<PAGE>
Annual Report
FOR THE YEAR ENDED DECEMBER 31, 1995
MMA Praxis
Mutual Funds
INTERMEDIATE INCOME FUND
GROWTH FUND
[LOGO OF MMA PRAXIS MUTUAL FUNDS]
<PAGE>
Message
From
The
President
Dear Shareholders:
MMA Praxis Mutual Funds delivered strong gains during the 12 months ended Dec.
31, 1995, a period of excellent performance for both the stock and bond
markets. Many of the best performers in the stock market were concentrated
among well-established blue-chip companies.
MMA Praxis Growth Fund's 33.3 percent total return* outperformed the 30.8
percent return of the Lipper Growth & Income Average.** MMA Praxis
Intermediate Income Fund posted a total return of 17.5 percent* versus a 16.6
percent return for the Lipper Intermediate Investment Grade Debt Average.**
Creating value for our shareholders by delivering solid investment performance
is one of our primary goals. Although the returns posted in 1995 were
exceptionally high, I believe that we can continue to deliver satisfactory
returns to long-term investors.
INVESTING TOWARD A BETTER WORLD
In addition to providing strong investment performance, we are determined to
keep our other goals in sight. We aim to invest only in companies whose
policies do not conflict with our shareholders' values.
Our investment process seeks companies that share our values of peace, justice
and the quality of life. Some of these companies include; BankAmerica Corp.
and Johnson & Johnson, which have strong community service records, and
Barnett Banks, Inc. and Pitney Bowes, Inc., which promote workplace diversity.
We also eliminate securities issued by firms and other organizations that
produce goods or services that conflict with our values. Examples include
firms and institutions that manufacture and support military armaments or
finance such expenditures, as well as companies that make alcoholic beverages
or tobacco products.
Finally, we are actively pursuing ways to encourage companies to exhibit
behaviors which are consistent with our beliefs. When we have concerns about a
firm's practices, we want to raise these concerns in an effective way. For
instance, we will work toward co-sponsoring shareholder resolutions designed
to affect corporate behavior during the coming year. We are grateful to the
Interfaith Center of Corporate Responsibility for its help in preparing us to
address such concerns.
CONTINUED GROWTH FOR THE FUNDS
Our shareholder base and the assets of our funds both grew significantly
during the recent period. The Growth Fund had 2,766 investors and
approximately $31 million in net assets as of Dec. 31, 1995, and the
Intermediate Income Fund had 776 investors and net assets of $23.5 million.
That growth reflects increasing interest in socially responsible investing, as
well as the success of a promotional campaign we launched during the fall and
will continue throughout 1996.
During 1995, we continued to receive inquiries about the funds from
prospective shareholders in many states. Because of this interest, we have
completed the registration of the funds in all 50 states and Puerto Rico.
- -------
* Does not reflect contingent deferred sales charge. Had the maximum 4 percent
CDSC charge been applicable, the return would have been 29.32 percent for
the MMA Praxis Growth Fund and 13.47 percent for the MMA Praxis Intermediate
Income Fund.
** The Lipper Growth & Income Average is a composite of all the growth and
income stock funds tracked by Lipper Analytical Services, Inc. The Lipper
Intermediate Investment Grade Debt Average is a composite of all the
intermediate investment grade corporate bond funds tracked by Lipper
Analytical Services, Inc. The averages are for illustrative purposes only
and do not reflect the performance of a specific fund.
-1-
<PAGE>
Message
From
The
President
Thank you for your support of the MMA Praxis Mutual Funds. As always, we will
continue to pursue your goals as an investor. Our policies will continue to
reflect our goal that your investments are consistent with your values.
If you have any questions about your investment, or would like to see a
prospectus for the funds, please call 1-800-9-PRAXIS. Be sure to read the
prospectus before you invest.
Sincerely,
MMA PRAXIS MUTUAL FUNDS
/s/ J.B. Miller
J.B. Miller
President
-2-
<PAGE>
Message
From
The
Investment
Adviser
Dear MMA Praxis Investor:
During 1995, stocks and bonds delivered strong gains, with the Standard and
Poor's 500 Index returning 37.6 percent and 30-year Treasury bonds returning
35.7 percent.
Those gains were largely due to declining interest rates. The Federal Reserve
Board reduced short-term interest rates in July and again in December. Long-
term rates also declined as investors became convinced that continued slow
economic growth would keep inflation low. The economy grew at an estimated 2.5
percent to 3 percent annual rate during the final six months of 1995, and
inflation stayed below 3 percent for the fourth straight year.
Investors were also hopeful that lawmakers' attempts to shrink the budget
deficit would reduce the risk of higher interest rates and inflation in the
future. That perception helped drive long-term interest rates as low as 6
percent late in the year, even as Republicans and Democrats debated the terms
of a budget deal.
The greatest beneficiaries of lower rates included shares of financial service
companies and long-term bonds. At the same time, concerns about the potential
for slower economic growth and smaller increases in corporate profits began to
steer investors toward stocks of firms that can deliver relatively steady
profits during an economic slowdown. The biggest winners included shares of
companies that make consumer products such as food/beverage, household
products, and pharmaceuticals.
Stocks of software, computer and other high-tech companies suffered a modest
slump late in the period, as some investors decided to take profits on their
biggest winners. In addition, retailers suffered from an overabundance of
stores and declining consumer spending.
LOOKING AHEAD
Investors should be prepared for the possibility of modest or less favorable
stock market performance during the coming year. Historically, big gains
during one year have generally been followed by small returns or even modest
losses during the following year.
During the coming months, we feel that the economy will likely continue to
grow at a moderate pace, with declining short-term interest rates and no
significant change in the rate of inflation. Those factors generally are
favorable to stocks as well as bonds. In a slow growth economy, some companies
will post disappointing earnings. In that environment, steady growth stocks
can provide attractive market returns.
Our outlook for steady, low inflation should help support bond prices, and
recent yields seem sufficient to provide a fair return relative to inflation.
