AARP Portfolios N-CSR Certified annual shareholder report (management investment company)

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: 811-21839

AARP PORTFOLIOS

(Exact name of registrant as specified in charter)

650 F. Street, N.W.

Washington, DC 20004

(Address of principal executive offices) (Zip code)

(Name and Address of Agent for Service)	Copy to:
Richard Hisey AARP Financial Incorporated Two Highwood Drive, Suite 202 Tewksbury, MA 01876	Gary O. Cohen, Esq. Jorden Burt LLP 1025 Thomas Jefferson Street, NW Suite 400 East Washington, DC 20007-5208

Registrant’s telephone number, including area code: (202) 434-3650

Date of fiscal year end: June 30

Date of reporting period: June 30, 2008

Item 1. Report to Shareholders

Annual Report

June 30, 2008

U.S. Bond Market Portfolio

U.S. Stock Market Portfolio

International Stock Market Portfolio

…

A NOTE ABOUT AARP PORTFOLIOS

The series, “Portfolios”, of AARP Portfolios seek to match the performance of market indexes for U.S. stocks, international stocks, and U.S. bonds. They serve as the underlying investments to AARP Funds’ asset allocation funds, which include AARP Conservative Fund, AARP Moderate Fund, AARP Aggressive Fund, and AARP Income Fund, collectively, “Funds”.

Shares of AARP Portfolios are not offered to the public for investment.

An investor should consider the investment objectives, risks, charges and expenses of AARP Funds carefully before investing. To get a prospectus containing this and other information, please call 1-800-958-6457. Read the prospectus carefully before you invest.

AARP Funds are distributed by ALPS Distributors, Inc.

Table of Contents

U.S. Bond Market Portfolio
Portfolio composition	1
Performance	1
Performance discussion	2
U.S. Stock Market Portfolio
Portfolio composition	4
Performance	4
Performance discussion	5
International Stock Market Portfolio
Portfolio composition	6
Performance	6
Performance discussion	7
Country allocation	7
Understanding Your Expenses (unaudited)	8

Financial Statements	10
Portfolio of investments	10
Statements of assets and liabilities	73
Statements of operations	74
Statements of changes in net assets	75
Financial highlights	78
Notes to Financial Statements	80
AARP Portfolios— Supplemental Information (unaudited)	92

An investor should consider the investment objectives, risks, charges and expenses of AARP Funds carefully before investing. To get a prospectus containing this and other information, please call 1-800-958-6457. Read the prospectus carefully before you invest.

AARP Funds are distributed by ALPS Distributors, Inc.

AARP Financial, Inc. is not affiliated with ALPS Distributors, Inc.

U.S. Bond Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 1

U.S. Bond Market Portfolio

Portfolio composition (As a percentage of net assets)
June 30, 2008
Mortgage-backed securities	39.7%	Asset-backed securities	0.5 %
U.S. Treasury	24.2%	Municipal bonds	0.1 %
Corporate bonds	18.6%	Cash equivalents	7.3 %
U.S. Government Agencies	9.3%	Other assets and liabilities, net	(9.5)%
Commercial mortgage-backed securities	5.0%	Total net assets	100.0 %
International debt	4.8%
See Notes to Financial Statements.

Performance as of June 30, 2008
Growth of $10,000 This graph illustrates the hypothetical investment of $10,000 in the U.S. Bond Market Portfolio from January 1, 2006 (commencement of operations) through June 30, 2008, compared to the Lehman Brothers Aggregate Bond Index®.
	This hypothetical example does not represent the returns of any particular investment.

Performance Summary	Average Annual Returns as of June 30, 2008	1-Year	Since inception
	U.S. Bond Market Portfolio	7.20%	4.71%1
	Lehman Brothers Aggregate Bond Index®	7.12%	4.96%1

Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal
value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund
performance changes over time and current performance may be lower or higher than what is stated. Returns shown do not
reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Mutual funds
are not obligations of, or guaranteed, by any bank and are not federally insured. The performance of the Portfolios assumes the
reinvestment of all dividends and distributions. The indexes above have been adjusted to reflect reinvestment of dividends on
securities in the indexes. The adviser is waiving a portion of its advisory fee and other operating expenses. Had the fees not been
waived or reimbursed, returns would have been lower. It is not possible to invest directly in an Index.

For the most recent month-end performance and after-tax returns, visit www.aarpfunds.com or call 1-800-958-6457.

¹  For the period from January 1, 2006 (commencement of operations) to June 30, 2008.

Sources: Lehman Brothers, Inc., AARP Financial

2 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Bond Market Portfolio

Lehman Brothers Aggregate Bond Index

This index serves as the benchmark for the U.S. Bond Market Portfolio. The index includes a large variety of U.S. bonds that are investment grade and taxable, covering three major types of bonds: government and corporate bonds, mortgage-backed securities and asset-backed securities. The index is unmanaged and you cannot directly invest in it. In addition, indexes do not have expenses.

U.S. Bond Market Portfolio

Performance discussion

The Portfolio seeks to replicate the total return of the Lehman Brothers Aggregate Bond Index.

For the 12-month period ended June 30, 2008, the U.S. Bond Market portfolio returned +7.20%, net of fees, versus the benchmark return of +7.12%. The index return reflects all items in terms of income, gain and loss, and the reinvestment of other income.

During the 2nd half of 2007, as the deep and broad impact of subprime residential mortgage distress on the economy and the investment markets became apparent, investor risk aversion increased, non-government credit spreads widened sharply, and a ‘flight to quality’ emerged in government bond markets. U.S. economic reports continued to be mixed, but housing data was distinctly downbeat. After leaving interest rates unchanged for 15 months, the Federal Reserve’s Open Market Committee announced that financial market turbulence had increased the downside risks to growth “appreciably.” At its September meeting, it cut the federal funds target by 50 basis points to 4.75%. In fact, the Fed, demonstrating that it was taking note of what was happening in the markets, lowered its lending rate several times during the last half of 2007 and encouraged borrowing at its discount window. Overall, the increase in volatility due to sub-prime concerns and the mixed economic outlook turned into solid gains for Treasury benchmarks. Treasury yields fell and their prices rose as investors opted for less risky fixed-income alternatives.

In the 1st half of 2008, growing concern about a recessionary environment began to proliferate, driven in part by continued and worsening housing woes resulting in additional write-downs. This activity culminated at the end of the 1st quarter in the forced buyout of Bear Stearns by JP Morgan Chase. All of the larger fixed income sectors posted negative excess returns, relative to similar maturity U.S. Treasury securities, for the 1st quarter and the Lehman Brothers Aggregate Bond Index posted the worst reported excess return number in its 30 year history. Treasury rates continued to decrease in the 1st quarter, particularly in the short end, on the heels of an aggressively easing Federal Reserve. The Fed lowered the Federal Funds rate by 200 basis points in the quarter. Two of the moves were 75 basis points each—the first one in January being the largest in over twenty years. The fixed income markets posted positive returns in April and May; however, fixed income markets were once again buffeted by familiar headwinds in June. Rising oil and food prices and the resultant inflation fears, the probability of continued write-offs on the part of investment banks, and the downgrades of bond insurers MBIA and Ambac were all catalysts for market sentiment turning negative. In addition, declining U.S. equities and rising commodity prices also helped define a more negative tone in the fixed income markets as the 2nd quarter ended.

U.S. Bond Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 3

The Portfolio invests in investment-grade bonds, and uses a sampling strategy to gain benchmark exposure. The emphasis of this strategy is to achieve a sampling of a broad array of positions so as to eliminate any excessive over/underweight of individual positions. Our portfolio is built with no active management bias and seeks to match the index in all major characteristics, such as duration, term structure, quality distribution, and issuer and sector exposure. As of June 30, 2008 the Portfolio held 606 of the 9,469 benchmark constituents, or roughly 6.40%. The Portfolio return difference verses its benchmark is expected due to the Portfolio’s sampling strategy. This performance variance will get smaller as the Portfolio continues to grow in asset size.

Sources: Bloomberg, SSgA Performance Group, FactSet

This material is solely for the private use of SSgA clients and is not intended for public dissemination.

The information contained herein does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. Past performance is no guarantee of future results. The Lehman Index names are trademarks of Lehman Brothers, Inc. The views expressed are the views of State Street Global Advisors’ Global Fixed Income Group only through the period ended June 30, 2008.

4 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio

Portfolio composition (As a percentage of net assets)
June 30, 2008
Information technology	15.6%	Materials	4.8%
Financials	14.6%	Utilities	4.5%
Energy	14.0%	Telecommunications services	3.1%
Industrials	12.0%	Cash equivalents	0.1%
Health care	11.1%	Other assets and liabilities, net	2.9%
Consumer discretionary	9.5%	Total net assets	100.0%
Consumer staples	7.8%
See Notes to Financial Statements.

Performance as of June 30, 2008
Growth of $10,000 This graph illustrates the hypothetical investment of $10,000 in the U.S. Stock Market Portfolio from January 1, 2006 (commencement of operations) through June 30, 2008, compared to the MSCI U.S. Investable Market 2500 Index®.
	This hypothetical example does not represent the returns of any particular investment.

Performance Summary	Average Annual Returns as of June 30, 2008	1-Year	Since inception
	U.S. Stock Market Portfolio	(12.35)%	2.73%1
	MSCI U.S. Investable Market 2500 Index®	(12.30)%	3.58%1

Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal
value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund
performance changes over time and current performance may be lower or higher than what is stated. Returns shown do not
reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Mutual funds
are not obligations of, or guaranteed, by any bank and are not federally insured. The performance of the Portfolios assumes the
reinvestment of all dividends and distributions. The indexes above have been adjusted to reflect reinvestment of dividends on
securities in the indexes. The adviser is waiving a portion of its advisory fee and other operating expenses. Had the fees not been
waived or reimbursed, returns would have been lower. It is not possible to invest directly in an Index.

For the most recent month-end performance and after-tax returns, visit www.aarpfunds.com or call 1-800-958-6457.

¹  For the period from January 1, 2006 (commencement of operations) to June 30, 2008.

Sources: MSCI Barra., AARP Financial

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 5

US Stock Market Portfolio

Performance discussion

The Portfolio seeks to replicate the total return of the Morgan Stanley Capital International (“MSCI”) U.S. Investable Market 2500 Index.

For the 12-month period ended June 30, 2008 the U.S. Stock Market Portfolio returned -12.35% versus the benchmark return of -12.30%. The index return reflects all items in terms of income, gain, and loss and the reinvestment of dividends and other income.

During the last year, most of the sectors experienced negative returns. Financials (-38.80%), Consumer Discretionary (-27.70%), and Information Technology (-8%) had the most influence on index performance. Within the Financial sector, Fannie Mae (-69%), Citigroup (-66%), and Bank of America (-48%) had the largest impact. The Consumer Discretionary sector was influenced by Home Depot (-39%), Comcast (-33%), and Time Warner (-29%). Many companies impacted the performance of the Information Technology sector however, Motorola (-58%), Cisco 16%, and Microsoft (-5%) were the largest. The best performing sectors were Energy +28.50% and Materials +8.20%. Within the Energy sector Occidental Petroleum +58%, Chevron Corp +21%, and Exxon Mobil +7% were the largest contributors. Within the Materials sector, Mosaic +270%, Monsanto +89%, and Freeport McMoran +44% were the largest contributors.

The largest contributor to overall index performance was Chevron Corp., while the largest detractor was Citigroup.

The Portfolio invests in equities and futures contracts, and uses a sampling strategy to gain benchmark exposure. Stock level mis-weights tend to be under 2 basis points on a daily basis. Tracking error experienced is within expectations of a sampled portfolio and should continue to improve with asset growth.

MSCI U.S. Investable Market 2500 Index

This index serves as the benchmark for the U.S. Stock Market Portfolio. The index includes about 2,500 securities listed on the New York and American Stock Exchanges and the Nasdaq over-the-counter market. The stocks represent companies of all types and sizes. The index is unmanaged and you cannot directly invest in it. In addition, indexes do not have expenses.

6 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio

Portfolio composition (As a percentage of net assets)
June 30, 2008
Financials	24.0%	Utilities	5.7%
Industrials	11.2%	Telecommunication services	5.5%
Materials	11.1%	Information technology	5.1%
Consumer discretionary	10.0%	Cash equivalents	0.5%
Energy	9.6%	Other assets and liabilities, net	3.4%
Consumer staples	7.1%	Total net assets	100.0%
Health care	6.8%
See Notes to Financial Statements.

Performance as of June 30, 2008
Growth of $10,000 This graph illustrates the hypothetical investment of $10,000 in the International Stock Market Portfolio from January 1, 2006 (commencement of operations) through June 30, 2008, compared to the MSCI EAFE Index®.
	This hypothetical example does not represent the returns of any particular investment.

Performance Summary	Average Annual Returns as of June 30, 2008	1-Year	Since inception
	International Stock Market Portfolio	(10.62)%	8.26%1
	MSCI EAFE Index®	(10.61)%	9.37%1
Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. Returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Mutual funds are not obligations of, or guaranteed, by any bank and are not federally insured. The performance of the Portfolios assumes the reinvestment of all dividends and distributions. The indexes above have been adjusted to reflect reinvestment of dividends on securities in the indexes. The adviser is waiving a portion of its advisory fee and other operating expenses. Had the fees not been waived or reimbursed, returns would have been lower. It is not possible to invest directly in an Index. For the most recent month-end performance and after-tax returns, visit www.aarpfunds.com or call 1-800-958-6457. 1  For the period from January 1, 2006 (commencement of operations) to June 30, 2008. Sources: MSCI Barra., AARP Financial

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 7

International Stock Market Portfolio

Performance discussion

The Portfolio seeks to replicate the total return of the MSCI EAFE index.

For the 12 month period ending June 30th, 2008 the International Stock Market portfolio returned -10.62% versus the benchmark return of -10.61%. The index return reflects all items in terms of income, gain, and loss and the reinvestment of dividends and other income.

Through the first half of 2007, sector returns in the MSCI EAFE Index were mostly negative (in USD terms). The major contributor was Materials (+11%) with Rio Tinto (+58%) in the U.K., Arcelor Mittal (+51%) in France, and BHP Billiton PLC (+39%) in Australia, contributing the most. Energy also provided significant help, returning over 10% during the period. Woodside Petroleum (+70%) in Australia, BG Group (+59%) in the U.K., and Total (+9%) in France led the way within the sector. Financials (-25%) was the worst performing sector in the index. HBOS (-70%) in the U.K., UBS AG (-61%) in Switzerland and The Royal Bank of Scotland (-57%) in the U.K. had the most impact in this sector.

The largest contributor to overall index performance was Rio Tinto at 0.16%. Rio Tinto is an international mining company. The largest detractor was UBS AG at .53%.

The Portfolio invests in equities and futures contracts, and uses a sampling strategy to gain benchmark exposure. Stock level mis-weights tend to be under 15 basis points on a daily basis. Tracking error experienced is within expectations of a sampled portfolio and should continue to improve with asset growth.

Country allocation

	Percentage of net assets
United Kingdom	20.9%
Japan	20.5%
France	9.6%
Germany	8.8%
Switzerland	6.8%
Australia	6.6%
Spain	3.9%
Italy	3.6%
Netherlands	2.6%
Sweden	2.0%
Finland	1.5%
Hong Kong	1.7%
United States	0.5%
Belgium	1.0%
Singapore	1.1%
Norway	1.0%
Denmark	1.0%
Luxembourg	0.8%
Greece	0.6%
Ireland	0.6%
Austria	0.6%
Bermuda	0.4%
Portugal	0.3%
Cayman Islands	0.1%
New Zealand	0.1%
Other assets and liabilities	3.4%
Total net assets	100.0%

MSCI EAFE Index

This index serves as the benchmark for the International Stock Market Portfolio. The index includes about 1,000 securities that are listed on the stock exchanges of 21 developed countries, excluding the United States and Canada. The index does not include emerging markets such as Brazil, Russia, India or China. In addition, indexes do not have expenses.

8 AARP PORTFOLIOS 2008 ANNUAL REPORT Understanding Your Expenses

Understanding Your Expenses (unaudited)

As a shareholder of a Portfolio, you incur ongoing costs, including investment advisory fees, and other expenses of running a fund. It’s important to understand exactly how much you pay to purchase and own a fund and to compare the costs of owning different funds because these costs reduce your returns.

The example in the table on the next page is intended to help you to understand your ongoing costs in dollars of investing in an AARP Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from January 1, 2008 to June 30, 2008.

Actual expenses

The first line for each Portfolio in the table on the next page provides information about actual account values and actual expenses. You may use the information in the first line, together with the amount you invested, to estimate the expenses that you incurred 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 attributable to your investment during this period.

Hypothetical example for comparison purposes

The second line in the table on the next page labeled “Hypothetical”, helps you to compare the costs of an AARP Portfolio to other funds using a 5% return as required by the Securities and Exchange Commission for all mutual funds. It provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. You should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Portfolio with 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.

Understanding Your Expenses AARP PORTFOLIOS 2008 ANNUAL REPORT 9

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. 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 transaction costs were included, your costs would have been higher.

	Beginning account value 1/1/08		Ending account value 6/30/08		Expenses paid during period1
U.S. Bond Market Portfolio
Actual	$	1,000	$	1,011.40	$	1.25
Hypothetical	$	1,000	$	1,023.62	$	1.26
(assuming a 5% return before expenses)
U.S. Stock Market Portfolio
Actual	$	1,000	$	890.90	$	1.18
Hypothetical	$	1,000	$	1,023.62	$	1.26
(assuming a 5% return before expenses)
International Stock Market Portfolio
Actual	$	1,000	$	891.90	$	1.41
Hypothetical	$	1,000	$	1,023.37	$	1.51
(assuming a 5% return before expenses)
1  Expenses reflect the Portfolio’s annualized net expense ratio multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). The annualized net expense ratios are as follows: U.S. Bond Market Portfolio 0.25%, U.S. Stock Market Portfolio 0.25% and International Stock Market Portfolio 0.30%.

10 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Bond Market Portfolio

U.S. Bond Market Portfolio

June 30, 2008

Portfolio of investments
	Par amount		Value
Asset-Backed Securities–0.5%
Capital Auto Receivables
Asset Trust, 4.680%, 10/15/2012	$	25,000	$	25,077
Capital One Multi-Asset
Execution Trust, 4.900%, 12/15/2017		25,000		21,116
Citibank Credit Card
Issuance Trust, 4.900%, 12/12/2016		100,000		97,618
Citibank Credit Card
Issuance Trust 2003-A10, 4.750%, 12/10/2015		15,000		14,729
Countrywide Asset-Backed
Certificates, 4.454%, 10/25/2035		20,000		19,791
Detroit Edison
Securitization Funding LLC, 6.190%, 3/1/2013		25,000		25,846
Ford Credit Auto Owner
Trust, 5.240%, 7/15/2012		50,000		50,643
PSE&G Transition Funding
LLC, 6.750%, 6/15/2016		10,000		10,795
Residential Asset
Securities Corp., 3.870%, 5/25/2033		21,055		19,084
TXU Electric Delivery
Transition Bond Co. LLC, 5.290%, 5/15/2018		50,000		49,967
Total Asset-Backed
Securities–(Identified Cost $337,713)				334,666
Corporate Bonds–18.6%
Consumer Discretionary–2.0%
Anheuser-Busch Cos.,
Inc., 6.450%, 9/1/2037		25,000		23,970
CBS Corp., 7.875%,
7/30/2030		30,000		29,143
Clorox Co., 5.450%,
10/15/2012		50,000		50,289
Coca-Cola Co., 5.350%,
11/15/2017		25,000		25,246

Coca-Cola Enterprises, Inc.,
6.750%, 9/15/2028	25,000	26,643
Comcast Corp.,
5.900%, 3/15/2016	50,000	48,929
Comcast Corp.,
6.450%, 3/15/2037	25,000	23,340
Comcast Corp.,
6.950%, 8/15/2037	50,000	49,331
Costco Wholesale Corp.,
5.500%, 3/15/2017	50,000	50,842
COX Communications,
Inc., 4.625%, 1/15/2010	50,000	49,742
DaimlerChrysler North
America Holdings, 7.200%, 9/1/2009	50,000	51,442
DaimlerChrysler North
America Holdings, 8.500%, 1/18/2031	25,000	28,983
DaimlerChrysler North
America Holdings Senior Note, 6.500%, 11/15/2013	50,000	51,907
1Dr Pepper Snapple Group,
Inc., 6.120%, 5/1/2013	100,000	101,467
Home Depot, Inc.,
5.400%, 3/1/2016	50,000	45,983
Kohl’s Corp., 6.250%,
12/15/2017	25,000	23,876
Lowe’s Cos., Inc., 5.800%,
10/15/2036	25,000	22,791
May Department Stores
Co., 6.700%, 7/15/2034	25,000	20,703
News America Holdings,
Inc., 9.250%, 2/1/2013	60,000	68,811
News America, Inc. Senior
Note, 6.150%, 3/1/2037	25,000	23,092
Target Corp. Note,
5.875%, 3/1/2012	50,000	52,152
Time Warner Cable, Inc.,
5.850%, 5/1/2017	50,000	47,570
Time Warner, Inc.,
5.875%, 11/15/2016	25,000	23,612
Time Warner, Inc.,
7.700%, 5/1/2032	50,000	51,331
United Parcel Service, Inc.,
6.200%, 1/15/2038	25,000	25,426
Viacom, Inc. Senior Note,
5.750%, 4/30/2011	100,000	100,298

U.S. Bond Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 11

Portfolio of investments
	Par amount		Value
Corporate Bonds (continued)
Consumer Discretionary (continued)
Wal-Mart Stores, Inc.,
4.125%, 7/1/2010	$	50,000	$	50,688
Wal-Mart Stores, Inc.,
5.000%, 4/5/2012		100,000		103,752
Wal-Mart Stores, Inc.,
5.250%, 9/1/2035		25,000		21,794
Total				1,293,153
Consumer Staples–0.9%
Archer-Daniels-Midland
Co., 7.000%, 2/1/2031		25,000		27,012
ConAgra Foods, Inc.,
7.000%, 10/1/2028		25,000		25,807
CVS Caremark Corp.,
6.250%, 6/1/2027		25,000		24,550
General Mills, Inc.,
6.000%, 2/15/2012		50,000		51,455
H.J. Heinz Finance Co.,
6.000%, 3/15/2012		25,000		25,747
Hershey Co., 4.850%,
8/15/2015		25,000		24,490
Kraft Foods, Inc., 6.125%,
2/1/2018		25,000		24,345
Kraft Foods, Inc.,
6.250%, 6/1/2012		50,000		51,123
Kroger Co., 5.500%,
2/1/2013		50,000		50,208
McDonald’s Corp.,
6.300%, 3/1/2038		50,000		49,696
Procter & Gamble Co.,
5.550%, 3/5/2037		25,000		24,113
Procter & Gamble Co.
Global Note, 6.875%, 9/15/2009		100,000		104,236
Xerox Corp., 6.350%,
5/15/2018		50,000		49,444
Yum! Brands, Inc.,
6.250%, 3/15/2018		50,000		48,842
Total				581,068
Energy–1.7%
Alberta Energy Co. Ltd.,
8.125%, 9/15/2030		25,000		28,487

Anadarko Petroleum Corp.,
5.950%, 9/15/2016	25,000	25,054
Apache Corp., 6.000%,
1/15/2037	50,000	49,227
Appalachian Power Co.,
5.000%, 6/1/2017	10,000	9,058
Boardwalk Pipelines LLC,
5.500%, 2/1/2017	20,000	18,668
Canadian Natural Resources
Ltd., 5.700%, 5/15/2017	25,000	24,533
ConocoPhillips, 4.400%,
5/15/2013	100,000	98,212
ConocoPhillips Canada
Funding Co., 5.625%, 10/15/2016	50,000	51,023
ConocoPhillips Canada
Funding Co., 5.950%, 10/15/2036	25,000	24,980
El Paso Natural Gas Co.,
5.950%, 4/15/2017	50,000	48,497
EnCana Corp.,
4.750%, 10/15/2013	25,000	24,026
Enterprise Products
Operating LP, 4.625%, 10/15/2009	50,000	49,836
Enterprise Products
Operating LP, 6.875%, 3/1/2033	10,000	9,847
FirstEnergy Corp.,
6.450%, 11/15/2011	25,000	25,672
FirstEnergy Corp.,
7.375%, 11/15/2031	20,000	21,811
Hess Corp., 7.300%,
8/15/2031	25,000	28,003
KeySpan Corp., 8.000%,
11/15/2030	25,000	27,626
Kinder Morgan Energy
Partners LP, 5.000%, 12/15/2013	25,000	23,988
Kinder Morgan Energy
Partners LP, 5.800%, 3/15/2035	100,000	87,034
Kinder Morgan Energy
Partners LP, 6.000%, 2/1/2017	25,000	24,743
Marathon Oil Corp.,
6.600%, 10/1/2037	25,000	24,725
Murphy Oil Corp.,
6.375%, 5/1/2012	25,000	25,654

12 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Par amount		Value
Corporate Bonds (continued)
Energy (continued)
Pemex Project Funding
Master Trust, 6.625%, 6/15/2035	$	25,000	$	24,790
Petro-Canada, 7.000%,
11/15/2028		25,000		25,111
Plains All American
Pipeline LP, 6.650%, 1/15/2037		25,000		23,386
Progress Energy, Inc.,
6.850%, 4/15/2012		50,000		52,794
Progress Energy, Inc.,
7.750%, 3/1/2031		25,000		28,650
TransCanada Pipelines
Ltd., 6.200%, 10/15/2037		20,000		18,392
TransCanada Pipelines
Ltd., 9.875%, 1/1/2021		25,000		32,515
Transocean, Inc.,
6.000%, 3/15/2018		25,000		25,083
Valero Energy Corp.,
7.500%, 4/15/2032		25,000		25,372
Williams Cos, Inc.,
7.125%, 9/1/2011		50,000		52,000
XTO Energy, Inc.,
6.100%, 4/1/2036		25,000		23,889
Total				1,082,686
Financials–8.4%
Allstate Corp., 5.950%,
4/1/2036		25,000		22,114
American Express Co.,
7.000%, 3/19/2018		100,000		101,405
American General Finance
Corp., 5.400%, 12/1/2015		20,000		16,998
American International
Group, Inc., 6.250%, 5/1/2036		25,000		21,881
Ameritech Capital Funding,
6.550%, 1/15/2028		20,000		19,314
BAC Capital Trust XI,
6.625%, 5/23/2036		25,000		23,116

Bank of America Corp.,
4.750%, 8/15/2013	100,000	94,957
Bank of America Corp.,
5.625%, 10/14/2016	50,000	47,986
Bank of America Corp.,
7.800%, 2/15/2010	50,000	52,205
Bank of America NA,
5.300%, 3/15/2017	50,000	45,975
Bank of America NA,
6.000%, 10/15/2036	25,000	22,229
BB&T Corp., 5.250%,
11/1/2019	25,000	21,470
Bear Stearns Cos., Inc.,
4.500%, 10/28/2010	50,000	49,401
Bear Stearns Cos., Inc.,
5.300%, 10/30/2015	30,000	28,123
Berkshire Hathaway Finance
Corp., 4.850%, 1/15/2015	10,000	9,863
Capital One Capital IV,
6.745%, 2/17/2037	25,000	18,727
Chubb Corp., 6.000%,
11/15/2011	10,000	10,146
Cincinnati Financial Corp.,
6.920%, 5/15/2028	10,000	9,920
CIT Group, Inc., 5.000%,
2/1/2015	25,000	17,309
Citigroup, Inc., 4.125%,
2/22/2010	100,000	99,113
Citigroup, Inc., 5.000%,
9/15/2014	100,000	92,737
Citigroup, Inc., 5.500%,
4/11/2013	100,000	97,699
Citigroup, Inc., 5.850%,
12/11/2034	50,000	42,248
Citigroup, Inc., 6.125%,
5/15/2018	100,000	95,870
Citigroup, Inc. Global Senior
Note, 6.500%, 1/18/2011	100,000	102,902
CNA Financial Corp.,
6.000%, 8/15/2011	25,000	25,127
Countrywide Financial Corp.,
4.500%, 6/15/2010	50,000	46,553
Countrywide Financial Corp.,
5.800%, 6/7/2012	25,000	23,665
Credit Suisse, 6.000%,
2/15/2018	50,000	48,232
Credit Suisse USA, Inc.,
5.125%, 8/15/2015	100,000	96,014

U.S. Bond Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 13

Portfolio of investments
	Par amount		Value
Corporate Bonds (continued)
Financials (continued)
Credit Suisse USA, Inc.,
5.250%, 3/2/2011	$	50,000	$	50,512
Devon Financing Corp.
ULC, 6.875%, 9/30/2011		50,000		53,106
Discover Financial
Services, 6.450%, 6/12/2017		25,000		21,163
Fifth Third Bancorp,
8.250%, 3/1/2038		50,000		40,601
Financing Corp. (FICO),
9.650%, 11/2/2018		25,000		34,755
General Electric Capital
Corp., 5.400%, 2/15/2017		50,000		48,614
General Electric Capital
Corp., 5.875%, 2/15/2012		150,000		155,748
General Electric Capital
Corp., 5.875%, 1/14/2038		50,000		45,463
General Electric Capital
Corp., 6.750%, 3/15/2032		60,000		60,595
General Electric Insurance
Solutions Corp., 7.000%, 2/15/2026		50,000		50,531
Goldman Sachs Group,
Inc., 5.125%, 1/15/2015		50,000		47,925
Goldman Sachs Group,
Inc., 5.450%, 11/1/2012		100,000		99,844
Goldman Sachs Group,
Inc., 5.950%, 1/15/2027		30,000		25,934
Goldman Sachs Group,
Inc., 6.125%, 2/15/2033		25,000		22,461
Goldman Sachs Group,
Inc., 6.150%, 4/1/2018		50,000		48,595
Goldman Sachs Group,
Inc., 6.345%, 2/15/2034		15,000		12,753
Goldman Sachs Group,
Inc., 6.750%, 10/1/2037		25,000		22,938
Goldman Sachs Group,
Inc., 6.875%, 1/15/2011		50,000		51,934

Goldman Sachs Group, Inc.,
7.800%, 1/28/2010	10,000	10,453
Hartford Financial Services
Group, Inc., 6.100%, 10/1/2041	25,000	22,008
HSBC Finance Corp.,
4.750%, 7/15/2013	100,000	95,619
HSBC Finance Corp.,
5.000%, 6/30/2015	25,000	23,665
HSBC Finance Corp.,
6.375%, 11/27/2012	100,000	102,638
Inter-American Development
Bank, 5.000%, 4/5/2011	100,000	103,724
International Lease Finance
Corp., 5.450%, 3/24/2011	100,000	94,033
International Lease Finance
Corp., 5.650%, 6/1/2014	50,000	43,486
iStar Financial, Inc., 5.650%,
9/15/2011	25,000	21,390
JPMorgan Chase Capital XV,
5.875%, 3/15/2035	25,000	20,690
JPMorgan Chase Capital
XVIII, 6.950%, 8/17/2036	25,000	23,128
JP Morgan Chase Capital
XXV, 6.800%, 10/1/2037	50,000	45,012
JPMorgan Chase & Co.,
6.000%, 1/15/2018	25,000	24,397
JPMorgan Chase & Co.,
6.625%, 3/15/2012	100,000	103,206
JPMorgan Chase & Co.,
7.000%, 11/15/2009	100,000	102,249
Keycorp, 6.500%,
5/14/2013	100,000	89,376
Lazard Group, 6.850%,
6/15/2017	50,000	44,170
Lehman Brothers Holdings,
Inc., 5.500%, 4/4/2016	50,000	45,224
Lehman Brothers Holdings,
Inc., 6.750%, 12/28/2017	25,000	23,526
Lehman Brothers Holdings,
Inc., 6.875%, 5/2/2018	65,000	63,037
Lehman Brothers Holdings,
Inc., 6.875%, 7/17/2037	25,000	21,581
Lehman Brothers Holdings,
Inc., 7.500%, 5/11/2038	20,000	18,604
Lehman Brothers Holdings,
Inc., 7.875%, 8/15/2010	25,000	25,734

14 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Par amount		Value
Corporate Bonds (continued)
Financials (continued)
Liberty Property LP,
6.625%, 10/1/2017	$	50,000	$	46,827
Marshall & Ilsley Corp.,
5.350%, 4/1/2011		50,000		48,321
Merrill Lynch & Co., Inc.,
4.500%, 11/4/2010		100,000		97,503
Merrill Lynch & Co., Inc.,
5.000%, 2/3/2014		50,000		45,336
Merrill Lynch & Co., Inc.,
5.700%, 5/2/2017		50,000		44,095
Merrill Lynch & Co., Inc.,
6.150%, 4/25/2013		100,000		97,019
MetLife, Inc., 5.000%,
6/15/2015		50,000		48,646
MetLife, Inc., 5.700%,
6/15/2035		10,000		8,846
MetLife, Inc., 6.125%,
12/1/2011		10,000		10,420
MetLife, Inc., 6.400%,
12/15/2036		25,000		21,894
Morgan Stanley, 5.375%,
10/15/2015		100,000		91,625
Morgan Stanley, 5.625%,
1/9/2012		100,000		100,153
Morgan Stanley, 5.950%,
12/28/2017		100,000		90,940
PNC Bank NA, 4.875%,
9/21/2017		50,000		43,961
PNC Funding Corp.,
5.625%, 2/1/2017		50,000		46,703
Principal Life Income
Funding Trusts, 5.125%, 3/1/2011		100,000		98,700
ProLogis, 5.500%,
4/1/2012		50,000		48,868
Prudential Financial, Inc.,
4.500%, 7/15/2013		50,000		47,384
Prudential Financial, Inc.,
6.000%, 12/1/2017		50,000		49,536
Realty Income Corp.,
5.950%, 9/15/2016		25,000		22,534
Simon Property Group LP,
5.100%, 6/15/2015		25,000		22,654

