<PAGE>
ANNUAL REPORT
December 31, 1995
ADVANCE Capital I Inc.
An investment company with five funds
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
- - -----------------------------------------
<S> <C>
Page
A Letter to Our Shareholders..........2
Investment Performance................4
Financial Highlights.................11
PORTFOLIO OF INVESTMENTS
Equity Growth Fund..............16
Bond Fund.......................21
Balanced Fund...................24
Long Term Income Fund...........34
Retirement Income Fund..........37
Statement of Assets and Liabilities..44
Statement of Operations..............45
Statement of Changes in Net Assets...46
Notes to Financial Statements........49
Independent Accountants' Report......52
Additional Information...............53
</TABLE>
<PAGE>
Dear Shareholders,
The performance of both the stock and bond markets in 1995
will probably be remembered as one of the great investment
"comebacks" this century. One year ago we reported that
inflation was low, corporate earnings were strong and
international relations were improving. In spite of this, the
stock market had been lackluster at best and the bond market had
just returned one of its worst years. This year, the investment
community finally awakened to the fact that this economic
scenario is nearly perfect. In herd-like fashion, they
stampeded to produce both stock and bond returns that set
records on the plus side.
The year 1995 reflects the start of a slightly new world
for investors. In February of 1995 the Federal Reserve ended
its rate-lifting efforts, started in February 1994 to head off
typical excesses of historical economic expansions. Their
reasoning was textbook. Typically, as an economic expansion
enters its later years, unemployment remains low, corporate
earnings are strong and manufacturing output is high. This
leads to increased wage and commodity price pressures and,
ultimately, rising inflation. Perhaps as a result of the Fed's
preemptory moves, pricing pressures so typical of subsequent
expansions have not materialized. Labor costs remain low,
particularly when viewed in the light of the productivity gains
realized over the past several years, and commodity prices have
been stable. There are signs of a transformation occurring
throughout the economy as corporations produce more with fewer
resources and the government is discussing, and may be on the
verge of signing, an historic budget agreement. International
conglomerates are being formed in efforts to further efficiency
in a highly computerized, increasingly global economy. As this
phenomenon spreads, the typical or traditional economic signals
of inflation, recession and recovery will be blurred. This
changing world picture sets the stage for 1996 and, more
importantly, the next century.
For the year 1995 the Advance Capital I Funds produced
outstanding results. The Balanced Fund, the Long Term Income
Fund and the Retirement Income Fund each produced results in the
top five percent of their respective fund categories as reported
by Lipper Analytical Services, Inc. The Equity Growth Fund, in
its second year as a small to mid-size growth stock fund,
increased 38.0 percent in value. The Balanced Fund with its
approximate 60-40 stock-bond mix increased 31.5 percent. The
three income funds, Bond, Long Term Income and Retirement
Income, increased 20.2 percent, 25.6 percent and 23.0 percent,
respectively. According to Lipper Analytical Services, the
average of almost 2,000 general equity funds increased 31.1
percent and the average of more than 1,500 fixed income funds
increased 15.2 percent for the year. The Standard & Poor's 500
Common Stock Index returned 37.6 percent (with dividends
reinvested) in 1995.
2
<PAGE>
Looking to 1996, there are clear signs that the pace of
economic expansion is slowing but remains bright and
encouraging. This will be the year that tests the Fed's
two-year attempts at engineering a "soft landing" for this
latest economic cycle. If successful, the economy will grow at
the same "real" 2.5 percent pace of 1995. Continued corporate
cost control and productivity gains will support earnings and
low unemployment will keep consumer demand strong. Interest
rates will remain low and stable, reflecting underlying
inflation at about the same 3 percent level as 1995. Beneath
this scenario is the assumption that the Federal Reserve Board
will reduce short term interest rates to keep economic activity
growing. The Fed clearly telegraphed an end to its restrictive
bias when it lowered the Fed Funds rate by 0.25 percent last
July, the first decrease since 1992. A continued restrictive
policy by the Fed now would risk an economic "landing" much
harder than anyone desires. The accompanying reduction in
economic activity, employment and corporate profits would weigh
heavily on stock performance for the year. Bonds, typically,
perform better during a slowing in economic activity because low
activity usually means low pressure to increase prices. We
think that a "hard landing" will be avoided. Our view of 1996
is a return to "normal." Stock returns will be more like 10 to
15 percent, rather than the 25 to 40 percent plus rate of 1995.
Bonds will be stable, producing annual results in the six to
eight percent range, depending on the aggressiveness of the
particular bond or fund in question.
At December 31, 1995, the five Advance Capital I, Inc.
Funds held more than $230 million in total assets, a 57 percent
increase from the prior year. The performance of the funds
suggests that our security selections are on target with their
objectives. Our focus remains on the long term for each of the
funds. As we make investment decisions, we will add to existing
positions and extend diversification to new holdings to maintain
broadly diversified portfolios in each of the five funds. We
fully expect this approach, coupled with careful attention to
costs will continue to serve each of our investors well, over
time. We thank you for your continued confidence and look
forward to providing you and others with service and results
designed to meet or exceed your long term investment objectives.
If you have questions or if we may be of service, please call
us. We appreciate the opportunity to answer your questions or
to discuss financial or investment matters that may be of
interest to you. Our toll-free number is (800) 345-4783.
Sincerely,
/s/ Robert J. Cappelli /s/ John C. Shoemaker
Robert J. Cappelli John C. Shoemaker
February 8, 1996
3
<PAGE>
INVESTMENT PERFORMANCE
Advance Capital I Inc. is an open-end, diversified
management investment company offering investment opportunities
in five mutual fund portfolios.
The accompanying comments are intended to help investors
evaluate the dynamics of mutual fund performance. The charts
and tables that follow show the average annual return of each
Fund as well as selected measures of general stock and bond
market returns. The Consumer Price Index (CPI) is also shown to
illustrate the impact inflation has on investment returns.
Figures for the life of the Bond and Balanced Funds begin
August 31, 1987, a few days after the funds started. The Long
Term Income Fund and Retirement Income Fund figures begin
January 1, 1993, the start date for those funds. The historic
figures for the Equity Growth Fund begin January 1, 1994, a few
days after the substantial change in the investment objectives
and the addition of a sub-investment advisor to the Fund.
THE EQUITY GROWTH FUND IN 1995
The Advance Capital I Equity Growth Fund seeks long - term
growth of capital by investing primarily in common stocks of
small, rapidly growing companies.
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES
<S> <C>
Computer Software 10.1%
Computer Peripherals 6.3%
Financial Services 5.7%
Retail Store 5.4%
Medical Services 4.8%
</TABLE>
This year marked the second full year under the new
investment objectives of the Fund and the sub-investment advisor
relationship with T. Rowe Price & Associates. For 1995, the
Equity Growth Fund returned 38.0 percent, while the NASDAQ
Composite Index returned 39.9 percent and the S&P 500 Index
(with dividends reinvested) returned 37.6 percent. The graph on
page 5 shows the cumulative performance of the Equity Growth
Fund, the S&P 500 Index, the NASDAQ Composite Index and the
Consumer Price Index (CPI) since the beginning of 1994.
The inflationary fears that fueled a decline in stocks in
1994, were replaced with a more "rational" view of expected
inflation in 1995. The year began with the Federal Reserve
raising interest rates in February, the last in a series that
began in 1994. These policy actions by the Fed began to slow
the growth in manufacturing output, consumer spending and
employment. As growth slowed and inflation fears subsided, the
Federal Reserve cut interest rates in July and again in
December. Since small emerging companies rely on capital for
growth, falling interest rates
4
<PAGE>
reduce the cost of financing and increased investor expectations
of growth in these companies. Combined with solid corporate
earnings, investors aggressively bid up the prices on all stocks,
in particular small and mid-cap growth stocks. The Equity Growth
Fund returned almost 10 percent in the first quarter and over 19
percent by mid-year. The technology industry was the outstanding
performer for the year as corporations, individuals and institutions
continued to buy computers and related software in further attempts
to increase efficiency and competitiveness in a globalized, highly
computerized environment.
Today, the Equity Growth Fund remains well diversified with
holdings in more than 261 companies and 59 industries. As the
economy continues to slow, smaller companies may begin to
experience earning pressures, but a well-diversified portfolio
is intended to ease the individual company effect on total
return. Unlike the outstanding year just finished, the year
ahead appears poised to produce more "normal" returns of around
10 to 15 percent for small to mid-sized company funds. This
view is based on a moderately growing economy, low inflation,
high employment and the always "wild card" of an election year.
THE EQUITY GROWTH FUND
[EDGAR REFERENCE - S & P 500, NASDAQ, EQUITY GROWTH AND CPI
INDEX LINE CHART FOR 1993-1995]
<TABLE>
<CAPTION>
Average Annual Returns for Periods Ended December 31, 1995
Past 1 Past 5 Life of
Year Years Fund
------ ------ ------
<S> <C> <C> <C>
Equity Growth Fund 38.00% N/A 15.10%
NASDAQ Composite Index 39.92% N/A 16.33%
S&P 500 Index 37.55% N/A 18.00%
Consumer Price Index (CPI) 2.52% N/A 2.58%
</TABLE>
Past performance should not be used to attempt to predict
future performance.
5
<PAGE>
THE BOND FUND IN 1995
The Advance Capital I Bond Fund seeks to provide investors
with stable income from high quality investment grade bonds and
U.S. government bonds.
<TABLE>
<CAPTION>
AS OF 12/31/95
<S> <C>
Average Maturity 8 Years
Average Quality A+
Average Duration 5.8 Years
Size $4.5 Million
</TABLE>
The Bond Fund returned 20.2 percent for 1995. This return
represents 6.8 percent income distributed to shareholders and a
13.4 percent increase in share price. The performance was above
the 15.2 percent return of the average performance of 1,520
fixed income funds reported by Lipper Analytical Services, but
below the 29.9 percent return of the Lehman Brothers Government
- - - Corporate Bond Index. The accompanying graph shows the
cumulative performance of the Bond Fund, the Balanced Fund, the
Lehman Brothers Government - Corporate Bond Index, the Consumer
Price Index and the S&P 500 Index (with dividends reinvested).
The investment environment of this past year was favorable
for practically all fixed income securities. The rapid decline
of interest rates and lower "perceived" inflation throughout
1995, can be attributed to slower economic growth and an
aggressive monetary policy by the Federal Reserve Board. In
1994, fixed income securities performed poorly due to
expectations of higher inflation and an economy that seemed on
the verge of growing "out of control". In 1995, the inflation
mis-perceptions began to dissipate as consumer spending slowed,
business productivity increased and consumer confidence
declined. By year end, pessimism had been replaced with
optimism and sound judgment about the long term outlook for
inflation.
At the end of 1995, the average maturity of the Bond Fund
was about 8 years, a slight decrease from the prior year, but in
middle of its target range of 5 to 10 years. The reduction in
average maturity resulted more from the passage of time rather
than a strategic decision to change. The declining interest
rate environment of 1995, and the addition of new bonds with
maturities slightly longer than average, stabilized duration at
about 5.8 years. Duration measures the sensitivity of a bond
portfolio to changes in interest rates and is an active part of
portfolio management.
Today, the economy is growing at a sustainable level,
inflation remains in-check and the federal deficit appears
headed for control. If Washington can agree on true fiscal
reform and the economy continues to grow at a manageable level,
the long term outlook for interest rates is bright. The Bond
Fund's average maturity and high quality is structured well for
this continued-success view of the economy in 1996.
6
<PAGE>
THE BALANCED FUND IN 1995
The Advance Capital I Balanced Fund seeks to provide
capital appreciation, current income and preservation of capital
by investing in a diversified portfolio of common stocks and
bonds.
<TABLE>
<CAPTION>
AS OF 12/31/95
<S> <C>
Bonds 36%
Small Stocks 21%
Large Stocks 43%
Size $59 Million
</TABLE>
The Balanced Fund increased 31.5 percent in 1995. In
comparison the Lehman Brothers Government - Corporate Bond Index
increased 29.9 percent and the S&P 500 Index (with dividends
reinvested) increased 37.6 percent. The accompanying graph
illustrates the cumulative performance of the Balanced Fund, the
Bond Fund, the Lehman Brothers Government - Corporate Bond
Index, the S&P 500 Index (with dividends reinvested) and the
Consumer Price Index (CPI) since August 1987, the Fund's
inception. The Fund averages approximately 60 percent stocks
and 40 percent bonds. The stocks are comprised of both
small-to-midsized company growth stocks as well as large-company
value stocks. The bonds consist of investment grade quality
issues and United States Treasury bonds and/or notes.
As outlined in the discussion about the Bond Fund, the
inflation mis-perceptions of the prior year were replaced with
sound judgment on inflation and growth in the economy this year.
As interest rates declined, the purchasing power and value of
existing bonds increased. The bonds in the Balanced Fund
produced double digit returns for the year. Though somewhat
longer in maturity and slightly lower in average quality, the
Balanced Fund bond portfolio is similar to the Bond Fund
portfolio.
The stocks in the Balanced Fund consist of approximately 67
percent large-company stocks and 33 percent small-to-midsized
company growth stocks. Since the end of 1993, T. Rowe Price &
Associates has been responsible for the day-to-day investment
decisions of the stocks in the Fund. Throughout 1995, both
large and small company stocks performed well as a result of an
overall increase in corporate earnings and a bullish sentiment
on inflation. As a result of the rapid increase in stock prices
early in the year, the stock allocation of the Fund had risen to
almost 70 percent of the total. This stock allocation was
reduced toward the 60 percent target in two moves, one in March
and one in May of 1995.
Today, stocks represent approximately 65 percent of the
Fund and bonds about 35 percent. The Fund is well diversified
with 398 stocks and 54 bond holdings. Our view is for continued
moderate economic growth, solid corporate earnings and low
inflation. In this environment, the bonds in the Balanced Fund
should return 6 to 7 percent and the stocks, 10 to 15 percent.
7
<PAGE>
[EDGAR REFERENCE - S & P 500, LBGC, BOND, BALANCED AND CPI INDEX
LINE CHART FOR 1987-1995]
<TABLE>
<CAPTION>
Average Annual Returns for Periods Ended December 31, 1995
Past 1 Past 5 Life of
Year Years Fund
------ ------ ------
<S> <C> <C> <C>
Bond Fund 20.15% 9.33% 8.89%
Balanced Fund 31.53% 10.37% 8.06%
Lehman Brothers Government
Corporate Bond Index (LBGC) 29.93% 10.86% 10.37%
S&P 500 Index 37.55% 16.55% 11.56%
Consumer Price Index (CPI) 2.52% 2.79% 3.62%
</TABLE>
Past performance should not be used to attempt to predict
future performance.
THE LONG TERM INCOME FUND IN 1995
The Advance Capital I Long Term Income Fund seeks to
provide investors with current income by investing in investment
grade bonds with long maturities.
<TABLE>
<CAPTION>
AS OF 12/31/95
<S> <C>
Average Maturity 19 Years
Average Quality A
Average Duration 9.3 Years
Size $1.5 Million
</TABLE>
The Long Term Income Fund returned 25.6 percent for the
year. This return reflects 6.9 percent from income distributed
to shareholders and an 18.7 percent increase in share price. By
comparison the Lehman Brothers Government - Corporate Index
returned 29.9 percent for the year. The accompanying graph
shows the cumulative return of the Long Term Income Fund, the
Retirement Income Fund, the Lehman Brothers Government -
Corporate Bond Index and the Consumer Price Index (CPI) since
January 1993.