But bond investors should not expect to repeat the gains of 1995 during the
coming months.
Although bullish investor attitudes have caused financial assets to become
expensive, we believe there are still opportunities for astute investors to
capture reasonable returns.
Thank you for your confidence and your investment in MMA Praxis Mutual Funds.
Sincerely,
/s/ Keith Yoder
Keith Yoder, Investment Manager
MMA Capital Management
-3-
<PAGE>
MMA Praxis Mutual Funds
MMA PRAXIS INTERMEDIATE INCOME FUND
The bond market and the MMA Praxis Intermediate Income Fund continued to
benefit from declining interest rates during the 12-month period ended Dec.
31, 1995. The fund delivered a 17.5 percent total return during the period
compared to a 19 percent return for the Lehman Corporate Intermediate Index*
and a 16.6 percent return for the Lipper Intermediate Investment Grade Debt
Average.
INTERMEDIATE INCOME FUND
VALUE OF A $10,000 INVESTMENT
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Brothers
Date CDSC No CDSC Corporate Intermediate
---- ---- ------- ----------------------
<S> <C> <C> <C>
1/4/94 10,000 10,000 10,000
12/31/94 9,225 9,591 9,734
12/31/95 10,867 11,267 11,582
</TABLE>
Average Annual Return*
<TABLE>
<CAPTION>
Since Inception
Date 1 Year 1/4/94
---- ------ ---------------
<S> <C> <C>
12/31/94 -7.75% -7.75%
12/31/95 13.47% 4.26%
</TABLE>
* Past performance is not indicative of future results. CDSC
reflects a 4.00 percent contingent deferred sales charge.
The Lehman Corporate Intermediate Index is an unmanaged
index, generally representative of the intermediate
corporate bond market. This index is for illustrative
purposes only and does not reflect the deduction of
expenses associated with a mutual fund, such as investment
management and fund accounting fees. The fund's
performance reflects the deduction of these value-added
services.
In 1995, we believed that bond yields still offered attractive returns
relative to the inflation rate--especially given the outlook for relatively
slow economic growth. We maintained a duration of approximately 4.5 years for
the fund, slightly higher than the duration of our benchmark index. (Duration
is a measure of a fund's price sensitivity to interest rate fluctuations.)
That policy contributed to the fund's gains as interest rates fell, since
longer-duration issues tend to benefit more from falling rates.
We also focused on high quality corporate bonds. The additional yield
available on bonds with lower credit ratings seemed insufficient to compensate
for their added risk. That risk seemed likely to increase if economic growth
slowed enough to raise concerns about the financial strength of lower-grade
issues.
Toward the end of the period, we shifted some assets from high-quality
corporate bonds to government agencies such as the Federal National Mortgage
Association (FNMA). Those agency securities offered yields comparable to those
on AA corporate issues, yet were of higher credit quality.
As long as the economy remains relatively weak, there is a good chance that
bonds will deliver modest price gains. However, the likelihood of major
declines in interest rates that would drive the price of long-term bonds
significantly higher seems small. Thus, we will probably allow the fund's
duration to decrease somewhat, reducing its price sensitivity to interest rate
moves. That will reduce the risk of losses if rates increase, and allow us
more flexibility to take advantage of bargains that might appear in the fixed-
income markets.
-4-
<PAGE>
MMA Praxis Mutual Funds
MMA PRAXIS GROWTH FUND
The Growth Fund gained 33.3 percent during the 12-month period ended Dec. 31,
1995. Those results were driven in part by the strong stock market. A number
of factors, including low inflation and declining interest rates, converged to
create a strong market last year.
GROWTH FUND
VALUE OF A $10,000 INVESTMENT
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Date CDSC No CDSC S&P 500 Domini 500
---- ---- ------- ------- ----------
<S> <C> <C> <C> <C>
1/4/94 10,000 10,000 10,000 10,000
12/31/94 9,637 10,027 10,131 10,018
12/31/95 12,967 13,367 13,938 13,845
</TABLE>
Average Annual Total Return*
<TABLE>
<CAPTION>
Date 1 Year Since Inception (1/4/94)
---- ------ ------------------------
<S> <C> <C>
12/31/94 -3.63% -3.63%
12/31/95 29.32% 13.93%
</TABLE>
* Past performance is not indicative of future results. CDSC
reflects a 4.00 percent contingent deferred sales charge.
The S&P 500 Index and the Domini 400 Social Index are
unmanaged indexes, generally representative of the stock
market and the socially responsible investment market,
respectively. These indexes are for illustrative purposes
only and do not reflect the deduction of expenses
associated with a mutual fund, such as investment
management and fund accounting fees. The fund's
performance reflects the deduction of these value-added
services.
The stock market gains were not spread equally among all market sectors.
During the later part of 1995, it became clear that the U.S. economy was
growing at a considerably slower pace than it did during the first half of
1995. The prospect of slower economic growth raised the threat of lower
profits for some companies. Also, shares of some previously high-flying
technology companies lost momentum as investors grew concerned that their
prices were dangerously high.
In that environment, the fund's consumer staple holdings were solid gainers.
These are companies that may deliver relatively steady earnings growth in
different environments due to their strong market niches, solid balance
sheets, and consumer-oriented products.
The fund benefited from its holdings in the financial services sector which
generated the biggest gains of any sector during the period. Other holdings
included firms that can benefit from fast-growing overseas markets like;
Procter & Gamble, Merck, Johnson & Johnson, Intel Corp., Hewlett Packard, and
Emerson Electric.
It seems unlikely that the financial markets will repeat their recent gains in
the coming year. The prospect for moderate economic growth and stable interest
rates suggests that stocks could deliver modest returns. We will continue to
pursue opportunities to earn profits, with an emphasis on stable growth
companies that can deliver both appreciation and current income over time.
