AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 26, 2000
REGISTRATION NO. 33-87874
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 8 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 13
---------------
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
320 PARK AVENUE
NEW YORK, NEW YORK 10022
(ADDRESS OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)(ZIP CODE)
(212) 224-1939
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
---------------
DOLORES J. MORRISSEY, PRESIDENT
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
320 PARK AVENUE, NEW YORK, NEW YORK 10022
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------
COPY TO:
STANLEY M. LENKOWICZ
SENIOR VICE PRESIDENT, DEPUTY GENERAL COUNSEL AND SECRETARY
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
320 PARK AVENUE
NEW YORK, NEW YORK 10022
---------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after the
effective date of the Registration Statement.
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
[ ] immediately upon filing pursuant to paragraph (b).
[X] on May 1, 2000 pursuant to paragraph (b) of Rule 485.
[ ] 60 days after filing pursuant to paragraph (a)(1) of
Rule 485.
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485.
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
================================================================================
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
ITEMS IN
PART A OF
FORM N-1A CAPTION IN FORM N-1A CAPTION OR LOCATION IN PROSPECTUS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 Front and Back Cover Pages .............. Front and Back Covers
2 Risk/Return Summary:
Investments, Risks, and Performance ..... Summary of How Our Funds Invest
3 Risk/Return Summary:
Fee Table ............................... Summary of How Our Funds Invest - Annual Fees and
Expenses
4 Investment Objectives, Principal
Investment Strategies, and Related
Risks ................................... Details about How Our Funds Invest and Related Risks
5 Management's Discussion of Fund
Performance ............................. Not Applicable (Included in Annual Report)
6 Management, Organization, and
Capital Structure ....................... Management of the Funds
7 Shareholder Information ................. Information on Fund Shares
8 Distribution Agreements ................. Not Applicable
9 Financial Highlights Information ........ Financial Highlights
</TABLE>
<TABLE>
<CAPTION>
ITEMS IN
PART B OF CAPTION OR LOCATION IN
FORM N-1A CAPTION IN FORM N-1A STATEMENT OF ADDITIONAL INFORMATION
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
10 Cover Page and Table of Contents ......... Cover
11 Fund History ............................. Investment Company's Form of Operations
12 Description of the Fund and Its
Investments and Risks .................... Investment Strategies and Related Risks; Fundamental
Investment Restrictions; Description of Corporate Bond
Ratings; Use of Standard & Poor's Indices
13 Management of the Fund ................... Management of the Investment Company
14 Control Persons and Principal Holders
of Securities ............................ Investment Company's Form of Operations
15 Investment Advisory and Other
Services ................................. Investment Advisory Arrangements; Administrative
Arrangements; Independent
Auditors; Custodian
16 Brokerage Allocation and Other
Practices ................................ Portfolio Transactions and Brokerage
17 Capital Stock and Other Securities ....... Investment Company's Form of Operations
18 Purchase, Redemption, and Pricing of
Shares ................................... Purchase, Redemption and Pricing of Shares
19 Taxation of the Fund ..................... Taxation of the Investment Company
20 Underwriters ............................. Distribution of Fund Services
21 Calculation of Performance Data .......... Yield and Performance Information
22 Financial Statements ..................... Financial Statements
</TABLE>
ITEMS IN
PART C OF CAPTION IN FORM N-1A AND IN PART C
FORM N-1A OF REGISTRATION STATEMENT
- ----------------------------------------------
23 Exhibits
24 Persons Controlled by or Under
Common Control with the Fund
25 Indemnification
26 Business and Other Connections of
the Investment Adviser
27 Principal Underwriters
28 Location of Accounts and Records
29 Management Services
30 Undertakings
<PAGE>
Prospectus
and Application of
- ------------------
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
EQUITY INDEX FUND
ALL AMERICA FUND
BOND FUND
MONEY MARKET FUND
May 1, 2000
---------------------------------------------------------------
Distributed by:
MUTUAL OF AMERICA
Institutional SECURITIES CORPORATION
Funds
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
320 Park Avenue, New York, New York 10022 1-800-914-8716
- --------------------------------------------------------------------------------
Mutual of America Institutional Funds, Inc. is a mutual fund. It has these four
Funds:
o Equity Index Fund
o All America Fund
o Bond Fund
o Money Market Fund
Institutional investors, such as endowments, foundations and other
not-for-profit organizations, corporations and municipalities and other public
entities, may purchase shares of the Funds. An initial investment must be at
least $25,000, and each subsequent investment must be at least $5,000.
There is no sales charge due upon the purchase or sale of Fund shares. An
investor must send the payment price for shares purchased, and will receive
redemption proceeds for shares sold, by wire transfer of Federal Funds.
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
- --------------------------------------------------------------------------------
Prospectus dated May 1, 2000
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
----
Summary of How Our Funds Invest ..................................... 1
Equity Index Fund ................................................ 1
All America Fund ................................................. 1
Bond Fund ........................................................ 2
Money Market Fund ................................................ 2
Average Annual Total Returns ..................................... 4
Annual Fees and Expenses ......................................... 4
Comparison With Prior Performance of Similar Funds ............... 5
Management of the Funds ............................................. 7
The Adviser ......................................................... 7
Subadvisers for a Portion of the All America Fund ................... 7
Portfolio Managers .................................................. 8
Details about How Our Funds Invest and Related Risks ................ 9
Investment Objectives and Strategies:
Equity Index Fund .............................................. 9
All America Fund ............................................... 9
Bond Fund ...................................................... 11
Money Market Fund .............................................. 12
Risks of Investing in a Stock Fund ............................... 12
Risks of Investing in a Bond Fund ................................ 13
Specific Investments or Strategies, and Related Risks ............ 14
Information on Fund Shares .......................................... 16
Pricing of Funds' Shares ......................................... 16
Purchases of Fund Shares ......................................... 16
How to Purchase Shares of the Funds .............................. 17
Redemptions of Fund Shares ....................................... 17
Exchanges of Fund Shares ......................................... 18
How to Place a Redemption or Exchange Order ...................... 18
Shareholder Reports and Confirmation Statements .................. 19
Dividends, Capital Gains Distributions and Taxation of Funds ..... 19
Shareholder Taxation ............................................. 20
Financial Highlights ................................................ 21
You May Obtain More Information ..................................... Back cover
- -- An Application is included with this Prospectus --
<PAGE>
- --------------------------------------------------------------------------------
SUMMARY OF HOW OUR FUNDS INVEST
- --------------------------------------------------------------------------------
Each Fund of Mutual of America Institutional Funds, Inc. (the Investment
Company) has its own investment objective and tries to achieve its objective
with certain investment strategies. The Funds' different investment strategies
will affect the returns of the Funds and the risks of investing in each Fund.
A Fund may not achieve its objective. An investment in any of the Funds could
decline in value.
Equity Index Fund
- --------------------------------------------------------------------------------
The Fund seeks investment results that correspond to the investment performance
of the Standard & Poor's Composite Index of 500 Stocks (the S&P 500(R) Index).
The Fund invests primarily in the 500 common stocks included in the S&P 500
Index.
o Securities in the S&P 500 Index generally are issued by companies with
large market capitalizations.
o Securities are included in the Index based on industry weightings and
the issuers' leading positions in those industries.
An investment in the Equity Index Fund is subject to market risk, which refers
to changes in the value of security holdings (volatility of price) when
conditions in the securities markets change or the economic environment changes.
The securities in the Fund's portfolio also have credit (or financial) risk,
which refers to the issuer's earning stability and overall financial soundness.
All America Fund
- --------------------------------------------------------------------------------
The Fund attempts to outperform the S&P 500 Index, by investing in a diversified
portfolio of primarily common stocks.
o Approximately 60% of the Fund's assets are invested to replicate the
S&P 500 Index by investing in the 500 common stocks included in the S&P
500 Index.
o Approximately 40% of the Fund's assets are invested by the Adviser and
two Subadvisers, with an objective of capital appreciation and, to a
lesser extent, current income. The Adviser invests approximately 10% of
the Fund's assets primarily in small capitalization value stocks and
approximately 10% of the Fund's assets primarily in large capitalization
value stocks; one Subadviser invests approximately 10% of the Fund's
assets primarily in small capitalization growth stocks; and the other
Subadviser invests approximately 10% of the Fund's assets primarily in
mid- and large capitalization growth stocks.
An investment in the All America Fund is subject to market risk (changes in
value when conditions in the securities market or economic environment change)
and financial risk (relating to issuers' earning stability and financial
soundness). Approximately 20% of the All America Fund's assets are invested in
small capitalization growth and value stocks, many of which trade
over-the-counter, and this portion of its portfolio will have more market and
financial risk than the portion invested in mid and large capitalization stocks.
Equity securities that trade over-the-counter may be more difficult to sell than
equity securities that trade on a national securities exchange.
-1-
<PAGE>
Bond Fund
- --------------------------------------------------------------------------------
The Fund seeks current income, with preservation of shareholders' capital a
secondary objective. The Fund's securities holdings will have an average
maturity that varies according to the Adviser's view of current market
conditions.
The Fund invests primarily in publicly-traded, investment grade debt securities.
o The Fund invests in corporate, U.S. Government securities and U.S.
Government agency securities, such as bonds, notes, debentures, zero
coupon securities and mortgage-backed securities.
o The Fund may invest a significant portion of its assets in a particular
type of debt security, such as U.S. Government agency mortgage-backed
securities, U.S. Treasury securities, zero coupon securities or
securities rated BBB.
o The Adviser evaluates individual securities and selects securities
based on interest income to be generated and generally does not time
purchases and sales based on interest rate predictions.
An investment in the Bond Fund is subject to market risk, which includes changes
in the overall level of interest rates. Interest rate increases usually cause a
decline in the value of debt securities held by the Fund. Generally, the market
risk for the Bond Fund increases as the average maturity of its securities
holdings lengthens. Lower rated investment grade debt securities may be subject
to a greater market risk than higher rated debt securities, and below investment
grade securities (rated below BBB) are subject to greater market risk than
investment grade debt securites. Zero coupon securities may be subject to a
greater market risk than securities that pay interest on a regular basis.
Mortgage-backed securities or certificates are subject to prepayment risk
(shortening the term to maturity) when interest rates fall and to extension risk
(lengthening the term to maturity) when interest rates rise.
An investment in the Bond Fund also involves credit risk, which refers to the
ability of the issuer of a security to pay principal and interest as it becomes
due. Securities rated BBB or lower have more credit risk than higher-rated
securities.
Money Market Fund
- --------------------------------------------------------------------------------
The Fund seeks current income and preservation of principal by investing in
money market instruments that meet certain requirements for liquidity,
investment quality and stability of capital.
o The average maturity of the instruments the Fund holds will be
short-term -- 90 days or less.
o The Fund will purchase only securities that are rated in one of the two
highest rating categories by at least two rating agencies, with most
securities rated in the highest category.
o The Fund will diversify its investments, limiting holdings in the
securities of any one issuer (except the U.S. Government or its
agencies) to 5% of assets.
The Money Market Fund pays dividends of income earned on a semi-annual basis,
rather than declaring dividends daily to maintain a stable net asset value of
$1.00.
o The Fund's net asset value will generally rise during six months as the
Fund earns income, before dividends are paid.
o The Fund's net asset value will decline when the Fund declares
dividends and pays income to shareholders at the end of June and
December each year.
A shareholder's investment in the Fund is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
An investment in the Money Market Fund has a small amount of market risk and
financial risk, because the Fund holds high quality securities with short terms
to maturity. The Fund has a high level of current income volatility, because its
securities holdings are short term and it reinvests at current interest rates as
its holdings mature.
-2-
<PAGE>
Annual Total Returns
- --------------------------------------------------------------------------------
The bar charts below show the annual return of each Fund for the life of the
Fund. A chart indicates the risks of investing in a particular Fund by showing
changes in the Fund's performance from year-to-year during the period, but a
Fund's past performance does not necessarily indicate how it will perform in the
future.
Next to each chart is the Fund's highest total return for any calendar quarter
during the period covered by the chart, called the best quarter and the Fund's
lowest total return for any calendar quarter during the period covered, called
the worst quarter. These returns are an indication of the volatility of a Fund's
total returns.
[The following information was depicted as bar charts in the printed material]
All America Fund:
1997 1998 1999
0% 26% 21% 26%
The All America Fund began operations on May 1, 1996.
Best quater: 22.0% during fourth quarter 1998
Worst quarter: (13.1)% during third quarter 1998
Bond Fund:
1997 1998 1999
0% 8.9% 8.3% -3.5%
The Bond Fund began operations on May 1, 1996.
Best quarter: 4.8% during third quarter 1998
Worst quarter: (1.2)% during first quarter 1999
Money Market Fund:
1998 1999
0% 5.3% 4.9%
The Money Market Fund began operations on May 1, 1997.
Best quarter: 1.4% during fourth quarter 1999
Worst quarter: 1.1% during first quarter 1999
Equity Index Fund:
1999
0% 9.0%
The Equity Index Fund began operations on May 3, 1999.
Best quarter: 13.9% during fourth quarter 1999
Worst quarter: (6.3)% during third quarter 1999
-3-
<PAGE>
Average Annual Total Returns (for periods ended December 31, 1999)
- --------------------------------------------------------------------------------
The table below shows the average annual total returns of each Fund for the past
one year period and the return for the period of the Fund's operations. The
table indicates the risks of investing in the Funds by comparing, for the same
periods, each Fund's returns to those of a broad-based, unmanaged index, or to
Treasury Bills for money market investments. A Fund's past performance does not
necessarily indicate how it will perform in the future.
<TABLE>
<CAPTION>
Past For Life
Fund/Comparative Index(es) One Year of Fund*
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
All America Fund ............................................. 26.0% 22.8%*
S&P 500 Index (1) .......................................... 21.0% 26.8%
- -----------------------------------------------------------------------------------------------
Equity Index Fund ............................................ N/A 9.0%
S&P 500 Index (1) .......................................... 21.0% 9.0%
- -----------------------------------------------------------------------------------------------
Bond Fund .................................................... (3.5)% 5.0%
Lehman Brothers Gov't./Corp. Bond Index (2) ................ (2.2)% 6.2%
- -----------------------------------------------------------------------------------------------
Money Market Fund ............................................ 4.9% 5.1%
90-day Treasury Bill Rate .................................. 4.7% 5.0%
7-day current yield for period ended 12/28/99 was 5.63%
7-day effective yield (reflecting the compounding of interest)
for period ended 12/28/99 was 5.79%
- -----------------------------------------------------------------------------------------------
</TABLE>
* The All America and Bond Funds began operations on May 1, 1996; the Money
Market Fund began operations on May 1, 1997 and the Equity Index Fund began
operations on May 3, 1999.
(1) The S&P 500(R)is the Standard & Poor's Composite Index of 500 Stocks, a
market value-weighted index of the common stock prices of companies included
in the S&P 500.
(2) The Lehman Brothers Government/Corporate Bond Index is an index of U.S.
Government and corporate bond prices of investment grade bonds with
maturities greater than one year and face values over $1 million.
Annual Fees and Expenses
- --------------------------------------------------------------------------------
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Funds. Annual operating expenses are shown as a percentage of
average net assets.
<TABLE>
<CAPTION>
Equity Index All America Bond Money Market
Fund Fund Fund Fund
----------- ----------- ---- ------------
<S> <C> <C> <C> <C>
Shareholder Fees ................................... none none none none
Annual Fund Operating Expenses
(expenses that are deducted from fund assets)
Management Fees .................................... .13% .50% .45% .20%
Other Expenses ..................................... .50 .35 .48 .82
---- ---- ---- -----
Total Annual Fund Operating Expenses ............... .63% .85% .93% 1.02%
Expense Reimbursement* ............................. (.31) (.01) (.23) (.62)
---- ---- ---- -----
Net Expenses ....................................... .32% .84% .70% .40%
==== ==== ==== =====
</TABLE>
* The Adviser has contractually agreed for 2000 to limit each Fund's total
expenses (excluding taxes, brokerage commissions and extraordinary expenses)
to an annual rate of .325% of the net assets of the Equity Index Fund, .85%
of net assets for the All America Fund, .70% of net assets for the Bond Fund
and .40% of net assets for the Money Market Fund. The Adviser's obligation
will continue for each following calendar year unless the Adviser gives
notice of termination to the Investment Company at least two weeks before
the next year begins.
-4-
<PAGE>
Example:
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds. The Example assumes for each
Fund that:
o you make an investment of $10,000,
o you have a 5% annual return on your investment,
o all dividends and distributions are reinvested,
o Fund operating expenses during the periods shown are limited by the
Adviser to the contractual limits only during Year 1, and
o you redeem all of your shares at the end of the periods shown.
Although your costs may be higher or lower, your cost based on these assumptions
would be:
<TABLE>
<CAPTION>
1 Year 3 Years(1) 5 Years(1) 10 Years(1)
------ --------- --------- ----------
<S> <C> <C> <C> <C>
Equity Index Fund ........................... $33 $105 $184 $ 419
All America Fund ............................ $87 $275 $481 $1,096
Bond Fund ................................... $72 $226 $396 $ 902
Money Market Fund ........................... $41 $129 $226 $ 516
</TABLE>
(1) The expenses used in the Example, other than for 1 Year, are those shown
in the table above without reimbursement of expenses by the Adviser.
Comparison With Prior Performance of Similar Funds
- --------------------------------------------------------------------------------
The investment policies, objectives and strategies of the Investment Company's
Equity Index Fund, All America Fund, Bond Fund and Money Market Fund are
substantially identical to those of Mutual of America Investment Corporation's
Equity Index Fund, All America Fund, Bond Fund and Money Market Fund (called the
VP or Variable Products Funds). In addition, the Adviser and Subadvisers for
these Variable Products Funds are the same as for the corresponding Investment
Company Fund, and the portfolio managers are the same.
Shares of the Variable Products Funds are sold only to separate accounts of
Mutual of America Life Insurance Company and its indirect wholly owned
subsidiary, The American Life Insurance Company of New York, as a funding medium
for variable accumulation annuity contracts and variable life insurance policies
issued by these companies.
Below are average annual total returns for the VP Funds, based on information
about the VP Funds that the Adviser has provided, compared to returns for the
Investment Company's Funds for the periods indicated. Past performance of the
Variable Products Funds is not predictive of future performance. Investors
should not consider performance data for the VP Funds as an indication of the
future performance of the Equity Index, All America, Bond and Money Market Funds
offered under this Prospectus.
Average Annual Total Returns of the Funds and the VP Funds
for Periods ended December 31, 1999
<TABLE>
<CAPTION>
Since Inception of
Institutional Fund One Year Five Years Ten Years Institutional Fund (1)
------------------ -------- ---------- --------- ----------------------
<S> <C> <C> <C> <C>
Equity Index ........................... N/A N/A N/A 9.0%
All America ............................ 26.0% N/A N/A 22.8%
Bond ................................... (3.5)% N/A N/A 5.0%
Money Market (4) ....................... 4.9% N/A N/A 5.1%
- ---------------------------------------------------------------------------------------------------------
VP Fund
-------
VP Equity Index ........................ 20.6% 28.2% N/A 10.7%
VP All America ......................... 25.8% 26.1% N/A 22.3%
VP Bond (3) ............................ (1.9)% 7.5% 7.6%(3) 5.7%
VP Money Market (4) .................... 5.1% 5.4% 5.2% 5.3%
</TABLE>
-5-
<PAGE>
(1) For comparison purposes, the average annual total return is given for the
VP All America Fund and VP Bond Fund from May 1, 1996, for the VP Money
Market Fund from May 1, 1997, and for the VP Equity Index Fund from May 3,
1999.
(2) The VP All America Fund began operations in its current form on May 2,
1994. Since then, its investment policies, objectives and strategies have
been substantially identical to those of the All America Fund. VP All
America Fund's average annual total return for the period May 2, 1994
through December 31, 1999 was 29.1%.
(3) The current portfolio manager of the VP Bond Fund, who has been the
portfolio manager of the Bond Fund since its inception, became the VP Bond
Fund's portfolio manager in February 1991.
(4) For the 7-day period ended December 28, 1999, the Investment Company's
Money Market Fund had a current yield of 5.89% and an effective yield of
6.06%, and the Variable Products Money Market Fund had a current yield of
5.63% and an effective yield of 5.79%. The average maturity of the
portfolio holdings was 22 days for Investment Company's Money Market Fund
and 19 days for the Variable Products Money Market Fund.
Results for the Variable Products Funds are different than the results that were
or would have been obtained for the Investment Company Funds.
o Use of the Investment Company Funds' expenses for the VP Funds would
have lowered performance results. The total operating expenses during
the periods shown above for each of the VP All America Fund and VP Bond
Fund were .50% of average net assets, for the VP Money Market Fund were
.25% of average net assets and for the VP Equity Index Fund were .13% of
average net assets (additional expenses were paid at the separate
account level), while the annual total operating expenses (after
reimbursement) of the All America Fund, Bond Fund, Money Market Fund and
Equity Index Fund of the Investment Company were .84%, .70%, .40% and
.32%, respectively, of average net assets.
o The VP All America Fund, from May 1994 until June 1995, had a Subadviser
for approximately 10% of the Fund's assets currently managed by the
Adviser.
o At year end 1999, VP Equity Index Fund had net assets of $583 million,
VP All America Fund had net assets of $886 million, VP Bond Fund had net
assets of $466 million, and VP Money Market Fund had net assets of $74
million.
-6-
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------
The Adviser
- --------------------------------------------------------------------------------
Mutual of America Capital Management Corporation, 320 Park Avenue, New York, New
York 10022 (the Adviser or Capital Management) is the investment adviser for the
Funds of the Investment Company. The Adviser had total assets under management
of approximately $8.1 billion at December 31, 1999, including $2.3 billion for
the Mutual of America Investment Corporation. As Adviser, Capital Management:
o places orders for the purchase and sale of securities,
o engages in securities research,
o makes recommendations to and reports to the Investment Company's Board
of Directors,
o provides certain administrative services for the Funds, and
o provides the office space, facilities, equipment, material and
personnel necessary to perform its duties.
For its investment management services, the Adviser receives compensation from
each Fund at an annual rate of the Fund's net assets, calculated as a daily
charge. These annual rates, which were applicable during 1999, are:
o Equity Index Fund -- .125%
o All America Fund -- .50%
o Bond Fund -- .45%
o Money Market Fund -- .20%
Subadvisers for a Portion of the All America Fund
- --------------------------------------------------------------------------------
The Adviser has delegated its investment advisory responsibilities for a portion
of the All America Fund to two Subadvisers. Each Subadviser provides investment
advice for approximately 10% of the assets of the All America Fund. The Adviser
pays the Subadvisers for their advisory services to the All America Fund.
o Fred Alger Management, Inc., One World Trade Center, New York, New York
10048, is a small capitalization growth adviser for its portion of the
All America Fund. It provides investment management services to
institutional, corporate and individual clients, including other
registered management investment companies. At December 31, 1999, Alger
Management had assets under management of approximately $17.4 billion.
o Oak Associates, Ltd., 3875 Embassy Parkway, Suite 250, Akron, Ohio
44333, is a mid- and large capitalization growth adviser for its
portion of the All America Fund. It provides investment management
services for individual and corporate clients, primarily in connection
with retirement plans. At December 31, 1999, Oak Associates had assets
under management of approximately $21.3 billion.
-7-
<PAGE>
Portfolio Managers
- --------------------------------------------------------------------------------
The person(s) primarily responsible for the day-to-day management of the Funds'
investment portfolios are listed below. No information is given for the Money
Market Fund because of the type of investments it makes. No information is given
for the Equity Index Fund or the Indexed Assets of the All America Fund, because
the investment objective for each is to replicate the performance of an index.
All America Fund
Thomas P. Larsen, Executive Vice President of the Adviser, is responsible for
managing the Adviser's portions of the actively managed assets of the Fund. Mr.
Larsen joined the Adviser in June 1998, after serving as Senior Vice President
of Desai Capital Management. He has almost 30 years of experience in selecting
securities for and managing equity portfolios.
David D. Alger and Seilai Khoo are primarily responsible for the day-to-day
management of the Alger Management portion of the Fund. Mr. Alger, President and
Chief Executive Officer of Alger Management, has been employed by Alger
Management since 1971 and has been President since 1995, and he serves as
portfolio manager for other mutual funds and investment accounts managed by
Alger Management. Ms. Khoo has been employed by Alger Management since 1989, as
a senior research analyst until 1995 and as a Senior Vice President and
portfolio manager since 1995.
James D. Oelschlager is the portfolio manager of the Oak Associates portion of
the Fund. Since establishing Oak Associates in 1985, Mr. Oelschlager has served
as its portfolio manager. Previously, he served as the Assistant Treasurer of
Firestone Tire & Rubber Company, where he was directly responsible for the
management of the company's pension assets. Mr. Oelschlager is assisted with
portfolio management responsibilities by Donna Barton, trading, Margaret
Ballinger, new accounts, and Doug MacKay, equity research. These individuals
have combined experience of over seventy years in the investment business and
play a key role in the day-to-day management of the firm's portfolios.
Bond Fund
Andrew L. Heiskell, Executive Vice President of the Adviser, has responsibility
for setting the fixed income investment strategy and overseeing the day-to-day
operations of the Bond Fund. Mr. Heiskell has been the portfolio manager for the
Bond Fund of the Mutual of America Investment Corporation since February 1991
and of its Mid-Term and Short-Term Bond Funds since their inceptions in 1993. He
has more than 30 years of experience in selecting securities for and managing
fixed-income portfolios.
-8-
<PAGE>
- --------------------------------------------------------------------------------
DETAILS ABOUT HOW OUR FUNDS INVEST AND RELATED RISKS
- --------------------------------------------------------------------------------
Investment Objectives and Strategies
- --------------------------------------------------------------------------------
Equity Index Fund: The investment objective of the Equity Index Fund is to
provide investment results that correspond to the
performance of the S&P 500 Index.
The Fund seeks to achieve its objective primarily by:
o Purchasing shares of the 500 common stocks that are included in the S&P
500 Index.
< > Stocks are selected in the order of their weightings in the S&P
500 Index, beginning with the heaviest weighted stocks.
< > The percentage of the Fund's assets invested in each of the
selected stocks will be approximately the same as the percentage
the stock represents in the S&P 500 Index.
< > The Fund attempts to be fully invested at all times, and at least
80% of the Fund's net assets will be invested in the stocks that
comprise the S&P 500 Index.
o Purchasing futures contracts on the S&P 500 Index and options on
futures contracts on the S&P 500 Index to invest cash prior to the
purchase of common stocks, in an attempt to have the Fund's performance
more closely correlate with the performance of the S&P 500 Index.
The Adviser uses a computer program to determine which stocks are to be
purchased or sold to copy the S&P 500 Index. From time to time, the Fund makes
adjustments in its portfolio (rebalances) because of changes in the composition
of the S&P 500 Index or in the valuations of the stocks within the Index
relative to other stocks within the Index.
The Fund's investment performance may not precisely duplicate the performance of
the S&P 500 Index, due to cash flows in and out of the Fund and investment
timing considerations. The Fund also pays investment advisory expenses that are
not applicable to an unmanaged index such as the S&P 500 Index.
The Fund's ability to duplicate the performance of the S&P 500 Index depends to
some extent on the size of the Fund's portfolio. Mutual of America Life
Insurance Company (Mutual of America), the indirect parent corporation of the
Adviser, invested a total of $25 million in the Equity Index Fund when the Fund
began operations. Mutual of America (directly or through an affiliate) currently
intends to maintain an investment in the Fund so that the Fund's assets are at
least $25 million at any time.
All America Fund: The investment objective of the All America Fund is to
outperform the S&P 500 Index by investing in a diversified
portfolio of primarily common stocks.
At least 65% of the All America Fund's total assets will be invested in equity
securities under normal market conditions. The issuers of at least 80% of the
Fund's total assets will be United States corporations or entities.
Indexed Assets. The Fund invests approximately 60% of its assets to provide
investment results that correspond to the performance of the S&P 500 Index. This
portion of the All America Fund is called the Indexed Assets. The Fund invests
Indexed Assets in the 500 common stocks included in the S&P 500 Index and in
futures contracts on the S&P 500 Index. The Fund attempts to match the
weightings of stocks in the Indexed Assets with the weightings of those stocks
in the S&P 500 Index, and it periodically rebalances the Indexed Assets to
maintain those weightings.
- --------------------------------------------------------------------------------
Standard & Poor's(R) (S&P(R)) does not sponsor, endorse, sell or promote the
Equity Index Fund or All America Fund. Standard & Poor's, S&P and the S&P 500
Index are trademarks of The McGraw-Hill Companies, Inc. and have been licensed
for use by the Investment Company. Standard & Poor's has no obligation or
liability for the sale or operation of the Equity Index Fund and All America
Fund and makes no representation as to the advisability of investing in the
Funds.
-9-
<PAGE>
The Fund's ability to duplicate the performance of the S&P 500 Index depends to
some extent on the size of the Fund's portfolio. Mutual of America invested $50
million in the All America Fund when the Fund began operations. Mutual of
America (directly or through an affiliate) currently intends to maintain an
investment in the Fund so that the Fund's assets are at least $25 million at any
time.
Active Assets. The Fund invests approximately 40% of its assets to seek to
achieve a high level of total return, through both appreciation of capital and,
to a lesser extent, current income, by means of a diversified portfolio of
primarily common stocks with a broad exposure to the market. The Adviser and two
Subadvisers actively manage this portion of the All America Fund, which is
called the Active Assets.
The Fund tries to maintain, to the extent possible, approximately equal amounts
in each segment of the Active Assets. The Adviser periodically rebalances assets
in the All America Fund to retain the approximate 60%/40% relationship between
Indexed Assets and Active Assets, based on then current market values.
Adviser--Small Capitalization Value Stocks. The Adviser generally invests in
stocks that it considers undervalued and with the potential for above average
investment returns, issued by companies with small market capitalizations. Some
of the companies whose stocks the Adviser selects may have limited Wall Street
coverage and low institutional ownership, which may make the stocks more
difficult to sell in certain market conditions.
o The Adviser seeks securities with a depressed valuation compared to
their previous valuations or compared to a universe of peer companies.
The Adviser determines depressed valuation primarily through
consideration of earnings, cash flow or net equity.
o Issuers must have executive management that the Adviser considers
strong and capable of executing a clear business strategy for the
company.
The Adviser at times may actively trade the securities in its portion of the All
America Fund, depending on market conditions.
The Adviser--Large Capitalization Value Stocks. The Adviser invests this portion
of Active Assets in stocks it considers to be of high quality with lower than
average price volatility and low price/earning ratios, issued by companies with
large market capitalizations. Companies generally will have:
o below market debt levels,
o earnings growth of 10% or more,
o current yield greater than the average of the S&P 500, and
o market capitalization not less than that of any company included in the
S&P Barra Value Index, updated quarterly.
The Adviser at times may actively trade the securities in its portion of the All
America Fund, depending on market conditions.
Fred Alger Management, Inc.--Small Capitalization Growth Stocks. This Subadviser
invests in stocks that it considers to be fundamentally sound with the potential
for strong growth and for earnings in excess of market expectations, issued by
companies with small market capitalizations.
o The securities of these companies often are traded in the
over-the-counter market.
o Except during temporary defensive periods, at least 65% of the assets
in the Fred Alger portfolio will be invested in equity securities of
companies that, at the time of the Fund's purchase, have total market
capitalization within the range of capitalization of the companies
included in the Russell 2000 Growth Index or the S&P SmallCap 600
Index, updated quarterly. During defensive periods, Fred Alger may not
achieve the investment objective for its portion of the All America
Fund.
Fred Alger uses a bottom-up approach in selecting stocks for its portion of the
Fund, evaluating each issuer of securities before making an investment. Through
in-house research by analysts who are organized according to industry groups, it
develops stock selection recommendations that are presented to executive
officers and portfolio managers for evaluation and discussion. The portfolio
manager for the Fred Alger portion of the Fund then determines the individual
stocks that are appropriate for purchase. Fred Alger actively trades the
securities in its portion of the All America Fund, and its portfolio turnover
rate generally will be higher than the portfolio turnover rate for the other
portions of the Active Assets.
-10-
<PAGE>
Oak Associates, Ltd.--Mid- and Large Capitalization Growth Stocks. This
Subadviser invests in mid- and large-sized capitalization stocks, which often
have low current income and the potential for significant growth. Its approach
is to:
o monitor 400 stocks,
o at any one time to invest in approximately 15-25 common stocks without
regard for market industry weighting, and
o usually hold securities that have appreciated in value, rather than
selling them to realize capital gains.
Oak Associates identifies industries it believes are attractive from a long-term
perspective, based on the direction of interest rates, the overall stock market
environment, the inflation rate and evolving relationships of economic sectors.
In selecting individual stocks, Oak Associates evaluates companies' growth
prospects and utilizes relative valuation measures such as price to earnings
ratio as compared to long-term growth rate, historical levels and the S&P 500
Index.
Active trading of the Active Assets, if it occurs, will result in higher
transaction costs and may increase the realized (taxable) capital gains for the
Fund.
Bond Fund: The primary investment objective of the Bond Fund is to provide a
high level of current income. A secondary objective is preservation
of shareholders' capital.
The average maturity of the debt securities held by the Bond Fund will vary
according to market conditions and the stage of the interest rate cycle. The
Fund's Adviser anticipates that the average maturity of the Fund's securities
holdings will be between five and ten years.
The Fund invests at least 80% of its assets in investment grade debt obligations
issued by U.S. corporations or issued by the U.S. Government or its agencies.
o The Fund may invest in various types of debt securities, including
bonds, mortgage-backed securities, zero coupon securities and
asset-backed securities, with ratings that range from AAA to BBB at the
time of purchase.
o The percentage of the Fund's portfolio invested in particular types of
securities will vary, depending on market conditions and the Adviser's
assessment of the income and returns available from corporate
securities in relation to the risks of investing in these securities.
o At December 31, 1999, the Bond Fund had approximately 1% of its net
assets invested in zero coupon securities, 19% of its assets in U.S.
Treasury Securities and 6% of its net assets in U.S. Government agency
mortgage-backed securities. At that date, 35% of the Fund's net assets
were invested in obligations rated AAA, 41.6% of its net assets were
invested in corporate obligations rated BBB and 7.7% of its net assets
were invested in corporate obligations rated below investment grade,
due to ratings downgrades subsequent to purchase by the Fund.
The Adviser uses a bottom-up approach in selecting debt securities for the Fund.
This means that the Adviser evaluates each issuer of securities before making an
investment, rather than selecting securities or industries based on possible
changes in the economy. The Adviser's approach generally is to purchase
securities for income. In selecting an individual security, it reviews
historical financial measures and considers the price and yield relationship to
other securities to determine a proper relative value for the security.
The Fund generally does not purchase and sell securities in anticipation of
interest rate changes in the economy. The Adviser may sell a security that it
considers to have become overvalued relative to alternative investments, and
reinvest in an alternative security.
-11-
<PAGE>
Money Market Fund: The investment objective of the Fund is to realize high
current income to the extent consistent with the
maintenance of liquidity, investment quality and stability
of capital.
In selecting specific investments for the Fund, the Adviser seeks securities or
instruments with the highest yield or income that meet the following
requirements.
o The Fund invests only in money market instruments and other short-term
debt securities, including commercial paper issued by U.S. corporations
and in U.S. Government and U.S. Government agency securities. At
December 31, 1999, 100% of the Fund's assets were invested in
commercial paper, a portion of which were also U.S. Government agency
securities.
o All of the securities the Fund purchases have a rating in one of the
two highest rating categories from at least two nationally recognized
rating agencies, and substantially all (at least 95%) have a rating in
the highest category from at least two of these rating agencies.
o At the time of purchase, a security must mature in 13 months or less
(or 25 months for U.S. Government securities). The dollar-weighted
average maturity of the Fund's securities must be 90 days or less.
o The Fund will not invest more than 5% of its total assets in the
securities of any one issuer, other than U.S. Government or agency
securities.
The Fund does not maintain a stable net asset value. Income the Fund earns on
its portfolio holdings increases the Fund's net asset value per share until the
Fund declares a dividend. The Fund declares a dividend of net investment income
at least semi-annually, and the Fund's net asset value per share declines as a
result of the distribution to its shareholders.
The Fund uses the amortized cost method of valuing securities that have a
remaining term to maturity of 60 days or less. Because the Fund uses market
value for securities that mature in more than 60 days, the Fund does not invest
more than 20% of its assets in these securities, to limit the possibility of a
decline in the Fund's net asset value.
An investment in the Fund has little market or financial risk but a relatively
high level of current income volatility, because its portfolio holdings are high
quality instruments that have a short time to maturity. Investments in the Money
Market Fund are not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other U.S. Government agency.
Risks of Investing in a Stock Fund
- --------------------------------------------------------------------------------
When you invest in a stock fund, you should consider that:
o The fund is subject to market risk -- the value of your investment will
go up or down, depending on movements in the stock markets. As a
result, you may lose money from your investment, or your investment may
increase in value.
o The investment results for a particular Fund may be better or worse
than the results for the stock markets taken as a whole, depending on
the type of securities in which the Fund invests.
o The investment results for a particular Fund may be better or worse
than the results of other funds that invest in the same types of
securities. In other words, stock selection by a Fund's investment
adviser(s) will impact the Fund's performance.
o The prices and investment performance of stocks that are issued by
companies with smaller market capitalizations may fluctuate more than
the prices and investment performance of stocks that are issued by
companies with larger market capitalizations.
o A Fund may have more difficulty selling a small cap stock or any stock
that trades "over-the-counter", as compared to larger capitalization
stocks or stocks that trade on a national or regional stock exchange.
o Value stocks and growth stocks usually have different investment
results, and either investment style may become out of favor with stock
investors at a given time.
-12-
<PAGE>
Risks of Investing in a Bond Fund
- --------------------------------------------------------------------------------
When you invest in a bond fund, you should consider that:
o The fund has market risk -- the value of your investment will go up or
down depending on movements in the bond markets. As a result, you may
lose money from your investment, or your investment may increase in
value.
o The investment results for a particular Fund may be better or worse
than the results for the comparable bond market taken as a whole,
depending on the type of debt securities in which the Fund invests.
o The investment results for a particular Fund may be better or worse
than the results of other funds that invest in the same types of
securities. In other words, security selection by a Fund's investment
adviser will impact the Fund's performance.
o Changes in prevailing interest rates usually will impact the value of
debt securities. The longer the time period before the security matures
(or is expected to be redeemed), the more impact interest rate changes
will have on the price of the bond. When interest rates rise, the
prices of outstanding debt securities tend to fall. When interest rates
fall, the prices of outstanding debt securities tend to rise.
o Mortgage-backed securities or certificates are subject to prepayment or
extension risk when interest rates change. When interest rates fall,
the underlying mortgages may be prepaid at a faster rate than
previously assumed in pricing the mortgage-backed security, which would
shorten the period to maturity. When interest rates rise, the
underlying mortgages may be prepaid at a slower rate than previously
assumed, which would lengthen the period to maturity.
o In periods of economic uncertainty, investors may favor U.S. government
debt securities over debt securities of corporate issuers, in which
case the value of corporate debt securities would decline in relation
to the value of U.S. government debt securities.
o Zero coupon securities and discount notes do not pay interest, and they
may fluctuate more in market value and be more difficult for a Fund to
resell during periods of interest rate changes than comparable
securities that pay interest in cash at regular intervals. In addition,
the Fund may lose a portion of the principal amount of a zero coupon
security if it sells the security after an increase in interest rates.
o Unrated securities or securities rated below investment grade may be
subject to a greater market risk than higher rated (lower yield)
securities. Since lower rated and unrated securities are generally
issued by corporations that are not as creditworthy or financially
secure as issuers of higher rated securities, there is a greater risk
that issuers of lower rated (higher yield) securities will not be able
to pay the principal and interest due on such securities, especially
during periods of adverse economic conditions.
o The market for debt securities may be subject to significant
volatility, and volatility has generally increased in recent years.
-13-
<PAGE>
Specific Investments or Strategies, and Related Risks
- --------------------------------------------------------------------------------
This section provides additional information about certain of the principal
investment strategies used by the Funds and additional investment strategies the
Funds may use from time to time.
Options and Futures Contracts
Investment Strategies. All of the Funds may purchase and sell put and call
options contracts, futures contracts and options on futures contracts. Depending
on the types of securities in which a Fund invests, the contracts relate to
fixed-income securities (including U.S. Government and agency securities),
equity securities or indexes of securities. All contracts must be traded on
securities or commodities exchanges located in the United States.
A put option on a security gives the Fund the right to sell the security at a
certain price. The purchase of a put option on a security protects the Fund
against declines in the value of the security. A Fund may buy a put option
contract on a security only if it holds the security in its portfolio.
A call option on a security gives the Fund the right to buy the security at a
certain price. The purchase of a call option on a security protects the Fund
against increases in the value of the security that it is considering
purchasing. A Fund may sell a call option contract on a security only if it
holds the security in its portfolio (a covered call).
A Fund may use futures contracts, or options on futures contracts, to protect
against general increases or decreases in the levels of securities prices:
o When a Fund anticipates a general decrease in the market value of
portfolio securities, it may sell futures contracts. If the market
value falls, the decline in the Fund's net asset value may be offset,
in whole or in part, by corresponding gains on the futures position.
o When a Fund projects an increase in the cost of fixed-income securities
or stocks to be acquired in the future, the Fund may purchase futures
contracts on fixed-income securities or stock indexes. If the hedging
transaction is successful, the increased cost of securities
subsequently acquired may be offset, in whole or in part, by gains on
the futures position.
Risks From Options And Futures Contracts. Risks to a Fund in options and futures
transactions include the following:
o The securities held in a Fund's portfolio may not exactly duplicate the
security or securities underlying the options, futures contracts or
options on futures contracts traded by the Fund, and as a result the
price of the portfolio securities being hedged will not move in the
same amount or direction as the underlying index, securities or debt
obligation.
o A Fund purchasing an option may lose the entire amount of the premium
plus related transaction costs.
o If a Fund has written a covered call option and the price of the
underlying security increases sufficiently, the option may be
exercised. The Fund will be required to sell the security at a price
below current market value, with the loss offset only by the amount of
the premium the Fund received from writing the option.
Zero Coupon Securities and Discount Notes
The Bond Fund, as well as the All America Fund to the extent it invests in fixed
income securities, may invest in discount notes and zero coupon securities.
Discount notes mature in one year or less from the date of issuance. Zero coupon
securities may be issued by corporations, the U.S. Government or certain U.S.
Government agencies. Discount notes and zero coupon securities do not pay
interest. Instead, they are issued at prices that are discounted from the
principal (par) amount due at maturity.
Risks From Zero Coupon Securities and Discount Notes. Zero coupon securities and
discount notes may fluctuate more in market value and be more difficult for a
Fund to resell during periods of interest rate changes in the economy than
comparable securities that pay interest in cash at regular intervals. The market
values of outstanding debt securities generally decline when interest rates are
rising, and during such periods a Fund may lose more investment capital if it
sells zero coupon securities prior to their maturity date or expected redemption
date than if it sells comparable interest-bearing securities. In general, the
longer the remaining term to maturity or expected redemption of a security, the
greater the impact on market value from rising interest rates.
-14-
<PAGE>
Redeemable Securities
An issuer of debt securities, including zero coupon securities, often has the
right after a period of time to redeem (call) securities prior to their stated
maturity date, either at a specific date or from time to time. When interest
rates rise, an issuer of debt securities generally is less likely to redeem
securities that were issued at a lower interest rate, or for a lower amount of
original issue discount in the case of the zero coupon securities. In such
instance, the period until redemption or maturity of the security may be longer
than the purchaser initially anticipated, and the market value of the debt
security may decline. If an issuer redeems a security when prevailing interest
rates are relatively low, a Fund may be unable to reinvest proceeds in
comparable securities with similar yields.
American Depository Receipts ("ADRS")
ADRs are dollar-denominated receipts that U.S. banks generally issue. An ADR
represents the deposit with the bank of a security of a foreign issuer. ADRs are
publicly traded on exchanges or are traded over-the-counter in the United
States. An ADR has currency risk, because its value is based on the value of the
security issued by a foreign issuer. The All America Fund intends to invest a
small percentage of its total assets in ADRs.
