U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. _______________
Post-Effective Amendment No. _______________
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
Area Code and Telephone Number:
Principal Investors Fund, Inc. (800) 247-4123
Address of Principal Executive Offices: (Number, Street, City, State, Zip Code)
711 High Street, Des Moines, Iowa 50392
Name and Address of Agent for Service:
With a copy to:
Michael D. Roughton John W. Blouch
Counsel Jones & Blouch L.L.P.
Principal Investors Fund, Inc. 1025 Thomas Jefferson Street, N.W.
711 High Street Suite 405 West
Des Moines, Iowa 50392-0300 Washington, D.C. 20007
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
______________________________________________________
Title of Securities Being Registered:
Advisors Preferred Class, Advisors Select Class, Preferred Class,
Select Class, Institutional Class and Class J Common
Stock,
par value $.01 per share.
______________________________________________________
No filing fee is required because of reliance on Section 24(f) under the
Investment Company Act of 1940, as amended.
It is proposed that this filing will become effective on April 10, 2003,
pursuant to Rule 488.
______________________________________________________
PRINCIPAL INVESTORS FUND, INC.
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(a) UNDER THE SECURITIES ACT OF 1933
FORM N-14 INFORMATION STATEMENT AND
ITEM NO. PROSPECTUS CAPTION
PART A
Item 1. ......................................
Beginning of Registration Statement and Outside
Front Cover Page of Prospectus .........Cross Reference Sheet; Cover Page
Item 2.......................................
Beginning and Outside Back Cover Page of Prospectus Table of Contents
Item 3.......................................
Fee Table, Synopsis Information and Risk Factors
Summary; Principal Risk Factors
Item 4.......................................Information about the Transaction
The Plan
Item 5.
Information about the Registrant
Incorporation of Documents by
Reference in the Prospectus
Item 6.
Information about the Company Being
Acquired
Incorporation of Documents by
Reference in the Prospectus
Item 7.......................................Voting Information
Introduction and Voting Information
Item 8.......................................
Interest of Certain Persons and Experts Not Applicable
Item 9. ......................................
Additional Information Required for Reoffering
by Persons Deemed to be Underwriters ...Not Applicable
PART B
Item 10......................................Cover Page
Cover Page of Statement of
Additional Information
Item 11......................................Table of Contents
Table of Contents of Statement of
Additional Information
Item 12.
Additional Information about the
Registrant
Statement of Additional Information
of Principal Investors Fund, Inc.
dated March 1, 2003.
Item 14......................................Financial Statements
Financial Statements as noted in
the Statement of Additional
Information
2
PART C
Item 15......................................Indemnification
Indemnification
Item 16......................................Exhibits Exhibits
Item 17......................................Undertakings Undertakings
3
Logo
Principal
Financial
Group
April 10, 2003
Dear Shareholder:
The Board of Directors of Principal Investors Fund, Inc. has called a special
meeting of the shareholders of one series of the Fund, the Partners MidCap Blend
Fund, for May 14, 2003 to vote on a Plan of Acquisition which provides for the
combination of the Partners MidCap Blend Fund with another series of the Fund,
the MidCap Blend Fund. If the Plan is approved by shareholders and implemented,
shareholders of the Partners MidCap Blend Fund will cease to own shares of the
Partners MidCap Blend Fund and will become the owner of shares of the same class
of the MidCap Blend Fund equal in value to the shares of the Partners MidCap
Blend Fund. The Board believes that the proposed change is in the best interest
of each series of the Fund and its shareholders.
The Partners MidCap Blend Fund and the MidCap Blend Fund are growth-oriented
funds which invest primarily in common stocks of companies with medium market
capitalization and seek long-term growth of capital. While the funds have
somewhat different definitions of an "medium-sized" company, the principal
difference between the Partners MidCap Blend Fund and the MidCap Blend Fund is
the that investment advisory services are provided by different sub-advisory
firms.
It is important that you take time to read the prospectus/information statement.
If you have questions regarding the prospectus/information statement or your
account, please call our shareholder services department toll-free at
1-800-247-4123.
Sincerely,
LOGO
/s/Ralph C. Eucher
Ralph C. Eucher
President
Principal Investors Fund, Inc.
1
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 14, 2003
___________
To the Shareholders:
Notice is hereby given that a special meeting of the shareholders of the
Partners MidCap Blend Fund, a series of Principal Investors Fund, Inc., will be
held at 2:00 p.m. C.D.T., on May 14, 2003, at the offices of Principal
Management Corporation, 680 8th Street, Des Moines, Iowa 50392-2080. The meeting
is being held to consider and vote on the following matter as well as any other
business that may properly come before the meeting or any adjournment thereof:
1. Approval of a Plan of Acquisition and the transactions
contemplated thereby, pursuant to which the MidCap Blend Fund, a
series of Principal Investors Fund, Inc., will acquire all the
assets and assume all the liabilities of the Partners MidCap
Blend Fund and issue in exchange shares of its Preferred Class,
Advisors Preferred Class, Select Class, Advisors Select Class,
Institutional Class, and Class J common stock, and the Partners
MidCap Blend Fund will distribute those shares to its Preferred
Class, Advisors Preferred Class, Select Class, Advisors Select
Class, Institutional Class, and Class J shareholders in
redemption of all its outstanding shares and then dissolve.
You are entitled to notice of and to vote at the meeting, and any adjournment,
if you owned shares of the Partners MidCap Blend Fund at the close of business
on April 7, 2003, the record date for the meeting.
Please read the attached prospectus/information statement.
LOGO
/s/A. S. Filean
For the Board of Directors
Arthur S. Filean
Senior Vice President and Secretary
April 10, 2003
2
PRINCIPAL INVESTORS FUND, INC.
MIDCAP BLEND FUND SERIES
PARTNERS MIDCAP BLEND SERIES
PROSPECTUS/INFORMATION STATEMENT
This prospectus/information statement is being furnished in connection with a
special meeting of the shareholders of the Partners MidCap Blend Fund, a series
of Principal Investors Fund, Inc. ("Investors Fund") to be held at 2:00 p.m.
C.D.T., on May 14, 2003, at the offices of Principal Management Corporation, 680
8th Street, Des Moines, Iowa 50392-0200.
