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Previous: AAL MUTUAL FUNDS, N-30D, 2001-01-04 |
Next: NUVEEN MUNICIPAL VALUE FUND INC, N-30D, 2001-01-04 |
OCTOBER 31, 2000
THE AAL U.S. GOVERNMENT ZERO
COUPON TARGET FUND SERIES 2001
THE AAL U.S. GOVERNMENT ZERO
COUPON TARGET FUND SERIES 2006
[THE AAL MUTUAL FUNDS LOGO]
DEAR AAL MUTUAL FUND SHAREHOLDER:
We are pleased to provide you with The AAL U.S. Government Zero Coupon Target Funds Semi-Annual Report dated October 31, 2000. In addition to the Target Funds, which are no longer open to investors, we offer 15 other Funds in class A and B shares, with diverse investment objectives to help you build a better financial future. A listing of our Funds and the securities in which they invest is included below.
EQUITY FUNDS
INDEX FUNDS
FIXED-INCOME FUNDS
To invest in any of these Funds, you can either use new dollars to purchase shares or exchange your current Target Fund shares for those of another Fund-at no additional sales charge. For more information about these Funds, contact your AAL representative to receive current prospectuses. Or call Capital Connection® at (800) 553-6319 to learn about using the exchange privilege or to order your complimentary prospectus kit. Please read the prospectuses carefully before you invest or send money.
Thank you for your continued confidence in The AAL Mutual Funds.
Sincerely,
/s/Robert G. Same
Robert G. Same
President, AAL Capital Management Corporation
THE AAL U.S. GOVERNMENT ZERO COUPON TARGET FUND SERIES 2001 AND 2006
The six months ended October 31, 2000 was a good period for bonds, particularly U. S. Treasury securities. Over the last six months, interest rates on five year U.S. Treasury securities declined from 6.6% to 5.8%. Since the value of bonds rises as interest rates decline, this was a good time period for these portfolios.
The Federal Reserve Board (“Fed”) last raised interest rates on May 16, 2000. At that time, the Fed increased rates 50 basis points to 6.50%. Fortunately, that was the last increase by the Fed, and since that time, interest rates have been in a general decline to current levels.
Going forward, it appears that the economy may be on the verge of slowing from its robust growth over the first half of the year. The recently announced third quarter GDP growth of 2.7% validates this view and leads us to believe that rates will be relatively stable over the next several months.
/s/Alan D. Onstand
Alan D. Onstad
Portfolio Manager
VALUE OF A $10,000 INVESTMENT
INCLUDING 4.75% SALES CHARGE
The AAL U.S. The AAL U.S.
Government Government Lehman Brothers
Target Fund Target Fund Aggregate
Series 2001 Series 2006 Bond Index
14-NOV-90 9,523.81 9,523.81 10,000.00
30-NOV-90 9,676.19 9,733.33 10,078.55
31-DEC-90 9,800.00 10,021.66 10,235.78
31-JAN-91 9,819.05 9,915.87 10,362.70
28-FEB-91 9,809.52 9,944.72 10,450.78
29-MAR-91 9,761.90 9,887.01 10,522.89
30-APR-91 9,761.90 9,915.87 10,636.54
31-MAY-91 9,647.62 9,704.28 10,698.23
28-JUN-91 9,495.24 9,473.45 10,692.88
31-JUL-91 9,590.48 9,579.25 10,841.51
30-AUG-91 9,904.76 9,983.19 11,075.69
30-SEP-91 10,266.67 10,406.37 11,300.53
31-OCT-91 10,219.05 10,319.81 11,425.96
30-NOV-91 10,314.29 10,310.19 11,531.08
31-DEC-91 10,923.81 11,957.50 11,873.55
31-JAN-92 10,352.38 11,270.64 11,712.07
