As filed with the Securities and Exchange Commission on February 4, 2005
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-9821
Allied Asset Advisors Funds
(Exact name of registrant as specified in charter)
745 McClintock Drive, Suite 114
Burr Ridge, IL 60527
(Address of principal executive offices) (Zip code)
Bassam Osman
Allied Asset Advisors Funds
745 McClintock Drive, Suite 114
Burr Ridge, IL 60527
(Name and address of agent for service)
(877) 417-6161
Registrant's telephone number, including area code
Date of fiscal year end: May 31, 2005
Date of reporting period: November 30, 2004
Item 1. Report to Stockholders.
DOW JONES ISLAMIC FUND
January 20, 2005
Dear Shareholders:
Assalamu Alaykum (Greetings of Peace).
The U.S. economy grew at a respectable rate of 3.9% in the first three quarters of 2004. However, the stock market struggled in the same period, and then ended with a modest gain. The Dow Jones Islamic Fund gained 5.32% in the six months ending November 30, 2004, while the Dow Jones Industrial Average increased by 3.48% (dividends omitted) and the Dow Jones Islamic Market USA Index went up 6.31% (dividends omitted). Please see page five of this report for complete standardized performance information. In terms of sector contribution to performance, energy stocks helped the Fund, while the technology sector was an area of weakness.
Investors have been flocking to value and small-cap stocks which performed best, thus extending the cyclical pattern of style preference. Periods of better performance by certain “style,” like “value,” stocks are usually followed by years of under-performance. The year 2004 marked the fifth consecutive year that the Russell 1000 Value Index outperformed the Russell 1000 Growth Index, which is the longest trend since 1979. Similar prolonged disparity exists between large-cap and small-cap stocks.
Many believe a reversal in the above trends is now likely, and warn against the high risk of chasing past performance. Loading up on value and small-cap stocks now carries the risk of ignoring the historical seesaw performance pattern of investment styles. Many believe that investors now give an abnormally low valuation premium to growth stocks. We believe that in the next year, a balanced approach among the various investment styles is the best course. In addition, a reasonable exposure to international stocks and dividend-paying stocks is advisable.
I’d like to thank you for your confidence and loyalty. Your trust is what motivates us day in and day out. We will persist in our strong commitment to ethical investing that adheres to Islamic principles and strives to achieve growth of your investment, while being prudent with the risks of the markets.
Respectfully,
Dr. Bassam Osman
President, Dow Jones Islamic Fund
The above discussion and analysis of the Fund reflect the opinions of the Advisor as of January 2005, are subject to change, and any forecasts made cannot be guaranteed.
The Fund invests in foreign securities which will involve greater volatility and political, economic and currency risks and differences in accounting methods.
The Dow Jones Industrial Average is an unmanaged index of common stocks comprised of major industrial companies and assumes reinvestment of dividends. The Dow Jones Islamic Market USA Index is a diversified compilation of U.S. equity securities considered by the Shari’ah Supervisory Board of Dow Jones to be in compliance with Islamic principles. The performance of the Dow Jones Islamic Market USA Index does not include the reinvestment of dividends. You cannot invest directly in an index.
For use only when preceded or accompanied by a current prospectus for the Fund. Mutual fund investing involves risk; principal loss is possible. The Dow Jones Islamic Fund is distributed by Quasar Distributors, LLC (01/05).
DOW JONES ISLAMIC FUND
EXPENSE EXAMPLE
November 30, 2004 (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (6/1/04 - 11/30/04).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. Although the Fund charges no sales load or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent. If you request that a redemption be made by wire transfer, currently a $15.00 fee is charged by the Fund’s transfer agent. IRA accounts will be charged a $15.00 annual maintenance fee. The example below includes, but is not limited to, management fees, shareholder servicing fees, fund accounting, custody and transfer agent fees. However, the example below does not include portfolio trading commissions and related expenses, and other extraordinary expenses as determined under generally accepted accounting principles. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads ), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Beginning Account Value 6/1/04 | | Ending Account Value 11/30/04 | | Expenses Paid During Period 6/1/04 - 11/30/04 |
| | | | | | |
| Actual | $1,000.00 | | $1,013.60 | | $7.55 |
| | | | | | |
| Hypothetical (5% return before expenses) | 1,000.00 | | 1,017.50 | | 7.57 |
| | | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
ALLOCATION OF PORTFOLIO ASSETS
(Calculated as a percentage of net assets)
November 30, 2004 (Unaudited)
See notes to the financial statements.
DOW JONES ISLAMIC FUND
This chart assumes an initial investment of $10,000 made on June 30, 2000 (SEC effective date). Performance reflects fee waivers in effect. In the absence of fee waivers, the total return would have been reduced. As of the period ended November 30, 2004, The Dow Jones Islamic Fund has chosen to use the Russell 3000 Growth Index as the comparison benchmark.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by visiting www.investaaa.com.
The Fund invests in foreign securities which will involve greater volatility and political, economic and currency risks and differences in accounting methods. Indices mentioned are unmanaged and commonly used to measure U.S. and Foreign markets. You cannot invest directly in an index.
The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or redemptions of fund shares.