8
<PAGE>
The positive return for the Long Term Income Fund can be
attributed to its long average maturity objective. In 1994,
investor fears of rising inflation and interest rates negatively
impacted bonds with long average maturities. This year, as
economic activity "softened", the inflation expectations
declined and the value of bonds with long average maturities
began to rise. Throughout the year, the average maturity of the
Fund declined to about nineteen years and the average quality
remained an A. The high average quality helped the return
relative to comparable securities of lesser quality as investors
bid up these issues in anticipation of slower economic growth.
Today, the bond market appears to be reacting to inflation
as if it is under control, the economy is stable and the
budgetary problems in Washington are on the road to progress.
Considering this, the structure of the Long Term Income Fund is
well positioned for a more "normal" investment environment for
1996.
THE RETIREMENT INCOME FUND IN 1995
The Advance Capital I Retirement Income Fund seeks to
provide investors with current income by investing at least 65%
in investment grade corporate and U.S. Government bonds and as
much as 33% in lower-rated higher-yielding instruments.
<TABLE>
<CAPTION>
AS OF 12/31/95
<S> <C>
Average Maturity 17 Years
Average Quality BBB
Average Duration 8.5 Years
Size $139 Million
</TABLE>
The Retirement Income Fund returned 23.0 percent for the
year. This return was comprised of 7.6 percent from income
distributed to shareholders and a 15.4 percent increase in share
price. For the year, the Fund's performance was below the 29.9
percent increase reported by Lehman Brothers Government -
Corporate Bond Index. The accompanying graph shows the
cumulative performance of the Retirement Income Fund, the Long
Term Income Fund, the Lehman Brothers Government - Corporate
Bond Index and the Consumer Price Index (CPI) since January
1993, the Fund's inception.
Throughout the year, the Retirement Income Fund held more
than 66 percent in investment grade bonds. Generally, more than
30 percent of the Fund was invested in high yield or "junk"
bonds. The investment grade portion of the Fund has an average
maturity of about 21 years. In anticipation of falling interest
rates, a strategic decision was made to begin lengthening the
average maturity of this portion of the Fund, by adding longer
term bonds. By the end of the 1995, the long term government
bond yield had fallen from a high of about 8 percent to around 6
percent. A combination of the Federal Reserve's aggressive
stance on inflation, large productivity gains in the private
sector and an apparent realization in Washington that deficit
spending must be stopped, led to an outstanding year for longer
term investment grade quality bonds.
9
<PAGE>
The high yield or "junk" portion of the fund consists of
securities with lower credit ratings and higher risk than
investment grade bonds. As interest rates declined throughout
1995, this portion of the fund also performed well. In
anticipation of a "softening" economy and increased earnings
pressure on lower-rated companies, a strategic decision was made
to raise the average quality of the high yield portion of the
portfolio. This action served the portfolio well as lower
quality high-yield bonds generally fared worse during 1995 than
did the higher quality portion of the same high-yield market.
The principal focus, however, continues to be broad
diversification among industries, maturities and quality to
manage risk in this portfolio.
Today, the Fund holds approximately 67 percent investment
grade bonds and 33 percent high yield bonds. Strategically we
are continuing to favor higher quality "junk" bonds in
anticipation of increased pricing pressures on lower quality
issues. Also, facing a very strong bond market, we have
maintained a higher than average cash balance and have slightly
shortened the average maturity of the Fund.
[EDGAR REFERENCE - LONG TERM, LBGC, RETIREMENT INCOME AND CPI
INDEX LINE CHART FOR 1992-1995]
<TABLE>
<CAPTION>
Average Annual Returns for Periods Ended December 31, 1995
Past 1 Past 5 Life of
Year Years Fund
------ ----- ------
<S> <C> <C> <C>
Long Term Income fund 25.57% N/A 10.33%
Retirement Income Fund 22.96% N/A 9.87%
Lehman Brothers Government
Corporate Bond Index (LBGC) 29.93% N/A 10.27%
Consumer Price Index (CPI) 2.52% N/A 2.63%
</TABLE>
Past performance should not be used to attempt to predict
future performance.
10
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY GROWTH
-------------------------------------------------
Years ended December 31
-------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year. . . . . $9.08 $9.46 $9.94 $9.83 $8.89
--------- --------- --------- --------- ---------
Income from investment operations
Net investment income (loss). . . . . . . . (0.03) (0.03) 0.12 0.10 0.14
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . 3.48 (0.35) 0.07 0.11 1.78
--------- --------- --------- --------- ---------
Total from investment operations. . . . . . 3.45 (0.38) 0.19 0.21 1.92
--------- --------- --------- --------- ---------
Less distributions
Net investment income . . . . . . . . . . . 0.00 0.00 (0.12) (0.10) (0.14)
Net realized gain on investment . . . . . . 0.00 0.00 (0.55) 0.00 (0.84)
--------- --------- --------- --------- ---------
Total distributions . . . . . . . . . . . . 0.00 0.00 (0.67) (0.10) (0.98)
--------- --------- --------- --------- ---------
Net asset value, end of year. . . . . . . . . $12.53 $9.08 $9.46 $9.94 $9.83
========= ========= ========= ========= =========
TOTAL RETURN . . . . . . . . . . . . . . . . 38.00% -4.02% 2.13% 2.22% 20.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (in thousands). . .$25,625 $12,634 $7,577 $7,094 $6,275
Ratio of expenses to average net asset. . . 1.12% 1.21% 1.16% 1.22% 1.38%
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . -0.29% -0.30% 1.27% 1.05% 1.37%
Portfolio turnover rate . . . . . . . . . . 13.86% 18.05% 135.55% 96.05% 86.48%
</TABLE>
See Notes To Financial Statements
11
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND
-------------------------------------------------
Years ended December 31
-------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year. . . . . $9.61 $10.82 $10.51 $10.52 $9.91
--------- --------- --------- --------- ---------
Income from investment operations
Net investment income (loss). . . . . . . . 0.70 0.71 0.72 0.70 0.74
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . 1.18 (1.21) 0.45 0.01 0.62
--------- --------- --------- --------- ---------
Total from investment operations. . . . . . 1.88 (0.50) 1.17 0.71 1.36
--------- --------- --------- --------- ---------
Less distributions
Net investment income . . . . . . . . . . . (0.70) (0.71) (0.72) (0.70) (0.74)
Net realized gain on investment . . . . . . 0.00 0.00 (0.14) (0.02) (0.01)
--------- --------- --------- --------- ---------
Total distributions . . . . . . . . . . . . (0.70) (0.71) (0.86) (0.72) (0.75)
--------- --------- --------- --------- ---------
Net asset value, end of year. . . . . . . . . $10.79 $9.61 $10.82 $10.51 $10.52
========= ========= ========= ========= =========
TOTAL RETURN . . . . . . . . . . . . . . . . 20.15% -4.64% 11.48% 7.04% 14.26%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (in thousands). . . $4,527 $3,999 $4,741 $5,793 $2,439
Ratio of expenses to average net asset. . . 0.55% 0.60% 0.61% 0.75% 0.85%
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . 6.80% 7.06% 6.57% 6.69% 7.36%
Portfolio turnover rate . . . . . . . . . . 6.69% 21.92% 35.99% 38.22% 25.47%
</TABLE>
See Notes To Financial Statements
12
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED
-------------------------------------------------
Years ended December 31
-------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year. . . . . $9.97 $10.58 $10.36 $10.38 $9.55
--------- --------- --------- --------- ---------
Income from investment operations
Net investment income (loss). . . . . . . . 0.35 0.32 0.29 0.33 0.39
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . 2.75 (0.61) 0.22 (0.02) 1.39
--------- --------- --------- --------- ---------
Total from investment operations. . . . . . 3.10 (0.29) 0.51 0.31 1.78
--------- --------- --------- --------- ---------
Less distributions
Net investment income . . . . . . . . . . . (0.35) (0.32) (0.29) (0.33) (0.39)
Net realized gain on investment . . . . . . (0.15) 0.00 0.00 0.00 (0.56)
--------- --------- --------- --------- ---------
Total distributions . . . . . . . . . . . . (0.50) (0.32) (0.29) (0.33) (0.95)
--------- --------- --------- --------- ---------
Net asset value, end of year. . . . . . . . . $12.57 $9.97 $10.58 $10.36 $10.38
========= ========= ========= ========= =========
TOTAL RETURN . . . . . . . . . . . . . . . . .31.53% -2.72% 4.97% 3.07% 18.32%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (in thousands). . .$59,299 $44,221 $46,690 $42,440 $22,677
Ratio of expenses to average net asset. . . 1.07% 1.10% 1.08% 1.13% 1.38%
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . 3.11% 3.18% 2.77% 3.24% 3.75%
Portfolio turnover rate . . . . . . . . . . 22.72% 34.97% 101.29% 42.39% 50.94%
</TABLE>
See Notes To Financial Statements
13
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
LONG TERM INCOME
-----------------------------
Years ended December 31
-----------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year. . . . . $9.20 $10.60 $10.00
--------- --------- ---------
Income from investment operations
Net investment income (loss). . . . . . . . 0.70 0.72 0.74
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . 1.58 (1.40) 0.77
--------- --------- ---------
Total from investment operations. . . . . . 2.28 (0.68) 1.51
--------- --------- ---------
Less distributions
Net investment income . . . . . . . . . . . (0.70) (0.72) (0.74)
Net realized gain on investment . . . . . . 0.00 0.00 (0.17)
--------- --------- ---------
Total distributions . . . . . . . . . . . . (0.70) (0.72) (0.91)
--------- --------- ---------
Net asset value, end of year. . . . . . . . . $10.78 $9.20 $10.60
========= ========= =========
TOTAL RETURN . . . . . . . . . . . . . . . . 25.57% -6.53% 14.43%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (in thousands). . . $1,450 $1,163 $1,079
Ratio of expenses to average net asset. . . 0.63% 0.63% 0.64%
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . 6.93% 7.37% 6.60%
Portfolio turnover rate . . . . . . . . . . 1.74% 15.39% 75.72%
</TABLE>
See Notes To Financial Statements
14
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT INCOME
-----------------------------
Years ended December 31
-----------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year. . . . . $9.22 $10.54 $10.00
--------- --------- ---------
Income from investment operations
Net investment income (loss). . . . . . . . 0.76 0.76 0.82
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . 1.29 (1.32) 0.61
--------- --------- ---------
Total from investment operations. . . . . . 2.05 (0.56) 1.43
--------- --------- ---------
Less distributions
Net investment income . . . . . . . . . . . (0.76) (0.76) (0.82)
Net realized gain on investment . . . . . . 0.00 0.00 (0.07)
--------- --------- ---------
Total distributions . . . . . . . . . . . . (0.76) (0.76) (0.89)
--------- --------- ---------
Net asset value, end of year. . . . . . . . . $10.51 $9.22 $10.54
========= ========= =========
TOTAL RETURN . . . . . . . . . . . . . . . . 22.96% -5.34% 13.92%
Ratios and Supplemental Data
Net assets, end of year (in thousands). . $139,299 $84,162 $47,343
Ratio of expenses to average net asset. . . 0.84% 0.88% 0.88%
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . 7.64% 7.89% 7.41%
Portfolio turnover rate . . . . . . . . . . 15.63% 12.27% 37.59%
</TABLE>
See Notes To Financial Statements
15
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ----------
<S> <C> <C> <S> <C> <C>
ADVERTISING - 0.6% BROADCASTING / CABLE TV - 2.2% (Continued)
Catalina Marketing Corporati 1,800 $ 112,950 Comcast Corporation 5,700 $ 103,668
Heritage Media Corporation* 2,000 51,250 Viacom - Class B* 3,000 142,125
Westwood One, Inc.* 4,000 56,500
AIR TRANSPORT - 1.1%
Air Express International Co 3,000 69,000 BUILDING MATERIALS - 0.6%
Atlantic Southeast Airlines, 2,500 53,750 Lafarge Corporation 3,500 65,188
Comair Holdings, Inc. 3,000 80,625 USG Corporation* 2,900 87,000
Fritz Companies, Inc.* 2,000 83,000
CHEMICAL - 2.7%
APPAREL - 0.7% A. Schulman, Inc. 3,500 78,750
Kellwood Company 1,750 35,656 Airgas, Inc.* 5,300 176,225
Nautica Enterprises, Inc.* 3,000 131,250 Crompton & Knowles 3,600 47,700
Great Lakes Chemical Corpora 1,100 79,200
AUTO PARTS - 0.2% Lilly Industries, Inc. 4,000 51,000
Superior Industries Int'l, I 2,400 63,300 Oil-Dri Corporation America 2,700 42,188
Olin Corporation 1,000 74,250