28-FEB-92 10,323.81 11,176.98 11,788.28
31-MAR-92 10,114.29 11,000.07 11,721.87
30-APR-92 10,104.76 10,843.96 11,806.44
31-MAY-92 10,285.71 11,218.61 12,029.24
30-JUN-92 10,504.76 11,301.86 12,194.76
31-JUL-92 10,933.33 11,978.31 12,443.67
31-AUG-92 11,019.05 12,019.94 12,569.62
30-SEP-92 11,304.76 12,311.33 12,718.75
30-OCT-92 10,904.76 11,666.11 12,550.01
30-NOV-92 10,714.29 11,697.33 12,552.88
31-DEC-92 10,942.86 12,983.71 12,752.51
29-JAN-93 11,219.05 13,328.91 12,997.07
26-FEB-93 11,657.14 14,041.56 13,224.41
31-MAR-93 11,647.62 13,919.08 13,279.73
30-APR-93 11,666.67 13,941.35 13,372.09
28-MAY-93 11,580.95 13,907.94 13,389.04
30-JUN-93 11,971.43 14,553.79 13,631.67
30-JUL-93 12,076.19 15,025.08 13,708.75
31-AUG-93 12,409.52 15,572.87 13,949.18
30-SEP-93 12,495.24 15,762.92 13,987.48
29-OCT-93 12,476.19 15,762.92 14,039.68
30-NOV-93 12,047.62 14,958.01 13,920.32
31-DEC-93 11,076.19 15,941.32 13,995.77
31-JAN-94 11,219.05 16,373.19 14,184.73
28-FEB-94 10,704.76 15,268.10 13,938.29
31-MAR-94 10,228.57 14,251.92 13,594.61
29-APR-94 10,038.10 13,921.66 13,486.07
31-MAY-94 9,971.43 13,832.75 13,484.20
30-JUN-94 9,857.14 13,515.19 13,454.37
29-JUL-94 10,038.10 13,959.77 13,721.68
31-AUG-94 9,952.38 13,769.23 13,738.62
30-SEP-94 9,676.19 13,108.72 13,536.43
31-OCT-94 9,542.86 12,918.18 13,524.31
30-NOV-94 9,457.14 12,956.29 13,494.32
30-DEC-94 9,323.81 14,112.16 13,587.63
31-JAN-95 9,466.67 14,431.63 13,856.54
28-FEB-95 9,790.48 14,945.56 14,185.95
31-MAR-95 9,771.43 14,959.45 14,272.93
28-APR-95 9,876.19 15,181.68 14,472.37
31-MAY-95 10,400.00 16,542.90 15,032.41
30-JUN-95 10,447.62 16,681.80 15,142.58
31-JUL-95 10,285.71 16,237.32 15,108.80
31-AUG-95 10,371.43 16,529.01 15,291.01
29-SEP-95 10,419.05 16,779.03 15,439.95
31-OCT-95 10,561.90 17,181.83 15,640.67
30-NOV-95 10,714.29 17,626.31 15,874.96
29-DEC-95 10,685.71 19,063.04 16,097.85
31-JAN-96 10,733.33 18,958.46 16,204.58
29-FEB-96 10,409.52 17,837.98 15,922.94
29-MAR-96 10,219.05 17,389.79 15,812.28
30-APR-96 10,047.62 16,926.66 15,723.41
31-MAY-96 9,923.81 16,672.69 15,691.49
28-JUN-96 10,019.05 16,971.48 15,902.23
31-JUL-96 9,971.43 16,851.96 15,945.80
30-AUG-96 9,895.24 16,538.23 15,919.17
30-SEP-96 10,019.05 16,941.60 16,196.32
31-OCT-96 10,228.57 17,584.01 16,555.24
29-NOV-96 10,361.90 18,106.90 16,838.83
31-DEC-96 10,066.67 18,622.52 16,682.23
31-JAN-97 10,038.10 18,413.45 16,733.27
28-FEB-97 9,980.95 18,284.80 16,774.77
31-MAR-97 9,809.52 17,721.95 16,588.91
30-APR-97 9,885.71 18,075.74 16,837.41
30-MAY-97 9,923.81 18,156.15 16,996.52
30-JUN-97 9,961.90 18,349.13 17,198.27
31-JUL-97 10,171.43 19,281.86 17,661.76
29-AUG-97 10,019.05 18,654.68 17,511.29
30-SEP-97 10,095.24 19,040.64 17,769.58
31-OCT-97 10,190.48 19,507.01 18,027.41
28-NOV-97 10,152.38 19,507.01 18,110.34
31-DEC-97 10,114.29 20,844.65 18,292.53
30-JAN-98 10,228.57 21,222.40 18,527.41
27-FEB-98 10,142.86 20,982.01 18,513.51
31-MAR-98 10,104.76 20,878.99 18,577.20
30-APR-98 10,104.76 20,827.48 18,674.17
29-MAY-98 10,133.33 21,119.37 18,851.20
30-JUN-98 10,142.86 21,308.25 19,011.06
31-JUL-98 10,114.29 21,170.88 19,051.36
31-AUG-98 10,285.71 21,995.06 19,361.52
30-SEP-98 10,485.71 23,042.44 19,814.77
30-OCT-98 10,457.14 22,922.25 19,710.15
30-NOV-98 10,352.38 22,596.01 19,821.71
31-DEC-98 10,285.71 23,868.68 19,881.37
29-JAN-99 10,276.19 23,777.51 20,023.33
