities Lease Revenue Bonds (Workforce Center Project) 5.000 2/1/2017 274,875
525,000 Scott County, Minnesota Housing and Redevelopment Authority
Facilities Lease Revenue Bonds (Workforce Center Project) 5.000 2/1/2018 476,437
5,000,000 White Earth Band of Chippewa Indians Minnesota Revenue
Bonds (Series A) (ACA Insured) 7.000 12/1/2011 5,206,250
---------------------------------------------------------------------------------------------------------------------------------------
Total Minnesota 6,333,500
---------------------------------------------------------------------------------------------------------------------------------------
Missouri (1.6%)
3,375,000 Missouri State Health and Educational Facilities Authority Health
Facilities Revenue Bonds (Bethesda Health Group, Inc. Project)
(Series A) 7.500 8/15/2012 3,569,063
1,530,000 Missouri State Housing Development Commission Single Family
Mortgage Revenue Bonds (Series B-1) (GNMA/FNMA Insured)
(Subject to 'AMT') 7.450 9/1/2031 1,694,475
2,125,000 Missouri State Housing Development Commission Single Family
Mortgage Revenue Bonds (Series C-1) (GNMA/FNMA Insured)
(Subject to 'AMT') 7.150 3/1/2032 2,329,531
---------------------------------------------------------------------------------------------------------------------------------------
Total Missouri 7,593,069
---------------------------------------------------------------------------------------------------------------------------------------
Montana (1.3%)
265,000 Montana State Board of Housing Single Family Mortgage
Revenue Bonds (Series A-1) 6.000 6/1/2016 274,275
1,000,000 Montana State Board of Housing Single Family Mortgage Revenue
Bonds (Series A-2) (Subject to 'AMT') 6.250 6/1/2019 1,027,500
1,340,000 Montana State Board of Regents Revenue Bonds (Higher Education-
University of Montana) (Series F) (MBIA Insured) 5.750 5/15/2016 1,400,300
3,480,000 Montana State Health Facilities Authority Revenue Bonds (Hillcrest
Senior Living Project) 7.375 6/1/2030 3,384,300
---------------------------------------------------------------------------------------------------------------------------------------
Total Montana 6,086,375
---------------------------------------------------------------------------------------------------------------------------------------
Nebraska (0.6%)
2,500,000 American Public Energy Agency Nebraska Gas Supply Revenue
Bonds (Nebraska Public Gas Agency Project) (Series A) (AMBAC
Insured) 4.500 6/1/2004 2,415,625
$750,000 American Public Energy Agency Nebraska Gas Supply Revenue
Bonds (Nebraska Public Gas Agency Project) (Series A) (AMBAC
Insured) 4.250% 6/1/2006 $697,500
---------------------------------------------------------------------------------------------------------------------------------------
Total Nebraska 3,113,125
---------------------------------------------------------------------------------------------------------------------------------------
Nevada (0.6%)
2,500,000 Washoe County, Nevada General Obligation Bonds (Reno-Sparks
Convention) (Series A) (FSA Insured) 6.400 7/1/2029 2,653,125
---------------------------------------------------------------------------------------------------------------------------------------
Total Nevada 2,653,125
---------------------------------------------------------------------------------------------------------------------------------------
New Mexico (1.9%)
1,000,000 Hobbs, New Mexico Multifamily Revenue Bonds (Washington Place
Apartments) (Series A) (ACA Insured) 6.625 9/15/2020 1,010,000
1,050,000 New Mexico Mortgage Finance Authority Multiple Family Housing
Revenue Bonds (Bluffs at Tierra Contenta) (Series A) (FSA Insured)
(Subject to 'AMT') 5.200 1/1/2019 1,000,125
2,525,000 New Mexico Mortgage Finance Authority Revenue Bonds
(Series F) (GNMA/FNMA Insured) 7.000 1/1/2026 2,869,031
995,000 New Mexico Mortgage Finance Authority Single Family Mortgage
Capital Appreciation Revenue Bonds (Series D-2) (Subject to 'AMT') 0.000 9/1/2019 590,781
3,430,000 New Mexico Mortgage Finance Authority Single Family Mortgage
Revenue Bonds (Series C-2) (GNMA/FNMA Insured) (Subject to
'AMT') 6.950 9/1/2031 3,815,875
---------------------------------------------------------------------------------------------------------------------------------------
Total New Mexico 9,285,812
---------------------------------------------------------------------------------------------------------------------------------------
New York (7.3%)
1,000,000 Erie County, New York Tobacco Asset Securitization Corporation
Tobacco Settlement Bonds (Class A) 6.000 7/15/2020 988,750
2,000,000 New York State Dormitory Authority Revenue Bonds (State
University Educational Facilities) (Series A) 7.500 5/15/2013 2,422,500
5,000,000 New York State Dormitory Authority Revenue Bonds (State
University Educational Facilities) (Series A) 5.875 5/15/2017 5,256,250
2,110,000 New York State Local Government Assistance Corporation
Revenue Bonds (Series A) (FSA Insured) 5.375 4/1/2019 2,083,625
2,000,000 New York State Local Government Assistance Corporation
Revenue Bonds (Series E) (MBIA/IBC Insured) 5.250 4/1/2016 2,025,000
4,000,000 New York State Mortgage Agency Revenue Bonds (Series 26) 5.350 10/1/2016 4,035,000
3,000,000 New York State Thruway Authority General Revenue Bonds
(Series E) 5.000 1/1/2016 2,895,000
6,800,000 New York, New York City Municipal Water Finance Authority
Water and Sewer System Revenue Bonds (Series A) (FGIC Insured)Variable 6/15/2025 6,800,000
3,000,000 New York, New York General Obligation Bonds (Series H) (FSA
Insured) 5.250 3/15/2016 2,977,500
1,000,000 Triborough Bridge and Tunnel Authority New York Revenue
Bonds (Series B) 5.375 1/1/2019 987,500
5,000,000 Triborough Bridge and Tunnel Authority New York Revenue
Bonds (Series Q) 5.000 1/1/2017 4,781,250
---------------------------------------------------------------------------------------------------------------------------------------
Total New York 35,252,375
---------------------------------------------------------------------------------------------------------------------------------------
North Carolina (2.9%)
$1,170,000 Fayetteville, North Carolina Public Works Commission Revenue
Bonds (FSA Insured) 5.125% 3/1/2017 $1,137,825
3,000,000 North Carolina Eastern Municipal Power Agency Power System
Revenue Bonds 6.000 1/1/2014 3,007,500
1,250,000 North Carolina Eastern Municipal Power Agency Power System
Revenue Bonds (Series A) 6.000 1/1/2026 1,340,625
1,070,000 North Carolina Eastern Municipal Power Agency Power System
Revenue Bonds (Series B) 6.250 1/1/2012 1,088,725
1,700,000 North Carolina Eastern Municipal Power Agency Power System
Revenue Bonds (Series B) 5.500 1/1/2021 1,544,875
2,000,000 North Carolina Eastern Municipal Power Agency Power System
Revenue Bonds (Series D) 6.750 1/1/2026 2,052,500
1,580,000 North Carolina Eastern Municipal Power Agency Power System
Revenue Bonds (Series D) 5.875 1/1/2013 1,580,000
600,000 North Carolina Municipal Power Agency #1 Catawba Electric
Revenue Bonds (Series A) (MBIA Insured) 5.125 1/1/2015 586,500
1,000,000 North Carolina Municipal Power Agency #1 Catawba Electric
Revenue Bonds (Series B) 6.250 1/1/2007 1,048,750
500,000 North Carolina Municipal Power Agency #1 Catawba Electric
Revenue Bonds (Series B) 6.000 1/1/2020 494,375
---------------------------------------------------------------------------------------------------------------------------------------
Total North Carolina 13,881,675
---------------------------------------------------------------------------------------------------------------------------------------
Ohio (1.9%)
1,700,000 Cincinnati, Ohio General Obligation Bonds 5.375 12/1/2019 1,683,000
2,500,000 Montgomery County, Ohio Hospital Revenue Bonds (Kettering
Medical Center) 6.750 4/1/2022 2,509,375
2,000,000 Montgomery County, Ohio Hospital Revenue Bonds (Kettering
Medical Center) 6.750 4/1/2018 2,022,500
3,000,000 Ohio Housing Finance Agency Mortgage Residential Revenue
Bonds (Series A-1) (GNMA Insured) (Subject to 'AMT') 5.750 9/1/2026 3,045,000
---------------------------------------------------------------------------------------------------------------------------------------
Total Ohio 9,259,875
---------------------------------------------------------------------------------------------------------------------------------------
Oklahoma (1.0%)
1,000,000 Oklahoma Housing Finance Agency Single Family Revenue
Bonds (Series D-2) (GNMA/FNMA Insured) (Subject to 'AMT') 7.100 9/1/2028 1,097,500
500,000 Oklahoma Housing Finance Agency Single Family Revenue
Bonds (Series C-2) (Subject to 'AMT') 7.550 9/1/2028 560,625
3,000,000 Payne County, Oklahoma Economic Development Authority
Student Housing Revenue Bonds (Collegiate Housing Foundation)
(Series A) 6.375 6/1/2030 3,030,000
---------------------------------------------------------------------------------------------------------------------------------------
Total Oklahoma 4,688,125
---------------------------------------------------------------------------------------------------------------------------------------
Oregon (1.0%)
550,000 Forest Grove, Oregon Revenue Bonds (Campus Improvement -
Pacific University) 6.000 5/1/2015 569,250
3,500,000 Klamath Falls, Oregon Inter Community Hospital Authority
Revenue Bonds (Gross-Merle West Medical Center Project) 7.100 9/1/2024 3,561,250
$600,000 Port of St. Helen's, Oregon Pollution Control Revenue Bonds
(Portland General Electric Company) (Series A) (MBIA/IBC
Insured) (Subject to 'AMT') 5.250% 8/1/2014 $600,000
---------------------------------------------------------------------------------------------------------------------------------------
Total Oregon 4,730,500
---------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania (3.3%)
2,610,000 Allegheny County, Pennsylvania Redevelopment Authority
'Tax Increment Revenue Bonds (Waterfront Project) (Series C) 6.550 12/15/2017 2,717,663
2,480,000 Allegheny County, Pennsylvania Redevelopment Authority Tax
Increment Revenue Bonds (Waterfront Project) (Series B) 6.000 12/15/2010 2,557,500
1,200,000 Allentown, Pennsylvania Area Hospital Authority Revenue
Bonds (Sacred Heart Health Center System) (ACA Insured) 5.000 7/1/2010 1,129,500
4,000,000 Carbon County, Pennsylvania Industrial Developement
Authority Revenue Bonds (Panther Creek Partners Project) (Subject
to 'AMT') 6.650 5/1/2010 4,090,000
1,880,000 Montgomery County, Pennsylvania Higher Education and Health
Authority Revenue Bonds (Foulkeways at Gwynedd Project) 6.750 11/15/2030 1,887,050
435,000 Montgomery County, Pennsylvania Higher Education and Health
Authority Revenue Bonds (Foulkeways at Gwynedd Project) 6.750 11/15/2024 436,631
500,000 Pennsylvania State Higher Education Assistance Agency Student
Loan revenue Bonds (Series C) (AMBAC Insured) (Subject to
'AMT') 7.150 9/1/2021 517,665
200,000 Pennsylvania State Higher Education Facilities Authority Health
Services Revenue Bonds (Allegheny, Delaware Project) (Series A)
(MBIA Insured) 4.900 11/15/2001 200,916
2,540,000 Philadelphia, Pennsylvania Hospitals and Higher Education Facilities
Authority Revenue Bonds (Children's Hospital Philadelphia)
(Series A) 5.000 2/15/2021 2,251,075
---------------------------------------------------------------------------------------------------------------------------------------
Total Pennsylvania 15,788,000
---------------------------------------------------------------------------------------------------------------------------------------
South Carolina (1.7%)
1,150,000 Loris, South Carolina Community Hospital District Revenue
Bonds (Series A) 5.500 1/1/2016 966,000
2,000,000 Loris, South Carolina Community Hospital District Revenue
Bonds (Series B) 5.625 1/1/2020 1,657,500
2,980,000 Piedmont Municipal Power Agency South Carolina Electric
Revenue Bonds (Series A) 6.550 1/1/2016 2,979,791
1,600,000 South Carolina Jobs Economic Development Authority Hospital
Facilities Revenue Bonds (Palmetto Health Alliance) (Series A) 7.375 12/15/2021 1,650,000
1,000,000 South Carolina Jobs Economic Development Authority Hospital
Facilities Revenue Bonds (Palmetto Health Alliance) (Series A) 7.000 12/15/2010 1,033,750
---------------------------------------------------------------------------------------------------------------------------------------
Total South Carolina 8,287,041
---------------------------------------------------------------------------------------------------------------------------------------
South Dakota (0.5%)
2,500,000 South Dakota State Health and Educational Facilities Authority
Revenue Bonds (Prarie Lakes Health Care System) (ACA/CBI
Insured) 5.650 4/1/2022 2,312,500
---------------------------------------------------------------------------------------------------------------------------------------
Total South Dakota 2,312,500
---------------------------------------------------------------------------------------------------------------------------------------
Texas (8.5%)
$2,000,000 Amarillo, Texas Health Facilites Corporation Revenue Bonds
(Baptist St. Anthonys Hospital Corporation) (FSA Insured) 5.500% 1/1/2017 $2,017,500
1,930,000 Bexar County, Texas Housing Finance Corporation Multifamily
Housing Revenue Bonds (Dymaxion and Marrach Park Apartments
Project) (Series A) (MBIA Insured) 6.000 8/1/2023 1,951,712
3,000,000 Brazos River Authority Texas Pollution Control Revenue Bonds
(Texas Utilities Electric Company Project) (Series A) (Subject to
'AMT') 7.875 3/1/2021 3,083,880
3,950,000 Colorado River, Texas Municipal Water District Water Revenue
Bonds (MBIA Insured) 5.000 1/1/2014 3,866,063
1,445,000 Frisco, Texas Independent School District General Obligation
Bonds (PSF/GTD Insured) 6.250 8/15/2017 1,540,731
1,840,000 Gulf Coast Waste Disposal Authority Texas Revenue Bonds
(Champion International Corporation) (Subject to 'AMT') 7.450 5/1/2026 1,911,300
1,500,000 Harris County, Texas Health Facilities Development Corporation
Revenue Bonds (Sisters of Charity Health Care Systems) (Series B)
(Escrowed to Maturity) 6.250 7/1/2027 1,623,750
3,770,000 Mesquite, Texas Independent School District General Obligation
Bonds (Series A) (PSF/GTD Insured) 6.000 2/15/2020 3,864,250
1,865,000 Nueces County, Texas Housing Finance Corporation Multifamily
Housing Revenue Bonds (Dolphins Landing Apartments Project)
(Series A) 6.875 7/1/2030 1,885,981
1,000,000 Panhandle, Texas Regional Housing Finance Revenue Bonds
(Series A) 6.250 3/1/2010 1,040,000
1,275,000 South San Antonio, Texas Independent School District General
Obligation Bonds (PSF/GTD Insured) 6.000 8/15/2019 1,316,438
1,250,000 South San Antonio, Texas Independent School District General
Obligation Bonds (PSF/GTD Insured) 6.000 8/15/2018 1,295,312
1,180,000 South San Antonio, Texas Independent School District General
Obligation Bonds (PSF/GTD Insured) 6.000 8/15/2017 1,227,200
6,000,000 Texas State General Obligation Bonds (Veterans Land Project) 7.400 12/1/2020 6,130,980
2,000,000 Travis County, Texas Health Facilities Development Corporation
Revenue Bonds (Ascension Health Credit) (Series A) (MBIA Insured) 6.250 11/15/2017 2,117,500
1,465,000 Victoria County, Texas Hospital Revenue Bonds (Citizens Medical
Center) 5.500 2/15/2015 1,256,238
1,320,000 Victoria County, Texas Hospital Revenue Bonds (Citizens Medical
Center) 5.400 2/15/2013 1,148,400
3,280,000 Wylie, Texas Independent School District General Obligation
Bonds (PSF/GTD Insured) 7.000 8/15/2024 3,706,400
---------------------------------------------------------------------------------------------------------------------------------------
Total Texas 40,983,635
---------------------------------------------------------------------------------------------------------------------------------------
Utah (1.8%)
250,000 Intermountain Power Agency Utah Power Supply Revenue
Bonds (PSF/GTD Insured) 5.000 7/1/2013 245,625
3,790,000 Intermountain Power Agency Utah Power Supply Revenue
Bonds (Series A) (Escrowed to Maturity) 5.000 7/1/2021 3,548,387
915,000 Intermountain Power Agency Utah Power Supply Revenue
Bonds (Series B) (MBIA/IBC Insured) 5.000 7/1/2016 874,969
$2,965,000 Intermountain Power Agency Utah Power Supply Revenue
(Series A) (AMBAC/TCRS Insured) (Escrowed to Maturity) 5.500% 7/1/2020 $2,976,119
1,000,000 Utah Water Finance Agency Revenue Bonds (Timpanogos Line
Finding Project) (Series B) (MBIA Insured) 5.000 6/1/2019 943,750
---------------------------------------------------------------------------------------------------------------------------------------
Total Utah 8,588,850
---------------------------------------------------------------------------------------------------------------------------------------
Virginia (1.4%)
2,500,000 Fairfax County, Virginia Industrial Development Authority Revenue
Bonds (Inova Health Systems Project) 5.250 8/15/2019 2,375,000
1,600,000 Richmond, Virginia Metropolitan Authority Expressway Revenue
Bonds (FGIC Insured) 5.250 7/15/2017 1,604,000
1,355,000 Riverside, Virginia Regional Jail Authority Jail Facilities Revenue
Bonds (MBIA Insured) 5.875 7/1/2014 1,453,238
1,130,000 Riverside, Virginia Regional Jail Authority Jail Facilities Revenue
Bonds (MBIA Insured) 5.875 7/1/2014 1,176,612
---------------------------------------------------------------------------------------------------------------------------------------
Total Virginia 6,608,850
---------------------------------------------------------------------------------------------------------------------------------------
Washington (4.0%)
5,000,000 Washington State General Obligation Bonds (Series A) 6.750 2/1/2015 5,750,000
2,000,000 Washington State Health Care Facilities Authority Revenue
Bonds (Swedish Health Systems) (AMBAC Insured) 5.125 11/15/2018 1,890,000
1,000,000 Washington State Housing Finance Commission Nonprofit
Housing Revenue Bonds (Crista Ministries Projects) (Series A) 5.350 7/1/2014 956,250
4,500,000 Quinault Indian Nation, Washington Revenue Bonds (Quinault
Beach Project) (Series A) (ACA Insured) 5.800 12/1/2015 4,455,000
2,060,000 Clark and Skamania Counties, Washington School District #112-6
Washougal General Obligation Bonds (FGIC Insured) 6.000 12/1/2019 2,144,975
1,000,000 Grant County, Washington Public Utilites District #2 Priest
Rapids Hydro Electric Revenue Bonds (Series A) (MBIA Insured) 5.250 1/1/2017 971,250
2,975,000 Washington State Housing Finance Commission Multifamily
Mortgage Revenue Bonds (Pooled Loan Program) (Subject to 'AMT') 6.300 1/1/2021 3,090,281
---------------------------------------------------------------------------------------------------------------------------------------
Total Washington 19,257,756
---------------------------------------------------------------------------------------------------------------------------------------
Wisconsin (1.4%)
1,000,000 Wisconsin State Health and Educational Facilities Authority
Revenue Bonds (Children's Hospital of Wisconsin, Inc.) (AMBAC
Insured) 5.625 2/15/2015 1,027,500
1,105,000 Monroe, Wisconsin School District General Obligation Bonds
(AMBAC Insured) 6.875 4/1/2014 1,252,794
3,810,000 Wisconsin State Health and Educational Facilities Authority
Revenue Bonds (Mercy Hospital of Janesville, Inc.) 6.600 8/15/2022 3,862,387
550,000 Wisconsin State Health and Educational Facilities Authority
Revenue Bonds (Monroe Clinic, Inc.) 5.375 2/15/2022 475,750
---------------------------------------------------------------------------------------------------------------------------------------
Total Wisconsin 6,618,431
---------------------------------------------------------------------------------------------------------------------------------------
Wyoming (1.6%)
1,765,000 Teton County, Wyoming Hospital District Hospital Revenue
Bonds (ACA/CBI Insured) 5.800 12/1/2017 1,740,731
5,825,000 Wyoming State Farm Loan Board Capital Facilities Revenue Bonds 5.750 10/1/2020 5,963,344
---------------------------------------------------------------------------------------------------------------------------------------
Total Wyoming 7,704,075
---------------------------------------------------------------------------------------------------------------------------------------
United States Territories (0.8%)
$2,100,000 Childrens Trust Fund Puerto Rico Tobacco Settlement
Revenue Bonds 6.000% 7/1/2026 $2,081,625
2,000,000 Childrens Trust Fund Puerto Rico Tobacco Settlement
Revenue Bonds 5.750 7/1/2020 1,987,500
---------------------------------------------------------------------------------------------------------------------------------------
Total United States Territories 4,069,125
---------------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bond Investments
(amortized cost basis $458,675,508) 473,627,821
---------------------------------------------------------------------------------------------------------------------------------------
Principal Market
Amount Short-Term Tax-Exempt Variable Rate Investments (1.8%) Value
======================================================================================================================================
$8,573,738 Citifunds Institutional Tax-Free Reserves $8,573,738
--------------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Tax-Exempt Variable
Rate Investments (cost basis $8,573,738) 8,573,738
--------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.1%)
(amortized cost basis $467,249,246) 482,201,559
--------------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-0.1%) (234,581)
--------------------------------------------------------------------------------------------------------------------------------------
Net Assets (100.0%) $481,966,978
--------------------------------------------------------------------------------------------------------------------------------------
/3/ When-issued security
/4/ Pledged as security for when-issued securities.
