<PAGE>
Annual Report
for the year ended December 31, 1999
MMA Praxis
Mutual Funds
Intermediate Income Fund
Growth Fund
International Fund
[Logo of MMA]
<PAGE>
Message
From
The
President
Dear MMA Praxis Shareholders:
Financial markets in review
A booming U.S. economy and solid increases in corporate earnings lifted the
U.S. stock market to record highs again in 1999. Higher interest rates
dampened bond fund returns which suffered their second-worst year since 1973,
and the worst since 1994. The European markets lead a stunning recovery
benefiting international investors. Driving this performance was a slew of
mergers and acquisitions that helped propel stock prices.
The following are some of the highlights from 1999's topsy-turvy markets:
. For once, the S&P 500 didn't steamroll the entire market. The index rose
19.5 percent for the year--well ahead of its 12 percent historical
average--but a lot closer to normality than the 30 percent annualized
returns from 1995 through 1998.
. The U.S. market showed a clear-cut pattern in 1999: the more risk taken,
the greater your reward. Internet companies, many, who have never generated
a penny of profit, had their stock prices driven to stratospheric levels.
Investors who bought shares in these young, riskier companies fared much
better than those who stuck to a more conservative path.
. Big stocks outperformed small stocks in 1999 and growth stocks again
trounced their value counterparts. The growth/value gap was due primarily
to the incredible performance of technology stocks, most of which are
classified as growth. Within the S&P 500 Index, technology stocks gained 75
percent for the year.
. Rapid economic growth in the U.S. economy was a help to the stock market
but held back bond returns. Investors worried that low unemployment and
growth of the economy above 3 percent would cause wages and prices to
accelerate. Indeed, inflation did rise a bit, although the CPI was up only
a relatively modest 2.7 percent for the year.
. In the major developed international markets, U.S. investors were rewarded
with incredible gains in their stock portfolios. According to Morningstar,
the average foreign stock fund generated a return of 44.3 percent in 1999.
In addition to the merger and acquisition activity mentioned previously,
expanding business activity, increased consumer spending by Europeans and a
generally relaxed monetary policy fueled these spectacular gains.
. The NASDAQ Composite Index, which is intended to reflect the entire NASDAQ
market (4764 number of stocks) finished the year with a previously
unthinkable gain of 85.6 percent. The index's return was driven by a few
hundred large technology stocks with more than half of its gain coming
after Nov. 3, when the index passed 3,000. Never before had any U.S. stock
index posted a better return.
. Even though all the major indices achieved new highs in 1999, many stocks
experienced negative returns. Indeed, 62 percent of the companies listed on
the New York Stock Exchange declined in 1999 while 50 percent of NASDAQ's
listings dropped in value. Twenty-eight percent of S&P 500 stocks fell
also.
. Finally, in reviewing highlights of 1999, one needs to mention the
explosive growth in on-line trading. Merrill Lynch, the largest full-
service brokerage firm in the U.S. under pressure from successful
electronic brokers E*trade and Charles Schwab Corp. kicked off discounted
Web trading. This move by a premier brokerage firm helped validate the
concept of do-it-yourself investing. Consulting firm Forrester Research in
Cambridge,
-1-
<PAGE>
Message
From
The
President--
continued
M.A., estimates that on-line brokerage accounts will grow to 20.4 million in
2003, up from just 5.4 million at the end of 1999. Nearly 16 percent of all
stock trades are now placed over the Internet. The debate rages on whether
this trend will forever change the landscape of individual investing.
All-in-all, 1999 was a stellar bull market with the riskiest stocks reaping
the biggest rewards. But investors who are not willing to stomach the falls
that go along with the lofty highs are ill-advised to chase these volatile
stocks or the mutual funds that buy them. There are plenty of safer, well-
managed companies that have been out of favor with the market that hold
tremendous opportunities for the patient investor. Several of these companies
will be reviewed later in this report.
MMA Praxis Growth Fund
The Growth Fund generated a return of 12.2 percent for the year 1999. This is
in line with the historical average annual return for common stocks, even
though we trailed the average return for our benchmark peer group (as defined
by Morningstar Large-Cap Blended Investment Style). The long-term performance
of the Growth Fund can be found on page 10. Additional details on the Fund's
1999 performance, including an in-depth look at several important holdings,
can be found on page 9.
Because of the frenzied nature of investing today--primarily the result of
information overload, instantaneous transmission of that information, intense
competition among professionals for superior short-term performance and the
relatively low average experience level of investors--stocks are much more
volatile than they have been at nearly any time in the past. Prices go to
greater extremes on both the upside and the downside. This can be unnerving,
causing many investors to sell when they should buy and buy when they should
sell. However, the volatility does provide wonderful opportunities to make
favorable buy decisions for those who are willing to take a long-term view.
However, in the short run, stocks still get run up and pushed down on the
basis of swings in investor psychology. In the long run, however, the prices
of individual stocks and the market as a whole are still determined by
earnings growth. The most important task of professional money managers is to
harness the power of these factors to make profitable buy and sell decisions.
The Growth Fund portfolio managers focus their energies on meeting these
challenges.
In the current market environment where "investing for the long run," means
next week, focusing on long-term fundamentals and current valuation is more
important than ever before.
You can be assured that the portfolio management team leading MMA Praxis
Growth Fund manages your fund with these considerations. We remain confident
that this style of investing will reward the patient, long-term investor in
this fund.
MMA Praxis Intermediate Income Fund
The Intermediate Income Fund finished the year with a return of -1.9 percent.
This is within .5 percent of the Fund's Morningstar peer category. Further
details about the Intermediate Income Fund's performance can be found on page
7.
The run-up in stock values has shifted many investors' allocations towards
stocks, resulting in a portfolio that is inconsistent with the original risk
tolerant objectives of the investor.
-2-
<PAGE>
Message
From
The
President--
continued
By moving some dollars out of stocks and into bonds, investors can rebalance
their portfolios, achieving two important goals:
1. Protect stock market profit. Stock market investments have returned
substantial profits over the past few years. Investors can lock in some
of these profits by selling stock holdings and reinvesting the money in a
more conservative asset class like bonds.
2. Reduce risk. An overexposure to stocks means an investor's risk level has
increased. Rebalancing can bring risk back down to the investor's
targeted allocation range.
MMA Praxis International Fund
The International Fund recorded an impressive return of 42.0 percent for 1999.
This is well above its passive benchmark, the MSCI EAFE Index/1/ and slightly
below its Morningstar peer category average.
The international markets enjoyed very favorable returns in 1999. The reasons
for these stellar returns were noted in my opening remarks. Additional
commentary from the portfolio manager provides further explanation for the
Fund's outstanding results and is found on page 11.
Investors would be well advised to consider adding international equity funds
to their investment portfolios. Expanding the set of asset classes in a
portfolio to include international stocks can improve the risk and return
trade-off of investment opportunity. Your financial planner can assist you in
selecting an optimal percentage of international securities for your
portfolio.
Other fund highlights
1. Roll-out of MMA Praxis Money Market Fund/2/. This new fund offering was
made available in the fourth quarter. It is designed for investors who
have short-term investment needs or want a portion of their portfolio
sheltered from the volatility of the capital markets. For more
information, contact your financial advisor or call 1-800-503-0905.
2. MMA was cited by SocialFunds.com in an article titled The Five Biggest
Social Investing Stories of 1999. MMA was noted for its activities in
community development investing. It was noted that President Clinton's
high profile "poverty-tour" included a visit to the south Phoenix, AZ
area where MMA has targeted investments in several community development
projects. We were pleased that the President's initiative brought
nationwide attention to the economic need and opportunities in many
communities. It's gratifying to know that these situations offer win-win
opportunities for both communities and investors in MMA Praxis Funds.
- ---------
/1/The MSCI EAFE Index is an unmanaged index, generally representative of
International stocks. 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.
/2/MMA Praxis Money Market Fund refers to the MMA Praxis class of Pax World
Money Market Fund. Reich & Tang Distributors, Inc.
-3-
<PAGE>
Message
From
The
President--
continued
Conclusion
Please make sure to read the Question and Answer section found on page 16.
Feel free to submit your own questions to me at [email protected]. Also,
be sure to read the report on page 15 from Mark Regier, MMA's director of
socially responsible investing (SRI), for an in-depth report on MMA's SRI
activities.
We remain grateful for the trust and confidence you have demonstrated in MMA
Praxis Mutual Funds. We take this responsibility seriously and will endeavor
to generate both financial and social returns on your investments.
Thank you for allowing us to partner with you in meeting your financial
planning goals.
Sincerely,
/s/ John L. Liechty
John L. Liechty, ChFC
President, MMA Praxis Mutual Funds
-4-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis Intermediate Income Fund
1999 was a difficult year for bonds as interest rates rose. The 10-year
Treasury yield began the year at 4.65 percent. 12 months later that rate had
risen to over 6.40 percent. This increase of over 1 3/4 percent caused bond
prices to decline significantly. The price decline more than offset the
interest coupons causing returns to be negative for all but very short
maturity securities.
For the year, the Fund fell 1.9 percent which trailed the -.82 percent return
for the Lehman Aggregate Bond Index/1/ and the 1.31 percent loss seen in the
Lipper Intermediate Investment Grade Bond Fund Average Index./2/
Some of our best performing bonds in 1999 were Small Business Administration
pools. These bonds represent loans to small businesses that have difficulty
finding credit and yet carry a U.S. Government guarantee.
In order to take advantage of broader investment opportunities, the MMA Praxis
Intermediate Income Fund has the ability to add a limited amount of high-yield
bonds to the portfolio. As of year-end about three percent of the portfolio
was in high yield bonds. One such holding, CSC Holding, Inc., did particularly
well as it improved enough to be considered a candidate for an upgrade to
investment grade. CSC Holding is a major cable television company in New York
City. The Company has benefited from strong demand for high speed Internet
access, a service which it is now able to provide.
Analyzing market spreads and coupon rates is important to our Fund's
performance, but equally important is balancing those financial issues with
our broad social concerns. Several holdings in our portfolio are worth a
mention./3/
Enron
Enron is among the most active U.S. energy companies in the solar and wind
power fields. Enron is also one of the most aggressive natural gas producers
in the world. The development and operation of energy services and the
marketing involved in natural gas and electricity make up 88 percent of
Enron's revenues. Natural gas is seen as having significant environmental
benefits over electricity produced from coal, oil, or nuclear sources.
Fortune magazine has praised Enron for its long-term efforts in deregulating
the natural gas and electricity industries. Enron is headquartered in Houston
where it promotes a program called Wild @ Work. The Wild @ Work program
matched a conservation education grant from the National Fish and Wildlife
Foundation. The Environmental Institute of Houston received these grants, and
the money will benefit the Sam Houston Park in downtown Houston. Enron also
supports literacy through its Prescription for Reading literacy program in
partnership with the University of Texas. This program promotes parents
reading to their children each night.
Federal Express
Federal Express is the world's #1 express transport company and it delivers
more than 3 million packages to over 210 countries every working day. Federal
Express has revenues of $14 billion a year and it employs 150,000
people worldwide.
- ---------
/1/The Lehman Aggregate Bond Index includes fixed rate debt issues rated
investment grade or higher by Moody's Investor's Service, Standard and
Poor's(C) Corporation, or Fitch Investor's Service with at least one year to
maturity.
/2/The Lipper Intermediate Investment Grade Bond Fund Index includes funds
that invest at least 65% of its assets in investment grade debt issues (rated
in top four grades) with dollar-weighted average maturities of five to ten
years. These indices 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.
/3/The Fund's portfolio composition is subject to change.
-5-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis Intermediate Income Fund (continued)
Federal Express has a very strong volunteer program where "eight autonomous
Corporate Neighbor Teams work in conjunction with a Community Relations
Council to address community needs for assistance." Federal Express has an
alliance with the American Red Cross that involves monetary donations and
express delivery of goods to disaster sites and much more. In July 1999,
Fortune magazine along with the Council on Economic Priorities named Federal
Express on its list of the "50 Best Places to Work for Asians, Blacks, and
Hispanics." Federal Express is also on Fortune's "100 Best Companies to Work
For" mainly because of its no-layoff policy and the openness between work
groups and supervisors.
Harman International
Harman International designs and produces audio products for the consumer and
professional markets. Its consumer industry is headed by such names as JBL and
Infinity speakers. Harman's OEM group produces premium-branded car stereos
used by BMW, Mercedes Benz, Toyota, and Daimler Chrysler.
Harman is a large promoter of employee involvement at all levels, and
employees share in the benefits received from cost-savings ideas. Senior
executives must spend a minimum of 10 days on the production line a year. The
executives come in at 6:00 a.m. and complete a shift of work on the production
line, and then they move on to do a full day of executive work. Harman has a
no-layoff policy called Off Line Enterprises. Employees are cross-trained,
workers who would be laid off are put onto other projects, and these workers
keep their seniority, health benefits, and connection to the company.