ADRs are subject to many of the same risks as foreign securities, such as
possible:
o unavailablity of financial information,
o changes in currency or exchange rates, and
o difficulty by the Adviser or a Subadviser in assessing economic or
political trends in a foreign country.
Mortgage-Backed Securities
The Bond Fund, as well as the All America Fund to the extent it invests in debt
securities, may invest in mortgage-backed securities. These securities represent
interests in pools of mortgage loans, or they may be collateralized mortgage
obligations secured by pools of mortgage loans (CMOs). Holders of
mortgage-backed securities receive periodic payments that consist of both
interest and principal from the underlying mortgages.
Some mortgage-backed securities are issued by private corporations.
Mortgage-backed securities also include securities guaranteed by the Government
National Mortgage Association (Ginnie Maes), securities issued by the Federal
National Mortgage Association (Fannie Maes), participation certificates issued
by the Federal Home Loan Mortgage Corporation (Freddie Macs). The timely payment
of principal and interest is backed by the full faith and credit of the U.S.
Government (full faith and credit) in the case of Ginnie Maes, but Fannie Maes
and Freddie Macs are not full faith and credit obligations.
Risks From Mortgage Backed Securities. Characteristics of underlying mortgage
pools will vary, and it is not possible to precisely predict the realized yield
or average life of a particular mortgage-backed security, because of the
principal prepayment feature inherent in the security.
o A decline in interest rates may lead to increased prepayment of the
underlying mortgages, and the securityholder may have to reinvest
proceeds received at lower yields. Unscheduled or early payments on the
underlying mortgages may shorten the effective maturity of a
mortgage-backed security and could negatively affect the yield and
price of the security.
o An increase in interest rates may lead to prepayment of the underlying
mortgages over a longer time period than was assumed when the
mortgage-backed security was purchased, and the securityholder may not
receive payments to reinvest at higher rates of return. Delay in
payments on the underlying mortgages may lengthen the effective
maturity of the security and could negatively affect the price and
yield of the security.
o Mortgage-backed securities issued by private corporations generally
will have more credit risk than securities issued by U.S. Government
agencies. Freddie Mac and Fannie Mae mortgage-backed securities, which
are not full faith and credit obligations, may have more credit risk
than Ginnie Mae securities.
-15-
<PAGE>
- --------------------------------------------------------------------------------
INFORMATION ABOUT FUND SHARES
- --------------------------------------------------------------------------------
Pricing of Funds' Shares
- --------------------------------------------------------------------------------
The purchase or redemption price of a Fund share is equal to its net asset value
that we next calculate after we receive the purchase or redemption order. A
Fund's net asset value per share is equal to the sum of the value of the
securities it holds plus any cash or other assets (including accrued interest
and dividends), minus all liabilities (including accrued expenses) divided by
the number of shares outstanding. The Adviser determines a Fund's net asset
value as of the close of trading on the New York Stock Exchange on each day the
New York Stock Exchange is open for trading (a Valuation Day). The Exchange
usually closes at 4:00 p.m. Eastern Time but sometimes closes earlier.
o In determining a Fund's net asset value, the Adviser uses market value.
o If a money market security has a remaining maturity of 60 days or less,
the Adviser will use the amortized cost method of valuation to
approximate market value (the Adviser assumes constant proportionate
amortization in value until maturity of any discount or premium).
o If there are any equity or debt securities or assets for which market
quotations are not readily available, the Adviser will use fair value
pricing, as determined in good faith by, or under the direction of, the
Board of Directors of the Investment Company.
Purchases of Fund Shares
- --------------------------------------------------------------------------------
Only institutional investors may purchase Fund shares. Institutional investors
include endowments, foundations, corporations, not-for-profit corporations,
municipalities and other public entities and trusts. There is no sales charge
for the purchase of Fund shares.
Mutual of America Securities Corporation, 320 Park Avenue, New York, New York
10022 (the Distributor), is the principal underwriter and distributor of Fund
shares. The Distributor has field offices throughout the United States for the
offering and sale of shares of the Investment Company's Funds.
A shareholder must pay the purchase amount by wire transfer of Federal Funds.
Wire transfers can be made on any day on which the Investment Company, Federal
Reserve Bank of New York and the Investment Company's custodian and transfer
agent are open and the New York Stock Exchange is open.
The Investment Company reserves the right to reject any purchase order, to
increase or decrease the minimum required initial and subsequent investments and
to waive the minimum for an initial investment or for subsequent investments.
-16-
<PAGE>
How to Purchase Shares of the Funds
- --------------------------------------------------------------------------------
Application: A prospective purchaser must complete an
application, including any required resolutions,
attached to this Prospectus. You may obtain
additional applications by calling the Investment
Company at 1-800-914-8716.
Application Delivery: A prospective purchaser should deliver a completed
application to a registered representative of the
Distributor. Registered representatives are
employees of Mutual of America Life Insurance
Company.
Application Approval: After the Investment Company and Distributor have
approved an application, the registered
representative (or the Investment Company) will
notify the prospective purchaser that the account
has been established and that the purchaser may
transmit the initial purchase amount.
Minimum Purchase: A shareholders' initial purchase must total at
least $25,000, and subsequent purchases must total
at least $5,000.
Wire Transfer of Funds: An investor must send all purchase amounts by wire
transfer of Federal Funds to the Investment
Company's account at its transfer agent. Your bank
may charge you a fee for the wire transfer. You
may contact the Investment Company by telephone at
1-800-914-8716 between the hours of 9:00 a.m. and
8:00 p.m. Eastern Time, Monday through Friday on
any business day, to advise of an anticipated wire
transfer. Your bank should wire funds according to
these instructions:
State Street Bank and Trust Company
Boston, Massachusetts 02101
ABA #011-000028
BNF = AC-49097181, Mutual Funds F/B/O
Mutual of America
OBI = Purchaser: Acct. No.:
$ to the Equity Fund $ to the All America Fund
$ to the Bond Fund $ to the Money Market Fund
Your funds may be returned to you if the
Investment Company or its transfer agent does not
have sufficient information to insure the correct
processing of the funds or if your application has
not yet been approved.
Receipt of Order: Wire transfer funds received by the Investment
Company in its account prior to 4:00 p.m. Eastern
Time will be considered received that day.
Purchase amounts received after 4:00 p.m. Eastern
Time will be considered received on the next
Valuation Day.
Wire Transfer Days: Wire transfers for the purchase of Fund shares can
be made on days when banks (including the transfer
agent) and the New York Stock Exchange are open
for business. The Investment Company anticipates
that wire transfers cannot be made on Saturdays
and Sundays, and the holidays of Martin Luther
King, Jr.'s Birthday, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day,
Columbus Day, Veterans' Day, Thanksgiving Day,
Christmas Day and New Year's Day.
Redemptions of Fund Shares
- --------------------------------------------------------------------------------
A shareholder at any time may redeem (sell) shares of the Fund(s) that the
shareholder owns. There is no deferred sales charge when a shareholder redeems
shares of the Funds.
If a shareholder's redemption order is received by 4:00 p.m. Eastern Time on a
Valuation Day, the redemption proceeds usually will be transmitted on a trade
date-plus-one basis (the next Valuation Day). Wire transfers of
-17-
<PAGE>
redemption proceeds cannot be made on days the transfer agent is closed. See
"Wire transfer Days" above under "How to Purchase Shares of the Funds".
We pay redemption proceeds normally within seven days of receipt of the
redemption request, unless the Investment Company suspends or delays payment of
redemption proceeds as permitted in accordance with SEC regulations.
A shareholder will receive redemption proceeds in cash deposited to its bank
account, except that the Investment Company reserves the right to redeem shares
by the delivery, in whole or in part, of readily marketable securities instead
of cash when a shareholder's redemption proceeds total more than 10% of the net
asset value of a Fund.
The Investment Company reserves the right to change or waive the minimum amount
for a redemption, which currently is $5,000. The Investment Company reserves the
right to redeem, upon not less than 30 days' written notice, all shares in a
shareholder's Fund account when the aggregate value of the shares is less than
$5,000.
Exchanges of Fund Shares
- --------------------------------------------------------------------------------
A shareholder may exchange shares of one Fund for shares of another Fund. An
exchange is the redemption of the shares from one Fund and the application of
the redemption proceeds to the immediate purchase of shares of another Fund.
The Investment Company may terminate or modify the terms of the exchange
privilege upon 30 days' written notice to shareholders. The Investment Company
may refuse to implement the purchase side of any exchange request that it
concludes is based on a market timing or asset allocation strategy if the
Investment Company determines the exchange would be disruptive to a Fund.
The Investment Company reserves the right to change or waive the minimum amount
for an exchange, which currently is $5,000.
How to Place a Redemption or Exchange Order
- --------------------------------------------------------------------------------
Who May Give an Order: Only a shareholder's authorized person
using a Personal Identification Number
(PIN) that we have assigned may place a
redemption order or exchange order. A
shareholder must list authorized persons
in the initial application to purchase
Fund shares, in an amended application, or
in another written form that is acceptable
to the Investment Company.
Minimum Amount: A redemption or exchange order must be for
at least $5,000.
Orders by Telephone: A shareholder may place a redemption or
exchange order by telephone if the
shareholder elected the option for
telephone orders in its initial
application to purchase Fund shares or in
an amended application.
A shareholder should call the Investment
Company at 1-800-914-8716 between the hours
of 9:00 a.m. and 8:00 p.m. Eastern Time,
Monday through Friday on any Valuation Day
to place an order. If a shareholder places
a redemption or exchange order after 4:00
p.m. Eastern Time on a Valuation Day or on
a day that is not a Valuation Day, the
order will be considered received on the
next Valuation Day.
The Investment Company will verify the
shareholder's name, the PIN assigned by the
Investment Company to the authorized person
calling for the account and the
shareholder's account number, and record
telephone requests.
The Investment Company and the Funds'
transfer agent will not be liable for any
losses or expenses resulting from any
telephone redemption or exchange order
reasonably believed to be genuine or for
the inability of a shareholder to make a
telephone request on any particular day.
The Investment Company reserves the right
to add to or modify its procedures in the
future.
-18-
<PAGE>
Orders In Writing: A shareholder may make a redemption or
exchange request in writing. The
shareholder must specify the account name,
the account number, the Fund from which
shares are to be redeemed, the dollar
amount or number of shares to be redeemed,
and for exchange orders, the Fund or Funds
whose shares will be purchased with the
exchange proceeds.
The necessary authorized person(s) must
sign the order, and each signer should
print his or her name and title under the
signature.
A shareholder should send a written request
to Mutual of America Institutional Funds,
Inc., 320 Park Avenue, New York, New York
10022. A shareholder may send a written
request to the Regional Office of the
Distributor, which will foward the request
to the Investment Company. The Valuation
Day for the order will be the Valuation Day
the Investment Company receives the request
at its 320 Park Avenue offices.
Redemption Proceeds: A shareholder will receive redemption
proceeds by wire transfer of Federal Funds
to the bank account stated in the
shareholder's initial application, or in
an amended application. An authorized
person may not specify a different bank
account by telephone.
Exchange Proceeds: The proceeds from the shares of the Fund
being exchanged are immediately applied
for the purchase of shares in another
Fund.
Shareholder Reports and Confirmation Statements
- --------------------------------------------------------------------------------
The Investment Company, on behalf of the Distributor, will send to shareholders
confirmation statements for each purchase, exchange or redemption transaction. A
confirmation statement will show the Fund, number of shares, order date, net
asset value per share and dollar amount for the transaction. A shareholder must
report any error on a confirmation statement within two weeks after the mailing
or other transmission of the statement to the shareholder.
The Investment Company will send each shareholder a quarterly statement, which
will include Fund shares purchased, exchanged or redeemed during the month, the
net asset value per share and total dollar amount for each transaction, and the
shareholder's account balance in each Fund at the end of the period.
Dividends, Capital Gains Distributions and Taxation Of Funds
- --------------------------------------------------------------------------------
For each Fund, the Investment Company declares dividends at the end of June and
end of December to pay out all or substantially all of the Fund's net investment
income (dividends) and declares dividends at the end of December to pay out
substantially all of the Fund's net realized short and long term capital gains
(capital gains distributions). A Fund may make a special distribution in
September of each year to comply with Federal tax law requirements for mutual
funds.
A shareholder may elect, in its application to purchase Fund shares or in an
amended application, to:
o automatically reinvest dividends and distributions from a Fund in
additional shares of the Fund;
o receive dividends and distributions in cash; or
o automatically reinvest dividends from any Fund in shares of the Money
Market Fund.
A Fund is not subject to Federal income tax on ordinary income and net realized
capital gains that it distributes to shareholders, as long as the Fund satisfies
Federal tax law provisions, including certain minimum distribution requirements.
Each Fund is treated as a separate corporation for Federal income tax purposes
and must satisfy the tax requirements independently.
-19-
<PAGE>
Shareholder Taxation
- --------------------------------------------------------------------------------
Each shareholder should consult its own tax adviser about the Federal, state,
local and, if applicable, foreign tax consequences of investing in Fund shares,
because investors' tax situations will vary. Below are general rules about
Federal income taxation for an investor to consider. When a shareholder redeems
(sells) shares of a Fund, including in an exchange transaction, the shareholder
will have a gain or a loss on its investment in those shares.
o If the shareholder owned the shares sold for more than a year, it
generally will have a long-term capital gain or loss.
o If the shareholder owned the shares sold for less than a year, any gain
will be short-term capital gain taxable at ordinary income rates, and
any loss may be subject to special tax rules.
When a shareholder receives dividends or distributions from a Fund, the
shareholder (unless it is exempt from taxation) will owe tax on the amount
received, even if the shareholder automatically reinvests the dividend or
distribution in additional Fund shares. A shareholder will receive dividends or
distributions when declared and paid by a Fund, even if the shareholder has only
recently purchased Fund shares.
o Ordinary income rates apply to a Fund's dividends of ordinary income
and net realized short-term capital gains.
o Capital gain rates apply to a Fund's distributions of net realized
long-term capital gains.
o A potential investor should consider the tax impact of purchasing Fund
shares when the Fund is expected to pay dividends or distributions in
the near future.
Withholding For Federal Income Taxes. A shareholder on its application to
purchase Fund shares may make representations and provide information to be
exempt from withholding for Federal income tax on the Investment Company's
distributions and dividends and payment of redemption proceeds. U.S. corporate
shareholders and certain other entities named in the Internal Revenue Code are
exempt from withholding under certain circumstances.
The Investment Company will withhold for Federal income tax if:
o a shareholder has not provided a correct taxpayer identification
number, or
o a shareholder has not made the certifications required to be exempt
from withholding, or
o the Investment Company or the shareholder has been notified by the
Internal Revenue Service that the shareholder is subject to back-up
withholding.
A shareholder may credit any amount withheld by the Investment Company against
the Federal income tax liability of the shareholder.
Each January, the Investment Company will provide reports to Fund shareholders
of the Federal income tax status of distributions and dividends made by the
Funds during the previous year.
-20-
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
The financial highlights tables are intended to help you understand the Funds'
financial performance. They show performance for the period of a Fund's
operations, because the Funds have operated less than five years. Certain
information reflects financial results for a single Fund share.
The total returns in the table represent the rate that an investor would have
earned or lost on an investment in the particular Fund (assuming reinvestment of
all dividends and distributions). This information has been audited by Arthur
Andersen LLP, whose report, along with the Investment Company's financial
statements, are included in the annual report, which is available upon request.
All America Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------
1999 1998 1997 1996(d)
---- ---- ---- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year/Period ......................... $ 15.08 $ 12.65 $ 10.98 $ 10.00
--------- --------- --------- ---------
Income From Investment Operations:
Net Investment Income ........................................... .09 .07 .08 .06
Net Gains or Losses on Securities (realized and unrealized) ..... 3.81 2.57 2.77 .98
--------- --------- --------- ---------
Total From Investment Operations .............................. 3.90 2.64 2.85 1.04
--------- --------- --------- ---------
Less Dividend Distributions:
From net investment income ...................................... (.08) (.08) (.08) (.06)
From capital gains .............................................. (2.43) (.13) (1.10) --
--------- --------- --------- ---------
Total Distributions ........................................... (2.51) (.21) (1.18) (.06)
--------- --------- --------- ---------
Net Asset Value, End of Year/Period ............................... $ 16.47 $ 15.08 $ 12.65 $ 10.98
========= ========= ========= =========
Total Return(a).................................................... 26.0% 21.0% 26.0% 10.4%
Ratios/Supplemental Data
Net Assets, End of Year/Period ($ millions) ....................... $ 72.4 $ 70.8 $ 56.7 $ 55.5
Ratio of Net Investment Income to Average Net Assets .............. .51% .55% .59% .95%(b)
Ratio of Expenses to Average Net Assets ........................... .85% .84% .84% .87%(b)
Ratio of Expenses to Average Net Assets after Expense Reimbursement .84% .82% .81% .85%(b)
Portfolio Turnover Rate(c) ........................................ 34.89% 41.25% 35.96% 9.33%
</TABLE>
- ----------
(a) Not annualized. Total Return would have been lower had certain
expenses not been reduced through expense reimbursement (Note 2).
(b) Annualized.
(c) Portfolio turnover rate excludes short-term securities.
(d) Commenced operations May 1, 1996.
-21-
<PAGE>
Equity Index Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
December 31, 1999(d)
----------------------
<S> <C>
Net Asset Value, Beginning of Period ....................................... $10.00
------
Income From Investment Operations:
Net Investment Income .................................................... .08
Net Gains or Losses on Securities (realized and unrealized) .............. .82
------
Total From Investment Operations ....................................... .90
------
Less Dividend Distributions:
From net investment income ............................................... (.08)
From capital gains ....................................................... (.02)
------
Total Distributions .................................................... (.10)
------
Net Asset Value, End of Year/Period ........................................ $10.80
------
Total Return(a)............................................................. 9.0%
Ratios/Supplemental Data
Net Assets, End of Year/Period ($ millions) ................................ $29.5
Ratio of Net Investment Income to Average Net Assets ....................... 1.22%(b)
Ratio of Expenses to Average Net Assets .................................... .63%(b)
Ratio of Expenses to Average Net Assets after Expense Reimbursement ........ .32%(b)
Portfolio Turnover Rate(c) ................................................. 5.67%
</TABLE>
Bond Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1999 1998 1997 1996(e)
---- ---- ---- ------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year/Period ......................... $10.41 $10.41 $10.13 $10.01
------ ------ ------ ------
Income From Investment Operations:
Net Investment Income ........................................... .60 .61 .59 .38
Net Gains or Losses on Securities (realized and unrealized) ..... (.87) .24 .29 .12
------ ------ ------ ------
Total From Investment Operations .............................. (.27) .85 .88 .50
------ ------ ------ ------
Less Dividend Distributions:
From net investment income ...................................... (.60) (.62) (.59) (.38)
From capital gains .............................................. (.09) (.23) (.01) --
------ ------ ------ ------
Total Distributions ........................................... (.69) (.85) (.60) (.38)
------ ------ ------ ------
Net Asset Value, End of Year/Period ............................... $ 9.45 $10.41 $10.41 $10.13
====== ====== ====== ======
Total Return(a).................................................... (3.5)% 8.3% 8.9% 5.0%
Ratios/Supplemental Data
Net Assets, End of Year/Period ($ millions) ....................... $28.7 $25.2 $22.1 $21.0
Ratio of Net Investment Income to Average Net Assets .............. 6.23% 5.84% 5.69% 5.63%(b)
Ratio of Expenses to Average Net Assets ........................... .93% .97% 1.00% .90%(b)
Ratio of Expenses to Average Net Assets After Expense Reimbursement .70% .70% .70% .70%(b)
Portfolio Turnover Rate(c) ........................................ 10.07% 33.32% 56.18% 17.85%
</TABLE>
- ----------
(a) Not annualized. Total Return would have been lower had certain
expenses not been reduced through expense reimbursement (Note 2).
(b) Annualized.
(c) Portfolio turnover rate excludes short-term securities.
(d) Commenced operations May 3, 1999.
(e) Commenced operations May 1, 1996.
-22-
<PAGE>
Money Market Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------
1999 1998 1997(d)
------ ------ ------
<S> <C> <C> <C>
Net Asset Value, Beginning of Year/Period ....................................... $10.23 $10.15 $10.00
------ ------ ------
Income From Investment Operations:
Net Investment Income ......................................................... .50 .52 .35
Net Gains or Losses on Securities (realized and unrealized) ................... -- -- --
------ ------ ------
Total From Investment Operations ............................................ .50 .52 .35
------ ------ ------
Less: Dividend Distributions From Net Investment Income ......................... (.34) (.44) (.20)
------ ------ ------
Total Distributions ......................................................... (.34) (.44) (.20)
------ ------ ------
Net Asset Value, End of Year/Period ............................................. $10.39 $10.23 $10.15
====== ====== ======
Total Return(a).................................................................. 4.9% 5.3% 3.5%
Ratios/Supplemental Data
Net Assets, End of Year/Period ($ millions) ..................................... $30.2 $ 6.5 $ 7.5
Ratio of Net Investment Income to Average Net Assets ............................ 4.86% 5.14% 5.17%(b)
Ratio of Expenses to Average Net Assets ......................................... 1.02% 3.21% 2.47%(b)
Ratio of Expenses to Average Net Assets after Expense Reimbursement ............. .40% .40% .40%(b)
Portfolio Turnover Rate(c) ...................................................... N/A N/A N/A
</TABLE>
- --------------
(a) Not annualized. Total return would have been lower had certain expenses
not been reduced through expense reimbursement (Note 2).
(b) Annualized.
(c) Portfolio turnover rate excludes short-term securities.
(d) Commenced operations May 1, 1997.
N/A Not Applicable
-23-
<PAGE>
Investment Company
Mutual of America Institutional Funds, Inc.
Distributor
-----------
Mutual of America Securities Corporation
Investment Adviser
------------------
Mutual of America Capital Management Corporation
Subadvisers for a portion of the All America Fund
-------------------------------------------------
Fred Alger Management, Inc.
Oak Associates, Ltd.
Independent Auditors
--------------------
Arthur Andersen LLP
Counsel
-------
Swidler Berlin Shereff Friedman, LLP
Custodian
---------
The Chase Manhattan Bank
Transfer Agent
--------------
State Street Bank and Trust Company
The Investment Company sells shares of its Funds only to institutional
investors.
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
320 Park Avenue, New York, New York 10022 1-800-914-8716
You May Obtain More Information
- --------------------------------------------------------------------------------
Registration Statement. We have filed with the Securities and Exchange
Commission (the Commission) a Registration Statement about the Investment
Company. The Registration Statement includes this prospectus, a Statement of
Additional Information (the SAI), and exhibits. You may examine and copy the
Registration Statement at the Commission's Public Reference Room in Washington,
DC. You may call 1-800-SEC-0330 to learn about the operation of the Public
Reference Room.
Statement of Additional Information. The SAI contains additional information
about the Investment Company and its Funds. We incorporate the SAI into this
Prospectus by reference.
Semi-Annual and Annual Reports. Additional information about the Funds'
investments is available in the Investment Company's annual and semi-annual
reports to shareholders. In the annual reports, you will find a discussion (for
all Funds except the Money Market Fund) of the market conditions and investment
strategies that significantly affected the Funds' performance during its last
fiscal year.
How To Obtain the SAI and Reports. You may obtain a free copy of the SAI or of
the Investment Company's most recent annual and semi-annual financial
statements, by:
o writing to us at 320 Park Avenue, New York, NY 10022, Attn: Institutional
Funds, or
o calling 1-800-914-8716 and asking for the Investment Company.
The Commission has an Internet web site at http://www.sec.gov. You may obtain
the Investment Company's Registration Statement, including the SAI, and its
semi-annual and annual reports through the Commission's Internet site. You also
may obtain copies of these documents, upon your payment of a duplicating fee, by
writing to the Commission's Public Reference Section, Washington, DC 20549-6009.
Where To Direct Questions. If you have questions about the operations of the
Investment Company, you should contact your representative at Mutual of America
Securities Corporation. You may call 1-800-914-8716 for the address and phone
number of the office nearest you.
Investment Company Act of 1940 Act File Number 811-8922
- --------------------------------------------------------------------------------
Prospectus dated May 1, 2000
<PAGE>
MUTUAL OF AMERICA
INSTITUTIONAL
FUNDS, INC.
EQUITY INDEX FUND
ALL AMERICA FUND
BOND FUND
MONEY MARKET FUND
Distributed by:
MUTUAL OF AMERICA SECURITIES CORPORATION
320 PARK AVENUE
NEW YORK, NY 10022-6839
................................................
Investment Adviser
MUTUAL OF AMERICA CAPITAL MANAGEMENT CORPORATION
Transfer and Shareholder Services Agent
STATE STREET BANK AND TRUST COMPANY
Investment Accounting Agent
MUTUAL OF AMERICA CAPITAL MANAGEMENT CORPORATION
Independent Accountants
ARTHUR ANDERSEN LLP
Custodian
THE CHASE MANHATTAN BANK
<PAGE>
MUTUAL OF AMERICA
INSTITUTIONAL FUNDS, INC.
320 PARK AVENUE
NEW YORK NY 10022-6839
Application and Authorization Form
|_| Initial Distributor:
|_| Amendment Mutual of America Securities Corporation
Member NASD/SIPC
320 Park Avenue, New York, NY 10022-6839
Taxpayer ID Number
- ---------------------------
(Account Number Assigned)
- ---------------------------
1. Applicant's Account
Identification
Please print
- --------------------------------------------------------------------------------
FULL LEGAL NAME OF INSTITUTION (OWNER OF ACCOUNT) TELEPHONE NUMBER
- --------------------------------------------------------------------------------
ADDRESS FAX NUMBER
- --------------------------------------------------------------------------------
CITY STATE ZIP CODE
- --------------------------------------------------------------------------------
TO THE ATTENTION OF (NAME AND TITLE)
- --------------------------------------------------------------------------------
NAME, TITLE AND ADDRESS OF PERSON TO RECEIVE |_| TAX REPORTS
|_| DUPLICATE CONFIRMATIONS
- ---------------------------
2. Type of Entity
Check applicable boxes,
and fill in blanks
|_| Endowment |_| Not-for-Profit Corporation |_| Foundation |_| Corporation
|_| Trust |_| Partnership (general) (limited) Circle one
|_| Other
----------------------------------------------------------------------
Year entity started State where formed
------------- ---------------------------
- ---------------------------
3. Initial Investment in
Fund Portfolios
By wire transfer only
Total Investment $ (minimum $25,000 unless waived by
-------------------- Institutional Fund)
All America $ Bond $
------------------------------ ---------------------------
Money Market $ Equity Index $
------------------------------ -------------------
- --------------------------
4. Telephone Redemption
and Exchange Requests
Check one box
|_| Redemption and exchange requests may be made by telephone by Authorized
Persons (Item 7 below) or any person reasonably believed by Mutual of
America Institutional Funds, Inc. ("the Institutional Fund"), State Street
Bank and Trust Company ("Transfer Agent"), or Mutual of America Securities
Corporation ("Distributor") to be an Authorized Person.
|_| Redemption and exchanges may be made in writing only.
- --------------------------
5. Dividends and
Distributions
Check one box
|_| Pay all dividends and capital gains distributions in cash to shareholder by
wire transfer to account specified in Item 6 of this Application.
|_| Invest all dividends and capital gains distributions from all Funds in
Money Market Fund shares.
|_| Reinvest all dividends and capital gains distributions from a Fund in
additional Fund shares.
<PAGE>
- --------------------------
6. Payment of Proceeds
to Owner
Information is required
May only be changed by
amendment to Application
All redemption proceeds, and dividends and capital gains distributions that are
to be paid to Applicant, should be sent by wire transfer to Applicant as
follows:
Bank Name
----------------------------------------------------------------------
Address
------------------------------------------------------------------------
City State Zip Code
------------------------------------------------- ----- ------
ABA No.
------------------------------------------------------------------------
Branch Name (if any) and ABA No.
-----------------------------------------------
Account name and No.
-----------------------------------------------------------
- --------------------------
7. Authorized Persons
May only be changed by
amendment to Application
The following persons have the right and authority to give instructions and to
take actions as Authorized Persons as contemplated in this Application and the
prospectus of the Institutional Fund, each Authorized person has been duly
elected or appointed and legally holds the office or position specified, and the
signature set forth opposite the name of each Authorized Person is a true and
correct specimen. --attach pages if necessary--
Name and Title (Please print) Signature
- ----------------------------------- ----------------------------------------
- ----------------------------------- ----------------------------------------
- ----------------------------------- ----------------------------------------
- --------------------------
8. Confirms, Statements,
Telephone Recording
Each report of the execution of an order and statement of the account shall be
conclusive if Applicant does not notify the Institutional Fund of any error
within two weeks after the mailing or other transmission of such document to
Applicant. Applicant authorizes the Institutional Fund, Transfer Agent and the
Distributor, each in their discretion and without prior notice to Applicant, to
record and/or monitor telephone conversations in connection with Applicant's
account and transactions in Fund shares.
- ---------------------------
9. Certificate of Authority
By signing this Application and delivering it to the Institutional Fund,
Applicant represents and warrants that it has the power and authority to
purchase Fund shares through the Distributor, on the terms and conditions set
forth in this Application and the Institutional Fund prospectus, and each signer
of the Application represents and warrants that he (or she) is duly authorized
to sign on behalf of Applicant.
Upon Applicant's request, the Institutional Fund will provide (1) a form of
Certificate of Resolutions and Incumbency, for use by a corporation or other
entity that has a Board of Directors or Board of Trustees, or (2) a form of
Certificate of Authority and Authorized Persons, for use by a trust, partnership
or other unincorporated entity.
<PAGE>
- ---------------------------
10. Financial Information
Give approximate
amounts
Annual Income/Revenue: $ Current securities Portfolio: $
------------ --------------
Surplus (or Net Worth/Net Assets): $ Total Assets: $
---------- -----------------
- ---------------------------
11. Investing Information
Does Applicant receive investment advice for the purchase or sale of securities
from any of the following? Yes |_| No |_| If "Yes" check all that apply:
|_| In-House Investment Professionals |_| Bank Trust Department
|_| Investment Adviser |_| Investment Committee of Board
|_| Other:
------------------------------------
Does Applicant understand the investment risks, including market risks, or
owning shares of the Mutual of America Institutional Funds? |_| Yes |_| No
Will Applicant redeem holdings in any mutual fund, certificate of deposit, or
other investment to purchase Institutional Fund shares? |_| Yes |_| No
State redemption amount and, if applicable, the total fee or
penalty:
-----------------------
- ---------------------------
12. Investment Objectives
Are the investment objectives of the Funds of Mutual of America Institutional
Funds, Inc. consistent with Applicant's current investment objectives? Check
appropriate box(es) below.
All America Fund - total return by capital growth and, to a
lesser extent, current income: |_| Yes |_| No
Equity Index Fund - investment results that correspond to the performance
of common stocks included in the S&P 500 Index: |_| Yes |_| No
Bond Fund - current income with preservation of capital a secondary
objective: |_| Yes |_| No
Money Market Fund - current income to extent consistent with liquidity,
investment quality and stability of capital: |_| Yes |_| No
Do you expect to redeem All America Fund, Equity Index Fund or Bond Fund shares
within 30 to 60 days from the date of initial investment to meet
short-term liquidity needs? |_| Yes |_| No
- ---------------------------
13. Investment Experience
Check the level of
Applicant's experience in
securities listed
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
None Some Much None Some Much
<S> <C> <C> <C> <C> <C> <C> <C>
Exchange-listed equities Government bonds
- ----------------------------------------------------------------------------------------------------------
NASDAQ/OTC equities Equity mutual funds
- ----------------------------------------------------------------------------------------------------------
Corporate bonds Bond mutual funds
- ----------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------------------
14. Pre-Dispute Arbitration Agreement
Arbitration will be used to resolve any dispute between Applicant (you) and
Mutual of America Securities Corporation (us). Mutual of America Securities
Corporation serves as a distributor of shares of Mutual of America Institutional
Funds, Inc. and may in the future distribute shares of additional mutual funds
(together, the "Funds"). Arbitration forums were conceived by the Securities and
Exchange Commission, the New York Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. to provide a dispute resolution
mechanism that is an alternative to court proceedings and that is expected to be
more efficient and less costly than court litigation.
You acknowledge that you are aware of the following aspects of arbitration:
1. Arbitration is final and binding on the parties.
2. The parties waive their right to seek remedies in court, including the
right to jury trial.
3. Pre-arbitration discovery is generally more limited than and different
from court proceedings.
4. The arbitrators' award is not required to include factual findings or
legal reasoning, and any party's right to appeal or to seek
modification of rulings by the arbitrators is strictly limited.
5. The panel of arbitrators will typically include a minority or
arbitrators who were or who are affiliated with the securities
industry.
<PAGE>
You agree that all controversies that may arise between you and us concerning
any order or transaction, or concerning the continuation, performance or breach
of the Agreement, the Application for the purchase of Fund shares, or any other
agreement between you and us, shall be determined by arbitration before a panel
of independent arbitrators set up by the National Association of Securities
Dealers, Inc., conducted in accordance with the arbitration rules of the
National Association of Securities Dealers, Inc. New York law, without regard to
choice of law provisions, shall govern and shall be applied by the arbitrators
to any such controversy. Punitive damages, if any, shall be limited to the
maximum extent permitted by the National Association of Securities Dealers,
Inc., or otherwise permitted by law. You understand and acknowledge that
judgment upon any arbitration award may be entered in any court of competent
jurisdiction.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action; or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action, until: (1) the class certification is denied, or
(ii) the class is decertified, or (iii) the customer is excluded from the class
by the court. Such forbearance to enforce an agreement to arbitrate shall not
constitute a waiver of any rights under this agreement except to the extent
stated herein.
- ---------------------------
15. Tax Certification
Check one box
Applicant is a tax-exempt organization: |_| Yes |_| No
Important: If Applicant is for any reason subject to backup withholding, strike
out phrase (2).
Applicant certifies under penalties of perjury that (1) the number shown in the
Taxpayer ID box above is Applicant's correct taxpayer identification number; and
(2) Applicant is not subject to backup withholding because (a) Applicant is
exempt from backup withholding, or (b) Applicant has not been notified by the
IRS that it is subject to backup withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has notified the Applicant that it is
no longer subject to backup withholding.
- ---------------------------
16. Acceptance and Signature(s)
Do not wire funds until
you have been notified of
Application approval
The Applicant affirms that: it has received the prospectus for the Institutional
Fund; the information and certifications set forth in this Application
(amendment) are true and correct, and the Institutional Fund, the Transfer Agent
and the Distributor are entitled to rely on them until the Institutional Fund
receives actual written notice in accordance with its procedures of any change
to the information and/or certifications; and Applicant has reviewed the
Pre-Dispute Arbitration Agreement in Paragraph 14 and agrees to its terms and
has reviewed the tax certification in Paragraph 15.
APPLICANT
-----------------------------------------------------------------------
By:
--------------------------------------------
Signature
Date:
- ----------------------------------------------- ---------
Print Name and Title of Authorized Person
By:
--------------------------------------------
Signature [If required]
Date:
- ------------------------------------------------------------ ---------
Print Name and Title of Secretary or Other Authorized Person
(seal)
THE FOLLOWING IS TO BE COMPLETED BY MUTUAL OF AMERICA SECURITIES CORPORATION
Did Consultant solicit the Applicant's purchase of Mutual of America
Institutional Funds, Inc., shares? |_| Yes |_| No
How long has Consultant known Applicant? (Months or Years)
-------------------
Consultant represents and certifies that: (1) based on the information provided
to me by Applicant, the purchase of shares of the Mutual of America
Institutional Funds, Inc. (the "Funds") is suitable for the Applicant's stated
investment objective(s) and financial position; (2) the Applicant has received
the current prospectus for the Funds and any supplements thereto; (3) I am
properly licensed with Mutual of America Securities Corporation at the state and
federal levels to sell shares of the Funds to Applicant; (4) when I have
knowledge of any changes or updates to information provided by Applicant, I will
promptly modify the records of Mutual of America Securities Corporation. My
suitability determination was based on (check as applicable and attach summaries
of discussions or other information obtained):
|_| Discussions with Applicant or Applicant's Adviser
|_| Financial or other information provided by Applicant or its Adviser
- --------------------------------------------------------------------------------
SIGNATURE OF CONSULTANT, AS REGISTERED REPRESENTATIVE OF SECURITIES CORP.
- --------------------------------------------------------------------------------
PRINT NAME DATE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE OF REGISTERED PRINCIPAL OF SECURITIES CORP.
- --------------------------------------------------------------------------------
PRINT NAME DATE>
- --------------------------------------------------------------------------------
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
320 PARK AVENUE, NEW YORK, NEW YORK 10022
(800) 914-8716
EQUITY INDEX FUND BOND FUND
ALL AMERICA FUND MONEY MARKET FUND
STATEMENT OF ADDITIONAL INFORMATION
May 1, 2000
This Statement of Additional Information is not a prospectus. You should read it
in conjunction with the Mutual of America Institutional Funds, Inc. Prospectus
dated May l, 2000, and you should keep it for future use. We incorporate the
Prospectus by reference into this Statement of Additional Information.
A copy of the Prospectus to which this Statement of Additional Information
relates is available to you at no charge. To obtain the Prospectus, you may
write to Mutual of America Institutional Funds, Inc. at the above address or
call the telephone number listed above.
TABLE OF CONTENTS
Page
----
Investment Company's Form of Operations ............................... 2
Investment Strategies and Related Risks ............................... 3
Additional Permitted Investments .................................... 3
Additional Investment Strategies .................................... 5
Additional Information about Specific Types of Securities ........... 9
Fundamental Investment Restrictions ................................... 13
Management of the Investment Company .................................. 14
Investment Advisory Arrangements ...................................... 15
Administrative Agreements ............................................. 17
Portfolio Transactions and Brokerage .................................. 18
Purchase, Redemption and Pricing of Shares ............................ 19
Taxation of the Investment Company .................................... 21
Taxation of Shareholders .............................................. 21
Yield and Performance Information ..................................... 23
Description of Corporate Bond Ratings ................................. 26
Distribution of Fund Shares ........................................... 27
Legal Matters ......................................................... 27
Independent Auditors .................................................. 27
Custodian ............................................................. 27
Use of Standard & Poor's Index ........................................ 28
Financial Statements .................................................. 28
<PAGE>
INVESTMENT COMPANY'S FORM OF OPERATIONS
History and Operating Form
- --------------------------------------------------------------------------------
Mutual of America Institutional Funds, Inc. (the Investment Company) was formed
on October 27, 1994 as a Maryland corporation. It is a diversified, open-end
management investment company registered under the Investment Company Act of
1940 (the 1940 Act).
The Investment Company issues separate classes (or series) of stock, each of
which represents a separate Fund of investments. There are currently four Funds:
the Equity Index Fund, All America Fund, Bond Fund and Money Market Fund.
Offering of Shares
- --------------------------------------------------------------------------------
The Investment Company is designed primarily as an investment vehicle for
endowments, foundations, corporations, municipalities or other public entities
and other institutional investors.
Currently, the Investment Company requires a minimum initial investment of
$25,000, except that the Investment Company may waive this requirement in its
discretion. The minimum amount for additional purchases of Fund shares currently
is $5,000.
Description of Shares
- --------------------------------------------------------------------------------
The authorized capital stock of the Investment Company consists of one billion
shares of common stock, $.01 par value. The Investment Company currently has
four classes of common stock, and it may establish additional classes and
allocate its authorized shares either to new classes or to one or more of the
existing classes.
The Investment Company reserves the right to redeem, upon not less than 30 days'
written notice, all shares in a shareholder's Fund account when the aggregate
value of the shares is less than $5,000.
All shares of common stock, of whatever class, are entitled to one vote. The
votes of all classes are cast on an aggregate basis, except that if the
interests of the Funds differ, the voting is on a Fund-by-Fund basis. Examples
of matters that would require a Fund-by-Fund vote are changes in the fundamental
investment policy of a particular Fund and approval of the Investment Advisory
Agreement or a Subadvisory Agreement for the Fund.
The Investment Company is not required to hold annual meetings. It will call a
special meeting of shareholders when a meeting is requested by shareholders
holding at least 25% of the outstanding shares of the Investment Company
entitled to vote at the meeting except that a meeting to remove one or more
directors shall be called when requested by 10% of the outstanding shares of the
Investment Company entitled to vote at the meeting.
The shares of each Fund, when issued, will be fully paid and nonassessable and
will have no preference, preemptive, conversion, exchange or similar rights.
Shares do not have cumulative voting rights.
Each issued and outstanding share in a Fund is entitled to participate equally
in dividends and distributions declared by such Fund and, upon liquidation or
dissolution, in the net assets of such Fund remaining after satisfaction of
outstanding liabilities. Accrued liabilities which are not allocable to one or
more Funds will generally be allocated among the Funds in proportion to their
relative net assets. In the unlikely event that any Fund incurred liabilities in
excess of its assets, each other Fund could be liable for such excess.
2
<PAGE>
INVESTMENT STRATEGIES AND RELATED RISKS
The Prospectus describes each Fund's principal investment strategy(ies) and the
related risks. You should refer to "Summary of How Our Funds Invest" and
"Details about How Our Funds Invest and Related Risks" in the Prospectus to
learn about those strategies and risks.
Additional Permitted Investments
- --------------------------------------------------------------------------------
The Investment Company's Funds may use investment strategies and purchase types
of securities in addition to those discussed in the Prospectus.
Equity Index Fund: In addition to common stocks and futures contracts, the Fund
may invest in:
o money market instruments, and
o U.S. Government and U.S. Government agency obligations.
All America Fund -- In addition to common stocks, the Adviser and Subadviser who
manage approximately 40% of the net assets of the All America Fund (the Active
Assets) may invest assets in:
o securities convertible into common stocks, including warrants and
convertible bonds,
o bonds,
o money market instruments,
o U.S. Government and U.S. Government agency obligations,
o foreign securities and ADRs,
o futures and options contracts, and
o preferred stock.
The portion of the All America Fund invested to replicate the S&P 500 Index (the
Indexed Assets) may also be invested in:
o money market instruments, and
o U.S. Government and U.S. Government agency obligations.
The Adviser may manage cash allocated to the Active Assets prior to investment
in securities by the Subadvisers.
Bond Fund: In addition to investment grade debt securities of the type described
in the Prospectus, the Bond Fund may invest in :
o asset-backed securities,
o non-investment grade securities, for up to 20% of its assets,
o foreign securities,
o cash and money market instruments,
o stocks acquired either by conversion of fixed-income securities or by
the exercise of warrants attached to fixed income securities,
o preferred stock
o options, futures contracts and options on futures contracts on United
States Treasury securities and Government National Mortgage Association
("Ginnie Mae") securities, and
o equipment trust certificates.
3
<PAGE>
Money Market Fund: In addition to commercial paper and U.S. Treasury Bills, the
Fund may invest in any of the following kinds of money market instruments,
payable in United States dollars:
o securities issued or guaranteed by the U.S. Government or a U.S.
Government agency or instrumentality;
o negotiable certificates of deposit, bank time deposits, bankers'
acceptances and other short-term debt obligations of domestic banks and
foreign branches of domestic banks and U.S. branches of foreign banks,
which at the time of their most recent annual financial statements show
assets in excess of $5 billion;
o certificates of deposit, time deposits and other short-term debt
obligations of domestic savings and loan associations, which at the time
of their most recent annual financial statements show assets in excess
of $1 billion;
o repurchase agreements covering government securities, certificates of
deposit, commercial paper or bankers' acceptances;
o variable amount floating rate notes; and
o debt securities issued by a corporation.
The Money Market Fund may enter into transactions in options, futures contracts
and options on futures, contracts on United States Treasury securities.
Under the Money Market Fund's investment policy, money market instruments and
other short-term debt securities means securities that have a remaining term to
maturity of up to 13 months (25 months in the case of government securities).