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
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.
Principal Interest Maturity Market
Amount Long-Term Fixed-Income Investments (95.9%) Rate Date Value
=======================================================================================================================================
Asset Backed Securities (9.7%)
$3,000,000 Associates Manufactured Housing Pass Through Certificates
Series 1996-1 Class M 7.900% 3/15/2027 $2,970,360
2,125,000 EQCC Home Equity Loan Trust Series 1997-3 Class A7 6.930 2/15/2029 2,038,393
5,250,000 Green Tree Financial Corporation Series 1997-6 Class A5 6.680 1/15/2029 5,227,530
4,991,219 Green Tree Financial Corporation Series 1996-7 Class A6 7.650 10/15/2027 4,924,686
4,975,725 Green Tree Financial Corporation Series 1996-6 Class A6 7.950 9/15/2027 4,914,524
3,000,000 Green Tree Home Improvement Loan Trust Series 1996-D Class
HEM1 8.100 9/15/2027 3,021,000
4,500,000 Harley-Davidson Eaglemark Motorcycle Trust Series 1999-1 Class
Certificates 6.710 1/15/2007 4,401,000
4,750,000 Morgan Stanley Dean Witter Capital, Inc. Series 2000-LIF2 Class A1 6.960 7/15/2008 4,743,692
4,000,000 Vanderbilt Mortgage Finance Series 2000-B Class IA2 8.045 7/7/2012 4,082,640
---------------------------------------------------------------------------------------------------------------------------------------
Total Asset Backed Securities 36,323,825
---------------------------------------------------------------------------------------------------------------------------------------
Commercial Mortgage Backed Securities (7.0%)
4,000,000 Bear Stearns Commercial Mortgage Securities Series 2000-WF2
Class A1 7.110 9/15/2009 4,018,516
4,000,000 First Union National Bank Commercial Mortgage Trust Series
1999-C4 Class A2 7.390 11/15/2009 4,067,104
3,879,972 Heller Financial Commercial Mortgage Asset Series 2000-PH1
Class A1 7.715 9/15/2008 3,991,878
4,862,248 J.P. Morgan Commercial Mortgage Finance Corporation Series
2000-C9 Class A1 7.590 10/15/2032 4,970,103
5,000,000 Nationslink Funding Corporation Series 1999-2 Class A3 7.181 12/20/2006 5,038,580
4,000,000 Residential Asset Securities Corporation Series 2000-KS1 Class AI4 8.040 10/25/2028 4,061,080
---------------------------------------------------------------------------------------------------------------------------------------
Total Commercial Mortgage Backed Securities 26,147,261
---------------------------------------------------------------------------------------------------------------------------------------
Finance (6.6%)
5,000,000 Cabot Industrial Properties, L.P. 7.125 5/1/2004 4,899,670
8,500,000 Comdisco, Inc. 5.950 4/30/2002 6,376,870
4,000,000 EOP Operating, L.P. 6.800 1/15/2009 3,728,800
4,000,000 First Security Corporation 6.875 11/15/2006 3,933,196
6,000,000 Mack-Cali Realty, L.P. 7.000 3/15/2004 5,834,886
---------------------------------------------------------------------------------------------------------------------------------------
Total Finance 24,773,422
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Consumer Goods (1.1%)
4,200,000 ConAgra, Inc. 7.500 9/15/2005 4,237,162
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Consumer Goods 4,237,162
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Energy (8.6%)
4,000,000 Alberta Energy Company, Ltd. 7.650 9/15/2010 4,026,652
$5,000,000 Coastal Corporation 6.500% 5/15/2006 $4,810,300
4,000,000 El Paso Energy Corporation 6.750 5/15/2009 3,801,644
3,500,000 Enron Corporation 6.400 7/15/2006 3,366,247
4,000,000 Enterprise Products Operating, L.P. 8.250 3/15/2005 4,081,844
4,500,000 Petroleum Geo-Services ASA 6.625 3/30/2008 4,203,621
4,000,000 Tosco Corporation 7.250 1/1/2007 3,967,840
4,000,000 USX Corporation 6.650 2/1/2006 3,872,984
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Energy 32,131,132
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Manufacturing (1.5%)
5,500,000 International Paper Company2 8.125 7/8/2005 5,629,206
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Manufacturing 5,629,206
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Services (10.2%)
4,000,000 Clear Channel Communications, Inc. 7.875 6/15/2005 4,034,312
4,000,000 Continental Cablevision, Inc. 8.875 9/15/2005 4,242,524
4,000,000 Equifax, Inc. 6.300 7/1/2005 3,863,472
5,500,000 Guidant Corporation 6.150 2/15/2006 5,137,677
4,000,000 News America Holdings 8.500 2/15/2005 4,169,084
4,000,000 Time Warner, Inc. 8.110 8/15/2006 4,144,776
5,000,000 Waste Management, Inc. 7.000 10/1/2004 4,773,765
8,000,000 Waste Management, Inc. 6.000 5/15/2001 7,860,000
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Services 38,225,610
---------------------------------------------------------------------------------------------------------------------------------------
Industrial-Transportation (1.2%)
4,500,000 American Airlines, Inc. 7.024 10/15/2009 4,383,135
---------------------------------------------------------------------------------------------------------------------------------------
Total Industrial-Transportation 4,383,135
---------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Agencies (19.2%)
4,937,052 Federal Home Loan Mortgage Corporation Gold 30 Yr. Pass Through 8.000 6/1/2030 5,004,739
4,799,351 Federal Home Loan Mortgage Corporation Gold 30 Yr. Pass Through 7.500 12/1/2029 4,799,782
6,223,162 Federal Home Loan Mortgage Corporation Gold 30 Yr. Pass Through 7.000 10/1/2029 6,107,847
6,000,000 Federal National Mortgage Association 7.250 5/15/2030 6,341,646
6,000,000 Federal National Mortgage Association 7.125 6/15/2010 6,185,970
6,302,097 Federal National Mortgage Association 30 Yr. Pass Through 8.000 6/1/2030 6,380,621
4,070,677 Federal National Mortgage Association 30 Yr. Pass Through 8.000 2/1/2030 4,121,845
5,982,914 Federal National Mortgage Association 30 Yr. Pass Through 7.500 8/1/2030 5,974,597
4,949,753 Federal National Mortgage Association 30 Yr. Pass Through 7.500 8/1/2030 4,942,872
8,784,886 Federal National Mortgage Association 30 Yr. Pass Through 7.500 3/1/2030 8,772,675
6,698,335 Federal National Mortgage Association 30 Yr. Pass Through 7.500 1/1/2030 6,692,508
6,637,043 Federal National Mortgage Association 30 Yr. Pass Through 7.000 9/1/2029 6,509,081
---------------------------------------------------------------------------------------------------------------------------------------
Total U.S. Government Agencies 71,834,183
---------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Securities (12.1%)
4,500,000 U.S. Treasury Bonds 12.000 8/15/2013 6,155,546
16,500,000 U.S. Treasury Bonds 8.750 5/15/2017 21,199,200
15,750,000 U.S. Treasury Bonds 7.250 5/15/2016 17,723,207
---------------------------------------------------------------------------------------------------------------------------------------
Total U.S. Treasury Securities 45,077,953
---------------------------------------------------------------------------------------------------------------------------------------
Utilities (18.7%)
$5,000,000 Arizona Public Service Company 6.250% 1/15/2005 $4,800,980
5,000,000 Cable & Wireless Optus Finance Property, Ltd./2/ 8.000 6/22/2010 5,195,100
4,000,000 CSW Investments/2/ 7.450 8/1/2006 3,826,916
5,000,000 Edison Mission Holdings Company 8.137 10/1/2019 4,889,300
4,500,000 Enogex, Inc./2/ 8.125 1/15/2010 4,525,056
4,500,000 LCI International, Inc. 7.250 6/15/2007 4,400,730
3,500,000 NRG Northeast Generating LLC/2/ 8.842 6/15/2015 3,616,130
7,000,000 NRG Northeast Generating LLC/2/ 8.065 12/15/2004 7,031,780
6,000,000 ONEOK, Inc. 7.750 8/15/2006 6,077,106
5,000,000 Sierra Pacific Resources 8.750 5/15/2005 5,154,970
4,000,000 Sprint Capital Corporation 6.375 5/1/2009 3,592,520
8,500,000 TXU Eastern Funding Company 6.450 5/15/2005 8,020,379
5,000,000 UtiliCorp United, Inc. 7.625 11/15/2009 4,833,390
4,000,000 Vodafone Group plc/2/ 7.750 2/15/2010 4,073,560
---------------------------------------------------------------------------------------------------------------------------------------
Total Utilities 70,037,917
---------------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed-Income Investments
(amortized cost basis $357,826,237) 358,800,806
---------------------------------------------------------------------------------------------------------------------------------------
Principal Interest Maturity Market
Amount Short-Term Investments (2.7%) Rate/1/ Date Value
===================================================================================================================================
$4,765,000 Countrywide Home Loans, Inc. 6.480-6.560% 11/1/2000-11/6/2000 $4,763,857
5,439,000 Walt Disney Company 6.390 11/3/2000 5,437,036
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments
(amortized cost basis $10,200,893) 10,200,893
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (98.6%)
(amortized cost basis $368,027,130) 369,001,699
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (1.4%) 5,293,586
-----------------------------------------------------------------------------------------------------------------------------------
Net Assets (100.0%) $374,295,285
-----------------------------------------------------------------------------------------------------------------------------------
/1/ The interest rate reflects the discount rate at the date of purchase.
/2/ 144A security
See page 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
Schedule of Investments as of October 31, 2000
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.
Principal Interest Maturity Market
Amount Commercial Paper (99.4%) Rate Range/1/ Range Value
=======================================================================================================================================
$17,000,000 American Express Credit Corporation 6.380-6.470% 11/29/2000-1/31/2001 $16,785,414
16,608,000 American General Finance Corporation 6.450-6.510 11/6/2000-1/12/2001 16,486,758
17,000,000 Associates Corporation of North America 6.430-6.530 12/5/2000-2/12/2001 16,824,567
16,458,000 AT&T Corporation 6.460-6.510 11/27/2000-1/17/2001 16,315,529
14,134,000 Coca-Cola Company/6/ 6.420-6.490 11/9/2000-1/23/2001 14,046,771
3,523,000 Countrywide Home Loans, Inc. 6.520 11/3/2000 3,521,724
17,391,000 Duke Energy Corporation 6.460-6.480 11/13/2000-1/26/2001 17,219,916
14,282,000 E.I. du Pont de Nemours & Company 6.400-6.460 11/30/2000-3/2/20001 14,057,503
16,500,000 Ford Motor Credit Company 6.460-6.520 11/16/2000-1/12/2001 16,384,986
16,544,000 Gannett Company 6.420-6.500 11/7/2000-2/20/2001 16,404,364
16,805,000 General Electric Capital Corporation 6.480-6.530 11/3/2000-2/8/2001 16,684,957
14,148,000 General Motors Acceptance Corporation 6.480-6.530 11/3/2000-1/30/2001 14,046,823
11,357,000 Gillette Company 6.450-6.470 12/11/2000-1/8/2001 11,254,519
11,600,000 Goldman Sachs Group, L.P. 6.530-6.560 11/15/2000-1/3/2001 11,518,699
5,812,000 Hershey Foods Corporation 6.460 11/9/2000 5,803,657
14,500,000 H. J. Heinz Company 6.450-6.500 1/26/2001-2/13/2001 14,244,621
16,467,000 Household Finance Corporation 6.420-6.510 12/7/2000-2/12/2001 16,223,454
11,066,000 IBM Credit Corporation 6.450-6.510 11/8/2000-12/4/2000 11,037,222
16,786,000 International Lease Finance Corporation 6.420-6.510 11/17/2000-2/17/2001 16,633,131
16,693,000 John Deere Capital Corporation 6.490-6.610 11/1/2000-1/17/2001 16,631,222
1,436,000 Lucent Technologies, Inc. 6.460 12/21/2000 1,423,116
10,175,000 McGraw-Hill Companies, Inc. 6.460-6.500 12/5/2000-1/16/2001 10,084,914
16,360,000 Merrill Lynch & Company, Inc. 6.470-6.550 11/6/2000-1/19/2001 16,206,411
16,223,000 Motorola, Inc. 6.420-6.480 12/28/2000-3/16/2001 15,950,014
13,735,000 SBC Communications, Inc. 6.430-6.470 11/20/2000-12/21/2000 13,642,104
13,003,000 Schering Corporation 6.440-6.520 11/28/2000-12/13/2000 12,925,980
8,286,000 Southern California Edison Company 6.450-6.460 11/17/2000-12/4/2000 8,249,175
16,100,000 Toyota Motor Credit Corporation 6.470-6.500 1/19/2001-2/1/2001 15,849,716
15,170,000 Walt Disney Company 6.390-6.420 11/3/2000-2/23/2001 14,902,901
14,239,000 Wells Fargo Financial 6.430-6.460 12/8/2000-12/11/2000 14,140,584
8,460,000 Wisconsin Energy Corporation 6.480-6.500 11/2/2000-11/8/2000 8,456,316
---------------------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper 413,957,068
---------------------------------------------------------------------------------------------------------------------------------------
Principal Market
Amount Variable Rate Investments (0.7%) Value
===================================================================================================================================
$2,740,684 Fidelity Domestic Portfolio Class III $2,740,684
-----------------------------------------------------------------------------------------------------------------------------------
Total Variable Rate Investments 2,740,684
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.1%)
(amortized cost basis $416,697,752) 416,697,752
-----------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-0.1%) (415,356)
-----------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (100.0%) $416,282,396
-----------------------------------------------------------------------------------------------------------------------------------
/1/ 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 117 for a complete discussion of investment terms.
