<PAGE> PAGE 1
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<PAGE> PAGE 2
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<PAGE> PAGE 4
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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<PAGE> PAGE 14
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<PAGE> PAGE 15
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<PAGE> PAGE 16
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<PAGE> PAGE 17
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<PAGE> PAGE 18
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<PAGE> PAGE 19
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<PAGE> PAGE 20
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<PAGE> PAGE 21
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070 P020400 N
070 Q010400 Y
070 Q020400 N
070 R010400 N
070 R020400 N
071 A000400 0
071 B000400 0
071 C000400 0
071 D000400 0
072 A000400 12
072 B000400 153
072 C000400 0
072 D000400 0
072 E000400 0
072 F000400 7
072 G000400 0
072 H000400 0
072 I000400 7
072 J000400 8
072 K000400 0
072 L000400 3
072 M000400 7
072 N000400 1
072 O000400 0
072 P000400 0
072 Q000400 0
072 R000400 4
072 S000400 0
072 T000400 0
072 U000400 0
072 V000400 0
072 W000400 1
072 X000400 38
072 Y000400 22
072 Z000400 137
072AA000400 0
072BB000400 0
072CC010400 0
072CC020400 0
<PAGE> PAGE 22
072DD010400 137
072DD020400 0
072EE000400 0
073 A010400 0.0300
073 A020400 0.0000
073 B000400 0.0000
073 C000400 0.0000
074 A000400 6
074 B000400 0
074 C000400 11262
074 D000400 0
074 E000400 0
074 F000400 0
074 G000400 0
074 H000400 0
074 I000400 0
074 J000400 0
074 K000400 11
074 L000400 2
074 M000400 1
074 N000400 11282
074 O000400 0
074 P000400 4
074 Q000400 0
074 R010400 0
074 R020400 0
074 R030400 0
074 R040400 597
074 S000400 0
074 T000400 10681
074 U010400 10681
074 U020400 0
074 V010400 1.00
074 V020400 0.00
074 W000400 0.9999
074 X000400 165
074 Y000400 0
075 A000400 4720
075 B000400 0
076 000400 0.00
SIGNATURE BRENDA T. KOELEMAY
TITLE VP/TREASURER
[ARTICLE] 6
[CIK] 0000881166
[NAME] SM&R INVESTMENTS, INC.
[SERIES]
[NUMBER] 01
[NAME] GOVERNMENT BOND FUND
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] AUG-31-1999
[PERIOD-END] AUG-31-1999
[INVESTMENTS-AT-COST] 23488682
[INVESTMENTS-AT-VALUE] 23131109
[RECEIVABLES] 297180
[ASSETS-OTHER] 34635
[OTHER-ITEMS-ASSETS] 22887
[TOTAL-ASSETS] 23485811
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 30123
[TOTAL-LIABILITIES] 30123
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 24013851
[SHARES-COMMON-STOCK] 2321909
[SHARES-COMMON-PRIOR] 2262725
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (223809)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (357573)
[NET-ASSETS] 23455688
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 1589424
[OTHER-INCOME] 0
[EXPENSES-NET] 241722
[NET-INVESTMENT-INCOME] 1347702
[REALIZED-GAINS-CURRENT] 45700
[APPREC-INCREASE-CURRENT] (1198180)
[NET-CHANGE-FROM-OPS] 195222
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (1347729)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 94019
[NUMBER-OF-SHARES-REDEEMED] (159223)
[SHARES-REINVESTED] 124388
[NET-CHANGE-IN-ASSETS] 626660
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (269482)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 120664
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 267672
[AVERAGE-NET-ASSETS] 24169869
[PER-SHARE-NAV-BEGIN] 10.60
[PER-SHARE-NII] 0.59
[PER-SHARE-GAIN-APPREC] (0.50)
[PER-SHARE-DIVIDEND] (0.59)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.10
[EXPENSE-RATIO] 1.00<F1>
<FN>
<F1>Ratio of expenses without reimbursement to average net assets is 1.11%.
</FN>
</TABLE>
[ARTICLE] 6
[CIK] 0000881166
[NAME] SM&R INVESTMENTS, INC
[SERIES]
[NUMBER] 02
[NAME] PRIMARY FUND
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] AUG-31-1999
[PERIOD-END] AUG-31-1999
[INVESTMENTS-AT-COST] 30843804
[INVESTMENTS-AT-VALUE] 30792803
[RECEIVABLES] 83776
[ASSETS-OTHER] 7378
[OTHER-ITEMS-ASSETS] 23833
[TOTAL-ASSETS] 30907790
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 69493
[TOTAL-LIABILITIES] 69493
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 30598541
[SHARES-COMMON-STOCK] 30907621
[SHARES-COMMON-PRIOR] 34582655
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (18319)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (51001)
[NET-ASSETS] 30838297
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 1816144
[OTHER-INCOME] 0
[EXPENSES-NET] 266219
[NET-INVESTMENT-INCOME] 1549925
[REALIZED-GAINS-CURRENT] (12564)
[APPREC-INCREASE-CURRENT] (51001)
[NET-CHANGE-FROM-OPS] 1486360
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (1549925)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 33873860
[NUMBER-OF-SHARES-REDEEMED] (39022829)
[SHARES-REINVESTED] 1473935
[NET-CHANGE-IN-ASSETS] (3675020)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (5755)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 167289
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 351536
[AVERAGE-NET-ASSETS] 33270443
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] 0.05
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] (0.05)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] 0.80<F1>
<FN>
<F1>Ratio of expenses without reimbursement to average net assets is 1.06%.
