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: 811-05127
Advance Capital I, Inc.
(Exact name of registrant as specified in charter)
One Towne Square, Suite 444 Southfield, Michigan |
| 48076 |
(Address of principal executive offices) |
| (Zip code) |
Christopher M. Kostiz, President
Advance Capital I, Inc.
One Towne Square, Suite 444
Southfield, Michigan 48076
(Name and Address of agent for service)
Registrant’s telephone number, including area code: (248) 350-8543
Date of fiscal year end: December 31
Date of reporting period: December 31, 2015
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940(17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays current valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. 3507.
Dear Shareholders, The past year proved difficult for most sectors of the equity and fixed-income markets. Stocks produced meager results as some sectors posted negative returns. In bonds, the low absolute level of interest rates, along with the prospects that the Federal Reserve would begin to normalize short- term rates, proved to be a significant headwind. While several investment themes continued into 2015, a few new ones surfaced that complicated the landscape. An improving jobs picture, low interest rates and steady improvements in housing remained the foundation for economic growth. The Federal Reserve’s decision to end their quantitative easing programs and begin the process of raising interest rates, along with the dramatic rise in the U.S. dollar versus world currencies, led to an uptick in market volatility and investor anxiety during the year. Further, the slowdown in China and growth problems in Europe further complicated the environment. Investors scrambled to discern how these forces would impact both growth and valuations in the capital markets around the world in the coming quarters and years. At the start of the year, more than 20 foreign central banks eased monetary conditions by slashing interest rates toward zero or even below. In January, the European Central Bank (ECB) announced a 1.1 trillion euro quantitative easing program that was much larger and more open-ended than the markets expected. Along with relatively positive economic data and solid investor sentiment, the equity markets pushed higher during the first half of the year. The second half brought more volatility, with a steep price decline in August and September before bouncing back toward the end of the year. One of the key drivers of domestic growth over the past few years has been the substantial rebound in employment. Over the past year, approximately 3 million new jobs have been created and the unemployment rate has continued to fall to a post-crisis | low of around 5.0 percent today. The economy has been averaging more than 200,000 new jobs per month for the past year, marking the best streak in 20 years. While there is still debate about the health of the labor market given the low participation rate and soft wage growth, the numbers suggest a continued recovery. Further gains in housing and service sectors serve as additional positive aspects of our economy. In housing, the number of homes sold but not yet started rose to the highest level since July 2007. The growth in payrolls and the low number of layoffs has increased demand for housing as more Americans now have the means and confidence to invest in a home. Finally, the service sector index is running at the highest pace in three months, indicating solid expansion in this part of the economy. While encouraging, other headwinds persist in the U.S. and around the globe that could potentially derail or severely impact growth and nascent prosperity. In a recent Institute for Supply Management survey, U.S. manufacturing activity contracted at the fastest pace since the last recession. Bloated stockpiles prompted cutbacks in orders and production. The key culprits include slumping commodity prices, a strong dollar and weak global growth. These factors, along with heightened concerns about China’s ability to manage its economic slowdown, triggered a sell-off in higher-risk debt, including corporate high-yield, emerging market bonds and several world currencies, toward the end of the year. Many fell to their weakest levels since the global financial crisis. Capital Market Performance The combination of a marginally growing economy and solid job gains led the Federal Reserve to finally move off their zero interest rate policy and hike short-term interest rates in December. In this environment, investor anxiety increased along with market volatility, which led to weak returns across |
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the board for most sectors of the capital markets. By the numbers, the S&P 500 Index returned 1.37 percent and the Nasdaq Composite produced a 7.11 percent return for the year. Several European equity markets outperformed our domestic market, and domestic growth stocks soundly beat value stocks across the market-cap spectrum. In fixed-income, riskier debt generally underperformed higher- quality debt. The Barclays Aggregate Index, which represents the broad bond market, increased 0.55 percent. In the Advance Capital I Funds, the Equity Growth Fund retail shares declined 6.26 percent while the S&P 400 Mid-Cap Value Index posted a 6.66 percent decline. The Balanced Fund retail shares declined 3.86 percent compared with the Lipper Balanced Index, which declined 0.42 percent. The Retirement Income Fund retail shares posted a decline of 0.13 percent as the Barclays Aggregate Bond Index increased 0.55 percent. Finally, the Core Equity Fund retail shares declined 2.79 percent while the S&P 500 Value Index declined 3.13 percent. Looking Ahead Looking ahead to 2016, we are cautious on our outlook for both the economy and capital markets. The equilibrium between growth and inflation appears fragile and prone to volatility and risks along the way. While global growth is projected to hover around 3 percent, we expect U.S. growth to trend lower at around 2-2.5 percent. The headwinds of higher interest rates and a weak manufacturing | sector are expected to slightly offset healthy gains in housing and employment. Meanwhile, foreign economic expectations are mixed. Against the backdrop of low global growth and potentially divergent global monetary policy trends, the U.S. economy remains relatively healthy, with the turnaround in employment over the past five years the key bright spot. In fact, the economy is poised to cross an important milestone in the year ahead as the labor market will almost certainly achieve full employment. Many companies appear starved for skilled workers as the job-openings rate is currently at a record high. At the same time, applications for jobless benefits matched a four-decade low. A tighter labor market has nudged wages higher and, combined with dramatically lower gas prices, the measure of personal finances has reached the second-highest level since 2007. In this environment, we expect both domestic stocks and bonds to experience heightened volatility with the possibility of below-average returns. The first few weeks of the new year has been very challenging for the equity markets. Still, we believe the reasonably solid economic foundation can produce moderately positive returns in equities and likely low, single- digit returns for fixed-income. In the Advance Capital I Funds, we plan to maintain a more conservative tilt, relative to our historical allocations, in both the equity and fixed-income funds. Further, this action could result in slightly higher cash balances and less risky investments overall. |
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Joseph R. Theisen President & CEO Advance Capital Group, Inc. | Christopher M. Kostiz President Advance Capital I, Inc. |
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EQUITY GROWTH FUND (Unaudited)
Seeks to provide investors with long-term growth of capital by investing primarily in stocks of small and medium-sized companies.
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE (Unaudited)
2015 Results There were many events that contributed to heightened market volatility during the year. Headlining those events were the first interest rate hike by the Federal Reserve, the continued deterioration in oil prices, China’s unexpected devaluation of their currency and increased global tensions in the Middle East. Overall, it was a tough year in the financial markets in comparison to the prior five years. The economy continued to muddle along, with growth at around 2.0 percent, the unemployment rate fell to 5.0 percent, manufacturing activity slowed, and consumer spending remained stable. Equities struggled across the board, with small- and mid-sized stocks continuing to lag their larger counterparts as investors looked to pull back from risk assets. Domestic equities again outpaced most foreign equities and growth stocks typically outperformed value stocks. For the year, the Equity Growth Fund decreased 6.26 percent while the S&P Midcap 400 Value Index decreased 6.66 percent and the Lipper Mid Cap Value Index was down 5.01 percent. What helped the Fund The desire for risk assets declined in 2015, with investors favoring larger company stocks over mid and small company stocks. Those industries leveraged to better stability and with better-than-average long- | term growth prospects tended to perform the best. In the Equity Growth Fund, some of the sectors producing the best returns were in consumer staples, health care and information technology. One of the top performers was Hormel Foods Corp (+37.98%). The company manufactures and markets consumer- branded meat and food products. Through the year, the company benefitted from continued strength in the product portfolio, with 30 of its brands having the first or second market share position. It also benefitted as several of the acquisitions made over the last several years started to contribute to its efficiency and sales growth. In health care, Lifepoint Health Inc. (+22.46%) was a top contributor. The company is a network of hospitals that offers a range of medical and surgical services, such as general surgery, internal medicine, obstetrics, emergency room care and many more. The company has benefited from an expansion in Medicaid coverage in many of the states in which it operates. Lifepoint Health has also continued to make strategic acquisitions that have helped its growth prospects. In the technology sector, Commscope Holdings (+34.91%) produced outstanding returns. The company operates as a holding company, and through its subsidiaries provides end-to-end solutions connecting technology and wireless and wired networks throughout the world. Other top stocks that added to the Fund’s return included Dentsply |
3
International, Spectrum Brands Holdings, Global Payments Inc., Jetblue Airways, and Tesoro Corp. What hurt the Fund On the other end of the spectrum, several specific securities and sectors produced negative returns for the Fund. Some of the worst performers were in energy, financials and materials. Several of the worst performers came from the Energy sector including Helix Energy Solutions (-70.7%), Atwood Oceanics (-58.9%), Southwestern Energy Co. (-43.1%) and WPX Energy Inc. (-37.0%). Each of these companies focuses their business in the oil and gas exploration industry operating entirely in the U.S. Many of these businesses have come under heavy selling due to the rapid decline in oil prices. Additionally, many of these stocks have been sold in a fire-sale process, which has more to do with fear of the unknown surrounding the industry and less to do with company-specific risks. Another stock that negatively impacted fund returns was Genworth Financial (-56.1%). The company offers insurance, wealth management, and investment and financial solutions. The company is working through issues surrounding its long-term disability insurance | business and will look to rebound in the years ahead. Other stocks that negatively impacted Fund results include Rent-A-Center Inc., DSW Inc, Joy Global, Spirit Airlines and Ocwen Financial Corp. Outlook In the year ahead, we expect the economy to grow at a lackluster pace of around 2.0 percent, with an increased chance of an economic slowdown. The Federal Reserve is expected to hike short-term interest rates four times in 2016, with the Fed Fund’s Rate reaching 1.25 percent by year’s end. Along with the strain on the credit markets from a persistent and extended drop in the price of oil, market volatility and pressure on corporate-earnings growth could increase. After a sluggish year for equities, investors should temper their expectations for the year ahead, as much of the good news has already been priced into markets. The Equity Growth Fund’s mix of mid-cap and smaller-cap stocks and bias toward quality companies should provide solid returns relative to the category in the year ahead. We also will look to the energy, materials and industrial sectors to uncover opportunities to invest in companies that have been unfairly punished during this most recent sell-off. |
PERFORMANCE SUMMARY (Unaudited)
$10,000 investment made December 31, 2005. Past performance should not be used to attempt to predict future performance. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
BALANCED FUND (Unaudited)
Seeks to provide capital appreciation, current income and preservation of capital by investing in a diversified portfolio of common stocks and bonds.
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE (Unaudited)
2015 Results The combination of weaker economic data along with the anticipation of an interest rate increase by the Federal Reserve led investors to reduce their risk exposure during the year. Although the economy posted positive growth and the unemployment rate fell to 5.0 percent, the continued growth problems in China and dramatic deterioration in commodity prices increased the prospects of lower global growth in the quarters ahead. For the year, the Balanced Fund declined 3.86 percent while the Lipper Balanced Fund Index declined 0.42 percent. In addition, the S&P 500 Index posted a 1.37 percent return and the Barclays Aggregate Bond Index was up 0.55 percent. What helped the Fund The Fund holds a mix of large and mid cap stocks along with a variety of investment grade fixed income securities. Those industries leveraged to better stability and higher than average long-term growth prospects tended to perform the best. In the mid cap portion of the Fund, some of the sectors producing the best | returns were in Consumer Staples, Health Care, and Information Technology. One of the top performers was Hormel Foods Corp (+37.98%). The company manufactures and markets consumer branded meat and food products. Through the year, the company benefitted from continued strength in the product portfolio with 30 of their brands having the first or second market share position. They also benefitted as several of the acquisitions they have made over the last several years started to contribute to their efficiency and sales growth. In health care, Lifepoint Health Inc. (+22.46%) was a top contributor. In the large portion of the fund, outperformance was driven by energy, consumer staples, and health care. One top performer in energy was the oil refiner and marketer Tesoro Corp (+39%). Strong refining margins as a result of low oil prices helped push the stock higher. In health care, Aetna Inc (+22%), a diversified health care benefits company, outperformed due to steady business fundamentals resulting from previous acquisitions and pricing actions, as well as merger speculation in the managed care industry. Other top stocks which added |
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to Fund returns included Dentsply International, Spectrum Brands Holdings and Jetblue Airways. What hurt the Fund On the other end of the spectrum, several specific securities and sectors produced negative returns for the mid cap portion of the Fund. Some of the worst performers were in energy, financials and materials. Several of the worst performers came from the Energy sector including Helix Energy Solutions (-70.7%), Atwood Oceanics (-58.9%), Southwestern Energy Co. (-43.1%) and WPX Energy Inc. (-37.0%). Each of these companies focuses their business in the oil and gas exploration industry operating entirely in the U.S. Many of these businesses have come under heavy selling due to the rapid decline in oil prices. In the large cap segment, sectors where the Fund underperformed were information technology, industrials and consumer discretionary. Our main detractor in information technology was Micron Technology (-46%), a memory chip manufacturer. Micron’s strong performance recorded last year reversed itself due to falling prices from excess memory chip supply. For the industrials sector, United Rentals (-33%), the largest equipment rental company in | the world, declined as energy-related demand fell significantly due to lower oil prices. A major detractor in consumer discretionary was Scripps Networks Interactive Inc. (-27%), a lifestyle-oriented cable channel operator. During the year, Scripps saw margin declines due to rising programming costs. In general, media-sector stocks were volatile during the year because of concerns over cable subscriber losses and consumers moving to online digital content. Outlook In the year ahead, we expect the combination of muted global growth, a fall in commodity prices and a strong dollar to provide headwinds to both the economy and capital markets. The expectations that the Federal Reserve will increase interest rates several times in 2016 could put additional strain on the credit markets and lead to higher market volatility. However, domestic job growth should remain strong to help balance out some of these negative trends. In this environment we have increased the quality of both the bond and stock holdings in the Fund. Over the long term, the Balanced Fund’s mix of large value stocks, mid cap growth stocks and investment grade bonds should continue to provide clients with a modest income stream and the potential for capital appreciation. |
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PERFORMANCE SUMMARY (Unaudited)
$10,000 investment made December 31, 2005. Past performance should not be used to attempt to predict future performance. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
RETIREMENT INCOME FUND (Unaudited)
Seeks to provide investors with current income and preservation of capital by investing in corporate, high-yield, mortgage-backed and agency securities.
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE (Unaudited)
2015 Results In the early part of the year, investors anticipated the economy would produce modest gains and, as a result, the Federal Reserve would begin to normalize interest rates at some point during the year. While the economy generally produced reasonable growth at around 2.0-2.5 percent, it wasn’t without some volatility and uncertainty along the way. The manufacturing sector dragged on growth as commodity prices fell hard. In this environment, the yield on the 10-year U.S. Treasury bond proved a bit volatile throughout the year. Overall, the yield rose from around 2.0 percent to 2.2 percent. Across the fixed-income market, riskier bonds and those tied to the volatile energy and commodity sectors produced some of the worst returns. The Retirement Income Fund, with a major allocation to corporate bonds, declined 0.13 percent for 2015 while the Barclays Aggregate Bond Index returned 0.55 percent and the Morningstar Intermediate-Term Bond category posted a decline of 0.32 percent. What helped the Fund The continuation of very low interest rates along with tame inflation led investors to seek higher yielding alternatives throughout the past few years and into 2015. After several quarters of speculation regarding a potential interest rate hike by the Federal Reserve, they finally lifted short-term rates in December. At | the beginning of the year, the Fund held about 44 percent in investment-grade bonds, 36 percent in U.S. mortgage-backed bonds, 15 percent in high-yield corporate bonds and the rest in cash. One of the key drivers that helped Fund performance during the year was our decision to maintain a neutral duration relative to the benchmark and reduce risk across the portfolio. We sold several high-yield energy-related bonds late in the third quarter. Our sell decision was based on the persistent slide in commodity prices and our assessment that conditions might worsen. One bond in particular, Chesapeake Energy, was sold at around $85 in July; by the end of the year the price had fallen to about $29. A few other bonds were sold prior to significant price declines including Transocean and Atwood Oceanics. Further, several bonds in the Fund exhibited a modest price increase for the year and contributed to returns. Netflix bonds increased slightly as the internet-subscription service company posted solid growth numbers. Industrial companies General Electric and Flour benefited from global growth and investors’ desire for large and liquid bond issuers. Both bonds increased less than one percent in price for the year. Other top performers included the diversified investment company BlackRock and several government agency bonds. What hurt the Fund On the other end of the spectrum, a few specific |
8
industries and holdings detracted from Fund performance. In general, bonds with a longer duration or higher sensitivity to interest rate movements tended to negatively impact returns. The bonds of IAC Interactive Corporation proved to be one of the worst performers. The media and Internet company spun off a portion of its business, which was not well received by investors. The price of its bonds fell about $14 for the year. Marathon Petroleum refines, transports and markets petroleum products. The company was negatively impacted by falling energy prices throughout the year, which led to a decline in the price of its bonds. A few high coupon mortgage-backed agency bonds also declined in price as a consequence of higher market interest rates. Other poor performing bonds in the Fund were Progress Energy, Express Scripts and Gilead Sciences. Outlook Prospects for the bond market depend on the growth rate of the economy and the timing of future interest rate hikes by the Federal Reserve. In December of | last year, the Federal Reserve finally began to raise short-term interest rates from their historically low and near-zero base. Although the Fed only raised rates marginally, investors will remain concerned over the pace and degree of future hikes and how they might impact the economy. The recent data suggests the economy has decelerated over the past few quarters, with the potential of further weakness in the months ahead. The combination of modest growth and the potential for additional interest rate hikes should keep overall interest rates within the range of the past few years. We expect further spread widening in corporate bonds along with higher interest rates to suppress returns across most fixed-income sectors, with higher volatility and lower returns as the result. In the Retirement Income Fund, we expect to maintain our conservative tilt comprised of an underweight to high-yield corporate bonds and an overweight to government-related bonds relative to our historical allocation. We expect most sectors of the bond market to provide returns consistent with their coupon yield for the year ahead. |
RETIREMENT INCOME - PERFORMANCE SUMMARY (Unaudited)
$10,000 investment made December 31, 2005. Past performance should not be used to attempt to predict future performance. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
CORE EQUITY FUND (Unaudited)
Seeks to provide investors with long-term growth of capital. The Fund invests primarily in stocks of companies with market capitalizations of at least $1 billion that have improving fundamentals and whose stock is undervalued by the market.