| | | Since SEC Effective Date |
Average Annual Total Returns as of November 30, 2004 | One Year | June 30, 2000 |
| Dow Jones Islamic Fund - Class K | 6.49% | (8.69)% |
| Dow Jones Islamic Market USA Index* | 7.35% | (8.40)% |
| Russell 3000 Growth Index** | 5.18% | (12.29)% |
| * | The Dow Jones Islamic Market USA Index is a diversified compilation of U.S. equity securities considered by the Shari’ah Supervisory Board of Dow Jones to be in compliance with Islamic principles. The index is constructed from stocks in the Dow Jones Indexes (DJGI) family. Dow Jones believes that these stocks are accessible to investors and are well traded. The DJGI methodology removes issues that are not suitable for global investing. The performance of the Dow Jones Islamic Market USA Index does not include the reinvestment of dividends. |
| ** | The Russell 3000 Growth Index takes the largest 3,000 US companies based on market capitalization and measures the performance of those with higher price-to-book ratios and higher forecasted growth values. |
DOW JONES ISLAMIC FUND
SCHEDULE OF INVESTMENTS November 30, 2004 (Unaudited)
Number of Shares | | | | Market Value |
| | | | | |
| COMMON STOCKS - 97.2% | | |
| | | AEROSPACE - 1.1% | | |
| 1,000 | | Rockwell Collins, Inc. | $ | 39,860 |
| 2,200 | | United Technologies Corp. | | 214,676 |
| | | | | 254,536 |
| | | AIR FREIGHT & LOGISTICS - 1.2% | | |
| 500 | | Expeditors International Washington, Inc. | | 26,630 |
| 1,100 | | FedEx Corp. | | 104,533 |
| 1,500 | | United Parcel Service, Inc. - Class B | | 126,225 |
| | | | | 257,388 |
| | | AIRLINES - 0.2% | | |
| 3,000 | | Southwest Airlines Co. | | 47,190 |
| | | | | |
| | | AUTO COMPONENTS - 0.1% | | |
| 500 | | Gentex Corp. | | 16,160 |
| | | | | |
| | | AUTOMOBILES - 0.5% | | |
| 1,200 | | Harley-Davidson, Inc. | | 69,384 |
| 1,000 | | Winnebago Industries, Inc. | | 37,930 |
| | | | | 107,314 |
| | | BEVERAGES - 3.1% | | |
| 8,500 | | The Coca-Cola Co. | | 334,135 |
| 6,900 | | PepsiCo, Inc. | | 344,379 |
| | | | | 678,514 |
| | | BIOTECHNOLOGY - 3.1% | | |
| 4,552 | | Amgen, Inc. (a) | | 273,302 |
| 1,100 | | Applera Corp Applied Biosystems Group - | | 22,550 |
| 1,075 | | Biogen Idec, Inc. (a) | | 63,081 |
| 1,000 | | Celgene Corp. (a) | | 27,420 |
| 500 | | Chiron Corp. (a) | | 16,285 |
| 2,000 | | Genentech, Inc. (a) | | 96,500 |
| 1,000 | | Genzyme Corp. (a) | | 56,010 |
| 2,000 | | Gilead Sciences, Inc. (a) | | 68,920 |
| 500 | | Immunomedics, Inc. (a) | | 1,405 |
| 1,000 | | Medimmune, Inc. (a) | | 26,600 |
| 500 | | Myriad Genetics, Inc. (a) | | 9,620 |
| 500 | | Techne Corp. (a) | | 18,575 |
| | | | | 680,268 |
| | | | | |
Number of Shares | | | | Market Value |
| | | | | |
| | | CHEMICALS - 1.7% | | |
| 1,000 | | Air Products & Chemicals, Inc. | $ | 57,250 |
| 1,000 | | Ecolab, Inc. | | 34,980 |
| 4,300 | | EI Du Pont de Nemours & Co. | | 194,876 |
| 1,000 | | Engelhard Corp. | | 29,890 |
| 852 | | Monsanto Co. | | 39,209 |
| 500 | | Sigma-Aldrich Corp. | | 29,865 |
| | | | | 386,070 |
| | | | | |
| | | COMMERCIAL SERVICES& SUPPLIES - 1.4% | | |
| 750 | | Apollo Group, Inc. (a) | | 59,775 |
| 500 | | Avery Dennison Corp. | | 29,330 |
| 1,000 | | Career Education Corp. (a) | | 38,900 |
| 500 | | Cintas Corp. | | 22,360 |
| 750 | | Copart, Inc. (a) | | 16,200 |
| 2,000 | | Corinthian Colleges, Inc. (a) | | 34,850 |
| 500 | | Deluxe Corp. | | 19,770 |
| 500 | | DeVry, Inc. (a) | | 8,430 |
| 300 | | Herman Miller, Inc. | | 7,369 |
| 500 | | HNI Corp. | | 21,195 |
| 500 | | Robert Half International, Inc. | | 13,515 |
| 500 | | The Corporate Executive Board Co. | | 33,540 |
| | | | | 305,234 |
| | | COMMUNICATIONS EQUIPMENT - 4.7% | | |
| 2,200 | | ADC Telecommunications, Inc. (a) | | 5,170 |
| 500 | | Andrew Corp. (a) | | 7,100 |
| 28,000 | | Cisco Systems, Inc. (a) | | 523,880 |
| 500 | | Echelon Corp. (a) | | 3,780 |
| 500 | | Interdigital Communications Corp. (a) | | 10,175 |
| 500 | | Plantronics, Inc. | | 20,595 |
| 500 | | Polycom, Inc. (a) | | 11,420 |
| 6,600 | | QUALCOMM, Inc. | | 274,692 |
| 2,000 | | Research In Motion Ltd. (a)(b) | | 177,940 |
| 500 | | Tekelec (a) | | 11,705 |
| | | | | 1,046,457 |
| | | | | |
| | | COMPUTERS & PERIPHERALS - 6.9% | | |
| 8,900 | | Dell, Inc. (a) | | |
| 500 | | Diebold, Inc. | | 26,600 |
| | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2004 (Unaudited)
Number of Shares | | | | Market Value |
| | | | | |
| COMMON STOCKS (Continued) | | |
| | | COMPUTERS & PERIPHERALS (Continued) | | |
| 8,500 | | EMC Corp. (a) | $ | 114,070 |
| 500 | | Emulex Corp. (a) | | 7,070 |
| 10,321 | | Hewlett-Packard Co. | | 206,420 |
| 6,500 | | International Business Machines Corp. | | 612,560 |
| 500 | | Lexmark International, Inc. - Class A (a) | | 42,450 |
| 500 | | NCR Corp. (a) | | 29,865 |
| 1,100 | | Network Appliance, Inc. (a) | | 33,176 |
| 500 | | QLogic Corp. (a) | | 17,195 |
| 12,600 | | Sun Microsystems, Inc. (a) | | 69,930 |
| | | | | 1,519,964 |
| | | | | |
| | | CONSTRUCTION& ENGINEERING - 0.3% | | |
