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: October 31, 2003
Item 1. Report to Stockholders
[GRAPHIC OMITTED: Thrivent Investment Management TM]
The AAL Mutual Funds
Semiannual Report
October 31, 2003
[GRAPHIC OMITTED: Man reading a [paper]
Table of Contents
President's Letter 1
Economic and Market Overview 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
Schedules of Investments
The AAL Technology Stock Fund 42
The AAL Aggressive Growth Fund 44
The AAL Small Cap Stock Fund 48
The AAL Small Cap Index Fund II 52
The AAL Small Cap Value Fund 60
The AAL Mid Cap Stock Fund 63
The AAL Mid Cap Index Fund 67
The AAL Mid Cap Index Fund II 73
The AAL International Fund 79
The AAL Capital Growth Fund 82
The AAL Large Company Index 85
The AAL Large Company Index Fund II 92
The AAL Equity Income Fund 99
The AAL Balanced Fund 102
The AAL High Yield Bond Fund 111
The AAL Municipal Bond Fund 118
The AAL Bond Fund 138
The AAL Bond Index Fund 143
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 189
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
Supplement to the Prospectus 201
[PHOTO OMITTED: PAMELA J. MORET]
Dear Shareholder:
We are pleased to provide you with the semiannual report for the six
months ended October 31, 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 highlighting performance, market conditions
and management strategies during the six-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.
In 2003, we have seen significant improvement in the financial
markets. This has been a welcome change from the past few years.
Sadly, however, this marked improvement has been somewhat overshadowed
by a string of disturbing disclosures of inappropriate mutual fund
trading practices in the industry.
You can count on us for your investment needs
We want our shareholders to know we are committed to operating with
integrity and earning and retaining your trust every day. This is
especially important as investors' confidence in money managers and
fund families is being shaken. At a time when the mutual fund industry
is receiving increased negative attention, we are working hard to
protect your interests by continually monitoring and reviewing our
practices and seeking to hold ourselves to the high standards you
expect.
Our practices discourage market timing and late trading
There are several ways we protect your interests:
(bullet) We do not permit late or after hours trading. Investors must
place their orders to buy or sell shares before 4 p.m. ET
to receive that day's price.
(bullet) We reserve the right to reject purchases we believe could
negatively impact our investors.
(bullet) We enhanced our fair value pricing that allows us to factor
in events that could affect the valuation of our international stock
funds. This pricing practice helps eliminate potential arbitrage
opportunities for market timers.
We're building for the future
As we continue to strive to operate our business with integrity, we
are working to ensure that we continue to meet your investment needs.
Investments play an important role in many shareholders' financial
plans. Our mutual fund family and portfolio money management
capabilities are being repositioned to better meet shareholders'
needs.
Our goal is to deliver consistent competitive investment performance,
enhanced shareholder services and a growing business with an excellent
reputation. We expect to build on our many strengths while also
addressing areas that need improvement.
We are developing action steps that, taken together, we expect will
benefit shareholders. They include:
(bullet) Merging the fund families and, in the process, placing all of
the funds under a single Board of Trustees.
(bullet) Thrivent Investment Management is investing $4-5
million to enhance the quality of its portfolio money
management capabilities.
(bullet) Creating new product names using the Thrivent Financial
brand.
(bullet) Expanding our investment product offerings.
(bullet) Enhancing transfer agent services to increase our
shareholders' access to account information and to make share
transactions easier.
(bullet) Offering greater investment choice through access to an
expanded array of money managers.
Your Thrivent Investment Management representative can be your guide
As we build our capabilities, our philosophy is centered firmly on
your relationship with your Thrivent Investment Management
representative. You can expect regular timely advice from your
Thrivent Investment Management representative on asset allocation, the
financial markets and the economy. In a period of improving market
conditions, it's often a good idea to review your current investment
mix and overall balance. Talk to your Thrivent Investment Management
representative today if you have any questions. He or she is there to
help and would welcome the chance to do so. Thank you for continuing
to turn to us for your financial solutions.
Sincerely,
/S/ PAMELA J. MORET
Pamela J. Moret
President
The AAL Mutual Funds
[PHOTO OMITTED: JIM ABITZ]
Jim Abitz October 31, 2003
Senior Vice President, and
Chief Investment Officer
Economic and Market Overview
The nation's financial markets moved solidly into recovery mode over
the six months ended October 31, 2003, with every major asset class
recording gains -- many of them substantial. The stock market built on
gains recorded in the immediate aftermath of hostilities starting in
Iraq by leveraging slowly improving economic numbers. Strong corporate
profit reports supported and added to stock market gains throughout
the summer months as further evidence of a strong economic recovery
accumulated. All equity market capitalization ranges flourished in
this environment with many smaller, "left-for-dead" technology
companies leading the charge. High-quality bonds posted positive yet
tempered returns in the face of a rising interest rate environment and
a renewed economy while high-yield issues recorded hefty gains amid
their finest run in several years.
U.S. Economy
Economic growth, after muddling along at a 1-2% rate, jumped sharply
in the summer and fall months punctuated with an extraordinary 3rd
quarter 2003 gross domestic product (GDP) year-over-year increase of
8.2% according to the Commerce Department's revised estimate. This was
the strongest growth rate in nearly twenty years. The improvement was
largely attributable to a combination of companies rebuilding depleted
inventories and increasing capital expenditures and business
investment. Last April, we pointed to weak capital spending and the
lack of job growth as key missing pieces from the complete economic
puzzle. With a solid pick up in business spending, all eyes have been
trained on employment numbers and we have seen some improvement on the
margin backed by evidence such as weekly initial jobless claims having
fallen to the lowest level since February of 2001. The net job loss
figures, however, are sobering and could impact consumer confidence
and the rate of economic growth if they continue to make newspaper
headlines. Manufacturing activity has recently expanded, the housing
sector continues its strong performance and consumer confidence has
been increasingly positive -- all key factors in the strong recovery.
Inflation and Monetary Policy
Inflation has yet to register in this economic recovery with the
exception of the occasional spike in energy prices. On a
year-over-year basis, inflation, as measured by the Consumer Price
Index, has held steady in the 2% range and shows no imminent signs of
accelerating. This low level of inflation is consistent with the
Federal Reserve holding market interest rates steady well into 2004.
Low interest rates should continue to provide stimulatory fuel for the
economy but will likely rise as improved employment and stronger
economic growth numbers come in. The current federal funds rate -- the
rate at which banks charge one another for overnight loans and a
barometer of all market interest rates -- stands at 1%, a 45-year low.
Equity Performance
The past six months were an exceedingly rewarding period for stock
investors with all market capitalization ranges and investment styles
turning in robust returns. The stock rally since late March was
dominated by a decided "lower-quality" bias that favored small and
out-of-favor firms over larger, more established companies. Technology
stocks, the scourge of investors over the past several years, led the
rally as evidenced by the NASDAQ Composite's breathtaking 32.28% total
return over the six-month period ended October 31, 2003. Small company
stocks, as measured by the Russell 2000 Index, returned 33.29% while
mid-caps and the S&P Midcap 400 Index gained 25.72%. Larger companies
brought up the rear with their proxy, the S&P 500 Index, returning
15.62%. As for investment styles, value-oriented stocks outperformed
growth but this should be discounted as so many growth-oriented
technology stocks had fallen in price and were being eyed as cheaper
value stocks. International stocks emerged from a long hibernation as
Japan's economy showed signs of life and valuations of many European
stocks became attractive. Morgan Stanley's EAFE Index -- a commonly
used measure of international stock performance -- rose 24.77% over
the six-month period.
Fixed-Income Performance
With a recovering economy and a somewhat more stable geopolitical
landscape, higher-quality bonds slowed down from a very strong
three-year performance period. The threat of rising interest rates
teamed with a much-improved stock market sent investors scrambling for
more return potential throughout the period. Corporate bonds,
especially those below investment grade, performed best as a result of
an improved business climate and company balance sheets holding less
debt. The threat of rising interest rates dampened investor enthusiasm
for the highest-quality U.S. Treasury securities and government agency
debt. For the period, the Lehman Brothers Aggregate Bond Index -- a
broad barometer of high-quality bond performance -- posted a 0.56%
total return.
The historically wide yield difference between high-yield bonds and
U.S. Treasuries attracted sizable inflows into high-yield bond funds
and, teamed with an improved credit market, produced sizable gains for
investors. The Lehman Brothers High Yield Bond Index produced a 8.97%
total return over the six-month period.
Outlook
Signs have grown increasingly positive and it is obvious that the U.S.
economy is in the midst of a firm recovery. With a low interest rate
environment and strong productivity and economic growth, there is no
reason that the economy cannot grow at a 4% rate in 2004. Consumer
confidence, while inherently volatile, has risen in recent months and
many experts expect a strong holiday retail season from higher
consumer spending. Irritants such as high consumer debt levels and a
spike in the personal bankruptcy rate have yet to impact consumer
confidence while inflation appears sedate. Lower unemployment rates
and job creation are factors that could provide leadership into the
next market rally and recent indications point to employment numbers
growing positive.
We expect less robust returns for high-quality bonds in the next six
to twelve months as interest rates are set to rise from historically
low levels. However, in our view, the Federal Reserve will hold off on
significant interest rate increases until the unemployment rate
exhibits a convincing downward trend.
In our experience, the stock market rarely, if ever, moves upward in a
steady way. As an example, the month of September saw a drop in all
major equity indexes but shouldn't necessarily be viewed negatively.
In our opinion, such consolidation periods are a healthy and necessary
part of market rallies as they help prepare for future gains and allow
investors on the sideline to reenter the market. This additional
demand by investors was one reason the stock market performed so well
in October. We expect more periodic pullbacks such as September's as
investors occasionally reap profits, but remain confident that
overall, the market is well positioned for a rewarding 2004.
The AAL Technology Stock Fund
[PHOTO OMITTED: BRIAN J. FLANAGAN]
[PHOTO OMITTED: JAMES A. GROSSMAN]
Brian J. Flanagan (left) and James A. Grossman (right), Portfolio
Co-Managers
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.
Thanks to attractive valuations, low inventory levels, increased
corporate profitability and tag-a-long spikes in technology spending,
technology markets have been nothing short of spectacular over the
six-month period ended October 31, 2003. Consequently, The AAL
Technology Stock Fund posted a 32.00% total return for the period,
while its Lipper, Inc., peer group of science and technology funds
earned a median total return of 38.01%. As a broad market comparison,
the Goldman Sachs Technology Industry Composite Index returned 35.58%
during the same period.
Speculation Over Small-Cap Tech Stocks Continues
Among the period's technology performers, we saw the most substantial
total return appreciation come out of the impressionable, highly
leveraged small-cap technology arena. These represented the small-cap
technology stocks with greater risk versus comparable stocks. Several
trends, including the following, fueled the small-cap fire over the
period and supported what we believe to be a speculative, almost
"manic" small-cap technology market:
(bullet) The Internet and open-source software have created an
opportunity for new companies to come in and take market share away
from larger companies.
(bullet) An increase in investing for speculation versus long-term use
or holding.
(bullet) Record low interest rates have spurred easier credit to
marginal companies, hindering the return of pricing power to the
overall technology market.
(bullet) An increase in uninformed investors investing in complex
markets and taking inappropriate (highly margined) risks.
Due to the warning signs stated above, the Fund was under-weighted in
small-cap technology -- with approximately a 20% exposure versus about
40% for its Lipper peer group. As a result, the Fund slightly
underperformed its peers over the period as it focused on
higher-quality, large-cap technology investments. It also slightly
trailed its benchmark, the Goldman Sachs Technology Industry Composite
Index (GTC), due mainly to its cash position. While modest at 5%, its
coincidence with an "up market" dragged on performance.
Factors Around Performance
Our decision to reduce exposure to the computer hardware industry has
benefited the Fund's performance. With only a 22% return, hardware was
one of the worst industry performers for the six-month period. On the
flip side, our higher software weighting and focus on
larger-capitalization companies dampened the Fund's relative
performance. Overall, the Fund was not heavily over- or underweighted
in any particular sector of the market, as valuations across sectors
were fairly consistent and did not warrant significant "bets."
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Information Technology 86.1%
Consumer Discretionary 6.0%
Communications Services 1.3%
Industrials 1.1%
Health Care 0.5%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 5.0%
Common Stocks 95.0%
Top 10 Holdings
(% of Portfolio)
Intel Corporation 11.1%
Microsoft Corporation 7.5%
Cisco Systems, Inc. 7.1%
International Business Machines Corporation 4.5%
Dell, Inc. 4.2%
Oracle Corporation 3.4%
Hewlett-Packard Company 3.2%
Texas Instruments, Inc. 2.4%
Applied Materials, Inc. 2.0%
QUALCOMM, Inc. 1.9%
These holdings represent 47.3% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Looking forward, we expect to see a progression of several positive
variables that are currently in technology markets, including a slowly
improving spending environment, increasing capacity utilization,
historically low inventories, and an accommodative tax policy that
encourages companies to increase capital spending.
While the information-technology (IT) market is improving, it's not
enough to generate the revenues, margins and earnings that many
investors are expecting. The technology industry has yet to experience
a return of pricing power, and rising natural gas prices and health
care costs may very well increase business costs -- possibly consuming
much of the recent tax relief to consumers. We also believe that much
of the anticipated increase in IT spending has already been reflected
in the prices of many tech stocks, which could suggest that investors
are already paying for much of the expected improvement in earnings.
We believe large-capitalization, high-quality stocks represent value
in the current market. These stocks continue to gain market share,
maintain some pricing power, and are poised for impressive price
appreciation going forward.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AATSX BBTSX N/A
Transfer Agent ID 028 078 061
Net Assets $40,914,307 $3,601,864 $2,923,641
NAV $3.30 $3.20 $3.41
NAV -- High* 10/21/2003 -- $3.31 10/21/2003 -- $3.21 10/21/2003 -- $3.42
NAV -- Low* 5/1/2003 -- $2.52 5/1/2003 -- $2.44 5/1/2003 -- $2.60
Number of Holdings: 92 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
Goldman Sachs
Technology
The AAL Industry Consumer
Technology Composite Price
Date Stock Fund Index*** Index**
- ------------------------------------------------------------------------
July 1, 2000 9,450 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
2001 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
2002 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
2003 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
2003 2,363 2,732 10,676
2003 2,608 3,037 10,659
2003 2,618 3,029 10,671
2003 2,769 3,203 10,682
2003 2,920 3,424 10,723
2003 2,844 3,374 10,758
October 31, 2003 $ 3,119 $ 3,704 $10,746
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 46.67% (28.33)%
with sales charge 38.66% (29.53)%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 45.45% (28.99)%
with sales charge 41.45% (29.42)%
From
Inception
Institutional Class/3/ 1-Year 7/1/2000
- ----------------------------------------------------------------
Net Asset Value 46.98% (27.62)%
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 Goldman Sachs
Technology Industry 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. It is not possible to invest
directly in the Index.
*** The Goldman Sachs Technology Industry Composite Index is a
modified capitalization-weighted index of selected
technology stocks. It is not possible to invest
directly in the Index. The performance of the Index
does not reflect deductions for fees, expenses or
taxes.
/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. For additional information, refer to your
prospectus which can be obtained from your registered
representative or by calling (800) Thrivent. Please
read your prospectus carefully.
/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 Aggressive Growth Fund
[PHOTO OMITTED: SCOTT A. VERGIN]
Scott A. Vergin, Portfolio Manager
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.
Growth stocks rallied over the six-month period ending October 31,
2003, primarily due to sales and earnings improvement and positive
economic data. The AAL Aggressive Growth Fund returned 16.00% over the
period, while the median return of the Fund's Lipper, Inc., peer group
was 14.86%. The Fund's market benchmarks, the Russell 1000 Growth
Index and the S&P 500 Index, returned 16.81% and 15.62%, respectively
over the same period.
Improved Earnings and Economic Reports Fuel Rally
Sales and earnings improvement as well as positive economic data
fueled the market recovery in large company growth stocks over the
period. Sales and earnings stopped declining from quarter to quarter
and falling stock prices abated. In addition, economic data both
domestically and worldwide leveled off and started to improve over the
period.
Information technology was the strongest performer over the period and
the Fund's overweighting in this sector contributed to the Fund's
performance against its benchmarks. Also aiding performance was the
Fund's low cash position and holdings in the energy, financial, and
consumer staples sector. The Fund's stock selection in the heath care
sector was less appealing and contributed negatively to performance
over the period.
The oversold condition of the market -- since April of 2000 --
definitely helped to serve as a springboard for equity returns once
corporate and economic fundamentals started to improve. Since our
portfolio was aggressively postured going into the rebound, we
benefited as the year progressed.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Information Technology 32.0%
Health Care 17.8%
Consumer Discretionary 16.1%
Financials 12.0%
Consumer Staples 7.9%
Industrials 7.6%
Energy 2.9%
Communications Services 1.3%
Miscellaneous 0.3%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 1.8%
Common Stocks 98.2%
Top 10 Holdings
(% of Portfolio)
Microsoft Corporation 3.5%
Intel Corporation 3.2%
Pfizer, Inc. 3.0%
Cisco Systems, Inc. 2.9%
General Electric Company 2.4%
Wal-Mart Stores, Inc. 2.2%
Citigroup, Inc. 2.1%
Dell, Inc. 2.0%
Amgen, Inc. 1.9%
Johnson & Johnson 1.5%
These holdings represent 24.7% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
We still feel that large cap growth stocks will perform well going
into 2004 as long as sales and earnings and the economy continue to
improve on a year-over-year basis. Also influencing our positive
stance is the fact that interest rates continue to stay low. The
equity markets could be construed as being overvalued
considering the large run-up this year, but we feel that as long as
corporate and economic fundamentals continue to rebound these factors
will overshadow valuation concerns. We continue to posture the
portfolio towards sectors and individual companies that tend to
outperform during periods of economic recovery and growth.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AAAGX BBAGX N/A
Transfer Agent ID 027 077 060
Net Assets $36,154,684 $3,644,136 $3,289,788
NAV $4.35 $4.19 $4.53
NAV -- High* 10/14/2003 -- $4.35 10/14/2003 -- $4.20 10/14/2003 -- $4.53
NAV -- Low* 5/1/2003 -- $3.75 5/1/2003 -- $3.63 5/1/2003 -- $3.88
Number of Holdings: 220 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
The AAL Consumer Russell 1000
Aggressive S&P 500 Price Growth
Date Growth Fund Index*** Index** Index****
- -----------------------------------------------------------------------------
July 1, 2000 9,450 10,000 10,000 10,000
2000 9,063 9,743 10,017 9,541
2000 9,582 10,348 10,029 10,405
2000 9,072 9,802 10,081 9,421
2000 8,666 9,761 10,099 8,975
2000 7,324 8,991 10,104 7,652
2001 7,295 9,035 10,099 7,410
2001 7,626 9,356 10,163 7,922
2001 6,199 8,503 10,203 6,577
2001 5,557 7,964 10,226 5,861
2001 6,331 8,583 10,267 6,603
2001 6,152 8,640 10,313 6,506
2001 5,906 8,430 10,331 6,355
2001 5,604 8,347 10,302 6,196
2001 5,018 7,825 10,302 5,689
2001 4,508 7,193 10,348 5,121
2001 4,564 7,330 10,313 5,390
2001 4,857 7,892 10,296 5,908
2002 4,933 7,961 10,255 5,897
2002 4,772 7,845 10,279 5,793
2002 4,460 7,694 10,319 5,552
2002 4,659 7,983 10,377 5,744
2002 4,281 7,499 10,435 5,275
2002 4,196 7,444 10,435 5,148
2002 3,752 6,914 10,441 4,672
2002 3,430 6,375 10,453 4,415
2002 3,449 6,417 10,488 4,428
2002 3,194 5,720 10,505 3,969
2002 3,459 6,223 10,531 4,333
2002 3,638 6,589 10,531 4,568
2003 3,345 6,202 10,508 4,253
2003 3,270 6,040 10,554 4,149
2003 3,241 5,949 10,636 4,130
2003 3,298 6,007 10,700 4,207
2003 3,544 6,501 10,676 4,518
2003 3,723 6,843 10,659 4,744
2003 3,752 6,931 10,671 4,809
2003 3,856 7,053 10,682 4,929
2003 3,950 7,190 10,723 5,051
2003 3,874 7,114 10,758 4,997
October 31, 2003 $4,111 $ 7,517 $10,746 $ 5,278
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 18.85% (22.13)%
with sales charge 12.40% (23.43)%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 17.37% (23.00)%
with sales charge 13.37% (23.46)%
From
Inception
Institutional Class/3/ 1-Year 7/1/2000
- ----------------------------------------------------------------
Net Asset Value 20.48% (21.17)%
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 Russell 1000 Growth 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. It is not possible to invest
directly in the Index.
*** The S&P 500 Index is an index that represents the average
performance of a group of 500 large-capitalization
stocks. It is not possible to invest directly in the
Index. The performance of the Index does not reflect
deductions for fees, expenses or taxes.
**** The Russell 1000 Growth Index is an index comprised of those
Russell 1000 Index companies with higher than average
price-to-book ratios and higher forecasted growth
values. The Russell 1000 Index is comprised of the
1,000 largest companies in the Russell 3000 Index,
which represents the 3,000 largest companies based on
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 these Indexes.
The performance of these Indexes does not reflect
deductions for fees, expenses or taxes. The composition
of the Russell 1000 Growth Index serves as a better
reflection of the Fund's current investment strategy
than does the S&P 500 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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 Stock Fund
[PHOTO OMITTED: KEVIN A. SCHMITTING]
Kevin A. Schmitting, Portfolio Manager
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.
Small-cap stocks revived over the six-month period ended October 31,
2003. For the period, The AAL Small Cap Stock Fund posted a 29.18%
total return, while its Lipper, Inc., peer group of
small-capitalization core funds returned a median of 29.74%. The
Fund's market benchmark, the S&P SmallCap 600 Index, was up 29.00%.
Improving Economy
Concerns about the war in Iraq impacted not only stocks, but the
economy as a whole. Investors became much more positive about the
economy once the Iraq situation was in more control. The first signs
of an economic awakening were witnessed in small-cap earnings toward
the end of second quarter, 2003. May was the strongest month in the
period as investors became more focused on small company fundamentals
which continued into June. This led to positive small cap market
performance for the remaining summer months, which are generally quite
slow.
The Fund performed in line with its Lipper peer group as well as the
S&P SmallCap 600 Index over the period with its higher concentration
in the information technology sector and good stock selection in the
consumer discretionary sector. The information technology sector has
been in a drought for several years due to weak corporate spending. As
economic confidence came back in the Spring, many companies began
taking off their brakes in technology spending. The consumer
discretionary sector also rallied with the improving economy and the
August tax rebate. On balance, the Fund's performance was hurt by the
run up in low quality small cap stocks in the financial and
telecommunication services sectors. Lower quality stocks have
dominated in these sectors and we don't believe they offer the best
risk/return profile for our investors.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Information Technology 20.1%
Financials 17.8%
Consumer Discretionary 16.7%
Industrials 15.7%
Health Care 11.9%
Energy 4.5%
Materials 3.3%
Consumer Staples 2.1%
Utilities 1.8%
Communications Services 0.7%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 5.4%
Common Stocks 94.6%
Top 10 Holdings
(% of Portfolio)
Affiliated Managers Group, Inc. 1.8%
Raymond James Financial, Inc. 1.2%
S&P SmallCap 600 Index Fund I Shares 1.2%
Ingram Micro, Inc. 1.0%
Cost Plus, Inc. 0.9%
MacDermid, Inc. 0.9%
United Surgical Partners International, Inc. 0.9%
Dionex Corporation 0.9%
Consolidated Graphics, Inc. 0.8%
Ventana Medical Systems, Inc. 0.8%
These holdings represent 10.4% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Looking forward, we maintain an optimistic outlook for small cap
stocks. Most of the factors that have helped push the small cap market
during the past six months should continue for the next six months or
longer. Clearly the economy is rebounding, not just domestically but
globally as well. Although employment numbers continue to be sluggish,
they've shown recent improvement. In addition, inflation has been very
low. By adding September's strong quarterly corporate earnings to the
factors that helped over the past six months, we're positive about the
market for the forseeable future.
Going forward, we will look for sectors that may have more of a growth
orientation such as information technology, industrials and consumer
discretionary stocks. Given these conditions, we still believe that
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.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AASMX BBSMX N/A
Transfer Agent ID 024 074 054
Net Assets $345,051,997 $24,525,102 $9,363,263
NAV $14.92 $13.97 $15.54
NAV -- High* 10/30/2003 -- $14.94 10/30/2003 -- $13.98 10/30/2003 -- $15.55
NAV -- Low* 5/1/2003 -- $11.54 5/1/2003 -- $10.85 5/1/2003 -- $11.97
Number of Holdings: 210 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
The AAL Consumer
Small Cap S&P SmallCap Price
Date Stock Fund 600 Index** Index***
- ------------------------------------------------------------------------
July 1,1996 9,450 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
1997 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
1998 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
1999 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
2000 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
2001 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
2002 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
2003 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
2003 14,308 15,620 11,739
2003 15,559 16,878 11,720
2003 15,906 17,317 11,733
2003 16,724 18,217 11,746
2003 17,752 19,103 11,790
2003 17,083 18,542 11,829
October 31, 2003 $18,483 $20,149 $11,816
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 5-Year 7/1/1996
- ----------------------------------------------------------------
without sales charge 33.57% 11.38% 9.57%
with sales charge 26.23% 10.12% 8.74%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 32.42% 10.26% 7.41%
with sales charge 28.42% 10.26% 7.41%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 34.66% 12.20% 7.98%
Footnotes read:
* As you compare performance, please note that the Fund's
performance reflects the maximum 5.5% sales charge,
while the S&P SmallCap 600 Index and the Consumer Price
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 S&P SmallCap 600 Index is an index that represents the average
performance of a group of 600 small capitalization
stocks. It is not possible to invest directly in the
Index. The performance of the Index does not reflect
deductions for fees, expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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, Portfolio Manager
The AAL Small Cap Index Fund II seeks capital growth that tracks the
performance of the S&P Small Cap 600 Index by investing primarily in
common stocks of the Index.
For the six-month period ended October 31, 2003, The AAL Small Cap
Index Fund II returned 28.23% versus a return for the S&P SmallCap 600
Index of 29.00% over this time period. The difference in performance
between the Fund and the benchmark was primarily a result of the
expenses charged to the Fund that are not applicable to the Index.
Economic Upturn Positive for Stocks
Although the months of June and September brought negative returns for
the Fund, the other months proved rewarding and the Fund generally
trended upward over the past six months. The September decline was
followed by another strong period for stocks in October to close the
period. Stocks in every economic sector showed positive returns for
the six-month period, with the exception of telecommunications
services. Information technology and consumer discretionary stocks led
the pack with gains of over 44% and 39%, respectively, for the period.
The AAL Small Cap Index Fund II, as an Index portfolio, 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 SmallCap 600 Index in order to provide broad exposure to small
capitalization stocks across various economic sectors. This is done by
purchasing all 600 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,
transaction costs, and minor differences in portfolio composition
relative to that of the Index. All of these variables will have less
of an impact on performance as the portfolio grows in size.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Consumer Discretionary 19.9%
Industrials 17.9%
Information Technology 16.3%
Financials 13.2%
Health Care 12.6%
Energy 4.8%
Materials 4.0%
Utilities 3.6%
Consumer Staples 3.0%
Communications Services 0.4%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 4.3%
Common Stocks 95.7%
Top 10 Holdings
(% of Portfolio)
Harman International Industries, Inc. 1.0%
NVR, Inc. 0.8%
Mid Atlantic Medical Services, Inc. 0.7%
Cephalon, Inc. 0.6%
ITT Educational Services, Inc. 0.5%
Ryland Group, Inc. 0.5%
Newfield Exploration Company 0.5%
Inamed Corporation 0.5%
Alliant Techsystems, Inc. 0.5%
Raymond James Financial, Inc. 0.5%
These holdings represent 6.1% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Looking forward, we maintain an optimistic outlook for small-cap
stocks. Most of the factors that helped push the small-cap market
during the past six months should continue for the next six months or
longer. The U.S. and global economies are rebounding, and although
unemployment numbers have remained sluggish they are showing signs of
improvement. Another positive factor is a low inflation rate. Adding
strong September quarterly corporate earnings to the positive market
factors from the past six months indicates results that look
attractive for the forseeable future.
Portfolio Facts
As of October 31, 2003
A Share B Share
-------------- --------------
Ticker AALSX N/A
Transfer Agent ID 029 079
Net Assets $28,504,943 $3,200,681
NAV $11.40 $11.09
NAV -- High* 10/29/2003 -- $11.44 10/29/2003 -- $11.12
NAV -- Low* 5/1/2003 -- $8.89 5/1/2003 -- $8.68
Number of Holdings: 601 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
The AAL Consumer
Small Cap S&P SmallCap Price
Date Index Fund II 600 Index*** Index**
- ------------------------------------------------------------------------
July 1, 2000 9,450 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
2001 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
2002 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
2003 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
2003 8,597 9,573 10,676
2003 9,283 10,344 10,659
2003 9,515 10,613 10,671
2003 9,999 11,165 10,682
2003 10,473 11,708 10,723
2003 10,163 11,364 10,758
October 31, 2003 $11,024 $12,349 $10,746
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 31.79% 4.74%
with sales charge 24.59% 2.98%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 30.62% 3.88%
with sales charge 26.62% 3.33%
Footnotes read:
* As you compare performance, please note that the Fund's
performance reflects the maximum 5.5% sales charge,
while the S&P SmallCap 600 Index and the Consumer Price
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 S&P SmallCap 600 Index is an index that represents the
average performance of a group of 600 small capitalization
stocks. "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.
Index funds are subject to the same market risks
associated with the stocks in their respective indexes.
It is not possible to invest directly in the Index. The
performance of the Index does not reflect deductions
for fees, expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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.
The AAL Small Cap Value Fund
[PHOTO OMITTED: CHRISTOPHER J. SERRA]
Christopher J. Serra, Portfolio Manager
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.
Small cap value stocks overall performed quite well during the
six-month period ended October 31, 2003. Over this same period, The
AAL Small Cap Value Fund posted a 30.55% total return, while its
Lipper, Inc., peer group of small-capitalization value funds returned
a median of 28.05%. The Fund's market benchmark, the S&P SmallCap
600/Barra Value Index, returned 30.36% over this same time period.
Strong Performance in 2003
Over the last six months, we have seen the economic recovery gain
traction. Corporate earnings have experienced meaningful improvement
and investors have exhibited an increased appetite for risk. The
combination of these factors helped fuel healthy gains in small cap
value stocks during the six months ended October 31, 2003. We are
especially heartened by the fact that the recent market rally has been
followed by a significant improvement in business fundamentals.
The Fund's strong relative performance over the last six months was
primarily driven by solid gains in our consumer discretionary,
technology distribution, semiconductor, and semiconductor equipment
holdings. Specifically, as a result of an improving economy, continued
low interest rates, improving consumer confidence, and solid
management execution, two recreational vehicle manufacturers that we
own performed exceptionally well. Also, a recent pick up in business
spending is fueling technology sales growth, resulting in solid
performance coming from semiconductor-related, and technology
distribution companies. Solid performance in health care stocks have
added nicely to the Fund's performance as well.
On the flip side, our average cash position of 4.5% and our
underweight in basic material stocks had a negative impact on results
over the period. Furthermore, while we have been underweighted in
energy stocks, our holdings have been more concentrated in domestic
natural gas drilling companies which, along with aerospace and defense
holdings, have also under-performed.
It is important to mention that we did not make any significant sector
bets during the last six months. The Fund's relative performance was
primarily driven by our stock selection process -- seeking out high
quality, opportunistic investments at attractive prices. In a stock
market environment that has been characterized as being driven by
gains in "low quality" companies, we are proud of the fact that we
were able to perform well and maintain our focus on owning a portfolio
of good businesses.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Industrials 19.1%
Financials 18.4%
Consumer Discretionary 18.4%
Information Technology 14.3%
Health Care 8.7%
Materials 5.6%
Energy 5.4%
Utilities 3.5%
Consumer Staples 2.1%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 4.5%
Common Stocks 95.5%
Top 10 Holdings
(% of Portfolio)
Affiliated Managers Group, Inc. 1.7%
Russell 2000 Index Fund I Shares 1.5%
United Surgical Partners International, Inc. 1.1%
Casey's General Stores, Inc. 1.1%
Tech Data Corporation 1.1%
HON INDUSTRIES, Inc. 1.1%
IDEX Corporation 1.0%
Corus Bankshares, Inc. 1.0%
S&P SmallCap 600 Index Fund I Shares 1.0%
Griffon Corporation 1.0%
These holdings represent 11.6% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
While we certainly do not anticipate the type of gains that we've seen
over the last six months, we remain optimistic about the next 6 to 12
months. Business spending is just beginning to pick up, which bodes
well for many of our industrial, commercial service, and technology
companies. Also, the employment picture looks like it is beginning to
finally improve. If this trend continues, we believe that consumer
confidence and spending will remain healthy, benefiting our retail,
RV, and restaurant holdings. However, we are not taking our eye off of
potential risks, such as the continually unstable global geopolitical
situation, potentially higher energy prices, and stock valuations.
Many stocks have already discounted much of a forthcoming economic
recovery. If that recovery proves less robust than the market is
implying, some stock prices may be at risk.
As for the Fund, it remains positioned towards a continued cyclical
recovery. Currently we are making modest relative sector leanings.
Within these sectors, we are investing in quality companies with
meaningful operating leverage. These companies have reasonable fixed
costs and have done a good job rationalizing their businesses during
the downturn. As their sales improve, earnings per share and cash flow
should improve dramatically, driving share prices up. In fact, we have
already seen this happen in a number of our holdings. As has been the
case since the Fund's inception, we believe that careful research and
prudent stock selection hold the key to strong long-term performance.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AALVX BBSVX N/A
Transfer Agent ID 032 082 062
Net Assets $39,695,279 $4,391,757 $6,988,062
NAV $12.18 $11.97 $12.42
NAV -- High* 10/14/2003 -- $12.18 10/14/2003 -- $11.97 10/31/2003 -- $12.42
NAV -- Low* 5/1/2003 -- $9.30 5/1/2003 -- $9.18 5/1/2003 -- $9.45
Number of Holdings: 167 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
The AAL S&P SmallCap Consumer
Small Cap 600/Barra Price
Date Value Fund Value Index** Index***
- ------------------------------------------------------------------------
July 17, 2001 9,450 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
2002 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
2003 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
2003 8,875 8,783 10,334
2003 9,665 9,602 10,318
2003 9,903 9,887 10,329
2003 10,455 10,369 10,340
2003 10,997 10,870 10,379
2003 10,750 10,514 10,413
October 31, 2003 $11,587 $11,450 $10,402
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 7/17/2001
- ----------------------------------------------------------------
without sales charge 41.14% 9.31%
with sales charge 33.41% 6.65%
From
Inception
Class B/2/ 1-Year 7/17/2001
- ----------------------------------------------------------------
without sales charge 39.84% 8.48%
with sales charge 35.84% 7.30%
From
Inception
Institutional Class/3/ 1-Year 7/17/2001
- ----------------------------------------------------------------
Net Asset Value 42.43% 10.24%
Footnotes read:
* As you compare performance, please note that the Fund's
performance reflects the maximum 5.5% sales charge,
while the S&P SmallCap 600/Barra Value Index and the
Consumer Price 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 S&P SmallCap 600/Barra Value Index is capitalization-weighted
index that comprises all of the stocks in the S&P
SmallCap 600 Index that have low price-to-book ratios.
It is not possible to invest directly in these Indexes.
The performance of these Indexes does not reflect
deductions for fees, expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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 Stock Fund
[PHOTO OMITTED: MICHAEL R. HOCHHOLZER]
Michael R. Hochholzer, Portfolio Manager
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.
Mid cap stocks rallied strongly in the six-month period ended October
31, 2003, with lower quality stocks leading the way. During the
period, The AAL Mid Cap Stock Fund posted a 22.25% total return,
lagging its Lipper, Inc., peer group of similar mid cap core stock
funds which returned a median of 24.52% and the Fund's market
benchmark, the S&P MidCap 400 Index, which recorded a 25.72% total
return.
Quality Factors Dominate Performance
The dominant factor in determining performance during the six-month
period was the "quality" of the issuer. Standard and Poor's ranks
common stocks into eight quality categories based on the long-term
growth and stability of a company's earnings and dividends. During the
period, the companies ranked B- and below outperformed those ranked B
and above by over two-and-a-half times, 46% versus 18%.
This issue was clearly detrimental to the relative performance of the
Fund as our investment style tends to underweight those lower-quality
issues. This "quality" phenomena was particularly apparent in the
information technology sector. Despite the fact that we were
overweight in technology stocks, we chose to invest in higher quality
names with the result being relative underperformance.
This occurred as the domestic economic backdrop showed clear signs of
improvement: commodity prices increased, the yield curve steepened and
the broad equity markets' momentum fed on itself. This environment
emboldened investors to seek out increasing levels of risk, and the
lower-quality companies, some previously priced for bankruptcy, led a
very strong rally.
The theme of economic strength and a renewed appetite for risk is
apparent in the sector results of the mid cap space, as well.
Information technology and telecommunication services -- two sectors
particularly hard hit the past three years -- led the market with
approximately 40% gains during the period. The Fund's smaller position
in these two resurgent sectors accounted for its underperformance.
Other cyclical sectors such as consumer discretionary, industrials,
and materials also performed well, each exceeding 20% returns in the
six-month time frame. More defensive sectors, such as utilities and
consumer staples, posted more modest returns which were closer to 10%.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Information Technology 17.5%
Consumer Discretionary 17.4%
Financials 17.0%
Health Care 12.8%
Industrials 11.0%
Energy 6.6%
Utilities 4.3%
Materials 3.7%
Consumer Staples 3.4%
Communications Services 0.7%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 5.6%
Common Stocks 94.4%
Top 10 Holdings
(% of Portfolio)
Banknorth Group, Inc. 1.1%
Countrywide Financial Corporation 1.1%
City National Corporation 1.1%
Valero Energy Corporation 1.1%
Republic Services, Inc. 1.1%
Microchip Technology, Inc. 1.0%
North Fork Bancorporation, Inc. 1.0%
Wisconsin Energy Corporation 1.0%
Quest Diagnostics, Inc. 1.0%
TCF Financial Corporation 1.0%
These holdings represent 10.5% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Looking forward, the economic environment certainly appears promising.
Growth is solid and expected to remain so, interest rates and
inflation are low, and business confidence is picking up. Mid cap
stocks appear fairly valued when compared to both their own history
and their larger and smaller counterparts. Given these factors, along
with medium-sized companies growth potential in a stronger economy, we
carry a positive outlook for mid cap stocks.
The lone notable sector slant in the Fund is an increased position in
energy stocks. The combination of constrained supply and solid
economic activity should serve to keep energy prices at levels above
those presently discounted in the stocks. The Fund also maintains the
quality bias which hurt it during the six-month period. In each of the
prior eight circumstances that "lower-quality" stocks outperformed
"higher-quality" issues by anything approaching this degree, "higher-quality"
stocks subsequently outperformed in the following twelve months.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AASCX BBSCX N/A
Transfer Agent ID 021 071 051
Net Assets $760,407,024 $25,824,707 $26,423,708
NAV $13.13 $12.09 $13.55
NAV -- High* 10/31/2003 -- $13.13 10/31/2003 -- $12.09 10/31/2003 -- $13.55
NAV -- Low* 5/1/2003 -- $10.72 5/1/2003 -- $9.93 5/1/2003 -- $11.04
Number of Holdings: 217 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
The AAL Consumer
Mid Cap S&P MidCap Price
Date Stock Fund 400 Index** Index***
- ------------------------------------------------------------------------
October 31, 1993 9,450 10,000 10,000
1993 9,790 9,981 10,000
1994 10,263 10,393 10,028
1994 10,593 10,503 10,048
1994 10,622 10,537 10,090
1994 9,866 10,304 10,097
1994 9,809 10,782 10,097
1994 9,261 11,033 10,125
1994 8,467 10,876 10,159
1994 8,505 10,373 10,194
1994 9,299 10,450 10,208
1994 9,365 10,351 10,215
1994 9,781 9,994 10,249
1994 9,431 10,333 10,277
1995 9,771 10,874 10,319
1995 9,374 10,671 10,346
1995 9,856 10,788 10,353
1995 10,348 10,301 10,367
1995 10,319 10,396 10,367
1995 10,452 10,504 10,409
1995 11,453 11,055 10,450
1995 12,616 11,247 10,485
1995 12,540 11,473 10,519
1995 13,315 11,749 10,540
1995 13,532 12,228 10,561
1995 14,090 12,866 10,561
1996 14,118 13,104 10,589
1996 14,081 13,421 10,609
1996 14,751 13,076 10,644
1996 14,865 13,647 10,637
1996 16,160 13,613 10,630
1996 16,764 13,810 10,693
1996 15,706 14,280 10,727
1996 13,844 14,451 10,783
1996 14,799 14,892 10,824
1996 15,583 15,094 10,845
1996 14,780 14,867 10,852
1996 15,555 13,861 10,873
1997 15,353 14,661 10,893
1997 15,907 15,300 10,928
1997 15,364 15,344 10,963
1997 14,234 16,209 10,983
1997 14,369 16,227 10,983
1997 15,907 16,836 11,018
1997 16,585 16,698 11,053
1997 17,659 15,986 11,080
1997 17,693 16,400 11,094
1997 18,994 17,834 11,087
1997 18,078 18,335 11,101
1997 17,987 20,151 11,115
1998 18,122 20,126 11,136
1998 17,697 21,283 11,163
1998 18,985 20,357 11,191
1998 19,773 20,659 11,184
1998 19,923 21,460 11,170
1998 18,760 21,052 11,191
1998 19,123 22,796 11,212
1998 17,934 23,824 11,233
1998 13,970 24,259 11,253
1998 15,058 23,167 11,274
1998 16,021 23,314 11,288
1998 16,909 22,410 11,302
1999 18,498 18,238 11,316
1999 18,445 19,941 11,330
1999 17,399 21,723 11,357
1999 17,862 22,807 11,357
1999 18,406 25,563 11,350
1999 19,095 24,568 11,378
1999 20,155 23,281 11,392
1999 19,916 23,932 11,427
1999 19,240 25,819 11,510
1999 18,816 25,931 11,510
1999 19,558 27,320 11,510
1999 20,367 26,739 11,544
2000 21,888 25,823 11,572
2000 20,936 25,025 11,627
2000 23,177 26,301 11,648
2000 24,101 27,681 11,655
2000 23,429 29,326 11,655
2000 23,107 28,501 11,683
2000 24,563 30,495 11,752
2000 24,395 33,047 11,849
2000 27,364 31,893 11,856
2000 27,574 31,495 11,863
2000 26,384 31,958 11,932
2000 23,443 32,463 11,953
2001 26,272 36,087 11,967
2001 26,033 35,840 12,029
2001 24,395 34,625 12,050
2001 22,331 32,011 12,057
2001 25,129 34,460 12,050
2001 25,367 35,227 12,126
2001 25,053 33,217 12,175
2001 23,635 30,747 12,202
2001 22,270 34,139 12,251
2001 19,503 34,935 12,306
2001 20,274 34,793 12,327
2001 21,097 34,275 12,292
2002 21,954 33,154 12,292
2002 21,569 29,030 12,348
2002 21,482 30,314 12,306
2002 22,917 32,569 12,285
2002 22,777 34,251 12,237
2002 22,567 34,074 12,265
2002 20,834 34,116 12,313
2002 18,943 36,554 12,382
2002 18,891 36,383 12,452
2002 17,525 35,770 12,452
2002 18,313 33,152 12,458
2002 19,153 29,940 12,472
2003 18,453 30,091 12,514
2003 18,050 27,668 12,535
2003 17,770 28,866 12,566
2003 17,805 29,109 12,641
2003 18,803 31,221 12,614
2003 20,309 33,806 12,593
2003 20,466 34,237 12,607
2003 20,974 35,452 12,621
2003 21,674 37,058 12,669
2003 21,272 36,491 12,710
October 31, 2003 $22,987 $39,250 $12,696
Average Annual Total Returns/1/
As of October 31, 2003
Class A/2/ 1-Year 5-Year 10-Year
- ----------------------------------------------------------------
without sales charge 25.53% 7.49% 8.56%
with sales charge 18.61% 6.27% 7.95%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 23.87% 6.25% 5.13%
with sales charge 19.87% 6.25% 5.13%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 26.16% 8.07% 5.25%
Footnotes read:
* As you compare performance, please note that the Fund's
performance reflects the maximum 5.5% sales charge,
while the S&P MidCap 400 Index and the Consumer Price
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 S&P MidCap 400 Index is an index that represents the average
performance of a group of 400 medium capitalization
stocks. It is not possible to invest directly in the
Index. The performance of the Index does not reflect
deductions for fees, expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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, Portfolio Manager
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.
For the six-month period ended October 31, 2003, The AAL Mid Cap Index
Fund returned 25.25% versus a return for the S&P MidCap 400 Index of
25.72% over this time period. The difference in performance between
the Fund and the benchmark was primarily a result of the expenses
charged to the Fund that are not applicable to the Index.
Economic Upturn Positive for Stocks
Although the months of June and September brought negative returns for
the Fund, the other months proved rewarding and the Fund generally
trended upward over the past six months. The September decline was
closely followed by another strong period for stocks in October to
close the period. Stocks in every economic sector showed positive
returns for the six-month period overall with information technology
and telecommunications services stocks leading on the upside with
gains of over 44% and 29%, respectively, for the period.
The AAL Mid Cap Index Fund, as an Index portfolio, 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
Mid Cap 400 Index in order to provide broad exposure to mid
capitalization stocks across various economic sectors. This is done by
purchasing all 400 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,
transaction costs, and minor differences in portfolio composition
relative to that of the Index. All of these variables will have less
of an impact on performance as the portfolio grows in size.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 19.2%
Consumer Discretionary 16.1%
Information Technology 15.9%
Health Care 12.4%
Industrials 11.8%
Utilities 6.1%
Energy 5.8%
Consumer Staples 4.5%
Materials 3.9%
Communications Services 0.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 3.7%
Common Stocks 96.3%
Top 10 Holdings
(% of Portfolio)
M&T Bank Corporation 1.2%
Gilead Sciences, Inc. 1.2%
Washington Post Company 0.8%
Lennar Corporation 0.7%
Microchip Technology, Inc. 0.7%
Coach, Inc. 0.7%
Mylan Laboratories, Inc. 0.7%
Affiliated Computer Services, Inc. 0.7%
SanDisk Corporation 0.7%
D.R. Horton, Inc. 0.6%
These holdings represent 8.0% of the Fund's total investment
portfolio.
Footnotes reads:
The returns shown do not reflect taxes a shareholder would pay on
distributions or redemptions.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Looking forward, the economic environment certainly appears promising
- -- growth is solid and expected to remain so, interest rates and
inflation are low, and business confidence is picking up. Mid cap
stocks appear fairly valued when compared to both their own history
and their larger and smaller counterparts. Given these factors, along
with medium-sized company's growth potential in a stronger economy, we
carry a positive outlook for mid cap stocks.
Portfolio Facts
As of October 31, 2003
Institutional Share
------------------
Ticker AALMX
Transfer Agent ID 058
Net Assets $27,897,612
NAV $11.16
NAV -- High* 10/31/2003 -- $11.16
NAV -- Lo * 5/1/2003 -- $8.89
Number of Holdings: 402 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Institutional Class Shares*/1/
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
2001 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
2002 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
2003 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
2003 10,116 10,233 10,930
2003 10,945 11,081 10,912
2003 11,082 11,222 10,924
2003 11,468 11,620 10,936
2003 11,978 12,147 10,978
2003 11,785 11,961 11,013
October 31, 2003 $12,671 $12,865 $11,001
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Institutional Class/2/ 1-Year 12/31/1999
- ----------------------------------------------------------------
Net Asset Value 29.77% 6.37%
Footnotes read:
* As you compare performance, please note that the Fund's
performance reflects Fund expenses, net of any
reimbursements, while the S&P MidCap 400 Index and the
Consumer Price Index do not reflect 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 S&P MidCap 400 Index is an index that represents the average
performance of a group of 400 medium capitalization
stocks. "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 or promoted by Standard &
Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in the product.
Index funds are subject to the same market risks
associated with the stocks in their respective indexes.
It is not possible to invest directly in the Index. The
performance of the Index does not reflect deductions
for fees, expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/2/ Institutional Class shares have no sales load and are for
institutional shareholders only.
The AAL Mid Cap Index Fund II
[PHOTO OMITTED: KEVIN R. BRIMMER]
Kevin R. Brimmer, Portfolio Manager
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.
For the six-month period ended October 31, 2003, The AAL Mid Cap Index
Fund II returned 24.74% versus a return for the S&P MidCap 400 Index
of 25.72% over this time period. The difference in performance between
the Fund and the benchmark was primarily a result of the expenses
charged to the Fund that are not applicable to the Index.
Economic Upturn Positive for Stocks
Although the months of June and September brought negative returns for
the Fund, the other months proved rewarding and the Fund generally
trended upward over the past six months. The September decline was
closely followed by another strong period for stocks in October to
close the period. Stocks in every economic sector showed positive
returns for the six-month period overall with information technology
and telecommunications services stocks leading on the upside with
gains of over 44% and 29%, respectively, for the period.
The AAL Mid Cap Index Fund II, as an Index portfolio, 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 Mid Cap 400 Index in order to provide broad exposure to mid
capitalization stocks across various economic sectors. This is done by
purchasing all 400 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,
transaction costs, and minor differences in portfolio composition
relative to that of the Index. All of these variables will have
less of an impact on performance as the portfolio grows in size.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 19.6%
Consumer Discretionary 16.4%
Information Technology 16.1%
Health Care 12.5%
Industrials 12.1%
Utilities 6.3%
Energy 5.9%
Consumer Staples 4.6%
Materials 4.1%
Communications Services 0.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 1.8%
Common Stocks 98.2%
Top 10 Holdings
(% of Portfolio)
M&T Bank Corporation 1.2%
Gilead Sciences, Inc. 1.2%
Lennar Corporation 0.8%
Washington Post Company 0.7%
Microchip Technology, Inc. 0.7%
Mylan Laboratories, Inc. 0.7%
Affiliated Computer Services, Inc. 0.7%
Coach, Inc. 0.7%
D.R. Horton, Inc. 0.7%
SanDisk Corporation 0.6%
These holdings represent 8.0% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Looking forward, the economic environment certainly appears promising
- -- growth is solid and expected to remain so, interest rates and
inflation are low, and business confidence is picking up. Mid cap
stocks appear fairly valued when compared to both their own history
and their larger and smaller counterparts. Given these factors, along
with medium-sized company's growth potential in a stronger economy, we
carry a positive outlook for mid cap stocks.
Portfolio Facts
As of October 31, 2003
A Share B Share
------------------ ------------------
Ticker AAMIX BMIFX
Transfer Agent ID 030 080
Net Assets $31,816,010 $4,240,356
NAV $10.79 $10.50
NAV -- High* 10/31/2003 -- $10.79 10/31/2003 -- $10.50
NAV -- Low* 5/1/2003 -- $8.63 5/1/2003 -- $8.41
Number of Holdings: 402 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
The AAL Consumer
Mid Cap S&P MidCap Price
Date Index Fund II 400 Index** Index***
- ------------------------------------------------------------------------
July 1, 2000 9,450 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
2001 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
2002 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
2003 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
2003 8,317 9,206 10,676
2003 8,991 9,968 10,659
2003 9,096 10,095 10,671
2003 9,404 10,454 10,682
2003 9,818 10,927 10,723
2003 9,664 10,760 10,758
October 31, 2003 $10,375 $11,573 $10,746
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 28.93% 2.85%
with sales charge 21.87% 1.12%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 28.22% 2.02%
with sales charge 24.22% (10.51)%
Footnotes read:
* As you compare performance, please note that the Fund's
performance reflects the maximum 5.5% sales charge,
while the S&P MidCap 400 Index and the Consumer Price
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 S&P MidCap 400 Index is an index that represents the average
performance of a group of 400 medium capitalization
stocks. "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 or promoted by Standard &
Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in the product.
Index funds are subject to the same market risks
associated with the stocks in their respective indexes.
It is not possible to invest directly in the Index. The
performance of the Index does not reflect deductions
for fees, expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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.
The AAL International Fund
[LOGO OMITTED: OECHSLE INTERNATIONAL ADVISORS]
Oechsle International Advisors, LLC, Portfolio Subadviser
The AAL International Fund seeks long-term capital growth by investing
primarily in a diversified portfolio of foreign stocks.
Economies, sentiment and markets were all on the upswing for much of
the six-month period ending October 31, 2003. The AAL International
Fund posted a return of 22.90% for the period, while the median of the
Fund's Lipper, Inc., peer group was 22.76%. The Fund's market
benchmark, the MSCI EAFE Index, returned 24.77% for the same period.
Rising commodity prices and shipping freight rates suggest a
synchronized global recovery is taking root. Improvement in several
areas like Japan's small businesses and the Eurozone's industrial
confidence also demonstrate that the recovery is occurring. The
greater visibility of the recovery promises greater future earnings
gains, and investors are responding positively.
The underperformance of the Fund in comparison to its market benchmark
largely occurred in September when investors suddenly pulled back from
riskier, economically-sensitive stocks, before once again growing
bullish from strong earnings reports. This hiatus benefited more
value-oriented stocks at the expense of the Fund's more growth-focused
approach. That said, we believe that investors' risk appetite is still
in the process of a long-term recovery, which is a very positive
development for our growth investment style. The Fund's
underweightings in more defensive areas like health care, energy, and
utilities added to performance over the period as investors felt
comfortable taking on more risk. The Fund's overweightings in
telecommunications and underweighting in financials detracted from
performance against the market benchmark over the period.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Consumer Discretionary 29.3%
Financials 23.2%
Industrials 9.4%
Consumer Staples 9.0%
Communications Services 7.9%
Information Technology 5.9%
Materials 4.6%
Energy 4.4%
Health Care 3.1%
Utilities 0.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 2.7%
Common Stocks 97.3%
Top 10 Countries
(% of Portfolio)
Japan 19.5%
United Kingdom 18.8%
France 10.2%
Germany 8.9%
Italy 7.2%
South Korea 5.1%
Netherlands 4.6%
Switzerland 3.9%
Hong Kong 3.6%
Spain 3.1%
These holdings represent 84.9% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top Countries are
subject to change.
Outlook
Despite the market's strong performance in recent months, low
valuations outside the U.S. and investor sentiment indicates that
there is some room for improvement before belief that the global
recovery is widespread and risk appetite returns to normal levels. We
expect a continued positive environment for equities. The Fund is
structured in anticipation of a global recovery and an improving
earnings environment.
The Fund is partially positioned in the Asia area, excluding Japan,
because most markets still trade on depressed valuations six years
after the Asian debt crisis first began to agitate markets. Meanwhile,
there is strong economic growth in this area, both domestically and in
export markets. This investment theme has already helped improve
performance of the Fund in the last few months. With the combination
of low valuations, positive earnings momentum and improving sentiment
that we see today and have not seen for years, we fully expect the
current investment strategy to contribute more to the Fund in the
coming months.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AAITX BBITX N/A
Transfer Agent ID 023 073 053
Net Assets $152,737,737 $7,531,673 $2,890,049
NAV $8.21 $7.96 $8.31
NAV -- High* 10/16/2003 -- $8.28 10/16/2003 -- $8.03 10/16/2003 -- $8.38
NAV -- Low* 5/1/2003 -- $6.69 5/1/2003 -- $6.53 5/1/2003 -- $6.75
Number of Holdings: 83 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares**/1/
The AAL Consumer
International MSCI EAFE Price
Date Fund Index*** Index****
- ------------------------------------------------------------------------
August 1, 1995 9,450 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
1996 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
1997 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
1998 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
1999 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
2000 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
2001 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
2002 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
2003 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
2003 8,003 11,636 12,063
2003 8,422 12,341 12,043
2003 8,650 12,640 12,056
2003 8,925 12,945 12,069
2003 9,201 13,258 12,115
2003 9,177 13,667 12,154
October 31, 2003 $ 9,836 $14,519 $12,141
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 5-Year 8/1/1995
- ----------------------------------------------------------------
without sales charge 19.33% (2.21)% 0.49%
with sales charge 12.80% (3.32)% (0.20)%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 17.58% (3.38)% (2.10)%
with sales charge 13.58% (3.38)% (2.10)%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 20.61% (1.48)% (1.53)%
Footnotes read:
* International investing has special risks including currency
fluctuation and political volatility.
** As you compare performance, please note that the Fund's
performance reflects the maximum 5.5% sales charge,
while the MSCI EAFE Index and the Consumer Price 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 Morgan Stanley Capital International Europe, Australasia, Far
East Index (MSCI EAFE Index) is a stock index designed
to measure the equity performance of developed
countries outside North America. It is not possible to
invest directly in the Index. The performance of the
Index does not reflect deductions for fees, expenses or
taxes.
**** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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, Portfolio Manager
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.
After three years of a declining stock market, the second half of the
fiscal year provided strong positive performance for large company
stock investors. For the six-month period ended October 31, 2003, The
AAL Capital Growth Fund provided an 11.25% total return. The S&P 500
Index benchmark return over this time period was 15.62% and the Fund's
Lipper, Inc., peer group of similarly managed large-cap core funds
registered a median performance of 14.42%.
Lower Exposure to Technology Impacts Performance
With the start of the war in Iraq, the negative psychology surrounding
the invasion changed to one of optimism and the rally began in a way
remarkably similar to the experience during the Desert Storm invasion
in 1991. With confidence building around the prospect of an economic
recovery, the rally built up momentum and spread to smaller companies
and more speculative stocks. The Fund's positions in several
investment niches away from the economic recovery theme and consistent
use of higher quality companies were significant factors contributing
to its underperformance relative to its benchmarks.
Information technology stocks, most unexpectedly, led the way in the
market rally. After the gross over-valuation of this group during the
market bubble of late 1999 and early 2000, we did not expect such a
quick return to leadership over this period. The Fund's underweight
position in this sector underlied its relative underperformance. Lower
priced, lower quality companies rallied most significantly as
confidence returned and concerns with business continuity faded.
Consumer discretionary stocks also performed well but the Fund had
lower participation as a result of an underweighted position. These
companies were most leveraged to an economic recovery and performed
exceedingly well despite often carrying higher valuations and less
attractive earnings potential. The Fund did have large exposure to
cable industry stocks inside this sector, but they proved less
sensitive and were largely left behind by the market rally.
The Fund's position in the pharmaceutical industry weighed on
performance as these companies were negatively affected by increased
competition, patent expirations, lack of new product pipelines, and
pressure on prescription utilization.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 19.5%
Consumer Discretionary 17.4%
Information Technology 15.2%
Health Care 12.4%
Consumer Staples 11.4%
Energy 7.0%
Industrials 6.2%
Communications Services 2.3%
Utilities 0.4%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 8.2%
Common Stocks 91.8%
Top 10 Holdings
(% of Portfolio)
American International Group, Inc. 4.1%
Pfizer, Inc. 3.7%
Cox Communications, Inc. 3.6%
Walgreen Company 3.5%
General Electric Company 3.4%
Comcast Corporation 3.4%
Microsoft Corporation 3.2%
Wal-Mart Stores, Inc. 3.0%
Tiffany & Company 3.0%
Altria Group, Inc. 2.7%
These holdings represent 33.6% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Management of the portfolio will continue to be driven by individual
stock selection of companies that are high quality and well managed
with businesses that are strategically differentiated with prospects
for superior long-term performance. The stocks we seek typically
experience "insider" buying patterns where key executives are
committing personal funds to their respective firms' stock. We also
seek positive earnings trends and look to buy at a valuation that
appears cheap relative to a company's longer-term prospects. This
approach will occasionally miss major market themes such as was
experienced over the past six months, but will, we believe, over the
long run, provide superior investment returns. At this point, economic
indicators point to a continuation of the current recovery. Stocks
appear to have discounted a good part of this recovery and our
valuation discipline will continue to be applied to stock selection to
the degree that the Fund's holdings reflect our
growth-at-a-reasonable-price approach.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AALGX BBLGX IILGX
Transfer Agent ID 017 067 047
Net Assets $2,793,059,763 $80,820,001 $80,219,017
NAV $28.20 $26.75 $28.28
NAV -- High* 10/16/2003 -- $28.25 10/16/2003 -- $26.82 10/16/2003 -- $28.33
NAV -- Low* 5/1/2003 -- $25.35 5/1/2003 -- $24.15 5/1/2003 -- $25.42
Number of Holdings: 85 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
The AAL Consumer
Capital S&P 500 Price
Date Growth Fund Index** Index***
- ------------------------------------------------------------------------
October 31, 1993 9,450 10,000 10,000
1993 9,364 9,905 10,007
1994 9,436 10,024 10,007
1994 9,505 10,365 10,034
1994 9,261 10,084 10,069
1994 8,912 9,644 10,103
1994 9,037 9,768 10,117
1994 9,049 9,928 10,124
1994 8,852 9,685 10,158
1994 9,066 10,003 10,185
1994 9,325 10,413 10,226
1994 9,199 10,158 10,254
1994 9,426 10,387 10,261
1994 9,142 10,008 10,275
1995 9,306 10,157 10,275
1995 9,539 10,420 10,316
1995 9,851 10,826 10,357
1995 10,024 11,146 10,391
1995 10,336 11,474 10,426
1995 10,694 11,933 10,446
1995 10,832 12,210 10,467
1995 11,200 12,615 10,467
1995 11,153 12,646 10,494
1995 11,682 13,180 10,515
1995 11,621 13,133 10,549
1995 12,056 13,710 10,542
1996 12,191 13,974 10,535
1996 12,696 14,449 10,597
1996 12,717 14,583 10,631
1996 12,696 14,724 10,686
1996 13,008 14,941 10,728
1996 13,291 15,326 10,748
1996 13,281 15,384 10,755
1996 12,683 14,705 10,776
1996 12,947 15,015 10,796
1996 13,872 15,860 10,830
1996 14,039 16,297 10,865
1996 15,152 17,529 10,885
1997 14,879 17,182 10,885
1997 15,842 18,255 10,920
1997 15,681 18,399 10,954
1997 14,930 17,643 10,981
1997 15,681 18,696 10,995
1997 16,731 19,834 10,988
1997 17,488 20,723 11,002
1997 18,753 22,372 11,016
1997 17,831 21,118 11,036
1997 18,606 22,275 11,064
1997 18,402 21,531 11,091
1997 19,242 22,528 11,084
1998 19,874 22,914 11,071
1998 19,927 23,168 11,091
1998 21,502 24,839 11,112
1998 22,396 26,111 11,132
1998 22,656 26,373 11,153
1998 21,991 25,920 11,174
1998 23,383 26,973 11,187
1998 23,077 26,686 11,201
1998 19,571 22,827 11,215
1998 20,895 24,290 11,229
1998 22,533 26,265 11,256
1998 23,796 27,857 11,256
1999 25,476 29,463 11,249
1999 26,721 30,695 11,277
1999 26,169 29,741 11,290
1999 27,102 30,931 11,325
1999 27,912 32,129 11,407
1999 27,406 31,370 11,407
1999 28,860 33,111 11,407
1999 28,136 32,077 11,441
1999 27,443 31,919 11,469
1999 27,155 31,044 11,524
1999 29,016 33,008 11,544
1999 29,678 33,679 11,551
2000 31,236 35,663 11,551
2000 29,643 33,871 11,579
2000 28,672 33,230 11,647
2000 31,378 36,481 11,743
2000 30,502 35,383 11,750
2000 30,542 34,657 11,757
2000 31,428 35,511 11,826
2000 30,860 34,956 11,846
2000 32,195 37,127 11,860
2000 30,954 35,167 11,922
2000 31,515 35,019 11,942
2000 30,117 32,258 11,949
2001 30,895 32,416 11,942
2001 30,668 33,566 12,018
2001 29,141 30,505 12,066
2001 27,697 28,573 12,093
2001 29,225 30,793 12,141
2001 28,981 30,999 12,196
2001 27,959 30,245 12,217
2001 27,403 29,947 12,183
2001 25,675 28,073 12,183
2001 23,922 25,806 12,238
2001 24,613 26,298 12,196
2001 26,181 28,315 12,176
2002 26,585 28,563 12,128
2002 26,180 28,146 12,155
2002 25,673 27,604 12,203
2002 26,635 28,642 12,272
2002 25,176 26,905 12,340
2002 25,032 26,707 12,340
2002 23,120 24,804 12,347
2002 21,321 22,871 12,361
2002 21,405 23,022 12,402
2002 19,024 20,522 12,423
2002 20,789 22,327 12,454
2002 21,659 23,640 12,454
2003 20,536 22,252 12,426
2003 20,139 21,670 12,481
2003 19,919 21,344 12,577
2003 20,088 21,551 12,653
2003 21,484 23,325 12,626
2003 22,449 24,553 12,605
2003 22,478 24,866 12,619
2003 22,792 25,305 12,632
2003 23,122 25,798 12,681
2003 22,868 25,524 12,722
October 31, 2003 $23,902 $26,968 $12,708
Average Annual Total Returns/1/
As of October 130, 2003
Class A/2/ 1-Year 5-Year 10-Year
- ----------------------------------------------------------------
without sales charge 14.97% 1.19% 9.72%
with sales charge 8.66% 0.05% 9.11%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 13.59% 0.13% 6.24%
with sales charge 9.59% 0.13% 6.24%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 15.53% 1.59% 3.98%
Footnotes read:
* As you compare performance, please note that the Fund's
performance reflects the maximum 5.5% sales charge,
while the S&P 500 Index and the Consumer Price 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 S&P 500 Index is an index that represents the average
performance of a group of 500 large-capitalization
stocks. It is not possible to invest directly in the
Index. The performance of the Index does not reflect
deductions for fees, expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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, Portfolio Manager
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.
For the six-month period ended October 31, 2003, The AAL Large Company
Index Fund returned 15.21% versus a return for the S&P 500 Index of
15.62% over this time period. The difference in performance between
the Fund and the benchmark was primarily a result of the expenses
charged to the Fund that are not applicable to the Index. The Fund's
investment objective is to provide returns approximating that of the
S&P 500 Index, after fees and expenses. We were again successful in
achieving that objective.
Economic Upturn Positive for Stocks
Although the months of June and September brought negative returns for
the Fund, the other months proved rewarding and the Fund generally
trended upward over the past six months. The September decline was
closely followed by another strong period for stocks in October to
close the period. Stocks in every economic sector showed positive
returns for the six-month period overall with information technology
and materials stocks leading on the upside with gains of over 29% and
20%, respectively, for the period.
The AAL Large Company Index Fund, as an Index portfolio, 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,
transaction costs, and minor differences in portfolio composition
relative to that of the Index. All of these variables will have less
of an impact on performance as the portfolio grows in size.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 20.4%
Information Technology 17.4%
Health Care 12.8%
Consumer Discretionary 11.2%
Consumer Staples 11.1%
Industrials 10.5%
Energy 5.3%
Communications Services 3.3%
Utilities 2.8%
Materials 2.8%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 2.4%
Common Stocks 97.6%
Top 10 Holdings
(% of Portfolio)
General Electric Company 2.9%
Microsoft Corporation 2.8%
Wal-Mart Stores, Inc. 2.6%
Pfizer, Inc. 2.5%
Citigroup, Inc. 2.5%
Exxon Mobil Corporation 2.4%
Intel Corporation 2.2%
American International Group, Inc. 1.6%
International Business Machines Corporation 1.5%
Johnson & Johnson 1.5%
These holdings represent 22.5% of the Fund's total investment
portfolio.
Footnotes read:
The returns shown do not reflect taxes a shareholder would pay on
distributions or redemptions.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Looking forward, we maintain an optimistic outlook. The U.S. and
global economies are rebounding, and although unemployment numbers
have remained sluggish they are showing signs of improvement. Another
positive factor is a low inflation rate. By adding in the September
quarterly corporate earnings, the positive market factors from the
past six months look good for the foreseeable market as well.
Portfolio Facts
As of October 31, 2003
Institutional Share
------------------
Ticker IILCX
Transfer Agent ID 057
Net Assets $24,955,480
NAV $7.27
NAV -- High* 10/31/2003 -- $7.27
NAV -- Low* 5/1/2003 -- $6.31
Number of Holdings: 501 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Institutional Class Shares*/1/
The AAL Consumer
Large Company S&P 500 Price
Date Index Fund Index** Index*
- ------------------------------------------------------------------------
December 31, 1999 10,000 10,000 10,000
2000 9,530 9,498 10,024
2000 9,360 9,318 10,083
2000 10,270 10,229 10,166
2000 9,950 9,922 10,172
2000 9,740 9,718 10,178
2000 9,990 9,958 10,238
2000 9,840 9,802 10,255
2000 10,450 10,411 10,267
2000 9,900 9,861 10,321
2000 9,850 9,819 10,339
2000 9,070 9,045 10,345
2001 9,113 9,089 10,339
2001 9,426 9,412 10,404
2001 8,558 8,554 10,446
2001 8,023 8,012 10,469
2001 8,639 8,634 10,511
2001 8,690 8,692 10,559
2001 8,488 8,481 10,576
2001 8,397 8,397 10,547
2001 7,872 7,872 10,547
2001 7,236 7,236 10,594
2001 7,347 7,374 10,559
2001 7,902 7,940 10,541
2002 7,965 8,009 10,499
2002 7,853 7,892 10,523
2002 7,700 7,740 10,564
2002 7,985 8,031 10,624
2002 7,497 7,544 10,683
2002 7,446 7,489 10,683
2002 6,918 6,955 10,689
2002 6,390 6,413 10,701
2002 6,431 6,455 10,737
2002 5,740 5,754 10,755
2002 6,238 6,260 10,781
2002 6,593 6,629 10,781
2003 6,207 6,239 10,758
2003 6,043 6,076 10,805
2003 5,950 5,985 10,888
2003 5,991 6,043 10,954
2003 6,496 6,540 10,930
2003 6,835 6,885 10,912
2003 6,918 6,973 10,924
2003 7,031 7,096 10,936
2003 7,165 7,234 10,978
2003 7,082 7,157 11,013
October 31, 2003 $ 7,484 $ 7,562 $11,001
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Institutional Class/2/ 1-Year 12/31/1999
- ----------------------------------------------------------------
Net Asset Value 19.98% (7.28)%
Footnotes read:
* As you compare performance, please note that the Fund's
performance reflects Fund expenses, net of any
reimbursements, while the Consumer Price Index and the
S&P 500 Index do not reflect 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. It is not possible to invest
directly in the Index.
*** The S&P 500 Index is an index that represents the average
performance of a group of 500 large-capitalization
stocks. "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 or promoted by
Standard & Poor's and Standard & Poor's makes no
representation regarding the advisability of investing
in the product. Index funds are subject to the same
market risks associated with the stocks in their
respective indexes. It is not possible to invest
directly in the Index. The performance of the Index
does not reflect deductions for fees, expenses or
taxes.
/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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/2/ Institutional Class shares have no sales load and are for
institutional shareholders only.
The AAL Large Company Index Fund II
[PHOTO OMITTED: KEVIN R. BRIMMER]
Kevin R. Brimmer, Portfolio Manager
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.
For the six-month period ended October 31, 2003, The AAL Large Company
Index Fund II returned 15.24% versus a return for the S&P 500 Index of
15.62% over this time period. The difference in performance between
the Fund and the benchmark was primarily a result of the expenses
charged to the Fund that are not applicable to the Index. The Fund's
investment objective is to provide returns approximating that of the
S&P 500 Index, after fees and expenses. We were again successful in
achieving that objective.
Economic Upturn Positive for Stocks
Although the months of June and September brought negative returns for
the Fund, the other months proved rewarding and the Fund generally
trended upward over the past six months. The September decline was
closely followed by another strong period for stocks in October to
close the period. Stocks in every economic sector showed positive
returns for the six-month period overall with information technology
and materials stocks leading on the upside with gains of over 29% and
20%, respectively, for the period.
The AAL Large Company Index Fund II, as an Index portfolio, 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,
transaction costs, and minor differences in portfolio composition
relative to that of the Index. All of these variables will have less
of an impact on performance as the portfolio grows in size.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 20.5%
Information Technology 17.4%
Health Care 12.7%
Consumer Discretionary 11.2%
Consumer Staples 11.0%
Industrials 10.3%
Energy 5.3%
Communications Services 3.3%
Materials 2.9%
Utilities 2.9%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 2.5%
Common Stocks 97.5%
Top 10 Holdings
(% of Portfolio)
General Electric Company 2.9%
Microsoft Corporation 2.8%
Wal-Mart Stores, Inc. 2.6%
Pfizer, Inc. 2.5%
Citigroup, Inc. 2.4%
Exxon Mobil Corporation 2.4%
Intel Corporation 2.2%
American International Group, Inc. 1.6%
International Business Machines Corporation 1.5%
Johnson & Johnson 1.5%
These holdings represent 22.4% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Looking forward, we maintain an optimistic outlook. The U.S. and
global economies are rebounding, and although unemployment numbers
have remained sluggish they are showing signs of improvement. Another
positive factor is a low inflation rate. By adding in the September
quarterly corporate earnings, the positive market factors from the
past six months look good for the foreseeable market as well.
Portfolio Facts
As of October 31, 2003
A Share B Share
------------------ ------------------
Ticker AALCX BLCIX
Transfer Agent ID 031 081
Net Assets $37,498,981 $4,019,224
NAV $7.26 $7.05
NAV -- High* 10/31/2003 -- $7.26 10/14/2003 -- $7.05
NAV -- Low* 5/1/2003 -- $6.29 5/1/2003 -- $6.15
Number of Holdings: 5 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
The AAL Consumer
Large Company S&P 500 Price
Date Index Fund II Index*** Index**
- ------------------------------------------------------------------------
July 1, 2000 9,450 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
2001 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
2002 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
2003 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
2003 5,978 6,501 10,676
2003 6,282 6,843 10,659
2003 6,367 6,931 10,671
2003 6,472 7,053 10,682
2003 6,595 7,190 10,723
2003 6,519 7,114 10,758
October 31, 2003 $6,889 $ 7,517 $10,746
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 20.10% (9.06)%
with sales charge 13.55% (10.59)%
From
Inception
Class B/2/ 1-Year 7/1/2000
- ----------------------------------------------------------------
without sales charge 18.69% (9.97)%
with sales charge 14.69% (10.51)%
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. It is not possible to invest
directly in the Index.
*** The S&P 500 Index is an index that represents the average
performance of a group of 500 large-capitalization
stocks. "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 or promoted by
Standard & Poor's and Standard & Poor's makes no
representation regarding the advisability of investing
in the product. Index funds are subject to the same
market risks associated with the stocks in their
respective indexes. It is not possible to invest
directly in the Index. The performance of the Index
does not reflect deductions for fees, expenses or
taxes.
/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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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.
The AAL Equity Income Fund
[LOGO OMITTED: THRIVENT INVESTMENT MANAGEMENT]
Thrivent Investment Management Inc.
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.
Value stocks generated very strong returns over the six-month period
ending October 31, 2003. The AAL Equity Income Fund returned 15.63%
over the period, while the median return of the Fund's Lipper, Inc.,
peer group returned 15.64%. The Fund's market benchmark, the S&P
500/Barra Value Index, gaining 18.46% over the same period.
Low Quality Stocks Rally
Stocks continued their rally that began in early March, as economic
data points began to show signs of improvement. During the period, the
portfolio was gradually repositioned away from some of the more
defensive sectors and into a slightly more pro-cyclical stance in
anticipation of a further pick-up in the economy. Weightings were
increased in sectors such as industrials and decreased in areas such
as health care and consumer staples. This strategy contributed to the
Fund's performance over the period.
The strongest sectors on an absolute basis during the period included
information technology, industrials, and consumer discretionary. The
more cyclical areas tended to perform better as the market was
anticipating a strengthening economy. Health care, which is generally
considered less sensitive to economic cycles, was one of the weakest
performers.
The Fund's relative performance against its benchmark's was hurt by
weak performance in media stocks, which have not fared well due to a
soft advertising environment. Financials were the biggest contributor
to absolute performance, but the Fund's commercial bank holdings
underperformed on a relative basis. A major bank acquisition and
speculation regarding additional buyout targets prompted a rally in
these stocks that did not benefit the Fund's larger bank holdings.
Strong performance in energy holdings was the biggest contributor to
relative performance for the period, while solid returns in the
consumer staples and materials sectors also contributed.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 30.1%
Consumer Discretionary 11.7%
Industrials 10.6%
Energy 9.9%
Information Technology 9.8%
Materials 5.9%
Health Care 5.9%
Consumer Staples 5.6%
Communications Services 4.5%
Utilities 3.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 2.4%
Common Stocks 97.6%
Top 10 Holdings
(% of Portfolio)
Citigroup, Inc. 4.1%
Exxon Mobil Corporation 2.8%
Bank of America Corporation 2.4%
Wells Fargo & Company 2.0%
ConocoPhillips 1.9%
J.P. Morgan Chase & Company 1.6%
Hewlett-Packard Company 1.6%
American International Group, Inc. 1.4%
Federal National Mortgage Corporation 1.4%
U.S. Bancorp 1.4%
These holdings represent 20.6% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
Value stocks in nearly all sectors and industries have risen
substantially over the past eight months, as investors have expressed
confidence in the economic recovery. Valuations now reflect much
higher expectations of strong earnings growth for most companies, and
the "value" parameters have broadened. What remains to be seen is
whether or not those earnings come to fruition.