At the meeting, shareholders of the Partners MidCap Blend Fund will vote on a
Plan of Acquisition ("Plan"). Under the Plan, if approved, the MidCap Blend
Fund, another series of the Investors Fund, will acquire all the assets and
assume all the liabilities of the Partners MidCap Blend Fund and issue in
exchange shares of its Preferred Class, Advisors Preferred Class, Select Class,
Advisors Select Class, Institutional Class, and Class J common stock. The
Partners MidCap Blend Fund will immediately redeem all its outstanding Preferred
Class, Advisors Preferred Class, Select Class, Advisors Select Class,
Institutional Class, and Class J shares by distributing the MidCap Blend Fund
shares of the same classes to its shareholders. As a result, a shareholder of
the Partners MidCap Blend Fund will have the same amount invested in the same
share class of the MidCap Blend Fund that the shareholder had invested in those
share classes of the Partners MidCap Blend Fund at the effective time. The
manager of the Investors Fund, Principal Management Corporation, has agreed to
pay all expenses incurred by the Partners MidCap Blend Fund in connection with
the Plan.
The Partners MidCap Blend Fund and the MidCap Blend Fund are each a series of
the Investors Fund, which is a Maryland corporation organized by Principal Life
Insurance Company ("Principal Life") and registered as an open-end, management
investment company under the Investment Company Act of 1940 (the "Investment
Company Act"). The primary investment objective of the Partners MidCap Blend
Fund and the MidCap Blend Funds to seek long-term growth of capital. Each Fund
pursues its investment objective by investing at least 80% of its assets in
common stocks of non-U.S. companies having medium market capitalizations. The
Partners MidCap Blend Fund defines such companies as companies with market
capitalizations similar to companies in the S&P MidCap 400 Index (ranging
between $145 million and $7.3 billion as of December 31, 2002). The MidCap Blend
Fund defines medium-sized companies as companies with market capitalizations
similar to companies in the Russell MidCap Index (ranging between $194 million
and $13.276 billion as of December 31, 2002).
This prospectus/information statement sets forth concisely the information you
should know before voting on the proposed Plan. You should retain it for future
reference.
The prospectus and Statement of Additional Information for the MidCap Blend Fund
and the Partners MidCap Blend Fund, dated March 1, 2003, have been filed with
the Securities and Exchange Commission ("SEC") and are available without charge
by writing to the Investors Fund or its manager at their principal executive
offices, 680 8th Street, Des Moines, Iowa 50392-2080 or by telephoning toll-free
1-800-247-4123. The prospectus of the MidCap Blend Fund and the Partners MidCap
Blend Fund, dated March 1, 2003, and the Statement of Additional Information,
dated April 10, 2003, relating to this prospectus/information statement, are
incorporated herein by reference. As a shareholder of the Partners MidCap Blend
Fund, you previously received a current prospectus for the MidCap Blend Fund a
prospectus that combines these and other series of the Investors Fund. A copy of
the prospectus may be obtained as described above.
_____________________
THE SEC HAS NOT APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS/INFORMATION STATEMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_____________________
The date of this prospectus/information
statement is April 10, 2003
3
PROSPECTUS/INFORMATION STATEMENT
TABLE OF CONTENTS
INTRODUCTION AND VOTING INFORMATION................................... 5
Special Meeting; Voting............................................. 5
Additional Information.............................................. 5
SUMMARY .............................................................. 7
The Plan............................................................ 7
Reasons for the Plan................................................ 7
Investment Objectives and Policies.................................. 8
Fees and Expenses of the Series..................................... 9
Purchases........................................................... 13
Exchanges........................................................... 13
Redemption Procedures and Fees...................................... 13
Dividends and Distributions......................................... 13
Federal Income Tax Consequences of the Proposed Combination......... 14
Costs and Expenses.................................................. 14
Continuation of Shareholder Accounts................................ 14
PRINCIPAL RISK FACTORS................................................ 14
THE PLAN.............................................................. 14
Plan of Acquisition................................................. 14
Description of Securities to Be Issued.............................. 15
Reasons for the Proposed Combination................................ 15
Federal Income Tax Consequences..................................... 16
Capitalization...................................................... 16
MANAGEMENT'S DISCUSSION OF SERIES PERFORMANCE......................... 17
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS........ 18
ADDITIONAL INFORMATION ABOUT THE SERIES............................... 21
PROPOSALS OF SHAREHOLDERS............................................. 22
OTHER BUSINESS........................................................ 22
APPENDIX A: FORM OF PLAN OF ACQUISITION ............................... 22
4
INTRODUCTION AND VOTING INFORMATION
SPECIAL MEETING; VOTING
- -----------------------
We are furnishing this prospectus/information statement to you as a shareholder
of the Partners MidCap Blend Fund, a series of the Investors Fund, in connection
with a special meeting of the shareholders of the Partners MidCap Blend Fund to
be held on May 14, 2003. The purpose of the meeting is to vote on the Plan for
the Partners MidCap Blend Fund. A copy of the Plan is included as Appendix A.
The Plan provides for the combination of the Partners MidCap Blend Fund with the
MidCap Blend Fund which is also a series of Investors Fund, as more fully
described below. The prospectus/information statement is first being furnished
to shareholders on or about April 10, 2003.
THE BOARD OF DIRECTORS OF THE INVESTORS FUND HAS APPROVED THE PLAN AND
RECOMMENDS THAT THE SHAREHOLDERS OF THE PARTNERS MIDCAP BLEND FUND VOTE FOR THE
PLAN AND THE TRANSACTIONS WHICH IT CONTEMPLATES.
Shareholders of record of the Partners MidCap Blend Fund at the close of
business on April 7, 2003, the record date, are entitled to vote at the meeting.
As of the record date, the Partners MidCap Blend Fund had the following shares
outstanding and entitled to be voted.