| 500 | | Dycom Industries, Inc. (a) | | 14,570 |
| 500 | | Fluor Corp. | | 25,950 |
| 500 | | Vulcan Materials Co. | | 25,925 |
| | | | | 66,445 |
| | | | | |
| | | CONTAINERS & PACKAGING - 0.1% | | |
| 500 | | Aptargroup, Inc. | | 26,275 |
| | | | | |
| | | DISTRIBUTORS - 0.4% | | |
| 1,100 | | Genuine Parts Co. | | 47,751 |
| 500 | | W.W. Grainger, Inc. | | 30,930 |
| | | | | 78,681 |
| | | | | |
| | | DIVERSIFIED FINANCIAL SERVICES - 0.4% | | |
| 1,000 | | Moody’s Corp. | | 80,750 |
| | | | | |
| | | DIVERSIFIED TELECOMMUNICATION SERVICES - 1.5% | | |
| 13,200 | | SBC Communications, Inc. | | 332,244 |
| | | | | |
| | | ELECTRICAL EQUIPMENT - 0.8% | | |
| 700 | | American Power Conversion Corp. | | 14,798 |
| 1,600 | | Emerson Electric Co. | | 106,912 |
| | | | | |
Number of Shares | | | | Market Value |
| | | | | |
| | | ELECTRICAL EQUIPMENT (Continued) | | |
| 700 | | Rockwell Automation, Inc. | $ | 33,110 |
| 500 | | Roper Industries, Inc. | | 30,775 |
| | | | | 185,595 |
| | | ELECTRONIC EQUIPMENT& INSTRUMENTS - 0.6% | | |
| 1,800 | | Agilent Technologies, Inc. (a) | | 41,202 |
| 500 | | AVX Corp. | | 6,295 |
| 500 | | Cognex Corp. | | 12,900 |
| 500 | | Jabil Circuit, Inc. (a) | | 12,530 |
| 500 | | Kemet Corp. (a) | | 4,430 |
| 500 | | Molex, Inc. | | 13,785 |
| 500 | | Molex, Inc. - Class A | | 12,145 |
| 750 | | National Instruments Corp. | | 21,450 |
| 500 | | Plexus Corp. (a) | | 6,875 |
| 750 | | Symbol Technologies, Inc. | | 11,370 |
| | | | | 142,982 |
| | | | | |
| | | ENERGY EQUIPMENT& SERVICES - 2.0% | | |
| 1,500 | | Baker Hughes, Inc. | | 66,495 |
| 1,000 | | BJ Services Co. | | 50,670 |
| 500 | | Cooper Cameron Corp. (a) | | 26,095 |
| 500 | | ENSCO International, Inc. | | 15,655 |
| 500 | | GlobalSantaFe Corp. (b) | | 15,700 |
| 1,600 | | Halliburton Co. | | 66,160 |
| 500 | | Noble Corp. (a)(b) | | 24,225 |
| 1,000 | | Patterson-UTI Energy, Inc. | | 20,000 |
| 500 | | Rowan Cos, Inc. (a) | | 12,950 |
| 2,000 | | Schlumberger Ltd. (b) | | 131,260 |
| 500 | | Tidewater, Inc. | | 16,965 |
| | | | | 446,175 |
| | | | | |
| | | FOOD & STAPLES RETAILING - 1.2% | | |
| 1,400 | | CVS Corp. | | 63,518 |
| 5,000 | | Walgreen Co. | | 190,900 |
| | | | | 254,418 |
| | | | | |
| | | FOOD PRODUCTS - 0.4% | | |
| 1,000 | | Hershey Foods Corp. | | 51,800 |
| 500 | | Lancaster Colony Corp. | | 21,840 |
| 530 | | Tootsie Roll Industries, Inc. | | 16,456 |
| | | | | 90,096 |
| | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2004 (Unaudited)
Number of Shares | | | | Market Value |
| | | | | |
| COMMON STOCKS (Continued) | | |
| | | HEALTH CARE EQUIPMENT& SUPPLIES - 4.2% | | |
| 1,800 | | Baxter International, Inc. | $ | 56,970 |
| 1,000 | | Becton, Dickinson & Co. | | 54,780 |
| 900 | | Biomet, Inc. | | 43,083 |
| 2,000 | | Boston Scientific Corp. (a) | | 69,620 |
| 1,000 | | C.R. Bard, Inc. | | 59,910 |
| 500 | | Cytyc Corp. (a) | | 13,420 |
| 500 | | Dentsply International, Inc. | | 26,305 |
| 700 | | Guidant Corp. | | 45,381 |
| 560 | | Hospira, Inc. (a) . . | | 18,049 |
| 4,400 | | Medtronic, Inc. | | 211,420 |
| 500 | | Resmed, Inc. (a) | | 25,030 |
| 500 | | Respironics, Inc. (a) | | 27,690 |
| 2,000 | | St Jude Medical, Inc. (a) | | 76,280 |
| 2,000 | | Stryker Corp. | | 87,980 |
| 500 | | Waters Corp. (a) | | 23,330 |
| 1,000 | | Zimmer Holdings, Inc. (a) | | 81,600 |
| | | | | 920,848 |
| | | | | |
| | | HEALTH CARE PROVIDERS &SERVICES - 3.4% | | |
| 500 | | Andrx Corp. (a) | | 8,900 |
| 1,650 | | Cardinal Health, Inc. | | 86,262 |
| 500 | | Cerner Corp. (a) | | 26,360 |
| 500 | | Dendrite International, Inc. (a) | | 8,535 |
| 1,000 | | First Health Group Corp. (a) | | 17,820 |
| 700 | | HCA, Inc. | | 27,594 |
| 1,100 | | Health Management Associates, Inc. - Class A | | 24,299 |
| 1,000 | | Horizon Health Corp. (a) | | 23,990 |
| 1,100 | | IMS Health, Inc. | | 24,827 |
| 1,000 | | Laboratory Corp of America Holdings (a) | | 47,950 |
| 500 | | LifePoint Hospitals, Inc. (a) | | 18,390 |
| 1,000 | | Lincare Holdings, Inc. (a) | | 38,590 |
| 1,100 | | McKesson Corp. | | 32,505 |
| 1,025 | | Medco Health Solutions, Inc. (a) | | 38,663 |
| 500 | | OCA, Inc. (a) | | 2,860 |
| 1,000 | | Patterson Cos, Inc. (a) | | 40,860 |
| 500 | | Pediatrix Medical Group, Inc. (a) | | 31,150 |
| 500 | | Priority Healthcare Corp. - Class B (a) | | 10,450 |
| | | | | |
Number of Shares | | | | Market Value |
| | | | | |
| | | HEALTH CARE PROVIDERS &SERVICES (Continued) | | |
| 750 | | Renal Care Group, Inc. (a) | $ | 24,975 |
| 1,900 | | Tenet Healthcare Corp. (a) | | 20,615 |
| 2,400 | | UnitedHealth Group, Inc. | | 198,840 |
| 1,000 | | WebMD Corp. (a) | | 7,250 |
| | | | | 761,685 |
| | | | | |
| | | HOUSEHOLD DURABLES - 0.5% | | |
| 500 | | Blyth, Inc. | | 14,655 |
| 500 | | Ethan Allen Interiors, Inc. | | 19,725 |
| 700 | | Leggett & Platt, Inc. | | 20,895 |
| 500 | | Mohawk Industries, Inc. (a) | | 43,850 |
| 300 | | The Stanley Works | | 14,028 |
| | | | | 113,153 |
| | | | | |
| | | HOUSEHOLD PRODUCTS - 3.7% | | |