While we remain optimistic for both stocks and the economy, we have
slightly reduced the economic sensitivity of the Fund toward a more
neutral stance. Given that many value stocks are trading at levels
that already reflect a fair amount of good news, we continue to look
for more evidence of a continued economic expansion in the form of
increasing corporate earnings. As always, we continue to search for
larger company stocks with valuations that are reasonable given their
business outlook, and particularly those that will benefit the most as
the economy improves.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AAUTX BBEIX N/A
Transfer Agent ID 022 072 052
Net Assets $228,191,216 $7,947,880 $12,020,246
NAV $11.73 $11.67 $11.74
NAV -- High* 10/14/2003 -- $11.74 10/14/2003 -- $11.69 10/14/2003 -- $11.76
NAV -- Low* 5/1/2003 -- $10.18 5/1/2003 -- $10.15 5/1/2003 -- $10.20
Number of Holdings: 131 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
The AAL S&P Consumer
Equity 500/Barra Price
Date Income Fund Value Index** Index***
- ------------------------------------------------------------------------
March 18, 1994 9,450 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
1995 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
1996 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
1997 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
1998 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
1999 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
2000 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
2001 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
2002 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
2003 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
2003 13,438 20,969 12,540
2003 14,230 22,510 12,519
2003 14,423 22,675 12,533
2003 14,635 23,179 12,546
2003 14,926 23,679 12,594
2003 14,744 23,251 12,635
October 31, 2003 $15,538 $24,840 $12,621
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 5-Year 3/18/1994
- ----------------------------------------------------------------
without sales charge 18.37% 0.43% 5.30%
with sales charge 11.88% (0.70)% 4.69%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 16.99% (0.60)% 3.31%
with sales charge 12.99% (0.60)% 3.31%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 19.03% 0.91% 1.74%
* As you compare performance, please note that the Fund's
performance reflects the maximum 5.5% sales charge,
while the S&P 500/Barra Value Index and the Consumer
Price 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 S&P 500/Barra Value Index is an capitalization-weighted index
comprised of the lowest price-to-book ratio securities
in the S&P 500 Index. The S&P 500/Barra Value 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 these Indexes. The performance of
these Indexes does not reflect deductions for fees,
expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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]
[PHOTO OMITTED: ALAN D. ONSTAD]
Frederick L. Plautz (left) and Alan D. Onstad (right), Portfolio
Co-Managers
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.
Stocks rallied sharply while high-quality bonds turned in flat
performance over the six-month period ended October 31, 2003. Amid
this environment, The AAL Balanced Fund turned in a 7.37% total
return, trailing its Lipper, Inc. peer group of similarly managed
hybrid funds, which returned a median of 10.18%. The S&P 500 Index, a
broad measure of U.S. large company stocks, posted a 15.62% total
return while the Lehman Brothers Aggregate Bond Index, a proxy for
high-quality bond performance, registered a 0.56% total return.
Stocks Soar on Improved Earnings
The equities portion of the Fund posted excellent absolute performance
as corporate earnings continued to show impressive improvement and the
U.S. economy accelerated. On a relative basis, the stock portion of
the Fund underperformed due to a more defensive stance. We took an
underweight position in the information technology sector and were
surprised at the speed and extent of the rebound in technology stocks.
Many of the best performing technology stocks were of lower quality
and had what we believed to be less attractive prices and future
earnings potential. In spite of this, technology and consumer
discretionary stocks led the market rally and our lesser exposure to
these two sectors largely explains the Fund's lower performance
against its peers.
Bonds Slow as Interest Rates Rise
High-quality bond returns edged upward, cooling toward the end of the
period, as interest rates rase. The fixed-income portion of the Fund
performed admirably as it was bolstered by an overweighting to BBB
rated corporate bonds -- the best performing sector of the U.S.
high-quality bond market over the reporting period. The Fund's more
aggressive stance in corporate bonds helped shield it from rising
interest rates and provided attractive yields versus similar maturity
U.S. Treasuries.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Financials 19.4%
Consumer Discretionary 11.3%
Information Technology 8.5%
Mortgage-Backed Securiti 7.8%
Health Care 6.8%
Consumer Staples 6.7%
Energy 4.2%
Industrials 3.6%
Communications Services 3.4%
Asset-Backed Securities 3.0%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 15.4%
Common Stocks 50.9%
Long Term Fixed Income 33.7%
Top 10 Holdings
(% of Portfolio)
Federal National Mortgage Association 5.8%
Morgan Stanley and Company 3.8%
American International Group, Inc. 2.2%
Federal National Mortgage Association 2.0%
Pfizer, Inc. 2.0%
Cox Communications, Inc. 1.9%
Walgreen Company 1.9%
General Electric Company 1.8%
Comcast Corporation 1.8%
Microsoft Corporation 1.7%
These holdings represent 24.9% of the Fund's total investment
portfolio.
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.
Quoted Top Industries, Portfolio Composition and Top 10 Holdings are
subject to change.
Outlook
The U.S. economy appears poised to continue its winning ways and we
anticipate a continuation of the current recovery. Going forward, we
will continue to emphasize strong, high-quality companies with
long-term earnings potential for the equities portion of the Fund,
especially in the cable and media sector. Over longer time periods, we
expect this strategy will reward shareholders.
On the fixed-income side, we will continue to adhere to an overweight
position in corporate bonds as we expect this sector will be one of
the most attractive in an improving economic landscape. We also expect
to adhere to a higher mortgage-backed securities position than our
peers as these bonds typically perform well in a stable or gently
rising interest rate environment, which we expect over the next six
months. In order to mitigate the effects of potentially higher
interest rates, we intend to carry a shorter duration versus our
market benchmark, the Lehman Brothers Aggregate Bond Index.
The Fund's mix of high-quality bonds, large-company stocks, and
short-term money market instruments provides excellent diversification
benefits and is designed to withstand a wide variety of economic
environments.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AABFX BBBFX IBBFX
Transfer Agent ID 026 076 056
Net Assets $274,892,927 $19,140,473 $114,024,175
NAV $11.44 $11.39 $11.43
NAV -- High* 6/16/2003 -- $11.46 6/16/2003 -- $11.39 6/16/2003 -- $11.46
NAV -- Low* 5/1/2003 -- $10.74 5/1/2003 -- $10.69 5/1/2003 -- $10.73
Number of Holdings: 427 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
Lehman
The AAL Consumer Brothers
Balanced S&P 500 Price Aggregate
Date Fund Index*** Index**** Bond Index**
- ------------------------------------------------------------------------------
December 29, 1997 9,450 10,000 10,000 10,000
1998 9,450 10,180 9,988 10,008
1998 9,507 10,293 10,006 10,136
1998 9,932 11,035 10,025 10,129
1998 10,175 11,599 10,043 10,164
1998 10,241 11,716 10,062 10,217
1998 10,099 11,515 10,080 10,314
1998 10,502 11,982 10,093 10,401
1998 10,426 11,855 10,105 10,423
1998 9,569 10,143 10,118 10,593
1998 10,024 10,793 10,130 10,841
1998 10,416 11,670 10,155 10,783
1998 10,722 12,377 10,155 10,845
1999 11,155 13,090 10,149 10,877
1999 11,481 13,637 10,173 10,955
1999 11,270 13,213 10,186 10,764
1999 11,519 13,742 10,217 10,823
1999 11,721 14,274 10,291 10,858
1999 11,548 13,937 10,291 10,762
1999 11,829 14,710 10,291 10,728
1999 11,655 14,251 10,322 10,683
1999 11,499 14,180 10,347 10,677
1999 11,489 13,792 10,396 10,801
1999 11,908 14,664 10,415 10,841
1999 12,065 14,963 10,421 10,840
2000 12,378 15,844 10,421 10,788
2000 12,024 15,048 10,446 10,753
2000 11,877 14,763 10,508 10,883
2000 12,489 16,207 10,594 11,026
2000 12,281 15,720 10,601 10,994
2000 12,271 15,397 10,607 10,989
2000 12,552 15,777 10,669 11,218
2000 12,482 15,530 10,687 11,320
2000 12,811 16,494 10,700 11,484
2000 12,592 15,624 10,755 11,556
2000 12,743 15,558 10,774 11,633
2000 12,522 14,331 10,780 11,823
2001 12,788 14,401 10,774 12,042
2001 12,808 14,912 10,842 12,239
2001 12,525 13,552 10,885 12,346
2001 12,295 12,694 10,910 12,408
2001 12,662 13,680 10,954 12,356
2001 12,621 13,772 11,003 12,431
2001 12,381 13,437 11,022 12,478
2001 12,371 13,305 10,991 12,757
2001 12,011 12,472 10,991 12,903
2001 11,654 11,465 11,040 13,053
2001 11,933 11,683 11,003 13,326
2001 12,316 12,579 10,985 13,143
2002 12,402 12,690 10,941 13,059
2002 12,319 12,505 10,966 13,165
2002 12,194 12,263 11,009 13,292
2002 12,361 12,725 11,071 13,071
2002 12,027 11,953 11,133 13,325
2002 12,027 11,865 11,133 13,438
2002 11,536 11,020 11,139 13,554
2002 11,053 10,161 11,152 13,718
2002 11,148 10,228 11,189 13,949
2002 10,504 9,117 11,207 14,175
2002 11,011 9,919 11,235 14,110
2002 11,264 10,502 11,235 14,106
2003 10,993 9,886 11,211 14,398
2003 10,877 9,627 11,260 14,411
2003 10,877 9,482 11,347 14,610
2003 10,927 9,574 11,415 14,598
2003 11,438 10,363 11,390 14,719
2003 11,842 10,908 11,372 14,993
2003 11,853 11,047 11,384 14,963
2003 11,821 11,242 11,397 14,460
2003 11,949 11,461 11,440 14,556
2003 11,991 11,340 11,477 14,941
October 31, 2003 $12,281 $11,981 $11,465 $14,802
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
without sales charge 11.54% 3.35% 4.59%
with sales charge 5.37% 2.19% 3.58%
From
Inception
Class B/2/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
without sales charge 10.65% 2.41% 3.81%
with sales charge 6.65% 2.41% 3.81%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 12.09% 3.80% 4.96%
* As you compare performance, please note that the Fund's
performance reflects the maximum 5.5% sales charge,
while the Lehman Brothers Aggregate Bond Index, the S&P
500 Index and the Consumer Price 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 Lehman Brothers Aggregate Bond Index is an index that
encompasses five classes of fixed-income securities in
the United States: U.S. Treasury and U.S. government
agency securities, corporate debt obligations,
mortgage-backed securities and asset-backed securities.
It is not possible to invest directly in the Index. The
performance of the Index does not reflect deductions
for fees, expenses or taxes.
*** The S&P 500 Index is an index that represents the average
performance of a group of 500 large-capitalization
stocks. It is not possible to invest directly in the
Index. The performance of the Index does not reflect
deductions for fees, expenses or taxes.
**** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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 High Yield Bond Fund
[LOGO OMITTED: PACIFIC INVESTMENT MANAGEMENT COMPANY]
Pacific Investment Management Company, LLC, Portfolio Subadviser
The AAL High Yield Bond Fund seeks high current income and secondary
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.
The high yield bond market finished the six-month period ended October
31, 2003, considerably higher as the asset class continued its upward
momentum which began in late 2002. Given this environment, The AAL
High Yield Bond Fund posted a 8.67% total return, bettering its
Lipper, Inc., peer group of similar high yield bond funds which
recorded a 8.02% median total return over the identical period. The
Fund's market benchmark, the Merrill Lynch High Yield Cash Pay Index
posted a 8.64% total return for the reporting period.
Lower-Quality Bonds Perform Best
CCC rated bonds and even lower-rated issues drove performance,
outperforming BB and B rated issues for the thirteenth consecutive
month and more than doubling the returns of these higher quality tiers
over the six-month period. While high yield issues outperformed the
equity market, as represented by the S&P 500 Index, year-to-date, it
fell short over the last six months as stocks rallied in October. With
none of the broad high yield market sectors in the negative, the top
performing sectors for the period were transportation, aerospace &
defense, and telecom, while the worst performers were the metals &
mining and chemical sectors.
The Fund's emphasis on B rated bonds helped returns as B's outpaced
BB's. An overweight position in telecommunications -- a sector
devastated over the past three years -- contributed to the Fund's
strong performance as these bonds continued their strong recovery. An
underweight to building products was a notable positive as rising
interest rates were viewed unfavorably by this sector, specifically in
July and August. While an underweight to transportation was a positive
early in the year, as airlines began to recover from setbacks due to
the war in Iraq and the outbreak of SARS, an underweight here
detracted from performance for the six-month period. Exposure to
higher-quality BBB rated issues detracted from relative returns as
these issues underperformed the lower-quality tiers. Emerging market
bonds helped returns, as this asset class continued to gain amid
strong demand from investors drawn to its relatively high yields and
improving credit quality.
[GRAPHIC OMITTED: TOP INDUSTRIES]
Top Industries
Communications Services 23.9%
Utilities 15.8%
Consumer Cyclical 10.3%
Consumer Non-Cyclical 8.9%
Basic Materials 7.4%
Foreign 7.2%
Capital Goods 6.8%
Energy 6.5%
Financials 5.0%
Transportation 1.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Preferred Stocks 0.2%
Long Term Fixed Income 94.3%
Short Term Investments 4.5%
Common Stocks 1.0%
[GRAPHIC OMITTED: RATINGS DISTRIBUTIONS]
Moody's Bond Quality Ratings Distributions
Aaa 0.0%
Aa 0.0%
A 4.6%
Baa 3.3%
Ba 32.1%
B 48.0%
Caa 8.6%
Ca 0.5%
C 0.0%
D 2.4%
Not Rated 0.5%
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.
Quoted Top Industries, Portfolio Composition and Moody's Bond Quality
Ratings Distributions are subject to change.
Outlook
While credit fundamentals continue to improve, the dramatic tightening
of spreads and corresponding strong investment returns are likely
excessive and have resulted in rich valuations among certain sectors.
We plan to trim exposure selectively and take profits among these
overvalued issues. Moreover, we'll likely substitute these positions
with traditional high yield issues where valuations are more
attractive. Default rates continue their descent lower and we expect
this trend to persist as the rehabilitation of corporate balance
sheets continue. We believe high yield is still an attractive asset
class relative to other fixed income sectors due to its low
correlation to Treasuries, given our outlook for rising rates over the
long-term.
We continue to see value in the utility sector, which, unlike many of
the wounded sectors of last year that have made dramatic recoveries in
2003, still have some upside potential. While we believe many of the
energy producers are currently overvalued, we do still see upside
potential in certain industries such as energy pipelines. The
telecommunications and cable sectors continue to offer attractive
relative value and we plan to maintain our overweight to these areas.
We plan to maintain a below index duration and search for
opportunities among bonds maturing in the next five years as this is
the most attractive portion of the yield curve. Finally, we will plan
to retain our exposure to emerging market sovereign debt as this
sector offers attractive value relative to high yield corporate bonds.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AAHYX BBHYX N/A
Transfer Agent ID 025 075 055
Net Assets $128,112,899 $6,152,892 $3,592,496
NAV $6.57 $6.57 $6.56
NAV -- High* 10/21/2003 -- $6.57 10/21/2003 -- $6.57 10/21/2003 -- $6.57
NAV -- Low* 8/14/2003 -- $6.19 8/14/2003 -- $6.19 8/14/2003 -- $6.19
Number of Holdings: 242 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares**/1/
Merrill Lynch
The AAL High Yield Consumer
High Yield Cash Pay Price
Date Bond Fund Index*** Index****
- ------------------------------------------------------------------------
January 8, 1997 9,550 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
1998 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
1999 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
2000 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
2001 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
2002 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
2003 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
2003 10,901 13,603 11,599
2003 11,037 13,747 11,580
2003 11,315 14,125 11,592
2003 11,189 13,923 11,605
2003 11,360 14,099 11,649
2003 11,615 14,482 11,687
October 31, 2003 $11,846 $14,778 $11,674
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Class A/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 32.98% 3.30% 3.21%
with sales charge 27.04% 2.35% 2.52%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 31.70% 2.52% 2.67%
with sales charge 27.70% 2.52% 2.67%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 33.23% 3.63% 1.86%
Footnotes read:
* High-yield bonds carry greater volatility and risk than
investment-grade bonds.
** As you compare performance, please note that the Fund's
performance reflects the maximum 4.5% sales charge,
while the Merrill Lynch High Yield Cash Pay Index and
the Consumer Price 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 Merrill Lynch High Yield Cash Pay Index is an 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
performance of the Index does not reflect deductions
for fees, expenses or taxes.
**** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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, Portfolio Manager
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.*
Municipal bonds and bonds in general were volatile for the six-month
period ending October 31, 2003, due to the end of the war with Iraq,
tax cuts, and mixed economic reports. The AAL Municipal Bond Fund
returned 1.24% for the period, while the median return of the Fund's
Lipper, Inc., peer group was 1.07%. As a broad market comparison, the
Lehman Brothers Municipal Bond Index returned 1.47%.
The end of the war with Iraq, tax cuts and mixed economic reports
provided a backdrop for significant volatility in bond prices over the
period. The Federal Reserve continued to remain accommodative and
predicted that rates would stay low for several months. The Fed's
accommodative stance resulted in a steeper yield curve with the short
end of the curve reacting to Fed expectations and the long end of the
curve evaluating economic growth and prospects for an increase in
inflation.
Toward the middle of the period, and in the face of improving economic
news, we became more convinced interest rates would move up and
shortened the Fund's duration. This strategy held the Fund back from
outperforming its market index but was mitigated by our success in
locating certain spots on the yield curve that rallied significantly.
Of course, there are expenses associated with the Fund that do not
apply to an unmanaged market index.
Lower Quality Municipal Bonds Rally
Lower quality municipal bonds, especially airline bonds, rallied over
the period as the war ended and investors felt comfortable taking on
more risk. The Fund's BBB rated or lower quality investment grade
bonds performed well and contributed to performance. Tobacco bonds
were volatile over the period, but also contributed in a meaningful
way to performance.
Non-investment grade bonds, the lowest quality municipal bonds,
outperformed significantly for the period due to the continued low
quality bias. The Fund is unable to invest in these bonds because they
do not fit the appropriate risk profile. Despite the higher quality
nature of the Fund, we were still able to perform relatively well
within our Lipper peer group.
[GRAPHIC OMITTED: RATINGS DISTRIBUTIONS]
Moody's Bond Quality Ratings Distributions
Aaa 52.1%
Aa 15.8%
A 11.0%
Baa 18.6%
Ba 0.1%
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)
Education Revenue 4.4%
Electric Revenue 7.4%
Escrowed/Pre-refunded 10.5%
General Obligation 16.2%
Health Care 16.6%
Higher Education 4.3%
Housing Finance 11.1%
Miscellaneous Municipals 17.2%
Special Tax Revenue 6.3%
Water & Sewer 6.0%
Top 10 States
(% of Portfolio)
Texas 12.7%
Illinois 10.2%
New York 9.7%
California 8.6%
Colorado 5.3%
Washington 4.0%
Michigan 3.4%
Minnesota 3.1%
Florida 3.0%
Pennsylvania 2.5%
These holdings represent 62.5% of the Fund's total investment
portfolio.
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.
Quoted Moody's Bond Quality Ratings Distributions, Portfolio
Composition and Top 10 States are subject to change.
Outlook
Our outlook is for continued improvement in U.S. economy. We are
prepared for higher rates, which we think will come over the next six
to twelve months as the economy strengthens and Federal Reserve
decides it needs to tighten the money supply. We do not expect that
tightening will happen until we see healthy improvement in the labor
market and a closing of the "output gap", which could lead to higher
inflation.
We have been adding risk to the Fund where we feel it is appropriate
in order to take advantage of the improving economic environment.
Specifically, we have been purchasing bonds in the A and Baa rating
categories when we like the issue and think that we are being paid
well for the risk we are taking. Currently the duration of the Fund is
somewhere close to neutral compared to our Lipper peer group and our
intention is to be neutral or short given the increasing threat of
rising interest rates. As an ongoing effort, we are trying to increase
our average position size to make research efforts most productive.
If rates do rise, we anticipate a slowing of municipal new issue
supply. A lower supply of municipal bonds in 2004 combined with higher
rates would be good scenario for municipals to outperform U.S.
Treasuries.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AAMBX N/A N/A
Transfer Agent ID 015 065 045
Net Assets $645,232,185 $12,968,864 $3,480,675
NAV $11.42 $11.42 $11.42
NAV -- High* 6/13/2003 -- $11.90 6/13/2003 -- $11.89 6/13/2003 -- $11.90
NAV -- Low* 8/14/2003 -- $11.19 8/14/2003 -- $11.18 8/14/2003 -- $11.19
Number of Holdings: 297 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares**/1/
Lehman
Brothers
The AAL Municipal Consumer
Municipal Bond Price
Date Bond Fund Index*** Index****
- ------------------------------------------------------------------------
October 31, 1993 9,550 10,000 10,000
1993 9,447 9,912 10,007
1994 9,637 10,121 10,007
1994 9,743 10,237 10,034
1994 9,508 9,972 10,069
1994 9,126 9,565 10,103
1994 9,119 9,647 10,117
1994 9,175 9,730 10,124
1994 9,144 9,671 10,158
1994 9,302 9,848 10,185
1994 9,333 9,882 10,226
1994 9,178 9,737 10,254
1994 9,030 9,564 10,261
1994 8,856 9,391 10,275
1995 9,085 9,598 10,275
1995 9,305 9,872 10,316
1995 9,615 10,159 10,357
1995 9,701 10,276 10,391
1995 9,758 10,288 10,426
1995 10,038 10,617 10,446
1995 9,958 10,524 10,467
1995 10,015 10,623 10,467
1995 10,109 10,758 10,494
1995 10,166 10,826 10,515
1995 10,356 10,984 10,549
1995 10,593 11,166 10,542
1996 10,745 11,273 10,535
1996 10,790 11,358 10,597
1996 10,736 11,282 10,631
1996 10,574 11,137 10,686
1996 10,513 11,106 10,728
1996 10,525 11,102 10,748
1996 10,631 11,223 10,755
1996 10,733 11,324 10,776
1996 10,706 11,322 10,796
1996 10,916 11,480 10,830
1996 11,047 11,610 10,865
1996 11,306 11,822 10,885
1997 11,217 11,772 10,885
1997 11,200 11,795 10,920
1997 11,316 11,903 10,954
1997 11,116 11,744 10,981
1997 11,211 11,843 10,995
1997 11,397 12,021 10,988
1997 11,537 12,149 11,002
1997 11,964 12,485 11,016
1997 11,767 12,368 11,036
1997 11,962 12,515 11,064
1997 12,038 12,596 11,091
1997 12,122 12,670 11,084
1998 12,376 12,854 11,071
1998 12,517 12,987 11,091
1998 12,488 12,991 11,112
1998 12,471 13,003 11,132
1998 12,388 12,944 11,153
1998 12,639 13,149 11,174
1998 12,689 13,201 11,187
1998 12,693 13,234 11,201
1998 12,928 13,438 11,215
1998 13,130 13,606 11,229
1998 13,044 13,605 11,256
1998 13,094 13,653 11,256
1999 13,117 13,688 11,249
1999 13,286 13,850 11,277
1999 13,175 13,790 11,290
1999 13,204 13,809 11,325
1999 13,230 13,843 11,407
1999 13,113 13,763 11,407
1999 12,879 13,565 11,407
1999 12,880 13,614 11,441
1999 12,652 13,505 11,469
1999 12,621 13,511 11,524
1999 12,376 13,364 11,544
1999 12,541 13,507 11,551
2000 12,377 13,406 11,551
2000 12,275 13,348 11,579
2000 12,458 13,503 11,647
2000 12,802 13,798 11,743
2000 12,685 13,716 11,750
2000 12,575 13,645 11,757
2000 12,946 14,006 11,826
2000 13,124 14,201 11,846
2000 13,339 14,420 11,860
2000 13,271 14,345 11,922
2000 13,428 14,502 11,942
2000 13,548 14,611 11,949
2001 13,864 14,972 11,942
2001 13,974 15,121 12,018
2001 14,020 15,169 12,066
2001 14,152 15,305 12,093
2001 13,996 15,139 12,141
2001 14,157 15,302 12,196
2001 14,278 15,404 12,217
2001 14,519 15,633 12,183
2001 14,824 15,890 12,183
2001 14,762 15,837 12,238
2001 14,956 16,025 12,196
2001 14,818 15,890 12,176
2002 14,640 15,740 12,128
2002 14,883 16,013 12,155
2002 15,073 16,206 12,203
2002 14,765 15,888 12,272
2002 15,014 16,199 12,340
2002 15,096 16,297 12,340
2002 15,256 16,470 12,347
2002 15,450 16,681 12,361
2002 15,613 16,882 12,402
2002 15,944 17,252 12,423
2002 15,606 16,966 12,454
2002 15,553 16,895 12,454
2003 15,876 17,252 12,426
2003 15,810 17,208 12,481
2003 16,062 17,449 12,577
2003 16,036 17,460 12,653
2003 16,122 17,575 12,626
2003 16,541 17,986 12,605
2003 16,459 17,910 12,619
2003 15,853 17,283 12,632
2003 15,963 17,412 12,681
2003 16,393 17,924 12,722
October 31, 2003 $16,322 $17,834 $12,708
Average Annual Total Returns/1/
As of October 31, 2003
Class A/2/ 1-Year 5-Year 10-Year
- ----------------------------------------------------------------
without sales charge 4.59% 4.59% 5.51%
with sales charge (0.14)% 3.63% 5.03%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 3.74% 3.74% 5.09%
with sales charge (0.26)% 3.74% 5.09%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 4.89% 4.91% 5.17%
Footnotes read:
* Investors may be subject to state taxes and federal alternative
minimum tax.
** As you compare performance, please note that the Fund's
performance reflects the maximum 4.5% sales charge,
while the Lehman Brothers Municipal Bond Index and the
Consumer Price 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 Lehman Brothers Municipal Bond Index is a market
value-weighted index of investment grade municipal
bonds with maturities of one year or more. It is not
possible to invest directly in the Index. The
performance of the Index does not reflect deductions
for fees, expenses or taxes.
**** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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]
[PHOTO OMITTED: MICHAEL G. LANDREVILLE]
Alan D. Onstad (left) and Michael G. Landreville (right), Portfolio
Co-Managers
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.
High-quality bond returns slowed in a rising interest rate environment
over the six-month period ended October 31, 2003, but still registered
positive gains for investors. The AAL Bond Fund posted a total return
of 1.33%, bettering its Lipper, Inc., peer group of similar
intermediate term high-quality bond funds, which had a 0.55% median
total return. The Fund's market benchmark, the Lehman Brothers
Aggregate Bond Index, ended the period with a 0.56% total return.
Corporate Securities Continue Gains
Benefiting from a resurgent U.S. economy, corporate bonds finished the
reporting period as the strongest performer among the U.S.
fixed-income sectors. The Fund's overweight position in these
securities boosted its returns over both its peer group and market
benchmark. Within the corporate bond sector, the Fund was overweight
to the BBB credit rating category, which was the best performing
sector within the corporate universe. BBB rated securities returned
just over 3% during the last six months. In addition to the corporate
overweight, the Fund was underweight to U.S. Treasuries and Agencies,
which both had negative returns over the past half-year. Timing of
purchases and sales of mortgage-backed securities added modestly to
performance, as did the Fund's asset-backed and commercial
mortgage-backed holdings.
The Fund had a shorter than normal duration during the last six
months, but due to the corporate and mortgage-backed holdings, the
Fund was able to maintain a slight yield advantage. This allowed the
Fund to earn slightly more income than its peer group while at the
same time reducing interest rate risk. Both of these factors proved to
be a winning combination during a rising interest rate environment.
[GRAPHIC OMITTED: RATINGS DISTRIBUTIONS]
Moody's Bond Quality Ratings Distributions
Aaa 48.4%
Aa 0.6%
A 10.2%
Baa 36.8%
Ba 3.5%
B 0.0%
Caa 0.0%
Ca 0.0%
C 0.0%
D 0.0%
Not Rated 0.6%
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Short Term Investments 17.4%
Long Term Fixed Income 82.6%
Top 10 Holdings
(% of Portfolio)
Federal National Mortgage Association 14.7%
Federal National Mortgage Association 5.1%
U.S. Treasury Notes 3.8%
Lehman Brothers, Inc. 2.3%
Chase Credit Card Master Trust 1.9%
GMAC Mortgage Corporation Loan Trust 1.7%
Federal Home Loan Mortgage Corporation 1.5%
LB-UBS Commercial Mortgage Trust 1.2%
Morgan Stanley and Company 1.2%
GMAC Commercial Mortgage Securities, Inc. 1.0%
These holdings represent 34.4% of the Fund's total investment
portfolio.
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.
Quoted Moody's Bond Quality Ratings Distributions, Portfolio
Composition and Top 10 Holdings are subject to change.
Outlook
Looking forward over the next six months, we envision a steadily
improving economy with corporate earnings on the upswing. This should
allow corporations to pay down debt and continue to improve their
balance sheets. As a result, debt issuance is likely to be down year
over year. All these factors -- debt reduction, improving earnings and
low new issuance of debt -- bode well for interest rate spreads on
corporate bonds. We look for the Federal Reserve to be on hold with
regard to interest rate adjustments into the second quarter and for
ten-year Treasury yields to be range-bound between 4% and 4 1/2 %. If
this proves to be the case, mortgage-backed securities should also
outperform. Given this prospective environment, we intend to adhere to
our current overweight positions of both corporate bonds and
mortgage-backed securities as we feel they offer the best
opportunities for our investors.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AAINX BBFBX IIINX
Transfer Agent ID 016 066 046
Net Assets $480,631,864 $13,356,469 $31,471,302
NAV $10.22 $10.23 $10.23
NAV -- High* 6/13/2003 -- $10.60 6/13/2003 -- $10.60 6/13/2003 -- $10.60
NAV -- Low* 8/13/2003 -- $10.04 8/14/2003 -- $10.04 8/14/2003 -- $10.04
Number of Holdings: 132 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Class A Shares*/1/
Lehman
Brothers
The AAL Aggregate Consumer
Bond Bond Price
Date Fund Index** Index***
- ------------------------------------------------------------------------
October 31, 1993 9,550 10,000 10,000
1993 9,418 9,915 10,007
1994 9,467 9,969 10,007
1994 9,592 10,103 10,034
1994 9,377 9,928 10,069
1994 9,143 9,683 10,103
1994 9,045 9,606 10,117
1994 9,033 9,604 10,124
1994 9,019 9,583 10,158
1994 9,155 9,773 10,185
1994 9,174 9,786 10,226
1994 9,048 9,642 10,254
1994 9,026 9,633 10,261
1994 8,978 9,612 10,275
1995 9,017 9,678 10,275
1995 9,165 9,870 10,316
1995 9,351 10,104 10,357
1995 9,420 10,166 10,391
1995 9,537 10,308 10,426
1995 9,838 10,707 10,446
1995 9,898 10,786 10,467
1995 9,856 10,761 10,467
1995 9,964 10,891 10,494
1995 10,052 10,997 10,515
1995 10,175 11,140 10,549
1995 10,327 11,307 10,542
1996 10,466 11,466 10,535
1996 10,519 11,542 10,597
1996 10,288 11,341 10,631
1996 10,198 11,263 10,686
1996 10,126 11,199 10,728
1996 10,092 11,177 10,748
1996 10,204 11,327 10,755
1996 10,240 11,358 10,776
1996 10,228 11,339 10,796
1996 10,390 11,536 10,830
1996 10,617 11,792 10,865
1996 10,799 11,994 10,885
1997 10,702 11,882 10,885
1997 10,745 11,919 10,920
1997 10,766 11,948 10,954
1997 10,666 11,816 10,981
1997 10,777 11,993 10,995
1997 10,864 12,106 10,988
1997 11,000 12,250 11,002
1997 11,282 12,580 11,016
1997 11,198 12,473 11,036
1997 11,359 12,657 11,064
1997 11,518 12,840 11,091
1997 11,546 12,899 11,084
1998 11,663 13,029 11,071
1998 11,798 13,196 11,091
1998 11,756 13,187 11,112
1998 11,799 13,232 11,132
1998 11,839 13,301 11,153
1998 11,948 13,427 11,174
1998 12,041 13,541 11,187
1998 12,046 13,570 11,201
1998 12,255 13,791 11,215
1998 12,525 14,113 11,229
1998 12,420 14,039 11,256
1998 12,363 14,118 11,256
1999 12,436 14,161 11,249
1999 12,498 14,262 11,277
1999 12,268 14,013 11,290
1999 12,352 14,091 11,325
1999 12,385 14,135 11,407
1999 12,251 14,012 11,407
1999 12,202 13,967 11,407
1999 12,132 13,907 11,441
1999 12,118 13,900 11,469
1999 12,241 14,062 11,524
1999 12,260 14,114 11,544
1999 12,280 14,113 11,551
2000 12,231 14,045 11,551
2000 12,190 13,999 11,579
2000 12,307 14,168 11,647
2000 12,439 14,354 11,743
2000 12,368 14,314 11,750
2000 12,345 14,307 11,757
2000 12,599 14,605 11,826
2000 12,694 14,737 11,846
2000 12,884 14,951 11,860
2000 12,965 15,045 11,922
2000 12,997 15,144 11,942
2000 13,260 15,392 11,949
2001 13,547 15,678 11,942
2001 13,719 15,934 12,018
2001 13,846 16,073 12,066
2001 13,929 16,153 12,093
2001 13,861 16,086 12,141
2001 13,931 16,184 12,196
2001 13,955 16,245 12,217
2001 14,298 16,608 12,183
2001 14,468 16,798 12,183
2001 14,647 16,994 12,238
2001 14,907 17,349 12,196
2001 14,728 17,110 12,176
2002 14,650 17,001 12,128
2002 14,717 17,139 12,155
2002 14,784 17,305 12,203
2002 14,517 17,017 12,272
2002 14,694 17,347 12,340
2002 14,801 17,495 12,340
2002 14,859 17,646 12,347
2002 14,942 17,859 12,361
2002 15,213 18,160 12,402
2002 15,484 18,455 12,423
2002 15,367 18,370 12,454
2002 15,322 18,365 12,454
2003 15,648 18,744 12,426
2003 15,673 18,761 12,481
2003 15,933 19,020 12,577
2003 15,948 19,005 12,653
2003 16,131 19,162 12,626
2003 16,472 19,519 12,605
2003 16,486 19,480 12,619
2003 15,947 18,825 12,632
2003 16,018 18,950 12,681
2003 16,478 19,452 12,722
October 31, 2003 $16,346 $19,270 $12,708
Average Annual Total Returns/1/
As of October 130, 2003
Class A/2/ 1-Year 5-Year 10-Year
- ----------------------------------------------------------------
without sales charge 6.38% 5.65% 5.52%
with sales charge 1.61% 4.68% 5.04%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 5.36% 4.68% 5.74%
with sales charge 1.36% 4.68% 5.74%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 6.86% 6.09% 6.38%
* As you compare performance, please note that the Fund's
performance reflects the maximum 4.5% sales charge,
while the Lehman Brothers Aggregate Bond Index and the
Consumer Price 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 Lehman Brothers Aggregate Bond Index is an index that
encompasses five classes of fixed-income securities in
the United States: U.S. Treasury and U.S. government
agency securities, corporate debt obligations,
mortgage-backed securities and asset-backed securities.
It is not possible to invest directly in the Index. The
performance of the Index does not reflect deductions
for fees, expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/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, Portfolio Manager
The AAL Bond Index Fund strives for investment results similar to the
total return of the Lehman Brothers Aggregate Bond Index by investing
primarily in bonds and other debt securities included in the Index.
With the resurgence of the stock market and an economy that is finally
showing signs of life -- a potentially negative situation for
high-quality bond investors -- corporate bonds have boasted modest
gains over the six-month period ended October 31, 2003. The AAL Bond
Index Fund posted a 0.22% total return for the period, while the
Fund's unmanaged index benchmark, the Lehman Brothers Aggregate Bond
Index saw a 0.56% total return.
Lower-Quality Bonds Are Big Winners
As the economy has improved, investors willing to take more risk have
moved into high-yield, low-quality bonds, causing yields on U.S.
Treasuries to fluctuate and decline to a 40-year low during the first
six weeks of the period. This was followed by a two-month sell-off and
a resulting 1.2% increase in 10-year Treasury yields.
Most of the funds within our Lipper peer group handled this rally and
subsequent sell-off either by significantly overweighting in corporate
bonds, which were the best performing sector, or by lowering their
durations during the sell-off and lengthening them during the rally.
With the AAL Bond Index Fund, on the other hand, we strove to remain
as close to neutral as possible on all bond risk factors.
The Fund's weak performance as compared to the Lehman Brothers
Aggregate Bond Index was almost completely due to its performance in
July. We started the month with a long duration compared to our
benchmark. We adjusted our duration downward when our reports revealed
this discrepancy, by which time the market had already moved against
us. The backup in Treasury yields also had a negative impact on
absolute returns of the Fund, while corporate bonds helped returns.
Neither of these factors should have had a material impact versus our
benchmark. However, when compared to other funds within our Lipper
peer group, both hurt us because the actively managed funds were able
to lean into the trends when we could not.
[GRAPHIC OMITTED: RATINGS DISTRIBUTIONS]
Moody's Bond Quality Ratings Distributions
Aaa 74.2%
Aa 2.3%
A 10.3%
Baa 12.9%
Ba 0.3%
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 16.5%
Long Term Fixed Income 83.5%
Top 10 Holdings
(% of Portfolio)
Federal National Mortgage Association 7.2%
U.S. Treasury Notes 4.3%
Federal National Mortgage Association 3.7%
Federal National Mortgage Association 2.7%
Federal Home Loan Mortgage Corporation 2.3%
Federal Home Loan Mortgage Corporation 2.1%
U.S. Treasury Notes 2.1%
U.S. Treasury Notes 2.1%
Morgan Stanley and Company 1.8%
Federal Home Loan Mortgage Corporation 1.8%
These holdings represent 30.1% of the Fund's total investment
portfolio.
Footnotes read:
The returns shown do not reflect taxes a shareholder would pay on
distributions or redemptions.
Quoted Moody's Bond Quality Ratings Distributions, Portfolio
Composition and Top 10 Holdings are subject to change.
Outlook
The economy was very strong in the third quarter of 2003. We expect
that it will continue to grow, but at a more moderate pace. A growth
rate of 3.5 to 4.0% over the next year seems likely. We also expect
that inflation will remain well controlled. The Fed may start to raise
short-term interest rates. However, they will want to see sustained
growth in the economy and the jobs market before making any moves. If
this assumption is correct, Treasury bond yields should continue to
rise and corporates and other spread products could tighten. In the
end, lower-quality bonds will continue to beat higher-quality bonds
for the time being.
With that being said, the Fund will continue to follow our benchmark.
We will keep duration, yield curve exposure, and sector exposure in
line with the index. We will attempt to add value through security
selection, particularly in corporate bonds. In addition, we will buy
those bonds that appear fundamentally cheap and sell those that look
overpriced.
Portfolio Facts
As of October 31, 2003
Institutional Share
------------------
Ticker AABIX
Transfer Agent ID 059
Net Assets $40,425,984
NAV $10.73
NAV -- High * 6/13/2003 -- $11.20
NAV -- Low * 8/13/2003 -- $10.57
Number of Holdings: 160 * For the six months ended October 31, 2003
[GRAPHIC WORM CHART OMITTED: VALUE OF A $10,000 INVESTMENT]
Value of a $10,000 Investment
Institutional Class Shares*/1/
Lehman
The AAL Brothers 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 10,382 10,399 10,238
2000 10,472 10,493 10,255
2000 10,626 10,645 10,267
2000 10,705 10,712 10,321
2000 10,777 10,783 10,339
2000 10,965 10,959 10,345
2001 11,171 11,163 10,339
2001 11,332 11,345 10,404
2001 11,436 11,444 10,446
2001 11,496 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 11,796 11,825 10,547
2001 11,925 11,961 10,547
2001 12,107 12,100 10,594
2001 12,322 12,353 10,559
2001 12,168 12,183 10,541
2002 12,083 12,105 10,499
2002 12,167 12,203 10,523
2002 12,297 12,322 10,564
2002 12,062 12,117 10,624
2002 12,281 12,352 10,683
2002 12,401 12,457 10,683
2002 12,505 12,564 10,689
2002 12,652 12,716 10,701
2002 12,878 12,931 10,737
2002 13,081 13,140 10,755
2002 13,031 13,080 10,781
2002 13,001 13,076 10,781
2003 13,266 13,346 10,758
2003 13,275 13,358 10,805
2003 13,465 13,543 10,888
2003 13,446 13,532 10,954
2003 13,552 13,644 10,930
2003 13,792 13,898 10,912
2003 13,774 13,870 10,924
2003 13,277 13,404 10,936
2003 13,352 13,493 10,978
2003 13,721 13,850 11,013
October 31, 2003 $13,582 $13,721 $11,001
Average Annual Total Returns/1/
As of October 31, 2003
From
Inception
Institutional Class/2/ 1-Year 12/31/1999
- ----------------------------------------------------------------
Net Asset Value 4.23% 8.31%
Footnotes read:
* As you compare performance, please note that the Fund's
performance reflects Fund expenses, net of any
reimbursements, while the Lehman Brothers Aggregate
Bond Index and the Consumer Price Index do not reflect
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 Lehman Brothers Aggregate Bond Index is an index that
encompasses five classes of fixed-income securities in
the United States: U.S. Treasury and U.S. government
agency securities, corporate debt obligations,
mortgage-backed securities and asset-backed securities.
It is not possible to invest directly in the Index. The
performance of the Index does not reflect deductions
for fees, expenses or taxes.
*** 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. 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. For additional
information, refer to your prospectus which can be
obtained from your registered representative or by
calling (800) Thrivent. Please read your prospectus
carefully.
/2/ Institutional Class shares have no sales load and are for
institutional shareholders only.
The AAL Money Market Fund
[PHOTO OMITTED: WILLIAM D. STOUTEN]
William D. Stouten, Portfolio Manager
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.*
Money market yields declined along with overall short-term market
interest rates for the six-month period ending October 31, 2003. The
AAL Money Market Fund provided investors with a total return of 0.18%,
while the Fund's Lipper, Inc., peer group earned a median total return
of 0.20%.
Federal Reserve Policy
With thirteen cuts in the Federal Funds target rate since the
beginning of 2001, the overnight Federal Funds target rate of 1% is
now at the lowest level in over 40 years. The Federal Open Market
Committee (FOMC) lowered its target for the Federal Funds target rate
again in June due to fears of a falling price environment and
lackluster economic reports. The money market industry is now
operating in an environment that has never been experienced since the
first money market fund was introduced in 1971.
The average length of portfolio holdings was shorter than the peer
group through most of the period, reflecting our anticipation of
better economic news that would steepen the yield curve and allow us
to take advantage of higher yields. Fortunately, strong payroll
numbers combined with higher Gross Domestic Product growth rates in
the third calendar quarter provided market optimism, and allowed us to
take advantage of a steeper yield curve by lengthening our portfolio
to a level more in line with our Lipper peer group. This strategy
contributed to our performance over the period.
The Fund's underperformance compared to its Lipper peer group can be
partially explained by the Fund's focus on the highest quality money
market instruments. Maintaining a portfolio of only the highest
quality assets contributes to a slightly lower yield than our peer
group, but remains a core part of our conservative investment strategy
which is designed to meet our investors' primary objectives of safety
and liquidity. In addition, the Fund's underperformance can
also be attributed to a higher fee structure that allows for lower
minimum balances, generous checkwriting privileges, and other
beneficial features.
[GRAPHIC PIE CHART OMITTED: PORTFOLIO COMPOSITION (% OF PORTFOLIO)]
Portfolio Composition
(% of Portfolio)
Variable Rate Notes 4.4%
Certificates of Deposit 6.8%
Commercial Paper 88.8%
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.
Quoted Portfolio Composition is subject to change.
Outlook
We expect that the FOMC will raise the overnight Federal Funds target
rate in the coming months when it becomes convinced that the risks to
higher than desired growth and a rise in inflation outweigh the risks
of a fall in inflation and unsustained growth in the economy. As in
any interest rate environment, our strategy remains the same. We
continue to focus our efforts on conservative investments that
maximize safety and liquidity for our clients. We are confident that
as in any investing cycle, yields and returns historically provided by
money markets funds will return.
Portfolio Facts
As of October 31, 2003
A Share B Share Institutional Share
-------------- -------------- -------------------
Ticker AMMXX N/A AALXX
Transfer Agent ID 018 068 048
Net Assets $301,766,074 $2,278,123 $112,412,495
NAV $1.00 $1.00 $1.00
NAV -- High* 5/1/2003 -- $1.00 5/1/2003 -- $1.00 5/1/2003 -- $1.00
NAV -- Low* 5/1/2003 -- $1.00 5/1/2003 -- $1.00 5/1/2003 -- $1.00
Number of Holdings: 54 * For the six months ended October 31, 2003
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/
As of October 31, 2003
Class A/2/ 1-Year 5-Year 10-Year
- ----------------------------------------------------------------
Net Asset Value 0.54% 3.23% 3.87%
From
Inception
Class B/2/ 1-Year 5-Year 1/8/1997
- ----------------------------------------------------------------
without sales charge 0.24% 2.40% 2.99%
with sales charge (3.76)% 2.40% 2.99%
From
Inception
Institutional Class/3/ 1-Year 5-Year 12/29/1997
- ----------------------------------------------------------------
Net Asset Value 0.79% 3.54% 3.77%
Footnotes read:
* To the extent practicable, the Fund intends to maintain a stable
net asset value of $1.00 per share. An investment in
The AAL Money Market Fund is not insured or guaranteed
by the FDIC or any other government agency. Although
the Fund seeks to preserve the value of your investment
at $1 per share, it is possible to lose money by
investing in the Fund.
** 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 would have been lower. The returns shown do not
reflect taxes a shareholder would pay on distributions
or redemptions. For additional information, refer to
your prospectus which can be obtained from your
registered representative or by calling (800) Thrivent.
Please read your prospectus carefully.
/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.
The AAL Technology Stock Fund
Schedule of Investments as of October 31, 2003 (a) (unaudited)
Shares Common Stock (95.0%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
9,700 SBC Communications, Inc. $232,606
45,600 Sprint Corporation (PCS Group) * 198,360
5,200 Verizon Communications, Inc. 174,720
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 605,686
=========================================================================================================================
Consumer Discretionary (6.0%)
- -------------------------------------------------------------------------------------------------------------------------
9,400 Amazon.com, Inc.* 511,548
15,700 eBay, Inc. 878,258
11,200 InterActiveCorp * 411,152
2,100 Netflix, Inc.* 120,330
5,100 Pixar, Inc.* 350,931
39,700 Time Warner, Inc.* 607,013
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 2,879,232
=========================================================================================================================
Health Care (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
3,800 Baxter International, Inc. 101,004
3,300 Medtronic, Inc. 150,381
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 251,385
=========================================================================================================================
Industrials (1.1%)
- -------------------------------------------------------------------------------------------------------------------------
6,600 EDO Corporation 147,180
3,600 Lockheed Martin Corporation 166,896
2,300 Northrop Grumman Corporation 205,620
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 519,696
=========================================================================================================================
Information Technology (86.1%)
- -------------------------------------------------------------------------------------------------------------------------
15,300 Accenture, Ltd.* 358,020
5,800 Adobe Systems, Inc. 254,272
12,400 Agilent Technologies, Inc.* 309,008
38,800 Akamai Technologies, Inc.* 306,520
7,300 Amkor Technology, Inc.* 137,605
12,400 Analog Devices, Inc.* 549,692
21,000 Apple Computer, Inc.* 480,690
39,700 Applied Materials, Inc.* 927,789
10,500 ASML Holding NV ADR * 184,275
10,500 Asyst Technologies, Inc.* 195,825
11,100 Autodesk, Inc. 213,675
11,600 Avaya, Inc.* 150,104
30,500 BEA Systems, Inc.* 423,950
15,500 BMC Software, Inc.* 269,390
4,100 CDW Corporation 246,205
8,900 Check Point Software Technologies, Ltd.* 151,211
4,800 CheckFree Corporation * 132,144
17,100 ChipPAC, Inc.* 142,614
161,000 Cisco Systems, Inc.* 3,377,780
3,600 Cognos, Inc.* 124,092
21,500 Computer Associates International, Inc. 505,680
4,900 Computer Sciences Corporation * 194,138
6,800 Comverse Technology, Inc.* 122,672
55,900 Dell, Inc.* 2,019,108
3,600 Electronic Arts, Inc.* 356,544
55,400 EMC Corporation * 766,736
5,300 Fair Isaac Corporation 338,034
18,300 First Data Corporation 653,310
68,400 Hewlett-Packard Company 1,526,004
10,900 Informatica Corporation * 118,810
8,700 Integrated Device Technology, Inc.* 136,590
160,000 Intel Corporation 5,288,000
24,100 International Business Machines Corporation 2,156,468
4,300 Intersil Corporation 110,897
47,700 Interwoven, Inc.* 180,783
4,500 Itron, Inc.* 92,205
43,000 JDS Uniphase Corporation * 152,650
11,100 KLA-Tencor Corporation * 636,363
5,100 Lexmark International, Inc.* 375,411
8,200 Linear Technology Corporation 349,402
20,500 LSI Logic Corporation* 189,420
182,700 Lucent Technologies, Inc.* 584,640
6,500 Macrovision Corporation * 142,805
3,800 Manhattan Associates, Inc.* 105,792
8,600 Maxim Integrated Products, Inc. 427,506
5,200 Microchip Technology, Inc. 170,092
15,900 Micron Technology, Inc.* 228,006
136,000 Microsoft Corporation 3,556,400
55,400 Motorola, Inc. 749,562
15,100 Netegrity, Inc.* 179,086
9,700 Network Appliance, Inc.* 239,396
21,800 Nokia Corporation ADR 370,382
63,800 Nortel Networks Corporation * 283,910
3,400 Novellus Systems, Inc.* 140,386
3,200 NVE Corporation* 123,840
13,800 Opsware, Inc.* 114,816
137,100 Oracle Corporation * 1,639,716
38,600 Parametric Technology Corporation * 120,046
6,400 Paychex, Inc. 249,088
9,200 PMC-Sierra, Inc.* 167,164
4,900 QLogic Corporation * 274,645
19,500 QUALCOMM, Inc. 926,250
8,400 Red Hat, Inc.* 126,336
7,300 SAP AG 266,742
11,500 Siebel Systems, Inc.* 144,785
22,800 STMicroelectronics NV 607,392
3,500 Storage Technology Corporation * 84,350
6,800 SunGard Data Systems, Inc.* 190,740
35,400 Symbol Technologies, Inc. 442,146
3,600 Synopsys, Inc. 114,192
10,200 Taiwan Semiconductor Manufacturing Company, Ltd. ADR* 112,812
4,600 Teradyne, Inc.* 104,788
39,800 Texas Instruments, Inc. 1,151,016
22,500 VeriSign, Inc.* 357,075
9,800 VERITAS Software Corporation * 354,270
36,600 Wind River Systems, Inc.* 245,220
8,000 Xilinx, Inc.* 253,600
8,100 Yahoo!, Inc.* 353,970
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 40,907,048
=========================================================================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $47,880,775) 45,163,047
=========================================================================================================================
Shares Short-Term Investments (5.0%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
2,371,273 The AAL Money Market Fund 0.528% N/A $2,371,273
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 2,371,273
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $50,252,048) $47,534,320
=========================================================================================================================
* 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 Aggressive Growth Fund
Schedule of Investments as of October 31, 2003 (a) (unaudited)
Shares Common Stock (98.2%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
11,800 AT&T Wireless Services, Inc.* $85,550
9,700 Nextel Communications, Inc.* 234,740
6,600 Sprint Corporation (PCS Group) * 28,710
2,550 Verizon Communications, Inc. 85,680
5,150 Vodafone Group plc ADR 108,922
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 543,602
=========================================================================================================================
Consumer Discretionary (16.1%)
- -------------------------------------------------------------------------------------------------------------------------
2,700 Abercrombie & Fitch Company * 76,950
3,700 Amazon.com, Inc.* 201,354
850 AutoZone, Inc.* 81,685
5,850 Bed Bath & Beyond, Inc.* 247,104
5,100 Best Buy Company, Inc.* 297,381
900 Centex Corporation 87,750
4,750 Clear Channel Communications, Inc. 193,895
10,935 Comcast Corporation* 356,700
4,895 Cox Communications, Inc.* 166,773
6,800 eBay, Inc. 380,392
4,350 EchoStar Communications Corporation * 166,692
2,000 Fox Entertainment Group, Inc.* 55,400
1,050 Gannett Company, Inc. 88,316
5,300 Gap, Inc. 101,124
1,600 General Motors Corporation 68,272
2,500 Harley-Davidson, Inc. 118,525
1,800 Hollywood Entertainment Corporation * 27,360
15,920 Home Depot, Inc. 590,154
7,750 InterActiveCorp * 284,502
4,400 International Game Technology 144,100
950 Johnson Controls, Inc. 102,154
5,350 Kohl's Corporation * 299,974
950 Lennar Corporation 87,258
10,386 Liberty Media Corporation * 104,795
6,350 Lowe's Companies, Inc. 374,206
1,000 Michaels Stores, Inc. 47,470
1,750 NIKE, Inc. 111,825
2,750 Omnicom Group, Inc. 219,450
7,250 Staples, Inc.* 194,445
4,200 Starbucks Corporation * 132,720
6,900 Target Corporation 274,206
13,995 Time Warner, Inc.* 213,984
4,750 TJX Companies, Inc. 99,702
2,350 Tribune Company 115,268
4,600 Univision Communications, Inc.* 156,170
10,290 Viacom, Inc. 410,262
9,400 Walt Disney Company 212,816
1,850 Yum! Brands, Inc.* 63,159
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 6,954,293
=========================================================================================================================
Consumer Staples (7.9%)
- -------------------------------------------------------------------------------------------------------------------------
3,250 Altria Group, Inc. 151,125
3,150 Anheuser-Busch Companies, Inc. 155,169
5,900 Coca-Cola Company 273,760
3,850 Colgate-Palmolive Company 204,782
2,150 Costco Wholesale Corporation * 76,046
3,800 Gillette Company 121,220
11,150 PepsiCo, Inc. 533,193
5,500 Procter & Gamble Company 540,595
3,000 SYSCO Corporation 100,980
16,250 Wal-Mart Stores, Inc. 957,938
8,400 Walgreen Company 292,488
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 3,407,296
=========================================================================================================================
Energy (2.9%)
- -------------------------------------------------------------------------------------------------------------------------
2,502 Apache Corporation 174,439
3,850 Baker Hughes, Inc. 108,801
2,900 BJ Services Company * 95,149
1,250 Burlington Resources, Inc. 60,800
6,900 Chesapeake Energy Corporation 82,317
3,050 ENSCO International, Inc. 80,368
2,000 EOG Resources, Inc. 84,280
3,050 Exxon Mobil Corporation 111,569
4,300 Halliburton Company 102,684
1,900 Nabors Industries, Ltd.* 71,820
1,950 Schlumberger, Ltd. 91,592
4,955 Smith International, Inc.* 184,475
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,248,294
=========================================================================================================================
Financials (12.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,900 ACE, Ltd. 104,400
1,320 AFLAC, Inc. 48,154
800 Allstate Corporation 31,600
5,700 American Express Company 267,501
9,200 American International Group, Inc. 559,636
2,150 Bank of America Corporation 162,820
3,000 Bank of New York Company, Inc. 93,570
900 Bear Stearns Companies, Inc. 68,625
2,300 Capital One Financial Corporation 139,840
8,050 Charles Schwab Corporation 109,158
18,840 Citigroup, Inc. 893,016
4,715 Federal National Mortgage Corporation 338,018
550 FleetBoston Financial Corporation 22,214
2,350 Friedman, Billings, Ramsey Group, Inc. 46,812
3,520 Goldman Sachs Group, Inc. 330,528
3,350 J.P. Morgan Chase & Company 120,265
2,600 Lehman Brothers Holdings, Inc. 187,200
2,600 Marsh & McLennan Companies, Inc. 111,150
11,550 MBNA Corporation 285,862
1,850 Mellon Financial Corporation 55,260
4,200 Merrill Lynch & Company, Inc. 248,640
4,600 Morgan Stanley and Company 252,402
6,500 SLM Corporation 254,540
3,200 State Street Corporation 167,552
2,650 Wachovia Corporation 121,556
3,350 Wells Fargo & Company 188,672
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 5,208,991
=========================================================================================================================
Health Care (17.8%)
- -------------------------------------------------------------------------------------------------------------------------
6,550 Abbott Laboratories 279,161
1,900 AdvancePCS, Inc.* 97,793
1,650 Aetna, Inc. 94,726
1,450 Allergan, Inc.(b) 109,649
13,550 Amgen, Inc.* 836,848
1,100 Anthem, Inc.* 75,273
650 Barr Laboratories, Inc. 49,900
1,650 Becton, Dickinson and Company 60,324
1,450 Biomet, Inc. 51,997
5,200 Boston Scientific Corporation * 352,144
2,595 Cardinal Health, Inc. 153,987
1,500 Cephalon, Inc.* 70,440
1,300 Chiron Corporation * 71,019
4,850 Eli Lilly and Company 323,107
4,890 Forest Laboratories, Inc. 244,549
3,350 Genentech, Inc.* 274,600
2,350 Genzyme Corporation* 107,865
3,200 Gilead Sciences, Inc.* 174,656
13,100 Johnson & Johnson 659,323
1,600 MedImmune, Inc.* 42,656
11,930 Medtronic, Inc. 543,650
5,350 Merck & Company, Inc. 236,738
2,250 Mylan Laboratories, Inc. 54,338
40,735 Pfizer, Inc. 1,287,226
1,600 St. Jude Medical, Inc.* 93,056
1,450 Stryker Corporation 117,610
3,450 Teva Pharmaceutical Industries, Ltd. 196,270
7,350 UnitedHealth Group, Inc. 373,968
1,800 WellPoint Health Networks, Inc.* 160,020
7,910 Wyeth Corporation 349,147
2,500 Zimmer Holdings, Inc.* 159,525
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 7,701,565
=========================================================================================================================
Industrials (7.6%)
- -------------------------------------------------------------------------------------------------------------------------
5,350 3M Company 421,954
3,450 Allied Waste Industries, Inc.* 38,916
1,750 Apollo Group, Inc.* 111,178
1,850 Boeing Company 71,206
1,450 Career Education Corporation 77,648
1,450 Caterpillar, Inc. 106,256
6,500 Cendant Corporation * 132,795
2,650 Continental Airlines, Inc.* 50,615
750 Corinthian Colleges, Inc.* 46,440
1,300 Deere & Company 78,806
1,100 Dover Corporation 42,922
1,100 Emerson Electric Company 62,425
1,650 FedEx Corporation 125,004
35,850 General Electric Company 1,040,008
950 Illinois Tool Works, Inc. 69,872
950 Ingersoll-Rand Company 57,380
2,500 Lockheed Martin Corporation 115,900
1,400 Monster Worldwide, Inc.* 35,658
250 Northrop Grumman Corporation 22,350
3,850 Northwest Airlines Corporation * 52,706
1,050 Overnite Corporation (c) * 23,268
6,050 Tyco International, Ltd. 126,324
2,900 United Parcel Service, Inc. 210,308
1,950 United Technologies Corporation 165,146
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 3,285,085
=========================================================================================================================
Information Technology (32.0%)
- -------------------------------------------------------------------------------------------------------------------------
3,050 Accenture, Ltd.* 71,370
14,900 ADC Telecommunications, Inc.* 37,995
2,250 Adobe Systems, Inc.(d) 98,640
2,750 Advanced Micro Devices, Inc.* 41,800
3,750 Alcatel SA ADR 49,425
3,400 Amdocs, Ltd.* 72,964
5,860 Analog Devices, Inc.* 259,774
2,050 Apple Computer, Inc.* 46,924
19,950 Applied Materials, Inc.* 466,232
4,450 ASML Holding NV ADR * 78,098
6,050 BEA Systems, Inc.* 84,095
4,700 BMC Software, Inc.* 81,686
2,450 Broadcom Corporation * 78,278
9,300 Brocade Communications Systems, Inc.* 60,915
3,500 Check Point Software Technologies, Ltd.* 59,465
59,650 Cisco Systems, Inc.* 1,251,457
1,250 Cognos, Inc.* 43,088
1,450 Computer Associates International, Inc. 34,104
1,650 Computer Sciences Corporation * 65,373
3,750 Cypress Semiconductor Corporation * 80,475
23,800 Dell, Inc.* 859,656
1,960 Electronic Arts, Inc.* 194,118
2,050 Electronics for Imaging, Inc.* 55,555
28,850 EMC Corporation * 399,284
1,950 Emulex Corporation * 55,224
10,800 First Data Corporation 385,560
2,450 Fiserv, Inc.* 86,534
5,450 Flextronics International, Ltd.* 76,300
6,900 Hewlett-Packard Company 153,939
41,900 Intel Corporation 1,384,795
5,050 International Business Machines Corporation 451,874
1,500 Internet Security Systems, Inc.* 24,615
1,300 Intuit, Inc.* 64,974
3,650 Jabil Circuit, Inc.* 101,652
4,700 JDS Uniphase Corporation * 16,685
1,500 KLA-Tencor Corporation * 85,995
1,450 Lexmark International, Inc.* 106,734
5,750 Linear Technology Corporation 245,008
40,450 Lucent Technologies, Inc.* 129,440
1,300 Marvell Technology Group, Ltd.* 57,031
5,200 Maxim Integrated Products, Inc. 258,492
2,750 Microchip Technology, Inc. 89,952
58,350 Microsoft Corporation 1,525,850
5,250 Motorola, Inc. 71,032
14,150 Nasdaq (100) Index Tracking Stock * 498,363
2,950 Network Appliance, Inc.* 72,806
2,600 Network Associates, Inc.* 36,218
17,565 Nokia Corporation ADR 298,429
23,000 Nortel Networks Corporation * 102,350
3,100 Novellus Systems, Inc.* 127,999
29,000 Oracle Corporation * 346,840
4,750 Paychex, Inc. 184,870
5,750 PeopleSoft, Inc.* 119,370
5,900 QUALCOMM, Inc. 280,250
3,600 SAP AG 131,544
1,550 Semtech Corporation* 34,410
9,150 Siebel Systems, Inc.* 115,198
4,100 Skyworks Solutions, Inc.* 35,178
1,050 Storage Technology Corporation * 25,305
2,150 Symantec Corporation * 143,298
10,874 Taiwan Semiconductor Manufacturing Company, Ltd. ADR * 120,266
1,350 Tech Data Corporation * 44,442
12,250 Texas Instruments, Inc. 354,270
3,600 Unisys Corporation * 55,296
6,600 United Microelectronics Corporation ADR * 34,650
3,800 VeriSign, Inc.* 60,306
8,950 VERITAS Software Corporation * 323,542
5,000 Xilinx, Inc.* 158,500
4,250 Yahoo!, Inc.* 185,725
=========================================================================================================================
Total Information Technology 13,831,882
=========================================================================================================================
Materials (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,550 Alcoa, Inc. 48,934
1,950 Peabody Energy Corporation 64,994
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 113,928
=========================================================================================================================
Miscellaneous (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,200 S&P 400 MidCap Depository Receipts 120,696
- -------------------------------------------------------------------------------------------------------------------------
Total Miscellaneous 120,696
=========================================================================================================================
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $35,907,599) 42,415,632
=========================================================================================================================
Shares Short-Term Investments (1.8%) Interest Rate(e) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
784,049 The AAL Money Market Fund 0.528% 11/1/2003 $784,049
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 784,049
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $36,691,648) $43,199,681
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of
total investments.
(b) At October 31, 2003, Allergan, Inc. common stock
valued at $30,248 was earmarked as collateral to
cover call options written as follows:
Number of Exercise Expiration
Call Options Contracts Price Date Value
- -------------------------------------------------------------------------------------------------------------------------
Allergan, Inc.
4 $185 11/22/2003 $740
(c) Denotes investments purchased on a when-issued basis.
(d) Earmarked as collateral for options, futures or
longer settling trades as discussed in the notes to
the financial statements.
(e) 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 October 31, 2003 (a) (unaudited)
Shares Common Stock (94.6%) Value
Communications Services (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
65,000 Commonwealth Telephone Enterprises, Inc.* $2,649,400
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 2,649,400
=========================================================================================================================
Consumer Discretionary (16.7%)
- -------------------------------------------------------------------------------------------------------------------------
63,700 Aeropostale, Inc.* 1,965,145
56,200 AnnTaylor Stores Corporation * 2,011,960
45,700 Applebee's International, Inc. 1,714,207
67,900 Boyd Gaming Corporation 1,036,154
77,100 Cost Plus, Inc.* 3,536,577
40,100 Entercom Communications Corporation * 1,836,981
52,900 Ethan Allen Interiors, Inc. 1,946,720
71,150 Fossil, Inc.* 1,921,050
15,100 Harman International Industries, Inc. 1,935,820
102,500 Hasbro, Inc. 2,234,500
90,300 Hearst-Argyle Television, Inc.* 2,186,163
57,700 Hot Topic, Inc. 1,656,567
164,300 Interface, Inc.* 911,865
50,400 International Speedway Corporation 2,144,016
41,500 Leapfrog Enterprises, Inc.* 1,434,655
41,300 Lee Enterprises, Inc. 1,741,208
93,600 Linens 'n Things, Inc.* 2,763,072
16,211 M.D.C. Holdings, Inc. 1,091,325
29,800 MarineMax, Inc.* 569,776
45,300 Men's Wearhouse, Inc.* 1,334,538
1,900 NVR, Inc.* 929,860
119,800 Quiksilver, Inc. 2,056,966
185,300 Radio One, Inc.* 2,970,359
71,150 RARE Hospitality International, Inc. 1,764,520
51,200 Red Robin Gourmet Burgers, Inc.* 1,511,475
66,300 Regis Corporation 2,520,726
40,700 Ruby Tuesday, Inc. 1,113,145
12,100 Ryland Group, Inc. 1,075,690
68,750 SCP Pool Corporation 2,406,250
32,300 Select Comfort Corporation * 1,010,990
29,600 Shuffle Master, Inc.* 901,024
29,500 Thor Industries, Inc. 1,891,540
26,200 Toro Company 1,302,140
125,500 Toys 'R' Us, Inc.* 1,631,500
76,500 West Marine, Inc.* 1,695,240
21,900 Winnebago Industries, Inc. 1,276,770
66,600 Wolverine World Wide, Inc. 1,345,320
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 63,375,814
=========================================================================================================================
Consumer Staples (2.1%)
- -------------------------------------------------------------------------------------------------------------------------
177,200 Casey's General Stores, Inc. 2,746,600
39,500 Hain Celestial Group, Inc.* 833,450
85,500 NBTY, Inc.* 2,329,875
26,000 Performance Food Group Company * 968,500
34,100 WD-40 Company 1,106,545
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 7,984,970
=========================================================================================================================
Energy (4.5%)
- -------------------------------------------------------------------------------------------------------------------------
52,900 Cabot Oil & Gas Corporation 1,351,595
84,700 Chesapeake Energy Corporation 1,010,471
111,400 Energy Partners, Ltd.* 1,337,914
76,100 Evergreen Resources, Inc. 2,086,662
102,400 Key Energy Services, Inc.* 893,952
166,800 Maverick Tube Corporation * 2,817,252
55,700 Newfield Exploration Company * 2,212,961
52,600 Premcor, Inc.* 1,241,360
78,700 St. Mary Land & Exploration Company 2,054,070
164,000 Superior Energy Services, Inc.* 1,466,160
33,150 TETRA Technologies, Inc. 749,522
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 17,221,919
=========================================================================================================================
Financials (17.8%)
- -------------------------------------------------------------------------------------------------------------------------
95,100 Affiliated Managers Group, Inc.* 6,894,751
18,700 Alexandria Real Estate Equities, Inc. 953,700
36,600 AMB Property Corporation 1,097,634
102,800 Argonaut Group, Inc. 1,649,940
60,163 BOK Financial Corporation * 2,274,161
44,400 Corus Bankshares, Inc. 2,610,720
63,300 Cullen/Frost Bankers, Inc. 2,453,508
30,100 Developers Diversified Realty Corporation 869,890
31,500 Eastgroup Properties, Inc. 918,225
51,550 First BanCorp 1,716,615
79,600 First Midwest Bancorp, Inc. 2,459,640
80,100 HCC Insurance Holdings, Inc. 2,334,114
97,600 HRPT Properties Trust 913,536
75,200 Investors Financial Services Corporation 2,656,816
59,900 MAF Bancorp, Inc. 2,511,008
101,800 Max Re Capital, Ltd. 1,879,228
45,500 Mercantile Bank Corporation 1,528,345
23,600 Mills Corporation 962,880
78,300 Platinum Underwriters Holdings, Ltd. 2,250,342
30,200 PrivateBancorp, Inc. 1,223,100
100,500 Providian Financial Corporation * 1,116,555
115,300 Raymond James Financial, Inc. 4,703,087
70,500 RLI Corporation 2,368,800
17,300 Russell 2000 Index Fund I Shares 1,825,669
34,500 S&P SmallCap 600 Index Fund I Shares 4,395,300
24,100 SL Green Realty Corporation 871,215
48,600 Southwest Bancorporation of Texas, Inc. 1,745,226
65,900 Stewart Information Services Corporation * 2,052,785
54,700 UCBH Holdings, Inc. 1,953,337
65,500 United Bankshares, Inc. 1,981,375
66,748 Washington Federal, Inc. 1,758,142
81,300 Winston Hotels, Inc. 817,065
48,900 Wintrust Financial Corporation 2,119,326
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 67,866,035
=========================================================================================================================
Health Care (11.9%)
- -------------------------------------------------------------------------------------------------------------------------
87,600 Advanced Medical Optics, Inc.* 1,766,892
36,000 ArthroCare Corporation * 804,600
58,600 Community Health Systems, Inc.* 1,407,572
40,300 Cooper Companies, Inc. 1,751,035
23,400 Coventry Health Care, Inc.* 1,281,150
90,400 Cytyc Corporation* 1,168,872
33,300 Dade Behring Holdings, Inc.* 1,017,981
113,500 Dendrite International, Inc.* 1,713,850
262,300 Encore Medical Corporation* 1,794,132
44,000 IDEXX Laboratories, Inc.* 2,081,200
30,700 KOS Pharmaceuticals, Inc.* 1,219,097
92,300 LifePoint Hospitals, Inc.* 2,373,033
26,700 Martek Biosciences Corporation * 1,292,547
133,000 Medarex Incorporation * 950,950
25,800 Medicis Pharmaceutical Corporation 1,634,430
24,900 Millipore Corporation * 1,091,865
19,700 Omnicare, Inc. 755,298
119,100 Perrigo Company 1,601,895
33,900 Pharmaceutical Product Development, Inc.* 1,019,373
100,500 Protein Design Labs, Inc.* 1,354,740
39,200 Renal Care Group, Inc.* 1,470,392
42,500 ResMed, Inc.* 1,775,225
37,700 Respironics, Inc.* 1,571,713
250,300 Savient Pharmaceuticals, Inc.* 1,514,315
75,000 Sybron Dental Specialties, Inc.* 1,725,000
57,600 TECHNE Corporation* 2,006,208
115,100 United Surgical Partners International, Inc.* 3,471,416
73,300 Ventana Medical Systems, Inc.* 3,066,872
14,200 Wilson Greatbatch
Technologies, Inc.* 535,340
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 45,216,993
=========================================================================================================================
Industrials (15.7%)
- -------------------------------------------------------------------------------------------------------------------------
82,900 A.O. Smith Corporation 2,623,785
104,100 Allied Waste Industries, Inc.* 1,174,248
22,900 Briggs & Stratton Corporation 1,488,729
116,500 Consolidated Graphics, Inc.* 3,221,225
17,200 Corinthian Colleges, Inc.* 1,065,024
77,200 Dionex Corporation* 3,284,088
123,400 Dycom Industries, Inc.* 2,666,674
43,900 EDO Corporation 978,970
126,900 Exult, Inc.* 1,006,317
25,200 Fastenal Company 1,120,644
40,300 G & K Services, Inc. 1,329,900
23,300 Genlyte Group, Inc.* 1,098,828
37,025 Graco, Inc. 1,410,652
63,700 Granite Construction, Inc. 1,273,363
103,345 Heartland Express, Inc. 2,567,090
63,000 IDEX Corporation 2,342,340
28,500 ITT Educational Services, Inc.* 1,419,300
42,000 Jacobs Engineering Group, Inc.* 1,945,440
104,300 KForce, Inc.* 910,539
17,700 Landstar System, Inc.* 1,292,808
106,800 Manitowoc Company, Inc. 2,317,560
83,200 Mercury Computer Systems, Inc.* 1,789,632
123,700 Mesa Air Group, Inc.* 1,332,249
103,800 MSC Industrial Direct Company, Inc. 2,454,870
59,300 Mueller Industries, Inc.* 1,871,508
51,000 Pacer International, Inc.* 1,051,620
50,100 Robbins & Myers, Inc. 1,057,110
31,200 Roper Industries, Inc. 1,541,904
158,500 SkyWest, Inc. 2,930,665
44,300 Swift Transportation Company, Inc.* 993,649
84,700 Tetra Tech, Inc.* 1,904,056
43,300 Triumph Group, Inc.* 1,413,745
58,800 United Defense Industries, Inc.* 1,905,120
50,800 Waste Connections, Inc.* 1,761,744
45,900 Watson Wyatt & Company Holdings * 1,103,895
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 59,649,291
=========================================================================================================================
Information Technology (20.1%)
- -------------------------------------------------------------------------------------------------------------------------
77,100 Actel Corporation * 2,080,158
96,900 Advanced Digital Information Corporation * 1,574,625
73,900 Advanced Fibre Communications, Inc.* 1,778,773
156,700 Akamai Technologies, Inc.* 1,237,930
107,100 Artesyn Technologies, Inc.* 881,433
43,600 Autodesk, Inc. 839,300
71,100 Axcelis Technologies, Inc.* 752,238
31,800 BARRA, Inc.* 1,208,400
211,100 Bell Microproducts, Inc.* 1,781,684
31,100 Benchmark Electronics, Inc.* 1,515,192
103,200 BISYS Group, Inc.* 1,475,760
30,100 CACI International, Inc.* 1,490,853
225,700 CIBER, Inc.* 2,080,954
33,300 Cymer, Inc.* 1,520,478
94,900 Cypress Semiconductor Corporation * 2,036,554
26,300 Fair Isaac Corporation 1,677,414
63,100 Global Payments, Inc. 2,628,115
51,600 Hutchinson Technology, Inc.* 1,729,116
32,700 Hyperion Solutions Corporation * 1,095,123
253,500 Ingram Micro, Inc.* 3,751,800
68,800 Inter-Tel, Inc. 1,733,072
34,000 International Rectifier Corporation * 1,622,820
33,400 Itron, Inc.* 684,366
29,700 Kronos, Inc.* 1,782,000
31,400 Manhattan Associates, Inc.* 874,176
175,300 MatrixOne, Inc.* 971,162
81,600 Metrologic Instruments, Inc. 1,911,888
133,200 MPS Group, Inc.* 1,272,060
108,800 MSC.Software Corporation * 1,120,640
133,700 Opsware, Inc.* 1,112,384
620,300 Parametric Technology Corporation * 1,929,133
95,000 Photronics, Inc.* 2,046,300
81,000 Planar Systems, Inc.* 1,874,340
53,000 Plantronics, Inc.* 1,473,930
63,200 Plexus Corporation * 1,092,728
29,800 Power Integrations, Inc.* 1,037,636
82,200 RadiSys Corporation* 1,607,010
170,100 Skyworks Solutions, Inc.* 1,459,458
158,800 Stratex Networks, Inc.* 508,160
87,600 Tech Data Corporation * 2,883,792
33,700 Technitrol, Inc. 734,660
117,500 Tollgrade Communications, Inc.* 1,841,225
64,500 Trimble Navigation, Ltd.* 1,783,425
39,500 Varian Semiconductor Equipment Associates, Inc.* 1,909,825
47,900 Varian, Inc.* 1,715,299
130,700 Vishay Intertechnology, Inc.* 2,450,625
137,700 Westell Technologies, Inc.* 1,147,041
171,600 Wind River Systems, Inc.* 1,149,720
31,150 Zebra Technologies Corporation 1,773,992
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 76,638,767
=========================================================================================================================
Materials (3.3%)
- -------------------------------------------------------------------------------------------------------------------------
50,900 Florida Rock Industries, Inc. 2,914,025
116,900 MacDermid, Inc. 3,492,972
43,400 Peabody Energy Corporation 1,446,522
35,100 Schweitzer-Mauduit International, Inc. 933,660
131,500 Steel Dynamics, Inc.* 2,449,845
89,400 Wausau-Mosinee Paper Corporation 1,104,984
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 12,342,008
=========================================================================================================================
Utilities (1.8%)
- -------------------------------------------------------------------------------------------------------------------------
65,500 Energen Corporation 2,414,985
53,537 Philadelphia Suburban Corporation 1,264,544
35,000 Piedmont Natural Gas Company, Inc. 1,390,550
99,900 UniSource Energy Corporation 1,928,070
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 6,998,149
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $294,427,720) 359,943,346
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (5.4%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$1,800,000 Barton Capital Corporation 1.050% 11/10/2003 $1,799,528
1,000,000 Montauk Funding Corporation 1.050 11/26/2003 999,271
12,652,985 The AAL Money Market Fund 0.528 N/A 12,652,985
5,150,000 UBS Finance Corporation 1.040 11/3/2003 5,149,702
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 20,601,486
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $315,029,206) $380,544,832
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of
total investments.
(b) The interest rate shown reflects the yield, or for
securities purchased at a discount, the discount rate
at the date of purchase.