OUTSTANDING
SHARE CLASS SHARES
----------- -----------
Advisors Preferred
Advisors Select
Preferred
Select
Institutional
Class J
Shareholders of the Partners MidCap Blend Fund are entitled to one vote for each
share of each Class held at the meeting. A quorum for the Partners MidCap Blend
Fund must be present at the meeting for the transaction of business. The holders
of record of one-third of the shares outstanding at the close of business on the
record date present at the meeting will constitute a quorum for the meeting. The
approval of the Plan by the Partners MidCap Blend Fund requires the affirmative
vote of a majority of all the votes entitled to be cast by shareholders of the
Partners MidCap Blend Fund. Abstentions and broker non-votes (votes from brokers
or nominees indicating that they have not received instructions from the
beneficial owners on an item for which the broker or nominee does not have
discretionary power) are counted toward a quorum but do not represent votes cast
for the Plan or any other issue. If the shareholders of the Partners MidCap
Blend Fund do not approve the Plan, the Board will consider possible alternative
arrangements, and Principal Management Corporation will continue to manage the
Partners MidCap Blend Fund.
Proxies of the shareholders of the Partners MidCap Blend Fund are not being
solicited because Principal Life owned a majority of the outstanding shares of
the Partners MidCap Blend Fund as of the record date, and is expected to be
present at the meeting and to vote in favor of approval of the Plans.
ADDITIONAL INFORMATION
- ----------------------
On April 7, 2003, the directors and officers of the Investors Fund together
owned less than 1% of each of the Partners MidCap Blend Fund's and the MidCap
Blend Fund's outstanding shares. Principal Life, Des Moines, Iowa, 50392, an
Iowa life insurance company and an affiliate of Principal Management
Corporation, the manager of the Funds (the "Manager"), owned of record and
beneficially, either directly or through subsidiaries, _____% of the outstanding
shares of the MidCap Blend Fund. The table below shows the percentage of the
outstanding shares of each Class of the Partners MidCap Blend Fund owned by
Principal Life on April 7, 2003 and based on those holdings, its percentage of
ownership at the effective time (3:00 p.m. C.D.T. on May 21, 2003):
5
PRINCIPAL LIFE'S
INTERNATIONAL PRINCIPAL LIFE'S
SMALLCAPFUND MIDCAP BLEND FUND
PERCENTAGE OWNERSHIP PERCENTAGE OWNERSHIP
SHARE CLASS ON APRIL 7, 2003 AT THE EFFECTIVE TIME
----------- --------------------- -----------------------
Advisors Preferred
Advisors Select
Preferred
Select
Institutional
Class J
The ultimate parent of Principal Life is Principal Financial Group, Inc.
As of April 7, 2003, the following shareholders owned 5% or more of the
outstanding shares of any Class of the Funds:
PERCENTAGE
NAME ADDRESS OF OWNERSHIP
---- -------- ------------
PARTNERS MIDCAP BLEND FUND - ADVISORS
SELECT CLASS
PARTNERS MIDCAP BLEND FUND - CLASS J
MIDCAP BLEND FUND - ADVISORS SELECT
CLASS
MIDCAP BLEND FUND - ADVISORS PREFERRED
CLASS
MIDCAP BLEND FUND - PREFERRED CLASS
The Investors Fund does not know of any other person who owned at the record
date, or will own at the effective time, of record or beneficially 5% or more of
the outstanding shares of any of the Series.
6
SUMMARY
The following is a summary of certain information contained or incorporated by
reference in this prospectus/information statement. It is qualified in its
entirety by the more detailed information appearing elsewhere or incorporated by
reference in this prospectus/information statement.
THE PLAN
- --------
You are being asked to approve the Plan, which provides for the combination of
the Partners MidCap Blend Fund with the MidCap Blend Fund. The Partners MidCap
Blend and MidCap Blend Fund are each a series of the Investors Fund. Under the
Plan, at the effective time on the closing date, the MidCap Blend Fund will
acquire all the assets and assume all the liabilities of the Partners MidCap
Blend Fund and issue to the Partners MidCap Blend Fund shares of its Preferred
Class, Advisors Preferred Class, Select Class, Advisors Select Class,
Institutional Class and Class J common stock having a value equal to the net
assets of the Partners MidCap Blend Fund attributable to each share class.
Immediately thereafter, the Partners MidCap Blend Fund will distribute all the
MidCap Blend Fund shares it receives to its shareholders who own the
corresponding class of the Partners MidCap Blend Fund shares and thereby redeem
all its outstanding shares. Each Partners MidCap Blend Fund shareholder will
receive MidCap Blend Fund shares equal in value to the shares of the
corresponding class of the Partners MidCap Blend Fund held by the shareholder at
the effective time. If the Plan is approved, the effective time will be 3:00
p.m. C.D.T. on June 30, 2003.
REASONS FOR THE PROPOSED COMBINATION
- ------------------------------------
The Partners MidCap Blend Fund has a relatively small amount of assets and has
experienced limited sales of shares. While the Partners MidCap Blend Fund has
been in existence only since March 1, 2001, its investment performance has been
relatively poor. For example, the investment performance of the Preferred share
class ranked in the 63rd, 91st, 90th and 95th percentile for the rolling
12-month period, ended March 31, June 30, September 30 and December 31, 2002 on
a net basis relative to all mutual funds in Morningstar's mid-cap blend
category. The likelihood that the Partners MidCap Blend Fund will achieve
significant asset levels in the foreseeable future is low. The Board for the
Investors Fund considered these and other factors, and determined that the
proposed Plan would be in the best interests of the Partners MidCap Blend Fund
and its shareholders, that the terms of the Plan are fair and reasonable and
that the interests of the shareholders of the Partners MidCap Blend Fund will
not be diluted as a result of the transactions contemplated by the Plan. The
Board believes that the Plan will provide shareholders of the Partners MidCap
Blend Fund with an investment in a mid-cap fund with a more favorable expense
ratio and better investment performance track record than the Partners MidCap
Blend Fund. The table below reflects the investment performance of the Partners
MidCap Blend Fund and the MidCap Blend Fund for the periods ended February 28,
2003.