| 500 | | Clorox Co. | | 27,560 |
| 2,000 | | Colgate-Palmolive Co. | | 91,980 |
| 2,000 | | Kimberly-Clark Corp. | | 127,220 |
| 10,600 | | Procter & Gamble Co. | | 566,888 |
| 500 | | WD-40 Co. | | 14,605 |
| | | | | 828,253 |
| | | | | |
| | | INDUSTRIAL CONGLOMERATES - 1.1% | | |
| 3,000 | | 3M Co. | | 238,770 |
| | | | | |
| | | | | |
| | | INTERNET & CATALOG RETAIL - 0.5% | | |
| 1,000 | | eBay, Inc. (a) | | 112,450 |
| | | | | |
| | | | | |
| | | INTERNET SOFTWARE &SERVICES - 0.1% | | |
| 166 | | Ariba, Inc. (a) | | 2,739 |
| 500 | | Retek, Inc. (a) | | 3,050 |
| 600 | | VeriSign, Inc. (a) | | 19,740 |
| | | | | 25,529 |
| | | | | |
| | | INFORMATION TECHNOLOGY SERVICES - 1.7% | | |
| 500 | | Affiliated Computer Services, Inc. - Class A (a) | | 29,590 |
| | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2004 (Unaudited)
Number of Shares | | | | Market Value |
| | | | | |
| COMMON STOCKS (Continued) | | |
| | | INFORMATION TECHNOLOGY SERVICES (Continued) | | |
| 2,000 | | Automatic Data Processing, Inc. | $ | 91,060 |
| 500 | | Ciber, Inc. (a) | | 4,665 |
| 500 | | Convergys Corp. (a) | | 7,435 |
| 500 | | DST Systems, Inc. (a) | | 24,375 |
| 3,000 | | First Data Corp. | | 123,270 |
| 500 | | Keane, Inc. (a) | | 7,750 |
| 500 | | MedQuist, Inc. (a) | | 6,250 |
| 1,200 | | Paychex, Inc. | | 39,792 |
| 500 | | Sabre Holdings Corp. | | 11,540 |
| 1,000 | | SunGard Data Systems, Inc. (a) | | 26,510 |
| 1,100 | | Unisys Corp. (a) | | 12,639 |
| | | | | 384,876 |
| | | | | |
| | | LEISURE EQUIPMENT &PRODUCTS - 0.5% | | |
| 500 | | Callaway Golf Co. | | 5,880 |
| 1,500 | | Mattel, Inc. | | 28,425 |
| 1,000 | | Polaris Industries, Inc. | | 65,900 |
| | | | | 100,205 |
| | | | | |
| | | MACHINERY - 1.2% | | |
| 1,000 | | Danaher Corp. | | 56,880 |
| 700 | | Dover Corp. | | 28,315 |
| 1,100 | | Illinois Tool Works, Inc. | | 103,653 |
| 500 | | Kaydon Corp. | | 16,240 |
| 500 | | Pall Corp. | | 13,545 |
| 500 | | Parker Hannifin Corp. | | 37,400 |
| | | | | 256,033 |
| | | | | |
| | | MEDIA - 0.5% | | |
| 500 | | Catalina Marketing Corp. | | 14,050 |
| 500 | | Getty Images, Inc. (a) | | 29,125 |
| 500 | | John Wiley & Sons, Inc. - Class A | | 16,525 |
| 700 | | The McGraw-Hill Companies, Inc. | | 61,411 |
| | | | | 121,111 |
| | | | | |
| | | METALS & MINING - 0.5% | | |
| 1,000 | | Meridian Gold, Inc. (a)(b) | | 19,570 |
| 1,000 | | Newmont Mining Corp. | | 47,350 |
| 1,000 | | Nucor Corp. | | 52,900 |
| | | | | 119,820 |
| | | | | |
Number of Shares | | | | Market Value |
| | | | | |
| | | MULTILINE RETAIL - 0.6% | | |
| 500 | | 99 Cents Only Stores (a) | $ | 7,460 |
| 500 | | Big Lots, Inc. (a) | | 5,800 |
| 1,000 | | Dollar General Corp. | | 19,750 |
| 500 | | Dollar Tree Stores, Inc. (a) | | 13,915 |
| 1,000 | | Family Dollar Stores, Inc. | | 29,300 |
| 1,200 | | Kohl’s Corp. (a) | | 55,392 |
| | | | | 131,617 |
| | | | | |
| | | OFFICE ELECTRONICS - 1.1% | | |
| 5,000 | | Canon, Inc. ADR | | 250,850 |
| | | | | |
| | | | | |
| | | OIL & GAS - 11.0% | | |
| 8,880 | | ChevronTexaco Corp. | | 484,848 |
| 700 | | EOG Resources, Inc. | | 52,549 |
| 26,200 | | Exxon Mobil Corp. | | 1,342,750 |
| 1,000 | | Murphy Oil Corp. | | 85,310 |
| 5,000 | | Shell Transport & Trading Co PLC ADR | | 253,100 |
| 2,000 | | Total SA ADR | | 219,200 |
| | | | | 2,437,757 |
| | | | | |
| | | PERSONAL PRODUCTS - 1.1% | | |
| 1,600 | | Avon Products, Inc. | | 60,064 |
| 4,000 | | The Gillette Co. | | 173,960 |
| | | | | 234,024 |
| | | | | |
| | | PHARMACEUTICALS - 14.7% | | |
| 5,600 | | Abbott Laboratories | | 234,976 |
| 500 | | Allergan, Inc. | | 36,750 |
| 4,000 | | AstraZeneca Plc ADR | | 157,560 |
| 3,000 | | Aventis SA ADR | | 265,680 |
| 6,200 | | Bristol-Myers Squibb Co. | | 145,700 |
| 4,000 | | Eli Lilly & Co. | | 213,320 |
| 1,000 | | Forest Laboratories, Inc. (a) | | 38,970 |
| 11,784 | | Johnson & Johnson | | 710,811 |
| 666 | | King Pharmaceuticals, Inc. (a) | | 8,292 |
| 8,500 | | Merck & Co., Inc. | | 238,170 |
| 1,350 | | Mylan Laboratories | | 24,516 |
| 500 | | Noven Pharmaceuticals, Inc. (a) | | 9,140 |
| 31,000 | | Pfizer, Inc. | | 860,870 |
| 5,400 | | Schering-Plough Corp. | | 96,390 |
| 190 | | Teva Pharmaceutical Industries, Ltd. ADR | | 5,183 |
| | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2004 (Unaudited)
Number of Shares | | | | Market Value |
| | | | | |
| COMMON STOCKS (Continued) | | |
| | | PHARMACEUTICALS (Continued) | | |
| 5,300 | | Wyeth | $ | 211,311 |
| 500 | | XOMA Ltd (a)(b) | | 1,000 |
| | | | | 3,258,639 |
| | | | | |
| | | PREPACKAGED SOFTWARE - 0.0% | | |
| 500 | | Foundry Networks, Inc. (a) | | 6,675 |
| | | | | |
| | | | | |
| | | REAL ESTATE - 0.1% | | |
| 500 | | Public Storage, Inc. | | 26,690 |
| | | | | |
| | | | | |
| | | ROAD & RAIL - 0.1% | | |
| 832 | | Werner Enterprises, Inc. | | 18,720 |
| | | | | |
| | | | | |
| | | SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT - 6.1% | | |
| 1,300 | | Altera Corp. (a) | | 29,484 |
| 1,000 | | Analog Devices, Inc. | | 36,950 |