-5-
<PAGE>
TABLE OF CONTENTS
Report of Independent Accountants
Page 7
Statements of Assets and Liabilities
Page 8
Statements of Operations
Page 9
Statements of Changes in Net Assets
Page 10
Schedules of Portfolio Investments
Page 11
Notes to Financial Statements
Page 16
Financial Highlights
Page 21
-6-
<PAGE>
MMA Praxis Mutual Funds
REPORT OF INDEPENDENT ACCOUTANTS
To the Shareholders and Board of Trustees
of the MMA Praxis Mutual Funds
We have audited the accompanying statements of assets and liabilities of the
MMA Praxis Mutual Funds (comprising, respectively, the Intermediate Income
Fund and the Growth Fund), including the schedules of portfolio investments,
as of December 31, 1995, and the related statements of operations, statements
of changes in net assets, and the financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the MMA Praxis Mutual Funds' management. Our responsibility
is to express an opinion on these statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1995 by correspondence with the custodian and brokers
or other auditing procedures where confirmations from brokers were not
received. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective funds comprising the MMA Praxis Mutual Funds as of December
31, 1995, and the results of their operations and the changes in their net
assets and the financial highlights for the periods referred to above in
conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Columbus, Ohio
February 14, 1996
-7-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
INTERMEDIATE
INCOME GROWTH
FUND FUND
------------ -----------
<S> <C> <C>
ASSETS:
Investments, at value................................. $23,111,487 $32,002,152
Interest receivable................................... 369,053 47,538
Receivable for capital shares issued.................. 6,191
Receivable from brokers for investments sold.......... 19,379
Unamortized organization costs........................ 20,554 19,715
Prepaid expenses...................................... 9,849 17,550
----------- -----------
Total Assets........................................ 23,530,322 32,093,146
----------- -----------
LIABILITIES:
Cash overdraft........................................ 27,269 1,145,958
Accrued expenses and other payables:
Investment advisory fees............................. 2,018
Administration fees.................................. 1,644 1,644
12b-1 fees........................................... 1,007 1,438
Transfer agent fees.................................. 4,880 4,656
Legal and audit fees................................. 13,471 16,734
Printing costs....................................... 3,456 4,327
Other................................................ 8,947 10,849
----------- -----------
Total Liabilities................................... 60,674 1,187,624
----------- -----------
NET ASSETS:
Capital............................................... 22,648,128 26,608,388
Undistributed net investment income................... 482 77
Net unrealized appreciation from investments.......... 1,128,846 4,101,854
Accumulated undistributed net realized gains(losses)
from investment transactions......................... (307,808) 195,203
----------- -----------
Net Assets.......................................... $23,469,648 $30,905,522
=========== ===========
Outstanding units of beneficial interest (shares)..... 2,308,217 2,559,507
=========== ===========
Net asset value--offering price per share *........... $10.17 $12.07
=========== ===========
Investments, at cost.................................. $21,982,641 $27,900,298
=========== ===========
</TABLE>
- -------
* Redemption price per share varies based on length of time shares are held
(Note 4).
See notes to financial statements.
-8-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
INTERMEDIATE
INCOME GROWTH
FUND FUND
------------ ----------
<S> <C> <C>
INVESTMENT INCOME:
Interest income....................................... $1,420,773 $ 120,696
Dividend income....................................... 536,126
---------- ----------
Total Income........................................ 1,420,773 656,822
---------- ----------
EXPENSES:
Investment advisory fees.............................. 107,864 183,660
Administration fees................................... 50,000 50,000
12b-1 fees............................................ 215,727 248,189
Custodian and accounting fees......................... 46,098 40,485
Legal and audit fees.................................. 26,956 30,397
Organization costs.................................... 6,570 6,205
Trustees' fees and expenses........................... 14,628 16,811
Transfer agent fees................................... 44,463 66,662
Registration and filing fees.......................... 26,954 20,440
Printing costs........................................ 20,227 22,075
Other................................................. 10,462 11,170
Expenses voluntarily reduced.......................... (241,673) (262,382)
---------- ----------
Total Expenses before reimbursement from investment
adviser............................................ 328,276 433,712
Reimbursement of expenses from investment adviser... (91,145)
---------- ----------
Total Expenses...................................... 237,131 433,712
---------- ----------
Net Investment Income................................. 1,183,642 223,110
---------- ----------
REALIZED/UNREALIZED GAINS (LOSSES) FROM INVESTMENTS:
Net realized gains (losses) from investment
transactions......................................... (292,038) 1,898,742
Net change in unrealized appreciation from
investments.......................................... 2,531,766 4,789,928
---------- ----------
Net realized/unrealized gains from investments........ 2,239,728 6,688,670
---------- ----------
Change in net assets resulting from operations........ $3,423,370 $6,911,780
========== ==========
</TABLE>
See notes to financial statements.