Sun Microsystems
Sun Microsystems is the leading maker of Unix-based workstations, storage
devices, and servers for powering corporate web sites. Sun started the Java
programming language, which is a software program that runs unchanged on any
computer. Computer systems and storage accounted for 81 percent of fiscal 1999
revenues.
Sun Microsystems is on Fortune's latest list of the "100 Best Companies to
Work For" mainly because of its rooms specifically for rest or meditation and
its excellent recreation facilities. Sun offers other things for employees
such as showers and a secure "bicycle corral" for employees who bike to work.
Its wellness facilities provide basketball courts, volleyball courts and
fitness equipment for employees. Sun has made strong environmental efforts,
which include a goal to recycle 60 percent of its office and manufacturing
solid waste annually. Sun also has a program that designs environmentally
responsible products and an energy efficiency program called "SMART office"
which turns off electrical devices when these devices are not in use. Sun
Microsystems was highly rated by Fortune in its list of "50 Best Places to
Work for Asians, Blacks, and Hispanics." Sun was one of only two companies in
Silicon Valley placed on this list. Sun has strong recruiting ties to three
historically black colleges: Florida A&M University, Howard University, and
Southern University.
As we look ahead into 2000, we see an environment of somewhat higher interest
rates. Strong credit demands and rapid growth with increasingly limited
resources, particularly labor, are causing markets to anticipate a less
generous Fed. This in turn is causing interest rates to rise. If the economy
slows modestly, we believe rates could fall. This should lead to much better
bond returns.
Delmar King
MMA Praxis Intermediate Income Fund Manager
-6-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis Intermediate Income Fund (continued)
[CHART APPEARS HERE]
Intermediate Income Fund
Value of a $10,000 Investment
Lipper Intermediate
Investment Grade Bond Lehman Aggregate
Class B Fund Index Bond Index
1/4/94 10,000 10,000 10,000
12/31/94 9,590 9,679 9,708
6/30/95 10,680 10,677 10,819
12/31/95 11,260 11,336 11,501
6/30/96 11,030 11,183 11,361
12/31/96 11,510 11,725 11,919
6/30/97 11,760 12,070 12,287
12/31/97 12,393 12,755 13,068
6/30/98 12,727 13,236 13,583
12/31/98 13,196 13,759 14,205
6/30/99 13,061 13,565 14,003
12/31/99 13,044 13,625 14,089
Average Annual Total Return
12/31/99
<TABLE>
<CAPTION>
1 Year 5 Year Since Inception
------- ------ ------------------
<S> <C> <C> <C>
Class A (no load) -- -- (5/12/99) (0.45)%
Class A* -- -- (5/12/99) (4.13)%
Class B (no load) (1.90)% 6.34% (1/4/94) 4.54%
Class B** (5.62)% 6.19% (1/4/94) 4.54%
</TABLE>
*Reflects 3.75% Sales Charge
**Reflects Applicable Contingent Deferred Charge (Maximum 4.00%)
Past performance is not indicative of future results. The
investment return and principal value will fluctuate so that
investors' shares, when redeemed, may be worth more or less
than the original cost. CDSC reflects a deduction of a
declining CDSC starting at 4.00 percent for the years
illustrated.
The Class B contingent deferred sales charge (CDSC) is not
included in the above value of a $10,000 Investment graph
since the performance is for more than 5 years and the CDSC
would not longer apply.
The Lehman Aggregate Bond Index includes fixed rate debt
issues rated investment grade or higher by Moody's
Investor's Service, Standard and Poor's(R) Corporation, or
Fitch Investor's Service with at least one year to maturity.
The Lipper Intermediate Investment Grade Bond Fund Index
includes funds that invest at least 65% of its assets in
investment grade debt issues (rated in top four grades) with
dollar-weighted average maturities of five to ten years.
These indices 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 total return set forth reflects a
waiver of a portion of the fund's advisory or administrative
fees. In such instances, and without waiver of fees, total
return would have been lower.
The performance of Class A could be greater or less than
Class B based on the differences between sales loads and
expenses.
-7-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis Growth Fund
"Objects may be closer than they appear."
Look in the side view mirror of most cars, and what you see is not exactly
what you get--you need to look through the windshield to safely navigate the
road ahead. Unfortunately, history is the only certainty in the investment
market. What was, was. What may be, might not be. Earlier in the year, we
foresaw a shift in the market away from the large-cap growth focus to a
broader market, which would recognize fair valuation. Though this view held
for a portion of the year, the fourth quarter erased the headway that had been
made.
1999's fourth quarter punctuated a repeat of 1998's narrowness. Remove the
technology companies from the 1999 S&P 500 and you reduce a 21 percent advance
to a paltry 2 percent gain. In fact, almost 60 percent of the stocks in the
S&P lost ground in 1999. As a final exclamation point on the narrowness, the
S&P is a cap-weighted index--the bigger the company, the more that company
effects the return of the index. If each stock were equally weighted, the
index return would have been only 3.1 percent.
Domestic diversification failed in 1999
Investors who declared big wins last year did so by concentrating their
investments in the stock market and within a narrow band of size and sector--
large-cap and technology. If there was ever an example of placing all your
eggs in one basket, this was it. MMA Praxis Growth Fund has always prided
itself on respectable gains with a recognition of portfolio risk. Though none
of our shareholders pocketed the 64 percent gains of the technology sector,
neither were they subject to the risks of big losses.
Performance heads/1/ . . .
Though advances were narrowly based, especially in the fourth quarter, our
shareholders did benefit from some solid stock selection. In July, we
purchased a small, well-managed telephone company after it announced a major
acquisition of a national fiber optics company. The company's name was
Cincinnati Bell, recently renamed Broadwing, Inc. The company was able to
capitalize on its expertise to take the underutilized assets of another
company to a state-of-the-art broadband network company. The stock price went
from $21 per share at the time of our purchase to almost $37 per share by
year-end. Even after this significant 76 percent price increase, there remains
more upside potential as this acquisition continues to unfold over the next
few years.
Another good stock story was found in Electronics For Imaging (EFII). EFII was
down by over 40 percent in the midst of problems announced by Lexmark
International, an EFII competitor in the printing equipment business. When
analyzing the company, we found no problems and decided to purchase the stock
after the large decline in price. The stock was purchased while trading in the
$36 to $37 range. By year-end, the stock price had recovered sharply to close
at $58. The future continues to look bright for this company. This stock is a
great example of how momentum investing can drive a stock's price lower than
fair valuations would indicate.
. . . and tails
With 60 percent of the market losing ground last year, we had our share of
negative surprises. Xerox was one such holding to suffer the wrath of Wall
Street. The stock is now off its 1999 high by 62 percent, and dropped 53
percent from August through December. The company is a well-recognized growth
business, continues to be profitable, boasts a 3.7 percent dividend yield and
is trading at 11 times future earnings. Though the first half of 2000 will
represent a challenge for the company, the second half of the year should
stabilize considerably. Some of Xerox's fourth quarter woes could be traced to
the Y2K concerns, as a significant number of companies were curtailing
equipment purchases until after the new year had been successfully ushered in.
- ---------
/1/The Fund's portfolio composition is subject to change.
-8-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis Growth Fund (continued)
Newell Rubbermaid is a company, which illustrates our value bias to investing.
After beginning the year at a stock price of just over $41, the stock was
severely beaten down, ending 1999 at a price near $29.75. We felt that the
market had overreacted to an acquisition early in the year and saw a mid-year
opportunity to pick up some shares at $28. Though the calendar-year
performance of this stock was negative, we felt our purchase to be timely. The
company's quality management, cost-cutting measures and extension of its
product lines will drive continued positive performance of the stock.
Outlook of 2000: The "I's" have it
As we stand here in the wee hours of a new year, Internet stocks and interest
rates appear as though they will drive the investment markets for the year.
We continue to feel that the Internet stock bubble is bound to burst.
Unfortunately, no one knows when. As the NASDAQ index hits new highs and the
likes of YAHOO find their way in the S&P 500, one would think there is a
legitimacy to this branch of technology. We whole heartedly agree that the
technology is here to stay. What isn't here to stay are the dozens and dozens
of Internet companies trading at levels hundreds of times ESTIMATED future
earnings. (Note the vast majority of these companies have never seen a penny
of profit. Even the mighty Amazon.com estimates its first profitable year to
be five years into the future.) Instead of gambling on possible future
profits, we continue to invest in the Internet's infrastructure through
companies such as Hewlett Packard, Tellabs, Lucent Technologies, MCI Worldcom,
Broadwing and Cisco Systems. While the consumers are deciding which Internet
companies will survive, we'll choose to invest in the technology most Internet
companies will have no choice but to use. Hewlett Packard and Cisco Systems
have proven to be the leading sources for e-business answers.
When the Federal Reserve meets for the first time in the new year, all
expectations are for an interest rate increase. Investment fundamentals tell
us that as interest rates rise, bond prices decline. Higher interest rates
also create competition to stock investing, as interest rates become more
attractive to the investor. Though such rates are initiated as a mechanism for
slowing economic growth, we do not anticipate an immediate nor profound effect
on the stock market. We do feel that in the long run such rate increases will
have a dampening effect on the equity markets' historic bull run. Such
interaction between the bond and stock markets continues to be the basis for
our value-oriented, diversified approach to stock investing, and our belief
that an investor's portfolio should include both stocks and bonds.
A final word
It is very tempting to abandon our investment philosophy as Wall Street
continues to overlook much of the good news from fundamental analysis. It
would be so easy to simply follow the momentum and hop on the growth
bandwagon, but a five-year growth market does not make for a complete paradigm
shift in investing. We may nibble at these types of large-cap growth
companies, but we continue to believe in our established philosophy of seeking
value in well-established profitable companies. This philosophy will remain at
the core of our decision making.
Keith D. Yoder, CFA
MMA Praxis Growth Fund Manager
-9-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis Growth Fund (continued)
[CHART APPEARS HERE]
Growth Fund
Value of a $10,000 Investment
CDSC S&P 500 Domini 400
1/4/94 10,000 10,000 10,000
12/31/94 10,026 10,132 10,018
6/30/95 11,968 12,181 12,140
12/31/95 13,367 13,940 13,845
6/30/96 14,025 15,349 15,238
12/31/96 15,488 17,141 17,125
6/30/97 17,992 20,675 20,864
12/31/97 20,005 22,859 23,680
6/30/98 21,112 26,908 28,160
12/31/98 21,197 29,392 31,853
6/30/99 24,607 33,031 35,784
12/31/99 23,775 35,557 39,667
Average Annual Total Return
12/31/99
<TABLE>
<CAPTION>
1 Year 5 Year Since Inception
------ ------ -------------------
<S> <C> <C> <C>
Class A (no load) -- -- (5/12/99) (0.91)%
Class A* -- -- (5/12/99) (6.10)%
Class B (no load) 12.16% 18.85% (1/4/94) 15.56%
Class B** 8.25% 18.75% (1/4/94) 15.56%
</TABLE>
*Reflects 5.25% Sales Charge
**Reflects Applicable Contingent Deferred sales Charge (Maximum
4.00%)
Past performance is not indicative of future results. The
investment return and principal value will fluctuate, so
that investors' shares, when redeemed, may be worth more or
less than the original cost. CDSC reflects a deduction of a
declining CDSC starting at 4.00 percent for the years
illustrated.
The Class B contingent deferred sales charge (CDSC) is not
included in the above value of the $10,000 investment graph
since the performance is for more than 5 years and the CDSC
would no longer apply.
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 indices 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 total return
set forth reflects a waiver of a portion of the fund's
advisory or administrative fees. In such instances, and
without waiver of fees, total return would have been lower.
The performance of Class A could be greater or less than
Class B based on the differences between sales loads and
expenses.
-10-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis International Equity Fund
Full Year 1999 Comments
The MMA Praxis International Equity Fund outperformed its benchmark for the
full year of 1999. It was up 42.00 percent compared to the MSCI EAFE Index/1/,
which was up 26.96 percent (net dividends reinvested). The majority of this
significant outperformance came during the second half of the year, where the
portfolio gained 33.4 percent (versus the benchmark return of 22.1 percent)
after only achieving 7.61 percent during the first half of the year. In the
second half of the year, the portfolio benefited from being overweight in key
markets in continental Europe and Japan (up 33.8 percent), and underweight in
the U.K. (up 9.6 percent), which significantly lagged the EAFE index.
Country allocations/2/
For the full year, the fund was positively impacted by our overweight position
in Japan (up 61.5 percent) and generally underweight positions in the U.K. (up
12.5 percent), Switzerland (down 7.0 percent) and Germany (up 20.0 percent).