The accompanying notes to the financial statements are an integral part of this schedule.
As of October 31, 2000
The AAL The AAL The AAL The AAL
Technology Stock Aggressive Growth Small Cap Stock Mid Cap Stock
Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments at cost $35,608,027 $39,285,864 $244,026,061 $807,509,090
Investments at value $32,847,317 $37,279,830 $269,108,131 $943,883,730
Cash 316 21,118 26 70
Unamortized organization & initial registration expenses - - 4,827 -
Dividends and interest receivable. 675 2,154 53,965 573,689
Prepaid expenses 63,432 63,432 45,547 52,024
Receivable for investments sold 296,428 197,464 6,245,027 13,220,875
Receivable for fund shares sold 597,000 386,074 379,886 848,962
Receivable for forward contracts - - - -
---------------------------------------------------------------------------------------------------------------------------------------
Total Assets $33,805,168 $37,950,072 $275,837,409 $958,579,350
=======================================================================================================================================
Liabilities:
Payable for forward contracts $ - $ - $ - $ -
Payable for investments purchased 1,859,817 1,391,239 7,613,506 9,175,531
Income distributions payable - - - -
Payable for fund shares redeemed 145,292 330 52,322 318,080
Payable to affiliate 25,232 30,746 245,696 793,879
Accrued expenses 103,527 105,939 166,492 468,387
---------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities $2,133,868 $1,528,254 $8,078,016 $10,755,877
=======================================================================================================================================
Net Assets:
Trust Capital (beneficial interest) $35,317,924 $38,568,859 $207,601,294 $650,774,325
Accumulated undistributed net investment income (loss) (81,120) 6,945 (753,060) 4,504
Accumulated undistributed net realized gain (loss)
on investments (804,794) (147,946) 35,829,089 160,670,004
Net unrealized appreciation/(depreciation) on:
Investments (2,760,710) (2,006,034) 25,082,070 136,374,640
Foreign currency contracts - - - -
Foreign currency related transactions - (6) - -
---------------------------------------------------------------------------------------------------------------------------------------
Total Net Assets $31,671,300 $36,421,818 $267,759,393 $947,823,473
=======================================================================================================================================
Total Liabilities & Capital $33,805,168 $37,950,072 $275,837,409 $958,579,350
=======================================================================================================================================
Class A share capital $20,972,325 $26,835,672 $237,069,145 $890,845,432
Shares of beneficial interest outstanding (Class A) 2,355,337 2,925,115 14,938,492 47,294,003
Net asset value per share $8.90 $9.17 $15.87 $18.84
Maximum public offering price $9.27 $9.55 $16.53 $19.63
Class B share capital $2,330,464 $2,313,096 $29,067,829 $34,152,027
Shares of beneficial interest outstanding (Class B) 261,964 252,762 1,887,301 1,882,208
Net asset value per share $8.89 $9.15 $15.40 $18.14
Class I share capital $8,368,511 $7,273,050 $1,622,419 $22,826,014
Shares of beneficial interest outstanding (Class I) 934,470 789,229 100,577 1,197,527
Net asset value per share $8.95 $9.21 $16.13 $19.06
The AAL The AAL The AAL The AAL The AAL The AAL
International Capital Growth Equity Income Balanced Small Cap Mid Cap Index
Fund Fund Fund Fund Index Fund II Fund II
----------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments at cost $227,903,400 $2,351,489,968 $254,213,769 $268,000,489 $11,304,465 $14,020,209
Investments at value $236,097,138 $4,474,911,213 $308,816,830 $300,403,095 $11,386,951 $14,362,433
Cash 118,185 10,831 732 186 31 497
Unamortized organization &
initial registration expenses - - - 36,048 - -
Dividends and interest receivable. 521,179 1,904,753 522,103 1,816,354 3,287 7,515
Prepaid expenses 49,981 159,547 37,672 67,905 47,947 47,947
Receivable for investments sold 24,206 12,757,373 - 476,206 333,842 10,214
Receivable for fund shares sold 234,670 1,660,017 185,271 381,452 44,324 87,505
Receivable for forward contracts 1,215,564 - - - - -
---------------------------------------------------------------------------------------------------------------------------
Total Assets $238,260,923 $4,491,403,734 $309,562,608 $303,181,246 $11,816,382 $14,516,111
===========================================================================================================================
Liabilities:
Payable for forward contracts $ 1,229,923 $ - $ - $ - $ - $ -
Payable for investments purchased 1,280,262 - - - 402,701 178,371
Income distributions payable - - - - - -
Payable for fund shares redeemed 80,643 1,972,427 149,036 102,737 77,392 -
Payable to affiliate 203,283 3,136,878 200,732 214,547 5,758
6,826
Accrued expenses 279,223 992,680 102,902 288,100 63,375 63,156
---------------------------------------------------------------------------------------------------------------------------
Total Liabilities $3,073,334 $6,101,985 $452,670 $605,384 $549,226 $248,353
=========================================================================================================================
Net Assets:
Trust Capital (beneficial interest)$216,571,861 $2,105,903,421 $237,663,480 $277,174,845 $11,042,048 $13,882,492
Accumulated undistributed net
investment income (loss) 5,143,199 6,807,062 359,621 677,855 (31,419) (16,562)
Accumulated undistributed net
realized gain (loss) on investments 5,320,581 249,170,021 16,483,776 (7,679,444) 174,041 59,604
Net unrealized appreciation/
(depreciation) on: Investments 8,193,738 2,123,421,245 54,603,061 32,402,606 82,486 342,224
Foreign currency contracts (14,359) - - - - -
Foreign currency related
transactions (27,431) - - - - -
---------------------------------------------------------------------------------------------------------------------------
Total Net Assets $235,187,589 $4,485,301,749 $309,109,938 $302,575,862 $11,267,156 $14,267,758
===========================================================================================================================
Total Liabilities & Capital $238,260,923 $4,491,403,734 $309,562,608 $303,181,246 $11,816,382 $14,516,111
===========================================================================================================================
Class A share capital $216,494,369 $4,232,520,885 $288,466,792 $279,545,723 $10,044,724 $12,821,817
Shares of beneficial
interest outstanding(Class A) 17,171,927 106,106,794 19,084,868 22,055,778 986,703 1,221,702
Net asset value per share $12.61 $39.89 $15.11 $12.68 $10.18 $10.49
Maximum public offering price $13.14 $41.55 $15.74 $13.21 $10.60 $10.93
Class B share capital $15,374,720 $159,623,968 $12,403,956 $19,970,880 $1,222,432 $1,445,941
Shares of beneficial
interest outstanding (Class B) 1,254,242 4,117,425 822,187 1,582,856 120,391 138,151
Net asset value per share $12.26 $38.77 $15.09 $12.62 $10.15 $10.46
Class I share capital $3,318,500 $93,156,896 $8,239,190 $3,059,259 - -
Shares of beneficial
interest outstanding (Class I) 260,742 2,331,931 544,125 241,569 - -
Net asset value per share $12.73 $39.95 $15.14 $12.67 - -
The AAL The AAL The AAL The AAL The AAL
Large Company High Yield Bond Municipal Bond Bond Money Market
Index Fund II Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments at cost $17,793,850 $142,455,860 $467,249,246 $368,027,130 $416,697,752
Investments at value $17,439,892 $131,173,678 $482,201,559 $369,001,699 $416,697,752
Cash 70,877 8,228 1,001,895 709 38
Unamortized organization & initial registration expenses - 7,751 - - -
Dividends and interest receivable. 10,511 3,491,066 8,084,682 6,251,420 33,080
Prepaid expenses 95,267 39,744 33,243 29,111 67,274
Receivable for investments sold - 2,010,212 1,755,323 - -
Receivable for fund shares sold 121,723 37,384 38,970 170,133 1,741,523
Receivable for forward contracts - - - - -
---------------------------------------------------------------------------------------------------------------------------------------
Total Assets $17,738,270 $136,768,063 $493,115,672 $375,453,072 $418,539,667
=======================================================================================================================================
Liabilities:
Payable for forward contracts $ - $ - $ - $ - $ -
Payable for investments purchased 251,019 - 10,094,688 - -
Income distributions payable - 386,242 386,938 549,430 133,549
Payable for fund shares redeemed - 63,533 265,049 285,304 1,765,133
Payable to affiliate 8,087 108,678 258,675 180,152 195,234
Accrued expenses 110,907 100,334 143,344 142,901 163,355
---------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities $370,013 $658,787 $11,148,694 $1,157,787 $2,257,271
=======================================================================================================================================
Net Assets:
Trust Capital (beneficial interest) $17,745,464 $190,836,312 $480,932,511 $403,624,426 $416,247,185
Accumulated undistributed net
investment income (loss) (14,335) (130,749) - 96,451 35,211
Accumulated undistributed net realized
gain (loss) on investments (8,914) (43,314,105) (13,917,846) (30,400,161) -
Net unrealized appreciation/(depreciation) on:
Investments (353,958) (11,282,182) 14,952,313 974,569 -
Foreign currency contracts - - - - -
Foreign currency related transactions - - - - -
---------------------------------------------------------------------------------------------------------------------------------------
Total Net Assets $17,368,257 $136,109,276 $481,966,978 $374,295,285 $416,282,396
=======================================================================================================================================
Total Liabilities & Capital $17,368,270 $136,768,063 $493,115,672 $375,453,072 $418,539,667
=======================================================================================================================================
Class A share capital $15,819,231 $123,987,149 $473,272,150 $321,344,743 $382,319,114
Shares of beneficial interest outstanding (Class A)1,620,570 18,030,103 43,896,837 33,879,686 382,319,114
Net asset value per share $9.76 $6.88 $10.78 $9.48 $1.00
Maximum public offering price $10.17 $7.17 $11.23 $9.88 -
Class B share capital $1,549,026 $10,382,702 $7,628,859 $3,768,662 $2,892,075
Shares of beneficial interest outstanding (Class B) 159,116 1,509,930 707,854 397,160 2,892,075
Net asset value per share $9.74 $6.88 $10.78 $9.49 $1.00
Class I share capital - $1,739,425 $1,065,969 $49,181,880 $31,071,207
Shares of beneficial interest outstanding (Class I) - 253,194 98,908 5,184,395 31,071,207
Net asset value per share - $6.87 $10.78 $9.49 $1.00
Unaudited Financial Statements
As of October 31, 2000
The AAL The AAL The AAL The AAL
Technology Stock Aggressive Growth Small Cap Stock Mid Cap Stock
Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------------------------------------
Investment Income
Dividends $2,875 $14,108 $557,069 $3,210,940
Taxable interest 49,774 139,457 494,412 2,090,867
Tax exempt interest - - - -
Foreign dividend withholding - (69) - -
---------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income $52,649 $153,496 $1,051,481 $5,301,807
=======================================================================================================================================
Expenses
Adviser fees $46,691 $18,338 $848,986 $2,954,339
Sub-Adviser fees - 40,344 - -
Administrative service and pricing fees 16,350 14,499 22,085 21,574
Amortization of organizational costs & registration fees - - 3,654 -
Audit and legal fees 4,953 4,953 11,760 10,944
Custody fees 7,747 6,890 11,147 23,086
Distribution expense Class A 9,400 12,548 271,142 1,052,692
Distribution expense Class B 5,769 5,354 136,971 155,801
Printing and postage expense Class A 14,038 14,039 10,722 84,268
Printing and postage expense Class B 2,948 2,947 2,834 8,339
Printing and postage expense Class I 590 433 46 94
SEC and state registration expense 125 125 18,417 24,218
Shareholder maintenance fees Class A 4,147 4,489 86,148 194,739
Shareholder maintenance fees Class B 462 466 17,047 17,600
Shareholder maintenance fees Class I 3 3 21 42
Transfer Agent fees Class A 15,411 15,820 294,401 685,684
Transfer Agent fees Class B 2,087 2,100 56,231 59,437
Transfer Agent fees Class I 312 308 82 154
Trustees fees and expenses 2,500 2,500 8,263 8,263
Other expenses 236 395 4,584 5,385
---------------------------------------------------------------------------------------------------------------------------------------
Total Expenses Before Reimbursement $133,769 $146,551 $1,804,541 $5,306,659
=======================================================================================================================================
Less Reimbursement from Advisor* - - - (9,356)
---------------------------------------------------------------------------------------------------------------------------------------
Total Net Expenses $133,769 $146,551 $1,804,541 $5,297,303
=======================================================================================================================================
Net Investment Income (Loss) $(81,120) $6,945 $(753,060) $4,504
=======================================================================================================================================
Realized and Unrealized Gains (Losses) on Investments and Foreign Currency
Net realized gains (losses) on investments $(804,794) $(147,946) $23,073,341 $54,919,735
Net realized gains (losses) on foreign currency transactions - - - -
Change in net unrealized appreciation/(depreciation) on
investments (2,760,710) (2,006,034) (2,552,588) 47,590,527
Change in net unrealized appreciation/(depreciation) on
foreign currency transactions - (6) - -
---------------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gains (losses) on
Investments and Foreign Currency $(3,565,504) $(2,153,986) $20,520,753 $102,510,262
=======================================================================================================================================
Net Increase (Decrease) in Net Assets From
Operations $(3,646,624) $(2,147,041) $19,767,693 $102,514,766
=======================================================================================================================================
The AAL The AAL The AAL The AAL The AAL
International Capital Growth Equity Income Balanced Small Cap
Fund Fund Fund Fund Index Fund II
---------------------------------------------------------------------------------------------------------------------------------------
Investment Income
Dividends $6,930,215 $18,353,980 $2,927,593 $627,629 $18,436
Taxable interest 187,229 12,447,398 625,310 5,411,020 5,953
Tax exempt interest - - - - -
Foreign dividend withholding (198,350) - - - -
---------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income $6,919,094 $30,801,378 $3,552,903 $6,038,649 $24,389
=======================================================================================================================================
Expenses
Adviser fees $314,386 $11,716,646 $682,823 $803,878 $7,347
Sub-Adviser fees 452,743 - - - -
Administrative service and pricing fees 30,143 21,229 21,370 24,351 14,178
Amortization of organizational costs &
registration fees 3,716 - - 7,459 -
Audit and legal fees 12,097 7,633 5,788 6,308 4,941
Custody fees 63,869 70,285 6,682 6,047 9,347
Distribution expense Class A 289,966 5,268,745 355,019 337,334 6,473
Distribution expense Class B 81,554 779,606 60,401 96,554 3,494
Printing and postage expense Class A 46,561 386,986 23,152 32,188 2,337
Printing and postage expense Class B 12,301 36,333 5,526 9,634 709
Printing and postage expense Class I 85 131 169 47 -
SEC and state registration expense 17,608 55,418 23,220 29,254 125
Shareholder maintenance fees Class A 83,285 513,797 57,839 42,565 875
Shareholder maintenance fees Class B 10,945 54,254 5,357 5,969 69
Shareholder maintenance fees Class I 25 98 42 18 -
Transfer Agent fees Class A 290,578 1,610,332 202,848 164,908 2,802
Transfer Agent fees Class B 37,097 149,060 18,057 23,727 385
Transfer Agent fees Class I 81 372 149 73 -
Trustees fees and expenses 8,263 8,263 8,263 8,264 2,500
Other expenses 4,584 47,255 4,570 908 226
---------------------------------------------------------------------------------------------------------------------------------------
Total Expenses Before Reimbursement $1,759,887 $20,726,443 $1,481,275 $1,599,486 $55,808
=======================================================================================================================================
Less Reimbursement from Advisor* - - - (24,745) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Net Expenses $1,759,887 $20,726,443 $1,481,275 $1,574,741 $55,808
=======================================================================================================================================
Net Investment Income (Loss) $5,159,207 $10,074,935 $2,071,628 $4,463,908 $(31,419)
=======================================================================================================================================
Realized and Unrealized Gains (Losses) on Investments and Foreign Currency
Net realized gains (losses) on investments $6,556,654 $257,716,028 $16,875,139 $(5,061) $174,041
Net realized gains (losses) on foreign currency
transactions (41,903) - - - -
Change in net unrealized appreciation/
(depreciation) on investments (38,543,290) (123,454,866) (2,292,944) 6,203,081 82,486
Change in net unrealized appreciation/
(depreciation) on foreign currency transactions (13,732) - - - -
---------------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gains (losses)
on Investments and Foreign Currency $(32,042,271) $134,261,162 $14,582,195 $6,198,020 $256,527
=======================================================================================================================================
Net Increase (Decrease) in Net Assets From
Operations $(26,883,064) $144,336,097 $16,653,823 $10,661,928 $225,108
=======================================================================================================================================
The AAL The AAL The AAL The AAL The AAL The AAL
Mid Cap Index Large Company High Yield Bond Municipal Bond Bond Money Market
Fund II Index Fund II Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------------------------
Investment Income
Dividends $34,316 $39,121 $27,562 $- $- $-
Taxable interest 7,878 10,688 7,497,736 1,098,001 13,757,141 12,888,695
Tax exempt interest - - - 12,881,068 - -
Foreign dividend withholding - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Total Investment Income $42,194 $49,809 $7,525,298 $13,979,069 $13,757,141 $12,888,695
===========================================================================================================================
Expenses
Adviser fees $8,600 $9,805 $279,689 $1,074,467 $846,665 $978,699
Sub-Adviser fees - - 121,029 - - -
Administrative service and pricing fees 13,819 13,999 23,659 35,807 23,820 21,738
Amortization of organizational
costs & registration - - 3,351 - - -
Audit and legal fees 4,940 4,940 13,319 9,024 11,489 5,345
Custody fees 10,932 12,042 5,105 11,053 8,079 9,000
Distribution expense Class A 7,617 8,814 165,873 586,372 404,630 229,267
Distribution expense Class B 3,932 3,962 55,791 37,731 18,615 11,344
Printing and postage expense Class A 2,338 2,340 7,253 25,015 83,734 154,362
Printing and postage expense Class B 709 709 5,630 1,709 1,251 2,397
Printing and postage expense Class I - - 49 85 73 286
SEC and state registration expense 125 125 18,820 21,801 19,106 37,732
Shareholder maintenance fees Class A 749 809 21,293 33,109 46,598 75,172
Shareholder maintenance fees Class B 93 107 3,126 1,189 1,153 698
Shareholder maintenance fees Class I - - 29 7 54 63
Transfer Agent fees Class A 2,015 3,042 65,958 120,656 171,036 379,844
Transfer Agent fees Class B 275 436 10,033 10,894 4,133 3,958
Transfer Agent fees Class I - - 104 36 262 259
Trustees fees and expenses 2,500 2,500 8,263 8,263 8,263 8,263
Other expenses 112 514 772 4,507 4,508 4,498
---------------------------------------------------------------------------------------------------------------------------
Total Expenses Before Reimbursement $58,756 $64,144 $809,146 $1,981,725 $1,653,469 $1,922,925
===========================================================================================================================
Less Reimbursement from Advisor* - - (42,138) (105,847) (94,050 (548,560)
---------------------------------------------------------------------------------------------------------------------------
Total Net Expenses $58,756 $64,144 $767,008 $1,875,878 $1,559,419 $1,374,365
===========================================================================================================================
Net Investment Income (Loss) $(16,562) $(14,335) $6,758,290 $12,103,191 $12,197,722 $11,514,330
===========================================================================================================================
Realized and Unrealized Gains (Losses) on Investments and Foreign Currency
Net realized gains (losses)
on investments $59,604 $(8,914) $(30,883,829) $(2,061,867) $(3,412,167 -
Net realized gains (losses)
on foreign currency transactions - - - - - -
Change in net unrealized appreciation/
(depreciation) on investments 342,224 (353,958) 19,585,376 17,098,475 10,147,000 -
Change in net unrealized appreciation/
(depreciation) on foreign currency
transactions - - - - - -
---------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gains
(losses) on Investments and
Foreign Currency $401,828 $(362,872) $(11,298,453) $15,036,608 $6,734,833 -
===========================================================================================================================
Net Increase (Decrease) in Net Assets
From Operations $385,266 $(377,207) $(4,540,163) $27,139,799 $18,932,555 $11,514,330
============================================================================================================================
*During the period ended October 31, 2000, the following Funds had class specific reimbursements: The AAL High Yield Bond Fund Class A $26,862 and Class B $13,074. The AAL Money Market Fund Class A $183,413 and Class B $1,296.