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE (Unaudited)
2015 Results During the year, we were concerned about high equity market valuations with expectations that the equity bull market would lose some steam. The year brought heightened volatility due to increasing concerns about slowing global growth, declining oil prices, and U.S. Dollar strength. In December, the Federal Reserve (Fed) implemented a much anticipated interest rate hike of 0.25 percent, the first increase since cutting rates during the global financial crisis in 2008. The combination of improving employment trends and steady economic growth were the primary factors that led Fed officials to this decision. In general, small and midsized stocks struggled to keep up with large company stocks as investors looked to pull back on riskier equity sectors. Domestic equities outpaced most foreign equities, and growth stocks outperformed value stocks. The Core Equity Fund invests in large market capitalization stocks with a bias toward those with favorable relative valuations, healthy balance sheets, and modest growth. For the year, the Core Equity Fund retail shares decreased 2.79 percent as compared to the S&P 500 Value Index which declined 3.13 percent. The Lipper Large-Cap Value Index fell 3.65 percent for the year. | What helped the Fund Throughout the year, investors’ risk preferences shifted to less volatile large cap stocks and away from small and mid cap stocks whose valuations continue to be stretched. With expectations that the Federal Reserve would increase interest rates, concerns about future equity market volatility pushed investors into larger companies with more established names for a second year in a row. The Fund strategy benefited from this preference for large caps, as the portfolio held up relatively better than mid cap and small cap categories. The Fund’s sector outperformance was driven by energy, consumer staples, and health care. One top performer in energy was the oil refiner and marketer Tesoro Corp (+39%). Strong refining margins as a result of low oil prices helped push the stock higher. A stellar performer in the consumer staples sector was Hormel Foods Corp (+23%). The company is a leading manufacturer and marketer of consumer-branded meat and food products and benefited from past acquisitions that contributed to its efficiency and sales growth. In health care, Aetna Inc (+22%), a diversified health care benefits company, outperformed due to steady business fundamentals resulting from previous acquisitions and pricing actions, as well as merger speculation in the managed care industry. |
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What hurt the Fund Other sectors where the Fund underperformed were information technology, industrials, and consumer discretionary. Our main detractor in information technology was Micron Technology (-46%), a memory chip manufacturer. Micron’s strong performance recorded last year reversed itself due to falling prices that resulted from excess memory chip supply. For the industrials sector, United Rentals (-33%), the largest equipment rental company in the world, declined as energy-related demand fell significantly due to lower oil prices. A major detractor in consumer discretionary was Scripps Networks Interactive Inc (-27%), a lifestyle oriented cable channel operator. During the year, Scripps saw margin declines due to rising programming costs. In general, media sector stocks were volatile during the year due to concerns of cable subscriber losses and consumers moving to online digital content. | Outlook As we look forward, the combination of slowing global growth, commodity price declines, and U.S. Dollar strength alongside high equity valuations will continue to weigh on capital markets. Currently, healthy employment trends and steady, though lackluster, growth are the positives. Weak corporate earnings growth, high wholesale inventory levels and reduced manufacturing activity domestically, could be early warning signs of potential growth problems in the future. Finally, with the Federal Reserve expected to raise interest rates throughout the year, we will monitor the impact that higher rates will have on the economy, exporters and the industrial sector. In the current environment, investors should continue to take a long-term approach and favor companies with proven businesses, predictable earnings, and inexpensive valuations. The Core Equity Fund’s strategy of investing in these types of companies should provide solid returns relative to the category in the year ahead. |
PERFORMANCE SUMMARY (Unaudited)
$10,000 investment made January 2, 2008 (inception). Past performance should not be used to attempt to predict future performance. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
ADVANCE CAPITAL I - EQUITY GROWTH FUND (Retail Shares)
FINANCIAL HIGHLIGHTS
SELECTED PER-SHARE DATA AND RATIOS
(For a Share Outstanding Throughout Each Period) |
|
| Years ended December 31 |
|
|
|
| ||||
| 2015 |
| 2014 | 2013 | 2012 | 2011 |
|
| |||
Net asset value, beginning of year | $20.93 |
| $25.31 | $25.76 | $22.60 | $23.60 |
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| |||
Income (Loss) from investment operations* |
|
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|
|
|
|
|
|
|
|
|
Net investment income (loss) | 0.16 |
| 0.09 | 0.07 | 0.05 | (0.04) |
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Net realized and unrealized gain (loss) | (1.47) |
| 1.71 | 7.55 | 3.16 | (0.96) |
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on investments |
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| ||||||||
Total from investment operations |
|
|
|
|
|
|
|
|
|
|
|
(1.31) |
| 1.80 | 7.62 | 3.21 | (1.00) |
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| ||||
Less distributions |
|
|
|
|
|
|
|
|
|
|
|
Net investment income | (0.20) |
| (0.14) | (0.07) | (0.05) | 0.00 |
|
| |||
Net realized gain on investments | (0.06) |
| (6.04) | (8.00) | 0.00 | 0.00 |
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| |||
Total distributions |
|
|
|
|
|
|
|
|
|
|
|
(0.26) |
| (6.18) | (8.07) | (0.05) | 0.00 |
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Net asset value, end of year |
|
|
|
|
|
|
|
|
|
|
|
$19.36 |
| $20.93 | $25.31 | $25.76 | $22.60 |
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| ||||
Total Return |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(6.26%) | 7.10% | 29.59% | 14.20% | (4.24%) |
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Ratios and Supplemental Data |
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|
|
|
|
|
|
|
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Net assets, end of year (in thousands) | $46,003 |
| $76,313 | $90,998 | $82,114 | $85,669 |
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| |||
Ratio of expenses to average net assets | 1.16% |
| 1.11% | 1.11% | 1.09% | 1.08% |
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Ratio of net investment income (loss) |
|
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|
|
|
|
|
|
|
|
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to average net assets | 0.79% |
| 0.35% | 0.25% | 0.18% | (0.16%) |
| ||||
Portfolio turnover rate | 218% |
| 254% | 118% | 40% | 107% |
|
|
*Per share amounts presented are based on average shares outstanding.
See Notes to Financial Statements
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ADVANCE CAPITAL I - BALANCED FUND (Retail Shares)
FINANCIAL HIGHLIGHTS
SELECTED PER-SHARE DATA AND RATIOS
(For a Share Outstanding Throughout Each Period) |
|
| Years ended December 31 |
|
|
| ||||
| 2015 |
| 2014 | 2013 | 2012 | 2011 |
| |||
Net asset value, beginning of year | $19.08 |
| $19.74 | $17.09 | $15.81 | $15.83 |
| |||
Income (loss) from investment operations* |
|
|
|
|
|
|
|
|
|
|
Net investment income | 0.28 |
| 0.25 | 0.21 | 0.26 | 0.16 |
| |||
Net realized and unrealized gain (loss) | (1.01) |
| 1.09 | 2.70 | 1.33 | 0.07 |
| |||
on investments |
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| ||||||||
Total from investment operations |
|
|
|
|
|
|
|
|
|
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(0.73) |
| 1.34 | 2.91 | 1.59 | 0.23 |
| ||||
Less distributions |
|
|
|
|
|
|
|
|
|
|
Net investment income | (0.30) |
| (0.28) | (0.26) | (0.31) | (0.25) |
| |||
Net realized gain on investments | (0.02) |
| (1.72) | 0.00 | 0.00 | 0.00 |
| |||
Total distributions |
|
|
|
|
|
|
|
|
|
|
(0.32) |
| (2.00) | (0.26) | (0.31) | (0.25) |
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Net asset value, end of year |
|
|
|
|
|
|
|
|
|
|
$18.03 |
| $19.08 | $19.74 | $17.09 | $15.81 |
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Total Return |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(3.86%) | 6.81% | 17.12% | 10.09% | 1.46% |
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Ratios and Supplemental Data |
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (in thousands) | $94,145 |
| $157,734 | $170,765 | $158,145 | $157,806 |
| |||
Ratio of expenses to average net assets | 1.14% |
| 1.10% | 1.09% | 1.07% | 1.06% |
| |||
Ratio of net investment income |
|
|
|
|
|
|
|
|
|
|
to average net assets | 1.48% |
| 1.22% | 1.13% | 1.56% | 1.02% |
| |||
Portfolio turnover rate | 138% |
| 158% | 66% | 49% | 86% |
|
*Per share amounts presented are based on average shares outstanding.
See Notes to Financial Statements
13
ADVANCE CAPITAL I - RETIREMENT INCOME FUND (Retail Shares)
FINANCIAL HIGHLIGHTS
SELECTED PER-SHARE DATA AND RATIOS
(For a Share Outstanding Throughout Each Period) |
|
| Years ended December 31 |
|
|
| |||||
| 2015 |
| 2014 |
| 2013 |
| 2012 |
| 2011 |
|
|
Net asset value, beginning of year | $8.84 |
| $8.61 |
| $8.96 |
| $8.74 |
| $8.49 |
|
|
Income (Loss) from investment operations* |
|
|
|
|
|
|
|
|
|
|
|
Net investment income | 0.22 |
| 0.23 |
| 0.22 |
| 0.24 |
| 0.24 |
|
|
Net realized and unrealized gain (loss) | (0.23) |
| 0.27 |
| (0.27) |
| 0.30 |
| 0.34 |
|
|
on investments |
|
|
|
|
|
| |||||
Total from investment operations |
|
|
|
|
|
|
|
|
|
|
|
(0.01) |
| 0.50 |
| (0.05) |
| 0.54 |
| 0.58 |
|
| |
Less distributions |
|
|
|
|
|
|
|
|
|
|
|
Net investment income | (0.25) |
| (0.27) |
| (0.30) |
| (0.32) |
| (0.33) |
|
|
Total distributions |
|
|
|
|
|
|
|
|
|
|
|
(0.25) |
| (0.27) |
| (0.30) |
| (0.32) |
| (0.33) |
|
| |
Net asset value, end of year |
|
|
|
|
|
|
|
|
|
|
|
$8.58 |
| $8.84 |
| $8.61 |
| $8.96 |
| $8.74 |
|
| |
Total Return |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(0.13%) | 5.80% |
| (0.59%) | 6.21% |
| 6.97% |
|
| |||
Ratios and Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (in thousands) | $134,362 |
| $195,441 |
| $209,826 |
| $252,422 |
| $262,938 |
|
|
Ratio of expenses to average net assets | 0.93% | 0.90% | 0.88% | 0.86% | 0.85% |
| |||||
Ratio of net investment income |
|
|
|
|
|
|
|
|
|
|
|
to average net assets | 2.53% |
| 2.62% |
| 2.55% |
| 2.72% |
| 2.80% |
|
|
Portfolio turnover rate | 28% |
| 37% |
| 35% |
| 51% |
| 55% |
|
|
*Per share amounts presented are based on average shares outstanding.
See Notes to Financial Statements
14
ADVANCE CAPITAL I - CORE EQUITY FUND (Retail Shares)
FINANCIAL HIGHLIGHTS
SELECTED PER-SHARE DATA AND RATIOS
(For a Share Outstanding Throughout Each Period) |
|
| Years ended December 31 |
|
|
|
| |||||
| 2015 |
| 2014 |
| 2013 |
| 2012 |
| 2011 |
|
|
|
Net asset value, beginning of year | $11.22 |
| $12.87 |
| $10.69 |
| $9.50 |
| $9.79 |
|
|
|
Income (Loss) from investment operations* |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income | 0.11 |
| 0.05 |
| 0.08 |
| 0.07 |
| 0.05 |
|
|
|
Net realized and unrealized gain (loss) | (0.42) |
| 1.31 |
| 3.15 |
| 1.19 |
| (0.29) |
|
|
|
on investments |
|
|
|
|
|
|
| |||||
Total from investment operations |
|
|
|
|
|
|
|
|
|
|
|
|
(0.31) |
| 1.36 |
| 3.23 |
| 1.26 |
| (0.24) |
|
|
| |
Less distributions |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income | (0.15) |
| (0.05) |
| (0.08) |
| (0.07) |
| (0.05) |
|
|
|
Net realized gain on investments | 0.00 |
| (2.96) |
| (0.97) |
| 0.00 |
| 0.00 |
|
|
|
Total distributions |
|
|
|
|
|
|
|
|
|
|
|
|
(0.15) |
| (3.01) |
| (1.05) |
| (0.07) |
| (0.05) |
|
|
| |
Net asset value, end of year |
|
|
|
|
|
|
|
|
|
|
|
|
$10.76 |
| $11.22 |
| $12.87 |
| $10.69 |
| $9.50 |
|
|
| |
Total Return |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| ||
(2.79%) | 10.56% |
| 30.23% |
| 13.31% |
| (2.39%) |
| ||||
Ratios and Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (in thousands) | $8,700 |
| $15,391 |
| $14,490 |
| $10,546 |
| $8,677 |
|
|
|
Ratio of expenses to average net assets | 1.50%^ | 1.40%^ | 1.39%^ | 1.40%^ | 1.40%^ |
| ||||||
Ratio of expenses to average net assets | 1.33%† | 1.28%† | 1.29%† | 1.29%† | 1.29%† |
| ||||||
Ratio of net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
to average net assets | 0.96% |
| 0.37% |
| 0.67% |
| 0.70% |
| 0.51% |
|
|
|
Portfolio turnover rate | 209% |
| 235% |
| 130% |
| 42% |
| 36% |
|
|
|
*Per share amounts presented are based on average shares outstanding.
^Before waivers
†Net of waivers
See Notes to Financial Statements
15
ADVANCE CAPITAL I - EQUITY GROWTH FUND (Institutional Shares)
FINANCIAL HIGHLIGHTS
SELECTED PER-SHARE DATA AND RATIOS
(For a Share Outstanding Throughout Each Period) |
|
| Years ended December 31 |
|
|
|
| ||||
| 2015 |
| 2014 | 2013 | 2012 | 2011 |
|
| |||
Net asset value, beginning of year | $21.35 |
| $25.66 | $25.96 | $22.70 | $23.63 |
|
| |||
Income (Loss) from investment operations* |
|
|
|
|
|
|
|
|
|
|
|
Net investment income | 0.24 |
| 0.17 | 0.15 | 0.11 | 0.03 |
|
| |||
Net realized and unrealized gain (loss) | (1.52) |
| 1.70 | 7.62 | 3.20 | (0.96) |
|
| |||
on investments |
|
|
| ||||||||
Total from investment operations |
|
|
|
|
|
|
|
|
|
|
|
(1.28) |
| 1.87 | 7.77 | 3.31 | (0.93) |
|
| ||||
Less distributions |
|
|
|
|
|
|
|
|
|
|
|
Net investment income | (0.20) |
| (0.14) | (0.07) | (0.05) | 0.00 |
|
| |||
Net realized gain on investments | (0.06) |
| (6.04) | (8.00) | 0.00 | 0.00 |
|
| |||
Total distributions |
|
|
|
|
|
|
|
|
|
|
|
(0.26) |
| (6.18) | (8.07) | (0.05) | 0.00 |
|
| ||||
Net asset value, end of year |
|
|
|
|
|
|
|
|
|
|
|
$19.81 |
| $21.35 | $25.66 | $25.96 | $22.70 |
|
| ||||
Total Return |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(6.00%) | 7.28% | 29.93% | 14.58% | (3.94%) |
| ||||||
Ratios and Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (in thousands) | $1,371 |
| $68 | $1,488 | $1,343 | $1,203 |
|
| |||
Ratio of expenses to average net assets | 0.92% |
| 0.86% | 0.86% | 0.84% | 0.83% |
|
| |||
Ratio of net investment income |
|
|
|
|
|
|
|
|
|
|
|
to average net assets | 1.13% |
| 0.64% | 0.48% | 0.44% | 0.14% |
|
| |||
Portfolio turnover rate | 218% |
| 254% | 118% | 40% | 107% |
|
|
*Per share amounts presented are based on average shares outstanding.
See Notes to Financial Statements
16
ADVANCE CAPITAL I - BALANCED FUND (Institutional Shares)
FINANCIAL HIGHLIGHTS
SELECTED PER-SHARE DATA AND RATIOS
(For a Share Outstanding Throughout Each Period) |
|
| Years ended December 31 |
|
|
| ||||
| 2015 |
| 2014 | 2013 | 2012 | 2011 |
| |||
Net asset value, beginning of year | $19.04 |
| $19.70 | $17.06 | $15.77 | $15.79 |
| |||
Income (loss) from investment operations* |
|
|
|
|
|
|
|
|
|
|
Net investment income | 0.32 |
| 0.31 | 0.26 | 0.30 | 0.21 |
| |||
Net realized and unrealized gain (loss) | (1.01) |
| 1.08 | 2.68 | 1.34 | 0.07 |
| |||
on investments |
|
| ||||||||
Total from investment operations |
|
|
|
|
|
|
|
|
|
|
(0.69) |
| 1.39 | 2.94 | 1.64 | 0.28 |
| ||||
Less distributions |
|
|
|
|
|
|
|
|
|
|
Net investment income | (0.34) |
| (0.33) | (0.30) | (0.35) | (0.30) |
| |||
Net realized gain on investments | (0.02) |
| (1.72) | 0.00 | 0.00 | 0.00 |
| |||
Total distributions |
|
|
|
|
|
|
|
|
|
|
(0.36) |
| (2.05) | (0.30) | (0.35) | (0.30) |
| ||||
Net asset value, end of year |
|
|
|
|
|
|
|
|
|
|
$17.99 |
| $19.04 | $19.70 | $17.06 | $15.77 |
| ||||
Total Return |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(3.63%) | 7.09% | 17.38% | 10.45% | 1.71% |
| |||||
Ratios and Supplemental Data |
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (in thousands) | $918 |
| $536 | $215 | $697 | $622 |
| |||
Ratio of expenses to average net assets | 0.89% |
| 0.85% | 0.84% | 0.82% | 0.82% |
| |||
Ratio of net investment income |
|
|
|
|
|
|
|
|
|
|
to average net assets | 1.70% |
| 1.51% | 1.40% | 1.81% | 1.31% |
| |||
Portfolio turnover rate | 138% |
| 158% | 66% | 49% | 86% |
|
*Per share amounts presented are based on average shares outstanding.
