SEMI-ANNUAL REPORT
June 30, 1999
ADVANCE CAPITAL I, INC.
An investment company with five funds
<PAGE>
Table of Contents
- --------------------------------------------------
Page
A Letter to Our Shareholders.....................2
Financial Highlights.............................4
PORTFOLIO OF INVESTMENTS
Equity Growth Fund..........................9
Bond Fund..................................14
Balanced Fund..............................17
Retirement Income Fund.....................30
Cornerstone Stock Fund.....................38
Statement of Assets and Liabilities.............40
Statement of Operations.........................41
Statement of Changes in Net Assets..............42
Notes to Financial Statements...................45
<PAGE>
Dear Shareholders,
Less than a year ago, pervasive financial troubles in Asia and the
default on Russia's debt sent the global financial markets into a tailspin.
The once high flying foreign markets were crumbling and risky assets were
taboo, particularly stocks. The ensuing liquidity crunch along with
dramatically falling asset values sent many investors running for the safety
of U.S. treasury bonds. Global markets were in desperate need of assistance
to halt the rising threat of a global recession. The Federal Reserve and
G7 nations took the lead role in stabilizing financial markets by lowering
global interest rates from September through December. Today, lower rates
along with financial assistance from the International Monetary Fund, has
pumped much needed liquidity into financial markets and halted the economic
slide of many foreign economies.
Although a low interest rate environment was necessary to quell the
fears of a global recession and realign foreign economies, it has proved
to be an adrenaline rush for the U.S. economy. After growing at a whopping
6.8 percent annual pace in the fourth quarter of 1998, the economy cruised
along at a 4.1 percent annual growth rate in the first quarter of 1999 and
is expected to remain above average through the end of the year. The
unemployment rate has been hovering at its 30 year low, consumer confidence
has returned to its peak level and personal income continues to rise.
The historical consequence of rapid economic growth, however, is higher
inflation. Producer prices, for example, had risen three consecutive months
and the costs of raw materials had risen at the fastest rate in two years,
through May. Also, consumer prices posted a .7 percent increase during the
month of April, the highest monthly increase in nine years. On the surface
these statistics suggest significantly higher inflation is in the economic
pipeline. It's not! Almost every year-over-year measure of inflation is only
slightly higher and on pace to produce below average inflation for the
remainder of the year. Even the CPI and PPI have decelerated sharply over
the last six weeks. To be safe, however, Alan Greenspan and the FOMC raised
interest rates 25 basis points on June 30th. This move, along with any future
interest rate hikes, should help assure that the amazing five year trend of
solid economic growth, with very little inflation, continues.
At the corporate level, the rapid pace of technological advancements
has lowered barriers to entry, increased worker productivity and made product
differentiation very difficult. In some industries fierce competition has
made price flexibility almost nonexistent, forcing mega-mergers to gain
economies of scale and expand margins. Also, as the Internet explodes with
information, the consumer is becoming more powerful and informed about
competing products and prices. Heightened competition and a drive to
innovate has investors excited about the prospects for significant
earnings growth, particularly for technology related stocks.
2
<PAGE>
The underlying positive inflation environment and significant
acceleration in technological advancements has kept the record setting
bull market intact. The S&P 500 Index has returned about 12.4 percent
while the Nasdaq Composite has risen about 22.5 through June. In contrast,
the threat of accelerating growth and rising inflation has lead to negative
returns for U.S. treasury bonds and a relatively lackluster performance for
the majority of corporate bonds. The six month results for the Advance
Capital I Funds were generally in-line with averages for their objectives.
Through the end of June the Equity Growth Fund increased 14.2 percent,
better than the average of mid-cap funds followed by Lipper Analytical
Services, Inc. The Balanced Fund returned 4.9 percent through midyear,
slightly below the average balanced fund followed by Lipper. The Cornerstone
Stock Fund increased 13.0 percent, ranking it well above the average growth
fund. The Bond Fund and Retirement Income Fund posted declines of 2.8 percent
and 1.8 percent respectively, compared to Lipper BBB Index which declined
about 1.4 percent during the first six months. The significant rise in
interest rates through the first half of the year accounted for the majority
of the under performance by these two funds.
Today, the troubles in Asia and Russia have stabilized, U.S. growth is
robust, inflation fears have subsided and consumers are very confident. The
ability to maintain this delicate economic balance will determine the
longevity of this record expansion. Absent a major shift in policy or renewed
foreign troubles, the stock market should continue to outperform its
historical average. Returns on fixed income investments should perform
better during the second half of the year as inflation fears subside and
economic growth cools slightly.
Although short term market fluctuations occur, our focus has been and
will remain on the long term. Intelligent investment decisions, broad
diversification and control of costs comprise the cornerstones of our
investment philosophy. We fully expect this approach will continue to
serve our client well over time. If you have any questions or if we may
be of service please call us. Our toll-free number is (800) 345-4783.
Sincerely,
/s/ Robert J. Cappelli /s/ John C. Shoemaker
Robert J. Cappelli John C. Shoemaker
August 9, 1999
3
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY GROWTH
-------------------------------------------------------------
(Unaudited)
Six months
ended Years ended December 31
June 30, ---------------------------------------------------
1999 1998 1997 1996 1995 1994
--------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning of year . . . . $20.05 $17.25 $14.72 $12.53 $9.08 $9.46
--------- ---------- --------- --------- --------- ---------
Income from investment operations
Net investment income (loss) . . . . . . . (0.06) (0.10) (0.09) (0.07) (0.03) (0.03)
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . 2.91 2.90 2.69 2.26 3.48 (0.35)
--------- ---------- --------- --------- --------- ---------
Total from investment operations . . . . . 2.85 2.80 2.60 2.19 3.45 (0.38)
--------- ---------- --------- --------- --------- ---------
Less distributions
Net investment income. . . . . . . . . . . 0.00 0.00 0.00 0.00 0.00 0.00
Net realized gain on investments . . . . . 0.00 0.00 (0.07) 0.00 0.00 0.00
--------- ---------- --------- --------- --------- ---------
Total distributions. . . . . . . . . . . . 0.00 0.00 (0.07) 0.00 0.00 0.00
--------- ---------- --------- --------- --------- ---------
Net asset value, end of period . . . . . . . $22.90 $20.05 $17.25 $14.72 $12.53 $9.08
========= ========== ========= ========= ========= =========
Total Return . . . . . . . . . . . . . . . . 14.21% 16.23% 17.68% 17.48% 38.00% -4.02%
Ratios and Supplemental Data
Net assets, end of period (in thousands) . $79,813 $68,061 $54,332 $38,767 $25,625 $12,634
Ratio of expenses to average net assets. . 1.05% 1.02% 1.07% 1.09% 1.12% 1.21%
Ratio of net investment income (loss)
to average net assets. . . . . . . . . . -0.62% -0.58% -0.58% -0.50% -0.29% -0.30%
Portfolio turnover rate. . . . . . . . . . 29.98% 22.34% 20.53% 24.75% 13.86% 18.05%
</TABLE>
See Notes To Financial Statements
4
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND
-------------------------------------------------------------
(Unaudited)
Six months
ended Years ended December 31
June 30, ---------------------------------------------------
1999 1998 1997 1996 1995 1994
--------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning of year . . . . $10.62 $10.52 $10.37 $10.79 $9.61 $10.82
--------- ---------- --------- --------- --------- ---------
Income from investment operations
Net investment income. . . . . . . . . . . 0.32 0.67 0.69 0.70 0.70 0.71
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . (0.61) 0.15 0.24 (0.42) 1.18 (1.21)
--------- ---------- --------- --------- --------- ---------
Total from investment operations . . . . . (0.29) 0.82 0.93 0.28 1.88 (0.50)
--------- ---------- --------- --------- --------- ---------
Less distributions
Net investment income. . . . . . . . . . . (0.32) (0.67) (0.69) (0.70) (0.70) (0.71)
Net realized gain on investments . . . . . 0.00 (0.05) (0.09) 0.00 0.00 0.00
--------- ---------- --------- --------- --------- ---------
Total distributions. . . . . . . . . . . . (0.32) (0.72) (0.78) (0.70) (0.70) (0.71)
--------- ---------- --------- --------- --------- ---------
Net asset value, end of period . . . . . . . $10.01 $10.62 $10.52 $10.37 $10.79 $9.61
========= ========== ========= ========= ========= =========
Total Return . . . . . . . . . . . . . . . . -2.78% 8.12% 9.41% 2.81% 20.15% -4.64%
Ratios and Supplemental Data
Net assets, end of period (in thousands) . $8,464 $3,746 $4,203 $4,430 $4,527 $3,999
Ratio of expenses to average net assets. . 0.59% 0.52% 0.54% 0.55% 0.55% 0.60%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 6.03% 6.35% 6.65% 6.71% 6.80% 7.06%
Portfolio turnover rate. . . . . . . . . . 63.94% 11.56% 21.95% 19.77% 6.69% 21.92%
</TABLE>
See Notes To Financial Statements
5
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED
---------
(Unaudited)
Six months
ended Years ended December 31
June 30, ---------------------------------------------------
1999 1998 1997 1996 1995 1994
--------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning of year . . . . $17.13 $15.69 $13.68 $12.57 $9.97 $10.58
--------- ---------- --------- --------- --------- ---------
Income from investment operations
Net investment income. . . . . . . . . . . 0.24 0.48 0.45 0.41 0.35 0.32
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . 0.59 1.56 2.32 1.37 2.75 (0.61)
--------- ---------- --------- --------- --------- ---------
Total from investment operations . . . . . 0.83 2.04 2.77 1.78 3.10 (0.29)
--------- ---------- --------- --------- --------- ---------
Less distributions
Net investment income. . . . . . . . . . . (0.24) (0.48) (0.45) (0.41) (0.35) (0.32)
Net realized gain on investments . . . . . 0.00 (0.12) (0.31) (0.26) (0.15) 0.00
--------- ---------- --------- --------- --------- ---------
Total distributions. . . . . . . . . . . . (0.24) (0.60) (0.76) (0.67) (0.50) (0.32)
--------- ---------- --------- --------- --------- ---------
Net asset value, end of period . . . . . . . $17.72 $17.13 $15.69 $13.68 $12.57 $9.97
========= ========== ========= ========= ========= =========
Total Return . . . . . . . . . . . . . . . . 4.89% 13.15% 20.50% 14.48% 31.53% -2.72%
Ratios and Supplemental Data
Net assets, end of period (in thousands) . $143,972 $125,883 $99,421 $75,202 $59,299 $44,221
Ratio of expenses to average net assets. . 1.03% 1.01% 1.04% 1.06% 1.07% 1.10%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 2.79% 2.92% 3.02% 3.17% 3.11% 3.18%
Portfolio turnover rate. . . . . . . . . . 19.73% 11.04% 10.13% 12.79% 22.72% 34.97%
</TABLE>
See Notes To Financial Statements
6
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- -------------------------------------------------------------------------------
<TABLE>
CAPTION>
RETIREMENT INCOME
------------------------------------------------------------
(Unaudited)
Six months
ended Years ended December 31
June 30, ---------------------------------------------------
1999 1998 1997 1996 1995 1994
--------- ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
Net asset value, beginning of assets . . . $10.56 $10.65 $10.20 $10.51 $9.22 $10.54
--------- ---------- --------- --------- --------- ---------
Income from investment operations
Net investment income. . . . . . . . . . . 0.36 0.73 0.74 0.75 0.76 0.76
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . (0.54) (0.08) 0.45 (0.31) 1.29 (1.32)
--------- ---------- --------- --------- --------- ---------
Total from investment operations . . . . . (0.18) 0.65 1.19 0.44 2.05 (0.56)
--------- ---------- --------- --------- --------- ---------
Less distributions
Net investment income. . . . . . . . . . . (0.36) (0.73) (0.74) (0.75) (0.76) (0.76)
Net realized gain on investments . . . . . 0.00 (0.01) 0.00 0.00 0.00 0.00
--------- ---------- --------- --------- --------- ---------
Total distributions. . . . . . . . . . . . (0.36) (0.74) (0.74) (0.75) (0.76) (0.76)
--------- ---------- --------- --------- --------- ---------
Net asset value, end of period . . . . . . . $10.02 $10.56 $10.65 $10.20 $10.51 $9.22
========= ========== ========= ========= ========= =========
Total Return . . . . . . . . . . . . . . . . -1.79% 6.20% 12.20% 4.54% 22.96% -5.34%
Ratios and Supplemental Data
Net assets, end of period (in thousands) . $219,328 $221,221 $200,511 $170,799 $139,299 $84,162
Ratio of expenses to average net assets. . 0.82% 0.79% 0.82% 0.82% 0.84% 0.88%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 6.88% 6.87% 7.21% 7.45% 7.64% 7.89%
Portfolio turnover rate. . . . . . . . . . 22.99% 19.52% 16.60% 8.34% 15.63% 12.27%
</TABLE>
See Notes To Financial Statements
7
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- -------------------------------------------------------------------------------
<TABLE>
CAPTION>
CORNERSTONE STOCK
-------------------------
(Unaudited)
Six months
ended Partial Year*
June 30, Ended
1999 Dec. 31, 1998
--------- ----------
<S> <C> <C>
Selected Per-Share Data
Net asset value, beginning of period . . . $10.46 $10.00
--------- ----------
Income from investment operations
Net investment income. . . . . . . . . . . 0.01 0.00
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . 1.35 0.46
--------- ----------
Total from investment operations . . . . . 1.36 0.46
--------- ----------
Less distributions
Net investment income. . . . . . . . . . . 0.00 0.00
Net realized gain on investments . . . . . 0.00 0.00
--------- ----------
Total distributions. . . . . . . . . . . . 0.00 0.00
--------- ----------
Net asset value, end of period . . . . . . . $11.82 $10.46
========= ==========
Total Return . . . . . . . . . . . . . . . . 13.00% 4.60%
Ratios and Supplemental Data
Net assets, end of period (in thousands) . $27,037 $7,316
Ratio of expenses to average net assets. . 0.84% 0.66%**
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 0.09% 1.20%**
Portfolio turnover rate. . . . . . . . . . 0.00% 0.00%
</TABLE>
* From December 17, 1998 (commencement of operations) to December 31, 1998.