Unaudited Financial Statements
As of October 31, 2000
The AAL The AAL
Technology Aggressive The AAL The AAL Mid
Stock Fund Growth Fund Small Cap Stock Fund Cap Stock Fund
Period Ended Period Ended Year Ended Period Ended Year Ended
10/31/2000/1/ 10/31/2000/1/ 4/30/2000 10/31/2000 4/30/2000
=======================================================================================================================================
Operations
Net investment income (loss) $(81,120) $6,945 $(1,370,724) $(753,060) $(384,382)
Net realized gains (losses) on investments (804,794) (147,946) 27,239,356 23,073,341 138,456,655
Net realized gains (losses) on foreign
currency transactions - - - - -
Change in net unrealized appreciation/
(depreciation) on investments (2,760,710) (2,006,034) 22,792,468 (2,552,588) 28,736,447
Change in net unrealized appreciation/
(depreciation) on foreign currency transactions - (6) - - -
---------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $(3,646,624) $(2,147,041) $48,661,100 $19,767,693 $166,808,720
=======================================================================================================================================
Distributions to Shareholders
From net investment income Class A $ - $ - $ - $ - $ -
From net realized gains Class A - - - - (34,914,468)
From net investment income Class B - - - - -
From net realized gains Class B - - - - (1,151,451)
From net investment income Class I - - - - -
From net realized gains Class I - - - - (479,306)
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders $ - $ - $ - $ - $(36,545,225)
=======================================================================================================================================
Trust Share Transactions
Purchases of trust shares $36,363,340 $38,798,000 $59,067,184 $41,989,762 $106,374,149
Income dividends reinvested - - - - -
Capital gains distributions reinvested - - - - 36,309,432
Redemption of trust shares (1,045,416) (229,141) (23,356,357) (10,958,719) (78,862,531)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (Decrease) in Trust Capital $35,317,924 $38,568,859 $35,710,827 $31,031,043 $63,821,050
=======================================================================================================================================
Net Increase (Decrease) in Net Assets $31,671,300 $36,421,818 $84,371,927 $50,798,736 $194,084,545
=======================================================================================================================================
Net Assets Beginning of Period $ - $ - $132,588,730 $216,960,657 $608,306,545
=======================================================================================================================================
Net Assets End of Period $31,671,300 $36,421,818 $216,960,657 $267,759,393 $802,391,090
=======================================================================================================================================
Accumulated Undistributed Net
Investment Income $ (81,120) $6,945 $ - $(753,060) $ -
======================================================================================================================================
/1/ Since inception of the Fund, July 1, 2000
The AAL Mid The AAL The AAL The AAL
Cap Stock Fund International Fund Capital Growth Fund Equity Income Fund
Period Ended Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
=============================================================================================================================
Operations
Net investment income (loss) $4,504 $(143,424) $5,159,207 $13,086,665 $10,074,935 $3,602,500 $2,071,628
Net realized gains (losses)
on investments 54,919,735 15,848,124 6,556,654 6,702,727 257,715,670 781,925 16,875,139
Net realized gains (losses)
on foreign currency transactions - 171,554 (41,903) - - - -
Change in net unrealized appreciation/
(depreciation) on investments 47,590,527 20,721,106 (38,543,290) 340,231,707 (123,454,866) (6,887,666) (2,292,944)
Change in net unrealized appreciation/
(depreciation) on foreign currency
transactions - (133,788) (13,732) - - - -
-------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $102,514,766 $36,463,572 $(26,883,064) $360,021,099 $144,335,739 $(2,503,241) $16,653,823
===============================================================================================================================
Distributions to Shareholders
From net investment income Class A$ - $(50,305) $ - $(9,681,936) $(6,818,786) $(3,064,350) $(1,898,814)
From net realized gains Class A - - - (44,873,806) - - -
From net investment income Class B - - - - - (12,321) (19,675)
From net realized gains Class B - - - (1,533,271) - - -
From net investment income Class I - (5,210) - (338,713) (291,125) (182,620) (65,348)
From net realized gains Class I - - - (743,163) - - -
-------------------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders$ $(55,515) $ - $(57,170,889) $(7,109,911) $(3,259,291) $(1,983,837)
===============================================================================================================================
Trust Share Transactions
Purchases of trust shares $80,333,178 $71,663,481 $37,335,710 $580,899,089 $200,149,081 $64,587,532 $19,484,267
Income dividends reinvested - 52,133 - 9,870,705 6,977,647 3,049,427 1,910,575
Capital gains distributions reinvested - - - 46,578,713 - - -
Redemption of trust shares (37,415,561) (21,583,304) (20,421,829) (342,666,570) (205,603,963) (51,458,534) (22,346,146)
-------------------------------------------------------------------------------------------------------------------------------
Net increase (Decrease) in
Trust Capital $42,917,617 $50,132,310 $16,913,881 $294,681,937 $1,522,765 $16,178,425 $(951,304)
===============================================================================================================================
Net Increase (Decrease) in
Net Assets $145,432,383 $86,540,367 $(9,969,183) $597,532,147 $138,748,593 $10,415,893 $13,718,682
===============================================================================================================================
Net Assets Beginning of Period $802,391,090 $158,616,405 $245,156,772 $3,749,021,009 $4,346,553,156 $284,975,363 $295,391,256
===============================================================================================================================
Net Assets End of Period $947,823,473 $245,156,772 $235,187,589 $4,346,553,156 $4,485,301,749 $295,391,256 $309,109,938
===============================================================================================================================
Accumulated Undistributed Net
Investment Income $4,504 $(16,008) $5,143,199 $3,842,038 $6,807,062 $271,830 $359,621
===============================================================================================================================
The AAL The AAL The AAL
The AAL Small Cap Index Mid Cap Index Large Company
Balanced Fund Fund II Fund II Index Fund II
Period Ended Period Ended Period Ended Year Ended Period Ended
10/31/2000/1/ 10/31/2000/1/ 10/31/2000/1/ 4/30/2000 10/31/2000
================================================================================================================================
Operations
Net investment income (loss) $6,303,042 $4,463,908 $(31,419) $(16,562) $(14,335)
Net realized gains (losses) on investments (6,643,070) (5,061) 174,041 59,604 (8,914)
Net realized gains (losses) on foreign
currency transactions - - - - -
Change in net unrealized appreciation/
(depreciation) on investments 12,046,584 6,203,081 82,486 342,224 (353,958)
Change in net unrealized appreciation/
(depreciation) on foreign currency transactions - - -
--------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $11,706,556 $10,661,928 $225,108 $385,266 $(377,207)
================================================================================================================================
Distributions to Shareholders
From net investment income Class A $(5,670,014) $(4,155,109) $ - $ - $ -
From net realized gains Class A - - - - -
From net investment income Class B (259,063) (202,259) - - -
From net realized gains Class B - - - - -
From net investment income Class I (97,249) (54,214) - - -
From net realized gains Class I - - - - -
--------------------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders $(6,026,326) $(4,411,582) $ - $ - $ -
================================================================================================================================
Trust Share Transactions
Purchases of trust shares $131,147,830 $37,539,167 $11,159,761 $13,928,621 $17,858,586
Income dividends reinvested 5,923,264 4,323,892 - - -
Capital gains distributions reinvested - - - - -
Redemption of trust shares (37,844,785) (22,837,541) (117,713) (46,129) (113,122)
--------------------------------------------------------------------------------------------------------------------------------
Net increase (Decrease) in Trust Capital $99,226,309 $19,025,518 $11,042,048 $13,882,492 $17,745,464
================================================================================================================================
Net Increase (Decrease) in Net Assets $104,906,539 $25,275,864 $11,267,156 $14,267,758 $17,368,257
================================================================================================================================
Net Assets Beginning of Period $172,393,459 $277,299,998 $ - $ - $ -
================================================================================================================================
Net Assets End of Period $277,299,998 $302,575,862 $11,267,156 $14,267,758 $17,368,257
================================================================================================================================
Accumulated Undistributed Net
Investment Income $625,529 $677,855 $(31,419) $(16,562) $(14,335)
====================================================================================================================================
/1/ Since inception of the Fund, July 1, 2000
The AAL The AAL The AAL The AAL
High Yield Bond Fund Municipal Bond Fund Bond Fund Money Market Fund
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
===================================================================================================================================
Operations
Net investment income (loss) $15,572,821 $6,758,290 $24,810,765 $12,103,191 $24,433,240 $12,197,722 $16,537,988 $11,514,330
Net realized gains (losses)
on investments (9,329,800) (30,883,829) (11,809,196) (2,061,862) (19,781,025) (3,412,167) -
Net realized gains (losses) on foreign
currency transactions - - - - - - - -
Change in net unrealized appreciation/
(depreciation) on investments (17,289,446) 19,585,376 (35,797,247) 17,098,475 (5,434,062) 10,147,000 - -
Change in net unrealized appreciation/
(depreciation) on foreign currency
transactions - - - - - - - -
-----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting from Operations $(11,046,425) $(4,540,163) $(22,795,678) $27,139,804 $(781,847) $18,932,555 $16,537,988 $11,514,330
===================================================================================================================================
Distributions to Shareholders
From net investment income
Class A $(14,387,482) $(6,083,225) $(24,446,242) $(11,920,487) $(21,191,741) $(10,416,666) $(15,636,113) $(10,756,168)
From net realized gains Class A - - (678,042) - - - - -
From net investment income
Class B (1,196,399) (471,871) (318,581) (158,662) (179,845) (102,382) (82,120) (62,983)
From net realized gains Class B - - (10,986) - - - - -
From net investment income
Class I (256,402) (88,394) (45,942) (24,042) (3,061,654) (1,678,674) (819,755) (695,179)
From net realized gains Class I - - (1,444) - - - - -
-----------------------------------------------------------------------------------------------------------------------------------
Total Distributions to
Shareholders $(15,840,283) $(6,643,490) $(25,501,237) $(12,103,191) $(24,433,240) $(12,197,722) $(16,537,988) $(11,514,330)
===================================================================================================================================
Trust Share Transactions
Purchases of trust shares $51,360,947 $14,725,378 $52,506,368 $17,938,132 $51,732,978 $14,337,510 $491,464,470 $286,512,298
Income dividends reinvested 10,472,876 4,267,452 20,019,900 9,907,348 18,435,783 9,200,830 15,935,023 11,001,878
Capital gains distributions reinvested - - 584,946 (4) - - - -
Redemption of trust shares (33,679,487) (19,508,299) (86,739,407) (30,132,403) (86,711,595) (29,237,677) (451,836,917) (244,491,525)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (Decrease) in
Trust Capital $28,154,336 $(515,469) $(13,628,193) $(2,286,927) $(16,542,834) $(5,699,337) $55,562,576 $53,022,651
===================================================================================================================================
Net Increase (Decrease) in
Net Assets $1,267,628 $(11,699,122) $(61,925,108) $12,749,686 $(41,757,921) $1,035,496 $55,562,576 $53,022,651
===================================================================================================================================
Net Assets Beginning of
Period $146,540,770 $147,808,398 $531,142,400 $469,217,292 $415,017,710 $373,259,789 $307,697,169 $363,259,745
===================================================================================================================================
Net Assets End of Period $147,808,398 $136,109,276 $469,217,292 $481,966,978 $373,259,789 $374,295,285 $363,259,745 $416,282,396
===================================================================================================================================
Accumulated Undistributed Net
Investment Income $(245,549) $(130,749) $ - $ - $96,451 $96,451 $35,211 $35,211
===================================================================================================================================
Unaudited Financial Statements
As of October 31, 2000
(A) ORGANIZATION
The AAL Mutual Funds
(“Funds” or “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 currently
consists of the following Funds: The AAL Technology Stock Fund, The AAL
Aggressive Growth Fund, 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 Small Cap Index Fund II, The AAL Mid
Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL Large Company Index Fund,
The AAL Large Company Index Fund II, The AAL High Yield Bond Fund, The AAL
Municipal Bond Fund, The AAL Bond Fund, The AAL Bond Index Fund, The AAL Money
Market Fund, The AAL U.S. Government Zero Coupon Target Fund Series 2001, and
The AAL U.S. Government Zero Coupon Target Fund Series 2006.
The Trust offers three classes of shares, Class A shares have a front end sales load of 4.00 percent and a 0.25 percent 12b-1 fee. On January 8, 1997, The Trust began offering Class B shares. Class B shares are offered at net asset value and a one percent annual 12b-1 and service fee. In addition, Class B shares have a contingent deferred charge of five percent declining - one percent every year upon redemption after the first five years. Class B shares convert to Class A shares at the end of the fifth year. On December 29, 1997, The Trust began offering a third class of shares to institutional clients, Class I shares are offered at net asset value and have no annual 12b-1 fees.
All Funds of The Trust offer three classes of shares except for The AAL Small Cap Index II, The AAL Mid Cap Index II, and The AALLarge Company Index II, instead they offer classes A and B shares only. 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. The Trust offers institutional shares only for The AAL Mid Cap Index, The AAL Large Company Index, and The AAL Bond Index Fund. These Funds commenced operation as of December 31, 1999. The financial statements of these Funds are contained in a separate Semi-Annual Report. The Trust also includes The AAL US Government Zero Coupon Target 2001 and 2006 Funds. Both Funds are closed to investors. The financial statements of these Funds are also provided in a separate Semi-Annual Report.
(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 and The AAL Aggressive Growth
Fund invest 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
Funds’ 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 and The AAL Aggressive Growth Fund treat 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 as ordinary income.
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 and The AAL Aggressive Growth Fund may enter into forward currency contracts. Additionally, The AAL International Fund and The AAL Aggressive Growth 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 and The AAL Aggressive Growth Fund could be exposed to foreign currency fluctuations.
The Impact of Initial Public Offerings on Performance
The AAL Technology Stock,
Aggressive Growth, Small Cap Stock, Mid Cap Stock, International, Capital
Growth, Equity Income and Balanced Funds may invest in an initial public
offering (“IPO”) of a security. On occasion the Fund will participate
in an oversubscribed IPO. Because the IPO is oversubscribed, this presents the
Fund with the opportunity to “flip” or trade the security at higher
prices resulting in a profit for the Fund. However, participation in an IPO may
result in a loss for the Fund. Investments in IPO’s may have a magnified
performance impact on a Fund with a small asset base such as The AAL Technology
Stock Fund or The AAL Aggressive Growth Fund. A Fund may not experience similar
performance as its assets grow.
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 may utilize earnings and profits distributed to shareholders on the 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. The Funds are charged for those expenses that are directly attributed to each portfolio. Expenses that are not directly attributable to a portfolio are allocated among the Fund portfolios in proportion to their respective net assets, number of shareholder accounts or other reasonable basis. Class specific expenses, such as 12b-1 fees, transfer agent expenses, shareholder maintenance fees and printing and postage costs are charged to each Fund class of shares directly. Shared expenses, Adviser, custodian, professional expenses, etc., are allocated among the share classes based on asset size or by another reasonable basis. Net investment income, nonclass-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. 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, International, Technology Stock, Aggressive Growth, Small Cap Index Fund II, Mid Cap Index Fund II, and Large Company Index Fund II 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 accrued 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.