See Notes to Financial Statements
17
ADVANCE CAPITAL I - RETIREMENT INCOME FUND (Institutional Shares)
FINANCIAL HIGHLIGHTS
SELECTED PER-SHARE DATA AND RATIOS
(For a Share Outstanding Throughout Each Period) |
|
| Years ended December 31 |
|
|
|
|
| ||||
| 2015 |
| 2014 |
| 2013 |
|
| 2012 |
| 2011 |
|
|
Net asset value, beginning of year | $8.84 |
| $8.61 |
| $8.96 |
|
| $8.74 |
| $8.48 |
|
|
Income (Loss) from investment operations* |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income | 0.25 |
| 0.25 |
| 0.25 |
|
| 0.26 |
| 0.26 |
|
|
Net realized and unrealized gain (loss) | (0.23) |
| 0.25 |
| (0.28) |
|
| 0.30 |
| 0.35 |
|
|
on investments |
|
|
|
|
|
|
| |||||
Total from investment operations |
|
|
|
|
|
|
|
|
|
|
|
|
0.02 |
| 0.50 |
| (0.03) |
|
| 0.56 |
| 0.61 |
|
| |
Less distributions |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income | (0.28) |
| (0.27) |
| (0.32) |
|
| (0.34) |
| (0.35) |
|
|
Total distributions |
|
|
|
|
|
|
|
|
|
|
|
|
(0.28) |
| (0.27) |
| (0.32) |
|
| (0.34) |
| (0.35) |
|
| |
Net asset value, end of year |
|
|
|
|
|
|
|
|
|
|
|
|
$8.58 |
| $8.84 |
| $8.61 |
|
| $8.96 |
| $8.74 |
|
| |
Total Return |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
0.21% |
| 6.07% |
| (0.34%) |
| 6.47% |
| 7.36% |
|
| ||
Ratios and Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (in thousands) | $492 |
| $1,929 |
| $487 |
|
| $593 |
| $579 |
|
|
Ratio of expenses to average net assets | 0.68%^ | 0.65%^ | 0.63%^ |
| 0.61%^ | 0.60%^ |
| |||||
Ratio of expenses to average net assets | 0.61%† | 0.65%† | 0.63%† | 0.61%† | 0.60%† |
| ||||||
Ratio of net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
to average net assets | 2.83% |
| 2.83% |
| 2.80% |
|
| 2.96% |
| 3.04% |
|
|
Portfolio turnover rate | 28% |
| 37% |
| 35% |
|
| 51% |
| 55% |
|
|
*Per share amounts presented are based on average shares outstanding.
^Before waivers
†Net of waivers
See Notes to Financial Statements
18
ADVANCE CAPITAL I - CORE EQUITY FUND (Institutional Shares)
FINANCIAL HIGHLIGHTS
SELECTED PER-SHARE DATA AND RATIOS
(For a Share Outstanding Throughout Each Period) |
|
| Years ended December 31 |
|
|
|
| |||||
| 2015 |
| 2014 |
| 2013 |
| 2012 |
| 2011 |
|
|
|
Net asset value, beginning of year | $11.50 |
| $13.08 |
| $10.83 |
| $9.61 |
| $9.87 |
|
|
|
Income (Loss) from investment operations* |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income | 0.13 |
| 0.07 |
| 0.12 |
| 0.10 |
| 0.08 |
|
|
|
Net realized and unrealized gain (loss) | (0.41) |
| 1.36 |
| 3.18 |
| 1.19 |
| (0.28) |
|
|
|
on investments |
|
|
|
|
|
|
| |||||
Total from investment operations |
|
|
|
|
|
|
|
|
|
|
|
|
(0.28) |
| 1.43 |
| 3.30 |
| 1.29 |
| (0.20) |
|
|
| |
Less distributions |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income | (0.15) |
| (0.05) |
| (0.08) |
| (0.07) |
| (0.06) |
|
|
|
Net realized gain on investments | 0.00 |
| (2.96) |
| (0.97) |
| 0.00 |
| 0.00 |
|
|
|
Total distributions |
|
|
|
|
|
|
|
|
|
|
|
|
(0.15) |
| (3.01) |
| (1.05) |
| (0.07) |
| (0.06) |
|
|
| |
Net asset value, end of year |
|
|
|
|
|
|
|
|
|
|
|
|
$11.07 |
| $11.50 |
| $13.08 |
| $10.83 |
| $9.61 |
|
|
| |
Total Return |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| ||
(2.46%) | 10.92% |
| 30.48% |
| 13.47% |
| (2.07%) |
| ||||
Ratios and Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (in thousands) | $147 |
| $151 |
| $513 |
| $618 |
| $588 |
|
|
|
Ratio of expenses to average net assets | 1.25%^ | 1.14%^ | 1.14%^ | 1.15%^ | 1.15%^ |
| ||||||
Ratio of expenses to average net assets | 1.08%† | 1.03%† | 1.04%† | 1.04%† | 1.04%† |
| ||||||
Ratio of net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
to average net assets | 1.17% |
| 0.54% |
| 0.92% |
| 0.94% |
| 0.77% |
|
|
|
Portfolio turnover rate | 209% |
| 235% |
| 130% |
| 42% |
| 36% |
|
|
|
*Per share amounts presented are based on average shares outstanding.
^Before waivers
†Net of waivers
See Notes to Financial Statements
19
ADVANCE CAPITAL I - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
Common Stock | Shares |
| Value |
| Common Stock | Shares |
| Value |
BASIC MATERIALS - 5.1% |
|
|
|
| CONSUMER, NON-CYCLICAL - 29.3% |
|
|
|
CF Industries Holdings, Inc. | 2,400 |
| $ 97,944 |
| ADT Corp. | 4,000 |
| $ 131,920 |
Eastman Chemical Co. | 1,700 |
| 114,767 |
| Baxter International, Inc. | 28,600 |
| 1,091,090 |
Ecolab, Inc. | 4,100 |
| 468,958 |
| Becton Dickinson and Co. | 7,000 |
| 1,078,630 |
International Flavors | 4,400 |
| 526,416 |
| Campbell Soup Co. | 18,800 |
| 987,940 |
International Paper Co. | 2,900 |
| 109,330 |
| Centene Corp.* | 4,200 |
| 276,402 |
Minerals Technologies, Inc. | 2,300 |
| 105,478 |
| Community Health Systems* | 5,400 |
| 143,262 |
Mosaic Co. | 3,700 |
| 102,083 |
| CR Bard, Inc. | 4,900 |
| 928,256 |
Newmont Mining Corp. | 6,600 |
| 118,734 |
| Deluxe Corp. | 2,200 |
| 119,988 |
Olin Corp. | 6,500 |
| 112,190 |
| DENTSPLY International, Inc. | 18,700 |
| 1,137,895 |
PolyOne Corp. | 3,800 |
| 120,688 |
| Flowers Foods, Inc. | 37,600 |
| 808,024 |
Sherwin-Williams Co. | 2,000 |
| 519,200 |
| Global Payments, Inc. | 16,200 |
| 1,045,062 |
COMMUNICATIONS - 3.0% |
|
|
|
| Hershey Co. | 10,200 |
| 910,554 |
EchoStar Corp.* | 5,400 |
| 211,194 |
| Hormel Foods Corp. | 14,900 |
| 1,178,292 |
John Wiley & Sons, Inc. | 21,000 |
| 945,630 |
| Kellogg Co. | 14,200 |
| 1,026,234 |
Scripps Networks Interactive | 4,700 |
| 259,487 |
| LifePoint Health, Inc.* | 3,200 |
| 234,880 |
CONSUMER, CYCLICAL - 16.4% |
|
|
|
| McCormick & Co., Inc. | 11,900 |
| 1,018,164 |
BorgWarner, Inc. | 5,400 |
| 233,442 |
| Pilgrim’s Pride Corp. | 11,400 |
| 251,826 |
Cabela’s, Inc.* | 5,300 |
| 247,669 |
| Quanta Services, Inc.* | 5,000 |
| 101,250 |
Cinemark Holdings, Inc. | 7,000 |
| 234,010 |
| Sprouts Farmers Market* | 10,600 |
| 281,854 |
CST Brands, Inc. | 6,900 |
| 270,066 |
| Sysco Corp. | 24,200 |
| 992,200 |
Dana Holding Corp. | 14,300 |
| 197,340 |
| United Rentals, Inc.* | 2,100 |
| 152,334 |
DSW, Inc. | 9,100 |
| 217,126 |
| DIVERSIFIED - 0.4% |
|
|
|
Gap, Inc. | 8,200 |
| 202,540 |
| Leucadia National Corp. | 11,700 |
| 203,463 |
Genuine Parts Co. | 11,600 |
| 996,324 |
| ENERGY - 2.0% |
|
|
|
GNC Holdings, Inc. | 5,700 |
| 176,814 |
| Atwood Oceanics, Inc. | 14,700 |
| 150,381 |
Harman International | 2,300 |
| 216,683 |
| First Solar, Inc.* | 5,200 |
| 343,148 |
HNI Corp. | 2,800 |
| 100,968 |
| FMC Technologies, Inc.* | 7,600 |
| 220,476 |
Kohl’s Corp. | 5,100 |
| 242,913 |
| Oil States International, Inc.* | 8,900 |
| 242,525 |
Mattel, Inc. | 47,700 |
| 1,296,009 |
| FINANCIAL - 11.0% |
|
|
|
Nordstrom, Inc. | 13,000 |
| 647,530 |
| Ally Financial, Inc.* | 11,400 |
| 212,496 |
PACCAR, Inc. | 2,400 |
| 113,760 |
| Ameriprise Financial, Inc. | 2,100 |
| 223,482 |
PVH Corp. | 2,300 |
| 169,395 |
| Artisan Partners Asset Mgmt. | 6,500 |
| 234,390 |
Southwest Airlines Co. | 3,200 |
| 137,792 |
| Assured Guaranty Ltd | 9,000 |
| 237,870 |
Spirit Airlines, Inc.* | 2,600 |
| 103,610 |
| CBL & Associates Properties | 16,700 |
| 206,579 |
Thor Industries, Inc. | 4,400 |
| 247,060 |
| CBRE Group, Inc.* | 7,200 |
| 248,976 |
United Continental Holdings* | 2,400 |
| 137,520 |
| CIT Group, Inc. | 5,700 |
| 226,290 |
Urban Outfitters, Inc.* | 7,800 |
| 177,450 |
| CNA Financial Corp. | 6,700 |
| 235,505 |
VF Corp. | 13,700 |
| 852,825 |
| E*TRADE Financial Corp.* | 8,900 |
| 263,796 |
WESCO International, Inc.* | 2,600 |
| 113,568 |
| Forest City Realty Trust, Inc.* | 11,100 |
| 243,423 |
Whirlpool Corp. | 1,500 |
| 220,305 |
| Genworth Financial, Inc.* | 49,900 |
| 186,127 |
Wyndham Worldwide Corp. | 3,200 |
| 232,480 |
| Jones Lang LaSalle, Inc. | 1,600 |
| 255,776 |
|
|
|
|
| Legg Mason, Inc. | 5,500 |
| 215,765 |
See Notes to Financial Statements
20
ADVANCE CAPITAL I - EQUITY GROWTH FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
Common Stock | Shares |
| Value |
| Common Stock and Short-Term Investments | Shares |
| Value |
FINANCIAL - 11.0% (continued) |
|
|
|
| INDUSTRIAL - 16.3% (continued) |
|
|
|
Lincoln National Corp. | 4,900 |
| $246,274 |
| Old Dominion Freight Line* | 2,000 |
| $ 118,140 |
Navient Corp. | 20,800 |
| 238,160 |
| Packaging Corp of America | 1,800 |
| 113,490 |
OneMain Holdings, Inc.* | 5,200 |
| 216,008 |
| Rockwell Automation, Inc. | 5,000 |
| 513,050 |
Raymond James Financial | 4,700 |
| 272,459 |
| Ryder System, Inc. | 1,700 |
| 96,611 |
Realogy Holdings Corp.* | 6,000 |
| 220,020 |
| Terex Corp. | 6,800 |
| 125,664 |
Santander Consumer USA* | 11,000 |
| 174,350 |
| Textron, Inc. | 3,200 |
| 134,432 |
SLM Corp.* | 32,600 |
| 212,552 |
| Trinity Industries, Inc. | 5,400 |
| 129,708 |
Stifel Financial Corp.* | 5,500 |
| 232,980 |
| Triumph Group, Inc. | 2,900 |
| 115,275 |
Voya Financial, Inc. | 5,900 |
| 217,769 |
| Valmont Industries, Inc. | 1,300 |
| 137,826 |
WP Glimcher, Inc. | 19,900 |
| 211,139 |
|
|
|
|
|
INDUSTRIAL - 16.3% |
|
|
|
| TECHNOLOGY - 8.4% |
|
|
|
Acuity Brands, Inc. | 2,900 |
| 678,020 |
| Analog Devices, Inc. | 17,400 |
| 962,568 |
B/E Aerospace, Inc. | 2,700 |
| 114,399 |
| Fair Isaac Corp. | 11,400 |
| 1,073,652 |
Belden, Inc. | 5,000 |
| 238,400 |
| ON Semiconductor Corp.* | 24,500 |
| 240,100 |
CH Robinson Worldwide, Inc. | 7,400 |
| 458,948 |
| Pitney Bowes, Inc. | 6,200 |
| 128,030 |
CLARCOR, Inc. | 10,600 |
| 526,608 |
| Rackspace Hosting, Inc.* | 9,300 |
| 235,476 |
Colfax Corp.* | 4,200 |
| 98,070 |
| Science Applications | 5,700 |
| 260,946 |
Dover Corp. | 8,900 |
| 545,659 |
| Xilinx, Inc. | 22,600 |
| 1,061,522 |
Expeditors International | 10,600 |
| 478,060 |
| UTILITIES - 1.9% |
|
|
|
Flowserve Corp. | 3,000 |
| 126,240 |
| UGI Corp. | 27,100 |
| 914,896 |
Genesee & Wyoming, Inc.* | 2,000 |
| 107,380 |
| TOTAL COMMON STOCK - 93.8% |
|
|
|
Graco, Inc. | 7,500 |
| 540,525 |
| (Cost $46,277,426) |
|
| 44,446,529 |
Graphic Packaging Holding Co. | 8,600 |
| 110,338 |
| SHORT-TERM INVESTMENTS - 6.1% |
|
|
|
Hubbell, Inc. | 5,900 |
| 596,136 |
| Federated Treasury Obligations Fund, 0.07% Yield+ |
|
|
|
Huntington Ingalls | 1,200 |
| 152,220 |
| (Cost $2,894,817) | 2,894,817 |
| 2,894,817 |
Jacobs Engineering Group* | 3,300 |
| 138,435 |
|
|
|
|
|
Kirby Corp.* | 2,000 |
| 105,240 |
| TOTAL INVESTMENTS IN SECURITIES - 99.9% |
|
|
|
L-3 Communications Holdings | 1,200 |
| 143,412 |
| (Cost $49,172,243) |
|
| 47,341,346 |
Lincoln Electric Holdings | 9,600 |
| 498,144 |
| OTHER ASSETS LESS LIABILITIES - 0.1% |
|
| 32,005 |
MSA Safety, Inc. | 12,500 |
| 543,375 |
| TOTAL NET ASSETS - 100.0% |
|
| $47,373,351 |
*Securities are non-income producing
+Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2015.
