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: 811-5075
The AAL Mutual Funds
(Exact name of registrant as specified in charter)
625 Fourth Avenue South
Minneapolis, Minnesota 55415
(Address of principal executive offices) (Zip code)
John C. Bjork, Assistant Secretary
625 Fourth Avenue South
Minneapolis, Minnesota 55415
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 340-7005
Date of fiscal year end: April 30
Date of reporting period: April 30, 2003
Item 1. Report to Stockholders
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The AAL Mutual Funds
Annual Report
April 30, 2003
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Table of Contents
President's Letter 1
The Economy and Markets in Review 2
Portfolio Perspectives
The AAL Technology Stock Fund 4
The AAL Aggressive Growth Fund 6
The AAL Small Cap Stock Fund 8
The AAL Small Cap Index Fund II 10
The AAL Small Cap Value Fund 12
The AAL Mid Cap Stock Fund 14
The AAL Mid Cap Index Fund 16
The AAL Mid Cap Index Fund II 18
The AAL International Fund 20
The AAL Capital Growth Fund 22
The AAL Large Company Index 24
The AAL Large Company Index Fund II 26
The AAL Equity Income Fund 28
The AAL Balanced Fund 30
The AAL High Yield Bond Fund 32
The AAL Municipal Bond Fund 34
The AAL Bond Fund 36
The AAL Bond Index Fund 38
The AAL Money Market Fund 40
Report of Independent Accountants 42
Schedules of Investments
The AAL Technology Stock Fund 43
The AAL Aggressive Growth Fund 45
The AAL Small Cap Stock Fund 48
The AAL Small Cap Index Fund II 51
The AAL Small Cap Value Fund 59
The AAL Mid Cap Stock Fund 62
The AAL Mid Cap Index Fund 65
The AAL Mid Cap Index Fund II 71
The AAL International Fund 77
The AAL Capital Growth Fund 79
The AAL Large Company Index 81
The AAL Large Company Index Fund II 88
The AAL Equity Income Fund 95
The AAL Balanced Fund 98
The AAL High Yield Bond Fund 107
The AAL Municipal Bond Fund 114
The AAL Bond Fund 135
The AAL Bond Index Fund 140
The AAL Money Market Fund 149
Statement of Assets and Liabilities 152
Statement of Operations 156
Statement of Changes in Net Assets 160
Notes to Financial Statements 164
Financial Highlights
The AAL Technology Stock Fund 180
The AAL Aggressive Growth Fund 180
The AAL Small Cap Stock Fund 182
The AAL Small Cap Index Fund II 182
The AAL Small Cap Value Fund 184
The AAL Mid Cap Stock Fund 184
The AAL Mid Cap Index Fund 186
The AAL International Fund 186
The AAL Mid Cap Index Fund II 187
The AAL Capital Growth Fund 188
The AAL Large Company Index 188
The AAL Large Company Index Fund II 188
The AAL Equity Income Fund 190
The AAL Balanced Fund 190
The AAL High Yield Bond Fund 192
The AAL Municipal Bond Fund 192
The AAL Bond Fund 194
The AAL Bond Index Fund 194
The AAL Money Market Fund 196
Trustees and Officers of The AAL Mutual Funds 198
[PHOTO OMITTED: PAMELA J. MORET]
Dear Member:
We are pleased to provide you with the annual report for the 12 months ended April 30, 2003, for The AAL Mutual Funds, managed by Thrivent Investment Management. In this report, you will find detailed information about The AAL Mutual Funds, including summaries prepared by each portfolio manager describing performance, market conditions and management strategies during the 12-month period. In addition, Jim Abitz, Thrivent Investment Management's chief investment officer, reviews the larger economic environment influencing your investment performance in his Economic and Market Overview.
After several challenging years, all the major investment categories have moved into positive territory for 2003 year-to-date. While it is far too early to know if the bear market has truly gone into hibernation, there is no question that the U.S. economy has shown some improvements of late. International tension has ebbed somewhat from the high anxiety environment seen earlier in the year, though global hotspots certainly remain. The economy continues to plow ahead with steady, if slow, growth, and consumer confidence has risen in recent months. While we are heartened by the improvements, volatility remains ever-present. Thus, now is a wonderful opportunity to review one's investment portfolio for proper balance, risk temperament, and overall strategy. I encourage you to contact your Thrivent Investment Management representative if you have any questions. He or she is there to help and would welcome the chance to do so.
Transition and change isn't limited solely to our nation's financial markets -- Thrivent Investment Management has recently adopted a new strategy for our mutual fund products. This new course not only renews our already strong commitment to our mutual funds, but we also expect it will enhance our ability to provide you with stronger product offerings, a wider variety of choices, and complementary investment options from select outside firms that share our values and integrity, as well as a commitment to excellent money management. We believe that implementation of this strategy will further enhance our ability to offer top-shelf investments and will strongly benefit our member investors. Be sure to ask your Thrivent Investment Management representative about the Lutheran Brotherhood Family of Funds which feature a wide assortment of asset classes that could complement your current portfolio.
The financier, Bernard Baruch, once said, "Now is always the hardest time to invest." His words ring particularly true in light of the host of difficulties around which the U.S. economy, financial markets, and investors have navigated over the past few years. I would also suggest that Mr. Baruch's quote could be tweaked to read, "Now is always the hardest time to stick to an investment strategy or plan." Despite much uncertainty and dramatic market fluctuations, history has shown time and time again that betting against the long-term strength and resilience of the U.S. economy and financial markets is an unwise wager. Be assured that Thrivent Investment Management is here to serve -- no matter how the markets are performing -- with trustworthy advice and financial solutions to help you meet your individual goals.
Yours Sincerely,
/S/ PAMELA J. MORET
Pamela J. Moret
President
The AAL Mutual Funds
[PHOTO OMITTED: JIM ABITZ]
April 30, 2003
Jim Abitz
Senior Vice President, and
Chief Investment Officer
Economic and Market Overview
The financial markets rode a roller coaster of emotion during the twelve months ended April 30th, 2003 with market losses as the steady march toward the possibility of war with Iraq created investor anxiety. When the period ended in resolution and a decisive military victory, the markets rebounded impressively. Despite the strong finish, all equity investment categories posted negative returns with most losses coming in the late spring through the fall of 2002. High-quality bonds continued their strong performance as a result of more risk-averse investors questioning the speed and endurance of the U.S. economic recovery and seeking safety in this asset class. High-yield bonds, after a long stretch of weak performance brought on by market liquidity and cash flow questions, recorded torrid gains as investors craving yield poured money into the asset class.
U.S. Economy
Economic growth, while not robust, continued to plod forward at a 1-2% rate. The war on terrorism, geopolitical anxieties leading up to the war on Iraq, higher energy prices in the first quarter and unseasonably cold weather all teamed to temper the pace of economic activity in early 2003. The overall direction for the U.S. economic recovery remains open for discussion as job growth and capital spending by businesses has yet failed to materialize. The nation's jobless rate has been mired around the 6% mark, an eight-year high, for some time now and unemployment claims continue unabated. Capital spending, and by extension manufacturing and industrial production, remains anemic although many economists believe spending is set to pick up as a result of the war with Iraq reaching a conclusion. Second quarter reports on corporate spending and production will be key in determining if these important economic variables will come to life as the dust settles overseas.
For the past three years, the consumer has been the economy's principal source of strength. Consumer sentiment climbed in the post-war weeks and spending remained strong throughout the period sparked in part by wave after wave of mortgage refinancings -- a result of the lowest interest rate environment in over forty years. The prospects for the U.S. consumer should also be enhanced as the "advance refund" checks, part of the recently approved tax relief package begin to be mailed in July.
Inflation and Monetary Policy
Inflation was largely a non-factor throughout the period, with the exception of the occasional jump in energy prices. Competitive pressures and less-than-stellar industrial production teamed to prevent manufacturers from raising prices even as corporate cost-cutting measures and efficiencies led to stronger overall productivity. In fact, it was the possibility of a Japan-like deflationary scenario that Fed chairman Alan Greenspan addressed in April -- unlikely with our nation's strong banking system and the Fed's watchful eye. Interest rates remain very low and should provide fertile ground for increased business and consumer spending.
Equity Performance
The reporting period began with a firestorm of controversy over the integrity of accounting practices and several high-profile bankruptcies brought on by corporate scandals. Investors shunned stocks, especially those of highly-leveraged companies, with the result being two market lows -- one in July and a retesting in early October. Stocks rallied briefly in the fall months before struggling again late in 2002 in the face of lower consumer spending and tepid corporate profitability before rising again in early January. This rally was quickly snuffed by intense media coverage over the possibility of war with Iraq. Investors chafed from losses and worried about an already stagnant economy, flocked to low-risk investments. In mid-March, stocks rose precipitously as it became clear that the final direction would indeed be war and resolution was forthcoming. When the conflict turned into a swift allied victory, stocks surged to new short-term highs.
Both equity styles -- growth and value -- produced negative returns over the reporting period. The S&P 500, a broad large-company index, posted a - -13.31% total return with growth narrowly outperforming the value segment of the index. In observing returns for other market capitalizations, small-cap stocks performed worst with the Russell 2000 losing -20.74% while the mid-cap area, as measured by the S&P Midcap 400, finished the period in the middle of the pack, returning -17.51%. All equity categories finished strong in late March and April, led by a resurgent NASDAQ Composite.
Fixed-Income Performance
The perceived safety of fixed-income instruments led to another productive session for bond investors. Investment-grade bonds greatly benefited from widespread international uncertainty -- war with Iraq, war of words with North Korea, SARS and a generally weak global economy. Asset- and mortgage-backed bonds posted solid gains related to tremendous demand for government agency securities and concern over the direction of the economy. For the period, the Lehman Brothers Aggregate Bond Index -- a broad barometer of investment-grade bond performance-generated a very respectable 10.46% total return.
The high-yield market snapped back dramatically after languishing for several years. With yields between high-yield bonds and U.S. Treasuries at historically attractive spreads and corporate profitability improving, assets flooded into the more aggressive credit markets starting in the fall months with the result being substantial investor gains. Investors hungry for yield in a very low interest rate environment also helped boost the high yield sector's popularity. Benefiting form these factors, the Lehman Brothers High Yield Index produced a remarkable 8.84% total return over the twelve-month period.
Outlook
Near term it will be of critical interest to see whether the recent gains in stocks were simply a "relief rally" as a result of the war with Iraq coming to a swift conclusion or if the underpinnings of a stronger economic recovery are set in motion. Close to a half a million jobs were lost in February and March alone and job growth remains a key missing piece from the economic recovery puzzle. The downward pressure on companies to lay off workers is likely to slow over the next several months. As the economy picks up steam and businesses increase spending, investment in capital equipment job growth should ensue.
As many of the uncertainties that burdened the U.S. economy over the past twelve months are peeled away, business spending should accelerate. The combination of easy monetary policy, strong productivity growth, tax cuts, and improved profitability that is currently being set into place should set the stage for a moderate economic expansion through the end of this year and into 2004.
Conditions in the financial markets showed marked improvement over the last two months of the reporting period and should rally strongly in the event of a stronger economic revival. The corporate malfeasance and accounting-related scandals appear largely behind us and today's management teams are more concerned with honesty and forthrightness. Faith in the integrity of our markets is on the mend. The economic climate is set for solid growth and investor confidence is on the upswing-- good news for investors.
The AAL Technology Stock Fund
[PHOTO OMITTED: BRIAN J. FLANAGAN]
Brian J. Flanagan co-manages The AAL Technology Stock Fund. He joined Thrivent Investment Management Inc., in 1994 with a bachelor's degree in finance and real estate, and a master's in finance from the University of Wisconsin. He received the Chartered Financial Analyst designation.
[PHOTO OMITTED: JAMES A. GROSSMAN]
James A. Grossman co-manages The AAL Technology Stock Fund. Since joining Thrivent Investment Management Inc., in 1996, he served as a securities analyst and has followed selected technology investments for The AAL Mutual Funds. He is a graduate of Elmhurst College, with a bachelor's degree in finance and economics.
Technology stocks lost ground over the 12 months ended April 30, 2003, before regaining momentum late in the reporting period. During this time, The AAL Technology Stock Fund returned -20.63%, while its Lipper, Inc., peer group of science and technology funds posted a -22.29% return. The Fund's market benchmark, the Goldman Sachs Technology Index, returned -19.33% over this same period.
Hardware Manufacturers Suffer
Throughout much of the period, the market for technology stocks was hampered by weak demand, excess industrial capacity and cutbacks in information technology spending. Semiconductor and computer hardware shares sustained particularly heavy losses, while shares issued by software providers delivered steadier performance. In May and June, disappointing returns from the Fund's Internet and computer hardware holdings, coupled with our decision to bring down cash levels, hurt performance relative to the Fund's market benchmark.
Technology stocks continued to stall during the third quarter as earnings concerns and accounting-related woes sent investors fleeing to safe-haven assets. Nonetheless, we were able to bolster the Fund's relative performance through strong stock selection and by emphasizing larger companies, which generally outperformed smaller-company issues.
After vacillating in the final months of 2002, technology stocks spiraled downward through March as war-related concerns cast a pall over the equity markets. As the military campaign in Iraq wound down, many technology issuers resumed seasonal spending patterns which caused technology shares to flourish in April. Through the first four months of 2003, the Fund's enterprise software holdings were the largest contributors to performance, while our strategy of underweighting struggling hardware manufacturers also proved advantageous.
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Top Industries
Information Technology 77.9%
Consumer Discretionary 9.5%
Industrials 4.3%
Health Care 1.5%
Telecommunication Services 1.3%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 5.5%
Common Stocks 94.5%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Technology Stock Fund seeks long-term capital appreciation by investing primarily in a diversified portfolio of common stocks and securities convertible into common stocks.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AATSX Ticker BBTSX Ticker N/A
Net Assets $29,293,657 Net Assets $2,601,578 Net Assets $2,218,151
NAV $2.50 NAV $2.43 NAV $2.59
Outlook
The market for technology stocks remains largely bifurcated, with well-established, large companies serving as market leaders and a growing number of small, niche companies offering excellent prospects for growth. As industry consolidation progresses, many companies in the middle could find themselves squeezed in the process. In the meantime, investors can expect to receive mixed signals, with improved earnings and a potential second-half recovery struggling to offset weak employment data, discouraging insider selling patterns and the continued threat of SARS in Asia.
Going forward, we anticipate maintaining our focus on large technology names, while keeping a close watch out for promising smaller companies. Given current conditions, we are likely to continue favoring enterprise software providers over hardware manufacturers, which are grappling with eroding pricing power in an increasingly commoditized field. As companies begin to see sustainable increases in cash flow, however, we believe a broader range of technology firms will ultimately benefit.
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Value of a $10,000 Investment
Class A Shares*
Goldman Sachs
The AAL Technology Consumer
Technology Composite Price
Date Stock Fund Index*** Index**
- ------------------------------------------------------------------------
July 1, 2000 10,000 10,000 10,000
2000 9,148 9,440 10,017
2000 10,792 10,668 10,029
2000 9,497 8,940 10,081
2000 8,410 8,265 10,099
2000 6,048 6,372 10,104
2000 5,963 5,826 10,099
2001 6,653 6,782 10,163
2001 4,697 4,902 10,203
2001 3,922 4,221 10,226
2001 4,848 5,027 10,267
2001 4,630 4,827 10,313
2001 4,678 4,840 10,331
2001 4,215 4,495 10,302
2001 3,648 3,910 10,302
2001 2,835 3,119 10,348
2001 3,279 3,620 10,313
2001 3,789 4,237 10,296
2001 3,752 4,163 10,255
2002 3,686 4,158 10,279
2002 3,147 3,603 10,319
2002 3,383 3,859 10,377
2002 2,977 3,386 10,435
2002 2,816 3,248 10,435
2002 2,419 2,789 10,441
2002 2,174 2,507 10,453
2002 2,117 2,474 10,488
2002 1,767 2,033 10,505
2002 2,126 2,477 10,531
2002 2,504 2,911 10,531
2002 2,136 2,486 10,508
2003 2,136 2,464 10,554
2003 2,174 2,502 10,636
2003 2,145 2,474 10,700
April 30, 2003 $ 2,363 $ 2,732 $10,676
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (20.63)% (38.79)%
with sales charge (24.92)% (40.00)%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (21.36)% (39.40)%
with sales charge (24.50)% (40.05)%
From
Inception
Institutional Class/3/ 1-Year 7/1/2000
- ----------------------------------------------------------------
Net Asset Value (19.57)% (38.01)%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the Goldmans Sachs Technology Composite Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
*** The Goldman Sachs Technology Industry Composite Index is a modified capitalization-weighted index of selected technology stocks. Data supplied by Goldman Sachs.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. The Fund primarily invests in technology-related industries; as a consequence, the Fund may be subject to greater price volatility than a fund investing in a broad range of industries. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance reflects the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Aggressive Growth Fund
[PHOTO OMITTED: SCOTT A. VERGIN]
Scott A. Vergin is a Chartered Financial Analyst and portfolio manager for The AAL Aggressive Growth Fund. He has managed the Fund since September 2002. He has managed securities for Thrivent Investment Management Inc., since 1984.
The 12-month period ended April 30, 2003 was characterized by fear and trepidation over corporate deceit, a struggling economy and the steady march to war with Iraq. In late March and April, as investor anxiety over geopolitical conflict ebbed, large-company growth stock shares moved up rapidly and recovered some of their earlier losses. In this topsy-turvy environment, The AAL Aggressive Growth Fund posted a - -17.22% total return for the period. The Fund's Lipper, Inc. peer group of similar large-company growth funds had a -16.09% median total return while the Fund's previous unmanaged benchmark, the S&P 500 Index, ended the one-year period with a -13.31% total return. The Fund's current benchmark, the unmanaged Russell 1000 Growth Index, returned a -14.35% for the period. Because the Russell 1000 Growth Index is a more accurate reflection of the companies in which the Fund invests, it will be used to compare performance of the Fund, rather than the S&P 500 Index.
War Fears Abate
The first half of the reporting period was marked by investor unease over the possibility of a double-dip recession, corporate scandals headlined by the high profile meltdowns of Enron and WorldCom and the possibility of war with Iraq. Stocks registered cyclical lows in July, which were subsequently retested in early October. When, late in 2002, the U.S. economy witnessed a spike in the jobless rate and the much-anticipated pickup in capital spending failed to materialize, investors shunned stocks in favor of safer investment options. January saw a brief leap in growth stock prices, which quickly withered in the glare of very weak seasonal retail spending reports. Fear of a drop-off in consumer spending, one of the few bright spots for a troubled economy the past couple of years, again sent stocks lower where they remained amid nearly constant war chatter. Negativity blossomed into optimism as it became clear that the U.S. would lead an invasion of Iraq. Stocks further regained appeal upon the swift and skillful conclusion to the war.
The Fund struggled throughout much of 2002 as a result of its more aggressive stance, which was built in anticipation of a stronger economic recovery than ultimately materialized. Holdings in the health-care services and HMO businesses, in particular, subtracted from performance when Medicare reimbursement practices were questioned by regulators. A severe sell-off ensued as earnings growth figures appeared to be inflated. In mid-March, the Fund's fortunes changed abruptly in the face of a resounding military victory in Iraq and a string of encouraging corporate earnings reports. Our overweighted position in beaten-down technology companies was quickly rewarded as the NASDAQ Composite Index posted substantial gains. The Fund's aggressive investment in cable and biotechnology companies translated into gains, as did the Fund's very low cash position.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Information Technology 23.6%
Health Care 20.9%
Consumer Discretionary 17.7%
Financials 14.0%
Industrials 9.7%
Consumer Staples 5.6%
Energy 3.8%
Telecommunication Services 1.1%
Materials 0.2%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 3.1%
Common Stocks 96.9%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Aggressive Growth Fund seeks long-term capital appreciation by investing primarily in a diversified portfolio of common stocks and securities convertible into common stocks.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AAAGX Ticker BBAGX Ticker N/A
Net Assets $30,238,165 Net Assets $3,310,945 Net Assets $2,822,360
NAV $3.75 NAV $3.63 NAV $3.88
Outlook
The worst of the bear market looks to be over and we are looking to capitalize on a stronger economic recovery by continuing to emphasize more economically-sensitive sectors, such as technology, media and cable. Many of these companies have seen dramatic dips in stock prices and appear poised for strong gains as capital spending increases. In the health-care sector, the Fund will look to the biotechnology industry as it should benefit from streamlined regulatory approval processes. Enterprise software providers in the technology space will also be expected to bask in a cyclical economic rebound.
We believe strongly that large company growth stocks will continue to regain investor appeal. Corporate earnings -- the key driver for stock gains -- have improved markedly and the current low interest rate environment should aid in increasing capital spending. As always, we will keep the Fund invested across a wide array of industries, while seeking firms with outstanding growth potential for our investors.
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Value of a $10,000 Investment
Class A Shares*
The AAL Russell 1000 Consumer
Aggressive S&P 500 Growth Price
Date Growth Fund Index*** Index**** Index**
- -----------------------------------------------------------------------------
July 7, 2003 10,000 10,000 10,000 10,000
2000 9,063 9,743 9,541 10,017
2000 9,582 10,348 10,405 10,029
2000 9,072 9,802 9,421 10,081
2000 8,666 9,761 8,975 10,099
2000 7,324 8,991 7,652 10,104
2000 7,295 9,035 7,410 10,099
2001 7,626 9,356 7,922 10,163
2001 6,199 8,503 6,577 10,203
2001 5,557 7,964 5,861 10,226
2001 6,331 8,583 6,603 10,267
2001 6,152 8,640 6,506 10,313
2001 5,906 8,430 6,355 10,331
2001 5,604 8,347 6,196 10,302
2001 5,018 7,825 5,689 10,302
2001 4,508 7,193 5,121 10,348
2001 4,564 7,330 5,390 10,313
2001 4,857 7,892 5,908 10,296
2001 4,933 7,961 5,897 10,255
2002 4,772 7,845 5,793 10,279
2002 4,460 7,694 5,552 10,319
2002 4,659 7,983 5,744 10,377
2002 4,281 7,499 5,275 10,435
2002 4,196 7,444 5,148 10,435
2002 3,752 6,914 4,672 10,441
2002 3,430 6,375 4,415 10,453
2002 3,449 6,417 4,428 10,488
2002 3,194 5,720 3,969 10,505
2002 3,459 6,223 4,333 10,531
2002 3,638 6,589 4,568 10,531
2002 3,345 6,202 4,253 10,508
2003 3,270 6,040 4,149 10,554
2003 3,241 5,949 4,130 10,636
2003 3,298 6,007 4,207 10,700
April 30, 2003 $ 3,544 $ 6,501 $ 4,518 $10,676
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (17.22)% (29.34)%
with sales charge (21.71)% (30.73)%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (18.24)% (30.15)%
with sales charge (21.51)% (30.89)%
From
Inception
Institutional Class/3/ 1-Year 7/1/2000
- ----------------------------------------------------------------
Net Asset Value (16.02)% (28.48)%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the S&P 500 index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
*** An unmanaged index comprised of 500 stocks representative of the stock market as a whole. "S&P 500[Registered Trademark] " is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
**** The Russell 1000 Growth Index is an unmanaged Index comprised of those Russell 1000 companies with higher than average price-to-book ratios and higher forecasted growth values. The Russell 1000 companies are the 1000 largest companies in the Russell 3000 Index. The Russell 3000 Index is comprised of the 3000 largest U.S. companies based on total market capitalization and is designed to represent the performance of about 98% of the U.S. equity market. It is not possible to invest directly in the Index.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance reflects the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Small Cap Stock Fund
[PHOTO OMITTED: KEVIN A. SCHMITTING]
Kevin A. Schmitting is portfolio manager of The AAL Small Cap Stock Fund. He brings more than 20 years of investment experience to Thrivent Investment Management Inc. He has a master's degree in business administration from the University of Minnesota and is a Chartered Financial Analyst.
Small-cap stocks retreated throughout much of 2002, before recovering late in the 12-month period ended April 30, 2003. For the period, The AAL Small Cap Stock Fund posted a -22.06% total return, while its Lipper, Inc., peer group of small-capitalization core funds returned a median of -20.55%. The Fund's market benchmark, the S&P SmallCap 600 Index, returned -20.95%.
Investor Unease Grows
Weak corporate earnings and accounting-related concerns conspired to depress small-company growth valuations early in the reporting period. Through July, technology stocks sustained the heaviest losses, while energy, utility and consumer discretionary stocks fared modestly better. Selling pressure intensified during the third quarter, wreaking havoc on equities in nearly every sector. During this time, our overweighted position in technology stocks and relatively low cash reserves contributed negatively to performance.
Small-cap returns fluctuated during the holiday season before giving way to war-related jitters early in 2003. With market participants keeping a close eye on developments in Iraq, technology shares sputtered through mid-March, while energy stocks also saw a sharp increase in volatility. Conversely, retail and utility issues held up well on the strength of continued consumer spending. Although a number of underperforming industrial and technology holdings hurt the Fund's relative returns through March, our market-neutral position in most other sectors provided some degree of cushion.
April was perhaps the strongest month of the period, as the war in Iraq wound down and investors renewed their focus on company fundamentals, leading to a robust rally in the equity markets. While the Fund posted positive absolute returns in April, the outperformance of lower-tier companies during the month generally worked against the Fund's performance.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 18.8%
Consumer Discretionary 18.0%
Information Technology 16.3%
Industrials 16.0%
Health Care 11.5%
Energy 7.9%
Utilities 3.9%
Consumer Staples 3.2%
Materials 1.8%
Telecommunication Services 0.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 2.0%
Common Stocks 98.0%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Small Cap Stock Fund seeks long-term capital growth by investing primarily in small company common stocks and securities convertible into small company common stocks.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AASMX Ticker BBSMX Ticker N/A
Net Assets $266,650,814 Net Assets $21,072,675 Net Assets $6,811,337
NAV $11.55 NAV $10.86 NAV $11.98
Outlook
During the first quarter of 2003, corporate earnings showed marked improvement, while consumer confidence also surprised the markets. With the economy growing and investors less distracted by overseas events, we believe the environment for small-company stocks is vastly improved from a year ago. As top-line revenues increase, we expect to see a gradual upturn in corporate earnings, though results are likely to vary by industry. In addition, the weak dollar should provide further support to U.S. manufacturers with overseas exposure.
Going forward, we see little advantage to favoring any one sector and anticipate remaining market-relative to our peer group of small-capitalization core funds. Given current conditions, we believe individual stock selection will be a key determinant of relative performance. As always, we will keep the Fund invested across a broad array of sectors and industries, while focusing on small companies with superior long-term growth prospects.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
The AAL Consumer
Small Cap S&P SmallCap Price
Date Stock Fund 600 Index** Index***
- ------------------------------------------------------------------------
July 1, 1996 10,000 10,000 10,000
1996 9,025 9,242 10,019
1996 10,159 9,812 10,038
1996 10,622 10,243 10,070
1996 10,282 10,172 10,102
1996 10,518 10,700 10,121
1996 10,840 10,826 10,121
1997 10,878 11,006 10,153
1997 10,404 10,778 10,185
1997 9,736 10,225 10,211
1997 9,523 10,350 10,223
1997 10,975 11,566 10,217
1997 11,730 12,077 10,230
1997 12,262 12,836 10,243
1997 12,640 13,159 10,262
1997 13,578 14,029 10,287
1997 13,027 13,424 10,313
1997 12,901 13,326 10,306
1997 12,666 13,595 10,294
1998 12,453 13,330 10,313
1998 13,491 14,544 10,332
1998 13,929 15,099 10,351
1998 14,092 15,188 10,370
1998 13,013 14,384 10,389
1998 13,033 14,427 10,402
1998 12,290 13,323 10,415
1998 9,500 10,751 10,428
1998 10,253 11,410 10,440
1998 10,783 11,940 10,466
1998 11,597 12,612 10,466
1998 12,351 13,418 10,459
1999 12,425 13,249 10,485
1999 11,177 12,055 10,498
1999 10,967 12,211 10,530
1999 11,418 13,017 10,606
1999 11,649 13,334 10,606
1999 12,121 14,093 10,606
1999 12,299 13,969 10,638
1999 11,733 13,354 10,664
1999 11,733 13,411 10,715
1999 11,670 13,377 10,734
1999 12,550 13,936 10,740
1999 13,976 15,082 10,740
2000 13,379 14,615 10,766
2000 15,444 16,572 10,830
2000 15,633 15,959 10,919
2000 15,308 15,686 10,925
2000 15,203 15,221 10,932
2000 16,283 16,121 10,996
2000 15,360 15,725 11,015
2000 17,038 17,119 11,027
2000 17,028 16,653 11,085
2000 16,640 16,757 11,104
2000 14,805 15,012 11,110
2000 16,472 16,862 11,104
2001 17,458 17,585 11,174
2001 16,288 16,512 11,219
2001 15,253 15,754 11,244
2001 16,497 16,955 11,289
2001 17,002 17,279 11,340
2001 17,517 17,913 11,359
2001 17,244 17,613 11,327
2001 16,810 17,212 11,327
2001 14,630 14,885 11,378
2001 15,745 15,679 11,340
2001 16,810 16,826 11,321
2001 17,963 17,964 11,276
2002 17,913 18,121 11,302
2002 17,232 17,809 11,347
2002 18,396 19,216 11,410
2002 18,359 19,759 11,474
2002 17,777 18,941 11,474
2002 16,637 17,962 11,481
2002 14,407 15,425 11,493
2002 14,444 15,571 11,532
2002 13,453 14,618 11,551
2002 13,837 15,085 11,580
2002 14,841 15,871 11,580
2002 14,060 15,336 11,554
2003 13,689 14,809 11,605
2003 13,342 14,335 11,695
2003 13,255 14,447 11,765
April 30, 2003 $14,308 $15,620 $11,739
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 5-Year 7/1/1996
- ----------------------------------------------------------------
without sales charge (22.06)% 0.30% 6.26%
with sales charge (26.34)% (0.83)% 5.39%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge (22.87)% (0.70)% 3.72%
with sales charge (25.95)% (0.70)% 3.72%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value (21.49)% 1.01% 3.59%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the S&P SmallCap 600 Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** An unmanaged index comprised of 600 stocks designed to represent performance of the small-cap segment of the U.S. equity markets. "S&P SmallCap 600 Index" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
*** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance has been restated to reflect the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Small Cap Index Fund II
[PHOTO OMITTED: KEVIN R. BRIMMER]
Kevin R. Brimmer is the portfolio manager for The AAL Small Cap Index Fund II, The AAL Mid Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL Large Company Index Fund and The AAL Large Company Index Fund II. He holds a bachelor's degree in actuarial science and statistics and an MBA, both from Drake University.
The AAL Small Cap Index Fund II returned a negative 21.69%, while its Lipper, Inc. small cap core peer group returned a -20.55% for the 12 months ended April 30, 2003. The Fund's index benchmark, the S&P SmallCap 600 Index, posted a total return of -20.95% for the same period. The discrepancy between the Fund and the Index can primarily be attributed to expenses, cash flows, transaction costs and modest weighting variances between the Fund and the Index.
Concerns about geopolitical risks, weather-related slowdowns and rising energy prices contributed to a sluggish economy to date in 2003. The past year gave investors a multitude of reasons to sell stocks, with few reasons to buy. Investor confidence wavered in the economy, corporate America and the financial markets. Small capitalization stocks were not immune to the challenging environment. All small-cap sectors had negative returns, but the worst performing sectors were the basic materials, information technology and telecommunication services areas.
As an index fund, the Fund does not make active decisions regarding sector weightings or individual security holdings. The goal of the Fund is to duplicate the performance of the S&P SmallCap 600 Index. To do this, we utilize a full replication strategy for the Fund; in other words, all 600 securities are purchased in approximately the same weight as in the Index. Fund performance will be impacted by the timing of cash flows, transaction fees and expenses, whereas the unmanaged Index has no costs associated with it.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Consumer Discretionary 20.0%
Industrials 19.4%
Financials 14.9%
Information Technology 14.9%
Health Care 12.1%
Energy 5.7%
Materials 4.6%
Utilities 4.1%
Consumer Staples 3.7%
Telecommunication Services 0.3%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 0.3%
Common Stocks 99.7%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Small Cap Index Fund II seeks capital growth that tracks the performance of the S&P SmallCap 600 Index by investing primarily in common stocks of the Index.
A Share B Share
- ------------------------ ------------------------
Ticker AALSX Ticker N/A
Net Assets $20,468,695 Net Assets $2,253,384
NAV $8.89 NAV $8.69
Outlook
We are hopeful that the stage is set for renewed growth in the remainder of 2003. It is important that investors continue to keep a long-term perspective. We have some very positive economic realities including low inflation as well as very accommodative monetary and fiscal policies. This economic foundation will provide a sound base for the future equity markets. Coupled with increases with corporate and consumer confidence, we should ultimately witness better earnings and prices for small-capitalization stocks.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
The AAL Consumer
Small Cap S&P SmallCap Price
Date Index Fund II 600 Index*** Index**
- ------------------------------------------------------------------------
July 1, 2000 10,000 10,000 10,000
2000 9,063 9,637 10,017
2000 9,856 10,491 10,029
2000 9,573 10,206 10,081
2000 9,620 10,269 10,099
2000 8,609 9,200 10,104
2000 9,633 10,334 10,099
2001 9,996 10,777 10,163
2001 9,365 10,119 10,203
2001 8,926 9,655 10,226
2001 9,585 10,391 10,267
2001 9,748 10,590 10,313
2001 10,084 10,978 10,331
2001 9,901 10,794 10,302
2001 9,671 10,548 10,302
2001 8,373 9,122 10,348
2001 8,796 9,609 10,313
2001 9,411 10,312 10,296
2001 10,036 11,009 10,255
2002 10,103 11,105 10,279
2002 9,930 10,914 10,319
2002 10,690 11,777 10,377
2002 10,978 12,109 10,435
2002 10,507 11,608 10,435
2002 9,950 11,008 10,441
2002 8,558 9,453 10,453
2002 8,645 9,543 10,488
2002 8,113 8,959 10,505
2002 8,365 9,245 10,531
2002 8,780 9,726 10,531
2002 8,481 9,399 10,508
2003 8,181 9,076 10,554
2003 7,910 8,785 10,636
2003 7,968 8,854 10,700
April 30, 2003 $ 8,597 $ 9,573 $10,676
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (21.69)% (3.29)%
with sales charge (25.97)% (5.21)%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (22.29)% (4.06)%
with sales charge (25.38)% (5.07)%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the S&P SmallCap 600 Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
*** An unmanaged index comprised of 600 stocks designed to represent performance of the small-cap segment of the U.S. equity markets. "S&P SmallCap 600 Index" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index. Index funds are subject to the same market risks associated with the stocks in their respective indexes.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance reflects the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
The AAL Small Cap Value Fund
[PHOTO OMITTED: CHRISTOPHER J. SERRA]
Christopher J. Serra is the portfolio manager of The AAL Small Cap Value Fund. Prior to becoming portfolio manager, he had served as the assistant portfolio manager for The AAL Small Cap Fund and as a senior equity analyst. He joined Thrivent Investment Management Inc., in 1998. He has a bachelor's degree in economics from Lawrence University and is a Chartered Financial Analyst.
Small-company value stocks fell prey to heightened volatility during the 12 months ended April 30, 2003, driving returns for The AAL Small Cap Value Fund lower. For the period, the Fund returned -19.38% in value, while its Lipper, Inc., peer group of small-capitalization value funds returned -18.28%. The Fund's market benchmark, the S&P 600/Barra Value Index, returned -25.20% over this same time.
Strong Performance in '03
Small-cap value stocks posted respectable returns early in the period, aided by a defensive market sentiment and the steady performance of energy and financial shares. Through June, the Fund benefited from the strong performance of its economically cyclical holdings in the consumer discretionary, industrial and financial sectors.
The third quarter of 2002 proved difficult for small-cap investors, however, with stocks of nearly every kind selling off in response to a variety of market maladies. During this time, the Fund lagged its peers, owing to an overweighting in technology shares coupled with disappointing individual stock selection. We were able to recoup some of these losses in the fourth quarter, though, as financial and consumer discretionary holdings advanced on the strength of resilient consumer spending.
War-related worries dragged the broader market lower through March before trading patterns reversed course in April. The Fund gained significant momentum through the second half of the reporting period, outperforming its benchmark by a wide margin. During this time, we took profits in interest-rate sensitive stocks and used the proceeds to increase our exposure to the energy and health care sectors. In addition, we were able to purchase a number of attractively valued retail names, which subsequently outperformed.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 20.9%
Consumer Discretionary 19.6%
Industrials 17.8%
Information Technology 13.3%
Energy 6.7%
Health Care 6.4%
Utilities 3.5%
Materials 3.4%
Consumer Staples 3.1%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 5.3%
Common Stocks 94.7%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Small Cap Value Fund seeks long-term capital appreciation by investing primarily in a diversified portfolio of small company common stock and securities convertible into small company common stocks.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AALVX Ticker BBSVX Ticker N/A
Net Assets $27,690,564 Net Assets $2,913,691 Net Assets $3,839,183
NAV $9.33 NAV $9.21 NAV $9.47
Outlook
Many small companies have taken measures to strengthen their balance sheets over the past year, which should bode well for long-term earnings growth. With tensions in Iraq defusing and consumers still spending on homes and durable goods, we are cautiously optimistic about economic growth prospects in 2003. Nonetheless, pockets of economic weakness remain and many issuers are likely to delay investing in plant and equipment until they see evidence of sustainable growth.
Over the near-term, we anticipate making few structural adjustments to the Fund, but will continue to seek out attractively valued, high-quality stocks. As the year progresses, we will keep particularly close watch over the energy sector, where a dwindling supply of natural gas reserves could provide compelling investment opportunities. In addition, we believe an expanding economy should benefit small companies in economically cyclical industries. Regardless of market conditions, we believe careful research and prudent stock selection will be key to the Fund's long-term performance.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
The AAL S&P SmallCap Consumer
Small Cap 600/Barra Price
Date Value Fund Value Index*** Index**
- ------------------------------------------------------------------------
July 17, 2001 10,000 10,000 10,000
2001 9,667 10,023 9,972
2001 9,526 9,862 9,972
2001 8,439 8,450 10,017
2001 8,949 8,837 9,983
2001 9,346 9,544 9,966
2001 10,074 10,233 9,927
2002 10,357 10,424 9,949
2002 10,244 10,379 9,989
2002 10,953 11,281 10,045
2002 11,009 11,743 10,101
2002 10,773 11,298 10,101
2002 10,283 10,792 10,107
2002 8,790 9,038 10,118
2002 8,742 9,026 10,152
2002 8,143 8,362 10,169
2002 8,210 8,529 10,194
2002 8,866 8,990 10,194
2002 8,524 8,752 10,171
2003 8,248 8,391 10,216
2003 8,105 8,080 10,295
2003 8,133 8,055 10,357
April 30, 2003 $ 8,875 $ 8,783 $10,334
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 7/17/2001
- ----------------------------------------------------------------
without sales charge (19.38)% (3.45)%
with sales charge (23.83)% (6.45)%
From
Inception
Class B/2/ 1-Year 7/17/2001
- ----------------------------------------------------------------
without sales charge (20.00)% (4.15)%
with sales charge (23.18)% (6.30)%
From
Inception
Institutional Class/3/ 1-Year 7/17/2001
- ----------------------------------------------------------------
Net Asset Value (18.59)% (2.64)%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the S&P SmallCap 600/Barra Value Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
*** The S&P SmallCap 600/Barra Value Index is a capitalization-weighted index that comprises all of the stocks in the S&P SmallCap 600 Index that have low price-to-book ratios.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance reflects the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Mid Cap Stock Fund
[PHOTO OMITTED: MICHAEL R. HOCHHOLZER]
Michael R. Hochholzer manages The AAL Mid Cap Stock Fund. He joined Thrivent Investment Management Inc., in 1989. He is a graduate of the University of Wisconsin-Oshkosh and received his MBA from the University of Chicago. He is also a Chartered Financial Analyst.
Mid-cap core stocks lost ground during the 12 months ended April 30, 2003, but still managed to outperform their small-company counterparts. The AAL Mid Cap Stock Fund earned a -17.45% total return for the reporting period, while its Lipper, Inc., peer group of mid-cap core funds posted a -17.74% total return. The Fund's market benchmark, the S&P MidCap 400 Index, returned -17.51%.
War Concerns Dominate
Despite signs of economic recovery, concerns about corporate earnings and accounting irregularities conspired to drive mid-cap shares lower. In May and June, technology, energy and utility stocks slipped considerably, while smaller-company issues generally underperformed their larger counterparts.
The investment climate grew increasingly turbulent during the third quarter, as investors reacted to disappointing corporate earnings and lingering economic uncertainty. While the Fund's industrial and utility holdings disappointed, we were able to partially offset these losses through strong stock selection in other sectors. Among our financial picks, medium-sized commercial banks performed particularly well, while consumer-oriented software providers provided a boost to the Fund's technology allocation.
Following an volatile finish to 2002, mid-cap stocks trended lower through mid-March, as investors speculated on war-related developments. Stocks received a post-war bounce in April, with lower-tier technology and consumer discretionary issues reaping the lion's share of the month's gains. Over the second half of the reporting period, we systematically increased the quality of the Fund's holdings by leveraging the shrinking market capitalizations of larger, established issuers. These high-quality holdings did not fully participate in the rally late in the period, however, which put a damper on the Fund's overall returns.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 17.4%
Consumer Discretionary 16.1%
Health Care 14.2%
Information Technology 12.7%
Industrials 11.7%
Energy 9.5%
Utilities 7.3%
Materials 3.6%
Consumer Staples 3.6%
Telecommunication Services 0.3%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 3.2%
Common Stocks 96.8%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Mid Cap Stock Fund seeks long-term capital growth by investing primarily in common stocks and securities convertible into common stocks of mid-sized companies.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AASCX Ticker BBSCX Ticker N/A
Net Assets $643,797,595 Net Assets $22,796,360 Net Assets $20,701,711
NAV $10.74 NAV $9.95 NAV $11.06
Outlook
While the technology-fueled gains of recent months could be indicative of improved market conditions, the litmus test will come in mid-June when issuers come forward with earnings pre-announcements. As unbridled optimism gives way to economic reality, trading patterns could turn choppy. Nonetheless, many medium-sized companies have taken steps to clean up their balance sheets over the past year, which should bode well for future earnings.
With the exception of an underweighted position in consumer staples, we remain largely sector-neutral relative to our benchmarks. Should the economy demonstrate clearer signs of strength, we may consider taking on a more aggressive investment posture. Given current data, though, there is little reason to expect more than gradual economic firming over the coming year. As always, we will look to add value through strong stock selection by targeting strategically well-positioned companies with above-average growth prospects. Through changing market climates, we believe these types of companies will ultimately serve as leaders in their respective industries.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
The AAL Consumer
Mid Cap S&P MidCap Price
Date Stock Fund 400 Index** Index***
- ------------------------------------------------------------------------
June 30, 1993 10,000 10,000 10,000
1993 9,346 9,981 10,000
1993 9,771 10,393 10,028
1993 10,234 10,503 10,048
1993 10,111 10,537 10,090
1993 9,790 10,304 10,097
1993 10,263 10,782 10,097
1994 10,593 11,033 10,125
1994 10,622 10,876 10,159
1994 9,866 10,373 10,194
1994 9,809 10,450 10,208
1994 9,261 10,351 10,215
1994 8,467 9,994 10,249
1994 8,505 10,333 10,277
1994 9,299 10,874 10,319
1994 9,365 10,671 10,346
1994 9,781 10,788 10,353
1994 9,431 10,301 10,367
1994 9,771 10,396 10,367
1995 9,374 10,504 10,409
1995 9,856 11,055 10,450
1995 10,348 11,247 10,485
1995 10,319 11,473 10,519
1995 10,452 11,749 10,540
1995 11,453 12,228 10,561
1995 12,616 12,866 10,561
1995 12,540 13,104 10,589
1995 13,315 13,421 10,609
1995 13,532 13,076 10,644
1995 14,090 13,647 10,637
1995 14,118 13,613 10,630
1996 14,080 13,810 10,693
1996 14,751 14,280 10,727
1996 14,865 14,451 10,783
1996 16,159 14,892 10,824
1996 16,764 15,094 10,845
1996 15,706 14,867 10,852
1996 13,844 13,861 10,873
1996 14,799 14,661 10,893
1996 15,583 15,300 10,928
1996 14,780 15,344 10,963
1996 15,555 16,209 10,983
1996 15,353 16,227 10,983
1997 15,907 16,836 11,018
1997 15,364 16,698 11,053
1997 14,234 15,986 11,080
1997 14,369 16,400 11,094
1997 15,907 17,834 11,087
1997 16,585 18,335 11,101
1997 17,659 20,151 11,115
1997 17,693 20,126 11,136
1997 18,993 21,283 11,163
1997 18,078 20,357 11,191
1997 17,987 20,659 11,184
1997 18,122 21,460 11,170
1998 17,697 21,052 11,191
1998 18,985 22,796 11,212
1998 19,773 23,824 11,233
1998 19,923 24,259 11,253
1998 18,760 23,167 11,274
1998 19,123 23,314 11,288
1998 17,934 22,410 11,302
1998 13,970 18,238 11,316
1998 15,058 19,941 11,330
1998 16,021 21,723 11,357
1998 16,909 22,807 11,357
1998 18,498 25,563 11,350
1999 18,445 24,568 11,378
1999 17,399 23,281 11,392
1999 17,862 23,932 11,427
1999 18,406 25,819 11,510
1999 19,095 25,931 11,510
1999 20,155 27,320 11,510
1999 19,916 26,739 11,544
1999 19,240 25,823 11,572
1999 18,816 25,025 11,627
1999 19,558 26,301 11,648
1999 20,367 27,681 11,655
1999 21,888 29,326 11,655
2000 20,936 28,501 11,683
2000 23,177 30,495 11,752
2000 24,101 33,047 11,849
2000 23,429 31,893 11,856
2000 23,107 31,495 11,863
2000 24,563 31,958 11,932
2000 24,395 32,463 11,953
2000 27,364 36,087 11,967
2000 27,574 35,840 12,029
2000 26,384 34,625 12,050
2000 23,443 32,011 12,057
2000 26,271 34,460 12,050
2001 26,033 35,227 12,126
2001 24,395 33,217 12,175
2001 22,331 30,747 12,202
2001 25,128 34,139 12,251
2001 25,367 34,935 12,306
2001 25,053 34,793 12,327
2001 23,635 34,275 12,292
2001 22,270 33,154 12,292
2001 19,503 29,030 12,348
2001 20,274 30,314 12,306
2001 21,097 32,569 12,285
2001 21,954 34,251 12,237
2002 21,569 34,074 12,265
2002 21,482 34,116 12,313
2002 22,917 36,554 12,382
2002 22,777 36,383 12,452
2002 22,567 35,770 12,452
2002 20,834 33,152 12,458
2002 18,943 29,940 12,472
2002 18,891 30,091 12,514
2002 17,525 27,668 12,535
2002 18,313 28,866 12,566
2002 19,153 30,534 12,566
2002 18,453 29,280 12,538
2003 18,050 28,425 12,594
2003 17,770 27,748 12,691
2003 17,805 27,981 12,767
April 30, 2003 $18,803 $30,011 $12,739
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 5-Year 6/30/1993
- ----------------------------------------------------------------
without sales charge (17.45)% (1.15)% 7.24%
with sales charge (22.00)% (2.27)% 6.63%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge (18.44)% (2.28)% 2.25%
with sales charge (21.70)% (2.28)% 2.25%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value (16.90)% (0.62)% 1.81%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the S&P MidCap 400 Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** An unmanaged index comprised of 400 stocks designed to represent performance of the mid-cap segment of the U.S. equity markets. "S&P MidCap 400 Index" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
*** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance has been restated to reflect the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Mid Cap Index Fund
[PHOTO OMITTED: KEVIN R. BRIMMER]
Kevin R. Brimmer is the portfolio manager for The AAL Small Cap Index Fund II, The AAL Mid Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL Large Company Index Fund and The AAL Large Company Index Fund II. He holds a bachelor's degree in actuarial science and statistics and an MBA, both from Drake University.
The AAL Mid Cap Index Fund provided a return of -17.68% for the 12-month period ended April 30, 2003. For the same time period, the S&P MidCap 400 Index provided a -17.51% return. The Lipper, Inc. mid cap core peer group provided return of -17.74%. The difference in returns between the Fund and the Index is primarily the result of Fund expenses and transaction costs.
Mid-cap stock prices were buffeted by investor's unease with both the state of the economic recovery and the geopolitical picture with terrorism threats and the outbreak of war with Iraq. The decline in equities was widespread across industry sectors as no economic sectors yielded positive returns. As has been the case for the past three years, the information technology sector continued to have the most negative impact on performance. The other areas that most hindered performance were the telecommunication services and basic materials sectors.
As an index fund, The AAL Mid Cap Index Fund does not make active allocation decisions based on our outlook for the market. The Fund is passively managed with the primary goal of replicating the S&P MidCap 400 Index -- purchasing all 400 securities in proportions, as close as practical, to those of the Index. Differences in performance between the Fund and the Index are the result of management fees, costs for transactions, the small amount of cash held by the Fund, and minor variances in the proportion of each security relative to the Index. As always, it is our objective to minimize the impact of the various factors that can create performance-tracking errors relative to the Index, thereby tying performance of the Fund as close to the Index as possible.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 19.8%
Consumer Discretionary 16.9%
Health Care 13.0%
Industrials 12.7%
Information Technology 11.7%
Energy 6.8%
Utilities 6.6%
Consumer Staples 5.0%
Materials 4.3%
Telecommunication Services 0.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 2.6%
Common Stocks 97.4%
Footnote reads:
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Mid Cap Index Fund seeks total returns that track the performance of the S&P MidCap 400 Index, by investing primarily in common stocks comprising the Index.
Institutional Share
- ------------------------
Ticker IIMIX
Net Assets $20,762,250
NAV $8.91
Outlook
Although we need to expect continuation of the volatile market conditions, we have seen many positive signs that indicate that the economic climate is changing. And barring any unforeseen shocks to our economy, the base is being built for an environment that will reward patient investors that have built a portfolio with the appropriate asset allocation and adequate diversification.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Institutional Class Shares
The AAL Consumer
Mid Cap S&P MidCap Price
Date Index Fund 400 Index** Index*
- ------------------------------------------------------------------------
December 31, 1999 10,000 10,000 10,000
2000 9,730 9,718 10,024
2000 10,480 10,398 10,083
2000 11,320 11,269 10,166
2000 10,900 10,875 10,172
2000 10,760 10,740 10,178
2000 10,940 10,897 10,238
2000 11,090 11,069 10,255
2000 12,320 12,305 10,267
2000 12,220 12,221 10,321
2000 11,780 11,807 10,339
2000 10,880 10,915 10,345
2000 11,729 11,751 10,339
2001 11,943 12,012 10,404
2001 11,279 11,327 10,446
2001 10,433 10,485 10,469
2001 11,568 11,641 10,511
2001 11,836 11,912 10,559
2001 11,776 11,864 10,576
2001 11,603 11,687 10,547
2001 11,224 11,305 10,547
2001 9,849 9,899 10,594
2001 10,271 10,337 10,559
2001 11,029 11,106 10,541
2001 11,588 11,679 10,499
2002 11,523 11,619 10,523
2002 11,534 11,633 10,564
2002 12,354 12,465 10,624
2002 12,289 12,406 10,683
2002 12,081 12,197 10,683
2002 11,195 11,304 10,689
2002 10,127 10,209 10,701
2002 10,171 10,261 10,737
2002 9,368 9,434 10,755
2002 9,764 9,843 10,781
2002 10,314 10,412 10,781
2002 9,901 9,984 10,758
2003 9,594 9,693 10,805
2003 9,367 9,462 10,888
2003 9,435 9,541 10,954
April 30, 2003 $10,116 $10,233 $10,930
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Institutional Class/2/ 1-Year 12/31/1999
- ----------------------------------------------------------------
Net Asset Value (17.68)% 0.35%
Footnotes read:
* The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
** An unmanaged index comprised of 400 stocks designed to represent performance of the mid-cap segment of the U.S. equity markets. "S&P MidCap 400 Index" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index. Index funds are subject to the same market risks associated with the stocks in their respective indexes.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Institutional Class shares have no sales loads and are for institutional shareholders only.
The AAL Mid Cap Index Fund II
[PHOTO OMITTED: KEVIN R. BRIMMER]
Kevin R. Brimmer is the portfolio manager for The AAL Small Cap Index Fund II, The AAL Mid Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL Large Company Index Fund and The AAL Large Company Index Fund II. He holds a bachelor's degree in actuarial science and statistics and an MBA, both from Drake University.
The AAL Mid Cap Index Fund II provided a return of -18.36% for the 12-month period ended April 30, 2003. For the same time period, the S&P MidCap 400 Index provided a -17.51% return. The Lipper, Inc. mid cap core peer group provided a return of -17.74%. The difference in returns between the Fund and the Index is primarily the result of Fund expenses and transaction costs.
Mid-cap stock prices were buffeted by investors' unease with both the state of the economic recovery and the geopolitical picture with terrorism threats and the outbreak of war with Iraq. The decline in equities was widespread across industry sectors as no economic sectors yielded positive returns. As has been the case for the past three years, the information technology sector continued to have the most negative impact on performance. The other areas that most hindered performance were the telecommunication services and basic materials sectors.
As an index fund, The AAL Mid Cap Index Fund II does not make active allocation decisions based on our outlook for the market. The Fund is passively managed with the primary goal of replicating the S&P MidCap 400 Index -- purchasing all 400 securities in proportions, as close as practical, to those of the Index. Differences in performance between the Fund and the Index are the result of management fees, costs for transactions, the small amount of cash held by the Fund, and minor variances in the proportion of each security relative to the Index. As always, it is our objective to minimize the impact of the various factors that can create performance-tracking errors relative to the Index, thereby tying performance of the Fund as close to the Index as possible.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 20.0%
Consumer Discretionary 16.9%
Health Care 13.1%
Industrials 12.8%
Information Technology 11.9%
Energy 6.9%
Utilities 6.7%
Consumer Staples 5.0%
Materials 4.4%
Telecommunication Services 0.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 1.7%
Common Stocks 98.3%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Mid Cap Index Fund II seeks total returns that track the performance of the S&P MidCap 400 Index by investing primarily in common stocks comprising the Index.
A Share B Share
- ------------------------ ------------------------
Ticker AAMIX Ticker BMIFX
Net Assets $29,006,273 Net Assets $2,953,764
NAV $8.65 NAV $8.43
Outlook
Although we need to expect continuation of the volatile market conditions, we have seen many positive signs that indicate that the economic climate is changing. And barring any unforeseen shocks to our economy, the base is being built for an environment that will reward patient investors that have built a portfolio with the appropriate asset allocation and adequate diversification.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
The AAL Consumer
Mid Cap S&P MidCap Price
Date Index Fund II 400 Index*** Index**
- ------------------------------------------------------------------------
July 1, 2000 10,000 10,000 10,000
2000 9,374 9,958 10,017
2000 10,404 11,070 10,029
2000 10,300 10,994 10,081
2000 9,913 10,621 10,099
2000 9,148 9,819 10,104
2000 9,879 10,571 10,099
2001 10,059 10,806 10,163
2001 9,471 10,189 10,203
2001 8,760 9,432 10,226
2001 9,708 10,472 10,267
2001 9,926 10,716 10,313
2001 9,869 10,673 10,331
2001 9,698 10,514 10,302
2001 9,376 10,170 10,302
2001 8,219 8,905 10,348
2001 8,561 9,299 10,313
2001 9,177 9,990 10,296
2001 9,646 10,507 10,255
2002 9,579 10,452 10,279
2002 9,579 10,465 10,319
2002 10,254 11,213 10,377
2002 10,188 11,161 10,435
2002 10,007 10,972 10,435
2002 9,275 10,169 10,441
2002 8,371 9,184 10,453
2002 8,409 9,230 10,488
2002 7,724 8,487 10,505
2002 8,047 8,855 10,531
2002 8,504 9,366 10,531
2002 8,144 8,982 10,508
2003 7,904 8,719 10,554
2003 7,712 8,512 10,636
2003 7,769 8,583 10,700
April 30, 2003 $ 8,317 $ 9,206 $10,676
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (18.36)% (4.42)%
with sales charge (22.83)% (6.31)%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (19.05)% (5.28)%
with sales charge (22.26)% (6.27)%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the S&P MidCap 400 Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
*** An unmanaged index comprised of 400 stocks designed to represent performance of the mid cap segment of the U.S. equity markets. "S&P MidCap 400 Index" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index. Index funds are subject to the same market risks associated with the stocks in their respective indexes.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance reflects the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
The AAL International Fund
[PHOTO OMITTED: KATHLEEN HARRIS]
Oechsle International Advisors, LLC, the subadviser to The AAL International Fund, utilizes a team approach to managing the Fund. Kathleen Harris is the portfolio manager primarily responsible for managing The AAL International Fund. She is employed by Oechsle International Advisors, LLC. She received an MBA in finance from the University of Chicago Graduate School of Business and she is a Chartered Financial Analyst.
The long, slow march to war in Iraq took its toll on international equity markets in the 12-month period ending April 30, 2003. The combination of rising oil prices, fears of slowing economic activity, strained diplomatic relations between long-time allies and dithering rather than decisiveness sapped investor confidence, causing a broad-based decline in the markets. And if geopolitical issues were not enough for battered investors, a serious infectious disease in the form of SARS began to have a serious impact on commerce and travel in Asia. In this fragile environment, The AAL International Fund recorded a - -22.17% total return while the Fund's Lipper, Inc. peer group of similar international stock funds posted a -18.26% total return. The MSCI EAFE Index, the Fund's unmanaged index benchmark, finished the reporting period with a -16.27% total return.
Europe and Asia Weak
The European Financial sector fell victim to market panics during the period, being hit particularly hard in the second and third quarters of 2002. Concerns raised when regulators forced banks and insurance companies to sell equities to raise capital burgeoned into repeated rumors of the demise of the European financial system and drove stocks of the major competitors down precipitously. A handful of Fund holdings were caught in the crossfire which detracted from performance. Importantly, though, these stocks were strong performers late in March when markets began to behave better and continued to advance in the more constructive environment of April. While these stocks did not make an auspicious debut in the Fund, they have begun to fulfill our expectations for them when we introduced them to your Fund and we expect them to add significant value over the long term.
Your Fund's investments in Asia also reflect the short-term difficulties of investing amid the geopolitical turmoil of the moment. Emerging markets generally added to performance compared to developed markets, but most of the Fund's emerging market exposure is in South Korea. As long-term investors, we are very comfortable with this stance. We believe that the economic and market advances in South Korea make it a likely candidate for inclusion in developed market indices in the next year to eighteen months. During the period, the coalition war with Iraq and the U.S. rhetorical battle with North Korea spooked international investors and the Fund's holdings in the region suffered accordingly. We are confident, however, that this underperformance stems from short-term nervousness over a political issue that will be resolved peacefully. We also note that some of the world's best global competitors, such as Samsung Electronics, call South Korea home and sell at single-digit price/earnings ratios. This is an extraordinary combination of quality and value. We are equally confident that this diplomatic dance does nothing to undermine the long-term value of these investments.
[GRAPHIC OMITTED: TOP COUNTRIES]
Top Countries
United Kingdom 26.9%
Japan 15.7%
France 14.9%
Italy 11.2%
Netherlands 7.5%
South Korea 3.5%
Spain 3.4%
Sweden 2.7%
Hong Kong 2.3%
Switzerland 2.2%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 2.0%
Common Stocks 98.0%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL International Fund seeks long-term capital growth by investing primarily in a diversified portfolio of foreign stocks.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AAITX Ticker BBITX Ticker N/A
Net Assets $126,478,545 Net Assets $6,381,082 Net Assets $2,836,541
NAV $6.68 NAV $6.52 NAV $6.73
Outlook
We have believed for some time that the markets were ignoring fundamental evidence that economies and earnings prospects were improving. This was perhaps logical in light of the political, military and medical challenges that the global community has had to face. Our job, however, is to continue to focus on earnings potential a year or two down the road and anticipate what investors will reward when they return their gaze to the more fundamental earnings picture. This market will be no exception because in the long run it is earnings that drive equity prices. And on that front, we believe that macroeconomic and corporate fundamentals are improving. We believe that markets will focus on those fundamentals and respond with growing enthusiasm as the future begins to look both clearer and brighter. And we are convinced that when markets examine fundamental earnings prospects, investors will find particular appeal in the stocks that we have assembled in the Fund.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
The AAL Consumer
International MSCI EAFE Price
Date Fund Index*** Index**
- ------------------------------------------------------------------------
August 1, 1995 10,000 10,000 10,000
1995 9,469 9,619 10,026
1995 9,431 9,806 10,046
1995 9,412 9,543 10,079
1995 9,412 9,808 10,072
1995 9,586 10,203 10,066
1996 9,994 10,245 10,125
1996 9,956 10,280 10,157
1996 10,107 10,498 10,210
1996 10,496 10,804 10,249
1996 10,439 10,605 10,269
1996 10,486 10,664 10,275
1996 10,136 10,353 10,295
1996 10,164 10,375 10,315
1996 10,354 10,651 10,348
1996 10,448 10,542 10,380
1996 10,818 10,961 10,400
1996 10,757 10,820 10,400
1997 10,953 10,442 10,433
1997 11,198 10,613 10,466
1997 11,179 10,651 10,492
1997 11,159 10,708 10,505
1997 11,669 11,404 10,498
1997 12,023 12,033 10,511
1997 12,101 12,228 10,525
1997 11,709 11,315 10,544
1997 11,875 11,949 10,571
1997 11,198 11,030 10,597
1997 11,012 10,918 10,590
1997 10,861 11,013 10,577
1998 11,151 11,517 10,597
1998 11,549 12,255 10,616
1998 11,903 12,633 10,636
1998 11,978 12,733 10,656
1998 12,097 12,671 10,675
1998 11,946 12,767 10,689
1998 11,828 12,896 10,702
1998 10,807 11,299 10,715
1998 10,453 10,952 10,728
1998 11,001 12,094 10,754
1998 11,592 12,714 10,754
1998 12,063 13,215 10,748
1999 12,570 13,176 10,774
1999 12,142 12,862 10,787
1999 12,333 13,399 10,820
1999 12,795 13,942 10,898
1999 12,356 13,224 10,898
1999 12,717 13,739 10,898
1999 13,066 14,148 10,931
1999 13,438 14,199 10,957
1999 13,652 14,342 11,010
1999 14,160 14,880 11,030
1999 14,937 15,397 11,036
1999 16,847 16,778 11,036
2000 16,215 15,712 11,062
2000 17,388 16,135 11,128
2000 17,332 16,761 11,220
2000 15,854 15,879 11,226
2000 15,325 15,491 11,233
2000 16,057 16,097 11,298
2000 15,415 15,422 11,318
2000 15,708 15,556 11,331
2000 14,772 14,798 11,390
2000 14,219 14,449 11,410
2000 13,475 13,907 11,416
2000 13,793 14,401 11,410
2001 13,935 14,394 11,482
2001 12,687 13,315 11,528
2001 11,722 12,427 11,554
2001 12,428 13,291 11,600
2001 11,887 12,822 11,652
2001 11,392 12,297 11,672
2001 11,110 12,074 11,639
2001 10,569 11,768 11,639
2001 9,380 10,576 11,692
2001 9,604 10,847 11,652
2001 10,086 11,246 11,633
2001 10,163 11,313 11,587
2002 9,638 10,712 11,613
2002 9,853 10,787 11,659
2002 10,306 11,371 11,725
2002 10,282 11,446 11,790
2002 10,259 11,602 11,790
2002 9,841 11,121 11,797
2002 8,803 12,227 11,810
2002 8,684 12,169 11,849
2002 7,777 10,845 11,869
2002 8,243 11,429 11,899
2002 8,493 11,948 11,899
2002 8,135 11,546 11,872
2003 7,727 11,064 11,925
2003 7,548 10,810 12,017
2003 7,284 10,598 12,089
April 30, 2003 $ 8,003 $11,636 $12,063
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 5-Year 8/1/1995
- ----------------------------------------------------------------
without sales charge (22.17)% (7.75)% (2.12)%
with sales charge (26.44)% (8.79)% (2.83)%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge (23.29)% (8.80)% (5.41)%
with sales charge (26.36)% (8.80)% (5.41)%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value (21.45)% (7.09)% (5.48)%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the MSCI EAFE Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
*** The MSCI EAFE Index[Registered Trademark] is an unmanaged market capitalization-weighted equity index composed of a sample of companies representative of the market structure in 20 countries. Constituent stocks are selected on the basis of industry representation, liquidity and sufficient float. It is not possible to invest directly in the Index.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance has been restated to reflect the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Capital Growth Fund
[PHOTO OMITTED: FREDERICK L. PLAUTZ]
Frederick L. Plautz is the portfolio manager for The AAL Capital Growth Fund. He is also co-manager of The AAL Balanced Fund. Mr. Plautz has 21 years of investment industry experience, and is a graduate of the University of Wisconsin, where he earned his master's degree in finance.
Large-company growth stocks delivered weak performance during the 12 months ended April 30, 2003, hampered by war-related jitters and sluggish economic growth. The AAL Capital Growth Fund ended the reporting period with a -14.66% total return, while its Lipper, Inc., peer group of large-capitalization core funds posted a -14.99% total return. The Fund's market benchmark, the large-company S&P 500 Index, returned -13.31% over this time.
Media Stocks Outperform
Large-capitalization stocks traded lower early in the period, with utility and energy issues sustaining particularly heavy losses in May and June. Both growth and value issues came under pressure during the third quarter, owing to corporate governance concerns and diminished earnings expectations. Within the technology sector, shares of computer equipment and semiconductor manufacturers remained weak, while firms less dependent on capital spending saw modest gains.
During the first half of the period, we were able to shore up the Fund's relative performance by underweighting the worst-performing energy and utility issues, while keeping the Fund broadly diversified. Although a number of health-care and financial holdings disappointed through the third quarter, we were able to maintain the Fund's competitive position by focusing on larger-capitalization names, which generally outpaced their smaller counterparts.
During the second half of the reporting period, the Fund's media and cable holdings were star performers, led by industry giants Comcast, Cox Communications and Liberty Media. At the same time, energy stocks performed respectably, with valuations spiking in February. War concerns weighed down equity returns through the first quarter of 2003, before renewed optimism sparked a rally in April.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Consumer Discretionary 20.9%
Financials 19.2%
Health Care 13.4%
Information Technology 12.7%
Energy 11.8%
Consumer Staples 10.0%
Industrials 8.1%
Telecommunication Services 1.8%
Utilities 0.7%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 1.4%
Common Stocks 98.6%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Capital Growth Fund seeks long-term capital growth by investing primarily in a diversified portfolio of common stocks and securities convertible into common stocks.
A Share B Share Institutional Share
- ------------------------- ------------------------ ------------------------
Ticker AALGX Ticker BBLGX Ticker IILGX
Net Assets $2,598,205,110 Net Assets $81,186,872 Net Assets $68,179,098
NAV $25.39 NAV $24.19 NAV $25.46
Outlook
Over the coming months, we expect to see the economy grow at a moderate pace and profits to improve at the margin, providing a constructive backdrop for large-company stocks. With interest rates low and $350 billion in tax cuts on the way, it would appear that the major policy levers have been pulled. As such, we expect little in the way of additional stimulus initiatives in the next year. Nonetheless, a number of impediments to economic growth remain, including a lack of pricing power and excess industrial capacity.
Going forward, we will continue to overweight energy stocks, with a particular emphasis on natural gas providers, which are in a unique position given low inventories and strong demand. In addition, we believe our media and cable holdings will provide added value, due to the superior pricing power of the major players in this industry. We expect to remain market-neutral in most other respects, but will continue to make structural adjustments as conditions warrant.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
The AAL Consumer
Capital S&P 500 Price
Date Growth Fund Index** Index***
- ------------------------------------------------------------------------
April 30, 1993 10,000 10,000 10,000
1993 9,597 10,268 10,014
1993 9,565 10,298 10,028
1993 9,483 10,256 10,028
1993 9,753 10,645 10,056
1993 9,643 10,564 10,076
1993 9,882 10,782 10,118
1993 9,791 10,679 10,125
1993 9,867 10,809 10,125
1994 9,939 11,176 10,153
1994 9,684 10,873 10,188
1994 9,319 10,399 10,222
1994 9,450 10,532 10,236
1994 9,463 10,705 10,243
1994 9,256 10,442 10,278
1994 9,480 10,785 10,306
1994 9,751 11,228 10,347
1994 9,619 10,953 10,375
1994 9,856 11,199 10,382
1994 9,559 10,791 10,396
1994 9,731 10,951 10,396
1995 9,974 11,235 10,438
1995 10,301 11,673 10,479
1995 10,481 12,018 10,514
1995 10,808 12,372 10,549
1995 11,183 12,866 10,569
1995 11,327 13,165 10,590
1995 11,711 13,601 10,590
1995 11,662 13,636 10,618
1995 12,215 14,211 10,639
1995 12,152 14,160 10,674
1995 12,607 14,782 10,667
1995 12,747 15,067 10,660
1996 13,276 15,580 10,722
1996 13,298 15,724 10,757
1996 13,276 15,875 10,813
1996 13,602 16,109 10,854
1996 13,898 16,525 10,875
1996 13,887 16,588 10,882
1996 13,262 15,855 10,903
1996 13,538 16,189 10,924
1996 14,506 17,100 10,958
1996 14,680 17,572 10,993
1996 15,843 18,900 11,014
1996 15,558 18,526 11,014
1997 16,565 19,683 11,049
1997 16,397 19,838 11,083
1997 15,612 19,023 11,111
1997 16,397 20,158 11,125
1997 17,495 21,386 11,118
1997 18,286 22,344 11,132
1997 19,609 24,121 11,146
1997 18,646 22,770 11,167
1997 19,456 24,017 11,194
1997 19,242 23,215 11,222
1997 20,121 24,290 11,215
1997 20,781 24,707 11,201
1998 20,837 24,980 11,222
1998 22,483 26,782 11,243
1998 23,419 28,153 11,264
1998 23,690 28,436 11,285
1998 22,995 27,948 11,306
1998 24,450 29,083 11,319
1998 24,130 28,773 11,333
1998 20,465 24,613 11,347
1998 21,849 26,190 11,361
1998 23,562 28,320 11,389
1998 24,883 30,036 11,389
1998 26,639 31,767 11,382
1999 27,941 33,096 11,410
1999 27,363 32,067 11,424
1999 28,340 33,350 11,458
1999 29,186 34,642 11,542
1999 28,657 33,824 11,542
1999 30,178 35,701 11,542
1999 29,421 34,586 11,576
1999 28,696 34,415 11,604
1999 28,395 33,472 11,660
1999 30,341 35,590 11,681
1999 31,033 36,314 11,688
1999 32,662 38,452 11,688
2000 30,996 36,521 11,715
2000 29,982 35,829 11,785
2000 32,811 39,334 11,882
2000 31,895 38,151 11,889
2000 31,936 37,368 11,896
2000 32,864 38,289 11,965
2000 32,269 37,691 11,986
2000 33,665 40,032 12,000
2000 32,368 37,918 12,063
2000 32,954 37,758 12,083
2000 31,492 34,781 12,090
2000 32,306 34,951 12,083
2000 32,069 36,191 12,160
2001 30,472 32,891 12,208
2001 28,962 30,808 12,236
2001 30,559 33,202 12,285
2001 30,305 33,424 12,340
2001 29,236 32,611 12,361
2001 28,654 32,290 12,326
2001 26,847 30,268 12,326
2001 25,014 27,824 12,382
2001 25,737 28,355 12,340
2001 27,376 30,530 12,319
2001 27,798 30,797 12,271
2002 27,375 30,348 12,299
2002 26,846 29,763 12,347
2002 27,851 30,882 12,417
2002 26,325 29,010 12,486
2002 26,175 28,796 12,486
2002 24,175 26,745 12,493
2002 22,295 24,660 12,507
2002 22,383 24,823 12,549
2002 19,893 22,127 12,569
2002 21,738 24,073 12,601
2002 22,648 25,489 12,601
2002 21,474 23,992 12,573
2003 21,058 23,365 12,629
2000 20,828 23,014 12,726
2003 21,005 23,237 12,802
April 30, 2003 $22,465 $25,150 $12,775
Average Annual Total Returns/1/
April 30, 2003
Class A/2/ 1-Year 5-Year 10-Year
- ----------------------------------------------------------------
without sales charge (14.66)% (1.06)% 9.05%
with sales charge (19.36)% (2.17)% 8.43%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge (15.63)% (2.08)% 4.96%
with sales charge (19.00)% (2.08)% 4.96%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value (14.24)% (0.67)% 2.26%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the S&P 500 Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** An unmanaged index comprised of 500 stocks representative of the stock market as a whole. "S&P 500[Registered Trademark]" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
*** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance has been restated to reflect the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Large Company Index Fund
[PHOTO OMITTED: KEVIN R. BRIMMER]
Kevin R. Brimmer is the portfolio manager for The AAL Small Cap Index Fund II, The AAL Mid Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL Large Company Index Fund and The AAL Large Company Index Fund II. He holds a bachelor's degree in actuarial science and statistics and an MBA, both from Drake University.
For the 12-month period ended April 30, 2003, The AAL Large Company Index Fund returned -13.36% versus a return for the S&P 500 Index of - -13.31% over this time period. The Fund's Lipper, Inc. S&P 500 Index objective peer group returned -14.99%. Returns to the Fund before investment expenses were modestly ahead of the benchmark. The Fund's investment objective is to provide returns approximating that of the S&P 500 Index, after fees and expenses. We were successful in achieving that objective.
Over the past 12 months, we have witnessed a struggle between cyclical forces, investor anxiety and the magnitude of the economic recovery. Economic data prompted mixed signals as to the underlying strength of the economic recovery. The rally of the first quarter of 2003 was not sufficient to offset the losses suffered during the previous quarters. Within the S&P 500 Index, stocks in every economic sector showed negative returns for the twelve-month period. Information technology holdings suffered the deepest declines as most underlying segments posted sharp one-year losses. Consumer discretionary stocks also declined amidst concerns of a reduction in consumer confidence. The health-care sector weathered the year's malaise the best with returns of negative 10.30%.
The AAL Large Company Index Fund, as an Index fund, is managed with a passive approach, meaning there is no active stock selection process. The objective of the Fund is to replicate the performance of the S&P 500 Index in order to provide broad exposure to large capitalization stocks across various economic sectors. This is done by purchasing all 500 securities in the Index to mirror the composition of the Index as closely as possible, while at the same time trying to keep transaction costs at a minimum.
Generally, variances in performance relative to the Index are a function of fund expenses and transaction costs. It is our objective to minimize the impact of these variables on the Fund's returns.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 19.7%
Health Care 14.3%
Information Technology 14.2%
Consumer Discretionary 13.6%
Industrials 11.1%
Consumer Staples 8.3%
Energy 5.5%
Telecommunication Services 3.6%
Utilities 2.7%
Materials 2.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 4.4%
Common Stocks 95.6%
Footnote reads:
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Large Company Index Fund seeks total returns that track the performance of the S&P 500 Index by investing primarily in common stocks comprising the Index.
Institutional Share
- ------------------------
Ticker IILCX
Net Assets $62,066,525
NAV $6.31
Outlook
We continue to believe that there is a world of opportunity still available in the U.S. equity markets despite mixed economic news. The economy is still exhibiting signs of improvement and corporate profits have continued to gain momentum during 2003. As volatility within the overall equities market continues, large-cap companies will likely be in favor with investors seeking more stability. We appreciate your investment in The AAL Large Company Index Fund.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Institutional Class Shares
The AAL Consumer
Large Company S&P 500 Price
Date Index Fund Index** Index*
- ------------------------------------------------------------------------
December 31, 1999 10,000 10,000 10,000
2000 10,470 9,498 10,024
2000 10,283 9,318 10,083
2000 11,283 10,229 10,166
2000 10,931 9,922 10,172
2000 10,701 9,718 10,178
2000 10,975 9,958 10,238
2000 10,811 9,802 10,255
2000 11,481 10,411 10,267
2000 10,876 9,861 10,321
2000 10,822 9,819 10,339
2000 9,965 9,045 10,345
2000 10,012 9,089 10,339
2001 10,356 9,412 10,404
2001 9,402 8,554 10,446
2001 8,815 8,012 10,469
2001 9,491 8,634 10,511
2001 9,547 8,692 10,559
2001 9,325 8,481 10,576
2001 9,225 8,397 10,547
2001 8,649 7,872 10,547
2001 7,950 7,236 10,594
2001 8,072 7,374 10,559
2001 8,682 7,940 10,541
2001 8,750 8,009 10,499
2002 8,627 7,892 10,523
2002 8,460 7,740 10,564
2002 8,773 8,031 10,624
2002 8,237 7,544 10,683
2002 8,181 7,489 10,683
2002 7,601 6,955 10,689
2002 7,020 6,413 10,701
2002 7,065 6,455 10,737
2002 6,306 5,754 10,755
2002 6,853 6,260 10,781
2002 7,243 6,629 10,781
2002 6,820 6,239 10,758
2003 6,639 6,076 10,805
2003 6,537 5,985 10,888
2003 6,582 6,043 10,954
April 30, 2003 $ 7,136 $ 6,540 $10,930
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Institutional Class/2/ 1-Year 12/31/1999
- ----------------------------------------------------------------
Net Asset Value (13.36)% (12.15)%
Footnotes read:
* The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
** An unmanaged index comprised of 500 stocks representative of the stock market as a whole. "S&P 500[Registered Trademark]" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index. Index funds are subject to the same market risks associated with the stocks in their respective indexes.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Institutional Class shares have no sales loads and are for institutional shareholders only.
The AAL Large Company Index Fund II
[PHOTO OMITTED: KEVIN R. BRIMMER]
Kevin R. Brimmer is the portfolio manager for The AAL Small Cap Index Fund II, The AAL Mid Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL Large Company Index Fund and The AAL Large Company Index Fund II. He holds a bachelor's degree in actuarial science and statistics and an MBA, both from Drake University.
For the 12-month period ended April 30, 2003, The AAL Large Company Index Fund II returned -13.58% versus a return for the S&P 500 Index of - -13.31% over this time period. The Fund's Lipper, Inc. S&P 500 Index objective peer group returned -14.99%. Returns to the Fund before investment expenses were modestly ahead of the benchmark. The Fund's investment objective is to provide returns approximating that of the S&P 500 Index, after fees and expenses. We were successful in achieving that objective.
Over the past 12 months, we have witnessed a struggle between cyclical forces, investor anxiety and the magnitude of the economic recovery. Economic data prompted mixed signals as to the underlying strength of the economic recovery. The rally of the first quarter of 2003 was not sufficient to offset the losses suffered during the previous quarters. Within the S&P 500 Index, stocks in every economic sector showed negative returns for the twelve-month period. Information technology holdings suffered the deepest declines as most underlying segments posted sharp one-year losses. Consumer discretionary stocks also declined amidst concerns of a reduction in consumer confidence. The health-care sector weathered the year's malaise the best with returns of negative 10.30%.
The AAL Large Company Index Fund II, as an Index fund, is managed with a passive approach, meaning there is no active stock selection process. The objective of the Fund is to replicate the performance of the S&P 500 Index in order to provide broad exposure to large capitalization stocks across various economic sectors. This is done by purchasing all 500 securities in the Index to mirror the composition of the Index as closely as possible, while at the same time trying to keep transaction costs at a minimum.
Generally, variances in performance relative to the Index are a function of fund expenses and transaction costs. It is our objective to minimize the impact of these variables on the Fund's returns.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 19.9%
Health Care 14.4%
Information Technology 14.3%
Consumer Discretionary 13.6%
Industrials 11.2%
Consumer Staples 8.3%
Energy 5.6%
Telecommunication Services 3.6%
Utilities 2.7%
Materials 2.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 3.8%
Common Stocks 96.2%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Large Company Index Fund II seeks total returns that track the performance of the S&P 500 Index by investing primarily in common stocks comprising the Index.
A Share B Share
- ------------------------ ------------------------
Ticker AALCX Ticker BLCIX
Net Assets $27,800,920 Net Assets $3,357,905
NAV $6.30 NAV $6.15
Outlook
We continue to believe that there is a world of opportunity still available in the U.S. equity markets despite mixed economic news. The economy is still exhibiting signs of improvement and corporate profits have continued to gain momentum during 2003. As volatility within the overall equities market continues, large-cap companies will likely be in favor with investors seeking more stability. We appreciate your investment in The AAL Large Company Index Fund II.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
The AAL Consumer
Large Company S&P 500 Price
Date Index Fund II Index*** Index**
- ------------------------------------------------------------------------
July 1, 2000 10,000 10,000 10,000
2000 9,270 9,743 10,017
2000 9,828 10,348 10,029
2000 9,299 9,802 10,081
2000 9,223 9,761 10,099
2000 8,477 8,991 10,104
2000 8,514 9,035 10,099
2001 8,779 9,356 10,163
2001 7,966 8,503 10,203
2001 7,456 7,964 10,226
2001 8,023 8,583 10,267
2001 8,061 8,640 10,313
2001 7,853 8,430 10,331
2001 7,768 8,347 10,302
2001 7,277 7,825 10,302
2001 6,691 7,193 10,348
2001 6,804 7,330 10,313
2001 7,305 7,892 10,296
2001 7,362 7,961 10,255
2002 7,248 7,845 10,279
2002 7,106 7,694 10,319
2002 7,362 7,983 10,377
2002 6,917 7,499 10,435
2002 6,851 7,444 10,435
2002 6,360 6,914 10,441
2002 5,878 6,375 10,453
2002 5,916 6,417 10,488
2002 5,283 5,720 10,505
2002 5,736 6,223 10,531
2002 6,057 6,589 10,531
2002 5,703 6,202 10,508
2003 5,551 6,040 10,554
2003 5,466 5,949 10,636
2003 5,494 6,007 10,700
April 30, 2003 $ 5,978 $ 6,501 $10,676
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (13.58)% (14.97)%
with sales charge (18.37)% (16.65)%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge (14.58)% (15.81)%
with sales charge (18.00)% (16.71)%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the S&P 500 Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
*** An unmanaged index comprised of 500 stocks representative of the stock market as a whole. "S&P 500[Registered Trademark]" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index. Index funds are subject to the same market risks associated with the stocks in their respective indexes.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance reflects the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
The AAL Equity Income Fund
[PHOTO OMITTED: LEWIS A. BOHANNON]
Lewis A. Bohannon is the portfolio manager for The AAL Equity Income Fund. He has more than 22 years of experience in equity research. He holds a bachelor's degree in social psychology from Harvard University and master's degrees in special education and finance from Northeastern University and the University of Virginia, respectively. He is a Chartered Financial Analyst.
The market for large-company stocks remained volatile during the 12-month period ended April 30, 2003, with both growth and value stocks coming under selling pressure. Hurt by disappointing returns from a number of key holdings in October, The AAL Equity Income Fund returned - -20.19% during the 12-month reporting period, while its Lipper, Inc., peer group of equity income funds returned -14.25%. The Fund's market benchmark, the S&P 500/Barra Value Index, posted a -14.62% return during this time.
Market Sentiment Shifts
The reporting period began on a positive note for equity income investors, with value stocks outperforming growth issues by a significant margin. Despite a challenging trading environment, the Fund's financial, retail and information technology picks held up well in May and June, boosting relative performance.
Market conditions deteriorated quickly in July, however, and equities sold off sharply through September. As volatility escalated, we assumed a defensive posture, steering clear of beleaguered telecommunications providers, while investing in higher-quality names. This approach, coupled with the strong performance of the Fund's consumer discretionary and financial holdings, led to competitive returns through the third quarter.
October proved to be an especially problematic month and accounted for a majority of the Fund's underperformance for the period. Much of the difficulty stemmed from a small number of defensive stocks and REITs, which sustained enough losses to pull the Fund's cumulative 12-month returns sharply lower.
The war in Iraq exercised considerable influence over the equity markets through the first quarter of 2003, with investors running on emotion rather than considering company fundamentals such as corporate profitability. During this time, we increased our position in economically cyclical stocks, while reducing our exposure to consumer staples and health-care issues. This strategy proved advantageous through mid-March, when investor sentiment underwent a rapid improvement in light of the quick resolution of the war. In late March and April, the Fund was negatively impacted by a market tilt toward lower-quality stocks.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 29.0%
Energy 10.6%
Industrials 10.5%
Consumer Discretionary 10.3%
Information Technology 8.0%
Health Care 7.7%
Consumer Staples 6.6%
Materials 5.9%
Telecommunication Services 5.4%
Utilities 4.1%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 1.9%
Common Stocks 98.1%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Equity Income Fund seeks current income, long-term income growth and capital growth by investing primarily in a diversified portfolio of income-producing equity securities.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AAUTX Ticker BBEIX Ticker N/A
Net Assets $206,743,705 Net Assets $8,102,333 Net Assets $9,794,148
NAV $10.18 NAV $10.16 NAV $10.20
Outlook
Despite the turbulence of the past 12 months, conditions are not altogether unfavorable for equity income investors. Value stocks typically flourish against a backdrop of slow and measured economic growth-the very pace at which the economy is currently expanding. Given low prevailing interest rates, recently enacted fiscal stimulus initiatives and a successful resolution to the war in Iraq, we believe there is reason for optimism.