26-FEB-99 10,114.29 22,683.46 19,673.72
31-MAR-99 10,114.29 22,628.75 19,782.91
30-APR-99 10,085.71 22,592.28 19,845.62
28-MAY-99 9,980.95 21,899.38 19,671.77
30-JUN-99 9,942.86 21,607.63 19,609.02
30-JUL-99 9,914.29 21,352.35 19,525.68
31-AUG-99 9,876.19 21,170.01 19,515.72
30-SEP-99 9,895.24 21,279.42 19,742.11
29-OCT-99 9,866.67 21,170.01 19,814.95
30-NOV-99 9,809.52 20,969.43 19,813.57
31-DEC-99 9,742.86 21,914.42 19,718.07
31-JAN-00 9,676.19 21,679.63 19,653.59
29-FEB-00 9,685.71 21,757.89 19,891.20
31-MAR-00 9,685.71 22,227.49 20,153.17
30-APR-00 9,676.19 22,070.95 20,095.73
31-MAY-00 9,666.67 22,031.82 20,086.49
30-JUN-00 9,704.76 22,579.68 20,504.28
31-JUL-00 9,695.24 22,540.55 20,690.46
31-AUG-00 9,685.71 22,814.48 20,990.48
29-SEP-00 9,704.76 22,971.01 21,122.51
31-OCT-00 9,676.19 24,120.17 21,262.13
AVERAGE ANNUAL TOTAL RETURNS*
BASED ON NET AMOUNT INVESTED
From Inception
1-Year 5-Year Inception Date
The AAL U.S. Government Zero Coupon Target Fund Series 2001 4.69% 5.04% 8.04% 11/14/1990
The AAL U.S. Government Zero Coupon Target Fund Series 2006 8.31% 6.08% 9.77% 11/14/1990
SEC Quarterly Standardized Returns as of September 29, 2000
The AAL U.S. Government Zero Coupon Target Fund Series 2001 4.64% 5.37% 8.08%
The AAL U.S. Government Zero Coupon Target Fund Series 2006 7.83% 6.59% 9.81%
*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 costs.
SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2000
The Funds seek high, relatively predictable investment returns from U.S. government securities over selected periods of time from two portfolios maturing in 2001 and 2006, assuming investors reinvest the dividends and capital gains distributed by the Funds.
The AAL U.S. Government Zero Coupon Target Fund Series 2001
---------------------------------------------------------------------------------------------------------------------------------------
Principal Yield to Maturity Market
AmountLong-Term Obligations (105.7%) Maturity Date Value
---------------------------------------------------------------------------------------------------------------------------------------
U.S. Zero Coupon(105.7%)
$1,541,000 U.S. Government Zero Coupon Bonds 5.790% 11/15/2001 $1,449,124
---------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (105.7%)
(Amortized cost basis $1,430,023) 1,449,124
---------------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-5.7%) (78,488)
Net Assets (100.0%) $1,370,636
The AAL U.S. Government Zero Coupon Target Fund Series 2006
---------------------------------------------------------------------------------------------------------------------------------------
Principal Yield to Maturity Market
AmountLong-Term Obligations (105.4%) Maturity Date Value
---------------------------------------------------------------------------------------------------------------------------------------
U.S. Zero Coupon(105.4%)
$2,223,000 U.S. Government Zero Coupon Bonds 6.250% 11/15/2006 $1,574,949
---------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (105.4%)
(Amortized cost basis $1,388,001) 1,574,949
---------------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities (-5.4%) (81,036)
Net Assets (100.0%) $1,493,913
The accompanying notes to the financial statements are an integral part of this schedule.