See Notes to Financial Statements
21
ADVANCE CAPITAL I - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
Common Stock | Shares |
| Value |
| Common Stock | Shares |
| Value |
BASIC MATERIALS - 2.9% |
|
|
|
| CONSUMER, CYCLICAL - 11.6% (continued) |
|
|
|
CF Industries Holdings, Inc. | 4,600 |
| $ 187,726 |
| Urban Outfitters, Inc.* | 2,500 |
| $ 56,875 |
Eastman Chemical Co. | 3,300 |
| 222,783 |
| VF Corp. | 13,600 |
| 846,600 |
Ecolab, Inc. | 5,500 |
| 629,090 |
| Wal-Mart Stores, Inc. | 14,700 |
| 901,110 |
International Flavors | 2,100 |
| 251,244 |
| WESCO International, Inc.* | 1,500 |
| 65,520 |
International Paper Co. | 5,700 |
| 214,890 |
| Whirlpool Corp. | 2,200 |
| 323,114 |
Minerals Technologies, Inc. | 1,000 |
| 45,860 |
| Wyndham Worldwide Corp. | 1,000 |
| 72,650 |
Mosaic Co. | 7,100 |
| 195,889 |
| CONSUMER, NON-CYCLICAL - 20.6% |
|
|
|
Newmont Mining Corp. | 12,800 |
| 230,272 |
| ADT Corp. | 2,200 |
| 72,556 |
Olin Corp. | 3,000 |
| 51,780 |
| Aetna, Inc. | 3,000 |
| 324,360 |
PolyOne Corp. | 1,600 |
| 50,816 |
| Anthem, Inc. | 2,400 |
| 334,656 |
Sherwin-Williams Co. | 2,600 |
| 674,960 |
| Baxter International, Inc. | 28,600 |
| 1,091,090 |
COMMUNICATIONS - 2.7% |
|
|
|
| Becton Dickinson and Co. | 7,000 |
| 1,078,630 |
Comcast Corp. | 11,400 |
| 643,302 |
| Campbell Soup Co. | 6,800 |
| 357,340 |
EchoStar Corp.* | 1,800 |
| 70,398 |
| Cardinal Health, Inc. | 4,300 |
| 383,861 |
InterDigital, Inc. | 1,500 |
| 73,560 |
| Centene Corp.* | 1,400 |
| 92,134 |
John Wiley & Sons, Inc. | 7,100 |
| 319,713 |
| Coca-Cola Co. | 23,700 |
| 1,018,152 |
Scripps Networks Interactive | 1,600 |
| 88,336 |
| Colgate-Palmolive Co. | 14,900 |
| 992,638 |
Verizon Communications, Inc. | 22,100 |
| 1,021,462 |
| Community Health Systems* | 1,700 |
| 45,101 |
Viacom, Inc. | 7,600 |
| 312,816 |
| CR Bard, Inc. | 1,800 |
| 340,992 |
CONSUMER, CYCLICAL - 11.6% |
|
|
|
| Deluxe Corp. | 1,200 |
| 65,448 |
American Airlines Group, Inc. | 7,700 |
| 326,095 |
| DENTSPLY International, Inc. | 6,700 |
| 407,695 |
BorgWarner, Inc. | 7,900 |
| 341,517 |
| Express Scripts Holding Co.* | 4,100 |
| 358,381 |
Cabela’s, Inc.* | 1,700 |
| 79,441 |
| Flowers Foods, Inc. | 13,500 |
| 290,115 |
Cinemark Holdings, Inc. | 2,300 |
| 76,889 |
| Gilead Sciences, Inc. | 3,400 |
| 344,046 |
CST Brands, Inc. | 2,300 |
| 90,022 |
| Global Payments, Inc. | 5,800 |
| 374,158 |
Dana Holding Corp. | 4,700 |
| 64,860 |
| Hershey Co. | 10,100 |
| 901,627 |
Delta Air Lines, Inc. | 6,700 |
| 339,623 |
| Hormel Foods Corp. | 14,900 |
| 1,178,292 |
DSW, Inc. | 3,100 |
| 73,966 |
| Johnson & Johnson | 10,200 |
| 1,047,744 |
Ford Motor Co. | 24,100 |
| 339,569 |
| Kellogg Co. | 14,200 |
| 1,026,234 |
Gap, Inc. | 12,000 |
| 296,400 |
| Kimberly-Clark Corp. | 8,700 |
| 1,107,510 |
General Motors Co. | 10,600 |
| 360,506 |
| McCormick & Co., Inc. | 4,300 |
| 367,908 |
Genuine Parts Co. | 4,200 |
| 360,738 |
| McKesson Corp. | 1,800 |
| 355,014 |
GNC Holdings, Inc. | 1,900 |
| 58,938 |
| Medtronic PLC | 13,600 |
| 1,046,112 |
Harman International | 3,300 |
| 310,893 |
| PepsiCo., Inc. | 10,100 |
| 1,009,192 |
HNI Corp. | 1,600 |
| 57,696 |
| Pfizer, Inc. | 28,700 |
| 926,436 |
Home Depot, Inc. | 8,100 |
| 1,071,225 |
| Pilgrim’s Pride Corp. | 3,900 |
| 86,151 |
Kohl’s Corp. | 7,400 |
| 352,462 |
| Procter & Gamble Co. | 13,200 |
| 1,048,212 |
Mattel, Inc. | 17,000 |
| 461,890 |
| Sprouts Farmers Market* | 3,500 |
| 93,065 |
McDonald’s Corp. | 9,600 |
| 1,134,144 |
| Sysco Corp. | 24,300 |
| 996,300 |
NIKE, Inc. | 15,400 |
| 962,500 |
| United Rentals, Inc.* | 1,100 |
| 79,794 |
Nordstrom, Inc. | 4,700 |
| 234,107 |
| UnitedHealth Group, Inc. | 2,800 |
| 329,392 |
PACCAR, Inc. | 5,800 |
| 274,920 |
| DIVERSIFIED - 0.1% |
|
|
|
PVH Corp. | 3,300 |
| 243,045 |
| Leucadia National Corp. | 3,900 |
| 67,821 |
Southwest Airlines Co. | 7,800 |
| 335,868 |
| ENERGY - 0.6% |
|
|
|
Spirit Airlines, Inc.* | 1,400 |
| 55,790 |
| Atwood Oceanics, Inc. | 4,600 |
| 47,058 |
Thor Industries, Inc. | 1,500 |
| 84,225 |
| First Solar, Inc.* | 1,700 |
| 112,183 |
United Continental Holdings* | 5,800 |
| 332,340 |
|
|
|
|
|
See Notes to Financial Statements
22
ADVANCE CAPITAL I - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
Common Stock | Shares |
| Value |
| Common Stock | Shares |
| Value |
ENERGY - 0.6% (continued) |
|
|
|
| INDUSTRIAL - 9.7% (continued) |
|
|
|
Marathon Petroleum Corp. | 6,900 |
| $ 357,696 |
| Expeditors International | 6,400 |
| $ 288,640 |
PBF Energy, Inc. | 2,500 |
| 92,025 |
| FedEx Corp. | 2,100 |
| 312,879 |
FINANCIAL - 3.8% |
|
|
|
| Flowserve Corp. | 1,600 |
| 67,328 |
Affiliated Managers Group* | 2,000 |
| 319,520 |
| Genesee & Wyoming, Inc.* | 1,100 |
| 59,059 |
Ally Financial, Inc.* | 3,800 |
| 70,832 |
| Graco, Inc. | 4,500 |
| 324,315 |
Ameriprise Financial, Inc. | 700 |
| 74,494 |
| Graphic Packaging Holding Co. | 3,800 |
| 48,754 |
Arthur J Gallagher & Co. | 1,900 |
| 77,786 |
| Hubbell, Inc. | 3,600 |
| 363,744 |
Artisan Partners Asset Mgmt. | 2,100 |
| 75,726 |
| Huntington Ingalls | 600 |
| 76,110 |
Assured Guaranty Ltd | 3,000 |
| 79,290 |
| Illinois Tool Works, Inc. | 10,300 |
| 954,604 |
Berkshire Hathaway, Inc.* | 2,600 |
| 343,304 |
| Kirby Corp.* | 1,100 |
| 57,882 |
Brandywine Realty Trust | 6,300 |
| 86,058 |
| L-3 Communications Holdings | 2,900 |
| 346,579 |
CBL & Associates Properties | 5,600 |
| 69,272 |
| Lincoln Electric Holdings | 5,600 |
| 290,584 |
CBRE Group, Inc.* | 10,500 |
| 363,090 |
| MSA Safety, Inc. | 7,500 |
| 326,025 |
CIT Group, Inc. | 1,900 |
| 75,430 |
| Old Dominion Freight Line* | 1,100 |
| 64,977 |
CNA Financial Corp. | 9,700 |
| 340,955 |
| Orbital ATK, Inc. | 900 |
| 80,406 |
E*TRADE Financial Corp.* | 3,000 |
| 88,920 |
| Packaging Corp of America | 800 |
| 50,440 |
Forest City Realty Trust, Inc.* | 3,800 |
| 83,334 |
| Rockwell Automation, Inc. | 3,000 |
| 307,830 |
Genworth Financial, Inc.* | 15,900 |
| 59,307 |
| Ryder System, Inc. | 1,000 |
| 56,830 |
Jones Lang LaSalle, Inc. | 500 |
| 79,930 |
| Spirit AeroSystems Holdings* | 1,400 |
| 70,098 |
Lincoln National Corp. | 1,600 |
| 80,416 |
| Terex Corp. | 3,700 |
| 68,376 |
Loews Corp. | 9,400 |
| 360,960 |
| Textron, Inc. | 7,800 |
| 327,678 |
Navient Corp. | 6,800 |
| 77,860 |
| Trinity Industries, Inc. | 2,900 |
| 69,658 |
OneMain Holdings, Inc.* | 1,700 |
| 70,618 |
| Triumph Group, Inc. | 1,700 |
| 67,575 |
Raymond James Financial | 1,500 |
| 86,955 |
| Valmont Industries, Inc. | 700 |
| 74,214 |
Realogy Holdings Corp.* | 2,100 |
| 77,007 |
| Werner Enterprises, Inc. | 2,800 |
| 65,492 |
Santander Consumer USA* | 15,900 |
| 252,015 |
| TECHNOLOGY - 5.0% |
|
|
|
SLM Corp.* | 10,700 |
| 69,764 |
| Analog Devices, Inc. | 17,000 |
| 940,440 |
Starwood Property Trust | 3,700 |
| 76,072 |
| Apple, Inc. | 3,100 |
| 326,306 |
Stifel Financial Corp.* | 1,800 |
| 76,248 |
| Fair Isaac Corp. | 4,100 |
| 386,138 |
Voya Financial, Inc. | 2,000 |
| 73,820 |
| Hewlett Packard Enterprise | 12,700 |
| 193,040 |
WP Glimcher, Inc. | 6,600 |
| 70,026 |
| HP, Inc. | 12,700 |
| 150,368 |
INDUSTRIAL - 9.7% |
|
|
|
| Intel Corp. | 31,100 |
| 1,071,395 |
3M Co. | 6,000 |
| 903,840 |
| Lam Research Corp. | 5,200 |
| 412,984 |
Acuity Brands, Inc. | 1,700 |
| 397,460 |
| Micron Technology, Inc.* | 19,900 |
| 281,784 |
B/E Aerospace, Inc. | 1,600 |
| 67,792 |
| ON Semiconductor Corp.* | 8,000 |
| 78,400 |
Ball Corp. | 3,500 |
| 254,555 |
| Pitney Bowes, Inc. | 3,500 |
| 72,275 |
Belden, Inc. | 1,600 |
| 76,288 |
| Rackspace Hosting, Inc.* | 3,100 |
| 78,492 |
Boeing Co. | 2,300 |
| 332,557 |
| Science Applications | 1,900 |
| 86,982 |
CH Robinson Worldwide, Inc. | 4,500 |
| 279,090 |
| Western Digital Corp. | 4,200 |
| 252,210 |
CLARCOR, Inc. | 6,400 |
| 317,952 |
| Xilinx, Inc. | 8,100 |
| 380,457 |
Colfax Corp.* | 2,400 |
| 56,040 |
| UTILITIES - 0.3% |
|
|
|
CSX Corp. | 11,100 |
| 288,045 |
| UGI Corp. | 9,700 |
| 327,472 |
Cummins, Inc. | 2,800 |
| 246,428 |
| TOTAL COMMON STOCK - 57.3% |
|
|
|
Dover Corp. | 5,300 |
| 324,943 |
| (Cost $55,592,201) |
|
| $54,503,492 |
Emerson Electric Co. | 19,300 |
| 923,119 |
|
|
|
|
|
*Securities are non-income producing
See Notes to Financial Statements
23
ADVANCE CAPITAL I - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
|
|
| Principal |
|
|
Fixed Income Securities | Coupon | Maturity | Amount |
| Value |
COMMUNICATIONS - 1.8% |
|
|
|
|
|
AT&T, Inc. | 4.750 | 05/15/2046 | $ 1,000,000 | $ | 915,596 |
Verizon Communications, Inc. | 3.850 | 11/01/2042 | 1,000,000 |
| 817,385 |
CONSUMER, CYCLICAL - 1.4% |
|
|
|
|
|
AutoZone, Inc. | 4.000 | 11/15/2020 | 1,300,000 |
| 1,365,039 |
CONSUMER, NON-CYCLICAL - 9.0% |
|
|
|
|
|
Amgen, Inc. | 4.400 | 05/01/2045 | 1,000,000 |
| 926,522 |
Anthem, Inc. | 3.125 | 05/15/2022 | 1,000,000 |
| 981,431 |
Celgene Corp. | 3.250 | 08/15/2022 | 500,000 |
| 496,036 |
Clorox Co. | 3.050 | 09/15/2022 | 500,000 |
| 493,639 |
Edgewell Personal Care Co. | 4.700 | 05/19/2021 | 1,000,000 |
| 1,009,011 |
Express Scripts Holding Co. | 4.750 | 11/15/2021 | 1,000,000 |
| 1,072,260 |
Gilead Sciences, Inc. | 4.500 | 04/01/2021 | 1,000,000 |
| 1,081,939 |
Quest Diagnostics, Inc. | 4.700 | 04/01/2021 | 1,000,000 |
| 1,058,982 |
Teva Pharmaceutical Finance | 2.250 | 03/18/2020 | 1,500,000 |
| 1,451,499 |
ENERGY - 1.6% |
|
|
|
|
|
Chevron Corp. | 2.419 | 11/17/2020 | 500,000 |
| 497,188 |
Phillips 66 | 4.300 | 04/01/2022 | 1,000,000 |
| 1,028,797 |
FINANCIAL - 6.6% |
|
|
|
|
|
Bank of America Corp. | 5.875 | 01/05/2021 | 1,000,000 |
| 1,131,743 |
General Electric Capital Corp. | 3.100 | 01/09/2023 | 1,000,000 |
| 1,015,012 |
Goldman Sachs Group, Inc. | 5.250 | 07/27/2021 | 1,000,000 |
| 1,105,620 |
JPMorgan Chase & Co. | 3.250 | 09/23/2022 | 1,000,000 |
| 1,005,772 |
MetLife, Inc. | 3.600 | 04/10/2024 | 1,000,000 |
| 1,026,000 |
PNC Funding Corp. | 3.300 | 03/08/2022 | 1,000,000 |
| 1,023,827 |
GOVERNMENT - 3.1% |
|
|
|
|
|
Federal Home Loan Mortgage | 3.000 | 08/27/2027 | 1,000,000 |
| 977,952 |
Federal National Mortgage Assoc. | 2.350 | 04/28/2028 | 1,000,000 |
| 995,267 |
Federal National Mortgage Assoc. | 3.200 | 08/16/2032 | 1,000,000 |
| 959,786 |
INDUSTRIAL - 2.7% |
|
|
|
|
|
Burlington Northern Santa Fe | 3.450 | 09/15/2021 | 1,500,000 |
| 1,533,077 |
Fluor Corp. | 3.500 | 12/15/2024 | 1,000,000 |
| 999,170 |
MORTGAGE SECURITIES - 9.3% |
|
|
|
|
|
Fannie Mae Pool | 7.000 | 04/01/2033 | 168,207 |
| 201,073 |
Fannie Mae Pool | 6.000 | 10/01/2036 | 135,928 |
| 153,391 |
Fannie Mae Pool | 4.500 | 01/01/2042 | 785,384 |
| 848,992 |
Fannie Mae Pool | 4.000 | 07/01/2042 | 947,769 |
| 1,005,808 |
Fannie Mae Pool | 3.500 | 10/01/2042 | 730,227 |
| 754,760 |
Freddie Mac Gold Pool | 6.500 | 06/01/2024 | 97,451 |
| 110,983 |
Freddie Mac Gold Pool | 7.000 | 10/01/2031 | 220,637 |
| 251,851 |
Freddie Mac Gold Pool | 6.500 | 02/01/2032 | 242,749 |
| 276,457 |
Freddie Mac Gold Pool | 6.500 | 08/01/2032 | 98,597 |
| 112,288 |
Freddie Mac Gold Pool | 6.500 | 12/01/2032 | 207,837 |
| 241,547 |
Freddie Mac Gold Pool | 6.500 | 04/01/2033 | 90,490 |
| 103,540 |
Freddie Mac Gold Pool | 5.500 | 03/01/2034 | 222,694 |
| 247,865 |
See Notes to Financial Statements
24
ADVANCE CAPITAL I - BALANCED FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
Fixed Income Securities, Exchange Traded Funds |
|
| Shares/Principal |
|
and Short-Term Investments | Coupon | Maturity | Amount | Value |
MORTGAGE SECURITIES - 9.3% (continued) |
|
|
|
|
Freddie Mac Gold Pool | 5.500 | 06/01/2035 | $ 232,928 | $ 258,908 |
Freddie Mac Gold Pool | 5.000 | 07/01/2035 | 291,629 | 321,344 |
Freddie Mac Gold Pool | 5.000 | 09/01/2035 | 142,184 | 156,239 |
Freddie Mac Gold Pool | 5.500 | 11/01/2035 | 277,997 | 308,578 |
Freddie Mac Gold Pool | 6.000 | 02/01/2036 | 195,140 | 222,294 |
Freddie Mac Gold Pool | 5.000 | 01/01/2037 | 192,858 | 212,250 |
Freddie Mac Gold Pool | 5.500 | 05/01/2038 | 214,898 | 239,100 |
Freddie Mac Gold Pool | 5.500 | 01/01/2039 | 295,223 | 328,491 |
Freddie Mac Gold Pool | 6.000 | 09/01/2039 | 435,164 | 491,944 |
Freddie Mac Gold Pool | 4.000 | 10/01/2040 | 1,080,677 | 1,145,886 |
Freddie Mac Gold Pool | 3.500 | 09/01/2042 | 746,578 | 769,932 |
TECHNOLOGY - 1.0% |
|
|
|
|
Intel Corp. | 2.700 | 12/15/2022 | 1,000,000 | 989,329 |
UTILITIES - 1.1% |
|
|
|
|
Duke Energy Indiana LLC | 3.750 | 07/15/2020 | 1,000,000 | 1,052,767 |
|
|
|
|
|
TOTAL FIXED INCOME SECURITIES - 37.6% |
|
|
|
|
(Cost $35,484,411) |
|
|
| 35,774,167 |
|
|
|
|
|
EXCHANGE TRADED FUNDS |
|
|
|
|
Vanguard FTSE All-World ex-US ETF |
|
| 29,900 | 1,297,959 |
Vanguard FTSE Developed Markets ETF |
|
| 35,800 | 1,314,576 |
|
|
|
|
|
TOTAL EXCHANGE TRADED FUNDS - 2.8% |
|
|
|
|
(Cost $2,803,096) |
|
|
| 2,612,535 |
|
|
|
|
|
SHORT-TERM INVESTMENTS - 1.9% |
|
|
|
|
Federated Treasury Obligations Fund, 0.07% Yield+ (Cost $1,817,861) |
|
| 1,817,861 | 1,817,861 |
|
|
|
|
|
TOTAL INVESTMENTS IN SECURITIES - 99.6% |
|
|
|
|
(Cost $95,697,569) |
|
|
| 94,708,055 |
|
|
|
|
|
OTHER ASSETS LESS LIABILITIES - 0.4% |
|
|
| 355,573 |
|
|
|
|
|
TOTAL NET ASSETS - 100.0% |
|
|
| $95,063,628 |
+ Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2015.