With an eye toward minimizing risk, we have recently increased the number of names in the Fund by just under 50%. If the economy gains significant momentum, we may also enhance the economic sensitivity of the Fund by increasing our exposure to industrial and consumer discretionary stocks. Given the foreseeable conditions, however, we expect to remain primarily sector-neutral. As before, we plan to maintain our focus on larger-company names within consolidating industries, particularly those best-suited to benefit from an expanding economy.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
The AAL S&P Consumer
Equity 500/Barra Price
Date Income Fund Value Index** Index***
- ------------------------------------------------------------------------
March 18, 1994 10,000 10,000 10,000
1994 9,374 9,444 10,034
1994 9,403 9,643 10,048
1994 9,195 9,803 10,055
1994 8,977 9,532 10,089
1994 9,235 9,854 10,116
1994 9,244 10,133 10,157
1994 8,987 9,776 10,184
1994 9,083 9,989 10,191
1994 8,949 9,584 10,205
1994 8,776 9,702 10,205
1995 9,144 9,964 10,245
1995 9,134 10,351 10,286
1995 9,066 10,637 10,320
1995 9,262 10,987 10,354
1995 9,732 11,475 10,375
1995 9,800 11,563 10,395
1995 9,908 11,961 10,395
1995 9,948 12,063 10,423
1995 10,530 12,483 10,443
1995 10,669 12,288 10,477
1995 10,818 12,932 10,470
1995 11,335 13,291 10,464
1996 11,556 13,689 10,525
1996 11,285 13,817 10,559
1996 11,185 14,141 10,613
1996 11,013 14,285 10,654
1996 11,043 14,500 10,675
1996 11,417 14,430 10,682
1996 10,877 13,821 10,702
1996 10,867 14,203 10,723
1996 10,898 14,811 10,757
1996 11,320 15,313 10,791
1996 11,742 16,484 10,811
1996 11,880 16,215 10,811
1997 12,005 16,963 10,845
1997 12,077 17,086 10,879
1997 11,714 16,501 10,907
1997 11,881 17,119 10,920
1997 12,531 18,193 10,913
1997 12,913 18,888 10,927
1997 13,156 20,399 10,941
1997 12,639 19,478 10,961
1997 13,304 20,620 10,988
1997 13,166 19,862 11,016
1997 13,888 20,619 11,009
1997 14,538 21,077 10,995
1998 14,416 20,817 11,016
1998 15,113 22,378 11,036
1998 15,861 23,512 11,057
1998 15,872 23,790 11,077
1998 15,628 23,455 11,097
1998 15,968 23,633 11,111
1998 15,667 23,120 11,125
1998 13,475 19,402 11,138
1998 14,316 20,581 11,152
1998 15,210 22,193 11,179
1998 15,779 23,349 11,179
1998 16,470 24,169 11,172
1999 16,553 24,658 11,200
1999 16,303 24,127 11,213
1999 16,509 24,858 11,247
1999 17,473 27,001 11,329
1999 17,259 26,524 11,329
1999 17,791 27,543 11,329
1999 17,278 26,696 11,363
1999 16,765 26,020 11,391
1999 16,398 25,001 11,445
1999 16,829 26,413 11,466
1999 16,805 26,258 11,472
1999 17,143 27,245 11,472
2000 16,615 26,378 11,500
2000 16,399 24,730 11,568
2000 17,634 27,308 11,663
2000 17,333 27,125 11,670
2000 17,658 27,210 11,677
2000 17,065 26,135 11,745
2000 17,137 26,658 11,766
2000 18,152 28,446 11,779
2000 18,287 28,439 11,841
2000 18,311 28,970 11,861
2000 17,645 27,487 11,868
2000 18,773 28,902 11,861
2001 18,888 30,122 11,936
2001 18,478 28,126 11,984
2001 17,773 27,015 12,011
2001 18,764 28,848 12,059
2001 18,932 29,150 12,113
2001 17,870 28,206 12,134
2001 17,715 27,718 12,100
2001 16,990 26,116 12,100
2001 15,782 23,635 12,154
2001 16,029 23,635 12,113
2001 16,926 25,135 12,093
2001 17,245 25,517 12,045
2002 16,855 24,817 12,072
2002 16,607 24,595 12,120
2002 17,386 25,855 12,188
2002 16,838 24,560 12,256
2002 16,812 24,658 12,256
2002 15,691 23,104 12,263
2002 14,369 20,606 12,277
2002 14,435 20,748 12,318
2002 12,943 18,380 12,338
2002 13,127 19,905 12,369
2002 13,731 21,301 12,369
2002 13,091 20,195 12,342
2003 12,775 19,644 12,396
2003 12,485 19,108 12,492
2003 12,487 19,083 12,567
April 30, 2003 $13,438 $20,969 $12,540
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 5-Year 3/18/1994
- ----------------------------------------------------------------
without sales charge (20.19)% (3.28)% 3.93%
with sales charge (24.58)% (4.36)% 3.29%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge (21.01)% (4.25)% 1.22%
with sales charge (24.17)% (4.25)% 1.22%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value (19.70)% (2.80)% (0.86)%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index and the S&P 500/Barra Value Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** An unmanaged capitalization weighted index composed of the lowest price-to-book securities in the S&P 500 Index. The S&P 500/Barra Index is designed so that approximately one-half of the S&P 500 market capitalization is characterized as "value" and the other half as "growth." It is not possible to invest directly in either Index. The composition of the S&P 500/Barra Value Index serves as a better reflection of the Fund's current investment strategy than does the S&P 500.
*** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance has been restated to reflect the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Balanced Fund
[PHOTO OMITTED: FREDERICK L. PLAUTZ]
Frederick L. Plautz is the portfolio co-manager for The AAL Balanced Fund. He is also manager of The AAL Capital Growth Fund. Mr. Plautz has 21 years of investment industry experience and is a graduate of the University of Wisconsin, where he earned his master's degree in finance.
[PHOTO OMITTED: ALAN D. ONSTAD]
Alan D. Onstad is portfolio co-manager of The AAL Balanced Fund and The AAL Bond Fund. Mr. Onstad has been a portfolio manager with Thrivent Investment Management Inc., since 1995. He possesses a bachelor's degree in economics from Concordia College in Moorhead, Minnesota. He has earned the Chartered Financial Analyst designation.
Strong fixed-income returns helped balance weak equity performance in markets driven by uncertainty and weak economic growth for the 12-month period ended April 30, 2003. The AAL Balanced Fund posted a -4.90% total return edging its Lipper, Inc., peer group of similar hybrid funds which recorded a median total return of -6.58%.
Stocks Struggle, Surge at End
Large-company stocks continued a three-year trend by moving lower over the majority of the period. Utility and energy issues were particularly hard hit in May and June of 2002 owing to corporate governance and earnings woes. Within the technology sector, shares of computer equipment and semiconductor manufacturers remained unsure, while firms less dependent on capital spending saw modest gains.
During the first half of the period, we were able to shore up the Fund's relative performance by underweighting the worst-performing energy and utility issues, while keeping the Fund broadly diversified. Although a number of health care and financial holdings disappointed through the third quarter, we were able to maintain the Fund's competitive position by focusing on larger-capitalization names, which generally outpaced their smaller counterparts.
War concerns weighed down equity returns through the first quarter of 2003, before renewed optimism sparked a rally in April. During the second half of the reporting period, in the Fund's equity portion, media and cable holdings were star performers, led by industry giants Comcast, Cox Communications and Liberty Media.
Bonds Benefit from Shaky Economy
Investment-grade bond returns were mixed through much of the second quarter of 2002, with corporate issues and U.S. Treasury bonds both vying for market leadership. Over the ensuing months, corporate bonds underperformed as investors fled equities and higher-risk debt instruments for the safety of Treasuries, mortgage-backed bonds and agency credits. Gradually we trimmed the Fund's risk profile, which helped it outperform its peer group by a wide margin in August and September. As interest rates fell, we also took profits in mortgage- and asset-backed bonds -- investing the proceeds in government-chartered agencies like Fannie Mae and Freddie Mac.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financial 19.8%
Consumer Discretionary 11.9%
Health Care 7.6%
Mortgage-Backed Securities 7.4%
Information Technology 7.3%
Energy 7.1%
Consumer Staples 5.6%
Asset-Backed Securities 4.8%
Industrials 4.0%
Commercial-Backed Securities 3.5%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 8.0%
Common Stocks 56.4%
Long Term Investments 35.6%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Balanced Fund seeks long-term total return through a balance between income and the potential for long-term capital growth by investing primarily in a diversified portfolio of common stocks, bonds and money market instruments.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AABFX Ticker BBBFX Ticker IBBFX
Net Assets $260,818,423 Net Assets $19,343,239 Net Assets $107,816,645
NAV $10.75 NAV $10.70 NAV $10.74
The first quarter of 2003 saw a sharp increase in equity volatility, which generally benefited bond holders. With interest rates low, demand for higher-yielding instruments picked up significantly, resulting in rising corporate bond prices and narrowing yield spreads. During this time, we were able to minimize risk by maintaining the Fund's relatively short duration, while simultaneously extracting yield from off-maturity corporate issues.
Outlook
Over the coming year we anticipate slow but steady growth, with a gradual return to better corporate profitability. In this prospective environment, we believe stocks and corporate bonds will perform relatively well. On the fixed-income side we will look to hold the Fund's shorter-than-average duration in a strategy to mitigate interest rate risk without sacrificing undue levels of yield.
The stock portion of the Fund will emphasize energy stocks and holdings in the cable and media sector -- both sector overweightings underscore our belief in the competitive advantages and superior pricing power the major players currently have. The Fund's mix of large-company stocks, high-quality bonds, and short-term money market instruments provides excellent overall diversification and is designed to withstand a wide variety of economic environments.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
Lehman
Consumer Brothers The AAL
Price S&P 500 Aggregate Balanced
Date Index*** Index**** Bond Index** Fund
- ------------------------------------------------------------------------------
December 29, 1997 10,000 10,000 10,000 10,000
1997 9,450 10,180 10,008 9,988
1998 9,507 10,293 10,136 10,006
1998 9,932 11,035 10,129 10,025
1998 10,175 11,599 10,164 10,043
1998 10,241 11,716 10,217 10,062
1998 10,099 11,515 10,314 10,080
1998 10,502 11,982 10,401 10,093
1998 10,426 11,855 10,423 10,105
1998 9,569 10,143 10,593 10,118
1998 10,024 10,793 10,841 10,130
1998 10,416 11,670 10,783 10,155
1998 10,722 12,377 10,845 10,155
1998 11,155 13,090 10,877 10,149
1999 11,481 13,637 10,955 10,173
1999 11,270 13,213 10,764 10,186
1999 11,519 13,742 10,823 10,217
1999 11,721 14,274 10,858 10,291
1999 11,548 13,937 10,762 10,291
1999 11,829 14,710 10,728 10,291
1999 11,655 14,251 10,683 10,322
1999 11,499 14,180 10,677 10,347
1999 11,489 13,792 10,801 10,396
1999 11,908 14,664 10,841 10,415
1999 12,065 14,963 10,840 10,421
1999 12,378 15,844 10,788 10,421
2000 12,024 15,048 10,753 10,446
2000 11,877 14,763 10,883 10,508
2000 12,489 16,207 11,026 10,594
2000 12,281 15,720 10,994 10,601
2000 12,271 15,397 10,989 10,607
2000 12,552 15,777 11,218 10,669
2000 12,482 15,530 11,320 10,687
2000 12,811 16,494 11,484 10,700
2000 12,592 15,624 11,556 10,755
2000 12,743 15,558 11,633 10,774
2000 12,522 14,331 11,823 10,780
2000 12,788 14,401 12,042 10,774
2001 12,808 14,912 12,239 10,842
2001 12,525 13,552 12,346 10,885
2001 12,295 12,694 12,408 10,910
2001 12,662 13,680 12,356 10,954
2001 12,621 13,772 12,431 11,003
2001 12,381 13,437 12,478 11,022
2001 12,371 13,305 12,757 10,991
2001 12,011 12,472 12,903 10,991
2001 11,654 11,465 13,053 11,040
2001 11,933 11,683 13,326 11,003
2001 12,316 12,579 13,143 10,985
2001 12,402 12,690 13,059 10,941
2002 12,319 12,505 13,165 10,966
2002 12,194 12,263 13,292 11,009
2002 12,361 12,725 13,071 11,071
2002 12,027 11,953 13,325 11,133
2002 12,027 11,865 13,438 11,133
2002 11,536 11,020 13,554 11,139
2002 11,053 10,161 13,718 11,152
2002 11,148 10,228 13,949 11,189
2002 10,504 9,117 14,175 11,207
2002 11,011 9,919 14,110 11,235
2002 11,264 10,502 14,106 11,235
2002 10,993 9,886 14,398 11,211
2003 10,877 9,627 14,411 11,260
2003 10,877 9,482 14,610 11,347
2003 10,927 9,574 14,598 11,415
April 30, 2003 $11,438 $10,363 $14,719 $11,390
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
without sales charge (4.90)% 2.23% 3.64%
with sales charge (10.12)% 1.08% 2.55%
From
Inception
Class B/2/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
without sales charge (5.68)% 1.34% 2.80%
with sales charge (9.41)% 1.34% 2.80%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value (4.45)% 2.65% 4.00%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 5.5% sales charge, while the Consumer Price Index, the S&P 500 Index and the Lehman Aggregate Bond Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** An unmanaged index that encompasses five major classes of U.S. fixed-income securities: U.S. Treasury and Government Agency securities, corporate debt obligations, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities. It is not possible to invest directly in the Index.
*** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
**** An unmanaged index comprised of 500 stocks representative of the stock market as a whole. "S&P 500[Registered Trademark]" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by Thrivent Financial for Lutherans. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's make no representation regarding the advisability of investing in the product. It is not possible to invest directly in the Index.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance reflects the maximum sales charge of 5.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL High Yield Bond Fund
[PHOTO OMITTED: RAYMOND G. KENNEDY]
Raymond G. Kennedy, is the portfolio manager for The AAL High Yield Bond Fund. Mr. Kennedy is a managing director, portfolio manager and senior member of the Pacific Investment Management Company, LLC, (PIMCO) investment strategy group. He joined PIMCO in 1996 and has 15 years of investment management experience. He has earned the Chartered Financial Analyst designation.
The high yield market finished the 12-month period ended April 30, 2003, with a strong rebound, despite experiencing a high degree of volatility throughout the year. The AAL High Yield Bond Fund ended the period with a 10.59% total return while its Lipper. Inc. peer group of similar high yield bond funds posted a 6.95% total return for the period. The Fund's unmanaged benchmark, the Merrill Lynch US High Yield Cash Pay Index, registered a 7.86% total return.
Junk Bonds Return to Favor
The first half of the reporting period was marred by corporate accounting scandals, highlighted by the high profile bankruptcies of Adelphia and WorldCom, and resulted in a flight to quality during the summer of 2002 that sent high yield prices plummeting. The period of heightened uncertainty abated in the fall and the credit markets staged a strong rebound that continued into the first quarter of 2003. An improvement in corporate balance sheets, combined with strong cash flows into the asset class, drove the high yield market higher during the second half of the one-year period.
Default rates peaked in 2002 and began to fall significantly during the first quarter of 2003 as high yield issuers settled cash flow problems and corporate profitability began to improve. The Fund's exposure to BBB-rated issues added to performance as below investment-grade quality tiers underperformed, especially in the early part of the reporting period. An overweighted position in telecommunication and energy companies resulted in a positive impact to returns as their strong performance during the second half of the year outweighed their poor performance earlier in the year. Underweighting the utility sector detracted from returns, though, as this sector was one of the best performers during the latter half of the year. Avoiding consumer cyclicals and homebuilders was a slight positive for performance as these sectors did not fully participate in the strong market recovery. The Fund's modest exposure to emerging market sovereign debt added to positive results as fundamentals continued to improve for many developing countries.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Communications Services 27.7%
Utilities 14.0%
Consumer Cyclical 9.3%
Basic Materials 8.5%
Energy 8.4%
Consumer Non-Cyclical 8.2%
Capital Goods 6.9%
Non-Corporate 5.1%
Finance 4.7%
Transportation 1.5%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 4.3%
Long Term Fixed Income 95.7%
[GRAPHIC OMITTED: RATINGS DISTRIBUTIONS]
Moody's Bond Quality Ratings Distributions
Aaa 4.1%
Aa 0.0%
A 0.3%
Baa 13.0%
Ba 32.1%
B 42.2%
Caa 6.7%
Ca 0.0%
C 0.3%
D 1.3%
Not Rated 0.0%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL High Yield Bond Fund seeks high current income and secondarily capital growth by investing primarily in a diversified portfolio of high-risk, high-yield bonds commonly referred to as "junk bonds." The Fund actively seeks to achieve the secondary objective of capital growth to the extent it is consistent with the primary objective of high current income.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AAHYX Ticker BBHYX Ticker N/A
Net Assets $117,351,063 Net Assets $5,957,527 Net Assets $3,282,300
NAV $6.27 NAV $6.27 NAV $6.27
Outlook
Improving credit fundamentals, a modest supply of new issuances and surging fund flows have bolstered the high yield market, keeping our outlook positive. The Fund plans on continuing to move to a more market neutral position, reducing exposure to investment-grade issues and increasing exposure to the broader high yield market. Nonetheless, we plan to continue maintaining an above benchmark average credit quality. An increased exposure to broadcasting and publishing is expected, as we believe these sectors will benefit from strong valuations and an improving advertisement market. An overweighting to the telecom sector, with an emphasis on large-cap fixed line and wireless carriers, should be maintained, as de-leveraging continues in this sector and valuations on wireless assets have likely reached a bottom. The Fund is expected to continue to overweight the cable and satellite sector since we believe many of the stronger companies will continue to produce stable cash flows and maintain significant barriers to entry for interested competitors. We remain positive on the energy sector because we anticipate a long-term persistence in high energy prices. We are negative on the metals/mining and textile sectors as we believe U.S. firms are not competitive relative to their lower-cost global rivals. The Fund will likely continue to avoid the home builders sector, as we believe housing starts are likely to fall. Finally, we will look to retain modest exposure to emerging market sovereign debt, as this sector offers attractive value relative to high yield corporate bonds.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
Merrill Lynch
The AAL High Yield Consumer
High Yield Cash Pay Price
Date Bond Fund Index** Index***
- ------------------------------------------------------------------------
January 8, 1997 10,000 10,000 10,000
1997 9,593 10,108 10,032
1997 9,819 10,250 10,063
1997 9,553 10,136 10,088
1997 9,694 10,251 10,101
1997 10,002 10,458 10,095
1997 10,129 10,617 10,107
1997 10,396 10,872 10,120
1997 10,399 10,853 10,139
1997 10,643 11,033 10,164
1997 10,629 11,106 10,189
1997 10,722 11,211 10,183
1997 10,814 11,317 10,170
1998 10,985 11,486 10,189
1998 11,066 11,533 10,208
1998 11,142 11,633 10,227
1998 11,160 11,688 10,246
1998 11,161 11,769 10,265
1998 11,170 11,828 10,277
1998 11,187 11,895 10,290
1998 10,351 11,382 10,303
1998 10,303 11,405 10,315
1998 10,070 11,217 10,340
1998 10,602 11,728 10,340
1998 10,571 11,732 10,334
1999 10,675 11,848 10,359
1999 10,519 11,758 10,372
1999 10,558 11,859 10,404
1999 10,718 12,044 10,479
1999 10,533 11,961 10,479
1999 10,511 11,938 10,479
1999 10,500 11,956 10,511
1999 10,347 11,835 10,536
1999 10,150 11,789 10,586
1999 9,910 11,720 10,605
1999 10,037 11,854 10,612
1999 10,174 11,917 10,612
2000 10,112 11,857 10,637
2000 10,136 11,868 10,700
2000 9,963 11,702 10,788
2000 9,963 11,706 10,794
2000 9,791 11,577 10,801
2000 9,977 11,775 10,864
2000 9,895 11,860 10,883
2000 10,008 12,005 10,895
2000 9,834 11,935 10,952
2000 9,641 11,585 10,971
2000 9,362 11,222 10,977
2000 9,723 11,465 10,971
2001 10,179 12,149 11,040
2001 10,215 12,340 11,085
2001 10,012 12,177 11,110
2001 9,882 12,044 11,154
2001 9,941 12,276 11,204
2001 9,626 12,023 11,223
2001 9,786 12,210 11,192
2001 9,828 12,328 11,192
2001 9,308 11,537 11,242
2001 9,591 11,877 11,204
2001 9,799 12,263 11,185
2001 9,762 12,176 11,141
2002 9,799 12,244 11,166
2002 9,680 12,127 11,211
2002 9,772 12,415 11,274
2002 9,857 12,612 11,337
2002 9,766 12,544 11,337
2002 9,215 11,649 11,343
2002 8,720 11,189 11,356
2002 9,096 11,468 11,393
2002 8,856 11,292 11,412
2002 8,908 11,197 11,441
2002 9,526 11,867 11,441
2002 9,683 12,048 11,416
2003 9,942 12,395 11,466
2003 10,101 12,554 11,554
2003 10,327 12,880 11,624
April 30, 2003 $10,901 $13,603 $11,599
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Class A/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 10.59% (0.47)% 2.12%
with sales charge 5.64% (1.39)% 1.38%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 9.61% (1.20)% 1.54%
with sales charge 5.61% (1.20)% 1.54%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 10.88% (0.17)% 0.45%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 4.5% sales charge, while the Consumer Price Index and the Merrill Lynch High Yield Bond Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** An unmanaged index comprised of approximately 1,200 "cash-pay" high-yield bonds representative of the high-yield market as a whole. It is not possible to invest directly in the Index.
*** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance has been restated to reflect the maximum sales charge of 4.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Municipal Bond Fund
[PHOTO OMITTED: JANET I. GRANGAARD]
Janet I. Grangaard is the portfolio manager of The AAL Municipal Bond Fund. She joined Thrivent Investment Management Inc., in 1984 as an internal auditor and subsequently served as a securities analyst and senior securities analyst. She holds a bachelor's degree in economics from Stanford University and a master's degree in management from the J.L. Kellogg Graduate School of Management at Northwestern University.
The municipal bond market experienced strong gains in the 12-month period ended April 30, 2003. Against a backdrop of record supply highs in 2002 and the first quarter of 2003, The AAL Municipal Bond Fund performed largely in line with its peers, returning 7.38%. Its Lipper, Inc., peer group of funds returned 7.62% during the same period, while the Fund's unmanaged benchmark, the Lehman Brother's Municipal Bond Index, returned 8.50%.
Municipal Bond Values Reaffirmed
It's difficult to discern how dramatically the buildup to the war in Iraq slowed an economy that was already mired in weak growth. Its effect on the markets, however, was obvious: Paralyzed by uncertainty, consumers and businesses postponed much spending. During this period, President Bush also introduced an initial tax policy proposal with potentially far-reaching ramifications for bonds. The proposal's call for dividend tax exemptions left many to speculate that demand for municipal bonds would wane in favor of more attractive tax-exempt equities. As a result, municipal bonds were attractive in relation to Treasury securities for much of the six-month period.
The Fund's performance, consistent with that of its peer groups, can be attributed to its neutral duration and the performance of key sectors, most notably the hospital sector which drew a strong return. At the same time, the Fund was underweighted in housing bonds making it nearly immune from the adverse affects of mortgage prepayments brought on by the country's refinancing craze. Being a high-quality fund, with only a modest level of credit risk, the fact that interest rates have remained within a relatively stable range has had a somewhat negative effect on performance.
[GRAPHIC OMITTED: RATINGS DISTRIBUTIONS]
Moody's Bond Quality Ratings Distributions
Aaa 52.4%
Aa 15.7%
A 16.1%
Baa 15.8%
Ba 0.0%
B 0.0%
Caa 0.0%
Ca 0.0%
C 0.0%
D 0.0%
Not Rated 0.0%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 5.0%
Long Term Fixed Income 95.0%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Municipal Bond Fund seeks a high level of current income exempt from federal income taxes consistent with capital preservation by investing primarily in a diversified portfolio of municipal bonds.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AAMBX Ticker N/A Ticker N/A
Net Assets $671,624,636 Net Assets $12,346,247 Net Assets $3,416,888
NAV $11.52 NAV $11.52 NAV $11.52
Outlook
The tax plan that eventually emerged from Congress lowered the tax rates on dividends but did not exempt them completely. Demand for municipal bonds, therefore, should remain strong. Supply should also keep pace as rates remain low and municipalities are faced with widespread budget deficits. The record-breaking supply of municipal bonds which began in 2002 also carried over into the first quarter of 2003.
The Fund will continue to look for opportunities within a relative value framework and to be tax conscious with regard to capital gains. It will also not waiver from its insistence on high portfolio liquidity. While we do not know the day they will arrive, we are preparing for higher interest rates. There appear to be enough stimuli in the economy to initiate a recovery. How fast and how soon that recovery happens is clearly the question.
Nonetheless, investors' confidence should be buoyed by the fact that the Fund has maintained pace with the market during this period of remarkably low interest rates. Outperforming when interest rates are low can be an indicator that the Fund has taken on too much risk -- trying to flip the switch at the precise moment necessary to avoid a significant decline. As a high-quality investment, The AAL Municipal Bond Fund takes on only modest risk, yet is structured -- and poised -- to remain quite competitive as interest rates rise.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
Lehman
The AAL Municipal Consumer
Municipal Bond Price
Date Bond Fund Index** Index***
- ------------------------------------------------------------------------
April 30, 1993 10,000 10,000 10,000
1993 9,550 10,056 10,014
1993 9,775 10,224 10,028
1993 9,749 10,237 10,028
1993 9,889 10,451 10,056
1993 10,097 10,570 10,076
1993 10,106 10,590 10,118
1993 9,955 10,497 10,125
1993 10,235 10,718 10,125
1994 10,307 10,841 10,153
1994 10,018 10,560 10,188
1994 9,696 10,130 10,222
1994 9,650 10,216 10,236
1994 9,668 10,304 10,243
1994 9,716 10,241 10,278
1994 9,845 10,429 10,306
1994 9,836 10,465 10,347
1994 9,753 10,312 10,375
1994 9,556 10,128 10,382
1994 9,331 9,945 10,396
1994 9,653 10,164 10,396
1995 9,844 10,455 10,438
1995 10,130 10,759 10,479
1995 10,305 10,882 10,514
1995 10,324 10,895 10,549
1995 10,575 11,243 10,569
1995 10,577 11,145 10,590
1995 10,638 11,250 10,590
1995 10,738 11,393 10,618
1995 10,798 11,465 10,639
1995 11,001 11,632 10,674
1995 11,252 11,825 10,667
1995 11,414 11,938 10,660
1996 11,461 12,028 10,722
1996 11,404 11,947 10,757
1996 11,232 11,795 10,813
1996 11,166 11,761 10,854
1996 11,180 11,757 10,875
1996 11,292 11,885 10,882
1996 11,401 11,992 10,903
1996 11,372 11,990 10,924
1996 11,595 12,157 10,958
1996 11,734 12,295 10,993
1996 12,010 12,520 11,014
1996 11,914 12,467 11,014
1997 11,897 12,491 11,049
1997 12,019 12,605 11,083
1997 11,807 12,437 11,111
1997 11,908 12,541 11,125
1997 12,106 12,730 11,118
1997 12,254 12,866 11,132
1997 12,708 13,222 11,146
1997 12,499 13,098 11,167
1997 12,706 13,254 11,194
1997 12,787 13,339 11,222
1997 12,876 13,417 11,215
1997 13,146 13,613 11,201
1998 13,295 13,753 11,222
1998 13,265 13,758 11,243
1998 13,247 13,770 11,264
1998 13,158 13,708 11,285
1998 13,425 13,925 11,306
1998 13,478 13,980 11,319
1998 13,482 14,015 11,333
1998 13,732 14,231 11,347
1998 13,947 14,408 11,361
1998 13,855 14,408 11,389
1998 13,908 14,459 11,389
1998 13,932 14,495 11,382
1999 14,113 14,667 11,410
1999 13,994 14,603 11,424
1999 14,025 14,624 11,458
1999 14,053 14,660 11,542
1999 13,929 14,575 11,542
1999 13,680 14,365 11,542
1999 13,681 14,418 11,576
1999 13,439 14,302 11,604
1999 13,406 14,308 11,660
1999 13,146 14,153 11,681
1999 13,321 14,304 11,688
1999 13,147 14,197 11,688
2000 13,038 14,135 11,715
2000 13,233 14,299 11,785
2000 13,598 14,612 11,882
2000 13,474 14,526 11,889
2000 13,357 14,450 11,896
2000 13,751 14,833 11,965
2000 13,940 15,039 11,986
2000 14,169 15,271 12,000
2000 14,096 15,192 12,063
2000 14,263 15,357 12,083
2000 14,390 15,474 12,090
2000 14,726 15,856 12,083
2001 14,843 16,013 12,160
2001 14,892 16,064 12,208
2001 15,032 16,208 12,236
2001 14,867 16,032 12,285
2001 15,037 16,205 12,340
2001 15,166 16,313 12,361
2001 15,422 16,555 12,326
2001 15,746 16,828 12,326
2001 15,680 16,771 12,382
2001 15,886 16,971 12,340
2001 15,739 16,828 12,319
2001 15,551 16,669 12,271
2002 15,809 16,958 12,299
2002 16,010 17,162 12,347
2002 15,684 16,826 12,417
2002 15,948 17,155 12,486
2002 16,035 17,259 12,486
2002 16,204 17,441 12,493
2002 16,411 17,666 12,507
2002 16,584 17,878 12,549
2002 16,935 18,270 12,569
2002 16,577 17,967 12,601
2002 16,520 17,892 12,601
2002 16,863 18,270 12,573
2003 16,793 18,224 12,629
2003 17,061 18,479 12,726
2003 17,033 18,490 12,802
April 30, 2003 $17,051 $18,612 $12,775
Average Annual Total Returns/1/
April 30, 2003
Class A/2/ 1-Year 5-Year 10-Year
- ----------------------------------------------------------------
without sales charge 7.38% 5.41% 5.97%
with sales charge 2.53% 4.44% 5.48%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 6.65% 4.56% 5.31%
with sales charge 2.65% 4.56% 5.31%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 7.81% 5.73% 5.39%
* As you compare performance, please note that the Fund's performance reflects the maximum 4.5% sales charge, while the Consumer Price Index and the Lehman Municipal Bond Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** An unmanaged broad-based index that provides a performance indicator of the overall municipal bond market. It is not possible to invest directly in the Index.
*** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance has been restated to reflect the maximum sales charge of 4.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Bond Fund
[PHOTO OMITTED: ALAN D. ONSTAD]
Alan D. Onstad is porfolio co-manager of The AAL Bond Fund. He also co-manages The AAL Balanced Fund. He possesses a bachelor's degree in economics from Concordia College in Moorhead, Minnesota. He has earned the Chartered Financial Analyst designation.
[PHOTO OMITTED: MICHAEL G. LANDREVILLE]
Michael G. Landreville is the porfolio co-manager of The AAL Bond Fund. He began his employment with Thrivent Investment Management Inc., in 1983 as a securities analyst, before becoming an associate portfolio manager. He earned both his B.S. degree in business administration, as well as his M.B.A. degree, from the University of Minnesota. He is a Chartered Financial Analyst and a Certified Public Accountant.
Investment-grade bond investors reaped healthy gains during the 12-month period ended April 30, 2003, aided by low interest rates and continued stock market volatility. For the reporting period, The AAL Bond Fund generated a 9.79% total return, outpacing its Lipper, Inc., peer group of intermediate investment-grade debt funds, which gained a median of 9.53%. The Fund's market benchmark, the Lehman Brothers Aggregate Bond Index, returned 10.46% over this time.
Increased Demand for Yield
Investment-grade bond returns were mixed through much of the second quarter of 2002, with corporate issues and U.S. Treasury bonds both vying for market leadership. Over the ensuing months, corporate bonds underperformed as investors fled equities and higher-risk debt instruments for the safety of Treasuries, mortgage-backed bonds and government agency credits.
Our strategy of overweighting corporates contributed positively to relative performance early in the period, but worked to our disadvantage in June and July, when investors showed an increasing aversion to risk. Gradually we trimmed the Fund's risk profile, which helped it outperform its peer group by a wide margin in August and September. As interest rates fell, we also took profits in mortgage- and asset-backed bonds by investing the proceeds in government-chartered agencies like Fannie Mae and Freddie Mac.
The first quarter of 2003 saw a sharp increase in equity volatility, which generally benefited bond holders. With interest rates low, demand for higher-yielding instruments picked up significantly, resulting in rising corporate bond prices and narrowing yield spreads. During this time, we were able to minimize risk by maintaining the Fund's relatively short duration, while simultaneously extracting yield from off-maturity corporate issues.
[GRAPHIC OMITTED: RATINGS DISTRIBUTIONS]
Moody's Bond Quality Ratings Distributions
Aaa 49.0%
Aa 4.0%
A 12.9%
Baa 31.3%
Ba 0.4%
B 0.0%
Caa 0.0%
Ca 0.0%
C 0.0%
D 0.0%
Not Rated 2.4%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 19.2%
Long Term Fixed Income 80.8%
Footnotes read:
Quoted Fund performance is for Class A shares and does not reflect a sales charge.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Bond Fund seeks a high level of current income consistent with capital preservation by investing primarily in a diversified portfolio of investment-grade bonds.
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AAINX Ticker BBFBX Ticker IIINX
Net Assets $526,474,367 Net Assets $13,205,712 Net Assets $29,234,186
NAV $10.31 NAV $10.32 NAV $10.31
Outlook
Over the coming year, we anticipate slow but steady economic growth, with a gradual return to corporate profitability. Nonetheless, areas of economic weakness still remain. Until employers see sustained increases in earnings, unemployment claims will likely remain high and capital spending levels weak. Fortunately, interest rates remain at historic lows and the Federal Reserve is not likely to take an aggressive approach to monetary policy over the near-term.
We do not anticipate making major structural modifications to the Fund, but may take profits in mortgage-backed bonds if interest rates begin to rise. Given positive technical factors, we expect to continue emphasizing high-quality corporate bonds, while retaining a healthy allocation of Treasuries and agency credits for added diversification. Additionally, by maintaining the Fund's shorter-than-average duration, we believe we can mitigate interest rate risk without sacrificing undue levels of yield.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*
Lehman
The AAL Aggregate Consumer
Bond Bond Price
Date Fund Index** Index***
- ------------------------------------------------------------------------
April 30, 1993 10,000 10,000 10,000
1993 9,530 10,013 10,014
1993 9,708 10,194 10,028
1993 9,737 10,252 10,028
1993 9,923 10,432 10,056
1993 9,950 10,460 10,076
1993 9,982 10,499 10,118
1993 9,844 10,410 10,125
1993 9,895 10,466 10,125
1994 10,026 10,608 10,153
1994 9,802 10,423 10,188
1994 9,557 10,166 10,222
1994 9,455 10,085 10,236
1994 9,442 10,084 10,243
1994 9,427 10,062 10,278
1994 9,569 10,261 10,306
1994 9,590 10,274 10,347
1994 9,458 10,123 10,375
1994 9,435 10,114 10,382
1994 9,384 10,091 10,396
1994 9,426 10,161 10,396
1995 9,580 10,362 10,438
1995 9,774 10,609 10,479
1995 9,847 10,674 10,514
1995 9,968 10,823 10,549
1995 10,284 11,242 10,569
1995 10,346 11,324 10,590
1995 10,303 11,299 10,590
1995 10,415 11,435 10,618
1995 10,508 11,546 10,639
1995 10,636 11,697 10,674
1995 10,795 11,872 10,667
1995 10,940 12,038 10,660
1996 10,995 12,118 10,722
1996 10,753 11,908 10,757
1996 10,660 11,825 10,813
1996 10,584 11,758 10,854
1996 10,549 11,735 10,875
1996 10,666 11,892 10,882
1996 10,703 11,925 10,903
1996 10,691 11,905 10,924
1996 10,861 12,112 10,958
1996 11,097 12,380 10,993
1996 11,288 12,593 11,014
1996 11,187 12,475 11,014
1997 11,232 12,514 11,049
1997 11,253 12,545 11,083
1997 11,149 12,406 11,111
1997 11,265 12,591 11,125
1997 11,356 12,710 11,118
1997 11,498 12,861 11,132
1997 11,793 13,208 11,146
1997 11,705 13,095 11,167
1997 11,873 13,289 11,194
1997 12,040 13,481 11,222
1997 12,069 13,543 11,215
1997 12,191 13,680 11,201
1998 12,332 13,855 11,222
1998 12,289 13,845 11,243
1998 12,333 13,893 11,264
1998 12,376 13,965 11,285
1998 12,489 14,097 11,306
1998 12,586 14,217 11,319
1998 12,592 14,247 11,333
1998 12,810 14,479 11,347
1998 13,092 14,818 11,361
1998 12,982 14,740 11,389
1998 12,923 14,823 11,389
1998 12,999 14,868 11,382
1999 13,064 14,974 11,410
1999 12,823 14,713 11,424
1999 12,911 14,794 11,458
1999 12,946 14,841 11,542
1999 12,806 14,711 11,542
1999 12,755 14,664 11,542
1999 12,681 14,602 11,576
1999 12,667 14,594 11,604
1999 12,795 14,764 11,660
1999 12,815 14,818 11,681
1999 12,836 14,817 11,688
1999 12,785 14,746 11,688
2000 12,742 14,697 11,715
2000 12,864 14,875 11,785
2000 13,002 15,071 11,882
2000 12,928 15,028 11,889
2000 12,904 15,021 11,896
2000 13,169 15,334 11,965
2000 13,269 15,473 11,986
2000 13,468 15,697 12,000
2000 13,552 15,796 12,063
2000 13,585 15,900 12,083
2000 13,860 16,161 12,090
2000 14,160 16,460 12,083
2001 14,340 16,729 12,160
2001 14,473 16,875 12,208
2001 14,559 16,960 12,236
2001 14,489 16,889 12,285
2001 14,562 16,991 12,340
2001 14,587 17,056 12,361
2001 14,945 17,437 12,326
2001 15,123 17,637 12,326
2001 15,310 17,842 12,382
2001 15,582 18,216 12,340
2001 15,395 17,964 12,319
2001 15,314 17,850 12,271
2002 15,383 17,995 12,299
2002 15,453 18,169 12,347
2002 15,175 17,867 12,417
2002 15,359 18,213 12,486
2002 15,471 18,368 12,486
2002 15,532 18,527 12,493
2002 15,618 18,751 12,507
2002 15,902 19,067 12,549
2002 16,185 19,376 12,569
2002 16,063 19,287 12,601
2002 16,016 19,282 12,601
2002 16,357 19,680 12,573
2003 16,383 19,698 12,629
2003 16,655 19,970 12,726
2003 16,670 19,954 12,802
April 30, 2003 $16,862 $20,119 $12,775
Average Annual Total Returns/1/
April 30, 2003
Class A/2/ 1-Year 5-Year 10-Year
- ----------------------------------------------------------------
without sales charge 9.79% 6.38% 5.85%
with sales charge 4.87% 5.41% 5.36%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 8.91% 5.40% 5.99%
with sales charge 4.91% 5.40% 5.99%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 10.20% 6.80% 6.69%
Footnotes read:
* As you compare performance, please note that the Fund's performance reflects the maximum 4.5% sales charge, while the Consumer Price Index and the Lehman Aggregate Bond Index do not reflect any such charges. If you were to purchase any of the above individual stocks or funds represented in these Indexes, any charges you would pay would reduce your total return as well.
** An unmanaged index that encompasses five major classes of U.S. fixed-income securities: U.S. Treasury and Government Agency securities, corporate debt obligations, mortgage-backed securities, asset-backed securities and commercial mortgage backed securities. It is not possible to invest directly in the Index.
*** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class A performance has been restated to reflect the maximum sales charge of 4.5%. Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Bond Index Fund
[PHOTO OMITTED: STEVEN H. C. LEE]
Steven H. C. Lee is portfolio manager of The AAL Bond Index Fund. Steve joined the company in September 1985 as an actuarial assistant and moved to the investment division in September 1990 as a quantitative analyst. In January 1997, he was named senior securities analyst in the fixed income area and in March 1999, he was named portfolio manager of the asset-backed securities portfolio of Thrivent Financial for Lutherans general account. In September 1999, he was named portfolio manager of two of the investment grade corporate bond portfolios of the general account. He continued in these responsibilities through April 2002. He graduated from Augsburg College in Minneapolis, Minnesota in May 1985 with a B.A. in mathematics. He is a Fellow of the Society of Actuaries (FSA) and a member of the American Academy of Actuaries (MAAA).
Bolstered by a weak economic recovery and investor distaste for risk, high-quality bonds flourished over the 12-month period ended April 30, 2003. In this favorable fixed-income environment, The AAL Bond Index Fund registered a 10.35% total return while the Fund's unmanaged index benchmark, the Lehman Brothers Aggregate Bond Index, finished the reporting period with a 10.46% total return.
Treasuries Rally Sharply
The reporting period was marked by a sharp dichotomy in bond returns. The first half of the period highlighted the higher-quality instruments as mortgage-backed securities benefited from wave after wave of mortgage refinancings and top-quality asset-backed securities, while Treasuries greatly benefited from fleeing equity investors and general geopolitical turbulence. Starting in October, corporate bonds began a price ascent that grew even more robust in the last month or two of the period. Credit risk grew more appealing in the face of washed-out prices, better corporate earnings and a sense of resolution to the Iraq conflict. Fund performance was helped by strong performance from specific U.S. Treasury and corporate securities held by the Fund versus those held by the Index. Fund performance was limited by our underweighting in these well-performing corporate securities, as well as by the Fund's cash position.
The objective of the AAL Bond Index Fund is to achieve investment results that approximate the total return of the Lehman Brothers Aggregate Bond Index by investing primarily in investment grade bonds and other debt securities included in the index. The index covers the U.S. investment grade fixed rate bond market, with Index components for U.S. Treasury and government agency securities, corporate bonds, mortgage-backed securities, asset-backed securities, and commercial mortgage-backed securities. The Fund invests in a well-diversified portfolio of securities that replicate the key characteristics of the Index. These key characteristics include sector weightings, maturity, credit quality, yield curve exposure, and current yield. To minimize performance-tracking errors in the investment grade corporate bond sector, the Fund maintains exposure to a wide variety of industries and individual issuers.
[GRAPHIC OMITTED: RATINGS DISTRIBUTIONS]
Moody's Bond Quality Ratings Distributions
Aaa 75.4%
Aa 4.4%
A 10.5%
Baa 9.6%
Ba 0.0%
B 0.1%
Caa 0.0%
Ca 0.0%
C 0.0%
D 0.0%
Not Rated 0.0%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 10.4%
Long Term Fixed Income 89.6%
Footnote reads:
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Bond Index Fund strives for investment results similar to the total return of the Lehman Aggregate Bond Index by investing primarily in bonds and other debt securities included in the Index.
Institutional Share
- ------------------------
Ticker AABIX
Net Assets $81,018,398
NAV $10.96
Outlook
The economy grew modestly during late 2002 and early 2003. The market currently expects the economic recovery to continue at a moderate pace, perhaps in the area of 3%, during 2003. The Federal Open Market Committee (FOMC) has held short-term interest rates at a low 1.25% most of the period. The market anticipates that the FOMC will begin to move rates higher in 2004, with little chance of a further reduction beforehand. The FOMC will likely wait until the economy is on a sustainable growth trend before beginning to tighten monetary policy. Inflation has been well behaved and should not become a problem with an alert FOMC. While the dichotomy between lower-quality and higher-quality corporate bonds has reversed, we continue to expect good performance from corporate securities as corporations reduce capital spending, repair their balance sheets and become more conservative in their accounting practices.
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Institutional Class Shares
The AAL Lehman Consumer
Bond Aggregate Price
Date Index Fund Bond Index* Index**
- ------------------------------------------------------------------------
December 31, 1999 10,000 10,000 10,000
2000 9,941 9,967 10,024
2000 10,057 10,088 10,083
2000 10,196 10,221 10,166
2000 10,168 10,192 10,172
2000 10,169 10,187 10,178
2000 10,381 10,399 10,238
2000 10,472 10,493 10,255
2000 10,625 10,645 10,267
2000 10,704 10,712 10,321
2000 10,777 10,783 10,339
2000 10,965 10,959 10,345
2000 11,171 11,163 10,339
2001 11,331 11,345 10,404
2001 11,436 11,444 10,446
2001 11,495 11,502 10,469
2001 11,439 11,454 10,511
2001 11,501 11,523 10,559
2001 11,532 11,566 10,576
2001 11,795 11,825 10,547
2001 11,925 11,961 10,547
2001 12,106 12,100 10,594
2001 12,322 12,353 10,559
2001 12,168 12,183 10,541
2001 12,083 12,105 10,499
2002 12,167 12,203 10,523
2002 12,296 12,322 10,564
2002 12,061 12,117 10,624
2002 12,280 12,352 10,683
2002 12,400 12,457 10,683
2002 12,504 12,564 10,689
2002 12,652 12,716 10,701
2002 12,877 12,931 10,737
2002 13,080 13,140 10,755
2002 13,031 13,080 10,781
2002 13,000 13,076 10,781
2002 13,266 13,346 10,758
2003 13,274 13,358 10,805
2003 13,465 13,543 10,888
2003 13,445 13,532 10,954
April 30, 2003 $13,552 $13,644 $10,930
Average Annual Total Returns/1/
April 30, 2003
From
Inception
Institutional Class/2/ 1-Year 12/31/1999
- ----------------------------------------------------------------
Net Asset Value 10.35% 9.55%
* An unmanaged index that encompasses five major classes of U.S. fixed-income securities: U.S. Treasury and Government Agency securities, corporate debt obligations, mortgage-backed securities, asset-backed securities and commercial mortgage backed securities. It is not possible to invest directly in the Index.
** The Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services, including housing, electricity, food and transportation.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Institutional Class shares have no sales load and are for institutional shareholders only.
The AAL Money Market Fund
[PHOTO OMITTED: GAIL R. ONAN]
Gail R. Onan is the portfolio manager of The AAL Money Market Fund. She began her career with Thrivent Investment Management Inc., in 1969 as a trader and securities analyst. In 1986, Gail became a mutual funds trader and later an equity trader. In 1988, she began working with money market funds. She started managing The AAL Money Market Fund in May, 2002. She received her undergraduate education at the University of Minnesota.
Money market yields marched lower along with overall short-term market interest rates for the 12-month period ending April 30, 2003. The AAL Money Market Fund provided investors with a total return of 0.88%, while the Fund's Lipper, Inc., peer group earned a median total return of 0.90%.
Federal Reserve Policy
Economic data over the period indicated soft economic performance in addition to heightened geopolitical risks that concluded in a war with Iraq, corporate accounting scandals, and executive suite malfeasance. This uncertainty inhibited spending, production, and employment over the period. In response to these lackluster economic reports, the Federal Open Market Committee (FOMC), the monetary policy setting arm of the U.S. Federal Reserve, continued to try to stimulate the economy by cutting its target for the federal funds rate significantly in November. The federal funds rate is the overnight interest rate at which depository institutions can borrow from the Federal Reserve. Changes in the federal funds rate affect interest rates, and ultimately, the economy, including employment, production, and prices of goods and services. With investors anticipating an end to lower interest rates in October, we saw an opportunity to lock in higher yields by extending the Fund's duration. By investing in longer-dated securities during this period, we were able to keep the Fund's overall yield levels constant for future months.
Supply of Commercial Paper Limited
Beginning in the fourth quarter of 2001, the operating environment for money market participants changed significantly. Investors shunned issuers burdened with high levels of short-term debt following the bankruptcy of Enron Corp. and WorldCom. In response, many companies cut back on short-term financing which significantly decreased the supply of commercial paper. While the supply of commercial paper is less than desirable, we were pleased to be able to keep the Fund fully invested in only the highest-quality money market instruments.
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 100.0%
Footnotes read:
Quoted Fund performance is for Class A shares.
The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
The AAL Money Market Fund seeks a high level of current income while maintaining liquidity and a constant net asset value of $1.00 per share, by investing in a diversified portfolio of high-quality, short-term money market instruments.*
A Share B Share Institutional Share
- ------------------------ ------------------------ ------------------------
Ticker AMMXX Ticker N/A Ticker AALXX
Net Assets $349,643,140 Net Assets $2,833,759 Net Assets $91,386,244
NAV $1.00 NAV $1.00 NAV $1.00
Outlook
Currently, money market funds are reinvesting maturing securities at very low yield levels, and we expect this to continue until the domestic economy shows sign of strength, which is beginning to happen already this year. It is likely that the FOMC will not lower rates any further and may begin to raise rates as the economy picks up steam. Once the economy improves, interest rates will edge up and money market yields will rise. We have already seen some investors shifting from the safety of money market funds back into the equities and corporate bond markets. We are maximizing liquidity this year to prepare for this eventual shift out of money market funds.
The AAL Money Market Fund
April 30, 2003**
Class A Class B Institutional
- ----------------------------------------------------------------
7-Day Yield 0.63% 0.67% 0.83%
7-Day Effective Yield 0.63% 0.67% 0.83%
Average Annual Total Returns/1/
April 30, 2003
Class A/2/ 1-Year 5-Year 10-Year
- ----------------------------------------------------------------
Net Asset Value 0.88% 3.69% 3.95%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 0.42% 2.79% 3.21%
with sales charge (3.58)% 2.79% 3.21%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 1.17% 4.00% 4.07%
Footnotes read:
* To the extent practicable, the underlying Fund intends to maintain a stable net asset value of $1.00 per share. Although the fund seeks to preserve the value of you investment at $1.00 per share, it is possible to lose money by investing in the fund. Investments in the underlying fund are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
** Seven-day yields of The AAL Money Market Fund refer to the income generated by an investment in the Fund over a specified seven-day period. Effective yields reflect the reinvestment of income. Yields are subject to daily fluctuation and should not be considered an indication of future results.
/1/ Past performance is not an indication of future results. Annualized total returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, and the effects of compounding. At various times, the Fund's adviser waived its management fee and/or reimbursed Fund expenses. Had the adviser not done so, the Fund's total returns and yields would have been lower. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions.
/2/ Class B performance reflects the maximum contingent deferred sales charge (CDSC) of 5%, declining 1% each year during the first five years and then converting to Class A shares after the fifth year.
/3/ Institutional Class shares have no sales load and are for institutional shareholders only.
[LOGO OMITTED]
PricewaterhouseCoopers LLP
Suite 1500
100 E. Wisconsin Ave.
Milwaukee WI 53202
Telephone (414) 212 1600
Report of Independent Accountants
To the Shareholders and Trustees of The AAL Mutual Funds
In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The AAL Technology Stock Fund, The AAL Aggressive Growth Fund, The AAL Small Cap Stock Fund, The AAL Small Cap Index Fund II, The AAL Small Cap Value Fund, The AAL Mid Cap Stock Fund, The AAL Mid Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL International Fund, The AAL Capital Growth Fund, The AAL Large Company Index Fund, The AAL Large Company Index Fund II, The AAL Equity Income Fund, The AAL Balanced Fund, The AAL High Yield Bond Fund, The AAL Municipal Bond Fund, The AAL Bond Fund, The AAL Bond Index Fund and The AAL Money Market Fund (nineteen of the portfolios constituting The AAL Mutual Funds, hereafter referred to as the "Funds") at April 30, 2003, the results of each of their operations for the year then ended and the changes in each of their net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at April 30, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/S/ PricewaterhouseCoopers LLP
June 6, 2003
The AAL Technology Stock Fund
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (94.5%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (9.5%)
- -------------------------------------------------------------------------------------------------------------------------
8,600 Amazon.com, Inc.* $246,562
95,200 AOL Time Warner, Inc.* 1,302,336
3,600 CDW Computer Centers, Inc.* 153,504
3,200 Clear Channel Communications, Inc.* 125,152
6,900 eBay, Inc.* 640,113
6,100 Macrovision Corporation* 107,787
6,700 Pixar, Inc.* 391,213
10,300 USA Interactive, Inc.* 308,485
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 3,275,152
=========================================================================================================================
Health Care (1.5%)
- -------------------------------------------------------------------------------------------------------------------------
2,900 Amgen, Inc.* 177,799
3,600 Gen-Probe, Inc.* 111,780
2,300 Gilead Sciences, Inc.* 106,122
2,800 Medtronic, Inc. 133,672
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 529,373
=========================================================================================================================
Industrials (4.3%)
- -------------------------------------------------------------------------------------------------------------------------
11,500 CheckFree Corporation* 317,055
6,100 Concord EFS, Inc.* 84,363
16,000 First Data Corporation 627,680
3,000 L-3 Communications Holdings, Inc. 133,200
3,100 Lockheed Martin Corporation 155,155
1,800 Northrop Grumman Corporation 158,310
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 1,475,763
=========================================================================================================================
Information Technology (77.9%)
- -------------------------------------------------------------------------------------------------------------------------
9,800 Accenture, Ltd.* 156,996
4,700 Acxiom Corporation* 65,612
76,800 ADC Telecommunications, Inc.* 183,398
7,800 Adobe Systems, Inc. 269,568
59,991 Agere Systems, Inc.* 107,384
11,500 Agilent Technologies, Inc.* 184,230
10,400 Altera Corporation* 164,424
7,800 Amdocs, Ltd.* 137,748
11,300 Analog Devices, Inc.* 374,256
22,000 Apple Computer, Inc.* 312,400
30,400 Applied Materials, Inc.* 443,840
29,600 Applied Micro Circuits Corporation* 132,608
21,400 ATI Technologies, Inc.* 134,820
10,200 Autodesk, Inc. 158,712
28,300 BEA Systems, Inc.* 303,093
7,700 Borland Software Corporation* 69,839
162,900 Cisco Systems, Inc.* 2,450,016
3,400 Cognos, Inc.* 92,276
19,900 Computer Associates International, Inc. 323,176
4,400 Computer Sciences Corporation* 144,980
40,700 Corning, Inc.* 220,594
53,000 Dell Computer Corporation* 1,532,230
4,500 Documentum, Inc.* 82,755
3,100 Electronic Arts, Inc.* 183,737
51,400 EMC Corporation* 467,226
4,700 Fair Isaac Corporation 244,776
78,100 Hewlett-Packard Company 1,273,030
8,200 Integrated Device Technology, Inc.* 84,706
148,600 Intel Corporation 2,734,240
18,900 International Business Machines Corporation 1,604,610
39,900 JDS Uniphase Corporation* 128,877
10,000 KLA-Tencor Corporation* 410,000
37,200 Legato Systems, Inc.* 220,224
2,800 Lexmark International, Inc.* 208,628
7,700 Linear Technology Corporation 265,419
169,600 Lucent Technologies, Inc.* 305,280
17,500 MatrixOne, Inc.* 61,250
7,900 Maxim Integrated Products, Inc. 310,391
9,300 Mercury Interactive Corporation* 315,642
4,900 Microchip Technology, Inc. 101,871
11,400 Micromuse, Inc.* 74,567
15,200 Micron Technology, Inc.* 129,200
107,000 Microsoft Corporation 2,735,991
51,400 Motorola, Inc. 406,574
9,000 MSC.Software Corporation* 55,620
9,100 Network Appliance, Inc.* 120,848
9,800 Nokia Corporation ADR 162,386
59,200 Nortel Networks Corporation* 152,736
3,100 Novellus Systems, Inc.* 86,924
121,400 Oracle Corporation* 1,442,232
35,800 Parametric Technology Corporation* 118,140
20,900 PMC-Sierra, Inc.* 172,425
4,300 QLogic Corporation* 189,157
18,000 QUALCOMM, Inc. 574,020
3,700 SAP AG 94,387
24,600 STMicroelectronics NV 506,514
3,300 Storage Technology Corporation* 81,576
33,400 Sun Microsystems, Inc.* 110,220
6,400 SunGard Data Systems, Inc.* 137,600
1,900 Symantec Corporation* 83,505
36,700 Symbol Technologies, Inc. 401,131
9,600 Tellabs, Inc.* 59,328
4,300 Teradyne, Inc.* 49,880
40,300 Texas Instruments, Inc. 745,147
9,200 Unisys Corporation* 95,680
20,800 VeriSign, Inc.* 258,336
9,200 VERITAS Software Corporation* 202,492
40,200 Vitesse Semiconductor Corporation* 125,062
7,400 Xilinx, Inc.* 200,318
10,800 Yahoo!, Inc.* 267,624
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 26,804,482
=========================================================================================================================
Telecommunication Services (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
23,200 American Tower Corporation* 154,048
22,900 Crown Castle International Corporation* 145,873
42,400 Sprint PCS Group* 148,400
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 448,321
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $48,818,374) 32,533,091
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (5.5%) Interest Rate (b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$330,000 Federal National Mortgage Association 1.250% 5/1/2003 $330,000
1,556,789 The AAL Money Market Fund 0.840 N/A 1,556,789
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 1,886,789
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $50,705,163) $34,419,880
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield or, for securities purchased at a discount, the discount at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Aggressive Growth Fund
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (96.9%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (17.7%)
- -------------------------------------------------------------------------------------------------------------------------
3,600 Abercrombie & Fitch Company* $118,368
1,600 Amazon.com, Inc.* 45,872
20,445 AOL Time Warner, Inc.* 279,688
1,350 AutoZone, Inc.* 109,094
5,350 Bed Bath & Beyond, Inc.* 211,379
3,000 Best Buy Company, Inc. 103,740
1,100 Brinker International, Inc.* 34,925
1,050 Centex Corporation 69,321
9,200 Clear Channel Communications, Inc.* 359,812
11,385 Comcast Corporation* 342,233
2,500 Costco Wholesale Corporation* 86,575
5,045 Cox Communications, Inc.* 166,990
1,250 Dollar Tree Stores, Inc.* 31,813
3,500 eBay, Inc.* 324,695
1,200 Gannett Company, Inc. 90,864
2,550 Gap, Inc. 42,407
4,900 Harley-Davidson, Inc. 217,756
14,420 Home Depot, Inc. 405,635
650 Knight Ridder, Inc. 41,958
5,600 Kohl's Corporation* 318,080
13,636 Liberty Media Corporation* 149,996
6,800 Lowe's Companies, Inc. 298,452
2,350 Marriott International, Inc. 84,389
1,900 Michaels Stores, Inc.* 59,356
1,150 NIKE, Inc. 61,560
1,250 Reebok International, Ltd.* 38,825
5,500 Staples, Inc.* 104,720
5,950 Target Corporation 198,968
4,070 TJX Companies, Inc. 78,348
4,350 Univision Communications, Inc.* 131,718
4,100 USA Interactive, Inc.* 122,795
13,090 Viacom, Inc.* 568,237
17,750 Wal-Mart Stores, Inc. 999,680
4,150 Walt Disney Company 77,439
3,000 Yum! Brands, Inc. 74,100
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 6,449,788
=========================================================================================================================
Consumer Staples (5.6%)
- -------------------------------------------------------------------------------------------------------------------------
1,550 Avon Products, Inc. 90,164
6,350 Coca-Cola Company 256,540
3,050 Coca-Cola Enterprises, Inc. 59,445
4,050 Colgate-Palmolive Company 231,539
1,800 General Mills, Inc. 81,198
4,200 Gillette Company 127,890
1,900 Pepsi Bottling Group, Inc. 39,026
7,450 PepsiCo, Inc. 322,436
5,900 Procter & Gamble Company 530,115
2,950 SYSCO Corporation 84,754
6,850 Walgreen Company 211,391
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 2,034,498
=========================================================================================================================
Energy (3.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,102 Apache Corporation 120,340
1,500 Baker Hughes, Inc. 42,000
3,650 BJ Services Company* 133,262
1,450 BP plc 55,883
8,250 Chesapeake Energy Corporation 66,495
1,200 ChevronTexaco Corporation 75,372
1,600 ConocoPhillips Corporation 80,480
3,150 ENSCO International, Inc. 80,010
3,500 EOG Resources, Inc. 130,830
3,200 Exxon Mobil Corporation 112,640
2,750 Key Energy Services, Inc.* 27,693
1,850 Nabors Industries, Ltd.* 72,520
1,800 Noble Corporation* 55,710
1,800 Patterson-UTI Energy, Inc.* 59,562
1,600 Precision Drilling Corporation* 55,008
2,950 Schlumberger, Ltd. 123,694
2,805 Smith International, Inc. 99,746
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,391,245
=========================================================================================================================
Financials (14.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,550 ACE, Ltd. 84,354
2,620 AFLAC, Inc. 85,700
1,550 Allstate Corporation 58,575
7,000 American Express Company 265,020
10,750 American International Group, Inc. 622,963
4,500 Bank of America Corporation 333,225
1,000 Bear Stearns Companies, Inc. 66,840
8,400 Charles Schwab Corporation 72,492
18,090 Citigroup, Inc. 710,033
7,245 E*TRADE Group, Inc.* 39,848
4,550 Federal Home Loan Mortgage Corporation 263,445
4,415 Federal National Mortgage Corporation 319,602
2,370 Fifth Third Bancorp 116,817
2,100 FleetBoston Financial Corporation 55,692
3,170 Goldman Sachs Group, Inc. 240,603
6,050 J.P. Morgan Chase & Company 177,568
2,550 Lehman Brothers Holdings, Inc. 160,574
3,550 Marsh & McLennan Companies, Inc. 169,264
5,600 MBNA Corporation 105,840
1,800 Mellon Financial Corporation 47,610
3,750 MetLife, Inc. 107,738
5,250 Morgan Stanley and Company 234,938
1,200 Neuberger Berman, Inc. 36,840
1,500 SAFECO Corporation 57,765
2,800 State Street Corporation 98,084
1,600 T. Rowe Price Group, Inc. 48,832
3,150 Wachovia Corporation 120,362
2,750 Washington Mutual, Inc. 108,625
3,500 Wells Fargo & Company 168,910
3,215 Willis Group Holdings, Ltd. 100,276
550 XL Capital, Ltd. 45,265
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 5,123,700
=========================================================================================================================
Health Care (20.9%)
- -------------------------------------------------------------------------------------------------------------------------
5,450 Abbott Laboratories 221,434
1,050 AdvancePCS, Inc.* 31,563
2,250 Aetna, Inc. 112,050
950 Allergan, Inc. 66,738
14,050 Amgen, Inc.* 861,406
1,150 Anthem, Inc.* 78,936
1,500 Baxter International, Inc. 34,500
850 Biogen, Inc.* 32,292
3,200 Boston Scientific Corporation* 137,760
3,245 Cardinal Health, Inc. 179,384
4,500 Caremark Rx, Inc.* 89,595
750 Cephalon, Inc.* 30,630
3,850 Eli Lilly and Company 245,707
5,040 Forest Laboratories, Inc. 260,669
2,550 Genentech, Inc.* 96,875
1,450 Genzyme Corporation* 58,406
3,650 Gilead Sciences, Inc.* 168,411
995 Guidant Corporation* 38,795
2,600 HCA, Inc. 83,460
16,200 Johnson & Johnson 913,032
2,100 MedImmune, Inc.* 74,067
13,730 Medtronic, Inc. 655,470
7,150 Merck & Company, Inc. 415,987
1,700 Omnicare, Inc. 45,084
50,235 Pfizer, Inc. 1,544,726
950 Quest Diagnostics, Inc.* 56,763
1,200 Stryker Corporation 80,412
3,650 Teva Pharmaceutical Industries, Ltd. 170,455
2,950 UnitedHealth Group, Inc. 271,784
1,500 WellPoint Health Networks, Inc.* 113,910
8,160 Wyeth Corporation 355,205
2,300 Zimmer Holdings, Inc.* 107,870
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 7,633,376
=========================================================================================================================
Industrials (9.7%)
- -------------------------------------------------------------------------------------------------------------------------
2,150 3M Company 270,986
1,500 AGCO Corporation* 27,315
1,250 Caterpillar, Inc. 65,750
6,850 Cendant Corporation* 97,818
1,300 Danaher Corporation 89,674
1,300 Dover Corporation 37,362
850 Eaton Corporation 69,760
2,100 FedEx Corporation 125,748
11,400 First Data Corporation 447,222
2,450 Fiserv, Inc.* 72,128
34,850 General Electric Company 1,026,333
2,000 Illinois Tool Works, Inc. 127,960
1,250 L-3 Communications Holdings, Inc. 55,500
3,900 Lockheed Martin Corporation 195,195
1,750 Navistar International Corporation* 48,825
1,650 Norfolk Southern Corporation 34,997
1,500 Northrop Grumman Corporation 131,925
4,850 Paychex, Inc. 151,029
4,550 Southwest Airlines Company 72,618
5,650 Tyco International, Ltd. 88,140
3,050 United Parcel Service, Inc., Class B 189,466
1,750 United Technologies Corporation 108,168
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 3,533,919
=========================================================================================================================
Information Technology (23.6%)
- -------------------------------------------------------------------------------------------------------------------------
12,050 ADC Telecommunications, Inc.* 28,775
3,200 Adobe Systems, Inc. 110,592
3,250 Advanced Micro Devices, Inc.* 24,180
1,300 Affiliated Computer Services, Inc.* 62,010
4,150 Alcatel SA ADR 33,449
5,810 Analog Devices, Inc.* 192,427
13,950 Applied Materials, Inc.* 203,670
3,750 Autodesk, Inc. 58,350
1,600 BEA Systems, Inc.* 17,136
850 BMC Software, Inc.* 12,682
2,000 Broadcom Corporation* 35,780
900 Business Objects SA ADR* 19,557
51,950 Cisco Systems, Inc.* 781,328
21,400 Dell Computer Corporation* 618,674
1,810 Electronic Arts, Inc.* 107,279
17,050 EMC Corporation* 154,985
1,550 Emulex Corporation* 31,760
9,650 Hewlett-Packard Company 157,295
39,800 Intel Corporation 732,320
5,200 International Business Machines Corporation 441,480
2,100 Intuit, Inc.* 81,438
4,200 Jabil Circuit, Inc.* 78,540
11,350 JDS Uniphase Corporation* 36,661
2,800 KLA-Tencor Corporation* 114,800
5,850 Legato Systems, Inc.* 34,632
450 Lexmark International, Inc.* 33,530
3,400 Linear Technology Corporation 117,198
15,200 Lucent Technologies, Inc.* 27,360
5,300 Maxim Integrated Products, Inc. 208,237
64,800 Microsoft Corporation 1,656,911
18,150 Nasdaq (100) Index Tracking Stock* 499,125
3,050 National Semiconductor Corporation* 57,127
2,650 Network Appliance, Inc.* 35,192
14,065 Nokia Corporation ADR 233,057
2,300 Novellus Systems, Inc.* 64,492
9,250 Openwave Systems, Inc.* 16,003
29,500 Oracle Corporation* 350,460
1,900 PeopleSoft, Inc.* 28,557
4,850 QUALCOMM, Inc. 154,667
2,650 SAP AG 67,602
6,000 Siebel Systems, Inc.* 52,020
17,300 Sun Microsystems, Inc.* 57,090
600 Symantec Corporation* 26,370
7,800 Taiwan Semiconductor Manufacturing Company, Ltd. ADR* 65,286
14,050 Texas Instruments, Inc. 259,785
5,200 Unisys Corporation* 54,080
7,950 United Microelectronics Corporation ADR* 25,758
3,900 VeriSign, Inc.* 48,438
7,050 VERITAS Software Corporation* 155,171
2,500 webMethods, Inc.* 25,150
5,250 Xilinx, Inc.* 142,118
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 8,630,584
=========================================================================================================================
Materials (0.2%)
- -------------------------------------------------------------------------------------------------------------------------
2,000 Alcoa, Inc. 45,860
850 Newmont Mining Corporation 22,967
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 68,827
=========================================================================================================================
Miscellaneous (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,200 S&P 400 Mid-Cap Depository Receipts 96,240
- -------------------------------------------------------------------------------------------------------------------------
Total Miscellaneous 96,240
=========================================================================================================================
Telecommunication Services (1.1%)
- -------------------------------------------------------------------------------------------------------------------------
16,650 AT&T Wireless Services, Inc.* 107,559
9,500 Sprint PCS Group* 33,250
4,200 Verizon Communications, Inc. 156,996
5,300 Vodafone Group plc ADR 104,728
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 402,533
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $33,472,746) 35,364,710
=========================================================================================================================
Shares Short-Term Investments (3.1%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
1,114,789 The AAL Money Market Fund 0.840% N/A $1,114,789
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 1,114,789
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $34,587,535) $36,479,499
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Small Cap Stock Fund
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (98.0%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (18.0%)
- -------------------------------------------------------------------------------------------------------------------------
146,000 Aeropostale, Inc.* $2,628,000
50,600 AnnTaylor Stores Corporation 1,197,196
118,700 Cost Plus, Inc.* 3,647,651
25,100 Emmis Communications Corporation* 476,147
44,500 Ethan Allen Interiors, Inc. 1,498,760
54,150 Fossil, Inc.* 989,862
38,600 Harman International Industries, Inc. 2,570,374
111,100 Hasbro, Inc. 1,777,600
29,600 Hot Topic, Inc.* 723,720
131,800 Insight Enterprises, Inc.* 993,772
26,100 International Speedway Corporation* 1,025,991
48,300 Lay-Z-Boy, Inc. 943,299
200,300 Linens 'n Things, Inc.* 4,244,357
42,400 Lone Star Steakhouse & Saloon, Inc. 889,128
20,647 M.D.C. Holdings, Inc. 951,827
135,600 Macrovision Corporation* 2,396,052
42,100 Men's Wearhouse, Inc.* 700,965
36,000 Michaels Stores, Inc.* 1,124,640
64,200 Monaco Coach Corporation* 867,984
127,800 Nautica Enterprises, Inc.* 1,454,364
4,600 NVR, Inc.* 1,645,650
75,000 O'Charley's, Inc.* 1,518,000
50,700 OshKosh B'Gosh, Inc. 1,540,266
58,100 Pacific Sunwear of California, Inc. 1,326,423
55,000 Quiksilver, Inc.* 1,793,000
174,400 Radio One, Inc.* 2,708,432
44,200 RARE Hospitality International, Inc.* 1,287,546
41,300 Regis Corporation 1,170,029
15,200 Ross Stores, Inc. 576,080
82,600 Ruby Tuesday, Inc. 1,627,220
20,200 Ryland Group, Inc. 1,095,446
34,700 SCP Pool Corporation* 1,145,447
36,100 Timberland Company* 1,804,639
47,800 West Marine, Inc.* 781,052
50,800 Wolverine World Wide, Inc. 936,752
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 52,057,671
=========================================================================================================================
Consumer Staples (3.2%)
- -------------------------------------------------------------------------------------------------------------------------
45,500 American Italian Pasta Company* 2,006,550
214,400 Casey's General Stores, Inc. 2,776,480
117,800 Hain Celestial Group, Inc.* 2,033,228
65,100 NBTY, Inc.* 1,009,050
19,500 Performance Food Group Company* 684,060
33,000 Ralcorp Holdings, Inc.* 821,700
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 9,331,068
=========================================================================================================================
Energy (7.9%)
- -------------------------------------------------------------------------------------------------------------------------
42,200 Cabot Oil & Gas Corporation 1,033,900
17,300 Cal Dive International, Inc.* 278,530
140,600 Chesapeake Energy Corporation 1,133,236
29,400 Evergreen Resources, Inc.* 1,397,970
161,800 Key Energy Services, Inc.* 1,629,326
171,000 Maverick Tube Corporation* 3,042,090
49,300 Newfield Exploration Company* 1,695,427
88,000 Patterson-UTI Energy, Inc.* 2,911,920
39,400 Precision Drilling Corporation* 1,354,572
64,800 Pride International, Inc.* 1,005,696
66,700 St. Mary Land & Exploration Company 1,708,854
44,800 Stone Energy Corporation* 1,573,824
194,000 Superior Energy Services, Inc.* 1,755,700
85,400 TETRA Technologies, Inc.* 2,271,640
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 22,792,685
=========================================================================================================================
Financials (18.8%)
- -------------------------------------------------------------------------------------------------------------------------
89,100 Affiliated Managers Group, Inc.* 4,126,221
85,700 American Capital Strategies, Ltd. 2,079,082
71,324 BOK Financial Corporation* 2,571,943
38,600 Commercial Federal Corporation 830,672
71,200 Community First Bankshares, Inc. 1,916,775
52,900 Corus Bankshares, Inc. 2,280,519
73,300 Cullen/Frost Bankers, Inc. 2,403,507
39,550 First BanCorp 1,220,909
67,800 First Midwest Bancorp, Inc. 1,877,382
76,200 HCC Insurance Holdings, Inc. 2,095,500
8,200 Hilb, Rogal and Hamilton Company 291,510
73,290 Hudson United Bancorp 2,443,489
96,400 I Shares Russell 2000 Index Fund 7,653,196
75,600 I Shares S&P Smallcap 600 Index Fund 7,490,448
46,300 MAF Bancorp, Inc. 1,563,088
55,100 Platinum Underwriters Holdings, Ltd. 1,457,395
104,800 Raymond James Financial, Inc. 3,005,664
53,800 RLI Corporation 1,589,790
52,300 Southwest Bancorporation of Texas, Inc.* 1,777,154
49,800 Stewart Information Services Corporation* 1,328,664
62,400 UCBH Holdings, Inc. 1,587,456
50,900 United Bankshares, Inc. 1,469,992
60,248 Washington Federal, Inc. 1,313,406
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 54,373,762
=========================================================================================================================
Health Care (11.5%)
- -------------------------------------------------------------------------------------------------------------------------
94,400 Alpharma, Inc. 1,760,560
69,700 American Pharmaceutical Partners, Inc.* 1,627,495
404,000 Bio-Technology General Corporation* 1,397,840
16,000 Cephalon, Inc.* 653,440
62,500 Cooper Companies, Inc. 1,743,750
28,200 Coventry Health Care, Inc.* 1,151,124
69,500 IDEXX Laboratories, Inc.* 2,710,500
64,600 Medicis Pharmaceutical Corporation* 3,723,544
34,900 Neurocrine Biosciences, Inc.* 1,579,225
58,200 Omnicare, Inc. 1,543,464
26,000 Pharmaceutical Product Development, Inc.* 680,420
54,000 ResMed, Inc.* 1,980,720
35,500 Respironics, Inc.* 1,363,910
33,000 STERIS Corporation* 749,100
42,800 Sybron Dental Specialties, Inc.* 870,980
43,600 TECHNE Corporation* 968,356
87,200 United Surgical Partners International, Inc.* 1,615,816
177,600 US Oncology, Inc.* 1,275,168
23,800 Varian Medical Systems, Inc.* 1,281,868
62,000 Ventana Medical Systems, Inc.* 1,420,420
49,100 Vital Signs, Inc. 1,399,350
52,700 Wilson Greatbatch Technologies, Inc.* 1,728,033
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 33,225,083
=========================================================================================================================
Industrials (16.0%)
- -------------------------------------------------------------------------------------------------------------------------
62,800 A.O. Smith Corporation 1,872,696
12,587 Alliant Techsystems, Inc. 676,174
31,600 Arkansas Best Corporation 801,060
251,200 Atlantic Coast Airlines Holdings, Inc.* 2,097,520
67,400 C&D Technologies, Inc. 896,420
146,000 Consolidated Graphics, Inc.* 2,788,600
45,700 Corinthian Colleges, Inc. 2,092,603
50,300 Dionex Corporation* 1,730,873
206,300 Dycom Industries, Inc.* 2,277,552
6,000 EMCOR Group, Inc.* 306,420
47,000 Fastenal Company 1,625,730
34,400 Global Payments, Inc. 1,066,744
72,325 Graco, Inc. 2,220,378
79,545 Heartland Express, Inc.* 1,829,535
59,400 Heidrick & Struggles International, Inc.* 831,600
40,600 IDEX Corporation 1,293,110
47,100 ITT Educational Services, Inc. 1,389,450
56,200 Manitowoc Company, Inc. 1,045,320
50,800 Mercury Computer Systems, Inc.* 1,066,800
46,000 Mueller Industries, Inc.* 1,175,300
70,100 Nordson Corporation 1,770,726
18,600 Oshkosh Truck Corporation 1,041,600
29,200 Resources Connection, Inc.* 636,560
68,200 Shaw Group, Inc.* 794,530
204,100 SkyWest, Inc. 2,610,439
54,300 Stewart & Stevenson Services, Inc. 728,163
50,100 Tetra Tech, Inc.* 776,550
111,800 TMP Worldwide, Inc. 1,874,886
32,800 Triumph Group, Inc.* 861,984
56,500 United Defense Industries, Inc.* 1,379,730
211,200 Wabash National Corporation* 1,981,056
35,100 Waste Connections, Inc.* 1,180,764
45,600 Woodward Governor Company 1,688,112
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 46,408,985
=========================================================================================================================
Information Technology (16.3%)
- -------------------------------------------------------------------------------------------------------------------------
74,500 Actel Corporation* 1,475,845
50,700 Acxiom Corporation* 707,772
147,100 Adaptec, Inc.* 1,006,164
128,000 Advanced Digital Information Corporation* 1,026,560
51,900 Advanced Energy Industries, Inc.* 498,759
13,700 Analogic Corporation 654,175
145,400 Axcelis Technologies, Inc.* 825,872
24,100 BARRA, Inc.* 786,865
33,600 Benchmark Electronics, Inc.* 871,920
65,700 Brooks Automation, Inc.* 556,479
33,700 CACI International, Inc.* 1,177,141
469,700 CIBER, Inc.* 2,550,471
72,700 Cognex Corporation* 1,591,403
35,200 Coherent, Inc.* 809,600
270,700 Computer Network Technology Corporation* 1,532,162
30,800 Cymer, Inc.* 879,340
74,300 Hutchinson Technology, Inc.* 1,756,452
70,100 Hyperion Solutions Corporation* 1,982,428
40,500 JDA Software Group, Inc.* 456,030
46,100 Kronos, Inc.* 2,103,082
258,400 Legato Systems, Inc.* 1,529,728
181,400 Methode Electronics, Inc. 1,904,700
487,600 Parametric Technology Corporation* 1,609,080
86,900 Photronics, Inc.* 1,092,333
287,800 Plumtree Software, Inc.* 1,033,202
56,500 Power Integrations, Inc.* 1,250,458
216,200 RadiSys Corporation* 1,829,052
18,600 Roper Industries, Inc. 568,974
232,500 Skyworks Solutions, Inc.* 1,243,875
776,900 Stratex Networks, Inc.* 1,911,174
110,100 Tollgrade Communications, Inc.* 1,597,551
67,700 Trimble Navigation, Ltd.* 1,709,425
61,300 Varian Semiconductor Equipment , Inc.* 1,412,965
27,200 Varian, Inc.* 859,792
67,700 Veeco Instruments, Inc.* 1,089,293
124,500 Verity, Inc.* 2,057,985
20,700 Zebra Technologies Corporation* 1,380,069
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 47,328,176
=========================================================================================================================
Materials (1.8%)
- -------------------------------------------------------------------------------------------------------------------------
38,400 Florida Rock Industries, Inc. 1,459,200
118,900 MacDermid, Inc. 2,702,597
82,200 Steel Dynamics, Inc.* 994,620
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 5,156,417
=========================================================================================================================
Telecommunication Services (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
42,700 Commonwealth Telephone Enterprises, Inc.* 1,697,325
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 1,697,325
=========================================================================================================================
Utilities (3.9%)
- -------------------------------------------------------------------------------------------------------------------------
36,400 CH Energy Group, Inc. 1,530,620
83,600 Energen Corporation 2,742,079
35,800 Northwest Natural Gas Company 924,714
42,937 Philadelphia Suburban Corporation 972,523
32,500 Piedmont Natural Gas Company, Inc. 1,214,200
64,700 Puget Energy, Inc. 1,366,464
53,600 Southwest Gas Corporation 1,112,736
84,700 UniSource Energy Corporation 1,510,201
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 11,373,537
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $281,518,639) 283,744,709
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (2.0%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$4,000,000 Starfish Global Funding, LLC 1.260% 5/6/2003 $3,999,289
1,888,739 The AAL Money Market Fund 0.840 N/A 1,888,739
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 5,888,028
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $287,406,667) $289,632,737
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield or, for securities purchased at a discount, the discount at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Small Cap Index Fund II
Schedule of Investments as of April 30, 2003(a)
Shares Common Stock (99.7%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (20.0%)
- -------------------------------------------------------------------------------------------------------------------------
900 4Kids Entertainment, Inc.* $13,860
1,000 A.T. Cross Company* 5,120
1,500 Aaron Rents, Inc. 33,525
1,300 Action Performance Companies, Inc. 24,037
1,300 Advanced Marketing Services, Inc. 15,314
1,400 ADVO, Inc.* 55,048
2,000 AFC Enterprises, Inc.* 31,600
3,150 AnnTaylor Stores Corporation 74,529
1,600 Applica, Inc.* 8,400
1,500 Arctic Cat, Inc. 27,330
2,000 Argosy Gaming Company* 40,740