**Annualized
See Notes To Financial Statements
8
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ---------------------------------------------- --------- ------------
<S> <C> <C>
ADVERTISING - 2.7%
Catalina Marketing Corporation* 2,600 $ 239,200
Harte-Hanks Inc. 8,000 217,000
Interpublic Group of Companies, Inc. 4,200 363,825
Lamar Advertising Company* 6,000 245,625
Omnicom Group, Inc. 5,000 400,000
Outdoor Systems, Inc.* 18,225 665,212
AEROSPACE / DEFENSE - 0.4%
Gulfstream Aerospace Corporation* 4,500 304,031
AIR TRANSPORT - 0.6%
Air Express International Corp. 7,650 194,119
Comair Holdings, Inc. 14,625 304,383
APPAREL - 0.9%
Cintas Corporation 4,600 309,063
Quiksilver, Inc.* 10,500 273,656
Warnaco Group, Inc. 4,500 120,375
BANK - 3.9%
Bank of New York Company, Inc. 10,200 374,212
City National Corporation 8,000 299,500
Community First Bankshares, Inc. 11,000 262,625
First American Corporation 6,000 249,375
Northern Trust Corporation 5,600 543,200
State Street Corporation 6,100 520,788
U.S. Trust Corporation 6,200 573,500
Zions Bancorporation 5,000 317,500
BIOTECHNOLOGY - 3.2%
Amgen, Inc.* 6,600 401,775
Biogen, Inc.* 9,800 630,262
Centocor Inc.* 5,500 256,437
Human Genome Sciences, Inc.* 5,700 225,150
Immunex Corporation* 1,700 216,644
Incyte Pharmaceuticals, Inc.* 5,000 132,188
Millennium Pharmaceuticals, Inc.* 10,000 360,000
PE Corp-Celera Genomics Group* 7,250 117,359
Pioneer Hi-Bred International, Inc. 6,000 233,625
BROADCASTING / CABLE TV - 4.6%
Chancellor Media Corporation* 7,000 385,875
Clear Channel Communications* 8,999 620,369
Cox Communications, Inc.* 12,000 441,750
Emmis Communications Corporation* 7,000 345,625
Hispanic Broadcasting Corporation* 4,600 349,025
TCA Cable TV, Inc. 9,000 499,500
Univision Communications, Inc.* 9,600 624,000
Westwood One, Inc.* 6,000 214,125
Young Broadcasting Inc.* 5,000 212,813
CHEMICAL - 2.1%
Ecolab, Inc. 8,000 349,000
Lilly Industries, Inc. 9,500 176,344
MacDermid, Inc. 7,000 325,500
Sherwin-Williams Company 6,500 180,375
Sigma-Aldrich Corporation 8,000 275,500
Valspar Corporation 8,800 334,400
COMPUTER & PERIPHERALS - 4.8%
Cisco Systems, Inc.* 8,100 522,450
Comverse Technology, Inc.* 6,750 509,625
Diebold, Inc. 6,000 172,500
EMC Corporation* 9,000 496,125
Gateway, Inc.* 5,000 295,000
Microchip Technology, Inc.* 4,425 209,634
Network Appliance Inc.* 10,800 603,450
Sun Microsystems, Inc.* 7,000 482,125
Synopsys, Inc.* 3,400 187,638
VERITAS Software Corporation* 3,500 332,281
</TABLE>
See Notes to Financial Statements
9
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ---------------------------------------------- --------- ------------
<S> <C> <C>
COMPUTER SOFTWARE & SERVICES - 12.2%
Adobe Systems, Inc. 4,000 $ 328,625
Affiliated Computer Services, Inc.* 7,000 354,375
America Online, Inc.* 7,000 772,187
BARRA, Inc.* 7,000 176,750
BMC Software, Inc.* 11,200 604,800
Cadence Design Systems, Inc.* 11,000 140,250
Check Point Software Technologies Ltd.* 5,000 268,125
Citrix Systems, Inc.* 10,500 593,250
CMGI Inc.* 4,000 456,250
Compuware Corporation* 20,000 636,250
Concord Communications, Inc.* 5,000 225,000
DST Systems, Inc.* 4,800 301,800
Electronic Arts, Inc.* 6,500 352,625
FactSet Research Systems Inc. 5,200 294,450
IDX Systems Corporation* 4,600 103,788
IMS Health Incorporated 12,000 375,000
Infoseek Corporation* 5,000 239,687
Intuit, Inc.* 4,200 378,525
Keane, Inc.* 5,500 124,437
Legato Systems, Inc.* 4,700 271,425
Mercury Interactive Corporation* 7,000 247,625
Network Associates, Inc.* 8,974 131,806
Oracle Corporation* 11,250 417,656
Shared Medical Systems Corporation 3,500 228,375
Sterling Commerce, Inc.* 9,500 349,125
SunGard Data Systems, Inc.* 9,500 327,750
Symantec Corporation* 8,800 224,400
Visio Corporation* 5,600 213,150
Whittman-Hart Inc.* 7,900 250,825
Wind River Systems, Inc.* 16,000 257,000
DIVERSIFIED - 1.5%
Danaher Corporation 5,000 290,625
Raychem Corporation 5,000 185,000
Roper Industries, Inc. 7,500 240,000
Teleflex, Inc. 5,000 217,188
Viad Corp. 8,600 266,063
DRUG - 2.7%
BioChem Pharma, Inc.* 5,000 93,750
Biomatrix, Inc.* 9,000 194,063
Cardinal Health, Inc. 6,187 396,741
Elan Corporation PLC-ADR* 9,400 260,850
Express Scripts, Inc.* 4,000 240,750
Gilead Sciences, Inc.* 4,000 209,000
MedImmune, Inc.* 5,000 338,750
Shire Pharmaceuticals Group PLC-ADR* 9,800 254,800
Watson Pharmaceuticals, Inc.* 5,600 196,350
DRUGSTORE - 0.6%
CVS Corporation 6,000 304,500
Duane Reade Inc.* 6,000 183,000
ELECTRIC & GAS UTILITIES - 0.5%
AES Corporation* 7,500 435,937
ELECTRICAL EQUIPMENT - 0.8%
Littlefuse, Inc.* 10,000 192,500
Molex, Inc. 7,421 233,761
Rayovac Corporation* 7,900 179,231
ELECTRONICS - 2.5%
Sanmina Corporation* 5,400 409,725
SCI Systems, Inc.* 6,000 285,000
Symbol Technologies, Inc. 14,963 551,742
Teradyne, Inc.* 3,100 222,425
Waters Corporation* 9,600 510,000
ENTERTAINMENT - 0.3%
Premier Parks Inc.* 7,500 275,625
ENVIRONMENTAL - 1.0%
Allied Waste Industries, Inc.* 8,500 167,875
Superior Services, Inc.* 7,000 186,813
Waste Management, Inc. 7,812 419,895
</TABLE>
See Notes To Financial Statements
10
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ---------------------------------------------- --------- ------------
<S> <S> <S>
FINANCIAL SERVICES - 3.1%
Capital One Financial Corporation 5,100 $ 284,006
Concord EFS, Inc.* 7,000 239,539
Finova Group, Inc. 6,000 315,750
Franklin Resources, Inc. 9,300 377,812
Paychex, Inc. 10,125 322,734
Providian Financial Corporation 7,500 701,250
Waddell & Reed Financial, Inc. 9,000 246,937
FOOD PROCESSING - 0.4%
Tootsie Roll Industries, Inc. 7,776 300,348
FOOD WHOLESALERS - 0.3%
U.S. Foodservice* 6,000 255,750
FOREIGN TELECOMMUNICATIONS - 0.7%
Ericsson (LM) Telephone-ADR-Class B 6,000 197,625
Vodafone AirTouch PLC-ADR 2,000 394,000
FURNITURE / HOME FURNISHINGS - 0.9%
HON INDUSTRIES Inc. 12,000 350,250
Leggett & Platt, Inc. 12,300 342,094
GROCERY - 0.9%
Safeway, Inc.* 8,800 435,600
Whole Foods Market Inc.* 6,000 288,375
HOMEBUILDING - 0.3%
Lennar Corporation 9,600 230,400
INDUSTRIAL SERVICES - 2.3%
ACNielsen Corporation* 7,500 226,875
Apollo Group, Inc.* 8,250 219,141
DeVry, Inc.* 12,000 268,500
Equifax, Inc. 7,200 256,950
Interim Services, Inc.* 6,000 123,750
ITT Educational Services, Inc.* 7,500 195,469
Quintiles Transnational Corporation* 6,000 252,000
Robert Half International, Inc.* 7,750 201,500
Sylvan Learning Systems, Inc.* 4,500 122,344
INSURANCE - 2.8%
Ace Ltd. 8,900 251,425
Ambac Financial Group, Inc. 5,200 297,050
E. W. Blanch Holdings, Inc. 3,500 238,656
Mercury General Corporation 4,900 166,600
Mutual Risk Management Ltd. 11,632 388,218
Progressive Corporation 2,800 406,000
Protective Life Corporation 9,100 309,400
XL Capital Ltd. 3,500 197,750
MACHINERY - 1.1%
Cognex Corporation* 5,000 157,813
Donaldson Company, Inc. 9,600 235,200
IDEX Corporation 7,500 246,562
Parker-Hannifin Corporation 4,500 205,875
MANUFACTURED HOUSING - 0.2%
Oakwood Homes Corporation 14,500 190,313
MEDICAL SERVICES - 1.9%
Covance Inc.* 11,000 263,312
HCR Manor Care, Inc.* 5,550 134,241
Health Management Associates* 16,705 187,931
Lincare Holdings, Inc.* 8,100 202,500
McKesson HBOC, Inc. 4,000 128,500
Renal Care Group, Inc.* 7,000 181,125
United HealthCare Corporation 3,000 187,875
Universal Health Services, Inc. - Class B* 5,300 253,075
MEDICAL SUPPLIES - 4.8%
Boston Scientific Corporation* 6,000 263,625
Guidant Corporation 12,000 613,500
</TABLE>
See Notes To Financial Statements
11
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ---------------------------------------------- --------- ------------
<S> <C> <C>
MEDICAL SUPPLIES - 4.8% (Continued)
Henry Schein, Inc.* 4,500 $ 142,594
Medtronic, Inc. 9,500 739,813
Perclose, Inc.* 5,500 264,344
ResMed Inc.* 7,000 232,313
Steris Corporation* 12,200 236,375
Sybron International Corp.* 13,000 358,313
VISX, Inc.* 8,500 673,094
Xomed Surgical Products, Inc.* 5,500 267,781
METAL FABRICATING - 0.2%
Lincoln Electric Holdings, Inc. 9,700 198,850
NEWSPAPER - 0.2%
Central Newspapers, Inc. 5,000 187,500
OFFICE EQUIPMENT & SUPPLIES - 0.4%
Avery Dennison Corporation 5,700 344,137
OILFIELD SERVICES - 1.6%
BJ Services Company* 11,500 338,531
Cooper Cameron Corporation* 6,900 255,731
Smith International, Inc.* 8,800 382,250
Veritas DGC, Inc.* 7,800 142,838
Weatherford International, Inc.* 5,335 195,394
PACKAGING & CONTAINER - 0.4%
Sealed Air Corporation* 4,900 317,887
PETROLEUM - 0.4%
Apache Corporation 4,500 175,500
Devon Energy Corporation 4,500 161,156
PRECISION INSTRUMENT - 0.7%
Dionex Corporation* 6,000 243,000
PE Corp-PE Biosystems Group 2,500 286,875
PRINTING - 0.6%
Valassis Communications, Inc.* 12,000 439,500
PUBLISHING - 0.4%
Meredith Corporation 10,000 346,250
RAILROAD - 0.5%
Kansas City Southern Ind., Inc. 6,000 382,875
REAL ESTATE INVESTMENT MANAGEMENT - 1.0%
Jones Lang LaSalle Inc.* 10,800 321,975
Security Capital Group, Inc. - Class B* 16,800 244,650
Trammell Crow Company* 14,000 230,125
RECREATION - 1.1%
Carnival Corporation 9,000 436,500
Harley-Davidson, Inc. 8,000 435,000
RESTAURANT - 1.0%
Outback Steakhouse, Inc.* 5,625 221,133
Starbucks Corporation* 16,200 608,512
RETAIL STORE - 8.8%
AutoZone, Inc.* 8,100 244,012
Bed Bath & Beyond, Inc.* 14,000 539,000
BJ's Wholesale Club, Inc.* 11,000 330,688
CDW Computer Centers, Inc.* 5,000 220,000
Circuit City Stores, Inc. 5,300 492,900
Consolidated Stores Corporation* 7,800 210,600
Dollar General Corporation 23,241 673,989
Dollar Tree Stores, Inc.* 6,000 264,000
Harcourt General, Inc. 4,500 232,031
Kohl's Corporation* 5,800 447,688
Lands' End, Inc.* 7,200 349,200
Linens 'n Things Inc.* 7,000 306,250
Office Depot, Inc.* 20,100 443,456
</TABLE>
See Notes To Financial Statements
12
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ---------------------------------------------- --------- ------------
<S> <C> <C>
RETAIL STORE - 8.8% (Continued)
Staples Inc.* 10,500 $ 324,844
The Men's Wearhouse, Inc.* 9,225 235,238
Tiffany & Company 7,000 675,500
TJX Companies, Inc. 12,000 399,750
Williams-Sonoma, Inc.* 10,000 348,125
Zale Corporation* 7,000 280,000
SECURITIES BROKERAGE - 2.3%
Charles Schwab Corporation 7,000 769,125
Investment Technology Group, Inc. 12,444 399,764
Legg Mason, Inc. 10,000 385,000
Raymond James Financial, Inc. 10,125 242,367
SEMICONDUCTOR - 7.3%
Altera Corporation* 13,600 500,650
Analog Devices, Inc.* 8,500 426,594
Applied Materials, Inc.* 7,000 517,125
Dallas Semiconductor Corporation 6,500 329,875
Lattice Semiconductor Corporation* 6,000 373,500
Level One Communications, Inc.* 5,500 269,156
Linear Technology Corporation 14,800 995,300
Maxim Integrated Products, Inc.* 13,000 864,500
PMC-Sierra, Inc.* 6,800 400,775
Vitesse Semiconductor Corporation* 7,500 505,781
Xilinx, Inc.* 10,600 606,850
TELECOMMUNICATIONS EQUIPMENT - 2.0%
ADC Telecommunications, Inc.* 5,500 250,594
General Instrument Corporation* 8,000 340,000
Tellabs, Inc.* 7,000 472,938
Uniphase Corporation* 3,000 498,000
TELECOMMUNICATIONS SERVICE - 4.1%
ICG Communications Inc.* 7,000 149,625
Intermedia Communications, Inc.* 7,000 210,000
MCI WorldCom, Inc.* 6,500 560,625
McleodUSA Inc.* 6,500 357,500
Nextel Communications, Inc.* 9,000 451,688
NEXTLINK Communications, Inc.* 5,000 371,875
NTL Incorporated* 2,500 215,469
United States Cellular Corporation* 3,500 187,250
Viatel, Inc.* 9,000 505,125
Western Wireless Corporation* 9,500 256,500
THRIFT - 0.5%
Charter One Financial, Inc. 6,300 175,219
JSB Financial, Inc. 5,000 254,375
TOYS - 0.3%
Mattel, Inc. 9,125 240,672
TRANSPORT SERVICES - 0.8%
C.H. Robinson Worldwide, Inc. 8,000 294,000
Expeditors International of Washington, Inc. 12,000 327,000
--------------
TOTAL COMMON STOCK - 99.6%
(Cost $44,986,173) $ 79,471,357
==============
</TABLE>
* Securities are non-income producing
ADR - American Depositary Receipt
See Notes To Financial Statements
13
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Principal Market
Fixed Income Securities Rating Coupon Maturity Amount Value