-9-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE INCOME FUND GROWTH FUND
------------------------- -------------------------
YEAR YEAR
ENDED JANUARY 4 ENDED JANUARY 4
DECEMBER 1994 TO DECEMBER 1994 TO
31, DECEMBER 31, 31, DECEMBER 31,
1995 1994 (A) 1995 1994 (A)
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income..... $ 1,183,642 $ 772,889 $ 223,110 $ 147,805
Net realized gains
(losses) from
investment transactions.. (292,038) (15,770) 1,898,742 634,249
Net change in unrealized
appreciation
(depreciation) from
investments.............. 2,531,766 (1,402,920) 4,789,928 (688,074)
----------- ----------- ----------- -----------
Change in net assets re-
sulting from operations... 3,423,370 (645,801) 6,911,780 93,980
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLD-
ERS:
From net investment
income................... (1,183,642) (772,280) (223,110) (147,317)
In excess of net invest-
ment income.............. (127) (411)
From net realized gains
from investment
transactions............. (1,898,742) (353,676)
In excess of net realized
gains from investment
transactions............. (85,370)
----------- ----------- ----------- -----------
Change in net assets from
shareholder distributions. (1,183,769) (772,280) (2,207,633) (500,993)
----------- ----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued.................... 5,142,236 19,385,101 10,048,490 18,605,351
Dividends reinvested...... 172,474 52,642 432,466 27,815
Cost of shares redeemed... (1,933,725) (170,600) (2,288,479) (217,255)
----------- ----------- ----------- -----------
Change in net assets from
capital transactions...... 3,380,985 19,267,143 8,192,477 18,415,911
----------- ----------- ----------- -----------
Change in net assets....... 5,620,586 17,849,062 12,896,624 18,008,898
NET ASSETS:
Beginning of period....... 17,849,062 18,008,898
----------- ----------- ----------- -----------
End of period............. $23,469,648 $17,849,062 $30,905,522 $18,008,898
=========== =========== =========== ===========
SHARE TRANSACTIONS:
Issued.................... 532,400 1,965,921 869,389 1,868,367
Reinvested................ 17,645 5,634 39,815 2,854
Redeemed.................. (195,215) (18,168) (199,082) (21,836)
----------- ----------- ----------- -----------
Change in shares........... 354,830 1,953,387 710,122 1,849,385
=========== =========== =========== ===========
</TABLE>
- -------
(a) Period from commencement of operations.
See notes to financial statements.
-10-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
INTERMEDIATE INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- --------------------------------------------------------- ----------
<C> <S> <C>
ASSET BACKED SECURITIES (4.8%):
250,000 American Express Master Trust, 7.85%, 8/15/05............ $ 279,825
300,000 Chemical Master Credit Card Trust 1, 6.23%, 4/15/05...... 302,748
250,000 Circuit City Credit Card Master Trust, 8.00%, 11/15/03... 270,145
250,000 Standard Credit Card Master Trust, 7.25%, 4/7/08......... 268,750
----------
Total Asset Backed Securities 1,121,468
----------
COLLATERALIZED MORTGAGE OBLIGATIONS (10.6%):
Federal Home Loan Mortgage Corp.:
238,637 6.50%, 12/1/99........................................... 241,426
500,000 6.00%, 8/15/07........................................... 497,050
Federal National Mortgage Assoc.:
650,000 6.50%, 10/25/06.......................................... 660,212
600,000 6.00%, 6/25/18........................................... 581,100
Vendee Mortgage Trust:
500,000 6.75%, 3/15/06........................................... 511,040
----------
Total Collateralized Mortgage Obligations 2,490,828
----------
COMMERCIAL PAPER (2.3%):
Financial Services (2.3%):
540,000 American Express, 5.50%, 1/5/96.......................... 539,670
----------
Total Commercial Paper 539,670
----------
CORPORATE BONDS (64.3%):
Banking (3.5%):
500,000 Banc One, 7.25%, 8/1/02.................................. 534,375
250,000 First Chicago, 9.25%, 11/15/01........................... 290,000
----------
824,375
----------
Broadcasting (0.5%):
110,000 CBS, Inc., 7.75%, 6/1/99................................. 115,912
----------
Conglomerate (1.2%):
250,000 Alco Standard, 8.88%, 4/15/01............................ 278,125
----------
Electric Services (1.1%):
250,000 Florida Power & Electric, 6.88%, 4/1/04.................. 265,312
----------
Financial Services (1.3%):
300,000 US Life Corp., 6.75%, 1/15/98............................ 306,750
----------
Food Products (1.1%):
250,000 H. J. Heinz Co., 7.50%, 10/1/96.......................... 254,062
----------
Governments (Foreign) (1.1%):
250,000 Province of Ontario, 7.38%, 1/27/03...................... 269,375
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- -------------------------------------------------------- ----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Insurance (3.2%):
250,000 Allstate Corp., 6.75%, 6/15/03.......................... $ 252,500
220,000 Chubb Corp., 8.75%, 11/15/99............................ 240,350
250,000 Harleysville Group, 6.75%, 11/15/03..................... 252,812
----------
745,662
----------
Machinery & Equipment (1.2%):
250,000 John Deere Capital, 8.63%, 8/1/19*...................... 284,375
----------
Office Equipment & Services (4.1%):
500,000 Pitney Bowes, 9.25%, 6/15/08*........................... 627,500
300,000 Xerox Credit Corp., 10.00%, 4/1/99...................... 335,250
----------
962,750
----------
Oil & Gas Exploration & Production Services (5.2%):
355,000 Atlantic Richfield Co., 10.25%, 7/2/00*................. 385,175
250,000 Burlington Resources, 9.63%, 6/15/00.................... 286,562
250,000 El Paso Natural Gas, 9.45%, 9/1/99...................... 278,125
250,000 Louisiana Land & Exploration, 8.25%, 6/15/02............ 277,188
----------
1,227,050
----------
Oil & Gas Transmission (2.2%):