STATEMENT OF ASSETS AND LIABILITIES AS OF OCTOBER 31, 2000
The AAL The AAL
U.S. Government U.S. Government
Zero Coupon Target Zero Coupon Target
Fund Series 2001 Fund Series 2006
---------------------------------------------------------------------------------------------------------------------------------------
Assets:
Investments at cost $1,430,023 $1,388,001
Investments at value $1,449,124 $1,574,949
Cash 2,516 1,019
Prepaid expenses 1,475 1,493
Receivable for investments sold - -
Receivable fund shares sold - -
---------------------------------------------------------------------------------------------------------------------------------------
Total Assets $1,453,115 $1,577,461
=======================================================================================================================================
Liabilities:
Payable for investments purchased $ - $ -
Income distributions payable 73,243 76,849
Payable for fund shares redeemed - -
Payable to affiliate - -
Accrued expenses 9,236 6,699
---------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 82,479 83,548
=======================================================================================================================================
Net Assets:
Trust Capital (beneficial interest) 1,349,724 1,299,700
Accumulated undistributed net investment income (loss) 309 805
Accumulated undistributed net realized gain (loss) on investments 1,502 6,460
Net unrealized appreciation/(depreciation) on investments 19,101 186,948
---------------------------------------------------------------------------------------------------------------------------------------
Total Net Assets 1,370,636 1,493,913
=======================================================================================================================================
Total Liabilities & Capital $1,453,115 $1,577,461
=======================================================================================================================================
Class A share capital $1,370,636 $1,493,913
Shares of beneficial interest outstanding 134,849 127,403
Net asset value per share $10.16 $11.73
Maximum public offering price $10.67 $12.31
The accompanying notes to the financial statements are an integral part of this schedule.
Unaudited Financial Statements
STATEMENT OF OPERATIONS AS OF OCTOBER 31, 2000
The AAL The AAL
U.S. Government U.S. Government
Zero Coupon Target Zero Coupon Target
Fund Series 2001 Fund Series 2006
---------------------------------------------------------------------------------------------------------------------------------------
Investment Income
Taxable interest $52,277 $53,610
---------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 52,277 53,610
=======================================================================================================================================
Expenses
Adviser fees - -
Administrative service and pricing fees 469 550
Audit and legal fees 3,812 3,789
Custody fees 306 307
Printing and postage expense Class A 464 462
SEC and state registration expense 550 544
Transfer Agent fees Class A 1,027 819
Trustees fees and expenses 2,379 2,379
Other expenses 32 32
---------------------------------------------------------------------------------------------------------------------------------------
Total Expenses Before Reimbursement 9,039 8,882
=======================================================================================================================================
Less Reimbursement from Adviser (1,919) (1,503)
=======================================================================================================================================
Total Net Expenses 7,120 7,379
=======================================================================================================================================
Net Investment Income 45,157 46,231
=======================================================================================================================================
Realized and Unrealized Gains (Losses) on Investments
Net realized gains (losses) on investments 544 2,237
Change in net unrealized appreciation/(depreciation) on investments 104 55,740
---------------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gains (Losses) on Investments 648 57,977
=======================================================================================================================================
Net Increase (Decrease) in Net Assets From Operations $45,805 $104,208
=======================================================================================================================================
The accompanying notes to the financial statements are an integral part of this schedule.