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, AAL International, AAL Balanced and AAL 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 Adviser”), under which each of the mutual fund portfolios pay a
fee for investment advisory services. Effective September 1, 2000, the annual
rates of fees as a percent of average daily net assets under the investment
advisory agreement were as follows:
$0 to $50 to $200 to $500 to $1,000M to Over
(M - Millions) $50M $200M $500M $1,000M $5,000M $5,000M
=================================================================================================================================
The AAL Technology Stock Fund 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
The AAL Aggressive Growth Fund 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%
The AAL Small Cap Stock Fund 0.70% 0.70% 0.65% 0.65% 0.65% 0.65%
The AAL Mid Cap Stock Fund 0.70% 0.70% 0.65% 0.65% 0.60% 0.60%
The AAL International Fund 0.65% 0.60% 0.60% 0.60% 0.60% 0.60%
The AAL Capital Growth Fund 0.65% 0.65% 0.65% 0.575% 0.50% 0.45%
The AAL Equity Income Fund 0.45% 0.45% 0.45% 0.45% 0.45% 0.45%
The AAL Balanced Fund 0.55% 0.55% 0.55% 0.55% 0.55% 0.55%
The AAL Small Cap Index Fund II 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
The AAL Mid Cap Index Fund II 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
The AAL Large Company Index Fund II 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
The AAL High Yield Bond Fund 0.55% 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% 0.45%
The AAL Bond Fund 0.45% 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% 0.45%
The AAL International Fund has entered into a sub-advisory agreement with Oechsle International Advisors, LLC, 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 AAL Aggressive Growth Fund has entered into a sub-advisory agreement with Janus Capital Corporation, which is paid 0.55% of 1% on the first $100 million of average daily net assets, 0.50% of 1% on the next $400 million of average daily net assets, and 0.45% of 1% on average daily net assets over $500 million (payable from the annual advisory fee paid to the advisor).
On June 21, 2000 at a special meeting of shareholders, the shareholders of The AAL High Yield Bond Fund approved a sub-advisory agreement with Pacific Investment Management Company (PIMCO) effective July 1, 2000. The sub advisory fee will be 0.25% of average daily net assets and (payable from the annual advisory fee paid to the advisor).
As of September 1, 2000, the Adviser voluntarily has waived 0.15% of the current fee of 0.45% in The AAL Bond Fund, 0.10% of the current fee of 0.45% in The AAL Municipal Bond Fund, 0.05% of the current fee of 0.55% in The AAL Balanced Fund and changed the current fee waiver for The AAL Money Market Fund from 0.225% to 0.075% to bring the effective advisory fee for this Fund to 0.425%. In addition, The Adviser is waiving all expenses in excess of 1.00 percent for Class A and 1.75 percent for Class B of The AAL High Yield Bond Fund. These waivers will be in effect through April 30, 2001, the end of the Funds current fiscal year.
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 31, 2000: $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; $13,333 for The AAL Aggressive Growth and Technology Stock Funds, $12,500 for The AAL Small Cap Index II, Mid Cap Index II and Large Company Index II 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 $3.75 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 Aggressive Growth, Technology Stock, Small Cap Stock, Mid Cap Stock, International, Capital Growth, Equity Income, Balanced, Small Cap Index II, Mid Cap Index II, Large Company Index II, 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 Aggressive Growth, Technology Stock, Small Cap Stock, Mid Cap Stock, International, Capital Growth, Equity Income, Balanced, Small Cap Index II, Mid Cap Index II, Large Company Index II, 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.
For the six months ending October 31, 2000, AAL Capital Management received $9,278,814 in commissions from the sales of Class A and B shares. Each Trustee of AAL who is not affiliated with AAL or the Adviser receives an annual fee from AAL for services as a Trustee and is eligible to participate in a deferred compensation plan with respect to these fees. Participants in the plan may designate their deferred Trustee’s fees as if invested in any one of the Funds. The value of each Trustee’s deferred compensation account will increase or decrease as if it were invested in shares of the selected Funds.
Those Trustees not participating in the above plan received $18,750 in fees for the six month period ended October 31, 2000. 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.
AAL is the ultimate parent company for AAL Capital Management Corporation.
(D) SECURITY TRANSACTIONS
During the fiscal year
ended April 30, 2000, and the period ended October 31, 2000, purchases and sales
of securities other than short-term obligations were as follows:
Purchases Sales
Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000
=================================================================================================================================
The AAL Technology Stock Fund N/A $35,614,375 N/A $3,309,963
The AAL Aggressive Growth Fund N/A 32,573,957 N/A 1,540,147
The AAL Small Cap Fund 254,904,932 182,393,904 254,904,932 157,617,631
The AAL Mid Cap Fund 929,500,735 583,488,677 934,809,515 545,488,187
The AAL International Fund 125,938,176 72,221,539 82,724,287 43,553,898
The AAL Capital Growth Fund 432,379,184 312,868,170 284,171,087 479,594,035
The AAL Equity Income Fund 88,388,561 56,377,088 75,699,225 60,587,582
The AAL Balanced Fund 208,113,894 104,663,074 126,946,055 95,263,486
The AAL Small Cap Index Fund II N/A 12,305,151 N/A 1,334,698
The AAL Mid Cap Index Fund II N/A 14,627,206 N/A 955,548
The AAL Large Company Index Fund II N/A 17,943,738 N/A 339,975
The AAL High Yield Bond Fund 97,423,097 93,772,440 75,614,537 102,782,559
The AAL Municipal Bond Fund 1,042.166,113 293,057,751 1,061,161,713 294,507,167
The AAL Bond Fund 611,991,901 254,508,693 642,507,665 243,584,223
For the year ended April 30, 2000, and period ended October 31, 2000, The AAL Bond Fund purchased $229,626,055 and $52,384,723 and sold $206,075,921 and $47,289,516 in U.S. Government Treasury Obligations.
For the year ended April 30, 2000, and period ended October 31, 2000, The AAL Municipal Bond Fund purchased $6,286,250 and $10,100,000 and sold $6,317,344 and $10,107,813 in U.S. Government Treasury Obligations.
For the year ended April 30, 2000, and period ended October 31, 2000, The AAL Balanced Fund purchased $45,203,047 and $18,198,969 and sold $44,118,281 and $15,262,477 in U.S. Government Treasury Obligations.
At April 30, 2000, the following funds had accumulated net realized capital loss carryovers expiring in the following years:
Fund 2007 2008 ================================================================================ International Fund $1,194,171 $ - Equity Income Fund 635,210 - Balanced Fund - 4,252,176 High Yield Bond 1,271,115 3,377,296 Municipal Bond Fund - 11,500,716 Bond Fund 2,246,041 18,513,786
To the extent that these funds realize net capital gain, taxable distribution will be offset by any unused capital loss carryover. The gross unrealized appreciation and depreciation on investments at year ended April 30, 2000 and the period ended October 31, 2000, were as follows:
April 30, 2000 October 31, 2000
Net Unrealized Net Unrealized
Appreciation Appreciation
Appreciation (Depreciation) (Depreciation) Appreciation (Depreciation) (Depreciation)
====================================================================================================================================
The AAL Technology Fund N/A N/A N/A $1,649,446 $(4,410,156) $(2,760,710)
The AAL Aggressive Growth Fund N/A N/A N/A 1,505,869 (3,511,903) (2,006,034)
The AAL Small Cap Stock Fund $43,581,020 $(15,946,362) $27,634,658 50,009,892 (24,927,822) 25,082,070
The AAL Mid Cap Stock Fund 148,747,162 (59,963,049) 88,784,113 181,310,194 (44,935,554) 136,374,640
The AAL International Fund 65,356,633 (18,620,022) 46,736,611 34,178,961 (25,999,582) 8,179,379
The AAL Capital Growth Fund 2,304,723,137 (57,847,026) 2,246,876,111 2,205,447,166 (82,025,921) 2,123,421,245
The AAL Equity Income Fund 78,706,730 (21,810,725) 56,896,005 73,599,681 (18,996,620) 54,603,061
The AAL Balanced Fund 34,090,041 (7,890,516) 26,199,525 39,046,381 (6,643,775) 32,402,606
The AAL Small Cap Index Fund II N/A N/A N/A 1,189,528 (1,107,042) 82,486
The AAL Mid Cap Index Fund II N/A N/A N/A 1,376,866 (1,034,642) 342,224
The AAL Large Company Index
Fund II N/A N/A N/A 1,235,862 (1,589,820) (353,958)
The AAL High Yield Bond Fund 1,636,475 (32,504,033) (30,867,558) 1,324,661 (12,606,843) (11,282,182)
The AAL Municipal Bond Fund 8,521,573 (10,667,735) (2,146,162) 18,242,776 (3,290,463) 14,952,313
The AAL Bond Fund 437,547 (9,609,978) (9,172,431) 4,718,566 (3,743,998) 974,568
(E) TRUST TRANSACTIONS
The AAL Technology Stock Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
=======================================================================================================================================
Shares purchased - 2,451,456 - 262,539 - 944,538
Income dividends reinvested - - - - - -
Capital gains reinvested - - - - - -
Shares redeemed - (96,119) - (575) - (10,068)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares - 2,355,337 - 261,964 - 934,470
The AAL Aggressive Growth Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
=======================================================================================================================================
Shares purchased - 2,947,184 - 253,271 - 791,020
Income dividends reinvested - - - - - -
Capital gains reinvested - - - - - -
Shares redeemed - (22,069) - (509) - (1,791)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares - 2,925,115 - 252,762 - 789,229
The AAL Small Cap Stock Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
=======================================================================================================================================
Shares purchased 4,154,530 2,495,309 429,368 205,756 32,456 33,466
Income dividends reinvested - - - - - -
Capital gains reinvested - - - - - -
Shares redeemed (1,691,268) (662,656) (173,969) (48,669) (37,198) (1,402)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares 2,463,262 1,832,653 255,399 157,087 (4,742) 32,064
The AAL Mid Cap Stock Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
=======================================================================================================================================
Shares purchased 5,727,110 3,759,285 426,397 270,104 719,803 407,833
Income dividends reinvested - - - - - -
Capital gains reinvested 2,368,789 - 80,834 - 32,495 -
Shares redeemed (4,849,281) (1,828,000) (90,663) (48,994) (233,097) (188,352)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares 3,246,618 1,931,285 416,568 221,110 519,201 219,481
The AAL International Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
=======================================================================================================================================
Shares purchased 4,743,916 2,488,593 327,374 163,143 44,947 63,680
Income dividends reinvested 3,316 - - - 154 -
Capital gains reinvested - - - - - -
Shares redeemed (1,563,061) (1,443,097) (65,023) (45,001) (8,062) (3,685)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares 3,184,171 1,045,496 262,351 118,142 37,039 59,995
The AAL Capital Growth Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
=======================================================================================================================================
Shares purchased 13,245,347 4,264,401 1,036,773 315,658 1,392,764 523,293
Income dividends reinvested 247,299 169,524 - - 7,861 5,991
Capital gains reinvested 1,152,379 - 40,529 - 16,564 -
Shares redeemed (8,426,901) (4,748,933) (184,700) (139,318) (587,267) (335,177)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares 6,218,124 (315,008) 892,602 176,340 829,922 194,107
The AAL Equity Income Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
=======================================================================================================================================
Shares purchased 4,045,299 1,110,876 232,818 49,001 250,597 169,969
Income dividends reinvested 205,607 125,086 842 1,314 6,445 4,315
Capital gains reinvested - - - - - -
Shares redeemed (2,834,370) (1,426,588) (80,023) (37,659) (725,217) (57,032)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares 1,416,536 (190,626) 153,637 12,656 (468,175) 117,252
The AAL Small Cap Index Fund II
Class A Shares Class B Shares
Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares
====================================================================================================
Shares purchased - 997,951 - 120,887
Income dividends reinvested - - - -
Capital gains reinvested - - - -
Shares redeemed - (11,248) - (496)
----------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares - 986,703 - 120,391
The AAL Mid Cap Index Fund II
Class A Shares Class B Shares
Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares
----------------------------------------------------------------------------------------------------
Shares purchased - 1,226,083 - 138,180
Income dividends reinvested - - - -
Capital gains reinvested - - - -
Shares redeemed - (4,381) - (29)
----------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares - 1,221,702 - 138,151
The AAL Large Company Index Fund II
Class A Shares Class B Shares
Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares
====================================================================================================
Shares purchased - 1,632,088 - 159,155
Income dividends reinvested - - - -
Capital gains reinvested - - - -
Shares redeemed - (11,518) - (39)
----------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares - 1,620,570 - 159,116
The AAL Balanced Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
=======================================================================================================================================
Shares purchased 10,067,804 2,815,252 572,465 155,382 131,811 21,906
Income dividends reinvested 453,027 324,146 20,768 15,978 7,667 4,239
Capital gains reinvested - - - - - -
Shares redeemed (2,906,737) (1,727,302) (98,557) (62,872) (84,052) (26,646)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares 7,614,094 1,412,096 494,676 108,488 55,426 (501)
The AAL High Yield Bond Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
==============================================================================================================================
Shares purchased 5,963,964 1,936,609 328,346 74,073 58,038 19,534
Income dividends reinvested 1,200,651 552,330 88,298 36,935 21,383 5,521
Capital gains reinvested - - - - - -
Shares redeemed (3,904,332) (2,513,395) (251,897) (155,225) (63,263) (35,867)
------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares 3,260,283 (24,456) 164,747 (44,217) 16,158 (10,812)
The AAL Municipal Bond Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
==============================================================================================================================
Shares purchased 4,614,917 1,606,248 148,758 42,250 91,403 47,266
Income dividends reinvested 1,850,298 917,653 24,774 12,117 4,060 2,168
Capital gains reinvested 54,652 - 921 - 137 -
Shares redeemed (7,961,893) (2,790,181) (123,626) (49,767) (91,981) (2,688)
------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares (1,442,026) (266,280) 50,827 4,600 3,619 46,746
The AAL Bond Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
==============================================================================================================================
Shares purchased 4,204,136 1,313,279 150,780 49,348 1,057,101 160,843
Income dividends reinvested 1,854,706 932,208 15,651 9,002 70,675 35,428
Capital gains reinvested - - - - - -
Shares redeemed (8,539,436) (2,903,545) (90,400) (49,665) (488,998) (154,998)
------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares (2,480,594) (658,058) 76,031 8,685 638,778 41,273
The AAL Money Market Fund
Class A Shares Class B Shares Class I Shares
Year Ended Period Ended Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000 4/30/2000 10/31/2000
Shares Shares Shares Shares Shares Shares
==============================================================================================================================
Shares purchased 430,294,001 231,534,944 3,165,036 1,651,730 58,005,433 53,325,624
Income dividends reinvested 15,198,578 10,627,819 80,022 62,276 656,423 311,783
Capital gains reinvested - - - - - -
Shares redeemed (385,589,125) (207,890,402) (2,446,764) (1,248,495) (63,801,028) (35,352,628)
------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in trust shares 59,903,454 34,272,361 798,294 465,511 (5,139,172) 18,284,779
(F) Forward Currency Contracts
As of October 31, 2000 The AAL International Fund had entered into forward currency contracts, as summarized below, resulting in net
unrealized depreciation of $(14,359)
Settlement Date Currency to U.S. Value at Currency to U.S. Value at
Through Be Delivered October 31, 2000 Be Received October 31, 2000
=======================================================================================================================================
11/1/00 (17,823) EURO $ (14,997) $14,997 U.S. Dollar $ (15,108)
11/3/00 (41,625) EURO (35,340) 35,340 U.S. Dollar (35,285)
11/1/00 5,365,190 U.S. Dollar 49,358 49,358 Japanese Yen 49,138
11/10/00 132,860,000 U.S. Dollar 1,230,902 1,230,903 Japanese Yen 1,216,819
---------------------------------------------------------------------------------------------------------------------------------------
$1,229,923 $1,215,564
=======================================================================================================================================
Unaudited Financial 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 Investment 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.
/1/ The interest rate reflects the discount rate at the date of purchase.
/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 certificates 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. 144A securities
are for institutional or accredited investors, such as mutual funds.
/7/ Step-coupon bond - a debt instrument that pays a fixed rate for an initial
period, then increases to a higher rate after a period of time.
Per Share Information
The AAL Technology Stock Fund
Period Ended
CLASS A SHARES 10/31/2000 (c)
================================================================================
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) (0.03)
Net realized and unrealized gain (loss) on investments (1.07)
--------------------------------------------------------------------------------
Total from Investment Operations (1.10)
================================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
--------------------------------------------------------------------------------
Total Distributions -
================================================================================
Net increase (decrease) in net asset value (1.10)
Net asset value: End of period $8.90
================================================================================
Total return (b) (11.00)%
Net assets, end of period (in millions) $21.0
Ratio of expenses to average net assets (a) 2.40%
Ratio of net investment income (loss) to average
net assets (a) (1.57)%
Portfolio turnover rate 20.09%
================================================================================
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) 2.40%
Ratio of net investment income (loss) to average
net assets (a) (1.57)%
Period Ended
CLASS B SHARES 10/31/2000 (c)
================================================================================
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) (0.05)
Net realized and unrealized gain (loss) on investments (1.06)
--------------------------------------------------------------------------------
Total from Investment Operations (1.11)
================================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
--------------------------------------------------------------------------------
Total Distributions -
================================================================================
Net increase (decrease) in net asset value (1.11)
Net asset value: End of period $8.89
================================================================================
Total return (b) (11.10)%
Net assets, end of period (in millions) $2.3
Ratio of expenses to average net assets (a) 3.29%
Ratio of net investment income (loss) to average
net assets (a) (2.45)%
Portfolio turnover rate 20.09%
================================================================================
If the Fund had paid all of their expenses without the adviser's voluntary expen
reimbursement, the ratios would have been as follows:
Ratio of expenses to average net assets (a) 3.29%
Ratio of net investment income (loss) to average
net assets (a) (2.45)%
Period Ended
CLASS I SHARES 10/31/2000 (c)
================================================================================
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (0.01)
Net realized and unrealized gain (loss) on investments (1.04)
--------------------------------------------------------------------------------
Total from Investment Operations (1.05)
================================================================================
Less Distributions from:
Net investment income (loss) -
Net realized capital gains -
--------------------------------------------------------------------------------
Total Distributions -
================================================================================
Net increase (decrease) in net asset value (1.05)
Net asset value: End of period $8.95
================================================================================
Total return (b) (10.50)%
Net assets, end of period (in millions) $8.4
Ratio of expenses to average net assets (a) 1.21%
Ratio of net investment income (loss) to average net
assets (a) (0.35)%
Portfolio turnover rate 20.09%
================================================================================
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) 1.21%
Ratio of net investment income (loss) to average net
assets (a) (0.35)%
(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.
