ANNUAL REPORT
December 31, 1999
ADVANCE CAPITAL I, INC.
An investment company with five funds
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------
Page
A Letter to Our Shareholders..............1
Investment Performance....................3
Financial Highlights.....................12
PORTFOLIO OF INVESTMENTS
Equity Growth Fund...............17
Bond Fund........................22
Balanced Fund....................27
Retirement Income Fund...........40
Cornerstone Stock Fund...........48
Statement of Assets and Liabilities......50
Statement of Operations..................51
Statement of Changes in Net Assets.......52
Notes to Financial Statements............55
Report of Independent Accountants........59
Additional Information...................60
<PAGE>
Dear Shareholders,
From the White House to Wall Street, the stories that
filled the news headlines over the past year have left a lasting
impression on America's culture. History won't soon forget, for
instance, the impeachment trial or the potential catastrophic
impact that Y2K computer glitches promised, but didn't deliver.
Foreign markets, especially Asia and Russia were digging themselves
out of a devastating economic collapse while genocide gripped the
Balkans. All the while, the longest running U.S. economic expansion
showed little sign of slowing. The underlying fundamentals of
moderate inflation, high consumer confidence and robust corporate
earnings thrust equity values into the stratosphere while fixed
income securities languished amid fears of possible future inflation.
Driving the growth has been the explosion of technology surrounding
the Internet. A plethora of dot-com companies unveiled the latest
technology gizmos to make our lives easier and information more
accessible than ever dreamed possible just a few years ago.
Free flowing capital, which has been the bedrock of our
current economic boom, would not have been possible without tough
political and financial decisions engineered by past generations.
The United Nations, for instance, was organized after the catastrophes
of W.W. II. A solid financial system, which included the inception of
the Securities and Exchange Commission, was put into place after the
devastating effects of the Great Depression. The Cold War ended by
the early 1990's with a massive nuclear arms reduction and in 1997
the U.S. posted its first budget surplus in more than thirty years.
The foresight of past generations to develop long term solutions to
enormous problems has produced in the longest economic expansion on
record, the lowest unemployment rate in thirty years, low inflation
and general peace throughout the world. Fostering the growth of
capitalism has propelled the entrepreneurial spirit and funded the
advancements in technology which has reshaped business and personal
communications.
"The wave of the future is coming and there is no fighting it."
(Anne Morrow Lindbergh). This quote rings particularly true in the fast
paced world of new technology inventions. The explosion of Internet
startups and their IPOs have catapulted many companies into multi-billion
dollar entities, some in a few short weeks. Investors are stuck between
justifying astronomical stock valuations or missing out on a possible
fundamental shift in consumer and business demand for products. This
dynamic environment has kept industry leaders such as Microsoft, Intel
and Lucent under pressure to remain innovative and flexible or risk losing
market share to smaller startups.
The red-hot technology sector coupled with solid economic
fundamentals and seemingly insatiable consumer demand has propelled
the equity markets to record highs. The technology loaded NASDAQ
100 returned 101 percent for the year, while the S&P 500 was up
21 percent. Fixed income securities with long maturities were hit
hard all year as a stellar economy kept inflationary fears
high and interest rates on the rise. The Equity Growth Fund increased 50.1
percent for the year while the S&P MidCap Index increased 14.7 percent. The
Balanced Fund with its 60-40 mix of stocks and bonds, increased 8.4 percent
compared to a 9.0 percent increase in the Lipper Balanced Fund Index. The
Bond and Retirement Income Funds returned -3.7 percent and -2.3 percent,
respectively, compared to the Lipper BBB Bond Index return of -1.1 percent.
The Cornerstone Stock Fund returned 29.6 percent compared to the S&P 500
Index which returned 21.0 percent.
1
<PAGE>
Looking ahead it is difficult not to be very cautious about the short
run, but long run fundamentals remain solid. Several years ago, a select few
on Wall Street were touting a "New Era of Investing" in which the equity
markets would remain robust for an extended period of time. Their thesis
was based upon an aging baby boom generation flush with cash and the
determination to spend or invest it. In addition, they theorized,
that the technology boom would continue to expand worker productivity
while reducing costs and increasing the profitability of corporations.
Also, a shift toward more service related jobs from the often volatile
manufacturing sector would defray the dreaded business cycle effect on
the economy. While we do not flatly accept that equity values will rise
indefinitely, credible evidence suggests an extended economic boom with
relatively low inflation and near full employment should continue unless
an unexpected shock should befall the economy.
The most immediate concern remains the inflationary effect of full
employment, rising oil prices and unprecidented consumer demand. After three
rate increases in 1999, the Federal Reserve remains poised to push rates higher
if economic growth continues on its torrid pace. Higher rates have already
hurt bond returns and the stock market could be in for a rough ride in the
year ahead if rates creep any higher. As with any forecast scenario, there
are many unknowns and a virtually infinite number of outcomes. Our current
financial path, however, makes it difficult to be anything other than
extremely cautious about stocks for the year. Bonds we expect will
provide positive total returns for the new year.
At December 31, 1999, the five Advance Capital I, Inc. Funds held just
over $580 million in total assets, about 36 percent more than the prior year.
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 investors well over time. We thank you for your
continued confidence and look forward to providing you with service and
results designed to meet or exceed your long term investment objectives.
If you have questions or if we may be of service, please call us. We
appreciate the opportunity to answer your questions or to discuss financial
or investment matters that may be of interest to you. Our toll-free number
is (800) 345-4783.
Sincerely,
/s/ John C. Shoemaker /s/ Robert J. Cappelli
John C. Shoemaker Robert J. Cappelli
February 7, 2000
2
<PAGE>
INVESTMENT PERFORMANCE
ADVANCE CAPITAL I, INC. IS AN OPEN-END, DIVERSIFIED MANAGEMENT
INVESTMENT COMPANY OFFERING INVESTMENT OPPORTUNITIES IN FIVE
MUTUAL FUND PORTFOLIOS.
<TABLE>
<CAPTION>
1999 FUND RESULTS
<S> <C>
Equity Growth 50.1%
Balanced 8.4%
Bond -3.7%
Retirement Income -2.3%
Cornerstone Stock 29.6%
</TABLE>
The accompanying comments are intended to help investors
evaluate the dynamics of mutual fund performance. The charts and
tables that follow show the average annual return of each Fund as
well as selected measures of general stock and bond market returns.
The Consumer Price Index (CPI) is also shown to illustrate the
impact inflation has on investment returns.
Figures for the life of the Balanced and Bond Funds begin
August 31, 1987. The figures for the Bond Fund reflect a
substantial change in objectives on March 9, 1999. The Retirement
Income Fund figures begin on January 1, 1993, the start date for
the Fund. The historical figures for the Equity Growth Fund begin
January 1, 1994. Figures for the Cornerstone Stock Fund begin on
December 17, 1998, the start date for the Fund.
THE EQUITY GROWTH FUND IN 1999
THE ADVANCE CAPITAL I EQUITY GROWTH FUND SEEKS LONG-TERM GROWTH
OF CAPITAL BY INVESTING PRIMARILY IN COMMON STOCKS OF SMALL,
RAPIDLY GROWING COMPANIES.
<TABLE>
<CAPTION>
TOP FIVE INDUSTRIES
<S> <C>
Computer Software 17.0%
Semiconductor 8.4%
Retail Store 5.9%
Computer Peripheral 5.9%
Broadcasting/Cable TV 6.0%
</TABLE>
The Equity Growth Fund returned 50.1 percent in 1999 while
the S&P 400 Mid Cap Index returned 14.7 percent and the Lipper
Mid Cap Growth Index returned 73.7 percent. The accompanying graph
shows the cumulative performance of the Equity Growth Fund, the
Lipper Mid Cap Growth Index, the S&P 400 Mid Cap Index and the
Consumer Price Index (CPI) since the beginning of 1994.
Despite several financial obstacles, investors remained
upbeat about stocks through most of 1999. The first part of the
year brought uncertainty about the stability of foreign markets
and the potential negative impact on domestic prosperity.
Several restructuring packages by the International Monetary
Fund stopped the economic hemorrhaging in Asia and Russia which
quelled investors' fears. Skepticism turned to slight optimism
when corporate earnings for the first quarter showed surprising
strength. Late in the second quarter and into the third, GDP
growth came roaring back while inflation remained remarkably
tame. This combination was the catalyst for investors to push
stock values higher, especially Internet related companies and
those heavily involved in technology. By the beginning of the
fourth quarter the NASDAQ 100 had already returned 31 percent
for the year. During the fourth quarter that Index returned
54 percent, producing an unbelievable 101 percent return for
the year.
3
<PAGE>
In contrast to the prior four years, during which large
cap growth soundly outperformed mid cap growth, this past year
saw mid cap growth stocks drastically outperform their larger
counterparts. The characteristics of small to mid sized companies
along with relatively high valuations on large cap stocks and
enthusiasm for the technology sector accounted for the shift
in returns. Small to mid cap stocks have market capitalization's
under $10 billion. They typically represent emerging companies with
new services or technologies which, if broadly adopted, could
produce significant earnings growth and market share. In 1980
for example a small, relatively unknown company entered the market
with a new computer operating system designed to make setup and
operation of IBM computers easier and more user friendly. In the
twenty years since, Microsoft has grown from a small cap stock
into a technology behemoth with the highest market capitalization
of any domestic company. Today, Microsoft sells hundreds of
products and generates annual sales of about $25 billion. Although
its market strength and stock performance will be difficult to
duplicate, investors are scrambling to find companies with similar
potential amid the recent technological boom gripping the market.
Economic data points to a strong new year with continued
low unemployment and solid corporate earnings. Investors and the
Fed worry that inflation will creep into the economy if GDP growth
continues on its torrid pace. Bond investors have already pushed
yields significantly higher over the past year. Rising interest
rates will eventually begin to weigh on stock values.
THE EQUITY GROWTH FUND
[EDGAR REFERENCE - LIPPER MID CAP, EQUITY GROWTH, S & P 400
MID CAP AND CPI INDEX LINE CHART FOR 1994-1999]
AVERAGE ANNUAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
Year Years Fund
------ ------ -------
<S> <C> <C> <C>
Equity Growth Fund 50.14% 27.18% 21.35% *
S&P 400 Mid Cap Index 14.70% 23.01% 18.12%
Lipper Mid Cap Growth Index 73.72% 28.07% 22.90%
Consumer Price Index (CPI) 2.63% 2.43% 2.46%
</TABLE>
Past performance should not be used to attempt to predict
future performance.
*The investment objectives and policies of the Equity Growth Fund
were changed at the end of 1993 and T. Rowe Price Associates was
added as sub-investment advisor to the Fund at that time. The
five year and life of fund figures reflect results since that change.
4
<PAGE>
THE BOND FUND IN 1999
THE ADVANCE CAPITAL I BOND FUND SEEKS TO PROVIDE INVESTORS WITH
CURRENT INCOME BY INVESTING AT LEAST 65 PERCENT IN CORPORATE OR U.S.
GOVERNMENT BONDS AND AS MUCH AS 45 PERCENT IN LOWER-RATED HIGH-
YIELDING INSTRUMENTS.
<TABLE>
<CAPTION>
AS OF 12/31/99
<S> <C>
Average Maturity 13.4 Years
Average Quality BBB+
Average Duration 7.4 Years
Size $34 Million
</TABLE>
The shareholders in the Bond Fund approved a change in
investment objectives on March 9, 1999. The effect of the change
was to lengthen the average maturity of the investment grade
portion of the Fund and to include high yield and GNMA bonds in
the Fund. For the year, the Bond Fund declined 3.7 percent, compared
to the Lipper Intermediate Bond Index which declined .98 percent.
The Bond Fund's return represents 6.1 percent from income distributed
to shareholders and a 9.8 percent decrease in share price. The
accompanying graph shows the cumulative performance of the Bond
Fund, the Balanced Fund, the Lipper Intermediate Bond Index, the
Consumer Price Index (CPI) and the Lipper Balanced Index since
August 1987, the Fund's inception.
In the first half of 1999, the U.S. economy appeared
destined to succumb, in some way, to the foreign contagion
which had rocked many Asian economies over the prior two years.
Diligent fiscal restructuring along with continued help by the
International Monetary Fund, however, helped to stabilize many
of those economies. This quelled domestic fears of a near term
recession or slowdown hitting the U.S. economy. The all clear
was sounded by mid summer as consumer confidence snapped back to
its prior high and GDP growth, which had fallen in the second
quarter, jumped to an annualized rate of 5.7 percent for the third
quarter. In addition, the unemployment rate hit a 30 year low
and oil prices more than doubled from $10 a barrel early in the
year to about $25 a barrel by December. The remarkable resilience
of the U.S. economy to rebound from severe foreign pressures did
not go unnoticed. The Federal Reserve raised interest rates three
times from June through November in order to suppress renewed
inflationar pressures and slow the torrid pace of GDP growth.
A strong U.S. economy combined with rising interest rates
left fixed income investors stunned and returns negative for 1999.
The 30 year U.S. Treasury bond declined about 14.3 percent (including
interest) for the year while the ten year treasury bond was off
about 7.8 percent (including interest). Most investment grade
corporate bonds posted negative returns, the severity depended on
specific maturity and underlying credit quality. High yield bonds
faired a bit better, returning on average about 1.5 percent for the
year.
At December 31, the Bond Fund was fully invested with an overall
portfolio maturity of about 13 years. The Fund's maturity is near the
middle of the new target range of 10 to 20 years and longer than the
year earlier figure of 8.2 years. The changes to investment objective
accounted for the rise in average portfolio maturity over last year.
The average quality of the Fund declined to BBB+ from A a year earlier.
Again the difference represents implementing the change in investment
objectives to incorporate high yield bonds into the Fund which, by
definition, have a lower rating than investment grade bonds.
5
<PAGE>
Today, underlying economic strength combined with an enthusiastic
consumer and record high equity values has the Federal Reserve poised
to raise interest rates further to cool economic growth to a more
sustainable level. In the short term, higher rates would not bode
well for fixed income investments. In the long run, however, higher
rates would keep economic growth and consumer spending in check and
fixed income investments more attractive. The Bond Fund's
characteristics of long investment grade corporate bonds along with
high yield bonds should keep the Fund well positioned relative to its
peers should this scenario fold.
THE BALANCED FUND IN 1999
THE ADVANCE CAPITAL I BALANCED FUND SEEKS TO PROVIDE CAPITAL APPRECIATION,
CURRENT INCOME AND PRESERVATION OF CAPITAL BY INVESTING IN A DIVERSIFIED
PORTFOLIO OF COMMON STOCKS AND BONDS.
<TABLE>
<CAPTION>
AS OF 12/31/99
<S> <C>
Bonds 40%
Small Stocks 23%
Large Stocks 37%
Size $167 Million
</TABLE>
The Balanced Fund increased 8.4 percent in 1999 while the
Lipper Balanced Index increased 9.0 percent. The accompanying graph
illustrates the cumulative performance of the Balanced Fund, the
Bond Fund, the Lipper Intermediate Bond Index, the Lipper Balanced
Index and the Consumer Price Index (CPI) since August 1987, the
Fund's inception. Although the Fund began in August of 1987, the
investment objectives and policies were changed at the end of 1993
and T. Rowe Price Associates was added as sub-investment advisor
to the Fund at that time.
The Balanced Fund's investment mix of 40 percent investment
grade bonds, 40 percent large cap value and 20 percent mid cap growth
kept the fund well diversified while producing investment returns
in-line with the average balanced fund. The global slowdown which
plagued many foreign countries late in 1998, appeared destined to
hit the U.S. economy in 1999. The Federal Reserve lowered rates three
times late in 1998 to defray this threat and quell the growing fear
of a market correction. Lower rates along with strong underlying
economic fundamentals brought investors back into the market and
lifted GDP growth by the second half of 1999. As optimism returned,
investors pulled money out of fixed income investments in favor of
the high growth technology sector. By mid year, U.S. economic growth
had rebounded significantly and the risk of a recession had vanished.
In fact, inflation fears crept back into the economy which sent the
Federal Reserve on course to reverse the prior three rate reductions
by the end of 1999. A stark reversal in interest rates did not bode
well for fixed income securities. The yield on the thirty year U.S.
Treasury bond rose from about 5 percent at the beginning of the year
to around 6.5 percent at year end, which conversely, led to a
significant price decline in most fixed income securities.
While technology was on a tear, large cap value stocks, on
average, returned less than 10 percent while large cap growth stocks
returned around 20 percent. The distinct gap between these sectors
illustrates the exuberance surrounding technology relative to the
staid industrial sector. Traditional value
6
<PAGE>
investing utilizes fundamental analysis to determine a company's worth
based on book value of assets, sales growth and relative P/E ratio.
Finding a value stock equates to buying when a company's worth is not
fully priced into the current market value of the stock. Conversely,
growth investing, especially with today's Internet stocks, relies less
on traditional fundamental analysis and more on future earning
expectations, growth of proprietary technology and projected market
position. Although both strategies are important to a well balanced
portfolio, traditional value investing has outperformed growth investing
over long investment periods.
Today, the high flying technology sector has come under some
pressure from profit taking and rising interest rates. The underlying
economic fundamentals, however, remain positive and the possibility of
a severe market correction or domestic recession appears remote. The
Balanced Fund's allocation between large company value, small company
growth and fixed income securities, along with proper industry
diversification, should continue to provide a consistency and balanced
returns within the dynamic investment environment.
THE BOND AND BALANCED FUND
[EDGAR REFERENCE - LIPPER BALANCED, BALANCED, LIPPER BOND, BOND AND
CPI INDEX LINE CHART FOR 1987-1999]
AVERAGE ANNUAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Past 1 Past 5 Past 10
Year Years Years
------ ------ -------
<S> <C> <C> <C>
Balanced Fund * 8.37% 17.35% 10.61%
Bond Fund ** -3.70% 7.08% 7.10%
Lipper Intermediate Bond Index -.98% 6.73% 7.06%
Lipper Balanced Index 8.98% 15.43% 12.32%
Consumer Price Index (CPI) 2.63% 2.43% 2.99%
</TABLE>
Past performance should not be used to attempt to predict future performance.