- ----------------------------------------------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
AEROSPACE / DEFENSE - 1.8%
Lockheed Martin Corporation BBB+ 7.650 05/01/16 $ 150,000 $ 151,596
AIR TRANSPORT - 1.2%
Northwest Airlines, Inc. BB 8.700 03/15/07 100,000 98,077
AUTO PARTS - 1.2%
Federal-Mogul Corporation BB+ 7.750 07/01/06 100,000 98,500
AUTO & TRUCK - 1.2%
Ford Motor Company A 7.250 10/01/08 100,000 102,009
BANK - 6.8%
Capital One Financial BB+ 7.250 05/01/06 150,000 143,438
Citicorp A+ 7.250 10/15/11 250,000 250,361
Morgan, J.P. & Company AA- 8.500 08/15/03 100,000 106,627
Swiss Bank Corp.-NY AA 7.375 07/15/15 75,000 74,786
BEVERAGE - 1.2%
Anheuser-Busch Companies, Inc. A+ 7.125 07/01/17 100,000 97,588
BROADCASTING / CABLE TV - 3.0%
Time Warner, Inc. BBB 7.250 10/15/17 250,000 250,000
BUILDING MATERIALS - 1.8%
American Standard, Inc. BB- 7.375 04/15/05 150,000 148,398
DIVERSIFIED - 4.0%
Service Corp. International BBB 7.700 04/15/09 100,000 100,509
Tyco International Group SA A- 6.125 01/15/09 250,000 234,173
ELECTRIC & GAS UTILITIES - 8.2%
Duke Energy Corporation AA- 6.375 03/01/08 75,000 72,447
Duquesne Light Company BBB+ 7.550 06/15/25 150,000 146,819
Florida Power Corporation AA- 6.875 02/01/08 70,000 70,527
Ontario Hydro AA- 7.450 03/31/13 150,000 158,809
Potomac Edison Company A+ 7.750 02/01/23 95,000 93,478
Public Service Electric & Gas A- 7.000 09/01/24 50,000 47,430
Texas Utilities Company BBB+ 7.875 03/01/23 100,000 99,358
ENVIRONMENTAL - 0.5%
Waste Management, Inc. BBB+ 7.650 03/15/11 45,000 46,305
FINANCIAL SERVICES - 8.0%
Fairfax Financial Holdings BBB+ 8.250 10/01/15 250,000 270,000
</TABLE>
See Note To Financial Statements
14
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Principal Market
Fixed Income Securities Rating Coupon Maturity Amount Value
- ----------------------------------------------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
FINANCIAL SERVICES - 8.0% (Continued)
GMAC A 6.625 10/15/05 $ 125,000 $ 124,399
Household Finance Corporation A 6.375 08/01/10 150,000 141,401
Sears Roebuck Acceptance Corp. A- 6.875 10/15/17 150,000 141,524
FOOD PROCESSING - 1.2%
Archer Daniels Midland Company AA- 7.125 03/01/13 100,000 100,799
FOREIGN GOVERNMENT - 1.9%
Province of Quebec A+ 8.800 04/15/03 150,000 161,192
FOREIGN TELECOMMUNICATIONS - 1.1%
Cable & Wireless Communications PLC A- 6.750 12/01/08 100,000 95,881
GROCERY - 1.8%
Great Atlantic & Pacific Tea Co. BBB- 7.700 01/15/04 150,000 149,726
HOMEBUILDING - 1.2%
Kaufman & Broad Home Corp. BB- 9.625 11/15/06 100,000 102,404
HOTEL / GAMING - 4.0%
Harrahs Operating Co., Inc. BB+ 7.875 12/15/05 100,000 98,266
HMH Properties, Inc. BB 8.450 12/01/08 100,000 96,375
Park Place Entertainment BB+ 7.875 12/15/05 150,000 147,435
INSURANCE - 3.6%
Aetna Services, Inc. A 7.125 08/15/06 100,000 99,256
Allstate Corporation A+ 7.500 06/15/13 100,000 102,218
CIGNA Corporation A 8.250 01/01/07 100,000 106,327
MACHINERY - 2.6%
Caterpillar, Inc. A+ 9.000 04/15/06 100,000 111,260
Deere & Company A+ 8.950 06/15/19 100,000 108,000
MEDICAL SERVICES - 1.7%
Tenet Healthcare Corporation BB+ 8.000 01/15/05 150,000 147,731
METALS & MINING - 1.5%
Alcan Aluminum Ltd. A- 5.875 04/01/00 125,000 124,926
NATURAL GAS - 1.2%
Columbia Energy Group BBB+ 7.320 11/28/10 100,000 101,000
NEWSPAPER - 2.5%
Hollinger International, Inc. BB 8.625 03/15/05 150,000 153,694
Knight-Ridder, Inc. A 9.875 04/15/09 50,000 61,127
</TABLE>
See Notes To Financial Statements
15
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Principal Market
Fixed Income Securities Rating Coupon Maturity Amount Value
- ----------------------------------------------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
OILFIELD SERVICES - 2.8%
Offshore Logistics, Inc. BB 7.875 01/15/08 $ 150,000 $ 141,000
Pride International, Inc. BB 9.375 05/01/07 100,000 99,578
PACKAGING & CONTAINERS - 1.8%
Owens-Illinois, Inc. BB+ 8.100 05/15/07 150,000 149,250
PETROLEUM - 3.4%
Kerr-McGee Corporation BBB 7.000 11/01/11 150,000 146,233
Phillips Petroleum Company A- 6.650 07/15/18 150,000 137,969
RAILROAD - 4.6%
Burlington Northern Santa Fe BBB+ 8.750 02/25/22 250,000 285,739
Missouri Pacific Railroad Co. A- 9.400 12/15/00 100,000 104,474
RECREATION - 1.8%
Speedway Motorsports, Inc. B+ 8.500 08/15/07 150,000 154,500
RENTAL AUTO / EQUIPMENT - 2.3%
Hertz Corporation A- 6.625 05/15/08 200,000 192,865
SECURITIES BROKERAGE - 2.7%
Merrill Lynch & Co. AA- 6.875 11/15/18 250,000 231,049
STEEL - 1.8%
AK Steel Corporation BB- 9.125 12/15/06 150,000 154,892
TELECOMMUNICATIONS SERVICE - 5.1%
AT&T Corporation AA- 7.750 03/01/07 90,000 95,042
MasTec, Inc. BB- 7.750 02/01/08 200,000 194,000
New York Telephone Company A+ 7.250 02/15/24 150,000 146,203
TEXTILE - 1.6%
Interface, Inc. BB+ 7.300 04/01/08 150,000 137,250
TOBACCO - 1.1%
Philip Morris Companies, Inc. A 6.375 02/01/06 100,000 96,572
U.S. GOVERNMENT - 2.8%
U.S. Treasury - Bond 6.500 05/15/05 230,000 236,900
-----------
TOTAL FIXED-INCOME SECURITIES - 95.0%
(Cost $8,102,582) $ 8,039,692
===========
</TABLE>
See Notes To Financial Statements
16
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
ADVERTISING - 0.5%
Catalina Marketing Corporation* 1,100 $ 101,200
Harte-Hanks Inc. 2,000 54,250
Interpublic Group of Companies, Inc. 1,400 121,275
Lamar Advertising Company* 1,700 69,594
Omnicom Group, Inc. 1,500 120,000
Outdoor Systems, Inc.* 6,750 246,375
AEROSPACE / DEFENSE - 1.2%
AlliedSignal, Inc. 10,200 642,600
Boeing Company 9,740 428,560
Gulfstream Aerospace Corporation* 1,700 114,856
Lockheed Martin Corporation 6,000 223,500
United Technologies Corporation 4,400 315,425
AIR TRANSPORT - 0.1%
Air Express International Corp. 2,400 60,900
Comair Holdings, Inc. 5,343 111,201
APPAREL - 0.3%
Cintas Corporation 1,300 87,344
Quiksilver, Inc.* 4,500 117,281
VF Corporation 3,600 153,900
Warnaco Group, Inc. 1,500 40,125
AUTO PARTS - 0.2%
Borg-Warner Automotive, Inc. 2,000 110,000
Dana Corporation 2,600 119,762
Genuine Parts Company 3,000 105,000
AUTO & TRUCK - 0.3%
Ford Motor Company 4,900 280,525
General Motors Corporation 2,400 158,400
BANK - 4.8%
Banc One Corporation 9,260 551,549
Bank of America Corporation 14,613 1,071,316
Bank of New York Company, Inc. 5,600 205,450
BankBoston Corporation 5,080 259,715
Chase Manhattan Corporation 9,680 837,320
City National Corporation 1,600 59,900
Community First Bankshares, Inc. 2,000 47,750
First American Corporation 4,400 182,875
First Security Corporation 8,000 218,000
First Tennessee National Corp. 11,600 444,425
First Union Corporation 11,600 545,200
J.P. Morgan & Company 1,500 210,750
KeyCorp 5,000 160,625
Mellon Bank Corporation 13,300 483,788
National City Corporation 2,000 131,000
Northern Trust Corporation 1,700 164,900
PNC Bank Corporation 4,000 230,500
State Street Corporation 2,400 204,900
U.S. Bancorp 3,900 130,162
U.S. Trust Corporation 1,400 129,500
Wells Fargo Company 11,130 475,807
Wilmington Trust Corporation 3,500 200,812
Zions Bancorporation 1,500 95,250
BEVERAGE - 0.6%
Anheuser-Busch Companies, Inc. 7,400 524,938
Diageo PLC-ADR 4,800 206,400
PepsiCo, Inc. 3,000 116,063
BIOTECHNOLOGY - 0.5%
Amgen, Inc.* 2,200 133,925
Biogen, Inc.* 4,000 257,250
Centocor Inc.* 1,500 69,937
Human Genome Sciences, Inc.* 1,700 67,150
Immunex Corporation* 500 63,719
Incyte Pharmaceuticals, Inc.* 1,400 37,013
Millennium Pharmaceuticals, Inc.* 3,000 108,000
PE Corp-Celera Genomics Group* 500 8,094
</TABLE>
See Notes To Financial Statements
17
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
BROADCASTING / CABLE TV - 1.2%
Chancellor Media Corporation* 2,400 $ 132,300
Clear Channel Communications* 3,499 241,212
Cox Communications, Inc.* 3,000 110,438
Emmis Communications Corporation* 2,000 98,750
Hispanic Broadcasting Corporation* 1,600 121,400
TCA Cable TV, Inc. 3,100 172,050
The Walt Disney Company 9,000 277,312
Time Warner, Inc. 3,000 220,500
Univision Communications, Inc.* 3,300 214,500
Westwood One, Inc.* 1,700 60,669
Young Broadcasting Inc.* 1,500 63,844
BUILDING MATERIALS - 0.2%
Armstrong World Industries, Inc. 2,500 144,531
Modine Manufacturing Company 5,300 172,581
CHEMICAL - 1.1%
duPont, E.I. de Nemours & Co. 7,000 477,750
Ecolab, Inc. 2,500 109,063
Lilly Industries, Inc. 2,500 46,406
MacDermid, Inc. 2,000 93,000
Rohm & Haas Company 7,000 300,125
Sherwin-Williams Company 4,000 111,000
Sigma-Aldrich Corporation 2,600 89,537
Union Carbide Corporation 2,100 102,375
Valspar Corporation 2,600 98,800
WD-40 Company 7,600 190,000
COMPUTER & PERIPHERALS - 1.3%
Cisco Systems, Inc.* 2,850 183,825
Comverse Technology, Inc.* 1,200 90,600
Diebold, Inc. 1,400 40,250
EMC Corporation* 3,500 192,938
Gateway, Inc.* 1,200 70,800
Hewlett-Packard Company 6,100 611,525
Microchip Technology, Inc.* 1,500 71,063
Network Appliance Inc.* 3,400 189,975
Sun Microsystems, Inc.* 3,000 206,625
Synopsys, Inc.* 2,000 110,375
VERITAS Software Corporation* 1,300 123,419
COMPUTER SOFTWARE & SERVICES - 2.5%
Adobe Systems, Inc. 1,200 98,588
Affiliated Computer Services, Inc.* 2,000 101,250
America Online, Inc.* 2,500 275,781
Automatic Data Processing, Inc. 8,000 352,000
BARRA, Inc.* 2,500 63,125
BMC Software, Inc.* 4,000 216,000
Cadence Design Systems, Inc.* 3,700 47,175
Check Point Software Technologies Ltd.* 1,800 96,525
Citrix Systems, Inc.* 3,600 203,400
CMGI Inc.* 1,200 136,875
Compuware Corporation* 8,000 254,500
Concord Communications, Inc.* 1,500 67,500
DST Systems, Inc.* 1,500 94,313
Electronic Arts, Inc.* 2,000 108,500
FactSet Research Systems Inc. 1,000 56,625
IDX Systems Corporation* 1,600 36,100
IMS Health Incorporated 3,700 115,625
Infoseek Corporation* 1,100 52,731
Intuit, Inc.* 1,700 153,213
Keane, Inc.* 1,500 33,938
Legato Systems, Inc.* 1,500 86,625
Mercury Interactive Corporation* 2,000 70,750
Network Associates, Inc.* 2,800 41,125
Oracle Corporation* 5,681 210,889
Shared Medical Systems Corporation 900 58,725
Sterling Commerce, Inc.* 3,500 128,625
SunGard Data Systems, Inc.* 3,000 103,500
Symantec Corporation* 2,400 61,200
Visio Corporation* 2,600 98,963
Whittman-Hart Inc.* 2,000 63,500
Wind River Systems, Inc.* 3,000 48,188
</TABLE>
See Notes To Financial Statements
18
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
DIVERSIFIED - 1.1%
Corning, Inc. 3,500 $ 245,437
Danaher Corporation 1,500 87,188
Minnesota Mining & Manufacturing 4,300 373,831
PPG Industries, Inc. 6,100 360,281
Raychem Corporation 2,000 74,000
Roper Industries, Inc. 2,000 64,000
Teleflex, Inc. 2,000 86,875
Textron, Inc. 3,000 246,937
Viad Corp. 2,500 77,344
DRUG - 3.3%
Abbott Laboratories 7,200 327,600
American Home Products Corp. 6,800 391,000
BioChem Pharma, Inc.* 2,200 41,250
Biomatrix, Inc.* 2,000 43,125
Bristol-Myers Squibb Company 21,500 1,510,375
Cardinal Health, Inc. 2,700 173,137
Elan Corporation PLC-ADR* 3,000 83,250
Express Scripts, Inc.* 1,000 60,187
Gilead Sciences, Inc.* 1,700 88,825
MedImmune, Inc.* 1,200 81,300
Merck & Company, Inc. 12,000 883,500
Pfizer, Inc. 2,000 219,500
Schering-Plough Corporation 7,000 371,000
Warner-Lambert Company 5,500 381,562
Watson Pharmaceuticals, Inc.* 1,600 56,100
DRUGSTORE - 0.2%
CVS Corporation 1,600 81,200
Duane Reade Inc.* 2,000 61,000
Rite Aid Corporation 4,000 98,500
ELECTRIC & GAS UTILITIES - 3.0%
AES Corporation* 2,800 162,750
Carolina Power & Light Company 4,700 201,219
CMS Energy Corporation 3,300 138,187
Consolidated Edison Co. of N.Y. 5,400 244,350
Constellation Energy Group 5,700 168,862
Duke Energy Corporation 8,935 486,399
Edison International 10,500 282,188
FirstEnergy Corp. 4,500 139,500
Florida Progress Corporation 7,500 309,844
GPU, Inc. 3,600 151,875
Hawaiian Electric Industries, Inc. 6,100 216,550
New Century Energies, Inc. 4,700 182,419
Northern States Power Company 5,000 120,938
Reliant Energy, Inc. 8,800 243,100
SCANA Corporation 5,000 116,875
Southern Company 9,000 238,500
TECO Energy, Inc. 13,200 300,300
Texas Utilities Company 7,800 321,750
Unicom Corporation 6,000 231,375
ELECTRICAL EQUIPMENT - 1.0%
Emerson Electric Company 5,000 314,687