AUTO & TRUCKS - 0.2% Sherwin-Williams Company 2,500 101,875
Wabash National Corporation 2,500 55,937 Wellman, Inc. 2,200 50,050
BANK - 4.1% COMPUTER & PERIPHERALS - 6.3%
Bank of New York Company, In 2,300 112,125 Bay Networks, Inc.* 4,500 185,062
Bank South Corporation 1,800 54,675 Cabletron Systems, Inc.* 2,000 162,000
BayBanks, Inc. 1,000 98,250 Cisco Systems, Inc.* 2,400 179,100
City National Corporation 5,000 70,000 Compaq Computer Corporation* 2,500 120,000
Crestar Financial Corporatio 1,000 59,125 EMC Corporation* 4,300 66,112
First American Corporation 3,700 175,288 Microchip Technology, Inc.* 2,450 89,425
First Bank Systems, Inc. 2,000 99,250 SCI Systems, Inc.* 2,000 62,000
Midlantic Corporation 2,900 190,312 Seagate Technology* 3,800 180,500
Norwest Corp. 2,576 85,008 Silicon Graphics, Inc.* 3,000 82,500
State Street Boston Corporat 2,300 103,500 Sun Microsystems, Inc.* 5,200 237,250
3COM Corporation, Inc.* 3,000 139,875
BEVERAGE - 0.5% Xilinx, Inc.* 3,300 100,650
Adolph Coors Company 1,700 37,612
Robert Mondavi Corporation* 3,000 82,875 COMPUTER SOFTWARE & SERVICES - 10.1%
Acclaim Entertainment, Inc.* 1,200 14,850
BROADCASTING / CABLE TV - 2.2% Adobe Systems, Inc. 3,000 186,000
A.H. Belo Corporation 2,000 69,500 America Online, Inc.* 3,200 120,000
Clear Channel Communications 4,500 198,562 BMC Software, Inc.* 2,800 119,700
</TABLE>
See Notes To Financial Statements
16
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ----------
<S> <C> <C> <S> <C> <C>
COMPUTER SOFTWARE & SERVICES - 10.1% (Cont'd) ELECTRONICS - 3.5%
Broderbund Software, Inc.* 1,900 $ 115,425 Altera Corporation* 1,700 $ 84,575
Cadence Design Systems, Inc. 2,000 84,000 General Instrument Corporati 3,200 74,800
Ceridian Corporation* 3,500 144,375 Harman International Industr 2,100 84,262
Cerner Corporation* 1,400 28,700 Lam Research Corporation* 2,300 105,225
Davidson & Associates, Inc.* 2,400 52,800 Macromedia* 2,000 104,500
First Data Corporation 3,806 254,526 Molex, Inc. 3,750 114,844
FTP Software, Inc.* 2,300 66,700 Stratacom, Inc.* 1,000 73,500
HBO & Company 2,000 153,250 Symbol Technologies, Inc.* 2,600 102,700
Informix Corporation* 4,500 135,000 Ultratech Stepper, Inc.* 2,000 51,500
Intuit, Inc.* 1,200 93,600 Vishay Intertechnology, Inc. 3,150 99,225
Microsoft Corporation* 1,900 166,725
Minnesota Educ. Computing Co 2,500 62,500 ENVIRONMENTAL - 0.6%
Network General Corporation* 2,500 83,438 Sanifill, Inc.* 2,000 66,750
Oracle Corporation* 5,000 211,875 Western Waste Industries* 3,000 82,125
Peoplesoft, Inc.* 2,000 86,000
Security Dynamics Tech., Inc 1,000 54,500 FINANCIAL SERVICES - 5.7%
Sierra On-Line, Inc.* 3,000 86,250 CUC International, Inc.* 4,500 153,562
Sybase, Inc.* 3,000 108,000 Finova Group, Inc. 2,500 120,625
Symantec Corporation* 2,300 53,475 First USA, Inc. 2,500 110,938
Synopsys, Inc.* 2,000 76,000 Franklin Resources, Inc. 1,600 80,600
Wonderware Corporation* 2,000 34,250 Green Tree Financial Corpora 4,000 105,500
H & R Block, Inc. 1,300 52,650
DIVERSIFIED - 1.9% Medaphis Corporation* 4,000 148,000
Alco Standard Corporation 4,000 182,500 Mercury Finance Company 6,000 79,500
Danaher Corporation 2,500 79,375 Mutual Risk Management, Ltd. 3,800 173,850
Service Corp. International 2,600 114,400 Paychex, Inc. 4,650 231,919
Thermo Electron Corp.* 2,000 104,000 Pioneer Group, Inc. 3,000 81,750
United Asset Management Corp 2,100 80,588
DRUG - 3.2% Unitog Company 1,900 45,837
Amgen, Inc.* 5,600 332,500
Biogen, Inc.* 3,700 227,550 FOOD PROCESSING - 0.6%
Forest Laboratories, Inc.* 2,100 95,025 Goodmark Foods, Inc. 4,000 71,000
Isis Pharmaceuticals, Inc.* 4,000 52,500 Hormel Foods Corporation 3,400 83,725
Mylan Laboratories, Inc. 3,750 88,125
Roberts Pharmaceutical Corp. 1,600 28,400 FOREIGN TELECOMMUNICATIONS - 2.2%
Ericsson Telephone 10,000 195,000
ELECTRICAL EQUIPMENT - 0.6% Reuters Holdings PLC 3,900 214,988
Anixter International, Inc.* 5,000 93,125 Vodafone Group PLC 4,000 141,000
Littlefuse, Inc.* 1,500 55,125
</TABLE>
See Notes To Financial Statements
17
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ----------
<S> <C> <C> <S> <C> <C>
FURNITURE / HOME FURNISHINGS - 0.2% INSURANCE - 3.3% (Continued)
Shaw Industries, Inc. 3,000 $ 44,250 Value Health, Inc.* 1,100 $ 30,250
Zurich Reinsurance Centre Ho 2,500 75,938
GROCERY - 0.4%
Safeway, Inc.* 2,200 113,300 MACHINERY - 1.6%
AGCO Corporation 2,500 127,500
HOMEBUILDING - 0.6% Cascade Corporation 3,200 44,800
Lennar Corporation 2,100 52,762 Greenfield Industries, Inc. 2,500 78,125
Rouse Company 4,900 99,838 Parker-Hannifin Corporation 2,500 85,625
Tecumseh Products Company 700 36,575
HOTEL / GAMING - 2.3% TriMas Corporation 1,500 28,125
G-Tech Holdings Corporation* 1,500 39,188
Harrah's Entertainment, Inc. 1,800 43,650 MANUFACTURED HOUSING - 0.7%
HFS, Inc.* 3,500 286,125 Clayton Homes, Inc. 1,563 33,399
La Quinta Inns, Inc. 2,500 68,438 Oakwood Homes Corporation 3,500 134,312
Marcus Corporation 1,950 53,381
Mirage Resorts, Inc.* 2,500 86,250 MEDICAL SERVICES - 4.8%
Health Care & Retirement Cor 3,700 129,500
HOUSEHOLD PRODUCTS - 0.8% Health Management Associates 4,950 129,319
Amway Asia Pacific Ltd. 3,000 106,875 Horizon/CMS Healthcare Corp. 2,700 68,175
Lancaster Colony Corporation 2,500 93,125 Omnicare, Inc. 2,000 89,500
OrNda HealthCorp* 2,500 58,125
INDUSTRIAL PRODUCTS - 0.2% Pacific Physician Services, 2,500 45,000
Watts Industries, Inc. 2,000 46,500 United HealthCare Corporatio 4,900 320,338
Universal Health Services, I 1,900 84,312
INDUSTRIAL SERVICES - 1.4% U.S. Healthcare, Inc. 3,050 141,825
Equifax, Inc. 6,200 132,525 Vencor, Inc.* 5,400 175,500
Kelly Services, Inc. 2,300 63,825
Manpower, Inc. 2,400 67,500 MEDICAL SUPPLIES - 2.9%
Robert Half International, I 2,000 83,750 Amsco International, Inc.* 4,500 66,938
Cardinal Health, Inc. 3,250 177,938
INSURANCE - 3.3% Cordis Corporation* 2,200 221,100
AMBAC, Inc. 2,600 121,875 MediSense, Inc.* 2,000 63,250
Equitable of Iowa Companies 2,600 83,525 Summit Technology, Inc.* 3,000 101,250
Humana, Inc.* 3,100 84,863 Sybron Corporation* 5,000 118,750
MGIC Investment Corporation 2,000 108,500
Mid Atlantic Medical Service 3,600 87,300 METAL FABRICATING - 0.3%
Oxford Health Plans, Inc.* 1,600 118,200 Kennametal, Inc. 2,500 79,375
Progressive Corporation of O 2,800 136,850
</TABLE>
See Notes To Financial Statements
18
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - -----------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ----------
<S> <C> <C> <S> <C> <C>
METALS & MINING - 0.3% RAILROAD - 0.8%
Magma Copper Company* 3,000 $ 83,625 Kansas City Southern Ind., I 2,300 $ 105,225
Wisconsin Central Transporta 1,500 98,625
NATURAL GAS - 0.4%
Sonat, Inc. 3,000 106,875 REAL ESTATE INVESTMENT TRUST - 0.7%
National Health Investors, I 2,700 89,437
NEWSPAPER - 0.2% Security Capital Pacific Tru 4,500 88,875
Central Newspapers, Inc. 1,500 47,063
RECREATION - 2.4%
OFFICE EQUIPMENT & SUPPLIES - 0.7% Callaway Golf Company 4,400 99,550
Danka Business Systems PLC 2,000 74,000 Carmike Cinemas, Inc.* 6,000 135,000
Reynolds & Reynolds Company 2,700 104,962 Carnival Corporation 4,500 109,688
Electronic Arts, Inc.* 2,200 57,475
OILFIELD SERVICES - 1.0% Gaylord Entertainment Compan 2,915 80,891
BJ Services Company/Warrants 1,160 8,845 Harley-Davidson, Inc. 3,000 86,250
Pride Petroleum Services, In 6,000 63,750 Sturm, Ruger & Company, Inc. 2,000 54,750
Smith International, Inc.* 4,300 101,050
Triton Energy Corporation* 1,500 86,063 RESTAURANT - 1.3%
Apple South, Inc. 1,950 41,925
PACKAGING & CONTAINER- 0.4% Applebee's International, In 2,200 50,050
Sealed Air Corporation* 3,400 95,625 Brinker International, Inc.* 3,350 50,668
Outback Steakhouse, Inc.* 3,750 134,531
PAPER & FOREST PRODUCTS - 0.5% Sbarro, Inc. 3,000 64,500
Willamette Industries, Inc. 2,300 129,375
RETAIL STORE - 5.4%
PETROLEUM - 1.5% AutoZone, Inc.* 2,300 66,412
Apache Corporation 3,000 88,500 Bed Bath & Beyond, Inc.* 3,500 135,844
Devon Energy Corporation 2,500 63,750 Circuit City Stores, Inc. 2,800 77,350
Noble Affiliates, Inc. 3,900 116,512 Dollar General Corporation 6,093 126,430
Tosco Corporation 1,500 57,188 Fingerhut Companies, Inc. 2,000 27,750
United Meridian Corporation* 3,200 55,600 Gap, Inc. 1,000 42,000
General Nutrition Companies* 4,000 92,000
PRECISION INSTRUMENT - 0.9% Heilig-Meyers Company 2,300 42,262
KLA Instruments Corporation* 1,600 41,700 Lands' End, Inc.* 4,200 57,225
Tektronix, Inc. 2,000 98,250 Lowe's Companies, Inc. 2,400 80,400
Teleflex, Inc. 2,500 102,500 Men's Wearhouse, Inc.* 2,250 57,937
Michaels Stores, Inc.* 3,300 45,375
PUBLISHING - 0.8% Office Depot, Inc.* 6,150 120,694
Edmark Corporation* 2,400 75,600 Pep Boys-Manny, Moe & Jack 2,000 51,250
Scholastic Corporation* 1,500 116,625
</TABLE>
See Notes To Financial Statements
19
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ----------
<S> <C> <C> <S> <C> <C>
RETAIL STORE - 5.4% (Continued) TELECOMMUNICATIONS SERVICE - 1.9%
Starbucks Corporation* 4,000 $ 84,000 Cellular Commun. of Puerto R 1,500 $ 41,625
Viking Office Products, Inc. 3,200 148,800 Centennial Cellular Corporat 2,500 42,812
Williams-Sonoma, Inc.* 3,000 55,500 Frontier Corporation 3,600 108,000
Zale Corporation* 5,000 80,625 LCI International, Inc.* 6,400 131,200
Paging Network, Inc.* 5,000 121,875
SECURITIES BROKERAGE - 0.7% United States Cellular Corpo 1,500 50,250
Charles Schwab Corporation 6,000 120,000
Investment Technology Group* 1,500 13,875 TEXTILE - 0.3%
Raymond James Financial, Inc 2,500 53,125 Unifi, Inc. 3,000 66,750
SEMICONDUCTOR - 4.3% THRIFT - 0.5%
Applied Materials, Inc.* 2,800 110,250 JSB Financial Corporation 2,000 63,250
Atmel Corporation* 3,400 76,075 Roosevelt Financial Group, I 2,800 54,250
Integrated Device Technology 5,600 72,100
International Rectifier Corp 4,600 115,000 TOYS - 0.4%
Linear Technology Corporatio 5,400 211,950 Mattel, Inc. 3,300 101,475
LSI Logic Corporation* 2,000 65,500
Maxim Integrated Products, I 9,000 346,500 TRUCKING & TRANSPORT LEASING - 0.6%
S3, Inc.* 2,900 51,113 American Freightways Corp.* 2,400 24,900
Teradyne, Inc.* 2,600 64,675 M.S. Carriers, Inc.* 2,900 58,000
Werner Enterprise, Inc. 4,000 81,000
SHOE - 0.4% ----------
Wolverine World Wide, Inc. 3,000 94,500 TOTAL COMMON STOCK - 98.2%
(Cost $19,042,234) $25,173,380
STEEL - 0.6% ==========
Commercial Metals Company 2,500 61,875
Worthington Industries 5,000 104,063
TELECOMMUNICATIONS EQUIPMENT - 4.1%
Andrew Corporation* 2,625 100,406
Ascend Communications, Inc.* 2,000 162,250
Aspect Telecommunications Co 2,000 67,000
Cascade Communications Corp. 1,500 127,875
Cidco, Inc.* 1,900 48,450
Coherent Commun. Systems Cor 3,000 57,750
DSC Communications Corp.* 2,200 81,125
Glenayre Technologies, Inc.* 2,700 112,050
Tellabs, Inc.* 3,200 118,400
U.S. Robotics, Inc.* 2,000 175,500
</TABLE>
*Securities are non - income producing
See Notes To Financial Statements
20
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT PRINCIPAL MARKET
ISSUE RATING COUPON MATURITY AMOUNT VALUE
- - ----------------------------------- --------- ------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BANK - 10.4%
Banc One Corporation A+ 8.740 09/15/03 $ 100,000 $ 115,500
First Chicago NBD Corporation A 8.100 03/01/02 100,000 109,906
Harris Bankcorp, Inc. A+ 9.375 06/01/01 75,000 86,634
Morgan, J.P. & Company AA 8.500 08/15/03 100,000 113,719
Security Pacific Corporation A 9.750 05/15/99 40,000 44,363
CHEMICAL - 2.5%
duPont, E.I. de Nemours & Co. AA- 6.000 12/01/01 115,000 114,892
COMPUTER & PERIPHERALS - 1.8%
International Business Machines Cor A 7.250 11/01/02 75,000 80,453
ELECTRIC & GAS UTILITIES - 13.3%
Baltimore Gas & Electric Company A+ 6.125 07/01/03 150,000 147,770
Florida Power Corporation AA- 6.875 02/01/08 70,000 74,676
Kentucky Utilities Company AA- 7.375 12/01/02 75,000 76,677
Northern States Power Co. Minn. AA- 7.375 03/01/02 40,000 40,642
Ontario Hydro AA- 7.450 03/31/13 150,000 164,578
Public Service Co. of Oklahoma A+ 7.250 01/01/99 50,000 50,487
Public Service Electric & Gas A- 7.000 09/01/24 50,000 49,281
ENVIRONMENTAL - 1.1%
Waste Management, Inc. A+ 7.650 03/15/11 45,000 49,417
FINANCIAL SERVICES - 4.8%
BHP Finance USA Ltd. A 7.875 12/01/02 100,000 109,499
General Electric Capital Corporatio AAA 7.750 03/15/02 100,000 109,944
FOREIGN GOVERNMENT - 6.2%
Province of Ontario AA- 7.625 06/22/04 100,000 110,188
Province of Quebec A+ 8.800 04/15/03 150,000 171,890
GOVERNMENTAL AGENCY - 1.1%
Tennessee Valley Authority Not Rated 6.125 07/15/03 50,000 49,688
</TABLE>
See Notes To Financial Statements
21
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT PRINCIPAL MARKET
ISSUE RATING COUPON MATURITY AMOUNT VALUE
- - ----------------------------------- --------- ------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INSURANCE - 8.7%
Aetna Life & Casualty Company A- 6.375 08/15/03 $ 110,000 $ 110,413
Allstate Corporation A 7.500 06/15/13 100,000 107,531
CIGNA Corporation BBB+ 8.250 01/01/07 100,000 115,483