The AAL Small Cap Index Fund II
Schedule of Investments as of October 31, 2003(a) (unaudited)
Shares Common Stock (95.7%) Value
Communications Services (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
1,300 Boston Communications Group, Inc.* $12,246
1,700 Commonwealth Telephone Enterprises, Inc.* 69,292
4,000 General Communication, Inc.* 39,440
1,750 Metro One Telecommunications, Inc.* 4,620
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 125,598
=========================================================================================================================
Consumer Discretionary (19.9%)
- -------------------------------------------------------------------------------------------------------------------------
900 4Kids Entertainment, Inc.* 22,005
1,000 A.T. Cross Company * 6,150
2,350 Aaron Rents, Inc. 51,465
1,300 Action Performance Companies, Inc. 26,624
1,300 Advanced Marketing Services, Inc. 14,885
1,500 ADVO, Inc. 67,245
3,250 AnnTaylor Stores Corporation * 116,350
1,700 Applica, Inc. 12,546
1,600 Arctic Cat, Inc. 36,032
2,100 Argosy Gaming Company * 49,980
900 Ashworth, Inc.* 7,569
2,500 Aztar Corporation * 52,200
2,400 Bally Total Fitness Holding Corporation * 15,984
800 Bassett Furniture Industries, Inc. 12,568
1,300 Brown Shoe Company, Inc. 44,980
900 Building Materials Holding Corporation 12,726
3,200 Burlington Coat Factory Warehouse Corporation 68,640
1,500 Cato Corporation 31,650
1,900 CEC Entertainment, Inc.* 92,910
4,100 Champion Enterprises, Inc.* 29,110
1,900 Children's Place Retail Stores, Inc.* 57,190
2,700 Christopher & Banks Corporation 78,840
1,100 Coachmen Industries, Inc. 17,149
2,000 Concord Camera Corporation * 25,680
1,600 Cost Plus, Inc.* 73,392
900 Department 56, Inc.* 12,645
2,100 Dress Barn, Inc.* 29,400
1,800 Electronics Boutique Holdings Corporation * 51,210
1,000 Enesco Group, Inc.* 9,810
2,700 Ethan Allen Interiors, Inc. 99,360
2,070 Fedders Corporation 12,110
2,500 Fleetwood Enterprises, Inc.* 25,200
1,400 Footstar, Inc.* 8,750
3,400 Fossil, Inc.* 91,800
2,800 Fred's, Inc. 105,504
1,500 Genesco, Inc.* 25,275
2,300 Goody's Family Clothing, Inc. 24,242
1,600 Group 1 Automotive, Inc.* 56,688
1,900 Guitar Center, Inc.* 61,845
2,100 Gymboree Corporation * 34,650
400 Haggar Corporation 6,360
1,300 Hancock Fabrics, Inc. 19,383
2,400 Harman International Industries, Inc. 307,680
1,600 Haverty Furniture Companies, Inc. 33,200
3,375 Hot Topic, Inc. 96,896
1,100 Huffy Corporation * 6,545
1,600 IHOP Corporation 59,360
1,500 Information Holdings, Inc.* 33,630
3,350 Insight Enterprises, Inc.* 56,347
3,700 Interface, Inc.* 20,535
1,800 Intermet Corporation 7,920
1,400 J. Jill Group, Inc.* 17,038
2,600 Jack in the Box, Inc.* 47,294
1,700 JAKKS Pacific, Inc.* 22,100
1,500 Jo-Ann Stores, Inc.* 45,015
1,300 K-Swiss, Inc. 57,122
1,900 K2, Inc.* 31,521
1,900 Kellwood Company 71,003
2,000 Landry's Restaurants, Inc. 50,060
3,900 Lay-Z-Boy, Inc. 78,780
1,000 Libbey, Inc. 26,590
3,200 Linens 'n Things, Inc.* 94,464
1,500 Lone Star Steakhouse & Saloon, Inc. 32,805
2,087 M.D.C. Holdings, Inc. 140,497
2,100 Marcus Corporation 31,395
1,400 Meade Instruments Corporation * 5,250
2,800 Men's Wearhouse, Inc.* 82,488
1,000 Midas, Inc.* 13,420
2,100 Monaco Coach Corporation * 50,589
2,300 Movie Gallery, Inc.* 47,564
500 National Presto Industries, Inc. 17,350
2,300 Nautilus Group, Inc. 35,903
520 NVR, Inc.* 254,488
1,500 O'Charley's, Inc.* 25,275
900 OshKosh B'Gosh, Inc. 19,404
600 Oxford Industries, Inc. 41,100
1,900 P.F. Chang's China Bistro, Inc.* 92,606
5,550 Pacific Sunwear of California, Inc. 128,150
2,200 Panera Bread Company* 88,506
1,300 Papa John's International, Inc.* 34,203
3,900 Pep Boys, Inc. 74,997
2,100 Phillips-Van Heusen Corporation 35,994
1,800 Pinnacle Entertainment, Inc.* 15,750
1,600 Polaris Industries, Inc. 136,960
3,200 Prime Hospitality Corporation * 29,120
3,900 Quiksilver, Inc. 66,963
2,400 RARE Hospitality International, Inc. 59,520
3,100 Regis Corporation 117,862
1,500 Russ Berrie and Company, Inc. 53,775
2,300 Russell Corporation 42,044
3,000 Ryan's Family Steak Houses, Inc.* 41,820
1,800 Ryland Group, Inc. 160,020
800 Salton, Inc.* 8,544
2,550 SCP Pool Corporation 89,250
2,100 ShopKo Stores, Inc.* 32,508
1,200 Shuffle Master, Inc.* 36,528
600 Skyline Corporation 20,670
2,800 Sonic Corporation * 77,868
1,400 Standard Motor Products, Inc. 15,610
2,400 Standard Pacific Corporation 114,840
1,900 Steak n Shake Company * 32,870
3,000 Stein Mart, Inc.* 21,570
2,800 Stride Rite Corporation 33,740
1,900 Sturm, Ruger & Company, Inc. 21,565
1,600 TBC Corporation * 43,504
1,000 Thomas Nelson, Inc. 15,850
2,100 Thor Industries, Inc. 134,652
2,400 Too, Inc.* 39,600
1,800 Toro Company 89,460
4,000 Tower Automotive, Inc.* 15,920
2,700 Tractor Supply Company 113,157
4,200 Triarc Companies, Inc. 44,772
1,000 Ultimate Electronics, Inc.* 8,990
2,800 Urban Outfitters, Inc. 93,408
2,125 Wet Seal, Inc.* 23,354
1,300 Winnebago Industries, Inc. 75,790
2,200 WMS Industries, Inc.* 50,886
2,900 Wolverine World Wide, Inc. 58,580
2,000 Zale Corporation * 103,520
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 6,254,026
=========================================================================================================================
Consumer Staples (3.0%)
- -------------------------------------------------------------------------------------------------------------------------
1,300 American Italian Pasta Company * 49,712
3,600 Casey's General Stores, Inc. 55,800
2,600 Corn Products International, Inc. 88,114
2,700 Delta and Pine Land Company 61,722
3,200 DIMON, Inc. 23,040
1,700 Duane Reade, Inc.* 23,375
3,250 Flowers Foods, Inc. 77,122
2,700 Great Atlantic & Pacific Tea Company, Inc.* 16,875
2,400 Hain Celestial Group, Inc.* 50,640
1,400 International Multifoods Corporation * 31,234
600 J & J Snack Foods Corporation * 21,414
2,100 Lance, Inc. 27,195
800 Nash Finch Company 12,600
1,000 Nature's Sunshine Products, Inc. 8,010
4,800 NBTY, Inc.* 130,800
3,300 Performance Food Group Company * 122,925
2,100 Ralcorp Holdings, Inc.* 57,750
1,400 United Natural Foods, Inc.* 54,152
1,200 WD-40 Company 38,940
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 951,420
=========================================================================================================================
Energy (4.8%)
- -------------------------------------------------------------------------------------------------------------------------
1,000 Atwood Oceanics, Inc.* 25,890
2,300 Cabot Oil & Gas Corporation 58,765
2,700 Cal Dive International, Inc.* 55,971
1,100 Carbo Ceramics, Inc. 46,200
3,000 Cimarex Energy Company * 61,350
1,200 Dril-Quip, Inc.* 18,000
3,000 Evergreen Resources, Inc. 82,260
1,900 Frontier Oil Corporation 30,305
1,600 Hydril Company* 37,520
3,600 Input/Output, Inc.* 14,796
2,000 Lone Star Technologies, Inc.* 27,840
3,000 Maverick Tube Corporation * 50,670
4,000 Newfield Exploration Company * 158,920
1,400 Nuevo Energy Company* 27,552
1,700 Oceaneering International, Inc.* 39,202
1,600 Offshore Logistics, Inc.* 34,880
2,406 Patina Oil & Gas Corporation 101,485
1,700 Plains Resources, Inc. 22,525
900 Prima Energy Corporation * 25,038
1,900 Remington Oil and Gas Corporation * 33,915
1,400 SEACOR SMIT, Inc.* 53,648
2,400 Spinnaker Exploration Company * 61,416
2,000 St. Mary Land & Exploration Company 52,200
1,900 Stone Energy Corporation * 68,666
1,900 Swift Energy Company * 26,410
1,500 TETRA Technologies, Inc. 33,915
3,300 Tom Brown, Inc.* 89,166
3,100 Unit Corporation* 60,109
2,400 Veritas DGC, Inc.* 21,264
4,600 Vintage Petroleum, Inc. 53,130
1,900 W-H Energy Services, Inc.* 29,792
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,502,800
=========================================================================================================================
Financials (13.2%)
- -------------------------------------------------------------------------------------------------------------------------
1,700 Anchor BanCorp Wisconsin, Inc. 42,330
2,100 BankUnited Financial Corporation * 46,431
1,600 Boston Private Financial Holdings, Inc. 40,752
4,100 Brookline Bancorp, Inc. 60,762
2,300 Capital Automotive REIT 71,553
2,000 Cash America International, Inc. 38,180
2,600 Chittenden Corporation 83,668
1,900 Colonial Properties Trust 70,300
3,200 Commercial Federal Corporation 82,368
2,700 Community First Bankshares, Inc. 73,305
1,500 Delphi Financial Group, Inc. 75,555
1,800 Dime Community Bancshares 50,184
2,000 Downey Financial Corporation 91,800
1,800 East West Bancorp, Inc. 88,362
1,600 Essex Property Trust, Inc. 95,808
1,300 Financial Federal Corporation * 43,615
2,850 First BanCorp 94,905
3,400 First Midwest Bancorp, Inc. 105,060
1,100 First Republic Bank 39,380
1,200 FirstFed Financial Corporation * 54,000
4,300 Flagstar Bancorp, Inc. 95,890
5,400 Fremont General Corporation 89,802
2,000 Gables Residential Trust 64,360
2,000 Glenborough Realty Trust, Inc. 39,000
2,500 Hilb, Rogal and Hamilton Company 75,050
3,250 Hudson United Bancorp 117,942
1,600 Idine Rewards Network, Inc.* 17,472
2,000 Irwin Financial Corporation 56,060
4,000 Jefferies Group, Inc. 124,000
2,000 Kilroy Realty Corporation 57,800
1,400 LandAmerica Financial Group, Inc. 70,014
2,800 Lexington Corporate Properties Trust 53,704
1,900 MAF Bancorp, Inc. 79,648
2,450 New Centuty Financial Corporation 90,846
1,600 Philadelphia Consolidated Holding Corporation * 75,440
2,100 Presidential Life Corporation 32,256
1,755 Provident Bankshares Corporation 54,458
3,500 Raymond James Financial, Inc. 142,765
4,100 Republic Bancorp 59,532
2,000 Riggs National Corporation 33,020
1,800 RLI Corporation 60,480
700 SCPIE Holdings, Inc. 9,415
1,900 Seacoast Financial Services Corporation 48,659
2,000 Selective Insurance Group, Inc. 61,400
3,300 Shurgard Storage Centers, Inc. 119,460
3,600 South Financial Group, Inc. 94,068
2,500 Southwest Bancorporation of Texas, Inc. 89,775
4,200 Staten Island Bancorp, Inc. 83,706
3,150 Sterling Bancshares, Inc. 36,225
1,300 Stewart Information Services Corporation * 40,495
2,900 Susquehanna Bancshares, Inc. 72,645
1,193 SWS Group, Inc. 25,888
5,333 TrustCo Bank Corporation NY 69,596
3,300 UCBH Holdings, Inc. 117,843
3,300 UICI * 49,368
1,900 Umpqua Holdings Corporation 38,855
3,100 United Bankshares, Inc. 93,775
2,415 Waypoint Financial Corporation 50,280
2,950 Whitney Holding Corporation 112,012
1,400 Wintrust Financial Corporation 60,676
1,400 Zenith National Insurance Corporation 42,980
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 4,154,978
=========================================================================================================================
Health Care (12.6%)
- -------------------------------------------------------------------------------------------------------------------------
3,475 Accredo Health, Inc. 111,061
2,100 Advanced Medical Optics, Inc.* 42,357
3,700 Alpharma, Inc. 67,340
1,100 American Healthways, Inc.* 45,595
2,400 American Medical Systems Holdings, Inc.* 48,000
1,700 Amerigroup Corporation * 71,094
1,400 Amsurg Corporation * 50,386
1,000 Analogic Corporation 43,640
2,000 ArQule, Inc.* 10,400
1,500 ArthroCare Corporation * 33,525
1,100 Biosite Diagnostics, Inc.* 28,380
1,400 Centene Corporation 42,854
4,000 Cephalon, Inc.* 187,840
2,600 Cerner Corporation * 110,162
1,100 CIMA Labs, Inc.* 34,540
2,100 CONMED Corporation * 42,735
2,300 Cooper Companies, Inc. 99,935
2,300 Cross Country Healthcare, Inc.* 31,947
1,350 CryoLife, Inc.* 8,248
900 Curative Health Services, Inc.* 12,861
1,100 Datascope Corporation 36,619
2,900 Dendrite International, Inc.* 43,790
2,100 Diagnostic Products Corporation 85,722
2,112 Enzo Biochem, Inc.* 39,072
1,700 Haemonetics Corporation * 39,202
1,400 Hologic, Inc.* 19,040
4,600 Hooper Holmes, Inc. 23,966
1,000 ICU Medical, Inc.* 33,790
2,500 IDEXX Laboratories, Inc.* 118,250
1,700 Inamed Corporation * 146,829
1,900 Integra Life Sciences Holdings Corporation * 64,106
2,200 Invacare Corporation 90,244
2,000 Medicis Pharmaceutical Corporation 126,700
3,300 Mentor Corporation 66,825
2,200 MGI PHARMA, Inc.* 82,632
3,500 Mid Atlantic Medical Services, Inc.* 204,400
2,500 NDCHealth Corporation 65,975
1,600 Noven Pharmaceuticals, Inc.* 16,144
2,550 Odyssey Healthcare, Inc. 70,737
3,600 Orthodontic Centers of America, Inc.* 31,824
1,200 Osteotech, Inc.* 9,708
2,400 Owens & Minor, Inc. 48,816
1,800 PAREXEL International Corporation* 30,096
1,700 Pediatrix Medical Group, Inc.* 90,865
4,000 Pharmaceutical Product Development, Inc.* 120,280
1,800 PolyMedica Corporation 53,100
1,300 Possis Medical, Inc.* 21,164
3,100 Priority Healthcare Corporation * 67,053
3,500 Province Healthcare Company * 44,940
3,700 Regeneron Pharmaceuticals, Inc.* 51,208
1,100 RehabCare Group, Inc.* 17,182
3,600 Renal Care Group, Inc.* 135,036
2,400 ResMed, Inc.* 100,248
2,500 Respironics, Inc.* 104,225
4,200 Savient Pharmaceuticals, Inc.* 25,410
2,100 Sierra Health Services, Inc.* 48,909
1,800 Sola International, Inc.* 30,870
1,500 Sunrise Senior Living, Inc.* 43,350
1,300 SurModics, Inc.* 27,313
2,800 Sybron Dental Specialties, Inc.* 64,400
3,000 TECHNE Corporation* 104,490
2,100 Theragenics Corporation * 9,345
6,200 US Oncology, Inc.* 67,828
2,200 Viasys Healthcare, Inc.* 39,710
900 Vital Signs, Inc. 27,297
1,500 Wilson Greatbatch Technologies, Inc.* 56,550
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 3,968,160
=========================================================================================================================
Industrials (17.9%)
- -------------------------------------------------------------------------------------------------------------------------
2,100 A.O. Smith Corporation 66,465
2,200 AAR Corporation * 23,980
3,500 ABM Industries, Inc. 54,460
3,000 Acuity Brands, Inc. 64,500
1,900 Administaff, Inc.* 22,002
2,400 Albany International Corporation 74,160
2,762 Alliant Techsystems, Inc.* 142,961
600 Angelica Corporation 12,360
1,900 Apogee Enterprises, Inc. 19,855
1,400 Applied Industrial Technologies, Inc. 31,570
2,200 Arbitron, Inc.* 86,900
1,800 Arkansas Best Corporation 59,598
2,000 Armor Holdings, Inc.* 39,000
1,400 Astec Industries, Inc.* 17,808
3,200 Atlantic Coast Airlines Holdings, Inc.* 35,424
2,400 Baldor Electric Company 51,120
1,600 Barnes Group, Inc. 46,688
1,800 Belden, Inc. 33,750
2,400 Bowne & Company, Inc. 36,000
1,700 Brady Corporation 60,010
1,600 Briggs & Stratton Corporation 104,016
400 Butler Manufacturing Company 7,100
1,800 C&D Technologies, Inc. 35,874
1,400 CDI Corporation 45,850
2,600 Central Parking Corporation 31,382
1,800 CLARCOR, Inc. 73,170
1,500 Coinstar, Inc.* 21,975
1,000 Consolidated Graphics, Inc.* 27,650
600 CPI Corporation 11,826
1,900 Cubic Corporation 53,960
1,200 Cuno, Inc.* 47,880
800 Curtiss-Wright Corporation 59,200
1,500 Dionex Corporation* 63,810
1,600 DRS Technologies, Inc.* 38,496
1,400 EDO Corporation 31,220
1,400 ElkCorp 35,560
1,100 EMCOR Group, Inc.* 41,459
1,150 Engineered Support Systems, Inc. 77,752
1,500 Esterline Technologies Corporation * 33,225
1,500 Forward Air Corporation * 43,620
2,500 Frontier Airlines, Inc.* 40,175
1,500 G & K Services, Inc. 49,500
1,200 Gardner Denver, Inc.* 24,792
3,100 GenCorp, Inc. 29,357
2,120 Griffon Corporation * 41,022
3,601 Heartland Express, Inc. 89,449
1,300 Heidrick & Struggles International, Inc.* 25,675
1,700 Hughes Supply, Inc. 65,705
2,400 IDEX Corporation 89,232
1,200 Imagistics International, Inc.* 38,580
1,900 Insituform Technologies, Inc.* 27,170
800 Insurance Auto Auctions, Inc.* 10,473
1,223 Intermagnetics General Corporation * 28,789
1,200 InVision Technologies, Inc.* 32,604
1,300 Ionics, Inc.* 37,037
3,300 ITT Educational Services, Inc.* 164,340
3,100 JLG Industries, Inc. 37,014
2,000 John H. Harland Company 54,460
1,600 Kaman Corporation 19,520
4,400 Kansas City Southern, Inc.* 58,212
2,000 Kaydon Corporation 47,540
1,700 Kirby Corporation* 49,946
2,700 Knight Transportation, Inc.* 67,959
3,000 Kroll, Inc.* 69,780
2,900 Labor Ready, Inc.* 31,523
1,100 Landstar System, Inc.* 80,344
700 Lawson Products, Inc. 21,000
4,200 Lennox International, Inc. 69,468
800 Lindsay Manufacturing Company 18,552
1,100 Lydall, Inc.* 13,079
1,600 MagneTek, Inc.* 9,744
1,900 Manitowoc Company, Inc. 41,230
900 MemberWorks, Inc.* 25,992
1,500 Mercury Computer Systems, Inc.* 32,265
2,200 Mesa Air Group, Inc.* 23,694
2,400 Milacron, Inc. 5,736
1,000 Mobile Mini, Inc.* 21,090
2,500 Mueller Industries, Inc.* 78,900
1,900 NCO Group, Inc.* 45,220
900 New England Business Service, Inc. 26,190
1,800 On Assignment, Inc.* 9,414
2,500 Oshkosh Truck Corporation 114,575
1,300 Pre-Paid Legal Services, Inc.* 35,308
4,400 PRG-Schultz International, Inc.* 20,900
1,800 Regal-Beloit Corporation 36,630
2,300 Reliance Steel & Aluminum Company 66,010
1,500 Roadway Corporation 76,875
1,000 Robbins & Myers, Inc. 21,100
2,300 Roper Industries, Inc. 113,666
700 Roto-Rooter, Inc. 24,710
1,400 School Specialty, Inc.* 39,032
4,100 Shaw Group, Inc.* 55,965
1,800 Simpson Manufacturing Company, Inc.* 80,550
4,200 SkyWest, Inc. 77,658
1,200 SOURCECORP, Inc.* 28,116
4,200 Spherion Corporation * 36,540
1,000 SPS Technologies, Inc.* 49,320
2,000 Standard Register Company 35,200
900 Standex International Corporation 22,905
2,000 Stewart & Stevenson Services, Inc. 33,440
2,300 Teledyne Technologies, Inc.* 37,927
3,900 Tetra Tech, Inc.* 87,672
1,200 Thomas Industries, Inc. 36,240
6,100 Timken Company 102,358
2,700 Tredegar Corporation 42,066
1,200 Triumph Group, Inc.* 39,180
2,400 United Stationers, Inc.* 89,304
1,300 Universal Forest Products, Inc. 38,480
2,300 URS Corporation * 50,347
2,000 USF Corporation 63,840
1,700 Valmont Industries, Inc. 35,360
3,000 Vicor Corporation * 30,420
1,100 Volt Information Sciences, Inc.* 19,250
1,800 Wabash National Corporation * 41,526
2,100 Waste Connections, Inc.* 72,828
1,900 Watsco, Inc. 40,679
2,400 Watson Wyatt & Company Holdings * 57,720
1,900 Watts Water Technologies, Inc. 33,744
800 Wolverine Tube, Inc.* 4,072
800 Woodward Governor Company 37,008
2,100 Yellow Corporation * 68,985
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 5,612,914
=========================================================================================================================
Information Technology (16.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,800 Actel Corporation * 48,564
7,800 Adaptec, Inc.* 66,378
2,300 Advanced Energy Industries, Inc.* 52,509
4,700 Aeroflex, Inc.* 43,616
2,300 Agilysys, Inc. 23,644
2,500 Alliance Semiconductor Corporation * 19,250
3,000 American Management Systems, Inc.* 44,400
2,600 Anixter International, Inc.* 62,088
1,100 ANSYS, Inc.* 39,204
2,700 Artesyn Technologies, Inc.* 22,221
2,200 ATMI, Inc.* 50,578
1,600 Audiovox Corporation * 19,200
2,200 Avid Technology, Inc.* 113,828
7,100 Axcelis Technologies, Inc.* 75,118
1,450 BARRA, Inc.* 55,100
1,000 BEI Technologies, Inc. 18,510
800 Bel Fuse, Inc. 21,000
1,800 Bell Microproducts, Inc.* 15,192
1,800 Benchmark Electronics, Inc.* 87,696
1,300 Black Box Corporation 55,978
2,700 Brooks Automation, Inc.* 67,365
800 Brooktrout, Inc.* 11,504
2,600 C-COR.net Corporation* 26,208
3,150 Cable Design Technologies Corporation * 30,366
2,100 CACI International, Inc.* 104,013
2,200 Captaris, Inc.* 13,090
1,600 Carreker Corporation * 15,600
900 Catapult Communications Corporation * 12,267
2,300 Checkpoint Systems, Inc.* 43,332
4,500 CIBER, Inc.* 41,490
3,100 Cognex Corporation 83,235
2,200 Coherent, Inc.* 50,600
1,500 Cohu, Inc. 30,105
800 Concerto Software, Inc.* 9,552
1,300 Concord Communications, Inc.* 23,283
2,400 CTS Corporation 26,568
2,600 Cymer, Inc.* 118,716
1,400 Digi International, Inc.* 12,880
2,000 DSP Group, Inc.* 47,760
1,300 DuPont Photomasks, Inc.* 30,134
3,300 eFunds Corporation* 52,833
2,000 Electro Scientific Industries, Inc.* 49,120
1,300 EPIQ Systems, Inc.* 21,970
2,700 ESS Technology, Inc.* 37,476
2,900 Exar Corporation* 46,661
2,400 FactSet Research Systems, Inc. 104,736
2,400 FEI Company * 57,000
2,600 FileNET Corporation* 69,472
2,400 FLIR Systems, Inc. 75,024
1,600 Gerber Scientific, Inc.* 12,640
1,500 Global Imaging Systems, Inc.* 43,575
2,740 Global Payments, Inc. 114,121
4,900 Harmonic, Inc.* 38,024
1,900 Helix Technology Corporation 34,105
1,900 Hutchinson Technology, Inc.* 63,669
2,800 Hyperion Solutions Corporation * 93,772
1,800 Inter-Tel, Inc. 45,342
1,500 Itron, Inc.* 30,735
1,700 J2 Global Communication, Inc. 48,144
2,000 JDA Software Group, Inc.* 42,820
1,100 Keithley Instruments, Inc. 17,743
5,000 Kopin Corporation * 36,650
1,500 Kronos, Inc.* 90,000
3,600 Kulicke and Soffa Industries, Inc.* 52,848
2,200 Manhattan Associates, Inc.* 61,248
2,500 Mantech International Corporation* 61,150
1,100 MapInfo Corporation * 10,021
1,500 MAXIMUS, Inc.* 52,365
2,500 Methode Electronics, Inc. 29,775
1,300 MICROS Systems, Inc.* 52,637
2,100 Microsemi Corporation* 43,470
3,900 Midway Games, Inc.* 11,076
1,700 MRO Software, Inc.* 21,505
2,400 Netegrity, Inc.* 28,464
1,600 Network Equipment Technologies, Inc.* 16,720
2,200 NYFIX, Inc.* 17,512
1,400 Park Electrochemical Corporation 34,300
2,800 Paxar Corporation* 33,544
1,400 PCTEL, Inc.* 14,182
1,800 Pegasus Solutions, Inc.* 19,656
1,800 Pericom Semiconductor Corporation * 20,502
1,700 Phoenix Technologies, Ltd.* 11,186
1,200 Photon Dynamics, Inc.* 45,384
2,300 Photronics, Inc.* 49,542
4,500 Pinnacle Systems, Inc.* 31,275
1,000 Planar Systems, Inc.* 23,140
2,100 Power Integrations, Inc.* 73,122
2,500 Progress Software Corporation* 55,175
1,100 QRS Corporation* 11,187
1,900 Radiant Systems, Inc.* 12,654
1,300 RadiSys Corporation* 25,415
1,900 Rainbow Technologies, Inc.* 23,389
1,200 Rogers Corporation* 47,976
1,900 Roxio, Inc.* 19,361
1,200 Rudolph Technologies, Inc.* 31,380
1,000 SBS Technologies, Inc.* 13,720
1,000 SCM Microsystems, Inc.* 8,320
2,900 SERENA Software, Inc.* 50,025
10,600 Skyworks Solutions, Inc.* 90,948
1,200 SPSS, Inc.* 21,840
1,200 Standard Microsystems Corporation* 36,000
1,000 StarTek, Inc. 33,210
900 Supertex, Inc.* 16,875
2,950 Symmetricom, Inc.* 21,240
2,400 Systems & Computer Technology Corporation * 35,280
3,000 Take-Two Interactive Software, Inc.* 118,650
1,000 TALX Corporation 21,660
2,900 Technitrol, Inc. 63,220
2,800 THQ, Inc.* 49,672
1,500 Three-Five Systems, Inc.* 6,960
1,000 Tollgrade Communications, Inc.* 15,670
2,400 Trimble Navigation, Ltd.* 66,360
1,700 Ultratech, Inc.* 53,057
2,500 Varian Semiconductor Equipment Associates, Inc.* 120,875
2,100 Veeco Instruments, Inc.* 53,214
2,700 Verity, Inc.* 37,935
1,900 ViaSat, Inc.* 37,297
3,000 WebEx Communications, Inc.* 66,270
1,600 Websense, Inc.* 37,440
1,400 X-Rite, Inc. 15,232
1,600 ZixIt Corporation * 15,038
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 5,104,943
Materials (4.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,100 A. Schulman, Inc. 39,879
1,100 A.M. Castle & Company * 5,720
2,600 AptarGroup, Inc. 93,080
1,600 Arch Chemicals, Inc. 35,488
1,100 Brush Engineered Materials, Inc.* 14,003
2,600 Buckeye Technologies, Inc.* 23,426
1,900 Cambrex Corporation 44,916
2,000 Caraustar Industries, Inc.* 19,220
1,500 Century Aluminum Company* 24,690
1,100 Chesapeake Corporation 26,840
700 Cleveland-Cliffs, Inc.* 21,000
2,000 Commercial Metals Company 49,360
1,100 Commonwealth Industries, Inc. 7,535
900 Deltic Timber Corporation 25,767
2,050 Florida Rock Industries, Inc. 117,362
2,300 Georgia Gulf Corporation 61,870
2,000 H.B. Fuller Company 49,560
1,100 IMCO Recycling, Inc.* 8,272
2,200 MacDermid, Inc. 65,736
5,400 Massey Energy Company 75,060
1,000 Material Sciences Corporation 9,380
2,080 Myers Industries, Inc. 25,376
2,000 OM Group, Inc. 35,800
2,800 OMNOVA Solutions, Inc.* 9,828
600 Penford Corporation 8,394
6,600 PolyOne Corporation 31,878
1,100 Pope & Talbot, Inc. 15,763
700 Quaker Chemical Corporation 18,578
1,200 Quanex Corporation 48,060
2,500 Rock-Tenn Company 40,250
1,500 RTI International Metals, Inc.* 18,015
1,700 Ryerson Tull, Inc. 13,702
1,100 Schweitzer-Mauduit International, Inc. 29,260
3,400 Steel Dynamics, Inc.* 63,342
700 Steel Technologies, Inc. 10,787
1,500 Texas Industries, Inc. 40,755
2,300 Wellman, Inc. 18,975
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 1,246,927
=========================================================================================================================
Utilities (3.6%)
- -------------------------------------------------------------------------------------------------------------------------
1,100 American States Water Company 26,950
3,600 Atmos Energy Corporation 88,200
3,500 Avista Corporation 59,500
800 Cascade Natural Gas Corporation 15,600
900 Central Vermont Public Service Corporation 20,700
1,200 CH Energy Group, Inc. 52,560
3,400 Cleco Corporation 56,950
3,400 El Paso Electric Company * 41,276
2,600 Energen Corporation 95,862
300 Green Mountain Power Corporation 6,813
1,400 Laclede Group, Inc. 39,690
2,000 New Jersey Resources Corporation 75,700
1,900 Northwest Natural Gas Company 55,100
1,100 NUI Corporation 18,777
2,400 Piedmont Natural Gas Company, Inc. 95,352
5,203 Southern Union Company * 91,625
2,400 Southwest Gas Corporation 54,192
2,500 Southwestern Energy Company * 48,500
3,100 UGI Corporation 95,480
1,100 UIL Holdings Corporation 41,316
2,400 UniSource Energy Corporation 46,320
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 1,126,463
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $25,906,720) 30,048,229
=========================================================================================================================
Shares Short-Term Investments (4.3%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
1,361,450 The AAL Money Market Fund(c) 0.528% N/A $1,361,450
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 1,361,450
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $27,268,170) $31,409,679
=========================================================================================================================
* 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 October 31, 2003, $64,800 in cash was pledged as
the initial margin deposit and $1,361,450 of the AAL
Money Market Fund was pledged as collateral to cover
open financial futures contracts written as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- -------------------------------------------------------------------------------------------------------------------------
Russell Mini Features 27 December 2003 Long $1,426,545 $1,386,268 $40,277
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 October 31, 2003(a) (unaudited)
Shares Common Stock (95.5%) Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Discretionary (18.4%)
- -------------------------------------------------------------------------------------------------------------------------
7,300 Aeropostale, Inc.* $225,205
7,900 Applebee's International, Inc. 296,329
10,600 Boyd Gaming Corporation 161,756
8,400 Cost Plus, Inc.* 385,308
16,913 Deckers Outdoor Corporation * 242,194
3,700 Entercom Communications Corporation * 169,497
6,700 Ethan Allen Interiors, Inc. 246,560
17,200 Hasbro, Inc. 374,960
15,200 Hearst-Argyle Television, Inc.* 367,992
13,500 Insight Enterprises, Inc.* 227,070
37,100 Interface, Inc.* 205,905
10,300 International Speedway Corporation 438,162
3,000 KB Home 205,470
5,100 Lear Corporation * 296,259
9,100 Lee Enterprises, Inc. 383,656
3,600 MarineMax, Inc.* 68,832
6,400 Michaels Stores, Inc. 303,808
17,100 Quiksilver, Inc. 293,607
21,200 Radio One, Inc.* 339,836
11,400 Red Robin Gourmet Burgers, Inc.* 336,539
7,100 Regis Corporation 269,942
7,600 Ross Stores, Inc. 380,076
11,300 Ruby Tuesday, Inc. 309,055
3,600 Ryland Group, Inc. 320,040
12,550 SCP Pool Corporation 439,250
7,200 Thor Industries, Inc. 461,664
6,500 Toll Brothers, Inc.* 239,460
41,200 Tower Automotive, Inc.* 163,976
29,900 Toys 'R' Us, Inc.* 388,700
15,300 West Marine, Inc.* 339,048
7,700 Winnebago Industries, Inc. 448,910
2,200 Wolverine World Wide, Inc. 44,440
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 9,373,506
=========================================================================================================================
Consumer Staples (2.1%)
- -------------------------------------------------------------------------------------------------------------------------
5,000 American Italian Pasta Company * 191,200
36,000 Casey's General Stores, Inc. 558,000
8,600 Church & Dwight Company, Inc. 320,522
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 1,069,722
=========================================================================================================================
Energy (5.4%)
- -------------------------------------------------------------------------------------------------------------------------
19,300 Chesapeake Energy Corporation 230,249
18,100 Energy Partners, Ltd.* 217,381
18,500 Key Energy Services, Inc.* 161,505
20,100 Maverick Tube Corporation * 339,489
11,500 Newfield Exploration Company * 456,895
9,100 Patterson-UTI Energy, Inc.* 260,169
7,400 Pogo Producing Company 309,394
6,900 Precision Drilling Corporation * 271,722
14,400 Pride International, Inc.* 235,872
10,650 TETRA Technologies, Inc. 240,796
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 2,723,472
=========================================================================================================================
Financials (18.4%)
- -------------------------------------------------------------------------------------------------------------------------
12,200 Affiliated Managers Group, Inc.* 884,500
2,900 Alexandria Real Estate Equities, Inc. 147,900
17,400 Allegiant Bancorp, Inc. 382,800
5,200 AMB Property Corporation 155,948
12,900 Argonaut Group, Inc. 207,045
6,700 Bank of the Ozarks, Inc. 285,487
11,605 BOK Financial Corporation * 438,669
9,000 Corus Bankshares, Inc. 529,200
4,000 Developers Diversified Realty Corporation 115,600
8,000 Downey Financial Corporation 367,200
5,600 Eastgroup Properties, Inc. 163,240
7,200 Fidelity National Financial, Inc. 222,624
18,900 Greater Bay Bancorp 509,544
16,200 HCC Insurance Holdings, Inc. 472,068
13,700 HRPT Properties Trust 128,232
7,100 IBERIABANK Corporation 366,147
8,700 IPC Holdings, Ltd. 325,815
7,100 Mercantile Bank Corporation 238,489
3,500 Mills Corporation 142,800
14,800 Nara Bancorp, Inc. 334,480
6,150 Penns Woods Bancorp, Inc. 253,134
12,000 Platinum Underwriters Holdings, Ltd. 344,880
6,700 Protective Life Corporation 217,549
13,500 Providian Financial Corporation * 149,985
8,800 Reinsurance Group of America 351,560
7,000 Russell 2000 Index Fund I Shares 738,710
4,100 S&P SmallCap 600 Index Fund I Shares 522,340
3,500 SL Green Realty Corporation 126,525
6,100 Wintrust Financial Corporation 264,374
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 9,386,845
=========================================================================================================================
Health Care (8.7%)
- -------------------------------------------------------------------------------------------------------------------------
8,400 Advanced Medical Optics, Inc.* 169,428
4,550 American Pharmaceutical Partners, Inc. 110,792
16,500 Apria Healthcare Group, Inc.* 478,500
12,800 CONMED Corporation* 260,480
8,600 Cooper Companies, Inc. 373,670
19,300 Cytyc Corporation * 249,549
17,400 Encore Medical Corporation * 119,016
5,200 KOS Pharmaceuticals, Inc.* 206,492
9,700 LifePoint Hospitals, Inc.* 249,387
4,400 Medicis Pharmaceutical Corporation 278,740
9,700 Omnicare, Inc. 371,898
18,400 Province Healthcare Company * 236,256
7,400 Renal Care Group, Inc.* 277,574
33,700 Savient Pharmaceuticals, Inc.* 203,885
11,900 Sybron Dental Specialties, Inc.* 273,700
19,200 United Surgical Partners International, Inc.* 579,072
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 4,438,439
=========================================================================================================================
Industrials (19.1%)
- -------------------------------------------------------------------------------------------------------------------------
14,700 A.O. Smith Corporation 465,255
5,900 Alliant Techsystems, Inc.* 305,384
15,700 Allied Waste Industries, Inc.* 177,096
8,300 Arkansas Best Corporation 274,813
3,400 Briggs & Stratton Corporation 221,034
22,400 Circor International, Inc. 461,440
17,800 Consolidated Graphics, Inc.* 492,170
4,700 Donaldson Company, Inc. 268,934
13,300 EDO Corporation 296,590
6,200 Fastenal Company 275,714
16,900 Federal Signal Corporation 249,951
5,600 Genlyte Group, Inc.* 264,096
26,500 Griffon Corporation * 512,775
51,400 Hall, Kinion & Associates, Inc.* 205,600
13,200 HON INDUSTRIES, Inc. 541,200
14,400 IDEX Corporation 535,392
6,500 Jacobs Engineering Group, Inc.* 301,080
29,900 KForce, Inc.* 261,027
11,700 Manitowoc Company, Inc. 253,890
14,300 Mesa Air Group, Inc.* 154,011
15,300 MSC Industrial Direct Company, Inc. 361,845
7,500 Mueller Industries, Inc.* 236,700
3,400 Oshkosh Truck Corporation 155,822
10,800 Regal-Beloit Corporation 219,780
20,200 Robbins & Myers, Inc. 426,220
4,500 Roper Industries, Inc. 222,390
14,600 SkyWest, Inc. 269,954
14,400 Thomas Industries, Inc. 434,880
4,700 Waste Connections, Inc.* 162,996
16,700 Watson Wyatt & Company Holdings * 401,635
17,500 Werner Enterprises, Inc. 315,700
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 9,725,374
=========================================================================================================================
Information Technology (14.3%)
- -------------------------------------------------------------------------------------------------------------------------
11,800 Acxiom Corporation* 187,620
73,600 ADC Telecommunications, Inc.* 187,680
7,200 Advanced Fibre Communications, Inc.* 173,304
34,400 Artesyn Technologies, Inc.* 283,112
13,400 Autodesk, Inc. 257,950
20,900 Axcelis Technologies, Inc.* 221,122
6,200 Brooks Automation, Inc.* 154,690
33,300 CIBER, Inc.* 307,026
10,700 Cypress Semiconductor Corporation * 229,622
21,000 Digi International, Inc.* 193,200
6,000 Fair Isaac Corporation 382,680
31,600 Ingram Micro, Inc.* 467,680
10,900 Integrated Device Technology, Inc.* 171,130
7,200 International Rectifier Corporation * 343,656
27,300 Ixia * 327,600
5,700 JDA Software Group, Inc.* 122,037
15,100 Littelfuse, Inc.* 401,660
76,400 Management Network Group, Inc.* 221,560
16,200 Methode Electronics, Inc. 192,942
22,600 MoldFlow Corporation * 226,000
3,800 Novellus Systems, Inc.* 156,902
58,700 Parametric Technology Corporation * 182,557
4,700 Photronics, Inc.* 101,238
6,200 Plantronics, Inc.* 172,422
17,400 Plexus Corporation* 300,846
6,300 SPSS, Inc.* 114,660
16,500 Tech Data Corporation* 543,180
9,600 Tollgrade Communications, Inc.* 150,432
11,000 VeriSign, Inc.* 174,570
18,200 Vishay Intertechnology, Inc.* 341,250
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 7,290,328
=========================================================================================================================
Materials (5.6%)
- -------------------------------------------------------------------------------------------------------------------------
3,900 Florida Rock Industries, Inc. 223,275
13,500 Lafarge North America, Inc. 487,350
14,400 MacDermid, Inc. 430,272
14,400 NOVA Chemicals Corporation 308,160
7,400 Peabody Energy Corporation 246,642
9,500 Schweitzer-Mauduit International, Inc. 252,700
8,800 Silgan Holdings, Inc.* 281,424
12,300 Steel Dynamics, Inc.* 229,149
29,200 Wausau-Mosinee Paper Corporation 360,912
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 2,819,884
=========================================================================================================================
Utilities (3.5%)
- -------------------------------------------------------------------------------------------------------------------------
10,900 Atmos Energy Corporation 267,050
5,400 CH Energy Group, Inc. 236,520
6,600 Energen Corporation 243,342
10,400 Northwest Natural Gas Company 301,600
6,200 Piedmont Natural Gas Company, Inc. 246,326
9,800 Puget Energy, Inc. 222,754
13,400 UniSource Energy Corporation 258,620
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 1,776,212
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $36,893,539) 48,603,782
=========================================================================================================================
Shares Short-Term Investments (4.5%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
2,306,928 The AAL Money Market Fund 0.528% N/A $2,306,928
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 2,306,928
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $39,200,467) $50,910,710
=========================================================================================================================
* 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 Mid Cap Stock Fund
Schedule of Investments as of October 31, 2003(a) (unaudited)
Shares Common Stock (94.4%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
55,200 CenturyTel, Inc. $1,973,400
409,300 Cincinnati Bell, Inc. * 2,091,523
35,900 Commonwealth Telephone Enterprises, Inc. * 1,463,284
138,200 Sprint Corporation (PCS Group) * 601,170
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 6,129,377
=========================================================================================================================
Consumer Discretionary (17.4%)
- -------------------------------------------------------------------------------------------------------------------------
68,900 Abercrombie & Fitch Company * 1,963,650
46,900 Aeropostale, Inc.* 1,446,865
94,800 American Axle & Manufacturing Holdings, Inc.* 3,280,080
43,000 AnnTaylor Stores Corporation* 1,539,400
192,300 Applebee's International, Inc. 7,213,173
38,000 AutoZone, Inc.* 3,651,800
68,100 Belo Corporation 1,856,406
109,100 Boyd Gaming Corporation 1,664,866
156,600 Brinker International, Inc.* 4,984,578
82,200 Coach, Inc. 2,915,634
175,100 D.R. Horton, Inc. 6,968,980
86,000 Dollar Tree Stores, Inc.* 3,283,480
63,700 E.W. Scripps Company 5,918,367
100,000 Entercom Communications Corporation * 4,581,000
76,100 Family Dollar Stores, Inc. 3,318,721
49,000 GTECH Holdings Corporation 2,189,320
193,700 Hearst-Argyle Television, Inc.* 4,689,477
161,600 Hilton Hotels Corporation 2,559,744
118,500 International Game Technology 3,880,875
72,300 International Speedway Corporation 3,075,642
62,900 Jones Apparel Group, Inc. 2,170,050
106,200 Lamar Advertising Company * 3,217,860
27,100 Leapfrog Enterprises, Inc.* 936,847
23,000 Lear Corporation * 1,336,070
82,400 Lennar Corporation 7,568,440
146,300 Linens 'n Things, Inc.* 4,318,776
182,600 Mattel, Inc. 3,535,136
80,100 Men's Wearhouse, Inc.* 2,359,746
113,500 Michaels Stores, Inc. 5,387,845
43,800 Mohawk Industries, Inc.* 3,246,456
61,100 Outback Steakhouse, Inc. 2,566,200
55,200 PETsMART, Inc. 1,413,672
40,300 Pixar, Inc.* 2,773,043
16,300 Polaris Industries, Inc. 1,395,280
103,200 Quiksilver, Inc. 1,771,944
275,600 Radio One, Inc.* 4,382,040
81,200 Reebok International, Ltd. 3,162,740
123,400 Ross Stores, Inc. 6,171,234
94,400 Ruby Tuesday, Inc. 2,581,840
112,300 Staples, Inc.* 3,011,886
36,900 Tractor Supply Company 1,546,479
5,510 Washington Post Company 4,063,129
45,700 Williams-Sonoma, Inc.* 1,614,581
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 141,513,352
=========================================================================================================================
Consumer Staples (3.4%)
- -------------------------------------------------------------------------------------------------------------------------
76,900 Constellation Brands, Inc.* 2,412,353
237,150 Dean Foods Company 7,173,788
292,200 Del Monte Foods Company * 2,778,822
41,500 Hershey Foods Corporation 3,199,650
300,300 Hormel Foods Corporation 7,414,407
16,600 R.J. Reynolds Tobacco Holdings, Inc. 797,298
254,300 Tyson Foods, Inc. 3,628,861
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 27,405,179
=========================================================================================================================
Energy (6.6%)
- -------------------------------------------------------------------------------------------------------------------------
19,000 Anadarko Petroleum Corporation 828,780
44,000 BJ Services Company * 1,443,640
128,000 Chesapeake Energy Corporation 1,527,040
37,400 Cooper Cameron Corporation * 1,601,468
166,500 ENSCO International, Inc. 4,387,275
121,500 EOG Resources, Inc. 5,120,010
134,300 Maverick Tube Corporation * 2,268,327
43,000 Murphy Oil Corporation 2,536,140
60,325 Nabors Industries, Ltd.* 2,280,285
60,700 Noble Corporation* 2,083,831
90,300 Patterson-UTI Energy, Inc.* 2,581,677
87,800 Pioneer Natural Resources Company * 2,322,310
150,000 Pride International, Inc.* 2,457,000
114,900 Smith International, Inc.* 4,277,727
208,100 Valero Energy Corporation 8,885,871
73,400 Weatherford International, Ltd.* 2,550,650
278,566 XTO Energy, Inc. 6,593,657
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 53,745,688
=========================================================================================================================
Financials (17.0%)
- -------------------------------------------------------------------------------------------------------------------------
35,100 Affiliated Managers Group, Inc.* 2,544,750
185,800 American Financial Realty Trust 2,824,160
296,500 Banknorth Group, Inc. 9,286,380
206,700 CIT Group, Inc. 6,949,254
148,200 City National Corporation 8,923,122
127,700 Compass Bancshares, Inc. 4,824,506
87,100 Countrywide Financial Corporation 9,155,952
107,500 Doral Financial Corporation 5,428,750
47,900 Everest Re Group, Ltd. 3,973,305
97,920 Fidelity National Financial, Inc. 3,027,686
65,500 General Growth Properties, Inc. 5,010,750
179,700 Greater Bay Bancorp 4,844,712
149,100 GreenPoint Financial Corporation 4,644,465
20,600 Legg Mason, Inc. 1,714,950
114,900 Lincoln National Corporation 4,587,957
83,500 M&T Bank Corporation 7,840,650
100,200 National Commerce Financial Corporation 2,752,494
209,700 North Fork Bancorporation, Inc. 8,174,106
110,200 ProLogis Trust 3,255,308
204,200 Protective Life Corporation 6,630,374
197,700 Providian Financial Corporation * 2,196,447
83,400 Public Storage, Inc. 3,336,000
146,300 Radian Group, Inc. 7,739,270
157,100 SEI Investments Company 4,574,752
154,900 TCF Financial Corporation 8,082,682
157,500 Willis Group Holdings, Ltd. 5,244,750
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 137,567,532
=========================================================================================================================
Health Care (12.8%)
- -------------------------------------------------------------------------------------------------------------------------
75,400 Anthem, Inc.* 5,159,622
57,800 Barr Laboratories, Inc. 4,437,306
39,400 Beckman Coulter, Inc. 1,956,210
128,500 Caremark Rx, Inc.* 3,218,925
73,600 Charles River Laboratories International, Inc.* 2,372,864
81,400 Coventry Health Care, Inc.* 4,456,650
112,373 Cytyc Corporation * 1,452,983
149,900 Dade Behring Holdings, Inc.* 4,582,443
45,000 Genzyme Corporation* 2,065,500
78,600 Gilead Sciences, Inc.* 4,289,988
65,700 Henry Schein, Inc.* 4,076,685
39,200 Invitrogen Corporation * 2,492,728
225,575 IVAX Corporation* 4,344,574
57,600 Martek Biosciences Corporation * 2,788,416
168,800 Medco Health Solutions, Inc.* 5,604,160
157,600 Millennium Pharmaceuticals, Inc.* 2,508,992
216,600 Mylan Laboratories, Inc. 5,230,890
68,900 Patterson Dental Company * 4,408,222
119,900 Quest Diagnostics, Inc.* 8,111,235
171,800 Sicor, Inc.* 4,604,240
152,700 STERIS Corporation* 3,179,214
29,900 Teva Pharmaceutical Industries, Ltd. 1,701,011
169,700 Triad Hospitals, Inc.* 5,214,881
146,400 Universal Health Services, Inc.* 6,888,120
54,800 Varian Medical Systems, Inc.* 3,503,912
77,900 Zimmer Holdings, Inc.* 4,970,799
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 103,620,570
=========================================================================================================================
Industrials (11.0%)
- -------------------------------------------------------------------------------------------------------------------------
41,800 A.O. Smith Corporation 1,322,970
45,325 Alliant Techsystems, Inc.* 2,346,022
149,400 Allied Waste Industries, Inc.* 1,685,232
47,700 American Standard Companies, Inc.* 4,564,890
66,800 C.H. Robinson Worldwide, Inc. 2,617,224
17,200 Carlisle Companies, Inc. 986,420
45,000 ChoicePoint, Inc.* 1,576,800
89,500 Cintas Corporation 3,818,070
20,600 Dover Corporation 803,812
16,700 Eaton Corporation 1,674,008
136,900 Fastenal Company 6,087,943
118,400 Hewitt Associates, Inc.* 3,042,880
30,700 IDEX Corporation 1,141,426
25,500 Ingersoll-Rand Company 1,540,200
107,600 Jacobs Engineering Group, Inc.* 4,984,032
87,900 L-3 Communications Holdings, Inc.* 4,108,446
117,900 Manpower, Inc. 5,470,560
14,800 Navistar International Corporation * 598,364
112,800 Nordson Corporation 3,125,688
186,400 Norfolk Southern Corporation 3,755,960
62,700 Precision Castparts Corporation 2,578,851
379,400 Republic Services, Inc. 8,821,050
91,200 Rockwell Collins, Inc. 2,503,440
65,700 Roper Industries, Inc. 3,246,894
58,900 Ryanair Holdings plc * 3,033,350
480,400 ServiceMaster Company 5,510,188
119,100 SPX Corporation * 5,731,092
45,900 Swift Transportation Company, Inc.* 1,029,537
43,500 Yellow Corporation* 1,428,975
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 89,134,324
=========================================================================================================================
Information Technology (17.5%)
- -------------------------------------------------------------------------------------------------------------------------
101,500 Adobe Systems, Inc.(b) 4,449,760
21,900 ADTRAN, Inc. 1,489,857
58,600 Advanced Fibre Communications, Inc.* 1,410,502
150,000 Affiliated Computer Services, Inc.* 7,339,500
59,500 Agilent Technologies, Inc.* 1,482,740
96,900 Analog Devices, Inc.* 4,295,577
121,400 Apple Computer, Inc.* 2,778,846
120,200 Autodesk, Inc. 2,313,850
294,100 BEA Systems, Inc.* 4,087,990
173,600 BearingPoint, Inc.* 1,631,840
45,000 BMC Software, Inc.* 782,100
34,100 Cabot Microelectonics Corporation * 1,943,700
75,300 Cadence Design Systems, Inc.* 1,158,867
75,600 CDW Corporation 4,539,780
203,300 Ceridian Corporation* 4,269,300
106,800 Check Point Software Technologies, Ltd.* 1,814,532
73,800 CheckFree Corporation * 2,031,714
60,800 Computer Associates International, Inc. 1,430,016
22,300 Computer Sciences Corporation* 883,526
116,900 DST Systems, Inc.* 4,421,158
49,500 Electronic Arts, Inc.* 4,902,480
85,200 Fair Isaac Corporation 5,434,056
155,400 Fiserv, Inc.* 5,488,728
69,500 Harris Corporation 2,586,790
40,200 InterDigital Communications Corporation * 682,998
52,300 International Rectifier Corporation * 2,496,279
89,000 Intersil Corporation 2,295,310
448,100 Interwoven, Inc.* 1,698,299
180,400 Lam Research Corporation * 5,184,696
21,400 Lexmark International, Inc.* 1,575,254
104,300 LSI Logic Corporation * 963,732
165,800 Macrovision Corporation * 3,642,626
249,950 Microchip Technology, Inc. 8,175,864
29,400 Novellus Systems, Inc.* 1,213,926
225,600 PerkinElmer, Inc. 4,063,056
42,400 Plantronics, Inc.* 1,179,144
54,300 QLogic Corporation * 3,043,515
26,200 SanDisk Corporation * 2,111,720
197,600 Siebel Systems, Inc.* 2,487,784
162,000 Storage Technology Corporation * 3,904,200
181,400 SunGard Data Systems, Inc.* 5,088,270
27,300 Symantec Corporation * 1,819,545
400,500 Symbol Technologies, Inc. 5,002,245
53,600 Synopsys, Inc. 1,700,192
78,900 UTStarcom, Inc.* 2,485,350
84,100 VeriSign, Inc.* 1,334,667
129,300 Vishay Intertechnology, Inc.* 2,424,375
184,200 Wind River Systems, Inc.* 1,234,140
43,000 Xilinx, Inc.* 1,363,100
31,350 Zebra Technologies Corporation 1,785,382
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 141,922,878
=========================================================================================================================
Materials (3.7%)
- -------------------------------------------------------------------------------------------------------------------------
504,500 Domtar, Inc. 5,625,175
217,000 FMC Corporation * 6,078,170
159,700 Lafarge North America, Inc. 5,765,170
36,900 NOVA Chemicals Corporation 789,660
101,600 Packaging Corporation of America * 2,001,520
93,600 Pactiv Corporation * 2,063,880
379,800 Sappi, Ltd. 4,861,440
133,200 Steel Dynamics, Inc.* 2,481,516
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 29,666,531
=========================================================================================================================
Utilities (4.3%)
- -------------------------------------------------------------------------------------------------------------------------
115,875 MDU Resources Group, Inc. 2,622,251
249,000 National Fuel Gas Company 5,565,150
47,200 NSTAR 2,204,240
98,700 PPL Corporation 3,940,104
269,300 Puget Energy, Inc. 6,121,189
264,000 Vectren Corporation 6,230,400
249,400 Wisconsin Energy Corporation 8,167,850
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 34,851,184
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $647,715,552) 765,556,615
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (5.6%) Interest Rate(c) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$5,300,000 Alpine Securitization Corporation 1.050% 11/17/2003 $5,297,527
5,000,000 Delaware Funding Corporation 1.040 11/7/2003 4,999,133
14,050,000 Sheffield Receivables Corporation 1.040 11/10/2003 14,046,347
12,223,724 The AAL Money Market Fund 0.528 N/A 12,223,724
9,050,000 UBS Finance Corporation 1.040 11/3/2003 9,049,477
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 45,616,208
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $693,331,760) $811,172,823
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of
total investments.
(b) Earmarked as collateral for options, futures or
longer settling trades as discussed in the notes to
the financial statements.
(c) The interest rate shown reflects the 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 Mid Cap Index Fund
Schedule of Investments as of October 31, 2003(a) (unaudited)
Shares Common Stock (96.3%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
7,060 Cincinnati Bell, Inc.* $36,077
1,500 Price Communications Corporation * 18,855
1,735 Telephone and Data Systems, Inc. 108,611
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 163,543
=========================================================================================================================
Consumer Discretionary (16.1%)
- -------------------------------------------------------------------------------------------------------------------------
2,066 99 CENTS Only Stores * 61,505
2,875 Abercrombie & Fitch Company * 81,938
2,057 American Eagle Outfitters, Inc.* 32,891
1,600 Applebee's International, Inc. 60,016
1,986 ArvinMeritor, Inc. 33,345
580 Bandag, Inc. 21,228
1,895 Barnes & Noble, Inc.* 56,471
3,315 Belo Corporation 90,367
1,315 Blyth, Inc. 36,794
1,020 Bob Evans Farms, Inc. 30,151
2,265 Borders Group, Inc.* 51,302
820 BorgWarner, Inc. 65,264
1,800 Boyd Gaming Corporation 27,468
2,790 Brinker International, Inc.* 88,806
2,150 Callaway Golf Company 34,938
3,000 CarMax, Inc.* 94,530
1,500 Catalina Marketing Corporation * 26,475
1,380 CBRL Group, Inc. 53,475
1,500 Cheesecake Factory, Inc.* 59,910
2,500 Chico's FAS, Inc.* 93,850
1,440 Claire's Stores, Inc. 55,728
5,400 Coach, Inc. 191,538
4,500 D.R. Horton, Inc. 179,100
3,302 Dollar Tree Stores, Inc.* 126,070
1,600 Emmis Communications Corporation * 35,488
1,500 Entercom Communications Corporation * 68,715
2,700 Extended Stay America, Inc.* 39,690
1,600 Furniture Brands International, Inc. 38,816
2,200 Gentex Corporation 85,910
1,660 GTECH Holdings Corporation 74,169
2,535 Harte-Hanks, Inc. 50,370
900 Hovnanian Enterprises, Inc.* 73,152
1,555 International Speedway Corporation 66,150
1,700 Krispy Kreme Doughnuts, Inc.* 73,644
1,975 Lear Corporation* 114,728
1,360 Lee Enterprises, Inc. 57,338
2,200 Lennar Corporation 202,070
1,775 Mandalay Resort Group 69,669
735 Media General, Inc. 48,547
2,000 Michaels Stores, Inc. 94,940
940 Modine Manufacturing Company 24,055
1,920 Mohawk Industries, Inc.* 142,310
1,425 Neiman Marcus Group, Inc.* 67,759
1,600 O'Reilly Automotive, Inc.* 69,264
2,145 Outback Steakhouse, Inc. 90,090
8,720 Park Place Entertainment Corporation * 83,712
1,925 Payless ShoeSource, Inc. 25,468
4,100 PETsMART, Inc. 105,001
2,600 Pier 1 Imports, Inc. 60,060
2,815 Reader's Digest Association, Inc. 41,465
2,300 Rent-A-Center, Inc. 71,898
2,260 Ross Stores, Inc. 113,023
1,900 Ruby Tuesday, Inc. 51,965
4,135 Saks, Inc.* 57,476
1,110 Scholastic Corporation * 34,332
2,670 Six Flags, Inc.* 15,806
820 Superior Industries International, Inc. 34,850
1,100 Timberland Company * 57,145
2,100 Toll Brothers, Inc.* 77,364
1,505 Unifi, Inc.* 7,510
290 Washington Post Company 213,849
2,960 Westwood One, Inc.* 88,593
3,370 Williams-Sonoma, Inc.* 119,062
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 4,498,613
=========================================================================================================================
Consumer Staples (4.5%)
- -------------------------------------------------------------------------------------------------------------------------
2,030 BJ's Wholesale Club, Inc.* 52,151
1,210 Church & Dwight Company, Inc. 45,097
3,000 Constellation Brands, Inc.* 94,110
4,557 Dean Foods Company 137,849
2,805 Dial Corporation 67,320
2,500 Energizer Holdings, Inc.* 92,000
4,025 Hormel Foods Corporation 99,377
1,270 Interstate Bakeries Corporation 18,644
1,495 J.M. Smucker Company 65,436
1,045 Lancaster Colony Corporation 41,497
1,100 Longs Drug Stores Corporation 24,640
4,110 PepsiAmericas, Inc. 61,568
1,280 Ruddick Corporation 20,429
1,310 Sensient Technologies Corporation 25,152
3,200 Smithfield Foods, Inc.* 68,032
1,503 Toostie Roll Industries, Inc. 49,584
10,192 Tyson Foods, Inc. 145,440
750 Universal Corporation 32,685
1,800 Whole Foods Market, Inc.* 106,632
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 1,247,643
=========================================================================================================================
Energy (5.8%)
- -------------------------------------------------------------------------------------------------------------------------
1,600 Cooper Cameron Corporation * 68,512
4,380 ENSCO International, Inc. 115,413
1,900 FMC Technologies, Inc.* 38,152
1,500 Forest Oil Corporation * 35,175
3,530 Grant Prideco, Inc.* 40,030
2,110 Hanover Compressor Company * 22,366
1,425 Helmerich & Payne, Inc. 37,777
2,670 Murphy Oil Corporation 157,477
2,400 National-Oilwell, Inc.* 45,768
1,690 Noble Energy, Inc. 67,127
970 Overseas Shipholding Group, Inc. 26,442
2,300 Patterson-UTI Energy, Inc.* 65,757
3,460 Pioneer Natural Resources Company * 91,517
1,900 Pogo Producing Company 79,439
3,900 Pride International, Inc.* 63,882
2,950 Smith International, Inc.* 109,828
1,780 Tidewater, Inc. 48,790
3,380 Valero Energy Corporation 144,326
2,755 Varco International, Inc.* 48,460
3,830 Weatherford International, Ltd.* 133,092
1,000 Western Gas Resources, Inc. 42,500
5,300 XTO Energy, Inc. 125,451
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,607,281
=========================================================================================================================
Financials (19.2%)
- -------------------------------------------------------------------------------------------------------------------------
2,375 A.G. Edwards, Inc. 96,188
1,565 Allmerica Financial Corporation * 41,676
2,400 AMB Property Corporation 71,976
2,000 American Financial Group, Inc. 44,540
4,500 AmeriCredit Corporation* 60,300
1,100 AmerUs Group Company 41,525
2,600 Arthur J. Gallagher & Company 75,894
2,196 Associated Banc-Corp 90,387
2,330 Astoria Financial Corporation 80,711
1,685 Bank of Hawaii Corporation 66,389
4,700 Banknorth Group, Inc. 147,204
2,000 Brown & Brown, Inc. 60,900
1,410 City National Corporation 84,896
3,600 Colonial BancGroup, Inc. 56,448
2,200 Commerce Bancorp, Inc. 106,348
3,675 Compass Bancshares, Inc. 138,842
1,500 Cullen/Frost Bankers, Inc. 58,140
10,490 E*TRADE Group, Inc.* 108,047
2,000 Eaton Vance Corporation 69,760
1,605 Everest Re Group, Ltd. 133,135
4,262 Fidelity National Financial, Inc. 131,781
2,200 First American Corporation 63,030
2,470 FirstMerit Corporation 63,677
1,425 GATX Corporation 32,048
1,500 Greater Bay Bancorp 40,440
3,987 GreenPoint Financial Corporation 124,195
1,900 HCC Insurance Holdings, Inc. 55,366
4,575 Hibernia Corporation 103,349
1,500 Highwoods Properties, Inc. 37,200
1,230 Horace Mann Educators Corporation 16,298
1,800 Hospitality Properties Trust 66,006
1,600 Independence Community Bank Corporation 58,800
1,600 IndyMac Bancorp, Inc. 47,040
1,312 Investment Technology Group, Inc.* 26,056
1,900 Investors Financial Services Corporation 67,127
1,700 LaBranche & Company, Inc. 18,003
1,995 Legg Mason, Inc. 166,084
1,700 Leucadia National Corporation 71,400
2,300 Liberty Property Trust 83,674
3,500 M&T Bank Corporation 328,649
1,700 Mack-Cali Realty Corporation 64,073
2,290 Mercantile Bankshares Corporation 97,027
1,400 MONY Group, Inc. 44,814
5,944 National Commerce Financial Corporation 163,282
2,800 New Plan Excel Realty Trust, Inc. 63,560
4,000 New York Community Bancorp, Inc. 144,800
1,715 Ohio Casualty Corporation* 26,240
3,485 Old Republic International Corporation 125,251
2,670 PMI Group, Inc. 102,074
2,055 Protective Life Corporation 66,726
1,415 Provident Financial Group, Inc. 41,672
2,700 Radian Group, Inc. 142,830
2,200 Roslyn Bancorp, Inc. 59,268
3,100 SEI Investments Company 90,272
1,000 Silicon Valley Bancshares * 35,100
8,480 Sovereign Bancorp, Inc. 176,469
900 StanCorp Financial Group, Inc. 56,745
2,110 TCF Financial Corporation 110,100
3,500 United Dominion Realty Trust, Inc. 61,075
2,015 Unitrin, Inc. 74,555
2,400 W.R. Berkley Corporation 82,296
2,400 Waddell & Reed Financial, Inc. 53,232
2,000 Washington Federal, Inc. 52,680
1,370 Webster Financial Corporation 61,239
925 Westamerica Bancorporation 46,306
1,970 Wilmington Trust Corporation 66,350
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 5,341,565
=========================================================================================================================
Health Care (12.4%)
- -------------------------------------------------------------------------------------------------------------------------
2,700 AdvancePCS, Inc.* 138,969
2,695 Apogent Technologies, Inc.* 59,155
1,545 Apria Healthcare Group, Inc.* 44,805
1,950 Barr Laboratories, Inc. 149,702
1,810 Beckman Coulter, Inc. 89,866
1,300 Charles River Laboratories International, Inc.* 41,912
2,800 Community Health Systems, Inc.* 67,256
1,770 Covance, Inc.* 46,073
1,800 Coventry Health Care, Inc.* 98,550
3,100 Cytyc Corporation* 40,083
2,332 Dentsply International, Inc. 103,051
1,800 Edwards Lifesciences Corporation * 52,200
2,750 First Health Group Corporation * 67,128
5,940 Gilead Sciences, Inc.* 324,205
3,350 Health Net, Inc.* 105,826
1,300 Henry Schein, Inc.* 80,665
1,830 Hillenbrand Industries, Inc. 108,940
2,370 ICN Pharmaceuticals, Inc. 45,765
4,500 IDEC Pharmaceuticals Corporation * 158,085
5,700 IVAX Corporation * 109,782
1,100 LifePoint Hospitals, Inc.* 28,281
2,830 Lincare Holdings, Inc.* 110,200
8,622 Millennium Pharmaceuticals, Inc.* 137,262
7,823 Mylan Laboratories, Inc. 188,913
2,985 Omnicare, Inc. 114,445
2,400 Oxford Health Plans, Inc.* 97,200
1,075 PacifiCare Health Systems, Inc.* 63,962
2,000 Patterson Dental Company* 127,960
2,030 Perrigo Company 27,304
1,000 Pharmaceutical Resources, Inc.* 72,280
2,700 Protein Design Labs, Inc.* 36,396
2,470 Sepracor, Inc.* 65,776
3,400 Sicor, Inc.* 91,120
1,980 STERIS Corporation* 41,224
2,200 Triad Hospitals, Inc.* 67,606
1,700 Universal Health Services, Inc.* 79,985
2,000 Varian Medical Systems, Inc.* 127,880
2,200 Vertex Pharmaceuticals, Inc.* 28,864
1,350 VISX, Inc.* 32,751
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 3,471,427
=========================================================================================================================
Industrials (11.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,110 AGCO Corporation * 37,980
735 Alaska Air Group, Inc. * 21,161
1,250 Alexander & Baldwin, Inc. 38,762
2,530 ALLETE, Inc. 76,431
960 AMETEK, Inc. 45,168
710 Banta Corporation 27,165
1,505 Brink's Company 30,175
2,510 C.H. Robinson Worldwide, Inc. 98,342
2,900 Career Education Corporation 155,295
865 Carlisle Companies, Inc. 49,608
2,500 ChoicePoint, Inc.* 87,600
1,415 CNF, Inc. 49,553
2,600 Copart, Inc.* 32,422
1,300 Corinthian Colleges, Inc.* 80,496
1,995 DeVry, Inc.* 48,419
1,295 Donaldson Company, Inc. 74,100
2,200 Dun & Bradstreet Corporation * 102,410
1,400 Dycom Industries, Inc.* 30,254
1,100 Education Management Corporation * 69,498
1,300 EGL, Inc.* 21,203
3,100 Expeditors International of Washington, Inc. 116,374
2,270 Fastenal Company 100,947
1,395 Federal Signal Corporation 20,632
1,600 Flowserve Corporation * 32,736
3,700 Gartner Group, Inc.* 47,175
1,300 Graco, Inc. 49,530
1,230 Granite Construction, Inc. 24,588
1,230 Harsco Corporation 47,121
2,080 Herman Miller, Inc. 47,778
1,715 HON INDUSTRIES, Inc. 70,315
1,755 Hubbell, Inc. 75,184
2,280 J.B. Hunt Transport Services, Inc. 57,866
1,620 Jacobs Engineering Group, Inc.* 75,038
1,800 JetBlue Airways Corporation * 103,824
990 Kelly Services, Inc. 24,255
1,065 Kennametal, Inc. 39,277
1,000 Korn/Ferry International * 8,740
2,850 L-3 Communications Holdings, Inc.* 133,209
2,250 Manpower, Inc. 104,400
960 Nordson Corporation 26,602
1,415 Pentair, Inc. 58,015
1,500 Precision Castparts Corporation 61,695
3,300 Quanta Services, Inc.* 26,994
4,700 Republic Services, Inc. 109,275
1,260 Rollins, Inc. 25,603
275 Sequa Corporation * 13,118
1,705 Sotheby's Holdings, Inc.* 18,158
2,240 SPX Corporation* 107,789
1,200 Stericycle, Inc.* 55,416
2,450 Swift Transportation Company, Inc.* 54,954
1,300 Sylvan Learning Systems, Inc.* 36,790
585 Tecumseh Products Company 23,973
1,135 Teleflex, Inc. 52,221
1,320 Trinity Industries, Inc. 33,594
2,200 United Rentals, Inc.* 38,324
1,475 Valassis Communications, Inc.* 38,202
2,515 Viad Corporation 62,825
2,375 Werner Enterprises, Inc. 42,845
1,120 York International Corporation 44,509
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 3,285,933
=========================================================================================================================
Information Technology (15.9%)
- -------------------------------------------------------------------------------------------------------------------------
10,700 3Com Corporation* 77,040
2,500 Activision, Inc. 37,725
2,445 Acxiom Corporation * 38,876
1,145 ADTRAN, Inc. 77,894
2,500 Advanced Fibre Communications, Inc.* 60,175
900 Advent Software, Inc.* 16,479
3,850 Affiliated Computer Services, Inc.* 188,380
2,925 Arrow Electronics, Inc.* 62,449
1,678 Ascential Software Corporation * 37,235
13,590 Atmel Corporation* 76,648
3,460 Avnet, Inc.* 67,124
1,400 Avocent Corporation * 52,920
3,500 BISYS Group, Inc.* 50,050
717 Cabot Microelectonics Corporation * 40,869
7,880 Cadence Design Systems, Inc.* 121,273
2,450 CDW Corporation 147,122
4,300 Ceridian Corporation * 90,300
1,900 Certegy, Inc. 63,954
2,270 CheckFree Corporation * 62,493
1,700 CommScope, Inc.* 26,333
1,800 Credence Systems Corporation * 29,358
2,100 Cree, Inc.* 37,296
1,445 CSG Systems International, Inc.* 16,603
3,440 Cypress Semiconductor Corporation * 73,822
2,090 Diebold, Inc. 119,255
3,390 DST Systems, Inc.* 128,210
1,400 Fair Isaac Corporation 89,292
3,400 Fairchild Semiconductor International, Inc.* 76,840
1,895 Harris Corporation 70,532
1,000 Imation Corporation 34,050
2,000 Integrated Circuit Systems, Inc.* 67,140
3,005 Integrated Device Technology, Inc.* 47,178
1,900 International Rectifier Corporation * 90,687
1,400 Internet Security Systems, Inc.* 22,974
4,000 Intersil Corporation 103,160
2,500 Jack Henry & Associates, Inc. 49,950
1,815 Keane, Inc.* 23,849
2,500 KEMET Corporation * 33,125
3,700 Lam Research Corporation * 106,338
3,200 Lattice Semiconductor Corporation * 24,960
1,400 LTX Corporation * 20,006
1,800 Macromedia, Inc.* 34,398
1,400 Macrovision Corporation * 30,758
3,300 McDATA Corporation * 34,089
1,950 Mentor Graphics Corporation * 32,662
2,600 Micrel, Inc.* 42,900
5,960 Microchip Technology, Inc. 194,952
2,925 MPS Group, Inc.* 27,934
1,500 National Instruments Corporation 63,870
4,595 Network Associates, Inc.* 64,008
1,100 Newport Corporation * 17,336
1,300 Plantronics, Inc.* 36,153
1,200 Plexus Corporation * 20,748
2,890 Polycom, Inc.* 57,887
1,800 Powerwave Technologies, Inc.* 11,718
5,080 Quantum Corporation * 15,799
1,500 Retek, Inc.* 15,045
1,955 Reynolds & Reynolds Company 53,098
5,300 RF Micro Devices, Inc.* 62,063
1,700 RSA Security, Inc.* 22,049
2,300 SanDisk Corporation * 185,380
2,100 Semtech Corporation * 46,620
1,500 Silicon Laboratories, Inc.* 80,970
3,160 Storage Technology Corporation * 76,156
2,700 Sybase, Inc.* 48,330
4,600 Synopsys, Inc. 145,912
1,645 Tech Data Corporation * 54,153
2,300 Titan Corporation * 48,576
985 Transaction Systems Architects, Inc.* 19,700
3,815 TriQuint Semiconductor, Inc.* 27,354
1,000 Varian, Inc.* 35,810
4,595 Vishay Intertechnology, Inc.* 86,156
2,300 Wind River Systems, Inc.* 15,410
1,300 Zebra Technologies Corporation 74,035
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 4,441,993
=========================================================================================================================
Materials (3.9%)
- -------------------------------------------------------------------------------------------------------------------------
2,095 Airgas, Inc. 40,119
1,180 Albemarle Corporation 31,648
1,500 Arch Coal, Inc. 36,750
1,645 Bowater, Inc. 67,165
1,775 Cabot Corporation 49,522
680 Carpenter Technology Corporation 17,578
3,220 Crompton Corporation 17,259
1,165 Cytec Industries, Inc.* 40,670
1,190 Ferro Corporation 24,431
1,000 FMC Corporation * 28,010
1,240 Glatfelter Company 15,810
3,280 IMC Global, Inc. 22,927
1,420 Longview Fibre Company 15,265
1,470 Lubrizol Corporation 44,541
5,010 Lyondell Chemical Company 71,643
1,405 Martin Marietta Materials, Inc. 57,563
570 Minerals Technologies, Inc. 31,236
1,685 Olin Corporation 29,336
3,000 Packaging Corporation of America * 59,100
1,600 Peabody Energy Corporation 53,328
800 Potlatch Corporation 25,008
1,267 Rayonier, Inc. 53,277
3,315 RPM International, Inc. 47,902
900 Scotts Company * 51,975
2,775 Sonoco Products Company 59,024
1,500 Valspar Corporation 71,550
1,420 Wausau-Mosinee Paper Corporation 17,551
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 1,080,188
=========================================================================================================================
Utilities (6.1%)
- -------------------------------------------------------------------------------------------------------------------------
1,885 AGL Resources, Inc. 53,063
3,175 Alliant Energy Corporation 76,390
5,595 Aquila, Inc. 22,100
970 Black Hills Corporation 31,205
3,645 DPL, Inc. 66,412
2,150 Duquesne Light Holdings, Inc. 34,550
4,265 Energy East Corporation 95,749
1,800 Equitable Resources, Inc. 74,160
2,030 Great Plains Energy, Inc. 64,716
1,085 Hawaiian Electric Industries, Inc. 49,660
1,125 IDACORP, Inc. 30,544
3,300 MDU Resources Group, Inc. 74,679
2,370 National Fuel Gas Company 52,970
3,825 Northeast Utilities Service Company 72,063
1,515 NSTAR 70,750
2,465 OGE Energy Corporation 56,227
2,200 ONEOK, Inc. 43,758
4,932 Pepco Holdings, Inc. 86,803
2,000 Philadelphia Suburban Corporation 47,240
1,130 PNM Resources, Inc. 31,956
2,725 Puget Energy, Inc. 61,939
2,405 Questar Corporation 76,359
3,190 SCANA Corporation 109,385
3,370 Sierra Pacific Resources * 20,119
2,140 Vectren Corporation 50,504
2,100 Westar Energy, Inc. 41,958
1,380 WGL Holdings, Inc. 38,157
3,410 Wisconsin Energy Corporation 111,678
1,000 WPS Resources Corporation 44,330
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 1,689,424
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $24,095,291) 26,827,610
=========================================================================================================================
Shares Short-Term Investments (3.7%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
1,036,465 The AAL Money Market Fund(c) 0.528% N/A $1,036,465
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 1,036,465
- -------------------------------------------------------------------------------------------------------------------------
Total Investment (cost $25,131,756) $27,864,075
=========================================================================================================================
* 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 October 31, 2003, $48,000 in cash was pledged as
the initial margin deposit and $1,036,465 of the AAL
Money Market Fund was pledged as collateral to cover
open financial futures contracts written as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- -------------------------------------------------------------------------------------------------------------------------
S&P 400 Mini Futures 20 December 2003 Long $1,010,000 $1,053,450 $43,450
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 October 31, 2003(a) (unaudited)
Shares Common Stock (98.2%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
9,310 Cincinnati Bell, Inc.* $47,574
2,100 Price Communications Corporation * 26,397
2,210 Telephone and Data Systems, Inc. 138,346
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 212,317
=========================================================================================================================
Consumer Discretionary (16.4%)
- -------------------------------------------------------------------------------------------------------------------------
2,700 99 CENTS Only Stores * 80,379
3,670 Abercrombie & Fitch Company * 104,595
2,700 American Eagle Outfitters, Inc.* 43,173
2,200 Applebee's International, Inc. 82,522
2,717 ArvinMeritor, Inc. 45,618
780 Bandag, Inc. 28,548
2,460 Barnes & Noble, Inc.* 73,308
4,410 Belo Corporation 120,217
1,810 Blyth, Inc. 50,644
1,410 Bob Evans Farms, Inc. 41,680
2,960 Borders Group, Inc.* 67,044
1,120 BorgWarner, Inc. 89,141
2,500 Boyd Gaming Corporation 38,150
3,675 Brinker International, Inc.* 116,975
2,950 Callaway Golf Company 47,938
3,900 CarMax, Inc.* 122,889
2,000 Catalina Marketing Corporation * 35,300
1,900 CBRL Group, Inc. 73,625
2,000 Cheesecake Factory, Inc.* 79,880
3,300 Chico's FAS, Inc.* 123,882
1,830 Claire's Stores, Inc. 70,821
6,900 Coach, Inc. 244,743
5,950 D.R. Horton, Inc. 236,810
4,370 Dollar Tree Stores, Inc.* 166,847
2,000 Emmis Communications Corporation * 44,360
1,900 Entercom Communications Corporation * 87,039
3,700 Extended Stay America, Inc.* 54,390
2,120 Furniture Brands International, Inc. 51,431
2,900 Gentex Corporation 113,245
2,300 GTECH Holdings Corporation 102,764
3,420 Harte-Hanks, Inc. 67,955
1,100 Hovnanian Enterprises, Inc.* 89,408
2,050 International Speedway Corporation 87,207
2,200 Krispy Kreme Doughnuts, Inc.* 95,304
2,560 Lear Corporation * 148,710
1,770 Lee Enterprises, Inc. 74,623
3,000 Lennar Corporation 275,552
2,270 Mandalay Resort Group $89,098
1,010 Media General, Inc. 66,710
2,500 Michaels Stores, Inc. 118,675
1,350 Modine Manufacturing Company 34,546
2,460 Mohawk Industries, Inc.* 182,335
1,810 Neiman Marcus Group, Inc.* 86,066
2,000 O'Reilly Automotive, Inc.* 86,580
2,960 Outback Steakhouse, Inc. 124,320
11,580 Park Place Entertainment Corporation * 111,168
2,670 Payless ShoeSource, Inc. 35,324
5,400 PETsMART, Inc. 138,294
3,400 Pier 1 Imports, Inc. 78,540
3,890 Reader's Digest Association, Inc. 57,300
3,100 Rent-A-Center, Inc. 96,906
2,850 Ross Stores, Inc. 142,528
2,500 Ruby Tuesday, Inc. 68,375
5,410 Saks, Inc.* 75,199
1,580 Scholastic Corporation * 48,869
3,570 Six Flags, Inc.* 21,134
1,120 Superior Industries International, Inc. 47,600
1,300 Timberland Company* 67,535
2,800 Toll Brothers, Inc.* 103,152
2,080 Unifi, Inc.* 10,379
360 Washington Post Company 265,468
3,850 Westwood One, Inc.* 115,230
4,460 Williams-Sonoma, Inc.* 157,572
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 5,905,620
=========================================================================================================================
Consumer Staples (4.6%)
- -------------------------------------------------------------------------------------------------------------------------
2,620 BJ's Wholesale Club, Inc.* 67,308
1,620 Church & Dwight Company, Inc. 60,377
4,000 Constellation Brands, Inc.* 125,480
5,913 Dean Foods Company 178,868
3,700 Dial Corporation 88,800
3,150 Energizer Holdings, Inc.* 115,920
5,400 Hormel Foods Corporation 133,326
1,760 Interstate Bakeries Corporation 25,837
1,988 J.M. Smucker Company 87,015
1,430 Lancaster Colony Corporation 56,785
1,500 Longs Drug Stores Corporation 33,600
5,560 PepsiAmericas, Inc. 83,289
1,790 Ruddick Corporation 28,568
1,820 Sensient Technologies Corporation 34,944
4,100 Smithfield Foods, Inc.* 87,166
2,046 Toostie Roll Industries, Inc. 67,498
13,422 Tyson Foods, Inc. 191,532
1,040 Universal Corporation 45,323
2,200 Whole Foods Market, Inc.* 130,328
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 1,641,964
=========================================================================================================================
Energy (5.9%)
- -------------------------------------------------------------------------------------------------------------------------
2,200 Cooper Cameron Corporation * 94,204
5,770 ENSCO International, Inc. 152,040
2,600 FMC Technologies, Inc.* 52,208
2,100 Forest Oil Corporation * 49,245
4,720 Grant Prideco, Inc.* 53,525
2,890 Hanover Compressor Company * 30,634
2,020 Helmerich & Payne, Inc. 53,550
3,460 Murphy Oil Corporation 204,071
3,300 National-Oilwell, Inc.* 62,931
2,170 Noble Energy, Inc. 86,192
1,390 Overseas Shipholding Group, Inc. 37,891
3,100 Patterson-UTI Energy, Inc.* 88,629
4,450 Pioneer Natural Resources Company * 117,702
2,500 Pogo Producing Company 104,525
5,200 Pride International, Inc.* 85,176
3,760 Smith International, Inc.* 139,985
2,410 Tidewater, Inc. 66,058
4,370 Valero Energy Corporation 186,599
3,780 Varco International, Inc.* 66,490
5,020 Weatherford International, Ltd.* 174,445
1,300 Western Gas Resources, Inc. 55,250
7,000 XTO Energy, Inc. 165,690
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 2,127,040
=========================================================================================================================
Financials (19.6%)
- -------------------------------------------------------------------------------------------------------------------------
3,060 A.G. Edwards, Inc. 123,930
2,060 Allmerica Financial Corporation * 54,858
3,200 AMB Property Corporation 95,968
2,700 American Financial Group, Inc. 60,129
6,000 AmeriCredit Corporation * 80,400
1,600 AmerUs Group Company 60,400
3,500 Arthur J. Gallagher & Company 102,165
2,919 Associated Banc-Corp 120,146
3,180 Astoria Financial Corporation 110,155
2,270 Bank of Hawaii Corporation 89,438
6,250 Banknorth Group, Inc. 195,750
2,600 Brown & Brown, Inc. 79,170
1,900 City National Corporation 114,399
4,800 Colonial BancGroup, Inc. 75,264
2,800 Commerce Bancorp, Inc. 135,352
4,920 Compass Bancshares, Inc. 185,878
2,000 Cullen/Frost Bankers, Inc. 77,520
13,870 E*TRADE Group, Inc.* 142,861
2,700 Eaton Vance Corporation 94,176
2,090 Everest Re Group, Ltd. 173,366
5,625 Fidelity National Financial, Inc. 173,925
3,000 First American Corporation 85,950
3,250 FirstMerit Corporation 83,785
1,900 GATX Corporation 42,731
2,000 Greater Bay Bancorp 53,920
5,255 GreenPoint Financial Corporation 163,693
2,500 HCC Insurance Holdings, Inc. 72,850
6,060 Hibernia Corporation 136,895
2,100 Highwoods Properties, Inc. 52,080
1,650 Horace Mann Educators Corporation 21,862
2,500 Hospitality Properties Trust 91,675
2,100 Independence Community Bank Corporation 77,175
2,200 IndyMac Bancorp, Inc. 64,680
1,740 Investment Technology Group, Inc.* 34,556
2,500 Investors Financial Services Corporation 88,325
2,300 LaBranche & Company, Inc. 24,357
2,430 Legg Mason, Inc. 202,298
2,300 Leucadia National Corporation 96,600
3,100 Liberty Property Trust 112,778
4,500 M&T Bank Corporation 422,550
2,300 Mack-Cali Realty Corporation 86,687
3,080 Mercantile Bankshares Corporation 130,500
1,900 MONY Group, Inc. 60,819
7,820 National Commerce Financial Corporation 214,815
3,800 New Plan Excel Realty Trust, Inc. 86,260
5,233 New York Community Bancorp, Inc. 189,435
2,410 Ohio Casualty Corporation * 36,873
4,610 Old Republic International Corporation 165,683
3,540 PMI Group, Inc. 135,334
2,650 Protective Life Corporation 86,046
1,910 Provident Financial Group, Inc. 56,250
3,500 Radian Group, Inc. 185,150
3,000 Roslyn Bancorp, Inc. 80,820
4,000 SEI Investments Company 116,480
1,400 Silicon Valley Bancshares * 49,140
11,120 Sovereign Bancorp, Inc. 231,407
1,200 StanCorp Financial Group, Inc. 75,660
2,790 TCF Financial Corporation 145,582
4,700 United Dominion Realty Trust, Inc. 82,015
2,690 Unitrin, Inc. 99,530
3,100 W.R. Berkley Corporation 106,299
3,200 Waddell & Reed Financial, Inc. 70,976
2,700 Washington Federal, Inc. 71,118
1,850 Webster Financial Corporation 82,695
1,310 Westamerica Bancorporation 65,579
2,540 Wilmington Trust Corporation 85,547
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 7,070,710
=========================================================================================================================
Health Care (12.5%)
- -------------------------------------------------------------------------------------------------------------------------
3,500 AdvancePCS, Inc.* 180,145
3,490 Apogent Technologies, Inc.* 76,606
2,140 Apria Healthcare Group, Inc.* 62,060
2,550 Barr Laboratories, Inc. 195,764
2,300 Beckman Coulter, Inc. 114,195
1,700 Charles River Laboratories International, Inc.* 54,808
3,700 Community Health Systems, Inc.* 88,874
2,290 Covance, Inc.* 59,609
2,300 Coventry Health Care, Inc.* 125,925
4,200 Cytyc Corporation* 54,306
2,960 Dentsply International, Inc. 130,802
2,290 Edwards Lifesciences Corporation * 66,410
3,620 First Health Group Corporation* 88,364
7,720 Gilead Sciences, Inc.* 421,358
4,440 Health Net, Inc.* 140,260
1,600 Henry Schein, Inc.* 99,280
2,330 Hillenbrand Industries, Inc. 138,705
3,170 ICN Pharmaceuticals, Inc. 61,213
5,940 IDEC Pharmaceuticals Corporation * 208,672
7,425 IVAX Corporation* 143,006
1,400 LifePoint Hospitals, Inc.* 35,994
3,700 Lincare Holdings, Inc.* 144,078
11,438 Millennium Pharmaceuticals, Inc.* 182,093
10,275 Mylan Laboratories, Inc. 248,141
3,880 Omnicare, Inc. 148,759
3,100 Oxford Health Plans, Inc.* 125,550
1,400 PacifiCare Health Systems, Inc.* 83,300
2,600 Patterson Dental Company * 166,348
2,620 Perrigo Company 35,239
1,300 Pharmaceutical Resources, Inc.* 93,964
3,500 Protein Design Labs, Inc.* 47,180
3,220 Sepracor, Inc.* 85,749
4,500 Sicor, Inc.* 120,600
2,670 STERIS Corporation* 55,589
2,800 Triad Hospitals, Inc.* 86,044
2,200 Universal Health Services, Inc.* 103,510
2,600 Varian Medical Systems, Inc.* 166,244
2,900 Vertex Pharmaceuticals, Inc.* 38,048
1,820 VISX, Inc.* 44,153
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 4,520,945
=========================================================================================================================
Industrials (12.1%)
- -------------------------------------------------------------------------------------------------------------------------
2,810 AGCO Corporation * 50,580
1,120 Alaska Air Group, Inc.* 32,245
1,650 Alexander & Baldwin, Inc. 51,166
3,330 ALLETE, Inc. 100,599
1,370 AMETEK, Inc. 64,458
1,010 Banta Corporation 38,643
2,140 Brink's Company 42,907
3,220 C.H. Robinson Worldwide, Inc. 126,160
3,800 Career Education Corporation 203,490
1,260 Carlisle Companies, Inc. 72,261
3,233 ChoicePoint, Inc.* 113,284
1,910 CNF, Inc. 66,888
3,500 Copart, Inc.* 43,645
1,700 Corinthian Colleges, Inc.* 105,264
2,590 DeVry, Inc.* 62,859
1,690 Donaldson Company, Inc. 96,702
2,800 Dun & Bradstreet Corporation* 130,340
1,800 Dycom Industries, Inc.* 38,898
1,400 Education Management Corporation * 88,452
1,900 EGL, Inc.* 30,989
4,000 Expeditors International of Washington, Inc. 150,160
2,840 Fastenal Company 126,295
1,880 Federal Signal Corporation 27,805
2,220 Flowserve Corporation * 45,421
4,800 Gartner Group, Inc.* 61,200
1,800 Graco, Inc. 68,580
1,645 Granite Construction, Inc. 32,884
1,640 Harsco Corporation 62,828
2,870 Herman Miller, Inc. 65,924
2,310 HON INDUSTRIES, Inc. 94,710
2,330 Hubbell, Inc. 99,817
3,000 J.B. Hunt Transport Services, Inc. 76,140
2,040 Jacobs Engineering Group, Inc.* 94,493
2,400 JetBlue Airways Corporation * 138,432
1,400 Kelly Services, Inc. 34,300
1,460 Kennametal, Inc. 53,845
1,500 Korn/Ferry International * 13,110
3,660 L-3 Communications Holdings, Inc.* 171,068
2,940 Manpower, Inc. 136,416
1,380 Nordson Corporation 38,240
1,910 Pentair, Inc. 78,310
2,020 Precision Castparts Corporation 83,083
4,390 Quanta Services, Inc.* 35,910
6,100 Republic Services, Inc. 141,825
1,775 Rollins, Inc. 36,068
490 Sequa Corporation * 23,373
2,400 Sotheby's Holdings, Inc.* 25,560
2,940 SPX Corporation * 141,473
1,600 Stericycle, Inc.* 73,888
3,130 Swift Transportation Company, Inc.* 70,206
1,600 Sylvan Learning Systems, Inc.* 45,280
760 Tecumseh Products Company 31,145
1,620 Teleflex, Inc. 74,536
1,830 Trinity Industries, Inc. 46,574
2,900 United Rentals, Inc.* 50,518
1,960 Valassis Communications, Inc.* 50,764
3,390 Viad Corporation 84,682
3,100 Werner Enterprises, Inc. 55,924
1,620 York International Corporation 64,379
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 4,364,996
=========================================================================================================================
Information Technology (16.1%)
- -------------------------------------------------------------------------------------------------------------------------
14,100 3Com Corporation * 101,520
3,300 Activision, Inc. 49,797
3,230 Acxiom Corporation * 51,357
1,430 ADTRAN, Inc. 97,283
3,200 Advanced Fibre Communications, Inc.* 77,024
1,300 Advent Software, Inc.* 23,803
5,040 Affiliated Computer Services, Inc.* 246,607
3,820 Arrow Electronics, Inc.* 81,557
2,195 Ascential Software Corporation * 48,707
17,960 Atmel Corporation* 101,294
4,540 Avnet, Inc.* 88,076
1,760 Avocent Corporation * 66,528
4,600 BISYS Group, Inc.* 65,780
915 Cabot Microelectonics Corporation * 52,155
10,380 Cadence Design Systems, Inc.* 159,748
3,140 CDW Corporation 188,557
5,600 Ceridian Corporation * 117,600
2,500 Certegy, Inc. 84,150
2,990 CheckFree Corporation * 82,315
2,330 CommScope, Inc.* 36,092
2,400 Credence Systems Corporation * 39,144
2,800 Cree, Inc.* 49,728
2,040 CSG Systems International, Inc.* 23,440
4,510 Cypress Semiconductor Corporation* 96,785
2,700 Diebold, Inc. 154,062
4,360 DST Systems, Inc.* 164,895
1,800 Fair Isaac Corporation 114,804
4,500 Fairchild Semiconductor International, Inc.* 101,700
2,490 Harris Corporation 92,678
1,400 Imation Corporation 47,670
2,600 Integrated Circuit Systems, Inc.* 87,282
3,990 Integrated Device Technology, Inc.* 62,643
2,400 International Rectifier Corporation * 114,552
1,900 Internet Security Systems, Inc.* 31,179
5,300 Intersil Corporation 136,687
3,300 Jack Henry & Associates, Inc. 65,934
2,500 Keane, Inc.* 32,850
3,400 KEMET Corporation * 45,050
4,800 Lam Research Corporation * 137,952
4,400 Lattice Semiconductor Corporation * 34,320
1,900 LTX Corporation * 27,151
2,320 Macromedia, Inc.* 44,335
1,800 Macrovision Corporation * 39,546
4,300 McDATA Corporation * 44,419
2,640 Mentor Graphics Corporation * 44,220
3,510 Micrel, Inc.* 57,915
7,835 Microchip Technology, Inc. 256,283
3,820 MPS Group, Inc.* 36,481
1,900 National Instruments Corporation 80,902
6,080 Network Associates, Inc.* 84,694
1,500 Newport Corporation * 23,640
1,700 Plantronics, Inc.* 47,277
1,700 Plexus Corporation * 29,393
3,700 Polycom, Inc.* 74,111
2,520 Powerwave Technologies, Inc.* 16,405
6,860 Quantum Corporation * 21,335
2,100 Retek, Inc.* 21,063
2,650 Reynolds & Reynolds Company 71,974
7,000 RF Micro Devices, Inc.* 81,970
2,300 RSA Security, Inc.* 29,831
2,900 SanDisk Corporation * 233,740
2,760 Semtech Corporation * 61,272
1,900 Silicon Laboratories, Inc.* 102,562
4,150 Storage Technology Corporation * 100,015
3,560 Sybase, Inc.* 63,724
5,880 Synopsys, Inc. 186,514
2,140 Tech Data Corporation * 70,449
3,030 Titan Corporation* 63,994
1,380 Transaction Systems Architects, Inc.* 27,600
5,079 TriQuint Semiconductor, Inc.* 36,416
1,400 Varian, Inc.* 50,134
6,070 Vishay Intertechnology, Inc.* 113,812
3,200 Wind River Systems, Inc.* 21,440
1,800 Zebra Technologies Corporation 102,510
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 5,820,432
=========================================================================================================================
Materials (4.1%)
- -------------------------------------------------------------------------------------------------------------------------
2,890 Airgas, Inc. 55,344
1,590 Albemarle Corporation 42,644
2,100 Arch Coal, Inc. 51,450
2,140 Bowater, Inc. 87,376
2,370 Cabot Corporation 66,123
890 Carpenter Technology Corporation 23,006
4,270 Crompton Corporation 22,887
1,550 Cytec Industries, Inc.* 54,110
1,590 Ferro Corporation 32,643
1,400 FMC Corporation * 39,214
1,760 Glatfelter Company 22,440
4,370 IMC Global, Inc. 30,546
2,040 Longview Fibre Company 21,930
2,060 Lubrizol Corporation 62,418
6,600 Lyondell Chemical Company 94,380
1,900 Martin Marietta Materials, Inc. 77,843
870 Minerals Technologies, Inc. 47,676
2,280 Olin Corporation 39,695
4,100 Packaging Corporation of America * 80,770
2,100 Peabody Energy Corporation 69,993
1,200 Potlatch Corporation 37,512
1,645 Rayonier, Inc. 69,172
4,490 RPM International, Inc. 64,880
1,200 Scotts Company* 69,300
3,740 Sonoco Products Company 79,550
1,960 Valspar Corporation 93,492
2,040 Wausau-Mosinee Paper Corporation 25,214
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 1,461,608
=========================================================================================================================
Utilities (6.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,460 AGL Resources, Inc. 69,249
4,270 Alliant Energy Corporation 102,736
7,490 Aquila, Inc. 29,586
1,280 Black Hills Corporation 41,178
4,920 DPL, Inc. 89,642
2,970 Duquesne Light Holdings, Inc. 47,728
5,650 Energy East Corporation 126,842
2,400 Equitable Resources, Inc. 98,880
2,730 Great Plains Energy, Inc. 87,032
1,470 Hawaiian Electric Industries, Inc. 67,282
1,520 IDACORP, Inc. 41,268
4,350 MDU Resources Group, Inc. 98,440
3,160 National Fuel Gas Company 70,626
5,160 Northeast Utilities Service Company 97,214
2,070 NSTAR 96,669
3,360 OGE Energy Corporation 76,642
2,900 ONEOK, Inc. 57,681
6,555 Pepco Holdings, Inc. 115,368
2,700 Philadelphia Suburban Corporation 63,774
1,640 PNM Resources, Inc. 46,379
3,620 Puget Energy, Inc. 82,283
3,280 Questar Corporation 104,140
4,290 SCANA Corporation 147,104
4,470 Sierra Pacific Resources * 26,686
2,920 Vectren Corporation 68,912
2,800 Westar Energy, Inc. 55,944
1,890 WGL Holdings, Inc. 52,258
4,520 Wisconsin Energy Corporation 148,030
1,300 WPS Resources Corporation 57,629
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 2,267,202
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $30,372,926) 35,392,834
=========================================================================================================================
Shares Short-Term Investments (1.8%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
662,990 The AAL Money Market Fund (c) 0.528% N/A $662,990
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 662,990
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $31,035,916) $36,055,824
=========================================================================================================================
* 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 October 31, 2003, $28,800 in cash was pledged as
the initial margin deposit and $662,990 of the AAL
Money Market Fund was pledged as collateral to cover
open financial futures contracts written as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- -------------------------------------------------------------------------------------------------------------------------
S&P 400 Mini Futures 12 December 2003 Long $658,140 $645,124 $13,016
The accompanying notes to the financial statements
are an integral part of this schedule.