Simon Property Group LP,
5.300%, 5/30/2013	50,000	49,244
SLM Corp., 5.400%,
10/25/2011	25,000	22,847
Sovereign Bank, 5.125%,
3/15/2013	25,000	19,950
Transatlantic Holdings, Inc.,
5.750%, 12/14/2015	20,000	18,765
Travelers Cos., Inc.,
5.500%, 12/1/2015	25,000	24,713
Travelers Cos., Inc.,
5.750%, 12/15/2017	25,000	24,308
Unilever Capital Corp.,
7.125%, 11/1/2010	50,000	53,385
Vornado Realty LP,
5.600%, 2/15/2011	25,000	24,002
Wachovia Bank NA,
4.875%, 2/1/2015	50,000	45,452
Wachovia Bank NA,
6.600%, 1/15/2038	25,000	21,850
Wachovia Corp.,
5.625%, 10/15/2016	50,000	45,537
Wachovia Corp.,
5.700%, 8/1/2013	50,000	47,985
Washington Mutual Bank,
5.500%, 1/15/2013	100,000	80,076
Wells Fargo Bank NA,
5.750%, 5/16/2016	100,000	99,374
Wells Fargo & Co.,
5.250%, 10/23/2012	50,000	50,328
Wells Fargo & Co.,
5.625%, 12/11/2017	25,000	24,232
Western Union Co.,
5.400%, 11/17/2011	50,000	49,765
Western Union Co.,
5.930%, 10/1/2016	35,000	34,382
Willis North America, Inc.,
5.625%, 7/15/2015	25,000	22,509
Total		5,354,390
Health Care–1.2%
Abbott Laboratories,
5.600%, 5/15/2011	50,000	52,321
Aetna, Inc., 6.625%,
6/15/2036	35,000	33,713
AmerisourceBergen Corp.,
5.875%, 9/15/2015	10,000	9,818

U.S. Bond Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 15

Portfolio of investments
	Par amount		Value
Corporate Bonds (continued)
Health Care (continued)
Amgen, Inc., 5.850%,
6/1/2017	$	25,000	$	24,666
Amgen, Inc., 6.375%,
6/1/2037		25,000		23,950
Baxter International, Inc.,
4.625%, 3/15/2015		10,000		9,530
Baxter International, Inc.,
5.900%, 9/1/2016		50,000		51,280
Bristol-Myers Squibb Co.,
5.450%, 5/1/2018		50,000		49,416
Bristol-Myers Squibb Co.,
5.875%, 11/15/2036		25,000		23,399
Eli Lilly & Co., 5.200%,
3/15/2017		50,000		50,009
GlaxoSmithKline Capital,
Inc., 5.650%, 5/15/2018		100,000		99,805
Johnson & Johnson,
4.950%, 5/15/2033		10,000		9,164
Rohm & Haas Co.,
7.850%, 7/15/2029		50,000		53,976
Schering-Plough Corp.,
6.000%, 9/15/2017		50,000		49,463
Teva Pharmaceutical
Finance LLC, 5.550%, 2/1/2016		10,000		9,786
Teva Pharmaceutical
Finance LLC, 6.150%, 2/1/2036		10,000		9,605
UnitedHealth Group, Inc.,
5.250%, 3/15/2011		50,000		49,799
UnitedHealth Group, Inc.,
6.000%, 11/15/2017		25,000		24,242
WellPoint, Inc.,
6.375%, 1/15/2012		90,000		92,151
Wyeth, 5.500%,
2/15/2016		25,000		25,165
Wyeth, 7.250%,
3/1/2023		25,000		26,912
Total				778,170
Industrials–1.4%
Boeing Capital Corp. Ltd.,
6.500%, 2/15/2012		50,000		53,109

Burlington Northern Santa Fe
Corp., 5.900%, 7/1/2012	50,000	51,456
Canadian Pacific Railway Co.,
5.950%, 5/15/2037	25,000	20,808
Caterpillar Financial Services
Corp., 4.250%, 2/8/2013	50,000	48,914
Caterpillar Financial Services
Corp., 5.125%, 10/12/2011	50,000	51,378
Caterpillar, Inc., 6.625%,
7/15/2028	10,000	10,644
Cooper US, Inc., 6.100%,
7/1/2017	25,000	25,423
CSX Corp., 6.250%,
3/15/2018	25,000	24,109
Dover Corp., 5.450%,
3/15/2018	25,000	24,528
Dun & Bradstreet Corp.,
5.500%, 3/15/2011	50,000	50,209
Emerson Electric Co.,
5.375%, 10/15/2017	25,000	25,034
FedEx Corp., 5.500%,
8/15/2009	20,000	20,117
Honeywell International, Inc.,
5.300%, 3/1/2018	50,000	49,346
Honeywell International, Inc.,
5.400%, 3/15/2016	25,000	25,415
Honeywell International, Inc.,
5.700%, 3/15/2036	25,000	23,716
Honeywell International, Inc.,
7.500%, 3/1/2010	50,000	53,223
International Business
Machines Corp., 6.500%, 1/15/2028	50,000	51,198
Lockheed Martin Corp.,
4.121%, 3/14/2013	25,000	24,301
Lockheed Martin Corp.,
7.750%, 5/1/2026	25,000	28,569
Norfolk Southern Corp.,
7.700%, 5/15/2017	10,000	11,150
Norfolk Southern Corp.,
7.800%, 5/15/2027	15,000	16,881
Northrop Grumman Corp.,
7.750%, 2/15/2031	15,000	17,711
Philip Morris International,
Inc., 5.650%, 5/16/2018	50,000	48,689
Pitney Bowes, Inc., 5.750%,
9/15/2017	25,000	24,901

16 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Par amount		Value
Corporate Bonds (continued)
Industrials (continued)
Southwest Airlines Co.,
5.250%, 10/1/2014	$	50,000	$	46,006
Tyco Electronics Group
SA, 6.000%, 10/1/2012		50,000		50,533
Tyco International Group
SA, 6.000%, 11/15/2013		25,000		24,150
Waste Management, Inc.,
6.375%, 11/15/2012		25,000		25,676
Total				927,194
Information Technology–0.5%
Cisco Systems, Inc.,
5.250%, 2/22/2011		100,000		103,022
Electronic Data Systems
Corp., 6.500%, 8/1/2013		25,000		25,704
Hewlett-Packard Co.,
5.250%, 3/1/2012		25,000		25,634
Oracle Corp. and Ozark
Holding, Inc., 5.250%, 1/15/2016		50,000		49,274
Science Applications
International Corp., 6.250%, 7/1/2012		20,000		20,774
United Technologies Corp.,
6.050%, 6/1/2036		25,000		24,851
Xerox Corp., 5.500%,
5/15/2012		50,000		49,465
Total				298,724
Materials–0.4%
Alcoa, Inc., 5.900%,
2/1/2027		25,000		22,247
Alcoa, Inc., 7.375%,
8/1/2010		25,000		26,385
Dow Chemical Co.,
6.000%, 10/1/2012		50,000		51,857
EI Du Pont de Nemours &
Co., 5.600%, 12/15/2036		25,000		23,465
Falconbridge Ltd.,
5.500%, 6/15/2017		25,000		23,126

Vale Overseas Ltd.,
6.875%, 11/21/2036	50,000	46,687
Weyerhaeuser Co.,
7.375%, 3/15/2032	50,000	49,731
Total		243,498
Telecommunication Services–0.8%
AT&T Wireless Services, Inc.,
8.125%, 5/1/2012	50,000	54,810
AT&T, Inc., 6.150%,
9/15/2034	25,000	23,432
AT&T, Inc., 6.300%,
1/15/2038	25,000	23,695
AT&T, Inc., 6.400%,
5/15/2038	50,000	48,019
AT&T, Inc., 6.800%,
5/15/2036	25,000	25,128
BellSouth Capital Funding
Corp., 7.875%, 2/15/2030	25,000	27,690
BellSouth Corp., 5.200%,
9/15/2014	30,000	29,603
BellSouth Corp., 6.000%,
11/15/2034	10,000	9,187
EMBARQ Corp., 6.738%,
6/1/2013	50,000	48,294
Motorola, Inc., 6.000%,
11/15/2017	25,000	21,890
SBC Communications, Inc.
Global Note, 6.250%, 3/15/2011	50,000	51,733
Verizon Communications,
Inc., 5.500%, 2/15/2018	50,000	47,653
Verizon Communications,
Inc., 5.550%, 2/15/2016	50,000	48,777
Verizon Global Funding
Corp., 5.850%, 9/15/2035	10,000	8,842
Verizon Global Funding
Corp., 7.750%, 12/1/2030	25,000	26,931
Verizon New England, Inc.,
6.500%, 9/15/2011	30,000	30,856
Total		526,540
Utilities–1.3%
Arizona Public Service Co.,
6.500%, 3/1/2012	10,000	10,092
Carolina Power & Light Co.,
5.125%, 9/15/2013	10,000	10,074

U.S. Bond Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 17

Portfolio of investments
	Par amount		Value
Corporate Bonds (continued)
Utilities (continued)
CenterPoint Energy
Resources Corp., 6.000%, 5/15/2018	$	25,000	$	24,005
Cincinnati Gas & Electric,
5.700%, 9/15/2012		50,000		50,851
Columbus Southern Power
Co., 6.600%, 3/1/2033		25,000		23,949
Commonwealth Edison
Co., 5.900%, 3/15/2036		25,000		22,644
Commonwealth Edison
Co., 6.150%, 9/15/2017		50,000		49,949
Consolidated Edison Co.
of New York, 4.875%, 2/1/2013		50,000		49,462
Consolidated Edison Co.
of New York, Inc., 6.300%, 8/15/2037		25,000		24,482
Constellation Energy
Group, 7.000%, 4/1/2012		50,000		51,884
Dominion Resources, Inc.,
5.150%, 7/15/2015		15,000		14,316
Dominion Resources, Inc.,
6.000%, 11/30/2017		50,000		49,456
Exelon Corp., 4.450%,
6/15/2010		25,000		24,790
Exelon Corp., 5.625%,
6/15/2035		15,000		12,970
Florida Power & Light Co.,
4.950%, 6/1/2035		25,000		21,462
MidAmerican Energy Co.,
6.750%, 12/30/2031		10,000		10,487
MidAmerican Funding
LLC, 6.927%, 3/1/2029		25,000		27,083
National Rural Utilities
Cooperative Finance Corp., 7.250%, 3/1/2012		100,000		106,536
Nisource Finance Corp.,
6.400%, 3/15/2018		25,000		24,171
Oneok, Inc., 5.200%,
6/15/2015		25,000		23,668

Pacific Gas & Electric Co.,
6.050%, 3/1/2034	15,000	14,510
Public Service Co. of
Colorado, 6.250%, 9/1/2037	10,000	10,191
Public Service Electric &
Gas Co., 5.800%, 5/1/2037	25,000	24,123
Puget Sound Energy, Inc.,
6.274%, 3/15/2037	25,000	23,472
Sempra Energy, 7.950%,
3/1/2010	25,000	26,365
TXU Electric Delivery Co.,
7.000%, 5/1/2032	25,000	23,997
Virginia Electric and Power
Co., 5.400%, 1/15/2016	50,000	48,932
Total		803,921
Total Corporate Bonds–
(Identified Cost $12,290,023)		11,889,344
International Debt–4.8%
Abbey National PLC,
7.950%, 10/26/2029	25,000	25,492
Alcan, Inc., 5.200%,
1/15/2014	50,000	48,845
America Movil SAB de CV,
5.625%, 11/15/2017	50,000	48,405
America Movil SA de CV,
5.750%, 1/15/2015	15,000	14,916
ArcelorMittal, 6.125%,
6/1/2018	50,000	48,952
Asian Development Bank,
5.593%, 7/16/2018	50,000	53,320
AstraZeneca PLC,
6.450%, 9/15/2037	25,000	25,535
BHP Billiton Finance Ltd.,
5.000%, 12/15/2010	25,000	25,288
BHP Billiton Finance Ltd.,
5.125%, 3/29/2012	25,000	24,950
Brazilian Government
International Bond, 6.000%, 1/17/2017	100,000	102,200
Brazilian Government
International Bond, 8.250%, 1/20/2034	50,000	61,600
British Telecommunications
PLC, 8.625%, 12/15/2010	50,000	53,717
British Telecommunications
PLC, 9.125%, 12/15/2030	25,000	30,131

18 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Par amount		Value
International Debt (continued)
Canadian National Railway
Co., 6.200%, 6/1/2036	$	25,000	$	24,263
Deutsche Bank AG,
5.375%, 10/12/2012		100,000		101,569
Deutsche Bank AG,
6.000%, 9/1/2017		50,000		50,573
Deutsche Telekom
International Finance BV, 8.750%, 6/15/2030		25,000		28,759
Diageo Finance BV,
5.300%, 10/28/2015		50,000		48,749
Eksportfinans ASA,
5.000%, 2/14/2012		100,000		103,122
European Investment Bank,
4.125%, 9/15/2010		50,000		51,139
European Investment Bank,
4.625%, 5/15/2014		200,000		206,038
European Investment Bank,
4.875%, 2/16/2016		50,000		51,839
Export-Import Bank Of
Korea (KEXIM), 5.125%, 2/14/2011		25,000		24,860
France Telecom SA,
7.750%, 3/1/2011		100,000		105,968
HSBC Holdings PLC,
6.500%, 5/2/2036		25,000		23,316
HSBC Holdings PLC,
7.500%, 7/15/2009		50,000		51,138
Hydro Quebec, 6.300%,
5/11/2011		25,000		26,608
International Bank for
Reconstruction & Development, 7.625%, 1/19/2023		25,000		32,267
International Finance
Corp., 3.500%, 5/15/2013		100,000		98,379
Israel Government
International Bond, 5.500%, 11/9/2016		25,000		25,666
Italy Government
International Bond, 4.500%, 1/21/2015		100,000		100,726

Italy Government
International Bond, 5.625%, 6/15/2012	100,000	106,328
Italy, Republic of,
6.875%, 9/27/2023	25,000	30,170
KfW Bankengruppe,
3.250%, 3/15/2013	100,000	97,687
KfW Bankengruppe,
4.875%, 1/17/2017	100,000	103,688
Koninklijke Philips Electronics
NV, 6.875%, 3/11/2038	50,000	51,787
Kreditanstalt fuer
Wiederaufbau, 0.000%, 4/18/2036	50,000	11,947
Landwirtschaftliche
Rentenbank, 4.875%, 2/14/2011	100,000	103,638
Mexico Government
International Bond, 6.625%, 3/3/2015	25,000	26,875
Mexico Government
International Bond, 6.750%, 9/27/2034	20,000	21,270
Mexico Government
International Bond, 8.125%, 12/30/2019	50,000	60,625
Mexico Government
International Bond, 8.300%, 8/15/2031	50,000	63,375
Nexen, Inc., 5.875%,
3/10/2035	25,000	22,398
Oesterreichische Kontrollbank
AG, 4.875%, 2/16/2016	100,000	103,284
Province of Nova Scotia
Canada, 5.125%, 1/26/2017	50,000	51,294
Province of Ontario Canada,
5.000%, 10/18/2011	100,000	103,753
Province of Quebec Canada,
4.600%, 5/26/2015	50,000	49,901
Province of Quebec Canada,
7.500%, 9/15/2029	10,000	12,814
Region of Lombardy Italy,
5.804%, 10/25/2032	50,000	54,515
Republic of Korea,
4.875%, 9/22/2014	25,000	24,505
Royal Bank of Scotland
Group PLC, 7.648%, 8/31/2049	25,000	24,387

U.S. Bond Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 19

Portfolio of investments
	Par amount		Value
International Debt (continued)
Telecom Italia Capital SA,
6.375%, 11/15/2033	$	50,000	$	44,644
Telefonica Emisiones SAU,
5.984%, 6/20/2011		50,000		50,774
Telefonica Emisiones SAU,
6.221%, 7/3/2017		25,000		25,031
Thomson Corp. Note,
5.700%, 10/1/2014		75,000		73,938
Vodafone Group PLC,
6.150%, 2/27/2037		25,000		22,936
Vodafone Group PLC,
7.875%, 2/15/2030		25,000		27,541
Weatherford International
Ltd., 5.500%, 2/15/2016		25,000		24,225
Total International Debt–
(Identified Cost $3,108,120)				3,111,660
Mortgage-Backed Securities–39.7%
Federal Home Loan
Mortgage Corporation GOLD 15 YR, 4.500%		225,000		217,406
Federal Home Loan
Mortgage Corporation GOLD 30 YR, 5.000% – 6.000%		2,350,000		2,308,804
Government National
Mortgage Association, 30 YR, 5.000% –6.500%		775,000		784,527
Federal National Mortgage
Association, 15 YR, 4.500%		400,000		386,625
Federal National Mortgage
Association, 30 YR, 6.500% – 7.000%		425,000		441,332
Federal Home Loan
Mortgage Corp., 4.500% – 7.000%, 5/1/2020 – 6/1/2038		6,517,003		6,459,083
Federal National Mortgage
Association, 4.000% – 7.000%, 6/1/2019 – 4/1/2038		13,474,861		13,436,137

Government National
Mortgage Association, 4.500% – 6.500%, 4/15/2036 – 8/15/2037	1,408,738	1,401,822
Total Mortgage-Backed
Securities–(Identified Cost $25,290,376)		25,435,736
U.S. Treasury–24.2%
U.S. Treasury Bonds–5.5%
4.375%, 2/15/2038	225,000	219,375
4.750%, 2/15/2037	115,000	118,791
5.000%, 5/15/2037	100,000	107,500
5.250%, 2/15/2029	65,000	70,540
6.125%, 11/15/2027	175,000	209,330
6.125%, 8/15/2029	75,000	90,486
6.250%, 8/15/2023	100,000	119,008
6.250%, 5/15/2030	75,000	92,338
6.375%, 8/15/2027	170,000	208,303
6.625%, 2/15/2027	75,000	94,031
6.750%, 8/15/2026	160,000	202,588
6.875%, 8/15/2025	200,000	255,063
7.125%, 2/15/2023	140,000	179,288
7.250%, 5/15/2016	100,000	122,899
7.500%, 11/15/2016	50,000	62,473
8.000%, 11/15/2021	270,000	366,293
8.500%, 2/15/2020	130,000	179,156
8.750%, 5/15/2017	215,000	289,729
8.750%, 8/15/2020	80,000	112,756
8.875%, 8/15/2017	150,000	204,305
9.250%, 2/15/2016	135,000	183,790
Total		3,488,042
U.S. Treasury Notes–18.7%
2.625%, 5/31/2010	800,000	800,750
3.500%, 8/15/2009	450,000	455,871
3.125%, 11/30/2009	450,000	454,817
3.125%, 4/30/2013	900,000	892,759
3.375%, 6/30/2013	250,000	250,528
3.500%, 2/15/2018	100,000	96,289
3.625%, 7/15/2009	400,000	405,469
3.625%, 1/15/2010	380,000	387,303

20 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Par amount		Value
U.S. Treasury (continued)
U.S. Treasury Notes (continued)
3.625%, 12/31/2012	$	250,000	$	253,887
3.875%, 5/15/2018		150,000		148,793
4.000%, 9/30/2009		250,000		255,137
4.000%, 4/15/2010		550,000		564,180
4.000%, 2/15/2015		400,000		411,282
4.125%, 8/31/2012		200,000		207,078
4.250%, 1/15/2011		650,000		674,680
4.250%, 9/30/2012		200,000		208,297
4.500%, 2/28/2011		100,000		104,281
4.500%, 9/30/2011		100,000		104,547
4.500%, 3/31/2012		400,000		419,156
4.500%, 4/30/2012		250,000		262,149
4.625%, 12/31/2011		500,000		525,469
4.625%, 2/29/2012		150,000		157,828
4.625%, 7/31/2012		100,000		105,445
4.625%, 2/15/2017		910,000		958,345
4.750%, 3/31/2011		200,000		209,922
4.750%, 5/31/2012		100,000		105,774
4.750%, 8/15/2017		425,000		450,367
4.875%, 8/15/2009		500,000		513,516
4.875%, 4/30/2011		250,000		263,614
4.875%, 5/31/2011		250,000		263,906
4.875%, 6/30/2012		175,000		186,020
4.875%, 8/15/2016		150,000		160,863
5.125%, 6/30/2011		250,000		265,781
5.125%, 5/15/2016		150,000		163,594
6.000%, 8/15/2009		300,000		311,742
Total				11,999,439
Total U.S. Treasury–
(Identified Cost $15,136,310)				15,487,481
U.S. Government Agencies–9.3%
Federal Farm Credit Bank,
3.875% – 5.375%, 8/3/2009 – 1/17/2017		575,000		587,492

Federal Home Loan Bank of
Chicago, 5.625%, 6/13/2016	50,000	50,923
Federal Home Loan Bank
System, 4.250% – 5.500%, 7/17/2009 – 7/15/2036	975,000	998,723
Federal Home Loan Mortgage
Corp., 2.875% – 6.750%, 4/30/2010 – 7/15/2032	2,155,000	2,185,524
Federal National Mortgage
Association, 2.500% – 7.250%, 4/9/2010 – 7/15/2037	1,960,000	2,030,952
Tennessee Valley Authority,
5.500% – 6.750%, 7/18/2017 – 1/15/2038	75,000	83,896
Total U.S. Government
Agencies–(Identified Cost $5,856,588)		5,937,510
Commercial Mortgage-Backed Securities–5.0%
Banc of America
Commercial Mortgage, Inc., 5.118%, 7/11/2043	60,000	59,256
Banc of America
Commercial Mortgage, Inc., 5.356%, 10/10/2045	100,000	94,781
Banc of America
Commercial Mortgage, Inc., 5.400%, 10/10/2045	20,000	19,744
Banc of America
Commercial Mortgage, Inc., 5.838%, 6/10/2049	125,000	118,422
Bear Stearns Commercial
Mortgage Securities, 4.740%, 3/13/2040	40,000	38,844
Bear Stearns Commercial
Mortgage Securities, 4.978%, 7/11/2042	200,000	191,968
Bear Stearns Commercial
Mortgage Securities, 5.405%, 12/11/2040	50,000	48,572
Chase Commercial
Mortgage Securities Corp., 7.319%, 10/15/2032	24,694	25,580
Citigroup Commercial
Mortgage Trust, 5.915%, 3/15/2049	25,000	19,173

U.S. Bond Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 21

Portfolio of investments
	Par amount		Value
Commercial Mortgage-Backed Securities (continued)
Citigroup/Deutsche Bank
Commercial Mortgage Trust, 5.400%, 7/15/2044	$	50,000	$	47,384
Commercial Mortgage
Pass Through Certificates, 5.347%, 12/10/2046		50,000		45,169
Commercial Mortgage
Pass Through Certificates, 5.899%, 6/10/2046		50,000		49,657
Credit Suisse Mortgage
Capital Certificates, 6.021%, 6/15/2038		100,000		98,273
CS First Boston Mortgage
Securities Corp., 4.429%, 12/15/2036		250,000		248,076
CS First Boston Mortgage
Securities Corp., 4.730%, 7/15/2037		20,000		18,456
CS First Boston Mortgage
Securities Corp., 5.230%, 12/15/2040		50,000		48,007
CS First Boston Mortgage
Securities Corp., 5.416%, 5/15/2036		35,000		34,080
CS First Boston Mortgage
Securities Corp., 6.387%, 8/15/2036		25,000		25,623
CW Capital Cobalt Ltd.,
5.484%, 4/15/2047		25,000		23,308
G.E. Capital Commercial
Mortgage Corp., 5.189%, 7/10/2039		150,000		145,975
GMAC Commercial
Mortgage Securities, Inc., 6.465%, 4/15/2034		24,703		25,337
GMAC Commercial
Mortgage Securities, Inc., 6.957%, 9/15/2035		19,911		20,591
Greenwich Capital
Commercial Funding Corp., 5.224%, 4/10/2037		100,000		96,198

Greenwich Capital
Commercial Funding Corp., 5.736%, 12/10/2049	125,000	118,422
GS Mortgage Securities
Corp. II, 4.761%, 7/10/2039	15,000	14,098
GS Mortgage Securities
Corp. II, 5.396%, 8/10/2038	100,000	98,077
JPMorgan Chase
Commercial Mortgage Securities Corp., Series 2003-CB7, Class A4, 4.879%, 1/12/2038	20,000	19,227
JPMorgan Chase
Commercial Mortgage Securities Corp., Series 2005-LDP3 Class A4A, 4.936%, 8/15/2042	50,000	47,275
JPMorgan Chase
Commercial Mortgage Securities Corp., Series 2005-LDP3, Class A3, 4.959%, 8/15/2042	35,000	34,019
JPMorgan Chase
Commercial Mortgage Securities Corp., Series 2005-LDP4, Class AM, 5.000%, 10/15/2042	15,000	14,011
JPMorgan Chase
Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A4, 5.038%, 3/15/2046	20,000	19,136
JPMorgan Chase
Commercial Mortgage Securities Corp., Series 2006-CB15, Class A3, 5.819%, 6/12/2043	100,000	98,998
JPMorgan Chase
Commercial Mortgage Securities Corp., Series 2006-LDP6, Class A4, 5.475%, 4/15/2043	100,000	95,768
JPMorgan Chase
Commercial Mortgage Securities Corp., Series 2007-CB18, Class A4, 5.440%, 6/12/2047	50,000	46,605

22 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Par amount		Value
Commercial Mortgage-Backed Securities (continued)
LB-UBS Commercial
Mortgage Trust, 4.361%, 1/15/2029	$	50,000	$	47,754
LB-UBS Commercial
Mortgage Trust, 5.018%, 2/15/2031		29,820		29,837
LB-UBS Commercial
Mortgage Trust, 5.084%, 2/15/2031		25,000		24,789
LB-UBS Commercial
Mortgage Trust, 5.139%, 2/15/2031		20,000		19,244
LB-UBS Commercial
Mortgage Trust, 5.207%, 2/15/2031		20,000		19,437
LB-UBS Commercial
Mortgage Trust, 5.430%, 2/15/2040		100,000		93,180
Merrill Lynch,
5.378%, 8/12/2048		100,000		92,852
Merrill Lynch Mortgage
Trust, 5.416%, 11/12/2037		50,000		48,344
Morgan Stanley Capital I,
5.379%, 11/14/2042		25,000		24,401
Morgan Stanley Capital I,
5.514%, 11/12/2049		100,000		93,946
Morgan Stanley Capital I,
7.108%, 6/3/2030		150,000		149,977
PG&E Energy Recovery
Funding LLC, 5.030%, 3/25/2014		50,000		50,893
Salomon Brothers
Mortgage Securities VII, 7.455%, 7/18/2033		21,463		22,137
Wachovia Bank
Commercial Mortgage Trust, 4.516%, 5/15/2044		15,000		14,816
Wachovia Bank
Commercial Mortgage Trust, 4.867%, 2/15/2035		100,000		96,834

Wachovia Bank Commercial
Mortgage Trust, 5.203%, 1/15/2045	62,544		62,617
Wachovia Bank Commercial
Mortgage Trust, 5.308%, 11/15/2048	75,000		70,451
Wachovia Bank Commercial
Mortgage Trust, 5.416%, 1/15/2045	50,000		49,795
Wachovia Bank Commercial
Mortgage Trust, 5.515%, 1/15/2045	50,000		41,317
Total Commercial
Mortgage-Backed Securities–(Identified Cost $3,304,825)			3,200,731
Municipal Bonds–0.1%
State of Connecticut,
5.850%, 3/15/2032	25,000		26,017
State of Illinois,
4.950%, 6/1/2023	25,000		23,670
State of Illinois Taxable,
5.100%, 6/1/2033	25,000		23,546
Total Municipal Bonds–
(Identified Cost $74,248)			73,233
Commercial Paper–5.9%
Fairway Finance Corp.,
2.600% – 2.730%, 7/14/2008	2,800,000		2,797,286
Lexington Parker Capital
Corp., 2.620%, 7/14/2008	1,000,000		999,054
Total Commercial Paper–
(Identified Cost $3,796,340)			3,796,340
Mutual Fund–1.4%
AIM Prime Fund
(At Net Asset Value)	908,817		908,817
Total Investments–109.5%
(Identified Cost $70,103,360)			70,175,518
Other Assets & Liabilities–Net–(9.5)%			(6,066,969	)
Total Net Assets–100.0%		$	64,108,549

¹ Denotes a restricted security, including securities purchased under Rule 144A of the Securities Act of 1933. This security may only be sold to qualified institutional investors and is determined to be liquid under criteria established by the Portfolio’s Board of Trustees. At June 30, 2008, these securities amounted to $101,467 which represents 0.2% of total net assets.

See Notes to Financial Statements.