Travelers, Inc. A+ 7.625 01/15/97 57,000 58,087
MACHINERY - 5.3%
Caterpillar, Inc. A 9.000 04/15/06 100,000 119,646
Deere & Company A 8.950 06/15/19 100,000 121,637
METALS & MINING - 2.8%
Alcan Aluminum Ltd. A- 5.875 04/01/00 125,000 124,961
NEWSPAPER - 1.5%
Knight-Ridder, Inc. AA- 9.875 04/15/09 50,000 66,203
OFFICE EQUIPMENT & SUPPLIES - 0.8%
Xerox Corporation A 9.750 03/15/00 30,000 34,331
PETROLEUM - 5.2%
BP America, Inc. AA- 8.750 02/01/03 75,000 86,993
Kerr-McGee Corporation A- 7.000 11/01/11 150,000 149,509
RAILROAD - 2.5%
Missouri Pacific Railroad Co. AA- 9.400 12/15/00 100,000 114,160
RETAIL STORE - 6.5%
Sears, Roebuck & Company BBB 9.250 08/01/97 200,000 210,438
Wal-Mart Stores, Inc. AA 8.625 04/01/01 75,000 84,141
SECURITIES BROKERAGE - 7.2%
Lehman Brothers Holdings, Inc. A 8.875 03/01/02 150,000 167,766
Merrill Lynch & Company, Inc. A+ 8.230 04/30/02 150,000 156,632
SEMICONDUCTOR - 3.3%
Texas Instruments, Inc. A 8.750 04/01/07 125,000 148,122
</TABLE>
See Notes To Financial Statements
22
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT PRINCIPAL MARKET
ISSUE RATING COUPON MATURITY AMOUNT VALUE
- - ----------------------------------- --------- ------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS SERVICE - 6.9%
AT&T Corporation AA 7.125 01/15/02 $ 100,000 $ 106,156
GTE Southwest, Inc. A+ 5.820 12/01/99 100,000 99,813
Pacific Bell Telephone Co. AA- 7.000 07/15/04 100,000 106,125
TOBACCO - 3.5%
Philip Morris Companies, Inc. A 7.500 01/15/02 100,000 105,938
Philip Morris Companies, Inc. A 9.250 12/01/97 50,000 53,141
U.S. GOVERNMENT - 2.6%
U. S. Treasury 7.500 02/15/05 105,000 119,093
----------
TOTAL FIXED-INCOME SECURITIES - 98.0%
(Cost $4,096,111) $4,436,523
==========
</TABLE>
See Notes To Financial Statements
23
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - --------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ---------
<S> <C> <C> <S> <C> <C>
ADVERTISING - 0.1% BANK - 5.4% (Continued)
Catalina Marketing Corporati 1,000 $ 62,750 City National Corporation 1,100 $ 15,400
Heritage Media Corporation* 1,000 25,625 First American Corporation 2,200 104,225
First Bank Systems, Inc. 1,300 64,512
AEROSPACE / DEFENSE - 1.3% First Chicago NBD Corporatio 6,335 250,232
Boeing Company 1,700 133,238 First Interstate Bancorp 1,400 191,100
General Motors Corp. - Class 1,500 73,688 First Tennessee National Cor 2,900 175,450
Loral Corporation 5,000 176,875 First Union Corporation 5,800 322,625
McDonnell Douglas Corporatio 2,400 220,800 Integra Financial Corporatio 1,000 63,125
Raytheon Company 3,200 151,200 J.P. Morgan & Company 2,000 160,500
KeyCorp 4,000 145,000
AIR TRANSPORT - 0.3% Mellon Bank Corporation 2,700 145,125
Air Express International Co 700 16,100 Mercantile Bancorporation, I 1,050 48,300
Atlantic Southeast Airlines, 1,000 21,500 Midlantic Corporation 2,500 164,062
Comair Holdings, Inc. 1,050 28,219 NationsBank Corporation 4,000 278,500
Pittston Services Group 3,000 94,125 PNC Bank Corporation 4,000 129,000
State Street Boston Corporat 1,200 54,000
APPAREL - 0.0%
Kellwood Company 1,400 28,525 BEVERAGE - 0.7%
Adolph Coors Company 800 17,700
AUTO PARTS - 0.2% Anheuser-Busch Companies, In 3,700 247,438
Borg-Warner Automotive, Inc. 1,000 32,000 Coca-Cola Company 500 37,125
Dana Corporation 1,600 46,800 PepsiCo, Inc. 1,500 83,812
Strattec Security Corporatio 240 4,320 Robert Mondavi Corporation* 1,500 41,438
Superior Industries Int'l, I 1,400 36,925
BROADCASTING / CABLE TV - 1.0%
AUTO & TRUCK - 0.4% A.H. Belo Corporation 1,400 48,650
Ford Motor Company 3,500 101,500 Capital Cities/ABC, Inc. 2,000 246,750
General Motors Corporation 2,400 126,900 Clear Channel Communications 1,600 70,600
Wabash National Corporation 1,000 22,375 Comcast Corporation 3,000 54,562
U.S. West Media Group* 4,000 76,000
BANK - 5.4% Viacom - Class B* 1,599 75,753
BankAmerica Corporation 1,000 64,750 Westwood One, Inc.* 700 9,888
Bank of Boston Corporation 1,000 46,250
Bank of New York Company, In 1,400 68,250 BUILDING MATERIALS - 0.2%
Barnett Banks, Inc. 5,200 306,800 Armstrong World Industries, 1,500 93,000
BayBanks, Inc. 700 68,775 Lafarge Corporation 1,000 18,625
Chase Manhattan Corporation 1,000 60,625 USG Corporation* 1,100 33,000
Chemical Banking Corporation 3,800 223,250
</TABLE>
See Notes To Financial Statements
24
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - --------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ---------
<S> <C> <C> <S> <C> <C>
CHEMICAL - 3.3% COMPUTER SOFTWARE & SERVICES - 1.9% (Cont'd)
A. Schulman, Inc. 2,000 $ 45,000 Brandon Systems Corporation 700 $ 17,937
Airgas, Inc.* 3,000 99,750 Broderbund Software, Inc.* 1,400 85,050
B.F. Goodrich Company 1,000 68,000 Ceridian Corporation* 2,000 82,500
Crompton & Knowles 1,500 19,875 Davidson & Associates, Inc.* 800 17,600
duPont, E.I. de Nemours & Co 3,500 244,562 First Data Corporation 1,744 116,630
Eastman Chemical Company 250 15,656 HBO & Company 1,000 76,625
Great Lakes Chemical Corpora 500 36,000 Informix Corporation* 1,000 30,000
Lilly Industries, Inc. 1,500 19,125 Microsoft Corporation* 1,000 87,750
Minnesota Mining & Manufactu 4,000 265,000 Oracle Corporation* 2,550 108,056
Monsanto Company 3,500 428,750 Sierra On-Line, Inc.* 1,000 28,750
Oil-Dri Corporation America 1,400 21,875 Sybase, Inc.* 1,400 50,400
Olin Corporation 700 51,975 Symantec Corporation* 1,000 23,250
Rohm & Haas Company 1,000 64,375 Synopsys, Inc.* 2,000 76,000
Sherwin-Williams Company 2,000 81,500 Wonderware Corporation* 800 13,700
Union Carbide Corporation 2,100 78,750
WD-40 Company 2,800 114,800 DIVERSIFIED - 1.4%
W.R. Grace & Company 2,500 147,812 Alco Standard Corporation 2,800 127,750
Wellman, Inc. 1,000 22,750 AlliedSignal, Inc. 5,100 242,250
Witco Corporation 1,700 49,725 Danaher Corporation 1,000 31,750
Premark International, Inc. 1,000 50,625
COMPUTER & PERIPHERALS - 1.5% Service Corp. International 2,100 92,400
Bay Networks, Inc.* 2,700 111,037 Textron, Inc. 1,500 101,250
Cabletron Systems, Inc.* 1,500 121,500 TRW, Inc. 1,000 77,500
Cisco Systems, Inc.* 2,000 149,250 United Technologies Corporat 1,100 104,363
Compaq Computer Corporation* 1,000 48,000
EMC Corporation* 3,000 46,125 DRUG - 3.6%
Microchip Technology, Inc.* 1,000 36,500 American Home Products Corp. 1,000 97,000
Seagate Technology* 2,000 95,000 Amgen, Inc.* 3,200 190,000
Silicon Graphics, Inc.* 1,500 41,250 Biogen, Inc.* 2,400 147,600
Sun Microsystems, Inc.* 1,600 73,000 Bristol-Myers Squibb Company 6,200 532,425
3COM Corporation, Inc.* 1,600 74,600 Forest Laboratories, Inc.* 1,100 49,775
Xilinx, Inc.* 2,100 64,050 Merck & Company, Inc. 8,000 526,000
Mylan Laboratories, Inc. 1,200 28,200
COMPUTER SOFTWARE & SERVICES - 1.9% Pfizer, Inc. 3,000 189,000
Adobe Systems, Inc. 1,200 74,400 Roberts Pharmaceutical Corp. 1,000 17,750
America Online, Inc.* 2,000 75,000 Schering-Plough Corporation 2,000 109,500
Automatic Data Processing, I 2,000 148,500 Warner-Lambert Company 1,900 184,538
BMC Software, Inc.* 1,000 42,750
</TABLE>
See Notes To Financial Statements
25
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - --------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ---------
<S> <C> <C> <S> <C> <C>
DRUGSTORE - 0.1% ENVIRONMENTAL - 0.4%
Rite Aid Corporation 2,000 $ 68,500 Browning-Ferris Industries, 3,000 $ 88,500
Western Waste Industries* 1,200 32,850
ELECTRIC & GAS UTILITIES - 3.4% WMX Technologies, Inc. 4,500 134,438
Baltimore Gas & Electric Com 5,700 162,450
CMS Energy Corporation 2,300 68,712 FINANCIAL SERVICES - 2.3%
Consolidated Edison Co. of N 1,900 60,325 American Express Company 5,000 207,500
Duke Power Company 3,400 161,075 Countrywide Credit Industrie 4,000 86,500
Entergy Corporation 4,000 117,000 CUC International, Inc.* 2,850 97,256
Florida Progress Corporation 5,500 194,562 Dean Witter, Discover & Comp 3,500 164,500
General Public Utilities Cor 3,600 122,400 Finova Group, Inc. 1,000 48,250
Hawaiian Electric Industries 2,300 89,125 First USA, Inc. 1,400 62,125
New England Electric System 1,700 67,362 Franklin Resources, Inc. 1,000 50,375
Niagra Mohawk Power Corporat 2,500 23,750 Green Tree Financial Corpora 2,000 52,750
Northern States Power Compan 2,500 122,812 H & R Block, Inc. 1,300 52,650
PacifiCorp 8,400 178,500 Household International, Inc 1,000 59,125
Public Service Enterprise Gr 1,900 58,188 Medaphis Corporation* 1,400 51,800
Public Service of Colorado 4,700 166,263 Mercury Finance Company 3,000 39,750
SCEcorp 6,500 115,375 Mutual Risk Management, Ltd. 2,500 114,375
TECO Energy, Inc. 7,700 197,313 Paychex, Inc. 1,500 74,812
Unicom Corporation* 3,500 114,625 Pioneer Group, Inc. 2,000 54,500
Travelers, Inc. 1,800 113,175
ELECTRICAL EQUIPMENT - 1.6% United Asset Management Corp 1,000 38,375
Anixter International, Inc.* 1,600 29,800 Unitog Company 1,000 24,125
Emerson Electric Company 2,500 204,375
General Electric Company 8,200 590,400 FOOD PROCESSING - 0.8%
Hubbell, Inc. 1,000 65,750 Goodmark Foods, Inc. 5,200 92,300
Littlefuse, Inc.* 1,000 36,750 Hershey Foods Corp. 1,400 91,000
Hormel Foods Corporation 1,000 24,625
ELECTRONICS - 0.7% Kellogg Company 1,500 115,875
Altera Corporation* 1,000 49,750 Sara Lee Corporation 4,500 143,438
General Instrument Corporati 1,500 35,062
Harman International Industr 1,050 42,130 FOREIGN TELECOMMUNICATIONS - 0.6%
Lam Research Corporation* 1,300 59,475 Ericsson Telephone 6,400 124,800
Macromedia* 800 41,800 Reuters Holdings PLC 2,400 132,300
Molex, Inc. 1,875 57,422 Vodafone Group PLC 2,100 74,025
Symbol Technologies, Inc.* 2,000 79,000
Ultratech Stepper, Inc.* 1,000 25,750 FURNITURE / HOME FURNISHINGS - 0.0%
Vishay Intertechnology, Inc. 1,500 47,250 Shaw Industries, Inc. 1,500 22,125
</TABLE>
See Notes To Financial Statements
26
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - --------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ---------
<S> <C> <C> <S> <C> <C>
GROCERY - 0.1% INSURANCE - 2.1% (Continued)
Safeway, Inc.* 1,600 $ 82,400 Equitable of Iowa Companies 2,100 $ 67,462
Humana, Inc.* 1,500 41,062
HOMEBUILDING - 0.3% MBIA, Inc. 1,500 112,500
Lennar Corporation 1,700 42,712 MGIC Investment Corporation 1,000 54,250
Rouse Company 7,000 142,625 Oxford Health Plans, Inc.* 800 59,100
Progressive Corporation of O 1,000 48,875
HOTEL / GAMING - 0.4% Zurich Reinsurance Centre Ho 1,000 30,375
G-Tech Holdings Corporation* 1,000 26,125
Harrah's Entertainment, Inc. 1,100 26,675 MACHINERY - 1.4%
HFS, Inc.* 1,000 81,750 AGCO Corporation 1,000 51,000
La Quinta Inns, Inc. 1,000 27,375 Alamo Group, Inc. 1,500 27,000
Marcus Corporation 1,950 53,380 Briggs & Stratton Corporatio 1,200 52,050
Mirage Resorts, Inc.* 1,000 34,500 Caterpillar, Inc. 1,800 105,750
Cummins Engine Company, Inc. 2,100 77,700
HOUSEHOLD PRODUCTS - 1.3% Deere & Company 4,200 148,050
Amway Asia Pacific Ltd. 1,000 35,625 Dover Corporation 5,200 191,750
Clorox Company 1,900 136,088 GATX Corporation 700 34,038
Colgate-Palmolive Company 3,100 217,775 Greenfield Industries, Inc. 900 28,125
Kimberly-Clark Corporation 2,900 239,975 JLG Industries, Inc. 600 17,850
Lancaster Colony Corporation 1,000 37,250 Parker-Hannifin Corporation 1,050 35,962
Proctor & Gamble Company 1,200 99,600 TriMas Corporation 1,500 28,125
Trinova Corporation 2,100 60,113
INDUSTRIAL PRODUCTS - 0.0%
Watts Industries, Inc. 1,000 23,250 MANUFACTURED HOUSING - 0.1%
Oakwood Homes Corporation 1,000 38,375
INDUSTRIAL SERVICES - 0.5%
Equifax, Inc. 4,600 98,325 MARITIME - 0.1%
Kelly Services, Inc. 700 19,425 American President Co's., Lt 2,000 46,000
Manpower, Inc. 1,500 42,188
PHH Corporation 1,600 74,800 MEDICAL SERVICES - 1.2%
Sylvan Learning Systems* 1,300 38,675 Health Care & Retirement Cor 3,900 136,500
Health Management Associates 2,475 64,659
INSURANCE - 2.1% Horizon/CMS Healthcare Corp. 2,000 50,500
AFLAC, Inc. 1,600 69,400 Mid Atlantic Medical Service 1,300 31,525
Allstate Corporation 3,615 148,667 Omnicare, Inc. 1,400 62,650
AMBAC, Inc. 1,300 60,938 OrNda HealthCorp* 1,000 23,250
American International Group 4,125 381,562 United HealthCare Corporatio 2,300 150,363
Aon Corporation 3,500 174,563 Universal Health Services, I 1,100 48,813
</TABLE>
See Notes To Financial Statements
27
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - --------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ---------
<S> <C> <C> <S> <C> <C>
MEDICAL SERVICES - 1.2% (Continued) OILFIELD SERVICES - 0.8%
U.S. Healthcare, Inc. 1,500 $ 69,750 Baker Hughes, Inc. 3,000 $ 73,125
Vencor, Inc.* 3,100 100,750 BJ Services Company/Warrants 1,200 9,150
Halliburton Company 3,500 177,188
MEDICAL SUPPLIES - 1.4% Pride Petroleum Services, In 2,800 29,750
Abbott Laboratories 3,600 150,300 Schlumberger, Ltd. 1,000 69,250
Amsco International, Inc.* 1,500 22,312 Smith International, Inc.* 2,300 54,050
Baxter International, Inc. 2,000 83,750 Triton Energy Corporation* 700 40,163
Cardinal Health, Inc. 1,200 65,700
Cordis Corporation* 1,400 140,700 PACKAGING & CONTAINER - 0.1%