| 5,800 | | Applied Materials, Inc. (a) | | 96,512 |
| 600 | | Axcelis Technologies, Inc. (a) | | 4,380 |
| 500 | | Broadcom Corp. - Class A (a) | | 16,260 |
| 500 | | Cabot Microelectronics Corp. (a) | | 18,475 |
| 500 | | Credence Systems Corp. (a) | | 3,820 |
| 500 | | Cree, Inc. (a) | | 17,890 |
| 500 | | Integrated Circuit Systems, Inc. | | 11,820 |
| 25,000 | | Intel Corp. | | 558,750 |
| 1,000 | | Intersil Corp. - Class A | | 16,100 |
| 600 | | KLA-Tencor Corp. (a) | | 27,036 |
| 1,000 | | Linear Technology Corp. | | 38,160 |
| 1,000 | | Marvell Technology Group Ltd. (a)(b). | | 32,060 |
| 2,000 | | Maxim Integrated Products, Inc. | | 81,920 |
| 500 | | Micrel, Inc. (a) | | 5,340 |
| 750 | | Microchip Technology, Inc. | | 21,135 |
| 1,900 | | Micron Technology, Inc. (a) | | 21,052 |
| 2,000 | | National Semiconductor Corp. (a) | | 30,920 |
| 500 | | Rambus, Inc. (a) | | 11,555 |
| 500 | | RF Micro Devices, Inc. (a) | | 3,480 |
| 500 | | Silicon Laboratories, Inc. (a) | | 15,070 |
| 500 | | Skyworks Solutions, Inc. (a) | | 4,965 |
| 500 | | Teradyne, Inc. (a) | | 8,530 |
| 7,000 | | Texas Instruments, Inc. | | 169,260 |
| | | | | |
Number of Shares | | | | Market Value |
| | | | | |
| | | SEMICONDUCTOR & SEMICONDUCTOR EQUIPMENT (Continued) | | |
| 2,000 | | Xilinx, Inc. | $ | 62,440 |
| | | | | 1,343,364 |
| | | | | |
| | | SOFTWARE - 6.7% | | |
| 900 | | BMC Software, Inc. (a) | | 16,722 |
| 1,100 | | Cadence Design Systems, Inc. (a) | | 15,114 |
| 600 | | Citrix Systems, Inc. (a) | | 14,166 |
| 1,000 | | Electronic Arts, Inc. (a) | | 48,900 |
| 750 | | Fair Isaac Corp. | | 24,885 |
| 700 | | Intuit, Inc. (a) | | 29,288 |
| 500 | | Macromedia, Inc. (a) | | 14,265 |
| 500 | | Mentor Graphics Corp. (a) | | 6,275 |
| 500 | | Mercury Interactive Corp. (a) | | 22,805 |
| 35,600 | | Microsoft Corp. | | 954,436 |
| 16,100 | | Oracle Corp. (a) | | 203,826 |
| 1,000 | | Parametric Technology Corp. (a) | | 5,850 |
| 215 | | Peoplesoft, Inc. (a) | | 5,076 |
| 500 | | Quest Software, Inc. (a) | | 7,740 |
| 1,000 | | Symantec Corp. (a) | | 63,810 |
| 1,000 | | Synopsys, Inc. (a) | | 17,630 |
| 1,300 | | Veritas Software Corp. (a) | | 28,470 |
| | | | | 1,479,258 |
| | | | | |
| | | SPECIALTY RETAIL - 4.6% | | |
| 500 | | Autozone, Inc. (a) | | 42,800 |
| 1,000 | | Bed Bath & Beyond, Inc. (a) | | 39,928 |
| 9,200 | | Home Depot, Inc. | | 384,100 |
| 1,600 | | Limited Brands | | 39,104 |
| 2,800 | | Lowe’s Cos, Inc. | | 154,924 |
| 500 | | Men’s Wearhouse, Inc. (a) | | 15,825 |
| 1,000 | | Michaels Stores, Inc. | | 27,330 |
| 1,200 | | Office Depot, Inc. (a) | | 19,680 |
| 700 | | RadioShack Corp. | | 22,099 |
| 2,000 | | Ross Stores, Inc. | | 53,800 |
| 1,700 | | Staples, Inc. | | 54,247 |
| 1,800 | | The Gap Inc. | | 39,330 |
| 500 | | The Sherwin-Williams Co. | | 22,300 |
| 500 | | Tiffany & Co. | | 15,300 |
| 2,200 | | TJX Cos, Inc. | | 51,788 |
| 1,000 | | Williams-Sonoma, Inc. (a) | | 36,610 |
| | | | | 1,019,165 |
| | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
SCHEDULE OF INVESTMENTS (Continued)
November 30, 2004 (Unaudited)
Number of Shares | | | | Market Value |
| | | | | |
| COMMON STOCKS (Continued) | | |
| | | TEXTILES, APPAREL& LUXURY GOODS - 0.5% | | |
| 1,000 | | Liz Claiborne, Inc | $ | 41,070 |
| 600 | | Nike, Inc. - Class B | | 50,796 |
| 500 | | VF Corp. | | 26,995 |
| | | | | 118,861 |
| | | | | |
| | | WIRELESS TELECOMMUNICATION SERVICES - 1.0% | | |
| 8,000 | | Vodafone Group PLC ADR | | 218,160 |
| | | Total Common Stock | | |
| | | (Cost $24,376,426) | $ | 21,529,269 |
| | | Assets, Less Other Liabilities - 2.8% | | 617,293 |
| | | TOTAL NET ASSETS - 100.0% | $ | 22,146,562 |
| | | | | |
| | | | | |
| ADR | | American Depository Receipt | | |
| (a) | | Non-income producing | | |
| (b) | | U.S. security of foreign company | | |
| | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
STATEMENT OF ASSETS AND LIABILITIES
November 30, 2004 (Unaudited)
Assets: | | | |
| Investments in securities, at fair value (cost: $24,376,426) | | $21,529,269 | |
| Cash. | | 509,669 | |
| Receivable for Fund shares sold | | 150 | |
| Dividends receivable | | 150,949 | |
| Other assets | | 16,459 | |
Total Assets | | 22,206,496 | |
| | | | |
Liabilities: | | | |
| Payable to Advisor | | 11,675 | |
| Accrued audit expense | | 20,749 | |
| Accrued expenses | | 27,510 | |
Total Liabilities | | 59,934 | |
Net Assets | | $22,146,562 | |
| | | | |
| | | | |
| | | | | |
Net Assets Consist of: | | | | |
| Paid in capital | | $ | 29,142,875 | |
| Undistributed net investment income | | | 91,337 | |
| Accumulated net realized loss on investments | | | (4,240,493 | ) |
| Unrealized depreciation on investments | | | (2,847,157 | ) |
Net Assets | | $ | 22,146,562 | |
| | | | | |
| | | | | |
| | | | | |
| Shares of capital stock outstanding; unlimited number of shares authorized, no par value | | | 3,290,999 | |
Net asset value, redemption and offering price per share | | $ | 6.73 | |
| | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
STATEMENT OF OPERATIONS