900 Ashworth, Inc.* 5,148
2,500 Aztar Corporation* 35,600
2,300 Bally Total Fitness Holding Corporation* 14,605
800 Bassett Furniture Industries, Inc. 9,832
1,300 Brown Shoe Company, Inc. 37,999
900 Building Materials Holding Corporation 11,169
3,100 Burlington Coat Factory Warehouse Corporation 55,025
1,800 Cato Corporation 36,900
1,900 CEC Entertainment, Inc.* 57,209
3,500 Champion Enterprises, Inc.* 8,470
1,800 Children's Place Retail Stores, Inc.* 27,360
1,800 Christopher & Banks Corporation* 45,288
1,100 Coachmen Industries, Inc. 13,915
1,900 Concord Camera Corporation* 10,678
1,500 Cost Plus, Inc.* 46,095
900 Department 56, Inc.* 10,620
2,000 Dress Barn, Inc.* 30,040
900 Enesco Group, Inc.* 7,128
2,700 Ethan Allen Interiors, Inc. 90,936
2,070 Fedders Corporation 7,245
2,500 Fleetwood Enterprises, Inc.* 12,600
1,400 Footstar, Inc.* 12,950
3,200 Fossil, Inc.* 58,496
1,800 Fred's, Inc. 58,410
1,500 Genesco, Inc.* 22,500
2,200 Goody's Family Clothing, Inc.* 10,824
1,600 Group 1 Automotive, Inc.* 44,016
2,000 Gymboree Corporation* 33,420
400 Haggar Corporation 4,160
1,300 Hancock Fabrics, Inc. 20,280
2,300 Harman International Industries, Inc. 153,157
1,500 Haverty Furniture Companies, Inc. 21,075
2,150 Hot Topic, Inc.* 52,568
1,000 Huffy Corporation* 5,790
1,700 Hughes Supply, Inc. 47,719
1,500 IHOP Corporation 39,450
1,500 Information Holdings, Inc.* 26,100
3,150 Insight Enterprises, Inc.* 23,751
3,500 Interface, Inc. 12,600
1,700 Intermet Corporation 6,324
1,300 J. Jill Group, Inc.* 18,655
2,500 Jack in the Box, Inc.* 44,500
1,700 JAKKS Pacific, Inc.* 22,100
1,400 Jo-Ann Stores, Inc.* 36,400
1,300 K-Swiss, Inc. 38,649
1,800 K2, Inc.* 17,172
1,800 Kellwood Company 53,316
1,900 Landry's Restaurants, Inc. 35,530
4,000 Lay-Z-Boy, Inc. 78,120
900 Libbey, Inc. 20,232
3,100 Linens 'n Things, Inc.* 65,689
1,500 Lone Star Steakhouse & Saloon, Inc. 31,455
1,898 M.D.C. Holdings, Inc. 87,498
2,000 Marcus Corporation 28,400
1,300 Meade Instruments Corporation* 3,471
2,800 Men's Wearhouse, Inc.* 46,620
1,000 Midas, Inc.* 8,050
3,200 Midway Games, Inc.* 10,080
2,000 Monaco Coach Corporation* 27,040
2,300 Movie Gallery, Inc.* 42,529
500 National Presto Industries, Inc. 14,800
2,300 Nautica Enterprises, Inc.* 26,174
2,200 Nautilus Group, Inc.* 27,940
500 NVR, Inc.* 178,871
1,400 O'Charley's, Inc.* 28,336
3,700 O'Reilly Automotive, Inc.* 109,742
900 OshKosh B'Gosh, Inc. 27,342
500 Oxford Industries, Inc. 16,750
1,800 P.F. Chang's China Bistro, Inc. 75,420
3,500 Pacific Sunwear of California, Inc. 79,905
2,100 Panera Bread Company 71,463
1,300 Papa John's International, Inc.* 30,914
3,600 Pep Boys, Inc. 30,816
2,100 Phillips-Van Heusen Corporation 27,888
1,800 Pinnacle Entertainment, Inc.* 9,612
1,600 Polaris Industries, Inc. 84,592
3,100 Prime Hospitality Corporation* 20,646
1,900 Quiksilver, Inc.* 61,940
1,600 RARE Hospitality International, Inc.* 46,608
3,100 Regis Corporation 87,823
1,500 Russ Berrie and Company, Inc. 49,320
2,200 Russell Corporation 42,064
3,000 Ryan's Family Steak Houses, Inc.* 37,170
1,800 Ryland Group, Inc. 97,614
700 Salton, Inc.* 8,960
1,300 School Specialty, Inc.* 24,141
1,600 SCP Pool Corporation* 52,816
2,000 ShopKo Stores, Inc.* 24,060
1,200 Shuffle Master, Inc.* 27,480
600 Skyline Corporation 17,760
2,700 Sonic Corporation* 72,927
800 Standard Motor Products, Inc. 9,240
2,300 Standard Pacific Corporation 69,575
1,800 Steak 'n Shake Company* 20,826
2,900 Stein Mart, Inc.* 15,863
2,700 Stride Rite Corporation 23,787
1,800 Sturm, Ruger & Company, Inc. 16,020
1,500 TBC Corporation* 24,000
1,000 Thomas Nelson, Inc.* 9,250
2,000 Thor Industries, Inc. 63,960
2,400 Too, Inc.* 44,544
1,800 Toro Company 67,158
3,900 Tower Automotive, Inc.* 10,920
1,300 Tractor Supply Company* 55,055
1,400 Triarc Companies, Inc.* 38,780
1,000 Ultimate Electronics, Inc.* 8,450
1,400 Urban Outfitters, Inc.* 41,748
2,200 Wellman, Inc. 25,168
2,025 Wet Seal, Inc., Class A* 20,655
1,300 Winnebago Industries, Inc. 48,126
2,100 WMS Industries, Inc.* 28,329
2,800 Wolverine World Wide, Inc. 51,632
2,300 Zale Corporation* 80,362
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 4,557,803
=========================================================================================================================
Consumer Staples (3.7%)
- -------------------------------------------------------------------------------------------------------------------------
1,300 American Italian Pasta Company* 57,330
3,400 Casey's General Stores, Inc. 44,030
700 Coca-Cola Bottling Company Consolidated 35,496
2,500 Corn Products International, Inc. 74,700
2,700 Delta and Pine Land Company 62,802
3,100 DIMON, Inc. 20,336
1,600 Duane Reade, Inc.* 21,520
2,100 Flowers Foods, Inc. 59,430
2,600 Great Atlantic & Pacific Tea Company, Inc.* 15,860
2,400 Hain Celestial Group, Inc.* 41,424
1,300 International Multifoods Corporation* 24,895
600 J & J Snack Foods Corporation* 18,792
2,000 Lance, Inc. 14,800
800 Nash Finch Company 10,000
900 Nature's Sunshine Products, Inc. 8,523
4,600 NBTY, Inc.* 71,300
3,200 Performance Food Group Company* 112,256
2,000 Ralcorp Holdings, Inc.* 49,800
1,000 Schweitzer-Mauduit International, Inc. 21,890
1,300 United Natural Foods, Inc.* 37,947
1,200 WD-40 Company 31,740
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 834,871
=========================================================================================================================
Energy (5.7%)
- -------------------------------------------------------------------------------------------------------------------------
1,000 Atwood Oceanics, Inc.* 26,050
2,300 Cabot Oil & Gas Corporation 56,350
2,600 Cal Dive International, Inc.* 41,860
1,100 Carbo Ceramics, Inc. 41,382
2,800 Cimarex Energy Company* 55,160
1,200 Dril-Quip, Inc.* 18,456
1,400 Evergreen Resources, Inc.* 66,570
1,800 Frontier Oil Corporation 30,456
1,600 Hydril Company* 38,096
3,500 Input/Output, Inc.* 10,885
2,000 Lone Star Technologies, Inc.* 42,460
2,900 Maverick Tube Corporation* 51,591
3,600 Newfield Exploration Company* 123,804
1,300 Nuevo Energy Company* 17,420
1,700 Oceaneering International, Inc.* 38,352
1,600 Offshore Logistics, Inc.* 30,400
1,925 Patina Oil & Gas Corporation 66,470
1,600 Plains Resources, Inc. 19,392
900 Prima Energy Corporation* 17,668
1,800 Remington Oil and Gas Corporation* 28,206
1,400 SEACOR SMIT, Inc.* 50,148
2,300 Spinnaker Exploration Company* 49,220
2,000 St. Mary Land & Exploration Company 51,240
1,900 Stone Energy Corporation* 66,747
1,900 Swift Energy Company* 15,808
1,000 TETRA Technologies, Inc.* 26,600
2,800 Tom Brown, Inc.* 68,656
3,000 Unit Corporation* 58,800
2,300 Veritas DGC, Inc.* 15,755
4,400 Vintage Petroleum, Inc. 43,032
1,900 W-H Energy Services, Inc.* 34,200
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,301,234
=========================================================================================================================
Financials (14.9%)
- -------------------------------------------------------------------------------------------------------------------------
1,700 Anchor BanCorp Wisconsin, Inc. 39,355
1,700 BankUnited Financial Corporation* 32,113
1,600 Boston Private Financial Holdings, Inc. 30,160
2,200 Capital Automotive REIT 56,958
1,700 Cash America International, Inc. 17,442
2,600 Chittenden Corporation 70,330
1,600 Colonial Properties Trust 54,416
3,200 Commercial Federal Corporation 68,864
2,800 Community First Bankshares, Inc. 75,379
3,600 Cullen/Frost Bankers, Inc. 118,044
1,500 Delphi Financial Group, Inc. 66,075
1,800 Dime Community Bancshares 41,508
2,000 Downey Financial Corporation 87,800
1,700 East West Bancorp, Inc. 57,545
1,500 Essex Property Trust, Inc. 82,455
1,300 Financial Federal Corporation* 29,120
2,850 First BanCorp 87,980
3,300 First Midwest Bancorp, Inc. 91,377
1,000 First Republic Bank* 25,100
1,200 FirstFed Financial Corporation* 38,988
2,100 Flagstar Bancorp, Inc. 69,510
5,200 Fremont General Corporation 48,672
1,700 Gables Residential Trust 48,246
800 GBC Bancorp 21,976
1,900 Glenborough Realty Trust, Inc. 31,502
2,400 Hilb, Rogal and Hamilton Company 85,320
3,150 Hudson United Bancorp 105,021
1,900 Irwin Financial Corporation 45,030
1,900 Jefferies Group, Inc. 73,758
1,900 Kilroy Realty Corporation 47,158
1,300 LandAmerica Financial Group, Inc. 53,391
1,600 MAF Bancorp, Inc. 54,016
1,800 New Century Financial Corporation 66,294
1,500 Philadelphia Consolidated Holding Corporation* 58,515
2,000 Presidential Life Corporation 16,160
1,755 Provident Bankshares Corporation 44,577
3,500 Raymond James Financial, Inc. 100,380
4,000 Republic Bancorp* 51,960
2,000 Riggs National Corporation 27,680
1,700 RLI Corporation 50,235
600 SCPIE Holdings, Inc. 5,550
1,700 Seacoast Financial Services Corporation 32,079
1,900 Selective Insurance Group, Inc. 47,671
2,500 Shurgard Storage Centers, Inc. 81,675
3,300 South Financial Group, Inc. 80,850
2,400 Southwest Bancorporation of Texas, Inc.* 81,552
4,200 Staten Island Bancorp, Inc. 72,072
3,050 Sterling Bancshares, Inc. 36,313
1,300 Stewart Information Services Corporation* 34,684
2,800 Susquehanna Bancshares, Inc. 63,700
1,193 SWS Group, Inc. 19,768
5,133 TrustCo Bank Corporation NY 53,537
2,900 UCBH Holdings, Inc. 73,776
3,300 UICI* 39,270
3,000 United Bankshares, Inc. 86,640
4,917 Washington Federal, Inc. 107,191
2,300 Waypoint Financial Corporation 41,975
2,850 Whitney Holding Corporation 96,273
1,200 Wintrust Financial Corporation 36,480
1,300 Zenith National Insurance Corporation 33,475
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 3,394,941
=========================================================================================================================
Health Care (12.1%)
- -------------------------------------------------------------------------------------------------------------------------
3,275 Accredo Health, Inc. 48,372
2,000 Advanced Medical Optics, Inc.* 28,060
3,600 Alpharma, Inc. 67,140
2,200 American Medical Systems Holdings, Inc.* 34,914
1,400 Amerigroup Corporation* 40,768
1,400 Amsurg Corporation* 36,358
1,600 ArQule, Inc.* 6,304
1,400 ArthroCare Corporation* 21,392
4,100 Bio-Technology General Corporation* 14,186
1,100 Biosite Diagnostics, Inc.* 46,948
800 Centene Corporation* 25,628
3,900 Cephalon, Inc.* 159,276
2,500 Cerner Corporation* 49,950
1,000 CIMA Labs, Inc.* 24,150
2,000 CONMED Corporation* 34,840
2,200 Cooper Companies, Inc. 61,380
1,350 CryoLife, Inc.* 10,260
800 Curative Health Services, Inc.* 10,000
1,000 Datascope Corporation 28,599
2,000 Diagnostic Products Corporation 79,000
2,012 Enzo Biochem, Inc.* 30,120
1,700 Haemonetics Corporation* 30,141
1,300 Hologic, Inc.* 11,700
4,500 Hooper Holmes, Inc. 27,225
1,000 ICU Medical, Inc.* 31,780
2,400 IDEXX Laboratories, Inc.* 93,600
1,100 IMPATH, Inc.* 16,170
1,600 Inamed Corporation* 59,664
1,900 Integra LifeSciences Holdings Corporation* 50,711
2,100 Invacare Corporation 67,095
1,900 Medicis Pharmaceutical Corporation* 109,516
3,200 Mentor Corporation 59,232
1,700 MGI PHARMA, Inc.* 24,548
3,400 Mid Atlantic Medical Services, Inc.* 148,070
2,400 NDCHealth Corporation 46,200
1,600 Noven Pharmaceuticals, Inc.* 15,408
3,500 Orthodontic Centers of America, Inc.* 20,300
1,100 Osteotech, Inc.* 11,506
2,400 Owens & Minor, Inc. 44,640
1,700 PAREXEL International Corporation* 21,964
1,800 Pediatrix Medical Group, Inc.* 57,366
3,900 Pharmaceutical Product Development, Inc.* 102,063
900 PolyMedica Corporation 33,525
1,200 Possis Medical, Inc.* 23,040
3,000 Priority Healthcare Corporation* 68,400
3,400 Province Healthcare Company 34,000
3,000 Regeneron Pharmaceuticals, Inc.* 18,990
1,100 RehabCare Group, Inc.* 19,228
3,400 Renal Care Group, Inc.* 110,160
2,300 ResMed, Inc.* 84,364
2,400 Respironics, Inc.* 92,208
1,900 Sierra Health Services, Inc.* 31,540
1,700 Sola International, Inc.* 23,817
1,600 Sunrise Assisted Living, Inc.* 43,200
1,200 SurModics, Inc.* 43,608
2,700 Sybron Dental Specialties, Inc.* 54,945
2,900 TECHNE Corporation* 64,409
2,000 Theragenics Corporation* 8,940
6,200 US Oncology, Inc.* 44,516
1,800 Viasys Healthcare, Inc.* 29,160
900 Vital Signs, Inc. 25,650
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 2,760,244
=========================================================================================================================
Industrials (19.4%)
- -------------------------------------------------------------------------------------------------------------------------
2,000 A.O. Smith Corporation 59,640
2,200 AAR Corporation 8,536
3,400 ABM Industries, Inc. 47,090
2,900 Acuity Brands, Inc. 44,167
1,900 Administaff, Inc.* 12,141
4,200 Aeroflex, Inc.* 22,596
2,300 Albany International Corporation 54,602
2,662 Alliant Techsystems, Inc. 143,003
600 Angelica Corporation 10,074
1,900 Apogee Enterprises, Inc. 19,646
1,300 Applied Industrial Technologies, Inc. 24,037
2,100 Arbitron, Inc.* 71,526
1,800 Arkansas Best Corporation 45,630
2,000 Armor Holdings, Inc.* 24,100
1,300 Astec Industries, Inc.* 10,634
1,450 AstroPower, Inc. 4,292
3,100 Atlantic Coast Airlines Holdings, Inc.* 25,885
2,400 Baldor Electric Company 53,376
1,400 Barnes Group, Inc. 29,456
1,700 Belden, Inc. 20,213
2,300 Bowne & Company, Inc. 25,944
1,600 Brady Corporation 53,616
1,500 Briggs & Stratton Corporation 67,710
400 Butler Manufacturing Company 6,552
1,800 C&D Technologies, Inc. 23,940
1,400 CDI Corporation* 39,102
2,500 Central Parking Corporation 25,000
700 Chemed Corporation 24,402
1,800 CLARCOR, Inc. 67,338
1,500 Coinstar, Inc.* 27,435
900 Consolidated Graphics, Inc.* 17,190
500 CPI Corporation 6,675
1,900 Cubic Corporation 36,841
1,200 Cuno, Inc.* 43,008
700 Curtiss-Wright Corporation 42,175
1,500 Dionex Corporation* 51,617
1,600 DRS Technologies, Inc.* 44,816
1,400 EDO Corporation 26,390
3,200 eFunds Corporation* 29,280
1,400 ElkCorp 28,350
1,100 EMCOR Group, Inc.* 56,177
1,150 Engineered Support Systems, Inc. 39,940
1,400 Esterline Technologies Corporation* 24,850
1,500 Forward Air Corporation* 37,740
2,000 Frontier Airlines, Inc.* 12,100
1,500 G & K Services, Inc. 40,995
1,100 Gardner Denver, Inc.* 21,813
3,000 GenCorp, Inc. 22,800
2,640 Global Payments, Inc. 81,866
3,150 Graco, Inc. 96,705
2,220 Griffon Corporation* 30,236
3,501 Heartland Express, Inc.* 80,523
1,200 Heidrick & Struggles International, Inc.* 16,800
2,300 IDEX Corporation 73,255
1,300 Imagistics International, Inc.* 27,976
1,800 Insituform Technologies, Inc.* 28,710
800 Insurance Auto Auctions, Inc.* 9,680
1,200 InVision Technologies, Inc.* 28,512
1,200 Ionics, Inc.* 22,800
3,200 ITT Educational Services, Inc. 94,400
3,000 JLG Industries, Inc. 16,320
1,900 John H. Harland Company 45,505
1,500 Kaman Corporation 15,015
4,200 Kansas City Southern, Inc.* 46,494
2,100 Kaydon Corporation 46,830
1,700 Kirby Corporation* 44,472
2,600 Knight Transportation, Inc.* 62,660
2,700 Kroll, Inc.* 60,210
2,800 Labor Ready, Inc.* 18,060
1,100 Landstar System, Inc.* 68,343
700 Lawson Products, Inc. 18,900
4,000 Lennox International, Inc. 59,440
800 Lindsay Manufacturing Company 17,400
1,100 Lydall, Inc.* 10,450
1,600 MagneTek, Inc.* 3,456
1,800 Manitowoc Company, Inc. 33,480
900 MemberWorks, Inc.* 19,737
1,500 Mercury Computer Systems, Inc.* 31,500
2,200 Mesa Air Group, Inc.* 11,836
2,300 Milacron, Inc. 12,006
1,000 Mobile Mini, Inc.* 15,860
2,400 Mueller Industries, Inc.* 61,320
1,800 NCO Group, Inc.* 30,150
900 New England Business Service, Inc. 22,905
1,800 On Assignment, Inc.* 8,640
1,200 Oshkosh Truck Corporation 67,200
2,700 Paxar Corporation* 27,891
1,700 Pegasus Solutions, Inc.* 20,230
1,200 Pre-Paid Legal Services, Inc.* 27,672
4,400 PRG-Schultz International, Inc.* 28,072
1,700 Regal-Beloit Corporation 29,155
2,200 Reliance Steel & Aluminum Company 37,400
1,400 Roadway Corporation 51,884
1,000 Robbins & Myers, Inc. 17,190
2,600 Shaw Group, Inc.* 30,290
1,700 Simpson Manufacturing Company, Inc.* 59,704
4,000 SkyWest, Inc. 51,160
1,200 SOURCECORP, Inc.* 18,960
4,100 Spherion Corporation* 17,835
900 SPS Technologies, Inc.* 23,742
1,900 Standard Register Company 32,832
800 Standex International Corporation 16,888
2,000 Stewart & Stevenson Services, Inc. 26,820
3,700 Tetra Tech, Inc.* 57,350
1,200 Thomas Industries, Inc. 32,280
6,000 Timken Company 106,200
2,700 Tredegar Corporation 34,722
1,100 Triumph Group, Inc.* 28,908
2,300 United Stationers, Inc.* 62,353
1,200 Universal Forest Products, Inc. 21,120
2,200 URS Corporation* 31,240
1,900 USFreightways Corporation 54,169
1,700 Valmont Industries, Inc. 32,844
2,900 Vicor Corporation* 19,488
1,000 Volt Information Sciences, Inc.* 13,230
1,700 Wabash National Corporation* 15,946
2,000 Waste Connections, Inc.* 67,280
1,800 Watsco, Inc. 27,882
2,300 Watson Wyatt & Company Holdings* 46,920
1,900 Watts Industries, Inc. 31,065
800 Wolverine Tube, Inc.* 4,320
800 Woodward Governor Company 29,616
2,100 Yellow Corporation* 56,070
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 4,404,820
=========================================================================================================================
Information Technology (14.9%)
- -------------------------------------------------------------------------------------------------------------------------
1,700 Actel Corporation* 33,677
7,500 Adaptec, Inc.* 51,300
2,200 Advanced Energy Industries, Inc.* 21,142
2,100 Allen Telecom, Inc.* 28,413
2,500 Alliance Semiconductor Corporation* 9,450
2,900 American Management Systems, Inc.* 35,670
1,000 Analogic Corporation 47,750
2,600 Anixter International, Inc.* 59,748
1,000 ANSYS, Inc.* 26,450
2,600 Artesyn Technologies, Inc.* 10,894
2,200 ATMI, Inc.* 46,418
1,500 Audiovox Corporation* 10,800
1,900 Avid Technology, Inc.* 52,193
6,800 Axcelis Technologies, Inc.* 38,624
1,350 BARRA, Inc.* 44,078
1,000 BEI Technologies, Inc. 8,560
800 Bel Fuse, Inc. 15,760
1,300 Bell Microproducts, Inc.* 5,954
1,700 Benchmark Electronics, Inc.* 44,115
1,400 Black Box Corporation 44,450
2,500 Brooks Automation, Inc.* 21,175
800 Brooktrout, Inc.* 3,896
2,500 C-COR.net Corporation* 8,525
3,050 Cable Design Technologies Corporation* 21,076
2,000 CACI International, Inc.* 69,860
2,100 Captaris, Inc.* 6,720
1,600 Carreker Corporation* 6,016
900 Catapult Communications Corporation* 7,965
2,200 Checkpoint Systems, Inc.* 29,370
4,500 CIBER, Inc.* 24,435
3,000 Cognex Corporation* 65,670
2,000 Coherent, Inc.* 46,000
1,400 Cohu, Inc. 25,214
800 Concerto Software, Inc.* 3,640
1,200 Concord Communications, Inc.* 15,156
2,300 CTS Corporation 19,205
2,400 Cymer, Inc.* 68,520
2,700 Dendrite International, Inc.* 27,648
1,400 Digi International, Inc.* 5,936
1,900 DSP Group, Inc.* 39,710
1,300 DuPont Photomasks, Inc.* 24,167
1,900 Electro Scientific Industries, Inc.* 25,517
2,700 ESS Technology, Inc.* 18,684
2,800 Exar Corporation* 41,300
2,400 FactSet Research Systems, Inc. 83,520
2,300 FEI Company* 42,067
2,500 FileNET Corporation* 38,475
1,200 FLIR Systems, Inc.* 62,496
1,500 Gerber Scientific, Inc.* 12,375
1,500 Global Imaging Systems, Inc.* 27,750
4,200 Harmonic, Inc.* 14,574
1,800 Helix Technology Corporation 20,736
1,800 Hutchinson Technology, Inc.* 42,552
2,500 Hyperion Solutions Corporation* 70,700
1,700 Inter-Tel, Inc. 27,965
1,123 Intermagnetics General Corporation* 21,820
1,400 Itron, Inc.* 28,028
1,900 JDA Software Group, Inc.* 21,394
1,000 Keithley Instruments, Inc. 12,200
4,800 Kopin Corporation* 23,088
1,400 Kronos, Inc.* 63,868
3,400 Kulicke and Soffa Industries, Inc.* 17,646
2,000 Manhattan Associates, Inc.* 48,380
1,000 MapInfo Corporation* 5,050
1,500 MAXIMUS, Inc.* 36,150
2,400 Methode Electronics, Inc. 25,200
1,200 MICROS Systems, Inc.* 30,036
2,000 Microsemi Corporation* 23,460
1,700 MRO Software, Inc.* 14,569
2,400 Netegrity, Inc.* 11,376
1,500 Network Equipment Technologies, Inc.* 10,755
2,100 NYFIX, Inc.* 10,080
1,400 Park Electrochemical Corporation 24,976
1,300 PCTEL, Inc.* 11,934
1,800 Pericom Semiconductor Corporation* 15,264
1,700 Phoenix Technologies, Ltd.* 7,701
1,100 Photon Dynamics, Inc.* 24,090
2,200 Photronics, Inc.* 27,654
4,300 Pinnacle Systems, Inc.* 40,635
2,200 Pioneer-Standard Electronics, Inc. 21,318
900 Planar Systems, Inc.* 15,831
2,000 Power Integrations, Inc.* 44,264
2,300 Progress Software Corporation* 44,827
1,100 QRS Corporation* 5,720
1,900 Radiant Systems, Inc.* 12,027
1,200 RadiSys Corporation* 10,152
1,800 Rainbow Technologies, Inc.* 16,128
1,100 Rogers Corporation* 36,410
2,200 Roper Industries, Inc. 67,298
1,300 Roxio, Inc.* 6,825
1,100 Rudolph Technologies, Inc.* 16,621
1,000 SBS Technologies, Inc.* 8,190
1,000 SCM Microsystems, Inc.* 3,820
2,800 SERENA Software, Inc.* 44,128
9,600 Skyworks Solutions, Inc.* 51,360
1,200 SPSS, Inc.* 14,856
1,100 Standard Microsystems Corporation* 13,926
1,000 StarTek, Inc.* 27,660
900 Supertex, Inc.* 14,355
2,850 Symmetricom, Inc.* 11,742
2,300 Systems & Computer Technology Corporation* 16,491
2,900 Take-Two Interactive Software, Inc.* 65,250
900 TALX Corporation 11,448
2,800 Technitrol, Inc.* 44,212
2,200 Teledyne Technologies, Inc.* 30,976
2,800 THQ, Inc.* 39,564
1,500 Three-Five Systems, Inc.* 7,650
900 Tollgrade Communications, Inc.* 13,059
2,200 Trimble Navigation, Ltd.* 55,550
1,500 Ultratech Stepper, Inc.* 21,255
2,400 Varian Semiconductor Equipment, Inc.* 55,320
2,000 Veeco Instruments, Inc.* 32,180
2,600 Verity, Inc.* 42,978
1,800 ViaSat, Inc.* 19,152
1,500 Websense, Inc.* 21,405
1,400 X-Rite, Inc. 14,266
2,200 Zebra Technologies Corporation* 146,674
1,400 ZixIt Corporation* 6,818
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 3,391,121
=========================================================================================================================
Materials (4.6%)
- -------------------------------------------------------------------------------------------------------------------------
2,000 A. Schulman, Inc. 32,718
1,100 A.M. Castle & Company* 5,082
2,500 AptarGroup, Inc. 86,050
1,600 Arch Chemicals, Inc. 34,128
1,100 Brush Engineered Materials, Inc.* 5,830
2,500 Buckeye Technologies, Inc.* 13,250
1,800 Cambrex Corporation 31,320
1,900 Caraustar Industries, Inc.* 13,072
1,400 Century Aluminum Company 9,310
1,100 Chesapeake Corporation 19,756
700 Cleveland-Cliffs, Inc.* 12,600
2,000 Commercial Metals Company 30,920
1,100 Commonwealth Industries, Inc. 5,335
800 Deltic Timber Corporation 19,568
2,050 Florida Rock Industries, Inc. 77,900
2,300 Georgia Gulf Corporation 51,980
2,000 H.B. Fuller Company 49,060
1,000 IMCO Recycling, Inc.* 6,900
2,200 MacDermid, Inc. 50,006
5,200 Massey Energy Company 54,236
900 Material Sciences Corporation* 7,245
2,080 Myers Industries, Inc. 20,883
1,900 OM Group, Inc. 22,154
2,700 OMNOVA Solutions, Inc.* 9,585
600 Penford Corporation 8,094
6,400 PolyOne Corporation 29,568
1,100 Pope & Talbot, Inc. 14,619
700 Quaker Chemical Corporation 15,645
1,100 Quanex Corporation 31,636
2,400 Rock-Tenn Company, Class A 32,160
1,400 RTI International Metals, Inc.* 14,140
1,700 Ryerson Tull, Inc. 12,767
2,200 Scotts Company* 125,290
3,300 Steel Dynamics, Inc.* 39,930
600 Steel Technologies, Inc. 6,588
3,000 Stillwater Mining Company* 8,100
1,500 Texas Industries, Inc. 29,610
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 1,037,035
=========================================================================================================================
Telecommunication Services (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,200 Boston Communications Group, Inc.* 21,708
3,900 General Communication, Inc.* 24,145
1,650 Metro One Telecommunications, Inc.* 10,676
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 56,529
=========================================================================================================================
Utilities (4.1%)
- -------------------------------------------------------------------------------------------------------------------------
1,100 American States Water Company 28,424
3,200 Atmos Energy Corporation 72,896
3,300 Avista Corporation 39,039
800 Cascade Natural Gas Corporation 15,256
800 Central Vermont Public Service Corporation 14,152
1,100 CH Energy Group, Inc. 46,255
3,300 Cleco Corporation 49,500
3,400 El Paso Electric Company* 38,556
2,400 Energen Corporation 78,720
300 Green Mountain Power Corporation 6,270
1,300 Laclede Group, Inc. 31,330
1,900 New Jersey Resources Corporation 65,075
1,800 Northwest Natural Gas Company 46,494
2,600 NorthWestern Corporation 6,292
1,100 NUI Corporation 15,477
2,300 Piedmont Natural Gas Company, Inc. 85,928
3,865 Southern Union Company* 53,917
2,300 Southwest Gas Corporation 47,748
2,300 Southwestern Energy Company* 30,613
2,900 UGI Corporation 91,640
1,000 UIL Holdings Corporation 36,110
2,300 UniSource Energy Corporation 41,009
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 940,701
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $24,847,390) 22,679,299
=========================================================================================================================
Shares Short-Term Investments (0.3%) Interest Rate (b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
61,918 The AAL Money Market Fund 0.840% N/A $61,918
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 61,918
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $24,909,308) $22,741,217
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Small Cap Value Fund
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (94.7%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (19.6%)
- -------------------------------------------------------------------------------------------------------------------------
20,600 Aeropostale, Inc.* $370,800
12,500 Cost Plus, Inc.* 384,125
40,700 Deckers Outdoor Corporation* 244,200
4,900 Ethan Allen Interiors, Inc. 165,032
12,000 Hasbro, Inc. 192,000
8,500 Hearst-Argyle Television, Inc.* 204,765
32,600 Insight Enterprises, Inc.* 245,804
49,600 Interface, Inc. 178,560
8,600 International Speedway Corporation* 338,066
6,100 KB Home 300,547
5,000 Lear Corporation* 198,700
5,600 Lee Enterprises, Inc. 200,872
8,100 Michaels Stores, Inc.* 253,044
19,700 Monaco Coach Corporation* 266,344
6,700 O'Charley's, Inc.* 135,608
6,700 Quiksilver, Inc.* 218,420
22,200 Radio One, Inc.* 344,766
12,600 Red Robin Gourmet Burgers* 192,654
6,600 Ross Stores, Inc. 250,140
10,200 Ruby Tuesday, Inc. 200,940
5,700 Ryland Group, Inc. 309,111
6,900 SCP Pool Corporation* 227,769
2,900 Timberland Company* 144,971
8,100 Toll Brothers, Inc.* 188,325
29,500 Tower Automotive, Inc.* 82,600
31,800 Toys 'R' Us, Inc.* 325,950
10,400 West Marine, Inc.* 169,936
5,600 Winnebago Industries, Inc. 207,312
11,800 Wolverine World Wide, Inc. 217,592
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 6,758,953
=========================================================================================================================
Consumer Staples (3.1%)
- -------------------------------------------------------------------------------------------------------------------------
6,400 American Italian Pasta Company* 282,240
24,200 Casey's General Stores, Inc. 313,390
15,400 Hain Celestial Group, Inc.* 265,804
8,900 Schweitzer-Mauduit International, Inc. 194,821
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 1,056,255
=========================================================================================================================
Energy (6.7%)
- -------------------------------------------------------------------------------------------------------------------------
30,900 Chesapeake Energy Corporation 249,054
12,700 Key Energy Services, Inc.* 127,889
17,400 Maverick Tube Corporation* 309,546
7,500 Newfield Exploration Company* 257,925
7,500 Patterson-UTI Energy, Inc.* 248,175
6,600 Pogo Producing Company 261,360
6,600 Precision Drilling Corporation* 226,908
16,500 Pride International, Inc.* 256,080
14,100 TETRA Technologies, Inc.* 375,060
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 2,311,997
=========================================================================================================================
Financials (20.9%)
- -------------------------------------------------------------------------------------------------------------------------
12,700 Affiliated Managers Group, Inc.* 588,137
18,300 Allegiant Bancorp, Inc. 314,943
8,000 AMB Property Corporation 218,400
10,500 American Capital Strategies, Ltd. 254,730
5,700 Bank of the Ozarks, Inc. 193,800
12,621 BOK Financial Corporation* 455,113
8,500 Corus Bankshares, Inc. 366,435
4,700 Downey Financial Corporation 206,330
6,700 Fidelity National Financial, Inc. 230,480
15,300 Greater Bay Bancorp 244,800
16,100 HCC Insurance Holdings, Inc. 442,750
9,500 I Shares Russell 2000 Index Fund 754,205
7,100 I Shares S&P Smallcap 600 Index Fund 703,468
7,700 IBERIABANK Corporation 335,335
6,900 IPC Holdings, Ltd. 237,015
7,000 Mills Corporation 223,720
28,600 Nara Bancorp, Inc. 421,593
4,400 Penns Woods Bancorp, Inc. 206,008
8,100 Platinum Underwriters Holdings, Ltd. 214,245
5,600 Protective Life Corporation 160,888
7,200 Reinsurance Group of America 206,280
6,900 SL Green Realty Corporation 222,387
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 7,201,062
=========================================================================================================================
Health Care (6.4%)
- -------------------------------------------------------------------------------------------------------------------------
8,600 Alpharma, Inc. 160,390
8,200 American Pharmaceutical Partners, Inc.* 191,470
11,300 Apria Healthcare Group, Inc.* 264,985
47,200 Bio-Technology General Corporation* 163,312
14,800 CONMED Corporation* 257,816
8,100 Cooper Companies, Inc. 225,990
16,200 D & K Healthcare Resources, Inc. 212,706
1,900 Medicis Pharmaceutical Corporation* 109,516
10,700 Omnicare, Inc. 283,764
7,000 Sybron Dental Specialties, Inc.* 142,450
11,100 United Surgical Partners International, Inc.* 205,683
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 2,218,082
=========================================================================================================================
Industrials (17.8%)
- -------------------------------------------------------------------------------------------------------------------------
9,600 A.O. Smith Corporation 286,272
3,100 Alliant Techsystems, Inc. 166,532
19,500 Allied Waste Industries, Inc.* 161,850
8,700 Arkansas Best Corporation 220,545
18,300 Atlantic Coast Airlines Holdings, Inc.* 152,805
22,800 Circor International, Inc. 372,780
15,800 Consolidated Graphics, Inc.* 301,780
4,400 Donaldson Company, Inc. 175,648
7,500 EDO Corporation 141,375
6,900 EMCOR Group, Inc.* 352,383
9,900 Fastenal Company 342,441
23,400 Griffon Corporation* 318,708
109,400 Hall, Kinion & Associates, Inc.* 191,450
8,300 HON INDUSTRIES, Inc. 245,514
9,400 IDEX Corporation 299,390
70,600 KForce, Inc.* 280,988
11,800 Mueller Industries, Inc.* 301,490
2,100 Oshkosh Truck Corporation 117,600
18,200 Regal-Beloit Corporation 312,130
22,300 Robbins & Myers, Inc. 383,337
10,200 SkyWest, Inc. 130,458
10,400 Stewart & Stevenson Services, Inc. 139,464
12,100 Thomas Industries, Inc. 325,490
14,500 Watson Wyatt & Company Holdings* 295,800
6,300 Werner Enterprises, Inc. 142,317
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 6,158,547
=========================================================================================================================
Information Technology (13.3%)
- -------------------------------------------------------------------------------------------------------------------------
14,200 Acxiom Corporation* 198,232
76,400 ADC Telecommunications, Inc.* 182,443
9,400 Advanced Fibre Communications, Inc.* 143,820
57,900 Artesyn Technologies, Inc.* 242,601
9,600 Autodesk, Inc. 149,376
18,300 Axcelis Technologies, Inc.* 103,944
11,600 Brooks Automation, Inc.* 98,252
45,100 CIBER, Inc.* 244,893
4,600 Cognos, Inc.* 124,844
9,800 Credence Systems Corporation* 69,580
3,100 Fair Isaac Corporation 161,448
13,400 Ingram Micro, Inc., Class A* 134,000
14,900 Integrated Device Technology, Inc.* 153,917
8,500 International Rectifier Corporation* 192,270
21,600 Ixia* 131,544
9,600 JDA Software Group, Inc.* 108,096
21,900 Legato Systems, Inc.* 129,648
13,700 Littelfuse, Inc.* 267,972
85,400 Management Network Group, Inc.* 104,188
17,100 Methode Electronics, Inc. 179,550
22,200 MoldFlow Corporation* 177,622
4,600 Novellus Systems, Inc.* 128,984
49,400 Parametric Technology Corporation* 163,020
8,500 Photronics, Inc.* 106,845
13,900 Plexus Corporation* 141,502
10,300 SPSS, Inc.* 127,514
8,900 Tech Data Corporation* 213,600
11,700 Tollgrade Communications, Inc.* 169,767
11,600 VeriSign, Inc.* 144,072
7,100 Vishay Intertechnology, Inc.* 88,750
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 4,582,294
=========================================================================================================================
Materials (3.4%)
- -------------------------------------------------------------------------------------------------------------------------
11,000 Lafarge North America, Inc. 350,350
9,200 MacDermid, Inc. 209,116
15,600 NOVA Chemicals Corporation 333,840
4,400 Peabody Energy Corporation 123,640
14,900 Wausau-Mosinee Paper Corporation 158,536
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 1,175,482
=========================================================================================================================
Utilities (3.5%)
- -------------------------------------------------------------------------------------------------------------------------
7,400 Atmos Energy Corporation 168,572
4,000 CH Energy Group, Inc. 168,200
6,100 Energen Corporation 200,080
6,900 Northwest Natural Gas Company 178,227
5,100 Piedmont Natural Gas Company, Inc. 190,536
6,400 Puget Energy, Inc. 135,168
9,600 UniSource Energy Corporation 171,168
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 1,211,951
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $29,951,738) 32,674,623
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (5.3%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$475,000 Federal National Mortgage Association 1.250% 5/1/2003 $475,000
1,366,875 The AAL Money Market Fund 0.840 N/A 1,366,875
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 1,841,875
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $31,793,613) $34,516,498
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield or, for securities purchased at a discount, the discount at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Mid Cap Stock Fund
Schedule of Investments as of April 30, 2003(a)
Shares Common Stock (96.8%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (16.1%)
- -------------------------------------------------------------------------------------------------------------------------
104,200 Abercrombie & Fitch Company* $3,426,096
92,000 American Axle & Manufacturing Holdings, Inc.* 2,292,640
175,400 Applebee's International, Inc. 4,805,960
284,100 Belo Corporation 6,395,091
165,400 Brinker International, Inc.* 5,251,450
84,000 CDW Computer Centers, Inc.* 3,581,760
51,500 Coach, Inc. 2,240,765
53,400 Entercom Communications Corporation* 2,594,706
204,900 Family Dollar Stores, Inc. 7,005,531
260,600 Hilton Hotels Corporation 3,471,192
129,400 Insight Communications Company, Inc.* 1,776,662
60,600 International Speedway Corporation* 2,382,186
103,300 KB Home 5,089,591
106,200 Lamar Advertising Company* 3,814,704
74,900 Lennar Corporation 4,062,576
281,800 Linens 'n Things, Inc.* 5,971,342
233,800 Macrovision Corporation* 4,131,246
177,300 Mattel, Inc. 3,854,502
201,300 MGM Mirage* 5,720,946
80,300 Michaels Stores, Inc.* 2,508,572
57,100 Pixar, Inc.* 3,334,069
220,800 Radio One, Inc.* 3,378,240
162,300 Reader's Digest Association, Inc. 1,947,600
121,300 Reebok International, Ltd.* 3,767,578
195,200 Ross Stores, Inc. 7,398,080
176,200 Ruby Tuesday, Inc. 3,471,140
8,960 Washington Post Company, Class B 6,531,840
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 110,206,065
=========================================================================================================================
Consumer Staples (3.6%)
- -------------------------------------------------------------------------------------------------------------------------
148,500 Dean Foods Company* 6,464,205
84,300 Hershey Foods Corporation 5,500,575
379,100 Hormel Foods Corporation 8,723,091
402,600 Tyson Foods, Inc. 3,877,038
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 24,564,909
=========================================================================================================================
Energy (9.5%)
- -------------------------------------------------------------------------------------------------------------------------
426,500 Chesapeake Energy Corporation 3,437,590
83,700 Cooper Cameron Corporation* 4,005,882
183,500 ENSCO International, Inc. 4,660,900
145,500 EOG Resources, Inc. 5,438,790
95,400 Murphy Oil Corporation 3,973,410
94,825 Nabors Industries, Ltd.* 3,717,140
106,700 Noble Corporation* 3,302,365
92,900 Patterson-UTI Energy, Inc.* 3,074,061
104,400 Precision Drilling Corporation* 3,589,272
234,800 Pride International, Inc.* 3,644,096
132,500 Smith International, Inc. 4,711,700
221,300 Valero Energy Corporation 8,132,775
215,500 Varco International, Inc.* 3,790,645
153,400 Weatherford International, Ltd.* 6,171,282
198,666 XTO Energy, Inc. 3,873,987
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 65,523,895
=========================================================================================================================
Financials (17.4%)
- -------------------------------------------------------------------------------------------------------------------------
119,600 AMB Property Corporation 3,265,080
407,600 Banknorth Group, Inc. 9,733,488
206,700 CIT Group, Inc. 4,210,479
212,800 City National Corporation 8,760,976
124,000 Compass Bancshares, Inc. 4,181,280
78,300 Countrywide Financial Corporation 5,293,080
76,016 Fidelity National Financial, Inc. 2,614,950
42,000 General Growth Properties, Inc. 2,336,040
216,100 Greater Bay Bancorp 3,457,600
138,800 GreenPoint Financial Corporation 6,629,088
332,000 LaBranche & Company, Inc. 5,504,560
108,400 Lincoln National Corporation 3,464,464
94,900 M&T Bank Corporation 8,016,203
267,300 National Commerce Financial Corporation 5,436,882
203,600 North Fork Bancorporation, Inc. 6,588,496
329,200 PMI Group, Inc. 10,145,944
198,300 Protective Life Corporation 5,697,159
106,900 Public Storage, Inc. 3,436,835
116,200 SEI Investments Company 3,059,546
249,600 TCF Financial Corporation 9,884,160
28,300 Willis Group Holdings, Ltd. 882,677
133,500 Zions Bancorporation 6,577,545
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 119,176,532
=========================================================================================================================
Health Care (14.2%)
- -------------------------------------------------------------------------------------------------------------------------
87,000 Anthem, Inc.* 5,971,680
120,000 Beckman Coulter, Inc. 4,664,400
92,100 Coventry Health Care, Inc.* 3,759,522
70,900 Edwards Lifesciences Corporation* 2,046,883
126,500 Express Scripts, Inc.* 7,458,440
187,100 Gilead Sciences, Inc.* 8,632,794
195,200 Health Net, Inc.* 5,092,768
50,900 Henry Schein, Inc.* 2,196,335
139,500 IDEC Pharmaceuticals Corporation* 4,568,625
619,775 IVAX Corporation* 9,959,784
134,100 MedImmune, Inc.* 4,729,707
268,000 Millennium Pharmaceuticals, Inc.* 2,948,000
216,700 Mylan Laboratories, Inc. 6,126,109
69,700 Patterson Dental Company* 2,799,849
129,100 Quest Diagnostics, Inc.* 7,713,725
214,200 Sicor, Inc.* 3,840,606
109,200 STERIS Corporation* 2,478,840
101,900 Triad Hospitals, Inc.* 2,242,819
148,900 Universal Health Services, Inc.* 5,757,963
93,400 Zimmer Holdings, Inc.* 4,380,460
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 97,369,309
=========================================================================================================================
Industrials (11.7%)
- -------------------------------------------------------------------------------------------------------------------------
76,925 Alliant Techsystems, Inc. 4,132,411
163,600 Allied Waste Industries, Inc.* 1,357,880
76,900 American Standard Companies, Inc.* 5,474,511
190,200 Ceridian Corporation* 2,653,290
220,300 CheckFree Corporation* 6,073,671
31,700 Donaldson Company, Inc. 1,265,464
124,200 DST Systems, Inc.* 3,812,940
129,800 Fastenal Company 4,489,782
187,000 Fiserv, Inc.* 5,505,280
116,700 L-3 Communications Holdings, Inc. 5,181,480
179,700 Manpower, Inc. 5,908,536
245,700 Nordson Corporation 6,206,382
67,100 Parker Hannifin Corporation 2,729,628
471,000 Republic Services, Inc.* 10,107,660
366,700 Shaw Group, Inc.* 4,272,055
199,200 SPX Corporation 6,732,960
65,200 Valassis Communications, Inc.* 1,734,320
60,500 W.W. Grainger, Inc. 2,792,075
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 80,430,325
=========================================================================================================================
Information Technology (12.7%)
- -------------------------------------------------------------------------------------------------------------------------
91,500 Adobe Systems, Inc. 3,162,240
284,000 Advanced Fibre Communications, Inc.* 4,345,200
168,600 Affiliated Computer Services, Inc.* 8,042,220
139,600 Agilent Technologies, Inc.* 2,236,392
193,400 Analog Devices, Inc.* 6,405,408
117,800 Apple Computer, Inc.* 1,672,760
116,700 Autodesk, Inc. 1,815,852
285,600 BEA Systems, Inc.* 3,058,776
233,100 BearingPoint, Inc.* 1,904,427
37,600 Cabot Microelectonics Corporation* 1,625,072
300,300 Cadence Design Systems, Inc.* 3,432,429
83,800 Electronic Arts, Inc.* 4,966,826
75,200 Fair Isaac Corporation 3,916,416
67,400 Harris Corporation 1,924,944
236,900 Lam Research Corporation* 3,442,157
373,300 Lawson Software, Inc.* 1,892,631
612,600 Legato Systems, Inc.* 3,626,592
118,500 McDATA Corporation* 1,253,730
254,550 Microchip Technology, Inc. 5,292,095
152,900 Network Associates, Inc.* 1,747,647
304,400 PerkinElmer, Inc. 3,019,648
40,800 QLogic Corporation* 1,794,792
242,500 RF Micro Devices, Inc.* 1,151,875
157,300 Storage Technology Corporation* 3,888,456
183,400 SunGard Data Systems, Inc.* 3,943,100
371,200 Symbol Technologies, Inc. 4,057,216
75,500 UTStarcom, Inc.* 1,643,711
60,000 Xilinx, Inc.* 1,624,200
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 86,886,812
=========================================================================================================================
Materials (3.6%)
- -------------------------------------------------------------------------------------------------------------------------
72,000 Bowater, Inc. 2,802,960
654,600 Domtar, Inc. 6,899,484
210,700 FMC Corporation* 3,817,884
194,800 Lafarge North America, Inc. 6,204,380
397,000 Sappi, Ltd. 4,902,950
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 24,627,658
=========================================================================================================================
Miscellaneous (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
38,800 S&P 400 Mid-Cap Depository Receipts 3,111,760
- -------------------------------------------------------------------------------------------------------------------------
Total Miscellaneous 3,111,760
=========================================================================================================================
Telecommunication Services (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
56,100 Telephone and Data Systems, Inc. 2,417,349
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 2,417,349
=========================================================================================================================
Utilities (7.3%)
- -------------------------------------------------------------------------------------------------------------------------
197,600 CINergy Corporation 6,746,064
177,600 DTE Energy Company 7,160,832
163,300 Great Plains Energy, Inc. 4,273,561
67,250 MDU Resources Group, Inc. 2,001,360
357,300 National Fuel Gas Company 8,382,258
129,000 NSTAR 5,572,800
325,000 Puget Energy, Inc. 6,864,000
382,700 Vectren Corporation 8,897,775
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 49,898,650
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $692,722,009) 664,213,264
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (3.2%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$4,800,000 Exxon Imperial U.S., Inc. 1.230% 5/2/2003 $4,799,836
4,800,000 Starfish Global Funding, LLC 1.260 5/6/2003 4,799,147
12,408,933 The AAL Money Market Fund 0.840 N/A 12,408,933
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 22,007,916
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $714,729,925) $686,221,180
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield or, for securities purchased at a discount, the discount at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Mid Cap Index Fund
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (97.4%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (16.9%)
- -------------------------------------------------------------------------------------------------------------------------
1,966 99 CENTS Only Stores* $57,918
2,675 Abercrombie & Fitch Company* 87,954
1,957 American Eagle Outfitters, Inc.* 34,248
1,500 Applebee's International, Inc. 41,100
1,886 ArvinMeritor, Inc. 29,837
580 Bandag, Inc. 20,213
1,795 Barnes & Noble, Inc.* 35,362
3,115 Belo Corporation 70,119
1,830 BJ's Wholesale Club, Inc.* 25,840
1,315 Blyth, Inc. 34,690
920 Bob Evans Farms, Inc. 23,340
2,165 Borders Group, Inc.* 34,640
720 BorgWarner, Inc. 42,242
2,690 Brinker International, Inc.* 85,408
2,050 Callaway Golf Company 28,557
2,800 CarMax, Inc.* 59,220
1,500 Catalina Marketing Corporation* 26,745
1,380 CBRL Group, Inc. 43,994
2,350 CDW Computer Centers, Inc.* 100,204
1,400 Cheesecake Factory, Inc.* 44,226
2,300 Chico's FAS, Inc. 55,982
1,340 Claire's Stores, Inc. 34,827
3,700 Clayton Homes, Inc. 45,917
2,500 Coach, Inc. 108,775
2,500 Copart, Inc.* 21,100
4,000 D.R. Horton, Inc. 94,800
3,102 Dollar Tree Stores, Inc.* 78,946
1,500 Emmis Communications Corporation* 28,455
1,400 Entercom Communications Corporation* 68,026
2,500 Extended Stay America, Inc.* 29,650
1,295 Federal Signal Corporation 22,378
1,500 Furniture Brands International, Inc.* 35,625
2,100 Gentex Corporation* 63,420
1,560 GTECH Holdings Corporation* 52,525
2,535 Harte-Hanks, Inc. 45,630
3,040 Hispanic Broadcasting Corporation* 77,976
1,455 International Speedway Corporation* 57,196
1,600 Krispy Kreme Doughnuts, Inc.* 51,968
1,875 Lear Corporation* 74,513
1,260 Lee Enterprises, Inc. 45,196
1,800 Lennar Corporation 97,632
1,300 Macrovision Corporation* 22,971
1,775 Mandalay Resort Group* 46,896
635 Media General, Inc. 34,900
1,900 Michaels Stores, Inc.* 59,356
940 Modine Manufacturing Company 18,988
1,820 Mohawk Industries, Inc.* 100,955
1,325 Neiman Marcus Group, Inc.* 42,466
2,145 Outback Steakhouse, Inc. 76,662
8,220 Park Place Entertainment Corporation* 61,157
2,025 Payless ShoeSource, Inc. 32,117
3,800 PETsMART, Inc.* 57,494
2,500 Pier 1 Imports, Inc. 46,400
2,615 Reader's Digest Association, Inc. 31,380
2,160 Ross Stores, Inc. 81,864
1,800 Ruby Tuesday, Inc. 35,460
3,935 Saks, Inc.* 35,218
1,110 Scholastic Corporation* 31,535
2,470 Six Flags, Inc.* 14,524
820 Superior Industries International, Inc. 32,439
1,000 Timberland Company* 49,990
1,900 Toll Brothers, Inc.* 44,175
1,405 Unifi, Inc.* 8,360
2,100 United Rentals, Inc.* 21,630
290 Washington Post Company, Class B 211,410
2,960 Westwood One, Inc.* 103,304
3,170 Williams-Sonoma, Inc. 82,040
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 3,500,085
=========================================================================================================================
Consumer Staples (5.0%)
- -------------------------------------------------------------------------------------------------------------------------
1,110 Church & Dwight Company, Inc. 34,932
2,500 Constellation Brands, Inc.* 67,025
2,538 Dean Foods Company* 110,479
2,605 Dial Corporation 54,262
1,020 Dreyer's Grand Ice Cream, Inc. 65,158
2,400 Energizer Holdings, Inc.* 69,168
3,825 Hormel Foods Corporation 88,013
1,170 Interstate Bakeries Corporation 12,250
1,395 J.M. Smucker Company 50,611
1,045 Lancaster Colony Corporation 44,653
1,000 Longs Drug Stores Corporation 15,490
4,110 PepsiAmericas, Inc. 51,334
1,280 Ruddick Corporation 17,037
1,310 Sensient Technologies Corporation 28,951
3,000 Smithfield Foods, Inc.* 58,800
1,403 Toostie Roll Industries, Inc. 40,659
9,692 Tyson Foods, Inc. 93,334
750 Universal Corporation 29,288
1,600 Whole Foods Market, Inc.* 94,976
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 1,026,420
=========================================================================================================================
Energy (6.8%)
- -------------------------------------------------------------------------------------------------------------------------
1,500 Cooper Cameron Corporation* 71,790
4,080 ENSCO International, Inc. 103,632
1,800 FMC Technologies, Inc.* 33,876
1,300 Forest Oil Corporation* 27,014
3,330 Grant Prideco, Inc.* 37,995
1,810 Hanover Compressor Company* 15,222
1,425 Helmerich & Payne, Inc. 36,665
2,570 Murphy Oil Corporation 107,041
2,300 National-Oilwell, Inc.* 48,277
1,590 Noble Energy, Inc. 52,788
870 Overseas Shipholding Group, Inc. 16,365
2,200 Patterson-UTI Energy, Inc.* 72,798
3,260 Pioneer Natural Resources Company* 77,979
1,700 Pogo Producing Company 67,320
3,700 Pride International, Inc.* 57,424
2,850 Smith International, Inc. 101,346
1,680 Tidewater, Inc. 45,192
3,180 Valero Energy Corporation 116,865
2,655 Varco International, Inc.* 46,701
3,630 Weatherford International, Ltd.* 146,035
900 Western Gas Resources, Inc. 33,012
5,200 XTO Energy, Inc. 101,400
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,416,737
=========================================================================================================================
Financials (19.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,175 A.G. Edwards, Inc. 64,880
1,465 Allmerica Financial Corporation* 22,415
2,300 AMB Property Corporation 62,790
1,900 American Financial Group, Inc. 42,142
4,200 AmeriCredit Corporation* 28,518
1,100 AmerUs Group Company 28,809
2,400 Arthur J. Gallagher & Company 59,976
2,096 Associated Banc-Corp 73,234
2,430 Astoria Financial Corporation 60,799
1,685 Bank of Hawaii Corporation 55,538
4,400 Banknorth Group, Inc. 105,072
1,900 Brown & Brown, Inc. 67,963
1,410 City National Corporation 58,050
3,400 Colonial BancGroup, Inc. 43,282
1,900 Commerce Bancorp, Inc. 77,273
3,575 Compass Bancshares, Inc. 120,549
9,890 E*TRADE Group, Inc.* 54,395
1,900 Eaton Vance Corporation 56,620
1,605 Everest Re Group, Ltd. 111,788
2,930 Fidelity National Financial, Inc. 100,792
2,000 First American Corporation 53,000
1,987 First Virginia Banks, Inc. 81,169
2,270 FirstMerit Corporation 46,535
1,325 GATX Corporation 24,963
1,400 Greater Bay Bancorp 22,400
2,725 GreenPoint Financial Corporation 130,146
1,700 HCC Insurance Holdings, Inc. 46,750
4,275 Hibernia Corporation 77,463
1,030 Horace Mann Educators Corporation 15,213
1,700 Hospitality Properties Trust 48,977
1,600 Independence Community Bank Corporation 41,840
1,500 IndyMac Bancorp, Inc. 33,420
1,312 Investment Technology Group, Inc.* 18,748
1,800 Investors Financial Services Corporation 39,258
1,600 LaBranche & Company, Inc. 26,528
1,795 Legg Mason, Inc. 97,469
1,600 Leucadia National Corporation 60,960
2,100 Liberty Property Trust 65,709
3,300 M&T Bank Corporation 278,734
1,600 Mack-Cali Realty Corporation 50,496
1,890 Mercantile Bankshares Corporation 72,463
1,300 MONY Group, Inc. 30,199
5,644 National Commerce Financial Corporation 114,799
1,900 Neuberger Berman, Inc. 58,330
2,700 New Plan Excel Realty Trust, Inc. 53,946
3,000 New York Community Bancorp, Inc. 104,160
1,615 Ohio Casualty Corporation* 20,228
3,285 Old Republic International Corporation 100,521
2,470 PMI Group, Inc. 76,125
1,855 Protective Life Corporation 53,294
1,315 Provident Financial Group, Inc. 31,100
2,600 Radian Group, Inc. 103,220
2,200 Roslyn Bancorp, Inc. 41,976
2,900 SEI Investments Company 76,357
1,100 Silicon Valley Bancshares* 25,718
7,180 Sovereign Bancorp, Inc. 110,931
800 StanCorp Financial Group, Inc. 42,960
2,010 TCF Financial Corporation 79,596
2,900 United Dominion Realty Trust, Inc. 48,401
1,815 Unitrin, Inc. 44,849
1,600 W.R. Berkley Corporation 74,304
2,200 Waddell & Reed Financial, Inc. 44,000
1,270 Webster Financial Corporation 47,676
925 Westamerica Bancorporation 39,868
1,770 Wilmington Trust Corporation 47,631
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 4,097,315
=========================================================================================================================
Health Care (13.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,500 AdvancePCS, Inc.* 75,150
2,895 Apogent Technologies, Inc.* 49,736
1,545 Apria Healthcare Group, Inc.* 36,230
1,850 Barr Laboratories, Inc. 102,860
1,710 Beckman Coulter, Inc. 66,468
1,200 Charles River Laboratories International, Inc.* 32,580
2,800 Community Health Systems, Inc.* 53,200
1,670 Covance, Inc.* 29,609
1,700 Coventry Health Care, Inc.* 69,394
3,200 Cytyc Corporation* 42,240
2,132 Dentsply International, Inc. 79,843
1,700 Edwards Lifesciences Corporation* 49,079
2,170 Express Scripts, Inc.* 127,943
2,650 First Health Group Corporation* 66,383
5,440 Gilead Sciences, Inc.* 251,002
3,450 Health Net, Inc.* 90,011
1,200 Henry Schein, Inc.* 51,780
1,730 Hillenbrand Industries, Inc. 86,327
2,270 ICN Pharmaceuticals, Inc. 19,863
4,200 IDEC Pharmaceuticals Corporation* 137,550
5,300 IVAX Corporation* 85,171
1,100 LifePoint Hospitals, Inc.* 21,472
2,930 Lincare Holdings, Inc.* 88,984
7,922 Millennium Pharmaceuticals, Inc.* 87,142
5,115 Mylan Laboratories, Inc. 144,601
2,585 Omnicare, Inc. 68,554
2,300 Oxford Health Plans, Inc.* 67,321
975 PacifiCare Health Systems, Inc.* 31,044
1,900 Patterson Dental Company* 76,323
1,830 Perrigo Company 28,109
900 Pharmaceutical Resources, Inc.* 39,555
2,400 Protein Design Labs, Inc.* 23,832
2,270 Sepracor, Inc.* 43,471
3,200 Sicor, Inc.* 57,376
1,880 STERIS Corporation* 42,676
2,100 Triad Hospitals, Inc.* 46,221
1,700 Universal Health Services, Inc.* 65,739
1,900 Varian Medical Systems, Inc.* 102,334
2,100 Vertex Pharmaceuticals, Inc.* 25,347
1,350 VISX, Inc.* 21,141
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 2,683,661
=========================================================================================================================
Industrials (12.7%)
- -------------------------------------------------------------------------------------------------------------------------
2,010 AGCO Corporation* 36,602
1,315 Airborne, Inc. 26,116
735 Alaska Air Group, Inc.* 13,105
1,150 Alexander & Baldwin, Inc. 30,717
2,330 ALLETE, Inc. 55,361
960 AMETEK, Inc. 36,192
710 Banta Corporation 22,046
3,300 BISYS Group, Inc.* 55,704
2,310 C.H. Robinson Worldwide, Inc. 84,985
1,300 Career Education Corporation* 78,169
865 Carlisle Companies, Inc. 39,236
4,100 Ceridian Corporation* 57,195
1,800 Certegy, Inc.* 44,982
2,170 CheckFree Corporation* 59,827
2,400 ChoicePoint, Inc. 84,672
1,415 CNF, Inc. 42,931
1,200 Corinthian Colleges, Inc. 54,948
1,345 CSG Systems International, Inc.* 14,163
1,895 DeVry, Inc.* 43,850
1,195 Donaldson Company, Inc. 47,704
3,290 DST Systems, Inc.* 101,003
2,100 Dun & Bradstreet Corporation* 79,380
1,300 Dycom Industries, Inc.* 14,352
1,000 Education Management Corporation* 48,820
1,300 EGL, Inc.* 20,852
2,900 Expeditors International of Washington, Inc. 105,441
2,070 Fastenal Company 71,601
1,500 Flowserve Corporation* 23,160
1,130 Granite Construction, Inc. 18,984
1,130 Harsco Corporation 38,951
1,980 Herman Miller, Inc. 34,630
1,615 HON INDUSTRIES, Inc. 47,772
1,655 Hubbell, Inc., Class B 53,126
1,090 J.B. Hunt Transport Services, Inc.* 37,660
1,520 Jacobs Engineering Group, Inc.* 62,548
990 Kelly Services, Inc. 22,919
965 Kennametal, Inc. 30,388
1,000 Korn/Ferry International* 6,880
2,650 L-3 Communications Holdings, Inc. 117,660
2,150 Manpower, Inc. 70,692
960 Nordson Corporation 24,250
1,415 Pentair, Inc. 54,534
1,405 Pittston Company 17,914
1,500 Precision Castparts Corporation 41,535
1,800 Quanta Services, Inc.* 6,210
4,500 Republic Services, Inc.* 96,570
1,260 Rollins, Inc. 30,517
275 Sequa Corporation* 8,459
1,605 Sotheby's Holdings, Inc.* 14,108
2,240 SPX Corporation 75,712
2,250 Swift Transportation Company, Inc.* 40,770
1,100 Sylvan Learning Systems, Inc.* 19,294
485 Tecumseh Products Company 19,516
1,135 Teleflex, Inc. 43,573
1,220 Trinity Industries, Inc. 20,191
1,475 Valassis Communications, Inc.* 39,235
2,415 Viad Corporation 48,566
1,140 Wallace Computer Services, Inc. 29,788
1,700 Werner Enterprises, Inc. 38,403
1,120 York International Corporation 26,768
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 2,631,237
=========================================================================================================================
Information Technology (11.7%)
- -------------------------------------------------------------------------------------------------------------------------
9,900 3Com Corporation* 51,480
1,800 Activision, Inc.* 27,540
2,445 Acxiom Corporation* 34,132
1,045 ADTRAN, Inc.* 42,302
2,300 Advanced Fibre Communications, Inc.* 35,190
900 Advent Software, Inc.* 11,331
3,650 Affiliated Computer Services, Inc.* 174,105
2,725 Arrow Electronics, Inc.* 45,998
6,615 Ascential Software Corporation* 25,402
12,790 Atmel Corporation* 23,534
3,260 Avnet, Inc.* 41,565
1,200 Avocent Corporation* 35,544
717 Cabot Microelectonics Corporation* 30,989
7,380 Cadence Design Systems, Inc.* 84,353
1,600 CommScope, Inc.* 13,712
1,600 Credence Systems Corporation* 11,360
2,000 Cree, Inc.* 39,900
3,340 Cypress Semiconductor Corporation* 29,125
1,990 Diebold, Inc. 79,560
1,400 Fair Isaac Corporation 72,912
3,200 Fairchild Semiconductor International, Inc.* 37,984
2,260 Gartner, Inc., Class B* 17,718
1,795 Harris Corporation 51,265
1,000 Imation Corporation* 34,300
1,000 InFocus Corporation* 4,490
2,805 Integrated Device Technology, Inc.* 28,976
1,800 International Rectifier Corporation* 40,716
1,300 Internet Security Systems, Inc.* 17,056
3,700 Intersil Corporation* 68,450
2,400 Jack Henry & Associates, Inc. 31,272
1,915 Keane, Inc.* 18,461
2,300 KEMET Corporation* 21,091
3,400 Lam Research Corporation* 49,402
3,100 Lattice Semiconductor Corporation* 26,908
3,130 Legato Systems, Inc.* 18,530
1,300 LTX Corporation* 8,775
1,700 Macromedia, Inc.* 21,437
3,100 McDATA Corporation* 32,798
1,750 Mentor Graphics Corporation* 18,235
2,500 Micrel, Inc.* 29,275
5,560 Microchip Technology, Inc. 115,592
2,825 MPS Group, Inc.* 19,069
1,400 National Instruments Corporation* 44,912
4,295 Network Associates, Inc.* 49,092
1,000 Newport Corporation* 12,921
1,800 Overture Services, Inc.* 19,260
1,200 Plantronics, Inc.* 22,200
1,100 Plexus Corporation* 11,198
2,690 Polycom, Inc.* 26,416
1,800 Powerwave Technologies, Inc.* 7,236
4,680 Quantum Corporation* 16,146
1,400 Retek, Inc.* 8,750
1,855 Reynolds & Reynolds Company 53,443
5,000 RF Micro Devices, Inc.* 23,750
1,500 RSA Security, Inc.* 14,385
1,900 SanDisk Corporation* 45,980
2,000 Semtech Corporation* 31,800
1,400 Silicon Laboratories, Inc.* 39,830
2,960 Storage Technology Corporation* 73,171
2,600 Sybase, Inc.* 33,280
2,100 Synopsys, Inc.* 102,144
1,545 Tech Data Corporation* 37,080
2,100 Titan Corporation* 16,863
885 Transaction Systems Architects, Inc.* 6,151
3,615 TriQuint Semiconductor, Inc.* 12,689
900 Varian, Inc.* 28,449
4,395 Vishay Intertechnology, Inc.* 54,938
2,100 Wind River Systems, Inc.* 6,951
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 2,420,869
=========================================================================================================================
Materials (4.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,995 Airgas, Inc.* 40,359
2,940 AK Steel Holding Corporation* 8,585
1,180 Albemarle Corporation 31,860
1,400 Arch Coal, Inc. 25,312
1,545 Bowater, Inc. 60,147
1,675 Cabot Corporation 46,682
580 Carpenter Technology Corporation 7,575
3,120 Crompton Corporation 20,030
1,065 Cytec Industries, Inc.* 34,091
1,090 Ferro Corporation 25,768
900 FMC Corporation* 16,308
1,140 Glatfelter 13,053
3,080 IMC Global, Inc. 27,905
1,320 Longview Fibre Company 10,072
1,470 Lubrizol Corporation 46,467
4,410 Lyondell Chemical Company 64,166
1,305 Martin Marietta Materials, Inc. 38,589
570 Minerals Technologies, Inc. 25,223
1,585 Olin Corporation 28,720
2,900 Packaging Corporation of America* 54,549
1,400 Peabody Energy Corporation 39,340
800 Potlatch Corporation 19,080
745 Rayonier, Inc. 37,518
3,115 RPM International, Inc. 38,501
2,675 Sonoco Products Company 58,449
1,400 Valspar Corporation 60,466
1,420 Wausau-Mosinee Paper Corporation 15,109
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 893,924
=========================================================================================================================
Telecommunication Services (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
5,960 Broadwing, Inc.* 27,595
1,500 Price Communications Corporation* 18,315
1,635 Telephone and Data Systems, Inc. 70,452
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 116,362
=========================================================================================================================
Utilities (6.6%)
- -------------------------------------------------------------------------------------------------------------------------
1,685 AGL Resources, Inc. 43,355
2,475 Alliant Energy Corporation 43,461
4,995 Aquila, Inc. 13,886
870 Black Hills Corporation 24,778
3,445 DPL, Inc. 47,679
2,050 DQE, Inc. 27,880
3,965 Energy East Corporation 72,242
1,700 Equitable Resources, Inc. 65,314
1,930 Great Plains Energy, Inc. 50,508
985 Hawaiian Electric Industries, Inc. 40,730
1,025 IDACORP, Inc. 26,230
2,000 MDU Resources Group, Inc. 59,520
2,170 National Fuel Gas Company 50,908
3,725 Northeast Utilities 55,577
1,515 NSTAR 65,448
2,165 OGE Energy Corporation 38,862
2,000 ONEOK, Inc. 37,940
4,532 Pepco Holdings, Inc. 77,860
1,900 Philadelphia Suburban Corporation 43,035
1,030 PNM Resources, Inc. 22,856
2,525 Puget Energy, Inc. 53,328
2,305 Questar Corporation 69,611
3,090 SCANA Corporation 98,077
2,770 Sierra Pacific Resources* 10,221
1,840 Vectren Corporation 42,780
1,900 Westar Energy, Inc. 26,714
1,380 WGL Holdings, Inc. 37,232
3,210 Wisconsin Energy Corporation 84,519
900 WPS Resources Corporation 36,270
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 1,366,821
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $22,533,541) 20,153,431
=========================================================================================================================
Shares Short-Term Investments (2.6%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
531,385 The AAL Money Market Fund(c) 0.840% N/A $531,385
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 531,385
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $23,064,926) $20,684,816
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield.
(c) At April 30, 2003, $29,400 in cash was pledged as the initial margin deposit and $531,385 of The AAL Money Market Fund was pledged as collateral to cover open financial futures contracts as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- ----------------------------------------------------------------------------------------------------------------------------
S&P 400 Mini Futures 13 June 2003 Long $570,375 $537,361 $33,014
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Mid Cap Index Fund II
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (98.3%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (16.9%)
- -------------------------------------------------------------------------------------------------------------------------
3,000 99 CENTS Only Stores* $88,380
4,170 Abercrombie & Fitch Company* 137,110
3,000 American Eagle Outfitters, Inc.* 52,500
2,400 Applebee's International, Inc. 65,760
2,917 ArvinMeritor, Inc. 46,147
880 Bandag, Inc. 30,668
2,760 Barnes & Noble, Inc.* 54,372
4,810 Belo Corporation 108,273
2,920 BJ's Wholesale Club, Inc.* 41,230
2,010 Blyth, Inc. 53,024
1,510 Bob Evans Farms, Inc. 38,309
3,360 Borders Group, Inc.* 53,760
1,220 BorgWarner, Inc. 71,577
4,175 Brinker International, Inc.* 132,556
3,250 Callaway Golf Company 45,273
4,400 CarMax, Inc.* 93,060
2,300 Catalina Marketing Corporation* 41,009
2,100 CBRL Group, Inc. 66,948
3,640 CDW Computer Centers, Inc.* 155,210
2,200 Cheesecake Factory, Inc.* 69,498
3,600 Chico's FAS, Inc. 87,624
2,130 Claire's Stores, Inc. 55,359
5,770 Clayton Homes, Inc. 71,606
3,900 Coach, Inc. 169,689
3,900 Copart, Inc.* 32,916
6,250 D.R. Horton, Inc. 148,125
4,870 Dollar Tree Stores, Inc.* 123,942
2,300 Emmis Communications Corporation* 43,631
2,200 Entercom Communications Corporation* 106,898
4,000 Extended Stay America, Inc.* 47,440
1,980 Federal Signal Corporation 34,214
2,420 Furniture Brands International, Inc.* 57,475
3,300 Gentex Corporation* 99,660
2,400 GTECH Holdings Corporation* 80,808
3,920 Harte-Hanks, Inc. 70,560
4,720 Hispanic Broadcasting Corporation* 121,068
2,350 International Speedway Corporation* 92,379
2,400 Krispy Kreme Doughnuts, Inc.* 77,952
2,860 Lear Corporation* 113,656
1,970 Lee Enterprises, Inc. 70,664
2,800 Lennar Corporation 151,872
2,000 Macrovision Corporation* 35,340
2,870 Mandalay Resort Group* 75,825
1,010 Media General, Inc. 55,510
2,900 Michaels Stores, Inc.* 90,596
1,450 Modine Manufacturing Company 29,290
2,860 Mohawk Industries, Inc.* 158,644
2,110 Neiman Marcus Group, Inc.* 67,626
3,260 Outback Steakhouse, Inc. 116,512
12,880 Park Place Entertainment Corporation* 95,827
2,970 Payless ShoeSource, Inc. 47,104
5,900 PETsMART, Inc.* 89,267
4,000 Pier 1 Imports, Inc. 74,240
4,190 Reader's Digest Association, Inc. 50,280
3,350 Ross Stores, Inc. 126,965
2,700 Ruby Tuesday, Inc. 53,190
6,110 Saks, Inc.* 54,685
1,680 Scholastic Corporation* 47,729
3,970 Six Flags, Inc.* 23,344
1,220 Superior Industries International, Inc. 48,263
1,600 Timberland Company* 79,984
3,000 Toll Brothers, Inc.* 69,750
2,280 Unifi, Inc.* 13,566
3,200 United Rentals, Inc.* 32,960
410 Washington Post Company, Class B 298,890
4,550 Westwood One, Inc.* 158,795
4,960 Williams-Sonoma, Inc. 128,365
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 5,424,749
=========================================================================================================================
Consumer Staples (5.0%)
- -------------------------------------------------------------------------------------------------------------------------
1,720 Church & Dwight Company, Inc. 54,128
3,900 Constellation Brands, Inc.* 104,559
3,942 Dean Foods Company* 171,595
4,100 Dial Corporation 85,403
1,540 Dreyer's Grand Ice Cream, Inc. 98,375
3,750 Energizer Holdings, Inc.* 108,075
6,000 Hormel Foods Corporation 138,060
1,860 Interstate Bakeries Corporation 19,474
2,188 J.M. Smucker Company 79,381
1,530 Lancaster Colony Corporation 65,377
1,600 Longs Drug Stores Corporation 24,784
6,460 PepsiAmericas, Inc. 80,685
1,990 Ruddick Corporation 26,487
2,020 Sensient Technologies Corporation 44,642
4,700 Smithfield Foods, Inc.* 92,120
2,246 Toostie Roll Industries, Inc. 65,089
15,122 Tyson Foods, Inc. 145,625
1,140 Universal Corporation 44,517
2,500 Whole Foods Market, Inc.* 148,400
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 1,596,776
=========================================================================================================================
Energy (6.9%)
- -------------------------------------------------------------------------------------------------------------------------
2,400 Cooper Cameron Corporation* 114,864
6,470 ENSCO International, Inc. 164,338
2,800 FMC Technologies, Inc.* 52,696
2,000 Forest Oil Corporation* 41,560
5,120 Grant Prideco, Inc.* 58,419
2,790 Hanover Compressor Company* 23,464
2,120 Helmerich & Payne, Inc. 54,548
3,960 Murphy Oil Corporation 164,934
3,600 National-Oilwell, Inc.* 75,564
2,470 Noble Energy, Inc. 82,004
1,490 Overseas Shipholding Group, Inc. 28,027
3,500 Patterson-UTI Energy, Inc.* 115,815
5,050 Pioneer Natural Resources Company* 120,796
2,700 Pogo Producing Company 106,920
5,700 Pride International, Inc.* 88,464
4,360 Smith International, Inc. 155,042
2,610 Tidewater, Inc. 70,209
4,970 Valero Energy Corporation 182,648
4,180 Varco International, Inc.* 73,526
5,620 Weatherford International, Ltd.* 226,093
1,400 Western Gas Resources, Inc. 51,352
8,000 XTO Energy, Inc. 156,000
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 2,207,283
=========================================================================================================================
Financials (20.0%)
- -------------------------------------------------------------------------------------------------------------------------
3,460 A.G. Edwards, Inc. 103,212
2,260 Allmerica Financial Corporation* 34,578
3,600 AMB Property Corporation 98,280
3,000 American Financial Group, Inc. 66,540
6,600 AmeriCredit Corporation* 44,814
1,700 AmerUs Group Company 44,523
3,800 Arthur J. Gallagher & Company 94,962
3,219 Associated Banc-Corp 112,472
3,780 Astoria Financial Corporation 94,576
2,670 Bank of Hawaii Corporation 88,003
6,950 Banknorth Group, Inc. 165,966
3,000 Brown & Brown, Inc. 107,310
2,200 City National Corporation 90,574
5,300 Colonial BancGroup, Inc. 67,469
2,900 Commerce Bancorp, Inc. 117,943
5,520 Compass Bancshares, Inc. 186,134
15,570 E*TRADE Group, Inc.* 85,635
3,000 Eaton Vance Corporation 89,400
2,490 Everest Re Group, Ltd. 173,429
4,500 Fidelity National Financial, Inc. 154,800
3,100 First American Corporation 82,150
3,100 First Virginia Banks, Inc. 126,635
3,650 FirstMerit Corporation 74,825
2,100 GATX Corporation 39,564
2,200 Greater Bay Bancorp 35,200
4,270 GreenPoint Financial Corporation 203,935
2,700 HCC Insurance Holdings, Inc. 74,250
6,760 Hibernia Corporation 122,491
1,750 Horace Mann Educators Corporation 25,848
2,700 Hospitality Properties Trust 77,787
2,500 Independence Community Bank Corporation 65,375
2,400 IndyMac Bancorp, Inc. 53,472
2,040 Investment Technology Group, Inc.* 29,152
2,800 Investors Financial Services Corporation 61,068
2,500 LaBranche & Company, Inc. 41,450
2,830 Legg Mason, Inc. 153,669
2,500 Leucadia National Corporation 95,250
3,300 Liberty Property Trust 103,257
5,100 M&T Bank Corporation 430,786
2,500 Mack-Cali Realty Corporation 78,900
2,980 Mercantile Bankshares Corporation 114,253
2,000 MONY Group, Inc. 46,460
8,820 National Commerce Financial Corporation 179,399
3,050 Neuberger Berman, Inc. 93,635
4,200 New Plan Excel Realty Trust, Inc. 83,916
4,600 New York Community Bancorp, Inc. 159,712
2,610 Ohio Casualty Corporation* 32,690
5,210 Old Republic International Corporation 159,426
3,940 PMI Group, Inc. 121,431
2,950 Protective Life Corporation 84,754
2,110 Provident Financial Group, Inc. 49,902
4,000 Radian Group, Inc. 158,800
3,400 Roslyn Bancorp, Inc. 64,872
4,600 SEI Investments Company 121,118
1,700 Silicon Valley Bancshares* 39,746
11,220 Sovereign Bancorp, Inc. 173,349
1,300 StanCorp Financial Group, Inc. 69,810
3,190 TCF Financial Corporation 126,324
4,600 United Dominion Realty Trust, Inc. 76,774
2,890 Unitrin, Inc. 71,412
2,400 W.R. Berkley Corporation 111,456
3,400 Waddell & Reed Financial, Inc. 68,000
1,950 Webster Financial Corporation 73,203
1,510 Westamerica Bancorporation 65,081
2,840 Wilmington Trust Corporation 76,424
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 6,417,631
=========================================================================================================================
Health Care (13.1%)
- -------------------------------------------------------------------------------------------------------------------------
3,900 AdvancePCS, Inc.* 117,234
4,490 Apogent Technologies, Inc.* 77,138
2,340 Apria Healthcare Group, Inc.* 54,873
2,850 Barr Laboratories, Inc. 158,460
2,700 Beckman Coulter, Inc. 104,949
1,900 Charles River Laboratories International, Inc.* 51,585
4,300 Community Health Systems, Inc.* 81,700
2,590 Covance, Inc.* 45,921
2,600 Coventry Health Care, Inc.* 106,132
4,900 Cytyc Corporation* 64,680
3,360 Dentsply International, Inc. 125,832
2,590 Edwards Lifesciences Corporation* 74,773
3,340 Express Scripts, Inc.* 196,926
4,120 First Health Group Corporation* 103,206
8,520 Gilead Sciences, Inc.* 393,113
5,340 Health Net, Inc.* 139,321
1,900 Henry Schein, Inc.* 81,985
2,730 Hillenbrand Industries, Inc. 136,227
3,570 ICN Pharmaceuticals, Inc. 31,238
6,640 IDEC Pharmaceuticals Corporation* 217,460
8,325 IVAX Corporation* 133,783
1,700 LifePoint Hospitals, Inc.* 33,184
4,600 Lincare Holdings, Inc.* 139,702
12,338 Millennium Pharmaceuticals, Inc.* 135,718
7,950 Mylan Laboratories, Inc. 224,747
4,080 Omnicare, Inc. 108,202
3,600 Oxford Health Plans, Inc.* 105,372
1,500 PacifiCare Health Systems, Inc.* 47,760
3,000 Patterson Dental Company* 120,510
2,920 Perrigo Company 44,851
1,400 Pharmaceutical Resources, Inc.* 61,530
3,800 Protein Design Labs, Inc.* 37,734
3,620 Sepracor, Inc.* 69,323
5,000 Sicor, Inc.* 89,650
2,970 STERIS Corporation* 67,419
3,200 Triad Hospitals, Inc.* 70,432
2,600 Universal Health Services, Inc.* 100,542
3,000 Varian Medical Systems, Inc.* 161,580
3,200 Vertex Pharmaceuticals, Inc.* 38,624
2,220 VISX, Inc.* 34,765
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 4,188,181
=========================================================================================================================
Industrials (12.8%)
- -------------------------------------------------------------------------------------------------------------------------
3,210 AGCO Corporation* 58,454
2,020 Airborne, Inc. 40,117
1,120 Alaska Air Group, Inc.* 19,970
1,750 Alexander & Baldwin, Inc. 46,743
3,630 ALLETE, Inc. 86,249
1,470 AMETEK, Inc. 55,419
1,110 Banta Corporation 34,466
5,100 BISYS Group, Inc.* 86,088
3,620 C.H. Robinson Worldwide, Inc. 133,180
2,000 Career Education Corporation* 120,260
1,360 Carlisle Companies, Inc. 61,690
6,400 Ceridian Corporation* 89,280
2,900 Certegy, Inc.* 72,471
3,390 CheckFree Corporation* 93,462
3,633 ChoicePoint, Inc. 128,172
2,110 CNF, Inc. 64,017
1,900 Corinthian Colleges, Inc. 87,001
2,140 CSG Systems International, Inc.* 22,534
2,990 DeVry, Inc.* 69,189
1,890 Donaldson Company, Inc. 75,449
5,160 DST Systems, Inc.* 158,412
3,200 Dun & Bradstreet Corporation* 120,960
2,000 Dycom Industries, Inc.* 22,080
1,500 Education Management Corporation* 73,230
2,000 EGL, Inc.* 32,080
4,500 Expeditors International of Washington, Inc. 163,616
3,240 Fastenal Company 112,072
2,320 Flowserve Corporation* 35,821
1,745 Granite Construction, Inc. 29,316
1,740 Harsco Corporation 59,978
3,170 Herman Miller, Inc. 55,443
2,510 HON INDUSTRIES, Inc. 74,246
2,530 Hubbell, Inc., Class B 81,213
1,700 J.B. Hunt Transport Services, Inc.* 58,735
2,340 Jacobs Engineering Group, Inc.* 96,291
1,500 Kelly Services, Inc. 34,725
1,560 Kennametal, Inc. 49,124
1,600 Korn/Ferry International* 11,008
4,060 L-3 Communications Holdings, Inc. 180,264
3,340 Manpower, Inc. 109,819
1,480 Nordson Corporation 37,385
2,110 Pentair, Inc. 81,319
2,240 Pittston Company 28,560
2,320 Precision Castparts Corporation 64,241
2,890 Quanta Services, Inc.* 9,971
7,000 Republic Services, Inc.* 150,220
1,875 Rollins, Inc. 45,413
490 Sequa Corporation* 15,072
2,600 Sotheby's Holdings, Inc.* 22,854
3,440 SPX Corporation 116,272
3,530 Swift Transportation Company, Inc.* 63,964
1,700 Sylvan Learning Systems, Inc.* 29,818
860 Tecumseh Products Company 34,606
1,720 Teleflex, Inc. 66,031
1,930 Trinity Industries, Inc. 31,942
2,260 Valassis Communications, Inc.* 60,116
3,790 Viad Corporation 76,217
1,840 Wallace Computer Services, Inc. 48,079
2,700 Werner Enterprises, Inc. 60,993
1,720 York International Corporation 41,108
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 4,086,825
=========================================================================================================================
Information Technology (11.9%)
- -------------------------------------------------------------------------------------------------------------------------
15,500 3Com Corporation* 80,600
2,800 Activision, Inc.* 42,840
3,830 Acxiom Corporation* 53,467
1,630 ADTRAN, Inc.* 65,982
3,600 Advanced Fibre Communications, Inc.* 55,080
1,400 Advent Software, Inc.* 17,626
5,740 Affiliated Computer Services, Inc.* 273,798
4,220 Arrow Electronics, Inc.* 71,234
10,380 Ascential Software Corporation* 39,859
20,060 Atmel Corporation* 36,910
5,140 Avnet, Inc.* 65,535
1,960 Avocent Corporation* 58,055
1,115 Cabot Microelectonics Corporation* 48,190
11,580 Cadence Design Systems, Inc.* 132,359
2,530 CommScope, Inc.* 21,682
2,600 Credence Systems Corporation* 18,460
3,100 Cree, Inc.* 61,845
5,310 Cypress Semiconductor Corporation* 46,303
3,100 Diebold, Inc. 123,938
2,200 Fair Isaac Corporation 114,576
5,000 Fairchild Semiconductor International, Inc.* 59,350
3,440 Gartner, Inc., Class B* 26,970
2,890 Harris Corporation 82,538
1,500 Imation Corporation* 51,450
1,600 InFocus Corporation* 7,184
4,390 Integrated Device Technology, Inc.* 45,349
2,800 International Rectifier Corporation* 63,336
2,100 Internet Security Systems, Inc.* 27,552
5,900 Intersil Corporation* 109,150
3,700 Jack Henry & Associates, Inc. 48,211
3,000 Keane, Inc.* 28,920
3,700 KEMET Corporation* 33,929
5,400 Lam Research Corporation* 78,462
4,800 Lattice Semiconductor Corporation* 41,664
4,940 Legato Systems, Inc.* 29,245
2,100 LTX Corporation* 14,175
2,620 Macromedia, Inc.* 33,038
4,900 McDATA Corporation* 51,842
2,840 Mentor Graphics Corporation* 29,593
3,910 Micrel, Inc.* 45,786
8,735 Microchip Technology, Inc. 181,601
4,420 MPS Group, Inc.* 29,835
2,200 National Instruments Corporation* 70,576
6,680 Network Associates, Inc.* 76,352
1,600 Newport Corporation* 20,674
2,800 Overture Services, Inc.* 29,960
1,900 Plantronics, Inc.* 35,150
1,800 Plexus Corporation* 18,324
4,200 Polycom, Inc.* 41,244
2,820 Powerwave Technologies, Inc.* 11,336
7,360 Quantum Corporation* 25,392
2,200 Retek, Inc.* 13,750
2,950 Reynolds & Reynolds Company 84,990
7,800 RF Micro Devices, Inc.* 37,050
2,400 RSA Security, Inc.* 23,016
3,000 SanDisk Corporation* 72,600
3,160 Semtech Corporation* 50,244
2,200 Silicon Laboratories, Inc.* 62,590
4,650 Storage Technology Corporation* 114,948
4,060 Sybase, Inc.* 51,968
3,190 Synopsys, Inc.* 155,162
2,440 Tech Data Corporation* 58,560
3,330 Titan Corporation* 26,740
1,480 Transaction Systems Architects, Inc.* 10,286
5,679 TriQuint Semiconductor, Inc.* 19,933
1,500 Varian, Inc.* 47,415
6,870 Vishay Intertechnology, Inc.* 85,875
3,400 Wind River Systems, Inc.* 11,254
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 3,802,908
=========================================================================================================================
Materials (4.4%)
- -------------------------------------------------------------------------------------------------------------------------
3,090 Airgas, Inc.* 62,511
4,640 AK Steel Holding Corporation* 13,549
1,790 Albemarle Corporation 48,330
2,200 Arch Coal, Inc. 39,776
2,440 Bowater, Inc. 94,989
2,670 Cabot Corporation 74,413
890 Carpenter Technology Corporation 11,623
4,870 Crompton Corporation 31,265
1,650 Cytec Industries, Inc.* 52,817
1,690 Ferro Corporation 39,952
1,500 FMC Corporation* 27,180
1,860 Glatfelter 21,297
4,870 IMC Global, Inc. 44,122
2,140 Longview Fibre Company 16,328
2,260 Lubrizol Corporation 71,439
6,800 Lyondell Chemical Company 98,940
2,100 Martin Marietta Materials, Inc. 62,097
870 Minerals Technologies, Inc. 38,498
2,480 Olin Corporation 44,938
4,500 Packaging Corporation of America* 84,645
2,300 Peabody Energy Corporation 64,630
1,200 Potlatch Corporation 28,620
1,230 Rayonier, Inc. 61,943
4,890 RPM International, Inc. 60,440
4,140 Sonoco Products Company 90,459
2,160 Valspar Corporation 93,290
2,140 Wausau-Mosinee Paper Corporation 22,770
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 1,400,861
=========================================================================================================================
Telecommunication Services (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
9,410 Broadwing, Inc.* 43,568
2,300 Price Communications Corporation* 28,083
2,510 Telephone and Data Systems, Inc. 108,156
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 179,807
=========================================================================================================================
Utilities (6.7%)
- -------------------------------------------------------------------------------------------------------------------------
2,660 AGL Resources, Inc. 68,442
3,870 Alliant Energy Corporation 67,957
7,790 Aquila, Inc. 21,656
1,380 Black Hills Corporation 39,302
5,420 DPL, Inc. 75,013
3,170 DQE, Inc. 43,112
6,250 Energy East Corporation 113,875
2,700 Equitable Resources, Inc. 103,734
2,930 Great Plains Energy, Inc. 76,678
1,570 Hawaiian Electric Industries, Inc. 64,920
1,620 IDACORP, Inc. 41,456
3,100 MDU Resources Group, Inc. 92,256
3,460 National Fuel Gas Company 81,172
5,760 Northeast Utilities 85,939
2,270 NSTAR 98,064
3,360 OGE Energy Corporation 60,312
3,100 ONEOK, Inc. 58,807
7,055 Pepco Holdings, Inc. 121,205
2,900 Philadelphia Suburban Corporation 65,685
1,640 PNM Resources, Inc. 36,392
4,020 Puget Energy, Inc. 84,902
3,580 Questar Corporation 108,116
4,790 SCANA Corporation 152,035
4,370 Sierra Pacific Resources* 16,125
2,920 Vectren Corporation 67,890
3,000 Westar Energy, Inc. 42,180
2,090 WGL Holdings, Inc. 56,388
5,020 Wisconsin Energy Corporation 132,177
1,400 WPS Resources Corporation 56,420
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 2,132,210
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $35,508,539) 31,437,231
=========================================================================================================================
Shares Short-Term Investments (1.7%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
535,981 The AAL Money Market Fund(c) 0.840% N/A $535,981
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 535,981
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $36,044,520) $31,973,212
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield.