Johnson & Johnson 700 59,938 Sealed Air Corporation* 2,000 56,250
McKesson Corporation 2,000 101,250
Medtronic, Inc. 1,800 100,575 PAPER & FOREST PRODUCTS - 0.7%
Summit Technology, Inc.* 1,050 35,438 International Paper Company 8,000 303,000
Sybron Corporation* 2,000 47,500 Weyerhaeuser Company 1,000 43,250
Willamette Industries, Inc. 800 45,000
METAL FABRICATING - 0.0%
Trinity Industries, Inc. 800 25,200 PETROLEUM - 4.4%
Amerada Hess Corporation 600 31,800
METALS & MINING - 0.7% Amoco Corporation 2,400 172,500
Aluminum Company of America 4,000 211,500 Apache Corporation 1,800 53,100
Inco Limited 2,000 66,500 Ashland Oil, Inc. 1,800 63,225
Kennametal, Inc. 1,000 31,750 Atlantic Richfield Company 1,000 110,750
Magma Copper Company* 1,000 27,875 British Petroleum Co. PLC 1,000 102,125
Placer Dome, Inc. 2,500 60,312 Devon Energy Corporation 1,500 38,250
Exxon Corporation 6,300 504,788
NATURAL GAS - 0.7% Mobil Corporation 5,000 560,000
Enron Corporation 5,400 205,875 Noble Affiliates, Inc. 2,800 83,650
Panhandle Eastern Corporatio 5,300 147,738 Royal Dutch/Shell Transport 3,400 479,825
Sonat, Inc. 1,800 64,125 Sun Company, Inc. 4,910 134,410
Tosco Corporation 1,000 38,125
NEWSPAPER - 0.2% Union Texas Petroleum Holdin 6,700 129,813
Central Newspapers, Inc. 1,000 31,375 United Meridian Corporation* 1,000 17,375
Gannett Company, Inc. 1,900 115,900 USX-Marathon Group 3,500 68,250
OFFICE EQUIPMENT & SUPPLIES - 0.6% PRECISION EQUIPMENT - 0.5%
Danka Business Systems PLC 1,000 37,000 Eastman Kodak Company 2,900 194,300
Reynolds & Reynolds Company 2,800 108,850 Tektronix, Inc. 1,000 49,125
Xerox Corporation 1,500 205,500 Teleflex, Inc. 1,000 41,000
</TABLE>
See Notes To Financial Statements
28
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - -------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ---------
<S> <C> <C> <S> <C> <C>
PUBLISHING - 0.5% RETAIL STORE - 1.8%
Edmark Corporation* 1,000 $ 31,500 AutoZone, Inc.* 1,000 $ 28,875
McGraw-Hill, Inc. 1,500 130,688 Bed Bath & Beyond, Inc.* 2,700 104,794
Reader's Digest Association, 1,000 51,250 Circuit City Stores, Inc. 2,200 60,775
Value Line, Inc. 2,500 96,250 Dollar General Corporation 4,000 83,000
Fingerhut Companies, Inc. 1,000 13,875
RAILROAD - 0.7% Gap, Inc. 500 21,000
Conrail, Inc. 1,500 105,000 General Nutrition Companies* 1,200 27,600
Kansas City Southern Ind., I 2,000 91,500 Heilig-Meyers Company 1,000 18,375
Union Pacific Corporation 2,000 132,000 J.C. Penney Company 1,100 52,388
Wisconsin Central Transporta 1,000 65,750 Lowe's Companies, Inc. 1,400 46,900
Men's Wearhouse, Inc.* 1,500 38,625
REAL ESTATE INVESTMENT TRUST - 0.9% Michaels Stores, Inc.* 1,000 13,750
DeBartolo Realty Corporation 5,000 65,000 Office Depot, Inc.* 2,900 56,912
Federal Realty Investment Tr 2,400 54,600 Pep Boys-Manny, Moe & Jack 1,000 25,625
Meditrust Corporation 2,500 87,188 Sears, Roebuck & Company 3,900 152,100
National Health Investors, I 1,600 53,000 Starbucks Corporation* 4,000 84,000
Nationwide Health Properties 2,000 84,000 Tandy Corporation 3,100 128,650
Security Capital Pacific Tru 2,000 39,500 Viking Office Products, Inc. 2,200 102,300
Starwood Lodging Trust 2,500 74,375 Zale Corporation* 1,000 16,125
Weingarten Realty Investors 2,200 83,600
SECURITIES BROKERAGE - 0.3%
RECREATION - 0.9% Bear Stearns Companies, Inc. 2,533 50,343
Brunswick Corporation 3,000 72,000 Charles Schwab Corporation 3,000 60,000
Callaway Golf Company 2,400 54,300 Investment Technology Group* 1,000 9,250
Carmike Cinemas, Inc. * 3,000 67,500 Merrill Lynch & Company, Inc 1,200 61,200
Carnival Corporation 2,000 48,750
Electronic Arts, Inc.* 1,700 44,412 SEMICONDUCTOR - 1.3%
Gaylord Entertainment Compan 1,050 29,138 Applied Materials, Inc.* 2,600 102,375
Harley-Davidson, Inc. 2,000 57,500 Atmel Corporation* 2,000 44,750
Time Warner, Inc. 1,200 45,300 Integrated Device Technology 2,800 36,050
Walt Disney Company 2,200 129,800 Intel Corporation 2,400 136,200
International Rectifier Corp 2,000 50,000
RESTAURANT - 0.6% Linear Technology Corporatio 2,200 86,350
Apple South, Inc. 1,500 32,250 Maxim Integrated Products, I 3,400 130,900
McDonald's Corporation 6,000 270,750 National Semiconductor Corp. 2,000 44,500
Outback Steakhouse, Inc.* 2,250 80,719 Texas Instruments, Inc. 2,400 123,600
</TABLE>
See Notes To Financial Statements
29
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - --------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET MARKET
COMMON STOCK SHARES VALUE COMMON STOCK SHARES VALUE
- - ----------------------------- -------- --------- ----------------------------- -------- ---------
<S> <C> <C> <S> <C> <C>
SHOE - 0.1% TIRE & RUBBER - 0.2%
Wolverine World Wide, Inc. 1,050 $ 33,075 Goodyear Tire & Rubber Compa 2,600 $ 117,975
STEEL - 0.3% TOBACCO - 0.8%
Nucor Corporation 1,500 85,688 American Brands, Inc. 2,000 89,250
Worthington Industries 4,000 83,250 Philip Morris Companies, Inc 4,300 388,075
Schweitzer-Mauduit Int'l, In 290 6,706
TELECOMMUNICATIONS EQUIPMENT - 0.6%
Andrew Corporation* 1,050 40,163 TOILETRIES / COSMETICS - 0.2%
Ascend Communications, Inc.* 500 40,562 Gillette Company 2,600 135,525
Cidco, Inc.* 800 20,400
Coherent Commun. Systems Cor 500 9,625 TOYS - 0.1%
DSC Communications Corp.* 1,800 66,375 Mattel, Inc. 2,500 76,875
Tellabs, Inc.* 1,200 44,400
U.S. Robotics, Inc.* 1,200 105,300 TRUCKING & TRANSPORT LEASING - 0.2%
M.S. Carriers, Inc.* 1,000 20,000
TELECOMMUNICATIONS SERVICE - 4.3% Ryder System, Inc. 1,000 24,750
ALLTEL Corporation 2,000 59,000 Werner Enterprise, Inc. 3,100 62,775
Ameritech Corporation 4,200 247,800 ------
AT&T Corporation 1,500 97,125 TOTAL COMMON STOCK - 63.1%
Bell Atlantic Corporation 4,100 274,188 (Cost $27,687,645) $37,385,382
BellSouth Corporation 10,000 433,750 ==========
Cellular Commun. of Puerto R 1,000 27,750
Centennial Cellular Corporat 1,000 17,125
Frontier Corporation 1,600 48,000
GTE Corporation 13,500 592,313
LCI International, Inc.* 3,000 61,500
Pacific Telesis Group 4,000 134,000
Paging Network, Inc.* 2,000 48,750
SBC Communications, Inc. 5,900 337,775
U.S. West Communications Gro 4,000 143,000
United States Cellular Corpo 600 20,100
TEXTILES - 0.0%
Unifi, Inc. 1,300 28,925
THRIFT - 0.5%
Federal Home Loan Mortgage C 1,000 83,500
Federal National Mortgage As 1,700 211,012
JSB Financial Corporation 1,000 31,625
</TABLE>
* Securities are non - income producing
See Notes To Financial Statements
30
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - --------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT PRINCIPAL MARKET
ISSUE RATING COUPON MATURITY AMOUNT VALUE
- - ----------------------------------- --------- ------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
AEROSPACE / DEFENSE - 0.4%
Lockheed Corporation A- 9.375 10/15/99 $ 100,000 $ 111,827
Rockwell International Corp. AA- 8.875 09/15/99 100,000 110,280
AUTO & TRUCK - 1.0%
General Motors Corporation A- 9.125 07/15/01 500,000 570,469
BANK - 4.1%
Bankers Trust New York Corp. A 9.500 06/14/00 250,000 285,665
Chase Manhattan Corp. A- 6.750 08/15/08 400,000 408,750
First Chicago NBD Corporation A 8.100 03/01/02 500,000 549,532
First Union Corporation A- 8.000 08/15/09 500,000 549,063
First Union Corporation A- 9.450 06/15/99 100,000 110,620
Morgan, J.P. & Company AA 8.500 08/15/03 500,000 568,595
CHEMICAL - 1.0%
Monsanto Company A 8.875 12/15/09 500,000 615,938
DIVERSIFIED - 1.1%
United Technologies Corporation A+ 9.625 05/15/99 100,000 101,141
Whitman Corporation BBB+ 8.250 02/15/07 500,000 568,333
ELECTRIC & GAS UTILITIES - 5.6%
Alabama Power Company A+ 8.500 05/01/22 500,000 535,484
Florida Power & Light Company AA- 7.875 01/01/13 500,000 528,374
Georgia Power Company A+ 7.625 03/01/23 450,000 462,015
Hydro Quebec A+ 7.000 03/01/05 500,000 522,118
Potomac Edison Company A+ 7.750 05/01/25 500,000 545,321
Public Service Electric & Gas A- 7.000 09/01/24 200,000 197,125
Virginia Electric & Power Company A 8.000 03/01/04 500,000 561,319
FOOD PROCESSING - 0.9%
Nabisco, Inc. BBB 7.050 07/15/07 500,000 513,328
FINANCIAL SERVICES - 3.1%
Associated Corporation of North Ame AA- 8.700 01/01/97 200,000 205,875
Ford Holdings, Inc. A+ 9.250 03/01/00 475,000 530,961
General Electric Capital Corporatio AAA 7.750 03/15/02 500,000 549,719
Loews Corporation AA- 8.250 01/15/07 500,000 529,524
</TABLE>
See Notes To Financial Statements
31
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - -------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT PRINCIPAL MARKET
ISSUE RATING COUPON MATURITY AMOUNT VALUE
- - ----------------------------------- --------- ------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
FOREIGN GOVERNMENT - 2.6%
Province of Nova Scotia A- 7.250 07/27/13 $ 500,000 $ 523,907
Province of Quebec A+ 8.800 04/15/03 350,000 401,078
Province of Saskatchewan BBB+ 9.375 12/15/20 500,000 646,069
GOVERNMENTAL AGENCY - 0.8%
Federal National Mortgage Associat Not Rated 5.520 04/13/98 500,000 496,800
INSURANCE - 2.2%
Chubb Corporation AA+ 8.750 11/15/99 80,000 85,325
CIGNA Corporation BBB+ 8.250 01/01/07 500,000 577,417
Farmers Group, Inc. A 8.250 07/15/96 200,000 202,525
Metropolitan Life Insurance Co.* AA 7.450 11/01/23 450,000 452,299
METALS & MINING - 0.9%
Placer Dome, Inc. BBB 7.750 06/15/15 500,000 517,055
NATURAL GAS - 0.8%
Tennessee Gas Pipeline Company BBB- 6.000 12/15/11 500,000 452,813
NEWSPAPER - 0.8%
Knight-Ridder, Inc. AA- 9.875 04/15/09 100,000 132,406
Tribune Company A+ 8.450 02/25/98 300,000 316,849
OFFICE EQUIPMENT & SUPPLIES - 0.6%
Xerox Corporation A 9.200 07/15/99 100,000 101,692
Xerox Corporation A 9.750 03/15/00 200,000 228,875
PACKAGING & CONTAINER - 0.7%
Crown Cork & Seal Company, Inc. BBB+ 8.375 01/15/05 390,000 442,640
PETROLEUM - 2.0%
Atlantic Richfield Company A 8.500 04/01/12 250,000 299,844
BP America, Inc. AA- 8.750 02/01/03 320,000 371,169
Louisiana Land & Exploration Co. BBB 7.625 04/15/13 500,000 524,844
RAILROAD - 0.2%
Union Pacific Railroad AA- 9.500 02/15/99 100,000 102,974
</TABLE>
See Notes To Financial Statements
32
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - -------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT PRINCIPAL MARKET
ISSUE RATING COUPON MATURITY AMOUNT VALUE
- - ----------------------------------- --------- ------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
RETAIL STORE - 1.4%
Dayton Hudson Corporation BBB+ 9.625 02/01/08 $ 200,000 $ 244,372
Kmart Corporation BBB 8.125 12/01/06 500,000 376,094
Sears, Roebuck & Company BBB 9.000 09/15/96 100,000 102,063
Sears, Roebuck & Company BBB 8.550 08/01/96 100,000 101,500
SECURITIES BROKERAGE - 0.5%
Salomon, Inc. BBB 9.450 03/15/98 300,000 321,012
TELECOMMUNICATIONS SERVICE - 2.2%
AT&T Corporation AA 7.125 01/15/02 500,000 530,782
NYNEX Corporation A 7.375 12/15/11 250,000 255,910
Southwestern Bell Telephone Company AA 7.375 05/01/12 500,000 511,566
TOBACCO - 0.8%
Philip Morris Companies, Inc. A 9.000 01/01/01 400,000 449,875
U.S. GOVERNMENT - 1.9%
U.S. Treasury 6.500 08/15/05 500,000 533,047
U.S. Treasury 7.875 11/15/04 500,000 579,063
-----------
TOTAL FIXED-INCOME SECURITIES - 35.6%
(Cost $19,825,416) 21,113,241
TOTAL COMMON STOCK - 63.1%
(Cost $27,687,645) 37,385,382
-----------
TOTAL INVESTMENTS IN SECURITIES - 98.7%
(Cost $47,513,061) $58,498,623
===========
</TABLE>
* Security exempt from registration under Rule 144A of the
Securities Act of 1933
See Notes To Financial Statements
33
<PAGE>
ADVANCE CAPITAL I, INC. - LONG TERM INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT PRINCIPAL MARKET
ISSUE RATING COUPON MATURITY AMOUNT VALUE
- - ----------------------------------- --------- ------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
AIR TRANSPORT - 2.2%
Federal Express Corporation BBB 9.650 06/15/12 $ 25,000 $ 31,371
BANK - 3.8%
Chemical Banking Corporation A- 7.625 01/15/03 25,000 27,078
Westpac Banking Corporation A 9.125 08/15/01 25,000 28,539
BEVERAGE - 2.0%
Coca-Cola Enterprises, Inc. AA- 8.000 09/15/22 25,000 29,086
CHEMICAL - 2.1%
Monsanto Company A 8.700 10/15/21 25,000 30,969
COMPUTERS & PERIPHERALS - 1.9%
Digital Equipment Corporation BB+ 8.625 11/01/12 25,000 27,268
DIVERSIFIED - 4.4%
AlliedSignal, Inc. A 9.500 06/01/16 25,000 32,716
United Technologies Corporation A+ 8.750 03/01/21 25,000 31,073
ELECTRIC & GAS UTILITIES - 17.6%
Consolidated Edison Co. of N.Y., In A+ 7.375 09/01/05 25,000 26,054
Florida Power Corporation AA- 8.625 11/01/21 50,000 55,984
FPL Group Capital, Inc. A+ 7.625 05/01/13 25,000 26,273
Houston Lighting & Power Co. A 8.750 03/01/22 30,000 35,175
Hydro Quebec A+ 8.400 01/15/22 50,000 57,953
Nevada Power Company BBB 8.500 01/01/23 25,000 27,865
Texas Utilities Company BBB+ 6.750 03/01/03 25,000 25,817
ELECTRICAL EQUIPMENT - 3.6%
Philips Electronics N.V. BBB+ 7.250 08/15/13 25,000 26,125
Westinghouse Electric Corp. B+ 8.625 08/01/12 25,000 25,414
ENVIRONMENTAL - 1.9%
Laidlaw, Inc. BBB+ 8.250 05/15/23 25,000 27,608
</TABLE>
See Notes To Financial Statements
34