TOTAL RETURN WITH MAXIMUM SALES CHARGE*
--------------------------------------------------------------------------------------------------------
ADVISORS ADVISORS
PREFERRED PREFERRED SELECT SELECT
SERIES CLASS CLASS CLASS CLASS
------ ---------------------------------------- -------------- ------------------- -------------------
SINCE SINCE SINCE SINCE
1-YR. INCEPTION** 1-YR. INCEPTION** 1-YR. INCEPTION** 1-YR. INCEPTION**
----- ----------- ----- ----------- ----- ----------- ----- -----------
MidCap Blend Fund -11.52 -5.04 -11.80 -5.35 -11.63 -5.19 -11.96 -5.54
Partners MidCap Blend
Fund -28.14 -18.23 -28.34 -18.48 -28.28 -18.35 -28.48 -18.60
TOTAL RETURN WITH MAXIMUM SALES CHARGE*
----------------------------------------
INSTITUTIONAL
SERIES CLASS CLASS J
------ ---------------- -----------------
SINCE 1-YR. SINCE
1-YR. INCEPTION*** ----- INCEPTION***
----- ------------ ------------
MidCap Blend Fund -11.28 -5.06 -13.07 -5.93
Partners MidCap Blend Fund -27.97 -18.05 -29.33 -18.72
*No front-end or back-end sales charge applies to any of the share classes, except Class J shares. A contingent deferred sales
charge of 1.00% is charged on redemptions of Class J shares within 18 months of their purchase.
**Inception Date of December 6, 2000 for MidCap Blend Fund and March 1, 2001 for Partners MidCap Blend Fund.
***Inception Date of March 1, 2001.
7
INVESTMENT OBJECTIVES AND POLICIES
- ----------------------------------
The primary investment objective of the MidCap Blend Fund and the Partners
MidCap Blend Fund is to seek long-term growth of capital. Each Fund invests at
least 80% of its assets in companies having medium market capitalizations. The
Partners MidCap Blend Fund defines such companies as companies with market
capitalizations similar to companies in the S&P MidCap 400 Index (ranging
between $145 million and $7.3 billion as of December 31, 2002). The MidCap Blend
Fund defines medium-sized companies as companies with market capitalizations
similar to companies in the Russell MidCap Index (ranging between $194 million
and $13.276 billion as of December 31, 2002).
INVESTMENT ADVISORY SERVICES
- ----------------------------
The Manager serves as investment advisor to the Investors Fund. The Manager has
entered into a sub-advisory agreement with Morgan Stanley Asset Management
("MSAM") to provide investment advisory services to the Partners MidCap Blend
Fund. The Manager has entered into a sub-advisory agreement with Principal
Global Investors, LLC ("PGI") to provide investment advisory services to the
MidCap Blend Fund. PGI is a directly wholly-owned subsidiary of Principal Life
and an affiliate of the Manager.
Under the sub-advisory agreements, the Manager compensates PGI by paying it a
portion of the fee the Manager receives from each Fund. The Manager pays PGI a
smaller percentage of the fee it receives from the MidCap Blend Fund compared to
the percentage it pays to MSAM from fees it receives from the Partners MidCap
Blend Fund. The Manager also currently pays a portion of the expenses of the
Class J shares of each of the Funds. If the Plan is approved, the combined
assets of the Funds will be sub-advised by PGI, the Manager will retain a larger
portion of the advisory fees it will receive with respect to the assets formerly
owned by the Partners MidCap Blend Fund, and the overall amount of the Manager's
expense reimbursement for Class J shares will be reduced.
FEES AND EXPENSES OF THE SERIES
- -------------------------------
This table describes the fees and expenses that you may pay if you buy and hold
shares of either of the series.
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
-----------------------------------------
ADVISORS ADVISORS
PREFERRED PREFERRED SELECT SELECT INSTITUTIONAL
CLASS CLASS CLASS CLASS CLASS CLASS J
--------- --------- ------ -------- ------------- ------------
Maximum sales charge imposed on purchases
(as a % of offering price) None None None None None None
Maximum Contingent Deferred Sales Charge
("CDSC") (as a % of dollars subject to
charge) None None None None None 1.00/(1)/
Redemption or Exchange Fee None None None None None 1.00/(2)/
// // / / /
///(1)/A contingent deferred sales charge of 1% applies on certain redemptions of shares made within 18 months after they are
purchased.//
///(2)/
Redemption fees or exchange fees are charged on redemptions or exchanges of $50,000 or more of shares redeemed within 30 days
after they are purchased.
ONE-TIME FEES
. Class J shares have no initial sales charge but may be subject to a
CDSC. If you sell (redeem) shares and the CDSC is imposed, it will
reduce the amount of sales proceeds.
. A redemption fee or exchange fee of 1.00% is charged on redemptions or
exchanges of Class J shares of $50,000 or more if the shares were
purchased within 30 days of the redemption or exchange. The fee is
calculated as a percentage of market value at the time the shares are
redeemed or exchanged.
8
The operating expenses attributable to each share class of each Fund (as a
percentage of the average daily net assets) for the fiscal year ended October
31, 2002 were as follows:
PARTNERS MIDCAP BLEND FUND
-----------------------------------------------------------------------
ADVISORS ADVISORS
PREFERRED PREFERRED SELECT INSTITUTIONAL
FUND OPERATING EXPENSES CLASS CLASS SELECT CLASS* CLASS CLASS CLASS J**
----------------------- --------- --------- ------------- -------- ------------- ---------
Management Fees 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
12b-1 Fees 0.00 0.25 0.10 0.30 0.00 0.50
Other Expenses 0.26 0.32 0.28 0.45 0.00 1.71
---- ---- ---- ---- ---- ----
Total Operating Expenses 1.26% 1.57% 1.38% 1.75% 1.00% 3.21%
MIDCAP BLEND FUND
----------------------------------------------------------------------------------------
ADVISORS ADVISORS
PREFERRED PREFERRED SELECT SELECT INSTITUTIONAL
FUND OPERATING EXPENSES CLASS CLASS CLASS* CLASS CLASS
----------------------- --------- --------- ------ -------- -------------
Management Fees 0.65% 0.65% 0.65% 0.65% 0.65%
12b-1 Fees 0.00 0.25 0.10 0.30 0.00
Other Expenses 0.26 0.32 0.28 0.45 0.00
---- ---- ---- ---- ----
Total Operating Expenses 0.91% 1.22% 1.03% 1.40% 0.65%
*A Distribution Plan and Agreement was adopted by the Investors Fund pursuant to Rule 12b-1 for the Select Class shares effective
June 10, 2002.