However, returns were held back by overweight positions in Italy (down 0.3
percent) and the Netherlands (up only 6.9 percent) and underweight positions
in Hong Kong (up 59.5 percent) and Finland (up 152.6 percent.) Furthermore,
maintaining an underweight position in emerging markets throughout the year
was costly to performance, as the MSCI Emerging Market Free Index advanced a
strong 63.7 percent.
The importance of stock selection/2/
As we have indicated all year, asset allocation decisions were eclipsed by
stock selection decisions. Among the portfolio's largest positions, Vodafone
advanced 52.2 percent, Mannesmann advanced 109.4 percent, and NTT DoCoMo more
than tripled (up 365.7 percent.) Other important contributors to performance
were Fuji Bank (up 163.1 percent), Rohm (up 356.1 percent), Sakura Bank (up
151.9 percent), KPN (up 93.9 percent), and Mediaset (up 90.5 percent.)
Since stock selection had such a significant impact on overall performance
during the year, we thought it would be useful to highlight some of our larger
holdings that contributed to these strong returns.
Fujitsu
Fujitsu is a leading PC manufacturer in Japan, with a multitude of products
from software and semiconductors to telecommunication equipment. It is the
major beneficiary of an increase in infrastructure spending on information
technology and Internet and its flash memory division continues to benefit
from strong worldwide cellular phone sales. Fujitsu owns Japan's largest
Internet service provider, @Nifty, with over 3.5 million subscribers. The
Japanese market is just starting to recognize beneficiaries of these fast
growing markets and Fujitsu's management has embraced the Internet as a
strategic driver.
Beyond Fujitsu's financials
Fujitsu's Chairman, Takuma Yamamoto, is a member of the International Advisory
Board for the Alliance for Global Sustainability. The Alliance for Global
Sustainability (AGS) "is a unique collaboration that provides a framework in
which leaders in academic, business, governmental and non-governmental
organizations build new knowledge about complex issues in order to reconcile
environmental and economic concerns." As part of the AGS, faculty and students
- ---------
/1/The MSCI EAFE index is an unmanaged index, generally representative of
international stocks. 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.
/2/The Fund's portfolio composition is subject to change.
-11-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis International Equity Fund (continued)
at three universities--The University of Tokyo, Swiss Federal Institute of
Technology, and Massachusetts Institute of Technology (MIT) develop ideas and
policies on global sustainability. The current areas of study are water and
agriculture, energy for the 21st century, and mobility. Fujitsu has published
an Environmental Activity Report since fiscal 1996. All of Fujitsu's principal
overseas and domestic manufacturing affiliates have received the ISO 14001
certification. The ISO 14001 certification specifies requirements for a
company's environmental management system. A few of the requirements are
establishing an environmental policy, determining environmental impacts of
products/services/activities, and planning measurable environmental targets
and programs to meet these environmental targets. Fujitsu also belongs to a
few voluntary EPA programs such as EPA Energy Star and the EPA Climate Wise.
Both of these programs desire companies to examine the long-term environmental
impacts of company decisions.
Vodafone Airtouch
Vodafone Airtouch is the world's largest mobile telecommunications company.
The services of Vodafone Airtouch include selling and renting mobile phones,
voice and text paging, and data transmission. Vodafone Airtouch started out
being the leading cellular provider in the U.K. but over time has increased
its mobile footprint with stakes in cellular companies in Europe, the U.S. and
the Pacific Basin. As of year end, it was involved in a hostile takeover of
the leading cellular operator in Germany: Mannesmann. It is crucial for
Vodafone that this deal goes through because together with Mannesmann's
various European cellular stakes it will give the combined group firm control
of the largest European cellular footprint.
Recycling technology
Vodafone Airtouch was the first service provider in the United Kingdom to
launch a recycling program for mobile phone batteries. The recovered cadmium
is used to produce new batteries and the nickel is used in the stainless steel
industry. This led to Vodafone's part in a consortium of mobile phone related
companies that are recycling the entire phone. These recycling projects are
very important because many mobile subscribers are switching from analog
technology to digital technology. This recycling effort by service providers
and mobile phone manufacturers is a great way to diminish the environmental
impact of old phones. According to some estimates, in Australia (one of the
countries implementing such a program), more than 2 million phones could be
changed over to digital and 6 million batteries could be recycled. Vodafone
Airtouch is also part of the "Take Back" program in the United Kingdom that is
also trying to recycle old mobile phones. The U.K. mobile phone market is even
larger than Australia's market with over 14 million phones in use. Recycling
this number of phones would have a very positive environmental impact.
Outlook
We expect the pace of improvement in global economic activity to moderate over
coming quarters, especially in the U.S. Monetary policy adjustments over the
last two quarters have resulted in interest rates increasing 75 basis points
in the U.S. and 50 basis points in Europe. This increase is expected to rein
in growth to more modest levels, thus ensuring that inflation remains subdued.
This scenario suggests a favorable environment for stock markets, especially
if bond yields have indeed peaked.
You have heard us discuss the importance of stock selection many times, and we
believe that it remains key to long-term outperformance. However, the best
returns can be expected when we are correct in both our top-down country
allocation and bottom-up stock selection ideas. At this juncture, we expect
bond yields to be at or near to peak levels in Europe, and would expect to
find fertile grounds for stock-picking both in the U.K. and the euro-bloc.
Restructuring within Europe continues and we expect these companies to offer
the highest probability of sustained earnings growth. We also expect
consolidation within Europe to gain momentum, particularly within sectors
feeling the pressure of
-12-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis International Equity Fund (continued)
more competitive regional and global markets. While we continue to expect
strong relative returns from the telecommunications and technology sectors, we
believe the market will broaden to encompass other sectors with improving
returns on capital, such as select media, consumer products, and growth
cyclicals.
In Japan, we expect stock selection to be critical. Japan is just beginning
the process of restructuring necessary to revitalize its economy and address
the challenges of global markets. We expect continued momentum behind
restructuring efforts as more companies tackle their uncompetitive cost
structures and take advantage of deregulation. If restructuring is serious and
sustainable in Japan, we should expect more corporate activity in the next
phase, both among Japanese companies and with foreign companies. We continue
to favor the financial sector: restructuring and consolidation are in very
early stages and have the potential to significantly transform returns.
We believe the emerging markets should also prove to be fertile grounds for
stock-picking over the next 12 to 18 months. Emerging markets' risk premiums
have stabilized and earnings visibility has significantly improved. Although
most markets have rebounded sharply from 1998 lows, we believe that many
stocks are at interesting valuations and have the potential for sustained
outperformance.
Martina Oechsle
Oechsle International Advisors, LLC
MMA Praxis International Equity Fund Sub-advisor
-13-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis International Equity Fund (continued)
[CHART APPEARS HERE]
International Fund
Value of a $10,000 Investment
CDSC NO CDSC MSCI EAFE
4/1/97 10,000 10,000 10,000
6/30/97 11,501 11,501 11,298
12/31/97 10,640 10,640 10,340
6/30/98 13,184 13,184 11,987
12/31/98 13,191 13,191 12,426
6/30/99 14,061 14,061 12,919
12/31/99 18,432 18,732 15,753
Average Annual Total Return
12/31/99
<TABLE>
<CAPTION>
1 Year Since Inception
------ -----------------
<S> <C> <C>
Class A (no load) -- (5/12/99) 35.09%
Class A* -- (5/12/99) 28.02%
Class B (no load) 42.00% (4/1/97) 25.63%
Class B** 38.00% (4/1/97) 24.90%
</TABLE>
*Reflects 5.25% Sales Charge
**Reflects Applicable Contingent Deferred Sales Charge (Maximum
4.00%)
Past performance is not indicative of future results. The
investment return and principal value will fluctuate so that
investors' shares, when redeemed, may be worth more or less
than the original cost. CDSC reflects a deduction of a
declining CDSC starting at 4.00 percent for the years
illustrated.
The MSCI EAFE Index is an unmanaged index, generally
representative of international stocks. 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. The total return set forth reflects a waiver of a
portion of the fund's advisory or administrative fees. In
such instances, and without waiver of fees, the total return
would have been lower.
International investing involves increased risk and
volatility.
The performance of Class A could be greater or less than
Class B based on the differences between sales loads and
expenses.
-14-
<PAGE>
MMA Praxis Mutual Funds
MMA Praxis Stewardship Investing Update
The final year of the 20th century presented numerous opportunities in our
faith-based efforts to balance financial productivity and social
responsibility. We continue to live out our stewardship investing commitments
and prepare for future socially responsible investing (SRI) efforts in the
complex and relentlessly global markets.
Pursuing the positive. In 1999, MMA Praxis continued to emphasize our
investment in companies that embody positive values. With increasing
regularity, we are being asked by corporate executives, "We know what types of
companies you don't want, but what are the values and characteristics you do
want to invest in?" Our faith challenges us to take a positive view and
approach to our world. We recognize the need to move beyond the SRI industry's
traditional "negative screens" and are pursuing our positive view of screening
in a variety of ways.
We continued efforts to invest in companies/1/ that reflected the positive
social values inherent in a stewardship investing approach to decision-making.
These included holdings in the MMA Praxis Intermediate Income Fund such as
Enron, whose progressive emphasis on natural gas, solar, and wind power offers
significant environmental benefits over coal, oil, or nuclear power. We have
also invested in Federal Express, the world's #1 express transport company,
whose strong community relations programs, no-layoff policies, and charitable
alliances made it one of the top companies for social management in 1999.
In the MMA Praxis Growth Fund, Newell Rubbermaid exemplifies our desire to
include companies who consistently pursue recycling and reduction techniques
within their production processes. This company also has a global
supplier/subcontractor code of conduct to address such issues as child labor,
bonded labor, working conditions, and worker safety. It also performs routine
audits of supplier facilities to ensure its code is being met.
Our "pursuit of positives" was also evident in the MMA Praxis International
Fund where companies like Fujitsu and Vodafone Airtouch represent progressive
approaches to global environmental sustainability. Dutch KPN embodies a
commitment to innovative employee relations and benefits that seeks to invest
in a productive, energetic, and committed work force.
MMA Praxis took a significant step forward in efforts to reorient itself more
fully around a positive approach to investing. In early November, we hosted
"Anabaptism and Business Today", a one and one-half day conference that helped
deepen our appreciation for how we, as active shareholders, could be involved
in living out our holistic, socially-aware faith values. The gathering was
part of a larger process of revising our ethical investment guidelines to
reflect a deeper and more positively focused approach to company evaluation.
We hope for this process to be complete by the end of 2000.
Efforts in corporate advocacy. One of our shareholder advocacy efforts in 1999
surrounded the devastating international environmental issues of the Three
Gorges Dam development in China. Domestically, we engaged in vocal support of
community investing through our assistance to the White House as they prepared
for President Clinton's first New Markets Tour in July. We also provided
encouragement to congressional and corporate leaders in supporting the
Community Reinvestment Act up for renewal on Capitol Hill.
1999 was an exciting and busy year for MMA Praxis, and the year 2000 promises
to be none the quieter. We believe strongly in balancing the financial and
social consequences of investing your dollars, and promise to keep you
informed on our journey's progress.
Mark A. Regier
SRI Research and Advocacy Coordinator
- ---------
/1/The Fund's portfolio composition is subject to change.
-15-
<PAGE>
MMA Praxis Mutual Funds
Frequently asked questions about MMA Praxis Mutual Funds
Q. I have read that while 90 percent of all Americans donate to charities,
only 7 percent donate securities. I also read somewhere that there are
specific benefits in gifting appreciated stock and mutual funds. Can you
provide more details on this gifting strategy?
A. Indeed, by donating stock or mutual fund assets, investors not only avoid
the 20 percent capital gains tax on the sale of appreciated securities, but
also get a charitable deduction of up to 30 percent of their adjusted gross
income. The financial advantages of gifting appreciated securities as
opposed to straight cash gifts are quite compelling. The chart below
highlights these benefits.
If this gifting approach appeals to you, The Mennonite Foundation in
Goshen, Ind. (1-800-348-7468) offers a charitable gift fund that provides a
flexible way for you to support the charities of your choice. Here's how it
works. Say you want to give 200 shares of your MMA Praxis Mutual Fund. A
transfer of ownership form is completed naming, Mennonite Foundation as new
owner of the shares.
The shares are subsequently sold and converted to cash and placed in your
charitable gift account. The money is then available for distribution to
charities you recommend (non-binding advice). The dollars can be
distributed next month, next year, or anytime in the near or distant
future. It is like having a charitable checking account!
More and more people are discovering the advantages of gifting appreciated
securities. Call the phone number above for more complete information.
Q. I have noticed that the amount of tax I have to pay on my MMA Praxis Mutual
Fund account varies from year to year. Can you explain why this happens and
how mutual fund distributions are taxed?
A. Fortunately, you don't need an accounting or law degree to understand the
basics of taxes in mutual funds. A mutual fund is not taxed on the income
or profits it earns on its investments as long as it passes those earnings
on to its shareholders. The shareholders, in turn, pay any taxes due.