The dollar-weighted average maturity of the securities held by the Money Market
Fund will not exceed 90 days.
The securities in the Money Market Fund must meet the following quality
requirements --
o All of the securities held by the Money Market Fund must have received
(or be of comparable quality to securities which have received), at the
time of the purchase, a rating in one of the two highest categories by
any two nationally recognized statistical rating agencies; and
o At least 95% of the securities held by the Money Market Fund must have
received (or be of comparable quality to securities which have
received), at the time of purchase, a rating in the highest category by
any two such rating agencies.
The Board of Directors of the Investment Company must approve or ratify the
purchase of any security (other than any U.S. government security) that has not
received a rating or that has been rated by only one rating agency. The Fund
will sell any securities that are subsequently downgraded below the two highest
categories as soon as practicable, unless the Board of Directors determines that
sale of those securities would not be in the best interests of the Fund.
The Money Market Fund will not invest more than 5% of its total assets in
securities of, or subject to puts from, any one issuer (other than U.S.
government securities and repurchase agreements fully collateralized by U.S.
government securities) provided that (a) the Fund may invest up to 10% of its
total assets in securities issued or guaranteed by a single issuer with respect
to which the Fund has purchased an unconditional put and (b) with respect to 25%
of its total assets the Fund may, with respect to securities meeting the highest
investment criteria, exceed the 5% limit for up to three business days.
4
<PAGE>
Additional Investment Strategies
- --------------------------------------------------------------------------------
Lending of Securities
The Funds have the authority to lend their securities, under the conditions
described below. The Funds will not lend any securities until the Investment
Company's Board of Directors approves a form of securities lending agreement.
A Fund may lend its securities, constituting up to 30% of its total assets, to
brokers, dealers and financial institutions, other than any affiliate of the
Investment Company. A Fund may pay reasonable fees to persons unaffiliated with
the Fund for services or for arranging such loans.
Upon lending securities, a Fund must receive as collateral cash, securities
issued or guaranteed by the United States Government or its agencies or
instrumentalities, or letters of credit of certain banks selected by the
Adviser. The collateral amount at all times while the loan is outstanding must
be maintained in amounts equal to at least 100% of the current market value of
the loaned securities.
The Fund will continue to receive interest or dividends on the securities lent.
In addition, it will receive a portion of the income generated by the short-term
investment of cash received as collateral, or, alternatively, where securities
or a letter of credit are used as collateral, a lending fee paid directly to the
Fund by the borrower of the securities. A Fund will have the right to terminate
a securities loan at any time. The Fund will have the right to regain record
ownership of loaned securities in order to exercise beneficial rights, such as
voting rights or subscription rights.
Loans of securities will be made only to firms that the Adviser deems
creditworthy. There are risks of delay in recovery and even loss of rights in
the collateral, however, if the borrower of securities defaults, becomes the
subject of bankruptcy proceedings or otherwise is unable to fulfill its
obligations or fails financially.
Repurchase Agreements
The Funds have the authority to enter into repurchase agreements. A Fund may not
invest more than 10% of its total assets in repurchase agreements or time
deposits that mature in more than seven days. The Funds will not enter into any
repurchase agreements until the Investment Company's Board of Directors approves
a form of Repurchase Agreement and authorizes entities as counterparties.
Under a repurchase agreement, a Fund acquires underlying debt instruments for a
relatively short period (usually not more than one week and never more than one
year) subject to an obligation of the seller to repurchase (and the Fund to
resell) the instrument at a fixed price and time, thereby determining the yield
during the Fund's holding period. This results in a fixed rate of return
insulated from market fluctuation during such period. Accrued interest on the
underlying security will not be included for purposes of valuing a Fund's
assets.
Repurchase agreements have the characteristics of loans by a Fund and will be
fully collateralized (either with physical securities or evidence of book entry
transfer to the account of the custodian bank) at all times. During the term of
the repurchase agreement, the Fund retains the security subject to the
repurchase agreement as collateral securing the seller's repurchase obligation,
continually monitors the market value of the security subject to the agreement
and requires the Fund's seller to deposit with the Fund additional collateral
equal to any amount by which the market value of the security subject to the
repurchase agreement falls below the resale amount provided under the repurchase
agreement.
The Funds will enter into repurchase agreements only with member banks of the
Federal Reserve System and with dealers in U.S. Government securities whose
creditworthiness has been reviewed and found satisfactory by the Adviser and the
Board of Directors of the Investment Company.
Securities underlying repurchase agreements will be limited to certificates of
deposit, commercial paper, bankers' acceptances, or obligations issued or
guaranteed by the United States Government or its agencies or instrumentalities,
in which the Funds may otherwise invest.
A seller of a repurchase agreement could default and not repurchase from a Fund
the security that is the subject of the agreement. The Fund would look to the
collateral underlying the seller's repurchase agreement, including the
securities subject to the repurchase agreement, for satisfaction of the seller's
obligation to the Fund. In such event, the Fund might incur disposition costs in
liquidating the collateral and might suffer a loss if the value of the
collateral declines. There is a risk that if the issuer of the repurchase
agreement becomes involved
5
<PAGE>
in bankruptcy proceedings, the Fund might be delayed or prevented from
liquidating the underlying security or otherwise obtaining it for its own
purposes, if the Fund did not have actual or book entry possession of the
security.
Rule 144a Investments, Section 4(2) Commercial Paper and Illiquid Securities
Each Fund, with respect to not more than 10% of its total assets, may purchase
securities that are not readily marketable, or are "illiquid". Repurchase
agreements of more than seven days' duration and variable and floating rate
demand notes not requiring receipt of the principal note amount within seven
days' notice are considered illiquid. A Fund may incur higher transaction costs
and require more time to complete transactions for the purchase and sale of
illiquid securities than for readily marketable securities. When a Fund
determines to sell an illiquid security within a relatively short time period,
it may have to accept a lower sales price than if the security were readily
marketable.
The Adviser will make a factual determination as to whether securities with
contractual or legal restrictions on resale purchased by a Fund are liquid,
based on the frequency of trades and quotes, the number of dealers and potential
purchasers, dealer undertakings to make a market, and the nature of the security
and the marketplace, pursuant to procedures adopted by the Board of Directors of
the Investment Company.
Securities that are eligible for purchase and sale under Rule 144A of the
Securities Act of 1933 (the 1933 Act) shall be considered liquid, provided the
Adviser has not made a contrary determination regarding liquidity in accordance
with the Board's procedures. Rule 144A permits certain qualified institutional
buyers to trade in securities even though the securities are not registered
under the 1933 Act. In addition, commercial paper privately placed in accordance
with Section 4(2) of the 1933 Act also will be considered liquid, provided the
requirements set forth in the Board's procedures are satisfied.
Options and Futures Contracts
Each of the Funds may purchase and sell options and futures contracts, as
described below, as long as the contracts are traded on a domestic exchange.
Each Fund may sell a call option contract on a security it holds in its
portfolio (called a covered call), and it may buy a call option contract on the
security to close out a position created by the sale of a covered call.
o A call option is a short-term contract (generally having a duration of
nine months or less) which gives the purchaser of the option the right
to purchase the underlying security at a fixed exercise price at any
time prior to the expiration of the option regardless of the market
price of the security during the option period. As consideration for
writing a covered call option, a Fund (the seller) receives from the
purchaser a premium, which the Fund retains whether or not the option is
exercised.
o The seller of the call option has the obligation, upon the exercise of
the option by the purchaser, to sell the underlying security at the
exercise price at any time during the option period. The selling of a
call option will benefit a Fund if, over the option period, the
underlying security declines in value or does not appreciate above the
aggregate of the exercise price and the premium. However, the Fund risks
an "opportunity loss" of profits if the underlying security appreciates
above the aggregate value of the exercise price and the premium.
Each Fund may buy a put option contract on a security it holds in its portfolio,
and it may sell a put option contract on the security to close out a position
created by the purchase of the put option contract.
o A put option is a similar short-term contract that gives the purchaser
of the option the right to sell the underlying security at a fixed
exercise price at any time prior to the expiration of the option
regardless of the market price of the security during the option period.
As consideration for the put option, a Fund (the purchaser) pays the
seller a premium, which the seller retains whether or not the option is
exercised. The seller of the put option has the obligation, upon the
exercise of the option by the purchaser, to purchase the underlying
security at the exercise price at any time during the option period. The
buying of a covered put contract limits the downside exposure for the
investment in the underlying security to the combination of the exercise
price less the premium paid.
o The risk of purchasing a put is that the market price of the underlying
stock prevailing on the expiration date may be above the option's
exercise price. In that case the option would expire worthless and the
entire premium would be lost.
6
<PAGE>
Each Fund may purchase and sell futures contracts, and purchase options on
futures contracts, on fixed-income securities or on an index of securities, such
as the Standard & Poor's 100 Index, the Standard & Poor's 500 Index or the New
York Stock Exchange Composite Index.
o A futures contract on fixed income securities requires the seller to
deliver, and the purchaser to accept delivery of, a stated quantity of a
given type of fixed income security for a fixed price at a specified
time in the future. A futures contract or option on a stock index
provides for the making and acceptance of a cash settlement equal to the
change in value of a hypothetical portfolio of stocks between the time
the contract is entered into and the time it is liquidated, times a
fixed multiplier. Futures contracts may be traded domestically only on
exchanges which have been designated as "contract markets" by the
Commodity Futures Trading Commission, such as the Chicago Board of
Trade.
o An option on a futures contract provides the purchaser with the right,
but not the obligation, to enter into a "long" position in the
underlying futures contract (in the case of a call option on a futures
contract), or a "short" position in the underlying futures contract (in
the case of a put option on a futures contract), at a fixed price up to
a stated expiration date. Upon exercise of the option by the holder, the
contract market clearing house establishes a corresponding short
position for the writer of the option, in the case of a call option, or
a corresponding long position in the case of a put option. In the event
that an option is exercised, the parties are subject to all of the risks
associated with the trading of futures contracts, such as payment of
margin deposits.
o A Fund does not pay or receive a payment upon its purchase or sale of a
futures contract. Initially, a Fund will be required to deposit with the
Fund's custodian in the broker's name an amount of cash or U.S. Treasury
bills equal to approximately 5% of the contract amount. This amount is
known as "initial margin."
o While a futures contract is outstanding, there will be subsequent
payments, called "maintenance margin", to and from the broker. These
payments will be made on a daily or intraday basis as the price of the
underlying instrument or stock index fluctuates making, the long and
short positions in the futures contract more or less valuable. This
process is known as "mark to market." At any time prior to expiration of
the futures contract, a Fund may elect to close the position by taking
an opposite position, which will operate to terminate the Fund's
position in the futures contract and may require additional transaction
costs. A final determination of margin is then made, additional cash is
required to be paid by or released to the Fund, and the Fund realizes a
loss or a gain.
A Fund may use futures contracts to protect against general increases or
decreases in the levels of securities prices, in the manner described below.
o When a Fund anticipates a general decrease in the market value of
portfolio securities, it may sell futures contracts. If the market value
falls, the decline in the Fund's net asset value may be offset, in whole
or in part, by corresponding gains on the futures position.
o A Fund may sell futures contracts on fixed-income securities in
anticipation of a rise in interest rates, that would cause a decline
in the value of fixed-income securities held in the Fund's portfolio.
o A Fund may sell stock index futures contracts in anticipation of a
general market wide decline that would reduce the value of its
portfolio of stocks.
o When a Fund projects an increase in the cost of fixed-income securities
or stocks to be acquired in the future, the Fund may purchase futures
contracts on fixed-income securities or stock indexes. If the hedging
transaction is successful, the increased cost of securities subsequently
acquired may be offset, in whole or in part, by gains on the futures
position.
o Instead of purchasing or selling futures contracts, a Fund may purchase
call or put options on futures contracts in order to protect against
declines in the value of portfolio securities or against increases in
the cost of securities to be acquired.
o Purchases of options on futures contracts may present less risk in
hedging a portfolio than the purchase and sale of the underlying
futures contracts, since the potential loss is limited to the amount
of the premium paid for the option, plus related transaction costs.
7
<PAGE>
o As in the case of purchases and sales of futures contracts, a Fund
may be able to offset declines in the value of portfolio securities,
or increases in the cost of securities acquired, through gains
realized on its purchases of options on futures.
o The Funds also may purchase put options on securities or stock indexes
for the same types of securities for hedging purposes. The purchase of a
put option on a security or stock index permits a Fund to protect
against declines in the value of the underlying security or securities
in a manner similar to the sale of futures contracts.
o In addition, the Funds may write call options on portfolio securities or
on stock indexes for the purpose of increasing their returns and/or to
protect the value of their portfolios.
o When a Fund writes an option which expires unexercised or is closed
out by the Fund at a profit, it will retain the premium paid for the
option, less related transaction costs, which will increase its gross
income and will offset in part the reduced value of a portfolio
security in connection with which the option may have been written.
o If the price of the security underlying the option moves adversely to
the Fund's position, the option may be exercised and the Fund will be
required to sell the security at a disadvantageous price, resulting
in losses which may be only partially offset by the amount of the
premium.
o A call option on a security written by a Fund will be covered through
ownership of the security underlying the option or through ownership
of an absolute and immediate right to acquire such security upon
conversion or exchange of other securities held in its portfolio.
Risks in futures and options transactions include the following:
o There may be a lack of liquidity, which could make it difficult or
impossible for a Fund to close out existing positions and realize gains
or limit losses.
The liquidity of a secondary market in futures contracts or options on
futures contracts may be adversely affected by "daily price fluctuation
limits," established by the exchanges on which such instruments are
traded, which limit the amount of fluctuation in the price of a contract
during a single trading day. Once the limit in a particular contract has
been reached, no further trading in such contract may occur beyond such
limit, thus preventing the liquidation of positions, and requiring
traders to make additional variation margin payments. Market liquidity
in options, futures contracts or options on futures contracts may also
be adversely affected by trading halts, suspensions, exchange or
clearing house equipment failures, government intervention, insolvency
of a brokerage firm or clearing house or other disruptions of normal
trading activity.
o The securities held in a Fund's portfolios may not exactly duplicate the
security or securities underlying the options, futures contracts or
options on futures contracts traded by the Fund, and as a result the
price of the portfolio securities being hedged will not move in the same
amount or direction as the underlying index, securities or debt
obligation.
o A Fund purchasing an option may lose the entire amount of the premium
plus related transaction costs.
o For options on futures contracts, changes in the value of the underlying
futures contract may not be fully reflected in the value of the option.
o With respect to options and options on futures contracts, the Funds are
subject to the risk of market movements between the time that the option
is exercised and the time of performance thereunder.
o In writing a covered call option on a security or a stock index, a Fund
may incur the risk that changes in the value of the instruments used to
cover the position will not correlate precisely with changes in the
value of the option or underlying the index or instrument.
o The opening of a futures position and the writing of an option are
transactions that involve substantial leverage. As a result, relatively
small movements in the price of the contract can result in substantial
unrealized gains or losses.
8
<PAGE>
Additional Information about Specific Types Of Securities
- --------------------------------------------------------------------------------
Non-Investment Grade Securities
The Bond Fund may purchase non-investment grade debt securities. In addition,
the Bond Fund and the other Funds that purchase debt securities may hold a
security that becomes non-investment grade as a result of impairments of the
issuer's credit.
Fixed-income securities that are rated in the lower rating categories of the
nationally recognized rating services (Ba or lower by Moody's and BB or lower by
Standard & Poor's), or unrated securities of comparable quality, are commonly
known as non-investment grade securities or "junk bonds". Junk bonds are
regarded as being predominantly speculative as to the issuer's ability to make
payments of principal and interest. Investment in non-investment grade
securities involves substantial risk. Junk bonds may be issued by less
creditworthy companies or by larger, highly leveraged companies, and are
frequently issued in corporate restructurings, such as mergers and leveraged
buy-outs. Such securities are particularly vulnerable to adverse changes in the
issuer's industry and in general economic conditions. Junk bonds frequently are
junior obligations of their issuers, so that in the event of the issuer's
bankruptcy, claims of the holders of junk bonds will be satisfied only after
satisfaction of the claims of senior security holders.
Non-investment grade bonds tend to be more volatile than higher-rated
fixed-income securities, so that adverse economic events may have a greater
impact on the prices of junk bonds than on higher-rated fixed-income securities.
Junk bonds generally are purchased and sold through dealers who make a market in
such securities for their own accounts. However, there are fewer dealers in the
non-investment grade bond market, and the market may be less liquid than the
market for higher-rated fixed-income securities, even under normal economic
conditions. Also, there may be significant disparities in the prices quoted for
junk bonds by various dealers. Adverse economic conditions or investor
perceptions (whether or not based on economic fundamentals) may impair the
liquidity of this market, and may cause the prices that a Fund may receive for
any non-investment grade bonds to be reduced, or might cause a Fund to
experience difficulty in liquidating a portion of its portfolio.
The Investment Company currently anticipates than no Fund will invest more than
5% of its total assets in non-investment grade debt securities.
U.S. Government and U.S. Government Agency Obligations
All of the Funds may invest in U.S. Government and U.S. Government agency
obligations. Some of these securities also may be considered money market
instruments. Some also may be mortgage-backed securities or zero coupon
securities.
U.S. Government Obligations: These securities are issued or guaranteed as to
principal and interest by the United States Government. They include a variety
of Treasury securities, which differ only in their interest rates, maturities
and times of issuance. Treasury bills have a maturity of one year or less.
Treasury notes at the time of issuance have maturities of one to seven years and
Treasury bonds generally have a maturity of greater than five years.
U.S. Government Agency Obligations: Agencies of the United States Government
that issue or guarantee obligations include, among others, Export-Import Bank of
the United States, Farmers Home Administration, Federal Housing Administration,
Government National Mortgage Association, Student Loan Marketing Association,
Maritime Administration, Small Business Administration and the Tennessee Valley
Authority. Instrumentalities of the United States Government that issue or
guarantee obligations include, among others, Federal Farm Credit Banks, Federal
National Mortgage Association, Federal Home Loan Banks, Federal Home Loan
Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land Banks and
Banks for Cooperatives.
Some of the securities issued by U.S. Government agencies and instrumentalities
are supported by the full faith and credit of the U.S. Treasury; others are
supported by the right of the issuer to borrow from the Treasury, while others
are supported only by the credit of the instrumentality that issued the
obligation.
Money Market Instruments
All of the Funds may purchase money market instruments, which include the
following.
Certificates of Deposit. Certificates of deposit are generally short term,
interest-bearing negotiable certificates issued by banks or savings and loan
associations against funds deposited in the issuing institution.
9
<PAGE>
Time Deposits. Time deposits are deposits in a bank or other financial
institution for a specified period of time at fixed interest rate, for which no
negotiable certificate is received.
Bankers' Acceptance. A bankers' acceptance is a draft drawn on a commercial bank
by a borrower usually in connection with an international commercial transaction
(to finance the import, export, transfer or storage of goods). The borrower is
liable for payment as well as the bank, which unconditionally guarantees to pay
the draft at its face amount on the maturity date. Most acceptances have
maturities of six months or less and are traded in secondary markets prior to
maturity.
Commercial Paper. Commercial paper refers to short-term, unsecured promissory
notes issued by corporations to finance short-term credit needs. Commercial
paper is usually sold on a discount basis and has a maturity at the time of
issuance not exceeding nine months.
Variable Amount Floating Rate Notes. Variable floating rate notes are
short-term, unsecured promissory notes issued by corporations to finance
short-term credit needs. These are interest-bearing notes on which the interest
rate generally fluctuates on a weekly basis.
Corporate Debt Securities. Corporate debt securities with a remaining maturity
of less than one year tend to become extremely liquid and are traded as money
market securities.
Treasury Bills. See "U.S. Government and U.S. Government Agency Obligations"
above.
Because the Money Market Fund and the other Funds generally will purchase only
money market instruments that are rated high quality and have short terms to
maturity, these money market instruments are considered to have low levels of
market risk and credit risk.
Zero Coupon Securities And Discount Notes; Redeemable Securities
The Bond Fund, and the All America Fund to the extent it invests in fixed income
securities, may invest in discount notes and zero coupon securities. Discount
notes mature in one year or less from the date of issuance. Zero coupon
securities may be issued by corporations or by certain U.S. Government agencies.
Discount notes and zero coupon securities do not pay interest. Instead, they are
issued at prices that are discounted from the principal (par) amount due at
maturity. The difference between the issue price and the principal amount due at
maturity (or the amount due at the expected redemption date in some cases if the
securities are callable) is called "original issue discount". A Fund must accrue
original issue discount as income, even if the Fund does not actually receive
any payment under the security during the accrual period. The purchase price
paid for zero coupon securities at the time of issuance, or upon any subsequent
resale, reflects a yield-to-maturity required by the purchaser from the purchase
date to the maturity date (or expected redemption date).
Foreign Securities
In addition to investing in domestic securities, each of the Funds other than
the Equity Index Fund and the Money Market Fund, may invest in securities of
foreign issuers, including securities traded outside the United States. Foreign
issues guaranteed by domestic corporations are considered to be domestic
securities.
The Investment Company has a fundamental investment restriction that limits
foreign securities, including foreign exchange transactions, to 20% of a Fund's
total assets. (See "Fundamental Investment Restrictions", paragraph 2.) The
Investment Company currently anticipates that no Fund will invest more than 10%
of its total assets in foreign securities or foreign exchange transactions.
The Investment Company will consider special factors before investing in foreign
securities. These include:
o changes in currency rates or currency exchange control regulations,
o the possibility of expropriation,
o the unavailability of financial information or the difficulty of
interpreting financial information prepared under foreign accounting
standards,
o less liquidity and more volatility in foreign securities markets,
o the impact of political, social or diplomatic developments, and
o the difficulty of assessing economic trends in foreign countries.
The Funds could encounter greater difficulties in bringing legal processes
abroad than would be encountered in the United States. In addition, transaction
costs in foreign securities may be higher.
10
<PAGE>
American Depositary Receipts
ADRs are dollar-denominated receipts issued generally by domestic banks and
representing the deposit with the bank of a security of a foreign issuer. ADRs
are publicly traded on exchanges or over-the-counter in the United States. ADRs
are not considered foreign securities for purposes of the restriction on the
amount of foreign securities.
The Investment Company will consider special factors before investing in ADRs:
These include:
o changes in currency rates or currency exchange control regulations,
o the possibility of expropriation,
o the unavailability of financial information or the difficulty of
interpreting financial information prepared under foreign accounting
standards,
o the impact of political, social or diplomatic developments, and
o the difficulty of assessing economic trends in foreign countries.
Convertible Securities
The Bond Fund may invest in convertible debt securities. Convertible securities
can be converted by the holder into common stock of the issuer, at the price and
on the terms set forth by the issuer when the convertible securities are
initially sold. Convertible securities normally provide a higher yield than the
underlying stock but a lower yield than a fixed-income security without the
convertibility feature. The price of the convertible security normally will vary
to some degree with changes in the price of the underlying stock, although the
higher yield tends to make the convertible security less volatile than the
underlying common stock. The price of the convertible security also will vary to
some degree inversely with interest rates.
Equipment Trust Certificates
The Bond Fund may invest in equipment trust certificates. The proceeds of those
certificates are used to purchase equipment, such as railroad cars, airplanes or
other equipment, which in turn serve as collateral for the related issue of
certificates.
The equipment subject to a trust generally is leased by a railroad, airline or
other business, and rental payments provide the projected cash flow for the
repayment of the equipment trust certificates. Holders of equipment trust
certificates must look to the collateral securing the certificates, and any
guarantee provided by the lessee or any parent corporation for the payment of
lease amounts, in the case of default in the payment of principal and interest
on the certificates.
The Investment Company currently anticipates that no Fund will invest more than
5% of its total assets in equipment trust certificates.
Asset-Backed Securities
The Bond Fund may invest in securities backed by consumer or credit card loans
or other receivables or may purchase interests in pools of such assets.
Changes in interest rates may significantly affect the value of these
securities, and prepayment rates will impact the yield and price of the
securities. A decline in interest rates may result in increases in prepayment,
and a Fund will have to invest prepayment proceeds at the prevailing lower
interest rates. Asset-backed securities generally are not expected to prepay to
the same extent as mortgage-backed securities in such circumstances. An increase
in interest rates may result in prepayment at a rate slower than was assumed
when the security was purchased. The creditworthiness of an issuer of
asset-backed securities also may impact the value of they securities.
The Investment Company currently anticipates that no Fund will:
o invest more than 10% of its total assets in asset-backed securities,
o invest in interest-only strips or principal-only strips of asset-backed
securities, or
o purchase the most speculative series or class of asset-backed securities
issues.
11
<PAGE>
Mortgage-Backed Securities
The Bond Fund may invest in mortgage-backed securities. You should refer to the
discussion of Mortgage-Backed Securities in the Prospectus under "Details about
How Our Funds Invest and Related Risks -- Specific Investments or Strategies and
Related Risks".
The Investment Company currently anticipates that no Fund will:
o invest more than 10% of its total assets in mortgage-backed securities
that are not also considered to be U.S. Government or U.S. Government
agency securities,
o invest in interest-only strips or principal-only strips of
mortgage-backed securities, or
o purchase the most speculative class or series of collateralized mortgage
obligation issues or other mortgage-backed securities issues.
Warrants
The All America Fund and Bond Fund may acquire warrants. A warrant is an option
to purchase common stock of an issuer and is issued in conjunction with another
security, such as a debt obligation. A warrant specifies the price at which the
holder may purchase shares of common stock and usually expires after a period of
time. A warrantholder generally may pay cash for the common stock to be
purchased or may surrender principal amount of the related debt security the
warrantholder owns equal to the purchase price for the stock.
The common stock underlying a warrant may not increase in value after the date
the warrant was issued, or may not increase up to the warrant exercise price. In
this case, the warrant generally would have little value and could expire
unexercised.
The Investment Company currently anticipates that no Fund will invest more than
5% of its assets in warrants.
Preferred Stock
The All America Fund and Bond Fund may purchase preferred stock. A corporation
may issue a form of equity security called preferred stock. Compared to common
stock, preferred stock has advantages in the receipt of dividends and in the
receipt of the corporation's assets upon liquidation. Preferred stockholders,
however, usually do not have voting rights at meetings of the corporation's
shareholders.
An issuer of preferred stock must pay a dividend to holders of preferred stock
before it distributes a dividend to holders of common stock. When a corporation
issues preferred stock, it sets a dividend rate, or a formula to determine the
rate. If a corporation does not have sufficient earnings to pay the specified
dividend to preferred stockholders, the unpaid dividend may accrue (cumulate)
and become payable when the corporation's earnings increase. Bondholders, in
contrast, are entitled to receive interest and principal due, regardless of the
issuer's earnings.
Some issues of preferred stock give the holder the right to convert the
preferred stock into shares of common stock, when certain conditions are met. A
holder of preferred stock that is not convertible, or of preferred stock that is
convertible but has not met the conditions for conversion, does not share in the
earnings of the issuer other than through the receipt of dividends on the
preferred stock. The market value of convertible preferred stock generally
fluctuates more than the market value of nonconvertible preferred stock, because
the value of the underlying common stock will affect the price of the
convertible stock.
Preferred stock has the risk that a corporation may not have earnings from which
to pay the dividends as they become due. Even if a corporation is paying
dividends, if the dividend rate is fixed (and not variable), changes in interest
rates generally will affect the market value of the preferred stock in the same
manner as for debt obligations.
The Investment Company presently anticipates that no Fund will invest more than
10% of its assets in preferred stock.
12
<PAGE>
FUNDAMENTAL INVESTMENT RESTRICTIONS
The following investment restrictions are fundamental policies and may not be
changed without the approval of a majority of the outstanding voting shares of
the affected Fund. No Fund will:
1. purchase or sell options or futures except those listed on a domestic
exchange;
2 trade in foreign exchange, or invest in securities of foreign issuers if at
the time of acquisition more than 20% of its total assets, taken at market
value at the time of the investment, would be invested in such securities;
3. make an investment in order to exercise control of management over a
company (either singly or together with any other Fund);
4. underwrite the securities of other companies;
5. make short sales, except when the Fund has, by reason of ownership of other
securities, the right to obtain securities of equivalent kind and amount
that will be held so long as they are in a short position;
6. purchase commodities or commodity contracts, except to the extent described
in the Prospectus and herein with respect to futures and related options;
7. with respect to at least 75% of the value of its total assets, invest more
than 5% of its total assets in the securities of any one issuer (including
repurchase agreements with any one institution), other than securities
issued or guaranteed by the United States Government or its agencies or
instrumentalities;
8. with respect to at least 75% of the value of its total assets, purchase
more than 10% of the outstanding voting securities of an issuer, except
that such restriction shall not apply to securities issued or guaranteed by
the United States Government or its agencies or instrumentalities;
9. issue senior securities, except that each Fund may borrow as described in
restriction 13 below (the issuance and sale of options and futures not
being considered the issuance of senior securities) and except as permitted
by the rules and regulations of the Investment Company Act or an exemption
thereunder and with any required approval of the shareholders of the
Investment Company;
10. make an investment in an industry if that investment would make the Fund's
holding in that industry exceed 25% of the Fund's total assets, except that
this policy does not apply to obligations issued or guaranteed by the U.S.
Government or its agencies or instrumentalities;
11. purchase real estate or mortgages directly, except that the All America
Fund may buy shares of real estate investment trusts listed on stock
exchanges or reported on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") system, and the Bond Fund may buy
mortgage-backed debt issues;
12. purchase any securities issued by any other investment company except as
permitted under the Investment Company Act and in accordance with
applicable state law;
13. purchase any security on margin, except for short-term credit necessary for
clearance of portfolio transactions or in connection with permitted options
and futures contracts, or borrow money, except from banks for temporary
purposes, or pledge its assets unless to secure such borrowing. The Funds
may borrow money from or pledge their assets to banks in order to transfer
funds for various purposes, as required, without interfering with the
orderly liquidation of securities in their portfolios, but not for
leveraging purposes. Such borrowings may not exceed 5% of the value of a
Fund's total assets at market value;
14. make loans, except loans of portfolio securities (not exceeding 30% of the
value of its total assets at market value) or loans through entry into
repurchase agreements (the purchase of publicly traded debt obligations not
being considered the making of a loan);
15. invest more than 10% of its total assets in repurchase agreements or time
deposits maturing in more than seven days or in portfolio securities not
readily marketable; or
16. purchase oil, gas or mineral interests, except that the Funds may purchase
securities of issuers that invest in oil, gas or mineral interests.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values of portfolio securities or amount of net assets will not be
considered a violation.
13
<PAGE>
MANAGEMENT OF THE INVESTMENT COMPANY
The Directors of the Investment Company consist of five individuals, four of
whom are not "interested persons" of the Investment Company as defined in the
Investment Company Act of 1940. The Directors of the Investment Company are
responsible for the overall supervision of the operations of the Investment
Company and perform the various duties imposed on the directors of investment
companies by the Investment Company Act of 1940. The Board of Directors elects
officers of the Investment Company annually.
The Directors and Officers of the Investment Company and their principal
employment are as follows:
<TABLE>
<CAPTION>
Position Held With Principal Occupations
Name, Address And Age Investment Company During Past Five Years
- --------------------- ------------------ ----------------------
<S> <C> <C>
Kevin M. Kearney, age 47 Director Partner, Wingate, Kearney & Cullen Brooklyn, NY
(law firm).
Dolores J. Morrissey*, age 71 Chairman of the President and Chief Executive Officer of
320 Park Avenue Board, President and Mutual of America Securities Corporation
New York, NY 10022 Director ("Distributor") since August 1996;
Executive Vice President and Assistant to the
President of the Adviser from March 1996 to December
1996; prior thereto, President and Chief Executive
Officer of the Adviser.
John T. Sharkey, age 63 Director Chairman and Chief Executive Officer, Kane,
New York, NY Saunders & Smart; prior thereto,
Vice President -- Corporate National
Accounts, MCI Communications.
John R. Silber, age 73 Director Chancellor, Boston University.
Boston, MA
Stanley Shmishkiss, age 80 Director Shmishkiss Associates; Chairman Emeritus
Lynn, MA of the Board of Trustees of the American
Cancer Society Foundation.
Patrick J. Waide, Jr., age 61 Director Past President, The Drucker Foundation;
New York, New York Chief Operating Officer, Sullivan & Company,
New York, New York from September 1996
to December 1998; prior thereto, Executive
Vice President and Chief Financial Officer of the
Bessemer Group, Inc., and Senior Vice
President and Chief Financial Officer of
Bessemer Securities.
Manfred Altstadt, age 50 Senior Executive Vice Senior Executive Vice President and Chief
320 Park Avenue President and Financial Officer, Mutual of America Life New
York, NY 10022 Treasurer and American Life.
Patrick A. Burns, age 53 Senior Executive Vice Senior Executive Vice President and
320 Park Avenue President, General Counsel General Counsel of the Adviser,
New York, NY 10022 Mutual of America Life and American Life.
John Greed, age 40 Executive Vice President Executive Vice President and Treasurer,
320 Park Avenue and Chief Financial Officer Mutual of America Life and American Life
New York, NY 10022 since May 1997; Senior Vice President and
Deputy Treasurer from July 1996 to May 1997; prior
thereto, Partner, Arthur Andersen, LLP.
Stanley M. Lenkowicz, age 57 Senior Vice President, Senior Vice President and Deputy General
320 Park Avenue Deputy General Counsel, Mutual of America.
New York, NY 10022 Counsel and Secretary
</TABLE>
- --------------
* Ms. Morrissey is an "interested person" within the meaning of the Investment
Company Act.
14
<PAGE>
The officers and directors of the Investment Company own none of its outstanding
shares (as individuals they are not eligible to purchase Fund shares). The
Investment Company has no Audit Committee, and the entire Board of Directors
fulfills the obligations that an Audit Committee would have.
Set forth below is a table showing compensation paid to the directors during
1998.
<TABLE>
<CAPTION>
Aggregate Pension or Total Compensation from
Compensation from Retirement Benefits Estimated Investment Company and
Investment Accrued as Part of Benefits Other Investment
Name of Director Company Fund Expenses Upon Retirement Companies in Complex(3)
- ---------------- ----------------- ------------------- --------------- -----------------------
<S> <C> <C> <C> <C>
Kevin M. Kearney ............. $14,198(2) None None $14,198(2)
Dolores J. Morrissey ......... None(1) None None None(1)
John T. Sharkey .............. $14,824(2) None None $14,824(2)
Stanley Shmishkiss ........... $16,619(2) None None $16,619(2)
John R. Silber ............... $16,619(2) None None $16,619(2)
Patrick J. Waide, Jr. ........ $14,824(2) None None $14,824(2)
</TABLE>
- ----------
(1) As an employee of an affiliate of the Adviser and an "interested person" of
the Investment Company, Ms. Morrissey serves as director of the Investment
Company and of Mutual of America Investment Corporation without
compensation.
(2) Directors who are not "interested persons" of the Investment Company
received from the Investment Company an annual retainer of $10,000 and a
fee of $1,000 for each Board or Committee meeting attended in 1999 and will
receive an annual retainer of $16,000 and fee of $1,500 for each Board or
committee meeting they attend in 2000. In addition, they receive business
travel and accident insurance and life insurance coverage of $75,000.
(3) Directors who are not interested persons do not serve on the Board of any
other investment company in the same complex as the Investment Company.
At March 31, 2000, Mutual of America Life Insurance Company (Mutual of America
Life ) owned 69.5% of the All America Fund's shares, 86.7% of the Bond Fund's
shares, 4.3% of the Money Market Fund's shares and 76.2% of the Equity Index
Fund's shares. Mutual of America Life and American Life have the right to vote
their shares at any meeting of shareholders. Based on their ownership of shares
on the date of this Statement of Additional Information, Mutual of America Life
will control the outcome of voting by shareholders of the Equity Index Fund, All
America Fund, Bond Fund and all of the Funds together. The address for Mutual of
America Life and American Life, both of which are New York corporations, is 320
Park Avenue, New York, NY 10022.
INVESTMENT ADVISORY ARRANGEMENTS
Investment Adviser. The Investment Company's investment adviser is Mutual of
America Capital Management Corporation (the Adviser or Capital Management), an
indirect wholly-owned subsidiary of Mutual of America Life. The Adviser's
address is 320 Park Avenue, New York, New York 10022. The Adviser is a
registered investment adviser under the Investment Advisers Act of 1940. The
Adviser provides investment management services to the Investment Company,
Mutual of America Investment Corporation and the General Accounts of Mutual of
America Life and American Life.
The Adviser provides advisory services for the Investment Company's Funds, in
accordance with the Funds' investment policies, objectives and restrictions as
set forth in the Prospectus and this Statement of Additional Information. The
Adviser has delegated some of its advisory responsibilities for a portion of the
All America Fund to the Subadvisers named below. The Adviser's activities are
subject at all times to the supervision and approval of the Investment Company's
Board of Directors.
Under the Investment Advisory Agreement, the Adviser agrees to provide
investment management services to the Investment Company. These services
include:
o performing investment research and evaluating pertinent economic,
statistical and financial data;
o consultation with the Investment Company's Board of Directors and
furnishing to the Investment Company's Board of Directors
recommendations with respect to the overall investment plan;
o implementation of the overall investment plan, including carrying out
decisions to acquire or dispose of investments;
15
<PAGE>
o management of investments;
o reporting to the Investment Company's Board of Directors on a regular
basis on the implementation of the investment plan and the management of
investments;
o maintaining all required records;
o making arrangements for the safekeeping of assets; and
o providing office space facilities, equipment, material and personnel
necessary to fulfill its obligations.
The Adviser is responsible for all expenses incurred in performing the
investment advisory services, including compensation of officers and payment of
office expenses, and for providing investment management services.
Advisory Fees. As compensation for its services to each of the Funds of the
Investment Company, the Funds pay the Adviser a fee at the following annual
rates of net assets, calculated as a daily charge:
Equity Index Fund -- .125%
All America Fund -- .50%
Bond Fund -- .45%
Money Market Fund -- .20%
Investment Advisory Fees Paid by Funds to Adviser*
- -----------------------------------------------------------------------------
Fund 1999 1998 1997
=============================================================================
Equity Index* $ 21,648 N/A N/A
- -----------------------------------------------------------------------------
All America $318,029 $311,258 $291,620
- -----------------------------------------------------------------------------
Bond $121,448 $106,164 $ 94,370
- -----------------------------------------------------------------------------
Money Market $ 33,028 $ 8,216 $ 3,930
- -----------------------------------------------------------------------------
Total Fees $494,153 $425,638 $389,920
- -----------------------------------------------------------------------------
- -----------
* The Equity Index Fund began operations on May 3, 1999.
Other Fund Expenses. Each Fund is responsible for paying its advisory fee and
other expenses incurred in its operation, including:
o brokers' commissions, transfer taxes and other fees relating to the
Fund's portfolio transactions,
o directors' fees and expenses,
o fees and expenses of its independent certified public accountants
o fees and expenses of its legal counsel,
o the cost of the printing and mailing semi-annual reports to
shareholders, Proxy Statements, Prospectuses, Prospectus Supplements and
Statements of Additional Information,
o the cost of preparation and filing registration statements and
amendments thereto,
o bank transaction charges and custodian's fees,
o any proxy solicitors' fees and expenses,
o SEC filing fees,
o any federal, state or local income or other taxes,
o any membership or licensing fees of the Investment Company Institute and
similar organizations,
o fidelity bond and directors' liability insurance premiums, and
o any extraordinary expenses, such as indemnification payments or damages
awarded in litigation or settlements made.
16
<PAGE>
Expense Reimbursements by the Adviser. The Adviser limits the expenses of each
Fund, other than for brokers' commissions, transfer taxes and other fees
relating to portfolio transactions and extraordinary expenses, to an annual rate
of .85% of the value of net assets of the All America Fund, .70% of the value of
net assets of the Bond Fund, .40% of the value of the net assets of the Money
Market Fund and .325% of the value of the net assets of the Equity Index Fund.
This expense limitation obligation of the Adviser is contractual for 2000 and
will renew each year thereafter unless the Adviser notifies the Investment
Company of its termination at least two weeks prior to the new year. The Adviser
has voluntarily limited the Funds' expenses since the inception of each Fund to
the amounts that are now the contractual limits, and the Adviser could
discontinue any voluntary reimbursement obligation at any time.
Subadvisers For Portion of the All America Fund. For approximately 20% of the
assets of the All America Fund (the Active Assets), the Adviser has entered into
Subadvisory Agreements with Fred Alger Management, Inc. (Alger Management) and
Oak Associates, Ltd. (Oak Associates) (each a Subadviser, and together the
Subadvisers). Each Subadviser is registered as an investment adviser under the
Investment Advisers Act of 1940.
Each of the Subadvisers for its portion of the All America Fund provides
investment advisory services, including research, making recommendations and
regular reports to the Board of Directors of the Investment Company, maintenance
of records, and providing all the office space, facilities, equipment, material
and personnel necessary to fulfill its obligations under the Subadvisory
Agreement. The Subadvisers are subject to the supervision of the Adviser and the
Board of Directors of the Investment Company.
Subadvisory Fees. The Adviser, not the Investment Company, pays the Subadvisers
for advisory services they provide to the portion of the All America Fund they
manage at the following annual rates of net assets, calculated as a daily
charge:
o Fred Alger Management -- .45%
o Oak Associates -- .30%
Fees Paid by Adviser to Subadvisers
For Past Three Years
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Subadviser 1999 1998 1997
===============================================================================================================
<S> <C> <C> <C>
Fred Alger Management, Inc. $25,923 $25,762 $23,984
- ---------------------------------------------------------------------------------------------------------------
Oak Associates, Ltd. $19,346 $18,433 $17,285
- ---------------------------------------------------------------------------------------------------------------
Palley-Needelman Asset Management, Inc.* $17,147 $17,917 $17,131
- ---------------------------------------------------------------------------------------------------------------
Total $62,416 $62,112 $58,400
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------
* A Subadviser until February 1, 2000
Codes of Ethics. The Investment Company, the Adviser, the Subadvisers and the
Securities Corporation have adopted codes of ethics under Rule 17j-1 of the 1940
Act. Persons subject to these codes may not purchase securities in which the
Funds may invest unless their purchases have been precleared in accordance with
the codes and do not occur not within certain black-out periods imposed under
the codes.
ADMINISTRATIVE AGREEMENTS
Accounting and Recordkeeping Agent
The Adviser serves as accounting and recordkeeping agent for the Funds. Under
its Investment Accounting Agreement with the Investment Company, the Adviser
performs accounting and recordkeeping functions related to portfolio
transactions as required by the Investment Company Act, provides the Investment
Company with accounting and related reports on a periodic basis, and calculates
the net asset value of each Fund in the manner described in the Prospectus.
As compensation for its services, the Adviser receives from each Fund a monthly
base fee of $500 plus a monthly minimum fee of $2,000, or if an asset-based fee
of .0225% of the Investment Company net assets would result in a fee greater
than the aggregate of the Fund minimums, the Fund's proportion of the
asset-based fee, and is reimbursed for out-of-pocket expenses it incurs in
performing its services to the Investment Company. The Adviser has entered into
an arrangement with Mutual of America for the provision of investment accounting
and recordkeeping, legal and certain other services in connection with the
Investment Company.
17
<PAGE>
Transfer Agent
State Street Bank and Trust Company (State Street) serves as transfer agent and
dividend disbursing agent for Fund shares. Under its Transfer Agency and Service
Agreement with the Investment Company, State Street is obligated to maintain
shareholder accounts to reflect purchases and redemptions of Fund shares;
prepare and transmit payments for dividends and distributions declared by the
Investment Company; mail proxy materials, shareholder reports and prospectuses
to current shareholders; and prepare and mail account and confirmation
statements for shareholders. State Street's address is P.O. Box 1978, Boston,
Massachusetts 02105, Attn: Mutual Fund Services.