300,000 Pennzoil Co., 10.13%, 11/15/09.......................... 393,000
100,000 Questar Pipeline Co., 9.88%, 6/1/20*.................... 113,625
----------
506,625
----------
Paper Products (1.1%):
250,000 Westvaco Corp., 10.25%, 7/1/18*......................... 269,062
----------
Pharmaceuticals (3.1%):
250,000 Eli Lilly & Co., 8.38%, 12/1/06......................... 296,250
417,000 Schering-Plough Corp., 7.75%, 5/15/96................... 420,127
----------
716,377
----------
Printing & Publishing (1.0%):
200,000 R.R. Donnelley & Sons Co., 9.13%, 12/1/00............... 230,000
----------
Railroads (2.3%):
250,000 Consolidated Railroad Co., 9.75%, 6/1/00................ 287,188
250,000 Union Pacific Co., 6.00%, 9/1/03........................ 247,187
----------
534,375
----------
Retail Stores (7.3%):
500,000 Dayton Hudson Co., 9.75%, 7/1/02........................ 593,125
250,000 Lowe's Co., 6.38%, 12/15/05............................. 253,125
</TABLE>
Continued
-11-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
INTERMEDIATE INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- --------------------------------------------------------- ----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Retail Stores, continued
250,000 May Department Stores, 9.88%, 12/1/02.................... $ 303,438
260,000 Supervalu, Inc., 7.80%, 11/15/02......................... 287,300
250,000 Wal-Mart Stores, 8.63%, 4/1/01........................... 280,313
----------
1,717,301
----------
Savings & Loans (1.3%):
250,000 Golden West Financial, 10.25%,
12/1/00................................................. 294,688
----------
Steel (1.1%):
237,500 Export Funding Trust, 7.89%, 2/15/05..................... 256,628
----------
Supermarkets (1.3%):
250,000 Secured Finance, Inc.--Kroger, 9.05%, 12/15/04........... 298,750
----------
Transportation & Shipping (1.2%):
250,000 General American Transportation, 8.63%, 12/1/04.......... 287,813
----------
Telecommunications (3.4%):
250,000 GTE Southwest, 6.54%, 12/1/05............................ 257,813
250,000 Northwestern Bell Telephone, 9.50%, 5/1/00............... 284,063
250,000 Southern New England Telephone, 7.13%, 8/1/07............ 268,125
----------
810,001
----------
Utilities--Gas (2.3%):
250,000 Equitable Resources, 7.50%, 7/1/99....................... 262,500
250,000 Southern Natural Gas, 8.88%, 2/15/01..................... 280,937
----------
543,437
----------
Utilities--Gas & Electric (3.4%):
250,000 Baltimore Gas & Electric Co., 8.38%, 8/15/01............. 278,437
250,000 Pacific Gas & Electric Co., 9.06%, 12/15/97.............. 265,625
246,000 Public Service Electric Co., 6.00%, 7/1/98............... 248,153
----------
792,215
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- -------------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS, CONTINUED:
Utilities--Electric (7.4%):
250,000 Alabama Power Co., 7.00%, 1/1/03*....................... $ 257,188
300,000 Allegheny Generating Co., 5.63%, 9/1/03................. 293,250
300,000 Indianapolis Power, 8.00%, 10/15/06..................... 343,500
300,000 Iowa Electric Light & Power Co., 8.63%, 5/15/01......... 336,375
250,000 Pennsylvania Power & Light Co., 7.75%, 5/1/02........... 269,063
250,000 Potomac Electric Power, 5.00%, 9/1/02................... 237,500
-----------
1,736,876
-----------
Utilities--Telephone (2.4%):
500,000 Mountain States Telephone, 9.50%, 5/1/00................ 568,125
-----------
Total Corporate Bonds 15,096,021
-----------
MEDIUM TERM NOTES (4.4%):
Beverages (1.0%):
250,000 PepsiCo., 5.70%, 11/1/08................................ 237,500
-----------
Finance (1.2%):
250,000 Capital Holding Corp., 9.27%, 5/7/01.................... 278,605
-----------
Insurance (1.1%):
255,000 W. R. Berkeley, 6.71%, 3/4/03........................... 265,519
-----------
Pharmaceutical (1.1%):
250,000 Smithkline Beecham Corp., 7.50%, 5/1/02*................ 259,375
-----------
Total Medium Term Notes 1,040,999
-----------
MORTGAGE BACKED SECURITIES (3.4%):
Federal Home Loan Mortgage Corp.:
549,768 7.00%, 7/1/15........................................... 554,897
Federal National Mortgage Assoc.:
249,504 7.03%, 9/1/05........................................... 251,841
-----------
Total Mortgage Backed Securities 806,738
-----------
</TABLE>
Continued
-12-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
INTERMEDIATE INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- -------------------------------------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (8.6%):
Federal Home Loan Bank:
250,000 8.20%, 1/16/98.......................................... $ 263,430
Federal Home Loan Mortgage Corp.:
250,000 6.21%, 5/13/96.......................................... 250,735
250,000 6.25%, 3/15/99.......................................... 255,337
250,000 7.13%, 7/21/99.......................................... 262,525
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- -------------------------------------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED
Federal National Mortgage Association:
249,643 6.72%, 10/1/05.......................................... $ 248,942
Small Business Administration:
500,000 SBIC 95-C, 7.35%, 8/1/05................................ 531,250
203,055 6.75%, 9/25/18.......................................... 203,544
-----------
Total U.S. Government Agencies 2,015,763
-----------
Total (Cost-$21,982,641)(a) $23,111,487
===========
</TABLE>
- -------
Percentages indicated are based on net assets of $23,469,648.
* Put and demand features exist allowing the Fund to require the repurchase
of the instrument within variable time periods of less than one year.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized
appreciation.......... $1,172,323
Unrealized
depreciation.......... (43,477)
----------
Net unrealized
appreciation.......... $1,128,846
==========
</TABLE>
See notes to financial statements.