**The Manager has voluntarily agreed to limit expenses paid by the Class J shares of the MidCap Blend Fund and the Partners MidCap
Blend Fund. The Manager intends to pay expenses normally payable by Class J shares of the MidCap Blend Fund and the Partners
MidCap Blend Fund through the period ending February 29, 2004. The effect of the expense limitation is to reduce each Fund's Class
J shares annual operating expenses. The limitation will maintain a total level of operating expenses for Class J shares of the
MidCap Blend Fund and the Partners MidCap Blend Fund (expressed as a percent of average net assets attributable to Class J shares
on an annualized basis) not to exceed:
. 1.95% for the Partners MidCap Blend Fund through February 28, 2004.
. 1.60% for the MidCap Blend Fund through February 28, 2003, and 1.70% thereafter through February 29, 2004.
FUND OPERATING EXPENSES CLASS J**
----------------------- ---------
Management Fees 0.65%
12b-1 Fees 0.50
Other Expenses 1.12
----
Total Operating Expenses 2.27%
*A Distribution Plan and Agreement was adopted by the Investors Fund pursuant to Rule 12b-1 for the Select Class shares effective
June 10, 2002.
**The Manager has voluntarily agreed to limit expenses paid by the Class J shares of the MidCap Blend Fund and the Partners MidCap
Blend Fund. The Manager intends to pay expenses normally payable by Class J shares of the MidCap Blend Fund and the Partners
MidCap Blend Fund through the period ending February 29, 2004. The effect of the expense limitation is to reduce each Fund's Class
J shares annual operating expenses. The limitation will maintain a total level of operating expenses for Class J shares of the
MidCap Blend Fund and the Partners MidCap Blend Fund (expressed as a percent of average net assets attributable to Class J shares
on an annualized basis) not to exceed:
. 1.95% for the Partners MidCap Blend Fund through February 28, 2004.
. 1.60% for the MidCap Blend Fund through February 28, 2003, and 1.70% thereafter through February 29, 2004.
The MidCap Blend Fund's expenses, assuming implementation of the Plan on May 21,
2003, as a percentage of average daily net assets are as follows:
MIDCAP BLEND FUND
----------------------------------------------------------------------------------------
ADVISORS ADVISORS
FUND OPERATING PREFERRED PREFERRED SELECT SELECT INSTITUTIONAL
EXPENSES CLASS CLASS CLASS CLASS CLASS
-------------- --------- --------- ------ -------- -------------
Management Fees 0.65% 0.65% 0.65% 0.65% 0.65%
12b-1 Fees 0.00 0.25 0.10 0.30 0.00
Other Expenses 0.26 0.32 0.28 0.45 0.00
---- ---- ---- ---- ----
Total Operating
Expenses 0.91% 1.22% 1.03% 1.40% 0.65%
*
The Manager has voluntarily agreed to limit expenses paid by the Class J shares of the MidCap Blend Fund. The Manager intends to
pay expenses normally payable by Class J shares of the MidCap Blend Fund through the period ending February 29, 2004. The effect
of the expense limitation is to reduce the MidCap Blend Fund's Class J shares annual operating expenses. The limitation will
maintain a total level of operating expenses for Class J shares of the MidCap Blend Fund (expressed as a percent of average net
assets attributable to Class J shares on an annualized basis) not to exceed 1.70%.
FUND OPERATING
EXPENSES CLASS J*
-------------- --------
Management Fees 0.65%
12b-1 Fees 0.50
Other Expenses 1.08
----
Total Operating 2.23%
Expenses
*
The Manager has voluntarily agreed to limit expenses paid by the Class J shares of the MidCap Blend Fund. The Manager intends to
pay expenses normally payable by Class J shares of the MidCap Blend Fund through the period ending February 29, 2004. The effect
of the expense limitation is to reduce the MidCap Blend Fund's Class J shares annual operating expenses. The limitation will
maintain a total level of operating expenses for Class J shares of the MidCap Blend Fund (expressed as a percent of average net
assets attributable to Class J shares on an annualized basis) not to exceed 1.70%.
9
The following is an example of the effect of the operating expenses of each of
the Funds as of October 31, 2002. The examples assume (1) a 5% annual return,
and (2) each Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, you would pay the following expenses on a $10,000
investment in shares of each Fund, based upon these assumptions:
NUMBER OF YEARS YOU OWN YOUR PREFERRED CLASS SHARES
----------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ ---------------
MidCap Blend Fund $ 93 $290 $504 $1,120
Partners MidCap Blend
Fund 128 400 692 1,523
NUMBER OF YEARS YOU OWN YOUR ADVISORS PREFERRED CLASS SHARES
-------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------- -------------- -------------- -----------------
MidCap Blend Fund $124 $387 $670 $1,477
Partners MidCap Blend
Fund 160 496 855 1,867
NUMBER OF YEARS YOU OWN YOUR SELECT CLASS SHARES
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ----------- ----------- --------------
MidCap Blend Fund $105 $328 $569 $1,259
Partners MidCap Blend
Fund 140 437 755 1,657
NUMBER OF YEARS YOU OWN YOUR ADVISORS SELECT CLASS SHARES
----------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------ ------------- ------------- ----------------
MidCap Blend Fund $143 $443 $766 $1,680
Partners MidCap Blend
Fund 178 551 949 2,062
NUMBER OF YEARS YOU OWN YOUR INSTITUTIONAL CLASS SHARES
--------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------ ------------- ------------- ----------------
MidCap Blend Fund $ 66 $208 $362 $ 810
Partners MidCap Blend
Fund 102 318 552 1,225
IF YOU SELL YOUR CLASS J SHARES
--------------------------------------------
NUMBER OF YEARS YOU OWN YOUR CLASS J SHARES
--------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ----------- ----------- --------------
MidCap Blend Fund $230 $709 $1,215 $2,605
Partners MidCap Blend
Fund 426 989 1,678 3,512
IF YOU DO NOT SELL YOUR CLASS J SHARES
--------------------------------------------
NUMBER OF YEARS YOU OWN YOUR CLASS J SHARES
--------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ----------- ----------- --------------
MidCap Blend Fund $230 $709 $1,215 $2,605
Partners MidCap Blend
Fund 324 989 1,678 3,512
10
The following is an example of the effect of the operating expenses of the
MidCap Blend Fund, assuming implementation of the Plans on May 21, 2003. The
examples assume (1) a 5% annual return, and (2) the Fund's operating expenses
remain the same. Although your actual costs may be higher or lower, you would