See Notes to Financial Statements
25
ADVANCE CAPITAL I - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
|
|
| Principal |
|
Fixed Income Securities | Coupon | Maturity | Amount | Value |
COMMUNICATIONS - 9.0% |
|
|
|
|
Alibaba Group Holding Ltd | 3.125 | 11/28/2021 | $ 2,000,000 | $ 1,939,750 |
AT&T, Inc. | 4.750 | 05/15/2046 | 2,000,000 | 1,831,192 |
Cisco Systems, Inc. | 4.450 | 01/15/2020 | 2,000,000 | 2,176,116 |
IAC | 4.750 | 12/15/2022 | 2,500,000 | 2,087,500 |
Netflix, Inc. | 5.375 | 02/01/2021 | 2,300,000 | 2,415,000 |
Verizon Communications, Inc. | 3.850 | 11/01/2042 | 2,000,000 | 1,634,770 |
CONSUMER, CYCLICAL - 0.9% |
|
|
|
|
Lennar Corp. | 4.750 | 11/15/2022 | 1,250,000 | 1,239,375 |
CONSUMER, NON-CYCLICAL - 10.6% |
|
|
|
|
Amgen, Inc. | 4.400 | 05/01/2045 | 2,000,000 | 1,853,044 |
Anthem, Inc. | 3.125 | 05/15/2022 | 2,000,000 | 1,962,862 |
Celgene Corp. | 3.250 | 08/15/2022 | 2,000,000 | 1,984,144 |
Edgewell Personal Care Co. | 4.700 | 05/19/2021 | 2,000,000 | 2,018,022 |
Express Scripts Holding Co. | 4.750 | 11/15/2021 | 2,000,000 | 2,144,520 |
Gilead Sciences, Inc. | 4.500 | 04/01/2021 | 2,000,000 | 2,163,878 |
Quest Diagnostics, Inc. | 4.700 | 04/01/2021 | 2,000,000 | 2,117,964 |
ENERGY - 3.8% |
|
|
|
|
Chevron Corp. | 2.419 | 11/17/2020 | 1,000,000 | 994,375 |
Marathon Petroleum Corp. | 5.125 | 03/01/2021 | 2,000,000 | 2,099,170 |
Phillips 66 | 4.300 | 04/01/2022 | 2,000,000 | 2,057,594 |
FINANCIAL - 17.5% |
|
|
|
|
Bank of America Corp. | 4.000 | 04/01/2024 | 2,000,000 | 2,045,430 |
BlackRock, Inc. | 3.375 | 06/01/2022 | 2,000,000 | 2,068,998 |
Citigroup, Inc. | 5.500 | 09/13/2025 | 1,500,000 | 1,628,241 |
Fairfax Financial Holdings Ltd^ | 5.800 | 05/15/2021 | 1,500,000 | 1,588,158 |
General Electric Capital Corp. | 3.100 | 01/09/2023 | 2,000,000 | 2,030,024 |
Goldman Sachs Group, Inc. | 3.850 | 07/08/2024 | 2,000,000 | 2,040,920 |
Icahn Enterprises LP | 6.000 | 08/01/2020 | 1,000,000 | 1,008,400 |
JPMorgan Chase & Co. | 3.250 | 09/23/2022 | 2,000,000 | 2,011,544 |
MetLife, Inc. | 3.600 | 04/10/2024 | 2,000,000 | 2,052,000 |
Morgan Stanley | 3.875 | 04/29/2024 | 1,500,000 | 1,529,069 |
Old Republic International Corp. | 4.875 | 10/01/2024 | 2,000,000 | 2,049,530 |
PNC Funding Corp. | 3.300 | 03/08/2022 | 2,000,000 | 2,047,654 |
Visa, Inc. | 2.800 | 12/14/2022 | 1,500,000 | 1,506,200 |
GOVERNMENT - 19.2% |
|
|
|
|
Federal Farm Credit Banks | 3.200 | 04/24/2030 | 2,484,000 | 2,371,331 |
Federal Home Loan Mortgage | 1.375 | 05/01/2020 | 3,000,000 | 2,953,713 |
Federal Home Loan Mortgage | 3.000 | 08/27/2027 | 2,000,000 | 1,926,178 |
Federal National Mortgage Assoc. | 1.625 | 08/28/2019 | 3,000,000 | 2,994,834 |
Federal National Mortgage Assoc. | 2.375 | 04/25/2028 | 3,000,000 | 3,000,048 |
Federal National Mortgage Assoc. | 2.350 | 04/28/2028 | 1,750,000 | 1,741,717 |
See Notes to Financial Statements
26
ADVANCE CAPITAL I - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
|
|
| Principal |
|
Fixed Income Securities | Coupon | Maturity | Amount | Value |
GOVERNMENT - 19.2% (continued) |
|
|
|
|
Federal National Mortgage Assoc. | 3.200 | 08/16/2032 | $ 2,000,000 | $ 1,919,572 |
Federal National Mortgage Assoc. | 3.000 | 12/27/2032 | 1,000,000 | 930,833 |
Federal National Mortgage Assoc. | 2.500 | 01/24/2033 | 2,145,000 | 2,115,890 |
Province of Quebec Canada | 2.625 | 02/13/2023 | 3,000,000 | 2,974,068 |
United States Treasury Note | 2.000 | 08/15/2025 | 3,000,000 | 2,925,117 |
INDUSTRIAL - 6.3% |
|
|
|
|
Clean Harbors, Inc. | 5.125 | 06/01/2021 | 2,500,000 | 2,531,250 |
Fluor Corp. | 3.500 | 12/15/2024 | 2,000,000 | 1,998,340 |
Reynolds Group Issuer, Inc. | 5.750 | 10/15/2020 | 2,500,000 | 2,542,975 |
United Parcel Service, Inc. | 2.450 | 10/01/2022 | 1,500,000 | 1,483,752 |
MORTGAGE SECURITIES - 24.1% |
|
|
|
|
Fannie Mae Pool | 7.000 | 02/01/2032 | 297,583 | 348,494 |
Fannie Mae Pool | 7.000 | 03/01/2032 | 323,685 | 376,547 |
Fannie Mae Pool | 7.000 | 04/01/2033 | 263,093 | 314,498 |
Fannie Mae Pool | 6.000 | 10/01/2036 | 368,617 | 415,973 |
Fannie Mae Pool | 6.000 | 07/01/2037 | 566,367 | 639,802 |
Fannie Mae Pool | 4.000 | 08/01/2041 | 1,830,740 | 1,941,802 |
Fannie Mae Pool | 4.000 | 11/01/2041 | 2,131,793 | 2,261,396 |
Fannie Mae Pool | 4.500 | 01/01/2042 | 1,178,075 | 1,273,488 |
Fannie Mae Pool | 4.000 | 07/01/2042 | 1,569,716 | 1,664,583 |
Fannie Mae Pool | 4.000 | 07/01/2042 | 1,203,517 | 1,277,216 |
Fannie Mae Pool | 3.500 | 10/01/2042 | 1,460,454 | 1,509,520 |
Freddie Mac Gold Pool | 6.500 | 06/01/2024 | 227,387 | 258,961 |
Freddie Mac Gold Pool | 7.000 | 10/01/2031 | 376,535 | 429,805 |
Freddie Mac Gold Pool | 6.500 | 02/01/2032 | 388,779 | 442,764 |
Freddie Mac Gold Pool | 7.000 | 05/01/2032 | 545,772 | 640,411 |
Freddie Mac Gold Pool | 6.500 | 08/01/2032 | 131,462 | 149,717 |
Freddie Mac Gold Pool | 6.500 | 04/01/2033 | 271,469 | 310,620 |
Freddie Mac Gold Pool | 7.000 | 09/01/2033 | 102,868 | 116,107 |
Freddie Mac Gold Pool | 5.500 | 03/01/2034 | 668,081 | 743,596 |
Freddie Mac Gold Pool | 5.500 | 04/01/2034 | 893,259 | 992,656 |
Freddie Mac Gold Pool | 5.000 | 06/01/2034 | 300,574 | 331,106 |
Freddie Mac Gold Pool | 5.500 | 12/01/2034 | 745,644 | 830,443 |
Freddie Mac Gold Pool | 5.500 | 01/01/2035 | 562,968 | 626,610 |
Freddie Mac Gold Pool | 5.500 | 06/01/2035 | 925,890 | 1,029,158 |
Freddie Mac Gold Pool | 5.000 | 07/01/2035 | 867,597 | 955,999 |
Freddie Mac Gold Pool | 5.000 | 08/01/2035 | 955,226 | 1,056,911 |
Freddie Mac Gold Pool | 5.000 | 09/01/2035 | 568,736 | 624,958 |
Freddie Mac Gold Pool | 5.500 | 11/01/2035 | 833,992 | 925,734 |
Freddie Mac Gold Pool | 5.000 | 11/01/2035 | 297,181 | 325,983 |
Freddie Mac Gold Pool | 6.000 | 02/01/2036 | 536,636 | 611,308 |
See Notes to Financial Statements
27
ADVANCE CAPITAL I - RETIREMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
Fixed Income Securities |
|
| Shares/Principal |
|
|
| |||
and Short-Term Investments | Coupon | Maturity |
| Amount |
| Value | |||
MORTGAGE SECURITIES - 24.1% (continued) |
|
|
|
|
|
|
| ||
Freddie Mac Gold Pool | 5.000 | 01/01/2037 | $ | 578,575 | $ | 636,751 |
| ||
Freddie Mac Gold Pool | 5.500 | 12/01/2037 |
| 211,054 |
| 235,335 |
| ||
Freddie Mac Gold Pool | 5.500 | 05/01/2038 |
| 775,459 |
| 862,794 |
| ||
Freddie Mac Gold Pool | 5.500 | 05/01/2038 |
| 655,885 |
| 729,753 |
| ||
Freddie Mac Gold Pool | 6.500 | 10/01/2038 |
| 471,956 |
| 563,254 |
| ||
Freddie Mac Gold Pool | 5.500 | 01/01/2039 |
| 885,669 |
| 985,474 |
| ||
Freddie Mac Gold Pool | 6.000 | 09/01/2039 |
| 889,029 |
| 1,005,029 |
| ||
Freddie Mac Gold Pool | 4.000 | 12/01/2040 |
| 1,686,122 |
| 1,792,120 |
| ||
Freddie Mac Gold Pool | 3.500 | 09/01/2042 |
| 2,239,733 |
| 2,309,797 |
| ||
TECHNOLOGY - 1.4% |
|
|
|
|
|
|
| ||
Apple, Inc. | 2.400 | 05/03/2023 |
| 1,000,000 |
| 974,366 |
| ||
Brocade Communications Systems | 4.625 | 01/15/2023 |
| 1,000,000 |
| 950,000 |
| ||
UTILITIES - 3.0% |
|
|
|
|
|
|
| ||
Commonwealth Edison Co. | 3.400 | 09/01/2021 |
| 2,000,000 |
| 2,075,991 |
| ||
Progress Energy, Inc. | 3.150 | 04/01/2022 |
| 2,000,000 |
| 1,962,834 |
| ||
TOTAL FIXED INCOME SECURITIES - 95.8% |
|
|
|
|
|
|
| ||
(Cost $128,609,674) |
|
|
|
|
| 129,244,726 |
| ||
SHORT-TERM INVESTMENTS - 3.6% |
|
|
|
|
|
|
| ||
Federated Treasury Obligations Fund, 0.07% Yield+ |
|
|
|
|
|
|
| ||
(Cost $4,765,982) |
|
|
| 4,765,982 |
| 4,765,982 |
| ||
TOTAL INVESTMENTS IN SECURITIES - 99.4% |
|
|
|
|
|
|
| ||
(Cost $133,375,656) |
|
|
|
|
| 134,010,708 |
| ||
OTHER ASSETS LESS LIABILITIES - 0.6% |
|
|
|
|
| 843,264 |
| ||
TOTAL NET ASSETS - 100.0% |
|
|
|
| $ | 134,853,972 |
| ||
|
|
|
|
|
|
|
|
^ Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid and may be resold in transactions exempt from registration. At December 31, 2015, the aggregate market value of these securities amounted to $1,588,158 or
1.18% of net assets.
+Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2015.
See Notes to Financial Statements
28
ADVANCE CAPITAL I - CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
Common Stock | Shares |
| Value |
| Common Stock | Shares |
| Value |
BASIC MATERIALS - 2.6% |
|
|
|
| CONSUMER, NON-CYCLICAL - 40.5% (continued) |
|
|
|
CF Industries Holdings, Inc. | 500 |
| $ 20,405 |
| Hershey Co. | 1,900 |
| $ 169,613 |
Eastman Chemical Co. | 300 |
| 20,253 |
| Hormel Foods Corp. | 2,800 |
| 221,424 |
Ecolab, Inc. | 600 |
| 68,628 |
| Jarden Corp.* | 1,400 |
| 79,968 |
International Paper Co. | 600 |
| 22,620 |
| Johnson & Johnson | 2,100 |
| 215,712 |
Mosaic Co. | 700 |
| 19,313 |
| Kellogg Co. | 2,600 |
| 187,902 |
Sherwin-Williams Co. | 300 |
| 77,880 |
| Kimberly-Clark Corp. | 1,600 |
| 203,680 |
COMMUNICATIONS - 4.8% |
|
|
|
| McKesson Corp. | 400 |
| 78,892 |
Comcast Corp. | 1,200 |
| 67,716 |
| Medtronic PLC | 2,800 |
| 215,376 |
eBay, Inc.* | 3,000 |
| 82,440 |
| PepsiCo., Inc. | 1,800 |
| 179,856 |
Verizon Communications, Inc. | 4,600 |
| 212,612 |
| Pfizer, Inc. | 6,100 |
| 196,908 |
Viacom, Inc. | 1,500 |
| 61,740 |
| Procter & Gamble Co. | 2,400 |
| 190,584 |
CONSUMER, CYCLICAL - 20.2% |
|
|
|
| Sysco Corp. | 4,400 |
| 180,400 |
American Airlines Group, Inc. | 1,800 |
| 76,230 |
| UnitedHealth Group, Inc. | 600 |
| 70,584 |
BorgWarner, Inc. | 1,600 |
| 69,168 |
| ENERGY - 0.9% |
|
|
|
CVS Health Corp. | 600 |
| 58,662 |
| Valero Energy Corp. | 1,100 |
| 77,781 |
Delta Air Lines, Inc. | 1,600 |
| 81,104 |
| FINANCIAL - 5.4% |
|
|
|
Dollar General Corp. | 1,100 |
| 79,057 |
| Affiliated Managers Group* | 400 |
| 63,904 |
Gap, Inc. | 2,500 |
| 61,750 |
| Berkshire Hathaway, Inc.* | 500 |
| 66,020 |
General Motors Co. | 2,200 |
| 74,822 |
| CBRE Group, Inc.* | 2,200 |
| 76,076 |
Harman International | 700 |
| 65,947 |
| CNA Financial Corp. | 2,100 |
| 73,815 |
Home Depot, Inc. | 1,700 |
| 224,825 |
| Santander Consumer USA* | 3,500 |
| 55,475 |
Kohl’s Corp. | 1,000 |
| 47,630 |
| Synchrony Financial* | 2,200 |
| 66,902 |
McDonald’s Corp. | 1,900 |
| 224,466 |
| Unum Group | 2,200 |
| 73,238 |
NIKE, Inc. | 3,200 |
| 200,000 |
| INDUSTRIAL - 9.1% |
|
|
|
PACCAR, Inc. | 1,300 |
| 61,620 |
| 3M Co. | 1,400 |
| 210,896 |
PVH Corp. | 700 |
| 51,555 |
| Ball Corp. | 400 |
| 29,092 |
Southwest Airlines Co. | 1,900 |
| 81,814 |
| Boeing Co. | 500 |
| 72,295 |
United Continental Holdings* | 1,400 |
| 80,220 |
| General Dynamics Corp. | 500 |
| 68,680 |
VF Corp. | 2,800 |
| 174,300 |
| Illinois Tool Works, Inc. | 2,300 |
| 213,164 |
Whirlpool Corp. | 500 |
| 73,435 |
| L-3 Communications Holdings | 600 |
| 71,706 |
CONSUMER, NON-CYCLICAL - 40.5% |
|
|
|
| Spirit AeroSystems Holdings* | 1,400 |
| 70,098 |
Aetna, Inc. | 700 |
| 75,684 |
| Textron, Inc. | 1,800 |
| 75,618 |
Anthem, Inc. | 500 |
| 69,720 |
| TECHNOLOGY - 8.0% |
|
|
|
Baxter International, Inc. | 6,100 |
| 232,715 |
| Analog Devices, Inc. | 3,500 |
| 193,620 |
Becton Dickinson and Co. | 1,500 |
| 231,135 |
| Apple, Inc. | 700 |
| 73,682 |
Cardinal Health, Inc. | 900 |
| 80,343 |
| Hewlett Packard Enterprise | 2,600 |
| 39,520 |
Coca-Cola Co. | 4,300 |
| 184,728 |
|
|
|
|
|
Colgate-Palmolive Co. | 2,800 |
| 186,536 |
|
|
|
|
|
Express Scripts Holding Co.* | 900 |
| 78,669 |
|
|
|
|
|
General Mills, Inc. | 3,200 |
| 184,512 |
|
|
|
|
|
Gilead Sciences, Inc. | 700 |
| 70,833 |
|
|
|
|
|
See Notes to Financial Statements
29
ADVANCE CAPITAL I - CORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2015
|
|
|
|
| Common Stock, Exchange Traded Funds |
|
|
|
Common Stock | Shares |
| Value |
| and Short-Term Investments | Shares |
| Value |
TECHNOLOGY - 8.0% (continued) |
|
|
|
| EXCHANGE TRADED FUNDS |
|
|
|
HP, Inc. | 2,600 |
| $ 30,784 |
| S&P500 ETF | 2,000 |
| $ 407,740 |
Intel Corp. | 6,200 |
| 213,590 |
| TOTAL EXCHANGE TRADED FUNDS - 4.6% |
|
|
|
Lam Research Corp. | 1,100 |
| 87,362 |
| (Cost $397,859) |
|
| 407,740 |
Oracle Corp. | 1,900 |
| 69,407 |
| SHORT-TERM INVESTMENTS - 2.9% |
|
|
|
UTILITIES - 0.8% |
|
|
|
| Federated Treasury Obligations Fund, 0.07% Yield+ |
|
| |
Exelon Corp. | 2,400 |
| 66,648 |
| (Cost $255,511) | 255,511 |
| 255,511 |
TOTAL COMMON STOCK - 92.3% |
|
|
|
| TOTAL INVESTMENTS IN SECURITIES - 99.8% |
|
| |
(Cost $8,038,902) |
|
| 8,165,359 |
| (Cost $8,692,272) |
|
| 8,828,610 |
|
|
|
|
| OTHER ASSETS LESS LIABILITIES - 0.2% |
|
| 17,725 |
|
|
|
|
| TOTAL NET ASSETS - 100.0% |
|
| $ 8,846,335 |
*Securities are non-income producing
+Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2015.