<PAGE>
ADVANCE CAPITAL I, INC. - LONG TERM INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT PRINCIPAL MARKET
ISSUE RATING COUPON MATURITY AMOUNT VALUE
- - ----------------------------------- --------- ------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
FINANCIAL SERVICES - 10.0%
Barclays North American Capital Cor AA- 9.750 05/15/21 $ 25,000 $ 30,098
Dean Witter Discover & Company A 6.750 10/15/13 40,000 39,845
Ford Motor Credit Corporation A+ 6.375 11/05/08 25,000 25,000
General Motors Acceptance Corp. A- 8.250 04/01/16 25,000 25,988
Loews Corporation AA- 7.000 10/15/23 25,000 24,312
FOOD PROCESSING - 4.9%
Borden, Inc. BBB- 9.250 06/15/19 25,000 27,956
Dole Food Company, Inc. BBB- 7.875 07/15/13 40,000 42,688
FOREIGN GOVERNMENT - 4.1%
Province of Ontario AA- 7.375 01/27/03 25,000 26,969
Province of Saskatchewan BBB+ 9.375 12/15/20 25,000 32,304
INSURANCE - 5.3%
CIGNA Corporation BBB+ 7.400 01/15/03 25,000 26,212
Metropolitan Life Insurance Co.* AA 7.450 11/01/23 50,000 50,255
MACHINERY - 2.0%
Caterpillar, Inc. A 9.750 06/01/19 25,000 28,998
METALS & MINING - 2.0%
Alcan Aluminum Ltd. A- 8.875 01/15/22 25,000 28,606
PAPER & FOREST PRODUCTS - 1.9%
Georgia-Pacific Corporation BBB- 9.125 07/01/22 25,000 28,133
PETROLEUM - 3.6%
NOVA Gas Transmission A- 7.875 04/01/23 25,000 27,886
OXY USA, Inc. BBB 7.000 04/15/11 25,000 24,836
RECREATION - 1.8%
Brunswick Corporation BBB+ 7.375 09/01/23 25,000 26,173
RETAIL STORE - 5.1%
Dayton Hudson Corporation BBB+ 10.000 01/01/11 20,000 25,409
Kmart Corporation BBB 8.375 07/01/22 25,000 16,906
Sears, Roebuck & Company BBB 9.375 11/01/11 25,000 31,260
</TABLE>
See Notes To Financial Statements
35
<PAGE>
ADVANCE CAPITAL I, INC. - LONG TERM INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT PRINCIPAL MARKET
ISSUE RATING COUPON MATURITY AMOUNT VALUE
- - ----------------------------------- --------- ------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
SECURITIES BROKERAGE - 3.8%
Lehman Brothers Holdings, Inc. A 7.625 07/15/99 $ 25,000 $ 26,086
Salomon, Inc. BBB 6.750 01/15/06 30,000 28,934
TELECOMMUNICATIONS SERVICE - 7.4%
Bell Telephone Co. Pennsylvania AA 7.500 05/01/13 50,000 51,141
NYNEX Corporation A 7.000 06/15/13 30,000 31,465
Southwestern Bell Telephone Company AA 7.375 05/01/12 25,000 25,578
U. S. GOVERNMENT - 5.2%
U. S. Treasury 5.750 08/15/03 75,000 75,984
------
TOTAL FIXED-INCOME SECURITIES - 96.6%
(Cost $1,328,435) $ 1,401,390
=========
</TABLE>
* Security exempt from registration under Rule 144A of the
Securities Act of 1933
See Notes To Financial Statements
36
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT MATURITY PRINCIPAL MARKET
ISSUE RATING DATE COUPON AMOUNT VALUE
- - ----------------------------------- -------- --------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
ADVERTISING - 0.4%
Heritage Media Corporation BB- 06/15/02 11.000 $ 500,000 $ 535,634
AEROSPACE / DEFENSE - 2.1%
AAR Corporation BBB- 10/15/03 7.250 500,000 503,232
Coltec Industries, Inc. BB- 04/01/02 10.250 500,000 516,840
Lockheed Corporation A+ 03/15/23 7.875 500,000 550,415
McDonnell Douglas Corporation BBB 04/01/12 9.750 1,000,000 1,288,126
AIR TRANSPORT - 2.6%
AMR Corporation BB+ 03/15/00 9.750 100,000 110,594
AMR Corporation BB+ 08/01/12 9.000 1,000,000 1,129,689
Delta Air Lines, Inc. BB 02/01/11 10.375 500,000 622,032
Federal Express Corporation BBB 01/01/15 7.630 500,000 538,311
United Airlines, Inc. BB 07/15/21 10.250 500,000 624,688
United Airlines, Inc. BB 08/15/21 9.750 500,000 602,032
APPAREL- 1.7%
Fruit of the Loom, Inc. BBB+ 03/15/11 7.000 1,000,000 945,911
Phillips-Van Heusen Corp. BBB 11/15/23 7.750 1,000,000 1,044,108
Platex Family Products Corp. B+ 12/15/03 9.000 500,000 441,719
AUTO PARTS - 0.4%
JPS Automotive Products Corp. B 06/15/01 11.125 500,000 504,611
AUTO & TRUCK - 1.4%
Ford Motor Company A+ 11/15/22 8.875 1,000,000 1,170,314
General Motors Corporation A- 04/15/16 8.125 700,000 727,344
BANK - 5.5%
Banc One Corporation A+ 07/15/25 7.750 1,000,000 1,113,126
Bank of Boston Corporation BBB 12/01/05 6.625 1,000,000 1,018,126
Chase Manhattan Corp. A- 10/15/08 6.125 1,000,000 972,501
Citicorp A 02/01/16 10.500 329,000 346,148
Comerica Bank A- 12/01/13 7.125 1,000,000 1,016,143
NCNB Corporation A- 07/15/15 10.200 1,000,000 1,353,750
Republic New York Corporation AA- 05/15/21 9.125 1,000,000 1,285,450
Westpac Banking Corporation A 08/15/01 9.125 500,000 570,782
</TABLE>
See Notes To Financial Statements
37
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT MATURITY PRINCIPAL MARKET
ISSUE RATING DATE COUPON AMOUNT VALUE
- - ----------------------------------- -------- --------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
BEVERAGE - 0.8%
Anheuser Busch Companies, Inc. AA- 03/01/17 8.500 $1,000,000 $ 1,045,187
BROADCASTING / CABLE TV - 3.9%
Cablevision Industries Corp. BB- 01/30/02 10.750 400,000 436,825
Century Communications Corp. BB- 03/01/05 9.500 1,000,000 1,036,039
Century Communications Corp. BB- 02/15/02 9.750 250,000 258,438
Comcast Cablevision B+ 01/15/08 9.500 500,000 524,063
Continental Cablevision, Inc. BB+ 08/01/13 9.500 500,000 534,063
Jones Intercable, Inc. B+ 03/01/08 10.500 200,000 212,840
Jones Intercable, Inc. B+ 07/15/04 11.500 250,000 276,299
Tele-Communications, Inc. BBB- 02/15/23 8.750 500,000 524,376
Tele-Communications, Inc. BBB- 01/15/23 9.250 760,000 832,438
Turner Broadcasting System, Inc. BB+ 07/01/13 8.375 750,000 780,000
BUILDING MATERIALS- 0.7%
American Standard, Inc. B+ 06/01/01 9.875 350,000 375,594
Schuller International Group BB- 12/15/04 10.875 500,000 562,736
BUILDING - 2.5%
Ryland Group BB- 07/15/02 10.500 1,050,000 1,053,339
Sherritt Gordon Ltd. BB- 04/01/03 9.750 1,000,000 1,015,000
Standard Pacific Corporation BB 03/01/00 10.500 300,000 308,660
Toll Corporation BB- 03/15/02 10.500 550,000 582,360
U.S. Home Corporation BB- 06/15/03 9.750 500,000 524,917
CHEMICAL - 1.2%
Arcadian Partners, L.P. BB- 05/01/05 10.750 500,000 530,275
Borden Chemicals and Plastics, L.P. BB+ 05/01/05 9.500 500,000 519,557
Union Carbide Chemicals & Plastics BBB 04/01/23 7.875 600,000 664,275
COMPUTER & PERIPHERALS - 2.1%
Digital Equipment Corporation BB+ 11/01/12 8.625 1,200,000 1,308,871
International Business Machines Cor A 11/01/19 8.375 1,000,000 1,198,439
Unisys Corporation BB- 09/15/16 9.750 200,000 166,000
Unisys Corporation BB- 10/01/99 10.625 250,000 222,578
</TABLE>
See Notes To Financial Statements
38
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT MATURITY PRINCIPAL MARKET
ISSUE RATING DATE COUPON AMOUNT VALUE
- - ----------------------------------- -------- --------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
DIVERSIFIED - 0.9%
Tenneco, Inc. BBB- 11/15/12 9.000 $ 500,000 $ 606,407
Textron, Inc. BBB 07/01/22 8.750 581,000 637,207
ELECTRIC & GAS UTILITIES - 11.8%
Alabama Power Company A+ 12/01/24 9.000 1,000,000 1,148,402
Cleveland Electric Illuminating Com BB 03/01/17 9.375 500,000 502,270
Duke Power Company AA- 03/01/22 8.625 500,000 537,681
Florida Power & Light Company AA- 01/01/13 7.875 500,000 528,374
FPL Group Capital, Inc. A+ 05/01/13 7.625 500,000 525,450
Georgia Power Company A+ 02/01/23 7.950 1,000,000 1,055,939
Hydro Quebec A+ 01/15/22 8.400 800,000 927,250
Indianapolis Power & Light Co. AA- 02/01/24 7.050 1,000,000 1,024,950
Long Island Lighting Company BB+ 07/15/19 8.900 473,000 472,705
Midland Cogeneration Venture BB- 07/23/02 10.330 432,577 448,530
Monongahela Power A+ 06/01/22 8.500 1,500,000 1,604,850
New Orleans Public Service, Inc. BBB 03/01/23 8.000 600,000 630,625
Northern Illinois Gas Company AA 08/15/21 8.875 1,000,000 1,071,576
Philadelphia Electric Company BBB+ 09/01/22 8.250 1,000,000 1,071,564
Potomac Electric Power Company A 06/01/21 9.000 1,000,000 1,150,005
Public Service Electric & Gas A- 09/01/24 7.000 1,000,000 985,626
Southern California Edison Co. A+ 12/01/17 8.375 655,000 667,779
Virginia Electric & Power Company A 10/01/24 8.625 1,000,000 1,141,564
West Penn Power Company A+ 08/01/24 8.125 1,000,000 1,135,277
ELECTRIC EQUIPMENT - 1.9%
Essex Group, Inc. B+ 05/01/03 10.000 1,000,000 985,255
Philips Electronics N.V. BBB+ 08/15/13 7.250 1,000,000 1,045,002
Westinghouse Electric Corp. B+ 06/01/01 8.875 250,000 263,857
Westinghouse Electric Corp. B+ 08/01/12 8.625 375,000 381,211
ELECTRONICS - 0.8%
ADT Operations, Inc. BB+ 08/01/03 9.250 500,000 529,688
Rogers Communications, Inc. BB- 04/15/04 10.875 500,000 525,000
ENVIRONMENTAL - 0.8%
Laidlaw, Inc. BBB+ 05/15/23 8.250 1,000,000 1,104,340
</TABLE>
See Notes To Financial Statements
39
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT MATURITY PRINCIPAL MARKET
ISSUE RATING DATE COUPON AMOUNT VALUE
- - ----------------------------------- -------- --------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
FINANCIAL SERVICES - 2.1%
Auburn Hills Trust A- 05/01/20 12.000 $ 400,000 $ 611,079
CRA Finance USA, Ltd. AA- 12/01/13 7.125 500,000 516,136
Dean Witter Discover & Company A 10/15/13 6.750 1,250,000 1,245,159
Keystone Group, Inc. BB- 09/01/03 9.750 500,000 505,012
FOOD PROCESSING - 2.0%
Chiquita Brands Int'l, Inc. B+ 01/15/04 9.625 1,000,000 1,020,057
ConAgra, Inc. BBB- 03/01/21 9.750 500,000 652,657
Nabisco, Inc. BBB 06/15/15 7.550 1,000,000 1,052,933
FOREIGN GOVERNMENT - 4.0%
Province of Newfoundland BBB+ 10/22/22 8.650 1,000,000 1,165,852
Province of Nova Scotia A- 07/27/13 7.250 1,000,000 1,047,814
Province of Quebec A+ 12/01/26 8.625 1,000,000 1,190,199
Province of Saskatchewan BBB+ 02/01/13 8.000 1,000,000 1,122,712
Republic of Finland AA- 04/01/28 9.625 1,000,000 1,109,320
GROCERY - 1.4%
Penn Traffic Company BB- 02/15/02 10.250 1,000,000 951,870
Ralph's Grocery Company B 06/15/04 10.450 250,000 254,297
Ralph's Grocery Company B- 06/15/05 13.750 194,000 206,987
Safeway, Inc. BB+ 03/15/07 9.875 450,000 509,530
HOTEL / GAMING - 1.7%
Caesars World, Inc. BBB- 08/15/02 8.875 500,000 535,092
California Hotel Finance Corp. BB- 12/01/02 11.000 400,000 426,014
Empress River Casino Finance Corp. BB 04/01/02 10.750 500,000 518,689
Showboat, Inc. BB- 05/01/08 9.250 400,000 401,125
Station Casinos B+ 06/01/03 9.625 500,000 495,485
INSURANCE - 7.0%
Aetna Life & Casualty Company A- 09/15/13 6.750 1,000,000 976,251
CIGNA Corporation BBB+ 03/01/23 7.650 500,000 515,626
CNA Financial Corporation A- 11/15/23 7.250 1,000,000 1,005,094
Continental Corporation BBB- 08/15/12 8.375 600,000 682,646
Kaufman & Broad Home Corp. BB- 05/01/03 9.375 1,000,000 998,537
Leucadia National Corporation BBB+ 08/15/13 7.750 910,000 863,059
</TABLE>
See Notes To Financial Statements
40
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT MATURITY PRINCIPAL MARKET
ISSUE RATING DATE COUPON AMOUNT VALUE
- - ----------------------------------- -------- --------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
INSURANCE - 7.0% (Continued)
MBIA, Inc. AA 10/01/22 8.200 $2,000,000 $ 2,264,016
Metropolitan Life Insurance Co.* AA 11/01/23 7.450 500,000 502,555
Penncorp Financial Group, Inc. BB+ 12/15/03 9.250 500,000 477,500
Reliance Group Holdings, Inc. BB+ 11/15/00 9.000 1,000,000 1,030,000
Vesta Insurance Group BBB+ 07/15/25 8.750 500,000 554,476
MEDICAL SERVICES - 1.6%
Abbey Healthcare Group, Inc. BB+ 11/01/02 9.500 500,000 534,258
Columbia/HCA Healthcare Corporation BBB+ 12/15/14 9.000 1,000,000 1,216,321
HEALTHSOUTH Rehabilitation B 04/01/01 9.500 500,000 535,704
MEDICAL SUPPLIES - 0.5%
Cardinal Health, Inc. A- 02/15/04 6.500 700,000 711,021
METALS & MINING - 2.4%
Alcan Aluminum Ltd. A- 01/15/22 8.875 1,000,000 1,144,236
Inco Ltd. BBB- 06/15/22 9.600 500,000 586,380
Kaiser Aluminum & Chemical Corp. B- 02/01/03 12.750 500,000 526,298
Placer Dome, Inc. BBB 06/15/15 7.750 1,000,000 1,034,109
NATURAL GAS - 1.5%
Consolidated Natural Gas Company AA- 12/01/11 8.625 1,000,000 1,059,098
Seagull Energy BB- 08/01/05 8.625 1,000,000 969,169
OILFIELD SERVICES - 0.2%
Rowan Companies, Inc. B+ 12/01/01 11.875 250,000 271,485
PACKAGING & CONTAINERS - 0.5%
Container Corp. of America B+ 04/01/03 9.750 400,000 389,875
Owens Illinois, Inc. B+ 08/15/04 9.750 250,000 261,407
PAPER & FOREST PRODUCTS - 3.1%
Bowater, Inc. BBB 10/15/12 9.500 700,000 868,337
Domtar, Inc. BB 03/15/99 11.750 750,000 839,535
Fort Howard Corporation B 03/15/03 10.000 400,000 414,428
Georgia-Pacific Corporation BBB- 07/01/22 9.125 1,000,000 1,125,314
Sweetheart Corporation, Inc. B+ 09/01/00 9.625 1,000,000 1,031,374
</TABLE>
See Notes To Financial Statements
41
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT MATURITY PRINCIPAL MARKET
ISSUE RATING DATE COUPON AMOUNT VALUE
- - ----------------------------------- -------- --------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
PETROLEUM - 6.4%
ANR Pipeline Company BBB- 11/01/21 9.625 $1,000,000 $ 1,277,624
Clark Oil & Refining Corporation BB 09/15/04 9.500 650,000 672,536
Diamond Shamrock R & M, Inc. BBB 04/01/23 8.000 600,000 646,318
Louisiana Land & Exploration Co. BBB 04/15/13 7.625 1,000,000 1,049,689