The AAL International Fund
Schedule of Investments as of October 31, 2003(a) (unaudited)
Shares Common Stock (97.3%) Value
- -------------------------------------------------------------------------------------------------------------------------
346,355 BHP Billiton, Ltd.(b) $2,852,581
1 BHP Steel, Ltd.(b) 4
- -------------------------------------------------------------------------------------------------------------------------
Total Australia 2,852,585
=========================================================================================================================
Brazil (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
19,944 Banco Itau Holding
Financeira SA ADR 814,712
- -------------------------------------------------------------------------------------------------------------------------
Total Brazil 814,712
=========================================================================================================================
France (10.2%)
- -------------------------------------------------------------------------------------------------------------------------
61,569 Accor SA(b) 2,418,748
45,761 Carrefour SA(b) 2,405,644
89,535 France Telecom SA(b) 2,162,340
21,724 L'Oreal SA 1,606,192
28,069 Pinault-Printemps-Redoute SA(b) 2,859,821
21,984 Total SA(b) 3,424,426
35,171 Valeo SA(b) 1,312,481
- -------------------------------------------------------------------------------------------------------------------------
Total France 16,189,652
=========================================================================================================================
Germany (8.9%)
- -------------------------------------------------------------------------------------------------------------------------
17,557 Adidas-Salomon AG 1,626,706
31,109 Allianz AG 3,335,122
17,600 Bayerische Motoren Werke AG 704,859
14,067 Deutsche Boerse AG(b) 784,964
64,217 Siemens AG(b) 4,335,506
67,987 Volkswagen AG(b) 3,440,694
- -------------------------------------------------------------------------------------------------------------------------
Total Germany 14,227,851
=========================================================================================================================
Hong Kong (3.6%)
- -------------------------------------------------------------------------------------------------------------------------
307,000 Hutchison Whampoa, Ltd.(b) 2,391,075
256,000 Sun Hung Kai Properties, Ltd.(b) 2,176,460
180,000 Swire Pacific, Ltd.(b) 1,103,661
- -------------------------------------------------------------------------------------------------------------------------
Total Hong Kong 5,671,196
=========================================================================================================================
Italy (7.2%)
- -------------------------------------------------------------------------------------------------------------------------
958,223 Banca Intesa SPA(b) 3,228,572
220,900 Eni SPA 3,507,898
193,832 Fiat SPA(b) 1,523,571
324,912 Mediaset SPA(b) 3,288,856
- -------------------------------------------------------------------------------------------------------------------------
Total Italy 11,548,897
=========================================================================================================================
Japan (19.5%)
- -------------------------------------------------------------------------------------------------------------------------
180,000 Bridgestone Corporation(b) 2,368,803
32,000 Canon, Inc.(b) 1,563,503
110,700 Denso Corporation(b) 2,100,669
56,400 Honda Motor Company(b) 2,250,481
59,000 Ito-Yokado Company, Ltd.(b) 2,176,115
294,000 Matsushita Electric Industrial Company, Ltd.(b) 3,860,912
153,000 Mitsubishi Estate Company, Ltd.(b) 1,471,205
309 Mitsubishi Tokyo Financial Group, Inc.(b) 2,247,626
4,300 Murata Manufacturing Company, Ltd.(b) 245,315
400,800 Nissan Motor Company, Ltd.(b) 4,517,060
615 NTT DoCoMo, Inc.(b) 1,336,420
21,900 ORIX Corporation(b) 1,860,742
15,690 Rohm Company, Ltd.(b) 2,121,897
41,200 Shin-Etsu Chemical Company, Ltd.(b) 1,537,695
19,500 Tokyo Electron, Ltd.(b) 1,406,185
- -------------------------------------------------------------------------------------------------------------------------
Total Japan 31,064,628
=========================================================================================================================
Malaysia (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
149,000 Malayan Banking Berhad(b) 400,002
146,100 Resorts World Berhad(b) 423,821
- -------------------------------------------------------------------------------------------------------------------------
Total Malaysia 823,823
=========================================================================================================================
Mexico (2.3%)
- -------------------------------------------------------------------------------------------------------------------------
89,596 Cemex SA de CV ADR 2,150,304
19,947 Grupo Televisa SA 772,946
248,679 Wal-Mart de Mexico SA de CV 693,460
- -------------------------------------------------------------------------------------------------------------------------
Total Mexico 3,616,710
=========================================================================================================================
Netherlands (4.6%)
- -------------------------------------------------------------------------------------------------------------------------
34,886 Heineken NV 1,245,060
255,755 Koninklijke (Royal) KPN NV(b) * 1,940,283
136,360 VNU NV 4,153,257
- -------------------------------------------------------------------------------------------------------------------------
Total Netherlands 7,338,600
=========================================================================================================================
Singapore (2.6%)
- -------------------------------------------------------------------------------------------------------------------------
201,000 DBS Group Holdings, Ltd.(b) 1,654,529
319,000 United Overseas Bank, Ltd.(b) 2,490,322
- -------------------------------------------------------------------------------------------------------------------------
Total Singapore 4,144,851
=========================================================================================================================
South Korea (5.1%)
- -------------------------------------------------------------------------------------------------------------------------
41,020 Daewoo Shipbuilding & Marine Engineering Company(b) * 552,088
37,710 Hyundai Motor Company, Ltd.(b) 1,262,204
39,746 Kookmin Bank ADR 1,460,666
8,350 Samsung Electronics Company, Ltd.(b) 3,328,651
4,590 Shinsegae Company, Ltd. 921,103
34,498 SK Telecom Company, Ltd. ADR 676,161
- -------------------------------------------------------------------------------------------------------------------------
Total South Korea 8,200,873
=========================================================================================================================
Spain (3.1%)
- -------------------------------------------------------------------------------------------------------------------------
16,902 Acerinox SA(b) 737,041
1 Antena 3 Television * 12
131,830 Banco Bilbao Vizcaya Argentaria SA(b) 1,515,294
215,310 Telefonica SA(b) 2,684,642
- -------------------------------------------------------------------------------------------------------------------------
Total Spain 4,936,989
=========================================================================================================================
Sweden (1.5%)
- -------------------------------------------------------------------------------------------------------------------------
26,105 Autoliv, Inc.(b) 859,663
57,037 Volvo AB(b) 1,592,008
- -------------------------------------------------------------------------------------------------------------------------
Total Sweden 2,451,671
=========================================================================================================================
Switzerland (3.9%)
- -------------------------------------------------------------------------------------------------------------------------
34,907 Adecco SA(b) 2,055,799
74,638 Compagnie Financiere Richemont AG(b) 1,683,737
69,391 Credit Suisse Group(b) 2,446,726
- -------------------------------------------------------------------------------------------------------------------------
Total Switzerland 6,186,262
=========================================================================================================================
Taiwan (2.6%)
- -------------------------------------------------------------------------------------------------------------------------
96,705 Cathay Financial Holding Company, Ltd.* 1,593,960
126,261 First Financial Management Corporation * 1,694,625
72,869 Taiwan Semiconductor Manufacturing Company, Ltd. ADR * 805,931
- -------------------------------------------------------------------------------------------------------------------------
Total Taiwan 4,094,516
=========================================================================================================================
Thailand (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
220,500 Bangkok Bank Public Company, Ltd.* 516,775
376,000 Kasikornbank Public Company, Ltd.(b) * 419,290
- -------------------------------------------------------------------------------------------------------------------------
Total Thailand 936,065
=========================================================================================================================
United Kingdom (18.8%)
- -------------------------------------------------------------------------------------------------------------------------
70,077 AstraZeneca plc(b) 3,308,947
183,506 BAA plc 1,451,108
545,373 BAE SYSTEMS plc(b) 1,700,531
83,705 HBOS plc(b) 974,418
314,991 HSBC Holdings plc(b) 4,730,264
143,868 Imperial Tobacco Group plc 2,385,186
123,327 InterContinental Hotels Group plc 1,119,109
596,734 Kingfisher plc(b) 2,866,004
85,341 Next plc(b) 1,710,440
507,757 Northumbrian Water Limited, Ltd. * 884,719
333,759 Reed Elsevier plc(b) 2,593,613
223,398 Rentokil Initial plc(b) 846,547
201,185 Smith & Nephew plc(b) * 1,598,624
1,837,743 Vodafone Group plc(b) 3,863,221
- -------------------------------------------------------------------------------------------------------------------------
Total United Kingdom 30,032,731
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $146,036,936) 155,132,612
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (2.7%) Interest Rate(c) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$4,200,000 Federal National Mortgage Association 0.950% 11/3/2003 $4,199,778
98,996 SSgA Money Market Fund 0.710 N/A 98,996
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 4,298,774
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $150,335,710) $159,431,386
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of
total investments.
(b) Security is fair valued as discussed in the notes to
the financial statements.
(c) The interest rate shown reflects the 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 Capital Growth Fund
Schedule of Investments as of October 31, 2003 (a) (unaudited)
Shares Common Stock (91.8%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (2.3%)
- -------------------------------------------------------------------------------------------------------------------------
316,700 AT&T Wireless Services, Inc.* 2,296,075
266,600 CenturyTel, Inc. 9,530,950
430,400 Nextel Communications, Inc.* 10,415,680
895,839 SBC Communications, Inc. 21,482,219
501,900 Sprint Corporation (PCS Group) * 2,183,265
691,000 Verizon Communications, Inc. 23,217,600
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 69,125,789
=========================================================================================================================
Consumer Discretionary (17.4%)
- -------------------------------------------------------------------------------------------------------------------------
209,600 Clear Channel Communications, Inc. 8,555,872
3,096,700 Comcast Corporation* 101,014,354
3,100,300 Cox Communications, Inc.* 105,627,221
334,500 Family Dollar Stores, Inc. 14,587,545
339,500 Gannett Company, Inc. 28,555,345
1,385,200 Harley-Davidson, Inc. 65,672,332
798,500 Home Depot, Inc. 29,600,395
3,496,032 Liberty Media Corporation* 35,274,963
284,300 New York Times Company 13,512,779
241,240 Starwood Hotels & Resorts Worldwide, Inc. 8,137,025
1,866,963 Tiffany & Company 88,587,394
274,700 Tribune Company 13,474,035
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 512,599,260
=========================================================================================================================
Consumer Staples (11.4%)
- -------------------------------------------------------------------------------------------------------------------------
399,500 Alberto-Culver Company 25,328,300
1,716,800 Altria Group, Inc. 79,831,200
46,650 Corn Products International, Inc. 1,580,968
232,321 Dean Foods Company 7,027,710
641,400 General Mills, Inc. 28,766,790
1,514,500 Wal-Mart Stores, Inc. 89,279,775
3,006,800 Walgreen Company 104,696,776
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 336,511,519
=========================================================================================================================
Energy (7.0%)
- -------------------------------------------------------------------------------------------------------------------------
131,578 Apache Corporation 9,173,618
353,700 Baker Hughes, Inc. 9,995,562
146,700 BJ Services Company * 4,813,227
166,900 Burlington Resources, Inc. 8,118,016
55,100 ChevronTexaco Corporation 4,093,930
144,600 ConocoPhillips Company 8,263,890
244,500 ENSCO International, Inc. 6,442,575
1,305,000 EOG Resources, Inc. 54,992,700
1,901,500 Exxon Mobil Corporation 69,556,870
152,900 Nabors Industries, Ltd.* 5,779,620
192,600 Noble Corporation * 6,611,958
216,600 Rowan Companies, Inc.* 5,187,570
226,100 Schlumberger, Ltd. 10,619,917
120,900 Smith International, Inc.* 4,501,107
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 208,150,560
=========================================================================================================================
Financials (19.5%)
- -------------------------------------------------------------------------------------------------------------------------
781,400 AFLAC, Inc. 28,505,472
1,240,200 American Express Company 58,202,586
2,000,552 American International Group, Inc. 121,693,578
624,900 Bank of America Corporation 47,323,677
1,466,948 Citigroup, Inc. 69,533,335
705,000 Federal National Mortgage Corporation 50,541,450
1,492,740 J.P. Morgan Chase & Company 53,589,366
90,500 Marsh & McLennan Companies, Inc. 3,868,875
1,482,239 MBNA Corporation 36,685,415
745,300 Morgan Stanley and Company 40,894,611
990,300 National City Corporation 32,343,198
194,600 Northern Trust Corporation 9,039,170
398,600 State Street Corporation 20,870,696
63,454 Travelers Property Casualty Company, Class A 1,034,300
130,100 Travelers Property Casualty Company, Class B 2,129,737
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 576,255,466
=========================================================================================================================
Health Care (12.4%)
- -------------------------------------------------------------------------------------------------------------------------
211,200 AmerisourceBergen Corporation 11,989,824
361,400 Amgen, Inc.* 22,320,064
56,900 Cardinal Health, Inc. 3,376,446
1,313,100 Johnson & Johnson 66,088,323
187,689 Medco Health Solutions, Inc.* 6,231,275
434,300 Medtronic, Inc. 19,791,051
1,556,300 Merck & Company, Inc. 68,866,275
3,482,400 Pfizer, Inc. 110,043,842
645,800 WellPoint Health Networks, Inc.* 57,411,620
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 366,118,720
=========================================================================================================================
Industrials (6.2%)
- -------------------------------------------------------------------------------------------------------------------------
89,300 CNF, Inc. 3,127,286
390,600 Dover Corporation 15,241,212
3,500,800 General Electric Company 101,558,208
635,700 Herman Miller, Inc. 14,602,029
151,900 PACCAR, Inc. 11,994,024
418,200 United Technologies Corporation 35,417,358
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 181,940,117
=========================================================================================================================
Information Technology (15.2%)
- -------------------------------------------------------------------------------------------------------------------------
527,900 Applied Materials, Inc.* 12,337,023
213,900 Arrow Electronics, Inc.* 4,566,765
2,320,800 Cisco Systems, Inc.* 48,690,384
233,500 Computer Sciences Corporation * 9,251,270
866,900 Dell, Inc.* 31,312,428
703,000 EMC Corporation * 9,729,520
1,299,032 First Data Corporation 46,375,442
298,380 Global Payments, Inc. 12,427,527
630,200 Hewlett-Packard Company 14,059,762
2,154,200 Intel Corporation 71,196,310
614,300 International Business Machines Corporation 54,967,564
3,590,900 Microsoft Corporation 93,902,035
1,829,500 Oracle Corporation* 21,880,820
581,800 Texas Instruments, Inc. 16,825,656
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 447,522,506
=========================================================================================================================
Utilities (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
241,200 Entergy Corporation 13,000,680
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 13,000,680
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $1,703,572,802) 2,711,224,617
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (7.5%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$20,000,000 Amsterdam Funding Corporation 1.050% 11/10/2003 $19,994,750
15,000,000 Barton Capital Corporation 1.040 11/13/2003 14,994,800
19,000,000 CXC, LLC 1.050 12/8/2003 18,979,496
18,750,000 Falcon Asset Securitization Corporation 1.050 12/9/2003 18,729,219
5,000,000 Federal Home Loan Bank 1.030 12/3/2003 4,995,422
5,501,000 Federal Home Loan Mortgage Corporation 1.030 11/4/2003 5,500,528
3,938,000 Federal Home Loan Mortgage Corporation Zero Coupon 11/12/2003 3,936,761
22,000,000 Federal National Mortgage Association(c) 1.010 11/17/2003 21,997,954
4,900,000 Federal National Mortgage Association 1.083 12/3/2003 4,895,514
10,000,000 Old Line Funding Corporation 1.040 11/20/2003 9,994,511
16,500,000 Preferred Receivables Funding Corporation 1.050 12/8/2003 16,482,194
7,356,000 River Fuel Trust No. 2 1.070 11/6/2003 7,354,907
20,000,000 Sheffield Receivables Corporation 1.050 12/5/2003 19,980,167
12,700,000 Swiss Reinsurance Company 1.060 11/24/2003 12,691,399
12,538,511 The AAL Money Market Fund 0.528 11/1/2003 12,538,511
18,017,000 Triple A-1 Funding 1.050 11/7/2003 18,013,847
20,000,000 Tulip Funding Corporation 1.060 11/3/2003 19,998,822
11,993,000 Tulip Funding Corporation 1.060 12/1/2003 11,982,406
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (cost $243,057,676) 243,061,208
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $1,946,630,478) $2,954,285,825
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of
total investments.
(b) The interest rate shown reflects the yield, or for
securities purchased at a discount, the discount rate
at the date of purchase.
(c) 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 Large Company Index Fund
Schedule of Investments as of October 31, 2003(a) (unaudited)
Shares Common Stock (97.6%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (3.3%)
- -------------------------------------------------------------------------------------------------------------------------
757 ALLTEL Corporation $35,783
1,887 AT&T Corporation 35,079
6,760 AT&T Wireless Services, Inc.* 49,010
4,554 BellSouth Corporation 119,816
404 CenturyTel, Inc. 14,443
807 Citizens Communications Company * 10,047
2,578 Nextel Communications, Inc.* 62,388
4,136 Qwest Communications International, Inc.* 14,600
8,298 SBC Communications, Inc. 198,986
2,224 Sprint Corporation (FON Group) 35,584
2,527 Sprint Corporation (PCS Group) * 10,992
6,874 Verizon Communications, Inc. 230,966
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 817,694
Consumer Discretionary (11.2%)
- -------------------------------------------------------------------------------------------------------------------------
201 American Greetings Corporation * 4,287
608 Autonation, Inc.* 11,370
252 AutoZone, Inc.* 24,217
757 Bed Bath & Beyond, Inc.* 31,976
761 Best Buy Company, Inc.* 44,374
302 Big Lots, Inc.* 4,533
201 Black & Decker Corporation 9,610
302 Brunswick Corporation 8,960
1,565 Carnival Corporation 54,634
151 Centex Corporation 14,722
554 Circuit City Stores, Inc.(Circuit City Group) 5,285
1,515 Clear Channel Communications, Inc. 61,842
5,616 Comcast Corporation* 190,495
251 Cooper Tire & Rubber Company 4,935
304 Dana Corporation 4,949
380 Darden Restaurants, Inc. 7,961
1,315 Delphi Corporation 11,704
301 Dillard's, Inc. 4,867
771 Dollar General Corporation 17,324
300 Dow Jones & Company, Inc. 15,591
658 Eastman Kodak Company 16,075
1,616 eBay, Inc. 90,399
405 Family Dollar Stores, Inc. 17,662
503 Federated Department Stores, Inc. 23,918
4,554 Ford Motor Company 55,240
354 Fortune Brands, Inc. 23,063
704 Gannett Company, Inc. 59,213
2,174 Gap, Inc. 41,480
1,365 General Motors Corporation 58,245
554 Genuine Parts Company 17,628
503 Goodyear Tire & Rubber Company 3,451
708 Harley-Davidson, Inc. 33,566
302 Harrah's Entertainment, Inc. 13,137
504 Hasbro, Inc. 10,987
861 Hilton Hotels Corporation 13,638
5,667 Home Depot, Inc. 210,076
808 International Game Technology 26,462
960 Interpublic Group of Companies, Inc. 14,285
556 J.C. Penney Company, Inc. 13,149
252 Johnson Controls, Inc. 27,098
254 Jones Apparel Group, Inc. 8,763
100 KB Home 6,849
301 Knight Ridder, Inc. 22,069
858 Kohl's Corporation* 48,108
504 Leggett & Platt, Inc. 10,529
1,264 Limited Brands, Inc. 22,246
303 Liz Claiborne, Inc. 11,178
1,874 Lowe's Companies, Inc. 110,435
555 Marriott International, Inc. 23,976
1,062 Mattel, Inc. 20,560
656 May Department Stores Company 18,342
250 Maytag Corporation 6,350
3,085 McDonald's Corporation 77,156
504 McGraw-Hill Companies, Inc. 33,743
200 Meredith Corporation 9,704
354 New York Times Company 16,826
656 Newell Rubbermaid, Inc. 14,957
657 NIKE, Inc. 41,982
352 Nordstrom, Inc. 10,732
707 Office Depot, Inc.* 10,556
503 Omnicom Group, Inc. 40,139
151 Pulte Homes, Inc. 13,063
403 RadioShack Corporation 12,086
200 Reebok International, Ltd. 7,790
658 Sears, Roebuck and Company 34,631
453 Sherwin-Williams Company 15,194
200 Snap-On, Inc. 5,868
301 Stanley Works 10,035
1,212 Staples, Inc.* 32,506
910 Starbucks Corporation * 28,756
506 Starwood Hotels & Resorts Worldwide, Inc. 17,067
2,228 Target Corporation 88,541
404 Tiffany & Company 19,170
11,186 Time Warner, Inc.* 171,034
1,216 TJX Companies, Inc. 25,524
454 Toys 'R' Us, Inc.* 5,902
806 Tribune Company 39,534
201 Tupperware Corporation 3,025
806 Univision Communications, Inc.* 27,364
302 VF Corporation 12,820
4,323 Viacom, Inc. 172,358
329 Visteon Corporation 2,125
5,011 Walt Disney Company 113,449
402 Wendy's International, Inc. 14,894
151 Whirlpool Corporation 10,641
659 Yum! Brands, Inc.* 22,498
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 2,773,483
=========================================================================================================================
Consumer Staples (11.1%)
- -------------------------------------------------------------------------------------------------------------------------
250 Adolph Coors Company 14,012
301 Alberto-Culver Company 19,083
859 Albertson's, Inc. 17,429
5,009 Altria Group, Inc. 232,918
2,025 Anheuser-Busch Companies, Inc. 99,752
1,538 Archer Daniels Midland Company 22,070
556 Avon Products, Inc. 37,786
250 Brown-Foreman Corporation 21,095
960 Campbell Soup Company 24,883
505 Clorox Company 22,876
6,123 Coca-Cola Company 284,107
1,111 Coca-Cola Enterprises, Inc. 22,398
1,365 Colgate-Palmolive Company 72,604
1,312 ConAgra Foods, Inc. 31,278
1,061 Costco Wholesale Corporation * 37,528
910 CVS Corporation 32,014
960 General Mills, Inc. 43,056
2,480 Gillette Company 79,112
859 H.J. Heinz Company 30,348
302 Hershey Foods Corporation 23,284
960 Kellogg Company 31,805
1,264 Kimberly-Clark Corporation 66,752
1,872 Kroger Company* 32,741
404 McCormick & Company, Inc. 11,975
608 Pepsi Bottling Group, Inc. 13,552
4,297 PepsiCo, Inc. 205,483
3,237 Procter & Gamble Company 318,165
202 R.J. Reynolds Tobacco Holdings, Inc. 9,702
1,061 Safeway, Inc.* 22,387
1,922 Sara Lee Corporation 38,305
352 SUPERVALU, Inc. 8,877
1,568 SYSCO Corporation 52,779
403 UST, Inc. 13,710
10,882 Wal-Mart Stores, Inc. 641,494
2,529 Walgreen Company 88,060
605 William Wrigley Jr. Company 34,122
403 Winn-Dixie Stores, Inc. 3,260
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 2,760,802
=========================================================================================================================
Energy (5.3%)
- -------------------------------------------------------------------------------------------------------------------------
251 Amerada Hess Corporation 12,957
620 Anadarko Petroleum Corporation 27,044
373 Apache Corporation 26,006
251 Ashland, Inc. 9,347
808 Baker Hughes, Inc. 22,834
455 BJ Services Company * 14,929
455 Burlington Resources, Inc. 22,131
2,586 ChevronTexaco Corporation 192,140
1,662 ConocoPhillips Company 94,983
556 Devon Energy Corporation 26,966
303 EOG Resources, Inc. 12,768
16,505 Exxon Mobil Corporation 603,753
1,062 Halliburton Company 25,361
251 Kerr-McGee Corporation 10,416
707 Marathon Oil Corporation 20,906
453 Nabors Industries, Ltd.* 17,123
404 Noble Corporation * 13,869
961 Occidental Petroleum Corporation 33,885
301 Rowan Companies, Inc.* 7,209
1,415 Schlumberger, Ltd. 66,463
301 Sunoco, Inc. 13,172
757 Transocean, Inc.* 14,527
656 Unocal Corporation 20,782
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,309,571
=========================================================================================================================
Financials (20.4%)
- -------------------------------------------------------------------------------------------------------------------------
657 ACE, Ltd. 23,652
1,263 AFLAC, Inc. 46,074
1,670 Allstate Corporation 65,965
303 Ambac Financial Group, Inc. 21,434
3,188 American Express Company 149,613
6,427 American International Group, Inc. 390,954
959 AmSouth Bancorporation 22,652
707 Aon Corporation 15,483
353 Apartment Investment & Management Company 14,438
3,694 Bank of America Corporation 279,747
1,872 Bank of New York Company, Inc. 58,388
2,734 Bank One Corporation 116,058
1,312 BB&T Corporation 50,735
252 Bear Stearns Companies, Inc. 19,215
605 Capital One Financial Corporation 36,784
3,287 Charles Schwab Corporation 44,572
614 Charter One Financial, Inc. 19,623
453 Chubb Corporation 30,265
504 Cincinnati Financial Corporation 20,624
12,860 Citigroup, Inc. 609,564
553 Comerica, Inc. 28,468
352 Countrywide Financial Corporation 37,002
912 Equity Office Properties Trust 25,545
758 Equity Residential REIT 22,172
1,719 Federal Home Loan Mortgage Corporation 96,487
2,428 Federal National Mortgage Corporation 174,063
303 Federated Investors, Inc. 8,378
1,407 Fifth Third Bancorp 81,550
454 First Tennessee National Corporation 20,593
2,534 FleetBoston Financial Corporation 102,348
655 Franklin Resources, Inc. 31,060
353 Golden West Financial Corporation 35,452
1,213 Goldman Sachs Group, Inc. 113,901
656 Hartford Financial Services Group, Inc. 36,014
626 Huntington Bancshares, Inc. 13,559
5,074 J.P. Morgan Chase & Company 182,157
606 Janus Capital Group, Inc. 8,569
430 Jefferson-Pilot Corporation 20,528
658 John Hancock Financial Services, Inc. 23,260
1,110 KeyCorp 31,358
605 Lehman Brothers Holdings, Inc. 43,560
553 Lincoln National Corporation 22,081
454 Loews Corporation 19,522
1,266 Marsh & McLennan Companies, Inc. 54,122
606 Marshall & Ilsley Corporation 21,707
329 MBIA, Inc. 19,612
3,115 MBNA Corporation 77,096
1,061 Mellon Financial Corporation 31,692
2,278 Merrill Lynch & Company, Inc. 134,858
1,870 MetLife, Inc. 58,718
251 MGIC Investment Corporation 12,879
353 Moody's Corporation 20,414
2,631 Morgan Stanley and Company 144,363
1,516 National City Corporation 49,513
505 North Fork Bancorporation, Inc. 19,685
504 Northern Trust Corporation 23,411
556 Plum Creek Timber Company, Inc. 14,651
655 PNC Financial Services Group, Inc. 35,088
760 Principal Financial Group, Inc. 23,826
506 Progressive Corporation 37,343
500 ProLogis Trust 14,770
706 Providian Financial Corporation * 7,844
1,367 Prudential Financial, Inc. 52,821
604 Regions Financial Corporation 22,197
302 SAFECO Corporation 11,083
555 Simon Property Group, Inc. 25,019
1,062 SLM Corporation 41,588
860 SouthTrust Corporation 27,391
505 St. Paul Companies, Inc. 19,256
808 State Street Corporation 42,307
656 SunTrust Banks, Inc. 43,998
808 Synovus Financial Corporation 22,301
451 T. Rowe Price Group, Inc. 18,559
352 Torchmark Corporation 15,446
2,450 Travelers Property Casualty Company, Class B 40,106
4,769 U.S. Bancorp 129,812
531 Union Planters Corporation 17,666
657 UNUMProvident Corporation 10,755
3,237 Wachovia Corporation 148,481
2,278 Washington Mutual, Inc. 99,662
4,148 Wells Fargo & Company 233,615
404 XL Capital, Ltd. 28,078
352 Zions Bancorporation 21,574
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 5,086,774
=========================================================================================================================
Health Care (12.8%)
- -------------------------------------------------------------------------------------------------------------------------
3,896 Abbott Laboratories 166,048
353 Aetna, Inc. 20,266
303 Allergan, Inc. 22,913
302 AmerisourceBergen Corporation 17,145
3,207 Amgen, Inc.* 198,064
405 Anthem, Inc.* 27,714
554 Applied Biosystems Group 12,786
201 Bausch & Lomb, Inc. 9,680
1,469 Baxter International, Inc. 39,046
606 Becton, Dickinson and Company 22,155
353 Biogen, Inc.* 14,286
644 Biomet, Inc. 23,094
1,011 Boston Scientific Corporation * 68,465
4,756 Bristol-Myers Squibb Company 120,660
201 C.R. Bard, Inc. 16,090
1,137 Cardinal Health, Inc. 67,470
504 Chiron Corporation* 27,534
304 CIGNA Corporation 17,343
2,783 Eli Lilly and Company 185,403
200 Express Scripts, Inc.* 10,984
912 Forest Laboratories, Inc. 45,609
506 Genzyme Corporation * 23,225
806 Guidant Corporation 41,114
1,163 HCA, Inc. 44,485
557 Health Management Associates, Inc. 12,338
354 Humana, Inc.* 7,183
554 IMS Health, Inc. 13,036
7,335 Johnson & Johnson 369,171
573 King Pharmaceuticals, Inc.* 7,678
151 Manor Care, Inc. 5,025
656 McKesson Corporation 19,857
641 Medco Health Solutions, Inc.* 21,281
607 MedImmune, Inc.* 16,183
3,034 Medtronic, Inc. 138,259
5,517 Merck & Company, Inc. 244,127
250 Millipore Corporation* 10,962
19,381 Pfizer, Inc. 612,440
303 Quest Diagnostics, Inc.* 20,498
3,643 Schering-Plough Corporation 55,629
456 St. Jude Medical, Inc.* 26,521
554 Stryker Corporation 44,935
1,090 Tenet Healthcare Corporation * 15,042
1,416 UnitedHealth Group, Inc. 72,046
301 Watson Pharmaceuticals, Inc.* 11,820
355 WellPoint Health Networks, Inc.* 31,560
3,239 Wyeth Corporation 142,969
539 Zimmer Holdings, Inc.* 34,394
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 3,174,533
=========================================================================================================================
Industrials (10.5%)
- -------------------------------------------------------------------------------------------------------------------------
1,924 3M Company 151,746
454 Allied Waste Industries, Inc.* 5,121
505 American Power Conversion Corporation 10,216
252 American Standard Companies, Inc.* 24,116
455 Apollo Group, Inc.* 28,906
302 Avery Dennison Corporation 15,879
2,074 Boeing Company 79,828
858 Burlington Northern Santa Fe Corporation 24,831
859 Caterpillar, Inc. 62,948
2,529 Cendant Corporation * 51,667
405 Cintas Corporation 17,277
252 Cooper Industries, Ltd. 13,331
200 Crane Company 5,620
554 CSX Corporation 17,628
150 Cummins, Inc. 7,110
352 Danaher Corporation 29,163
555 Deere & Company 33,644
402 Delta Air Lines, Inc. 5,234
201 Deluxe Corporation 8,114
454 Dover Corporation 17,715
252 Eaton Corporation 25,260
1,061 Emerson Electric Company 60,212
403 Equifax, Inc. 9,849
707 FedEx Corporation 53,562
302 Fluor Corporation 11,198
554 General Dynamics Corporation 46,370
24,950 General Electric Company 723,802
301 Goodrich Corporation 8,314
455 H&R Block, Inc. 21,426
2,124 Honeywell International, Inc. 65,016
807 Illinois Tool Works, Inc. 59,355
404 Ingersoll-Rand Company 24,402
252 ITT Industries, Inc. 17,133
1,062 Lockheed Martin Corporation 49,234
1,161 Masco Corporation 31,928
301 Monster Worldwide, Inc.* 7,666
150 Navistar International Corporation * 6,064
910 Norfolk Southern Corporation 18,336
473 Northrop Grumman Corporation 42,286
329 PACCAR, Inc. 25,978
351 Pall Corporation 8,213
352 Parker-Hannifin Corporation 17,941
655 Pitney Bowes, Inc. 26,920
251 Power-One, Inc.* 2,274
301 R.R. Donnelley & Sons Company 7,826
959 Raytheon Company 25,394
405 Robert Half International, Inc.* 9,562
454 Rockwell Automation, Inc. 14,097
454 Rockwell Collins, Inc. 12,462
200 Ryder System, Inc. 6,000
1,895 Southwest Airlines Company 36,763
302 Textron, Inc. 15,006
200 Thomas & Betts Corporation * 3,560
4,961 Tyco International, Ltd. 103,586
656 Union Pacific Corporation 41,066
2,784 United Parcel Service, Inc. 201,896
1,211 United Technologies Corporation 102,560
352 W.W. Grainger, Inc. 16,115
1,464 Waste Management, Inc. 37,947
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 2,606,673
=========================================================================================================================
Information Technology (17.4%)
- -------------------------------------------------------------------------------------------------------------------------
2,072 ADC Telecommunications, Inc.* 5,284
555 Adobe Systems, Inc. 24,331
807 Advanced Micro Devices, Inc.* 12,266
1,151 Agilent Technologies, Inc.* 28,683
859 Altera Corporation* 17,378
910 Analog Devices, Inc.* 40,340
451 Andrew Corporation* 5,899
810 Apple Computer, Inc.* 18,541
4,102 Applied Materials, Inc.* 95,864
858 Applied Micro Circuits Corporation * 4,994
302 Autodesk, Inc. 5,814
1,465 Automatic Data Processing, Inc. 55,289
1,018 Avaya, Inc.* 13,173
507 BMC Software, Inc.* 8,812
655 Broadcom Corporation* 20,927
1,160 CIENA Corporation* 7,436
17,514 Cisco Systems, Inc.* 367,444
403 Citrix Systems, Inc.* 10,188
1,365 Computer Associates International, Inc. 32,105
504 Computer Sciences Corporation * 19,968
959 Compuware Corporation * 5,390
454 Comverse Technology, Inc.* 8,190
1,213 Concord EFS, Inc.* 12,967
404 Convergys Corporation* 6,488
3,233 Corning, Inc.* 35,498
6,376 Dell, Inc.* 230,301
354 Electronic Arts, Inc.* 35,060
1,112 Electronic Data Systems Corporation 23,852
5,415 EMC Corporation * 74,944
1,823 First Data Corporation 65,081
480 Fiserv, Inc.* 16,954
857 Gateway, Inc.* 4,319
7,607 Hewlett-Packard Company 169,712
16,249 Intel Corporation 537,029
4,248 International Business Machines Corporation 380,111
555 Intuit, Inc.* 27,739
505 Jabil Circuit, Inc.* 14,064
3,541 JDS Uniphase Corporation * 12,571
504 KLA-Tencor Corporation * 28,894
351 Lexmark International, Inc.* 25,837
757 Linear Technology Corporation 32,256
908 LSI Logic Corporation * 8,390
10,316 Lucent Technologies, Inc.* 33,011
759 Maxim Integrated Products, Inc. 37,730
201 Mercury Interactive Corporation * 9,334
1,466 Micron Technology, Inc.* 21,022
26,925 Microsoft Corporation 704,089
467 Molex, Inc. 14,659
5,751 Motorola, Inc. 77,811
454 National Semiconductor Corporation * 18,446
351 NCR Corporation * 12,615
808 Network Appliance, Inc.* 19,941
1,009 Novell, Inc.* 5,923
353 Novellus Systems, Inc.* 14,575
355 NVIDIA Corporation * 6,276
13,057 Oracle Corporation * 156,162
806 Parametric Technology Corporation * 2,507
885 Paychex, Inc. 34,444
907 PeopleSoft, Inc.* 18,829
352 PerkinElmer, Inc. 6,340
504 PMC-Sierra, Inc.* 9,158
251 QLogic Corporation * 14,069
1,971 QUALCOMM, Inc. 93,622
389 Sabre Holdings Corporation 8,523
1,213 Sanmina-SCI Corporation * 12,797
353 Scientific-Atlanta, Inc. 10,449
1,162 Siebel Systems, Inc.* 14,630
2,072 Solectron Corporation 11,479
7,996 Sun Microsystems, Inc.* 31,664
708 SunGard Data Systems, Inc.* 19,859
355 Symantec Corporation* 23,661
630 Symbol Technologies, Inc. 7,869
301 Tektronix, Inc. 7,727
960 Tellabs, Inc.* 7,229
454 Teradyne, Inc.* 10,342
4,298 Texas Instruments, Inc. 124,298
354 Thermo Electron Corporation * 7,781
757 Unisys Corporation* 11,628
1,060 VERITAS Software Corporation * 38,319
254 Waters Corporation * 7,983
1,971 Xerox Corporation* 20,696
806 Xilinx, Inc.* 25,550
1,564 Yahoo!, Inc.* 68,347
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 4,331,777
=========================================================================================================================
Materials (2.8%)
- -------------------------------------------------------------------------------------------------------------------------
556 Air Products and Chemicals, Inc. 25,248
2,086 Alcoa, Inc. 65,855
251 Allegheny Technologies, Inc. 1,920
201 Ball Corporation 11,296
201 Bemis Company, Inc. 9,294
201 Boise Cascade Corporation 5,638
2,218 Dow Chemical Company 83,596
2,429 E.I. du Pont de Nemours and Company 98,132
301 Eastman Chemical Company 9,770
604 Ecolab, Inc. 16,242
352 Engelhard Corporation 10,060
403 Freeport-McMoRan Copper & Gold, Inc. 15,616
608 Georgia-Pacific Corporation 15,978
151 Great Lakes Chemical Corporation 3,246
352 Hercules, Inc.* 3,678
351 International Flavors and Fragrances, Inc. 11,618
1,119 International Paper Company 44,033
351 Louisiana-Pacific Corporation * 6,676
596 Meadwestvaco Corporation 15,448
623 Monsanto Company 15,606
960 Newmont Mining Corporation 42,029
201 Nucor Corporation 11,021
454 Pactiv Corporation * 10,011
201 Phelps Dodge Corporation * 12,410
404 PPG Industries, Inc. 23,291
404 Praxair, Inc. 28,110
506 Rohm and Haas Company 19,886
201 Sealed Air Corporation * 10,699
151 Sigma-Aldrich Corporation 7,920
201 Temple-Inland, Inc. 10,860
251 United States Steel Corporation 5,936
351 Vulcan Materials Company 15,553
505 Weyerhaeuser Company 30,416
301 Worthington Industries, Inc. 4,389
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 701,481
=========================================================================================================================
Utilities (2.8%)
- -------------------------------------------------------------------------------------------------------------------------
1,464 AES Corporation * 12,810
352 Allegheny Energy, Inc. 3,724
503 Ameren Corporation 22,459
929 American Electric Power Company, Inc. 26,189
859 Calpine Corporation * 3,960
806 CenterPoint Energy, Inc. 7,907
503 CINergy Corporation 18,264
402 CMS Energy Corporation 3,264
657 Consolidated Edison, Inc. 26,589
503 Constellation Energy Group, Inc. 18,294
829 Dominion Resources, Inc. 51,066
503 DTE Energy Company 18,551
2,224 Duke Energy Corporation 40,366
909 Dynegy, Inc. 3,645
758 Edison International, Inc.* 14,940
1,475 El Paso Corporation 10,826
606 Entergy Corporation 32,663
782 Exelon Corporation 49,618
758 FirstEnergy Corporation 26,068
453 FPL Group, Inc. 28,874
454 KeySpan Corporation 15,876
353 Kinder Morgan, Inc. 18,903
250 Nicor, Inc. 8,568
675 NiSource, Inc. 13,979
960 Pacific Gas & Electric Company * 23,472
150 Peoples Energy Corporation 6,068
301 Pinnacle West Capital Corporation 11,005
503 PPL Corporation 20,080
582 Progress Energy, Inc. 25,084
606 Public Service Enterprise Group, Inc. 24,767
559 Sempra Energy 15,540
1,770 Southern Company 52,746
504 TECO Energy, Inc. 6,618
757 TXU Corporation 17,275
1,263 Williams Companies, Inc. 12,883
1,014 Xcel Energy, Inc. 16,630
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 709,571
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $25,814,442) 24,272,359
- -------------------------------------------------------------------------------------------------------------------------
Shares Short-Term Investments (2.4%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
585,963 The AAL Money Market Fund(c) 0.528% N/A $585,963
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 585,963
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $26,400,405) $24,858,322
- -------------------------------------------------------------------------------------------------------------------------
* 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 October 31, 2003, $37,722 in cash was pledged as
the initial margin deposit and $585,963 of the AAL
Money Market Fund was pledged as collateral to cover
open financial futures contracts written as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- -------------------------------------------------------------------------------------------------------------------------
S&P 500 Mini Futures 12 December 2003 Long $629,700 $623,243 $6,457
- -------------------------------------------------------------------------------------------------------------------------
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 October 31, 2003(a)
Shares Common Stock (97.5%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (3.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,200 ALLTEL Corporation $56,724
3,260 AT&T Corporation 60,603
11,145 AT&T Wireless Services, Inc.* 80,801
7,600 BellSouth Corporation 199,956
700 CenturyTel, Inc. 25,025
1,300 Citizens Communications Company * 16,185
4,200 Nextel Communications, Inc.* 101,640
7,000 Qwest Communications International, Inc.* 24,710
13,700 SBC Communications, Inc. 328,526
3,700 Sprint Corporation (FON Group) 59,200
4,200 Sprint Corporation (PCS Group) * 18,270
11,400 Verizon Communications, Inc. 383,040
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 1,354,680
=========================================================================================================================
Consumer Discretionary (11.2%)
- -------------------------------------------------------------------------------------------------------------------------
400 American Greetings Corporation * 8,532
1,100 Autonation, Inc.* 20,570
400 AutoZone, Inc.* 38,440
1,200 Bed Bath & Beyond, Inc.* 50,688
1,250 Best Buy Company, Inc.* 72,888
600 Big Lots, Inc.* 9,006
400 Black & Decker Corporation 19,124
500 Brunswick Corporation 14,835
2,600 Carnival Corporation 90,766
300 Centex Corporation 29,250
900 Circuit City Stores, Inc. (Circuit City Group) 8,586
2,500 Clear Channel Communications, Inc. 102,050
9,287 Comcast Corporation* 315,015
400 Cooper Tire & Rubber Company 7,864
600 Dana Corporation 9,768
700 Darden Restaurants, Inc. 14,665
2,300 Delphi Corporation 20,470
400 Dillard's, Inc. 6,468
1,300 Dollar General Corporation 29,211
500 Dow Jones & Company, Inc. 25,985
1,100 Eastman Kodak Company 26,873
2,600 eBay, Inc. 145,444
800 Family Dollar Stores, Inc. 34,888
700 Federated Department Stores, Inc. 33,285
7,500 Ford Motor Company 90,975
600 Fortune Brands, Inc. 39,090
1,100 Gannett Company, Inc. 92,521
3,600 Gap, Inc. 68,688
2,300 General Motors Corporation 98,141
900 Genuine Parts Company 28,638
800 Goodyear Tire & Rubber Company 5,488
1,200 Harley-Davidson, Inc. 56,892
600 Harrah's Entertainment, Inc. 26,100
800 Hasbro, Inc. 17,440
1,500 Hilton Hotels Corporation 23,760
9,500 Home Depot, Inc. 352,165
1,400 International Game Technology 45,850
1,600 Interpublic Group of Companies, Inc. 23,808
1,100 J.C. Penney Company, Inc. 26,015
400 Johnson Controls, Inc. 43,012
500 Jones Apparel Group, Inc. 17,250
200 KB Home 13,698
500 Knight Ridder, Inc. 36,660
1,400 Kohl's Corporation * 78,498
900 Leggett & Platt, Inc. 18,801
2,100 Limited Brands, Inc. 36,960
500 Liz Claiborne, Inc. 18,445
3,200 Lowe's Companies, Inc. 188,576
900 Marriott International, Inc. 38,880
1,800 Mattel, Inc. 34,848
1,100 May Department Stores Company 30,756
500 Maytag Corporation 12,700
5,200 McDonald's Corporation 130,052
700 McGraw-Hill Companies, Inc. 46,865
400 Meredith Corporation 19,408
800 New York Times Company 38,024
1,100 Newell Rubbermaid, Inc. 25,080
1,000 NIKE, Inc. 63,900
600 Nordstrom, Inc. 18,294
1,200 Office Depot, Inc.* 17,916
800 Omnicom Group, Inc. 63,840
300 Pulte Homes, Inc. 25,953
600 RadioShack Corporation 17,994
400 Reebok International, Ltd. 15,580
1,100 Sears, Roebuck and Company 57,893
700 Sherwin-Williams Company 23,478
400 Snap-On, Inc. 11,736
500 Stanley Works 16,670
2,000 Staples, Inc.* 53,640
1,600 Starbucks Corporation * 50,560
800 Starwood Hotels & Resorts Worldwide, Inc. 26,984
3,700 Target Corporation 147,038
600 Tiffany & Company 28,470
18,650 Time Warner, Inc.* 285,158
2,100 TJX Companies, Inc. 44,079
800 Toys 'R' Us, Inc.* 10,400
1,200 Tribune Company 58,860
400 Tupperware Corporation 6,020
1,300 Univision Communications, Inc.* 44,135
500 VF Corporation 21,225
7,200 Viacom, Inc. 287,064
700 Visteon Corporation 4,522
8,400 Walt Disney Company 190,176
600 Wendy's International, Inc. 22,230
300 Whirlpool Corporation 21,141
1,200 Yum! Brands, Inc.* 40,968
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 4,634,679
=========================================================================================================================
Consumer Staples (11.0%)
- -------------------------------------------------------------------------------------------------------------------------
200 Adolph Coors Company 11,210
400 Alberto-Culver Company 25,360
1,500 Albertson's, Inc. 30,435
8,300 Altria Group, Inc. 385,950
3,400 Anheuser-Busch Companies, Inc. 167,484
2,596 Archer Daniels Midland Company 37,253
900 Avon Products, Inc. 61,164
300 Brown-Foreman Corporation 25,314
1,600 Campbell Soup Company 41,472
800 Clorox Company 36,240
10,100 Coca-Cola Company 468,640
1,800 Coca-Cola Enterprises, Inc. 36,288
2,200 Colgate-Palmolive Company 117,018
2,200 ConAgra Foods, Inc. 52,448
1,800 Costco Wholesale Corporation * 63,666
1,600 CVS Corporation 56,288
1,500 General Mills, Inc. 67,275
4,200 Gillette Company 133,980
1,400 H.J. Heinz Company 49,462
600 Hershey Foods Corporation 46,260
1,600 Kellogg Company 53,008
2,000 Kimberly-Clark Corporation 105,620
3,100 Kroger Company* 54,219
700 McCormick & Company, Inc. 20,748
1,100 Pepsi Bottling Group, Inc. 24,519
7,090 PepsiCo, Inc. 339,044
5,300 Procter & Gamble Company 520,937
300 R.J. Reynolds Tobacco Holdings, Inc. 14,409
1,800 Safeway, Inc.* $37,980
3,200 Sara Lee Corporation 63,776
700 SUPERVALU, Inc. 17,654
2,600 SYSCO Corporation 87,516
700 UST, Inc. 23,814
18,000 Wal-Mart Stores, Inc. 1,061,100
4,200 Walgreen Company 146,244
1,000 William Wrigley Jr. Company 56,400
700 Winn-Dixie Stores, Inc. 5,663
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 4,545,858
=========================================================================================================================
Energy (5.3%)
- -------------------------------------------------------------------------------------------------------------------------
400 Amerada Hess Corporation 20,648
945 Anadarko Petroleum Corporation 41,221
661 Apache Corporation 46,085
300 Ashland, Inc. 11,172
1,400 Baker Hughes, Inc. 39,564
800 BJ Services Company * 26,248
800 Burlington Resources, Inc. 38,912
4,378 ChevronTexaco Corporation 325,285
2,748 ConocoPhillips Company 157,048
900 Devon Energy Corporation 43,650
400 EOG Resources, Inc. 16,856
27,400 Exxon Mobil Corporation 1,002,292
1,800 Halliburton Company 42,984
400 Kerr-McGee Corporation 16,600
1,200 Marathon Oil Corporation 35,484
700 Nabors Industries, Ltd.* 26,460
700 Noble Corporation* 24,031
1,500 Occidental Petroleum Corporation 52,890
500 Rowan Companies, Inc.* 11,975
2,400 Schlumberger, Ltd. 112,728
500 Sunoco, Inc. 21,880
1,300 Transocean, Inc.* 24,947
1,000 Unocal Corporation 31,680
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 2,170,640
=========================================================================================================================
Financials (20.5%)
- -------------------------------------------------------------------------------------------------------------------------
1,100 ACE, Ltd. 39,600
2,100 AFLAC, Inc. 76,608
2,900 Allstate Corporation 114,550
450 Ambac Financial Group, Inc. 31,833
5,300 American Express Company 248,729
10,744 American International Group, Inc. 653,558
1,600 AmSouth Bancorporation 37,792
1,200 Aon Corporation 26,280
400 Apartment Investment & Management Company 16,360
6,100 Bank of America Corporation 461,953
3,100 Bank of New York Company, Inc. 96,689
4,600 Bank One Corporation 195,270
2,200 BB&T Corporation 85,074
400 Bear Stearns Companies, Inc. 30,500
900 Capital One Financial Corporation 54,720
5,600 Charles Schwab Corporation 75,936
1,076 Charter One Financial, Inc. 34,389
700 Chubb Corporation 46,767
800 Cincinnati Financial Corporation 32,736
21,306 Citigroup, Inc. 1,009,904
900 Comerica, Inc. 46,332
500 Countrywide Financial Corporation 52,560
1,600 Equity Office Properties Trust 44,816
1,200 Equity Residential REIT 35,100
2,800 Federal Home Loan Mortgage Corporation 157,164
4,000 Federal NationalMortgage Corporation 286,760
600 Federated Investors, Inc. 16,590
2,322 Fifth Third Bancorp 134,583
700 First Tennessee National Corporation 31,752
4,308 FleetBoston Financial Corporation 174,000
1,100 Franklin Resources, Inc. 52,162
600 Golden West Financial Corporation 60,258
1,900 Goldman Sachs Group, Inc. 178,410
1,100 Hartford Financial Services Group, Inc. 60,390
1,110 Huntington Bancshares, Inc. 24,043
8,410 J.P. Morgan Chase & Company 301,919
1,100 Janus Capital Group, Inc. 15,554
750 Jefferson-Pilot Corporation 35,805
1,100 John Hancock Financial Services, Inc. 38,885
1,700 KeyCorp 48,025
1,000 Lehman Brothers Holdings, Inc. 72,000
900 Lincoln National Corporation 35,937
700 Loews Corporation 30,100
2,200 Marsh & McLennan Companies, Inc. 94,050
1,100 Marshall & Ilsley Corporation 39,402
600 MBIA, Inc. 35,766
5,200 MBNA Corporation 128,700
1,700 Mellon Financial Corporation 50,779
3,800 Merrill Lynch & Company, Inc. 224,960
3,100 MetLife, Inc. 97,340
400 MGIC Investment Corporation 20,524
600 Moody's Corporation 34,698
4,500 Morgan Stanley and Company 246,915
2,500 National City Corporation 81,650
800 North Fork Bancorporation, Inc. 31,184
1,000 Northern Trust Corporation 46,450
900 Plum Creek Timber Company, Inc. 23,715
1,200 PNC Financial Services Group, Inc. 64,284
1,300 Principal Financial Group, Inc. 40,755
900 Progressive Corporation 66,420
900 ProLogis Trust 26,586
1,200 Providian Financial Corporation * 13,332
2,200 Prudential Financial, Inc. 85,008
1,100 Regions Financial Corporation 40,425
500 SAFECO Corporation 18,350
900 Simon Property Group, Inc. 40,572
1,800 SLM Corporation 70,488
1,500 SouthTrust Corporation 47,775
900 St. Paul Companies, Inc. 34,317
1,300 State Street Corporation 68,068
1,100 SunTrust Banks, Inc. 73,777
1,400 Synovus Financial Corporation 38,640
700 T. Rowe Price Group, Inc. 28,805
600 Torchmark Corporation 26,328
4,124 Travelers Property Casualty Company, Class B 67,510
7,918 U.S. Bancorp 215,528
950 Union Planters Corporation 31,606
1,200 UNUMProvident Corporation 19,644
5,500 Wachovia Corporation 252,285
3,800 Washington Mutual, Inc. 166,250
6,900 Wells Fargo & Company 388,608
600 XL Capital, Ltd. 41,700
400 Zions Bancorporation 24,516
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 8,450,103
=========================================================================================================================
Health Care (12.7%)
- -------------------------------------------------------------------------------------------------------------------------
6,400 Abbott Laboratories 272,768
600 Aetna, Inc. 34,446
500 Allergan, Inc. 37,810
400 AmerisourceBergen Corporation 22,708
5,336 Amgen, Inc.* 329,551
600 Anthem, Inc.* 41,058
1,000 Applied Biosystems Group 23,080
400 Bausch & Lomb, Inc. 19,264
2,500 Baxter International, Inc. 66,450
1,000 Becton, Dickinson and Company 36,560
600 Biogen, Inc.* 24,282
975 Biomet, Inc. 34,964
1,700 Boston Scientific Corporation * 115,124
8,000 Bristol-Myers Squibb Company 202,960
400 C.R. Bard, Inc. 32,020
1,800 Cardinal Health, Inc. 106,812
700 Chiron Corporation* 38,241
500 CIGNA Corporation 28,525
4,600 Eli Lilly and Company 306,452
300 Express Scripts, Inc.* 16,476
1,500 Forest Laboratories, Inc. 75,015
900 Genzyme Corporation* 41,310
1,200 Guidant Corporation 61,212
2,000 HCA, Inc. 76,500
900 Health Management Associates, Inc. 19,935
600 Humana, Inc.* 12,174
900 IMS Health, Inc. 21,177
12,190 Johnson & Johnson 613,523
933 King Pharmaceuticals, Inc.* 12,502
400 Manor Care, Inc. 13,312
1,200 McKesson Corporation 36,324
1,025 Medco Health Solutions, Inc.* 34,030
1,000 MedImmune, Inc.* 26,660
5,000 Medtronic, Inc. 227,850
9,200 Merck & Company, Inc. 407,100
400 Millipore Corporation* 17,540
32,140 Pfizer, Inc. 1,015,624
400 Quest Diagnostics, Inc.* 27,060
6,000 Schering-Plough Corporation 91,620
700 St. Jude Medical, Inc.* 40,712
800 Stryker Corporation 64,888
1,900 Tenet Healthcare Corporation * 26,220
2,400 UnitedHealth Group, Inc. 122,112
400 Watson Pharmaceuticals, Inc.* 15,708
600 WellPoint Health Networks, Inc.* 53,340
5,500 Wyeth Corporation 242,770
840 Zimmer Holdings, Inc.* 53,600
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 5,239,369
=========================================================================================================================
Industrials (10.3%)
- -------------------------------------------------------------------------------------------------------------------------
3,200 3M Company 252,384
800 Allied Waste Industries, Inc.* 9,024
900 American Power Conversion Corporation 18,207
300 American Standard Companies, Inc.* 28,710
700 Apollo Group, Inc.* 44,471
500 Avery Dennison Corporation 26,290
3,400 Boeing Company 130,866
1,500 Burlington Northern Santa Fe Corporation 43,410
1,400 Caterpillar, Inc. 102,592
4,100 Cendant Corporation * 83,763
700 Cintas Corporation 29,862
400 Cooper Industries, Ltd. 21,160
400 Crane Company 11,240
800 CSX Corporation 25,456
200 Cummins, Inc. 9,480
600 Danaher Corporation 49,710
900 Deere & Company 54,558
600 Delta Air Lines, Inc. 7,812
400 Deluxe Corporation 16,148
800 Dover Corporation 31,216
300 Eaton Corporation 30,072
1,700 Emerson Electric Company 96,475
700 Equifax, Inc. 17,108
1,200 FedEx Corporation 90,912
500 Fluor Corporation 18,540
800 General Dynamics Corporation 66,960
41,400 General Electric Company 1,201,014
400 Goodrich Corporation 11,048
700 H&R Block, Inc. 32,963
3,500 Honeywell International, Inc. 107,135
1,200 Illinois Tool Works, Inc. 88,260
700 Ingersoll-Rand Company 42,280
400 ITT Industries, Inc. 27,196
1,800 Lockheed Martin Corporation 83,448
1,900 Masco Corporation 52,250
400 Monster Worldwide, Inc.* 10,188
300 Navistar International Corporation* 12,129
1,600 Norfolk Southern Corporation 32,240
767 Northrop Grumman Corporation 68,570
450 PACCAR, Inc. 35,532
600 Pall Corporation 14,040
500 Parker-Hannifin Corporation 25,485
1,100 Pitney Bowes, Inc. 45,210
500 Power-One, Inc.* 4,530
600 R.R. Donnelley & Sons Company 15,600
1,700 Raytheon Company 45,016
700 Robert Half International, Inc.* 16,527
800 Rockwell Automation, Inc. 24,840
700 Rockwell Collins, Inc. 19,215
400 Ryder System, Inc. 12,000
3,200 Southwest Airlines Company 62,080
500 Textron, Inc. 24,845
400 Thomas & Betts Corporation * 7,120
8,238 Tyco International, Ltd. 172,009
1,000 Union Pacific Corporation 62,600
4,600 United Parcel Service, Inc. 333,592
1,900 United Technologies Corporation 160,911
400 W.W. Grainger, Inc. 18,312
2,400 Waste Management, Inc. 62,208
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 4,246,819
=========================================================================================================================
Information Technology (17.4%)
- -------------------------------------------------------------------------------------------------------------------------
3,500 ADC Telecommunications, Inc.* 8,925
900 Adobe Systems, Inc. 39,456
1,400 Advanced Micro Devices, Inc.* 21,280
1,900 Agilent Technologies, Inc.* 47,348
1,500 Altera Corporation* 30,345
1,500 Analog Devices, Inc.* 66,495
800 Andrew Corporation * 10,464
1,500 Apple Computer, Inc.* 34,335
6,800 Applied Materials, Inc.* 158,916
1,400 Applied Micro Circuits Corporation * 8,148
600 Autodesk, Inc. 11,550
2,400 Automatic Data Processing, Inc. 90,576
1,625 Avaya, Inc.* 21,028
1,000 BMC Software, Inc.* 17,380
1,200 Broadcom Corporation* 38,340
1,900 CIENA Corporation* 12,179
29,000 Cisco Systems, Inc.* 608,420
600 Citrix Systems, Inc.* 15,168
2,300 Computer Associates International, Inc. 54,096
700 Computer Sciences Corporation * 27,734
1,700 Compuware Corporation * 9,554
800 Comverse Technology, Inc.* 14,432
2,000 Concord EFS, Inc.* 21,380
700 Convergys Corporation * 11,242
5,500 Corning, Inc.* 60,390
10,600 Dell, Inc.* 382,872
600 Electronic Arts, Inc.* 59,424
1,900 Electronic Data Systems Corporation 40,755
9,000 EMC Corporation * 124,560
3,000 First Data Corporation 107,100
750 Fiserv, Inc.* 26,490
1,400 Gateway, Inc.* 7,056
12,541 Hewlett-Packard Company 279,790
26,900 Intel Corporation 889,045
7,100 International Business Machines Corporation 635,308
800 Intuit, Inc.* 39,984
800 Jabil Circuit, Inc.* 22,280
5,900 JDS Uniphase Corporation * 20,945
700 KLA-Tencor Corporation * 40,131
500 Lexmark International, Inc.* 36,805
1,200 Linear Technology Corporation 51,132
1,500 LSI Logic Corporation* 13,860
17,200 Lucent Technologies, Inc.* 55,040
1,300 Maxim Integrated Products, Inc. 64,623
400 Mercury Interactive Corporation * 18,576
2,500 Micron Technology, Inc.* 35,850
44,700 Microsoft Corporation 1,168,905
800 Molex, Inc. 25,112
9,600 Motorola, Inc. 129,888
700 National Semiconductor Corporation * 28,441
500 NCR Corporation * 17,970
1,400 Network Appliance, Inc.* 34,552
1,500 Novell, Inc.* 8,805
600 Novellus Systems, Inc.* 24,774
600 NVIDIA Corporation * 10,608
21,600 Oracle Corporation * 258,336
1,200 Parametric Technology Corporation * 3,732
1,500 Paychex, Inc. 58,380
1,500 PeopleSoft, Inc.* 31,140
700 PerkinElmer, Inc. 12,607
800 PMC-Sierra, Inc.* 14,536
400 QLogic Corporation * 22,420
3,200 QUALCOMM, Inc. 152,000
700 Sabre Holdings Corporation 15,337
2,100 Sanmina-SCI Corporation * 22,155
600 Scientific-Atlanta, Inc. 17,760
2,000 Siebel Systems, Inc.* 25,180
3,400 Solectron Corporation * 18,836
13,300 Sun Microsystems, Inc.* 52,668
1,100 SunGard Data Systems, Inc.* 30,855
600 Symantec Corporation * 39,990
1,050 Symbol Technologies, Inc. 13,114
500 Tektronix, Inc. 12,835
1,700 Tellabs, Inc.* 12,801
700 Teradyne, Inc.* 15,946
7,100 Texas Instruments, Inc. 205,332
800 Thermo Electron Corporation * 17,584
1,400 Unisys Corporation * 21,504
1,700 VERITAS Software Corporation * 61,455
500 Waters Corporation * 15,715
3,200 Xerox Corporation * 33,600
1,400 Xilinx, Inc.* 44,380
2,600 Yahoo!, Inc.* 113,620
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 7,183,680
=========================================================================================================================
Materials (2.9%)
- -------------------------------------------------------------------------------------------------------------------------
900 Air Products and Chemicals, Inc. 40,869
3,500 Alcoa, Inc. 110,495
500 Allegheny Technologies, Inc. 3,825
200 Ball Corporation 11,240
400 Bemis Company, Inc. 18,496
400 Boise Cascade Corporation 11,220
3,783 Dow Chemical Company 142,581
4,100 E.I. du Pont de Nemours and Company 165,640
500 Eastman Chemical Company 16,230
1,000 Ecolab, Inc. 26,890
700 Engelhard Corporation 20,006
600 Freeport-McMoRan Copper & Gold, Inc. 23,250
952 Georgia-Pacific Corporation 25,019
400 Great Lakes Chemical Corporation 8,600
600 Hercules, Inc.* 6,270
500 International Flavors and Fragrances, Inc. 16,550
1,900 International Paper Company 74,765
600 Louisiana-Pacific Corporation * 11,412
991 Meadwestvaco Corporation 25,687
984 Monsanto Company 24,649
1,600 Newmont Mining Corporation 70,048
400 Nucor Corporation 21,932
800 Pactiv Corporation * 17,640
400 Phelps Dodge Corporation * 24,696
700 PPG Industries, Inc. 40,355
600 Praxair, Inc. 41,748
900 Rohm and Haas Company 35,370
400 Sealed Air Corporation* 21,292
300 Sigma-Aldrich Corporation 15,735
400 Temple-Inland, Inc. 21,612
500 United States Steel Corporation 11,825
600 Vulcan Materials Company 26,586
900 Weyerhaeuser Company 54,207
500 Worthington Industries, Inc. 7,290
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 1,194,030
=========================================================================================================================
Utilities (2.9%)
- -------------------------------------------------------------------------------------------------------------------------
2,500 AES Corporation * 21,875
600 Allegheny Energy, Inc. 6,348
800 Ameren Corporation 35,720
1,600 American Electric Power Company, Inc. 45,104
1,500 Calpine Corporation * 6,915
1,300 CenterPoint Energy, Inc. 12,753
900 CINergy Corporation 32,679
700 CMS Energy Corporation 5,684
1,000 Consolidated Edison, Inc. 40,470
800 Constellation Energy Group, Inc. 29,096
1,300 Dominion Resources, Inc. 80,080
800 DTE Energy Company 29,504
3,700 Duke Energy Corporation 67,155
1,500 Dynegy, Inc. 6,015
1,300 Edison International, Inc.* 25,623
2,392 El Paso Corporation 17,557
900 Entergy Corporation 48,510
1,275 Exelon Corporation 80,899
1,300 FirstEnergy Corporation 44,707
800 FPL Group, Inc. 50,992
800 KeySpan Corporation 27,976
700 Kinder Morgan, Inc. 37,485
200 Nicor, Inc. 6,854
1,237 NiSource, Inc. 25,618
1,700 Pacific Gas & Electric Company * 41,565
300 Peoples Energy Corporation 12,135
500 Pinnacle West Capital Corporation 18,280
800 PPL Corporation 31,936
1,027 Progress Energy, Inc. 44,264
1,100 Public Service Enterprise Group, Inc. 44,957
1,000 Sempra Energy 27,800
3,000 Southern Company 89,400
900 TECO Energy, Inc. 11,817
1,300 TXU Corporation 29,666
2,100 Williams Companies, Inc. 21,420
1,755 Xcel Energy, Inc. 28,782
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 1,187,641
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $45,251,484) 40,207,499
=========================================================================================================================
Shares Short-Term Investments (2.5%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
1,033,976 The AAL Money Market Fund(c) 0.528% N/A $1,033,976
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 1,033,976
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $46,285,460) $41,241,475
=========================================================================================================================
* 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 October 31, 2003, $57,000 in cash was pledged as
the initial margin deposit and $1,033,976 of the AAL
Money Market Fund was pledged as collateral to cover
open financial futures contracts written as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- -------------------------------------------------------------------------------------------------------------------------
S&P 500 Mini Futures 20 December 2003 Long $1,049,500 $1,040,323 $9,177
- -------------------------------------------------------------------------------------------------------------------------
The accompanying notes to the financial statements
are an integral part of this schedule.