See Notes to Financial Statements
30
ADVANCE CAPITAL I, INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2015
|
| EQUITY |
|
|
| BALANCED |
|
|
| RETIREMENT |
|
|
| CORE |
| ||||
|
| GROWTH FUND |
|
|
| FUND |
|
| INCOME FUND |
|
| EQUITY FUND |
| ||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in securities at value | $ | 47,341,346 | $ | 94,708,055 |
| $ | 134,010,708 |
| $ | 8,828,610 |
|
| |||||||
(Cost $49,172,243; $95,697,569; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$133,375,656; $8,692,272, respectively) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
| 0 |
|
|
| 201 |
|
|
|
| 0 |
|
|
|
| 0 |
|
|
Receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital shares receivable |
|
| 5,633 |
|
|
| 10,000 |
|
|
|
| 11,706 |
|
|
|
| 5,000 |
|
|
Dividends and interest |
|
| 53,779 |
|
|
| 370,211 |
|
|
|
| 974,396 |
|
|
|
| 14,061 |
|
|
Prepaid expenses |
|
| 5,013 |
|
|
| 8,385 |
|
|
|
| 10,379 |
|
|
|
| 3,617 |
|
|
Total assets |
|
| 47,405,771 |
|
|
| 95,096,852 |
|
|
|
| 135,007,189 |
|
|
|
| 8,851,288 |
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital shares payable |
|
| 0 |
|
|
| 2,176 |
|
|
|
| 106,560 |
|
|
|
| 23 |
|
|
Distributions payable |
|
| 18,147 |
|
|
| 2,927 |
|
|
|
| 7,335 |
|
|
|
| 1,849 |
|
|
Accounts payable and accrued expenses |
|
| 14,273 |
|
|
| 28,121 |
|
|
|
| 39,322 |
|
|
|
| 3,081 |
|
|
Total liabilities |
|
| 32,420 |
|
|
| 33,224 |
|
|
|
| 153,217 |
|
|
|
| 4,953 |
|
|
Net assets | $ | 47,373,351 | $ | 95,063,628 |
| $ | 134,853,972 |
| $ | 8,846,335 |
|
| |||||||
NET ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Retail shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets |
|
| 46,002,663 |
|
|
| 94,145,256 |
|
|
|
| 134,361,926 |
|
|
|
| 8,699,566 |
|
|
Number of shares outstanding |
|
| 2,376,523 |
|
|
| 5,222,566 |
|
|
|
| 15,654,849 |
|
|
|
| 808,191 |
|
|
Net asset value | $ | 19.36 | $ | 18.03 |
| $ | 8.58 |
| $ | 10.76 |
|
| |||||||
Institutional shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net assets |
|
| 1,370,688 |
|
|
| 918,372 |
|
|
|
| 492,046 |
|
|
|
| 146,769 |
|
|
Number of shares outstanding |
|
| 69,209 |
|
|
| 51,035 |
|
|
|
| 57,365 |
|
|
|
| 13,263 |
|
|
Net asset value | $ | 19.81 | $ | 17.99 |
| $ | 8.58 |
| $ | 11.07 |
|
| |||||||
Net assets consist of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Paid-in capital |
|
| 50,247,190 |
|
|
| 99,473,934 |
|
|
|
| 189,334,043 |
|
|
|
| 8,762,584 |
|
|
Accumulated undistributed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net investment income |
|
| 10,492 |
|
|
| 0 |
|
|
|
| 0 |
|
|
|
| 0 |
|
|
Accumulated undistributed net realized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
loss on investments |
|
| (1,053,434) |
|
|
| (3,420,792) |
|
|
|
| (55,115,123) |
|
|
|
| (52,587) |
|
|
Net unrealized gain/(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in value of investments |
|
| (1,830,897) |
|
|
| (989,514) |
|
|
|
| 635,052 |
|
|
|
| 136,338 |
|
|
Net assets | $ | 47,373,351 | $ | 95,063,628 |
| $ | 134,853,972 |
| $ | 8,846,335 |
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements
31
ADVANCE CAPITAL I, INC.
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2015
|
|
| EQUITY |
|
| BALANCED |
|
| RETIREMENT |
|
| CORE |
|
INVESTMENT INCOME |
|
| GROWTH FUND |
|
| FUND |
|
| INCOME FUND |
|
| EQUITY FUND |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Interest | $ | 229 | $ | 1,701,989 | $ | 5,874,178 | $ | 49 |
| ||||
Dividends |
|
| 1,233,539 |
|
| 1,716,248 |
|
| 0 |
|
| 283,077 |
|
Total investment income |
|
| 1,233,768 |
|
| 3,418,237 |
|
| 5,874,178 |
|
| 283,126 |
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory fees |
|
| 442,615 |
|
| 915,582 |
|
| 850,700 |
|
| 98,763 |
|
Distribution fees - Retail Class |
|
| 154,645 |
|
| 325,072 |
|
| 423,842 |
|
| 30,487 |
|
Transfer agent and shareholder reporting costs |
|
| 77,537 |
|
| 139,951 |
|
| 181,773 |
|
| 32,415 |
|
Custodian fees |
|
| 10,794 |
|
| 16,758 |
|
| 10,124 |
|
| 8,764 |
|
Directors fees and expenses |
|
| 17,484 |
|
| 35,862 |
|
| 45,985 |
|
| 3,411 |
|
Professional fees |
|
| 16,571 |
|
| 33,244 |
|
| 46,722 |
|
| 2,961 |
|
Registration and filing fees |
|
| 8,622 |
|
| 10,391 |
|
| 11,216 |
|
| 6,698 |
|
Other operating expenses |
|
| 3,902 |
|
| 7,831 |
|
| 9,794 |
|
| 752 |
|
Total expenses |
|
| 732,170 |
|
| 1,484,691 |
|
| 1,580,156 |
|
| 184,251 |
|
Less: Waiver from adviser |
|
| 0 |
|
| 0 |
|
| (420) |
|
| (20,555) |
|
Net expenses |
|
| 732,170 |
|
| 1,484,691 |
|
| 1,579,736 |
|
| 163,696 |
|
NET INVESTMENT INCOME |
|
| 501,598 |
|
| 1,933,546 |
|
| 4,294,442 |
|
| 119,430 |
|
NET REALIZED AND UNREALIZED |
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS ON INVESTMENTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized loss on investments |
|
| (1,053,434) |
|
| (3,265,959) |
|
| (1,184,807) |
|
| (52,587) |
|
Net change in unrealized |
|
|
|
|
|
|
|
|
|
|
|
|
|
loss on investments |
|
| (3,194,198) |
|
| (3,699,596) |
|
| (2,799,529) |
|
| (476,318) |
|
NET LOSS ON INVESTMENTS |
|
| (4,247,632) |
|
| (6,965,555) |
|
| (3,984,336) |
|
| (528,905) |
|
NET INCREASE (DECREASE) IN NET ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
RESULTING FROM OPERATIONS | $ | (3,746,034) | $ | (5,032,009) | $ | 310,106 | $ | (409,475) |
|
See Notes to Financial Statements
32
ADVANCE CAPITAL I, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 2015 AND 2014
|
|
|
| EQUITY GROWTH FUND |
|
|
| BALANCED FUND |
| ||||||||||
|
|
|
| 2015 |
|
|
|
| 2014 |
|
|
| 2015 |
|
|
| 2014 |
|
|
DECREASE IN NET ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income | $ | 501,598 |
| $ | 310,637 | $ | 1,933,546 | $ | 2,047,446 |
|
| ||||||||
Net realized gain (loss) on investments |
|
|
| (1,053,434) |
|
|
|
| 17,129,399 |
|
|
| (3,265,959) |
|
|
| 26,243,260 |
|
|
Net change in unrealized loss on investments |
|
|
| (3,194,198) |
|
|
|
| (11,531,816) |
|
|
| (3,699,596) |
|
|
| (17,226,199) |
|
|
Net increase (decrease) in net assets resulting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations |
|
|
| (3,746,034) |
|
|
|
| 5,908,220 |
|
|
| (5,032,009) |
|
|
| 11,064,507 |
|
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail shares |
|
|
| (477,068) |
|
|
|
| (385,122) |
|
|
| (2,077,427) |
|
|
| (2,265,976) |
|
|
Institutional shares |
|
|
| (14,038) |
|
|
|
| (339) |
|
|
| (14,075) |
|
|
| (6,470) |
|
|
Net realized gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail shares |
|
|
| (135,118) |
|
|
|
| (17,022,285) |
|
|
| (115,333) |
|
|
| (13,043,605) |
|
|
Institutional shares |
|
|
| (3,985) |
|
|
|
| (14,968) |
|
|
| (1,127) |
|
|
| (44,345) |
|
|
Total distributions to shareholders |
|
|
| (630,209) |
|
|
|
| (17,422,714) |
|
|
| (2,207,962) |
|
|
| (15,360,396) |
|
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from sale of shares |
|
|
| 1,824,463 |
|
|
|
| 2,998,852 |
|
|
| 10,337,198 |
|
|
| 13,023,443 |
|
|
Reinvestment of distributions |
|
|
| 607,468 |
|
|
|
| 17,343,587 |
|
|
| 2,136,346 |
|
|
| 15,079,796 |
|
|
Cost of shares reacquired |
|
|
| (28,411,010) |
|
|
|
| (23,507,938) |
|
|
| (68,864,399) |
|
|
| (36,862,584) |
|
|
Net change |
|
|
| (25,979,079) |
|
|
|
| (3,165,499) |
|
|
| (56,390,855) |
|
|
| (8,759,345) |
|
|
Institutional shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from sale of shares |
|
|
| 1,450,191 |
|
|
|
| 16,315 |
|
|
| 962,965 |
|
|
| 626,931 |
|
|
Reinvestment of distributions |
|
|
| 163 |
|
|
|
| 15,307 |
|
|
| 15,193 |
|
|
| 50,810 |
|
|
Cost of shares reacquired |
|
|
| (102,783) |
|
|
|
| (1,456,729) |
|
|
| (553,957) |
|
|
| (332,174) |
|
|
Net change |
|
|
| 1,347,571 |
|
|
|
| (1,425,107) |
|
|
| 424,201 |
|
|
| 345,567 |
|
|
Net decrease derived from share transactions |
|
|
| (24,631,508) |
|
|
|
| (4,590,606) |
|
|
| (55,966,654) |
|
|
| (8,413,778) |
|
|
NET ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year |
|
|
| 76,381,102 |
|
|
|
| 92,486,202 |
|
|
| 158,270,253 |
|
|
| 170,979,920 |
|
|
End of year | $ | 47,373,351 |
| $ | 76,381,102 | $ | 95,063,628 | $ | 158,270,253 |
|
| ||||||||
ACCUMULATED UNDISTRIBUTED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
NET INVESTMENT INCOME | $ | 10,492 |
| $ | 0 | $ | 0 | $ | 0 |
|
| ||||||||
NUMBER OF SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Retail shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold |
|
|
| 88,577 |
|
|
|
| 113,365 |
|
|
| 548,933 |
|
|
| 637,586 |
|
|
Shares issued from reinvestment of distributions |
|
|
| 31,247 |
|
|
|
| 828,647 |
|
|
| 114,983 |
|
|
| 783,427 |
|
|
Reacquired |
|
|
| (1,389,454) |
|
|
|
| (891,029) |
|
|
| (3,710,114) |
|
|
| (1,804,790) |
|
|
Net change |
|
|
| (1,269,630) |
|
|
|
| 50,983 |
|
|
| (3,046,198) |
|
|
| (383,777) |
|
|
Institutional shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold |
|
|
| 70,763 |
|
|
|
| 611 |
|
|
| 51,367 |
|
|
| 31,156 |
|
|
Shares issued from reinvestment of distributions |
|
|
| 8 |
|
|
|
| 717 |
|
|
| 822 |
|
|
| 2,648 |
|
|
Reacquired |
|
|
| (4,757) |
|
|
|
| (56,150) |
|
|
| (29,307) |
|
|
| (16,582) |
|
|
Net change |
|
|
| 66,014 |
|
|
|
| (54,822) |
|
|
| 22,882 |
|
|
| 17,222 |
|
|
Net decrease in shares outstanding |
|
|
| (1,203,616) |
|
|
|
| (3,839) |
|
|
| (3,023,316) |
|
|
| (366,555) |
|
|
Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year |
|
|
| 3,649,348 |
|
|
|
| 3,653,187 |
|
|
| 8,296,917 |
|
|
| 8,663,472 |
|
|
End of year |
|
|
| 2,445,732 |
|
|
|
| 3,649,348 |
|
|
| 5,273,601 |
|
|
| 8,296,917 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements
33
ADVANCE CAPITAL I, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 2015 AND 2014
|
|
|
| RETIREMENT INCOME FUND |
|
|
| CORE EQUITY FUND |
| ||||||||||
|
|
|
| 2015 |
|
|
|
| 2014 |
|
|
| 2015 |
|
|
| 2014 |
|
|
INCREASE (DECREASE) IN NET ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income | $ | 4,294,442 |
| $ | 5,377,886 | $ | 119,430 | $ | 58,536 |
|
| ||||||||
Net realized gain (loss) on investments |
|
|
| (1,184,807) |
|
|
|
| 2,756,188 |
|
|
| (52,587) |
|
|
| 3,247,537 |
|
|
Net change in unrealized gain (loss) on investments |
|
|
| (2,799,529) |
|
|
|
| 3,758,880 |
|
|
| (476,318) |
|
|
| (1,733,051) |
|
|
Net increase (decrease) in net assets resulting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from operations |
|
|
| 310,106 |
|
|
|
| 11,892,954 |
|
|
| (409,475) |
|
|
| 1,573,022 |
|
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail shares |
|
|
| (4,862,050) |
|
|
|
| (6,175,444) |
|
|
| (117,476) |
|
|
| (57,841) |
|
|
Institutional shares |
|
|
| (19,032) |
|
|
|
| (17,886) |
|
|
| (1,954) |
|
|
| (695) |
|
|
Net realized gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail shares |
|
|
| 0 |
|
|
|
| 0 |
|
|
| 0 |
|
|
| (3,199,814) |
|
|
Institutional shares |
|
|
| 0 |
|
|
|
| 0 |
|
|
| 0 |
|
|
| (38,439) |
|
|
Total distributions to shareholders |
|
|
| (4,881,082) |
|
|
|
| (6,193,330) |
|
|
| (119,430) |
|
|
| (3,296,789) |
|
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from sale of shares |
|
|
| 14,230,510 |
|
|
|
| 13,440,584 |
|
|
| 837,401 |
|
|
| 3,077,108 |
|
|
Reinvestment of distributions |
|
|
| 4,761,523 |
|
|
|
| 6,029,319 |
|
|
| 117,477 |
|
|
| 3,240,204 |
|
|
Cost of shares reacquired |
|
|
| (75,500,243) |
|
|
|
| (39,537,295) |
|
|
| (7,123,539) |
|
|
| (3,680,144) |
|
|
Net change |
|
|
| (56,508,210) |
|
|
|
| (20,067,392) |
|
|
| (6,168,661) |
|
|
| 2,637,168 |
|
|
Institutional shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from sale of shares |
|
|
| 6,347 |
|
|
|
| 1,423,812 |
|
|
| 5,331 |
|
|
| 6,320 |
|
|
Reinvestment of distributions |
|
|
| 118 |
|
|
|
| 0 |
|
|
| 105 |
|
|
| 1,406 |
|
|
Cost of shares reacquired |
|
|
| (1,443,205) |
|
|
|
| 0 |
|
|
| (3,764) |
|
|
| (381,283) |
|
|
Net change |
|
|
| (1,436,740) |
|
|
|
| 1,423,812 |
|
|
| 1,672 |
|
|
| (373,557) |
|
|
Net increase (decrease) derived from share transactions |
|
|
| (57,944,950) |
|
|
|
| (18,643,580) |
|
|
| (6,166,989) |
|
|
| 2,263,611 |
|
|
NET ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year |
|
|
| 197,369,898 |
|
|
|
| 210,313,854 |
|
|
| 15,542,229 |
|
|
| 15,002,385 |
|
|
End of year | $ | 134,853,972 |
| $ | 197,369,898 | $ | 8,846,335 | $ | 15,542,229 |
|
| ||||||||
ACCUMULATED UNDISTRIBUTED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
NET INVESTMENT INCOME | $ | 0 |
| $ | 0 | $ | 0 | $ | 0 |
|
| ||||||||
NUMBER OF SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Retail shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold |
|
|
| 1,620,907 |
|
|
|
| 1,524,071 |
|
|
| 75,267 |
|
|
| 229,411 |
|
|
Shares issued from reinvestment of distributions |
|
|
| 541,276 |
|
|
|
| 683,493 |
|
|
| 10,918 |
|
|
| 288,788 |
|
|
Reacquired |
|
|
| (8,609,600) |
|
|
|
| (4,483,906) |
|
|
| (649,443) |
|
|
| (272,850) |
|
|
Net change |
|
|
| (6,447,417) |
|
|
|
| (2,276,342) |
|
|
| (563,258) |
|
|
| 245,349 |
|
|
Institutional shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sold |
|
|
| 720 |
|
|
|
| 161,613 |
|
|
| 464 |
|
|
| 470 |
|
|
Shares issued from reinvestment of distributions |
|
|
| 13 |
|
|
|
| 0 |
|
|
| 9 |
|
|
| 123 |
|
|
Reacquired |
|
|
| (161,613) |
|
|
|
| 0 |
|
|
| (339) |
|
|
| (26,663) |
|
|
Net change |
|
|
| (160,880) |
|
|
|
| 161,613 |
|
|
| 134 |
|
|
| (26,070) |
|
|
Net increase (decrease) in shares outstanding |
|
|
| (6,608,297) |
|
|
|
| (2,114,729) |
|
|
| (563,124) |
|
|
| 219,279 |
|
|
Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year |
|
|
| 22,320,511 |
|
|
|
| 24,435,240 |
|
|
| 1,384,578 |
|
|
| 1,165,299 |
|
|
End of year |
|
|
| 15,712,214 |
|
|
|
| 22,320,511 |
|
|
| 821,454 |
|
|
| 1,384,578 |
|
|
See Notes to Financial Statements
34
NOTES TO FINANCIAL STATEMENTS
Note 1. ORGANIZATION OF THE COMPANY
Advance Capital I, Inc. (the “Company”) is a Maryland Corporation organized on March 6, 1987 that commenced operations on August 5, 1987. The Company is registered under the Investment Company Act of 1940, as amended, as an open-end, diversified management investment company (a mutual fund) offering shares in the following portfolios: Equity Growth Fund, Balanced Fund, Retirement Income Fund and the Core Equity Fund (collectively the “Funds”). Advance Capital Management, Inc. (“Management” or “Adviser”) (a wholly owned subsidiary of Advance Capital Group, Inc.) is the Company’s investment adviser.