For its services, State Street receives from each Fund a monthly maintenance fee
based on the number of holders of Fund shares, ranging from a minimum of $1,000
per month for 0-15 shareholders to $2,500 per month for 51-200 shareholders, and
a trade processing fee for each trade and is reimbursed for out-of-pocket
expenses.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Selection of Brokers and Dealers
- --------------------------------------------------------------------------------
The Adviser and each Subadviser are responsible for decisions to buy and sell
securities for the Funds of the Investment Company for which they provide
services as well as for selecting brokers and, where applicable, negotiating the
amount of the commission rate paid.
o The Adviser and Subadvisers select broker-dealers which, in their best
judgment, provide prompt and reliable execution at favorable security
prices and reasonable commission rates.
o They may select broker-dealers which provide them with research services
and may cause a Fund to pay such broker-dealers commissions which exceed
those other broker-dealers may have charged, if in their view the
commissions are reasonable in relation to the value of the brokerage
and/or research services provided by the broker-dealer.
o When purchasing or selling securities trading on the over-the-counter
market, the Adviser and Subadvisers will generally execute the
transaction with a broker engaged in making a market for such
securities.
o The Adviser and Subadvisers may place certain orders with their
affiliates, subject to the requirements of the 1940 Act.
o No transactions may be effected by a Fund with an affiliate of the
Adviser or a Sub-Adviser acting as principal for its own account.
Brokerage commissions are negotiated, as there are no standard rates. All
brokerage firms provide the service of execution of the order made. Some
brokerage firms routinely provide research and statistical data to their
customers, and some firms customarily provide research reports on particular
companies and industries to customers that place a certain volume of trades with
them.
The Adviser, and each Subadviser, will place orders with brokers providing
useful research and statistical data services if reasonable commissions can be
negotiated for the total services furnished even though lower commissions may be
available from brokers not providing such services. The Adviser, and each
Subadviser, uses these services in connection with all of its investment
activities, and some of the data or services obtained in connection with the
execution of transactions for the Investment Company may be used in managing
other investment accounts. Conversely, data or services obtained in connection
with transactions in other accounts may be used by the Adviser, and each
Subadviser, in providing investment advice to the Investment Company. To the
extent that the Adviser, and each Subadviser, uses research and statistical data
services so obtained, its expenses may be reduced and such data has therefore
been and is one of the factors considered by the Adviser, and each Subadviser,
in determining its fee for investment advisory services.
At times, transactions for the Investment Company may be executed together with
purchases or sales of the same security for other accounts of the Adviser or a
Subadviser. When making concurrent transactions for several accounts, an effort
is made to allocate executions fairly among them. Transactions of this type are
executed only when the Adviser, or a Subadviser, believes it to be in the best
interests of the affected Fund(s), as well as any
18
<PAGE>
other accounts involved. However, the possibility exists that concurrent
executions may work out to the disadvantage of the Fund(s) involved.
The Investment Company paid aggregate brokerage commissions of $46,772 in 1999,
$56,490 in 1998 and $47,705 in 1997.
Commissions to Affiliated Brokers
- --------------------------------------------------------------------------------
During the past three years, the Investment Company has paid brokerage
commissions to Mutual of America Securities Corporation (Securities
Corporation), an affiliate of the Adviser, through an introducing brokerage
arrangement with Bear Stearns Securities Corp., and to Fred Alger & Co. (Fred
Alger), an affiliate of Alger Management, Inc., as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Year of Commissions % of Total % of Aggregate Dollars
Payment/Broker Paid Commissions Paid of Transactions
========================================================================================================
<S> <C> <C> <C>
1999 -- Securities Corporation $ 0 0% 0%
- --------------------------------------------------------------------------------------------------------
1998 -- Securities Corporation $ 0 0% 0%
- --------------------------------------------------------------------------------------------------------
1997 -- Securities Corporation $ 2,070 4.15% 4.0%
- --------------------------------------------------------------------------------------------------------
1999 -- Fred Alger $11,843 25.3% 16.5%
- --------------------------------------------------------------------------------------------------------
1998 -- Fred Alger $15,470 27.4% 23.0%
- --------------------------------------------------------------------------------------------------------
1997 -- Fred Alger $18,793 37.6% 30.8%
- --------------------------------------------------------------------------------------------------------
</TABLE>
The purchases and sales placed through Fred Alger related primarily to stocks
issued by companies with smallermarket capitalizations, for which execution may
be more difficult.
Portfolio Turnover
- --------------------------------------------------------------------------------
The Adviser and the Subadvisers do not consider portfolio turnover rate to be a
limiting factor when they deem it appropriate to purchase or sell securities for
a Fund. The portfolio turnover rate for a Fund in any year will depend on market
conditions, and the rate may increase depending on market conditions or if a new
portfolio manager for a Fund restructures the Fund's holdings. The Insurance
Companies' Separate Accounts do not pay taxes on the investment gains of the
Funds. As a consequence, the Adviser and Subadvisers do not consider how long a
Fund has held a security, or how capital gain upon sale would be characterized,
in deciding whether to sell that security.
The Equity Index Fund and the Indexed Assets of the All America Fund each
attempt to duplicate the investment results of the S&P 500 Index. As a result,
the Adviser anticipates that these Funds will hold investments generally for
longer periods than actively managed funds.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Calculation of Net Asset Value
- --------------------------------------------------------------------------------
An investor purchases or redeems shares of a Fund at net asset value. A Fund's
net asset value is equal to:
o the sum of the value of the securities the Fund holds,
o plus any cash or other assets, including interest and dividends accrued,
and
o minus all liabilities, including accrued expenses.
The net asset value of each Fund is determined once daily immediately after the
declaration of dividends, if any, and is determined as of the time of the close
of the regular trading session on the New York Stock Exchange (generally 4:00
p.m. Eastern Time) on each day during which such Exchange is open for trading.
A Fund's net asset value per share is equal to the Fund's net asset value
divided by the number of Fund shares outstanding.
19
<PAGE>
Pricing of Securities Held by the Funds
- --------------------------------------------------------------------------------
In determining a Fund's net asset value, the Adviser must value the securities
and other assets the Fund owns.
1) If market quotations are readily available for an investment, the Adviser
uses market value as follows:
o An equity security will be valued at the last sale price for the
security on the principal exchange on which the security is traded, or
at the last bid price on the principal exchange on which such security
is traded if such bid price is of a more recent day than the last sale
price.
o For any equity security not traded on an exchange but traded in the
over-the-counter market, the value will be the last sale price
available, or if no sale, at the latest available bid price.
o Debt securities will be valued at a composite fair market value,
"evaluated bid," which may be the last sale price, by a valuation
service selected by the Adviser and approved by the Investment Company's
Board of Directors.
2) If there are any portfolio securities or assets for which marketquotations
are not readily available, the Adviser will use fair valuepricing, as
determined in good faith by or under the direction of the Boardof Directors
of the Investment Company.
3) If a money market security has a remaining maturity of 60 days or less,the
Adviser will use the amortized cost method of valuation to approximatemarket
value, as follows:
o A security is initially valued at cost on the date of purchase (or at
market value on the 61st day prior to maturity if the security had more
than 60 days remaining to maturity at date of purchase by a Fund), and
the Adviser assumes constant proportionate amortization in value until
maturity of any discount or premium.
o The maturity of a variable rate certificate of deposit is deemed to be
the next coupon date on which the interest rate is to be adjusted.
o Market value will be used instead if the amortized cost value is
materially different from the actual market value of the security.
4) For stock options and futures contracts, these valuations apply:
o Stock options written by a Fund are valued at the mean of the last bid
and asked price on the principal exchange where the option is traded, as
of the close of trading on that exchange.
o When a Fund writes a call option, the amount of the premium is included
in the Fund's assets and the market value of the call is included in its
liabilities and adjusted thereafter to current market value.
o If a call expires or if the Fund enters into a closing purchase
transaction, it realizes a gain (or a loss if the cost of the
transaction exceeds the premium received when the call was written)
without regard to any unrealized appreciation or depreciation in the
underlying securities, and the liability related to such call is
extinguished.
o If a call is exercised, the Fund realizes a gain or loss from the
sale of the underlying securities and the proceeds of the sale
increased by the premium originally received.
o A premium a Fund pays on the purchase of a put will be deducted from a
Fund's assets and an equal amount will be included as an investment and
subsequently adjusted to the current market value of the put.
o Futures contracts, and options thereon, traded on commodities exchanges
are valued at their official settlement price as of the close of such
commodities exchanges.
20
<PAGE>
TAXATION OF THE INVESTMENT COMPANY
Taxes on Funds' Investment Earnings and Income
- --------------------------------------------------------------------------------
Each Fund intends to qualify and elect treatment as a "regulated investment
company" under Subchapter M of the Internal Revenue Code. A Fund will not owe
Federal income tax on the ordinary income and net realized capital gains that it
distributes to shareholders, if it qualifies as a regulated investment company
and satifies certain minimum income distribution rules.
If the Investment Company were to fail to qualify as a regulated investment
company, it would be subject to Federal income tax on the Funds' ordinary income
and net realized capital gains, whether or not it distributes the income and
gains to shareholders. If the Funds were to pay Federal income tax, their
investment performance would be negatively affected.
Section 4982 of the Code imposes an excise tax of 4% on a regulated investment
company that does not make a "required distribution" to shareholders of 98% of
its ordinary income for each calendar year and 98% of its capital gain income
for the one year period ending October 31 of each year, plus certain
undistributed income from previous years. Each Fund intends to make the
"required distributions" and to thereby avoid the excise tax. If a Fund were to
distribute less than the required amount, then the 4% excise tax would apply to
the deficiency, which would reduce the investment performance of the Funds.
Income Dividends and Capital Gains Distributions
- --------------------------------------------------------------------------------
The Investment Company declares dividend distributions semi-annually (at the end
of June and end of December) in the case of net investment income and annually
(at the end of December) in the case of net realized short or long-term capital
gains. A shareholder's dividend distributions are automatically reinvested in
full or fractional shares of the Fund to which they relate, unless the
shareholder elects on its application or an amendment to the application either
(1) to receive dividend distributions in cash or, (2) in the case of
distributions by the Equity Index, All America and Bond Funds, to purchase
shares of the Money Market Fund (in which case the $5,000 minimum is waived).
Cash dividend distributions are paid by wire transfer of Federal funds. Payment
of dividends normally will be made on the first business day of the following
month at the net asset value as of the last business day of the month in which
the dividend distribution is declared. Dividends and other distributions are
taxable to a Fund's shareholders even though they are reinvested in additional
shares of the Fund.
TAXATION OF SHAREHOLDERS
The discussion below provides information that may be helpful to a shareholder,
but it is not a detailed explanation of the Federal income tax treatment of a
shareholder. In addition, the discussion does not address state, local or
foreign taxation. Potential purchasers of shares of a Fund are encouraged to
consult their tax advisers regarding specific questions as to Federal, state or
local taxes. Foreign investors should consider applicable foreign taxes in their
evaluation of an investment in a Fund as well. Many of the rules set forth below
do not apply to not-for-profit organizations and other entities that are not
subject to Federal income taxation.
Characterization of Funds' distributions. Dividends paid by a Fund out of its
ordinary income and distributions of a Fund's net realized short-term capital
gains (jointly, the "ordinary income dividends") are taxable to its shareholders
as ordinary income. Distributions made from a Fund's net realized long-term
capital gains, including long-term gains from certain transactions in futures
and options, (the "capital gain dividends") are taxable to the Fund's
shareholders as long-term capital gain.
Passive Foreign Investment Company ("PFIC"). Due to investment laws in certain
foreign countries, it is possible that a Fund's investments in equity securities
in such countries may consist of shares of investment companies (or similar
investment entities) organized under foreign law or of ownership interests in
special accounts, trusts or partnerships. If the Fund purchases shares of an
investment company (or similar investment entity) organized under foreign law,
the Fund will be treated as owning shares in a PFIC for U.S. federal income tax
purposes and may be subject to U.S. Federal income tax law in certain
circumstances.
Foreign currency gains or losses. Foreign currency gains or losses from certain
debt instruments are generally treated as ordinary income or loss. These gains
or losses will generally increase or decrease the amount of a Fund's investment
company taxable income available to be distributed to shareholders as ordinary
income. Additionally, if losses of this nature exceed a Fund's other investment
company taxable income during a taxable
21
<PAGE>
year, a Fund would not be able to make any ordinary income dividend
distributions. Any such distribution made before the losses were realized (but
in the same taxable year) would be recharacterized as a return of capital to a
Fund's shareholders, thereby reducing the shareholders' basis in the Fund's
shares, and resulting in a capital gain for any shareholder who received a
distribution greater than that shareholder's basis in the Fund's shares
(assuming the shares were held as capital assets).
Taxation of Foreign Country Income. Investment income received by a Fund may be
subject to withholding and other taxes imposed by foreign countries. Tax
conventions between certain countries and the United States may reduce or
eliminate these foreign taxes. These foreign taxes will reduce the amount of
funds available for distributions by a Fund, but are included in the taxable
income reported by the Fund's shareholders. Since stock and securities of
foreign issuers held by any Fund will be limited, the Fund's shareholders will
not be able to claim a credit or deduction for these foreign taxes paid by a
Fund.
Redemptions and Exchanges. Redemptions and exchanges of a Fund's shares are
taxable events, and shareholders may realize gains or losses on such events. A
shareholder's loss realized on a sale or exchange of shares of a Fund will be
disallowed if the shareholder acquires other Fund shares (whether through the
automatic reinvestment of dividends or otherwise) within a 61-day period
beginning 30 days before and ending 30 days after the date that the shares are
disposed of. In such a case, the basis of the shares acquired will be adjusted
to reflect the disallowed loss. Any loss upon the sale or exchange of Fund
shares held for six months or less, which is not disallowed, will be treated as
long-term capital loss to the extent of any capital gain dividends received by
the shareholder with respect to such shares.
Original Issue Discount. The Funds may purchase debt securities that contain
original issue discount. Original issue discount that accrues in a taxable year
is treated as income earned by a Fund and is subject to the distribution
requirements of the Internal Revenue Code. A Fund, however, generally will not
receive any cash income for the original issue discount income it earns in a
taxable year. Accordingly, there is a risk that the Fund may have to sell other
securities to satisfy distribution requirements under the Internal Revenue Code.
Debt securities that a Fund acquires also may be subject to the market discount
rules.
Capital gains rates for entities other than individuals. Capital gains of
corporations are subject to tax at the same rates applicable to ordinary income.
Capital losses may be used only to offset capital gains and excess net capital
loss may be carried back three years and forward five years.
Dividends received deductions. Certain corporations are entitled to a 70%
dividends received deduction for distributions from certain domestic
corporations. The Equity Index Fund and All America Fund will designate the
portion of any distributions that qualify for the 70% dividends received
deduction. The amount designated may not exceed the amount received by the
Equity Index Fund or All America Fund for its taxable year that qualifies for
the dividends received deduction. (Since none of the income of the Bond Fund or
the Money Market Fund is expected to be derived from dividends from domestic
corporations, it is not anticipated that any portion of the ordinary income
dividends of the Bond Fund or the Money Market Fund will qualify for the
dividends received deduction.)
Private Foundations. Private foundations and their managers are subject to
excise taxes under the Code if they invest "any amount in such a manner as to
jeopardize the carrying out of any of the foundation's exempt purposes." This
rule requires a foundation manager, in making an investment, to exercise
"ordinary business care and prudence" under the facts and circumstances
prevailing at the time of making the investment, in providing for the short-term
and long-term needs of the foundation in carrying out its exempt purposes.
The factors that a foundation manager may take into account in assessing an
investment under this standard include the expected rate of return (both income
and capital appreciation), the risks of rising and falling price levels, and the
need for diversification within the foundation's portfolio. A substantial
percentage of investments of certain "private operating foundations", as defined
in the Code, may be restricted to assets directly devoted to their tax-exempt
purposes. Each manager of a private foundation should consult the manager's and
the foundation's tax advisers regarding the foregoing considerations.
Endowment Funds. Investment managers of endowment funds should consider whether
the acquisition by such funds of shares in the Funds is legally permissible.
This is not a matter of federal law, but is determined under applicable state
statutes. It should be noted, however, that under the Uniform Management of
Institutional Funds Act, which has been adopted in various forms by a large
number of states, participation in mutual funds or similar organizations, in
which funds are commingled and investment determinations are made by persons
other than the governing board of the endowment fund, is permitted. Each
investment manager of an endowment fund should consult the endowment fund's
counsel regarding the foregoing considerations.
22
<PAGE>
Retirement Trusts, including Qualified Plans. The Funds may accept investments
from tax-qualified pension, profit-sharing or stock bonus plans, governmental
plans and units, and Taft-Hartley plans (all such entities hereinafter being
referred to as "Retirement Trusts"). A fiduciary of a Retirement Trust other
than a governmental plan or unit (a "Qualified Plan") is subject to certain
requirements under the Employee Retirement Income Security Act of 1974, as
amended (ERISA), including the discharge of duties solely in the interest of,
and for the exclusive purpose of providing benefits to, the Qualified Plan's
participants and beneficiaries.
In considering an investment in the Funds of a portion of the assets of any
Qualified Plan, a fiduciary should consider, among other factors: (a) whether
the investment is permitted by the documents and instruments governing the
Qualified Plan; (b) whether the investment satisfies the diversification
requirements of Section 404(a)(1)(C) of ERISA, if applicable; (c) whether the
investment provides sufficient liquidity to permit benefit payments to be made
as they become due; (d) whether the investment is for the exclusive purpose of
providing benefits to participants and their beneficiaries; and (e) whether the
investment may constitute a "prohibited transaction" (within the meaning of
Section 406 of ERISA and Section 4975(c) of the Code). Each fiduciary of a
Qualified Plan (and any other person subject to ERISA) should consult such
person's tax or other advisers regarding the foregoing considerations.
Shareholder Withholding
The Investment Company may be required to withhold for Federal income tax
("back-up withholding") from distributions made and the proceeds of redemptions
to a shareholder who is not exempt from back-up withholding, because the
shareholder has not provided a correct taxpayer identification number or made
required certifications, or when the Investment Company or the shareholder has
been notified by the Internal Revenue Service that the shareholder is subject to
back-up withholding.
Ordinary income dividends paid by a Fund to a shareholder that is a nonresident
alien or a foreign entity will be subject to a 30% U.S. withholding tax
applicable to foreign persons, unless a reduced rate of withholding or a
withholding exemption is provided under applicable law or an applicable tax
convention between the United States and a particular foreign country. Foreign
shareholders are urged to consult their own tax advisers concerning the
applicability of the U.S. withholding tax.
YIELD AND PERFORMANCE INFORMATION
Performance information is computed separately for each Fund in accordance with
the formulas described below. At any time in the future, total return and yields
may be higher or lower than in the past and there can be no assurance that any
historical results will continue.
Yield of the Money Market Fund. The Money Market Fund calculates a seven-day
"current yield" (eight days when the seventh prior day has no net asset value
because the Investment Company is closed on that day) based on a hypothetical
shareholder account containing one share at the beginning of the seven-day
period. The return is calculated for the period by determining the net change in
the hypothetical account's value for the period, excluding capital changes. The
net change is divided by the share value at the beginning of the period to give
the base period return. This base period return is then multiplied by 365/7 to
annualize the yield figure, which is carried to the nearest one-hundredth of one
percent.
Realized capital gains or losses and unrealized appreciation or depreciation of
the assets of the Money Market Fund are included in the hypothetical account for
the beginning of the period but changes in these items during the period are not
included in the value for the end of the period. Income other than investment
income is excluded for the period. Values also reflect asset charges (for
advisory fees) as well as brokerage fees and other expenses.
Current yields will fluctuate daily. Accordingly, yields for any given seven-day
period do not necessarily represent future results. It should be remembered that
yield depends on the type, quality, maturities and rates of return of the Money
Market Fund's investments, among other factors. The Money Market Fund yield does
not reflect the cost of insurance and other insurance company separate account
charges. It also should not be compared to the yield of money market funds made
available to the general public because they may use a different method to
calculate yield. In addition, their yields are usually calculated on the basis
of a constant one dollar price per share and they pay out earnings and dividends
which accrue on a daily basis.
23
<PAGE>
The following is an example of the calculation of the Money Market Fund's yield
for the seven-day period ended December 28, 1999. Yields may fluctuate
substantially from the example shown.
1. Value for December 21, 1999
2. Value for December 28, 1999 (exclusive of capital changes and any
non-investment income)
3. Net change equals Line 1 subtracted from Line 2
4. Base period return equals Line 3 divided by Line 1
5. Current yield equals Line 4 annualized (multiplied by 365/7)
The Money Market Fund calculates effective yield by following Steps 1 - 4 above
to obtain a base period return, then compounding the base period return as
follows:
Effective Yield = [(Base Period Return + 1) 365/7] -1
Calculation of Total Return and Average Annual Total Return. Total Return
reflects changes in the price of a Fund's shares and assumes that any dividends
or capital gains distributions are reinvested in that Fund's shares immediately
rather than paid to the investor in cash.
Average Annual Total Return is calculated by finding the average annual
compounded rates of return of a hypothetical investment over the periods shown,
according to the following formula (Total Return is then expressed as a
percentage):
T = (ERV/P)1/n -1
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value. ERV is the value, at the end of the
applicable period, of a hypothetical $1,000 investment made at
the beginning of the applicable period.
Average Annual Total Return
For Periods Ended December 31, 1999*
Fund One Year Life of Fund*
---- -------- -------------
Equity Index N/A 9.0%
All America 26.0% 22.8%
Bond (3.5)% 5.0%
Money Market 4.9% 5.1%
Cumulative Total Return For
Periods Ended December 31, 1999*
Fund One Year Life of Fund*
---- -------- -------------
Equity Index N/A 9.0%
All America 26.0% 112.2%
Bond (3.5)% 19.5%
Money Market 4.9% 14.2%
- ----------
* Dates the Funds commenced operations: All America and Bond Funds -- May 1,
1996; the Money Market Fund -- May 1, 1997; and the Equity Index Fund --
May 3, 1999.
Yield Of The Bond Fund. Yield of the shares of the Bond Fund will be computed by
annualizing net investment income, as determined by the Commission's formula,
calculated on a per share basis, for a recent one-month or 30-day period and
dividing that amount by the net asset value per share of the Fund on the last
trading day of that period. Net investment income will reflect amortization of
any market value premium or discount of fixed income securities (except for
obligations backed by mortgages or other assets) over such period and may
include recognition of a pro rata portion of the stated dividend rate of
dividend paying portfolio securities. The Yield of
24
<PAGE>
the Fund will vary from time to time depending upon market conditions, the
composition of the portfolio and operating expenses allocated to the Fund.
Performance Comparisons. Each Fund may from time to time include the Total
Return, the Average Annual Total Return and Yield of its shares in
advertisements or in information furnished to shareholders. The Money Market
Fund may also from time to time include the Yield and Effective Yield of its
shares in information furnished to shareholders.
Each Fund may from time to time also include the ranking of its performance
figures relative to such figures for groups of mutual funds categorized by
Lipper Analytical Services ("Lipper") as having the same or similar investment
objectives or by similar services that monitor the performance of mutual funds.
Each Fund may also from time to time compare its performance to average mutual
fund performance figures compiled by Lipper in Lipper Performance Analysis.
Advertisements or information the Investment Company furnishes to current or
prospective investors also may include evaluations of a Fund published by
nationally recognized ranking services and by financial publications that are
nationally recognized. These publications may include Barron's, Business Week,
CDA Technologies, Inc., Changing Times, Dow Jones Industrial Average, Financial
Planning, Financial World, Forbes, Fortune, Hulbert's Financial Digest,
Institutional Investor, Investors Daily, Money, Morningstar Mutual Funds, The
New York Times, Stanger's Investment Adviser, Value Line, The Wall Street
Journal, Wiesenberger Investment Company Service and USA Today.
In reports or other communications to shareholders, the Investment Company also
may describe general economic and market conditions affecting the Funds and may
compare the performance of the Funds with (1) that of mutual funds included in
the rankings prepared by Lipper or similar investment services that monitor the
performance of insurance company separate accounts or mutual funds, (2)
IBC/Donoghue's Money Fund Report, (3) other appropriate indices of investment
securities and averages for peer universe of funds which are described in this
Statement of Additional Information, or (4) data developed by the Adviser or any
of the Subadvisers derived from such indices or averages.
Comparative Indices for the Funds
- --------------------------------------------------------------------------------
The Investment Company compares the performance of each Fund (other than the
Money Market Fund) against a widely recognized index or indices for stock or
bond market performance, based on the type of securities the Fund purchases. The
annual and semi-annual financial reports that the Investment Company prepares
will contain graphs with the Funds' performances compared to their indices.
It is not possible for an investor to directly invest in an unmanaged index.
Performance comparisons to indices are for informational purposes and do not
reflect any actual investment. The Funds pay investment advisory and other
expenses that are not applicable to unmanaged indices.
Equity Index Fund And All America Fund: Performance of each of these Funds is
compared to the Standard & Poor's Composite Index of 500 Stocks (the S&P 500
Index).
The S&P 500 Index is a market value-weighted and unmanaged index showing the
changes in the aggregate market value of 500 stocks relative to the base period
1941-43. The S&P 500 Index is composed almost entirely of common stocks of
companies listed on the NYSE, although the common stocks of a few companies
listed on the American Stock Exchange or traded OTC are included. The 500
companies represented include approximately 400 industrial concerns, as well as
financial services, utility and transportation concerns. The S&P 500 Index
represents about 80% of the market value of all issues traded on the NYSE.
Bond Fund: Performance is compared to the Lehman Brothers Government/Corporate
Bond Index (the Lehman Government/Corporate Index).
The Lehman Government/Corporate Index is a measure of the market value of
approximately 5,300 bonds with a face value currently in excess of $1 million,
which have at least one year to maturity and are rated "Baa" or higher
("investment grade") by a nationally recognized statistical rating agency.
25
<PAGE>
DESCRIPTION OF CORPORATE BOND RATINGS
Description of Corporate bond ratings of Moody's Investors Services, Inc.:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred
to as "gilt-edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities
or fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term risks
appear somewhat larger than in Aaa securities.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for
the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds
lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.
Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
Description of corporate bond ratings of Standard & Poor's Corporation:
AAA -- Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is very strong.
AA -- Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small
degree.
A -- Debt rated A has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher-rated categories.
26
<PAGE>
BBB -- Debt rated BB, B, CCC and CC is regarded, on balance, as predominantly
B -- speculative with respect to the issuer's capacity to pay interest and
CCC -- repay principal in accordance with the terms of the obligation.
CC -- BB indicates the lowest degree of speculation and CC the highest degree
of speculation. While such debt will likely have some quality and
protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
C -- The rating C is reserved for income bonds on which no interest is
being paid.
D -- Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
Plus (+) or Minus (-): The ratings from "AA" to "BB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
DISTRIBUTION OF FUND SHARES
Mutual of America Securities Corporation, 320 Park Avenue, New York, New York
10022 (the Distributor), an indirect, wholly-owned subsidiary of Mutual of
America Life, serves as the principal underwriter and distributor of Fund
shares. The Distributor and Mutual of America Life, whose address is 320 Park
Avenue, New York, New York 10022, are affiliates of the Adviser.
The Distributor does not receive compensation for distributing Fund shares, and
it is not obligated to distribute any specific amount of Fund shares. The
Distributor is registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. Registered representatives of the Distributor, located in 36 field offices
throughout the United States, participate in the distribution of shares of the
Funds.
Shares of the Fund are offered on a continuous basis. There is no sales charge
or deferred sales charge for the purchase of Fund shares.
LEGAL MATTERS
The legal validity of the shares described in the Prospectus has been passed on
by Patrick A. Burns, Esq., Senior Executive Vice President and General Counsel
of the Investment Company.
INDEPENDENT AUDITORS
The financial statements included in this Statement of Additional Information
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said report.
Arthur Andersen LLP have been selected as the independent auditors of the
Investment Company for its fiscal year ending December 31, 2000. Their address
is 1345 Avenue of the Americas, New York, New York 10105.
CUSTODIAN
The Chase Manhattan Bank, 1285 Avenue of the Americas, New York, New York 10019,
acts as Custodian of the Investment Company's assets.
27
<PAGE>
USE OF STANDARD & POOR'S INDEX
The Equity Index Fund and the Indexed Assets of the All America Fund are not
sponsored, endorsed, sold or promoted by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. (S&P). S&P makes no representation or warranty,
express or implied, to the owners of the Equity Index Fund, the All America Fund
or any member of the public regarding the advisability of investing in
securities generally or in the Equity Index Fund or the All America Fund
particularly or the ability of the S&P 500 Index to track general stock market
performance. S&P's only relationship to the Licensee is the licensing of certain
trademarks and trade names of S&P and of the S&P 500 Index which is determined,
composed and calculated by S&P without regard to the Equity Index Fund or the
All America Fund. S&P has no obligation to take the needs of the Investment
Company or the owners of the Equity Index Fund or the All America Fund into
consideration in determining, composing or calculating the S&P 500 Index. S&P is
not responsible for and has not participated in the determination of the net
asset values of the Equity Index Fund or the All America Fund, the amount of the
shares of the Fund or the timing of the issuance or sale of the Fund. S&P has no
obligation or liability in connection with the administration, marketing or
trading of the Equity Index Fund or the All America Fund.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500 index
or any data included therein and S&P shall have no liability for any errors,
omissions, or interruptions therein. S&P makes no warranty, express or implied,
as to results to be obtained by the investment company, owners of the equity
index fund, or any other person or entity from the use of the S&P 500 index or
any data included therein. S&P makes no express or implied warranties, and
expressly disclaims all warranties or merchantability or fitness for a
particular purpose or use with respect to the S&P 500 index or any data included
therein. Without limiting any of the foregoing, in no event shall S&P have any
liability for any special, punitive, indirect or consequential damages
(including lost profits), even if notified of the possibilities of such damages.
FINANCIAL STATEMENTS
Financial statements of the Investment Company for the year ended December 31,
1999 are included as follows:
Page
----
President's Message ....................................................... 29
Portfolio Management Discussions .......................................... 30
Portfolio of Investments in Securities:
All America Fund ........................................................ 32
Equity Index Fund ....................................................... 40
Bond Fund ............................................................... 45
Money Market Fund ....................................................... 47
Statement of Assets and Liabilities ....................................... 48
Statement of Operations ................................................... 49
Statements of Changes in Net Assets ....................................... 50
Financial Highlights ...................................................... 51
Notes to Financial Statements ............................................. 52
Report of Independent Public Accountants .................................. 55
28
<PAGE>
- --------------------------------------------------------------------------------
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
320 PARK AVENUE, NEW YORK, NEW YORK 10022
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to present the Mutual of America Institutional Funds
results for the year ending December 31, 1999. These Funds are designed
primarily as investment vehicles for endowments, foundations and other
institutional investors.
The U.S. economy enjoyed an enviable combination of strong Gross Domestic
Product growth, low inflation, solid corporate profits and moderate interest
rates in 1999. The economy continued its near record expansion as consumer
confidence reached an all-time high, due largely to high employment levels and a
surging stock market. Global economies stabilized, providing further foundation
and fuel for the domestic economy.
The Federal Reserve, concerned with a strong expanding economy and tight
labor markets, responded with three rate increases totaling 75 basis points
during 1999. Long rates rose approximately 140 basis points during the year. The
strong economy, higher commodity prices and tight labor markets have increased
the potential for higher rates going forward.
The equity market, as represented by the S&P 500 Index, posted a record
ninth year of positive return. Technology was the dominant factor across all
capitalization levels within the equity markets, as evidenced by the NASDAQ's
remarkable 86% return. Investors seeking growth opportunities favored smaller
capitalization stocks, allowing them to outperform the steadier, but slower
growing, large caps.
Total Returns-Year Ended December 31, 1999
The total return performance of each Fund for the year ended December 31,
1999 was as follows (please note that the Equity Index Fund commenced operations
on May 3, 1999):
All America Fund ........................................ +26.0%
Equity Index Fund ....................................... + 9.0%
Bond Fund ............................................... - 3.5%
MoneyMarket Fund ........................................ + 4.9%
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results. Investment return and
principal value will fluctuate, so shares, when redeemed, may be worth more or
less than when purchased.
On the pages which immediately follow are brief presentations and graphs
for each Fund (except the Money Market Fund and Equity Index Fund) which
illustrate each Fund's respective:
o Historical total return achieved over specified periods, expressed
as an annual average rate and as a cumulative rate;
o Equivalent in dollars of a $10,000 hypothetical investment at the
beginning of each specified period; and
o Historical performance compared with an appropriate index.
The portfolios of each Fund and financial statements are presented in the
pages which then follow.
Thank you for your continued investment in our Funds.
Sincerely,
/s/ Dolores Morrissey
Dolores Morrissey
Chairman of the Board and President,
Mutual of America Institutional Funds, Inc.
29
<PAGE>
EQUITY INDEX FUND
The Equity Index Fund invests in the 500 stocks which comprise the S&P 500
Index. The S&P 500 is a market-value weighted index of 500 domestic stocks that
are traded on the New York Stock Exchange, American Stock Exchange and NASDAQ
National Market System. The weightings make each company's influence on the
Index's performance directly proportional to that company's market value. The
companies included in the Index tend to be industry leaders. The Fund commenced
operations effective May 3, 1999. At year-end, the Fund returned 9.0%, which
matched the Index's performance for the same time period. The prevailing theme
of 1999 was the dominance of technology, which was the best performing sector,
returning 54% for the May through December period. For the same period, the
Index was outperformed by two other sectors, namely Capital Goods and Consumer
Cyclicals. The worst performing sectors were Transportation and Financials.
Investor perceptions of possible Federal Reserve actions, a bias toward large
cap stocks and a persistent search for growth drove multiple expansion, which
contributed two-thirds of annual return.
ALL AMERICA FUND
The All America Fund's investment objective is to outperform the Standard
& Poor's 500 Index. The Fund is approximately 60% invested in the 500 stocks
that comprise the S&P 500. In 1999, the remaining 40% of the Fund was actively
managed by three subadvisors and Mutual of America Capital Management
Corporation. Each manager invests approximately 10% of the Fund's assets, using
a different investment approach. The four approaches are large cap growth, small
cap growth, large cap value and small cap value.
The Fund returned 26.0% for 1999, exceeding the Index's return of 21.0%.
The Fund's 1999 performance reflected investors' continued quest for growth
opportunities--both the large and small cap growth portions significantly
outperformed the value segments. Nevertheless, the small cap value segment
performed strongly. Only the large cap value portion turned in a negative
performance.
[The following information was depicted as a line chart in the printed material]
GROWTH OF A $10,000 INVESTMENT
All America Fund S & P 500 Index
---------------- ---------------
May-96 10,000 10,000
Dec-96 11,043 11,515
Dec-97 13,909 15,356
Dec-98 16,835 19,744
Dec-99 21,218 23,898
- ------------------------------------------------------
All America Fund
Total Return
Period Growth ------------
Ended of Cumu- Annual
12/31/99 $10,000 lative Average
---------------------------------------------------
1 Year 12,603 26.0% 26.0%
Since 5/1/96
(Inception)* $21,218 112.2% 22.8%
- ------------------------------------------------------
- ------------------------------------------------------
S&P 500 Index
Total Return
Period Growth ------------
Ended of Cumu- Annual
12/31/99 $10,000 lative Average
---------------------------------------------------
1 Year 12,104 21.0% 21.0%
Since 5/1/96
(Inception) $23,898 139.0% 26.8%
- ------------------------------------------------------
The line representing the performance return of the All America Fund includes
expenses, such as transaction costs, management fees and expenses, that reduce
returns, while the performance return line of the index does not.
30
<PAGE>
MONEY MARKET FUND
The Money Market Fund's investment objective is the realization of high
current income to the extent consistent with the maintenance of liquidity,
investment quality and stability of capital. Through investing in high quality
commercial paper and other short-term instruments, the Fund returned 4.9% for
1999. Short-term rates rose substantially during the year, allowing the Fund to
achieve a higher current return in December than was available from similar
maturities the previous January. The seven-day effective yield as of February
15, 2000 is 5.6%. As with all performance reportings, this yield is not
necessarily indicative of future annual yields.
BOND FUND
The Bond Fund seeks a high level of return consistent with the
preservation of capital through investments in publicly traded debt securities.
The Fund primarily invests in corporate and U.S. Government agency securities,
which yield more than U.S. Treasury issues. The Fund's benchmark, the Lehman
Bros. Government/Corporate Bond Index, had a rare negative return for 1999, as
did the Bond Fund. Fears of inflation, fed by a strong domestic economy, a
booming stock market, and higher oil prices, depressed bond returns. The
inability of coupon income to keep pace with interest rate increases further
damaged prospects for bond returns. The Fund's overemphasis on corporate bonds,
relative to its benchmark index, caused it to slightly underperform since
Government securities did better than the corporates held by the Fund.
[The following information was depicted as a line chart in the printed material]
GROWTH OF A $10,000 INVESTMENT
Lehman Brothers Gov't/
Bond Fund Corp Bond Index
--------- ---------------
May-96 10,000 10,000
Dec-96 10,501 10,610
Dec-97 11,435 11,646
Dec-98 12,379 12,748
Dec-99 11,948 12,474
- ------------------------------------------------------
Bond Fund
Total Return
Period Growth ------------
Ended of Cumu- Annual
12/31/99 $10,000 lative Average
---------------------------------------------------
1 Year $ 9,652 -3.5% -3.5%
Since 5/1/96
(Inception)* $11,948 19.5% 5.0%
- ------------------------------------------------------
- ------------------------------------------------------
Lehman Brothers Gov't./Corp. Bond Index
Total Return
Period Growth ------------
Ended of Cumu- Annual
12/31/99 $10,000 lative Average
---------------------------------------------------
1 Year $ 9,785 -2.2% -2.2%
Since 5/1/96
(Inception) $12,474 24.7% 6.2%
- ------------------------------------------------------
The line representing the performance return of the Bond Fund includes expenses,
such as transaction costs, management fees and expenses, that reduce returns,
while the performance return line of the index does not.
