AARP Portfolios NCSR 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, NW

Washington, DC 20004-1604

(Address of principal executive offices)(Zip code)


(Name and Address of Agent for Service)		*Copy to:*

Jeff Gaboury 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, 2010

Item 1.

Report to Shareholders

LOGO

Annual Report

June 30, 2010

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 the AARP Funds’ asset allocation funds, which include the AARP Conservative Fund, AARP Moderate Fund, AARP Aggressive Fund, and AARP Income Fund, (collectively,) (“the Fund”).’s

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

LOGO

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

U.S. Stock Market Portfolio
Portfolio composition		5
Performance		5

International Stock Market Portfolio
Portfolio composition		7
Performance		7
Country Allocation		8

Understanding Your Expenses		9


Financial Statements		78
Portfolio of investments		11
Statements of assets and liabilities		78
Statements of operations		79
Statements of changes in net assets		80
Financial highlights		82

Notes to Financial Statements		84

AARP Portfolios— Supplemental Information		100

About the Portfolios’ Board of Trustees and Officers		102

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 2010 ANNUAL REPORT		1

U.S. Bond Market Portfolio



Portfolio composition (As a percentage of net assets)
June 30, 2010

Mortgage-backed securities	34.4%	Municipal bonds	0.5 %

U.S. Treasury	32.2%	Asset-backed securities	0.3 %

Corporate bonds	18.1%	Cash equivalents	3.4 %

U.S. Government Agencies	6.6%	Other assets and liabilities, net	(3.8)%

International debt	5.1%	Total net assets	100.0 %

Commercial mortgage-backed securities	3.2%

See Notes to Financial Statements.



Performance *as of June 30, 2010*

Growth of $10,000 This graph illustrates the hypothetical investment of $10,000 in the U.S. Bond Market Portfolio from December 30, 2005 (inception date) through June 30, 2010, compared to the Barclays Capital Aggregate Bond Index^®.

		This hypothetical example does not represent the returns of any particular investment.



Performance Summary	Average Annual Returns *as of June 30, 2010*	1-Year	3-Years	Since inception

	U.S. Bond Market Portfolio	9.12%	7.47%	5.99%¹

	Barclays Capital Aggregate Bond Index^®	9.50%	7.55%	6.20%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 Fund assumes the
reinvestment of all dividends and distributions. The index above has been adjusted to reflect reinvestment of dividends on
securities in the index. 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.aarpfinancial.com or call 1-800-958-6457.

¹ For the period from December 30, 2005 (inception date) to June 30, 2010.

Sources: Barclays Capital, Inc., AARP Financial


2		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

LOGO

Barclays Capital 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

The fund seeks to replicate the total return of the Barclays Capital Aggregate Bond Index.

For the 12-month period ending June 30, 2010, the U.S. Bond Market portfolio returned +9.12%, net of fees, versus the benchmark return of +9.50%. The index return reflects all items in terms of income, gain and loss, and the reinvestment of other income.*

At the start of the 3rd quarter 2009, signs that the U.S economy was getting back on track continued to emerge. The U.S. Congress provided an additional $2 Billion to the “cash for clunkers” program, which was spurring much-needed demand for the auto industry. Further good news included a slowing in the economy’s overall decline, as U.S. GDP contracted only -0.7% in the second quarter versus the -1% previously estimated. By comparison, GDP fell -6.4% in the 1st quarter of 2009 and -5.4% in the 4th quarter of 2008. This improvement was spurred by inventory replacement activity and increased Government spending. At the same time, the Eurozone saw its highest unemployment in 10 years, as prices declined, indicating continued challenges for our overseas trading partners. Japan elected a new party into power for the first time since 1955, raising questions about policy changes for the future.

The 4th quarter saw Treasury rates rise across the maturity spectrum, with 10-year maturities higher by 0.53% at quarter-end. In October, the global economy continued to build a foundation for growth as the market crisis moved further into the past, with many areas of Asia experiencing the strongest results. While the end of November brought concerns in the form of Dubai World’s refinancing challenges, within a week an announcement its debt would be restructured defused the situation and a feared global contagion never ensued. December, true to form with the rest of the year, saw continued enthusiasm for risk taking across all areas of the fixed income markets globally. At year end, the U.S. economy was showing continued positive signs as the dollar reversed its course to the upside. While the first few months of 2009 saw equity markets continue their swoon from 2008, by year-end they had turned universally positive around the globe, in many cases in spectacular fashion. The S&P 500 ended up +23.5%, with the Dow Jones World ex-U.S. up 37.0%. Commodities found strength in a global economy that seemed to have turned the corner by year-end, with oil rising +77.9% for the year. Amidst the celebration for all things risky, pity the poor Treasury investor. The sector experienced one of the worst results on record, with a -3.57% overall return for the year. Certainly, the fact there was $2.1 trillion in issuance, the highest on record, had something to do with this.

Near the beginning of the 1st quarter 2010, it was announced that U.S. gross domestic product (GDP) growth for the last quarter of 2009 had actually reached a six year high, largely because inventories continued to liquidate more slowly. Even so, risk taking in the global


U.S. Bond Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		3

capital markets softened somewhat in January, as investors began to worry about the robustness of sovereign credits in the face of continued hand-wringing over the health of the Greek economy, a lack of confidence in vacillating government policy statements, and continued questioning of just how solid the outlook for global recovery really was. By month-end, U.S. equity markets had actually turned in their worst performance in about a year, with the S&P 500 index down -3.7%, and corporate spreads widening across the board. As February dawned, at an international gathering of economic leaders in Switzerland, the International Monetary Fund (IMF) chief urged governments to continue with fiscal stimulus at the risk of heightened inflation down the road, as the world’s economy remained at risk of another downturn. February saw the markets vacillate between positive and negative sentiment with regard to risk-taking as economic statistics were similarly mixed. However, despite some slippage in the final week the S&P 500 was up 3.1% by month-end, with Treasury rates higher and corporate bond performance mixed. March saw the bulls take charge. By quarter-end, the Dow Industrials had turned in their best first quarter since 1999, based on corporate earnings continuing to come in stronger than expectations.

Risky assets recorded their best performance of the year early in the second quarter of 2010, with broad indices peaking in late April. The bond market in the US benefited from the instability in Europe and subsequent movement into dollar denominated assets. It was able to absorb near record supply of new issue investment grade debt and significant supply in government debt without any perceptible price concession. Investment grade credit spreads in fact had tightened to such a degree that the Investment Grade Index was trading at a very tight level of 87 basis points above comparable dated Treasuries. The high yield market benefited from strong retail investor flows, bidding up the price and lowering the effective yield of the index through 8.5%. Even structured finance bonds performed well, Commercial Mortgage Backed Bonds broke through the +400 spread level and reached a tighter spread in early April of +350.

By mid June, after teetering on the edge of the abyss, secondary markets in risky assets began to return to some sense of normalcy. Retail flows that had been so negative in the mid part of the quarter began to reverse themselves. The economic picture remained mixed, however, and real concerns about a double dip persisted through the end of the quarter. The employment picture in the US remains tepid at best. In reaction to European debt concerns, some governments have floated the idea of fiscal austerity programs. They are being feared by some economists as too much too soon given the frail state of the financial markets. The quarter finished with two year US Treasury notes yielding only 60 basis points, and ten year US Treasuries under 3%.

The Portfolio invests in investment-grade bonds, and uses a sampling strategy to gain benchmark exposure. The cornerstone of this strategy is stratified sampling executed under strict guidelines that


4		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

eliminate active over/underweight positions. The 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, 2010 the portfolio held 787 of the 8,191 benchmark constituents, or roughly 9.61%.

Sources: Bloomberg, SSgA Performance Group, FactSet, Barclay’s Capital, Citigroup, Wall Street Journal, Financial Times

The views expressed in this material are the views of SSgA through the period ended June 30, 2010 and are subject to change based on market and other conditions. The information provided does not constitute investment advice and it should not be relied on as such. All material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

*At a meeting on July 13, 2010, the Board of Trustees of the AARP Funds approved, in principle, the liquidation, dissolution and termination (“liquidation”) of the AARP Funds. Shareholders of the AARP Funds will receive checks for the value of the shares they hold on the date of liquidation, which is expected to be on or about October 1, 2010. Shareholders have the right to redeem shares of the AARP Funds prior to the liquidation date. The Board of Trustees of the AARP Portfolios in which some of the AARP Funds invest also approved the liquidation of the AARP Portfolios at the meeting held on July 13, 2010. Subsequently, on July 20, 2010, the Board of Trustees of the AARP Funds and of the AARP Portfolios approved a Plan of Liquidation, Dissolution and Termination (“Plan”) for the AARP Funds and the AARP Portfolios (each, a “Trust,” and together the “Trusts”). Shareholder approval of the liquidations is not required.

Effective at the close of business on July 20, 2010, the AARP Funds were closed to new shareholders, and no longer accept orders from existing shareholders to purchase additional shares (including automatic investment programs). However, exchanges into the AARP Money Market Fund will be permitted up to the liquidation date. In addition, the AARP Funds’ dividend payment schedule may be adjusted.

The Plans provide for the liquidation of the assets of the respective Trusts and the distribution to the shareholders of the respective Trusts of all of the proceeds of the liquidation. Shareholders will receive cash for their shares in the AARP Funds. While the AARP Funds (and the AARP Portfolios) will likely maintain higher cash positions to meet anticipated redemption requests, to the extent reasonably practical, the AARP Funds (and the AARP Portfolios) are expected to continue to be managed according to their investment objectives until the liquidation date. By October 1, 2010, assets of the AARP Portfolios are expected to be transitioned into cash. As a result, as of that date the AARP Portfolios (and the AARP Funds) will no longer be pursuing their investment objectives or engaging in any business activities except for the purpose of winding up their business affairs and distributing their remaining cash assets to the AARP Funds for distribution, in turn, to shareholders of the AARP Funds. Shareholders remaining in the AARP Funds prior to or on the date of liquidation may indirectly bear increased transaction fees incurred in connection with the disposition of assets by the AARP Portfolios. However, AARP is a significant investor in each of the AARP Portfolios and has committed to remain invested in the AARP Portfolios until the liquidation date. Moreover, AARP Financial Inc., the investment adviser of AARP Funds and AARP Portfolios, has committed to keep the current expense limitation agreements in place through the date of liquidation.

Prior to liquidation of each Trust, the Trust will declare and pay to its shareholders of record one or more dividends and/or other distributions so that it will have distributed all of its investment company taxable income, if any, and net realized capital gains, if any, for the current taxable year through the liquidation date. The payment date for these special dividends is September 28, 2010, based on records as of the close of business on September 24, 2010.

The liquidation will not result in income tax liability for either Trust. Distribution of cash liquidation proceeds to shareholders of the AARP Funds may result in a taxable event for shareholders depending on their individual circumstances. Shareholders should consult with their own tax advisers about any tax liability resulting from the receipt of liquidation proceeds.


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		5

U.S. Stock Market Portfolio



Portfolio composition (As a percentage of net assets)
June 30, 2010

Information technology	17.3%	Utilities	4.1%

Financials	16.3%	Materials	3.9%

Health care	11.6%	Telecommunication services	3.0%

Industrials	11.6%	Cash equivalents	1.7%

Consumer discretionary	11.4%	Other assets and liabilities, net	1.5%

Energy	9.2%	Total net assets	100.0%

Consumer staples	8.4%

See Notes to Financial Statements.



Performance *as of June 30, 2010*

Growth of $10,000 This graph illustrates the hypothetical investment of $10,000 in the U.S. Stock Market Portfolio from December 30, 2005 (inception date) through June 30, 2010, 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, 2010*	1-Year	3-Years	Since inception

	U.S. Stock Market Portfolio	15.65%	(9.34)%	(2.09)%¹

	MSCI U.S. Investable Market 2500 Index^®	15.92%	(9.17)%	(1.53)%¹

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

¹ For the period from December 30, 2005 (inception date) to June 30, 2010.

Sources: MSCI Barra., AARP Financial


6		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

LOGO

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.

U.S. Stock Market Portfolio

The fund seeks to replicate the total return of the MSCI US Investable Market 2500 Index.

For the 12 month period ended June 30, 2010 the U.S. Stock Market portfolio returned 15.65% versus the benchmark return of 15.92%. The index return reflects all items in terms of income, gain, and loss and the reinvestment of dividends and other income.*

From June 30, 2009 through June 30, 2010 all sectors experienced positive returns. The Information Technology (16.52%), Financials (18.71%), and Consumer Discretionary (29.91%) sectors had the most influence on index performance. Within the Information Technology sector, Apple Inc. (76.60%), International Business Machines Corp. (20.50%) and Cisco Systems Inc. (14.26%), had the largest impact. The Financials sector was influenced by JPMorgan Chase & Co. (7.86%), American Express Co. (74.01%), and Bank of America Corp. (9.14%). Many companies impacted the performance of the Consumer Discretionary sector however, Walt Disney Co. (36.53%), Ford Motor Co. (66.06%) and McDonald’s Corp. (18.56%) were the largest. The sectors that had the least positive contribution to the return include Telecommunications Services (5.63%), Utilities (6.97%) and Energy (3.04%). Within the Telecommunication Services sector AT&T Inc. (3.83%), American Tower Corp. (41.14%), and Crown Castle International Corp. (55.12%) were the largest contributors. Within the Utilities sector, Dominion Resources Inc. (Virginia) (21.67%), Duke Energy Corp. (16.38%) and Southern Co. (12.73%) were the largest contributors. The top three contributors to the Energy sector include Occidental Petroleum Corp. (19.29%), ConocoPhillips (21.71%) and Chevron Corp. (6.35%).

Individually, the largest positive contributor was Apple (76.60%) which contributed 0.80% to the fund’s performance. The largest negative contribution was from Exxon Mobil Corp. (-16.28%) which impacted performance by -0.41%.

Sources: Bloomberg, SSgA Performance Group, FactSet, Barclay’s Capital, Citigroup, Wall Street Journal, Financial Times


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		7


8		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

International Stock Market Portfolio



Portfolio composition (As a percentage of net assets)
June 30, 2010

Financials	16.3%	Telecommunication services	3.7%

Industrials	8.1%	Information technology	3.6%

Consumer discretionary	7.5%	Utilities	3.1%

Materials	6.9%	Exchange-traded funds	30.6%

Consumer staples	6.5%	Cash equivalents	1.0%

Health care	5.9%	Other assets and liabilities, net	1.5%

Energy	5.3%	Total net assets	100.0%

See Notes to Financial Statements.



Performance *as of June 30, 2010*

Growth of $10,000 This graph illustrates the hypothetical investment of $10,000 in the International Stock Market Portfolio from December 30, 2005 (inception date) through June 30, 2010, compared to the MSCI ACWI Ex U.S. Index.

		This hypothetical example does not represent the returns of any particular investment.



Performance summary	Average Annual Returns *as of June 30, 2010*	1-Year	3-Years	Since inception

	International Stock Market Portfolio	8.99%	(11.46)%	(1.20)%¹

	MSCI ACWI Ex US Index	10.43%	(10.70)%	0.28%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 Fund 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.aarpfinancial.com or call (800) 958-6457.

¹ For the period from December 30, 2005 (inception date) to June 30, 2010.

Sources: MSCI Barra., AARP Financial


International Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		9

International Stock Market Portfolio

The fund seeks to replicate the total return of the MSCI ACWI ex-US Index.

For the 12 month period ended June 30, 2010 the International Stock Market portfolio returned 8.99% versus the benchmark return of 10.43%. The index return reflects all items in terms of income, gain, and loss and the reinvestment of dividends and other income.*

From June 30, 2009 through June 30, 2010 almost all sectors experienced positive returns with the exception of two sectors. The Consumer Staples (18.72%), Industrials (14.58%), and Materials (13.28%) sectors had the most influence on index performance. Within the Consumer Staples sector, Nestle S.A. (32.67%), British American Tobacco PLC (21.52%) and Anheuser-Busch InBev (35.90%), had the largest impact. The Industrials sector was influenced by Siemens AG (34.63%), Koninklijke Philips Electronics (69.27%), and Schneider Electric S.A. (37.94%). Many companies impacted the performance of the Materials sector however, BASF SE (44.43%), BHP Billiton Ltd. (16.10%) and BHP Billiton PLC (20.29%) were the largest. The two sectors that detracted from return include Energy (-9.16%) and Utilities (-4.24%). Within the Energy sector Royal Dutch Shell PLC (CLA) (8.07%), Cairn Energy PLC (60.94%), and Tenaris S.A. (31.23%) were the largest contributors. Within the Utilities sector, Centrica PLC (26.35%), Hong Kong & China Gas Co. Ltd. (32.25%) and Tokyo Electric Power Co. Inc. (8.68%) were the largest contributors. The top three contributors to the Information Technology sector include SAP AG (13.27%), Canon Inc. (18.33%) and Ericsson Sh B (17.71%).

Individually, the largest positive contributor was Nestle S.A. (32.67%) which contributed 0.45% to the fund’s performance. The largest negative contribution was from BP PLC (-36.50%) which impacted performance by -0.54%.

Sources: Bloomberg, SSgA Performance Group, FactSet, Barclay’s Capital, Citigroup, Wall Street Journal, Financial Times

Country allocation


		Percentage of Net Assets
Japan		15.8%
United Kingdom		13.8%
France		6.2%
Australia		5.4%
Switzerland		5.3%
Germany		5.2%
Spain		2.3%
Netherlands		1.9%
Sweden		1.9%
Italy		1.8%
Hong Kong		1.4%
Singapore		1.1%
United States		1.1%
Denmark		0.7%
Finland		0.7%
Belgium		0.6%
Israel		0.6%
Norway		0.4%
Bermuda		0.3%
Ireland		0.3%
Luxembourg		0.3%
Austria		0.2%
Greece		0.2%
Portugal		0.2%
Cayman Islands		0.1%
New Zealand		0.1%
Other securities¹		30.6%
Other assets and liabilities		1.5%

Total net assets		100.0%

¹	Other securities include exchange-traded funds that invest in 22 emerging market countries as well as Canada.

LOGO

MSCI ACWI ex-U.S. Index

This index is a free float adjusted market capitalization weighted index that is designed to mirror the equity market performance of developed and emerging markets. The MSCI ACWI ex-U.S. Index^® consisted of 46 country indices comprised of 22 developed and 24 emerging market indices.


10		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

permitted up to the liquidation date. In addition, the AARP Funds’ dividend payment schedule may be adjusted.


Understanding Your Expenses		AARP PORTFOLIOS 2010 ANNUAL REPORT		11

Understanding Your Expenses

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, 2010 to June 30, 2010.

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 a 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.


12		AARP PORTFOLIOS 2010 ANNUAL REPORT		Understanding Your Expenses

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 1/1/10		Ending account value 6/30/10		Expenses paid during period¹

U.S. Bond Market Portfolio
Actual	$	1,000	$	1,052.40	$	1.27
Hypothetical	$	1,000	$	1,023.55	$	1.25
(assuming a 5% return before expenses)

U.S. Stock Market Portfolio
Actual	$	1,000	$	939.30	$	1.20
Hypothetical	$	1,000	$	1,023.55	$	1.25
(assuming a 5% return before expenses)

International Stock Market Portfolio
Actual	$	1,000	$	883.60	$	1.40
Hypothetical	$	1,000	$	1,023.31	$	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 181/365 (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%.


U.S. Bond Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		13

U.S. Bond Market Portfolio

June 30, 2010


Portfolio of investments

	Par Amount		Value


Asset-Backed Securities–0.3%
Capital One Multi-Asset
Execution Trust, 4.900%, 12/15/2017	$	25,000	$	27,125
Citibank Credit Card
Issuance Trust, 4.900%, 12/12/2016		100,000		110,745
Citibank Credit Card
Issuance Trust 2003-A10, 4.750%, 12/10/2015		15,000		16,410
Ford Credit Auto Owner
Trust, 5.240%, 7/15/2012		50,000		52,022
PSE&G Transition Funding
LLC, 6.750%, 6/15/2016		10,000		11,715
TXU Electric Delivery
Transition Bond Co. LLC, 5.290%, 5/15/2018		50,000		56,613
USAA Auto Owner Trust,
2.530%, 7/15/2015		10,000		10,289

Total Asset-Backed
Securities–(Identified Cost $256,581)				284,919


Corporate Bonds–18.1%
Consumer Discretionary–1.9%
Altria Group, Inc., 8.500%,
11/10/2013		50,000		58,411
Anheuser-Busch Cos., Inc.,
6.450%, 9/1/2037		25,000		28,040
Anheuser-Busch InBev
Worldwide, Inc., 3.000%, 10/15/2012		25,000		25,678
Anheuser-Busch InBev
Worldwide, Inc., 4.125%, 1/15/2015		50,000		52,395
CBS Corp., 7.875%,
7/30/2030		30,000		34,828
Clorox Co., 5.450%,
10/15/2012		50,000		54,414
Coca-Cola Co., 5.350%,
11/15/2017		25,000		28,634
Coca-Cola Enterprises, Inc.,
6.750%, 9/15/2028		25,000		30,747
Comcast Corp., 5.900%,
3/15/2016		50,000		56,416



Comcast Corp., 6.450%,
3/15/2037	25,000	27,122
Comcast Corp., 6.950%,
8/15/2037	50,000	57,062
Costco Wholesale Corp.,
5.500%, 3/15/2017	50,000	57,632
DaimlerChrysler North
America Holdings, 8.500%, 1/18/2031	25,000	32,023
DaimlerChrysler North America
Holdings Senior Note, 6.500%, 11/15/2013	50,000	56,005
DIRECTV Holdings LLC,
3.550%, 3/15/2015	50,000	50,386
DIRECTV Holdings LLC,
5.200%, 3/15/2020	35,000	36,547
Dr Pepper Snapple Group,
Inc., 6.120%, 5/1/2013	50,000	55,672
FedEx Corp., 7.375%,
1/15/2014	10,000	11,691
Fortune Brands, Inc.,
3.000%, 6/1/2012	50,000	50,626
Home Depot, Inc., 5.400%,
3/1/2016	50,000	55,719
Home Depot, Inc., 5.875%,
12/16/2036	50,000	51,428
Kohl’s Corp., 6.250%,
12/15/2017	25,000	29,164
Lowe’s Cos., Inc., 5.800%,
10/15/2036	25,000	27,115
News America Holdings, Inc.,
9.250%, 2/1/2013	35,000	41,237
News America, Inc. Senior
Note, 6.150%, 3/1/2037	25,000	26,160
Nordstrom, Inc., 6.750%,
6/1/2014	10,000	11,631
PepsiCo, Inc., 3.750%,
3/1/2014	50,000	53,350
PepsiCo, Inc., 4.500%,
1/15/2020	50,000	53,410
Target Corp. Note, 5.875%,
3/1/2012	50,000	53,948
Time Warner Cable, Inc.,
3.500%, 2/1/2015	25,000	25,583

Time Warner Cable, Inc.,
5.000%, 2/1/2020	35,000	35,860
Time Warner Cable, Inc.,
5.850%, 5/1/2017	50,000	54,975


14		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2010



Portfolio of investments

	Par Amount		Value


Corporate Bonds (continued)
Consumer Discretionary (continued)
Time Warner, Inc., 5.875%,
11/15/2016	$	25,000	$	28,220
Time Warner, Inc., 7.700%,
5/1/2032		50,000		60,475
United Parcel Service, Inc.,
6.200%, 1/15/2038		25,000		30,163
Vanderbilt University,
5.250%, 4/1/2019		50,000		55,798
Wal-Mart Stores, Inc.,
5.000%, 4/5/2012		100,000		107,062
Wal-Mart Stores, Inc.,
5.250%, 9/1/2035		25,000		26,424

Total Consumer Discretionary				1,632,051


Consumer Staples–0.7%
Campbell Soup Co.,
4.500%, 2/15/2019		20,000		21,824
ConAgra Foods, Inc.,
7.000%, 10/1/2028		25,000		29,488
CVS Caremark Corp.,
6.125%, 9/15/2039		50,000		53,635
CVS Caremark Corp.,
6.250%, 6/1/2027		25,000		27,349
H.J. Heinz Finance Co.,
6.000%, 3/15/2012		25,000		26,888
Hershey Co., 4.850%,
8/15/2015		25,000		27,426
Kraft Foods, Inc., 5.375%,
2/10/2020		25,000		26,839
Kraft Foods, Inc., 6.125%,
2/1/2018		25,000		28,416
Kraft Foods, Inc., 6.250%,
6/1/2012		50,000		54,524
Kraft Foods, Inc., 6.500%,
2/9/2040		25,000		28,056
Kroger Co., 5.500%,
2/1/2013		50,000		54,482
McDonald’s Corp., 6.300%,
3/1/2038		25,000		30,640
Procter & Gamble Co.,
5.550%, 3/5/2037		25,000		28,354
Ralcorp Holdings, Inc.,
6.625%, 8/15/2039		25,000		27,375



Whirlpool Corp., 8.600%,
5/1/2014	10,000	11,800
Xerox Corp., 6.350%,
5/15/2018	50,000	55,859
Yum! Brands, Inc., 6.250%,
3/15/2018	50,000	57,499

Total Consumer Staples		590,454


Energy–2.0%
Alberta Energy Co. Ltd.,
8.125%, 9/15/2030	25,000	31,376
Ameren Energy Generating
Co., 6.300%, 4/1/2020	25,000	25,492
Anadarko Petroleum Corp.,
5.950%, 9/15/2016	25,000	21,544
Apache Corp., 6.000%,
1/15/2037	25,000	27,725
Appalachian Power Co.,
5.000%, 6/1/2017	10,000	10,580
Baker Hughes, Inc.,
6.500%, 11/15/2013	25,000	28,582
Boardwalk Pipelines LLC,
5.500%, 2/1/2017	20,000	20,709
Canadian Natural Resources
Ltd., 5.700%, 5/15/2017	25,000	28,022
Cenovus Energy, Inc.,
6.750%, 11/15/2039	25,000	28,801
Cisco Systems, Inc., 4.950%,
2/15/2019	50,000	55,054
Cisco Systems, Inc., 5.500%,
1/15/2040	50,000	52,601
ConocoPhillips, 4.400%,
5/15/2013	100,000	107,798
ConocoPhillips, 6.500%,
2/1/2039	25,000	30,298
ConocoPhillips Canada
Funding Co., 5.950%, 10/15/2036	25,000	28,114
Diamond Offshore Drilling, Inc.,
5.875%, 5/1/2019	40,000	41,529
DTE Energy Co., 7.625%,
5/15/2014	25,000	29,241
Duke Energy Corp.,
3.350%, 4/1/2015	100,000	102,109
El Paso Natural Gas Co.,
5.950%, 4/15/2017	50,000	53,381
Enbridge Energy Partners LP,
5.200%, 3/15/2020	15,000	15,485


U.S. Bond Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		15


Portfolio of investments

	Par Amount		Value


Corporate Bonds (continued)
Energy (continued)
EnCana Corp., 4.750%,
10/15/2013	$	25,000	$	26,828
Enterprise Products Operating
LLC, 5.250%, 1/31/2020		50,000		51,573
Enterprise Products Operating
LP, 6.875%, 3/1/2033		10,000		10,950
EOG Resources, Inc.,
6.875%, 10/1/2018		25,000		30,434
FirstEnergy Corp., 6.450%,
11/15/2011		1,000		1,057
FirstEnergy Corp., 7.375%,
11/15/2031		20,000		21,146
FirstEnergy Solutions Corp.,
6.050%, 8/15/2021		20,000		20,440
General Electric Co., 5.000%,
2/1/2013		100,000		107,300
Halliburton Co., 7.450%,
9/15/2039		25,000		29,786
Hess Corp.,
7.300%, 8/15/2031		25,000		29,580
Kerr-McGee Corp., 6.950%,
7/1/2024		25,000		22,765
KeySpan Corp., 8.000%,
11/15/2030		25,000		32,453
Kinder Morgan Energy Partners
LP, 5.800%, 3/15/2035		50,000		47,332
Magellan Midstream Partners L,
6.550%, 7/15/2019		25,000		28,125
Marathon Oil Corp., 6.600%,
10/1/2037		25,000		27,409
Murphy Oil Corp., 6.375%,
5/1/2012		25,000		26,569
Ohio Power Co., 5.375%,
10/1/2021		15,000		16,040
Pemex Project Funding Master
Trust, 6.625%, 6/15/2035		25,000		25,839
Petro-Canada, 7.000%,
11/15/2028		25,000		28,089
Plains All American Pipeline LP,
6.650%, 1/15/2037		25,000		25,046
Praxair, Inc., 2.125%,
6/14/2013		50,000		50,873



Progress Energy, Inc.,
6.850%, 4/15/2012	50,000	54,393
Progress Energy, Inc.,
7.750%, 3/1/2031	25,000	31,748
Rowan Cos, Inc., 7.875%,
8/1/2019	15,000	16,552
San Diego Gas & Electric Co.,
6.000%, 6/1/2039	20,000	23,453
Sempra Energy, 6.500%,
6/1/2016	30,000	34,468
Spectra Energy Capital LLC,
5.900%, 9/15/2013	50,000	54,482
Talisman Energy, Inc.,
7.750%, 6/1/2019	5,000	6,149
Toledo Edison Co., 7.250%,
5/1/2020	15,000	18,206
TransCanada Pipelines Ltd.,
9.875%, 1/1/2021	25,000	35,033
Transocean, Inc., 6.000%,
3/15/2018	25,000	23,043
Valero Energy Corp.,
7.500%, 4/15/2032	25,000	26,282
XTO Energy, Inc., 6.100%,
4/1/2036	25,000	29,709
XTO Energy, Inc., 6.750%,
8/1/2037	25,000	32,320

Total Energy		1,783,913


Financials–7.5%
American Express Bank
FSB, 3.150%, 12/9/2011	25,000	25,898
American Express Co.,
7.000%, 3/19/2018	100,000	115,515
American International Group,
Inc., 5.600%, 10/18/2016	50,000	45,900
American International Group,
Inc., 6.250%, 5/1/2036	25,000	20,000
Ameritech Capital Funding,
6.550%, 1/15/2028	20,000	21,032
Asian Development Bank,
2.750%, 5/21/2014	60,000	62,277
Bank of America Corp.,
2.100%, 4/30/2012	50,000	51,226
Bank of America Corp.,
3.125%, 6/15/2012	50,000	52,241
Bank of America Corp.,
4.750%, 8/15/2013	100,000	102,754


16		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Par amount		Value


Corporate Bonds (continued)
Financials (continued)
Bank of America Corp.,
5.625%, 10/14/2016	$	50,000	$	51,880
Bank of America Corp.,
7.625%, 6/1/2019		100,000		114,740
Bank of America NA, 5.300%,
3/15/2017		50,000		50,415
Bank of America NA,
6.000%, 10/15/2036		25,000		24,118
Bank of New York Mellon
Corp., 4.300%, 5/15/2014		30,000		32,250
BB&T Corp., 3.375%,
9/25/2013		25,000		25,803
BB&T Corp., 5.250%,
11/1/2019		25,000		25,870
Bear Stearns Cos., Inc.,
5.300%, 10/30/2015		30,000		32,464
Bear Stearns Cos., Inc.,
6.950%, 8/10/2012		150,000		164,611
Berkshire Hathaway Finance
Corp., 4.000%, 4/15/2012		50,000		52,616
Berkshire Hathaway Finance
Corp., 4.850%, 1/15/2015		10,000		10,994
Berkshire Hathaway Finance
Corp., 5.750%, 1/15/2040		25,000		26,569
BlackRock, Inc.,
3.500%, 12/10/2014		25,000		25,954
Capital One Capital IV,
6.745%, 2/17/2037		25,000		21,125
Capital One Capital VI,
8.875%, 5/15/2040		40,000		41,955
Capital One Financial Corp.,
7.375%, 5/23/2014		15,000		17,167
Chubb Corp., 6.000%,
11/15/2011		10,000		10,609
Cincinnati Financial Corp.,
6.920%, 5/15/2028		10,000		10,149
Citibank NA,
1.250%, 9/22/2011		50,000		50,423
Citigroup Funding, Inc.,
1.875%, 10/22/2012		100,000		102,159



Citigroup Funding, Inc.,
2.250%, 12/10/2012	100,000	103,001
Citigroup, Inc.,
2.875%, 12/9/2011	25,000	25,786
Citigroup, Inc.,
5.500%, 2/15/2017	150,000	147,884
Citigroup, Inc.,
5.850%, 12/11/2034	50,000	47,479
Citigroup, Inc.,
6.125%, 5/15/2018	100,000	104,531
Citigroup, Inc.,
6.125%, 8/25/2036	50,000	45,585
Citigroup, Inc.,
8.125%, 7/15/2039	15,000	17,950
CNA Financial Corp.,
6.000%, 8/15/2011	25,000	25,736
Corp. Andina De Fomento,
8.125%, 6/4/2019	15,000	18,491
Credit Suisse,
3.450%, 7/2/2012	50,000	51,668
Credit Suisse USA, Inc.,
5.125%, 8/15/2015	100,000	108,977
Devon Financing Corp.
ULC, 6.875%, 9/30/2011	50,000	53,399
Discover Financial Services,
6.450%, 6/12/2017	25,000	25,265
Duke Realty LP,
6.750%, 3/15/2020	25,000	26,310
Fifth Third Bancorp,
8.250%, 3/1/2038	50,000	56,220
Financing Corp. (FICO),
9.650%, 11/2/2018	25,000	36,600
General Electric Capital
Corp., 2.625%, 12/28/2012	100,000	103,981
General Electric Capital
Corp., 2.800%, 1/8/2013	100,000	101,171
General Electric Capital
Corp., 3.000%, 12/9/2011	50,000	51,668
General Electric Capital
Corp., 5.400%, 2/15/2017	50,000	53,182
General Electric Capital
Corp., 5.625%, 5/1/2018	100,000	106,440
General Electric Capital
Corp., 5.875%, 1/14/2038	50,000	49,195
General Electric Capital
Corp., 5.875%, 2/15/2012	150,000	159,473


U.S. Bond Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		17


Portfolio of investments

	Par amount		Value


Corporate Bonds (continued)
Financials (continued)
General Electric Capital
Corp., 6.750%, 3/15/2032	$	60,000	$	64,763
General Electric Insurance
Solutions Corp., 7.000%, 2/15/2026		50,000		52,856
Goldman Sachs Group, Inc.,
1.625%, 7/15/2011		50,000		50,601
Goldman Sachs Group, Inc.,
3.250%, 6/15/2012		100,000		104,762
Goldman Sachs Group, Inc.,
3.625%, 8/1/2012		35,000		35,672
Goldman Sachs Group, Inc.,
5.125%, 1/15/2015		50,000		52,575
Goldman Sachs Group, Inc.,
5.450%, 11/1/2012		100,000		105,401
Goldman Sachs Group, Inc.,
5.950%, 1/15/2027		30,000		28,386
Goldman Sachs Group, Inc.,
6.000%, 5/1/2014		30,000		32,267
Goldman Sachs Group, Inc.,
6.125%, 2/15/2033		25,000		24,548
Goldman Sachs Group, Inc.,
6.150%, 4/1/2018		50,000		52,456
Goldman Sachs Group, Inc.,
6.345%, 2/15/2034		15,000		13,498
Goldman Sachs Group, Inc.,
6.750%, 10/1/2037		25,000		24,584
Hartford Financial Services
Group, Inc., 6.100%, 10/1/2041		25,000		21,748
Healthcare Realty Trust, Inc.,
6.500%, 1/17/2017		25,000		26,177
Hospitality Properties Trust,
7.875%, 8/15/2014		25,000		27,586
HSBC Finance Corp.,
4.750%, 7/15/2013		100,000		104,815
HSBC Finance Corp.,
5.000%, 6/30/2015		25,000		26,114
HSBC Finance Corp.,
6.375%, 11/27/2012		50,000		54,027
Inter-American Development
Bank, 4.250%, 9/10/2018		50,000		54,460