(c) At April 30, 2003, $29,400 in cash was pledged as the initial margin deposit and $535,981 of The AAL Money Market Fund was pledged as collateral to cover open financial futures contracts as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- --------------------------------------------------------------------------------------------------------------------------
S&P 400 Mini Futures 8 June 2003 Long $351,000 $331,642 $19,358
S&P 400 Futures 1 June 2003 Long 219,376 198,119 21,257
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL International Fund
Schedule of Investments as of April 30, 2003(a)
Shares Common Stock (98.0%) Value
- -------------------------------------------------------------------------------------------------------------------------
Australia (1.9%)
- -------------------------------------------------------------------------------------------------------------------------
457,057 BHP Billiton, Ltd.* $2,584,634
1 BHP Steel Ltd.* 2
- -------------------------------------------------------------------------------------------------------------------------
Total Australia 2,584,636
=========================================================================================================================
Belgium (1.7%)
- -------------------------------------------------------------------------------------------------------------------------
135,785 Fortis* 2,261,063
- -------------------------------------------------------------------------------------------------------------------------
Total Belgium 2,261,063
=========================================================================================================================
France (14.9%)
- -------------------------------------------------------------------------------------------------------------------------
65,221 Accor SA* 2,149,527
36,165 Aventis SA* 1,836,908
65,516 Carrefour SA* 2,849,507
56,598 France Telecom SA* 1,307,565
25,761 L'Oreal SA* 1,841,509
13,131 Pernod-Richard SA* 1,152,626
21,350 Pinault-Printemps-Redoute SA* 1,491,641
36,942 Sanofi-Synthelabo SA* 2,203,739
62,756 Suez SA* 1,021,886
23,288 Total Fina Elf SA* 3,053,951
41,988 Valeo SA* 1,202,937
- -------------------------------------------------------------------------------------------------------------------------
Total France 20,111,796
=========================================================================================================================
Germany (1.6%)
- -------------------------------------------------------------------------------------------------------------------------
60,239 Volkswagen AG* 2,111,054
- -------------------------------------------------------------------------------------------------------------------------
Total Germany 2,111,054
=========================================================================================================================
Hong Kong (2.3%)
- -------------------------------------------------------------------------------------------------------------------------
837,000 China Mobile (Hong Kong), Ltd.* 1,679,581
281,000 Sun Hung Kai Properties, Ltd.* 1,318,708
15,500 Swire Pacific Limit* 61,412
- -------------------------------------------------------------------------------------------------------------------------
Total Hong Kong 3,059,701
=========================================================================================================================
Italy (11.2%)
- -------------------------------------------------------------------------------------------------------------------------
913,100 Banca Intesa SPA* 2,364,276
5,256 Deutsche Boerse* 244,029
241,091 Eni SPA* 3,436,085
13,835 Gucci Group NV 1,327,330
510,966 Mediaset SPA* 4,368,303
402,204 Telecom Italia Mobile SPA* 1,894,309
172,693 Telecom Italia SPA* 1,410,840
- -------------------------------------------------------------------------------------------------------------------------
Total Italy 15,045,172
=========================================================================================================================
Japan (15.7%)
- -------------------------------------------------------------------------------------------------------------------------
191,000 Bridgestone Corporation* 2,166,887
65,000 Canon, Inc.* 2,627,033
349 East Japan Railway Company* 1,580,245
59,700 Honda Motor Company* 1,977,318
49,000 Ito-Yokado Company, Ltd.* 1,152,482
49,900 JFE Holdings, Inc.* 601,260
206,000 Matsushita Electric Industrial Company, Ltd.* 1,640,953
532,200 Nissan Motor Company, Ltd.* 4,083,205
651 NTT DoCoMo, Inc.* 1,342,831
20,400 ORIX Corporation* 932,249
16,590 Rohm Company, Ltd.* 1,709,635
43,600 Shin-Etsu Chemical Company, Ltd.* 1,305,148
- -------------------------------------------------------------------------------------------------------------------------
Total Japan 21,119,246
=========================================================================================================================
Mexico (0.9%)
- -------------------------------------------------------------------------------------------------------------------------
41,784 Telefonos de Mexico SA de CV, Class L ADR 1,262,295
- -------------------------------------------------------------------------------------------------------------------------
Total Mexico 1,262,295
=========================================================================================================================
Netherlands (7.5%)
- -------------------------------------------------------------------------------------------------------------------------
177,194 Aegon NV* 1,801,606
36,955 Heineken NV* 1,372,202
270,924 Koninklijke (Royal) KPN NV* 1,802,128
22,530 Unilever NV* 1,419,440
129,655 VNU NV* 3,762,310
- -------------------------------------------------------------------------------------------------------------------------
Total Netherlands 10,157,686
=========================================================================================================================
Singapore (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
296,000 United Overseas Bank, Ltd.* 1,733,724
- -------------------------------------------------------------------------------------------------------------------------
Total Singapore 1,733,724
=========================================================================================================================
South Korea (3.5%)
- -------------------------------------------------------------------------------------------------------------------------
29,370 Kookmin Bank ADR* 809,144
64,984 KT Corporation ADR* 1,316,576
6,830 Samsung Electronics Company, Ltd.* 1,714,527
2,192 Samsung Electronics Company, Ltd. ADR* 274,000
36,544 SK Telecom Company, Ltd. ADR* 555,469
- -------------------------------------------------------------------------------------------------------------------------
Total South Korea 4,669,716
=========================================================================================================================
Spain (3.4%)
- -------------------------------------------------------------------------------------------------------------------------
17,905 Acerinox SA* 667,241
139,650 Banco Bilbao Vizcaya Argentaria SA* 1,405,852
228,080 Telefonica SA* 2,522,626
- -------------------------------------------------------------------------------------------------------------------------
Total Spain 4,595,719
=========================================================================================================================
Sweden (2.7%)
- -------------------------------------------------------------------------------------------------------------------------
312,157 Nordea AB* 1,656,268
558,908 TeliaSonera AB* 1,988,389
- -------------------------------------------------------------------------------------------------------------------------
Total Sweden 3,644,657
=========================================================================================================================
Switzerland (2.2%)
- -------------------------------------------------------------------------------------------------------------------------
36,977 Adecco SA* 1,417,683
38,640 Novartis AG* 1,524,176
- -------------------------------------------------------------------------------------------------------------------------
Total Switzerland 2,941,859
=========================================================================================================================
Thailand (0.2%)
- -------------------------------------------------------------------------------------------------------------------------
233,600 Bangkok Bank Public Company* 326,942
- -------------------------------------------------------------------------------------------------------------------------
Total Thailand 326,942
=========================================================================================================================
Turkey (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
6,264 Turkcell Iletisim Hizmetleri AS ADR* 93,647
- -------------------------------------------------------------------------------------------------------------------------
Total Turkey 93,647
=========================================================================================================================
United Kingdom (26.9%)
- -------------------------------------------------------------------------------------------------------------------------
89,900 AstraZeneca plc* 3,527,321
194,390 BAA plc* 1,500,565
668,244 BAE SYSTEMS plc* 1,356,353
345,411 British Sky Broadcasting Group plc* 3,579,975
183,066 Diageo plc* 2,030,491
88,670 HBOS plc* 1,038,758
281,500 HSBC Holdings plc* 3,084,038
152,401 Imperial Tobacco Group plc* 2,550,165
82,353 InterContinental Hotels Group plc* 500,146
722,432 Kingfisher plc* 2,822,992
351,165 Marks and Spencer Group plc* 1,636,001
64,360 Mitchells & Butlers* 218,065
98,674 Next Plc* 1,487,916
12,931 Reckitt Benckiser plc* 228,054
437,828 Reed Elsevier plc* 3,491,708
96,371 Royal Bank of Scotland Group plc* 2,527,486
192,518 Smith & Nephew plc* 1,283,812
1,762,847 Vodafone Group plc* 3,479,489
- -------------------------------------------------------------------------------------------------------------------------
Total United Kingdom 36,343,335
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $152,171,713) 132,062,248
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (2.0%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$2,600,000 Federal National Mortgage Association 1.250% 5/1/2003 $2,600,000
47,390 SSgA Money Market Fund 0.930 N/A 47,390
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 2,647,390
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $154,819,103) $134,709,638
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield or, for securities purchased at a discount, the discount at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Capital Growth Fund
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (98.6%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (20.9%)
- -------------------------------------------------------------------------------------------------------------------------
427,098 Cablevision Systems Corporation Holdings* $9,575,537
209,600 Clear Channel Communications, Inc.* 8,197,456
3,096,700 Comcast Corporation* 93,086,802
3,100,300 Cox Communications, Inc.* 102,619,930
334,500 Family Dollar Stores, Inc. 11,436,555
339,500 Gannett Company, Inc. 25,706,940
1,385,200 Harley-Davidson, Inc. 61,558,288
798,500 Home Depot, Inc. 22,461,805
3,496,032 Liberty Media Corporation* 38,456,352
284,300 New York Times Company 13,185,834
241,240 Starwood Hotels & Resorts Worldwide, Inc. 6,474,882
2,135,300 Tiffany & Company 59,233,222
274,700 Tribune Company 13,454,806
1,514,500 Wal-Mart Stores, Inc. 85,296,640
1,219,400 Walt Disney Company 22,754,004
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 573,499,053
=========================================================================================================================
Consumer Staples (10.0%)
- -------------------------------------------------------------------------------------------------------------------------
399,500 Alberto-Culver Company 19,687,360
1,716,800 Altria Group, Inc. 52,808,768
46,650 Corn Products International, Inc. 1,393,902
96,414 Dean Foods Company* 4,196,901
1,282,700 General Mills, Inc. 57,862,597
382,900 Kimberly-Clark Corporation 19,056,933
3,919,900 Walgreen Company 120,968,114
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 275,974,575
=========================================================================================================================
Energy (11.8%)
- -------------------------------------------------------------------------------------------------------------------------
326,278 Apache Corporation 18,679,416
353,700 Baker Hughes, Inc. 9,903,600
232,100 ChevronTexaco Corporation 14,578,201
226,700 ConocoPhillips Corporation 11,403,010
696,400 ENSCO International, Inc. 17,688,560
2,085,300 EOG Resources, Inc. 77,948,514
2,236,600 Exxon Mobil Corporation 78,728,320
269,984 GlobalSantaFe Corporation 5,712,861
577,300 Nabors Industries, Ltd.* 22,630,160
799,900 Noble Corporation* 24,756,905
230,129 Patterson-UTI Energy, Inc.* 7,614,969
789,500 Rowan Companies, Inc. 16,184,750
507,400 Smith International, Inc. 18,043,144
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 323,872,410
=========================================================================================================================
Financials (19.2%)
- -------------------------------------------------------------------------------------------------------------------------
781,400 AFLAC, Inc. 25,559,594
1,240,200 American Express Company 46,953,972
2,000,552 American International Group, Inc. 115,931,988
624,900 Bank of America Corporation 46,273,845
1,466,948 Citigroup, Inc. 57,577,709
705,000 Federal National Mortgage Corporation 51,034,950
1 HSBC Holdings plc 27
1,492,740 J.P. Morgan Chase & Company 43,811,919
1,482,239 MBNA Corporation 28,014,317
544,700 MGIC Investment Corporation 24,762,062
745,300 Morgan Stanley and Company 33,352,175
990,300 National City Corporation 29,669,388
194,600 Northern Trust Corporation 6,830,460
398,600 State Street Corporation 13,962,958
63,454 Travelers Property Casualty Company, Class A 1,029,858
130,100 Travelers Property Casualty Company, Class B 2,114,125
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 526,879,347
=========================================================================================================================
Health Care (13.4%)
- -------------------------------------------------------------------------------------------------------------------------
139,200 AmerisourceBergen Corporation 8,052,720
129,100 Cardinal Health, Inc. 7,136,648
1,313,100 Johnson & Johnson 74,006,316
434,300 Medtronic, Inc. 20,733,482
1,556,300 Merck & Company, Inc. 90,545,534
3,482,400 Pfizer, Inc. 107,083,800
677,000 Schering-Plough Corporation 12,253,700
645,800 WellPoint Health Networks, Inc.* 49,042,052
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 368,854,252
=========================================================================================================================
Industrials (8.1%)
- -------------------------------------------------------------------------------------------------------------------------
89,300 CNF, Inc. 2,709,362
390,600 Dover Corporation 11,225,844
1,299,032 First Data Corporation 50,961,025
3,500,800 General Electric Company 103,098,560
298,380 Global Payments, Inc. 9,252,764
635,700 Herman Miller, Inc. 11,118,393
151,900 PACCAR, Inc. 8,872,479
418,200 United Technologies Corporation 25,848,942
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 223,087,369
=========================================================================================================================
Information Technology (12.7%)
- -------------------------------------------------------------------------------------------------------------------------
5,559,200 ADC Telecommunications, Inc.* 13,275,370
1,839,600 Agere Systems, Inc.* 3,292,884
527,900 Applied Materials, Inc.* 7,707,340
213,900 Arrow Electronics, Inc.* 3,610,632
2,320,800 Cisco Systems, Inc.* 34,904,832
233,500 Computer Sciences Corporation* 7,693,825
866,900 Dell Computer Corporation* 25,062,079
703,000 EMC Corporation* 6,390,270
630,200 Hewlett-Packard Company 10,272,260
2,154,200 Intel Corporation 39,637,280
614,300 International Business Machines Corporation 52,154,070
3,590,900 Microsoft Corporation 91,819,313
1,226,100 Motorola, Inc. 9,698,451
1,829,500 Oracle Corporation* 21,734,460
1,032,200 Sun Microsystems, Inc.* 3,406,260
1,109,000 Tellabs, Inc.* 6,853,620
581,800 Texas Instruments, Inc. 10,757,482
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 348,270,428
=========================================================================================================================
Telecommunication Services (1.8%)
- -------------------------------------------------------------------------------------------------------------------------
895,839 SBC Communications, Inc. 20,926,799
269,800 Sprint FON Group 3,105,398
134,800 Sprint PCS Group* 471,800
691,000 Verizon Communications, Inc. 25,829,580
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 50,333,577
=========================================================================================================================
Utilities (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
1,529,900 Calpine Corporation* 8,215,563
241,200 Entergy Corporation 11,242,332
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 19,457,895
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $2,067,002,143) 2,710,228,906
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (1.4%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$9,100,000 Henkel Corporation 1.230% 5/7/2003 $9,098,135
22,100,000 Koch Industries, Inc. 1.340 5/1/2003 22,100,000
8,540,461 The AAL Money Market Fund 0.840 N/A 8,540,461
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 39,738,596
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $2,106,740,739) $2,749,967,502
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield or, for securities purchased at a discount, the discount at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
AAL Large Company Index Fund
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (95.6%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (13.6%)
- -------------------------------------------------------------------------------------------------------------------------
400 American Greetings Corporation* $5,824
31,200 AOL Time Warner, Inc.* 426,816
2,000 Autonation, Inc.* 27,700
700 AutoZone, Inc.* 56,567
2,100 Bed Bath & Beyond, Inc.* 82,971
2,200 Best Buy Company, Inc. 76,076
800 Big Lots, Inc.* 10,016
600 Black & Decker Corporation 24,750
600 Brunswick Corporation 13,098
4,500 Carnival Corporation 124,155
400 Centex Corporation 26,408
1,400 Circuit City Stores, Inc. (Circuit City Group) 8,022
4,300 Clear Channel Communications, Inc.* 168,173
16,090 Comcast Corporation* 513,432
500 Cooper Tire & Rubber Company 7,040
3,200 Costco Wholesale Corporation* 110,816
1,000 Dana Corporation 9,290
1,150 Darden Restaurants, Inc. 20,137
3,900 Delphi Corporation 32,760
500 Dillard's, Inc. 6,990
2,325 Dollar General Corporation 33,806
600 Dow Jones & Company, Inc. 23,760
2,000 Eastman Kodak Company 59,820
2,200 eBay, Inc.* 204,094
1,200 Family Dollar Stores, Inc. 41,028
1,300 Federated Department Stores, Inc.* 39,806
12,800 Ford Motor Company 131,840
1,100 Fortune Brands, Inc. 53,240
1,900 Gannett Company, Inc. 143,868
6,100 Gap, Inc. 101,443
3,900 General Motors Corporation 140,595
1,200 Genuine Parts Company 38,364
1,200 Goodyear Tire & Rubber Company 6,864
2,100 Harley-Davidson, Inc. 93,324
800 Harrah's Entertainment, Inc.* 31,512
1,200 Hasbro, Inc. 19,200
2,600 Hilton Hotels Corporation 34,632
16,200 Home Depot, Inc. 455,706
600 International Game Technology* 51,780
2,600 Interpublic Group of Companies, Inc. 29,640
1,800 J.C. Penney Company, Inc. 30,708
600 Johnson Controls, Inc. 49,344
900 Jones Apparel Group, Inc.* 25,668
300 KB Home 14,781
600 Knight Ridder, Inc. 38,730
2,400 Kohl's Corporation* 136,320
1,300 Leggett & Platt, Inc. 26,845
3,600 Limited Brands, Inc. 52,344
700 Liz Claiborne, Inc. 22,771
5,500 Lowe's Companies, Inc. 241,395
1,600 Marriott International, Inc. 57,456
3,000 Mattel, Inc. 65,220
2,000 May Department Stores Company 43,240
500 Maytag Corporation 10,420
8,800 McDonald's Corporation 150,480
1,400 McGraw-Hill Companies, Inc. 81,746
400 Meredith Corporation 17,288
1,100 New York Times Company 51,018
1,900 Newell Rubbermaid, Inc. 57,912
1,900 NIKE, Inc. 101,707
900 Nordstrom, Inc. 15,597
2,100 Office Depot, Inc.* 26,586
1,300 Omnicom Group, Inc. 80,470
400 Pulte Homes, Inc. 23,196
1,100 RadioShack Corporation 26,081
400 Reebok International, Ltd.* 12,424
2,200 Sears, Roebuck and Company 62,348
1,000 Sherwin-Williams Company 27,880
400 Snap-On, Inc. 11,740
600 Stanley Works 14,418
3,300 Staples, Inc.* 62,832
2,700 Starbucks Corporation* 63,423
1,400 Starwood Hotels & Resorts Worldwide, Inc. 37,576
6,300 Target Corporation 210,672
1,000 Tiffany & Company 27,740
3,600 TJX Companies, Inc. 69,300
1,400 Toys 'R' Us, Inc.* 14,350
2,100 Tribune Company 102,858
400 Tupperware Corporation 5,544
1,600 Univision Communications, Inc.* 48,448
800 VF Corporation 31,472
12,344 Viacom, Inc.* 535,853
853 Visteon Corporation 5,980
30,800 Wal-Mart Stores, Inc. 1,734,656
14,200 Walt Disney Company 264,972
800 Wendy's International, Inc. 23,232
500 Whirlpool Corporation 26,745
2,000 Yum! Brands, Inc. 49,400
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 8,376,549
=========================================================================================================================
Consumer Staples (8.3%)
- -------------------------------------------------------------------------------------------------------------------------
300 Adolph Coors Company 16,059
400 Alberto-Culver Company 19,712
2,600 Albertson's, Inc. 51,636
14,400 Altria Group, Inc. 442,944
6,000 Anheuser-Busch Companies, Inc. 299,280
4,438 Archer Daniels Midland Company 49,173
1,700 Avon Products, Inc. 98,889
400 Brown-Foreman Corporation, Class B 30,616
2,800 Campbell Soup Company 61,684
1,500 Clorox Company 67,830
17,300 Coca-Cola Company 698,920
3,100 Coca-Cola Enterprises, Inc. 60,419
3,800 Colgate-Palmolive Company 217,246
3,700 ConAgra Foods, Inc. 77,700
2,700 CVS Corporation 65,367
2,600 General Mills, Inc. 117,286
7,300 Gillette Company 222,285
2,400 H.J. Heinz Company 71,712
1,000 Hershey Foods Corporation 65,250
2,800 Kellogg Company 91,672
3,600 Kimberly-Clark Corporation 179,172
5,300 Kroger Company* 75,790
1,000 McCormick & Company, Inc. 24,790
1,900 Pepsi Bottling Group, Inc. 39,026
12,090 PepsiCo, Inc. 523,255
9,100 Procter & Gamble Company 817,635
600 R.J. Reynolds Tobacco Holdings, Inc. 16,902
3,000 Safeway, Inc.* 49,860
5,400 Sara Lee Corporation 90,612
900 SUPERVALU, Inc. 14,823
4,500 SYSCO Corporation 129,285
1,200 UST, Inc. 37,596
7,100 Walgreen Company 219,106
900 Winn-Dixie Stores, Inc. 11,277
1,600 Wm. Wrigley Jr. Company 90,736
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 5,145,545
=========================================================================================================================
Energy (5.5%)
- -------------------------------------------------------------------------------------------------------------------------
600 Amerada Hess Corporation 27,090
1,727 Anadarko Petroleum Corporation 76,679
1,139 Apache Corporation 65,208
500 Ashland, Inc. 14,825
2,300 Baker Hughes, Inc. 64,400
1,100 BJ Services Company* 40,161
1,400 Burlington Resources, Inc. 64,834
7,510 ChevronTexaco Corporation 471,703
4,690 ConocoPhillips Corporation 235,907
1,700 Devon Energy Corporation 80,325
800 EOG Resources, Inc. 29,904
47,000 Exxon Mobil Corporation 1,654,400
3,000 Halliburton Company 64,230
700 Kerr-McGee Corporation 29,477
2,100 Marathon Oil Corporation 47,817
1,000 Nabors Industries, Ltd.* 39,200
900 Noble Corporation* 27,855
2,600 Occidental Petroleum Corporation 77,610
600 Rowan Companies, Inc. 12,300
4,100 Schlumberger, Ltd. 171,913
500 Sunoco, Inc. 18,605
2,200 Transocean, Inc. 41,910
1,800 Unocal Corporation 49,860
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 3,406,213
=========================================================================================================================
Financials (19.7%)
- -------------------------------------------------------------------------------------------------------------------------
1,800 ACE, Ltd. 59,544
3,600 AFLAC, Inc. 117,756
4,900 Allstate Corporation 185,171
800 Ambac Financial Group, Inc. 46,680
9,200 American Express Company 348,312
18,194 American International Group, Inc. 1,054,342
2,400 AmSouth Bancorporation 50,520
2,100 Aon Corporation 46,536
700 Apartment Investment & Management Company 26,432
10,500 Bank of America Corporation 777,525
5,300 Bank of New York Company, Inc. 140,185
8,100 BANK ONE Corporation 292,005
3,300 BB&T Corporation 107,580
700 Bear Stearns Companies, Inc. 46,788
1,500 Capital One Financial Corporation 62,805
9,300 Charles Schwab Corporation 80,259
1,518 Charter One Financial, Inc. 44,098
1,200 Chubb Corporation 63,468
1,100 Cincinnati Financial Corporation 40,535
35,906 Citigroup, Inc. 1,409,311
1,200 Comerica, Inc. 52,212
900 Countrywide Financial Corporation 60,840
2,900 Equity Office Properties Trust 75,313
1,900 Equity Residential 49,229
4,900 Federal Home Loan Mortgage Corporation 283,710
7,000 Federal National Mortgage Corporation 506,730
800 Federated Investors Inc. 21,832
4,083 Fifth Third Bancorp 201,251
900 First Tennessee National Corporation 39,420
7,308 FleetBoston Financial Corporation 193,808
1,800 Franklin Resources, Inc. 62,784
1,100 Golden West Financial Corporation 82,962
3,300 Goldman Sachs Group, Inc. 250,470
1,800 Hartford Financial Services Group, Inc. 73,368
1 HSBC Holdings plc 27
1,640 Huntington Bancshares, Inc. 31,914
13,930 J.P. Morgan Chase & Company 408,846
1,500 Janus Capital Group, Inc.* 20,850
1,050 Jefferson-Pilot Corporation 42,095
2,000 John Hancock Financial Services, Inc. 58,040
2,900 KeyCorp 69,919
1,700 Lehman Brothers Holdings, Inc. 107,049
1,200 Lincoln National Corporation 38,352
1,300 Loews Corporation 53,651
3,800 Marsh & McLennan Companies, Inc. 181,184
1,500 Marshall & Ilsley Corporation 44,130
1,050 MBIA, Inc. 46,935
8,850 MBNA Corporation 167,265
3,000 Mellon Financial Corporation 79,350
6,000 Merrill Lynch & Company, Inc. 246,300
4,900 MetLife, Inc. 140,777
700 MGIC Investment Corporation 31,822
1,100 Moody's Corporation 53,119
7,600 Morgan Stanley and Company 340,100
4,300 National City Corporation 128,828
1,100 North Fork Bancorporation, Inc. 35,596
1,500 Northern Trust Corporation 52,650
1,300 Plum Creek Timber Company, Inc. 30,238
2,000 PNC Financial Services Group, Inc. 87,800
2,200 Principal Financial Group, Inc. 64,020
1,500 Progressive Corporation 102,000
2,000 Providian Financial Corporation* 14,740
3,900 Prudential Financial, Inc. 124,683
1,500 Regions Financial Corporation 50,565
1,000 SAFECO Corporation 38,510
1,300 Simon Property Group, Inc. 47,736
1,100 SLM Corporation 123,200
2,400 SouthTrust Corporation 64,466
1,600 St. Paul Companies, Inc. 54,944
2,300 State Street Corporation 80,569
2,000 SunTrust Banks, Inc. 114,440
2,100 Synovus Financial Corporation 40,887
800 T. Rowe Price Group, Inc. 24,416
800 Torchmark Corporation 31,000
6,938 Travelers Property Casualty Company, Class B 112,743
13,324 U.S. Bancorp 295,127
1,350 Union Planters Corporation 38,529
1,600 UNUMProvident Corporation 18,400
9,500 Wachovia Corporation 362,995
6,600 Washington Mutual, Inc. 260,700
11,800 Wells Fargo & Company 569,468
1,000 XL Capital, Ltd. 82,300
600 Zions Bancorporation 29,562
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 12,196,618
=========================================================================================================================
Health Care (14.3%)
- -------------------------------------------------------------------------------------------------------------------------
10,900 Abbott Laboratories 442,867
1,100 Aetna, Inc. 54,780
900 Allergan, Inc. 63,225
800 Amerisource Bergen Corporation 46,280
9,040 Amgen, Inc.* 554,242
1,000 Anthem, Inc.* 68,640
1,400 Applera Corporation 24,542
400 Bausch & Lomb, Inc. 14,064
4,100 Baxter International, Inc. 94,300
1,800 Becton, Dickinson and Company 63,720
1,000 Biogen, Inc.* 37,990
1,775 Biomet, Inc. 54,067
2,900 Boston Scientific Corporation* 124,845
13,500 Bristol-Myers Squibb Company 344,790
400 C.R. Bard, Inc. 25,352
3,150 Cardinal Health, Inc. 174,132
1,300 Chiron Corporation* 53,079
1,000 CIGNA Corporation 52,300
7,900 Eli Lilly and Company 504,178
2,600 Forest Laboratories, Inc. 134,472
1,500 Genzyme Corporation* 60,420
2,100 Guidant Corporation* 81,879
3,600 HCA, Inc. 115,560
1,600 Health Management Associates, Inc. 27,296
1,100 Humana, Inc.* 12,155
1,700 IMS Health, Inc. 26,180
20,788 Johnson & Johnson 1,171,612
1,633 King Pharmaceuticals, Inc.* 20,592
600 Manor Care, Inc.* 11,670
2,000 McKesson Corporation 55,480
1,800 MedImmune, Inc.* 63,486
8,500 Medtronic, Inc. 405,790
15,700 Merck & Company, Inc. 913,426
300 Millipore Corporation* 10,245
55,679 Pfizer, Inc. 1,712,129
800 Quest Diagnostics, Inc.* 47,800
800 Quintiles Transnational Corporation* 11,240
10,200 Schering-Plough Corporation 184,620
1,300 St. Jude Medical, Inc. 68,198
1,400 Stryker Corporation 93,814
3,250 Tenet Healthcare Corporation 48,230
2,200 UnitedHealth Group, Inc. 202,686
700 Watson Pharmaceuticals, Inc.* 20,349
1,100 WellPoint Health Networks, Inc.* 83,534
9,300 Wyeth Corporation 404,829
1,370 Zimmer Holdings, Inc.* 64,253
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 8,849,338
=========================================================================================================================
Industrials (11.1%)
- -------------------------------------------------------------------------------------------------------------------------
2,800 3M Company 352,912
1,400 Allied Waste Industries, Inc.* 11,620
1,300 American Power Conversion Corporation* 20,254
500 American Standard Companies, Inc.* 35,595
1,200 Apollo Group, Inc.* 65,039
4,200 Automatic Data Processing, Inc. 141,246
800 Avery Dennison Corporation 42,408
5,900 Boeing Company 160,952
2,600 Burlington Northern Santa Fe Corporation 73,216
2,400 Caterpillar, Inc. 126,240
7,100 Cendant Corporation* 101,388
1,200 Cintas Corporation 43,080
3,500 Concord EFS, Inc.* 48,405
1,200 Convergys Corporation* 19,464
700 Cooper Industries, Ltd. 25,970
400 Crane Company 7,812
1,500 CSX Corporation 47,970
300 Cummins, Inc. 8,133
1,100 Danaher Corporation 75,878
1,700 Deere & Company 74,851
800 Delta Air Lines, Inc. 10,232
400 Deluxe Corporation 17,604
1,400 Dover Corporation 40,236
500 Eaton Corporation 41,035
3,000 Emerson Electric Company 152,100
1,000 Equifax, Inc. 23,190
2,100 FedEx Corporation 125,748
5,300 First Data Corporation 207,919
1,350 Fiserv, Inc.* 39,744
600 Fluor Corporation 20,742
1,400 General Dynamics Corporation 86,898
69,500 General Electric Company 2,046,772
800 Goodrich Corporation 11,256
1,300 H&R Block, Inc. 50,206
5,900 Honeywell International, Inc. 139,240
2,200 Illinois Tool Works, Inc. 140,756
1,200 Ingersoll-Rand Company, Ltd. 52,896
700 ITT Industries, Inc. 40,810
3,200 Lockheed Martin Corporation 160,160
3,400 Masco Corporation 71,638
400 McDermott International, Inc.* 1,300
500 Navistar International Corporation* 13,950
2,700 Norfolk Southern Corporation 57,267
1,335 Northrop Grumman Corporation 117,413
850 PACCAR, Inc. 49,649
800 Pall Corporation 16,896
800 Parker Hannifin Corporation 32,544
2,650 Paychex, Inc. 82,521
1,600 Pitney Bowes, Inc. 56,176
500 Power-One, Inc.* 2,925
700 R.R. Donnelley & Sons Company 14,112
2,800 Raytheon Company 83,804
1,200 Robert Half International, Inc.* 19,536
1,300 Rockwell Automation, Inc. 29,640
1,200 Rockwell Collins, Inc. 25,656
400 Ryder System, Inc. 9,936
972 Sabre Holdings Corporation 20,325
5,350 Southwest Airlines Company 85,386
900 Textron, Inc. 26,541
400 Thomas & Betts Corporation* 6,324
700 TMP Worldwide, Inc. 11,739
13,907 Tyco International, Ltd. 216,949
1,800 Union Pacific Corporation 107,136
7,900 United Parcel Service, Inc., Class B 490,748
3,300 United Technologies Corporation 203,973
600 W.W. Grainger, Inc. 27,690
4,100 Waste Management, Inc. 89,052
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 6,860,803
=========================================================================================================================
Information Technology (14.2%)
- -------------------------------------------------------------------------------------------------------------------------
5,500 ADC Telecommunications, Inc.* 13,134
1,600 Adobe Systems, Inc. 55,296
2,300 Advanced Micro Devices, Inc.* 17,112
3,177 Agilent Technologies, Inc.* 50,896
2,600 Altera Corporation* 41,106
2,500 Analog Devices, Inc.* 82,800
600 Andrew Corporation* 4,602
2,500 Apple Computer, Inc.* 35,500
11,500 Applied Materials, Inc.* 167,900
2,100 Applied Micro Circuits Corporation* 9,408
700 Autodesk, Inc. 10,892
2,516 Avaya, Inc.* 9,812
1,600 BMC Software, Inc.* 23,872
1,900 Broadcom Corporation* 33,991
3,000 CIENA Corporation* 14,610
49,600 Cisco Systems, Inc.* 745,984
1,100 Citrix Systems, Inc.* 20,856
4,000 Computer Associates International, Inc. 64,960
1,300 Computer Sciences Corporation* 42,835
2,600 Compuware Corporation* 11,414
1,300 Comverse Technology, Inc.* 16,991
8,300 Corning, Inc.* 44,986
18,000 Dell Computer Corporation* 520,380
1,000 Electronic Arts, Inc.* 59,270
3,300 Electronic Data Systems Corporation 59,895
15,300 EMC Corporation* 139,077
2,200 Gateway, Inc.* 6,336
21,231 Hewlett-Packard Company 346,065
46,200 Intel Corporation 850,080
11,800 International Business Machines Corporation 1,001,820
1,400 Intuit, Inc.* 54,292
1,300 Jabil Circuit, Inc.* 24,310
9,800 JDS Uniphase Corporation* 31,654
1,300 KLA-Tencor Corporation* 53,300
900 Lexmark International, Inc.* 67,059
2,200 Linear Technology Corporation 75,834
2,500 LSI Logic Corporation* 13,400
27,300 Lucent Technologies, Inc.* 49,140
2,300 Maxim Integrated Products, Inc. 90,367
600 Mercury Interactive Corporation* 20,364
4,200 Micron Technology, Inc.* 35,700
74,700 Microsoft Corporation 1,910,079
1,325 Molex, Inc. 30,926
15,971 Motorola, Inc. 126,331
1,200 National Semiconductor Corporation* 22,476
600 NCR Corporation* 13,152
2,300 Network Appliance, Inc.* 30,544
2,500 Novell, Inc.* 6,875
1,000 Novellus Systems, Inc.* 28,040
1,100 NVIDIA Corporation* 15,697
36,700 Oracle Corporation* 435,996
1,800 Parametric Technology Corporation* 5,940
2,100 PeopleSoft, Inc.* 31,563
800 PerkinElmer, Inc. 7,936
1,100 PMC-Sierra, Inc.* 9,075
700 QLogic Corporation* 30,793
5,500 QUALCOMM, Inc. 175,395
3,500 Sanmina-SCI Corporation* 16,800
1,000 Scientific-Atlanta, Inc. 16,250
3,300 Siebel Systems, Inc.* 28,611
5,700 Solectron Corporation* 18,183
22,300 Sun Microsystems, Inc.* 73,590
1,900 SunGard Data Systems, Inc.* 40,850
1,100 Symantec Corporation* 48,345
1,550 Symbol Technologies, Inc. 16,942
600 Tektronix, Inc.* 11,262
2,800 Tellabs, Inc.* 17,304
1,200 Teradyne, Inc.* 13,920
12,000 Texas Instruments, Inc. 221,880
1,100 Thermo Electron Corporation* 19,987
2,200 Unisys Corporation* 22,880
2,800 VERITAS Software Corporation* 61,628
900 Waters Corporation* 21,609
5,100 Xerox Corporation* 50,286
2,300 Xilinx, Inc.* 62,261
4,100 Yahoo!, Inc.* 101,598
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 8,762,304
=========================================================================================================================
Materials (2.6%)
- -------------------------------------------------------------------------------------------------------------------------
1,600 Air Products and Chemicals, Inc. 68,912
5,824 Alcoa, Inc. 133,544
500 Allegheny Technologies, Inc. 2,075
400 Ball Corporation 22,464
400 Bemis Company, Inc. 18,264
400 Boise Cascade Corporation 9,188
6,383 Dow Chemical Company 208,341
7,000 E.I. du Pont de Nemours and Company 297,710
500 Eastman Chemical Company 15,265
900 Ecolab, Inc. 45,981
900 Engelhard Corporation 22,095
1,000 Freeport-McMoRan Copper & Gold, Inc., Class B 17,310
1,705 Georgia-Pacific Group 26,325
300 Great Lakes Chemical Corporation 7,368
700 Hercules, Inc.* 7,105
600 International Flavors and Fragrances, Inc. 19,068
3,312 International Paper Company 118,404
700 Louisiana-Pacific Corporation* 5,656
1,382 Meadwestvaco Corporation 32,601
1,825 Monsanto Company 31,755
2,800 Newmont Mining Corporation 75,656
600 Nucor Corporation 24,510
1,100 Pactiv Corporation* 22,572
600 Phelps Dodge Corporation* 18,714
1,200 PPG Industries, Inc. 58,212
1,100 Praxair, Inc. 63,888
1,500 Rohm and Haas Company 49,665
600 Sealed Air Corporation* 25,710
500 Sigma-Aldrich Corporation 24,910
400 Temple-Inland, Inc. 18,120
700 United States Steel Corporation 10,024
700 Vulcan Materials Company 24,479
1,500 Weyerhaeuser Company 74,385
500 Worthington Industries, Inc. 6,715
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 1,606,991
=========================================================================================================================
Telecommunication Services (3.6%)
- -------------------------------------------------------------------------------------------------------------------------
2,200 ALLTEL Corporation 103,092
5,330 AT&T Corporation 90,877
18,855 AT&T Wireless Services, Inc.* 121,803
13,000 BellSouth Corporation 331,370
1,000 CenturyTel, Inc. 29,450
1,900 Citizens Communications Company* 20,767
7,500 Nextel Communications, Inc.* 110,925
11,775 Qwest Communications International, Inc.* 44,392
23,100 SBC Communications, Inc. 539,616
6,200 Sprint FON Group 71,362
6,900 Sprint Corporation (PCS Group)* 24,150
19,084 Verizon Communications, Inc. 713,360
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 2,201,164
=========================================================================================================================
Utilities (2.7%)
- -------------------------------------------------------------------------------------------------------------------------
3,700 AES Corporation* 22,237
800 Allegheny Energy, Inc. 6,640
1,100 Ameren Corporation 45,078
2,640 American Electric Power Company, Inc. 69,643
2,600 Calpine Corporation* 13,962
2,100 CenterPoint Energy, Inc. 16,590
1,200 CINergy Corporation 40,968
1,000 CMS Energy Corporation 6,230
1,500 Consolidated Edison, Inc. 58,305
1,100 Constellation Energy Group, Inc. 32,208
2,146 Dominion Resources, Inc. 127,000
1,200 DTE Energy Company 48,384
6,200 Duke Energy Corporation 109,058
2,500 Dynegy, Inc. 11,000
2,200 Edison International* 32,098
4,115 El Paso Corporation 30,863
1,600 Entergy Corporation 74,576
2,250 Exelon Corporation 119,340
2,100 FirstEnergy Corporation 70,833
1,300 FPL Group, Inc. 79,131
1,100 KeySpan Corporation 37,257
900 Kinder Morgan, Inc. 42,318
2,796 Mirant Corporation* 9,255
300 Nicor, Inc. 9,018
1,737 NiSource, Inc. 32,829
2,800 Pacific Gas & Electric Company* 41,944
200 Peoples Energy Corporation 7,770
600 Pinnacle West Capital Corporation 19,932
1,100 PPL Corporation 39,820
1,655 Progress Energy, Inc. 69,146
1,600 Public Service Enterprise Group, Inc. 61,552
1,411 Sempra Energy 37,871
5,000 Southern Company 145,450
1,200 TECO Energy, Inc. 12,948
2,200 TXU Corporation 43,824
3,600 Williams Companies, Inc. 25,020
2,710 Xcel Energy, Inc. 36,639
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 1,686,737
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $72,065,940) 59,092,262
=========================================================================================================================
Shares Short-Term Investments (4.4%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
2,712,718 The AAL Money Market Fund(c) 0.840% N/A $2,712,718
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 2,712,718
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $74,778,658) $61,804,980
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield.
(c) At April 30, 2003, $188,100 in cash was pledged as the initial margin deposit and $2,712,718 of The AAL Money Market Fund was pledged as collateral to cover open financial futures contracts as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- -------------------------------------------------------------------------------------------------------------------------
S&P 500 Mini Futures 31 June 2003 Long $1,419,955 $1,354,846 $65,109
S&P 500 Futures 7 June 2003 Long 1,603,175 1,524,792 78,383
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Large Company Index Fund II
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (96.2%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (13.6%)
- -------------------------------------------------------------------------------------------------------------------------
200 American Greetings Corporation* $2,912
15,750 AOL Time Warner, Inc.* 215,460
1,000 Autonation, Inc.* 13,850
400 AutoZone, Inc.* 32,324
1,000 Bed Bath & Beyond, Inc.* 39,510
1,150 Best Buy Company, Inc. 39,767
400 Big Lots, Inc.* 5,008
300 Black & Decker Corporation 12,375
300 Brunswick Corporation 6,549
2,300 Carnival Corporation 63,457
200 Centex Corporation 13,204
700 Circuit City Stores, Inc. (Circuit City Group) 4,011
2,200 Clear Channel Communications, Inc.* 86,042
8,087 Comcast Corporation* 258,056
200 Cooper Tire & Rubber Company 2,816
1,600 Costco Wholesale Corporation* 55,408
500 Dana Corporation 4,645
600 Darden Restaurants, Inc. 10,506
1,900 Delphi Corporation 15,960
200 Dillard's, Inc. 2,796
1,100 Dollar General Corporation 15,994
300 Dow Jones & Company, Inc. 11,880
1,000 Eastman Kodak Company 29,910
1,100 eBay, Inc.* 102,047
600 Family Dollar Stores, Inc. 20,514
700 Federated Department Stores, Inc.* 21,434
6,400 Ford Motor Company 65,920
500 Fortune Brands, Inc. 24,200
1,000 Gannett Company, Inc. 75,720
3,100 Gap, Inc. 51,553
2,000 General Motors Corporation 72,100
600 Genuine Parts Company 19,182
600 Goodyear Tire & Rubber Company 3,432
1,100 Harley-Davidson, Inc. 48,884
400 Harrah's Entertainment, Inc.* 15,756
600 Hasbro, Inc. 9,600
1,300 Hilton Hotels Corporation 17,316
8,200 Home Depot, Inc. 230,666
300 International Game Technology* 25,890
1,300 Interpublic Group of Companies, Inc. 14,820
900 J.C. Penney Company, Inc. 15,354
300 Johnson Controls, Inc. 24,672
400 Jones Apparel Group, Inc.* 11,408
200 KB Home 9,854
300 Knight Ridder, Inc. 19,365
1,200 Kohl's Corporation* 68,160
600 Leggett & Platt, Inc. 12,390
1,800 Limited Brands, Inc. 26,172
400 Liz Claiborne, Inc. 13,012
2,800 Lowe's Companies, Inc. 122,892
800 Marriott International, Inc. 28,728
1,500 Mattel, Inc. 32,610
1,000 May Department Stores Company 21,620
200 Maytag Corporation 4,168
4,400 McDonald's Corporation 75,240
700 McGraw-Hill Companies, Inc. 40,873
200 Meredith Corporation 8,644
500 New York Times Company 23,190
900 Newell Rubbermaid, Inc. 27,432
900 NIKE, Inc. 48,177
400 Nordstrom, Inc. 6,932
1,000 Office Depot, Inc.* 12,660
700 Omnicom Group, Inc. 43,330
200 Pulte Homes, Inc. 11,598
600 RadioShack Corporation 14,226
200 Reebok International, Ltd.* 6,212
1,100 Sears, Roebuck and Company 31,174
500 Sherwin-Williams Company 13,940
200 Snap-On, Inc. 5,870
300 Stanley Works 7,209
1,600 Staples, Inc.* 30,464
1,300 Starbucks Corporation* 30,537
700 Starwood Hotels & Resorts Worldwide, Inc. 18,788
3,200 Target Corporation 107,008
500 Tiffany & Company 13,870
1,800 TJX Companies, Inc. 34,650
700 Toys 'R' Us, Inc.* 7,175
1,100 Tribune Company 53,878
200 Tupperware Corporation 2,772
800 Univision Communications, Inc.* 24,224
400 VF Corporation 15,736
6,200 Viacom, Inc.* 269,142
400 Visteon Corporation 2,804
15,600 Wal-Mart Stores, Inc. 878,592
7,200 Walt Disney Company 134,352
400 Wendy's International, Inc. 11,616
300 Whirlpool Corporation 16,047
1,000 Yum! Brands, Inc. 24,700
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 4,224,941
=========================================================================================================================
Consumer Staples (8.3%)
- -------------------------------------------------------------------------------------------------------------------------
100 Adolph Coors Company 5,353
200 Alberto-Culver Company 9,856
1,300 Albertson's, Inc. 25,818
7,300 Altria Group, Inc. 224,548
3,000 Anheuser-Busch Companies, Inc. 149,640
2,196 Archer Daniels Midland Company 24,332
800 Avon Products, Inc. 46,536
200 Brown-Foreman Corporation, Class B 15,308
1,400 Campbell Soup Company 30,842
800 Clorox Company 36,176
8,700 Coca-Cola Company 351,480
1,500 Coca-Cola Enterprises, Inc. 29,235
1,900 Colgate-Palmolive Company 108,623
1,900 ConAgra Foods, Inc. 39,900
1,400 CVS Corporation 33,894
1,300 General Mills, Inc. 58,643
3,700 Gillette Company 112,665
1,200 H.J. Heinz Company 35,856
500 Hershey Foods Corporation 32,625
1,400 Kellogg Company 45,836
1,800 Kimberly-Clark Corporation 89,586
2,600 Kroger Company* 37,180
500 McCormick & Company, Inc. 12,395
900 Pepsi Bottling Group, Inc. 18,486
6,090 PepsiCo, Inc. 263,575
4,600 Procter & Gamble Company 413,310
300 R.J. Reynolds Tobacco Holdings, Inc. 8,451
1,500 Safeway, Inc.* 24,930
2,700 Sara Lee Corporation 45,306
400 SUPERVALU, Inc. 6,588
2,300 SYSCO Corporation 66,079
600 UST, Inc. 18,798
3,600 Walgreen Company 111,096
400 Winn-Dixie Stores, Inc. 5,012
800 Wm. Wrigley Jr. Company 45,368
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 2,583,326
=========================================================================================================================
Energy (5.6%)
- -------------------------------------------------------------------------------------------------------------------------
300 Amerada Hess Corporation 13,545
845 Anadarko Petroleum Corporation 37,518
561 Apache Corporation 32,117
200 Ashland, Inc. 5,930
1,200 Baker Hughes, Inc. 33,600
600 BJ Services Company* 21,906
700 Burlington Resources, Inc. 32,417
3,778 ChevronTexaco Corporation 237,296
2,448 ConocoPhillips Corporation 123,134
900 Devon Energy Corporation 42,525
400 EOG Resources, Inc. 14,952
23,700 Exxon Mobil Corporation 834,240
1,500 Halliburton Company 32,115
400 Kerr-McGee Corporation 16,844
1,100 Marathon Oil Corporation 25,047
500 Nabors Industries, Ltd.* 19,600
500 Noble Corporation* 15,475
1,300 Occidental Petroleum Corporation 38,805
300 Rowan Companies, Inc. 6,150
2,100 Schlumberger, Ltd. 88,053
300 Sunoco, Inc. 11,163
1,100 Transocean, Inc. 20,955
900 Unocal Corporation 24,930
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,728,317
=========================================================================================================================
Financials (19.9%)
- -------------------------------------------------------------------------------------------------------------------------
900 ACE, Ltd. 29,772
1,800 AFLAC, Inc. 58,878
2,500 Allstate Corporation 94,475
350 Ambac Financial Group, Inc. 20,423
4,600 American Express Company 174,156
9,244 American International Group, Inc. 535,690
1,200 AmSouth Bancorporation 25,260
1,100 Aon Corporation 24,376
300 Apartment Investment & Management Company 11,328
5,300 Bank of America Corporation 392,465
2,700 Bank of New York Company, Inc. 71,415
4,100 BANK ONE Corporation 147,805
1,700 BB&T Corporation 55,420
400 Bear Stearns Companies, Inc. 26,736
800 Capital One Financial Corporation 33,496
4,700 Charles Schwab Corporation 40,561
776 Charter One Financial, Inc. 22,543
600 Chubb Corporation 31,734
600 Cincinnati Financial Corporation 22,110
18,106 Citigroup, Inc. 710,661
600 Comerica, Inc. 26,106
500 Countrywide Financial Corporation 33,800
1,400 Equity Office Properties Trust 36,358
900 Equity Residential 23,319
2,500 Federal Home Loan Mortgage Corporation 144,750
3,500 Federal National Mortgage Corporation 253,365
400 Federated Investors, Inc. 10,916
2,022 Fifth Third Bancorp 99,664
400 First Tennessee National Corporation 17,520
3,708 FleetBoston Financial Corporation 98,336
900 Franklin Resources, Inc. 31,392
600 Golden West Financial Corporation 45,252
1,700 Goldman Sachs Group, Inc. 129,030
900 Hartford Financial Services Group, Inc. 36,684
1 HSBC Holdings plc 27
810 Huntington Bancshares, Inc. 15,763
7,010 J.P. Morgan Chase & Company 205,744
700 Janus Capital Group, Inc.* 9,730
550 Jefferson-Pilot Corporation 22,050
1,000 John Hancock Financial Services, Inc. 29,020
1,500 KeyCorp 36,165
900 Lehman Brothers Holdings, Inc. 56,673
600 Lincoln National Corporation 19,176
700 Loews Corporation 28,889
1,900 Marsh & McLennan Companies, Inc. 90,592
800 Marshall & Ilsley Corporation 23,536
500 MBIA, Inc. 22,350
4,500 MBNA Corporation 85,050
1,500 Mellon Financial Corporation 39,675
3,000 Merrill Lynch & Company, Inc. 123,150
2,500 MetLife, Inc. 71,825
400 MGIC Investment Corporation 18,184
500 Moody's Corporation 24,145
3,800 Morgan Stanley and Company 170,050
2,100 National City Corporation 62,916
600 North Fork Bancorporation, Inc. 19,416
800 Northern Trust Corporation 28,080
600 Plum Creek Timber Company, Inc. 13,956
1,000 PNC Financial Services Group, Inc. 43,900
1,100 Principal Financial Group, Inc. 32,010
800 Progressive Corporation 54,400
1,000 Providian Financial Corporation* 7,370
2,000 Prudential Financial, Inc. 63,940
800 Regions Financial Corporation 26,968
500 SAFECO Corporation 19,255
700 Simon Property Group, Inc. 25,704
600 SLM Corporation 67,200
1,200 SouthTrust Corporation 32,233
800 St. Paul Companies, Inc. 27,472
1,200 State Street Corporation 42,036
1,000 SunTrust Banks, Inc. 57,220
1,000 Synovus Financial Corporation 19,470
400 T. Rowe Price Group, Inc. 12,208
400 Torchmark Corporation 15,500
3,524 Travelers Property Casualty Company, Class B 57,265
6,718 U.S. Bancorp 148,804
650 Union Planters Corporation 18,551
800 UNUMProvident 9,200
4,800 Wachovia Corporation 183,408
3,300 Washington Mutual, Inc. 130,350
6,000 Wells Fargo & Company 289,560
500 XL Capital, Ltd. 41,150
300 Zions Bancorporation 14,781
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 6,171,913
=========================================================================================================================
Health Care (14.4%)
- -------------------------------------------------------------------------------------------------------------------------
5,500 Abbott Laboratories 223,465
500 Aetna, Inc. 24,900
500 Allergan, Inc. 35,125
400 AmerisourceBergen Corporation 23,140
4,536 Amgen, Inc.* 278,102
500 Anthem, Inc.* 34,320
700 Applera Corporation 12,271
200 Bausch & Lomb, Inc. 7,032
2,100 Baxter International, Inc. 48,300
900 Becton, Dickinson and Company 31,860
500 Biogen, Inc.* 18,995
875 Biomet, Inc. 26,653
1,400 Boston Scientific Corporation* 60,270
6,800 Bristol-Myers Squibb Company 173,672
200 C.R. Bard, Inc. 12,676
1,600 Cardinal Health, Inc. 88,448
700 Chiron Corporation* 28,581
500 CIGNA Corporation 26,150
4,000 Eli Lilly and Company 255,280
1,300 Forest Laboratories, Inc. 67,236
800 Genzyme Corporation* 32,224
1,100 Guidant Corporation* 42,889
1,800 HCA, Inc. 57,780
800 Health Management Associates, Inc. 13,648
500 Humana, Inc.* 5,525
800 IMS Health, Inc. 12,320
10,490 Johnson & Johnson 591,216
833 King Pharmaceuticals, Inc.* 10,504
300 Manor Care, Inc.* 5,835
1,000 McKesson Corporation 27,740
900 MedImmune, Inc.* 31,743
4,300 Medtronic, Inc. 205,282
7,900 Merck & Company, Inc. 459,622
200 Millipore Corporation* 6,830
28,140 Pfizer, Inc. 865,305
400 Quest Diagnostics, Inc.* 23,900
400 Quintiles Transnational Corporation* 5,620
5,100 Schering-Plough Corporation 92,310
600 St. Jude Medical, Inc. 31,476
700 Stryker Corporation 46,907
1,600 Tenet Healthcare Corporation 23,744
1,100 UnitedHealth Group, Inc. 101,343
400 Watson Pharmaceuticals, Inc.* 11,628
600 WellPoint Health Networks, Inc.* 45,564
4,700 Wyeth Corporation 204,591
740 Zimmer Holdings, Inc.* 34,706
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 4,466,728
=========================================================================================================================
Industrials (11.2%)
- -------------------------------------------------------------------------------------------------------------------------
1,400 3M Company 176,456
700 Allied Waste Industries, Inc.* 5,810
600 American Power Conversion Corporation* 9,348
300 American Standard Companies, Inc.* 21,357
600 Apollo Group, Inc.* 32,519
2,100 Automatic Data Processing, Inc. 70,623
400 Avery Dennison Corporation 21,204
2,900 Boeing Company 79,112
1,300 Burlington Northern Santa Fe Corporation 36,608
1,200 Caterpillar, Inc. 63,120
3,600 Cendant Corporation* 51,408
600 Cintas Corporation 21,540
1,700 Concord EFS, Inc.* 23,511
600 Convergys Corporation* 9,732
300 Cooper Industries, Ltd. 11,130
200 Crane Company 3,906
700 CSX Corporation 22,386
100 Cummins, Inc. 2,711
600 Danaher Corporation 41,388
900 Deere & Company 39,627
400 Delta Air Lines, Inc. 5,116
200 Deluxe Corporation 8,802
700 Dover Corporation 20,118
300 Eaton Corporation 24,621
1,500 Emerson Electric Company 76,050
500 Equifax, Inc. 11,595
1,100 FedEx Corporation 65,868
2,700 First Data Corporation 105,921
650 Fiserv, Inc.* 19,136
300 Fluor Corporation 10,371
700 General Dynamics Corporation 43,449
35,100 General Electric Company 1,033,692
400 Goodrich Corporation 5,628
600 H&R Block, Inc. 23,172
3,000 Honeywell International, Inc. 70,800
1,100 Illinois Tool Works, Inc. 70,378
600 Ingersoll-Rand Company, Ltd. 26,448
300 ITT Industries, Inc. 17,490
1,600 Lockheed Martin Corporation 80,080
1,700 Masco Corporation 35,819
200 McDermott International, Inc.* 650
200 Navistar International Corporation* 5,580
1,300 Norfolk Southern Corporation 27,573
667 Northrop Grumman Corporation 58,663
450 PACCAR, Inc. 26,285
400 Pall Corporation 8,448
400 Parker Hannifin Corporation 16,272
1,300 Paychex, Inc. 40,482
800 Pitney Bowes, Inc. 28,088
200 Power-One, Inc.* 1,170
400 R.R. Donnelley & Sons Company 8,064
1,400 Raytheon Company 41,902
600 Robert Half International, Inc.* 9,768
600 Rockwell Automation, Inc. 13,680
600 Rockwell Collins 12,828
200 Ryder System, Inc. 4,968
500 Sabre Holdings Corporation 10,455
2,700 Southwest Airlines Company 43,092
500 Textron, Inc. 14,745
200 Thomas & Betts Corporation* 3,162
300 TMP Worldwide, Inc. 5,031
6,938 Tyco International, Ltd. 108,233
900 Union Pacific Corporation 53,568
4,000 United Parcel Service, Inc., Class B 248,480
1,700 United Technologies Corporation 105,077
300 W.W. Grainger, Inc. 13,845
2,100 Waste Management, Inc. 45,612
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 3,453,771
=========================================================================================================================
Information Technology (14.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,800 ADC Telecommunications, Inc.* 6,686
800 Adobe Systems, Inc. 27,648
1,200 Advanced Micro Devices, Inc.* 8,928
1,600 Agilent Technologies, Inc.* 25,632
1,300 Altera Corporation* 20,553
1,300 Analog Devices, Inc.* 43,056
300 Andrew Corporation* 2,301
1,200 Apple Computer, Inc.* 17,040
5,800 Applied Materials, Inc.* 84,680
1,000 Applied Micro Circuits Corporation* 4,480
300 Autodesk, Inc. 4,668
1,225 Avaya, Inc.* 4,778
800 BMC Software, Inc.* 11,936
900 Broadcom Corporation* 16,101
1,500 CIENA Corporation* 7,305
25,000 Cisco Systems, Inc.* 376,000
600 Citrix Systems, Inc.* 11,376
2,000 Computer Associates International, Inc. 32,480
700 Computer Sciences Corporation* 23,065
1,300 Compuware Corporation* 5,707
600 Comverse Technology, Inc.* 7,842
4,200 Corning, Inc.* 22,764
9,100 Dell Computer Corporation* 263,081
500 Electronic Arts, Inc.* 29,635
1,600 Electronic Data Systems Corporation 29,040
7,700 EMC Corporation* 69,993
1,100 Gateway, Inc.* 3,168
10,741 Hewlett-Packard Company 175,078
23,300 Intel Corporation 428,720
6,000 International Business Machines Corporation 509,400
700 Intuit, Inc.* 27,146
700 Jabil Circuit, Inc.* 13,090
4,900 JDS Uniphase Corporation* 15,827
700 KLA-Tencor Corporation* 28,700
500 Lexmark International, Inc.* 37,255
1,100 Linear Technology Corporation 37,917
1,300 LSI Logic Corporation* 6,968
13,700 Lucent Technologies, Inc.* 24,660
1,100 Maxim Integrated Products, Inc. 43,219
300 Mercury Interactive Corporation* 10,182
2,100 Micron Technology, Inc.* 17,850
37,700 Microsoft Corporation 963,989
700 Molex, Inc. 16,338
8,100 Motorola, Inc. 64,071
600 National Semiconductor Corporation* 11,238
300 NCR Corporation* 6,576
1,100 Network Appliance, Inc.* 14,608
1,200 Novell, Inc.* 3,300
500 Novellus Systems, Inc.* 14,020
500 NVIDIA Corporation* 7,135
18,500 Oracle Corporation* 219,780
900 Parametric Technology Corporation* 2,970
1,100 PeopleSoft, Inc.* 16,533
400 PerkinElmer, Inc. 3,968
500 PMC-Sierra, Inc.* 4,125
300 QLogic Corporation* 13,197
2,800 QUALCOMM, Inc. 89,292
1,700 Sanmina-SCI Corporation* 8,160
500 Scientific-Atlanta, Inc. 8,125
1,700 Siebel Systems, Inc.* 14,739
2,900 Solectron Corporation* 9,251
11,200 Sun Microsystems, Inc.* 36,960
1,000 SunGard Data Systems, Inc.* 21,500
500 Symantec Corporation* 21,975
750 Symbol Technologies, Inc. 8,198
300 Tektronix, Inc.* 5,631
1,400 Tellabs, Inc.* 8,652
600 Teradyne, Inc.* 6,960
6,100 Texas Instruments, Inc. 112,789
500 Thermo Electron Corporation* 9,085
1,100 Unisys Corporation* 11,440
1,400 VERITAS Software Corporation* 30,814
400 Waters Corporation* 9,604
2,500 Xerox Corporation* 24,650
1,200 Xilinx, Inc.* 32,484
2,100 Yahoo!, Inc.* 52,038
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 4,420,150
=========================================================================================================================
Materials (2.6%)
- -------------------------------------------------------------------------------------------------------------------------
800 Air Products and Chemicals, Inc. 34,456
2,900 Alcoa, Inc. 66,497
200 Allegheny Technologies, Inc. 830
200 Ball Corporation 11,232
200 Bemis Company, Inc. 9,132
200 Boise Cascade Corporation 4,594
3,183 Dow Chemical Company 103,893
3,500 E.I. du Pont de Nemours and Company 148,855
300 Eastman Chemical Company 9,159
500 Ecolab, Inc. 25,545
400 Engelhard Corporation 9,820
500 Freeport-McMoRan Copper & Gold, Inc., Class B 8,655
852 Georgia-Pacific Group 13,155
200 Great Lakes Chemical Corporation 4,912
300 Hercules, Inc.* 3,045
300 International Flavors and Fragrances, Inc. 9,534
1,700 International Paper Company 60,775
300 Louisiana-Pacific Corporation* 2,424
691 Meadwestvaco Corporation 16,301
884 Monsanto Company 15,382
1,400 Newmont Mining Corporation 37,828
300 Nucor Corporation 12,255
500 Pactiv Corporation* 10,260
300 Phelps Dodge Corporation* 9,357
600 PPG Industries, Inc. 29,106
600 Praxair, Inc. 34,848
800 Rohm and Haas Company 26,488
300 Sealed Air Corporation* 12,855
300 Sigma-Aldrich Corporation 14,946
200 Temple-Inland, Inc. 9,060
300 United States Steel Corporation 4,296
400 Vulcan Materials Company 13,988
800 Weyerhaeuser Company 39,672
300 Worthington Industries, Inc. 4,029
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 817,184
=========================================================================================================================
Telecommunication Services (3.6%)
- -------------------------------------------------------------------------------------------------------------------------
1,100 ALLTEL Corporation 51,546
2,660 AT&T Corporation 45,353
9,545 AT&T Wireless Services, Inc.* 61,661
6,500 BellSouth Corporation 165,685
500 CenturyTel, Inc. 14,725
900 Citizens Communications Company* 9,837
3,700 Nextel Communications, Inc.* 54,723
5,900 Qwest Communications International, Inc.* 22,243
11,700 SBC Communications, Inc. 273,312
3,100 Sprint FON Group 35,681
3,500 Sprint PCS Group* 12,250
9,600 Verizon Communications, Inc. 358,848
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 1,105,864
=========================================================================================================================
Utilities (2.7%)
- -------------------------------------------------------------------------------------------------------------------------
1,900 AES Corporation* 11,419
400 Allegheny Energy, Inc. 3,320
600 Ameren Corporation 24,588
1,300 American Electric Power Company, Inc. 34,294
1,300 Calpine Corporation* 6,981
1,000 CenterPoint Energy, Inc. 7,900
600 CINergy Corporation 20,484
500 CMS Energy Corporation 3,115
800 Consolidated Edison, Inc. 31,096
600 Constellation Energy Group, Inc. 17,568
1,100 Dominion Resources, Inc. 65,098
600 DTE Energy Company 24,192
3,100 Duke Energy Corporation 54,529
1,300 Dynegy, Inc. 5,720
1,100 Edison International* 16,049
2,092 El Paso Corporation 15,690
800 Entergy Corporation 37,288
1,175 Exelon Corporation 62,322
1,000 FirstEnergy Corporation 33,730
700 FPL Group, Inc. 42,609
500 KeySpan Corporation 16,935
400 Kinder Morgan, Inc. 18,808
1,416 Mirant Corporation* 4,687
100 Nicor, Inc. 3,006
837 NiSource, Inc. 15,819
1,400 Pacific Gas & Electric Company* 20,972
100 Peoples Energy Corporation 3,885
300 Pinnacle West Capital Corporation 9,966
600 PPL Corporation 21,720
827 Progress Energy, Inc. 34,552
800 Public Service Enterprise Group, Inc. 30,776
700 Sempra Energy 18,788
2,500 Southern Company 72,725
600 TECO Energy, Inc. 6,474
1,100 TXU Corporation 21,912
1,800 Williams Companies, Inc. 12,510
1,355 Xcel Energy, Inc. 18,320
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 849,847
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $39,498,555) 29,822,041
=========================================================================================================================
Shares Short-Term Investments (3.8%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
1,170,521 The AAL Money Market Fund(c) 0.840% N/A $1,170,521
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 1,170,521
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $40,669,076) $30,992,562
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield.
(c) At April 30, 2003, $85,500 in cash was pledged as the initial margin deposit and $1,170,521 of The AAL Money Market Fund was pledged as collateral to cover open financial futures contracts as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- -------------------------------------------------------------------------------------------------------------------------
S&P 500 Mini Futures 24 June 2003 Long $1,099,320 $1,035,569 $63,751
S&P 500 Futures 1 June 2003 Long 229,025 208,981 20,044
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Equity Income Fund
Schedule of Investments as of April 30, 2003(a)
Shares Common Stock (98.1%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (10.3%)
- -------------------------------------------------------------------------------------------------------------------------
7,600 AutoZone, Inc.* $614,156
16,000 Best Buy Company, Inc. 553,280
55,400 Clear Channel Communications, Inc.* 2,166,694
36,431 Comcast Corporation* 1,162,513
36,100 Family Dollar Stores, Inc. 1,234,259
71,600 Fox Entertainment Group, Inc.* 1,818,640
16,000 Gannett Company, Inc. 1,211,520
30,700 Home Depot, Inc. 863,591
14,200 Johnson Controls, Inc. 1,167,808
39,600 Lowe's Companies, Inc. 1,738,044
62,600 Staples, Inc.* 1,191,904
76,900 Target Corporation 2,571,536
31,600 Toyota Motor Corporation ADR 1,430,848
25,700 Tribune Company 1,258,786
67,200 Viacom, Inc.* 2,917,152
61,400 Walt Disney Company 1,145,724
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 23,046,455
=========================================================================================================================
Consumer Staples (6.6%)
- -------------------------------------------------------------------------------------------------------------------------
74,400 ConAgra Foods, Inc. 1,562,400
91,200 CVS Corporation 2,207,952
38,100 General Mills, Inc. 1,718,691
38,000 Kimberly-Clark Corporation 1,891,260
45,700 Kraft Foods, Inc. 1,412,130
115,000 Kroger Company* 1,644,500
27,800 Procter & Gamble Company 2,497,830
46,800 Unilever plc Sponsored ADR* 1,837,836
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 14,772,599
=========================================================================================================================
Energy (10.6%)
- -------------------------------------------------------------------------------------------------------------------------
29,465 Apache Corporation 1,686,871
65,200 Baker Hughes, Inc. 1,825,600
44,047 ChevronTexaco Corporation 2,766,592
81,245 ConocoPhillips 4,086,624
45,000 EOG Resources, Inc. 1,682,100
206,600 Exxon Mobil Corporation 7,272,320
57,100 Noble Corporation* 1,767,245
68,600 Valero Energy Corporation 2,521,050
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 23,608,402
=========================================================================================================================
Financials (29.0%)
- -------------------------------------------------------------------------------------------------------------------------
34,300 ACE, Ltd. 1,134,644
60,400 Allstate Corporation 2,282,516
50,000 American Express Company 1,893,000
59,000 American International Group, Inc. 3,419,050
80,500 Bank of America Corporation 5,961,025
48,800 BANK ONE Corporation 1,759,240
187,933 Citigroup, Inc. 7,376,370
20,100 Countrywide Financial Corporation 1,358,760
24,000 Equity Office Properties Trust 623,280
38,800 Federal Home Loan Mortgage Corporation 2,246,520
48,800 Federal National Mortgage Association 3,532,632
42,600 FleetBoston Financial Corporation 1,129,752
9,500 Goldman Sachs Group, Inc. 721,050
40,800 Hartford Financial Services Group, Inc. 1,663,008
96,500 J.P. Morgan Chase & Company 2,832,275
20,500 Lehman Brothers Holdings, Inc. 1,290,885
47,700 MBNA Corporation 901,530
34,800 Merrill Lynch & Company, Inc. 1,428,540
76,100 MetLife, Inc. 2,186,353
40,400 Morgan Stanley and Company 1,807,900
25,200 National City Corporation 754,992
36,100 Prudential Financial, Inc. 1,154,117
17,200 Simon Property Group, Inc. 631,584
42,700 SouthTrust Corporation 1,146,965
31,900 St. Paul Companies, Inc. 1,095,446
68,600 Travelers Property Casualty Company, Class B 1,114,750
123,900 U.S. Bancorp 2,744,385
64,900 Wachovia Corporation 2,479,829
51,400 Washington Mutual, Inc. 2,030,300
87,700 Wells Fargo & Company 4,232,402
21,900 XL Capital, Ltd. 1,802,370
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 64,735,470
=========================================================================================================================
Health Care (7.7%)
- -------------------------------------------------------------------------------------------------------------------------
17,400 Aetna, Inc. 866,520
27,900 Anthem, Inc.* 1,915,056
41,300 HCA, Inc. 1,325,730
127,900 IVAX Corporation* 2,055,353
29,500 Johnson & Johnson 1,662,620
80,200 McKesson Corporation 2,224,748
30,300 Merck & Company, Inc. 1,762,854
93,800 Pfizer, Inc. 2,884,350
57,300 Wyeth Corporation 2,494,269
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 17,191,500
=========================================================================================================================
Industrials (10.5%)
- -------------------------------------------------------------------------------------------------------------------------
37,100 Boeing Company 1,012,088
34,500 Caterpillar, Inc. 1,814,700
48,700 Cendant Corporation* 695,436
37,000 Emerson Electric Company 1,875,900
21,300 FedEx Corporation 1,275,444
47,200 First Data Corporation 1,851,656
22,700 Fiserv, Inc.* 668,288
8,400 General Dynamics Corporation 521,388
47,300 General Electric Company 1,392,985
50,150 Honeywell International, Inc. 1,183,540
18,500 Illinois Tool Works, Inc. 1,183,630
55,900 Masco Corporation 1,177,813
12,300 Northrop Grumman Corporation 1,081,785
34,700 Pitney Bowes, Inc. 1,218,317
18,700 Raytheon Company 559,691
110,600 Tyco International, Ltd. 1,725,360
31,900 Union Pacific Corporation 1,898,688
35,200 United Technologies Corporation 2,175,712
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 23,312,421
=========================================================================================================================
Information Technology (8.0%)
- -------------------------------------------------------------------------------------------------------------------------
72,300 Applied Materials, Inc.* 1,055,580
86,300 Cisco Systems, Inc.* 1,297,952
80,100 Computer Associates International, Inc. 1,300,824
48,400 Harris Corporation 1,382,304
179,300 Hewlett-Packard Company 2,922,590
66,700 Intel Corporation 1,227,280
34,800 International Business Machines Corporation 2,954,520
88,700 Microsoft Corporation 2,268,059
135,100 Motorola, Inc. 1,068,641
92,700 Oracle Corporation* 1,101,276
70,300 Texas Instruments, Inc. 1,299,847
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 17,878,873
=========================================================================================================================
Materials (5.9%)
- -------------------------------------------------------------------------------------------------------------------------
93,500 Alcoa, Inc. 2,143,955
29,500 BASF AG* 1,315,700
27,200 E.I. du Pont de Nemours and Company 1,156,816
79,300 International Paper Company 2,834,975
19,800 Praxair, Inc. 1,149,984
135,700 United States Steel Corporation 1,943,224
52,200 Weyerhaeuser Company 2,588,598
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 13,133,252
=========================================================================================================================
Telecommunication Services (5.4%)
- -------------------------------------------------------------------------------------------------------------------------
22,500 ALLTEL Corporation 1,054,350
34,043 AT&T Corporation 580,433
170,200 AT&T Wireless Services, Inc.* 1,099,492
88,847 SBC Communications, Inc. 2,075,466
56,684 Telefonica SA ADR 1,884,743
99,400 Verizon Communications, Inc. 3,715,572
86,600 Vodafone Group plc ADR 1,711,216
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 12,121,272
=========================================================================================================================
Utilities (4.1%)
- -------------------------------------------------------------------------------------------------------------------------
41,800 Dominion Resources, Inc. 2,473,724
37,600 Entergy Corporation 1,752,536
32,600 Exelon Corporation 1,729,104
39,000 FirstEnergy Corporation 1,315,470
28,600 FPL Group, Inc. 1,740,882
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 9,011,716
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $230,564,780) 218,811,960
=========================================================================================================================
Shares Short-Term Investments (1.9%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
4,218,960 The AAL Money Market Fund 0.840% N/A $4,218,960
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 4,218,960
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $234,783,740) $223,030,920
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Balanced Fund
Schedule of Investments as of April 30, 2003 (a)
Shares Common Stock (56.4%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (11.9%)
- -------------------------------------------------------------------------------------------------------------------------
4,500 Aeropostale, Inc.* $81,000
1,600 AnnTaylor Stores Corporation 37,856
35,904 Cablevision Systems Corporation Holdings* 804,968
17,600 Clear Channel Communications, Inc.* 688,336
259,800 Comcast Corporation* 7,809,588
3,700 Cost Plus, Inc.* 113,701
260,100 Cox Communications, Inc.* 8,609,310
800 Emmis Communications Corporation(b)* 15,176
1,500 Ethan Allen Interiors, Inc. 50,520
28,100 Family Dollar Stores, Inc.(b) 960,739
1,800 Fossil, Inc.* 32,904
28,500 Gannett Company, Inc. 2,158,020
116,300 Harley-Davidson, Inc. 5,168,372
1,300 Harman International Industries, Inc. 86,567
3,500 Hasbro, Inc. 56,000
67,000 Home Depot, Inc.(b) 1,884,710
900 Hot Topic, Inc.* 22,005
4,200 Insight Enterprises, Inc.* 31,668
800 International Speedway Corporation* 31,448
1,500 Lay-Z-Boy, Inc. 29,295
293,300 Liberty Media Corporation* 3,226,300
6,200 Linens 'n Things, Inc.* 131,378
1,400 Lone Star Steakhouse & Saloon, Inc. 29,358
600 M.D.C. Holdings, Inc. 27,660
4,300 Macrovision Corporation* 75,981
1,300 Men's Wearhouse, Inc.* 21,645
1,100 Michaels Stores, Inc.* 34,364
2,000 Monaco Coach Corporation* 27,040
4,000 Nautica Enterprises, Inc.* 45,520
23,900 New York Times Company 1,108,482
200 NVR, Inc.* 71,550
2,400 O'Charley's, Inc.* 48,576
1,600 OshKosh B'Gosh, Inc. 48,608
1,850 Pacific Sunwear of California, Inc. 42,236
1,700 Quiksilver, Inc.* 55,420
5,700 Radio One, Inc.* 88,521
1,500 RARE Hospitality International, Inc.* 43,695
1,400 Regis Corporation 39,662
500 Ross Stores, Inc. 18,950
2,600 Ruby Tuesday, Inc. 51,220
600 Ryland Group, Inc. 32,538
1,100 SCP Pool Corporation* 36,311
20,208 Starwood Hotels & Resorts Worldwide, Inc. 542,383
179,200 Tiffany & Company 4,971,008
1,100 Timberland Company* 54,989
23,000 Tribune Company 1,126,540
127,000 Wal-Mart Stores, Inc. 7,152,640
102,300 Walt Disney Company 1,908,918
1,400 West Marine, Inc.* 22,876
1,600 Wolverine World Wide, Inc. 29,504
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 49,786,056
=========================================================================================================================
Consumer Staples (5.6%)
- -------------------------------------------------------------------------------------------------------------------------
33,500 Alberto-Culver Company(b) 1,650,880
144,100 Altria Group, Inc. 4,432,516
1,400 American Italian Pasta Company* 61,740
6,700 Casey's General Stores, Inc. 86,765
3,900 Corn Products International, Inc.(b) 116,532
8,076 Dean Foods Company* 351,548
107,600 General Mills, Inc. 4,853,836
3,700 Hain Celestial Group, Inc.* 63,862
32,200 Kimberly-Clark Corporation 1,602,594
2,100 NBTY, Inc.* 32,550
600 Performance Food Group Company* 21,048
1,000 Ralcorp Holdings, Inc.* 24,900
328,800 Walgreen Company 10,146,768
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 23,445,539
=========================================================================================================================
Energy (6.7%)
- -------------------------------------------------------------------------------------------------------------------------
27,409 Apache Corporation(b) 1,569,165
29,700 Baker Hughes, Inc.(b) 831,600
1,300 Cabot Oil & Gas Corporation 31,850
500 Cal Dive International, Inc.* 8,050
4,300 Chesapeake Energy Corporation 34,658
19,400 ChevronTexaco Corporation 1,218,514
18,900 ConocoPhillips Corporation 950,670
58,400 ENSCO International, Inc.(b) 1,483,360
174,900 EOG Resources, Inc. 6,537,762
900 Evergreen Resources, Inc.* 42,795
187,686 Exxon Mobil Corporation(b) 6,606,547
22,608 GlobalSantaFe Corporation 478,385
5,100 Key Energy Services, Inc.* 51,357
5,400 Maverick Tube Corporation* 96,066
48,400 Nabors Industries, Ltd.* 1,897,280
1,600 Newfield Exploration Company* 55,024
65,000 Noble Corporation* 2,011,750
22,122 Patterson-UTI Energy, Inc.* 732,017
1,300 Precision Drilling Corporation* 44,694
2,200 Pride International, Inc.* 34,144
66,200 Rowan Companies, Inc. 1,357,100
42,600 Smith International, Inc. 1,514,856
2,100 St. Mary Land & Exploration Company 53,802
1,500 Stone Energy Corporation* 52,695
6,100 Superior Energy Services, Inc.* 55,205
2,700 TETRA Technologies, Inc.* 71,820
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 27,821,166
=========================================================================================================================
Financials (11.0%)
- -------------------------------------------------------------------------------------------------------------------------
3,100 Affiliated Managers Group, Inc.* 143,561
65,500 AFLAC, Inc.(b) 2,142,505
2,700 American Capital Strategies, Ltd. 65,502
104,000 American Express Company 3,937,440
167,862 American International Group, Inc. 9,727,603
52,400 Bank of America Corporation 3,880,220
2,300 BOK Financial Corporation*(b) 82,938
123,045 Citigroup, Inc.(b) 4,829,516
1,200 Commercial Federal Corporation 25,824
2,300 Community First Bankshares, Inc. 61,918
1,600 Corus Bankshares, Inc. 68,976
2,300 Cullen/Frost Bankers, Inc. 75,417
59,200 Federal National Mortgage Corporation 4,285,488
1,200 First BanCorp 37,044
2,100 First Midwest Bancorp, Inc. 58,149
2,400 HCC Insurance Holdings, Inc. 66,000
300 Hilb, Rogal and Hamilton Company 10,665
1 HSBC Holdings plc 27
2,300 Hudson United Bancorp 76,682
2,900 I Shares Russell 2000 Index Fund 230,231
2,200 I Shares S&P Smallcap 600 Index Fund 217,976
125,220 J.P. Morgan Chase & Company 3,675,207
1,400 MAF Bancorp, Inc. 47,264
124,350 MBNA Corporation 2,350,215
45,700 MGIC Investment Corporation 2,077,522
62,500 Morgan Stanley and Company 2,796,875
83,100 National City Corporation 2,489,676
16,400 Northern Trust Corporation 575,640
1,700 Platinum Underwriters Holdings, Ltd. 44,965
3,300 Raymond James Financial, Inc. 94,644
1,600 RLI Corporation 47,280
1,600 Southwest Bancorporation of Texas, Inc.* 54,368
33,400 State Street Corporation 1,170,002
1,600 Stewart Information Services Corporation* 42,688
5,243 Travelers Property Casualty Company, Class A 85,094
10,958 Travelers Property Casualty Company, Class B 178,068
2,000 UCBH Holdings, Inc. 50,880
1,600 United Bankshares, Inc. 46,208
1,920 Washington Federal, Inc. 41,856
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 45,892,134
=========================================================================================================================
Health Care (7.6%)
- -------------------------------------------------------------------------------------------------------------------------
3,000 Alpharma, Inc. 55,950
2,200 American Pharmaceutical Partners, Inc.* 51,370
11,700 AmerisourceBergen Corporation 676,845
12,500 Bio-Technology General Corporation* 43,250
10,800 Cardinal Health, Inc.(b) 597,024
500 Cephalon, Inc.* 20,420
1,900 Cooper Companies, Inc.(b) 53,010
800 Coventry Health Care, Inc.* 32,656
2,200 IDEXX Laboratories, Inc.* 85,800
110,200 Johnson & Johnson 6,210,872
2,100 Medicis Pharmaceutical Corporation* 121,044
36,400 Medtronic, Inc. 1,737,736
130,500 Merck & Company, Inc. 7,592,490
1,100 Neurocrine Biosciences, Inc.* 49,775
1,800 Omnicare, Inc. 47,736
292,125 Pfizer, Inc. 8,982,844
900 Pharmaceutical Product Development, Inc.* 23,553
1,700 ResMed, Inc.* 62,356
1,100 Respironics, Inc.* 42,262
56,800 Schering-Plough Corporation 1,028,080
1,100 STERIS Corporation* 24,970
1,500 Sybron Dental Specialties, Inc.* 30,525
1,300 TECHNE Corporation* 28,873
2,700 United Surgical Partners International, Inc.* 50,031
5,600 US Oncology, Inc.* 40,208
800 Varian Medical Systems, Inc.* 43,088
1,900 Ventana Medical Systems, Inc.* 43,529
1,600 Vital Signs, Inc. 45,600
54,200 WellPoint Health Networks, Inc.* 4,115,948
1,600 Wilson Greatbatch Technologies, Inc.* 52,464
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 31,990,309
=========================================================================================================================
Industrials (4.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,000 A.O. Smith Corporation 59,640
400 Alliant Techsystems, Inc. 21,488
1,000 Arkansas Best Corporation 25,350
7,900 Atlantic Coast Airlines Holdings, Inc.*(b) 65,965
2,100 C&D Technologies, Inc. 27,930
7,500 CNF, Inc. 227,550
4,800 Consolidated Graphics, Inc.* 91,680
1,400 Corinthian Colleges, Inc. 64,106
1,600 Dionex Corporation* 55,058
32,700 Dover Corporation(b) 939,798
6,300 Dycom Industries, Inc.* 69,552
200 EMCOR Group, Inc.* 10,214
1,400 Fastenal Company 48,426
109,000 First Data Corporation 4,276,070
293,700 General Electric Company 8,649,465
26,100 Global Payments, Inc. 809,361
2,300 Graco, Inc. 70,610
2,500 Heartland Express, Inc.* 57,500
1,900 Heidrick & Struggles International, Inc.* 26,600
53,300 Herman Miller, Inc. 932,217
1,300 IDEX Corporation 41,405
1,500 ITT Educational Services, Inc. 44,250
1,900 Manitowoc Company, Inc. 35,340
1,600 Mercury Computer Systems, Inc.* 33,600
1,400 Mueller Industries, Inc.* 35,770
2,200 Nordson Corporation 55,572
600 Oshkosh Truck Corporation 33,600
12,750 PACCAR, Inc. 744,728
900 Resources Connection, Inc.* 19,620
2,300 Shaw Group, Inc.* 26,795
6,500 SkyWest, Inc. 83,135
1,700 Stewart & Stevenson Services, Inc. 22,797
1,600 Tetra Tech, Inc.* 24,800
3,500 TMP Worldwide, Inc. 58,695
1,000 Triumph Group, Inc.* 26,280
1,700 United Defense Industries, Inc.* 41,514
35,100 United Technologies Corporation 2,169,531
6,700 Wabash National Corporation* 62,846
1,100 Waste Connections, Inc.* 37,004
1,400 Woodward Governor Company 51,828
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 20,177,690
=========================================================================================================================
Information Technology (7.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,300 Actel Corporation* 45,563
1,600 Acxiom Corporation*(b) 22,336
4,500 Adaptec, Inc.* 30,780
466,400 ADC Telecommunications, Inc.*(b) 1,113,763
4,000 Advanced Digital Information Corporation* 32,080
1,700 Advanced Energy Industries, Inc.* 16,337
154,300 Agere Systems, Inc.* 276,197
400 Analogic Corporation 19,100
44,300 Applied Materials, Inc.* 646,780
18,000 Arrow Electronics, Inc.* 303,840
4,500 Axcelis Technologies, Inc.* 25,560
700 BARRA, Inc.* 22,855
1,000 Benchmark Electronics, Inc.* 25,950
2,000 Brooks Automation, Inc.* 16,940
1,000 CACI International, Inc.* 34,930
15,300 CIBER, Inc.* 83,079
194,700 Cisco Systems, Inc.* 2,928,288
2,200 Cognex Corporation* 48,158
1,100 Coherent, Inc.* 25,300
8,600 Computer Network Technology Corporation* 48,676
19,600 Computer Sciences Corporation*(b) 645,820
1,000 Cymer, Inc.* 28,550
72,800 Dell Computer Corporation*(b) 2,104,648
58,900 EMC Corporation* 535,401
52,800 Hewlett-Packard Company 860,640
2,300 Hutchinson Technology, Inc.* 54,372
2,200 Hyperion Solutions Corporation* 62,216
180,800 Intel Corporation 3,326,720
51,500 International Business Machines Corporation 4,372,350
1,300 JDA Software Group, Inc.* 14,638
1,400 Kronos, Inc.* 63,868
8,100 Legato Systems, Inc.* 47,952
5,700 Methode Electronics, Inc. 59,850
301,200 Microsoft Corporation 7,701,684
102,800 Motorola, Inc. 813,148
153,500 Oracle Corporation* 1,823,580
15,200 Parametric Technology Corporation* 50,160
2,700 Photronics, Inc.* 33,939
9,100 Plumtree Software, Inc.* 32,669
1,800 Power Integrations, Inc.* 39,838
6,800 RadiSys Corporation* 57,528
600 Roper Industries, Inc. 18,354
7,200 Skyworks Solutions, Inc.* 38,520
25,300 Stratex Networks, Inc.* 62,238
86,600 Sun Microsystems, Inc.* 285,780
93,000 Tellabs, Inc.* 574,740
48,800 Texas Instruments, Inc. 902,312
3,600 Tollgrade Communications, Inc.* 52,236
2,100 Trimble Navigation, Ltd.* 53,025
1,800 Varian Semiconductor Equipment, Inc.* 41,490
900 Varian, Inc.* 28,449
2,100 Veeco Instruments, Inc.* 33,789
3,900 Verity, Inc.* 64,467
600 Zebra Technologies Corporation* 40,002
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 30,691,485
=========================================================================================================================
Materials(c)
1,100 Florida Rock Industries, Inc. 41,800
3,800 MacDermid, Inc. 86,374
2,500 Steel Dynamics, Inc.* 30,250
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 158,424
=========================================================================================================================
Telecommunication Services (1.0%)
- -------------------------------------------------------------------------------------------------------------------------
1,300 Commonwealth Telephone Enterprises, Inc.* 51,675
75,199 SBC Communications, Inc. 1,756,649
22,600 Sprint FON Group 260,126
11,300 Sprint PCS Group* 39,550
58,000 Verizon Communications, Inc. 2,168,040
- -------------------------------------------------------------------------------------------------------------------------
Total Telecommunication Services 4,276,040
=========================================================================================================================
Utilities (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
128,400 Calpine Corporation* 689,508
1,100 CH Energy Group, Inc. 46,255
2,900 Energen Corporation 95,120
20,200 Entergy Corporation(b) 941,522
1,100 Northwest Natural Gas Company 28,413
1,600 Philadelphia Suburban Corporation 36,240
1,000 Piedmont Natural Gas Company, Inc. 37,360
2,100 Puget Energy, Inc. 44,352
1,700 Southwest Gas Corporation 35,292
2,600 UniSource Energy Corporation 46,358
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 2,000,420
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $252,572,867) 236,239,263
=========================================================================================================================
Principal
Amount Long-Term Fixed Income (35.6%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities (4.0%)
- -------------------------------------------------------------------------------------------------------------------------
$1,500,000 Chase Credit Card Master Trust, Variable Rate(b) 1.440% 3/16/2009 $1,503,149
1,800,000 Citibank Credit Card Master Trust I 6.050 1/15/2010 2,009,068
1,000,000 Citibank Credit Card Trust, Variable Rate 1.468 2/7/2008 1,001,937
1,300,000 Discover Card Master Trust I, Variable Rate 1.370 4/15/2008 1,300,633
1,000,000 EQCC Home Equity Loan Trust(b) 6.930 2/15/2029 1,049,821
1,241,587 Green Tree Financial Corporation 6.330 11/1/2029 1,253,360
900,000 Harley-Davidson Eaglemark Motorcycle Trust 6.710 1/15/2007 902,038
1,900,000 MBNA Credit Card Master Note 5.750 10/15/2008 2,078,471
2,000,000 Residential Asset Securities Corporation 4.988 2/25/2027 2,060,168
971,951 Residential Asset Securities Corporation 8.040 10/25/2028 1,008,192
2,000,000 Toyota Auto Receivables Owner Trust, Variable Rate 1.329 3/15/2007 1,999,608
380,674 Vanderbilt Mortgage Finance Corporation 8.045 7/7/2012 387,270
- -------------------------------------------------------------------------------------------------------------------------
Total Asset-Backed Securities 16,553,715
=========================================================================================================================
Basic Materials (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
500,000 Dow Chemical Company 5.750 11/15/2009 532,119
250,000 International Paper Company 5.850 10/30/2012 267,258
500,000 Meadwestvaco Corporation 6.850 4/1/2012 565,413
325,000 Potash Corporation of Saskatchewan, Inc. 4.875 3/1/2013 322,852
400,000 Rohm & Haas Company 7.400 7/15/2009 475,748
250,000 Weyerhaeuser Company 6.125 3/15/2007 271,858
500,000 Weyerhaeuser Company 5.250 12/15/2009 521,467
- -------------------------------------------------------------------------------------------------------------------------
Total Basic Materials 2,956,715
=========================================================================================================================
Capital Goods (1.0%)
- -------------------------------------------------------------------------------------------------------------------------
500,000 Bombardier Capital, Inc. 6.125 6/29/2006 470,000
250,000 Litton Industries, Inc. 8.000 10/15/2009 303,409
750,000 Lockheed Martin Corporation 8.200 12/1/2009 930,835
1,000,000 Raytheon Company 6.000 12/15/2010 1,078,657
125,000 Sealed Air Corporation 5.375 4/15/2008 129,125
1,000,000 Waste Management, Inc. 6.875 5/15/2009 1,141,525
- -------------------------------------------------------------------------------------------------------------------------
Total Capital Goods 4,053,551
=========================================================================================================================
Commercial-Backed Securities (3.5%)
- -------------------------------------------------------------------------------------------------------------------------
500,000 Banc of America Commercial Mortgage, Inc. 5.118 7/11/2043 525,071
2,049,299 CAM Commercial Mortgage Corporation(b) 4.834 11/14/2036 2,155,504
1,000,000 First Union National Bank Commercial Mortgage Trust
Pass-Through Certificates 7.390 12/15/2031 1,183,859
1,497,695 First Union-Lehman Brothers - Bank of America
Commercial Mortgage Trust 6.280 11/18/2035 1,603,888
1,000,000 First Union-Lehman Brothers - Bank of America
Commercial Mortgage Trust 6.560 11/18/2035 1,135,667
1,500,000 GMAC Commercial Mortgage Corporation Loan Trust,
Floating Rate(b) 1.450 4/25/2033 1,501,484
1,500,000 GMAC Commercial Mortgage Securities, Inc. 6.175 5/15/2033 1,677,902
500,000 LB-UBS Commercial Mortgage Trust 3.323 3/15/2027 498,799
1,500,000 Morgan Stanley Capital I, Inc. 6.210 11/15/2031 1,682,501
1,000,000 Morgan Stanley Dean Witter Capital I, Inc. Commercial
Mortgage 6.540 7/15/2030 1,134,649
1,300,000 Nationslink Funding Corporation 7.181 6/20/2031 1,460,804
- -------------------------------------------------------------------------------------------------------------------------
Total Commercial-Backed Securities 14,560,128
=========================================================================================================================
Communications Services (2.1%)
- -------------------------------------------------------------------------------------------------------------------------
1,000,000 AT&T Corporation, Variable Rate 7.000 11/15/2006 1,072,341
400,000 AT&T Wireless Services, Inc. 7.350 3/1/2006 445,612
250,000 AT&T Wireless Services, Inc. 7.500 5/1/2007 282,083
500,000 CenturyTel, Inc. 8.375 10/15/2010 614,299
600,000 Citizens Communications Company(b) 7.625 8/15/2008 701,018
450,000 Clear Channel Communications, Inc. 4.625 1/15/2008 463,498
500,000 Comcast Corporation 5.500 3/15/2011 515,791
1,000,000 Continental Cablevision, Inc. 8.875 9/15/2005 1,125,082
500,000 Cox Communications, Inc. 6.750 3/15/2011 568,635
500,000 Deutsche Telekom AG, Variable Rate 8.250 6/15/2005 555,449
500,000 GTE North, Inc.(b) 6.375 2/15/2010 558,368
300,000 News America, Inc. 4.750 3/15/2010 304,233
400,000 Sprint Capital Corporation 6.000 1/15/2007 408,000
250,000 Sprint Capital Corporation 6.125 11/15/2008 255,000
250,000 Verizon Global Funding Corporation 7.250 12/1/2010 292,330
500,000 Verizon Global Funding Corporation 7.375 9/1/2012 592,992
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 8,754,731
=========================================================================================================================
Consumer Cyclical (1.1%)
- -------------------------------------------------------------------------------------------------------------------------
1,000,000 American Honda Finance Corporation, Variable Rate 1.540 2/17/2004 1,002,780
375,000 AOL Time Warner, Inc. 6.125 4/15/2006 399,191
375,000 AOL Time Warner, Inc. 6.750 4/15/2011 407,137
750,000 Cendant Corporation 6.875 8/15/2006 820,026
400,000 DaimlerChrysler North American Holdings Corporation 4.750 1/15/2008 413,222
350,000 Ford Motor Credit Company 7.375 10/28/2009 357,502
500,000 General Motors Acceptance Corporation 7.500 7/15/2005 535,077
375,000 Lennar Corporation 5.950 3/1/2013 399,118
375,000 Pulte Homes, Inc. 8.125 3/1/2011 439,331
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Cyclical 4,773,384
=========================================================================================================================
Consumer Non-Cyclical (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
850,000 Bunge Limited Finance Corporation 7.800 10/15/2012 907,018
125,000 Kraft Foods, Inc. 4.625 11/1/2006 130,346
550,000 Kroger Company 7.250 6/1/2009 632,470
450,000 Tenet Healthcare Corporation 6.375 12/1/2011 427,500
250,000 Tenet Healthcare Corporation 7.375 2/1/2013 246,875
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Non-Cyclical 2,344,209
=========================================================================================================================
Energy (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
425,000 ConocoPhillips Corporation 8.750 5/25/2010 535,059
250,000 Occidental Petroleum Corporation 4.250 3/15/2010 251,502
500,000 Ocean Energy, Inc. 4.375 10/1/2007 517,411
250,000 Union Oil Company of California 5.050 10/1/2012 253,004
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,556,976
=========================================================================================================================
Finance (8.8%)
- -------------------------------------------------------------------------------------------------------------------------
250,000 Abbey National Capital Trust I, Variable Rate 8.963 12/29/2049 334,887
450,000 BNP Paribas Capital Trust, Variable Rate 9.003 12/29/2049 565,779
550,000 Capital One Bank 8.250 6/15/2005 595,930
250,000 Capital One Bank 6.875 2/1/2006 265,550
750,000 Countrywide Home Loans, Inc. 5.625 7/15/2009 807,765
500,000 EOP Operating, LP 6.800 1/15/2009 563,235
375,000 Goldman Sachs Group, Inc. 6.600 1/15/2012 422,782
250,000 Household Finance Corporation 5.875 2/1/2009 270,738
600,000 HSBC Capital Funding, LP, Variable Rate 9.547 12/31/2049 766,129
750,000 International Lease Finance Corporation 5.625 6/1/2007 785,074
325,000 JP Morgan Chase & Company 3.625 5/1/2008 327,102
1,260,000 Lehman Brothers, Inc., Targeted Return Index
Securities, Variable Rate 6.539 8/15/2008 1,355,957
375,000 Mack-Cali Realty Corporation 7.750 2/15/2011 436,198
2,000,000 Merrill Lynch & Company, Inc., Variable Rate 1.640 5/21/2004 2,006,530
9,686,000 Morgan Stanley and Company, Variable Rate 5.878 3/1/2007 10,507,760
10,016,000 Morgan Stanley and Company, Variable Rate 7.252 9/15/2011 11,533,813
400,000 Morgan Stanley Dean Witter & Company 4.250 5/15/2010 399,684
750,000 ProLogis Trust 7.100 4/15/2008 868,078
1,025,000 Prudential Financial, Inc. 3.750 5/1/2008 1,027,306
1,000,000 Regency Centers, LP 7.125 7/15/2005 1,098,215
650,000 Royal Bank of Scotland Group plc 9.118 3/31/2049 820,724
500,000 Simon Property Group, LP 6.375 11/15/2007 547,291
375,000 Union Planters Corporation 7.750 3/1/2011 444,516
500,000 Washington Mutual Bank 5.500 1/15/2013 530,898
- -------------------------------------------------------------------------------------------------------------------------
Total Finance 37,281,941
=========================================================================================================================
Mortgage-Backed Securities (7.4%)
- -------------------------------------------------------------------------------------------------------------------------
15,000,000 Federal National Mortgage Association 15-Yr.