pay the following expenses on a $10,000 investment in shares of the MidCap Blend
Fund, based upon these assumptions:
NUMBER OF YEARS YOU OWN YOUR PREFERRED CLASS SHARES
----------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ------------ ------------ --------------
MidCap Blend Fund $93 $290 $504 $1,120
NUMBER OF YEARS YOU OWN YOUR ADVISORS PREFERRED CLASS SHARES
-------------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------- -------------- -------------- -----------------
MidCap Blend Fund $124 $387 $670 $1,477
NUMBER OF YEARS YOU OWN YOUR SELECT CLASS SHARES
-------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ----------- ----------- --------------
MidCap Blend Fund $105 $328 $569 $1,259
NUMBER OF YEARS YOU OWN YOUR ADVISORS SELECT CLASS SHARES
----------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------ ------------- ------------- ----------------
MidCap Blend Fund $143 $443 $766 $1,680
NUMBER OF YEARS YOU OWN YOUR INSTITUTIONAL CLASS SHARES
--------------------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------ ------------- ------------- ----------------
MidCap Blend Fund $66 $208 $362 $810
IF YOU SELL YOUR CLASS J SHARES
--------------------------------------------
NUMBER OF YEARS YOU OWN YOUR CLASS J SHARES
--------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ----------- ----------- --------------
MidCap Blend Fund $329 $697 $1,195 $2,565
IF YOU DO NOT SELL YOUR CLASS J SHARES
--------------------------------------------
NUMBER OF YEARS YOU OWN YOUR CLASS J SHARES
--------------------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ----------- ----------- --------------
MidCap Blend Fund $226 $697 $1,195 $2,565
PURCHASES
- ---------
Shares of the MidCap Blend Fund and the Partners MidCap Blend Fund are offered
for sale through Princor Financial Services Corporation ("Princor"), a
broker-dealer that is also the principal underwriter for the Investors Fund, or
other dealers which it selects.
ONGOING FEES
- ------------
The MidCap Blend Fund and the Partners MidCap Blend Fund pay ongoing fees to the
Manager. Some of the share classes of each Fund also pay on-going fees to
Princor and others who provide services to the funds. These fees reduce the
value of each share you own.
11
DISTRIBUTION (12B-1) FEES
- -------------------------
The Investors Fund has adopted a Distribution Plan under Rule 12b-1 of the
Investment Company Act of 1940 for its Advisors Preferred, Advisors Select,
Select and Class J shares for the MidCap Blend Fund and the Partners MidCap
Blend Fund. Under each Distribution Plan, each Fund pays a fee to Princor based
on the average daily net asset values attributable to these share classes. These
ongoing fees pay expenses relating to distribution of shares of the four share
classes referred to above and for services Princor and other selling dealers
provide to shareholders of those classes of shares. Because they are ongoing,
the fees may, over time, exceed other types of sales charges such as front-end
charges or contingent deferred sales charges.
12B-1 FEE
---------
Advisors Preferred Class Shares 0.25%
Advisors Select Class Shares... 0.30%
Select Class Shares............ 0.10%
Class J Shares................. 0.50%
EXCHANGES
- ---------
Shares of the MidCap Blend Fund and each Partners MidCap Blend Fund may be
exchanged, without payment of a sales charge or CDSC, for shares of the same
class of other series of the Investors Fund. If Class J shares are exchanged for
Class J shares of another series, the shares acquired by the exchange will be
subject to the applicable CDSC imposed by the new series; however, the holding
period of the Class J shares exchanged is added to the holding period of the
acquired Class J shares for purposes of determining the applicable charge.
REDEMPTION PROCEDURES AND FEES
- ------------------------------
Shares of the MidCap Blend Fund and the Partners MidCap Blend Fund may be
redeemed at a price equal to the net asset value of the shares next computed
following the receipt of a request for redemption in proper form with respect to
Class J shares, the amount you receive will be reduced by any applicable CDSC or
redemption fee.
Generally, the sale proceeds are sent to you on the next day following the day
you place the sell order.
DIVIDENDS AND DISTRIBUTIONS
- ---------------------------
The MidCap Blend Fund and the Partners MidCap Blend Fund each pay its net
investment income on an annual basis. Payments are made to shareholders of
record on the business day prior to the payment date. The payment date is
December 19th (or previous business day).
Net realized capital gains, if any, are distributed annually. Generally the
distribution is made on the second business day of December. Payments are made
to shareholders of record on the business day prior to the payable date. Capital
gains the Funds distribute to shareholders may be taxable at different rates,
depending on the length of time that the Fund holds its assets.
Immediately prior to the reorganization, the MidCap Blend Fund and the Partners
MidCap Blend Fund will pay a dividend or dividends which, together with all
previous dividends, will have the effect of distributing to their respective
shareholders all of their investment company taxable income for taxable years
ending on or prior to the reorganization (computed without regard to any
deduction for dividends paid) and all of its net capital gains, if any, realized
in taxable years ending on or prior to the reorganization (after reduction for
any available capital loss carry forward). Such dividends will be included in
the taxable income each Fund distribute to its shareholders.
FEDERAL INCOME TAX CONSEQUENCES OF THE PROPOSED COMBINATION
- -----------------------------------------------------------
The combination will be a tax-free "reorganization" under Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"). In the opinion of tax
counsel to the Investors Fund, no gain or loss will be recognized by either Fund
or either Fund's shareholders in connection with the combination, and the tax
cost basis of the MidCap Blend Fund shares received by shareholders of the
Partners MidCap Blend Fund will equal the tax cost basis of their shares in the
Partners MidCap Blend Fund and their holding period of the MidCap Blend Fund
shares will include the time during which the shareholders held the Partners
MidCap Blend Fund shares.