-13-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMERCIAL PAPER (3.0%):
Personal Credit Institutions (3.0%):
917,000 American Express, 5.50%, 1/5/96........................ $ 916,440
-----------
Total Commercial Paper 916,440
-----------
COMMON STOCKS (99.7%):
Automotive Parts (0.6%):
12,000 SPX Corp............................................... 190,500
-----------
Banks (7.5%):
10,000 Amsouth Bankcorp....................................... 403,750
12,000 BankAmerica Corp....................................... 777,000
18,100 First Chicago Corp..................................... 714,950
12,000 Keycorp................................................ 435,000
-----------
2,330,700
-----------
Building Materials (1.5%):
15,000 Masco Corp............................................. 470,625
-----------
Chemicals--General (5.6%):
16,200 Air Products & Chemicals, Inc.......................... 854,550
18,000 Sigma-Aldrich.......................................... 891,000
-----------
1,745,550
-----------
Computers & Peripherals (7.6%):
5,000 Cisco Systems (b)...................................... 373,125
12,000 Hewlett-Packard Co..................................... 1,005,000
12,000 Oak Technology, Inc. (b)............................... 507,000
20,000 Read-Rite Corp. (b).................................... 465,000
-----------
2,350,125
-----------
Containers--Metal, Glass, Paper, Plastic (1.7%):
21,000 Rubbermaid, Inc........................................ 535,500
-----------
Electrical Equipment (7.3%):
15,000 DSC Communications Corp. (b)........................... 553,125
7,000 Emerson Electric Co.................................... 572,250
9,200 W.W. Grainger, Inc..................................... 609,500
7,000 Thomas & Betts Corp.................................... 516,250
-----------
2,251,125
-----------
Electronic & Electrical--General (2.4%):
19,000 AMP, Inc............................................... 729,125
-----------
Financial Services (5.0%):
9,000 Federal Home Loan Mortgage Corp........................ 751,500
6,500 Federal National Mortgage Assoc........................ 806,813
-----------
1,558,313
-----------
Food Distributors & Wholesalers (2.2%):
21,000 Sysco Corp............................................. 682,500
-----------
Food Processing & Packaging (2.8%):
9,900 Hershey Foods Corp..................................... 643,500
11,100 Smucker (J.M.), Class B................................ 213,675
-----------
857,175
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Hospital & Nursing Equipment & Supplies (2.9%):
10,500 Johnson & Johnson, Inc................................. $ 899,062
-----------
Insurance--Property, Casualty, Health (2.6%):
8,000 Allstate............................................... 329,000
5,000 Chubb Corp............................................. 483,750
-----------
812,750
-----------
Manufacturing--Capital Goods (1.7%):
8,900 Illinois Tool Works, Inc............................... 525,100
-----------
Medical Supplies (4.6%):
24,800 Biomet, Inc. (b)....................................... 443,300
22,500 St. Jude Medical, Inc. (b)............................. 967,500
-----------
1,410,800
-----------
Newspapers (3.0%):
15,000 Gannett Co., Inc....................................... 920,625
-----------
Office Equipment & Supplies (2.7%):
18,000 Pitney Bowes, Inc...................................... 846,000
-----------
Oil & Gas Exploration, Production, & Services (9.9%):
14,000 Amoco Corp............................................. 1,006,250
10,000 Anadarko Petroleum..................................... 541,250
8,500 Atlantic Richfield Co.................................. 941,375
14,200 Burlington Resource, Inc............................... 557,350
-----------
3,046,225
-----------
Pharmaceuticals (3.1%):
14,500 Merck & Co., Inc....................................... 953,375
-----------
Precision Instruments & Related (0.9%):
5,000 Dionex Corp. (b)....................................... 283,750
-----------
Printing & Publishing (1.7%):
13,200 R.R. Donnelley & Sons Co............................... 519,750
-----------
Restaurants (4.1%):
22,000 Bob Evans Farms, Inc................................... 418,000
25,000 Darden Restaurants, Inc................................ 296,875
12,000 McDonald's Corp........................................ 541,500
-----------
1,256,375
-----------
Retail (4.6%):
14,800 Best Buy (b)........................................... 240,500
5,500 Dayton Hudson Corp..................................... 412,500
10,000 Lowes Companies, Inc................................... 335,000
10,000 May Department Stores.................................. 422,500
-----------
1,410,500
-----------
</TABLE>
Continued
-14-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
DECEMBER 31, 1995
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Semiconductors (2.2%):
12,000 Intel Corp............................................. $ 681,000
-----------
Soaps & Cleaning Agents (2.5%):
9,300 Procter & Gamble Co.................................... 771,900
-----------
Software & Computer Services (1.9%):
6,000 Adobe Systems, Inc..................................... 372,000
15,000 Novell, Inc. (b)....................................... 213,750
-----------
585,750
-----------
Textile Manufacturing (1.6%):
9,500 V.F. Corp.............................................. 501,125
-----------
Trucks--Manufacturing (1.1%):
15,000 Wabash National Corp................................... 333,750
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Utilities--Natural Gas (4.4%):
14,200 Consolidated Natural Gas............................... $ 644,325
25,500 El Paso Natural Gas.................................... 723,562
-----------
1,367,887
-----------
Total Common Stocks 30,826,962
-----------
PREFERRED STOCKS (0.8%):
Financial Services (0.8%):
10,000 American General Capital, 8.13%, 9/30/25.............. 258,750
-----------
Total Preferred Stocks 258,750
-----------
Total (Cost--$27,900,298) (a) $32,002,152
===========
</TABLE>
- -------
Percentages indicated are based on net assets of $30,905,522.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized
appreciation.......... $4,722,309
Unrealized
depreciation.......... (620,455)
----------
Net unrealized
appreciation.......... $4,101,854
==========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-15-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. ORGANIZATION:
MMA Praxis Mutual Funds (the "Company") is an open-end management investment
company established as a Delaware business trust under a declaration of
Trust dated September 30, 1993 and is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"). The Company currently
comprises the Intermediate Income Fund and the Growth Fund (individually a
"Fund", and collectively the "Funds"). Between the date of organization and
the date of commencement of operations (January 4, 1994), the Company had no
operations other than those relating to organizational matters, including
the issuance on December 28, 1993 of 5,000 shares of the Intermediate Income
Fund and 5,000 shares of the Growth Fund at $10.00 per share to Mennonite
Mutual Aid Association.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by
the Company in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles.
SECURITIES VALUATION:
Investments in common and preferred stocks, corporate bonds, commercial
paper, municipal bonds, U.S. Government securities and securities of U.S.
Government agencies of the Funds are valued at their market values
determined on the basis of the latest available bid prices in the
principal market (closing sales prices if the principal market is an
exchange) in which such securities are normally traded. Investments in
investment companies are valued at their respective net asset values as
reported by such companies. The differences between the cost and market
values of investments are reflected as either unrealized appreciation or
depreciation.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Security transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the pro rata amortization of
premium or accretion of discount. Dividend income is recorded on the ex-
dividend date. Gains or losses realized on sales of securities are
determined by comparing the identified cost of the security lot sold with
the net sales proceeds.