International Finance Corp.,
3.000%, 4/22/2014	105,000	110,934
Jefferies Group, Inc.,
8.500%, 7/15/2019	25,000	28,127
John Deere Capital Corp.,
5.250%, 10/1/2012	50,000	54,209
JPMorgan Chase & Co.,
3.125%, 12/1/2011	100,000	103,487
JPMorgan Chase & Co.,
6.000%, 1/15/2018	25,000	27,648
JPMorgan Chase & Co.,
6.625%, 3/15/2012	100,000	107,641
JPMorgan Chase Capital
XVIII, 6.950%, 8/17/2036	25,000	25,061
JPMorgan Chase Capital
XXVII, 7.000%, 11/1/2039	50,000	51,006
Keycorp, 6.500%,
5/14/2013	50,000	54,729
Lazard Group, 6.850%,
6/15/2017	50,000	50,704
Liberty Property LP,
6.625%, 10/1/2017	50,000	53,775
Lincoln National Corp.,
8.750%, 7/1/2019	15,000	18,414
Mack-Cali Realty Corp.,
7.750%, 8/15/2019	25,000	29,428
Markel Corp., 7.125%,
9/30/2019	50,000	54,949
Merrill Lynch & Co., Inc.,
6.150%, 4/25/2013	100,000	106,983
MetLife, Inc., 5.700%,
6/15/2035	10,000	9,812
MetLife, Inc., 6.125%,
12/1/2011	10,000	10,584
MetLife, Inc., 6.400%,
12/15/2036	25,000	22,125
MetLife, Inc., 6.750%,
6/1/2016	50,000	56,637
Morgan Stanley, 3.250%,
12/1/2011	100,000	103,647
Morgan Stanley, 5.625%,
1/9/2012	100,000	104,093
Morgan Stanley, 5.950%,
12/28/2017	100,000	101,418
Morgan Stanley, 6.000%,
5/13/2014	100,000	106,050
Northern Trust Corp.,
4.625%, 5/1/2014	15,000	16,411


18		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Par amount		Value


Corporate Bonds (continued)
Financials (continued)
PACCAR Financial Corp.,
1.950%, 12/17/2012	$	25,000	$	25,264
PNC Bank NA, 4.875%,
9/21/2017		50,000		51,222
Private Export Funding
Corp., 4.300%, 12/15/2021		25,000		26,146
ProLogis, 7.625%,
8/15/2014		25,000		26,555
Protective Life Corp.,
8.450%, 10/15/2039		25,000		26,754
Prudential Financial, Inc.,
4.500%, 7/15/2013		50,000		51,951
Prudential Financial, Inc.,
6.000%, 12/1/2017		50,000		53,528
Raymond James Financial,
Inc., 8.600%, 8/15/2019		25,000		29,492
Realty Income Corp.,
5.950%, 9/15/2016		25,000		27,225
Regions Financial Corp.,
7.750%, 11/10/2014		50,000		52,795
Shell International Finance BV,
4.000%, 3/21/2014		100,000		105,861
Simon Property Group LP,
5.100%, 6/15/2015		25,000		26,399
Simon Property Group LP,
5.650%, 2/1/2020		25,000		26,526
SLM Corp., 5.400%,
10/25/2011		25,000		24,860
Sovereign Bank, 5.125%,
3/15/2013		25,000		25,350
Toll Brothers Finance Corp.,
6.750%, 11/1/2019		25,000		24,549
Transatlantic Holdings, Inc.,
5.750%, 12/14/2015		20,000		20,543
Travelers Cos., Inc.,
5.500%, 12/1/2015		25,000		28,121
Travelers Cos., Inc.,
5.750%, 12/15/2017		25,000		27,397
US Bancorp, 4.200%,
5/15/2014		50,000		53,532
USB Capital XIII Trust,
6.625%, 12/15/2039		15,000		15,868



Wachovia Bank NA,
4.875%, 2/1/2015	50,000	52,455
Wachovia Bank NA,
6.600%, 1/15/2038	25,000	27,273
Wachovia Corp., 5.625%,
10/15/2016	50,000	54,035
Wachovia Corp., 5.700%,
8/1/2013	50,000	54,487
Wells Fargo & Co., 3.000%,
12/9/2011	25,000	25,849
Wells Fargo & Co., 5.250%,
10/23/2012	50,000	53,537
Wells Fargo & Co., 5.625%,
12/11/2017	25,000	27,372
Wells Fargo Bank NA,
5.750%, 5/16/2016	100,000	109,170
¹Western Union Co/The
5.253%, 4/1/2020	53,000	56,653
Willis North America, Inc.,
5.625%, 7/15/2015	25,000	26,474

Total Financials		6,511,117


Health Care–1.1%
Abbott Laboratories, 6.000%,
4/1/2039	50,000	57,703
Aetna, Inc., 6.625%,
6/15/2036	35,000	39,079
Aflac, Inc., 6.900%,
12/17/2039	15,000	15,642
Allstate Corp., 5.950%,
4/1/2036	25,000	25,810
AmerisourceBergen Corp.,
5.875%, 9/15/2015	10,000	11,200
Amgen, Inc., 5.850%,
6/1/2017	25,000	29,021
Amgen, Inc., 6.375%,
6/1/2037	25,000	29,492
Baxter International, Inc.,
4.625%, 3/15/2015	10,000	11,030
Baxter International, Inc.,
5.900%, 9/1/2016	50,000	58,742
Bristol-Myers Squibb Co.,
5.875%, 11/15/2036	25,000	27,966
Eli Lilly & Co., 5.200%,
3/15/2017	50,000	56,984
Hospira, Inc., 6.400%,
5/15/2015	5,000	5,687


U.S. Bond Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		19


Portfolio of investments

	Par amount		Value


Corporate Bonds (continued)
Health Care (continued)
Johnson & Johnson,
4.950%, 5/15/2033	$	10,000	$	10,455
Life Technologies Corp.,
3.375%, 3/1/2013		25,000		25,570
McKesson Corp.,
7.500%, 2/15/2019		50,000		62,120
Medtronic, Inc., 5.550%,
3/15/2040		25,000		28,013
Merck & Co., Inc.,
5.000%, 6/30/2019		100,000		111,436
Pfizer, Inc., 5.350%,
3/15/2015		100,000		113,416
Schering-Plough Corp.,
6.000%, 9/15/2017		25,000		29,415
Teva Pharmaceutical
Finance LLC, 5.550%, 2/1/2016		10,000		11,409
Teva Pharmaceutical
Finance LLC, 6.150%, 2/1/2036		10,000		11,651
UnitedHealth Group, Inc.,
6.000%, 2/15/2018		50,000		55,837
Watson Pharmaceuticals,
Inc., 5.000%, 8/15/2014		20,000		21,443
WellPoint, Inc., 6.375%,
1/15/2012		50,000		53,490
Wyeth, 5.500%, 2/15/2016		25,000		28,691

Wyeth, 7.250%, 3/1/2023		25,000		30,986


Total Health Care				962,288


Industrials–1.6%
ACE INA Holdings, Inc.,
5.900%, 6/15/2019		15,000		16,482
Air Products & Chemicals,
Inc., 4.375%, 8/21/2019		25,000		26,148
Altria Group, Inc.,
9.250%, 8/6/2019		100,000		125,013
Bemis Co., Inc., 5.650%,
8/1/2014		5,000		5,511
Boeing Capital Corp. Ltd.,
6.500%, 2/15/2012		50,000		54,321
Boston Properties LP,
5.875%, 10/15/2019		25,000		26,795




Burlington Northern Santa Fe
Corp., 5.900%, 7/1/2012	50,000	54,181
Cabot Corp., 5.000%,
10/1/2016	25,000	26,569
Canadian Pacific Railway
Co., 5.950%, 5/15/2037	25,000	26,717
Caterpillar Financial
Services Corp., 4.250%, 2/8/2013	50,000	53,370
Caterpillar Financial
Services Corp., 5.125%, 10/12/2011	50,000	52,508
Caterpillar, Inc., 6.625%,
7/15/2028	10,000	11,935
Cooper US, Inc., 6.100%,
7/1/2017	25,000	28,636
CRH America, Inc.,
5.625%, 9/30/2011	25,000	25,958
CSX Corp., 6.250%,
3/15/2018	25,000	28,749
Deere & Co., 4.375%,
10/16/2019	25,000	26,688
Deere & Co., 5.375%,
10/16/2029	25,000	27,407
Dover Corp., 5.450%,
3/15/2018	25,000	28,302
Emerson Electric Co.,
5.375%, 10/15/2017	25,000	28,480
Honeywell International, Inc.,
5.300%, 3/1/2018	50,000	57,187
Honeywell International, Inc.,
5.700%, 3/15/2036	25,000	28,360
International Business
Machines Corp., 2.100%, 5/6/2013	50,000	50,988
International Business
Machines Corp., 6.500%, 1/15/2028	50,000	60,766
International Paper Co.,
7.500%, 8/15/2021	40,000	46,927
Lockheed Martin Corp.,
4.121%, 3/14/2013	25,000	26,787
Lockheed Martin Corp.,
7.750%, 5/1/2026	25,000	32,890
Norfolk Southern Corp.,
7.700%, 5/15/2017	10,000	12,453
Norfolk Southern Corp.,
7.800%, 5/15/2027	15,000	19,357


20		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Par amount		Value


Corporate Bonds (continued)

Industrials (continued)
Northrop Grumman Corp.,
7.750%, 2/15/2031	$	15,000	$	20,175
Philip Morris International,
Inc., 5.650%, 5/16/2018		50,000		54,784
Pitney Bowes, Inc.,
5.750%, 9/15/2017		25,000		28,117
Potash Corp. of
Saskatchewan, Inc., 5.250%, 5/15/2014		25,000		27,600
Procter & Gamble Co.,
4.700%, 2/15/2019		50,000		54,887
Raytheon Co., 4.400%,
2/15/2020		25,000		26,874
RR Donnelley & Sons Co.,
8.600%, 8/15/2016		25,000		27,421
Southwest Airlines Co.,
5.250%, 10/1/2014		50,000		52,679
Tyco International Finance
SA, 4.125%, 10/15/2014		25,000		26,564
Tyco International Group
SA, 6.000%, 11/15/2013		25,000		28,004
Union Pacific Corp.,
6.125%, 2/15/2020		25,000		29,061
Waste Management, Inc.,
6.375%, 11/15/2012		25,000		27,407

Total Industrials				1,413,058


Information Technology–0.5%
Arrow Electronics, Inc.,
6.000%, 4/1/2020		25,000		25,882
Electronic Data Systems
Corp., 6.000%, 8/1/2013		25,000		28,209
General Dynamics Corp.,
1.800%, 7/15/2011		15,000		15,105
Hewlett-Packard Co.,
5.250%, 3/1/2012		25,000		26,762
Microsoft Corp., 2.950%,
6/1/2014		75,000		78,550
Oracle Corp., 6.500%,
4/15/2038		25,000		30,444
Oracle Corp. and Ozark
Holding, Inc., 5.250%, 1/15/2016		50,000		56,805



Rockwell Collins, Inc.,
5.250%, 7/15/2019	50,000	55,193
Science Applications
International Corp., 6.250%, 7/1/2012	20,000	21,875
United Technologies Corp.,
4.500%, 4/15/2020	30,000	32,522
United Technologies Corp.,
6.050%, 6/1/2036	25,000	28,612
Xerox Corp., 5.500%,
5/15/2012	50,000	53,321

Total Information Technology		453,280


Materials–0.5%
Alcoa, Inc., 5.900%,
2/1/2027	25,000	22,048
Continental Airlines, Inc.,
9.000%, 7/8/2016	47,979	51,577
Dow Chemical Co.,
6.000%, 10/1/2012	50,000	53,791
Dow Chemical Co.,
8.550%, 5/15/2019	50,000	61,305
EI du Pont de Nemours &
Co., 4.625%, 1/15/2020	25,000	26,935
EI Du Pont de Nemours &
Co., 4.750%, 3/15/2015	25,000	27,632
EI Du Pont de Nemours &
Co., 5.600%, 12/15/2036	25,000	27,440
Falconbridge Ltd., 5.500%,
6/15/2017	25,000	26,618
StatoilHydro ASA, 5.250%,
4/15/2019	20,000	21,976
Vale Overseas Ltd.,
6.875%, 11/21/2036	50,000	52,251
Valspar Corp., 7.250%,
6/15/2019	25,000	29,761

Total Materials		401,334


Telecommunication Services–1.0%
AT&T Wireless Services,
Inc., 8.125%, 5/1/2012	50,000	55,974
AT&T, Inc., 4.950%,
1/15/2013	100,000	108,613
AT&T, Inc., 6.150%,
9/15/2034	25,000	26,332
AT&T, Inc., 6.400%,
5/15/2038	50,000	55,159
AT&T, Inc., 6.800%,
5/15/2036	25,000	28,773


U.S. Bond Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		21


Portfolio of investments

	Par amount		Value


Corporate Bonds (continued)

Telecommunication Services (continued)
BellSouth Capital Funding
Corp., 7.875%, 2/15/2030	$	25,000	$	30,727
BellSouth Corp., 5.200%,
9/15/2014		30,000		33,368
BellSouth Corp., 6.000%,
11/15/2034		10,000		10,366
Embarq Corp., 7.082%,
6/1/2016		50,000		53,367
Motorola, Inc., 6.000%,
11/15/2017		25,000		26,875
¹NBC Universal, Inc., 3.650%,
4/30/2015		50,000		51,186
Quest Diagnostics, Inc.,
5.750%, 1/30/2040		10,000		9,880
Qwest Corp., 8.375%,
5/1/2016		30,000		32,925
Telecom Italia Capital SA,
6.175%, 6/18/2014		100,000		104,635
Time Warner, Inc., 6.200%,
3/15/2040		25,000		26,461
Verizon Communications, Inc.,
5.500%, 2/15/2018		50,000		54,951
Verizon Communications, Inc.,
5.550%, 2/15/2016		50,000		56,069
Verizon Global Funding Corp.,
5.850%, 9/15/2035		10,000		10,349
Verizon Global Funding Corp.,
7.750%, 12/1/2030		25,000		31,242
Verizon New England, Inc.,
6.500%, 9/15/2011		30,000		31,692
Vodafone Group PLC,
4.150%, 6/10/2014		50,000		52,512

Total Telecommunication Services				891,456


Utilities–1.3%
Arizona Public Service Co.,
6.500%, 3/1/2012		10,000		10,728
Atlantic City Electric Co.,
7.750%, 11/15/2018		15,000		18,928
Carolina Power & Light Co.,
5.125%, 9/15/2013		10,000		11,022
CenterPoint Energy Resources
Corp., 6.000%, 5/15/2018		25,000		27,583



Cincinnati Gas & Electric,
5.700%, 9/15/2012	50,000	54,119
Columbus Southern Power
Co., 6.600%, 3/1/2033	25,000	28,823
Commonwealth Edison Co.,
5.900%, 3/15/2036	25,000	27,317
Commonwealth Edison Co.,
6.150%, 9/15/2017	50,000	57,473
Consolidated Edison Co. of
New York, 4.875%, 2/1/2013	50,000	54,220
Consolidated Edison Co. of
New York, Inc., 6.300%, 8/15/2037	25,000	28,855
Dominion Resources, Inc.,
5.150%, 7/15/2015	15,000	16,627
Dominion Resources, Inc.,
6.000%, 11/30/2017	50,000	57,112
Entergy Gulf States La 10/24
Fixed 5.59, 5.590%, 10/1/2024	15,000	16,406
Exelon Corp., 5.625%,
6/15/2035	15,000	14,580
Florida Power & Light Co.,
4.950%, 6/1/2035	25,000	25,038
Florida Power & Light Co.,
5.690%, 3/1/2040	35,000	38,950
Georgia Power Co., 4.250%,
12/1/2019	40,000	41,966
Interstate Power & Light Co.,
6.250%, 7/15/2039	15,000	17,373
MidAmerican Energy Co.,
6.750%, 12/30/2031	10,000	12,007
MidAmerican Funding LLC,
6.927%, 3/1/2029	25,000	29,575
National Rural Utilities
Cooperative Finance Corp., 7.250%, 3/1/2012	100,000	109,702
Nisource Finance Corp.,
6.400%, 3/15/2018	25,000	27,551
NSTAR, 4.500%,
11/15/2019	25,000	26,614

Oneok, Inc., 5.200%,
6/15/2015	25,000	26,195
Pacific Gas & Electric Co.,
5.400%, 1/15/2040	25,000	25,985
Pacific Gas & Electric Co.,
6.050%, 3/1/2034	15,000	16,791
PPL Electric Utilities Corp.,
6.250%, 5/15/2039	10,000	11,746


22		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Par amount		Value


Corporate Bonds (continued)
Utilities (continued)
Public Service Co. of Colorado,
6.250%, 9/1/2037	$	10,000	$	11,864
Public Service Electric &
Gas Co., 5.800%, 5/1/2037		25,000		28,381
Puget Sound Energy, Inc.,
6.274%, 3/15/2037		25,000		27,543
Southern California Edison
Co., 5.500%, 3/15/2040		100,000		109,511
TXU Electric Delivery Co.,
7.000%, 5/1/2032		25,000		29,413
Virginia Electric and Power
Co., 5.400%, 1/15/2016		50,000		55,879
Wisconsin Electric Power
Co., 4.250%, 12/15/2019		25,000		26,030

Total Utilities				1,121,907

Total Corporate Bonds–
(Identified Cost $14,769,194)				15,760,858


International Debt–5.1%
Alcan, Inc.,
5.200%, 1/15/2014		50,000		53,707
America Movil SA de CV,
5.750%, 1/15/2015		15,000		16,740
America Movil SAB de CV,
5.625%, 11/15/2017		50,000		54,906
ArcelorMittal,
6.125%, 6/1/2018		50,000		52,376
ArcelorMittal,
9.850%, 6/1/2019		100,000		125,160
Asian Development Bank,
5.593%, 7/16/2018		50,000		58,001
AstraZeneca PLC,
6.450%, 9/15/2037		25,000		30,402
Bank of Nova Scotia,
3.400%, 1/22/2015		50,000		51,682
Barclays Bank PLC,
5.000%, 9/22/2016		100,000		102,711
Barrick Australia Financ
10/39 Fixed 5.95, 5.950%, 10/15/2039		25,000		26,736
BHP Billiton Finance Ltd.,
5.125%, 3/29/2012		25,000		26,631



BP Capital Markets PLC,
3.875%, 3/10/2015	50,000	42,652
Brazilian Government
International Bond, 6.000%, 1/17/2017	100,000	110,500
Brazilian Government
International Bond, 8.250%, 1/20/2034	50,000	66,250
Brazilian Government International
Bond, 8.750%, 2/4/2025	50,000	67,625
British Telecommunications
PLC, 9.875%, 12/15/2030	25,000	30,585
Canadian National Railway
Co., 6.200%, 6/1/2036	25,000	29,537
Credit Suisse AG,
5.400%, 1/14/2020	50,000	49,805
Deutsche Bank AG,
5.375%, 10/12/2012	100,000	107,218
Deutsche Telekom
International Finance BV, 8.750%, 6/15/2030	25,000	32,378
Diageo Finance BV,
3.250%, 1/15/2015	25,000	25,741
Diageo Finance BV,
5.300%, 10/28/2015	50,000	56,023
Eksportfinans ASA,
5.000%, 2/14/2012	100,000	106,113
European Investment Bank,
3.250%, 10/14/2011	100,000	103,371
European Investment Bank,
4.625%, 5/15/2014	200,000	219,920
European Investment Bank,
4.875%, 2/16/2016	50,000	55,930
Export-Import Bank of
Korea, 5.875%, 1/14/2015	100,000	108,568
HSBC Holdings PLC,
6.500%, 5/2/2036	25,000	26,012
International Bank for
Reconstruction & Development, 7.625%, 1/19/2023	25,000	35,001
International Finance
Corp., 3.500%, 5/15/2013	100,000	106,676
Israel Government AID
Bond, 5.500%, 4/26/2024	25,000	29,449
Israel Government
International Bond, 5.125%, 3/26/2019	75,000	81,053
Israel Government
International Bond, 5.500%, 11/9/2016	25,000	28,326


U.S. Bond Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		23


Portfolio of investments

	Par amount		Value


International Debt (continued)
Italy Government
International Bond, 4.500%, 1/21/2015	$	100,000	$	100,939
Italy Government
International Bond, 5.625%, 6/15/2012		100,000		105,115
Italy, Republic of,,
6.875%, 9/27/2023		25,000		28,507
KfW Bankengruppe,
3.250%, 3/15/2013		100,000		104,752
KfW Bankengruppe,
4.875%, 1/17/2017		100,000		111,817
Koninklijke Philips
Electronics NV, 6.875%, 3/11/2038		50,000		61,878
Kreditanstalt fuer
Wiederaufbau, 0.00%, 4/18/2036		50,000		15,521
Kreditanstalt fuer
Wiederaufbau, 2.250%, 4/16/2012		100,000		102,079
Kreditanstalt fuer
Wiederaufbau, 2.625%, 3/3/2015		50,000		50,846
Kreditanstalt fuer
Wiederaufbau, 4.875%, 6/17/2019		50,000		55,778
Landwirtschaftliche
Rentenbank, 3.125%, 7/15/2015		100,000		103,412
Mexico Government
International Bond, 6.625%, 3/3/2015		25,000		28,725
Mexico Government
International Bond, 6.750%, 9/27/2034		20,000		23,150
Mexico Government
International Bond, 8.125%, 12/30/2019		50,000		64,250
Mexico Government
International Bond, 8.300%, 8/15/2031		50,000		67,750
Nexen, Inc., 5.875%,
3/10/2035		25,000		24,538
Nomura Holdings, Inc.,
5.000%, 3/4/2015		35,000		37,022



Nomura Holdings, Inc.,
6.700%, 3/4/2020	26,000	27,556
Nordic Investment Bank,
2.625%, 10/6/2014	50,000	51,446
Novartis Securities
Investment Ltd., 5.125%, 2/10/2019	50,000	56,071
Oesterreichische
Kontrollbank AG, 4.875%, 2/16/2016	100,000	111,087
Ontario Province of
Canada, 4.000%, 10/17/2019, 4.000%, 10/7/2019	25,000	25,864
Panama Government
International Bond, 5.200%, 1/30/2020	25,000	26,125
Panama Government
International Bond, 6.700%, 1/26/2036	25,000	27,688
Petrobras International
Finance Co., 5.750%, 1/20/2020	50,000	50,602
Petrobras International
Finance Co., 6.875%, 1/20/2040	25,000	25,330
Petroleos Mexicanos,
8.000%, 5/3/2019	50,000	59,750
Poland Government
International Bond, 5.250%, 1/15/2014	50,000	53,683
Potash Corp. of
Saskatchewan, Inc., 3.750%, 9/30/2015	10,000	10,424
Potash Corp. of
Saskatchewan, Inc., 4.875%, 3/30/2020	10,000	10,659
Province of British
Columbia Canada, 6.500%, 1/15/2026	25,000	31,877
Province of Nova Scotia
Canada, 5.125%, 1/26/2017	50,000	57,056
Province of Ontario
Canada, 5.000%, 10/18/2011	100,000	105,475
Province of Quebec
Canada, 4.600%, 5/26/2015	50,000	55,263
Region of Lombardy Italy,
5.804%, 10/25/2032	50,000	50,088
Republic of Korea,
4.875%, 9/22/2014	25,000	26,641


24		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Par amount		Value


International Debt (continued)
Republic of Peru, 6.550%,
3/14/2037	$	25,000	$	27,750
Telecom Italia Capital SA,
6.375%, 11/15/2033		50,000		44,902
Telefonica Emisiones SAU,
6.221%, 7/3/2017		25,000		27,231
Telefonica Emisiones SAU,
7.045%, 6/20/2036		50,000		55,492
Thomson Corp. Note,
5.700%, 10/1/2014		50,000		55,815
TransAlta Corp., 4.750%,
1/15/2015		25,000		26,350
Vodafone Group PLC,
6.150%, 2/27/2037		25,000		26,007
Vodafone Group PLC,
7.875%, 2/15/2030		25,000		30,231
Weatherford International
Ltd., 5.500%, 2/15/2016		25,000		26,686

Total International Debt–
(Identified Cost $4,130,442)				4,387,013


Mortgage-Backed Securities–34.4%
Federal Home Loan
Mortgage Corporation, GOLD 15 YR, 4.000%		100,000		103,828
Federal National Mortgage
Association, 30 YR, 5.000%		250,000		264,531
Government National
Mortgage Association, 30 YR, 5.500%		100,000		108,047
Federal Home Loan
Mortgage Corp., 4.000%–7.000%, 5/1/2020–2/1/2040		9,251,762		9,822,776
Federal National Mortgage
Association, 4.000%–7.000%, 6/1/2019–12/1/2099		13,610,111		14,495,083
Government National
Mortgage Association, 4.000%–6.500%, 2/15/2036–5/15/2040		4,828,744		5,152,135

Total Mortgage-Backed Securities–
(Identified Cost $28,348,402)				29,946,400




U.S. Treasury–32.2%
U.S. Treasury Bonds–3.7%
3.625%, 2/15/2020	300,000	317,016

4.375%, 5/15/2040	120,000	129,806

4.750%, 2/15/2037	200,000	229,656

6.125%, 8/15/2029	125,000	166,074

6.125%, 11/15/2027	50,000	65,820

6.375%, 8/15/2027	200,000	269,469

6.750%, 8/15/2026	100,000	138,844

7.125%, 2/15/2023	100,000	138,469

7.250%, 5/15/2016	100,000	128,469

7.500%, 11/15/2016	250,000	327,617

8.000%, 11/15/2021	350,000	509,086

8.500%, 2/15/2020	280,000	410,769

8.875%, 8/15/2017	150,000	213,679

9.250%, 2/15/2016	135,000	187,091

Total		3,231,865






U.S. Treasury Notes–28.5%
0.750%, 11/30/2011	400,000	401,562

0.750%, 5/31/2012	400,000	401,219

0.875%, 1/31/2012	300,000	301,641

0.875%, 2/29/2012	200,000	201,101

1.000%, 8/31/2011	200,000	201,328

1.000%, 10/31/2011	200,000	201,430

1.000%, 9/30/2011	400,000	402,812

1.000%, 12/31/2011	100,000	100,746

1.000%, 3/31/2012	300,000	302,321

1.000%, 4/30/2012	400,000	403,062

1.125%, 12/15/2011	300,000	302,906

1.125%, 1/15/2012	200,000	201,930

1.125%, 12/15/2012	200,000	201,672

1.375%, 5/15/2012	200,000	202,969

1.375%, 9/15/2012	200,000	203,078

1.375%, 2/15/2012	300,000	304,148

1.375%, 10/15/2012	200,000	203,000

1.375%, 11/15/2012	300,000	304,336

1.375%, 1/15/2013	300,000	304,078

1.375%, 2/15/2013	200,000	202,656

1.375%, 3/15/2013	200,000	202,625


U.S. Bond Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		25


Portfolio of investments

	Par Amount		Value


U.S. Treasury (continued)
U.S. Treasury Notes (continued)

1.375%, 5/15/2013	$	200,000	$	202,469

1.500%, 12/31/2013		200,000		201,719

1.750%, 3/31/2014		200,000		202,797

1.750%, 11/15/2011		200,000		203,570

1.750%, 8/15/2012		400,000		409,344

1.750%, 1/31/2014		200,000		203,250

1.750%, 4/15/2013		500,000		511,443

1.875%, 2/28/2014		500,000		509,610

1.875%, 4/30/2014		100,000		101,820

1.875%, 6/15/2012		200,000		204,969

2.000%, 11/30/2013		300,000		308,016

2.125%, 5/31/2015		300,000		305,204

2.250%, 1/31/2015		300,000		307,523

2.375%, 3/31/2016		200,000		202,984

2.375%, 9/30/2014		400,000		413,219

2.375%, 10/31/2014		400,000		412,750

2.375%, 2/28/2015		100,000		103,079

2.625%, 4/30/2016		100,000		102,766

2.625%, 6/30/2014		300,000		313,664

2.625%, 7/31/2014		300,000		313,523

2.625%, 2/29/2016		600,000		617,391

2.750%, 10/31/2013		400,000		421,031

2.750%, 2/15/2019		300,000		298,922

2.750%, 11/30/2016		200,000		205,078

2.750%, 5/31/2017		200,000		204,250

3.000%, 8/31/2016		200,000		208,750

3.000%, 9/30/2016		250,000		260,723

3.125%, 4/30/2013		350,000		372,148

3.125%, 5/15/2019		300,000		306,305

3.125%, 10/31/2016		600,000		629,485

3.125%, 9/30/2013		200,000		212,969

3.125%, 1/31/2017		300,000		313,805

3.250%, 5/31/2016		150,000		159,352

3.250%, 12/31/2016		100,000		105,422

3.250%, 6/30/2016		100,000		106,070




3.375%, 6/30/2013	350,000	375,129

3.375%, 11/15/2019	300,000	310,758

3.500%, 2/15/2039	75,000	69,680

3.500%, 5/15/2020	200,000	209,343

3.625%, 12/31/2012	250,000	268,145

3.625%, 8/15/2019	500,000	528,789

3.750%, 11/15/2018	500,000	538,828

3.875%, 5/15/2018	350,000	382,594

4.000%, 2/15/2015	150,000	165,574

4.000%, 8/15/2018	300,000	330,023

4.000%, 2/15/2014	200,000	219,328

4.125%, 8/31/2012	200,000	215,109

4.125%, 5/15/2015	200,000	222,234

4.250%, 11/15/2017	300,000	337,055

4.250%, 5/15/2039	410,000	433,575

4.250%, 8/15/2015	200,000	223,672

4.250%, 8/15/2013	200,000	219,797

4.375%, 2/15/2038	300,000	324,422

4.500%, 3/31/2012	400,000	427,985

4.500%, 4/30/2012	550,000	589,897

4.500%, 11/30/2011	100,000	105,750

4.500%, 8/15/2039	250,000	275,391

4.625%, 12/31/2011	100,000	106,250

4.625%, 2/15/2017	200,000	228,516

4.625%, 2/15/2040	225,000	252,949

4.750%, 8/15/2017	300,000	346,898

4.750%, 5/15/2014	200,000	225,656

4.875%, 8/15/2016	100,000	115,766

4.875%, 2/15/2012	200,000	214,297

5.000%, 5/15/2037	150,000	178,805

5.125%, 5/15/2016	150,000	175,067

5.375%, 2/15/2031	150,000	184,570

5.500%, 8/15/2028	50,000	61,820

6.625%, 2/15/2027	75,000	103,254

7.625%, 11/15/2022	100,000	143,578

11.250%, 2/15/2015	100,000	142,758

Total		24,759,302

Total U.S. Treasury–
(Identified Cost $26,931,048)		27,991,167


26		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Par Amount		Value



U.S. Government Agencies–6.6%
Federal Farm Credit Bank,
1.750%–5.375%, 7/18/2011–1/17/2017	$	525,000	$	560,796
Federal Home Loan Bank,
1.625%–5.625%, 7/27/2011–7/15/2036		525,000		567,114
Federal Home Loan Banks,
1.625%–2.250%, 4/13/2012–3/20/2013		650,000		663,006
Federal Home Loan Mortgage
Corp., 1.125%–6.750%, 1/19/2012–7/15/2032		1,580,000		1,666,367
Federal National Mortgage
Association, 1.000%–5.800%, 9/28/2011–7/15/2037		2,030,000		2,099,274
Tennessee Valley Authority,
4.750%–6.750%, 8/1/2013–9/15/2039		150,000		174,958

Total U.S. Government
Agencies–(Identified Cost $5,535,292)				5,731,515


Commercial Mortgage-Backed Securities–3.2%
Banc of America
Commercial Mortgage, Inc., 5.118%, 7/11/2043		60,000		62,534
Banc of America
Commercial Mortgage, Inc., 5.356%, 10/10/2045		100,000		100,302
Banc of America
Commercial Mortgage, Inc., 5.397%, 10/10/2045		20,000		19,845
Banc of America
Commercial Mortgage, Inc., 5.837%, 6/10/2049		125,000		121,075
Bear Stearns Commercial
Mortgage Securities, 4.740%, 3/13/2040		40,000		42,159
Bear Stearns Commercial
Mortgage Securities, 4.750%, 2/13/2046		50,000		51,356
Bear Stearns Commercial
Mortgage Securities, 5.405%, 12/11/2040		50,000		52,632



Citigroup Commercial
Mortgage Trust, 5.920%, 3/15/2049	25,000	9,991
Citigroup/Deutsche Bank
Commercial Mortgage Trust, 5.397%, 7/15/2044	50,000	48,040
Commercial Mortgage Pass
Through Certificates, 5.347%, 12/10/2046	50,000	41,536
Commercial Mortgage Pass
Through Certificates, 5.899%, 6/10/2046	50,000	51,658
Credit Suisse Mortgage
Capital Certificates, 6.019%, 6/15/2038	100,000	105,915
CS First Boston Mortgage
Securities Corp., 4.429%, 12/15/2036	88,485	90,646
CS First Boston Mortgage
Securities Corp., 4.730%, 7/15/2037	20,000	18,534
CS First Boston Mortgage
Securities Corp., 5.230%, 12/15/2040	50,000	53,008
CS First Boston Mortgage
Securities Corp., 5.416%, 5/15/2036	35,000	36,890
CS First Boston Mortgage
Securities Corp., 6.387%, 8/15/2036	21,970	23,042
CW Capital Cobalt Ltd.,
5.484%, 4/15/2047	25,000	23,769
G.E. Capital Commercial
Mortgage Corp., 5.189%, 7/10/2039	150,000	158,911
Greenwich Capital Commercial
Funding Corp., 4.799%, 8/10/2042	50,000	51,989
Greenwich Capital Commercial
Funding Corp., 5.736%, 12/10/2049	125,000	123,227
GS Mortgage Securities
Corp. II, 4.761%, 7/10/2039	15,000	15,257
GS Mortgage Securities
Corp. II, 5.396%, 8/10/2038	100,000	105,600
JPMorgan Chase Commercial
Mortgage Securities Corp., Series 2003-CB7, Class A4, 4.879%, 1/12/2038	20,000	21,080


U.S. Bond Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		27


Portfolio of investments

	Par amount		Value


Commercial Mortgage-Backed Securities (continued)
JPMorgan Chase Commercial
Mortgage Securities Corp., Series 2005-LDP3 Class A4A, 4.936%, 8/15/2042	$	50,000	$	52,600
JPMorgan Chase Commercial
Mortgage Securities Corp., Series 2005-LDP3, Class A3, 4.959%, 8/15/2042		35,000		35,952
JPMorgan Chase Commercial
Mortgage Securities Corp., Series 2005-LDP4, Class A4, 5.038%, 3/15/2046		20,000		21,131
JPMorgan Chase Commercial
Mortgage Securities Corp., Series 2005-LDP4, Class AM, 4.999%, 10/15/2042		15,000		14,108
JPMorgan Chase Commercial
Mortgage Securities Corp., Series 2006-CB15, Class A3, 5.819%, 6/12/2043		100,000		104,917
JPMorgan Chase Commercial
Mortgage Securities Corp., Series 2006-LDP6, Class A4, 5.475%, 4/15/2043		100,000		106,331
JPMorgan Chase Commercial
Mortgage Securities Corp., Series 2007-CB18, Class A4, 5.440%, 6/12/2047		50,000		50,036
LB-UBS Commercial
Mortgage Trust, 4.361%, 1/15/2029		50,000		49,297
LB-UBS Commercial
Mortgage Trust, 5.139%, 2/15/2031		20,000		21,252
LB-UBS Commercial
Mortgage Trust, 5.207%, 2/15/2031		20,000		20,685
LB-UBS Commercial
Mortgage Trust, 5.430%, 2/15/2040		100,000		100,501
Merrill Lynch, 5.378%,
8/12/2048		150,000		138,599
Merrill Lynch Mortgage
Trust, 5.405%, 11/12/2037		50,000		53,584



Morgan Stanley Capital I,
5.376%, 11/14/2042	25,000	26,702
Morgan Stanley Capital I,
5.514%, 11/12/2049	100,000	104,037
Morgan Stanley Capital I,
5.610%, 4/15/2049	100,000	104,138
Morgan Stanley Capital I,
6.076%, 6/11/2049	100,000	101,774
Wachovia Bank Commercial
Mortgage Trust, 4.867%, 2/15/2035	100,000	105,517
Wachovia Bank Commercial
Mortgage Trust, 5.203%, 1/15/2045	1,159	1,158
Wachovia Bank Commercial
Mortgage Trust, 5.308%, 11/15/2048	75,000	77,782
Wachovia Bank Commercial
Mortgage Trust, 5.416%, 1/15/2045	50,000	50,542

Total Commercial
Mortgage-Backed Securities—(Identified Cost $2,689,347)		2,769,639


Municipal Bonds–0.5%
American Municipal Power–
Ohio, Inc., 6.449%, 2/15/2044	25,000	26,137
Bay Area Toll Authority,
6.263%, 4/1/2049	25,000	26,309
Central Puget Sound
Regional Transportation Authority, 5.491%, 11/1/2039	25,000	26,241
Commonwealth of
Massachusetts, 5.456%, 12/1/2039	25,000	26,225
Illinois State Toll Highway
Authority, 5.851%, 12/1/2034	25,000	25,460
Municipal Electric Authority
of Georgia, 6.637%, 4/1/2057	25,000	24,236
New Jersey State Turnpike
Revenue, 7.414%, 1/1/2040	15,000	18,287
New York City Municipal
Water Finance Authority, 6.011%, 6/15/2042	10,000	10,620


28		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Bond Market Portfolio

U.S. Bond Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Par amount		Value


Municipal Bonds (continued)
New York State Urban
Development Corp., 5.770%, 3/15/2039	$	25,000	$	25,457
State of California,
4.850%, 10/1/2014		25,000		25,947
State of California,
5.950%, 4/1/2016		35,000		37,211
State of California,
7.300%, 10/1/2039		25,000		26,052
State of California,
7.500%, 4/1/2034		50,000		53,410
State of Connecticut,
5.850%, 3/15/2032		25,000		27,254
State of Illinois, 4.950%,
6/1/2023		25,000		22,156
State of Illinois Taxable,
5.100%, 6/1/2033		25,000		19,515
State of Utah, 4.554%,
7/1/2024		15,000		15,811
State of Washington,
5.481%, 8/1/2039		25,000		26,115

Total Municipal Bonds–
(Identified Cost $451,576)				462,443




	Shares	Value

Mutual Fund–3.4%
AIM Prime Fund
(At Net Asset Value)	2,924,802		2,924,802

Total Investments–103.8%
(Identified Cost $86,036,684)			90,258,756

Other Assets & Liabilities–Net–(3.8)%			(3,345,549	)
Total Net Assets–100.0%		$	86,913,207

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 it is determined to be liquid under criteria established by the Portfolio’s Board of Trustees. At June 30, 2010, these securities amounted to $107,839 which represents 0.1% of the total net assets.