*The investment objectives and policies of the Balanced Fund were
changed at the end of 1993 and T. Rowe Price Associates was added as
sub-investment advisor to the Fund at that time. The five year figures
reflect results since that change.
** The investment objectives of the Bond Fund changed on March 9, 1999
by a majority vote of outstanding shares. Returns for Past 5 Years and Life of
Fund incorporate prior investment objectives.
7
<PAGE>
THE RETIREMENT INCOME FUND IN 1999
THE ADVANCE CAPITAL I RETIREMENT INCOME FUND SEEKS TO PROVIDE
INVESTORS WITH CURRENT INCOME BY INVESTING AT LEAST 65 PERCENT IN
INVESTMENT GRADE CORPORATE AND U.S. GOVERNMENT BONDS AND AS MUCH AS
33 PERCENT IN LOWER-RATED HIGH-YIELDING INSTRUMENTS.
<TABLE>
<CAPTION>
AS OF 2/31/99
<S> <C>
Average Maturity 14.6 Years
Average Quality BBB
Average Duration 7.5 Years
Size $205 Million
</TABLE>
The Retirement Income Fund declined 2.3 percent for the year
while the Lipper BBB Index declined 1.1 percent. The Retirement Income
Fund's return was comprised of 6.7 percent from income distributed to
shareholders and a 9.0 percent decrease in share price. The accompanying
graph shows the cumulative performance of the Retirement Income Fund,
the Lipper BBB Index and the Consumer Price Index (CPI) since January
1993, the Fund's inception.
The past year proved particularly difficult for most fixed income
investments. The Federal Reserve raised rates three times over the past
eight months, partially to reverse three rate cuts enacted during the
1998 Asian financial crisis and also to slow economic growth. The Fed's
action pushed the yield on the 30 year U.S. Treasury bond from about 5
percent at the beginning of the year to around 6.5 percent by year's end.
Also, many fixed income investors were tempted by the red-hot equity
market which sapped demand for fixed income securities as money flowed
from bonds into stocks. The Retirement Income Fund holds about 67 percent
of total assets in investment grade corporate bonds with long average
maturities. This made it particularly susceptible to rising rates during
the year. Although the traditional measures of inflation are tame,
underlying concerns about wage pressures, rising oil prices and general
prosperity has left fixed income investors worried about future inflation.
Overall, high yield returns were slightly positive even though certain
sectors performed poorly and the market was quite volatile. The health
care industry, for example, was adversely affected by the government's
decision to mandate a Prospective Payment System for long term care
facilities. This complicated payment scheme forced some companies to
reconfigure their cost and revenue structures. Pressure to change did
not sit well with high yield investors and, as expected, several bonds
in this sector declined in price. Another sector hit hard was consumer
textile and apparel. The significant trade imbalance with Asia kept
import prices cheap and domestic apparel companies under severe pricing
pressure. For example, Fruit of the Loom, a well known domestic apparel
company, filed for Chapter 11 bankruptcy protection in December as a
result of high debt and poor market conditions.
Since the Asian crisis in the fall of 1998, high yield investors
have favored large, liquid issues with sound fundamentals and higher
quality ratings within the high yield universe. The smaller issues or
lower rated bonds have come under pressure as investors shift to more
stable names. Also, 1999 showed a sizable increase in distressed rates
among high yield issuers. The Retirement Income Fund, although not immune
to these pressures, is well diversified with more than 77 high yield names
in ten different industries. Also, since inception, our strategy has
favored large, liquid issues with solid fundamentals, good growth
8
<PAGE>
prospects and upper tier credit ratings within the high yield universe.
This basic philosophy has kept problem names to a minimum while generating a
competitive income yield.
Today, the Retirement Income Fund holds approximately 67 percent
of assets in long maturing investment grade and about 33 percent in high
yield securities. The average maturity is about 14.6 years and overall
portfolio quality is BBB. We continue to favor large high yield issuers
with sound fundamentals and investment grade bonds with shorter maturities
in the 10 to 15 year range. The Fund remains focused on providing stable,
reliable income at a reasonable level of risk.
THE RETIREMENT INCOME FUND
[EDGAR REFERENCE - RETIREMENT INCOME, LIPPER BBB INDEX AND CPI INDEX
LINE CHART FOR 1993-1999]
AVERAGE ANNUAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
Year Years Fund
------ ------ -------
<S> <C> <C> <C>
Retirement Income Fund -2.33% 8.39% 7.07%
Lipper BBB Index -1.12% 7.68% 6.55%
Consumer Price Index (CPI) 2.63% 2.43% 2.50%
</TABLE>
Past performance should not be used to attempt to predict future performance.
9
<PAGE>
THE CORNERSTONE STOCK FUND IN 1999
THE ADVANCE CAPITAL I CORNERSTONE STOCK FUND SEEKS TO PROVIDE LONG-TERM
GROWTH OF CAPITAL BY INVESTING PRIMARILY IN COMMON STOCKS OF LARGE, WELL
ESTABLISHED COMPANIES.
TOP FIVE HOLDINGS
-----------------
Microsoft
Intel
General Electric
Cisco Systems
Wal-Mart Stores
The Cornerstone Stock Fund returned 29.6 percent for the year compared
to the S&P 500 Index which returned 21.0 percent. The accompanying graph
shows the cumulative performance of the Cornerstone Stock Fund, the S&P
500 Index and the Consumer Price Index (CPI) since December 1998, the Fund's
inception.
Throughout 1999, the equity markets benefited from continued low
inflation, robust corporate earnings and massive inflows into stock mutual
funds. The general theme favored technology and Internet related companies
with the opportunity to capitalize on the growing demand for telecommunication
equipment and parts, increased bandwidth and computer software.
The Cornerstone Stock Fund invests primarily in a diversified group of
large, well established companies, each with market capitalization well over
$10 billion. Companies of this size tend to have established product lines,
solid market positions and substantial financial resources. These are the
most liquid stocks in the marketplace.
Today, the Cornerstone Stock Fund is fully invested with over sixty
eight securities in ten different industries. An emphasis on technology,
pharmaceuticals and telecommunications recognizes the major growth
opportunities of the next decade. The Fund's strategy is to apply diligent
investment research in selecting highly capitalized companies with industry
leading positions.
10
<PAGE>
THE CORNERSTONE STOCK FUND
[EDGAR REFERENCE - CORNERSTONE STOCK, S&P 500 INDEX AND CPI INDEX
LINE CHART FOR 1999]
AVERAGE ANNUAL RETURNS FOR PERIODS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
Year Years Fund
------ ------ -------
<S> <C> <C> <C>
Cornerstone Stock 29.62% N/A 34.06%
S&P 500 Index 21.04% N/A 25.07%
Consumer Price Index (CPI) 2.63% N/A 2.73%
</TABLE>
Past performance should not be used to attempt to predict future performance.
11
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY GROWTH
--------------------------------------------------
Years ended December 31
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <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
------- ------- ------- ------- -------
Income from investment operations
Net investment income (loss) . . . . . . . . (0.14) (0.10) (0.09) (0.07) (0.03)
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . . 10.01 2.90 2.69 2.26 3.48
------- ------- ------- ------- -------
Total from investment operations . . . . . . 9.87 2.80 2.60 2.19 3.45
------- ------- ------- ------- -------
Less distributions
Net investment income . . . . . . . . . . . 0.00 0.00 0.00 0.00 0.00
Net realized gain on investments . . . . . . (3.49) 0.00 (0.07) 0.00 0.00
------- ------- ------- ------- -------
Total distributions . . . . . . . . . . . . (3.49) 0.00 (0.07) 0.00 0.00
------- ------- ------- ------- -------
Net asset value, end of year . . . . . . . . . $26.43 $20.05 $17.25 $14.72 $12.53
======= ======= ======= ======= =======
TOTAL RETURN . . . . . . . . . . . . . . . . . 50.14% 16.23% 17.68% 17.48% 38.00%
Ratios and Supplemental Data
Net assets, end of year (in thousands) . . . $114,515 $68,061 $54,332 $38,767 $25,625
Ratio of expenses to average net assets . . 1.02% 1.02% 1.07% 1.09% 1.12%
Ratio of net investment income (loss)
to average net assets . . . . . . . . . . -0.63% -0.58% -0.58% -0.50% -0.29%
Portfolio turnover rate . . . . . . . . . . 36.49% 22.34% 20.53% 24.75% 13.86%
</TABLE>
See Notes To Financial Statements
12
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- ------------------------------------------------------
<TABLE>
<CAPTION>
BOND
--------------------------------------------------
Years ended December 31
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<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
------- ------- ------- ------- -------
Income from investment operations
Net investment income . . . . . . . . . . . 0.75 0.67 0.69 0.70 0.70
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . (1.04) 0.15 0.24 (0.42) 1.18
------- ------- ------- ------- -------
Total from investment operations . . . . . (0.29) 0.82 0.93 0.28 1.88
------- ------- ------- ------- -------
Less distributions
Net investment income . . . . . . . . . . . (0.75) (0.67) (0.69) (0.70) (0.70)
Net realized gain on investments . . . . . 0.00 (0.05) (0.09) 0.00 0.00
------- ------- ------- ------- -------
Total distributions . . . . . . . . . . . . (0.75) (0.72) (0.78) (0.70) (0.70)
------- ------- ------- ------- -------
Net asset value, end of year . . . . . . . . $9.58 $10.62 $10.52 $10.37 $10.79
======= ======= ======= ======= =======
TOTAL RETURN . . . . . . . . . . . . . . . . -3.71% 8.12% 9.41% 2.81% 20.15%
Ratios and Supplemental Data
Net assets, end of year (in thousands). . . $34,362 $3,746 $4,203 $4,430 $4,527
Ratio of expenses to average net assets . . 0.73% 0.52% 0.54% 0.55% 0.55%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 6.64% 6.35% 6.65% 6.71% 6.80%
Portfolio turnover rate . . . . . . . . . . 32.43% 11.56% 21.95% 19.77% 6.69%
</TABLE>
See Notes To Financial Statements
13
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- ------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED
-------------------------------------------------
Years ended December 31
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <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
------- ------- ------- ------- -------
Income from investment operations
Net investment income . . . . . . . . . . 0.51 0.48 0.45 0.41 0.35
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . 0.87 1.56 2.32 1.37 2.75
------- ------- ------- ------- -------
Total from investment operations . . . . . 1.38 2.04 2.77 1.78 3.10
------- ------- ------- ------- -------
Less distributions
Net investment income . . . . . . . . . . (0.51) (0.48) (0.45) (0.41) (0.35)
Net realized gain on investments . . . . . (0.98) (0.12) (0.31) (0.26) (0.15)
------- ------- ------- ------- -------
Total distributions . . . . . . . . . . . (1.49) (0.60) (0.76) (0.67) (0.50)
------- ------- ------- ------- -------
Net asset value, end of year . . . . . . . . $17.02 $17.13 $15.69 $13.68 $12.57
======= ======= ======= ======= =======
TOTAL RETURN . . . . . . . . . . . . . . . . 8.37% 13.15% 20.50% 14.48% 31.53%
Ratios and Supplemental Data
Net assets, end of year (in thousands) . . $169,216 $125,883 $99,421 $75,202 $59,299
Ratio of expenses to average net assets . 1.03% 1.01% 1.04% 1.06% 1.07%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 2.97% 2.92% 3.02% 3.17% 3.11%
Portfolio turnover rate . . . . . . . . . 23.76% 11.04% 10.13% 12.79% 22.72%
</TABLE>
See Notes To Financial Statements
14
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- ------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT INCOME
--------------------------------------------------
Years ended December 31
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of year . . . . $10.56 $10.65 $10.20 $10.51 $9.22
------- ------- ------- ------- -------
Income from investment operations
Net investment income . . . . . . . . . . 0.71 0.73 0.74 0.75 0.76
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . . (0.95) (0.08) 0.45 (0.31) 1.29
------- ------- ------- ------- -------
Total from investment operations . . . . . (0.24) 0.65 1.19 0.44 2.05
------- ------- ------- ------- -------
Less distributions
Net investment income . . . . . . . . . . (0.71) (0.73) (0.74) (0.75) (0.76)
Net realized gain on investments . . . . . 0.00 (0.01) 0.00 0.00 0.00
------- ------- ------- ------- -------
Total distributions . . . . . . . . . . . (0.71) (0.74) (0.74) (0.75) (0.76)
------- ------- ------- ------- -------
Net asset value, end of year . . . . . . . . $9.61 $10.56 $10.65 $10.20 $10.51
======= ======= ======= ======= =======
Total Return . . . . . . . . . . . . . . . . -2.33% 6.20% 12.20% 4.54% 22.96%
Ratios and Supplemental Data
Net assets, end of year (in thousands) . . $209,791 $221,221 $200,511 $170,799 $139,299
Ratio of expenses to average net assets . 0.81% 0.79% 0.82% 0.82% 0.84%
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . 7.06% 6.87% 7.21% 7.45% 7.64%
Portfolio turnover rate . . . . . . . . . 17.89% 19.52% 16.60% 8.34% 15.63%
</TABLE>
See Notes To Financial Statements
15
<PAGE>
ADVANCE CAPITAL I, INC.
FINANCIAL HIGHLIGHTS - Continued
- ------------------------------------------------------
<TABLE>
<CAPTION>
CORNERSTONE
STOCK
------------------------
Partial
Year
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09 0.46
-------- --------
Total from investment operations . . . . . . . . . . . . . . . . . . . 3.10 0.46
-------- --------
Less distributions
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . (0.01) 0.00
Net realized gain on investments . . . . . . . . . . . . . . . . . . . 0.00 0.00
-------- --------
Total distributions . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01) 0.00
-------- --------
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . . $13.55 $10.46
======== ========
TOTAL RETURN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.62% 4.60%
Ratios and Supplemental Data
Net assets, end of period (in thousands) . . . . . . . . . . . . . . . . $52,356 $7,316
Ratio of expenses to average net assets . . . . . . . . . . . . . . . . 0.77% 0.66% **
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.11% 1.20% **
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . 7.62% 0.00%
</TABLE>
* From December 17, 1998 (commencement of operations) to December 31, 1998.