The AAL Equity Income Fund
Schedule of Investments as of October 31, 2003(a) (unaudited)
Shares Common Stock (97.6%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (4.5%)
- -------------------------------------------------------------------------------------------------------------------------
22,400 ALLTEL Corporation $1,058,848
169,400 AT&T Wireless Services, Inc.* 1,228,150
65,100 BellSouth Corporation 1,712,781
23,800 Nextel Communications, Inc.* 575,960
88,347 SBC Communications, Inc. 2,118,561
93,200 Verizon Communications, Inc. 3,131,520
62,500 Vodafone Group plc ADR 1,321,875
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 11,147,695
=========================================================================================================================
Consumer Discretionary (11.7%)
- -------------------------------------------------------------------------------------------------------------------------
17,500 Abercrombie & Fitch Company * 498,750
7,600 AutoZone, Inc.* 730,360
15,900 Best Buy Company, Inc.* 927,129
42,900 Clear Channel Communications, Inc. 1,751,178
36,231 Comcast Corporation* 1,228,956
71,200 Fox Entertainment Group, Inc.* 1,972,240
43,800 Home Depot, Inc. 1,623,666
14,200 Johnson Controls, Inc. 1,526,926
154,000 Liberty Media Corporation * 1,553,860
26,100 Lowe's Companies, Inc. 1,538,073
95,600 McDonald's Corporation 2,390,956
19,100 Sears, Roebuck and Company 1,005,233
62,200 Staples, Inc.* 1,668,204
67,200 Target Corporation 2,670,528
45,300 Time Warner, Inc.* 692,637
31,500 Toyota Motor Corporation ADR 1,827,630
25,600 Tribune Company 1,255,680
66,900 Viacom, Inc. 2,667,303
61,000 Walt Disney Company 1,381,040
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 28,910,349
=========================================================================================================================
Consumer Staples (5.6%)
- -------------------------------------------------------------------------------------------------------------------------
59,400 Altria Group, Inc. 2,762,100
90,700 CVS Corporation 3,190,826
37,900 General Mills, Inc. 1,699,815
22,600 Kimberly-Clark Corporation 1,193,506
45,500 Kraft Foods, Inc. 1,324,050
51,200 Kroger Company* 895,488
20,900 Procter & Gamble Company 2,054,261
28,400 SUPERVALU, Inc. 716,248
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 13,836,294
=========================================================================================================================
Energy (9.9%)
- -------------------------------------------------------------------------------------------------------------------------
22,565 Apache Corporation 1,573,232
45,500 Baker Hughes, Inc. 1,285,830
42,100 BP plc 1,784,198
40,947 ChevronTexaco Corporation 3,042,362
80,945 ConocoPhillips Company 4,626,007
44,800 EOG Resources, Inc. 1,887,872
187,900 Exxon Mobil Corporation 6,873,382
39,600 Noble Corporation* 1,359,468
51,800 Valero Energy Corporation 2,211,860
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 24,644,211
=========================================================================================================================
Financials (30.1%)
- -------------------------------------------------------------------------------------------------------------------------
34,100 ACE, Ltd. 1,227,600
60,200 Allstate Corporation 2,377,900
49,800 American Express Company 2,337,114
58,800 American International Group, Inc. 3,576,804
80,200 Bank of America Corporation 6,073,546
48,600 Bank One Corporation 2,063,070
214,333 Citigroup, Inc. 10,159,384
23,300 Countrywide Financial Corporation 2,449,296
23,800 Equity Office Properties Trust 666,638
38,700 Federal Home Loan Mortgage Corporation 2,172,231
48,600 Federal National Mortgage Corporation 3,484,134
14,200 Goldman Sachs Group, Inc. 1,333,380
40,700 Hartford Financial Services Group, Inc. 2,234,430
113,500 J.P. Morgan Chase & Company 4,074,650
20,500 Lehman Brothers Holdings, Inc. 1,476,000
47,500 MBNA Corporation 1,175,625
41,700 Merrill Lynch & Company, Inc. 2,468,640
75,800 MetLife, Inc. 2,380,120
40,300 Morgan Stanley and Company 2,211,261
25,000 National City Corporation 816,500
35,900 Prudential Financial, Inc. 1,387,176
17,100 Simon Property Group, Inc. 770,868
42,400 SouthTrust Corporation 1,350,440
31,800 St. Paul Companies, Inc. 1,212,534
68,200 Travelers Property Casualty Company, Class B 1,116,434
123,300 U.S. Bancorp 3,356,226
64,600 Wachovia Corporation 2,963,202
32,500 Washington Mutual, Inc. 1,421,875
87,400 Wells Fargo & Company 4,922,368
21,900 XL Capital, Ltd. 1,522,050
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 74,781,496
=========================================================================================================================
Health Care (5.9%)
- -------------------------------------------------------------------------------------------------------------------------
17,300 Aetna, Inc. 993,193
18,800 Anthem, Inc.* 1,286,484
9,000 CIGNA Corporation 513,450
96,700 IVAX Corporation * 1,862,442
20,600 Johnson & Johnson 1,036,798
79,800 McKesson Corporation 2,415,546
3,642 Medco Health Solutions, Inc.* 120,914
30,200 Merck & Company, Inc. 1,336,350
93,400 Pfizer, Inc. 2,951,440
45,200 Wyeth Corporation 1,995,128
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 14,511,745
=========================================================================================================================
Industrials (10.6%)
- -------------------------------------------------------------------------------------------------------------------------
16,900 Boeing Company 650,481
44,400 Burlington Northern Santa Fe Corporation 1,284,936
34,300 Caterpillar, Inc. 2,513,504
72,200 Cendant Corporation* 1,475,046
19,400 Dover Corporation 756,988
8,500 Emerson Electric Company 482,375
21,300 FedEx Corporation 1,613,688
8,200 General Dynamics Corporation 686,340
47,100 General Electric Company 1,366,371
49,850 Honeywell International, Inc. 1,525,908
8,800 Illinois Tool Works, Inc. 647,240
23,500 Lockheed Martin Corporation 1,089,460
55,600 Masco Corporation 1,529,000
12,300 Northrop Grumman Corporation 1,099,620
34,500 Pitney Bowes, Inc. 1,417,950
18,600 Raytheon Company 492,528
52,200 Republic Services, Inc. 1,213,650
87,100 Tyco International, Ltd. 1,818,648
26,800 Union Pacific Corporation 1,677,680
35,100 United Technologies Corporation 2,972,619
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 26,314,032
=========================================================================================================================
Information Technology (9.8%)
- -------------------------------------------------------------------------------------------------------------------------
71,900 Applied Materials, Inc.* 1,680,303
63,300 Cisco Systems, Inc.* 1,328,034
40,000 Computer Associates International, Inc. 940,800
17,100 Computer Sciences Corporation * 677,502
47,000 First Data Corporation 1,677,900
22,600 Fiserv, Inc.* 798,232
48,200 Harris Corporation 1,794,004
178,500 Hewlett-Packard Company 3,982,335
66,400 Intel Corporation 2,194,520
21,600 International Business Machines Corporation 1,932,768
67,900 Microsoft Corporation 1,775,585
134,400 Motorola, Inc. 1,818,432
29,800 Nokia Corporation ADR 506,302
63,000 Oracle Corporation * 753,480
22,900 Storage Technology Corporation * 551,890
69,900 Texas Instruments, Inc. 2,021,508
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 24,433,595
=========================================================================================================================
Materials (5.9%)
- -------------------------------------------------------------------------------------------------------------------------
73,100 Alcoa, Inc. 2,307,767
29,400 BASF AG 1,352,400
43,300 E.I. du Pont de Nemours and Company 1,749,320
62,000 International Paper Company 2,439,700
19,700 Praxair, Inc. 1,370,726
92,400 United States Steel Corporation 2,185,260
52,000 Weyerhaeuser Company 3,131,960
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 14,537,133
=========================================================================================================================
Utilities (3.6%)
- -------------------------------------------------------------------------------------------------------------------------
41,700 Dominion Resources, Inc. 2,568,720
21,500 Entergy Corporation 1,158,850
32,500 Exelon Corporation 2,062,125
38,800 FirstEnergy Corporation 1,334,332
28,500 FPL Group, Inc. 1,816,590
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 8,940,617
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $221,369,408) 242,057,167
=========================================================================================================================
Principal
Amount Short-Term Investments (2.4%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$5,977,697 The AAL Money Market Fund 0.528% 11/1/2003 $5,977,697
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 5,977,697
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $227,347,105) $248,034,864
=========================================================================================================================
* 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 October 31, 2003 (a) (unaudited)
Shares Common Stock (50.9%) Value
- -------------------------------------------------------------------------------------------------------------------------
Communications Services (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
25,200 AT&T Wireless Services, Inc.* $182,700
21,300 CenturyTel, Inc. 761,475
1,600 Commonwealth Telephone Enterprises, Inc.* 65,216
34,300 Nextel Communications, Inc.* 830,060
71,599 SBC Communications, Inc. 1,716,944
40,100 Sprint Corporation (PCS Group) * 174,435
55,200 Verizon Communications, Inc. 1,854,720
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 5,585,550
=========================================================================================================================
Consumer Discretionary (9.6%)
- -------------------------------------------------------------------------------------------------------------------------
1,500 Aeropostale, Inc.* 46,275
1,400 AnnTaylor Stores Corporation * 50,120
1,100 Applebee's International, Inc. 41,261
1,600 Boyd Gaming Corporation 24,416
16,800 Clear Channel Communications, Inc. 685,776
247,300 Comcast Corporation * 8,066,926
1,800 Cost Plus, Inc.* 82,566
247,600 Cox Communications, Inc.* 8,435,732
1,000 Entercom Communications Corporation * 45,810
1,300 Ethan Allen Interiors, Inc. 47,840
26,700 Family Dollar Stores, Inc. 1,164,387
1,800 Fossil, Inc.* 48,600
27,100 Gannett Company, Inc. 2,279,381
110,700 Harley-Davidson, Inc. 5,248,287
400 Harman International Industries, Inc. 51,280
2,500 Hasbro, Inc. 54,500
2,200 Hearst-Argyle Television, Inc.* 53,262
63,800 Home Depot, Inc. 2,365,066
1,350 Hot Topic, Inc. 38,758
4,000 Interface, Inc.* 22,200
1,200 International Speedway Corporation 51,048
1,000 Leapfrog Enterprises, Inc.* 34,570
1,000 Lee Enterprises, Inc. 42,160
279,100 Liberty Media Corporation * 2,816,119
2,300 Linens 'n Things, Inc.* 67,896
360 M.D.C. Holdings, Inc. 24,235
600 MarineMax, Inc.* 11,472
1,100 Men's Wearhouse, Inc.* 32,406
22,700 New York Times Company 1,078,931
100 NVR, Inc.* 48,940
2,900 Quiksilver, Inc. $49,793
4,500 Radio One, Inc.* 72,135
1,750 RARE Hospitality International, Inc. 43,400
1,200 Red Robin Gourmet Burgers, Inc.* 35,425
1,600 Regis Corporation 60,832
1,000 Ruby Tuesday, Inc. 27,350
300 Ryland Group, Inc. 26,670
1,700 SCP Pool Corporation 59,500
800 Select Comfort Corporation * 25,040
700 Shuffle Master, Inc.* 21,308
19,208 Starwood Hotels & Resorts Worldwide, Inc. 647,886
800 Thor Industries, Inc. 51,296
149,181 Tiffany & Company 7,078,638
600 Toro Company 29,820
3,000 Toys 'R' Us, Inc.* 39,000
21,900 Tribune Company 1,074,195
1,900 West Marine, Inc.* 42,104
500 Winnebago Industries, Inc. 29,150
1,600 Wolverine World Wide, Inc. 32,320
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Discretionary 42,506,082
=========================================================================================================================
Consumer Staples (6.1%)
- -------------------------------------------------------------------------------------------------------------------------
31,900 Alberto-Culver Company(b) 2,022,460
137,200 Altria Group, Inc.(b) 6,379,800
4,300 Casey's General Stores, Inc. 66,650
3,700 Corn Products International, Inc. 125,393
18,514 Dean Foods Company 560,048
51,200 General Mills, Inc. 2,296,320
1,000 Hain Celestial Group, Inc.* 21,100
2,100 NBTY, Inc.* 57,225
600 Performance Food Group Company * 22,350
120,900 Wal-Mart Stores, Inc. 7,127,055
240,000 Walgreen Company 8,356,800
800 WD-40 Company 25,960
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Staples 27,061,161
=========================================================================================================================
Energy (3.8%)
- -------------------------------------------------------------------------------------------------------------------------
10,509 Apache Corporation 732,687
28,300 Baker Hughes, Inc. 799,758
11,700 BJ Services Company * 383,877
13,300 Burlington Resources, Inc. 646,912
1,300 Cabot Oil & Gas Corporation 33,215
2,000 Chesapeake Energy Corporation 23,860
4,400 ChevronTexaco Corporation 326,920
11,500 ConocoPhillips 657,225
2,700 Energy Partners, Ltd.* 32,427
19,500 ENSCO International, Inc. 513,825
104,200 EOG Resources, Inc. 4,390,988
1,800 Evergreen Resources, Inc. 49,356
151,886 Exxon Mobil Corporation 5,555,990
2,500 Key Energy Services, Inc.* 21,825
4,000 Maverick Tube Corporation * 67,560
12,200 Nabors Industries, Ltd.* 461,160
1,300 Newfield Exploration Company * 51,649
15,400 Noble Corporation * 528,682
1,300 Premcor, Inc.* 30,680
17,200 Rowan Companies, Inc.* 411,940
18,000 Schlumberger, Ltd. 845,460
9,700 Smith International, Inc.* 361,131
1,900 St. Mary Land & Exploration Company 49,590
4,000 Superior Energy Services, Inc.* 35,760
800 TETRA Technologies, Inc. 18,088
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 17,030,565
=========================================================================================================================
Financials (10.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,300 Affiliated Managers Group, Inc.* 166,750
62,300 AFLAC, Inc.(b) 2,272,704
500 Alexandria Real Estate Equities, Inc. 25,500
900 AMB Property Corporation 26,991
99,000 American Express Company 4,646,070
159,762 American International Group, Inc. 9,718,322
2,250 Argonaut Group, Inc. 36,112
49,900 Bank of America Corporation(b) 3,778,927
1,469 BOK Financial Corporation * 55,528
117,145 Citigroup, Inc.(b) 5,552,673
1,100 Corus Bankshares, Inc. 64,680
1,500 Cullen/Frost Bankers, Inc. 58,140
700 Developers Diversified Realty Corporation 20,230
800 Eastgroup Properties, Inc. 23,320
56,300 Federal National Mortgage Corporation 4,036,147
1,200 First BanCorp 39,960
2,000 First Midwest Bancorp, Inc. 61,800
1,900 HCC Insurance Holdings, Inc. 55,366
2,400 HRPT Properties Trust 22,464
1,800 Investors Financial Services Corporation 63,594
119,220 J.P. Morgan Chase & Company 4,279,998
1,400 MAF Bancorp, Inc. 58,688
7,200 Marsh & McLennan Companies, Inc. 307,800
2,500 Max Re Capital, Ltd. 46,150
118,350 MBNA Corporation 2,929,162
1,100 Mercantile Bank Corporation 36,949
600 Mills Corporation 24,480
59,500 Morgan Stanley and Company 3,264,765
79,100 National City Corporation 2,583,406
15,600 Northern Trust Corporation 724,620
1,900 Platinum Underwriters Holdings, Ltd. 54,606
700 PrivateBancorp, Inc. 28,350
2,400 Providian Financial Corporation * 26,664
2,800 Raymond James Financial, Inc. 114,212
1,600 RLI Corporation 53,760
400 Russell 2000 Index Fund I Shares 42,212
800 S&P Smallcap 600 Index Fund I Shares 101,920
600 SL Green Realty Corporation 21,690
1,200 Southwest Bancorporation of Texas, Inc. 43,092
31,800 State Street Corporation 1,665,048
1,600 Stewart Information Services Corporation * 49,840
4,943 Travelers Property Casualty Company, Class A 80,571
10,458 Travelers Property Casualty Company, Class B 171,197
1,300 UCBH Holdings, Inc. 46,423
1,600 United Bankshares, Inc. 48,400
1,620 Washington Federal, Inc. 42,671
2,000 Winston Hotels, Inc. 20,100
1,200 Wintrust Financial Corporation 52,008
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 47,644,060
=========================================================================================================================
Health Care (6.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,100 Advanced Medical Optics, Inc.* 42,357
16,800 AmerisourceBergen Corporation 953,736
28,900 Amgen, Inc.(b) * 1,784,864
900 ArthroCare Corporation * 20,115
4,600 Cardinal Health, Inc. 272,964
1,400 Community Health Systems, Inc.* 33,628
1,000 Cooper Companies, Inc. 43,450
600 Coventry Health Care, Inc.* 32,850
2,200 Cytyc Corporation* 28,446
800 Dade Behring Holdings, Inc.* 24,456
2,800 Dendrite International, Inc.* 42,280
6,350 Encore Medical Corporation * 43,434
1,100 IDEXX Laboratories, Inc.* 52,030
104,900 Johnson & Johnson 5,279,617
800 KOS Pharmaceuticals, Inc.* 31,768
2,200 LifePoint Hospitals, Inc.* 56,562
600 Martek Biosciences Corporation * 29,046
3,200 Medarex Incorporation * 22,880
14,978 Medco Health Solutions, Inc.* 497,270
700 Medicis Pharmaceutical Corporation 44,345
34,600 Medtronic, Inc. 1,576,722
124,200 Merck & Company, Inc. 5,495,850
600 Millipore Corporation * 26,310
500 Omnicare, Inc. 19,170
2,900 Perrigo Company 39,005
278,025 Pfizer, Inc. 8,785,590
900 Pharmaceutical Product Development, Inc.* 27,063
2,400 Protein Design Labs, Inc.* 32,352
900 Renal Care Group, Inc.* 33,759
1,000 ResMed, Inc.* 41,770
900 Respironics, Inc.* 37,521
6,100 Savient Pharmaceuticals, Inc.* 36,905
1,800 Sybron Dental Specialties, Inc.* 41,400
1,300 TECHNE Corporation * 45,279
2,700 United Surgical Partners International, Inc.* 81,432
1,800 Ventana Medical Systems, Inc.* 75,312
51,600 WellPoint Health Networks, Inc.* 4,587,240
300 Wilson Greatbatch Technologies, Inc.* 11,310
- -------------------------------------------------------------------------------------------------------------------------
Total Health Care 30,330,088
=========================================================================================================================
Industrials (3.6%)
- -------------------------------------------------------------------------------------------------------------------------
2,000 A.O. Smith Corporation 63,300
2,500 Allied Waste Industries, Inc.* 28,200
600 Briggs & Stratton Corporation 39,006
7,100 CNF, Inc. 248,642
2,800 Consolidated Graphics, Inc.* 77,420
500 Corinthian Colleges, Inc.* 30,960
1,800 Dionex Corporation* 76,572
31,100 Dover Corporation 1,213,522
3,000 Dycom Industries, Inc.* 64,830
1,100 EDO Corporation 24,530
3,100 Exult, Inc.* 24,583
600 Fastenal Company 26,682
1,000 G & K Services, Inc. 33,000
279,500 General Electric Company 8,108,295
600 Genlyte Group, Inc.* 28,296
900 Graco, Inc. 34,290
1,500 Granite Construction, Inc. 29,985
2,500 Heartland Express, Inc. 62,100
50,700 Herman Miller, Inc. 1,164,579
1,500 IDEX Corporation 55,770
700 ITT Educational Services, Inc.* 34,860
1,000 Jacobs Engineering Group, Inc.* 46,320
2,500 KForce, Inc.* 21,825
400 Landstar System, Inc.* 29,216
2,600 Manitowoc Company, Inc. 56,420
2,000 Mercury Computer Systems, Inc.* 43,020
3,000 Mesa Air Group, Inc.* 32,310
2,500 MSC Industrial Direct Company, Inc. 59,125
1,400 Mueller Industries, Inc.* 44,184
12,150 PACCAR, Inc. 959,364
1,200 Pacer International, Inc.* 24,744
1,200 Robbins & Myers, Inc. 25,320
800 Roper Industries, Inc. 39,536
3,800 SkyWest, Inc. 70,262
1,100 Swift Transportation Company, Inc.* 24,673
2,100 Tetra Tech, Inc.* 47,208
1,000 Triumph Group, Inc.* 32,650
1,400 United Defense Industries, Inc.* 45,360
33,400 United Technologies Corporation 2,828,646
1,200 Waste Connections, Inc.* 41,616
1,100 Watson Wyatt & Company Holdings * 26,455
- -------------------------------------------------------------------------------------------------------------------------
Total Industrials 15,967,676
=========================================================================================================================
Information Technology (8.5%)
- -------------------------------------------------------------------------------------------------------------------------
1,900 Actel Corporation * 51,262
2,300 Advanced Digital Information Corporation * 37,375
1,800 Advanced Fibre Communications, Inc.* 43,326
3,800 Akamai Technologies, Inc.* 30,020
42,200 Applied Materials, Inc.(b) * 986,214
17,100 Arrow Electronics, Inc.* 365,085
2,600 Artesyn Technologies, Inc.* 21,398
1,100 Autodesk, Inc. 21,175
1,700 Axcelis Technologies, Inc.* 17,986
700 BARRA, Inc.* 26,600
5,100 Bell Microproducts, Inc.* 43,044
700 Benchmark Electronics, Inc.* 34,104
2,500 BISYS Group, Inc.* 35,750
700 CACI International, Inc.* 34,671
5,400 CIBER, Inc.* 49,788
185,300 Cisco Systems, Inc.(b) * 3,887,594
18,700 Computer Sciences Corporation * 740,894
800 Cymer, Inc.* 36,528
2,300 Cypress Semiconductor Corporation * 49,358
69,300 Dell, Inc.* 2,503,116
56,100 EMC Corporation * 776,424
600 Fair Isaac Corporation 38,268
103,700 First Data Corporation 3,702,090
25,300 Global Payments, Inc. 1,053,745
50,200 Hewlett-Packard Company 1,119,962
1,300 Hutchinson Technology, Inc.* 43,563
800 Hyperion Solutions Corporation * 26,792
6,200 Ingram Micro, Inc.* 91,760
172,100 Intel Corporation 5,687,905
1,700 Inter-Tel, Inc. 42,823
49,000 International Business Machines Corporation 4,384,520
800 International Rectifier Corporation * 38,184
800 Itron, Inc.* 16,392
800 Kronos, Inc.* 48,000
800 Manhattan Associates, Inc.* 22,272
4,200 MatrixOne, Inc.* 23,268
2,000 Metrologic Instruments, Inc. 46,860
286,700 Microsoft Corporation 7,497,205
3,200 MPS Group, Inc.* 30,560
2,600 MSC.Software Corporation * 26,780
3,200 Opsware, Inc.* 26,624
146,100 Oracle Corporation * 1,747,356
15,200 Parametric Technology Corporation * 47,272
2,300 Photronics, Inc.* 49,542
2,000 Planar Systems, Inc.* 46,280
1,300 Plantronics, Inc.* 36,153
1,500 Plexus Corporation * 25,935
700 Power Integrations, Inc.* 24,374
2,000 RadiSys Corporation* 39,100
4,100 Skyworks Solutions, Inc.* 35,178
3,800 Stratex Networks, Inc.* 12,160
2,100 Tech Data Corporation * 69,132
800 Technitrol, Inc. 17,440
46,400 Texas Instruments, Inc. 1,341,888
2,800 Tollgrade Communications, Inc.* 43,876
1,600 Trimble Navigation, Ltd.* 44,240
1,000 Varian Semiconductor Equipment Associates, Inc.* 48,350
1,100 Varian, Inc.* 39,391
3,200 Vishay Intertechnology, Inc.* 60,000
3,300 Westell Technologies, Inc.* 27,489
4,100 Wind River Systems, Inc.* 27,470
800 Zebra Technologies Corporation 45,560
- -------------------------------------------------------------------------------------------------------------------------
Total Information Technology 37,587,471
=========================================================================================================================
Materials (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
1,100 Florida Rock Industries, Inc. 62,975
2,900 MacDermid, Inc. 86,652
1,100 Peabody Energy Corporation 36,663
800 Schweitzer-Mauduit International, Inc. 21,280
3,200 Steel Dynamics, Inc.* 59,616
2,200 Wausau-Mosinee Paper Corporation 27,192
- -------------------------------------------------------------------------------------------------------------------------
Total Materials 294,378
=========================================================================================================================
Utilities (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,600 Energen Corporation 58,992
19,200 Entergy Corporation 1,034,880
1,600 Philadelphia Suburban Corporation 37,792
900 Piedmont Natural Gas Company, Inc. 35,757
2,600 UniSource Energy Corporation 50,180
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 1,217,601
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $213,090,713) 225,224,632
=========================================================================================================================
Principal
Amount Long-Term Fixed Income (33.7%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities (3.0%)
- -------------------------------------------------------------------------------------------------------------------------
$1,250,000 Chase Credit Card Master Trust(b,c) 1.250% 11/15/2003 $1,253,409
750,000 Citibank Credit Card Issuance Trust(b,c) 1.259 11/7/2003 751,412
1,800,000 Citibank Credit Card Master Trust I(b) 6.050 1/15/2010 1,989,751
1,300,000 Discover Card Master Trust I(b,c) 1.180 11/15/2003 1,300,767
810,687 EQCC Home Equity Loan Trust 6.930 2/15/2029 822,298
500,000 Federal Home Loan Mortgage Corporation 3.158 12/27/2029 505,628
1,500,000 GMAC Mortgage Corporation Loan Trust(c) 1.250 11/25/2003 1,500,316
1,118,763 Green Tree Financial Corporation 6.330 11/1/2029 1,124,057
1,900,000 MBNA Credit Card Master Note Trust 5.750 10/15/2008 2,048,869
2,000,000 Toyota Auto Receivables Owner Trust(c) 1.140 11/15/2003 1,998,856
11,724 Vanderbilt Mortgage Finance Corporation 8.045 7/7/2012 11,721
- -------------------------------------------------------------------------------------------------------------------------
Total Asset-Backed Securities 13,307,084
=========================================================================================================================
Basic Materials (0.9%)
- -------------------------------------------------------------------------------------------------------------------------
800,000 Codelco, Inc. 5.500 10/15/2013 803,620
750,000 Noranda, Inc. 6.000 10/15/2015 759,476
750,000 Phelps Dodge Corporation 8.750 6/1/2011 893,863
500,000 Temple-Inland, Inc. 7.875 5/1/2012 566,984
250,000 Weyerhaeuser Company 6.125 3/15/2007 270,352
500,000 Weyerhaeuser Company 5.250 12/15/2009 515,644
- -------------------------------------------------------------------------------------------------------------------------
Total Basic Materials 3,809,939
=========================================================================================================================
Capital Goods (0.8%)
- -------------------------------------------------------------------------------------------------------------------------
750,000 Boeing Capital Corporation 6.100 3/1/2011 798,121
500,000 Bombardier Capital, Inc.(b) 6.125 6/29/2006 530,000
500,000 Bombardier, Inc.(b) 6.750 5/1/2012 531,250
1,000,000 Raytheon Company 6.000 12/15/2010 1,059,127
250,000 Sealed Air Corporation 5.375 4/15/2008 259,838
500,000 Waste Management, Inc. 6.875 5/15/2009 561,191
- -------------------------------------------------------------------------------------------------------------------------
Total Capital Goods 3,739,527
=========================================================================================================================
Commercial Mortgage-Backed Securities (2.8%)
- -------------------------------------------------------------------------------------------------------------------------
500,000 Banc of America Commercial Mortgage, Inc. 5.118 7/11/2043 513,511
1,941,356 CAM Commercial Mortgage Corporation 4.834 11/14/2036 2,021,643
1,000,000 First Union National Bank Commercial Mortgage Trust 7.390 12/15/2031 1,156,540
1,329,001 First Union-Lehman Brothers-Bank of America
Commercial Mortgage Trust 6.280 11/18/2035 1,399,941
1,500,000 GMAC Commercial Mortgage Securities, Inc. 6.175 5/15/2033 1,653,516
500,000 LB-UBS Commercial Mortgage Trust 3.323 3/15/2027 494,316
2,000,000 LB-UBS Commercial Mortgage Trust 3.086 5/15/2027 1,947,386
1,500,000 Morgan Stanley Capital I, Inc. 6.210 11/15/2031 1,650,795
1,300,000 Nationslink Funding Corporation 6.476 8/20/2030 1,444,720
- -------------------------------------------------------------------------------------------------------------------------
Total Commercial Mortgage-Backed Securities 12,282,368
=========================================================================================================================
Communications Services (2.1%)
- -------------------------------------------------------------------------------------------------------------------------
650,000 AT&T Wireless Services, Inc. 7.500 5/1/2007 729,085
225,000 AT&T Wireless Services, Inc. 7.875 3/1/2011 257,103
250,000 AT&T Wireless Services, Inc. 8.125 5/1/2012 289,968
500,000 CenturyTel, Inc. 8.375 10/15/2010 605,197
600,000 Citizens Communications Company(b) 7.625 8/15/2008 688,711
550,000 Clear Channel Communications, Inc.(b) 4.400 5/15/2011 528,800
500,000 Comcast Corporation 5.500 3/15/2011 516,106
1,000,000 Continental Cablevision, Inc. 8.875 9/15/2005 1,110,752
300,000 Cox Enterprises, Inc. 8.000 2/15/2007 341,130
250,000 Deutsche Telekom International Finance BV(b) 5.250 7/22/2013 248,459
500,000 GTE North, Inc. 6.375 2/15/2010 545,112
400,000 Intelsat, Ltd. 5.250 11/1/2008 404,188
300,000 News America, Inc. 4.750 3/15/2010 305,092
625,000 Sprint Capital Corporation 7.625 1/30/2011 687,634
400,000 Sprint Capital Corporation 6.900 5/1/2019 396,435
500,000 TELUS Corporation 7.500 6/1/2007 555,286
350,000 TELUS Corporation 8.000 6/1/2011 402,384
750,000 Verizon Global Funding Corporation 7.250 12/1/2010 856,547
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 9,467,989
=========================================================================================================================
Consumer Cyclical (1.7%)
- -------------------------------------------------------------------------------------------------------------------------
1,000,000 American Honda Finance Corporation(b,c) 1.330 11/17/2003 1,001,222
750,000 AOL Time Warner, Inc.(b) 6.750 4/15/2011 828,714
750,000 Cendant Corporation(b) 6.875 8/15/2006 824,164
500,000 Centex Corporation 5.800 9/15/2009 531,012
500,000 Daimler Chrysler North American Holdings Corporation 6.500 11/15/2013 504,745
250,000 Delphi Auto Systems Corporation(b) 6.500 5/1/2009 264,246
500,000 Ford Motor Credit Company 7.600 8/1/2005 530,139
350,000 Ford Motor Credit Company 7.375 10/28/2009 362,029
500,000 General Motors Acceptance Corporation 6.125 2/1/2007 525,040
500,000 Liberty Media Corporation 7.875 7/15/2009 565,032
500,000 Liberty Media Corporation 5.700 5/15/2013 488,834
375,000 Pulte Homes, Inc. 8.125 3/1/2011 439,572
250,000 Pulte Homes, Inc. 6.375 5/15/2033 238,982
350,000 Time Warner Entertainment Company, LP 8.375 3/15/2023 425,843
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Cyclical 7,529,574
=========================================================================================================================
Consumer Non-Cyclical (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
850,000 Bunge Limited Finance Corporation(b) 7.800 10/15/2012 978,942
125,000 Kraft Foods, Inc. 4.625 11/1/2006 130,286
550,000 Kroger Company 7.250 6/1/2009 626,388
1,000,000 Safeway, Inc. 4.125 11/1/2008 996,602
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Non-Cyclical 2,732,218
=========================================================================================================================
Energy (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
750,000 Halliburton Company 5.500 10/15/2010 758,074
500,000 Ocean Energy, Inc. 4.375 10/1/2007 514,412
325,000 Pemex Project Funding Master Trust(d) 8.000 11/15/2011 359,125
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 1,631,611
=========================================================================================================================
Financials (8.6%)
- -------------------------------------------------------------------------------------------------------------------------
250,000 Abbey National Capital Trust I 8.963 12/29/2049 331,602
450,000 BNP Paribas Capital Trust 9.003 12/29/2049 558,573
585,000 Capital One Financial Corporation(b) 7.250 5/1/2006 627,613
800,000 Capital One Financial Corporation(b) 8.750 2/1/2007 895,715
750,000 Countrywide Home Loans, Inc. 5.625 7/15/2009 800,613
500,000 Credit Suisse First Boston USA, Inc.(b) 5.500 8/15/2013 512,290
500,000 EOP Operating, LP 6.800 1/15/2009 558,624
800,000 Goldman Sachs Group, Inc. 5.250 10/15/2013 801,512
250,000 Household Finance Corporation 5.875 2/1/2009 270,355
750,000 HRPT Properties Trust 5.750 2/15/2014 751,050
600,000 HSBC Capital Funding, LP 9.547 12/31/2049 760,037
750,000 ING Capital Funding Trust III 8.439 12/29/2049 933,996
750,000 International Lease Finance Corporation 5.625 6/1/2007 806,878
1,890,000 Lehman Brothers, Inc. 6.539 8/15/2008 2,047,097
500,000 Liberty Property, LP 7.250 3/15/2011 564,788
125,000 Mack-Cali Realty Corporation 7.250 3/15/2009 141,969
375,000 Mack-Cali Realty Corporation 7.750 2/15/2011 433,838
2,000,000 MBIA Global Funding, LLC(c) 1.250 1/8/2004 1,999,678
350,000 MBNA Corporation 4.625 9/15/2008 363,593
2,000,000 Merrill Lynch & Company, Inc.(c) 1.430 11/21/2003 2,003,620
375,000 Montpelier Reinsurance Holdings, Ltd. 6.125 8/15/2013 378,820
9,483,000 Morgan Stanley and Company 5.878 3/1/2007 10,175,828
5,828,000 Morgan Stanley and Company 7.252 9/15/2011 6,615,188
400,000 Morgan Stanley Dean Witter & Company 4.250 5/15/2010 394,072
1,000,000 Regency Centers, LP 7.125 7/15/2005 1,077,826
650,000 Royal Bank of Scotland Group plc 9.118 3/31/2049 809,145
500,000 Simon Property Group, LP 6.375 11/15/2007 547,889
625,000 Union Planters Corporation 7.750 3/1/2011 730,261
250,000 Vornado Realty Trust 5.625 6/15/2007 264,053
500,000 Washington Mutual Bank 5.500 1/15/2013 511,836
250,000 Westpac Capital Trust III 5.819 12/29/2049 256,972
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 37,925,331
=========================================================================================================================
Foreign (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
750,000 Corporacion Andina de Fomento 6.875 3/15/2012 825,169
500,000 Mexico Government International 7.500 1/14/2012 558,750
250,000 Petroleos Mexicanos 9.375 12/2/2008 295,000
- -------------------------------------------------------------------------------------------------------------------------
Total Foreign 1,678,919
=========================================================================================================================
Mortgage-Backed Securities (7.8%)
- -------------------------------------------------------------------------------------------------------------------------
8,750,000 Federal National Mortgage Association
15-Yr. Conventional (e) 5.500 11/1/2018 9,007,031
25,000,000 Federal National Mortgage Association
30-Yr. Conventional (e) 6.000 11/1/2033 25,664,051
- -------------------------------------------------------------------------------------------------------------------------
Total Mortgage-Backed Securities 34,671,082
=========================================================================================================================
Municipal Bonds (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
475,203 Educational Enhancement Funding Corporation 6.720 6/1/2025 450,431
- -------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds 450,431
=========================================================================================================================
Other (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
250,000 Textron, Inc. 4.500 8/1/2010 248,466
- -------------------------------------------------------------------------------------------------------------------------
Total Other 248,466
=========================================================================================================================
Transportation (0.2%)
- -------------------------------------------------------------------------------------------------------------------------
250,000 Union Pacific Company 3.625 6/1/2010 236,559
736,183 United Air Lines, Inc.(f) 7.186 4/1/2011 631,173
- -------------------------------------------------------------------------------------------------------------------------
Total Transportation 867,732
=========================================================================================================================
U.S. Government (2.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Federal Home Loan Mortgage Corporation 3.500 9/15/2007 2,535,740
1,500,000 Federal National Mortgage Association 4.250 7/15/2007 1,562,776
3,900,000 U.S. Treasury Notes 6.000 8/15/2009 4,409,742
250,000 U.S. Treasury Notes 4.250 8/15/2013 248,984
- -------------------------------------------------------------------------------------------------------------------------
Total U.S. Government 8,757,242
=========================================================================================================================
Utilities (2.2%)
- -------------------------------------------------------------------------------------------------------------------------
500,000 Alliant Energy Resources, Inc. 7.375 11/9/2009 555,604
500,000 American Electric Power Company, Inc. 6.125 5/15/2006 537,026
250,000 Centerpoint Energy, Inc. 7.250 9/1/2010 267,901
1,000,000 Consumers Energy Company 4.000 5/15/2010 956,864
375,000 FirstEnergy Corporation 5.500 11/15/2006 394,074
250,000 FirstEnergy Corporation 6.450 11/15/2011 265,558
550,000 FirstEnergy Corporation 7.375 11/15/2031 587,548
250,293 FPL Energy Virginia Funding Corporation 7.520 6/30/2019 268,597
250,000 NiSource Finance Corporation 3.200 11/1/2006 250,280
1,000,000 NiSource Finance Corporation 7.875 11/15/2010 1,183,240
862,500 Northeast Generation Company 4.998 10/15/2005 879,750
500,000 Oncor Electric Delivery Company 7.000 9/1/2022 546,358
500,000 Pinnacle West Capital Corporation 6.400 4/1/2006 531,224
250,000 Power Contract Financing, LLC 5.200 2/1/2006 249,445
250,000 Power Receivables Finance, LLC 6.290 1/1/2012 253,388
600,000 Public Service Company of New Mexico 4.400 9/15/2008 605,202
200,000 Texas-New Mexico Power Company 6.125 6/1/2008 201,791
500,000 TXU Corporation 6.375 6/15/2006 530,000
850,000 Xcel Energy, Inc. 7.000 12/1/2010 954,996
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 10,018,846
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $146,250,475) 149,118,359
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (15.4%) Interest Rate(g) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$10,200,000 Amsterdam Funding Corporation 1.060% 12/1/2003 $10,190,990
7,400,000 Aspen Funding Corporation 1.050 11/3/2003 7,399,568
8,000,000 Asset Securitization Cooperative Corporation(c) 1.080 11/3/2003 8,000,000
3,944,000 Federal Home Loan Bank 1.030 12/17/2003 3,938,809
10,000,000 Federal Home Loan Mortgage Corporation 1.000 11/18/2003 9,995,453
5,000,000 Preferred Receivables Funding Corporation 1.050 11/13/2003 4,998,313
11,200,000 Sheffield Receivables Corporation 1.050 11/7/2003 11,198,040
12,713,096 The AAL Money Market Fund 0.528 N/A 12,713,096
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 68,434,269
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $427,775,457) $442,777,260
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of
total investments.
(b) Earmarked as collateral for options, futures or
longer settling trades as discussed in the notes to
the financial statements.
(c) Denotes variable rate obligations for which the
current yield and next scheduled reset date are
shown.
(d) Denotes step coupon bonds for which the current
interest rate and next scheduled reset date are
shown.
(e) Denotes securities purchased on a when-issued basis.
(f) In bankruptcy.
(g) The interest rate shown reflects the 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 October 31, 2003 (a) (unaudited)
Principal
Amount Long-Term Fixed Income (94.3%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Basic Materials (7.4%)
- -------------------------------------------------------------------------------------------------------------------------
$500,000 Abitibi-Consolidated, Inc. 8.550% 8/1/2010 $543,751
350,000 Abitibi-Consolidated, Inc. 8.850 8/1/2030 361,079
125,000 ARCO Chemical Company 10.250 11/1/2010 123,750
175,000 Compass Minerals Group, Inc. 10.000 8/15/2011 195,125
475,000 Equistar Chemicals, LP 8.750 2/15/2009 472,625
500,000 Fort James Corporation 6.700 11/15/2003 499,279
490,000 Georgia-Pacific Corporation 9.875 11/1/2021 507,150
1,025,000 Georgia-Pacific Corporation 9.625 3/15/2022 1,060,875
300,000 Georgia-Pacific Corporation 9.500 5/15/2022 309,000
650,000 Georgia-Pacific Corporation 9.125 7/1/2022 666,250
400,000 Hercules, Inc. 11.125 11/15/2007 464,000
800,000 ISP Chemco, Inc. 10.250 7/1/2011 894,000
250,000 ISP Holdings, Inc. 10.625 12/15/2009 273,750
250,000 Lyondell Chemical Company 9.500 12/15/2008 250,000
850,000 MDP Acquisitions plc 9.625 10/1/2012 943,500
400,000 Millennium America, Inc. 9.250 6/15/2008 423,000
550,000 Nalco Company 8.875 11/15/2013 572,000
700,000 OM Group, Inc. 9.250 12/15/2011 707,000
675,000 Peabody Energy Corporation 6.875 3/15/2013 710,438
- -------------------------------------------------------------------------------------------------------------------------
Total Basic Materials 9,976,572
=========================================================================================================================
Capital Goods (6.4%)
- -------------------------------------------------------------------------------------------------------------------------
900,000 Allied Waste North America, Inc. 8.875 4/1/2008 994,500
800,000 Allied Waste North America, Inc. 8.500 12/1/2008 882,000
800,000 Allied Waste North America, Inc. 10.000 8/1/2009 870,000
100,000 Allied Waste North America, Inc. 9.250 9/1/2012 112,500
600,000 Building Materials Corporation of America 7.750 7/15/2005 612,000
100,000 Building Materials Corporation of America 8.000 10/15/2007 98,500
600,000 Crown Euro Holdings SA 9.500 3/1/2011 666,000
400,000 Crown Euro Holdings SA 10.875 3/1/2013 456,000
150,000 Eircom Funding 8.250 8/15/2013 163,125
525,000 Graphic Packaging International Corporation 8.500 8/15/2011 578,812
500,000 Greif Brothers Corporation 8.875 8/1/2012 545,000
600,000 Jefferson Smurfit Corporation 7.500 6/1/2013 612,000
500,000 Koppers Industry, Inc. 9.875 10/15/2013 527,500
100,000 Owens-Brockway Glass Container, Inc. 8.875 2/15/2009 108,500
125,000 Owens-Brockway Glass Container, Inc. 7.750 5/15/2011 131,875
700,000 Owens-Brockway Glass Container, Inc. 8.750 11/15/2012 766,500
350,000 Owens-Brockway Glass Container, Inc. 8.250 5/15/2013 369,250
100,000 Tyco International Group SA 6.750 2/15/2011 106,375
- -------------------------------------------------------------------------------------------------------------------------
Total Capital Goods 8,600,437
=========================================================================================================================
Communications Services (23.9%)
- -------------------------------------------------------------------------------------------------------------------------
1,000,000 ACC Escrow Corporation 10.000 8/1/2011 1,090,000
400,000 Allbritton Communications Company 7.750 12/15/2012 408,000
650,000 American Color Graphics, Inc. 10.000 6/15/2010 697,125
675,000 American Media Operation, Inc. 10.250 5/1/2009 723,938
1,000,000 American Tower Escrow Corporation Zero Coupon 8/1/2008 685,000
600,000 Cadmus Communications Corporation 9.750 6/1/2009 639,750
1,001,744 Calpoint Receivable Structured Trust 2001 7.440 12/10/2006 989,222
600,000 CanWest Media, Inc. 10.625 5/15/2011 687,000
300,000 CF Cable TV, Inc. 9.125 7/15/2007 317,250
1,520,000 Charter Communications Holdings, LLC 10.000 4/1/2009 1,261,600
200,000 Charter Communications Holdings, LLC(b) Zero Coupon 1/15/2011 135,000
700,000 Cincinnati Bell, Inc. 7.250 7/15/2013 714,000
700,000 Crown Castle International Corporation(b) Zero Coupon 8/1/2011 710,500
700,000 CSC Holdings, Inc. 8.125 7/15/2009 728,000
300,000 CSC Holdings, Inc. 8.125 8/15/2009 312,000
600,000 CSC Holdings, Inc. 7.625 4/1/2011 612,000
450,000 Dex Media West, LLC 9.875 8/15/2013 511,875
700,000 DirecTV Holdings, LLC 8.375 3/15/2013 787,500
25,000 EchoStar DBS Corporation 10.375 10/1/2007 27,594
600,000 EchoStar DBS Corporation 9.375 2/1/2009 634,500
200,000 Garden State Newspapers, Inc. 8.750 10/1/2009 206,250
650,000 Garden State Newspapers, Inc. 8.625 7/1/2011 688,188
100,000 Gaylord Entertainment Company 8.000 11/15/2013 102,875
650,000 Hollinger International Publishing, Inc. 9.000 12/15/2010 689,000
620,000 Houghton Mifflin Company 8.250 2/1/2011 655,650
525,000 Insight Midwest, LP/Insight Capital, Inc. 9.750 10/1/2009 535,500
350,000 Insight Midwest, LP/Insight Capital, Inc. 10.500 11/1/2010 365,750
650,000 Marconi Corporation plc 8.000 4/30/2008 637,000
1,100,000 MCI WorldCom, Inc.(c,d) 7.125 6/15/2027 910,250
1,550,000 MCI WorldCom, Inc.(c,d) 6.950 8/15/2028 569,625
650,000 Mediacom Broadband, LLC 11.000 7/15/2013 679,250
100,000 Nextel Communications, Inc. 7.375 8/1/2015 104,000
500,000 Nextel Communications, Inc., Bank Term Loan(e,g) 4.813 11/6/2003 501,384
500,000 Nextel Communications, Inc., Bank Term Loan(e,g) 4.563 11/6/2003 501,384
1,150,000 Panamsat Corporation 8.500 2/1/2012 1,239,125
650,000 PRIMEDIA, Inc. 8.000 5/15/2013 661,375
700,000 Quebecor Media, Inc. 11.125 7/15/2011 805,000
400,000 Qwest Capital Funding, Inc. 5.875 8/3/2004 398,500
950,000 Qwest Capital Funding, Inc. 7.900 8/15/2010 907,250
270,000 Qwest Capital Funding, Inc. 7.250 2/15/2011 251,100
120,000 Qwest Capital Funding, Inc. 7.750 2/15/2031 102,000
1,400,000 Qwest Communications International, Inc. 7.500 11/1/2008 1,358,000
800,000 Rogers Cantel, Inc. 9.375 6/1/2008 837,000
350,000 Rogers Communications, Inc. 2.000 11/26/2005 320,688
675,000 Rural Cellular Corporation 9.875 2/1/2010 673,312
600,000 Spectrasite, Inc. 8.250 5/15/2010 636,000
685,000 Sprint Capital Corporation 8.750 3/15/2032 779,127
175,000 Time Warner Telecom, Inc. 9.750 7/15/2008 179,375
500,000 Time Warner Telecom, Inc. 10.125 2/1/2011 518,750
380,000 Triton PCS, Inc. 8.750 11/15/2011 364,800
175,000 Triton PCS, Inc. 8.500 6/1/2013 184,188
305,000 Vivendi Universal SA 9.250 4/15/2010 354,562
1,450,000 WorldCom, Inc.(c) 8.250 5/15/2031 532,875
160,000 Young Broadcasting, Inc. 9.000 1/15/2006 160,400
100,000 Young Broadcasting, Inc. 8.750 6/15/2007 100,750
250,000 Young Broadcasting, Inc. 8.500 12/15/2008 269,375
767,000 Young Broadcasting, Inc. 10.000 3/1/2011 816,855
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 32,268,367
=========================================================================================================================
Consumer Cyclical (9.8%)
- -------------------------------------------------------------------------------------------------------------------------
900,000 Boyd Gaming Corporation 7.750 12/15/2012 951,750
500,000 Circus & Eldorado Joint Venture/Silver Legacy
Capital Corporation 10.125 3/1/2012 511,875
550,000 Dura Operating Corporation 8.625 4/15/2012 558,250
700,000 Extended Stay America, Inc. 9.875 6/15/2011 770,000
750,000 Fiat Finance Luxembourg SA 3.250 1/9/2007 740,625
375,000 General Motors Corporation 8.375 7/15/2033 395,648
900,000 Hilton Hotels Corporation 7.625 12/1/2012 995,625
950,000 HMH Properties, Inc. 7.875 8/1/2008 980,875
125,000 Host Marriott, LP 9.500 1/15/2007 138,438
500,000 Mail-Well, Inc. 9.625 3/15/2012 561,250
700,000 Mandalay Resort Group 9.375 2/15/2010 806,750
265,000 Mandalay Resort Group 7.625 7/15/2013 278,250
350,000 Mandalay Resort Group 6.700 11/15/2096 350,000
900,000 MGM Mirage, Inc. 8.375 2/1/2011 1,003,500
950,000 Park Place Entertainment Corporation 7.875 3/15/2010 1,026,000
60,000 Park Place Entertainment Corporation 7.000 4/15/2013 62,550
850,000 Six Flags, Inc. 9.750 4/15/2013 833,000
300,000 Starwood Hotels & Resorts Worldwide, Inc. 6.750 11/15/2003 299,939
800,000 Starwood Hotels & Resorts Worldwide, Inc. 7.375 5/1/2007 862,000
100,000 Starwood Hotels & Resorts Worldwide, Inc. 7.875 5/1/2012 110,500
900,000 TRW Automotive, Inc. 9.375 2/15/2013 1,021,500
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Cyclical 13,258,325
=========================================================================================================================
Consumer Non-Cyclical (8.9%)
- -------------------------------------------------------------------------------------------------------------------------
900,000 Beverly Enterprises, Inc. 9.000 2/15/2006 918,000
650,000 Commonwealth Brands, Inc.(e) 10.625 9/1/2008 708,500
550,000 DIMON, Inc. 9.625 10/15/2011 616,000
575,000 Domino's, Inc. 8.250 7/1/2011 607,344
625,000 Extendicare Health Services, Inc. 9.350 12/15/2007 646,875
300,000 Fisher Scientific International, Inc. 8.000 9/1/2013 322,500
900,000 Fresenius Medical Care Capital Trust II 7.875 2/1/2008 945,000
50,000 Fresenius Medical Care Capital Trust IV 7.875 6/15/2011 52,750
885,000 HCA Healthcare Company 7.875 2/1/2011 974,730
700,000 HEALTHSOUTH Corporation(c) 8.500 2/1/2008 619,500
250,000 HEALTHSOUTH Corporation(c) 8.375 10/1/2011 221,250
525,000 Ingles Markets, Inc. 8.875 12/1/2011 505,312
95,000 Merisant Company 9.500 7/15/2013 102,600
750,000 Moore North American Finance, Inc. 7.875 1/15/2011 810,000
325,000 PacifiCare Health Systems, Inc. 10.750 6/1/2009 373,750
575,000 Rayovac Corporation 8.500 10/1/2013 598,000
650,000 Rotech Healthcare, Inc. 9.500 4/1/2012 702,000
925,000 Roundy's, Inc. 8.875 6/15/2012 966,625
250,000 Tenet Healthcare Corporation 6.375 12/1/2011 231,875
1,095,000 Tenet Healthcare Corporation 7.375 2/1/2013 1,062,150
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Non-Cyclical 11,984,761
=========================================================================================================================
Energy (6.5%)
- -------------------------------------------------------------------------------------------------------------------------
600,000 Amerigas Partners, LP(f) 8.830 4/19/2010 672,000
550,000 BRL Universal Equipment Corporation 8.875 2/15/2008 594,000
150,000 Chesapeake Energy Corporation 8.500 3/15/2012 159,000
450,000 Chesapeake Energy Corporation 9.000 8/15/2012 513,000
100,000 Chesapeake Energy Corporation 7.500 9/15/2013 107,500
100,000 Chesapeake Energy Corporation 7.750 1/15/2015 108,000
800,000 Dresser, Inc. 9.375 4/15/2011 822,000
900,000 Hanover Equipment Trust 8.500 9/1/2008 922,500
200,000 Illinova Corporation 7.125 2/1/2004 199,000
550,000 Newpark Resources, Inc. 8.625 12/15/2007 567,875
1,025,000 Pacific Gas & Electric Company(e,g) 7.958 10/31/2049 1,037,812
600,000 SESI, LLC 8.875 5/15/2011 645,000
856,158 South Point Energy Center, LLC/Broad River
Energy, LLC/Rockgen Energy, LLC 8.400 5/30/2012 796,227
525,000 Southern California Edison Company 8.000 2/15/2007 589,312
600,000 Vintage Petroleum, Inc. 7.875 5/15/2011 634,500
400,000 Vintage Petroleum, Inc. 8.250 5/1/2012 438,000
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 8,805,726
=========================================================================================================================
Financials (5.0%)
- -------------------------------------------------------------------------------------------------------------------------
300,000 Arch Western Finance, Inc. 6.750 7/1/2013 310,500
600,000 Bluewater Finance, Ltd. 10.250 2/15/2012 612,000
560,940 Cedar Brakes II, LLC 9.875 9/1/2013 566,549
550,000 Choctaw Resort Development Enterprise 9.250 4/1/2009 600,188
1,950,000 FINOVA Group, Inc. 7.500 11/15/2009 975,000
900,000 Gemstone Investor, Ltd. 7.710 10/31/2004 901,125
600,000 H&E Equipment Services, LLC 11.125 6/15/2012 540,000
225,000 JET Equipment Trust(c) 10.000 6/15/2012 99,562
241,687 JET Equipment Trust(c) 7.630 8/15/2012 97,456
675,000 Riggs Capital Trust II 8.875 3/15/2027 681,750
350,000 Universal City Development Services 11.750 4/1/2010 404,688
800,000 Ventas Realty, LP, Capital Corporation 8.750 5/1/2009 880,000
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 6,668,818
=========================================================================================================================
Foreign (7.2%)
- -------------------------------------------------------------------------------------------------------------------------
1,250,000 Brazilian Government 2.000 4/15/2006 1,220,375
2,715,259 Brazilian Government 8.000 4/15/2014 2,526,820
100,000 Federal Republic of Brazil 10.000 8/7/2011 102,000
250,000 Federal Republic of Brazil 11.000 8/17/2040 244,000
250,000 Republic of Panama 9.625 2/8/2011 288,125
1,325,000 Republic of Panama 9.375 7/23/2012 1,510,500
250,000 Republic of Panama 9.375 4/1/2029 283,750
250,000 Republic of Peru 9.125 1/15/2008 293,375
1,350,000 Republic of Peru 9.125 2/21/2012 1,508,625
775,500 Republic of Peru 5.000 3/7/2017 723,154
1,100,000 Russian Federation(b) 5.000 3/31/2030 1,026,850
- -------------------------------------------------------------------------------------------------------------------------
Total Foreign 9,727,574
=========================================================================================================================
Other (1.6%)
- -------------------------------------------------------------------------------------------------------------------------
550,000 Johnsondiversey, Inc. 9.625 5/15/2012 607,750
650,000 SPX Corporation 7.500 1/1/2013 693,875
750,000 Tenneco Automotive, Inc. 10.250 7/15/2013 828,750
- -------------------------------------------------------------------------------------------------------------------------
Total Other 2,130,375
=========================================================================================================================
Technology (0.2%)
- -------------------------------------------------------------------------------------------------------------------------
330,000 Xerox Corporation 7.125 6/15/2010 336,600
- -------------------------------------------------------------------------------------------------------------------------
Total Technology 336,600
=========================================================================================================================
Transportation (1.6%)
- -------------------------------------------------------------------------------------------------------------------------
500,000 Continental Airlines, Inc. 7.373 12/15/2015 408,158
260,388 Continental Airlines, Inc. 6.545 2/2/2019 258,978
500,000 Dunlop Standard Aerospace Holdings plc 11.875 5/15/2009 542,500
600,000 United Air Lines, Inc.(d) 6.602 9/1/2013 501,549
435,649 US Airways Pass Through Trust Company 8.360 1/20/2019 422,706
- -------------------------------------------------------------------------------------------------------------------------
Total Transportation 2,133,891
=========================================================================================================================
Utilities (15.8%)
- -------------------------------------------------------------------------------------------------------------------------
475,000 AES Corporation 8.875 2/15/2011 488,062
1,100,000 AES Corporation 8.750 5/15/2013 1,174,250
711,981 AES Ironwood, LLC 8.857 11/30/2025 744,020
400,000 AmeriGas Eagle Finance Corporation 10.000 4/15/2006 436,000
625,000 Calpine Corporation 8.500 7/15/2010 571,875
100,000 Calpine Corporation 8.750 7/15/2013 91,500
175,000 CMS Energy Corporation 7.625 11/15/2004 178,500
625,000 CMS Energy Corporation 7.000 1/15/2005 631,250
500,000 CMS Energy Corporation 7.500 1/15/2009 508,750
225,000 CMS Energy Corporation 7.750 8/1/2010 228,938
150,000 CMS Energy Corporation 8.500 4/15/2011 156,750
350,000 Coastal Corporation 7.750 6/15/2010 294,875
200,000 Coastal Corporation 9.625 5/15/2012 185,000
100,000 Dynegy Holdings, Inc. 9.875 7/15/2010 107,500
200,000 Dynegy Holdings, Inc. 10.125 7/15/2013 217,000
850,000 Dynegy-Roseton Danskamme 7.270 11/8/2010 841,500
275,000 Dynegy-Roseton Danskamme 7.670 11/8/2016 247,500
400,000 Edison International, Inc. 6.875 9/15/2004 412,500
700,000 Edison Midwest Generation, LLC 8.300 7/2/2009 675,500
975,000 Edison Midwest Generation, LLC 8.560 1/2/2016 931,125
400,000 El Paso Corporation 7.875 6/15/2012 341,000
1,005,000 El Paso Corporation 7.375 12/15/2012 829,125
30,000 El Paso Corporation 7.800 8/1/2031 22,725
300,000 El Paso Energy Corporation 6.750 5/15/2009 255,000
250,000 El Paso Energy Partners, LP 8.500 6/1/2011 272,500
75,000 El Paso Natural Gas Corporation 7.625 8/1/2010 74,250
1,000,000 Ferrellgas Partners, LP 8.750 6/15/2012 1,090,000
100,000 Gulfterra Energy Partner 8.500 6/1/2010 109,000
150,000 Ipalco Enterprises, Inc. 8.375 11/14/2008 163,500
500,000 Ipalco Enterprises, Inc. 8.625 11/14/2011 545,000
550,000 Leviathan Finance Corporation 10.375 6/1/2009 596,750
250,000 Noram Energy Corporation(f,g) 6.375 11/1/2003 250,000
150,000 PSE&G Energy Holdings, Inc. 7.750 4/16/2007 151,500
300,000 PSE&G Energy Holdings, Inc. 10.000 10/1/2009 324,000
900,000 PSE&G Energy Holdings, Inc. 8.500 6/15/2011 918,000
225,000 Reliant Energy Resources Corporation 7.750 2/15/2011 252,298
614,330 Rocky River Private Placement(e,f) 8.810 4/14/2007 697,131
550,000 Sonat, Inc. 7.625 7/15/2011 463,375
600,000 Teco Energy, Inc. 7.500 6/15/2010 616,500
575,000 Transmontaigne, Inc. 9.125 6/1/2010 623,875
800,000 Williams Companies, Inc. 9.250 3/15/2004 819,000
500,000 Williams Companies, Inc. 8.625 6/1/2010 547,500
610,000 Williams Companies, Inc. 7.625 7/15/2019 597,800
675,000 Williams Companies, Inc. 7.875 9/1/2021 668,250
300,000 Williams Companies, Inc. 9.375 11/15/2021 363,891
525,000 Williams Companies, Inc. 8.750 3/15/2032 548,623
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 21,262,988
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $120,487,628) 127,154,434
=========================================================================================================================
Shares Preferred Stock (0.2%) Value
- -------------------------------------------------------------------------------------------------------------------------
1,200 Dobson Communications Corporation(e) * $252,450
- -------------------------------------------------------------------------------------------------------------------------
Total Preferred Stock (cost $206,400) 252,450
=========================================================================================================================
Shares Common Stock (1.0%) Value
- -------------------------------------------------------------------------------------------------------------------------
1 Abraxas Petroleum Corporation * $1
750 Arcadia Financial, Ltd., Stock Warrants * 8
77,237 Communications Corporation * 669,643
4,441 ICG Communications, Inc.* 32,419
735 ICG Communications, Inc., Stock Rights* 7
833 Orion Refining Corporation(f)* 0
701,620 SSgA Money Market Fund 701,620
500 Unifi Communications, Inc., Stock Warrants(e)* 5
- -------------------------------------------------------------------------------------------------------------------------
Total Common Stock (cost $1,296,652) 1,403,703
=========================================================================================================================
Principal
Amount Short-Term Investments (4.5%) Interest Rate(h) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$600,000 Case Corporation 6.250% 12/1/2003 $599,258
500,000 Federal Home Loan Mortgage Corporation 1.070 1/21/2004 498,796
1,000,000 Federal Home Loan Mortgage Corporation 1.075 2/26/2004 996,506
3,300,000 Federal National Mortgage Association 1.080 1/28/2004 3,291,288
650,000 Xerox Corporation 5.250 12/15/2003 651,656
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 6,037,504
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $128,028,184) $134,848,091
=========================================================================================================================
* Non-income producing security.
(a) The categories of investments are shown as a percentage of
total investments.
(b) Denotes step coupon bonds for which the current
interest rate and next scheduled reset date are
shown.
(c) In default.
(d) In bankruptcy.
(e) Denotes restricted securities. Restricted securities are investment
securities which cannot be offered for public sale without first being
registered under the Securities Act of 1933. These securities have been
valued from the date of acquisition through October 31, 2003, by
obtaining quotations from brokers active with these securities. The
following table indicates the acquisition date and cost of restricted
securities the Fund owned as of October 31, 2003.
Acquisition
Security Date Cost
- -------------------------------------------------------------------------------------------------------------------------
Commonwealth Brands, Inc. 7/30/03 $643,891
Dobson Communications Corporation 8/21/03 206,400
Nextel Communications Bank Term Loan B 10/17/02 450,460
Nextel Communications Bank Term Loan C 10/17/02 448,565
Pacific Gas & Electric Company 8/19/03 1,037,706
Rocky River Private Placement 11/22/00 607,029
Unifi Communications, Inc., Stock Warrants 2/14/97 6,525
(f) Security is fair valued as discussed in the notes to
the financial statements.
(g) Denotes variable rate obligations for which the
current yield and next scheduled reset date are
shown.
(h) The interest rate shown reflects the coupon rate, 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 October 31, 2003 (a) (unaudited)
Principal
Amount Long-Term Fixed Income (95.0%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Alabama (0.9%)
- -------------------------------------------------------------------------------------------------------------------------
1,000,000 Alabama 21st Century Authority Tobacco Settlement
Revenue Bonds 5.750% 12/1/2020 926,880
5,000,000 Huntsville, Alabama Health Care Authority
Revenue Bonds (Series B) 5.750 6/1/2032 5,109,250
- -------------------------------------------------------------------------------------------------------------------------
Total Alabama 6,036,130
=========================================================================================================================
Alaska (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
3,730,000 Northern Tobacco Securitization Corporation,
Alaska Tobacco Settlement Revenue Bonds 6.200 6/1/2022 3,617,951
- -------------------------------------------------------------------------------------------------------------------------
Total Alaska 3,617,951
=========================================================================================================================
Arizona (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
720,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing)
(FGIC Insured) 4.000 6/1/2004 732,204
750,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing)
(FGIC Insured) 4.000 6/1/2005 781,650
780,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing)
(FGIC Insured) 4.250 6/1/2006 828,625
815,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing)
(FGIC Insured) 4.500 6/1/2007 879,336
975,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing)
(FGIC Insured) 5.000 6/1/2011 1,073,026
1,020,000 Arizona Health Facilities Authority Revenue Bonds
(Arizona Healthcare Pooled Financing)
(FGIC Insured) 5.000 6/1/2012 1,111,433
1,000,000 Maricopa County, Arizona Elementary School District
#068 Alhambra General Obligation Bonds
(AMBAC Insured)(b) 5.125 7/1/2012 1,043,950
230,000 Phoenix, Arizona Industrial Development Authority
Single Family Mortgage Revenue Bonds
(Series 1A) (GNMA/FNMA/FHLMC Insured) 5.875 6/1/2016 238,623
450,000 Pima County, Arizona Industrial Development Authority
Educational Revenue Bonds (Arizona
Charter Schools Project) (Series A) 6.750 7/1/2031 449,352
1,285,000 Pima County, Arizona Industrial Development Authority
Multifamily Bonds (La Hacienda
Project) (GNMA/FHA Insured) 7.000 12/20/2031 1,384,947
- -------------------------------------------------------------------------------------------------------------------------
Total Arizona 8,523,146
=========================================================================================================================
Arkansas (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,400,000 Arkansas State Community Water System Public Water
Authority Revenue (Series B)
(MBIA Insured) 5.000 10/1/2023 1,426,418
487,500 Arkansas State Development Finance Authority
Single Family Mortgage Revenue Bonds (Series F)
(GNMA Insured) (Subject to 'AMT') 7.450 1/1/2027 499,917
- -------------------------------------------------------------------------------------------------------------------------
Total Arkansas 1,926,335
=========================================================================================================================
California (8.6%)
- -------------------------------------------------------------------------------------------------------------------------
815,000 California Rural Home Mortgage Finance Authority
Single Family Mortgage Revenue Bonds (Series D)
(GNMA/FNMA Insured) (Subject to 'AMT') 7.100 6/1/2031 856,524
5,000,000 California State Department of Water Resources Supply
Revenue Bonds (Series A) (AMBAC Insured) 5.375 5/1/2018 5,360,550
2,000,000 California State Revenue General Obligation Bonds(c) 5.250 11/1/2021 2,030,140
4,030,000 Contra Costa County, California Home Mortgage
Revenue Bonds (GNMA Insured) (Escrowed to
Maturity)(b) 7.500 5/1/2014 5,355,427
1,335,000 Foothill/Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds (Series A)(b) Zero Coupon 1/1/2005 1,315,763
5,000,000 Foothill/Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds (Series A)(b,d) Zero Coupon 1/1/2009 5,573,600
5,000,000 Foothill/Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds (Series A)(b,d) Zero Coupon 1/1/2011 5,758,100
6,000,000 Foothill/Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds (Series A)(b,d) Zero Coupon 1/1/2013 6,922,980
7,145,000 Foothill/Eastern Transportation Corridor Agency,
California Toll Road Revenue Bonds (Series A)(b,d) Zero Coupon 1/1/2014 8,244,115
420,000 Golden West Schools Financing Authority,
California Revenue Bonds (Series A) (MBIA Insured) 5.800 2/1/2022 483,466
740,000 Los Angeles, California Department of Water and
Power Electric Plant Revenue Bonds(b) 6.100 2/15/2017 793,413
260,000 Los Angeles, California Department of Water and
Power Electric Plant Unrefunded Revenue Bonds(b) 6.100 2/15/2017 275,395
2,000,000 Los Angeles, California Unified School District
Revenue Bonds (MBIA-Series A) 5.000 7/1/2021 2,070,240
4,200,000 Pomona, California Single Family Mortgage
Revenue Bonds (Series A) (GNMA/FNMA Insured)(b) 7.600 5/1/2023 5,566,932
3,480,000 Sacramento County, California Single Family Mortgage
Revenue Bonds (Subject to 'AMT')(b) 8.250 1/1/2021 4,924,339
1,500,000 San Bernardino County, California Single Family
Mortgage Revenue Bonds (Series A) (GNMA Insured)(b) 7.500 5/1/2023 1,981,290
- -------------------------------------------------------------------------------------------------------------------------
Total California 57,512,274
=========================================================================================================================
Colorado (5.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Bromley East Project) (Series A) 7.250 9/15/2030 2,003,040
570,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Cherry Creek Academy Facility, Inc.) 6.000 4/1/2021 576,008
1,280,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Cherry Creek Academy Facility, Inc.) 6.000 4/1/2030 1,289,651
2,825,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Classical Academy)(b) 7.250 12/1/2030 3,550,686
920,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (Pinnacle Charter School Project)(b) 5.250 12/1/2011 1,006,940
750,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (University Lab School Project) 6.125 6/1/2021 757,815
5,250,000 Colorado Educational and Cultural Facilities
Authority Revenue Bonds (University Lab School Project) 6.250 6/1/2031 5,299,612
1,000,000 Colorado Health Facilities Authority Revenue Bonds
(Evangelical Lutheran Good Samaritan) 6.250 12/1/2010 1,125,030
2,000,000 Colorado Health Facilities Authority Revenue Bonds
(Evangelical Lutheran Good Samaritan) 6.800 12/1/2020 2,166,640
465,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series A-2) (Subject to 'AMT') 7.450 10/1/2016 482,651
285,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series A-3) 7.250 4/1/2010 292,151
365,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series A-3) 6.300 8/1/2012 393,455
2,125,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series B-3) 6.700 8/1/2017 2,280,975
340,000 Colorado Housing and Finance Authority Revenue Bonds
(Single Family Program) (Series C-3) (FHA/VA Insured) 7.150 10/1/2030 352,437
3,525,000 Colorado Water Resources and Power Development
Authority Small Water Resources Revenue
Bonds (Series A) (FGIC Insured) 5.250 11/1/2021 3,727,617
200,000 Denver, Colorado Health and Hospital Authority
Healthcare Revenue Bonds (Series A) 5.250 12/1/2010 212,102
200,000 Denver, Colorado Health and Hospital Authority
Healthcare Revenue Bonds (Series A) 5.250 12/1/2011 205,726
2,000,000 Denver, Colorado Health and Hospital Authority
Healthcare Revenue Bonds (Series A) 6.250 12/1/2016 2,107,620
500,000 Denver, Colorado Health and Hospital Authority
Healthcare Revenue Bonds (Series A) 6.000 12/1/2023 499,355
4,000,000 Northwest Parkway Public Highway Authority,
Colorado Capital Appreciation Revenue Bonds
(Series C) (AMBAC Insured) Zero Coupon 6/15/2021 2,857,640
3,500,000 Regional Transportation District, Colorado Sales
Tax Revenue Bonds (Series B) (AMBAC Insured) 5.500 11/1/2021 3,792,425
- -------------------------------------------------------------------------------------------------------------------------
Total Colorado 34,979,576
=========================================================================================================================
Connecticut (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Connecticut State Health and Educational Facilities
Authority Revenue (Yale University) (Series W) 5.125 7/1/2027 2,037,160
- -------------------------------------------------------------------------------------------------------------------------
Total Connecticut 2,037,160
=========================================================================================================================
District of Columbia (1.1%)
- -------------------------------------------------------------------------------------------------------------------------
8,155,000 District of Columbia Tobacco Settlement Financing
Corporation Revenue Bonds 6.250 5/15/2024 7,483,680
- -------------------------------------------------------------------------------------------------------------------------
Total District of Columbia 7,483,680
=========================================================================================================================
Florida (3.0%)
- -------------------------------------------------------------------------------------------------------------------------
1,475,000 Brevard County, Florida Housing Finance Authority
Homeowner Mortgage Revenue Bonds (Series B)
(GNMA Insured) 6.500 9/1/2022 1,616,674
2,245,000 Clay County, Florida Housing Finance Authority
Single Family Mortgage Revenue Bonds
(GNMA/FNMA Insured) (Subject to 'AMT') 6.000 4/1/2029 2,319,332
620,000 Florida State Board of Education Capital Outlay
Unrefunded General Obligation Bonds (MBIA Insured) 9.125 6/1/2014 892,292
2,000,000 Highlands County, Florida Health Facilities Authority
Revenue Bonds (Adventist Health System/Sunbelt, Inc.)