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		29

U.S. Stock Market Portfolio

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks–96.8%
Consumer Discretionary–11.4%
¹99 Cents Only Stores	200	$	2,960

Aaron Rents, Inc.	331		5,650

Abercrombie & Fitch Co.	396		12,153

¹ACCO Brands Corp.	160		798

Advance Auto Parts, Inc.	452		22,681

¹Aeropostale, Inc.	532		15,236

¹AFC Enterprises, Inc.	100		910

¹Amazon.com, Inc.	1,768		193,172

Ambassadors Group, Inc.	100		1,129

¹American Axle &
Manufacturing Holdings, Inc.	200		1,466
American Eagle Outfitters, Inc.	884		10,387

American Greetings Corp.	200		3,752

Ameristar Casinos, Inc.	158		2,379

Andersons, Inc.	100		3,259

¹AnnTaylor Stores Corp.	270		4,393

¹ArvinMeritor, Inc.	500		6,550

¹Asbury Automotive Group, Inc.	100		1,054

¹Ascent Media Corp.	50		1,263

¹ATC Technology Corp.	100		1,612

¹Autoliv, Inc.	400		19,140

¹AutoNation, Inc.	363		7,078

¹AutoZone, Inc.	152		29,369

¹Avis Budget Group, Inc.	488		4,792

Barnes & Noble, Inc.	226		2,915

¹Beacon Roofing Supply, Inc.	175		3,154

¹Beazer Homes USA, Inc.	88		319

Bebe Stores, Inc.	100		640

¹Bed Bath & Beyond, Inc.	1,279		47,425

¹Belo Corp.	250		1,423

Best Buy Co., Inc.	1,786		60,474

Big 5 Sporting Goods Corp.	100		1,314

¹Big Lots, Inc.	370		11,873

¹Biglari Holdings, Inc.	5		1,435

¹BJ’s Restaurants, Inc.	100		2,360



¹BJ’s Wholesale Club, Inc.	253	9,364

¹Blue Nile, Inc.	100	4,708

Blyth, Inc.	25	852

Bob Evans Farms, Inc.	190	4,678

¹Borders Group, Inc.	100	133

¹BorgWarner, Inc.	560	20,910

¹Boyd Gaming Corp.	158	1,341

¹Brightpoint, Inc.	305	2,135

Brinker International, Inc.	485	7,013

¹Brocade Communications
Systems, Inc.	2,395	12,358
Brown Shoe Co., Inc.	130	1,973

Brunswick Corp.	499	6,203

Buckle, Inc.	150	4,863

¹Buffalo Wild Wings, Inc.	100	3,658

Burger King Holdings, Inc.	400	6,736

¹Cabela’s, Inc.	194	2,743

Cablevision Systems Corp.	1,247	29,940

¹California Pizza Kitchen, Inc.	150	2,273

Callaway Golf Co.	220	1,329

¹Carmax, Inc.	1,058	21,054

Carnival Corp.	2,300	69,552

¹Carter’s, Inc.	260	6,825

Cato Corp.	100	2,202

CBS Corp.	3,157	40,820

¹CEC Entertainment, Inc.	150	5,289

¹Charming Shoppes, Inc.	550	2,063

¹Cheesecake Factory, Inc.	270	6,010

Chico’s FAS, Inc.	899	8,882

¹Childrens Place Retail Stores,
Inc.	130	5,723
¹Chipotle Mexican Grill, Inc.,
Class A	174	23,805
Choice Hotels International, Inc.	200	6,042

Christopher & Banks Corp.	100	619

Churchill Downs, Inc.	100	3,280

Cinemark Holdings, Inc.	200	2,630

¹Citi Trends, Inc.	100	3,294

CKE Restaurants, Inc.	200	2,506

¹CKX, Inc.	200	998


30		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Consumer Discretionary (continued)
¹Clear Channel Outdoor
Holdings, Inc.	100	$	868
Coach, Inc.	1,600		58,480

¹Coldwater Creek, Inc.	175		588

¹Collective Brands, Inc.	380		6,004

Columbia Sportswear Co.	55		2,567

Comcast Corp., Class A	10,300		178,911

Comcast Corp., Special
Class A	3,700		60,791
Cooper Tire & Rubber Co.	210		4,095

¹Copart, Inc.	400		14,324

Costco Wholesale Corp.	2,200		120,626

Cracker Barrel Old Country
Store, Inc.	107		4,982
¹CROCS, Inc.	302		3,195

CTC Media, Inc.	200		2,888

D.R. Horton, Inc.	1,377		13,536

¹Dana Holding Corp.	700		7,000

Darden Restaurants, Inc.	700		27,195

¹Deckers Outdoor Corp.	73		10,430

¹Denny’s Corp.	400		1,040

¹DG FastChannel, Inc.	100		3,258

¹Dick’s Sporting Goods, Inc.	486		12,097

Dillard’s, Inc.	243		5,224

¹DineEquity, Inc.	30		838

¹DIRECTV, Class A	4,473		151,724

¹Discovery Communications,
Inc., Ser. A	700		24,997
¹Discovery Communications,
Inc., Ser. C	700		21,651
DISH Network Corp.	1,009		18,313

¹Dolan Media Co.	100		1,112

¹Dolby Laboratories, Inc.	300		18,807

¹Dollar General Corp.	400		11,020

¹Dollar Tree, Inc.	646		26,914

¹Domino’s Pizza, Inc.	152		1,718



¹Dorman Products, Inc.	100	2,033

¹DreamWorks Animation SKG,
Inc.	360	10,278
¹Dress Barn, Inc.	270	6,429

¹DSW, Inc.	100	2,246

¹DTS, Inc.	100	3,287

¹Eastman Kodak Co.	1,063	4,613

¹Education Management Corp.	200	3,050

Ethan Allen Interiors, Inc.	150	2,099

¹EW Scripps Co.	120	892

¹Exide Technologies	200	1,040

Expedia, Inc.	1,119	21,015

Family Dollar Stores, Inc.	684	25,780

¹Federal Mogul Corp.	100	1,302

Federal Signal Corp.	100	604

Finish Line, Inc.	293	4,081

Foot Locker, Inc.	804	10,146

¹Ford Motor Co.	14,524	146,402

Fortune Brands, Inc.	800	31,344

¹Fossil, Inc.	280	9,716

Fred’s, Inc.	100	1,106

¹Fuel Systems Solutions, Inc.	100	2,595

¹Fuqi International, Inc.	100	680

¹ Furniture Brands International,
Inc.	80	418
¹G-III Apparel Group Ltd.	100	2,289

¹GameStop Corp., Class A	732	13,754

Gannett Co., Inc.	1,150	15,479

Gap, Inc.	2,330	45,342

Garmin Ltd.	637	18,588

¹Gaylord Entertainment Co.	194	4,285

¹Genesco, Inc.	100	2,631

Gentex Corp.	773	13,899

¹GeoEye, Inc.	100	3,114

¹Goodyear Tire & Rubber Co.	1,100	10,934

¹Grand Canyon Education, Inc.	100	2,343

¹Group 1 Automotive, Inc.	100	2,353

¹GSI Commerce, Inc.	300	8,640

Guess?, Inc.	300	9,372

¹Gymboree Corp.	124	5,296


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		31


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Consumer Discretionary (continued)
¹Hanesbrands, Inc.	459	$	11,044

Harley-Davidson, Inc.	1,100		24,453

¹Harman International Industries,
Inc.	317		9,475
Harte-Hanks, Inc.	180		1,881

Hasbro, Inc.	613		25,194

Haverty Furniture Cos, Inc.	100		1,229

¹Helen of Troy Ltd.	100		2,206

¹Hertz Global Holdings, Inc.	1,200		11,352

¹hhgregg, Inc.	100		2,332

¹Hibbett Sports, Inc.	160		3,834

HNI Corp.	208		5,739

Home Depot, Inc.	8,400		235,788

Hot Topic, Inc.	200		1,016

¹Hovnanian Enterprises, Inc.	96		353

¹HSN, Inc.	136		3,264

¹Hyatt Hotels Corp., Class A	200		7,418

¹Insight Enterprises, Inc.	180		2,369

Interactive Data Corp.	170		5,675

Interface, Inc.	300		3,222

¹Interline Brands, Inc.	100		1,729

International Game Technology	1,400		21,980

International Speedway Corp.	150		3,864

¹Interpublic Group of Cos., Inc.	2,300		16,399

¹Interval Leisure Group, Inc.	136		1,693

¹inVentiv Health, Inc.	100		2,560

¹J. Crew Group, Inc.	300		11,043

¹Jack in the Box, Inc.	262		5,096

¹Jakks Pacific, Inc.	100		1,438

JCPenney Co., Inc.	1,067		22,919

¹Jo-Ann Stores, Inc.	100		3,751

John Wiley & Sons, Inc.	270		10,441

Johnson Controls, Inc.	3,300		88,671

Jones Apparel Group, Inc.	422		6,689

¹Jos A. Bank Clothiers, Inc.	100		5,399




¹Journal Communications, Inc.	200	794

¹K-Swiss, Inc.	50	562

KB Home	374	4,114

Kimball International, Inc.	100	553

Knoll, Inc.	306	4,067

¹Knology, Inc.	100	1,093

¹Kohl’s Corp.	1,502	71,345

¹Krispy Kreme Doughnuts, Inc.	200	674

¹La-Z-Boy, Inc.	200	1,486

¹Lamar Advertising Co.	284	6,964

Lancaster Colony Corp.	110	5,870

¹Landry’s Restaurants, Inc.	100	2,446

¹Las Vegas Sands Corp.	1,688	37,372

¹Lear Corp.	200	13,240

Leggett & Platt, Inc.	800	16,048

Lennar Corp.	793	11,031

¹Liberty Global, Inc.	585	15,204

¹Liberty Media Corp.–Starz,
Ser. A	240	12,442
¹Liberty Media Holding Corp.–
Capital	440	18,440
¹Liberty Media Holding Corp.–	2,704	28,392
Interactive
¹Life Time Fitness, Inc.	200	6,358

Limited Brands, Inc.	1,387	30,611

¹Lincoln Educational Services
Corp.	100	2,059
¹Live Nation, Inc.	800	8,360

¹Liz Claiborne, Inc.	302	1,274

¹LKQ Corp.	592	11,414

Lowe’s Cos., Inc.	7,200	147,024

¹Lululemon Athletica, Inc.	200	7,444

¹Lumber Liquidators Holdings,
Inc.	100	2,333
¹M&F Worldwide Corp.	50	1,355

¹M/I Homes, Inc.	100	964

Macy’s, Inc.	2,056	36,802

¹Madison Square Garden, Inc.	286	5,626

¹Maidenform Brands, Inc.	100	2,036

Marcus Corp.	100	946

Marriott International, Inc.	1,428	42,754


32		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Consumer Discretionary (continued)
Mattel, Inc.	1,726	$	36,522

Matthews International Corp.	200		5,856

McDonald’s Corp.	5,300		349,111

McGraw-Hill Cos., Inc.	1,532		43,110

MDC Holdings, Inc.	200		5,390

¹Mediacom Communications
Corp.	200		1,344
Men’s Wearhouse, Inc.	260		4,774

Meredith Corp.	189		5,884

¹Meritage Homes Corp.	100		1,628

¹MGM Mirage	1,282		12,358

¹Modine Manufacturing Co.	260		1,997

¹Mohawk Industries, Inc.	288		13,179

Monro Muffler, Inc.	100		3,953

¹Movado Group, Inc.	100		1,068

¹Move, Inc.	300		615

National CineMedia, Inc.	200		3,332

National Presto Industries, Inc.	33		3,064

¹NetFlix, Inc.	211		22,925

¹New York Times Co.	701		6,064

Newell Rubbermaid, Inc.	1,400		20,496

News Corp., Class A	9,000		107,640

News Corp., Class B	2,103		29,127

Nike, Inc.	1,860		125,643

Nordstrom, Inc.	900		28,971

NutriSystem, Inc.	111		2,546

¹NVR, Inc.	28		18,341

¹O’Reilly Automotive, Inc.	655		31,152

¹Office Depot, Inc.	1,291		5,216

¹OfficeMax, Inc.	490		6,399

Omnicom Group, Inc.	1,582		54,263

¹Orient-Express Hotels Ltd.	400		2,960

¹Overstock.com, Inc.	100		1,807

Oxford Industries, Inc.	42		879



¹Pacific Sunwear of California,
Inc.	190	608
¹Panera Bread Co.	141	10,616

¹Papa John’s International, Inc.	160	3,699

¹Penn National Gaming, Inc.	290	6,699

¹Penske Automotive Group, Inc.	154	1,749

PEP Boys-Manny Moe & Jack	300	2,658

PetSmart, Inc.	582	17,559

PF Chang’s China Bistro, Inc.	140	5,551

Phillips-Van Heusen, Corp.	308	14,251

¹Pier 1 Imports, Inc.	700	4,487

¹Pinnacle Entertainment, Inc.	170	1,608

Polaris Industries, Inc.	160	8,739

Polo Ralph Lauren Corp.	300	21,888

Pool Corp.	180	3,946

¹Pre-Paid Legal Services, Inc.	100	4,549

¹Priceline.com, Inc.	217	38,309

¹Pulte Homes, Inc.	1,567	12,975

¹Quiksilver, Inc.	350	1,295

RadioShack Corp.	640	12,486

¹RC2 Corp.	100	1,611

¹Red Robin Gourmet Burgers,
Inc.	41	704
Regal Entertainment Group	480	6,259

Regis Corp.	260	4,048

¹Rent-A-Center, Inc.	300	6,078

¹Retail Ventures, Inc.	100	782

Ross Stores, Inc.	593	31,601

¹Royal Caribbean Cruises Ltd.	685	15,597

¹Ruby Tuesday, Inc.	200	1,700

¹Rue21, Inc.	100	3,034

¹Rush Enterprises, Inc.	200	2,672

Ryland Group, Inc.	206	3,259

¹Saks, Inc.	553	4,197

¹Sauer-Danfoss, Inc.	100	1,222

Scholastic Corp.	133	3,208

¹School Specialty, Inc.	40	723

¹Scientific Games Corp.	280	2,576

Scripps Networks Interactive,
Inc.	460	18,556


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		33


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Consumer Discretionary (continued)
¹Sealy Corp.	100	$	267

¹Sears Holdings Corp.	227		14,676

¹Select Comfort Corp.	300		2,625

Sherwin-Williams Co.	472		32,658

¹Shuffle Master, Inc.	260		2,083

¹Signet Jewelers Ltd.	400		11,000

¹Sinclair Broadcast Group, Inc.	200		1,166

¹Sirius XM Radio, Inc.	19,100		18,135

¹Skechers U.S.A., Inc.	200		7,304

¹Smith & Wesson Holding Corp.	100		409

Snap-On, Inc.	329		13,459

¹Sonic Automotive, Inc.	100		856

¹Sonic Corp.	236		1,829

Spartan Motors, Inc.	100		420

Speedway Motorsports, Inc.	100		1,356

Stage Stores, Inc.	90		961

¹Standard-Pacific Corp.	308		1,026

Stanley Black & Decker, Inc.	806		40,719

Staples, Inc.	3,582		68,237

Starbucks Corp.	3,690		89,667

Starwood Hotels & Resorts
Worldwide, Inc.	900		37,287
¹Stein Mart, Inc.	100		623

¹Steven Madden Ltd.	81		2,553

Sturm Ruger & Co., Inc.	100		1,433

Superior Industries
International, Inc.	100		1,344
¹SuperMedia, Inc.	100		1,829

¹Talbots, Inc.	400		4,124

Target Corp.	3,500		172,095

¹Tempur-Pedic International, Inc.	400		12,300

¹Tenneco, Inc.	380		8,003

¹Texas Roadhouse, Inc.	152		1,918

Thor Industries, Inc.	150		3,562

Tiffany & Co.	600		22,746



¹Timberland Co.	170	2,746

Time Warner, Inc.	5,701	164,816

¹Titan Machinery, Inc.	100	1,313

¹Tivo, Inc.	500	3,690

TJX Cos., Inc.	2,111	88,556

¹Toll Brothers, Inc.	619	10,127

Toro Co.	200	9,824

Tractor Supply Co.	179	10,914

¹True Religion Apparel, Inc.	100	2,207

¹TRW Automotive Holdings
Corp.	360	9,925
Tupperware Brands Corp.	280	11,158

¹Under Armour, Inc.	222	7,355

UniFirst Corp.	100	4,402

¹United Rentals, Inc.	234	2,181

¹Universal Electronics, Inc.	100	1,663

¹Urban Outfitters, Inc.	626	21,528

V.F. Corp.	500	35,590

¹Vail Resorts, Inc.	178	6,214

Viacom, Inc.	2,700	84,699

Virgin Media, Inc.	1,569	26,187

¹Vitamin Shoppe, Inc.	100	2,565

¹Volcom, Inc.	100	1,857

¹WABCO Holdings, Inc.	300	9,444

Wabtec Corp.	270	10,770

Wal-Mart Stores, Inc.	11,270	541,749

Walt Disney Co.	9,123	287,374

¹Warnaco Group, Inc.	280	10,119

¹Warner Music Group Corp.	80	389

Washington Post Co.	26	10,672

Wendy’s	1,668	6,672

¹WESCO International, Inc.	200	6,734

¹Wet Seal, Inc.	600	2,190

Whirlpool Corp.	356	31,264

Williams-Sonoma, Inc.	488	12,112

¹Winnebago Industries, Inc.	40	398

¹WMS Industries, Inc.	350	13,737

Wolverine World Wide, Inc.	200	5,044


34		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Consumer Discretionary (continued)
World Wrestling Entertainment,
Inc.	100	$	1,556
Wyndham Worldwide Corp.	900		18,126

Wynn Resorts Ltd.	381		29,059

Yum! Brands, Inc.	2,300		89,792

¹Zumiez, Inc.	100		1,611

Total Consumer Discretionary			6,621,112


Consumer Staples–8.4%
Alberto-Culver Co.	413		11,188

¹Alliance One International, Inc.	300		1,068

Altria Group, Inc.	10,366		207,735

¹American Dairy, Inc.	100		1,595

¹American Italian Pasta Co.	100		5,287

Archer-Daniels-Midland Co.	2,800		72,296

Avon Products, Inc.	2,100		55,650

B&G Foods, Inc.	200		2,156

¹Boston Beer Co., Inc.	48		3,238

Brown-Forman Corp.	400		22,892

Bunge Ltd.	738		36,302

Cal-Maine Foods, Inc.	100		3,193

Campbell Soup Co.	1,047		37,514

Casey’s General Stores, Inc.	280		9,772

¹Central European Distribution
Corp.	300		6,414
¹Central Garden and Pet Co.	40		380

¹Central Garden and Pet Co.,
Class A (Non-voting)	180		1,615
¹Chiquita Brands International,
Inc.	178		2,163
Church & Dwight Co., Inc.	380		23,830

Clorox Co.	750		46,620

Coca-Cola Co.	10,300		516,236

Coca-Cola Enterprises, Inc.	1,400		36,204

Colgate-Palmolive Co.	2,458		193,592

ConAgra Foods, Inc.	2,171		50,628

¹Constellation Brands, Inc.	910		14,214



Corn Products International, Inc.	351	10,635

CVS Corp.	6,889	201,985

¹Dean Foods Co.	800	8,056

Del Monte Foods Co.	960	13,814

Diamond Foods, Inc.	100	4,110

¹Dole Food Co., Inc.	200	2,086

Dr Pepper Snapple Group, Inc.	1,300	48,607

¹Elizabeth Arden, Inc.	100	1,452

Estee Lauder Cos., Inc.	600	33,438

Flowers Foods, Inc.	400	9,772

¹Fresh Del Monte Produce, Inc.	200	4,048

General Mills, Inc.	3,258	115,724

¹Great Atlantic & Pacific Tea Co.	112	437

¹Green Mountain Coffee
Roasters, Inc.	550	14,135
H.J. Heinz Co.	1,549	66,948

¹Hain Celestial Group, Inc.	180	3,630

¹Hansen Natural Corp.	352	13,767

Herbalife Ltd.	350	16,117

Hershey Co.	797	38,200

Hormel Foods Corp.	389	15,747

Ingles Markets, Inc.	100	1,505

J&J Snack Foods Corp.	100	4,210

J.M. Smucker Co.	637	38,360

Kellogg Co.	1,299	65,340

Kimberly-Clark Corp.	2,035	123,382

Kraft Foods, Inc.	8,604	240,912

Kroger Co.	3,043	59,917

Lance, Inc.	100	1,649

Lorillard, Inc.	737	53,049

McCormick & Co., Inc.	633	24,029

Molson Coors Brewing Co.	776	32,871

Nash Finch Co.	100	3,416

¹NBTY, Inc.	290	9,863

Nu Skin Enterprises, Inc.	300	7,479

¹Pantry, Inc.	130	1,834

¹Peet’s Coffee & Tea, Inc.	100	3,927

PepsiCo, Inc.	8,024	489,063

PetMed Express, Inc.	100	1,780


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		35


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Consumer Staples (continued)
Philip Morris International, Inc.	9,275	$	425,166

¹Pilgrim’s Pride Corp.	300		1,971

¹Prestige Brands Holdings, Inc.	100		708

Pricesmart, Inc.	100		2,323

Procter & Gamble Co.	14,400		863,712

¹Ralcorp Holdings, Inc.	263		14,412

¹Rite Aid Corp.	2,350		2,303

Ruddick Corp.	200		6,198

Safeway, Inc.	1,905		37,452

¹Sally Beauty Holdings, Inc.	490		4,018

Sanderson Farms, Inc.	100		5,074

Sara Lee Corp.	3,327		46,911

Schweitzer-Mauduit
International, Inc.	100		5,045
Seaboard Corp.	1		1,510

Sensient Technologies Corp.	261		6,768

¹Smart Balance, Inc.	400		1,636

¹Smithfield Foods, Inc.	659		9,819

Spartan Stores, Inc.	100		1,372

¹Steiner Leisure Ltd.	100		3,844

SUPERVALU, Inc.	964		10,450

SYSCO Corp.	2,900		82,853

¹Tejon Ranch Co.	112		2,585

Tootsie Roll Industries, Inc.	112		2,649

¹TreeHouse Foods, Inc.	200		9,132

Tyson Foods, Inc.	1,430		23,438

¹Ulta Salon Cosmetics &
Fragrance, Inc.	100		2,366
¹United Natural Foods, Inc.	160		4,781

Universal Corp.	109		4,325

Vector Group Ltd.	220		3,700

Walgreen Co.	4,900		130,830

WD-40 Co.	100		3,340

Weis Markets, Inc.	100		3,291

¹Whole Foods Market, Inc.	689		24,818



¹Winn-Dixie Stores, Inc.	300	2,892

¹Zhongpin, Inc.	100	1,176

Total Consumer Staples		4,899,944


Energy–9.2%
¹Allis-Chalmers Energy, Inc.	200	412

Anadarko Petroleum Corp.	2,400	86,616

Apache Corp.	1,641	138,156

¹Arena Resources, Inc.	200	6,380

¹Atlas Energy, Inc.	400	10,828

¹ATP Oil & Gas Corp.	148	1,567

¹Atwood Oceanics, Inc.	300	7,656

Baker Hughes, Inc.	2,115	87,921

¹Basic Energy Services, Inc.	100	770

Berry Petroleum Co.	260	6,687

¹Bill Barrett Corp.	240	7,385

¹BPZ Resources, Inc.	200	830

¹Brigham Exploration Co.	600	9,228

¹Bronco Drilling Co., Inc.	100	335

Cabot Oil & Gas Corp.	559	17,508

¹Cameron International Corp.	1,218	39,609

CARBO Ceramics, Inc.	80	5,775

¹Carrizo Oil & Gas, Inc.	100	1,553

Chesapeake Energy Corp.	3,221	67,480

Chevron Corp.	9,948	675,071

Cimarex Energy Co.	406	29,062

¹Clayton Williams Energy, Inc.	35	1,474

¹Clean Energy Fuels Corp.	100	1,494

¹Cloud Peak Energy, Inc.	200	2,652

¹Cobalt International Energy, Inc.	400	2,980

¹Complete Production Services,
Inc.	200	2,860
¹Comstock Resources, Inc.	260	7,207

¹Concho Resources, Inc.	400	22,132

ConocoPhillips	7,048	345,986

¹Contango Oil & Gas Co.	66	2,954

¹Continental Resources, Inc.	200	8,924

Core Laboratories NV	110	16,237

¹Crosstex Energy, Inc.	119	763

¹CVR Energy, Inc.	100	752


36		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Energy (continued)
¹Dawson Geophysical Co.	34	$	723

¹Delta Petroleum Corp.	1,100		946

¹Denbury Resources, Inc.	1,908		27,933

Devon Energy Corp.	2,143		130,552

Diamond Offshore Drilling, Inc.	342		21,269

¹Dresser-Rand Group, Inc.	398		12,557

¹Dril-Quip, Inc.	200		8,804

El Paso Corp.	3,345		37,163

¹Energy Partners Ltd.	200		2,442

¹Energy XXI (Bermuda) Ltd.	200		3,156

EOG Resources, Inc.	1,252		123,159

EXCO Resources, Inc.	829		12,112

¹Exterran Holdings, Inc.	331		8,543

Exxon Mobil Corp.	25,278		1,442,616

¹FMC Technologies, Inc.	600		31,596

¹Forest Oil Corp.	511		13,981

Frontier Oil Corp.	453		6,093

¹Global Industries Ltd.	330		1,482

¹GMX Resources, Inc.	100		649

¹Goodrich Petroleum Corp.	90		1,080

¹Gran Tierra Energy, Inc.	1,000		4,960

Gulf Island Fabrication, Inc.	100		1,552

¹Gulfport Energy Corp.	100		1,186

Halliburton Co.	4,500		110,475

¹Harvest Natural Resources, Inc.	100		737

¹Helix Energy Solutions Group,
Inc.	397		4,276
Helmerich & Payne, Inc.	500		18,260

¹Hercules Offshore, Inc.	300		729

Hess Corp.	1,460		73,496

Holly Corp.	211		5,608

¹Hornbeck Offshore Services,
Inc.	100		1,460
¹ION Geophysical Corp.	300		1,044

¹Key Energy Services, Inc.	700		6,426



Lufkin Industries, Inc.	112	4,367

Marathon Oil Corp.	3,480	108,193

¹Mariner Energy, Inc	500	10,740

¹Matrix Service Co.	100	931

¹McMoRan Exploration Co.	400	4,444

Murphy Oil Corp.	899	44,545

¹Nabors Industries Ltd.	1,400	24,668

National Oilwell Varco, Inc.	2,043	67,562

¹Newfield Exploration Co.	691	33,762

¹Newpark Resources, Inc.	300	1,815

¹Noble Corp.	1,297	40,090

Noble Energy, Inc.	906	54,659

¹Northern Oil and Gas, Inc.	200	2,568

Occidental Petroleum Corp.	4,027	310,683

¹Oceaneering International, Inc.	280	12,572

¹Oil States International, Inc.	283	11,201

¹Oilsands Quest, Inc.	600	366

¹Parker Drilling Co.	470	1,857

Patterson-UTI Energy, Inc.	777	10,000

Penn Virginia Corp.	160	3,218

¹Petroleum Development Corp.	50	1,281

¹PetroQuest Energy, Inc.	200	1,352

¹Pioneer Drilling Co.	171	970

Pioneer Natural Resources Co.	550	32,698

¹Plains Exploration & Production
Co.	638	13,149
¹Pride International, Inc.	800	17,872

¹Quicksilver Resources, Inc.	500	5,500

Range Resources Corp.	752	30,193

¹Resolute Energy Corp.	200	2,448

¹Rex Energy Corp.	200	2,020

¹Rosetta Resources, Inc.	208	4,121

¹Rowan Cos., Inc.	499	10,948

RPC, Inc.	100	1,365

¹SandRidge Energy, Inc.	566	3,300

Schlumberger Ltd.	5,900	326,506

¹SEACOR Holdings, Inc.	80	5,653

¹Seahawk Drilling, Inc.	53	515

SM Energy Co.	316	12,691


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		37


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Energy (continued)
Smith International, Inc.	1,262	$	47,514

¹Stone Energy Corp.	156		1,741

Sunoco, Inc.	633		22,009

¹Superior Energy Services	400		7,468

¹Superior Well Services, Inc.	100		1,672

¹Swift Energy Co.	140		3,767

¹T-3 Energy Services, Inc.	58		1,618

¹Tesco Corp.	200		2,456

Tesoro Corp.	605		7,060

¹Tetra Technologies, Inc.	220		1,998

Tidewater, Inc.	256		9,912

¹Transocean Ltd.	1,580		73,201

¹Ultra Petroleum Corp.	753		33,320

¹Unit Corp.	212		8,605

Vaalco Energy, Inc.	400		2,240

Valero Energy Corp.	2,800		50,344

¹Venoco, Inc.	100		1,647

W&T Offshore, Inc.	113		1,069

¹Warren Resources, Inc.	200		580

¹Weatherford International Ltd.	3,700		48,618

¹Western Refining, Inc.	100		503

¹Whiting Petroleum Corp.	250		19,605

¹Willbros Group, Inc.	200		1,480

Williams Cos., Inc.	2,844		51,988

Total Energy			5,355,547


Financials–16.3%
1st Source Corp.	100		1,692

²Acadia Realty Trust	304		5,113

ACE Ltd.	1,695		87,259

¹Affiliated Managers Group, Inc.	200		12,154

AFLAC, Inc.	2,294		97,885

²Alexander’s, Inc.	8		2,423

²Alexandria Real Estate Equities,
Inc.	250		15,843



¹Alleghany Corp.	26	7,626

Allied World Assurance Holdings
Ltd.	200	9,076
Allstate Corp.	2,500	71,825

Alterra Capital Holdings Ltd.	180	3,380

²AMB Property Corp.	862	20,438

¹AMBAC Financial Group, Inc.	1,089	730

²American Campus
Communities, Inc.	216	5,895
²American Capital Agency Corp.	100	2,642

¹American Capital Ltd.	1,568	7,558

American Equity Investment Life
Holding Co.	200	2,064
American Express Co.	5,307	210,688

American Financial Group, Inc.	400	10,928

¹American International Group,
Inc.	650	22,386
American National Insurance Co.	48	3,887