REPURCHASE AGREEMENTS:
The Funds may acquire repurchase agreements from member banks of the
Federal Deposit Insurance Corporation and from registered broker-dealers
which the adviser deems creditworthy under guidelines approved by the
Board of Trustees, subject to the seller's agreement to repurchase such
securities at a mutually agreed-upon date and price. The repurchase price
generally equals the price paid by a Fund plus interest negotiated on the
basis of current short-term rates, which may be more or less than the rate
on the underlying portfolio securities. The seller, under a repurchase
agreement, is required to maintain the value of collateral held pursuant
to the agreement at not less than the repurchase price (including accrued
interest). Securities subject to repurchase agreements are held by the
Company's custodian or another qualified custodian or in the Federal
Reserve/Treasury book-entry system.
Continued
-16-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
DECEMBER 31, 1995
OPTIONS TRANSACTIONS:
When a Fund writes a covered call or put option, an amount equal to the
premium received is included in the Fund's statement of assets and
liabilities as a liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. If an
option expires on its stipulated expiration date or if the Fund enters
into a closing purchase transaction, a gain or loss is realized. If a
written call option is exercised, a gain or loss is realized for the sale
of the underlying security and the proceeds from the sale are increased by
the premium originally received. If a written put option is exercised, the
cost of the security acquired is decreased by the premium originally
received.
When a Fund purchases a call or put option, an amount equal to the premium
paid is included in the Fund's statement of assets and liabilities as an
investment, and is subsequently marked-to-market to reflect the current
market value of the option. If an option expires on the stipulated
expiration date or if the Fund enters into a closing sale transaction, a
gain or loss is realized. If the Fund exercises a call option, the cost of
the security acquired is increased by the premium paid for the call. If
the Fund exercises a put option, a gain or loss is realized from the sale
of the underlying security, and the proceeds from such sale are decreased
by the premium originally paid. Written and purchased options are non-
income producing securities. The options techniques utilized are to hedge
against fluctuations in the value of securities which the Funds hold or
intend to purchase. As of December 31, 1995, the Funds had no options
outstanding.
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared and paid monthly for the
Intermediate Income Fund and declared and paid quarterly for the Growth
Fund, and distributable net realized capital gains, if any, are declared
and distributed annually.
During the year ended December 31, 1994, the Funds adopted Statement of
Position 93-2, Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distributions
by Investment Companies. Accordingly, timing differences relating to
shareholder distributions are reflected in the components of net assets
and permanent book and tax basis differences relating to shareholder
distributions have been reclassified to additional paid-in capital. Net
investment income, net realized gains and net assets were not affected by
this change.
Dividends from net investment income and from net realized capital gains
are determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences are
primarily due to differing treatments for mortgage-backed securities,
expiring capital loss carryforwards and deferrals of certain losses.
FEDERAL INCOME TAXES:
It is the policy of each of the Funds to continue to qualify as a
regulated investment company by complying with the provisions available to
certain investment companies, as defined in applicable sections of the
Internal Revenue Code, and to make distributions of net investment income
and net realized capital gains sufficient to relieve it from all, or
substantially all, Federal income taxes.
Continued
-17-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
DECEMBER 31, 1995
ORGANIZATION COSTS:
Costs incurred by the Company in connection with its organization and
registration of shares have been deferred and are amortized using the
straight-line method over a period of five years from the commencement of
the public offering of shares of the Funds. In the event that any of the
initial shares of the Funds are redeemed during the amortization period by
any holder thereof, the redemption proceeds will be reduced by any
unamortized organizational expenses of the Company in the same proportion
as the number of said shares of the Fund being redeemed bears to the
number of initial shares of that Fund that are outstanding at time of
redemption.
OTHER:
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of income and expenses for the period. Actual results could differ
from those estimates.
3. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
year ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------- -----
<S> <C> <C>
Intermediate Income Fund.............................. $9,877,458 $6,381,858
Growth Fund........................................... $18,998,768 $11,129,254
</TABLE>
4. RELATED PARTY TRANSACTIONS:
Menno Insurance Service, Inc. doing business as MMA Capital Management, Inc.
(the "Adviser") ( a subsidiary of The Mennonite Foundation, Inc.), provides
investment advisory services to the Company. Under the terms of the
investment advisory agreement, the Adviser is entitled to receive fees based
on a percentage of the average net assets of each of the Intermediate Income
Fund and the Growth Fund.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
an Ohio limited partnership, and BISYS Fund Services Ohio, Inc.("BISYS
Ohio") are subsidiaries of The BISYS Group, Inc.
BISYS serves the Company as manager and administrator. Under the terms of
the management and administration agreement, BISYS receives fees that are
computed daily as a percentage of the average daily net assets of each Fund
with specified minimum amounts per Fund.
BISYS also serves as Fund distributor. BISYS receives fees for providing
distribution services under the Distribution Service Plan (the "Plan")
pursuant to Rule 12b-1 of the 1940 Act. Under the Plan, each Fund pays BISYS
a fee not to exceed, on an annual basis, 1.00% of the average daily net
assets of each Fund for payments BISYS makes to banks, broker/dealers and
other institutions, including affiliates of the Adviser, and for expenses
BISYS and any of its affiliates or subsidiaries incur for providing
distribution or shareholder service assistance.
Continued
-18-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
DECEMBER 31, 1995
BISYS Ohio serves each Fund as transfer agent and fund accountant. For
transfer agency services, BISYS Ohio is entitled to receive fees based upon
the number of shareholders with specified minimum amounts per Fund and
surcharges for transfer agency services. For fund accounting services, BISYS
Ohio is entitled to receive fees based on a percentage of the average daily
net assets of each Fund. In addition, BISYS Ohio is reimbursed for certain
out-of-pocket expenses incurred in providing such transfer agency and fund
accounting services.