Maxus Energy Corporation BB- 11/01/03 9.375 750,000 743,154
Maxus Energy Corporation BB- 02/15/03 9.500 1,000,000 1,012,668
NOVA Gas Transmission A- 04/01/23 7.875 600,000 669,269
OXY USA, Inc. BBB 04/15/11 7.000 1,000,000 993,439
Phillips Petroleum Company BBB 01/01/23 8.490 1,000,000 1,093,967
USX Corporation BB+ 02/15/12 9.375 750,000 879,376
RAILROAD - 0.4%
Kansas City Southern Industries, In BBB+ 07/01/22 8.800 500,000 564,535
REAL ESTATE INVESTMENT TRUST - 0.6%
Taubman Realty Group Ltd. BBB 10/01/03 7.000 750,000 769,387
RECREATION - 1.8%
Bally's Health & Tennis Corp. B- 01/15/03 13.000 500,000 420,663
Brunswick Corporation BBB+ 09/01/23 7.375 975,000 1,020,727
Time Warner, Inc. BBB- 01/15/13 9.125 1,000,000 1,130,000
RETAIL STORE - 4.7%
Best Buy, Inc. B+ 10/01/00 8.625 1,000,000 991,862
Dayton Hudson Corporation BBB+ 08/01/23 7.650 750,000 778,542
Genesco, Inc. B 02/01/03 10.375 425,000 385,240
Hechinger Company BB- 11/15/12 9.450 600,000 437,880
Kmart Corporation BBB 10/01/12 7.750 1,000,000 627,810
May Department Stores A 12/01/16 9.125 1,000,000 1,056,347
Rite-Aid Corporation A- 08/15/13 6.875 1,000,000 986,250
Sears, Roebuck & Company BBB 11/01/11 9.375 1,000,000 1,250,408
SECURITIES BROKERAGE - 3.9%
Bear Stearns Companies, Inc. A 01/15/04 6.625 1,000,000 1,012,501
Goldman Sachs Group* A+ 03/01/13 8.000 1,000,000 983,850
Lehman Brothers, Inc. A 05/15/05 11.625 1,023,000 1,374,358
Morgan Stanley Group, Inc. A+ 10/01/13 7.000 1,000,000 1,007,189
Paine Webber Group, Inc. BBB+ 02/15/14 7.625 1,000,000 1,040,154
</TABLE>
See Notes To Financial Statements
42
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- - ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES CREDIT MATURITY PRINCIPAL MARKET
ISSUE RATING DATE COUPON AMOUNT VALUE
- - ----------------------------------- -------- --------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
STEEL - 1.1%
AK Steel Corporation BB- 04/01/04 10.750 $ 500,000 $ 557,582
Jorgensen, Earle M. Company B 03/01/00 10.750 500,000 461,565
Wheeling-Pittsburgh Corporation BB- 11/15/03 9.375 500,000 476,407
TELECOMMUNICATIONS SERVICE - 5.2%
GTE Corporation BBB+ 11/01/21 8.750 1,000,000 1,208,232
NYNEX Corporation A 12/15/11 7.375 500,000 511,820
Paging Network, Inc. B 02/01/06 8.875 1,000,000 1,018,439
Panamsat L.P. BB- 08/01/00 9.750 500,000 528,282
Southern Bell Telephone & Telegraph AAA 03/15/13 7.625 3,000,000 3,081,566
Southwestern Bell Telephone Company AA 05/01/12 7.375 1,000,000 1,023,132
TEXTILES - 1.2%
Fieldcrest Cannon, Inc. B+ 06/15/04 11.250 1,000,000 961,980
WestPoint Stevens, Inc. BB- 12/15/01 8.750 750,000 752,110
TOBACCO - 0.6%
RJR Nabisco, Inc. BBB- 04/15/04 8.750 775,000 800,188
U.S. GOVERNMENT - 2.4%
U.S. Treasury 08/15/05 6.500 1,000,000 1,066,094
U.S. Treasury 08/15/23 6.250 750,000 771,680
U.S. Treasury 05/31/96 5.875 1,468,000 1,471,670
------------
TOTAL FIXED INCOME SECURITIES - 97.8%
(Cost $127,728,831) $136,225,797
============
</TABLE>
* Security exempt from registration under Rule 144A of the
Securities Act of 1933
See Notes To Financial Statements
43
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY LONG TERM RETIREMENT
GROWTH BOND BALANCED INCOME INCOME
------------ ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities . . . . . . . . . $ 25,173,380 $ 4,436,523 $ 58,498,623 $ 1,401,390 $ 136,225,797
Cash . . . . . . . . . . . . . . . . . . . . 526,474 9,400 385,430 19,880 220,544
Dividends and interest receivable . . . . . 7,400 85,681 495,822 28,862 2,977,030
Prepaid expenses . . . . . . . . . . . . . . 2,932 1,570 5,775 1,051 10,747
------------ ----------- ------------ ----------- -------------
Total assets . . . . . . . . . . . . . . . . 25,710,186 4,533,174 59,385,650 1,451,183 139,434,118
LIABILITIES
Payable to affiliated entities
Investment advisory fees. . . . . 14,647 1,496 34,294 478 57,398
Distribution fees . . . . . . . . 5,231 0 12,248 0 28,699
Accounts payable and accrued expenses . . . 8,929 1,348 15,277 213 43,041
Securities purchased . . . . . . . . . . 56,233 0 21,877 0 0
Distributions payable . . . . . . . . . . 0 3,217 3,184 125 5,752
------------ ----------- ------------ ----------- -------------
Total liabilities . . . . . . . . . . . . 85,040 6,061 86,880 816 134,890
------------ ----------- ------------ ----------- -------------
Net assets . . . . . . . . . . . . . $ 25,625,146 $ 4,527,113 $ 59,298,770 $ 1,450,367 $ 139,299,228
============ =========== ============ =========== =============
NET ASSETS
Paid-in capital . . . . . . . . . . . . $ 19,750,650 $ 4,202,661 $ 48,313,208 $ 1,383,171 $ 131,316,542
Accumulated undistributed net realized
loss on investments . . . . . . . (256,650) (15,960) 0 (5,759) (514,280)
Net unrealized appreciation in value
of investments . . . . . . . . . 6,131,146 340,412 10,985,562 72,955 8,496,966
------------ ----------- ------------ ----------- -------------
Net assets . . . . . . . . . . . . . $ 25,625,146 $ 4,527,113 $ 59,298,770 $ 1,450,367 $ 139,299,228
============ =========== ============ =========== =============
SHARES OUTSTANDING . . . . . . . . . . . . 2,044,498 419,747 4,718,511 134,536 13,251,408
============ =========== ============ =========== =============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE . . . . . . . . $ 12.53 $ 10.79 $ 12.57 $ 10.78 $ 10.51
============ =========== ============ =========== =============
</TABLE>
See Notes To Financial Statements
44
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
- - ---------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY LONG TERM RETIREMENT
GROWTH BOND BALANCED INCOME INCOME
------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest . . . . . . . . . . . . . . . . . $ 31,562 $ 317,443 $ 1,376,644 $ 100,147 $ 10,160,207
Dividends . . . . . . . . . . . . . . . . 135,211 0 771,839 0 0
------------ ----------- ------------- ----------- -------------
Total investment income . . . . . . . . . 166,773 317,443 2,148,483 100,147 10,160,207
EXPENSES
Paid to affiliates:
Investment advisory fees . . . . 140,215 17,244 359,848 5,290 602,008
Administration fees . . . . . . . 0 0 0 0 0
Distribution fees . . . . . . . . 50,077 0 128,517 0 301,004
Transfer and dividend disbursing
agent fees . . . . . . . . . 0 0 0 0 0
Paid to others:
Custodial fees . . . . . . . . . 17,458 2,106 24,188 1,332 5,242
Directors fees and expenses . . . 452 108 1,249 0 2,842
Professional fees . . . . . . . . 4,529 1,037 11,940 0 27,710
Shareholder reporting costs . . . 4,695 1,093 12,779 82 29,886
Registration and filing fees . . 4,114 1,473 3,636 1,369 18,409
Other operating expenses . . . . 2,178 583 5,935 304 14,332
------------ ----------- ------------- ----------- -------------
Total expenses . . . . . . . . . . . . . . 223,718 23,644 548,092 8,377 1,001,433
------------ ----------- ------------- ----------- -------------
NET INVESTMENT INCOME (LOSS) . . . . . . . . (56,945) 293,799 1,600,391 91,770 9,158,774
REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from securities sold . . . . . . 2,697,991 281,803 11,500,300 22,195 20,170,735
Cost of securities sold . . . . . . . . . (2,381,476) (269,958) (10,045,028) (21,508) (20,480,515)
------------ ----------- ------------- ----------- -------------
Net realized gain (loss) on investment . . 316,515 11,845 1,455,272 687 (309,780)
UNREALIZED GAIN ON INVESTMENTS
Appreciation (depreciation),
Beginning of year. . . . . . . . . . . . 140,944 (143,464) 135,558 (131,206) (7,293,366)
Appreciation, End of year . . . . . . . . 6,131,146 340,412 10,985,562 72,955 8,496,966
------------ ----------- ------------- ----------- -------------
Net unrealized gain on investments . . . . 5,990,202 483,876 10,850,004 204,161 15,790,332
------------ ----------- ------------- ----------- -------------
NET GAIN ON INVESTMENTS 6,306,717 495,721 12,305,276 204,848 15,480,552
------------ ----------- ------------- ----------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 6,249,772 $ 789,520 $ 13,905,667 $ 296,618 $ 24,639,326
============ =========== ============= =========== =============
</TABLE>
See Notes To Financial Statements
45
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31
- - --------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY GROWTH BOND
----------------------------- ---------------------------
1995 1994 1995 1994
-------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) . . . . . . . . . . $ (56,945) $ (31,711) $ 293,799 $ 303,948
Net realized gain (loss) on investments . . . . 316,515 (573,165) 11,845 (27,805)
Net unrealized gain (loss) on investments . . . 5,990,202 212,430 483,876 (488,493)
-------------- ------------- ------------ -------------
Net increase (decrease) in net assets resulting
from operations. . . . . . . . . . . . . . . . 6,249,772 (392,446) 789,520 (212,350)
Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . 0 0 (293,799) (303,948)
Net realized gain on investments . . . . . . . . 0 0 0 0
-------------- ------------- ------------ -------------
Total distributions to shareholders . . . . . . 0 0 (293,799) (303,948)
Share Transactions:
Net proceeds from sale of shares . . . . . . . . 8,534,816 7,528,321 654,515 695,361
Reinvestment of distributions . . . . . . . . . 0 0 250,365 269,884
Cost of shares reacquired . . . . . . . . . . . (1,793,152) (2,078,769) (872,964) (1,190,895)
-------------- ------------- ------------ -------------
Net increase (decrease) derived from share
transactions . . . . . . . . . . . . . . . . . 6,741,664 5,449,552 31,916 (225,650)
-------------- ------------- ------------ -------------
Net increase (decrease) in net assets . . . . . 12,991,436 5,057,106 527,637 (741,948)
NET ASSETS
Beginning of year . . . . . . . . . . . . . . . 12,633,710 7,576,604 3,999,476 4,741,424
-------------- ------------- ------------ -------------
End of year . . . . . . . . . . . . . . . . . . $ 25,625,146 $ 12,633,710 $ 4,527,113 $ 3,999,476
============== ============= ============ =============
NUMBER OF SHARES
Sold . . . . . . . . . . . . . . . . . . . . . . 822,812 814,695 63,642 69,169
Shares issued from reinvestment of distributions 0 0 24,367 26,963
Reacquired . . . . . . . . . . . . . . . . . . . (169,448) (224,684) (84,347) (118,389)
-------------- ------------- ------------ -------------
Net increase (decrease) in shares outstanding. . 653,364 590,011 3,662 (22,257)
Outstanding:
Beginning of year . . . . . . . . . . 1,391,134 801,123 416,085 438,342
-------------- ------------- ------------ -------------
End of year . . . . . . . . . . . . . 2,044,498 1,391,134 419,747 416,085
============== ============= ============ =============
</TABLE>
See Notes To Financial Statements
46
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31
- - --------------------------------------------------------------------
<TABLE>
<CAPTION> LONG TERM
BALANCED INCOME
----------------------------- ---------------------------
1995 1994 1995 1994
-------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) . . . . . . . . . . $ 1,600,391 $ 1,448,188 $ 91,770 $ 83,318
Net realized gain (loss) on investments . . . . 1,455,272 (597,213) 687 (6,446)
Net unrealized gain (loss) on investments . . . 10,850,004 (2,140,483) 204,161 (154,400)
-------------- ------------- ------------ -------------
Net increase (decrease) in net assets resulting
from operations. . . . . . . . . . . . . . . . 13,905,667 (1,289,508) 296,618 (77,528)
Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . (1,600,391) (1,448,188) (91,770) (83,318)
Net realized gain on investments . . . . . . . . (675,694) 0 0 0
-------------- ------------- ------------ -------------
Total distributions to shareholders . . . . . . (2,276,085) (1,448,188) (91,770) (83,318)
Share Transactions:
Net proceeds from sale of shares . . . . . . . . 6,216,671 6,839,769 88,084 367,113
Reinvestment of distributions . . . . . . . . . 2,254,669 1,432,265 90,571 83,061
Cost of shares reacquired . . . . . . . . . . . (5,022,865) (8,003,667) (95,945) (205,843)
-------------- ------------- ------------ -------------
Net increase (decrease) derived from share
transactions . . . . . . . . . . . . . . . . . 3,448,475 268,367 82,710 244,331
-------------- ------------- ------------ -------------
Net increase (decrease) in net assets . . . . . 15,078,057 (2,469,329) 287,558 83,485
NET ASSETS
Beginning of year . . . . . . . . . . . . . . . 44,220,713 46,690,042 1,162,809 1,079,324
-------------- ------------- ------------ -------------
End of year . . . . . . . . . . . . . . . . . . $ 59,298,770 $ 44,220,713 $ 1,450,367 $ 1,162,809
============== ============= ============ =============
NUMBER OF SHARES
Sold . . . . . . . . . . . . . . . . . . . . . . 537,704 663,867 8,833 36,367
Shares issued from reinvestment of distributions 190,968 140,863 8,984 8,643
Reacquired . . . . . . . . . . . . . . . . . . . (445,049) (782,820) (9,616) (20,487)