American Physicians Capital, Inc.	33	1,018

¹AmeriCredit Corp.	664	12,098

Ameriprise Financial, Inc.	1,242	44,873

¹Amerisafe, Inc.	100	1,755

Amtrust Financial Services, Inc.	100	1,204

²Annaly Mortgage Management,
Inc.	2,800	48,020
²Anworth Mortgage Asset Corp.	600	4,272

AON Corp.	1,200	44,544

²Apartment Investment &
Management Co.	530	10,266
Apollo Investment Corp.	949	8,854

¹Arch Capital Group Ltd.	252	18,774

Ares Capital Corp.	922	11,553

Argo Group International
Holdings Ltd.	145	4,436
Arrow Financial Corp.	103	2,379

Arthur J. Gallagher & Co.	533	12,995

Artio Global Investors, Inc.	100	1,574

^1,2Ashford Hospitality Trust, Inc.	300	2,199

Aspen Insurance Holdings Ltd.	400	9,896

Associated Banc-Corp	900	11,034

Assurant, Inc.	550	19,085


38		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Financials (continued)
Assured Guaranty Ltd.	790	$	10,483

Astoria Financial Corp.	340		4,678

²AvalonBay Communities, Inc.	400		37,348

Axis Capital Holdings Ltd.	658		19,556

BancorpSouth, Inc.	332		5,936

Bank Mutual Corp.	200		1,136

Bank of America Corp.	49,700		714,189

Bank of Hawaii Corp.	300		14,505

Bank of New York Mellon
Corp.	5,978		147,597
Bank of the Ozarks, Inc.	100		3,547

BB&T Corp.	3,446		90,664

¹Beneficial Mutual Bancorp, Inc.	200		1,976

¹Berkshire Hathaway, Inc.	2,850		227,116

Berkshire Hills Bancorp, Inc.	76		1,480

BGC Partners, Inc.	200		1,022

²BioMed Realty Trust, Inc.	600		9,654

BlackRock Kelso Capital Corp.	252		2,487

BlackRock, Inc.	166		23,804

BOK Financial Corp.	196		9,304

Boston Private Financial
Holdings, Inc.	160		1,029
²Boston Properties, Inc.	734		52,364

²Brandywine Realty Trust	700		7,525

²BRE Properties, Inc.	300		11,079

Broadridge Financial Solutions,
Inc.	644		12,268
¹Brookdale Senior Living, Inc.	404		6,060

Brookline Bancorp, Inc.	190		1,687

Brown & Brown, Inc.	524		10,029

Calamos Asset Management,
Inc.	76		705
²Camden Property Trust	330		13,481

Capital City Bank Group, Inc.	100		1,238

Capital One Financial Corp.	2,300		92,690

CapitalSource, Inc.	1,200		5,712



Capitol Federal Financial	160	5,306

²CapLease, Inc.	100	461

²Capstead Mortgage Corp.	400	4,424

¹Cardtronics, Inc.	100	1,296

Cash America International, Inc.	195	6,683

Cathay General Bancorp	500	5,165

¹CB Richard Ellis Group, Inc.	1,300	17,693

¹CBIZ, Inc.	200	1,272

²CBL & Associates Properties,
Inc.	761	9,467
¹CBOE Holdings, Inc.	100	3,255

²Cedar Shopping Centers, Inc.	100	602

Charles Schwab Corp.	5,000	70,900

Chemical Financial Corp.	100	2,178

²Chimera Investment Corp.	3,800	13,718

Chubb Corp.	1,600	80,016

Cincinnati Financial Corp.	737	19,066

¹CIT Group, Inc.	900	30,474

¹Citigroup, Inc.	105,200	395,552

¹Citizens Republic Bancorp, Inc.	1,900	1,615

¹Citizens, Inc.	200	1,332

City Holding Co.	100	2,788

City National Corp.	252	12,910

CME Group, Inc.	331	93,193

¹CNA Surety Corp.	100	1,607

¹CNO Financial Group, Inc.	1,299	6,430

Cohen & Steers, Inc.	100	2,074

²Colonial Properties Trust	363	5,274

Columbia Banking System, Inc.	200	3,652

Comerica, Inc.	882	32,484

Commerce Bancshares, Inc.	341	12,273

Community Bank System, Inc.	190	4,186

Community Trust Bancorp, Inc.	80	2,008

CompuCredit Holdings Corp.	71	281

²Corporate Office Properties
Trust SBI MD	270	10,195
¹Corrections Corp. of America	518	9,883

²Cousins Properties, Inc.	609	4,105

¹Credit Acceptance Corp.	100	4,877

Cullen/Frost Bankers, Inc.	247	12,696


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		39


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Financials (continued)
CVB Financial Corp.	337	$	3,202

²Cypress Sharpridge
Investments, Inc.	200		2,532
Danvers Bancorp, Inc.	100		1,445

²DCT Industrial Trust, Inc.	900		4,068

Delphi Financial Group	275		6,713

²Developers Diversified Realty
Corp.	980		9,702
^1,2DiamondRock Hospitality Co.	913		7,505

²Digital Realty Trust, Inc.	400		23,072

Dime Community Bancshares	180		2,219

Discover Financial Services	2,749		38,431

²Douglas Emmett, Inc.	600		8,532

Duff & Phelps Corp.	100		1,263

²Duke Realty Corp.	1,351		15,334

²DuPont Fabros Technology,
Inc.	300		7,368
¹E*Trade Financial Corp.	970		11,465

East West Bancorp, Inc.	582		8,876

²EastGroup Properties, Inc.	180		6,404

Eaton Vance Corp.	574		15,848

²Education Realty Trust, Inc.	300		1,809

¹eHealth, Inc.	200		2,274

Employers Holdings, Inc.	200		2,946

Endurance Specialty Holdings
Ltd.	228		8,557
¹Enstar Group Ltd.	100		6,644

²Entertainment Properties Trust	200		7,614

²Equity Lifestyle Properties, Inc.	200		9,646

²Equity One, Inc.	290		4,524

²Equity Residential	1,400		58,296

Erie Indemnity Co.	208		9,464

²Essex Property Trust, Inc.	119		11,607

¹Euronet Worldwide, Inc.	288		3,684

Evercore Partners, Inc.	100		2,335

Everest Re Group Ltd.	300		21,216



²Extra Space Storage, Inc.	300	4,170

¹EZCORP, Inc.	300	5,565

¹Fannie Mae	5,800	1,987

FBL Financial Group, Inc.	100	2,100

¹FBR Capital Markets Corp.	200	666

²Federal Realty Investment Trust	290	20,378

Federated Investors, Inc.	421	8,719

^1,2FelCor Lodging Trust, Inc.	640	3,194

Fidelity National Financial, Inc.	1,020	13,250

Fidelity National Information
Services, Inc.	1,612	43,234
Fifth Street Finance Corp.	406	4,478

Fifth Third Bancorp	3,953	48,582

First American Financial Corp.	465	5,896

¹First BanCorp	420	1,619

First Busey Corp.	100	453

¹First Cash Financial Services,
Inc.	100	2,180
First Citizens BancShares, Inc.	24	4,616

First Commonwealth Financial
Corp.	406	2,132
First Financial Bancorp	200	2,990

First Financial Bankshares, Inc.	100	4,809

First Financial Corp.	40	1,032

First Financial Holdings, Inc.	100	1,145

¹First Horizon National Corp.	1,141	13,059

^1,2First Industrial Realty Trust, Inc.	171	824

¹First Marblehead Corp.	175	411

First Merchants Corp.	130	1,102

First Midwest Bancorp, Inc.	390	4,742

First Niagara Financial Group,
Inc.	947	11,866
²First Potomac Realty Trust	100	1,437

FirstMerit Corp.	604	10,347

Flagstone Reinsurance
Holdings SA	700	7,574
Flushing Financial Corp.	100	1,223

FNB Corp.	750	6,023

¹Forest City Enterprises, Inc.	545	6,169

¹Forestar Real Estate Group, Inc.	200	3,592

¹FPIC Insurance Group, Inc.	150	3,848


40		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Financials (continued)
Franklin Resources, Inc.	769	$	66,280

²Franklin Street Properties Corp.	261		3,082

¹Freddie Mac	2,435		1,006

¹Frontier Financial Corp.	12		4

Fulton Financial Corp.	1,025		9,891

GAMCO Investors, Inc.	60		2,232

¹Genworth Financial, Inc.	2,361		30,858

²Getty Realty Corp.	120		2,689

GFI Group, Inc.	256		1,428

Glacier Bancorp, Inc.	290		4,254

¹Gleacher & Co., Inc.	400		1,020

¹GLG Partners, Inc.	600		2,628

²Glimcher Realty Trust	100		598

Goldman Sachs Group, Inc.	2,407		315,967

²Government Properties
Income Trust	200		5,104
Greenhill & Co., Inc.	187		11,431

¹Greenlight Capital Re Ltd.
Cl A	100		2,519
Hancock Holding Co.	160		5,338

Hanover Insurance Group, Inc.	216		9,396

Harleysville Group, Inc.	100		3,103

Hartford Financial Services
Group, Inc.	2,000		44,260
²Hatteras Financial Corp.	200		5,564

HCC Insurance Holdings, Inc.	524		12,974

²Health Care Property Investors,
Inc.	1,493		48,149
²Health Care REIT, Inc.	636		26,788

²Healthcare Realty Trust, Inc.	275		6,042

¹Heckmann Corp.	500		2,320

Hercules Technology Growth
Capital, Inc.	330		3,039
²Hersha Hospitality Trust	800		3,616

²Highwoods Properties, Inc.	390		10,826

¹Hilltop Holdings, Inc.	300		3,003



Home Bancshares, Inc.	110	2,509

²Home Properties, Inc.	160	7,211

Horace Mann Educators Corp.	120	1,836

²Hospitality Properties Trust	578	12,196

²Host Hotels & Resorts, Inc.	3,076	41,464

²HRPT Properties Trust	1,400	8,694

Hudson City Bancorp, Inc.	2,334	28,568

Huntington Bancshares, Inc.	3,438	19,047

IBERIABANK Corp.	160	8,237

Independent Bank Corp.	90	2,221

Infinity Property & Casualty
Corp.	50	2,309
²Inland Real Estate Corp.	350	2,772

¹Interactive Brokers Group, Inc.	200	3,320

¹IntercontinentalExchange, Inc.	300	33,909

¹International Assets Holding
Corp.	29	464
International Bancshares Corp.	200	3,338

Invesco Ltd. Com	2,200	37,026

¹Investment Technology Group,
Inc.	189	3,035
¹Investors Bancorp, Inc.	200	2,624

²Investors Real Estate Trust	330	2,914

^1,2iStar Financial, Inc.	469	2,092

Janus Capital Group, Inc.	800	7,104

Jefferies Group, Inc.	556	11,720

Jones Lang LaSalle, Inc.	240	15,754

JPMorgan Chase & Co.	19,625	718,471

¹KAR Auction Services, Inc.	100	1,237

¹KBW, Inc.	100	2,144

KeyCorp	4,400	33,836

²Kilroy Realty Corp.	226	6,719

²Kimco Realty Corp.	2,033	27,324

²Kite Realty Group Trust	100	418

¹Knight Capital Group, Inc.	370	5,102

¹LaBranche & Co., Inc.	200	856

Lakeland Financial Corp.	100	1,998

²LaSalle Hotel Properties	359	7,385

Legg Mason, Inc.	868	24,330

¹Leucadia National Corp.	900	17,559


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		41


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Financials (continued)
²Lexington Corporate Properties
Trust	761	$	4,574
²Liberty Property Trust	600		17,310

Lincoln National Corp.	1,505		36,556

Loews Corp.	1,714		57,093

²LTC Properties, Inc.	100		2,427

M&T Bank Corp.	413		35,084

²Macerich Co.	619		23,101

²Mack-Cali Realty Corp.	388		11,535

Maiden Holdings Ltd.	300		1,971

¹Markel Corp.	49		16,660

Marsh & McLennan Cos., Inc.	2,645		59,645

Marshall & Ilsley Corp.	2,444		17,548

MB Financial, Inc.	300		5,517

¹MBIA, Inc.	727		4,078

Meadowbrook Insurance
Group, Inc.	400		3,452
²Medical Properties Trust, Inc.	600		5,664

Mercury General Corp.	100		4,144

MetLife, Inc.	4,046		152,777

¹MF Global Holdings Ltd.	500		2,855

²MFA Mortgage Investments,
Inc.	1,378		10,197
¹MGIC Investment Corp.	890		6,132

²Mid-America Apartment
Communities, Inc.	170		8,750
Montpelier Re Holdings Ltd.	410		6,121

Moody’s Corp.	1,000		19,920

Morgan Stanley	6,200		143,902

¹Morningstar, Inc.	100		4,252

¹MSCI, Inc.	536		14,686

MVC Capital, Inc.	100		1,292

¹Nara Bancorp, Inc.	300		2,529

¹NASDAQ Stock Market, Inc.	674		11,984

¹National Financial Partners
Corp.	150		1,466



²National Health Investors, Inc.	100	3,856

National Penn Bancshares, Inc.	706	4,243

²National Retail Properties, Inc.	370	7,933

National Western Life Insurance
Co.	10	1,528
²Nationwide Health Properties,
Inc.	631	22,571
¹Navigators Group, Inc.	100	4,113

NBT Bancorp, Inc.	185	3,778

Nelnet, Inc.	200	3,856

New York Community Bancorp,
Inc.	1,994	30,448
NewAlliance Bancshares, Inc.	400	4,484

Northern Trust Corp.	1,100	51,370

Northfield Bancorp, Inc.	100	1,298

²NorthStar Realty Finance Corp.	108	288

Northwest Bancshares, Inc.	625	7,169

NYSE Euronext	1,261	34,841

¹Ocwen Financial Corp.	400	4,076

Old National Bancorp	528	5,470

Old Republic International Corp.	1,038	12,591

²Omega Healthcare Investors,
Inc.	549	10,942
OneBeacon Insurance Group
Ltd.	100	1,432
¹optionsXpress Holdings, Inc.	200	3,148

Oriental Financial Group, Inc.	100	1,266

PacWest Bancorp	150	2,747

Park National Corp.	60	3,902

²Parkway Properties, Inc.	45	656

PartnerRe Ltd.	350	24,549

^1,2Pebblebrook Hotel Trust	100	1,885

²Pennsylvania Real Estate
Investment Trust	160	1,955
People’s United Financial, Inc.	1,871	25,258

¹Phoenix Cos., Inc.	380	802

¹Pico Holdings, Inc.	100	2,997

¹Pinnacle Financial Partners, Inc.	100	1,285

¹Piper Jaffray Cos.	140	4,511

Platinum Underwriters Holdings
Ltd.	280	10,161


42		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Financials (continued)
²Plum Creek Timber Co., Inc.	850	$	29,350

¹PMI Group, Inc.	970		2,803

PNC Financial Services Group,
Inc.	2,575		145,487
¹Popular, Inc.	3,048		8,169

¹Portfolio Recovery Associates,
Inc.	147		9,817
²Post Properties, Inc.	272		6,183

Presidential Life Corp.	100		910

Principal Financial Group, Inc.	1,553		36,402

PrivateBancorp, Inc.	200		2,216

¹ProAssurance Corp.	150		8,514

Progressive Corp.	3,200		59,904

²ProLogis	2,352		23,826

Prospect Capital Corp.	246		2,374

Prosperity Bancshares, Inc.	200		6,950

Protective Life Corp.	400		8,556

Provident Financial Services,
Inc.	150		1,754
Provident New York Bancorp	230		2,036

Prudential Financial, Inc.	2,270		121,808

²PS Business Parks, Inc.	74		4,128

²Public Storage, Inc.	694		61,010

Radian Group, Inc.	786		5,691

^1,2RAIT Investment Trust	100		187

²Ramco-Gershenson Properties
Trust	35		354
Raymond James Financial, Inc.	518		12,789

²Realty Income Corp.	508		15,408

²Redwood Trust, Inc.	340		4,978

²Regency Centers Corp.	400		13,760

Regions Financial Corp.	5,784		38,059

Reinsurance Group of America,
Inc.	400		18,284
RenaissanceRe Holdings Ltd.	300		16,881

Renasant Corp.	100		1,435



Retail Opportunity Investments
Corp.	200	1,930
RLI Corp.	100	5,251

S&T Bancorp, Inc.	100	1,976

Safety Insurance Group, Inc.	100	3,702

Sandy Spring Bancorp, Inc.	90	1,261

²Saul Centers, Inc.	54	2,194

SCBT Financial Corp.	100	3,522

SEI Investments Co.	660	13,438

Selective Insurance Group	218	3,239

²Senior Housing Properties
Trust	562	11,302
¹Signature Bank	170	6,462

Simmons First National Corp.	100	2,626

²Simon Property Group, Inc.	1,458	117,733

²SL Green Realty Corp.	430	23,667

¹SLM Corp.	2,400	24,936

South Financial Group, Inc.	207	56

Southside Bancshares, Inc.	105	2,062

²Sovran Self Storage, Inc.	170	5,853

¹St. Joe Co.	405	9,380

StanCorp Financial Group, Inc.	200	8,108

²Starwood Property Trust, Inc.	200	3,390

State Auto Financial Corp.	100	1,551

³State Street Corp.	2,500	84,550

StellarOne Corp.	100	1,277

Sterling Bancshares, Inc.	450	2,120

Stewart Information Services
Corp.	40	361
¹Stifel Financial Corp.	150	6,509

^1,2Strategic Hotels & Resorts, Inc.	934	4,100

Student Loan Corp.	10	241

Suffolk Bancorp	100	3,094

²Sun Communities, Inc.	120	3,115

^1,2Sunstone Hotel Investors, Inc.	614	6,097

SunTrust Banks, Inc.	2,431	56,642

Susquehanna Bancshares, Inc.	728	6,064

¹SVB Financial Group	255	10,514

SWS Group, Inc.	100	950

SY Bancorp, Inc.	100	2,298


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		43


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Financials (continued)
Synovus Financial Corp.	3,800	$	9,652

T. Rowe Price Group, Inc.	1,278		56,730

²Tanger Factory Outlet Centers,
Inc.	190		7,862
²Taubman Centers, Inc.	310		11,665

TCF Financial Corp.	597		9,916

¹TD Ameritrade Holding Corp.	1,197		18,314

¹Teton Advisors, Inc. Class B	1		–

¹Texas Capital Bancshares, Inc.	100		1,640

TFS Financial Corp.	500		6,205

Tompkins Trustco, Inc.	49		1,850

Torchmark Corp.	461		22,824

Tower Group, Inc.	147		3,165

Towers Watson & Co.	270		10,490

TowneBank	100		1,452

Transatlantic Holdings, Inc.	299		14,340

Travelers Cos., Inc.	2,600		128,050

Trico Bancshares	100		1,693

TrustCo Bank Corp. NY	240		1,344

Trustmark Corp.	300		6,246

²U-Store-It Trust	410		3,059

U.S. Bancorp	9,400		210,090

UMB Financial Corp.	180		6,401

Umpqua Holdings Corp.	490		5,625

Union First Market Bankshares
Corp.	90		1,103
¹United America Indemnity Ltd.	190		1,398

United Bankshares, Inc.	180		4,309

¹United Community Banks, Inc.	680		2,686

²United Dominion Realty Trust,
Inc.	855		16,356
United Fire & Casualty Co.	100		1,982

Unitrin, Inc.	200		5,120

¹Universal American Financial
Corp.	300		4,320



²Universal Health Realty Income
Trust	30	964
Univest Corp. of Pennsylvania	100	1,732

UnumProvident Corp.	1,600	34,720

²Urstadt Biddle Properties, Inc.	180	2,903

Validus Holdings Ltd.	472	11,526

Valley National Bancorp	761	10,365

²Ventas, Inc.	791	37,137

Visa, Inc.	2,299	162,654

²Vornado Realty Trust	843	61,497

W.R. Berkley Corp.	651	17,225

Waddell & Reed Financial, Inc.	420	9,190

Walter Industries, Inc.	287	17,464

²Walter Investment Management
Corp.	111	1,815
Washington Federal, Inc.	530	8,575

²Washington Real Estate
Investment Trust	305	8,415
Washington Trust Bancorp, Inc.	110	1,874

Webster Financial Corp.	424	7,607

²Weingarten Realty Investors	595	11,335

Wells Fargo & Co.	24,416	625,050

WesBanco, Inc.	100	1,685

Westamerica BanCorp.	150	7,878

¹Western Alliance Bancorp	400	2,868

Western Union Co.	3,290	49,054

Westfield Financial, Inc.	200	1,666

White Mountains Insurance
Group Ltd.	43	13,941
Whitney Holding Corp.	390	3,608

Willis Group Holdings PLC	847	25,452

Wilmington Trust Corp.	530	5,878

Wintrust Financial Corp.	150	5,001

¹World Acceptance Corp.	45	1,724

Xl Group PLC	1,600	25,616

Zions BanCorp.	770	16,609

Total Financials		9,514,360


Health Care–11.6%
¹Abaxis, Inc.	100	2,143

Abbott Laboratories	7,692	359,832


44		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Health Care (continued)
¹Abiomed, Inc.	100	$	968

¹Abraxis Bioscience, Inc.	35		2,597

¹Accuray, Inc.	195		1,293

¹Acorda Therapeutics, Inc.	200		6,222

¹Advisory Board Co.	140		6,014

Aetna, Inc.	2,160		56,981

¹Affymax, Inc.	100		598

¹Affymetrix, Inc.	193		1,139

¹Air Methods Corp.	100		2,975

¹Albany Molecular Research,
Inc.	100		517
¹Alexion Pharmaceuticals, Inc.	454		23,240

¹Align Technology, Inc.	200		2,974

¹Alkermes, Inc.	510		6,349

Allergan, Inc.	1,540		89,720

¹Allos Therapeutics, Inc.	300		1,839

¹Alnylam Pharmaceuticals, Inc.	200		3,004

¹AMAG Pharmaceuticals, Inc.	100		3,435

¹Amedisys, Inc.	133		5,848

¹American Medical Systems
Holdings, Inc.	390		8,627
¹American Oriental
Bioengineering, Inc.	200		504
¹AMERIGROUP Corp.	280		9,094

AmerisourceBergen Corp.	1,440		45,720

¹Amgen, Inc.	4,896		257,530

¹AMN Healthcare Services, Inc.	100		748

¹AmSurg Corp.	100		1,782

¹Amylin Pharmaceuticals, Inc.	726		13,649

¹Angiodynamics, Inc.	100		1,475

¹Ardea Biosciences, Inc.	100		2,056

¹Arena Pharmaceuticals, Inc.	427		1,311

¹Assisted Living Concepts, Inc.	40		1,184

¹Auxilium Pharmaceuticals, Inc.	200		4,700

Baxter International, Inc.	3,000		121,920

Beckman Coulter, Inc.	400		24,116



Becton Dickinson & Co.	1,150	77,763

¹Bio-Rad Laboratories, Inc.	120	10,379

¹Bio-Reference Labs, Inc.	200	4,434

¹Biogen Idec, Inc.	1,400	66,430

¹BioMarin Pharmaceuticals, Inc.	452	8,570

¹Boston Scientific Corp.	7,670	44,486

Bristol-Myers Squibb Co.	8,466	211,142

¹Bruker BioSciences Corp.	400	4,864

C.R. Bard, Inc.	438	33,958

¹Cadence Pharmaceuticals, Inc.	100	701

Cantel Medical Corp.	100	1,670

Cardinal Health, Inc.	1,813	60,935

¹CareFusion Corp.	956	21,701

¹Celera Corp.	260	1,703

¹Celgene Corp.	2,300	116,886

¹Cell Therapeutics, Inc.	2,700	1,013

¹Centene Corp.	260	5,590

¹Cephalon, Inc.	400	22,700

¹Cepheid, Inc.	200	3,204

¹Charles River Laboratories
International, Inc.	338	11,563
Cigna Corp.	1,319	40,968

¹Clinical Data, Inc.	100	1,244

¹Community Health Systems, Inc.	479	16,195

Computer Programs &
Systems, Inc.	100	4,092
¹Conceptus, Inc.	100	1,558

¹CONMED Corp.	100	1,863

Cooper Cos., Inc.	209	8,316

¹Covance, Inc.	355	18,219

¹Coventry Health Care, Inc.	700	12,376

Covidien PLC Common Stock	2,500	100,450

¹Cross Country Healthcare, Inc.	100	899

¹Cubist Pharmaceuticals, Inc.	270	5,562

¹Cyberonics, Inc.	100	2,368

¹Cypress Bioscience, Inc.	200	460

¹DaVita, Inc.	566	35,341

¹Dendreon Corp.	655	21,176

DENTSPLY International, Inc.	660	19,741


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		45


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Health Care (continued)
¹Dexcom, Inc.	200	$	2,312

¹Edwards Lifesciences Corp.	586		32,828

Eli Lilly & Co.	5,100		170,850

¹Emdeon, Inc., Class A	200		2,506

¹Emergency Medical Services
Corp.	200		9,806
¹Emergent Biosolutions, Inc.	100		1,634

¹Emeritus Corp.	100		1,631

¹Endo Pharmaceuticals
Holdings, Inc.	626		13,659
¹Enzo Biochem, Inc.	100		407

¹Enzon Pharmaceuticals, Inc.	300		3,195

¹eResearchTechnology, Inc.	100		788

¹ev3, Inc.	362		8,112

¹Exelixis, Inc.	650		2,255

¹Express Scripts, Inc.	2,640		124,133

¹Forest Laboratories, Inc.	1,486		40,761

¹Furiex Pharmaceuticals, Inc.	42		427

¹Gen-Probe, Inc.	300		13,626

¹Genomic Health, Inc.	100		1,293

¹Genoptix, Inc.	100		1,720

¹Gentiva Health Services, Inc.	100		2,701

¹Genzyme Corp.	1,352		68,641

¹Geron Corp.	300		1,506

¹Gilead Sciences, Inc.	4,500		154,260

¹Haemonetics Corp.	100		5,352

¹Halozyme Therapeutics, Inc.	400		2,816

¹Hanger Orthopedic Group, Inc.	200		3,592

¹Health Management
Associates, Inc.	1,300		10,101
¹Health Net, Inc.	500		12,185

¹HealthExtras, Inc.	200		6,900

¹HEALTHSOUTH Corp.	500		9,355

¹HealthSpring, Inc.	200		3,102

¹Healthways, Inc.	140		1,669




¹Henry Schein, Inc.	464	25,474

Hill-Rom Holdings, Inc.	334	10,164

Hillenbrand, Inc.	334	7,144

¹Hologic, Inc.	1,316	18,332

¹Hospira, Inc.	877	50,384

¹Human Genome Sciences, Inc.	870	19,714

¹Humana, Inc.	815	37,221

¹ICU Medical, Inc.	100	3,217

¹Idexx Laboratories, Inc.	300	18,270

¹Illumina, Inc.	640	27,859

¹Immucor, Inc.	369	7,029

¹Immunogen, Inc.	200	1,854

¹Impax Laboratories, Inc.	200	3,812

¹Incyte Corp.	600	6,642

¹Inspire Pharmaceuticals, Inc.	400	1,996

¹Insulet Corp.	200	3,010

¹Integra LifeSciences Holdings
Corp.	100	3,700
¹InterMune, Inc.	200	1,870

¹Intuitive Surgical, Inc.	188	59,337

Invacare Corp.	100	2,074

¹Inverness Medical Innovations,
Inc.	407	10,851
¹IPC The Hospitalist Co., Inc.	100	2,510

¹Isis Pharmaceuticals, Inc.	400	3,828

Johnson & Johnson	13,651	806,228

¹Kendle International, Inc.	100	1,152

¹Kensey Nash Corp.	100	2,371

¹Kindred Healthcare, Inc.	100	1,284

¹Kinetic Concepts, Inc.	328	11,975

¹King Pharmaceuticals, Inc.	1,260	9,563

¹Laboratory Corp. of America
Holdings	493	37,147
¹LHC Group, Inc.	100	2,775

¹Life Technologies Corp.	895	42,289

¹LifePoint Hospitals, Inc.	314	9,860

¹Ligand Pharmaceuticals, Inc.	700	1,022

¹Lincare Holdings, Inc.	539	17,523

¹Luminex Corp.	200	3,244


46		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Health Care (continued)
¹Magellan Health Services, Inc.	160	$	5,811

¹MannKind Corp.	400		2,556

¹Martek Biosciences Corp.	160		3,794

Masimo Corp.	200		4,762

MAXIMUS, Inc.	100		5,787

McKesson Corp.	1,300		87,308

Mead Johnson Nutrition Co.	1,013		50,772

¹MedCath Corp.	100		786

¹Medco Health Solutions, Inc.	2,330		128,336

¹Medicines Co.	180		1,370

Medicis Pharmaceutical Corp.	270		5,908

¹Medivation, Inc.	100		884

¹Mednax, Inc. Com	300		16,683

Medtronic, Inc.	5,500		199,485

Merck & Co., Inc.	15,129		529,061

Meridian Bioscience, Inc.	150		2,550

¹Merit Medical Systems, Inc.	100		1,607

¹Metabolix, Inc.	100		1,431

¹Micromet, Inc.	200		1,248

¹Millipore Corp.	300		31,995

Mine Safety Appliances Co.	140		3,469

¹Molina Healthcare, Inc.	100		2,880

¹Momenta Pharmaceuticals, Inc.	100		1,226

¹MWI Veterinary Supply, Inc.	100		5,026

¹Mylan Laboratories, Inc.	1,466		24,981

¹Myriad Genetics, Inc.	418		6,249

National Healthcare Corp.	44		1,516

¹Natus Medical, Inc.	100		1,629

¹Nektar Therapeutics	510		6,171

¹Neogen Corp.	150		3,907

¹NPS Pharmaceuticals, Inc.	300		1,932

¹NuVasive, Inc.	200		7,092

¹NxStage Medical, Inc.	100		1,484

¹Odyssey HealthCare, Inc.	200		5,344




Omnicare, Inc.	600	14,220

¹Omnicell, Inc.	100	1,169

¹Onyx Pharmaceuticals, Inc.	250	5,397

¹OraSure Technologies, Inc.	100	463

¹Orthofix International NV	130	4,166

¹Orthovita, Inc.	500	1,015

¹Osiris Therapeutics, Inc.	100	581

Owens & Minor, Inc.	290	8,230

¹Palomar Medical Technologies,
Inc.	35	392
¹Par Pharmaceutical Cos., Inc.	150	3,894

¹Parexel International Corp.	218	4,726

Patterson Cos., Inc.	400	11,412

PDL BioPharma, Inc.	451	2,535

Perrigo Co.	400	23,628

Pfizer, Inc.	39,983	570,158

Pharmaceutical Product
Development, Inc.	506	12,857
¹Pharmasset, Inc.	200	5,468

¹PharMerica Corp.	173	2,536

¹Polypore International, Inc.	100	2,274

¹Progenics Pharmaceuticals, Inc.	100	548

¹Protalix BioTherapeutics, Inc.	200	1,222

¹PSS World Medical, Inc.	300	6,345

¹Psychiatric Solutions, Inc.	300	9,816

Quest Diagnostics, Inc.	801	39,866

¹Questcor Pharmaceuticals, Inc.	300	3,063

¹Quidel Corp.	100	1,269

¹Regeneron Pharmaceuticals, Inc.	290	6,473

¹RehabCare Group, Inc.	100	2,178

¹Res-Care, Inc.	100	966

¹ResMed, Inc.	380	23,108

¹Rigel Pharmaceuticals, Inc.	133	958

¹RTI Biologics, Inc.	200	586

¹Salix Pharmaceuticals Ltd.	280	10,928

¹Sangamo Biosciences, Inc.	100	371

¹Savient Pharmaceuticals, Inc.	400	5,040

¹Seattle Genetics, Inc.	363	4,352

¹Select Medical Holdings Corp.	300	2,034


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		47


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Health Care (continued)
¹Sequenom, Inc.	300	$	1,773

Service Corp. International	1,070		7,918

¹Sirona Dental Systems, Inc.	200		6,968

¹SonoSite, Inc.	100		2,711

¹St Jude Medical, Inc.	1,700		61,353

STERIS Corp.	300		9,324

Stewart Enterprises, Inc.	300		1,623

Stryker Corp.	1,470		73,588

¹Sun Healthcare Group, Inc.	189		1,527

¹Sunrise Senior Living, Inc.	150		417

¹SurModics, Inc.	100		1,641

¹Symmetry Medical, Inc.	100		1,054

¹Talecris Biotherapeutics
Holdings Corp.	300		6,330
¹Targacept, Inc.	100		1,933

Techne Corp.	177		10,169

¹Tenet Healthcare Corp.	2,447		10,620

¹Theravance, Inc.	380		4,777

¹Thoratec Corp.	270		11,537

¹Triple-S Management Corp.	100		1,855

¹United Therapeutics Corp.	318		15,522

UnitedHealth Group, Inc.	5,700		161,880

Universal Health Services, Inc.	422		16,099

¹Valeant Pharmaceuticals
International	411		21,491
¹Varian Medical Systems, Inc.	633		33,093

¹VCA Antech, Inc.	400		9,904

¹Vertex Pharmaceuticals, Inc.	973		32,012

¹Viropharma, Inc.	380		4,260

¹Vivus, Inc.	400		3,840

¹Volcano Corp.	200		4,364

¹Warner Chilcott PLC	500		11,425

¹Watson Pharmaceuticals, Inc.	567		23,003

¹WebMD Health Corp.	300		13,929

¹WellCare Health Plans, Inc.	206		4,890




¹WellPoint, Inc.	2,200	107,646

West Pharmaceutical Services,
Inc.	200	7,298
¹Wright Medical Group, Inc.	200	3,322

¹XenoPort, Inc.	100	981

¹Zimmer Holdings, Inc.	1,051	56,806

¹Zoll Medical Corp.	100	2,710

¹ZymoGenetics, Inc.	100	422


Total Health Care		6,760,771


Industrials–11.6%
¹3D Systems Corp.	100	1,255

3M Co.	3,400	268,566

A.O. Smith Corp.	100	4,819

¹A123 Systems, Inc.	300	2,829

AAON, Inc.	100	2,331

¹AAR Corp.	156	2,611

ABM Industries, Inc.	190	3,981

Accenture PLC	3,117	120,472

Actuant Corp.	378	7,118

Acuity Brands, Inc.	200	7,276

Administaff, Inc.	130	3,141

Advance America Cash
Advance Centers, Inc.	194	801
¹Aecom Technology Corp.	400	9,224

¹Aerovironment, Inc.	100	2,173

¹AGCO Corp.	446	12,029

Aircastle Ltd.	100	785

¹AirTran Holdings, Inc.	700	3,395

¹Alaska Air Group, Inc.	204	9,170

Albany International Corp.	140	2,267

Alexander & Baldwin, Inc.	160	4,765

Allegiant Travel Co.	100	4,269

¹Alliance Data Systems Corp.	286	17,023

¹Alliant Techsystems, Inc.	151	9,371

¹Altisource Portfolio Solutions SA	33	816

¹AMERCO, Inc.	37	2,037

¹American Commercial Lines, Inc.	49	1,103

¹American Public Education, Inc.	100	4,370


48		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Industrials (continued)
American Science &
Engineering, Inc.	50	$	3,811
¹American Superconductor
Corp.	200		5,338
Ametek, Inc.	570		22,885