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 23

U.S. Stock Market Portfolio

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks–97.0%
Consumer Discretionary–9.5%
199 Cents Only Stores	200	$	1,320
A.H. Belo Corp.	50		285
Aaron Rents, Inc.	121		2,702
Abercrombie & Fitch Co.	296		18,553
1ACCO Brands Corp.	160		1,797
Advance Auto Parts, Inc.	308		11,960
1Aeropostale, Inc.	255		7,989
1AFC Enterprises, Inc.	100		799
1Amazon.com, Inc.	1,160		85,063
Ambassadors Group, Inc.	100		1,492
American Axle & Manufacturing
Holdings, Inc.	200		1,598
American Eagle Outfitters, Inc.	684		9,323
American Greetings Corp.	200		2,468
Ameristar Casinos, Inc.	158		2,184
Andersons, Inc.	100		4,071
1AnnTaylor Stores Corp.	169		4,049
ArvinMeritor, Inc.	200		2,496
Asbury Automotive Group, Inc.	100		1,285
1ATC Technology Corp.	100		2,328
Autoliv, Inc.	300		13,986
1AutoNation, Inc.	463		4,639
1AutoZone, Inc.	159		19,241
1Avis Budget Group, Inc.	288		2,411
1Bare Escentuals, Inc.	200		3,746
Barnes & Noble, Inc.	226		5,614
1Beacon Roofing Supply, Inc.	75		796
Beazer Homes USA, Inc.	88		490
Bebe Stores, Inc.	100		961
1Bed Bath & Beyond, Inc.	979		27,510
Belo Corp.	250		1,827
Best Buy Co., Inc.	1,286		50,926
Big 5 Sporting Goods Corp.	100		757
1Big Lots, Inc.	370		11,559

1BJ’s Wholesale Club, Inc.	253	9,791
Black & Decker Corp.	227	13,055
1Blockbuster, Inc.	300	750
Blyth, Inc.	100	1,203
Bob Evans Farms, Inc.	90	2,574
Borders Group, Inc.	100	600
BorgWarner, Inc.	460	20,415
Boyd Gaming Corp.	158	1,984
1Brightpoint, Inc.	105	767
Brinker International, Inc.	385	7,276
1Brocade Communications
Systems, Inc.	1,495	12,319
Brown Shoe Co., Inc.	130	1,762
Brunswick Corp.	299	3,169
Buckle, Inc.	100	4,573
1Buffalo Wild Wings, Inc.	100	2,483
Burger King Holdings, Inc.	400	10,716
1Cabela’s, Inc.	94	1,035
1Cablevision Systems Corp.	847	19,142
1California Pizza Kitchen, Inc.	150	1,679
Callaway Golf Co.	220	2,603
1Carmax, Inc.	758	10,756
Carnival Corp.	1,600	52,736
1Carter’s, Inc.	160	2,211
Cato Corp.	100	1,424
CBRL Group, Inc.	107	2,623
CBS Corp.	2,157	42,040
1CEC Entertainment, Inc.	150	4,201
Centex Corp.	435	5,816
1Champion Enterprises, Inc.	210	1,229
1Charlotte Russe Holding, Inc.	100	1,776
1Charming Shoppes, Inc.	250	1,148
1Charter Communications, Inc.	1,200	1,260
1Cheesecake Factory, Inc.	270	4,296
1Chico’s FAS, Inc.	499	2,680
1Childrens Place Retail Stores,
Inc.	130	4,693
1Chipotle Mexican Grill, Inc.,
Class A	42	3,470

24 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Consumer Discretionary (continued)
1Chipotle Mexican Grill, Inc.,
Class B	60	$	4,522
Choice Hotels International, Inc.	100		2,650
Christopher & Banks Corp.	100		680
Churchill Downs, Inc.	100		3,487
Cinemark Holdings, Inc.	200		2,612
Circuit City Stores, Inc.	500		1,445
1Citadel Broadcasting Corp.	395		482
CKE Restaurants, Inc.	200		2,494
1CKX, Inc.	200		1,750
Clear Channel
Communications, Inc.	1,713		60,298
1Clear Channel Outdoor
Holdings, Inc.	100		1,783
1Coach, Inc.	1,300		37,544
1Coldwater Creek, Inc.	175		924
1Collective Brands, Inc.	180		2,093
Columbia Sportswear Co.	55		2,021
Comcast Corp., Class A	7,008		132,942
Comcast Corp., Special
Class A	3,360		63,034
Cooper Tire & Rubber Co.	210		1,646
1Copart, Inc.	300		12,846
Costco Wholesale Corp.	1,600		112,224
1Cox Radio, Inc.	100		1,180
1CROCS, Inc.	302		2,419
1CSK Auto Corp.	100		1,048
1CTC Media, Inc.	200		4,932
D.R. Horton, Inc.	977		10,600
Darden Restaurants, Inc.	500		15,970
1Deckers Outdoor Corp.	37		5,150
1Dick’s Sporting Goods, Inc.	286		5,074
Dillard’s, Inc.	243		2,812
DineEquity, Inc.	30		1,121
1DIRECTV Group, Inc.	2,576		66,744
1DISH Network Corp.	809		23,688

1Dolby Laboratories, Inc.	200	8,060
1Dollar Tree, Inc.	331	10,820
1Domino’s Pizza, Inc.	152	1,748
1DreamWorks Animation SKG,
Inc.	260	7,751
1Dress Barn, Inc.	200	2,676
1DSW, Inc.	100	1,178
1DTS, Inc.	100	3,132
E.W. Scripps Co.	360	14,954
Eastman Kodak Co.	1,063	15,339
Entercom Communications
Corp.	60	421
1Entravision Communications
Corp.	200	804
Ethan Allen Interiors, Inc.	150	3,690
1Exide Technologies	200	3,352
1Expedia, Inc.	719	13,215
Family Dollar Stores, Inc.	484	9,651
Federal Signal Corp.	100	1,200
Finish Line, Inc.	93	809
1Fleetwood Enterprises, Inc.	200	524
Foot Locker, Inc.	604	7,520
1Ford Motor Co.	6,024	28,975
Fortune Brands, Inc.	500	31,205
1Fossil, Inc.	180	5,233
Fred’s, Inc.	100	1,124
Furniture Brands International,
Inc.	80	1,069
1GameStop Corp., Class A	532	21,493
Gannett Co., Inc.	850	18,419
Gap, Inc.	2,030	33,840
Garmin Ltd.	437	18,721
GateHouse Media, Inc.	100	246
1Gaylord Entertainment Co.	194	4,648
General Motors Corp.	1,619	18,618
1Genesco, Inc.	40	1,235
Gentex Corp.	573	8,274
1Getty Images, Inc.	201	6,820
1Goodyear Tire & Rubber Co.	900	16,047
Group 1 Automotive, Inc.	100	1,987

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 25

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Consumer Discretionary (continued)
1GSI Commerce, Inc.	100	$	1,363
Guess?, Inc.	200		7,490
1Gymboree Corp.	124		4,969
1Hanesbrands, Inc.	359		9,743
Harley-Davidson, Inc.	828		30,023
Harman International Industries,
Inc.	217		8,982
Harte-Hanks, Inc.	180		2,061
Hasbro, Inc.	513		18,324
Hearst-Argyle Television, Inc.	87		1,670
1Helen of Troy Ltd.	100		1,612
1Hertz Global Holdings, Inc.	600		5,760
1Hibbett Sports, Inc.	60		1,266
HNI Corp.	108		1,907
Home Depot, Inc.	6,174		144,595
1Hot Topic, Inc.	200		1,082
1Hovnanian Enterprises, Inc.	96		526
Idearc, Inc.	600		1,410
1Insight Enterprises, Inc.	180		2,111
Interactive Data Corp.	170		4,272
Interface, Inc.	100		1,253
1Interline Brands, Inc.	100		1,593
International Game Technology	1,200		29,976
International Speedway Corp.	150		5,854
1Interpublic Group of Cos., Inc.	1,800		15,480
1inVentiv Health, Inc.	100		2,779
1J. Crew Group, Inc.	200		6,602
1Jack in the Box, Inc.	262		5,871
1Jakks Pacific, Inc.	100		2,185
JCPenney Co., Inc.	767		27,834
1Jo-Ann Stores, Inc.	100		2,303
John Wiley & Sons, Inc.	170		7,655
Johnson Controls, Inc.	2,146		61,547
Jones Apparel Group, Inc.	322		4,427

1Jos A. Bank Clothiers, Inc.	100	2,675
Journal Communications, Inc.	200	964
K-Swiss, Inc.	50	735
KB Home	274	4,639
Kimball International, Inc.	100	828
Knoll, Inc.	106	1,288
1Knology, Inc.	100	1,099
1Kohl’s Corp.	1,102	44,124
1Krispy Kreme Doughnuts, Inc.	200	998
La-Z-Boy, Inc.	200	1,530
1Lamar Advertising Co.	284	10,233
Lancaster Colony Corp.	60	1,817
Landry’s Restaurants, Inc.	100	1,797
1Las Vegas Sands Corp.	388	18,407
1Lear Corp.	240	3,403
Lee Enterprises, Inc.	80	319
Leggett & Platt, Inc.	544	9,123
Lennar Corp.	393	4,850
1Liberty Global, Inc.	585	17,761
1Liberty Media Corp.–
Entertainment	1,760	42,645
1Liberty Media Holding Corp.–
Capital	440	6,336
1Liberty Media Holding Corp.–
Interactive	2,204	32,531
1Life Time Fitness, Inc.	100	2,955
Limited Brands, Inc.	1,187	20,001
1Lions Gate Entertainment
Corp.	400	4,144
1Live Nation, Inc.	151	1,598
Liz Claiborne, Inc.	302	4,273
1LKQ Corp.	392	7,083
Lowe’s Cos., Inc.	5,295	109,871
1Lululemon Athletica, Inc.	100	2,906
1M&F Worldwide Corp.	50	1,965
Macy’s, Inc.	1,556	30,218
Marcus Corp.	100	1,495
Marriott International, Inc.	1,015	26,634
1Marvel Entertainment, Inc.	200	6,428
Mattel, Inc.	1,326	22,701

26 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Consumer Discretionary (continued)
Matthews International Corp.	60	$	2,716
McClatchy Co.	116		786
McDonald’s Corp.	4,120		231,626
McGraw-Hill Cos., Inc.	1,232		49,428
MDC Holdings, Inc.	100		3,906
Media General, Inc.	40		478
1Mediacom Communications
Corp.	200		1,068
Men’s Wearhouse, Inc.	160		2,606
Meredith Corp.	189		5,347
1Meritage Homes Corp.	30		455
1MGM Mirage	382		12,946
Modine Manufacturing Co.	60		742
1Mohawk Industries, Inc.	188		12,051
1Morgans Hotel Group Co.	100		1,030
Movado Group, Inc.	100		1,980
1Move, Inc.	300		699
National CineMedia, Inc.	200		2,132
1NetFlix, Inc.	160		4,171
New York Times Co.	501		7,710
Newell Rubbermaid, Inc.	958		16,085
News Corp., Class A	6,500		97,760
News Corp., Class B	1,603		24,606
Nike, Inc.	1,360		81,070
Nordstrom, Inc.	600		18,180
1NutriSystem, Inc.	111		1,570
1NVR, Inc.	16		8,001
O’Charleys, Inc.	100		1,006
1O’Reilly Automotive, Inc.	413		9,231
1Office Depot, Inc.	991		10,842
OfficeMax, Inc.	290		4,031
Omnicom Group, Inc.	1,182		53,048
Orient-Express Hotels Ltd.	200		8,688
1Overstock.com, Inc.	100		2,595

Oxford Industries, Inc.	42	804
1Pacific Sunwear of California, Inc.	190	1,621
1Panera Bread Co.	100	4,626
1Papa John’s International, Inc.	60	1,595
1Penn National Gaming, Inc.	290	9,323
Penske Automotive Group, Inc.	154	2,270
PEP Boys-Manny Moe & Jack	100	872
PetSmart, Inc.	482	9,616
1PF Chang’s China Bistro, Inc.	40	894
Phillips-Van Heusen, Corp.	208	7,617
1Pier 1 Imports, Inc.	300	1,032
1Pinnacle Entertainment, Inc.	170	1,783
Polaris Industries, Inc.	160	6,461
Polo Ralph Lauren Corp.	200	12,556
Pool Corp.	180	3,197
1Priceline.com, Inc.	127	14,663
Pulte Homes, Inc.	848	8,166
1Quiksilver, Inc.	350	3,437
1R.H. Donnelley Corp.	283	849
RadioShack Corp.	440	5,399
1RC2 Corp.	100	1,856
1Red Robin Gourmet Burgers, Inc.	41	1,137
Regal Entertainment Group	280	4,278
Regis Corp.	160	4,216
1Rent-A-Center, Inc.	200	4,114
1Retail Ventures, Inc.	100	460
Ross Stores, Inc.	493	17,511
Royal Caribbean Cruises Ltd.	485	10,898
Ruby Tuesday, Inc.	200	1,080
Ryland Group, Inc.	206	4,493
1Saks, Inc.	553	6,072
Sauer-Danfoss, Inc.	100	3,115
1Scholastic Corp.	133	3,812
1School Specialty, Inc.	40	1,189
1Scientific Games Corp.	280	8,294
Sealy Corp.	100	574
1Sears Holdings Corp.	277	20,404
1Select Comfort Corp.	175	287
Sherwin-Williams Co.	421	19,337

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 27

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Consumer Discretionary (continued)
1Shuffle Master, Inc.	60	$	296
Sinclair Broadcast Group, Inc.	200		1,520
1Sirius Satellite Radio, Inc.	4,825		9,264
1Six Flags, Inc.	300		345
1Skechers U.S.A., Inc.	100		1,976
1Smith & Wesson Holding Corp.	100		521
Snap-On, Inc.	229		11,910
Sonic Automotive, Inc.	100		1,289
1Sonic Corp.	236		3,493
Speedway Motorsports, Inc.	100		2,038
Stage Stores, Inc.	90		1,050
Standard-Pacific Corp.	183		619
Stanley Works	290		13,001
Staples, Inc.	2,582		61,322
1Starbucks Corp.	2,690		42,341
Starwood Hotels & Resorts
Worldwide, Inc.	700		28,049
1Steak N Shake Co.	100		633
1Steven Madden Ltd.	54		993
Superior Industries International,
Inc.	100		1,688
Talbots, Inc.	100		1,159
Target Corp.	2,800		130,172
Tempur-Pedic International, Inc.	200		1,562
1Tenneco, Inc.	180		2,435
1Texas Roadhouse, Inc.	152		1,363
Thor Industries, Inc.	150		3,189
Tiffany & Co.	500		20,375
Tim Hortons, Inc.	700		20,083
1Timberland Co.	170		2,779
Time Warner, Inc.	12,900		190,920
1Titan Machinery, Inc.	100		3,132
1Tivo, Inc.	300		1,851
TJX Cos., Inc.	1,611		50,698

1Toll Brothers, Inc.	500	9,365
Toro Co.	200	6,654
1Tractor Supply Co.	179	5,198
Triarc Cos., Inc. Class A	150	960
Triarc Cos., Inc. Class B	200	1,266
1True Religion Apparel, Inc.	100	2,665
1TRW Automotive Holdings Corp.	160	2,955
Tupperware Brands Corp.	280	9,582
1Tween Brands, Inc.	150	2,469
1Under Armour, Inc.	122	3,128
UniFirst Corp.	100	4,466
1United Rentals, Inc.	302	5,922
1Universal Electronics, Inc.	100	2,090
1Urban Outfitters, Inc.	426	13,287
V.F. Corp.	336	23,916
1Vail Resorts, Inc.	78	3,341
1Viacom, Inc.	2,000	61,080
Virgin Media, Inc.	1,069	14,549
1Visteon Corp.	210	552
1Volcom, Inc.	100	2,393
WABCO Holdings, Inc.	200	9,292
Wabtec Corp.	170	8,265
Wal-Mart Stores, Inc.	8,700	488,940
Walt Disney Co.	6,500	202,800
1Warnaco Group, Inc.	180	7,933
Warner Music Group Corp.	80	571
Washington Post Co.	21	12,325
1WCI Communities, Inc.	50	73
Wendy’s International, Inc.	322	8,765
1WESCO International, Inc.	114	4,565
1Westwood One, Inc.	130	161
Whirlpool Corp.	308	19,013
Williams-Sonoma, Inc.	288	5,714
Winnebago Industries, Inc.	40	408
1WMS Industries, Inc.	150	4,465
Wolverine World Wide, Inc.	200	5,334
Wyndham Worldwide Corp.	700	12,537
Wynn Resorts Ltd.	231	18,792
1XM Satellite Radio Holdings, Inc.	1,212	9,502

28 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Consumer Discretionary (continued)
Yum! Brands, Inc.	1,700	$	59,653
1Zale Corp.	170		3,211
1Zumiez, Inc.	100		1,658
Total Consumer Discretionary			4,914,771
Consumer Staples–7.8%
Alberto-Culver Co.	313		8,223
1Alliance One International, Inc.	300		1,533
Altria Group, Inc.	7,570		155,639
Anheuser-Busch Cos., Inc.	2,600		161,512
Archer-Daniels-Midland Co.	2,100		70,875
Avon Products, Inc.	1,516		54,606
1Boston Beer Co., Inc.	100		4,068
Brown-Forman Corp.	200		15,114
Bunge Ltd.	438		47,168
Campbell Soup Co.	847		28,341
Casey’s General Stores, Inc.	180		4,171
1Central European Distribution
Corp.	100		7,415
1Central Garden and Pet Co.	40		182
1Central Garden and Pet Co.,
Class A (Non-voting)	80		328
1Chattem, Inc.	51		3,318
1Chiquita Brands International,
Inc.	178		2,700
Church & Dwight Co., Inc.	232		13,073
Clorox Co.	513		26,779
Coca-Cola Co.	7,600		395,048
Coca-Cola Enterprises, Inc.	1,100		19,030
Colgate-Palmolive Co.	1,880		129,908
ConAgra Foods, Inc.	1,771		34,145
1Constellation Brands, Inc.	710		14,101
Corn Products International, Inc.	251		12,327
CVS Corp.	5,200		205,764
1Dean Foods Co.	600		11,772
Del Monte Foods Co.	760		5,396

1Dr Pepper Snapple Group, Inc.	900	18,882
1Elizabeth Arden, Inc.	100	1,518
Estee Lauder Cos., Inc.	330	15,328
Flowers Foods, Inc.	255	7,227
General Mills, Inc.	1,229	74,686
1Great Atlantic & Pacific Tea Co.	112	2,556
1Green Mountain Coffee Roasters,
Inc.	100	3,757
H.J. Heinz Co.	1,149	54,980
1Hain Celestial Group, Inc.	180	4,226
1Hansen Natural Corp.	252	7,263
Herbalife Ltd.	150	5,812
Hershey Co.	597	19,570
Hormel Foods Corp.	289	10,002
Ingles Markets, Inc.	100	2,333
J&J Snack Foods Corp.	100	2,741
J.M. Smucker Co.	228	9,266
Kellogg Co.	999	47,972
Kimberly-Clark Corp.	1,535	91,762
Kraft Foods, Inc.	5,567	158,381
Kroger Co.	2,343	67,642
Lance, Inc.	100	1,877
Longs Drug Stores Corp.	140	5,895
1Lorillard, Inc.	647	44,747
McCormick & Co., Inc.	433	15,441
Molson Coors Brewing Co.	476	25,861
Nash Finch Co.	100	3,427
1NBTY, Inc.	190	6,091
Nu Skin Enterprises, Inc.	300	4,476
1Pantry, Inc.	30	320
Pepsi Bottling Group, Inc.	560	15,635
PepsiAmericas, Inc.	200	3,956
PepsiCo, Inc.	5,800	368,822
Philip Morris International, Inc.	7,600	375,364
Pilgrim’s Pride Corp.	152	1,974
1Prestige Brands Holdings, Inc.	100	1,066
Procter & Gamble Co.	11,100	674,991
1Ralcorp Holdings, Inc.	98	4,845
Reddy Ice Holdings, Inc.	100	1,368

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 29

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Consumer Staples (continued)
1Rite Aid Corp.	2,350	$	3,737
Ruddick Corp.	100		3,431
Safeway, Inc.	1,605		45,823
1Sally Beauty Holdings, Inc.	190		1,227
Sanderson Farms, Inc.	100		3,452
Sara Lee Corp.	2,727		33,406
Seaboard Corp.	1		1,551
Sensient Technologies Corp.	161		4,534
1Smithfield Foods, Inc.	459		9,125
Spartan Stores, Inc.	100		2,300
1Steiner Leisure Ltd.	100		2,835
SUPERVALU, Inc.	764		23,600
SYSCO Corp.	2,179		59,944
1Tejon Ranch Co.	100		3,606
Terra Industries, Inc.	361		17,815
Tootsie Roll Industries, Inc.	106		2,664
1TreeHouse Foods, Inc.	100		2,426
Tyson Foods, Inc.	930		13,894
1United Natural Foods, Inc.	160		3,117
Universal Corp.	109		4,929
UST, Inc.	500		27,305
Vector Group Ltd.	105		1,694
Walgreen Co.	3,600		117,036
WD-40 Co.	100		2,925
Whole Foods Market, Inc.	489		11,584
1Winn-Dixie Stores, Inc.	300		4,806
Wm. Wrigley Jr. Co.	700		54,446
Total Consumer Staples			4,057,808
Energy–14.0%
1Allis-Chalmers Energy, Inc.	100		1,780
Anadarko Petroleum Corp.	1,700		127,228
Apache Corp.	1,200		166,800
1Arena Resources, Inc.	100		5,282
Atlas America, Inc.	100		4,505

1ATP Oil & Gas Corp.	148	5,842
1Atwood Oceanics, Inc.	100	12,434
Baker Hughes, Inc.	1,149	100,354
1Basic Energy Services, Inc.	100	3,150
Berry Petroleum Co.	160	9,421
1Bill Barrett Corp.	140	8,317
BJ Services Co.	1,115	35,613
1Bois d’Arc Energy, Inc.	100	2,431
1BPZ Resources, Inc.	200	5,880
1Brigham Exploration Co.	200	3,166
1Bronco Drilling Co., Inc.	100	1,838
Cabot Oil & Gas Corp.	359	24,315
1Cameron International Corp.	800	44,280
CARBO Ceramics, Inc.	80	4,668
1Carrizo Oil & Gas, Inc.	100	6,809
1Cheniere Energy, Inc.	160	699
Chesapeake Energy Corp.	1,800	118,728
Chevron Corp.	7,500	743,475
Cimarex Energy Co.	306	21,319
1CNX Gas Corp.	100	4,204
1Complete Production Services,
Inc.	200	7,284
1Comstock Resources, Inc.	160	13,509
1Concho Resources, Inc.	200	7,460
ConocoPhillips	5,400	509,706
1Contango Oil & Gas Co.	66	6,133
1Continental Resources, Inc.	200	13,864
1Core Laboratories NV	78	11,103
Crosstex Energy, Inc.	119	4,125
1CVR Energy, Inc.	100	1,925
1Dawson Geophysical Co.	34	2,022
1Delta Petroleum Corp.	200	5,104
1Denbury Resources, Inc.	936	34,164
Devon Energy Corp.	1,550	186,248
Diamond Offshore Drilling, Inc.	253	35,202
1Dresser-Rand Group, Inc.	305	11,925
1Dril-Quip, Inc.	100	6,300
El Paso Corp.	2,545	55,328
1Encore Acquisition Co.	200	15,038

30 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Energy (continued)
1Energy Partners Ltd.	87	$	1,298
ENSCO International, Inc.	523		42,227
EOG Resources, Inc.	900		118,080
Equitable Resources, Inc.	400		27,624
1Evergreen Energy, Inc.	90		157
1EXCO Resources, Inc.	329		12,143
1Exterran Holdings, Inc.	231		16,514
Exxon Mobil Corp.	19,300		1,700,909
1Flotek Industries, Inc.	100		2,062
1FMC Technologies, Inc.	500		38,465
1Forest Oil Corp.	300		22,350
Frontier Oil Corp.	353		8,440
General Maritime Corp.	140		3,637
1Global Industries Ltd.	330		5,917
1Goodrich Petroleum Corp.	90		7,463
1Grey Wolf, Inc.	540		4,876
1GulfMark Offshore, Inc.	100		5,818
1Gulfport Energy Corp.	100		1,647
Halliburton Co.	3,200		169,824
1Harvest Natural Resources, Inc.	100		1,106
1Helix Energy Solutions Group,
Inc.	297		12,367
Helmerich & Payne, Inc.	400		28,808
1Hercules Offshore, Inc.	300		11,406
Hess Corp.	1,060		133,761
Holly Corp.	211		7,790
1Hornbeck Offshore Services,
Inc.	100		5,651
1ION Geophysical Corp.	300		5,235
Lufkin Industries, Inc.	56		4,664
Marathon Oil Corp.	2,600		134,862
1Mariner Energy Inc	300		11,091
1Matrix Service Co.	100		2,306
1McMoRan Exploration Co.	200		5,504
Murphy Oil Corp.	651		63,831

1Nabors Industries Ltd.	1,002	49,328
1NATCO Group, Inc.	100	5,453
1National Oilwell Varco, Inc.	1,502	133,257
1Newfield Exploration Co.	491	32,038
1Newpark Resources, Inc.	300	2,358
Noble Corp.	997	64,765
Noble Energy, Inc.	622	62,548
Occidental Petroleum Corp.	3,000	269,580
1Oceaneering International, Inc.	180	13,869
1Oil States International, Inc.	183	11,610
1Oilsands Quest, Inc.	600	3,900
1Pacific Ethanol, Inc.	100	181
1Parallel Petroleum Corp.	82	1,651
1Parker Drilling Co.	270	2,703
Patterson-UTI Energy, Inc.	577	20,795
Penn Virginia Corp.	160	12,067
1Petroleum Development Corp.	50	3,324
1PetroQuest Energy, Inc.	200	5,380
1Pioneer Drilling Co.	171	3,217
Pioneer Natural Resources Co.	450	35,226
1Plains Exploration & Production
Co.	438	31,961
1Pride International, Inc.	600	28,374
1Quicksilver Resources, Inc.	400	15,456
Range Resources Corp.	552	36,178
1Rosetta Resources, Inc.	208	5,928
Rowan Cos., Inc.	399	18,653
RPC, Inc.	100	1,680
1SandRidge Energy, Inc.	200	12,916
Schlumberger Ltd.	4,300	461,949
1SEACOR Holdings, Inc.	80	7,161
Smith International, Inc.	700	58,198
St. Mary Land & Exploration Co.	216	13,962
1Stone Energy Corp.	140	9,227
Sunoco, Inc.	433	17,619
1Superior Energy Services, Inc.	300	16,542
1Superior Well Services, Inc.	100	3,171
1Swift Energy Co.	140	9,248
1T-3 Energy Services, Inc.	58	4,609

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 31

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Energy (continued)
Tesoro Corp.	505	$	9,984
1Tetra Technologies, Inc.	220		5,216
Tidewater, Inc.	200		13,006
1Transocean, Inc.	1,180		179,820
1Trico Marine Services, Inc.	100		3,642
1Ultra Petroleum Corp.	553		54,305
1Unit Corp.	212		17,590
Valero Energy Corp.	2,000		82,360
1Venoco, Inc.	100		2,321
W&T Offshore, Inc.	113		6,612
1W-H Energy Services, Inc.	100		9,574
1Warren Resources, Inc.	200		2,936
1Weatherford International Ltd.	2,454		121,694
Western Refining, Inc.	100		1,184
1Whiting Petroleum Corp.	150		15,912
1Willbros Group, Inc.	100		4,381
Williams Cos., Inc.	2,144		86,425
XTO Energy, Inc.	1,800		123,318
Total Energy			7,233,173
Financials–14.6%
2Acadia Realty Trust	100		2,315
ACE Ltd.	1,195		65,833
Advanta Corp.	81		509
1Affiliated Managers Group, Inc.	140		12,608
AFLAC, Inc.	1,800		113,040
1,2Alexander’s, Inc.	8		2,485
2Alexandria Real Estate
Equities, Inc.	106		10,318
1Alleghany Corp.	19		6,309
Allied Capital Corp.	700		9,723
Allied World Assurance Holdings
Ltd.	100		3,962
Allstate Corp.	1,900		86,621
2AMB Property Corp.	344		17,331
AMBAC Financial Group, Inc.	1,089		1,459

AMCORE Financial, Inc.	111	628
2American Campus
Communities, Inc.	112	3,118
American Capital Strategies Ltd.	702	16,687
American Equity Investment Life
Holding Co.	200	1,630
American Express Co.	3,757	141,526
American Financial Group, Inc.	300	8,025
American International Group, Inc.	8,600	227,556
1AmeriCredit Corp.	364	3,138
Ameriprise Financial, Inc.	842	34,244
Amtrust Financial Services, Inc.	100	1,260
Anchor BanCorp Wisconsin, Inc.	100	701
Annaly Mortgage Management,
Inc.	2,000	31,020
2Anthracite Capital, Inc.	200	1,408
2Anworth Mortgage Asset Corp.	200	1,302
AON Corp.	964	44,286
2Apartment Investment &
Management Co.	333	11,342
Apollo Investment Corp.	476	6,821
2Arbor Realty Trust, Inc.	130	1,166
1Arch Capital Group Ltd.	205	13,596
Ares Capital Corp.	338	3,407
1Argo Group International
Holdings Ltd.	145	4,866
Arthur J. Gallagher & Co.	333	8,025
2Ashford Hospitality Trust, Inc.	300	1,386
Aspen Insurance Holdings Ltd.	300	7,101
Associated Banc-Corp	400	7,716
Assurant, Inc.	350	23,086
Assured Guaranty Ltd.	190	3,418
Astoria Financial Corp.	340	6,827
2AvalonBay Communities, Inc.	290	25,856
Axis Capital Holdings Ltd.	558	16,634
BancorpSouth, Inc.	232	4,058
Bank Mutual Corp.	200	2,008
Bank of America Corp.	16,000	381,920
Bank of Hawaii Corp.	200	9,560
Bank of New York Mellon Corp.	4,148	156,919

32 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Financials (continued)
BankAtlantic Bancorp, Inc.	200	$	352
1Bankrate, Inc.	100		3,907
Banner Corp.	21		186
BB&T Corp.	2,035		46,337
1Berkshire Hathaway, Inc.	36		144,432
2BioMed Realty Trust, Inc.	210		5,151
BlackRock Kelso Capital Corp.	200		1,892
BOK Financial Corp.	96		5,131
Boston Private Financial
Holdings, Inc.	160		907
2Boston Properties, Inc.	434		39,155
2Brandywine Realty Trust	240		3,782
2BRE Properties, Inc.	200		8,656
Broadridge Financial Solutions,
Inc.	544		11,451
Brookdale Senior Living, Inc.	104		2,117
Brookline Bancorp, Inc.	190		1,815
Brown & Brown, Inc.	424		7,373
Calamos Asset Management,
Inc.	76		1,294
2Camden Property Trust	230		10,180
Capital One Financial Corp.	1,400		53,214
2Capital Trust, Inc.	10		192
CapitalSource, Inc.	600		6,648
Capitol Bancorp Ltd.	100		897
Capitol Federal Financial	60		2,257
2CapLease, Inc.	100		749
2Capstead Mortgage Corp.	200		2,170
Cascade Bancorp	100		770
Cash America International, Inc.	95		2,945
Cathay General Bancorp	100		1,087
1CB Richard Ellis Group, Inc.	700		13,440
1CBIZ, Inc.	200		1,590
2CBL & Associates Properties,
Inc.	234		5,345
2Cedar Shopping Centers, Inc.	100		1,172

Central Pacific Financial Corp.	60	640
Charles Schwab Corp.	3,583	73,595
Chemical Financial Corp.	100	2,040
Chubb Corp.	1,298	63,615
Cincinnati Financial Corp.	537	13,640
CIT Group, Inc.	1,128	7,682
Citigroup, Inc.	18,800	315,088
Citizens Banking Corp.	207	584
City Holding Co.	100	4,077
City National Corp.	152	6,395
CME Group, Inc.	177	67,825
Cohen & Steers, Inc.	100	2,597
Colonial BancGroup, Inc.	434	1,918
2Colonial Properties Trust	163	3,263
Columbia Banking System, Inc.	100	1,933
Comerica, Inc.	577	14,789
Commerce Bancshares, Inc.	215	8,527
Community Bank System, Inc.	90	1,856
Community Trust Bancorp, Inc.	80	2,101
1CompuCredit Corp.	100	600
1Conseco, Inc.	699	6,934
2Corporate Office Properties
Trust SBI MD	170	5,836
1Corrections Corp. of America	418	11,482
Corus Bankshares, Inc.	60	250
Countrywide Financial Corp.	1,906	8,100
2Cousins Properties, Inc.	90	2,079
Crystal River Capital, Inc.	100	366
Cullen/Frost Bankers, Inc.	202	10,070
CVB Financial Corp.	137	1,293
DCT Industrial Trust, Inc.	600	4,968
Delphi Financial Group, Inc.	175	4,049
2Developers Diversified Realty
Corp.	430	14,925
2DiamondRock Hospitality Co.	400	4,356
2Digital Realty Trust, Inc.	200	8,182
Dime Community Bancshares,
Inc.	180	2,972
Discover Financial Services	1,597	21,032
Douglas Emmett, Inc.	300	6,591

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 33

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Financials (continued)
Downey Financial Corp.	30	$	83
2Duke Realty Corp.	551		12,370
2DuPont Fabros Technology, Inc.	100		1,864
1E*Trade Financial Corp.	1,800		5,652
East West Bancorp, Inc.	182		1,285
2EastGroup Properties, Inc.	80		3,432
Eaton Vance Corp.	374		14,870
Employers Holdings, Inc.	200		4,140
Endurance Specialty Holdings
Ltd.	228		7,020
1Enstar Group Ltd.	31		2,712
2Entertainment Properties Trust	60		2,966
2Equity Lifestyle Properties, Inc.	100		4,400
2Equity One, Inc.	90		1,850
2Equity Residential	1,000		38,270
Erie Indemnity Co.	108		4,984
2Essex Property Trust, Inc.	90		9,585
1Euronet Worldwide, Inc.	88		1,487
Everest Re Group Ltd.	250		19,927
2Extra Space Storage, Inc.	300		4,608
1EZCORP, Inc.	100		1,275
Fannie Mae	3,900		76,089
FBL Financial Group, Inc.	100		1,988
1FCStone Group, Inc.	100		2,793
2Federal Realty Investment Trust	190		13,110
Federated Investors, Inc.	321		11,049
2FelCor Lodging Trust, Inc.	140		1,470
Fidelity National Financial, Inc.	749		9,437
Fidelity National Information
Services, Inc.	708		26,132
Fifth Third Bancorp	1,853		18,864
Financial Federal Corp.	75		1,647
First American Corp.	265		6,996
First BanCorp	320		2,029
First Busey Corp.	100		1,322

1First Cash Financial Services, Inc.	100	1,499
First Citizens BancShares, Inc.	10	1,395
First Commonwealth Financial
Corp.	206	1,922
First Financial Bankshares, Inc.	100	4,581
First Financial Corp.	40	1,224
First Financial Holdings, Inc.	100	1,718
First Horizon National Corp.	800	5,944
2First Industrial Realty Trust, Inc.	171	4,697
First Marblehead Corp.	175	450
First Merchants Corp.	130	2,360
First Midwest Bancorp, Inc.	190	3,543
First Niagara Financial Group, Inc.	300	3,858
2First Potomac Realty Trust	100	1,524
1FirstFed Financial Corp.	30	241
FirstMerit Corp.	219	3,572
Flagstar Bancorp, Inc.	100	301
Flagstone Reinsurance Holdings
Ltd.	100	1,179
FNB Corp.	350	4,123
Forest City Enterprises, Inc.	245	7,894
1Forestar Real Estate Group, Inc.	200	3,810
Franklin Resources, Inc.	621	56,915
2Franklin Street Properties Corp.	261	3,299
Freddie Mac	2,435	39,934
2Friedman, Billings, Ramsey
Group, Inc.	200	300
Frontier Financial Corp.	120	1,022
Fulton Financial Corp.	525	5,276
1FX Real Estate and
Entertainment, Inc.	40	76
GAMCO Investors, Inc.	60	2,977
2General Growth Properties, Inc.	846	29,635
Genworth Financial, Inc.	1,561	27,801
2Getty Realty Corp.	120	1,729
GFI Group, Inc.	256	2,307
Glacier Bancorp, Inc.	190	3,038
2Glimcher Realty Trust	100	1,118
Goldman Sachs Group, Inc.	1,300	227,370
2Gramercy Capital Corp.	136	1,576