The two types of distributions that mutual funds make are income and
capital gain distributions. Income distributions represent all interest and
dividend income earned on securities held by the fund and is calculated
after subtracting the fund's operating expenses. Capital gain distributions
represent the profit a fund makes when it sells stocks and bonds. When a
fund makes a profit on the sales of a fund holding, a capital gain is
realized and passed on to shareholders.
Generally, all mutual fund income and capital gain distributions are
taxable. This is the case even when the distribution is reinvested to
repurchase more shares. Distributions, which occur in IRAs or other
retirement accounts are tax deferred. As with all tax-related questions, it
is best to speak with a tax professional about your specific situation.
<TABLE>
<CAPTION>
28% bracket 36% bracket
------------------ ------------------
Donating Sell Then Donating Sell Then
directly donate directly donate
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Total proceeds to charity.............. $25,000 $20,500 $25,000 $20,500
Long-term capital gains (20% rate)..... $ 0 $ 4,500 $ 0 $ 4,500
Income tax deduction................... $ 7,000 $ 5,740 $ 9,000 $ 7,380
Total tax savings...................... $ 7,000 $ 1,240 $ 9,000 $ 2,880
</TABLE>
-16-
<PAGE>
Table of Contents
Report of Independent Accountants
Page 18
Statements of Assets and Liabilities
Page 19
Statements of Operations
Page 20
Statements of Changes in Net Assets
Page 21
Schedules of Portfolio Investments
Page 23
Notes to Financial Statements
Page 32
Financial Highlights
Page 38
-17-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholder and Trustees of
MMA Praxis Mutual Funds:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of portfolio investments, and the related statements
of operations and changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of MMA Praxis
Intermediate Income Fund, MMA Praxis Growth Fund and MMA Praxis International
Fund (three funds constituting MMA Praxis Mutual Funds, hereafter referred to
as the "Funds") at December 31, 1999 and the results each of their operations
for the year then ended, the changes in each of their net assets for the two
years then ended and the financial highlights for each of the periods
presented, 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 Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these 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.
PricewaterhouseCoopers LLP
Columbus, Ohio
February 21, 2000
-18-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Statements of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
Intermediate
Income Growth International
Fund Fund Fund
------------ ------------ -------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost $52,026,259, $160,815,663 and
$40,022,863, respectively)................................ $49,820,666 $168,325,041 $59,454,989
Cash....................................................... 165,619 298,915 --
Foreign currency at value (cost $69,891)................... -- -- 69,650
Interest and dividends receivable.......................... 820,786 197,772 33,602
Receivable for capital shares issued....................... 11,000 7,000 36,515
Tax reclaim receivable..................................... -- -- 45,627
Deferred organizational costs.............................. -- -- 9,196
Prepaid expenses and other assets.......................... 9,074 17,606 4,563
----------- ------------ -----------
Total Assets............................................ 50,827,145 168,846,334 59,654,142
----------- ------------ -----------
LIABILITIES:
Cash overdraft............................................. -- -- 864,419
Accrued expenses and other payables:
Investment advisory fees.................................. -- 49,520 24,544
Administration fees....................................... 839 2,768 982
Distribution fees......................................... 19,587 101,042 23,730
Shareholder servicing fees................................ 567 13,616 545
Other..................................................... 25,479 75,473 15,509
----------- ------------ -----------
Total Liabilities....................................... 46,472 242,419 929,729
----------- ------------ -----------
NET ASSETS:
Capital stock, at par value................................ 53,703 112,806 32,263
Additional paid-in-capital................................. 53,039,639 156,496,619 38,623,024
Accumulated undistributed (distributions in excess of) net
investment income/(loss).................................. 6,762 (102) (584,919)
Accumulated undistributed net realized gains (losses) from
investments and foreign currency transactions............. (113,838) 4,485,214 1,223,351
Net unrealized appreciation (depreciation) from investments
and translation of assets and liabilities in foreign
currencies................................................ (2,205,593) 7,509,378 19,430,694
----------- ------------ -----------
Total Net Assets........................................ $50,780,673 $168,603,915 $58,724,413
=========== ============ ===========
Net Assets
Class A................................................... $17,669,587 $ 10,317,595 $24,215,348
Class B................................................... 33,111,086 158,286,320 34,509,065
----------- ------------ -----------
Total................................................... $50,780,673 $168,603,915 $58,724,413
=========== ============ ===========
Shares of beneficial units outstanding
(unlimited number of shares authorized with $.01 par value)
Class A................................................... 1,868,781 686,940 1,331,593
Class B................................................... 3,501,536 10,593,704 1,894,754
----------- ------------ -----------
Total................................................... 5,370,317 11,280,644 3,226,347
=========== ============ ===========
Net asset value
Class A--redemption price per share....................... $ 9.46 $ 15.02 $ 18.19
=========== ============ ===========
Class B--offering price per share*........................ $ 9.46 $ 14.94 $ 18.21
=========== ============ ===========
Maximum Sales Charge--Class A.............................. 3.75% 5.25% 5.25%
=========== ============ ===========
Maximum Offering Price (100%-Maximum Sales Charge) of net
asset value adjusted to nearest cent) per share--Class A.. $ 9.83 $ 15.85 $ 19.20
=========== ============ ===========
</TABLE>
- ---------
* Redemption price per share (Class B) varies by length of time shares are
held. (See note #4)
See notes to financial statements.
-19-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Statements of Operations
For the year ended December 31, 1999
<TABLE>
<CAPTION>
Intermediate Growth International
Income Fund Fund Fund
------------ ----------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest................................ $ 3,131,529 $ 235,777 $ 90,270
Dividends............................... -- 1,877,159 676,629
Foreign tax withholding................. -- -- (73,686)
----------- ----------- -----------
Total Income.......................... 3,131,529 2,112,936 693,213
----------- ----------- -----------
EXPENSES:
Investment advisory fees................ 239,374 1,161,307 376,494
Administration fees..................... 71,798 229,375 62,606
Distribution fees--Class A.............. 22,325 12,194 25,187
Distribution fees--Class B.............. 291,755 1,140,274 237,696
Shareholder servicing fees--Class A..... 22,325 12,194 25,187
Shareholder servicing fees--Class B..... 97,252 380,091 79,232
Custodian and accounting fees........... 47,399 59,418 108,299
Organization costs...................... -- -- 3,516
Trustees' fees and expenses............. 5,800 20,143 4,910
Transfer agent fees..................... 113,123 442,318 125,541
Other expenses.......................... 79,539 210,922 74,569
----------- ----------- -----------
Total expenses before reimbursements
from investment advisors and
voluntary fee reductions............. 990,690 3,668,236 1,123,237
Expenses voluntarily reduced.......... (457,196) (942,678) (343,126)
Expenses paid by third parties........ (5,003) (5,473) --
----------- ----------- -----------
Total Expenses........................ 528,491 2,720,085 780,111
----------- ----------- -----------
Net Investment Income................... 2,603,038 (607,149) (86,898)
----------- ----------- -----------
NET REALIZED AND UNREALIZED GAINS/(LOSSES) ON INVESTMENTS:
Net realized gains (losses) from
investment transactions................. (113,260) 23,539,529 3,455,179
Net realized gains (losses) from foreign
currency transactions................... -- -- 12,338
Net change in unrealized
appreciation/(depreciation)
from investments and translation of
assets and liabilities
in foreign currencies.................. (3,345,091) (5,736,667) 13,653,238
----------- ----------- -----------
Net realized and unrealized
gains/(losses) on investments........... (3,458,351) 17,802,862 17,120,755
----------- ----------- -----------
Net increase/(decrease) in net assets
resulting from operations............... $ (855,313) $17,195,713 $17,033,857
=========== =========== ===========
</TABLE>
See notes to financial statements.
-20-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Intermediate Income Growth International
Fund Fund Fund
-------------------------- -------------------------- --------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
From Investment
Activities:
Operations:
Net investment income
(loss)................. $ 2,603,038 $2,026,329 $ (607,149) $ (24,866) $ (86,898) $ (78,602)
Net realized gains
(losses) from invest-
ment transactions..... (113,260) 363,895 23,539,529 11,456,000 3,455,179 (1,122,800)
Net realized gains
(losses) from foreign
currencytransactions.. -- -- -- -- 12,338 33,141
Net change in
unrealized
appreciation
(depreciation) from
investments and
translation of assets
and liabilities in
foreign currencies.... (3,345,091) 243,295 (5,736,667) (5,004,409) 13,653,238 5,880,223
----------- ---------- ----------- ----------- ----------- ----------
Change in net assets
resulting from
operations............. (855,313) 2,633,519 17,195,713 6,426,725 17,033,857 4,711,962
----------- ---------- ----------- ----------- ----------- ----------
Distributions to
Shareholders:
Class A
From net investment
income................. (604,477) -- -- -- -- --
In excess of net
investment income...... -- -- -- -- (141,157) --
From net realized gains
from investment trans-
actions............... (10,070) -- (1,313,170) -- (382,467) --
----------- ---------- ----------- ----------- ----------- ----------
Change in Class A net
assets from
distributions to
shareholders........... (614,547) -- (1,313,170) -- (523,624) --
----------- ---------- ----------- ----------- ----------- ----------
Class B
From net investment
income................. (1,991,531) (2,026,329) -- -- -- --
In excess of net
investment income..... -- (871) -- (5,594) (49,910) (229,547)
From net realized gains
from investment trans-
actions............... (18,695) (50,583) (20,072,304) (10,523,193) (492,504) --
In excess of net
realized gains from
investment
transactions ......... -- -- -- -- -- (18,574)
----------- ---------- ----------- ----------- ----------- ----------
Change in Class B net
assets from
distributions to
shareholders........... (2,010,226) (2,077,783) (20,072,304) (10,528,787) (542,414) (248,121)
----------- ---------- ----------- ----------- ----------- ----------
Capital Transactions:
Class A
Proceeds from shares
issued................. 18,247,252 -- 11,101,874 -- 21,350,035 --
Dividends reinvested... 79,282 -- 743,404 -- 330,956 --
Cost of shares
redeemed............... (166,478) -- (107,225) -- (3,225,953) --
----------- ---------- ----------- ----------- ----------- ----------
Change in net assets
from
capital transactions... 18,160,056 -- 11,738,053 -- 18,455,038 --
----------- ---------- ----------- ----------- ----------- ----------
</TABLE>
Continued
-21-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Statements of Changes in Net Assets, Continued
<TABLE>
<CAPTION>
Intermediate Income Growth International
Fund Fund Fund
-------------------------- -------------------------- --------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31, December 31,
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Class B
Proceeds from shares
issued................. $ 13,176,744 $ 9,897,569 $ 26,241,426 $ 37,346,093 $ 18,567,201 $10,642,995
Dividends reinvested... 1,543,571 1,065,580 19,795,898 10,073,822 616,769 100,821
Cost of shares
redeemed............... (21,007,247) (2,470,626) (21,957,827) (10,651,224) (26,045,407) (1,290,098)
------------ ----------- ------------ ------------ ------------ -----------
Change in net assets
from capital
transactions........... (6,286,932) 8,492,523 24,079,497 36,768,691 (6,861,437) 9,453,718
------------ ----------- ------------ ------------ ------------ -----------
Change in net assets.... 8,393,038 9,048,259 31,627,789 32,666,629 27,561,420 13,917,559
------------ ----------- ------------ ------------ ------------ -----------
Net Assets:
Beginning of period.... 42,387,635 33,339,376 136,976,126 104,309,497 31,162,993 17,245,434
------------ ----------- ------------ ------------ ------------ -----------
End of period.......... $ 50,780,673 $42,387,635 $168,603,915 $136,976,126 $ 58,724,413 $31,162,993
============ =========== ============ ============ ============ ===========
Share Transactions:
Class A
Issued................. 1,877,777 -- 642,764 -- 1,503,829 --
Reinvested............. 8,230 -- 50,657 -- 20,127 --
Redeemed............... (17,226) -- (6,481) -- (192,363) --
------------ ----------- ------------ ------------ ------------ -----------
Change in shares........ 1,868,781 -- 686,940 -- 1,331,593 --
============ =========== ============ ============ ============ ===========
Class B
Issued................. 1,335,490 976,210 1,597,846 2,319,601 1,289,972 860,904
Reinvested............. 157,387 105,231 1,351,042 687,391 39,141 8,374
Redeemed............... (2,159,027) (243,888) (1,312,227) (687,305) (1,822,269) (105,160)
------------ ----------- ------------ ------------ ------------ -----------
Change in shares........ (666,150) 837,553 1,636,661 2,319,687 (493,156) 764,118
============ =========== ============ ============ ============ ===========
</TABLE>
See notes to financial statements.