¹AMR Corp.	1,742		11,811

Apogee Enterprises, Inc.	100		1,083

¹Apollo Group, Inc.	700		29,729

Applied Industrial Technologies,
Inc.	200		5,064
Applied Signal Technology, Inc.	100		1,965

Arbitron, Inc.	100		2,563

¹Argon ST, Inc.	100		3,429

Arkansas Best Corp.	140		2,905

¹Armstrong World Industries,
Inc.	100		3,018
¹Astec Industries, Inc.	100		2,773

¹Atlas Air Worldwide Holdings,
Inc.	146		6,935
Avery Dennison Corp.	500		16,065

AZZ, Inc.	100		3,677

Badger Meter, Inc.	100		3,869

Baldor Electric Co.	200		7,216

¹Bally Technologies, Inc.	305		9,879

Barnes Group, Inc.	200		3,278

¹BE Aerospace, Inc.	487		12,384

Belden CDT, Inc.	180		3,960

¹Blount International, Inc.	100		1,027

Boeing Co.	3,361		210,903

Bowne & Co., Inc.	102		1,144

Brady Corp.	253		6,305

¹Bridgepoint Education, Inc.	100		1,581

Briggs & Stratton Corp.	170		2,893

Brink’s Co.	182		3,463

¹Bristow Group, Inc.	200		5,880

Bucyrus International, Inc.	390		18,505



C.H. Robinson Worldwide, Inc.	851	47,367

¹Cal Dive International, Inc.	362	2,118

¹Capella Education Co.	50	4,068

¹Capstone Turbine Corp.	1,100	1,078

¹Career Education Corp.	389	8,955

Carlisle Cos., Inc.	336	12,140

Cascade Corp.	37	1,318

Caterpillar, Inc.	3,076	184,775

CDI Corp.	100	1,553

¹Cenveo, Inc.	211	1,156

¹Ceradyne, Inc.	77	1,645

¹Chart Industries, Inc.	100	1,558

Chemed Corp.	140	7,650

Cintas Corp.	713	17,091

CIRCOR International, Inc.	100	2,558

CLARCOR, Inc.	263	9,342

¹Clean Harbors, Inc.	100	6,641

¹Cogent, Inc.	260	2,343

¹Coinstar, Inc.	170	7,305

¹Colfax Corp.	100	1,041

¹Columbus McKinnon Corp.	100	1,397

Comfort Systems USA, Inc.	200	1,932

Con-way, Inc.	300	9,006

¹Consolidated Graphics, Inc.	55	2,378

¹Continental Airlines, Inc.	700	15,400

¹Convergys Corp.	570	5,592

Cooper Industries PLC	852	37,488

¹Corinthian Colleges, Inc.	400	3,940

¹Cornell Cos, Inc.	100	2,687

Corporate Executive Board Co.	134	3,520

¹CoStar Group, Inc.	138	5,354

¹Covanta Holding Corp.	742	12,310

¹CRA International, Inc.	100	1,883

Crane Co.	270	8,157

¹CSG Systems International, Inc.	170	3,116

CSX Corp.	1,900	94,297

Cubic Corp.	100	3,638

Cummins, Inc.	1,000	65,130

Curtiss-Wright Corp.	180	5,227


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		49


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Industrials (continued)
Danaher Corp.	2,788	$	103,491

¹Darling International, Inc.	400		3,004

Deere & Co.	2,100		116,928

¹Delta Air Lines, Inc.	3,800		44,650

Deluxe Corp.	210		3,938

DeVry, Inc.	370		19,421

¹DigitalGlobe, Inc.	100		2,630

¹Dionex Corp.	70		5,212

¹Dollar Financial Corp.	100		1,979

¹Dollar Thrifty Automotive
Group, Inc.	100		4,261
Donaldson Co., Inc.	359		15,311

Dover Corp.	900		37,611

¹Drew Industries, Inc.	100		2,020

DST Systems, Inc.	170		6,144

Dun & Bradstreet Corp.	244		16,377

¹Dycom Industries, Inc.	170		1,454

Dynamic Materials Corp.	100		1,604

¹DynCorp International, Inc.	100		1,752

¹Eagle Bulk Shipping, Inc.	187		789

Eaton Corp.	752		49,211

¹EMCOR Group, Inc.	354		8,202

Emerson Electric Co.	3,700		161,653

Encore Wire Corp.	100		1,819

¹Ener1, Inc.	300		1,014

¹Energizer Holdings, Inc.	300		15,084

¹Energy Conversion Devices,
Inc.	200		820
EnergySolutions, Inc.	300		1,527

¹EnerSys	300		6,411

Ennis, Inc.	100		1,501

¹EnPro Industries, Inc.	100		2,815

Equifax, Inc.	650		18,239

ESCO Technologies, Inc.	100		2,575

¹Esterline Technologies Corp.	200		9,490



¹Evergreen Solar, Inc.	400	273

Expeditors International
Washington, Inc.	1,072	36,995
FactSet Research Systems, Inc.	215	14,403

Fastenal Co.	681	34,179

FedEx Corp.	1,500	105,165

¹Fiserv, Inc.	751	34,291

Flowserve Corp.	300	25,440

Fluor Corp.	892	37,910

¹Force Protection, Inc.	300	1,230

Forward Air Corp.	150	4,087

¹Foster Wheeler AG	658	13,857

Franklin Electric Co., Inc.	136	3,920

FreightCar America, Inc.	40	905

¹FTI Consulting, Inc.	260	11,333

¹Fuel Tech, Inc.	100	632

¹FuelCell Energy, Inc.	200	236

G&K Services, Inc.	56	1,156

Gardner Denver, Inc.	280	12,485

GATX Corp.	175	4,669

¹Genco Shipping & Trading Ltd.	100	1,499

¹GenCorp, Inc.	100	438

¹General Cable Corp.	226	6,023

General Dynamics Corp.	1,653	96,800

General Electric Co.	52,800	761,376

General Maritime Corp.	587	3,545

¹Genesee & Wyoming, Inc.	200	7,462

¹Genpact Ltd.	500	7,765

Genuine Parts Co.	829	32,704

¹Geo Group, Inc.	224	4,648

¹Global Cash Access Holdings,
Inc.	100	721
Global Payments, Inc.	400	14,616

Goodrich Corp.	596	39,485

Gorman-Rupp Co.	100	2,505

Graco, Inc.	300	8,457

Granite Construction, Inc.	177	4,174

Great Lakes Dredge & Dock
Corp.	400	2,400
¹Griffon Corp.	163	1,803


50		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Industrials (continued)
¹Gulfmark Offshore, Inc.	100	$	2,620

¹H&E Equipment Services, Inc.	100		749

H&R Block, Inc.	1,600		25,104

¹Harbin Electric, Inc.	100		1,665

Harsco Corp.	380		8,930

¹Hawaiian Holdings, Inc.	400		2,068

¹Headwaters, Inc.	100		284

Healthcare Services Group	150		2,843

Heartland Express, Inc.	320		4,646

Heartland Payment Systems,
Inc.	100		1,484
Heico Corp.	125		3,369

Heidrick & Struggles
International, Inc.	100		2,282
Herman Miller, Inc.	248		4,680

¹Hewitt Associates, Inc.	443		15,266

¹Hexcel Corp.	536		8,313

¹Hill International, Inc.	100		406

¹HMS Holdings Corp.	204		11,061

Honeywell International, Inc.	3,600		140,508

Horizon Lines, Inc.	100		423

¹HUB Group, Inc.	158		4,742

Hubbell, Inc.	316		12,542

¹Huron Consulting Group, Inc.	80		1,553

¹ICF International, Inc.	100		2,393

¹Iconix Brand Group, Inc.	400		5,748

IDEX Corp.	378		10,799

¹II-VI, Inc.	100		2,963

Illinois Tool Works, Inc.	2,100		86,688

¹Infinera Corp.	400		2,572

Ingersoll Rand PLC Common
Stock	1,567		54,046
¹Insituform Technologies, Inc.	200		4,096

¹Intermec, Inc.	198		2,030

¹IPG Photonics Corp.	200		3,046

¹iRobot Corp.	100		1,879



Iron Mountain, Inc.	882	19,810

¹ITT Educational Services, Inc.	175	14,528

ITT Industries, Inc.	850	38,182

J.B. Hunt Transport Services,
Inc.	475	15,518
¹Jacobs Engineering Group, Inc.	640	23,322

¹JetBlue Airways Corp.	1,050	5,764

John Bean Technologies Corp.	200	3,050

Joy Global, Inc.	527	26,397

Kaman Corp.	100	2,212

¹Kansas City Southern	500	18,175

Kaydon Corp.	200	6,572

KBR, Inc.	780	15,865

¹Kelly Services, Inc.	100	1,487

¹Kenexa Corp.	100	1,200

Kennametal, Inc.	368	9,358

¹Kforce, Inc.	100	1,275

¹Kirby Corp.	280	10,710

Knight Transportation, Inc.	280	5,667

Koppers Holdings, Inc.	100	2,248

¹Korn/Ferry International	180	2,502

L-3 Communications Holdings,
Inc.	635	44,983
¹Ladish Co., Inc.	71	1,613

Landauer, Inc.	100	6,088

Landstar System, Inc.	300	11,697

¹Layne Christensen Co.	100	2,427

¹LB Foster Co.	100	2,592

Lennox International, Inc.	200	8,314

Lincoln Electric Holdings, Inc.	200	10,198

Lindsay Corp.	55	1,743

Lockheed Martin Corp.	1,544	115,028

Manitowoc Co., Inc.	735	6,718

Manpower, Inc.	400	17,272

¹Marten Transport Ltd.	100	2,078

Masco Corp.	1,658	17,840

¹MasTec, Inc.	200	1,880

Mastercard, Inc.	487	97,171

¹McDermott International, Inc.	1,118	24,216

McGrath RentCorp	100	2,278


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		51


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Industrials (continued)
¹Michael Baker Corp.	59	$	2,059

¹Middleby Corp.	65		3,457

¹Mobile Mini, Inc.	181		2,947

Molex, Inc.	280		4,326

¹Monster Worldwide, Inc.	546		6,361

¹Moog, Inc.	170		5,479

MSC Industrial Direct Co.	200		10,132

Mueller Industries, Inc.	160		3,936

Mueller Water Products, Inc.	943		3,499

¹MYR Group, Inc.	100		1,669

NACCO Industries, Inc.	21		1,864

¹Navigant Consulting, Inc.	170		1,765

¹Navistar International Corp.	300		14,760

Nordson Corp.	150		8,412

Norfolk Southern Corp.	1,800		95,490

Northrop Grumman Corp.	1,400		76,216

¹Old Dominion Freight Line	100		3,514

¹Orbital Sciences Corp.	261		4,116

¹Orion Marine Group, Inc.	100		1,420

¹Oshkosh Truck Corp.	435		13,555

Overseas Shipholding Group	200		7,408

¹Owens Corning, Inc.	600		17,946

PACCAR, Inc.	1,600		63,792

¹Pacer International, Inc.	70		489

Pall Corp.	629		21,619

Parker Hannifin Corp.	830		46,032

Pentair, Inc.	489		15,746

¹PHH Corp.	270		5,141

¹PHI, Inc.	100		1,409

Pitney Bowes, Inc.	977		21,455

¹Powell Industries, Inc.	100		2,734

Precision Castparts Corp.	700		72,044

Quanex Building Products
Corp.	145		2,507
¹Quanta Services, Inc.	1,042		21,517



Raven Industries, Inc.	100	3,371

Raytheon Co.	1,900	91,941

¹RBC Bearings, Inc.	100	2,899

Regal-Beloit Corp.	160	8,925

Reliance Steel & Aluminum Co.	373	13,484

¹Republic Airways Holdings, Inc.	100	611

Republic Services, Inc.	1,850	55,000

¹Resources Connection, Inc.	160	2,176

Reynolds American, Inc.	843	43,937

Robbins & Myers, Inc.	100	2,174

Robert Half International, Inc.	729	17,168

Rockwell Automation, Inc.	690	33,872

Rockwell Collins, Inc.	793	42,132

Rollins, Inc.	150	3,104

RR Donnelley & Sons Co.	948	15,519

¹RSC Holdings, Inc.	200	1,234

Ryder System, Inc.	231	9,293

¹Sanmina-SCI Corp.	453	6,165

¹Sensata Technologies Holding
NV	200	3,198
¹SFN Group, Inc.	200	1,092

¹Shaw Group, Inc.	381	13,038

Simpson Manufacturing Co., Inc.	160	3,928

SkyWest, Inc.	242	2,957

Sotheby’s Holdings	300	6,861

Southwest Airlines Co.	3,575	39,718

¹Spirit Aerosystems Holdings, Inc.	487	9,282

SPX Corp.	300	15,843

Standex International Corp.	100	2,535

Steelcase, Inc.	530	4,107

¹Stericycle, Inc.	400	26,232

¹Sterling Construction Co., Inc.	100	1,294

Strayer Education, Inc.	73	15,176

Sun Hydraulics Corp.	100	2,346

¹SunPower Corp.	290	3,509

¹Sunpower Corp.	174	1,879

TAL International Group, Inc.	100	2,247

¹Team, Inc.	100	1,305

¹Tecumseh Products Co.	100	1,112


52		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Industrials (continued)
Teleflex, Inc.	186	$	10,096

¹TeleTech Holdings, Inc.	109		1,405

Tennant Co.	100		3,382

¹Terex Corp.	554		10,382

¹Tetra Tech, Inc.	300		5,883

Textron, Inc.	1,322		22,434

¹Thomas & Betts Corp.	270		9,369

Timken Co.	390		10,136

Titan International, Inc.	148		1,476

Total System Services, Inc.	767		10,431

TransDigm Group, Inc.	300		15,309

Tredegar Corp.	100		1,632

¹Trex Co., Inc.	100		2,009

Trinity Industries, Inc.	400		7,088

Triumph Group, Inc.	145		9,661

¹TrueBlue, Inc.	170		1,902

Tyco International Ltd.	2,500		88,075

¹UAL Corp.	916		18,833

Union Pacific Corp.	2,545		176,903

United Parcel Service, Inc.	3,500		199,115

¹United Stationers, Inc.	100		5,447

United Technologies Corp.	4,400		285,604

Universal Forest Products, Inc.	140		4,243

¹Universal Technical Institute,
Inc.	100		2,364
¹URS Corp.	400		15,740

¹US Airways Group, Inc.	1,020		8,782

US Ecology, Inc.	100		1,457

¹USG Corp.	256		3,092

UTi Worldwide, Inc.	400		4,952

¹Valassis Communications, Inc.	200		6,344

Valmont Industries, Inc.	168		12,207

¹Verisk Analytics, Inc., Class A	500		14,950

Viad Corp.	57		1,006

W.W. Grainger, Inc.	289		28,741



¹Waste Connections, Inc.	430	15,003

Waste Management, Inc.	2,230	69,777

¹Waste Services, Inc.	100	1,166

Watsco, Inc.	100	5,792

Watts Water Technologies, Inc.	191	5,474

Weight Watchers International,
Inc.	209	5,369
Werner Enterprises, Inc.	180	3,940

Woodward Governor Co.	300	7,659

World Fuel Services Corp.	280	7,263

¹Wright Express Corp.	210	6,237

¹YRC Worldwide, Inc.	200	30

Total Industrials		6,769,429


Information Technology–17.3%
¹3PAR, Inc.	200	1,862

¹ACI Worldwide, Inc.	200	3,894

¹Acme Packet, Inc.	100	2,688

¹Actel Corp.	100	1,282

Activision Blizzard, Inc.	2,800	29,372

¹Acxiom Corp.	400	5,876

Adaptec, Inc.	600	1,734

¹ADC Telecommunications, Inc.	498	3,690

¹Adobe Systems, Inc.	2,600	68,718

ADTRAN, Inc.	280	7,636

¹Advanced Energy Industries, Inc.	100	1,229

¹Advanced Micro Devices, Inc.	2,652	19,413

¹Advent Software, Inc.	100	4,696

¹Agilent Technologies, Inc.	1,700	48,331

¹Akamai Technologies, Inc.	891	36,148

¹Allscripts Healthcare Solutions,
Inc.	400	6,440
Altera Corp.	1,500	37,215

¹American Reprographics Co.	104	908

¹Amkor Technology, Inc.	336	1,851

Amphenol Corp.	900	35,352

¹Anadigics, Inc.	200	872

Analog Devices, Inc.	1,498	41,734

Analogic Corp.	37	1,684

¹Anixter International, Inc.	200	8,520


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		53


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Information Technology (continued)
¹Ansys, Inc.	443	$	17,973

¹AOL, Inc.	500		10,395

¹Apple Computer, Inc.	4,486		1,128,364

Applied Materials, Inc.	6,700		80,534

¹Applied Micro Circuits Corp.	237		2,484

¹ArcSight, Inc.	100		2,239

¹Ariba, Inc.	500		7,965

¹Arris Group, Inc.	642		6,542

¹Arrow Electronics, Inc.	530		11,845

¹Art Technology Group, Inc.	600		2,052

¹AsiaInfo Holdings, Inc.	200		4,372

¹athenahealth, Inc.	100		2,613

¹Atheros Communications, Inc.	298		8,207

¹Atmel Corp.	2,400		11,520

¹ATMI, Inc.	100		1,464

¹Autodesk, Inc.	1,147		27,941

Automatic Data Processing,
Inc.	2,500		100,650
¹Avago Technologies Ltd.	500		10,530

¹Aviat Networks, Inc.	447		1,623

¹Avid Technology, Inc.	150		1,909

¹Avnet, Inc.	760		18,324

AVX Corp.	310		3,974

¹Benchmark Electronics, Inc.	390		6,181

Black Box Corp.	130		3,626

Blackbaud, Inc.	194		4,223

¹Blackboard, Inc.	200		7,466

¹Blue Coat Systems, Inc.	200		4,086

¹BMC Software, Inc.	940		32,552

¹Bottomline Technologies, Inc.	100		1,303

Broadcom Corp.	2,215		73,029

¹Brooks Automation, Inc.	130		1,005

CA, Inc.	2,000		36,800

¹Cabot Microelectronics Corp.	100		3,459

¹CACI International, Inc.	210		8,921



¹Cadence Design Systems, Inc.	1,100	6,369

¹Cavium Networks, Inc.	200	5,238

¹Cerner Corp.	327	24,816

¹Checkpoint Systems, Inc.	160	2,778

¹China Security & Surveillance
Technology, Inc.	200	924
¹Ciber, Inc.	200	554

¹Ciena Corp.	474	6,010

¹Cirrus Logic, Inc.	300	4,743

¹Cisco Systems, Inc.	28,378	604,735

¹Citrix Systems, Inc.	970	40,963

¹Cogent Communications Group,
Inc.	100	758
Cognex Corp.	170	2,989

¹Cognizant Technology
Solutions Corp.	1,454	72,787
¹Cogo Group, Inc.	100	624

¹Coherent, Inc.	100	3,430

Cohu, Inc.	100	1,213

¹CommScope, Inc.	500	11,885

¹Commvault Systems, Inc.	200	4,500

¹Compellent Technologies, Inc.	100	1,212

Computer Sciences Corp.	800	36,200

¹Compuware Corp.	1,100	8,778

¹comScore, Inc.	100	1,647

¹Comtech Telecommunications
Corp.	162	4,849
¹Concur Technologies, Inc.	200	8,536

¹Conexant Systems, Inc.	66	148

¹Constant Contact, Inc.	100	2,133

CoreLogic, Inc.	465	8,212

Corning, Inc.	7,675	123,951

¹Cree, Inc.	490	29,415

CTS Corp.	100	924

¹Cybersource Corp.	400	10,212

¹Cymer, Inc.	150	4,506

¹Cypress Semiconductor Corp.	636	6,385

Daktronics, Inc.	100	750

¹DealerTrack Holdings, Inc.	200	3,290

¹Dell, Inc.	8,700	104,922


54		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Information Technology (continued)
Diebold, Inc.	355	$	9,674

¹Digital River, Inc.	189		4,519

¹Diodes, Inc.	144		2,285

¹DSP Group, Inc.	100		639

Earthlink, Inc.	390		3,104

¹eBay, Inc.	5,700		111,777

¹Ebix, Inc.	100		1,568

¹Echelon Corp.	100		733

¹Eclipsys Corp.	280		4,995

¹Electro Scientific Industries,
Inc.	100		1,336
¹Electronic Arts, Inc.	1,700		24,480

¹Electronics for Imaging, Inc.	170		1,658

¹EMC Corp.	10,100		184,830

¹Emulex Corp.	400		3,672

¹Entegris, Inc.	600		2,382

¹Epicor Software Corp.	100		799

¹EPIQ Systems, Inc.	100		1,293

¹Equinix, Inc.	219		17,787

¹Exar Corp.	100		693

¹Exponent, Inc.	100		3,272

¹Extreme Networks	209		564

¹F5 Networks, Inc.	416		28,525

Fair Isaac Corp.	178		3,879

¹Fairchild Semiconductor
International, Inc.	670		5,635
¹FARO Technologies, Inc.	72		1,347

¹FEI Co.	200		3,942

¹First Solar, Inc.	264		30,051

¹Flextronics International Ltd.	3,900		21,840

¹Flir Systems, Inc.	780		22,690

¹FormFactor, Inc.	260		2,808

¹Forrester Research, Inc.	100		3,026

¹Gartner, Inc.	410		9,532

¹Google, Inc.	1,208		537,500



¹Greatbatch, Inc.	100	2,231

¹GT Solar International, Inc.	300	1,680

¹Harmonic, Inc.	300	1,632

Harris Corp.	695	28,947

Hewlett-Packard Co.	11,600	502,048

¹Hittite Microwave Corp.	100	4,474

¹IAC	541	11,886

iGate Corp.	100	1,282

¹IHS, Inc.	261	15,248

¹Imation Corp.	100	919

¹infoGROUP, Inc.	200	1,596

¹Informatica Corp.	420	10,030

¹Infospace, Inc.	50	376

¹Ingram Micro, Inc.	760	11,544

¹Innerworkings, Inc.	100	683

¹Integral Systems, Inc.	100	635

¹Integrated Device Technology,
Inc.	604	2,990
Intel Corp.	27,369	532,327

¹Interactive Intelligence, Inc.	100	1,643

¹InterDigital Communications, Inc.	200	4,938

¹InterNAP Network Services
Corp.	100	417
International Business Machines
Corp.	6,429	793,853
¹International Rectifier Corp.	280	5,211

¹Internet Capital Group, Inc.	200	1,520

Intersil Corp.	670	8,114

¹Intevac, Inc.	200	2,134

¹Intuit, Inc.	1,483	51,564

¹Isilon Systems, Inc.	100	1,284

¹Itron, Inc.	237	14,651

¹Ixia	100	859

¹j2 Global Communications, Inc.	160	3,494

Jabil Circuit, Inc.	908	12,076

Jack Henry & Associates, Inc.	346	8,262

¹JDA Software Group, Inc.	225	4,945

¹Juniper Networks, Inc.	2,600	59,332

¹K12, Inc.	100	2,218


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		55


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Information Technology (continued)

KLA-Tencor Corp.	873	$	24,339

¹Knot, Inc.	100		778

¹Kopin Corp.	300		1,017

¹Kulicke & Soffa Industries, Inc.	200		1,404

¹L-1 Identity Solutions, Inc.	300		2,457

¹Lam Research Corp.	659		25,082

¹Lattice Semiconductor Corp.	300		1,302

¹Lawson Software, Inc.	800		5,840

Lender Processing Services,
Inc.	454		14,215
¹Lexmark International, Inc.	440		14,533

Linear Technology Corp.	1,104		30,702

¹Littelfuse, Inc.	83		2,624

¹LogMeIn, Inc.	100		2,623

¹LoopNet, Inc.	100		1,233

¹LSI Logic Corp.	3,120		14,352

¹Manhattan Associates, Inc.	100		2,755

¹ManTech International Corp.	100		4,257

MarketAxess Holdings, Inc.	100		1,379

¹Marvell Technology Group Ltd.	2,600		40,976

¹Mattson Technology, Inc.	200		758

Maxim Integrated Products, Inc.	1,600		26,768

¹Maxwell Technologies, Inc.	200		2,280

¹McAfee, Inc.	780		23,962

¹MedAssets, Inc.	300		6,924

¹MEMC Electronic Materials,
Inc.	1,029		10,167
¹Mentor Graphics Corp.	600		5,310

¹MercadoLibre, Inc.	200		10,510

Methode Electronics, Inc.	100		974

¹Mettler Toledo International,
Inc.	157		17,526
Micrel, Inc.	208		2,117

Microchip Technology, Inc.	900		24,966

¹Micron Technology, Inc.	4,300		36,507



¹MICROS Systems, Inc.	384	12,238

¹Microsemi Corp.	380	5,559

Microsoft Corp.	39,060	898,771

¹MicroStrategy, Inc.	20	1,502

¹MKS Instruments, Inc.	233	4,362

¹ModusLink Global Solutions, Inc.	150	905

Molex, Inc.	291	5,308

¹Monolithic Power Systems, Inc.	100	1,786

¹Motorola, Inc.	11,562	75,384

MTS Systems Corp.	100	2,900

National Instruments Corp.	300	9,534

National Semiconductor Corp.	1,199	16,139

¹NCR Corp.	700	8,484

¹Ness Technologies, Inc.	200	862

¹Net 1 UEPS Technologies, Inc.	200	2,682

¹NetApp, Inc.	1,671	62,345

¹Netezza Corp.	300	4,104

¹NetGear, Inc.	100	1,784

¹Netlogic Microsystems, Inc.	300	8,160

¹Netscout Systems, Inc.	200	2,844

¹NetSuite, Inc.	100	1,264

¹Newport Corp.	100	906

NIC, Inc.	200	1,282

¹Novatel Wireless, Inc.	100	574

¹Novell, Inc.	1,720	9,770

¹Novellus Systems, Inc.	494	12,528

¹Nuance Communications, Inc.	1,090	16,295

¹NVIDIA Corp.	2,700	27,567

¹Oclaro, Inc.	200	2,218

¹OmniVision Technologies, Inc.	280	6,003

¹ON Semiconductor Corp.	1,930	12,313

¹OpenTable, Inc.	100	4,147

¹Oplink Communications, Inc.	100	1,433

Oracle Corp.	19,900	427,054

¹OSI Systems, Inc.	100	2,777

¹Palm, Inc.	800	4,552

¹Parametric Technology Corp.	600	9,402

Park Electrochemical Corp.	100	2,441


56		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Information Technology (continued)
Paychex, Inc.	1,621	$	42,097

Pegasystems, Inc.	100		3,211

¹Perficient, Inc.	100		891

¹Pericom Semiconductor Corp.	100		960

PerkinElmer, Inc.	537		11,100

¹Phase Forward, Inc.	200		3,336

Plantronics, Inc.	260		7,436

¹Plexus Corp.	170		4,546

¹PMC-Sierra, Inc.	1,300		9,776

¹Polycom, Inc.	430		12,810

Power Integrations, Inc.	100		3,219

¹Power-One, Inc.	500		3,375

¹Powerwave Technologies, Inc.	330		508

¹Progress Software Corp.	170		5,105

¹QLogic Corp.	500		8,310

QUALCOMM, Inc.	8,356		274,411

Quality Systems, Inc.	149		8,641

¹Quantum Corp.	800		1,504

¹Quest Software, Inc.	300		5,412

¹Rackspace Hosting, Inc.	400		7,336

¹Radiant Systems, Inc.	100		1,446

¹Rambus, Inc.	496		8,690

¹RealNetworks, Inc.	180		594

¹Red Hat, Inc.	909		26,306

¹RF Micro Devices, Inc.	1,000		3,910

¹RightNow Technologies, Inc.	100		1,569

¹Riverbed Technology, Inc.	300		8,286

¹Rofin-Sinar Technologies, Inc.	120		2,498

¹Rogers Corp.	56		1,555

Roper Industries, Inc.	466		26,077

¹Rovi Corp.	521		19,751

¹Rubicon Technology, Inc.	100		2,979

¹Rudolph Technologies, Inc.	100		755

¹S1 Corp.	200		1,202



¹SAIC, Inc.	1,900	31,806

¹salesforce.com, Inc.	550	47,201

¹SanDisk Corp.	1,100	46,277

Sapient Corp.	500	5,070

¹ScanSource, Inc.	100	2,493

¹Seachange International, Inc.	200	1,646

¹Seagate Technology	2,388	31,140

¹Semtech Corp.	410	6,712

¹ShoreTel, Inc.	300	1,392

¹Shutterfly, Inc.	100	2,396

¹Sigma Designs, Inc.	100	1,001

¹Silicon Graphics International
Corp.	110	779
¹Silicon Image, Inc.	200	702

¹Silicon Laboratories, Inc.	250	10,140

¹Skyworks Solutions, Inc.	833	13,986

¹SMART Modular Technologies
WWH, Inc.	200	1,170
¹Smith Micro Software, Inc.	100	951

¹Sohu.com, Inc.	200	8,218

¹Solarwinds, Inc.	100	1,604

Solera Holdings, Inc.	400	14,480

¹SonicWALL, Inc.	300	3,525

¹Sonus Networks, Inc.	1,600	4,336

¹Sourcefire, Inc.	100	1,900

¹SRA International, Inc.	150	2,950

¹Standard Microsystems Corp.	100	2,328

¹Stanley, Inc.	100	3,738

¹STEC, Inc.	200	2,512

¹Stratasys, Inc.	100	2,456

¹SuccessFactors, Inc.	300	6,237

¹Super Micro Computer, Inc.	200	2,700

¹Supertex, Inc.	100	2,466

¹Sybase, Inc.	378	24,441

Sycamore Networks, Inc.	106	1,762

¹SYKES Enterprises, Inc.	200	2,846

¹Symantec Corp.	4,000	55,520

¹Symmetricom, Inc.	200	1,018

¹Synaptics, Inc.	150	4,125


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT	��	57


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Information Technology (continued)
¹Synchronoss Technologies, Inc.	87	$	1,650

¹SYNNEX Corp.	100		2,562

¹Synopsys, Inc.	742		15,486

Syntel, Inc.	100		3,395

¹Take-Two Interactive Software,
Inc.	285		2,565
¹Taleo Corp.	200		4,858

¹Taser International, Inc.	200		780

¹Tech Data Corp.	280		9,974

Technitrol, Inc.	100		316

¹Tekelec	300		3,972

¹TeleCommunication Systems,
Inc.	240		994
¹Teledyne Technologies, Inc.	150		5,787

Tellabs, Inc.	1,593		10,179

¹Teradata Corp.	826		25,176

¹Teradyne, Inc.	1,000		9,750

¹Terremark Worldwide, Inc.	200		1,562

¹Tessera Technologies, Inc.	260		4,173

Texas Instruments, Inc.	6,100		142,008

¹Thermo Electron Corp.	2,016		98,885

¹THQ, Inc.	180		778

¹TIBCO Software, Inc.	850		10,251

¹TNS, Inc.	100		1,744

¹TradeStation Group, Inc.	300		2,025

¹Trident Microsystems, Inc.	180		256

¹Trimble Navigation Ltd.	584		16,352

¹Triquint Semiconductor, Inc.	600		3,666

¹TTM Technologies, Inc.	200		1,900

Tyco Electronics Ltd.	2,299		58,349

¹Tyler Technologies, Inc.	100		1,552

¹Ultimate Software Group, Inc.	100		3,286

¹Ultratech, Inc.	200		3,254

¹Unisys Corp.	167		3,088

United Online, Inc.	300		1,728



¹Universal Display Corp.	100	1,798

¹UTStarcom, Inc.	180	331

¹ValueClick, Inc.	312	3,335

¹Varian Semiconductor
Equipment Associates, Inc.	362	10,375
¹Vasco Data Security
International, Inc.	100	617
¹Veeco Instruments, Inc.	200	6,856

¹VeriFone Holdings, Inc.	460	8,708

¹Verigy Ltd.	200	1,738

¹VeriSign, Inc.	910	24,160

¹Viasat, Inc.	200	6,512

¹Vishay Intertechnology, Inc.	1,010	7,817

¹VistaPrint NV	200	9,498

¹VMware, Inc.	300	18,777

¹Vocus, Inc.	100	1,528

¹Volterra Semiconductor Corp.	200	4,612

¹Waters Corp.	445	28,791

¹Websense, Inc.	160	3,024

¹Western Digital Corp.	1,103	33,266

Xerox Corp.	6,494	52,212

Xilinx, Inc.	1,388	35,061

¹Yahoo!, Inc.	6,487	89,715

¹Zebra Technologies Corp.	285	7,230

¹Zoran Corp.	152	1,450

Total Information Technology		10,040,734


Materials–3.9%
¹A.M. Castle & Co.	100	1,389

Air Products & Chemicals, Inc.	1,072	69,476

Airgas, Inc.	357	22,205

AK Steel Holding Corp.	590	7,033

Albemarle Corp.	400	15,884

Alcoa, Inc.	5,100	51,306

Allegheny Technologies, Inc.	500	22,095

¹Allied Nevada Gold Corp.	300	5,904

¹Alpha Natural Resources, Inc.	629	21,304

AMCOL International Corp.	100	2,350

American Vanguard Corp.	100	793

Ameron International Corp.	33	1,991


58		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Materials (continued)
AptarGroup, Inc.	339	$	12,821

Arch Chemicals, Inc.	100		3,074

Arch Coal, Inc.	734		14,541

Ashland, Inc.	380		17,640

Balchem Corp.	150		3,750

Ball Corp.	436		23,034

Bemis Co.	530		14,310

¹Boise, Inc.	300		1,647

¹Brush Engineered Materials,
Inc.	100		1,998
¹Buckeye Technologies, Inc.	200		1,990

Cabot Corp.	335		8,077

¹Calgon Carbon Corp.	194		2,569

Carpenter Technology Corp.	200		6,566

Celanese Corp.	748		18,633

¹Century Aluminum Co.	200		1,766

CF Industries Holdings, Inc.	389		24,682

¹Clearwater Paper Corp.	51		2,793

Cliffs Natural Resources, Inc.	640		30,182

¹Coeur d’Alene Mines Corp.	462		7,290

Commercial Metals Co.	620		8,196

Compass Diversified Holdings	200		2,682

Compass Minerals International,
Inc.	225		15,813
Consol Energy, Inc.	1,075		36,292

¹Crown Holdings, Inc.	787		19,706

Cytec Industries, Inc.	238		9,518

Deltic Timber Corp.	100		4,180

Domtar Corp.	200		9,830

Dow Chemical Co.	5,700		135,204

Eagle Materials, Inc.	234		6,068

Eastman Chemical Co.	356		18,996

Ecolab, Inc.	1,165		52,320

EI Du Pont de Nemours & Co.	4,500		155,655

¹Ferro Corp.	500		3,685



FMC Corp.	400	22,972

Freeport-McMoRan Copper &
Gold, Inc.	2,149	127,070
¹General Moly, Inc.	300	924

¹Georgia Gulf Corp.	200	2,668

¹Gibraltar Industries, Inc.	100	1,010

¹Globe Specialty Metals, Inc.	300	3,099

¹GrafTech International Ltd.	600	8,772

¹Graphic Packaging Holding Co.	300	945

Greif, Inc.	96	5,332

Haynes International, Inc.	50	1,542

HB Fuller Co.	238	4,520

¹Hecla Mining Co.	1,000	5,220

¹Horsehead Holding Corp.	200	1,512

Huntsman Corp.	891	7,725

Innophos Holdings, Inc.	100	2,608

¹Innospec, Inc.	94	882

¹International Coal Group, Inc.	400	1,540

International Flavors &
Fragrances, Inc.	395	16,756
International Paper Co.	2,067	46,776