34 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Financials (continued)
Greenhill & Co., Inc.	56	$	3,016
Greenlight Capital Re Ltd.
Cl A	100		2,286
1Guaranty Bancorp	100		360
1Guaranty Financial Group, Inc.	200		1,074
Hancock Holding Co.	60		2,357
Hanmi Financial Corp.	100		521
Hanover Insurance Group, Inc.	216		9,180
Harleysville Group, Inc.	100		3,383
Harleysville National Corp.	100		1,116
Hartford Financial Services
Group, Inc.	1,100		71,027
HCC Insurance Holdings, Inc.	430		9,090
2Health Care Property
Investors, Inc.	893		28,406
2Health Care REIT, Inc.	336		14,952
2Healthcare Realty Trust, Inc.	175		4,160
1HealthExtras, Inc.	170		5,124
2Highwoods Properties, Inc.	190		5,970
Hilb, Rogal & Hobbs Co.	150		6,519
1Hilltop Holdings, Inc.	100		1,031
2Home Properties, Inc.	160		7,690
Horace Mann Educators Corp.	120		1,682
2Hospitality Properties Trust	378		9,246
2Host Hotels & Resorts, Inc.	1,812		24,734
2HRPT Properties Trust	1,000		6,770
Hudson City Bancorp, Inc.	1,734		28,923
Huntington Bancshares, Inc.	1,238		7,143
IBERIABANK Corp.	60		2,668
Independent Bank Corp.	90		2,146
IndyMac Bancorp, Inc.	236		146
Infinity Property & Casualty
Corp.	50		2,076
2Inland Real Estate Corp.	150		2,163
Integra Bank Corp.	33		258
1Interactive Brokers Group, Inc.	200		6,426

1IntercontinentalExchange, Inc.	200	22,800
International Bancshares Corp.	200	4,274
Invesco Ltd. Com	1,500	35,970
1Investment Technology
Group, Inc.	189	6,324
1Investors Bancorp, Inc.	200	2,612
2Investors Real Estate Trust	94	897
IPC Holdings Ltd.	180	4,779
2iStar Financial, Inc.	469	6,195
Jackson Hewitt Tax Service, Inc.	60	733
Janus Capital Group, Inc.	600	15,882
Jefferies Group, Inc.	356	5,988
Jones Lang LaSalle, Inc.	140	8,427
JPMorgan Chase & Co.	12,500	428,875
1KBW, Inc.	100	2,058
KeyCorp	1,900	20,862
2Kilroy Realty Corp.	126	5,926
2Kimco Realty Corp.	870	30,032
2Kite Realty Group Trust	100	1,250
1Knight Capital Group, Inc.	270	4,855
1LaBranche & Co., Inc.	300	2,124
LandAmerica Financial Group,
Inc.	30	666
2LaSalle Hotel Properties	159	3,996
Legg Mason, Inc.	468	20,391
Lehman Brothers Holdings, Inc.	2,150	42,591
Leucadia National Corp.	600	28,164
2Lexington Corporate Properties
Trust	230	3,135
2Liberty Property Trust	300	9,945
Lincoln National Corp.	1,005	45,547
Loews Corp.	1,314	61,627
2LTC Properties, Inc.	100	2,556
M&T Bank Corp.	258	18,199
2Macerich Co.	291	18,080
2Mack-Cali Realty Corp.	288	9,841
2Maguire Properties, Inc.	80	974
1Markel Corp.	32	11,744
Marsh & McLennan Cos., Inc.	1,945	51,640
Marshall & Ilsley Corp.	844	12,939

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 35

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Financials (continued)
Max Capital Group, Ltd.	180	$	3,839
MB Financial, Inc.	100		2,247
MBIA, Inc.	727		3,192
MCG Capital Corp.	200		796
2Medical Properties Trust, Inc.	300		3,036
Mercury General Corp.	100		4,672
Merrill Lynch & Co., Inc.	3,300		104,643
MetLife, Inc.	2,600		137,202
1MF Global Ltd.	400		2,524
2MFA Mortgage Investments, Inc.	600		3,912
MGIC Investment Corp.	490		2,994
2Mid-America Apartment
Communities, Inc.	70		3,573
Montpelier Re Holdings Ltd.	310		4,572
Moody’s Corp.	777		26,760
Morgan Stanley	3,600		129,852
1MSCI, Inc.	200		7,258
1NASDAQ Stock Market, Inc.	474		12,585
National City Corp.	2,192		10,456
National Financial Partners Corp.	150		2,973
2National Health Investors, Inc.	100		2,851
National Penn Bancshares, Inc.	306		4,064
2National Retail Properties, Inc.	270		5,643
National Western Life Insurance
Co.	10		2,185
Nationwide Financial Services,
Inc.	127		6,097
2Nationwide Health Properties,
Inc.	331		10,423
NBT Bancorp, Inc.	85		1,752
New York Community Bancorp,
Inc.	1,094		19,517
NewAlliance Bancshares, Inc.	300		3,744
2Newcastle Investment Corp.	100		701
Northern Trust Corp.	718		49,233
2NorthStar Realty Finance Corp.	100		832

Northwest Bancorp, Inc.	100	2,182
Nymex Holdings, Inc.	300	25,344
NYSE Euronext, Inc.	461	23,354
1Ocwen Financial Corp.	100	465
Odyssey Re Holdings Corp.	100	3,550
Old National Bancorp	228	3,251
Old Republic International Corp.	838	9,922
Omega Healthcare Investors, Inc.	249	4,146
OneBeacon Insurance Group Ltd.	100	1,757
optionsXpress Holdings, Inc.	100	2,234
Pacific Capital Bancorp	100	1,378
PacWest Bancorp	150	2,232
Park National Corp.	20	1,078
2Parkway Properties, Inc.	45	1,518
PartnerRe Ltd.	190	13,135
2Pennsylvania Real Estate
Investment Trust	160	3,702
People’s United Financial, Inc.	1,296	20,218
1Philadelphia Consolidated Holding
Co.	187	6,352
Phoenix Cos., Inc.	280	2,131
1Pico Holdings, Inc.	100	4,345
1Piper Jaffray Cos.	40	1,173
Platinum Underwriters Holdings
Ltd.	180	5,870
2Plum Creek Timber Co., Inc.	650	27,761
PMI Group, Inc.	270	527
PNC Financial Services Group,
Inc.	1,270	72,517
Popular, Inc.	948	6,247
1Portfolio Recovery Associates,
Inc.	47	1,763
2Post Properties, Inc.	172	5,117
Principal Financial Group, Inc.	953	39,997
PrivateBancorp, Inc.	100	3,038
1ProAssurance Corp.	150	7,216
Progressive Corp.	2,400	44,928
2ProLogis	952	51,741
Prosperity Bancshares, Inc.	99	2,646
Protective Life Corp.	200	7,610
Provident Bankshares Corp.	80	510

36 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Financials (continued)
Provident Financial Services, Inc.	150	$	2,102
Provident New York Bancorp	230		2,544
Prudential Financial, Inc.	1,570		93,792
2PS Business Parks, Inc.	74		3,818
2Public Storage, Inc.	454		36,679
Radian Group, Inc.	286		415
2RAIT Investment Trust	100		742
2Ramco-Gershenson Properties
Trust	35		719
Raymond James Financial, Inc.	318		8,392
2Realty Income Corp.	408		9,286
2Redwood Trust, Inc.	140		3,191
2Regency Centers Corp.	200		11,824
Regions Financial Corp.	2,545		27,766
Reinsurance Group of America,
Inc.	66		2,872
RenaissanceRe Holdings Ltd.	200		8,934
Renasant Corp.	100		1,473
RLI Corp.	100		4,947
S&T Bancorp, Inc.	100		2,906
SAFECO Corp.	300		20,148
Safety Insurance Group, Inc.	100		3,565
Sandy Spring Bancorp, Inc.	90		1,492
2Saul Centers, Inc.	54		2,537
SEI Investments Co.	560		13,171
Selective Insurance Group	218		4,090
2Senior Housing Properties Trust	362		7,070
1Signature Bank	70		1,803
2Simon Property Group, Inc.	800		71,912
2SL Green Realty Corp.	230		19,026
1SLM Corp.	1,700		32,895
South Financial Group, Inc.	207		811
Sovereign Bancorp, Inc.	2,000		14,720
2Sovran Self Storage, Inc.	70		2,909
St. Joe Co.	305		10,468

StanCorp Financial Group, Inc.	200	9,392
3State Street Corp.	1,500	95,985
Sterling Bancshares, Inc.	150	1,364
Sterling Financial Corp.	90	373
Stewart Information Services
Corp.	40	774
1Stifel Financial Corp.	50	1,720
2Strategic Hotels & Resorts, Inc.	234	2,193
Student Loan Corp.	10	981
2Sun Communities, Inc.	120	2,188
2Sunstone Hotel Investors, Inc.	190	3,154
SunTrust Banks, Inc.	1,231	44,587
Susquehanna Bancshares, Inc.	428	5,859
1SVB Financial Group	155	7,457
SWS Group, Inc.	100	1,661
Synovus Financial Corp.	1,022	8,922
T. Rowe Price Group, Inc.	908	51,275
2Tanger Factory Outlet Centers,
Inc.	90	3,234
2Taubman Centers, Inc.	210	10,216
TCF Financial Corp.	397	4,776
1TD Ameritrade Holding Corp.	789	14,273
1Texas Capital Bancshares, Inc.	100	1,600
TFS Financial Corp.	500	5,795
2Thornburg Mortgage, Inc.	522	105
Tompkins Trustco, Inc.	77	2,864
Torchmark Corp.	361	21,173
Tower Group, Inc.	100	2,119
Transatlantic Holdings, Inc.	99	5,591
Travelers Cos., Inc.	2,200	95,480
TrustCo Bank Corp. NY	240	1,781
Trustmark Corp.	100	1,765
2U-Store-It Trust	110	1,315
U.S. Bancorp	6,200	172,918
UCBH Holdings, Inc.	430	968
UMB Financial Corp.	80	4,102
Umpqua Holdings Corp.	190	2,305
Union Bankshares Corp.	90	1,340
UnionBanCal Corp.	136	5,497
1United America Indemnity Ltd.	100	1,337

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 37

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Financials (continued)
United Bankshares, Inc.	180	$	4,131
United Community Banks, Inc.	80		682
United Dominion Realty Trust,
Inc.	504		11,280
United Fire & Casualty Co.	100		2,693
Unitrin, Inc.	200		5,514
1Universal American Financial
Corp.	100		1,022
2Universal Health Realty Income
Trust	30		900
UnumProvident Corp.	1,300		26,585
2Urstadt Biddle Properties, Inc.	180		2,639
Valley National Bancorp	387		6,103
2Ventas, Inc.	491		20,902
1Visa, Inc.	1,500		121,965
2Vornado Realty Trust	498		43,824
W Holding Co., Inc.	200		170
W.R. Berkley Corp.	551		13,312
Wachovia Corp.	7,800		121,134
Waddell & Reed Financial, Inc.	320		11,203
Walter Industries, Inc.	187		20,340
Washington Federal, Inc.	330		5,973
Washington Mutual, Inc.	3,330		16,417
2Washington Real Estate
Investment Trust	200		6,010
Washington Trust Bancorp, Inc.	110		2,167
Webster Financial Corp.	224		4,166
2Weingarten Realty Investors	295		8,944
Wells Fargo & Co.	11,500		273,125
WesBanco, Inc.	100		1,715
West Coast Bancorp	110		954
Westamerica BanCorp.	51		2,682
Western Union Co.	2,790		68,969
White Mountains Insurance
Group Ltd.	34		14,586
Whitney Holding Corp.	190		3,477

Willis Group Holdings Ltd.	500	15,685
Wilmington Trust Corp.	230	6,081
Wintrust Financial Corp.	50	1,193
1World Acceptance Corp.	45	1,515
XL Capital Ltd.	700	14,392
Zenith National Insurance Corp.	140	4,922
Zions BanCorp.	370	11,651
Total Financials		7,529,617
Health Care–11.1%
1Abaxis, Inc.	100	2,413
Abbott Laboratories	5,600	296,632
1Abiomed, Inc.	100	1,775
1Abraxis Bioscience, Inc.	35	2,221
1Accuray, Inc.	195	1,422
1Acorda Therapeutics, Inc.	100	3,283
1Advanced Medical Optics, Inc.	239	4,479
1Advisory Board Co.	40	1,573
Aetna, Inc.	1,860	75,386
1Affymetrix, Inc.	193	1,986
1Air Methods Corp.	100	2,500
1Alexion Pharmaceuticals, Inc.	127	9,207
1Align Technology, Inc.	200	2,098
1Alkermes, Inc.	310	3,832
Allergan, Inc.	1,140	59,337
1Alnylam Pharmaceuticals, Inc.	100	2,673
1Alpharma, Inc.	150	3,379
1AMAG Pharmaceuticals, Inc.	100	3,410
1Amedisys, Inc.	133	6,706
1American Medical Systems
Holdings, Inc.	190	2,841
1American Oriental Bioengineering,
Inc.	200	1,974
1AMERIGROUP Corp.	180	3,744
AmerisourceBergen Corp.	620	24,794
1Amgen, Inc.	3,978	187,602
1AMN Healthcare Services, Inc.	100	1,692
1AmSurg Corp.	100	2,435
1Amylin Pharmaceuticals, Inc.	526	13,355
1APP Pharmaceuticals, Inc.	140	2,341

38 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Health Care (continued)
Applera Corp.–Applied
Biosystems Group	600	$	20,088
1Applera Corp.–Celera Genomics
Group	260		2,954
1Apria Healthcare Group, Inc.	170		3,296
1Arena Pharmaceuticals, Inc.	120		623
1ArthroCare Corp.	140		5,713
1Assisted Living Concepts, Inc.	200		1,100
1Auxilium Pharmaceuticals, Inc.	100		3,362
1Barr Pharmaceuticals, Inc.	418		18,843
Baxter International, Inc.	2,240		143,226
Beckman Coulter, Inc.	220		14,857
Becton Dickinson & Co.	900		73,170
1Bio-Rad Laboratories, Inc.	70		5,662
1Biogen Idec, Inc.	1,100		61,479
1BioMarin Pharmaceuticals, Inc.	352		10,201
1Boston Scientific Corp.	4,970		61,081
Bristol-Myers Squibb Co.	7,221		148,247
1Bruker BioSciences Corp.	200		2,570
C.R. Bard, Inc.	380		33,421
Cardinal Health, Inc.	1,313		67,725
1Celgene Corp.	1,600		102,192
1Centene Corp.	160		2,686
1Cephalon, Inc.	248		16,539
1Cepheid, Inc.	200		5,624
1Charles River Laboratories
International, Inc.	238		15,213
Cigna Corp.	1,019		36,062
1Community Health Systems, Inc.	379		12,499
1Conceptus, Inc.	100		1,849
1CONMED Corp.	100		2,655
Cooper Cos., Inc.	209		7,764
1Cougar Biotechnology, Inc.	100		2,383
1Covance, Inc.	255		21,935
1Coventry Health Care, Inc.	600		18,252

Covidien Ltd.	1,790	85,723
1Cross Country Healthcare, Inc.	100	1,441
1Cubist Pharmaceuticals, Inc.	170	3,036
1CV Therapeutics, Inc.	70	576
1Cyberonics, Inc.	100	2,170
Datascope Corp.	62	2,914
1DaVita, Inc.	418	22,208
1Dendreon Corp.	255	1,135
DENTSPLY International, Inc.	560	20,608
1Edwards Lifesciences Corp.	243	15,076
Eli Lilly & Co.	3,700	170,792
1Emeritus Corp.	100	1,462
1Endo Pharmaceuticals Holdings,
Inc.	526	12,724
1Enzo Biochem, Inc.	100	1,122
1eResearchTechnology, Inc.	100	1,744
1ev3, Inc.	262	2,484
1Exelixis, Inc.	250	1,250
1Express Scripts, Inc.	777	48,733
1Forest Laboratories, Inc.	1,186	41,202
1Gen-Probe, Inc.	200	9,496
1Genentech, Inc.	1,750	132,825
1Gentiva Health Services, Inc.	100	1,905
1Genzyme Corp.	974	70,147
1Geron Corp.	300	1,035
1Gilead Sciences, Inc.	3,307	175,106
1Haemonetics Corp.	40	2,218
1Halozyme Therapeutics, Inc.	100	538
1Health Management Associates,
Inc.	1,000	6,510
1Health Net, Inc.	400	9,624
1HEALTHSOUTH Corp.	300	4,989
1HealthSpring, Inc.	200	3,376
1Healthways, Inc.	140	4,144
1Henry Schein, Inc.	364	18,771
Hill-Rom Holdings, Inc.	234	6,313
Hillenbrand, Inc.	234	5,008
1HLTH Corp.	617	6,984
1Hologic, Inc.	916	19,969
1Hospira, Inc.	577	23,143

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 39

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Health Care (continued)
1Human Genome Sciences, Inc.	470	$	2,449
1Humana, Inc.	615		24,459
1ICU Medical, Inc.	100		2,288
1Idexx Laboratories, Inc.	200		9,748
1Illumina, Inc.	220		19,164
1ImClone Systems, Inc.	260		10,520
1Immucor, Inc.	269		6,962
IMS Health, Inc.	732		17,056
1Incyte Corp.	300		2,283
1Integra LifeSciences Holdings
Corp.	100		4,448
1InterMune, Inc.	100		1,312
1Intuitive Surgical, Inc.	139		37,447
Invacare Corp.	50		1,022
1Inverness Medical Innovations,
Inc.	307		10,183
1Invitrogen Corp.	300		11,778
1Isis Pharmaceuticals, Inc.	300		4,089
Johnson & Johnson	10,200		656,268
1Kendle International, Inc.	100		3,633
1Kindred Healthcare, Inc.	100		2,876
1Kinetic Concepts, Inc.	228		9,099
1King Pharmaceuticals, Inc.	860		9,004
1KV Pharmaceutical Co.	100		1,933
1Laboratory Corp. of America
Holdings	420		29,245
LCA-Vision, Inc.	30		143
1LifePoint Hospitals, Inc.	214		6,056
1Ligand Pharmaceuticals, Inc.	100		260
1Lincare Holdings, Inc.	293		8,321
1Luminex Corp.	100		2,055
1Magellan Health Services, Inc.	160		5,925
1MannKind Corp.	100		300
1Martek Biosciences Corp.	160		5,394
1Masimo Corp.	200		6,870

MAXIMUS, Inc.	100	3,482
McKesson Corp.	1,000	55,910
1Medarex, Inc.	350	2,314
1MedCath Corp.	100	1,798
1Medco Health Solutions, Inc.	1,930	91,096
1Medicines Co.	180	3,568
Medicis Pharmaceutical Corp.	170	3,533
1Medivation, Inc.	100	1,183
Medtronic, Inc.	4,053	209,743
Mentor Corp.	178	4,952
Merck & Co., Inc.	7,800	293,982
Meridian Bioscience, Inc.	150	4,038
1Merit Medical Systems, Inc.	100	1,470
1Millipore Corp.	191	12,961
Mine Safety Appliances Co.	140	5,599
Mylan Laboratories, Inc.	1,066	12,867
1Myriad Genetics, Inc.	170	7,738
1Natus Medical, Inc.	100	2,094
1Nektar Therapeutics	310	1,039
1Neurocrine Biosciences, Inc.	40	168
1Noven Pharmaceuticals, Inc.	100	1,069
1NuVasive, Inc.	100	4,466
Omnicare, Inc.	500	13,110
1Omnicell, Inc.	100	1,318
1Onyx Pharmaceuticals, Inc.	250	8,900
1OraSure Technologies, Inc.	100	374
1Orthofix International NV	30	869
1OSI Pharmaceuticals, Inc.	227	9,380
Owens & Minor, Inc.	160	7,310
1Palomar Medical Technologies,
Inc.	35	349
1Par Pharmaceutical Cos., Inc.	150	2,435
1Parexel International Corp.	218	5,736
1Patterson Cos., Inc.	500	14,695
PDL BioPharma, Inc.	451	4,790
1Pediatrix Medical Group, Inc.	160	7,877
Perrigo Co.	300	9,531
Pfizer, Inc.	24,700	431,509
Pharmaceutical Product
Development, Inc.	406	17,417

40 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Health Care (continued)
1PharmaNet Development Group,
Inc.	100	$	1,577
1PharMerica Corp.	64		1,446
1Polypore International, Inc.	100		2,533
1Progenics Pharmaceuticals, Inc.	100		1,587
1PSS World Medical, Inc.	200		3,260
1Psychiatric Solutions, Inc.	200		7,568
Quest Diagnostics, Inc.	601		29,130
1Quidel Corp.	100		1,652
1Regeneron Pharmaceuticals, Inc.	190		2,744
1Res-Care, Inc.	100		1,778
1ResMed, Inc.	280		10,007
1Rigel Pharmaceuticals, Inc.	133		3,014
1RTI Biologics, Inc.	200		1,750
1Salix Pharmaceuticals Ltd.	80		562
1Sangamo Biosciences, Inc.	100		995
1Savient Pharmaceuticals, Inc.	200		5,060
Schering-Plough Corp.	5,800		114,202
Sciele Pharma, Inc.	100		1,935
1Seattle Genetics, Inc.	263		2,225
1Sepracor, Inc.	339		6,753
Service Corp. International	1,070		10,550
1Sirona Dental Systems, Inc.	100		2,592
1SonoSite, Inc.	100		2,801
1St Jude Medical, Inc.	1,200		49,056
STERIS Corp.	190		5,464
Stewart Enterprises, Inc.	300		2,160
Stryker Corp.	1,070		67,282
1Sun Healthcare Group, Inc.	189		2,531
1Sunrise Senior Living, Inc.	150		3,372
1SurModics, Inc.	100		4,484
1Symmetry Medical, Inc.	100		1,622
1Techne Corp.	139		10,757
1Tenet Healthcare Corp.	1,747		9,713
1Theravance, Inc.	180		2,137

1Thoratec Corp.	170	2,956
1United Therapeutics Corp.	78	7,624
UnitedHealth Group, Inc.	4,600	120,750
Universal Health Services, Inc.	211	13,339
1Valeant Pharmaceuticals
International	411	7,032
1Varian Medical Systems, Inc.	433	22,451
1VCA Antech, Inc.	300	8,334
1Vertex Pharmaceuticals, Inc.	473	15,831
1Viropharma, Inc.	180	1,991
1Warner Chilcott Ltd.	300	5,085
1Watson Pharmaceuticals, Inc.	367	9,971
1WellCare Health Plans, Inc.	206	7,447
1WellPoint, Inc.	1,990	94,843
West Pharmaceutical Services,
Inc.	100	4,328
1Wright Medical Group, Inc.	100	2,841
Wyeth	4,800	230,208
1XenoPort, Inc.	100	3,903
1Zimmer Holdings, Inc.	851	57,911
1Zoll Medical Corp.	100	3,367
1ZymoGenetics, Inc.	100	842
Total Health Care		5,755,475
Industrials–12.0%
3M Co.	2,400	167,016
A.O. Smith Corp.	100	3,283
1AAR Corp.	156	2,111
ABM Industries, Inc.	190	4,227
Actuant Corp.	178	5,580
Acuity Brands, Inc.	105	5,048
Administaff, Inc.	130	3,626
Advance America Cash Advance
Centers, Inc.	194	986
1Aecom Technology Corp.	200	6,506
1AGCO Corp.	346	18,134
1Air Transport Services Group,
Inc.	200	200
Aircastle Ltd.	100	841
1AirTran Holdings, Inc.	200	408
1Alaska Air Group, Inc.	104	1,595

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 41

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Industrials (continued)
Albany International Corp.	140	$	4,060
Alexander & Baldwin, Inc.	160		7,288
1Alliance Data Systems Corp.	286		16,173
1Alliant Techsystems, Inc.	122		12,405
1Allied Waste Industries, Inc.	1,164		14,690
1AMERCO, Inc.	37		1,764
1American Commercial Lines, Inc.	198		2,164
American Ecology Corp.	100		2,953
1American Superconductor Corp.	100		3,585
Ametek, Inc.	370		17,471
1AMR Corp.	942		4,823
Apogee Enterprises, Inc.	100		1,616
1Apollo Group, Inc.	495		21,909
Applied Industrial Technologies,
Inc.	90		2,175
Arbitron, Inc.	50		2,375
Arkansas Best Corp.	140		5,130
Armstrong World Industries, Inc.	100		2,922
1Astec Industries, Inc.	100		3,214
1Atlas Air Worldwide Holdings,
Inc.	46		2,275
Avery Dennison Corp.	300		13,179
1Badger Meter, Inc.	100		5,053
Baldor Electric Co.	200		6,996
1Bally Technologies, Inc.	205		6,929
Barnes Group, Inc.	200		4,618
1BE Aerospace, Inc.	387		9,013
Belden CDT, Inc.	180		6,098
1Blount International, Inc.	100		1,161
Boeing Co.	2,600		170,872
Bowne & Co., Inc.	100		1,275
Brady Corp.	160		5,525
Briggs & Stratton Corp.	170		2,156
Brink’s Co.	182		11,906
1Bristow Group, Inc.	100		4,949

Bucyrus International, Inc.	290	21,176
Burlington Northern Santa Fe
Corp.	1,300	129,857
C.H. Robinson Worldwide, Inc.	600	32,904
1Cal Dive International, Inc.	162	2,315
1Capella Education Co.	50	2,982
1Career Education Corp.	289	4,222
Carlisle Cos., Inc.	236	6,844
Cascade Corp.	37	1,566
Caterpillar, Inc.	2,200	162,404
1Cenveo, Inc.	211	2,061
1Ceradyne, Inc.	77	2,641
1Chart Industries, Inc.	100	4,864
Chemed Corp.	140	5,125
1ChoicePoint, Inc.	271	13,062
Cintas Corp.	513	13,600
CIRCOR International, Inc.	100	4,899
CLARCOR, Inc.	182	6,388
1Clean Harbors, Inc.	100	7,106
1Cogent, Inc.	60	682
1Coinstar, Inc.	70	2,290
1Columbus McKinnon Corp.	100	2,408
Comfort Systems USA, Inc.	200	2,688
Con-way, Inc.	117	5,529
1Consolidated Graphics, Inc.	55	2,710
1Continental Airlines, Inc.	300	3,033
1Convergys Corp.	570	8,470
Cooper Industries Ltd.	652	25,754
1Corinthian Colleges, Inc.	230	2,670
Corporate Executive Board Co.	134	5,635
1CoStar Group, Inc.	38	1,689
1Covanta Holding Corp.	442	11,797
Crane Co.	170	6,550
1CSG Systems International, Inc.	170	1,873
CSX Corp.	1,500	94,215
Cubic Corp.	100	2,228
Cummins, Inc.	700	45,864
Curtiss-Wright Corp.	180	8,053
Danaher Corp.	931	71,966

42 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Industrials (continued)
1Darling International, Inc.	400	$	6,608
Deere & Co.	1,600		115,408
1Delta Air Lines, Inc.	1,000		5,700
Deluxe Corp.	210		3,742
DeVry, Inc.	229		12,279
1Dionex Corp.	70		4,646
1Discovery Holding Co.	1,000		21,960
1Dollar Financial Corp.	100		1,511
1Dollar Thrifty Automotive Group,
Inc.	40		378
1Domtar Corp.	1,881		10,251
Donaldson Co., Inc.	259		11,562
Dover Corp.	664		32,118
1Drew Industries, Inc.	100		1,595
DRS Technologies, Inc.	152		11,965
1DST Systems, Inc.	170		9,358
Dun & Bradstreet Corp.	200		17,528
1Dycom Industries, Inc.	170		2,468
Dynamic Materials Corp.	100		3,295
1DynCorp International, Inc.	100		1,515
Eagle Bulk Shipping, Inc.	187		5,530
Eaton Corp.	517		43,929
1EMCOR Group, Inc.	254		7,247
Emerson Electric Co.	2,800		138,460
Encore Wire Corp.	100		2,119
1Energizer Holdings, Inc.	200		14,618
1Energy Conversion Devices, Inc.	100		7,364
EnergySolutions, Inc.	100		2,235
1EnerSys, Inc.	100		3,423
Ennis, Inc.	100		1,565
1EnPro Industries, Inc.	100		3,734
Equifax, Inc.	450		15,129
1ESCO Technologies, Inc.	40		1,877
1Esterline Technologies Corp.	50		2,463
1Evergreen Solar, Inc.	400		3,876

Expeditors International
Washington, Inc.	772	33,196
FactSet Research Systems, Inc.	166	9,356
Fastenal Co.	481	20,760
FedEx Corp.	1,060	83,517
1Fiserv, Inc.	545	24,727
Flowserve Corp.	210	28,707
1Fluor Corp.	321	59,732
1Force Protection, Inc.	300	993
Forward Air Corp.	150	5,190
1Foster Wheeler Ltd.	558	40,818
Franklin Electric Co., Inc.	36	1,396
FreightCar America, Inc.	40	1,420
1FTI Consulting, Inc.	160	10,954
1Fuel Tech, Inc.	100	1,762
1FuelCell Energy, Inc.	200	1,420
G&K Services, Inc.	56	1,706
1Gardner Denver, Inc.	180	10,224
GATX Corp.	175	7,758
Genco Shipping & Trading Ltd.	100	6,520
1GenCorp, Inc.	100	716
1General Cable Corp.	226	13,752
General Dynamics Corp.	1,253	105,503
General Electric Co.	36,100	963,509
1Genesee & Wyoming, Inc.	75	2,551
1Genpact Ltd.	300	4,476
Genuine Parts Co.	629	24,959
1Geo Group, Inc.	224	5,040
1Global Cash Access Holdings,
Inc.	100	686
Global Payments, Inc.	236	10,998
Goodrich Corp.	450	21,357
Gorman-Rupp Co.	100	3,984
Graco, Inc.	200	7,614
Granite Construction, Inc.	177	5,581
1Griffon Corp.	100	876
1GSI Group, Inc.	100	776
H&R Block, Inc.	1,200	25,680
Harsco Corp.	280	15,235
1Headwaters, Inc.	50	589

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 43

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Industrials (continued)
Healthcare Services Group, Inc.	150	$	2,281
Heartland Express, Inc.	320		4,771
Heartland Payment Systems, Inc.	100		2,360
Heico Corp.	100		2,658
Heidrick & Struggles
International, Inc.	100		2,764
Herman Miller, Inc.	248		6,173
1Hewitt Associates, Inc.	343		13,147
1Hexcel Corp.	336		6,485
1HMS Holdings Corp.	104		2,233
Honeywell International, Inc.	2,500		125,700
Horizon Lines, Inc.	100		995
1HUB Group, Inc.	158		5,393
Hubbell, Inc.	216		8,612
1Huron Consulting Group, Inc.	33		1,496
1Iconix Brand Group, Inc.	200		2,416
IDEX Corp.	278		10,242
1II-VI, Inc.	100		3,492
Illinois Tool Works, Inc.	1,500		71,265
1Infinera Corp.	200		1,764
Ingersoll-Rand Co. Ltd.	1,167		43,681
1Insituform Technologies, Inc.	100		1,523
1Intermec, Inc.	198		4,174
1Iron Mountain, Inc.	682		18,107
1ITT Educational Services, Inc.	137		11,320
ITT Industries, Inc.	650		41,164
J.B. Hunt Transport Services,
Inc.	275		9,152
1Jacobs Engineering Group, Inc.	440		35,508
1JetBlue Airways Corp.	350		1,306
Joy Global, Inc.	427		32,379
Kaman Corp.	100		2,276
1Kansas City Southern	300		13,197
Kaydon Corp.	100		5,141
KBR, Inc.	580		20,248

Kelly Services, Inc.	100	1,933
1Kenexa Corp.	100	1,884
Kennametal, Inc.	268	8,723
1Kforce, Inc.	100	849
1Kirby Corp.	180	8,640
Knight Transportation, Inc.	180	3,294
Koppers Holdings, Inc.	100	4,187
1Korn/Ferry International	180	2,831
L-3 Communications Holdings,
Inc.	456	41,437
1Ladish Co., Inc.	71	1,462
Landstar System, Inc.	200	11,044
1Layne Christensen Co.	100	4,379
Lennox International, Inc.	200	5,792
Lincoln Electric Holdings, Inc.	100	7,870
Lindsay Corp.	55	4,673
Lockheed Martin Corp.	1,280	126,285
Manitowoc Co., Inc.	435	14,151
Manpower, Inc.	234	13,628
Masco Corp.	1,358	21,361
1MasTec, Inc.	200	2,132
Mastercard, Inc.	270	71,690
1McDermott International, Inc.	818	50,626
McGrath RentCorp	100	2,459
1Middleby Corp.	65	2,854
1Mobile Mini, Inc.	81	1,620
Molex, Inc.	280	6,415
1Monster Worldwide, Inc.	446	9,192
1Moog, Inc.	170	6,331
MSC Industrial Direct Co.	124	5,470
Mueller Industries, Inc.	160	5,152
Mueller Water Products, Inc.	100	807
NACCO Industries, Inc.	21	1,561
1Navigant Consulting, Inc.	170	3,325
1NCI Building Systems, Inc.	40	1,469
1Net 1 UEPS Technologies, Inc.	100	2,430
Nordson Corp.	150	10,933
Norfolk Southern Corp.	1,400	87,738
Northrop Grumman Corp.	1,200	80,280