| | | Six Months Ended November 30, 2004 (Unaudited) | |
Investment income: | | | |
Dividends (net of foreign taxes withheld of $1,286) | | $ 251,011 | |
| | | | |
Expenses: | | | |
Investment advisory fees | | 79,837 | |
Shareholder servicing and accounting fees | | 41,700 | |
Administration fees | | 21,455 | |
License fees | | 12,708 | |
Professional fees | | 12,467 | |
Registration fees | | 11,993 | |
Custody fees | | 1,150 | |
Reports to shareholders | | 2,755 | |
Miscellaneous expenses | | 1,196 | |
Total expenses | | 185,261 | |
Less fees reimbursed by Advisor | | (25,587) | |
Net expenses | | 159,674 | |
Net investment income | | 91,337 | |
Net realized and unrealized gain (loss): | | | |
| Net realized gain on investments | | 7,456 | |
| Change in unrealized appreciation (depreciation) on investments | | 202,169 | |
Net realized and unrealized gain on investments | | 209,625 | |
Net increase in net assets from operations | | $ | 300,962 | |
| | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
STATEMENTS OF CHANGES IN NET ASSETS
| | | Six Months Ended November 30, 2004 (Unaudited) | | Year Ended May 31, 2004 | |
Operations: | | | | | |
| Net investment income (loss) | | $ 91,337 | | $ (49,937) | |
| Net realized gain (loss) on investments | | 7,456 | | (105,624) | |
| Change in unrealized appreciation (depreciation) on investments | | 202,169 | | 2,956,533 | |
Net increase in net assets from operations | | 300,962 | | 2,800,972 | |
| | | | | | |
Capital share transactions (Note 4): | | | | | |
| Shares sold | | | 695,630 | | | 2,121,897 | |
| Shares reinvested | | | — | | | 6,068 | |
| Shares redeemed | | | (289,299 | ) | | (1,593,376 | ) |
Net increase in net assets from capital shares transactions | | | 406,331 | | | 534,589 | |
| | | | | | | | |
Distributions to shareholders: | | | | | | | |
| From net investment income | | | | | | (33,209 | ) |
Total distributions to shareholders | | | | | | (33,209 | ) |
| | | | | | | | |
Total increase in net assets | | | 707,293 | | | 3,302,352 | |
| | | | | | | | |
Net assets at beginning of year | | | 21,439,269 | | | 18,136,917 | |
Net assets at end of period (including accumulated undistributed net investment income of $91,337 and $0, respectively) | | $ | 22,146,562 | | $ | 21,439,269 | |
| | | | | | | | |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
FINANCIAL HIGHLIGHTS
Selected data for each share of capital stock outstanding
| | | Six Months Ended November 30, 2004 (Unaudited) | | Year Ended May 31, 2004 | | Year Ended May 31, 2003 | | Year Ended May 31, 2002 | | For the Period June 29, 2000(1) to May 31, 2001 | |
Net asset value | | | | | | | | | | | |
Beginning of period | | $6.64 | | $5.73 | | $6.26 | | $7.58 | | $10.00 | |
| | | | | | | | | | | | |
Operations: | | | | | | | | | | | |
Net investment income (loss) | | 0.03 | (2) | (0.02) | (2) | 0.02 | (3) | 0.01 | (3) | 0.01 | |
Net realized and unrealized | | | | | | | | | | | |
gains (losses) on investments | | | 0.06 | | | 0.94 | | | (0.54 | ) | | (1.32 | ) | | (2.43 | ) |
Total from operations | | | 0.09 | | | 0.92 | | | (0.52 | ) | | (1.31 | ) | | (2.42 | ) |
| | | | | | | | | | | | | | | |
Distributions to shareholders: | | | | | | | | | | | | | | |
From net investment income | | | 0.00 | | | (0.01 | ) | | (0.01 | ) | | (0.01 | ) | | 0.00 | |
Total distributions to shareholders | | | 0.00 | | | (0.01 | ) | | (0.01 | ) | | (0.01 | ) | | 0.00 | |
| | | | | | | | | | | | | | | | | |
Net asset value | | | | | | | | | | | | | | | | |
End of period | | $ | 6.73 | | $ | 6.64 | | $ | 5.73 | | $ | 6.26 | | $ | 7.58 | |
| | | | | | | | | | | | | | | | | |
| Total investment return | | | 1.36% | (4) | | 16.07 | % | | (8.22 | )% | | (17.34 | )% | | (25.02)% | (4)(5) |
| | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 22,147 | | $ | 21,439 | | $ | 18,070 | | $ | 20,020 | | $ | 20,497 | |
| | | | | | | | | | | | | | | | | |
RATIOS | | | | | | | | | | | | | | | | |
Expenses to average net assets | | | | | | | | | | | | | | | | |
Before expense reimbursement | | | 1.74% | (6) | | 1.99 | % | | 2.25 | % | | 2.06 | % | | 1.97% | (6) |
After expense reimbursement | | | 1.50% | (6) | | 1.47 | % | | 0.95 | % | | 0.90 | % | | 0.90% | (6) |
Net investment income (loss) | | | | | | | | | | | | | | | | |
to average net assets | | | | | | | | | | | | | | | | |
Before expense reimbursement | | | 0.86% | (6) | | (0.77 | )% | | (0.94 | )% | | (1.07 | )% | | (0.99%) | (6) |
After expense reimbursement | | | 0.62% | (6) | | (0.25 | )% | | 0.36 | % | | 0.09 | % | | 0.08% | (6) |
Portfolio turnover rate(7) | | | 0.0 | % | | 4.5 | % | | 5.1 | % | | 13.7 | % | | 20.0% | (4) |
| (1) | Commencement of operations. |
| (2) | Net investment income (loss) per share is calculated using ending balances prior to consideration of adjustments for permanent book and tax differences. |
| (3) | Net investment income (loss) per share is based on daily average shares outstanding. |
| (4) | Not annualized. |