General Electric Company 7,500 843,750
Hubbell Inc.-Class B 3,200 145,200
Littlefuse, Inc.* 2,000 38,500
Molex, Inc. 2,928 92,232
Rayovac Corporation 2,300 52,181
ELECTRONICS - 0.5%
Sanmina Corporation* 1,900 144,163
SCI Systems, Inc.* 2,000 95,000
Symbol Technologies, Inc. 6,750 248,906
Teradyne, Inc.* 1,000 71,750
Waters Corporation* 3,000 159,375
ENTERTAINMENT - 0.1%
Premier Parks Inc. 2,500 91,875
</TABLE>
See Notes To Financial Statements
19
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
ENVIRONMENTAL - 0.4%
Allied Waste Industries, Inc.* 2,700 $ 53,325
Browning-Ferris Industries, Inc. 4,500 193,500
Superior Services, Inc.* 3,100 82,731
Waste Management, Inc. 5,687 305,676
FINANCIAL SERVICES - 2.4%
American Express Company 5,000 650,625
Associates First Capital Corporation 1,834 80,925
Capital One Financial Corporation 1,500 83,531
Citigroup Inc. 8,100 384,750
Concord EFS, Inc.* 3,000 126,937
Countrywide Credit Industries, Inc. 4,000 171,000
Dun & Bradstreet Corporation 4,700 166,556
Fannie Mae 6,800 464,950
Finova Group, Inc. 2,000 105,250
Franklin Resources, Inc. 3,000 121,875
Freddie Mac 4,000 232,000
Morgan Stanley Dean Witter & Co. 4,000 411,000
Paychex, Inc. 5,062 161,367
Providian Financial Corporation 2,400 224,400
FOOD PROCESSING - 1.0%
ConAgra Inc. 5,622 149,676
General Mills, Inc. 4,900 393,837
Heinz (H.J.) Company 5,000 250,625
Hershey Foods Corp. 2,800 166,250
Kellogg Company 3,000 99,000
Quaker Oats Company 2,000 132,750
Sara Lee Corporation 9,000 204,188
Tootsie Roll Industries, Inc. 2,622 101,275
FOOD WHOLESALERS - 0.1%
U.S. Foodservice* 2,000 85,250
FOREIGN TELECOMMUNICATIONS - 0.5%
BCE Inc. 4,400 216,975
Ericsson (LM) Telephone-ADR-Class B 3,600 118,575
Reuters Group PLC-ADR 2,733 221,544
Vodafone AirTouch PLC-ADR 800 157,600
FURNITURE / HOME FURNISHINGS - 0.1%
HON INDUSTRIES Inc. 3,300 96,319
Leggett & Platt, Inc. 3,100 86,219
GROCERY - 0.3%
Albertson's, Inc. 2,900 149,531
Safeway, Inc.* 4,000 198,000
Whole Foods Market Inc.* 1,900 91,319
HOMEBUILDING - 0.1%
Lennar Corporation 3,200 76,800
HOUSEHOLD PRODUCTS - 0.3%
Clorox Company 2,000 213,625
Whirlpool Corporation 2,500 185,000
INDUSTRIAL SERVICES - 0.5%
ACNielsen Corporation* 2,800 84,700
Apollo Group, Inc.* 3,050 81,016
DeVry, Inc.* 3,800 85,025
Equifax, Inc. 2,600 92,788
Interim Services, Inc.* 2,232 46,035
ITT Educational Services, Inc.* 2,200 57,338
Quintiles Transnational Corporation* 2,000 84,000
Robert Half International, Inc.* 2,250 58,500
Sylvan Learning Systems, Inc.* 3,075 83,602
INSURANCE - 2.3%
Ace Ltd. 3,000 84,750
AFLAC, Inc. 4,800 229,800
Ambac Financial Group, Inc. 2,600 148,525
American General Corporation 2,500 188,438
American International Group, Inc. 6,039 708,073
E. W. Blanch Holdings, Inc. 500 34,094
</TABLE>
See Notes To Financial Statements
20
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
INSURANCE - 2.3% (Continued)
Hartford Financial Services Group, Inc. 4,000 $ 233,250
Lincoln National Corporation 5,000 261,562
Marsh & McLennan Companies, Inc. 6,600 499,537
MBIA, Inc. 3,000 194,250
Mercury General Corporation 1,400 47,600
MGIC Investment Corporation 3,800 184,775
Mutual Risk Management Ltd. 6,666 222,478
Progressive Corporation 1,000 145,000
Protective Life Corporation 2,700 91,800
XL Capital Ltd. 1,000 56,500
MACHINERY - 0.6%
Caterpillar, Inc. 3,600 216,000
Cognex Corporation* 1,500 47,344
Deere & Company 4,200 164,587
Donaldson Company, Inc. 2,800 68,600
Dover Corporation 7,000 245,000
IDEX Corporation 2,000 65,750
Parker-Hannifin Corporation 1,575 72,056
MANUFACTURED HOUSING - 0.0%
Oakwood Homes Corporation 2,000 26,250
MEDICAL SERVICES - 0.4%
Covance Inc.* 2,500 59,844
HCR Manor Care, Inc.* 3,700 89,494
Health Management Associates* 8,352 93,960
Lincare Holdings, Inc.* 2,000 50,000
McKesson HBOC, Inc. 2,000 64,250
Renal Care Group, Inc.* 2,000 51,750
United HealthCare Corporation 1,300 81,413
Universal Health Services, Inc. - Class B* 2,200 105,050
MEDICAL SUPPLIES - 1.1%
Baxter International, Inc. 3,500 212,188
Boston Scientific Corporation* 2,800 123,025
Guidant Corporation 4,000 204,500
Henry Schein, Inc.* 1,500 47,531
Johnson & Johnson 2,560 250,880
Medtronic, Inc. 3,600 280,350
Perclose, Inc.* 500 24,031
ResMed Inc.* 1,000 33,188
Steris Corporation* 2,000 38,750
Sybron International Corp.* 4,000 110,250
VISX, Inc.* 3,000 237,562
Xomed Surgical Products, Inc.* 700 34,081
METAL FABRICATING - 0.2%
Kaydon Corporation 5,500 184,937
Lincoln Electric Holdings, Inc. 3,500 71,750
METALS & MINING - 0.3%
Alcoa, Inc. 8,000 495,000
NATURAL GAS - 0.4%
Enron Corporation 5,400 441,450
The Williams Companies, Inc. 4,500 191,531
NEWSPAPER - 0.2%
Central Newspapers, Inc. 2,000 75,000
Gannett Company, Inc. 3,800 271,225
OFFICE EQUIPMENT & SUPPLIES - 0.6%
Avery Dennison Corporation 2,200 132,825
Pitney Bowes, Inc. 7,000 449,750
Xerox Corporation 5,800 342,563
OILFIELD SERVICES - 0.8%
Baker Hughes, Inc. 6,500 217,750
BJ Services Company* 3,200 94,200
Cooper Cameron Corporation* 1,900 70,419
Halliburton Company 7,000 316,750
Schlumberger Ltd. 3,180 202,526
Smith International, Inc.* 2,800 121,625
</TABLE>
See Notes To Financial Statements
21
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
OILFIELD SERVICES - 0.8% (Continued)
Veritas DGC, Inc.* 2,500 $ 45,781
Weatherford International, Inc.* 1,800 65,925
PACKAGING & CONTAINER - 0.1%
Sealed Air Corporation* 2,000 129,750
PAPER & FOREST PRODUCTS - 0.7%
Fort James Corporation 3,000 113,625
Georgia-Pacific Group 2,800 132,650
International Paper Company 8,000 402,000
Weyerhaeuser Company 4,400 302,500
PETROLEUM - 3.3%
Apache Corporation 1,800 70,200
BP Amoco PLC-ADR 8,896 965,216
Chevron Corporation 5,300 503,831
Devon Energy Corporation 1,500 53,719
Exxon Corporation 12,600 971,775
Mobil Corporation 10,000 990,000
Repsol SA-ADR 10,200 207,188
Royal Dutch Petroleum Company 13,600 819,400
Texaco, Inc. 2,300 144,038
PRECISION INSTRUMENT - 0.1%
Dionex Corporation* 2,000 81,000
PE Corp-PE Biosystems Group 1,000 114,750
PRINTING - 0.1%
Valassis Communications, Inc.* 3,900 142,838
PUBLISHING - 0.5%
McGraw-Hill Companies, Inc. 8,000 431,500
Meredith Corporation 3,700 128,113
Value Line, Inc. 4,700 183,300
RAILROAD - 0.4%
Kansas City Southern Ind., Inc. 4,500 287,156
Norfolk Southern Corporation 8,100 244,013
REAL ESTATE INVESTMENT MANAGEMENT - 0.2%
Jones Lang LaSalle Inc.* 4,200 125,212
Security Capital Group, Inc. - Class B* 5,400 78,638
Trammell Crow Company* 4,000 65,750
REAL ESTATE INVESTMENT TRUST - 1.2%
Archstone Communities Trust 10,900 239,119
CarrAmerica Realty Corporation 5,000 125,000
Duke Realty Investments, Inc. 7,200 162,450
Equity Office Properties Trust 9,700 248,562
Federal Realty Investment Trust 4,800 110,100
Prologis Trust 14,908 301,887
Rouse Company 9,800 248,675
Simon Property Group, Inc. 6,400 162,400
Weingarten Realty Investors 3,200 133,600
RECREATION - 0.4%
Brunswick Corporation 4,000 111,500
Carnival Corporation 4,000 194,000
Harley-Davidson, Inc. 4,000 217,500
RESTAURANT - 0.4%
McDonald's Corporation 5,000 205,625
Outback Steakhouse, Inc.* 3,375 132,680
Starbucks Corporation* 8,000 300,500
RETAIL STORE - 2.5%
AutoZone, Inc.* 2,400 72,300
Bed Bath & Beyond, Inc.* 8,000 308,000
BJ's Wholesale Club, Inc.* 3,400 102,212
CDW Computer Centers, Inc.* 2,000 88,000
</TABLE>
See Notes To Financial Statements
22
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
RETAIL STORE - 2.5% (Continued)
Circuit City Stores, Inc. 2,200 $ 204,600
Consolidated Stores Corporation* 1,900 51,300
Dayton Hudson Corporation 8,000 520,000
Dollar General Corporation 12,206 353,974
Dollar Tree Stores, Inc.* 2,200 96,800
Harcourt General, Inc. 1,700 87,656
Kohl's Corporation* 1,800 138,938
Lands' End, Inc.* 2,200 106,700
Linens 'n Things Inc.* 1,800 78,750
Office Depot, Inc.* 6,300 138,994
Sears, Roebuck & Company 3,900 173,794
Staples Inc.* 3,300 102,094
Tandy Corporation 6,400 312,800
The Men's Wearhouse, Inc.* 2,250 57,375
Tiffany & Company 2,300 221,950
TJX Companies, Inc. 4,400 146,575
Williams-Sonoma, Inc.* 3,500 121,844
Zale Corporation* 2,200 88,000
SECURITIES BROKERAGE - 0.7%
A.G. Edwards, Inc. 4,500 145,125
Bear Stearns Companies, Inc. 2,930 136,978
Charles Schwab Corporation 2,500 274,687
Investment Technology Group, Inc. 4,626 148,610
Legg Mason, Inc. 3,000 115,500
Merrill Lynch & Company, Inc. 2,400 190,800
Raymond James Financial, Inc. 2,000 47,875
SEMICONDUCTOR - 2.3%
Altera Corporation* 5,000 184,063
Analog Devices, Inc.* 2,900 145,544
Applied Materials, Inc.* 1,500 110,813
Dallas Semiconductor Corporation 2,000 101,500
Intel Corporation 9,600 571,200
Lattice Semiconductor Corporation* 1,800 112,050
Level One Communications, Inc.* 1,500 73,406
Linear Technology Corporation 4,400 295,900
Maxim Integrated Products, Inc.* 4,800 319,200
Motorola, Inc. 2,500 236,875
PMC-Sierra, Inc.* 2,000 117,875
SDL, Inc.* 3,000 153,187
Texas Instruments, Inc. 3,800 547,200
Vitesse Semiconductor Corporation* 2,500 168,594
Xilinx, Inc.* 4,200 240,450
STEEL - 0.3%
Nucor Corporation 7,800 370,013
TELECOMMUNICATIONS EQUIPMENT - 0.4%
ADC Telecommunications, Inc.* 2,000 91,125
General Instrument Corporation* 2,300 97,750
Tellabs, Inc.* 2,560 172,960
Uniphase Corporation* 1,100 182,600
TELECOMMUNICATIONS SERVICE - 4.2%
Aliant Communications Inc. 3,000 138,563
ALLTEL Corporation 6,276 448,734
Ameritech Corporation 6,000 441,000
AT&T Corporation 2,250 125,156
Bell Atlantic Corporation 8,200 533,000
BellSouth Corporation 20,000 937,500
Cincinnati Bell, Inc. 5,000 124,687
GTE Corporation 11,500 871,125
ICG Communications Inc.* 2,500 53,437
Intermedia Communications, Inc.* 2,400 72,000
MCI WorldCom, Inc.* 2,700 232,875
McleodUSA Inc.* 2,500 137,500
Nextel Communications, Inc.* 2,700 135,506
NEXTLINK Communications, Inc.* 1,500 111,563
NTL Incorporated* 800 68,950
SBC Communications, Inc. 16,543 959,494
Sprint Corporation 6,400 338,000
</TABLE>
See Notes To Financial Statements
23
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
TELECOMMUNICATIONS SERVICE - 4.2% (Continued)
United States Cellular Corporation* 1,100 $ 58,850
Viatel, Inc.* 3,300 185,212
Western Wireless Corporation* 2,200 59,400
THRIFT - 0.1%
Charter One Financial, Inc. 1,890 52,566
JSB Financial, Inc. 1,500 76,313
TIRE & RUBBER - 0.1%
Goodyear Tire & Rubber Company 2,600 152,912
TOBACCO - 0.5%
Philip Morris Companies, Inc. 13,400 538,513
UST, Inc. 4,000 117,250
TOILETRIES / COSMETICS - 1.2%
Avon Products Inc. 4,000 222,000
Colgate-Palmolive Company 4,000 394,000
Gillette Company 6,000 246,000
Int'l Flavors & Fragrances, Inc. 5,000 220,313
Kimberly-Clark Corporation 7,300 416,100
Proctor & Gamble Company 2,400 214,200
TOYS - 0.2%
Hasbro, Inc. 6,750 188,578
Mattel, Inc. 3,125 82,422
TRANSPORT SERVICES - 0.2%
C.H. Robinson Worldwide, Inc. 3,000 110,250
Expeditors International of Washington, Inc. 4,200 114,450
WATER UTILITY - 0.1%
American Water Works Co., Inc. 5,500 169,125
-------------
TOTAL COMMON STOCK - 56.8%
(Cost $41,527,903) $ 81,775,075
=============
</TABLE>
* Securities are non-income producing
ADR - American Depositary Receipt
See Notes To Financial Statements
24
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Principal Market
Fixed Income Securities Rating Coupon Maturity Amount Value
- --------------------------------------------- --------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
AEROSPACE / DEFENSE - 1.4%
B.F. Goodrich Company A- 6.800 02/01/18 $ 500,000 $ 457,239
Lockheed Martin Corporation BBB+ 7.650 05/01/16 750,000 757,979
Raytheon Company BBB 6.750 08/15/07 750,000 737,538
AIR TRANSPORT - 0.3%
Federal Express Corporation BBB+ 8.760 05/22/15 350,000 390,374
AUTO & TRUCK - 1.0%
Ford Motor Company A 6.500 08/01/18 750,000 687,566
General Motors Corporation A 7.700 04/15/16 750,000 776,081
BANK - 5.2%
Banc One Corporation A 8.100 03/01/02 500,000 519,916
Bank of America Corp. A 6.500 03/15/06 500,000 490,189
BankBoston Corporation A- 7.375 09/15/06 500,000 530,900