44 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Industrials (continued)
1Old Dominion Freight Line, Inc.	60	$	1,801
1Orbital Sciences Corp.	261		6,149
Oshkosh Truck Corp.	235		4,862
Overseas Shipholding Group	100		7,952
1Owens Corning, Inc.	300		6,825
PACCAR, Inc.	1,300		54,379
Pacer International, Inc.	70		1,506
Pall Corp.	429		17,023
Parker Hannifin Corp.	630		44,932
Pentair, Inc.	389		13,623
1Perini Corp.	100		3,305
1PHH Corp.	170		2,609
1PHI, Inc.	100		4,017
Pitney Bowes, Inc.	777		26,496
Precision Castparts Corp.	500		48,185
Quanex Building Products Corp.	145		2,155
1Quanta Services, Inc.	642		21,359
1Raser Technologies, Inc.	200		1,948
Raven Industries, Inc.	100		3,278
Raytheon Co.	1,500		84,420
1RBC Bearings, Inc.	100		3,332
Regal-Beloit Corp.	160		6,760
Reliance Steel & Aluminum Co.	273		21,046
1Republic Airways Holdings, Inc.	100		866
Republic Services, Inc.	657		19,513
Resources Connection, Inc.	160		3,256
Reynolds American, Inc.	643		30,009
Robbins & Myers, Inc.	100		4,987
Robert Half International, Inc.	529		12,680
Rockwell Automation, Inc.	490		21,428
Rockwell Collins, Inc.	593		28,440
Rollins, Inc.	150		2,223
RR Donnelley & Sons Co.	748		22,208
1RSC Holdings, Inc.	200		1,852

Ryder System, Inc.	231	15,911
1Shaw Group, Inc.	281	17,363
Simpson Manufacturing Co., Inc.	160	3,798
SkyWest, Inc.	242	3,061
Sotheby’s	300	7,911
Southwest Airlines Co.	2,675	34,882
1Spherion Corp.	200	924
1Spirit Aerosystems Holdings, Inc.	387	7,423
SPX Corp.	200	26,346
Steelcase, Inc.	130	1,304
1Stericycle, Inc.	300	15,510
Strayer Education, Inc.	46	9,617
Sun Hydraulics Corp.	100	3,227
1SunPower Corp.	123	8,854
1Superior Essex, Inc.	100	4,463
TAL International Group, Inc.	100	2,274
1TBS International Ltd.	100	3,995
1Team, Inc.	100	3,432
1Tecumseh Products Co.	100	3,278
Teleflex, Inc.	140	7,783
1TeleTech Holdings, Inc.	109	2,176
Tennant Co.	100	3,007
1Terex Corp.	354	18,185
1Tetra Tech, Inc.	200	4,524
Textron, Inc.	922	44,191
1Thomas & Betts Corp.	170	6,434
Timken Co.	290	9,553
Titan International, Inc.	119	4,239
Total System Services, Inc.	567	12,599
1TransDigm Group, Inc.	100	3,359
Tredegar Corp.	100	1,470
Trinity Industries, Inc.	262	9,089
Triumph Group, Inc.	45	2,120
1TrueBlue, Inc.	170	2,246
Tyco Electronics Ltd.	1,851	66,303
Tyco International Ltd.	1,791	71,712
UAL Corp.	416	2,172
Union Pacific Corp.	1,800	135,900
United Parcel Service, Inc.	2,448	150,479

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 45

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Industrials (continued)
1United Stationers, Inc.	100	$	3,695
United Technologies Corp.	3,400		209,780
Universal Forest Products, Inc.	40		1,198
1Universal Technical Institute, Inc.	100		1,246
1URS Corp.	260		10,912
1US Airways Group, Inc.	220		550
1USG Corp.	256		7,570
UTi Worldwide, Inc.	300		5,985
1Valassis Communications, Inc.	200		2,504
Valmont Industries, Inc.	68		7,092
Viad Corp.	57		1,470
1VistaPrint Ltd.	126		3,372
W.W. Grainger, Inc.	247		20,205
Wabash National Corp.	100		756
1Waste Connections, Inc.	230		7,344
Waste Management, Inc.	1,830		69,009
Watsco, Inc.	40		1,672
Watson Wyatt Worldwide, Inc.	170		8,991
Watts Water Technologies, Inc.	91		2,266
Weight Watchers International,
Inc.	109		3,881
Werner Enterprises, Inc.	180		3,344
Woodward Governor Co.	200		7,132
World Fuel Services Corp.	140		3,072
1Wright Express Corp.	110		2,728
1YRC Worldwide, Inc.	136		2,022
Total Industrials			6,224,561
Information Technology–15.6%
13Com Corp.	1,050		2,226
Accenture Ltd.	2,217		90,276
1ACI Worldwide, Inc.	60		1,055
1Actel Corp.	100		1,685
1Activision, Inc.	1,100		37,477
Acxiom Corp.	200		2,298

1ADC Telecommunications, Inc.	498	7,355
1Adobe Systems, Inc.	2,000	78,780
ADTRAN, Inc.	180	4,291
1Advanced Energy Industries, Inc.	100	1,370
1Advanced Micro Devices, Inc.	2,152	12,546
1Advent Software, Inc.	100	3,608
1Affiliated Computer Services, Inc.	272	14,549
1Agilent Technologies, Inc.	1,316	46,771
1Akamai Technologies, Inc.	591	20,561
1Allscripts Healthcare Solutions,
Inc.	100	1,241
Altera Corp.	1,100	22,770
1American Reprographics Co.	104	1,732
1Amkor Technology, Inc.	336	3,498
Amphenol Corp.	600	26,928
1Anadigics, Inc.	200	1,970
Analog Devices, Inc.	1,098	34,883
Analogic Corp.	37	2,334
1Anixter International, Inc.	100	5,949
1Ansoft Corp.	100	3,640
1Ansys, Inc.	300	14,136
1Apple Computer, Inc.	3,200	535,808
Applied Materials, Inc.	4,900	93,541
1Applied Micro Circuits Corp.	237	2,029
1Ariba, Inc.	300	4,413
1Arris Group, Inc.	642	5,425
1Arrow Electronics, Inc.	430	13,210
1Art Technology Group, Inc.	600	1,920
1athenahealth, Inc.	100	3,076
1Atheros Communications, Inc.	198	5,940
1Atmel Corp.	1,450	5,046
1ATMI, Inc.	100	2,792
1Autodesk, Inc.	847	28,637
Automatic Data Processing, Inc.	1,900	79,610
1Avid Technology, Inc.	150	2,549
1Avnet, Inc.	560	15,277
1Avocent Corp.	170	3,162
AVX Corp.	110	1,244
1Axcelis Technologies, Inc.	400	1,952

46 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Information Technology (continued)
1BearingPoint, Inc.	540	$	437
1Benchmark Electronics, Inc.	190		3,105
Black Box Corp.	30		816
Blackbaud, Inc.	194		4,152
1Blackboard, Inc.	100		3,823
1Blue Coat Systems, Inc.	100		1,411
1BMC Software, Inc.	740		26,640
1Broadcom Corp.	1,715		46,802
1Brooks Automation, Inc.	130		1,075
CA, Inc.	1,500		34,635
1Cabot Microelectronics Corp.	100		3,315
1CACI International, Inc.	110		5,035
1Cadence Design Systems, Inc.	1,100		11,110
1Cavium Networks, Inc.	100		2,100
1Cerner Corp.	227		10,256
1Checkpoint Systems, Inc.	160		3,341
1Ciber, Inc.	200		1,242
1Ciena Corp.	274		6,349
1Cirrus Logic, Inc.	300		1,668
1Cisco Systems, Inc.	21,500		500,090
1Citrix Systems, Inc.	670		19,705
1CMGI, Inc.	150		1,590
1Cogent Communications Group,
Inc.	100		1,340
Cognex Corp.	170		3,918
1Cognizant Technology Solutions
Corp.	1,054		34,266
1Cogo Group, Inc.	100		911
Cohu, Inc.	100		1,468
1CommScope, Inc.	198		10,448
1Commvault Systems, Inc.	100		1,664
1Computer Sciences Corp.	600		28,104
1Compuware Corp.	892		8,510
1comScore, Inc.	100		2,182

1Comtech Telecommunications
Corp.	62	3,038
1Concur Technologies, Inc.	200	6,646
1Conexant Systems, Inc.	66	297
Corning, Inc.	5,775	133,114
1Cree, Inc.	290	6,615
CTS Corp.	100	1,005
1Cybersource Corp.	200	3,346
1Cymer, Inc.	150	4,032
1Cypress Semiconductor Corp.	536	13,266
Daktronics, Inc.	100	2,017
1Data Domain, Inc.	100	2,333
1DealerTrack Holdings, Inc.	100	1,411
1Dell, Inc.	7,700	168,476
Diebold, Inc.	255	9,073
1Digital River, Inc.	189	7,292
1Diodes, Inc.	144	3,980
1DSP Group, Inc.	100	700
1Earthlink, Inc.	390	3,374
1eBay, Inc.	3,900	106,587
1Echelon Corp.	100	1,090
1Eclipsys Corp.	180	3,305
1Electro Scientific Industries, Inc.	100	1,417
1Electronic Arts, Inc.	1,100	48,873
Electronic Data Systems Corp.	1,867	46,003
1Electronics for Imaging, Inc.	170	2,482
1EMC Corp.	7,560	111,056
1Emulex Corp.	400	4,660
1Entegris, Inc.	600	3,930
1Epicor Software Corp.	100	691
1EPIQ Systems, Inc.	100	1,420
1Equinix, Inc.	110	9,814
1Exar Corp.	100	754
1Exponent, Inc.	100	3,141
1Extreme Networks	300	852
1F5 Networks, Inc.	316	8,981
Fair Isaac Corp.	178	3,697
1Fairchild Semiconductor
International, Inc.	370	4,340

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 47

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Information Technology (continued)
1FARO Technologies, Inc.	72	$	1,812
1FEI Co.	100		2,278
1Finisar Corp.	792		942
1First Solar, Inc.	142		38,740
1Flextronics International Ltd.	3,100		29,140
1Flir Systems, Inc.	480		19,474
1FormFactor, Inc.	160		2,949
1Forrester Research, Inc.	100		3,088
1Foundry Networks, Inc.	419		4,953
1Gartner, Inc.	210		4,351
1Google, Inc.	870		457,985
1Greatbatch, Inc.	100		1,730
1Harmonic, Inc.	300		2,853
Harris Corp.	495		24,993
Hewlett-Packard Co.	9,200		406,732
1Hittite Microwave Corp.	100		3,562
1Hutchinson Technology, Inc.	100		1,344
1IAC/InteractiveCorp	683		13,168
1IHS, Inc.	161		11,206
IKON Office Solutions, Inc.	310		3,497
Imation Corp.	100		2,292
1Informatica Corp.	320		4,813
InfoSpace, Inc.	50		417
1Ingram Micro, Inc.	560		9,940
1Innerworkings, Inc.	100		1,196
1Integrated Device Technology,
Inc.	604		6,004
Intel Corp.	20,900		448,932
1InterDigital Communications, Inc.	200		4,864
1InterNAP Network Services
Corp.	100		468
International Business Machines
Corp.	5,000		592,650
1International Rectifier Corp.	280		5,376
Intersil Corp.	470		11,430

1Interwoven, Inc.	100	1,201
1Intuit, Inc.	1,183	32,615
1Itron, Inc.	100	9,835
1j2 Global Communications, Inc.	160	3,680
Jabil Circuit, Inc.	608	9,977
Jack Henry & Associates, Inc.	246	5,323
1JDA Software Group, Inc.	100	1,810
1Juniper Networks, Inc.	1,900	42,142
1Kemet Corp.	279	904
KLA-Tencor Corp.	673	27,398
1Knot, Inc.	100	978
1Kulicke & Soffa Industries, Inc.	200	1,458
1L-1 Identity Solutions, Inc.	300	3,996
1Lam Research Corp.	459	16,593
1Lattice Semiconductor Corp.	300	939
1Lawson Software, Inc.	400	2,908
1Lexmark International, Inc.	340	11,366
Linear Technology Corp.	804	26,186
1Littelfuse, Inc.	83	2,619
1LSI Logic Corp.	2,520	15,473
1Macrovision Solutions Corp.	521	7,794
1Magma Design Automation, Inc.	100	607
1Manhattan Associates, Inc.	100	2,373
1ManTech International Corp.	100	4,812
1MarketAxess Holdings, Inc.	100	756
1Marvell Technology Group Ltd.	1,900	33,554
1Mattson Technology, Inc.	200	952
1McAfee, Inc.	580	19,737
1MEMC Electronic Materials, Inc.	829	51,017
1Mentor Graphics Corp.	300	4,740
1MercadoLibre, Inc.	100	3,449
1Metavante Technologies, Inc.	348	7,872
Methode Electronics, Inc.	100	1,045
1Mettler Toledo International, Inc.	120	11,383
Micrel, Inc.	208	1,903
Microchip Technology, Inc.	700	21,378
1Micron Technology, Inc.	2,796	16,776
1MICROS Systems, Inc.	284	8,659
1Microsemi Corp.	280	7,050

48 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Information Technology (continued)
Microsoft Corp.	30,300	$	833,553
1MicroStrategy, Inc.	20		1,295
1MKS Instruments, Inc.	133		2,913
Molex, Inc.	191		4,662
1Monolithic Power Systems, Inc.	100		2,162
Motorola, Inc.	8,362		61,377
1MPS Group, Inc.	240		2,551
1MSC.Software Corp.	200		2,196
MTS Systems Corp.	100		3,588
National Instruments Corp.	200		5,674
National Semiconductor Corp.	999		20,519
1NAVTEQ Corp.	359		27,643
1NCR Corp.	700		17,640
1NetApp, Inc.	1,271		27,530
1NetGear, Inc.	100		1,386
1Netlogic Microsystems, Inc.	100		3,320
1Newport Corp.	100		1,139
1Novatel Wireless, Inc.	100		1,113
1Novell, Inc.	1,220		7,186
1Novellus Systems, Inc.	394		8,349
1Nuance Communications, Inc.	590		9,245
1NVIDIA Corp.	2,000		37,440
1Omniture, Inc.	200		3,714
1OmniVision Technologies, Inc.	180		2,176
1ON Semiconductor Corp.	1,530		14,030
1Openwave Systems, Inc.	110		164
1Oracle Corp.	14,800		310,800
Palm, Inc.	220		1,186
1Parametric Technology Corp.	352		5,868
Park Electrochemical Corp.	100		2,431
Paychex, Inc.	1,221		38,193
1Perficient, Inc.	100		966
PerkinElmer, Inc.	437		12,170
1Perot Systems Corp.	420		6,304

1Phase Forward, Inc.	200	3,594
1Photronics, Inc.	100	704
Plantronics, Inc.	160	3,571
1Plexus Corp.	170	4,706
1PMC-Sierra, Inc.	900	6,885
1Polycom, Inc.	330	8,039
1Powerwave Technologies, Inc.	330	1,403
1Progress Software Corp.	170	4,347
1QLogic Corp.	419	6,113
QUALCOMM, Inc.	5,800	257,346
Quality Systems, Inc.	49	1,435
1Quantum Corp.	800	1,080
1Quest Software, Inc.	200	2,962
1Rackable Systems, Inc.	110	1,474
1Rambus, Inc.	296	5,645
1RealNetworks, Inc.	180	1,188
1Red Hat, Inc.	709	14,669
1RF Micro Devices, Inc.	1,000	2,900
1Riverbed Technology, Inc.	100	1,372
1Rofin-Sinar Technologies, Inc.	120	3,624
1Rogers Corp.	56	2,105
Roper Industries, Inc.	266	17,524
1Rudolph Technologies, Inc.	100	770
1S1 Corp.	200	1,514
1SAIC, Inc.	600	12,486
1salesforce.com, Inc.	350	23,880
1SanDisk Corp.	900	16,830
1Sanmina-SCI Corp.	1,520	1,946
1Sapient Corp.	300	1,926
1ScanSource, Inc.	100	2,676
Seagate Technology LLC	1,888	36,117
1Secure Computing Corp.	200	828
1Semtech Corp.	210	2,955
1Sigma Designs, Inc.	100	1,389
1Silicon Image, Inc.	200	1,450
1Silicon Laboratories, Inc.	150	5,413
1Sina Corp.	200	8,510
1SiRFTechnology Holdings, Inc.	150	648
1Skyworks Solutions, Inc.	480	4,738

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 49

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Information Technology (continued)
1Sohu.com, Inc.	100	$	7,044
1Solera Holdings, Inc.	200		5,532
1SonicWALL, Inc.	300		1,935
1Sonus Networks, Inc.	700		2,394
1Spansion, Inc.	200		450
1SPSS, Inc.	100		3,637
1SRA International, Inc.	150		3,369
1Standard Microsystems Corp.	100		2,715
1Stratasys, Inc.	100		1,846
1Sun Microsystems, Inc.	2,900		31,552
1Sybase, Inc.	278		8,179
1Sycamore Networks, Inc.	360		1,159
1SYKES Enterprises, Inc.	100		1,886
1Symantec Corp.	3,017		58,379
1Synaptics, Inc.	100		3,773
1Synchronoss Technologies, Inc.	87		786
1SYNNEX Corp.	100		2,509
1Synopsys, Inc.	542		12,959
Syntel, Inc.	100		3,372
1Take-Two Interactive Software,
Inc.	285		7,287
1Taleo Corp.	100		1,959
1Taser International, Inc.	200		998
1Tech Data Corp.	180		6,100
Technitrol, Inc.	100		1,699
1Tekelec	300		4,413
1Teledyne Technologies, Inc.	150		7,318
1Tellabs, Inc.	1,593		7,407
1Teradata Corp.	685		15,851
1Teradyne, Inc.	700		7,749
1Tessera Technologies, Inc.	160		2,619
Texas Instruments, Inc.	4,800		135,168
1Thermo Electron Corp.	1,516		84,487
1thinkorswim Group, Inc.	100		705
1THQ, Inc.	180		3,647

1TIBCO Software, Inc.	650	4,972
1TNS, Inc.	100	2,396
1Trident Microsystems, Inc.	180	657
1Trimble Navigation Ltd.	484	17,279
1Triquint Semiconductor, Inc.	600	3,636
1Trizetto Group, Inc.	100	2,138
1TTM Technologies, Inc.	200	2,642
1Tyler Technologies, Inc.	100	1,357
1Ultimate Software Group, Inc.	100	3,563
1Unisys Corp.	1,074	4,242
United Online, Inc.	300	3,009
1Universal Display Corp.	100	1,232
1UTStarcom, Inc.	180	985
1ValueClick, Inc.	312	4,727
1Varian Semiconductor Equipment
Associates, Inc.	262	9,123
1Varian, Inc.	150	7,659
1Vasco Data Security International,
Inc.	100	1,053
1Veeco Instruments, Inc.	100	1,608
1VeriFone Holdings, Inc.	260	3,107
1Verigy Ltd.	200	4,542
1VeriSign, Inc.	810	30,618
1Viasat, Inc.	100	2,021
1Vignette Corp.	100	1,200
1Vishay Intertechnology, Inc.	510	4,524
1VMware, Inc.	100	5,386
1Vocus, Inc.	100	3,217
1Waters Corp.	400	25,800
1Websense, Inc.	160	2,694
1Western Digital Corp.	803	27,728
1Wind River Systems, Inc.	300	3,267
Xerox Corp.	3,327	45,114
Xilinx, Inc.	1,088	27,472
1Yahoo!, Inc.	4,387	90,635
1Zebra Technologies Corp.	285	9,302
1Zoran Corp.	152	1,778
Total Information Technology		8,069,424

50 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Materials–4.8%
A.M. Castle & Co.	100	$	2,861
AbitibiBowater, Inc.	193		1,801
Air Products & Chemicals, Inc.	780		77,111
Airgas, Inc.	257		15,006
AK Steel Holding Corp.	390		26,910
Albemarle Corp.	300		11,973
Alcoa, Inc.	2,924		104,153
Allegheny Technologies, Inc.	300		17,784
1Alpha Natural Resources, Inc.	258		26,907
AMCOL International Corp.	100		2,846
Ameron International Corp.	33		3,959
1Apex Silver Mines Ltd.	119		584
AptarGroup, Inc.	239		10,026
Arch Chemicals, Inc.	100		3,315
Arch Coal, Inc.	534		40,066
Ashland, Inc.	242		11,664
1Aventine Renewable Energy
Holdings, Inc.	100		440
Ball Corp.	336		16,041
Bemis Co.	330		7,399
1Brush Engineered Materials, Inc.	100		2,442
1Buckeye Technologies, Inc.	200		1,692
Cabot Corp.	235		5,713
1Calgon Carbon Corp.	194		2,999
1Cambrex Corp.	100		587
Carpenter Technology Corp.	200		8,730
Celanese Corp.	548		25,022
1Century Aluminum Co.	100		6,649
CF Industries Holdings, Inc.	200		30,560
Chemtura Corp.	930		5,431
Cleveland-Cliffs, Inc.	340		40,525
1Coeur d’Alene Mines Corp.	1,620		4,698
Commercial Metals Co.	420		15,834
Compass Minerals International,
Inc.	125		10,070

Consol Energy, Inc.	675	75,850
1Crown Holdings, Inc.	587	15,256
Cytec Industries, Inc.	138	7,529
Dow Chemical Co.	3,400	118,694
Eagle Materials, Inc.	134	3,394
Eastman Chemical Co.	290	19,969
Ecolab, Inc.	665	28,588
EI Du Pont de Nemours & Co.	3,300	141,537
1Esmark, Inc.	100	1,912
Ferro Corp.	100	1,876
FMC Corp.	264	20,444
Foundation Coal Holdings, Inc.	150	13,287
Freeport-McMoRan Copper &
Gold, Inc.	1,400	164,066
1General Moly, Inc.	300	2,361
Georgia Gulf Corp.	50	145
Gibraltar Industries, Inc.	100	1,597
1GrafTech International Ltd.	400	10,732
1Graphic Packaging Holding Co.	300	606
Greif, Inc.	96	6,147
1Haynes International, Inc.	50	2,877
HB Fuller Co.	238	5,341
1Hecla Mining Co.	500	4,630
Hercules, Inc.	419	7,094
1Horsehead Holding Corp.	200	2,432
Huntsman Corp.	591	6,737
Innophos Holdings, Inc.	100	3,195
Innospec, Inc.	94	1,769
1International Coal Group, Inc.	400	5,220
International Flavors &
Fragrances, Inc.	295	11,523
International Paper Co.	1,467	34,181
1James River Coal Co.	100	5,869
1Jarden Corp.	282	5,144
Kaiser Aluminum Corp.	50	2,676
Louisiana-Pacific Corp.	330	2,802
Lubrizol Corp.	275	12,741
Martin Marietta Materials, Inc.	143	14,813

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 51

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Materials (continued)
Massey Energy Co.	300	$	28,125
MeadWestvaco Corp.	705		16,807
Minerals Technologies, Inc.	78		4,960
Monsanto Co.	2,000		252,880
1Mosaic Co.	560		81,032
Myers Industries, Inc.	100		815
Neenah Paper, Inc.	100		1,671
NewMarket Corp.	60		3,974
Newmont Mining Corp.	1,600		83,456
Nucor Corp.	1,100		82,137
Olin Corp.	300		7,854
1OM Group, Inc.	106		3,476
1Owens-Illinois, Inc.	571		23,805
P.H. Glatfelter Co.	100		1,351
Packaging Corp. of America	326		7,012
1Pactiv Corp.	426		9,044
1Patriot Coal Corp.	100		15,329
Peabody Energy Corp.	963		84,792
1PolyOne Corp.	300		2,091
Potlatch Corp.	181		8,167
PPG Industries, Inc.	590		33,848
Praxair, Inc.	1,140		107,434
Rayonier, Inc.	300		12,738
Rock-Tenn Co.	100		2,999
1Rockwood Holdings, Inc.	200		6,960
Rohm & Haas Co.	492		22,848
Royal Gold, Inc.	100		3,136
RPM International, Inc.	500		10,300
1RTI International Metals, Inc.	88		3,135
Schnitzer Steel Industries, Inc.	100		11,460
Schulman (A.), Inc.	100		2,303
Scotts Miracle-Gro Co.	206		3,619
Sealed Air Corp.	582		11,064
Sigma-Aldrich Corp.	494		26,607

Silgan Holdings, Inc.	40	2,030
1Smurfit-Stone Container Corp.	838	3,411
Sonoco Products Co.	330	10,213
Spartech Corp.	86	811
Steel Dynamics, Inc.	536	20,942
1Stillwater Mining Co.	100	1,183
1Symyx Technologies	60	419
Temple-Inland, Inc.	400	4,508
Texas Industries, Inc.	63	3,536
Titanium Metals Corp.	407	5,694
United States Steel Corp.	428	79,086
1USEC, Inc.	230	1,398
Valspar Corp.	366	6,921
Vulcan Materials Co.	400	23,912
Wausau Paper Corp.	100	771
Westlake Chemical Corp.	100	1,486
Weyerhaeuser Co.	780	39,889
Worthington Industries, Inc.	200	4,100
1WR Grace & Co.	300	7,047
1Zoltek Cos., Inc.	100	2,425
Total Materials		2,501,843
Telecommunication Services–3.1%
Alaska Communications Systems
Group, Inc.	100	1,194
1American Tower Corp.	1,462	61,770
AT&T, Inc.	21,800	734,442
1Cbeyond, Inc.	100	1,602
1Centennial Communications
Corp.	373	2,607
CenturyTel, Inc.	340	12,101
1Cincinnati Bell, Inc.	740	2,945
Citizens Communications Co.	1,098	12,451
1Clearwire Corp.	200	2,592
Consolidated Communications
Holdings, Inc.	100	1,489
1Crown Castle International Corp.	981	37,994
1EchoStar Corp.	141	4,402
Embarq Corp.	542	25,620
Fairpoint Communications, Inc.	295	2,127
1General Communication, Inc.	100	687

52 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Telecommunication Services (continued)
1Global Crossing Ltd.	100	$	1,794
1Harris Stratex Networks, Inc.	300		2,847
1ICO Global Communications
Holdings Ltd.	500		1,630
1IDT Corp.	230		347
1IDT Corp., Class B	200		340
Iowa Telecommunications
Services, Inc.	100		1,761
1iPCS, Inc.	45		1,333
1JDS Uniphase Corp.	797		9,054
1Leap Wireless International, Inc.	239		10,318
1Level 3 Communications, Inc.	5,454		16,089
1Liberty Global, Inc.	600		18,858
1Loral Space & Communications,
Inc.	100		1,762
1MetroPCS Communications, Inc.	800		14,168
1NeuStar, Inc.	246		5,304
1NII Holdings, Inc.	600		28,494
NTELOS Holdings Corp.	100		2,537
1PAETEC Holding Corp.	300		1,905
1Premiere Global Services, Inc.	200		2,916
Qwest Communications
International, Inc.	5,631		22,130
1RCN Corp.	70		755
1Rural Cellular Corp.	66		2,938
1SAVVIS, Inc.	100		1,291
1SBA Communications Corp.	390		14,044
Shenandoah Telecom Co.	100		1,302
Sprint Nextel Corp.	10,000		95,000
1Starent Networks Corp.	100		1,258
1Syniverse Holdings, Inc.	200		3,240
Telephone & Data Systems, Inc.	223		10,541
Telephone & Data Systems, Inc.
(Special Shares)	200		8,820
1TerreStar Corp.	400		1,592
1Time Warner Cable, Inc.	700		18,536

1Time Warner Telecom, Inc.	448	7,182
1US Cellular Corp.	66	3,732
1USA Mobility, Inc.	100	755
Verizon Communications, Inc.	10,400	368,160
1Vonage Holdings Corp.	200	332
Windstream Corp.	1,800	22,212
Total Telecommunication Services		1,609,300
Utilities–4.5%
1AES Corp.	2,357	45,278
AGL Resources, Inc.	291	10,063
Allegheny Energy, Inc.	606	30,367
Allete, Inc.	50	2,100
Alliant Energy Corp.	427	14,629
Ameren Corp.	758	32,010
American Electric Power Co., Inc.	1,500	60,345
American States Water Co.	100	3,494
Aqua America, Inc.	494	7,889
1Aquila, Inc.	1,070	4,034
Atmos Energy Corp.	332	9,153
Avista Corp.	130	2,790
Black Hills Corp.	150	4,809
California Water Service Group	100	3,277
CenterPoint Energy, Inc.	1,057	16,965
CH Energy Group, Inc.	70	2,490
Cleco Corp.	200	4,666
CMS Energy Corp.	900	13,410
Consolidated Edison, Inc.	1,010	39,481
Constellation Energy Group, Inc.	654	53,693
Dominion Resources, Inc.	2,100	99,729
DPL, Inc.	380	10,024
DTE Energy Co.	607	25,761
Duke Energy Corp.	4,600	79,948
1Dynegy, Inc.	1,836	15,698
Edison International	1,160	59,601
El Paso Electric Co.	190	3,762
Empire District Electric Co.	150	2,781
1Enbridge Energy Management
LLC	90	4,604
Energen Corp.	280	21,848

U.S. Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 53

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Utilities (continued)
Energy East Corp.	587	$	14,511
Entergy Corp.	700		84,336
Exelon Corp.	2,420		217,703
FirstEnergy Corp.	1,130		93,033
FPL Group, Inc.	1,396		91,550
Great Plains Energy, Inc.	276		6,977
Hawaiian Electric Industries, Inc.	321		7,938
IDACORP, Inc.	175		5,056
Integrys Energy Group, Inc.	269		13,673
ITC Holdings Corp.	200		10,222
1Kinder Morgan Management
LLC	242		13,032
Laclede Group, Inc.	120		4,844
Macquarie Infrastructure Co.
LLC	168		4,249
MDU Resources Group, Inc.	608		21,195
MGE Energy, Inc.	100		3,262
1Mirant Corp.	800		31,320
Mueller Water Products, Inc.	243		2,075
Nalco Holding Co.	510		10,787
National Fuel Gas Co.	213		12,669
New Jersey Resources Corp.	140		4,571
Nicor, Inc.	169		7,198
NiSource, Inc.	954		17,096
Northeast Utilities	576		14,705
Northwest Natural Gas Co.	90		4,163
NorthWestern Corp.	170		4,321
1NRG Energy, Inc.	826		35,435
NSTAR	420		14,204
OGE Energy Corp.	330		10,464
Oneok, Inc.	400		19,532
Ormat Technologies, Inc.	100		4,918
Otter Tail Corp.	90		3,495
Pepco Holdings, Inc.	667		17,109
1Petrohawk Energy Corp.	800		37,048

PG&E Corp.	1,355	53,780
Piedmont Natural Gas Co.	219	5,729
Pinnacle West Capital Corp.	390	12,000
PNM Resources, Inc.	184	2,201
Portland General Electric Co.	200	4,504
PPL Corp.	1,300	67,951
Progress Energy, Inc.	887	37,103
Public Service Enterprise Group,
Inc.	1,800	82,674
Puget Energy, Inc.	440	10,556
Questar Corp.	629	44,684
1Reliant Energy, Inc.	1,274	27,098
SCANA Corp.	387	14,319
Sempra Energy	938	52,950
Sierra Pacific Resources	786	9,990
SJW Corp.	100	2,640
South Jersey Industries, Inc.	90	3,362
Southern Co.	2,800	97,776
Southern Union Co.	436	11,781
Southwest Gas Corp.	200	5,946
1Southwestern Energy Co.	1,242	59,132
Spectra Energy Corp.	2,300	66,102
TECO Energy, Inc.	749	16,096
UGI Corp.	351	10,077
UIL Holdings Corp.	100	2,941
UniSource Energy Corp.	160	4,962
Vectren Corp.	314	9,800
1VeraSun Energy Corp.	362	1,495
Westar Energy, Inc.	337	7,249
WGL Holdings, Inc.	200	6,948
Wisconsin Energy Corp.	405	18,314
Xcel Energy, Inc.	1,532	30,747
Total Utilities		2,308,297
Total Common Stocks–
(Identified Cost $52,702,907)		50,204,269

54 AARP PORTFOLIOS 2008 ANNUAL REPORT U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Par Amount		Value
U.S. Treasury–0.1%
4United States Treasury Bill,
1.900%, 9/11/2008
(At Amortized Cost)	$	35,000	$	34,867
Total Investments–97.1%				50,239,136
(Identified Cost $52,737,774)
Other Assets & Liabilities–Net–2.9%				1,501,144
Total Net Assets–100.0%			$	51,740,280

¹ Non-income producing security.

² Real Estate Investment Trust (REIT)

³ Investments in non-controlled affiliate. The Portfolio owns shares of State Street Corp. with a cost basis of $94,973 at June 30, 2008.

⁴ Pledged as collateral to ensure the Portfolio is able to satisfy the obligation of its outstanding long futures contracts.

At June 30, 2008, the Fund had the following outstanding long futures contracts:
Description	Number of Contracts	Notional Value		Expiration Date	Unrealized Depreciation
S & P Mini 500 Index Futures	6	$	384,330	September 2008	$	(23,663	)
Russell 2000 E Mini Index Futures	3	$	207,510	September 2008	$	(14,092	)
Futures contracts are valued at the last sale at the market close or at the mean between the bid and asked price if last sale is not available.							��
Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes.

See Notes to Financial Statements.