31
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (ALL AMERICA FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES
December 31, 1999
Shares Value
------ -----
INDEXED ASSETS:
COMMON STOCKS
3Com Corp. .................................... 1,146 $ 53,862
Abbott Laboratories ........................... 5,112 185,630
Adaptec, Inc. ................................. 347 17,307
ADC Telecommunications, Inc. .................. 502 36,426
Adobe Systems, Inc. ........................... 410 27,573
Advanced Micro Devices, Inc. .................. 495 14,324
AES Corp. ..................................... 692 51,727
Aetna, Inc. ................................... 503 28,074
Aflac, Inc. ................................... 893 42,138
Air Products & Chemicals, Inc. ................ 771 25,877
Alberto-Culver Co. Cl B ....................... 78 4,595
Albertson's, Inc. ............................. 1,413 45,569
Alcan Aluminum Ltd. ........................... 728 29,985
ALCOA, Inc. ................................... 1,232 102,256
Allegheny Technologies, Inc. .................. 320 7,180
Allergan, Inc. ................................ 426 21,194
Allied Waste Industries, Inc. ................. 633 5,578
Allstate Corp. ................................ 2,683 64,392
Alltel Corp. .................................. 1,026 84,837
Alza Corp. .................................... 341 11,807
Amerada Hess Corp. ............................ 304 17,252
Ameren Corp. .................................. 461 15,098
America Online, Inc. .......................... 7,447 561,783
American Electric Power, Inc. ................. 650 20,881
American Express Co. .......................... 1,510 251,038
American General Corp. ........................ 837 63,507
American Greetings Corp. Cl A ................. 217 5,127
American Home Products Corp. .................. 4,337 171,040
American Int'l. Group, Inc. ................... 5,142 555,979
Amgen, Inc. ................................... 3,393 203,792
AMR Corp. ..................................... 506 33,902
Amsouth Bancorporation ........................ 1,322 25,531
Anadarko Petroleum Corp. ...................... 428 14,606
Analog Devices, Inc. .......................... 581 54,033
Andrew Corp. .................................. 276 5,227
Anheuser-Busch Cos., Inc. ..................... 1,571 111,345
Aon Corp. ..................................... 861 34,440
Apache Corp. .................................. 383 14,147
Apple Computer, Inc. .......................... 541 55,622
Applied Materials, Inc. ....................... 1,262 159,880
Archer-Daniels-Midland Co. .................... 2,021 24,631
Armstrong World Inds., Inc. ................... 129 4,305
Ashland, Inc. ................................. 243 8,004
Associates First Capital Corp. Cl A ........... 2,447 67,140
AT&T Corp. .................................... 10,613 538,610
Atlantic Richfield Co. ........................ 1,083 93,680
Autodesk, Inc. ................................ 191 6,446
Automatic Data Processing, Inc. ............... 2,079 112,006
AutoZone, Inc. ................................ 500 16,156
Avery Dennison Corp. .......................... 382 27,838
Avon Products, Inc. ........................... 805 26,565
Baker Hughes, Inc. ............................ 1,105 23,274
Ball Corp. .................................... 100 3,938
Bank of America Corp. ......................... 5,670 284,563
Bank of New York Co., Inc. .................... 2,471 98,840
Bank One Corp. ................................ 3,809 122,126
Bard (C.R.), Inc. ............................. 165 8,745
Barrick Gold Corp. ............................ 1,310 23,171
Bausch & Lomb, Inc. ........................... 193 13,208
Baxter International, Inc. .................... 978 61,431
BB & T Corp. .................................. 1,074 29,401
Bear Stearns Cos., Inc. ....................... 411 17,570
Becton Dickinson & Co. ........................ 841 22,497
Bed Bath & Beyond, Inc. ....................... 469 16,298
Bell Atlantic Corp. ........................... 5,158 317,539
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
BellSouth Corp. ............................... 6,252 $ 292,672
Bemis, Inc. ................................... 169 5,894
Best Buy, Inc. ................................ 685 34,378
Bestfoods ..................................... 937 49,251
Bethlehem Steel Corp. ......................... 440 3,685
Biomet, Inc. .................................. 378 15,120
Black & Decker Corp. .......................... 284 14,839
Block (H. & R.), Inc. ......................... 328 14,350
BMC Software, Inc. ............................ 804 64,270
Boeing Co. .................................... 3,104 129,010
Boise Cascade Corp. ........................... 192 7,776
Boston Scientific Corp. ....................... 1,390 30,406
Briggs & Stratton Corp. ....................... 75 4,022
Bristol-Myers Squibb Co. ...................... 6,589 422,931
Brown-Forman Corp. Cl B ....................... 222 12,710
Brunswick Corp. ............................... 310 6,898
Burlington Northern Santa Fe Corp. ............ 1,518 36,812
Burlington Resources, Inc. .................... 731 24,169
Cabletron Systems, Inc. ....................... 585 15,210
Campbell Soup Co. ............................. 1,421 54,975
Capital One Financial Corp. ................... 664 31,997
Cardinal Health, Inc. ......................... 915 43,806
Carnival Corp. ................................ 2,061 98,542
Carolina Power & Light Co. .................... 536 16,315
Caterpillar, Inc. ............................. 1,195 56,240
CBS Corp. ..................................... 2,532 161,890
Cendant Corp. ................................. 2,362 62,741
Centex Corp. .................................. 192 4,740
Central & South West Corp. .................... 715 14,300
CenturyTel, Inc. .............................. 469 22,219
Ceridian Corp. ................................ 486 10,479
Champion International Corp. .................. 323 20,006
Charles Schwab Corp. .......................... 2,748 105,455
Chase Manhattan Corp. ......................... 2,739 212,786
Chevron Corp. ................................. 2,204 190,922
Chubb Corp. ................................... 592 33,337
CIGNA Corp. ................................... 625 50,352
Cincinnati Financial Corp. .................... 555 17,309
CINergy Corp. ................................. 534 12,883
Circuit City Group, Inc. ...................... 675 30,417
Cisco Systems, Inc. ........................... 10,865 1,163,913
Citigroup, Inc. ............................... 11,199 622,244
Citrix Systems, Inc. .......................... 295 36,285
Clear Channel Communications, Inc. ............ 1,134 101,210
Clorox Co. .................................... 93 39,947
CMS Energy Corp. .............................. 397 12,381
Coastal Corp. ................................. 717 25,409
Coca-Cola Co. ................................. 8,204 477,883
Coca-Cola Enterprises, Inc. ................... ,428 28,739
Colgate-Palmolive Co. ......................... 1,959 127,335
Columbia Energy Group ......................... 270 17,078
Columbia/HCA Healthcare Corp. ................. 1,896 55,576
Comcast Corp. Cl A ............................ 2,518 127,316
Comerica, Inc. ................................ 525 24,511
Compaq Computer Corp. ......................... 5,646 152,795
Computer Associates Intl., Inc ................ 1,806 126,307
Computer Sciences Corp. ....................... 538 50,908
Compuware Corp. ............................... 1,200 44,700
Comverse Technology Inc. ...................... 235 34,016
Conagra, Inc. ................................. 1,640 37,003
Conoco, Inc. .................................. 2,107 52,412
Conseco, Inc. ................................. 1,099 19,645
Consolidated Edison, Inc. ..................... 743 25,634
Consolidated Natural Gas Co. .................. 322 20,910
Consolidated Stores Corp. ..................... 370 6,013
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (ALL AMERICA FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Constellation Energy Group, Inc. .............. 503 $ 14,587
Cooper Industries, Inc. ....................... 317 12,819
Cooper Tire & Rubber Co. ...................... 255 3,968
Coors (Adolph) Co. Cl B ....................... 118 6,195
Corning, Inc. ................................. 822 105,987
Costco Wholesale Corp. ........................ 742 67,708
Countrywide Credit Industries, Inc. ........... 379 9,570
Crane Co. ..................................... 222 4,412
Crown Cork & Seal, Inc. ....................... 411 9,196
CSX Corp. ..................................... 731 22,935
Cummins Engine Co., Inc. ...................... 135 6,522
CVS Corp. ..................................... 1,316 52,558
Dana Corp. .................................... 557 16,675
Danaher Corp. ................................. 478 23,064
Darden Restaurants, Inc. ...................... 444 8,048
Dayton-Hudson Corp. ........................... 1,486 109,128
Deere & Co. ................................... 785 34,049
Dell Computer Corp. ........................... 8,439 430,389
Delphi Automotive Systems Corp ................ 1,899 29,909
Delta Air Lines, Inc. ......................... 441 21,967
Deluxe Corp. .................................. 251 6,887
Dillard's Inc. Cl A ........................... 359 7,247
Disney (Walt) Co. ............................. 6,850 200,363
Dollar General Corp. .......................... 883 20,088
Dominion Resources, Inc. ...................... 645 25,316
Donnelley (R.R.) & Sons Co. ................... 429 10,645
Dover Corp. ................................... 700 31,763
Dow Chemical Co. .............................. 739 98,749
Dow Jones & Co., Inc. ......................... 305 20,740
DTE Energy Co. ................................ 487 15,280
Du Pont (E.I.) de Nemours & Co ................ 3,469 228,536
Duke Energy Corp. ............................. 1,226 61,453
Dun & Bradstreet Corp. ........................ 541 15,960
Eastern Enterprises ........................... 85 4,882
Eastman Chemical Co. .......................... 256 12,208
Eastman Kodak Co. ............................. 1,063 70,424
Eaton Corp. ................................... 243 17,648
Ecolab, Inc. .................................. 435 17,019
Edison International .......................... 1,167 30,561
El Paso Energy Corp. .......................... 766 29,730
Electronic Data Systems Corp. ................. 1,564 104,690
EMC Corp. ..................................... 3,405 371,996
Emerson Electric Co. .......................... 1,460 83,768
Engelhard Corp. ............................... 423 7,984
Enron Corp. ................................... 2,399 106,456
Entergy Corp. ................................. 829 21,347
Equifax, Inc. ................................. 483 11,381
Exxon Mobil Corp. ............................. 11,471 924,133
Fannie Mae .................................... 3,405 212,600
FDX Corp. ..................................... 999 40,897
Federated Department Stores, Inc. ............. 701 35,444
Federal Home Loan Mortgage Corp. .............. 2,336 109,938
Fifth Third Bancorp ........................... 1,014 74,402
First Data Corp. .............................. 1,392 68,643
First Union Corp. ............................. 3,281 107,658
Firstar Corp. ................................. 3,256 68,783
FirstEnergy Corp. ............................. 786 17,832
FleetBoston Financial Corp. ................... 3,041 105,865
Fleetwood Enterprises, Inc. ................... 112 2,310
Florida Progress Corp. ........................ 330 13,963
Fluor Corp. ................................... 255 11,698
FMC Corp. ..................................... 102 5,846
Ford Motor Co. ................................ 4,012 214,391
Fort James Corp. .............................. 743 20,340
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Fortune Brands, Inc. .......................... 559 $ 18,482
Foster Wheeler Corp. .......................... 132 1,172
FPL Group, Inc. ............................... 602 25,773
Franklin Resources, Inc. ...................... 847 27,157
Freeport-McMoran Copper & Gold,
Inc. Cl B .................................. 549 11,598
Gannett Co., Inc. ............................. 940 76,669
Gap, Inc. ..................................... 2,844 130,824
Gateway, Inc. ................................. 1,052 75,810
General Dynamics Corp. ........................ 669 35,290
General Electric Co. .......................... 10,898 1,686,466
General Instrument Corp. ...................... 583 49,555
General Mills, Inc. ........................... 1,027 36,715
General Motors Corp. .......................... 2,126 154,534
Genuine Parts Co. ............................. 602 14,937
Georgia-Pacific Group ......................... 576 29,232
Gillette Co. .................................. 3,563 146,751
Global Crossing Ltd. .......................... 2,521 126,050
Golden West Financial Corp. ................... 552 18,492
Goodrich (B.F.) Co. ........................... 369 10,148
Goodyear Tire & Rubber Co. .................... 525 14,798
GPU, Inc. ..................................... 422 12,634
Grainger (W.W.), Inc. ......................... 314 15,013
Great Atlantic & Pacific Tea, Inc ............. 124 3,457
Great Lakes Chemical Corp. .................... 191 7,294
GTE Corp. ..................................... 3,228 227,776
Guidant Corp. ................................. 1,015 47,705
Halliburton Holdings Co. ...................... 1,483 59,691
Harcourt General, Inc. ........................ 230 9,258
Harrah's Entertainment, Inc. .................. 431 11,395
Hartford Financial Svs Gp, Inc ................ 759 35,958
Hasbro, Inc. .................................. 654 12,467
HealthSouth Corp. ............................. 1,283 6,896
Heinz (H.J.) Co. .............................. 1,204 47,934
Helmerich & Payne, Inc. ....................... 163 3,555
Hercules, Inc. ................................ 356 9,924
Hershey Food Corp. ............................ 469 22,278
Hewlett-Packard Co. ........................... 3,404 387,843
Hilton Hotels Corp. ........................... 1,239 11,925
Home Depot, Inc. .............................. 7,647 524,297
Homestake Mining Co. .......................... 874 6,828
Honeywell International, Inc. ................. 2,652 152,988
Household International Corp. ................. 1,562 58,185
Humana, Inc. .................................. 563 4,610
Huntington Bancshares, Inc. ................... 774 18,479
Ikon Office Solutions, Inc. ................... 501 3,413
Illinois Tool Works, Inc. ..................... 1,008 68,103
IMS Health, Inc. .............................. 1,051 28,574
Inco Ltd. ..................................... 645 15,158
Ingersoll Rand Co. ............................ 555 30,560
Intel Corp. ................................... 11,115 914,903
Intl. Business Machines Corp. ................. 5,987 646,596
Intl. Flavors & Fragrances, Inc. .............. 357 13,477
International Paper Co. ....................... 1,390 78,448
Interpublic Group of Cos., Inc. ............... 948 54,688
ITT Industries, Inc. .......................... 295 9,864
Jefferson-Pilot Corp. ......................... 354 24,161
Johnson & Johnson ............................. 4,619 430,144
Johnson Controls, Inc. ........................ 287 16,323
Jostens, Inc. ................................. 111 2,699
Kansas City Southern Inds., Inc. .............. 371 27,686
Kaufman & Broad Home Corp. .................... 154 3,725
Kellogg Co. ................................... 1,362 41,967
Kerr-McGee Corp. .............................. 290 17,980
The accompanying notes are an integral part of these financial statements.
33
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (ALL AMERICA FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
KeyCorp ....................................... 1,508 $ 33,365
Kimberly Clark Corp. .......................... 1,790 116,798
KLA-Tencor Corp. .............................. 296 32,967
Kmart Corp. ................................... 1,659 16,694
Knight-Ridder, Inc. ........................... 272 16,184
Kohl's Corp. .................................. 547 39,487
Kroger Co. .................................... 2,787 52,605
Legget & Platt, Inc. .......................... 661 14,170
Lehman Brothers Holdings, Inc. ................ 403 34,129
Lexmark Intl. Group Inc. Cl A ................. 433 39,187
Lilly (Eli) & Co. ............................. 3,622 240,863
Limited, Inc. ................................. 719 31,142
Lincoln National Corp. ........................ 668 26,720
Liz Claiborne, Inc. ........................... 203 7,638
Lockheed Martin Corp. ......................... 1,328 29,050
Loews Corp. ................................... 361 21,908
Longs Drug Stores Corp. ....................... 126 3,252
Louisiana-Pacific Corp. ....................... 361 5,144
Lowe's Companies, Inc. ........................ 1,282 76,600
LSI Logic Corp. ............................... 495 33,413
Lucent Technologies, Inc. ..................... 10,406 778,499
Mallinckrodt, Inc. ............................ 231 7,349
Manor Care, Inc. .............................. 360 5,760
Marriott International, Inc Cl A .............. 836 26,386
Marsh & McLennan Co., Inc. .................... 887 84,875
Masco Corp. ................................... 1,488 37,758
Mattel, Inc. .................................. 1,412 18,533
May Department Stores Co. ..................... 1,123 36,217
Maytag Corp. .................................. 284 13,632
MBIA, Inc. .................................... 336 17,745
MBNA Corp. .................................... 2,663 72,567
McDermott International, Inc. ................. 191 1,731
McDonald's Corp. .............................. 4,497 181,285
McGraw-Hill Cos., Inc. ........................ 661 40,734
MCI WorldCom, Inc. ............................ 9,441 500,963
McKesson HBOC, Inc. ........................... 945 21,322
Mead Corp. .................................... 344 14,943
MediaOne Group, Inc. .......................... 2,038 156,544
Medtronic, Inc. ............................... 3,943 143,673
Mellon Financial Corp. ........................ 1,689 57,532
Merck & Co., Inc. ............................. 7,764 520,673
Meredith Corp. ................................ 169 7,045
Merrill Lynch & Co., Inc. ..................... 1,242 103,707
MGIC Investment Corp. ......................... 367 22,089
Micron Technology, Inc. ....................... 896 69,664
Microsoft Corp. ............................... 17,150 2,002,225
Milacron, Inc. ................................ 119 1,830
Millipore Corp. ............................... 142 5,485
Minnesota Mining & Mfg. Co. ................... 1,353 132,425
Mirage Resorts, Inc. .......................... 668 10,229
Molex, Inc. ................................... 521 29,534
Monsanto Co. .................................. 2,129 75,846
Morgan (J.P.) & Co., Inc. ..................... 590 74,709
Morgan Stanley Dean Witter & Co. .............. 1,850 264,088
Motorola, Inc. ................................ 2,040 300,390
Nabisco Group Holdings Corp. .................. 1,096 11,645
NACCO Industries, Inc. Cl A ................... 26 1,445
National City Corp. ........................... 2,077 49,199
National Semiconductor Corp. .................. 564 24,146
National Service Industries ................... 134 3,953
Navistar International Corp. .................. 217 10,280
Network Appliance, Inc. ....................... 494 41,033
New Century Energies, Inc. .................... 387 11,755
New York Times Co. Cl A ....................... 585 28,738
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Newell Rubbermaid, Inc. ....................... 947 $ 27,463
Newmont Mining Corp. .......................... 563 13,794
Nextel Communications, Inc. Cl A .............. 1,215 125,297
Niagara Mohawk Holdings, Inc. ................. 630 8,781
Nicor, Inc. ................................... 154 5,005
Nike, Inc. Cl B ............................... 945 46,837
Nordstrom, Inc. ............................... 471 12,334
Norfolk Southern Corp. ........................ 1,278 26,199
Nortel Networks Corp .......................... 4,460 450,460
Northern States Power Co. ..................... 518 10,101
Northern Trust Corp. .......................... 750 39,750
Northrop Grumman Corp. ........................ 233 12,597
Novell, Inc. .................................. 1,126 44,970
Nucor Corp. ................................... 293 16,060
Occidental Petroleum Corp. .................... 1,221 26,404
Office Depot, Inc. ............................ 1,093 11,955
Old Kent Financial Corp. ...................... 399 14,115
Omnicom Group, Inc. ........................... 596 59,600
Oneok, Inc. ................................... 102 2,563
Oracle Corp. .................................. 4,729 529,944
Owens Corning ................................. 175 3,380
Owens-Illinois, Inc. .......................... 524 13,133
Paccar, Inc. .................................. 263 11,654
Pactiv Corp. .................................. 573 6,088
Paine Webber Group, Inc. ...................... 489 18,979
Pall Corp. .................................... 417 8,992
Parametric Technology Corp. ................... 905 24,492
Parker Hannifin Corp. ......................... 365 18,729
Paychex, Inc. ................................. 826 33,040
PE Corp-PE Biosystems Group ................... 343 41,267
Peco Energy Co. ............................... 627 21,788
Penney (J.C.) Co., Inc. ....................... 886 17,665
Peoples Energy Corp. .......................... 114 3,819
Peoplesoft, Inc. .............................. 817 17,412
Pep Boys-Manny, Moe & Jack .................... 170 1,551
PepsiCo, Inc. ................................. 4,835 170,434
Perkin Elmer, Inc. ............................ 145 6,045
Pfizer, Inc. .................................. 12,858 417,081
PG & E Corp. .................................. 1,290 26,445
Pharmacia & Upjohn, Inc. ...................... 1,703 76,635
Phelps Dodge Corp. ............................ 297 19,958
Phillip Morris Cos., Inc. ..................... 7,859 182,231
Phillips Petroleum Co. ........................ 851 39,997
Pinnacle West Capital Corp. ................... 285 8,710
Pitney Bowes, Inc. ............................ 899 43,433
Placer Dome, Inc. ............................. 1,094 11,761
PNC Bank Corp. ................................ 977 43,477
Polaroid Corp. ................................ 142 2,671
Potlatch Corp. ................................ 94 4,195
PP&L Resources, Inc. .......................... 477 10,911
PPG Industries, Inc. .......................... 583 36,474
Praxair, Inc. ................................. 536 26,968
Price (T. Rowe) Associates .................... 408 15,071
Proctor & Gamble Co. .......................... 4,365 478,240
Progressive Corp. of Ohio ..................... 245 17,916
Providian Financial Corp. ..................... 476 43,346
Public Svc. Enterprise Group, Inc. ............ 37 25,657
Pulte Corp. ................................... 140 3,150
Quaker Oats Co. ............................... 450 29,531
Qualcomm, Inc. ................................ 2,156 379,995
Quintiles Transnational Corp. ................. 386 7,213
Ralston Purina Co. ............................ 1,087 30,300
Raytheon Co. Cl B ............................. 1,135 30,148
Reebok International Ltd. ..................... 182 1,490
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (ALL AMERICA FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Regions Financial Corp. ....................... 752 $ 18,894
Reliant Energy, Inc. .......................... 994 22,738
Republic New York Corp. ....................... 352 25,344
Reynolds Metals Co. ........................... 208 15,938
Rite-Aid Corp. ................................ 870 9,733
Rockwell Intl., Corp. ......................... 643 30,784
Rohm & Haas Co. ............................... 732 29,783
Rowan Cos., Inc. .............................. 271 5,877
Royal Dutch Petroleum Co. N.Y ................. 7,122 430,436
Russell Corp. ................................. 110 1,843
Ryder System, Inc. ............................ 216 5,279
Safeco Corp. .................................. 442 10,995
Safeway, Inc. ................................. 1,715 60,990
Sara Lee Corp. ................................ 3,036 66,982
SBC Communications, Inc. ...................... 11,331 552,386
Schering-Plough Corp. ......................... 4,879 205,833
Schlumberger, Ltd. ............................ 1,840 103,500
Scientific-Atlanta, Inc. ...................... 257 14,296
Scottish Power plc - ADR ...................... * 11
Seagate Technology ............................ 700 32,594
Seagram Ltd. .................................. 1,453 65,294
Sealed Air Corp. New .......................... 281 14,559
Sears Roebuck & Co. ........................... 1,278 38,899
Sempra Energy ................................. 808 14,039
Service Corp. International ................... 914 6,341
Shared Medical Systems Corp. .................. 86 4,381
Sherwin-Williams Co. .......................... 569 11,949
Sigma-Aldrich Corp. ........................... 339 10,191
Silicon Graphics, Inc. ........................ 634 6,221
SLM Holding Corp. ............................. 541 22,857
Snap-On, Inc. ................................. 211 5,605
Solectron Corp. ............................... 984 93,603
Southern Co. .................................. 2,236 52,546
Southtrust Corp ............................... 563 21,288
Southwest Airlines Co. ........................ 1,694 27,422
Springs Industries, Inc. ...................... 58 2,316
Sprint Corp. (FON Group) ...................... 2,915 196,216
Sprint Corp. (PCS Group) ...................... 1,431 146,678
St. Jude Medical, Inc. ........................ 284 8,715
St. Paul Companies, Inc. ...................... 762 25,670
Stanley Works ................................. 299 9,007
Staples, Inc. ................................. 1,562 32,412
State Street Corp. ............................ 542 39,600
Summit Bancorp ................................ 595 18,222
Sun Microsystems, Inc. ........................ 5,200 402,675
Sunoco, Inc. .................................. 304 7,144
Suntrust Banks, Inc. .......................... 1,081 74,386
Supervalu, Inc. ............................... 467 9,340
Synovus Financial Corp. ....................... 912 18,126
Sysco Corp. ................................... 1,112 43,994
Tandy Corp. ................................... 649 31,923
Tektronix, Inc. ............................... 153 5,948
Tellabs, Inc. ................................. 1,316 84,471
Temple-Inland, Inc. ........................... 180 11,869
Tenet Healthcare Corp. ........................ 1,043 24,511
Teradyne, Inc. ................................ 575 37,950
Texaco, Inc. .................................. 1,857 100,858
Texas Instruments, Inc. ....................... 2,640 255,750
Texas Utilities Co. ........................... 929 33,038
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Textron, Inc. ................................. 505 $ 38,727
Thermo Electron Corp. ......................... 531 7,965
Thomas & Betts Corp. .......................... 183 5,833
Time Warner, Inc. ............................. 4,273 309,525
Times Mirror Co. .............................. 201 13,467
Timken Co. .................................... 201 4,108
TJX Companies ................................. 1,030 21,051
Torchmark Corp. ............................... 447 12,991
Tosco Corp. ................................... 478 12,996
Toys R Us, Inc. ............................... 832 11,908
Transocean Sedco Forex, Inc. .................. 356 12,000
Tribune Co. ................................... 796 43,830
Tricon Global Restaurants Inc. ................ 516 19,931
TRW, Inc. ..................................... 407 21,139
Tupperware Corp. .............................. 186 3,150
Tyco International Ltd. ....................... 5,623 218,594
U.S. Bancorp .................................. 2,417 57,555
U.S. West, Inc. ............................... 1,696 122,112
Unicom Corp. .................................. 730 24,455
Unilever N.V .................................. 1,921 104,574
Union Carbide Corp. ........................... 448 29,904
Union Pacific Corp. ........................... 833 36,340
Union Pacific Resources Group, Inc. ........... 846 10,787
Union Planters Corp. .......................... 480 18,930
Unisys Corp. .................................. 1,028 32,832
United Healthcare Corp. ....................... 582 30,919
United Technologies Corp. ..................... 1,618 105,170
Unocal Corp. .................................. 814 27,320
UNUMProvident Corp. ........................... 802 25,714
US Airways Group Inc. ......................... 237 7,599
UST, Inc. ..................................... 585 14,735
USX-Marathon Group ............................ 1,037 25,601
USX-U.S. Steel Group .......................... 297 9,801
V F Corp. ..................................... 399 11,970
Viacom, Inc. Cl B ............................. 2,341 141,484
Vulcan Materials Co. .......................... 336 13,419
W.R. Grace & Co. .............................. 239 3,316
Wachovia Corp. ................................ 680 46,240
Wal-Mart Stores, Inc. ......................... 14,781 1,021,737
Walgreen Co. .................................. 3,333 97,490
Warner-Lambert Co. ............................ 2,872 235,325
Washington Mutual, Inc. ....................... 1,946 50,596
Waste Management, Inc. ........................ 2,081 35,767
Watson Pharmaceuticals, Inc. .................. 322 11,532
Wellpoint Health Networks Inc. Cl A ........... 217 14,308
Wells Fargo & Company ......................... 5,455 220,587
Wendy's International, Inc. ................... 408 8,415
Westvaco Corp. ................................ 337 10,995
Weyerhaeuser Co. .............................. 792 56,875
Whirlpool Corp. ............................... 246 16,005
Willamette Industries, Inc. ................... 375 17,414
Williams Cos., Inc. ........................... 1,459 44,591
Winn-Dixie Stores, Inc. ....................... 499 11,945
Worthington Industries, Inc. .................. 309 5,118
Wrigley (Wm.) Jr. Co. ......................... 391 32,429
Xerox Corp. ................................... 2,228 50,548
Xilinx, Inc. .................................. 1,062 48,288
Yahoo!, Inc. .................................. 874 378,169
----------
TOTAL INDEXED ASSETS--COMMON STOCKS
(Cost: $21,123,075) 56.7% .................................... 41,037,263
----------
- ----------
* Fractional share attributable to Corporate Action.
The accompanying notes are an integral part of these financial statements.
35
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (ALL AMERICA FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
<TABLE>
<CAPTION>
Face
Rate Maturity Amount Value
---- -------- ------ -----
<S> <C> <C> <C> <C>
INDEXED ASSETS (CONTINUED):
SHORT-TERM DEBT SECURITIES:
U. S. GOVERNMENT (0.3%)
U.S. Treasury Bill (a) ............. 5.18% 01/20/00 $200,000 $ 199,450
-----------
AGENCY (0.8%)
Federal Home Loan Bank ............. 4.75 01/12/00 613,000 612,110
-----------
COMMERCIAL PAPER (0.9%)
UBS Finance (Delw.) Inc. ........... 4.00 01/03/00 642,000 641,857
-----------
TOTAL SHORT-TERM DEBT SECURITIES
(Cost: $1,453,417) 2.0% .......................................... 1,453,417
-----------
TOTAL INDEXED ASSETS
(Cost: $22,576,492) 58.7% ........................................ $42,490,680
-----------
</TABLE>
- ----------
FUTURES CONTRACTS OUTSTANDING AS OF DECEMBER 31, 1999:
<TABLE>
<CAPTION>
Expiration Underlying Face Unrealized
Date Amount at Value Gain
<S> <C> <C> <C>
PURCHASED
3 S&P 500 Stock Index Futures Contracts .. March 2000 $1,113,150 $40,088
========== =======
</TABLE>
The face value of futures purchased and outstanding as percentage of total
investment in securities: 1.5%.
- ----------
(a) This security has been segregated to cover initial margin requirements on
open futures contracts.
The accompanying notes are an integral part of these financial statements.
36
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (ALL AMERICA FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
Shares Value
------ -----
ACTIVE ASSETS:
COMMON STOCKS
BASIC MATERIALS (0.8%)
Cabot Corp. ............................... 4,000 $ 81,500
Lone Star Technologies, Inc.* ............. 6,600 183,975
Newmont Mining Corp. ...................... 3,100 75,950
Placer Dome, Inc. ......................... 5,600 60,200
Praxair, Inc .............................. 4,100 206,281
----------
607,906
----------
CONSUMER, CYCLICAL (4.6%)
eBay, Inc.* ............................... 1,000 125,188
Abercrombie & Fitch Co. Cl A* ............. 2,800 74,725
Bed Bath & Beyond, Inc.* .................. 5,200 180,700
BJ Services Co.* .......................... 1,800 75,263
BJ's Wholesale Club, Inc.* ................ 7,400 270,100
CNET, Inc.* ............................... 2,200 124,850
Cox Radio, Inc.* .......................... 1,300 129,675
Dayton-Hudson Corp. ....................... 2,400 176,250
Diedrich Coffee, Inc.* .................... 17,000 69,063
Ethan Allen Interiors, Inc. ............... 3,550 113,822
Ford Motor Co. ............................ 1,400 74,813
Furniture Brands Intl., Inc.* ............. 800 17,600
Gannett Co., Inc. ......................... 2,100 171,281
Linens'n Things, Inc.* .................... 4,200 124,425
Mandalay Resort Group* .................... 7,300 146,913
Masco Corp. ............................... 6,700 170,013
Meredith Corp. ............................ 2,300 95,881
Nordstrom, Inc. ........................... 3,900 102,131
Outback Steakhouse, Inc.* ................. 4,450 115,422
Skywest, Inc. ............................. 1,300 36,400
Telewest Communications plc ADR* .......... 3,163 174,756
The Cheesecake Factory, Inc.* ............. 2,700 94,500
The Men's Wearhouse, Inc.* ................ 2,600 76,375
Tiffany & Co. ............................. 2,850 254,363
TJX Companies ............................. 4,100 83,794
Young & Rubicam, Inc. ..................... 3,500 247,625
----------
3,325,928
----------
CONSUMER, NON-CYCLICAL (2.7%)
Albertson's, Inc. ......................... 3,900 125,775
American Home Products Corp. .............. 1,400 55,213
Baxter International, Inc. ................ 1,700 106,781
Bestfoods ................................. 2,100 110,381
Cardinal Health, Inc. ..................... 2,100 100,538
Cygnus, Inc.* ............................. 4,000 73,000
Diageo plc-- Sponsored ADR ................ 2,000 64,000
Dura Pharmaceuticals, Inc.* ............... 5,500 76,656
Enzon, Inc.* .............................. 2,100 91,088
Forest Laboratories, Inc.* ................ 3,500 215,031
Fort James Corp. .......................... 4,300 117,713
IDEC Pharmaceuticals Corp.* ............... 400 39,300
Lilly (Eli) & Co. ......................... 1,500 99,750
Medimmune, Inc.* .......................... 1,100 182,463
Medquist, Inc.* ........................... 1,200 30,975
Minimed, Inc.* ............................ 2,400 175,800
SangStat Medical Corp.* ................... 2,900 86,275
Sepracor, Inc.* ........................... 700 69,431
US Foodservice* ........................... 4,400 73,700
Williams-Sonoma, Inc.* .................... 1,200 55,200
----------
1,949,070
----------
ENERGY (2.2%)
BP Amoco Corp. ............................ 3,434 203,679
Calpine Corp.* ............................ 4,050 259,200
Exxon Mobil Corp. ......................... 2,376 191,417
Midcoast Energy Res., Inc. ................ 1,400 23,450
Nabors Industries, Inc.* .................. 4,000 123,750
Quanta Services, Inc.* .................... 3,200 90,400
Shares Value
------ -----
ACTIVE ASSETS (CONTINUED):
ENERGY (CONTINUED)
Schlumberger, Ltd. ........................ 3,000 $ 168,750
Total Fina S.A.-- ADR ..................... 2,470 171,048
USX-Marathon Group ........................ 7,200 177,750
Varco International, Inc.* ................ 6,000 61,125
Weatherford International, Inc.* .......... 2,400 95,850
----------
1,566,419
----------
FINANCIAL (4.7%)
American General Corp. .................... 1,100 83,463
American Int'l. Group, Inc. ............... 3,156 341,243
Arden Realty Group ........................ 5,300 106,331
Bank of America Corp. ..................... 4,823 242,054
Boston Properties, Inc. ................... 2,400 74,700
Citigroup, Inc. ........................... 11,850 658,416
Compass Bancshares Inc., .................. 2,700 60,244
Cullen/Frost Bankers, Inc. ................ 2,600 66,950
Equity Res. Pptys. Tr. Co. ................ 2,600 110,988
Fannie Mae ................................ 2,100 131,119
Fleet Boston Financial Corp. .............. 3,600 125,325
HCC Insurance Holdings, Inc. .............. 5,100 67,256
Heller Financial, Inc. .................... 5,200 104,325
Kimco Realty Corp ......................... 2,700 91,463
Mack-Cali Realty Corp. .................... 3,700 96,431
Morgan Stanley Dean Witter ................ 2,000 285,500
Natl. Commerce Bancorp .................... 2,600 58,988
Providian Financial Corp. ................. 1,600 145,700
SL Green Realty Corp. ..................... 6,100 132,675
Spieker Pptys., Inc. ...................... 3,200 116,600
Vornado Rlty. Trust ....................... 3,200 104,000
Washington Mutual, Inc. ................... 4,300 111,800
Wells Fargo & Company ..................... 2,800 113,225
----------
3,428,796
----------
INDUSTRIAL (6.2%)
Applied Materials, Inc.* .................. 5,900 747,456
Asyst Technologies, Inc.* ................. 1,600 104,900
BISYS Group, Inc.* ........................ 2,200 143,550
Caterpillar, Inc. ......................... 2,000 94,125
Citadel Communications, Corp.* ............ 1,700 110,288
Coinstar, Inc.* ........................... 3,400 47,600
CommScope, Inc.* .......................... 1,900 76,594
Computer Sciences Corp.* .................. 1,700 160,863
Conexant Systems, Inc.* ................... 3,400 225,675
Covenant Transport, Inc. Cl A* ............ 4,600 79,925
CSG Systems Intl., Inc.* .................. 1,900 75,763
Dycom Industries, Inc.* ................... 2,200 96,938
Emerson Electric Co. ...................... 1,300 74,588
EOG Resources, Inc. ....................... 2,800 49,175
FactSet Research Systems, Inc. ............ 2,000 159,250
Forward Air Corporation* .................. 5,100 221,213
Honeywell International, Inc. ............. 1,800 103,838
Hooper Holmes, Inc. ....................... 8,150 209,863
Kent Electronics Corp.* ................... 3,100 70,525
Kulicke and Soffa Industries, Inc.* ....... 2,200 93,638
Mettler-Toledo International, Inc.* ....... 2,200 84,013
Official Payments Corp.* .................. 1,300 67,600
Pittway Corp. ............................. 700 31,369
PRI Automation, Inc.* ..................... 2,100 140,963
Radio One, Inc.* .......................... 1,300 119,600
Salem Communications Corp. Cl A* .......... 1,700 38,463
SDL, Inc.* ................................ 800 174,400
Semtech Corp.* ............................ 4,200 218,925
Spartech Corp. ............................ 3,400 109,650
Swift Transportation Co., Inc.* ........... 4,500 79,313
Time Warner Telecom, Inc. Cl. A* .......... 2,500 124,844
Transocean Offshore, Inc. ................. 581 19,566
True North Communications, Inc. ........... 1,900 84,906
The accompanying notes are an integral part of these financial statements.
37
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (ALL AMERICA FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
Shares Value
------ -----
ACTIVE ASSETS (CONTINUED):
INDUSTRIAL (CONTINUED)
U.S. Xpress Enterprises, Inc. Cl A* ....... 4,600 $ 33,925
Varian Semiconductor Equipment
Associates, Inc.* ...................... 2,800 95,200
Williams Cos., Inc. ....................... 4,800 146,700
----------
4,515,204
----------
TECHNOLOGY (16.4%)
3Com Corp* ................................ 6,200 291,400
Altera Corp.* ............................. 3,600 178,425
ANTEC Corp.* .............................. 2,700 98,550
Applied Micro Circuits, Corp.* ............ 3,200 407,200
ASM Lithography Holding NV* ............... 1,900 216,125
AT&T Corp. ................................ 3,300 167,475
Atmel Corp.* .............................. 16,800 496,650
ATMI, Inc.* ............................... 2,700 89,269
Aware, Inc.* .............................. 1,300 47,288
Broadcom Corp.* ........................... 500 136,188
Business Objects S.A.-- Sp ADR* ........... 800 106,900
Ciena Corp.* .............................. 4,400 253,000
Cisco Systems, Inc.* ...................... 24,800 2,656,700
Compaq Computer Corp. ..................... 13,700 370,756
Critical Path, Inc.* ...................... 2,000 188,750
Dallas Semiconductor Corp. ................ 1,200 77,325
Digital Island, Inc.* ..................... 1,100 104,638
Dionex Corp.* ............................. 2,700 111,206
Documentum, Inc.* ......................... 1,000 59,875
E-Speed, Inc., Cl A* ...................... 3,000 106,688
Efficient Networks, Inc.* ................. 1,700 115,600
Emulex Corp.* ............................. 1,500 168,750
Exodus Communications, Inc.* .............. 1,600 142,100
Hewlett-Packard Co. ....................... 1,000 113,938
Intel Corp. ............................... 9,000 740,813
Intl. Business Machines Corp. ............. 1,600 172,800
Intuit, Inc.* ............................. 6,900 413,569
JDA Software Group, Inc.* ................. 6,800 111,350
Lattice Semiconductor Corp. ............... 2,000 94,250
Shares Value
------ -----
ACTIVE ASSETS (CONTINUED):
TECHNOLOGY (CONTINUED)
Legato Systems, Inc.* ..................... 3,600 $ 247,725
Linear Technology Corp. ................... 8,900 636,906
Manugistics Group, Inc.* .................. 3,000 96,938
Maxim Integrated Products, Inc.* .......... 13,800 651,188
Mcleod USA, Inc.* ......................... 2,400 141,300
Microchip Technology, Inc.* ............... 2,800 191,625
Microsoft Corp.* .......................... 1,700 198,453
Networks Associates, Inc.* ................ 4,700 125,431
Novellus Systems, Inc.* ................... 1,200 147,038
Parametric Technology Corp.* .............. 9,800 265,213
Protein Design Labs, Inc.* ................ 900 63,000
Sawtek, Inc.* ............................. 1,600 106,500
Vignette Corporation* ..................... 600 97,800
Vitesse Semiconductor Corp.* .............. 1,600 83,900
Waters Corp.* ............................. 1,800 95,400
Xerox Corp. ............................... 2,500 56,719
Xilinx, Inc.* ............................. 9,800 445,594
----------
11,888,308
----------
UTILITIES (2.0%)
El Paso Energy Corp. ...................... 2,700 104,794
GTE Corp. ................................. 2,200 155,238
Illinova Corp. ............................ 3,200 111,200
ITC DeltaCom, Inc.* ....................... 4,500 124,313
Kinder Morgan, Inc. ....................... 4,800 96,900
MCI WorldCom, Inc.* ....................... 2,700 143,269
MDU Resources Group ....................... 3,900 78,000
Montana Pwr. Co. .......................... 3,100 111,794
NSTAR ..................................... 2,205 89,303
SBC Communications, Inc. .................. 2,300 112,125
SIGCORP, Inc. ............................. 3,100 70,525
Western Wireless Corp. Cl A* .............. 2,700 180,225
----------
1,377,686
----------
TOTAL ACTIVE ASSETS - COMMON STOCKS
(Cost: $19,036,464) 39.6% ..................................... 28,659,317
----------
- ----------
* Non-income producing security.
The accompanying notes are an integral part of these financial statements.
38
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (ALL AMERICA FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
<TABLE>
<CAPTION>
Face
Rate Maturity Amount Value
---- -------- ------ -----
<S> <C> <C> <C> <C>
ACTIVE ASSETS (CONTINUED):
SHORT-TERM DEBT SECURITIES:
COMMERCIAL PAPER (1.7%)
Abbott Laboratories ................ 6.25% 01/13/00 $998,000 $995,917
Countrywide Credit Industries Inc. . 5.25 01/07/00 200,000 199,825
-----------
1,195,742
-----------
TOTAL ACTIVE ASSETS SHORT-TERM DEBT SECURITIES
(Cost: $1,195,742) 1.7% ............................................ 1,195,742
-----------
TOTAL ACTIVE ASSETS
(Cost: $20,232,206) 41.3% .......................................... 29,855,059
-----------
TOTAL INVESTMENTS
(Cost: $42,808,697) 100.0% ......................................... $72,345,739
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
39
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (EQUITY INDEX FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES
December 31, 1999
Shares Value
------ -----
INDEXED ASSETS:
COMMON STOCKS
3Com Corp. ................................ 778 $ 36,566
Abbott Laboratories ....................... 3,474 126,150
Adaptec, Inc. ............................. 236 11,770
ADC Telecommunications, Inc. .............. 342 24,816
Adobe Systems, Inc. ....................... 272 18,292
Advanced Micro Devices, Inc. .............. 336 9,723
AES Corp. ................................. 470 35,132
Aetna, Inc. ............................... 342 19,088
Aflac, Inc. ............................... 607 28,643
Air Products & Chemicals, Inc. ............ 524 17,587
Alberto-Culver Co. Cl A ................... 125 3,227
Albertson's, Inc. ......................... 960 30,960
Alcan Aluminum Ltd. ....................... 507 20,882
ALCOA, Inc. ............................... 837 69,471
Allegheny Technologies, Inc. .............. 213 4,779
Allergan, Inc. ............................ 294 14,626
Allied Waste Industries, Inc. ............. 430 3,789
Allstate Corp. ............................ 1,823 43,752
Alltel Corp. .............................. 697 57,633
Alza Corp. ................................ 232 8,033
Amerada Hess Corp. ........................ 201 11,407
Ameren Corp. .............................. 305 9,989
America Online, Inc. ...................... 5,061 381,789
American Electric Power,Inc ............... 442 14,199
American Express Co. ...................... 1,026 170,572
American General Corp. .................... 561 42,566
American Greetings Corp. Cl A ............. 149 3,520
American Home Products Corp. .............. 2,945 116,143
American Int'l. Group, Inc. ............... 3,491 377,464
Amgen, Inc. ............................... 2,329 139,886
AMR Corp. ................................. 340 22,780
Amsouth Bancorporation .................... 899 17,362
Anadarko Petroleum Corp. .................. 283 9,657
Analog Devices, Inc. ...................... 395 36,735
Andrew Corp. .............................. 184 3,484
Anheuser-Busch Cos., Inc. ................. 1,068 75,694
Aon Corp. ................................. 585 23,400
Apache Corp. .............................. 260 9,604
Apple Computer, Inc. ...................... 367 37,732
Applied Materials, Inc. ................... 857 108,571
Archer-Daniels-Midland Co. ................ 1,372 16,721
Armstrong World Inds., Inc. ............... 89 2,970
Ashland, Inc. ............................. 166 5,468
Associates First Capital Corp. Cl A ....... 1,663 45,629
AT&T Corp. ................................ 7,206 365,704
Atlantic Richfield Co. .................... 736 63,664
Autodesk, Inc. ............................ 132 4,455
Automatic Data Processing, Inc ............ 1,413 76,125
AutoZone, Inc. ............................ 334 10,792
Avery Dennison Corp. ...................... 252 18,364
Avon Products, Inc. ....................... 546 18,018
Baker Hughes, Inc. ........................ 751 15,818
Ball Corp ................................. 69 2,717
Bank of America Corp. ..................... 3,850 193,222
Bank of New York Co., Inc. ................ 1,679 67,160
Bank One Corp. ............................ 2,586 82,914
Bard (C.R.), Inc. ......................... 114 6,042
Barrick Gold Corp. ........................ 891 15,760
Bausch & Lomb, Inc. ....................... 125 8,555
Baxter International, Inc. ................ 665 41,770
BB & T Corp. .............................. 730 19,984
Bear Stearns Cos., Inc. ................... 270 11,542
Becton Dickinson & Co. .................... 572 15,301
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Bed Bath & Beyond, Inc. ................... 319 $ 11,085
Bell Atlantic Corp. ....................... 3,502 215,592
BellSouth Corp. ........................... 4,245 198,719
Bemis, Inc. ............................... 117 4,080
Best Buy, Inc. ............................ 465 23,337
Bestfoods ................................. 637 33,482
Bethlehem Steel Corp. ..................... 299 2,504
Biomet, Inc. .............................. 250 10,000
Black & Decker Corp. ...................... 196 10,241
Block (H. & R.), Inc. ..................... 217 9,494
BMC Software, Inc. ........................ 546 43,646
Boeing Co. ................................ 2,107 87,572
Boise Cascade Corp. ....................... 125 5,062
Boston Scientific Corp. ................... 944 20,650
Briggs & Stratton Corp. ................... 52 2,788
Bristol-Myers Squibb Co. .................. 4,473 287,111
Brown-Forman Corp. Cl B ................... 152 8,702
Brunswick Corp. ........................... 204 4,539
Burlington Northern Santa Fe .............. 1,030 24,977
Burlington Resources, Inc. ................ 497 16,432
Cabletron Systems, Inc. ................... 398 10,348
Campbell Soup Co. ......................... 991 38,339
Capital One Financial Corp. ............... 451 21,733
Cardinal Health, Inc. ..................... 622 29,778
Carnival Corp. ............................ 1,401 66,985
Carolina Power & Light Co. ................ 355 10,805
Caterpillar, Inc. ......................... 812 38,215
CBS Corp. ................................. 1,741 111,315
Cendant Corp. ............................. 1,603 42,580
Centex Corp. .............................. 132 3,259
Central & South West Corp. ................ 486 9,720
CenturyTel, Inc. .......................... 319 15,113
Ceridian Corp. ............................ 331 7,137
Champion International Corp. .............. 213 13,193
Charles Schwab Corp. ...................... 1,868 71,684
Chase Manhattan Corp. ..................... 1,860 144,499
Chevron Corp. ............................. 1,498 129,764
Chubb Corp. ............................... 402 22,638
CIGNA Corp. ............................... 425 34,239
Cincinnati Financial Corp. ................ 377 11,758
CINergy Corp. ............................. 363 8,757
Circuit City Group, Inc. .................. 459 20,684
Cisco Systems, Inc. ....................... 7,376 790,154
Citigroup, Inc. ........................... 7,603 422,442
Citrix Systems, Inc. ...................... 201 24,723
Clear Channel Communications, Inc. ........ 771 68,812
Clorox Co. ................................ 539 27,152
CMS Energy Corp. .......................... 270 8,421
Coastal Corp. ............................. 487 17,258
Coca-Cola Co. ............................. 5,570 324,452
Coca-Cola Enterprises, Inc. ............... 970 19,521
Colgate-Palmolive Co. ..................... 1,331 86,515
Columbia Energy Group ..................... 186 11,765
Columbia/HCA Healthcare Corp. ............. 1,289 37,784
Comcast Corp. Cl A ........................ 1,711 86,512
Comerica, Inc. ............................ 357 16,667
Compaq Computer Corp. ..................... 3,834 103,758
Computer Associates Intl., Inc ............ 1,228 85,883
Computer Sciences Corp. ................... 365 34,538
Compuware Corp. ........................... 816 30,396
Comverse Technology Inc. .................. 160 23,160
Conagra, Inc. ............................. 1,115 25,157
Conoco, Inc. Cl B ......................... 1,432 35,621
The accompanying notes are an integral part of these financial statements.