** Annualized
See Notes To Financial Statements
16
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
ADVERTISING - 2.7%
Catalina Marketing Corporation* 5,600 $ 648,200
Harte-Hanks Inc. 8,000 174,000
Interpublic Group of Companies, Inc. 8,400 484,575
Lamar Advertising Company* 7,500 454,219
Omnicom Group, Inc. 5,000 500,000
Young & Rubicam, Inc. 11,000 778,250
AIR TRANSPORT - 0.2%
Air Express International Corp. 7,650 247,191
APPAREL - 0.4%
Cintas Corporation 6,100 324,063
Quiksilver, Inc.* 10,500 162,750
BANK - 2.3%
City National Corporation 9,000 296,438
Community First Bankshares, Inc. 15,000 236,250
North Fork Bancorporation 13,000 225,874
Northern Trust Corporation 11,200 593,600
State Street Corporation 6,100 445,681
U.S. Trust Corporation 7,200 577,350
Zions Bancorporation 5,000 295,938
BIOTECHNOLOGY - 6.0%
Amgen, Inc.* 10,000 600,625
Biogen, Inc.* 5,300 447,850
Human Genome Sciences, Inc.* 5,700 869,963
Idec Pharmaceuticals Corporation* 6,000 589,500
Immunex Corporation* 5,400 591,300
Incyte Pharmaceuticals, Inc.* 9,000 539,999
Millennium Pharmaceuticals, Inc.* 10,000 1,220,000
PE Corp-Celera Genomics Group* 10,750 1,601,750
Protein Design Labs, Inc.* 6,000 420,000
BROADCASTING / CABLE TV - 6.0%
AMFM, Inc.* 7,000 547,750
Clear Channel Communications* 5,499 490,786
Cox Communications, Inc.* 11,158 574,637
Cumulus Media, Inc.* 8,500 431,375
Emmis Communications Corporation* 7,500 934,805
Entercom Communications Corporation* 8,000 530,000
Hispanic Broadcasting Corporation* 4,600 424,206
Infinity Broadcasting Corporation* 22,781 824,387
Univision Communications, Inc.* 9,600 981,000
USA Networks, Inc.* 8,500 469,625
Westwood One, Inc.* 6,000 456,000
Young Broadcasting, Inc.* 5,000 255,000
BUILDING MATERIALS - 0.3%
Dycom Industries, Inc.* 8,000 352,500
CHEMICAL - 1.5%
Ecolab, Inc. 12,500 489,063
Lilly Industries, Inc. 13,500 181,405
MacDermid, Inc. 9,000 369,563
Sigma-Aldrich Corporation 8,000 240,500
Valspar Corporation 10,800 452,250
COMPUTER & PERIPHERALS - 5.9%
Cisco Systems, Inc.* 3,500 374,938
Comverse Technology, Inc.* 6,750 977,063
Diebold, Inc. 9,500 223,250
EMC Corporation* 4,500 491,625
Gateway, Inc.* 6,500 468,406
Microchip Technology, Inc.* 5,425 371,273
National Computer Systems, Inc. 8,500 319,812
Network Appliance, Inc.* 14,000 1,162,875
Synopsys, Inc.* 6,400 427,200
VERITAS Software Corporation* 9,500 1,359,688
Visual Networks, Inc.* 7,000 554,750
</TABLE>
See Notes To Financial Statements
17
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
COMPUTER SOFTWARE & SERVICES - 17.0%
Adobe Systems, Inc. 8,000 $ 538,000
Affiliated Computer Services, Inc.* 7,000 321,999
BARRA, Inc.* 7,000 222,250
BEA Systems, Inc.* 6,000 419,625
BISYS Group, Inc.* 6,000 391,500
BMC Software, Inc.* 11,200 895,300
Cadence Design Systems, Inc.* 11,000 264,000
Check Point Software Technologies Ltd.* 5,000 993,750
Citrix Systems, Inc.* 10,500 1,291,500
CMGI, Inc.* 4,000 1,107,500
CNET, Inc.* 7,000 397,250
Compuware Corporation* 20,000 745,000
Concord Communications, Inc.* 5,000 221,875
DST Systems, Inc.* 5,600 427,349
Electronic Arts, Inc.* 6,500 546,000
FactSet Research Systems Inc. 6,200 493,675
Great Plains Software, Inc.* 5,500 411,125
IMS Health Incorporated 12,000 326,250
Intuit, Inc.* 12,600 755,213
Iss Group, Inc.* 7,000 497,874
Keane, Inc.* 5,500 176,687
Legato Systems, Inc.* 9,400 646,838
Lycos, Inc.* 7,000 556,938
Mercury Interactive Corporation* 7,000 755,563
National Data Corporation 6,000 203,625
National Instruments Corporation* 9,500 363,375
Network Associates, Inc.* 8,974 239,494
Oracle Corporation* 5,500 616,344
Progress Software Corporation* 10,000 567,500
Psinet, Inc.* 8,000 494,000
SEI Investments Company 5,500 654,586
Shared Medical Systems Corporation 3,500 178,281
SunGard Data Systems, Inc.* 9,500 225,625
Symantec Corporation* 8,800 515,899
Transaction Systems Architects, Inc.* 10,000 279,999
Visio Corporation* 5,600 266,000
WebTrends Corporation* 5,200 421,200
Whittman-Hart, Inc.* 7,900 423,638
Wind River Systems, Inc.* 16,000 587,999
DIVERSIFIED - 0.9%
Danaher Corporation 5,000 241,250
Roper Industries, Inc. 10,500 397,031
Viad Corp. 13,100 365,163
DRUG - 2.9%
BioChem Pharma, Inc.* 12,500 271,875
Biomatrix, Inc.* 9,000 173,250
Cardinal Health, Inc. 6,187 296,203
Elan Corporation PLC-ADR* 9,400 277,300
Express Scripts, Inc.* 4,000 256,000
Gilead Sciences, Inc.* 4,000 216,500
MedImmune, Inc.* 5,000 829,375
QLT Phototherapeutics, Inc.* 8,000 470,000
Shire Pharmaceuticals Group PLC-ADR* 9,800 285,425
Watson Pharmaceuticals, Inc.* 5,600 200,550
DRUGSTORE - 0.4%
CVS Corporation 6,000 239,250
Duane Reade, Inc.* 9,500 261,844
ELECTRIC & GAS UTILITIES - 0.5%
AES Corporation* 7,500 560,625
ELECTRICAL EQUIPMENT - 0.8%
Littlefuse, Inc.* 13,000 315,453
Molex, Inc. 7,421 335,800
Rayovac Corporation* 12,900 243,488
</TABLE>
See Notes To Financial Statements
18
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
ELECTRONICS - 4.6%
Flextronics International Ltd.* 8,000 $ 368,000
Jabil Circuit, Inc.* 5,500 401,500
Macromedia* 8,000 584,999
Micrel, Inc.* 7,000 398,563
Sanmina Corporation* 5,400 539,325
Sawtek, Inc.* 7,000 465,938
SCI Systems, Inc.* 6,000 493,125
Symbol Technologies, Inc. 14,962 951,022
Teradyne, Inc.* 9,200 607,200
Waters Corporation* 9,600 508,800
ENTERTAINMENT - 0.3%
Premier Parks, Inc.* 11,000 317,625
ENVIRONMENTAL - 0.2%
Republic Services, Inc.* 13,000 185,249
FINANCIAL SERVICES - 2.6%
Capital One Financial Corporation 5,100 245,756
Concord EFS, Inc.* 10,500 270,375
Eaton Vance Corporation 11,200 425,600
Federated Investors 18,000 361,125
Finova Group, Inc. 6,000 213,000
Franklin Resources, Inc. 11,300 362,306
Paychex, Inc. 10,125 405,000
Providian Financial Corporation 4,000 364,250
Waddell & Reed Financial, Inc. 13,500 366,188
FOOD PROCESSING - 0.3%
Tootsie Roll Industries, Inc. 10,776 354,935
FOOD WHOLESALERS - 0.3%
U.S. Foodservice* 20,500 343,375
FURNITURE / HOME FURNISHINGS - 0.5%
HON INDUSTRIES Inc. 12,000 263,250
Leggett & Platt, Inc. 12,300 263,681
HOMEBUILDING - 0.2%
Lennar Corporation 12,600 204,750
INDUSTRIAL SERVICES - 2.1%
ACNielsen Corporation* 15,500 381,688
Apollo Group, Inc.* 12,250 245,766
DeVry, Inc.* 16,000 300,000
Equifax, Inc. 11,700 275,681
Iron Mountain, Inc.* 10,000 393,125
ITT Educational Services, Inc.* 7,500 115,781
Manpower, Inc. 9,000 338,624
Quintiles Transnational Corporation* 9,000 168,188
Robert Half International, Inc.* 7,750 221,358
INSURANCE - 2.1%
Ace Ltd. 8,900 148,519
Ambac Financial Group, Inc. 7,200 375,750
E. W. Blanch Holdings, Inc. 5,000 306,250
Medical Assurance, Inc.* 13,500 286,031
Mutual Risk Management Ltd. 21,132 355,282
Protective Life Corporation 12,100 384,931
Radian Group, Inc. 6,500 310,375
XL Capital Ltd. 5,500 285,313
MACHINERY - 1.1%
Cognex Corporation* 9,500 370,500
Donaldson Company, Inc. 13,600 327,250
IDEX Corporation 9,500 288,563
Parker-Hannifin Corporation 6,000 307,875
MEDICAL SERVICES - 0.7%
Lincare Holdings, Inc.* 8,100 280,969
Quest Diagnostics, Inc.* 10,500 320,906
Renal Care Group, Inc.* 10,500 245,438
MEDICAL SUPPLIES - 3.3%
Allergan, Inc. 6,000 298,500
ArthroCare Corporation* 6,000 366,000
</TABLE>
See Notes To Financial Statements
19
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
MEDICAL SUPPLIES - 3.3% (Continued)
Biomet, Inc. 9,500 $ 380,000
Boston Scientific Corporation* 6,000 131,250
Guidant Corporation 7,000 329,000
Medical Manager Corporation* 4,500 379,125
Medtronic, Inc. 13,000 473,688
ResMed, Inc.* 10,500 438,375
Stryker Corporation 5,000 348,125
Sybron International Corp.* 13,000 320,938
VISX, Inc.* 4,500 232,875
Wesley Jessen Visioncare* 1,500 56,813
METAL FABRICATING - 0.2%
Lincoln Electric Holdings, Inc. 12,700 261,938
NEWSPAPER - 0.2%
Central Newspapers, Inc. 6,000 236,250
OFFICE EQUIPMENT & SUPPLIES - 0.4%
Avery Dennison Corporation 6,700 488,263
OILFIELD SERVICES - 1.8%
BJ Services Company* 11,500 480,844
Cooper Cameron Corporation* 10,400 508,950
Smith International, Inc.* 11,800 586,313
Veritas DGC, Inc.* 13,300 186,200
Weatherford International, Inc.* 8,335 332,879
PACKAGING & CONTAINER - 0.3%
Sealed Air Corporation* 5,900 305,694
PETROLEUM - 0.4%
Apache Corporation 8,000 295,500
Devon Energy Corporation 4,500 147,938
PRECISION INSTRUMENT - 1.2%
Dionex Corporation* 6,000 247,125
KLA-Tencor Corporation* 4,800 534,600
PE Corp-PE Biosystems Group 5,000 601,563
PRINTING - 0.4%
Valassis Communications, Inc.* 12,000 507,000
PUBLISHING - 0.4%
Meredith Corporation 10,000 416,875
RAILROAD - 0.4%
Kansas City Southern Ind., Inc. 6,000 447,749
REAL ESTATE INVESTMENT MANAGEMENT - 0.5%
Jones Lang LaSalle, Inc.* 10,800 128,250
Security Capital Group, Inc. - Class B* 16,800 210,000
Trammell Crow Company* 19,000 220,875
RECREATION - 0.8%
Carnival Corporation 9,000 430,313
Harley-Davidson, Inc. 8,000 512,500
RESTAURANT - 0.3%
Starbucks Corporation* 16,200 392,850
RETAIL STORE - 5.9%
Bed Bath & Beyond, Inc.* 14,000 486,500
BJ's Wholesale Club, Inc.* 11,000 401,500
CDW Computer Centers, Inc.* 5,000 393,125
Circuit City Stores, Inc. 8,000 360,499
Dollar General Corporation 23,241 528,733
Dollar Tree Stores, Inc.* 6,000 290,625
Family Dollar Stores 11,500 187,594
Harcourt General, Inc. 7,500 301,875
Kohl's Corporation* 3,300 238,219
Lands' End, Inc.* 7,200 250,200
Linens 'n Things, Inc.* 7,000 207,375
Ross Stores, Inc. 16,500 295,969
Staples, Inc.* 10,500 217,875
The Men's Wearhouse, Inc.* 9,225 270,984
Tiffany & Company 14,000 1,249,500
TJX Companies, Inc. 12,000 245,250
Williams-Sonoma, Inc.* 10,000 460,000
Zale Corporation* 7,000 338,625
</TABLE>
See Notes To Financial Statements
20
<PAGE>
ADVANCE CAPITAL I, INC. - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK AND MARKET
REPURCHASE AGREEMENT SHARES VALUE
- ----------------------------------------- ------------ ------------
<S> <C> <C>
SECURITIES BROKERAGE - 1.1%
Charles Schwab Corporation 7,000 $ 267,750
Investment Technology Group, Inc. 12,444 357,765
Legg Mason, Inc. 11,000 398,750
Raymond James Financial, Inc. 10,125 188,578
SEMICONDUCTOR - 8.4%
Altera Corporation* 13,600 674,050
Analog Devices, Inc.* 8,500 790,500
Applied Materials, Inc.* 4,500 570,094
Applied Micro Circuits Corporation* 6,000 763,500
Broadcom Corporation* 2,000 544,750
Dallas Semiconductor Corporation 6,500 418,844
Lattice Semiconductor Corporation* 12,000 565,500
Linear Technology Corporation 9,000 644,063
Maxim Integrated Products, Inc.* 18,000 849,375
National Semiconductor Corp.* 9,500 406,719
PMC-Sierra, Inc.* 6,800 1,090,125
Qlogic Corporation* 3,000 479,625
Vitesse Semiconductor Corporation* 15,000 786,563
Xilinx, Inc.* 21,200 963,938
TELECOMMUNICATIONS EQUIPMENT - 3.4%
ADC Telecommunications, Inc.* 5,500 399,093
American Tower Corporation 14,000 427,875
E-Tek Dynamics, Inc.* 4,500 605,812
General Instrument Corporation* 6,600 561,000
JDS Uniphase Corporation* 8,000 1,290,500
Pinnacle Holdings, Inc.* 10,000 423,750
Tellabs, Inc.* 3,500 224,656
TELECOMMUNICATIONS SERVICE - 5.2%
Allegiance Telecom, Inc.* 5,000 461,250
Crown Castle International Corporation* 16,000 514,000
Intermedia Communications, Inc.* 11,500 446,344
McleodUSA Inc.* 13,000 765,375
Nextel Communications, Inc.* 5,500 567,187
NEXTLINK Communications, Inc.* 10,000 830,625
NTL Incorporated* 3,125 389,844
United States Cellular Corporation* 3,500 353,281
Viatel, Inc.* 9,000 482,625
Western Wireless Corporation* 9,500 634,125
Winstar Communications, Inc.* 6,500 489,125
THRIFT - 0.4%
Charter One Financial, Inc. 10,815 206,837
JSB Financial, Inc. 5,000 259,374
TOYS - 0.3%
Mattel, Inc. 23,625 310,078
TRANSPORT SERVICES - 0.8%
C.H. Robinson Worldwide, Inc. 8,000 318,000
Expeditors International of Washington, Inc. 12,700 556,419
WATER UTILITY - 0.2%
Azurix Corporation* 28,000 250,250
-------------
TOTAL COMMON STOCK - 99.1%
(Cost $60,536,500) 113,524,726
REPURCHASE AGREEMENT - 1.2%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, due 01/03/00 1,326,215
-------------
TOTAL INVESTMENTS IN SECURITIES - 100.3%
(Cost $61,862,715) $114,850,941
=============
</TABLE>
* Securities are non-income producing
See Notes To Financial Statements
21
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- ------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
ADVERTISING - 2.5%
Lamar Advertising Company B 9.625 12/01/06 $ 500,000 $ 515,041
News Corporation Ltd. BB+ 8.750 02/15/06 350,000 357,000
AEROSPACE / DEFENSE - 0.7%
Lockheed Martin Corporation BBB- 7.650 05/01/16 250,000 228,829
AIR TRANSPORT - 0.6%
Northwest Airlines, Inc. BB 8.700 03/15/07 200,000 191,254
AUTO PARTS - 1.4%
Federal-Mogul Corporation BB+ 7.750 07/01/06 500,000 492,500
AUTO & TRUCK - 5.0%
Ford Motor Company A+ 6.500 08/01/18 500,000 440,781
General Motors Corporation A 7.700 04/15/16 500,000 498,959
Lear Corporation BB+ 8.110 05/15/09 350,000 329,532
TRW, Inc. BBB 6.250 01/15/10 500,000 440,157
BANK - 6.3%
Bank of America Corp. A 7.800 09/15/16 500,000 497,286
Capital One Financial Corp. BB+ 7.250 05/01/06 150,000 143,031
Citicorp A+ 7.250 10/15/11 250,000 242,063
J.P. Morgan & Company A+ 6.250 01/15/09 400,000 367,131
National City Corporation A- 6.875 05/15/19 500,000 447,948
Swiss Bank Corp.-NY AA 7.375 07/15/15 500,000 479,540
BEVERAGE - 1.4%
Anheuser-Busch Companies, Inc. A+ 7.125 07/01/17 500,000 468,655
BROADCASTING / CABLE TV - 6.2%
Chancellor Media Corporation B+ 8.000 11/01/08 250,000 250,625
Charter Communications Holdings LLC B+ 8.625 04/01/09 500,000 466,808
CSC Holdings, Inc. BB- 9.875 02/15/13 500,000 519,750
Lenfest Communications, Inc. BB- 8.250 02/15/08 400,000 398,386
Time Warner, Inc. BBB 7.250 10/15/17 500,000 500,000
BUILDING MATERIALS - 0.7%
American Standard, Inc. BB- 7.375 04/15/05 250,000 235,409
</TABLE>
See Notes To Financial Statements
22
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- ------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
CHEMICAL - 1.2%
Air Products and Chemicals, Inc. A 8.750 04/15/21 $ 250,000 $ 260,036