Unaudited Financial Statements
STATEMENT OF CHANGES IN NET ASSETS AS OF OCTOBER 31, 2000
The AAL U.S. Government The AAL U.S. Government
Zero Coupon Target Fund Zero Coupon Target Fund
Series 2001 Series 2006
Year Ended Period Ended Year Ended Period Ended
4/30/2000 10/31/2000 4/30/2000 10/31/2000
---------------------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $89,751 $45,157 $92,167 $46,231
Net realized gains on investments 2,818 544 5,745 2,237
Change in net unrealized appreciation/(depreciation)
on investments (60,021) 104 (134,565) 55,740
---------------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations 32,548 45,805 (36,653) 104,208
=======================================================================================================================================
Distributions to Shareholders
From net investment income (89,751) (45,157) (92,167) (46,231)
From net realized gains (3,794) - (12,236) -
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders (93,545) (45,157) (104,403) (46,231)
=======================================================================================================================================
Fund Share Transactions
Purchases of fund shares - - - -
Income dividends reinvested 87,753 - 90,293 -
Capital gains distributions reinvested 3,732 - 12,139 -
Redemption of trust shares (148,371) (57,972) (68,643) (31,557)
---------------------------------------------------------------------------------------------------------------------------------------
Net increase (Decrease) in Trust Capital (56,886) (57,972) 33,789 (31,557)
=======================================================================================================================================
Net Increase (Decrease) in Net Assets (117,883) (57,324) (107,267) 26,420
=======================================================================================================================================
Net Assets Beginning of Period 1,545,843 1,427,960 1,574,760 1,467,493
=======================================================================================================================================
Net Assets End of Period $1,427,960 $1,370,636 $1,467,493 $1,493,913
=======================================================================================================================================
Accumulated Undistributed Net Investment Income $309 $309 $805 $805
=======================================================================================================================================
The accompanying notes to the financial statements are an integral part of this schedule.
Unaudited Financial Statements
NOTES TO FINANCIAL STATEMENTS AS OF OCTOBER 31, 2000
A: Organization
The AAL Mutual Funds (the “Trust”) was organized as a Massachusetts Business Trust on March 31, 1987 and is registered as an open-end diversified management company under the Investment Company Act of 1940. The Trust commenced operations on July 16, 1987, and currently consists of The AAL 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 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 Balanced Fund, The AAL High Yield Bond Fund, The AAL Municipal Bond Fund, The AAL Bond Fund, The AAL Money Market Fund, The AAL Bond Index Fund, and The AAL U.S. Government Zero Coupon Target Funds 2001 and 2006. The 20 AAL Mutual Funds are collectively referred to as the “Funds.”
On November 14 ,1990, The AAL U.S. Government Zero Coupon Target Funds Series 2001 and 2006 commenced operations. Effective June 1, 1993, the Board of Trustees of The AAL Mutual Funds closed The AAL U.S. Government Zero Coupon Target Funds Series 2001 and 2006 to new shareholders and to additional purchases of shares of existing shareholders.
B: Significant Accounting Policies
The Funds' principal accounting policies are:
Valuation-Securities traded on national securities exchanges are valued at last reported sales prices. All other securities are valued at the latest bid quotation if such quotations are readily available. Otherwise, such securities are valued at a fair value as determined in good faith by the Investment Adviser under supervision of the Board of Trustees.
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.
Distribution to Shareholders-Net investment income is distributed to each shareholder as a dividend. Dividends from the Target Funds are declared daily and distributed annually. Net realized gains from securities transactions, if any, are distributed at least annually in the calendar year.
Other-For financial statement purposes, investment security transactions are accounted for on trade date. Interest income is recognized on an accrual basis. Discount is amortized over the life of the respective bonds. Realized gains or losses on sales are determined on a specific cost identification basis. Generally accepted accounting principles require permanent financial reporting and tax differences be reclassified to trust capital.
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.
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 the two separate Target Fund portfolios pay a fee for investment advisory services. The annual rate of fees under the Investment Advisory Agreement are calculated at: 0.50 of 1% of the average daily net assets of The AAL U.S. Government Zero Coupon Target Funds Series 2001 and Series 2006. Payments under the Investment Advisory Agreement were discontinued effective July 1, 1993. For the period May 1, 1995, through October 31, 1995 the Adviser entered into a sub-advisory agreement with Duff & Phelps Investment Management Co. (the “Sub-Adviser”). The sub-advisory fee, which was paid by the Adviser, was equal to: 0.10 of 1% of the average daily net assets for The AAL U.S. Government Zero Coupon Target Funds. Effective November 1, 1995 the sub-advisory agreement was terminated.