Conventional(d) 5.500 5/15/2018 15,595,320
15,000,000 Federal National Mortgage Association 30-Yr.
Conventional(d) 5.500 5/1/2033 15,407,820
- -------------------------------------------------------------------------------------------------------------------------
Total Mortgage-Backed Securities 31,003,140
=========================================================================================================================
Municipal Bonds (0.2%)
- -------------------------------------------------------------------------------------------------------------------------
500,000 Educational Enhancement Funding Corporation South
Dakota Tobacco Taxable 6.720 6/1/2025 479,655
500,000 Oregon School Board Association General Obligation
Bond Zero Coupon 6/30/2007 433,165
- -------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds 912,820
=========================================================================================================================
Non-Corporate (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
750,000 Corporacion Andina de Fomento 6.875 3/15/2012 799,298
500,000 Mexico Government International Bond 7.500 1/14/2012 564,500
250,000 Petroleos Mexicanos 9.375 12/2/2008 300,000
- -------------------------------------------------------------------------------------------------------------------------
Total Non-Corporate 1,663,798
=========================================================================================================================
Technology (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
250,000 Fiserv, Inc. 4.000 4/15/2008 253,693
- -------------------------------------------------------------------------------------------------------------------------
Total Technology 253,693
=========================================================================================================================
Transportation (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
736,183 United Airlines, Inc.(e) 7.186 4/1/2011 542,589
- -------------------------------------------------------------------------------------------------------------------------
Total Transportation 542,589
=========================================================================================================================
U.S. Government (2.6%)
- -------------------------------------------------------------------------------------------------------------------------
2,800,000 Federal Home Loan Mortgage Corporation 3.500 9/15/2007 2,878,462
1,250,000 Federal Home Loan Mortgage Corporation 4.000 10/29/2007 1,283,276
500,000 Federal Home Loan Mortgage Corporation 3.158 12/27/2029 507,443
2,000,000 Federal National Mortgage Association 4.250 7/15/2007 2,118,012
1,500,000 U.S. Treasury Bonds 7.250 5/15/2016 1,934,355
700,000 U.S. Treasury Notes 6.000 8/15/2009 810,305
250,000 U.S. Treasury Notes 5.000 2/15/2011 274,258
500,000 U.S. Treasury Notes 4.375 8/15/2012 522,051
500,000 U.S. Treasury Notes 3.875 2/15/2013 500,664
- -------------------------------------------------------------------------------------------------------------------------
Total U.S. Government 10,828,826
=========================================================================================================================
Utilities (2.6%)
- -------------------------------------------------------------------------------------------------------------------------
250,000 Alliant Energy Resources, Inc. 7.375 11/9/2009 275,158
500,000 American Electric Power Company, Inc. 6.125 5/15/2006 540,000
400,000 American Electric Power Company, Inc. 5.375 3/15/2010 417,060
1,000,000 Consumers Energy Company 4.250 4/15/2008 1,016,512
500,000 Enterprise Products Operating, LP 8.250 3/15/2005 550,854
750,000 Kinder Morgan Energy Partners, LP 7.500 11/1/2010 889,411
700,000 Niagara Mohawk Power Corporation 7.750 10/1/2008 825,539
250,000 NiSource Finance Corporation 7.500 11/15/2003 257,788
1,000,000 NiSource Finance Corporation 7.875 11/15/2010 1,209,657
1,031,250 Northeast Generation Company 4.998 10/15/2005 1,045,388
250,000 Oncor Electric Delivery Company 5.000 9/1/2007 264,395
250,000 Oncor Electric Delivery Company 7.000 9/1/2022 275,304
500,000 Pinnacle West Capital Corporation 6.400 4/1/2006 536,544
875,000 PSEG Energy Holdings, Inc. 7.750 4/16/2007 916,563
500,000 PSEG Power, LLC 6.875 4/15/2006 547,280
250,000 Sempra Energy 6.000 2/1/2013 266,881
850,000 Xcel Energy, Inc. 7.000 12/1/2010 935,000
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 10,769,334
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $143,656,505) 148,809,550
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (8.0%) Interest Rate(f) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$3,600,000 Enterprise Funding Corporation 1.260% 5/15/2003 $3,598,236
5,000,000 Falcon Asset Securitization Corporation 1.280 5/14/2003 4,997,689
8,400,000 Koch Industries, Inc. 1.340 5/1/2003 8,400,000
12,595,152 The AAL Money Market Fund 0.840 N/A 12,595,152
3,700,000 Triple A-1 Funding 1.250 5/7/2003 3,699,229
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 33,290,306
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $429,519,678) $418,339,119
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) Earmarked as collateral as discussed in the notes to the financial statements.
(c) The market value of the denoted categories of investments represents less than 0.1% of the total investments of The AAL Balanced Fund.
(d) Denotes securities purchased on a when-issued basis.
(e) In bankruptcy.
(f) The interest rate shown reflects the current yield or, for securities purchased at a discount, the discount rate at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL High Yield Bond Fund
Schedule of Investments as of April 30, 2003 (a)
Principal
Amount Long-Term Fixed Income (95.7%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Basic Materials (8.5%)
- -------------------------------------------------------------------------------------------------------------------------
$600,000 Avecia Group plc 11.000% 7/1/2009 $546,000
700,000 Century Aluminum Company 11.750 4/15/2008 724,500
600,000 Compass Minerals Group, Inc. 10.000 8/15/2011 666,000
430,000 Equistar Chemicals, LP 10.125 9/1/2008 451,500
475,000 Equistar Chemicals, LP 8.750 2/15/2009 470,250
500,000 Fort James Corporation 6.700 11/15/2003 505,000
400,000 Georgia-Pacific Corporation 9.875 11/1/2021 378,000
100,000 Georgia-Pacific Corporation 9.500 5/15/2022 93,000
650,000 Georgia-Pacific Corporation 9.125 7/1/2022 591,500
900,000 Georgia-Pacific Corporation 8.875 5/15/2031 819,000
400,000 Hercules, Inc. 11.125 11/15/2007 452,000
800,000 ISP Chemco, Inc. 10.250 7/1/2011 872,000
250,000 ISP Holdings, Inc. 10.625 12/15/2009 256,250
750,000 Lyondell Chemical Company 9.625 5/1/2007 772,500
300,000 Lyondell Chemical Company 9.500 12/15/2008 306,000
850,000 MDP Acquisitions plc 9.625 10/1/2012 922,250
600,000 Millennium America, Inc. 9.250 6/15/2008 660,000
700,000 OM Group, Inc. 9.250 12/15/2011 598,500
450,000 Peabody Energy Corporation 6.875 3/15/2013 468,000
- -------------------------------------------------------------------------------------------------------------------------
Total Basic Materials 10,552,250
=========================================================================================================================
Capital Goods (6.9%)
- -------------------------------------------------------------------------------------------------------------------------
900,000 Allied Waste North America, Inc. 8.875 4/1/2008 972,000
600,000 Allied Waste North America, Inc. 8.500 12/1/2008 648,000
800,000 Allied Waste North America, Inc. 10.000 8/1/2009 855,000
100,000 Allied Waste North America, Inc. 9.250 9/1/2012 109,500
600,000 Building Materials Corporation of America 7.750 7/15/2005 570,000
600,000 Case Corporation 6.250 12/1/2003 600,000
575,000 Crown Euro Holdings SA 9.500 3/1/2011 612,375
400,000 Crown Euro Holdings SA 10.875 3/1/2013 431,000
500,000 Greif Brothers Corporation 8.875 8/1/2012 530,000
125,000 Owens-Brockway Glass Container, Inc.(b) 7.750 5/15/2011 129,375
700,000 Owens-Brockway Glass Container, Inc. 8.750 11/15/2012 747,250
125,000 Owens-Brockway Glass Container, Inc.(b) 8.250 5/15/2013 129,375
1,200,000 Tyco International Group SA 6.375 10/15/2011 1,182,000
1,100,000 Tyco International Group SA 6.250 6/15/2003 1,102,750
- -------------------------------------------------------------------------------------------------------------------------
Total Capital Goods 8,618,625
=========================================================================================================================
Communications Services (27.7%)
- -------------------------------------------------------------------------------------------------------------------------
600,000 Allbritton Communications Company 7.750 12/15/2012 624,000
1,200,000 American Cellular Corporation(b) 9.500 10/15/2009 312,000
800,000 American Media Operation, Inc. 10.250 5/1/2009 868,000
600,000 AT&T Corporation 8.000 11/15/2031 668,036
600,000 Cadmus Communications Corporation 9.750 6/1/2009 635,250
800,000 CanWest Media, Inc. 10.625 5/15/2011 912,000
650,000 Charter Communications Holdings, LLC 8.250 4/1/2007 432,250
1,550,000 Charter Communications Holdings, LLC 10.000 4/1/2009 1,023,000
400,000 Charter Communications Holdings, LLC 8.625 4/1/2009 263,000
450,000 Crown Castle International Corporation(c) Zero Coupon 11/15/2007 464,625
6,000 Crown Castle International Corporation 10.750 8/1/2011 6,180
700,000 CSC Holdings, Inc. 8.125 7/15/2009 742,000
300,000 CSC Holdings, Inc. 8.125 8/15/2009 318,000
1,050,000 CSC Holdings, Inc. 7.625 4/1/2011 1,105,125
275,000 Dexter Media East, LLC 9.875 11/15/2009 314,875
500,000 Dexter Media East, LLC 12.125 11/15/2012 595,000
575,000 DirecTV Holdings, LLC 8.375 3/15/2013 644,000
750,000 EchoStar DBS Corporation 9.375 2/1/2009 809,063
150,000 FairPoint Communications, Inc. 11.875 3/1/2010 166,500
200,000 France Telecom SA(c) 9.250 3/1/2011 244,592
200,000 Garden State Newspapers, Inc. 8.750 10/1/2009 207,000
650,000 Garden State Newspapers, Inc. 8.625 7/1/2011 671,125
575,000 Hollinger International Publishing 9.000 12/15/2010 615,250
325,000 Houghton Mifflin Company 8.250 2/1/2011 345,313
175,000 Houghton Mifflin Company 9.875 2/1/2013 189,000
500,000 Insight Midwest, LP/Insight Capital, Inc. 9.750 10/1/2009 536,250
400,000 Insight Midwest, LP/Insight Capital, Inc. 10.500 11/1/2010 443,000
1,550,000 MCI WorldCom, Inc.(c) 6.950 8/15/2028 437,875
550,000 Mediacom Broadband, LLC 11.000 7/15/2013 625,625
500,000 Nextel Communications Bank Term Loan B, Variable
Rate(b) 5.188 6/30/2008 489,956
500,000 Nextel Communications Bank Term Loan C, Variable
Rate(b) 5.438 12/31/2008 489,956
1,500,000 Panamsat Corporation 8.500 2/1/2012 1,623,750
700,000 Quebecor Media, Inc. 11.125 7/15/2011 794,500
750,000 Qwest Capital Funding, Inc. 7.900 8/15/2010 631,875
970,000 Qwest Capital Funding, Inc. 7.250 2/15/2011 802,675
120,000 Qwest Capital Funding, Inc. 7.750 2/15/2031 91,200
900,000 Qwest Communications International, Inc. 7.500 11/1/2008 814,500
1,300,000 Qwest Corporation 8.875 3/15/2012 1,423,500
300,000 R.H. Donnelley, Inc. 10.875 12/15/2012 347,250
1,000,000 Rogers Cantel, Inc. 9.375 6/1/2008 1,041,250
900,000 Rogers Communications, Inc. 8.875 7/15/2007 928,125
680,000 Rural Cellular Corporation 9.625 5/15/2008 591,600
320,000 Rural Cellular Corporation 9.750 1/15/2010 278,400
300,000 Salem Communications 7.750 12/15/2010 306,750
200,000 Shaw Communications, Inc. 8.250 4/11/2010 216,500
600,000 Sprint Capital Corporation 7.625 1/30/2011 645,000
650,000 Sprint Capital Corporation 8.375 3/15/2012 723,125
1,500,000 Sprint Capital Corporation 8.750 3/15/2032 1,642,500
300,000 TeleCorp PCS, Inc.(c) Zero Coupon 4/15/2009 307,500
465,000 TeleCorp PCS, Inc. 10.625 7/15/2010 553,350
550,000 TELUS Corporation 7.500 6/1/2007 610,500
675,000 Time Warner Telecom, Inc. 10.125 2/1/2011 563,625
150,000 Tritel PCS, Inc.(c) Zero Coupon 5/15/2009 153,750
649,000 Tritel PCS, Inc. 10.375 1/15/2011 775,555
600,000 TSI Telecommunication Services, Inc. 12.750 2/1/2009 588,000
300,000 Vivendi Universal 9.250 4/15/2010 336,750
1,450,000 WorldCom, Inc.(d) 8.250 5/15/2031 409,625
250,000 Young Broadcasting, Inc. 8.500 12/15/2008 267,813
867,000 Young Broadcasting, Inc. 10.000 3/1/2011 936,360
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 34,603,174
=========================================================================================================================
Consumer Cyclical (9.3%)
- -------------------------------------------------------------------------------------------------------------------------
800,000 AOL Time Warner, Inc. 7.625 4/15/2031 882,244
900,000 Boyd Gaming Corporation 7.750 12/15/2012 933,750
600,000 Circus & Eldorado Joint Venture/Silver Legacy Capital
Corporation 10.125 3/1/2012 577,500
600,000 Dura Operating Corporation 8.625 4/15/2012 622,500
700,000 Extended Stay America, Inc. 9.875 6/15/2011 728,000
300,000 Gap, Inc. 5.625 5/1/2003 300,000
600,000 Hilton Hotels Corporation 7.625 12/1/2012 639,000
1,100,000 HMH Properties, Inc. 7.875 8/1/2008 1,111,000
150,000 Host Marriott, LP 9.500 1/15/2007 157,688
400,000 Jupiters, Ltd. 8.500 3/1/2006 432,000
500,000 Mail-Well, Inc. 9.625 3/15/2012 507,500
600,000 Mandalay Resort Group 9.375 2/15/2010 651,000
265,000 Mandalay Resort Group 7.625 7/15/2013 262,350
350,000 Mandalay Resort Group 6.700 11/15/2096 354,362
1,150,000 MGM Mirage, Inc. 8.375 2/1/2011 1,256,375
300,000 Starwood Hotels & Resorts 6.750 11/15/2003 304,500
800,000 Starwood Hotels & Resorts Worldwide, Inc. 7.375 5/1/2007 836,000
100,000 Starwood Hotels & Resorts Worldwide, Inc. 7.875 5/1/2012 104,625
900,000 TRW Automotive, Inc. 9.375 2/15/2013 983,250
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Cyclical 11,643,644
=========================================================================================================================
Consumer Non-Cyclical (8.2%)
- -------------------------------------------------------------------------------------------------------------------------
1,050,000 Beverly Enterprises, Inc. 9.000 2/15/2006 934,500
750,000 DaVita Total Renal Care Holdings, Inc. 7.000 5/15/2009 764,063
550,000 Dimon, Inc. 9.625 10/15/2011 599,500
600,000 Elan Finance Corporation, Ltd. 0.000 12/14/2018 318,000
625,000 Extendicare Health Services, Inc. 9.350 12/15/2007 506,250
500,000 Foamex, LP, Capital Corporation 10.750 4/1/2009 350,000
1,750,000 Fresenius Medical Care Capital Trust II 7.875 2/1/2008 1,828,743
50,000 Fresenius Medical Care Capital Trust IV 7.875 6/15/2011 52,250
460,000 HCA Healthcare Company 7.875 2/1/2011 517,718
700,000 HEALTHSOUTH Corporation(d) 8.500 2/1/2008 446,250
600,000 Ingles Markets, Inc. 8.875 12/1/2011 612,000
750,000 Moore North American Finance, Inc. 7.875 1/15/2011 798,750
850,000 PacifiCare Health Systems, Inc. 10.750 6/1/2009 941,375
600,000 Rotech Healthcare, Inc. 9.500 4/1/2012 609,000
925,000 Roundy's, Inc. 8.875 6/15/2012 952,750
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Non-Cyclical 10,231,149
=========================================================================================================================
Energy (8.4%)
- -------------------------------------------------------------------------------------------------------------------------
600,000 Amerigas Partners, LP(b) 8.830 4/19/2010 633,491
550,000 BRL Universal Equipment Corporation 8.875 2/15/2008 596,750
500,000 Calpine Corporation(b) 7.625 4/15/2006 387,500
150,000 Chesapeake Energy Corporation 8.500 3/15/2012 159,000
600,000 Chesapeake Energy Corporation 9.000 8/15/2012 669,000
300,000 Chesapeake Energy Corporation 7.500 9/15/2013 318,750
100,000 Chesapeake Energy Corporation 7.750 1/15/2015 107,000
700,000 Colorado Interstate Gas 6.850 6/15/2037 701,750
800,000 Dresser, Inc. 9.375 4/15/2011 824,000
150,000 Giant Industries, Inc. 11.000 5/15/2012 142,500
900,000 Hanover Equipment Trust 8.500 9/1/2008 918,000
600,000 Newpark Resources, Inc. 8.625 12/15/2007 601,500
200,000 Pemex Project Funding Master Trust 7.375 12/15/2014 217,000
400,000 Pride International, Inc. 9.375 5/1/2007 416,000
600,000 SESI, LLC 8.875 5/15/2011 636,000
941,096 South Point Energy Center, LLC/Broad River Energy,
LLC/Rockgen Energy, LLC 8.400 5/30/2012 842,281
650,000 Southern California Edison Company 8.000 2/15/2007 708,500
700,000 Tesoro Escrow Corporation 9.625 4/1/2012 672,000
7,473 TransTexas Gas Corporation(b,c) 15.000 3/15/2005 2,616
150,000 Vintage Petroleum, Inc. 8.625 2/1/2009 154,125
400,000 Vintage Petroleum, Inc. 7.875 5/15/2011 410,500
400,000 Vintage Petroleum, Inc. 8.250 5/1/2012 427,000
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 10,545,263
=========================================================================================================================
Finance (4.7%)
- -------------------------------------------------------------------------------------------------------------------------
600,000 Bluewater Finance, Ltd. 10.250 2/15/2012 615,000
861,750 Cedar Brakes II, LLC 9.875 9/1/2013 775,575
550,000 Choctaw Resort Development Enterprise 9.250 4/1/2009 588,500
1,950,000 FINOVA Group, Inc. 7.500 11/15/2009 780,000
600,000 Gemstone Investor, Ltd. 7.710 10/31/2004 577,500
600,000 H&E Equipment Services 11.125 6/15/2012 519,000
225,000 JET Equipment Trust 10.000 6/15/2012 69,750
241,687 JET Equipment Trust 7.630 8/15/2012 107,868
550,000 Riggs Capital Trust II 8.875 3/15/2027 530,750
350,000 Universal City Development Services 11.750 4/1/2010 377,125
800,000 Ventas Realty, LP, Capital Corporation 8.750 5/1/2009 850,000
- -------------------------------------------------------------------------------------------------------------------------
Total Finance 5,791,068
=========================================================================================================================
Non-Corporate (5.1%)
- -------------------------------------------------------------------------------------------------------------------------
1,176,000 Brazilian Government International, Variable Rate 2.125 4/15/2006 1,102,345
2,462,820 Brazilian Government International 8.000 4/15/2014 2,154,968
250,000 Mexico Government International 6.375 1/16/2013 261,875
350,000 Mexico Government International 8.000 9/24/2022 387,625
650,000 Peru Government International 9.125 2/21/2012 706,615
550,000 Republic of Panama 9.375 7/23/2012 625,625
250,000 Republic of Peru 9.125 1/15/2008 277,500
950,000 Russian Federation(c) 5.000 3/31/2030 855,000
- -------------------------------------------------------------------------------------------------------------------------
Total Non-Corporate 6,371,553
=========================================================================================================================
Other (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
550,000 Johnsondiversey, Inc. 9.625 5/15/2012 606,375
850,000 SPX Corporation 7.500 1/1/2013 926,500
- -------------------------------------------------------------------------------------------------------------------------
Total Other 1,532,875
=========================================================================================================================
Technology (0.2%)
- -------------------------------------------------------------------------------------------------------------------------
339,000 Solectron Corporation Zero Coupon 5/8/2020 209,756
- -------------------------------------------------------------------------------------------------------------------------
Total Technology 209,756
=========================================================================================================================
Transportation (1.5%)
- -------------------------------------------------------------------------------------------------------------------------
500,000 Continental Airlines, Inc. 7.373 12/15/2015 291,509
500,000 Dunlop Standard Aerospace Holdings plc 11.875 5/15/2009 520,000
600,000 United Airlines, Inc.(e) 6.602 9/1/2013 420,595
450,000 United Airlines, Inc.(e) 7.730 7/1/2010 311,522
454,477 US Airways Pass Through Trust Company 8.360 1/20/2019 367,071
- -------------------------------------------------------------------------------------------------------------------------
Total Transportation 1,910,697
=========================================================================================================================
Utilities (14.0%)
- -------------------------------------------------------------------------------------------------------------------------
400,000 AmeriGas Eagle Finance Corporation 10.000 4/15/2006 433,000
300,000 Calpine Steers Corporation, Variable Rate 6.965 5/27/2003 291,000
200,000 Centerpoint Energy Resources 7.875 4/1/2013 229,500
1,175,000 CMS Energy Corporation 7.000 1/15/2005 1,139,750
100,000 CMS Panhandle Holding Company 6.500 7/15/2009 102,250
200,000 CMS Panhandle Holding Company 7.000 7/15/2029 200,000
350,000 Coastal Corporation 7.750 6/15/2010 308,000
200,000 Coastal Corporation 9.625 5/15/2012 187,000
700,000 Dynegy-Roseton Danskamme(b) 7.270 11/8/2010 616,000
600,000 Edison International, Inc. 6.875 9/15/2004 603,000
700,000 Edison Midwest Generation, LLC 8.300 7/2/2009 688,074
975,000 Edison Midwest Generation, LLC 8.560 1/2/2016 906,732
400,000 El Paso Corporation 7.875 6/15/2012 354,000
250,000 El Paso Corporation 7.800 8/1/2031 197,500
1,005,000 El Paso Corporation 7.750 1/15/2032 793,950
100,000 El Paso Energy Partners, LP 8.500 6/1/2010 107,750
250,000 El Paso Energy Partners, LP 8.500 6/1/2011 269,375
850,000 Ferrellgas Partners, LP 8.750 6/15/2012 918,000
150,000 Ipalco Enterprises, Inc. 7.375 11/14/2008 162,375
500,000 Ipalco Enterprises, Inc. 7.625 11/14/2011 541,250
550,000 Leviathan Finance Corporation 10.375 6/1/2009 594,000
250,000 Noram Energy Corporation, Variable Rate 6.375 11/1/2003 254,375
300,000 PSEG Energy Holdings, Inc. 10.000 10/1/2009 339,000
900,000 PSEG Energy Holdings, Inc. 8.500 6/15/2011 972,000
950,000 Reliant Energy Resources 7.750 2/15/2011 1,056,875
687,678 Rocky River Private Placement(b) 8.810 4/14/2007 786,947
1,125,000 TXU Corporation - Pinnacle Partners 8.830 8/15/2004 1,187,331
800,000 TXU Energy Company 7.000 3/15/2013 883,401
500,000 Williams Companies, Inc. 7.625 7/15/2019 452,500
750,000 Williams Companies, Inc. 7.875 9/1/2021 686,250
250,000 Williams Companies, Inc. 7.500 1/15/2031 218,750
300,000 Williams Companies, Inc. 7.750 6/15/2031 270,000
700,000 Williams Companies, Inc. 8.750 3/15/2032 682,500
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 17,432,435
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $115,043,973) 119,442,489
=========================================================================================================================
Shares Common Stock(f) Value
- -------------------------------------------------------------------------------------------------------------------------
1 Abraxas Petroleum Corporation* $1
750 Arcadia Financial, Ltd. Stock Warrants* 8
3,382 ICG Communications, Inc.* 18,939
548 ICG Communications, Inc. Rights* 110
833 Orion Refining Corporation* --
5,931 TransTexas Gas Corporation(b)* 25
500 Unifi Communications, Inc. Stock Warrants*(b) 5
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $45,579) 19,088
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (4.3%) Interest Rate(g) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$400,000 Federal Home Loan Mortgage Corporation 1.170% 7/10/2003 $399,090
1,300,000 Federal Home Loan Mortgage Corporation 1.150 7/15/2003 1,296,886
100,000 Federal National Mortgage Association 1.160 7/9/2003 99,778
300,000 Federal National Mortgage Association 1.195 8/11/2003 298,984
1,200,000 General Electric Capital Corporation 1.250 7/23/2003 1,196,568
1,300,000 HBOS Treasury Services 1.250 7/16/2003 1,296,569
803,344 SSgA Money Market Fund 0.930 N/A 803,344
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 5,391,219
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $120,480,771) $124,852,796
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of total investments.
(b) Denotes restricted securities. These securities have been valued from the date of acquisition through April 30, 2003, by obtaining quotation from brokers who are active with these securities. The following table indicates the acquisition date and cost of restricted securities the Fund owned as of April 30, 2003.
Acquisition
Security Date Cost
- -------------------------------------------------------------------------------------------------------------------------
American Cellular 5/31/2001 $1,197,214
Amerigas Partnters, LP 5/10/2002 614,483
Calpine Corporation 5/8/2002 492,266
Dynegy-Roseton Danskamme 10/28/2002 438,608
Nextel Communications, Bank Term Loan B 10/31/2002 444,438
Nextel Communications, Bank Term Loan C 10/31/2002 443,626
Owens-Brockway Glass Container, Inc. -- 7.75% 4/29/2003 125,000
Owens-Brockway Glass Container, Inc. -- 8.25% 4/29/2003 125,000
Rocky River Private Placement 12/12/2000 678,525
TransTexas Gas Corporation 6/17/1998 51,683
TransTexas Gas Corporation Common Stock 6/17/1998 3,404
Unifi Communications, Inc., Stock Warrants 2/14/1997 6,525
- -------------------------------------------------------------------------------------------------------------------------
(c) Step coupon bond.
(d) Non-income producing and in bankruptcy.
(e) In bankruptcy.
(f) The market value of the denoted category of investments represents less than 0.1% of the total investments of The AAL High Yield Bond Fund.
(g) The interest rate shown reflects yield, or for securities purchased at a discount, the discount rate at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Municipal Bond Fund
Schedule of Investments as of April 30, 2003 (a)
Principal
Amount Long-Term Fixed Income (95.0%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Alabama (1.6%)
- -------------------------------------------------------------------------------------------------------------------------
$1,000,000 Alabama 21st Century Authority Tobacco Settlement
Revenue Bonds 5.750% 12/1/2020 $868,870
10,000,000 Huntsville, Alabama Health Care Authority
Revenue Bonds (Series B) 5.750 6/1/2032 10,196,884
- -------------------------------------------------------------------------------------------------------------------------
Total Alabama 11,065,754
=========================================================================================================================
Alaska (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
4,100,000 Northern Tobacco Securitization Corporation, Alaska
Tobacco Settlement Revenue Bonds 6.200 6/1/2022 3,839,650
- -------------------------------------------------------------------------------------------------------------------------
Total Alaska 3,839,650
=========================================================================================================================
Arizona (1.6%)
- -------------------------------------------------------------------------------------------------------------------------
695,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing) (FGIC Insured) 4.000 6/1/2003 696,404
720,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing) (FGIC Insured) 4.000 6/1/2004 741,334
750,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing) (FGIC Insured) 4.000 6/1/2005 788,265
780,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing) (FGIC Insured) 4.250 6/1/2006 838,555
815,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing) (FGIC Insured) 4.500 6/1/2007 885,603
975,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing) (FGIC Insured) 5.000 6/1/2011 1,078,721
1,020,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing) (FGIC Insured) 5.000 6/1/2012 1,125,896
1,000,000 Maricopa County, Arizona Elementary School District
#068 Alhambra General Obligation Bonds (AMBAC
Insured)(b) 5.125 7/1/2012 1,060,170
320,000 Phoenix, Arizona Industrial Development Authority
Single Family Mortgage Revenue Bonds (Series 1A)
(GNMA/FNMA/FHLMC Insured) 5.875 6/1/2016 332,387
1,500,000 Pima County, Arizona Industrial Development Authority
Educational Revenue Bonds (Arizona Charter Schools
Project) 6.750 7/1/2031 1,496,070
1,285,000 Pima County, Arizona Industrial Development Authority
Multifamily Bonds (La Hacienda Project) (GNMA/FHA
Insured) 7.000 12/20/2031 1,469,333
- -------------------------------------------------------------------------------------------------------------------------
Total Arizona 10,512,738
=========================================================================================================================
Arkansas (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,400,000 Arkansas State Community Water System Public Water
Authority Revenue (Series B) (MBIA Insured) 5.000 10/1/2023 1,444,884
590,000 Arkansas State Development Finance Authority Single
Family Mortgage Revenue Bonds (Series F) (GNMA
Insured) (Subject to 'AMT') 7.450 1/1/2027 612,597
- -------------------------------------------------------------------------------------------------------------------------
Total Arkansas 2,057,481
=========================================================================================================================
California (8.5%)
- -------------------------------------------------------------------------------------------------------------------------
985,000 California Rural Home Mortgage Finance Authority
Single Family Mortgage Revenue Bonds (Series D)
(GNMA/FNMA Insured)(Subject to 'AMT') 7.100 6/1/2031 1,079,343
5,000,000 California State Department of Water Resources Supply
Revenue Bonds (Series A) (AMBAC Insured) 5.375 5/1/2018 5,503,750
4,030,000 Contra Costa County, California Home Mortgage
Revenue Bonds (GNMA Insured)(b) 7.500 5/1/2014 5,507,197
1,335,000 Foothill/Eastern Transportation Corridor Agency
California Toll Road Revenue Bonds (Series A) Zero Coupon 1/1/2005 1,299,169
5,000,000 Foothill/Eastern Transportation Corridor Agency
California Toll Road Revenue Bonds (Series A)(c) Zero Coupon 1/1/2009 5,500,850
5,000,000 Foothill/Eastern Transportation Corridor Agency
California Toll Road Revenue Bonds (Series A)(c) Zero Coupon 1/1/2011 5,636,700
6,000,000 Foothill/Eastern Transportation Corridor Agency
California Toll Road Revenue Bonds (Series A)(c) Zero Coupon 1/1/2013 6,777,060
7,145,000 Foothill/Eastern Transportation Corridor Agency
California Toll Road Revenue Bonds (Series A)(c) Zero Coupon 1/1/2014 8,070,349
420,000 Golden West Schools Financing Authority California
Revenue Bonds (Series A) (MBIA Insured) 5.800 2/1/2022 495,146
740,000 Los Angeles, California Department of Water and Power
Electric Plant Revenue Bonds(b) 6.100 2/15/2017 810,818
170,000 Los Angeles, California Department of Water and Power
Electric Plant Revenue Bonds (FGIC Insured)(b) 5.375 9/1/2023 175,182
260,000 Los Angeles, California Department of Water and Power
Electric Plant Unrefunded Revenue Bonds 6.100 2/15/2017 280,790
2,000,000 Los Angeles, California Unified School District
Revenue Bonds (MBIA-Series A) 5.000 7/1/2021 2,109,920
4,200,000 Pomona, California Single Family Mortgage
Revenue Bonds (Series A) (GNMA/FNMA Insured)(b) 7.600 5/1/2023 5,642,700
3,480,000 Sacramento County, California Single Family Mortgage
Revenue Bonds (Subject to 'AMT')(b) 8.250 1/1/2021 5,091,692
1,500,000 San Bernardino County, California Single Family
Mortgage Revenue Bonds (Series A) (GNMA Insured)(b) 7.500 5/1/2023 2,008,215
2,980,000 Union, California Elementary School District Capital
Appreciation Bonds (Series B) (FGIC Insured) Zero Coupon 9/1/2025 929,075
2,845,000 Union, California Elementary School District Capital
Appreciation Bonds (Series B) (FGIC Insured) Zero Coupon 9/1/2026 836,146
- -------------------------------------------------------------------------------------------------------------------------
Total California 57,754,102
=========================================================================================================================
Colorado (5.7%)
- -------------------------------------------------------------------------------------------------------------------------
1,930,000 Bexar County, Texas Housing Finance Corporation
Multi-Family Housing Revenue Bonds (Dymaxion and
Marrach Park Apartments) (Series A) (MBIA Insured) 6.000 8/1/2023 2,072,704
2,000,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Bromley East Project)
(Series A) 7.250 9/15/2030 2,134,240
570,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Cherry Creek Academy
Facility, Inc.) 6.000 4/1/2021 578,573
1,280,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Cherry Creek Academy
Facility, Inc.) 6.000 4/1/2030 1,295,194
2,825,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Classical Academy) 7.250 12/1/2030 3,018,513
920,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Pinnacle Charter School
Project) 5.250 12/1/2011 930,976
750,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (University Lab School
Project) 6.125 6/1/2021 761,205
5,250,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (University Lab School
Project) 6.250 6/1/2031 5,322,923
1,000,000 Colorado Health Facilities Authority Revenue Bonds
(Evangelical Lutheran Good Samaritan) 6.250 12/1/2010 1,133,420
2,000,000 Colorado Health Facilities Authority Revenue Bonds
(Evangelical Lutheran Good Samaritan) 6.800 12/1/2020 2,193,760
620,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series A-2) (Subject to
'AMT') 7.450 10/1/2016 657,051
385,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series A-3) 7.250 4/1/2010 406,964
400,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series A-3) 6.300 8/1/2012 434,712
2,200,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series B-3) 6.700 8/1/2017 2,409,484
495,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series C-3) (FHA/VA Insured) 7.150 10/1/2030 529,140
3,525,000 Colorado Water Resources and Power Development
Authority Small Water Resources Revenue Bonds
(Series A) (FGIC Insured) 5.250 11/1/2021 3,790,644
200,000 Denver, Colorado Health and Hospital Authority
Healthcare Revenue Bonds (Series A) 5.250 12/1/2010 212,994
200,000 Denver, Colorado Health and Hospital Authority
Healthcare Revenue Bonds (Series A) 5.250 12/1/2011 206,182
2,000,000 Denver, Colorado Health and Hospital Authority
Healthcare Revenue Bonds (Series A) 6.250 12/1/2016 2,163,120
500,000 Denver, Colorado Health and Hospital Authority
Healthcare Revenue Bonds (Series A) 6.000 12/1/2023 511,170
1,350,000 Denver, Colorado Health and Hospital Authority
Healthcare Revenue Bonds (Series A) 6.000 12/1/2031 1,370,061
4,000,000 Northwest Parkway Public Highway Authority Colorado
Capital Appreciation Revenue Bonds (Series C) (AMBAC
Insured) Zero Coupon 6/15/2021 2,840,720
3,500,000 Regional Transportation District, Colorado, Sales Tax
Revenue Bonds (Series B) (AMBAC Insured) 5.500 11/1/2021 3,857,315
- -------------------------------------------------------------------------------------------------------------------------
Total Colorado 38,831,065
=========================================================================================================================
Connecticut (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Connecticut State Health and Educational Facilities
Authority Revenue (Yale University) (Series W) 5.125 7/1/2027 2,062,860
- -------------------------------------------------------------------------------------------------------------------------
Total Connecticut 2,062,860
=========================================================================================================================
District of Columbia (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
8,785,000 District of Columbia Tobacco Settlement Financing
Corporation Revenue Bonds 6.250 5/15/2024 7,964,569
- -------------------------------------------------------------------------------------------------------------------------
Total District of Columbia 7,964,569
=========================================================================================================================
Florida (3.8%)
- -------------------------------------------------------------------------------------------------------------------------
1,904,000 Brevard County, Florida Housing Finance Authority
Homeowner Mortgage Revenue Bonds (Series B) (GNMA
Insured) 6.500 9/1/2022 2,110,375
2,410,000 Clay County, Florida Housing Finance Authority Single
Family Mortgage Revenue Bonds (GNMA/FNMA Insured)
(Subject to 'AMT') 6.000 4/1/2029 2,516,835
3,225,000 Escambia County, Florida Health Facilities Authority
Revenue Bonds (Azalea Trace, Inc.) 6.000 1/1/2015 3,270,634
620,000 Florida State Board of Education Capital Outlay
Unrefunded General Obligation Bonds (MBIA Insured) 9.125 6/1/2014 913,186
2,000,000 Highlands County, Florida Health Facilities Authority
Revenue Bonds (Adventist Health System/Sunbelt, Inc.)
(Series A) 6.000 11/15/2031 2,109,880
265,000 Hillsborough County, Florida Industrial Development
Authority Revenue Bonds (Health Facilities Project-
University Community Hospital) (Series A) 4.500 8/15/2003 266,675
1,145,000 Leon County, Florida Educational Facilities Authority
Certificates of Participation(b) 8.500 9/1/2017 1,708,981
1,390,000 Manatee County, Florida Housing Finance Authority
Single Family Mortgage Revenue Bonds (Series 1)
(GNMA/FNMA/ FHLMC Insured) (Subject to 'AMT') 7.200 5/1/2028 1,524,802
1,320,000 Orange County, Florida Health Facilities Authority
Revenue Bonds (Adventist Health Systems) 5.750 11/15/2008 1,495,283
1,000,000 Orange County, Florida Health Facilities Authority
Revenue Bonds (Adventist Health Systems) 5.850 11/15/2010 1,134,110
2,000,000 Orange County, Florida Health Facilities Authority
Revenue Bonds (Orlando Regional Healthcare System)
(Series A) (MBIA Insured) 6.250 10/1/2018 2,477,140
1,530,000 Orange County, Florida Housing Finance Authority
Homeowner Revenue Bonds (Series B-1) (GNMA/FNMA
Insured) (Subject to 'AMT') 5.900 9/1/2028 1,618,985
1,155,000 Palm Beach County, Florida Housing Finance Authority
Single Family Homeowner Revenue Bonds (Series A-1)
(GNMA/FNMA Insured) (Subject to 'AMT') 5.900 10/1/2027 1,222,175
1,335,000 Pinellas County, Florida Housing Finance Authority
Single Family Housing Revenue Bonds (Multi-County
Program) (Series B-1) (Subject to 'AMT) 7.250 9/1/2029 1,411,883
1,980,000 Pinellas County, Florida Housing Finance Authority
Single Family Housing Revenue Bonds (Series A-1)
(GNMA/FNMA Insured) (Subject to 'AMT') 7.200 9/1/2029 2,157,923
- -------------------------------------------------------------------------------------------------------------------------
Total Florida 25,938,867
=========================================================================================================================
Georgia (0.2%)
- -------------------------------------------------------------------------------------------------------------------------
1,500,000 Savannah, Georgia Economic Development Authority
Student Housing Revenue Bonds (State University
Project) (Series A) (ACA Insured) 6.750 11/15/2020 1,653,870
- -------------------------------------------------------------------------------------------------------------------------
Total Georgia 1,653,870
=========================================================================================================================
Hawaii (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
2,555,000 Honolulu, Hawaii City & County Revenue Bonds
(Unrefunded Balance) (Series A) (FGIC Insured) 6.250 4/1/2014 3,124,280
- -------------------------------------------------------------------------------------------------------------------------
Total Hawaii 3,124,280
=========================================================================================================================
Illinois (10.6%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Broadview, Illinois Tax Increment Tax Allocation
Bonds 5.250 7/1/2012 2,061,720
1,000,000 Broadview, Illinois Tax Increment Tax Allocation
Revenue Bonds 5.375 7/1/2015 1,024,010
600,000 Chicago, Illinois Single Family Mortgage
Revenue Bonds (Series A) (GNMA/FNMA/FHLMC Insured)
(Subject to 'AMT') 7.250 9/1/2028 623,778
2,570,000 Chicago, Illinois Single Family Mortgage
Revenue Bonds (Series C) (GNMA/FNMA/FHLMC Insured)
(Subject to 'AMT') 7.050 10/1/2030 2,734,531
1,055,000 Chicago, Illinois Single Family Mortgage
Revenue Bonds (Series C) (GNMA/FNMA/FHLMC Insured)
(Subject to 'AMT') 7.000 3/1/2032 1,134,114
7,200,000 Chicago, Illinois Tax Increment Capital Appreciation
Tax Allocation Bonds (Series A) (ACA Insured) Zero Coupon 11/15/2014 4,083,984
1,000,000 Cook County, Illinois Community Consolidated School
District #15 Palatine Capital Appreciation General
Obligation Bonds (FGIC Insured) Zero Coupon 12/1/2014 601,700
1,250,000 Cook County, Illinois School District #99 Cicero
General Obligation Bonds (FGIC Insured) 8.500 12/1/2011 1,705,575
1,565,000 Cook County, Illinois School District #99 Cicero
General Obligation Bonds (FGIC Insured) 8.500 12/1/2014 2,257,544
1,815,000 Cook County, Illinois School District #99 Cicero
General Obligation Bonds (FGIC Insured) 8.500 12/1/2016 2,681,136
1,000,000 Du Page County, Illinois General Obligation Bonds
(Stormwater Project) 5.600 1/1/2021 1,154,320
1,000,000 Illinois Development Finance Authority Revenue Bonds
(Midwestern University) (Series B) 6.000 5/15/2021 1,078,490
2,365,000 Illinois Development Finance Authority Revenue Bonds
(School District #304) (Series A) (FSA Insured) Zero Coupon 1/1/2021 972,441
4,900,000 Illinois Educational Facilities Authority
Revenue Bonds (Northwestern University) 5.250 11/1/2032 5,605,649
380,000 Illinois Health Facilities Authority Revenue Bonds
(Series B) (MBIA Insured)(b) 5.250 8/15/2018 435,906
1,600,000 Illinois Health Facilities Authority Revenue Bonds
(Bethesda Home and Retirement) (Series A) 6.250 9/1/2014 1,686,336
2,000,000 Illinois Health Facilities Authority Revenue Bonds
(Centegra Health Systems) 5.250 9/1/2018 1,998,460
2,500,000 Illinois Health Facilities Authority Revenue Bonds
(Passavant Memorial Area Hospital Association) 6.000 10/1/2024 2,576,825
1,000,000 Illinois Health Facilities Authority Revenue Bonds
(Riverside Health System) 6.850 11/15/2029 1,087,070
4,180,000 Illinois Health Facilities Authority Revenue Bonds
(Rush-Presbyterian-St. Lukes) (Series A) (MBIA
Insured) 5.250 11/15/2014 4,516,992
2,000,000 Illinois Health Facilities Authority Revenue Bonds
(Swedish American Hospital) 6.875 11/15/2030 2,168,340
4,655,000 Illinois Health Facilities Authority Revenue Bonds
(Thorek Hospital and Medical Center) 5.250 8/15/2018 4,348,934
2,120,000 Illinois Health Facilities Authority Unrefunded
Revenue Bonds (Series B) (MBIA Insured) 5.250 8/15/2018 2,257,291
3,065,000 Illinois State Sales Tax Revenue Bonds (Series L) 7.450 6/15/2012 3,963,474
2,200,000 Kane, McHenry, Cook and DeKalb Counties, Illinois
School District #300 Capital Appreciation General
Obligation Bonds Zero Coupon 12/1/2021 857,560
3,035,000 McHenry County, Illinois Community High School
District#157 General Obligation Bonds (FSA Insured) 9.000 12/1/2017 4,672,443
4,000,000 McLean County, Illinois Bloomington-- Normal Airport
Central Illinois Regional Authority Revenue Bonds
(Subject to 'AMT') 6.050 12/15/2019 3,693,760
1,115,000 Metropolitan Pier and Exposition Authority Illinois
State Tax Revenue Bonds (McCormick Place Exposition
Project) (Series A)(b) 5.500 6/15/2015 1,304,684
885,000 Metropolitan Pier and Exposition Authority Illinois
State Tax Revenue Bonds (McCormick Place Exposition
Project) (Series A) (FGIC Insured) 5.500 6/15/2015 1,026,945
3,100,000 Metropolitan Pier and Exposition Authority Illinois
State Tax Revenue Bonds (McCormick Place Exposition
Project) (Series A) (MBIA Insured) Zero Coupon 6/15/2024 1,017,265
2,000,000 Metropolitan Pier and Exposition Authority Illinois
State Tax Revenue Bonds (McCormick Place Exposition
Project) (Series A) (MBIA Insured) Zero Coupon 12/15/2024 639,200
2,000,000 Metropolitan Pier and Exposition Authority Illinois
State Tax Revenue Bonds (McCormick Place Exposition
Project) (Series B) (MBIA Insured) Zero Coupon 6/15/2020 1,332,440
3,000,000 Regional Transportation Authority Illinois
Revenue Bonds (Series A) (FGIC Insured) 6.700 11/1/2021 3,854,790
500,000 Southwestern Illinois Development Authority
Revenue Bonds (Anderson Hospital) 5.625 8/15/2029 479,805
- -------------------------------------------------------------------------------------------------------------------------
Total Illinois 71,637,512
=========================================================================================================================
Indiana (1.8%)
- -------------------------------------------------------------------------------------------------------------------------
1,250,000 East Chicago, Indiana Elementary School Building
Corporation Revenue Bonds 6.250 1/5/2016 1,490,750
405,000 Indiana State Housing Authority Single Family
Mortgage Revenue Bonds (Series C-2) (GNMA Insured) 5.250 7/1/2017 418,632
510,000 Indiana Transportation Finance Authority Airport
Facilities Lease Revenue Bonds (Series A) 5.400 11/1/2006 561,337
570,000 Indiana Transportation Finance Authority Highway
Revenue Bonds (Series A) (AMBAC Insured)(b) 5.750 6/1/2012 667,801
985,000 Indiana Transportation Finance Authority Highway
Revenue Bonds (Series A) (MBIA Insured)(b) 7.250 6/1/2015 1,245,129
250,000 Indiana Transportation Finance Authority Highway
Revenue Bonds (Series A) 6.800 12/1/2016 315,513
3,565,000 Indiana Transportation Finance Authority Highway
Unrefunded Revenue Bonds (Series A) (MBIA Insured) 7.250 6/1/2015 4,651,969
2,500,000 Petersburg, Indiana Industrial Pollution Control
Revenue Bonds (Indianapolis Power and Light Company)
(Series A) (MBIA/IBC Insured) 6.100 1/1/2016 2,560,175
- -------------------------------------------------------------------------------------------------------------------------
Total Indiana 11,911,306
=========================================================================================================================
Kansas (1.6%)
- -------------------------------------------------------------------------------------------------------------------------
4,140,000 Kansas City, Kansas Utility System Unrefunded
Revenue Bonds (FGIC Insured)(b) 6.375 9/1/2023 4,477,410
2,500,000 Kansas State Turnpike Authority Turnpike Revenue Bond 5.000 9/1/2025 2,571,825
1,530,000 Sedgwick and Shawnee Counties, Kansas Single Family
Mortgage Revenue Bonds (Series A-2) (GNMA Insured) 6.700 6/1/2029 1,642,302
2,300,000 University of Kansas Hospital Authority Health
Facilities Revenue Bond 5.500 9/1/2022 2,339,422
- -------------------------------------------------------------------------------------------------------------------------
Total Kansas 11,030,959
=========================================================================================================================
Louisiana (3.0%)
- -------------------------------------------------------------------------------------------------------------------------
1,515,000 East Baton Rouge, Louisiana Mortgage Finance
Authority Single Family Revenue Bonds (Series A)
(GNMA/FNMA Insured) (Subject to 'AMT') 6.125 4/1/2026 1,600,537
155,000 East Baton Rouge, Louisiana Mortgage Finance
Authority Single Family Revenue Bonds (Series B-2)
(GNMA/FNMA Insured) (Subject to 'AMT') 6.125 10/1/2022 164,058
3,085,000 Jefferson Parish, Louisiana Home Mortgage Authority
Single Family Mortgage Revenue Bonds (Series A-2)
(GNMA/FNMA Insured) (Subject to 'AMT') 7.500 12/1/2030 3,344,510
1,240,000 Jefferson Parish, Louisiana Home Mortgage Authority
Single Family Mortgage Revenue Bonds (Series D-1)
(GNMA/FNMA Insured) (Subject to 'AMT') 7.500 6/1/2026 1,342,461
1,635,000 Louisiana Housing Finance Agency Single Family
Mortgage Revenue Bonds (Series A-2) (GNMA/FNMA/FHLMC
Insured) (Subject to 'AMT') 7.800 12/1/2026 1,756,186
1,015,000 Louisiana Housing Finance Agency Single Family
Mortgage Revenue Bonds (Series D-2) (GNMA/FNMA
Insured) (Subject to 'AMT') 7.050 6/1/2031 1,097,794
3,000,000 Louisiana Public Facilities Authority Hospital
Revenue Bonds (Lake Charles Memorial) (AMBAC Insured) 8.625 12/1/2030 3,923,160
2,605,000 Regional Transportation Authority Louisiana Sales Tax
Revenue Bonds (Series A) (FGIC Insured) 8.000 12/1/2012 3,525,320
4,200,000 Tobacco Settlement Financing Corporation Louisiana
Revenue Bonds (Series 2001-B) 5.500 5/15/2030 3,391,752
- -------------------------------------------------------------------------------------------------------------------------
Total Louisiana 20,145,778
=========================================================================================================================
Maryland (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
1,550,000 Maryland State Economic Development Corporation
Student Housing Revenue Bonds (Sheppard Pratt) (ACA
Insured) 6.000 7/1/2033 1,666,467
485,000 Prince Georges County, Maryland Housing Authority
Single Family Mortgage Revenue Bonds (Series A)
(GNMA/FNMA/ FHLMC Insured) (Subject to 'AMT') 7.400 8/1/2032 523,979
425,000 Westminster, MD Education Facilities Revenue Bond
(McDaniel College) 5.500 4/1/2027 431,622
- -------------------------------------------------------------------------------------------------------------------------
Total Maryland 2,622,068
=========================================================================================================================
Massachusetts (1.5%)
- -------------------------------------------------------------------------------------------------------------------------
4,935,000 Massachusetts State Construction Lien G.O. Bonds
(Series A) (FGIC Insured) 5.250 1/1/2013 5,566,285
725,000 Massachusetts State Development Finance Agency
Revenue Bonds (Devens Electric Systems) 5.625 12/1/2016 773,445
1,000,000 Massachusetts State Health and Educational Facilities
Authority Revenue Bonds (Partners Healthcare System)
(Series C) 6.000 7/1/2016 1,113,820
1,824,228 Massachusetts State Industrial Finance Agency
Revenue Bonds (Bradford College) (ACA Insured) 5.250 11/1/2018 1,550,594
1,170,000 Westfield, Massachusetts General Obligation Bonds
(FGIC Insured)(b) 6.500 5/1/2014 1,405,767
- -------------------------------------------------------------------------------------------------------------------------
Total Massachusetts 10,409,911
=========================================================================================================================
Michigan (2.3%)
- -------------------------------------------------------------------------------------------------------------------------
515,000 Chelsea, Michigan Economic Development Corporation
Obligation Revenue Bonds (United Methodist
Retirement) 4.800 11/15/2005 507,306
545,000 Chelsea, Michigan Economic Development Corporation
Obligation Revenue Bonds (United Methodist
Retirement) 4.900 11/15/2006 532,252
3,965,000 Chelsea, Michigan Economic Development Corporation
Obligation Revenue Bonds (United Methodist
Retirement) 5.400 11/15/2027 3,454,348
1,350,000 Dickinson County, Michigan Healthcare System Hospital
Revenue Bonds 5.500 11/1/2013 1,354,793
250,000 Dickinson County, Michigan Healthcare System Hospital
Revenue Bonds 5.700 11/1/2018 241,875
2,000,000 East Lansing, Michigan Building Authority General
Obligation Bonds 5.700 4/1/2020 2,363,300
1,000,000 Grand Valley, Michigan State University Revenue Bonds
(MBIA Insured) 5.250 10/1/2017 1,074,350
260,000 Hillsdale, Michigan Hospital Finance Authority
Revenue Bonds (Hillsdale Community Health Center) 4.700 5/15/2004 258,557
135,000 Hillsdale, Michigan Hospital Finance Authority
Revenue Bonds (Hillsdale Community Health Center) 4.800 5/15/2005 133,564
1,380,000 Michigan Public Power Agency Revenue Bonds
(Combustion Turbine #1 Project) (Series A) (AMBAC
Insured) 5.250 1/1/2016 1,508,644
950,000 Michigan State Hospital Finance Authority
Revenue Bonds (Hackley Hospital) (Series A) 4.800 5/1/2005 985,198
990,000 Summit Academy North Michigan Public School Academy
Certificates of Participation 6.550 7/1/2014 1,014,097
690,000 Summit Academy North Michigan Public School Academy
Certificates of Participation 8.375 7/1/2030 734,236
1,000,000 Trenton, Michigan Building Authority General
Obligation Bonds (AMBAC Insured) 5.600 10/1/2019 1,122,900
- -------------------------------------------------------------------------------------------------------------------------
Total Michigan 15,285,420
=========================================================================================================================
Minnesota (1.4%)
- -------------------------------------------------------------------------------------------------------------------------
375,000 Chaska, Minnesota Economic Development Authority
School Facilities Lease Revenue Bonds (Independent
School District #112) (Series A) 5.125 12/1/2010 408,874
5,000,000 Lakeville Minnesota Independent School District #194
(Series B) (FGIC Insured) Zero Coupon 2/1/2016 2,821,050
300,000 Scott County, Minnesota Housing and Redevelopment
Authority Facilities Lease Revenue Bonds (Workforce
Center Project) 5.000 2/1/2017 311,259
525,000 Scott County, Minnesota Housing and Redevelopment
Authority Facilities Lease Revenue Bonds (Workforce
Center Project) 5.000 2/1/2018 542,414
5,000,000 White Earth Band of Chippewa Indians Minnesota
Revenue Bonds (Series A) (ACA Insured) 7.000 12/1/2011 5,556,150
- -------------------------------------------------------------------------------------------------------------------------
Total Minnesota 9,639,747
=========================================================================================================================
Missouri (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
785,000 Missouri State Development Finance Board
Infrastructure Facilities Revenue Bonds (Eastland
Center Project Phase II Series B) 5.875 4/1/2017 835,640
500,000 Missouri State Development Finance Board
Infrastructure Facilities Revenue Bonds (Eastland
Center Project Phase II Series B) 6.000 4/1/2021 528,570
1,000,000 Missouri State Environmental Improvement and Energy
Resources Authority Water Pollution Revenue Bonds
(Series A) 5.250 1/1/2018 1,105,600
1,180,000 Missouri State Health and Educational Facilities
Authority Revenue Bonds (Bethesda Health)
(Series A)(b) 7.500 8/15/2012 1,298,484
2,195,000 Missouri State Health and Educational Facilities
Authority Revenue Bonds (Bethesda Health)
(Series A)(b) 7.500 8/15/2012 2,415,400
925,000 Missouri State Housing Development Commission Single
Family Mortgage Revenue Bonds (Series B-1) (GNMA/FNMA
Insured) (Subject to 'AMT') 7.450 9/1/2031 1,003,903
1,470,000 Missouri State Housing Development Commission Single
Family Mortgage Revenue Bonds (Series C-1) (GNMA/FNMA
Insured) (Subject to 'AMT') 7.150 3/1/2032 1,592,289
- -------------------------------------------------------------------------------------------------------------------------
Total Missouri 8,779,886
=========================================================================================================================
Montana (0.9%)
- -------------------------------------------------------------------------------------------------------------------------
205,000 Montana State Board of Housing Single Family Mortgage
Revenue Bonds (Series A-1) 6.000 6/1/2016 218,835
785,000 Montana State Board of Housing Single Family Mortgage
Revenue Bonds (Series A-2) (Subject to 'AMT') 6.250 6/1/2019 828,206
1,340,000 Montana State Board of Regents Revenue Bonds (Higher
Education-University of Montana) (Series F) (MBIA
Insured) 5.750 5/15/2016 1,545,717
3,000,000 Montana State Health Facilities Authority
Revenue Bonds (Hillcrest Senior Living Project) 7.375 6/1/2030 3,179,310
- -------------------------------------------------------------------------------------------------------------------------
Total Montana 5,772,068
=========================================================================================================================
Nebraska (0.8%)
- -------------------------------------------------------------------------------------------------------------------------
500,000 American Public Energy Agency, Nebraska Gas Supply
Revenue Bonds (Nebraska Public Gas Agency Project)
(Series C) (AMBAC Insured) 4.000 9/1/2004 517,900
170,000 American Public Energy Agency, Nebraska Gas Supply
Revenue Bonds (Nebraska Public Gas Agency Project)
(Series C) (AMBAC Insured) 4.300 3/1/2011 179,493
2,500,000 Nebraska Public Power District Revenue Bonds
(Series B) (AMBAC Insured) 5.000 1/1/2013 2,769,325
1,675,000 Omaha, Nebraska Special Assessment Bonds (Riverfront
Redevelopment Project) (Series A) 5.500 2/1/2015 1,909,684
- -------------------------------------------------------------------------------------------------------------------------
Total Nebraska 5,376,402
=========================================================================================================================
Nevada (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Washoe County, Nevada General Obligation Bonds
(Reno-Sparks Convention) (Series A) (FSA Insured)(b) 6.400 7/1/2029 3,007,575
- -------------------------------------------------------------------------------------------------------------------------
Total Nevada 3,007,575
=========================================================================================================================
New Jersey (1.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Hudson County New Jersey Certificate Of Participation
Department of Finance and Administration (MBIA
Insured) 6.250 12/1/2015 2,472,260
5,000,000 New Jersey Transportation Trust Fund Authority
Revenue Bond (Transportation System) (Series A) (FSA
Insured) 5.500 12/15/2016 5,820,700
4,570,000 Tobacco Settlement Authority, New Jersey Tobacco
Settlement Revenue Bonds 5.375 6/1/2018 3,808,638
- -------------------------------------------------------------------------------------------------------------------------
Total New Jersey 12,101,598
=========================================================================================================================
New Mexico (1.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,525,000 New Mexico Mortgage Finance Authority Revenue Bonds
(Series F) (GNMA/FNMA Insured) 7.000 1/1/2026 2,815,097
695,000 New Mexico Mortgage Finance Authority Single Family
Mortgage Capital Appreciation Revenue Bonds
(Series D-2) (Subject to 'AMT') Zero Coupon 9/1/2019 506,419
3,090,000 New Mexico Mortgage Finance Authority Single Family
Mortgage Revenue Bonds (Series C-2) (GNMA/FNMA
Insured) (Subject to 'AMT') 6.950 9/1/2031 3,384,971
- -------------------------------------------------------------------------------------------------------------------------
Total New Mexico 6,706,487
=========================================================================================================================
New York (9.4%)
- -------------------------------------------------------------------------------------------------------------------------
3,500,000 Metropolitan Transportation Authority New York
Revenue Bonds (Series A) (FGIC Insured) 5.000 11/15/2025 3,610,775
3,000,000 Metropolitan Transportation Authority New York
Transportation Facilities Revenue Bonds (Series A) 5.500 7/1/2017 3,450,750
11,000,000 New York City Transitional Finance Authority (Future
Tax Secured) (Series B) 5.250 2/1/2029 11,952,490
1,430,000 New York Counties Tobacco Trust Settlement
Revenue Bonds 5.800 6/1/2023 1,400,571
4,000,000 New York State Dormitory Authority Revenue Bonds
(Series B) 5.250 11/15/2023 4,389,800
2,000,000 New York State Dormitory Authority Revenue Bonds
(State University Educational Facilities) (Series A) 7.500 5/15/2013 2,598,060
5,000,000 New York State Dormitory Authority Revenue Bonds
(State University Educational Facilities) (Series A) 5.875 5/15/2017 5,945,150
2,000,000 New York State Local Government Assistance
Corporation Revenue Bonds (Series E) (MBIA Insured) 5.250 4/1/2016 2,269,180
2,460,000 New York State Mortgage Agency Revenue Bonds
(Series 26) 5.350 10/1/2016 2,496,260
3,000,000 New York State Thruway Authority General
Revenue Bonds (Series E) 5.000 1/1/2016 3,173,580
10,000,000 New York State Urban Development Corporation
Revenue Bonds (Correctional and Youth Facilities)
(Series A) 5.000 1/1/2017 10,688,500
3,000,000 New York, New York City Municipal Transitional
Finance Authority Revenue Bonds (Series A) 5.375 11/15/2021 3,238,830
4,500,000 New York, New York City Municipal Transitional
Finance Authority Revenue Bonds (Series A)(c) 5.500 11/1/2026 4,992,030
3,000,000 New York, New York General Obligation Bonds
(Series H) (FSA/CR Insured) 5.250 3/15/2016 3,246,810
- -------------------------------------------------------------------------------------------------------------------------
Total New York 63,452,786
=========================================================================================================================
North Carolina (3.1%)
- -------------------------------------------------------------------------------------------------------------------------
1,170,000 Fayetteville, North Carolina Public Works Commission
Revenue Bonds (FSA Insured)(b) 5.125 3/1/2017 1,311,020
1,475,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds (Series A)(b) 6.000 1/1/2026 1,773,378
3,000,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds 6.000 1/1/2014 3,071,250
4,000,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds 5.375 1/1/2017 4,133,280
175,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds (Series B) 6.000 1/1/2006 190,400
415,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds (Series B) 6.250 1/1/2012 424,960
370,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds (Series B) 6.000 1/1/2013 378,788
1,960,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds (Series B) 5.500 1/1/2021 1,960,118
1,725,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds (Series D) 5.875 1/1/2013 1,764,485
2,000,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds (Series D) 6.750 1/1/2026 2,194,720
100,000 North Carolina Eastern Municipal Power Agency Power
System Revenue Bonds (Series G) 5.750 12/1/2016 102,820
1,250,000 North Carolina Municipal Power Agency #1 Catawba
Electric Revenue Bonds (Series B) 6.250 1/1/2007 1,389,600
250,000 North Carolina Municipal Power Agency #1 Catawba
Electric Revenue Bonds (Series B) 6.500 1/1/2009 286,610
610,000 North Carolina Municipal Power Agency #1 Catawba
Electric Revenue Bonds (Series B) 6.375 1/1/2013 682,993
1,000,000 Wake County, North Carolina Industrial, Facilities,
and Pollution Control Revenue Bonds (Carolina Power
and Light Company Project) 5.375 2/1/2017 1,044,680
- -------------------------------------------------------------------------------------------------------------------------
Total North Carolina 20,709,102
=========================================================================================================================
North Dakota (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
3,250,000 Ward County, North Dakota Health Care Facilities
Revenue Bonds (Trinity Medical Center) (Series B) 6.250 7/1/2021 3,328,195
- -------------------------------------------------------------------------------------------------------------------------
Total North Dakota 3,328,195
=========================================================================================================================
Ohio (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,700,000 Cincinnati, Ohio General Obligation Bonds 5.375 12/1/2019 1,836,544
2,000,000 Montgomery County, Ohio Hospital Revenue Bonds
(Kettering Medical Center) 6.750 4/1/2018 2,143,500
2,500,000 Montgomery County, Ohio Hospital Revenue Bonds
(Kettering Medical Center) 6.750 4/1/2022 2,664,550
2,330,000 Ohio Housing Finance Agency Mortgage Residential
Revenue Bonds (Series A-1) (GNMA Insured) (Subject to
'AMT') 5.750 9/1/2026 2,385,897
- -------------------------------------------------------------------------------------------------------------------------
Total Ohio 9,030,491
=========================================================================================================================
Oklahoma (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
390,000 Oklahoma Housing Finance Agency Single Family
Mortgage Revenue Bonds (Series C-2) (Subject to
'AMT') 7.550 9/1/2028 426,348
745,000 Oklahoma Housing Finance Agency Single Family
Mortgage Revenue Bonds (Series D-2) (GNMA/FNMA
Insured) (Subject to 'AMT') 7.100 9/1/2028 816,930
2,900,000 Payne County, Oklahoma Economic Development Authority
Student Housing Revenue Bonds (Collegiate Housing
Foundation) (Series A)(b) 6.375 6/1/2030 3,502,214
- -------------------------------------------------------------------------------------------------------------------------
Total Oklahoma 4,745,492
=========================================================================================================================
Oregon (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
550,000 Forest Grove, Oregon Revenue Bonds (Campus
Improvement-- Pacific University) 6.000 5/1/2015 626,588
3,500,000 Klamath Falls, Oregon Inter-Community Hospital
Authority Revenue Bonds (Gross-Merle West Medical
Center Project) 7.100 9/1/2024 3,837,925
- -------------------------------------------------------------------------------------------------------------------------
Total Oregon 4,464,513
=========================================================================================================================
Pennsylvania (2.4%)
- -------------------------------------------------------------------------------------------------------------------------
2,480,000 Allegheny County, Pennsylvania Redevelopment
Authority Tax Increment Tax Allocation Bonds
(Waterfront Project) (Series B) 6.000 12/15/2010 2,775,294
2,415,000 Allegheny County, Pennsylvania Redevelopment
Authority Tax Increment Tax Allocation Bonds
(Waterfront Project) (Series C) 6.550 12/15/2017 2,728,443
4,000,000 Carbon County, Pennsylvania Industrial Development
Authority Revenue Bonds (Panther Creek Partners
Project) (Subject to 'AMT') 6.650 5/1/2010 4,143,560
2,000,000 Cornwall Lebanon, Pennsylvania School District
Capital Appreciation General Obligation Bonds (FSA
Insured) Zero Coupon 3/15/2016 1,137,320
1,520,000 Cornwall Lebanon, Pennsylvania School District
Capital Appreciation General Obligation Bonds (FSA
Insured) Zero Coupon 3/15/2017 812,820
2,000,000 Lebanon County, Pennsylvania Good Samaritan Hospital
Authority Revenue Bonds (Good Samaritan Hospital
Project) 6.000 11/15/2018 2,008,720
435,000 Montgomery County, Pennsylvania Higher Education and
Health Authority Revenue Bonds (Foulkeways at Gwynedd
Project) 6.750 11/15/2024 461,270
1,880,000 Montgomery County, Pennsylvania Higher Education and
Health Authority Revenue Bonds (Foulkeways at Gwynedd
Project) 6.750 11/15/2030 1,987,649
- -------------------------------------------------------------------------------------------------------------------------
Total Pennsylvania 16,055,076
=========================================================================================================================
Puerto Rico (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Puerto Rico Industrial Tourist Educational Medical
and Environmental Central Facilities Revenue Bonds
(AES Cogen Facilities Project) (Subject to 'AMT') 6.625 6/1/2026 2,063,600
- -------------------------------------------------------------------------------------------------------------------------
Total Puerto Rico 2,063,600
=========================================================================================================================
South Carolina (1.4%)
- -------------------------------------------------------------------------------------------------------------------------
3,320,000 Piedmont Municipal Power Agency South Carolina
Electric Revenue Bonds (Series A)(b) 6.550 1/1/2016 3,334,276
5,000,000 South Carolina State Public Service Authority
Revenue Referendum (Series D) (FSA Insured) 5.000 1/1/2020 5,279,800
500,000 South Carolina Transportation Infrastructure Bank
Revenue Bonds (Series A) (MBIA Insured) 5.500 10/1/2007 570,995
- -------------------------------------------------------------------------------------------------------------------------
Total South Carolina 9,185,071
=========================================================================================================================
South Dakota (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 South Dakota State Health and Educational Facilities
Authority Revenue Bonds (Prairie Lakes Health Care
System, Inc.) (ACA/CBI Insured) 5.650 4/1/2022 2,084,380
- -------------------------------------------------------------------------------------------------------------------------
Total South Dakota 2,084,380
=========================================================================================================================
Tennessee (1.7%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Memphis-Shelby County, Tennessee Airport Authority
Special Facilities and Project Revenue Bonds (Federal
Express Corporation) 5.350 9/1/2012 2,174,000
2,000,000 Memphis-Shelby County, Tennessee Airport Authority
Special Facilities Revenue Bonds (Federal Express
Corporation) 5.050 9/1/2012 2,128,080
4,155,000 Metropolitan Government Nashville and Davidson County
Tennessee Industrial Development Board Revenue Bonds
(Series A) (GNMA Insured) 6.625 3/20/2036 4,582,259
1,500,000 Metropolitan Government Nashville and Davidson
County, Tennessee Health and Educational Facilities
Revenue Bonds (Series A-1) (GNMA Insured) 7.250 6/20/2036 1,716,975
640,000 Tennergy Corporation Tennessee Gas Revenue Bonds
(MBIA Insured) 4.125 6/1/2009 678,886
250,000 Tennessee Energy Acquisition Corporation Gas
Revenue Bonds (Series A) (AMBAC Insured) 4.300 9/1/2003 252,408
150,000 Tennessee Energy Acquisition Corporation Gas
Revenue Bonds (Series A) (AMBAC Insured) 5.000 9/1/2007 166,707
- -------------------------------------------------------------------------------------------------------------------------
Total Tennessee 11,699,315
=========================================================================================================================
Texas (12.2%)
- -------------------------------------------------------------------------------------------------------------------------
1,250,000 Abilene, Texas Waterworks and Sewer System General
Obligation Bonds (Series B) 3.410 2/15/2008 1,247,325
1,250,000 Abilene, Texas Waterworks and Sewer System General
Obligation Bonds (Series B) 3.610 2/15/2009 1,247,250
2,000,000 Alliance Airport, Texas Income Authority Special
Facilities Revenue Bond (Federal Express Corporation
Project) (Subject to 'AMT') 6.375 4/1/2021 2,076,180
2,000,000 Amarillo, Texas Health Facilities Corporation
Revenue Bonds (Baptist St. Anthony's Hospital
Corporation) (FSA Insured) 5.500 1/1/2017 2,278,940
750,000 Arlington, Texas General Obligation Bonds 5.375 8/15/2016 821,010
1,055,000 Arlington, Texas General Obligation Bonds 5.500 8/15/2019 1,145,741
1,250,000 Austin, Texas Utility System Revenue Bonds (FGIC
Insured) 6.000 11/15/2013 1,478,013
2,265,000 Bexar County, Texas Housing Finance Corporation
Multi- Family Housing Revenue Bonds (American
Opty-Waterford Apartments) (Series A1) 7.000 12/1/2036 2,361,036
2,000,000 Bexar County, Texas Housing Finance Corporation
Multi-Family Housing Revenue Bonds (Nob Hill
Apartments) (Series A) 6.000 6/1/2031 2,045,400
1,720,000 Bexar County, Texas Housing Finance Corporation
Multi-Family Housing Revenue Bonds (Pan American
Apartments) (Series A-1) (GNMA Insured) 7.000 3/20/2031 1,970,363
1,000,000 Bluebonnet Trails Community Mental Health and Mental
Retardation Revenue Bonds 6.125 12/1/2016 1,043,190
3,950,000 Colorado River, Texas Municipal Water District
Revenue Bonds (MBIA Insured) 5.000 1/1/2014 4,150,107
500,000 Corpus Christi, Texas General Obligation Bonds
(Series A) (FSA Insured) 5.000 3/1/2012 552,255
1,375,000 Deer Park, Texas Independent School District General
Obligation Bonds (PSF/GTD Insured) 5.000 2/15/2013 1,517,560
1,635,000 Denton, Texas Independent School District General
Obligation Bonds 3.450 8/1/2030 1,678,965
3,210,000 Denton, Texas Utility System Revenue Bonds (Series A)
(FSA Insured) 5.250 12/1/2015 3,543,904
1,445,000 Frisco, Texas Independent School District General
Obligation Bonds (PSF/GTD Insured) 6.250 8/15/2017 1,699,508
7,000,000 Harris County, Houston, Texas General Obligation
Bonds (MBIA Insured) Zero Coupon 8/15/2024 2,329,600
1,500,000 Harris County, Texas Health Facilities Corporation
Revenue Bonds (Sisters of Charity Health Care
Systems) (Series B)(b) 6.250 7/1/2027 1,856,700
6,000,000 Houston, Texas Airport System Revenue Bonds (FSA
Insured) 5.000 7/1/2027 6,084,600
5,000,000 Houston, Texas Water and Sewer System Revenue Bonds
(Series A) (FSA Insured) 5.750 12/1/2032 5,863,600
1,000,000 Lower Colorado River Authority Texas Revenue Bonds
(Series A) 5.875 5/15/2015 1,149,620
3,770,000 Mesquite, Texas Independent School District General
Obligation Bonds (Series A) (PSF/GTD Insured)(b) 6.000 2/15/2020 4,208,074
575,000 Nueces County, Texas Housing Finance Corporation
Multi-Family Housing Revenue Bonds (Dolphins Landing
Apartments Project) (Series A) 6.250 7/1/2010 614,756
1,865,000 Nueces County, Texas Housing Finance Corporation
Multi-Family Housing Revenue Bonds (Dolphins Landing
Apartments Project) (Series A) 6.875 7/1/2030 1,983,875
1,000,000 Panhandle, Texas Regional Housing Finance
Revenue Bonds (Series A) 6.250 3/1/2010 1,080,410
1,000,000 Ridge Parc Development Corporation Texas Multifamily
Revenue Bonds (GNMA Insured) 6.100 6/20/2033 1,108,720
2,795,000 Ridge Parc Development Corporation Texas Multifamily
Revenue Bonds (GNMA Insured) 6.150 11/20/2041 3,068,938
1,365,000 San Antonio, Texas General Obligation Bonds (General
Improvement) 5.250 2/1/2014 1,507,370
1,000,000 San Antonio, Texas Water Revenue Bonds (FSA Insured) 5.500 5/15/2018 1,108,270
1,000,000 San Antonio, Texas Water Revenue Bonds (FSA Insured) 5.500 5/15/2019 1,096,370
1,000,000 San Antonio, Texas Water Revenue Bonds (FSA Insured) 5.500 5/15/2020 1,093,220
1,180,000 South San Antonio, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured) 6.000 8/15/2017 1,361,390
1,250,000 South San Antonio, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured) 6.000 8/15/2018 1,431,463
1,275,000 South San Antonio, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured) 6.000 8/15/2019 1,456,216
1,410,000 Tarrant County, Texas College District General
Obligation Bonds 5.375 2/15/2013 1,598,841
1,070,000 Tarrant County, Texas Housing Finance Corporation
Multi-Family Revenue Bonds (Series A) 6.000 6/1/2031 1,078,785
2,000,000 Travis County, Texas Health Facilities Development
Corporation Revenue Bonds (Ascension Health Credit)
(Series A) (MBIA Insured)(b) 6.250 11/15/2017 2,431,040
315,000 Westlake, Texas General Obligation Bonds 6.500 5/1/2013 368,723
350,000 Westlake, Texas General Obligation Bonds 6.500 5/1/2015 405,108
335,000 Westlake, Texas General Obligation Bonds 6.500 5/1/2017 383,083
1,650,000 Westlake, Texas General Obligation Bonds 5.750 5/1/2024 1,733,045
2,000,000 Westlake, Texas General Obligation Bonds 5.800 5/1/2032 2,098,680
3,280,000 Wylie, Texas Independent School District Unrefunded
General Obligation Bonds (PSF/GTD Insured) 7.000 8/15/2024 4,015,114
- -------------------------------------------------------------------------------------------------------------------------
Total Texas 83,372,358
=========================================================================================================================
Utah (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
2,965,000 Intermountain Power Agency Utah Power Supply
Revenue Bonds (Series A) (AMBAC Insured)(b) 5.500 7/1/2020 3,040,192
440,000 Intermountain Power Agency Utah Power Supply
Revenue Bonds (Series B)(b) 5.250 7/1/2017 451,123
585,000 Intermountain Power Agency Utah Power Supply
Revenue Bonds (Series B) (MBIA Insured)(b) 5.000 7/1/2016 586,182
560,000 Intermountain Power Agency Utah Power Supply
Unrefunded Revenue Bonds (Series B)(b) 5.250 7/1/2017 572,359
- -------------------------------------------------------------------------------------------------------------------------
Total Utah 4,649,856
=========================================================================================================================
Virginia (0.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Fairfax County, Virginia Industrial Development
Authority Revenue Bonds (Inova Health Systems
Project) 5.250 8/15/2019 2,699,275
1,355,000 Riverside, Virginia Regional Jail Authority Jail
Facilities Revenue Bonds (MBIA Insured)(b) 5.875 7/1/2014 1,511,123
1,130,000 Riverside, Virginia Regional Jail Authority Jail
Facilities Unrefunded Revenue Bonds (MBIA Insured) 5.875 7/1/2014 1,245,068
- -------------------------------------------------------------------------------------------------------------------------
Total Virginia 5,455,466
=========================================================================================================================
Washington (4.1%)
- -------------------------------------------------------------------------------------------------------------------------
2,060,000 Clark and Skamania Counties, Washington School
District #112-6 Washougal General Obligation Bonds
(FGIC Insured)(b) 6.000 12/1/2019 2,466,541
1,000,000 Energy Northwest Washington Electric Revenue Bonds
(Columbia Generating) (Series A) (MBIA Insured) 5.750 7/1/2018 1,124,400
1,000,000 Grant County, Washington Public Utilities District #2
Priest Rapids Hydro Electric Revenue Bonds (Series A)
(MBIA Insured) 5.250 1/1/2017 1,069,100
5,000,000 King County, Washington Sewer Revenue Bonds
(Series B) (FSA Insured) 5.500 1/1/2013 5,646,950
1,000,000 Quinault Indian Nation, Washington Revenue Bonds
(Quinault Beach) (Series A) (ACA Insured) 5.800 12/1/2015 1,074,910
2,000,000 Washington State General Obligation Bonds (Motor
Vehicle Fuel Tax) 5.000 9/1/2007 2,227,120
5,000,000 Washington State General Obligation Bonds (Series A) 6.750 2/1/2015 6,231,000
1,700,000 Washington State Health Care Facilities Authority
Revenue Bonds (Kadlec Medical Center) 6.000 12/1/2030 1,869,065
2,000,000 Washington State Health Care Facilities Authority
Revenue Bonds (Swedish Health Services) (AMBAC
Insured) 5.125 11/15/2018 2,114,960
2,975,000 Washington State Housing Finance Commission
Multi-Family Mortgage Revenue Bonds (Pooled Loan
Program) (Subject to 'AMT') 6.300 1/1/2021 3,244,922
1,000,000 Washington State Housing Finance Commission Nonprofit
Housing Revenue Bonds (Crista Ministries Projects)
(Series A) 5.350 7/1/2014 1,029,660
- -------------------------------------------------------------------------------------------------------------------------
Total Washington 28,098,628
=========================================================================================================================
Wisconsin (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,105,000 Monroe, Wisconsin School District General Obligation
Bonds (AMBAC Insured)(b) 6.875 4/1/2014 1,365,581
1,500,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Aurora Health Care)
(Series B) 5.500 2/15/2015 1,512,165
1,000,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Eagle River Memorial
Hospital, Inc. Project) 5.750 8/15/2020 1,077,520
1,000,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Franciscan Sisters
Christian) (Series A) 5.500 2/15/2018 1,009,240
2,000,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Marshfield Clinic)
(Series B) 6.000 2/15/2025 2,016,520
2,000,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Watertown Memorial Hospital,
Inc.) 5.500 8/15/2029 2,082,920
- -------------------------------------------------------------------------------------------------------------------------
Total Wisconsin 9,063,946
=========================================================================================================================
Wyoming (1.0%)
- -------------------------------------------------------------------------------------------------------------------------
5,825,000 Wyoming State Farm Loan Board Capital Facilities
Revenue Bonds 5.750 10/1/2020 6,793,639
- -------------------------------------------------------------------------------------------------------------------------
Total Wyoming 6,793,639
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $594,957,354) 643,483,867
=========================================================================================================================
Principal
Amount Short-Term Investments (5.0%)(d) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$1,100,000 Berkeley County, SC Pollution Control Revenue Bonds
(Amoco Chemical Company Project) 1.350% 5/1/2003 $1,100,000
1,200,000 Boston Massachusetts Water and Sewer Community
Revenue Bond (Series A) (Line of Credit-State Street) 1.250 5/1/2003 1,200,000
260,000 Connecticut State Health and Educational Facilities
Authority Revenue Bonds (Yale University)
(Series X-3) 1.300 5/1/2003 260,000
2,800,000 Hammond Indiana Pollution Control Revenue Bonds
(Amoco Oil Company Project) 1.350 5/1/2003 2,800,000
1,160,000 Harris County, Texas Health Facilities Development
Authority Revenue Bonds (Texas Childrens Hospital)
(Series B-1) (MBIA Insured) 1.350 5/1/2003 1,160,000
400,000 Hurley, New Mexico Pollution Control Revenue Bonds
(Kennecott Santa Fe Project-BP plc) 1.350 5/1/2003 400,000
9,800,000 Indiana State Educational Facilities Authority
Revenue Bonds (University of Notre Dame) 1.280 5/1/2003 9,800,000
1,685,000 Massachusetts State Health and Educational Facilities
Authority Revenue Bond (Capital Asset Program)
(Series B) 1.300 5/1/2003 1,685,000
1,500,000 Massachusetts State Health and Educational Facilities
Authority Revenue Bond (Capital Asset Program)
(Series C) 1.300 5/1/2003 1,500,000
300,000 Michigan State Strategic Fund Pollution Control
Revenue Bonds (Consumers Power Project) (AMBAC
Insured) 1.350 5/1/2003 300,000
5,100,000 New Jersey Economic Development Authority Water
Facilities Revenue Bond (United Water New Jersey,
Inc.) (Project A) (AMBAC Insured) 1.300 5/1/2003 5,100,000
500,000 Port Authority of New York and New Jersey Special
Obligation Revenue Bonds (Versatile Structure) (Line
of Credit-Bayerische Landesbank) 1.350 5/1/2003 500,000
700,000 Salt Lake, Utah County Pollution Control
Revenue Bonds (Service Station Holding Project-
BP plc) 1.350 5/1/2003 700,000
2,385,000 Southwest Higher Education Authority Revenue Bonds
(Southern Methodist University) 1.350 5/1/2003 2,385,000
2,200,000 St. Joseph County, Indiana Educational Facilities
Revenue Bonds (University of Notre Dame) 1.300 5/1/2003 2,200,000
100,000 St. Lucie County, Florida Pollution Control
Revenue Bond Florida Power and Light Project 1.370 5/1/2003 100,000
1,000,000 Sublette County, Wyoming Pollution Control
Revenue Bond (Exxon Project) 1.300 5/1/2003 1,000,000
1,200,000 Valdez, Alaska Marine Term Revenue Bond (BP Pipeline,
Inc.) 1.350 5/1/2003 1,200,000
600,000 Valdez, Alaska Marine Term Revenue Bond Exxon
Pipeline Project 1.300 5/1/2003 600,000
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 33,990,000
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $628,947,354) $677,473,867
=========================================================================================================================
(a) The categories of investments are shown as a percentage of total investments.