Witco Corporation BBB 7.750 04/01/23 200,000 168,017
DIVERSIFIED - 3.3%
Norsk Hydro ASA A 9.000 04/15/12 500,000 543,165
Service Corp. International BBB- 7.700 04/15/09 200,000 157,972
Tyco International Group SA A- 6.125 01/15/09 500,000 442,500
ELECTRIC & GAS UTILITIES - 9.1%
Calpine Corporation BB+ 7.625 04/15/06 550,000 523,557
Carolina Power & Light Company A 8.200 07/01/22 500,000 487,720
Duquesne Light Company BBB+ 7.550 06/15/25 250,000 226,763
Florida Power Corporation AA- 6.875 02/01/08 70,000 67,728
Long Island Lighting Company A- 8.200 03/15/23 250,000 241,627
Monongahela Power A+ 8.375 07/01/22 500,000 502,384
Ontario Hydro AA- 7.450 03/31/13 500,000 495,313
PG&E Corporation AA- 8.375 05/01/25 250,000 250,733
Potomac Edison Company A+ 7.750 02/01/23 95,000 91,025
Texas Utilities Company BBB+ 7.875 03/01/23 250,000 235,602
ENTERTAINMENT - 1.3%
Viacom, Inc. BBB- 7.500 07/15/23 500,000 457,281
FINANCIAL SERVICES - 4.0%
Fairfax Financial Holdings BBB+ 8.250 10/01/15 250,000 235,000
General Electric Capital Corporation AAA 8.000 08/20/14 250,000 244,229
Household Finance Corporation A 6.375 08/01/10 500,000 451,622
Sears Roebuck Acceptance Corp. A- 6.875 10/15/17 500,000 453,190
FOOD PROCESSING - 1.6%
Archer Daniels Midland Company AA- 7.125 03/01/13 100,000 95,784
Nabisco, Inc. BBB 7.050 07/15/07 500,000 469,985
FOREIGN GOVERNMENT - 2.8%
Province of Nova Scotia A- 7.250 07/27/13 500,000 499,375
Province of Quebec A+ 7.125 02/09/24 500,000 464,224
GROCERY - 0.7%
Great Atlantic & Pacific Tea Co. BBB- 7.700 01/15/04 250,000 242,551
</TABLE>
See Notes To Financial Statements
23
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- ------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
HOMEBUILDING - 1.4%
Kaufman & Broad Home Corp. BB+ 7.750 10/15/04 $ 250,000 $ 235,872
U.S. Home Corporation BB- 8.875 02/15/09 250,000 228,846
HOTEL / GAMING - 4.5%
Harrah's Operating Co., Inc. BB+ 7.875 12/15/05 500,000 472,884
HMH Properties, Inc. BB 8.450 12/01/08 250,000 240,938
Mirage Resorts, Inc. BBB 6.750 08/01/07 500,000 444,858
Park Place Entertainment Corp. BB+ 7.875 12/15/05 400,000 378,307
INDUSTRIAL SERVICES - 0.6%
Coinmach Corporation B 11.750 11/15/05 200,000 208,915
INSURANCE - 3.8%
Ace INA Holdings A- 8.300 08/15/06 250,000 254,278
Aetna Services, Inc. A 7.125 08/15/06 500,000 481,869
Allstate Corporation A+ 7.500 06/15/13 250,000 244,920
CIGNA Corporation A 8.250 01/01/07 100,000 103,149
CNA Financial Corporation A- 6.950 01/15/18 250,000 215,021
MACHINERY - 0.6%
Caterpillar, Inc. A+ 9.000 04/15/06 100,000 107,159
Deere & Company A+ 8.950 06/15/19 100,000 105,500
MEDICAL SERVICES - 1.4%
Tenet Healthcare Corporation BB+ 8.000 01/15/05 500,000 480,301
NATURAL GAS - 2.1%
Columbia Energy Group BBB+ 7.320 11/28/10 500,000 473,941
Enron Corporation A 7.750 04/15/23 250,000 234,168
NEWSPAPER - 1.6%
Hollinger International, Inc. BB 8.625 03/15/05 500,000 494,245
Knight-Ridder, Inc. A 9.875 04/15/09 50,000 58,234
OILFIELD SERVICES - 1.8%
Offshore Logistics, Inc. BB 7.875 01/15/08 150,000 141,000
Parker Drilliing Company B+ 9.750 11/15/06 250,000 244,397
Pride International, Inc. BB 9.375 05/01/07 250,000 249,863
</TABLE>
See Notes To Financial Statements
24
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- ------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
PACKAGING & CONTAINERS - 1.1%
Owens-Illinois, Inc. BB+ 8.100 05/15/07 $ 400,000 $ 382,069
PAPER & FOREST PRODUCTS - 1.3%
Weyerhaeuser Company A 6.950 08/01/17 500,000 458,962
PETROLEUM - 3.7%
Kerr-McGee Corporation BBB 7.000 11/01/11 500,000 471,520
Louisiana Land & Exploration Co. A- 7.650 12/01/23 200,000 190,357
Ocean Energy, Inc. BB- 8.875 07/15/07 250,000 247,545
Phillips Petroleum Company A- 6.650 07/15/18 400,000 355,102
RAILROAD - 1.1%
Burlington Northern Santa Fe BBB+ 8.750 02/25/22 250,000 264,903
Missouri Pacific Railroad Co. A- 9.400 12/15/00 100,000 102,298
RECREATION - 0.7%
Speedway Motorsports, Inc. B+ 8.500 08/15/07 250,000 233,661
RENTAL AUTO / EQUIPMENT - 0.5%
Hertz Corporation A- 6.625 05/15/08 200,000 187,308
RETAIL STORE - 1.1%
Michaels Stores, Inc. BB- 10.875 06/15/06 350,000 367,500
SECURITIES BROKERAGE - 4.8%
Bear Stearns Companies, Inc. A 7.000 07/06/18 250,000 221,381
Lehman Brothers Holdings, Inc. A 8.500 08/01/15 500,000 519,363
Merrill Lynch & Company, Inc. AA- 6.875 11/15/18 500,000 454,751
Morgan Stanley Dean Witter AA 7.250 10/15/23 500,000 449,547
SEMICONDUCTOR - 1.3%
Applied Materials, Inc. A- 7.125 10/15/17 500,000 463,632
STEEL - 1.2%
AK Steel Corporation BB 9.125 12/15/06 400,000 406,870
</TABLE>
See Notes To Financial Statements
25
<PAGE>
ADVANCE CAPITAL I, INC. - BOND FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES AND CREDIT PRINCIPAL MARKET
REPURCHASE AGREEMENT RATING COUPON MATURITY AMOUNT VALUE
- ---------------------------- ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS SERVICE - 7.4%
AT & T Corporation AA- 8.125 07/15/24 $ 250,000 $ 242,698
Global Crossings Ltd. BB 9.625 05/15/08 500,000 498,216
GTE Corporation A 8.750 11/01/21 500,000 537,632
MasTec, Inc. BB- 7.750 02/01/08 350,000 339,500
New York Telephone Company A+ 7.250 02/15/24 500,000 450,708
Sprint Capital Corp. BBB+ 6.900 05/01/19 500,000 457,073
TEXTILE - 0.9%
Interface, Inc. BB+ 7.300 04/01/08 150,000 137,250
WestPoint Stevens, Inc. BB 7.875 06/15/08 200,000 188,000
TOBACCO - 0.3%
Philip Morris Companies, Inc. A 6.375 02/01/06 100,000 90,984
TRANSPORTATION - 2.0%
Gulfmark Offshore, Inc. BB- 8.750 06/01/08 250,000 235,444
Sea Containers BB- 7.875 02/15/08 500,000 450,000
U.S. GOVERNMENT - 3.3%
U.S. Treasury - Bond 7.875 02/15/21 1,000,000 1,117,344
-------------
TOTAL FIXED-INCOME SECURITIES - 97.3%
(Cost $34,327,289) 33,438,351
REPURCHASE AGREEMENT - 0.3%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, 01/03/00 100,773
-------------
TOTAL INVESTMENTS IN SECURITIES - 97.6%
(Cost $34,428,062) $ 33,539,124
=============
</TABLE>
See Notes To Financial Statements
26
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- -------------------------------------------- --------------- ---------------
<S> <C> <C>
ADVERTISING - 0.6%
Catalina Marketing Corporation* 2,100 $ 243,075
Harte-Hanks, Inc. 3,000 65,250
Interpublic Group of Companies, Inc. 2,800 161,525
Lamar Advertising Company* 2,200 133,238
Omnicom Group, Inc. 1,500 150,000
Young & Rubicam, Inc. 3,700 261,775
AEROSPACE / DEFENSE - 0.8%
Boeing Company 9,740 403,601
General Dynamics Corporation 4,700 247,925
Honeywell International, Inc. 5,500 317,281
Lockheed Martin Corporation 6,000 131,250
United Technologies Corporation 4,400 286,000
AIR TRANSPORT - 0.1%
Air Express International Corp. 2,400 77,550
Southwest Airlines 4,000 64,500
APPAREL - 0.2%
Cintas Corporation 1,900 100,937
Quiksilver, Inc.* 4,500 69,750
VF Corporation 6,100 183,000
AUTO PARTS - 0.2%
Borg-Warner Automotive, Inc. 2,000 81,000
Dana Corporation 4,600 137,712
Genuine Parts Company 8,000 198,500
AUTO & TRUCK - 0.5%
Ford Motor Company 7,400 394,512
General Motors Corporation 5,400 392,512
BANK - 4.3%
Amsouth Bancorporation 8,232 158,980
Banc One Corporation 15,260 488,320
Bank of America Corporation 14,613 733,390
Bank of New York Company, Inc. 8,100 324,000
Chase Manhattan Corporation 9,680 752,015
City National Corporation 3,100 102,106
Community First Bankshares, Inc. 4,000 63,000
Fifth Third Bancorp 5,000 366,875
First Security Corporation 8,000 204,250
First Tennessee National Corporation 11,600 330,600
First Union Corporation 11,600 382,075
Firstar Corporation 10,500 221,812
Fleet Boston Financial Corporation 9,016 313,869
J.P. Morgan & Company 1,500 189,938
Mellon Bank Corporation 18,300 623,344
National City Corporation 6,500 153,969
North Fork Bancorporation 5,500 95,563
Northern Trust Corporation 3,400 180,200
PNC Bank Corporation 4,000 178,000
State Street Corporation 2,400 175,350
U.S. Bancorp 6,900 164,306
U.S. Trust Corporation 2,400 192,450
Wachovia Corporation 2,500 170,000
Wells Fargo Company 11,130 450,069
Wilmington Trust Corporation 3,500 168,875
Zions Bancorporation 1,500 88,781
BEVERAGE - 0.7%
Anheuser-Busch Companies, Inc. 7,400 524,475
Brown-Forman Corporation 4,000 229,000
Diageo PLC-ADR 4,800 153,600
PepsiCo, Inc. 9,000 317,250
BIOTECHNOLOGY - 1.3%
Amgen, Inc.* 3,400 204,212
Biogen, Inc.* 2,000 169,000
Human Genome Sciences, Inc.* 1,700 259,462
Idec Pharmaceuticals Corporation* 2,000 196,500
Immunex Corporation* 2,600 284,700
Incyte Pharmaceuticals, Inc.* 2,400 144,000
</TABLE>
See Notes To Financial Statements
27
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- --------------------------------------------- ---------------- ---------------
<S> <C> <C>
BIOTECHNOLOGY - 1.3% (Continued)
Millennium Pharmaceuticals, Inc.* 3,000 $ 366,000
PE Corp-Celera Genomics Group* 3,000 447,000
Protein Design Labs, Inc.* 1,000 70,000
BROADCASTING / CABLE TV - 1.7%
AMFM, Inc.* 2,400 187,800
Clear Channel Communications* 2,000 178,500
Cox Communications, Inc.* 3,432 176,748
Cumulus Media, Inc.* 3,400 172,550
Emmis Communications Corporation* 2,600 324,066
Entercom Communications Corporation* 2,300 152,375
Hispanic Broadcasting Corporation* 1,600 147,550
Infinity Broadcasting Corporation* 8,437 305,314
The Walt Disney Company 13,000 380,250
Time Warner, Inc. 2,000 144,625
Univision Communications, Inc.* 3,300 337,219
USA Networks, Inc.* 2,800 154,700
Westwood One, Inc.* 2,200 167,200
Young Broadcasting, Inc.* 1,500 76,500
BUILDING MATERIALS - 0.5%
Armstrong World Industries, Inc. 2,500 83,437
Dycom Industries, Inc.* 2,500 110,156
Huttig Building Products, Inc.* 2,333 11,521
Martin Marietta Materials 5,000 205,000
Masco Corporation 7,000 177,625
Modine Manufacturing Company 7,300 182,500
CHEMICAL - 1.5%
Cytec Industries, Inc.* 7,500 172,500
duPont, E.I. de Nemours & Co. 7,000 461,125
Ecolab, Inc. 4,300 168,237
Imperial Chemical Industries Plc 8,000 340,500
Lilly Industries, Inc. 2,500 33,594
MacDermid, Inc. 2,900 119,081
Rohm & Haas Company 11,000 447,563
Sherwin-Williams Company 9,500 199,500
Sigma-Aldrich Corporation 2,600 78,163
Union Carbide Corporation 2,100 140,175
Valspar Corporation 3,600 150,750
WD-40 Company 8,600 190,275
COMPUTER & PERIPHERALS - 1.7%
Cisco Systems, Inc.* 1,900 203,537
Comverse Technology, Inc.* 1,200 173,700
Diebold, Inc. 2,400 56,400
EMC Corporation* 2,000 218,500
Gateway, Inc.* 1,400 100,887
Hewlett-Packard Company 6,100 693,875
Microchip Technology, Inc.* 1,500 102,656
National Computer Systems, Inc. 2,900 109,113
Network Appliance, Inc.* 4,800 398,700
Synopsys, Inc.* 2,000 133,500
VERITAS Software Corporation* 3,900 558,188
Visual Networks, Inc.* 1,500 118,875
COMPUTER SOFTWARE & SERVICES - 4.1%
Adobe Systems, Inc. 2,400 161,400
Affiliated Computer Services, Inc.* 2,000 92,000
Automatic Data Processing, Inc. 8,000 431,000
BARRA, Inc.* 2,500 79,375
BEA Systems, Inc.* 1,500 104,906
BISYS Group, Inc.* 2,500 163,125
BMC Software, Inc.* 4,000 319,750
Cadence Design Systems, Inc.* 3,700 88,800
Check Point Software Technologies Ltd.* 1,800 357,750
Citrix Systems, Inc.* 3,600 442,800
CMGI, Inc.* 1,200 332,250
CNET, Inc.* 2,500 141,875
Compuware Corporation* 8,000 298,000
Concord Communications, Inc.* 1,500 66,562
DST Systems, Inc.* 1,500 114,469
Electronic Arts, Inc.* 2,000 168,000
FactSet Research Systems, Inc. 2,000 159,250
</TABLE>
See Notes To Financial Statements
28
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------------- -------------- ---------------
<S> <C> <C>
COMPUTER SOFTWARE & SERVICES - 4.1% (Continued)
First Data Corporation 4,500 $ 221,906
Great Plains Software, Inc.* 1,500 112,125
IMS Health Incorporated 3,700 100,594
Intuit, Inc.* 5,100 305,681
Iss Group, Inc.* 2,400 170,700
Keane, Inc.* 1,500 48,187
Legato Systems, Inc.* 3,000 206,438
Lycos Inc.* 2,300 182,994
Mercury Interactive Corporation* 2,000 215,875
National Data Corporation 800 27,150
National Instruments Corporation* 3,200 122,400
Network Associates, Inc.* 2,800 74,725
Oracle Corporation* 3,080 345,153
Progress Software Corporation* 3,300 187,275
Psinet, Inc.* 2,200 135,850
SEI Investments Company 2,100 249,933
Shared Medical Systems Corporation 900 45,844
SunGard Data Systems, Inc.* 3,000 71,250
Symantec Corporation* 3,000 175,875
Transaction Systems Architects, Inc.* 3,000 84,000
Visio Corporation* 1,500 71,250
WebTrends Corporation* 1,000 81,000
Whittman-Hart, Inc.* 2,700 144,788
Wind River Systems, Inc.* 3,000 110,250
DIVERSIFIED - 1.4%
Corning, Inc. 3,500 451,281
Crane Company 10,500 208,687
Danaher Corporation 1,500 72,375
Eaton Corporation 2,000 145,250
Illinois Tool Works 3,000 202,687
Minnesota Mining & Manufacturing 4,300 420,863
PPG Industries, Inc. 7,100 444,194
Roper Industries, Inc. 3,500 132,344
Textron, Inc. 3,000 230,063
Viad Corp. 4,400 122,650
DRUG - 3.0%
Abbott Laboratories 9,875 358,586
American Home Products Corp. 12,800 502,400
Astrazeneca Plc 5,500 229,625
BioChem Pharma, Inc.* 4,000 87,000
Biomatrix, Inc.* 2,000 38,500
Bristol-Myers Squibb Company 14,000 898,625
Cardinal Health, Inc. 2,700 129,262
Elan Corporation PLC-ADR* 3,000 88,500
Express Scripts, Inc.* 1,500 96,000
Gilead Sciences, Inc.* 1,700 92,012
Glaxo Wellcome Plc 4,000 223,500
MedImmune, Inc.* 1,700 281,988
Merck & Company, Inc. 12,000 806,250
Pharmacia & Upjohn, Inc. 7,000 315,000
QLT Phototherapeutics, Inc.* 2,000 117,500
Schering-Plough Corporation 7,000 296,625
Shire Pharmaceuticals Group PLC-ADR* 2,000 58,250
Warner-Lambert Company 5,500 450,656
Watson Pharmaceuticals, Inc.* 1,600 57,300
DRUGSTORE - 0.1%
CVS Corporation 1,600 63,800
Duane Reade, Inc.* 3,000 82,687
ELECTRIC & GAS UTILITIES - 2.6%
AES Corporation* 2,800 209,300
Carolina Power & Light Company 4,700 143,056
CMS Energy Corporation 6,300 196,481
Consolidated Edison Co. of N.Y. 5,400 186,300
Constellation Energy Group 5,700 165,300
Dominion Resources, Inc.* 7,000 274,750
Duke Energy Corporation 8,935 447,867
Edison International 10,500 274,969
FirstEnergy Corp. 4,500 102,094