¹Intrepid Potash, Inc.	200	3,914

¹James River Coal Co.	100	1,592

Jarden Corp.	482	12,951

Kaiser Aluminum Corp.	50	1,734

¹KapStone Paper and Packaging
Corp.	200	2,228
¹Louisiana-Pacific Corp.	730	4,884

¹LSB Industries, Inc.	100	1,331

Lubrizol Corp.	326	26,181

Martin Marietta Materials, Inc.	287	24,340

Massey Energy Co.	500	13,675

MeadWestvaco Corp.	805	17,871

Minerals Technologies, Inc.	78	3,708

Monsanto Co.	2,682	123,962

Mosaic Co.	760	29,625

Myers Industries, Inc.	100	809

Neenah Paper, Inc.	100	1,830

NewMarket Corp.	60	5,239

Newmont Mining Corp.	2,400	148,176


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		59


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Materials (continued)
¹Northwest Pipe Co.	100	$	1,900

Nucor Corp.	1,556		59,564

Olin Corp.	400		7,236

Olympic Steel, Inc.	100		2,297

¹OM Group, Inc.	106		2,529

¹Owens-Illinois, Inc.	871		23,038

P.H. Glatfelter Co.	300		3,255

Packaging Corp. of America	500		11,010

¹Pactiv Corp.	600		16,710

¹Patriot Coal Corp.	400		4,700

Peabody Energy Corp.	1,363		53,334

¹PolyOne Corp.	300		2,526

²Potlatch Corp.	181		6,467

PPG Industries, Inc.	790		47,724

Praxair, Inc.	1,557		118,316

²Rayonier, Inc.	400		17,608

Rock-Tenn Co.	200		9,934

¹Rockwood Holdings, Inc.	200		4,538

Royal Gold, Inc.	249		11,952

RPM International, Inc.	600		10,704

¹RTI International Metals, Inc.	88		2,122

Schnitzer Steel Industries, Inc.	100		3,920

Schulman (A.), Inc.	100		1,896

Scotts Miracle-Gro Co.	206		9,148

Sealed Air Corp.	782		15,421

Sigma-Aldrich Corp.	594		29,599

Silgan Holdings, Inc.	300		8,514

¹Solutia, Inc.	500		6,550

Sonoco Products Co.	530		16,154

¹Spartech Corp.	86		882

Steel Dynamics, Inc.	900		11,871

Stepan Co.	100		6,843

¹Stillwater Mining Co.	300		3,486

¹STR Holdings, Inc.	100		1,880



¹Symyx Technologies	60	301

Temple-Inland, Inc.	600	12,402

Texas Industries, Inc.	163	4,815

¹Titanium Metals Corp.	407	7,159

United States Steel Corp.	728	28,064

¹USEC, Inc.	630	2,999

Valspar Corp.	466	14,036

Vulcan Materials Co.	600	26,298

¹Wausau Paper Corp.	100	677

Westlake Chemical Corp.	100	1,857

Weyerhaeuser Co.	1,080	38,016

Worthington Industries, Inc.	400	5,144

¹WR Grace & Co.	300	6,312

Zep, Inc.	100	1,744

¹Zoltek Cos., Inc.	100	847

Total Materials		2,267,460


Telecommunication Services–3.0%
¹AboveNet, Inc.	100	4,718

Alaska Communications
Systems Group, Inc.	100	849
¹American Tower Corp.	2,043	90,913

¹Aruba Networks, Inc.	400	5,696

AT&T, Inc.	29,194	706,203

Atlantic Tele-Network, Inc.	100	4,130

¹Cbeyond, Inc.	100	1,250

CenturyTel, Inc.	1,479	49,265

¹Cincinnati Bell, Inc.	740	2,227

¹Clearwire Corp., Class A	500	3,640

Consolidated Communications
Holdings, Inc.	100	1,701
¹Crown Castle International Corp.	1,481	55,182

¹EchoStar Corp.	141	2,690

¹EMS Technologies, Inc.	100	1,502

¹Finisar Corp.	299	4,455

Frontier Communications Corp.	1,700	12,087

¹General Communication, Inc.	100	759

¹Global Crossing Ltd.	100	1,057

¹Hughes Communications, Inc.	100	2,433

¹ICO Global Communications
Holdings Ltd.	603	971


60		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Telecommunication Services (continued)
¹Iridium Communications, Inc.	200	$	2,008

¹JDS Uniphase Corp.	1,197		11,778

¹Leap Wireless International,
Inc.	239		3,102
¹Level 3 Communications, Inc.	7,454		8,125

¹Liberty Global, Inc.	700		18,193

¹Loral Space &
Communications, Inc.	100		4,272
¹MetroPCS Communications,
Inc.	1,200		9,828
¹NeuStar, Inc.	346		7,135

¹Neutral Tandem, Inc.	100		1,125

¹NII Holdings, Inc.	800		26,016

NTELOS Holdings Corp.	100		1,720

¹PAETEC Holding Corp.	300		1,023

¹Premiere Global Services, Inc.	200		1,268

Qwest Communications
International, Inc.	7,831		41,113
¹RCN Corp.	70		1,037

¹SAVVIS, Inc.	100		1,475

¹SBA Communications Corp.	590		20,066

Shenandoah Telecom Co.	100		1,774

¹Sprint Nextel Corp.	14,500		61,480

¹Syniverse Holdings, Inc.	300		6,135

Telephone & Data Systems, Inc.	223		6,777

Telephone & Data Systems, Inc.
(Special Shares)	200		5,308
Time Warner Cable, Inc.	1,746		90,932

¹tw telecom, Inc.	648		10,809

¹US Cellular Corp.	66		2,716

USA Mobility, Inc.	100		1,292

Verizon Communications, Inc.	14,008		392,504

¹Vonage Holdings Corp.	200		460

Windstream Corp.	2,580		27,245

Total Telecommunication Services			1,718,444



Utilities–4.1%
¹AES Corp.	3,400	31,416

AGL Resources, Inc.	391	14,006

Allegheny Energy, Inc.	806	16,668

Allete, Inc.	200	6,848

Alliant Energy Corp.	527	16,727

Ameren Corp.	1,158	27,526

American Electric Power Co.,
Inc.	2,364	76,357
American States Water Co.	100	3,314

American Water Works Co., Inc.	900	18,540

Aqua America, Inc.	594	10,502

Atmos Energy Corp.	432	11,681

Avista Corp.	200	3,906

Black Hills Corp.	150	4,271

California Water Service Group	100	3,570

¹Calpine Corp.	1,800	22,896

CenterPoint Energy, Inc.	2,000	26,320

CH Energy Group, Inc.	70	2,747

Cleco Corp.	300	7,923

CMS Energy Corp.	1,100	16,115

Consolidated Edison, Inc.	1,374	59,219

Constellation Energy Group, Inc.	954	30,766

Dominion Resources, Inc.	3,000	116,220

DPL, Inc.	580	13,862

DTE Energy Co.	807	36,807

Duke Energy Corp.	6,472	103,552

¹Dynegy, Inc.	367	1,413

Edison International	1,560	49,483

¹El Paso Electric Co.	190	3,677

Empire District Electric Co.	150	2,816

¹Enbridge Energy Management
LLC	105	5,355
Energen Corp.	380	16,845

¹EnerNOC, Inc.	100	3,144

Entergy Corp.	935	66,965

EQT Corp.	700	25,298

Exelon Corp.	3,257	123,668

FirstEnergy Corp.	1,530	53,902

Great Plains Energy, Inc.	600	10,212


U.S. Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		61


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Utilities (continued)
Hawaiian Electric Industries, Inc.	420	$	9,568

IDACORP, Inc.	275		9,149

Integrys Energy Group, Inc.	369		16,140

ITC Holdings Corp.	300		15,873

¹Kinder Morgan Management
LLC	397		22,466
Laclede Group, Inc.	120		3,976

¹Macquarie Infrastructure Co.
LLC	168		2,149
MDU Resources Group, Inc.	808		14,568

MGE Energy, Inc.	100		3,604

¹Mirant Corp.	800		8,448

Nalco Holding Co.	710		14,527

National Fuel Gas Co.	400		18,352

New Jersey Resources Corp.	240		8,448

NextEra Energy, Inc.	1,993		97,179

Nicor, Inc.	269		10,895

NiSource, Inc.	1,454		21,083

Northeast Utilities	876		22,320

Northwest Natural Gas Co.	190		8,278

NorthWestern Corp.	170		4,454

¹NRG Energy, Inc.	1,226		26,003

NSTAR	520		18,200

NV Energy, Inc.	1,186		14,007

OGE Energy Corp.	530		19,377

Oneok, Inc.	500		21,625

Ormat Technologies, Inc.	100		2,829

Otter Tail Corp.	190		3,673

Pepco Holdings, Inc.	1,167		18,299

¹Perini Corp.	100		1,648

¹Petrohawk Energy Corp.	1,500		25,455

PG&E Corp.	1,855		76,240

Piedmont Natural Gas Co.	400		10,120

Pinnacle West Capital Corp.	490		17,816

PNM Resources, Inc.	384		4,293



Portland General Electric Co.		300		5,499

PPL Corp.		2,300		57,385

Progress Energy, Inc.		1,387		54,398

Public Service Enterprise
Group, Inc.		2,500		78,325
Questar Corp.		829		37,711

¹RRI Energy, Inc.		1,674		6,344

SCANA Corp.		587		20,991

Sempra Energy		1,138		53,247

SJW Corp.		100		2,344

South Jersey Industries, Inc.		190		8,162

Southern Co.		4,081		135,816

Southern Union Co.		536		11,717

Southwest Gas Corp.		200		5,900

¹Southwestern Energy Co.		1,708		65,997

Spectra Energy Corp.		3,200		64,224

TECO Energy, Inc.		949		14,301

UGI Corp.		551		14,017

UIL Holdings Corp.		100		2,503

UniSource Energy Corp.		160		4,829

Vectren Corp.		414		9,795

Westar Energy, Inc.		537		11,605

WGL Holdings, Inc.		300		10,209

Wisconsin Energy Corp.		605		30,698

Xcel Energy, Inc.		2,232		46,002

Total Utilities				2,367,618

Total Common Stocks–
(Identified Cost $62,583,436)				56,315,419


Mutual Fund–1.6%
AIM Prime Fund
(At Net Asset Value)		911,524		911,524


	Par Amount

U.S. Treasury–0.1%
⁴United States Treasury Bill,
0.080%, 10/14/2010
(At Amortized Cost)	$	80,000		79,981

Total Investments–98.5%
(Identified Cost $63,574,941)				57,306,924

Other Assets & Liabilities–Net–1.5%				883,113

Total Net Assets–100.0%			$	58,190,037


62		AARP PORTFOLIOS 2010 ANNUAL REPORT		U.S. Stock Market Portfolio

U.S. Stock Market Portfolio (continued)

June 30, 2010

Non-income producing security.

Real Estate Investment Trust (REIT).

Investments in non-controlled affiliate. The Portfolio owns shares of State Street Corp. with a cost basis of $123,592 at June 30, 2010.

⁴

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


At June 30, 2010, the Portfolio had the following outstanding long futures contracts:
Description	Number of Contracts	Notional Value		Expiration Date	Unrealized depreciation

S&P Mini 500 Index Futures	10	$	513,300	September 2010	$	(29,179	)

Russell 2000 E Mini Index Futures	5	$	303,900	September 2010	$	(18,510	)

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 2010 ANNUAL REPORT		63

International Stock Market Portfolio

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks–66.6%
Aerospace & Defense–0.5%
BAE Systems PLC	7,842	$	36,747

Cobham PLC	2,413		7,693

Elbit Systems Ltd.	60		3,063

¹European Aeronautic Defence
and Space Co. NV	899		18,640
Finmeccanica SpA	840		8,817

¹Gamesa Corp. Tecnologica SA	390		3,402

¹Rolls-Royce Group PLC	4,058		34,118

Safran SA	401		11,318

Singapore Technologies
Engineering Ltd.	4,000		9,425
Smiths Group PLC	803		12,867

Thales SA	189		6,165

Total			152,255


Air Freight & Couriers–0.2%
Deutsche Post AG	1,837		27,116

TNT NV	853		21,785

Toll Holdings Ltd.	1,402		6,515

Yamato Holdings Co. Ltd.	900		12,030

Total			67,446


Airlines–0.1%
¹Air France-KLM	271		3,272

¹All Nippon Airways Co. Ltd.	2,000		6,395

¹British Airways PLC	1,285		3,765

Cathay Pacific Airways Ltd.	3,000		6,002

¹Deutsche Lufthansa AG	461		6,454

¹Iberia Lineas Aereas de
Espana SA	811		2,326
¹Qantas Airways Ltd.	2,474		4,615

Singapore Airlines Ltd.	940		9,829

Total			42,658


Auto Components–0.5%
Aisin Seiki Co. Ltd.	400		10,910

Bridgestone Corp.	1,500		23,965



Compagnie Generale des
Etablissements Michelin	344	24,408
¹Continental AG	108	5,679

Denso Corp.	1,100	30,773

NGK Spark Plug Co. Ltd.	1,000	12,576

NOK Corp.	200	3,220

Nokian Renkaat, OYJ	230	5,696

Stanley Electric Co. Ltd.	300	5,027

Sumitomo Rubber Industries,
Inc.	300	2,671
Toyoda Gosei Co. Ltd.	100	2,509

Toyota Boshoku Corp.	100	1,479

Toyota Industries Corp.	400	10,264

Total		139,177


Automobiles–2.0%
Bayerische Motoren Werke AG	755	37,178

¹DaimlerChrysler AG	2,042	105,207

Fiat SpA	1,687	17,655

¹Fuji Heavy Industries Ltd.	1,000	5,423

Honda Motor Co. Ltd.	3,700	108,569

Isuzu Motors Ltd.	3,000	9,152

Mazda Motor Corp.	3,000	7,118

¹Mitsubishi Motors Corp.	8,000	10,214

¹Nissan Motor Co. Ltd.	5,500	38,902

¹Peugeot SA	334	8,647

¹Renault SA	445	16,837

Suzuki Motor Corp.	800	15,882

Toyota Motor Corp.	6,200	215,762

Volkswagen AG	95	8,169

¹Yamaha Motor Co. Ltd.	600	8,033

Total		612,748


Banks–9.7%
77 Bank Ltd.	1,000	5,412

¹Alpha Bank AE	974	4,836

Anglo Irish Bank Corp. PLC	1,621	–

Aozora Bank Ltd.	1,000	1,311

Australia & New Zealand
Banking Group Ltd.	5,733	105,053
Banca Carige SpA	1,495	2,958


64		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Banks (continued)
Banca Intesa SpA (Certificates.–
participating cumulative)	1,839	$	3,725
¹Banca Monte dei Paschi
di Siena SpA	5,120		5,884
Banca Popolare di Milano
SCRL	825		3,450
Banche Popolari Unite SCPA	1,265		11,039

Banco Bilbao Vizcaya
Argentaria SA	8,066		85,375
Banco Comercial Portugues SA	6,861		5,228

Banco de Sabadell SA	1,988		9,089

Banco Espirito Santo SA	1,052		4,202

Banco Popolare SCRL	1,389		7,768

Banco Popular Espanol SA	1,914		9,897

Banco Santander Central
Hispano SA	18,597		199,767
¹Bank Hapoalim BM	2,147		7,790

¹Bank Leumi Le-Israel	2,554		9,161

Bank of Cyprus Public Co. Ltd.	1,253		5,082

Bank of East Asia Ltd.	3,454		12,575

Bank of Kyoto Ltd.	1,000		8,293

Bank of Yokohama Ltd.	3,000		13,864

Bankinter SA	654		4,046

Barclays PLC	25,925		104,838

Bendigo Bank Ltd.	817		5,667

BNP Paribas	2,212		121,714

BOC Hong Kong Holdings Ltd.	8,000		18,370

Chiba Bank Ltd.	2,000		12,180

¹Commerzbank AG	1,655		11,747

Commonwealth Bank of
Australia	3,469		143,076
Credit Agricole SA	2,224		23,603

Credit Suisse Group	2,548		96,760

¹Danske Bank A/S	1,010		19,681

DBS Group Holdings Ltd.	3,500		34,289

Deutsche Bank AG	1,407		80,757

¹Deutsche Postbank AG	176		5,169



¹Dexia SA	1,198	4,254

DnB NOR ASA	2,155	20,985

¹EFG Eurobank Ergasias SA	658	2,976

Erste Bank der Oesterreichischen
Sparkassen AG	408	13,216
Fukuoka Financial Group, Inc.	2,000	8,406

Gunma Bank Ltd.	1,000	5,344

Hachijuni Bank Ltd.	1,000	5,661

Hang Seng Bank Ltd.	1,800	24,202

Hiroshima Bank Ltd.	1,000	4,022

HSBC Holdings PLC	39,326	361,618

Intesa Sanpaolo SpA	17,516	47,039

Investec PLC	865	5,865

¹Israel Discount Bank Ltd.	1,458	2,477

Iyo Bank Ltd.	1,000	9,355

Joyo Bank Ltd.	2,000	7,977

Julius Baer Group Ltd.	439	12,613

¹Julius Baer Holding AG	439	4,787

¹KBC Groep NV	373	14,594

¹Lloyds TSB Group PLC	91,010	73,050

¹Mediobanca SpA	1,068	8,086

Mitsubishi UFJ Financial
Group, Inc.	28,800	131,789
¹Mizrahi Tefahot Bank Ltd.	330	2,417

Mizuho Financial Group, Inc.	31,400	52,153

National Australia Bank Ltd.	4,798	94,714

¹National Bank of Greece SA	1,403	15,364

¹Natixis	1,823	8,109

Nishi-Nippon City Bank Ltd.	2,000	5,785

Nordea Bank AB	7,568	63,350

OKO Bank PLC	312	3,215

Oversea-Chinese Banking
Corp. Ltd.	5,369	34,105
¹Piraeus Bank SA	649	2,784

¹Raiffeisen International Bank
Holding AG	119	4,606
Resona Holdings, Inc.	1,400	17,258

¹Royal Bank of Scotland Group
PLC	36,751	22,758
Sapporo Hokuyo Holdings, Inc.	600	2,664

Seven Bank Ltd.	1	1,824


International Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		65


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Banks (continued)
¹Shinsei Bank Ltd.	2,000	$	1,717

Shizuoka Bank Ltd.	1,000		8,791

Skandinaviska Enskilda
Banken AB	3,310		17,845
Societe Generale	1,437		60,579

Standard Chartered PLC	4,583		112,412

Sumitomo Mitsui Financial
Group, Inc.	3,000		86,029
Suncorp-Metway Ltd.	2,747		18,728

Suruga Bank Ltd.	1,000		9,163

Svenska Handelsbanken	1,150		28,508

¹Swedbank AB	1,600		14,972

UniCredito Italiano SpA	34,952		78,999

United Overseas Bank Ltd.	3,070		43,136

Westpac Banking Corp.	6,732		121,189

Wing Hang Bank Ltd.	510		5,037

Total			2,910,183


Beverages–1.4%
¹Anheuser-Busch InBev NV	640		2

Asahi Breweries Ltd.	900		15,325

Carlsberg A/S	260		20,030

Coca-Cola Amatil Ltd.	1,210		12,271

Coca-Cola West Holdings Co.
Ltd.	100		1,660
Diageo PLC	5,673		89,882

Foster’s Group Ltd.	4,293		20,567

Fraser and Neave Ltd.	2,000		7,376

Heineken Holding NV	234		8,642

Heineken NV	562		24,086

InBev NV	1,636		79,906

Ito En Ltd.	100		1,537

Kirin Brewery Co. Ltd.	2,000		25,354

Pernod-Ricard SA	452		35,543

SABMiller PLC	2,153		60,790

Sapporo Holdings Ltd.	1,000		4,339

Total			407,310



Biotechnology–0.0%
Grifols SA	272	2,821


Building Products–0.4%
Asahi Glass Co. Ltd.	2,000	19,050

Assa Abloy AB	680	13,787

Cie de Saint-Gobain	841	31,934

Geberit AG	82	12,823

JS Group Corp.	600	11,565

Nippon Sheet Glass Co. Ltd.	2,000	4,972

Sika AG	4	7,127

TOTO Ltd.	1,000	6,723

Total		107,981


Chemicals–2.0%
Akzo Nobel NV	509	26,903

Asahi Kasei Corp.	3,000	15,830

BASF AG	2,078	115,209

Bayer AG	1,882	106,401

Daicel Chemical Industries, Ltd.	1,000	6,825

Denki Kagaku Kogyo K. K.	1,000	4,712

GEA Group AG	322	6,496

Givaudan SA	17	14,538

Israel Chemicals Ltd.	960	10,085

¹Israel Corp. Ltd.	5	3,120

JSR Corp.	400	6,806

K+S AG	311	14,479

Kaneka Corp.	1,000	5,864

Kansai Paint Co. Ltd.	1,000	8,644

Koninklijke DSM NV	333	13,445

Kuraray Co. Ltd.	1,000	11,886

Lonza Group AG	98	6,571

Makhteshim-Agan Industries
Ltd.	656	2,199
Mitsubishi Chemical Holdings
Corp.	2,500	11,553
Mitsubishi Gas Chemical Co.,
Inc.	1,000	4,915
Mitsui Chemicals, Inc.	2,000	5,672

Novozymes A/S	110	11,861

Orica Ltd.	833	17,800


66		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Chemicals (continued)
Shin-Etsu Chemical Co. Ltd.	900	$	42,455

Showa Denko K.K.	3,000		5,491

Solvay SA	122		10,522

Sumitomo Chemical Co. Ltd.	4,000		15,683

Syngenta AG	215		50,001

Taiyo Nippon Sanso Corp.	1,000		8,033

Teijin Ltd.	2,000		6,011

Tokuyama Corp.	1,000		4,452

Toray Industries, Inc.	3,000		14,508

Tosoh Corp.	1,000		2,621

Ube Industries Ltd.	2,000		4,791

Wacker Chemie AG	33		4,849

Yara International ASA	350		9,984

Total			611,215


Commercial Services & Supplies–0.6%
Adecco SA	257		12,342

Aggreko PLC	564		11,929

Benesse Corp.	200		9,118

Bureau Veritas SA	109		5,963

Capita Group PLC	1,440		15,949

Dai Nippon Printing Co. Ltd.	1,000		11,672

Group 4 Securicor PLC	3,286		13,129

Hakuhodo DY Holdings, Inc.	50		2,531

Invensys PLC	1,783		6,439

Legrand SA	310		9,315

Mitsubishi UFJ Lease & Finance
Co. Ltd.	120		4,088
Nissha Printing Co. Ltd.	100		2,713

PagesJaunes Groupe SA	249		2,594

¹Randstad Holdings NV	258		10,285

Secom Co. Ltd.	500		22,343

Securitas AB	680		6,236

Serco Group PLC	988		8,683

SGS SA	12		16,281



Societe BIC SA	54	3,861

Toppan Printing Co. Ltd.	1,000	8,011

Total		183,482


Communications Equipment–0.5%
¹Alcatel SA	4,792	12,498

Nokia OYJ	8,470	69,851

Telefonaktiebolaget LM
Ericsson	6,190	69,659

Total		152,008


Computers & Peripherals–0.3%
¹Elpida Memory, Inc.	400	6,287

Fujitsu Ltd.	4,000	25,354

¹Logitech International SA	381	5,219

Mitsumi Electric Co. Ltd.	200	3,455

NEC Corp.	6,000	15,796

¹Toshiba Corp.	9,000	45,252

Total		101,363


Construction & Engineering–0.5%
Acciona SA	60	4,630

Actividades de Construction y
Servicios SA (ACS)	296	10,983
Alstom SA	444	20,453

Amec PLC	730	9,013

Balfour Beatty PLC	1,548	5,537

Eiffage SA	79	3,474

Fomento de Construcciones y
Contratas SA	100	2,167
HOCHTIEF AG	109	6,590

Husqvarna AB, Series B	896	5,454

Italcementi SpA	55	243

Kajima Corp.	2,000	4,587

Kinden Corp.	1,000	8,553

Kurita Water Industries Ltd.	300	8,291

Leighton Holdings Ltd.	310	7,610

Obayashi Corp.	2,000	8,022

SembCorp Industries Ltd.	2,000	5,844

Shimizu Corp.	1,000	3,458

Skanska AB	1,080	15,824

Taisei Corp.	2,000	4,045

Total		134,778


International Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		67


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Construction Materials–0.5%
Boral Ltd.	1,288	$	5,264

Cimpor Cimentos de Portugal
SGPS SA	466		2,647
CRH PLC	1,049		22,098

CRH PLC	515		10,817

CSR Ltd.	2,606		3,713

Fletcher Building Ltd.	1,362		7,377

HeidelbergCement AG	303		14,587

Holcim Ltd.	537		36,305

Imerys SA	67		3,469

¹James Hardie Industries NV	800		4,253

Lafarge SA	433		23,988

¹Taiheiyo Cement Corp.	2,000		2,554

Total			137,072


Containers & Packaging–0.1%
Amcor Ltd.	2,700		14,607

Rexam PLC	1,942		8,795

Toyo Seikan Kaisha Ltd.	300		4,437

Total			27,839


Distributors–0.4%
ABC-Mart, Inc.	100		3,938

Li & Fung Ltd.	6,200		28,067

Metcash Ltd.	1,626		5,777

Olam International Ltd.	3,129		5,804

Reckitt Benckiser Group PLC	1,411		66,054

Total			109,640


Diversified Financials–2.0%
3i Group PLC	2,046		8,138

Acom Co. Ltd.	100		1,305

Aeon Credit Service Co. Ltd.	100		898

Australian Stock Exchange Ltd.	370		9,149

Banco de Valencia SA	440		1,979

Bgp Holdings PLC Post Spin
Shares	20,484		–
¹Cattles PLC	24		–



Credit Saison Co. Ltd.	300	3,183

Criteria Caixacorp SA	1,788	7,386

Daiwa Securities Group, Inc.	4,000	17,084

Deutsche Boerse AG	422	25,974

Eurazeo	59	3,432

Exor SpA	175	2,992

Experian Group Ltd.	2,358	20,654

Fortis NV	4,669	10,622

Groupe Bruxelles Lambert SA	168	11,798

GS Yuasa Corp.	1,000	6,632

Hokuhoku Financial Group, Inc.	3,000	5,559

Hong Kong Exchanges and
Clearing Ltd.	2,000	31,540
ICAP PLC	1,327	8,037

¹ING Groep NV	8,687	65,940

Investor AB	1,000	16,380

Jafco Co. Ltd.	100	2,245

Keppel Corp. Ltd.	3,000	18,283

Kinnevik Investment AB	500	8,119

London Stock Exchange Group
PLC	301	2,535
Macquarie Group Ltd.	766	24,111

Man Group PLC	3,534	11,795

Matsui Securities Co. Ltd.	200	1,236

Mediolanum SpA	422	1,674

Mitsui Trust Holdings, Inc.	2,000	7,141

¹Mizuho Trust & Banking Co. Ltd.	3,000	2,610

Nomura Holdings, Inc.	8,000	44,201

ORIX Corp.	230	16,892

Pargesa Holding SA	57	3,758

Ratos AB	200	5,074

Resolution Ltd.	5,228	4,946

Schroders PLC	264	4,786

Senshu Ikeda Holdings, Inc.	1,100	1,616

Shinko Securities Co. Ltd.	1,000	2,260

Singapore Exchange Ltd.	2,000	10,585

Sony Financial Holdings, Inc.	2	6,730

Sumitomo Trust & Banking Co.
Ltd.	3,000	15,491
Swire Pacific Ltd.	2,000	22,859


68		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Diversified Financials (continued)
¹UBS AG	8,236	$	110,522

Yamaguchi Financial Group,
Inc.	1,000		9,638

Total			597,789


Diversified Telecommunication Services–2.5%
Belgacom SA	318		10,109

Bezeq Israeli Telecommunication
Corp. Ltd.	3,746		8,245
BT Group PLC	17,697		34,414

Cable & Wireless Worldwide
PLC	5,702		7,381
Deutsche Telekom AG	6,446		76,871

¹Elisa OYJ	280		4,894

France Telecom SA	4,201		73,757

¹Hellenic Telecommunications
Organization SA	560		4,267
Iliad SA	32		2,509

Inmarsat PLC	916		9,782

Millicom International Cellular
SA	169		13,874
Mobistar SA	60		3,218

Nippon Telegraph & Telephone
Corp.	1,200		49,353
PCCW Ltd.	8,000		2,342

Portugal Telecom SGPS SA	1,269		12,758

Prysmian SpA	435		6,330

Royal KPN NV	3,597		46,309

Singapore Telecommunications
Ltd.	17,300		37,664
Singapore Telecommunications
Ltd. 10	1,000		2,163
Swisscom AG	50		17,025

Tele2 AB	637		9,629

Telecom Corp. of New Zealand
Ltd.	4,484		5,847
Telecom Italia SpA	21,988		24,592


		��
Telecom Italia SpA
(RNC- Participating Cumulative)	12,482		11,529
Telefonica SA	9,282		174,030

Telekom Austria AG	735		8,252

Telenor ASA	1,900		24,214

TeliaSonera AB	5,170		33,575

Telstra Corp. Ltd.	9,519		26,233

Total			741,166


Electric Utilities–2.2%
Cheung Kong Infrastructure
Holdings Ltd.	1,000		3,724
Chubu Electric Power Co., Inc.	1,500		37,320

Chugoku Electric Power Co.,
Inc.	700		14,466
CLP Holdings Ltd.	4,500		32,622

¹Contact Energy Ltd.	520		2,041

E.ON AG	4,074		111,059

¹EDP Renovaveis SA	435		2,583

Electric Power Development
Co.	300		9,538
Electricite de France	593		22,907

Enel SpA	14,928		64,032

Energias de Portugal SA	3,801		11,399

Hokkaido Electric Power Co.,
Inc.	400		8,632
Hokuriku Electric Power Co.	400		8,795

HongKong Electric Holdings	3,000		17,896

Iberdrola Renovables	1,809		5,718

Iberdrola SA	8,942		50,906

International Power PLC	3,528		15,836

Kansai Electric Power Co., Inc.	1,700		41,508

Kyushu Electric Power Co., Inc.	800		17,988

¹Public Power Corp.	210		3,040

Red Electrica de Espana	224		8,105

Scottish & Southern Energy PLC	2,108		35,258

Shikoku Electric Power Co., Inc.	400		11,462

Terna SpA	2,913		10,571

Tohoku Electric Power Co., Inc.	1,000		21,524

Tokyo Electric Power Co., Inc.	2,700		73,552


International Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		69


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Electric Utilities (continued)
Verbund–Oesterreichische
Elektrizitatswirtschafts-AG	156	$	4,823

Total			647,305


Electrical Equipment–1.6%
¹ABB Ltd.	5,000		88,024

Fanuc Ltd.	400		45,828

Fuji Electric Holdings Co. Ltd.	1,000		2,926

Furukawa Electric Co. Ltd.	2,000		8,858

Matsushita Electric Works Ltd.	1,000		9,954

Mitsubishi Electric Corp.	4,000		31,637

Nitto Denko Corp.	400		13,283

Schneider Electric SA	550		56,539

Siemens AG	1,859		169,121

Sumitomo Electric Industries
Ltd.	1,600		18,928
Ushio, Inc.	200		3,123

¹Vestas Wind Systems A/S	470		19,798

Total			468,019


Electronic Equipment & Instruments–0.8%
Citizen Watch Co. Ltd.	700		4,342

Hirose Electric Co. Ltd.	100		9,231

Hitachi Chemical Co. Ltd.	200		3,760

¹Hitachi Ltd.	10,000		36,608

Hoya Corp.	1,000		21,535

Ibiden Co. Ltd.	300		8,203

Keyence Corp.	100		23,355

Kyocera Corp.	400		32,812

Mabuchi Motor Co. Ltd.	100		4,610

Nidec Corp.	200		16,948

Nippon Electric Glass Co. Ltd.	1,000		11,615

Omron Corp.	500		11,039

Rohm Co. Ltd.	200		12,135

Shimadzu Corp.	1,000		7,615

TDK Corp.	300		16,660

Yaskawa Electric Corp.	1,000		7,514



Yokogawa Electric Corp.	500	3,147

Total		231,129


Energy Equipment & Services–0.2%
Aker Solutions ASA	356	4,131

¹Cie Generale de Geophysique-
Veritas	284	5,148
Fugro NV	142	6,677

¹Renewable Energy Corp. AS	1,483	3,570

Saipem SpA	563	17,458

SBM Offshore NV	329	4,773

SeaDrill Ltd.	576	10,569

Technip SA	230	13,456

WorleyParsons Ltd.	451	8,494

Total		74,276


Food & Drug Retailing–1.3%
Carrefour SA	1,368	55,047

Casino Guichard Perrachon SA	115	8,817

Colruyt SA	34	8,061

Delhaize Group	233	17,105

FamilyMart Co. Ltd.	200	6,635

J Sainsbury PLC	2,639	12,682

Kesko OYJ	160	5,237

Koninklijke Ahold NV	2,719	33,969

Lawson, Inc.	200	8,779

MEIJI Holdings Co. Ltd.	200	8,225

Seven & I Holdings Co. Ltd.	1,700	39,319

Tesco PLC	18,070	102,648

WM Morrison Supermarkets
PLC	5,006	19,911
Woolworths Ltd.	2,747	62,938

Total		389,373


Food Products–2.3%
Ajinomoto Co., Inc.	2,000	18,236

Aryzta AG	172	6,640

Associated British Foods PLC	758	11,041

Coca Cola Hellenic Bottling Co.
SA	410	8,884
¹Genting International PLC	14,000	11,731

Golden Agri-Resources Ltd.	13,384	5,080


70		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Food Products (continued)
Goodman Fielder Ltd.	2,984	$	3,403