(c) Since inception July 1, 2000.
The AAL Aggressive Growth Fund
Period Ended
CLASS A SHARES 10/31/2000 (c)
----------------------------------------------------------------------------
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) -
Net realized and unrealized gain (loss) on investments (0.83)
----------------------------------------------------------------------------
Total from Investment Operations (0.83)
============================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
----------------------------------------------------------------------------
Total Distributions -
============================================================================
Net increase (decrease) in net asset value (0.83)
Net asset value: End of period $9.17
============================================================================
Total return (b) (8.30)%
Net assets, end of period (in millions) $26.8
Ratio of expenses to average net assets (a) 2.06%
Ratio of net investment income (loss) to average net
assets (a) (0.14)%
Portfolio turnover rate 9.54%
============================================================================
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) 2.06%
Ratio of net investment income (loss) to average net
assets (a) (0.14)%
Period Ended
CLASS B SHARES 10/31/2000 (c)
============================================================================
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) (0.02)
Net realized and unrealized gain (loss) on investments (0.83)
----------------------------------------------------------------------------
Total from Investment Operations (0.85)
============================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
----------------------------------------------------------------------------
Total Distributions -
============================================================================
Net increase (decrease) in net asset value (0.85)
Net asset value: End of period $9.15
============================================================================
Total return (b) (8.50)%
Net assets, end of period (in millions) $2.3
Ratio of expenses to average net assets (a) 3.15%
Ratio of net investment income (loss) to average net
assets (a) (1.02)%
Portfolio turnover rate 9.54%
============================================================================
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) 3.15%
Ratio of net investment income (loss) to average net
assets (a) (1.02)%
Period Ended
CLASS I SHARES 10/31/2000 (c)
=========================================================================
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income 0.03
Net realized and unrealized gain (loss) on investments (0.82)
-------------------------------------------------------------------------
Total from Investment Operations (0.79)
=========================================================================
Less Distributions from:
Net investment income (loss) -
Net realized capital gains -
-------------------------------------------------------------------------
Total Distributions -
=========================================================================
Net increase (decrease) in net asset value (0.79)
Net asset value: End of period $9.21
=========================================================================
Total return (b) (7.90)%
Net assets, end of period (in millions) $7.3
Ratio of expenses to average net assets (a) 1.23%
Ratio of net investment income (loss) to average net
assets (a) 1.08%
Portfolio turnover rate 9.54%
=========================================================================
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) 1.23%
Ratio of net investment income (loss) to average net
assets (a) 1.08%
(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.
(c) Since inception July 1, 2000.
The AAL Small Cap Stock Fund
Period Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
================================================================================================================================
Net asset value:Beginning of Period $14.60 $10.89 $13.84 $9.84 $10.00
Income from Investment Operations
Net investment income (loss) (0.04) (0.08) (0.12) (0.10) (0.06)
Net realized and unrealized gain (loss) on investments 1.31 3.79 (2.51) 4.73 0.17
--------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.27 3.71 (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 1.27 3.71 (2.95) 4.00 (0.16)
Net asset value: End of period $15.87 $14.60 $10.89 $13.84 $9.84
================================================================================================================================
Total return (b) 8.70% 34.07% (18.97)% 47.97% (0.78)%
Net assets, end of period (in millions) $237.1 $191.3 $116.0 $120.3 $44.5
Ratio of expenses to average net assets (a) 1.37% 1.53% 1.82% 1.71% 2.06%
Ratio of net investment income (loss) to average
net assets (a) (0.51)% (0.72)% (1.15)% (1.05)% (1.20)%
Portfolio turnover rate 67.74% 147.01% 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) 1.37% 1.65% 1.82% 1.71% 2.06%
Ratio of net investment income (loss) to average
net assets (a) (0.51)% (0.85)% (1.15)% (1.05)% (1.20)%
Period Ended Year Ended Year Ended Year Ended Year Ended
CLASS B SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
================================================================================================================================
Net asset value:Beginning of Period $14.24 $10.74 $13.73 $9.81 $11.17
Income from Investment Operations
Net investment income (loss) (0.11) (0.19) (0.22) (0.16) (0.03)
Net realized and unrealized gain (loss) on investments 1.27 3.69 (2.50) 4.67 (1.33)
--------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.16 3.50 (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 1.16 3.50 (2.99) 3.92 (1.36)
Net asset value: End of period $15.40 $14.24 $10.74 $13.73 $9.81
================================================================================================================================
Total return (b) 8.15% 32.71% (19.85)% 46.86% (12.18)%
Net assets, end of period (in millions) $29.1 $24.6 $15.8 $14.4 $3.4
Ratio of expenses to average net assets (a) 2.31% 2.56% 2.89% 2.60% 3.20%
Ratio of net investment income (loss) to average
net assets (a) (1.46)% (1.76)% (2.22)% (1.94)% (2.39)%
Portfolio turnover rate 67.74% 147.01% 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) 2.31% 2.68% 2.89% 2.60% 3.21%
Ratio of net investment income (loss) to average
net assets (a) (1.46)% (1.88)% (2.22)% (1.94)% (2.40)%
Period Ended Year Ended Year Ended Year Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
================================================================================================================================
Net asset value:Beginning of Period $14.80 $10.95 $13.87 $12.45
Income from Investment Operations
Net investment income 0.01 0.01 (0.04) (0.01)
Net realized and unrealized gain (loss) on investments 1.32 3.84 (2.52) 1.43
--------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.33 3.85 (2.56) 1.42
================================================================================================================================
Less Distributions from:
Net investment income (loss) - - - -
Net realized capital gains - - (0.36) -
--------------------------------------------------------------------------------------------------------------------------------
Total Distributions - - (0.36) -
================================================================================================================================
Net increase (decrease) in net asset value 1.33 3.85 (2.92) 1.42
Net asset value: End of period $16.13 $14.80 $10.95 $13.87
================================================================================================================================
Total return (b) 8.99% 35.16% (18.41)% 11.41%
Net assets, end of period (in millions) $1.6 $1.0 $0.8 $0.4
Ratio of expenses to average net assets (a) 0.78% 0.72% 1.08% 1.19%
Ratio of net investment income (loss) to average
net assets (a) 0.07% 0.08% (0.40)% (0.39)%
Portfolio turnover rate 67.74% 147.01% 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) 0.78% 0.84% 1.08% 1.19%
Ratio of net investment income (loss) to average
net assets (a) 0.07% (0.04)% (0.40)% (0.39)%
(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 Mid Cap Stock Fund
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997 4/30/1996
=======================================================================================================================================
Net asset value:Beginning of Period $16.73 $13.89 $15.93 $12.71 $17.11 $10.92
Income from Investment Operations
Net investment income (loss) - - (0.04) (0.04) (0.12) (0.10)
Net realized and unrealized gain (loss) on investments 2.11 3.67 (1.25) 4.75 (1.63) 6.29
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.11 3.67 (1.29) 4.71 (1.75) 6.19
=======================================================================================================================================
Less Distributions from:
Net investment income - - - - - -
Net realized capital gains - (0.83) (0.75) (1.49) (2.65) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions - (0.83) (0.75) (1.49) (2.65) -
=======================================================================================================================================
Net increase (decrease) in net asset value 2.11 2.84 (2.04) 3.22 (4.40) 6.19
Net asset value: End of period $18.84 $16.73 $13.89 $15.93 $12.71 $17.11
=======================================================================================================================================
Total return (b) 12.61% 27.29% (7.62)% 38.73% (11.08)% 56.59%
Net assets, end of period (in millions) $890.8 $759.0 $584.9 $671.5 $461.7 $425.0
Ratio of expenses to average net assets (a) 1.16% 1.14% 1.37% 1.30% 1.35% 1.39%
Ratio of net investment income (loss) to average
net assets (a) 0.03% (0.02)% (0.28)% (0.27)% (0.94)% (0.82)%
Portfolio turnover rate 66.14% 142.26% 125.94% 104.73% 112.60% 90.14%
=======================================================================================================================================
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) 1.16% 1.24% 1.37% 1.30% 1.35% 1.39%
Ratio of net investment income (loss) to average
net assets (a) 0.03% (0.12)% (0.28)% (0.27)% (0.94)% (0.82)%
Period Ended Year Ended Year Ended Year Ended Year Ended
CLASS B SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
=======================================================================================================================================
Net asset value:Beginning of Period $16.20 $13.64 $15.78 $12.69 $13.67
Income from Investment Operations
Net investment income (loss) (0.09) (0.17) (0.17) (0.12) (0.03)
Net realized and unrealized gain (loss) on investments 2.03 3.56 (1.27) 4.65 (0.95)
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.94 3.39 (1.44) 4.53 (0.98)
=======================================================================================================================================
Less Distributions from:
Net investment income - - - - -
Net realized capital gains - (0.83) (0.70) (1.44) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions - (0.83) (0.70) (1.44) -
=======================================================================================================================================
Net increase (decrease) in net asset value 1.94 2.56 (2.14) 3.09 (0.98)
Net asset value: End of period $18.14 $16.20 $13.64 $15.78 $12.69
=======================================================================================================================================
Total return (b) 11.98% 25.71% (8.70)% 37.41% (7.17)%
Net assets, end of period (in millions) $34.2 $26.9 $17.0 $13.6 $3.3
Ratio of expenses to average net assets (a) 2.23% 2.46% 2.56% 2.33% 2.29%
Ratio of net investment income (loss) to average
net assets (a) (1.04)% (1.33)% (1.46)% (1.30)% (1.41)%
Portfolio turnover rate 66.14% 142.26% 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) 2.23% 2.55% 2.56% 2.33% 2.29%
Ratio of net investment income (loss) to average
net assets (a) (1.04)% (1.43)% (1.46)% (1.30)% (1.41)%
Period Ended Year Ended Year Ended Year Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
=======================================================================================================================================
Net asset value:Beginning of Period $16.89 $13.94 $15.96 $14.40
Income from Investment Operations
Net investment income 0.04 0.05 0.02 -
Net realized and unrealized gain (loss) on investments 2.13 3.73 (1.25) 1.56
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.17 3.78 (1.23) 1.56
=======================================================================================================================================
Less Distributions from:
Net investment income (loss) - - - -
Net realized capital gains - (0.83) (0.79) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions - (0.83) (0.79) -
=======================================================================================================================================
Net increase (decrease) in net asset value 2.17 2.95 (2.02) 1.56
Net asset value: End of period $19.06 $16.89 $13.94 $15.96
=======================================================================================================================================
Total return (b) 12.78% 28.00% (7.17)% 10.83%
Net assets, end of period (in millions) $22.8 $16.5 $6.4 $1.2
Ratio of expenses to average net assets (a) 0.68% 0.62% 0.85% 0.86%
Ratio of net investment income (loss) to average
net assets (a) 0.51% 0.51% 0.33% 0.18%
Portfolio turnover rate 66.14% 142.26% 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) 0.69% 0.71% 0.85% 0.86%
Ratio of net investment income (loss) to average
net assets (a) 0.51% 0.41% 0.37% 0.18%
(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 International Fund
Period Ended Year Ended Year Ended Year Ended Year Ended Period Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997 4/30/1996
=======================================================================================================================================
Net asset value:Beginning of Period $14.06 $11.35 $11.15 $11.37 $11.08 $10.00
Income from Investment Operations
Net investment income (loss) 0.28 - 0.08 0.17 0.01 0.05
Net realized and unrealized gain (loss) on investments(1.73) 2.71 0.65 0.56 0.68 1.05
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (1.45) 2.71 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 (1.45) 2.71 0.20 (0.22) 0.29 1.08
Net asset value: End of period $12.61 $14.06 $11.35 $11.15 $11.37 $11.08
=======================================================================================================================================
Total return (b) (10.31)% 23.91% 6.82% 7.34% 6.32% 11.07%
Net assets, end of period (in millions) $216.5 $226.7 $146.9 $144.2 $116.2 $57.1
Ratio of expenses to average net assets (a) 1.33% 1.36% 1.74% 1.91% 2.10% 2.15%
Ratio of net investment income (loss) to average
net assets (a) 4.17% (0.01)% 0.64% 1.36% 0.88% 0.94%
Portfolio turnover rate 18.11% 43.59% 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) 1.33% 1.41% 1.74% 1.91% 2.10% 2.32%
Ratio of net investment income (loss) to average
net assets (a) 4.17% (0.07)% 0.64% 1.36% 0.88% 0.77%
Period Ended Year Ended Year Ended Year Ended Period Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
=======================================================================================================================================
Net asset value:Beginning of Period $13.75 $11.23 $11.05 $11.34 $10.98
Income from Investment Operations
Net investment income (loss) 0.20 (0.13) (0.03) 0.13 -
Net realized and unrealized gain (loss) on investments (1.69) 2.65 0.64 0.49 0.36
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (1.49) 2.52 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 (1.49) 2.52 0.18 (0.29) 0.36
Net asset value: End of period $12.26 $13.75 $11.23 $11.05 $11.34
=======================================================================================================================================
Total return (b) (10.84)% 22.44% 5.72% 6.30% 3.28%
Net assets, end of period (in millions) $15.4 $15.6 $9.8 $7.9 $2.6
Ratio of expenses to average net assets (a) 2.46% 2.53% 2.85% 2.90% 2.94%
Ratio of net investment income (loss) to average
net assets (a) 3.02% (1.19)% (0.52)% 0.34% (0.03)%
Portfolio turnover rate 18.11% 43.59% 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) 2.46% 2.59% 2.85% 2.90% 2.94%
Ratio of net investment income (loss) to average
net assets (a) 3.02% (1.25)% (0.52)% 0.34% (0.03)%
Period Ended Year Ended Year Ended Period Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
=======================================================================================================================================
Net asset value:Beginning of Period $14.15 $11.37 $11.17 $10.11
Income from Investment Operations
Net investment income 0.29 0.08 0.15 0.03
Net realized and unrealized gain (loss) on investments (1.71) 2.73 0.65 1.03
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (1.42) 2.81 0.80 1.06
=======================================================================================================================================
Less Distributions from:
Net investment income (loss) - (0.03) (0.51) -
Net realized capital gains - - (0.09) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions - (0.03) (0.60) -
=======================================================================================================================================
Net increase (decrease) in net asset value (1.42) 2.78 0.20 1.06
Net asset value: End of period $12.73 $14.15 $11.37 $11.17
=======================================================================================================================================
Total return (b) (10.04)% 24.69% 7.49% 10.48%
Net assets, end of period (in millions) $3.3 $2.8 $1.9 $0.5
Ratio of expenses to average net assets (a) 0.73% 0.73% 1.09% 1.19%
Ratio of net investment income (loss) to average
net assets (a) 4.66% 0.61% 1.10% 2.38%
Portfolio turnover rate 18.11% 43.59% 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) 0.73% 0.79% 1.09% 1.19%
Ratio of net investment income (loss) to average
net assets (a) 4.66% 0.55% 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.