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 sales activities relating to the distribution of shares to investors. Payments under the Plan are equal to a maximum of 0.10 of 1% of average daily net assets. Payments under the Plan were discontinued effective July 1, 1993.
Each Trustee who is not affiliated with AAL or the Adviser receives an annual fee from the Funds for services as a Trustee and is eligible to participate in a deferred compensation plan with respect to these fees. Each participant’s deferred compensation account will increase or decrease as if it were invested in shares of the selected Funds.
Trustees not participating in the above plan received $842 in fees for the six-month period ending October 31, 2000, from the Target Funds. 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.
Each Fund is charged for those expenses that are directly attributable to it, such as advisory, custodian and certain shareholder service fees, while other expenses that cannot be directly attributable to a Fund are allocated among the funds in proportion to the net assets, number of shareholder accounts, or other reasonable basis of the respective Fund.
The Adviser voluntarily has reimbursed The AAL U.S. Government Zero Coupon Target Funds for all expenses in excess of 1% of average daily net assets since inception.
AAL is the ultimate parent company for AAL Capital Management Corporation.
D. Security Transactions
During the period ended October 31, 2000, and the year ended April 30, 2000, purchases and sales of securities other than short-term obligations were as follows:
Purchases Sales
4/30/2000 10/31/2000 4/30/2000 10/31/2000
--------------------------------------------------------------------------------
Series 2001 $-- $-- $163,678 $65,330
Series 2006 -- -- $87,927 $33,677
All purchases and sales of The U.S. Government Zero Coupon Target Funds were in U.S. government obligations.
Cost of investments is substantially the same for financial reporting purposes and Federal income tax purposes.
The gross unrealized appreciation on investments at October 31, 2000, and April 30, 2000 were as follows:
April 30, 2000 October 31, 2000
Net Net
Unrealized Unrealized
Appreciation (Depreciation) Appreciation Appreciation (Depreciation) Appreciation
--------------------------------------------------------------------------------------------------------------------------------
Series 2001 $18,997 $-- $18,997 $19,101 $-- $19,101
Series 2006 131,208 -- 131,208 186,948 -- 186,948
E: Trust Transactions
Transactions in trust shares for the period ended October 31, 2000, and year ended April 30, 2000, were as follows:
Series 2001 Series 2006
4/30/2000 10/31/2000 10/31/2000 4/30/2000
--------------------------------------------------------------------------------------------------------------------------
Shares purchased -- -- -- --
Income dividends reinvested 8,578 -- 8,057 --
Capital gains reinvested 364 -- 1,071 --
Shares redeemed (14,310) (5,691) (6,039) (2,786)
--------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) of Trust Shares (5,368) (5,691) 3,089 (2,786)
==========================================================================================================================
Unaudited Financial Statements
FINANCIAL HIGHLIGHTS
PER SHARE INFORMATION
Series 2001
Period Ended Year Ended Year Ended Year Ended Year Ended
10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
---------------------------------------------------------------------------------------------------------------------------------------
Net asset value: beginning of period $10.16 $10.59 $10.61 $10.38 $10.55
Income from Investment Operations
Net investment income 0.33 0.65 0.64 0.63 0.64
Net realized and unrealized gain (loss) on Investments -- (0.40) 0.02 0.30 (0.07)
---------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.33 0.25 0.66 0.93 0.57
=======================================================================================================================================
Distributions from:
Net investment income (0.33) (0.65) (0.64) (0.63) (0.64)
Net realized capital gains -- (0.03) (0.04) (0.07) (0.10)
---------------------------------------------------------------------------------------------------------------------------------------
Total Distributions (0.33) (0.68) (0.68) (0.70) (0.74)
=======================================================================================================================================
Net increase (decrease) in net asset value 0.00 (0.43) (0.02) 0.23 (0.17)
Net asset value: end of period $10.16 $10.16 $10.59 $10.61 $10.38
=======================================================================================================================================
Total return (c) 3.23% 2.38% 6.23% 9.17% 5.42%
Net assets: end of period (in thousands) $1,371 $1,428 $1,546 $1,525 $1,711
Ratio of expenses to average net assets(a) 1.00% 1.00% 1.00% 0.77% 0.97%
Ratio of net investment income to average net assets (b) 6.34% 6.20% 5.88% 6.16% 6.08%
Portfolio turnover rate 0.00% 0.00% 0.00% 0.00% 0.00%
=======================================================================================================================================
(a) Computed after giving effect to Adviser's expense limitation undertaking. If the Funds had paid all of their expenses, the ratio
would have been as follows: 1.27% 1.02% 1.00% 0.84% 0.99%
(b) If the Funds had paid all of their expenses, the ratio of net investment income to average assets would have been as follows:
6.07% 6.18% 5.88% 6.10% 6.07%
(c) Total returns are based on net amount invested. Periods of less than one year are not annualized.