-22-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Intermediate Income Fund
Schedule of Portfolio Investments
December 31, 1999
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Asset Backed Securities (1.5%)
$ 250,000 American Express Master Trust, Series 1994-3, Class
A, 7.85%, 8/15/05................................... $ 256,880
500,000 Discover Card Master Trust, Series 1999-2, Class A,
5.90%, 10/15/04..................................... 489,490
-----------
Total Asset Backed Securities (Cost $747,079) 746,370
-----------
Collateralized Mortgage Obligations (4.4%)
500,000 Federal Home Loan Mortgage Corp., Series T-11, Class
A4, 6.50%, 3/25/11.................................. 475,819
351,000 Federal National Mortgage Assoc., Series 1996-M6,
Class G, 7.75%, 9/17/23, ACES....................... 352,974
550,000 Federal National Mortgage Assoc., Series 1997-M4,
Class C, 7.30%, 8/17/18, ACES....................... 561,000
337,732 Small Business Investment Companies, Series 1995-
P10C, Class 1, 6.00%, 9/25/18....................... 336,044
500,000 Vendee Mortgage Trust, Series 1993-2, Class I, 6.75%,
3/15/06............................................. 494,555
-----------
Total Collateralized Mortgage Obligations (Cost $2,220,575) 2,220,392
-----------
Corporate Bonds (58.2%)
Banks (0.7%)
350,000 NationsBank Corp., 7.00%, 9/15/01 (b)................ 350,000
-----------
Broadcasting/Cable (1.5%)
500,000 CSC Holdings Inc., 8.13%, 7/15/09.................... 498,750
250,000 TCI Communications Inc., 8.65%, 9/15/04.............. 263,750
-----------
762,500
-----------
Brokerage Services (2.4%)
750,000 Goldman Sachs Group, 6.65%, 5/15/09.................. 697,500
500,000 Morgan Stanley, Dean Witter, Discover & Co., 9.38%,
6/15/01............................................. 516,250
-----------
1,213,750
-----------
Chemicals--General (0.9%)
500,000 Witco Corp., 6.60%, 4/1/03........................... 480,000
-----------
Data Processing & Reproduction (1.8%)
1,000,000 First Data Corp., 5.80%, 12/15/08.................... 890,000
-----------
Entertainment (0.9%)
500,000 Harman International Ind., 7.32%, 7/1/07............. 468,125
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Financial Services (5.5%)
$1,000,000 Comdisco Inc., 6.00%, 1/30/02........................ $ 967,500
500,000 Crown Cork & Seal Financial PLC, 7.00%, 12/15/06..... 471,875
500,000 Equifax, Inc., 6.90%, 7/1/28......................... 438,125
137,500 Export Funding Trust, Series 1994-A, Class A, 7.89%,
2/15/05............................................. 140,851
250,000 Golden West Financial Corp., 10.25%, 12/1/00......... 256,875
500,000 Osprey Trust, 8.31%, 1/15/03 (b)..................... 495,000
-----------
2,770,226
-----------
Food Distributors & Wholesalers (1.0%)
250,000 Secured Finance, Inc.--Kroger, 9.05%, 12/15/04....... 260,938
260,000 SUPERVALU, Inc., 7.80%, 11/15/02..................... 263,575
-----------
524,513
-----------
Food Products (1.8%)
500,000 Dean Foods Co., 6.90%, 10/15/17...................... 456,250
500,000 Sara Lee Corp., 5.75%, 9/3/03........................ 476,875
-----------
933,125
-----------
Forest Products--Lumber & Paper (3.1%)
212,000 Westvaco Corp., 10.25%, 7/1/18, Callable 3/6/00 @
104.61.............................................. 222,070
500,000 Westvaco Corp., 7.75%, 2/15/23, Callable 2/15/03 @
103.62.............................................. 465,000
1,000,000 Weyerhaeuser Co., 6.95%, 8/1/17...................... 908,750
-----------
1,595,820
-----------
Heavy Machinery (0.5%)
250,000 John Deere Capital Corp., 8.63%, 8/1/19, Callable
8/1/04 @100......................................... 256,875
-----------
Industrial Goods & Services (8.2%)
1,000,000 American Greetings, 6.10%, 8/1/28.................... 895,000
500,000 Boston Scientific Corp., 6.63%, 3/15/05.............. 461,250
1,020,000 CSR America, Inc., 6.875%, 7/21/05................... 968,999
500,000 Masco Corp., 6.13%, 9/15/03.......................... 484,375
1,000,000 Masco Corp., 7.13%, 8/15/13.......................... 951,250
500,000 Service Corp. International, 6.30%, 3/15/03.......... 428,750
-----------
4,189,624
-----------
</TABLE>
Continued
-23-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Intermediate Income Fund
Schedule of Portfolio Investments, Continued
December 31, 1999
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Insurance (3.2%)
$ 250,000 Allstate Corp., 6.75%, 6/15/03 (b)................... $ 245,625
500,000 Chubb Corp., 6.15%, 8/15/05.......................... 472,500
500,000 Harleysville Group, Inc., 6.75%, 11/15/03............ 490,000
400,000 Protective Life Corp., 7.95%, 7/1/04................. 405,000
-----------
1,613,125
-----------
Medical Equipment & Supplies (0.9%)
500,000 Hillenbrand Industries, 7.00%, 2/15/24............... 451,250
-----------
Metals--Fabrication (0.9%)
500,000 Worthington Industries, Inc., 7.13%, 5/15/06......... 477,500
-----------
Oil & Gas Exploration, Production & Services (0.5%)
250,000 Louisiana Land & Exploration Co., 8.25%, 6/15/02..... 253,125
-----------
Oil & Gas Transmission (4.4%)
500,000 El Paso Energy Corp., 6.75%, 5/15/09................. 465,000
100,000 Questar Pipeline Co., 9.88%, 6/1/20, Callable 6/1/00
@ 104.67............................................ 105,625
500,000 Sonat Inc., 7.63%, 7/15/11........................... 481,875
715,000 Sonat, Inc., 6.88%, 6/1/05........................... 699,806
500,000 Tennessee Gas Pipeline Co., 7.50%, 4/1/17............ 471,875
-----------
2,224,181
-----------
Paper Products (1.0%)
500,000 Westvaco Corp., 6.85%, 11/15/04...................... 486,875
-----------
Printing & Publishing (1.7%)
500,000 R.R. Donnelley & Sons Co., 6.625%, 4/15/29........... 425,625
500,000 Valassis Communications, 6.63%, 1/15/09.............. 448,750
-----------
874,375
-----------
Railroads (0.5%)
250,000 Conrail, Inc., 9.75%, 6/1/00......................... 253,438
-----------
Retail--Department Stores (3.0%)
300,000 Dayton Hudson Co., 8.50%, 12/1/22, Callable 12/1/02 @
103.75.............................................. 308,625
500,000 Federated Department Stores, 8.50%, 6/15/03.......... 515,000
</TABLE>
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
Corporate Bonds, continued:
Retail--Department Stores, continued:
$ 250,000 Kohl's Corp., 6.70%, 2/1/06.......................... $ 238,125
500,000 Kohl's Corp., 7.25%, 6/1/29.......................... 453,125
-----------
1,514,875
-----------
Software & Computer Services (1.0%)
500,000 Sun Microsystems Inc., 7.00%, 8/15/02................ 498,125
-----------
Textile Manufacturing (1.0%)
500,000 VF Corp., 7.60%, 4/1/04, Callable 4/1/01 @ 100....... 506,250
-----------
Transportation Services (5.7%)
700,000 Federal Express, 9.88%, 4/1/02....................... 735,874
400,000 Federal Express, 10.13%, 7/15/03..................... 430,500
250,000 GATX Corp., 8.63%, 12/1/04........................... 262,188
500,000 Golden State Petroleum, 8.04%, 2/1/19................ 437,500
500,000 Union Tank Car Co., 6.00%, 3/15/02................... 487,500
600,000 Union Tank Car Co., 7.13%, 2/1/07.................... 586,500
-----------
2,940,062
-----------
Utilities--Natural Gas (1.0%)
500,000 Michigan Consolidated Gas Co., 8.25%, 5/1/14......... 516,250
-----------
Utilities--Electric (2.8%)
500,000 Cincinnati Gas & Electric, 6.35%, 6/15/03............ 482,500
300,000 Puget Sound Energy, 6.46%, 3/9/09.................... 274,875
750,000 Texas New Mexico Power, 6.25%, 1/15/09............... 639,375
-----------
1,396,750
-----------
Utilities--Telecommunications (2.3%)
500,000 Ameritech Capital Funding Corp., 6.13%, 10/15/01..... 493,750
250,000 Ameritech Capital Funding Corp., 5.95%, 1/15/38,
Putable 1/15/05
@ 100............................................... 235,938
500,000 Frontier Corp., 6.00%, 10/15/03...................... 447,500
-----------
1,177,188
-----------
Total Corporate Bonds (Cost $31,232,186) 29,617,927
-----------
Medium Term Notes (2.0%)
Financial Services (0.5%)
250,000 Capital Holding Corp., Series B, 9.27%, 5/7/01....... 257,187
-----------
</TABLE>
Continued
-24-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Intermediate Income Fund
Schedule of Portfolio Investments, Continued
December 31, 1999
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
Medium Term Notes, continued:
Food Products (0.5%)
$ 250,000 International Multifoods Corp.,
Series A, 6.71%, 10/5/00............................. $ 249,063
-----------
Utilities--Natural Gas (0.5%)
250,000 UGI Utilities, Inc., Series B, 7.17%, 6/15/07......... 245,000
-----------
Utilities--Electric (0.5%)
250,000 Kentucky Power Co., 6.65%, 5/1/03..................... 245,625
-----------
Total Medium Term Notes (Cost $1,007,193) 996,875
-----------
U.S. Government Agencies (32.0%)
Fannie Mae (15.1%)
500,000 6.45%, 4/23/01........................................ 500,000
1,000,000 5.68%, 10/2/01........................................ 1,000,509
484,538 6.47%, 12/1/01........................................ 479,198
500,000 6.41%, 2/6/02......................................... 498,520
450,000 7.38%, 9/1/06......................................... 451,097
982,301 6.24%, 4/1/08......................................... 920,066
486,593 7.45%, 10/1/11........................................ 489,294
368,209 6.50%, 3/1/18......................................... 350,660
841,254 6.50%, 5/1/18......................................... 797,762
669,268 6.50%, 6/1/18......................................... 634,091
800,000 5.63%, 4/17/28........................................ 651,840
1,000,000 6.25%, 5/15/29........................................ 892,500
-----------
7,665,537
-----------
Federal Home Loan Bank (3.7%)
650,000 5.74%*, 1/12/00....................................... 649,285
500,000 5.63%, 9/5/01......................................... 492,950
250,000 6.25%, 8/13/04........................................ 244,063
500,000 6.375%, 8/15/06....................................... 483,620
-----------
1,869,918
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal Market
Amount Value
---------- ------------------------------------------------------ -----------
<C> <S> <C>
U.S. Government Agencies, continued:
Freddie Mac (5.4%)
$ 250,000 6.25%, 10/15/02....................................... $ 247,650
303,579 7.00%, 11/1/07........................................ 301,703
1,450,000 5.75%, 3/15/09........................................ 1,324,938
572,779 6.00%, 1/1/14......................................... 545,589
340,746 6.50%, 11/1/15........................................ 325,480
-----------
2,745,360
-----------
Ginnie Mae (5.7%)
440,283 6.875%, 9/15/08....................................... 434,453
291,590 7.50%, 2/15/23........................................ 288,718
484,576 6.00%, 12/20/27....................................... 491,540
429,805 7.00%, 2/20/29........................................ 413,752
498,471 7.50%, 10/20/29....................................... 490,696
299,802 7.75%, 11/15/29....................................... 299,613
497,903 6.50%, 5/15/34........................................ 467,406
-----------
2,886,178
-----------
Small Business Administration (0.2%)
85,859 6.25%, 9/25/18, Pool #502410.......................... 85,859
-----------
Student Loan Mortgage Association (1.9%)
1,000,000 1997-3, Class A2, 0.00%, 10/25/10..................... 986,250
-----------
Total U.S. Government Agencies (Cost $16,819,226) 16,239,102
-----------
Total Investments
(Cost $52,026,259)(a)--98.1% 49,820,666
Other assets in excess of liabilities--1.9% 960,007
-----------
Total Net Assets--100.0% $50,780,673
===========
</TABLE>
- ---------
Percentages indicated are based on net assets of $50,780,673.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of
$24,678. Cost for federal income tax purposes differs from market value
by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized
appreciation........ $ 57,295
Unrealized
depreciation........ (2,287,566)
-----------
Net unrealized
depreciation........ $(2,230,271)
===========
</TABLE>
(b) 144a security which is restricted as to resale to institutional
investors.
(*) Effective yield at purchase.
ACES--Automatic Common Exchange Securities
PLC--Public Liability Co.
See notes to financial statements.