Florida Progress Corporation 7,500 317,344
GPU, Inc. 3,600 107,100
</TABLE>
See Notes To Financial Statements
29
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- --------------------------------------------- ---------------- ---------------
<S> <C> <C>
ELECTRIC & GAS UTILITIES - 2.6% (Continued)
Hawaiian Electric Industries, Inc. 9,100 $ 262,762
New Century Energies, Inc. 4,700 142,763
PG & E Corporation 6,000 123,000
Reliant Energy, Inc. 12,800 292,800
Southern Company 14,000 329,000
TECO Energy, Inc. 16,200 300,713
Texas Utilities Company 9,300 330,731
Unicom Corporation 7,000 234,500
ELECTRICAL EQUIPMENT - 1.1%
Emerson Electric Company 6,000 344,250
General Electric Company 7,500 1,160,625
Hubbell Inc.-Class B 3,200 87,200
Littlefuse, Inc.* 3,500 84,930
Molex, Inc. 2,928 132,492
Rayovac Corporation* 4,300 81,163
ELECTRONICS - 1.1%
Flextronics International Ltd.* 2,400 110,400
Jabil Circuit, Inc.* 2,000 146,000
Macromedia* 2,000 146,250
Micrel, Inc.* 2,300 130,956
Sanmina Corporation* 1,900 189,763
Sawtek, Inc.* 2,000 133,125
SCI Systems, Inc.* 2,000 164,375
Symbol Technologies, Inc. 6,750 429,047
Teradyne, Inc.* 3,000 198,000
Waters Corporation* 3,000 159,000
ENTERTAINMENT - 0.1%
Premier Parks, Inc.* 3,300 95,288
ENVIRONMENTAL - 0.0%
Republic Services, Inc.* 3,000 42,750
FINANCIAL SERVICES - 2.9%
American Express Company 5,000 831,250
Associates First Capital Corporation 5,334 146,352
Capital One Financial Corporation 1,500 72,281
Citigroup, Inc. 16,600 924,412
Concord EFS, Inc.* 4,500 115,875
Dun & Bradstreet Corporation 11,700 345,150
Eaton Vance Corporation 3,500 133,000
Fannie Mae 11,800 736,762
Federated Investors 5,500 110,344
Finova Group, Inc. 2,000 71,000
Franklin Resources, Inc. 3,800 121,837
Freddie Mac 6,000 282,375
Morgan Stanley Dean Witter & Co. 4,000 571,000
Paychex, Inc. 5,062 202,480
Providian Financial Corporation 1,400 127,488
Waddell & Reed Financial, Inc. 5,000 135,625
FOOD PROCESSING - 1.0%
Campbell Soup Company 5,000 193,437
ConAgra, Inc. 5,622 127,549
General Mills, Inc. 9,800 350,350
Heinz (H.J.) Company 6,000 238,875
Hershey Foods Corp. 2,800 132,825
Kellogg Company 3,000 92,437
Quaker Oats Company 2,000 131,250
Ralston-Ralston Purina Group 6,000 167,250
Sara Lee Corporation 9,000 198,563
Tootsie Roll Industries, Inc. 3,422 112,712
FOOD WHOLESALERS - 0.1%
U.S. Foodservice* 7,000 117,250
FOREIGN TELECOMMUNICATIONS - 0.4%
BCE, Inc. 4,400 396,825
Reuters Group PLC-ADR 2,733 220,861
</TABLE>
See Notes To Financial Statements
30
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- -------------------------------------------- ----------------- ---------------
<S> <C> <C>
FURNITURE / HOME FURNISHINGS - 0.1%
HON INDUSTRIES, Inc. 3,300 $ 72,394
Leggett & Platt, Inc. 4,100 87,894
GROCERY - 0.1%
Albertson's, Inc. 6,900 222,525
HOMEBUILDING - 0.0%
Lennar Corporation 3,200 52,000
HOUSEHOLD PRODUCTS - 0.5%
Clorox Company 5,500 277,062
Newell Rubbermaid, Inc.* 7,000 203,000
Unilever N.V. 4,000 217,750
Whirlpool Corporation 3,500 227,719
INDUSTRIAL SERVICES - 0.6%
ACNielsen Corporation* 4,800 118,200
Apollo Group, Inc.* 3,050 61,191
DeVry, Inc.* 5,300 99,375
Equifax, Inc. 4,000 94,250
Iron Mountain, Inc.* 3,500 137,594
ITT Educational Services, Inc.* 2,200 33,962
Manpower, Inc. 3,000 112,875
Quintiles Transnational Corporation* 2,500 46,719
Robert Half International, Inc.* 2,250 64,266
Servicemaster Company 14,000 172,375
INSURANCE - 2.0%
Ace Ltd. 3,000 50,062
AFLAC, Inc. 4,800 226,500
Ambac Financial Group, Inc. 2,600 135,687
American General Corporation 6,500 493,187
American International Group, Inc. 5,000 540,625
E. W. Blanch Holdings, Inc. 1,500 91,875
Hartford Financial Services Group, Inc. 4,000 189,500
Lincoln National Corporation 5,000 200,000
Marsh & McLennan Companies, Inc. 6,600 631,538
MBIA, Inc. 3,000 158,438
Medical Assurance, Inc.* 3,500 74,156
MGIC Investment Corporation 3,800 228,713
Mutual Risk Management Ltd. 6,666 112,072
Protective Life Corporation 4,100 130,431
Radian Group, Inc. 2,200 105,050
XL Capital Ltd. 1,900 98,563
MACHINERY - 0.6%
Caterpillar, Inc. 3,600 169,425
Cognex Corporation* 3,100 120,900
Deere & Company 4,200 182,175
Donaldson Company, Inc. 4,800 115,500
Dover Corporation 7,000 317,625
IDEX Corporation 3,000 91,125
Parker-Hannifin Corporation 1,575 80,817
MEDICAL SERVICES - 0.1%
Lincare Holdings, Inc.* 2,000 69,375
Quest Diagnostics, Inc.* 3,500 106,969
Renal Care Group, Inc.* 3,000 70,125
MEDICAL SUPPLIES - 1.4%
Allergan, Inc. 1,900 94,525
ArthroCare Corporation* 1,400 85,400
Baxter International, Inc. 8,000 502,500
Becton Dickinson & Company 6,500 175,094
Biomet, Inc. 3,000 120,000
Boston Scientific Corporation* 2,800 61,250
Guidant Corporation 2,500 117,500
Hillenbrand Industries 5,500 174,281
Johnson & Johnson 3,518 328,054
Medical Manager Corporation* 1,000 84,250
Medtronic, Inc. 5,500 200,406
ResMed, Inc.* 2,800 116,900
Stryker Corporation 1,600 111,400
Sybron International Corp.* 4,000 98,750
VISX, Inc.* 1,500 77,625
Wesley Jessen Visioncare* 500 18,938
</TABLE>
See Notes To Financial Statements
31
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- --------------------------------------------- ---------------- ---------------
<S> <C> <C>
METAL FABRICATING - 0.6%
Alcoa, Inc. 8,500 $ 705,500
Kaydon Corporation 7,500 201,094
Lincoln Electric Holdings, Inc. 4,500 92,813
NATURAL GAS - 0.4%
Enron Corporation 10,800 479,250
The Williams Companies, Inc. 8,500 259,781
NEWSPAPER - 0.2%
Central Newspapers, Inc. 2,000 78,750
Gannett Company, Inc. 3,800 309,937
OFFICE EQUIPMENT & SUPPLIES - 0.6%
Avery Dennison Corporation 2,200 160,325
Pitney Bowes, Inc. 14,000 676,375
Xerox Corporation 10,300 233,681
OILFIELD SERVICES - 1.0%
Baker Hughes, Inc. 14,000 294,875
BJ Services Company* 3,900 163,069
Cooper Cameron Corporation* 3,400 166,387
Halliburton Company 8,000 322,000
Schlumberger Ltd. 6,680 374,915
Smith International, Inc.* 3,800 188,813
Veritas DGC, Inc.* 4,500 63,000
Weatherford International, Inc.* 2,800 111,825
PACKAGING & CONTAINER - 0.1%
Sealed Air Corporation* 2,000 103,625
PAPER & FOREST PRODUCTS - 0.8%
Consolidated Papers, Inc. 6,000 190,875
Georgia-Pacific Group 4,800 243,600
International Paper Company 8,000 451,500
Weyerhaeuser Company 6,400 459,600
PETROLEUM - 3.2%
Apache Corporation 2,700 99,731
BP Amoco PLC-ADR 17,792 1,055,288
Chevron Corporation 8,300 718,987
Devon Energy Corporation 1,500 49,312
Exxon Mobil Corporation 25,801 2,078,593
Repsol SA-ADR 10,200 237,150
Royal Dutch Petroleum Company 13,600 823,650
Texaco, Inc. 2,300 124,919
PRECISION INSTRUMENT - 0.4%
Dionex Corporation* 2,000 82,375
KLA-Tencor Corporation* 1,500 167,063
Millipore Corporation 5,000 193,125
PE Corp-PE Biosystems Group 2,000 240,625
PRINTING - 0.1%
Valassis Communications, Inc.* 3,900 164,775
PUBLISHING - 0.5%
McGraw-Hill Companies, Inc. 8,000 493,000
Meredith Corporation 3,700 154,244
Value Line, Inc. 5,700 205,200
RAILROAD - 0.3%
Kansas City Southern Ind., Inc. 4,500 335,812
Norfolk Southern Corporation 8,100 166,050
REAL ESTATE INVESTMENT MANAGEMENT - 0.1%
Jones Lang LaSalle, Inc.* 4,200 49,875
Security Capital Group, Inc. - Class B* 5,400 67,500
Trammell Crow Company* 6,500 75,563
REAL ESTATE INVESTMENT TRUST - 1.2%
Archstone Communities Trust 16,400 336,200
CarrAmerica Realty Corporation 6,000 128,250
</TABLE>
See Notes To Financial Statements
32
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------------- -------------- ---------------
<S> <C> <C>
REAL ESTATE INVESTMENT TRUST - 1.2% (Continued)
Duke Realty Investments, Inc. 10,200 $ 198,900
Equity Office Properties Trust 10,700 263,487
Equity Residential Properties Trust 2,000 85,375
Prologis Trust 18,908 363,979
Rouse Company 9,800 208,250
Simon Property Group, Inc. 6,400 146,800
Weingarten Realty Investors 5,200 202,475
RECREATION - 0.3%
Brunswick Corporation 6,000 133,500
Carnival Corporation 4,000 191,250
Harley-Davidson, Inc. 4,000 256,250
RESTAURANT - 0.2%
McDonald's Corporation 5,000 201,563
Starbucks Corporation* 8,000 194,000
RETAIL STORE - 1.9%
Bed Bath & Beyond, Inc.* 8,000 278,000
BJ's Wholesale Club, Inc.* 3,400 124,100
CDW Computer Centers, Inc.* 2,000 157,250
Circuit City Stores, Inc. 3,000 135,187
Dayton Hudson Corporation 6,000 440,625
Dollar General Corporation 12,206 277,686
Dollar Tree Stores, Inc.* 2,200 106,562
Family Dollar Stores 4,000 65,250
Harcourt General, Inc. 2,500 100,625
Kohl's Corporation* 1,000 72,188
Lands' End, Inc.* 2,200 76,450
Linens 'n Things, Inc.* 1,800 53,325
Ross Stores, Inc. 5,000 89,688
Staples, Inc.* 3,300 68,475
Tandy Corporation 5,000 245,938
The Men's Wearhouse, Inc.* 2,250 66,094
Tiffany & Company 4,600 410,550
TJX Companies, Inc. 4,400 89,925
Williams-Sonoma, Inc.* 3,500 161,000
Zale Corporation* 2,200 106,425
SECURITIES BROKERAGE - 0.6%
A.G. Edwards, Inc. 5,500 176,344
Bear Stearns Companies, Inc. 5,176 221,274
Charles Schwab Corporation 2,500 95,625
Investment Technology Group, Inc. 4,626 132,997
Legg Mason, Inc. 3,600 130,500
Merrill Lynch & Company, Inc. 2,400 199,950
Raymond James Financial, Inc. 3,500 65,188
SEMICONDUCTOR - 2.9%
Altera Corporation* 5,000 247,812
Analog Devices, Inc.* 2,900 269,700
Applied Materials, Inc.* 1,500 190,031
Applied Micro Circuits Corporation* 1,900 241,775
Broadcom Corporation* 500 136,187
Dallas Semiconductor Corporation 2,000 128,875
Intel Corporation 9,000 740,813
Lattice Semiconductor Corporation* 4,100 193,213
Linear Technology Corporation 2,400 171,750
Maxim Integrated Products, Inc.* 5,600 264,250
Motorola, Inc. 2,500 368,125
National Semiconductor Corp.* 2,800 119,875
PMC-Sierra, Inc.* 2,000 320,625
Qlogic Corporation* 1,000 159,875
SDL, Inc.* 2,000 436,000
Texas Instruments, Inc. 3,600 347,850
Vitesse Semiconductor Corporation* 5,000 262,188
Xilinx, Inc.* 8,400 381,938
STEEL - 0.3%
Nucor Corporation 7,800 427,538
TELECOMMUNICATIONS EQUIPMENT - 0.7%
ADC Telecommunications, Inc.* 2,000 145,125
American Tower Corporation 4,300 131,419
E-Tek Dynamics, Inc.* 1,500 201,937
General Instrument Corporation* 1,800 153,000
JDS Uniphase Corporation* 2,200 354,887
Pinnacle Holdings, Inc.* 3,000 127,125
Tellabs, Inc.* 1,300 83,444
</TABLE>
See Notes To Financial Statements
33
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ---------------------------------------------- --------------- ---------------
<S> <C> <C>
TELECOMMUNICATIONS SERVICE - 3.6%
Allegiance Telecom, Inc.* 1,500 $ 138,375
ALLTEL Corporation 8,286 685,149
Bell Atlantic Corporation 8,200 504,812
BellSouth Corporation 10,000 468,125
Crown Castle International Corporation* 5,300 170,262
GTE Corporation 11,500 811,469
Intermedia Communications, Inc.* 3,400 131,962
McleodUSA, Inc.* 5,000 294,375
Nextel Communications, Inc.* 2,700 278,438
NEXTLINK Communications, Inc.* 3,000 249,188
NTL Incorporated* 1,000 124,750
SBC Communications, Inc. 18,896 921,180
Sprint Corporation 6,400 430,800
United States Cellular Corporation* 1,100 111,031
Viatel, Inc.* 3,300 176,963
Western Wireless Corporation* 3,200 213,600
Winstar Communications, Inc.* 2,000 150,500
THRIFT - 0.1%
Charter One Financial, Inc. 3,034 58,025
JSB Financial, Inc. 1,500 77,812
TOBACCO - 0.3%
Philip Morris Companies, Inc. 15,400 354,200
UST, Inc. 9,000 226,688
TOILETRIES / COSMETICS - 1.3%
Avon Products, Inc. 12,000 396,000
Colgate-Palmolive Company 8,000 520,000
Gillette Company 6,000 247,125
Int'l Flavors & Fragrances, Inc. 5,000 188,125
Kimberly-Clark Corporation 9,800 641,288
Proctor & Gamble Company 2,400 262,950
TOYS - 0.2%
Hasbro, Inc. 12,250 231,984
Mattel, Inc. 3,125 41,016
TRANSPORT SERVICES - 0.2%
C.H. Robinson Worldwide, Inc. 3,000 119,250
Expeditors International of Washington, Inc. 4,200 184,012
WATER UTILITY - 0.1%
American Water Works Co., Inc. 8,500 180,625
Azurix Corporation* 6,000 53,625
------------
TOTAL COMMON STOCK - 59.6%
(Cost $59,875,604) $ 100,863,578
============
</TABLE>
* Securities are non-income producing
See Notes To Financial Statements
34
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- --------------------------------------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
AEROSPACE / DEFENSE - 1.1%
B.F. Goodrich Company A- 6.800 02/01/18 $ 500,000 $ 436,859
Lockheed Martin Corporation BBB- 7.650 05/01/16 750,000 686,487
Raytheon Company BBB- 6.750 08/15/07 750,000 694,063
AIR TRANSPORT - 0.2%
Federal Express Corporation BBB+ 8.760 05/22/15 350,000 376,102
AUTO & TRUCK - 1.5%
Ford Motor Company A+ 6.500 08/01/18 1,000,000 881,561
General Motors Corporation A 7.700 04/15/16 1,000,000 997,917
TRW, Inc. BBB 6.250 01/15/10 750,000 660,236
BANK - 3.6%
Banc One Corporation A- 8.100 03/01/02 500,000 510,162
BankBoston Corporation A 7.375 09/15/06 500,000 499,255
Chase Manhattan Corp. A 6.750 08/15/08 750,000 710,068
Comerica Bank A- 7.125 12/01/13 750,000 764,378
First Union Corporation A- 8.000 08/15/09 500,000 499,815
MBNA America Bank, N.A. BBB 6.750 03/15/08 500,000 463,345
Republic New York Corporation A 7.000 03/22/11 500,000 465,745
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 1,000,000 959,080
Wachovia Corporation A+ 6.375 02/01/09 750,000 693,784
BEVERAGE - 0.6%
Anheuser-Busch Companies, Inc. A+ 7.125 07/01/17 1,000,000 937,310
BUILDING MATERIALS - 0.3%
Masco Corporation A- 7.125 08/15/13 500,000 474,170
CHEMICAL - 1.2%
Monsanto Company A 8.875 12/15/09 1,000,000 1,095,788
Witco Corporation BBB 6.125 02/01/06 500,000 436,277
Witco Corporation BBB 7.750 04/01/23 500,000 420,042
COMPUTER & PERIPHERALS - 0.6%
Dell Computer Corporation BBB+ 6.550 04/15/08 1,000,000 935,926
</TABLE>
See Notes To Financial Statements
35
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 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. BBB+ 6.500 04/15/08 $ 500,000 $ 449,646
DIVERSIFIED - 1.7%
Norsk Hydro ASA A 9.000 04/15/12 1,000,000 1,086,329
Service Corp. International BBB- 7.700 04/15/09 500,000 394,929
Tenneco, Inc. BBB- 8.125 06/15/17 500,000 530,000
Tyco International Group SA A- 6.375 06/15/05 1,000,000 932,540