-------------- ------------- ------------ -------------
Net increase (decrease) in shares outstanding. . 283,623 21,910 8,201 24,523
Outstanding:
Beginning of year . . . . . . . . . . 4,434,888 4,412,978 126,335 101,812
-------------- ------------- ------------ -------------
End of year . . . . . . . . . . . . . 4,718,511 4,434,888 134,536 126,335
============== ============= ============ =============
</TABLE>
See Notes To Financial Statements
47
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS - Continued
YEARS ENDED DECEMBER 31
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT
INCOME
-----------------------------
1995 1994
-------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) . . . . . . . . . . $ 9,158,774 $ 5,222,488
Net realized gain (loss) on investments . . . . (309,780) (204,500)
Net unrealized gain (loss) on investments . . . 15,790,332 (8,426,355)
-------------- -------------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . 24,639,326 (3,408,367)
Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . (9,158,774) (5,222,488)
Net realized gain on investments . . . . . . . . 0 0
-------------- -------------
Total distributions to shareholders . . . . . . (9,158,774) (5,222,488)
Share Transactions:
Net proceeds from sale of shares . . . . . . . . 41,855,679 48,774,219
Reinvestment of distributions . . . . . . . . . 9,090,489 5,170,296
Cost of shares reacquired . . . . . . . . . . . (11,289,892) (8,494,349)
-------------- -------------
Net increase (decrease) derived from share
transactions . . . . . . . . . . . . . . . . . 39,656,276 45,450,166
-------------- -------------
Net increase (decrease) in net assets . . . . . 55,136,828 36,819,311
NET ASSETS
Beginning of year . . . . . . . . . . . . . . . 84,162,400 47,343,089
-------------- -------------
End of year . . . . . . . . . . . . . . . . . . $ 139,299,228 $ 84,162,400
============== =============
NUMBER OF SHARES
Sold . . . . . . . . . . . . . . . . . . . . . . 4,342,406 4,966,047
Shares issued from reinvestment of distributions 907,982 538,445
Reacquired . . . . . . . . . . . . . . . . . . . (1,130,935) (864,791)
-------------- -------------
Net increase (decrease) in shares outstanding. . 4,119,453 4,639,701
Outstanding:
Beginning of year . . . . . . . . . . 9,131,955 4,492,254
-------------- -------------
End of year . . . . . . . . . . . . . 13,251,408 9,131,955
============== =============
</TABLE>
See Notes To Financial Statements
48
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION OF THE COMPANY
Advance Capital I, Inc. (The COMPANY) is a Maryland
Corporation organized on March 6, 1987 and commenced operations
on August 5, 1987. The COMPANY is registered under the
Investment Company Act of 1940, as amended, as an open-end,
diversified management investment company (a mutual fund)
offering shares in the Equity Growth Fund, Bond Fund, Balanced
Fund, Long Term Income Fund and Retirement Income Fund.
NOTE 2. ACCOUNTING POLICIES
The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect reported amounts and
disclosures in the financial statements. Actual results could
differ from these estimates.
The following is a summary of significant accounting
policies followed by the COMPANY.
Security Valuation
Securities for which exchanged quotations are readily
available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including
restricted securities) for which exchange quotations are not
readily available (and in certain cases debt securities which
trade on an exchange), are valued primarily using dealer
supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general
supervision of the Board of Directors. Money market instruments
held by the Funds with a remaining maturity of sixty days or
less will be valued at cost which approximates market.
Expenses
Most expenses of the Company can be directly attributed to
a fund. Expenses which cannot be directly attributed are
apportioned between the Funds on the basis of average net assets.
Federal Income Taxes
It is the Company's policy to meet the requirements of the
Internal Revenue Code that are applicable to regulated
investment companies and to distribute all of its taxable income
to its shareholders. Therefore, no federal income tax provision
is provided.
Other
Fixed income security transactions are accounted for on the
trade date, the date the order to buy or sell is executed.
Common stock transactions are accounted for on the day after the
transactions occur (trade date plus one). Interest income is
recorded on the accrual basis. Dividend income is recorded on
the ex-dividend date. Premium and discount amortization on
fixed income
49
<PAGE>
NOTE 2. ACCOUNTING POLICIES (CONTINUED)
securities are amortized using the effective interest method.
Realized gains and losses on security transactions are
determined on the first-in, first-out method. Net investment
losses, for which no carryover is permitted, are offset against
paid in capital.
NOTE 3. TRANSACTIONS WITH AFFILIATES
Advance Capital Management, Inc. (MANAGEMENT) (a wholly
owned subsidiary of Advance Capital Group, Inc.) is the
COMPANY'S investment adviser. Advance Capital Services, Inc.
(SERVICES) (also a wholly owned subsidiary of Advance Capital
Group, Inc.) is the distributor of the Company's shares.
Advance Capital Group, Inc. (GROUP) is the Company's Transfer
Agent and Dividend Disbursing Agent. For services provided by
MANAGEMENT, the COMPANY pays a fee equal on an annual basis to
.70% of the average daily net assets of the Equity Growth and
Balanced Funds, .50% of the average daily net assets of the
Retirement Income Fund, and .40% of the average daily net assets
of the Bond and Long Term Income Funds. GROUP provides
administrative, transfer agent and dividend disbursing agent
services to the COMPANY. The COMPANY will reimburse SERVICES
for actual expenses incurred in connection with the distribution
of fund shares of the Equity Growth, Balanced and Retirement
Income Funds, at a rate not to exceed .25% of each fund's
average daily net assets.
The COMPANY was charged investment advisory fees of
$1,124,605 by MANAGEMENT for 1995. The COMPANY was charged
distribution fees of $479,598 by SERVICES for 1995. SERVICES
paid or accrued to brokerage firms a total of $17,623 for
distributing COMPANY shares for 1995. At December 31, 1995 an
employee retirement plan sponsored by SERVICES owned 67,379
shares (3.3%) of the Equity Growth Fund and 838 shares (0.0%) of
the Balanced Fund.
Certain officers and directors of GROUP, MANAGEMENT, and
SERVICES, are also officers and directors of the COMPANY.
Directors fees are only paid to outside directors and consist of
a $1,000 annual retainer and an additional $100 per meeting.
NOTE 4. INVESTMENT PORTFOLIO TRANSACTIONS
The cost of purchases and proceeds from sales of
investments, other than short-term obligations, for 1995 were as
follows:
<TABLE>
<CAPTION>
Equity Long Term Retirement
Growth Bond Balanced Income Income
------- ----- -------- --------- ----------
<S> <C> <C> <C> <C> <C>
Purchases $9,631,090 $331,847 $14,208,108 $95,419 $56,804,501
Sales 2,697,991 281,803 11,500,300 22,195 17,919,328
</TABLE>
50
<PAGE>
NOTE 4. INVESTMENT PORTFOLIO TRANSACTIONS (CONTINUED)
The cost of purchases and proceeds from sales of U.S.
Government Securities included above were as follows:
<TABLE>
<CAPTION>
Equity Long Term Retirement
Growth Bond Balanced Income Income
------- ------ --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Purchases None $193,203 $1,555,234 $45,328 $15,695,559
Sales None 123,648 547,898 22,195 14,993,466
</TABLE>
Gross unrealized appreciation and depreciation of
investments as of December 31, 1995 were as follows:
<TABLE>
<CAPTION>
Equity Long Term Retirement
Growth Bond Balanced Income Income
-------- ------ --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Appreciation $7,060,533 $342,453 $11,631,974 $85,280 $9,570,616
Depreciation 929,387 2,041 646,412 12,325 1,073,650
</TABLE>
NOTE 5. CASH
As of December 31, 1995, substantially all cash was
invested in the Monitor Money Market Fund, bearing interest at a
variable rate (approximately 5.5%).
NOTE 6. CAPITAL LOSS CARRYOVERS
For 1995, the Company utilized $316,515, $11,845, $779,579
and $687 of capital loss carryovers in the Equity Growth, Bond,
Balanced and Long Term Income Funds respectively. At December
31, 1995, capital loss carryovers and their expiration dates
were as follows:
<TABLE>
<CAPTION>
Equity Long Term Retirement
Growth Bond Income Income
------- ----- --------- ---------
<S> <C> <C> <C> <C>
December 31, 2002 $256,650 $15,960 $5,759 $204,500
December 31, 2003 0 0 0 309,780
------- ------ ----- -------
Total $256,650 $15,960 $5,759 $514,280
======= ====== ===== =======
</TABLE>
NOTE 7. AUTHORIZED SHARES
The Fund has one billion authorized shares of common stock,
par value of $.001 per share. Each of the Fund's five
portfolios has 200 million shares authorized.
51
<PAGE>
[Price Waterhouse Letterhead]
Report of Independent Accountants
January 26, 1996
To the Trustees and Shareholders of
Advance Capital I, Inc.
In our opinion, the accompanying statements of assets and
liabilities, including the portfolios of investments, and the
related statements of operations and of changes in net assets
and the financial highlights present fairly, in all material
respects, the financial position of the Equity Growth, Bond,
Balanced, Long Term Income and Retirement Income Funds
(constituting Advance Capital I, Inc., hereafter referred to as
the "Fund") at December 31, 1995 and the results of each of
their operations, the changes in each of their net assets and
the financial highlights for the year then ended, in conformity
with generally accepted accounting principles. These financial
statements and the financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit
in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31,
1995 by correspondence with the custodian and brokers, provides
a reasonable basis for the opinion expressed above. The
financial statements of Advance Capital I, Inc. for the years
ended December 31, 1991 through December 31, 1994 were audited
by other independent accountants whose report dated February 15,
1995 expressed an unqualified opinion on those statements.
/s/ Price Waterhouse LLP
52
<PAGE>
ADDITIONAL INFORMATION (UNAUDITED)
CHANGE OF ACCOUNTANTS
Effective May 22, 1995, Correll Porvin & Associates
declined to stand for reelection as the Fund's independent
accountants. For the period of August 5, 1987 (commencement of
operations) to December 31, 1987 and for the years ended
December 31, 1988 through December 31, 1994 for the Equity
Growth Fund, Bond Fund and Balanced Fund and the years ended
December 31, 1993 through December 31, 1994 for the Long Term
Income Fund and Retirement Income Fund, Correll Porvin &
Associates expressed an unqualified opinion on the Fund's
financial statements. There were no disagreements between Fund
management and Correll Porvin & Associates prior to their
decision not to stand for reelection. On July 27, 1995, the
Board of Directors approved Price Waterhouse, LLP as the Fund's
independent accountants.
RESULTS OF ANNUAL SHAREHOLDER VOTE
An Annual Meeting of Shareholders of the COMPANY was held
at the Radisson Hotel, 1500 Town Center, Southfield, Michigan,
on July 27, 1995 for the following purposes:
1. To elect four Directors to hold office until the next
Annual Meeting of Shareholders or until their successors have been
elected and qualified.
<TABLE>
<CAPTION>
Directors Elected at Meeting Votes For
---------------------------- ---------
<S> <C>
Joseph A. Ahern 10,788,386
Richard W. Holtcamp 10,824,181
John C. Shoemaker 10,885,748
Frank R. Zimmerman 10,871,015
</TABLE>
2. To ratify the selection of Price Waterhouse, LLP as
independent public accountants of the COMPANY for the fiscal year
ending December 31,1995.
<TABLE>
<S> <C>
Votes For: 10,795,331
Votes Against: 0
Votes to Abstain: 138,229
</TABLE>
53
<PAGE>
ADVANCE CAPITAL I, INC. ADVANCE CAPITAL I INC.
An investment company with five funds
INVESTMENT ADVISER:
Advance Capital Management, Inc.
One Towne Square, Suite 444
Southfield, Michigan 48076
SUB-ADVISER:
(Equity Growth and Balanced Funds) EQUITY GROWTH FUND
BOND FUND
T. Rowe Price Associates, Inc. BALANCED FUND
100 East Pratt Street LONG TERM INCOME FUND
Baltimore, Maryland 21202 RETIREMENT INCOME FUND
DISTRIBUTOR:
Advance Capital Services, Inc.
P.O. Box 3144
Southfield, Michigan 48037
ADMINISTRATOR AND TRANSFER AGENT:
Advance Capital Group, Inc.
P.O. Box 3144
Southfield, Michigan 48037
CUSTODIAN:
Huntington Banks of Michigan
220 Park Street, Suite 100
Birmingham, Michigan 48009
INDEPENDENT ACCOUNTANTS:
Price Waterhouse LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202
BOARD OF DIRECTORS:
Joseph A. Ahern
Richard W. Holtcamp
John C. Shoemaker ANNUAL REPORT
Frank R. Zimmerman DECEMBER 31, 1995