40
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (EQUITY INDEX FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Conseco, Inc. ............................. 747 $ 13,353
Consolidated Edison, Inc. ................. 505 17,422
Consolidated Natural Gas Co. .............. 213 13,832
Consolidated Stores Corp. ................. 244 3,965
Constellation Energy Group, Inc. .......... 342 9,918
Cooper Industries, Inc. ................... 210 8,492
Cooper Tire & Rubber Co. .................. 169 2,630
Coors (Adolph) Co. Cl B ................... 81 4,252
Corning, Inc. ............................. 559 72,076
Costco Wholesale Corp. .................... 504 45,990
Countrywide Credit Industries, Inc. ....... 251 6,338
Crane Co. ................................. 153 3,041
Crown Cork & Seal, Inc. ................... 272 6,086
CSX Corp. ................................. 497 15,593
Cummins Engine Co., Inc. .................. 93 4,493
CVS Corp. ................................. 895 35,744
Dana Corp. ................................ 369 11,047
Danaher Corp. ............................. 316 15,247
Darden Restaurants, Inc. .................. 297 5,383
Dayton-Hudson Corp. ....................... 1,010 74,172
Deere & Co. ............................... 534 23,162
Dell Computer Corp. ....................... 5,730 292,230
Delphi Automotive Systems Corp ............ 1,290 20,317
Delta Air Lines, Inc. ..................... 315 15,691
Deluxe Corp. .............................. 173 4,747
Dillard's Inc. Cl A ....................... 238 4,805
Disney (Walt) Co. ......................... 4,651 136,042
Dollar General Corp. ...................... 600 13,650
Dominion Resources, Inc. .................. 438 17,191
Donnelley (R.R.) & Sons Co. ............... 290 7,196
Dover Corp. ............................... 476 21,598
Dow Chemical Co. .......................... 503 67,213
Dow Jones & Co., Inc. ..................... 201 13,668
DTE Energy Co. ............................ 323 10,134
Du Pont (E.I.) de Nemours & Co ............ 2,356 155,234
Duke Energy Corp. ......................... 833 41,754
Dun & Bradstreet Corp. .................... 368 10,856
Eastern Enterprises ....................... 59 3,389
Eastman Chemical Co. ...................... 176 8,393
Eastman Kodak Co. ......................... 723 47,899
Eaton Corp. ............................... 159 11,547
Ecolab, Inc. .............................. 288 11,268
Edison International ...................... 793 20,767
El Paso Energy Corp. ...................... 520 20,182
Electronic Data Systems Corp. ............. 1,062 71,088
EMC Corp. ................................. 2,314 252,804
Emerson Electric Co. ...................... 992 56,916
Engelhard Corp. ........................... 288 5,436
Enron Corp. ............................... 1,630 72,331
Entergy Corp. ............................. 564 14,523
Equifax, Inc. ............................. 320 7,540
Exxon Mobil Corp. ......................... 7,788 627,421
Fannie Mae ................................ 2,311 144,293
FDX Corp. ................................. 679 27,797
Federated Department Stores, Inc. ......... 467 23,613
FHLMC ..................................... 1,588 74,735
Fifth Third Bancorp ....................... 689 50,555
First Data Corp. .......................... 945 46,600
First Union Corp. ......................... 2,227 73,073
Firstar Corp. ............................. 2,210 46,686
FirstEnergy Corp. ......................... 528 11,979
FleetBoston Financial Corp. ............... 2,065 71,888
Fleetwood Enterprises, Inc. ............... 78 1,609
Florida Progress Corp. .................... 216 9,139
Fluor Corp. ............................... 168 7,707
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
FMC Corp. ................................. 70 $ 4,012
Ford Motor Co. ............................ 2,724 145,564
Fort James Corp. .......................... 505 13,824
Fortune Brands, Inc. ...................... 380 12,564
Foster Wheeler Corp. ...................... 91 808
FPL Group, Inc. ........................... 403 17,253
Franklin Resources, Inc. .................. 576 18,468
Freeport-McMoran Copper &
Gold, Inc.Cl B .......................... 373 7,880
Gannett Co., Inc. ......................... 639 52,118
Gap, Inc. ................................. 1,958 90,068
Gateway, Inc. ............................. 715 51,525
General Dynamics Corp. .................... 455 24,001
General Electric Co. ...................... 7,399 1,144,995
General Instrument Corp. .................. 396 33,660
General Mills, Inc. ....................... 698 24,953
General Motors Corp. ...................... 1,471 106,923
Genuine Parts Co. ......................... 400 9,925
Georgia-Pacific Group ..................... 392 19,894
Gillette Co. .............................. 2,419 99,633
Global Crossing Ltd. ...................... 1,711 85,550
Golden West Financial Corp. ............... 381 12,763
Goodrich (B.F.) Co. ....................... 244 6,710
Goodyear Tire & Rubber Co. ................ 357 10,063
GPU, Inc. ................................. 279 8,353
Grainger (W.W.), Inc. ..................... 207 9,897
Great Atlantic & Pac. Tea, Inc. ........... 85 2,369
Great Lakes Chemical Corp. ................ 132 5,041
GTE Corp. ................................. 2,192 154,673
Guidant Corp. ............................. 690 32,430
Halliburton Holdings Co. .................. 1,008 40,572
Harcourt General, Inc. .................... 158 6,359
Harrah's Entertainment, Inc. .............. 293 7,746
Hartford Financial Svs Gp, Inc ............ 516 24,445
Hasbro, Inc. .............................. 437 8,330
HealthSouth Corp. ......................... 871 4,682
Heinz (H.J.) Co. .......................... 818 32,567
Helmerich & Payne, Inc. ................... 110 2,399
Hercules, Inc. ............................ 235 6,551
Hershey Food Corp. ........................ 310 14,725
Hewlett-Packard Co. ....................... 2,313 263,537
Hilton Hotels Corp. ....................... 842 8,104
Home Depot, Inc. .......................... 5,192 355,942
Homestake Mining Co. ...................... 594 4,641
Honeywell International, Inc. ............. 1,802 103,953
Household International, Inc. ............. 1,060 39,485
Humana, Inc. .............................. 383 3,136
Huntington Bancshares, Inc. ............... 526 12,558
Ikon Office Solutions, Inc. ............... 341 2,323
Illinois Tool Works, Inc. ................. 685 46,280
IMS Health, Inc. .......................... 714 19,412
Inco Ltd. ................................. 438 10,293
Ingersoll Rand Co. ........................ 377 20,759
Intel Corp. ............................... 7,554 621,789
International Business
Machines Corp. .......................... 4,065 439,020
International Paper Co. ................... 944 53,277
Interpublic Group of Cos., Inc. ........... 644 37,151
Intl. Flavors & Fragrances ................ 236 8,909
ITT Industries, Inc. ...................... 195 6,520
Jefferson-Pilot Corp. ..................... 236 16,107
Johnson & Johnson ......................... 3,136 292,040
Johnson Controls, Inc. .................... 189 10,749
Jostens, Inc. ............................. 76 1,848
Kansas City Southern Inds., Inc. .......... 244 18,209
The accompanying notes are an integral part of these financial statements.
41
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (EQUITY INDEX FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Kaufman & Broad Home Corp. ................ 107 $ 2,588
Kellogg Co. ............................... 925 28,502
Kerr-McGee Corp. .......................... 192 11,904
KeyCorp ................................... 1,025 22,678
Kimberly Clark Corp. ...................... 1,217 79,409
KLA-Tencor Corp. .......................... 195 21,718
Kmart Corp. ............................... 1,127 11,340
Knight-Ridder, Inc. ....................... 185 11,008
Kohl's Corp. .............................. 372 26,854
Kroger Co. ................................ 1,894 35,749
Legget & Platt, Inc. ...................... 449 9,625
Lehman Brothers Holdings, Inc. ............ 274 23,204
Lexmark Intl Group Inc. Cl A .............. 286 25,883
Lilly (Eli) & Co. ......................... 2,459 163,524
Limited, Inc. ............................. 489 21,180
Lincoln National Corp. .................... 450 18,000
Liz Claiborne, Inc. ....................... 140 5,268
Lockheed Martin Corp. ..................... 902 19,731
Loews Corp. ............................... 242 14,686
Longs Drug Stores Corp. ................... 87 2,246
Louisiana-Pacific Corp. ................... 242 3,449
Lowe's Companies, Inc. .................... 871 52,042
LSI Logic Corp. ........................... 337 22,748
Lucent Technologies, Inc. ................. 7,065 528,550
Mallinckrodt, Inc. ........................ 159 5,058
Manor Care, Inc. .......................... 247 3,952
Marriott International, Inc. Cl A ......... 568 17,928
Marsh & McLennan Cos., Inc. ............... 603 57,700
Masco Corp. ............................... 1,012 25,680
Mattel, Inc. .............................. 960 12,600
May Department Stores Co. ................. 763 24,607
Maytag Corp. .............................. 196 9,408
MBIA, Inc. ................................ 221 11,672
MBNA Corp. ................................ 1,831 49,895
McDermott International, Inc. ............. 132 1,196
McDonald's Corp. .......................... 3,053 123,074
McGraw-Hill Cos., Inc. .................... 449 27,670
MCI WorldCom, Inc. ........................ 6,417 340,502
McKesson HBOC, Inc. ....................... 642 14,485
Mead Corp. ................................ 227 9,860
MediaOne Group, Inc. ...................... 1,385 106,385
Medtronic, Inc. ........................... 2,680 97,653
Mellon Financial Corp. .................... 1,174 39,989
Merck & Co., Inc. ......................... 5,271 353,486
Meredith Corp. ............................ 116 4,836
Merrill Lynch & Co., Inc. ................. 844 70,474
MGIC Investment Corp. ..................... 244 14,686
Micron Technology, Inc. ................... 609 47,350
Microsoft Corp. ........................... 11,655 1,360,721
Milacron, Inc. ............................ 82 1,261
Millipore Corp. ........................... 98 3,785
Minnesota Mining & Mfg. Co. ............... 920 90,045
Mirage Resorts, Inc. ...................... 454 6,952
Molex Inc. ................................ 354 20,067
Monsanto Co. .............................. 1,447 51,549
Morgan (J.P.) & Co., Inc. ................. 394 49,890
Morgan Stanley Dean Witter & Co. .......... 1,256 179,294
Motorola, Inc. ............................ 1,387 204,236
Nabisco Group Holdings Corp. .............. 745 7,916
NACCO Industries, Inc. Cl A ............... 18 1,000
National City Corp. ....................... 1,412 33,447
National Semiconductor Corp. .............. 384 16,440
National Service Industries ............... 92 2,714
Navistar International Corp. .............. 147 6,964
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Network Appliance, Inc. ................... 320 $ 26,580
New Century Energies, Inc. ................ 254 7,715
New York Times Co. Cl A ................... 391 19,208
Newell Rubbermaid, Inc. ................... 644 18,676
Newmont Mining Corp. ...................... 383 9,384
Nextel Communications, Inc. Cl A .......... 826 85,181
Niagara Mohawk Holdings, Inc. ............. 428 5,965
Nicor, Inc. ............................... 106 3,445
Nike, Inc. Cl B ........................... 642 31,819
Nordstrom, Inc. ........................... 316 8,275
Norfolk Southern Corp. .................... 869 17,815
Nortel Networks Corp ...................... 3,031 306,131
Northern States Power Co. ................. 352 6,864
Northern Trust Corp. ...................... 494 26,182
Northrop Grumman Corp. .................... 153 8,272
Novell, Inc. .............................. 765 30,552
Nucor Corp. ............................... 195 10,688
Occidental Petroleum Corp. ................ 829 17,927
Office Depot, Inc. ........................ 742 8,116
Old Kent Financial Corp. .................. 271 9,587
Omnicom Group, Inc. ....................... 397 39,700
Oneok, Inc. ............................... 70 1,759
Oracle Corp. .............................. 3,211 359,833
Owens Corning ............................. 121 2,337
Owens-Illinois, Inc. ...................... 356 8,922
Paccar, Inc. .............................. 174 7,710
Pactiv Corp. .............................. 389 4,133
Paine Webber Group, Inc. .................. 324 12,575
Pall Corp. ................................ 277 5,973
Parametric Technology Corp. ............... 615 16,643
Parker Hannifin Corp. ..................... 241 12,366
Paychex, Inc. ............................. 562 22,480
PE Corp-PE Biosystems Group ............... 233 28,033
Peco Energy Co. ........................... 426 14,804
Penney (J.C.) Co., Inc. ................... 602 12,002
Peoples Energy Corp. ...................... 79 2,647
Peoplesoft, Inc. .......................... 555 11,828
Pep Boys-Manny, Moe & Jack ................ 117 1,068
PepsiCo, Inc. ............................. 3,283 115,726
Perkin Elmer, Inc. ........................ 100 4,169
Pfizer, Inc. .............................. 8,730 283,179
PG & E Corp. .............................. 877 17,979
Pharmacia & Upjohn, Inc. .................. 1,157 52,065
Phelps Dodge Corp. ........................ 202 13,577
Phillip Morris Cos., Inc. ................. 5,336 123,729
Phillips Petroleum Co. .................... 578 27,166
Pinnacle West Capital Corp. ............... 194 5,929
Pitney Bowes, Inc. ........................ 611 29,519
Placer Dome, Inc. ......................... 743 7,987
PNC Bank Corp. ............................ 663 29,504
Polaroid Corp. ............................ 98 1,844
Potlatch Corp. ............................ 64 2,856
PP&L Resources, Inc. ...................... 324 7,412
PPG Industries, Inc. ...................... 396 24,775
Praxair, Inc. ............................. 364 18,314
Price (T. Rowe) & Associates, Inc. ........ 277 10,232
Proctor & Gamble Co. ...................... 2,964 324,743
Progressive Corp. of Ohio ................. 161 11,773
Providian Financial Corp. ................. 315 28,685
Public Svc. Enterprise Group, Inc. ........ 501 17,441
Pulte Corp. ............................... 96 2,160
Quaker Oats Co. ........................... 303 19,884
Qualcomm, Inc. ............................ 1,468 258,735
Quintiles Transnational Corp. ............. 262 4,896
The accompanying notes are an integral part of these financial statements.
42
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (EQUITY INDEX FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Ralston Purina Group ...................... 739 $ 20,600
Raytheon Co. Cl B ......................... 771 20,480
Reebok International Ltd. ................. 126 1,032
Regions Financial Corp. ................... 511 12,839
Reliant Energy, Inc. ...................... 676 15,464
Republic New York Corp. ................... 233 16,776
Reynolds Metals Co. ....................... 143 10,957
Rite-Aid Corp. ............................ 591 6,612
Rockwell Intl., Corp. ..................... 437 20,921
Rohm & Haas Co. ........................... 497 20,222
Rowan Cos., Inc. .......................... 184 3,991
Royal Dutch Petroleum Co. N.Y ............. 4,836 292,276
Russell Corp. ............................. 76 1,273
Ryder System, Inc. ........................ 147 3,592
Safeco Corp. .............................. 292 7,264
Safeway, Inc. ............................. 1,165 41,430
Sara Lee Corp. ............................ 2,063 45,515
SBC Communications, Inc. .................. 7,693 375,034
Schering-Plough Corp. ..................... 3,313 139,767
Schlumberger, Ltd. ........................ 1,251 70,369
Scientific-Atlanta, Inc. .................. 168 9,345
Scottish Power plc -- ADR ................. * 27
Seagate Technology ........................ 476 22,164
Seagram Ltd. .............................. 988 44,398
Sealed Air Corp. New ...................... 186 9,637
Sears Roebuck & Co. ....................... 869 26,450
Sempra Energy ............................. 549 9,539
Service Corp. International ............... 621 4,308
Shared Medical Systems Corp. .............. 59 3,005
Sherwin-Williams Co. ...................... 387 8,127
Sigma-Aldrich Corp. ....................... 224 6,734
Silicon Graphics, Inc. .................... 431 4,229
SLM Holding Corp. ......................... 361 15,252
Snap-On, Inc. ............................. 145 3,852
Solectron Corp. ........................... 669 63,639
Southern Co. .............................. 1,518 35,673
Southtrust Corp. .......................... 382 14,444
Southwest Airlines Co. .................... 1,151 18,632
Springs Industries, Inc. .................. 40 1,598
Sprint Corp. (FON Group) .................. 1,981 133,346
Sprint Corp. (PCS Group) .................. 972 99,630
St. Jude Medical, Inc. .................... 187 5,739
St. Paul Companies, Inc. .................. 518 17,450
Stanley Works ............................. 198 5,965
Staples, Inc. ............................. 1,061 22,016
State Street Corp. ........................ 368 26,887
Summit Bancorp ............................ 404 12,373
Sun Microsystems, Inc. .................... 3,534 273,664
Sunoco, Inc. .............................. 201 4,724
Suntrust Banks, Inc. ...................... 735 50,577
Supervalu, Inc. ........................... 309 6,180
Synovus Financial Corp. ................... 620 12,323
Sysco Corp. ............................... 756 29,909
Tandy Corp. ............................... 441 21,692
Tektronix, Inc. ........................... 104 4,043
Tellabs, Inc. ............................. 894 57,384
Temple-Inland, Inc. ....................... 124 8,176
Tenet Healthcare Corp. .................... 709 16,662
Teradyne, Inc. ............................ 391 25,806
Texaco, Inc. .............................. 1,262 68,542
Texas Instruments, Inc. ................... 1,794 173,794
Texas Utilities Co. ....................... 631 22,440
Shares Value
------ -----
INDEXED ASSETS (CONTINUED):
COMMON STOCKS (CONTINUED)
Textron, Inc. ............................. 334 $ 25,614
Thermo Electron Corp. ..................... 354 5,310
Thomas & Betts Corp. ...................... 126 4,016
Time Warner, Inc. ......................... 2,901 210,141
Times Mirror Co. .......................... 136 9,112
Timken Co. ................................ 138 2,820
TJX Companies ............................. 725 14,817
Torchmark Corp. ........................... 296 8,603
Tosco Corp. ............................... 348 9,461
Toys R Us, Inc. ........................... 559 8,001
Transocean Sedco Forex, Inc. .............. 242 8,159
Tribune Co. ............................... 541 29,789
Tricon Global Restaurants Inc. ............ 351 13,557
TRW, Inc. ................................. 277 14,387
Tupperware Corp. .......................... 128 2,168
Tyco International Ltd. ................... 3,821 148,541
U.S. Bancorp .............................. 1,641 39,076
U.S. West, Inc. ........................... 1,152 82,944
Unicom Corp. .............................. 496 16,616
Unilever N.V .............................. 1,305 71,041
Union Carbide Corp. ....................... 296 19,758
Union Pacific Corp. ....................... 566 24,692
Union Pacific Resources Group, Inc. ....... 575 7,331
Union Planters Corp. ...................... 326 12,857
Unisys Corp. .............................. 699 22,324
United Healthcare Corp. ................... 396 21,038
United Technologies Corp. ................. 1,100 71,500
Unocal Corp. .............................. 554 18,594
UNUMProvident Corp. ....................... 545 17,474
US Airways Group Inc. ..................... 164 5,258
UST, Inc. ................................. 390 9,823
USX-Marathon Group ........................ 705 17,405
USX-U.S. Steel Group ...................... 197 6,501
V F Corp. ................................. 267 8,010
Viacom, Inc. Cl B ......................... 1,591 96,156
Vulcan Materials Co. ...................... 224 8,946
W.R. Grace & Co. .......................... 163 2,262
Wachovia Corp. ............................ 462 31,416
Wal-Mart Stores, Inc. ..................... 10,036 693,739
Walgreen Co. .............................. 2,292 67,041
Warner-Lambert Co. ........................ 1,952 159,942
Washington Mutual, Inc. ................... 1,322 34,372
Waste Management, Inc. .................... 1,414 24,303
Watson Pharmaceuticals, Inc. .............. 212 7,592
Wellpoint Health Networks Inc. Cl A ....... 150 9,891
Wells Fargo & Company ..................... 3,704 149,781
Wendy's International, Inc. ............... 277 5,713
Westvaco Corp. ............................ 223 7,275
Weyerhaeuser Co. .......................... 538 38,635
Whirlpool Corp. ........................... 169 10,996
Willamette Industries, Inc. ............... 247 11,470
Williams Cos., Inc. ....................... 992 30,318
Winn-Dixie Stores, Inc. ................... 331 7,923
Worthington Industries, Inc. .............. 206 3,412
Wrigley (Wm.) Jr. Co. ..................... 258 21,398
Xerox Corp. ............................... 1,514 34,349
Xilinx, Inc. .............................. 722 32,828
Yahoo!, Inc. .............................. 594 257,016
----------
TOTAL INDEXED ASSETS--COMMON STOCKS
(Cost: $25,839,134) 94.6% .................................... 27,861,578
----------
- ----------
* Fractional share attributable to Corporate Action.
The accompanying notes are an integral part of these financial statements.
43
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (EQUITY INDEX FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
<TABLE>
<CAPTION>
Face
Rate Maturity Amount Value
---- -------- ------ -----
<S> <C> <C> <C> <C>
Short-Term Debt Securities:
U.S. GOVERNMENT (0.3%)
U.S. Treasury Bill (a) ............. 5.13% 01/20/00 $ 100,000 $ 99,728
-----------
AGENCIES (1.5%)
Federal Home Loan Bank ............. 4.75 01/12/00 439,000 438,363
-----------
COMMERCIAL PAPER (3.6%)
Novartis Finance Corp. ............. 5.15 01/24/00 550,000 548,190
Snap-On, Inc. ...................... 4.00 01/03/00 500,000 499,889
-----------
1,048,079
-----------
TOTAL SHORT-TERM DEBT SECURITIES
(Cost: $1,586,170) 5.4% ................................. 1,586,170
-----------
TOTAL INVESTMENTS
(Cost: $27,425,304) 100.0% .............................. $29,447,748
===========
</TABLE>
- ----------
FUTURES CONTRACTS OUTSTANDING AS OF DECEMBER 31, 1999:
<TABLE>
<CAPTION>
Expiration Underlying Face Unrealized
Date Amount at Value Gain
------------- --------------- ----------
PURCHASED
<S> <C> <C> <C>
4 S&P 500 Stock Index Futures Contracts March 2000 $1,484,200 $48,763
========== =======
</TABLE>
The face value of futures purchased and outstanding as percentage of total
investment in securities: 5.0%.
- ----------
(a) The security has been segregated to cover initial requirements on open
futures contracts.
The accompanying notes are an integral part of these financial statements.
44
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (BOND FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES
December 31, 1999
<TABLE>
<CAPTION>
Face
Rate Maturity Amount Value
---- -------- ------ -----
<S> <C> <C> <C> <C>
LONG-TERM DEBT SECURITIES:
U.S. GOVERMENT (18.8%)
U.S. Treasury Bond ............... 7.13% 02/15/23 $1,500,000 $1,561,635
U.S. Treasury Note ............... 6.63 04/30/02 500,000 503,830
U.S. Treasury Note ............... 6.50 05/15/05 3,250,000 3,251,007
----------
5,316,472
----------
AGENCIES/OTHER (11.4%)
FHLMC ............................ 8.00 07/15/06 187,312 190,180
FHLMC ............................ 6.50 10/15/06 178,675 177,781
FHLMC ............................ 7.63 09/09/09 500,000 493,830
FNMA ............................. 7.00 11/25/05 422,106 421,051
FNMA ............................. 7.00 10/25/07 1,000,000 993,430
Republic of Iceland .............. 6.13 02/01/04 1,000,000 955,160
----------
3,231,432
----------
BASIC MATERIALS (5.5%)
Georgia-Pacific (Timber Group) ... 8.63 04/30/25 250,000 245,353
Millennium America Inc. .......... 7.63 11/15/26 1,000,000 831,680
Praxair, Inc. .................... 6.90 11/01/06 500,000 472,410
----------
1,549,443
----------
CONSUMER, CYCLICAL (9.3%)
Fruit of the Loom, Inc. .......... 7.00 03/15/11 250,000 56,250
Fruit of the Loom, Inc. .......... 7.38 11/15/23 250,000 86,250
Oakwood Homes Corp. .............. 8.13 03/01/09 1,000,000 920,869
Polaroid Corp. ................... 7.25 01/15/07 250,000 213,115
Pulte Corp. ...................... 7.63 10/15/17 500,000 426,050
Tommy Hilfiger USA, Inc. ......... 6.50 06/01/03 500,000 474,155
Venator Group, Inc. .............. 7.00 10/15/02 500,000 455,000
----------
2,631,689
----------
CONSUMER, NON-CYCLICAL (10.3%)
Bausch & Lomb, Inc. .............. 6.75 12/15/04 500,000 478,905
Bausch & Lomb, Inc. .............. 6.38 08/01/03 500,000 484,495
Kellwood, Co. .................... 7.88 07/15/09 1,000,000 911,820
Supervalu, Inc. .................. 8.88 11/15/22 1,000,000 1,051,210
----------
2,926,430
----------
ENERGY (5.2%)
Columbia Gas Systems, Inc. ....... 6.61 11/28/02 1,000,000 975,020
Arco Chemical Co. ................ 10.25 11/01/10 500,000 493,715
----------
1,468,735
----------
FINANCIAL (17.5%)
Bear Stearns Cos., Inc. .......... 6.63 10/01/04 1,000,000 959,120
Chase Manhattan Corp. ............ 6.88 12/12/12 1,000,000 963,410
Executive Risk, Inc. ............. 7.13 12/15/07 500,000 480,485
First American Financial ......... 7.55 04/01/28 500,000 428,660
Fremont Gen Corp. ................ 7.70 03/17/04 500,000 432,810
Harleysville Group Inc. .......... 6.75 11/15/03 250,000 241,190
Lehman Brothers Holdings, Inc. ... 0.00 07/28/28 1,000,000 88,210
Morgan (J.P.) & Co., Inc. ........ 0.00 04/15/27 2,500,000 241,125
Nationwide Health Properties, Inc. 7.90 11/20/06 500,000 432,510
</TABLE>
The accompanying notes are an integral part of these financial statements.
45
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (BOND FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)
December 31, 1999
<TABLE>
<CAPTION>
Face
Rate Maturity Amount Value
---- -------- ------ -----
<S> <C> <C> <C> <C>
LONG-TERM DEBT SECURITIES (CONTINUED):
FINANCIAL (CONTINUED)
Rank Group Financial, Inc. ........................... 6.75% 11/30/04 $ 500,000 $ 462,945
Triad Guaranty, Inc. ................................. 7.90 01/15/28 250,000 229,350
-----------
4,959,815
-----------
INDUSTRIAL (12.2%)
Clark Equipment Co. .................................. 8.35 05/15/23 500,000 515,500
Geon Co. ............................................. 7.50 12/15/15 250,000 227,765
Owens Corning ........................................ 7.00 03/15/09 1,000,000 879,970
Thermo Electron Corp. ................................ 4.25 01/01/03 1,000,000 843,750
Williams Cos., Inc. .................................. 6.50 11/15/02 1,000,000 976,000
-----------
3,442,985
-----------
UTILITIES (1.7%)
UtiliCorp United, Inc ................................ 8.00 03/01/23 500,000 488,815
-----------
TOTAL LONG-TERM DEBT SECURITIES (Cost: $27,594,423) 91.9% ......................................... 26,015,816
-----------
SHORT-TERM DEBT SECURITIES:
AGENCIES (1.6%)
Federal Home Loan Bank ............................... 4.75 01/12/00 447,000 446,351
-----------
COMMERCIAL PAPER (6.5%)
Abbott Laboratories .................................. 6.25 01/13/00 696,000 694,547
General Electric Capital Corp. ....................... 6.33 01/18/00 400,000 398,801
UBS Finance (Delw.) Inc. ............................. 4.00 01/03/00 753,000 752,833
-----------
1,846,181
-----------
TOTAL SHORT-TERM DEBT SECURITIES (Cost $2,292,532) 8.1% ........................................... 2,292,532
-----------
TOTAL INVESTMENTS 100.0% (Cost: $29,886,955) ...................................................... $28,308,348
===========
</TABLE>
- ----------
Abbreviations: FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
The accompanying notes are an integral part of these financial statements.
46
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC. (MONEY MARKET FUND)
PORTFOLIO OF INVESTMENTS IN SECURITIES
December 31, 1999
<TABLE>
<CAPTION>
Discount Face
Rating* Rate Maturity Amount Value
------- ---- -------- ------ -----
<S> <C> <C> <C> <C> <C>
SHORT-TERM DEBT SECURITIES:
AGENCIES (10.0%)
Federal Home Loan Mtge. Corp. .......................... 5.44% 01/14/00 $2,030,000 $ 2,025,981
Federal National Mortgage Association .................. 5.51 01/18/00 1,000,000 997,375
-----------
3,023,356
-----------
COMMERCIAL PAPER (90.0%)
Albertson's, Inc. ...................................... A1/P1 5.89 01/14/00 984,000 981,892
Allied Signal, Inc. .................................... A1/P1 5.90 01/27/00 720,000 716,916
American Express Credit Corp. .......................... A1/P1 5.80 01/19/00 720,000 717,894
Associates Corp. ....................................... A1+/P1 5.92 02/04/00 921,000 915,829
AT&T Corp. ............................................. A1+/P1 6.01 01/25/00 1,000,000 995,981
Baltimore Gas & Electric Co. ........................... A1/P1 5.88 01/14/00 1,000,000 997,868
Bear Stearns Cos., Inc. (The) .......................... A1/P1 5.94 01/10/00 1,000,000 998,493
Becton Dickinson & Co. ................................. A1/P1 5.30 01/24/00 1,200,000 1,195,934
BellSouth Telecommunications ........................... A1+/P1 5.05 02/02/00 1,000,000 995,510
Bemis, Inc. ............................................ A1/P1 6.00 01/18/00 660,000 658,108
British Telecommunications PLC ......................... A1+/P1 5.85 01/18/00 632,000 630,241
Carolina Power & Light Corp. ........................... A1/P1 6.18 01/18/00 212,000 211,379
Carolina Power & Light Corp. ........................... A1/P1 6.15 01/28/00 494,000 491,712
Central Illinois Lighting Co. .......................... A1+/P 6.40 01/25/00 600,000 597,422
CIT Group Holdings ..................................... A1/P1 5.98 01/04/00 975,000 974,509
Daimler Chrysler NA Holdings Corp. ..................... A1/P1 6.10 01/18/00 1,000,000 997,110
Ford Motor Credit Corp. ................................ A1/P1 6.26 01/10/00 1,000,000 998,430
General Electric Capital Corp. ......................... A1+/P1 5.90 01/27/00 570,000 567,560
General Electric Capital Corp. ......................... A1+/P1 5.98 02/08/00 400,000 397,465
Great Lakes Chemical Corp. ............................. A1/P1 5.90 01/28/00 1,000,000 995,557
IBM Credit Corp. ....................................... A1/P1 5.90 01/21/00 500,000 498,353
Koch Industries, Inc. .................................. A1+/P1 5.85 01/10/00 630,000 629,072
Minnesota Mining & Mfg. Co. ............................ A1+/P1 6.05 01/28/00 640,000 637,088
Motorola Credit Corp. .................................. A1+/P1 6.50 01/27/00 250,000 248,824
Motorola Credit Corp. .................................. A1+/P1 5.60 03/31/00 320,000 315,470
Nicor, Inc. ............................................ A1/P1 6.00 01/18/00 800,000 797,725
Northern Illinois Gas Co. .............................. A1+/P1 5.88 01/21/00 1,035,000 1,031,605
Panasonic Finance, Inc. ................................ A1+/P1 5.87 02/03/00 1,000,000 994,596
Pfizer, Inc. ........................................... A1/P1 6.52 01/19/00 1,000,000 996,735
Pitney Bowes Inc. ...................................... A1+/P1 5.20 01/28/00 1,060,000 1,055,864
Sony Capital Corp. ..................................... A1/P1 6.30 01/26/00 1,105,000 1,100,153
South Carolina Electric & Gas .......................... A1/P1 6.60 01/31/00 533,000 530,063
Toyota Credit de Puerto Rico Corp. ..................... A1/P1 6.02 02/03/00 795,000 790,595
Toyota Motor Credit Corp. .............................. A1+/P1 6.04 01/13/00 428,000 427,135
UBS Finance (Delw.) Inc. ............................... A1+/P1 4.00 01/03/00 1,000,000 999,778
-----------
27,088,866
-----------
TOTAL SHORT-TERM DEBT SECURITIES (Cost: $30,112,272) 100.0% .............................................. $30,112,222
===========
</TABLE>
- ------------
* The ratings are provided by Standard & Poor's Corporation/Moody's Investor
Services. Inc.
The accompanying notes are an integral part of these financial statements.
47
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
All America Equity Index Bond Money Market
Fund Fund Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments at market value (Notes 1 and 3)
(Cost:
All America Fund -- $42,808,697
Equity Index -- $27,425,304
Bond Fund -- $29,886,955
Money Market -- $30,112,272) .......... $72,345,739 $29,447,748 $28,308,348 $30,112,222
Cash ...................................... 168,374 4,834 1,780 4,673
Interest and dividends receivable ......... 56,754 25,190 420,086 --
Receivable for securities sold ............ 93,344 2,009 -- --
Shareholder subscriptions receivable ...... -- -- -- 64,494
----------- ----------- ----------- -----------
TOTAL ASSETS .............................. 72,664,211 29,479,781 28,730,214 30,181,389
----------- ----------- ----------- -----------
Payable for securities purchased ......... 197,065 -- -- --
Dividend payable to shareholders .......... 98,966 859 8,295 9,187
Accrued expenses .......................... 2,179 385 635 476
----------- ----------- ----------- -----------
TOTAL LIABILITIES ......................... 298,210 1,244 8,930 9,663
----------- ----------- ----------- -----------
NET ASSETS ................................ $72,366,001 $29,478,537 $28,721,284 $30,171,726
=========== =========== =========== ===========
SHARES OUTSTANDING (Note 4) ............... 4,394,190 2,730,385 3,040,459 2,903,859
=========== =========== =========== ===========
NET ASSET VALUE PER SHARE ................. $ 16.47 $ 10.80 $ 9.45 $ 10.39
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
48
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
All America Equity Index Bond Money Market
Fund Fund(a) Fund Fund
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (Note 1):
Dividends ...................................... $ 689,846 $ 220,075 $ -- $ --
Interest ....................................... 166,929 46,990 1,870,132 871,621
------------ ----------- ----------- ---------
Total Investment Income ........................... 856,775 267,065 1,870,132 871,621
------------ ----------- ----------- ---------
Expenses (Note 2):
Investment management fees ..................... 318,029 21,648 121,448 33,028
Directors' (independent) fees and expenses ..... 26,380 15,754 26,380 26,380
Custodian expenses ............................. 64,603 4,208 7,116 12,449
Accounting expenses ............................ 30,000 12,000 30,000 30,000
Transfer agent fees ............................ 32,286 12,779 27,663 33,902
Registration fees and expenses ................. 33,698 35,073 22,157 22,436
Audit .......................................... 10,775 5,000 6,350 4,875
Printing ....................................... 23,243 2,427 9,815 5,855
Other .......................................... 2,345 851 1,181 814
------------ ----------- ----------- ---------
Total Expenses before expense reimbursement ....... 541,359 109,740 252,110 169,739
Expense reimbursement ............................. (6,145) (53,455) (63,191) (103,684)
------------ ----------- ----------- ---------
Net Expenses ...................................... 535,214 56,285 188,919 66,055
------------ ----------- ----------- ---------
NET INVESTMENT INCOME ............................. 321,561 210,780 1,681,213 805,566
------------ ----------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (Note 1):
Net realized gain (loss) from security transactions 9,735,794 194,402 (77,457) (43)
Net unrealized appreciation (depreciation)
of investments ................................. 4,620,245 2,022,444 (2,560,834) (50)
------------ ----------- ----------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS ................................. 14,356,039 2,216,846 (2,638,291) (93)
------------ ----------- ----------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ...................... $ 14,677,600 $ 2,427,626 $ (957,078) $ 805,473
============ =========== =========== =========
</TABLE>
- ----------
(a) Commenced operations May 3, 1999.
The accompanying notes are an integral part of these financial statements.
49
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
<CAPTION>
All America Fund Equity Index Fund
---------------------------- -----------------
1999 1998 1999(a)
------------ ------------ ------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income ............. $ 321,561 $ 344,112 $ 210,780
Net realized gain (loss) on
investments ..................... 9,735,794 1,118,467 194,402
Net unrealized appreciation
(depreciation) of investments ... 4,620,245 10,652,968 2,022,444
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .... 14,677,600 12,115,547 2,427,626
------------ ------------ ------------
Dividend Distributions (Note 5):
From net investment income ..... (313,199) (355,096) (206,332)
From capital gains ............. (9,376,382) (608,849) (54,088)
------------ ------------ ------------
Total Distributions ................. (9,689,581) (963,945) (260,420)
------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (Note 4):
Net Proceeds from sale of shares 5,281,443 2,124,083 27,076,821
Dividend reinvestments .......... 9,579,059 956,071 259,510
Cost of shares redeemed ......... (18,282,044) (105,395) (25,000)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ... (3,421,542) 2,974,759 27,311,331
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS 1,566,477 14,126,361 29,478,537
NET ASSETS, BEGINNING OF PERIOD ..... 70,799,524 56,673,163 --
------------ ------------ ------------
NET ASSETS, END OF YEAR ............. $ 72,366,001 $ 70,799,524 $ 29,478,537
============ ============ ============
COMPONENTS OF NET ASSETS:
Paid-in capital ................... $ 41,674,733 $ 45,096,275 $ 27,311,331
Accumulated undistributed net
investment income ............... 1,710 (6,652) 4,448
Accumulated undistributed net
realized gain(loss) on
investments ..................... 1,152,516 793,104 140,314
Unrealized appreciation
(depreciation)
of investments .................. 29,537,042 24,916,797 2,022,444
------------ ------------ ------------
NET ASSETS, END OF YEAR ............. $ 72,366,001 $ 70,799,524 $ 29,478,537
============ ============ ============
<CAPTION>
Bond Fund Money Market Fund
---------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income ............. $ 1,681,213 $ 1,385,514 $ 805,566 $ 209,895
Net realized gain (loss) on
investments ..................... (77,457) 152,581 (43) (145)
Net unrealized appreciation
(depreciation) of investments ... (2,560,834) 346,222 (50) --
------------ ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .... (957,078) 1,884,317 805,473 209,750
------------ ------------ ------------ -----------
Dividend Distributions (Note 5):
From net investment income ..... (1,688,057) (1,398,540) (800,206) (209,896)
From capital gains ............. (16,659) (535,067) -- --
------------ ------------ ------------ -----------
Total Distributions ................. (1,704,716) (1,933,607) (800,206) (209,896)
------------ ------------ ------------ -----------
CAPITAL SHARE TRANSACTIONS (Note 4):
Net Proceeds from sale of shares 5,911,602 1,216,884 29,396,830 5,332,372
Dividend reinvestments .......... 1,690,023 1,919,969 785,550 193,670
Cost of shares redeemed ......... (1,453,099) -- (6,528,017) (6,525,496)
------------ ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ... 6,148,526 3,136,853 23,654,363 (999,454)
------------ ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS 3,486,732 3,087,563 23,659,630 (999,600)
NET ASSETS, BEGINNING OF PERIOD ..... 25,234,552 22,146,989 6,512,096 7,511,696
------------ ------------ ------------ -----------
NET ASSETS, END OF YEAR ............. $ 28,721,284 $ 25,234,552 $ 30,171,726 $ 6,512,096
============ ============ ============ ===========
COMPONENTS OF NET ASSETS:
Paid-in capital ................... $ 30,599,549 $ 24,451,023 $ 30,166,066 $ 6,511,703
Accumulated undistributed net
investment income ............... (13,375) (6,531) 5,941 581
Accumulated undistributed net
realized gain(loss) on
investments ..................... (286,283) (192,167) (231) (188)
Unrealized appreciation
(depreciation)
of investments .................. (1,578,607) 982,227 (50) --
------------ ------------ ------------ -----------
NET ASSETS, END OF YEAR ............. $ 28,721,284 $ 25,234,552 $ 30,171,726 $ 6,512,096
============ ============ ============ ===========
</TABLE>
- ----------
(a) Commenced operations May 3, 1999.
The accompanying notes are an integral part of these financial statements.
50
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------
All America Fund Equity Index Fund
SELECTED PER SHARE AND ------------------------------------ -----------------
SUPPLEMENTARY DATA: 1999 1998 1997 1996(e) 1999(f)
- ------------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD .......... $15.08 $12.65 $10.98 $10.00 $10.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income ......................... 0.09 0.07 0.08 0.06 0.08
Net gains or losses on securities (realized and
unrealized) ................................ 3.81 2.57 2.77 0.98 0.82
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .............. 3.90 2.64 2.85 1.04 0.90
------ ------ ------ ------ ------
Less dividend distributions:
From net investment income .................... (0.08) (0.08) (0.08) (0.06) (0.08)
From capital gains ............................ (2.43) (0.13) (1.10) -- (0.02)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ........................... (2.51) (0.21) (1.18) (0.06) (0.10)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR .................. $16.47 $15.08 $12.65 $10.98 $10.80
====== ====== ====== ====== ======
Total return (%) (b) .......................... 26.0 21.0 26.0 10.4 9.0
Net assets, end of year ($ millions) .......... 72.4 70.8 56.7 55.5 29.5
Ratio of net investment income to average net
assets (%) ................................. 0.51 0.55 0.59 0.95(a) 1.22(a)
Ratio of expenses to average net assets (%) .. 0.85 0.84 0.84 0.87(a) 0.63(a)
Ratio of expenses to average net assets after
expense reimbursement (%) .................. 0.84 0.82 0.81 0.85(a) 0.32(a)
Portfolio turnover rate (%) (c) ............... 34.89 41.25 35.96 9.33 5.67
</TABLE>
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------------------------------------------------
Bond Fund Money Market Fund
SELECTED PER SHARE AND ------------------------------------ --------------------------
SUPPLEMENTARY DATA: 1999 1998 1997 1996(e) 1999 1998 1997(d)
- -------------------- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD .......... $10.41 $10.41 $10.13 $10.01 $10.23 $10.15 $10.00
------ ------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income ......................... 0.60 0.61 0.59 0.38 0.50 0.52 0.35
Net gains or losses on securities (realized and
unrealized) ................................ (0.87) 0.24 0.29 0.12 -- -- --
------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .............. (0.27) 0.85 0.88 0.50 0.50 0.52 0.35
------ ------ ------ ------ ------ ------ ------
Less dividend distributions:
From net investment income .................... (0.60) (0.62) (0.59) (0.38) (0.34) (0.44) (0.20)
From capital gains ............................ (0.09) (0.23) (0.01) -- -- -- --
------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ........................... (0.69) (0.85) (0.60) (0.38) (0.34) (0.44) (0.20)
------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR .................. $ 9.45 $10.41 $10.41 $10.13 $10.39 $10.23 $10.15
====== ====== ====== ====== ====== ====== ======
Total return (%) (b) .......................... (3.5) 8.3 8.9 5.0 4.9 5.3 3.5
Net assets, end of year ($ millions) .......... 28.7 25.2 22.1 21.0 30.2 6.5 7.52
Ratio of net investment income to average net
assets (%) ................................. 6.23 5.84 5.69 5.63(a) 4.86 5.14 5.17 (a)
Ratio of expenses to average net assets (%) .. 0.93 0.97 1.00 0.90(a) 1.02 3.21 2.47 (a)
Ratio of expenses to average net assets after
expense reimbursement (%) .................. 0.70 0.70 0.70 0.70(a) 0.40 0.40 0.40 (a)
Portfolio turnover rate (%) (c) ............... 10.07 33.32 56.18 17.85 N/A N/A N/A
</TABLE>
- ----------
(a) Annualized.
(b) Total return would have been lower had certain expenses not been reduced
through expense reimbursement (Note 2)
(c) Portfolio turnover rate excludes all short-term securities.
(d) Commenced operations May 1, 1997.
(e) Commenced operations May 1, 1996.
(f) Commenced operations May 3, 1999.
N/A = Not Applicable.
The accompanying notes are an integral part of these financial statements.
51
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
Mutual of America Institutional Funds, Inc. (the "Investment Company") was
incorporated on October 27, 1994 under the laws of Maryland and is registered
under the Investment Company Act of 1940 as a diversified, open-end management
investment company (a mutual fund) currently issuing four series of common stock
representing shares of the All America Fund, Equity Index Fund, Bond Fund, and
Money Market Fund. Each fund has its own investment objective and policies.
Shares of the funds of the Investment Company are offered on a no-load basis
through its distributor, Mutual of America Securities Corporation, a registered
broker-dealer and affiliate of the Investment Company's investment management
adviser, Mutual of America Capital Management Corporation (the "Adviser").
The Investment Company is designed primarily as an investment vehicle for
endowments, foundations, corporations, municipalities and other public entities
and other institutional investors.
The All America Fund and Bond Fund commenced operations on May 1, 1996.