Groupe DANONE	1,321		71,762

Incitec Pivot Ltd.	3,504		8,111

Kerry Group PLC	260		7,254

Kerry Group PLC	25		701

Kikkoman Corp.	1,000		10,553

Lindt & Spruengli AG	2		4,360

Nestle SA	7,827		379,165

Nisshin Seifun Group, Inc.	500		5,695

Nissin Food Products Co. Ltd.	200		7,378

Parmalat SpA	3,496		8,224

Suedzucker AG	163		2,973

Unilever NV	3,714		102,888

Wilmar International Ltd.	3,000		12,418

Yakult Honsha Co. Ltd.	200		5,480

Total			691,977


Gas Utilities–0.5%
AGL Energy Ltd.	970		12,091

Centrica PLC	11,341		50,295

Enagas	373		5,680

Gas Natural SDG SA	458		6,698

Hong Kong & China Gas Co.	9,196		22,911

Osaka Gas Co. Ltd.	4,000		14,462

Snam Rete Gas SpA	3,353		13,507

Toho Gas Co. Ltd.	1,000		5,356

Tokyo Gas Co. Ltd.	6,000		27,456

Total			158,456


Health Care Equipment & Supplies–0.8%
Air Liquide SA	676		69,342

Alfresa Holdings Corp.	100		4,847

BioMerieux	34		3,529

Cie Generale d’Optique Essilor
International SA	442		26,608
Cochlear Ltd.	113		7,121



Coloplast A/S	49	4,903

Getinge AB	433	8,472

Luxottica Group SpA	283	6,936

Nobel Biocare Holding AG	274	4,755

Olympus Corp.	500	11,977

Phonak Holding AG	100	12,352

¹Qiagen NV	519	10,206

Smith & Nephew PLC	2,046	19,435

Straumann Holding AG	15	3,262

Synthes, Inc.	123	14,211

Sysmex Corp.	100	5,717

Terumo Corp.	400	19,343

¹William Demant Holding A/S	100	7,384

Total		240,400


Health Care Providers & Services–0.2%
Celesio AG	173	3,818

Fresenius Medical Care AG &
Co. KGaA	447	24,352
Fresenius SE	58	3,880

Mediceo Paltac Holdings Co.
Ltd.	300	3,586
Sonic Healthcare Ltd.	826	7,305

Suzuken Co. Ltd.	200	6,725

Total		49,666


Hotels Restaurants & Leisure–0.5%
¹Accor SA	315	14,809

Aristocrat Leisure Ltd.	764	2,371

¹Autogrill SpA	172	2,084

Carnival PLC	372	12,138

City Developments Ltd.	1,000	7,949

Compass Group PLC	4,066	31,117

Crown Ltd.	943	6,213

Intercontinental Hotels Group
PLC	520	8,262
Ladbrokes PLC	32	61

McDonald’s Holdings Co. Japan
Ltd.	100	2,242
OPAP SA	460	5,772

Oriental Land Co. Ltd.	100	8,372

¹Sands China Ltd.	4,257	6,396


International Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		71


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Hotels Restaurants & Leisure (continued)
Shangri-La Asia Ltd.	4,000	$	7,520

Sky City Entertainment Group
Ltd.	1,337		2,629
Sodexho Alliance SA	196		11,021

TABCORP Holdings Ltd.	1,231		6,608

Thomas Cook Group PLC	1,801		4,808

¹TUI AG	289		2,575

TUI Travel PLC	1,127		3,526

UOL Group Ltd.	1,000		2,721

Whitbread PLC	366		7,708

¹Wynn Macau Ltd.	3,371		5,567

Total			162,469


Household Durables–0.9%
Casio Computer Co. Ltd.	400		2,431

Daito Trust Construction Co.
Ltd.	200		11,367
Daiwa House Industry Co. Ltd.	1,000		9,096

Electrolux AB	532		12,344

Koninklijke Philips Electronics
NV	2,174		66,051
Makita Corp.	300		8,118

Matsushita Electric Industrial
Co. Ltd.	4,500		57,048
RINNAI CORP	100		5,158

¹Sanyo Electric Co. Ltd.	4,000		5,197

Sekisui Chemical Co. Ltd.	1,000		6,305

Sekisui House Ltd.	1,000		8,632

Sharp Corp.	2,000		21,377

Sony Corp.	2,300		61,928

Total			275,052


Household Products–0.2%
Henkel KGaA	276		11,392

Kao Corp.	1,200		28,378

Uni-Charm Corp.	100		11,333

Total			51,103



Industrial Conglomerates–0.6%
Aeon Mall Co. Ltd.	200	4,013

Brambles Ltd.	3,172	14,686

Burberry Group PLC	870	9,902

Delek Group Ltd.	11	2,298

Hopewell Holdings Ltd.	1,000	2,838

Hutchison Whampoa Ltd.	5,000	30,950

Jeronimo Martins SGPS SA	479	4,439

Noble Group Ltd.	6,800	8,327

NWS Holdings Ltd.	2,303	4,146

Orkla ASA	1,718	11,110

Pirelli & C SpA	5,630	3,152

Tomkins PLC	1,695	5,746

Wesfarmers Ltd.	322	7,861

Wesfarmers Ltd.-PPS	2,283	55,463

Total		164,931


Insurance–2.6%
Admiral Group PLC	472	9,940

¹Aegon NV	3,355	18,267

Allianz AG	1,027	103,314

AMP Ltd.	4,480	19,792

Assicurazioni Generali SpA	2,580	45,757

Aviva PLC	6,056	28,432

AXA Asia Pacific Holdings Ltd.	2,252	10,445

AXA SA	3,897	61,044

Baloise Holding AG	109	7,642

CNP Assurances	77	5,294

Dai-ichi Life Insurance Co. Ltd.	18	24,934

Delta Lloyd NV	191	3,267

Hannover Rueckversicherung
AG	128	5,553
Insurance Australia Group Ltd.	4,653	13,454

Legal & General Group PLC	12,307	14,468

Mapfre SA	45	124

Mapfre SA	1,423	3,928

Millea Holdings, Inc.	1,600	42,520

Mitsui Sumitomo Insurance
Group Holdings, Inc.	1,200	26,019
Muenchener Rueckversicherungs
AG	448	56,906


72		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Insurance (continued)
¹NKSJ Holdings, Inc.	2,000	$	11,954

Old Mutual PLC	12,631		19,540

Prudential PLC	5,658		43,004

QBE Insurance Group Ltd.	2,336		36,051

Sampo OYJ	966		20,623

SCOR SE	377		7,270

Standard Life PLC	5,007		13,059

¹Swiss Life Holding	58		5,598

Swiss Reinsurance	804		33,360

T&D Holdings, Inc.	600		13,009

TrygVesta A/S	53		2,817

Wiener Staedtische
Versicherung AG	82		3,455
Zurich Financial Services AG	334		74,236

Total			785,076


Internet & Catalog Retail–0.1%
Dena Co. Ltd.	300		7,945

Rakuten, Inc.	15		10,864

Total			18,809


Internet Software & Services–0.2%
SBI Holdings, Inc.	34		4,307

Softbank Corp.	1,800		48,221

United Internet AG	267		2,964

Yahoo! Japan Corp.	31		12,487

Total			67,979


IT Consulting & Services–0.2%
¹Atos Origin SA	86		3,506

Cap Gemini SA	304		13,561

Computershare Ltd.	963		8,664

Indra Sistemas SA	200		3,240

Itochu Techno-Solutions Corp.	100		3,672

Nomura Research Institute Ltd.	200		4,277

NTT Data Corp.	3		11,186

Obic Co. Ltd.	10		1,942

Total			50,048



Leisure Equipment & Products–0.2%
Fuji Photo Film Co. Ltd.	1,100	32,165

Konica Minolta Holdings, Inc.	1,000	9,751

Namco Bandai Holdings, Inc.	400	3,539

Sankyo Co. Ltd.	100	4,548

Shimano, Inc.	200	8,655

Tattersall’s Ltd.	2,523	4,792

Yamaha Corp.	300	3,105

Total		66,555


Machinery–1.4%
Alfa Laval AB	800	10,545

Amada Co. Ltd.	1,000	6,666

Atlas Copco AB, Series A	1,499	22,234

Atlas Copco AB, Series B	816	10,935

Daikin Industries Ltd.	500	15,462

HINO MOTORS, LTD.	1,000	5,005

Hitachi Construction Machinery
Co. Ltd.	200	3,742
Ishikawajima-Harima Heavy
Industries Co. Ltd.	3,000	4,847
Japan Steel Works Ltd.	1,000	8,892

JTEKT Corp.	400	3,765

Kawasaki Heavy Industries Ltd.	3,000	7,356

Komatsu Ltd.	2,100	38,391

Kubota Corp.	3,000	23,321

Linde AG	384	40,829

MAN AG	225	18,791

Metso OYJ	290	9,452

Minebea Co. Ltd.	1,000	5,616

Mitsubishi Heavy Industries Ltd.	7,000	24,439

Mitsui Engineering &
Shipbuilding Co. Ltd.	2,000	4,090
NGK Insulators Ltd.	1,000	15,762

NSK Ltd.	1,000	7,062

NTN Corp.	1,000	4,158

Sandvik AB	2,307	28,595

Scania AB	700	10,834

Schindler Holding AG	48	4,027

SembCorp Marine Ltd.	2,400	6,635

SMC Corp.	100	13,525


International Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		73


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Machinery (continued)
Sumitomo Heavy Industries Ltd.	1,000	$	5,955

THK Co. Ltd.	300		6,308

¹Volvo AB, Series A	2,500		28,166

¹Volvo AB, Series B	14		150

Wartsila OYJ	200		9,211

Yangzijiang Shipbuilding
Holdings Ltd.	3,000		2,900
Zardoya Otis SA	269		3,495

Total			411,161


Marine–0.3%
A.P. Moller-Maersk A	1		7,707

A.P. Moller-Maersk Group A/S	3		23,987

Cosco Corp. Singapore Ltd.	2,000		2,134

Kamigumi Co. Ltd.	1,000		7,728

¹Kawasaki Kisen Kaisha Ltd.	2,000		8,271

Koninklijke Vopak NV	132		4,898

Mitsui OSK Lines Ltd.	3,000		20,134

¹Neptune Orient Lines Ltd.	2,000		2,865

Nippon Yusen Kabushiki Kaisha	4,000		14,779

¹Orient Overseas International
Ltd.	1,000		7,153

Total			99,656


Media–1.0%
British Sky Broadcasting PLC	2,617		27,401

Dentsu, Inc.	400		10,747

Eutelsat Communications	220		7,452

Fuji Television Network, Inc.	1		1,447

Gestevision Telecinco SA	184		1,658

¹ITV PLC	8,003		6,023

¹JC Decaux SA	134		3,167

John Fairfax Holdings Ltd.	4,676		5,214

Jupiter Telecommunications Co.
Ltd.	6		5,769
Lagardere SCA	244		7,710

M6-Metropole Television	111		2,279



Mediaset SpA	1,585	9,136

Modern Times Group	109	6,048

Pearson PLC	1,761	23,374

Publicis Groupe	273	11,032

Reed Elsevier NV	1,605	17,992

Reed Elsevier PLC	2,640	19,691

Sanoma-WSOY OYJ	190	3,309

SES-FDR	695	14,620

Singapore Press Holdings Ltd.	4,000	10,857

Television Broadcasts Ltd.	1,000	4,668

Television Francaise 1 (TFI)	255	3,377

Toho Co. Ltd.	200	3,338

Vivendi SA	2,789	57,639

Wolters Kluwer NV	618	11,982

WPP PLC	2,722	25,856

Total		301,786


Metals & Mining–4.1%
Acerinox SA	291	4,589

Alumina Ltd.	5,814	7,518

¹Anglo American PLC	2,979	104,661

Antofagasta PLC	839	9,863

ArcelorMittal	1,949	53,550

BHP Billiton Ltd.	7,579	241,962

BHP Billiton PLC	4,990	130,860

¹BlueScope Steel Ltd.	3,648	6,496

Boliden AB	500	5,627

Daido Steel Co. Ltd.	1,000	4,327

Dowa Mining Co. Ltd.	1,050	5,125

Energy Resources of Australia
Ltd.	147	1,658
Eramet	11	2,770

Eurasian Natural Resources
Corp.	510	6,563
¹Fortescue Metals Group Ltd.	2,681	9,366

Fresnillo PLC	396	5,798

Husqvarna AB. Series B NPV	840	15,298

JFE Holdings, Inc.	1,100	34,552

Johnson Matthey PLC	458	10,228

Kazakhmys PLC	435	6,463

Kobe Steel Ltd.	6,000	11,593


74		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Metals & Mining (continued)
Kone OYJ	358	$	14,414

¹Lonmin PLC	333		7,023

MacArthur Coal Ltd.	327		3,361

Maruichi Steel Tube Ltd.	100		1,925

¹Mitsubishi Materials Corp.	3,000		8,101

Mitsui Mining & Smelting Co.
Ltd.	1,000		2,678
Newcrest Mining Ltd.	1,105		32,888

Nippon Steel Corp.	12,000		40,133

Nisshin Steel Co. Ltd.	2,000		3,231

OneSteel Ltd.	2,662		6,727

Outokumpu OYJ	400		6,111

¹Oxiana Ltd.	6,416		5,223

Randgold Resources Ltd.	194		18,631

Rautaruukki OYJ	180		2,659

Rio Tinto Ltd.	990		55,959

Rio Tinto PLC	3,275		145,312

Salzgitter AG	80		4,817

Sims Group Ltd.	315		4,570

SSAB Svenskt Stal AB,
Class A	512		6,987
SSAB Svenskt Stal AB,
Class B	250		3,049
Sumitomo Metal Industries Ltd.	8,000		18,349

Sumitomo Metal Mining Co.
Ltd.	1,000		12,655
Tenaris SA	1,086		19,100

The Umicore Group	271		7,945

ThyssenKrupp AG	736		18,408

Tokyo Steel Manufacturing Co.
Ltd.	200		2,341
Vallourec Group	127		22,282

Vedanta Resources PLC	306		9,719

Voestalpine AG	254		7,058

Xstrata PLC	4,666		61,848



Yamato Kogyo Co. Ltd.	100	2,525

Total		1,234,896


Multi-line Retail–0.4%

Aeon Co. Ltd.	1,300	13,881

Compagnie Nationale a
Portefeuille	84	3,613
Harvey Norman Holdings Ltd.	1,080	3,031

Home Retail Group	1,905	6,108

Isetan Mitsukoshi Holdings Ltd.	840	8,276

J Front Retailing Co. Ltd.	1,000	4,881

Lifestyle International Holdings
Ltd.	1,500	2,928
Marks & Spencer Group PLC	3,645	18,077

Marui Co. Ltd.	500	3,407

Metro AG	300	15,456

Next PLC	404	12,132

PPR SA	170	21,427

Takashimaya Co. Ltd.	1,000	8,067

UNY Co. Ltd.	300	2,305

Total		123,589


Multi-Utilities–0.3%
AEM SpA	2,665	3,685

¹K-Green Trust	600	451

RWE AG	950	62,723

SP AusNet	3,266	2,119

United Utilities Group PLC	1,414	11,106

Veolia Environnement	894	21,267

Total		101,351


Office Electronics–0.5%
Brother Industries Ltd.	500	5,259

Canon Marketing Japan, Inc.	100	1,418

Canon, Inc.	2,600	97,825

Neopost SA	64	4,681

Ricoh Co. Ltd.	2,000	25,784

Total		134,967


Oil & Gas–5.1%
Aeroports de Paris	65	4,226

¹Arrow Energy Ltd.	1,243	5,112

BG Group PLC	7,637	114,835


International Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		75


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Oil & Gas (continued)
BP PLC	42,409	$	202,147

¹Cairn Energy PLC	3,003		18,623

Caltex Australia Ltd.	300		2,401

Cosmo Oil Co. Ltd.	1,000		2,418

ENI SpA	5,891		109,981

¹Enquest PLC	1,018		1,534

Fortum OYJ	977		21,710

Galp Energia SGPS SA	549		8,299

Gaz de France SA	2,817		81,362

Idemitsu Kosan Co. Ltd.	100		7,593

Inpex Holdings, Inc.	2		11,231

Japan Petroleum Exploration
Co.	100		4,130
¹JX Holdings, Inc.	5,200		25,675

¹Mongolia Energy Co. Ltd.	7,000		2,481

National Grid PLC	9,991		73,324

Neste Oil OYJ	277		4,068

Norsk Hydro ASA	1,402		6,432

OMV AG	341		10,369

Origin Energy Ltd.	1,953		24,741

¹Paladin Energy Ltd.	1,236		3,763

Petrofac Ltd.	609		10,796

Repsol YPF SA	1,602		32,812

Royal Dutch Shell PLC	8,009		203,627

Royal Dutch Shell PLC,
B shares	6,094		148,563
Santos Ltd.	1,809		19,328

Showa Shell Sekiyu K.K.	400		2,780

Statoil ASA	2,518		49,077

TonenGeneral Sekiyu K.K.	1,000		8,700

Total SA	4,774		216,891

Tullow Oil PLC	1,936		29,024

Woodside Petroleum Ltd.	1,238		43,922

Total			1,511,975



Paper & Forest Products–0.2%
Holmen AB	130	3,117

Nippon Paper Group, Inc.	200	5,566

OJI Paper Co. Ltd.	2,000	9,875

Stora Enso OYJ	1,180	8,666

Svenska Cellulosa AB	1,280	15,238

UPM-Kymmene OYJ	1,080	14,495

Total		56,957


Personal Products–0.5%
Beiersdorf AG	235	13,045

L’Oreal SA	529	52,644

Shiseido Co. Ltd.	800	17,807

Unilever PLC	2,934	78,982

Total		162,478


Pharmaceuticals–4.9%
¹Actelion Ltd.	205	7,705

Astellas Pharma, Inc.	1,000	33,783

AstraZeneca PLC	3,284	155,553

Chugai Pharmaceutical Co. Ltd.	500	8,949

CSL Ltd.	1,270	35,085

Daiichi Sankyo Co. Ltd.	1,500	26,948

Dainippon Sumitomo Pharma
Co. Ltd.	300	2,312
Eisai Co. Ltd.	600	20,033

¹Elan Corp. PLC	995	4,574

GlaxoSmithKline PLC	11,729	200,383

Hisamitsu Pharmaceutical Co.,
Inc.	200	7,977
Ipsen SA	63	1,936

Kyowa Hakko Kogyo Co. Ltd.	591	5,649

Merck KgaA	134	9,880

Mitsubishi Tanabe Pharma Corp.	1,000	15,299

Novartis AG	4,766	232,650

Novo-Nordisk A/S	970	79,079

Ono Pharmaceutical Co. Ltd.	200	8,135

Orion OYJ	168	3,171

Roche Holding AG	1,587	219,592

Sanofi-Aventis	2,385	145,186

Santen Pharmaceutical Co. Ltd.	200	7,220


76		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Pharmaceuticals (continued)
Shionogi & Co. Ltd.	700	$	14,577

Shire Ltd.	1,219		25,035

Takeda Pharmaceutical Co.
Ltd.	1,700		73,374
Teva Pharmaceutical Industries
Ltd.	2,101		111,608
Tsumura & Co.	100		3,071

UCB SA	207		6,573

Total			1,465,337


Real Estate–1.9%
²Ascendas Real Estate
Investment Trust	3,000		3,910
¹Beni Stabili SpA	270		206

²British Land Co. PLC	1,985		12,924

²CapitaLand Ltd.	6,000		15,469

CapitaMall Trust	5,000		6,589

CapitaMalls Asia Ltd.	3,000		4,533

²CFS Retail Property Trust	3,403		5,454

Cheung Kong Holdings Ltd.	3,000		34,982

²Corio NV	137		6,726

²DB RREEF Trust	11,415		7,453

²Fonciere des Regions	45		3,760

²Gecina SA	33		3,017

²GPT Group	4,172		9,941

²Hammerson PLC	1,688		8,672

Hang Lung Group Ltd.	2,000		10,736

²Hang Lung Properties Ltd.	5,000		19,456

²Henderson Land Development
Co. Ltd.	2,029		11,986
²Hysan Development Co. Ltd.	1,195		3,415

²ICADE EMGP	52		4,431

¹Immofinanz AG	2,276		5,961

²Japan Prime Realty Investment
Corp.	1		2,121
²Japan Real Estate Investment
Corp.	1		8,192



²Japan Retail Fund Investment
Corp.	4	4,899
Keppel Land Ltd.	2,000	5,586

²Kerry Properties Ltd.	1,558	6,803

²Klepierre SA	195	5,456

²Land Securities Group PLC	1,694	14,141

Lend Lease Corp. Ltd.	1,150	7,148

²Liberty International PLC	1,105	5,146

²Link Real Estate Investment
Trust (The Link REIT)	4,613	11,493
²Macquarie Goodman Group	13,342	7,184

²Mirvac Group	7,166	7,990

²Mitsubishi Estate Co. Ltd.	3,000	42,269

²Mitsui Fudosan Co. Ltd.	2,000	28,270

²New World Development Ltd.	5,595	9,183

²Nippon Building Fund, Inc.	1	7,954

Nomura Real Estate Holdings,
Inc.	200	2,535
²Nomura Real Estate Office
Fund, Inc.	1	5,005
²NTT Urban Development Corp.	2	1,607

²Segro PLC	1,678	6,365

²Sino Land Co.	4,455	8,078

²Stockland Trust Group	5,266	16,611

²Sumitomo Realty & Development
Co. Ltd.	1,000	17,253
Sun Hung Kai Properties Ltd.	3,021	41,706

²Tokyo Tatemono Co. Ltd.	1,000	3,130

²Tokyu Land Corp.	1,000	3,548

²Unibail Holding	199	32,957

Westfield Group	4,981	51,444

Wharf Holdings Ltd.	3,250	16,069

Wheelock & Co. Ltd.	2,000	5,715

Total		565,479


Road & Rail–0.7%
Central Japan Railway Co.	3	24,880

ComfortDelgro Corp. Ltd.	4,000	4,182

DSV A/S	500	7,289

East Japan Railway Co.	800	53,602

Firstgroup PLC	987	5,394

Groupe Eurotunnel SA	1,072	7,343


International Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		77


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Road & Rail (continued)
Hankyu Hanshin Holdings, Inc.	3,000	$	13,287

Keihin Electric Express Railway
Co. Ltd.	1,000		8,870
Keio Corp.	1,000		6,497

Keisei Electric Railway Co. Ltd.	1,000		5,638

Kintetsu Corp.	4,000		12,248

MTR Corp.	3,258		11,192

Nippon Express Co. Ltd.	2,000		9,107

Odakyu Electric Railway Co.
Ltd.	1,000		8,621
Tobu Railway Co. Ltd.	2,000		10,824

Tokyu Corp.	3,000		12,270

West Japan Railway Co.	4		14,688

Total			215,932


Semiconductor Equipment & Products–0.5%
Advantest Corp.	400		8,515

ARM Holdings PLC	2,841		11,784

ASM Pacific Technology	500		3,923

ASML Holding NV	946		26,585

¹Infineon Technologies AG	2,290		13,560

Murata Manufacturing Co. Ltd.	500		24,151

Nikon Corp.	700		12,267

Seiko Epson Corp.	300		3,908

Shinko Electric Industries	100		1,322

STMicroelectronics NV	1,411		11,418

¹Sumco Corp.	200		3,365

Tokyo Electron Ltd.	400		21,942

Total			142,740


Software–0.7%
¹Autonomy Corp. PLC	490		13,454

Dassault Systemes SA	137		8,415

Konami Corp.	200		3,125

¹NICE Systems Ltd.	153		3,835

Nintendo Co. Ltd.	200		59,545

Oracle Corp. Japan	100		4,938



Sage Group PLC	2,714	9,395

SAP AG	1,944	87,638

Square Enix Co. Ltd.	100	1,855

Trend Micro, Inc.	200	5,453

Total		197,653


Specialty Retail–0.8%
Billabong International Ltd.	391	2,898

¹Carphone Warehouse Group
PLC	393	1,110
Compagnie Financiere
Richemont SA	1,189	41,875
Esprit Holdings Ltd.	2,628	14,360

Fast Retailing Co. Ltd.	100	15,276

Hennes & Mauritz AB	2,260	62,846

Inditex SA	479	27,720

Kingfisher PLC	5,289	16,696

Nitori Co. Ltd.	100	8,644

Sega Sammy Holdings, Inc.	400	5,794

Shimamura Co. Ltd.	100	9,084

USS Co. Ltd.	50	3,599

Yamada Denki Co. Ltd.	180	11,857

Yue Yuen Industrial Holdings
Ltd.	1,500	4,681

Total		226,440


Textiles & Apparel–0.5%
Adidas AG	460	22,544

Asics Corp.	1,000	9,265

Christian Dior SA	132	12,826

Hermes International	115	15,399

LVMH Moet Hennessy Louis
Vuitton SA	557	61,482
Puma AG Rudolf Dassler Sport	12	3,221

Swatch Group AG	71	20,195

Swatch Group AG-Registered
Shares	98	5,048

Total		149,980


Tobacco–0.8%
British American Tobacco PLC	4,515	144,183

Imperial Tobacco Group PLC	2,311	64,905

Japan Tobacco, Inc.	10	31,377


78		AARP PORTFOLIOS 2010 ANNUAL REPORT		International Stock Market Portfolio

International Stock Market Portfolio (continued)

June 30, 2010


Portfolio of investments

	Shares	Value


Common Stocks (continued)
Tobacco (continued)
Swedish Match AB	500	$	11,047

Total			251,512


Trading Companies & Distributors–0.7%
Bunzl PLC	721		7,258

Hitachi High-Technologies
Corp.	100		1,854
Itochu Corp.	3,300		26,287

Marubeni Corp.	4,000		20,835

Mitsubishi Corp.	3,100		65,289

Mitsui & Co. Ltd.	3,900		46,445

Sojitz Corp.	2,500		3,955

Sumitomo Corp.	2,500		25,337

Toyota Tsusho Corp.	400		5,794

¹Wolseley PLC	623		12,469

Total			215,523


Transportation Infrastructure–0.4%
Abertis Infraestructuras SA	724		10,535

¹Asciano Group	6,898		9,476

Auckland International Airport
Ltd.	1,692		2,183
Autostrade SpA	559		10,024

Brisa-Auto Estradas de Portugal
SA	329		2,012
Cintra Concesiones de
Infraestructuras de Transporte SA	980		6,444
Fraport AG Frankfurt Airport
Services Worldwide	78		3,351
Koninklijke Boskalis
Westminster NV	133		5,248
Kuehne & Nagel International
AG	111		11,517
Macquarie Airports	1,693		3,862

¹Macquarie Atlas Roads Group	983		792

Macquarie Infrastructure
Group	4,918		4,337
Transurban Group	2,684		9,650



Vinci SA	990	41,783

Total		121,214


Water Utilities–0.1%
Severn Trent PLC	496	9,126

Suez Environnement SA	564	9,417

Total		18,543


Wireless Telecommunication Services–1.2%
Bouygues SA	529	20,757

Cellcom Israel Ltd.	127	3,186

¹Foxconn International
Holdings Ltd.	4,000	2,620
KDDI Corp.	7	33,574

NTT DoCoMo, Inc.	35	53,189

Partner Communications Co.
Ltd.	184	2,847
StarHub Ltd.	1,000	1,618

Vodafone Group PLC	118,832	247,156

Total		364,947

Total Common Stocks–
(Identified Cost $24,317,772)		19,905,670


Preferred Stocks–0.3%
Automobiles–0.2%
Porsche AG	182	7,895

Volkswagen AG	365	32,470

Bayerische Motoren Werke AG	111	3,941

Total		44,306


Electrical Equipment–0.0%
Schindler Holding AG	100	8,482


Health Care Providers & Services–0.0%
Fresenius SE	167	11,135


Household Products–0.1%
Henkel KGaA	410	20,207


Multi-Utilities–0.0%
RWE AG	84	5,107


Total Preferred Stocks–
(Identified Cost $96,522)		89,237


International Stock Market Portfolio		AARP PORTFOLIOS 2010 ANNUAL REPORT		79


Portfolio of investments

	Shares	Value


Rights/Warrants–0.0%
Rights/Warrants–0.0%
¹Dexia Rights Exp. 6/9/10	10	$	2

¹Fonciere Des Regions
Warrants Exp. 12/31/10	45		26
¹Henderson Land
Development Co. Ltd.
Warrants Exp. 6/1/11	400		68
¹Iberdrola SA Rights Exp.
6/28/10	8,942		1,958
¹Mediobanca SpA Warrants
Exp. 3/18/11	1,018		41
¹Norsk Hydro ASA Rights
Exp. 7/9/10	426		221
¹Zardoya Otis SA Rights
Exp. 6/30/10	260		166

Total Rights/Warrants–
(Identified Cost $2,037)			2,482


Exchange-Traded Funds–30.6%
iShares MSCI Canada Index
Fund	94,905		2,355,542
iShares MSCI Emerging
Markets Index Fund	157,400		5,874,168
Vanguard Emerging Markets
ETF	24,100		915,559

Total Exchange-Traded Funds–
(Identified Cost $7,039,774)			9,145,269


Mutual Fund–1.0%
AIM Prime Fund
(At Net Asset Value)	311,954		311,954

Total Investments–98.5%
(Identified Cost $31,768,059)			29,454,612

Other Assets & Liabilities–Net–1.5%			458,992

Total Net Assets–100.0%		$	29,913,604

Non-income producing security.

Real Estate Investment Trust (REIT).


At June 30, 2010, the Portfolio had the following outstanding long futures contracts:
Description	Number of Contracts	Notional Value		Expiration Date	Unrealized Depreciation

DJEuro Stoxx 50 Index	5	$	157,810	September 2010	$	(6,647	)

FTSE 100 Index	1	$	72,949	September 2010	$	(3,885	)

Topix Index	1	$	94,740	September 2010	$	(2,563	)

MSCI EAFE Index	9	$	591,840	September 2010	$	(24,085	)

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 appreciation (depreciation) on open futures contracts is required to be treated as realized gain (loss) for tax purposes.

See Notes to Financial Statements.


80		AARP PORTFOLIOS 2010 ANNUAL REPORT		Financial Statements

Financial Statements



Statements of assets and liabilities

June 30, 2010
	U.S. Bond Market Portfolio		U.S. Stock Market Portfolio			International Stock Market Portfolio

Assets:
Investments in securities, at value (identified cost of $86,036,684, $63,574,941 and $31,768,059, respectively)	$	90,258,756	$	57,306,924		$	29,454,612
Cash		–		24			–
Cash denominated in foreign currency (identified cost $421,658)		–		–			421,761
Margin deposits at broker (identified cost $154,089)		–		–			150,959
Interest and dividend receivable		664,741		73,519			70,101
Receivable for open foreign exchange contracts		–		–			1,632
Receivable from adviser		8,179		7,015			13,404
Receivable for investments sold		237,092		–			529
Receivable for fund shares sold		386,766		1,107,930			14,335

Total assets	$	91,555,534	$	58,495,412		$	30,127,333


Liabilities:
Payable for investments purchased		3,044,021		229,343			–
Payable for fund shares redeemed		1,519,020		–			107,662
Payable for futures daily variation margin		–		7,050			37,137
Payable for open foreign exchange contracts		–		–			1,550
Payable for Trustees’ fees		5,000		5,000			5,000
Accrued portfolio accounting fees (Note 6)		9,770		6,907			7,066
Accrued administration fees (Note 6)		2,493		1,721			887
Accrued transfer and dividend disbursing agent fees and expenses (Note 6)		667		667			667
Accrued audit fees		18,342		18,342			19,215
Accrued insurance fees		15,922		9,253			4,883
Accrued printing and postage expenses		4,656		4,656			4,656
Accrued legal fees		11,875		11,875			11,875
Accrued miscellaneous expense		10,561		10,561			13,131

Total liabilities	$	4,642,327	$	305,375		$	213,729

Net assets	$	86,913,207	$	58,190,037		$	29,913,604


Net assets consist of:
Paid-in capital	$	82,504,897	$	68,985,075		$	35,468,157
Net unrealized appreciation (depreciation) of investments, futures contracts and translation of assets and liabilities in foreign currency		4,222,072		(6,315,706	)		(2,353,893	)
Accumulated net realized gain (loss) on investments, futures contracts and foreign currency transactions		186,238		(4,498,145	)		(3,197,616	)
Undistributed net investment income		—		18,813			(3,044	)

Net assets	$	86,913,207	$	58,190,037		$	29,913,604

Shares of beneficial interest outstanding		8,202,083		7,028,833			3,650,983

Net asset value per share	$	10.60	$	8.28		$	8.19


See Notes to Financial Statements.


Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		81



Statements of operations

Year ended June 30, 2010
	U.S. Bond Market Portfolio			U.S. Stock Market Portfolio			International Stock Market Portfolio

Investment income:
Dividends (net of taxes withheld of $0, $30 and $52,189, respectively)	$	–		$	1,084,047		$	729,200
Interest		3,199,433			7,846			228

Total investment income	$	3,199,433		$	1,091,893		$	729,428


Expenses:
Investment adviser fee (Note 6)		39,272			28,446			15,153
Administration fees (Note 6)		27,490			19,912			10,607
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		22,693			22,693			23,693
Legal fees		47,319			47,319			47,319
Portfolio accounting fees (Note 6)		118,205			86,297			117,526
Printing and postage expenses		8,579			8,579			8,579
Insurance expense		15,923			9,253			4,883
Miscellaneous		10,672			10,888			13,897

Total expenses	$	314,153		$	257,387		$	265,657


Waivers and reimbursements (Note 6):
Waiver of investment adviser fee		(39,272	)		(28,446	)		(15,153	)
Reimbursement of expenses by investment adviser		(78,520	)		(86,711	)		(159,578	)

Total waivers and reimbursements		(117,792	)		(115,157	)		(174,731	)

Net expenses		196,361			142,230			90,926

Net investment income		3,003,072			949,663			638,502


Realized and unrealized gain (loss) on investments, futures contracts and foreign currency transactions:
Net realized gain (loss) on affiliated investments, futures contracts and foreign currency transactions		324,807			(1,465,032	)		(426,888	)
Net realized gain on futures contracts		–			147,513			37,574
Net change in unrealized appreciation (depreciation) of investments, translation of assets and liabilities in foreign currency and futures contracts		3,471,706			7,510,330			1,822,915

Net realized and unrealized gain (loss) on investments, futures contracts and translation of assets and liabilities in foreign currency		3,796,513			6,192,811			1,433,601

Change in net assets resulting from operations	$	6,799,585		$	7,142,474		$	2,072,103


See Notes to Financial Statements.


82		AARP PORTFOLIOS 2010 ANNUAL REPORT		Financial Statements

Financial Statements (continued)



Statements of changes in net assets

	U.S. Bond Market Portfolio
	Year ended 6/30/10			Year ended 6/30/09

Increase (decrease) in net assets
Operations:
Net investment income	$	3,003,072		$	2,785,452
Net realized gain (loss) on investments, foreign currency transactions and futures contracts		324,807			104,785
Net change in unrealized appreciation (depreciation) of investments, translation of assets and liabilities in foreign currency and futures contracts		3,471,706			678,208

Change in net assets resulting from operations		6,799,585			3,568,445


Distributions to shareholders:
From net investment income		(3,035,358	)		(2,797,073	)
From net realized gains on investments		(196,480	)		(57,686	)

Change in net assets resulting from distributions to shareholders		(3,231,838	)		(2,854,759	)


Share transactions:
Proceeds from sales of shares		25,525,638			21,521,478
Net asset value of shares issued on reinvestment of dividends		3,231,838			2,854,760
Cost of shares redeemed		(11,621,206	)		(22,989,283	)

Change in net assets resulting from share transactions		17,136,270			1,386,955

Change in net assets		20,704,017			2,100,641


Net assets:
Beginning of year	$	66,209,190		$	64,108,549

End of year	$	86,913,207		$	66,209,190

Undistributed (distributions in excess of) net investment income included in net assets at end of period	$	—		$	33,572


See Notes to Financial Statements.


Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		83





U.S. Stock Market Portfolio						International Stock Market Portfolio
Year ended 6/30/10			Year ended 6/30/09			Year ended 6/30/10			Year ended 6/30/09



$	949,663		$	959,118		$	638,502		$	656,475

	(1,317,519	)		(2,964,812	)		(389,314	)		(2,746,124	)

	7,510,330			(11,289,643	)		1,822,915			(5,333,094	)

	7,142,474			(13,295,337	)		2,072,103			(7,422,743	)



	(910,406	)		(928,191	)		(593,826	)		(686,045	)
	–			(154,427	)		–			(15,298	)

	(910,406	)		(1,082,618	)		(593,826	)		(701,343	)



	13,970,892			14,611,660			6,976,375			8,816,114
	910,406			1,082,618			593,826			701,342
	(8,533,802	)		(7,446,130	)		(4,083,140	)		(3,666,812	)

	6,347,496			8,248,148			3,487,061			5,850,644

	12,579,564			(6,129,807	)		4,965,338			(2,273,442	)



$	45,610,473		$	51,740,280		$	24,948,266		$	27,221,708

$	58,190,037		$	45,610,473		$	29,913,604		$	24,948,266



$	18,813		$	5,855		$	(3,044	)	$	1,574


84		AARP PORTFOLIOS 2010 ANNUAL REPORT		Financial Statements

Financial Statements (continued)



Financial Highlights

(For a share outstanding throughout the period)

	U.S. Bond Market Portfolio
	Year ended 6/30/10			Year ended 6/30/09			Year ended 6/30/08			Year ended 6/30/07			Period ended 6/30/06¹
Net asset value, beginning of period	$	10.12		$	9.98		$	9.77		$	9.70		$	10.00
Income from investment operations:
Net investment income		0.40			0.44			0.48			0.49			0.19
Net realized and unrealized gain (loss) on investments, futures contracts and foreign currency transactions		0.51			0.15			0.22			0.07			(0.30	)

Total from investment operations		0.91			0.59			0.70			0.56			(0.11	)


Less distributions:
From net investment income		(0.40	)		(0.44	)		(0.49	)		(0.49	)		(0.19	)
From net realized gains on investments		(0.03	)		(0.01	)		–			–			–

Total distributions		(0.43	)		(0.45	)		(0.49	)		(0.49	)		(0.19	)

Net asset value, end of period	$	10.60		$	10.12		$	9.98		$	9.77		$	9.70

Total return^2,3		9.12	%		6.12	%		7.20	%		5.78	%		(1.05	)%


Ratios to average net assets:
Net expenses		0.25	%		0.25	%		0.25	%		0.25	%		0.25	%⁴
Net investment income		3.82	%		4.46	%		4.82	%		4.99	%		4.71	%⁴
Expense waiver/reimbursement⁵		(0.15	)%		(0.18	)%		(0.18	)%		(0.40	)%		(0.92	)%⁴

Supplemental data:
Net assets, end of period (000 omitted)	$	86,913		$	66,209		$	64,109		$	47,760		$	27,968
Portfolio turnover		66	%		88	%		62	%		91	%		112	%

¹For the period from December 30, 2005 (inception date) to June 30, 2006. ²Total returns for periods of less than one year are not annualized. ³Total returns reflect waivers and/or expense reimbursements. Without these waivers and/or reimbursements, total return would have been lower. ⁴Computed on an annualized basis. ⁵This expense decrease is reflected in both the net expense and net investment income ratios shown above. See Notes to Financial Statements.


Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		85







U.S. Stock Market Portfolio															International Stock Market Portfolio
Year ended 6/30/10			Year ended 6/30/09			Year ended 6/30/08			Year ended 6/30/07			Period ended 6/30/06¹			Year ended 6/30/10			Year ended 6/30/09			Year ended 6/30/08			Year ended 6/30/07			Period ended 6/30/06¹
$	7.27		$	10.15		$	11.91		$	10.08		$	10.00		$	7.66		$	11.08		$	13.00		$	10.53		$	10.00

	0.14			0.16			0.18			0.18			0.07			0.18			0.22			0.40			0.31			0.20

	1.01			(2.85	)		(1.63	)		1.84			0.08			0.52			(3.40	)		(1.75	)		2.54			0.50

	1.15			(2.69	)		(1.45	)		2.02			0.15			0.70			(3.18	)		(1.35	)		2.85			0.70



	(0.14	)		(0.16	)		(0.18	)		(0.17	)		(0.07	)		(0.17	)		(0.23	)		(0.39	)		(0.34	)		(0.17	)
	–			(0.03	)		(0.13	)		(0.02	)		–			–			(0.01	)		(0.18	)		(0.04	)		–

	(0.14	)		(0.19	)		(0.31	)		(0.19	)		(0.07	)		(0.17	)		(0.24	)		(0.57	)		(0.38	)		(0.17	)

$	8.28		$	7.27		$	10.15		$	11.91		$	10.08		$	8.19		$	7.66		$	11.08		$	13.00		$	10.53

	15.65	%		(26.49	)%		(12.35	)%		20.23	%		1.52	%		8.99	%		(28.75	)%		(10.62	)%		27.41	%		7.10	%



	0.25	%		0.25	%		0.25	%		0.25	%		0.25	%⁴		0.30	%		0.30	%		0.30	%		0.30	%		0.30	%⁴
	1.67	%		2.24	%		1.70	%		1.67	%		1.69	%⁴		2.11	%		3.00	%		2.86	%		2.72	%		4.03	%⁴
	(0.20	)%		(0.35	)%		(0.25	)%		(0.53	)%		(1.34	)%⁴		(0.58	)%		(1.01	)%		(0.75	)%		(0.90	)%		(1.59	)%⁴


$	58,190		$	45,610		$	51,740		$	45,587		$	25,669		$	29,914		$	24,948		$	27,222		$	27,279		$	18,673
	13	%		14	%		10	%		5	%		1	%		7	%		25	%		12	%		4	%		3	%


86		AARP PORTFOLIOS 2010 ANNUAL REPORT		Notes to Financial Statements

Notes to Financial Statements

1. Organization

The 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 inception date was December 30, 2005.

The investment objective of the U.S. Bond Market Portfolio is to seek to produce the returns provided by the Barclays Capital 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 All Country World Index, excluding the U.S. 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 $47.3 million at June 30, 2010) 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.

The AARP Funds and Portfolios will be liquidated no later than October 1, 2010. On liquidation date, the AARP Funds and AARP Portfolios will redeem all of it’s outstanding shares. Liquidation proceeds to the shareholders of the AARP Funds will be paid entirely in cash. AARP Financial, Inc. has agreed to pay all liquidation related expenses other than brokerage expenses. Please see footnote 2, subsequent events for further information on the AARP Funds and AARP Portfolios liquidation.

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


Notes to Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		87

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. 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. An investment’s valuation may differ depending on the method used and factors considered in determining value pursuant to the Portfolios fair value procedures. The Investment Manager monitors intervening events that may affect the value of securities held in each Portfolio and, in accordance with procedures adopted by the Portfolio’s Trustees, will adjust the prices of securities traded in foreign markets, as appropriate, to reflect the impact of events that have occurred. The International Stock Market Portfolio may use a fair valuation model to value international equity securities in determining net asset value 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.

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. There is 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 events, interest rates, prepayment speeds, credit risk, etc.)

•

Level 3 — significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of investments)


88		AARP PORTFOLIOS 2010 ANNUAL REPORT		Notes to Financial Statements

Notes to Financial Statements (continued)

The following is a summary of the inputs used as of June 30, 2010 in valuing the Portfolios’ investments carried at value:

U.S. Bond Market Portfolio


ASSETS VALUATION INPUT

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total


Asset-Backed Securities	$	–	$	284,919	$	–	$	284,919
Corporate Bonds
Consumer Discretionary		–		1,632,051		–		1,632,051
Consumer Staples		–		590,454		–		590,454
Energy		–		1,783,913		–		1,783,913
Financials		–		6,511,117		–		6,511,117
Health Care		–		962,288		–		962,288
Industrials		–		1,413,058		–		1,413,058
Information Technology		–		453,280		–		453,280
Materials		–		401,334		–		401,334
Telecommunication Services		–		891,456		–		891,456
Utilities		–		1,121,907		–		1,121,907
Total Corporate Bonds		–		15,760,858		–		15,760,858
International Debt		–		4,387,013		–		4,387,013
Mortgage-Backed Securities		–		29,946,400		–		29,946,400
U.S. Treasury
U.S. Treasury Bonds		3,231,865		–		–		3,231,865
U.S. Treasury Notes		24,759,302		–		–		24,759,302
Total U.S. Treasury		27,991,167		–		–		27,991,167
U.S. Government Agencies		5,556,557		174,958		–		5,731,515
Commercial Mortgage-Backed Securities		–		2,769,639		–		2,769,639
Municipal Bonds		–		462,443		–		462,443
Mutual Fund		2,924,802		–		–		2,924,802
Total Investments	$	36,472,526	$	53,786,230	$	–	$	90,258,756

U.S. Stock Market Portfolio

ASSETS VALUATION INPUT

Description

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

Common Stocks

Consumer Discretionary

6,621,112

–

6,621,112

Consumer Staples

4,899,944

–

4,899,944

Energy

5,355,547

–

5,355,547

Financials

9,514,360

–

9,514,360

Health Care

6,760,771

–

6,760,771

Industrials

6,769,429

–

6,769,429


Notes to Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		89



Description	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total


Information Technology	$	10,040,734		$	–	$	–	$	10,040,734
Materials		2,267,460			–		–		2,267,460
Telecommunication Services		1,718,444			–		–		1,718,444
Utilities		2,367,618			–		–		2,367,618
Total Common Stocks		56,315,419			–		–		56,315,419
Mutual Funds		911,524			–		–		911,524
U.S. Treasury		79,981			–		–		79,981
Total Investments		57,306,924			–		–		57,306,924
Futures		(47,689	)		–		–		(47,689	)
Total Financial Instruments	$	(47,689	)	$	–	$	–	$	(47,689	)

International Stock Market Portfolio

ASSETS VALUATION INPUT

Description

Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Total

Common Stocks

Aerospace & Defense

152,255

–

152,255

Air Freight & Couriers

67,446

–

67,446

Airlines

42,658

–

42,658

Auto Components

139,177

–

139,177

Automobiles

612,748

–

612,748

Banks

2,910,183

–

2,910,183

Beverages

407,310

–

407,310

Biotechnology

2,821

–

2,821

Building Products

107,981

–

107,981

Chemicals

611,215

–

611,215

Commercial Services & Supplies

183,482

–

183,482

Communications Equipment

152,008

–

152,008

Computers & Peripherals

101,363

–

101,363

Construction & Engineering

134,778

–

134,778

Construction Materials

137,072

–

137,072

Containers & Packaging

27,839

–

27,839

Distributors

109,640

–

109,640

Diversified Financials

597,789

–

597,789

Diversified Telecommunication Services

741,166

–

741,166

Electric Utilities

647,305

–

647,305

Electrical Equipment

468,019

–

468,019

Electronic Equipment & Instruments

231,129

–

231,129

Energy Equipment & Services

74,276

–

74,276

Food & Drug Retailing

389,373

–

389,373

Food Products

691,977

–

691,977

Gas Utilities

158,456

–

158,456

Health Care Equipment & Supplies

240,400

–

240,400

Health Care Providers & Services

49,666

–

49,666


90		AARP PORTFOLIOS 2010 ANNUAL REPORT		Notes to Financial Statements

Notes to Financial Statements (continued)



Description	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total


Hotels Restaurants & Leisure	$	162,469	$	–	$	–	$	162,469
Household Durables		275,052		–		–		275,052
Household Products		51,103		–		–		51,103
Industrial Conglomerates		164,931		–		–		164,931
Insurance		784,952		124		–		785,076
Internet & Catalog Retail		18,809		–		–		18,809
Internet Software & Services		67,979		–		–		67,979
IT Consulting & Services		50,048		–		–		50,048
Leisure Equipment & Products		66,555		–		–		66,555
Machinery		411,161		–		–		411,161
Marine		99,656		–		–		99,656
Media		301,786		–		–		301,786
Metals & Mining		1,234,896		–		–		1,234,896
Multi-Line Retail		123,589		–		–		123,589
Multi-Utilities		101,351		–		–		101,351
Office Electronics		134,967		–		–		134,967
Oil & Gas		1,511,975		–		–		1,511,975
Paper & Forest Products		56,957		–		–		56,957
Personal Products		162,478		–		–		162,478
Pharmaceuticals		1,465,337		–		–		1,465,337
Real Estate		565,479		–		–		565,479
Road & Rail		215,932		–		–		215,932
Semiconductor Equipment & Products		142,740		–		–		142,740
Software		197,653		–		–		197,653
Specialty Retail		226,440		–		–		226,440
Textiles & Apparel		149,980		–		–		149,980
Tobacco		251,512		–		–		251,512
Trading Companies & Distributors		215,523		–		–		215,523
Transportation Infrastructure		121,214		–		–		121,214
Water Utilities		18,543		–		–		18,543
Wireless Telecommunication Services		364,947		–		–		364,947
Total Common Stocks		19,905,546		124		–		19,905,670
Preferred Stocks
Automobiles		44,306		–		–		44,306
Electrical Equipment		8,482		–		–		8,482
Health Care Providers & Services		11,135		–		–		11,135
Household Products		20,207		–		–		20,207
Multi-Utilities		5,107		–		–		5,107
Total Preferred Stocks		89,237		–		–		89,237
Rights		387		1,960				2,347
Warrants		135		–		–		135
Mutual Funds
Cash Equivalent		311,954		–		–		311,954
Exchange-Traded Funds		9,145,269		–		–		9,145,269
Total Mutual Funds		9,457,223		–		–		9,457,223
Total Investments		29,452,528		2,084		–		29,454,612


Notes to Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		91



Description	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)		Total


Futures	$	(37,180	)	$	$	–	$	(37,180	)
Foreign Exchange Contracts		82						82
Total Financial Instruments	$	(37,098	)	$	$	–	$	(37,098	)

REPURCHASE AGREEMENTS

The Portfolios 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, 2010, 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 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 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


92		AARP PORTFOLIOS 2010 ANNUAL REPORT		Notes to Financial Statements

Notes to Financial Statements (continued)

“variation margin” account. Daily, the U.S. Stock Market Portfolio receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. The International Stock Market Portfolio payable for daily variation margin on the Asset and Liabilities page reflects the cumulative unrealized gain/loss position on current future transactions. 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.

During the year ended June 30, 2010, the U.S. Stock Market Portfolio and the International Stock Market Portfolio entered into 60 and 58 futures contracts, respectively.

FOREIGN EXCHANGE CONTRACTS

The International Stock Market Portfolio enters into foreign currency commitments for the delayed delivery of securities or foreign currency exchange transactions. The Portfolio enters 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 purposes as unrealized until the settlement date.

At June 30, 2010, the Portfolio had outstanding foreign currency commitments as follows:



Settlement Date	Foreign currency units to receive	In exchange for	Contracts at value		Unrealized Appreciation/ Depreciation


Contracts Purchased
9/30/2010	200,000 EUR	247,140 USD	$	245,933	$	(1,207	)
9/30/2010	64,000 GBP	96,000 USD		95,657		(343	)
9/30/2010	15,200,000 JPY	170,371 USD		172,003		1,632

Net unrealized appreciation on foreign exchange contracts					$	82

During the year ended June 30, 2010, the International Stock Market Portfolio entered into 33 foreign exchange contracts.


Notes to Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		93

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 (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.


94		AARP PORTFOLIOS 2010 ANNUAL REPORT		Notes to Financial Statements

Notes to Financial Statements (continued)

Additional Disclosure Related to Derivative Instruments

Fair Value of Derivative Instruments as of June 30, 2010

U.S. Stock Market Portfolio



	Asset			Liability

	Statement of Assets and Liabilities Location	Fair Value		Statement of Assets and Liabilities Location	Fair Value
Derivatives not accounted for as hedging instruments under ASC Topic 815
Equity contracts	Receivable for daily variation margin	$	–	Payable for daily variation margin	$	(47,689	)*

International Stock Market Portfolio



	Asset			Liability

	Statement of Assets and Liabilities Location	Fair Value		Statement of Assets and Liabilities Location	Fair Value
Derivatives not accounted for as hedging instruments under ASC Topic 815
Equity contracts	Receivable for daily variation margin	$	–	Payable for daily variation margin	$	(37,180	)*
Foreign exchange contracts	Receivable for foreign exchange contracts	$	1,632	Payable for foreign exchange contracts	$	1,550

Includes cumulative appreciation/depreciation of futures contracts as reported in the footnotes to the Portfolio of Investments. The U.S. Stock Market Portfolio current day’s variation margin is reported within the Statement of Asset and Liabilities. The International Stock Market Portfolio variation reflects all current open futures cumulative gain/loss on open futures positions.

The Effect of Derivative Instruments on the Statement of Operations for the Year Ended June 30, 2010

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income


U.S. Stock Market Portfolio	Futures
Equity contracts	$	147,513


AARP International Stock Market Portfolio	Foreign Exchange Contracts			Futures		Total

Equity contracts	$	–		$	37,574	$	37,574
Foreign exchange contracts	$	(1,416	)	$	–	$	(1,416	)
Total	$	(1,416	)	$	37,574	$	36,158

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income


U.S. Stock Market Portfolio	Futures
Equity contracts	$	(28,063)


International Stock Market Portfolio	Foreign Exchange Contracts		Futures			Total

Equity contracts	$	–	$	(13,350	)	$	(13,350	)
Foreign exchange contracts	$	215	$	–		$	215
Total	$	215	$	(13,350	)	$	(13,135	)


Notes to Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		95

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.

Management has analyzed the Portfolios’ tax position taken on federal income tax returns for all open years and has concluded that as of June 30, 2010, no provision for income taxes would be required in the Portfolios’ financial statements. As of June 30, 2010, tax years 2007 through 2010 remain subject to examination by the Portfolios’ major tax jurisdictions, which include the United States of America and the state of Delaware.

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 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, 2010, the U.S. Bond Market Portfolio paid $24 in overdraft fees and the U.S. Stock Market Portfolio paid $8 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


96		AARP PORTFOLIOS 2010 ANNUAL REPORT		Notes to Financial Statements

Notes to Financial Statements (continued)

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.

SUBSEQUENT EVENTS

At a meeting on July 20, 2010, the AARP Funds and Portfolios Board of Trustees approved Plans of Liquidation, Dissolution and Termination for the AARP Funds and AARP Portfolios. Shareholders of the AARP Funds will receive checks for the value of the shares they hold on the date of liquidation, which is expected to be on or about October 1, 2010 (the “Liquidation Date”). On the Liquidation Date, the AARP Funds and AARP Portfolios will automatically redeem all of their outstanding shares at the net asset value of such shares after provision for all charges, expenses and liabilities of the Funds and Portfolios. AARP Financial, Inc. has agreed to pay all liquidation related expenses other than brokerage expenses. Liquidation proceeds to shareholders of the AARP Funds will be paid in cash.

At the close of business on July 20, 2010, the AARP Funds closed to new shareholders, and no longer accept orders from existing shareholders to purchase additional shares. However, exchanges into the AARP Money Market Fund will be permitted up to the Liquidation Date.

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, 2010		Year Ended June 30, 2009

U.S. Bond Market Portfolio
Shares sold	2,464,334		2,150,676
Dividends and/or distributions reinvested	311,966		286,366
Shares redeemed	(1,115,011	)	(2,319,527	)
Net increase	1,661,289		117,515

U.S. Stock Market Portfolio
Shares sold	1,622,022		2,035,070
Dividends and/or distributions reinvested	102,002		151,069
Shares redeemed	(972,221	)	(1,005,288	)
Net increase	751,803		1,180,851

International Stock Market Portfolio
Shares sold	784,293		1,214,155
Dividends and/or distributions reinvested	66,547		91,817
Shares redeemed	(456,884	)	(505,129	)
Net increase	393,956		800,843


Notes to Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		97

4. Purchases and sales of securities

The aggregate cost of purchases and proceeds from sales of securities for the year ended June 30, 2010, excluding U.S. Government and short-term obligations were as follows:


Portfolio Name	Purchases		Sales

U.S. Bond Market Portfolio	$	6,790,715	$	3,331,251
U.S. Stock Market Portfolio	$	12,286,662	$	6,961,770
International Stock Market Portfolio	$	5,246,324	$	1,937,417

The aggregate cost of purchases and proceeds from sales of U.S. government securities for U.S. Bond Market Portfolio, for the year ended June 30, 2010 was $62,643,436 and $48,027,616, respectively.

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.

The tax character of distributions paid during the fiscal years ended June 30, 2010 and 2009, was as follows:



	Distributions paid from:


	2010						2009


Portfolio name	Ordinary income		Long-term capital gains		Total		Ordinary Income		Long-term capital gains		Total


U.S. Bond Market Portfolio	$	3,162,532	$	69,306	$	3,231,838	$	2,814,047	$	40,712	$	2,854,759
U.S. Stock Market Portfolio	$	910,406	$	–	$	910,406	$	928,301	$	154,317	$	1,082,618
International Stock Market Portfolio	$	593,826	$	–	$	593,826	$	686,045	$	15,298	$	701,343

Reclassifications have been made to the Portfolios’ components of net assets to reflect income and gains available for distribution under income tax regulations. The primary permanent differences causing such reclassifications are due to mortgage paydown gains and losses, foreign currency losses, real estate investment trusts and passive foreign


98		AARP PORTFOLIOS 2010 ANNUAL REPORT		Notes to Financial Statements

Notes to Financial Statements (continued)

investment companies. During the fiscal year ended June 30, 2010, the following amounts were reclassified:


Portfolio name	Paid in capital		Undistributed net investment income (loss)			Accumulated net realized gains (loss)


U.S. Bond Market Portfolio	$	–	$	(1,286	)	$	1,286
U.S. Stock Market Portfolio	$	320	$	(26,299	)	$	25,979
International Stock Market Portfolio	$	94	$	(49,294	)	$	49,200

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

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.


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	$	93,104	$	103,980	$	–		$	–		$	4,211,226
U.S. Stock Market Portfolio	$	18,813	$	–	$	(451,585	)	$	–		$	(10,362,266	)
International Stock Market Portfolio	$	21,160	$	–	$	(2,439,044	)	$	(100,959	)	$	(3,035,710	)

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, 2010, 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	$	86,047,529	$	4,332,162	$	120,935	$	4,211,227
U.S. Stock Market Portfolio	$	67,669,191	$	4,477,912	$	14,840,178	$	(10,362,266	)
International Stock Market Portfolio	$	32,466,250	$	2,829,014	$	5,840,652	$	(3,011,638	)


Notes to Financial Statements		AARP PORTFOLIOS 2010 ANNUAL REPORT		99

At June 30, 2010, the Funds had capital loss carryforwards which will reduce the Funds’ taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Funds of any liability for federal tax. Pursuant to the Code, such capital loss carryforwards will expire as follows:


	2017		2018		Total Capital Loss Carryforwards
U.S. Stock Market Portfolio	$	150,887	$	300,698	$	451,585
International Stock Market Portfolio	$	163,356	$	2,275,688	$	2,439,044

Due to liquidation of the AARP Funds and AARP Portfolios on or before October 1, 2010, some or all of the capital loss carryforwards will expire on liquidation date.

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, 2010, 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	%

For the year ended June 30, 2010, AARP Financial contractually waived/reimbursed the following fees.


Portfolio name	Management fee waiver		Reimbursement of other operating expenses

U.S. Bond Market Portfolio	$	39,272	$	78,520
U.S. Stock Market Portfolio	$	28,446	$	86,711
International Stock Market Portfolio	$	15,153	$	159,578


100		AARP PORTFOLIOS 2010 ANNUAL REPORT		Notes to Financial Statements

Notes to Financial Statements (continued)

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. Effective June 1, 2010 there was an amendment to each of (i) the Sub-Administration Agreement dated December 30, 2005 between AARP Financial Incorporated (“AFI”) and State Street Bank and Trust Company (“State Street”) with respect to AARP Funds and (ii) the Sub-Administration Agreement dated December 30, 2005 between AFI and State Street with respect to AARP Portfolios (together, the “Agreements”). The monthly payable under the agreement changed from an asset based to a per fund fee. The monthly fee for the 8 AARP Funds and Portfolios will be $25,000 per month and the fee will be prorated for partial months and any fund terminations. Shareholders of the AARP Funds will not be bearing this increase in expenses as it will be borne by AFI. 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.

Each Portfolio pays to State Street an annual fee at the rate of $4,000 for transfer agency services. State Street has in turn delegated transfer agency services to its affiliate, Boston Financial Data Services, Inc.

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” and one Trustee who is affiliated with the Investment Adviser to the Portfolios (“Interested Trustee”). The Interested Trustee and Officers of the Trust do not receive any compensation from the Portfolios for their service on the Board. The compensation of the Independent Trustees consists of an annual retainer paid quarterly. Compensation paid by the Portfolios to the Independent Trustees is included in the Portfolios’ Statements of Operations. The aggregate compensation paid to Trustees by Trust was $60,000 for the reporting period.


Report of Independent Registered Public Accounting Firm		AARP PORTFOLIOS 2010 ANNUAL REPORT		101

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

AARP Portfolios:

We have audited the accompanying statements of assets and liabilities of U.S. Bond Market Portfolio, U.S. Stock Market Portfolio, and International Stock Market Portfolio, each a series of AARP Portfolios (the Portfolios), including the portfolios of investments, as of June 30, 2010, 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 five-year period then ended. These financial statements 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 auditing 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 also 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, 2010, by correspondence with the custodian 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. Bond Market Portfolio, U.S. Stock Market Portfolio, and International Stock Market Portfolio as of June 30, 2010, 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 five-year period then ended, in conformity with U.S. generally accepted accounting principles.

As discussed in note 1 to the financial statements, the Portfolios’ Board of Trustees has decided to cease operations and liquidate the Portfolios no later than October 1, 2010. Our opinion has not been modified in respect to this matter.

LOGO

Boston, Massachusetts

August 25, 2010


102		AARP PORTFOLIOS 2010 ANNUAL REPORT		AARP Supplemental Information

AARP Portfolios—

Supplemental Information

2010 U.S. Tax Distribution Information to Shareholders

Corporate Dividends Received Deduction. For the year ended June 30, 2010, a percentage of dividends distributed by the Funds 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	100.00
International Stock Market Portfolio	–

Qualified Dividend Income. Dividends distributed by the Funds during the fiscal year ended June 30, 2010, 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	100.00			1,009,893
International Stock Market Portfolio	100.00			737,993

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.aarpfinancial.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 Supplemental Information		AARP PORTFOLIOS 2010 ANNUAL REPORT		103

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.


104		AARP PORTFOLIOS 2010 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 one interested trustee and 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 includes information about the trustees and officers of the Trust, including their:

•

business addresses;

•

ages;

•

principal occupations during the past five years; and

•

other directorships of publicly traded companies or funds.

Shareholders may communicate with the Board and officers by sending written correspondence to AARP Funds c/o the Funds’ Secretary, 650 F Street NW, Washington, D.C. 20004.

Trustees and officers



Name, Address and Age	Position(s) with the Trust and Term of Office⁽¹⁾	Principal Occupation(s) During Past 5 Years	Number of Funds and Portfolios in Fund Complex⁽²⁾ Overseen by Trustee	Other Directorships Held by Trustee

Independent trustees

PETER C. CLAPMAN c/o AARP Financial Incorporated 650 F Street, N.W., Washington, DC 20004 Age: 74	Chairman of the Board and Trustee since 2005	Consultant, governance advisory services (July 2005–present); Director, National Association of Corporate Directors (non–profit private director education) (January 2005–present); Head of U.S. operations, Governance for Owners (governance services and consulting) (June 2005–present); Member, NASDAQ Listing Council (2005–present); and Senior Vice President and Chief Counsel, TIAA–CREF (financial services, pension and investment products) (1972–July 2005).	8	Director, iPass, Inc. (February 2007–present).


About the Portfolios’ Board of Trustees and Officers		AARP PORTFOLIOS 2010 ANNUAL REPORT		105



Name, Address and Age	Position(s) with the Trust and Term of Office⁽¹⁾	Principal Occupation(s) During Past 5 Years	Number of Funds and Portfolios in Fund Complex⁽²⁾ Overseen by Trustee	Other Directorships Held by Trustee

RICHARD M. REILLY c/o AARP Financial Incorporated 650 F Street, N.W., Washington, DC 20004 Age: 72	Trustee since 2006	Self-Employed Consultant (November 2002–present); Trustee, International Foundation for Retirement Education (InFRE) (September 2006–present); Senior Vice President, Allmerica Financial Corp. (financial services holding company) (November 2001–November 2002); and President, Allmerica Financial Services (investments/insurance) (1995–November 2001).	8	None.

ELLEN B. SAFIR, CFA c/o AARP Financial Incorporated 650 F Street, N.W., Washington, DC 20004 Age: 65	Trustee since 2006	Chief Executive Officer, New Century Advisors, LLC (registered investment adviser) (2002–present); President, CFA Society of Washington, DC (July 2007–June 2008); Member, Investment Committee, United States Holocaust Memorial Museum (June 1997–present); and Managing Director, Fixed Income and Currencies, Howard Hughes Medical Institute (medical research) (1986–2002).	8	None.

LYNN E. TURNER c/o AARP Financial Incorporated 650 F Street, N.W., Washington, DC 20004 Age: 58	Trustee since 2005	Trustee, Colorado Public Employees Retirement Association (COPERA) (August 2007–present); Managing Director/Senior Advisor, LECG (forensic accounting) (May 2009–present); Managing Director/Senior Advisor, Kroll Inc. (forensic accounting) (July 2003–March 2009); Managing Director of Research, Glass Lewis & Co. LLC (financial and proxy research) (July 2003–June 2007); Professor, Colorado State University (August 2001–June 2003); and Chief Accountant, Securities and Exchange Commission (July 1998–August 2001).	8	Director, Guidance Software, Inc. (April 2007– February 2008); Director, Sun Microsystems, Inc. (November 2003–October 2006).


106		AARP PORTFOLIOS 2010 ANNUAL REPORT		About the Portfolios’ Board of Trustees and Officers

About the Portfolios’ Board of Trustees and Officers (unaudited) (continued)



Name, Address and Age	Position(s) with the Trust and Term of Office⁽¹⁾	Principal Occupation(s) During Past 5 Years	Number of Funds and Portfolios in Fund Complex⁽²⁾ Overseen by Trustee	Other Directorships Held by Trustee

Interested trustee

ROBERT R. HAGANS, JR.⁽³⁾ c/o AARP Financial Incorporated 650 F Street, N.W., Washington, DC 20004 Age: 55	Trustee since 2008	Chief Financial Officer, AARP (2001–present); Director, AARP Financial Incorporated (2007–2008); and Director, Boys and Girls Club of America (2008-present).	8	Treasurer and Director, Industrial Bank, NA (2000–present)

⁽¹⁾	Each trustee may serve until his/her death, resignation, removal, retirement or declaration of incompetence by a court of appropriate jurisdiction.

⁽²⁾	The “Fund Complex” consists of the five Funds discussed in this report, and three series of AARP Portfolios, which are not offered to the public for investment.

⁽³⁾	Mr. Hagans is considered an interested trustee due to his position as Chief Financial Officer of AARP.



Name, Address and Age	Position(s) with the Trust and Term of Office	Principal Occupation(s) During Past 5 Years

Officers

RICHARD M. HISEY, CFA AARP Financial Incorporated Two Highwood Drive, 2nd Floor, Tewksbury MA 01876 Age: 51	President	President, AARP Financial Incorporated (May 2008–February 2010); Chief Investment Officer, AARP Financial Incorporated (April 2006–February 2010); 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); and Senior Vice President, The Bank of New York (2000–2002).

JEFFREY J. GABOURY AARP Financial Incorporated Two Highwood Drive, 2nd Floor, Tewksbury MA 01876 Age: 41	Treasurer	Assistant Treasurer, AARP Financial Incorporated (May 2008–November 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); and Director of Compliance, Investors Bank & Trust Company (August 1996–November 2004).

SUSAN KIRKPATRICK AARP Financial Incorporated Two Highwood Drive, 2nd Floor, Tewksbury, MA 01876 Age: 44	Chief Compliance Officer	Chief Compliance Officer, AARP Financial Incorporated (November 2007present); Director of Compliance, AARP Financial Incorporated (December 2005–November 2007); Chief Compliance Officer, Grail Partners (investment banking) (March 2005–December 2005); Director, Devonshire Financial Group (consulting) (September 2004–December 2005); and Director, NewRiver, Inc. (electronic delivery of compliance documents) (July 1999–September 2004).


About the Portfolios’ Board of Trustees and Officers		AARP PORTFOLIOS 2010 ANNUAL REPORT		107



Name, Address and Age	Position(s) with the Trust and Term of Office	Principal Occupation(s) During Past 5 Years

MARC DUFFY AARP Financial Incorporated 650 F Street, N.W., Washington, DC 20004 Age: 52	Secretary	Associate General Counsel, AARP Financial Incorporated (August 2006–present); Assistant General Counsel, E*TRADE Financial Corporation (January 2004–August 2006); and Assistant General Counsel, Legg Mason Wood Walker, Incorporated (September 1999–January 2004).

Additional information about AARP Portfolios’ 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


		ARP-AR-002-0810

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 officer, 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 this 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 this 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 a 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 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, 2010 and June 30, 2009 were $69,445 and $67,937.50, 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, 2010 and June 30, 2009 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, 2010 and June 30, 2009, 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, 2010 and June 30, 2009, 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, 2010 and June 30, 2009, 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, 2010 and June 30, 2009, the Registrant was billed $19,995 and $26,040, respectively by another accounting firm for tax compliance, tax advice, tax planning and tax return preparation.

During the fiscal years ended June 30, 2010 and June 30, 2009, 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, 2010 and June 30, 2009, 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, 2010 and June 30, 2009, 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 AARP Portfolios’ 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 AARP Portfolios’ 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.

None 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)

During the fiscal years ended June 30, 2010 and June 30, 2009, the aggregate non-audit fees billed by the Registrant’s independent registered public accounting firm for services rendered to the Registrant, the Registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant were $0 and $0, respectively.

(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 Management 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. During the reporting period for this Form N-CSR, there were no material changes made to these procedures.

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”) 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 and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934.

(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) 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 referred to in Item 2 is attached hereto.

(a)(2)		The certifications required by Rule 30a-2(a) of the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley 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 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 30, 2010

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 30, 2010



By:		/s/ Jeffrey J. Gaboury
		Jeffrey J. Gaboury
		Treasurer (principal financial officer) of AARP Portfolios

Date: August 30, 2010

AARP Portfolios Inactive N-CSRCertified annual shareholder report (management investment company)