-25-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Growth Fund
Schedule of Portfolio Investments
December 31, 1999
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stocks (95.2%)
Automotive Parts (1.9%)
210,000 Wabash National Corp................................. $ 3,150,000
------------
Banks (5.1%)
45,000 BankAmerica Corp..................................... 2,258,437
63,000 Bank One Corp........................................ 2,019,938
52,000 KeyCorp.............................................. 1,150,500
80,000 Wells Fargo Co....................................... 3,234,999
------------
8,663,874
------------
Beverages (1.5%)
73,000 PepsiCo, Inc......................................... 2,573,250
------------
Building Materials (1.4%)
54,000 Fastenal Co.......................................... 2,426,625
------------
Chemicals--General (2.0%)
32,000 Air Products & Chemicals, Inc........................ 1,074,000
75,000 Sigma-Aldrich Corp................................... 2,254,688
------------
3,328,688
------------
Computers & Peripherals (7.7%)
38,000 Cisco Systems, Inc. (b).............................. 4,070,749
71,000 Compaq Computer Corp................................. 1,921,438
35,000 Hewlett-Packard Co................................... 3,987,812
21,000 Intel Corp........................................... 1,728,563
16,000 Sun Microsystems, Inc. (b)........................... 1,239,000
------------
12,947,562
------------
Consumer Goods & Services (1.0%)
15,000 Procter & Gamble Co.................................. 1,643,438
------------
Cosmetics & Toiletries (3.1%)
55,000 Gillette Co.......................................... 2,265,313
45,000 Kimberly Clark Corp.................................. 2,936,250
------------
5,201,563
------------
Electronic & Electrical--General (6.3%)
18,000 Altera Corp. (b)..................................... 892,125
25,000 Emerson Electric Co.................................. 1,434,375
12,000 JDS Uniphase Corp. (b)............................... 1,935,750
40,000 Texas Instruments, Inc............................... 3,874,999
80,000 Thomas & Betts Corp.................................. 2,550,000
------------
10,687,249
------------
Environmental Control (1.0%)
62,900 Ionics, Inc. (b)..................................... 1,769,063
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued
Financial Services (4.5%)
64,000 Fannie Mae........................................... $ 3,996,000
78,000 Freddie Mac.......................................... 3,670,875
------------
7,666,875
------------
Food Distributors & Wholesalers (1.7%)
90,000 Albertsons, Inc...................................... 2,902,500
------------
Food Products (1.1%)
86,000 Sara Lee Corp........................................ 1,897,375
------------
Forest Products--Lumber & Paper (2.0%)
73,000 Willamette Industries, Inc........................... 3,389,938
------------
Home Decoration Products (0.9%)
51,000 Newell Rubbermaid, Inc............................... 1,479,000
------------
Industrial Goods & Services (1.3%)
87,000 Masco Corp........................................... 2,207,625
------------
Insurance (3.1%)
142,000 Allstate............................................. 3,408,000
33,000 Chubb Corp........................................... 1,858,313
------------
5,266,313
------------
Medical Supplies (5.7%)
56,500 Biomet, Inc.......................................... 2,260,000
150,000 Boston Scientific Corp. (b).......................... 3,281,249
25,000 Johnson & Johnson, Inc............................... 2,328,125
57,000 St. Jude Medical, Inc. (b)........................... 1,749,188
------------
9,618,562
------------
Newspapers (1.1%)
21,900 Gannett Co., Inc..................................... 1,786,219
------------
Office Equipment & Service (4.6%)
92,000 Pitney Bowes, Inc.................................... 4,444,750
147,000 Xerox Corp........................................... 3,335,063
------------
7,779,813
------------
Oil & Gas Exploration, Production & Services (5.1%)
57,000 Anadarko Petroleum Corp.............................. 1,945,125
200,000 R&B Falcon Corp. (b)................................. 2,650,000
80,000 The Williams Cos., Inc............................... 2,445,000
45,000 Transocean Sedeo Forex, Inc.......................... 1,515,938
------------
8,556,063
------------
Oil & Gas Transmission (0.8%)
36,200 El Paso Energy Corp.................................. 1,405,013
------------
</TABLE>
Continued
-26-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Growth Fund
Schedule of Portfolio Investments, Continued
December 31, 1999
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued
Oil--Integrated Companies (2.3%)
25,000 Atlantic Richfield Co................................ $ 2,162,500
30,000 BP Amoco PLC ADR..................................... 1,779,375
------------
3,941,875
------------
Oilfield Services & Equipment (1.5%)
145,000 Petroleum Geo-Services, Sponsored ADR (b)............ 2,582,813
------------
Pharmaceuticals (5.2%)
80,000 ALZA Corp. (b)....................................... 2,769,999
20,000 Bristol-Myers Squibb Co.............................. 1,283,750
34,000 Eli Lilly & Co....................................... 2,261,000
36,000 Merck & Co., Inc..................................... 2,414,250
------------
8,728,999
------------
Precision Instruments & Related (0.2%)
8,600 Dionex Corp. (b)..................................... 354,213
------------
Printing & Publishing (2.2%)
64,000 Electronics for Imaging, Inc. (b).................... 3,720,000
------------
Retail (2.4%)
56,250 Dollar General Corp.................................. 1,279,688
47,000 Lowe's Cos., Inc..................................... 2,808,250
------------
4,087,938
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------------------------------------------------- ------------
<C> <S> <C>
Common Stocks, continued
Software & Computer Services (4.3%)
36,000 First Data Corp...................................... $ 1,775,250
32,000 Microsoft Corp. (b).................................. 3,735,999
75,000 Newbridge Networks Corp. (b)......................... 1,692,188
------------
7,203,437
------------
Technology (0.6%)
8,000 Applied Materials, Inc. (b).......................... 1,013,500
------------
Telecommunications (5.9%)
57,000 AT&T Corp............................................ 2,892,750
70,500 MCI Worldcom, Inc. (b)............................... 3,740,905
65,000 SBC Communications, Inc.............................. 3,168,750
------------
9,802,405
------------
Telecommunications--Services & Equipment (7.7%)
120,000 Broadwing Inc. (b)................................... 4,424,999
55,000 Lucent Technologies, Inc............................. 4,114,688
23,000 Scientific-Atlanta, Inc.............................. 1,279,375
48,000 Tellabs, Inc. (b).................................... 3,081,000
------------
12,900,062
------------
Total Common Stocks (Cost $152,948,029) 160,681,850
------------
Preferred Stocks (0.3%)
Automotive Parts (0.3%)
27,500 Dura Automotive Systems, 7.50%, 3/31/28 (b).......... 457,188
------------
Total Preferred Stocks (Cost $687,500) 457,188
------------
</TABLE>
Continued
-27-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Growth Fund
Schedule of Portfolio Investments, Continued
December 31, 1999
<TABLE>
<CAPTION>
Shares or
Principal Market
Amount Value
---------- ----------------------------------------------------- ------------
<C> <S> <C>
U.S. Government Agencies (4.3%)
Federal Home Loan Bank (0.8%)
$1,300,000 5.74%*, 1/12/00...................................... $ 1,298,570
------------
Freddie Mac (3.5%)
5,900,000 5.67%*, 1/20/00...................................... 5,887,433
------------
Total U.S. Government Agencies (Cost $7,180,134) 7,186,003
------------
Total Investments (Cost $160,815,663 (a)--99.8% 168,325,041
Other assets in excess of liabilities--0.2% 278,874
------------
Total Net Assets--100.0% $168,603,915
============
</TABLE>
- -------
Percentages indicated are based on net assets of $168,603,915.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of
$26,120. Cost for federal income tax purposes differs from market value
by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized
appreciation....... $ 22,972,829
Unrealized
depreciation....... (15,489,571)
------------
Net unrealized
appreciation....... $ 7,483,258
============
</TABLE>
(b) Represents non-income producing securities.
(*) Effective yield at purchase
ADR--American Depository Receipt
See notes to financial statements.
-28-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
International Fund
Schedule of Portfolio Investments
December 31, 1999
<TABLE>
<CAPTION>
Market
Shares Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks (101.2%)
Australia (0.9%)
Banks (0.9%)
76,682 Australia & New Zealand Banking Group.................... $ 555,925
-----------
Brazil (1.5%)
Telecommunications (1.5%)
31,670 Embratel Participacoes SA (b)............................ 863,008
-----------
Canada (2.7%)
Telecommunications (2.7%)
17,400 BCE, Inc................................................. 1,574,669
-----------
France (9.9%)
Automotive Parts (1.2%)
9,091 Valeo SA................................................. 701,837
-----------
Chemical--Specialty (1.1%)
28,338 Rhodia SA................................................ 640,897
-----------
Food Products (2.1%)
6,780 Carrefour SA............................................. 1,251,163
-----------
Medical--Drugs (2.4%)
24,449 Aventis S.A.............................................. 1,421,759
-----------
Utilities--Water (3.1%)
19,740 Vivendi.................................................. 1,783,584
-----------
5,799,240
-----------
Germany (10.3%)
Automotive (1.7%)
32,104 Bayerische Motoren Werke AG.............................. 980,387
-----------
Chemicals--General (0.0%)
1,259 Celanese AG (b).......................................... 22,972
-----------
Electronic & Electrical--General (2.2%)
10,370 Siemens AG............................................... 1,320,013
-----------
Machinery & Engineering (4.3%)
10,282 Mannesmann AG............................................ 2,481,870
-----------
Software & Computer Services (2.1%)
2,061 SAP AG................................................... 1,242,153
-----------
6,047,395
-----------
Greece (1.0%)
Telecommunications (1.0%)
25,750 Hellenic Telecommunication Organization SA............... 613,845
-----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued
Hong Kong (1.6%)
Real Estate (1.6%)
65,000 Hutchison Whampoa Ltd.................................... $ 944,774
-----------
Italy (8.2%)
Banks (3.4%)
302,851 Banca Nazionale de Lavoro (b)............................ 1,010,306
15,298 Banca Popolare De Bergamo................................ 353,999
124,179 Credito Italiano SpA..................................... 610,751
-----------
1,975,056
-----------
Radio & Television (3.1%)
117,661 Mediaset SpA............................................. 1,830,947
-----------
Telecommunications (1.7%)
91,440 Telecom Italia Mobile SpA................................ 1,022,030
-----------
4,828,033
-----------
Japan (28.0%)
Banks (0.7%)
33,000 Sanwa Bank Ltd........................................... 400,811
-----------
Computers & Peripherals (2.2%)
28,000 Fujitsu Ltd.............................................. 1,274,966
-----------
Data Processing & Reproduction (1.1%)
23,000 Kao Corporation.......................................... 655,120
-----------
Drugs (1.3%)
15,000 Takeda Chemical Industries............................... 740,180
-----------
Electronic & Electrical--General (6.5%)
8,000 Murata Manufacturing Co. Ltd............................. 1,876,099
4,900 Rohm Co. Ltd............................................. 2,010,943
-----------
3,887,042
-----------
Financial Services (5.8%)
103,000 Fuji Bank................................................ 999,404
53,000 Nikko Securities Co., Ltd................................ 669,621
144,000 Sakura Bank Ltd.......................................... 832,988
1,120 Shohkoh Fund & Co. Ltd................................... 442,681
3,500 Takefuji Corp............................................ 437,415
-----------
3,382,109
-----------
Office Equipment (1.6%)
23,000 Canon, Inc............................................... 912,449
-----------
</TABLE>
Continued
-29-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
International Fund
Schedule of Portfolio Investments, Continued
December 31, 1999
<TABLE>
<CAPTION>
Market
Shares Value
------- ------------------------ -----------
<C> <S> <C>
Common Stocks, continued
Japan, continued
Pharmaceuticals (1.4%)
17,000 Taisho Pharmaceutical
Co., Ltd............... $ 498,339
9,000 Yamanouchi
Pharmaceuticals Co.,
Ltd.................... 313,953
-----------
812,292
-----------
Telecommunications (5.7%)
87 NTT Mobile
Communications Network,
Inc.................... 3,340,922
-----------
Utilities--Telecommunications (1.7%)
60 Nippon Telegraph &
Telephone Corp......... 1,025,992
-----------
16,431,883
-----------
Netherlands (13.3%)
Banks (1.6%)
15,290 ING Groep NV............ 923,677
-----------
Computers & Peripherals (1.1%)
5,943 Equant (b).............. 675,034
-----------
Publishing (3.1%)
34,675 Verenigde Nederlandse
Uitgeversbedrijven
Vererigd Bezit......... 1,823,545
-----------
Retail (0.9%)
19,116 Vendex NV............... 508,624
-----------
Telecommunications (0.8%)
7,394 KPNQwest NV (b)......... 492,580
-----------
Utilities--Telecommunications (5.8%)
34,406 Koninklijke KPN NV...... 3,360,114
-----------
7,783,574
-----------
New Zealand (1.2%)
Telecommunications (1.2%)
151,740 Telecom Corporation of
New Zealand Ltd........ 711,850
-----------
South Korea (1.4%)
Telecommunications (1.4%)
11,390 Korea Telecom Corp. (b). 851,403
-----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Value
------- --------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued
Spain (2.8%)
Banks (0.9%)
8,466 Banco Popular Espanol SA................................. $ 552,477
-----------
Telecommunications (1.9%)
43,365 Telefonica SA (b)........................................ 1,083,894
-----------
1,636,371
-----------
Sweden (1.1%)
Retail--Specialty Stores (1.1%)
19,008 Hennes & Mauritz AB, Class B............................. 637,657
-----------
Switzerland (2.9%)
Chemical--Specialty (1.3%)
1,602 Clariant AG.............................................. 763,480
-----------
Pharmaceuticals (1.6%)
621 Novartis AG.............................................. 911,652
-----------
1,675,132
-----------
United Kingdom (13.2%)
Chemicals--General (1.0%)
56,080 Imperial Chemical Industries PLC......................... 593,718
-----------
Food Distributors, Supermarkets & Wholesalers (0.4%)
159,200 Somerfield PLC........................................... 226,269
-----------
Health & Personal Care (3.8%)
24,714 AstraZeneca Group PLC.................................... 1,025,031
155,006 Reed International PLC................................... 1,155,365
-----------
2,180,396
-----------
Pharmaceuticals (2.1%)
43,893 Glaxo Wellcome PLC....................................... 1,243,438
-----------
Retail (1.7%)
211,090 Marks & Spencer PLC...................................... 1,005,747
-----------
Telecommunications (0.9%)
102,340 Telewest Communications PLC (b).......................... 545,868
-----------
Transportation (1.1%)
39,629 Railtrack Group PLC...................................... 665,650
-----------
Utilities--Telecommunications (2.2%)
267,692 Vodafone Group PLC....................................... 1,319,746
-----------
7,780,832
-----------
</TABLE>
Continued
-30-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
International Fund
Schedule of Portfolio Investments, Continued
December 31, 1999
<TABLE>
<CAPTION>
Market
Shares Value
------- -------------------------------------------------------- -----------
<C> <S> <C>
Common Stocks, continued
United States (1.2%)
Pharmaceuticals (0.5%)
4,530 Gedeon Richter GDR (c).................................. $ 296,032
-----------
Telecommunications (0.7%)
11,032 SK Telecom Co. Ltd...................................... 423,366
-----------
719,398
-----------
Total Common Stocks 59,454,989
-----------
Total Investments
(Cost $40,022,863)(a)--101.2% 59,454,989
Liabilities in excess of other assets--(1.2)% (730,576)
-----------
Total Net Assets--100.0% $58,724,413
===========
</TABLE>
- -------
Percentages indicated are based on net assets of $58,724,413.