ELECTRIC & GAS UTILITIES - 4.4%
Dayton Power & Light Company AA- 8.150 01/15/26 500,000 496,026
Delmarva Power & Light Co. A 8.500 02/01/22 500,000 496,454
Duke Energy Corporation AA- 6.375 03/01/08 500,000 467,261
Duquesne Light Company BBB+ 7.550 06/15/25 1,000,000 907,054
Enserch Corporation BBB 6.564 07/01/05 500,000 478,250
Florida Power Corporation AA- 8.000 12/01/22 500,000 492,672
Hydro-Quebec A+ 7.000 03/01/05 500,000 489,365
Jersey Central Power & Light Co. A+ 6.750 11/01/25 750,000 634,451
Potomac Edison Company A+ 7.750 05/01/25 500,000 477,619
Texas Utilities Company BBB+ 7.875 03/01/23 750,000 706,807
Union Electric Company AA- 8.750 12/01/21 500,000 517,316
Virginia Electric Power A 8.000 03/01/04 500,000 511,539
Western Resources, Inc. BBB 6.875 08/01/04 750,000 706,993
FINANCIAL SERVICES - 4.5%
American General Finance Corp. A+ 8.125 08/15/09 1,000,000 1,030,867
BHP Finance USA Ltd. A- 7.250 03/01/16 500,000 464,043
Dow Capital BV A 8.700 05/15/22 250,000 251,962
Fletcher Challenge Capital Canada, Inc. BBB 8.250 06/20/16 500,000 510,000
General Electric Capital Corporation AAA 8.300 09/20/09 500,000 529,853
General Electric Capital Corporation AAA 8.000 08/20/14 500,000 488,458
Household Finance Corporation A 6.375 08/01/10 1,000,000 903,244
IBM Credit Corporation A+ 6.750 12/24/07 500,000 475,372
Morgan Stanley Dean Witter A+ 6.750 10/15/13 750,000 686,296
Morgan Stanley Dean Witter A+ 6.750 10/15/13 250,000 228,765
Santander Finance Issuances A 6.375 02/15/11 1,000,000 883,829
Sears Roebuck Acceptance Corp. A- 6.875 10/15/17 1,250,000 1,132,975
</TABLE>
See Notes To Financial Statements
36
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- --------------------------------------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
FOOD PROCESSING - 0.6%
Nabisco, Inc. BBB 7.050 07/15/07 $ 1,000,000 $ 939,971
FOOD WHOLESALERS - 0.1%
Sysco Corporation AA- 7.250 04/15/07 250,000 248,136
FOREIGN GOVERNMENT - 1.5%
Province of Nova Scotia A- 7.250 07/27/13 1,000,000 998,750
Province of Quebec A+ 7.125 02/09/24 1,000,000 928,448
Province of Saskatchewan A 9.375 12/15/20 525,000 614,928
GROCERY - 0.3%
SUPERVALU INC. BBB+ 6.640 06/09/06 500,000 466,577
HOTEL / GAMING - 0.7%
Hilton Hotels Corporation BBB- 7.200 12/15/09 750,000 735,000
Mirage Resorts, Inc. BBB 7.250 08/01/17 500,000 421,159
INDUSTRIAL SERVICES - 0.3%
ServiceMaster Company BBB 7.100 03/01/18 500,000 434,631
INSURANCE - 1.8%
Ace INA Holdings A- 8.300 08/15/06 750,000 762,833
Allstate Corporation A+ 7.500 06/15/13 1,000,000 979,680
CIGNA Corporation A 8.250 01/01/07 750,000 773,616
MBIA, Inc. AA 9.375 02/15/11 500,000 568,498
MACHINERY - 0.6%
Case Corporation BBB- 7.250 01/15/16 500,000 500,000
Clark Equipment Company A- 8.000 05/01/23 500,000 488,858
MEDICAL SUPPLIES - 0.6%
Cardinal Health, Inc. A 6.000 01/15/06 500,000 461,106
Johnson & Johnson AAA 8.720 11/01/24 550,000 588,802
METALS & MINING - 0.3%
Placer Dome, Inc. BBB 7.750 06/15/15 500,000 480,000
</TABLE>
See Notes To Financial Statements
37
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING COUPON MATURITY AMOUNT VALUE
- --------------------------------------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NATURAL GAS - 1.2%
Columbia Energy Group BBB+ 7.320 11/28/10 $ 1,000,000 $ 947,882
Enron Corporation BBB+ 7.000 08/15/23 750,000 644,405
Southwestern Energy Company BBB+ 6.700 12/01/05 500,000 476,093
NEWSPAPER - 0.1%
Knight-Ridder, Inc. A 9.875 04/15/09 100,000 116,468
OFFICE EQUIPMENT & SUPPLIES - 0.1%
Xerox Corporation A 9.750 03/15/00 200,000 201,243
OILFIELD SERVICES - 0.8%
Noble Drilling Corporation A- 7.500 03/15/19 750,000 696,628
Smith International, Inc. BBB+ 7.000 09/15/07 750,000 716,564
PACKAGING & CONTAINER - 0.2%
Crown Cork & Seal Company, Inc. BBB 8.375 01/15/05 390,000 398,876
PAPER & FOREST PRODUCTS - 0.4%
Weyerhaeuser Company A 6.950 08/01/17 750,000 688,444
PETROLEUM - 1.2%
Atlantic Richfield Company A 8.500 04/01/12 750,000 806,092
Louisiana Land & Exploration Co. A- 7.625 04/15/13 750,000 737,102
Phillips Petroleum Company A- 8.860 05/15/22 500,000 512,851
PUBLISHING - 0.3%
News America Holdings BBB- 8.000 10/17/16 500,000 500,795
RAILROAD - 0.5%
Burlington Northern Santa Fe BBB+ 8.750 02/25/22 750,000 794,709
RENTAL AUTO / EQUIPMENT - 0.3%
Hertz Corporation A- 6.625 05/15/08 500,000 468,269
RESTAURANT - 0.3%
Darden Restaurants, Inc. BBB+ 7.125 02/01/16 500,000 464,508
</TABLE>
See Notes To Financial Statements
38
<PAGE>
ADVANCE CAPITAL I, INC. - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- -----------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES AND CREDIT PRINCIPAL MARKET
REPURCHASE AGREEMENT RATING COUPON MATURITY AMOUNT VALUE
- --------------------------------------------- ------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
RETAIL STORE - 0.9%
Dayton Hudson Corporation A- 9.625 02/01/08 $ 200,000 $ 223,461
Dillard's, Inc. BBB 7.850 10/01/12 750,000 695,155
J.C. Penney Company BBB+ 8.250 08/15/22 500,000 442,653
Pep Boys-Manny, Moe & Jack BBB- 7.000 06/01/05 350,000 322,206
SECURITIES BROKERAGE - 1.3%
Bear Stearns Companies, Inc. A 7.250 10/15/06 750,000 730,700
Lehman Brothers Holdings, Inc. A 8.500 08/01/15 750,000 779,045
Merrill Lynch & Company, Inc. AA- 7.190 08/07/12 750,000 686,517
SEMICONDUCTOR - 0.5%
Applied Materials, Inc. A- 7.125 10/15/17 1,000,000 927,263
TELECOMMUNICATIONS SERVICE - 3.6%
AT&T Corporation AA- 6.000 03/15/09 750,000 681,761
Bell Canada A+ 9.500 10/15/10 750,000 846,322
GTE Corporation A 6.460 04/15/08 500,000 469,504
MCI WorldCom, Inc. A- 7.750 03/15/24 750,000 707,725
Michigan Bell Telephone AAA 7.500 02/15/23 750,000 702,135
New York Telephone Company A+ 7.375 12/15/11 1,000,000 956,367
Sprint Capital Corp. BBB+ 6.900 05/01/19 1,000,000 914,147
Vodafone Airtouch PLC A 7.500 07/15/06 1,000,000 997,561
TOBACCO - 0.2%
Philip Morris Companies, Inc. A 9.000 01/01/01 400,000 404,888
U.S. GOVERNMENT - 0.6%
U.S. Treasury - Bond 6.625 05/15/07 1,000,000 1,003,593
-----------------
TOTAL FIXED-INCOME SECURITIES - 39.3%
(Cost $70,305,607) 66,475,960
REPURCHASE AGREEMENT - 0.2%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, due 01/03/00 404,459
TOTAL COMMON STOCK - 59.6%
(Cost $59,875,604) 100,863,578
-----------------
TOTAL INVESTMENTS IN SECURITIES - 99.1%
(Cost $130,585,670) $ 167,743,997
================
</TABLE>
See Notes To Financial Statements
39
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT MATURITY PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING DATE COUPON AMOUNT VALUE
- -------------------------------------------- --------- ------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C>
ADVERTISING - 1.6%
Lamar Advertising Company B 12/01/06 9.625 $ 700,000 $ 721,057
News Corporation Ltd. BB+ 02/15/06 8.750 675,000 688,500
Outdoor Systems, Inc. BB+ 06/15/07 8.875 1,000,000 1,031,500
Valassis Communications BBB- 01/15/09 6.625 1,000,000 915,475
AEROSPACE / DEFENSE - 1.4%
AAR Corporation BBB 10/15/03 7.250 500,000 478,927
Boeing Co. AA- 04/01/12 9.750 1,000,000 1,164,370
Lockheed Martin Corporation BBB- 03/15/23 7.875 500,000 490,101
Lockheed Martin Corporation BBB- 04/15/23 7.750 1,000,000 880,720
AIR TRANSPORT - 2.8%
AMR Corporation BBB- 03/15/00 9.750 100,000 100,551
AMR Corporation BBB- 08/01/12 9.000 1,000,000 1,056,068
Continental Airlines, Inc. BB- 12/15/05 8.000 1,230,000 1,129,813
Delta Air Lines, Inc. BBB- 02/01/11 10.375 500,000 576,425
Federal Express Corporation BBB+ 01/01/15 7.630 1,000,000 984,863
Northwest Airlines, Inc. BB 03/15/07 8.700 1,000,000 956,270
United Airlines, Inc. BB+ 08/15/21 9.750 500,000 563,984
United Airlines, Inc. BB+ 07/15/21 10.250 500,000 565,276
AUTO PARTS - 0.9%
Federal-Mogul Corporation BB+ 07/01/06 7.750 1,000,000 985,000
Titan Wheel International, Inc. B+ 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 2,075,461
General Motors Corporation A 06/15/24 8.100 1,000,000 1,009,120
Lear Corporation BB+ 05/15/09 8.110 1,000,000 941,519
BANK - 7.2%
ABN AMRO Bank NV AA- 12/01/26 7.300 500,000 454,391
Banc One Corporation A- 07/15/25 7.750 1,000,000 974,792
Bank of America Corp. A 07/15/15 10.200 1,000,000 1,216,266
Bank of America Corp. A 03/01/09 7.125 1,000,000 970,860
BankBoston Corporation A- 12/01/05 6.625 1,000,000 950,983
Bankers Trust Corporation A+ 11/15/15 7.500 1,500,000 1,423,833
Chase Manhattan Corp. A 10/15/08 6.125 1,000,000 905,899
Citicorp A+ 10/15/11 7.250 1,000,000 968,252
Comerica Bank A- 12/01/13 7.125 1,000,000 1,019,170
Dresdner Bank - New York AA- 09/15/15 7.250 1,000,000 939,210
</TABLE>
See Notes To Financial Statements
40
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 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)
First Union Corporation A- 08/15/09 8.000 $ 500,000 $ 499,815
JPM Capital Trust II A 02/01/27 7.950 1,000,000 953,630
KeyCorp BBB+ 03/15/06 6.750 1,000,000 957,813
Republic New York Corporation A 05/15/21 9.125 1,000,000 1,088,514
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 1,000,000 956,920
BEVERAGE - 0.7%
Anheuser-Busch Companies, Inc. A+ 07/01/17 7.125 1,500,000 1,405,964
BROADCASTING / CABLE TV - 7.5%
CBS Corporation BBB- 08/01/12 8.625 750,000 793,735
Century Communications Corp. BB- 03/01/05 9.500 1,000,000 1,001,705
Century Communications Corp. BB- 02/15/02 9.750 250,000 250,415
Chancellor Media Corporation B 06/15/07 8.750 1,250,000 1,281,606
Charter Communications Holdings LLC B+ 04/01/09 8.625 1,500,000 1,400,425
Comcast Corp. BBB- 05/15/05 9.375 500,000 528,970
Comcast Corp. BBB- 01/15/08 9.500 500,000 515,000
Continental Cablevision, Inc. BBB 08/01/13 9.500 500,000 550,395
CSC Holdings, Inc. BB+ 02/15/18 7.875 500,000 476,318
CSC Holdings, Inc. BB- 05/15/06 9.875 750,000 789,480
Fox Family Worldwide, Inc. B 11/01/07 9.250 1,250,000 1,148,276
Jones Intercable, Inc. BBB- 04/01/07 8.875 500,000 523,925
Jones Intercable, Inc. BB+ 03/01/08 10.500 700,000 725,566
Lenfest Communications, Inc. BB+ 11/01/05 8.375 1,000,000 1,022,320
Rogers Cablesystems Ltd. BB+ 03/15/05 10.000 500,000 547,380
Rogers Cablesystems Ltd. BB+ 12/01/07 10.000 500,000 533,750
Sinclair Broadcast Group, Inc. B 09/30/05 10.000 1,000,000 986,983
Turner Broadcasting System, Inc. BBB 07/01/13 8.375 750,000 774,952
Time Warner, Inc. BBB 01/15/13 9.125 1,000,000 1,090,440
Young Broadcasting, Inc. B 06/15/07 8.750 750,000 708,611
BUILDING MATERIALS - 0.9%
American Standard, Inc. BB- 02/01/08 7.375 1,000,000 910,027
Building Materials Corp. BB 10/15/07 8.000 1,000,000 921,097
CHEMICAL - 1.6%
Eastman Chemical Company BBB+ 01/15/24 7.250 1,000,000 970,000
Union Carbide Chemicals & Plastics Co. BBB 04/01/23 7.875 600,000 586,960
Witco Corporation BBB 02/01/06 6.125 500,000 436,277
Witco Corporation BBB 04/01/23 7.750 1,500,000 1,260,125
</TABLE>
See Notes To Finanical Statements
41
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT MATURITY PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING DATE COUPON AMOUNT VALUE
- -------------------------------------------- --------- ------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C>
COMPUTER & PERIPHERALS - 0.6%
Computer Associates International, Inc. BBB+ 04/15/05 6.375 $ 1,250,000 $ 1,162,835
COMPUTER SOFTWARE & SERVICES - 0.5%
International Business Machines Corp. A+ 11/01/19 8.375 1,000,000 1,086,225
DIVERSIFIED - 1.8%
Mark IV Industries, Inc. BB- 09/01/07 7.500 1,000,000 907,986
Norsk Hydro ASA A 04/15/12 9.000 1,500,000 1,629,494
Service Corp. International BBB- 04/15/09 7.700 1,550,000 1,224,280
ELECTRIC & GAS UTILITIES - 8.7%
Alabama Power Company A+ 12/01/24 9.000 1,000,000 1,040,330
Calpine Corporation BB+ 04/01/08 7.875 1,000,000 952,386
Dayton Power & Light Company AA- 01/15/26 8.150 1,000,000 992,051
Duke Energy Corporation AA- 08/01/25 6.750 1,000,000 868,785
Hydro-Quebec A+ 01/15/22 8.400 850,000 894,459
Indianapolis Power & Light Co. AA- 02/01/24 7.050 1,000,000 901,875
Jersey Central Power & Light Co. A+ 11/01/25 6.750 1,000,000 845,935
New Orleans Public Service, Inc. BBB 03/01/23 8.000 600,000 580,444
Northern Illinois Gas Company AA 08/15/21 8.875 1,000,000 1,032,569
Oklahoma Gas & Electric Company A+ 10/15/25 7.300 1,500,000 1,372,458
PG&E Corporation AA- 03/01/26 7.250 1,000,000 906,771
Potomac Edison Company A+ 06/01/24 8.000 1,000,000 977,593
Potomac Electric Power Company A 06/01/21 9.000 1,000,000 1,020,779
Public Service Electric & Gas A- 09/01/24 7.000 1,000,000 894,738
Rocheseter Gas & Electric Corporation A- 04/01/21 9.375 1,000,000 1,038,073
Southern California Gas Company AA- 10/01/21 8.750 1,000,000 1,021,750
Virginia Electric Power A 10/01/24 8.625 1,000,000 1,005,867
West Penn Power Company A+ 08/01/24 8.125 1,000,000 1,000,160
Western Resources, Inc. A- 04/15/23 7.650 1,000,000 923,122
ELECTRONICS - 0.4%
Koninklijke Philips Electronics N.V. BBB+ 08/15/13 7.250 1,000,000 935,035
ENTERTAINMENT - 0.5%
Viacom, Inc. BBB- 08/01/22 8.250 1,000,000 978,954
ENVIRONMENTAL - 1.3%
American Eco Corporation B 05/15/08 9.625 1,000,000 600,000
Laidlaw, Inc. BBB 05/15/23 8.250 1,000,000 927,029
Laidlaw, Inc. BBB 04/15/07 11.500 1,000,000 1,108,974
</TABLE>
See Notes To Financial Statements
42
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 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 $ 577,635
BHP Finance USA Ltd. A- 03/01/16 7.250 1,000,000 928,085
CRA Finance, Ltd. AA- 12/01/13 7.125 500,000 465,918
Dow Capital BV A 05/15/22 8.700 1,000,000 1,007,849
Fairfax Financial Holdings BBB+ 10/01/15 8.250 1,500,000 1,410,000
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 1,000,000 903,244
Morgan Stanley Dean Witter A+ 10/15/13 6.750 1,250,000 1,143,827
Sears Roebuck Acceptance Corp. A- 10/15/17 6.875 500,000 453,190
FOOD PROCESSING - 1.1%
Chiquita Brands Int'l, Inc. B+ 01/15/04 9.625 1,000,000 750,000
ConAgra, Inc. BBB 03/01/21 9.750 500,000 574,791
Nabisco, Inc. BBB 06/15/15 7.550 1,000,000 945,329
FOREIGN GOVERNMENT - 2.1%