| (5) | The investment return for Class K was calculated using the date the Fund became effective with the SEC, June 30, 2000. |
| (6) | Annualized. |
| (7) | Calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued. |
See notes to the financial statements.
DOW JONES ISLAMIC FUND
NOTES TO THE FINANCIAL STATEMENTS
November 30, 2004 (Unaudited)
1. Organization
Allied Asset Advisors Funds (the “Trust”), an open-end management investment company, was organized as a Delaware business trust on January 14, 2000. The Trust currently offers one series of shares to investors, the Dow JonesSM Islamic Fund (f/k/a Dow Jones Islamic Index Fund) (the “Fund”), a diversified series of the Trust. Allied Asset Advisors, Inc. (“AAA”or the “Advisor”), a Delaware corporation, serves as an investment advisor to the Fund.
The trust is authorized to issue an unlimited number of shares without par value, of each series. The Trust currently offers one class of shares of the Fund: Class K. Effective October 30, 2003, the Trust terminated Class M shares.
The investment objective of the Fund seeks growth of capital while adhering to Islamic principles. To achieve the investment objective, under normal circumstances, the Fund invests at least 80% of its net assets in domestic and foreign securities included in the Dow Jones Islamic Market IndexesSM, as well as up to 20% of its net assets in securities chosen by the Fund’s investment advisor that meet Islamic principles. Prior to October 1, 2003, the Fund’s investment objective was to matc h the total return of the Dow Jones Islamic Market USA IndexSM (the “Index”) by investing substantially all of its assets in roughly the same proportions as the stocks were represented in the Index.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
Use of Estimates: In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from these estimates.
Security Valuation: Investment securities are carried at value determined using the following valuation methods:
• Equity securities listed on a U.S. securities exchange or NASDAQ for which market quotations are readily available are valued at the last quoted sale price on the valuation date.
• Options, futures, unlisted U.S. securities and listed U.S. securities not traded on the valuation date for which market quotations are readily available are valued at the most recent quoted bid price. The Fund did not hold any such securities during the six months ended November 30, 2004.
• Securities or other assets for which market quotations are not readily available are valued at fair value as determined in good faith by the investment advisor under direction of the Board of Trustees. The Fund did not hold any such securities during the six months ended November 30, 2004.
Foreign Securities: Investing in securities of foreign companies and foreign governments involves special risks and consideration not typically associated with investing in U.S. companies and the U.S. government. These risks include revaluation of currencies and future adverse political and economic developments. Moreover, securities of many foreign companies and foreign governments and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and the U.S. government.
Federal Income Taxes: It is the Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and the Fund intends to distribute all of its taxable income and net capital gains to shareholders. Therefore, no federal income tax provision is required. The Fund intends to utilize provisions of the federal income tax laws which allow it to carry a realized capital loss forward for eight years following the year of the loss and offset such losses against any future realized capital gains. At May 31, 2004, the Fund had capital loss carryovers as follows:
DOW JONES ISLAMIC FUND
NOTES TO THE FINANCIAL STATEMENTS (Continued)
November 30, 2004 (Unaudited)
Net Capital Loss Carryovers* | | Capital Loss Carryover Expiration |
| | | |
| $1,071,309 | | 5/31/2009 |
| 146,365 | | 5/31/2010 |
| 1,599,476 | | 5/31/2011 |
| 1,421,345 | | 5/31/2012 |
| $4,238,495 | | |
| | | |
* Capital gain distributions will resume in the future to the extent gains are realized in excess of the available carryforwards.
As of May 31, 2004, the components of distributable earnings on a tax basis were as follows:
| Cost of investments | $ | 24,393,178 |
| | | |
| Gross tax unrealized appreciation | | 3,030,680 |
| Gross tax unrealized depreciation | | (6,080,016) |
| Net tax unrealized depreciation | $ | (3,049,336) |
| | | |
| Undistributed ordinary income | $ | — |
| Undistributed long-term capital gain | | — |
| Total distributable earnings | $ | — |
| | | |
| Other accumulated losses | $ | (4,247,937) |
| Total accumulated losses | $ | (7,297,273) |
| | | |
Under current tax laws, losses realized after October 31 may be deferred and treated as occurring on the first business day of the following fiscal year. The Fund had post-October losses, which will be treated as arising on the first day of the fiscal year ended May 31, 2004 of $9,442.