The Money Market Fund commenced operations on May 1, 1997, and, the Equity Index
Fund commenced operations onMay 3, 1999.
The following is a summary of the significant accounting policies of the
Investment Company:
Security Valuation--Investment securities are valued as follows:
Equity securities are valued at the last sales price on the principal
exchange on which the security is traded. If there is no trading volume for a
particular valuation day, the last bid price is used. For any equity securities
traded in the over-the-counter market, the security is valued at the last sale
price, or if no sale, at the latest bid price available.
Short-term securities with a maturity of 60 days or less are valued at
amortized cost, which approximates market value for such securities. Short-term
debt securities maturing in excess of 60 days are stated at market value.
Debt securities are valued at a composite fair market value "evaluated
bid," which may be the last sale price. Securities for which market quotations
are not readily available will be valued at fair value as determined in good
faith by the Adviser under the direction of the Board of Directors of the
Investment Company.
Security Transactions--Security transactions are recorded on the trade
date. Realized gain and loss on the sale of short and long-term debt securities
is computed on the basis of amortized cost at the time of sale. Realized gain
and loss on the sale of common stock is based on the identified cost basis of
the security determined on a first-in, first-out ("FIFO") basis.
The All America Fund and the Equity Index Fund each maintain an indexed
assets portfolio. In order to remain more fully invested in the equity markets
while minimizing its transaction costs, the funds may purchase stock index
futures contracts. Initial cash margin deposits (represented by cash or Treasury
bills) are made upon entering into futures contracts. (This initial margin,
maintained in a segregated account, is equal to approximately 5% of the contract
amount, and does not involve the borrowing of funds to finance the transaction).
During the period the futures contract is outstanding, changes in the value of
the contract are recognized as unrealized gains or losses by "marking-to-market"
on a daily basis to reflect the market value of the contract at the end of each
trading day. Futures contracts are valued at the settlement price established
each day by the exchange on which traded. Depending upon whether unrealized
gains or losses are incurred, variation margin payments are received or made.
When the contract is closed, a realized gain or loss from futures transactions
is recorded, equal to the net variation margin received or paid over the period
of the contract.
Investment Income--Interest income is accrued as earned. Dividend income
is recorded on the ex-dividend date. Foreign source tax withheld from dividends
is recorded as a reduction from dividend income. Should reclamation succeed,
such amounts are recorded as income upon collection.
Federal Income Taxes--The Investment Company intends to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to
shareholders. Therefore, no federal income tax provision is required.
52
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. EXPENSES AND OTHER TRANSACTIONS WITH AFFILIATES
The Investment Company has entered into an Investment Advisory agreement
with the Adviser. For providing investment management services to the Investment
Company, each fund accrues a fee, calculated as a daily charge, at annual rates
of .50%, .125%, .45%, and .20% of the value of the net assets for the All
America, Equity Index, Bond, and Money Market funds, respectively. Under
Sub-Advisory Agreements for the All America Fund, the Adviser has delegated
investment advisory responsibilities to subadvisers responsible for providing
management services for a portion of the fund's assets. The Adviser (not the
fund) is responsible for compensation payable under such Sub-Advisory
Agreements.
Each of the funds of the Investment Company is charged for those expenses
which can be directly attributed to a fund's operation. Expenses which cannot be
so attributed are generally allocated among the funds based on relative net
assets.
The Adviser contractually limits the expenses of each fund, other than
brokers' commissions, transfer taxes and fees relating to portfolio
transactions, investment management expenses and extraordinary expenses, to an
annual rate of .35%, .20%, .25%, and .20%, of the value of the net assets of the
All America, Equity Index, Bond, and Money Market funds, respectively. Accrual
of these other operating expenses is charged daily against each fund's net
assets. Settlement of fees accrued (both investment management and other
operating expenses) is paid by each fund to the Adviser on or about month-end.
The annual rates of operating expenses charged daily to each fund are
subject to periodic adjustments so as to maintain as close a relationship as
possible between the established rate (charged daily) and the fund's actual
expenses, but not to exceed the respective rates under the Adviser's contractual
expense limitation agreement.
The Adviser's contractual agreement to limit each fund's total expenses
(excluding brokerage commissions, transfer taxes/fees and extraordinary
expenses) to annual rates of .85%, .325%, .70%, and .40% of the net assets of
the All America, Equity Index, Bond and Money Market funds, respectively, is in
effect through 2000 and continues in effect thereafter unless cancelled by the
Fund or the Adviser in accordance with the agreement.
The Investment Company has an Investment Accounting Agreement with the
Adviser, pursuant to which the Adviser has agreed to serve as investment
accounting and recordkeeping agent for the funds and to calculate the net asset
values of the funds. The compensation paid by the funds for these services is
subject to the expense reimbursement agreement of the Adviser described above.
A subadviser placed a portion of its portfolio transactions with its
affiliated broker-dealer; such commissions amounted to $11,843 or 25.3% of the
Fund's total commissions and represented 16.5% of the aggregate amount of
commissionable transactions.
3. PURCHASES AND SALES
The cost of investment purchases and proceeds from sales of investments,
excluding short-term investments and U.S. Government securities, for the year
ended December 31, 1999 was as follows:
<TABLE>
<CAPTION>
All America Equity Index Bond
Fund Fund Fund
----------- ----------- ----------
<S> <C> <C> <C>
Cost of investment purchases ................ $21,155,726 $26,474,380 $6,817,510
=========== =========== ==========
Proceeds from sales of investments .......... $34,482,995 $ 1,409,322 $1,050,620
=========== =========== ==========
The cost of investment purchases and proceeds
from sales of U.S. Government (excluding
short-term) securities was as follows:
Cost of investment purchases .......... $ -- $ -- $ 499,490
=========== =========== ==========
Proceeds from sales of investments ...... $ -- $ -- $1,478,155
=========== =========== ==========
</TABLE>
53
<PAGE>
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS -- (Continued)
3. PURCHASES AND SALES (CONTINUED)
For the Money Market Fund, the cost of short-term securities purchases was
$229,496,686; net proceeds from sales and redemptions was $206,538,420.
At December 31, 1999 the net unrealized appreciation (depreciation) of
investments based on cost, which was substantially the same for Federal income
tax purposes, was as follows:
<TABLE>
<CAPTION>
All America Equity Index Bond Money Market
Fund Fund Fund Fund
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Unrealized appreciation .................. $ 31,768,399 $ 4,453,973 $ 93,256 $ --
Unrealized (depreciation) ................ (2,231,357) (2,431,529) (1,671,863) (50)
------------ ----------- ----------- ----
Net unrealized appreciation (depreciation) $ 29,537,042 $ 2,022,444 $(1,578,607) $(50)
============ =========== =========== ====
</TABLE>
4. CAPITAL SHARE ACTIVITY AND AFFILIATED OWNERSHIP
At December 31, 1999 one billion shares of common stock has been
authorized for the Investment Company. The Board of Directors has allocated 25
million shares to the All America Fund, and, 15 million shares each to the
Equity Index, Bond and Money Market Funds.
Transactions in shares during the year ending December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
All America Equity Index Bond Money Market
Fund Fund Fund Fund
----------- ----------- -------- ------------
<S> <C> <C> <C> <C>
Shares issued ............................ 323,068 2,708,452(1) 584,104 2,816,850
Shares issued as reinvestment of dividends 581,747 24,359 175,301 75,749
Shares redeemed .......................... (1,204,133)(2) (2,426) (144,108) (625,078)
---------- ---------- -------- ----------
Net increase (decrease) .................. (299,318) 2,730,385 615,297 2,267,521
========== ========== ======== ==========
</TABLE>
As at December 31, 1999, Mutual Of America Life Insurance Company and its
subsidiaries (affiliates of the Adviser) were shareholders of each fund's
outstanding shares as follows:
All America Fund ......................................................... 86%
Equity Index Fund ........................................................ 92%
Bond Fund ................................................................ 79%
Money Market Fund ........................................................ 5%
5. DIVIDENDS
On December 31, 1999 dividend distributions were declared and paid from
accumulated net investment income to shareholders of record on June 29, 1999.
Pursuant to shareholders' instructions, substantially all dividend distributions
were immediately reinvested in additional shares of each fund (see Note 4
above).
All America Equity Index Bond Money Market
Fund Fund Fund Fund
----------- ----------- -------- -----------
Distributions from:
Net investment income ........ $ 313,199 $206,332 $1,688,057 $800,206
Net realized capital gains ... 9,376,382 54,088 16,659 --
---------- -------- ---------- --------
Total dividend distributions ... $9,689,581 $260,420 $1,704,716 $800,206
========== ======== ========== ========
Dividend amounts per share ..... $ 2.507365 $.097371 $ .686814 $.338572
========== ======== ========== ========
- ----------
(1) Includes the initial seed investment by Mutual of America Life Insurance
Company of $25 million, represented by 2,500,000 shares.
(2) During February 1999, Mutual of America Life Insurance Company redeemed
1.1 million shares realizing proceeds of approximately $16.6 million,
reducing the Fund's net assets by a corresponding amount.
54
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
of Mutual of America Institutional Funds, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments in securities, of Mutual of America
Institutional Funds, Inc. comprising, respectively, the All America, Bond and
Money Market Funds as of December 31, 1999, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended and the financial highlights for
each of the four years in the period then ended. We have also audited the
statement of assets and liabilities, including the portfolio of investments in
securities, of Mutual of America Institutional Funds, Inc. comprising the Equity
Index Fund as of December 31, 1999 and the related statement of operations,
statement of changes in net assets and the financial highlights for the period
May 3, 1999 (commencement of operations) to December 31, 1999. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1999 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
All America, Bond and Money Market Funds of Mutual America Institutional Funds,
Inc. as of December 31, 1999, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended and their financial highlights for each of the four years in the
period then ended in conformity with generally accepted accounting principles.
Also, in our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Equity Index Fund of Mutual of America Institutional Funds, Inc. as of December
31, 1999, and the results of its operations, changes in net assets and its
financial highlights for the period May 3, 1999 (commencement of operations) to
December 31, 1999 in conformity with generally accepted accounting principles.
New York, New York
February 21, 2000
55
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
1(a) Articles of Incorporation of Mutual of America Institutional
Funds, Inc.(the "Fund"), dated October 26, 1995 (6)
1(b) Articles Supplementary, dated February 20, 1996 (6)
1(c) Articles Supplementary, dated April 8, 1996 (6)
1(d) Articles Supplementary, dated December 2, 1996 (6)
1(e) Articles Supplementary, dated February 24, 1997 (6)
1(f) Articles Supplementary, dated April 6, 1999 (5)
2 By-Laws of the Fund (6)
4(a) Form of Investment Advisory Agreement, as amended effective May
1, 1999, between the Fund and Mutual of America Capital
Management Corporation (the "Adviser") (4)
4(b) Form of Subadvisory Agreement between the Adviser and Fred Alger
Management, Inc. (2)
4(c) Form of Subadvisory Agreement between the Adviser and Oak
Associates, Ltd. (2)
5 Distribution Agreement between the Fund and Mutual of America
Securities Corporation, as Distributor ("Securities
Corporation") (6)
7 Custody Agreement between the Fund and The Chase Manhattan Bank
(1)
8(a) Form of Transfer Agency and Service Agreement between the Fund
and State Street Bank and Trust Company (1)
8(b) Form of Investment Accounting Agreement between the Fund and the
Adviser (3)
8(c) Agreement to Pay Operating Expenses between the Fund and the
Adviser (7)
9 Consent and Opinion of General Counsel (5)
10(a) Consent of Arthur Andersen LLP
10(b) Consent of Swidler Berlin Shereff Friedman, LLP
10(c) Powers of Attorney of Ms. Morrissey and Messrs. Altstadt,
Kearney, Sharkey and Silber (2)
10(d) Power of Attorney of Patrick J. Waide, Jr. (3)
10(e) Powers of Attorney of John R. Greed and Stanley Shmishkiss (4)
16(a) Code of Ethics of the Fund
16(b) Code of Ethics of Securities Corporation
16(c) Code of Ethics of the Adviser
16(d) Code of Ethics of Fred Alger
16(e) Code of Ethics of Oak Associates
16(f) Code of Ethics of Mutual of America Life Insurance Company
- ----------
(1) Included in Pre-Effective Amendment No. 3 filed with the Commission on
January 29, 1996
(2) Included in Pre-Effective Amendment No. 4 filed with the Commission on
March 15, 1996
(3) Included in Post-Effective Amendment No. 2 filed with the Commission on
February 28, 1997
(4) Included in Post-Effective Amendment No. 5 filed with the Commission on
February 12, 1999
(5) Included in Post-Effective Amendment No. 6 filed with the Commission on
April 15, 1999
(6) Included in Post-Effective Amendment No. 7 filed with the Commission on
June 4, 1999
Item 24. Persons Controlled By or Under Common Control with Registrant
The Adviser is an indirect wholly-owned subsidiary of Mutual of America
Life Insurance Company (Mutual of America Life). Mutual of America Life is a New
York mutual life insurance company, and as such no person has the direct of
indirect power to control Mutual of America Life except by virtue of a persons
capacity as a director or executive officer. Each holder of an in-force
insurance policy or annuity contract issued by Mutual of America Life has the
right to vote for the election of directors of Mutual of America Life at annual
elections and upon other corporate matters where policyholders' votes are taken.
Mutual of America Life directly or indirectly owns the following companies:
Mutual of America Life Insurance Company, a New York mutual insurance
company, wholly owns
o Mutual of America Corporation, a Delaware corporation, and
o Mutual of America Foundation, a New York not-for-profit corporation.
C-1
<PAGE>
Mutual of America Corporation wholly owns
o The American Life Insurance Company of New York, a New York stock
corporation,
o Mutual of America Securities Corporation, a Delaware corporation,
and
o Mutual of America Capital Management Corporation (the Adviser), a
Delaware corporation.
Mutual of America Life Insurance Company and The American Life Insurance
Company of New York, through their separate accounts, wholly own all of the
shares of Mutual of America Investment Corporation, a Maryland corporation
registered under the 1940 Act as a management investment company whose shares
are offered only to those separate accounts for funding variable life insurance
and variable annuity products.
Mutual of America Life Insurance Company currently owns a majority of
Registrant's outstanding shares.
Item 25. Indemnification
Articles of Incorporation of the Fund. The Articles of Incorporation of
the Fund provide in substance that no director or officer of the Fund shall be
liable to the Fund or its shareholders for money damages, unless the director or
officer is subject to liability by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of duties in the conduct of his or her
office.
By-Laws of the Fund. The By-Laws of the Fund provide for the
indemnification of present and former officers and directors of the Fund against
liability by reason of service to the Fund, unless the officer or director is
subject to liability by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office (Disabling Conduct). No indemnification shall be made to an officer
or director unless there has been a final adjudication on the merits, a
dismissal of a proceeding for insufficiency of evidence of Disabling Conduct, or
a reasonable determination has been made that no Disabling Conduct occurred. The
Fund may advance payment of expenses only if the officer or director to be
indemnified undertakes to repay the advance unless indemnification is made and
if one of the following applies: the officer of director provides a security for
his or her undertaking, the Fund is insured against losses from any lawful
advances, or a reasonable determination has been made that there is reason to
believe the officer or director ultimately will be entitled to indemnification.
Insurance. Coverage for officers and director of the Adviser, Distributor
and the Fund is provided under an Investment Management insurance policy issued
by American International Specialty Lines Insurance Company, with excess
coverage by Chubb custom Insurance Company, to Mutual of America Life Insurance
Company et al. The aggregate limit of liability under the policy per year is $10
million, with a $200,000 deductible per entity insured and a $1,000 deductible
for individual insureds.
By-Laws of the Adviser. The By-Laws of Mutual of America Capital
Management Corporation, the Fund's Adviser, provide for the indemnification by
the Corporation of present and former directors and officers of the Corporation
and of any organization for which service is rendered at the request of the
Corporation and permits the advance payment of expenses in certain circumstances
for covered persons in connection with suits by third parties and derivative
suits. Each covered person must have acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the conduct was unlawful. If in connection with a
derivative suit a covered person shall have been adjudged to be liable to the
Corporation, indemnification shall not be made unless and only to the extent
that the Delaware Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
entitled to indemnity. Thus, the officers and directors of the fund and the
Adviser are indemnified by the Adviser for their services in connection with the
Fund to the extent set forth in the By-Laws.
By-Laws of the Distributor. The By-laws of Mutual of America Securities
Corporation, the principal underwriter and distributor for the fund, provide for
the indemnification by the Corporation of present and former directors and
officers of the Corporation and of any organization for which service is
rendered at the request of the Corporation and permits the advance payment of
expenses in certain circumstances for covered persons in connection with suits
by third parties and derivative suits. Each covered person must have acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the Corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the conduct
was unlawful. If in connection with a derivative suit a covered person shall
have been adjudged to be liable to the Corporation, indemnification shall not be
made unless and only to the extent that the Delaware Court of Chancery
C-2
<PAGE>
or the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is entitled to indemnity. Thus, the
officers and directors of the Distributor are indemnified by the Distributor for
their services in connection with the Fund to the extent set forth in the
By-Laws.
Undertaking. Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by its it against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 26. Business and Other Connections of the Investment Adviser
Mutual of America Capital Management corporation (the Adviser) is the
investment adviser to the Fund and is registered as an investment adviser under
the Investment Advisers Act of 1940. The names, addresses and positions with the
Adviser of each director and officer of the Adviser are set forth below.
<TABLE>
<CAPTION>
Positions Principal Occupation
Name With Adviser During Past Two Years
- ---- --------------------- ---------------------
<S> <C> <C>
Thomas J. Moran ............. Director, Chairman of President, Chief Executive Officer and
320 Park Avenue the Board Director, Mutual of America Life
NY, NY 10022
F. Harlan Batrus ............ Director Partner, Lazard Freres
30 Rockefeller Plaza
NY, NY 10020
Robert X. Chandler .......... Director Director, Development Office,
Director, Development Office Archdiocese of Boston
Archdiocese of Boston
2121 Commonwealth Ave.
Brighton, MA 02135
Nathaniel A. Davis .......... Director Vice President, Network Engineering
17680 Old Meadow Rd. Operations,
McLean, VA 22102 Nextel Communications
Anthony F. Earley ........... Director Chairman, President and Chief
Detroit Edison Company Operating Officer, Detroit Edison Co.
2000 Second Avenue
Room 2407 WCB
Detroit, MI 48226
William T. Knowles .......... Director Consultant
Orr's Island, ME 04066
Walter A. McDougal .......... Director Former Chairman and President,
Garden City, NY 11530 Richmond Hill Savings Bank
Peter J. Powers ............. Director President and Chief Executive
1345 Avenue of the Americas Officer, Powers Global Strategies
NY, NY 10105 (Strategic planning and consulting)
James E. Quinn .............. Director Vice Chairman, Tiffany & Co.
727 Fifth Avenue
NY, NY 10022
Richard J. Ciecka ........... President and Chief Vice Chairman of the Board, Mutual
320 Park Avenue Financial Officer; of America Life, until October 1998
NY, NY 10022 Director
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
Positions Principal Occupation
Name With Adviser During Past Two Years
- ---- --------------------- ---------------------
<S> <C> <C>
Manfred Altstadt ............ Senior Executive Vice Senior Executive Vice President and
320 Park Avenue President and Chief Chief Financial Officer of
NY, NY 10022 Financial Officer Mutual of America Life and
American Life
Patrick A. Burns ............ Senior Executive Vice Senior Executive Vice President and
320 Park Avenue President and General Counsel of Mutual of
NY, NY 10022 General Counsel America Life and American Life
Amir Lear ................... Executive Vice Senior Vice President, Mutual of
320 Park Avenue President and America Life, until October 1998
NY, NY 10022 Assistant to the
President and CEO
Andrew L. Heiskell .......... Executive Vice Executive Vice President of the
320 Park Avenue President Adviser
NY, NY 10022
Thomas Larsen ............... Executive Vice Executive Vice President of the Adviser
320 Park Avenue President since June 1998; prior thereto, Senior
Vice President, Desai Capital
Management
Joseph Brunken .............. Senior Vice President Senior Vice President of the Adviser
320 Park Avenue since November, 1997; prior
NY, NY 10022 thereto, Vice President, Nikko
Capital Management (USA), Inc.
Mary E. Canning ............. Senior Vice President Senior Vice President of the Adviser
320 Park Avenue since May 1999; Prior thereto,
NY, NY 10022 Managing Director/Portfolio
Manager at Phoenix Duff & Phelps
Susan J. Ferber ............. Senior Vice President Senior Vice President of the Adviser
320 Park Avenue since May 1999; prior thereto,
NY, NY 10022 Vice President of Business
Development, Argus Investors'
Counsel
Stanley M. Lenkowicz ........ Senior Vice President, Senior Vice President and Deputy
320 Park Avenue Deputy General General Counsel, Mutual of
NY, NY 10022 Counsel & Secretary America Life
Nancy McAvey ................ Senior Vice President Senior Vice President of the Adviser
320 Park Avenue
NY, NY 10022
Philip McMahon .............. Senior Vice President Vice President of the Adviser
320 Park Avenue until February 2000; prior thereto,
NY, NY 10022 Equity Securities Analyst
John P. Middleton ........... Senior Vice President Senior Vice President of the Adviser
320 Park Avenue since May 1999; prior thereto,
NY, NY 10022 Vice President, Raymond James
& Associates
Paul Travers ................ Senior Vice President Senior Vice President of the Adviser
320 Park Avenue
NY, NY 10022
Gary P. Wetterau ............ Senior Vice President Vice President of the Adviser
320 Park Avenue
NY, NY 10022
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
Positions Principal Occupation
Name With Adviser During Past Two Years
- ---- --------------------- ---------------------
<S> <C> <C>
David Wood .................. Senior Vice President Senior Vice President of the Adviser
320 Park Avenue
NY, NY 10022
Aline Couture ............... Vice President Vice President of the Adviser
320 Park Avenue
NY, NY 10022
Doris Klug .................. Vice President Vice President of the Adviser
320 Park Avenue
NY, NY 10022
Robert H. Stewart ........... Vice President Vice President of the Adviser
320 Park Avenue
NY, NY 10022
</TABLE>
Each of Oak Associates, Ltd. ("Oak Associates") and Fred Alger Management,
Inc. ("Alger Management") is a subadviser for a portion of the Active Assets of
the All America Fund allocated to it. Each subadviser is registered as an
investment adviser under the Investment Advisers Act of 1940. The names,
addresses and positions of each director and officer of each subadviser are
incorporated by reference to the Form ADV of the subadviser filed with the
Securities and Exchange Commission, as set forth below.
Oak Associates, Ltd., Form ADV, SEC File No. 801-23632.
Fred Alger Management, Inc., Form ADV, SEC File No. 801-06709.
Item 27. Principal Underwriters
(a) Mutual of America Securities Corporation (the "Distributor"), a
Delaware corporation, is the principal underwriter and distributor for Fund
shares.
(b) The names of the officers and directors of the Distributor, and their
positions with the Distributor and the Fund, are as follows:
Positions
Name With Distributor Position with the Fund
- ----- ---------------------- -------------------------
Thomas J. Moran ....... Chairman of the Board --
and Director
Dolores J. Morrissey .. President and CEO President and Director
Amir Lear ............. Senior Vice President --
and CFO
Manfred Altstadt ...... Senior Executive Vice Senior Executive Vice
President, Treasurer President, Treasurer and
and Director Director
Patrick A. Burns ...... Senior Executive Vice Senior Executive Vice
President, General President, General Counsel
Counsel and Director and Director
Salvatore R. Curiale .. Senior Executive Vice --
President and Director
Stanley M. Lenkowicz .. Senior Vice President, Senior Vice President,
Secretary and Director Deputy General Counsel,
and Secretary
Howard Lichtenstein ... Director --
William S. Conway ..... Executive Vice President/ --
Marketing
Paul J. Costagliola ... Vice President and --
Compliance Officer
Item 28. Location of Accounts and Records
The records required to be maintained by Section 31(a) of the Investment
Company Act of 1940 and Rules 31a-3 promulgated thereunder, will be maintained
by the Adviser at its offices at 320 Park Avenue, New York, New York 10022 or
with its custodian.
C-5
<PAGE>
Item 29. Management Services
Not applicable.
Item 30. Undertakings
The Fund hereby undertakes, if requested to do so by the holders of at
least 10% of the Fund's outstanding shares, to call a meeting of shareholders
for the purpose of voting upon the question of removal of a director or
directors and to assist in communications with other shareholders as required by
applicable law and regulations.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all the
requirements for effectiveness of this post-effective amendment to Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this post-effective amendment to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 26th day of April 2000.
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
(Registrant)
By: /s/ DOLORES J. MORRISSEY
-------------------------------
(Title: President)
Pursuant to the requirement of the Securities Act of 1933, this
post-effective amendment to Registration Statement has been signed below by the
following persons in the capacities indicated on April 26, 2000.
Signatures Title
---------- -----
/s/ DOLORES J. MORRISSEY President and Director
- --------------------------- (Principal Executive Officer)
(Dolores J. Morrissey)
* Director
- ---------------------------
(Kevin M. Kearney)
* Director
- ---------------------------
(John T. Sharkey)
* Director
- ---------------------------
(John R. Silber)
* Director
- ---------------------------
(Stanley Shmishkiss)
* Director
- ---------------------------
(Patrick J. Waide, Jr.)
* Executive Vice President and
- --------------------------- Chief Financial Officer
(John R. Greed) (Principal Financial and
Accounting Officer)
*By /s/ DOLORES J. MORRISSEY
---------------------------
(Dolores J. Morrissey,
Attorney-in-fact)
C-7
<PAGE>
EXHIBIT INDEX
Exhibit
Number Page
------ ----
10(a) Consent of Arthur Andersen LLP
10(b) Consent of Swidler Berlin Sheriff Friedman, LLP
16(a) Code of Ethics of Mutual of America Institutional Funds, Inc.
16(b) Code of Ethics of Mutual of America Securities Corporation
16(c) Code of Ethics of Mutual of America Capital Management
Corporation
16(d) Code of Ethics of Fred Alger Management, Inc.
16(e) Code of Ethics of Oak Associates, Ltd.
16(f) Code of Ethics of Mutual of America Life Insurance Company
EX-99.10(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our report
(and to all references to our firm) included in or made a part of Registration
Statement no. 33-87874.
ARTHUR ANDERSEN LLP
New York, New York
April 26, 2000
EXHIBIT 99.10(b)
CONSENT OF COUNSEL
We hereby consent of the reference to our firm included in the prospectus
filed as part of Registration Statement No. 33-87874.
SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
New York, New York
April 26, 2000
MUTUAL OF AMERICA INSTITUTIONAL FUNDS, INC.
Preamble:
Mutual of America Institutional Funds, Inc. recognizes its responsibility to be
familiar with and to ensure its compliance with the provisions of the Investment
Company Act of 1940, the Securities Act of 1933, the Securities Exchange Act of
1934, and the Rules and Regulations of the Securities and Exchange Commission
promulgated under those Acts. The same is true as to other Federal and state
laws and regulations thereunder which may be applicable to an investment company
and to particular situations which may arise.
Experience over the years has shown, however, that there are, in addition,
business principles and practices to be followed in maintaining a high standard
of conduct in the operation and management of a registered investment company.
The basic principle which should govern all officers, directors and employees of
the Company shall be carried on with fidelity to the interests of our security
holders. The performance of such functions should conform in all particulars to
just and equitable principles of conduct in the administration and management of
the Company.
The combination of these factors also leads to certain fundamental principles
which should govern the personal investment activities of the Company's
personnel, namely: (1) the duty at all times to place the interests of security
holders first; (2) the requirement that all personal securities transactions be
conducted consistent with the code of ethics and in such a manner as to avoid
any actual or potential conflict of interest or any abuse of an individual's
position of trust and responsibility; and (3) that investment company personnel
should not take inappropriate advantage of their positions.
To foster the above considerations, Mutual of America Instituional Funds, Inc.
has established this Code of Ethics.
CODE OF ETHICS
1- Definitions
(a) Fund
As used in this code the term "Fund" shall mean Mutual of America
Instituional Funds, Inc.
(b) Access Person
As used in this code the term "access person" shall mean any director,
officer, general partner, or advisory employee of the Fund.
<PAGE>
(c) Advisory Employee
As used in this code the term "advisory employee" shall mean any
employee of the Fund who makes any recommendation concerning any
security held or to be acquired by the Fund, who participates in the
determination of which recommendation shall be made, who in connection
with his or her duties obtains any information concerning which
securities are being recommended; and any employee of a person in a
controlled relationship to the Fund who obtains current information
concerning securities recommendations being made.
(d) Independent Outside Director
As used in this code the term "independent outside director" shall mean
a director of the Fund who is not an "interested person" of the Fund
within the meaning of Section 2(a)(19) of the Investment Company Act of
1940.
2- Restrictions on Personal Investing Activities
(a) No access person shall purchase or sell, directly or indirectly, any
security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership and which to his
or her knowledge (or should have known) is currently being purchased or
sold by the Fund, or which to his or her knowledge (or should have
known) any investment adviser of the Fund or any advisory employee of
the Fund is actively considering recommending to the Fund for purchase
or sale. These prohibitions shall continue until the time as such
investment adviser or advisory employee decides not to recommend such
purchase or sale, or if such recommendation is made until the time that
such investment company decides not to enter into, or completes, such
recommended purchase or sale. These prohibitions shall apply to any
purchase or sale by any access person of any convertible security,
option or warrant of any issuer whose underlying securities are being
actively considered for recommendation to, or are currently being
purchased or sold by the Fund.
(b) No access person, other than an independent outside director, shall
purchase any securities in an initial public offering.
(c) No access person shall engage directly or indirectly in any securities
activities in anticipation of a Fund transaction. For purposes of this
provision it shall be presumed that a violation has occurred if an
access person has executed a securities transaction within 7 calendar
days prior to a Fund transaction in a security of the same or related
issuer.
3- Exempt Purchases and Sales
<PAGE>
The prohibitions in Section 2 of this code shall not apply to:
(i) purchases or sales effected in any account over which an access person
has no direct or indirect influence or control;
(ii) purchases or sales of securities which are not eligible for purchase or
sale by the Fund;
(iii) purchases or sales of securities which are direct obligations of the
United States, banker's acceptances, bank certificates of deposit,
commercial paper, high quality short-term debt instruments including
repurchase agreements and shares of registered open-end investment
companies;
(iv) purchases effected upon exercise of rights issued by an issuer pro rata
to all holders of a class of its securities to the extent such rights
were acquired from such issuer, and sales of such rights so acquired;
and
(v) purchases which are part of an automatic dividend reinvestment plan.
4- Reporting
(a) Each access person shall report to the Fund every transaction in a
security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership, except purchases
and sales specified in Section 3 of this code. Such report shall state
the title, the interest rate and maturity date (if applicable), the
number of shares and the principal amount of each security; the date and
nature of the transaction (i.e., purchase, sale or other acquisition or
disposition); the price at which it was effected; and the name of the
broker, dealer or bank with or through whom the transaction was
effected; and the name of the broker, dealer or bank with whom any
account has been established and the date thereof. Such report may also
contain a statement declaring that the reporting or recording of any
such transaction shall not be construed as an admission that the access
person making the report has any direct or indirect beneficial ownership
in the security. A report shall be made not later than 10 days after the
end of each quarter whether or not a transaction covered hereby takes
place and shall reflect the date submitted.
Notwithstanding the above, no person shall be required to make a report
or supply confirmations or account statements if such person is an
independent outside director of the Fund and would be required to make
such a report solely by reason of being a director of the Fund, except
where such director knew or, in the ordinary course of fulfilling his or
her official duties as a director of the Fund, should have known that
during the 15-day period immediately preceding or after the date of the
transaction in a security by the director such security is or was
purchased or sold by the Fund or such purchase or sale by the Fund is or
was considered by the Fund or its investment adviser.
(b) Each access person, other than an independent outside director, shall
direct their brokers to supply to the Compliance Officer, on a timely
basis, duplicate copies of confirmations of all personal security
transactions and copies of periodic statement for all accounts.
<PAGE>
(c) Each access person, other than an independent outside director, shall
disclose all personal security holdings within 10 days of becoming an
access person and within 30 days of the end of each calendar year. Each
such report shall state the title, number of shares and principal amount
of the security involved and the name of any broker, dealer or bank with
whom an account is maintained.
5- Review of Reports
Reports required to be made pursuant to Section 4 of this code shall be
reviewed by the Fund's compliance officer or such other person as the
President of the Fund designates.
6- Prior Clearance of Transactions
No access person who makes any recommendation concerning any security held or
to be acquired by the Fund, or who participates in the determination of which
recommendation shall be made, or who in connection with his or her duties
obtains any information concerning which securities are being recommended,
shall effect a purchase or sale directly or indirectly, of any security in
which he has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership, without obtaining prior written clearance from
the President of the Fund (or the Chief Executive Officer when said President
is seeking approval).
Prior clearance will NOT be granted with respect to securities being
purchased or sold by the Fund or being actively considered by an advisory
employee of the Fund until 7 days have elapsed from the conclusion of such
activity. Any prior clearance concerning a private placement transaction will
only be granted under circumstances where the Fund's interests are not
disadvantaged, where such opportunity is not being offered to an individual
by virtue of his or her position with the Fund and further, with the express
understanding that the access person involved will be under an obligation to
disclose such investment should he or she participate in the Fund's
subsequent consideration of an investment in the same issuer, such
consideration being subject to an independent review by access persons with
no direct or indirect interest in the issuer. Any access person who effects a
purchase or sale after obtaining such prior written clearance shall be deemed
not to be in violation of Section 2 of this code by reason of such purchase
or sale.
7- Other Restricted Activities
(a) No access person shall accept any gift or other thing of more than de
minimis value from any person or entity that does business with or on
behalf of the Fund.
(b) No access person shall profit in the purchase and sale, or sale and
purchase, of the same (or equivalent or economically related) securities
within 60 calendar days, unless prior written clearance is given by the
President of the Fund (or the Chief Executive Officer when said
President is seeking approval). Any profits realized in violation of
this Section shall be disgorged to the Fund. The foregoing shall apply
to an independent outside
<PAGE>
director only to the extent such director is under an obligation to
report a transaction pursuant to Section 4 and then only with respect to
any securities of the issuer or an economically related issuer of any
security required to be reported.
(c) No access person, other than an independent outside director, shall
serve on the board of directors of a publicly traded company without
obtaining prior written clearance from the President of the Fund (or the
Chief Executive Officer when said President is seeking approval).
8- Certificate of Compliance
Each access person shall certify within 30 days of the end of each
calendar year that with respect to this code of ethics he or she has:
(i) read and understood it;
(ii) complied with the requirements; and
(iii) disclosed or reported all personal securities transactions so required
by it.
9- Administration
(a) Upon learning of a violation of this code, the Fund may impose such
sanctions as it deems appropriate, including, inter alia, a letter of
censure or suspension or termination of the employment of the violator.
(b) At least annually the Fund will furnish a written report to the Board of
Directors of the Fund that:
(i) Describes any issues arising under this code or procedures since the
last report, including all material violations of the code or
procedures and any sanctions imposed in response.
(ii)Certifies that procedures reasonably necessary to prevent access
persons from violating this code have been adopted.
MUTUAL OF AMERICA SECURITIES CORPORATION
Preamble:
Mutual of America Securities Corporation recognizes its responsibility to be
familiar with and to ensure its compliance with the provisions of the Investment
Company Act of 1940 and the Rules and Regulations of the Securities and Exchange
Commission promulgated under the Act. The same is true as to other Federal and
state laws and regulations thereunder which may be applicable to an investment
company and to particular situations which may arise.
Experience over the years has shown, however, that there are, in addition,
business principles and practices to be followed in maintaining a high standard
of conduct in the operation and management of a registered investment company.
The basic principle which should govern all officers, directors and employees of
the Company shall be carried on with fidelity to the interests of our clients.
The performance of such functions should conform in all particulars to just and
equitable principles of conduct in the administration and management of the
Company.
The combination of these factors also leads to certain fundamental principles
which should govern the personal investment activities of certain personnel of
the Company, namely: (1) the duty at all times to place the interests of
investment company clients first; (2) the requirement that all personal
securities transactions be conducted consistent with the code of ethics and in
such a manner as to avoid any actual or potential conflict of interest or any
abuse of an individual's position of trust and responsibility; and (3) that
company personnel should not take inappropriate advantage of their positions.
To foster the above considerations, Mutual of America Securities Corporation has
established the following Code of Ethics.
CODE OF ETHICS
1- Definitions
(a) Underwriter
As used in this code the term "Underwriter" shall mean Mutual of America
Securities Corporation.
(b) Access Person
As used in this code the term "access person" shall mean any director or
officer of the Underwriter who in the ordinary course of business makes,
participates in or obtains information regarding the purchase or sale of
securities for an investment company client for which the principal
underwriter so acts or whose functions or duties as part of the
<PAGE>
ordinary course of business relate to the making of any recommendation
to such investment company client regarding the purchase or sale of
securities.
(c) Investment Company Client
As used in this code the term "investment company client" shall mean a
company registered as such under the Investment Company Act of 1940 and
for which the Underwriter is the principal underwriter.
2- Restrictions on Personal Investing Activities
(a) No access person shall purchase or sell, directly or indirectly, any
security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership and which to his
or her knowledge (or should have known) is currently being purchased or
sold by an investment company client, or which to his or her knowledge
(or should have known) the Adviser, any advisory employee, or any
investment adviser of an investment company client is actively
considering recommending to a client for purchase or sale. These
prohibitions shall continue until the time as the Adviser, advisory
employee or such investment adviser decides not to recommend such
purchase or sale, or if such recommendation is made until the time that
such client decides not to enter into, or completes, such recommended
purchase or sale. These prohibitions shall apply to any purchase or sale
by any access person of any convertible security, option or warrant of
any issuer whose underlying securities are being actively considered for
recommendation to, or are currently being purchased or sold by an
investment company client.
(b) No access person shall purchase any securities in an initial public
offering.
(c) No access person shall engage directly or indirectly in any securities
activities in anticipation of an investment company client's
transaction. For purposes of this provision it shall be presumed that a
violation has occurred if an access person has executed a securities
transaction within 7 calendar days prior to such client's transaction in
a security of the same or related issuer.
3- Exempt Purchases and Sales
The prohibitions in Section 2 of this code shall not apply to:
(i) purchases or sales effected in any account over which an access person
has no direct or indirect influence or control;
(ii) purchases or sales of securities which are not eligible for purchase or
sale by an investment company client;
<PAGE>
(iii) purchases or sales of securities which are direct obligations of the
United States, banker's acceptances, bank certificates of deposit,
commercial paper, high quality short-term debt instruments including
repurchase agreements and shares of registered open-end investment
companies;
(iv) purchases effected upon exercise of rights issued by an issuer pro rata
to all holders of a class of its securities to the extent such rights
were acquired from such issuer, and sales of such rights so acquired;
and
(v) purchases which are part of an automatic dividend reinvestment plan.
4- Reporting
(a) Each access person shall report to the Underwriter every transaction in
a security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership, except purchases
and sales specified in Section 3 of this code. Such report shall state
the title, the interest rate and maturity date (if applicable), the
number of shares and the principal amount of such security; the date and
nature of the transaction (i.e., purchase, sale or other acquisition or
disposition); the price at which it was effected; the name of the
broker, dealer or bank with or through whom the transaction was
effected; and the name of the broker, dealer or bank with whom any
account has been established and date therof. Such report may also
contain a statement declaring that the reporting or recording of any
such transaction shall not be construed as an admission that the access
person making the report has any direct or indirect beneficial ownership
in the security. A report shall be made not later than 10 days after the
end of each quarter whether or not a transaction covered hereby takes
place and shall reflect the date submitted.
(b) Notwithstanding Section 4(a) of this code, an access person need not
make a report where the report would duplicate information recorded
pursuant to Rules 204-2(a)(12) or 204-2(a)(13) under the Investment
Advisers Act of 1940.
(c) Each access person shall direct their brokers to supply to the
Compliance Officer, on a timely basis, duplicate copies of confirmations
of all personal security transactions and copies of periodic statement
for all accounts.
(d) Each access person shall disclose all personal security holdings within
10 days of becoming an access person and within 30 days of the end of
each calendar year. Each such report shall state the title, number of
shares and principal amount of the security involved and the name of any
broker, dealer or bank with whom an account is maintained.
<PAGE>
5- Review of Reports
Reports required to be made pursuant to Section 4 of this code shall be
reviewed by the Underwriter's compliance officer or such other person as
the President of the Underwriter designates.
6- Prior Clearance of Transactions
No access person who makes any recommendation concerning any security
held or to be acquired by an investment company client, or who
participates in, or whose functions or duties relate to, the
determination of which recommendation shall be made, or who in
connection with his or her duties obtains any information concerning
which securities are being recommended, shall effect a purchase or sale
directly or indirectly, of any security in which he has, or by reason of
such transaction acquires, any direct or indirect beneficial ownership,
without obtaining prior written clearance from the President of the
Underwriter (or the Compliance Officer when said President is seeking
approval).
Prior clearance will NOT be granted with respect to securities being
purchased or sold by an investment company client or being actively
considered by the Adviser or an advisory employee until 7 days have
elapsed from the conclusion of such activity. Any prior clearance
concerning a private placement transaction will only be granted under
circumstances where an investment client's interests are not
disadvantaged, where such opportunity is not being offered to an
individual by virtue of his or her position with the Underwriter and
further, with the express understanding that the access person involved
will be under an obligation to disclose such investment should he or she
participate in the Adviser's subsequent consideration of an investment
in the same issuer, such consideration being subject to an independent
review by access persons with no direct or indirect interest in the
issuer. Any access person who effects a purchase or sale after obtaining
such prior written clearance shall be deemed not to be in violation of
Section 2 of this code by reason of such purchase or sale.
7- Other Restricted Activities
(a) No access person shall accept any gift or other thing of more than de
minimis value from any person or entity that does business with or on
behalf of the Underwriter.
(b) No access person shall profit in the purchase and sale, or sale and
purchase, of the same (or equivalent or economically related) securities
within 60 calendar days, unless prior written clearance is given by the
President of the Underwriter (or the Compliance Officer when said
President is seeking approval). Any profits realized in violation of
this Section shall be required to be disgorged.
(c) No access person shall serve on the board of directors of a publicly
traded company without obtaining prior written clearance from the
President of the Underwriter (or the Compliance Officer when said
President is seeking approval).
<PAGE>
8- Certificate of Compliance
Each access person shall certify within 30 days of the end of each
calendar year that with respect to this code of ethics he or she has:
(i) read and understood it;
(ii) complied with the requirements; and
(iii) disclosed or reported all personal securities transactions so required
by it.
9- Administration
(a) Upon learning of a violation of this code, the Underwriter may impose
such sanctions as it deems appropriate, including, inter alia, a letter
of censure or suspension or termination of the employment of the
violator.
(b) At least annually the Underwriter will furnish a written report to the
Board of Directors of an investment company client that:
(i) Describes any issues arising under this code or procedures since the
last report, including all material violations of the code or
procedures and any sanctions imposed in response.
(ii)Certifies that procedures reasonably necessary to prevent access
persons from violating this code have been adopted.
MUTUAL OF AMERICA CAPITAL MANAGEMENT CORPORATION
Preamble:
Mutual of America Capital Management Corporation recognizes its responsibility
to be familiar with and to ensure its compliance with the provisions of the
Investment Company Act of 1940 and the Rules and Regulations of the Securities
and Exchange Commission promulgated under the Act. The same is true as to other
Federal and state laws and regulations thereunder which may be applicable to an
investment company and to particular situations which may arise.
Experience over the years has shown, however, that there are, in addition,
business principles and practices to be followed in maintaining a high standard
of conduct in the operation and management of a registered investment company.
The basic principle which should govern all officers, directors and employees of
the Company shall be carried on with fidelity to the interests of our clients.
The performance of such functions should conform in all particulars to just and
equitable principles of conduct in the administration and management of the
Company.