Province of Newfoundland A- 10/22/22 8.650 1,000,000 1,060,000
Province of Nova Scotia A- 07/27/13 7.250 1,000,000 998,750
Province of Quebec A+ 12/01/26 8.625 1,115,000 1,214,653
Province of Saskatchewan A 02/01/13 8.000 1,000,000 1,032,560
GROCERY - 0.9%
Great Atlantic & Pacific Tea Co. BBB- 04/15/07 7.750 1,000,000 913,417
Kroger Company BBB- 03/01/08 7.450 1,000,000 972,798
HOMEBUILDING - 3.8%
Beazer Homes USA, Inc. B+ 04/01/08 8.875 1,000,000 923,101
D.R. Horton, Inc. BB 04/15/06 10.000 1,000,000 1,017,932
Engle Homes, Inc. B 02/01/08 9.250 1,000,000 920,000
Kaufman & Broad Home Corp. BB+ 10/15/04 7.750 1,000,000 943,490
MDC Holdings, Inc. BB 02/01/08 8.375 1,500,000 1,381,007
Ryland Group, Inc. B+ 06/01/04 9.625 1,000,000 971,939
Standard Pacific Corp. BB 06/15/07 8.500 1,000,000 957,922
U.S. Home Corporation BB- 08/15/07 8.880 1,000,000 926,556
HOTEL / GAMING - 4.9%
Boyd Gaming Corporation BB- 10/01/03 9.250 1,000,000 1,020,000
Harrah's Operating Co., Inc. BB+ 12/15/05 7.875 1,500,000 1,418,652
Hilton Hotels Corporation BBB- 12/15/09 7.200 1,500,000 1,470,000
HMH Properties, Inc. BB 12/01/08 8.450 1,000,000 963,750
Host Marriott Travel Plaza BB- 05/15/05 9.500 1,000,000 999,902
</TABLE>
See Notes To Financial Statements
43
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 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 - 4.9% (Continued)
Mandalay Resort Group BB+ 07/15/13 7.625 $ 450,000 $ 378,170
Mirage Resorts, Inc. BBB 02/01/08 6.750 1,500,000 1,326,123
Prime Hospitality Corp. BB 01/15/06 9.250 1,000,000 981,039
Rank Group Finance PLC BBB- 01/15/18 7.125 1,000,000 950,000
Starwood Hotels & Resorts BB+ 11/15/15 7.375 1,000,000 786,463
INDUSTRIAL SERVICES - 0.5%
Coinmach Corporation B 11/15/05 11.750 1,000,000 1,044,576
INSURANCE - 4.6%
Ace INA Holdings A- 08/15/06 8.300 1,000,000 1,017,110
Aetna Services, Inc. A 01/15/17 8.000 824,000 832,240
American Financial Group, Inc. BBB+ 12/15/07 7.125 1,000,000 975,000
CIGNA Corporation A 03/01/23 7.650 500,000 480,290
CNA Financial Corporation A- 01/15/18 6.950 500,000 430,042
CNA Financial Corporation A- 11/15/23 7.250 1,000,000 950,000
Continental Corporation BBB- 08/15/12 8.375 600,000 603,216
Loews Corporation AA- 10/15/23 7.000 1,000,000 867,658
MBIA, Inc. AA 10/01/22 8.200 2,000,000 1,966,511
Metropolitan Life Insurance Co.* A+ 11/01/23 7.450 550,000 494,836
New York Life Insurance Company AA- 12/15/23 7.500 1,000,000 980,000
MACHINERY - 0.2%
Clark Equipment Company A- 05/01/23 8.000 500,000 488,858
MEDICAL SERVICES - 0.7%
HEALTHSOUTH Corporation BBB- 04/01/01 9.500 500,000 492,010
Tenet Healthcare Corporation BB- 01/15/07 8.625 1,000,000 973,250
MEDICAL SUPPLIES - 0.3%
Cardinal Health, Inc. A 02/15/04 6.500 700,000 675,183
METALS & MINING - 1.2%
Alcan Aluminum Ltd. A- 01/15/22 8.875 1,000,000 1,062,500
Inco Ltd. BB+ 06/15/22 9.600 500,000 470,000
Placer Dome, Inc. BBB 06/15/15 7.750 1,000,000 960,000
MORTGAGED BACK SECURITIES - 2.5%
Ginnie Mae AAA 12/20/28 6.500 1,896,194 1,772,941
Ginnie Mae AAA 01/20/29 6.500 2,866,882 2,680,535
Ginnie Mae AAA 11/20/28 6.500 934,507 873,765
</TABLE>
See Notes To Financial Statements
44
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT MATURITY PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING DATE COUPON AMOUNT VALUE
- -------------------------------------------- --------- ------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C>
NATURAL GAS - 2.6%
AmeriGas Partners, L.P. BB+ 04/15/07 10.125 $ 1,200,000 $ 1,229,117
ANR Pipeline Company BBB+ 11/01/21 9.625 1,000,000 1,147,459
Columbia Energy Group BBB+ 11/28/10 7.320 1,000,000 947,882
Ferrellgas Partners, L.P. B+ 06/15/06 9.375 500,000 491,923
Louis Dreyfus Natural Gas Corp. BB+ 06/15/04 9.250 1,000,000 1,011,095
TransCanada Pipelines Ltd. A- 04/01/23 7.875 600,000 580,603
NEWSPAPER - 0.5%
Hollinger International, Inc. BB- 02/01/06 9.250 500,000 494,521
Hollinger International, Inc. BB- 03/15/07 9.250 500,000 491,967
OILFIELD SERVICES - 2.4%
Husky Oil, Ltd. BBB 11/15/16 7.550 1,000,000 907,638
Kerr-McGee Corporation BBB 11/01/11 7.000 1,500,000 1,369,719
Offshore Logistics, Inc. BB 01/15/08 7.875 1,200,000 1,128,000
Parker Drilliing Company B+ 11/15/06 9.750 750,000 733,192
Pride International, Inc. BB 05/01/07 9.375 1,000,000 999,453
PACKAGING & CONTAINERS - 1.2%
Crown Cork & Seal Company, Inc. BBB 04/15/23 8.000 1,500,000 1,405,583
Owens-Illinois Inc. BB+ 05/15/07 8.100 750,000 716,380
Owens Illinois, Inc. BB+ 05/15/18 7.800 500,000 429,127
PAPER & FOREST PRODUCTS - 1.5%
Bowater, Inc. BBB 10/15/12 9.500 700,000 769,257
Champion International Corporation BBB 09/01/23 7.625 1,500,000 1,363,086
Georgia-Pacific Corporation BBB- 07/01/22 9.125 1,000,000 1,017,835
PETROLEUM - 2.1%
Clark USA, Inc. B 12/01/05 10.875 500,000 375,000
Louisiana Land & Exploration Co. A- 04/15/13 7.625 1,000,000 982,803
Ocean Energy Inc. BB+ 07/01/05 7.625 500,000 477,025
Ocean Energy, Inc. BB- 08/01/05 8.625 1,000,000 991,722
Phillips Petroleum Company A- 01/01/23 8.490 1,000,000 1,004,139
Ultramar Diamond Shamrock Corp. BBB 04/01/23 8.000 600,000 570,755
PUBLISHING - 0.8%
News America Holdings BBB- 08/10/18 8.250 1,000,000 1,007,347
Primedia, Inc. BB- 06/01/04 10.250 750,000 769,841
</TABLE>
See Notes To Financial Statements
45
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
S & P
CREDIT MATURITY PRINCIPAL MARKET
FIXED INCOME SECURITIES RATING DATE COUPON AMOUNT VALUE
- -------------------------------------------- --------- ------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C>
RAILROAD - 0.9%
Kansas City Southern Industries, Inc. BBB- 07/01/22 8.800 $ 500,000 $ 485,784
Union Pacific Corporation BBB- 05/01/25 8.350 1,500,000 1,449,187
RECREATION - 1.4%
Brunswick Corporation BBB+ 09/01/23 7.375 975,000 984,750
Speedway Motorsports, Inc. B+ 08/15/07 8.500 1,000,000 934,646
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 1,000,000 936,538
RESTAURANT - 0.7%
Darden Restaurants, Inc. BBB+ 02/01/16 7.125 1,500,000 1,393,525
RETAIL STORE - 4.6%
Dayton Hudson Corporation A- 12/01/22 8.500 1,500,000 1,514,508
Dillard's Inc. BBB 10/01/12 7.850 1,500,000 1,390,311
J.C. Penney Company BBB+ 04/01/17 7.950 1,000,000 885,092
May Department Stores A+ 07/15/26 8.300 1,000,000 998,166
Michaels Stores, Inc. BB- 06/15/06 10.875 1,000,000 1,050,000
Pep Boys-Manny, Moe & Jack BBB- 06/01/05 7.000 1,000,000 920,590
Sears, Roebuck & Company A- 11/01/11 9.375 1,000,000 1,120,428
The Limited, Inc. BBB+ 03/15/23 7.500 1,000,000 817,734
Venator Group, Inc. BB 06/01/00 7.000 1,000,000 995,255
SECURITIES BROKERAGE - 2.4%
Bear Stearns Companies, Inc. A 01/15/04 6.625 1,000,000 969,138
Goldman Sachs Group LP A+ 03/01/13 8.000 1,000,000 993,658
Lehman Brothers, Inc. A 05/15/05 11.625 1,023,000 1,188,255
Morgan Stanley Dean Witter A+ 10/01/13 7.000 1,000,000 936,534
Paine Webber Group, Inc. BBB+ 02/15/14 7.625 1,000,000 943,496
SEMICONDUCTOR - 0.6%
Applied Materials, Inc. A- 10/15/17 7.125 1,250,000 1,159,079
SHOE - 0.5%
Brown Shoe Company, Inc. BB 10/15/06 9.500 1,000,000 1,006,658
STEEL - 0.9%
AK Steel Corporation BB 12/15/06 9.125 1,000,000 1,017,175
USX Corporation BBB- 02/15/12 9.375 750,000 829,013
</TABLE>
See Notes To Financial Statements
46
<PAGE>
ADVANCE CAPITAL I, INC. - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
S & P
FIXED INCOME SECURITIES AND CREDIT MATURITY PRINCIPAL MARKET
REPURCHASE AGREEMENT RATING DATE COUPON AMOUNT VALUE
- -------------------------------------------- --------- ------- -------- ------------ --------------
<S> <C> <C> <C> <C> <C>
TELECOMMUNICATIONS SERVICE - 5.3%
AT & T Corporation AA- 07/15/24 8.125 $ 800,000 $ 776,633
AT&T Corporation AA- 01/15/22 8.125 750,000 729,204
GCI, Inc. B+ 08/01/07 9.750 1,000,000 967,528
Global Crossings Ltd. BB 05/15/08 9.625 1,000,000 996,432
GTE Corporation A 11/01/21 8.750 1,500,000 1,612,895
Illinois Bell Telephone Company AAA 03/15/24 7.250 1,425,000 1,297,225
MasTec, Inc. BB- 02/01/08 7.750 1,500,000 1,455,000
MCI WorldCom, Inc. A- 03/15/24 7.750 1,000,000 943,634
New Jersey Bell Telephone AA 06/01/12 7.375 1,000,000 966,250
New York Telephone Company A+ 12/15/11 7.375 500,000 478,184
SBC Communications Capital Corp. AA 07/15/25 7.250 1,000,000 906,759
TEXTILE - 0.5%
WestPoint Stevens Inc. BB 06/15/05 7.875 1,000,000 950,000
TOBACCO - 0.2%
Philip Morris Companies, Inc. A 01/15/17 8.375 547,000 509,888
TRANSPORTATION - 0.8%
Gulfmark Offshore, Inc. BB- 06/01/08 8.750 750,000 706,334
Sea Containers BB- 12/01/04 12.500 1,000,000 1,020,000
U.S. GOVERNMENT - 0.5%
U.S. Treasury - Bond 08/15/26 6.750 1,000,000 1,004,375
----------------
TOTAL FIXED INCOME SECURITIES - 97.7%
(Cost $214,010,341) 204,890,450
REPURCHASE AGREEMENT - 0.3%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, due 01/03/00 642,552
----------------
TOTAL INVESTMENTS IN SECURITIES - 98.0%
(Cost $214,652,893) $ 205,533,002
================
</TABLE>
* Security exempt from registration under Rule 144A of the
Securities Act of 1933
See Notes To Financial Statements
47
<PAGE>
ADVANCE CAPITAL I, INC. - CORNERSTONE STOCK FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
COMMON STOCK SHARES VALUE
- ----------------------------------------------- ------------ ------------
<S> <C> <C>
AUTO & TRUCK - 0.9%
Ford Motor Company 8,500 $ 453,156
BANK - 2.5%
Bank of America Corporation 16,300 818,056
Wells Fargo Company 11,800 477,162
BEVERAGE - 1.6%
Coca-Cola Company 14,600 850,450
BIOTECHNOLOGY - 1.3%
Amgen, Inc.* 8,600 516,537
Biogen, Inc.* 2,100 177,450
BROADCASTING / CABLE TV - 2.5%
Comcast Corporation 6,200 313,488
The Walt Disney Company 11,500 336,375
Time Warner, Inc. 9,000 650,813
CHEMICAL - 0.8%
duPont, E.I. de Nemours & Co. 6,400 421,600
COMPUTER & PERIPHERALS - 15.1%
Apple Computer, Inc.* 1,500 154,219
Cisco Systems, Inc.* 26,300 2,817,387
Compaq Computer Corporation 9,400 254,387
Dell Computer Corporation* 21,100 1,076,100
EMC Corporation* 6,300 688,275
Hewlett-Packard Company 5,700 648,375
International Business Machines Corp. 11,400 1,229,775
Sun Microsystems, Inc.* 11,800 913,763
VERITAS Software Corporation* 850 121,656
COMPUTER SOFTWARE & SERVICES - 13.5%
America Online, Inc.* 14,800 1,122,950
At Home Corporation* 2,800 120,050
CMGI, Inc.* 1,300 359,938
Compuware Corporation* 2,400 89,400
Microsoft Corporation* 41,400 4,833,450
Oracle Corporation* 3,800 425,838
Siebel Systems, Inc.* 1,200 100,800
DIVERSIFIED - 0.4%
Tyco International, Ltd. 5,200 202,800
DRUG - 10.0%
Abbott Laboratories 8,400 305,025
American Home Products Corp. 14,600 573,050
Bristol-Myers Squibb Company 16,200 1,039,837
Eli Lilly & Company 7,400 492,100
Merck & Company, Inc. 15,500 1,041,406
Pfizer, Inc. 29,500 956,906
Schering-Plough Corporation 9,900 419,513
Warner-Lambert Company 5,700 467,044
ELECTRICAL EQUIPMENT - 5.5%
General Electric Company 18,700 2,893,825
FINANCIAL SERVICES - 3.9%
Citigroup, Inc. 21,550 1,200,066
Fannie Mae 6,100 380,869
Morgan Stanley Dean Witter & Co. 3,200 456,800
FOREIGN TELECOMMUNICATIONS - 1.7%
Ericsson (LM) Telephone-ADR-Class B 13,400 880,212
INSURANCE - 2.0%
American International Group, Inc. 9,825 1,062,328
MEDICAL SUPPLIES - 2.2%
Johnson & Johnson 10,200 951,150
Medtronic, Inc. 6,200 225,913
</TABLE>
See Notes To Financial Statements
48
<PAGE>
ADVANCE CAPITAL I, INC. - CORNERSTONE STOCK FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
- ---------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK AND MARKET
REPURCHASE AGREEMENT SHARES VALUE
- ----------------------------------------- ----------- ----------------
<S> <C> <C>
PETROLEUM - 5.7%
BP Amoco PLC-ADR 1,588 $ 94,188
Exxon Mobil Corporation 24,372 1,963,469
Royal Dutch Petroleum Company 14,900 902,381
RESTAURANT - 0.7%
McDonald's Corporation 9,600 387,000
RETAIL STORE - 5.9%
Home Depot, Inc. 15,000 1,031,250
Wal-Mart Stores, Inc. 29,500 2,039,188
SECURITIES BROKERAGE - 0.3%
Charles Schwab Corporation 4,600 175,950
SEMICONDUCTOR - 7.8%
Applied Materials, Inc.* 1,450 183,697
Intel Corporation 28,000 2,304,750
Linear Technology Corporation 2,100 150,281
Maxim Integrated Products, Inc.* 4,000 188,750
Motorola, Inc. 4,600 677,350
Texas Instruments, Inc. 6,000 579,750
TELECOMMUNICATIONS EQUIPMENT - 3.9%
JDS Uniphase Corporation* 1,200 193,575
Lucent Technologies, Inc. 21,200 1,590,000
Tellabs, Inc.* 4,100 263,169
TELECOMMUNICATIONS SERVICE - 9.4%
AT&T Corporation 19,912 1,011,778
Bell Atlantic Corporation 10,100 621,781
BellSouth Corporation 12,500 585,156
Global Crossing Ltd.* 2,800 140,000
GTE Corporation 5,600 395,150
MCI WorldCom, Inc.* 15,900 843,694
Qwest Communications International, Inc.* 6,600 283,800
SBC Communications, Inc. 20,822 1,015,073
TOILETRIES / COSMETICS - 1.7%
Proctor & Gamble Company 7,900 865,544
----------------
TOTAL COMMON STOCK - 99.3%
(Cost $43,730,037) 52,007,018
REPURCHASE AGREEMENT - 2.5%
Fifth Third Bank 2 Party Repurchase
Agreement, 1.55%, 01/03/00 1,319,664
---------------
TOTAL INVESTMENTS IN SECURITIES - 101.8%
(Cost $45,049,701) $ 53,326,682
================
</TABLE>
* Securities are non-income producing
See Notes To Financial Statements
49
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
- ---------------------------------------------------
<TABLE>
<CAPTION>
EQUITY RETIREMENT CORNERSTONE
GROWTH BOND BALANCED INCOME STOCK
-------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities . . . . . . . . $ 114,850,941 $ 33,539,124 $ 167,743,997 $ 205,533,002 $ 53,326,682
Cash 204,311 64,489 146,571 48,024 212,079
Receivables . . . . . . . . . . . . . .
Dividends and interest . . . . . . . . . 24,156 781,559 1,495,648 4,347,254 22,126
Securities sold . . . . . . . . . . . . 256,719 0 93,327 0 0
Prepaid expenses . . . . . . . . . . . . 6,433 2,425 10,758 1,313 1,076
-------------- ------------- ------------- ------------- -------------
Total assets . . . . . . . . . . . . . . 115,342,560 34,387,597 169,490,301 209,929,593 53,561,963
LIABILITIES
Payable to affiliated entities . . . . . .