Distributions to Shareholders: The Fund will distribute substantially all of the net investment income and net realized gains that it has realized on the sale of securities. These income and gains distributions will generally be paid once each year, on or before December 31. The character of distributions made during the year from net investment income or net realized gains may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expense or gain items for financial reporting and tax reporting purposes.
On December 30, 2003, a distribution of $.011 per share was declared for Class K shares. The dividend was paid on December 30, 2003, to shareholders of record on December 29, 2003.
The tax character of distributions paid were as follows:
| | Six Months Ended November 30, 2004 | | Year Ended May 31, 2004 |
| | | | |
| Ordinary income | $— | | $33,209 |
| | | | |
Other: Security and shareholder transactions are recorded on the trade date. Realized gains and losses on sales of investments are calculated on the identified cost basis. Dividend income and distributions to shareholders are recorded on the ex-dividend date.
3. Investment Advisory Agreement
The Trust has an Investment Advisory Agreement (the “Agreement”) with the Advisor, with whom certain officers and Trustees of the Trust are affiliated, to furnish investment advisory services to the Fund. Under the terms of the Agreement, the Trust, on behalf of the Fund, compensates the Advisor for its management services at the annual rate of 0.75% of the Fund’s daily average net assets.
Effective July 1, 2003, the Advisor began to waive or reimburse the Fund if the aggregate annual operating expenses exceed 1.50% of average net assets for Class K.
Prior to July 1, 2003, if the aggregate annual operating expenses exceeded 0.95% of average net assets for Class K shares, the Advisor waived or reimbursed the Fund for the amount of such excess. Prior to June 30, 2002, if the aggregate annual operating expenses exceeded 0.90% of average net assets for Class K shares, the Advisor waived or reimbursed the Fund for the amount of such excess.
Accordingly, for the six months ended November 30, 2004, the Advisor has waived or reimbursed expenses of the Fund in the amount of $25,587.
4. Capital Share Transactions
Transactions in Class K shares of the Fund for the six months ended November 30, 2004, were as follows:
| | Amount | | Shares |
| Shares sold | $695,630 | | 107,128 |
| Shares redeemed | (289,299) | | (44,219) |
| Net increase | $406,331 | | 62,909 |
| | | | |
DOW JONES ISLAMIC FUND
NOTES TO THE FINANCIAL STATEMENTS (Continued)
November 30, 2004 (Unaudited)
Transactions in Class K shares of the Fund for the year ended May 31, 2004, were as follows:
| | Amount | | Shares |
| Shares sold | $ 2,095,878 | | 325,967 |
| Shares reinvested | 6,068 | | 924 |
| Shares redeemed | (1,493,989) | | (249,689) |
| Net increase | $607,957 | | 77,202 |
| | | | |
Transactions in Class M shares of the Fund for the year ended May 31, 2004, were as follows:
| | Amount | | Shares |
| Shares sold | $26,019 | | 4,334 |
| Shares redeemed | (99,387) | | (16,131) |
| Net decrease | $(73,368) | | (11,797) |
| | | | |
5. Securities Transactions
During the six months ended November 30, 2004, the cost of purchases and proceeds from sales of investment securities, other than short-term investments were $0 and $24,006, respectively.
DOW JONES ISLAMIC FUND
ADDITIONAL INFORMATION
November 30, 2004 (Unaudited)
Proxy Voting Policies and Procedures (Unaudited)
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (877) 417-6161 or by accessing the Fund’s website at http://www.investaaa.com. Furthermore, you can obtain the description on the SEC’s website at http://www.sec.gov.
Proxy Voting Records for the 12-Month Period Ended June 30, 2004 (Unaudited)
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling (877) 417-6161. Furthermore, you can obtain the Fund’s proxy voting records on the SEC’s website at http://www.sec.gov.
Availability of Quarterly Portfolio Schedule (Unaudited)
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The filing will be available, upon request, by calling (877) 417-6161. Furthermore, you will be able to obtain a copy of the filing on the SEC’s website at http://www.sec.gov beginning with the filing for the period ended August 31, 2004. The Fund’s Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
(This Page Intentionally Left Blank.)
INVESTMENT ADVISOR
AAA
Allied Asset Advisors, Inc.
Burr Ridge, Illinois
DISTRIBUTOR
Quasar Distributors, LLC
Milwaukee, Wisconsin
INDEPENDENT AUDITORS
Tait, Weller & Baker
Philadelphia, Pennsylvania
ADMINISTRATOR, TRANSFER AGENT,
AND FUND ACCOUNTANT
U.S. Bancorp Fund Services, LLC
Milwaukee, Wisconsin
CUSTODIAN
U.S. Bank, N.A.
Cincinnati, Ohio
This report has been prepared for shareholders and may be distributed to others only if preceded or accompanied by a current prospectus. Read the Prospectus carefully before you invest or send money. The Prospectus contains important information about the Fund, including charges and expenses. The principal value of your investment will fluctuate and your shares may be worth less than your original cost. Quasar Distributors, LLC is the Distributor for the Fund. 01/05
Semi-Annual Report
November 30, 2004
(Unaudited)
Dow JonesSM
Islamic Fund
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable to open-end investment companies.
Item 6. Schedule of Investments.
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this report.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchases.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors/trustees.
Item 11. Controls and Procedures.
| (a) | The Registrant’s President/Chief Executive Officer and Treasurer/Chief Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 15d-15(b) under the Securities Exchange Act of 1934, as amended. |
| (b) | There were no significant changes in the Registrant's internal controls over financial reporting that occurred during the Registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 12. Exhibits.
(a) (1) Incorporated by reference to previous N-CSR filing.
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
(3) Not applicable to open-end investment companies.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Allied Asset Advisors Funds
By (Signature and Title)/s/ Bassam Osman
Bassam Osman, President
Date 2/1/05
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ Bassam Osman
Bassam Osman, President
Date _2/1/05_________________________________
By (Signature and Title)*/s/ Mohammad Basheeruddin
Mohammad Basheeruddin, Treasurer
Date_2/3/05__________________________________