The Funds offer Retail Class shares and Institutional Class shares, each of which has equal rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. The two share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for distribution. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.
Under the Company’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts with their vendors and others that provide for general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds. However, based on experience, the Funds expect that risk of loss to be remote.
The Funds are an investment company and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services - Investment Companies.
Note 2. ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from these estimates.
The following is a summary of significant accounting policies followed by the Company.
Security Valuation
Equity securities for which exchange quotations are readily available are valued at the last quoted market price at the time the valuations are made and debt securities are valued using prices furnished by an independent third party pricing service. The independent third party pricing service may use a matrix, formula or other objective method that considers the effect of market indices, yield curves and other specific adjustments to determine market price. When reliable market quotations are not readily available or are considered unreliable, securities are priced at their fair value, determined according to procedures adopted by the Board of Directors, which may include using an independent pricing service. Fair value procedures may also be used if the Company determines that a significant event has occurred between the time at which a market price is determined but prior to the time at which a Fund’s net asset value is calculated. Money market instruments or short-term debt held by the Funds with a remaining maturity of sixty days or less are valued at net asset value or amortized cost, when amortized cost approximates fair value best.
35
Note 2. ACCOUNTING POLICIES (Continued)
Fair Value Measurement
As described above, the Funds utilize various methods to measure the fair value of their investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods.
The three levels of the fair value hierarchy are described below:
Level 1 – quoted prices in active markets for identical securities
Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments.)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value each Fund’s investments as of December 31, 2015:
*Please refer to the Portfolios of Investments to view common stock and fixed income securities segregated by industry type.
There were no transfers between levels of the fair value hierarchy during the year ended December 31, 2015. The Funds did not hold any Level 3 investments during the year ended December 31, 2015. It is the Funds’ policy to consider transfers into or out of each Level as of the end of the reporting period.
36
Note 2. ACCOUNTING POLICIES (Continued)
Allocation of Income, Expenses, Gains and Losses
Income, fees and expenses of the Company (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated on a daily basis to each class of shares or Fund based upon their relative net assets. Class-specific fees and expenses are charged directly to the respective share class. Fund-specific fees and expenses are charged directly to the respective Fund.
Federal Income Taxes
It is each Fund’s policy to meet the requirements to qualify each year as a registered investment company under Subchapter M of the Internal Revenue Code. Each Fund intends to distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is provided. Capital losses are available to offset future capital gains, if any.
Management has analyzed the Funds’ tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years (2012-2014), or expected to be taken on the Funds’ 2015 tax return. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in an increase in a liability for taxes payable (or a reduction of a tax refund receivable), including the recognition of any related interest and penalties as an operating expense. During the period, the Funds did not incur any interest or penalties.
Dividends
Income dividends in the Balanced Fund and Retirement Income Fund are declared daily, except on Saturdays, Sundays and holidays and are paid monthly on the last business day of the month. Income dividends in the Equity Growth Fund and Core Equity Fund, if any, are declared annually and paid on the last business day of the year. Capital gain distributions, if any, are declared annually and paid in December. Dividends to shareholders are recorded on the ex-dividend date.
The amount of distributions from net investment income and net realized gains are determined in accordance with federal income tax regulations which may differ from GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require a reclassification.
Other
Security transactions are accounted for on the trade date, the date the order to buy or sell is executed. Interest income is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Premium and discount on fixed income securities are amortized using the effective interest method. Realized gains and losses on security transactions are determined on the specific identification method for book and tax purposes. Paydown gains and losses on mortgage-backed and asset-backed securities are recorded as adjustments to interest income in the Statements of Operations. Net investment losses, for which no carryover is permitted, are offset against paid in capital.
37
Note 3. TRANSACTIONS WITH AFFILIATES
Advance Capital Management, Inc. (a wholly owned subsidiary of Advance Capital Group, Inc.) serves as the Company’s investment advisor. Advance Capital Services, Inc. (“Services”) (also a wholly owned subsidiary of Advance Capital Group, Inc.) is the distributor of the Company’s shares. Advance Capital Group, Inc. (“Group”) is the Company’s Administrator, Transfer Agent and Dividend Disbursing Agent. For services provided by Management, the Company pays a fee on an annual basis equal to .70% of the average daily net assets for the first $500 million and .65% of the average daily net assets exceeding $500 million of the Equity Growth and Balanced Funds; .50% of the average daily net assets for the first $500 million and .45% of the average daily net assets exceeding $500 million of the Retirement Income Fund; and .80% of the average daily net assets of the Core Equity Fund. Group provides administrative, transfer agent and dividend disbursing agent services to the Company and is reimbursed by the Company for all expenses in connection with the performance of its services. The Company will compensate Services for expenses incurred in connection with the distribution of Retail Class shares of the Equity Growth, Balanced, Retirement Income and Core Equity, at .25% of each Fund’s average daily net assets.
Effective August 1, 2015, the Board of Directors of the Advance Capital I, Inc. Funds approved an Expense Limitation Agreement between the Company and Management whereby Management agreed at least until August 1, 2016, to waive its fees and/or reimburse expenses of the Institutional Class of shares of the Retirement Income Fund to the extent necessary to maintain the total annual operating expenses (excluding any front-end or contingent deferred loads, brokerage fees and commissions, acquired fund fees and expenses, expenses associated with instruments in other collective investment vehicles or derivative instruments, borrowing costs, and extraordinary expenses) at a level not to exceed 0.50% of the daily net assets. There is no waiver in place for the Retail Class of shares of the Retirement Income Fund. Waived fees in the Institutional Class of shares of the Retirement Income Fund are subject to repayment in the three fiscal years following the fiscal year in which the expenses occurred, if the Institutional Class of shares of the Retirement Income Fund is able to make the repayment without exceeding its current expense limitation. As of December 31, 2015, Management waived fees of $420 which are subject to repayment until December 31, 2018.
For the year ended December 31, 2015, the Company incurred investment advisory fees of $442,615, $915,582, $850,700 and $98,763 by Management for the Equity Growth Fund, Balanced Fund, Retirement Income Fund and Core Equity Fund, respectively. For the year ended December 31, 2015, the Company was charged distribution fees of $154,645, $325,072, $423,842, and $30,487 by Services for Retail Class shares for the Equity Growth Fund, Balanced Fund, Retirement Income Fund and Core Equity Fund, respectively.
Certain officers and directors of Group, Management, and Services, are also officers and directors of the Company. Director’s fees are only paid to independent directors and consist of quarterly payments of $5,150 to each director. The Chairman of the Board receives an additional 50% in compensation.
38
Note 4. INVESTMENT PORTFOLIO TRANSACTIONS
The cost of purchases and proceeds from sales of investments, other than short-term obligations and U.S. Government securities, for 2015 were as follows:
| Equity |
| Retirement | Core |
| Growth Fund | Balanced Fund | Income Fund | Equity Fund |
Purchases | $133,456,201 | $170,566,937 | $41,005,070 | $24,767,695 |
Sales | 159,157,336 | 226,935,886 | 92,591,157 | 31,022,277 |
The cost of purchases and proceeds from sales of U.S. Government securities excluded above were as follows:
| Equity |
| Retirement | Core |
| Growth Fund | Balanced Fund | Income Fund | Equity Fund |
Purchases | $0 | $5,153,516 | $5,049,688 | $0 |
Sales | 0 | 5,021,875 | 5,050,469 | 0 |
At December 31, 2015, the gross unrealized net appreciation and depreciation of securities for financial federal income tax reporting purposes consisted of the following:
| Equity |
| Retirement | Core |
|
| Growth Fund | Balanced Fund | Income Fund | Equity Fund |
|
Unrealized Gain | $2,484,664 | $3,206,078 | $1,904,101 | $447,569 |
|
Unrealized Loss | (4,315,561) | (4,279,220) | (1,269,049) | (312,958) |
|
Net Unrealized Gain/ |
|
|
|
|
|
|
|
|
|
| |
(Loss)* | ($1,830,897) | ($1,073,142) | $635,052 | $134,611 |
|
Tax Cost | $49,172,243 | $95,781,197 | $133,375,656 | $8,693,999 |
|
*The difference between book basis and tax basis unrealized gain/(loss) are attributable primarily to tax deferral of losses on wash sales.
Note 5. AUTHORIZED SHARES
The Company has one billion authorized shares of common stock, par value of $.001 per share. Each of the Company’s portfolios has 150 million shares authorized for Retail Class shares and 100 million shares authorized for Institutional Class shares.
39
Note 6. FEDERAL INCOME TAX INFORMATION
The tax characteristics of distributions paid to shareholders during the years ended December 31, 2015 and 2014 were as follows:
| Distributions |
|
| Total |
|
2015 | Paid from | Long Term | Return of | Distributions |
|
Ordinary Income | Capital Gain | Capital | Paid |
| |
Equity Growth Fund | $527,755 | $102,454 | $0 | $630,209 |
|
Balanced Fund | 2,091,502 | 116,460 | 0 | 2,207,962 |
|
Retirement Income Fund | 4,881,082 | 0 | 0 | 4,881,082 |
|
Core Equity Fund | 119,430 | 0 | 0 | 119,430 |
|
|
|
|
|
|
|
| Distributions |
|
| Total |
|
2014 | Paid from | Long Term | Return of | Distributions |
|
Ordinary Income | Capital Gain | Capital | Paid |
| |
Equity Growth Fund | $8,173,577 | $9,249,137 | $0 | $17,422,714 |
|
Balanced Fund | 2,272,446 | 13,087,950 | 0 | 15,360,396 |
|
Retirement Income Fund | 6,193,330 | 0 | 0 | 6,193,330 |
|
Core Equity Fund | 1,595,238 | 1,701,551 | 0 | 3,296,789 |
|
As of December 31, 2015, the components of accumulated earnings/(deficit) on a tax basis were as follows:
| Undistributed | Accumulated | Unrealized | Total |
|
| Accumulated |
| |||
| Accumulated Net | Capital Gains and | Gain/ | Earnings/ |
|
| Investment Income | Losses | (Loss) | (Deficit) |
|
|
|
|
|
|
|
Equity Growth Fund | $10,492 | ($1,053,434) | ($1,830,897) | ($2,873,839) |
|
Balanced Fund | 0 | (3,337,164) | (1,073,142) | (4,410,306) |
|
Retirement Income Fund | 0 | (55,115,123) | 635,052 | (54,480,071) |
|
Core Equity Fund | 0 | (50,860) | 134,611 | 83,751 |
|
At December 31, 2015, capital loss carryovers and their expiration dates were as follows:
| Equity |
| Retirement | Core |
| Growth Fund | Balanced Fund | Income Fund | Equity Fund |
December 31, 2016 | $0 | $0 | $39,244,091 | $0 |
December 31, 2017 | 0 | 0 | 10,127,592 | 0 |
December 31, 2018 | 0 | 0 | 3,971,993 | 0 |
Nonexpiring Losses-ST | 853,014 | 3,337,164 | 639,388 | 50,860 |
Nonexpiring Losses-LT | 200,420 | 0 | 1,132,059 | 0 |
|
|
|
|
|
Total | $1,053,434 | $3,337,164 | $55,115,123 | $50,860 |
Under the Regulated Investment Company Modernization Act of 2010, the Funds will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
40
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Advance Capital I, Inc.
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Advance Capital I, Inc., comprising the Equity Growth Fund, Balanced Fund, Retirement Income Fund, and Core Equity Fund (the “Funds”) as of December 31, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2015, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds constituting Advance Capital I, Inc. as of December 31, 2015, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
COHEN FUND AUDIT SERVICES, LTD.
Cleveland, Ohio
February 16, 2016
41
ADDITIONAL INFORMATION (UNAUDITED)
MANAGEMENT OF THE FUNDS
Advance Capital I, Inc. is managed by a Board of Directors. The Directors are responsible for managing the company's business affairs and for exercising all the company's powers except those reserved for the shareholders. Officers and Directors of the Company, their addresses, and principal occupations during the last five years, are as follows:
| Position(s) & | Year |
| Number of | Other |
| |
| Principal Occupations | Portfolios | Directorships |
| |||
Name and Address | Office(s) | Elected* | During past 5 Years | Overseen | Held** |
| |
|
|
|
|
|
| ||
INTERESTED DIRECTORS*** |
|
|
|
|
| ||
|
|
|
|
|
|
| |
Christopher M.Kostiz | Director and | 2012 | President, Advance Capital I, Inc.; | 4 | None |
| |
One Towne Square | President |
| Vice President, Advance Capital |
|
|
| |
Suite 444 |
|
| I, Inc. from prior to 2010 until |
|
|
| |
Southfield, MI 48076 |
|
| January 2012; President and Senior |
|
|
| |
Age 47 |
|
| Portfolio Manager, Advance Capital |
|
|
| |
|
|
| Management, Inc.. |
|
|
| |
|
|
|
|
|
|
| |
DISINTERESTED DIRECTORS |
|
|
|
|
|
| |
|
|
|
|
|
|
| |
Joseph A. Ahern | Director | 1995 | Attorney; President and | 4 | Birmingham |
| |
One Towne Square |
|
| Shareholder; Ahern & Kill, formerly |
| Bloomfield |
| |
Suite 444 | Independent |
| Ahern Fleury (law firm) |
| Bancshares, Inc. |
| |
Southfield, MI 48076 | Chairman | 2005 |
|
| (2011 to date) |
| |
Age 57 |
|
|
|
|
|
| |
|
|
|
|
|
|
| |
Susan E. Burns | Director | 2008 | President, St. John Providence | 4 | None |
| |
One Towne Square |
|
| Foundations (Healthcare) |
|
|
| |
Suite 444 |
|
|
|
|
|
| |
Southfield, MI 48076 |
|
|
|
|
|
| |
Age 54 |
|
|
|
|
|
| |
|
|
|
|
|
|
| |
Janice E. Loichle | Director | 2001 | Retired; Former Vice President, | 4 | None |
| |
One Towne Square |
|
| Chief Integration Officer and Chief |
|
|
| |
Suite 444 |
|
| of Local Exchange Operations, XO |
|
|
| |
Southfield, MI 48076 |
|
| Communications, Inc. (formerly |
|
|
| |
Age 67 |
|
| NEXTLINK Communications); |
|
|
| |
|
|
| President, NEXTLINK Solutions |
|
|
| |
|
|
| (Telecommunications) |
|
|
|
42
MANAGEMENT OF THE FUND (Continued)
| Position(s) & | Year | Principal Occupations | Number of | Other |
|
| Portfolios | Directorships |
| |||
Name and Address | Office(s) | Elected* | During past 5 Years | Overseen | Held** |
|
|
|
|
|
|
|
|
Thomas L. Saeli | Director | 2000 | Chief Executive Officer, JRB | 4 | Ultralife |
|
One Towne Square |
|
| Enterprises, Inc. since March 2011 |
| Corporation (2010 |
|
Suite 444 |
|
| (manufacturing) |
| to date) |
|
Southfield, MI 48076 |
|
|
|
|
|
|
Age 58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER OFFICERS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph R. Theisen | Vice President | 2012 | Vice President, Advance Capital | 4 | None |
|
One Towne Square |
|
| I, Inc.; President, Advance Capital |
|
|
|
Suite 444 |
|
| Group, Inc.; President, Advance |
|
|
|
Southfield, MI 48076 |
|
| Capital Services, Inc. |
|
|
|
Age 54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathy J. Harkleroad | Vice President, | 1996 | Vice President, Chief Compliance | 4 | None |
|
One Towne Square | Chief Compliance |
| Officer and Secretary, Advance |
|
|
|
Suite 444 | Officer and |
| Capital I, Inc. and Advance Capital |
|
|
|
Southfield, MI 48076 | Secretary |
| Group, Inc.; Marketing Director, |
|
|
|
Age 63 |
|
| Advance Capital Services, Inc. |
|
|
|
|
|
|
|
|
|
|
Julie A. Katynski | Vice President | 2003 | Vice President - Finance, Assistant | 4 | None |
|
One Towne Square | and Assistant |
| Secretary & Treasurer, Advance |
|
|
|
Suite 444 | Secretary |
| Capital I, Inc. and Advance Capital |
|
|
|
Southfield, MI 48076 |
|
| Group, Inc. |
|
|
|
Age 50 | Treasurer | 2012 |
|
|
|
|
*There is no set term of office for Directors and Officers. The Independent Directors have adopted a retirement policy, which calls for the retirement of Directors in the year in which they reach the age of 70.
**This column includes only directorships of companies required to register or file reports with the Commission under the Securities Exchange Act of 1934 (that is, “public companies”) or other investment companies registered under the 1940 Act.
***Officers of the Funds are "interested persons" as defined in the Investment Company Act of 1940.
The Funds’ SAI includes additional information about the Directors and is available free of charge, upon request, by calling (800) 345-4783.
43
Expense Examples:
As a shareholder of the Advance Capital I, Inc. Funds, you incur ongoing costs, including management fees; distribution (and/or service) 12b-1 fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Advance Capital I, Inc. Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2015 through December 31, 2015.