12
COSTS AND EXPENSES
- ------------------
The Manager will bear all out-of-pocket fees and expenses incurred by the Funds
in connection with the transactions contemplated by the Plan.
CONTINUATION OF SHAREHOLDER ACCOUNTS
- ------------------------------------
At the effective time of the Plan, you will cease to be a shareholder of the
Partners MidCap Blend Fund and will become a shareholder of the MidCap Blend
Fund owning the same class of shares of the MidCap Blend Fund having the same
value as the investment you had in the Partners MidCap Blend Fund at the
effective time.
PRINCIPAL RISK FACTORS
The primary investment objective of the MidCap Blend Fund and the Partners
MidCap Blend Fund is to seek long-term growth of capital. Each series invests
primarily in common stocks of U.S. companies. Each series invests at least 80%
of its assets in companies having medium market capitalizations. The Partners
MidCap Blend Fund defines such companies as companies with market
capitalizations similar to companies in the S&P MidCap 400 Index (ranging
between $145 million and $7.3 billion as of December 31, 2002). The MidCap Blend
Fund defines medium-sized companies as companies with market capitalizations
similar to companies in the Russell MidCap Index (ranging between $194 million
and $13.276 billion as of December 31, 2002). Each series may invest up to 25%
of its assets in foreign securities. Thus, the risks of investing in each series
are the same. As with all mutual funds, as the values of the assets of each
series rise or fall, the share prices change for each. If you sell your shares
when their value is less than the price you paid, you will lose money.
MAIN RISKS
Because it purchases equity securities, each Fund is subject to the risk that
stock prices will fall over short or extended periods of time. Individual
companies may report poor results or be negatively affected by industry and/or
economic trends and developments. The price of securities issued by such
companies may suffer a decline in response. These factors contribute to price
volatility, which is the principal risk of investing of either series.
The medium capitalization companies in which each series invests may be more
vulnerable to adverse business or economic events than larger, more established
companies. In particular, these mid-size companies may pose greater risk due to
narrow product lines, limited financial resources, less depth in management or a
limited trading market for their securities.
Foreign stocks carry risks that are not generally found in stocks of U.S.
companies. These include the risk that a foreign security could lose value as a
result of political, financial and economic events in foreign countries. In
addition, foreign securities may be subject to securities regulators with less
stringent accounting and disclosure standards than are required by U.S.
companies.
In addition, each series is subject to the risk that its principal market
segment, medium capitalization stocks, may underperform compared to other market
segments or to the equity markets as a whole. Because different types of stocks
tend to shift to other market segments or to the equity markets as a whole.
Because different types of stocks tend to shift in and out of favor depending on
market and economic conditions, the Fund's performance may sometimes be lower or
higher than that of other types of funds.
THE PLAN
PLAN OF ACQUISITION
- -------------------
The terms of the Plan are summarized below. The summary is qualified in its
entirety by reference to the Plan, a copy of which is attached as Appendix A.
Under the Plan, the MidCap Blend Fund will acquire all the assets and assume all
the liabilities of the Partners MidCap Blend Fund and will issue to the Partners
MidCap Blend Fund the number of shares of Common Stock of each share class of
the MidCap Blend Fund that has a net asset value equal to the net asset value
attributable to each corresponding share class of the Partners MidCap Blend
Fund. We expect that the closing date will be June 30, 2003, assuming
shareholder approval of the Plan, and that the effective time will be the close
of regular trading on the NYSE
13
at 3:00 P.M., Central Daylight Time, on that date. The series will determine
their net asset values as of the effective time using the procedures described
in the Investors Fund's prospectus (the procedures applicable to the MidCap
Blend Fund and the Partners MidCap Blend Fund are indentical). The MidCap Blend
Fund will issue to the Partners MidCap Blend Fund a number of shares of each
share class equal to the value of the net assets of each corresponding share
class of the Partners MidCap Blend Fund outstanding at the effective time. The
Partners MidCap Blend Fund will be managed such that at the effective time it
will hold only cash or other securities that are eligible investments for the
MidCap Blend Fund.
Immediately after the effective time, the Partners MidCap Blend Fund will
distribute to you its MidCap Blend Fund shares of the same class as the Partners
MidCap Blend Fund shares you own in exchange for all your Partners MidCap Blend
Fund shares of that class. You will receive shares of the MidCap Blend Fund that
are equal in value to the shares of the Partners MidCap Blend Fund that you
surrender in the exchange. In connection with the exchange, the MidCap Blend
Fund will credit on its books an appropriate number of its shares to the account
of each Partners MidCap Blend Fund shareholder, and the Partners MidCap Blend
Fund will cancel on its books all its shares registered to the account of that
shareholder. Any outstanding certificate for Partners MidCap Blend Fund shares
that is not surrendered will be deemed to represent the number of MidCap Blend
Fund shares for which the Partners MidCap Blend Fund shares have been exchanged.
After the effective time, the Partners MidCap Blend Fund will dissolve in
accordance with applicable law.
The consummation of the transactions contemplated by the Plan for the Partners
MidCap Blend Fund is subject to the approval of the Plan by the shareholders of
the Partners MidCap Blend Fund. The Plan may be amended, but no amendment may be
made to the Plan which in the opinion of the Board of Directors would materially
adversely affect the interests of the shareholders of the Partners MidCap Blend
Fund after the shareholders of the Partners MidCap Blend Fund have approved the
Plan. The Board of Directors may terminate the Plan at any time before the
effective time if it believes that consummation of the transactions contemplated
by the Plan would not be in the best interests of the shareholders.
The Manager will pay all fees and out-of-pocket expenses incurred by the Funds
in connection with the transactions contemplated by the Plan.