Bankers Trust Corporation A+ 7.250 10/15/11 750,000 748,854
Chase Manhattan Corp. A 6.750 08/15/08 400,000 393,382
Comerica Bank A- 7.125 12/01/13 500,000 509,585
Dresdner Bank - New York AA- 7.250 09/15/15 750,000 736,024
First Union Corporation A- 8.000 08/15/09 500,000 523,596
MBNA America Bank, N.A. BBB 6.750 03/15/08 500,000 495,260
Morgan, J.P. & Company AA- 8.500 08/15/03 500,000 533,137
Republic New York Corporation A 7.000 03/22/11 500,000 492,741
Royal Bank of Scotland PLC A 6.375 02/01/11 500,000 463,750
Swiss Bank Corp.-NY AA 7.375 07/15/15 500,000 498,571
Wachovia Corporation A+ 6.375 02/01/09 500,000 479,302
BEVERAGE - 0.5%
Anheuser-Busch Companies, Inc. A+ 7.125 07/01/17 750,000 731,912
BUILDING MATERIALS - 0.3%
Masco Corporation A- 7.125 08/15/13 500,000 482,189
CHEMICAL - 0.7%
Monsanto Company A 8.875 12/15/09 500,000 574,897
Witco Corporation BBB+ 6.125 02/01/06 500,000 461,759
COMPUTER & PERIPHERALS - 0.3%
Dell Computer Corporation BBB+ 6.550 04/15/08 500,000 478,839
</TABLE>
See Notes To Financial Statements
25
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Principal Market
Fixed Income Securities Rating Coupon Maturity Amount Value
- --------------------------------------------- --------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
COMPUTER SOFTWARE & SERVICES - 0.3%
Computer Associates International, Inc. A- 6.500 04/15/08 $ 500,000 $ 467,338
DIVERSIFIED - 1.1%
Service Corp. International BBB 7.700 04/15/09 500,000 502,547
Tenneco, Inc. BBB 7.625 06/15/17 500,000 530,000
Tyco International Group SA A- 6.375 06/15/05 500,000 489,253
ELECTRIC & GAS UTILITIES - 5.5%
Dayton Power & Light Company AA- 8.150 01/15/26 500,000 520,276
Delmarva Power & Light Co. A 8.500 02/01/22 500,000 526,863
Duke Energy Corporation AA- 6.375 03/01/08 500,000 482,980
Duquesne Light Company BBB+ 7.550 06/15/25 750,000 734,097
Enserch Corporation BBB 6.564 07/01/05 500,000 495,310
Florida Power Corporation AA- 8.000 12/01/22 500,000 516,374
Hydro-Quebec A+ 7.000 03/01/05 500,000 505,661
Jersey Central Power & Light Co. A+ 6.750 11/01/25 500,000 443,824
Potomac Edison Company A+ 7.750 05/01/25 500,000 510,437
Public Service Electric & Gas A- 7.000 09/01/24 200,000 189,721
Texas Utilities Company BBB+ 7.875 03/01/23 750,000 745,183
Union Electric Company AA- 8.750 12/01/21 500,000 536,024
Virginia Electric Power A 8.000 03/01/04 500,000 528,854
West Penn Power Company A+ 7.875 09/01/22 500,000 513,170
Western Resources, Inc. BBB 6.875 08/01/04 500,000 502,084
FINANCIAL SERVICES - 4.8%
American General Finance Corp. A+ 8.125 08/15/09 500,000 537,664
BHP Finance USA Ltd. A- 7.250 03/01/16 500,000 492,964
Dow Capital BV A 8.700 05/15/22 250,000 261,240
Fairfax Financial Holdings BBB+ 8.250 10/01/15 750,000 810,000
Fletcher Challenge Capital Canada, Inc. BBB 8.250 06/20/16 500,000 510,000
General Electric Capital Corporation AAA 7.750 03/15/02 500,000 520,522
Household Finance Corporation A 6.375 08/01/10 ********* 942,672
IBM Credit Corporation A+ 6.750 12/24/07 500,000 483,849
John Deere Capital Corp. A 8.625 08/01/19 500,000 520,000
Morgan Stanley Dean Witter A+ 6.750 10/15/13 750,000 706,793
Santander Finance Issuances A 6.375 02/15/11 500,000 463,577
Sears Roebuck Acceptance Corp. A- 6.875 10/15/17 750,000 707,622
FOOD PROCESSING - 0.3%
Nabisco, Inc. BBB 7.050 07/15/07 500,000 494,486
</TABLE>
See Notes To Financial Statements
26
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Principal Market
Fixed Income Securities Rating Coupon Maturity Amount Value
- --------------------------------------------- --------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
FOOD WHOLESALERS - 0.2%
Sysco Corporation AA- 7.250 04/15/07 $ 250,000 $ 258,092
FOREIGN GOVERNMENT - 1.1%
Province of Nova Scotia A- 7.250 07/27/13 500,000 500,679
Province of Quebec A+ 8.800 04/15/03 350,000 376,116
Province of Saskatchewan A 9.375 12/15/20 525,000 654,214
FOREIGN TELECOMMUNICATIONS - 0.5%
Cable & Wireless Communications PLC A- 6.750 03/06/08 750,000 719,562
GROCERY - 0.3%
SUPERVALU, INC. BBB+ 6.640 06/09/06 500,000 485,775
HOTEL / GAMING - 0.8%
Hilton Hotels Corporation BBB 7.200 12/15/09 750,000 727,370
Mirage Resorts, Inc. BBB 7.250 08/01/17 500,000 459,345
INDUSTRIAL SERVICES - 0.3%
ServiceMaster Company BBB 7.100 03/01/18 500,000 473,511
INSURANCE - 2.7%
Allstate Corporation A+ 7.500 06/15/13 750,000 766,639
CIGNA Corporation A 8.250 01/01/07 500,000 531,636
CNA Financial Corporation A- 6.950 01/15/18 500,000 463,296
Leucadia National Corporation A- 7.750 08/15/13 500,000 505,000
MBIA, Inc. AA 9.375 02/15/11 500,000 580,483
Metropolitan Life Insurance Co.* A+ 7.450 11/01/23 450,000 427,272
SunAmerica, Inc. AAA 8.125 04/28/23 500,000 553,220
MACHINERY - 0.7%
Case Corporation A- 7.250 01/15/16 500,000 500,000
Clark Equipment Company A- 8.000 05/01/23 500,000 512,610
MEDICAL SUPPLIES - 0.8%
Cardinal Health, Inc. A 6.000 01/15/06 500,000 474,864
Johnson & Johnson AAA 8.720 11/01/24 550,000 612,301
METALS & MINING - 0.4%
Placer Dome, Inc. BBB 7.750 06/15/15 500,000 505,000
</TABLE>
See Notes To Financial Statements
27
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Principal Market
Fixed Income Securities Rating Coupon Maturity Amount Value
- --------------------------------------------- --------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
NATURAL GAS - 1.0%
Columbia Energy Group BBB+ 7.320 11/28/10 $ 500,000 $ 505,000
Enron Corporation BBB+ 7.000 08/15/23 500,000 451,344
Southwestern Energy Company BBB+ 6.700 12/01/05 500,000 491,234
NEWSPAPER - 0.1%
Knight-Ridder, Inc. A 9.875 04/15/09 100,000 122,255
OFFICE EQUIPMENT & SUPPLIES - 0.1%
Xerox Corporation A 9.750 03/15/00 200,000 205,361
OILFIELD SERVICES - 1.0%
Noble Drilling Corporation A- 7.500 03/15/19 750,000 738,553
Smith International, Inc. BBB+ 7.000 09/15/07 750,000 741,451
PACKAGING & CONTAINER - 0.3%
Crown Cork & Seal Company, Inc. BBB 8.375 01/15/05 390,000 414,579
PAPER & FOREST PRODUCTS - 0.3%
Weyerhaeuser Company A 6.950 08/01/17 500,000 477,455
PETROLEUM - 1.4%
Atlantic Richfield Company A 8.500 04/01/12 250,000 283,659
Louisiana Land & Exploration Co. A- 7.625 04/15/13 750,000 763,466
OXY USA, Inc. BBB 7.000 04/15/11 525,000 488,591
Phillips Petroleum Company A- 8.860 05/15/22 500,000 532,342
PUBLISHING - 0.4%
News America Holdings BBB- 8.000 10/17/16 500,000 505,644
RAILROAD - 0.4%
Burlington Northern Santa Fe BBB+ 8.750 02/25/22 500,000 571,478
RENTAL AUTO / EQUIPMENT - 0.3%
Hertz Corporation A- 6.625 05/15/08 500,000 482,163
RESTAURANT - 0.3%
Darden Restaurants, Inc. BBB 7.125 02/01/16 500,000 477,971
</TABLE>
See Notes To Financial Statements
28
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Principal Market
Fixed Income Securities Rating Coupon Maturity Amount Value
- --------------------------------------------- --------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
RETAIL STORE - 1.0%
Dayton Hudson Corporation A- 9.625 02/01/08 $ 200,000 $ 232,798
Dillard's, Inc. BBB 7.850 10/01/12 750,000 749,680
Pep Boys-Manny, Moe & Jack BBB- 7.000 06/01/05 500,000 469,193
SECURITIES BROKERAGE - 1.4%
Bear Stearns Companies, Inc. A 7.250 10/15/06 500,000 504,159
Lehman Brothers Holdings, Inc. A 8.500 08/01/15 750,000 798,120
Merrill Lynch & Company, Inc. AA- 7.190 08/07/12 750,000 738,612
SEMICONDUCTOR - 0.3%
Applied Materials, Inc. BBB+ 7.125 10/15/17 500,000 477,668
TELECOMMUNICATIONS SERVICE - 2.9%
AT&T Corporation AA- 6.000 03/15/09 750,000 698,289
GTE Corporation A 6.460 04/15/08 500,000 484,538
MCI WorldCom, Inc. A- 7.750 03/15/24 750,000 733,451
Michigan Bell Telephone AAA 7.500 02/15/23 500,000 493,020
New York Telephone Company A+ 7.375 12/15/11 250,000 251,902
Sprint Capital Corp. BBB+ 6.900 05/01/19 750,000 694,997
Vodafone AirTouch PLC A 7.500 07/15/06 750,000 777,272
TOBACCO - 0.3%
Philip Morris Companies, Inc. A 9.000 01/01/01 400,000 415,135
U.S. GOVERNMENT - 0.7%
U.S. Treasury - Bond 6.625 05/15/07 1,000,000 1,041,094
--------------
TOTAL FIXED-INCOME SECURITIES - 41.7%
(Cost $61,273,369) 60,042,424
TOTAL COMMON STOCK - 56.8%
(Cost $41,527,903) 81,775,075
--------------
TOTAL INVESTMENTS IN SECURITIES - 98.5%
(Cost $102,801,272) $ 141,817,499
==============
</TABLE>
* Security exempt from registration under Rule 144A of the
Securities Act of 1933
See Notes To Financial Statements
29
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Maturity Principal Market
Fixed Income Securities Rating Date Coupon Amount Value
- ----------------------------------------------- --------- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
ADVERTISING - 1.1%
Lamar Advertising Company B 12/01/06 9.625 $ 700,000 $ 733,827
News Corporation Ltd. BB+ 02/15/06 8.750 675,000 708,750
Outdoor Systems, Inc. B 06/15/07 8.875 1,000,000 1,061,867
AEROSPACE / DEFENSE - 1.4%
AAR Corporation BBB 10/15/03 7.250 500,000 490,141
Boeing Co. AA- 04/01/12 9.750 1,000,000 1,198,395
Lockheed Martin Corporation BBB+ 03/15/23 7.875 500,000 508,980
Lockheed Martin Corporation BBB+ 04/15/23 7.750 1,000,000 972,034
AIR TRANSPORT - 2.8%
AMR Corporation BBB- 03/15/00 9.750 100,000 102,186
AMR Corporation BBB- 08/01/12 9.000 1,000,000 1,091,429
Continental Airlines, Inc. BB- 12/15/05 8.000 1,230,000 1,192,044
Delta Air Lines, Inc. BBB- 02/01/11 10.375 500,000 597,158
Federal Express Corporation BBB+ 01/01/15 7.630 1,000,000 1,100,870
Northwest Airlines, Inc. BB 03/15/07 8.700 1,000,000 980,770
United Airlines, Inc. BB+ 08/15/21 9.750 500,000 567,113
United Airlines, Inc. BB+ 07/15/21 10.250 500,000 592,308
APPAREL - 0.4%
Phillips-Van Heusen Corporation BB 11/15/23 7.750 1,000,000 910,000
AUTO PARTS - 1.1%
Federal-Mogul Corporation BB+ 07/01/06 7.750 1,000,000 985,000
TI Group PLC B+ 07/15/05 9.875 500,000 511,960
Titan Wheel International, Inc. BB- 04/01/07 8.750 1,000,000 950,000
AUTO & TRUCK - 1.9%
Ford Motor Company A 11/15/22 8.875 2,000,000 2,141,830
General Motors Corporation A 06/15/24 8.100 1,000,000 1,106,710
Lear Corporation BB+ 05/15/09 8.110 1,000,000 942,230
BANK - 7.2%
ABN AMRO Bank NV AA- 12/01/26 7.300 500,000 477,134
Banc One Corporation A 07/15/25 7.750 1,000,000 1,022,633
Bank of America Corp. A 07/15/15 10.200 1,000,000 1,268,165
Bank of America Corp. A 03/01/09 7.125 1,000,000 1,002,584
BankBoston Corporation BBB+ 12/01/05 6.625 1,000,000 979,903
Bankers Trust Corporation A+ 11/15/15 7.500 1,500,000 1,506,464
Chase Manhattan Corp. A 10/15/08 6.125 1,000,000 939,665
</TABLE>
See Notes To Financial Statements
30
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Maturity Principal Market
Fixed Income Securities Rating Date Coupon Amount Value
- ----------------------------------------------- --------- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
BANK - 7.2% (Continued)
Citicorp A+ 10/15/11 7.250 $ 1,000,000 $ 1,001,443
Comerica Bank A- 12/01/13 7.125 1,000,000 1,019,170
Dresdner Bank - New York AA- 09/15/15 7.250 1,000,000 981,365
First Union Corporation A- 08/15/09 8.000 500,000 523,596
JPM Capital Trust II A+ 02/01/27 7.950 1,000,000 984,100
KeyCorp BBB+ 03/15/06 6.750 1,000,000 988,907
Republic New York Corporation A 05/15/21 9.125 1,000,000 1,163,792
Royal Bank of Scotland PLC A 02/01/11 6.375 1,000,000 927,500
Swiss Bank Corporation-NY AA 06/15/17 7.375 1,000,000 994,140
BEVERAGE - 0.7%
Anheuser-Busch Companies, Inc. A+ 07/01/17 7.125 1,500,000 1,463,823
BROADCASTING / CABLE TV - 6.8%
CBS Corporation BBB- 08/01/12 8.625 750,000 811,045
Century Communications Corp. BB- 03/01/05 9.500 1,000,000 1,044,750
Century Communications Corp. BB- 02/15/02 9.750 250,000 259,610
Chancellor Media Corporation B 06/15/07 8.750 1,250,000 1,222,641
Clear Channel Communications, Inc. BB+ 12/15/06 9.750 750,000 822,758
Comcast Corp. BBB- 05/15/05 9.375 500,000 529,550
Comcast Corp. BBB- 01/15/08 9.500 500,000 522,431
Continental Cablevision, Inc. BBB 08/01/13 9.500 500,000 557,191
CSC Holdings, Inc. BB+ 02/15/18 7.875 500,000 486,027
CSC Holdings, Inc. BB- 05/15/06 9.875 750,000 798,253