(Series A) 6.000 11/15/2031 2,085,340
1,145,000 Leon County, Florida Educational Facilities Authority
Certificates of Participation(b) 8.500 9/1/2017 1,669,399
620,000 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 673,903
1,320,000 Orange County, Florida Health Facilities Authority
Revenue Bonds (Adventist Health Systems) 5.750 11/15/2008 1,478,387
1,000,000 Orange County, Florida Health Facilities Authority
Revenue Bonds (Adventist Health Systems) 5.850 11/15/2010 1,125,510
2,000,000 Orange County, Florida Health Facilities Authority
Revenue Bonds (Orlando Regional Healthcare System)
(Series A) (MBIA Insured) 6.250 10/1/2018 2,403,640
1,515,000 Orange County, Florida Housing Finance Authority
Homeowner Revenue Bonds (Series B-1)
(GNMA/FNMA Insured) (Subject to 'AMT') 5.900 9/1/2028 1,590,538
1,090,000 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 1,144,347
990,000 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 1,028,184
1,505,000 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 1,616,942
- -------------------------------------------------------------------------------------------------------------------------
Total Florida 19,644,488
=========================================================================================================================
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 1,635,855
- -------------------------------------------------------------------------------------------------------------------------
Total Georgia 1,635,855
=========================================================================================================================
Hawaii (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
5,000,000 Honolulu, Hawaii City & County (Series A) (FSA
Insured) 5.250 3/1/2027 5,138,200
2,555,000 Honolulu, Hawaii City & County Revenue Bonds
(Unrefunded Balance) (Series A) (FGIC Insured) 6.250 4/1/2014 3,066,077
- -------------------------------------------------------------------------------------------------------------------------
Total Hawaii 8,204,277
=========================================================================================================================
Illinois (10.2%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Broadview, Illinois Tax Increment Tax Allocation
Revenue Bonds 5.250 7/1/2012 2,067,020
1,000,000 Broadview, Illinois Tax Increment Tax Allocation
Revenue Bonds 5.375 7/1/2015 1,023,630
345,000 Chicago, Illinois Single Family Mortgage
Revenue Bonds (Series A)
(GNMA/FNMA/FHLMC Insured) (Subject to 'AMT') 7.250 9/1/2028 354,467
1,750,000 Chicago, Illinois Single Family Mortgage
Revenue Bonds (Series C)
(GNMA/FNMA/FHLMC Insured) (Subject to 'AMT') 7.050 10/1/2030 1,827,892
580,000 Chicago, Illinois Single Family Mortgage
Revenue Bonds (Series C) (GNMA/FNMA/
FHLMC Insured) (Subject to 'AMT') 7.000 3/1/2032 605,253
7,200,000 Chicago, Illinois Tax Increment Capital Appreciation
Tax Allocation Bonds (Series A) (ACA Insured) Zero Coupon 11/15/2014 4,091,832
1,000,000 Cook County, Illinois Community Consolidated
School District #15 Palatine Capital Appreciation
General Obligation Bonds (FGIC Insured) Zero Coupon 12/1/2014 607,730
1,250,000 Cook County, Illinois School District #99
Cicero General Obligation Bonds (FGIC Insured) 8.500 12/1/2011 1,680,412
1,565,000 Cook County, Illinois School District #99
Cicero General Obligation Bonds (FGIC Insured) 8.500 12/1/2014 2,201,814
1,815,000 Cook County, Illinois School District #99
Cicero General Obligation Bonds (FGIC Insured) 8.500 12/1/2016 2,605,342
1,000,000 Du Page County, Illinois General Obligation Bonds
(Stormwater Project) 5.600 1/1/2021 1,121,520
1,000,000 Illinois Development Finance Authority
Revenue Bonds (Midwestern University) (Series B) 6.000 5/15/2021 1,074,240
2,365,000 Illinois Development Finance Authority
Revenue Bonds (School District #304) (Series A)
(FSA Insured) Zero Coupon 1/1/2021 972,417
4,900,000 Illinois Educational Facilities Authority
Revenue Bonds (Northwestern University) 5.250 11/1/2032 5,413,569
380,000 Illinois Health Facilities Authority Revenue Bonds
(Series B) (MBIA/IBC Insured) 5.250 8/15/2018 433,838
1,600,000 Illinois Health Facilities Authority Revenue Bonds
(Bethesda Home and Retirement) (Series A) 6.250 9/1/2014 1,684,592
2,000,000 Illinois Health Facilities Authority Revenue Bonds
(Centegra Health Systems) 5.250 9/1/2018 1,980,620
2,500,000 Illinois Health Facilities Authority Revenue Bonds
(Passavant Memorial Area Hospital Association) 6.000 10/1/2024 2,548,775
1,000,000 Illinois Health Facilities Authority Revenue Bonds
(Riverside Health System) 6.850 11/15/2029 1,073,650
4,180,000 Illinois Health Facilities Authority Revenue Bonds
(Rush-Presbyterian-St. Lukes) (Series A) (MBIA Insured) 5.250 11/15/2014 4,530,284
1,995,000 Illinois Health Facilities Authority Revenue Bonds
(Swedish American Hospital) 6.875 11/15/2030 2,136,844
4,655,000 Illinois Health Facilities Authority Revenue Bonds
(Thorek Hospital and Medical Center) 5.250 8/15/2018 4,307,877
2,120,000 Illinois Health Facilities Authority Unrefunded
Revenue Bonds (Series B) (MBIA/IBC Insured) 5.250 8/15/2018 2,269,057
3,065,000 Illinois State Sales Tax Revenue Bonds (Series L) 7.450 6/15/2012 3,887,646
3,035,000 McHenry County, Illinois Community High School
District #157 General Obligation Bonds (FSA Insured) 9.000 12/1/2017 4,571,256
4,000,000 McLean County, Illinois Bloomington -- Normal
Airport Central Illinois Regional Authority
Revenue Bonds (Subject to 'AMT') 6.050 12/15/2019 3,765,840
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 1,007,962
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 1,282,518
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 1,011,344
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 634,980
2,000,000 Metropolitan Pier and Exposition Authority,
Illinois State Tax Revenue Bonds (McCormick Place
Exposition Project) (Series B) (MBIA Insured)(d) Zero Coupon 6/15/2020 1,341,600
3,000,000 Regional Transportation Authority, Illinois
Revenue Bonds (Series A) (FGIC Insured) 6.700 11/1/2021 3,691,110
- -------------------------------------------------------------------------------------------------------------------------
Total Illinois 67,806,931
=========================================================================================================================
Indiana (1.8%)
- -------------------------------------------------------------------------------------------------------------------------
1,250,000 East Chicago, Indiana Elementary School
Building Corporation Revenue Bonds 6.250 1/5/2016 1,470,612
395,000 Indiana State Housing Authority Single Family
Mortgage Revenue Bonds (Series C-2) (GNMA Insured) 5.250 7/1/2017 404,322
510,000 Indiana Transportation Finance Authority Airport
Facilities Lease Revenue Bonds (Series A) 5.400 11/1/2006 555,976
570,000 Indiana Transportation Finance Authority Highway
Revenue Bonds (Series A) (AMBAC Insured)(b) 5.750 6/1/2012 666,626
985,000 Indiana Transportation Finance Authority Highway
Revenue Bonds (Series A) (MBIA/IBC Insured)(b) 7.250 6/1/2015 1,219,814
250,000 Indiana Transportation Finance Authority Highway
Revenue Bonds (Series A) 6.800 12/1/2016 306,300
3,565,000 Indiana Transportation Finance Authority Highway
Unrefunded Revenue Bonds (Series A) (MBIA/IBC Insured) 7.250 6/1/2015 4,507,336
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 2,545,000
- -------------------------------------------------------------------------------------------------------------------------
Total Indiana 11,675,986
=========================================================================================================================
Kansas (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
4,140,000 Kansas City, Kansas Utility System Unrefunded
Revenue Bonds (FGIC Insured)(b) 6.375 9/1/2023 4,404,546
1,250,000 Sedgwick and Shawnee Counties, Kansas Single Family
Mortgage Revenue Bonds (Series A-2) (GNMA Insured) 6.700 6/1/2029 1,326,400
2,300,000 University of Kansas Hospital Authority Health
Facilities Revenue Bond 5.500 9/1/2022 2,332,637
- -------------------------------------------------------------------------------------------------------------------------
Total Kansas 8,063,583
=========================================================================================================================
Louisiana (2.4%)
- -------------------------------------------------------------------------------------------------------------------------
2,150,000 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 2,299,060
830,000 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 885,029
1,310,000 Louisiana Housing Finance Agency Single Family
Mortgage Revenue Bonds (Series A-2)
(GNMA/FNMA/FHLMC Insured) (Subject to 'AMT') 7.800 12/1/2026 1,397,966
780,000 Louisiana Housing Finance Agency Single Family
Mortgage Revenue Bonds (Series D-2)
(GNMA/FNMA Insured) (Subject to 'AMT') 7.050 6/1/2031 832,962
3,000,000 Louisiana Public Facilities Authority Hospital
Revenue Bonds (Lake Charles Memorial)
(AMBAC/TCRS Insured) 8.625 12/1/2030 3,854,370
2,605,000 Regional Transportation Authority, Louisiana
Sales Tax Revenue Bonds (Series A) (FGIC Insured) 8.000 12/1/2012 3,451,104
4,200,000 Tobacco Settlement Financing Corporation,
Louisiana Revenue Bonds (Series 2001-B) 5.500 5/15/2030 3,426,780
- -------------------------------------------------------------------------------------------------------------------------
Total Louisiana 16,147,271
=========================================================================================================================
Maryland (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
1,550,000 Maryland State Economic Development Corporation
Student Housing Revenue Bonds (Sheppard Pratt)
(ACA Insured) 6.000 7/1/2033 1,635,886
340,000 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 346,106
425,000 Westminster, Maryland Education Facilities
Revenue Bond (McDaniel College) 5.500 4/1/2027 422,782
- -------------------------------------------------------------------------------------------------------------------------
Total Maryland 2,404,774
=========================================================================================================================
Massachusetts (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
4,935,000 Massachusetts State Construction Lien General
Obligation Bonds (Series A) (FGIC-TCRS) 5.250 1/1/2013 5,461,466
725,000 Massachusetts State Development Finance Agency
Revenue Bonds (Devens Electric Systems) 5.625 12/1/2016 770,298
1,000,000 Massachusetts State Health and Educational Facilities
Authority Revenue Bonds (Partners Healthcare System)
(Series C) 6.000 7/1/2016 1,101,460
1,170,000 Westfield, Massachusetts General Obligation Bonds
(FGIC Insured)(b) 6.500 5/1/2014 1,425,657
- -------------------------------------------------------------------------------------------------------------------------
Total Massachusetts 8,758,881
=========================================================================================================================
Michigan (3.4%)
- -------------------------------------------------------------------------------------------------------------------------
515,000 Chelsea, Michigan Economic Development
Corporation Obligation Revenue Bonds
(United Methodist Retirement) 4.800 11/15/2005 509,129
545,000 Chelsea, Michigan Economic Development
Corporation Obligation Revenue Bonds
(United Methodist Retirement) 4.900 11/15/2006 534,498
3,965,000 Chelsea, Michigan Economic Development
Corporation Obligation Revenue Bonds
(United Methodist Retirement) 5.400 11/15/2027 3,476,234
1,350,000 Dickinson County, Michigan Healthcare System
Hospital Revenue Bonds 5.500 11/1/2013 1,358,762
250,000 Dickinson County, Michigan Healthcare System
Hospital Revenue Bonds 5.700 11/1/2018 243,230
2,000,000 East Lansing, Michigan Building Authority
General Obligation Bonds 5.700 4/1/2020 2,288,820
1,000,000 Grand Valley, Michigan State University
Revenue Bonds (MBIA Insured) 5.250 10/1/2017 1,074,340
260,000 Hillsdale, Michigan Hospital Finance Authority
Revenue Bonds (Hillsdale Community Health Center) 4.700 5/15/2004 259,314
135,000 Hillsdale, Michigan Hospital Finance Authority
Revenue Bonds (Hillsdale Community Health Center) 4.800 5/15/2005 134,000
1,380,000 Michigan Public Power Agency Revenue Bonds
(Combustion Turbine #1 Project) (Series A)
(AMBAC Insured) 5.250 1/1/2016 1,500,239
950,000 Michigan State Hospital Finance Authority
Revenue Bonds (Hackley Hospital) (Series A) 4.800 5/1/2005 983,858
6,580,000 Michigan State Hospital Finance Authority
Revenue Bonds (Oakwood Obligated Group)(c) 5.000 11/1/2009 7,088,963
990,000 Summit Academy North Michigan Public School
Academy Certificates of Participation 6.550 7/1/2014 1,009,325
690,000 Summit Academy North Michigan Public School
Academy Certificates of Participation 8.375 7/1/2030 723,023
1,000,000 Trenton, Michigan Building Authority General
Obligation Bonds (AMBAC Insured) 5.600 10/1/2019 1,108,420
- -------------------------------------------------------------------------------------------------------------------------
Total Michigan 22,292,155
=========================================================================================================================
Minnesota (3.1%)
- -------------------------------------------------------------------------------------------------------------------------
375,000 Chaska, Minnesota Economic Development
Authority School Facilities Lease Revenue Bonds
(Independent School District #112) (Series A) 5.125 12/1/2010 405,465
4,000,000 Lakeville, Minnesota Independent School
District #194 (Series B) (FGIC Insured) Zero Coupon 2/1/2016 2,281,440
300,000 Scott County, Minnesota Housing and
Redevelopment Authority Facilities Lease
Revenue Bonds (Workforce Center Project) 5.000 2/1/2017 308,016
$525,000 Scott County, Minnesota Housing and
Redevelopment Authority Facilities Lease
Revenue Bonds (Workforce Center Project) 5.000 2/1/2018 536,980
10,530,000 Southern Minnesota Municipal Power Agency
Power Supply System Revenue Bonds (Series A)
(AMBAC Insured)(e) 5.000 1/1/2011 11,649,023
5,000,000 White Earth Band of Chippewa Indians, Minnesota
Revenue Bonds (Series A) (ACA Insured) 7.000 12/1/2011 5,506,300
- -------------------------------------------------------------------------------------------------------------------------
Total Minnesota 20,687,224
=========================================================================================================================
Missouri (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
785,000 Missouri State Development Finance Board
Infrastructure Facilities Revenue Bonds (Eastland
Center Project Phase II Series B) 5.875 4/1/2017 836,041
500,000 Missouri State Development Finance Board
Infrastructure Facilities Revenue Bonds (Eastland
Center Project Phase II Series B) 6.000 4/1/2021 530,550
1,000,000 Missouri State Environmental Improvement and
Energy Resources Authority Water Pollution
Revenue Bonds (Series A) 5.250 1/1/2018 1,084,150
3,375,000 Missouri State Health and Educational Facilities
Authority Revenue Bonds (Bethesda Health) (Series A)(b) 7.500 8/15/2012 3,611,993
590,000 Missouri State Housing Development Commission
Single Family Mortgage Revenue Bonds (Series B-1)
(GNMA/FNMA Insured) (Subject to 'AMT') 7.450 9/1/2031 619,335
940,000 Missouri State Housing Development Commission
Single Family Mortgage Revenue Bonds (Series C-1)
(GNMA/FNMA Insured) (Subject to 'AMT') 7.150 3/1/2032 985,543
- -------------------------------------------------------------------------------------------------------------------------
Total Missouri 7,667,612
=========================================================================================================================
Montana (0.8%)
- -------------------------------------------------------------------------------------------------------------------------
160,000 Montana State Board of Housing Single Family
Mortgage Revenue Bonds (Series A-1) 6.000 6/1/2016 167,426
620,000 Montana State Board of Housing Single Family
Mortgage Revenue Bonds (Series A-2) (Subject to 'AMT') 6.250 6/1/2019 646,356
1,340,000 Montana State Board of Regents Revenue Bonds
(Higher Education-University of Montana)
(Series F) (MBIA Insured) 5.750 5/15/2016 1,526,662
3,000,000 Montana State Health Facilities Authority
Revenue Bonds
(Hillcrest Senior Living Project) 7.375 6/1/2030 3,177,000
- -------------------------------------------------------------------------------------------------------------------------
Total Montana 5,517,444
=========================================================================================================================
Nebraska (1.6%)
- -------------------------------------------------------------------------------------------------------------------------
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 512,040
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 179,398
2,500,000 Nebraska Public Power District Revenue Bonds
(Series B) (AMBAC Insured) 5.000 1/1/2013 2,743,125
1,675,000 Omaha, Nebraska Special Assessment Bonds
(Riverfront Redevelopment Project) (Series A) 5.500 2/1/2015 1,874,794
5,000,000 University of Nebraska Revenue Bonds
(Lincoln Student Fees & Facilities) (Series B)(c) 5.000 7/1/2023 5,112,700
- -------------------------------------------------------------------------------------------------------------------------
Total Nebraska 10,422,057
=========================================================================================================================
Nevada (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Washoe County, Nevada General Obligation Bonds
(Reno-Sparks Convention)(Series A) (FSA Insured)(b) 6.400 7/1/2029 2,986,800
- -------------------------------------------------------------------------------------------------------------------------
Total Nevada 2,986,800
=========================================================================================================================
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 2,380,480
5,000,000 New Jersey Transportation Trust Fund Authority
Revenue Bond (Transportation System) (Series A)
(FSA Insured) 5.500 12/15/2016 5,698,000
4,570,000 Tobacco Settlement Authority, New Jersey Tobacco
Settlement Revenue Bonds 5.375 6/1/2018 3,888,659
- -------------------------------------------------------------------------------------------------------------------------
Total New Jersey 11,967,139
=========================================================================================================================
New Mexico (1.0%)
- -------------------------------------------------------------------------------------------------------------------------
1,000,000 Jicarilla, New Mexico Apache Nation Revenue Bonds 5.500 9/1/2023 1,026,600
2,525,000 New Mexico Mortgage Finance Authority
Revenue Bonds (Series F) (GNMA/FNMA Insured) 7.000 1/1/2026 2,791,034
595,000 New Mexico Mortgage Finance Authority Single
Family Mortgage Capital Appreciation Revenue
Bonds (Series D-2) (Subject to 'AMT') Zero Coupon 9/1/2019 440,276
2,280,000 New Mexico Mortgage Finance Authority Single
Family Mortgage Revenue Bonds (Series C-2)
(GNMA/FNMA Insured) (Subject to 'AMT') 6.950 9/1/2031 2,470,038
- -------------------------------------------------------------------------------------------------------------------------
Total New Mexico 6,727,948
=========================================================================================================================
New York (9.7%)
- -------------------------------------------------------------------------------------------------------------------------
3,500,000 Metropolitan Transportation Authority, New York
Revenue Bonds (Series A) (FGIC Insured) 5.000 11/15/2025 3,533,600
3,000,000 Metropolitan Transportation Authority, New York
Transportation Facilities Revenue Bonds (Series A) 5.500 7/1/2017 3,345,210
13,000,000 New York City Transitional Finance Authority
(Future Tax Secured) (Series B) 5.250 2/1/2029 14,259,960
1,100,000 New York Counties Tobacco Trust Settlement
Revenue Bonds 5.800 6/1/2023 1,105,522
4,000,000 New York State Dormitory Authority Revenue Bonds
(Series B)(f) 5.250 5/15/2012 4,326,160
2,000,000 New York State Dormitory Authority Revenue Bonds
(State University Educational Facilities) (Series A) 7.500 5/15/2013 2,553,020
5,000,000 New York State Dormitory Authority Revenue Bonds
(State University Educational Facilities) (Series A)(e) 5.875 5/15/2017 5,761,650
2,000,000 New York State Local Government Assistance
Corporation
Revenue Bonds (Series E) (MBIA/IBC Insured) 5.250 4/1/2016 2,223,460
1,900,000 New York State Mortgage Agency Revenue Bonds
(Series 26) 5.350 10/1/2016 1,916,663
3,000,000 New York State Thruway Authority General
Revenue Bonds (Series E) 5.000 1/1/2016 3,167,250
10,000,000 New York State Urban Development Corporation
Revenue Bonds (Correctional and Youth Facilities)
(Series A) 5.000 1/1/2017 10,732,700
4,500,000 New York, New York City Municipal Transitional
Finance Authority Revenue Bonds (Series A)(c,f) 5.500 11/1/2011 5,062,410
3,000,000 New York, New York City Municipal Transitional
Finance Authority Revenue Bonds (Series A) 5.375 11/15/2021 3,191,490
3,000,000 New York, New York General Obligation Bonds
(Series H) (FSA/CR Insured) 5.250 3/15/2016 3,232,860
- -------------------------------------------------------------------------------------------------------------------------
Total New York 64,411,955
=========================================================================================================================
North Carolina (2.2%)
- -------------------------------------------------------------------------------------------------------------------------
1,170,000 Fayetteville, North Carolina Public Works
Commission Revenue Bonds (FSA Insured)(b) 5.125 3/1/2017 1,300,677
1,475,000 North Carolina Eastern Municipal Power Agency
Power System Revenue Bonds (Series A)(b) 6.000 1/1/2026 1,721,369
4,000,000 North Carolina Eastern Municipal Power Agency
Power System Revenue Bonds 5.375 1/1/2017 4,142,520
175,000 North Carolina Eastern Municipal Power Agency
Power System Revenue Bonds (Series B) 6.000 1/1/2006 187,960
1,960,000 North Carolina Eastern Municipal Power Agency
Power System Revenue Bonds (Series B) 5.500 1/1/2021 1,960,608
2,000,000 North Carolina Eastern Municipal Power Agency
Power System Revenue Bonds (Series D) 6.750 1/1/2026 2,187,780
1,250,000 North Carolina Municipal Power Agency #1 Catawba
Electric Revenue Bonds (Series B) 6.250 1/1/2007 1,384,512
North Carolina -- continued
250,000 North Carolina Municipal Power Agency #1 Catawba
Electric Revenue Bonds (Series B) 6.500 1/1/2009 285,532
610,000 North Carolina Municipal Power Agency #1 Catawba
Electric Revenue Bonds (Series B) 6.375 1/1/2013 677,515
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 1,031,230
- -------------------------------------------------------------------------------------------------------------------------
Total North Carolina 14,879,703
=========================================================================================================================
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 3,298,718
- -------------------------------------------------------------------------------------------------------------------------
Total North Dakota 3,298,718
=========================================================================================================================
Ohio (1.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,700,000 Cincinnati, Ohio General Obligation Bonds 5.375 12/1/2019 1,835,133
2,000,000 Montgomery County, Ohio Hospital Revenue Bonds
(Kettering Medical Center) 6.750 4/1/2018 2,124,620
2,500,000 Montgomery County, Ohio Hospital Revenue Bonds
(Kettering Medical Center) 6.750 4/1/2022 2,633,375
2,055,000 Ohio Housing Finance Agency Mortgage Residential
Revenue Bonds (Series A-1) (GNMA Insured)
(Subject to 'AMT') 5.750 9/1/2026 2,091,600
- -------------------------------------------------------------------------------------------------------------------------
Total Ohio 8,684,728
=========================================================================================================================
Oklahoma (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
300,000 Oklahoma Housing Finance Agency Single Family
Mortgage Revenue Bonds (Series C-2) (Subject to 'AMT') 7.550 9/1/2028 322,983
550,000 Oklahoma Housing Finance Agency Single Family
Mortgage Revenue Bonds (Series D-2)
(GNMA/FNMA Insured) (Subject to 'AMT') 7.100 9/1/2028 595,226
2,900,000 Payne County, Oklahoma Economic Development
Authority Student Housing Revenue Bonds
(Collegiate Housing Foundation) (Series A)(b) 6.375 6/1/2030 3,490,962
- -------------------------------------------------------------------------------------------------------------------------
Total Oklahoma 4,409,171
=========================================================================================================================
Oregon (0.7%)
- -------------------------------------------------------------------------------------------------------------------------
550,000 Forest Grove, Oregon Revenue Bonds (Campus
Improvement -- Pacific University) 6.000 5/1/2015 622,710
3,500,000 Klamath Falls, Oregon Inter-Community Hospital
Authority Revenue Bonds (Gross-Merle West Medical
Center Project)(b) 7.100 9/1/2024 3,741,325
- -------------------------------------------------------------------------------------------------------------------------
Total Oregon 4,364,035
=========================================================================================================================
Pennsylvania (2.5%)
- -------------------------------------------------------------------------------------------------------------------------
2,480,000 Allegheny County, Pennsylvania Redevelopment
Authority Tax Increment Tax Allocation Bonds
(Waterfront Project) (Series B)(g) 6.000 12/15/2010 2,766,514
2,415,000 Allegheny County, Pennsylvania Redevelopment
Authority Tax Increment Tax Allocation Bonds
(Waterfront Project) (Series C)(g) 6.550 12/15/2017 2,702,820
3,845,000 Carbon County, Pennsylvania Industrial Development
Authority Revenue Bonds (Panther Creek Partners
Project) (Subject to 'AMT') 6.650 5/1/2010 4,124,570
2,000,000 Cornwall Lebanon, Pennsylvania School District
Capital Appreciation General Obligation Bonds
(FSA Insured) Zero Coupon 3/15/2016 1,134,680
1,520,000 Cornwall Lebanon, Pennsylvania School District
Capital Appreciation General Obligation Bonds
(FSA Insured) Zero Coupon 3/15/2017 811,999
1,000,000 Lancaster County, Pennsylvania, Hospital Authority
Revenue Bonds 5.500 3/15/2026 988,540
2,000,000 Lebanon County, Pennsylvania Good Samaritan
Hospital Authority Revenue Bonds (Good
Samaritan Hospital Project) 6.000 11/15/2018 2,008,300
435,000 Montgomery County, Pennsylvania Higher Education
and Health Authority Revenue Bonds (Foulkeways at
Gwynedd Project) 6.750 11/15/2024 455,945
1,880,000 Montgomery County, Pennsylvania Higher Education
and Health Authority Revenue Bonds (Foulkeways at
Gwynedd Project) 6.750 11/15/2030 1,959,524
- -------------------------------------------------------------------------------------------------------------------------
Total Pennsylvania 16,952,892
=========================================================================================================================
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 2,087,380
- -------------------------------------------------------------------------------------------------------------------------
Total Puerto Rico 2,087,380
=========================================================================================================================
South Carolina (1.7%)
- -------------------------------------------------------------------------------------------------------------------------
3,320,000 Piedmont, South Carolina Municipal Power Agency
Electric Revenue Bonds (Series A)(b) 6.550 1/1/2016 3,348,917
2,000,000 South Carolina Jobs Economic Development
Authority Hospital Facilities Revenue Bonds
(Palmetto Health Alliance) (Series C) 6.875 8/1/2027 2,133,060
5,000,000 South Carolina State Public Service Authority
Revenue Referendum (Series D) (FSA Insured) 5.000 1/1/2020 5,221,400
500,000 South Carolina Transportation Infrastructure
Bank Revenue Bonds (Series A) (MBIA Insured) 5.500 10/1/2007 565,420
- -------------------------------------------------------------------------------------------------------------------------
Total South Carolina 11,268,797
=========================================================================================================================
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 2,080,120
- -------------------------------------------------------------------------------------------------------------------------
Total South Dakota 2,080,120
=========================================================================================================================
Tennessee (2.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,000,000 Carter County Industrial Development Board
Revenue Bonds 3.200 10/1/2007 2,012,840
2,000,000 Memphis-Shelby County, Tennessee Airport
Authority Special Facilities and Project Revenue
Bonds (Federal Express Corporation) 5.350 9/1/2012 2,153,800
2,000,000 Memphis-Shelby County, Tennessee Airport
Authority Special Facilities Revenue Bonds
(Federal Express Corporation) 5.050 9/1/2012 2,110,060
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 1,694,910
4,155,000 Metropolitan Government Nashville and Davidson
County, Tennessee Industrial Development Board
Revenue Bonds (Series A) (GNMA Insured) 6.625 3/20/2036 4,628,836
640,000 Tennergy Corporation Tennessee Gas Revenue Bonds
(MBIA Insured) 4.125 6/1/2009 681,978
150,000 Tennessee Energy Acquisition Corporation Gas
Revenue Bonds (Series A) (AMBAC Insured) 5.000 9/1/2007 165,543
- -------------------------------------------------------------------------------------------------------------------------
Total Tennessee 13,447,967
=========================================================================================================================
Texas (12.7%)
- -------------------------------------------------------------------------------------------------------------------------
1,250,000 Abilene, Texas Waterworks and Sewer System
General Obligation Bonds (Series B)(f) 3.200 8/15/2004 1,247,150
1,250,000 Abilene, Texas Waterworks and Sewer System
General Obligation Bonds (Series B)(f) 3.540 8/15/2004 1,247,175
2,000,000 Alliance Airport, Texas Income Authority Special
Facilities Revenue Bond (Federal Express Corporation
Project) (Subject to 'AMT')(g) 6.375 4/1/2021 2,090,960
2,000,000 Amarillo, Texas Health Facilities Corporation
Revenue Bonds (Baptist St. Anthony's Hospital
Corporation) (FSA Insured) 5.500 1/1/2017 2,251,640
750,000 Arlington, Texas General Obligation Bonds 5.375 8/15/2016 814,350
1,055,000 Arlington, Texas General Obligation Bonds 5.500 8/15/2019 1,140,244
1,250,000 Austin, Texas Utility System Revenue Bonds
(FGIC Insured)(g) 6.000 11/15/2013 1,458,175
2,265,000 Bexar County, Texas Housing Finance Corporation
Multi-Family Housing Revenue Bonds (American
Opty-Waterford Apartments) (Series A1)(g) 7.000 12/1/2036 2,300,787
$1,930,000 Bexar County, Texas Housing Finance Corporation
Multi-Family Housing Revenue Bonds (Dymaxion and
Marrach Park Apartments) (Series A) (MBIA Insured)(g) 6.000 8/1/2023 2,042,712
2,000,000 Bexar County, Texas Housing Finance Corporation
Multi-Family Housing Revenue Bonds (Nob Hill
Apartments) (Series A) 6.000 6/1/2031 2,027,500
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 1,949,207
1,000,000 Bluebonnet Trails Community Mental Health and
Mental Retardation Revenue Bonds(g) 6.125 12/1/2016 1,034,450
3,950,000 Colorado River, Texas Municipal Water District
Revenue Bonds (MBIA Insured) 5.000 1/1/2014 4,159,192
500,000 Corpus Christi, Texas General Obligation Bonds
(Series A) (FSA Insured) 5.000 3/1/2012 547,045
1,375,000 Deer Park, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured) 5.000 2/15/2013 1,494,474
1,635,000 Denton, Texas Independent School District
General Obligation Bonds(f) 3.450 1/31/2005 1,673,145
3,210,000 Denton, Texas Utility System Revenue Bonds
(Series A) (FSA Insured) 5.250 12/1/2015 3,518,898
1,445,000 Frisco, Texas Independent School District General
Obligation Bonds (PSF/GTD Insured) 6.250 8/15/2017 1,684,827
7,000,000 Harris County, Houston, Texas General Obligation
Bonds (MBIA Insured) Zero Coupon 8/15/2024 2,272,270
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 1,795,035
6,000,000 Houston, Texas Airport System Revenue Bonds
(FSA Insured) 5.000 7/1/2027 6,034,020
5,000,000 Houston, Texas Water and Sewer System Revenue
Bonds (Series A) (FSA Insured) 5.750 12/1/2032 5,682,500
1,000,000 Lower Colorado River Authority, Texas Revenue Bonds
(Series A) 5.875 5/15/2015 1,139,490
3,770,000 Mesquite, Texas Independent School District General
Obligation Bonds (Series A) (PSF/GTD Insured)(b) 6.000 2/15/2020 4,240,194
575,000 Nueces County, Texas Housing Finance Corporation
Multi-Family Housing Revenue Bonds (Dolphins Landing
Apartments Project) (Series A) 6.250 7/1/2010 611,444
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 1,964,722
1,000,000 Panhandle, Texas Regional Housing Finance
Revenue Bonds (Series A) 6.250 3/1/2010 1,075,930
1,000,000 Ridge Parc Development Corporation, Texas
Multifamily Revenue Bonds (GNMA Insured) 6.100 6/20/2033 1,094,760
2,795,000 Ridge Parc Development Corporation, Texas
Multifamily Revenue Bonds (GNMA Insured) 6.150 11/20/2041 3,031,233
1,365,000 San Antonio, Texas General Obligation Bonds
(General Improvement) 5.250 2/1/2014 1,479,346
1,000,000 San Antonio, Texas Water Revenue Bonds (FSA Insured) 5.500 5/15/2018 1,097,120
1,000,000 San Antonio, Texas Water Revenue Bonds (FSA Insured) 5.500 5/15/2019 1,094,110
1,000,000 San Antonio, Texas Water Revenue Bonds (FSA Insured) 5.500 5/15/2020 1,084,390
1,180,000 South San Antonio, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured) 6.000 8/15/2017 1,345,471
1,250,000 South San Antonio, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured) 6.000 8/15/2018 1,418,250
1,275,000 South San Antonio, Texas Independent School District
General Obligation Bonds (PSF/GTD Insured) 6.000 8/15/2019 1,443,032
1,410,000 Tarrant County, Texas College District General
Obligation Bonds 5.375 2/15/2013 1,575,393
1,040,000 Tarrant County, Texas Housing Finance Corporation
Multi-Family Revenue Bonds (Series A) 6.000 6/1/2031 922,854
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 2,409,520
315,000 Westlake, Texas General Obligation Bonds 6.500 5/1/2013 363,088
350,000 Westlake, Texas General Obligation Bonds 6.500 5/1/2015 398,458
335,000 Westlake, Texas General Obligation Bonds 6.500 5/1/2017 376,376
1,650,000 Westlake, Texas General Obligation Bonds 5.750 5/1/2024 1,703,064
2,000,000 Westlake, Texas General Obligation Bonds 5.800 5/1/2032 2,060,920
3,280,000 Wylie, Texas Independent School District Unrefunded
General Obligation Bonds (PSF/GTD Insured) 7.000 8/15/2024 3,966,865
- -------------------------------------------------------------------------------------------------------------------------
Total Texas 84,361,786
=========================================================================================================================
Utah (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
1,605,000 Intermountain Power Agency, Utah Power Supply
Revenue Bonds (Series A) (AMBAC/TCRS Insured)(b) 5.500 7/1/2020 1,645,542
440,000 Intermountain Power Agency, Utah Power Supply
Revenue Bonds (Series B)(b) 5.250 7/1/2017 451,079
585,000 Intermountain Power Agency, Utah Power Supply
Revenue Bonds (Series B) (MBIA/IBC Insured)(b) 5.000 7/1/2016 586,340
- -------------------------------------------------------------------------------------------------------------------------
Total Utah 2,682,961
=========================================================================================================================
Virginia (0.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Fairfax County, Virginia Industrial Development
Authority Revenue Bonds (Inova Health Systems Project) 5.250 8/15/2019 2,662,850
1,355,000 Riverside, Virginia Regional Jail Authority Jail
Facilities Revenue Bonds (MBIA Insured)(b) 5.875 7/1/2014 1,484,606
1,130,000 Riverside, Virginia Regional Jail Authority Jail
Facilities Unrefunded Revenue Bonds (MBIA Insured)(b) 5.875 7/1/2014 1,238,084
- -------------------------------------------------------------------------------------------------------------------------
Total Virginia 5,385,540
=========================================================================================================================
Washington (4.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,060,000 Clark and Skamania Counties, Washington School
District #112-6 Washougal General Obligation Bonds
(FGIC Insured)(b) 6.000 12/1/2019 2,448,228
1,000,000 Energy Northwest, Washington Electric Revenue Bonds
(Columbia Generating) (Series A) (MBIA Insured) 5.750 7/1/2018 1,114,040
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 1,066,800
5,000,000 King County, Washington Sewer Revenue Bonds
(Series B) (FSA Insured) 5.500 1/1/2013 5,592,250
2,000,000 Washington State General Obligation Bonds
(Motor Vehicle Fuel Tax) 5.000 9/1/2007 2,207,020
5,000,000 Washington State General Obligation Bonds (Series A) 6.750 2/1/2015 6,116,400
1,700,000 Washington State Health Care Facilities Authority
Revenue Bonds (Kadlec Medical Center) 6.000 12/1/2030 1,844,381
2,000,000 Washington State Health Care Facilities Authority
Revenue Bonds (Swedish Health Services)
(AMBAC Insured) 5.125 11/15/2018 2,118,240
2,975,000 Washington State Housing Finance Commission
Multi-Family Mortgage Revenue Bonds (Pooled Loan
Program) (Subject to 'AMT') 6.300 1/1/2021 3,200,386
1,000,000 Washington State Housing Finance Commission
Nonprofit Housing Revenue Bonds (Crista Ministries
Projects) (Series A) 5.350 7/1/2014 1,023,070
- -------------------------------------------------------------------------------------------------------------------------
Total Washington 26,730,815
=========================================================================================================================
Wisconsin (1.4%)
- -------------------------------------------------------------------------------------------------------------------------
1,105,000 Monroe, Wisconsin School District General
Obligation Bonds (AMBAC Insured)(b) 6.875 4/1/2014 1,358,599
1,500,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Aurora Health Care)
(Series B) 5.500 2/15/2015 1,498,470
1,000,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Eagle River Memorial
Hospital, Inc. Project) 5.750 8/15/2020 1,108,500
1,000,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Franciscan Sisters Christian)
(Series A) 5.500 2/15/2018 1,003,200
2,000,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Marshfield Clinic) (Series B) 6.000 2/15/2025 2,003,840
2,000,000 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Watertown Memorial
Hospital, Inc.) 5.500 8/15/2029 2,054,800
- -------------------------------------------------------------------------------------------------------------------------
Total Wisconsin 9,027,409
=========================================================================================================================
Wyoming (1.0%)
- -------------------------------------------------------------------------------------------------------------------------
5,825,000 Wyoming State Farm Loan Board Capital Facilities
Revenue Bonds 5.750 10/1/2020 6,695,955
- -------------------------------------------------------------------------------------------------------------------------
Total Wyoming 6,695,955
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $593,706,360) 635,496,609
=========================================================================================================================
Principal
Amount Short-Term Investments (4.4%)(f) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$405,000 Berkeley County, South Carolina Pollution Control
Revenue Bonds (Amoco Chemical Company Project) 1.150% 11/3/2003 $405,000
1,200,000 Boston Massachusetts Water and Sewer Community
Revenue Bond (Series A) (LOC-State Street) 1.000 11/6/2003 1,200,000
2,195,000 Hammond, Indiana Pollution Control Revenue Bonds
(Amoco Oil Company Project) 1.150 11/3/2003 2,195,000
2,185,000 Harris County, Texas Health Facilities Development
Authority Revenue Bonds (Texas Childrens Hospital) 1.150 11/3/2003 2,185,000
1,385,000 Hurley, New Mexico Pollution Control Revenue Bonds
(Kennecott Santa Fe Project-BP PLC) 1.150 11/3/2003 1,385,000
1,100,000 Illinois Development Finance Authority Revenue Bond
(Amoco Project) 1.150 11/3/2003 1,100,000
9,800,000 Indiana State Educational Facilities Authority
Revenue Bonds (University of Notre Dame) 0.950 11/6/2003 9,800,000
1,930,000 Michigan State Strategic Fund Pollution Control
Revenue Bonds (Consumers Power Project)
(AMBAC Insured) 1.150 11/3/2003 1,930,000
3,400,000 Port Authority of New York and New Jersey
Special Obligation Revenue Bonds (Versatile
Structure) (LOC-Bayerische Landesbank)
(MBIA Insured) (Series B-1) 1.150 11/3/2003 3,400,000
1,390,000 St. Lucie County, Florida Pollution Control Revenue
Bond Florida Power and Light Project 1.180 11/3/2003 1,390,000
465,000 Salt Lake, Utah County Pollution Control Revenue
Bonds (Service Station Holding Project-BP plc) 1.150 11/3/2003 465,000
400,000 Southwest Higher Education Authority Revenue
Bonds (Southern Methodist University) 1.150 11/3/2003 400,000
3,740,000 Valdez, Alaska Marine Term Revenue Bond
(BP Pipeline, Inc.) 1.150 11/3/2003 3,740,000
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 29,595,000
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $623,301,360) $665,091,609
=========================================================================================================================
(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) Denotes investments issued on a when-issued basis.
(d) Denotes step coupon bonds for which the current
interest rate and next scheduled reset date are
shown.
(e) At October 31, 2003, all or a portion of the denoted
securities, valued at $11,846,135, were pledged as
the initial margin deposit or earmarked as collateral
to cover open financial futures contracts as follows:
Notional
Number of Expiration Market Principal Unrealized
Type Contracts Date Position Value Amount Gain
- -------------------------------------------------------------------------------------------------------------------------
U.S. Treasury
Bond Futures 100 December 2003 Short $11,229,688 $11,214,666 $15,022
(f) Denotes variable rate obligations for which the
current yield and next scheduled reset date are
shown.
(g) Earmarked as collateral for options, futures or
longer settling trades as discussed in the notes to
the financial statements.
The accompanying notes to the financial statements
are an integral part of this schedule.
The AAL Bond Fund
Schedule of Investments as of October 31, 2003(a) (unaudited)
Principal
Amount Long-Term Fixed Income (82.6%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities (6.7%)
- -------------------------------------------------------------------------------------------------------------------------
$2,000,000 Capital Auto Receivables Asset Trust(c) 1.140% 11/15/2003 $1,999,108
12,500,000 Chase Credit Card Master Trust(b,c) 1.250 11/15/2003 12,534,088
4,500,000 Citibank Credit Card Issuance Trust(b,c) 1.259 11/7/2003 4,508,469
1,722,711 EQCC Home Equity Loan Trust 6.930 2/15/2029 1,747,383
3,750,000 Federal Home Loan Mortgage Corporation 3.158 12/27/2029 3,792,206
11,000,000 GMAC Mortgage Corporation Loan Trust(b,c) 1.250 11/25/2003 11,002,321
3,133,174 Green Tree Financial Corporation 7.650 10/15/2027 3,319,567
837,370 Green Tree Home Improvement Loan Trust 8.100 9/15/2027 839,524
4,000,000 Toyota Auto Receivables Owner Trust(c) 1.140 11/15/2003 3,997,712
46,896 Vanderbilt Mortgage Finance Corporation 8.045 7/7/2012 46,884
- -------------------------------------------------------------------------------------------------------------------------
Total Asset-Backed Securities 43,787,262
=========================================================================================================================
Basic Materials (2.1%)
- -------------------------------------------------------------------------------------------------------------------------
3,000,000 Codelco, Inc. 5.500 10/15/2013 3,013,575
3,500,000 Noranda, Inc. 6.000 10/15/2015 3,544,222
1,000,000 Norske Skogindustrier ASA 6.125 10/15/2015 1,003,653
2,445,000 Phelps Dodge Corporation 8.750 6/1/2011 2,913,993
1,300,000 Weyerhaeuser Company 6.125 3/15/2007 1,405,832
2,000,000 Weyerhaeuser Company 5.250 12/15/2009 2,062,578
- -------------------------------------------------------------------------------------------------------------------------
Total Basic Materials 13,943,853
=========================================================================================================================
Capital Goods (2.7%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Boeing Capital Corporation 6.100 3/1/2011 2,660,402
3,000,000 Bombardier Capital, Inc.(b) 6.125 6/29/2006 3,180,000
1,750,000 Bombardier, Inc. 6.750 5/1/2012 1,859,375
3,400,000 Raytheon Company 6.000 12/15/2010 3,601,032
1,900,000 Sealed Air Corporation 5.375 4/15/2008 1,974,771
2,200,000 Waste Management, Inc. 7.125 10/1/2007 2,467,593
1,750,000 Waste Management, Inc. 6.875 5/15/2009 1,964,168
- -------------------------------------------------------------------------------------------------------------------------
Total Capital Goods 17,707,341
=========================================================================================================================
Commercial Mortgage-Backed Securities (7.2%)
- -------------------------------------------------------------------------------------------------------------------------
5,000,000 Banc of America Commercial Mortgage, Inc.(b) 6.085 6/11/2035 5,456,795
3,000,000 Banc of America Commercial Mortgage, Inc.(b) 5.118 7/11/2043 3,081,066
1,509,944 CAM Commercial Mortgage Corporation 4.834 11/14/2036 1,572,389
4,000,000 First Union National Bank Commercial Mortgage
Trust Pass-Through Certificates(b) 7.390 12/15/2031 4,626,160
3,642,447 First Union-Lehman Brothers-Bank of America
Commercial Mortgage Trust 6.280 11/18/2035 3,836,874
6,000,000 GMAC Commercial Mortgage Securities, Inc.(b) 6.175 5/15/2033 6,614,064
2,600,000 LB-UBS Commercial Mortgage Trust 3.323 3/15/2027 2,570,443
8,000,000 LB-UBS Commercial Mortgage Trust 3.086 5/15/2027 7,789,544
5,500,000 Morgan Stanley Capital I, Inc. 6.210 11/15/2031 6,052,915
5,000,000 Nationslink Funding Corporation 6.476 8/20/2030 5,556,615
- -------------------------------------------------------------------------------------------------------------------------
Total Commercial Mortgage-Backed Securities 47,156,865
=========================================================================================================================
Communications Services (5.6%)
- -------------------------------------------------------------------------------------------------------------------------
3,000,000 AT&T Wireless Services, Inc.(b) 7.500 5/1/2007 3,365,007
1,300,000 AT&T Wireless Services, Inc.(b) 7.875 3/1/2011 1,485,487
1,000,000 AT&T Wireless Services, Inc. 8.125 5/1/2012 1,159,874
2,000,000 CenturyTel, Inc.(b) 8.375 10/15/2010 2,420,788
2,000,000 Citizens Communications Company(b) 7.625 8/15/2008 2,295,704
2,250,000 Clear Channel Communications, Inc.(b) 4.400 5/15/2011 2,163,272
2,000,000 Comcast Corporation(b) 5.500 3/15/2011 2,064,424
4,000,000 Continental Cablevision, Inc.(b) 8.875 9/15/2005 4,443,008
2,000,000 Deutsche Telekom International Finance BV(b) 5.250 7/22/2013 1,987,672
2,000,000 GTE North, Inc.(b) 6.375 2/15/2010 2,180,448
1,000,000 Intelsat, Ltd. 5.250 11/1/2008 1,010,470
2,500,000 Sprint Capital Corporation 7.625 1/30/2011 2,750,538
1,500,000 Sprint Capital Corporation 6.900 5/1/2019 1,486,632
1,750,000 TELUS Corporation 7.500 6/1/2007 1,943,503
2,150,000 TELUS Corporation 8.000 6/1/2011 2,471,788
3,250,000 Verizon Global Funding Corporation 7.250 12/1/2010 3,711,705
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 36,940,320
=========================================================================================================================
Consumer Cyclical (5.5%)
- -------------------------------------------------------------------------------------------------------------------------
4,000,000 American Honda Finance Corporation(b,c) 1.330 11/17/2003 4,004,888
2,750,000 AOL Time Warner, Inc.(b) 6.750 4/15/2011 3,038,618
2,725,000 Cendant Corporation(b) 6.875 8/15/2006 2,994,462
3,000,000 Centex Corporation(b) 5.800 9/15/2009 3,186,069
1,000,000 Daimler Chrysler North American Holdings
Corporation(d) 6.500 11/15/2013 1,009,490
2,500,000 Delphi Auto Systems Corporation(b) 6.500 5/1/2009 2,642,455
2,000,000 Ford Motor Credit Company(b) 7.600 8/1/2005 2,120,556
2,500,000 Ford Motor Credit Company(b) 7.375 10/28/2009 2,585,920
3,000,000 General Motors Acceptance Corporation 6.125 2/1/2007 3,150,243
1,000,000 General Motors Acceptance Corporation 6.875 9/15/2011 1,031,603
1,750,000 Liberty Media Corporation 7.875 7/15/2009 1,977,610
2,000,000 Liberty Media Corporation 5.700 5/15/2013 1,955,334
2,000,000 Pulte Homes, Inc. 8.125 3/1/2011 2,344,382
1,000,000 Pulte Homes, Inc. 6.375 5/15/2033 955,927
2,500,000 Time Warner Entertainment Company, LP 8.375 3/15/2023 3,041,732
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Cyclical 36,039,289
=========================================================================================================================
Consumer Non-Cyclical (1.9%)
- -------------------------------------------------------------------------------------------------------------------------
3,500,000 Bunge Limited Finance Corporation(b) 7.800 10/15/2012 4,030,940
2,750,000 Kraft Foods, Inc. 4.625 11/1/2006 2,866,300
2,100,000 Kroger Company 7.250 6/1/2009 2,391,663
3,400,000 Safeway, Inc. 4.125 11/1/2008 3,388,447
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Non-Cyclical 12,677,350
=========================================================================================================================
Energy (1.1%)
- -------------------------------------------------------------------------------------------------------------------------
3,000,000 Halliburton Company(b) 5.500 10/15/2010 3,032,295
1,750,000 Ocean Energy, Inc. 4.375 10/1/2007 1,800,444
2,250,000 Pemex Project Funding Master Trust(e) 8.000 11/15/2011 2,486,250
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 7,318,989
=========================================================================================================================
Financials (15.8%)
- -------------------------------------------------------------------------------------------------------------------------
2,250,000 Abbey National Capital Trust I(b) 8.963 12/29/2049 2,984,416
3,000,000 Associates Manufactured Housing Contract
Pass-Through Certificates(b) 7.900 3/15/2027 3,072,303
2,000,000 BNP Paribas Capital Trust(b) 9.003 12/29/2049 2,482,548
2,000,000 Capital One Financial Corporation(b) 7.250 5/1/2006 2,145,684
3,250,000 Capital One Financial Corporation(b) 8.750 2/1/2007 3,638,843
2,800,000 Countrywide Home Loans, Inc.(b) 5.625 7/15/2009 2,988,955
2,000,000 Credit Suisse First Boston USA, Inc.(b) 5.500 8/15/2013 2,049,162
2,000,000 EOP Operating, LP(b) 6.800 1/15/2009 2,234,498
2,500,000 Goldman Sachs Group, Inc. 5.250 10/15/2013 2,504,725
1,000,000 Household Finance Corporation(b) 5.875 2/1/2009 1,081,421
2,000,000 HRPT Properties Trust 5.750 2/15/2014 2,002,800
2,000,000 HSBC Capital Funding, LP 9.547 12/31/2049 2,533,458
2,500,000 ING Capital Funding Trust III(b) 8.439 12/29/2049 3,113,320
2,500,000 International Lease Finance Corporation 5.625 6/1/2007 2,689,592
13,650,000 Lehman Brothers, Inc. 6.539 8/15/2008 14,784,588
2,500,000 Liberty Property, LP 7.250 3/15/2011 2,823,938
1,600,000 Mack-Cali Realty Corporation 7.250 3/15/2009 1,817,200
1,250,000 Mack-Cali Realty Corporation 7.750 2/15/2011 1,446,125
6,000,000 MBIA Global Funding, LLC(c) 1.250 1/8/2004 5,999,034
1,400,000 MBNA Corporation 4.625 9/15/2008 1,454,370
6,520,000 Merrill Lynch & Company, Inc.(c) 1.430 11/21/2003 6,531,801
1,750,000 Montpelier Reinsurance Holdings, Ltd. 6.125 8/15/2013 1,767,829
7,221,000 Morgan Stanley and Company 5.878 3/1/2007 7,748,566
2,759,000 Morgan Stanley and Company 7.252 9/15/2011 3,131,658
2,000,000 Morgan Stanley Dean Witter & Company 4.250 5/15/2010 1,970,358
4,000,000 Regency Centers, LP 7.125 7/15/2005 4,311,304
2,500,000 Royal Bank of Scotland Group plc 9.118 3/31/2049 3,112,098
2,250,000 Simon Property Group, LP 6.375 11/15/2007 2,465,500
3,000,000 Union Planters Corporation 7.750 3/1/2011 3,505,251
1,500,000 Vornado Realty Trust 5.625 6/15/2007 1,584,318
1,500,000 Washington Mutual Bank 5.500 1/15/2013 1,535,506
2,500,000 Westpac Capital Trust III 5.819 12/29/2049 2,569,725
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 104,080,894
=========================================================================================================================
Foreign (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 Corporacion Andina de Fomento(b) 6.875 3/15/2012 2,750,562
2,500,000 Mexico Government International 7.500 1/14/2012 2,793,750
2,250,000 Petroleos Mexicanos 9.375 12/2/2008 2,655,000
- -------------------------------------------------------------------------------------------------------------------------
Total Foreign 8,199,312
=========================================================================================================================
Mortgage-Backed Securities (19.9%)
- -------------------------------------------------------------------------------------------------------------------------
32,750,000 Federal National Mortgage Association
15-Yr. Conventional(d) 5.500 11/1/2018 33,712,031
94,250,000 Federal National Mortgage Association
30-Yr. Conventional(d) 6.000 11/1/2033 96,753,468
- -------------------------------------------------------------------------------------------------------------------------
Total Mortgage-Backed Securities 130,465,499
=========================================================================================================================
Municipal Bonds (0.3%)
- -------------------------------------------------------------------------------------------------------------------------
1,900,811 Educational Enhancement Funding Corporation 6.720 6/1/2025 1,801,722
- -------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds 1,801,722
=========================================================================================================================
Other (0.1%)
- -------------------------------------------------------------------------------------------------------------------------
1,000,000 Textron, Inc. 4.500 8/1/2010 993,863
- -------------------------------------------------------------------------------------------------------------------------
Total Other 993,863
=========================================================================================================================
Transportation (0.5%)
- -------------------------------------------------------------------------------------------------------------------------
1,050,000 Union Pacific Company 3.625 6/1/2010 993,548
2,453,942 United Air Lines, Inc.(f) 7.186 4/1/2011 2,103,912
- -------------------------------------------------------------------------------------------------------------------------
Total Transportation 3,097,460
=========================================================================================================================
U.S. Government (5.4%)
- -------------------------------------------------------------------------------------------------------------------------
10,000,000 Federal Home Loan Mortgage Corporation(c) 1.107 12/9/2003 9,998,130
22,350,000 U.S. Treasury Notes 6.000 8/15/2009 25,271,212
- -------------------------------------------------------------------------------------------------------------------------
Total U.S. Government 35,269,342
=========================================================================================================================
Utilities (6.6%)
- -------------------------------------------------------------------------------------------------------------------------
3,000,000 Alliant Energy Resources, Inc.(b) 7.375 11/9/2009 3,333,624
2,000,000 American Electric Power Company, Inc.(b) 6.125 5/15/2006 2,148,102
1,500,000 Centerpoint Energy, Inc.(b) 7.250 9/1/2010 1,607,404
3,625,000 Consumers Energy Company(b) 4.000 5/15/2010 3,468,632
1,500,000 FirstEnergy Corporation 5.500 11/15/2006 1,576,298
1,000,000 FirstEnergy Corporation 6.450 11/15/2011 1,062,233
2,250,000 FirstEnergy Corporation 7.375 11/15/2031 2,403,605
2,836,655 FPL Energy Virginia Funding Corporation 7.520 6/30/2019 3,044,100
3,500,000 NiSource Finance Corporation 3.200 11/1/2006 3,503,920
2,000,000 NiSource Finance Corporation 7.875 11/15/2010 2,366,480
2,300,000 Northeast Generation Company 4.998 10/15/2005 2,346,000
3,000,000 Oncor Electric Delivery Company 7.000 9/1/2022 3,278,148
2,500,000 Pinnacle West Capital Corporation 6.400 4/1/2006 2,656,120
1,500,000 Power Contract Financing, LLC 5.200 2/1/2006 1,496,670
1,500,000 Power Receivables Finance, LLC 6.290 1/1/2012 1,520,325
2,500,000 Texas-New Mexico Power Company 6.125 6/1/2008 2,522,388
1,500,000 TXU Corporation 6.375 6/15/2006 1,590,000
3,000,000 Xcel Energy, Inc. 7.000 12/1/2010 3,370,574
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 43,294,623
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $533,489,695) 542,773,984
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (17.4%) Interest Rate(g) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$17,550,000 Aspen Funding Corporation 1.050% 11/3/2003 $17,548,976
10,000,000 Asset Securitization Cooperative Corporation(c) 1.080 11/3/2003 10,000,000
10,000,000 Barton Capital Corporation 1.040 11/18/2003 9,995,089
14,905,000 Federal Home Loan Bank 1.030 12/17/2003 14,885,383
10,000,000 Federal Home Loan Mortgage Corporation 1.000 11/18/2003 9,995,453
6,750,000 Montauk Funding Corporation 1.060 11/7/2003 6,748,808
19,000,000 Preferred Receivables Funding Corporation 1.050 11/13/2003 18,992,097
10,000,000 Sheffield Receivables Corporation 1.050 11/3/2003 9,999,417
12,144,171 The AAL Money Market Fund 0.528 N/A 12,144,171
4,000,000 Thunder Bay Funding, Inc. 1.050 11/7/2003 3,999,300
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 114,308,694
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $647,798,389) $657,082,678
=========================================================================================================================
(a) The categories of investments are shown as a percentage of
total investments.
(b) Earmarked as collateral for options, futures or
longer settling trades as discussed in the notes to
the financial statements.
(c) Denotes variable rate obligations for which the
current yield and next scheduled reset date are
shown.
(d) Denotes securities purchased on a when-issued basis.
(e) Denotes step coupon bonds for which the current
interest rate and next scheduled reset date are
shown.
(f) In bankruptcy.
(g) The interest rate shown reflects the 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 October 31, 2003(a) (unaudited)
Principal
Amount Long-Term Fixed Income (83.5%) Interest Rate Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities (1.5%)
- -------------------------------------------------------------------------------------------------------------------------
$74,124 Advanta Mortgage Loan Trust 7.750% 10/25/2026 $77,924
500,000 Chase Credit Card Master Trust(b) 5.500 11/17/2008 538,259
101,336 EQCC Home Equity Loan Trust 6.930 2/15/2029 102,787
17,933 Money Store Home Equity Trust 6.877 1/15/2029 18,065
- -------------------------------------------------------------------------------------------------------------------------
Total Asset-Backed Securities 737,035
=========================================================================================================================
Basic Materials (0.6%)
- -------------------------------------------------------------------------------------------------------------------------
200,000 Dow Chemical Company(b) 5.750 11/15/2009 210,894
100,000 International Paper Company(b) 5.850 10/30/2012 103,891
- -------------------------------------------------------------------------------------------------------------------------
Total Basic Materials 314,785
=========================================================================================================================
Capital Goods (0.9%)
- -------------------------------------------------------------------------------------------------------------------------
100,000 Boeing Capital Corporation 6.100 3/1/2011 106,416
150,000 General Electric Company(b) 5.000 2/1/2013 150,950
75,000 Northrop Grumman Corporation 7.125 2/15/2011 86,182
75,000 Raytheon Company 5.500 11/15/2012 75,529
- -------------------------------------------------------------------------------------------------------------------------
Total Capital Goods 419,077
=========================================================================================================================
Commercial Mortgage-Backed Securities (1.8%)
- -------------------------------------------------------------------------------------------------------------------------
300,000 Banc of America Commercial Mortgage, Inc.(b) 5.118 7/11/2043 308,107
100,000 First Union National Bank Commercial Mortgage
Trust Pass-Through Certificates(b) 7.390 12/15/2031 115,654
193,158 Morgan Stanley Capital I, Inc. 6.250 3/15/2030 200,132
100,000 Morgan Stanley Capital I, Inc. 6.550 3/15/2030 110,847
110,000 Morgan Stanley Capital I, Inc. 6.210 11/15/2031 121,058
- -------------------------------------------------------------------------------------------------------------------------
Total Commercial Mortgage-Backed Securities 855,798
=========================================================================================================================
Communications Services (2.8%)
- -------------------------------------------------------------------------------------------------------------------------
100,000 AT&T Wireless Services, Inc.(b) 7.875 3/1/2011 114,268
250,000 BellSouth Corporation(b) 6.875 10/15/2031 273,502
75,000 Cox Communications, Inc.(b) 3.875 10/1/2008 74,517
100,000 Deutsche Telekom International Finance BV(b) 5.250 7/22/2013 99,384
95,000 GTE North, Inc.(b) 7.625 5/15/2026 100,830
200,000 Sprint Capital Corporation 7.625 1/30/2011 220,043
150,000 Tele-Communications, Inc. (TCI Group) 7.875 8/1/2013 175,761
100,000 Telecom Italia Capital Corporation 5.250 11/15/2013 99,222
150,000 Verizon Global Funding Corporation 7.750 12/1/2030 173,623
- -------------------------------------------------------------------------------------------------------------------------
Total Communications Services 1,331,150
=========================================================================================================================
Consumer Cyclical (2.2%)
- -------------------------------------------------------------------------------------------------------------------------
200,000 AOL Time Warner, Inc.(b) 6.875 5/1/2012 221,439
100,000 DaimlerChrysler North American Holdings
Corporation(b) 4.750 1/15/2008 99,918
150,000 Ford Motor Credit Company(b) 6.500 1/25/2007 154,768
300,000 General Motors Acceptance Corporation(b) 8.000 11/1/2031 308,520
100,000 Sears, Roebuck & Company 6.250 1/15/2004 100,342
150,000 Target Corporation 6.350 1/15/2011 166,819
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Cyclical 1,051,806
=========================================================================================================================
Consumer Non-Cyclical (1.6%)
- -------------------------------------------------------------------------------------------------------------------------
100,000 Bunge Limited Finance Corporation(b) 7.800 10/15/2012 115,170
100,000 Coca-Cola HBC Finance BV(b) 5.125 9/17/2013 100,032
200,000 ConAgra Foods, Inc.(b) 6.000 9/15/2006 217,386
150,000 General Mills, Inc.(b) 6.000 2/15/2012 160,367
100,000 Merck & Company, Inc. 5.950 12/1/2028 103,581
75,000 Safeway, Inc. 4.125 11/1/2008 74,745
- -------------------------------------------------------------------------------------------------------------------------
Total Consumer Non-Cyclical 771,281
=========================================================================================================================
Energy (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
100,000 ConocoPhillips(b) 4.750 10/15/2012 99,565
150,000 Pemex Project Funding Master Trust 9.125 10/13/2010 176,438
100,000 Union Oil Company of California 6.700 10/15/2007 108,633
200,000 Union Oil Company of California 5.050 10/1/2012 201,348
- -------------------------------------------------------------------------------------------------------------------------
Total Energy 585,984
=========================================================================================================================
Financials (8.5%)
- -------------------------------------------------------------------------------------------------------------------------
150,000 Allstate Corporation(b) 7.200 12/1/2009 174,360
225,000 Avalonbay Communities, Inc.(b) 6.500 1/15/2005 236,345
250,000 Bank of America Corporation(b) 3.875 1/15/2008 253,594
200,000 CIT Group, Inc.(b) 5.750 9/25/2007 215,347
50,000 Citigroup, Inc.(b) 3.500 2/1/2008 49,962
150,000 Citigroup, Inc.(b) 7.250 10/1/2010 174,509
100,000 Countrywide Home Loans, Inc.(b) 5.625 7/15/2009 106,748
150,000 First Union National Bank(b) 7.800 8/18/2010 179,398
225,000 Goldman Sachs Group, Inc.(b) 6.600 1/15/2012 249,559
250,000 Honda Auto Receivables Owner Trust(b) 2.480 7/18/2008 250,306
75,000 Household Finance Corporation(b) 6.375 11/27/2012 81,675
125,000 International Lease Finance Corporation(b) 5.875 5/1/2013 130,494
125,000 Lehman Brothers Holdings, Inc.(b) 3.500 8/7/2008 123,187
812,000 Morgan Stanley and Company(b) 5.878 3/1/2007 871,325
248,000 Morgan Stanley and Company 7.252 9/15/2011 281,497
200,000 Morgan Stanley and Company(b) 3.625 4/1/2008 199,341
175,000 PNC Funding Corporation 6.875 7/15/2007 196,426
100,000 Post Apartment Homes, LP 8.125 6/15/2005 108,145
175,000 Wells Fargo Company 3.500 4/4/2008 174,776
- -------------------------------------------------------------------------------------------------------------------------
Total Financials 4,056,994
=========================================================================================================================
Foreign (2.7%)
- -------------------------------------------------------------------------------------------------------------------------
225,000 European Investment Bank(b) 3.000 6/16/2008 223,648
100,000 Inter-American Development Bank(b) 5.750 2/26/2008 109,758
150,000 International Bank for Reconstruction
and Development(b) 5.000 3/28/2006 159,356
200,000 Korea Development Bank(b) 7.250 5/15/2006 220,284
150,000 Mexico Government International 7.500 1/14/2012 167,625
200,000 Province of Quebec 7.500 7/15/2023 241,850
100,000 Republic of Italy(b) 6.000 2/22/2011 110,867
50,000 Republic of Italy(b) 4.375 6/15/2013 48,938
- -------------------------------------------------------------------------------------------------------------------------
Total Foreign 1,282,326
=========================================================================================================================
Mortgage-Backed Securities (29.2%)
- -------------------------------------------------------------------------------------------------------------------------
105,889 Federal Home Loan Mortgage Corporation
30-Yr. Gold Conventional 8.500 7/1/2021 115,979
1,000,000 Federal Home Loan Mortgage Corporation
30-Yr. Gold Conventional(c) 6.000 11/1/2033 1,026,250
24,568 Federal Home Loan Mortgage Corporation
Gold 15-Yr. Pass Through 9.000 4/1/2010 27,017
31,310 Federal Home Loan Mortgage Corporation
Gold 15-Yr. Pass Through 6.000 3/1/2014 32,623
148,512 Federal Home Loan Mortgage Corporation
Gold 15-Yr. Pass Through 7.500 1/1/2015 158,122
151,190 Federal Home Loan Mortgage Corporation
Gold 15-Yr. Pass Through 6.500 7/1/2016 158,650
101,223 Federal Home Loan Mortgage Corporation
Gold 15-Yr. Pass Through 6.500 10/1/2016 106,217
178,798 Federal Home Loan Mortgage Corporation
Gold 30-Yr. Pass Through 8.000 5/1/2027 194,127
250,858 Federal Home Loan Mortgage Corporation
Gold 30-Yr. Pass Through 7.500 1/1/2028 268,357
10,867 Federal Home Loan Mortgage Corporation
Gold 30-Yr. Pass Through 8.000 10/1/2029 11,708
22,984 Federal Home Loan Mortgage Corporation
Gold 30-Yr. Pass Through 8.000 2/1/2030 24,763
422,822 Federal Home Loan Mortgage Corporation
Gold 30-Yr. Pass Through 7.000 8/1/2032 444,799
1,066,652 Federal Home Loan Mortgage Corporation
Gold 30-Yr. Pass Through 6.000 11/1/2032 1,094,917
15,465 Federal National Mortgage Association
5-Yr. Conventional 7.500 8/1/2006 16,508
1,300,000 Federal National Mortgage Association
15-Yr. Conventional(c) 4.500 11/1/2018 1,298,375
1,750,000 Federal National Mortgage Association
15-Yr. Conventional(c) 5.000 11/1/2018 1,777,344
702,869 Federal National Mortgage Association
15-Yr. Pass Through 5.500 12/1/2017 723,963
3,400,000 Federal National Mortgage Association
30-Yr. Conventional(c) 5.500 11/1/2033 3,430,811
395,252 Federal National Mortgage Association
30-Yr. Pass Through 6.500 8/1/2032 410,632
221,804 Federal National Mortgage Association
30-Yr. Pass Through 6.000 10/1/2032 227,758
383,880 Federal National Mortgage Association
30-Yr. Pass Through 6.500 12/1/2032 398,818
24,560 Federal National Mortgage Association
Conventional 15-Yr. Pass Through 6.000 4/1/2011 25,623
56,303 Federal National Mortgage Association
Conventional 15-Yr. Pass Through 6.000 1/1/2014 58,700
55,396 Federal National Mortgage Association
Conventional 15-Yr. Pass Through 6.000 1/1/2014 57,754
24,082 Federal National Mortgage Association
Conventional 15-Yr. Pass Through 5.500 4/1/2014 24,920
81,888 Federal National Mortgage Association
Conventional 15-Yr. Pass Through 6.000 11/1/2014 85,374
94,146 Federal National Mortgage Association
Conventional 15-Yr. Pass Through 6.000 9/1/2016 97,934
37,451 Federal National Mortgage Association
Conventional 30-Yr. Pass Through 6.000 6/1/2008 38,553
61,579 Federal National Mortgage Association
Conventional 30-Yr. Pass Through 6.000 12/1/2028 63,363
102,175 Federal National Mortgage Association
Conventional 30-Yr. Pass Through 6.000 4/1/2031 104,905
28,593 Federal National Mortgage Association
Conventional 30-Yr. Pass Through 6.000 4/1/2031 29,357
52,117 Federal National Mortgage Association
Conventional 30-Yr. Pass Through 6.000 5/1/2031 53,509
255,045 Federal National Mortgage Association
Conventional 30-Yr. Pass Through 6.500 7/1/2032 264,969
24,480 Government National Mortgage Association
30-Yr. Pass Through 8.500 1/15/2017 26,999
24,291 Government National Mortgage Association
30-Yr. Pass Through 8.000 1/15/2025 26,348
37,194 Government National Mortgage Association
30-Yr. Pass Through 8.000 7/15/2026 40,303
12,677 Government National Mortgage Association
30-Yr. Pass Through 8.000 10/15/2028 13,698
90,324 Government National Mortgage Association
30-Yr. Pass Through 7.000 1/15/2029 95,788
36,935 Government National Mortgage Association
30-Yr. Pass Through 8.000 12/15/2029 39,875
13,107 Government National Mortgage Association
30-Yr. Pass Through 8.500 12/15/2029 14,209
13,235 Government National Mortgage Association
30-Yr. Pass Through 8.000 5/15/2030 14,287
9,149 Government National Mortgage Association
30-Yr. Pass Through 8.000 7/15/2030 9,876
30,313 Government National Mortgage Association
30-Yr. Pass Through 7.000 3/15/2031 32,131
106,262 Government National Mortgage Association
30-Yr. Pass Through 6.000 6/15/2031 109,812
143,899 Government National Mortgage Association
30-Yr. Pass Through 6.500 7/15/2031 150,762
97,888 Government National Mortgage Association
30-Yr. Pass Through 7.000 9/15/2031 103,756
380,623 Government National Mortgage Association
30-Yr. Pass Through 6.500 7/15/2032 398,543
- -------------------------------------------------------------------------------------------------------------------------
Total Mortgage-Backed Securities 13,929,086
=========================================================================================================================
Transportation (0.4%)
- -------------------------------------------------------------------------------------------------------------------------
75,000 CSX Corporation(b) 5.500 8/1/2013 76,581
122,697 United Air Lines, Inc. 7.186 4/1/2011 105,196
- -------------------------------------------------------------------------------------------------------------------------
Total Transportation 181,777
=========================================================================================================================
U.S. Government (28.2%)
- -------------------------------------------------------------------------------------------------------------------------
300,000 Federal Farm Credit Bank 5.720 4/13/2005 316,752
160,000 Federal Home Loan Bank 6.900 2/7/2007 180,407
200,000 Federal Home Loan Bank 5.625 2/15/2008 217,816
200,000 Federal Home Loan Bank 7.375 2/13/2015 242,755
100,000 Federal Home Loan Bank 6.640 12/13/2016 116,379
850,000 Federal Home Loan Mortgage Corporation 2.875 9/15/2005 862,685
400,000 Federal Home Loan Mortgage Corporation 6.000 6/15/2011 441,205
500,000 Federal National Mortgage Association 6.500 8/15/2004 520,286
100,000 Federal National Mortgage Association 5.800 2/22/2006 108,068
150,000 Federal National Mortgage Association 5.500 5/2/2006 160,482
150,000 Federal National Mortgage Association 6.660 3/5/2007 168,751
250,000 Federal National Mortgage Association 3.250 1/15/2008 249,612
150,000 Federal National Mortgage Association 5.250 1/15/2009 160,872
250,000 Federal National Mortgage Association 6.250 2/1/2011 273,439
100,000 Federal National Mortgage Association 6.210 8/6/2038 107,349
200,000 Tennessee Valley Authority 6.150 1/15/2038 215,525
150,000 U.S. Treasury Bonds 13.250 5/15/2014 224,344
100,000 U.S. Treasury Bonds 7.500 11/15/2016 126,473
200,000 U.S. Treasury Bonds 8.750 5/15/2017 278,617
300,000 U.S. Treasury Bonds 8.125 8/15/2019 402,586
100,000 U.S. Treasury Bonds 7.875 2/15/2021 132,047
100,000 U.S. Treasury Bonds 8.125 8/15/2021 135,281
600,000 U.S. Treasury Bonds 6.250 8/15/2023 677,156
50,000 U.S. Treasury Bonds 6.750 8/15/2026 60,004
100,000 U.S. Treasury Bonds 6.500 11/15/2026 116,656
100,000 U.S. Treasury Bonds 6.625 2/15/2027 118,457
600,000 U.S. Treasury Bonds 6.125 11/15/2027 670,711
375,000 U.S. Treasury Bonds 5.250 11/15/2028 374,268
300,000 U.S. Treasury Notes 5.625 2/15/2006 324,457
1,000,000 U.S. Treasury Notes 2.000 5/15/2006 997,578
200,000 U.S. Treasury Notes 4.625 5/15/2006 212,258
100,000 U.S. Treasury Notes 6.500 10/15/2006 111,727
650,000 U.S. Treasury Notes 3.500 11/15/2006 670,871
1,950,000 U.S. Treasury Notes 4.375 5/15/2007 2,063,191
900,000 U.S. Treasury Notes 5.500 5/15/2009 997,172
200,000 U.S. Treasury Notes 10.375 11/15/2009 218,414
200,000 U.S. Treasury Notes 4.000 11/15/2012 196,977
- -------------------------------------------------------------------------------------------------------------------------
Total U.S. Government 13,451,628
=========================================================================================================================
Utilities (1.9%)
- -------------------------------------------------------------------------------------------------------------------------
75,000 Duke Capital Corporation(b) 7.500 10/1/2009 84,619
100,000 Enserch Corporation(b) 6.564 7/1/2005 103,342
75,000 FirstEnergy Corporation(b) 6.450 11/15/2011 79,667
150,000 Niagara Mohawk Power Corporation 7.750 10/1/2008 173,759
200,000 Oncor Electric Delivery Company 6.375 1/15/2015 215,505
200,000 Public Service Company of Colorado 7.875 10/1/2012 241,643
- -------------------------------------------------------------------------------------------------------------------------
Total Utilities 898,535
- -------------------------------------------------------------------------------------------------------------------------
Total Long-Term Fixed Income (cost $39,019,179) 39,867,262
=========================================================================================================================
Shares or
Principal
Amount Short-Term Investments (16.5%) Interest Rate(d) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$5,950,000 Federal Agricultural Mortgage Corporation 0.950% 11/3/2003 $5,949,686
1,949,475 The AAL Money Market Fund 0.528 N/A 1,949,475
- -------------------------------------------------------------------------------------------------------------------------
Total Short-Term Investments (at amortized cost) 7,899,161
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $46,918,340) $47,766,423
=========================================================================================================================
(a) The categories of investments are shown as a percentage of
total investments.
(b) Earmarked as collateral for options, futures or
longer settling trades as discussed in the notes to
the financial statements.
(c) Denotes investments purchased on a when-issued basis.