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 55

International Stock Market Portfolio

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks–95.6%
Aerospace & Defense–0.7%
BAE Systems PLC	7,587	$	66,833
Cobham PLC	2,413		9,501
European Aeronautic Defence
and Space Co. NV	683		12,949
Finmeccanica SpA	654		17,178
Gamesa Corp. Tecnologica SA	390		19,173
Meggitt PLC	1,398		5,914
1Rolls-Royce Group PLC	3,989		27,118
Safran SA	401		7,780
Singapore Technologies
Engineering Ltd.	3,000		6,062
Smiths Group PLC	794		17,166
Thales SA	189		10,774
Zodiac SA	70		3,213
Total			203,661
Air Freight & Couriers–0.4%
Deutsche Post AG	1,798		47,000
Hamburger Hafen und Logistik
AG	54		4,201
TNT NV	835		28,559
Toll Holdings Ltd.	1,308		7,530
Yamato Holdings Co. Ltd.	1,000		13,956
Total			101,246
Airlines–0.2%
Air France-KLM	310		7,440
All Nippon Airways Co. Ltd.	1,000		3,739
British Airways PLC	1,285		5,506
Cathay Pacific Airways Ltd.	3,000		5,717
Deutsche Lufthansa AG	461		9,945
Iberia Lineas Aereas de Espana
SA	811		1,941
1Japan Airlines Corp.	2,000		4,200
Qantas Airways Ltd.	1,889		5,492
Singapore Airlines Ltd.	940		10,154
Total			54,134

Auto Components–0.7%
Aisin Seiki Co. Ltd.	400	13,109
Bridgestone Corp.	1,300	19,869
Compagnie Generale des
Etablissements Michelin	313	22,495
Continental AG	336	34,534
Denso Corp.	1,000	34,372
GKN PLC	1,370	6,082
NOK Corp.	200	3,179
Nokian Renkaat, OYJ	230	11,047
Stanley Electric Co. Ltd.	300	7,261
Sumitomo Rubber Industries,
Inc.	300	2,238
Tokai Rika Co. Ltd.	100	2,067
Toyoda Gosei Co. Ltd.	100	2,919
Toyota Boshoku Corp.	100	2,679
Toyota Industries Corp.	400	12,807
Valeo SA	130	4,176
Total		178,834
Automobiles–3.0%
Bayerische Motoren Werke AG	704	33,867
DaimlerChrysler AG	1,941	120,059
Fiat SpA	1,466	24,031
Fuji Heavy Industries Ltd.	1,000	4,897
Honda Motor Co. Ltd.	3,500	118,985
Isuzu Motors Ltd.	3,000	14,436
Mazda Motor Corp.	2,000	10,378
1Mitsubishi Motors Corp.	8,000	14,540
Nissan Motor Co. Ltd.	4,700	38,816
Peugeot SA	334	18,140
Renault SA	398	32,653
Suzuki Motor Corp.	800	18,909
Toyota Motor Corp.	5,800	273,642
Volkswagen AG	321	92,644
Yamaha Motor Co. Ltd.	400	7,485
Total		823,482
Banks–14.0%
77 Bank Ltd.	1,000	6,281
Alliance & Leicester PLC	805	4,727

56 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Banks (continued)
Allied Irish Banks PLC	1,906	$	29,424
Alpha Bank AE	844		25,518
Anglo Irish Bank Corp. PLC	1,615		15,386
Aozora Bank Ltd.	1,000		2,288
Australia & New Zealand
Banking Group Ltd.	4,085		73,133
Banca Carige SpA	1,495		5,285
Banca Intesa SpA
(Certificates.–participating cumulative)	1,839		9,535
Banca Monte dei Paschi di
Siena SpA	4,092		11,592
Banca Popolare di Milano
SCRL	825		7,743
Banche Popolari Unite SCPA	1,280		30,013
Banco Bilbao Vizcaya
Argentaria SA	7,572		145,110
Banco Comercial Portugues SA	5,203		11,266
Banco de Sabadell SA	1,952		16,506
Banco Espirito Santo SA	451		7,038
Banco Popolare SCRL	1,389		24,672
Banco Popular Espanol SA	1,764		24,417
Banco Santander Central
Hispano SA	13,318		244,741
Bank of East Asia Ltd.	3,035		16,485
Bank of Ireland	2,139		18,613
Bank of Kyoto Ltd.	1,000		10,444
Bank of Yokohama Ltd.	3,000		20,736
Bankinter SA	561		6,387
Barclays PLC	13,985		81,153
Barclays PLC–New Shares	2,996		567
Bendigo Bank Ltd.	531		5,550
BNP Paribas	1,733		157,024
BOC Hong Kong Holdings Ltd.	8,000		21,187
Chiba Bank Ltd.	2,000		14,013
1CITIC International Financial
Holdings Ltd.	4,000		3,052

Commerzbank AG	1,352	40,110
Commonwealth Bank of
Australia	2,813	108,066
Credit Agricole SA	1,927	39,387
Credit Suisse Group	2,225	102,266
Danske Bank A/S	1,010	29,217
DBS Group Holdings Ltd.	2,000	27,718
Deutsche Bank AG	1,083	93,541
Deutsche Postbank AG	166	14,576
Dexia SA	1,144	18,303
DnB NOR ASA	1,600	20,363
EFG Eurobank Ergasias SA	705	16,763
EFG International	103	2,821
Erste Bank der
Oesterreichischen Sparkassen AG	413	25,715
Fukuoka Financial Group, Inc.	2,000	9,022
Gunma Bank Ltd.	1,000	6,658
Hachijuni Bank Ltd.	1,000	6,479
Hang Seng Bank Ltd.	1,600	33,756
HBOS PLC	8,545	46,949
Hiroshima Bank Ltd.	1,000	4,454
HSBC Holdings PLC	25,279	390,380
Intesa Sanpaolo SpA	16,605	94,851
Investec PLC	865	5,304
Iyo Bank Ltd.	1,000	11,705
Joyo Bank Ltd.	1,000	4,859
Julius Baer Holding AG	451	30,497
1Jyske Bank A/S	126	7,516
KBC Groep NV	339	37,651
Lloyds TSB Group PLC	12,056	74,580
Mediobanca SpA	1,077	18,316
Mitsubishi UFJ Financial Group,
Inc.	22,000	194,952
Mizuho Financial Group, Inc.	21	98,088
National Australia Bank Ltd.	3,512	89,006
National Bank of Greece SA	1,053	47,456
Natixis	910	10,102
Nishi-Nippon City Bank Ltd.	1,000	2,976
Nordea Bank AB	4,560	62,899

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 57

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Banks (continued)
OKO Bank PLC	200	$	3,471
Oversea-Chinese Banking
Corp. Ltd.	5,000		30,018
Piraeus Bank SA	711		19,325
Raiffeisen International Bank
Holding AG	119		15,210
Resona Holdings, Inc.	11		16,885
Royal Bank of Scotland Group
PLC	34,323		146,903
Sapporo Hokuyo Holdings, Inc.	1		6,761
Shinsei Bank Ltd.	2,000		6,856
Shizuoka Bank Ltd.	1,000		10,208
Skandinaviska Enskilda Banken
AB	910		16,918
SNS Reaal	278		5,398
Societe Generale	992		86,369
St. George Bank Ltd.	1,186		30,749
Standard Chartered PLC	2,998		85,344
Sumitomo Mitsui Financial
Group, Inc.	14		105,340
Suncorp-Metway Ltd.	2,013		25,104
Suruga Bank Ltd.	1,000		13,005
Svenska Handelsbanken	950		22,628
Swedbank AB	800		15,470
Sydbank A/S	140		5,336
UniCredito Italiano SpA	24,120		147,654
United Overseas Bank Ltd.	3,000		41,048
Westpac Banking Corp.	3,987		76,259
Wing Hang Bank Ltd.	510		6,757
Wing Lung Bank	200		3,922
Total			3,820,126
Beverages–1.3%
Asahi Breweries Ltd.	800		14,932
Carlsberg A/S	160		15,456
Coca-Cola Amatil Ltd.	1,018		6,825

Coca-Cola West Holdings Co.
Ltd.	100	2,331
Diageo PLC	5,469	100,597
Foster’s Group Ltd.	4,256	20,636
Fraser and Neave Ltd.	2,000	6,658
Heineken Holding NV	234	10,737
Heineken NV	520	26,547
InBev NV	400	27,765
Ito En Ltd.	100	1,574
Kirin Brewery Co. Ltd.	2,000	31,227
Lion Nathan Ltd.	498	4,072
Pernod-Ricard SA	350	35,962
SABMiller PLC	1,971	45,201
Sapporo Holdings Ltd.	1,000	6,997
Total		357,517
Biotechnology–0.0%
Grifols SA	272	8,691
Building Products–0.4%
Asahi Glass Co. Ltd.	2,000	24,183
Assa Abloy AB	680	9,848
Cie de Saint-Gobain	603	37,735
Geberit AG	88	12,979
JS Group Corp.	600	9,532
Nippon Sheet Glass Co. Ltd.	1,000	4,944
TOTO Ltd.	1,000	7,044
Wienerberger AG	171	7,182
Total		113,447
Chemicals–3.0%
Akzo Nobel NV	588	40,426
Asahi Kasei Corp.	2,000	10,472
BASF AG	2,062	142,285
Bayer AG	1,632	137,387
Daicel Chemical Industries, Ltd.	1,000	5,631
Dainippon Ink and Chemicals,
Inc.	1,000	2,891
Denki Kagaku Kogyo K. K.	1,000	3,710
GEA Group AG	322	11,378
Givaudan SA	13	11,632
Incitec Pivot Ltd.	131	23,177

58 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Chemicals (continued)
JSR Corp.	400	$	7,948
K+S AG	81		46,722
Kaneka Corp.	1,000		6,809
Kansai Paint Co. Ltd.	1,000		6,922
Koninklijke DSM NV	288		16,948
Kuraray Co. Ltd.	500		5,961
Lonza Group AG	98		13,609
Mitsubishi Chemical Holdings
Corp.	2,500		14,549
Mitsubishi Gas Chemical Co.,
Inc.	1,000		7,213
Mitsubishi Rayon Co. Ltd.	1,000		3,155
Mitsui Chemicals, Inc.	1,000		4,925
Novozymes A/S	110		9,941
Orica Ltd.	675		18,914
Shin-Etsu Chemical Co. Ltd.	900		55,768
Showa Denko K.K.	3,000		7,967
Solvay SA	131		17,140
Sumitomo Chemical Co. Ltd.	3,000		18,900
Syngenta AG	226		73,587
Taiyo Nippon Sanso Corp.	1,000		8,334
Teijin Ltd.	2,000		6,856
Tokuyama Corp.	1,000		7,440
Toray Industries, Inc.	3,000		16,075
Tosoh Corp.	1,000		4,087
Ube Industries Ltd.	2,000		7,082
Wacker Chemie AG	33		6,899
Yara International ASA	350		31,001
Total			813,741
Commercial Services & Supplies–0.8%
Adecco SA	257		12,769
Benesse Corp.	200		8,099
Bureau Veritas SA	86		5,109
Capita Group PLC	1,261		17,258
Cargotec Corp.	65		2,263

Dai Nippon Printing Co. Ltd.	1,000	14,738
Group 4 Securicor PLC	2,609	10,517
Hakuhodo DY Holdings, Inc.	50	2,665
Hays PLC	2,836	5,109
1Invensys PLC	1,783	9,246
Legrand SA	202	5,093
Mitsubishi UFJ Lease & Finance
Co. Ltd.	140	6,078
PagesJaunes Groupe SA	300	4,417
Randstad Holdings NV	220	7,691
Rentokil Initial PLC	3,795	7,498
Secom Co. Ltd.	400	19,437
Securitas AB	680	7,901
Serco Group PLC	984	8,771
SGS SA	10	14,328
Societe BIC SA	70	3,660
Toppan Printing Co. Ltd.	1,000	11,009
WPP Group PLC	2,438	23,502
Total		207,158
Communications Equipment–1.1%
Alcatel SA	4,902	29,796
Nokia OYJ	8,520	207,821
Telefonaktiebolaget LM Ericsson	6,190	64,525
Total		302,142
Computers & Peripherals–0.5%
1Elpida Memory, Inc.	200	6,404
Fujitsu Ltd.	4,000	29,683
1Logitech International SA	381	10,268
Mitsumi Electric Co. Ltd.	200	4,454
NEC Corp.	4,000	20,943
Toshiba Corp.	7,000	51,615
Total		123,367
Construction & Engineering–0.9%
Acciona SA	60	14,253
Actividades de Construction y
Servicios SA (ACS)	413	20,753
Aker Kvaerner ASA	374	8,833
Alstom SA	225	51,966
Amec PLC	730	12,934

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 59

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Construction & Engineering (continued)
Balfour Beatty PLC	1,055	$	8,926
Bilfinger Berger AG	78		6,796
Boart Longyear Group	2,691		5,739
Eiffage SA	79		5,415
FLSmidth & Co. A/S	100		10,980
Fomento de Construcciones y
Contratas SA	100		5,943
Grupo Ferrovial SA	131		8,111
HOCHTIEF AG	83		8,444
Husqvarna AB, Series B	548		4,798
Italcementi SpA	146		1,701
Kajima Corp.	2,000		6,987
Kurita Water Industries Ltd.	200		7,402
Leighton Holdings Ltd.	276		13,422
Obayashi Corp.	1,000		4,530
SembCorp Industries Ltd.	2,000		6,114
Shimizu Corp.	1,000		4,737
Skanska AB	580		8,328
Strabag SE	109		8,496
Taisei Corp.	2,000		4,765
YIT OYJ	240		6,039
Total			246,412
Construction Materials–0.6%
Boral Ltd.	1,193		6,446
Cimpor Cimentos de Portugal
SGPS SA	466		3,141
CRH PLC	1,197		35,159
CSR Ltd.	2,030		4,756
Fletcher Building Ltd.	1,074		5,189
HeidelbergCement AG	53		7,692
Holcim Ltd.	440		35,682
Imerys SA	70		5,072
Italcementi SpA	120		1,995
James Hardie Industries NV	800		3,244
Lafarge SA	321		49,229

Taiheiyo Cement Corp.	2,000	4,012
Titan Cement Co. SA	140	5,556
Total		167,173
Containers & Packaging–0.1%
Amcor Ltd.	1,838	8,877
Rexam PLC	1,263	9,743
Smurfit Kappa Group PLC	276	2,282
Toyo Seikan Kaisha Ltd.	300	5,294
Total		26,196
Distributors–0.3%
Li & Fung Ltd.	4,200	12,658
Metcash Ltd.	1,626	5,754
Olam International Ltd.	2,100	3,750
Reckitt Benckiser Group PLC	1,296	65,660
Total		87,822
Diversified Financials–3.3%
3i Group PLC	837	13,746
Acom Co. Ltd.	100	3,098
Aeon Credit Service Co. Ltd.	100	1,253
Aiful Corp.	100	1,158
Australian Stock Exchange Ltd.	378	11,351
Babcock & Brown International
Property Ltd.	463	3,321
Banco BPI SA	606	2,515
Cattles PLC	22	59
Chinese Estates Holdings Ltd.	2,035	3,132
Credit Saison Co. Ltd.	300	6,300
Criteria Caixacorp SA	1,788	10,727
Daiwa Securities Group, Inc.	3,000	27,573
Deutsche Boerse AG	428	48,317
E*Trade Securities Co. Ltd.	3	2,345
Eurazeo	54	5,764
Experian Group Ltd.	2,098	15,610
Fortis NV	4,504	72,059
1Fortis NV-Strip VVPR	1,664	26
Groupe Bruxelles Lambert SA	177	21,074
Hokuhoku Financial Group, Inc.	2,000	5,801
Hong Kong Exchanges and
Clearing Ltd.	2,000	29,242

60 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Diversified Financials (continued)
Hypo Real Estate Holding AG	297	$	8,362
ICAP PLC	1,044		11,264
IFIL–Investments SpA	663		4,312
ING Groep NV	4,071		129,847
Investor AB	1,000		21,122
Jafco Co. Ltd.	100		3,418
KBC Ancora	67		5,856
Keppel Corp. Ltd.	3,000		24,558
London Stock Exchange Group
PLC	301		4,674
Macquarie Group Ltd.	571		26,561
Man Group PLC	3,709		46,073
1Marfin Investment Group SA	1,412		11,162
Mediolanum SpA	660		2,746
1Mitsubishi UFJ Nicos Co. Ltd.	1,000		3,305
Mitsui Trust Holdings, Inc.	2,000		11,903
Mizuho Trust & Banking Co.
Ltd.	3,000		5,170
Nomura Holdings, Inc.	3,800		56,290
ORIX Corp.	190		27,179
Pargesa Holding SA	57		6,363
Perpetual Ltd.	100		4,090
Promise Co. Ltd.	150		4,195
Schroders PLC	261		4,749
Shinko Securities Co. Ltd.	1,000		2,948
Singapore Exchange Ltd.	2,000		10,155
Sony Financial Holdings, Inc.	2		8,042
Sumitomo Trust & Banking Co.
Ltd.	3,000		20,962
Swire Pacific Ltd.	2,000		20,456
Takefuji Corp.	200		2,782
UBS AG	6,246		131,237
Total			904,252

Diversified Telecommunication Services–3.7%
Belgacom SA	349	15,058
BT Group PLC	16,741	66,619
Deutsche Telekom AG	6,046	99,015
Elisa OYJ	280	5,877
France Telecom SA	3,883	114,403
Hellenic Telecommunications
Organization SA	560	14,109
1Hutchison Telecommunications
International Ltd.	3,000	4,255
Millicom International Cellular SA	149	15,532
Mobistar SA	60	4,861
Nippon Telegraph & Telephone
Corp.	11	53,866
PCCW Ltd.	10,000	6,054
Portugal Telecom SGPS SA	1,418	16,099
Prysmian SpA	272	6,892
Royal KPN NV	3,915	67,198
Singapore Telecommunications
Ltd.	17,300	46,020
Swisscom AG	50	16,697
Tele2 AB	637	12,477
Telecom Corp. of New Zealand
Ltd.	3,743	10,167
Telecom Italia SpA	21,342	43,017
Telecom Italia SpA
(RNC–Participating Cumulative)	12,482	20,245
Telefonica SA	9,148	243,162
Telekom Austria AG	735	15,949
Telenor ASA	1,700	31,985
TeliaSonera AB	4,670	34,573
Telstra Corp. Ltd.	12,218	49,543
Total		1,013,673
Electric Utilities–3.7%
British Energy Group PLC	2,266	32,140
Cheung Kong Infrastructure
Holdings Ltd.	1,000	4,232
Chubu Electric Power Co., Inc.	1,400	34,146
Chugoku Electric Power Co.,
Inc.	600	12,798
CLP Holdings Ltd.	4,500	38,553

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 61

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Electric Utilities (continued)
Contact Energy Ltd.	489	$	2,973
E.ON AG	1,349		272,225
Electric Power Development
Co.	300		11,131
Electricite de France	426		40,477
Enel SpA	9,298		88,435
Energias de Portugal SA	3,838		20,035
Hokkaido Electric Power Co.,
Inc.	400		8,136
Hokuriku Electric Power Co.	400		9,511
HongKong Electric Holdings	3,000		17,949
1Iberdrola Renovables	1,809		14,015
Iberdrola SA	7,432		99,594
International Power PLC	3,112		26,763
Kansai Electric Power Co., Inc.	1,600		37,442
Kyushu Electric Power Co., Inc.	800		16,725
Public Power Corp.	210		7,275
Red Electrica de Espana	218		14,195
Scottish & Southern Energy
PLC	1,823		50,916
Shikoku Electric Power Co.,
Inc.	400		10,999
Solarworld AG	167		7,960
Terna SpA	2,692		11,403
Tohoku Electric Power Co., Inc.	900		19,578
Tokyo Electric Power Co., Inc.	2,600		66,843
Union Fenosa SA	260		15,157
Verbund–Oesterreichische
Elektrizitatswirtschafts–AG	156		13,983
Total			1,005,589
Electrical Equipment–2.2%
1ABB Ltd.	4,668		132,940
Fanuc Ltd.	400		39,062
Fuji Electric Holdings Co. Ltd.	1,000		3,532
Furukawa Electric Co. Ltd.	1,000		4,341
Matsushita Electric Works Ltd.	1,000		10,199

Mitsubishi Electric Corp.	4,000	43,130
Nitto Denko Corp.	300	11,527
Schneider Electric SA	480	51,859
Siemens AG	1,847	205,105
Sumitomo Electric Industries Ltd.	1,500	19,041
Ushio, Inc.	200	3,268
1Vestas Wind Systems A/S	470	61,529
Total		585,533
Electronic Equipment & Instruments–1.0%
Alps Electric Co. Ltd.	300	3,099
Citizen Watch Co. Ltd.	700	5,333
Hirose Electric Co. Ltd.	100	10,039
Hitachi Chemical Co. Ltd.	200	4,134
Hitachi Ltd.	7,000	50,494
Hoya Corp.	900	20,807
Ibiden Co. Ltd.	300	10,905
Keyence Corp.	100	23,816
Kingboard Chemical Holdings
Ltd.	2,000	9,234
Kyocera Corp.	300	28,251
Mabuchi Motor Co. Ltd.	100	5,424
Nidec Corp.	200	13,316
Nippon Electric Glass Co. Ltd.	1,000	17,299
Omron Corp.	400	8,588
Rohm Co. Ltd.	200	11,508
Shimadzu Corp.	1,000	9,954
TDK Corp.	300	17,968
Venture Corp. Ltd.	1,000	7,209
Yaskawa Electric Corp.	1,000	9,803
Yokogawa Electric Corp.	500	4,572
Total		271,753
Energy Equipment & Services–0.5%
Acergy SA	380	8,508
1Cie Generale de Geophysique-
Veritas	260	12,303
Fugro NV	130	11,106
1Renewable Energy Corp. AS	307	7,959
Saipem SpA	563	26,446
SBM Offshore NV	310	11,442

62 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Energy Equipment & Services (continued)
SeaDrill Ltd.	576	$	17,619
Technip SA	225		20,830
WorleyParsons Ltd.	340		12,310
Total			128,523
Food & Drug Retailing–1.7%
Cadbury PLC	2,905		36,577
Carrefour SA	1,349		76,389
Casino Guichard Perrachon SA	98		11,111
Colruyt SA	40		10,571
Delhaize Group	209		14,070
FamilyMart Co. Ltd.	100		4,087
J Sainsbury PLC	2,224		14,090
1Kesko OYJ	160		5,183
1Koninklijke Ahold NV	2,535		34,090
Lawson, Inc.	100		4,869
Seven & I Holdings Co. Ltd.	1,700		48,507
Tesco PLC	16,788		123,419
WM Morrison Supermarkets
PLC	5,176		27,434
Woolworths Ltd.	2,641		61,754
Total			472,151
Food Products–2.4%
Ajinomoto Co., Inc.	1,000		9,455
Associated British Foods PLC	758		11,445
Coca Cola Hellenic Bottling
Co. SA	350		9,535
Danisco A	90		5,787
1Genting International PLC	6,000		2,557
Golden Agri-Resources Ltd.	11,000		7,275
Goodman Fielder Ltd.	2,138		2,873
Groupe DANONE	946		66,439
Kerry Group PLC	260		7,697
Lindt & Spruengli AG	2		5,529
Meiji Dairies Corp.	1,000		5,132
Nestle SA	8,370		377,405

Nisshin Seifun Group, Inc.	500	6,281
Nissin Food Products Co. Ltd.	200	6,705
Parmalat SpA	3,496	9,139
Tate & Lyle PLC	1,060	8,388
Unilever NV	3,543	100,592
Wilmar International Ltd.	2,000	7,436
Yakult Honsha Co. Ltd.	200	5,631
Total		655,301
Gas Utilities–0.6%
AGL Energy Ltd.	958	13,101
Centrica PLC	7,941	49,045
Enagas	373	10,572
Gas Natural SDG SA	220	12,832
Hong Kong & China Gas Co.	8,360	19,878
Osaka Gas Co. Ltd.	4,000	14,653
Snam Rete Gas SpA	1,750	11,967
Toho Gas Co. Ltd.	1,000	5,481
Tokyo Gas Co. Ltd.	5,000	20,153
Total		157,682
Health Care Equipment & Supplies–0.9%
Air Liquide SA	531	70,129
Alfresa Holdings Corp.	100	7,138
Cie Generale d’Optique Essilor
International SA	431	26,361
Cochlear Ltd.	130	5,427
Coloplast A/S	60	5,232
Getinge AB	390	9,549
Luxottica Group SpA	258	6,053
Nobel Biocare Holding AG	235	7,683
Olympus Corp.	1,000	33,807
Phonak Holding AG	100	8,301
Smith & Nephew PLC	1,851	20,414
Straumann Holding AG	20	4,798
Synthes, Inc.	128	17,662
Terumo Corp.	400	20,416
Total		242,970

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 63

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Health Care Providers & Services–0.2%
Celesio AG	190	$	6,875
Fresenius Medical Care AG &
Co. KGaA	396		21,832
Fresenius SE	58		5,021
Mediceo Paltac Holdings Co.
Ltd.	300		5,520
Parkway Holdings Ltd.	2,467		4,206
Sonic Healthcare Ltd.	671		9,337
Suzuken Co. Ltd.	100		3,692
Total			56,483
Hotels Restaurants & Leisure–0.8%
Accor SA	414		27,661
Aristocrat Leisure Ltd.	730		4,482
Autogrill SpA	172		2,065
Carnival PLC	333		10,640
City Developments Ltd.	1,000		7,980
Compass Group PLC	4,139		31,269
Crown Ltd.	943		8,378
Enterprise Inns PLC	1,100		8,890
Intercontinental Hotels Group
PLC	658		8,816
Ladbrokes PLC	1,221		6,241
Lottomatica SpA	146		4,366
OPAP SA	490		17,114
Oriental Land Co. Ltd.	100		5,970
Punch Taverns PLC	502		3,128
Shangri-La Asia Ltd.	2,000		4,668
Sky City Entertainment Group
Ltd.	761		1,772
Sodexho Alliance SA	418		27,461
TABCORP Holdings Ltd.	1,191		11,174
Thomas Cook Group PLC	1,002		4,668
TUI AG	428		9,921
TUI Travel PLC	1,275		5,203
UOL Group Ltd.	1,000		2,498

Whitbread PLC	394	9,663
William Hill PLC	740	4,718
Total		228,746
Household Durables–1.4%
Casio Computer Co. Ltd.	400	4,554
Daito Trust Construction Co.
Ltd.	200	9,700
Daiwa House Industry Co. Ltd.	1,000	9,398
Electrolux AB	532	6,800
Haseko Corp.	2,500	3,343
Koninklijke Philips Electronics NV	2,309	78,574
Makita Corp.	300	12,261
Matsushita Electric Industrial Co.
Ltd.	4,000	86,260
Persimmon PLC	606	3,812
Pioneer Corp.	300	2,415
1Sanyo Electric Co. Ltd.	4,000	9,304
Sekisui Chemical Co. Ltd.	1,000	6,809
Sekisui House Ltd.	1,000	9,332
Sharp Corp.	2,000	32,564
Sony Corp.	2,100	91,760
Taylor Woodrow PLC	2,218	2,738
Total		369,624
Household Products–0.2%
Henkel KGaA	276	10,361
Kao Corp.	1,000	26,227
Uni-Charm Corp.	100	7,110
Total		43,698
Industrial Conglomerates–0.8%
Aeon Mall Co. Ltd.	100	2,957
Brambles Ltd.	3,066	25,598
Burberry Group PLC	870	7,845
Hopewell Holdings Ltd.	1,000	3,553
Hutchison Whampoa Ltd.	5,000	50,403
IVG Immobilien AG	169	3,332
Noble Group Ltd.	3,400	5,921
NWS Holdings Ltd.	2,022	5,277
Orkla ASA	1,719	22,080
Pirelli & C SpA	5,630	3,879

64 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Industrial Conglomerates (continued)
Rheinmetall AG	72	$	5,205
Sonae SGPS SA	1,493		1,798
Tomkins PLC	1,695		5,095
Wendel SA	59		6,002
Wesfarmers Ltd.	322		11,588
Wesfarmers Ltd.-PPS	1,345		47,979
Total			208,512
Insurance–4.2%
Aegon NV	2,850		37,757
Aioi Insurance Co. Ltd.	1,000		5,330
Alleanza Assicurazioni SpA	825		8,957
Allianz AG	957		168,632
AMP Ltd.	3,999		25,586
Assicurazioni Generali SpA	2,254		86,498
Aviva PLC	5,633		56,180
AXA Asia Pacific Holdings Ltd.	1,889		8,455
AXA SA	3,287		97,620
Baloise Holding AG	109		11,494
CNP Assurances	77		8,701
Fondiaria-SAI SpA	141		4,672
Friends Provident PLC	4,940		10,050
Hannover Rueckversicherung
AG	128		6,319
Insurance Australia Group Ltd.	4,248		14,097
Irish Life & Permanent PLC	625		6,531
Legal & General Group PLC	13,524		26,976
Mapfre SA	1,300		6,223
Millea Holdings, Inc.	1,500		58,480
Mitsui Sumitomo Insurance
Group Holdings, Inc.	800		27,573
Muenchener
Rueckversicherungs AG	443		77,614
Nipponkoa Insurance Co. Ltd.	1,000		8,673
Old Mutual PLC	10,816		19,981
Prudential PLC	5,337		56,628

QBE Insurance Group Ltd.	1,923	41,195
Sampo OYJ	923	23,328
SCOR SE	355	8,139
Sompo Japan Insurance, Inc.	2,000	18,796
Standard Life PLC	4,934	20,602
Storebrand ASA	909	6,748
Swiss Life Holding	76	20,333
Swiss Reinsurance	764	50,951
T&D Holdings, Inc.	400	24,597
1Topdanmark A/S	50	7,549
TrygVesta A/S	53	3,749
Unipol Gruppo Finanziario SpA	1,422	3,357
Wiener Staedtische
Versicherung AG	82	5,416
Zurich Financial Services AG	313	80,213
Total		1,154,000
Internet & Catalog Retail–0.1%
Dena Co. Ltd.	1	5,895
Rakuten, Inc.	15	7,571
Total		13,466
Internet Software & Services–0.2%
SBI Holdings, Inc.	21	4,596
Softbank Corp.	1,600	26,970
United Internet AG	267	5,264
Yahoo! Japan Corp.	30	11,555
Total		48,385
It Consulting & Services–0.3%
Atos Origin SA	138	7,643
Cap Gemini SA	307	18,100
Computershare Ltd.	1,089	9,592
CSK Holdings Corp.	100	1,968
Indra Sistemas SA	228	5,931
Itochu Techno-Solutions Corp.	100	3,249
LogicaCMG PLC	2,993	6,435
Nomura Research Institute Ltd.	200	4,690
NTT Data Corp.	3	11,724
Obic Co. Ltd.	20	3,358
Total		72,690

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 65

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Leisure Equipment & Products–0.3%
Fuji Photo Film Co. Ltd.	1,000	$	34,372
Konica Minolta Holdings, Inc.	1,000		16,885
Namco Bandai Holdings, Inc.	400		4,528
Sankyo Co. Ltd.	100		6,517
Shimano, Inc.	100		5,019
Tattersall’s Ltd.	2,237		5,027
Yamaha Corp.	300		5,792
Total			78,140
Machinery–1.8%
Alfa Laval AB	800		12,449
Amada Co. Ltd.	1,000		7,882
Andritz AG	73		4,604
Atlas Copco AB, Series A	1,465		21,582
Atlas Copco AB, Series B	816		10,870
Daikin Industries Ltd.	600		30,285
Hino Motors Ltd.	1,000		6,196
Hitachi Construction Machinery
Co. Ltd.	200		5,603
IMI PLC	700		6,083
Ishikawajima-Harima Heavy
Industries Co. Ltd.	3,000		6,074
Japan Steel Works Ltd.	1,000		19,446
JTEKT Corp.	400		6,343
Kawasaki Heavy Industries Ltd.	3,000		7,995
Komatsu Ltd.	1,900		52,962
Kubota Corp.	2,000		14,371
Linde AG	283		39,796
MAN AG	225		24,982
Metso OYJ	290		13,230
Minebea Co. Ltd.	1,000		5,716
Mitsubishi Heavy Industries Ltd.	7,000		33,355
Mitsui Engineering &
Shipbuilding Co. Ltd.	1,000		3,164
NGK Insulators Ltd.	1,000		19,446

NSK Ltd.	1,000	8,749
NTN Corp.	1,000	6,658
Sandvik AB	2,144	29,360
Scania AB	800	10,955
SembCorp Marine Ltd.	1,400	4,156
SMC Corp.	100	10,952
Sulzer AG	56	7,118
Sumitomo Heavy Industries Ltd.	1,000	6,771
THK Co. Ltd.	200	3,880
Volvo AB, Series A	2,300	28,251
Volvo AB, Series B	14	166
Wartsila OYJ	200	12,582
Zardoya Otis SA	214	4,441
Total		486,473
Marine–0.4%
A.P. Moller–Maersk A	1	12,268
A.P. Moller-Maersk Group A/S	2	24,493
Cosco Corp. Singapore Ltd.	2,000	4,703
Kamigumi Co. Ltd.	1,000	7,562
Kawasaki Kisen Kaisha Ltd.	1,000	9,389
Mitsui OSK Lines Ltd.	2,000	28,496
Neptune Orient Lines Ltd.	1,000	2,374
Nippon Yusen Kabushiki Kaisha	2,000	19,230
Orient Overseas International
Ltd.	1,000	5,002
Pacific Basin Shipping Ltd.	3,000	4,286
1Prosafe Production Public Ltd.	350	2,028
Shun Tak Holdings Ltd.	2,000	1,872
Total		121,703
Media–1.3%
British Sky Broadcasting PLC	2,425	22,786
Daily Mail & General Trust PLC	671	4,191
Dentsu, Inc.	4	8,475
1Eutelsat Communications	186	5,181
Fuji Television Network, Inc.	1	1,507
Gestevision Telecinco SA	184	2,353
ITV PLC	7,996	7,115
JC Decaux SA	134	3,416
John Fairfax Holdings Ltd.	2,824	7,913