The combination of these factors also leads to certain fundamental principles
which should govern the personal investment activities of the Company's
personnel, namely:
(1) the duty at all times to place the interests of clients first; (2) the
requirement that all personal securities transactions be conducted consistent
with the code of ethics and in such a manner as to avoid any actual or potential
conflict of interest or any abuse of an individual's position of trust and
responsibility; and (3) that investment adviser personnel should not take
inappropriate advantage of their positions.
To foster the above considerations, Mutual of America Capital Management
Corporation has established the following Code of Ethics.
CODE OF ETHICS
1- Definitions
(a) Adviser
As used in this code the term "Adviser" shall mean Mutual of America
Capital Management Corporation.
(b) Access Person
As used in this code the term "access person" shall mean any director,
officer, general partner, or advisory employee of the Adviser.
<PAGE>
(c) Advisory Employee
As used in this code the term "advisory employee" shall mean any
employee of the Adviser who makes any recommendation concerning any
security held or to be acquired by a client, who participates in the
determination of which recommendation shall be made, who in connection
with his or her duties obtains any information concerning which
securities are being recommended; and any employee of a person in a
controlled relationship to the Adviser who obtains current information
concerning securities recommendations being made.
(d) Independent Outside Director
As used in this code the term "independent outside director" shall mean
a director of the Adviser who is not an "interested person" of an
investment company client within the meaning of Section 2(a)(19) of the
Investment Company Act of 1940.
(e) Investment Company Client
As used in this code the term "investment company client" shall mean a
company registered as such under the Investment Company Act of 1940 and
for which the Adviser is the investment adviser.
2- Restrictions on Personal Investing Activities
(a) No access person shall purchase or sell, directly or indirectly, any
security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership and which to his
or her knowledge (or should have known) is currently being purchased or
sold by a client, or which to his or her knowledge (or should have
known) the Adviser, any advisory employee, or any investment adviser of
an investment company client is actively considering recommending to a
client for purchase or sale. These prohibitions shall continue until the
time as the Adviser, advisory employee or such investment adviser
decides not to recommend such purchase or sale, or if such
recommendation is made until the time that such client decides not to
enter into, or completes, such recommended purchase or sale. These
prohibitions shall apply to any purchase or sale by any access person of
any convertible security, option or warrant of any issuer whose
underlying securities are being actively considered for recommendation
to, or are currently being purchased or sold by a client.
(b) No access person, other than an independent outside director, shall
purchase any securities in an initial public offering.
(c) No access person shall engage directly or indirectly in any securities
activities in anticipation of a client's transaction. For purposes of
this provision it shall be presumed that a violation has occurred if an
access person has executed a securities transaction within 7 calendar
days prior to a client's transaction in a security of the same or
related issuer.
<PAGE>
3- Exempt Purchases and Sales
The prohibitions in Section 2 of this code shall not apply to:
(i) purchases or sales effected in any account over which an access person
has no direct or indirect influence or control;
(ii) purchases or sales of securities which are not eligible for purchase or
sale by a client;
(iii) purchases or sales of securities which are direct obligations of the
United States, banker's acceptances, bank certificates of deposit,
commercial paper, high quality short-term debt instruments including
repurchase agreements and shares of registered open-end investment
companies;
(iv) purchases effected upon exercise of rights issued by an issuer pro rata
to all holders of a class of its securities to the extent such rights
were acquired from such issuer, and sales of such rights so acquired;
and
(v) purchases which are part of an automatic dividend reinvestment plan.
4- Reporting
(a) Each access person shall report to the Adviser every transaction in a
security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership, except purchases
and sales specified in Section 3 of this code. Such report shall state
the title, the interest rate and maturity date (if applicable), the
number of shares and the principal amount of each security; the date and
nature of the transaction (i.e., purchase, sale or other acquisition or
disposition); the price at which it was effected; the name of the
broker, dealer or bank with or through whom the transaction was
effected; and the name of the broker, dealer or bank with whom any
account has been established and the date thereof. Such report may also
contain a statement declaring that the reporting or recording of any
such transaction shall not be construed as an admission that the access
person making the report has any direct or indirect beneficial ownership
in the security. A report shall be made not later than 10 days after the
end of each quarter whether or not a transaction covered hereby takes
place and shall reflect the date submitted.
(b) Notwithstanding Section 4(a) of this code, an access person need not
make a report where the report would duplicate information recorded
pursuant to Rules 204-2(a)(12) or 204-2(a)(13) under the Investment
Advisers Act of 1940.
(c) Each access person, other than an independent outside director, shall
direct their brokers to supply to the Compliance Officer, on a timely
basis, duplicate copies of confirmations of all personal security
transactions and copies of periodic statement for all accounts.
<PAGE>
(d) Each access person, other than an independent outside director, shall
disclose all personal security holdings within 10 days of becoming an
access person and within 30 days of the end of each calendar year. Each
such report shall state the title, number of shares and principal amount
of the security involved and the name of any broker, dealer or bank with
whom an account is maintained.
5- Review of Reports
Reports required to be made pursuant to Section 4 of this code shall be reviewed
by the Adviser's compliance officer or such other person as the President of the
Adviser designates.
6- Prior Clearance of Transactions
No access person who makes any recommendation concerning any security held or to
be acquired by a client, or who participates in the determination of which
recommendation shall be made, or who in connection with his or her duties
obtains any information concerning which securities are being recommended, shall
effect a purchase or sale directly or indirectly, of any security in which he
has, or by reason of such transaction acquires, any direct or indirect
beneficial ownership, without obtaining prior written clearance from the
President of the Adviser, or his designee, (or the Chairman of the Board when
the President is seeking approval).
Prior clearance will NOT be granted with respect to securities being purchased
or sold by a client or being actively considered by the Adviser or an advisory
employee until 7 days have elapsed from the conclusion of such activity. Any
prior clearance concerning a private placement transaction will only be granted
under circumstances where a client's interests are not disadvantaged, where such
opportunity is not being offered to an individual by virtue of his or her
position with the Adviser and further, with the express understanding that the
access person involved will be under an obligation to disclose such investment
should he or she participate in the Adviser's subsequent consideration of an
investment in the same issuer, such consideration being subject to an
independent review by access persons with no direct or indirect interest in the
issuer. Any access person who effects a purchase or sale after obtaining such
prior written clearance shall be deemed not to be in violation of Section 2 of
this code by reason of such purchase or sale.
7- Other Restricted Activities
(a) No access person shall accept any gift or other thing of more than de
minimis value from any person or entity that does business with or on
behalf of the Adviser.
(b) No access person shall profit in the purchase and sale, or sale and
purchase, of the same (or equivalent or economically related) securities
within 60 calendar days, unless prior written clearance is given by the
President of the Adviser, or his designee, (or the Chairman of the Board
when the President is seeking approval). Any profits realized in
violation of this Section shall be required to be disgorged. The
foregoing shall apply to an independent outside director only to the
extent such director is under an obligation to
<PAGE>
report a transaction within Section 2 and then only with respect to any
securities of the issuer or an economically related issuer of any such
security required to be reported.
(c) No access person, other than an independent outside director, shall
serve on the board of directors of a publicly traded company without
obtaining prior written clearance from the President of the Adviser, or
his designee, (or the Chairman of the Board when the President is
seeking approval).
8- Certificate of Compliance
Each access person shall certify within 30 days of the end of each calendar
year that with respect to this code of ethics he or she has:
(i) read and understood it;
(ii) complied with the requirements; and
(iii) disclosed or reported all personal securities transactions so required
by it.
9- Administration
(a) Upon learning of a violation of this code, the Adviser may impose such
sanctions as it deems appropriate, including, inter alia, a letter of
censure or suspension or termination of the employment of the violator.
(b) At least annually the Adviser will furnish a written report to the Board
of Directors of an investment company client that:
(i) Describes any issues arising under this code or procedures since the
last report, including all material violations of the code or
procedures and any sanctions imposed in response.
(ii) Certifies that procedures reasonably necessary to prevent access
persons from violating this code have been adopted.
CODE OF ETHICS
- --------------
I. General Principles
This Code of Ethics ("Code") establishes rules of conduct that govern
personal investment activities of employees of Fred Alger Management, Inc.
("Alger"), Fred Alger & Company, Incorporated and each registered
investment company for which Alger acts as investment adviscr or
sub-adviser ("Alger Fund").
The following categories of personnel are covered by the Code:
(1) portfolio managers - those employees who have direct responsibility
and authority to make investment decisions affecting an Alger Fund
and their immediate family members residing in the same household;
(2) investment personnel - securities analysts and traders who provide
information and advice to a portfolio manager or who help execute
the portfolio manager's decisions and their immediate family members
residing in the same household; and
(3) access persons - all employees (including portfolio managers and
investment personnel) and their immediate family members residing in
the same household; and "interested" directors and officers of Alger
or an Alger Fund.
(4) Independent trustees of Alger Funds will be subject to the
preclearance and reporting requirements of Section III of the Code
only if such person, at the time of his transaction, knew, or in the
ordinary course of fulfilling his official duties as a director of
such company should have known, that during the 15-day period
immediately preceding or after the date of the transaction by such
person, the security such person purchased or sold is or was
purchased or sold by any Alger Fund or was being considered for
purchase or sale by any Alger Fund or Alger.
Certain general fiduciary principles govern the personal investment
activities of all employees:
(1) the duty at all times to place the interests of Alger Fund
shareholders and Alger investment accounts first;
(2) the requirement that all personal securities transactions be
conducted consistent with the Code and in such a manner as to avoid
any actual or potential conflict of interest or any abuse of an
individual's position of trust and responsibility; and
(3) the fundamental standard that Alger personnel should not take
inappropriate advantage of their positions.
<PAGE>
The restrictions and procedures of the Code apply to all accounts in which
an access person has, or by reason of the subsequent transaction acquires,
any direct or indirect beneficial ownership (as defined in Exhibit A).
For purposes of the Code, the term "security" shall not include government
securities, bankers' acceptances, bank certificates of deposit, commercial
paper and shares of registered open-end investment companies.
II. Restrictions on Personal Investing
A. Initial Public Offerings
- Investment personnel may not acquire any securities in an
initial public offering.
B. Private Placements
- Investment personnel must obtain prior approval of any
acquisition of securities in a private placement.
(a) Any such approved acquisition must be disclosed if the
investment personnel subsequently participate in any
Alger Fund's consideration of an investment in the
issuer.
(b) Any Alger Fund's subsequent decision to purchase
securities of the issuer will be subject to independent
review by investment personnel with no personal interest
in the issuer.
C. Blackout Periods
1. An access person may not execute a securities transaction at a
time when any Portfolio Manager is considering the purchase or
sale of that security. If the Alger Fund is in the middle of a
buying or selling program for that security, the program must
be completed before the access person may execute his or her
transaction.
(a) An access person may not recommend any securities
transaction by an Alger Fund without having disclosed
his or her interest, if any, in such securities or the
issuer thereof, including without limitation:
(1) direct or indirect beneficial ownership of any
securities of the issuer;
<PAGE>
(2) any position with the issuer or its affiliates;
and
(3) any present or proposed business relationship
between the issuer or its affiliates and such
person or any party in which such person has a
significant interest.
2. A portfolio manager may not buy or sell a security within
seven calendar days before and after the Alger Fund that he or
she manages trades in that security unless one of the
following situations exists:
(a) An Alger Fund receives a better price on its transaction
made within seven days of the portfolio manager's
transaction.
(b) If a portfolio manager has recommended a security for
purchase or sale by an Alger Fund and his or her
recommendation is overruled by Senior Management, he or
she may purchase or sell that security for his or her
own account. If Senior Management subsequently changes
its position regarding that security and decides to
purchase or sell the security for an Alger Fund within 7
days of the portfolio manager's transaction for his or
her own account, the Fund's purchase or sale will not
require disgorgement by the portfolio manager.
(c) The portfolio manager can demonstrate that a hardship
exists which requires the sale of the security within
the prohibited time period.
3. Any profits realized on trades within the proscribed periods
must be disgorged to the appropriate Alger Fund or to charity.
D. Short-term Trading
Investment personnel may not profit in the purchase and sale, or
sale and purchase, of the same (or equivalent) securities* within 60
calendar days unless the security is not held by any Alger Fund and
is not eligible for purchase by any Alger Fund.
- The Compliance Officer will consider exemptions to this
prohibition on a case-by-case basis when it is clear that no
abuse is involved and the equities of the situation strongly
support an exemption.
* Includes options and short sales
<PAGE>
E. Gifts
Investment personnel may not accept any gift or other thing of more
than de minimus value from any person or entity that does business
with or on behalf of an Alger Fund.
F. Service as a Director
Investment Personnel must obtain prior authorization to serve on the
board of directors of a publicly traded company. Such authorization
will be based on a determination that the board service would be
consistent with the interests of the Alger Fund and its
shareholders.
III. Compliance Procedures
A. Preclearance
All access persons must preclear their personal securities
transactions with the Compliance Officer.
- The Compliance Officer must preclear the personal securities
transactions of all access persons with the Portfolio Managers
in addition to preclearance with the trading desk.
- Any approval will be valid only for the day on which it is
granted.
B. Brokerage Confirmations and Statements
All access persons should direct their brokers to supply duplicate
copies of all confirmations and periodic statements to the firm's
Compliance Officer.
C. Disclosure of Personal Holdings
All investment personnel must disclose their personal securities
holdings upon commencement of employment and thereafter on an annual
basis.
<PAGE>
D. Certification of Compliance With the Code
All access persons must certify annually that:
- they have read and understood the Code;
- they are subject to the Code;
- they have complied with the requirements of the Code; and
- they have disclosed all personal securities transactions
required to be disclosed pursuant to the Code.
E. The management of each Alger Fund will prepare an annual report to
the Fund's Board of Trustees/Directors that:
- summarizes existing procedures concerning personal investing
and any changes made during the previous year;
- identifies any violations requiring significant remedial
action during the previous year; and - identifies any
recommended changes in existing restrictions or procedures.
IV. Sanctions
Upon discovering that an access person has not complied with the
requirements of this Code, the Board of Directors of Alger or of any Alger
Fund may impose on that person whatever sanctions the Board deems
appropriate, including, among other things, censure, suspension or
termination of employment.
V. Confidentiality
All information obtained from any access person hereunder shall be kept in
strict confidence except that reports of securities transactions hereunder
will be made available to the Securities and Exchange Commission or any
other regulatory or self-regulatory organization to the extent required by
law or regulation.
<PAGE>
VI. Other Laws. Ru1es~and~tements of Policy
Nothing contained in this Code shall be interpreted as relieving any
access person from acting in accordance with the provision of any
applicable law, rule, or regulation or any other statement of poi icy or
procedure adopted by Alger or by an Alger Fund governing the conduct of
such person.
<PAGE>
Exhibit A
For purposes of the attached Code of Ethics, "beneficial ownership" shall
be interpreted in the same manner as it would be in determining whether a person
is subject to the provisions of Section 16 of the Securities Exchange Act of
1934 and the rules and regulations thereunder, except that the determination of
direct or indirect beneficial ownership shall apply to all securities that an
Access Person has or acquires. The term "beneficial ownership" of securities
would include not only ownership of securities held by an Access Person for his
own benefit, whether in bearer form or registered in his name or otherwise, but
also ownership of securities held for his benefit by others (regardless of
whether or how they are registered) such as custodians, brokers, executors,
administrators, or trustees (including trusts in which he has only a remainder
interest), and securities held for his account by pledgees, securities owned by
a partnership in which he is a member, if he may exercise a controlling
influence over the purchase, sale or voting of such securities held for his
account by pledgees, securities owned by a partnership in which he is a member,
if he may exercise a controlling influence over the purchase, sale or voting of
such securities and securities owned by any corporation. Correspondingly, this
term would exclude securities held by an Access Person for the benefit of
someone else.
Ordinarily, this term would not include securities held by executors or
administrators in estates in which an Access Person is a legatee or beneficiary
unless there is a specific legacy to such person of such securities or such
person is the sole legatee or beneficiary and there are other assets in the
estate sufficient to pay debts ranking ahead of such legacy, or the securities
are held in the estate more than a year after the decedent's death.
Securities held in the name of another should be considered as
"beneficially" owned by an Access Person where such person enjoys "benefits
substantially equivalent to ownership". The Securities and Exchange Commission
has said that although the final determination of beneficial ownership is a
question to be determined in the light of the facts of the particular case,
generally a person is regarded as the beneficial owner of securities held in the
name of his or her spouse arid their minor children. Absent special
circumstances such relationship ordinarily results in such person obtaining
benefits substantially equivalent to ownership, e.g. application of the income
derived from such securities to maintain a common home, to meet expenses that
such person otherwise would meet from other sources, or the ability to exercise
a controlling influence over the purchase, sale or voting of such securities.
An Access Person also may be regarded as the beneficial owner of
securities held in the name of another person, if by reason of any contract,
understanding, relationship, agreement, or other arrangement, he obtains
therefrom benefits substantially equivalent to those of ownership.
<PAGE>
Moreover, the fact that the holder is a relative or relative of a spouse and
sharing the same home as an Access Person may in itself indicate that the Access
Person would obtain benefits substantially equivalent to those of ownership from
securities held in the name of such relative. Thus, absent countervailing facts,
it is expected that securities held by relatives who share the same home as an
Access Person will be treated as being beneficially owned by the Access Person.
An Access Person also is regarded as the beneficial owner of securities
held in the name of a spouse, minor children or other person, even though be
does not obtain therefrom the aforementioned benefits of ownership, if he can
vest or revest title in himself at once or at some future time.
Code of Ethics Adopted Pursuant to Rule 17j-1
Under the Investment Company Act of 1940
1. Purposes
The Code has been adopted by the Board of Directors/Trustees of Oak
Advised or Subadvised investment company accounts in accordance with Rule 17j-1
(b) under the Investment Company Act of 1940 (the Act) and in accordance with
the following general principles:
(1) The duty at all times to place the interests of shareholders
first.
Investment company personnel should scrupulously avoid serving
their own personal interests ahead of shareholders' interests in any
decision relating to their personal investments.
(2) The requirement that all personal securities transactions be
conducted consistent with the Code and in such a manner as to avoid
any actual or potential conflict of interest or any abuse of an
individual's position of trust and responsibility.
Investment company personnel must not only seek to achieve
technical compliance with the Code but should strive to abide by its
spirit and the principles articulated herein.
(3) The fundamental standard that investment company personnel
should not take inappropriate advantage of their positions.
Investment company personnel must avoid any situation that
might compromise, or call into question, their exercise of fully
independent judgment in the interest of shareholders, including, but
not limited to the receipt of unusual investment opportunities,
perquisites, or gifts of more than a de minimis value from persons
doing or seeking business with the Fund.
Rule 17j-1 under the Act generally proscribes fraudulent or manipulative
practices with respect to purchases or sales of securities held or to be
acquired by investment companies, if effected by associated persons of such
companies.
The purpose of the Code is to establish procedures consistent with the Act
and Rule 17j-1 to give effect to the following general prohibitions as set forth
in rule 17j-1:
(a) It shall be unlawful for any affiliated person of or principal
underwriter for a registered investment company, or any affiliated
person of an investment adviser of or principal underwriter for a
registered investment company in connection with the purchase or
sale, directly or indirectly, by such person of a security held or
to be acquired, as defined in this section, by such registered
investment company.
(1) To employ any device, scheme or artifice to defraud such
registered investment company;
<PAGE>
(2) To make to such registered investment company any untrue
statement of a material fact or omit to state to such registered
investment company a material fact necessary in order to make the
statements made, in light of the circumstances under which they are
made, not misleading;
(3) To engage in any act, practice, or course of business
which operates or would operate as a fraud or deceit upon any such
registered investment company; or
(4) To engage in any manipulative practice with respect to
such registered investment company.
2. Definitions
(a) "Access Person" means any director/trustee, officer, general
partner or Advisory Person (including any Investment Personnel, as
that term is defined herein) of the Fund, the Manager or the
Adviser/Subadviser; provided, however, that "Access Person" shall
not include any director/trustee, officer, general partner or
Advisory Person of Pacific Investment Management Company (PIMCO) or
Columbus Circle investors (Columbus Circle) who shall be subject to
the provisions of the code of ethics adopted by PIMCO and Columbus
Circle, respectively.
(b) "Adviser/Subadviser" means the Adviser or Subadviser of the Fund
or both as the context may require.
(c) "Advisory Person" means:
(i) any employee of the Fund, Manager or Adviser/Subadviser
(or of any company in a control relationship to the Fund,
Manager or Adviser/Subadviser) who, in connection with his or
her regular functions or duties, makes, participates in, or
obtains information regarding the purchase or sale of a
security by the Fund, or whose functions relate to the making
of any recommendations with respect to such purchases or
sales; and
(ii) any natural person in a control relationship to the Fund
who obtains information concerning recommendations made to the
Fund with regard to the purchase or sale of a security.
(d) "Beneficial Ownership" will be interpreted in the same manner as
it would be in determining which security holdings of a person are
subject to the reporting and short-swing profit provisions of
Section 16 of the Securities Exchange Act of 1934 and the rules and
regulations thereunder, except that the determination of direct or
indirect beneficial ownership will apply to all securities which an
Access Person has or acquires (Exhibit A).
<PAGE>
(e) "Complex" means the group of registered investment companies for
which Prudential Mutual Fund Management, Inc. serves as Manager;
provided, however, that with respect to Access Persons of the
Subadviser (including any unit or subdivision thereof), "Complex"
means the group of registered investment companies in the Complex
advised by the Subadviser, or unit, or subdivision thereof.
(f) "Compliance Officer" means the person designated by the Manager
or the Adviser/Subadviser (including his or her designee) as having
responsibility for compliance with the requirements of the Code.
(g) "Control" will have the same meaning as that set forth in
Section 2 (a) (9) of the Act.
(h) "Disinterested Director/Trustee" means a Director/Trustee of the
Fund who is not an "interested person" of the Fund within the
meaning of Section 2 (a) (19) of the Act.
(i) "Investment Personnel" means Portfolio Managers and other
Advisory Persons who provide investment information and/or advice to
the Portfolio Manager(s) and/or help execute the Portfolio Manager's
(s') investment decisions, including securities analysts and
traders.
(j) "Manager" means Prudential Mutual Fund Management, Inc.
(k) "Portfolio Manager" means any Advisory Person who has the direct
responsibility and authority to make investment decisions for the
Fund.
(1) "Purchase or sale of a Security" includes, inter alia, the
writing of an option to purchase or sell a security.
(m) "Security" will have the meaning set forth in Section 2 (a) (36)
of the Act, except that it will not include shares of registered
open-end investment companies, securities issued by the United
States Government, short-term debt securities which are "government
securities" within the meaning of Section 2 (a) (16) of the Act,
bankers' acceptances, bank certificates of deposit, commercial paper
and such other money market instruments as are designated by the
Compliance Officer. For purposes of the Code, an "equivalent
Security" is one that has a substantial economic relationship to
another Security. This would include, among other things,
(1) a Security that is convertible into another Security,
(2) with respect to an equity Security, a Security having the
same issuer (including a private issue by the same issuer) and
any derivative, option or warrant relating to that Security
and
(3) with respect to a fixed-income Security, a Security having
the same issuer, maturity, coupon and rating.
<PAGE>
3. Applicability
The prohibitions described below will only apply to a transaction in a
Security in which the designated Access Person has, or by reason of such
transaction acquires, any direct or indirect Beneficial Ownership.
4. Prohibited Purchases and Sales
A. Initial Public Offerings
No Investment Personnel may acquire any Securities in an initial
public offering.
B. Private Placements
No Investment Personnel may acquire any Securities in a private
placement without express prior approval.
(i) Prior approval must be obtained in accordance with the preclearance
procedure described in Section 6 below. Such approval will take into
account, among other factors, whether the investment opportunity should be
reserved for the Fund and its shareholders and whether the opportunity is
being offered to the Investment Personnel by virtue of his or her position
with the Fund.
(ii) Investment Personnel who have been authorized to acquire Securities
in a private placement must disclose that investment to the chief
investment officer (including his or her designee) of the
Adviser/Subadviser (or of any unit or subdivision thereof) or the
Compliance Officer when they play a part in any subsequent consideration
of an investment by the Fund in the issuer. In such circumstances, the
Fund's decision to purchase Securities of the issuer will be subject to an
independent review by appropriate personnel with no personal interest in
the issuer.
C. Blackout Periods
(i) Except as provided in Section 5 below, Access Persons are prohibited
from executing a Securities transaction on a day during which any
investment company in the Complex has a pending "buy" or "sell" order in
the same or an equivalent Security and until such time as that order is
executed or withdrawn; provided, however, that this prohibition shall not
apply to Disinterested Directors/Trustees except if they have actual
knowledge of trading by any fund in the Complex and, in any event, only
with respect to those funds on whose boards they sit.
This prohibition shall also not apply to Access Persons of the
Manager who do not, in the ordinary course of fulfilling his or her
official duties, have access to information regarding the purchase and
sale of Securities for the Fund; provided that Securities investments
effected by such Access Persons during the Proscribed period are not
effected with knowledge of the purchase or sale of the same or equivalent
Securities by any fund in the Complex.
<PAGE>
A "pending "buy" or "sell" order" exists when a decision to purchase
or sell a Security has been made and communicated.
(ii) Portfolio Managers are prohibited from buying or selling a Security
within seven calendar days before or after the Fund trades in the same or
an equivalent Security.
(iii) If trades are effected during the periods proscribed in (i) or (ii)
above, except as provided in (iv) below with respect to (i) above, any
profits realized on such trades will be immediately required to be
disgorged to the Fund.
(iv) A transaction by Access Persons (other than Investment Personnel)
inadvertently effected during the period proscribed in (i) above will not
be considered a violation of the Code an disgorgement will not be required
so long as the transaction was effected in accordance with the
preclearance procedures described in Section 6 below and without prior
knowledge of trading by any fund in the Complex in the same or an
equivalent Security.
D. Short-Term Trading Profits
Except as provided in Section 5 below, Investment Personnel are prohibited
from profiting from a purchase and sale, or sale and purchase, of the same
or an equivalent Security within any 60 Calendar day period. If trades are
effected during the proscribed period, any profits realized on such trades
will be immediately required to be disgorged to the Fund.
5. Exempted Transactions
Subject to preclearance in accordance with Section 6 below with respect to
subitems (b), (e), (f), (g), (h) and (i) hereof, the prohibitions of Sections 4
(C) and 4 (D) will not apply to the following:
(a) Purchases or sales of Securities effected in any account over
which the Access Person has no direct or indirect influence or
control or in any account of the Access Person which is managed on a
discretionary basis by a person other than such Access Person and
with respect to which such Access Person does not in fact influence
or control such transactions.
(b) Purchases or sales of Securities (or their equivalents) which
are not eligible for purchase or sale by any fund in the Complex.
(c) Purchases or sales of Securities which are non-volitional on the
part of either the Access Person or any fund in the Complex.
(d) Purchases of Securities which are part of an automatic dividend
reinvestment plan.
<PAGE>
(e) Purchases effected upon the exercise of rights issued by an
issuer pro rata to all holders of a class of its Securities, to the
extent such rights were acquired from such issuer, and sales of such
rights so acquired.
(f) Any equity Securities transaction, or series of related
transactions effected over a 30 calendar day period, involving 500
shares or less in the aggregate, if:
(i) the Access person has no prior knowledge of activity in
such security by any fund in the Complex and
(ii) the issuer is listed on The New York Stock Exchange or
has a market capitalization (outstanding shares
multiplied by the current price per share) greater than
$1 billion (or a corresponding market capitalization in
foreign markets).
(g) Any fixed-income Securities transaction, or series of related
transactions effected over a 30 calendar day period, involving 100
units ($100,000 principal amount) or less in the aggregate, if the
Access Person has no prior knowledge of transactions in such
Securities by any fund in the Complex.
(h) Any transaction in index options effected on a broad-based index
if the Access Person has no prior knowledge of activity in such
index by any fund in the Complex.
(i) Purchases or sales of Securities which receive the prior
approval of the Compliance Officer (such person having no personal
interest in such purchases or sales), based on a determination that
no abuse is involved and that such purchases and sales are not
likely to have any economic impact on any fund in the Complex or on
its ability to purchase or sell Securities of the same class or
other Securities of the same issuer.
6. Preclearance
Access Persons (other than Disinterested Directors/Trustees) must preclear
all personal Securities investments with the exception of those identified in
subparts (a), (c) and (d) of Section 5 above.
All requests for preclearance must be submitted to the Compliance Officer
for approval. All approved orders must be executed by the close of business on
the day preclearance is granted; provided, however, that approved orders for
Securities traded in foreign markets may be executed within two (2) business
days from the date preclearance is granted. If any order is not timely executed,
a request for preclearance must be resubmitted.
7. Reporting
(a) Disinterested Directors/Trustees shall report to the Secretary of the
Fund or the Compliance Officer the information described in Section 7 (b)
hereof with respect to transactions in any Security in which such
Disinterested Director/Trustee has, or by reason of such transaction
acquires, any direct
<PAGE>
or indirect Beneficial Ownership in the Security only if such
Disinterested Director/Trustee, at the time of that transaction knew or,
in the ordinary course of fulfilling his or her official duties as a
Director/Trustee of the Fund, should have known that, during the 15-day
period immediately preceding or subsequent to the date of the transaction
in a Security by such Director/Trustee, such Security is or was purchased
or sold by the Fund or was being considered for purchase or sale by the
Fund, the Manager or Adviser/Subadviser; provided, however, that a
Disinterested Director/Trustee is not required to make a report with
respect to transactions effected in any account over which such
Director/Trustee does not have any direct or indirect influence or control
or in any account of the Disinterested Director/Trustee which is managed
on a discretionary basis by a person other than such Director/Trustee and
with respect to which such Director/Trustee does not in fact influence or
control such transactions. The Secretary of the Fund or the Compliance
Officer shall maintain such reports and such other records to the extent
required by Rule 17j-1 under the Act.
(b) Every report required by Section 7 (a) hereof shall be made not later
than ten days after the end of the calendar quarter in which the
transaction to which the report relates was effected, and shall contain
the following information:
(i) The date of the transaction, the title and the number of shares,
and the principal amount of each Security involved;
(ii) The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(iii) The price at which the transaction was effected; and
(iv) The name of the broker, dealer or bank with or through whom the
transaction was effected.
(c) Any such report may contain a statement that the report shall not be
construed as an admission by the person making such report that he or she
has any direct or indirect Beneficial Ownership in the Security to which
the report relates.
8. Records of Securities Transactions and Post-Trade Review
Access Persons (other than Disinterested Directors/Trustees) are required
to direct their brokers to supply, on a timely basis, duplicate copies of
confirmations of all personal Securities transactions and copies of periodic
statements for all Securities accounts in which such Access Persons have a
Beneficial Ownership interest to the Compliance Officer. Compliance with this
Code requirement will be deemed to satisfy the reporting requirements imposed on
Access Persons under Rule 17j-1(c).
The Compliance Officer will periodically review the personal investment
activity of all Access Persons (including Disinterested Directors/Trustees with
respect to Securities transactions reported pursuant to Section 7 above).
<PAGE>
9. Disclosure of Personal Holdings
Upon commencement of employment and thereafter on an annual basis, Access
Persons (other than Disinterested Directors/Trustees) must disclose all personal
Securities holdings.
10. Gifts
Access Persons are prohibited from receiving any gift or other thing of
more than $100 in value from any person or entity that does business with or on
behalf of the Fund. Occasional business meals or entertainment (theatrical or
sporting events, etc.) are permitted so long as they are not excessive in number
or cost.
11. Service As a Director
Investment Personnel are prohibited from serving on the boards of
directors of publicly traded companies, absent prior authorization based upon a
determination that the board service would be consistent with the interests of
the Fund and its shareholders. In the limited instances that such board service
is authorized, Investment Personnel will be isolated form those making
investment decisions affecting transactions in Securities issued by any publicly
traded company on whose board such Investment Personnel serves as a director
through the use of "Chinese Wall" or other procedures designed to address the
potential conflicts of interest.
12. Certification of Compliance with the Code
Access Persons are required to certify annually as follows:
(i) that they have read and understood the Code;
(ii) that they recognize that they are subject to the Code;
(iii) that they have complied with the requirements of the Code; and
(iv) that they have disclosed or reported all personal Securities
transactions required to be disclosed or reported pursuant to the
requirements of the Code.
13. Code Violations
All violations of the Code will be reported to the Board of
Directors/Trustees of the Fund on a quarterly basis. The Board of
Directors/Trustees may take such action as it deems appropriate.
14. Review by the Board of Directors/Trustees
The Board of Directors/Trustees will be provided with an annual report
which at a minimum:
(i) summarizes existing procedures concerning personal investing and any
changes in the procedures made during the preceding year;
<PAGE>
(ii) identifies any violations requiring significant remedial action
during the preceding year; and
(iii) identifies any recommended changes in existing restrictions or
procedures based upon the Fund's experience under the Code, evolving
industry practices, or developments in applicable laws and regulations.
<PAGE>
Explanatory Notes to Code
-------------------------
1. The information on personal employee Securities transactions received
and recorded by the Manager and by the Adviser/Subadviser, in conformity
with Rule 204-2(a) (12) under the Investment Advisers Act of 1940. under
their respective current policy statements regarding personal securities
transactions of employees will be deemed to satisfy the reporting
requirements imposed on Access Persons of the Manager and of the
Adviser/Subadviser under Rule 17j-1(c).
2. No comparable code requirements have been imposed upon Prudential
Mutual Fund Services, Inc., the Fund's transfer agent, or Prudential
Securities Incorporated, which acts as the Fund's distributor, or those of
their directors or officers who are not Directors/Trustees or Officers of
the Fund since they are deemed not to constitute Access Persons or
Advisory Persons as defined in paragraphs (e) (1) and (2) of Rulel7j-1.
Dated: April 1, 1995, as amended on June 1, 1995.
<PAGE>
Exhibit A
---------
Definition of Beneficial Ownership
----------------------------------
The term "beneficial ownership" of securities would include not only
ownership of securities held by an access person for his or her own benefit.
Whether in bearer form or registered in his or her own name or otherwise, but
also ownership of securities held for his or her benefit by other (regardless of
whether or how they are registered) such as custodians, brokers, executors,
administrators, or trustees (including trusts in which he or she has only a
remainder interest), and securities held for his or her account by pledges,
securities owned by a partnership in which he or she should regard as a personal
holding corporation. Correspondingly, this term would exclude securities held by
an access person for the benefit of someone else.
Ordinarily, this term would not include securities held by executors or
administrators in estates in which an access person is a legatee or beneficiary
unless there is a specific legacy to such person of such securities or such
person is the sole legatee or beneficiary and there are other assets in the
estate sufficient to pay debts ranking ahead of such legacy, or the securities
are held in the estate more than a year after the decedent's death.
Securities held in the name of another should be considered as
"beneficially" owned by an access person where such person enjoys "benefits
substantially equivalent to ownership". The SEC has said that although the final
determination of beneficial ownership is a question to be determined in the
light of the facts of the particular case, generally a person is regarded as the
beneficial owner of securities held in the name of his or her spouse and their
minor children. Absent special circumstances such relationship ordinarily
results in such person obtaining benefits substantially equivalent to ownership,
e.g., application of the income derived from such securities to maintain a
common home, to meet expenses which such person otherwise would meet from other
sources, or the ability to exercise a controlling influence over the purchase,
sale or voting of such securities.
An access person also may be regarded as the beneficial owner of
securities held in the name of another person, if by reason of any contact,
understanding, relationship, agreement or other arrangement, he obtains
therefrom benefits substantially equivalent to those of ownership. Moreover, the
fact that the holder is a relative or relative of a spouse and sharing the same
home as an access person may in itself indicate that the access person would
obtain benefits substantially equivalent to those of ownership from securities
held in the name of such relative. Thus, absent countervailing facts, it is
expected that securities held by relatives who share the same home as an access
person will be treated as being beneficially owned by the access person.
An access person also is regarded as the beneficial owner of securities
held in the name of a spouse, minor children or other person, even though he
does not obtain therefrom the aforementioned benefits of ownership, if he can
vest or revest title in himself at once or at some future time.
MUTUAL OF AMERICA LIFE INSURANCE COMPANY
Preamble:
Mutual of America Life Insurance Company recognizes its responsibility to be
familiar with and to ensure its compliance with the provisions of the Investment
Company Act of 1940 and the Rules and Regulations of the Securities and Exchange
Commission promulgated under the Act. The same is true as to other Federal and
state laws and regulations thereunder which may be applicable to an investment
company and to particular situations which may arise.
Experience over the years has shown, however, that there are, in addition,
business principles and practices to be followed in maintaining a high standard
of conduct in the operation and management of a registered investment company.
The basic principle which should govern all officers, directors and employees of
the Company shall be carried on with fidelity to the interests of our clients.
The performance of such functions should conform in all particulars to just and
equitable principles of conduct in the administration and management of the
Company.
The combination of these factors also leads to certain fundamental principles
which should govern the personal investment activities of certain personnel of
the Company, namely: (1) the duty at all times to place the interests of
investment company clients first; (2) the requirement that all personal
securities transactions be conducted consistent with the code of ethics and in
such a manner as to avoid any actual or potential conflict of interest or any
abuse of an individual's position of trust and responsibility; and (3) that
company personnel should not take inappropriate advantage of their positions.
To foster the above considerations, Mutual of America Life Insurance Company has
established the following Code of Ethics.
CODE OF ETHICS
1- Definitions
(a) Underwriter
As used in this code the term "Underwriter" shall mean Mutual of America
Life Insurance Company.
(b) Access Person
As used in this code the term "access person" shall mean any director or
officer of the Underwriter who in the ordinary course of business makes,
participates in or obtains information regarding the purchase or sale of
securities for an investment company client for which the principal
underwriter so acts or whose functions or duties as part of the
<PAGE>
ordinary course of business relate to the making of any recommendation
to such investment company client regarding the purchase or sale of
securities.
(c) Investment Company Client
As used in this code the term "investment company client" shall mean a
company registered as such under the Investment Company Act of 1940 and
for which the Underwriter is the principal underwriter.
2- Restrictions on Personal Investing Activities
(a) No access person shall purchase or sell, directly or indirectly, any
security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership and which to his
or her knowledge (or should have known) is currently being purchased or
sold by an investment company client, or which to his or her knowledge
(or should have known) the Adviser, any advisory employee, or any
investment adviser of an investment company client is actively
considering recommending to a client for purchase or sale. These
prohibitions shall continue until the time as the Adviser, advisory
employee or such investment adviser decides not to recommend such
purchase or sale, or if such recommendation is made until the time that
such client decides not to enter into, or completes, such recommended
purchase or sale. These prohibitions shall apply to any purchase or sale
by any access person of any convertible security, option or warrant of
any issuer whose underlying securities are being actively considered for
recommendation to, or are currently being purchased or sold by an
investment company client.
(b) No access person shall purchase any securities in an initial public
offering.
(c) No access person shall engage directly or indirectly in any securities
activities in anticipation of an investment company client's
transaction. For purposes of this provision it shall be presumed that a
violation has occurred if an access person has executed a securities
transaction within 7 calendar days prior to such client's transaction in
a security of the same or related issuer.
3- Exempt Purchases and Sales
The prohibitions in Section 2 of this code shall not apply to:
(i) purchases or sales effected in any account over which an access person
has no direct or indirect influence or control;
(ii) purchases or sales of securities which are not eligible for purchase or
sale by an investment company client;
<PAGE>
(iii) purchases or sales of securities which are direct obligations of the
United States, banker's acceptances, bank certificates of deposit,
commercial paper, high quality short-term debt instruments including
repurchase agreements and shares of registered open-end investment
companies;
(iv) purchases effected upon exercise of rights issued by an issuer pro rata
to all holders of a class of its securities to the extent such rights
were acquired from such issuer, and sales of such rights so acquired;
and
(v) purchases which are part of an automatic dividend reinvestment plan.
4- Reporting
(a) Each access person shall report to the Underwriter every transaction in
a security in which he or she has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership, except purchases
and sales specified in Section 3 of this code. Such report shall state
the title, the interest rate and maturity date (if applicable), the
number of shares and the principal amount of such security; the date and
nature of the transaction (i.e., purchase, sale or other acquisition or
disposition); the price at which it was effected; the name of the
broker, dealer or bank with or through whom the transaction was
effected; and the name of the broker, dealer or bank with whom any
account has been established and date therof. Such report may also
contain a statement declaring that the reporting or recording of any
such transaction shall not be construed as an admission that the access
person making the report has any direct or indirect beneficial ownership
in the security. A report shall be made not later than 10 days after the
end of each quarter whether or not a transaction covered hereby takes
place and shall reflect the date submitted.
(b) Notwithstanding Section 4(a) of this code, an access person need not
make a report where the report would duplicate information recorded
pursuant to Rules 204-2(a)(12) or 204-2(a)(13) under the Investment
Advisers Act of 1940.
(c) Each access person shall direct their brokers to supply to the
Compliance Officer, on a timely basis, duplicate copies of confirmations
of all personal security transactions and copies of periodic statement
for all accounts.
(d) Each access person shall disclose all personal security holdings within
10 days of becoming an access person and within 30 days of the end of
each calendar year. Each such report shall state the title, number of
shares and principal amount of the security involved and the name of any
broker, dealer or bank with whom an account is maintained.
<PAGE>
5- Review of Reports
Reports required to be made pursuant to Section 4 of this code shall be
reviewed by the Underwriter's compliance officer or such other person as the
President of the Underwriter designates.
6- Prior Clearance of Transactions
No access person who makes any recommendation concerning any security held or
to be acquired by an investment company client, or who participates in, or
whose functions or duties relate to, the determination of which
recommendation shall be made, or who in connection with his or her duties
obtains any information concerning which securities are being recommended,
shall effect a purchase or sale directly or indirectly, of any security in
which he has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership, without obtaining prior written clearance from
the President of the Underwriter (or the Compliance Officer when said
President is seeking approval).
Prior clearance will NOT be granted with respect to securities being
purchased or sold by an investment company client or being actively
considered by the Adviser or an advisory employee until 7 days have elapsed
from the conclusion of such activity. Any prior clearance concerning a
private placement transaction will only be granted under circumstances where
an investment client's interests are not disadvantaged, where such
opportunity is not being offered to an individual by virtue of his or her
position with the Underwriter and further, with the express understanding
that the access person involved will be under an obligation to disclose such
investment should he or she participate in the Adviser's subsequent
consideration of an investment in the same issuer, such consideration being
subject to an independent review by access persons with no direct or indirect
interest in the issuer. Any access person who effects a purchase or sale
after obtaining such prior written clearance shall be deemed not to be in
violation of Section 2 of this code by reason of such purchase or sale.
7- Other Restricted Activities
(a) No access person shall accept any gift or other thing of more than de
minimis value from any person or entity that does business with or on
behalf of the Underwriter.
(b) No access person shall profit in the purchase and sale, or sale and
purchase, of the same (or equivalent or economically related) securities
within 60 calendar days, unless prior written clearance is given by the
President of the Underwriter (or the Compliance Officer when said
President is seeking approval). Any profits realized in violation of
this Section shall be required to be disgorged.
(c) No access person shall serve on the board of directors of a publicly
traded company without obtaining prior written clearance from the
President of the Underwriter (or the Compliance Officer when said
President is seeking approval).
<PAGE>
8- Certificate of Compliance
Each access person shall certify within 30 days of the end of each calendar
year that with respect to this code of ethics he or she has:
(i) read and understood it;
(ii) complied with the requirements; and
(iii) disclosed or reported all personal securities transactions so required
by it.
9- Administration
(a) Upon learning of a violation of this code, the Underwriter may impose
such sanctions as it deems appropriate, including, inter alia, a letter
of censure or suspension or termination of the employment of the
violator.
(b) At least annually the Underwriter will furnish a written report to the
Board of Directors of an investment company client that:
(i) Describes any issues arising under this code or procedures since the
last report, including all material violations of the code or
procedures and any sanctions imposed in response.
(ii) Certifies that procedures reasonably necessary to prevent access
persons from violating this code have been adopted.