(d) The interest rate shown reflects the 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 October 31, 2003(a) (unaudited)
Principal
Amount Certificates of Deposit (6.8%) Interest Rate(b) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Banking -- Foreign
$10,000,000 Deutsche Bank NY 1.400% 9/3/2004 $10,000,000
8,500,000 Royal Bank of Scotland 1.480 11/19/2004 8,499,110
10,000,000 Svenska Handelsbanke 1.065 11/28/2003 10,000,034
- -------------------------------------------------------------------------------------------------------------------------
Total Certificates of Deposit 28,499,144
=========================================================================================================================
Shares or
Principal
Amount Commercial Paper (88.8%) Interest Rate(c) Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities (21.3%)
- -------------------------------------------------------------------------------------------------------------------------
$3,580,000 Amsterdam Funding Corporation 1.060% 11/18/2003 $3,578,208
10,000,000 Barton Capital Corporation 1.060 11/12/2003 9,996,761
8,400,000 Barton Capital Corporation 1.060 12/3/2003 8,392,085
6,400,000 CAFCO, LLC 1.070 11/3/2003 6,399,619
11,000,000 Corporate Receivables Corporation Funding, LLC 1.060 11/17/2003 10,994,818
8,500,000 CXC, LLC 1.050 12/4/2003 8,491,819
4,031,000 Edison Asset Securitization, LLC 1.100 11/14/2003 4,029,399
10,000,000 Montauk Funding Corporation 1.090 11/6/2003 9,998,486
7,030,000 Old Line Funding Corporation 1.050 11/3/2003 7,029,590
10,000,000 Tulip Funding Corporation 1.080 11/4/2003 9,999,100
1,887,000 Tulip Funding Corporation 1.070 11/28/2003 1,885,738
8,500,000 Windmill Funding Corporation 1.060 12/30/2003 8,485,234
- -------------------------------------------------------------------------------------------------------------------------
Total Asset-Backed Securities 89,280,857
=========================================================================================================================
Banking -- Domestic (10.8%)
- -------------------------------------------------------------------------------------------------------------------------
5,000,000 Citigroup, Inc. 1.060 11/20/2003 4,997,203
9,860,000 Citigroup, Inc. 1.050 12/10/2003 9,848,784
1,601,000 River Fuel Trust No. 1 1.070 11/12/2003 1,600,477
6,698,000 River Fuel Trust No. 1 1.100 1/30/2004 6,679,785
9,000,000 Toronto Dominion Holdings 1.035 11/4/2003 8,999,224
4,000,000 Toronto Dominion Holdings 1.040 11/25/2003 3,997,227
8,950,000 Ventures Business Trust 1.040 11/3/2003 8,949,483
- -------------------------------------------------------------------------------------------------------------------------
Total Banking -- Domestic 45,072,183
=========================================================================================================================
Banking -- Foreign (9.2%)
- -------------------------------------------------------------------------------------------------------------------------
9,650,000 Royal Bank of Scotland plc 1.060 12/15/2003 9,637,535
9,000,000 Stadshypotek Delaware, Inc. 1.060 11/21/2003 8,994,700
10,000,000 Westdeutsche Landesbank 1.045 12/9/2003 9,988,970
10,000,000 Westdeutsche Landesbank 1.050 12/29/2003 9,983,083
- -------------------------------------------------------------------------------------------------------------------------
Total Banking -- Foreign 38,604,288
=========================================================================================================================
Chemicals (4.1%)
- -------------------------------------------------------------------------------------------------------------------------
10,000,000 Henkel Corporation 1.040 12/15/2003 9,987,289
7,310,000 Henkel Corporation 1.040 12/16/2003 7,300,497
- -------------------------------------------------------------------------------------------------------------------------
Total Chemicals 17,287,786
=========================================================================================================================
Drugs & Health Care (1.2%)
- -------------------------------------------------------------------------------------------------------------------------
5,000,000 Alcon Capital Corporation 1.040 11/10/2003 4,998,700
- -------------------------------------------------------------------------------------------------------------------------
Total Drugs & Health Care 4,998,700
=========================================================================================================================
Education (2.4%)
- -------------------------------------------------------------------------------------------------------------------------
5,000,000 Northwestern University 1.010 11/18/2003 4,994,000
5,000,000 Northwestern University 1.100 11/25/2003 4,996,334
- -------------------------------------------------------------------------------------------------------------------------
Total Education 9,990,334
=========================================================================================================================
Finance (13.7%)
- -------------------------------------------------------------------------------------------------------------------------
10,000,000 American General Finance Corporation 1.030 11/20/2003 9,994,564
10,000,000 American General Finance Corporation 1.040 11/24/2003 9,993,356
9,200,000 American Honda Finance Corporation 1.060 11/13/2003 9,196,749
10,000,000 General Electric Capital Corporation 1.050 12/2/2003 9,990,958
10,000,000 General Electric Capital Corporation 1.050 12/11/2003 9,988,333
2,354,648 SSgA Money Market Fund 0.071 N/A 2,354,648
5,825,000 Toyota Motor Credit Corporation 1.010 11/25/2003 5,821,077
- -------------------------------------------------------------------------------------------------------------------------
Total Finance 57,339,685
=========================================================================================================================
Insurance (5.0%)
- -------------------------------------------------------------------------------------------------------------------------
2,500,000 American Family Financial Services, Inc. 1.030 11/5/2003 2,499,714
3,200,000 American Family Financial Services, Inc. 1.100 12/5/2003 3,196,676
4,856,000 American Family Financial Services, Inc. 1.120 2/6/2004 4,841,346
10,500,000 Swiss Reinsurance Company 1.100 2/17/2004 10,465,350
- -------------------------------------------------------------------------------------------------------------------------
Total Insurance 21,003,086
=========================================================================================================================
Investment Banking & Brokerage (1.7%)
- -------------------------------------------------------------------------------------------------------------------------
7,250,000 Goldman Sachs Group, Inc. 0.920 11/13/2003 7,247,777
- -------------------------------------------------------------------------------------------------------------------------
Total Investment Banking & Brokerage 7,247,777
=========================================================================================================================
Media (2.4%)
- -------------------------------------------------------------------------------------------------------------------------
10,000,000 Gannett Company 1.020 11/14/2003 9,996,317
- -------------------------------------------------------------------------------------------------------------------------
Total Media 9,996,317
=========================================================================================================================
Oil & Gas (7.2%)
- -------------------------------------------------------------------------------------------------------------------------
17,460,000 Northern Illinois Gas Company 1.120 3/2/2004 17,393,073
10,500,000 Shell Finance (UK) plc 1.030 12/5/2003 10,489,786
2,000,000 Shell Finance (UK) plc 1.040 12/9/2003 1,997,804
- -------------------------------------------------------------------------------------------------------------------------
Total Oil & Gas 29,880,663
=========================================================================================================================
U.S. Government (9.8%)
- -------------------------------------------------------------------------------------------------------------------------
5,000,000 Federal Home Loan Mortgage Corporation 1.049 12/12/2003 4,994,135
11,000,000 Federal Home Loan Mortgage Corporation 1.074 12/18/2003 10,984,776
7,650,000 Federal Home Loan Mortgage Corporation 1.057 12/22/2003 7,638,729
10,000,000 Federal National Mortgage Association 1.039 12/10/2003 9,988,950
7,503,000 Federal National Mortgage Association 1.251 8/6/2004 7,432,059
- -------------------------------------------------------------------------------------------------------------------------
Total U.S. Government 41,038,649
- -------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper 371,740,325
=========================================================================================================================
Principal
Amount Variable Rate Notes (4.4%) Yield Maturity Date Value
- -------------------------------------------------------------------------------------------------------------------------
$8,500,000 American Honda Finance Corporation(c) 1.370% 1/22/2004 $8,504,644
10,000,000 Wells Fargo Bank(c) 1.060 12/1/2003 9,999,454
- -------------------------------------------------------------------------------------------------------------------------
Total Variable Rate Notes 18,504,098
- -------------------------------------------------------------------------------------------------------------------------
Total Investments (at amortized cost) $418,743,567
=========================================================================================================================
(a) The categories of investments are shown as a percentage of
total investments.
(b) The interest rate shown reflects the yield, or for
securities purchased at a discount, the discount rate
at the date of purchase.
(c) 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 Mutual Funds
Statement of Assets and Liabilities
AAL AAL AAL AAL
Technology Aggressive Small Cap Small Cap
As of October 31, 2003 (unaudited) Stock Fund Growth Fund Stock Fund Index Fund II
- ------------------------------------------------------------------------------------------------------------------
Assets
Investments at cost $50,252,048 $36,691,648 $315,029,206 $27,268,170
-------------- -------------- -------------- --------------
Investments at value 47,534,320 43,199,681 380,544,832 31,409,679
-------------- -------------- -------------- --------------
Cash -- -- 13,533 --
Initial margin deposit on open future contracts -- -- -- 64,800
Dividends and interest receivable 26,586 32,633 97,541 14,229
Receivable for investments sold -- 340,967 5,470,185 326,383
Receivable for trust shares sold 78,653 36,839 146,963 58,086
Receivable for forward contracts -- -- -- --
Receivable for variation margin -- -- -- --
Receivable from affiliate 51,095 -- -- --
-------------- -------------- -------------- --------------
Total Assets 47,690,654 43,610,120 386,273,054 31,873,177
-------------- -------------- -------------- --------------
Liabilities
Cash overdraft payable -- -- -- --
Accrued expenses 15,207 23,469 92,432 3,178
Payable for investments purchased 221,875 433,308 6,690,761 143,416
Payable for fund shares redeemed 13,760 17,239 223,359 --
Payable for forward contracts -- -- -- --
Open options written, at value -- 7401 -- --
Payable for variation margin -- -- -- 7,425
Payable to affiliate -- 46,756 326,140 13,534
-------------- -------------- -------------- --------------
Total Liabilities 250,842 521,512 7,332,692 167,553
-------------- -------------- -------------- --------------
Net Assets
Trust capital (beneficial interest) 83,326,730 75,833,156 321,443,200 27,566,247
Accumulated undistributed net investment income/(loss) (192,223) (299,678) (1,412,411) (46,489)
Accumulated undistributed net realized gain/(loss) on
investments and foreign currency transactions (32,976,967) (38,952,951) (6,606,053) 4,080
Net unrealized appreciation/(depreciation) on:
Investments (2,717,728) 6,508,033 65,515,626 4,141,509
Written options contracts -- 48 -- --
Futures contracts -- -- -- 40,277
Foreign currency forward contracts -- -- -- --
Foreign currency transactions -- -- -- --
-------------- -------------- -------------- --------------
Total Net Assets $47,439,812 $43,088,608 $378,940,362 $31,705,624
-------------- -------------- -------------- --------------
Class A share capital $40,914,307 $36,154,684 $345,051,997 $28,504,943
Shares of beneficial interest outstanding (Class A) 12,411,355 8,317,648 23,119,761 2,499,988
Net asset value per share $3.30 $4.35 $14.92 $11.40
Maximum public offering price $3.49 $4.60 $15.79 $12.06
Class B share capital $3,601,864 $3,644,136 $24,525,102 $3,200,681
Shares of beneficial interest outstanding (Class B) 1,127,012 869,470 1,755,941 288,621
Net asset value per share $3.20 $4.19 $13.97 $11.09
Institutional Class share capital $2,923,641 $3,289,788 $9,363,263 --
Shares of beneficial interest outstanding
(Institutional Class) 856,187 726,163 602,627 --
Net asset value per share $3.41 $4.53 $15.54 --
The AAL Mutual Funds
Statement of Assets and Liabilities - continued
AAL AAL AAL
Small Cap Mid Cap Mid Cap
As of October 31, 2003 (unaudited) Value Fund Stock Fund Index Fund
- ---------------------------------------------------------------------------------------------------
Assets
Investments at cost $39,200,467 $693,330,509 $25,131,756
-------------- -------------- --------------
Investments at value 50,910,711 811,172,823 27,864,075
-------------- -------------- --------------
Cash -- 16,773 --
Initial margin deposit on open future contracts -- -- 48,000
Dividends and interest receivable 24,476 385,042 17,063
Receivable for investments sold 363,754 11,525,459 134,369
Receivable for trust shares sold 76,369 195,339 16,726
Receivable for forward contracts -- -- --
Receivable for variation margin -- -- 1,900
Receivable from affiliate -- -- --
-------------- -------------- --------------
Total Assets 51,375,310 823,295,436 28,082,133
-------------- -------------- --------------
Liabilities
Cash overdraft payable -- -- 20
Accrued expenses (432) 163,528 2,668
Payable for investments purchased 259,788 9,450,928 177,069
Payable for fund shares redeemed 19,396 372,099 --
Payable for forward contracts -- -- --
Open options written, at value -- -- --
Payable for variation margin -- -- --
Payable to affiliate 21,460 653,442 4,764
-------------- -------------- --------------
Total Liabilities 300,212 10,639,997 184,521
-------------- -------------- --------------
Net Assets
Trust capital (beneficial interest) 43,033,609 843,380,044 25,485,007
Accumulated undistributed net investment income/(loss) (129,986) (1,257,990) 107,520
Accumulated undistributed net realized gain/(loss) on
investments and foreign currency transactions (3,538,769) (147,308,929) (470,684)
Net unrealized appreciation/(depreciation) on:
Investments 11,710,244 117,842,314 2,732,319
Written options contracts -- -- --
Futures contracts -- -- 43,450
Foreign currency forward contracts -- -- --
Foreign currency transactions -- -- --
-------------- -------------- --------------
Total Net Assets $51,075,098 $812,655,439 $27,897,612
-------------- -------------- --------------
Class A share capital $39,695,279 $760,407,024 --
Shares of beneficial interest outstanding (Class A) 3,258,653 57,929,851 --
Net asset value per share $12.18 $13.13 --
Maximum public offering price $12.89 $13.89 --
Class B share capital $4,391,757 $25,824,707 --
Shares of beneficial interest outstanding (Class B) 366,905 2,136,505 --
Net asset value per share $11.97 $12.09 --
Institutional Class share capital $6,988,062 $26,423,708 $27,897,612
Shares of beneficial interest outstanding
(Institutional Class) 562,689 1,949,735 2,499,654
Net asset value per share $12.42 $13.55 $11.16
The AAL Mutual Funds
Statement of Assets and Liabilities - continued
AAL AAL AAL
As of October 31, 2003 (unaudited) Mid Cap International Capital
Index Fund II Fund Growth Fund
- ---------------------------------------------------------------------------------------------------
Assets
Investments at cost $31,035,916 $150,335,710 $1,946,630,478
-------------- -------------- --------------
Investments at value 36,055,824 159,431,386 2,954,285,825
-------------- -------------- --------------
Cash -- -- 32,148
Initial margin deposit on open future contracts 28,800 -- --
Dividends and interest receivable 22,465 320,173 2,805,038
Receivable for investments sold 173,794 4,482,085 --
Receivable for trust shares sold 59,357 180,116 832,684
Receivable for forward contracts -- 5,435,769 --
Receivable for variation margin 1,140 -- --
Receivable from affiliate -- -- --
-------------- -------------- --------------
Total Assets 36,341,380 169,849,529 2,957,955,695
-------------- -------------- --------------
Liabilities
Cash overdraft payable 36 -- --
Accrued expenses 7,614 66,874 424,271
Payable for investments purchased 259,296 952,932 --
Payable for fund shares redeemed 519 93,043 1,328,697
Payable for forward contracts -- 5,435,742 --
Open options written, at value -- -- --
Payable for variation margin -- -- --
Payable to affiliate 17,549 141,479 2,103,946
-------------- -------------- --------------
Total Liabilities 285,014 6,690,070 3,856,914
-------------- -------------- --------------
Net Assets
Trust capital (beneficial interest) 33,573,072 233,285,008 2,015,365,104
Accumulated undistributed net investment income/(loss) (27,042) 593,789 3,607,348
Accumulated undistributed net realized gain/(loss) on
investments and foreign currency transactions (2,522,588) (79,840,388) (72,529,018)
Net unrealized appreciation/(depreciation) on:
Investments 5,019,908 9,095,676 1,007,655,347
Written options contracts -- -- --
Futures contracts 13,016 -- --
Foreign currency forward contracts -- 27 --
Foreign currency transactions -- 25,347 --
-------------- -------------- --------------
Total Net Assets $36,056,366 $163,159,459 $2,954,098,781
-------------- -------------- --------------
Class A share capital $31,816,010 $152,737,737 $2,793,059,763
Shares of beneficial interest outstanding (Class A) 2,948,621 18,602,047 99,049,939
Net asset value per share $10.79 $8.21 $28.20
Maximum public offering price $11.42 $8.69 $29.84
Class B share capital $4,240,356 $7,531,673 $80,820,001
Shares of beneficial interest outstanding (Class B) 403,844 946,041 3,021,193
Net asset value per share $10.50 $7.96 $26.75
Institutional Class share capital -- $2,890,049 $80,219,017
Shares of beneficial interest outstanding
(Institutional Class) -- 347,681 2,836,964
Net asset value per share -- $8.31 $28.28
/1/ Premium received on written options of $788.
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 October 31, 2003 (unaudited) Index Fund Index Fund II Fund Fund
- ------------------------------------------------------------------------------------------------------------------
Assets
Investments at cost $26,400,405 $46,285,460 $227,347,105 $427,775,457
-------------- -------------- -------------- --------------
Investments at value 24,858,322 41,241,475 248,034,864 442,777,260
-------------- -------------- -------------- --------------
Cash -- -- -- 42,586
Initial margin deposit on open future contracts 37,050 57,000 -- --
Dividends and interest receivable 32,497 53,608 354,961 1,756,261
Receivable for investments sold -- -- -- 1,794,973
Receivable for trust shares sold 55,771 90,750 130,984 86,607
Receivable for variation margin 672 1,000 -- --
Receivable from affiliate -- 116,835 -- --
-------------- -------------- -------------- --------------
Total Assets 24,984,312 41,560,668 248,520,809 446,457,687
-------------- -------------- -------------- --------------
Liabilities
Distributions payable -- -- -- --
Accrued expenses 5,266 2,172 57,243 43,209
Payable for investments purchased -- -- -- 37,839,307
Payable for fund shares redeemed -- 37,743 143,902 246,650
Payable for variation margin -- -- -- --
Payable to affiliate 23,566 2,548 160,322 270,946
-------------- -------------- -------------- --------------
Total Liabilities 28,832 42,463 361,467 38,400,112
-------------- -------------- -------------- --------------
Net Assets
Trust capital stock (beneficial interest) 37,629,238 48,345,339 259,725,772 411,138,052
Accumulated undistributed net investment income/(loss) 467,304 336,775 231,202 232,403
Accumulated undistributed net realized gain/(loss) on
investments and foreign currency transactions (11,605,436) (2,129,101) (32,485,391) (18,314,683)
Net unrealized appreciation/(depreciation) on:
Investments (1,542,083) (5,043,985) 20,687,759 15,001,803
Futures contracts 6,457 9,177 -- --
-------------- -------------- -------------- --------------
Total Net Assets $24,955,480 $41,518,205 $248,159,342 $408,057,575
-------------- -------------- -------------- --------------
Class A share capital -- $37,498,981 $228,191,216 $274,892,927
Shares of beneficial interest outstanding (Class A) -- 5,168,540 19,460,579 24,029,617
Net asset value per share -- $7.26 $11.73 $11.44
Maximum public offering price -- $7.68 $12.41 $12.11
Class B share capital -- $4,019,224 $7,947,880 $19,140,473
Shares of beneficial interest outstanding (Class B) -- 569,785 681,098 1,680,933
Net asset value per share -- $7.05 $11.67 $11.39
Institutional Class share capital $24,955,480 -- $12,020,246 $114,024,175
Shares of beneficial interest outstanding
(Institutional Class) 3,434,958 -- 1,023,897 9,976,008
Net asset value per share $7.27 -- $11.74 $11.43
Statement of Assets and Liabilities - continued
AAL AAL AAL
High Yield Municipal Bond
As of October 31, 2003 (unaudited) Bond Fund Bond Fund Fund
- ---------------------------------------------------------------------------------------------------
Assets
Investments at cost $128,028,184 $623,301,360 $647,798,389
-------------- -------------- --------------
Investments at value 134,848,091 665,091,609 657,082,678
-------------- -------------- --------------
Cash -- 47,107 41,046
Initial margin deposit on open future contracts -- -- --
Dividends and interest receivable 2,813,846 10,498,268 4,922,578
Receivable for investments sold 2,043,855 1,289,293 8,673,571
Receivable for trust shares sold 545,490 59,249 157,896
Receivable for variation margin -- -- --
Receivable from affiliate -- -- --
-------------- -------------- --------------
Total Assets 140,251,282 676,985,526 670,877,769
-------------- -------------- --------------
Liabilities
Distributions payable 258,415 438,436 241,032
Accrued expenses 31,230 34,180 47,679
Payable for investments purchased 1,941,689 14,219,616 144,104,983
Payable for fund shares redeemed 91,367 171,958 703,217
Payable for variation margin -- 34,375 --
Payable to affiliate 70,294 405,237 321,223
-------------- -------------- --------------
Total Liabilities 2,392,995 15,303,802 145,418,134
-------------- -------------- --------------
Net Assets
Trust capital stock (beneficial interest) 199,292,823 629,873,325 520,170,230
Accumulated undistributed net investment income/(loss) 147,796 (7) (1,370,129)
Accumulated undistributed net realized gain/(loss) on
investments and foreign currency transactions (68,402,239) (9,966,821) (2,624,755)
Net unrealized appreciation/(depreciation) on:
Investments 6,819,907 41,790,249 9,284,289
Futures contracts -- (15,022) --
-------------- -------------- --------------
Total Net Assets $137,858,287 $661,681,724 $525,459,635
-------------- -------------- --------------
Class A share capital $128,112,899 $645,232,185 $480,631,864
Shares of beneficial interest outstanding (Class A) 19,512,023 56,493,329 47,015,577
Net asset value per share $6.57 $11.42 $10.22
Maximum public offering price $6.88 $11.96 $10.70
Class B share capital $6,152,892 $12,968,864 $13,356,469
Shares of beneficial interest outstanding (Class B) 937,132 1,135,884 1,305,892
Net asset value per share $6.57 $11.42 $10.23
Institutional Class share capital $3,592,496 $3,480,675 $31,471,302
Shares of beneficial interest outstanding
(Institutional Class) 547,334 304,788 3,077,550
Net asset value per share $6.56 $11.42 $10.23
Statement of Assets and Liabilities - continued
AAL AAL
Bond Index Money Market
As of October 31, 2003 (unaudited) Fund Fund
- ------------------------------------------------------------------------------------
Assets
Investments at cost $46,918,340 $418,743,567
-------------- --------------
Investments at value 47,766,423 418,743,567
-------------- --------------
Cash 35,404 7,539
Initial margin deposit on open future contracts -- --
Dividends and interest receivable 425,402 49,465
Receivable for investments sold -- --
Receivable for trust shares sold 11,260 1,566,141
Receivable for variation margin -- --
Receivable from affiliate -- --
-------------- --------------
Total Assets 48,238,489 420,366,712
-------------- --------------
Liabilities
Distributions payable 10,419 6,308
Accrued expenses 2,632 87,488
Payable for investments purchased 7,776,281 1,885,598
Payable for fund shares redeemed -- 1,735,615
Payable for variation margin -- --
Payable to affiliate 23,173 195,011
-------------- --------------
Total Liabilities 7,812,505 3,910,020
-------------- --------------
Net Assets
Trust capital stock (beneficial interest) 37,834,405 416,421,481
Accumulated undistributed net investment income/(loss) (279,639) 35,211
Accumulated undistributed net realized gain/(loss) on
investments and foreign currency transactions 2,023,135 --
Net unrealized appreciation/(depreciation) on:
Investments 848,083 --
Futures contracts -- --
-------------- --------------
Total Net Assets $40,425,984 $416,456,692
-------------- --------------
Class A share capital -- $301,766,074
Shares of beneficial interest outstanding (Class A) -- 301,766,074
Net asset value per share -- $1.00
Maximum public offering price -- $1.00
Class B share capital -- $2,278,123
Shares of beneficial interest outstanding (Class B) -- 2,278,123
Net asset value per share -- $1.00
Institutional Class share capital $40,425,984 $112,412,495
Shares of beneficial interest outstanding
(Institutional Class) 3,768,529 112,412,495
Net asset value per share $10.73 $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
For the six months ended Technology Aggressive Small Cap Small Cap
October 31, 2003 (unaudited) Stock Fund Growth Fund Stock Fund Index Fund II
- ------------------------------------------------------------------------------------------------------------------
Investment Income
Dividends $72,470 $190,769 $1,054,704 $123,021
Taxable interest 3,055 -- 38,177 --
Foreign dividend tax witholding (95) (509) (1,026) (64)
------------- ------------- ------------- -------------
Total Investment Income 75,430 190,260 1,091,855 122,957
------------- ------------- ------------- -------------
Expenses
Adviser fees 154,291 160,290 1,164,064 34,039
Subadviser fees -- -- -- --
Administrative service and pricing fees 16,459 16,831 32,450 18,802
Audit and Legal fees 8,250 8,832 8,740 8,096
Custody fees 4,373 13,248 24,876 9,205
Distribution expense Class A 44,318 41,867 389,164 30,619
Distribution expense Class B 15,361 17,403 115,576 13,681
Printing and postage expense Class A 43,253 43,262 169,266 12,780
Printing and postage expense Class B 5,888 6,265 21,177 1,840
Printing and postage expense Institutional Class -- 92 55 --
SEC and state registration expense 31,215 31,326 41,569 18,905
Shareholder maintenance fees Class A 34,942 34,025 128,792 8,928
Shareholder maintenance fees Class B 4,324 4,605 16,565 1,380
Shareholder maintenance fees Institutional Class 9 15 46 --
Transfer agent fees Class A 95,680 94,760 354,200 24,572
Transfer agent fees Class B 11,955 12,880 48,760 3,680
Transfer agent fees Institutional Class 37 37 129 --
Trustees' fees and insurance expenses 2,545 2,349 7,146 2,031
Other expenses, net 583 1,042 1,598 380
------------- ------------- ------------- -------------
Total Expenses Before Reimbursement 473,483 489,129 2,524,173 188,938
------------- ------------- ------------- -------------
Less:
Reimbursement from adviser (208,707) (2,181) (32,971) (21,749)
Fees paid indirectly (43) -- (36) (5)
------------- ------------- ------------- -------------
Total Net Expenses 264,733 486,948 2,491,166 167,184
------------- ------------- ------------- -------------
Net Investment Income/(Loss) (189,303) (296,688) (1,399,311) (44,227)
------------- ------------- ------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments (2,356,894) 1,513,031 23,754,330 172,047
Written options contracts -- (2,538) -- --
Futures contracts -- -- -- 98,887
Foreign currency transactions -- -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 13,567,555 4,616,069 63,289,556 6,309,600
Written options contracts -- 48 -- --
Futures contracts -- -- -- 40,277
Foreign currency forward contracts -- -- -- --
Foreign currency transactions -- -- -- --
Net Realized and Unrealized Gains on ------------- ------------- ------------- -------------
Investments and Foreign Currency Transactions 11,210,661 6,126,610 87,043,886 6,620,811
------------- ------------- ------------- -------------
Net Increase in Net Assets Resulting
From Operations $11,021,358 $5,829,922 $85,644,575 $6,576,584
------------- ------------- ------------- -------------
The AAL Mutual Funds
Statement of Operations -- continued
AAL AAL AAL
For the six months ended Small Cap Mid Cap Mid Cap
October 31, 2003 (unaudited) Value Fund Stock Fund Index Fund
- ---------------------------------------------------------------------------------------------------
Investment Income
Dividends $185,989 $3,455,977 $142,277
Taxable interest 808 165,421 --
Foreign dividend tax witholding (630) (10,724) --
------------- ------------- -------------
Total Investment Income 186,167 3,610,674 142,277
------------- ------------- -------------
Expenses
Adviser fees 150,869 2,510,294 30,910
Subadviser fees -- -- --
Administrative service and pricing fees 17,085 45,122 17,066
Audit and Legal fees 7,728 10,672 8,556
Custody fees 23,028 16,983 6,457
Distribution expense Class A 42,453 886,089 --
Distribution expense Class B 18,143 121,943 --
Printing and postage expense Class A 26,666 285,280 --
Printing and postage expense Class B 3,404 24,840 --
Printing and postage expense Institutional Class -- 74 --
SEC and state registration expense 59,002 59,695 12,974
Shareholder maintenance fees Class A 17,480 202,454 --
Shareholder maintenance fees Class B 2,392 18,400 --
Shareholder maintenance fees Institutional Class -- 55 37
Transfer agent fees Class A 51,520 625,457 --
Transfer agent fees Class B 6,532 53,360 --
Transfer agent fees Institutional Class 18 147 110
Trustees' fees and insurance expenses 2,561 13,283 2,135
Other expenses, net 383 1,144 211
------------- ------------- -------------
Total Expenses Before Reimbursement 429,264 4,875,292 78,456
------------- ------------- -------------
Less:
Reimbursement from adviser (113,671) (30,584) (981)
Fees paid indirectly (28) (55) (8)
------------- ------------- -------------
Total Net Expenses 315,565 4,844,653 77,467
------------- ------------- -------------
Net Investment Income/(Loss) (129,398) (1,233,979) 64,810
------------- ------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments 2,242,731 5,020,368 47,015
Written options contracts -- -- --
Futures contracts -- -- 216,616
Foreign currency transactions -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 8,987,359 146,351,059 5,112,429
Written options contracts -- -- --
Futures contracts -- -- 10,436
Foreign currency forward contracts -- -- --
Foreign currency transactions -- -- --
Net Realized and Unrealized Gains on ------------- ------------- -------------
Investments and Foreign Currency Transactions 11,230,090 151,371,427 5,386,496
------------- ------------- -------------
Net Increase in Net Assets Resulting
From Operations $11,100,692 $150,137,448 $5,451,306
------------- ------------- -------------
The AAL Mutual Funds
Statement of Operations -- continued
For the six months ended AAL AAL AAL
October 31, 2003 (unaudited) Mid Cap International Capital
Index Fund II Fund Growth Fund
- ---------------------------------------------------------------------------------------------------
Investment Income
Dividends $189,590 $1,939,323 $20,308,789
Taxable interest -- 8,996 741,526
Foreign dividend tax witholding -- (248,653) --
------------- ------------- -------------
Total Investment Income 189,590 1,699,666 21,050,315
------------- ------------- -------------
Expenses
Adviser fees 40,973 187,850 7,799,721
Subadviser fees -- 275,558 --
Administrative service and pricing fees 17,090 35,616 86,217
Audit and Legal fees 8,188 10,115 27,623
Custody fees 9,212 38,644 41,627
Distribution expense Class A 36,547 175,600 3,420,835
Distribution expense Class B 17,704 35,068 408,570
Printing and postage expense Class A 16,181 110,468 690,067
Printing and postage expense Class B 2,852 11,414 66,240
Printing and postage expense Institutional Class -- 37 184
SEC and state registration expense 19,653 32,527 74,948
Shareholder maintenance fees Class A 12,056 85,534 524,310
Shareholder maintenance fees Class B 2,024 8,280 47,806
Shareholder maintenance fees Institutional Class -- 28 101
Transfer agent fees Class A 33,126 239,165 1,453,472
Transfer agent fees Class B 5,520 23,920 138,000
Transfer agent fees Institutional Class -- 83 276
Trustees' fees and insurance expenses 2,505 4,303 45,780
Other expenses, net 455 1,127 7,270
------------- ------------- -------------
Total Expenses Before Reimbursement 224,086 1,275,337 14,833,047
------------- ------------- -------------
Less:
Reimbursement from adviser (10,069) -- (19,897)
Fees paid indirectly (3) (4) (227)
------------- ------------- -------------
Total Net Expenses 214,014 1,275,333 14,812,923
------------- ------------- -------------
Net Investment Income/(Loss) (24,424) 424,333 6,237,392
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments (2,124,323) 888,703 (66,041,930)
Written options contracts -- -- --
Futures contracts 304,924 -- --
Foreign currency transactions -- 72,636 --
Change in net unrealized appreciation/(depreciation) on
Investments 9,091,216 29,205,141 364,428,584
Written options contracts -- -- --
Futures contracts (27,599) -- --
Foreign currency forward contracts -- 11,177 --
Foreign currency transactions -- (28,809) --
Net Realized and Unrealized Gains on ------------- ------------- -------------
Investments and Foreign Currency Transactions 7,244,218 30,148,848 298,386,654
------------- ------------- -------------
Net Increase in Net Assets Resulting
From Operations $7,219,794 $30,573,181 $304,624,046
------------- ------------- -------------
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
For the six months ended Company Company Income Balanced
October 31, 2003 (unaudited) Index Fund Index Fund II Fund Fund
- ------------------------------------------------------------------------------------------------------------------
Investment Income
Dividends $273,266 $313,506 $2,369,484 $1,683,324
Taxable interest 260 80 -- 3,623,120
Tax exempt interest -- -- -- --
Foreign dividend tax witholding -- -- (9,581) (26)
------------- ------------- ------------- -------------
Total Investment Income 273,526 313,586 2,359,903 5,306,418
------------- ------------- ------------- -------------
Expenses
Adviser fees 36,388 44,984 541,578 1,108,313
Subadviser fees -- -- -- --
Administrative service and pricing fees 17,436 17,199 32,785 34,954
Audit and Legal fees 8,096 8,556 8,280 9,200
Custody fees 11,047 7,387 8,359 18,403
Distribution expense Class A -- 40,600 277,041 338,616
Distribution expense Class B -- 17,535 40,582 96,773
Printing and postage expense Class A -- 16,357 81,890 70,840
Printing and postage expense Class B -- 2,755 7,365 10,488
Printing and postage expense Institutional Class -- -- 64 37
SEC and state registration expense 11,846 20,339 30,117 28,520
Shareholder maintenance fees Class A -- 12,052 64,318 55,200
Shareholder maintenance fees Class B -- 2,024 4,607 7,544
Shareholder maintenance fees Institutional Class 37 -- 46 18
Transfer agent fees Class A -- 33,120 174,822 152,706
Transfer agent fees Class B -- 5,520 14,720 21,156
Transfer agent fees Institutional Class 83 -- 120 66
Trustees' fees and insurance expenses 3,260 2,512 4,952 7,869
Other expenses, net 870 432 1,582 894
------------- ------------- ------------- -------------
Total Expenses Before Reimbursement 89,063 231,372 1,293,228 1,961,597
------------- ------------- ------------- -------------
Less:
Reimbursement from adviser (1,125) (136,521) (13,898) (27,290)
Fees paid indirectly (16) (21) -- (291)
------------- ------------- ------------- -------------
Total Net Expenses 87,922 94,830 1,279,330 1,934,016
------------- ------------- ------------- -------------
Net Investment Income 185,604 218,756 1,080,573 3,372,402
------------- ------------- ------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments (6,946,335) (127,986) 734,752 (927,945)
Futures contracts 344,012 321,000 -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 11,431,595 4,632,529 32,440,579 26,182,362
Futures contracts (137,035) (74,618) -- --
Net Realized and Unrealized Gains/(Losses) on ------------- ------------- ------------- -------------
Investments and Foreign Currency Transactions 4,692,237 4,750,925 33,175,331 25,254,417
------------- ------------- ------------- -------------
Net Increase in Net Assets Resulting
From Operations $4,877,841 $4,969,681 $34,255,904 $28,626,819
------------- ------------- ------------- -------------
The AAL Mutual Funds
Statement of Operations -- continued
AAL AAL AAL
For the six months ended High Yield Municipal Bond
October 31, 2003 (unaudited) Bond Fund Bond Fund Fund
- ---------------------------------------------------------------------------------------------------
Investment Income
Dividends $4,189 $ -- $35,521
Taxable interest 5,409,672 172,304 12,968,616
Tax exempt interest -- 16,815,030 --
Foreign dividend tax witholding -- -- --
------------- ------------- -------------
Total Investment Income 5,413,861 16,987,334 13,004,137
------------- ------------- -------------
Expenses
Adviser fees 197,840 1,536,563 1,242,546
Subadviser fees 164,867 -- --
Administrative service and pricing fees 30,234 46,202 28,271
Audit and Legal fees 9,930 10,856 10,120
Custody fees 7,523 13,161 11,048
Distribution expense Class A 153,111 832,989 637,209
Distribution expense Class B 29,951 64,788 66,934
Printing and postage expense Class A 22,072 51,424 90,160
Printing and postage expense Class B 2,208 2,300 5,792
Printing and postage expense Institutional Class -- 9 74
SEC and state registration expense 24,840 41,530 37,821
Shareholder maintenance fees Class A 22,080 36,795 68,068
Shareholder maintenance fees Class B 1,932 1,564 4,592
Shareholder maintenance fees Institutional Class 18 9 64
Transfer agent fees Class A 62,543 109,480 193,118
Transfer agent fees Class B 5,796 4,508 11,960
Transfer agent fees Institutional Class 64 18 175
Trustees' fees and insurance expenses 4,151 12,541 10,329
Other expenses, net 401 441 929
------------- ------------- -------------
Total Expenses Before Reimbursement 739,561 2,765,178 2,419,210
------------- ------------- -------------
Less:
Reimbursement from adviser -- -- (24,395)
Fees paid indirectly (169) (291) --
------------- ------------- -------------
Total Net Expenses 739,392 2,764,887 2,394,815
------------- ------------- -------------
Net Investment Income 4,674,469 14,222,447 10,609,322
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments 3,710,484 506,133 6,948,828
Futures contracts -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 2,447,882 (6,736,264) (10,151,353)
Futures contracts -- (15,022) --
Net Realized and Unrealized Gains/(Losses) on ------------- ------------- -------------
Investments and Foreign Currency Transactions 6,158,366 (6,245,153) (3,202,525)
------------- ------------- -------------
Net Increase in Net Assets Resulting
From Operations $10,832,835 $7,977,294 $7,406,797
------------- ------------- -------------
The AAL Mutual Funds
Statement of Operations -- continued
AAL AAL
For the six months ended Bond Index Money Market
October 31, 2003 (unaudited) Fund Fund
- ------------------------------------------------------------------------------------
Investment Income
Dividends $9,001 $11,279
Taxable interest 1,089,211 2,537,796
Tax exempt interest -- --
Foreign dividend tax witholding -- --
------------- -------------
Total Investment Income 1,098,212 2,549,075
------------- -------------
Expenses
Adviser fees 64,684 1,072,667
Subadviser fees -- --
Administrative service and pricing fees 17,946 27,051
Audit and Legal fees 8,193 8,096
Custody fees 7,406 14,687
Distribution expense Class A -- 203,978
Distribution expense Class B -- 11,300
Printing and postage expense Class A -- 100,991
Printing and postage expense Class B -- 1,834
Printing and postage expense Institutional Class -- 184
SEC and state registration expense 9,236 46,204
Shareholder maintenance fees Class A -- 74,465
Shareholder maintenance fees Class B -- 920
Shareholder maintenance fees Institutional Class 37 110
Transfer agent fees Class A -- 234,447
Transfer agent fees Class B -- 3,036
Transfer agent fees Institutional Class 110 368
Trustees' fees and insurance expenses 3,446 9,040
Other expenses, net 508 987
------------- -------------
Total Expenses Before Reimbursement 111,566 1,810,365
------------- -------------
Less:
Reimbursement from adviser (3,160) (180,428)
Fees paid indirectly (51) (164)
------------- -------------
Total Net Expenses 108,355 1,629,773
------------- -------------
Net Investment Income 989,857 919,302
------------- -------------
Realized and Unrealized Gains/(Losses) on
Investments and Foreign Currency Transactions
Net realized gains/(losses) on:
Investments 2,111,624 --
Futures contracts -- --
Change in net unrealized appreciation/(depreciation) on:
Investments (2,442,674) --
Futures contracts -- --
Net Realized and Unrealized Gains/(Losses) on ------------- -------------
Investments and Foreign Currency Transactions (331,050) --
------------- -------------
Net Increase in Net Assets Resulting
From Operations $658,807 $919,302
------------- -------------
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 six months 10/31/2003 10/31/2003
and year ended, respectively (unaudited) 04/30/2003 (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------------------------------------
Operations
Net investment loss $(189,303) $(661,069) $(296,688) $(611,674)
Net realized gains/(losses) on:
Investments (2,356,894) (6,715,842) 1,513,031 (13,764,368)
Written options contracts -- -- (2,538) --
Futures contracts -- -- -- --
Foreign currency transactions -- -- -- (55,592)
Change in net unrealized appreciation/(depreciation) on:
Investments 13,567,555 (733,387) 4,616,069 6,586,366
Written options contracts -- -- 48 --
Futures contracts -- -- -- --
Foreign currency forward contracts -- -- -- (11,235)
-------------- -------------- -------------- --------------
Net Change in Net Assets Resulting
From Operations 11,021,358 (8,110,298) 5,829,922 (7,856,503)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From Net Realized Gains -- -- -- --
-------------- -------------- -------------- --------------
Trust Share Transactions 2,305,068 359,069 887,216 (749,843)
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets 13,326,426 (7,751,229) 6,717,138 (8,606,346)
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 34,113,386 41,864,615 36,371,470 44,977,816
-------------- -------------- -------------- --------------
Net Assets, End of Period $47,439,812 $34,113,386 $43,088,608 $36,371,470
-------------- -------------- -------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL Small Cap Stock Fund AAL Small Cap Index Fund II
-----------------------------------------------------------
For the six months 10/31/2003 10/31/2003
and year ended, respectively (unaudited) 4/30/2003 (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------------------------------------
Operations
Net investment loss $(1,399,311) $(2,608,288) $(44,227) $(111,415)
Net realized gains/(losses) on:
Investments 23,754,330 (25,870,944) 172,047 (105,395)
Written options contracts -- -- -- --
Futures contracts -- -- 98,887 --
Foreign currency transactions -- -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 63,289,556 (58,852,217) 6,309,600 (5,162,810)
Written options contracts -- -- -- --
Futures contracts -- -- 40,277 --
Foreign currency forward contracts -- -- -- --
-------------- -------------- -------------- --------------
Net Change in Net Assets Resulting
From Operations 85,644,575 (87,331,449) 6,576,584 (5,379,620)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From Net Realized Gains -- -- -- (135,306)
-------------- -------------- -------------- --------------
Trust Share Transactions (1,239,039) (1,577,965) 2,406,961 4,599,568
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets 84,405,536 (88,909,414) 8,983,545 (915,358)
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 294,534,826 383,444,240 22,722,079 23,637,437
-------------- -------------- -------------- --------------
Net Assets, End of Period $378,940,362 $294,534,826 $31,705,624 $22,722,079
-------------- -------------- -------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL Small Cap Value Fund
-----------------------------
For the six months 10/31/2003
and year ended, respectively (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------
Operations
Net investment loss $(129,398) $(258,668)
Net realized gains/(losses) on:
Investments 2,242,731 (5,692,055)
Written options contracts -- --
Futures contracts -- --
Foreign currency transactions -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 8,987,359 (208,280)
Written options contracts -- --
Futures contracts -- --
Foreign currency forward contracts -- --
-------------- --------------
Net Change in Net Assets Resulting
From Operations 11,100,692 (6,159,003)
-------------- --------------
Distributions to Shareholders
-------------- --------------
From Net Realized Gains -- (206,763)
Trust Share Transactions 5,530,968 12,741,195
-------------- --------------
Net Increase/(Decrease) in Net Assets 16,631,660 6,375,429
-------------- --------------
Net Assets, Beginning of Period 34,443,438 28,068,009
-------------- --------------
Net Assets, End of Period $51,075,098 $34,443,438
-------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL Mid Cap Stock Fund AAL Mid Cap Index Fund
------------------------------------------------------------
For the six months 10/31/2003 10/31/2003
and year ended, respectively (unaudited) 4/30/2003 (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------------------------------------
Operations
Net investment income/(loss) $(1,233,979) $(1,464,241) $64,810 $182,971
Net realized gains/(losses) on:
Investments 5,020,368 (43,113,627) 47,015 383,610
Futures contracts -- -- 216,616 (49,260)
Foreign currency transactions -- -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 146,351,059 (115,065,272) 5,112,429 (4,893,181)
Futures contracts -- -- 10,436 33,014
Foreign currency forward contracts -- -- -- --
Foreign currency transactions -- -- -- --
-------------- -------------- -------------- --------------
Net Change in Net Assets Resulting
From Operations 150,137,448 (159,643,140) 5,451,306 (4,342,846)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income -- -- -- (189,081)
From net realized gains -- -- -- (558,179)
-------------- -------------- -------------- --------------
Total Distributions to Shareholders -- -- -- (747,260)
-------------- -------------- -------------- --------------
Trust Share Transactions (24,777,675) (47,410,308) 1,684,056 1,515,301
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets 125,359,773 (207,053,448) 7,135,362 (3,574,805)
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 687,295,666 894,349,114 20,762,250 24,337,055
-------------- -------------- -------------- --------------
Net Assets, End of Period $812,655,439 $687,295,666 $27,897,612 $20,762,250
-------------- -------------- -------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL Mid Cap Index Fund II AAL International Fund
------------------------------------------------------------
For the six months 10/31/2003 10/31/2003
and year ended, respectively (unaudited) 4/30/2003 (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------------------------------------
Operations
Net investment income/(loss) $(24,424) $(30,058) $424,333 $215,528
Net realized gains/(losses) on:
Investments (2,124,323) (8,091) 888,703 (22,626,640)
Futures contracts 304,924 (97,769) -- --
Foreign currency transactions -- -- 72,636 (23,209)
Change in net unrealized appreciation/(depreciation) on:
Investments 9,091,216 (6,119,609) 29,205,141 (18,647,688)
Futures contracts (27,599) 40,615 -- --
Foreign currency forward contracts -- -- 11,177 (10,245)
Foreign currency transactions -- -- (28,809) 48,594
-------------- -------------- -------------- --------------
Net Change in Net Assets Resulting
From Operations 7,219,794 (6,214,912) 30,573,181 (41,043,660)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income -- -- -- (615,956)
From net realized gains -- (330,723) -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders -- (330,723) -- (615,956)
-------------- -------------- -------------- --------------
Trust Share Transactions (3,123,465) 6,630,717 (3,109,890) (2,438,838)
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets 4,096,329 85,082 27,463,291 (44,098,454)
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 31,960,037 31,874,955 135,696,168 179,794,622
-------------- -------------- -------------- --------------
Net Assets, End of Period $36,056,366 $31,960,037 $163,159,459 $135,696,168
-------------- -------------- -------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL Capital Growth Fund
-----------------------------
For the six months 10/31/2003
and year ended, respectively (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------
Operations
Net investment income/(loss) $6,237,392 $10,279,075
Net realized gains/(losses) on:
Investments (66,041,930) 41,379,945
Futures contracts -- --
Foreign currency transactions -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 364,428,584 (592,144,065)
Futures contracts -- --
Foreign currency forward contracts -- --
Foreign currency transactions -- --
-------------- --------------
Net Change in Net Assets Resulting
From Operations 304,624,046 (540,485,045)
-------------- --------------
Distributions to Shareholders
From net investment income (4,793,965) (8,525,456)
From net realized gains -- --
-------------- --------------
Total Distributions to Shareholders (4,793,965) (8,525,456)
-------------- --------------
Trust Share Transactions (93,302,380) (281,236,979)
-------------- --------------
Net Increase/(Decrease) in Net Assets 206,527,701 (830,247,480)
-------------- --------------
Net Assets, Beginning of Period 2,747,571,080 3,577,818,560
-------------- --------------
Net Assets, End of Period $2,954,098,781 $2,747,571,080
-------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL Large Company Index Fund AAL Large Company Index Fund II
------------------------------------------------------------
For the six months 10/31/2003 10/31/2003
and year ended, respectively (unaudited) 4/30/2003 (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $185,604 $896,812 $218,756 $242,725
Net realized gains/(losses) on:
Investments (6,946,335) (4,052,317) (127,986) (1,705,994)
Futures contracts 344,012 (54,060) 321,000 (102,432)
Change in net unrealized appreciation/(depreciation) on:
Investments 11,431,595 (5,927,155) 4,632,529 (3,345,226)
Futures contracts (137,035) 143,492 (74,618) 83,795
-------------- -------------- -------------- --------------
Net Change in Net Assets Resulting
From Operations 4,877,841 (8,993,228) 4,969,681 (4,827,132)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income -- (823,832) -- (122,309)
Return of capital -- -- -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders -- (823,832) -- (122,309)
-------------- -------------- -------------- --------------
Trust Share Transactions (41,988,886) 8,904,399 5,389,699 3,367,131
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets (37,111,045) (912,661) 10,359,380 (1,582,310)
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 62,066,525 62,979,186 31,158,825 32,741,135
-------------- -------------- -------------- --------------
Net Assets, End of Period $24,955,480 $62,066,525 $41,518,205 $31,158,825
-------------- -------------- -------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL Equity Income Fund AAL Balanced Fund
------------------------------------------------------------
For the six months 10/31/2003 10/31/2003
and year ended, respectively (unaudited) 4/30/2003 (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $1,080,573 $2,495,047 $3,372,402 $6,074,943
Net realized gains/(losses) on:
Investments 734,752 (26,857,628) (927,945) (6,673,563)
Futures contracts -- -- -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 32,440,579 (40,008,522) 26,182,362 (16,067,320)
Futures contracts -- -- -- --
-------------- -------------- -------------- --------------
Net Change in Net Assets Resulting
From Operations 34,255,904 (64,371,103) 28,626,819 (16,665,940)
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income (836,793) (2,412,080) (3,727,928) (6,481,897)
Return of capital -- (224,768) -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders (836,793) (2,636,848) (3,727,928) (6,481,897)
-------------- -------------- -------------- --------------
Trust Share Transactions (9,899,955) (22,644,092) (4,819,623) 79,470,705
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets 23,519,156 (89,652,043) 20,079,268 56,322,868
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 224,640,186 314,292,229 387,978,307 331,655,439
-------------- -------------- -------------- --------------
Net Assets, End of Period $248,159,342 $224,640,186 $408,057,575 $387,978,307
-------------- -------------- -------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL High Yield Bond Fund
-----------------------------
For the six months 10/31/2003
and year ended, respectively (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------
Operations
Net investment income $4,674,469 $10,223,909
Net realized gains/(losses) on:
Investments 3,710,484 (4,722,489)
Futures contracts -- --
Change in net unrealized appreciation/(depreciation) on:
Investments 2,447,882 5,907,656
Futures contracts -- --
-------------- --------------
Net Change in Net Assets Resulting
From Operations 10,832,835 11,409,076
-------------- --------------
Distributions to Shareholders
From net investment income (4,834,122) (10,350,092)
Return of capital -- --
-------------- --------------
Total Distributions to Shareholders (4,780,603) (10,350,092)
-------------- --------------
Trust Share Transactions 5,215,165 (4,034,434)
-------------- --------------
Net Increase/(Decrease) in Net Assets 11,267,397 (2,975,450)
-------------- --------------
Net Assets, Beginning of Period 126,590,890 129,566,340
-------------- --------------
Net Assets, End of Period $137,858,287 $126,590,890
-------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL Municipal Bond Fund AAL Bond Fund
------------------------------------------------------------
For the six months 10/31/2003 10/31/2003
and year ended, respectively (unaudited) 4/30/2003 (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $14,222,447 $29,154,850 $10,609,322 $22,779,780
Net realized gains on:
Investments 506,133 1,328,662 6,948,828 11,395,757
Change in net unrealized appreciation/(depreciation) on:
Investments (6,736,264) 16,557,031 (10,151,353) 16,823,088
Futures contracts (15,022) -- -- --
-------------- -------------- -------------- --------------
Net Change in Net Assets Resulting
From Operations 7,977,294 47,040,543 7,406,797 50,998,625
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income (14,222,446) (29,154,858) (12,075,902) (24,313,592)
From net realized gains -- -- -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders (14,222,446) (29,154,858) (12,075,902) (24,313,592)
-------------- -------------- -------------- --------------
Trust Share Transactions (19,460,895) 54,629,516 (38,785,525) 59,992,234
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets (25,706,047) 72,515,201 (43,454,630) 86,677,267
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 687,387,771 614,872,570 568,914,265 482,236,998
-------------- -------------- -------------- --------------
Net Assets, End of Period $661,681,724 $687,387,771 $525,459,635 $568,914,265
-------------- -------------- -------------- --------------
The AAL Mutual Funds
Statement of Changes in Net Assets -- continued
AAL Bond Index Fund AAL Money Market Fund
------------------------------------------------------------
For the six months 10/31/2003 10/31/2003
and year ended, respectively (unaudited) 4/30/2003 (unaudited) 4/30/2003
- ------------------------------------------------------------------------------------------------------------------
Operations
Net investment income $989,857 $3,647,249 $919,302 $4,644,725
Net realized gains on:
Investments 2,111,624 901,692 -- --
Change in net unrealized appreciation/(depreciation) on:
Investments (2,442,674) 3,066,160 -- --
Futures contracts -- -- -- --
-------------- -------------- -------------- --------------
Net Change in Net Assets Resulting
From Operations 658,807 7,615,101 919,302 4,644,725
-------------- -------------- -------------- --------------
Distributions to Shareholders
From net investment income (1,288,129) (4,228,371) (919,302) (4,644,725)
From net realized gains -- -- -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders (1,288,129) (4,228,371) (919,302) (4,644,725)
-------------- -------------- -------------- --------------
Trust Share Transactions (39,963,092) 18,718,618 (27,406,451) (76,467,270)
-------------- -------------- -------------- --------------
Net Increase/(Decrease) in Net Assets (40,592,414) 22,105,348 (27,406,451) (76,467,270)
-------------- -------------- -------------- --------------
Net Assets, Beginning of Period 81,018,398 58,913,050 443,863,143 520,330,413
-------------- -------------- -------------- --------------
Net Assets, End of Period $40,425,984 $81,018,398 $416,456,692 $443,863,143
-------------- -------------- -------------- --------------
The accompanying notes to the financial statements are an integral part of this statement.
The AAL Mutual Funds
Notes to Financial Statements
As of October 31, 2003 (unaudited)
(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 U.S. Target Fund Series Government Zero Coupon 2006 of the Trust
is printed under a separate semiannual report.
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.
(2) SIGNIFICANT ACCOUNTING POLICIES
(A) 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 AAL Money Market Fund,
short-term securities with maturities of 60 days or less are valued at
amortized cost. Short-term securities held by the AAL 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 AAL 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 under the
direction of the Board of Trustees. As of October 31, 2003, three
securities in The AAL High Yield Bond Fund were valued at fair value,
which represents 0.99% of the Fund's net assets. As many foreign
markets close before the U.S. markets, events may occur between the
close of the foreign market and the close of the U.S. markets that
could have a material impact on the valuation of foreign securities.
The Fund, under the supervision of the Board of Trustees, evaluates
the impacts of these events and may adjust the valuation of foreign
securities to reflect the fair value as of the close of the U.S.
markets.
(B) 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 Funds 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.
(C) Foreign Currency Contracts -- In connection with purchases and
sales of securities denominated in foreign currencies, all Funds
except the Money Market Fund may enter into forward currency
contracts. Additionally, the Funds 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 funds 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.
(D) 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.
(E) 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.
(F) Income and Expenses -- Estimated expenses are accrued daily. The
Funds are charged for those expenses that are directly attributable to
them. 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, expenses which are not
class-specific 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 all 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.
(G) 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.
(H) 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 paid at least annually for all Funds.
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 Capital Growth Fund are declared and paid
semi-annually. 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 paid monthly.
(I) 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 fluctuations.
Option contracts are valued daily and unrealized appreciation or
depreciation is recorded. A Fund will realize a gain or loss upon
expiration or closing of the option transaction. When an option is
exercised, the proceeds upon 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. During the six months ended
October 31, 2003, the AAL Aggressive Growth Fund engaged in this type
of investment.
(J) Financial Futures Contracts -- Certain Funds may use futures
contracts to manage the exposure to interest rate and market
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 six
months ended October 31, 2003, 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, The AAL Large Company Index Fund II, and The AAL
Municipal Bond Fund engaged in this type of investment.
(K) 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
$624,268, $2,316,846 and $123,684, respectively, from such fees for
the six months ended October 31, 2003.
(L) Securities Lending -- Effective October 31, 2003, The AAL Mutual
Funds entered into a Securities Lending Agreement (the "Agreement")
with State Street Bank. The Agreement allows the Funds to lend
securities to qualified institutional borrowers for the purpose of
earning additional income. Pursuant to the Agreement, all loaned
securities are collateralized by cash equal to at least 102% of the
value of the loaned securities, plus any accrued interest. All cash
collateral received is invested in a State Street Bank Money Market
fund. For the six months ended October 31, 2003, no Funds participated
in this type of investment activity.
(M) 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. A Fund may not experience similar
performance as its assets grow.
(N) 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.
(O) Credit Risk -- The Funds may be susceptible to credit risk to the
extent an issuer defaults on its payment obligation. The Funds' policy
is to monitor the creditworthiness of issuers. Interest accruals on
defaulted securities are monitored for ability to collect payments in
default and are adjusted accordingly.
(P) 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.
(Q) 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
(A) Investment Advisory Fees -- The Trust has entered into an
Investment Advisory Agreement with Thrivent Investment Management Inc.
(Thrivent Investment Mgt.), ("the Adviser"). Thrivent Investment Mgt.
is a wholly owned subsidiary of Thrivent Financial for Lutherans
(Thrivent Financial). Under the Advisory Agreement, each of the Funds
pays 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%
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 the Fund's 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, which is paid by the
Adviser from its advisory fee, is 0.25% of the Fund's average daily
net assets.
Beginning January 1, 2003, the following voluntary expense
reimbursements went in to 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 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, pursuant 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.
(B) Distribution and Shareholder Servicing Plans -- Thrivent
Investment Mgt. is also the Trust's distributor. 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 shareholder servicing 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
shareholder servicing fee.
On the Class B Shares, a shareholder servicing 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
shareholder servicing fees and 12b-1 distribution fees, respectively.
There are no 12b-1 distribution or shareholder servicing
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.
(C) Sales Charges and Other Fees -- For the six months ended October
31, 2003, Thrivent Investment Mgt. received $6,806,655 of aggregate
underwriting concessions from the sales of the Trust's Class A and B
shares and aggregate contingent deferred sales charges of $129,484
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 Accounting Services Agreement with
Thrivent Financial pursuant to which Thrivent Financial provides
certain administrative personnel and services. For the six months
ended October 31, 2003, Thrivent Financial received aggregate fees for
accounting personnel and services of $439,250 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 $34,300 in
fees from the Trust for the six months ended October 31, 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
six months ended October 31, 2003, no directed brokerage credits 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.
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 $58,860 $15,106
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 $103,828 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 1,076,464
AAL Small Cap Stock 17,277,715
AAL Small Cap Value 2,505,605
AAL Mid Cap Stock 14,763,201
AAL Mid Cap Index 98,237
AAL Mid Cap Index II 265,939
AAL International 7,069,282
AAL Large Company Index 886,610
AAL Large Company Index II 931,696
AAL Equity Income 12,944,833
AAL Balanced 3,141,718
AAL High Yield Bond 2,077,813
These amounts are deferred 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 October 31, 2003, the gross unrealized appreciation and
depreciation of investments were as follows:
Net Unrealized
Federal Unrealized Unrealized Appreciation
Fund Tax Cost Appreciation Depreciation (Depreciation)
- --------------------------------------------------------------------------------------------------
AAL Technology Stock $50,252,048 $4,780,646 $(7,498,374) $(2,717,728)
AAL Aggressive Growth 36,691,648 7,387,745 (879,712) 6,508,033
AAL Small Cap Stock 315,029,206 70,299,467 (4,783,841) 65,515,626
AAL Small Cap Index II 27,268,170 7,153,320 (3,011,811) 4,141,509
AAL Small Cap Value 39,200,467 11,776,472 (66,228) 11,710,244
AAL Mid Cap Stock 693,330,509 133,853,560 (16,011,246) 117,842,314
AAL Mid Cap Index 25,131,756 5,485,231 (2,752,912) 2,732,319
AAL Mid Cap Index II 31,035,916 7,494,468 (2,474,560) 5,019,908
AAL International 150,335,710 17,643,941 (8,548,265) 9,095,676
AAL Capital Growth 1,946,630,478 1,099,706,169 (92,050,822) 1,007,655,347
AAL Large Company Index 26,400,405 2,094,420 (3,636,503) (1,542,083)
AAL Large Company Index II 46,285,460 3,008,443 (8,052,428) (5,043,985)
AAL Equity Income 227,347,105 32,508,798 (11,821,039) 20,687,759
AAL Balanced 427,775,457 27,205,943 (12,204,140) 15,001,803
AAL High Yield Bond 128,028,184 7,933,592 (1,113,685) 6,819,907
AAL Municipal Bond 623,301,360 44,146,896 (2,356,647) 41,790,249
AAL Bond 647,798,389 11,286,608 (2,002,319) 9,284,289
AAL Bond Index 46,918,340 1,035,413 (187,330) 848,083
AAL Money Market 418,743,567 -- -- --
(5) DISTRIBUTIONS BY CLASS
Distributions to shareholder, by class, for the six months ended
October 31, 2003 and the year ended April 30, 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 $-- $-- $-- $578,875 $-- $37,081
The AAL Capital Growth Fund 4,509,832 -- 284,133 8,119,482 -- 405,974
The AAL Large Company Index Fund II -- -- -- 122,309 -- --
The AAL Equity Income Fund * 768,469 -- 68,324 2,535,494 5,043 96,311
The AAL Balanced Fund 2,385,412 80,943 1,261,573 5,111,830 221,480 1,148,587
The AAL High Yield Bond Fund 4,458,801 190,356 131,446 9,575,283 511,785 263,024
The AAL Municipal Bond Fund 13,924,825 217,582 80,039 28,498,469 433,744 222,645
The AAL Bond Fund 11,152,929 229,623 693,350 22,638,728 379,801 1,295,063
The AAL Money Market Fund 599,395 1,107 318,800 3,391,021 12,976 1,240,728
* 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 a return of capital for the six months ended October 31,
2003.
Net Realized Gains
------------------------------------------------------------------------------------
2002 2003
--------------------------------------- -----------------------------------------
Institutional Institutional
Fund Class A Class B Class Class A Class B Class
- ------------------------------------ ---------- ---------- ------------- ---------- ---------- -------------
The AAL Small Cap Index Fund II $-- $-- $-- $123,156 $12,150 $--
The AAL Small Cap Value Fund -- -- -- 168,998 16,195 21,570
The AAL Mid Cap Index Fund II -- -- -- 302,359 28,364 --
(6) SECURITY TRANSACTIONS
(A) Purchases and Sales of Investment Securities -- For the six months
ended October 31, 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 $9,371 $7,952
The AAL Aggressive Growth Fund 23,549 22,628
The AAL Small Cap Stock Fund 211,242 222,034
The AAL Small Cap Index Fund II 2,394 1,507
The AAL Small Cap Value Fund 23,876 19,177
The AAL Mid Cap Stock Fund 346,500 381,426
The AAL Mid Cap Index Fund 2,473 1,007
The AAL Mid Cap Index Fund II 10,716 4,727
The AAL International Fund 54,492 61,446
The AAL Capital Growth Fund 106,401 403,787
The AAL Large Company Index Fund 4,438 43,797
The AAL Large Company Index Fund II 6,090 312
The AAL Equity Income Fund 27,375 37,274
The AAL Balanced Fund 51,892 88,979
The AAL High Yield Fund 61,591 57,816
The AAL Municipal Bond Fund 39,306 17,217
The AAL Bond Fund 183,391 190,344
The AAL Bond Index Fund 10,826 27,251
Purchases and sales of U.S. Government securities were:
In thousands
----------------------
Portfolio Purchases Sales
- ------------------------------------------------------
The AAL Balanced Fund $ 287,888 $ 288,390
The AAL Bond Fund 1,080,086 1,093,846
The AAL Bond Index Fund 77,347 99,083
(B) Investments in Restricted Securities -- The AAL High Yield Bond
Fund owns restricted securities that were purchased in private
placement transactions without registration under the Securities Act
of 1933. Unless such securities subsequently become registered, they
generally may be resold only in privately negotiated transactions with
a limited number of purchasers. The aggregate value of restricted
securities was $3,698,666 at October 31, 2003, which represented 2.68%
of the net assets of the AAL High Yield Bond Fund. The Funds have no
right to require registration of unregistered securities.
(C) Investments in High Yielding Securities -- The AAL High Yield Bond
Fund invests primarily in high yielding fixed income securities. The
AAL Bond Fund may also invest in high-yielding securities. These
securities will typically be in the lower rating categories or will be
non-rated and generally will involve more risk than securities in the
higher rating categories. Lower rated or unrated securities are more
likely to react to developments affecting market risk and credit risk
than are more highly rated securities, which react primarily to
movements in the general level of interest rates.
(D) Investments in Options and Futures Contracts -- The movement in
the price of the instrument underlying an option or futures contract
may not correlate perfectly with the movement in the prices of the
portfolio securities being hedged. A lack of correlation could render
the Fund's hedging strategy unsuccessful and could result in a loss to
the Fund. In the event that a liquid secondary market would not exist,
the Fund could be prevented from entering into a closing transaction,
which could result in additional losses to the Fund.
(E) Open Option Contracts -- The number of contracts and premium
amounts associated with call option contracts written during the six
months ended October 31, 2003, were as follows:
AAL Aggressive Growth Fund
--------------------------
Number of Premium
Contracts Amount
- --------------------------------------------------------------------
Balance at October 31, 2002 -- $--
Opened 28 4,462
Closed (24) (3,674)
-------------- ----------
Balance at October 31, 2003 4 $788
============== ==========
(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 mutual fund. A summary of transactions for the six
months ended October 31, 2003, in The AAL Money Market Fund, is
follows:
Gross Gross Balance of Shares Dividend Income
Purchases and Sales and Held October 31, Value May 1, 2003 --
Additions Reductions 2003 October 31, 2003 October 31, 2003
- ---------------------------------------------------------------------------------------------------------------------------------
The AAL Technology Stock Fund $2,355,868 $1,541,384 2,371,273 $2,371,273 $5,792
The AAL Aggressive Growth Fund 4,264,359 4,595,099 784,049 784,049 2,190
The AAL Small Cap Stock Fund 85,561,150 74,796,904 12,652,985 12,652,985 32,176
The AAL Small Cap Index Fund II 2,749,313 1,449,781 1,361,450 1,361,450 1,493
The AAL Small Cap Value Fund 8,009,973 7,069,920 2,306,928 2,306,928 5,969
The AAL Mid Cap Stock Fund 25,129,436 25,314,645 12,223,724 12,223,724 35,372
The AAL Mid Cap Index Fund 2,942,647 2,437,567 1,036,465 1,036,465 2,530
The AAL Mid Cap Index Fund II 3,639,634 3,512,625 662,990 662,990 3,011
The AAL Capital Growth Fund 38,454,086 34,456,036 12,538,511 12,538,511 25,231
The AAL Large Company Index Fund 4,480,626 6,607,381 585,963 585,963 2,974
The AAL Large Company Index Fund II 5,570,563 5,707,108 1,033,976 1,033,976 3,981
The AAL Equity Income Fund 14,639,861 12,881,124 5,977,697 5,977,697 19,606
The AAL Balanced Fund 36,211,260 36,093,316 12,713,096 12,713,096 34,505
The AAL Bond Fund 34,831,035 33,126,175 12,144,171 12,144,171 35,521
The AAL Bond Index Fund 562,158 2,531,653 1,949,475 1,949,475 9,001
(8) FORWARD CURRENCY CONTRACTS
As of October 31, 2003, The AAL International Fund had entered into
forward foreign currency contracts, as summarized below, resulting in
net unrealized appreciation of $27:
Unrealized
Expiration Contract Market Value Appreciation/
Currency Purchased Date Quantity Amount At End of Period (Depreciation)
- ---------------------------------------------------------------------------------------------------------
EUR 11/4/03 602,996 $698,029 $700,996 $2,967
JPY 11/6/03 27,779,475 254,904 252,690 (2,214)
----------
$753
==========
Unrealized
Expiration Contract Market Value Appreciation/
Currency Sold Date Quantity Amount At End of Period (Depreciation)
- ---------------------------------------------------------------------------------------------------------
EUR 11/3/03 646,354 $754,682 $751,399 $3,283
AUDC 11/3/03 680,192 478,991 482,645 (3,654)
EUR 11/4/03 2,735,602 3,180,128 3,180,193 (65)
EUR 11/5/03 58,985 68,282 68,572 (290)
----------
(726)
----------
TOTAL $27
==========
(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, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 4,378,722 $10,489,136 322,042 $750,091 1,021,683 $2,634,557
Dividends and
distributions reinvested -- -- -- -- -- --
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)
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 2,050,341 $6,076,713 210,005 $605,211 109 $320
Dividends and
distributions reinvested -- -- -- -- -- --
Redeemed (1,344,038) (3,947,251) (152,581) (428,308) (561) (1,617)
------------ ------------ ------------ ------------ ------------ ------------
Net change 706,303 $2,129,462 57,424 $176,903 (452) $(1,297)
============ ============ ============ ============ ============ ============
The AAL Aggressive Growth Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 2,009,788 $7,533,552 225,924 $815,411 363,729 $1,469,145
Dividends and
distributions reinvested -- -- -- -- -- --
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)
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 865,242 $3,562,462 114,105 $449,034 2 $10
Dividends and
distributions reinvested -- -- -- -- -- --
Redeemed (613,385) (2,505,020) (155,603) (616,005) (786) (3,265)
------------ ------------ ------------ ------------ ------------ ------------
Net change 251,857 $1,057,442 (41,498) $(166,971) (784) $(3,255)
============ ============ ============ ============ ============ ============
The AAL Small Cap Stock Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 3,978,322 $47,496,197 344,965 $3,866,489 413,374 $5,035,811
Dividends and
distributions reinvested -- -- -- -- -- --
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 1,606,498 $21,720,041 159,836 $2,034,230 37,478 $514,075
Dividends and
distributions reinvested -- -- -- -- -- --
Redeemed (1,579,218) (21,174,118) (343,398) (4,284,402) (3,348) (48,865)
------------ ------------ ------------ ------------ ------------ ------------
Net change 27,280 $545,923 (183,562) $(2,250,172) 34,130 $465,210
============ ============ ============ ============ ============ ============
The AAL Small Cap Index Fund II
-----------------------------------------------------------
Class A Class B
--------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------
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
============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 316,113 $3,320,858 35,420 $359,596
Dividends and
distributions reinvested -- -- -- --
Redeemed (117,448) (1,210,383) (6,214) (63,110)
------------ ------------ ------------ ------------
Net change 198,665 $2,110,475 29,206 $296,486
============ ============ ============ ============
The AAL Small Cap Value Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 503,449 $5,569,392 59,133 $649,029 195,762 $2,138,369
Dividends and
distributions reinvested -- -- -- -- -- --
Redeemed (212,252) (2,327,979) (8,619) (90,582) (38,271) (407,261)
------------ ------------ ------------ ------------ ------------ ------------
Net change 291,197 $3,241,413 50,514 $558,447 157,491 $1,731,108
============ ============ ============ ============ ============ ============
The AAL Mid Cap Stock Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
Sold 5,622,797 $61,355,828 436,184 $4,433,244 428,076 $4,775,897
Dividends and
distributions reinvested -- -- -- -- -- --
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 2,080,840 $25,031,333 178,627 $1,980,225 190,477 $2,357,610
Dividends and
distributions reinvested -- -- -- -- -- --
Redeemed (4,100,690) (49,097,538) (333,169) (3,659,061) (113,131) (1,390,244)
------------ ------------ ------------ ------------ ------------ ------------
Net change (2,019,850) $(24,066,205) (154,542) $(1,678,836) 77,346 $967,366
============ ============ ============ ============ ============ ============
The AAL Mid Cap Index Fund The AAL Mid Cap Index Fund II
--------------------------- -----------------------------------------------------------
Institutional Class Class A Class B
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 265,733 $2,642,916 444,821 $4,426,945 65,240 $637,046
Dividends and
distributions reinvested -- -- -- -- -- --
Redeemed (95,531) (958,860) (851,223) (8,073,836) (11,773) (113,620)
------------ ------------ ------------ ------------ ------------ ------------
Net change 170,202 $1,684,056 (406,402) $(3,646,891) 53,467 $523,426
============ ============ ============ ============ ============ ============
The AAL International Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 2,825,285 $21,562,851 94,843 $697,857 31,364 $229,497
Dividends and
distributions reinvested -- -- -- -- -- --
Redeemed (3,170,056) (23,873,858) (127,879) (932,855) (105,194) (793,382)
------------ ------------ ------------ ------------ ------------ ------------
Net change (344,771) $(2,311,007) (33,036) $(234,998) (73,830) $(563,885)
============ ============ ============ ============ ============ ============
The AAL Capital Growth Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 3,165,557 $85,809,144 250,416 $6,453,973 321,578 $8,704,218
Dividends and
distributions reinvested 167,728 4,448,145 -- -- 9,840 261,240
Redeemed (6,627,534) (179,219,857) (586,047) (15,061,517) (172,659) (4,697,726)
------------ ------------ ------------ ------------ ------------ ------------
Net change (3,294,249) $(88,962,568) (335,631) $(8,607,544) 158,759 $4,267,732
============ ============ ============ ============ ============ ============
The AAL Large
Company Index Fund The AAL Large Company Index Fund II
--------------------------- -----------------------------------------------------------
Institutional Class Class A Class B
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 755,104 $5,116,958 1,080,028 $7,461,021 141,451 $954,967
Dividends and
distributions reinvested -- -- -- -- -- --
Redeemed (7,153,266) (47,105,844) (326,202) (2,249,663) (117,494) (776,626)
------------ ------------ ------------ ------------ ------------ ------------
Net change (6,398,162) $(41,988,886) 753,826 $5,211,358 23,957 $178,341
============ ============ ============ ============ ============ ============
The AAL Equity Income Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 890,190 $9,908,550 61,853 $686,862 128,056 $1,437,885
Dividends and
distributions reinvested 67,408 743,844 -- -- 5,603 61,855
Redeemed (1,797,892) (19,993,899) (178,522) (1,963,994) (70,287) (781,058)
------------ ------------ ------------ ------------ ------------ ------------
Net change (840,294) $(9,341,505) (116,669) $(1,277,132) 63,372 $718,682
============ ============ ============ ============ ============ ============
The AAL Balanced Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 1,712,569 $19,210,216 184,058 $2,049,776 369,081 $4,119,542
Dividends and
distributions reinvested 208,910 2,325,018 7,255 80,395 113,365 1,260,000
Redeemed (2,160,268) (24,195,882) (318,380) (3,542,368) (546,103) (6,126,320)
------------ ------------ ------------ ------------ ------------ ------------
Net change (238,789) $(2,660,648) (127,067) $(1,412,197) (63,657) $(746,778)
============ ============ ============ ============ ============ ============
The AAL High Yield Bond Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 2,813,577 $18,046,497 189,548 $1,218,119 18,283 $117,616
Dividends and
distributions reinvested 463,384 2,973,543 17,976 115,333 14,908 95,625
Redeemed (2,479,812) (15,883,472) (220,465) (1,407,968) (9,491) (60,128)
------------ ------------ ------------ ------------ ------------ ------------
Net change 797,149 $5,136,568 (12,941) $(74,516) 23,700 $153,113
============ ============ ============ ============ ============ ============
The AAL Municipal Bond Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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)
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 3,199,398 $36,854,998 217,001 $2,511,397 67,461 $785,634
Dividends and
distributions reinvested 983,267 11,283,911 15,477 177,553 1,831 20,936
Redeemed (5,970,175) (68,452,452) (168,330) (1,941,683) (61,065) (701,189)
------------ ------------ ------------ ------------ ------------ ------------
Net change (1,787,510) $(20,313,543) 64,148 $747,267 8,227 $105,381
============ ============ ============ ============ ============ ============
The AAL Bond Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 2,714,262 $27,975,586 201,552 $2,077,035 686,539 $7,018,104
Dividends and
distributions reinvested 945,949 9,726,505 19,946 205,213 53,164 546,992
Redeemed (7,705,913) (79,208,010) (195,774) (2,013,264) (496,635) (5,113,686)
------------ ------------ ------------ ------------ ------------ ------------
Net change (4,045,702) $(41,505,919) 25,724 $268,984 243,068 $2,451,410
============ ============ ============ ============ ============ ============
The AAL Bond Index Fund
---------------------------
Institutional Class
---------------------------
Year Ended April 30, 2003 Shares Amount
- ------------------------- ------------ ------------
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
============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 159,336 $1,744,089
Dividends and
distributions reinvested 81,575 884,152
Redeemed (3,863,644) (42,591,333)
------------ ------------
Net change (3,622,733) $(39,963,092)
============ ============
The AAL Money Market Fund
-------------------------------------------------------------------------------------------
Class A Class B Institutional Class
--------------------------- --------------------------- ---------------------------
Year Ended April 30, 2003 Shares Amount Shares Amount Shares Amount
- ------------------------- ------------ ------------ ------------ ------------ ------------ ------------
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)
============ ============ ============ ============ ============ ============
Six Months Ended October 31, 2003 (unaudited)
- ---------------------------------------------
Sold 132,672,620 $132,672,620 624,811 $624,811 313,343,618 $313,343,618
Dividends and
distributions reinvested 588,158 588,158 1,015 1,015 275,424 275,424
Redeemed (181,137,844) (181,137,844) (1,181,462) (1,181,462) (292,592,791) (292,592,791)
------------ ------------ ------------ ------------ ------------ ------------
Net change (47,877,066) $(47,877,066) (555,636) $(555,636) 21,026,251 $21,026,251
============ ============ ============ ============ ============ ============
(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.
The Funds did not borrow against the line during the six months ended
October 31, 2003.