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting in excess of federal income tax reporting of
$220,232 and by the amount of market to market adjustments for passive
foreign investment companies of $464,136. Cost for federal income tax
purposes differs from market value by net unrealized appreciation of
securities as follows:
<TABLE>
<S> <C>
Unrealized
appreciation......... $20,776,522
Unrealized
depreciation......... (2,028,764)
-----------
Net unrealized
appreciation......... $18,747,758
===========
</TABLE>
(b) Represents non-income producing securities.
(c) 144a security which is restricted as to resale to institutional
investors.
AG--Aktiengesellschaft (West German Stock Co.)
GDR--Global Depository Receipt
NV--Naamloze Vennootschaap (Dutch Corp.)
PLC--Public Liability Co.
SA--Societa Anonyme (French Corp.)
SpA--Societa per Azioni (Italian Corp.)
See notes to financial statements.
-31-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Notes to Financial Statements
December 31, 1999
1. Organization:
The 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 27, 1993, as amended and restated
December 1, 1993, and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Company currently consists of the
Intermediate Income Fund, the Growth Fund, and the International Fund
(individually a "Fund", collectively "the Funds"). The Intermediate Income
Fund and the Growth Fund commenced operations January 4, 1994 and the
International Fund commenced operations April 1, 1997. The Funds offer Class
A shares and Class B shares. Prior to May 3, 1999, the Funds were offered in
one class only. On May 3, 1999, the existing shares were designated as Class
B shares and the Funds commenced offering Class A shares.
The primary investment objective of the Intermediate Income Fund is to seek
current income with capital appreciation as a secondary objective. The
primary investment objective of the Growth Fund is to seek capital
appreciation with current income as a secondary objective. The primary
investment objective of the International Fund is capital appreciation, with
current income as a secondary objective. Under normal market conditions,
this Fund will invest at least 65% of the value of its total assets in
equity securities of foreign companies.
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. 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.
Securities Valuation:
Securities are valued at 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. The Funds use various independent
pricing services to value most of their investments. If market quotations
are not available, the securities will be valued by a method which the
Board of Trustees believes accurately reflects fair value.
Securities Transactions and Related Income:
Security transactions are accounted for on the trade 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. 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.
Continued
-32-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Notes to Financial Statements, Continued
December 31, 1999
Foreign Currency Translation:
The market value of investment securities, other assets and liabilities of
the International Fund denominated in foreign currencies are translated
into U.S. dollars at the current exchange rate at the close of each
business day. Purchases and sales of securities, income receipts and
expense payments are translated into U.S. dollars based at the exchange
rate on the date of the transaction.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held.
Such fluctuations are included with the net realized/unrealized gain
(loss) from investments.
Reported net realized foreign exchange gains or losses arise from sales
and maturities of short-term securities, sales of foreign currencies,
currency gains or losses realized between the trade and settlement dates
on securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes
in the value of assets and liabilities including investments in securities
at fiscal year end, resulting from changes in the exchange rate.
Forward Foreign Currency Contracts:
The International Fund may enter into forward foreign currency exchange
contracts for the purchase or sale of specific foreign currencies at a
fixed price on a future date. Risks may arise upon entering these
contracts for the potential inability of counterparties to meet the terms
of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. dollar. The International Fund will
enter into forward contracts as a hedge against specific transactions or
portfolio positions to protect against adverse currency movements. The
forward foreign currency exchange contracts are adjusted by the daily
exchange rate of the underlying currency and any gains or losses are
recorded for financial statement purposes as unrealized until the contract
settlement date, at which time the International Fund records a realized
gain or loss equal to the difference between the value of the contract at
the time it was opened and the value at the time it was closed.
Dividends and Distributions:
Dividends from net investment income are declared and paid monthly for the
Intermediate Income Fund. Dividends from net investment income are
declared and paid twice a year for the Growth Fund and the International
Fund. Distributable net realized capital gains, if any, are declared and
distributed at least annually.
The amounts of dividends from net investment income and of distributions
from net realized gains are determined in accordance with federal income
tax regulations, which may differ from generally accepted accounting
principles. These "book/tax" differences are either considered temporary
or permanent in nature. To the extent these differences are permanent in
nature, such amounts are reclassified within the composition of net assets
based on their federal tax-basis treatment; temporary differences do not
require reclassification.
Dividends and distributions to shareholders which exceed net investment
income and net realized capital gains for financial reporting purposes but
not for tax purposes are reported as dividends in excess of net investment
Continued
-33-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Notes to Financial Statements, Continued
December 31, 1999
income or distributions in excess of net realized gains. To the extent
they exceed net investment income and net realized gains for tax purposes,
they are reported as distributions of capital.
As of December 31, 1999, the following reclassifications have been made to
increase (decrease) such accounts with offsetting adjustments made to
additional paid-in-capital:
<TABLE>
<CAPTION>
Accumulated Accumulated Undistributed Net
Undistributed Net Realized Gain (Loss) on Investments
Investment Income and Foreign Currency Transactions
----------------- -----------------------------------
<S> <C> <C>
Intermediate Income
Fund.................... $ 580 $ (580)
Growth Fund............. 607,378 (607,378)
International Fund...... 31,610 (31,610)
</TABLE>
Federal Income Taxes:
It is each Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute timely, all of its net investment company taxable income and
net capital gains to shareholders. Therefore, no federal income tax
provision is required. Under the applicable foreign tax law, a withholding
tax may be imposed on interest, dividends and capital gains earned on
foreign investments at various rates. Where available, the International
Fund will file for claims on foreign taxes withheld.
Organization Costs:
Costs incurred by the Funds in connection with their 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:
Expenses that are directly related to one of the Funds are charged
directly to that Fund. Other operating expenses of the Company are
prorated to the Funds on the basis of relative net assets.
Each Fund maintains a cash balance with its custodian and receives a
reduction of their custody fees and expenses for the amounts of interest
earned on such uninvested cash balance. For financial reporting purposes
for the year ended December 31, 1999, custodian fees and expenses paid by
third parties were $5,003 and $5,473 for the Intermediate Income Fund and
the Growth Fund, respectively. There was no effect on net investment
income. The Funds could have invested such cash amounts in an income
producing asset if they had not agreed to a reduction of fees or expenses
under the expense offset arrangement with their custodian.
Continued
-34-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Notes to Financial Statements, Continued
December 31, 1999
3. Purchases and Sales of Securities:
Purchases and sales of securities (excluding short-term securities) for the
year ended December 31, 1999 were as follows:
<TABLE>
<CAPTION>
Purchases Sales
------------ ------------
<S> <C> <C>
Intermediate Income Fund............................ $ 28,741,684 $ 17,223,964
Growth Fund......................................... 126,748,454 116,681,714
International Fund.................................. 35,996,419 23,254,900
</TABLE>
4. Related Party Transactions:
Menno Insurance Service, Inc. d/b/a MMA Capital Management, (the "Adviser")
(a separate corporate entity controlled by Mennonite Mutual Aid, 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 daily net assets of each of the Funds as
follows; 0.50% for the Intermediate Income Fund, 0.74% for the Growth Fund
and 0.90% for the International Fund. Oechsle International Advisors, LLC,
serves as the sub-adviser to the International 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
administrator. Under the terms of the administration agreement, BISYS
receives fees that are computed daily at an annual rate of 0.15% of each
Fund's average net assets, with an annual minimum of $50,000 per Fund until
a Fund's net assets reach $50 million. Upon reaching $50 million the fee
will be calculated at an annual rate of 0.10% of the funds daily net assets.
BISYS serves as the Funds' distributor. The Company has adopted a
Distribution Services Plan for Class A Shares (the "Class A Plan") and a
Distribution Services Plan for Class B Shares (the "Class B Plan"), each
pursuant to Rule 12b-1 under the 1940 Act. Under the Class A Plan, each Fund
pays BISYS, as the Fund's distributor, an aggregate fee not to exceed on an
annual basis 0.50% of the average daily net assets of such Fund's Class A
Shares for distribution related activities. The aggregate fee includes not
more than 0.75% of the average daily net assets of the Fund's Class A Shares
to be used for general distribution purposes and up to 0.25% of the average
daily net assets of the Fund's Class A Shares to be used as a service fee.
Under the Class B Plan, each Fund pays BISYS an aggregate fee not to exceed
on an annual basis 1.00% of the average daily net assets of such Fund's
Class B Shares for distribution related activities. The aggregate fee
includes not more than 0.25% of the average daily net assets of the Fund's
Class B Shares to be used for general distribution purposes and up to 0.75%
of the average daily net assets of the Fund's Class B Shares to be used as a
service fee. General distribution purposes include commission payments to
broker-dealers, advertising, sales literature and other forms of marketing
activities, functions and expenses. Payments under each of the Class A Plan
and the Class B Plan may include payments to financial institutions and
broker-dealers, including the Adviser, BISYS, and any of their affiliates or
subsidiaries.
BISYS Fund Services Ohio, Inc. serves the Fund's as transfer agent and fund
accountant. For transfer agent services, BISYS Fund Services Ohio, Inc. is
entitled to receive fees based upon the number of shareholders with a
specified minimum per fund. For fund accounting services, BISYS Fund
Services Ohio, Inc. is entitled to receive fees based on a percentage of the
average daily net assets of each Fund. In addition, BISYS Fund Services
Ohio, Inc. is
Continued
-35-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Notes to Financial Statements, Continued
December 31, 1999
reimbursed for certain out-of-pocket expenses incurred in providing such
transfer agency and fund accounting services.
Class A shares of the Funds are subject to an initial sales charge imposed
at the time of purchase in accordance with the Funds' prospectus. Class B
shares are subject to a Contigent Deferred Sales Charge (CDSC) on
redemptions of Class B shares made within five years of purchase. 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. The CDSC on Class B shares will not be imposed on increases
above the NAV at the time of purchase or shares purchased through the
reinvestment of dividends from net investment income or capital gains. For
the year ended December 31, 1999, the Distributor received approximately
$97,699 from commissions earned on sales of Class A shares and on redemption
of Class B shares of the Funds, all of which the Distributor reallowed to
dealers of the Funds' shares.