(b) Denotes securities that have been pre-refunded or escrowed to maturity. Under such an arrangement, money is deposited into an irrevocable escrow account and is used to purchase U.S. Treasury securities or government agency securities with maturing principal and interest earnings sufficient to pay all debt service requirements of the pre-refunded bonds.
(c) Step coupon bond.
(d) Denotes variable rate obligations for which the current yield and next scheduled reset date are shown.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Bond Fund
Schedule of Investments as of April 30, 2003(a)
Principal
Amount Long-Term Fixed Income (80.8%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities (7.0%)
- -------------------------------------------------------------------------------------------------------------------------
$15,000,000 Chase Credit Card Master Trust, Variable Rate(b) 1.440% 3/16/2009 $15,031,485
6,000,000 Citibank Credit Card Trust, Variable Rate 1.468 2/7/2008 6,011,622
2,125,000 EQCC Home Equity Loan Trust 6.930 2/15/2029 2,230,870
3,516,421 Green Tree Financial Corporation(b) 7.650 10/15/2027 3,684,545
2,068,913 Green Tree Home Improvement Loan Trust(b) 8.100 9/15/2027 2,074,584
4,500,000 Harley-Davidson Eaglemark Motorcycle Trust(b) 6.710 1/15/2007 4,510,188
4,100,000 Residential Asset Securities Corporation 4.988 2/25/2027 4,223,344
3,887,804 Residential Asset Securities Corporation(b) 8.040 10/25/2028 4,032,768
4,000,000 Toyota Auto Receivables Owner Trust, Variable Rate 1.328 3/15/2007 3,999,216
1,522,696 Vanderbilt Mortgage Finance Corporation 8.045 7/7/2012 1,549,081
- -------------------------------------------------------------------------------------------------------------------------
Total Asset-Backed Securities 47,347,703
=========================================================================================================================
Basic Materials (2.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Dow Chemical Company 5.750 11/15/2009 2,660,595
1,500,000 International Paper Company 5.850 10/30/2012 1,603,547
2,000,000 Meadwestvaco Corporation(b) 6.850 4/1/2012 2,261,652
1,250,000 Potash Corporation of Saskatchewan, Inc. 4.875 3/1/2013 1,241,740
2,000,000 Rohm & Haas Company 7.400 7/15/2009 2,378,738
1,300,000 Weyerhaeuser Company 6.125 3/15/2007 1,413,662
2,000,000 Weyerhaeuser Company 5.250 12/15/2009 2,085,866
- -------------------------------------------------------------------------------------------------------------------------
Total Basic Materials 13,645,800
=========================================================================================================================
Capital Goods (3.7%)
- -------------------------------------------------------------------------------------------------------------------------
3,000,000 Bombardier Capital, Inc. 6.125 6/29/2006 2,820,000
2,885,000 Litton Industries, Inc. 8.000 10/15/2009 3,501,340
2,625,000 Lockheed Martin Corporation 8.200 12/1/2009 3,257,922
3,400,000 Raytheon Company(b) 6.000 12/15/2010 3,667,434
4,000,000 Republic Services, Inc. 6.750 8/15/2011 4,504,008
750,000 Sealed Air Corporation 5.375 4/15/2008 774,752
2,200,000 Waste Management, Inc. 7.125 10/1/2007 2,488,347
3,500,000 Waste Management, Inc. 6.875 5/15/2009 3,995,338
- -------------------------------------------------------------------------------------------------------------------------
Total Capital Goods 25,009,141
=========================================================================================================================
Commercial-Backed Securities (8.9%)
- -------------------------------------------------------------------------------------------------------------------------
5,000,000 Banc of America Commercial Mortgage, Inc.(b) 6.085 6/11/2035 5,580,020
3,000,000 Banc of America Commercial Mortgage, Inc. 5.118 7/11/2043 3,150,423
1,593,899 CAM Commercial Mortgage Corporation 4.834 11/14/2036 1,676,503
4,000,000 First Union National Bank Commercial Mortgage Trust
Pass-Through Certificates(b) 7.390 12/15/2031 4,735,436
4,104,794 First Union-Lehman Brothers - Bank of America
Commercial Mortgage Trust 6.280 11/18/2035 4,395,840
4,000,000 First Union-Lehman Brothers - Bank of America
Commercial Mortgage Trust(b) 6.560 11/18/2035 4,542,668
11,000,000 GMAC Commercial Mortgage Corporation Loan Trust,
Variable Rate 1.450 4/25/2033 11,010,879
6,000,000 GMAC Commercial Mortgage Securities, Inc.(b) 6.175 5/15/2033 6,711,606
2,600,000 LB-UBS Commercial Mortgage Trust 3.323 3/15/2027 2,593,752
5,500,000 Morgan Stanley Capital I, Inc. 6.210 11/15/2031 6,169,169
4,000,000 Morgan Stanley Dean Witter Capital I, Inc. Commercial
Mortgage 6.540 7/15/2030 4,538,596
5,000,000 Nationslink Funding Corporation(b) 7.181 6/20/2031 5,618,475
- -------------------------------------------------------------------------------------------------------------------------
Total Commercial-Backed Securities 60,723,367
=========================================================================================================================
Communications Services (5.6%)
- -------------------------------------------------------------------------------------------------------------------------
4,400,000 AT&T Corporation, Variable Rate 7.000 11/15/2006 4,718,300
1,200,000 AT&T Wireless Services, Inc. 7.350 3/1/2006 1,336,836
1,800,000 AT&T Wireless Services, Inc.(b) 7.500 5/1/2007 2,030,996
2,000,000 CenturyTel, Inc. 8.375 10/15/2010 2,457,194
2,000,000 Citizens Communications Company 7.625 8/15/2008 2,336,728
2,000,000 Clear Channel Communications, Inc. 4.625 1/15/2008 2,059,992
2,000,000 Comcast Corporation 5.500 3/15/2011 2,063,162
4,000,000 Continental Cablevision, Inc. 8.875 9/15/2005 4,500,328
2,750,000 Cox Communications, Inc. 6.750 3/15/2011 3,127,493
2,000,000 Deutsche Telekom AG, Variable Rate 8.250 6/15/2005 2,221,794
2,000,000 GTE North, Inc.(b) 6.375 2/15/2010 2,233,470
1,000,000 Liberty Media Corporation 5.700 5/15/2013 1,003,910
1,500,000 Sprint Capital Corporation 6.000 1/15/2007 1,530,000
1,500,000 Sprint Capital Corporation 6.125 11/15/2008 1,530,000
2,250,000 Verizon Global Funding Corporation 7.250 12/1/2010 2,630,966
2,125,000 Verizon Global Funding Corporation(b) 7.375 9/1/2012 2,520,214
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 38,301,383
=========================================================================================================================
Consumer Cyclical (3.5%)
- -------------------------------------------------------------------------------------------------------------------------
4,000,000 American Honda Finance Corporation, Variable Rate 1.540 2/17/2004 4,011,120
1,750,000 AOL Time Warner, Inc.(b) 6.125 4/15/2006 1,862,891
1,750,000 AOL Time Warner, Inc. 6.750 4/15/2011 1,899,973
2,725,000 Cendant Corporation 6.875 8/15/2006 2,979,428
1,500,000 Centex Corporation(b) 4.750 1/15/2008 1,547,654
2,000,000 DaimlerChrysler North American Holdings Corporation 4.750 1/15/2008 2,066,110
2,500,000 Ford Motor Credit Company 7.375 10/28/2009 2,553,588
3,000,000 General Motors Acceptance Corporation 7.500 7/15/2005 3,210,459
1,250,000 Lennar Corporation(b) 5.950 3/1/2013 1,330,393
2,000,000 Pulte Homes, Inc. 8.125 3/1/2011 2,343,096
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Cyclical 23,804,712
=========================================================================================================================
Consumer Non-Cyclical (1.5%)
- -------------------------------------------------------------------------------------------------------------------------
3,500,000 Bunge Limited Finance Corporation(b) 7.800 10/15/2012 3,734,780
1,750,000 Kraft Foods, Inc. 4.625 11/1/2006 1,824,844
2,100,000 Kroger Company 7.250 6/1/2009 2,414,885
1,000,000 Tenet Healthcare Corporation 6.375 12/1/2011 950,000
1,000,000 Tenet Healthcare Corporation 7.375 2/1/2013 987,500
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Non-Cyclical 9,912,009
=========================================================================================================================
Energy (1.5%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Burlington Resources, Inc. 6.500 12/1/2011 2,840,845
2,450,000 ConocoPhillips Corporation 8.750 5/25/2010 3,084,459
1,000,000 Occidental Petroleum Corporation 4.250 3/15/2010 1,006,007
1,750,000 Ocean Energy, Inc. 4.375 10/1/2007 1,810,937
1,750,000 Union Oil Company of California 5.050 10/1/2012 1,771,028
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 10,513,276
=========================================================================================================================
Finance (15.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,250,000 Abbey National Capital Trust I, Variable Rate(b) 8.963 12/29/2049 3,013,979
3,000,000 Associates Manufactured Housing Contract Pass-Through
Certificates(b) 7.900 3/15/2027 3,200,322
2,000,000 BNP Paribas Capital Trust, Variable Rate 9.003 12/29/2049 2,514,574
2,500,000 Capital One Bank 8.250 6/15/2005 2,708,773
2,000,000 Capital One Bank 6.875 2/1/2006 2,124,402
2,800,000 Countrywide Home Loans, Inc. 5.625 7/15/2009 3,015,656
2,000,000 EOP Operating, LP(b) 6.800 1/15/2009 2,252,940
2,250,000 General Electric Capital Corporation 6.000 6/15/2012 2,482,808
1,750,000 Goldman Sachs Group, Inc. 6.600 1/15/2012 1,972,983
1,000,000 Household Finance Corporation 5.875 2/1/2009 1,082,952
2,000,000 HSBC Capital Funding, LP, Variable Rate(b) 9.547 12/29/2049 2,553,764
2,500,000 International Lease Finance Corporation(b) 5.625 6/1/2007 2,616,913
1,000,000 JP Morgan Chase & Company 3.625 5/1/2008 1,006,468
11,340,000 Lehman Brothers, Inc., Targeted Return Index
Securities, Variable Rate 6.539 8/15/2008 12,203,609
1,250,000 Mack-Cali Realty Corporation 7.750 2/15/2011 1,453,993
6,520,000 Merrill Lynch & Company, Inc., Variable Rate 1.640 5/21/2004 6,541,288
9,309,000 Morgan Stanley and Company, Variable Rate(b) 5.878 3/1/2007 10,098,776
17,728,000 Morgan Stanley and Company, Variable Rate 7.252 9/15/2011 20,414,488
2,000,000 Morgan Stanley Dean Witter & Company 4.250 5/15/2010 1,998,420
1,000,000 ProLogis Trust(b) 7.000 10/1/2003 1,023,706
4,000,000 ProLogis Trust 7.100 4/15/2008 4,629,748
1,100,000 Prudential Financial, Inc. 3.750 5/1/2008 1,102,475
4,000,000 Regency Centers, LP(b) 7.125 7/15/2005 4,392,860
2,500,000 Royal Bank of Scotland Group plc(b) 9.118 3/31/2049 3,156,633
2,250,000 Simon Property Group, LP 6.375 11/15/2007 2,462,810
2,000,000 Union Planters Corporation 7.750 3/1/2011 2,370,754
1,500,000 Washington Mutual Bank 5.500 1/15/2013 1,592,694
- -------------------------------------------------------------------------------------------------------------------------
Total Finance 103,988,788
=========================================================================================================================
Mortgage-Backed Securities (16.8%)
- -------------------------------------------------------------------------------------------------------------------------
60,500,000 Federal National Mortgage Association 15-Yr.
Conventional(c) 5.500 5/15/2018 62,901,124
50,000,000 Federal National Mortgage Association 30-Yr.
Conventional(c) 5.500 5/1/2033 51,359,400
- -------------------------------------------------------------------------------------------------------------------------
Total Mortgage-Backed Securities 114,260,524
=========================================================================================================================
Municipal Bonds (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Educational Enhancement Funding Corporation South
Dakota Tobacco Taxable 6.720 6/1/2025 1,918,620
2,000,000 Oregon School Board Association General Obligation
Bond Zero Coupon 6/30/2007 1,732,660
- -------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds 3,651,280
=========================================================================================================================
Non-Corporate (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Corporacion Andina de Fomento 6.875 3/15/2012 2,664,325
2,500,000 Mexico Government International Bond 7.500 1/14/2012 2,822,500
2,250,000 Petroleos Mexicanos(b) 9.375 12/2/2008 2,700,000
- -------------------------------------------------------------------------------------------------------------------------
Total Non-Corporate 8,186,825
=========================================================================================================================
Technology (0.2%)
- -------------------------------------------------------------------------------------------------------------------------
1,500,000 Fiserv, Inc. 4.000 4/15/2008 1,522,160
- -------------------------------------------------------------------------------------------------------------------------
Total Technology 1,522,160
=========================================================================================================================
Transportation (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,453,942 United Airlines, Inc.(b,d) 7.186 4/1/2011 1,808,629
- -------------------------------------------------------------------------------------------------------------------------
Total Transportation 1,808,629
=========================================================================================================================
U.S. Government (6.6%)
- -------------------------------------------------------------------------------------------------------------------------
3,000,000 Federal Home Loan Mortgage Corporation 3.500 9/15/2007 3,084,066
7,750,000 Federal Home Loan Mortgage Corporation 4.000 10/29/2007 7,956,313
3,750,000 Federal Home Loan Mortgage Corporation 3.158 12/27/2029 3,805,823
4,500,000 Federal National Mortgage Association 5.250 4/15/2007 4,940,361
5,500,000 U.S. Treasury Bonds 7.250 5/15/2016 7,092,635
250,000 U.S. Treasury Notes 4.375 5/15/2007 268,252
11,350,000 U.S. Treasury Notes 6.000 8/15/2009 13,138,510
3,000,000 U.S. Treasury Notes 4.375 8/15/2012 3,132,306
1,500,000 U.S. Treasury Notes 3.875 2/15/2013 1,501,992
- -------------------------------------------------------------------------------------------------------------------------
Total U.S. Government 44,920,258
=========================================================================================================================
Utilities (6.2%)
- -------------------------------------------------------------------------------------------------------------------------
1,000,000 Alliant Energy Resources, Inc.(b) 7.375 11/9/2009 1,100,633
2,000,000 American Electric Power Company, Inc. 6.125 5/15/2006 2,160,000
1,000,000 American Electric Power Company, Inc. 5.375 3/15/2010 1,042,650
1,000,000 Centerpoint Energy Houston 5.700 3/15/2013 1,065,941
3,625,000 Consumers Energy Company(b) 4.250 4/15/2008 3,684,856
2,000,000 Enterprise Products Operating, LP 8.250 3/15/2005 2,203,416
2,500,000 Kinder Morgan Energy Partners, LP 7.500 11/1/2010 2,964,703
3,360,000 Niagara Mohawk Power Corporation 7.750 10/1/2008 3,962,589
2,500,000 NiSource Finance Corporation(b) 7.500 11/15/2003 2,577,878
2,000,000 NiSource Finance Corporation 7.875 11/15/2010 2,419,314
2,750,000 Northeast Generation Company(b) 4.998 10/15/2005 2,787,703
1,300,000 Ohio Edison Company 4.000 5/1/2008 1,314,564
500,000 Oncor Electric Delivery Company 5.000 9/1/2007 528,790
1,500,000 Oncor Electric Delivery Company 7.000 9/1/2022 1,651,826
2,500,000 Pinnacle West Capital Corporation 6.400 4/1/2006 2,682,718
3,500,000 PSEG Energy Holdings, Inc. 7.750 4/16/2007 3,666,250
2,000,000 PSEG Power, LLC 6.875 4/15/2006 2,189,120
1,000,000 Sempra Energy 6.000 2/1/2013 1,067,524
3,000,000 Xcel Energy, Inc. 7.000 12/1/2010 3,300,000
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 42,370,475
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $530,530,688) 549,966,330
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (19.2%) Interest Rate(e) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$2,000,000 Alpine Securitization Corporation 1.260% 5/15/2003 $1,999,020
7,000,000 Delaware Funding Corporation 1.240 5/15/2003 6,996,624
5,600,000 Enterprise Funding Corporation 1.230 5/12/2003 5,597,895
13,700,000 Exxon Imperial U.S., Inc. 1.230 5/16/2003 13,692,979
10,000,000 Falcon Asset Securitization Corporation 1.260 5/7/2003 9,997,900
19,000,000 Federal National Mortgage Association 1.180 5/14/2003 18,991,905
13,000,000 Kitty Hawk Funding Corporation 1.260 5/19/2003 12,991,810
13,000,000 Old Line Funding Corporation 1.280 5/15/2003 12,993,529
14,000,000 Preferred Receivables Funding Corporation 1.240 5/13/2003 13,994,213
3,200,000 Starfish Global Funding, LLC 1.260 5/6/2003 3,199,440
10,439,311 The AAL Money Market Fund 0.840 N/A 10,439,311
10,500,000 Toyota Motor Credit Corporation, Variable Rate 1.240 5/16/2003 10,494,575
9,030,000 Triple A-1 Funding 1.260 5/27/2003 9,021,783
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 130,410,984
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $660,941,672) $680,377,314
=========================================================================================================================
(a) The categories of investments are shown as a percentage of total investments.
(b) Earmarked as collateral as discussed in the notes to the financial statements.
(c) Denotes securities purchased on a when-issued basis.
(d) In bankruptcy.
(e) The interest rate shown reflects the current yield, or for securities purchased at a discount, the discount rate at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Bond Index Fund
Schedule of Investments as of April 30, 2003(a)
Principal
Amount Long-Term Fixed Income (89.6%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities (1.7%)
- -------------------------------------------------------------------------------------------------------------------------
$100,000 Advanta Mortgage Loan Trust 7.750% 10/25/2026 $106,786
500,000 Chase Credit Card Master Trust 5.500 11/17/2008 545,791
500,000 Citibank Credit Card Issuance Trust 4.100 12/7/2006 520,069
125,000 EQCC Home Equity Loan Trust 6.930 2/15/2029 131,228
150,000 MBNA Credit Card Master Notes Trust, Variable Rate 1.420 8/17/2009 150,171
27,036 Money Store Home Equity Trust 6.877 1/15/2029 27,848
- -------------------------------------------------------------------------------------------------------------------------
Total Asset-Backed Securities 1,481,893
=========================================================================================================================
Basic Materials (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
200,000 Dow Chemical Company 5.750 11/15/2009 212,848
350,000 International Paper Company 5.850 10/30/2012 374,161
400,000 Weyerhaeuser Company 6.750 3/15/2012 448,102
- -------------------------------------------------------------------------------------------------------------------------
Total Basic Materials 1,035,111
=========================================================================================================================
Capital Goods (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
400,000 General Electric Company 5.000 2/1/2013 413,431
75,000 Northrop Grumman Corporation 7.125 2/15/2011 87,831
75,000 Raytheon Company 5.500 11/15/2012 77,756
- -------------------------------------------------------------------------------------------------------------------------
Total Capital Goods 579,018
=========================================================================================================================
Commercial-Backed Securities (2.7%)
- -------------------------------------------------------------------------------------------------------------------------
300,000 Banc of America Commercial Mortgage, Inc. 5.118 7/11/2043 315,042
400,000 CS First Boston Mortgage Securities Corporation 6.480 5/17/2040 449,543
100,000 First Union National Bank Commercial Mortgage Trust
Pass-Through Certificates 7.390 12/15/2031 118,386
150,000 GMAC Commercial Mortgage Corporation Loan Trust,
Variable Rate 1.450 4/25/2033 150,148
282,192 Morgan Stanley Capital I, Inc. 6.250 3/15/2030 301,982
100,000 Morgan Stanley Capital I, Inc. 6.550 3/15/2030 113,080
110,000 Morgan Stanley Capital I, Inc. 6.210 11/15/2031 123,383
310,000 Morgan Stanley Dean Witter Capital I, Inc. 7.110 4/15/2033 362,512
200,000 Nationslink Funding Corporation 7.181 6/20/2031 224,739
150,000 Nationslink Funding Corporation, Class A2 6.316 1/20/2031 168,243
- -------------------------------------------------------------------------------------------------------------------------
Total Commercial-Backed Securities 2,327,058
=========================================================================================================================
Communications Services (3.1%)
- -------------------------------------------------------------------------------------------------------------------------
75,000 AT&T Corporation 7.300 11/15/2011 82,292
200,000 AT&T Wireless Services, Inc. 7.875 3/1/2011 230,421
350,000 BellSouth Corporation 6.875 10/15/2031 407,656
75,000 British Telecom plc 8.375 12/15/2010 92,308
150,000 Cingular Wireless, Inc. 6.500 12/15/2011 167,804
75,000 Comcast Corporation 5.500 3/15/2011 77,369
470,000 Cox Radio, Inc.(b) 6.250 5/15/2003 470,591
75,000 Deutsche Telekom International Finance(c) 8.500 6/15/2010 90,401
75,000 France Telecom SA(c) 9.250 3/1/2011 91,722
95,000 GTE North, Inc. 7.625 5/15/2026 103,784
100,000 SBC Communications, Inc. 5.875 2/1/2012 109,625
200,000 Sprint Capital Corporation 7.125 1/30/2006 211,000
150,000 TCI Communications, Inc. 7.875 8/1/2013 175,532
75,000 Telephone and Data Systems, Inc. 7.000 8/1/2006 78,730
300,000 Verizon Global Funding Corporation 7.750 12/1/2030 370,429
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 2,759,664
=========================================================================================================================
Consumer Cyclical (2.6%)
- -------------------------------------------------------------------------------------------------------------------------
200,000 AOL Time Warner, Inc. 6.875 5/1/2012 218,141
350,000 DaimlerChrysler North American Holdings Corporation 4.750 1/15/2008 361,569
289,875 Ford Credit Auto Owner Trust 5.120 10/15/2004 292,731
300,000 Ford Motor Credit Company 6.500 1/25/2007 306,658
300,000 General Motors Acceptance Corporation 8.000 11/1/2031 312,461
100,000 Sears, Roebuck & Company 6.250 1/15/2004 101,957
300,000 Target Corporation 6.350 1/15/2011 340,132
350,000 Viacom, Inc. 5.625 8/15/2012 378,742
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Cyclical 2,312,391
=========================================================================================================================
Consumer Non-Cyclical (2.1%)
- -------------------------------------------------------------------------------------------------------------------------
350,000 Bunge Limited Finance Corporation 7.800 10/15/2012 373,478
200,000 ConAgra Foods, Inc. 6.000 9/15/2006 218,715
300,000 General Mills, Inc.(b) 6.000 2/15/2012 329,119
100,000 Kimberly-Clark Corporation 6.250 7/15/2018 113,967
350,000 Merck & Company, Inc 5.950 12/1/2028 382,161
400,000 Safeway, Inc.(b) 7.000 9/15/2007 448,898
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Non-Cyclical 1,866,338
=========================================================================================================================
Energy (1.0%)
- -------------------------------------------------------------------------------------------------------------------------
350,000 ConocoPhillips Corporation 4.750 10/15/2012 356,933
150,000 Pemex Project Funding Master Trust 9.125 10/13/2010 180,000
100,000 Union Oil Company of California 6.700 10/15/2007 111,264
200,000 Union Oil Company of California 5.050 10/1/2012 202,403
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 850,600
=========================================================================================================================
Finance (8.5%)
- -------------------------------------------------------------------------------------------------------------------------
400,000 Allstate Corporation 7.200 12/1/2009 466,400
225,000 Avalonbay Communities, Inc. 6.500 1/15/2005 236,790
250,000 Bank of America Corporation 3.875 1/15/2008 257,546
150,000 Bank One Corporation 5.900 11/15/2011 164,573
200,000 BB&T Corporation 7.250 6/15/2007 229,528
200,000 BB&T Corporation 6.500 8/1/2011 227,407
250,000 Camden Property Trust 7.000 11/15/2006 273,618
200,000 CIT Group, Inc. 5.750 9/25/2007 213,358
50,000 Citigroup, Inc. 3.500 2/1/2008 50,498
300,000 Citigroup, Inc. 7.250 10/1/2010 355,646
242,000 Countrywide Home Loans, Inc. 6.250 4/15/2009 269,117
100,000 Countrywide Home Loans, Inc. 5.625 7/15/2009 107,702
300,000 First Union National Bank(b) 7.800 8/18/2010 365,613
225,000 Goldman Sachs Group, Inc.(b) 6.600 1/15/2012 253,669
250,000 Honda Auto Receivables Trust 2.480 7/18/2008 251,892
325,000 Household Finance Corporation 6.375 11/27/2012 358,540
225,000 International Lease Finance Corporation 5.875 5/1/2013 228,301
275,000 Lehman Brothers Holdings(b) 4.000 1/22/2008 280,882
200,000 Morgan Stanley and Company 3.625 4/1/2008 201,618
696,000 Morgan Stanley and Company, Variable Rate 5.878 3/1/2007 755,049
608,000 Morgan Stanley and Company, Variable Rate 7.252 9/15/2011 700,136
198,000 Morgan Stanley and Company, Variable Rate 7.700 3/1/2032 235,174
425,000 PNC Funding Corporation(b) 6.875 7/15/2007 476,724
100,000 Post Apartment Homes, LP 8.125 6/15/2005 110,545
225,000 ProLogis Trust 5.500 3/1/2013 233,565
175,000 Wells Fargo Company 3.500 4/4/2008 176,696
- -------------------------------------------------------------------------------------------------------------------------
Total Finance 7,480,587
=========================================================================================================================
Mortgage-Backed Securities (30.9%)
- -------------------------------------------------------------------------------------------------------------------------
1,300,000 Federal Home Loan Mortgage Corporation 30-Yr. Gold
Conventional(d) 6.000 5/1/2033 1,352,000
32,783 Federal Home Loan Mortgage Corporation Gold 15-Yr.
Pass Through 9.000 4/1/2010 36,135
23,722 Federal Home Loan Mortgage Corporation Gold 15-Yr.
Pass Through 7.000 12/1/2011 25,369
50,316 Federal Home Loan Mortgage Corporation Gold 15-Yr.
Pass Through 6.000 3/1/2014 52,701
102,574 Federal Home Loan Mortgage Corporation Gold 15-Yr.
Pass Through 5.500 4/1/2014 107,214
235,496 Federal Home Loan Mortgage Corporation Gold 15-Yr.
Pass Through 7.500 1/1/2015 252,694
97,541 Federal Home Loan Mortgage Corporation Gold 15-Yr.
Pass Through 5.500 5/1/2016 101,430
265,915 Federal Home Loan Mortgage Corporation Gold 15-Yr.
Pass Through(b) 6.500 7/1/2016 280,779
164,740 Federal Home Loan Mortgage Corporation Gold 15-Yr.
Pass Through 6.500 10/1/2016 173,948
886,634 Federal Home Loan Mortgage Corporation Gold 15-Yr.
Pass Through 5.500 12/1/2017 921,888
89,737 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 6.500 11/1/2025 94,028
245,740 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 8.000 5/1/2027 267,727
408,703 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 7.500 1/1/2028 437,206
129,735 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 6.000 7/1/2029 135,234
16,197 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 8.000 10/1/2029 17,502
98,404 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 7.000 12/1/2029 103,846
72,795 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 7.500 1/1/2030 77,711
72,949 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 7.500 2/1/2030 77,860
35,431 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 8.000 2/1/2030 38,286
14,016 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 7.500 4/1/2030 14,959
96,580 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 6.000 6/1/2031 100,574
97,335 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 7.000 6/1/2031 102,654
186,119 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 6.000 7/1/2031 193,815
184,745 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 7.000 9/1/2031 194,841
634,258 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 6.000 1/1/2032 660,486
1,797,394 Federal Home Loan Mortgage Corporation Gold 30-Yr.
Pass Through 6.000 11/1/2032 1,871,698
2,500,000 Federal National Mortgage Association 15-Yr.
Conventional(d) 5.000 5/1/2018 2,575,778
863,997 Federal National Mortgage Association 15-Yr. Pass
Through(b) 5.500 12/1/2017 899,406
3,400,000 Federal National Mortgage Association 30-Yr.
Conventional(d) 5.500 5/1/2033 3,492,422
1,995,766 Federal National Mortgage Association 30-Yr. Pass
Through 6.500 8/1/2032 2,085,236
458,953 Federal National Mortgage Association 30-Yr. Pass
Through 6.000 10/1/2032 478,262
627,795 Federal National Mortgage Association 30-Yr. Pass
Through 6.500 12/1/2032 655,939
61,822 Federal National Mortgage Association Conventional
15-Yr. Pass Through 7.000 3/1/2009 66,106
36,150 Federal National Mortgage Association Conventional
15-Yr. Pass Through 6.000 4/1/2011 38,064
322,375 Federal National Mortgage Association Conventional
15-Yr. Pass Through(b) 6.500 4/1/2013 342,378
55,361 Federal National Mortgage Association Conventional
15-Yr. Pass Through 6.500 7/1/2013 58,812
33,351 Federal National Mortgage Association Conventional
15-Yr. Pass Through 6.500 10/1/2013 35,420
178,106 Federal National Mortgage Association Conventional
15-Yr. Pass Through 6.000 1/1/2014 187,137
79,097 Federal National Mortgage Association Conventional
15-Yr. Pass Through 6.500 1/1/2014 83,889
45,045 Federal National Mortgage Association Conventional
15-Yr. Pass Through 5.500 4/1/2014 47,143
133,362 Federal National Mortgage Association Conventional
15-Yr. Pass Through 6.000 11/1/2014 140,124
44,645 Federal National Mortgage Association Conventional
15-Yr. Pass Through 6.500 11/1/2014 47,333
117,268 Federal National Mortgage Association Conventional
15-Yr. Pass Through 7.000 3/1/2015 125,278
916,408 Federal National Mortgage Association Conventional
15-Yr. Pass Through(b) 6.000 6/1/2016 960,697
161,708 Federal National Mortgage Association Conventional
15-Yr. Pass Through 6.000 9/1/2016 169,523
126,393 Federal National Mortgage Association Conventional
15-Yr. Pass Through 5.500 2/1/2017 131,568
60,137 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.000 6/1/2008 62,457
131,135 Federal National Mortgage Association Conventional
30-Yr. Pass Through 7.500 8/1/2023 140,773
117,172 Federal National Mortgage Association Conventional
30-Yr. Pass Through 7.000 3/1/2024 124,577
138,296 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.500 4/1/2024 145,282
29,862 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.000 3/1/2028 31,158
741,280 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.500 7/1/2028 775,237
55,592 Federal National Mortgage Association Conventional
30-Yr. Pass Through 7.500 8/1/2028 59,399
197,681 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.000 12/1/2028 206,264
108,680 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.500 2/1/2029 113,659
154,442 Federal National Mortgage Association Conventional
30-Yr. Pass Through 7.000 2/1/2029 163,382
256,864 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.000 5/1/2029 268,018
169,214 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.000 7/1/2029 176,562
44,125 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.500 8/1/2029 46,131
20,263 Federal National Mortgage Association Conventional
30-Yr. Pass Through 7.500 1/1/2030 21,605
285,978 Federal National Mortgage Association Conventional
30-Yr. Pass Through(b) 6.000 4/1/2031 298,030
429,292 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.000 5/1/2031 447,383
509,264 Federal National Mortgage Association Conventional
30-Yr. Pass Through 6.500 7/1/2032 532,094
31,163 Government National Mortgage Association 30-Yr. Pass
Through 8.500 1/15/2017 34,469
55,610 Government National Mortgage Association 30-Yr. Pass
Through 7.500 9/15/2023 59,759
34,947 Government National Mortgage Association 30-Yr. Pass
Through 8.000 1/15/2025 38,186
54,841 Government National Mortgage Association 30-Yr. Pass
Through 8.000 7/15/2026 59,724
340,180 Government National Mortgage Association 30-Yr. Pass
Through(b) 7.000 8/15/2028 361,444
19,518 Government National Mortgage Association 30-Yr. Pass
Through 8.000 10/15/2028 21,143
136,284 Government National Mortgage Association 30-Yr. Pass
Through 6.500 1/15/2029 143,482
123,794 Government National Mortgage Association 30-Yr. Pass
Through 7.000 1/15/2029 131,415
76,567 Government National Mortgage Association 30-Yr. Pass
Through 6.500 3/15/2029 80,611
61,051 Government National Mortgage Association 30-Yr. Pass
Through 7.000 7/15/2029 64,810
48,836 Government National Mortgage Association 30-Yr. Pass
Through 7.500 9/15/2029 52,175
18,374 Government National Mortgage Association 30-Yr. Pass
Through 7.500 10/15/2029 19,630
36,311 Government National Mortgage Association 30-Yr. Pass
Through 7.500 12/15/2029 38,793
43,239 Government National Mortgage Association 30-Yr. Pass
Through 8.000 12/15/2029 46,813
17,928 Government National Mortgage Association 30-Yr. Pass
Through 8.000 12/15/2029 19,409
21,954 Government National Mortgage Association 30-Yr. Pass
Through 8.500 12/15/2029 23,757
20,986 Government National Mortgage Association 30-Yr. Pass
Through 8.000 5/15/2030 22,709
15,845 Government National Mortgage Association 30-Yr. Pass
Through 8.000 7/15/2030 17,146
157,938 Government National Mortgage Association 30-Yr. Pass
Through 7.500 11/15/2030 168,679
56,893 Government National Mortgage Association 30-Yr. Pass
Through 7.000 3/15/2031 60,334
152,978 Government National Mortgage Association 30-Yr. Pass
Through 6.000 6/15/2031 160,232
243,912 Government National Mortgage Association 30-Yr. Pass
Through 6.500 7/15/2031 256,517
172,181 Government National Mortgage Association 30-Yr. Pass
Through 7.000 9/15/2031 182,596
334,226 Government National Mortgage Association 30-Yr. Pass
Through 6.500 2/15/2032 351,462
92,539 Government National Mortgage Association 30-Yr. Pass
Through 6.500 4/15/2032 97,312
632,995 Government National Mortgage Association 30-Yr. Pass
Through(b) 6.500 7/15/2032 665,638
- -------------------------------------------------------------------------------------------------------------------------
Total Mortgage-Backed Securities 27,103,356
=========================================================================================================================
Non-Corporate (3.0%)
- -------------------------------------------------------------------------------------------------------------------------
450,000 Canadian Government(b) 6.375 11/30/2004 484,985
225,000 European Investment Bank 3.000 6/16/2008 224,087
300,000 Inter-American Development Bank(b) 5.750 2/26/2008 335,894
100,000 Inter-American Development Bank 8.500 3/15/2011 130,354
300,000 International Bank for Reconstruction and
Development(b) 5.000 3/28/2006 323,727
200,000 Korea Development Bank 7.250 5/15/2006 222,400
300,000 Mexico Government International Bond 7.500 1/14/2012 338,700
200,000 Province of Quebec 7.500 7/15/2023 252,734
200,000 Republic of Italy 6.000 2/22/2011 227,443
50,000 Republic of Italy 4.375 6/15/2013 50,270
- -------------------------------------------------------------------------------------------------------------------------
Total Non-Corporate 2,590,594
=========================================================================================================================
Technology (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
200,000 Compaq Computer Corporation 6.200 5/15/2003 200,202
100,000 International Business Machines Corporation 5.370 9/22/2003 101,526
- -------------------------------------------------------------------------------------------------------------------------
Total Technology 301,728
=========================================================================================================================
Transportation (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
122,697 United Airlines, Inc. 7.186 4/1/2011 90,431
- -------------------------------------------------------------------------------------------------------------------------
Total Transportation 90,431
=========================================================================================================================
U.S. Government (30.3%)
- -------------------------------------------------------------------------------------------------------------------------
300,000 Federal Farm Credit Bank(b) 5.720 4/13/2005 323,507
660,000 Federal Home Loan Bank 6.900 2/7/2007 760,969
200,000 Federal Home Loan Bank 5.625 2/15/2008 223,710
200,000 Federal Home Loan Bank 5.925 4/9/2008 226,724
200,000 Federal Home Loan Bank(b) 7.375 2/13/2015 251,878
100,000 Federal Home Loan Bank 6.640 12/13/2016 118,911
2,000,000 Federal Home Loan Mortgage Corporation 2.875 9/15/2005 2,046,774
205,000 Federal Home Loan Mortgage Corporation 6.800 3/19/2007 237,180
160,000 Federal Home Loan Mortgage Corporation 7.100 4/10/2007 187,094
650,000 Federal Home Loan Mortgage Corporation 6.000 6/15/2011 741,530
135,525 Federal Home Loan Mortgage Corporation 8.500 7/1/2021 148,465
653,359 Federal Home Loan Mortgage Corporation 7.000 8/1/2032 689,072
500,000 Federal National Mortgage Association 6.500 8/15/2004 533,389
400,000 Federal National Mortgage Association 3.875 3/15/2005 417,448
100,000 Federal National Mortgage Association 5.800 2/22/2006 110,265
400,000 Federal National Mortgage Association 5.500 5/2/2006 435,436
21,593 Federal National Mortgage Association 7.500 8/1/2006 22,880
150,000 Federal National Mortgage Association 6.660 3/5/2007 171,880
1,000,000 Federal National Mortgage Association 3.250 1/15/2008 1,013,044
400,000 Federal National Mortgage Association 5.250 1/15/2009 439,964
500,000 Federal National Mortgage Association 6.250 2/1/2011 566,117
63,313 Federal National Mortgage Association 6.500 5/1/2011 67,260
300,000 Federal National Mortgage Association(b) 6.210 8/6/2038 345,468
200,000 Tennessee Valley Authority 6.150 1/15/2038 224,136
150,000 U.S. Treasury Bonds 13.250 5/15/2014 232,195
450,000 U.S. Treasury Bonds 11.750 11/15/2014 670,201
100,000 U.S. Treasury Bonds 7.500 11/15/2016 131,688
450,000 U.S. Treasury Bonds 8.750 5/15/2017 654,205
450,000 U.S. Treasury Bonds 8.125 8/15/2019 631,195
100,000 U.S. Treasury Bonds 7.875 2/15/2021 138,258
300,000 U.S. Treasury Bonds 8.125 8/15/2021 425,051
1,200,000 U.S. Treasury Bonds 6.250 8/15/2023 1,421,250
400,000 U.S. Treasury Bonds 6.875 8/15/2025 509,984
200,000 U.S. Treasury Bonds 6.750 8/15/2026 252,062
100,000 U.S. Treasury Bonds 6.500 11/15/2026 122,602
100,000 U.S. Treasury Bonds 6.625 2/15/2027 124,457
300,000 U.S. Treasury Bonds 6.125 11/15/2027 352,933
800,000 U.S. Treasury Notes 3.375 4/30/2004 817,562
300,000 U.S. Treasury Notes 7.250 5/15/2004 318,785
750,000 U.S. Treasury Notes 3.250 5/31/2004 766,728
500,000 U.S. Treasury Notes 5.875 11/15/2004 534,511
250,000 U.S. Treasury Notes 7.875 11/15/2004 274,814
500,000 U.S. Treasury Notes 1.625 3/31/2005 501,484
1,800,000 U.S. Treasury Notes 6.500 8/15/2005 1,997,294
300,000 U.S. Treasury Notes 5.625 2/15/2006 330,703
200,000 U.S. Treasury Notes 4.625 5/15/2006 215,429
100,000 U.S. Treasury Notes 6.500 10/15/2006 114,195
1,950,000 U.S. Treasury Notes 3.500 11/15/2006 2,032,721
450,000 U.S. Treasury Notes 4.375 5/15/2007 482,854
1,250,000 U.S. Treasury Notes 5.500 5/15/2009 1,413,134
200,000 U.S. Treasury Notes 10.375 11/15/2009 227,156
300,000 U.S. Treasury Notes 4.375 8/15/2012 313,231
300,000 U.S. Treasury Notes 4.000 11/15/2012 303,832
- -------------------------------------------------------------------------------------------------------------------------
Total U.S. Government 26,613,615
=========================================================================================================================
Utilities (1.4%)
- -------------------------------------------------------------------------------------------------------------------------
100,000 Enserch Corporation 6.564 7/1/2005 98,446
150,000 Niagara Mohawk Power Corporation 7.750 10/1/2008 176,901
250,000 NiSource Finance Corporation 7.875 11/15/2010 302,414
200,000 Oncor Electric Delivery Company 6.375 1/15/2015 222,974
200,000 Public Service Company of Colorado 7.875 10/1/2012 245,091
100,000 Texas Gas Transmission Corporation 8.625 4/1/2004 104,000
100,000 TransCanada Pipe Lines, Ltd. 7.150 6/15/2006 110,197
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 1,260,023
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $75,361,650) 78,652,407
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (10.4%) Interest Rate(e) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$5,180,000 Federal National Mortgage Association 1.250% 5/1/2003 $5,180,000
3,918,970 The AAL Money Market Fund 0.840 N/A 3,918,970
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 9,098,970
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $84,460,620) $87,751,377
=========================================================================================================================
(a) The categories of investments are shown as a percentage of total investments.
(b) Earmarked as collateral as discussed in the notes to the financial statements.
(c) Step coupon bond.
(d) Denotes securities purchased on a when-issued basis.
(e) The interest rate shown reflects the current yield, or for securities purchased at a discount, the discount rate at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Money Market Fund
Schedule of Investments as of April 30, 2003(a)
Principal
Amount Certificates of Deposit (14.1%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Banking-- Domestic (7.6%)
- -------------------------------------------------------------------------------------------------------------------------
$9,000,000 Abbey National Treasury North America 1.910% 10/22/2003 $9,000,000
10,000,000 Citibank 1.000 7/30/2003 10,000,000
7,000,000 Toronto Dominion Bank 1.860 8/27/2003 7,000,314
8,000,000 Wells Fargo Financial, Inc. 1.000 5/6/2003 8,000,000
- -------------------------------------------------------------------------------------------------------------------------
Total Banking-- Domestic 34,000,314
=========================================================================================================================
Banking-- Foreign (4.5%)
- -------------------------------------------------------------------------------------------------------------------------
9,000,000 Barclays Bank NY plc 1.270 5/6/2003 9,000,012
11,000,000 Barclays Bank NY plc 1.250 7/28/2003 11,000,134
- -------------------------------------------------------------------------------------------------------------------------
Total Banking-- Foreign 20,000,146
=========================================================================================================================
Finance (2.0%)
- -------------------------------------------------------------------------------------------------------------------------
9,000,000 WestDeutsche Landesbank 1.260 6/27/2003 9,000,000
- -------------------------------------------------------------------------------------------------------------------------
Total Finance 9,000,000
- -------------------------------------------------------------------------------------------------------------------------
Total Certificates of Deposit 63,000,460
=========================================================================================================================
Principal
Amount Commercial Paper (84.0%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities (26.1%)
- -------------------------------------------------------------------------------------------------------------------------
$8,930,000 Amsterdam Funding Corporation 1.260% 5/7/2003 $8,928,125
6,500,000 Amsterdam Funding Corporation 1.260 6/3/2003 6,492,492
8,000,000 Corporate Receivables Corporation 1.230 6/18/2003 7,986,880
5,240,000 CXC, Inc. 1.250 6/19/2003 5,231,085
4,312,000 Edison Asset Securitization, LLC 1.150 7/10/2003 4,302,358
10,750,000 Edison Asset Securitization, LLC 1.250 8/27/2003 10,705,955
9,000,000 GOVCO, Inc. 1.230 6/9/2003 8,988,008
9,000,000 GOVCO, Inc. 1.260 7/14/2003 8,976,690
9,000,000 Montauk Funding Corporation 1.240 5/27/2003 8,991,940
4,400,000 Old Line Funding Corporation 1.270 5/2/2003 4,399,845
9,000,000 Park Avenue Receivables Corporation 1.250 6/4/2003 8,989,375
10,000,000 Starfish Global Funding, LLC 1.260 5/13/2003 9,995,800
9,000,000 Thunder Bay Funding, Inc. 1.260 5/1/2003 9,000,000
4,140,000 Triple A-1 Funding 1.260 7/7/2003 4,130,292
6,500,000 Tulip Funding Corporation 1.260 5/28/2003 6,493,858
3,867,000 Tulip Funding Corporation 1.270 9/11/2003 3,848,856
- -------------------------------------------------------------------------------------------------------------------------
Total Asset-Backed Securities 117,461,559
=========================================================================================================================
Banking-- Domestic (6.0%)
- -------------------------------------------------------------------------------------------------------------------------
10,750,000 Bank of America 1.000 5/29/2003 10,750,000
6,000,000 River Fuel Trust Funding Company, Inc. 1.250 6/16/2003 5,990,417
10,000,000 Wells Fargo Financial, Inc. 1.240 6/6/2003 9,987,600
- -------------------------------------------------------------------------------------------------------------------------
Total Banking-- Domestic 26,728,017
=========================================================================================================================
Banking-- Foreign (5.0%)
- -------------------------------------------------------------------------------------------------------------------------
14,400,000 Svenska Handelsbanke 1.230 6/26/2003 14,372,311
8,000,000 Svenska Handelsbanke 1.250 5/19/2003 7,995,000
- -------------------------------------------------------------------------------------------------------------------------
Total Banking-- Foreign 22,367,311
=========================================================================================================================
Consumer Non-Cyclical (3.2%)
- -------------------------------------------------------------------------------------------------------------------------
9,000,000 Procter & Gamble Company 1.720 8/7/2003 8,957,860
5,315,000 Schering Corporation 1.220 6/10/2003 5,307,795
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Non-Cyclical 14,265,655
=========================================================================================================================
Education (3.7%)
- -------------------------------------------------------------------------------------------------------------------------
2,654,000 Northwestern University 1.260 5/27/2003 2,651,585
1,596,000 Northwestern University 1.270 6/3/2003 1,594,198
2,000,000 Northwestern University 1.270 5/20/2003 1,998,660
2,965,000 Northwestern University 1.270 8/26/2003 2,952,762
3,000,000 Northwestern University 1.250 6/19/2003 2,994,896
4,500,000 Stanford University 1.390 6/2/2003 4,494,440
- -------------------------------------------------------------------------------------------------------------------------
Total Education 16,686,541
=========================================================================================================================
Energy (2.1%)
- -------------------------------------------------------------------------------------------------------------------------
9,600,000 Shell Finance (UK) plc 1.270 9/18/2003 9,552,587
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 9,552,587
=========================================================================================================================
Finance (14.6%)
- -------------------------------------------------------------------------------------------------------------------------
6,800,000 AIG Sun America Global Finance 7.400 5/5/2003 6,802,739
7,800,000 Asset Securitization Cooperative Corporation 1.240 6/13/2003 7,788,447
9,000,000 Asset Securitization Cooperative Corporation 1.250 5/12/2003 8,996,562
8,500,000 Ciesco, LP 1.240 6/5/2003 8,489,753
10,000,000 Citicorp 1.240 6/20/2003 9,982,778
9,000,000 Goldman Sachs Group, Inc. 1.260 5/23/2003 8,993,070
10,058,000 JMG Funding, LP 1.280 5/16/2003 10,052,633
2,899,699 SSgA Money Market Fund 0.930 N/A 2,899,699
1,900,000 Venture Business Trust 1.360 5/1/2003 1,900,000
- -------------------------------------------------------------------------------------------------------------------------
Total Finance 65,905,681
=========================================================================================================================
Food & Beverage (4.7%)
- -------------------------------------------------------------------------------------------------------------------------
7,000,000 Cargill, Inc. 1.220 5/30/2003 6,993,120
5,000,000 Cargill, Inc. 1.270 7/9/2003 4,987,829
9,000,000 Cargill, Inc. 1.230 5/16/2003 8,995,388
- -------------------------------------------------------------------------------------------------------------------------
Total Food & Beverage 20,976,337
=========================================================================================================================
Industrials (2.0%)
- -------------------------------------------------------------------------------------------------------------------------
9,000,000 Corporate Asset Funding 1.220 5/13/2003 8,996,340
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 8,996,340
=========================================================================================================================
Insurance (6.6%)
- -------------------------------------------------------------------------------------------------------------------------
10,750,000 AIG Funding, Inc. 1.240 5/22/2003 10,742,224
9,000,000 American Family Financial Services, Inc. 1.270 6/9/2003 8,987,618
10,000,000 Swiss Reinsurance Company 1.240 7/7/2003 9,976,922
- -------------------------------------------------------------------------------------------------------------------------
Total Insurance 29,706,764
=========================================================================================================================
U.S. Government (6.9%)
- -------------------------------------------------------------------------------------------------------------------------
3,797,000 Federal Home Loan Mortgage Corporation 7.375 5/15/2003 3,804,687
9,000,000 Federal Home Loan Mortgage Corporation 1.240 8/14/2003 8,967,450
6,000,000 Federal Home Loan Mortgage Corporation 3.500 9/15/2003 6,044,691
3,000,000 Federal Home Loan Mortgage Corporation 1.180 6/20/2003 2,995,083
7,542,000 Federal Home Loan Mortgage Corporation 1.630 9/19/2003 7,493,852
1,650,000 Federal Home Loan Mortgage Corporation 1.200 6/2/2003 1,648,240
- -------------------------------------------------------------------------------------------------------------------------
Total U.S. Government 30,954,003
=========================================================================================================================
Utilities (3.7%)
- -------------------------------------------------------------------------------------------------------------------------
7,800,000 General Electric Capital Corporation 1.250 5/14/2003 7,796,479
9,000,000 General Electric Capital Corporation 1.240 5/28/2003 8,991,630
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 16,788,109
- -------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper 377,489,205
=========================================================================================================================
Principal
Amount Variable Rate Notes (1.3%) Yield(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$5,800,000 American Honda Finance Corporation 1.260 7/11/2003 $5,800,000
- -------------------------------------------------------------------------------------------------------------------------
Total Variable Rate Notes 5,800,000
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (at amortized cost) $449,189,364
=========================================================================================================================
(a) The categories of investments are shown as a percentage of total investments.
(b) The interest rate shown reflects the current yield or, for securities purchased at a discount, the discount at the date of purchase.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Mutual Funds
Statement of Assets and Liabilities
AAL AAL AAL AAL
Technology Aggressive Small Cap Small Cap
As of April 30, 2003 Stock Fund Growth Fund Stock Fund Index Fund II
- ---------------------------------------------------------------------------------------------------------------------------------
Assets
Investments at cost $50,705,163 $34,587,535 $287,406,667 $24,909,308
-------------- -------------- -------------- --------------
Investments at value 34,419,880 36,479,499 289,632,737 22,741,217
-------------- -------------- -------------- --------------
Cash 4,437 -- -- --
Initial margin deposit on open
future contracts -- -- -- --
Dividends and interest receivable 2,322 15,701 89,609 10,321
Receivable for investments sold -- 399,683 7,005,889 --
Receivable trust shares sold 29,660 54,341 94,792 11,022
Receivable for forward contracts -- -- -- --
Receivable for variation margin -- -- -- --
Receivable from affiliate 13,191 -- -- --
-------------- -------------- -------------- --------------
Total Assets 34,469,490 36,949,224 296,823,027 22,762,560
-------------- -------------- -------------- --------------
Liabilities
Accrued expenses 63,061 68,757 223,568 19,871
Payable for investments purchased 290,456 466,185 1,670,618 --
Payable for fund shares redeemed 2,587 4,762 147,468 11,549
Payable for forward contracts -- -- -- --
Payable to affiliate -- 38,050 246,547 9,061
-------------- -------------- -------------- --------------
Total Liabilities 356,104 577,754 2,288,201 40,481
-------------- -------------- -------------- --------------
Net Assets
Capital stock (beneficial interest) 81,021,662 74,945,940 322,682,239 25,159,286
Accumulated undistributed net
investment income/(loss) (2,920) (2,990) (13,100) (2,262)
Accumulated undistributed net
realized loss on
investments and foreign currency
transactions (30,620,073) (40,463,444) (30,360,383) (266,854)
Net unrealized appreciation/
(depreciation) on:
Investments (16,285,283) 1,891,964 2,226,070 (2,168,091)
Futures contracts -- -- -- --
Foreign currency forward contracts -- -- -- --
Foreign currency transactions -- -- -- --
-------------- -------------- -------------- --------------
Total Net Assets $34,113,386 $36,371,470 $294,534,826 $22,722,079
-------------- -------------- -------------- --------------
Class A share capital $29,293,657 $30,238,165 $266,650,814 $20,468,695
Shares of beneficial interest outstanding
(Class A) 11,705,052 8,065,791 23,092,481 2,301,323
Net asset value per share $2.50 $3.75 $11.55 $8.89
Maximum public offering price $2.65 $3.97 $12.22 $9.41
Class B share capital $2,601,578 $3,310,945 $21,072,675 $2,253,384
Shares of beneficial interest outstanding
(Class B) 1,069,588 910,968 1,939,503 259,415
Net asset value per share $2.43 $3.63 $10.86 $8.69
Institutional Class share capital $2,218,151 $2,822,360 $6,811,337 --
Shares of beneficial interest outstanding
(Institutional Class) 856,639 726,947 568,497 --
Net asset value per share $2.59 $3.88 $11.98 --
The AAL Mutual Funds
Statement of Assets and Liabilities - continued
AAL AAL AAL
Small Cap Mid Cap Mid Cap
As of April 30, 2003 Value Fund Stock Fund Index Fund
- --------------------------------------------------------------------------------------------------------
Assets
Investments at cost $31,793,613 $714,729,925 $23,064,926
-------------- -------------- --------------
Investments at value 34,516,498 686,221,180 20,684,816
-------------- -------------- --------------
Cash 4,353 -- --
Initial margin deposit on open
future contracts -- -- 29,400
Dividends and interest receivable 18,607 589,910 12,463
Receivable for investments sold 679,936 3,347,412 --
Receivable trust shares sold 69,779 138,406 49,416
Receivable for forward contracts -- -- --
Receivable for variation margin -- -- 2,831
Receivable from affiliate -- -- 143
-------------- -------------- --------------
Total Assets 35,289,173 690,296,908 20,779,069
-------------- -------------- --------------
Liabilities
Accrued expenses 28,678 369,538 11,846
Payable for investments purchased 791,753 1,440,356 4,973
Payable for fund shares redeemed 9,832 640,523 --
Payable for forward contracts -- -- --
Payable to affiliate 15,472 550,825 --
-------------- -------------- --------------
Total Liabilities 845,735 3,001,242 16,819
-------------- -------------- --------------
Net Assets
Capital stock (beneficial interest) 37,502,641 868,157,719 23,800,951
Accumulated undistributed net
investment income/(loss) (588) (24,011) 42,710
Accumulated undistributed net
realized loss on
investments and foreign currency
transactions (5,781,500) (152,329,297) (734,315)
Net unrealized appreciation/
(depreciation) on:
Investments 2,722,885 (28,508,745) (2,380,110)
Futures contracts -- -- 33,014
Foreign currency forward contracts -- -- --
Foreign currency transactions -- -- --
-------------- -------------- --------------
Total Net Assets $34,443,438 $687,295,666 $20,762,250
-------------- -------------- --------------
Class A share capital $27,690,564 $643,797,595 --
Shares of beneficial interest outstanding
(Class A) 2,967,456 59,949,701 --
Net asset value per share $9.33 $10.74 --
Maximum public offering price $9.87 $11.37 --
Class B share capital $2,913,691 $22,796,360 --
Shares of beneficial interest outstanding
(Class B) 316,391 2,291,047 --
Net asset value per share $9.21 $9.95 --
Institutional Class share capital $3,839,183 $20,701,711 $20,762,250
Shares of beneficial interest outstanding
(Institutional Class) 405,198 1,872,389 2,329,452
Net asset value per share $9.47 $11.06 $8.91
The AAL Mutual Funds
Statement of Assets and Liabilities - continued
AAL AAL AAL
Mid Cap International Capital
As of April 30, 2003 Index Fund II Fund Growth Fund
- --------------------------------------------------------------------------------------------------------
Assets
Investments at cost $36,044,520 $154,819,103 $2,106,740,739
-------------- -------------- --------------
Investments at value 31,973,212 134,709,638 2,749,967,502
-------------- -------------- --------------
Cash -- -- 4,943
Initial margin deposit on open
future contracts 29,400 -- --
Dividends and interest receivable 19,270 851,683 1,861,001
Receivable for investments sold -- 818,463 --
Receivable trust shares sold 10,756 126,295 443,967
Receivable for forward contracts -- 1,274,018 --
Receivable for variation margin 2,831 -- --
Receivable from affiliate -- -- --
-------------- -------------- --------------
Total Assets 32,035,469 137,780,097 2,752,277,413
-------------- -------------- --------------
Liabilities
Accrued expenses 29,577 157,351 888,330
Payable for investments purchased 8,873 455,859 --
Payable for fund shares redeemed 6,799 72,034 1,930,380
Payable for forward contracts -- 1,285,168 --
Payable to affiliate 30,183 113,517 1,887,623
-------------- -------------- --------------
Total Liabilities 75,432 2,083,929 4,706,333
-------------- -------------- --------------
Net Assets
Capital stock (beneficial interest) 36,696,537 236,394,898 2,108,667,484
Accumulated undistributed net
investment income/(loss) (2,618) 169,456 2,163,921
Accumulated undistributed net
realized loss on
investments and foreign currency
transactions (703,189) (80,801,727) (6,487,088)
Net unrealized appreciation/
(depreciation) on:
Investments (4,071,308) (20,109,465) 643,226,763
Futures contracts 40,615 -- --
Foreign currency forward contracts -- (11,150) --
Foreign currency transactions -- 54,156 --
-------------- -------------- --------------
Total Net Assets $31,960,037 $135,696,168 $2,747,571,080
-------------- -------------- --------------
Class A share capital $29,006,273 $126,478,545 $2,598,205,110
Shares of beneficial interest outstanding
(Class A) 3,355,023 18,946,818 102,344,188
Net asset value per share $8.65 $6.68 $25.39
Maximum public offering price $9.15 $7.07 $26.87
Class B share capital $2,953,764 $6,381,082 $81,186,872
Shares of beneficial interest outstanding
(Class B) 350,377 979,077 3,356,824
Net asset value per share $8.43 $6.52 $24.19
Institutional Class share capital -- $2,836,541 $68,179,098
Shares of beneficial interest outstanding
(Institutional Class) -- 421,511 2,678,205
Net asset value per share -- $6.73 $25.46
The accompanying notes to the financial statements are an integral part of this statement.
The AAL Mutual Funds
Statement of Assets and Liabilities - continued
AAL Large AAL Large AAL Equity AAL
Company Company Income Balanced
As of April 30, 2003 Index Fund Index Fund II Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------------
Assets
Investments at cost $74,778,658 $40,669,076 $234,783,740 $429,519,678
-------------- -------------- -------------- --------------
Investments at value 61,804,980 30,992,562 223,030,920 418,339,119
-------------- -------------- -------------- --------------
Cash -- -- -- 90,814
Initial margin deposit on open future
contracts 188,100 85,500 -- --
Dividends and interest receivable 68,331 48,877 268,062 1,634,446
Receivable for investments sold -- -- 2,193,169 2,610,586
Receivable trust shares sold 33,716 15,095 99,278
Receivable from affiliate -- 42,501 -- --
-------------- -------------- -------------- --------------
Total Assets 62,095,127 31,184,535 225,591,429 422,749,846
-------------- -------------- -------------- --------------
Liabilities
Distributions payable -- -- -- --
Accrued expenses 13,450 24,511 115,658 107,526
Payable for investments purchased -- -- 553,218 34,261,335
Payable for fund shares redeemed -- 1,090 145,634 156,131
Payable for variation margin -- 109 -- --
Payable to affiliate 15,152 -- 136,733 246,547
-------------- -------------- -------------- --------------
Total Liabilities 28,602 25,710 951,243 34,771,539
-------------- -------------- -------------- --------------
Net Assets
Capital stock (beneficial interest) 79,618,124 42,955,640 269,625,727 415,957,675
Accumulated undistributed net investment
income/(loss) 281,700 118,019 (12,578) 587,929
Accumulated undistributed net realized gain/
(loss) on investments and foreign currency
transactions (5,003,113) (2,322,115) (33,220,143) (17,386,738)
Net unrealized appreciation/(depreciation)
on:
Investments (12,973,678) (9,676,514) (11,752,820) (11,180,559)
Futures contracts 143,492 83,795 -- --
-------------- -------------- -------------- --------------
Total Net Assets $62,066,525 $31,158,825 $224,640,186 $387,978,307
-------------- -------------- -------------- --------------
Class A share capital -- $27,800,920 $206,743,705 $260,818,423
Shares of beneficial interest outstanding
(Class A) -- 4,414,714 20,300,873 24,268,406
Net asset value per share -- $6.30 $10.18 $10.75
Maximum public offering price -- $6.67 $10.77 $11.38
Class B share capital -- $3,357,905 $8,102,333 $19,343,239
Shares of beneficial interest outstanding
(Class B) -- 545,828 797,767 1,808,000
Net asset value per share -- $6.15 $10.16 $10.70
Institutional Class share capital $62,066,525 -- $9,794,148 $107,816,645
Shares of beneficial interest outstanding
(Institutional Class) 9,833,120 -- 960,525 10,039,665
Net asset value per share $6.31 -- $10.20 $10.74
Statement of Assets and Liabilities - continued
AAL AAL AAL
High Yield Municipal Bond
As of April 30, 2003 Bond Fund Bond Fund Fund
- --------------------------------------------------------------------------------------------------------
Assets
Investments at cost $120,480,771 $628,947,354 $660,941,672
-------------- -------------- --------------
Investments at value 124,852,796 677,473,867 680,377,314
-------------- -------------- --------------
Cash -- 2,753 --
Initial margin deposit on open future
contracts -- -- --
Dividends and interest receivable 2,770,032 10,875,953 4,856,097
Receivable for investments sold 658,085 336,188 12,677,444
Receivable trust shares sold 131,836 258,523 149,699
Receivable from affiliate -- -- --
-------------- -------------- --------------
Total Assets 128,412,749 688,947,284 698,060,554
-------------- -------------- --------------
Liabilities
Distributions payable 277,776 465,679 259,783
Accrued expenses 69,007 82,585 128,358
Payable for investments purchased 1,318,988 -- 128,133,418
Payable for fund shares redeemed 98,055 595,513 290,937
Payable for variation margin -- -- --
Payable to affiliate 58,033 415,736 333,793
-------------- -------------- --------------
Total Liabilities 1,821,859 1,559,513 129,146,289
-------------- -------------- --------------
Net Assets
Capital stock (beneficial interest) 194,077,658 649,334,220 558,955,755
Accumulated undistributed net investment
income/(loss) 253,930 (8) 96,451
Accumulated undistributed net realized
gain/(loss) on
investments and foreign currency
transactions (72,112,723) (10,472,954) (9,573,583)
Net unrealized appreciation/(depreciation)
on:
Investments 4,372,025 48,526,513 19,435,642
Futures contracts -- -- --
-------------- -------------- --------------
Total Net Assets $126,590,890 $687,387,771 $568,914,265
-------------- -------------- --------------
Class A share capital $117,351,063 $671,624,636 $526,474,367
Shares of beneficial interest outstanding
(Class A) 18,714,874 58,280,839 51,061,279
Net asset value per share $6.27 $11.52 $10.31
Maximum public offering price $6.57 $12.06 $10.80
Class B share capital $5,957,527 $12,346,247 $13,205,712
Shares of beneficial interest outstanding
(Class B) 950,073 1,071,736 1,280,168
Net asset value per share $6.27 $11.52 $10.32
Institutional Class share capital $3,282,300 $3,416,888 $29,234,186
Shares of beneficial interest outstanding
(Institutional Class) 523,634 296,561 2,834,482
Net asset value per share $6.27 $11.52 $10.31
Statement of Assets and Liabilities - continued
AAL AAL
Bond Index Money Market
As of April 30, 2003 Fund Fund
- ------------------------------------------------------------------------------------
Assets
Investments at cost $84,460,620 $449,189,364
-------------- --------------
Investments at value 87,751,377 449,189,364
-------------- --------------
Cash 4,544 62,398
Initial margin deposit on open future
contracts -- --
Dividends and interest receivable 814,432 656,025
Receivable for investments sold -- --
Receivable trust shares sold 42,507 4,325,731
Receivable from affiliate -- --
-------------- --------------
Total Assets 88,612,860 454,233,518
-------------- --------------
Liabilities
Distributions payable 181,915 13,472
Accrued expenses 14,618 173,466
Payable for investments purchased 7,366,500 --
Payable for fund shares redeemed 276 9,938,391
Payable for variation margin -- --
Payable to affiliate 31,153 245,046
-------------- --------------
Total Liabilities 7,594,462 10,370,375
-------------- --------------
Net Assets
Capital stock (beneficial interest) 77,797,497 443,827,932
Accumulated undistributed net investment
income/(loss) 18,633 35,211
Accumulated undistributed net realized
gain/(loss) on
investments and foreign currency
transactions (88,489) --
Net unrealized appreciation/(depreciation)
on:
Investments 3,290,757 --
Futures contracts -- --
-------------- --------------
Total Net Assets $81,018,398 $443,863,143
-------------- --------------
Class A share capital -- $349,643,140
Shares of beneficial interest outstanding
(Class A) -- 349,643,140
Net asset value per share -- $1.00
Maximum public offering price -- $1.00
Class B share capital -- $2,833,759
Shares of beneficial interest outstanding
(Class B) -- 2,833,759
Net asset value per share -- $1.00
Institutional Class share capital $81,018,398 $91,386,244
Shares of beneficial interest outstanding
(Institutional Class) 7,391,262 91,386,244
Net asset value per share $10.96 $1.00
The accompanying notes to the financial statements are an integral part of this statement.
The AAL Mutual Funds
Statement of Operations
AAL AAL AAL AAL
Technology Aggressive Small Cap Small Cap
For the year ended April 30, 2003 Stock Fund Growth Fund Stock Fund Index Fund II
- ------------------------------------------------------------------------------------------------------------------
Investment Income
Dividends $93,056 $321,206 $2,121,684 $193,278
Taxable interest 2,459 29,636 24,563 9
Foreign dividend tax witholding (446) (1,137) (1,393) (106)
------------- ------------- ------------- -------------
Total Investment Income 95,069 349,705 2,144,854 193,181
------------- ------------- ------------- -------------
Expenses
Adviser fees 243,729 219,978 2,114,767 53,330
Subadviser fees -- 85,912 -- --
Administrative service and pricing fees 25,809 25,894 50,896 28,584
Audit fees 22,840 23,068 23,547 18,445
Legal fees 257 315 -- --
Custody fees 8,523 19,158 23,117 23,679
Distribution expense Class A 66,129 75,261 697,373 48,437
Distribution expense Class B 22,214 30,337 245,689 19,570
Printing and postage expense Class A 129,341 130,319 468,096 23,535
Printing and postage expense Class B 16,087 14,088 39,572 3,628
Printing and postage expense Institutional Class -- -- 178 --
SEC and state registration expense 41,484 41,171 56,707 27,886
Shareholder maintenance fees Class A 70,626 71,101 258,212 15,841
Shareholder maintenance fees Class B 8,676 9,489 37,813 2,211
Shareholder maintenance fees Institutional Class 24 30 98 --
Transfer agent fees Class A 191,404 190,495 696,353 42,875
Transfer agent fees Class B 21,797 25,693 103,176 5,891
Transfer agent fees Institutional Class 62 89 273 --
Trustees' fees and expenses -- -- -- --
Other expenses, net 1,860 1,930 (3,937) 1,959
------------- ------------- ------------- -------------
Total Expenses Before Reimbursement 870,862 964,328 4,811,930 315,871
------------- ------------- ------------- -------------
Less:
Reimbursement from adviser (108,606) (2,939) (54,110) (11,270)
Directed brokerage (6,074) -- (4,628) --
Fees paid indirectly (44) (10) (50) (5)
------------- ------------- ------------- -------------
Total Net Expenses 756,138 961,379 4,753,142 304,596
------------- ------------- ------------- -------------
Net Investment Income/(Loss) (661,069) (611,674) (2,608,288) (111,415)
------------- ------------- ------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments (6,715,842) (13,764,368) (25,870,944) (105,395)
Futures contracts -- -- -- --
Foreign currency transactions -- (55,592) -- --
Change in net unrealized appreciation/(depreciation) on:
Investments (733,387) 6,586,366 (58,852,217) (5,162,810)
Futures contracts -- -- -- --
Foreign currency forward contracts -- (11,235) -- --
Foreign currency transactions -- -- -- --
Net Realized and Unrealized Gains/(Losses) on ------------- ------------- ------------- -------------
Investmentsand Foreign Currency Transactions (7,449,229) (7,244,829) (84,723,161) (5,268,205)
------------- ------------- ------------- -------------
Net Increase/(Decrease) in Net Assets Resulting ------------- ------------- ------------- -------------
From Operations $(8,110,298) $(7,856,503) $(87,331,449) $(5,379,620)
------------- ------------- ------------- -----------
The AAL Mutual Funds
Statement of Operations -- continued
AAL AAL AAL
Small Cap Mid Cap Mid Cap
For the year ended April 30, 2003 Value Fund Stock Fund Index Fund
- --------------------------------------------------------------------------------------------------------
Investment Income
Dividends $289,655 $8,028,824 $241,320
Taxable interest 6,276 203,395 47
Foreign dividend tax witholding (557) (8,692) --
------------- ------------- -------------
Total Investment Income 295,374 8,223,527 241,367
------------- ------------- -------------
Expenses
Adviser fees 211,398 4,862,866 51,414
Subadviser fees -- -- --
Administrative service and pricing fees 25,925 69,571 27,496
Audit fees 20,270 24,210 25,121
Legal fees 202 -- 506
Custody fees 27,263 26,054 16,462
Distribution expense Class A 62,455 1,715,144 --
Distribution expense Class B 24,420 255,561 --
Printing and postage expense Class A 53,562 834,729 --
Printing and postage expense Class B 6,038 55,436 --
Printing and postage expense Institutional Class -- -- --
SEC and state registration expense 37,229 55,919 21,346
Shareholder maintenance fees Class A 33,882 460,748 --
Shareholder maintenance fees Class B 3,815 42,333 --
Shareholder maintenance fees Institutional Class 2 99 82
Transfer agent fees Class A 91,529 1,246,488 --
Transfer agent fees Class B 10,394 113,152 --
Transfer agent fees Institutional Class 10 280 233
Trustees' fees and expenses 904 -- --
Other expenses, net 5,165 12,145 (25,461)
------------- ------------- -------------
Total Expenses Before Reimbursement 614,463 9,774,735 117,199
------------- ------------- -------------
Less:
Reimbursement from adviser (58,435) (83,886) (58,793)
Directed brokerage (1,966) (3,015) --
Fees paid indirectly (20) (66) (10)
------------- ------------- -------------
Total Net Expenses 554,042 9,687,768 58,396
------------- ------------- -------------
Net Investment Income/(Loss) (258,668) (1,464,241) 182,971
------------- ------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments (5,692,055) (43,113,627) 383,610
Futures contracts -- -- (49,260)
Foreign currency transactions -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments (208,280) (115,065,272) (4,893,181)
Futures contracts -- -- 33,014
Foreign currency forward contracts -- -- --
Foreign currency transactions -- -- --
Net Realized and Unrealized Gains/(Losses) on ------------- ------------- -------------
Investmentsand Foreign Currency Transactions (5,900,335) (158,178,899) (4,525,817)
------------- ------------- -------------
Net Increase/(Decrease) in Net Assets Resulting
From Operations $(6,159,003) $(159,643,140) $(4,342,846)
------------- ------------- -------------
The AAL Mutual Funds
Statement of Operations -- continued
AAL AAL AAL
Mid Cap International Capital
For the year ended April 30, 2003 Index Fund II Fund Growth Fund
- --------------------------------------------------------------------------------------------------------
Investment Income
Dividends $353,877 $3,199,586 $40,346,809
Taxable interest 1,072 50,958 832,187
Foreign dividend tax witholding -- (387,333) (237,543)
------------- ------------- -------------
Total Investment Income 354,949 2,863,211 40,941,453
------------- ------------- -------------
Expenses
Adviser fees 75,179 374,760 15,729,371
Subadviser fees -- 548,892 --
Administrative service and pricing fees 24,408 63,856 133,872
Audit fees 19,421 30,667 34,738
Legal fees 84 -- --
Custody fees 25,776 84,065 72,679
Distribution expense Class A 68,818 347,762 6,918,126
Distribution expense Class B 25,445 76,291 947,358
Printing and postage expense Class A 31,129 316,873 2,083,129
Printing and postage expense Class B 3,171 35,266 169,676
Printing and postage expense Institutional Class -- -- --
SEC and state registration expense 28,483 45,733 80,509
Shareholder maintenance fees Class A 21,675 179,172 1,090,564
Shareholder maintenance fees Class B 3,424 18,867 107,410
Shareholder maintenance fees Institutional Class -- 61 198
Transfer agent fees Class A 58,316 489,140 2,943,559
Transfer agent fees Class B 9,139 53,590 296,599
Transfer agent fees Institutional Class -- 13 --
Trustees' fees and expenses -- -- --
Other expenses, net (4,155) (17,316) 104,353
------------- ------------- -------------
Total Expenses Before Reimbursement 390,313 2,647,692 30,712,141
------------- ------------- -------------
Less:
Reimbursement from adviser (5,287) -- (46,217)
Directed brokerage -- -- (3,521)
Fees paid indirectly (19) (9) (25)
------------- ------------- -------------
Total Net Expenses 385,007 2,647,683 30,662,378
------------- ------------- -------------
Net Investment Income/(Loss) (30,058) 215,528 10,279,075
------------- ------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments (8,091) (22,626,640) 41,379,945
Futures contracts (97,769) -- --
Foreign currency transactions -- (23,209) --
Change in net unrealized appreciation/(depreciation) on:
Investments (6,119,609) (18,647,688) (592,144,065)
Futures contracts 40,615 -- --
Foreign currency forward contracts -- (10,245) --
Foreign currency transactions -- 48,594 --
Net Realized and Unrealized Gains/(Losses) on ------------- ------------- -------------
Investmentsand Foreign Currency Transactions (6,184,854) (41,259,188) (550,764,120)
------------- ------------- -------------
Net Increase/(Decrease) in Net Assets Resulting
From Operations $(6,214,912) $(41,043,660) $(540,485,045)
------------- ------------- -------------
The accompanying notes to the financial statements are an integral part of this statement.