Fox Family Worldwide, Inc. B 11/01/07 9.250 1,250,000 1,212,500
Jones Intercable, Inc. BBB- 04/01/07 8.875 500,000 531,695
Jones Intercable, Inc. BB 03/01/08 10.500 700,000 756,679
Lenfest Communications, Inc. BB+ 11/01/05 8.375 1,000,000 1,050,649
Rogers Cablesystems Ltd. BB+ 03/15/05 10.000 500,000 547,380
Sinclair Broadcast Group, Inc. B 09/30/05 10.000 1,000,000 1,036,591
Time Warner, Inc. BBB 01/15/13 9.125 1,000,000 1,142,427
Turner Broadcasting System, Inc. BBB 07/01/13 8.375 750,000 794,726
Young Broadcasting, Inc. B 06/15/07 8.750 750,000 711,191
BUILDING MATERIALS - 0.9%
American Standard, Inc. BB- 02/01/08 7.375 1,000,000 964,317
Building Materials Corp. BB 10/15/07 8.000 1,000,000 951,766
CHEMICAL - 1.6%
Eastman Chemical Company BBB+ 01/15/24 7.250 1,000,000 1,000,000
Union Carbide Chemicals & Plastics Co. BBB 04/01/23 7.875 600,000 601,491
</TABLE>
See Notes To Financial Statements
31
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Maturity Principal Market
Fixed Income Securities Rating Date Coupon Amount Value
- ----------------------------------------------- --------- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
CHEMICAL - 1.6% (Continued)
Witco Corporation BBB+ 02/01/06 6.125 $ 500,000 $ 461,759
Witco Corporation BBB+ 04/01/23 7.750 1,500,000 1,345,594
COMPUTER & PERIPHERALS - 0.5%
Computer Associates International, Inc. A- 04/15/05 6.375 1,250,000 1,191,802
COMPUTER SOFTWARE & SERVICES - 0.5%
International Business Machines Corp. A+ 11/01/19 8.375 1,000,000 1,133,243
DIVERSIFIED - 1.4%
Mark IV Industries, Inc. BB- 09/01/07 7.500 1,000,000 923,371
Service Corp. International BBB 04/15/09 7.700 1,550,000 1,557,896
Tenneco, Inc. BBB 11/15/12 9.200 500,000 574,280
ELECTRIC & GAS UTILITIES - 8.8%
Alabama Power Company A+ 12/01/24 9.000 1,000,000 1,072,824
Calpine Corporation BB 04/01/08 7.875 1,000,000 964,495
Dayton Power & Light Company AA- 01/15/26 8.150 1,000,000 1,040,552
Duke Energy Corporation AA- 08/01/25 6.750 1,000,000 920,660
Hydro-Quebec A+ 01/15/22 8.400 850,000 953,927
Indianapolis Power & Light Co. AA- 02/01/24 7.050 1,000,000 956,743
Jersey Central Power & Light Co. A+ 11/01/25 6.750 1,000,000 887,647
New Orleans Public Service, Inc. BBB 03/01/23 8.000 600,000 605,146
Northern Illinois Gas Company AA 08/15/21 8.875 1,000,000 1,052,825
Oklahoma Gas & Electric Company AA- 10/15/25 7.300 1,500,000 1,467,034
PG&E Corporation AA- 03/01/26 7.250 1,000,000 969,679
Potomac Edison Company A+ 06/01/24 8.000 1,000,000 1,041,249
Potomac Electric Power Company A 06/01/21 9.000 1,000,000 1,069,329
Public Service Electric & Gas A- 09/01/24 7.000 1,000,000 948,605
Rocheseter Gas & Electric Corporation A- 04/01/21 9.375 1,000,000 1,074,590
Southern California Gas Company AA- 10/01/21 8.750 1,000,000 1,069,275
Virginia Electric Power A 10/01/24 8.625 1,000,000 1,077,413
West Penn Power Company A+ 08/01/24 8.125 1,000,000 1,049,701
Western Resources, Inc. A- 04/15/23 7.650 1,000,000 976,754
ELECTRONICS - 0.4%
Koninklijke Philips Electronics N.V. BBB+ 08/15/13 7.250 1,000,000 974,019
ENVIRONMENTAL - 1.2%
American Eco Corporation B 05/15/08 9.625 1,000,000 600,000
Laidlaw, Inc. BBB 05/15/23 8.250 1,000,000 973,016
Laidlaw, Inc. BBB 04/15/07 11.500 1,000,000 1,127,954
</TABLE>
See Notes To Financial Statements
32
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Maturity Principal Market
Fixed Income Securities Rating Date Coupon Amount Value
- ----------------------------------------------- --------- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
FINANCIAL SERVICES - 3.8%
Auburn Hills Trust A+ 05/01/20 12.000 $ 400,000 $ 606,601
BHP Finance USA Ltd. A- 03/01/16 7.250 1,000,000 985,929
CRA Finance Ltd. AA- 12/01/13 7.125 500,000 487,283
Dow Capital BV A 05/15/22 8.700 1,000,000 1,044,962
Fairfax Financial Holdings BBB+ 10/01/15 8.250 1,500,000 1,620,000
Fletcher Challenge Capital Canada, Inc. BBB 06/20/16 8.250 1,000,000 1,020,000
Household Finance Corporation A 08/01/10 6.375 1,000,000 942,672
Morgan Stanley Dean Witter A+ 10/15/13 6.750 1,250,000 1,177,989
Sears Roebuck Acceptance Corp. A- 10/15/17 6.875 500,000 471,748
FOOD PROCESSING - 1.2%
Chiquita Brands Int'l, Inc. B+ 01/15/04 9.625 1,000,000 1,020,215
ConAgra, Inc. BBB 03/01/21 9.750 500,000 610,081
Nabisco, Inc. BBB 06/15/15 7.550 1,000,000 997,533
FOREIGN GOVERNMENT - 2.1%
Province of Newfoundland BBB+ 10/22/22 8.650 1,000,000 1,179,970
Province of Nova Scotia A- 07/27/13 7.250 1,000,000 1,001,358
Province of Quebec A+ 12/01/26 8.625 1,115,000 1,288,319
Province of Saskatchewan A 02/01/13 8.000 1,000,000 1,093,907
FOREIGN TELECOMMUNICATIONS - 0.4%
Cable & Wireless Communications PLC A- 03/06/08 6.750 1,000,000 959,416
GROCERY - 0.9%
Great Atlantic & Pacific Tea Co. BBB- 04/15/07 7.750 1,000,000 941,274
Kroger Company BBB- 03/01/08 7.450 1,000,000 1,008,359
HOMEBUILDING - 4.3%
Beazer Homes USA, Inc. B+ 04/01/08 8.875 1,000,000 969,751
D.R. Horton, Inc. BB 04/15/06 10.000 1,000,000 1,020,000
Engle Homes, Inc. B 02/01/08 9.250 1,000,000 985,000
Hovnanian Enterprises, Inc. B 06/01/05 9.750 1,000,000 969,533
Kaufman & Broad Home Corp. BB- 05/01/03 9.375 1,000,000 1,008,554
MDC Holdings, Inc. BB- 02/01/08 8.375 1,500,000 1,466,371
Ryland Group, Inc. B+ 06/01/04 9.625 1,000,000 1,012,774
Standard Pacific Corp. BB 06/15/07 8.500 1,000,000 974,753
U.S. Home Corporation BB- 08/15/07 8.880 1,000,000 981,146
HOTEL / GAMING - 4.8%
Boyd Gaming Corporation BB- 10/01/03 9.250 1,000,000 1,021,250
Harrah's Operating Co., Inc. BB+ 12/15/05 7.875 1,500,000 1,473,997
</TABLE>
See Notes To Financial Statements
33
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Maturity Principal Market
Fixed Income Securities Rating Date Coupon Amount Value
- ----------------------------------------------- --------- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
HOTEL / GAMING - 4.8% (Continued)
Hilton Hotels Corporation BBB 12/15/09 7.200 $ 1,500,000 $ 1,454,741
HMH Properties, Inc. BB 12/01/08 8.450 1,000,000 963,750
Host Marriott Travel Plaza BB- 05/15/05 9.500 1,000,000 1,015,171
Mandalay Resort Group BB+ 07/15/13 7.625 450,000 396,793
Mirage Resorts, Inc. BBB 02/01/08 6.750 1,500,000 1,407,517
Prime Hospitality Corp. BB 01/15/06 9.250 1,000,000 1,025,000
Rank Group Finance PLC BBB+ 01/15/18 7.125 1,000,000 997,900
Starwood Hotels & Resorts BB 11/15/15 7.375 1,000,000 857,699
INDUSTRIAL SERVICES - 0.5%
Coinmach Corporation B+ 11/15/05 11.750 1,000,000 1,078,732
INSURANCE - 4.4%
Aetna Services, Inc. A 01/15/17 8.000 824,000 828,540
American Financial Group, Inc. BBB+ 12/15/07 7.125 1,000,000 959,009
CIGNA Corporation A 03/01/23 7.650 500,000 500,361
CNA Financial Corporation A- 01/15/18 6.950 500,000 463,296
CNA Financial Corporation A- 11/15/23 7.250 1,000,000 945,583
Continental Corporation BBB- 08/15/12 8.375 600,000 626,088
Leucadia National Corporation A- 08/15/13 7.750 910,000 919,100
Loews Corporation AA- 10/15/23 7.000 1,000,000 903,748
MBIA, Inc. AA 10/01/22 8.200 2,000,000 2,018,134
Metropolitan Life Insurance Co.* A+ 11/01/23 7.450 550,000 522,222
New York Life Insurance Company AA- 12/15/23 7.500 1,000,000 1,070,000
MACHINERY - 0.2%
Clark Equipment Company A- 05/01/23 8.000 500,000 512,609
MEDICAL SERVICES - 0.7%
HEALTHSOUTH Corporation BBB- 04/01/01 9.500 500,000 512,459
Tenet Healthcare Corporation BB- 01/15/07 8.625 1,000,000 1,002,082
MEDICAL SUPPLIES - 0.3%
Cardinal Health, Inc. A 02/15/04 6.500 700,000 691,553
METALS & MINING - 1.2%
Alcan Aluminum Ltd. A- 01/15/22 8.875 1,000,000 1,048,772
Inco Ltd. BB+ 06/15/22 9.600 500,000 510,000
Placer Dome, Inc. BBB 06/15/15 7.750 1,000,000 1,010,000
</TABLE>
See Notes To Financial Statements
34
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Maturity Principal Market
Fixed Income Securities Rating Date Coupon Amount Value
- ----------------------------------------------- --------- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
MORTGAGED BACK SECURITIES - 2.6%
Ginnie Mae AAA 12/20/28 6.500 $ 1,955,099 $ 1,875,062
Ginnie Mae AAA 01/20/29 6.500 2,957,761 2,836,678
Ginnie Mae AAA 11/20/28 6.500 968,660 929,005
NATURAL GAS - 2.6%
AmeriGas Partners, L.P. BB+ 04/15/07 10.125 1,200,000 1,261,192
ANR Pipeline Company BBB+ 11/01/21 9.625 1,000,000 1,218,179
Columbia Energy Group BBB+ 11/28/10 7.320 1,000,000 1,010,000
Ferrellgas Partners, L.P. B+ 06/15/06 9.375 500,000 501,800
Louis Dreyfus Natural Gas Corp. BB+ 06/15/04 9.250 1,000,000 1,052,994
TransCanada Pipelines Ltd. A- 04/01/23 7.875 600,000 608,883
NEWSPAPER - 0.5%
Hollinger International, Inc. BB- 02/01/06 9.250 500,000 507,468
Hollinger International, Inc. BB- 03/15/07 9.250 500,000 506,139
OILFIELD SERVICES - 1.8%
Husky Oil Ltd. BBB 11/15/16 7.550 1,000,000 980,000
Offshore Logistics, Inc. BB 01/15/08 7.875 1,200,000 1,128,000
Pride International, Inc. BB 05/01/07 9.375 1,000,000 995,780
Veritas DGC, Inc. BB+ 10/15/03 9.750 750,000 769,110
PACKAGING & CONTAINERS - 1.2%
Crown Cork & Seal Company, Inc. BBB 04/15/23 8.000 1,500,000 1,483,719
Owens-Illinois, Inc. BB+ 05/15/07 8.100 750,000 746,250
Owens-Illinois, Inc. BB+ 05/15/18 7.800 500,000 469,404
PAPER & FOREST PRODUCTS - 1.5%
Bowater, Inc. BBB 10/15/12 9.500 700,000 808,668
Champion International Corporation BBB 09/01/23 7.625 1,500,000 1,436,650
Georgia-Pacific Corporation BBB- 07/01/22 9.125 1,000,000 1,045,009
PETROLEUM - 3.1%
Clark USA, Inc. B+ 12/01/05 10.875 500,000 425,000
Kerr-McGee Corporation BBB 11/01/11 7.000 1,500,000 1,408,428
Louisiana Land & Exploration Co. A- 04/15/13 7.625 1,000,000 1,017,955
Ocean Energy, Inc. BB+ 07/01/05 7.625 500,000 488,090
Ocean Energy, Inc. BB- 08/01/05 8.625 1,000,000 990,273
OXY USA, Inc. BBB 04/15/11 7.000 1,000,000 930,649
Phillips Petroleum Company A- 01/01/23 8.490 1,000,000 1,045,038
Ultramar Diamond Shamrock Corp. BBB 04/01/23 8.000 600,000 599,890
</TABLE>
See Notes To Financial Statements
35
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Maturity Principal Market
Fixed Income Securities Rating Date Coupon Amount Value
- ----------------------------------------------- --------- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
PUBLISHING - 1.3%
Big Flower Press B+ 07/01/07 8.875 $ 1,000,000 $ 974,352
News America Holdings BBB- 08/10/18 8.250 1,000,000 1,036,768
Primedia, Inc. BB- 06/01/04 10.250 750,000 780,000
RAILROAD - 0.9%
Kansas City Southern Industries, Inc. BBB- 07/01/22 8.800 500,000 513,932
Union Pacific Corporation BBB- 05/01/25 8.350 1,500,000 1,533,728
RECREATION - 1.4%
Brunswick Corporation BBB+ 09/01/23 7.375 975,000 984,750
Speedway Motorsports, Inc. B+ 08/15/07 8.500 1,000,000 1,030,000
The Sports Club Company, Inc. B 03/15/06 11.375 1,000,000 995,000
RENTAL AUTO / EQUIPMENT - 0.4%
Hertz Corporation A- 05/15/08 6.625 1,000,000 964,325
RESTAURANT - 0.7%
Darden Restaurants, Inc. BBB 02/01/16 7.125 1,500,000 1,433,914
RETAIL STORE - 5.4%
Dayton Hudson Corporation A- 12/01/22 8.500 1,500,000 1,590,978
Dillard's, Inc. BBB 10/01/12 7.850 1,500,000 1,499,361
Finlay Fine Jewelry Corporation B+ 05/01/08 8.375 1,000,000 940,000
J.C. Penney Company BBB+ 04/01/17 7.950 1,000,000 1,012,213
May Department Stores A 07/15/26 8.300 1,000,000 1,042,085
Michaels Stores, Inc. BB- 06/15/06 10.875 1,000,000 1,098,910
Pep Boys-Manny, Moe & Jack BBB- 06/01/05 7.000 1,000,000 938,387
Rite Aid Corporation BBB 08/15/13 6.875 1,000,000 904,798
Sears, Roebuck & Company A- 11/01/11 9.375 1,000,000 1,166,183
The Limited, Inc. BBB+ 03/15/23 7.500 1,000,000 913,705
Venator Group, Inc. BB 06/01/00 7.000 1,000,000 995,275
SECURITIES BROKERAGE - 2.4%
Bear Stearns Companies, Inc. A 01/15/04 6.625 1,000,000 992,658
Goldman Sachs Group LP A+ 03/01/13 8.000 1,000,000 1,036,477
Lehman Brothers, Inc. A 05/15/05 11.625 1,023,000 1,236,137
Morgan Stanley Dean Witter A+ 10/01/13 7.000 1,000,000 964,791
Paine Webber Group, Inc. BBB+ 02/15/14 7.625 1,000,000 990,080
SEMICONDUCTOR - 0.9%