Certain officers of the Company are affiliated with BISYS and/or the
Adviser. Such officers are not paid any fees directly by the Funds for
serving as officers of the Company.
Fees may be voluntarily reduced or reimbursed to assist the Funds in
maintaining competitive expense ratios. Information regarding these
transactions are as follows for the year ended December 31, 1999:
<TABLE>
<CAPTION>
Intermediate
Income Growth International
Fund Fund Fund
------------ -------- -------------
<S> <C> <C> <C>
Investment advisory fee waivers........... $165,125 $513,188 $120,023
Administration fee waivers................ -- 6,025 --
Distribution plan fee waivers............. 180,281 153,335 125,022
Shareholder service fee waivers........... 111,790 270,130 98,081
-------- -------- --------
Total..................................... $457,196 $942,678 $343,126
======== ======== ========
</TABLE>
5. Federal Income Tax Information (Unaudited):
Capital Loss Carryforward:
At December 31, 1999 the following Funds had net capital loss
carryforwards to offset future net capital gains, if any, to the extent
provided by the Treasury regulations:
<TABLE>
<CAPTION>
Amount Expires
------- -------
<S> <C> <C>
Intermediate Income Fund..................................... $73,936 2007
</TABLE>
Long Term Capital Gains Distributions:
During the fiscal year ended December 31, 1999 the Funds declared long
term capital gain distributions as follows:
<TABLE>
<CAPTION>
Long Term
20%
----------
<S> <C>
Intermediate Income Fund.......................................... $ 28,765
Growth Fund....................................................... 5,325,165
International Fund................................................ 874,971
</TABLE>
Continued
-36-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Notes to Financial Statements, Continued
December 31, 1999
Dividend Received Deduction:
For corporate shareholders the following percentage of the total ordinary
income distributions paid during the fiscal year ended December 31, 1999
qualify for the corporate dividends received deduction for the following
funds:
<TABLE>
<CAPTION>
Percentage
----------
<S> <C>
Growth Fund....................................................... 15.75%
</TABLE>
Post October Loss Deferral:
Capital (and foreign currency) losses incurred after October 31, within
the Fund's fiscal year are deemed to arise on the first business day of
the following fiscal year for tax purposes. The following Funds have
incurred and will elect to defer such capital losses (and foreign currency
losses):
<TABLE>
<CAPTION>
Post-October Foreign
Capital Losses Currency Losses
-------------- ---------------
<S> <C> <C>
Intermediate Income Fund...................... $15,223 --
International Fund............................ -- $109,206
</TABLE>
-37-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Financial Highlights
For a share of beneficial units outstanding
<TABLE>
<CAPTION>
Intermediate
Income Fund--
Class A Shares
---------------------
May 12, 1999 to
December 31, 1999 (a)
---------------------
<S> <C>
Net Asset Value, Beginning of Period..................... $ 9.88
-------
Investment Activities
Net investment income (loss)............................ 0.33
Net realized and unrealized gains (losses) from
investment transactions................................ (0.37)
-------
Total from Investment Activities......................... (0.04)
-------
Distributions
Net investment income................................... (0.37)
Net realized gains...................................... (0.01)
-------
Total Distributions...................................... (0.38)
-------
Net Asset Value, End of Period........................... $ 9.46
=======
Total Return (excludes sales charge)..................... (0.45)%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)......................... $17,670
Ratio of expenses to average net assets................. 0.85%(c)
Ratio of net investment income to average net assets.... 5.81%(c)
Ratio of expenses to average net assets*................ 1.66%(c)
Ratio of net investment income to average net assets*... 5.01%(c)
Portfolio Turnover (d).................................. 37.78%
</TABLE>
- -------
* During the period, certain expenses were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-38-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Financial Highlights
For a share of beneficial units outstanding
<TABLE>
<CAPTION>
Intermediate Income Fund--Class B Shares
--------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
December 31, December 31, December 31, December 31, December 31,
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.17 $ 10.01 $ 9.84 $ 10.17 $ 9.14
------- ------- ------- ------- -------
Investment Activities
Net investment income
(loss)................ 0.54 0.54 0.55 0.54 0.53
Net realized and
unrealized gains
(losses) from
investment
transactions.......... (0.73) 0.17 0.17 (0.33) 1.03
------- ------- ------- ------- -------
Total from Investment
Activities.............. (0.19) 0.71 0.72 0.21 1.56
------- ------- ------- ------- -------
Distributions
Net investment income.. (0.51) (0.54) (0.55) (0.54) (0.53)
Net realized gains..... (0.01) (0.01) -- -- --
------- ------- ------- ------- -------
Total Distributions..... (0.52) (0.55) (0.55) (0.54) (0.53)
------- ------- ------- ------- -------
Net Asset Value, End of
Period.................. $ 9.46 $ 10.17 $ 10.01 $ 9.84 $ 10.17
======= ======= ======= ======= =======
Total Return (excludes
redemption charge)..... (1.90)% 7.29% 7.60% 2.22% 17.47%
Ratios/Supplementary
Data:
Net Assets, End of
Period (000).......... $33,111 $42,388 $33,339 $27,568 $23,470
Ratio of expenses to
average net assets.... 1.16% 1.10% 1.10% 1.10% 1.10%
Ratio of net investment
income to average
net assets............ 5.35% 5.37% 5.65% 5.50% 5.49%
Ratio of expenses to
average net assets*... 2.17%** 2.37%** 2.62%** 2.52%** 2.64%
Ratio of net investment
income to average
net assets*........... 4.36% 4.10% 4.15% 4.15% 3.95%
Portfolio Turnover (a). 37.78% 33.89% 60.05% 30.25% 31.57%
</TABLE>
- -------
* During the period, certain expenses were voluntarily reduced. If such
voluntary fee reductions had not occurred, the ratios would have been as
indicated.
** During the years ended December 31, 1999, 1998, 1997 and 1996 the
Intermediate Income Fund received credits from its custodian for interest
earned on uninvested cash balances which were used to offset custodian
fees. If such credits had not occurred, the expense ratio would have been
as indicated. The ratio of net investment income was not affected.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-39-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Financial Highlights
For a share of beneficial units outstanding
<TABLE>
<CAPTION>
Growth Fund--
Class A Shares
---------------------
May 12, 1999 to
December 31, 1999 (a)
---------------------
<S> <C>
Net Asset Value, Beginning of Period..................... $ 17.39
-------
Investment Activities
Net investment income (loss)............................ 0.01
Net realized and unrealized gains (losses) from
investment transactions................................ (0.24)
-------
Total from Investment Activities......................... (0.23)
-------
Distributions
Net investment income................................... --
Net realized gains...................................... (2.14)
-------
Total Distributions...................................... (2.14)
-------
Net Asset Value, End of Period........................... $ 15.02
=======
Total Return (excludes sales charge)..................... (0.91)%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)......................... $10,318
Ratio of expenses to average net assets................. 1.20%(c)
Ratio of net investment income to average net assets.... 0.20%(c)
Ratio of expenses to average net assets*................ 1.82%(c)
Ratio of net investment income to average net assets*... (0.42)%(c)
Portfolio Turnover (d).................................. 77.18%
</TABLE>
- -------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-40-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Financial Highlights
For a share of beneficial units outstanding
<TABLE>
<CAPTION>
Growth Fund--Class B Shares
--------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
December 31, December 31, December 31, December 31, December 31,
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period...... $ 15.29 $ 15.72 $ 13.57 $ 12.07 $ 9.74
-------- -------- -------- ------- -------
Investment Activities
Net investment income
(loss)................. (0.06) -- 0.04 0.07 0.10
Net realized and
unrealized
gains (losses) from
investment transactions. 1.85 0.84 3.86 1.85 3.12
-------- -------- -------- ------- -------
Total from Investment
Activities.............. 1.79 0.84 3.90 1.92 3.22
-------- -------- -------- ------- -------
Distributions
Net investment income... -- -- (0.04) (0.07) (0.10)
Net realized gains...... (2.14) (1.27) (1.71) (0.35) (0.79)
-------- -------- -------- ------- -------
Total Distributions...... (2.14) (1.27) (1.75) (0.42) (0.89)
-------- -------- -------- ------- -------
Net Asset Value, End of
Period.................. $ 14.94 $ 15.29 $ 15.72 $ 13.57 $ 12.07
======== ======== ======== ======= =======
Total Return (excludes
redemption charge)...... 12.16% 5.96% 29.15% 15.87% 33.32%
Ratios/Supplementary
Data:
Net Assets, End of
Period (000)........... $158,286 $136,976 $104,309 $58,907 $30,906
Ratio of expenses to
average net assets..... 1.75% 1.69% 1.72% 1.74% 1.75%
Ratio of net investment
income to average
net assets............. (0.41)% (0.02)% 0.22% 0.61% 0.90%
Ratio of expenses to
average net assets*.... 2.35%** 2.53%** 2.66%** 2.55%** 2.81%
Ratio of net investment
income to average
net assets*............ (1.01)% (0.86)% (0.71)% (0.17)% (0.16)%
Portfolio Turnover (a).. 77.18% 91.32% 53.26% 33.98% 48.91%
</TABLE>
- -------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
** During the years ended December 31, 1999, 1998, 1997 and 1996 the Growth
Fund received credits from its custodian for interest earned on uninvested
cash balances which were used to offset custodian fees. If such credits had
not occurred, the expense ratio would have been as indicated. The ratio of
net investment income was not affected.
(a) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-41-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Financial Highlights
For a share of beneficial units outstanding
<TABLE>
<CAPTION>
International Fund--
Class A Shares
---------------------
May 12, 1999 to
December 31, 1999 (a)
---------------------
<S> <C>
Net Asset Value, Beginning of Period..................... $ 13.76
-------
Investment Activities
Net investment income (loss)............................ (0.01)
Net realized and unrealized gains (losses) on
investments............................................ 4.81
-------
Total from Investment Activities......................... 4.80
-------
Distributions
Net investment income................................... (0.10)
Net realized gains...................................... (0.27)
-------
Total Distributions...................................... (0.37)
-------
Net Asset Value, End of Period........................... $ 18.19
=======
Total Return (excludes sales charge)..................... 35.09%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)......................... $24,215
Ratio of expenses to average net assets................. 1.45%(c)
Ratio of net investment income to average net assets.... 0.02%(c)
Ratio of expenses to average net assets*................ 2.28%(c)
Ratio of net investment income to average net assets*... (0.81)%(c)
Portfolio Turnover (d).................................. 57.73%
</TABLE>
- -------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-42-
<PAGE>
MMA PRAXIS MUTUAL FUNDS
Financial Highlights
For a share of beneficial units outstanding
<TABLE>
<CAPTION>
International Fund--Class B Shares
---------------------------------------
Year Year April 1, 1997
Ended Ended through
December 31, December 31, December 31,
1999 1998 1997 (a)
------------ ------------ -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period. $ 13.05 $ 10.62 $ 10.00
------- ------- -------
Investment Activities
Net investment income (loss)........ (0.08) (0.02) (0.05)
Net realized and unrealized gains
(losses) on investments............ 5.54 2.56 0.69
------- ------- -------
Total from Investment Activities..... 5.46 2.54 0.64
------- ------- -------
Distributions
Net investment income............... (0.03) (0.10) --
Net realized gains.................. (0.27) (0.01) (0.02)
------- ------- -------
Total Distributions.................. (0.30) (0.11) (0.02)
------- ------- -------
Net Asset Value, End of Period....... $ 18.21 $ 13.05 $ 10.62
======= ======= =======
Total Return......................... 42.00% 23.98% 6.40%(b)
Ratios/Supplementary Data:
Net Assets, End of Period (000)..... $34,509 $31,163 $17,245
Ratio of expenses to average net
assets............................. 2.00% 1.99% 2.00%(c)
Ratio of net investment income to
average net assets................. (0.28)% (0.32)% (0.93)%(c)
Ratio of expenses to average net
assets*............................ 2.82% 3.19% 4.29%(c)
Ratio of net investment income to
average net assets*................ (1.10)% (1.52)% (3.21)%(c)
Portfolio Turnover (d).............. 57.73% 47.19% 51.46%
</TABLE>
- -------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See notes to financial statements.
-43-
<PAGE>
Investment Adviser
MMA Capital Management
Post Office Box 483
Goshen, Indiana 46527
Investment Sub-Adviser
(International Fund only)
Oechsle International Advisors,
LLC
One International Place
Boston, Massachusetts 02110
Administrator and Distributor
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
Legal Counsel
Dechert Price & Rhoads
1775 Eye Street, NW
Washington, DC 20006
Auditors
PricewaterhouseCoopers LLP
100 East Broad Street
Columbus, Ohio 43215
Transfer Agent
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
Annual Report
for the year ended December 31, 1999
MMA Praxis Mutual Funds
Intermediate Income Fund
Growth Fund
International Fund
MMA PRAXIS
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.
2/00
SOY INK
RECYCLED PAPER