The AAL Capital Growth Fund
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997 4/30/1996
=======================================================================================================================================
Net asset value:Beginning of Period $38.67 $35.87 $29.64 $21.50 $18.79 $15.56
Income from Investment Operations
Net investment income (loss) 0.09 0.13 0.09 0.10 0.13 0.20
Net realized and unrealized gain (loss) on investments 1.19 3.19 6.69 9.26 3.68 3.76
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.28 3.32 6.78 9.36 3.81 3.96
=======================================================================================================================================
Less Distributions from:
Net investment income (0.06) (0.09) (0.09) (0.08) (0.15) (0.22)
Net realized capital gains - (0.43) (0.46) (1.14) (0.95) (0.51)
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.06) (0.52) (0.55) (1.22) (1.10) (0.73)
=======================================================================================================================================
Net increase (decrease) in net asset value 1.22 2.80 6.23 8.14 2.71 3.23
Net asset value: End of period $39.89 $38.67 $35.87 $29.64 $21.50 $18.79
=======================================================================================================================================
Total return (b) 3.32% 9.28% 23.20% 44.48% 20.55% 25.85%
Net assets, end of period (in millions) $4,232.5 $4,115.1 $3,594.5 $2,766.7 $1,794.4 $1,381.4
Ratio of expenses to average net assets (a) 0.90% 0.90% 0.97% 0.98% 1.06% 1.12%
Ratio of net investment income (loss) to average
net assets (a) 0.48% 0.35% 0.30% 0.39% 0.62% 1.16%
Portfolio turnover rate 7.70% 7.50% 8.74% 17.96% 24.30% 44.26%
=======================================================================================================================================
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) 0.90% 0.92% 0.97% 0.98% 1.06% 1.12%
Ratio of net investment income (loss) to average
net assets (a) 0.48% 0.33% 0.30% 0.39% 0.62% 1.16%
Period Ended Year Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
======================================================================================================================
Net asset value:Beginning of Period $37.71 $35.29 $29.38 $21.45 $20.66
Income from Investment Operations
Net investment income (loss) (0.09) (0.22) (0.19) 0.04 (0.01)
Net realized and unrealized gain (loss) on investments 1.15 3.07 6.56 9.06 0.80
----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.06 2.85 6.37 9.10 0.79
======================================================================================================================
Less Distributions from:
Net investment income - - - (0.03) -
Net realized capital gains - (0.43) (0.46) (1.14) -
----------------------------------------------------------------------------------------------------------------------
Total Distributions - (0.43) (0.46) (1.17) -
======================================================================================================================
Net increase (decrease) in net asset value 1.06 2.42 5.91 7.93 0.79
Net asset value: End of period $38.77 $37.71 $35.29 $29.38 $21.45
======================================================================================================================
Total return (b) 2.78% 8.09% 21.94% 43.25% 3.82%
Net assets, end of period (in millions) $159.6 $148.6 $107.6 $54.9 $11.0
Ratio of expenses to average net assets (a) 1.84% 1.95% 1.99% 1.90% 1.89%
Ratio of net investment income (loss) to average
net assets (a) (0.46)% (0.69)% (0.74)% (0.58)% (0.39)%
Portfolio turnover rate 7.70% 7.50% 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) 1.84% 1.96% 1.99% 1.90% 1.89%
Ratio of net investment income (loss) to average
net assets (a) (0.46)% (0.71)% (0.74)% (0.58)% (0.39)%
Period Ended Year Ended Year Ended Period Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
======================================================================================================================
Net asset value:Beginning of Period $38.72 $35.89 $29.67 $26.05
Income from Investment Operations
Net investment income 0.17 0.27 0.21 0.02
Net realized and unrealized gain (loss) on investments 1.19 3.20 6.67 3.60
----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.36 3.47 6.88 3.62
======================================================================================================================
Less Distributions from:
Net investment income (loss) (0.13) (0.21) (0.20) -
Net realized capital gains - (0.43) (0.46) -
----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.13) (0.64) (0.66) -
======================================================================================================================
Net increase (decrease) in net asset value 1.23 2.83 6.22 3.62
Net asset value: End of period $39.95 $38.72 $35.89 $29.67
======================================================================================================================
Total return (b) 3.52% 9.70% 23.55% 13.90%
Net assets, end of period (in millions) $93.2 $82.8 $46.9 $3.0
Ratio of expenses to average net assets (a) 0.54% 0.52% 0.60% 0.58%
Ratio of net investment income (loss) to average
net assets (a) 0.85% 0.73% 0.62% 0.52%
Portfolio turnover rate 7.70% 7.50% 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% 0.54% 0.60% 0.58%
Ratio of net investment income (loss) to average
net assets (a) 0.85% 0.72% 0.62% 0.52%
(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 Equity Income Fund
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997 4/30/1996
=======================================================================================================================================
Net asset value:Beginning of Period $14.40 $14.68 $14.31 $11.34 $10.90 $9.47
Income from Investment Operations
Net investment income (loss) 0.10 0.18 0.16 0.27 0.39 0.36
Net realized and unrealized gain (loss) on investments 0.71 (0.30) 1.17 3.44 0.46 1.42
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.81 (0.12) 1.33 3.71 0.85 1.78
=======================================================================================================================================
Less Distributions from:
Net investment income (0.10) (0.16) (0.17) (0.29) (0.41) (0.35)
Net realized capital gains - - (0.79) (0.45) - -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.10) (0.16) (0.96) (0.74) (0.41) (0.35)
=======================================================================================================================================
Net increase (decrease) in net asset value 0.71 (0.28) 0.37 2.97 0.44 1.43
Net asset value: End of period $15.11 $14.40 $14.68 $14.31 $11.34 $10.90
=======================================================================================================================================
Total return (b) 5.64% (0.80)% 10.08% 33.50% 7.88% 18.90%
Net assets, end of period (in millions) $288.5 $277.6 $262.2 $197.7 $134.2 $114.5
Ratio of expenses to average net assets (a) 0.94% 0.92% 1.05% 1.11% 1.15% 1.20%
Ratio of net investment income (loss) to average
net assets (a) 1.40% 1.24% 1.22% 2.17% 3.57% 3.58%
Portfolio turnover rate 19.87% 26.93% 13.35% 64.00% 5.14% 21.79%
=======================================================================================================================================
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) 0.94% 0.98% 1.05% 1.11% 1.15% 1.20%
Ratio of net investment income (loss) to average
net assets (a) 1.40% 1.18% 1.22% 2.17% 3.57% 3.58%
Period Ended Year Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
=======================================================================================================================================
Net asset value:Beginning of Period $14.38 $14.66 $14.31 $11.37 $11.40
Income from Investment Operations
Net investment income (loss) 0.02 0.02 0.02 0.19 0.05
Net realized and unrealized gain (loss) on investments 0.71 (0.28) 1.17 3.41 (0.06)
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.73 (0.26) 1.19 3.60 (0.01)
=======================================================================================================================================
Less Distributions from:
Net investment income (0.02) (0.02) (0.05) (0.21) (0.02)
Net realized capital gains - - (0.79) (0.45) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.02) (0.02) (0.84) (0.66) (0.02)
=======================================================================================================================================
Net increase (decrease) in net asset value 0.71 (0.28) 0.35 2.94 (0.03)
Net asset value: End of period $15.09 $14.38 $14.66 $14.31 $11.37
=======================================================================================================================================
Total return (b) 5.11% (1.80)% 8.97% 32.42% (0.04)%
Net assets, end of period (in millions) $12.4 $11.6 $9.6 $3.8 $0.5
Ratio of expenses to average net assets (a) 2.00% 1.99% 2.09% 2.04% 1.99%
Ratio of net investment income (loss) to average
net assets (a) 0.34% 0.17% 0.16% 0.96% 2.36%
Portfolio turnover rate 19.87% 26.93% 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) 2.00% 2.05% 2.09% 2.04% 1.99%
Ratio of net investment income (loss) to average
net assets (a) 0.34% 0.11% 0.16% 0.96% 2.36%
Period Ended Year Ended Year Ended Period Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
=======================================================================================================================================
Net asset value:Beginning of Period $14.43 $14.70 $14.32 $13.14
Income from Investment Operations
Net investment income 0.13 0.31 0.21 0.08
Net realized and unrealized gain (loss) on investments 0.71 (0.35) 1.19 1.16
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.84 (0.04) 1.40 1.24
=======================================================================================================================================
Less Distributions from:
Net investment income (loss) (0.13) (0.23) (0.23) (0.06)
Net realized capital gains - - (0.79) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.13) (0.23) (1.02) (0.06)
=======================================================================================================================================
Net increase (decrease) in net asset value 0.71 (0.27) 0.38 1.18
Net asset value: End of period $15.14 $14.43 $14.70 $14.32
=======================================================================================================================================
Total return (b) 5.86% (0.29)% 10.62% 9.34%
Net assets, end of period (in millions) $8.2 $6.2 $13.2 $7.1
Ratio of expenses to average net assets (a) 0.50% 0.46% 0.60% 0.68%
Ratio of net investment income (loss) to average
net assets (a) 1.85% 1.71% 1.65% 2.10%
Portfolio turnover rate 19.87% 26.93% 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) 0.50% 0.52% 0.60% 0.68%
Ratio of net investment income (loss) to average
net assets (a) 1.85% 1.65% 1.65% 2.10%
(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 Balanced Fund
Period Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
=======================================================================================================================================
Net asset value:Beginning of Period $12.41 $12.15 $10.81 $10.00
Income from Investment Operations
Net investment income (loss) 0.19 0.32 0.21 0.04
Net realized and unrealized gain (loss) on investments 0.27 0.25 1.34 0.80
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.46 0.57 1.55 0.84
=======================================================================================================================================
Less Distributions from:
Net investment income (0.19) (0.31) (0.20) (0.03)
Net realized capital gains - - (0.01) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.19) (0.31) (0.21) (0.03)
=======================================================================================================================================
Net increase (decrease) in net asset value 0.27 0.26 1.34 0.81
Net asset value: End of period $12.68 $12.41 $12.15 $10.81
=======================================================================================================================================
Total return (b) 3.76% 4.78% 14.45% 8.37%
Net assets, end of period (in millions) $279.5 $256.1 $158.3 $27.7
Ratio of expenses to average net assets (a) 1.02% 1.09% 1.15% 1.37%
Ratio of net investment income (loss) to average
net assets (a) 3.11% 2.76% 2.26% 2.19%
Portfolio turnover rate 39.89% 64.58% 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) 1.03% 1.14% 1.23% 1.63%
Ratio of net investment income (loss) to average
net assets (a) 3.10% 2.72% 2.17% 1.93%
Period Ended Year Ended Year Ended Year Ended
CLASS B SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
=======================================================================================================================================
Net asset value:Beginning of Period $12.35 $12.10 $10.79 $10.00
Income from Investment Operations
Net investment income (loss) 0.13 0.21 0.14 0.03
Net realized and unrealized gain (loss) on investments 0.27 0.24 1.31 0.78
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.40 0.45 1.45 0.81
=======================================================================================================================================
Less Distributions from:
Net investment income (0.13) (0.20) (0.13) (0.02)
Net realized capital gains - - (0.01) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.13) (0.20) (0.14) (0.02)
=======================================================================================================================================
Net increase (decrease) in net asset value 0.27 0.25 1.31 0.79
Net asset value: End of period $12.62 $12.35 $12.10 $10.79
=======================================================================================================================================
Total return (b) 3.26% 3.74% 13.47% 8.10%
Net assets, end of period (in millions) $20.0 $18.2 $11.9 $2.3
Ratio of expenses to average net assets (a) 2.00% 2.03% 1.98% 2.11%
Ratio of net investment income (loss) to average
net assets (a) 2.13% 1.82% 1.42% 1.45%
Portfolio turnover rate 39.89% 64.58% 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) 2.01% 2.08% 2.18% 2.50%
Ratio of net investment income (loss) to average
net assets (a) 2.12% 1.77% 1.22% 1.06%
Period Ended Year Ended Year Ended Year Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
=======================================================================================================================================
Net asset value:Beginning of Period $12.40 $12.13 $10.79 $10.00
Income from Investment Operations
Net investment income 0.22 0.39 0.23 0.04
Net realized and unrealized gain (loss) on investments 0.27 0.25 1.35 0.78
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.49 0.64 1.58 0.82
=======================================================================================================================================
Less Distributions from:
Net investment income (loss) (0.22) (0.37) (0.23) (0.03)
Net realized capital gains - - (0.01) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.22) (0.37) (0.24) (0.03)
=======================================================================================================================================
Net increase (decrease) in net asset value 0.27 0.27 1.34 0.79
Net asset value: End of period $12.67 $12.40 $12.13 $10.79
=======================================================================================================================================
Total return (b) 3.95% 5.33% 14.73% 8.17%
Net assets, end of period (in millions) $3.1 $3.0 $2.3 $1.1
Ratio of expenses to average net assets (a) 0.60% 0.60% 0.88% 1.95%
Ratio of net investment income (loss) to average
net assets (a) 3.54% 3.25% 2.50% 1.73%
Portfolio turnover rate 39.89% 64.58% 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) 0.61% 0.64% 0.88% 1.95%
Ratio of net investment income (loss) to average
net assets (a) 3.52% 3.20% 2.50% 1.73%
(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 Small Cap Index Fund II
Period Ended
CLASS A SHARES 10/31/2000 (c)
-----------------------------------------------------------------------------
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) (0.03)
Net realized and unrealized gain (loss) on investments 0.21
-----------------------------------------------------------------------------
Total from Investment Operations 0.18
=============================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
-----------------------------------------------------------------------------
Total Distributions -
=============================================================================
Net increase (decrease) in net asset value 0.18
Net asset value: End of period $10.18
=============================================================================
Total return (b) 1.80%
Net assets, end of period (in millions) $10.0
Ratio of expenses to average net assets (a) 1.75%
Ratio of net investment income (loss) to average
net assets (a) (0.94)%
Portfolio turnover rate 17.38%
=============================================================================
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) 1.75%
Ratio of net investment income (loss) to average
net assets (a) (0.94)%
Period Ended
CLASS B SHARES 10/31/2000 (c)
------------------------------------------------------------------------------
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) (0.05)
Net realized and unrealized gain (loss) on investments 0.20
------------------------------------------------------------------------------
Total from Investment Operations 0.15
==============================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
------------------------------------------------------------------------------
Total Distributions -
==============================================================================
Net increase (decrease) in net asset value 0.15
Net asset value: End of period $10.15
==============================================================================
Total return (b) 1.50%
Net assets, end of period (in millions) $1.2
Ratio of expenses to average net assets (a) 2.57%
Ratio of net investment income (loss) to average
net assets (a) (1.76)%
Portfolio turnover rate 17.38%
==============================================================================
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) 2.57%
Ratio of net investment income (loss) to average
net assets (a) (1.76)%
(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.
(c) Since inception date of July 1, 2000
The AAL Mid Cap Index Fund II
Period Ended
CLASS A SHARES 10/31/2000 (c)
--------------------------------------------------------------------------------
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) (0.01)
Net realized and unrealized gain (loss) on investments 0.50
--------------------------------------------------------------------------------
Total from Investment Operations 0.49
================================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
--------------------------------------------------------------------------------
Total Distributions -
================================================================================
Net increase (decrease) in net asset value 0.49
Net asset value: End of period $10.49
================================================================================
Total return (b) 4.90%
Net assets, end of period (in millions) $12.8
Ratio of expenses to average net assets (a) 1.57%
Ratio of net investment income (loss) to average
net assets (a) (0.38)%
Portfolio turnover rate 10.44%
================================================================================
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) 1.57%
Ratio of net investment income (loss) to average
net assets (a) (0.38)%
Period Ended
CLASS B SHARES 10/31/2000 (c)
-------------------------------------------------------------------------------
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) (0.03)
Net realized and unrealized gain (loss) on investments 0.49
-------------------------------------------------------------------------------
Total from Investment Operations 0.46
===============================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
-------------------------------------------------------------------------------
Total Distributions -
===============================================================================
Net increase (decrease) in net asset value 0.46
Net asset value: End of period $10.46
===============================================================================
Total return (b) 4.60%
Net assets, end of period (in millions) $1.4
Ratio of expenses to average net assets (a) 2.40%
Ratio of net investment income (loss) to average
net assets (a) (1.19)%
Portfolio turnover rate 10.44%
===============================================================================
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) 2.40%
Ratio of net investment income (loss) to average
net assets (a) (1.19)%
(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.
(c) Since inception date of July 1, 2000
The AAL Large Company Index Fund II
Period Ended
CLASS A SHARES 10/31/2000 (c)
-------------------------------------------------------------------------------
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) (0.01)
Net realized and unrealized gain (loss) on investments (0.23)
-------------------------------------------------------------------------------
Total from Investment Operations (0.24)
===============================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
-------------------------------------------------------------------------------
Total Distributions -
===============================================================================
Net increase (decrease) in net asset value (0.24)
Net asset value: End of period $9.76
===============================================================================
Total return (b) (2.40)%
Net assets, end of period (in millions) $15.8
Ratio of expenses to average net assets (a) 1.50%
Ratio of net investment income (loss) to average
net assets (a) (0.27)%
Portfolio turnover rate 3.04%
===============================================================================
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) 1.50%
Ratio of net investment income (loss) to average
net assets (a) (0.27)%
Period Ended
CLASS B SHARES 10/31/2000 (c)
-------------------------------------------------------------------------------
Net asset value:Beginning of Period $10.00
Income from Investment Operations
Net investment income (loss) (0.03)
Net realized and unrealized gain (loss) on investments (0.23)
-------------------------------------------------------------------------------
Total from Investment Operations (0.26)
===============================================================================
Less Distributions from:
Net investment income -
Net realized capital gains -
-------------------------------------------------------------------------------
Total Distributions -
===============================================================================
Net increase (decrease) in net asset value (0.26)
Net asset value: End of period $9.74
===============================================================================
Total return (b) (2.60)%
Net assets, end of period (in millions) $1.5
Ratio of expenses to average net assets (a) 2.38%
Ratio of net investment income (loss) to average
net assets (a) (1.11)%
Portfolio turnover rate 3.04%
===============================================================================
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%
Ratio of net investment income (loss) to average
net assets (a) (1.11)%
(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.