Investment advisory fees . . . . . . . . 61,195 10,814 96,185 87,967 16,387
Distribution fees . . . . . . . . . . . 1,540 468 2,278 2,813 710
Accounts payable and accrued expenses. . . 15,646 11,045 30,007 31,932 13,494
Securities purchased . . . . . . . . . . 749,279 0 143,448 0 1,175,763
Distributions payable . . . . . . . . . . 0 3,534 2,326 15,989 97
-------------- ------------- ------------- ------------- -------------
Total liabilities . . . . . . . . . . . . 827,660 25,861 274,244 138,701 1,206,451
-------------- ------------- ------------- ------------- -------------
Net assets . . . . . . . . . . . . . . . $ 114,514,900 $ 34,361,736 $ 169,216,057 $ 209,790,892 $ 52,355,512
============= ============= ============= ============= =============
NET ASSETS
Paid-in capital . . . . . . . . . . . . $ 61,508,419 $ 35,309,913 $ 132,055,751 $ 219,935,543 $ 44,129,119
Accumulated undistributed net realized
gain (loss) on investments . . . . . . . 18,255 (59,239) 1,979 (1,024,760) (50,588)
Net unrealized appreciation (depreciation)
in value of investments . . . . . . . . 52,988,226 (888,938) 37,158,327 (9,119,891) 8,276,981
-------------- ------------- ------------- ------------- -------------
Net assets . . . . . . . . . . . . . . . $ 114,514,900 $ 34,361,736 $ 169,216,057 $ 209,790,892 $ 52,355,512
============= ============= ============= ============== ============
SHARES OUTSTANDING . . . . . . . . . . . . 4,332,261 3,587,559 9,940,102 21,826,738 3,863,940
============= ============== ============ =============== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE . . . . . . . $ 26.43 $ 9.58 $ 17.02 $ 9.61 $ 13.55
============= ============== ============= ============== ===========
</TABLE>
See Notes To Financial Statements
50
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT CORNERSTONE
EQUITY BOND BALANCED INCOME STOCK
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest . . . . . . . . . . . . . . . $ 29,375 $ 983,475 $ 4,413,757 $ 17,193,925 $ 15,844
Dividends . . . . . . . . . . . . . . . 280,812 0 1,311,770 0 224,712
------------- ------------- ------------- ------------- -------------
Total investment income . . . . . . . . 310,187 983,475 5,725,527 17,193,925 240,556
EXPENSES
Paid to affiliates:
Investment advisory fees . . . . . . . 555,760 51,730 1,000,853 1,091,252 108,733
Distribution fees . . . . . . . . . . 198,486 24,270 357,447 545,626 67,958
Paid to others:
Custodial fees . . . . . . . . . . . 23,269 6,077 39,201 12,703 9,443
Directors fees and expenses . . . . . . 2,662 327 4,842 7,439 841
Professional fees . . . . . . . . . . 9,053 1,406 16,683 26,280 2,284
Shareholder reporting costs . . . . . . 16,659 2,371 30,422 52,113 4,886
Registration and filing fees. . . . . . 4,656 9,771 10,136 4,763 12,135
Other operating expenses . . . . . . . 5,747 978 13,212 36,428 3,636
------------- ------------- ------------- ------------- -------------
Total expenses . . . . . . . . . . . . 816,292 96,930 1,472,796 1,776,604 209,916
------------- ------------- ------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) (506,105) 886,545 4,252,731 15,417,321 30,640
REALIZED GAIN (LOSS) ON INVESTMENTS
Proceeds from securities sold . . . . . . 29,003,447 4,141,671 33,491,315 38,107,065 2,040,489
Cost of securities sold . . . . . . . . (15,518,562) (4,200,910) (24,337,911) (39,131,825) (2,091,077)
------------- ------------- ------------- ------------- -------------
Net realized gain (loss) on investment. . 13,484,885 (59,239) 9,153,404 (1,024,760) (50,588)
UNREALIZED GAIN (LOSS) ON INVESTMENTS
Appreciation, Beginning of year . . . . . 29,216,865 248,942 38,527,225 10,432,619 233,274
Appreciation (Depreciation), End of year. 52,988,226 (888,938) 37,158,327 (9,119,891) 8,276,981
------------- ------------- ------------- ------------- -------------
Net unrealized gain (loss) on investment. 23,771,361 (1,137,880) (1,368,898) (19,552,510) 8,043,707
------------- ------------- ------------- ------------- -------------
NET GAIN (LOSS) ON INVESTMENTS. . . . . . . 37,256,246 (1,197,119) 7,784,506 (20,577,270) 7,993,119
------------- ------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS . . . . . . . . . . . $ 36,750,141 $ (310,574)$ 12,037,237 $ (5,159,949)$ 8,023,759
============= ============= ============= ============= =============
</TABLE>
See Notes To Financial Statements
51
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
- -------------------------------------------------------
<TABLE>
<CAPTION>
EQUITY GROWTH BOND
------------------------------ -----------------------------
1999 1998 1999 1998
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) . . . . . . . . . . . . $ (506,105) $ (344,938) $ 886,545 $ 252,618
Net realized gain (loss) on investments . . . . . . . 13,484,885 (299,574) (59,239) 18,492
Net unrealized gain (loss) on investment. . . . . . . 23,771,361 10,064,361 (1,137,880) 33,482
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . . . 36,750,141 9,419,849 (310,574) 304,592
Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . . . 0 0 (886,545) (252,618)
Net realized gain on investments . . . . . . . . . . (13,167,056) 0 0 (18,492)
-------------- -------------- -------------- --------------
Total distributions to shareholders . . . . . . . . . (13,167,056) 0 (886,545) (271,110)
Share Transactions:
Net proceeds from sale of shares . . . . . . . . . . 17,779,839 10,851,525 32,473,007 184,096
Reinvestment of distributions . . . . . . . . . . . . 13,088,272 0 846,157 225,055
Cost of shares reacquired . . . . . . . . . . . . . (7,997,052) (6,542,846) (1,506,491) (899,446)
-------------- -------------- -------------- --------------
Net increase (decrease) derived from share transacti. 22,871,059 4,308,679 31,812,673 (490,295)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets . . . . . . . . 46,454,144 13,728,528 30,615,554 (456,813)
NET ASSETS
Beginning of year . . . . . . . . . . . . . . . . . 68,060,756 54,332,228 3,746,182 4,202,995
-------------- -------------- -------------- --------------
End of year . . . . . . . . . . . . . . . . . . . $ 114,514,900 $ 68,060,756 $ 34,361,736 $ 3,746,182
============== ============== ============== ==============
NUMBER OF SHARES
Sold . . . . . . . . . . . . . . . . . . . . . 778,469 605,020 3,299,723 17,285
Shares issued from reinvestment of distributions. . . 520,408 0 86,399 21,229
Reacquired . . . . . . . . . . . . . . . . . . . . (361,372) (360,707) (151,307) (85,145)
-------------- -------------- -------------- --------------
Net increase (decrease) in shares outstandin. . . . . 937,505 244,313 3,234,815 (46,631)
Outstanding:
Beginning of year . . . . . . . . . . . . . . . . 3,394,756 3,150,443 352,744 399,375
-------------- -------------- -------------- --------------
End of year . . . . . . . . . . . . . . . . . . . 4,332,261 3,394,756 3,587,559 352,744
============== ============== ============== ==============
</TABLE>
See Notes To Financial Statements
52
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS - Continued
YEARS ENDED DECEMBER 31, 1999 AND 1998
- ----------------------------------------------------------
<TABLE>
<CAPTION>
RETIREMENT
BALANCED INCOME
------------------------------------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income . . . . . . . . . . . . . . . $ 4,252,731 $ 3,296,711 $ 15,417,321 $ 14,506,674
Net realized gain (loss) on investments . . . . . . . 9,153,404 840,615 (1,024,760) 325,461
Net unrealized gain (loss) on investment. . . . . . . (1,368,898) 9,951,142 (19,552,510) (1,938,841)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets resulting
from operations . . . . . . . . . . . . . . . . . 12,037,237 14,088,468 (5,159,949) 12,893,294
Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . . . (4,252,731) (3,296,711) (15,417,321) (14,506,674)
Net realized gain on investments . . . . . . . . . . (9,151,425) (840,615) 0 (284,242)
------------- ------------- ------------- -------------
Total distributions to shareholders . . . . . . . . . (13,404,156) (4,137,326) (15,417,321) (14,790,916)
Share Transactions:
Net proceeds from sale of shares . . . . . . . . . . 48,211,699 25,495,015 18,057,451 29,094,377
Reinvestment of distributions . . . . . . . . . . . . 13,332,203 4,102,654 15,215,852 14,595,861
Cost of shares reacquired . . . . . . . . . . . . . (16,843,598) (13,087,598) (24,126,037) (21,082,826)
------------- ------------- ------------- -------------
Net increase derived from share transactions. . . . . 44,700,304 16,510,071 9,147,266 22,607,412
------------- ------------- ------------- -------------
Net increase (decrease) in net assets . . . . . . . . 43,333,385 26,461,213 (11,430,004) 20,709,790
NET ASSETS
Beginning of year . . . . . . . . . . . . . . . . . 125,882,672 99,421,459 221,220,896 200,511,106
------------- ------------- ------------- -------------
End of year . . . . . . . . . . . . . . . . . . . $ 169,216,057 $ 125,882,672 $ 209,790,892 $ 221,220,896
============== ============== ============== ==============
NUMBER OF SHARES
Sold . . . . . . . . . . . . . . . . . . . . . 2,778,565 1,559,384 1,760,916 2,736,189
Shares issued from reinvestment of distributions. . . 789,121 248,724 1,516,528 1,372,921
Reacquired . . . . . . . . . . . . . . . . . . . . (974,501) (797,921) (2,398,897) (1,985,302)
-------------- -------------- -------------- --------------
Net increase in shares outstanding. . . . . . . . . . 2,593,185 1,010,187 878,547 2,123,808
Outstanding:
Beginning of year . . . . . . . . . . . . . . . . 7,346,917 6,336,730 20,948,191 18,824,383
-------------- -------------- -------------- --------------
End of year . . . . . . . . . . . . . . . . . . 9,940,102 7,346,917 21,826,738 20,948,191
============================== =============================
</TABLE>
See Notes To Financial Statements
53
<PAGE>
ADVANCE CAPITAL I, INC.
STATEMENT OF CHANGES IN NET ASSETS - Continued
- -------------------------------------------------------
<TABLE>
<CAPTION>
CORNERSTONE
STOCK
-----------------------------
Year Partial Year
Ended Ended *
Dec. 31, 1999 Dec. 31, 1998
------------- -------------
<S> <C> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income . . . . . . . . . . . . . . . . $ 30,640 $ 2,901
Net realized gain (loss) on investments . . . . . . . . (50,588) 0
Net unrealized gain on investments . . . . . . . . . . 8,043,707 233,274
------------- -------------
Net increase in net assets resulting
from operations . . . . . . . . . . . . . . . . . 8,023,759 236,175
Distributions to Shareholders:
Net investment income . . . . . . . . . . . . . . . (30,640) (2,901)
Net realized gain on investments . . . . . . . . . . . 0 0
------------- -------------
Total distributions to shareholders . . . . . . . . . . (30,640) (2,901)
Share Transactions:
Net proceeds from sale of shares . . . . . . . . . . . 38,198,551 7,080,114
Reinvestment of distributions . . . . . . . . . . . . 30,541 2,901
Cost of shares reacquired . . . . . . . . . . . . . . (1,182,988) 0
------------- -------------
Net increase derived from share transactions. . . . . . 37,046,104 7,083,015
------------- -------------
Net increase in net assets . . . . . . . . . . . . . . 45,039,223 7,316,289
NET ASSETS
Beginning of period . . . . . . . . . . . . . . . . 7,316,289 0
------------- -------------
End of period . . . . . . . . . . . . . . . . . . . $ 52,355,512 $ 7,316,289
============== ==============
NUMBER OF SHARES
Sold . . . . . . . . . . . . . . . . . . . . . . 3,258,482 699,003
Shares issued from reinvestment of distributions. . . . 2,254 277
Reacquired . . . . . . . . . . . . . . . . . . . . . (96,076) 0
------------- -------------
Net increase in shares outstanding. . . . . . . . . . . 3,164,660 699,280
Outstanding:
Beginning of period . . . . . . . . . . . . . . . . 699,280 0
------------- -------------
End of period . . . . . . . . . . . . . . . . . . . 3,863,940 699,280
============= ==============
</TABLE>
* From December 17, 1998 (commencement of operations) to December 31, 1998.
See Notes To Financial Statements
54
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION OF THE COMPANY
Advance Capital I, Inc. (the COMPANY) is a Maryland
Corporation organized on March 6, 1987 and commenced operations
on August 5, 1987. The COMPANY is registered under the
Investment Company Act of 1940, as amended, as an open-end,
diversified management investment company (a mutual fund)
offering shares in the following portfolios: Equity Growth Fund,
Bond Fund, Balanced Fund, Retirement Income Fund and Cornerstone
Stock Fund.
NOTE 2. ACCOUNTING POLICIES
The preparation of financial statements in accordance
with generally accepted accounting principles requires management
to make estimates and assumptions that affect reported amounts and
disclosures in the financial statements. Actual results could
differ from these estimates.
The following is a summary of significant accounting policies
followed by the COMPANY.
SECURITY VALUATION
Securities for which exchange quotations are readily
available are valued at the last sale price at the close of business.
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.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions.
When a fund engages in such transactions, it is policy to require
the custodian bank to take possession of all securities held as
collateral in support of repurchase agreement investments. In
addition, the Fund monitors the market value of the underlying
collateral on a daily basis. If the seller defaults or if bankruptcy
proceedings are initiated with respect to the seller, the realization
or retention of the collateral may be subject to legal proceedings.
55
<PAGE>
NOTE 2. ACCOUNTING POLICIES (CONTINUED)
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.
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 distributions, if any, are
declared annually and paid in December. For 1999, distributions of net
realized capital gains of $13,167,056 and $9,151,425 were paid by the
Equity Growth and Balanced Funds, respectively.
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 specific identification 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
56
<PAGE>
NOTE 3. TRANSACTIONS WITH AFFILIATES (CONTINUED)
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 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, Bond, 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 $2,808,328
by MANAGEMENT for 1999. The COMPANY was charged distribution
fees of $1,193,787 by SERVICES for 1999. At December 31, 1999
an employee retirement plan sponsored by SERVICES owned 76,990
shares (1.8%) of the Equity Growth Fund and 8,020 shares (0.2%) 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 1999 were as follows:
<TABLE>
<CAPTION>
Equity Retirement Cornerstone
Growth Bond Balanced Income Stock
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Purchases $37,957,320 $35,090,694 $68,400,558 $49,360,124 $38,764,307
Sales 29,003,447 4,141,671 33,491,315 38,107,065 2,040,489
</TABLE>
57
<PAGE>
NOTE 4. INVESTMENT PORTFOLIO TRANSACTIONS (CONTINUED)
The cost of purchases and proceeds from sales of U.S. Government
securities included above were as follows:
<TABLE>
<CAPTION>
Equity Retirement Cornerstone
Growth Bond Balanced Income Stock
------ ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Purchases None $2,127,116 $1,119,375 None None
Sales None 1,030,806 543,672 None None
</TABLE>
Gross unrealized appreciation and depreciation of investments for book
and tax purposes as of December 31, 1999 were as follows:
<TABLE>
<CAPTION>
Equity Retirement Cornerstone
Growth Bond Balanced Income Stock
----------- ------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Appreciation $55,826,925 $ 56,996 $43,923,777 $ 2,282,670 $9,638,512
Depreciation 2,838,699 945,934 6,765,450 11,402,561 1,361,531
</TABLE>
NOTE 5. CAPITAL LOSS CARRYOVERS
For 1999, the Company utilized $299,574 of capital loss carryovers
in the Equity Growth Fund. At December 31, 1999, capital loss carryovers and
their expiration dates were as follows:
<TABLE>
Retirement Cornerstone
Bond Income Stock
------- ---------- -----------
<S> <C> <C> <C>
December 31, 2007 $59,239 $1,024,760 $50,588
</TABLE>
NOTE 6. 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.
58
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
Advance Capital I, Inc.
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of the
Equity Growth Fund, Bond Fund, Balanced Fund, Retirement Income Fund and
Cornerstone Stock Fund (constituting Advance Capital I, Inc., hereafter
referred to as the "Company") at December 31, 1999, the results of each
of their operations for the year then ended, the changes in each of their
net assets and the financial highlights for the periods indicated in
conformity with accounting principles generally accepted in the United
States. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the
Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits
of these financial statements in accordance with auditing standards generally
accepted in the United States, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at December 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
February 7, 2000
59
<PAGE>
ADDITIONAL INFORMATION (UNAUDITED)
RESULTS OF ANNUAL SHAREHOLDER VOTE
An Annual Meeting of Shareholders of the COMPANY was held at the Novi
Hilton, 21111 Haggerty Road, Novi, Michigan, on July 23, 1999 for the following
purposes:
1. To elect five Directors to hold office until the next Annual
Meeting of Shareholders or until their successors have been
elected and qualified.
<TABLE>
<CAPTION>
Directors Elected at Meeting Votes For
---------------------------- ---------
<S> <C>
Joseph A. Ahern 22,435,557
Richard W. Holtcamp 22,312,798
Harry Kalajian 22,403,630
John C. Shoemaker 22,435,557
Frank R. Zimmerman 22,328,245
</TABLE>
2. To ratify the selection of PricewaterhouseCoopers LLP as
independent accountants of the COMPANY for the fiscal year
ending December 31, 1999.
<TABLE>
<CAPTION>
<S> <C>
Votes For: 22,324,035
Votes Against: 29,313
Votes to Abstain: 170,175
</TABLE>
60
<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:
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
INDEPENDENT ACCOUNTANTS:
PricewaterhouseCoopers LLP
203 North LaSalle Street
Chicago, IL 60601
OFFICERS:
John C. Shoemaker, President
Robert J. Cappelli, Vice President & Treasurer
Charles J. Cobb, Vice President
Kathy J. Harkleroad, Secretary ANNUAL REPORT
DECEMBER 31, 1999
BOARD OF DIRECTORS:
Joseph A. Ahern
Richard W. Holtcamp
Harry Kalajian
Thomas L. Saeli
John C. Shoemaker
Frank R. Zimmerman