The AAL Mutual Funds
Financial Highlights
The AAL Technology Stock Fund
Class A Shares
- -----------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(e)
- -----------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $2.50 $3.15 $5.13 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment loss (0.01) (0.05) (0.06) (0.05)
Net realized and unrealized gain/(loss)
on investments (b) 0.81 (0.60) (1.92) (4.82)
---------- ---------- ---------- ----------
Total from Investment Operations 0.80 (0.65) (1.98) (4.87)
---------- ---------- ---------- ----------
Net Asset Value, End of period $3.30 $2.50 $3.15 $5.13
---------- ---------- ---------- ----------
Total return (c) 32.00% (20.63)% (38.60)% (48.70)%
Net assets, end of period (in millions) $40.9 $29.3 $31.4 $27.8
Ratio of expenses to average net assets (d) 1.27% 2.39% 2.29% 2.40%
Ratio of net investment loss to
average net assets (d) (0.90)% (2.09)% (2.05)% (1.70)%
Portfolio turnover rate 21% 67% 57% 44%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.29% 2.75% 2.33% 2.40%
Ratio of net investment loss to
average net assets (d) (1.92)% (2.45)% (2.09)% (1.71)%
The AAL Technology Stock Fund
Class B Shares
- -----------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(e)
- -----------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $2.43 $3.09 $5.10 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment loss (0.02) (0.06) (0.09) (0.09)
Net realized and unrealized gain/(loss)
on investments (b) 0.79 (0.60) (1.92) (4.81)
---------- ---------- ---------- ----------
Total from Investment Operations 0.77 (0.66) (2.01) (4.90)
---------- ---------- ---------- ----------
Net Asset Value, End of period $3.20 $2.43 $3.09 $5.10
---------- ---------- ---------- ----------
Total return (c) 31.69% (21.36)% (39.41)% (49.00)%
Net assets, end of period (in millions) $3.6 $2.6 $2.6 $2.6
Ratio of expenses to average net assets (d) 1.73% 3.50% 3.25% 3.40%
Ratio of net investment loss to
average net assets (d) (1.36)% (3.20)% (3.01)% (2.68)%
Portfolio turnover rate 21% 67% 57% 44%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 3.50% 4.12% 3.29% 3.41%
Ratio of net investment loss to
average net assets (d) (3.13)% (3.82)% (3.05)% (2.69)%
The AAL Technology Stock Fund
Institutional Class Shares
- -----------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(e)
- -----------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $2.59 $3.22 $5.19 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment loss (0.01) (0.02) (0.03) (0.02)
Net realized and unrealized gain/(loss)
on investments (b) 0.83 (0.61) (1.94) (4.79)
---------- ---------- ---------- ----------
Total from Investment Operations 0.82 (0.63) (1.97) (4.81)
---------- ---------- ---------- ----------
Net Asset Value, End of period $3.41 $2.59 $3.22 $5.19
---------- ---------- ---------- ----------
Total return (c) 31.66% (19.57)% (37.96)% 48.10%
Net assets, end of period (in millions) $2.9 $2.2 $7.9 $9.3
Ratio of expenses to average net assets (d) 1.04% 1.06% 1.10% 1.32%
Ratio of net investment loss to
average net assets (d) (0.67)% (0.76)% (0.86)% (0.59)%
Portfolio turnover rate 21% 67% 57% 44%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.06% 1.08% 1.14% 1.33%
Ratio of net investment loss to
average net assets (d) (0.69)% (0.78)% (0.90)% (0.60)%
The AAL Aggressive Growth Fund
Class A Shares
- -----------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(e)
- -----------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $3.75 $4.53 $6.70 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.03) (0.06) (0.06) (0.02)
Net realized and unrealized gain/(loss)
on investments (b) 0.63 (0.72) (2.11) (3.28)
---------- ---------- ---------- ----------
Total from Investment Operations 0.60 (0.78) (2.17) (3.30)
---------- ---------- ---------- ----------
Net Asset Value, End of period $4.35 $3.75 $4.53 $6.70
---------- ---------- ---------- ----------
Total return (c) 16.00% (17.22)% (32.39)% 33.00%
Net assets, end of period (in millions) $36.2 $30.2 $34.9 $35.3
Ratio of expenses to average net assets (d) 2.43% 2.64% 2.21% 2.12%
Ratio of net investment income/(loss) to
average net assets (d) (1.48)% (1.72)% (1.34)% (0.51)%
Portfolio turnover rate 58% 204% 94% 70%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.44% 2.65% 2.21% 2.12%
Ratio of net investment income/(loss) to
average net assets (d) (1.49)% (1.73)% (1.34)% (0.51)%
The AAL Aggressive Growth Fund
Class B Shares
- -----------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(e)
- -----------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $3.63 $4.44 $6.65 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.05) (0.09) (0.10) (0.06)
Net realized and unrealized gain/(loss)
on investments (b) 0.61 (0.72) (2.11) (3.29)
---------- ---------- ---------- ----------
Total from Investment Operations 0.56 (0.81) (2.21) (3.35)
---------- ---------- ---------- ----------
Net Asset Value, End of period $4.19 $3.63 $4.44 $6.65
---------- ---------- ---------- ----------
Total return (c) 15.43% (18.24)% (33.23)% (33.50)%
Net assets, end of period (in millions) $3.6 $3.3 $3.4 $3.0
Ratio of expenses to average net assets (d) 3.52% 3.73% 3.33% 3.32%
Ratio of net investment income/(loss) to
average net assets (d) (2.57)% (2.81)% (2.46)% (1.62)%
Portfolio turnover rate 58% 204% 94% 70%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 3.53% 3.74% 3.33% 3.32%
Ratio of net investment income/(loss) to
average net assets (d) (2.58)% (2.82)% (2.46)% (1.62)%
The AAL Aggressive Growth Fund
Institutional Class Shares
- -----------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(e)
- -----------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $3.88 $4.62 $6.77 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) -- 0.02 (0.01) 0.03
Net realized and unrealized gain/(loss)
on investments (b) 0.65 (0.76) (2.14) (3.26)
---------- ---------- ---------- ----------
Total from Investment Operations 0.65 (0.74) (2.15) (3.23)
---------- ---------- ---------- ----------
Net Asset Value, End of period $4.53 $3.88 $4.62 $6.77
---------- ---------- ---------- ----------
Total return (c) 16.75% (16.02)% (31.76)% (32.30)%
Net assets, end of period (in millions) $3.3 $2.8 $6.7 $8.2
Ratio of expenses to average net assets (d) 1.17% 1.10% 1.15% 1.17%
Ratio of net investment income/(loss) to
average net assets (d) (0.22)% (0.18)% (0.28)% 0.60%
Portfolio turnover rate 58% 204% 94% 70%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.18% 1.11% 1.15% 1.17%
Ratio of net investment income/(loss) to
average net assets (d) (0.23)% (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 Mutual Funds
Financial Highlights - continued
The AAL Small Cap Stock Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.55 $14.82 $13.39 $14.60 $10.89 $13.84
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.05) (0.09) (0.09) (0.06) (0.08) (0.12)
Net realized and unrealized gain/(loss)
on investments (b) 3.42 (3.18) 1.60 1.05 3.79 (2.51)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 3.37 (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 $14.92 $11.55 $14.82 $13.39 $14.60 $10.89
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 29.18% (22.06)% 11.29% 7.77% 34.07% (18.97)%
Net assets, end of period (in millions) $345.1 $266.7 $344.3 $258.6 $191.3 $116.0
Ratio of expenses to average net assets (d) 1.40% 1.47% 1.36% 1.40% 1.53% 1.82%
Ratio of net investment income/(loss) to
average net assets (d) (0.76) (0.78) (0.69) (0.54) (0.72)% (1.15)%
Portfolio turnover rate 66% 97% 59% 123% 147% 113%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.42% 1.49% 1.37% 1.41% 1.65% 1.82%
Ratio of net investment income/(loss) to
average net assets (d) (0.78) (0.80) (0.70) (0.54) (0.85)% (1.15)%
The AAL Small Cap Stock Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.86 $14.08 $12.86 $14.24 $10.74 $13.73
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.12) (0.26) (0.24) (0.18) (0.19) (0.22)
Net realized and unrealized gain/(loss)
on investments (b) 3.23 (2.96) 1.54 1.00 3.69 (2.50)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 3.11 (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 $13.97 $10.86 $14.08 $12.86 $14.24 $10.74
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 28.64% (22.87)% 10.11% 6.72% 32.71% (19.85)%
Net assets, end of period (in millions) $24.5 $21.1 $33.8 $31.2 $24.6 $15.8
Ratio of expenses to average net assets (d) 2.47% 2.45% 2.39% 2.39% 2.56% 2.89%
Ratio of net investment income/(loss) to
average net assets (d) (1.84)% (1.75)% (1.72)% (1.52)% (1.76)% (2.22)%
Portfolio turnover rate 66% 97% 59% 123% 147% 113%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.49% 2.47% 2.41% 2.40% 2.68% 2.89%
Ratio of net investment income/(loss) to
average net assets (d) (1.86)% (1.77)% (1.74)% (1.53)% (1.88)% (2.22)%
The AAL Small Cap Stock Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.98 $15.26 $13.71 $14.80 $10.95 $13.87
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.01) (0.06) (0.01) 0.01 0.01 (0.04)
Net realized and unrealized gain/(loss)
on investments (b) 3.57 (3.22) 1.64 1.10 3.84 (2.52)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 3.56 (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 $15.54 $11.98 $15.26 $13.71 $14.80 $10.95
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 29.72% (21.49)% 11.90% 8.53% 35.16% (18.41)%
Net assets, end of period (in millions) $9.4 $6.8 $5.3 $3.8 $1.0 $0.8
Ratio of expenses to average net assets (d) 0.73% 0.73% 0.74% 0.78% 0.72% 1.08%
Ratio of net investment income/(loss) to
average net assets (d) (0.10)% (0.03)% (0.07)% 0.11% 0.08% (0.40)%
Portfolio turnover rate 66% 97% 59% 123% 147% 113%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 0.75% 0.75% 0.75% 0.78% 0.84% 1.08%
Ratio of net investment income/(loss) to
average net assets (d) (0.12)% (0.05)% (0.08)% 0.10% (0.04)% (0.04)%
The AAL Small Cap Index Fund II
Class A Shares
- ------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(e)
- ------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $8.89 $11.42 $10.03 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment loss (0.01) (0.04) (0.07) (0.07)
Net realized and unrealized gain/(loss)
on investments (b) 2.52 (2.43) 1.52 0.21
---------- ---------- ---------- ----------
Total from Investment Operations 2.51 (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 $11.40 $8.89 $11.42 $10.03
---------- ---------- ---------- ----------
Total return (c) 28.23% (21.69)% 14.53% 1.43%
Net assets, end of period (in millions) $28.5 $20.5 $21.6 $13.3
Ratio of expenses to average net assets (d) 1.14% 1.35% 1.51% 1.86%
Ratio of net investment loss to
average net assets (d) (0.24)% (0.44)% (0.77)% (1.03)%
Portfolio turnover rate 6% 18% 18% 36%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.29% 1.40% 1.51% 1.86%
Ratio of net investment loss to
average net assets (d) (0.39)% (0.49)% (0.77)% (1.03)%
The AAL Small Cap Index Fund II
Class B Shares
- ------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(e)
- ------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $8.69 $11.26 $9.97 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment loss (0.05) (0.08) (0.14) (0.13)
Net realized and unrealized gain/(loss)
on investments (b) 2.45 (2.43) 1.49 0.21
---------- ---------- ---------- ----------
Total from Investment Operations 2.40 (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 $11.09 $8.69 $11.26 $9.97
---------- ---------- ---------- ----------
Total return (c) 27.62% (22.29)% 13.62% 0.73%
Net assets, end of period (in millions) $3.2 $2.3 $2.1 $1.5
Ratio of expenses to average net assets (d) 1.97% 2.25% 2.27% 2.67%
Ratio of net investment loss to
average net assets (d) (1.07)% (1.34)% (1.53)% (1.84)%
Portfolio turnover rate 6% 18% 18% 36%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.17% 2.32% 2.27% 2.67%
Ratio of net investment loss to
average net assets (d) (1.27)% (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 1, 2000.The accompanying notes to the
financial statements are an integral part of this schedule.
The accompanying notes to the financial statements are an integral
part of this schedule.
The AAL Mutual Funds
Financial Highlights - continued
The AAL Small Cap Value Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
10/31/03 Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002(e)
- ---------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $9.33 $11.65 $10.00
---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.03) (0.07) (0.05)
Net realized and unrealized gain/(loss)
on investments (b) 2.88 (2.18) 1.70
---------- ---------- ----------
Total from Investment Operations 2.85 (2.25) 1.65
---------- ---------- ----------
Less Distributions from
---------- ---------- ----------
Net Realized Gain on Investments -- (0.07) --
---------- ---------- ----------
Net Asset Value, End of period $12.18 $9.33 $11.65
---------- ---------- ----------
Total return (c) 30.55% (19.38)% 16.50%
Net assets, end of period (in millions) $39.7 $27.7 $22.3
Ratio of expenses to average net assets (d) 1.49% 1.86% 2.12%
Ratio of net investment income/(loss) to
average net assets (d) (0.63)% (0.88)% (1.19)%
Portfolio turnover rate 47% 147% 50%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.02% 2.05% 2.16%
Ratio of net investment loss to
average net assets (d) (1.16)% (1.07)% (1.23)%
The AAL Small Cap Value Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
10/31/03 Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002(e)
- ---------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $9.21 $11.59 $10.00
---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.07) (0.12) (0.11)
Net realized and unrealized gain/(loss)
on investments (b) 2.83 (2.19) 1.70
---------- ---------- ----------
Total from Investment Operations 2.76 (2.31) 1.59
---------- ---------- ----------
Less Distributions from
---------- ---------- ----------
Net Realized Gain on Investments -- (0.07) --
---------- ---------- ----------
Net Asset Value, End of period $11.97 $9.21 $11.59
---------- ---------- ----------
Total return (c) 29.97% (20.00)% 15.90%
Net assets, end of period (in millions) $4.4 $2.9 $2.3
Ratio of expenses to average net assets (d) 2.37% 2.71% 2.86%
Ratio of net investment income/(loss) to
average net assets (d) (1.51)% (1.73)% (1.93)%
Portfolio turnover rate 47% 147% 50%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.90% 2.91% 2.90%
Ratio of net investment loss to
average net assets (d) (2.04)% (1.93)% (1.97)%
The AAL Small Cap Value Fund
Institutional Shares
- ---------------------------------------------------------------------------------------------------
Six Months
Ended Year Period
10/31/03 Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002(e)
- ---------------------------------------------------------------------------------------------------
---------- ---------- ----------
Net Asset Value, Beginning of Period $9.47 $11.71 $10.00
---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.01 -- (0.05)
Net realized and unrealized gain/(loss)
on investments (b) 2.94 (2.17) 1.76
---------- ---------- ----------
Total from Investment Operations 2.95 (2.17) 1.71
---------- ---------- ----------
Less Distributions from
---------- ---------- ----------
Net Realized Gain on Investments -- (0.07) --
---------- ---------- ----------
Net Asset Value, End of period $12.42 $9.47 $11.71
---------- ---------- ----------
Total return (c) 31.15% (18.59)% 17.10%
Net assets, end of period (in millions) $7.0 $3.8 $3.5
Ratio of expenses to average net assets (d) 0.70% 0.87% 1.59%
Ratio of net investment income/(loss) to
average net assets (d) 0.17% 0.10% (0.66)%
Portfolio turnover rate 47% 147% 50%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.23% 1.07% 1.63%
Ratio of net investment loss to
average net assets (d) (0.36)% (0.10)% (0.70)%
The AAL Mid Cap Stock Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.74 $13.01 $14.73 $16.73 $13.89 $15.93
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.02) (0.02) (0.03) -- -- (0.04)
Net realized and unrealized gain/(loss)
on investments (b) 2.41 (2.25) (1.31) 1.19 3.67 (1.25)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 2.39 (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 $13.13 $10.74 $13.01 $14.73 $16.73 $13.89
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 22.25% (17.45)% (9.36)% 7.26% 27.29% (7.62)%
Net assets, end of period (in millions) $760.4 $643.8 $836.5 $883.2 $759.0 $584.9
Ratio of expenses to average net assets (d) 1.26% 1.30% 1.22% 1.16% 1.14% 1.37%
Ratio of net investment income/(loss) to
average net assets (d) (0.30)% (0.18)% (0.25)% 0.02% (0.02)% (0.28)%
Portfolio turnover rate 44% 48% 97% 144% 142% 126%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.27% 1.31% 1.23% 1.17% 1.24% 1.37%
Ratio of net investment income/(loss) to
average net assets (d) (0.31)% (0.19)% (0.26)% 0.01% (0.12)% (0.28)%
The AAL Mid Cap Stock Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $9.95 $12.20 $14.00 $16.20 $13.64 $15.78
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.09) (0.18) (0.17) (0.12) (0.17) (0.17)
Net realized and unrealized gain/(loss)
on investments (b) 2.23 (2.07) (1.25) 1.11 3.56 (1.27)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 2.14 (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 $12.09 $9.95 $12.20 $14.00 $16.20 $13.64
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 21.51% (18.44)% (10.44)% 6.18% 25.71% (8.70)%
Net assets, end of period (in millions) $25.8 $22.8 $33.1 $36.4 $26.9 $17.0
Ratio of expenses to average net assets (d) 2.49% 2.50% 2.38% 2.19% 2.46% 2.56%
Ratio of net investment income/(loss) to
average net assets (d) (1.53)% (1.38)% (1.41)% (1.01)% (1.33)% (1.46)%
Portfolio turnover rate 44% 48% 97% 144% 142% 126%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.50% 2.51% 2.39% 2.20% 2.55% 2.56%
Ratio of net investment income/(loss) to
average net assets (d) (1.54)% (1.39)% (1.42)% (1.01)% (1.43)% (1.46)%
The AAL Mid Cap Stock Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.06 $13.31 $14.98 $16.89 $13.94 $15.96
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.02 0.05 0.03 0.07 0.05 0.02
Net realized and unrealized gain/(loss)
on investments (b) 2.47 (2.30) (1.32) 1.21 3.73 (1.25)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 2.49 (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 $13.55 $11.06 $13.31 $14.98 $16.89 $13.94
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 22.51% (16.90)% (8.86)% 7.68% 28.00% (7.17)%
Net assets, end of period (in millions) $26.4 $20.7 $24.8 $24.3 $16.5 $6.4
Ratio of expenses to average net assets (d) 0.70% 0.68% 0.69% 0.68% 0.62% 0.85%
Ratio of net investment income/(loss) to
average net assets (d) 0.26% 0.44% 0.28% 0.50% 0.51% 0.33%
Portfolio turnover rate 44% 48% 97% 144% 142% 126%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 0.71% 0.69% 0.70% 0.69% 0.71% 0.85%
Ratio of net investment income/(loss) to
average net assets (d) 0.25% 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 Mutual Funds
Financial Highlights - continued
The AAL Mid Cap Index Fund
Institutional Class Shares
- ----------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Period
10/31/03 Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000(e)
- ----------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $8.91 $11.23 $10.80 $10.90 $10.00
---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.02 0.08 0.06 0.08 0.03
Net realized and unrealized gain/(loss)
on investments (b) 2.23 (2.07) 0.60 0.57 0.87
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 2.25 (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 $11.16 $8.91 $11.23 $10.80 $10.90
---------- ---------- ---------- ---------- ----------
Total return (c) 25.25% (17.68)% 6.23% 6.13% 9.00%
Net assets, end of period (in millions) $27.9 $20.8 $24.3 $13.0 $8.9
Ratio of expenses to average net assets (d) 0.63% 0.28% 0.20% 0.20% 0.20%
Ratio of net investment income/(loss) to
average net assets (d) 0.52% 0.89% 0.84% 0.90% 1.02%
Portfolio turnover rate 4% 22% 21% 54% 25%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 0.64% 0.57% 0.88% 1.31% 1.27%
Ratio of net investment income/(loss) to
average net assets (d) 0.51% 0.60% 0.16% (0.21)% (0.05)%
The AAL Mid Cap Index Fund II
Class A Shares
- -------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(f)
- -------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $8.65 $10.71 $10.24 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.01) -- (0.03) (0.04)
Net realized and unrealized gain/(loss)
on investments (b) 2.15 (1.97) 0.53 0.31
---------- ---------- ---------- ----------
Total from Investment Operations 2.14 (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 $10.79 $8.65 $10.71 $10.24
---------- ---------- ---------- ----------
Total return (c) 24.74% (18.36)% 4.94% 2.73%
Net assets, end of period (in millions) $31.8 $29.0 $29.2 $18.1
Ratio of expenses to average net assets (d) 1.26% 1.21% 1.36% 1.71%
Ratio of net investment income/(loss) to
average net assets (d) (0.10)% (0.03)% (0.31)% (0.58)%
Portfolio turnover rate 14% 16% 15% 31%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.27% 1.21% 1.36% 1.71%
Ratio of net investment income/(loss) to
average net assets (d) (0.11)% (0.03)% (0.31)% (0.58)%
The AAL Mid Cap Index Fund II
Class B Shares
- -------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(f)
- -------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $8.43 $10.53 $10.17 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.02) (0.04) (0.10) (0.10)
Net realized and unrealized gain/(loss)
on investments (b) 2.09 (1.97) 0.49 0.30
---------- ---------- ---------- ----------
Total from Investment Operations 2.07 (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 $10.50 $8.43 $10.53 $10.17
---------- ---------- ---------- ----------
Total return (c) 24.56% (19.05)% 3.89% 2.03%
Net assets, end of period (in millions) $4.2 $3.0 $2.7 $1.8
Ratio of expenses to average net assets (d) 1.68% 2.03% 2.30% 2.57%
Ratio of net investment income/(loss) to
average net assets (d) (0.53)% (0.85)% (1.25)% (1.42)%
Portfolio turnover rate 14% 16% 15% 31%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.19% 2.20% 2.30% 2.57%
Ratio of net investment income/(loss) to
average net assets (d) (1.04)% (1.02)% (1.25)% (1.42)%
The AAL International Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.68 $8.62 $10.56 $14.06 $11.35 $11.15
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.02 0.03 0.01 0.25 -- 0.08
Net realized and unrealized gain/(loss)
on investments (b) 1.51 (1.92) (1.84) (3.24) 2.71 0.65
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 1.53 (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 $8.21 $6.68 $8.62 $10.56 $14.06 $11.35
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 22.90% (22.17)% (17.27)% (21.61)% 23.91% 6.82%
Net assets, end of period (in millions) $152.7 $126.5 $166.5 $190.6 $226.7 $146.9
Ratio of expenses to average net assets (d) 1.65% 1.71% 1.56% 1.38% 1.36% 1.74%
Ratio of net investment income/(loss) to
average net assets (d) 0.61% 0.20% 0.08% 2.06% (0.01)% 0.64%
Portfolio turnover rate 38% 52% 63% 38% 44% 101%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.65% 1.71% 1.56% 1.38% 1.41% 1.74%
Ratio of net investment income/(loss) to
average net assets (d) 0.61% 0.20% 0.08% 2.06% (0.07)% 0.64%
The AAL International Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.52 $8.50 $10.39 $13.75 $11.23 $11.05
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.03) (0.09) (0.09) 0.10 (0.13) (0.03)
Net realized and unrealized gain/(loss)
on investments (b) 1.47 (1.89) (1.79) (3.17) 2.65 0.64
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 1.44 (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 $7.96 $6.52 $8.50 $10.39 $13.75 $11.23
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 22.09% (23.29)% (18.09)% (22.56)% 22.44% 5.72%
Net assets, end of period (in millions) $7.5 $6.4 $10.3 $13.7 $15.6 $9.8
Ratio of expenses to average net assets (d) 3.02% 3.18% 2.57% 2.53% 2.53% 2.85%
Ratio of net investment income/(loss) to
average net assets (d) (0.76)% (1.26)% (0.93)% 0.88% (1.19)% (0.52)%
Portfolio turnover rate 38% 52% 63% 38% 44% 101%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 3.02% 3.18% 2.57% 2.53% 2.59% 2.85%
Ratio of net investment income/(loss) to
average net assets (d) (0.76)% (1.26)% (0.93)% 0.88% (1.25)% (0.52)%
The AAL International Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.73 $8.68 $10.63 $14.15 $11.37 $11.17
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.07 0.08 0.03 0.26 0.08 0.15
Net realized and unrealized gain/(loss)
on investments (b) 1.51 (1.89) (1.80) (3.20) 2.73 0.65
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 1.58 (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 $8.31 $6.73 $8.68 $10.63 $14.15 $11.37
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 23.48% (21.45)% (16.61)% (21.12)% 24.69% 7.49%
Net assets, end of period (in millions) $2.9 $2.8 $3.0 $3.3 $2.8 $1.9
Ratio of expenses to average net assets (d) 0.79% 0.77% 0.78% 0.75% 0.73% 1.09%
Ratio of net investment income/(loss) to
average net assets (d) 1.47% 1.15% 0.86% 2.42% 0.61% 1.10%
Portfolio turnover rate 38% 52% 63% 38% 44% 101%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 0.79% 0.77% 0.78% 0.75% 0.79% 1.09%
Ratio of net investment income/(loss) to
average net assets (d) 1.47% 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 Mutual Funds
Financial Highlights - continued
The AAL Capital Growth Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $25.39 $29.84 $34.82 $38.67 $35.87 $29.64
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.06 0.10 0.05 0.19 0.13 0.09
Net realized and unrealized gain/(loss)
on investments (b) 2.79 (4.48) (4.86) (1.74) 3.19 6.69
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 2.85 (4.38) (4.81) (1.55) 3.32 6.78
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.04) (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 (0.04) (0.07) (0.17) (2.30) (0.52) (0.55)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $28.20 $25.39 $29.84 $34.82 $38.67 $35.87
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 11.25% (14.66)% (13.86)% (4.19)% 9.28% 23.20%
Net assets, end of period (in millions) $2,793.1 $2,598.2 $3,385.5 $3,912.5 $4,115.1 $3,594.5
Ratio of expenses to average net assets (d) 1.00% 1.02% 0.95% 0.91% 0.90% 0.97%
Ratio of net investment income/(loss) to
average net assets (d) 0.45% 0.38% 0.16% 0.52% 0.35% 0.30%
Portfolio turnover rate 4% 5% 3% 13% 8% 9%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.00% 1.02% 0.95% 0.91% 0.92% 0.97%
Ratio of net investment income/(loss) to
average net assets (d) 0.45% 0.38% 0.16% 0.52% 0.33% 0.30%
The AAL Capital Growth Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $24.19 $28.67 $33.71 $37.71 $35.29 $29.38
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.09) (0.28) (0.27) (0.15) (0.22) (0.19)
Net realized and unrealized gain/(loss)
on investments (b) 2.65 (4.20) (4.69) (1.71) 3.07 6.56
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 2.56 (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 $26.75 $24.19 $28.67 $33.71 $37.71 $35.29
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 10.58% (15.63)% (14.73)% (5.14)% 8.09% 21.94%
Net assets, end of period (in millions) $80.8 $81.2 $126.4 $154.1 $148.6 $107.6
Ratio of expenses to average net assets (d) 2.17% 2.16% 1.97% 1.88% 1.95% 1.99%
Ratio of net investment income/(loss) to
average net assets (d) (0.72)% (0.75)% (0.86)% (0.44)% (0.69)% (0.74)%
Portfolio turnover rate 4% 5% 3% 13% 8% 9%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.17% 2.16% 1.97% 1.88% 1.96% 1.99%
Ratio of net investment income/(loss) to
average net assets (d) (0.72)% (0.75)% (0.86)% (0.44)% (0.71)% (0.74)%
The AAL Capital Growth Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $25.46 $29.90 $34.88 $38.72 $35.89 $29.67
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.12 0.21 0.18 0.33 0.27 0.21
Net realized and unrealized gain/(loss)
on investments (b) 2.80 (4.47) (4.88) (1.73) 3.20 6.67
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 2.92 (4.26) (4.70) (1.40) 3.47 6.88
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.10) (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 (0.10) (0.18) (0.28) (2.44) (0.64) (0.66)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $28.28 $25.46 $29.90 $34.88 $38.72 $35.89
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 11.51% (14.24)% (13.53)% (3.82)% 9.70% 23.55%
Net assets, end of period (in millions) $80.2 $68.2 $65.9 $91.8 $82.8 $46.9
Ratio of expenses to average net assets (d) 0.56% 0.55% 0.55% 0.54% 0.52% 0.60%
Ratio of net investment income/(loss) to
average net assets (d) 0.90% 0.85% 0.56% 0.90% 0.73% 0.62%
Portfolio turnover rate 4% 5% 3% 13% 8% 9%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 0.56% 0.55% 0.55% 0.54% 0.54% 0.60%
Ratio of net investment income/(loss) to
average net assets (d) 0.90% 0.85% 0.56% 0.90% 0.72% 0.62%
The AAL Large Company Index Fund
Institutional Class Shares
- ----------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Period
10/31/03 Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000(e)
- ----------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.31 $7.38 $8.56 $9.95 $10.00
---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.11 0.08 0.05 0.09 0.02
Net realized and unrealized gain/(loss)
on investments (b) 0.85 (1.07) (1.18) (1.40) (0.07)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.96 (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 $7.27 $6.31 $7.38 $8.56 $9.95
---------- ---------- ---------- ---------- ----------
Total return (c) 15.21% (13.36)% (13.22)% (13.18)% (0.50)%
Net assets, end of period (in millions) $25.0 $62.1 $63.0 $26.6 $27.6
Ratio of expenses to average net assets (d) 0.61% 0.24% 0.20% 0.20% 0.20%
Ratio of net investment income/(loss) to
average net assets (d) 1.25% 1.55% 1.17% 0.97% 1.21%
Portfolio turnover rate 14% 23% 3% 9% 2%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 0.62% 0.36% 0.49% 0.69% 0.93%
Ratio of net investment income/(loss) to
average net assets (d) 1.24% 1.43% 0.88% 0.49% 0.49%
The AAL Large Company Index Fund II
Class A Shares
- -------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(f)
- -------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.30 $7.32 $8.49 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.04 0.05 -- (0.01)
Net realized and unrealized gain/(loss)
on investments (b) 0.92 (1.05) (1.17) (1.50)
---------- ---------- ---------- ----------
Total from Investment Operations 0.96 (1.00) (1.17) (1.51)
---------- ---------- ---------- ----------
Less Distributions from
---------- ---------- ---------- ----------
Net Investment Income -- (0.02) -- --
---------- ---------- ---------- ----------
Net Asset Value, End of period $7.26 $6.30 $7.32 $8.49
---------- ---------- ---------- ----------
Total return (c) 15.24% (13.58)% (13.78)% (15.10)%
Net assets, end of period (in millions) $37.5 $27.8 $30.2 $21.1
Ratio of expenses to average net assets (d) 0.43% 0.93% 1.29% 1.46%
Ratio of net investment income/(loss) to
average net assets (d) 1.31% 0.86% 0.08% (0.20)%
Portfolio turnover rate 1% 16% 4% 9%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.19% 1.18% 1.29% 1.46%
Ratio of net investment income/(loss) to
average net assets (d) 0.55% 0.61% 0.08% (0.20)%
The AAL Large Company Index Fund II
Class B Shares
- -------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Period
10/31/03 Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001(f)
- -------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.15 $7.20 $8.43 $10.00
---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.01 0.01 (0.05) (0.06)
Net realized and unrealized gain/(loss)
on investments (b) 0.89 (1.06) (1.18) (1.51)
---------- ---------- ---------- ----------
Total from Investment Operations 0.90 (1.05) (1.23) (1.57)
---------- ---------- ---------- ----------
Less Distributions from
---------- ---------- ---------- ----------
Net Investment Income -- -- -- --
---------- ---------- ---------- ----------
Net Asset Value, End of period $7.05 $6.15 $7.20 $8.43
---------- ---------- ---------- ----------
Total return (c) 14.63% (14.58)% (14.59)% (15.70)%
Net assets, end of period (in millions) $4.0 $3.4 $2.6 $1.8
Ratio of expenses to average net assets (d) 1.43% 1.94% 2.18% 2.33%
Ratio of net investment income/(loss) to
average net assets (d) 0.32% (0.15)% (0.81)% (1.06)%
Portfolio turnover rate 1% 16% 4% 9%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.15% 2.19% 2.18% 2.33%
Ratio of net investment income/(loss) to
average net assets (d) (0.40)% (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 Mutual Funds
Financial Highlights - continued
The AAL Equity Income Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.18 $12.90 $14.57 $14.40 $14.68 $14.31
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.05 0.11 0.15 0.21 0.18 0.16
Net realized and unrealized gain/(loss)
on investments (b) 1.54 (2.71) (1.64) 0.94 (0.30) 1.17
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 1.59 (2.60) (1.49) 1.15 (0.12) 1.33
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.04) (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 (0.04) (0.12) (0.18) (0.98) (0.16) (0.96)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.73 $10.18 $12.90 $14.57 $14.40 $14.68
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 15.63% (20.19)% (10.26)% 8.26% (0.80)% 10.08%
Net assets, end of period (in millions) $228.2 $206.7 $292.7 $305.1 $277.6 $262.2
Ratio of expenses to average net assets (d) 1.05% 1.06% 0.97% 0.96% 0.92% 1.05%
Ratio of net investment income/(loss) to
average net assets (d) 0.92% 1.04% 1.14% 1.48% 1.24% 1.22%
Portfolio turnover rate 12% 63% 34% 26% 27% 13%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.06% 1.07% 0.98% 0.96% 0.98% 1.05%
Ratio of net investment income/(loss) to
average net assets (d) 0.91% 1.03% 1.13% 1.47% 1.18% 1.22%
The AAL Equity Income Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.16 $12.87 $14.54 $14.38 $14.66 $14.31
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) (0.01) (0.01) 0.03 0.06 0.02 0.02
Net realized and unrealized gain/(loss)
on investments (b) 1.52 (2.69) (1.64) 0.93 (0.28) 1.17
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 1.51 (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 $11.67 $10.16 $12.87 $14.54 $14.38 $14.66
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 14.86% (21.01)% (11.11)% 7.12% (1.80)% 8.97%
Net assets, end of period (in millions) $7.9 $8.1 $12.4 $13.4 $11.6 $9.6
Ratio of expenses to average net assets (d) 2.17% 2.16% 1.90% 1.98% 1.99% 2.09%
Ratio of net investment income/(loss) to
average net assets (d) (0.20)% (0.06)% 0.21% 0.45% 0.17% 0.16%
Portfolio turnover rate 12% 63% 34% 26% 27% 13%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.18% 2.17% 1.91% 1.98% 2.05% 2.09%
Ratio of net investment income/(loss) to
average net assets (d) (0.21)% (0.07)% 0.20% 0.45% 0.11% 0.16%
The AAL Equity Income Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.20 $12.92 $14.59 $14.43 $14.70 $14.32
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income/(loss) 0.08 0.18 0.21 0.27 0.31 0.21
Net realized and unrealized gain/(loss)
on investments (b) 1.53 (2.73) (1.64) 0.93 (0.35) 1.19
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 1.61 (2.55) (1.43) 1.20 (0.04) 1.40
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.07) (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 (0.07) (0.17) (0.24) (1.04) (0.23) (1.02)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.74 $10.20 $12.92 $14.59 $14.43 $14.70
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 15.82% (19.70)% (9.83)% 8.64% (0.29)% 10.62%
Net assets, end of period (in millions) $12.0 $9.8 $9.1 $9.5 $6.2 $13.2
Ratio of expenses to average net assets (d) 0.52% 0.51% 0.50% 0.51% 0.46% 0.60%
Ratio of net investment income/(loss) to
average net assets (d) 1.45% 1.59% 1.61% 1.94% 1.71% 1.65%
Portfolio turnover rate 12% 63% 34% 26% 27% 13%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 0.53% 0.52% 0.51% 0.51% 0.52% 0.60%
Ratio of net investment income/(loss) to
average net assets (d) 1.44% 1.58% 1.60% 1.94% 1.65% 1.65%
The AAL Balanced Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.75 $11.52 $12.41 $12.41 $12.15 $10.81
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.09 0.19 0.26 0.38 0.32 0.21
Net realized and unrealized gain/(loss)
on investments (b) 0.70 (0.76) (0.88) -- 0.25 1.34
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.79 (0.57) (0.62) 0.38 0.57 1.55
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.10) (0.20) (0.27) (0.38) (0.31) (0.20)
Net realized gain on investments -- -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.10) (0.20) (0.27) (0.38) (0.31) (0.21)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.44 $10.75 $11.52 $12.41 $12.41 $12.15
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 7.37% (4.90)% (5.02)% 3.10% 4.78% 14.45%
Net assets, end of period (in millions) $274.9 $260.8 $305.6 $291.7 $256.1 $158.3
Ratio of expenses to average net assets (d) 1.04% 1.05% 0.99% 0.98% 1.09% 1.15%
Ratio of net investment income to
average net assets (d) 1.59% 1.77% 2.19% 3.07% 2.76% 2.26%
Portfolio turnover rate (e) 91% 69% 76% 83% 65% 213%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 1.05% 1.07% 1.02% 1.02% 1.14% 1.23%
Ratio of net investment income to
average net assets (d) 1.58% 1.75% 2.16% 3.03% 2.72% 2.17%
The AAL Balanced Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.70 $11.47 $12.35 $12.35 $12.10 $10.79
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.04 0.11 0.15 0.26 0.21 0.14
Net realized and unrealized gain/(loss)
on investments (b) 0.70 (0.76) (0.87) -- 0.24 1.31
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.74 (0.65) (0.72) 0.26 0.45 1.45
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.05) (0.12) (0.16) (0.26) (0.20) (0.13)
Net realized gain on investments -- -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.05) (0.12) (0.16) (0.26) (0.20) (0.14)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.39 $10.70 $11.47 $12.35 $12.35 $12.10
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 6.90% (5.68)% (5.83)% 2.13% 3.74% 13.47%
Net assets, end of period (in millions) $19.1 $19.3 $22.3 $21.1 $18.2 $11.9
Ratio of expenses to average net assets (d) 1.99% 1.84% 1.89% 1.94% 2.03% 1.98%
Ratio of net investment income to
average net assets (d) 0.64% 0.97% 1.29% 2.11% 1.82% 1.42%
Portfolio turnover rate (e) 91% 60% 76% 83% 65% 213%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 2.00% 1.86% 1.92% 1.98% 2.08% 2.18%
Ratio of net investment income to
average net assets (d) 0.63% 0.95% 1.26% 2.07% 1.77% 1.22%
The AAL Balanced Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.74 $11.51 $12.39 $12.40 $12.13 $10.79
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.12 0.21 0.30 0.42 0.39 0.23
Net realized and unrealized gain/(loss)
on investments (b) 0.70 (0.73) (0.86) -- 0.25 1.35
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.82 (0.52) (0.56) 0.42 0.64 1.58
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.13) (0.25) (0.32) (0.43) (0.37) (0.23)
Net realized gain on investments -- -- -- -- -- (0.01)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.13) (0.25) (0.32) (0.43) (0.37) (0.24)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.43 $10.74 $11.51 $12.39 $12.40 $12.13
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 7.63% (4.45)% (4.65)% 3.50% 5.33% 14.73%
Net assets, end of period (in millions) $114.0 $107.8 $3.7 $3.4 $3.0 $2.3
Ratio of expenses to average net assets (d) 0.59% 0.56% 0.58% 0.59% 0.60% 0.88%
Ratio of net investment income to
average net assets (d) 2.05% 2.26% 2.60% 3.46% 3.25% 2.50%
Portfolio turnover rate (e) 91% 69% 76% 83% 65% 213%
If the Adviser had not reimbursed expenses and the
Fund had not received credits for directed
brokerage transactions or fees paid indirectly
the ratios would have been:
Ratio of expenses to average net assets (d) 0.60% 0.57% 0.62% 0.63% 0.64% 0.88%
Ratio of net investment income to
average net assets (d) 2.04% 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.
(e) Portfolio turnover rates for the year ended April 30, 2003,
excluded mortgage dollar roll transactions.
The accompanying notes to the financial statements are an integral part of this schedule.
The AAL Mutual Funds
Financial Highlights - continued
The AAL High Yield Bond Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.27 $6.19 $6.76 $7.44 $8.92 $10.31
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.23 0.50 0.54 0.63 0.87 0.91
Net realized and unrealized gain/(loss)
on investments (b) 0.30 0.08 (0.56) (0.68) (1.48) (1.33)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.53 0.58 (0.02) (0.05) (0.61) (0.42)
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.23) (0.50) (0.55) (0.63) (0.87) (0.91)
Net realized gain on investments -- -- -- -- -- (0.06)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.23) (0.50) (0.55) (0.63) (0.87) (0.97)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $6.57 $6.27 $6.19 $6.76 $7.44 $8.92
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 8.67% 10.59% (0.26)% (0.81)% (7.00)% (3.96)%
Net assets, end of period (in millions) $128.1 $117.4 $118.6 $121.0 $134.3 $131.9
Ratio of expenses to average net assets (d) 1.09% 0.93% 1.00% 1.00% 0.96% 1.00%
Ratio of net investment income to
average net assets (d) 7.12% 8.72% 8.41% 9.06% 10.54% 9.81%
Portfolio turnover rate 47% 103% 72% 106% 54% 55%
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) 1.09% 1.03% 1.17% 1.08% 1.12% 1.16%
Ratio of net investment income to
average net assets (d) 7.12% 8.62% 8.24% 8.98% 10.38% 9.64%
The AAL High Yield Bond Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.27 $6.19 $6.76 $7.44 $8.92 $10.31
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.20 0.45 0.49 0.58 0.81 0.84
Net realized and unrealized gain/(loss)
on investments (b) 0.30 0.08 (0.56) (0.68) (1.48) (1.33)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.50 0.53 (0.07) (0.10) (0.67) (0.49)
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.20) (0.45) (0.50) (0.58) (0.81) (0.84)
Net realized gain on investments -- -- -- -- -- (0.06)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.20) (0.45) (0.50) (0.58) (0.81) (0.90)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $6.57 $6.27 $6.19 $6.76 $7.44 $8.92
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 8.18% 9.61% (1.02)% (1.53)% (7.65)% (4.62)%
Net assets, end of period (in millions) $6.2 $6.0 $8.2 $9.7 $11.6 $12.4
Ratio of expenses to average net assets (d) 2.00% 1.84% 1.74% 1.73% 1.62% 1.71%
Ratio of net investment income to
average net assets (d) 6.21% 7.81% 7.67% 8.33% 9.88% 9.09%
Portfolio turnover rate 47% 103% 72% 106% 54% 55%
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) 2.00% 2.01% 1.93% 1.99% 1.97% 1.98%
Ratio of net investment income to
average net assets (d) 6.21% 7.64% 7.48% 8.08% 9.53% 8.82%
The AAL High Yield Bond Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $6.27 $6.19 $6.76 $7.43 $8.91 $10.31
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.24 0.51 0.56 0.65 0.89 0.93
Net realized and unrealized gain/(loss)
on investments (b) 0.30 0.09 (0.57) (0.67) (1.48) (1.34)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.54 0.60 (0.01) (0.02) (0.59) (0.41)
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.25) (0.52) (0.56) (0.65) (0.89) (0.93)
Net realized gain on investments -- -- -- -- -- (0.06)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.25) (0.52) (0.56) (0.65) (0.89) (0.99)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $6.56 $6.27 $6.19 $6.76 $7.43 $8.91
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 8.73% 10.88% 0.05% (0.34)% (6.67)% (3.85)%
Net assets, end of period (in millions) $3.6 $3.3 $2.7 $2.2 $2.0 $2.2
Ratio of expenses to average net assets (d) 0.67% 0.67% 0.68% 0.67% 0.53% 0.76%
Ratio of net investment income to
average net assets (d) 7.54% 8.98% 8.73% 9.34% 11.00% 10.34%
Portfolio turnover rate 47% 103% 72% 106% 54% 55%
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) 0.67% 0.67% 0.68% 0.67% 0.62% 0.76%
Ratio of net investment income to
average net assets (d) 7.54% 8.98% 8.73% 9.34% 10.92% 10.34%
The AAL Municipal Bond Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.52 $11.21 $10.96 $10.45 $11.47 $11.40
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.24 0.50 0.54 0.55 0.53 0.52
Net realized and unrealized gain/(loss)
on investments (b) (0.10) 0.31 0.25 0.51 (1.01) 0.25
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.14 0.81 0.79 1.06 (0.48) 0.77
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.24) (0.50) (0.54) (0.55) (0.53) (0.52)
Net realized gain on investments -- -- -- -- (0.01) (0.18)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.24) (0.50) (0.54) (0.55) (0.54) (0.70)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.42 $11.52 $11.21 $10.96 $10.45 $11.47
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 1.24% 7.38% 7.27% 10.34% (4.09)% 6.80%
Net assets, end of period (in millions) $645.2 $671.6 $598.6 $503.7 $461.3 $523.1
Ratio of expenses to average net assets (d) 0.80% 0.79% 0.77% 0.73% 0.78% 0.81%
Ratio of net investment income to
average net assets (d) 4.18% 4.41% 4.77% 5.06% 4.98% 4.47%
Portfolio turnover rate 3% 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) 0.80% 0.79% 0.82% 0.81% 0.84% 0.81%
Ratio of net investment income to
average net assets (d) 4.18% 4.41% 4.72% 4.98% 4.93% 4.47%
The AAL Municipal Bond Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.52 $11.20 $10.95 $10.44 $11.47 $11.40
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.19 0.42 0.44 0.46 0.44 0.42
Net realized and unrealized gain/(loss)
on investments (b) (0.10) 0.32 0.25 0.51 (1.02) 0.25
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.09 0.74 0.69 0.97 (0.58) 0.67
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.19) (0.42) (0.44) (0.46) (0.44) (0.42)
Net realized gain on investments -- -- -- -- (0.01) (0.18)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.19) (0.42) (0.44) (0.46) (0.45) (0.60)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.42 $11.52 $11.20 $10.95 $10.44 $11.47
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 0.82% 6.65% 6.40% 9.39% (4.99)% 5.93%
Net assets, end of period (in millions) $13.0 $12.3 $11.0 $8.5 $7.3 $7.5
Ratio of expenses to average net assets (d) 1.62% 1.56% 1.57% 1.61% 1.59% 1.64%
Ratio of net investment income to
average net assets (d) 3.36% 3.64% 3.97% 4.18% 4.19% 3.65%
Portfolio turnover rate 3% 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) 1.62% 1.56% 1.62% 1.69% 1.64% 1.64%
Ratio of net investment income to
average net assets (d) 3.36% 3.64% 3.92% 4.10% 4.14% 3.65%
The AAL Municipal Bond Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $11.52 $11.20 $10.95 $10.45 $11.47 $11.40
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.26 0.54 0.57 0.58 0.57 0.55
Net realized and unrealized gain/(loss)
on investments (b) (0.10) 0.32 0.25 0.50 (1.01) 0.25
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.16 0.86 0.82 1.08 (0.44) 0.80
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.26) (0.54) (0.57) (0.58) (0.57) (0.55)
Net realized gain on investments -- -- -- -- (0.01) (0.18)
---------- ---------- ---------- ---------- ---------- ----------
Total Distributions (0.26) (0.54) (0.57) (0.58) (0.58) (0.73)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $11.42 $11.52 $11.20 $10.95 $10.45 $11.47
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 1.39% 7.18% 7.61% 10.56% (3.78)% 7.09%
Net assets, end of period (in millions) $3.5 $3.4 $5.3 $2.5 $0.5 $0.6
Ratio of expenses to average net assets (d) 0.49% 0.48% 0.46% 0.42% 0.47% 0.51%
Ratio of net investment income to
average net assets (d) 4.49% 4.72% 5.08% 5.37% 5.32% 4.78%
Portfolio turnover rate 3% 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) 0.49% 0.48% 0.51% 0.50% 0.52% 0.51%
Ratio of net investment income to
average net assets (d) 4.49% 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 Mutual Funds
Financial Highlights - continued
The AAL Bond Fund
Class A Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.31 $9.82 $9.80 $9.32 $9.92 $9.99
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.20 0.42 0.56 0.61 0.58 0.53
Net realized and unrealized gain/(loss)
on investments (b) (0.06) 0.52 0.02 0.48 (0.60) (0.07)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.14 0.94 0.58 1.09 (0.02) 0.46
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
---------- ---------- ---------- ---------- ---------- ----------
Net Investment Income (0.23) (0.45) (0.56) (0.61) (0.58) (0.53)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.22 $10.31 $9.82 $9.80 $9.32 $9.92
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 1.33% 9.79% 6.01% 12.08% (0.11)% 4.61%
Net assets, end of period (in millions) $480.6 $526.5 $451.5 $353.5 $321.7 $367.2
Ratio of expenses to average net assets (d) 0.86% 0.85% 0.81% 0.81% 0.83% 0.93%
Ratio of net investment income to
average net assets (d) 3.84% 4.19% 5.54% 6.38% 6.12% 5.23%
Portfolio turnover rate (e) 238% 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) 0.87% 0.86% 0.88% 0.91% 0.91% 0.93%
Ratio of net investment income to
average net assets (d) 3.83% 4.18% 5.47% 6.27% 6.04% 5.23%
The AAL Bond Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.32 $9.82 $9.80 $9.32 $9.92 $9.99
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.15 0.33 0.47 0.52 0.49 0.43
Net realized and unrealized gain/(loss)
on investments (b) (0.06) 0.53 0.02 0.48 (0.60) (0.07)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.09 0.86 0.49 1.00 (0.11) 0.36
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
---------- ---------- ---------- ---------- ---------- ----------
Net Investment Income (0.18) (0.36) (0.47) (0.52) (0.49) (0.43)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.23 $10.32 $9.82 $9.80 $9.32 $9.92
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 0.85% 8.91% 5.03% 11.04% (1.09)% 3.60%
Net assets, end of period (in millions) $13.4 $13.2 $7.9 $4.6 $3.6 $3.1
Ratio of expenses to average net assets (d) 1.81% 1.77% 1.73% 1.73% 1.80% 1.90%
Ratio of net investment income to
average net assets (d) 2.90% 3.28% 4.64% 5.45% 5.17% 4.28%
Portfolio turnover rate (e) 238% 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) 1.82% 1.78% 1.80% 1.83% 1.88% 1.90%
Ratio of net investment income to
average net assets (d) 2.89% 3.27% 4.57% 5.35% 5.09% 4.28%
The AAL Bond Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- ---------------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.31 $9.82 $9.80 $9.32 $9.92 $9.99
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.22 0.46 0.60 0.66 0.62 0.57
Net realized and unrealized gain/(loss)
on investments (b) (0.05) 0.52 0.02 0.48 (0.60) (0.07)
---------- ---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.17 0.98 0.62 1.14 0.02 0.50
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from
---------- ---------- ---------- ---------- ---------- ----------
Net Investment Income (0.25) (0.49) (0.60) (0.66) (0.62) (0.57)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.23 $10.31 $9.82 $9.80 $9.32 $9.92
---------- ---------- ---------- ---------- ---------- ----------
Total return (c) 1.63% 10.20% 6.42% 12.55% 0.30% 5.02%
Net assets, end of period (in millions) $31.5 $29.2 $22.9 $55.6 $47.9 $44.7
Ratio of expenses to average net assets (d) 0.48% 0.47% 0.39% 0.39% 0.43% 0.54%
Ratio of net investment income to
average net assets (d) 4.23% 4.57% 5.93% 6.79% 6.55% 5.63%
Portfolio turnover rate (e) 238% 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) 0.49% 0.48% 0.46% 0.49% 0.50% 0.54%
Ratio of net investment income to
average net assets (d) 4.22% 4.56% 5.86% 6.69% 6.47% 5.63%
The AAL Bond Index Fund
Institutional Shares
- ----------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Period
10/31/03 Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000(f)
- ----------------------------------------------------------------------------------------------------------------------------
---------- ---------- ---------- ---------- ----------
Net Asset Value, Beginning of Period $10.96 $10.48 $10.47 $9.95 $10.00
---------- ---------- ---------- ---------- ----------
Income from Investment Operations
Net investment income 0.18 0.50 0.59 0.69 0.22
Net realized and unrealized gain/(loss)
on investments (b) (0.16) 0.56 0.16 0.52 (0.05)
---------- ---------- ---------- ---------- ----------
Total from Investment Operations 0.02 1.06 0.75 1.21 0.17
---------- ---------- ---------- ---------- ----------
Less Distributions from
Net investment income (0.25) (0.58) (0.64) (0.69) (0.22)
Net realized gain on investments -- -- (0.10) -- --
---------- ---------- ---------- ---------- ----------
Total Distributions (0.25) (0.58) (0.74) (0.69) (0.22)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $10.73 $10.96 $10.48 $10.47 $9.95
---------- ---------- ---------- ---------- ----------
Total return (c) 0.22% 10.35% 7.36% 12.50% 1.72%
Net assets, end of period (in millions) $40.4 $81.0 $58.9 $18.6 $11.1
Ratio of expenses to average net assets (d) 0.39% 0.23% 0.20% 0.20% 0.20%
Ratio of net investment income to
average net assets (d) 3.60% 4.65% 5.47% 6.66% 6.85%
Portfolio turnover rate (e) 155% 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) 0.40% 0.31% 0.53% 0.98% 1.04%
Ratio of net investment income to
average net assets (d) 3.59% 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) Portfolio turnover rates for the year ended April 30, 2003,
excluded mortgage dollar roll transactions.
(f) 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
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 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 $1.00
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
---------- ---------- ---------- ---------- ---------- ----------
Net Investment Income 0.00 0.01 0.02 0.05 0.05 0.05
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from:
---------- ---------- ---------- ---------- ---------- ----------
Net Investment Income 0.00 (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 $1.00
---------- ---------- ---------- ---------- ---------- ----------
Total return (b) 0.18% 0.88% 2.28% 5.70% 4.99% 4.68%
Net assets, end of period (in millions) $301.8 $349.6 $399.8 $423.9 $348.0 $288.1
Ratio of expenses to average net assets (c) 0.82% 0.77% 0.72% 0.76% 0.66% 0.79%
Ratio of net investment income to
average net assets (c) 0.37% 0.89% 2.19% 5.51% 4.90% 4.54%
Portfolio turnover rate N/A 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% 0.92% 0.90% 0.99% 1.02% 1.12%
Ratio of net investment income/(loss) to
average net assets (c) 0.27% 0.74% 2.01% 5.28% 4.54% 4.22%
The AAL Money Market Fund
Class B Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 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 $1.00
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
---------- ---------- ---------- ---------- ---------- ----------
Net Investment Income 0.00 0.00 0.01 0.04 0.04 0.04
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from:
---------- ---------- ---------- ---------- ---------- ----------
Net Investment Income 0.00 0.00 (0.01) (0.04) (0.04) (0.04)
---------- ---------- ---------- ---------- ---------- ----------
Net Asset Value, End of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ----------
Total return (b) 0.04% 0.42% 1.34% 4.67% 3.94% 3.67%
Net assets, end of period (in millions) $2.3 $2.8 $2.8 $3.3 $2.4 $1.6
Ratio of expenses to average net assets (c) 1.10% 1.38% 1.52% 1.81% 1.65% 2.79%
Ratio of net investment income to
average net assets (c) 0.09% 0.27% 1.39% 4.45% 3.95% 2.54%
Portfolio turnover rate N/A 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) 1.87% 1.62% 1.70% 2.04% 2.00% 3.11%
Ratio of net investment income/(loss) to
average net assets (c) (0.68)% 0.03% 1.21% 4.22% 3.59% 2.22%
The AAL Money Market Fund
Institutional Class Shares
- ---------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Year Year Year Year
10/31/03 Ended Ended Ended Ended Ended
For a share outstanding throughout each period (a) (unaudited) 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 $1.00
---------- ---------- ---------- ---------- ---------- ----------
Income from Investment Operations:
---------- ---------- ---------- ---------- ---------- ----------
Net Investment Income 0.00 0.01 0.03 0.06 0.05 0.05
---------- ---------- ---------- ---------- ---------- ----------
Less Distributions from:
---------- ---------- ---------- ---------- ---------- ----------
Net Investment Income 0.00 (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 $1.00
---------- ---------- ---------- ---------- ---------- ----------
Total return (b) 0.32% 1.17% 2.54% 6.07% 5.36% 4.99%
Net assets, end of period (in millions) $112.4 $91.4 $117.8 $25.3 $12.8 $17.9
Ratio of expenses to average net assets (c) 0.55% 0.48% 0.46% 0.43% 0.31% 0.49%
Ratio of net investment income to
average net assets (c) 0.64% 1.18% 2.45% 5.86% 5.18% 4.76%
Portfolio turnover rate N/A 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) 0.55% 0.53% 0.54% 0.56% 0.57% 0.72%
Ratio of net investment income/(loss) to
average net assets (c) 0.64% 1.13% 2.37% 5.73% 4.92% 4.53%
(a) All per share amounts have been rounded to the nearest cent.
(b) Computed on an annualized basis for periods less than one year.
(c) Prior period ratios not calculated due to a contractual
arrangement between the Portfolios and the Adviser to reimburse all
expenses in excess of Advisory fees.
The accompanying notes to the financial statements are an integral part of this schedule.
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This page is intentionally left blank.
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The AAL Mutual Funds
Supplement to Prospectus dated June 27, 2003
Portfolio Management Change for The AAL Small Cap Stock Fund
Kevin A. Schmitting, CFA and Christopher J. Serra, CFA serve as
portfolio co-managers of The AAL Small Cap Stock Fund.
Mr. Schmitting has served as the portfolio manager of The AAL Small
Cap Stock Fund since its inception in 1996. Mr. Schmitting has been
with Theivent Investment Mgt. since 1995.
Mr. Serra has served as the portfolio manager of The AAL Small Cap
Stock Fund since November 2003, and he served as an assistant
portfolio manager of the Fund from 1999 to 2001. Mr. Serra has been
with Thrivent Investment Mgt. since 1998, and he has served as a
portfolio manager since 1999.
The date of this Supplement is December 15, 2003.
Please include this Supplement with your Prospectus.
We're Listening to You!
In response to shareholder concerns regarding multiple
mailings, we are sending one Semiannual 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]
625 Fourth Ave. S., Minneapolis, MN 55415-1665
www.thrivent.com [Bullet] e-mail: mail@thrivent.com
[Bullet] 800-THRIVENT (800-847-4836)
Semiannual Report
October 31, 2003
The AAL U.S. Government Zero
Coupon Target Fund, Series 2006
[PHOTO OMITTED: PAMELA J. MORET]
Dear Shareholder:
We are pleased to provide you with the semiannual report for the six months ended October 31, 2003 for The AAL U.S. Government
Zero Coupon Target Fund, Series 2006, managed by Thrivent Investment Management.
In 2003, we have seen significant improvement in the financial markets. This has been a welcome change from the past few years.
Sadly, however, this marked improvement has been somewhat overshadowed by a string of disturbing disclosures of inappropriate
mutual fund trading practices in the industry.
You can count on us for your investment needs
We want our shareholders to know we are committed to operating with integrity and earning and retaining your trust every day. This
is especially important as investors' confidence in money managers and fund families is being shaken. At a time when the mutual
fund industry is receiving increased negative attention, we are working hard to protect your interests by continually monitoring
and reviewing our practices and seeking to hold ourselves to the high standards you expect.
Our practices discourage market timing and late trading
There are several ways we protect your interests:
o We do not permit late or after hours trading. Investors must place their orders to buy or sell shares before 4 p.m. ET
to receive that day's price.
o We reserve the right to reject purchases we believe could negatively impact our investors.
We're building for the future
As we continue to strive to operate our business with integrity, we are working to ensure that we continue to meet your investment
needs. Investments play an important role in many shareholders' financial plans. Our mutual fund family and portfolio money
management capabilities are being repositioned to better meet shareholders' needs.
Our goal is to deliver consistent competitive investment performance, enhanced shareholder services and a growing business with an
excellent reputation. We expect to build on our many strengths while also addressing areas that need improvement.
We are developing action steps that, taken together, we expect will benefit shareholders. They include:
o Merging the fund families and, in the process, placing all of the funds under a single Board of Trustees.
o Thrivent Investment Management is investing $4-5 million to enhance the quality of its portfolio money management
capabilities.
o Creating new product names using the Thrivent Financial brand.
o Expanding our investment product offerings.
o Enhancing transfer agent services to increase our shareholders' access to account information and to make share
transactions easier.
o Offering greater investment choice through access to an expanded array of money managers.
Your Thrivent Investment Management representative can be your guide
As we build our capabilities, our philosophy is centered firmly on your relationship with your Thrivent Investment Management
representative. You can expect regular timely advice from your Thrivent Investment Management representative on asset allocation,
the financial markets and the economy. In a period of improving market conditions, it's often a good idea to review your current
investment mix and overall balance. Talk to your Thrivent Investment Management repre-sentative today if you have any questions.
He or she is there to help and would welcome the chance to do so. Thank you for continuing to turn to us for your financial
solutions.
Sincerely,
/s/ Pamela J. Moret
Pamela J. Moret
President
The AAL Mutual Funds
The AAL U.S. Government Zero Coupon
Target Fund, Series 2006 (unaudited)
[PHOTO OMITTED: ALAN D. ONSTAD]
Over the last six months, interest rates rose slightly, resulting in total returns of 0.33% for the period. A zero coupon
security will perform better when rates are falling and will do worse than coupon paying securities when rates are rising. The
short time to maturity of the security comprising this portfolio makes this security a very defensive investment.
/s/ Alan D. Onstad
Alan D. Onstad
Portfolio Manager
$10,000 Investment
Including 4.75% Sales Charge ***
[GRAPHIC OMITTED: MOUNTAIN CHARTS]
2006
The AAL U.S. LEHM
Government Zero Lehman
Coupon Target Aggregate Consumer
Date Fund, Series 20006 Bond Index* Price Index**
- -----------------------------------------------------------------------
10/31/93 $ 9,525 $ 10,000 $ 10,000
11/30/93 9,085 9,915 10,007
12/31/93 9,208 9,969 10,007
1/31/94 9,501 10,103 10,034
2/28/94 8,900 9,928 10,069
3/31/94 8,353 9,683 10,103
4/30/94 8,201 9,606 10,117
5/31/94 8,197 9,604 10,124
6/30/94 8,055 9,583 10,158
7/31/94 8,364 9,773 10,185
8/31/94 8,300 9,786 10,226
9/30/94 7,948 9,642 10,254
10/31/94 7,882 9,633 10,261
11/30/94 7,954 9,612 10,275
12/31/94 8,140 9,678 10,275
1/31/95 8,375 9,870 10,316
2/28/95 8,716 10,104 10,357
3/31/95 8,773 10,166 10,391
4/30/95 8,947 10,308 10,426
5/31/95 9,801 10,707 10,446
6/30/95 9,932 10,786 10,467
7/31/95 9,716 10,761 10,467
8/31/95 9,940 10,891 10,494
9/30/95 10,137 10,997 10,515
10/31/95 10,432 11,140 10,549
11/30/95 10,753 11,307 10,542
12/31/95 11,211 11,466 10,535
1/31/96 11,203 11,542 10,597
2/28/96 10,589 11,341 10,631
3/31/96 10,372 11,263 10,686
4/30/96 10,150 11,199 10,728
5/31/96 10,051 11,177 10,748
6/30/96 10,281 11,327 10,755
7/31/96 10,266 11,358 10,776
8/31/96 10,129 11,339 10,796
9/30/96 10,430 11,536 10,830
10/31/96 10,881 11,792 10,865
11/30/96 11,258 11,994 10,885
12/31/96 10,964 11,882 10,885
1/31/97 10,896 11,919 10,920
2/28/97 10,870 11,948 10,954
3/31/97 10,591 11,816 10,981
4/30/97 10,857 11,993 10,995
5/31/97 10,961 12,106 10,988
6/30/97 11,136 12,250 11,002
7/31/97 11,759 12,580 11,016
8/31/97 11,431 12,473 11,036
9/30/97 11,728 12,657 11,064
10/31/97 12,074 12,840 11,091
11/30/97 12,129 12,899 11,084
12/31/97 12,319 13,029 11,071
1/31/98 12,599 13,196 11,091
2/28/98 12,509 13,187 11,112
3/31/98 12,512 13,232 11,132
4/30/98 12,537 13,301 11,153
5/31/98 12,769 13,427 11,174
6/30/98 12,946 13,541 11,187
7/31/98 12,924 13,570 11,201
8/31/98 13,489 13,791 11,215
9/30/98 14,192 14,113 11,229
10/31/98 14,171 14,039 11,256
11/30/98 14,018 14,118 11,256
12/31/98 14,118 14,161 11,249
1/31/99 14,117 14,262 11,277
2/28/99 13,513 14,013 11,290
3/31/99 13,522 14,091 11,325
4/30/99 13,561 14,135 11,407
5/31/99 13,195 14,012 11,407
6/30/99 13,061 13,967 11,407
7/31/99 12,934 13,907 11,441
8/31/99 12,871 13,900 11,469
9/30/99 12,961 14,062 11,524
10/31/99 12,912 14,114 11,544
11/30/99 12,835 14,113 11,551
12/31/99 12,666 14,045 11,551
1/31/00 12,580 13,999 11,579
2/28/00 12,675 14,168 11,647
3/31/00 13,005 14,354 11,743
4/30/00 12,971 14,314 11,750
5/31/00 13,022 14,307 11,757
6/30/00 13,410 14,605 11,826
7/31/00 13,457 14,737 11,846
8/31/00 13,691 14,951 11,860
9/30/00 13,851 15,045 11,922
10/31/00 13,913 15,144 11,942
11/30/00 14,293 15,392 11,949
12/31/00 14,665 15,678 11,942
1/31/01 14,838 15,934 12,018
2/28/01 15,049 16,073 12,066
3/31/01 15,216 16,153 12,093
4/30/01 14,983 16,086 12,141
5/31/01 14,921 16,184 12,196
6/30/01 14,984 16,245 12,217
7/31/01 15,410 16,608 12,183
8/31/01 15,573 16,798 12,183
9/30/01 16,031 16,994 12,238
10/31/01 16,326 17,349 12,196
11/30/01 15,983 17,110 12,176
12/31/01 15,782 17,001 12,128
1/31/02 15,819 17,139 12,155
2/28/02 16,019 17,305 12,203
3/31/02 15,609 17,017 12,272
4/30/02 15,966 17,347 12,340
5/31/02 16,150 17,495 12,340
6/30/02 16,406 17,646 12,347
7/31/02 16,879 17,859 12,361
8/30/02 17,130 18,160 12,402
9/30/02 17,615 18,455 12,423
10/31/02 17,506 18,370 12,454
11/29/02 17,217 18,365 12,454
12/31/02 17,646 18,744 12,426
1/31/03 17,510 18,761 12,481
2/28/03 17,750 19,020 12,577
3/31/03 17,722 19,005 12,653
4/30/03 17,785 19,162 12,626
5/30/03 18,129 19,519 12,605
6/30/03 18,104 19,480 12,619
7/31/03 17,679 18,825 12,632
8/29/03 17,662 18,950 12,681
9/30/03 18,042 19,452 12,722
10/31/03 17,843 19,270 12,708
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 October 31, 2003 1-Year 5-Year 10-Year
- -------------------------------------------------------------------- ----------------------- ----------------------- ---------------
Without sales charge 1.90% 5.14% 6.43%
With sales charge -2.93% 4.12% 5.91%
- -------------------------------------------------------------------- ----------------------- ----------------------- ---------------
* 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. 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. For additional information, refer to your prospectus which can be obtained from your registered representative or
by calling (800) Thrivent. Please read your prospectus carefully.
Schedule of Investments
As of October 31, 2003 (unaudited)
The AAL U.S. Government Zero Coupon Target Fund, Series 2006 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Yield to Maturity Market
AmountLong-Term Obligations (100.0%) Maturity Date Value
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Zero Coupon (100.0%)
$1,688,000 U.S. Government Zero Coupon Bonds 2.434% 11/15/2006 $1,568,279
TOTAL INVESTMENTS (100.0%)
(amortized cost basis $1,327,845) $1,568,279
(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 October 31, 2003 (unaudited)
The AAL U.S. Government Zero Coupon Target Fund, Series 2006
-------------------------------------------------------------------------------------------------------------------------
Assets
Investments at cost $1,327,845
Investments at value 1,568,279
Cash 6,797
------------------------------------------------------------------------------------------- -----------------------------
Total Assets 1,575,076
=========================================================================================== =============================
Liabilities
Income distributions payable 74,235
Accrued expenses 1,491
Payable to affiliate 2,209
------------------------------------------------------------------------------------------- -----------------------------
Total Liabilities 77,935
=========================================================================================== =============================
Net Assets
Trust Capital (beneficial interest) 1,227,071
Accumulated undistributed net investment income 805
Accumulated undistributed net realized gain on investments 28,831
Net unrealized appreciation on investments 240,434
------------------------------------------------------------------------------------------- -----------------------------
Total Net Assets $1,497,141
=========================================================================================== =============================
Net Assets $1,497,141
Shares of beneficial interest outstanding 121,575
Net asset value per share $12.31
Maximum public offering price $12.92
The accompanying notes to the financial statements are an integral part of this statement.
Statement of Operations
For the six months ended October 31, 2003 (unaudited)
The AAL U.S. Government Zero Coupon Target Fund, Series 2006
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------- ----------------------------
Investment Income
Taxable interest $52,429
------------------------------------------------------------------------------------------- ----------------------------
------------------------------------------------------------------------------------------- ----------------------------
Total Investment Income 52,429
=========================================================================================== ============================
=========================================================================================== ============================
Expenses
Administrative service and pricing fees 584
Audit and legal fees 3,772
Custody fees 334
Printing and postage expense 1,226
SEC and state registration expense 2,797
Shareholder maintenance fees 46
Transfer agent fees 920
Trustees fees and insurance expenses 1,962
Other expenses, net (334)
------------------------------------------------------------------------------------------- ----------------------------
------------------------------------------------------------------------------------------- ----------------------------
Total Expenses Before Reimbursement 11,307
=========================================================================================== ============================
=========================================================================================== ============================
Less:
Reimbursement from adviser (3,816)
Fees paid indirectly (58)
------------------------------------------------------------------------------------------- ----------------------------
Total Net Expenses 7,433
=========================================================================================== ============================
=========================================================================================== ============================
Net Investment Income 44,996
=========================================================================================== ============================
=========================================================================================== ============================
Realized and Unrealized Gains on Investments
Net realized gains on investments 6,182
Change in net unrealized appreciation on investments (45,945)
------------------------------------------------------------------------------------------- ----------------------------
------------------------------------------------------------------------------------------- ----------------------------
Net Realized and Unrealized Gains on Investments (39,763)
=========================================================================================== ============================
=========================================================================================== ============================
Net Increase in Net Assets Resulting From Operations $5,233
=========================================================================================== ============================
The accompanying notes to the financial statements are an integral part of this statement.
Statement of Changes in Net Assets
As of October 31, 2003 (unaudited)
The AAL U.S. Government Zero Coupon Target Fund, Series 2006
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended
10/31/2003 4/30/2003
- ------------------------------------------------------------------------ -------------------------------- --------------------------
Operations
- ------------------------------------------------------------------------
Net investment income $44,996 $92,246
- ------------------------------------------------------------------------
Net realized gains on investments 6,182 29,962
- ------------------------------------------------------------------------
Change in net unrealized appreciation/depreciation
- ------------------------------------------------------------------------
on investments (45,945) 51,190
- ------------------------------------------------------------------------ -------------------------------- --------------------------
- ------------------------------------------------------------------------ -------------------------------- --------------------------
Net Increase in Net Assets Resulting
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
from Operations 5,233 173,398
======================================================================== ================================ ==========================
======================================================================== ================================ ==========================
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Distributions to Shareholders
- ------------------------------------------------------------------------
From net investment income (44,996) (92,246)
- ------------------------------------------------------------------------
From net realized gains -- (21,496)
- ------------------------------------------------------------------------ -------------------------------- --------------------------
- ------------------------------------------------------------------------ -------------------------------- --------------------------
Total Distributions to Shareholders (44,996) (113,742)
======================================================================== ================================ ==========================
======================================================================== ================================ ==========================
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Trust Share Transactions
- ------------------------------------------------------------------------
Income dividends reinvested -- 89,767
- ------------------------------------------------------------------------
Capital gains distributions reinvested -- 21,325
- ------------------------------------------------------------------------
Redemption of trust shares (42,206) (156,671)
- ------------------------------------------------------------------------ -------------------------------- --------------------------
- ------------------------------------------------------------------------ -------------------------------- --------------------------
Net Decrease in Trust Capital (42,206) (45,579)
======================================================================== ================================ ==========================
======================================================================== ================================ ==========================
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Net Decrease in Net Assets (81,869) 14,077
======================================================================== ================================ ==========================
======================================================================== ================================ ==========================
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Net Assets Beginning of Period 1,579,110 1,565,033
======================================================================== ================================ ==========================
======================================================================== ================================ ==========================
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
Net Assets End of Period $1,497,141 $1,579,110
======================================================================== ================================ ==========================
The accompanying notes to the financial statements are an integral part of this statement.
Notes to Financial Statements
As of October 31, 2003 (unaudited)
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.
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 $125 in fees for the six months ended October 31, 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 six months ended October 31, 2003, and year ended April 30, 2003, there were no purchases and $41,536 and $179,412 in
sales, respectively. 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 October 31, 2003 was $240,434.
During the six months ended October 31, 2003 and the year ended April 30, 2003, The AAL U.S. Government Zero Coupon Target Fund,
Series 2006 distributed $44,996 and $92,246 from ordinary income, respectively. For the year ended, April 30, 2003, the Fund
distributed $21,496 from long-term capital gains.
At April 30, 2003, undistributed ordinary income and long-term capital gains for tax purposes were $2,764 and $22,649,
respectively.
F. Trust Transactions
Transactions in trust shares for the six months ended October 31, 2003, and year ended April 30, 2003, were as follows:
10/31/2003 4/30/2003
---------- ---------
Income dividends reinvested -- 7,025
Capital gains reinvested -- 1,713
Shares redeemed (3,407) (12,316)
Net Decrease of Trust Shares (3,407) (3,578)
Financial Highlights
Per Share Information (a)
The AAL U.S. Government Zero Coupon Target Fund, Series 2006
- -----------------------------------------------------------------------------------------------------------------------------------
Period
Ended Year Year Year Year Year
10/31/2003 Ended Ended Ended Ended Ended
(unaudited) 4/30/2003 4/30/2002 4/30/2001 4/30/2000 4/30/1999
- -------------------------------------------- -------------- -------------- ------------- --------------- -------------- ------------
- -------------------------------------------- -------------- -------------- ------------- --------------- -------------- ------------
Net asset value: Beginning of Period $12.63 $12.17 $12.22 $11.27 $12.39 $12.13
Income from Investment Operations
Net investment income 0.36 0.73 0.71 0.72 0.72 0.71
Net realized and unrealized gain (loss)
On Investment (b) (0.32) 0.63 0.07 1.00 (1.02) 0.36
- -------------------------------------------- --------------- --------------- -------------- --------------- -------------- ---------
- -------------------------------------------- --------------- --------------- -------------- --------------- -------------- ---------
Total from Investment Operations 0.04 1.36 0.78 1.72 (0.30) 1.07
============================================ =============== =============== ============== =============== ============== =========
============================================ =============== =============== ============== =============== ============== =========
Distributions from:
Net investment income (0.36) (0.73) (0.71) (0.72) (0.72) (0.71)
Net realized capital gains -- (0.17) (0.12) (0.05) (0.10) (0.10)
- -------------------------------------------- --------------- --------------- -------------- --------------- -------------- ---------
- -------------------------------------------- --------------- --------------- -------------- --------------- -------------- ---------
Total Distributions (0.36) (0.90) (0.83) (0.77) (0.82) (0.81)
============================================ =============== =============== ============== =============== ============== =========
============================================ =============== =============== ============== =============== ============== =========
Net increase (decrease) in net asset value (0.32) 0.46 (0.05) 0.95 (1.12) 0.26
Net asset value: End of Period $12.31 $12.63 $12.17 $12.22 $11.27 $12.39
============================================ =============== =============== ============== =============== ============== =========
============================================ =============== =============== ============== =============== ============== =========
Total return (c,d) 0.33% 11.28% 6.53% 15.28% (2.29)% 8.69%
Net assets: end of period (in thousands) $1,497 $1,579 $1,565 $1,612 $1,467 $1,575
Ratio of expenses to average net assets (d) 1.00% 0.91% 1.00% 0.99% 0.98% 0.97%
Ratio of net investment income to average
net assets (d) 5.72% 5.73% 5.80% 6.02% 6.21% 5.51%
Portfolio turnover rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
If the Fund had paid all its expenses
without the advisors voluntary expense
reimbursement, the ratios would have been
as follows:
Ratio of expenses to average net assets (d) 1.49% 1.55% 1.27% 1.07% 0.98% 0.97%
Ratio of net investment income to average
net assets (d) 5.23% 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.
(d) Annualized for periods less than one year.
The accompanying notes to the financial statements are an integral part of this schedule.
[ This page intentionally left blank]
- ------------------------------------------------------------------------------------------------------------------------------------
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.
This report is submitted for the information of shareholders of The AAL Mutual Funds. It is not authorized for distribution to
prospective investors unless preceded or accompanied by the current prospectus for The AAL Mutual Funds, which contains more
complete information about the Funds, including investment policies, charges and expenses.
[LOGO OMITTED: THRIVENT INVESTMENT MANAGEMENT]
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. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
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: December 23, 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: December 23, 2003 By: /s/ Pamela J. Moret
---------------------------------
Pamela J. Moret
President
Date: December 23, 2003 By: /s/ Charles D. Gariboldi
---------------------------------
Charles D. Gariboldi
Treasurer
CERTIFICATION BY PRESIDENT
I, Pamela J. Moret, certify that:
1. I have reviewed this report on Form N-CSR of The AAL Mutual Funds;
2. 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;
3. 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;
4. 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:
a) 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;
b) 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
c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. 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):
a) 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
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal controls; and
6. 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: December 23, 2003 /s/ Pamela J. Moret
---------------------------------
Pamela J. Moret
President
CERTIFICATION BY TREASURER
I, Charles D. Gariboldi, certify that:
1. I have reviewed this report on Form N-CSR of The AAL Mutual Funds;
2. 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;
3. 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;
4. 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:
a) 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;
b) 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
c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. 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):
a) 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
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant's internal controls; and
6. 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: December 23, 2003 /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:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Issuer.
Date: December 23, 2003 /s/ Pamela J. Moret
---------------------------------
Pamela J. Moret
President
Date: December 23, 2003 /s/ Charles D. Gariboldi
---------------------------------
Charles D. Gariboldi
Treasurer