66 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Media (continued)
Lagardere SCA	267	$	15,207
M6-Metropole Television	111		2,409
Mediaset SpA	1,687		11,124
Modern Times Group AB	100		5,884
Pearson PLC	1,785		21,836
Promotora de Informaciones SA	138		1,478
Publicis Groupe	273		8,847
Reed Elsevier NV	1,356		22,869
Reed Elsevier PLC	2,413		27,668
Sanoma-WSOY OYJ	130		2,880
SES-FDR	643		16,302
Singapore Press Holdings Ltd.	3,000		9,369
Television Broadcasts Ltd.	1,000		5,771
Television Francaise 1 (TFI)	200		3,348
Thomson Reuters PLC	426		11,398
Toho Co. Ltd.	300		6,131
Tokyo Broadcasting System,
Inc.	100		1,898
United Business Media PLC	465		5,050
Vivendi SA	2,486		94,344
Wolters Kluwer NV	639		14,932
Total			351,682
Metals & Mining–7.2%
Acerinox SA	291		6,704
Alumina Ltd.	2,284		10,354
Anglo American PLC	2,815		197,591
Antofagasta PLC	839		10,990
ArcelorMittal NPV	1,849		182,850
BHP Billiton Ltd.	7,148		298,733
BHP Billiton PLC	4,697		179,526
BlueScope Steel Ltd.	1,630		17,677
Boliden AB	500		4,075
Daido Steel Co. Ltd.	1,000		5,584
Dowa Mining Co. Ltd.	1,000		7,279

Eramet	11	10,930
1Eurasian Natural Resources
Corp.	712	18,894
1Fortescue Metals Group Ltd.	2,681	30,511
Husqvarna AB. Series B NPV	840	13,176
JFE Holdings, Inc.	1,100	55,420
Johnson Matthey PLC	458	16,831
Kazakhmys PLC	435	13,786
Kobe Steel Ltd.	6,000	17,177
Kone OYJ	342	12,031
Lonmin PLC	332	21,090
Maruichi Steel Tube Ltd.	100	3,126
Mitsubishi Materials Corp.	2,000	8,551
Mitsui Mining & Smelting Co.
Ltd.	1,000	2,948
Newcrest Mining Ltd.	987	27,657
Nippon Steel Corp.	11,000	59,563
Nisshin Steel Co. Ltd.	2,000	6,799
OneSteel Ltd.	1,771	12,601
Outokumpu OYJ	200	7,007
1Oxiana Ltd.	3,081	7,690
Oxiana Ltd.	2,824	7,103
Rautaruukki OYJ	180	8,237
Rio Tinto Ltd.	616	79,825
Rio Tinto PLC	2,124	254,075
Salzgitter AG	91	16,680
Sims Group Ltd.	345	13,755
SSAB Svenskt Stal AB, Class A	312	10,099
SSAB Svenskt Stal AB, Class B	250	7,138
Sumitomo Metal Industries Ltd.	8,000	35,182
Sumitomo Metal Mining Co. Ltd.	1,000	15,331
The Umicore Group	250	12,361
ThyssenKrupp AG	776	48,732
Toho Titanium Co. Ltd.	100	1,963
Tokyo Steel Manufacturing Co.
Ltd.	200	2,311
Vallourec Group	113	39,665
Vedanta Resources PLC	306	13,322
Voestalpine AG	233	19,134
Xstrata PLC	1,357	108,703

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 67

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Metals & Mining (continued)
Yamato Kogyo Co. Ltd.	100	$	4,765
Total			1,965,532
Multi-line Retail–0.5%
Aeon Co. Ltd.	1,300		16,050
Compagnie Nationale a
Portefeuille	84		6,309
Harvey Norman Holdings Ltd.	1,080		3,192
Home Retail Group	1,862		8,081
1Isetan Mitsukoshi Holdings Ltd.	740		7,923
J Front Retailing Co. Ltd.	1,000		5,283
1KarstadtQuelle AG	197		2,289
Lifestyle International Holdings
Ltd.	1,500		2,108
Marks & Spencer Group PLC	3,608		23,594
Marui Co. Ltd.	500		3,894
Metro AG	241		15,385
Next PLC	442		8,531
PPR SA	169		18,815
Takashimaya Co. Ltd.	1,000		9,069
Total			130,523
Multi-Utilities–1.3%
AEM SpA	2,665		9,768
RWE AG	950		120,021
Suez SA	2,225		151,500
United Utilities PLC	1,919		26,226
Veolia Environnement	801		44,941
Total			352,456
Office Electronics–0.6%
Brother Industries Ltd.	500		6,870
Canon Marketing Japan, Inc.	200		3,518
Canon, Inc.	2,300		118,260
Neopost SA	60		6,350
Ricoh Co. Ltd.	1,000		18,043
Total			153,041

Oil & Gas–9.1%
Aeroports de Paris	65	6,084
BG Group PLC	7,111	185,017
BP PLC	40,209	466,857
1Cairn Energy PLC	278	17,903
Caltex Australia Ltd.	300	3,747
Cosmo Oil Co. Ltd.	1,000	3,616
ENI SpA	5,537	206,643
Fortum OYJ	940	47,752
Gaz de France SA	410	26,354
Hellenic Petroleum SA	230	3,158
Idemitsu Kosan Co. Ltd.	100	8,871
Inpex Holdings, Inc.	2	25,238
Japan Petroleum Exploration
Co.	100	7,138
1Lundin Petroleum AB	530	7,830
1Mongolia Energy Co. Ltd.	7,000	13,556
National Grid PLC	5,368	70,582
Neste Oil OYJ	277	8,166
Nippon Mining Holdings, Inc.	2,000	12,525
Nippon Oil Corp.	3,000	20,143
Norsk Hydro ASA	1,564	22,853
OMV AG	360	28,265
Origin Energy Ltd.	1,849	28,505
1Paladin Resources Ltd.	1,110	6,805
1Petroleum Geo-Services
ASA	340	8,347
1ProSafe ASA	350	3,471
Repsol YPF SA	1,558	61,408
Royal Dutch Shell PLC	7,583	311,420
Royal Dutch Shell PLC, B
shares	5,875	236,246
Santos Ltd.	1,299	26,647
Showa Shell Sekiyu K.K.	400	4,381
Statoil ASA	2,718	101,370
TonenGeneral Sekiyu K.K.	1,000	9,078
Total SA	4,592	391,921
Tullow Oil PLC	1,583	30,095
Woodside Petroleum Ltd.	1,026	66,232
Total		2,478,224

68 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Paper & Forest Products–0.3%
Holmen AB	130	$	3,819
Lee & Man Paper
Manufacturing Ltd.	2,000		2,975
Mondi PLC	700		4,132
Nippon Paper Group, Inc.	2		5,462
OJI Paper Co. Ltd.	2,000		9,398
Stora Enso OYJ	1,180		11,075
Svenska Cellulosa AB	1,180		16,698
UPM-Kymmene OYJ	1,153		18,882
Total			72,441
Personal Products–0.6%
Beiersdorf AG	187		13,772
L’Oreal SA	518		56,364
Shiseido Co. Ltd.	1,000		22,884
Unilever PLC	2,820		80,221
Total			173,241
Pharmaceuticals–5.7%
1Actelion Ltd.	193		10,346
Astellas Pharma, Inc.	1,000		42,377
AstraZeneca PLC	3,100		132,186
Chugai Pharmaceutical Co.
Ltd.	541		8,656
CSL Ltd.	1,156		39,468
Daiichi Sankyo Co. Ltd.	1,500		41,317
Eisai Co. Ltd.	500		17,657
1Elan Corp. PLC	995		35,075
GlaxoSmithKline PLC	11,648		258,079
Hisamitsu Pharmaceutical
Co., Inc.	100		4,351
Kyowa Hakko Kogyo Co. Ltd.	591		6,055
Merck KGaA	142		20,189
Mitsubishi Tanabe Pharma
Corp.	1,000		13,071
Novartis AG	4,940		272,320
Novo-Nordisk A/S	970		63,493
Ono Pharmaceutical Co. Ltd.	200		11,018

Orion OYJ	168	3,349
Roche Holding AG	1,496	269,761
Sanofi-Aventis	2,180	145,656
Santen Pharmaceutical Co.
Ltd.	200	5,019
Shionogi & Co. Ltd.	1,000	19,729
Shire Ltd.	1,189	19,492
Takeda Pharmaceutical Co.
Ltd.	1,800	91,534
UCB SA	224	8,291
Total		1,538,489
Real Estate–2.4%
2Ascendas Real Estate
Investment Trust	2,000	3,248
1Berkeley Group Holdings
PLC	230	3,123
2British Land Co. PLC	1,099	15,500
2CapitaCommercial Trust	2,000	2,807
2CapitaLand Ltd.	4,000	16,754
2CapitaMall Trust	2,000	4,394
2CFS Retail Property Trust	2,971	5,256
Cheung Kong Holdings Ltd.	3,000	40,438
2Corio NV	80	6,252
2DB RREEF Trust	5,539	7,310
2Gecina SA	33	4,001
2GPT Group	4,561	9,684
2Hammerson PLC	631	11,211
Hang Lung Group Ltd.	2,000	8,888
2Hang Lung Properties Ltd.	4,000	12,825
2Henderson Land Development
Co. Ltd.	2,000	12,466
2Hysan Development Co. Ltd.	1,111	3,049
2ICADE EMGP	40	4,669
1IMMOEAST Immobilien Anlagen
AG	848	7,518
2IMMOFINANZ Immobilien
Anlagen AG	920	9,489
2Japan Prime Realty Investment
Corp.	1	2,957
2Japan Real Estate Investment
Corp.	1	10,547

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 69

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Real Estate (continued)
2Japan Retail Fund Investment
Corp.	1	$	5,763
2Keppel Land Ltd.	1,000		3,645
2Kerry Properties Ltd.	1,545		8,114
2Klepierre SA	143		7,206
2Land Securities Group PLC	988		24,231
Lend Lease Corp. Ltd.	768		7,014
LEOPALACE21 Corp.	300		4,294
2Liberty International PLC	579		9,936
2Link Real Estate Investment
Trust (The Link REIT)	4,657		10,608
2Macquarie Goodman Group	2,947		8,709
2Macquarie Office Trust	4,146		3,093
2Mirvac Group	2,004		5,673
2Mitsubishi Estate Co. Ltd.	2,000		45,767
2Mitsui Fudosan Co. Ltd.	2,000		42,754
2New World Development Ltd.	5,178		10,546
2Nippon Building Fund, Inc.	1		11,771
Nomura Real Estate Holdings,
Inc.	100		2,109
2Nomura Real Estate Office
Fund, Inc.	1		7,524
2NTT Urban Development Corp.	2		2,618
Sacyr Vallehermoso SA	143		4,378
2Segro PLC	857		6,713
2Sino Land Co.	4,109		8,168
2Stockland Trust Group	3,326		17,145
2Sumitomo Realty & Ltd.
Development Co.	1,000		19,870
Sun Hung Kai Properties Ltd.	3,000		40,707
2Tokyo Tatemono Co. Ltd.	1,000		6,470
2Tokyu Land Corp.	1,000		5,679
2Unibail Holding	174		40,256
2Westfield Group	3,747		58,339
Wharf Holdings Ltd.	3,250		13,609
Wheelock & Co. Ltd.	2,000		5,361

Yanlord Land Group Ltd.	1,000	1,359
Total		651,815
Road & Rail–0.8%
Central Japan Railway Co.	3	33,054
ComfortDelgro Corp. Ltd.	3,000	3,307
DSV A/S	400	9,586
East Japan Railway Co.	7	57,020
Firstgroup PLC	908	9,399
Hankyu Hanshin Holdings, Inc.	3,000	12,600
Keihin Electric Express Railway
Co. Ltd.	1,000	6,196
Keio Corp.	1,000	5,057
Keisei Electric Railway Co. Ltd.	1,000	5,114
Kintetsu Corp.	3,000	9,408
MTR Corp.	3,146	9,905
National Express Group PLC	290	5,496
Nippon Express Co. Ltd.	2,000	9,587
Odakyu Electric Railway Co. Ltd.	1,000	6,498
Stagecoach Group PLC	990	5,518
Tobu Railway Co. Ltd.	2,000	9,474
Tokyu Corp.	2,000	10,378
West Japan Railway Co.	4	19,625
Total		227,222
Semiconductor Equipment & Products–0.6%
Advantest Corp.	300	6,314
ASM Pacific Technology	500	3,774
ASML Holding NV	900	22,180
1Infineon Technologies AG	1,665	14,499
Murata Manufacturing Co. Ltd.	500	23,543
1NEC Electronics Corp.	100	2,491
Nikon Corp.	1,000	29,193
1OC Oerlikon Corp. AG	11	3,056
1Q-Cells AG	129	13,110
Seiko Epson Corp.	300	8,249
Shinko Electric Industries	100	1,235
STMicroelectronics NV	1,392	14,491
Sumco Corp.	300	6,639
Tokyo Electron Ltd.	400	23,053
Total		171,827

70 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2008

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Software–0.9%
Dassault Systemes SA	137	$	8,353
Konami Corp.	200		6,987
Nintendo Co. Ltd.	200		112,817
Oracle Corp. Japan	100		4,077
Sage Group PLC	2,714		11,292
SAP AG	1,855		97,155
Square Enix Co. Ltd.	100		2,957
1TomTom NV	140		4,028
Total			247,666
Specialty Retail–0.9%
Billabong International Ltd.	277		2,861
Compagnie Financiere
Richemont AG	1,135		63,290
Esprit Holdings Ltd.	2,500		25,971
Fast Retailing Co. Ltd.	100		9,474
Hennes & Mauritz AB	1,080		58,531
Inchcape PLC	1,025		6,519
Inditex SA	480		22,116
Kingfisher PLC	5,075		11,345
Nitori Co. Ltd.	100		5,142
Sega Sammy Holdings, Inc.	300		2,616
Shimamura Co. Ltd.	100		6,159
USS Co. Ltd.	50		3,301
Yamada Denki Co. Ltd.	180		12,815
Yue Yuen Industrial Holdings
Ltd.	1,000		2,375
Total			232,515
Textiles & Apparel–0.5%
Adidas AG	423		26,717
Bulgari SpA	400		4,041
Christian Dior SA	116		11,965
Hermes International	153		24,093
LVMH Moet Hennessy Louis
Vuitton SA	533		55,881

Puma AG Rudolf Dassler Sport	12	4,028
Swatch Group AG	64	16,009
Swatch Group AG-Registered
Shares	98	4,591
Total		147,325
Tobacco–0.9%
British American Tobacco PLC	3,219	111,436
Imperial Tobacco Group PLC	2,170	80,824
Japan Tobacco, Inc.	10	42,659
Swedish Match AB	500	10,250
Total		245,169
Trading Companies & Distributors–1.1%
Bunzl PLC	675	8,795
Hitachi High-Technologies Corp.	100	2,317
Itochu Corp.	3,000	31,952
Marubeni Corp.	3,000	25,059
Mitsubishi Corp.	2,900	95,583
Mitsui & Co. Ltd.	4,000	88,332
Sojitz Corp.	2,500	8,334
Sumitomo Corp.	2,400	31,528
Toyota Tsusho Corp.	400	9,379
Wolseley PLC	1,385	10,381
Total		311,660
Transportation Infrastructure–0.5%
Abertis Infraestructuras SA	614	14,571
Asciano Group	945	3,136
Auckland International Airport
Ltd.	1,654	2,454
Autostrade SpA	520	15,746
Brisa-Auto Estradas de Portugal
SA	560	6,472
Cintra Concesiones de
Infraestructuras de Transporte SA	561	6,290
Fraport AG Frankfurt Airport
Services Worldwide	78	5,294
Kuehne & Nagel International
AG	119	11,318
Macquarie Airports	1,447	2,851
Macquarie Infrastructure Group	5,490	12,181

International Stock Market Portfolio AARP PORTFOLIOS 2008 ANNUAL REPORT 71

Portfolio of investments
	Shares	Value
Common Stocks (continued)
Transportation Infrastructure (continued)
Transurban Group	2,309	$	9,341
Vinci SA	900		55,272
Total			144,926
Water Utilities–0.0%
Severn Trent PLC	496		12,678
Wireless Telecommunication Services–1.7%
Bouygues SA	517		34,323
Carphone Warehouse Group
PLC	786		3,097
1Foxconn International
Holdings Ltd.	4,000		3,878
KDDI Corp.	6		37,066
NTT DoCoMo, Inc.	34		49,948
PT Multimedia Servicos de
Telecomunicacoes e Multimedia SGPS SA	418		3,475
Vodafone Group PLC	113,152		335,963
Total			467,750
Total Common Stocks–
(Identified Cost $24,870,310)			26,030,678
Preferred Stocks–0.5%
Automobiles–0.2%
Bayerische Motoren Werke AG	111		4,406
Porsche AG	192		29,596
Volkswagon AG	204		29,564
Total			63,566
Diversified Financials–0.0%
1Istituto Finanziario Industriale
SpA	133		2,649
Electrical Equipment–0.0%
Schindler Holding AG	100		7,463
Health Care Providers & Services–0.1%
Fresenius SE	165		14,257

Household Products–0.1%
Henkel KGaA	367		14,627
Insurance–0.0%
Unipol SpA	1,787		3,450
Media–0.0%
ProSiebenSat.1 Media AG	140		1,404
Multi-Utilities–0.1%
RWE AG	84		8,459
Real Estate–0.0%
1Meinl European Land Ltd.	571		6,429
Total Preferred Stocks–
(Identified Cost $106,444)			122,304
Rights–0.0%
1Dowa Mining Co. Ltd. Rights
Exp. 1/29/10	1,000		9
1HBOS PLC Rights Exp.
7/18/08	3,418		732
1Zardoya Otis Rights Exp.
6/30/08	214		441
Total Rights–
(Identified Cost $0)			1,182
Mutual Fund–0.5%
AIM Prime Fund
(At Net Asset Value)	149,506		149,506
Total Investments–96.6%
(Identified Cost $25,126,260)			26,303,670
Other Assets & Liabilities–Net–3.4%			918,038
Total Net Assets–100.0%		$	27,221,708

¹ Non-income producing security.

² Real Estate Investment Trust (REIT).

72 AARP PORTFOLIOS 2008 ANNUAL REPORT International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2008

At June 30, 2008, the Portfolio had the following outstanding long futures contracts:
Description	Number of Contracts	Notional Value		Expiration Date	Unrealized Depreciation
DJEuro Stoxx 50 Index	5	$	266,124	September 2008	$	(16,350	)
FTSE 100 Index	1	$	112,435	September 2008	$	(3,590	)
Topix Index	1	$	124,164	September 2008	$	(7,583	)
MSCI EAFE Index	2	$	196,940	September 2008	$	(7,195	)
Futures contracts are valued at the last sale at the market close or at the mean between the bid and asked price if the last sale is not available.
Unrealized depreciation on open futures contracts is required to be treated as realized loss for tax purposes.

See Notes to Financial Statements.

Financial Statements AARP PORTFOLIOS 2008 ANNUAL REPORT 73

Financial Statements

Statements of assets and liabilities
June 30, 2008
	U.S. Bond Market Portfolio		U.S. Stock Market Portfolio			International Stock Market Portfolio
Assets:
Investments in securities, at value (identified cost of $70,103,360, $52,737,774 and $25,126,260, respectively)	$	70,175,518	$	50,239,136		$	26,303,670
Cash denominated in foreign currency (identified cost of $485,450)		–		–			490,686
Cash		–		106,783			–
Interest and dividend receivable		606,567		65,162			77,473
Reimbursement receivable (Note 6)		4,301		4,071			8,919
Receivable for investments sold		65,459		473,509			234,267
Receivable for fund shares sold		–		903,562			226,168
Receivable for open foreign exchange contracts		–		–			6,975
Total assets	$	70,851,845	$	51,792,223		$	27,348,158
Liabilities:
Payable for investments purchased		4,861,146		–			670
Payable for fund shares redeemed		1,834,038		–			–
Payable for futures daily variation margin		–		1,830			68,879
Accrued portfolio accounting fees (Note 6)		6,768		9,500			15,634
Accrued administration fees (Note 6)		1,883		1,553			807
Accrued transfer and dividend disbursing agent fees and expenses (Note 6)		334		334			334
Accrued audit fees		15,344		15,344			15,344
Accrued printing and postage expenses		4,353		4,353			4,353
Accrued legal fees		10,125		10,125			10,125
Accrued miscellaneous expense		9,305		8,904			10,304
Total liabilities		6,743,296		51,943			126,450
Net assets	$	64,108,549	$	51,740,280		$	27,221,708
Net assets consist of:
Paid-in capital	$	63,981,672	$	54,389,111		$	26,130,358
Undistributed net investment income		12,003		1,084			44,700
Net unrealized appreciation (depreciation) of investments, translation of assets and liabilities in foreign currency and futures contracts		72,158		(2,536,393	)		1,156,286
Accumulated net realized gain (loss) on investments, foreign currency and futures contracts		42,716		(113,522	)		(109,636	)
Net assets	$	64,108,549	$	51,740,280		$	27,221,708
Shares outstanding		6,423,279		5,096,179			2,456,184
Net asset value per share	$	9.98	$	10.15		$	11.08
SeeNotes to Financial Statements.

74 AARP PORTFOLIOS 2008 ANNUAL REPORT Financial Statements

Financial Statements (continued)

Statements of operations
Year ended June 30, 2008
	U.S. Bond Market Portfolio			U.S. Stock Market Portfolio			International Stock Market Portfolio
Investment income:
Dividends (net of foreign taxes withheld of $0, $64 and $82,552, respectively)	$	–		$	972,653		$	875,702
Interest		2,908,293			31,412			16,071
Total investment income	$	2,908,293		$	1,004,065		$	891,773
Expenses:
Investment adviser fee (Note 6)		28,666			25,714			14,104
Administration fees (Note 6)		20,066			18,000			9,873
Transfer and dividend disbursing agent fees and expenses (Note 6)		4,000			4,000			4,000
Trustees’ fees		20,000			20,000			20,000
Audit fees		18,785			18,785			18,785
Legal fees		37,351			37,351			37,351
Portfolio accounting fees (Note 6)		88,714			105,117			168,519
Printing and postage expenses		8,136			8,136			8,136
Insurance expense		12,812			10,497			5,811
Miscellaneous		9,594			9,594			10,294
Total expenses	$	248,124		$	257,194		$	296,873
Waivers and reimbursements (Note 6):
Waiver of investment adviser fee		(28,666	)		(25,714	)		(14,104	)
Reimbursement of expenses by investment adviser		(76,127	)		(102,907	)		(198,142	)
Total waivers and reimbursement	$	(104,793	)	$	(128,621	)	$	(212,246	)
Net expenses		143,331			128,573			84,627
Net investment income		2,764,962			875,492			807,146
Realized and unrealized gain (loss) on investments:
Net realized gain on investments and foreign exchange transactions		179,683			262,223			351,760
Net realized loss on futures contracts		–			(71,576	)		(139,975	)
Net change in unrealized appreciation (depreciation) of investments, translation of assets and liabilities in foreign currency and futures contracts		728,898			(7,842,779	)		(4,131,430	)
Net realized and unrealized gain (loss) on investments, foreign currency and futures contracts		908,581			(7,652,132	)		(3,919,645	)
Change in net assets resulting from operations	$	3,673,543		$	(6,776,640	)	$	(3,112,499	)
See Notes to Financial Statements.

Financial Statements AARP PORTFOLIOS 2008 ANNUAL REPORT 75

Statements of changes in net assets
	U.S. Bond Market Portfolio
	Year ended 6/30/08			Year ended 6/30/07
Increase (decrease) in net assets
Operations:
Net investment income	$	2,764,962		$	1,821,576
Net realized gain on investments, futures contracts and foreign currency		179,683			3,690
Net change in unrealized appreciation (depreciation) of investments, translation of assets and liabilities in foreign currency and futures contracts		728,898			(87,425	)
Change in net assets resulting from operations		3,673,543			1,737,841
Distributions to shareholders:
From net investment income		(2,784,529	)		(1,822,188	)
From net realized capital gains		–			–
Change in net assets resulting from distributions to shareholders		(2,784,529	)		(1,822,188	)
Share transactions (Note 3):
Proceeds from sales of shares		24,505,645			20,679,292
Net asset value of shares issued on reinvestment of dividends		2,784,529			1,822,188
Cost of shares redeemed		(11,830,449	)		(2,625,043	)
Change in net assets resulting from share transactions		15,459,725			19,876,437
Change in net assets		16,348,739			19,792,090
Net assets:
Beginning of year	$	47,759,810		$	27,967,720
End of year	$	64,108,549		$	47,759,810
Undistributed net investment income included in net assets at end of period	$	12,003		$	13,783
SeeNotes to Financial Statements.

76 AARP PORTFOLIOS 2008 ANNUAL REPORT Financial Statements

Financial Statements (continued)

Statements of changes in net assets
	U.S. Stock Market Portfolio
	Year ended 6/30/08			Year ended 6/30/07
Increase (decrease) in net assets
Operations:
Net investment income	$	875,492		$	577,334
Net realized gain on investments, futures contracts and foreign currency		190,647			326,265
Net change in unrealized appreciation (depreciation) of investments, translation of assets and liabilities in foreign currency and futures contracts		(7,842,779	)		5,367,680
Change in net assets resulting from operations		(6,776,640	)		6,271,279
Distributions to shareholders:
From net investment income		(860,659	)		(559,180	)
From net realized capital gains		(600,023	)		(64,598	)
Change in net assets resulting from distributions to shareholders		(1,460,682	)		(623,778	)
Share transactions (Note 3):
Proceeds from sales of shares		18,476,787			16,268,092
Net asset value of shares issued on reinvestment of dividends		1,460,682			623,778
Cost of shares redeemed		(5,546,673	)		(2,621,348	)
Change in net assets resulting from share transactions		14,390,796			14,270,522
Change in net assets		6,153,474			19,918,023
Net assets:
Beginning of year	$	45,586,806		$	25,668,783
End of year	$	51,740,280		$	45,586,806
Undistributed net investment income included in net assets at end of period	$	1,084		$	12,745
SeeNotes to Financial Statements.

Financial Statements AARP PORTFOLIOS 2008 ANNUAL REPORT 77

Statements of changes in net assets
	International Stock Market Portfolio
	Year ended 6/30/08			Year ended 6/30/07
Increase (decrease) in net assets
Operations:
Net investment income	$	807,146		$	615,773
Net realized gain on investments, futures contracts and foreign currency		211,785			324,999
Net change in unrealized appreciation (depreciation) of investments, translation of assets and liabilities in foreign currency and futures contracts		(4,131,430	)		4,528,629
Change in net assets resulting from operations		(3,112,499	)		5,469,401
Distributions to shareholders:
From net investment income		(897,393	)		(665,642	)
From net realized capital gains		(414,219	)		(81,341	)
Change in net assets resulting from distributions to shareholders		(1,311,612	)		(746,983	)
Share transactions (Note 3):
Proceeds from sales of shares		5,336,872			4,022,936
Net asset value of shares issued on reinvestment of dividends		1,311,612			746,983
Cost of shares redeemed		(2,281,411	)		(886,505	)
Change in net assets resulting from share transactions		4,367,073			3,883,414
Change in net assets		(57,038	)		8,605,832
Net assets:
Beginning of year	$	27,278,746		$	18,672,914
End of year	$	27,221,708		$	27,278,746
Undistributed net investment income included in net assets at end of period	$	44,700		$	12,431
SeeNotes to Financial Statements.

78 AARP PORTFOLIOS 2008 ANNUAL REPORT Financial Statements

Financial Statements (continued)

Financial Highlights
(For a share outstanding throughout the period)
	U.S. Bond Market Portfolio
	Year ended 6/30/08			Year ended 6/30/07			Period ended 6/30/061
Net asset value, beginning of period	$	9.77		$	9.70		$	10.00
Income from investment operations:
Net investment income		0.48			0.49			0.19
Net realized and unrealized gain (loss) on investments, futures and foreign currency transactions		0.22			0.07			(0.30	)
Total from investment operations		0.70			0.56			(0.11	)
Less distributions:
Distributions from net investment income		(0.49	)		(0.49	)		(0.19	)
Distributions from net realized gain		–			–			–
Total distributions		(0.49	)		(0.49	)		(0.19	)
Net asset value, end of period	$	9.98		$	9.77		$	9.70
Total return2, 3		7.20	%		5.78	%		(1.05	)%
Ratios to average net assets:
Net expenses		0.25	%		0.25	%		0.25	%4
Net investment income		4.82	%		4.99	%		4.71	%4
Expense waiver/reimbursement5		(0.18	)%		(0.40	)%		(0.92	)%4
Supplemental data:
Net assets, end of period (000 omitted)	$	64,109		$	47,760		$	27,968
Portfolio turnover		62	%		91	%		112	%
1  For the period from January 1, 2006 (commencement of operations) to June 30, 2006. 2  Total returns for periods of less than one year are not annualized. 3  Total returns reflect waivers and/or expense reimbursements. Without these waivers and/or reimbursements, total return would be lower. 4  Computed on an annualized basis. 5  This expense decrease is reflected in both the net expense and net investment income (loss) ratios shown above. See Notes to Financial Statements.

Financial Statements AARP PORTFOLIOS 2008 ANNUAL REPORT 79

U.S. Stock Market Portfolio									International Stock Market Portfolio
Year ended 6/30/08			Year ended 6/30/07			Period ended 6/30/061			Year ended 6/30/08			Year ended 6/30/07			Period ended 6/30/061
$	11.91		$	10.08		$	10.00		$	13.00		$	10.53		$	10.00
	0.18			0.18			0.07			0.40			0.31			0.20
	(1.63	)		1.84			0.08			(1.75	)		2.54			0.50
	(1.45	)		2.02			0.15			(1.35	)		2.85			0.70
	(0.18	)		(0.17	)		(0.07	)		(0.39	)		(0.34	)		(0.17	)
	(0.13	)		(0.02	)		–			(0.18	)		(0.04	)		–
	(0.31	)		(0.19	)		(0.07	)		(0.57	)		(0.38	)		(0.17	)
$	10.15		$	11.91		$	10.08		$	11.08		$	13.00		$	10.53
	(12.35	)%		20.23	%		1.52	%		(10.62	)%		27.41	%		7.10	%
	0.25	%		0.25	%		0.25	%4		0.30	%		0.30	%		0.30	%4
	1.70	%		1.67	%		1.69	%4		2.86	%		2.72	%		4.03	%4
	(0.25	)%		(0.53	)%		(1.34	)%4		(0.75	)%		(0.90	)%		(1.59	)%4
$	51,740		$	45,587		$	25,669		$	27,222		$	27,279		$	18,673
	10	%		5	%		1	%		12	%		4	%		3	%

80 AARP PORTFOLIOS 2008 ANNUAL REPORT Notes to Financial Statements

Notes to Financial Statements

1. Organization

U.S. Bond Market Portfolio, U.S. Stock Market Portfolio and International Stock Market Portfolio (the “Portfolios”) are each a series of AARP Portfolios (the “Trust”). The Trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Portfolios commenced operations on January 1, 2006.

The investment objective of the U.S. Bond Market Portfolio is to seek to produce the returns provided by the Lehman Brothers Aggregate Bond Index^® as closely as possible, before deduction of expenses of the Portfolio. The investment objective of the U.S. Stock Market Portfolio is to seek to produce the returns provided by the Morgan Stanley Capital International (“MSCI”) U.S. Investable Market 2500 Index^® as closely as possible, before deduction of expenses of the Portfolio. The investment objective of the International Stock Market Portfolio is to seek to produce the returns provided by the MSCI Europe, Australasia and the Far East (“EAFE”) Index^® as closely as possible, before deduction of expenses of the Portfolio.

The Portfolios are used as investment vehicles for the AARP Funds and are not available to the public. Accordingly, the only shareholders in the Portfolios are AARP Funds and AARP, which provided a $45 million (value of $51.2 million at June 30, 2008) initial investment for the Portfolios. The initial investment was provided to facilitate the efficient operation of the Portfolios; without this funding, it is anticipated that the Portfolios’ operation could be adversely impacted.

2. Significant accounting policies

The financial statements have been prepared in accordance with United

States generally accepted accounting principles (“GAAP”), which require management to make estimates and assumptions that affect the amounts reported herein. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Portfolios in the preparation of their financial statements.

INVESTMENT VALUATION

Securities are valued as of the close of trading on the New York Stock Exchange (generally 4:00 p.m. Eastern Time) on the valuation date. An independent pricing service generally provides these prices. Stock holdings are valued at the latest quoted sales price or official closing price taken from the primary market in which the stock trades. If a security does not trade during the day, it is valued at the average of the latest quotes for buying and selling the security, the bid and ask prices.

Notes to Financial Statements AARP PORTFOLIOS 2008 ANNUAL REPORT 81

Bond holdings are generally valued as reported by an independent pricing service at what is called an “evaluated average price,” which considers such factors as comparable bond prices, yields, maturities and ratings. Short-term investments with a maturity at issuance, or a remaining maturity at the time of purchase, of 60 days or less are generally valued at amortized cost, which approximates market value. Other open-end regulated investment companies are valued at their net asset value. Foreign securities quoted in foreign currencies are translated into U.S. dollars based upon exchange rates prevailing at the close of trading and as provided by an independent source.