The AAL Mutual Funds
Statement of Operations -- continued
AAL Large AAL Large AAL Equity AAL
Company Company Income Balanced
For the year ended April 30, 2003 Index Fund Index Fund II Fund Fund
- --------------------------------------------------------------------------------------------------------------------------------
Investment Income
Dividends $1,030,677 $563,100 $5,190,954 $2,864,725
Taxable interest -- -- 10,999 6,705,766
Tax exempt interest -- -- -- --
Foreign dividend tax witholding (2,410) (1,270) (4,002) (12,801)
------------- ------------- ------------- -------------
Total Investment Income 1,028,267 561,830 5,197,951 9,557,690
------------- ------------- ------------- -------------
Expenses
Adviser fees 138,172 78,473 1,123,589 1,823,420
Subadviser fees -- -- -- --
Administrative service and pricing fees 27,999 27,973 51,063 56,599
Amortization of organizational costs and initial registration fees -- -- -- 13,913
Audit fees 24,491 18,329 22,494 25,646
Legal fees 300 314 -- --
Custody fees 20,804 15,766 14,553 18,558
Distribution expense Class A -- 71,773 581,946 682,206
Distribution expense Class B -- 26,799 96,089 203,103
Printing and postage expense Class A -- 33,332 235,076 188,640
Printing and postage expense Class B -- 5,304 19,736 1,820
Printing and postage expense Institutional Class -- -- -- 63
SEC and state registration expense 18,885 29,271 51,456 60,187
Shareholder maintenance fees Class A -- 21,138 130,709 109,797
Shareholder maintenance fees Class B -- 3,214 11,963 14,851
Shareholder maintenance fees Institutional Class 50 -- 87 45
Transfer agent fees Class A -- 56,966 361,774 300,033
Transfer agent fees Class B -- 8,475 32,024 36,727
Transfer agent fees Institutional Class 160 -- 248 142
Trustees' fees and expenses -- -- 6,555 --
Other expenses, net (32,372) 1,073 7,561 3,204
------------- ------------- ------------- -------------
Total Expenses Before Reimbursement 198,489 398,200 2,746,923 3,538,954
------------- ------------- ------------- -------------
Less:
Reimbursement from adviser (67,033) (79,095) (34,755) (52,062)
Directed brokerage -- -- (9,264) (3,810)
Fees paid indirectly (1) -- -- (335)
------------- ------------- ------------- -------------
Total Net Expenses 131,455 319,105 2,702,904 3,482,747
------------- ------------- ------------- -------------
Net Investment Income/(Loss) 896,812 242,725 2,495,047 6,074,943
------------- ------------- ------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments (4,052,317) (1,705,994) (26,857,628) (6,673,563)
Futures contracts (54,060) (102,432) -- --
Change in net unrealized appreciation/(depreciation) on:
Investments (5,927,155) (3,345,226) (40,008,522) (16,067,320)
Futures contracts 143,492 83,795 -- --
Net Realized and Unrealized Gains/(Losses) on ------------- ------------- ------------- -------------
Investments and Foreign Currency Transactions (9,890,040) (5,069,857) (66,866,150) (22,740,883)
------------- ------------- ------------- -------------
Net Increase/(Decrease) in Net Assets Resulting
From Operations $(8,993,228) $(4,827,132) $(64,371,103) $(16,665,940)
------------- ------------- ------------- -------------
The AAL Mutual Funds
Statement of Operations -- continued
AAL AAL AAL
High Yield Municipal Bond
For the year ended April 30, 2003 Bond Fund Bond Fund Fund
- ----------------------------------------------------------------------------------------------------------------
Investment Income
Dividends $45,226 $-- $150,517
Taxable interest 11,325,837 413,865 27,253,482
Tax exempt interest -- 34,038,118 --
Foreign dividend tax witholding -- -- --
------------- ------------- -------------
Total Investment Income 11,371,063 34,451,983 27,403,999
------------- ------------- -------------
Expenses
Adviser fees 353,420 2,980,921 2,444,043
Subadviser fees 294,516 -- --
Administrative service and pricing fees 56,017 82,072 51,610
Amortization of organizational costs and initial registration fees -- -- --
Audit fees 25,476 28,584 26,162
Legal fees -- -- --
Custody fees 11,085 17,747 20,122
Distribution expense Class A 271,176 1,614,415 1,264,275
Distribution expense Class B 64,628 119,392 107,325
Printing and postage expense Class A -- 82,150 171,311
Printing and postage expense Class B 4,925 3,123 5,200
Printing and postage expense Institutional Class -- -- 42
SEC and state registration expense 49,572 80,675 68,104
Shareholder maintenance fees Class A 43,900 77,634 131,223
Shareholder maintenance fees Class B 4,386 3,066 7,279
Shareholder maintenance fees Institutional Class 38 20 111
Transfer agent fees Class A 121,987 211,566 359,936
Transfer agent fees Class B 13,267 3,575 19,088
Transfer agent fees Institutional Class -- 3 231
Trustees' fees and expenses -- -- --
Other expenses, net (45,783) 9,104 5,217
------------- ------------- -------------
Total Expenses Before Reimbursement 1,268,610 5,314,047 4,681,279
------------- ------------- -------------
Less:
Reimbursement from adviser (121,186) (16,826) (55,749)
Directed brokerage -- -- --
Fees paid indirectly (270) (88) (1,311)
------------- ------------- -------------
Total Net Expenses 1,147,154 5,297,133 4,624,219
------------- ------------- -------------
Net Investment Income/(Loss) 10,223,909 29,154,850 22,779,780
------------- ------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments (4,722,489) 1,328,662 11,395,757
Futures contracts -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 5,907,656 16,557,031 16,823,088
Futures contracts -- -- --
Net Realized and Unrealized Gains/(Losses) on ------------- ------------- -------------
Investments and Foreign Currency Transactions 1,185,167 17,885,693 28,218,845
Net Increase/(Decrease) in Net Assets Resulting ------------- ------------- -------------
From Operations $11,409,076 $47,040,543 $50,998,625
------------- ------------- -------------
The AAL Mutual Funds
Statement of Operations -- continued
AAL AAL
Bond Index Money Market
For the year ended April 30, 2003 Fund Fund
- -----------------------------------------------------------------------------------------------
Investment Income
Dividends $29,501 $--
Taxable interest 3,798,660 8,141,553
Tax exempt interest -- --
Foreign dividend tax witholding -- --
------------- -------------
Total Investment Income 3,828,161 8,141,553
------------- -------------
Expenses
Adviser fees 174,765 2,458,033
Subadviser fees -- --
Administrative service and pricing fees 32,397 48,429
Amortization of organizational costs and initial registration fees -- --
Audit fees 25,370 20,387
Legal fees 123 --
Custody fees 8,578 22,440
Distribution expense Class A -- 478,460
Distribution expense Class B -- 26,132
Printing and postage expense Class A -- 346,362
Printing and postage expense Class B -- --
Printing and postage expense Institutional Class -- --
SEC and state registration expense 19,875 85,771
Shareholder maintenance fees Class A -- 174,551
Shareholder maintenance fees Class B -- 1,883
Shareholder maintenance fees Institutional Class 77 223
Transfer agent fees Class A -- 484,208
Transfer agent fees Class B -- 6,009
Transfer agent fees Institutional Class 227 563
Trustees' fees and expenses -- --
Other expenses, net (14,953) (2,788)
------------- -------------
Total Expenses Before Reimbursement 246,459 4,150,663
------------- -------------
Less:
Reimbursement from adviser (65,482) (653,316)
Directed brokerage -- --
Fees paid indirectly (65) (519)
------------- -------------
Total Net Expenses 180,912 3,496,828
------------- -------------
Net Investment Income/(Loss) 3,647,249 4,644,725
------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments 901,692 --
Futures contracts -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 3,066,160 --
Futures contracts -- --
Net Realized and Unrealized Gains/(Losses) on ------------- -------------
Investments and Foreign Currency Transactions 3,967,852 --
Net Increase/(Decrease) in Net Assets Resulting ------------- -------------
From Operations $7,615,101 $4,644,725
------------- -------------
The accompanying notes to the financial statements are an integral part of this statement.
The AAL Mutual Funds
Statement of Changes in Net Assets
AAL Technology Stock Fund AAL Aggressive Growth Fund
------------------------- -------------------------
For the years ended 4/30/2003 4/30/2002 4/30/2003 4/30/2002
- -------------------------------------------------------------------------------------------------------------------------
Operations
Net investment loss $(661,069) $(763,040) $(611,674) $(565,159)
Net realized gains/(losses) on:
Investments (6,715,842) (16,328,310) (13,764,368) (16,861,020)
Foreign currency transactions -- -- (55,592) (50,439)
Change in net unrealized appreciation/(depreciation) on:
Investments (733,387) (2,884,988) 6,586,366 (286,273)
Foreign currency forward contracts -- -- (11,235) 11,235
Net Change in Net Assets Resulting
-------------- -------------- -------------- --------------
From Operations (8,110,298) (19,976,338) (7,856,503) (17,751,656)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net realized gains -- -- -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders -- -- -- --
-------------- -------------- -------------- --------------
Capital Stock Transactions 359,069 22,133,414 (749,843) 16,217,783
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets (7,751,229) 2,157,076 (8,606,346) (1,533,873)
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 41,864,615 39,707,539 44,977,816 46,511,689
-------------- -------------- -------------- --------------
Net Assets, End of Period $34,113,386 $41,864,615 $36,371,470 $44,977,816
-------------- -------------- -------------- --------------
AAL Mid Cap Stock Fund AAL Mid Cap Index Fund
------------------------- -------------------------
For the years ended 4/30/2003 4/30/2002 4/30/2003 4/30/2002
- -------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income/(loss) $(1,464,241) $(2,399,504) $182,971 $148,847
Net realized gains/(losses) on:
Investments (43,113,627) (89,552,781) 383,610 (18,527)
Futures contracts -- -- (49,260) --
Foreign currency transactions -- -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments (115,065,272) 3,341,387 (4,893,181) 1,834,735
Futures contracts -- -- 33,014 --
Foreign currency forward contracts -- -- -- --
Foreign currency transactions -- -- -- --
Net Change in Net Assets Resulting -------------- -------------- -------------- --------------
From Operations (159,643,140) (88,610,898) (4,342,846) 1,965,055
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income -- -- (189,081) (142,342)
From net realized gains -- (24,365,497) (558,179) (249,560)
-------------- -------------- -------------- --------------
Total Distributions to Shareholders -- (24,365,497) (747,260) (391,902)
-------------- -------------- -------------- --------------
Capital Stock Transactions (47,410,308) 63,441,072 1,515,301 9,752,372
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets (207,053,448) (49,535,323) (3,574,805) 11,325,525
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 894,349,114 943,884,437 24,337,055 13,011,530
-------------- -------------- -------------- --------------
Net Assets, End of Period $687,295,666 $894,349,114 $20,762,250 $24,337,055
-------------- -------------- -------------- --------------
AAL Small Cap Stock Fund AAL Small Cap Index Fund II
------------------------- ---------------------------
For the years ended 4/30/2003 4/30/2002 4/30/2003 4/30/2002
- -------------------------------------------------------------------------------------------------------------------------
Operations
Net investment loss $(2,608,288) $(2,573,344) $(111,415) $(147,265)
Net realized gains/(losses) on:
Investments (25,870,944) (2,028,506) (105,395) 54,320
Foreign currency transactions -- -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments (58,852,217) 40,510,604 (5,162,810) 2,890,453
Foreign currency forward contracts -- -- -- --
Net Change in Net Assets Resulting -------------- -------------- -------------- --------------
From Operations (87,331,449) 35,908,754 (5,379,620) 2,797,508
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net realized gains -- (1,747,341) (135,306) (95,025)
-------------- -------------- -------------- --------------
Total Distributions to Shareholders -- (1,747,341) (135,306) (95,025)
-------------- -------------- -------------- --------------
Capital Stock Transactions (1,577,965) 55,696,997 4,599,568 6,205,506
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets (88,909,414) 89,858,410 (915,358) 8,907,989
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 383,444,240 293,585,830 23,637,437 14,729,448
-------------- -------------- -------------- --------------
Net Assets, End of Period $294,534,826 $383,444,240 $22,722,079 $23,637,437
-------------- -------------- -------------- --------------
AAL Mid Cap Index Fund II AAL International Fund
------------------------- -------------------------
For the years ended 4/30/2003 4/30/2002 4/30/2003 4/30/2002
- -------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income/(loss) $(30,058) $(94,549) $215,528 $50,350
Net realized gains/(losses) on:
Investments (8,091) (45,807) (22,626,640) (52,755,913)
Futures contracts (97,769) -- -- --
Foreign currency transactions -- -- (23,209) 1,383,340
Change in net unrealized appreciation/(depreciation) on:
Investments (6,119,609) 1,789,243 (18,647,688 16,659,261
Futures contracts 40,615 -- -- --
Foreign currency forward contracts -- -- (10,245) --
Foreign currency transactions -- -- 48,594 (806,929)
Net Change in Net Assets Resulting -------------- -------------- -------------- --------------
From Operations (6,214,912) 1,648,887 (41,043,660) (35,469,891)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income -- -- (615,956) (2,212,010)
From net realized gains (330,723) (86,931) -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders (330,723) (86,931) (615,956) (2,212,010)
-------------- -------------- -------------- --------------
Capital Stock Transactions 6,630,717 10,458,143 (2,438,838) 9,866,627
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets 85,082 12,020,099 (44,098,454) (27,815,274)
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 31,874,955 19,854,856 179,794,622 207,609,896
-------------- -------------- -------------- --------------
Net Assets, End of Period $31,960,037 $31,874,955 $135,696,168 $179,794,622
-------------- -------------- -------------- --------------
AAL Small Cap Value Fund
-------------------------
For the years ended 4/30/2003 4/30/2002 /1/
- ----------------------------------------------------------------------------------------
Operations
Net investment loss $(258,668) $(127,143)
Net realized gains/(losses) on:
Investments (5,692,055) 238,063
Foreign currency transactions -- --
Change in net unrealized appreciation/(depreciation) on:
Investments (208,280) 2,931,165
Foreign currency forward contracts -- --
Net Change in Net Assets Resulting -------------- --------------
From Operations (6,159,003) 3,042,085
-------------- --------------
Distributions to Shareholders
From net realized gains (206,763) --
-------------- --------------
Total Distributions to Shareholders (206,763) --
-------------- --------------
Capital Stock Transactions 12,741,195 25,025,924
-------------- --------------
Net Increase/(Decrease) in Net Assets 6,375,429 28,068,009
-------------- --------------
Net Assets, Beginning of Period 28,068,009 --
-------------- --------------
Net Assets, End of Period $34,443,438 $28,068,009
-------------- --------------
AAL Capital Growth Fund
-------------------------
For the years ended 4/30/2003 4/30/2002
- ---------------------------------------------------------------------------------------
Operations
Net investment income/(loss) $10,279,075 $4,960,316
Net realized gains/(losses) on:
Investments 41,379,945 (47,867,032)
Futures contracts -- --
Foreign currency transactions -- --
Change in net unrealized appreciation/(depreciation) on:
Investments (592,144,065) (538,389,854)
Futures contracts -- --
Foreign currency forward contracts -- --
Foreign currency transactions -- --
Net Change in Net Assets Resulting -------------- --------------
From Operations (540,485,045) (581,296,570)
-------------- --------------
Distributions to Shareholders
From net investment income (8,525,456) (10,261,073)
From net realized gains -- (10,154,187)
-------------- --------------
Total Distributions to Shareholders (8,525,456) (20,415,260)
-------------- --------------
Capital Stock Transactions (281,236,979) 21,093,430
-------------- --------------
Net Increase/(Decrease) in Net Assets (830,247,480) (580,618,400)
-------------- --------------
Net Assets, Beginning of Period 3,577,818,560 4,158,436,960
-------------- --------------
Net Assets, End of Period $2,747,571,080 $3,577,818,560
-------------- --------------
/1/ Since Portfolio inception, July 17, 2001.
The accompanying notes to the financial statements are an integral part of this statement.
AAL Large Company Index Fund AAL Large Company Index Fund II
---------------------------- -------------------------------
For the years ended 4/30/2003 4/30/2002 4/30/2003 4/30/2002
- --------------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $896,812 $559,229 $242,725 $2,677
Net realized losses on:
Investments (4,052,317) (618,672) (1,705,994) (237,486)
Futures contracts (54,060) -- (102,432) --
Change in net unrealized appreciation/
(depreciation) on:
Investments (5,927,155) (2,517,415) (3,345,226) (3,709,331)
Futures contracts 143,492 -- 83,795 --
Net Change in Net Assets Resulting
-------------- -------------- -------------- --------------
From Operations (8,993,228) (2,576,858) (4,827,132) (3,944,140)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income (823,832) (438,942) (122,309) --
From net realized gains -- -- -- --
Return of capital -- -- -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders (823,832) (438,942) (122,309) --
-------------- -------------- -------------- --------------
Capital Stock Transactions 8,904,399 39,429,383 3,367,131 13,820,738
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets (912,661) 36,413,583 (1,582,310) 9,876,598
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 62,979,186 26,565,603 32,741,135 22,864,537
-------------- -------------- -------------- --------------
Net Assets, End of Period $62,066,525 $62,979,186 $31,158,825 $32,741,135
-------------- -------------- -------------- --------------
AAL Municipal Bond Fund AAL Bond Fund
---------------------------- -------------------------------
For the years ended 4/30/2003 4/30/2002 4/30/2003 4/30/2002
- --------------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $29,154,850 $27,155,109 $22,779,780 $24,955,775
Net realized gains on:
Investments 1,328,662 690,050 11,395,757 3,479,836
Change in net unrealized appreciation/
(depreciation) on:
Investments 16,557,031 10,876,811 16,823,088 (2,746,026)
Net Change in Net Assets Resulting -------------- -------------- -------------- --------------
From Operations 47,040,543 38,721,970 50,998,625 25,689,585
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income (29,154,858) (27,155,109) (24,313,592) (25,438,219)
From net realized gains -- -- -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders (29,154,858) (27,155,109) (24,313,592) (25,438,219)
-------------- -------------- -------------- --------------
Capital Stock Transactions 54,629,516 88,645,619 59,992,234 68,332,028
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets 72,515,201 100,212,480 86,677,267 68,583,394
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 614,872,570 514,660,090 482,236,998 413,653,604
-------------- -------------- -------------- --------------
Net Assets, End of Period $687,387,771 $614,872,570 $568,914,265 $482,236,998
-------------- -------------- -------------- --------------
AAL Equity Income Fund AAL Balanced Fund
------------------------------- -------------------------------
For the years ended 4/30/2003 4/30/2002 4/30/2003 4/30/2002
- ------------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $2,495,047 $3,479,253 $6,074,943 $6,926,598
Net realized losses on:
Investments (26,857,628) (7,457,863) (6,673,563) (4,999,412)
Futures contracts -- -- -- --
Change in net unrealized appreciation/
(depreciation) on:
Investments (40,008,522) (30,154,758) (16,067,320) (18,580,294)
Futures contracts -- -- -- --
Net Change in Net Assets Resulting -------------- -------------- -------------- --------------
From Operations (64,371,103) (34,133,368) (16,665,940) (16,653,108)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income (2,412,080) (2,980,717) (6,481,897) (7,195,249)
From net realized gains -- (1,085,383) -- --
Return of capital (224,768) -- -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders (2,636,848) (4,066,100) (6,481,897) (7,195,249)
-------------- -------------- -------------- --------------
Capital Stock Transactions (22,644,092) 24,538,950 79,470,705 39,327,860
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets (89,652,043) (13,660,518) 56,322,868 15,479,503
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 314,292,229 327,952,747 331,655,439 316,175,936
-------------- -------------- -------------- --------------
Net Assets, End of Period $224,640,186 $314,292,229 $387,978,307 $331,655,439
-------------- -------------- -------------- --------------
AAL Bond Index Fund AAL Money Market Fund
------------------------------- -------------------------------
For the years ended 4/30/2003 4/30/2002 4/30/2003 4/30/2002
- ---------------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $3,647,249 $2,253,496 $4,644,725 $10,964,605
Net realized gains on:
Investments 901,692 53,462 -- --
Change in net unrealized appreciation/
(depreciation) on:
Investments 3,066,160 (315,792) -- --
Net Change in Net Assets Resulting -------------- -------------- -------------- --------------
From Operations 7,615,101 1,991,166 4,644,725 10,964,605
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income (4,228,371) (2,487,481) (4,644,725) (10,964,605)
From net realized gains -- (315,020) -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders (4,228,371) (2,802,501) (4,644,725) (10,964,605)
-------------- -------------- -------------- --------------
Capital Stock Transactions 18,718,618 41,164,572 (76,467,270) 67,820,784
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets 22,105,348 40,353,237 (76,467,270) 67,820,784
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 58,913,050 18,559,813 520,330,413 452,509,629
-------------- -------------- -------------- --------------
Net Assets, End of Period $81,018,398 $58,913,050 $443,863,143 $520,330,413
-------------- -------------- -------------- --------------
AAL High Yield Bond Fund
------------------------------
For the years ended 4/30/2003 4/30/2002
- -------------------------------------------------------------------------------------
Operations
Net investment income $10,223,909 $10,824,584
Net realized losses on:
Investments (4,722,489) (17,696,580)
Futures contracts -- --
Change in net unrealized appreciation/
(depreciation) on:
Investments 5,907,65 6,372,126
Futures contracts -- --
Net Change in Net Assets Resulting -------------- --------------
From Operations 11,409,076 (499,870)
-------------- --------------
Distributions to Shareholders
From net investment income (10,350,092) (10,975,777)
From net realized gains -- --
Return of capital -- --
-------------- --------------
Total Distributions to Shareholders (10,350,092) (10,975,777)
-------------- --------------
Capital Stock Transactions (4,034,434) 8,141,689
-------------- --------------
Net Increase/(Decrease) in Net Assets (2,975,450) (3,333,958)
-------------- --------------
Net Assets, Beginning of Period 129,566,340 132,900,298
-------------- --------------
Net Assets, End of Period $126,590,890 $129,566,340
-------------- --------------
The accompanying notes to the financial statements are an integral part of this statement.
The AAL Mutual Funds
Notes to Financial Statements
As of April 30, 2003
(1) ORGANIZATION
The AAL Mutual Funds (the "Trust") was organized as a Massachusetts Business Trust on March 31, 1987, and is registered as an open-end diversified management investment company under the Investment Company Act of 1940. The Trust is divided into twenty series (the "Fund(s)"), each with its own investment objective and policies. The Trust currently consists of fourteen equity Funds, five fixed-income Funds and one money market Fund. The Trust commenced operations on July 16, 1987.
The Trust offers three classes of shares: Class A, Class B and Institutional Class. The three classes of shares differ principally in their respective shareholder servicing and distribution expenses and arrangements. Class A shares have a 0.25% annual 12b-1 fee (0.125% for The AAL Money Market Fund) and a front-end sales load of 5.50% for Equity Funds and 4.50% for Fixed Income Funds, excluding The AAL Money Market Fund. Class B shares are offered at net asset value and a 1.00% annual 12b-1 and service fee (0.875% for The AAL Money Market Fund). In addition, Class B shares have a contingent deferred sales charge of 5.00%. The contingent deferred sales charge declines by 1.00% per year through the fifth year. Class B shares convert to Class A shares at the end of the fifth year. Institutional Class shares are offered at net asset value and have no annual 12b-1 fees or service fees. All three classes of shares have identical rights to earnings, assets and voting privileges, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes.
The following Funds offer all three classes of shares: The AAL Technology Stock Fund, The AAL Aggressive Growth Fund, The AAL Small Cap Stock Fund, The AAL Small Cap Value Fund, The AAL Mid Cap Stock Fund, The AAL International Fund, The AAL Capital Growth Fund, The AAL Equity Income Fund, The AAL Balanced Fund, The AAL High Yield Bond Fund, The AAL Municipal Bond Fund, The AAL Bond Fund and The AAL Money Market Fund. The AAL Small Cap Index Fund II, The AAL Mid Cap Index Fund II and The AAL Large Company Index Fund II offer class A and B shares only. The AAL Mid Cap Index Fund, The AAL Large Company Index Fund and The AAL Bond Index Fund offer Institutional Class shares. The AAL U.S. Government Zero Coupon Target Fund Series 2006 of the Trust is printed under a separate annual report.
(2) SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments -- Securities traded on U.S. or foreign securities exchanges or included in a national market system are valued at the official closing price at the close of each business day. Over-the-counter securities and listed securities for which no price is readily available are valued at the current bid price considered best to represent the value in the circumstances, based on quotes that are obtained from an independent pricing service approved by the Board of Trustees. The pricing service, in determining values of fixed income securities, takes into consideration such factors as current quotations by broker/dealers, coupon, maturity, quality, type of issue, trading characteristics, and other yield and risk factors it deems relevant in determining valuations. Securities which cannot be valued by the approved pricing service are valued using valuations obtained from dealers that make markets in the securities. Exchange listed options and futures contracts are valued at the last quoted sales price. For all Funds other than the Money Market Fund, short-term securities with maturities of 60 days or less are valued at amortized cost. Short-term securities held by the Money Market Fund are valued on the basis of amortized cost (which approximates market value), whereby a portfolio security is valued at its cost initially, and thereafter valued to reflect a constant amortization to maturity of any discount or premium. The Money Market Fund follows procedures necessary to maintain a constant net asset value of $1.00 per share.
All other securities for which market values are not readily available are appraised at fair value as determined in good faith by or under the direction of the Board of Trustees. As of April 30, 2003, five securities in The AAL High Yield Bond Fund and one security in The AAL Municipal Bond Fund were valued at fair value, which represents 1.55% and 0.23%, respectively, of the Funds' net assets.
Foreign Currency Translation -- The accounting records of each Fund are maintained in U.S. dollars. Securities and other assets and liabilities that are denominated in foreign currencies are translated into U.S. dollars at the daily closing rate of exchange.
Foreign currency amounts related to the purchase or sale of securities and income and expenses are translated at the exchange rate on the transaction date. Net realized and unrealized currency gains and losses are recorded from sales of foreign currency, exchange gains or losses between the trade date and settlement dates on securities transactions, and other translation gains or losses on dividends, interest income and foreign withholding taxes. The Portfolios do not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized gain or loss from investments.
For federal income tax purposes, The Trust treats the effect of changes in foreign exchange rates arising from actual foreign currency transactions and the changes in foreign exchange rates between the trade date and settlement date as ordinary income.
Foreign Currency Contracts -- In connection with purchases and sales of securities denominated in foreign currencies, The AAL Aggressive Growth Fund and The AAL International Fund may enter into forward currency contracts. Additionally, The AAL Aggressive Growth Fund and AAL International Fund may enter into such contracts to hedge certain other foreign currency denominated investments. These contracts are recorded at market value, and the related realized and unrealized foreign exchange gains and losses are included in the Statement of Operations. In the event that counterparties fail to settle these forward contracts, The AAL Aggressive Growth Fund and The AAL International Fund could be exposed to foreign currency fluctuations. Foreign currency contracts are valued daily and unrealized appreciation or depreciation is recorded daily as the difference between the contract exchange rate and the closing forward rate applied to the face amount of the contract. A realized gain or loss is recorded at the time a forward contract is closed.
Foreign Denominated Investments -- Foreign denominated assets and currency contracts may involve more risks than domestic transactions, including currency risk, political and economic risk, regulatory risk, and market risk. Certain of the Funds may also invest in securities of companies located in emerging markets. Future economic or political developments could adversely affect the liquidity or value, or both, of such securities.
Federal Income Taxes -- No provision has been made for income taxes because the Funds' policy is to qualify as a regulated investment company under the Internal Revenue Code and distribute substantially all taxable income on a timely basis. It is also the intention of the Funds to distribute an amount sufficient to avoid imposition of any federal excise tax. The Funds, accordingly, anticipate paying no Federal income taxes and no Federal income tax provision was required. Each Fund is treated as a separate taxable entity for federal income tax purposes. Certain Funds may utilize earnings and profits distributed to shareholders on the redemption of shares as part of the dividend paid deduction.
Income and Expenses -- Estimated expenses are accrued daily. The Funds are charged for those expenses that are directly attributable to it. Expenses that are not directly attributable to a Fund are allocated among all appropriate Funds in proportion to their respective net assets, number of shareholder accounts or other reasonable basis. Net investment income, nonclass-specific expenses and realized and unrealized gains and losses are allocated directly to each class based upon the relative net asset value of outstanding shares, or the value of dividend eligible shares, as appropriate for each class of shares.
Interest income is accrued daily and is determined on the basis of interest or discount earned on any short-term investments and interest earned on all other debt securities, including accretion of market discount, accretion of original issue discount and amortization of premium. Dividend income is recorded on the ex-dividend date. For preferred stock payment-in-kind securities, income is recorded on the ex-dividend date in the amount of the value received.
Fees Paid Indirectly -- The Funds have a deposit arrangement with the custodian whereby interest earned on uninvested cash balances is used to pay a portion of custodian fees. This deposit arrangement is an alternative to overnight investments.
Organization Costs -- Costs incurred prior to June 30, 1998, in connection with the start up and initial registration of the Funds are capitalized and amortized over a period of 60 months from the date of commencement. If any initial shares are redeemed during the amortization period, the redemption proceeds will be reduced by a pro-rata portion of the unamortized balance at the time of redemption, in the same proportion that the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of redemption. The cost incurred with the organization and initial registration of shares for The AAL Balanced Fund were amortized over 60 months from the Fund's commencement of operation.
Distributions to Shareholders -- Dividends from net investment income, if available, are declared and paid to each shareholder as a dividend. Dividend and capital gain distributions are recorded on the ex-dividend date. Net realized gains from securities transactions, if any, are distributed at least annually for all Funds.
Dividends from The AAL Capital Growth Fund are declared and paid semi-annually. Dividends from the following funds are declared and paid annually: The AAL Technology Stock,The AAL Aggressive Growth Fund, The AAL Small Cap Stock Fund, The AAL Small Cap Index Fund II, The AAL Small Cap Value Fund, The AAL Mid Cap Stock Fund, The AAL Mid Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL International Fund, The AAL Large Company Index Fund and The AAL Large Company Index Fund II. Dividends from The AAL Equity Income Fund and The AAL Balanced Fund are declared and paid quarterly. Dividends from The AAL High Yield Bond Fund, The AAL Municipal Bond Fund, The AAL Bond Fund, The AAL Bond Index Fund and The AAL Money Market Fund are declared daily and distributed monthly.
Options -- All Funds except The AAL Money Market Fund may buy put and call options and write covered call options. The Funds intend to use such derivative instruments as hedges to facilitate buying or selling securities or to provide protection against adverse movements in security prices or interest rates. The AAL International Fund and The AAL Aggressive Growth Fund may also enter into options contracts to protect against adverse foreign exchange rate fluctuation.
Option contracts are valued daily and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon expiration or closing of the option transaction. When an option is exercised, the proceeds on sale for a written call option or the cost of a security for purchased put and call options is adjusted by the amount of premium received or paid.
Financial Futures Contracts -- Certain Funds may use futures contracts to manage the exposure to interest rate fluctuations. Gains or losses on futures contracts can offset changes in the yield of securities. When a futures contract is opened, cash or other investments equal to the required "initial margin deposit" are pledged to the broker. Additional securities held by the Funds may be earmarked as collateral for open futures contracts. The futures contract's daily change in value ("variation margin") is either paid to or received from the broker, and is recorded as an unrealized gain or loss. When the contract is closed, the realized gain or loss is recorded equal to the difference between the value of the contract when opened and the value of the contract when closed. During the year ended April 30, 2003, The AAL Mid Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL Large Company Index Fund and The AAL Large Company Index Fund II engaged in this type of investment.
The Impact of Initial Public Offerings on Performance -- The AAL Technology Stock Fund, The AAL Aggressive Growth Fund, The AAL Small Cap Stock Fund, The AAL Small Cap Value Fund, The AAL Mid Cap Stock Fund, The AAL International Fund, The AAL Capital Growth Fund, The AAL Equity Income Fund and The AAL Balanced Fund may invest in an initial public offering ("IPO") of a security. On occasion the Fund will participate in an oversubscribed IPO. Because the IPO is oversubscribed, this presents the Fund with the opportunity to "flip" or trade the security at higher prices resulting in a profit for the Fund. However, participation in an IPO may result in a loss for the Fund. Investments in IPO's may have a magnified performance impact on a Fund with a small asset base such as The AAL Technology Stock Fund, The AAL Aggressive Growth Fund and The AAL Small Cap Value Fund. A Fund may not experience similar performance as its assets grow.
Dollar Roll Transactions -- Certain of the Funds enter into dollar roll transactions, with respect to mortgage securities issued by GNMA, FNMA and FHLMC, in which the Funds sell mortgage securities and simultaneously agree to repurchase similar (same type, coupon and maturity) securities at a later date at an agreed upon price. During the period between the sale and repurchase, the Funds forgo principal and interest paid on the mortgage securities sold. The Funds are compensated by the interest earned on the cash proceeds of the initial sale and from negotiated fees paid by brokers offered as an inducement to the Funds to "roll over" their purchase commitments. The AAL Balanced Fund, The AAL Bond Fund and The AAL Bond Index Fund earned $435,332, $1,730,156 and $29,266, respectively, from such fees for the year ended April 30, 2003.
When-Issued and Delayed Delivery Transactions -- The Funds may engage in when-issued or delayed delivery transactions. To the extent that a Fund engages in such transactions, it will do so for the purpose of acquiring securities consistent with its investment objectives and policies and not for the purpose of investment leverage or to speculate on interest rate changes. On the trade date, assets of the Fund are earmarked on the Fund's records in a dollar amount sufficient to make payment for the securities to be purchased. Income is not accrued until settlement date.
Credit Risk -- The Funds may be susceptible to credit risk to the extent the issuer defaults on its payment obligation. The Funds' policy is to monitor the creditworthiness of the issuer. Interest accruals on defaulted securities are monitored for ability to collect payment in default and adjusted accordingly.
Accounting Estimates -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
Other -- For financial statement purposes, investment security transactions are accounted for on the trade date. Realized gains and losses from investment transactions are determined on a specific cost identification basis, which is the same basis used for federal income tax purposes.
(3) FEES AND COMPENSATION PAID TO AFFILIATES
Investment Advisory Fees -- The Trust has entered into an Investment Advisory Agreement with Thrivent Investment Management Inc. (Thrivent Investment Mgt.), ("the Adviser"). Thrivent Financial for Lutherans (Thrivent Financial) is the parent company for Thrivent Investment Mgt. Under the Advisory Agreement, each of the Funds pay a fee for investment advisory services. The fees are accrued daily and paid monthly. The annual rates of fees as a percent of average daily net assets under the investment advisory agreement were as follows:
(M - Millions) $0 to $50 to $100 to $200 to $500 to $1000 to Over
Fund $50M $100M $200M $500M $1000 $5000M $5,000M
- ------------------------------------------------------------------------------------------------------
The AAL Technology Stock Fund 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
The AAL Aggressive Growth Fund 0.80% 0.80% 0.75% 0.75% 0.70% 0.70% 0.70%
The AAL Small Cap Stock Fund 0.70% 0.70% 0.70% 0.65% 0.65% 0.65% 0.65%
The AAL Small Cap Index Fund II 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
The AAL Small Cap Value Fund 0.70% 0.70% 0.70% 0.70% 0.70% 0.70% 0.70%
The AAL Mid Cap Stock Fund 0.70% 0.70% 0.70% 0.65% 0.65% 0.60% 0.60%
The AAL Mid Cap Index Fund 0.25% 0.20% 0.20% 0.20% 0.20% 0.20% 0.20%
The AAL Mid Cap Index Fund II 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
The AAL International Fund 0.65% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60%
The AAL Capital Growth Fund 0.65% 0.65% 0.65% 0.65% 0.575% 0.50% 0.45%
The AAL Large Company Index Fund 0.25% 0.175% 0.175% 0.175% 0.175% 0.175% 0.175%
The AAL Large Company Index Fund II 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
The AAL Equity Income Fund 0.45% 0.45% 0.45% 0.45% 0.45% 0.45% 0.45%
The AAL Balanced Fund 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55%
The AAL High Yield Bond Fund 0.55% 0.55% 0.55% 0.55% 0.55% 0.55% 0.55%
The AAL Municipal Bond Fund 0.45% 0.45% 0.45% 0.45% 0.45% 0.45% 0.45%
The AAL Bond Fund 0.45% 0.45% 0.45% 0.45% 0.45% 0.45% 0.45%
The AAL Bond Index Fund 0.25% 0.175% 0.175% 0.175% 0.175% 0.175% 0.175%
The AAL Money Market Fund 0.50% 0.50% 0.50% 0.50% 0.45% 0.45% 0.45%
Effective September 18, 2002, the Adviser terminated the subadvisory agreement for The AAL Aggressive Growth Fund with Janus Capital Corporation. On September 19, 2002, the Adviser assumed the daily investment management of the Fund. Prior to September 19, 2002, the Adviser paid Janus Capital Corporation an annual subadvisory fee for the performance of subadvisory services for The AAL Aggressive Growth Fund. The subadvisory fee, which was paid by the Adviser from its advisory fee, was equal to an annual fee of 0.55% on the first $100 million of average daily net assets, 0.50% on the next $400 million of average daily net assets, and 0.45% on average daily net assets over $500 million.
The Adviser pays Oechsle International Advisors, LLC an annual subadvisory fee for performance of subadvisory services for The AAL International Fund. The subadvisory fee, which is paid by the Adviser from its advisory fee, is equal to an annual fee of 0.40% on the first $50 million of average daily net assets and 0.35% on average daily net assets over $50 million.
The Adviser pays Pacific Investment Management Company (PIMCO) an annual subadvisory fee for performance of subadvisory services for The AAL High Yield Bond Fund. The subadvisory fee is 0.25% of average daily net assets, payable from the annual fee paid to the Adviser.
For the period from May 1, 2002, though December 31, 2002, the Adviser had voluntarily reimbursed 0.075% of the average daily net assets of The AAL Money Market Fund's expenses. In addition, the Adviser had voluntarily reimbursed expenses of The AAL High Yield Bond Fund above 1% and 1.75% of the average daily net assets for Class A and Class B shares, respectively, and expenses above 0.20% of the average daily net assets for The AAL Mid Cap Index Fund, The AAL Large Company Index Fund and The AAL Bond Index Fund.
Beginning January 1, 2003, the following voluntary expense reimbursements went into effect: The AAL Technology Stock Fund, 1.00% and 1.75% of the average daily net assets of Class A and Class B shares, respectively, The AAL Small Cap Index Fund II, 0.15% and 0.20% of the average daily net assets of Class A and Class B shares, respectively, The AAL Small Cap Value Fund, 0.50% of the average daily net assets of Class A, Class B and Institutional Class shares; The AAL Mid Cap Index Fund II, 0.50% of the average daily net assets of Class B shares; The AAL Large Company Index Fund II, 0.75% of the average daily net assets of Class A and Class B shares, and The AAL Money Market Fund, 0.10% and 0.15% of the average daily net assets of Class A and Class B shares, respectively. Effective January 10, 2003, the voluntary expense reimbursement for The AAL Money Market Fund Class B shares was increased to 0.40% of the average daily net assets. The reimbursements for The AAL Technology Stock Fund are voluntary and can be terminated at any time. The reimbursements for all other Funds in the Trust are effective through December 31, 2003, persuant to a contract.
The AAL Technology Stock Fund, The AAL Aggressive Growth Fund, The AAL Small Cap Stock Fund, The AAL Small Cap Index Fund II, The AAL Small Cap Value Fund, The AAL Mid Cap Stock Fund, The AAL Mid Cap Index Fund, The AAL Mid Cap Index II Fund, The AAL Capital Growth Fund, The AAL Large Company Index Fund, The AAL Large Company Index Fund II, The AAL Equity Income Fund, The AAL Balanced Fund, The AAL Municipal Bond Fund, The AAL Bond Index Fund and The AAL Bond Fund may invest cash in The AAL Money Market Fund, subject to certain limitations. These related-party transactions are subject to the same terms as non-related party transactions except that, to avoid duplicate investment advisory fees, the Funds are reimbursed for the amount of investment advisory fees paid to the Adviser through The AAL Money Market Fund.
Distribution and Shareholder Servicing Plans - Thrivent Investment Mgt. is also the Trust's distributor. Prior to July 1, 2002, AAL Capital Management Company acted as the Trust's distributor. AAL Capital Management has since changed its name to Thrivent Investment Mgt. The Trust has adopted a Distribution Plan ("the Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The fees collected under the 12b-1 Plan are used by Thrivent Investment Mgt. to finance activities primarily intended to result in the sale of Class B shares of the Fund.
On the Class A shares, a service fee of 0.25% of average net assets is charged for The AAL Technology Stock Fund, The AAL Aggressive Growth Fund, The AAL Small Cap Stock Fund, The AAL Mid Cap Stock Fund, The AAL International Fund, The AAL Capital Growth Fund, The AAL Equity Income Fund, The AAL Balanced Fund, The AAL Small Cap Index Fund II, The AAL Small Cap Value Fund, The AAL Mid Cap Index Fund II, The AAL Large Company Index Fund II, The AAL High Yield Bond Fund, The AAL Municipal Bond Fund and The AAL Bond Fund, with The AAL Money Market Fund charged 0.125% of average net assets as a service fee.
On the Class B Shares, a service fee of 0.25% of average net assets and a 12b-1 distribution fee of 0.75% of average net assets is charged for The AAL Technology Stock Fund, The AAL Aggressive Growth Fund, The AAL Small Cap Stock Fund, The AAL Mid Cap Stock Fund, The AAL International Fund, The AAL Capital Growth Fund, The AAL Equity Income Fund, The AAL Balanced Fund, The AAL Small Cap Index Fund II, The AAL Small Cap Value Fund, The AAL Mid Cap Index Fund II, The AAL Large Company Index Fund II, The AAL High Yield Bond Fund, The AAL Municipal Bond Fund and The AAL Bond Fund, with The AAL Money Market Fund charged 0.125% and 0.75% of average net assets as service fees and 12b-1 distribution fees, respectively. There are no 12b-1 distribution or service fees on Class I shares.
The Trust has also contracted with the Adviser for certain shareholder maintenance services. These shareholder services include: pre-processing and quality control of new accounts, shareholder correspondence, account response and answering customer inquires regarding account status, and facilitating shareholder telephone transactions. Fees and cost reimbursements charged to the Funds under terms of the contract approximated $3.60 per year per shareholder account.
Sales Charges and Other Fees -- For the year ended April 30, 2003, Thrivent Investment Mgt. received $14,082,659 of aggregate underwriting concessions from the sales of the Trust's Class A and B shares and aggregate contingent deferred sales charges of $319,893 from redemptions of Class A and Class B shares. Sales charges are not an expense of the Trust and are not reflected in the financial statement of any of the Funds.
The Trust has entered into an Administrative Services Agreement with Thrivent Financial pursuant to which Thrivent Financial provides certain administrative personnel and services. For the year ended April 30, 2003, Thrivent Financial received aggregate fees for administrative personnel and services of $878,500 from The AAL Mutual Funds.
Each Trustee of the Funds who is not affiliated with Thrivent Financial or the Adviser receives an annual fee from the Funds for services as a Trustee and is eligible to participate in a deferred compensation plan with respect to these fees. Participants in the plan may designate their deferred Trustee's fees as if invested in any one of the Funds. The value of each Trustee's deferred compensation account will increase or decrease as if it were invested in shares of the selected Funds.
Those Trustees not participating in the above plan received $41,393 in fees from the Trust for the year ended April 30, 2003. No remuneration has been paid by the Trust to any of the officers or affiliated Trustees of the Trust. In addition, the Trust reimbursed unaffiliated Trustees for reasonable expenses incurred in relation to attendance at the meetings.
The Adviser has directed certain of the Funds' portfolio trades to brokers at best price and execution and has generated directed brokerage credits to be used against custodian fees. Shareholders benefit under this arrangement to the extent that custodian fees and other expenses are not voluntarily reimbursed by the Adviser. For the year ended April 30, 2003, directed brokerage credits totaling $32,278 were used to reduce certain Funds' expenses. In accordance with Securities and Exchange Commission requirements, such amounts are required to be shown as an expense and have been included in custodian fees in the Statement of Operations, with the credit reflected as a reimbursement.
(4) TAX INFORMATION
Distributions are based on amounts calculated in accordance with the applicable federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassifications.
On the Statement of Assets and Liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were made as follows [Increase (Decrease)]:
Accumulated Accumulated
Net Investment Net Realized
Fund Income/(Loss) Gain/(Loss) Trust Capital
- ------------------------------------------------------------------------
AAL Technology Stock $661,556 $-- $(661,556)
AAL Aggressive Growth 661,136 55,592 (716,728)
AAL Small Cap Stock 2,608,976 -- (2,608,976)
AAL Small Cap Index II 111,823 2,683 (114,506)
AAL Small Cap Value 258,172 763 (258,935)
AAL Mid Cap Stock 1,463,042 118,730 (1,581,772)
AAL Mid Cap Index (2,732) 2,732 --
AAL Mid Cap Index II 30,315 (27,203) (3,112)
AAL International (23,209) 23,209 --
AAL Capital Growth -- 198 (198)
AAL Large Company Index (3,880) 3,880 --
AAL Large Company Index II (2,093) 2,093 --
AAL Equity Income (266,179) 266,484 (305)
AAL Balanced 410,779 (395,982) (14,797)
AAL High Yield Bond 398,722 (398,722) --
AAL Municipal Bond -- (308) 308
AAL Bond 1,533,812 (1,533,812) --
AAL Bond Index 581,114 (581,114) --
At April 30, 2003, the components of distributable earnings on a tax basis were as follows:
Undistributed Undistributed
Ordinary Long-Term
Fund Income Capital Gain
- ------------------------------------------------------
AAL Mid Cap Index $60,222 $18,290
AAL International 220,679 --
AAL Capital Growth 2,242,459 --
AAL Large Company Index 284,240 --
AAL Large Company Index II 120,671 --
AAL Balanced 600,551 --
AAL High Yield Bond 332,254 --
AAL Bond 111,310 --
AAL Bond Index 21,056 191,805
AAL Money Market 50,781 --
At April 30, 2003, the following Funds had accumulated net realized capital loss carryovers expiring as follows:
Capital Loss Expiration
Fund Carryover Year
- ---------------------------------------------------------------
AAL Technology Stock $570,441 2009
13,587,499 2010
13,695,973 2011
----------------
$27,853,913
================
AAL Aggressive Growth $109,811 2009
17,413,042 2010
21,019,713 2011
----------------
$38,542,566
================
AAL Small Cap Stock $1,183,525 2010
10,352,607 2011
----------------
$11,536,132
================
AAL Small Cap Index II $105,854 2011
================
AAL Small Cap Value $1,463,563 2011
================
AAL Mid Cap Stock $39,148,652 2010
90,430,051 2011
----------------
$129,578,703
================
AAL International $26,873,863 2010
46,508,608 2011
----------------
$73,382,471
================
AAL Capital Growth $2,515,491 2010
================
AAL Large Company Index $45,813 2009
105,571 2010
3,211,202 2011
----------------
$3,362,586
================
AAL Large Company Index II $90,757 2010
892,348 2011
----------------
$983,105
================
AAL Equity Income $916,607 2010
19,454,562 2011
----------------
$20,371,169
================
AAL Balanced $2,358,701 2008
806,026 2009
10,554,008 2011
----------------
$13,718,735
================
AAL High Yield Bond $1,271,115 2007
3,377,296 2008
38,661,693 2009
14,003,544 2010
12,668,032 2011
----------------
$69,981,680
================
AAL Municipal Bond $10,097,368 2008
328,490 2010
----------------
$10,425,858
================
AAL Bond $7,052,146 2008
1,521,197 2009
----------------
$8,573,343
================
To the extent that these Funds realize future net capital gains, taxable distributions will be reduced by any unused capital loss carryovers.
The following Funds deferred, on a tax basis, the following post-October 2002 losses:
Fund Post-October Loss
- ------------------------------------------------
AAL Technology Stock $1,598,913
AAL Aggressive Growth 1,076,934
AAL Small Cap Stock 17,307,321
AAL Small Cap Value 2,532,421
AAL Mid Cap Stock 14,763,201
AAL Mid Cap Index 98,207
AAL Mid Cap Index II 265,939
AAL International 7,046,701
AAL Large Company Index 886,610
AAL Large Company Index II 931,696
AAL Equity Income 12,944,833
AAL Balanced 3,144,812
AAL High Yield Bond 2,077,813
These amounts are deferred for tax purposes and deemed to occur in the next fiscal year.
The tax character of distributions paid during the years ended April 30, 2003 and 2002 was as follows:
Tax-Exempt Income Ordinary Income Long-Term Capital Gain
Fund 2003 2002 2003 2002 2003 2002
- ---------------------------------------------------------------------------------------------------
AAL Small Cap Stock $-- $-- $-- $-- $-- $1,747,341
AAL Small Cap Index II -- -- -- 95,025 135,306 --
AAL Small Cap Value -- -- 206,590 -- 173 --
AAL Mid Cap Stock -- -- -- 3,095,421 -- 21,270,076
AAL Mid Cap Index -- -- 295,250 260,226 452,010 131,676
AAL Mid Cap Index II -- -- -- -- 330,723 86,931
AAL International -- -- 615,956 2,212,010 -- --
AAL Capital Growth -- -- 8,525,456 10,260,964 -- 10,154,296
AAL Large Company Index -- -- 823,832 438,942 -- --
AAL Large Company Index II -- -- 122,309 -- -- --
AAL Equity Income -- -- 2,636,848* 3,019,611 -- 1,046,489
AAL Balanced -- -- 6,481,897 7,195,249 -- --
AAL High Yield Bond -- -- 10,350,092 10,975,777 -- --
AAL Municipal Bond 28,802,230 26,799,377 352,628 355,732 -- --
AAL Bond -- -- 24,313,592 25,438,219 -- --
AAL Bond Index -- -- 4,228,371 2,667,903 -- 134,598
AAL Money Market -- -- 4,644,725 10,964,605 -- --
* For the year ended April 30, 2003, The AAL Equity Income Fund had a return of capital of $224,768.
At April 30, 2003, the gross unrealized appreciation and depreciation of investments, based on cost for federal income tax purposes, were as follows:
Net Unrealized
Federal Unrealized Unrealized Appreciation
Fund Tax Cost Appreciation Depreciation (Depreciation)
- --------------------------------------------------------------------------------------------------
AAL Technology Stock $51,872,410 $1,427,906 $(18,880,436) $(17,452,530)
AAL Aggressive Growth 35,431,475 3,121,308 (2,073,284) 1,048,024
AAL Small Cap Stock 288,923,597 30,650,231 (29,941,091) 709,140
AAL Small Cap Index II 25,070,308 2,957,140 (5,286,231) (2,329,091)
AAL Small Cap Value 33,579,129 3,572,385 (2,635,016) 937,369
AAL Mid Cap Stock 722,717,320 57,107,019 (93,603,159) (36,496,140)
AAL Mid Cap Index 23,702,008 2,338,830 (5,356,022) (3,017,192)
AAL Mid Cap Index II 36,441,156 3,197,899 (7,665,843) (4,467,944)
AAL International 155,243,896 4,667,969 (25,202,227) (20,534,258)
AAL Capital Growth 2,110,712,336 994,308,931 (355,053,765) 639,255,166
AAL Large Company Index 75,389,084 2,475,111 (16,059,215) (13,584,104)
AAL Large Company Index II 40,992,595 1,257,275 (11,257,308) (10,000,033)
AAL Equity Income 234,687,881 11,642,920 (23,299,881) (11,656,961)
AAL Balanced 430,042,870 19,021,169 (30,724,920) (11,703,751)
AAL High Yield Bond 120,534,001 8,972,050 (4,653,255) 4,318,795
AAL Municipal Bond 628,947,354 50,892,941 (2,366,428) 48,526,513
AAL Bond 661,941,912 20,064,292 (1,628,890) 18,435,402
AAL Bond Index 84,740,915 3,322,759 (312,297) 3,010,462
AAL Money Market 449,189,364 -- -- --
The difference between the book and tax cost basis is attributable to the disallowed losses on wash sales and other temporary timing differences.
Shareholder Notification of Federal Tax Status (unaudited)
The AAL Small Cap Value Fund, The AAL Mid Cap Index Fund, The AAL Capital Growth Fund, The AAL Large Company Index Fund, The AAL Large Company Index Fund II, The AAL Equity Income Fund and The AAL Balanced Fund designate 37.80%, 78.87%, 100%, 100%, 100%, 100% and 41.09%, respectively, of the dividends declared from net investment income as dividends qualifying for the 70% corporate dividends received deduction.
The AAL Equity Income Fund and The AAL Balanced Fund designate 100% and 47%, respectively, of dividends declared after December 31, 2002 from net investment income as qualified dividend income under the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The AAL Municipal Bond Fund designates 98.79% of the dividends declared from net investment income as exempt from federal income tax for the year ended April 30, 2003.
During the fiscal year ended April 30, 2003, the AAL International Fund generated $3,199,586 of foreign source income and paid $387,333 of foreign taxes. The Fund elects to pass foreign taxes through to the Fund's shareholders for their 2003 tax returns. Updated data will be sent with the 2003 Form 1099 to enable shareholders to have information to claim either a foreign tax credit or to take a foreign tax deduction on their 2003 income tax returns.
The Funds designate the following amounts as distributions of long-term capital gains: The AAL Small Cap Index Fund II, $135,306; The AAL Small Cap Value Fund, $173; The AAL Mid Cap Index Fund, $452,010; The AAL Mid Cap Index Fund II, $341,883. These amounts may include earnings and profits distributed to shareholders on the redemption of shares as part of the dividend paid deduction.
(5) DISTRIBUTIONS BY CLASS
Distributions to shareholders, by class, for the years ended April 30, 2002, and 2003, are as follows:
Net Investment Income
------------------------------------------------------------------------------------
2002 2003
--------------------------------------- -----------------------------------------
Institutional Institutional
Fund Class A Class B Class Class A Class B Class
- ------------------------------------ ---------- ---------- ------------- ---------- ---------- -------------
The AAL International Fund $2,122,269 $14,252 $75,489 $578,875 $-- $37,081
The AAL Capital Growth Fund 9,759,905 -- 501,168 8,119,482 -- 405,974
The AAL Large Company Index Fund II -- -- -- 122,309 -- --
The AAL Equity Income Fund* 2,839,877 9,608 131,232 2,535,494 5,043 96,311
The AAL Balanced Fund 6,799,728 299,747 95,774 5,111,830 221,480 1,148,587
The AAL High Yield Bond Fund 10,036,986 721,291 217,500 9,575,283 511,785 263,024
The AAL Municipal Bond Fund 26,573,057 393,108 188,944 28,498,469 433,744 222,645
The AAL Bond Fund 22,849,112 285,306 2,303,801 22,638,728 379,801 1,295,063
The AAL Money Market Fund 9,663,557 48,701 1,252,347 3,391,021 12,976 1,240,728
Net Realized Gains
------------------------------------------------------------------------------------
2002 2003
--------------------------------------- -----------------------------------------
Institutional Institutional
Fund Class A Class B Class Class A Class B Class
- ------------------------------------ ---------- ---------- ------------- ---------- ---------- -------------
The AAL Small Cap Stock Fund $1,536,149 $190,002 $21,190 $-- $-- $--
The AAL Small Cap Index Fund II 85,708 9,317 -- 123,156 12,150 --
The AAL Small Cap Value Fund -- -- -- 168,998 16,195 21,570
The AAL Mid Cap Stock Fund 22,735,290 999,944 630,263 -- -- --
The AAL Mid Cap Index Fund II 79,360 7,571 -- 302,359 28,364 --
The AAL Capital Growth Fund 9,531,232 393,007 229,948 -- -- --
The AAL Equity Income Fund 1,008,919 44,655 31,809 -- -- --
* For the year ended April 30, 2003, distributions from net investment income for The AAL Equity Income Fund had a return of capital of $218,119 for Class A shares and $6,649 for Institutional Class shares. No Funds had returns of capital for the year ended April 30, 2002.
(6) SECURITY TRANSACTIONS
Purchases and Sales of Investment Securities -- For the year ended April 30, 2003, the cost of purchases and the proceeds from sales of investment securities other than U.S. Government and short-term securities were as follows:
In thousands
----------------------
Portfolio Purchases Sales
- ------------------------------------------------------
The AAL Technology Stock Fund $22,223 $21,973
The AAL Aggressive Growth Fund 75,734 73,901
The AAL Small Cap Stock Fund 293,719 295,770
The AAL Small Cap Index Fund II 8,407 3,757
The AAL Small Cap Value Fund 54,149 42,698
The AAL Mid Cap Stock Fund 346,500 381,426
The AAL Mid Cap Index Fund 4,927 4,523
The AAL Mid Cap Index Fund II 10,716 4,727
The AAL International Fund 76,629 77,132
The AAL Capital Growth Fund 147,407 343,658
In thousands
----------------------
Portfolio Purchases Sales
- ------------------------------------------------------
The AAL Large Company Index Fund $19,223 $12,864
The AAL Large Company Index Fund II 7,548 4,992
The AAL Equity Income Fund 152,108 171,468
The AAL Balanced Fund 235,592 137,301
The AAL High Yield Bond Fund 115,430 124,953
The AAL Municipal Bond Fund -- 16,635
The AAL Bond Fund 397,742 388,554
The AAL Bond Index Fund 17,801 27,304
Purchases and sales of U.S. Government securities were:
In thousands
----------------------
Fund Purchases Sales
- ------------------------------------------------------
The AAL Balanced Fund $76,303 $82,730
The AAL Municipal Bond Fund 145,294 51,889
The AAL Bond Fund 364,788 399,483
The AAL Bond Index Fund 59,995 40,583
(7) INVESTMENTS IN AFFILIATES
Affiliated issuers, as defined under the Investment Company Act of 1940, include those in which the Fund's holdings of an issuer represent 5% or more of the outstanding voting securities of an issuer, or any affiliated mutual fund. A summary of transactions for the year ended April 30, 2003, in The AAL Money Market Fund is as follows:
Gross Gross Balance of Shares Dividend Income
Purchases and Sales and Held April 30, Value May 1, 2002 --
Additions Reductions 2003 April 30, 2003 April 30, 2003
- ---------------------------------------------------------------------------------------------------------------------------------
The AAL Technology Stock Fund $11,063,862 $11,345,861 1,556,789 $1,556,789 $15,571
The AAL Aggressive Growth Fund 11,936,969 10,901,883 1,114,789 1,114,789 4,744
The AAL Small Cap Stock Fund 108,071,313 121,202,940 1,888,739 1,888,739 118,938
The AAL Small Cap Index Fund II 4,926,483 5,199,040 61,918 61,918 2,280
The AAL Small Cap Value Fund 13,529,059 13,413,743 1,366,875 1,366,875 14,096
The AAL Mid Cap Stock Fund 94,679,366 97,472,604 12,408,933 12,408,933 145,861
The AAL Mid Cap Index Fund 5,434,957 4,953,531 531,385 531,385 2,331
The AAL Mid Cap Index Fund II 7,895,474 7,609,490 535,981 535,981 4,420
The AAL Capital Growth Fund 164,825,602 169,692,452 8,540,461 8,540,461 123,735
The AAL Large Company Index Fund 9,348,990 6,831,428 2,712,718 2,712,718 6,030
The AAL Large Company Index Fund II 8,712,402 7,811,175 1,170,521 1,170,521 5,567
The AAL Equity Income Fund 60,305,127 69,009,491 4,218,960 4,218,960 98,436
The AAL Balanced Fund 56,796,363 58,582,756 12,595,152 12,595,152 141,314
The AAL Bond Fund 87,402,256 92,046,390 10,439,311 10,439,311 150,517
The AAL Bond Index Fund 33,687,822 30,135,492 3,918,970 3,918,970 29,501
(8) FORWARD CURRENCY CONTRACTS
As of April 30, 2003, The AAL International Fund had entered into forward foreign currency contracts, as summarized below, resulting in net unrealized depreciation of $11,150:
Unrealized
Expiration Contract Market Value Appreciation/
Currency Purchased Date Quantity Amount At End of Period (Depreciation)
- ---------------------------------------------------------------------------------------------------------
British Pound (GBP) 5/1/2003 26,045 $41,442 $41,625 $183
euro (EUR) 5/5/2003 218,591 244,232 243,963 (269)
Hong Kong Dollar (HKD) 5/5/2003 480,741 61,643 61,641 (2)
British Pound (GBP) 5/6/2003 67,779 108,542 108,326 (216)
--------
$(304)
Unrealized
Expiration Contract Market Value Appreciation/
Currency Sold Date Quantity Amount At End of Period (Depreciation)
- ---------------------------------------------------------------------------------------------------------
Swedish krona (SEK) 5/5/2003 6,783,418 $818,463 $829,309 $(10,846)
--------
TOTAL $(11,150)
========
(9) SHARES OF BENEFICIAL INTEREST
The Master Trust Agreement permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest of all of the Funds. Transactions in Fund shares were as follows:
The AAL Technology Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 5,622,191 $22,320,455 371,811 $1,437,440 1,577,812 $6,307,116
Redeemed (1,067,454) (4,180,924) (43,463) (161,409) (914,431) (3,589,264)
------------ ------------ ------------ ------------ ------------ ------------
Net change 4,554,737 $18,139,531 328,348 $1,276,031 663,381 $2,717,852
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 4,378,722 $10,489,136 322,042 $750,091 1,021,683 $2,634,557
Redeemed (2,641,039) (6,232,216) (93,926) (214,226) (2,620,400) (7,068,273)
------------ ------------ ------------ ------------ ------------ ------------
Net change 1,737,683 $4,256,920 228,116 $535,865 (1,598,717) $(4,433,716)
============ ============ ============ ============ ============ ============
The AAL Aggressive Growth Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 3,295,989 $17,732,103 337,025 $1,750,589 517,866 $2,838,545
Redeemed (853,886) (4,429,385) (28,575) (144,089) (282,978) (1,529,980)
------------ ------------ ------------ ------------ ------------ ------------
Net change 2,442,103 $13,302,718 308,450 $1,606,500 234,888 $1,308,565
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 2,009,788 $7,533,552 225,924 $815,411 363,729 $1,469,145
Redeemed (1,650,657) (5,998,338) (80,046) (285,286) (1,081,450) (4,284,327)
------------ ------------ ------------ ------------ ------------ ------------
Net change 359,131 $1,535,214 145,878 $530,125 (717,721) $(2,815,182)
============ ============ ============ ============ ============ ============
The AAL Small Cap Stock Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 5,374,004 $74,856,174 427,818 $5,687,768 139,975 $2,004,551
Dividends and distributions
reinvested 108,035 1,527,539 13,885 188,294 1,298 18,812
Redeemed (1,552,015) (21,229,465) (464,258) (6,348,621) (71,943) (1,008,055)
------------ ------------ ------------ ------------ ------------ ------------
Net change 3,930,024 $55,154,248 (22,555) $(472,559) 69,330 $1,015,308
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 3,978,322 $47,496,197 344,965 $3,866,489 413,374 $5,035,811
Redeemed (4,121,616) (46,901,963) (805,925) (8,837,854) (194,264) (2,236,645)
------------ ------------ ------------ ------------ ------------ ------------
Net change (143,294) $594,234 (460,960) $(4,971,365) 219,110 $2,799,166
============ ============ ============ ============ ============ ============
The AAL Small Cap Index Fund II
-----------------------------------------------------------
Class A Class B
--------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------
Sold 638,052 $6,544,453 42,323 $432,365
Dividends and distributions
reinvested 8,115 85,128 896 9,317
Redeemed (79,933) (803,808) (6,054) (61,949)
------------ ------------ ------------ ------------
Net change 566,234 $5,825,773 37,165 $379,733
============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 682,065 $6,246,710 86,130 $762,168
Dividends and distributions
reinvested 11,890 122,343 1,199 12,149
Redeemed (281,412) (2,448,619) (11,373) (95,183)
------------ ------------ ------------ ------------
Net change 412,543 $3,920,434 75,956 $679,134
============ ============ ============ ============
The AAL Small Cap Value Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 1,947,805 $20,379,893 204,815 $2,098,262 300,000 $3,000,000
Redeemed (36,444) (384,907) (7,091) (67,324) -- --
------------ ------------ ------------ ------------ ------------ ------------
Net change 1,911,361 $19,994,986 197,724 $2,030,938 300,000 $3,000,000
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 1,707,983 $16,485,676 143,733 $1,344,321 113,249 $1,004,332
Dividends and distributions
reinvested 15,616 168,804 1,507 16,199 1,983 21,570
Redeemed (667,504) (5,973,043) (26,573) (236,673) (10,034) (89,991)
------------ ------------ ------------ ------------ ------------ ------------
Net change 1,056,095 $10,681,437 118,667 $1,123,847 105,198 $935,911
============ ============ ============ ============ ============ ============
The AAL Mid Cap Stock Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 7,676,598 $98,972,252 527,877 $6,402,278 593,535 $7,868,023
Dividends and distributions
reinvested 1,577,330 22,572,166 73,547 996,536 41,674 607,191
Redeemed (4,916,853) (62,981,935) (492,089) (5,856,387) (395,287) (5,139,052)
------------ ------------ ------------ ------------ ------------ ------------
Net change 4,337,075 $58,562,483 109,335 $1,542,427 239,922 $3,336,162
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 5,622,797 $61,355,828 436,184 $4,433,244 428,076 $4,775,897
Redeemed (9,968,058) (104,853,157) (856,791) (8,546,850) (417,793) (4,575,270)
------------ ------------ ------------ ------------ ------------ ------------
Net change (4,345,261) $(43,497,329) (420,607) $(4,113,606) 10,283 $200,627
============ ============ ============ ============ ============ ============
The AAL Mid Cap Index Fund The AAL Mid Cap Index Fund II
--------------------------- -----------------------------------------------------------
Institutional Class Class A Class B
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 1,113,209 $11,334,384 1,046,255 $10,523,460 85,213 $847,260
Dividends and distributions
reinvested 34,314 369,688 7,691 78,904 747 7,546
Redeemed (184,638) (1,951,700) (91,076) (905,855) (9,550) (93,172)
------------ ------------ ------------ ------------ ------------ ------------
Net change 962,885 $9,752,372 962,870 $9,696,509 76,410 $761,634
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 453,532 $4,084,475 1,072,267 $9,537,229 114,965 $977,283
Dividends and distributions
reinvested 79,150 704,768 35,578 299,925 3,443 28,333
Redeemed (371,137) (3,273,942) (478,709) (4,034,206) (21,403) (177,847)
------------ ------------ ------------ ------------ ------------ ------------
Net change 161,545 $1,515,301 629,136 $5,802,948 97,005 $827,769
============ ============ ============ ============ ============ ============
The AAL International Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 7,369,433 $62,641,074 192,464 $1,655,590 868,138 $7,334,455
Dividends and distributions
reinvested 247,988 2,102,902 1,698 14,242 5,222 44,437
Redeemed (6,349,897) (54,265,994) (302,809) (2,557,897) (838,957) (7,102,182)
------------ ------------ ------------ ------------ ------------ ------------
Net change 1,267,524 $10,477,982 (108,647) $(888,065) 34,403 $276,710
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 5,083,299 $35,917,668 231,712 $1,617,935 88,790 $723,975
Dividends and distributions
reinvested 85,334 574,295 -- -- 3,059 20,677
Redeemed (5,544,889) (37,965,359) (462,104) (3,206,174) (17,240) (121,855)
------------ ------------ ------------ ------------ ------------ ------------
Net change (376,256) $(1,473,396) (230,392) $(1,588,239) 74,609 $622,797
============ ============ ============ ============ ============ ============
The AAL Capital Growth Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 9,375,678 $294,187,855 626,119 $19,006,120 642,047 $20,489,830
Dividends and distributions
reinvested 578,538 19,055,111 12,173 390,999 16,835 552,145
Redeemed (8,862,223) (276,543,473) (799,780) (23,898,843) (1,088,736) (32,146,314)
------------ ------------ ------------ ------------ ------------ ------------
Net change 1,091,993 $36,699,493 (161,488) $(4,501,724) (429,854) $(11,104,339)
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 7,453,661 $188,742,782 509,708 $12,339,095 976,708 $24,557,544
Dividends and distributions
reinvested 318,131 8,009,547 -- -- 14,388 366,892
Redeemed (18,886,433) (464,941,823) (1,561,730) (37,394,305) (515,719) (12,916,711)
------------ ------------ ------------ ------------ ------------ ------------
Net change (11,114,641) $(268,189,494) (1,052,022) $(25,055,210) 475,377 $12,007,725
============ ============ ============ ============ ============ ============
The AAL Large
Company Index Fund The AAL Large Company Index Fund II
--------------------------- -----------------------------------------------------------
Institutional Class Class A Class B
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 5,507,353 $40,078,602 1,854,144 $14,366,866 148,663 $1,129,145
Dividends and distributions
reinvested 7,678 60,885 -- -- -- --
Redeemed (88,314) (710,104) (209,860) (1,614,614) (8,029) (60,659)
------------ ------------ ------------ ------------ ------------ ------------
Net change 5,426,717 $39,429,383 1,644,284 $12,752,252 140,634 $1,068,486
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 3,307,437 $21,158,281 1,709,196 $10,690,308 211,984 $1,280,873
Dividends and distributions
reinvested 46,003 277,400 20,081 120,685 -- --
Redeemed (2,051,928) (12,531,282) (1,440,451) (8,615,260) (20,768) (109,475)
------------ ------------ ------------ ------------ ------------ ------------
Net change 1,301,512 $8,904,399 288,826 $2,195,733 191,216 $1,171,398
============ ============ ============ ============ ============ ============
The AAL Equity Income Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 3,482,405 $46,051,263 157,466 $2,076,941 184,294 $2,445,643
Dividends and distributions
reinvested 282,929 3,726,807 3,982 53,583 10,666 140,626
Redeemed (2,021,748) (26,567,835) (117,920) (1,534,744) (140,719) (1,853,334)
------------ ------------ ------------ ------------ ------------ ------------
Net change 1,743,586 $23,210,235 43,528 $595,780 54,241 $732,935
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 2,191,772 $23,473,991 122,528 $1,294,137 761,883 $7,733,488
Dividends and distributions
reinvested 237,928 2,453,812 502 4,977 7,530 79,091
Redeemed (4,816,090) (49,282,694) (289,670) (2,951,035) (515,332) (5,449,859)
------------ ------------ ------------ ------------ ------------ ------------
Net change (2,386,390) $(23,354,891) (166,640) $(1,651,921) 254,081 $2,362,720
============ ============ ============ ============ ============ ============
The AAL Balanced Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 5,305,498 $63,056,116 375,840 $4,444,346 116,958 $1,407,588
Dividends and distributions
reinvested 564,346 6,646,705 25,317 297,244 7,884 92,657
Redeemed (2,856,434) (33,808,444) (165,903) (1,952,787) (71,162) (855,565)
------------ ------------ ------------ ------------ ------------ ------------
Net change 3,013,410 $35,894,377 235,254 $2,788,803 53,680 $644,680
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 3,416,858 $36,196,164 307,223 $3,230,520 10,690,466 $114,145,026
Dividends and distributions
reinvested 477,441 4,991,386 20,998 219,526 111,076 1,145,377
Redeemed (6,156,135) (64,447,749) (461,808) (4,789,207) (1,086,816) (11,220,338)
------------ ------------ ------------ ------------ ------------ ------------
Net change (2,261,836) $(23,260,199) (133,587) $(1,339,161) 9,714,726 $104,070,065
============ ============ ============ ============ ============ ============
The AAL High Yield Bond Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 4,278,236 $27,240,932 147,887 $953,569 236,886 $1,507,590
Dividends and distributions
reinvested 1,035,473 6,578,670 65,489 416,294 20,452 129,599
Redeemed (4,052,222) (25,741,497) (321,541) (2,020,098) (145,429) (923,370)
------------ ------------ ------------ ------------ ------------ ------------
Net change 1,261,487 $8,078,105 (108,165) $(650,235) 111,909 $713,819
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 3,571,703 $20,664,401 121,452 $704,358 98,715 $585,893
Dividends and distributions
reinvested 1,105,584 6,321,840 51,479 293,654 32,306 184,899
Redeemed (5,121,145) (29,402,824) (551,791) (3,145,287) (42,075) (241,368)
------------ ------------ ------------ ------------ ------------ ------------
Net change (443,858) $(2,416,583) (378,860) $(2,147,275) 88,946 $529,424
============ ============ ============ ============ ============ ============
The AAL Municipal Bond Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 9,520,392 $106,960,481 305,639 $3,431,296 247,827 $2,800,761
Dividends and distributions
reinvested 1,922,430 21,595,508 28,908 324,579 4,916 55,191
Redeemed (4,007,348) (44,962,766) (129,612) (1,453,037) (9,497) (106,394)
------------ ------------ ------------ ------------ ------------ ------------
Net change 7,435,474 $83,593,223 204,935 $2,302,838 243,246 $2,749,558
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 9,997,451 $114,243,001 328,130 $3,753,555 44,092 $498,114
Dividends and distributions
reinvested 2,030,621 23,248,861 31,462 360,177 2,528 28,885
Redeemed (7,159,974) (81,931,508) (269,067) (3,082,836) (218,741) (2,488,733)
------------ ------------ ------------ ------------ ------------ ------------
Net change 4,868,098 $55,560,354 90,525 $1,030,896 (172,121) $(1,961,734)
============ ============ ============ ============ ============ ============
The AAL Bond Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 13,199,439 $131,422,608 450,058 $4,489,542 1,156,608 $11,509,433
Dividends and distributions
reinvested 1,960,565 19,516,944 24,533 244,182 96,455 960,842
Redeemed (5,244,483) (52,075,096) (133,666) (1,328,441) (4,598,841) (46,407,986)
------------ ------------ ------------ ------------ ------------ ------------
Net change 9,915,521 $98,864,456 340,925 $3,405,283 (3,345,778) $(33,937,711)
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 13,943,165 $139,480,773 694,640 $6,970,962 1,245,466 $12,470,799
Dividends and distributions
reinvested 1,960,681 19,731,887 32,703 329,579 96,159 968,203
Redeemed (10,827,360) (109,048,807) (253,040) (2,550,859) (833,907) (8,360,303)
------------ ------------ ------------ ------------ ------------ ------------
Net change 5,076,486 $50,163,853 474,303 $4,749,682 507,718 $5,078,699
============ ============ ============ ============ ============ ============
The AAL Bond Index Fund
---------------------------
Institutional Class
---------------------------
Year Ended April 30, 2002 Shares Amount
- ------------------------- ------------ ------------
Sold 4,317,019 $46,271,170
Dividends and distributions
reinvested 121,553 1,282,500
Redeemed (590,279) (6,389,098)
------------ ------------
Net change 3,848,293 $41,164,572
============ ============
Year Ended April 30, 2003
- -------------------------
Sold 3,796,017 $40,643,025
Dividends and distributions
reinvested 120,233 1,301,035
Redeemed (2,145,587) (23,225,442)
------------ ------------
Net change 1,770,663 $18,718,618
============ ============
The AAL Money Market Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2002 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 456,396,564 $456,396,564 2,051,838 $2,051,838 432,508,702 $432,508,702
Dividends and distributions
reinvested 9,468,038 9,468,038 43,198 43,198 731,927 731,927
Redeemed (489,939,680) (489,939,680) (2,626,961) (2,626,961) (340,812,842) (340,812,842)
------------ ------------ ------------ ------------ ------------ ------------
Net change (24,075,078) $(24,075,078) (531,925) $(531,925) 92,427,787 $92,427,787
============ ============ ============ ============ ============ ============
Year Ended April 30, 2003
- -------------------------
Sold 383,009,911 $383,009,911 3,160,982 $3,160,982 774,040,495 $774,040,495
Dividends and distributions
reinvested 3,321,618 3,321,618 12,249 12,249 1,015,369 1,015,369
Redeemed (436,462,816) (436,462,816) (3,143,731) (3,143,731) (801,421,347) (801,421,347)
------------ ------------ ------------ ------------ ------------ ------------
Net change (50,131,287) $(50,131,287) 29,500 $29,500 (26,365,483) $(26,365,483)
============ ============ ============ ============ ============ ============
(10) LINE OF CREDIT
Effective May 1, 2003, The AAL Mutual Funds, along with the AAL Variable Product Series Fund, Inc., The Lutheran Brotherhood Family of Funds, and the LB Series Fund, Inc., entered into an unsecured $75 million bank line of credit agreement with State Street Bank and Trust Company. Borrowings under the agreement would bear interest at the Federal Funds rate plus 0.50%. The Funds are allowed to borrow money for temporary or emergency purposes to fund shareholder redemptions.
(11) SUBSEQUENT EVENT
Effective May 15, 2003, an in-kind redemption of $32,115,340 was transferred from The AAL Large Company Index Fund to an Institutional shareholder of the Fund in settlement of their interest in The AAL Large Company Index Fund. The redemption resulted in the pro rata portion of each equity security being transferred to the shareholder. Cash of $763,626 was paid for the investors' pro rata share of short-term investments, including S&P 500 Index futures. This transaction is a non-taxable event to The AAL Large Company Index Fund's shareholders.
The AAL Mutual Funds
Financial Highlights
The AAL Technology Stock Fund
Class A Shares
- -----------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(e)
- -----------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $3.15 $5.13 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment loss (0.05) (0.06) (0.05)
Net realized and unrealized loss on investments(b) (0.60) (1.92) (4.82)
---------- ---------- ----------
Total from Investment Operations (0.65) (1.98) (4.87)
---------- ---------- ----------
Net Asset Value, End of period $2.50 $3.15 $5.13
---------- ---------- ----------
Total return(c) (20.63)% (38.60)% (48.70)%
Net assets, end of period (in millions) $29.3 $31.4 $27.8
Ratio of expenses to average net assets(d) 2.39% 2.29% 2.40%
Ratio of net investment loss to average net assets(d) (2.09)% (2.05)% (1.70)%
Portfolio turnover rate 67% 57% 44%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.75% 2.33% 2.40%
Ratio of net investment loss to average net assets(d) (2.45)% (2.09)% (1.71)%
The AAL Technology Stock Fund
Class B Shares
- -----------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(e)
- -----------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $3.09 $5.10 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment loss (0.06) (0.09) (0.09)
Net realized and unrealized loss on investments(b) (0.60) (1.92) (4.81)
---------- ---------- ----------
Total from Investment Operations (0.66) (2.01) (4.90)
---------- ---------- ----------
Net Asset Value, End of period $2.43 $3.09 $5.10
---------- ---------- ----------
Total return(c) (21.36)% (39.41)% (49.00)%
Net assets, end of period (in millions) $2.6 $2.6 $2.6
Ratio of expenses to average net assets(d) 3.50% 3.25% 3.40%
Ratio of net investment loss to average net assets(d) (3.20)% (3.01)% (2.68)%
Portfolio turnover rate 67% 57% 44%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 4.12% 3.29% 3.41%
Ratio of net investment loss to average net assets(d) (3.82)% (3.05)% (2.69)%
The AAL Technology Stock Fund
Institutional Class Shares
- -----------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(e)
- -----------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $3.22 $5.19 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment loss (0.02) (0.03) (0.02)
Net realized and unrealized loss on investments(b) (0.61) (1.94) (4.79)
---------- ---------- ----------
Total from Investment Operations (0.63) (1.97) (4.81)
---------- ---------- ----------
Net Asset Value, End of period $2.59 $3.22 $5.19
---------- ---------- ----------
Total return(c) (19.57)% (37.96)% (48.10)%
Net assets, end of period (in millions) $2.2 $7.9 $9.3
Ratio of expenses to average net assets(d) 1.06% 1.10% 1.32%
Ratio of net investment loss to average net assets(d) (0.76)% (0.86)% (0.59)%
Portfolio turnover rate 67% 57% 44%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.08% 1.14% 1.33%
Ratio of net investment loss to average net assets(d) (0.78)% (0.90)% (0.60)%
The AAL Aggressive Growth Fund
Class A Shares
- --------------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(e)
- --------------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $4.53 $6.70 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.06) (0.06) (0.02)
Net realized and unrealized loss on investments(b) (0.72) (2.11) (3.28)
---------- ---------- ----------
Total from Investment Operations (0.78) (2.17) (3.30)
---------- ---------- ----------
Net Asset Value, End of period $3.75 $4.53 $6.70
---------- ---------- ----------
Total return(c) (17.22)% (32.39)% (33.00)%
Net assets, end of period (in millions) $30.2 $34.9 $35.3
Ratio of expenses to average net assets(d) 2.64% 2.21% 2.12%
Ratio of net investment income/(loss) to average net
assets(d) (1.72)% (1.34)% (0.51)%
Portfolio turnover rate 204% 94% 70%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.65% 2.21% 2.12%
Ratio of net investment income/(loss) to average net
assets(d) (1.73)% (1.34)% (0.51)%
The AAL Aggressive Growth Fund
Class B Shares
- --------------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(e)
- --------------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $4.44 $6.65 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.09) (0.10) (0.06)
Net realized and unrealized loss on investments(b) (0.72) (2.11) (3.29)
---------- ---------- ----------
Total from Investment Operations (0.81) (2.21) (3.35)
---------- ---------- ----------
Net Asset Value, End of period $3.63 $4.44 $6.65
---------- ---------- ----------
Total return(c) (18.24)% (33.23)% (33.50)%
Net assets, end of period (in millions) $3.3 $3.4 $3.0
Ratio of expenses to average net assets(d) 3.73% 3.33% 3.32%
Ratio of net investment income/(loss) to average net
assets(d) (2.81)% (2.46)% (1.62)%
Portfolio turnover rate 204% 94% 70%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 3.74% 3.33% 3.32%
Ratio of net investment income/(loss) to average net
assets(d) (2.82)% (2.46)% (1.62)%
The AAL Aggressive Growth Fund
Institutional Class Shares
- --------------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(e)
- --------------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $4.62 $6.77 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.02 (0.01) 0.03
Net realized and unrealized loss on investments(b) (0.76) (2.14) (3.26)
---------- ---------- ----------
Total from Investment Operations (0.74) (2.15) (3.23)
---------- ---------- ----------
Net Asset Value, End of period $3.88 $4.62 $6.77
---------- ---------- ----------
Total return(c) (16.02)% (31.76)% (32.30)%
Net assets, end of period (in millions) $2.8 $6.7 $8.2
Ratio of expenses to average net assets(d) 1.10% 1.15% 1.17%
Ratio of net investment income/(loss) to average net
assets(d) (0.18)% (0.28)% 0.60%
Portfolio turnover rate 204% 94% 70%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.11% 1.15% 1.17%
Ratio of net investment income/(loss) to average net
assets(d) (0.19)% (0.28)% 0.60%
(a) All per share amounts have been rounded to the nearest cent.