ACTUAL EXPENSES
The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
| Beginning | Ending | Expense Paid | Expense Ratio |
| Account Value | Account Value | During Period* | During Period |
| 7/1/15 | 12/31/15 | 7/1/15 - 12/31/15 | 7/1/15 - 12/31/15 |
|
|
|
|
|
Equity Growth Fund |
|
|
|
|
Retail shares | $1,000.00 | $937.40 | $5.66 | 1.16% |
Institutional shares | 1,000.00 | 940.00 | 4.50 | 0.92% |
|
|
|
|
|
Balanced Fund |
|
|
|
|
Retail shares | $1,000.00 | $961.40 | $5.64 | 1.14% |
Institutional shares | 1,000.00 | 963.70 | 4.41 | 0.89% |
|
|
|
|
|
Retirement Income Fund |
|
|
|
|
Retail shares | $1,000.00 | $998.70 | $4.69 | 0.93% |
Institutional shares | 1,000.00 | 1,002.10 | 3.08 | 0.61% |
|
|
|
|
|
Core Equity Fund |
|
|
|
|
Retail shares | $1,000.00 | $972.10 | $6.59 | 1.33% |
Institutional shares | 1,000.00 | 975.40 | 5.36 | 1.08% |
*Expenses are equal to the average account value times each Fund’s annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year.
44
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below provides information about the hypothetical values and hypothetical expenses based on each Advance Capital I, Inc. Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
| Beginning | Ending | Expense Paid | Expense Ratio |
| Account Value | Account Value | During Period* | During Period |
| 7/1/15 | 12/31/15 | 7/1/15 - 12/31/15 | 7/1/15 - 12/31/15 |
|
|
|
|
|
Equity Growth Fund |
|
|
|
|
Retail shares | $1,000.00 | $1,019.30 | $5.89 | 1.16% |
Institutional shares | 1,000.00 | 1,020.51 | 4.67 | 0.92% |
|
|
|
|
|
Balanced Fund |
|
|
|
|
Retail shares | $1,000.00 | $1,019.46 | $5.80 | 1.14% |
Institutional shares | 1,000.00 | 1,020.72 | 4.53 | 0.89% |
|
|
|
|
|
Retirement Income Fund |
|
|
|
|
Retail shares | $1,000.00 | $1,020.46 | $4.72 | 0.93% |
Institutional shares | 1,000.00 | 1,022.07 | 3.10 | 0.61% |
|
|
|
|
|
Core Equity Fund |
|
|
|
|
Retail shares | $1,000.00 | $1,018.45 | $6.75 | 1.33% |
Institutional shares | 1,000.00 | 1,019.71 | 5.48 | 1.08% |
*Expenses are equal to the average account value times each Fund’s annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year.
PROXY VOTING
The policies and procedures that Advance Capital I, Inc. uses to determine how to vote proxies relating to portfolio securities is available on the SEC’s website at www.sec.gov. Information on how the Funds voted proxies relating to portfolio securities during the 12 month period ended June 30, 2015 is available at (1) without charge, upon request, by calling (800) 345-4783, and (2) on the SEC’s website at www.sec.gov.
QUARTERLY PORTFOLIO SCHEDULE
The Advance Capital I, Inc. Funds file with the SEC a complete schedule of its portfolio holdings as of the close of the first and third quarters of its fiscal year, on “Form N-Q”. These filings are available on the SEC’s website at www. sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) This information is also available without charge , upon request, by calling (800) 345-4783.
45
BOARD OF DIRECTORS’ APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT
The Investment Company Act of 1940 requires that the Board of Directors, including a majority of the Independent Directors voting separately, annually approve the Company’s investment advisory agreement (the “Agreement”) with Advance Capital Management, Inc. The Directors must determine that the terms of the Agreement are fair and reasonable and that renewal of the Agreement will enable the Funds to receive quality investment advisory services at a cost deemed reasonable and that renewal is in the best interests of the Advance Capital I, Inc. Funds (“the Funds”) and their shareholders.
Factors Considered
The Board specifically considered the renewal of this Agreement at its meeting on July 24, 2015. Each Director relied upon personal knowledge of the Advisor, its services and the Funds. In addition, the Directors considered a number of factors in renewing the Agreement including, among other things, (i) the nature, extent and quality of services furnished by the Advisor to each Fund; (ii) the investment performance of the Funds compared to relevant indices and the performance of peer groups of other open-end investment companies pursuing similar strategies, (iii) the advisory fees and other expenses paid by the Funds compared to those of similar funds managed by other investment advisors; (iv) the profitability of the Advisors as they relate to their investment advisory relationship with the Funds, (v) the extent to which economies of scale would be realized as the Funds grow and whether fee levels reflect these economies, (vi) the record of compliance with the Funds’ investment policies and restrictions, (vii) the Funds’ Code of Ethics as well as the structure and responsibilities of the Advisor’s compliance department, and (viii) the disclosures included in the Company’s reports to shareholders.
Deliberative Process
To assist the Directors in their evaluation of the quality of the Advisor’s services and the reasonableness of the Advisor’s fees under the Agreement, the Directors received information from independent legal counsel outlining the factors appropriate for consideration when evaluating investment advisory contracts as well as the duties of directors in approving such contracts. The Directors also requested and received various materials relating to the Advisor’s investment services under the Agreement. These materials included a report prepared by the Advisor comparing the Funds advisory fees and expenses to a group of several hundred funds determined to be similar to each of the funds (called the “peer group”). The Advisor’s report also included a performance comparison for the Funds against appropriate indexes. In addition, the Board received reports and presentations from the Advisor that described, among other things, the Advisor’s financial condition, profitability from their relationship with the Funds, soft dollar commission and trade allocation policies, organizational structure and compliance policies and procedures. The Board also considered information received from the Advisor throughout the year, including investment performance and expense ratio reports for the Funds.
The following summarizes matters considered by the Directors in connection with their approval of the Agreement. The decision to approve the Agreement was not based on any single factor and this summary does not detail all the matters which were considered. However, the Directors concluded that each of the factors outlined below favored such approval.
Nature, Extent and Quality of the Services Provided; Ability to Provide Services
The Directors received and considered various data and information regarding the nature, extent, and quality of services provided to the Funds by the Advisor under this Agreement. The Directors reviewed the background, education and experience of the Advisor’s key portfolio management and operational personnel and the amount of attention devoted to the Funds by the Advisor’s portfolio management personnel. Accordingly, the Directors were satisfied that the Advisor’s investment personnel devote a significant portion of their time and attention to the success of the Funds and their investment strategies. The Directors also considered the Advisor’s policies and systems designed to achieve compliance with each Funds’ investment objectives and regulatory requirements. Based on these factors, the Directors concluded that the nature, extent, and quality of the investment advisory services are satisfactory, and that the Advisor possesses the ability to continue to provide these services to the Funds.
46
Investment Performance
The Board of Directors considered many variables when assessing the performance of the Advance Capital I Funds including total return, yield and performance against the peer group. It was noted that the Equity Growth Fund underperformed its Morningstar category average and the Rusell Mid Cap Value Index for the quarter to date, one year and five year periods. It was noted that the Balanced Fund’ outperformed the Morningstar Moderate Target Risk category for the five year period and provided returns in line with the Morningstar category over the three year period. The Board discussed the performance of the Retirement Income Fund and noted that the Fund outperformed its Morningstar category for the one year, three year and five year periods. The Board next discussed the Core Equity Fund and noted positive returns for each of the one year, three year and five year periods. The Board of Directors concluded that based on the management style, long-term investment performance and investment strategy, the renewal of this Agreement was warranted.
Costs of Services Provided and Profits Realized by the Advisor
The Directors considered each of the Fund’s expense ratios against those of a peer group of funds. The Equity Growth Fund’s expense ratios for the twelve months ended December 31, 2014 were in the first quartile (lowest). The Balanced Fund, Core Equity Fund and Retirement Income Fund’s expense ratios were in-line or lower than their respective category averages. The Directors concluded that each of the Fund’s overall expense ratios were comparable or better than funds in their category and as such, a benefit to shareholders. The Directors determined that the fees under this Agreement were reasonable and fair in light of both the nature and quality of services provided by the Advisor as compared to fees charged by funds in their respective peer groups.
The Directors also considered the level of the Advisor’s profits as it pertained to the management of the Funds. Consideration included a review of the Investment Advisor’s methodology for allocating certain of its costs to the management of each Fund. The Directors also considered the financial results realized by the Investment Advisor in connection with the operation of the Funds and concluded that the Advisor’s profit from management of the Funds, including the financial results derived from the Funds, bear a reasonable relationship to the services rendered and are fair and reasonable for the management of the Funds in light of the business risks involved.
Economies of Scale
The Directors considered whether the Funds had appropriately benefited from any existing economies of scale and whether there was potential for any further reduction of fees. The Directors concluded that the existing fee structures reflected the appropriate economies of scale.
Approval
The Directors, in light of the Advisor’s overall performance, considered it appropriate to continue the management services of the Advisor. Based upon their evaluation of all material factors deemed relevant and the advice of counsel, the Directors concluded that the Agreement with the Funds is fair and reasonable and unanimously voted to approve the continuation of the Agreement for another year.
47
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Item 2. Code of Ethics.
The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. During the period covered by this report, there have been no amendments to such code of ethics nor were any waivers to such code of ethics granted. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors has determined that independent directors Janice Loichle and Thomas Saeli qualify as Audit Committee financial experts. The designation of a person as an "Audit Committee financial expert" does not mean that the person has any greater duties, obligations, or liability than those imposed on the person without the "Audit Committee financial expert" designation. Similarly, the designation of a person as an "Audit Committee financial expert" does not affect the duties, obligations, or liability of any other members of the Audit Committee or Board of Directors.
Item 4. Principal Accountant Fees and Services.
a) Audit Fees: The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $66,000 for year ended December 31, 2015 and $66,000 for year ended December 31, 2014.
b) Audit-Related Fees: The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this item were $0 for year ended December 31, 2015 and $0 for year ended December 31, 2014.
c) Tax Fees: The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were $12,000 in the year ended December 31, 2015 and $12,000 in the year ended December 31, 2014. Such services include review of excise distribution calculations (if applicable), preparation of the Funds' federal, state and excise tax returns and routine tax consulting.
d) All Other Fees: The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this item were $0 for year ended December 31, 2015 and $0 for year ended December 31, 2014.
e) (1) Audit Committee Pre-Approval Policies and Procedures
ADVANCE CAPITAL I, INC.
PRE-APPROVAL POLICIES AND PROCEDURES
As adopted by the AUDIT COMMITTEE of the Board of Directors of the
Advance Capital I, Inc. Funds ("Funds")
The Sarbanes-Oxley Act of 2002 ("Act") and rules adopted by the Securities and Exchange Commission ("SEC") ("Rules") require that the funds' audit Committee of the Board of Directors ("Audit Committee") pre-approve all audit and non-audit services provided to the fund by its independent accountant ("Auditor"). It also covers any non-audit services provided by the Auditor to the Funds' investment adviser or affiliates of the adviser that provide ongoing services to the Fund ("Service Affiliates") IF these services directly impact the Funds' operations and financial reporting.
The following policies and procedures govern the ways in which the Audit Committee will pre-approve audit and non-audit services provided by the Auditor to the funds and Service Affiliates. These policies and procedures do not apply to audit services provided to Service Affiliates by the Auditors, nor do they apply to services provided by another audit firm.
These policies and procedures comply with the requirements for pre-approval and provide a mechanism by which management of the Fund may request and secure pre-approval of audit and non-audit services with minimal disruption to normal business operations. Pre-approval of non-audit services may be achieved through a combination of the procedures described in Sections C and D below.
A. GENERAL
1. The Audit Committee must pre-approve all audit and non-audit services that the Auditor provides to the Fund.
2. The Audit Committee must pre-approve any engagement of the Auditor to provide non-audit services to any Service Affiliate during the period of the auditor's engagement IF the non-audit services directly impact the fund's operations and financial reporting.
B. PRE-APPROVAL OF AUDIT SERVICES TO THE FUND
1. The audit Committee shall approve the engagement of the auditor to certify the fund's financial statements for each fiscal year (the "Engagement"). The approval of the Engagement shall not be delegated to a Designated Member (see Section D below). In approving the Engagement, the Audit Committee shall obtain, review and consider sufficient information concerning the proposed Auditor to enable the Audit Committee to make a reasonable evaluation of the Auditor's proposed fees for the engagement, in light of the scope and nature of the audit services that the fund will receive.
2. The Audit Committee shall report to the Board of Directors (the "Board") its approval of the Engagement and the proposed fees for such Engagement, as well as the basis for such approval.
3. Unless otherwise in accordance with applicable law, the Engagement shall require that the Auditor be selected by a vote, cast in person, of a majority of the members of the Fund's Board who are "not interested" persons of the Board (as defined in Section 2(a)(19) of the Investment Company Act of 1940) ("Independent directors").
C. Pre-Approval of Non-Audit Services to the Fund and to Service Affiliates--by Types of Services
1. The Audit Committee may pre-approve certain types of non-audit services to the Fund and its Service Affiliates pursuant to this Section C.
2. Annually, when the Audit Committee considers the Engagement of the Auditor, management of the Fund shall provide to the Audit Committee, for its consideration and action, the following: (a) a list of non-audit services that the Fund may request from the Auditor during the fiscal year; and (b) a list of non-audit services directly impacting the funds' operations and financial reporting that Service Affiliates may request from the Auditor during the fiscal year.
3. Lists submitted to the Audit Committee shall describe the types of non-audit services in reasonable detail and shall include an estimated budget (or budgeted range) of fees where possible and such other information as the Audit Committee may request.
4. The Audit committee's pre-approval of non-audit services submitted pursuant to this Section C shall constitute authorization for management of the fund to utilize the Auditor for the types of non-audit services so pre-approved, if needed during the fiscal year.
5. A list of the types of non-audit services pre-approved by the Audit Committee pursuant to this Section C will be distributed to management of the Service Affiliates and the appropriate partners of the auditor. Periodically, the Auditor will discuss with the Audit committee those non-audit services that have been or are being provided pursuant to this Section C.
D. Pre-Approval of Non-Audit Services to the Fund and to Service
Affiliates--on a Project-by-Project Basis
1. The Audit Committee also may pre-approve non-audit services on a project-by-project basis pursuant to this Section D.
2. Management of the Fund may submit either to the Audit Committee or to their Designated Member a pre-approval request for one or more non-audit projects. The request shall describe the project(s) in reasonable detail and shall include an estimated budget (or budgeted range) of fees and such other information as the Audit Committee or Designated Member shall request.
3. The Audit Committee shall designate one or more of its members who are "not interested" Directors (each a "Designated Member") to consider any non-audit services to the Fund or any Service Affiliate, which have not been pre-approved by the Audit Committee. The Designated Member shall review, on behalf of the Audit Committee any proposed material change in the nature or extent of any non-audit services previously approved. The fund's management, in consultation with the Auditor, shall explain why such non-audit services or material change in non-audit services are necessary and appropriate and the anticipated costs thereof.
4. The Designated Member will review the requested non-audit services or proposed material change in such services and will either:
a) Pre-approve, pre-approve subject to conditions, or disapprove any such requested services, or any proposed material change in services, whether to the Fund or to a Service Affiliate; or
b) Refer such matter to the full Audit Committee for its consideration and action.
In considering any requested non-audit services or proposed material change in such services, the Designated Member shall take into account all relevant matters.
5. The Designated Member's pre-approval (or pre-approval subject to conditions) of the requested non-audit service or proposed material change in service pursuant to this Section D shall constitute authorization for management of the Fund or Service Affiliate to utilize the auditor for the non-audit services which have been pre-approved. Any action by the Designated Member in approving a requested non-audit service shall be presented for ratification by the Audit Committee not later than at its next scheduled meeting. If the Designated Member does not approve the Auditor providing the requested non-audit service, the matter will be presented to the full Audit Committee for its consideration and action.
E. AMENDMENT; ANNUAL REVIEW
1. The Audit Committee may amend these procedures from time to time.
2. These procedures shall be reviewed annually by the Audit Committee.
F. RECORD KEEPING
1. The Fund shall maintain a written record of all decisions made by the Audit Committee or the Designated Member pursuant to these procedures, together with appropriate supporting material.
2. A record of the approval of any non-audit service pursuant to the de minimis exception provided in the Rules shall be made indicating that each of the conditions for this exception, as set forth in the Rules, has been satisfied.
3. A copy of these Procedures and any amendments shall be permanently maintained in an easily accessible place. Written records referred to in paragraphs 1 and 2 of this Section F shall be maintained for six years from the end of the fiscal year in which the actions were taken. They will be maintained in an easily accessible location for the first two years.
(e)(2) PERCENTAGE OF SERVICES REFERRED TO IN 4(B) - (4)(D) THAT WERE APPROVED BY THE AUDIT COMMITTEE:
100% of services described in each of paragraphs (b) through (d) of this Item were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
f) Percentage of hours expended on the principal accountant’s engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
Not applicable.
g) Non-Audit Fees: The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant were $0 for year ended December 31, 2015 and $0 for year ended December 31, 2014.
h) Not applicable.
Item 5. Audit Committee of Listed Registrant.
Not applicable because registrant’s shares are not listed for trading on a national securities exchange.
Item 6. Schedule of Investments.
Schedule I - Investments in securities of unaffiliated issuers is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-end Management Investment Companies.
Not applicable for open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable for open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a)
The Company maintains a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in its reports filed or submitted under the Investment Company Act of 1940, as amended (the “1940 Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management to allow timely decisions regarding required disclosures. The Company’s principal executive officer and principal financial officer, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) are effective, based on their evaluation of the disclosure controls and procedures as of December 31, 2015, a date that is within 90 days of the filing date of this report.
(b)
There were no significant changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant's last fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting
Item 12. Exhibits.
(a)(1) Code of Ethics (filed herewith).
(a)(2) Certification pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ADVANCE CAPITAL I, INC.
By: /S/ Christopher M. Kostiz
Christopher M. Kostiz, President
(principal executive officer)
Date: March 7, 2016
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 on the dates indicated.
By: /S/ Christopher M. Kostiz
Christopher M. Kostiz, President
(principal executive officer)
Date: March 7, 2016
By: /S/ Julie A. Katynski
Julie A. Katynski, Vice President, Treasurer &
Assistant Secretary
(principal financial officer)
Date: March 7, 2016