Securities for which market quotations are not readily available, or whose values have been materially affected by events occurring before the Portfolios’ pricing time but after the close of the securities’ primary markets (e.g. foreign securities), are valued by methods deemed by the Board of Trustees of AARP Portfolios to represent fair value. The International Stock Market Portfolio may use a fair valuation model to value international equity securities in order to adjust for events which may occur between the close of foreign exchanges and the close of trading on the New York Stock Exchange in determining net asset value.

The Portfolios adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”), effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. In accordance with FAS 157, fair value is defined as the price that the Portfolios would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. FAS 157 established a three-tier hierarchy for measuring fair value and enhancing disclosure. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

• Level 1 – quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

82 AARP PORTFOLIOS 2008 ANNUAL REPORT Notes to Financial Statements

Notes to Financial Statements (continued)

The following is a summary of the inputs used as of June 30, 2008 in valuing the Portfolios’ investments carried at value:

AARP U.S. Bond Market Portfolio
Valuation Inputs	Investments in Securities
Level 1 – Quoted Prices	$	22,249,911
Level 2 – Other Significant Observable Inputs		47,925,607
Level 3 – Significant Unobservable Inputs		–
Total	$	70,175,518

AARP U.S. Stock Market Portfolio
Valuation Inputs	Investments in Securities		Other Financial Instruments*
Level 1 – Quoted Prices	$	50,239,136	$	(37,755	)
Level 2 – Other Significant Observable Inputs		–		–
Level 3 – Significant Unobservable Inputs		–		–
Total	$	50,239,136	$	(37,755	)

*Other financial instruments include futures.

AARP International Stock Market Portfolio
Valuation Inputs	Investments in Securities		Other Financial Instruments*
Level 1 – Quoted Prices	$	26,303,094	$	28,185
Level 2 – Other Significant Observable Inputs		576		–
Level 3 – Significant Unobservable Inputs		–		–
Total	$	26,303,670	$	28,185

*Other financial instruments include futures and forwards.

REPURCHASE AGREEMENTS

The Portfolios may engage in repurchase transactions. Under the terms of a typical repurchase agreement, the custodian, on behalf of a Portfolio takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the Portfolio to resell, the obligation at an agreed-upon price and time. The market value of the collateral must be equal at all times to the total amount of the repurchase obligation, including interest. Generally, in the event of a counterparty default, the Portfolio has the right to use the collateral to offset losses incurred. However, in the event of a counterparty default, retention of the collateral may be subject to legal proceedings. As of June 30, 2008, there were no repurchase agreements held in the Portfolios.

SECURITIES TRANSACTIONS, INCOME AND EXPENSES

Securities transactions are recorded on a trade date basis. Interest income is recorded daily on an accrual basis and includes amortization of premium and accretion of discount on investments. Dividend income is recorded on the ex-dividend date except that certain dividends from

Notes to Financial Statements AARP PORTFOLIOS 2008 ANNUAL REPORT 83

foreign securities may be recorded after the ex-dividend date based on when the Portfolio was notified of the dividend. Realized gains and losses from securities transactions are recorded on the basis of identified cost. Expenses are accrued daily. Many expenses are directly attributable to one Portfolio and therefore are charged accordingly. Expenses that are not directly attributable to one or more Portfolios are allocated among applicable Portfolios on an equitable and consistent basis considering such things as the nature and type of expenses and the relative net assets of the Portfolios.

FUTURES CONTRACTS

The U.S. Stock Market Portfolio and the International Stock Market Portfolio may purchase and sell stock index futures contracts to fulfill their investment objectives when direct investment would otherwise not be practical, such as when cash positions are small. Upon entering into a stock index futures contract with a broker, the Portfolio is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued at the daily quoted settlement price or at the mean between the bid and asked price if the last sale is not available. Unrealized gains or losses are recorded in a “variation margin” account. Daily, the Portfolio receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Portfolio recognizes a realized gain or loss. Unrealized appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with the changes in the value of the underlying securities. For the year ended June 30, 2008, U.S. Stock Market Portfolio and International Stock Market Portfolio had realized net losses on futures contracts of $71,576 and $139,975, respectively.

FOREIGN EXCHANGE CONTRACTS

The International Stock Market Portfolio may enter into foreign currency commitments for the delayed delivery of securities or foreign currency exchange transactions. The Portfolio may enter into foreign currency contract transactions to protect assets against adverse changes in foreign currency exchange rates or exchange control regulations. Purchased contracts are used to acquire exposure to foreign currencies; whereas, contracts to sell are used to hedge the Portfolio’s securities against currency fluctuations. Risks may arise upon entering into these transactions from the potential inability of counterparties to meet the terms of their commitments and from unanticipated movements in security prices or foreign exchange rates. The foreign currency transactions are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement

84 AARP PORTFOLIOS 2008 ANNUAL REPORT Notes to Financial Statements

Notes to Financial Statements (continued)

purposes as unrealized until the settlement date. At June 30, 2008, the Portfolio had outstanding foreign currency commitments as follows:

Settlement Date	Foreign currency units to receive/deliver	In exchange for	Contracts at value		Unrealized appreciation
Contracts Purchased:
9/30/2008	200,000 EUR	310,570 USD	$	313,482	$	2,912
9/30/2008	64,000 GBP	125,259 USD		126,520		1,261
9/30/2008	15,200,000 JPY	141,494 USD		143,854		2,360
Contracts Sold:
7/2/2008	6,596 AUD	6,346 USD		6,308		38
7/2/2008	18,741 CHF	18,419 USD		18,367		52
7/2/2008	77,211 DKK	16,337 USD		16,303		34
7/2/2008	28,465 EUR	44,904 USD		44,824		80
7/2/2008	18,012 GBP	35,916 USD		35,857		59
7/2/2008	10 578,000 JPY	99,746 USD		99,614		132
7/2/2008	31,107 NOK	6,139 USD		6,109		30
7/2/2008	14,143 SEK	2,365 USD		2,348		17
Net unrealized appreciation on foreign exchange contracts					$	6,975

FOREIGN CURRENCY TRANSLATION

The accounting records of the International Stock Market Portfolio are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies (FCs) are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities and income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Portfolio does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Portfolio’s books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

RESTRICTED SECURITIES

Restricted securities are securities that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or

Notes to Financial Statements AARP PORTFOLIOS 2008 ANNUAL REPORT 85

(b) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security has agreed to register such securities for resale, at the issuer’s expense, either upon demand by the Portfolio or in connection with another registered offering of the securities. Many such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted securities may be determined to be liquid under criteria established by the Portfolios’ Board of Trustees. The Portfolios will not incur any registration costs upon such resales. The Portfolios’ restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined in accordance with procedures established by and under the general supervision of the Portfolios’ Board of Trustees.

Additional information on restricted securities, held by the U.S. Bond Market Portfolio at June 30, 2008, is as follows:

Security	Acquisition date	Acquisition cost		Value
Dr. Pepper Snapple Group, Inc., 6.120%, 5/1/2013	5/2/2008	$	102,765	$	101,467

FEDERAL TAXES

The Portfolios intend to comply with the provisions of the Internal Revenue Code (the “Code”) applicable to regulated investment companies and to distribute substantially all of their investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders; therefore, no federal income or excise tax provision is required. As of June 30, 2008, tax years 2006 through 2008 remain subject to examination by the Portfolios’ major tax jurisdictions, which include the United States of America and the state of Delaware.

In July, 2006, Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement 109 (“FIN 48”), was issued and is effective for years beginning after December 15, 2006. FIN 48 determines a threshold for financial statement recognition, measurement and disclosure of a tax position taken (or expected to be taken) on a tax return. The Portfolios’ financial statements have not been impacted by the adoption of FIN 48.

CUSTODIAN FEES

Custodian fees are included in “Portfolio accounting fees” in the Statements of Operations and may include interest expense incurred by the Portfolios on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from

86 AARP PORTFOLIOS 2008 ANNUAL REPORT Notes to Financial Statements

Notes to Financial Statements (continued)

unanticipated shareholder redemption activity. The Portfolios pay interest to their custodian on such cash overdrafts to the extent they are not offset by positive cash balances maintained by the Portfolios at a rate equal to the Federal Funds Rate plus 2.00%. For the year ended June 30, 2008, the U.S. Bond Market Portfolio paid $133 in overdraft fees, the U.S. Stock Market Portfolio paid $40 in overdraft fees and the International Stock Market Portfolio paid $112 in overdraft fees.

INDEMNIFICATIONS

The Portfolios’ organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Portfolios. In the normal course of business, the Portfolios may also enter into contracts that provide general indemnifications. The Portfolios’ maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Portfolios. The risk of material loss from such claims is considered remote.

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from generally accepted accounting principles. Income distributions, if any, are declared and paid quarterly by the U.S. Stock Market Portfolio and International Stock Market Portfolio, and are paid monthly by the U.S. Bond Market Portfolio. Capital gains distributions, if any, are declared and paid annually by the Portfolios.

NEW ACCOUNTING PRONOUNCEMENTS

On March 19, 2008, the FASB issued Statement of Financial Accounting Standards No. 161 (“SFAS No. 161”), “Disclosure about Derivative Instruments and Hedging Activities.” This new accounting statement requires enhanced disclosures about an entity’s derivative and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity invests in derivatives, (b) how derivatives are accounted for under Statement 133, and (c) how derivatives affect and entity’s financial position, financial performance and cash flows. SFAS No. 161 also requires enhanced disclosures regarding credit-risk-related contingent features of derivative instruments. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. As of June 30, 2008, management of the Portfolios is currently assessing the impact of the expanded financial statement disclosures that will result from adopting SFAS No. 161.

Notes to Financial Statements AARP PORTFOLIOS 2008 ANNUAL REPORT 87

3. Capital share transactions

The Portfolios have authorized an unlimited number of $0.001 par value shares of beneficial interest. Transactions in shares of beneficial interest are as follows:

	Year ended June 30, 2008		Year ended June 30, 2007
U.S. Bond Market Portfolio
Shares sold	2,435,604		2,083,426
Dividends and/or distributions reinvested	277,458		183,994
Shares Redeemed	(1,175,854	)	(264,559	)
Net increase	1,537,208		2,002,861
U.S. Stock Market Portfolio
Shares sold	1,639,791		1,455,017
Dividends and/or distributions reinvested	131,224		55,634
Shares redeemed	(501,759	)	(229,719	)
Net increase	1,269,256		1,280,932
International Stock Market Portfolio
Shares sold	432,845		336,997
Dividends and/or distributions reinvested	110,308		61,901
Shares redeemed	(185,810	)	(73,131	)
Net increase	357,343		325,767

4. Purchases and sales of securities

The aggregate cost of purchases and proceeds from sales of securities for the year ended June 30, 2008, excluding U.S. Government and short-term obligations were as follows:

Portfolio Name	Purchases		Sales
U.S. Bond Market Portfolio	$	7,486,003	$	1,869,483
U.S. Stock Market Portfolio	$	17,961,161	$	5,053,557
International Stock Market Portfolio	$	6,810,156	$	3,187,664

5. Federal income tax information

Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences are attributable to the differing treatments for the deferral of losses on wash sales, the realization for tax purposes of unrealized gains on investments in passive foreign investment companies and differing treatments for futures and foreign currency transactions. Also, due to timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by a Portfolio. Additionally, short-term capital gains are considered ordinary income for income tax purposes.

88 AARP PORTFOLIOS 2008 ANNUAL REPORT Notes to Financial Statements

Notes to Financial Statements (continued)

The tax character of distributions paid during the fiscal years ended June 30, 2008 and 2007, was as follows:

Distributions paid from:
2008							2007
Portfolio Name	Ordinary income		Long-term capital gains		Total		Ordinary income		Long-term capital gains		Total
U.S. Bond Market Portfolio	$	2,784,529	$	–	$	2,784,529	$	1,822,188	$	–	$	1,822,188
U.S. Stock Market Portfolio	$	1,002,945	$	457,737	$	1,460,682	$	608,671	$	15,107	$	623,778
International Stock Market Portfolio	$	1,005,002	$	306,610	$	1,311,612	$	746,983	$	–	$	746,983

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from Generally Accepted Accounting Principles. Reclassifications are made to the Fund’s capital accounts for permanent tax differences to reflect income and gains available for distribution under income tax regulations. During the fiscal year ended June 30, 2008, permanent book and tax basis differences resulting primarily from differing treatments for mortgage paydown gain and losses, foreign currency losses, real estate investment trusts and passive foreign investment companies were identified and reclassified among components of the Funds Net Assets.

Portfolio Name	Undistributed net investment income (loss)			Accumulated net realized gains (loss)
U.S. Bond Market Portfolio	$	17,787		$	(17,787	)
U.S. Stock Market Portfolio	$	(26,494	)	$	26,494
International Stock Market Portfolio	$	122,516		$	(122,516	)

Net investment income (loss), net realized gains (losses), and net assets were not affected by this reclassification.

The table below represents distribution requirements the Portfolios must satisfy under the income tax regulations. In addition, the table represents losses the Portfolios may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes. Under current tax law, certain capital and net foreign currency losses realized after October 31 within the taxable year may be deferred and treated as occurring on the first day of the following year.

Notes to Financial Statements AARP PORTFOLIOS 2008 ANNUAL REPORT 89

Portfolio Name	Undistributed net investment income		Undistributed long-term gain		Accumulated loss carryforward		Post October losses deferred		Net unrealized appreciation (depreciation) based on cost of securities and other investments for federal income tax purposes
U.S. Bond Market Portfolio	$	28,966	$	40,710	$	–	$	–	$	57,201
U.S. Stock Market Portfolio	$	1,194	$	154,317	$	–	$	–	$	(2,804,342	)
International Stock Market Portfolio	$	86,783	$	15,298	$	–	$	–	$	989,269

The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of June 30, 2008 are noted below. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.

Portfolio Name	Federal tax cost of securities		Gross unrealized appreciation		Gross unrealized depreciation			Net unrealized appreciation (depreciation)
U.S. Bond Market Portfolio	$	70,118,317	$	786,303	$	(729,102	)	$	57,201
U.S. Stock Market Portfolio	$	53,043,478	$	6,137,316	$	(8,941,658	)	$	(2,804,342	)
International Stock Market Portfolio	$	25,293,531	$	3,747,494	$	(2,737,355	)	$	1,010,139

6. Fees and other transactions with affiliates

MANAGEMENT AND SUB-ADVISER FEES

The Trust has an investment advisory agreement with AARP Financial Incorporated (“AARP Financial”) which delegates to AARP Financial the responsibility to manage the investment activities of the Portfolios, including the overall investment program of the Portfolios. AARP Financial is also responsible for overseeing the Portfolios’ sub-adviser, SSgA Funds Management, Inc. (“SSgA FM”), which manages the day-to-day investments of the Portfolios’ assets. Each Portfolio pays to AARP Financial an annual fee of 0.05% of its average daily net assets. AARP Financial pays SSgA FM for its sub-advisory services out of these fees. For the year ended June 30, 2008, the effective management fee rates are as shown below:

Portfolio Name	Effective management fee percentage (prior to waiver/reimbursement at AARP Funds level		Effective management fee percentage (after waiver/reimbursement at AARP Funds level
U.S. Bond Market Portfolio	0.05	%	0.00	%
U.S. Stock Market Portfolio	0.05	%	0.00	%
International Stock Market Portfolio	0.05	%	0.00	%

90 AARP PORTFOLIOS 2008 ANNUAL REPORT Notes to Financial Statements

Notes to Financial Statements (continued)

For the year ended June 30, 2008, AARP Financial contractually waived/reimbursed the following fees.

Portfolio Name	Management fee waiver		Reimbursement of other operating expenses
U.S. Bond Market Portfolio	$	28,666	$	76,127
U.S. Stock Market Portfolio	$	25,714	$	102,907
International Stock Market Portfolio	$	14,104	$	198,142

Had AARP Financial not waived/reimbursed these fees, returns for the Portfolios would have been lower.

ADMINISTRATION FEES

As the Portfolios’ administrator, AARP Financial provides the Portfolios with general administrative duties associated with the day-to-day operations of the Portfolios and monitors and coordinates the activities of the other service providers to the Portfolios. For its administrative services, AARP Financial is entitled to receive an annual fee of .035% of each Portfolio’s average daily net assets.

SUB-ADMINISTRATION AND CUSTODIAN FEES

State Street Bank and Trust Company (“State Street”) acts as the sub-administrator, custodian and fund accounting agent for the Portfolios. State Street is a subsidiary of State Street Corporation and an affiliate of SSgA FM. Under the terms of the sub-administration agreement, AARP Financial pays to State Street an annual fee at the rate of 0.0175% of the first $6 billion of the Portfolios’ average daily net assets and then a decreasing rate for average daily net assets above that level. Under the terms of the custody agreement, (which includes fund accounting services) each Portfolio pays to State Street an annual fee at the rate of 0.0075% of the first $2 billion of the Portfolio’s average daily net assets and 0.0025% of the Portfolio’s average daily net assets over $2 billion, plus out of pocket expenses.

Beginning July 1, 2006, under the terms of a transfer agency agreement, each Portfolio pays to State Street an annual fee at the rate of $4,000. State Street has in turn delegated transfer agency services to its affiliate, Boston Financial Data Services, Inc. For the year ended June 30, 2008, AARP Financial paid all transfer agency fees.

TRUSTEE COMPENSATION

The Trust is supervised by a Board of Trustees, (the “Board”). The Board represents the interests of the Portfolios and their shareholders. The Board meets periodically throughout the year to oversee the Portfolios’ activities. The Board consists of four “Independent Trustees”. The compensation of the Independent Trustees consists of an annual retainer paid quarterly. The Trust’s officers do not receive compensation from the Portfolios for their services. Compensation paid by the Portfolios to the Independent Trustees is included in the Portfolios’ Statements of Operations.

Report of Independent Registered Public Accounting Firm AARP PORTFOLIOS 2008 ANNUAL REPORT 91

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders AARP Portfolios:

We have audited the accompanying statements of assets and liabilities of U.S. Stock Market Portfolio, International Stock Market Portfolio, and U.S. Bond Market Portfolio, each a series of AARP Portfolios, including the portfolio of investments, as of June 30, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the three-year period then ended. These financial statements and financial highlights are the responsibility of 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 2008, by correspondence with custodians and brokers, or by other appropriate auditing procedures. 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 U.S. Stock Market Portfolio, International Stock Market Portfolio, and U.S. Bond Market Portfolio as of June 30, 2008, and the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the three-year period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

August 20, 2008

92 AARP PORTFOLIOS 2008 ANNUAL REPORT AARP Portfolios–Supplemental Information

AARP Portfolios—

Supplemental Information (unaudited)

2008 U.S. Tax Distribution Information to Shareholders

Corporate Dividends Received Deduction. For the year ended June 30, 2008, a percentage of dividends distributed by the Portfolios listed below qualifies for the dividends received deduction for corporate shareholders. These percentages are as follows:

Fund	Qualifying Percentages
U.S. Bond Market Portfolio	–	%
U.S. Stock Market Portfolio	97.39
International Stock Market Portfolio	–

Qualified Dividend Income. The amount of dividends distributed by the Portfolios during the fiscal year ended June 30, 2008, are considered qualified dividend income, and are eligible for reduced tax rates. These lower rates range from 5% to 15% depending on an individual’s tax bracket. These amounts and corresponding percentage of dividends paid are as follows:

Fund	Percentage of Dividends Paid		��	Amounts
U.S. Bond Market Portfolio	–	%		$	–
U.S. Stock Market Portfolio	89.03				892,953
International Stock Market Portfolio	88.83				892,753

Proxy voting policies, procedures and record

Both a description of the policies and procedures that AARP Financial uses to determine how to vote proxies on behalf of the AARP Portfolios relating to portfolio securities and information regarding how AARP Financial voted proxies related to portfolio securities during the most recent 12-month period ended June 30 is available on our web site at www.aarpfunds.com and, without charge, upon request, by calling us at 1-800-958-6457. Such information for the AARP Portfolios is also available on the Securities and Exchange Commission’s (“SEC”) website at www.sec.gov.

Shareholder statements and reports

When we send financial reports, prospectuses and other regulatory materials to shareholders, we attempt to reduce the volume of mail you receive by sending one copy of these documents to two or more account holders who share the same address. However, if you wish to receive individual copies of materials, please contact us at 1-800-958-6457. Once we have received your instructions, we will begin sending individual copies for each account within 30 days.

AARP Portfolios–Supplemental Information AARP PORTFOLIOS 2008 ANNUAL REPORT 93

Statement regarding availability of quarterly portfolio schedule

The Portfolios will file complete schedules of investments with the SEC for the quarters ended September 30 and March 31 of each fiscal year (commencing with the quarter ended March 31, 2006) on Form N-Q which will be available on the SEC’s website at www.sec.gov. Additionally, the Portfolios’ Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington DC. For information on the Public Reference Room, call 1-800-SEC-0330.

94 AARP PORTFOLIOS 2008 ANNUAL REPORT About the Portfolios’ Board of Trustees and Officers

About the Portfolios’ Board of Trustees

and Officers (unaudited)

The Board of Trustees (“Board”) of the AARP Portfolios oversee the operation and management of the Portfolios.

The Board is comprised of four trustees who are independent, meaning that they are not “interested persons” of AARP Portfolios for purposes of the Investment Company Act. Put simply, this means that they do not have material affiliations with AARP Portfolios, AARP Financial or SSgA FM apart from the personal investments they may have made in AARP Funds as private individuals.

Our independent board members bring distinguished backgrounds in business, academia and public service to their task of working with AARP Portfolios officers to establish policies and oversee the activities of the Portfolios.

The table below shows information for each trustee and executive officer of AARP Portfolios. The mailing address of the trustees and officers is AARP Funds, 650 F Street, N.W., Washington, DC 20004, Attn: Fund Secretary.

Independent trustees

PETER C. CLAPMAN c/o AARP Financial, Inc. 650 F Street, N.W. Washington, DC 20004 Age: 72 Chairman of the Board and Trustee since 2005

Consultant, governance advisory services (July 2005–present) Head of U.S. operations, Governance for Owners (governance services and consulting) (June 2005–present) Executive Director, Pace Law School (director education) (April 2005–September 2006) Member, NASDAQ Listing Council (2005–present) Senior Vice President and Chief Counsel, TIAA-CREF (financial services, pension and investment products) (1972–July 2005). Other trusteeships held: Director, iPass, Inc. (February 2007–present) Director, National Association of Corporate Trustees (non-profit private director education) (January 2005–present)

RICHARD M. REILLY c/o AARP Financial, Inc., 650 F Street, N.W., Washington, DC 20004 Age: 70 Trustee since 2006

Self-Employed Consultant (November 2002–present) Senior Vice President, Allmerica Financial Corp. (financial services holding company) (November 2001–November 2002) President, Allmerica Financial Services (investments/insurance) (1995–November 2001). Other trusteeships held: Trustee, International Foundation for Retiement Education (InFRE) (September 2006–present) Trustee, Allmerica Investment Trust (investment company) (1990–November 2002) Trustee, Allmerica Securities Trust (1990–November 2002)

About the Portfolios’ Board of Trustees and Officers AARP PORTFOLIOS 2008 ANNUAL REPORT 95

ELLEN B. SAFIR, CFA c/o AARP Financial, Inc., 650 F Street, N.W., Washington, DC 20004 Age: 64 Trustee since 2006	Chief Executive Officer, New Century Advisors, LLC (registered investment adviser) (2002–present) President, CFA Society of Washington, DC (July 2007–present) Member, Investment Committee, United States Holocaust Memorial Museum (June 1997–present); Managing Director, Fixed Income and Currencies, Howard Hughes Medical Institute (medical research) (1986–2002).
LYNN E. TURNER c/o AARP Financial, Inc., 650 F Street, N.W., Washington, DC 20004 Age: 56 Trustee since 2005	Self-Employed Consultant (June 2007–present) Managing Director of Research, Glass Lewis & Co. LLC (financial and proxy research) (July 2003–June 2007) Managing Director/Senior Advisor, Kroll, Inc. (forensic accounting) (July 2003–present) Professor, Colorado State University (August 2001–June 2003) Chief Accountant, Securities and Exchange Commission (July 1998–August 2001). Other trusteeships held: Director, Guidance Software, Inc. (April 2007–February 2008) Trustee, Colorado Public Employees Retirement Association (COPERA) (August 2007–present)
Officers
RICHARD M. HISEY, CFA Two Highwood Drive, 2nd Floor Tewksbury MA 01876 Age: 49 President Treasurer and Chief Financial Officer	President, AARP Financial (May 2008–present); Chief Investment Officer, AARP Financial (April 2006–present); Executive Vice President and Chief Investment Officer, Cole Management, Incorporated (venture capital firm) (2005–2006); Senior Vice President, MFS Investment Management and Treasurer and Chief Financial Officer, MFS Group of Mutual Funds (2002–2005); Senior Vice President, The Bank of New York (2000–2002).

SUSAN KIRKPATRICK Two Highwood Drive 2nd Floor Tewksbury, MA 01876 Age: 42 Chief Compliance Officer	Chief Compliance Officer, AARP Financial (November 2007–present); Director of Compliance, AARP Financial (December 2005–November 2007); Chief Compliance Officer, Grail Partners (investment banking) (March 2005–December 2005); Director, Devonshire Financial Group (consulting) (September 2004–December 2005); NewRiver, Inc. (electronic delivery of compliance documents) (July 1999–September 2004)
MARC DUFFY 650 F Street, N.W. Washington, DC 20004 Age: 50 Secretary	Associate General Counsel, AARP Financial (August 2006–present); Assistant General Counsel, E*TRADE Financial Corporation (January 2004–August 2006); Assistant General Counsel, Legg Mason Wood Walker, Incorporated (September 1999–January 2004).

96 AARP PORTFOLIOS 2008 ANNUAL REPORT About the Portfolios’ Board of Trustees and Officers

About the Portfolios’ Board of Trustees

and Officers (unaudited) (continued)

JEFFREY J. GABOURY Two Highwood Drive, 2nd Floor Tewksbury MA 01876 Age: 39 Assistant Treasurer	Assistant Treasurer, AARP Financial (April 2008–August 2008); Deputy Treasurer, Lord, Abbett & Co. LLC (June 2006–April 2008); Treasurer and Chief Financial Officer of the New York Life Investment Management Group of Mutual Funds (December 2004–December 2005); Director of Compliance, Investors Bank & Trust Company (August 1996–November 2004)
JULIE TEDESCO State Street Bank and Trust Company 4 Copley Place 5th Floor Boston, MA 02116 Age: 50 Assistant Secretary	Senior Vice President and Senior Managing Counsel, State Street Bank and Trust Company (2000–present).
THERESA DEWAR State Street Bank and Trust Company The John Hancock Tower 14th Floor Boston, MA 02116 Age: 53 Assistant Treasurer	Senior Vice President, Fund Administration, State Street Bank and Trust Company (1997–present).

Additional information about AARP Funds’ trustees is provided in the Statement of Additional Information and is available without charge, upon request, by calling 1-800-958-6457.

AARP Portfolios

P.O. Box 909

Tewksbury, MA 01876-0909

^©2008 AARP Portfolios

ARP-AR-002-0808

Item 2. Code of Ethics

(a) AARP Portfolios (the “Registrant”) has adopted a Code of Ethics that applies to the Registrant’s principal executive officer and senior financial officers, including the principal financial officer, controller or principal accounting officer, or persons performing similar functions, regardless of whether these persons are employed by the Registrant or a third party.

(b) No disclosures are required by this Item 2(b).

(c) There have been no amendments to the Registrant’s Code of Ethics during the reporting period for Form N-CSR.

(d) There have been no waivers granted by the Registrant to individuals covered by the Registrant’s Code of Ethics during the reporting period for Form N-CSR.

(e) Not applicable.

(f) A copy of the Registrant’s Code of Ethics is attached as an exhibit to this Form N-CSR.

Item 3. Audit Committee Financial Expert

(a)     (1) The Board of Trustees of the Registrant has determined that the Registrant has one member serving on the Registrant’s Audit Committee that possesses the attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as “audit committee financial expert.”

(2) For the reporting period, the name of the audit committee financial expert was Lynn Turner. Mr. Turner was deemed to be “independent” as that term is defined in Item 3(a)(2) of Form N-CSR.

Item 4. Principal Accountant Fees and Services

(a) Audit Fees – The aggregate fees billed for professional services rendered by the independent registered public accounting firm for the audit of the Registrant’s annual financial statements or services normally provided in connection with statutory and regulatory filings or engagements for the last two fiscal years ended June 30, 2008 and June 30, 2007 were $58,387.50 and $145,000, respectively.

(b) Audit-Related Fees – The Registrant was not billed any fees by the independent registered public accounting firm for the fiscal years ended June 30, 2008 and June 30, 2007 for assurance and related services rendered by the independent registered public accounting firm to the Registrant that are reasonably related to the performance of the audit of the Registrant’s financial statements and are not reported under paragraph (a) of this Item 4.

During the fiscal years ended June 30, 2008 and June 30, 2007, no fees for assurance and related services that relate directly to the operations and financial reporting of the Registrant were billed by the independent registered public accounting firm to the Registrant’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant.

(c) Tax Fees – During the fiscal years ended June 30, 2008 and June 30, 2007, no fees for tax compliance, tax advice, tax planning and tax return preparation were billed by the independent registered public accounting firm to the Registrant.

During the fiscal years ended June 30, 2008 and June 30, 2007, no fees for tax compliance, tax advice or tax planning services that relate directly to the operations and financial reporting of the Registrant were billed by the independent registered public accounting firm to the Registrant’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant.

During the fiscal years ended June 30, 2008 and June 30, 2007, the Registrant was billed $19,725 and $21,200, respectively by another accounting firm for tax compliance, tax advice, tax planning and tax return preparation.

During the fiscal years ended June 30, 2008 and June 30, 2007, no fees for tax compliance, tax advice or tax planning services that relate directly to the operations and financial reporting of the Registrant were billed by another accounting firm to the Registrant’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant.

(d) All Other Fees – During the fiscal years ended June 30, 2008 and June 30, 2007, there were no fees billed for products and services provided by the independent registered public accounting firm to the Registrant, other than the services reported in paragraph (a) – (c) of this Item 4.

During the fiscal years ended June 30, 2008 and June 30, 2007, no fees for other services that relate directly to the operations and financial reporting of the Registrant were billed by the independent registered public accounting firm to the Registrant’s investment adviser or any other entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant.

(e)(1) Pre-Approval Policies and Procedures

It is the general policy of the Audit Committee not to approve non-audit services. In considering whether to approve non-audit services, the Audit Committee will consider the following:

(a) whether the service is being performed principally for the Audit Committee;

(b) the effects of the service, if any, on audit effectiveness or on the quality and timeliness of the Funds financial reporting process;

(c) whether the service would be performed by specialists (e.g., technology specialists) who ordinarily also provide recurring audit support;

(d) whether the service would be performed by audit personnel and, if so, whether it will enhance their knowledge of the Funds business and operations;

(e) whether the role of those performing the service would be inconsistent with the Auditor’s role (e.g., a role where neutrality, impartiality and auditor skepticism are likely to be subverted);

(f) whether the audit firm’s personnel would be assuming a management role or creating a mutuality of interest with management;

(g) whether the auditors, in effect, would be auditing their own numbers;

(h) whether the project must be started and completed very quickly and therefore is not a longer term relationship;

(i) whether the audit firm has unique service expertise in the service that cannot be obtained from another service provider; and

(j) the size of the fee(s) for the non-audit service(s).

(e)(2) Percentage of Services.

One hundred percent of the services described in each of paragraphs (b) through (d) of this Item were approved by the registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) No disclosures are required by this Item 4(f).

(g) The independent registered public accounting firm did not bill the Registrant for any other non-audit services for the fiscal years ended June 30, 2008 and June 30, 2007 for the Registrant other than as disclosed above.

(h) No disclosures are required by this Item 4(h).

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments

Schedule of Investments is included as a part of the report to shareholders filed under Item 1 of this Form N-CSR.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable.

Item 8. Portfolio Managers of Closed-End Investment Companies

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders

The Board of Trustees has adopted procedures by which shareholders may recommend nominees to the Board. There have been no amendments to such procedures during the reporting period for Form N-CSR.

Item 11. Controls and Procedures

(a) The Registrant’s principal executive and principal financial officers have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c)) are effective, as of a date within 90 days of the filing date of this Form N-CSR based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits

(a)(1) Code of Ethics is attached hereto.

(a)(2) The certifications required by Rule 30a-2(a) of the 1940 Act are attached hereto. (Ex-99.CERT)

(a)(3) Not applicable.

(b) The certifications required by Rule 30a-2(b) of the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.(Ex-99.906CERT)

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.

AARP PORTFOLIOS
By:	/s/    Richard M. Hisey
	Richard M. Hisey
	President (principal executive officer) of AARP Portfolios
Date:	August 19, 2008

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:	/s/    Richard M. Hisey
	Richard M. Hisey
	President (principal executive officer) of AARP Portfolios
Date:	August 19, 2008
By:	/s/    Richard M. Hisey
	Richard M. Hisey
	Treasurer (principal financial officer) of AARP Portfolios
Date:	August 19, 2008