Unaudited Financial Statements
Series 2006
Period Ended Year Ended Year Ended Year Ended Year Ended
10/31/2000 4/30/2000 4/30/1999 4/30/1998 4/30/1997
---------------------------------------------------------------------------------------------------------------------------------------
Net asset value: beginning of period $11.27 $12.39 $12.13 $11.24 $11.33
Income from Investment Operations
Net investment income 0.36 0.72 0.71 0.70 0.71
Net realized and unrealized gain (loss) on Investments 0.46 (1.02) 0.36 1.00 0.08
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Total from Investment Operations 0.82 (0.30) 1.07 1.70 0.79
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Distributions from:
Net investment income (0.36) (0.72) (0.71) (0.70) (0.71)
Net realized capital gains -- (0.10) (0.10) (0.11) (0.17)
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Total Distributions (0.36) (0.82) (0.81) (0.81) (0.88)
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Net increase (decrease) in net asset value 0.46 (1.12) 0.26 0.89 (0.09)
Net asset value: end of period 11.73 $11.27 $12.39 $12.13 $11.24
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Total return (c) 7.22% (2.29%) 8.69% 15.30% 6.84%
Net assets: end of period (in thousands) $1,494 $1,467 $1,575 $1,616 $1,453
Ratio of expenses to average net assets(a) 0.99% 0.98% 0.97% 0.82% 1.00%
Ratio of net investment income to average net assets (b) 6.22% 6.21% 5.51% 6.03% 6.22%
Portfolio turnover rate 0.00% 0.00% 0.00% 0.00% 0.00%
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(a) Computed after giving effect to Adviser's expense limitation undertaking. If the Funds had paid all of their expenses, the ratio
would have been as follows: 1.19% 0.98% 0.97% 0.90% 1.17%
(b) If the Funds had paid all of their expenses, the ratio of net investment income to average assets would have been as follows:
6.01% 6.21% 5.51% 5.96% 6.04%
(c) Total returns are based on net amount invested. Periods of less than one year are not annualized.
Unaudited Financial Statements
BOARD OF TRUSTEES
John O. Gilbert-Chairman of the Board
F. Gregory Campbell
Woodrow E. Eno
Richard L. Gady
John H. Pender
Edward W. Smeds
Lawrence M. Woods
OFFICERS
Robert G. Same-President
James H. Abitz-Vice-President
Woodrow E. Eno-Vice-President
Charles D. Gariboldi-Treasurer
Frederick D. Kelsven-Secretary
Todd J. Kelly-Assistant Treasurer
Joseph R. Mauel-Assistant Treasurer
Steven J. Fredricks-Assistant Secretary
INVESTMENT ADVISER & DISTRIBUTOR
AAL Capital Management Corporation
222 West College Avenue
Appleton, WI 54919-0007
CUSTODIAN
Citibank, N.A.
111 Wall Street
New York, NY 10043
Transfer Agent & Disbursing Agent
Firstar Mutual Fund Services, LLC
615 East Michigan Street
P.O. Box 2981
Milwaukee, WI 53201-2981
LEGAL COUNSEL
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, WI 53202
INDEPENDENT ACCOUNTANT
PricewaterhouseCoopers LLP
Suite 1500
100 East Wisconsin Avenue
Milwaukee, WI 53202
[THE AAL MUTUAL FUNDS LOGO]
222 W. College Ave., Appleton, WI 54919-0007
www.aal.org e-mail:[email protected] (800)553-6319
C-50176AR 12-00
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