Advanced Micro Devices, Inc. B 08/01/03 11.000 1,000,000 1,010,540
Applied Materials, Inc. BBB+ 10/15/17 7.125 1,000,000 955,335
</TABLE>
See Notes To Fianancial Statements
36
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
S & P
Credit Maturity Principal Market
Fixed Income Securities Rating Date Coupon Amount Value
- ----------------------------------------------- --------- --------- --------- ------------ -------------
<S> <C> <C> <C> <C> <C>
SHOE - 0.5%
Brown Shoe Company, Inc. BB 10/15/06 9.500 $ 1,000,000 $ 1,042,250
STEEL - 0.9%
AK Steel Corporation BB- 12/15/06 9.125 1,000,000 1,032,615
USX Corporation BBB- 02/15/12 9.375 750,000 853,854
TELECOMMUNICATIONS SERVICE - 4.6%
AT&T Corporation AA- 07/15/24 8.125 800,000 847,719
AT&T Corporation AA- 01/15/22 8.125 750,000 791,231
GCI, Inc. B+ 08/01/07 9.750 1,000,000 1,015,654
GTE Corporation A 11/01/21 8.750 1,000,000 1,155,474
Illinois Bell Telephone Company AAA 03/15/24 7.250 1,425,000 1,370,611
MasTec, Inc. BB- 02/01/08 7.750 1,500,000 1,455,000
MCI WorldCom, Inc. A- 03/15/24 7.750 1,000,000 977,934
New Jersey Bell Telephone AA 06/01/12 7.375 1,000,000 1,001,250
New York Telephone Company A+ 12/15/11 7.375 500,000 503,803
SBC Communications Capital Corp. AA 07/15/25 7.250 1,000,000 959,150
TEXTILE - 0.5%
WestPoint Stevens, Inc. BB 06/15/05 7.875 1,000,000 1,013,100
TOBACCO - 0.3%
Philip Morris Companies, Inc. A 01/15/17 8.375 547,000 556,302
TOILETRIES/COSMETICS - 0.5%
Platex Family Products Corp. B 12/15/03 9.000 1,000,000 1,017,637
U.S. GOVERNMENT - 0.5%
U.S. Treasury - Bond 08/15/26 6.750 1,000,000 1,066,094
---------------
TOTAL FIXED INCOME SECURITIES - 98.0%
(Cost $215,740,017) $ 214,958,313
===============
</TABLE>
* Security exempt from registration under Rule 144A of the
Securities Act of 1933
See Notes To Financial Statements
37
<PAGE>
ADVANCE CAPITAL I, INC. - CORNERSTONE STOCK FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
AUTO & TRUCK - 0.8%
Ford Motor Company 4,000 $ 229,000
BANK - 4.2%
Banc One Corporation 3,900 232,294
Bank of America Corporation 7,400 542,513
First Union Corporation 3,200 150,400
Wells Fargo Company 5,200 222,300
BEVERAGE - 2.4%
Coca-Cola Company 10,500 656,250
BIOTECHNOLOGY - 0.6%
Amgen, Inc.* 2,600 158,275
BROADCASTING / CABLE TV - 2.4%
Comcast Corporation 3,600 138,375
The Walt Disney Company 7,000 215,688
Time Warner, Inc. 3,900 286,650
CHEMICAL - 0.9%
duPont, E.I. de Nemours & Co. 3,600 245,700
COMPUTER & PERIPHERALS - 13.2%
Cisco Systems, Inc.* 18,600 1,199,700
Compaq Computer Corporation 5,700 134,306
Dell Computer Corporation* 17,100 632,700
Hewlett-Packard Company 3,400 340,850
International Business Machines Corp. 7,800 1,010,100
Sun Microsystems, Inc.* 3,800 261,725
COMPUTER SOFTWARE & SERVICES - 13.7%
America Online, Inc.* 4,600 507,438
At Home Corporation* 1,600 86,300
Compuware Corporation* 1,900 60,444
Microsoft Corporation* 33,700 3,039,319
DRUG - 11.6%
Abbott Laboratories 4,900 222,950
American Home Products Corp. 4,400 253,000
Bristol-Myers Squibb Company 8,500 597,125
Eli Lilly & Company 3,700 265,012
Merck & Company, Inc. 10,200 750,975
Pfizer, Inc. 5,500 603,625
Schering-Plough Corporation 4,800 254,400
Warner-Lambert Company 2,700 187,312
ELECTRICAL EQUIPMENT - 5.2%
General Electric Company 12,400 1,395,000
FINANCIAL SERVICES - 3.4%
Citigroup Inc. 14,550 691,125
Fannie Mae 3,300 225,637
FOREIGN TELECOMMUNICATIONS - 1.1%
Ericsson (LM) Telephone-ADR-Class B 8,800 289,850
INSURANCE - 2.3%
American International Group, Inc. 5,300 621,425
MEDICAL SUPPLIES - 2.1%
Johnson & Johnson 5,700 558,600
PETROLEUM - 6.2%
BP Amoco PLC-ADR 794 86,149
Exxon Corporation 10,400 802,100
Mobil Corporation 2,500 247,500
Royal Dutch Petroleum Company 9,100 548,275
RESTAURANT - 0.7%
McDonald's Corporation 4,300 176,837
</TABLE>
See Notes To Financial Statements
38
<PAGE>
ADVANCE CAPITAL I, INC. - CORNERSTONE STOCK FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Common Stock Shares Value
- ----------------------------------------------- --------- ------------
<S> <C> <C>
RETAIL STORE - 5.1%
Costco Companies, Inc.* 1,100 $ 88,069
Home Depot, Inc. 4,800 308,700
Staples Inc.* 2,300 71,156
Wal-Mart Stores, Inc. 19,000 916,750
SEMICONDUCTOR - 4.3%
Intel Corporation 19,500 1,160,250
TELECOMMUNICATIONS EQUIPMENT - 3.8%
Lucent Technologies Inc. 11,300 762,044
QUALCOMM Incorporated* 900 129,150
Tellabs, Inc.* 2,000 135,125
TELECOMMUNICATIONS SERVICE - 13.2%
Ameritech Corporation 3,700 271,950
AT&T Corporation 14,412 801,668
Bell Atlantic Corporation 5,100 331,500
BellSouth Corporation 6,400 300,000
GTE Corporation 3,100 234,825
MCI WorldCom, Inc.* 12,500 1,078,125
Qwest Communications International, Inc.* 5,000 165,312
SBC Communications, Inc. 6,500 377,000
TOILETRIES / COSMETICS - 2.4%
Gillette Company 3,700 151,700
Proctor & Gamble Company 5,700 508,725
-------------
TOTAL COMMON STOCK - 99.6%
(Cost $24,852,638) $ 26,919,273
=============
</TABLE>
* Securities are non-income producing
ADR - American Depositary Receipt
See Notes To Financial Statements
39
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY RETIREMENT CORNERSTONE
GROWTH BOND BALANCED INCOME STOCK
------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities. . . . . . . . . $79,471,357 $ 8,039,692 $141,817,499 $214,958,313 $26,919,273
Cash . . . . . . . . . . . . . . . . . . . 382,323 271,454 993,311 103,788 467,342
Receivables
Dividends and interest. . . . . . . . . . 24,753 160,057 1,305,111 4,403,389 14,839
Securities sold . . . . . . . . . . . . . 0 0 0 0 0
Prepaid expenses . . . . . . . . . . . . . 1,874 662 3,552 6,060 238
------------ ------------ ------------- ------------- ------------
Total assets . . . . . . . . . . . . . . . 79,880,307 8,471,865 144,119,473 219,471,550 27,401,692
LIABILITIES
Payable to affiliated entities
Investment advisor fees . . . . . . . . . 44,396 2,438 81,499 90,887 8,183
Distribution fees . . . . . . . . . . . . 558 0 999 1,510 187
Accounts payable and accrued expenses. . . 22,698 2,130 23,610 35,589 7,237
Securities purchased . . . . . . . . . . . 0 0 39,125 0 349,205
Distributions payable. . . . . . . . . . . 0 3,268 1,742 15,705 0
------------ ------------ ------------- ------------- ------------
Total liabilities. . . . . . . . . . . . . 67,652 7,836 146,975 143,691 364,812
------------ ------------ ------------- ------------- ------------
Net assets . . . . . . . . . . . . . . . . $79,812,655 $ 8,464,029 $143,972,498 $219,327,859 $27,036,880
============ ============ ============= ============= ============
NET ASSETS
Paid-in capital. . . . . . . . . . . . . . $41,115,224 $ 8,485,645 $100,903,725 $220,451,428 $24,962,694
Accumulated undistributed net investment
income (loss) . . . . . . . . . . . . . . (221,658) 0 0 0 7,539
Accumulated undistributed net realized
gain (loss) on investments. . . . . . . . 4,433,905 41,274 4,052,546 (341,865) 12
Net unrealized appreciation (depreciation)
in value of investments . . . . . . . . . 34,485,184 (62,890) 39,016,227 (781,704) 2,066,635
------------ ------------ ------------- ------------- ------------
Net assets . . . . . . . . . . . . . . . . $79,812,655 $ 8,464,029 $143,972,498 $219,327,859 $27,036,880
============ ============ ============= ============= ============
SHARES OUTSTANDING . . . . . . . . . . . . . 3,485,235 845,632 8,125,488 21,879,512 2,287,224
============ ============ ============= ============= ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE . . . . . . . . $ 22.90 $ 10.01 $ 17.72 $ 10.02 $ 11.82
============ ============ ============= ============= ============
</TABLE>
See Notes To Financial Statements
40
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1999
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY RETIREMENT CORNERSTONE
GROWTH BOND BALANCED INCOME STOCK
----------- ----------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest. . . . . . . . . . . . . $ 10,785 $ 162,423 $ 1,933,621 $ 8,531,130 $ 5,367
Dividends . . . . . . . . . . . . 142,314 0 605,456 0 72,849
----------- ----------- ------------ ------------ -----------
Total investment income . . . . . 153,099 162,423 2,539,077 8,531,130 78,216
EXPENSES
Paid to affiliates:
Investment advisory fees. . . . . . . . . 248,331 9,476 463,803 553,721 33,727
Distribution fees . . . . . . . . . . . . 88,690 0 165,644 276,861 21,079
Paid to others:
Custodial fees. . . . . . . . . . . . . . 17,636 1,618 15,040 6,090 5,855
Directors fees and expenses . . . . . . . 1,764 113 3,293 5,536 398
Professional fees . . . . . . . . . . . . 7,266 465 13,582 22,854 1,002
Shareholder reporting costs . . . . . . . 7,738 495 14,450 24,291 1,748
Registration and filing fees. . . . . . . 1,301 2,131 3,774 3,109 6,825
Other operating expenses. . . . . . . . . 2,031 206 5,888 11,457 43
----------- ----------- ------------ ------------ -----------
Total expenses. . . . . . . . . . . . . . . 374,757 14,504 685,474 903,919 70,677
----------- ----------- ------------ ------------ -----------
NET INVESTMENT INCOME (LOSS) . . . . . . . . . (221,658) 147,919 1,853,603 7,627,211 7,539
REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from securities sold . . . . . . . 10,649,867 1,492,199 12,928,753 24,843,542 86
Cost of securities sold . . . . . . . . . . (5,916,388) (1,450,925) (8,876,207) (25,185,407) (74)
----------- ----------- ------------ ------------ -----------
Net realized gain (loss) on investments . . 4,733,479 41,274 4,052,546 (341,865) 12
UNREALIZED GAIN (LOSS) ON INVESTMENTS
Appreciation, Beginning of year . . . . . . 29,216,865 248,941 38,527,225 10,432,620 233,275
Appreciation, End of period . . . . . . . . 34,485,184 (62,890) 39,016,227 (781,704) 2,066,635
----------- ----------- ------------ ------------ -----------
Net unrealized gain (loss) on investments . 5,268,319 (311,831) 489,002 (11,214,324) 1,833,360
----------- ----------- ------------ ------------ -----------
NET GAIN (LOSS) ON INVESTMENTS . . . . . . . . 10,001,798 (270,557) 4,541,548 (11,556,189) 1,833,372
----------- ----------- ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . $ 9,780,140 $ (122,638) $ 6,395,151 $ (3,928,978) $ 1,840,911
=========== =========== ============ ============ ===========
</TABLE>
See Notes To Financial Statements
41
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY GROWTH BOND
------------------------------ -----------------------------
(Unaudited) (Unaudited)
Six months Year Six months Year
ended ended ended ended
June 30, Dec. 31, June 30, Dec. 31,
1999 1998 1999 1998
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss). . . . . . . . . . . . . . . . $ (221,658) $ (344,938) $ 147,919 $ 252,618
Net realized gain (loss) on investments . . . . . . . . . . 4,733,479 (299,574) 41,274 18,492
Net unrealized gain (loss) on investments . . . . . . . . . 5,268,319 10,064,361 (311,831) 33,482
-------------- -------------- -------------- ------------
Net increase (decrease) in net assets resulting from operations 9,780,140 9,419,849 (122,638) 304,592
Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . . . . . . . 0 0 (147,919) (252,618)
Net realized gain on investments. . . . . . . . . . . . . . 0 0 0 (18,492)
-------------- -------------- -------------- -------------
Total distributions to shareholders . . . . . . . . . . . . 0 0 (147,919) (271,110)
Share Transactions:
Net proceeds from sale of shares. . . . . . . . . . . . . . 6,410,587 10,851,525 5,381,781 184,096
Reinvestment of distributions . . . . . . . . . . . . . . . 0 0 126,925 225,055
Cost of shares reacquired . . . . . . . . . . . . . . . . . (4,438,828) (6,542,846) (520,302) (899,446)
-------------- -------------- -------------- -------------
Net increase (decrease) derived from share transactions . . 1,971,759 4,308,679 4,988,404 (490,295)
-------------- -------------- -------------- -------------
Net increase (decrease) in net assets . . . . . . . . . . . 11,751,899 13,728,528 4,717,847 (456,813)
NET ASSETS