Certain officers of the Company are affiliated with BISYS and/or MMA Capital
Management, Inc. Such officers are not paid any fees directly by the Funds
for serving as officers of the Company.
Certain redemptions of shares made within 5 years of purchase are subject to
a contingent deferred sales charge ("CDSC"). The applicable CDSC is equal to
a percentage of the lesser of the Net Asset Value per share ("NAV") at the
date of the original purchase or at the date of redemption. For the year
ended December 31, 1995, neither the Adviser nor BISYS received any
commissions earned on sales of shares of the Funds. The CDSC will not be
imposed on increases above the NAV at the time of purchase or shares
purchased through the reinvestment of dividends or capital gains.
<TABLE>
<CAPTION>
YEAR OF REDEMPTION CDSC
------------------ -----
<S> <C>
First 4.00%
Second 4.00%
Third 3.00%
Fourth 2.00%
Fifth 1.00%
Sixth and beyond 0.00%
</TABLE>
Fees may be voluntarily reduced or reimbursed to assist the Funds in
maintaining competitive expense ratios.
Information regarding these transactions is as follows for the year ended
December 31, 1995:
<TABLE>
<CAPTION>
INTERMEDIATE INCOME GROWTH
FUND FUND
------------------- --------
<S> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)............. 0.50% 0.74%
Voluntary fee reductions........................ $36,724 $26,585
ADMINISTRATION FEES:
Annual fee (percentage of average net assets)... 0.15% 0.15%
Minimum annual fee.............................. $50,000 $50,000
12B-1 FEES:
Annual fee before voluntary fee reductions
(percentage of average net assets)............. 1.00% 1.00%
Voluntary fee reductions........................ $204,949 $235,797
EXPENSES REIMBURSED BY INVESTMENT ADVISER....... $91,145
FUND ACCOUNTING AND TRANSFER AGENT FEES......... $82,206 $98,552
</TABLE>
-19-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
DECEMBER 31, 1995
5. ELIGIBLE DISTRIBUTIONS (UNAUDITED):
The Growth Fund designates the following eligible distributions for the
dividends received deduction for corporations:
<TABLE>
<S> <C>
Dividend income...................................................... $536,126
Dividend income per share............................................ $0.082
</TABLE>
6. FEDERAL INCOME TAX INFORMATION (UNAUDITED):
As of December 31, 1995, for Federal income tax purposes, the Intermediate
Income Fund has capital loss carryforwards available to offset future
capital gains, if any, of approximately $16,000 and $292,000 which expire in
2002 and 2003, respectively.
The Growth Fund declared and distributed $0.2981 per share and $0.4941 per
share from long-term capital gains and short-term capital gains,
respectively, to shareholders for the taxable year ended December 31, 1995.
-20-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
INTERMEDIATE INCOME FUND GROWTH FUND
------------------------- -------------------------
JANUARY 4 JANUARY 4
YEAR ENDED 1994 TO YEAR ENDED 1994 TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1995 1994 (A) 1995 1994 (A)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 9.14 $ 10.00 $ 9.74 $ 10.00
------- ------- ------- -------
Investment Activities
Net investment income.. 0.53 0.45 0.10 0.09
Net realized and
unrealized gains
(losses) from
investments.......... 1.03 (0.86) 3.12 (0.07)
------- ------- ------- -------
Total from Investment
Activities.......... 1.56 (0.41) 3.22 0.02
------- ------- ------- -------
Distributions
Net investment income.. (0.53) (0.45) (0.10) (0.09)
Net realized gains..... (0.79) (0.19)
------- ------- ------- -------
Total Distributions... (0.53) (0.45) (0.89) (0.28)
------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 10.17 $ 9.14 $ 12.07 $ 9.74
======= ======= ======= =======
Total Return (excludes
redemption charge)...... 17.47% (4.09)%(c) 33.32% 0.27%(c)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000)........... $23,470 $17,849 $30,906 $18,009
Ratio of expenses to
average net assets..... 1.10% 1.10%(b) 1.75% 1.75%(b)
Ratio of net investment
income to average
net assets........... 5.49% 4.96%(b) 0.90% 1.02%(b)
Ratio of expenses to
average net assets*.... 2.64% 2.83%(b) 2.81% 3.25%(b)
Ratio of net investment
income (loss) to
average net assets*.. 3.95% 3.23%(b) (0.16)% (0.48)%(b)
Portfolio Turnover..... 31.57% 4.95% 48.91% 35.22%
</TABLE>
- ---------
* During the period, certain investment advisory and 12b-1 fees were
voluntarily reduced and certain expenses were reimbursed by the investment
adviser. If such voluntary fee reductions and reimbursements had not
occurred, the ratios would have been as indicated.
(a)Period from commencement of operations.
(b)Annualized.
(c)Not annualized.
See notes to financial statements.
-21-
<PAGE>
Annual Report
INVESTMENT ADVISER FOR THE YEAR ENDED DECEMBER 31, 1995
MMA Capital Management
Post Office Box 483
Goshen, Indiana 46527
ADMINISTRATOR AND DISTRIBUTOR MMA
BISYS Fund Services Praxis
3435 Stelzer Road Mutual
Columbus, Ohio 43219 Funds
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, NW
Washington, DC 20005
AUDITORS
Coopers & Lybrand L.L.P.
100 East Broad Street
Columbus, Ohio 43215
INTERMEDIATE INCOME FUND
GROWTH FUND
[LOGO OF MMA PRAXIS MUTUAL FUNDS]
TRANSFER AGENT
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
This report is for the
information of shareholders
of MMA Praxis Mutual Funds,
but it may also be used as
sales literature when
preceded or accompanied by
the current prospectus,
which gives details about
charges, expenses,
investment objectives, and
operating policies of the
Funds. Read the prospectus
carefully before investing
or sending money.
[RECYCLED LOGO]
[LOGO OF PRINTED WITH SOY INK]