(b) The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of fund shares.
(c) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not annualized for periods less than one year.
(d) Computed on an annualized basis for periods less than one year.
(e) Since Fund inception, July 1, 2000.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Small Cap Stock Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $14.82 $13.39 $14.60 $10.89 $13.84
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.09) (0.09) (0.06) (0.08) (0.12)
Net realized and unrealized gain/(loss) on investments(b) (3.18) 1.60 1.05 3.79 (2.51)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (3.27) 1.51 0.99 3.71 (2.63)
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net realized gain on investments -- (0.08) (2.20) -- (0.32)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.55 $14.82 $13.39 $14.60 $10.89
---------- ---------- ---------- ---------- ----------
Total return(c) (22.06)% 11.29% 7.77% 34.07% (18.97)%
Net assets, end of period (in millions) $266.7 $344.3 $258.6 $191.3 $116.0
Ratio of expenses to average net assets(d) 1.47% 1.36% 1.40% 1.53% 1.82%
Ratio of net investment income/(loss) to average net
assets(d) (0.78)% (0.69)% (0.54)% (0.72)% (1.15)%
Portfolio turnover rate 97% 59% 123% 147% 113%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.49% 1.37% 1.41% 1.65% 1.82%
Ratio of net investment income/(loss) to average net
assets(d) (0.80)% (0.70)% (0.54)% (0.85)% (1.15)%
The AAL Small Cap Stock Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $14.08 $12.86 $14.24 $10.74 $13.73
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.26) (0.24) (0.18) (0.19) (0.22)
Net realized and unrealized gain/(loss) on investments(b) (2.96) 1.54 1.00 3.69 (2.50)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (3.22) 1.30 0.82 3.50 (2.72)
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net realized gain on investments -- (0.08) (2.20) -- (0.27)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.86 $14.08 $12.86 $14.24 $10.74
---------- ---------- ---------- ---------- ----------
Total return(c) (22.87)% 10.11% 6.72% 32.71% (19.85)%
Net assets, end of period (in millions) $21.1 $33.8 $31.2 $24.6 $15.8
Ratio of expenses to average net assets(d) 2.45% 2.39% 2.39% 2.56% 2.89%
Ratio of net investment income/(loss) to average net
assets(d) (1.75)% (1.72)% (1.52)% (1.76)% (2.22)%
Portfolio turnover rate 97% 59% 123% 147% 113%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.47% 2.41% 2.40% 2.68% 2.89%
Ratio of net investment income/(loss) to average net
assets(d) (1.77)% (1.74)% (1.53)% (1.88)% (2.22)%
The AAL Small Cap Stock Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $15.26 $13.71 $14.80 $10.95 $13.87
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.06) (0.01) 0.01 0.01 (0.04)
Net realized and unrealized gain/(loss) on investments(b) (3.22) 1.64 1.10 3.84 (2.52)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (3.28) 1.63 1.11 3.85 (2.56)
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net realized gain on investments -- (0.08) (2.20) -- (0.36)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.98 $15.26 $13.71 $14.80 $10.95
---------- ---------- ---------- ---------- ----------
Total return(c) (21.49)% 11.90% 8.53% 35.16% (18.41)%
Net assets, end of period (in millions) $6.8 $5.3 $3.8 $1.0 $0.8
Ratio of expenses to average net assets(d) 0.73% 0.74% 0.78% 0.72% 1.08%
Ratio of net investment income/(loss) to average net
assets(d) (0.03)% (0.07)% 0.11% 0.08% (0.40)%
Portfolio turnover rate 97% 59% 123% 147% 113%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 0.75% 0.75% 0.78% 0.84% 1.08%
Ratio of net investment income/(loss) to average net
assets(d) (0.05)% (0.08)% 0.10% (0.04)% (0.04)%
The AAL Small Cap Index Fund II
Class A Shares
- --------------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(e)
- --------------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $11.42 $10.03 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment loss (0.04) (0.07) (0.07)
Net realized and unrealized gain/(loss) on investments(b) (2.43) 1.52 0.21
Total from Investment Operations (2.47) 1.45 0.14
---------- ---------- ----------
Less Distributions from:
Net realized gain on investments (0.06) (0.06) (0.11)
---------- ---------- ----------
Net Asset Value, End of period $8.89 $11.42 $10.03
---------- ---------- ----------
Total return(c) (21.69)% 14.53% 1.43%
Net assets, end of period (in millions) $20.5 $21.6 $13.3
Ratio of expenses to average net assets(d) 1.35% 1.51% 1.86%
Ratio of net investment loss to average net assets(d) (0.44)% (0.77)% (1.03)%
Portfolio turnover rate 18% 18% 36%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.40% 1.51% 1.86%
Ratio of net investment loss to average net assets(d) (0.49)% (0.77)% (1.03)%
The AAL Small Cap Index Fund II
Class B Shares
- --------------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(e)
- --------------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $11.26 $9.97 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment loss (0.08) (0.14) (0.13)
Net realized and unrealized gain/(loss) on investments(b) (2.43) 1.49 0.21
Total from Investment Operations (2.51) 1.35 0.08
---------- ---------- ----------
Less Distributions from:
Net realized gain on investments (0.06) (0.06) (0.11)
---------- ---------- ----------
Net Asset Value, End of period $8.69 $11.26 $9.97
---------- ---------- ----------
Total return(c) (22.29)% 13.62% 0.73%
Net assets, end of period (in millions) $2.3 $2.1 $1.5
Ratio of expenses to average net assets(d) 2.25% 2.27% 2.67%
Ratio of net investment loss to average net assets(d) (1.34)% (1.53)% (1.84)%
Portfolio turnover rate 18% 18% 36%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.32% 2.27% 2.67%
Ratio of net investment loss to average net assets(d) (1.41)% (1.53)% (1.84)%
(a) All per share amounts have been rounded to the nearest cent.
(b) The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of fund shares.
(c) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not annualized for periods less than one year.
(d) Computed on an annualized basis for periods less than one year.
(e) Since Fund inception, July 17, 2001.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Small Cap Value Fund
Class A Shares
- --------------------------------------------------------------------------------------------
Year Period
Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002(e)
- --------------------------------------------------------------------------------------------
---------- ----------
Net Asset Value, Beginning of Period $11.65 $10.00
---------- ----------
Income from Investment Operations:
Net investment loss (0.07) (0.05)
Net realized and unrealized gain/(loss) on investments(b) (2.18) 1.70
---------- ----------
Total from Investment Operations (2.25) 1.65
---------- ----------
Less Distributions from:
Net realized gain on investments (0.07) --
---------- ----------
Net Asset Value, End of period $9.33 $11.65
---------- ----------
Total return(c) (19.38)% 16.50%
Net assets, end of period (in millions) $27.7 $22.3
Ratio of expenses to average net assets(d) 1.86% 2.12%
Ratio of net investment income/(loss) to average net
assets(d) (0.88)% (1.19)%
Portfolio turnover rate 147% 50%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.05% 2.16%
Ratio of net investment loss to average net assets(d) (1.07)% (1.23)%
The AAL Small Cap Value Fund
Class B Shares
- --------------------------------------------------------------------------------------------
Year Period
Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002(e)
- --------------------------------------------------------------------------------------------
---------- ----------
Net Asset Value, Beginning of Period $11.59 $10.00
---------- ----------
Income from Investment Operations:
Net investment loss (0.12) (0.11)
Net realized and unrealized gain/(loss) on investments(b) (2.19) 1.70
---------- ----------
Total from Investment Operations (2.31) 1.59
---------- ----------
Less Distributions from:
Net realized gain on investments (0.07) --
---------- ----------
Net Asset Value, End of period $9.21 $11.59
---------- ----------
Total return(c) (20.00)% 15.90%
Net assets, end of period (in millions) $2.9 $2.3
Ratio of expenses to average net assets(d) 2.71% 2.86%
Ratio of net investment income/(loss) to average net
assets(d) (1.73)% (1.93)%
Portfolio turnover rate 147% 50%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.91% 2.90%
Ratio of net investment loss to average net assets(d) (1.93)% (1.97)%
The AAL Small Cap Value Fund
Institutional Shares
- --------------------------------------------------------------------------------------------
Year Period
Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002(e)
- --------------------------------------------------------------------------------------------
---------- ----------
Net Asset Value, Beginning of Period $11.71 $10.00
---------- ----------
Income from Investment Operations:
Net investment loss -- (0.05)
Net realized and unrealized gain/(loss) on investments(b) (2.17) 1.76
---------- ----------
Total from Investment Operations (2.17) 1.71
---------- ----------
Less Distributions from:
Net realized gain on investments (0.07) --
---------- ----------
Net Asset Value, End of period $9.47 $11.71
---------- ----------
Total return(c) (18.59)% 17.10%
Net assets, end of period (in millions) $3.8 $3.5
Ratio of expenses to average net assets(d) 0.87% 1.59%
Ratio of net investment income/(loss) to average net
assets(d) 0.10% (0.66)%
Portfolio turnover rate 147% 50%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.07% 1.63%
Ratio of net investment loss to average net assets(d) (0.10)% (0.70)%
The AAL Mid Cap Stock Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $13.01 $14.73 $16.73 $13.89 $15.93
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.02) (0.03) -- -- (0.04)
Net realized and unrealized gain/(loss) on investments(b) (2.25) (1.31) 1.19 3.67 (1.25)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (2.27) (1.34) 1.19 3.67 (1.29)
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net realized gain on investments -- (0.38) (3.19) (0.83) (0.75)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.74 $13.01 $14.73 $16.73 $13.89
---------- ---------- ---------- ---------- ----------
Total return(c) (17.45)% (9.36)% 7.26% 27.29% (7.62)%
Net assets, end of period (in millions) $643.8 $836.5 $883.2 $759.0 $584.9
Ratio of expenses to average net assets(d) 1.30% 1.22% 1.16% 1.14% 1.37%
Ratio of net investment income/(loss) to average net
assets(d) (0.18)% (0.25)% 0.02% (0.02)% (0.28)%
Portfolio turnover rate 48% 97% 144% 142% 126%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.31% 1.23% 1.17% 1.24% 1.37%
Ratio of net investment income/(loss) to average net
assets(d) (0.19)% (0.26)% 0.01% (0.12)% (0.28)%
The AAL Mid Cap Stock Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $12.20 $14.00 $16.20 $13.64 $15.78
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.18) (0.17) (0.12) (0.17) (0.17)
Net realized and unrealized gain/(loss) on investments(b) (2.07) (1.25) 1.11 3.56 (1.27)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (2.25) (1.42) 0.99 3.39 (1.44)
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net realized gain on investments -- (0.38) (3.19) (0.83) (0.70)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $9.95 $12.20 $14.00 $16.20 $13.64
---------- ---------- ---------- ---------- ----------
Total return(c) (18.44)% (10.44)% 6.18% 25.71% (8.70)%
Net assets, end of period (in millions) $22.8 $33.1 $36.4 $26.9 $17.0
Ratio of expenses to average net assets(d) 2.50% 2.38% 2.19% 2.46% 2.56%
Ratio of net investment income/(loss) to average net
assets(d) (1.38)% (1.41)% (1.01)% (1.33)% (1.46)%
Portfolio turnover rate 48% 97% 144% 142% 126%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.51% 2.39% 2.20% 2.55% 2.56%
Ratio of net investment income/(loss) to average net
assets(d) (1.39)% (1.42)% (1.01)% (1.43)% (1.46)%
The AAL Mid Cap Stock Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $13.31 $14.98 $16.89 $13.94 $15.96
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.05 0.03 0.07 0.05 0.02
Net realized and unrealized gain/(loss) on investments(b) (2.30) (1.32) 1.21 3.73 (1.25)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (2.25) (1.29) 1.28 3.78 (1.23)
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net realized gain on investments -- (0.38) (3.19) (0.83) (0.79)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.06 $13.31 $14.98 $16.89 $13.94
---------- ---------- ---------- ---------- ----------
Total return(c) (16.90)% (8.86)% 7.68% 28.00% (7.17)%
Net assets, end of period (in millions) $20.7 $24.8 $24.3 $16.5 $6.4
Ratio of expenses to average net assets(d) 0.68% 0.69% 0.68% 0.62% 0.85%
Ratio of net investment income/(loss) to average net
assets(d) 0.44% 0.28% 0.50% 0.51% 0.33%
Portfolio turnover rate 48% 97% 144% 142% 126%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 0.69% 0.70% 0.69% 0.71% 0.85%
Ratio of net investment income/(loss) to average net
assets(d) 0.43% 0.27% 0.50% 0.41% 0.37%
(a) All per share amounts have been rounded to the nearest cent.
(b) The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of fund shares.
(c) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not annualized for periods less than one year.
(d) Computed on an annualized basis for periods less than one year.
(e) Since Fund inception, July 17, 2001.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Mid Cap Index Fund
Institutional Class Shares
- ----------------------------------------------------------------------------------------------------------------------
Year Year Year Period
Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000(e)
- ----------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.23 $10.80 $10.90 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.08 0.06 0.08 0.03
Net realized and unrealized gain/(loss) on investments(b) (2.07) 0.60 0.57 0.87
---------- ---------- ---------- ----------
Total from Investment Operations (1.99) 0.66 0.65 0.90
---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.08) (0.07) (0.09) --
Net realized gain on investments (0.25) (0.16) (0.66) --
---------- ---------- ---------- ----------
Total Distributions (0.33) (0.23) (0.75) --
---------- ---------- ---------- ----------
Net Asset Value, End of period $8.91 $11.23 $10.80 $10.90
---------- ---------- ---------- ----------
Total return(c) (17.68)% 6.23% 6.13% 9.00%
Net assets, end of period (in millions) $20.8 $24.3 $13.0 $8.9
Ratio of expenses to average net assets(d) 0.28% 0.20% 0.20% 0.20%
Ratio of net investment income/(loss) to average net
assets(d) 0.89% 0.84% 0.90% 1.02%
Portfolio turnover rate 22% 21% 54% 25%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 0.57% 0.88% 1.31% 1.27%
Ratio of net investment income/(loss) to average net
assets(d) 0.60% 0.16% (0.21)% (0.05)%
The AAL Mid Cap Index Fund II
Class A Shares
- --------------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(f)
- --------------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $10.71 $10.24 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) -- (0.03) (0.04)
Net realized and unrealized gain/(loss) on investments(b) (1.97) 0.53 0.31
---------- ---------- ----------
Total from Investment Operations (1.97) 0.50 0.27
---------- ---------- ----------
Less Distributions from:
Net investment income -- -- --
Net realized gain on investments (0.09) (0.03) (0.03)
---------- ---------- ----------
Total Distributions (0.09) (0.03) (0.03)
---------- ---------- ----------
Net Asset Value, End of period $8.65 $10.71 $10.24
---------- ---------- ----------
Total return(c) (18.36)% 4.94% 2.73%
Net assets, end of period (in millions) $29.0 $29.2 $18.1
Ratio of expenses to average net assets(d) 1.21% 1.36% 1.71%
Ratio of net investment income/(loss) to average net
assets(d) (0.03)% (0.31)% (0.58)%
Portfolio turnover rate 16% 15% 31%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.21% 1.36% 1.71%
Ratio of net investment income/(loss) to average net
assets(d) (0.03)% (0.31)% (0.58)%
The AAL Mid Cap Index Fund II
Class B Shares
- --------------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(f)
- --------------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $10.53 $10.17 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.04) (0.10) (0.10)
Net realized and unrealized gain/(loss) on investments(b) (1.97) 0.49 0.30
---------- ---------- ----------
Total from Investment Operations (2.01) 0.39 0.20
---------- ---------- ----------
Less Distributions from:
Net investment income -- -- --
Net realized gain on investments (0.09) (0.03) (0.03)
---------- ---------- ----------
Total Distributions (0.09) (0.03) (0.03)
---------- ---------- ----------
Net Asset Value, End of period $8.43 $10.53 $10.17
---------- ---------- ----------
Total return(c) (19.05)% 3.89% 2.03%
Net assets, end of period (in millions) $3.0 $2.7 $1.8
Ratio of expenses to average net assets(d) 2.03% 2.30% 2.57%
Ratio of net investment income/(loss) to average net
assets(d) (0.85)% (1.25)% (1.42)%
Portfolio turnover rate 16% 15% 31%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.20% 2.30% 2.57%
Ratio of net investment income/(loss) to average net
assets(d) (1.02)% (1.25)% (1.42)%
The AAL International Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $8.62 $10.56 $14.06 $11.35 $11.15
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.03 0.01 0.25 -- 0.08
Net realized and unrealized gain/(loss) on investments(b) (1.92) (1.84) (3.24) 2.71 0.65
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (1.89) (1.83) (2.99) 2.71 0.73
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.05) (0.11) (0.24) -- (0.44)
Net realized gain on investments -- -- (0.27) -- (0.09)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.05) (0.11) (0.51) -- (0.53)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $6.68 $8.62 $10.56 $14.06 $11.35
---------- ---------- ---------- ---------- ----------
Total return(c) (22.17)% (17.27)% (21.61)% 23.91% 6.82%
Net assets, end of period (in millions) $126.5 $166.5 $190.6 $226.7 $146.9
Ratio of expenses to average net assets(d) 1.71% 1.56% 1.38% 1.36% 1.74%
Ratio of net investment income/(loss) to average net
assets(d) 0.20% 0.08% 2.06% (0.01)% 0.64%
Portfolio turnover rate 52% 63% 38% 44% 101%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.71% 1.56% 1.38% 1.41% 1.74%
Ratio of net investment income/(loss) to average net
assets(d) 0.20% 0.08% 2.06% (0.07)% 0.64%
The AAL International Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $8.50 $10.39 $13.75 $11.23 $11.05
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.09) (0.09) 0.10 (0.13) (0.03)
Net realized and unrealized gain/(loss) on investments(b) (1.89) (1.79) (3.17) 2.65 0.64
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (1.98) (1.88) (3.07) 2.52 0.61
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income -- (0.01) (0.02) -- (0.34)
Net realized gain on investments -- -- (0.27) -- (0.09)
---------- ---------- ---------- ---------- ----------
Total Distributions -- (0.01) (0.29) -- (0.43)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $6.52 $8.50 $10.39 $13.75 $11.23
---------- ---------- ---------- ---------- ----------
Total return(c) (23.29)% (18.09)% (22.56)% 22.44% 5.72%
Net assets, end of period (in millions) $6.4 $10.3 $13.7 $15.6 $9.8
Ratio of expenses to average net assets(d) 3.18% 2.57% 2.53% 2.53% 2.85%
Ratio of net investment income/(loss) to average net
assets(d) (1.26)% (0.93)% 0.88% (1.19)% (0.52)%
Portfolio turnover rate 52% 63% 38% 44% 101%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 3.18% 2.57% 2.53% 2.59% 2.85%
Ratio of net investment income/(loss) to average net
assets(d) (1.26)% (0.93)% 0.88% (1.25)% (0.52)%
The AAL International Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $8.68 $10.63 $14.15 $11.37 $11.17
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.08 0.03 0.26 0.08 0.15
Net realized and unrealized gain/(loss) on investments(b) (1.89) (1.80) (3.20) 2.73 0.65
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (1.81) (1.77) (2.94) 2.81 0.80
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.14) (0.18) (0.31) (0.03) (0.51)
Net realized gain on investments -- -- (0.27) -- (0.09)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.14) (0.18) (0.58) (0.03) (0.60)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $6.73 $8.68 $10.63 $14.15 $11.37
---------- ---------- ---------- ---------- ----------
Total return(c) (21.45)% (16.61)% (21.12)% 24.69% 7.49%
Net assets, end of period (in millions) $2.8 $3.0 $3.3 $2.8 $1.9
Ratio of expenses to average net assets(d) 0.77% 0.78% 0.75% 0.73% 1.09%
Ratio of net investment income/(loss) to average net
assets(d) 1.15% 0.86% 2.42% 0.61% 1.10%
Portfolio turnover rate 52% 63% 38% 44% 101%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 0.77% 0.78% 0.75% 0.79% 1.09%
Ratio of net investment income/(loss) to average net
assets(d) 1.15% 0.86% 2.42% 0.55% 1.10%
(a) All per share amounts have been rounded to the nearest cent.
(b) The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of fund shares.
(c) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not annualized for periods less than one year.
(d) Computed on an annualized basis for periods less than one year.
(e) Since Fund inception, December 31, 1999.
(f) Since Fund inception, July 1, 2000.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Capital Growth Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $29.84 $34.82 $38.67 $35.87 $29.64
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.10 0.05 0.19 0.13 0.09
Net realized and unrealized gain/(loss) on investments(b) (4.48) (4.86) (1.74) 3.19 6.69
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (4.38) (4.81) (1.55) 3.32 6.78
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.07) (0.09) (0.16) (0.09) (0.09)
Net realized gain on investments -- (0.08) (2.14) (0.43) (0.46)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.07) (0.17) (2.30) (0.52) (0.55)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $25.39 $29.84 $34.82 $38.67 $35.87
---------- ---------- ---------- ---------- ----------
Total return(c) (14.66)% (13.86)% (4.19)% 9.28% 23.20%
Net assets, end of period (in millions) $2,598.2 $3,385.5 $3,912.5 $4,115.1 $3,594.5
Ratio of expenses to average net assets(d) 1.02% 0.95% 0.91% 0.90% 0.97%
Ratio of net investment income/(loss) to average net
assets(d) 0.38% 0.16% 0.52% 0.35% 0.30%
Portfolio turnover rate 5% 3% 13% 8% 9%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.02% 0.95% 0.91% 0.92% 0.97%
Ratio of net investment income/(loss) to average net
assets(d) 0.38% 0.16% 0.52% 0.33% 0.30%
The AAL Capital Growth Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $28.67 $33.71 $37.71 $35.29 $29.38
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.28) (0.27) (0.15) (0.22) (0.19)
Net realized and unrealized gain/(loss) on investments(b) (4.20) (4.69) (1.71) 3.07 6.56
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (4.48) (4.96) (1.86) 2.85 6.37
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income -- -- -- -- --
Net realized gain on investments -- (0.08) (2.14) (0.43) (0.46)
---------- ---------- ---------- ---------- ----------
Total Distributions -- (0.08) (2.14) (0.43) (0.46)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $24.19 $28.67 $33.71 $37.71 $35.29
---------- ---------- ---------- ---------- ----------
Total return(c) (15.63)% (14.73)% (5.14)% 8.09% 21.94%
Net assets, end of period (in millions) $81.2 $126.4 $154.1 $148.6 $107.6
Ratio of expenses to average net assets(d) 2.16% 1.97% 1.88% 1.95% 1.99%
Ratio of net investment income/(loss) to average net
assets(d) (0.75)% (0.86)% (0.44)% (0.69)% (0.74)%
Portfolio turnover rate 5% 3% 13% 8% 9%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.16% 1.97% 1.88% 1.96% 1.99%
Ratio of net investment income/(loss) to average net
assets(d) (0.75)% (0.86)% (0.44)% (0.71)% (0.74)%
The AAL Capital Growth Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $29.90 $34.88 $38.72 $35.89 $29.67
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.21 0.18 0.33 0.27 0.21
Net realized and unrealized gain/(loss) on investments(b) (4.47) (4.88) (1.73) 3.20 6.67
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (4.26) (4.70) (1.40) 3.47 6.88
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.18) (0.20) (0.30) (0.21) (0.20)
Net realized gain on investments -- (0.08) (2.14) (0.43) (0.46)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.18) (0.28) (2.44) (0.64) (0.66)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $25.46 $29.90 $34.88 $38.72 $35.89
---------- ---------- ---------- ---------- ----------
Total return(c) (14.24)% (13.53)% (3.82)% 9.70% 23.55%
Net assets, end of period (in millions) $68.2 $65.9 $91.8 $82.8 $46.9
Ratio of expenses to average net assets(d) 0.55% 0.55% 0.54% 0.52% 0.60%
Ratio of net investment income/(loss) to average net
assets(d) 0.85% 0.56% 0.90% 0.73% 0.62%
Portfolio turnover rate 5% 3% 13% 8% 9%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 0.55% 0.55% 0.54% 0.54% 0.60%
Ratio of net investment income/(loss) to average net
assets(d) 0.85% 0.56% 0.90% 0.72% 0.62%
The AAL Large Company Index Fund
Class A Shares
- -------------------------------------------------------------------------------------------------------------------
Year Year Year Period
Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000(e)
- -------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $7.38 $8.56 $9.95 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.08 0.05 0.09 0.02
Net realized and unrealized loss on investments(b) (1.07) (1.18) (1.40) (0.07)
---------- ---------- ---------- ----------
Total from Investment Operations (0.99) (1.13) (1.31) (0.05)
---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.08) (0.05) (0.08) --
---------- ---------- ---------- ----------
Net Asset Value, End of period $6.31 $7.38 $8.56 $9.95
---------- ---------- ---------- ----------
Total return(c) (13.36)% (13.22)% (13.18)% (0.50)%
Net assets, end of period (in millions) $62.1 $63.0 $26.6 $27.6
Ratio of expenses to average net assets(d) 0.24% 0.20% 0.20% 0.20%
Ratio of net investment income/(loss) to average net
assets(d) 1.55% 1.17% 0.97% 1.21%
Portfolio turnover rate 23% 3% 9% 2%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 0.36% 0.49% 0.69% 0.93%
Ratio of net investment income/(loss) to average net
assets(d) 1.43% 0.88% 0.49% 0.49%
The AAL Large Company Index Fund II
Class B Shares
- -----------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(f)
- -----------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $7.32 $8.49 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.05 -- (0.01)
Net realized and unrealized loss on investments(b) (1.05) (1.17) (1.50)
---------- ---------- ----------
Total from Investment Operations (1.00) (1.17) (1.51)
---------- ---------- ----------
Less Distributions from:
Net investment income (0.02) -- --
---------- ---------- ----------
Net Asset Value, End of period $6.30 $7.32 $8.49
---------- ---------- ----------
Total return(c) (13.58)% (13.78)% (15.10)%
Net assets, end of period (in millions) $27.8 $30.2 $21.1
Ratio of expenses to average net assets(d) 0.93% 1.29% 1.46%
Ratio of net investment income/(loss) to average net
assets(d) 0.86% 0.08% (0.20)%
Portfolio turnover rate 16% 4% 9%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.18% 1.29% 1.46%
Ratio of net investment income/(loss) to average net
assets(d) 0.61% 0.08% (0.20)%
The AAL Large Company Index Fund II
Institutional Class Shares
- -----------------------------------------------------------------------------------------------------
Year Year Period
Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001(f)
- -----------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $7.20 $8.43 $10.00
---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.01 (0.05) (0.06)
Net realized and unrealized loss on investments(b) (1.06) (1.18) (1.51)
---------- ---------- ----------
Total from Investment Operations (1.05) (1.23) (1.57)
---------- ---------- ----------
Less Distributions from:
Net investment income -- -- --
---------- ---------- ----------
Net Asset Value, End of period $6.15 $7.20 $8.43
---------- ---------- ----------
Total return(c) (14.58)% (14.59)% (15.70)%
Net assets, end of period (in millions) $3.4 $2.6 $1.8
Ratio of expenses to average net assets(d) 1.94% 2.18% 2.33%
Ratio of net investment income/(loss) to average net
assets(d) (0.15)% (0.81)% (1.06)%
Portfolio turnover rate 16% 4% 9%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.19% 2.18% 2.33%
Ratio of net investment income/(loss) to average net
assets(d) (0.40)% (0.81)% (1.06)%
(a) All per share amounts have been rounded to the nearest cent.
(b) The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of fund shares.
(c) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not annualized for periods less than one year.
(d) Computed on an annualized basis for periods less than one year.
(e) Since Fund inception, December 31, 1999.
(f) Since Fund inception, July 1, 2000.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Equity Income Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $12.90 $14.57 $14.40 $14.68 $14.31
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.11 0.15 0.21 0.18 0.16
Net realized and unrealized gain/(loss) on investments(b) (2.71) (1.64) 0.94 (0.30) 1.17
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (2.60) (1.49) 1.15 (0.12) 1.33
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.11) (0.13) (0.21) (0.16) (0.17)
Net realized gain on investments -- (0.05) (0.77) -- (0.79)
Return of capital (0.01) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Distributions (0.12) (0.18) (0.98) (0.16) (0.96)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.18 $12.90 $14.57 $14.40 $14.68
---------- ---------- ---------- ---------- ----------
Total return(c) (20.19)% (10.26)% 8.26% (0.80)% 10.08%
Net assets, end of period (in millions) $206.7 $292.7 $305.1 $277.6 $262.2
Ratio of expenses to average net assets(d) 1.06% 0.97% 0.96% 0.92% 1.05%
Ratio of net investment income/(loss) to average net
assets(d) 1.04% 1.14% 1.48% 1.24% 1.22%
Portfolio turnover rate 63% 34% 26% 27% 13%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.07% 0.98% 0.96% 0.98% 1.05%
Ratio of net investment income/(loss) to average net
assets(d) 1.03% 1.13% 1.47% 1.18% 1.22%
The AAL Equity Income Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $12.87 $14.54 $14.38 $14.66 $14.31
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) (0.01) 0.03 0.06 0.02 0.02
Net realized and unrealized gain/(loss) on investments(b) (2.69) (1.64) 0.93 (0.28) 1.17
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (2.70) (1.61) 0.99 (0.26) 1.19
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.01) (0.01) (0.06) (0.02) (0.05)
Net realized gain on investments -- (0.05) (0.77) -- (0.79)
Return of capital -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Distributions (0.01) (0.06) (0.83) (0.02) (0.84)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.16 $12.87 $14.54 $14.38 $14.66
---------- ---------- ---------- ---------- ----------
Total return(c) (21.01)% (11.11)% 7.12% (1.80)% 8.97%
Net assets, end of period (in millions) $8.1 $12.4 $13.4 $11.6 $9.6
Ratio of expenses to average net assets(d) 2.16% 1.90% 1.98% 1.99% 2.09%
Ratio of net investment income/(loss) to average net
assets(d) (0.06)% 0.21% 0.45% 0.17% 0.16%
Portfolio turnover rate 63% 34% 26% 27% 13%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.17% 1.91% 1.98% 2.05% 2.09%
Ratio of net investment income/(loss) to average net
assets(d) (0.07)% 0.20% 0.45% 0.11% 0.16%
The AAL Equity Income Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $12.92 $14.59 $14.43 $14.70 $14.32
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income/(loss) 0.18 0.21 0.27 0.31 0.21
Net realized and unrealized gain/(loss) on investments(b) (2.73) (1.64) 0.93 (0.35) 1.19
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (2.55) (1.43) 1.20 (0.04) 1.40
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.15) (0.19) (0.27) (0.23) (0.23)
Net realized gain on investments -- (0.05) (0.77) -- (0.79)
Return of capital (0.02) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total Distributions (0.17) (0.24) (1.04) (0.23) (1.02)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.20 $12.92 $14.59 $14.43 $14.70
---------- ---------- ---------- ---------- ----------
Total return(c) (19.70)% (9.83)% 8.64% (0.29)% 10.62%
Net assets, end of period (in millions) $9.8 $9.1 $9.5 $6.2 $13.2
Ratio of expenses to average net assets(d) 0.51% 0.50% 0.51% 0.46% 0.60%
Ratio of net investment income/(loss) to average net
assets(d) 1.59% 1.61% 1.94% 1.71% 1.65%
Portfolio turnover rate 63% 34% 26% 27% 13%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 0.52% 0.51% 0.51% 0.52% 0.60%
Ratio of net investment income/(loss) to average net
assets(d) 1.58% 1.60% 1.94% 1.65% 1.65%
The AAL Balanced Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.52 $12.41 $12.41 $12.15 $10.81
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.19 0.26 0.38 0.32 0.21
Net realized and unrealized gain/(loss) on investments(b) (0.76) (0.88) -- 0.25 1.34
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (0.57) (0.62) 0.38 0.57 1.55
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.20) (0.27) (0.38) (0.31) (0.20)
Net realized gain on investments -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.20) (0.27) (0.38) (0.31) (0.21)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.75 $11.52 $12.41 $12.41 $12.15
---------- ---------- ---------- ---------- ----------
Total return(c) (4.90)% (5.02)% 3.10% 4.78% 14.45%
Net assets, end of period (in millions) $260.8 $305.6 $291.7 $256.1 $158.3
Ratio of expenses to average net assets(d) 1.05% 0.99% 0.98% 1.09% 1.15%
Ratio of net investment income to average net assets(d) 1.77% 2.19% 3.07% 2.76% 2.26%
Portfolio turnover rate 69% 76% 83% 65% 213%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.07% 1.02% 1.02% 1.14% 1.23%
Ratio of net investment income to average net assets(d) 1.75% 2.16% 3.03% 2.72% 2.17%
The AAL Balanced Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.47 $12.35 $12.35 $12.10 $10.79
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.11 0.15 0.26 0.21 0.14
Net realized and unrealized gain/(loss) on investments(b) (0.76) (0.87) -- 0.24 1.31
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (0.65) (0.72) 0.26 0.45 1.45
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.12) (0.16) (0.26) (0.20) (0.13)
Net realized gain on investments -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.12) (0.16) (0.26) (0.20) (0.14)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.70 $11.47 $12.35 $12.35 $12.10
---------- ---------- ---------- ---------- ----------
Total return(c) (5.68)% (5.83)% 2.13% 3.74% 13.47%
Net assets, end of period (in millions) $19.3 $22.3 $21.1 $18.2 $11.9
Ratio of expenses to average net assets(d) 1.84% 1.89% 1.94% 2.03% 1.98%
Ratio of net investment income to average net assets(d) 0.97% 1.29% 2.11% 1.82% 1.42%
Portfolio turnover rate 60% 76% 83% 65% 213%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.86% 1.92% 1.98% 2.08% 2.18%
Ratio of net investment income to average net assets(d) 0.95% 1.26% 2.07% 1.77% 1.22%
The AAL Balanced Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.51 $12.39 $12.40 $12.13 $10.79
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.21 0.30 0.42 0.39 0.23
Net realized and unrealized gain/(loss) on investments(b) (0.73) (0.86) -- 0.25 1.35
---------- ---------- ---------- ---------- ----------
Total from Investment Operations (0.52) (0.56) 0.42 0.64 1.58
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.25) (0.32) (0.43) (0.37) (0.23)
Net realized gain on investments -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.25) (0.32) (0.43) (0.37) (0.24)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.74 $11.51 $12.39 $12.40 $12.13
---------- ---------- ---------- ---------- ----------
Total return(c) (4.45)% (4.65)% 3.50% 5.33% 14.73%
Net assets, end of period (in millions) $107.8 $3.7 $3.4 $3.0 $2.3
Ratio of expenses to average net assets(d) 0.56% 0.58% 0.59% 0.60% 0.88%
Ratio of net investment income to average net assets(d) 2.26% 2.60% 3.46% 3.25% 2.50%
Portfolio turnover rate 69% 76% 83% 65% 213%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 0.57% 0.62% 0.63% 0.64% 0.88%
Ratio of net investment income to average net assets(d) 2.25% 2.56% 3.43% 3.20% 2.50%
(a) All per share amounts have been rounded to the nearest cent.
(b) The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of fund shares.
(c) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not annualized for periods less than one year.
(d) Computed on an annualized basis for periods less than one year.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL High Yield Bond Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.19 $6.76 $7.44 $8.92 $10.31
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.50 0.54 0.63 0.87 0.91
Net realized and unrealized gain/(loss) on investments(b) 0.08 (0.56) (0.68) (1.48) (1.33)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.58 (0.02) (0.05) (0.61) (0.42)
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.50) (0.55) (0.63) (0.87) (0.91)
Net realized gain on investments -- -- -- -- (0.06)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.50) (0.55) (0.63) (0.87) (0.97)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $6.27 $6.19 $6.76 $7.44 $8.92
---------- ---------- ---------- ---------- ----------
Total return(c) 10.59% (0.26)% (0.81)% (7.00)% (3.96)%
Net assets, end of period (in millions) $117.4 $118.6 $121.0 $134.3 $131.9
Ratio of expenses to average net assets(d) 0.93% 1.00% 1.00% 0.96% 1.00%
Ratio of net investment income to average net assets(d) 8.72% 8.41% 9.06% 10.54% 9.81%
Portfolio turnover rate 103% 72% 106% 54% 55%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 1.03% 1.17% 1.08% 1.12% 1.16%
Ratio of net investment income to average net assets(d) 8.62% 8.24% 8.98% 10.38% 9.64%
The AAL High Yield Bond Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.19 $6.76 $7.44 $8.92 $10.31
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.45 0.49 0.58 0.81 0.84
Net realized and unrealized gain/(loss) on investments(b) 0.08 (0.56) (0.68) (1.48) (1.33)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.53 (0.07) (0.10) (0.67) (0.49)
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.45) (0.50) (0.58) (0.81) (0.84)
Net realized gain on investments -- -- -- -- (0.06)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.45) (0.50) (0.58) (0.81) (0.90)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $6.27 $6.19 $6.76 $7.44 $8.92
---------- ---------- ---------- ---------- ----------
Total return(c) 9.61% (1.02)% (1.53)% (7.65)% (4.62)%
Net assets, end of period (in millions) $6.0 $8.2 $9.7 $11.6 $12.4
Ratio of expenses to average net assets(d) 1.84% 1.74% 1.73% 1.62% 1.71%
Ratio of net investment income to average net assets(d) 7.81% 7.67% 8.33% 9.88% 9.09%
Portfolio turnover rate 103% 72% 106% 54% 55%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 2.01% 1.93% 1.99% 1.97% 1.98%
Ratio of net investment income to average net assets(d) 7.64% 7.48% 8.08% 9.53% 8.82%
The AAL High Yield Bond Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.19 $6.76 $7.43 $8.91 $10.31
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.51 0.56 0.65 0.89 0.93
Net realized and unrealized gain/(loss) on investments(b) 0.09 (0.57) (0.67) (1.48) (1.34)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.60 (0.01) (0.02) (0.59) (0.41)
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.52) (0.56) (0.65) (0.89) (0.93)
Net realized gain on investments -- -- -- -- (0.06)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.52) (0.56) (0.65) (0.89) (0.99)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $6.27 $6.19 $6.76 $7.43 $8.91
---------- ---------- ---------- ---------- ----------
Total return(c) 10.88% 0.05% (0.34)% (6.67)% (3.85)%
Net assets, end of period (in millions) $3.3 $2.7 $2.2 $2.0 $2.2
Ratio of expenses to average net assets(d) 0.67% 0.68% 0.67% 0.53% 0.76%
Ratio of net investment income to average net assets(d) 8.98% 8.73% 9.34% 11.00% 10.34%
Portfolio turnover rate 103% 72% 106% 54% 55%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly or
credits for directed brokerage transactions the ratios
would have been:
Ratio of expenses to average net assets(d) 0.67% 0.68% 0.67% 0.62% 0.76%
Ratio of net investment income to average net assets(d) 8.98% 8.73% 9.34% 10.92% 10.34%
Portfolio turnover rate 18% 65% 110% 210% 95%
The AAL Municipal Bond Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.21 $10.96 $10.45 $11.47 $11.40
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.50 0.54 0.55 0.53 0.52
Net realized and unrealized gain/(loss) on investments(b) 0.31 0.25 0.51 (1.01) 0.25
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.81 0.79 1.06 (0.48) 0.77
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.50) (0.54) (0.55) (0.53) (0.52)
Net realized gain on investments -- -- -- (0.01) (0.18)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.50) (0.54) (0.55) (0.54) (0.70)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.52 $11.21 $10.96 $10.45 $11.47
---------- ---------- ---------- ---------- ----------
Total return(c) 7.38% 7.27% 10.34% (4.09)% 6.80%
Net assets, end of period (in millions) $671.6 $598.6 $503.7 $461.3 $523.1
Ratio of expenses to average net assets(d) 0.79% 0.77% 0.73% 0.78% 0.81%
Ratio of net investment income to average net assets(d) 4.41% 4.77% 5.06% 4.98% 4.47%
Portfolio turnover rate 18% 65% 110% 210% 95%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(d) 0.79% 0.82% 0.81% 0.84% 0.81%
Ratio of net investment income to average net assets(d) 4.41% 4.72% 4.98% 4.93% 4.47%
The AAL Municipal Bond Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.20 $10.95 $10.44 $11.47 $11.40
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.42 0.44 0.46 0.44 0.42
Net realized and unrealized gain/(loss) on investments(b) 0.32 0.25 0.51 (1.02) 0.25
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.74 0.69 0.97 (0.58) 0.67
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.42) (0.44) (0.46) (0.44) (0.42)
Net realized gain on investments -- -- -- (0.01) (0.18)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.42) (0.44) (0.46) (0.45) (0.60)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.52 $11.20 $10.95 $10.44 $11.47
---------- ---------- ---------- ---------- ----------
Total return(c) 6.65% 6.40% 9.39% (4.99)% 5.93%
Net assets, end of period (in millions) $12.3 $11.0 $8.5 $7.3 $7.5
Ratio of expenses to average net assets(d) 1.56% 1.57% 1.61% 1.59% 1.64%
Ratio of net investment income to average net assets(d) 3.64% 3.97% 4.18% 4.19% 3.65%
Portfolio turnover rate 18% 65% 110% 210% 95%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(d) 1.56% 1.62% 1.69% 1.64% 1.64%
Ratio of net investment income to average net assets(d) 3.64% 3.92% 4.10% 4.14% 3.65%
The AAL Municipal Bond Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.20 $10.95 $10.45 $11.47 $11.40
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.54 0.57 0.58 0.57 0.55
Net realized and unrealized gain/(loss) on investments(b) 0.32 0.25 0.50 (1.01) 0.25
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.86 0.82 1.08 (0.44) 0.80
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.54) (0.57) (0.58) (0.57) (0.55)
Net realized gain on investments -- -- -- (0.01) (0.18)
---------- ---------- ---------- ---------- ----------
Total Distributions (0.54) (0.57) (0.58) (0.58) (0.73)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.52 $11.20 $10.95 $10.45 $11.47
---------- ---------- ---------- ---------- ----------
Total return(c) 7.81% 7.61% 10.56% (3.78)% 7.09%
Net assets, end of period (in millions) $3.4 $5.3 $2.5 $0.5 $0.6
Ratio of expenses to average net assets(d) 0.48% 0.46% 0.42% 0.47% 0.51%
Ratio of net investment income to average net assets(d) 4.72% 5.08% 5.37% 5.32% 4.78%
Portfolio turnover rate 18% 65% 110% 210% 95%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(d) 0.48% 0.51% 0.50% 0.52% 0.51%
Ratio of net investment income to average net assets(d) 4.72% 5.03% 5.29% 5.27% 4.78%
(a) All per share amounts have been rounded to the nearest cent.
(b) The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of fund shares.
(c) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not annualized for periods less than one year.
(d) Computed on an annualized basis for periods less than one year.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Bond Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $9.82 $9.80 $9.32 $9.92 $9.99
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.42 0.56 0.61 0.58 0.53
Net realized and unrealized gain/(loss) on investments(b) 0.52 0.02 0.48 (0.60) (0.07)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.94 0.58 1.09 (0.02) 0.46
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.45) (0.56) (0.61) (0.58) (0.53)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.31 $9.82 $9.80 $9.32 $9.92
---------- ---------- ---------- ---------- ----------
Total return(c) 9.79% 6.01% 12.08% (0.11)% 4.61%
Net assets, end of period (in millions) $526.5 $451.5 $353.5 $321.7 $367.2
Ratio of expenses to average net assets(d) 0.85% 0.81% 0.81% 0.83% 0.93%
Ratio of net investment income to average net assets(d) 4.19% 5.54% 6.38% 6.12% 5.23%
Portfolio turnover rate 149% 160% 172% 163% 573%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(d) 0.86% 0.88% 0.91% 0.91% 0.93%
Ratio of net investment income to average net assets(d) 4.18% 5.47% 6.27% 6.04% 5.23%
The AAL Bond Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $9.82 $9.80 $9.32 $9.92 $9.99
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.33 0.47 0.52 0.49 0.43
Net realized and unrealized gain/(loss) on investments(b) 0.53 0.02 0.48 (0.60) (0.07)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.86 0.49 1.00 (0.11) 0.36
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.36) (0.47) (0.52) (0.49) (0.43)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.32 $9.82 $9.80 $9.32 $9.92
---------- ---------- ---------- ---------- ----------
Total return(c) 8.91% 5.03% 11.04% (1.09)% 3.60%
Net assets, end of period (in millions) $13.2 $7.9 $4.6 $3.6 $3.1
Ratio of expenses to average net assets(d) 1.77% 1.73% 1.73% 1.80% 1.90%
Ratio of net investment income to average net assets(d) 3.28% 4.64% 5.45% 5.17% 4.28%
Portfolio turnover rate 149% 160% 172% 163% 573%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(d) 1.78% 1.80% 1.83% 1.88% 1.90%
Ratio of net investment income to average net assets(d) 3.27% 4.57% 5.35% 5.09% 4.28%
The AAL Bond Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $9.82 $9.80 $9.32 $9.92 $9.99
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.46 0.60 0.66 0.62 0.57
Net realized and unrealized gain/(loss) on investments(b) 0.52 0.02 0.48 (0.60) (0.07)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.98 0.62 1.14 0.02 0.50
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.49) (0.60) (0.66) (0.62) (0.57)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.31 $9.82 $9.80 $9.32 $9.92
---------- ---------- ---------- ---------- ----------
Total return(c) 10.20% 6.42% 12.55% 0.30% 5.02%
Net assets, end of period (in millions) $29.2 $22.9 $55.6 $47.9 $44.7
Ratio of expenses to average net assets(d) 0.47% 0.39% 0.39% 0.43% 0.54%
Ratio of net investment income to average net assets(d) 4.57% 5.93% 6.79% 6.55% 5.63%
Portfolio turnover rate 149% 160% 172% 163% 573%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(d) 0.48% 0.46% 0.49% 0.50% 0.54%
Ratio of net investment income to average net assets(d) 4.56% 5.86% 6.69% 6.47% 5.63%
The AAL Bond Index Fund
Institutional Shares
- ------------------------------------------------------------------------------------------------------------------
Year Year Year Period
Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000(e)
- ------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.48 $10.47 $9.95 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations:
Net investment income 0.50 0.59 0.69 0.22
Net realized and unrealized gain/(loss) on investments(b) 0.56 0.16 0.52 (0.05)
---------- ---------- ---------- ----------
Total from Investment Operations 1.06 0.75 1.21 0.17
---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.58) (0.64) (0.69) (0.22)
Net realized gain on investments -- (0.10) -- --
---------- ---------- ---------- ----------
Total Distributions (0.58) (0.74) (0.69) (0.22)
---------- ---------- ---------- ----------
Net Asset Value, End of period $10.96 $10.48 $10.47 $9.95
---------- ---------- ---------- ----------
Total return(c) 10.35% 7.36% 12.50% 1.72%
Net assets, end of period (in millions) $81.0 $58.9 $18.6 $11.1
Ratio of expenses to average net assets(d) 0.23% 0.20% 0.20% 0.20%
Ratio of net investment income to average net assets(d) 4.65% 5.47% 6.66% 6.85%
Portfolio turnover rate 90% 92% 51% 52%
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(d) 0.31% 0.53% 0.98% 1.04%
Ratio of net investment income to average net assets(d) 4.57% 5.14% 5.88% 6.02%
(a) All per share amounts have been rounded to the nearest cent.
(b) The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to the timing of sales and redemptions of fund shares.
(c) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not annualized for periods less than one year.
(d) Computed on an annualized basis for periods less than one year.
(e) Since Fund inception, December 31, 1999.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Mutual Funds
Financial Highlights - continued
The AAL Money Market Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
---------- ---------- ---------- ---------- ----------
Net investment income 0.01 0.02 0.05 0.05 0.05
---------- ---------- ---------- ---------- ----------
Less Distributions from:
---------- ---------- ---------- ---------- ----------
Net investment income (0.01) (0.02) (0.05) (0.05) (0.05)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Total return(b) 0.88% 2.28% 5.70% 4.99% 4.68%
Net assets, end of period (in millions) $349.6 $399.8 $423.9 $348.0 $288.1
Ratio of expenses to average net assets(c) 0.77% 0.72% 0.76% 0.66% 0.79%
Ratio of net investment income to average net assets(c) 0.89% 2.19% 5.51% 4.90% 4.54%
Portfolio turnover rate N/A N/A N/A N/A N/A
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(c) 0.92% 0.90% 0.99% 1.02% 1.12%
Ratio of net investment income to average net assets(c) 0.74% 2.01% 5.28% 4.54% 4.22%
The AAL Money Market Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
---------- ---------- ---------- ---------- ----------
Net investment income -- 0.01 0.04 0.04 0.04
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income -- (0.01) (0.04) (0.04) (0.04)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Total return(b) 0.42% 1.34% 4.67% 3.94% 3.67%
Net assets, end of period (in millions) $2.8 $2.8 $3.3 $2.4 $1.6
Ratio of expenses to average net assets(c) 1.38% 1.52% 1.81% 1.65% 2.79%
Ratio of net investment income to average net assets(c) 0.27% 1.39% 4.45% 3.95% 2.54%
Portfolio turnover rate N/A N/A N/A N/A N/A
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(c) 1.62% 1.70% 2.04% 2.00% 3.11%
Ratio of net investment income to average net assets(c) 0.03% 1.21% 4.22% 3.59% 2.22%
The AAL Money Market Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
For a share outstanding throughout each period(a) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
---------- ---------- ---------- ---------- ----------
Net investment income 0.01 0.03 0.06 0.05 0.05
---------- ---------- ---------- ---------- ----------
Less Distributions from:
Net investment income (0.01) (0.03) (0.06) (0.05) (0.05)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Total return(b) 1.17% 2.54% 6.07% 5.36% 4.99%
Net assets, end of period (in millions) $91.4 $117.8 $25.3 $12.8 $17.9
Ratio of expenses to average net assets(c) 0.48% 0.46% 0.43% 0.31% 0.49%
Ratio of net investment income to average net assets(c) 1.18% 2.45% 5.86% 5.18% 4.76%
Portfolio turnover rate N/A N/A N/A N/A N/A
If the adviser had not reimbursed expenses and the Fund
had not received credits for fees paid indirectly the
ratios would have been:
Ratio of expenses to average net assets(c) 0.53% 0.54% 0.56% 0.57% 0.72%
Ratio of net investment income to average net assets(c) 1.13% 2.37% 5.73% 4.92% 4.53%
(a) All per share amounts have been rounded to the nearest cent.
(b) Total investment return assumes dividend reinvestment.
(c) Computed on an annualized basis for periods less than one year.
The accompanying notes to the financial statements are an integral part of this schedule.
Board of Trustees and Executive Officers
The Board of Trustees is responsible for the management and supervision of the Funds' business affairs and for exercising all powers except those reserved to the shareholders. Each Trustee also serves as a Director of AAL Variable Product Series Fund, Inc., a registered investment company consisting of 14 Portfolios that serve as the underlying funds for variable contracts issued by Thrivent Financial for Lutherans ("Thrivent Financial") and Lutheran Brotherhood Variable Products Insurance Company ("LBVIP").
Also, in addition to serving as a Trustee of The AAL Mutual Funds and a Director of AAL Variable Product Series Fund, Inc., Mr. Gilbert serves as a Trustee of The Lutheran Brotherhood Family of Funds (a registered investment company consisting of 11 Funds, which offer Class A, Class B and Institutional Class shares) and as a Director of LB Series Fund, Inc. (a registered investment company consisting of 14 Portfolios that serve as the underlying funds for variable annuity contracts issued by Thrivent Financial and LBVIP).
Unless otherwise indicated, the business address of each Trustee and officer is 625 Fourth Avenue South, Minneapolis, Minnesota 55415.
Interested Trustees*
Position with the Fund, Principal
Length of Service and Occupation During Other Directorships
Name, Address and Age Term of Office** the Past 5 Years Held by Director
- ------------------------------------------------------------------------------------------------------------------
John O. Gilbert Chairman and Trustee Chairman, Thrivent Financial Chairman of the Life Office
Age 60 since 1999 for Lutherans Management Association
(LOMA) board of directors;
member of the board of
regents for Luther College
in Decorah, Iowa; member
of the board for Fox PAC--
Performing Arts Center in
Appleton, Wisconsin;
Trustee, Luther Seminary
Foundation
Lawrence W. Stranghoener Trustee since 2002 Executive Vice President and St. Paul Chamber Orchestra
Age 48 Chief Financial Officer, Board; Metropolitan
Thrivent Financial for Economic Development
Lutherans; previously, Association; Director,
Executive Vice President and Kennametal, Inc.
Chief Financial Officer,
Techies.com in 2000;
Vice President and Chief
Financial Officer, Honeywell
Inc. from 1983 to 1999
Disinterested Trustees
Position with the Fund, Principal
Length of Service and Occupation During Other Directorships
Name, Address and Age Term of Office** the Past 5 Years Held by Director
- ------------------------------------------------------------------------------------------------------------------
F. Gregory Campbell Trustee since 1992 President, Carthage College ELCA University and
Age 63 College Employees' Health
Benefit Board; ELCA Risk
Management Board;
Johnson Family Mutual
Funds Board; Kenosha Area
Business Alliance Board;
Kenosha Hospital and
Medical Center Board;
Prairie School Board; United
Health Systems Board
Richard L. Gady Trustee since 1987 Vice President, Public Affairs International Agricultural
Age 60 and Chief Economist, Marketing Association
Conagra, Inc. (agribusiness) Board
Edward W. Smeds Trustee since 1999 Retired Chairman of Carthage
Age 67 College Board; Board of
Governors, Club of
Pelican Bay
Executive Officers
Position with the Fund,
Length of Service and
Name, Address and Age Term of Office*** Principal Occupation During the Past 5 Years
- ------------------------------------------------------------------------------------------------------------------
Pamela J. Moret President since 2002 Senior Vice President, Marketing and Products, Thrivent
Age 47 Financial for Lutherans since 2002; previously, Senior Vice
President, Products, American Express Financial Advisors
Charles D. Gariboldi Treasurer since 1999 Vice President, Investment Accounting, Thrivent Financial
Age 43 for Lutherans
James H.Abitz Vice President since 1999 Senior Vice President, Investments, Thrivent Financial
Age 57 for Lutherans
Karl D. Anderson Vice President since 2003 Head of Investment Product Solutions Management, Thrivent
Age 41 Financial for Lutherans
Frederick P. Johnson Vice President since 2003 Vice President, Investment Operations, Thrivent Financial
Age 40 for Lutherans
Brenda J. Pederson Vice President since 2003 Vice President, Member Support and Mutual Fund Operations,
Age 42 Thrivent Financial for Lutherans
Brett L. Agnew Secretary since 2001 Senior Counsel, Thrivent Financial for Lutherans
Age 32
John C. Bjork Assistant Secretary Senior Counsel, Thrivent Financial for Lutherans
Age 49 since 2003
James E. Nelson Assistant Secretary Vice President, Securities Law, Thrivent Financial for
Age 42 since 2003 Lutherans since 2002; previously, Counsel and head of
Insurance Practice Group, Law Division of ING ReliaStar
(formerly ReliaStar Financial Corp.)
Marlene J. Nogle Assistant Secretary Senior Counsel, Thrivent Financial for Lutherans
Age 55 since 2003
Todd J. Kelly Assistant Treasurer Head of Fund Accounting Operations, Thrivent Financial
222 West College Avenue since 1999 for Lutherans
Appleton, WI
Age 33
Gerard V. Vaillancourt Assistant Treasurer Head of Fund Accounting Administration, Thrivent
Age 35 since 2002 Financial for Lutherans; previously, Manager-Fund
Accounting, Minnesota Life from 2000 to 2001; Supervisor-
Securities Accounting, Lutheran Brotherhood from
1998 to 2000
* "Interested person" of the Fund as defined in the Investment Company Act of 1940 by virtue of positions with Thrivent Financial for Lutherans.
** Each Trustee serves an indefinite term until his successor is duly elected and qualified. The Fund's bylaws provide that each Trustee must retire at the end of the calendar year in which the Trustee attains age 70.
*** Officers serve at the discretion of the board until their successors are duly appointed and qualified.
We're Listening to You!
In response to shareholder concerns regarding multiple mailings, we are sending one shareholder report for The AAL Mutual Funds to each household. This consolidation helps reduce printing and postage costs, thereby saving shareholders' money. If you wish to receive an additional copy of this report, call us toll free at (800) 847-4836.
[GRAPHIC OMITTED: THRIVENT INVESTMENT MANAGEMENT TRADEMARK LOGO]
Annual Report
April 30, 2003
Prospectus
June 27, 2003
The AAL U.S. Government Zero
Coupon Target Fund, Series 2006
The AAL Mutual Funds
[GRAPHIC OMITTED: PHOTO OF PAMELA J. MORET]
Dear Member:
We are pleased to provide you with the annual report for the 12 months ended April 30, 2003, for The AAL U.S. Government Zero Coupon Target Fund, Series 2006, managed by Thrivent Investment Management.
After several challenging years, all the major investment categories have moved into positive territory for 2003 year-to-date. While it is far too early to know if the bear market has truly gone into hibernation, there is no question that the U.S. economy has shown some improvements of late. International tension has ebbed somewhat from the high anxiety environment seen earlier in the year, though global hotspots certainly remain. The economy continues to plow ahead with steady, if slow, growth, and consumer confidence has risen in recent months. While we are heartened by the improvements, volatility remains ever-present. Thus, now is a wonderful opportunity to review one's investment portfolio for proper balance, risk temperament, and overall strategy. I encourage you to contact your Thrivent Investment Management representative if you have any questions. He or she is there to help and would welcome the chance to do so.
Transition and change isn't limited solely to our nation's financial markets -- Thrivent Investment Management has recently adopted a new strategy for our mutual fund products. This new course not only renews our already strong commitment to our mutual funds, but we also expect it will enhance our ability to provide you with stronger product offerings, a wider variety of choices, and complementary investment options from select outside firms that share our values and integrity, as well as a commitment to excellent money management. We believe that implementation of this strategy will further enhance our ability to offer top-shelf investments and will strongly benefit our member investors. Be sure to ask your Thrivent Investment Management representative about the Lutheran Brotherhood Family of Funds which feature a wide assortment of asset classes that could complement your current portfolio.
The financier, Bernard Baruch, once said, "Now is always the hardest time to invest." His words ring particularly true in light of the host of difficulties around which the U.S. economy, financial markets, and investors have navigated over the past few years. I would also suggest that Mr. Baruch's quote could be tweaked to read, "Now is always the hardest time to stick to an investment strategy or plan." Despite much uncertainty and dramatic market fluctuations, history has shown time and time again that betting against the long-term strength and resilience of the U.S. economy and financial markets is an unwise wager. Be assured that Thrivent Investment Management is here to serve -- no matter how the markets are performing -- with trustworthy advice and financial solutions to help you meet your individual goals.
Yours Sincerely,
/S/ Pamela J. Moret
Pamela J. Moret
President
The AAL Mutual Funds
The AAL U.S. Government Zero Coupon
Target Fund, Series 2006
[GRAPHIC OMITTED: PHOTO OF ALAN D. ONSTAD]
The last twelve months were very good for the Fund. Comparable U.S. Treasury yields declined from 4.41% on April 30, 2002 to 2.23% by April 30, 2003. This significant decline in rates resulted in a total return for the Fund of 11.28%. A zero coupon security will do better than coupon-paying securities of the same maturity when rates are falling. Conversely, when rates are rising, zero coupon securities will provide returns lower than securities that make scheduled interest payments.
/S/ Alan D. Onstad
Alan D. Onstad
Portfolio Manager
[GRAPHIC WORM CHART OMITTED: $10,000 INVESTMENT]
$10,000 INVESTMENT
Including 4.75% Sales Charge
The AAL U.S. Government
Zero Coupon Target Fund, Lehman Aggregate Consumer Price
Date Series 2006 Bond Index* Index**
- -------------------------------------------------------------------------------
1993 10,000 10,000 10,000
1993 9,548 10,013 10,014
1993 10,045 10,194 10,028
1993 10,418 10,252 10,028
1993 10,849 10,432 10,056
1993 11,031 10,460 10,076
1993 11,078 10,499 10,118
1993 10,566 10,410 10,125
1993 10,709 10,466 10,125
1994 11,051 10,608 10,153
1994 10,351 10,423 10,188
1994 9,714 10,166 10,222
1994 9,539 10,085 10,236
1994 9,534 10,084 10,243
1994 9,368 10,062 10,278
1994 9,728 10,261 10,306
1994 9,654 10,274 10,347
1994 9,244 10,123 10,375
1994 9,167 10,114 10,382
1994 9,251 10,091 10,396
1994 9,468 10,161 10,396
1995 9,740 10,362 10,438
1995 10,138 10,609 10,479
1995 10,204 10,674 10,514
1995 10,406 10,823 10,549
1995 11,399 11,242 10,569
1995 11,551 11,324 10,590
1995 11,300 11,299 10,590
1995 11,561 11,435 10,618
1995 11,790 11,546 10,639
1995 12,133 11,697 10,674
1995 12,506 11,872 10,667
1995 13,039 12,038 10,660
1996 13,029 12,118 10,722
1996 12,315 11,908 10,757
1996 12,063 11,825 10,813
1996 11,805 11,758 10,854
1996 11,690 11,735 10,875
1996 11,957 11,892 10,882
1996 11,940 11,925 10,903
1996 11,780 11,905 10,924
1996 12,131 12,112 10,958
1996 12,655 12,380 10,993
1996 13,093 12,593 11,014
1996 12,751 12,475 11,014
1997 12,672 12,514 11,049
1997 12,642 12,545 11,083
1997 12,318 12,406 11,111
1997 12,627 12,591 11,125
1997 12,749 12,710 11,118
1997 12,951 12,861 11,132
1997 13,677 13,208 11,146
1997 13,295 13,095 11,167
1997 13,641 13,289 11,194
1997 14,043 13,481 11,222
1997 14,106 13,543 11,215
1997 14,328 13,680 11,201
1998 14,653 13,855 11,222
1998 14,549 13,845 11,243
1998 14,552 13,893 11,264
1998 14,581 13,965 11,285
1998 14,851 14,097 11,306
1998 15,057 14,217 11,319
1998 15,032 14,247 11,333
1998 15,688 14,479 11,347
1998 16,506 14,818 11,361
1998 16,481 14,740 11,389
1998 16,303 14,823 11,389
1998 16,420 14,868 11,382
1999 16,419 14,974 11,410
1999 15,716 14,713 11,424
1999 15,727 14,794 11,458
1999 15,773 14,841 11,542
1999 15,347 14,711 11,542
1999 15,190 14,664 11,542
1999 15,043 14,602 11,576
1999 14,969 14,594 11,604
1999 15,074 14,764 11,660
1999 15,017 14,818 11,681
1999 14,928 14,817 11,688
1999 14,731 14,746 11,688
2000 14,631 14,697 11,715
2000 14,742 14,875 11,785
2000 15,125 15,071 11,882
2000 15,086 15,028 11,889
2000 15,145 15,021 11,896
2000 15,596 15,334 11,965
2000 15,651 15,473 11,986
2000 15,923 15,697 12,000
2000 16,109 15,796 12,063
2000 16,182 15,900 12,083
2000 16,624 16,161 12,090
2000 17,056 16,460 12,083
2001 17,257 16,729 12,160
2001 17,502 16,875 12,208
2001 17,697 16,960 12,236
2001 17,426 16,889 12,285
2001 17,354 16,991 12,340
2001 17,427 17,056 12,361
2001 17,922 17,437 12,326
2001 18,112 17,637 12,326
2001 18,645 17,842 12,382
2001 18,988 18,216 12,340
2001 18,589 17,964 12,319
2001 18,355 17,850 12,271
2002 18,399 17,995 12,299
2002 18,631 18,169 12,347
2002 18,154 17,867 12,417
2002 18,569 18,213 12,486
2002 18,783 18,368 12,486
2002 19,082 18,527 12,493
2002 19,631 18,751 12,507
2002 19,924 19,067 12,549
2002 20,487 19,376 12,569
2002 20,360 19,287 12,601
2002 20,024 19,282 12,601
2002 20,523 19,680 12,573
2003 20,365 19,698 12,629
2003 20,644 19,970 12,726
2003 20,611 19,954 12,802
2003 $20,799 $20,119 $12,775
The Fund seeks high, relatively predictable investment returns from U.S. government securities over selected periods of time, assuming investors reinvest the dividends and capital gains distributed by the Fund.
Average Annual Total Returns***
For the Period Ended April 30, 2003 1-Year 5-Year 10-Year
- --------------------------------------------------------------------------
without sales charge 11.28% 7.73% 8.12%
with sales charge 5.97% 6.69% 7.60%
Footnotes read:
* An unmanaged index that encompasses five major classes of U.S.
fixed-income securities: U.S. Treasury and Government Agency
securities, corporate debt obligations, mortgage-backed securities,
asset-backed securities and commercial mortgage backed securities.
It is not possible to invest directly in the Index.
** The Consumer Price Index is an inflationary indicator that measures
the change in the cost of a fixed basket of products and services,
including housing, electricity, food and transportation.
*** Past performance is not an indication of future results. Total returns
represent past performance and reflect changes in share prices, the
reinvestment of all dividends and capital gains, and the effects of
compounding. Investment return and principal value will fluctuate,
and shares, when redeemed, may be worth more or less than their
original costs.
Report of Independent Accountants
[LOGO OMITTED]
PricewaterhouseCoopers LLP
Suite 1500
100 E. Wisconsin Ave.
Milwaukee WI 53202
Telephone (414) 212 1600
To the Shareholders and Trustees of The AAL Mutual Funds
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The AAL U.S Government Zero Coupon Target Fund, Series 2006 (one of the portfolios constituting The AAL Mutual Funds, hereafter referred to as the "Fund") at April 30, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at April 30, 2003 by correspondence with the custodian, provides a reasonable basis for our opinion.
/S/ PricewaterhouseCoopers LLP
June 6, 2003
Schedule of Investments
As of April 30, 2003
The AAL U.S. Government Zero Coupon Target Fund, Series 2006(a)
- -----------------------------------------------------------------------------------------------------------
Principal Yield to Maturity Market
Amount Long-Term Obligations (100.0%) Maturity Date Value
- -----------------------------------------------------------------------------------------------------------
U.S. Zero Coupon (100.0%)
$1,733,000 U.S. Government Zero Coupon Bonds 2.300% 11/15/2006 $1,597,148
- -----------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.0%)
(amortized cost basis $1,310,769) $1,597,148
--------------------------------------------------------------
(a) The categories of investments are shown as a percentage of total investments.
The accompanying notes to the financial statements are an integral part of this schedule.
Statement of Assets and Liabilities
As of April 30, 2003
The AAL U.S. Government Zero Coupon Target Fund, Series 2006
- ---------------------------------------------------------------------------------------------
Assets
Investments at cost $1,310,769
Investments at value 1,597,148
Cash 15,055
Receivable for fund shares sold 957
Receivable from affiliate 2,261
- ---------------------------------------------------------------------------------------------
Total Assets 1,615,421
=============================================================================================
Liabilities
Income distributions payable 30,549
Accrued expenses 5,762
- ---------------------------------------------------------------------------------------------
Total Liabilities 36,311
=============================================================================================
Net Assets
Trust Capital (beneficial interest) 1,269,277
Accumulated undistributed net investment income 805
Accumulated undistributed net realized gain on investments 22,649
Net unrealized appreciation on investments 286,379
- ---------------------------------------------------------------------------------------------
Total Net Assets $1,579,110
=============================================================================================
Net Assets $1,579,110
Shares of beneficial interest outstanding 124,982
Net asset value per share $12.63
Maximum public offering price $13.26
The accompanying notes to the financial statements are an integral part of this statement.
Statement of Operations
For the Year Ended April 30, 2003
The AAL U.S. Government Zero Coupon Target Fund, Series 2006
- ---------------------------------------------------------------------------------------------
Investment Income
Taxable interest $106,794
- ---------------------------------------------------------------------------------------------
Total Investment Income 106,794
=============================================================================================
Expenses
Administrative service and pricing fees 909
Audit fees 14,859
Legal fees 498
Custody fees 281
Printing and postage expense 175
SEC and state registration expense 5,317
Transfer agent fees 2,028
Other expenses 842
- ---------------------------------------------------------------------------------------------
Total Expenses Before Reimbursement 24,909
- ---------------------------------------------------------------------------------------------
Less:
Reimbursement from adviser (10,329)
Fees paid indirectly (32)
- ---------------------------------------------------------------------------------------------
Total Net Expenses 14,548
=============================================================================================
Net Investment Income 92,246
=============================================================================================
Realized and Unrealized Gains on Investments
Net realized gains on investments 29,962
Change in net unrealized appreciation on investments 51,190
- ---------------------------------------------------------------------------------------------
Net Realized and Unrealized Gains on Investments 81,152
=============================================================================================
Net Increase in Net Assets Resulting From Operations $173,398
=============================================================================================
The accompanying notes to the financial statements are an integral part of this statement.
Statement of Changes in Net Assets As of April 30, 2003
The AAL U.S. Government Zero Coupon Target Fund, Series 2006
Year Ended Year Ended
4/30/2003 4/30/2002
- ---------------------------------------------------------------------------------------------
Operations
Net investment income $92,246 $92,624
Net realized gains on investments 29,962 24,022
Change in net unrealized appreciation/depreciation
on investments 51,190 (15,373)
- ---------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Operations 173,398 101,273
=============================================================================================
Distributions to Shareholders
From net investment income (92,246) (92,624)
From net realized gains (21,496) (15,541)
- ---------------------------------------------------------------------------------------------
Total Distributions to Shareholders (113,742) (108,165)
=============================================================================================
Trust Share Transactions
Income dividends reinvested 89,767 91,650
Capital gains distributions reinvested 21,325 15,418
Redemption of trust shares (156,671) (147,316)
- ---------------------------------------------------------------------------------------------
Net Decrease in Trust Capital (45,579) (40,248)
=============================================================================================
Net Increase/(Decrease) in Net Assets 14,077 (47,140)
=============================================================================================
Net Assets Beginning of Period 1,565,033 1,612,173
=============================================================================================
Net Assets End of Period $1,579,110 $1,565,033
=============================================================================================
Notes to Financial Statements
As of April 30, 2003
The AAL U.S. Government Zero Coupon Target Fund, Series 2006
A. Organization
The AAL Mutual Funds (the "Trust") was organized as a Massachusetts Business Trust on March 31, 1987 and is registered as an open-end management investment company under the Investment Company Act of 1940. The Trust commenced operations on July 16, 1987, and currently consists of fourteen equity Funds, five fixed-income Funds and a money market Fund. The 20 Funds are collectively referred to as the "Funds."
On November 14 ,1990, The AAL U.S. Government Zero Coupon Target Fund, Series 2006 (the "Fund"), commenced operations. Effective June 1, 1993, the Board of Trustees of The AAL Mutual Funds closed the Fund to new shareholders and the additional purchases of shares by existing shareholders.
B. Significant Accounting Policies
Valuation -- Securities traded on national securities exchanges are valued at the last reported sales prices. All other securities are valued at official closing price if such quotations are readily available. Otherwise, such securities are valued at a fair value as determined in good faith by the Adviser under supervision of the Board of Trustees.
Federal Income Taxes -- The Fund intends to comply with the requirements of the Internal Revenue Code which are applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. The Fund accordingly anticipates paying no Federal income taxes and no Federal income tax provision was required.
Fees Paid Indirectly -- The Fund has a deposit arrangement with the custodian whereby interest earned on uninvested cash balances is used to pay a portion of custodian fees. This deposit arrangement is an alternative to overnight investments.
Distribution to Shareholders -- Net investment income is distributed to each shareholder as a dividend. Dividends from the Fund are declared daily and distributed annually. Net realized gains from securities transactions, if any, are distributed at least annually in the calendar year.
Use of Estimates -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from these estimates.
Other -- For financial statement purposes, investment security transactions are accounted for on the trade date. Interest income is recognized on an accrual basis. Bond discount is amortized over the life of the respective bonds on the interest method. Realized gains or losses on sales are determined on a specific cost identification basis. Generally accepted accounting principles require permanent financial reporting and tax differences be reclassified to trust capital. The reclassifications made at April 30, 2003 were a decrease of $470 to accumulated undistributed net realized gain on investments and an increase of $470 to trust capital.
C. Investment Advisory Management Fees and Transactions with Related Parties
The Trust has entered into an Investment Advisory Agreement with Thrivent Investment Management Inc. (the "Adviser") under which the Fund pays a fee for investment advisory services. The annual rate of fees under the Investment Advisory Agreement are calculated at 0.50 of 1% of the average daily net assets of the Fund. Payments under the Investment Advisory Agreement were discontinued effective July 1, 1993.
The Trust has adopted a distribution plan (the "Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. The Plan authorizes the Trust to use a portion of its assets to finance certain sales activities relating to the distribution of shares to investors. Payments under the Plan are equal to a maximum of 0.10 of 1% of average daily net assets. Payments under the Plan were discontinued effective July 1, 1993.
Each Trustee who is not affiliated with Thrivent Financial for Lutherans or the Adviser receives an annual fee from the Fund for services as a Trustee and is eligible to participate in a deferred compensation plan with respect to these fees. Each participant's deferred compensation account will increase or decrease as if it were invested in shares of the Funds of their choice.
Trustees not participating in the above plan received $49 in fees for the year ended April 30, 2003, from the Fund. No remuneration has been paid by the Trust to any of the officers or affiliated Trustees of the Trust. In addition, the Trust reimbursed unaffiliated Trustees for reasonable expenses incurred in relation to attendance at the meetings.
The Fund is charged for those expenses that are directly attributable to it, such as advisory, custodian and certain shareholder service fees, while other expenses that cannot be directly attributable to the Fund are allocated among The AAL Mutual Funds in proportion to the net assets, number of shareholder accounts, or other reasonable basis of the respective Fund.
The Adviser has voluntarily reimbursed the Fund for all expenses in excess of 1% of average daily net assets since inception.
Thrivent Financial for Lutherans is the ultimate parent company for Thrivent Investment Management Inc.
D. Security Transactions
During the years ended April 30, 2003, there were no purchases and $179,412 in sales. All sales were in U.S. Government obligations.
E. Federal Income Tax Information
The cost basis of the investments is the same for financial reporting purposes and Federal income tax purposes. The net unrealized appreciation on investments at April 30, 2003 was $286,379. There was no depreciation on investments as of April 30, 2003.
During the years ended April 30, 2003 and April 30, 2002, The AAL U.S. Government Zero Coupon Target Fund, Series 2006 distributed $92,246 and $92,624 from ordinary income, and $21,496 and $15,541 from long-term capital gains, respectively.
At April 30, 2003, undistributed ordinary income and long-term capital gains for tax purposes were $2,764 and $22,649, respectively.
Shareholder Notification of Federal Tax Status
During the year ended April 30, 2003, The AAL U.S. Government Zero Coupon Target Fund, Series 2006 designates $21,496 as long-term capital gains.
F. Trust Transactions
Transactions in trust shares for the years ended April 30, 2003 and 2002 were as follows:
4/30/2003 4/30/2002
--------- ---------
Income dividends reinvested 7,025 7,473
Capital gains reinvested 1,713 1,270
Shares redeemed (12,316) (12,088)
-------- --------
Net Decrease of Trust Shares (3,578) (3,345)
======== ========
Financial Highlights
Per Share Information (a)
The AAL U.S. Government Zero Coupon Target Fund, Series 2006
Year Year Year Year Year
Ended Ended Ended Ended Ended
4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $12.17 $12.22 $11.27 $12.39 $12.13
Income from Investment Operations
Net investment income 0.73 0.71 0.72 0.72 0.71
Net realized and unrealized gain/(loss)
on investments (b) 0.63 0.07 1.00 (1.02) 0.36
- ------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.36 0.78 1.72 (0.30) 1.07
- ------------------------------------------------------------------------------------------------------------------
Less Distributions from:
Net investment income (0.73) (0.71) (0.72) (0.72) (0.71)
Net realized gain on investments (0.17) (0.12) (0.05) (0.10) (0.10)
- ------------------------------------------------------------------------------------------------------------------
Total Distributions (0.90) (0.83) (0.77) (0.82) (0.81)
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $12.63 $12.17 $12.22 $11.27 $12.39
==================================================================================================================
Total return (c) 11.28% 6.53% 15.28% (2.29)% 8.69%
Net assets, end of period (in thousands) $1,579 $1,565 $1,612 $1,467 $1,575
Ratio of expenses to average net assets 0.91% 1.00% 0.99% 0.98% 0.97%
Ratio of net investment income to
average net assets 5.73% 5.80% 6.02% 6.21% 5.51%
Portfolio turnover rate 0.00% 0.00% 0.00% 0.00% 0.00%
If the adviser had not reimbursed expenses
the ratios would have been:
Ratio of expenses to average net assets 1.55% 1.27% 1.07% 0.98% 0.97%
Ratio of net investment income to average net assets 5.09% 5.53% 5.95% 6.21% 5.51%
(a) All per share amounts have been rounded to the nearest cent.
(b) The amount shown may not correlate with the change in aggregate gains and losses of portfolio securities due to
the timing of sales and redemptions of fund shares.
(c) Total investment return assumes dividend reinvestment and does not reflect any deduction for sales charges. Not
annualized for periods less than one year.
The accompanying notes to the financial statements are an integral part of this schedule.
Board of Trustees and Executive Officers
The Board of Trustees is responsible for the management and supervision of the Funds' business affairs and for exercising all powers except those reserved to the shareholders. Each Trustee also serves as a Director of AAL Variable Product Series Fund, Inc., a registered investment company consisting of 14 Portfolios that serve as the underlying funds for variable contracts issued by Thrivent Financial for Lutherans ("Thrivent Financial") and Lutheran Brotherhood Variable Products Insurance Company ("LBVIP").
Also, in addition to serving as a Trustee of The AAL Mutual Funds and a Director of AAL Variable Product Series Fund, Inc., Mr. Gilbert serves as a Trustee of The Lutheran Brotherhood Family of Funds (a registered investment company consisting of 11 Funds, which offer Class A, Class B and Institutional Class shares) and as a Director of LB Series Fund, Inc. (a registered investment company consisting of 14 Portfolios that serve as the underlying funds for variable annuity contracts issued by Thrivent Financial and LBVIP).
Unless otherwise indicated, the business address of each Trustee and officer is 625 Fourth Avenue South, Minneapolis, Minnesota 55415.
Interested Trustees*
Position with the Fund, Principal
Name, Length of Service and Occupation During Other Directorships
Address and Age Term of Office** the Past 5 Years Held by Director
- --------------------------------------------------------------------------------------------------------------------
John O. Gilbert Chairman and Trustee Chairman, Thrivent Financial Chairman of the Life Office
Age 60 since 1999 for Lutherans Management Association
(LOMA) board of directors;
member of the board of
regents for Luther College
in Decorah, Iowa; member
of the board for Fox PAC --
Performing Arts Center in
Appleton, Wisconsin;
Trustee, Luther Seminary
Foundation
Lawrence W. Stranghoener Trustee since 2002 Executive Vice President and St. Paul Chamber Orchestra
Age 48 Chief Financial Officer, Board; Metropolitan
Thrivent Financial for Economic Development
Lutherans; previously, Association; Director,
Executive Vice President and Kennametal, Inc.
Chief Financial Officer,
Techies.com in 2000;
Vice President and Chief
Financial Officer, Honeywell
Inc. from 1983 to 1999
Disinterested Trustees
Position with the Fund, Principal
Name, Length of Service and Occupation During Other Directorships
Address and Age Term of Office** the Past 5 Years Held by Director
- --------------------------------------------------------------------------------------------------------------------
F. Gregory Campbell Trustee since 1992 President, Carthage College ELCA University and
Age 63 College Employees' Health
Benefit Board; ELCA Risk
Management Board;
Johnson Family Mutual
Funds Board; Kenosha Area
Business Alliance Board;
Kenosha Hospital and
Medical Center Board;
Prairie School Board; United
Health Systems Board
Richard L. Gady Trustee since 1987 Vice President, Public Affairs International Agricultural
Age 60 and Chief Economist, Marketing Association
Conagra, Inc. (agribusiness) Board
Edward W. Smeds Trustee since 1999 Retired Chairman of Carthage
Age 67 College Board; Board of
Governors, Club of
Pelican Bay
Executive Officers
Position with the Fund,
Name, Length of Service and
Address and Age Term of Office*** Principal Occupation During the Past 5 Years
- ---------------------------------------------------------------------------------------------------------------------------
Pamela J. Moret President since 2002 Senior Vice President, Marketing and Products, Thrivent
Age 47 Financial for Lutherans since 2002; previously, Senior Vice
President, Products, American Express Financial Advisors
Charles D. Gariboldi Treasurer since 1999 Vice President, Investment Accounting, Thrivent Financial
Age 43 for Lutherans
James H. Abitz Vice President since 1999 Senior Vice President, Investments, Thrivent Financial
Age 57 for Lutherans
Karl D. Anderson Vice President since 2003 Head of Investment Product Solutions Management, Thrivent
Age 41 Financial for Lutherans
Frederick P. Johnson Vice President since 2003 Vice President, Investment Operations, Thrivent Financial
Age 40 for Lutherans
Brenda J. Pederson Vice President since 2003 Vice President, Member Support and Mutual Fund Operations,
Age 42 Thrivent Financial for Lutherans
Brett L. Agnew Secretary since 2001 Senior Counsel, Thrivent Financial for Lutherans
Age 32
John C. Bjork Assistant Secretary Senior Counsel, Thrivent Financial for Lutherans
Age 49 since 2003
James E. Nelson Assistant Secretary Vice President, Securities Law, Thrivent Financial for
Age 42 since 2003 Lutherans since 2002; previously, Counsel and head of
Insurance Practice Group, Law Division of ING ReliaStar
(formerly ReliaStar Financial Corp.)
Marlene J. Nogle Assistant Secretary Senior Counsel, Thrivent Financial for Lutherans
Age 55 since 2003
Todd J. Kelly Assistant Treasurer Head of Fund Accounting Operations, Thrivent Financial
222 West College Avenue since 1999 for Lutherans
Appleton, WI
Age 33
Gerard V. Vaillancourt Assistant Treasurer Head of Fund Accounting Administration, Thrivent
Age 35 since 2002 Financial for Lutherans; previously, Manager-Fund
Accounting, Minnesota Life from 2000 to 2001; Supervisor-
Securities Accounting, Lutheran Brotherhood from
1998 to 2000
* "Interested person" of the Fund as defined in the Investment Company Act of 1940 by virtue of positions with
Thrivent Financial for Lutherans.
** Each Trustee serves an indefinite term until his successor is duly elected and qualified. The Fund's bylaws provide
that each Trustee must retire at the end of the calendar year in which the Trustee attains age 70.
*** Officers serve at the discretion of the board until their successors are duly appointed and qualified.
[Back cover page]
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We're Listening to You!
In response to shareholder concerns regarding multiple mailings, we are sending one shareholder report for The AAL Mutual Funds to each household. This consolidation helps reduce printing and postage costs, thereby saving shareholders' money. If you wish to receive an additional copy of this report, call us toll free at (800)-847-4836.
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Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Reserved.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Reserved
Item 9. Controls and Procedures
(a)(i) The registrant's President and Treasurer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act) provide reasonable assurances that material information relating to the registrant is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There were no significant changes in registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced in (a)(i) above.
Item 10. Exhibits
(a) Not applicable.
(b) Certifications pursuant to Rule 30a-2 under the Investment Company Act of 1940 and 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
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.
Date: June 27, 2003 THE AAL MUTUAL FUNDS
By: /s/ Pamela J. Moret
----------------------------
Pamela J. Moret
President
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.
Date: June 27, 2003 By: /s/ Pamela J. Moret
----------------------------
Pamela J. Moret
President
Date: June 27, 2003 By: /s/ Charles D. Gariboldi
----------------------------
Charles D. Gariboldi
Treasurer
CERTIFICATION BY PRESIDENT
I, Pamela J. Moret, certify that:
- I have reviewed this report on Form N-CSR of The AAL Mutual Funds;
- Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
- The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have:
- designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
- evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and
- presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date.
- The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
- all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
- any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
- The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: June 27, 2003 THE AAL MUTUAL FUNDS
By: /s/ Pamela J. Moret
----------------------------
Pamela J. Moret
President
CERTIFICATION BY TREASURER
I, Charles D. Gariboldi, certify that:
- I have reviewed this report on Form N-CSR of The AAL Mutual Funds;
- Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
- The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have:
- designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
- evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and
- presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date.
- The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
- all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
- any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
- The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: June 27, 2003 By: /s/ Charles D. Gariboldi
----------------------------
Charles D. Gariboldi
Treasurer
CERTIFICATION UNDER SECTION 906 OF SARBANES-OXLEY ACT OF 2002
Name of Registrant: The AAL Mutual Funds
In connection with the Report on Form N-CSR for the above-named issuer, the undersigned hereby certify, to the best of her or his knowledge, that:
- The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
- The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
Date: June 27, 2003 By: /s/ Pamela J. Moret
----------------------------
Pamela J. Moret
President
Date: June 27, 2003 By: /s/ Charles D. Gariboldi
----------------------------
Charles D. Gariboldi
Treasurer