(c) Since inception date of July 1, 2000
The AAL High Yield Bond Fund
Period Ended Year Ended Year Ended Year Ended Period Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
=======================================================================================================================
Net asset value:Beginning of Period $7.44 $8.92 $10.31 $9.88 $10.00
Income from Investment Operations
Net investment income (loss) 0.34 0.87 0.91 0.92 0.27
Net realized and unrealized gain (loss) on investments (0.56) (1.48) (1.33) 0.53 (0.12)
-----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.22) (0.61) (0.42) 1.45 0.15
=======================================================================================================================
Less Distributions from:
Net investment income (0.34) (0.87) (0.91) (0.92) (0.27)
Net realized capital gains - - (0.06) (0.10) -
-----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.34) (0.87) (0.97) (1.02) (0.27)
=======================================================================================================================
Net increase (decrease) in net asset value (0.56) (1.48) (1.39) 0.43 (0.12)
Net asset value: End of period $6.88 $7.44 $8.92 $10.31 $9.88
=======================================================================================================================
Total return (b) (3.23)% (7.00)% (3.96)% 15.12% 1.51%
Net assets, end of period (in millions) $124.0 $134.3 $131.9 $100.8 $44.7
Ratio of expenses to average net assets (a) 1.01% 0.96% 1.00% 0.99% 1.00%
Ratio of net investment income (loss) to average
net assets (a) 9.33% 10.54% 9.81% 8.94% 9.11%
Portfolio turnover rate 71.32% 53.59% 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) 1.05% 1.12% 1.16% 1.18% 1.28%
Ratio of net investment income (loss) to average
net assets (a) 9.28% 10.38% 9.64% 8.75% 8.83%
Period Ended Year Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
=======================================================================================================================
Net asset value:Beginning of Period $7.44 $8.92 $10.31 $9.88 $10.00
Income from Investment Operations
Net investment income (loss) 0.31 0.81 0.84 0.84 0.25
Net realized and unrealized gain (loss) on investments (0.56) (1.48) (1.33) 0.53 (0.12)
-----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.25) (0.67) (0.49) 1.37 0.13
=======================================================================================================================
Less Distributions from:
Net investment income (0.31) (0.81) (0.84) (0.84) (0.25)
Net realized capital gains - - (0.06) (0.10) -
-----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.31) (0.81) (0.90) (0.94) (0.25)
=======================================================================================================================
Net increase (decrease) in net asset value (0.56) (1.48) (1.39) 0.43 (0.12)
Net asset value: End of period $6.88 $7.44 $8.92 $10.31 $9.88
=======================================================================================================================
Total return (b) (3.58)% (7.65)% (4.62)% 14.27% 1.31%
Net assets, end of period (in millions) $10.4 $11.6 $12.4 $9.7 $2.7
Ratio of expenses to average net assets (a) 1.69% 1.62% 1.71% 1.74% 1.75%
Ratio of net investment income (loss) to average
net assets (a) 8.65% 9.88% 9.09% 8.22% 8.66%
Portfolio turnover rate 71.32% 53.59% 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) 1.92% 1.97% 1.98% 2.05% 2.00%
Ratio of net investment income (loss) to average
net assets (a) 8.41% 9.53% 8.82% 7.90% 8.41%
Period Ended Year Ended Year Ended Period Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
==========================================================================================================
Net asset value:Beginning of Period $7.43 $8.91 $10.31 $10.29
Income from Investment Operations
Net investment income 0.35 0.89 0.93 0.31
Net realized and unrealized gain (loss) on investments (0.56) (1.48) (1.34) 0.02
----------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.21) (0.59) (0.41) 0.33
==========================================================================================================
Less Distributions from:
Net investment income (loss) (0.35) (0.89) (0.93) (0.31)
Net realized capital gains - - (0.06) -
----------------------------------------------------------------------------------------------------------
Total Distributions (0.35) (0.89) (0.99) (0.31)
==========================================================================================================
Net increase (decrease) in net asset value (0.56) (1.48) (1.40) 0.02
Net asset value: End of period $6.87 $7.43 $8.91 $10.31
==========================================================================================================
Total return (b) (3.07)% (6.67)% (3.85)% 3.28%
Net assets, end of period (in millions) $1.7 $2.0 $2.2 $0.2
Ratio of expenses to average net assets (a) 0.63% 0.53% 0.76% 0.75%
Ratio of net investment income (loss) to average
net assets (a) 9.68% 11.00% 10.34% 9.53%
Portfolio turnover rate 71.32% 53.59% 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% 0.62% 0.76% 0.75%
Ratio of net investment income (loss) to average
net assets (a) 9.68% 10.92% 10.34% 9.53%
(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 Municipal Bond Fund
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997 4/30/1996
=======================================================================================================================================
Net asset value:Beginning of Period $10.45 $11.47 $11.40 $10.92 $10.91 $10.69
Income from Investment Operations
Net investment income (loss) 0.27 0.53 0.52 0.52 0.52 0.52
Net realized and unrealized gain (loss) on investments 0.33 (1.01) 0.25 0.61 0.19 0.30
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.60 (0.48) 0.77 1.13 0.71 0.82
=======================================================================================================================================
Less Distributions from:
Net investment income (0.27) (0.53) (0.52) (0.52) (0.52) (0.52)
Net realized capital gains - (0.01) (0.18) (0.13) (0.18) (0.08)
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.27) (0.54) (0.70) (0.65) (0.70) (0.60)
=======================================================================================================================================
Net increase (decrease) in net asset value 0.33 (1.02) 0.07 0.48 0.01 0.22
Net asset value: End of period $10.78 $10.45 $11.47 $11.40 $10.92 $10.91
=======================================================================================================================================
Total return (b) 5.85% (4.09)% 6.80% 10.50% 6.64% 7.74%
Net assets, end of period (in millions) $473.2 $461.3 $523.1 $467.1 $421.7 $412.8
Ratio of expenses to average net assets (a) 0.77% 0.78% 0.81% 0.85% 0.89% 0.95%
Ratio of net investment income (loss) to average
net assets (a) 5.08% 4.98% 4.47% 4.55% 4.69% 4.69%
Portfolio turnover rate 62.93% 210.32% 94.56% 139.18% 119.79% 130.52%
=======================================================================================================================================
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) 0.82% 0.84% 0.81% 0.85% 0.89% 0.95%
Ratio of net investment income (loss) to average
net assets (a) 5.04% 4.93% 4.47% 4.55% 4.69% 4.69%
Period Ended Year Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
========================================================================================================================
Net asset value:Beginning of Period $10.44 $11.47 $11.40 $10.92 $11.02
Income from Investment Operations
Net investment income (loss) 0.23 0.44 0.42 0.42 0.14
Net realized and unrealized gain (loss) on investments 0.34 (1.02) 0.25 0.61 (0.10)
------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.57 (0.58) 0.67 1.03 0.04
========================================================================================================================
Less Distributions from:
Net investment income (0.23) (0.44) (0.42) (0.42) (0.14)
Net realized capital gains - (0.01) (0.18) (0.13) -
------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.23) (0.45) (0.60) (0.55) (0.14)
========================================================================================================================
Net increase (decrease) in net asset value 0.34 (1.03) 0.07 0.48 (0.10)
Net asset value: End of period $10.78 $10.44 $11.47 $11.40 $10.92
========================================================================================================================
Total return (b) 5.49% (4.99)% 5.93% 9.58% 0.34%
Net assets, end of period (in millions) $7.6 $7.3 $7.5 $3.6 $0.8
Ratio of expenses to average net assets (a) 1.49% 1.59% 1.64% 1.74% 1.69%
Ratio of net investment income (loss) to average
net assets (a) 4.36% 4.19% 3.65% 3.67% 4.09%
Portfolio turnover rate 62.93% 210.32% 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) 1.54% 1.64% 1.64% 1.74% 1.69%
Ratio of net investment income (loss) to average
net assets (a) 4.32% 4.14% 3.65% 3.67% 4.09%
Period Ended Year Ended Year Ended Period Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
==========================================================================================================
Net asset value:Beginning of Period $10.45 $11.47 $11.40 $11.59
Income from Investment Operations
Net investment income 0.29 0.57 0.55 0.18
Net realized and unrealized gain (loss) on investments 0.33 (1.01) 0.25 (0.19)
----------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.62 (0.44) 0.80 (0.01)
==========================================================================================================
Less Distributions from:
Net investment income (loss) (0.29) (0.57) (0.55) (0.18)
Net realized capital gains - (0.01) (0.18) -
----------------------------------------------------------------------------------------------------------
Total Distributions (0.29) (0.58) (0.73) (0.18)
==========================================================================================================
Net increase (decrease) in net asset value 0.33 (1.02) 0.07 (0.19)
Net asset value: End of period $10.78 $10.45 $11.47 $11.40
==========================================================================================================
Total return (b) 6.01% (3.78)% 7.09% (0.09)%
Net assets, end of period (in millions) $1.1 $0.5 $0.6 $0.0
Ratio of expenses to average net assets (a) 0.50% 0.47% 0.51% 0.60%
Ratio of net investment income (loss) to average
net assets (a) 5.34% 5.32% 4.78% 4.79%
Portfolio turnover rate 62.93% 210.32% 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) 0.54% 0.52% 0.51% 0.60%
Ratio of net investment income (loss) to average
net assets (a) 5.30% 5.27% 4.78% 4.79%
(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 Bond Fund
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997 4/30/1996
=======================================================================================================================================
Net asset value:Beginning of Period $9.32 $9.92 $9.99 $9.63 $9.62 $9.61
Income from Investment Operations
Net investment income (loss) 0.31 0.58 0.53 0.57 0.60 0.58
Net realized and unrealized gain (loss) on investments 0.16 (0.60) (0.07) 0.36 0.01 0.01
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.47 (0.02) 0.46 0.93 0.61 0.59
=======================================================================================================================================
Less Distributions from:
Net investment income (0.31) (0.58) (0.53) (0.57) (0.60) (0.58)
Net realized capital gains - - - - - -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.31) (0.58) (0.53) (0.57) (0.60) (0.58)
=======================================================================================================================================
Net increase (decrease) in net asset value 0.16 (0.60) (0.07) 0.36 0.01 0.01
Net asset value: End of period $9.48 $9.32 $9.92 $9.99 $9.63 $9.62
=======================================================================================================================================
Total return (b) 5.09% (0.11)% 4.61% 9.86% 6.43% 6.18%
Net assets, end of period (in millions) $321.3 $321.7 $367.2 $353.4 $389.3 $430.8
Ratio of expenses to average net assets (a) 0.88% 0.83% 0.93% 0.95% 0.98% 1.01%
Ratio of net investment income (loss) to average
net assets (a) 6.44% 6.12% 5.23% 5.77% 6.10% 5.89%
Portfolio turnover rate 69.86% 163.31% 572.56% 483.76% 212.49% 125.77%
=======================================================================================================================================
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% 0.91% 0.93% 0.95% 0.98% 1.01%
Ratio of net investment income (loss) to average
net assets (a) 6.39% 6.04% 5.23% 5.77% 6.10% 5.89%
Period Ended Year Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
=======================================================================================================================
Net asset value:Beginning of Period $9.32 $9.92 $9.99 $9.64 $9.71
Income from Investment Operations
Net investment income (loss) 0.26 0.49 0.43 0.48 0.18
Net realized and unrealized gain (loss) on investments 0.17 (0.60) (0.07) 0.35 (0.07)
-----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.43 (0.11) 0.36 0.83 0.11
=======================================================================================================================
Less Distributions from:
Net investment income (0.26) (0.49) (0.43) (0.48) (0.18)
Net realized capital gains - - - - -
-----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.26) (0.49) (0.43) (0.48) (0.18)
=======================================================================================================================
Net increase (decrease) in net asset value 0.17 (0.60) (0.07) 0.35 (0.07)
Net asset value: End of period $9.49 $9.32 $9.92 $9.99 $9.64
=======================================================================================================================
Total return (b) 4.70% (1.09)% 3.60% 8.75% 0.96%
Net assets, end of period (in millions) $3.8 $3.6 $3.1 $1.4 $0.4
Ratio of expenses to average net assets (a) 1.79% 1.80% 1.90% 1.92% 1.86%
Ratio of net investment income (loss) to average
net assets (a) 5.52% 5.17% 4.28% 4.74% 5.51%
Portfolio turnover rate 69.86% 163.31% 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) 1.84% 1.88% 1.90% 1.92% 1.86%
Ratio of net investment income (loss) to average
net assets (a) 5.47% 5.09% 4.28% 4.74% 5.51%
Period Ended Year Ended Year Ended Period Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
=======================================================================================================================
Net asset value:Beginning of Period $9.32 $9.92 $9.99 $10.06
Income from Investment Operations
Net investment income 0.33 0.62 0.57 0.20
Net realized and unrealized gain (loss) on investments 0.17 (0.60) (0.07) (0.07)
-----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.50 0.02 0.50 0.13
=======================================================================================================================
Less Distributions from:
Net investment income (loss) (0.33) (0.62) (0.57) (0.20)
Net realized capital gains - - - -
-----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.33) (0.62) (0.57) (0.20)
=======================================================================================================================
Net increase (decrease) in net asset value 0.17 (0.60) (0.07) (0.07)
Net asset value: End of period $9.49 $9.32 $9.92 $9.99
=======================================================================================================================
Total return (b) 5.43% 0.30% 5.02% 1.24%
Net assets, end of period (in millions) $49.2 $47.9 $44.7 $29.3
Ratio of expenses to average net assets (a) 0.44% 0.43% 0.54% 0.56%
Ratio of net investment income (loss) to average
net assets (a) 6.87% 6.55% 5.63% 6.29%
Portfolio turnover rate 69.86% 163.31% 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) 0.49% 0.50% 0.54% 0.56%
Ratio of net investment income (loss) to average
net assets (a) 6.82% 6.47% 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.
The AAL Money Market Fund
Period Ended Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997 4/30/1996
=================================================================================================================================
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 (loss) 0.03 0.05 0.05 0.05 0.05 0.05
Net realized and unrealized gain (loss) on investments - - - - - -
---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.03 0.05 0.05 0.05 0.05 0.05
=================================================================================================================================
Less Distributions from:
Net investment income (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
Net realized capital gains - - - - - -
---------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
=================================================================================================================================
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) 3.02% 4.99% 4.68% 5.12% 5.21% 4.94%
Net assets, end of period (in millions) $382.3 $348.0 $288.1 $240.7 $189.6 $116.0
Ratio of expenses to average net assets (a) 0.71% 0.66% 0.79% 0.68% 0.55% 0.83%
Ratio of net investment income (loss) to average
net assets (a) 5.86% 4.90% 4.54% 4.98% 4.91% 4.89%
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) 1.00% 1.02% 1.12% 1.04% 1.10% 1.28%
Ratio of net investment income (loss) to average
net assets (a) 5.58% 4.54% 4.22% 4.62% 4.36% 4.46%
Period Ended Year Ended Year Ended Year Ended Period Ended
CLASS B SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
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Net asset value:Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations
Net investment income (loss) 0.02 0.04 0.04 0.04 0.01
Net realized and unrealized gain (loss) on investments - - - - -
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Total from Investment Operations 0.02 0.04 0.04 0.04 0.01
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Less Distributions from:
Net investment income (0.02) (0.04) (0.04) (0.04) (0.01)
Net realized capital gains - - - - -
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Total Distributions (0.02) (0.04) (0.04) (0.04) (0.01)
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Net increase (decrease) in net asset value 0.00 - - - -
Net asset value: End of period $1.00 $1.00 $1.00 $1.00 $1.00
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Total return (b) 2.49% 3.94% 3.67% 4.26% 1.32%
Net assets, end of period (in millions) $2.9 $2.4 $1.6 $1.2 $0.6
Ratio of expenses to average net assets (a) 1.76% 1.65% 2.79% 1.65% 1.78%
Ratio of net investment income (loss) to average
net assets (a) 4.81% 3.95% 2.54% 4.02% 3.81%
Portfolio turnover rate N/A N/A N/A N/A N/A
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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) 2.05% 2.00% 3.11% 2.01% 3.54%
Ratio of net investment income (loss) to average
net assets (a) 4.53% 3.59% 2.22% 3.67% 2.05%
Period Ended Year Ended Year Ended Period Ended
CLASS I SHARES 10/31/2000 4/30/2000 4/30/1999 4/30/1998
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Net asset value:Beginning of Period $1.00 $1.00 $1.00 $1.00
Income from Investment Operations
Net investment income 0.03 0.05 0.05 0.02
Net realized and unrealized gain (loss) on investments - - - -
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Total from Investment Operations 0.03 0.05 0.05 0.02
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Less Distributions from:
Net investment income (loss) (0.03) (0.05) (0.05) (0.02)
Net realized capital gains - - - -
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Total Distributions (0.03) (0.05) (0.05) (0.02)
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Net increase (decrease) in net asset value 0.00 - - -
Net asset value: End of period $1.00 $1.00 $1.00 $1.00
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Total return (b) 3.21% 5.36% 4.99% 1.67%
Net assets, end of period (in millions) $31.1 $12.8 $17.9 $0.2
Ratio of expenses to average net assets (a) 0.38% 0.31% 0.49% 0.67%
Ratio of net investment income (loss) to average
net assets (a) 6.26% 5.18% 4.76% 5.11%
Portfolio turnover rate N/A N/A N/A N/A
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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) 0.57% 0.57% 0.72% 1.43%
Ratio of net investment income (loss) to average
net assets (a) 6.08% 4.92% 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.
Board John O. Gilbert-Chairman of the Board
Of F. Gregory Campbell
Trustees 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
Frederick D. Kelsven-Secretary
Investment AAL Capital Management Corporation
Adviser & 222 West College Avenue
Distributor Appleton, WI 54919-0007
Sub-Adviser Janus Capital Corporation
The AAL Aggressive Growth Fund 100 Fillmore Street
Denver, CO 80206
Sub-Adviser Oechsle International Advisors, LLC
The AAL International Fund One International Place
Boston, MA 02110
Sub-Adviser Pacific Investment Management Company
The AAL High Yield Bond Fund 840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
Custodian Citibank, N.A.
111 Wall Street
New York, NY 10043
Transfer Agent & Firstar Mutual Fund Services, LLC
Disbursing Agent 615 East Michigan Street
P.O. Box 2981
Milwaukee, WI 53201-2981
Legal Quarles & Brady LLP
Counsel 411 East Wisconsin Avenue
Milwaukee, WI 53202
Independent PricewaterhouseCoopers LLP
Accountant 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 current prospectus for The AAL Mutual Funds which contains more complete information about the Funds, including investment policies, charges and expenses.
[AAL CAPITAL MANAGEMENT LOGO]
222 W. College Ave., Appleton, WI 54919-0007
www.aal.org e-mail: [email protected] (800) 553-6319
Member NASD
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