Beginning of year . . . . . . . . . . . . . . . . . . . . . 68,060,756 54,332,228 3,746,182 4,202,995
-------------- -------------- -------------- -------------
End of period . . . . . . . . . . . . . . . . . . . . . . . $ 79,812,655 $ 68,060,756 $ 8,464,029 $ 3,746,182
============== ============== ============== =============
NUMBER OF SHARES
Sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . 305,933 605,020 531,024 17,285
Shares issued from reinvestment of distributions. . . . . . 0 0 12,391 21,229
Reacquired. . . . . . . . . . . . . . . . . . . . . . . . . (215,454) (360,707) (50,527) (85,145)
-------------- -------------- -------------- -------------
Net increase (decrease) in shares outstanding . . . . . . . 90,479 244,313 492,888 (46,631)
Outstanding:
Beginning of year . . . . . . . . . . . . . . . . . . . . 3,394,756 3,150,443 352,744 399,375
-------------- -------------- -------------- -------------
End of period . . . . . . . . . . . . . . . . . . . . . . 3,485,235 3,394,756 845,632 352,744
============== ============== ============== =============
</TABLE>
See Notes To Financial Statements
42
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS - Continued
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT
BALANCED INCOME
------------------------------ -----------------------------
(Unaudited) (Unaudited)
Six months Year Six months Year
ended ended ended ended
June 30, Dec. 31, June 30, Dec. 31,
1999 1998 1999 1998
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss). . . . . . . . . . . . . . . . $ 1,853,603 $ 3,296,711 $ 7,627,211 $ 14,506,674
Net realized gain (loss) on investments . . . . . . . . . . 4,052,546 840,615 (341,865) 325,461
Net unrealized gain (loss) on investments . . . . . . . . . 489,002 9,951,142 (11,214,324) (1,938,841)
-------------- -------------- -------------- -------------
Net increase (decrease) in net assets resulting from operations 6,395,151 14,088,468 (3,928,978) 12,893,294
Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . . . . . . . (1,853,603) (3,296,711) (7,627,211) (14,506,674)
Net realized gain on investments. . . . . . . . . . . . . . 0 (840,615) 0 (284,242)
-------------- -------------- -------------- -------------
Total distributions to shareholders . . . . . . . . . . . . (1,853,603) (4,137,326) (7,627,211) (14,790,916)
Share Transactions:
Net proceeds from sale of shares. . . . . . . . . . . . . . 19,882,449 25,495,015 14,600,818 29,094,377
Reinvestment of distributions . . . . . . . . . . . . . . . 1,841,601 4,102,654 7,525,307 14,595,861
Cost of shares reacquired . . . . . . . . . . . . . . . . . (8,175,772) (13,087,598) (12,462,973) (21,082,826)
-------------- -------------- -------------- -------------
Net increase derived from share transactions. . . . . . . . 13,548,278 16,510,071 9,663,152 22,607,412
-------------- -------------- -------------- -------------
Net increase (decrease) in net assets . . . . . . . . . . . 18,089,826 26,461,213 (1,893,037) 20,709,790
NET ASSETS
Beginning of year . . . . . . . . . . . . . . . . . . . . . 125,882,672 99,421,459 221,220,896 200,511,106
-------------- -------------- -------------- -------------
End of period . . . . . . . . . . . . . . . . . . . . . . . $ 143,972,498 $ 125,882,672 $ 219,327,859 $221,220,896
============== ============== ============== =============
NUMBER OF SHARES
Sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,146,327 1,559,384 1,408,814 2,736,189
Shares issued from reinvestment of distributions. . . . . . 106,342 248,724 731,030 1,372,921
Reacquired. . . . . . . . . . . . . . . . . . . . . . . . . (474,098) (797,921) (1,208,523) (1,985,302)
-------------- -------------- -------------- -------------
Net increase in shares outstanding. . . . . . . . . . . . . 778,571 1,010,187 931,321 2,123,808
Outstanding:
Beginning of year . . . . . . . . . . . . . . . . . . . . 7,346,917 6,336,730 20,948,191 18,824,383
-------------- -------------- -------------- -------------
End of period . . . . . . . . . . . . . . . . . . . . . . 8,125,488 7,346,917 21,879,512 20,948,191
============== ============== ============== =============
</TABLE>
See Notes To Financial Statements
43
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS - Continued
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
CORNERSTONE
STOCK
-------------------------------
(Unaudited) Partial
Six months Year
ended ended*
June 30, Dec. 31,
1999 1998
-------------- --------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income . . . . . . . . . . . . . . . . . . . $ 7,539 $ 2,901
Net realized gain on investments. . . . . . . . . . . . . . 12 0
Net unrealized gain on investments. . . . . . . . . . . . . 1,833,360 233,274
-------------- --------------
Net increase in net assets resulting from operations. . . . 1,840,911 236,175
Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . . . . . . . 0 (2,901)
Net realized gain on investments. . . . . . . . . . . . . . 0 0
-------------- --------------
Total distributions to shareholders . . . . . . . . . . . . 0 (2,901)
Share Transactions:
Net proceeds from sale of shares. . . . . . . . . . . . . . 18,090,987 7,080,114
Reinvestment of distributions . . . . . . . . . . . . . . . 0 2,901
Cost of shares reacquired . . . . . . . . . . . . . . . . . (211,307) 0
-------------- --------------
Net increase derived from shares. . . . . . . . . . . . . . 17,879,680 7,083,015
-------------- --------------
Net increase in net assets. . . . . . . . . . . . . . . . . 19,720,591 7,316,289
NET ASSETS
Beginning of period . . . . . . . . . . . . . . . . . . . . 7,316,289 0
-------------- --------------
End of period . . . . . . . . . . . . . . . . . . . . . . . $ 27,036,880 $ 7,316,289
============== ==============
NUMBER OF SHARES
Sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,606,545 699,003
Shares issued from reinvestment of distributions. . . . . . 0 277
Reacquired. . . . . . . . . . . . . . . . . . . . . . . . . (18,601) 0
-------------- --------------
Net increase in shares outstanding. . . . . . . . . . . . . 1,587,944 699,280
Outstanding:
Beginning of period . . . . . . . . . . . . . . . . . . . 699,280 0
-------------- --------------
End of period . . . . . . . . . . . . . . . . . . . . . . 2,287,224 699,280
============== ==============
</TABLE>
* From December 17, 1998 (commencement of operations) to December 31, 1998.
See Notes To Financial Statements
44
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 following classes: Equity Growth Fund,
Bond Fund, Balanced Fund, Retirement Income Fund and Cornerstone Stock Fund.
On December 17, 1998, the Cornerstone Stock Fund commenced operations as a
new class of shares of the COMPANY.
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 exchange quotations are readily available are
valued at the last sale price (generally 4:00 PM Eastern time). If there
is no sale price, they are valued at the last 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 are 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 generally apportioned
between the Funds on the basis of average net assets.
45
<PAGE>
Note 2. ACCOUNTING POLICIES (Continued)
Federal Income Taxes
It is each fund's policy to meet the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and each
fund intends to distribute all of its taxable income to its shareholders.
Therefore, no federal income tax provision is provided.
Dividends
Income dividends in the Bond, Balanced and Retirement Income Funds
are declared daily, except on Saturdays, Sundays and holidays and are paid
monthly on the last business day of the month. Income dividends in the
Equity Growth and Cornerstone Stock Funds, if any, are declared annually
and paid on the last business day of the year. Capital gain dividends,
if any, are declared annually and paid in December.
Other
Security transactions are accounted for on the trade date, the date
the order to buy or sell is executed. Interest income is recorded on the
accrual basis. Dividend income is recorded on the ex-dividend date.
Premium and discount on fixed income securities are amortized using the
effective interest method. Realized gains and losses on security transactions
are determined on the first-in, first-out method for book and tax purposes.
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. T. Rowe Price Associates, Inc. (TRPA) serves as sub-adviser for
that portion of the portfolio of assets of the Equity Growth Fund and
Balanced Fund which are determined by MANAGEMENT to be invested in common
stocks. 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
Administrator, 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
46
<PAGE>
Note 3. TRANSACTIONS WITH AFFILIATES (Continued)
the Bond and Cornerstone Stock Funds. For its services, TRPA is paid a fee
by MANAGEMENT equal on an annual basis to .20% of the average daily net assets
of the Equity Growth Fund and that portion of the Balanced Fund invested in
common stocks for the first $100 million of assets managed and .15% of the
average daily net assets exceeding $100 million. 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, Retirement Income and Cornerstone Stock Funds, at a rate not to
exceed .25% of each fund's average daily net assets.
The COMPANY was charged investment advisory fees of $1,309,058 by
MANAGEMENT for the six months ended June 30, 1999. The COMPANY was charged
distribution fees of $552,273 by SERVICES for the six months ended
June 30, 1999. At June 30, 1999 an employee retirement plan sponsored by
SERVICES owned 65,858 shares (1.9%) of the Equity Growth Fund, 9,737 shares
(0.1%) of the Balanced Fund and 37 shares (0.0%) of the Cornerstone Stock
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 $2,500 annual retainer plus $250 per
meeting attended.
Note 4. INVESTMENT PORTFOLIO TRANSACTIONS
The cost of purchases and proceeds from sales of investments, other
than short-term obligations, for the six months ended June 30, 1999 were as
follows:
Equity Retirement Cornerstone
Growth Bond Balanced Income Stock
----------- ---------- ----------- ----------- -----------
Purchases $12,804,819 $6,131,486 $25,519,282 $37,083,762 $17,795,906
Sales 10,649,867 1,492,199 12,928,753 24,843,542 86
The cost of purchases and proceeds from sales of U.S. Government
securities included above were as follows:
Equity Retirement Cornerstone
Growth Bond Balanced Income Stock
------ -------- ---------- ---------- -----------
Purchases None $492,898 $1,119,375 None None
Sales None 285,684 543,672 None None
47
<PAGE>
Note 4. INVESTMENT PORTFOLIO TRANSACTIONS (Continued)
Gross unrealized appreciation and depreciation of investments for book
and tax purposes as of June 30, 1999 were as follows:
Equity Retirement Cornerstone
Growth Bond Balanced Income Stock
----------- ------- ----------- ---------- ----------
Appreciation $35,956,644 $90,878 $41,478,154 $4,945,144 $2,568,570
Depreciation 1,471,460 153,768 2,461,927 5,726,848 501,935
Note 5. CASH
As of June 30, 1999, substantially all cash was invested in the
Monitor Money Market Fund, bearing interest at a variable rate
(approximately 4.4%).
Note 6. CAPITAL LOSS CARRYOVERS
At December 31, 1998, capital loss carryovers and their expiration
dates were as follows:
Equity
Growth
--------
December 31, 2006 $299,574
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.
48
<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
T.Rowe Price Associates, Inc. BOND FUND
100 East Pratt Street BALANCED FUND
Baltimore, Maryland 21202 RETIREMENT INCOME FUND
CORNERSTONE STOCK 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 National Bank
220 Park Street, Suite 100
Birmingham, Michigan 48009
OFFICERS:
John C. Shoemaker, President
Robert J. Cappelli, Vice President & Treasurer
Charles J. Cobb, Vice President
Kathy J. Harkleroad, Secretary
BOARD OF DIRECTORS:
Joseph A. Ahern
Richard W. Holtcamp SEMI-ANNUAL REPORT
Harry Kalajian June 30, 1999
John C. Shoemaker
Frank R. Zimmerman