</FN>
</TABLE>
[ARTICLE] 6
[CIK] 0000881166
[NAME] SM&R INVESTMENTS, INC.
[SERIES]
[NUMBER] 03
[NAME] TAX FREE FUND
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] AUG-31-1999
[PERIOD-END] AUG-31-1999
[INVESTMENTS-AT-COST] 11212350
[INVESTMENTS-AT-VALUE] 11306760
[RECEIVABLES] 172656
[ASSETS-OTHER] 45283
[OTHER-ITEMS-ASSETS] 21993
[TOTAL-ASSETS] 11546692
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 14492
[TOTAL-LIABILITIES] 14492
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 11420913
[SHARES-COMMON-STOCK] 1136944
[SHARES-COMMON-PRIOR] 1038994
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 5508
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 94410
[NET-ASSETS] 11532200
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 613232
[OTHER-INCOME] 0
[EXPENSES-NET] 86435
[NET-INVESTMENT-INCOME] 526797
[REALIZED-GAINS-CURRENT] 26918
[APPREC-INCREASE-CURRENT] (608365)
[NET-CHANGE-FROM-OPS] (54650)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (526769)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 105835
[NUMBER-OF-SHARES-REDEEMED] (56403)
[SHARES-REINVESTED] 48518
[NET-CHANGE-IN-ASSETS] 1055955
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (21438)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 57794
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 144229
[AVERAGE-NET-ASSETS] 11703055
[PER-SHARE-NAV-BEGIN] 10.64
[PER-SHARE-NII] 0.48
[PER-SHARE-GAIN-APPREC] (0.50)
[PER-SHARE-DIVIDEND] (0.48)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.14
[EXPENSE-RATIO] 0.73<F1>
<FN>
<F1>Ratio of expenses without reimbursement to average net assets is 1.23%.
</FN>
</TABLE>
[ARTICLE] 6
[CIK] 0000881166
[NAME] SM&R INVESTMENTS, INC
[SERIES]
[NUMBER] 04
[NAME] MONEY MARKET FUND
<TABLE>
<S> <C>
[PERIOD-TYPE] 8-MOS
[FISCAL-YEAR-END] AUG-31-1999
[PERIOD-END] AUG-31-1999
[INVESTMENTS-AT-COST] 11262226
[INVESTMENTS-AT-VALUE] 11262226
[RECEIVABLES] 12996
[ASSETS-OTHER] 6548
[OTHER-ITEMS-ASSETS] 868
[TOTAL-ASSETS] 11282638
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 601157
[TOTAL-LIABILITIES] 601157
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 10574666
[SHARES-COMMON-STOCK] 10681481
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 10681481
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 152787
[OTHER-INCOME] 0
[EXPENSES-NET] 15394
[NET-INVESTMENT-INCOME] 137393
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 137393
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (137393)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 13546991
[NUMBER-OF-SHARES-REDEEMED] (3003917)
[SHARES-REINVESTED] 138407
[NET-CHANGE-IN-ASSETS] 10681481
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 7237
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 37758
[AVERAGE-NET-ASSETS] 4720108
[PER-SHARE-NAV-BEGIN] 1.00
[PER-SHARE-NII] 0.03
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] (0.03)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 1.00
[EXPENSE-RATIO] 0.50<F1>
<FN>
<F1>Ratio of expenses without reimbursement to average net assets is 1.22%.
</FN>
</TABLE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON INTERNAL CONTROL STRUCTURE
The Board of Directors
SM&R Investments, Inc.
League City, Texas
In planning and performing our audits of the financial statements of SM&R
Government Bond Fund, SM&R Primary Fund, SM&R Tax Free Fund and SM&R Money
Market Fund, each a series of shares of SM&R Investments, Inc., for the
period ended August 31, 1999, we considered their internal control structure,
including procedures for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-SAR, not to provide
assurance on the internal control structure.
The management of the Funds is responsible for establishing and maintaining an
internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and
related costs of internal control structure policies and procedures. Two of
the objectives of an internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are safeguarded against
loss from unauthorized use or disposition, and that transactions are executed
in accordance with management's authorization and recorded properly to permit
preparation of financial statements in conformity with generally accepted
accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design
or operation of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by employees in
the normal course of performing their assigned functions. However, we noted no
matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses, as defined
above, as of August 31, 1999.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission, and should not be used for any other
purpose.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
October 1, 1999