DESCRIPTION OF SECURITIES TO BE ISSUED
- --------------------------------------
The share classes of the MidCap Blend Fund are shares of common stock, par value
$.01 per share. They have the same rights with respect to the MidCap Blend Fund
as the share classes of the Partners MidCap Blend Fund have with respect to the
Partners MidCap Blend Fund. Each share is entitled to one vote and has equal
rights with every other share as to dividends, earnings, voting, assets and
redemption. There is no cumulative voting for directors. Shares are fully paid
and non-assessable, have no preemptive or conversion rights and are freely
transferable. Each fractional share has proportionately the same rights as are
provided for a full share. As of April 7, 2003, the MidCap Blend Fund had the
following number of shares of each class outstanding:
NUMBER OF OUTSTANDING
CLASS SHARES
----- ---------------------
Preferred
Advisors Preferred
Select
Advisors Select
Institutional
Class J
REASONS FOR THE PROPOSED COMBINATION
- ------------------------------------
The Partners MidCap Blend Fund has a relatively small amount of assets and has
experienced limited sales of shares. While the Partners MidCap Blend Fund has
been in existence only since March 1, 2001, its investment performance has been
relatively poor. For example, the investment performance of the Preferred share
class ranked in the 63rd, 91st, 90th and 95th percentile for the rolling
12-month period, ended March 31, June 30, September 30 and December 31, 2002 on
a net basis relative to all mutual funds in Morningstar's mid-cap blend
category. The likelihood that the Partners MidCap Blend Fund will achieve
significant asset levels in the foreseeable future is low. The Board for the
Partners MidCap Blend Fund considered these and other factors and determined
that the proposed Plan would be in the best interests of the Partners MidCap
Blend Fund and its shareholders, that the terms of the Plan are fair and
reasonable and that the interests of the shareholders of the Partners MidCap
Blend Fund will not be diluted as a result of the transactions contemplated by
the Plan.
14
The Plan has been approved by the Board of Directors of the MidCap Blend Fund
and the Partners MidCap Blend Fund, including all of the directors who are not
"interested persons" as defined in Section 2(a)(19) of the Investment Company
Act. In approving the Plan, the Boards considered the following factors, among
others: (1) possible alternatives to the Plan; (2) the terms and conditions of
the Plan and whether its implementation would result in dilution of shareholder
interests or involve overreaching by any person concerned; (3) the advantages to
the Partners MidCap Blend Fund's shareholders of investing in a larger asset
pool with greater diversification; (4) any direct or indirect fees or expenses
incurred by the Funds as a result of the Plan; (5) expense ratios and available
information regarding the fees and expenses of the Funds, including any change
in fees or expenses to be paid or borne by shareholders of the Partners MidCap
Blend Fund (direct or indirectly) as a result of the Plan; (6) comparative
investment performances of the Funds; (7) the direct or indirect federal income
tax consequences of the Plan to shareholders of the Partners MidCap Blend Fund;
(8) the continuity of or changes in services to be provided to shareholders
following implementation of the Plan; and (9) the compatibility of the
investment objectives and policies of the Funds and changes with respect to the
investment objectives and policies of the Partners MidCap Blend Fund that will
result from the Plan.
FEDERAL INCOME TAX CONSEQUENCES
- -------------------------------
To be considered a tax-free "reorganization" under Section 368 of the Code, a
reorganization must exhibit a continuity of business enterprise. Because the
MidCap Blend Fund will use a portion of the Partners MidCap Blend Fund's assets
in its business and will continue the Partners MidCap Blend Fund's historic
business, the combination of the Partners MidCap Blend Fund with the MidCap
Blend Fund will exhibit a continuity of business enterprise. Therefore, the
combination will be considered a tax-free "reorganization," under applicable
provisions of the Code. In the opinion of tax counsel to the Investors Fund, no
gain or loss will be recognized by either of the Funds or their shareholders in
connection with the combination, the tax cost basis of the MidCap Blend Fund
shares received by shareholders of the Partners MidCap Blend Fund will equal the
tax cost basis of their shares in the Partners MidCap Blend Fund, and their
holding periods for the MidCap Blend Fund shares will include their holding
periods for the Partners MidCap Blend Fund shares.
As of October 31, 2002, the Partners MidCap Blend Fund had an accumulated
capital loss carryforward in the amount of approximately $1,132,000. After the
reorganization, this loss will be available to the MidCap Blend Fund to offset
its capital gains, although the amount of offsetting losses available in any
given year may be limited. As a result of this limitation, it is possible that
the MidCap Blend Fund may not be able to use these losses as rapidly as the
Partners MidCap Blend Fund might have, and part of these losses may not be
useable at all. The ability of the MidCap Blend Fund to utilize the accumulated
capital loss carryforward in the future depends upon a variety of factors that
cannot be known in advance, including the existence of capital gains against
which these losses may be offset. In addition, the benefits of any capital loss
carryfoward currently are available only to shareholders of the Partners MidCap
Blend Fund. After the reorganization, however, these benefits will inure to the
benefit of all shareholders of the MidCap Blend Fund.
The foregoing is only a summary of the principal federal income tax consequences
of the combination and should not be considered to be tax advice. There can be
no assurance that the Internal Revenue Service will concur on all or any of the
issues discussed above. You may wish to consult with your own tax advisers
regarding the federal, state, and local tax consequences with respect to the
foregoing matters and any other considerations which may apply in your
particular circumstances.
CAPITALIZATION
- --------------
The following table shows the capitalization of the Partners MidCap Blend Fund
and the MidCap Blend Fund separately, as of February 28, 2003, and combined in
the aggregate (unaudited), as of that date, giving effect to the Plan:
PARTNERS MIDCAP BLEND FUND
-----------------------------------------------------------------------
ADVISORS ADVISORS
PREFERRED PREFERRED SELECT INSTITUTIONAL
CLASS CLASS CLASS SELECT CLASS CLASS CLASS J
--------- --------- -------- ------------ ------------- -------
Net Assets $588,447 $654,511 $624,940 $557,086 $9,191,151 $3,083,721
Net Asset Value Per
Share $ 6.65 $ 6.69 $ 6.63 $ 6.67 $ 6.72 $ 6.61
Shares Outstanding 88,543 97,860 94,255 83,500 1,367,501 466,728
15
MIDCAP BLEND FUND
----------------------------------------------------------------------------
ADVISORS ADVISORS
PREFERRED PREFERRED SELECT INSTITUTIONAL
CLASS CLASS CLASS SELECT CLASS CLASS CLASS J
--------- --------- -------- ------------ ------------- -------
Net Assets $2,092,722 $1,370,272 $1,121,101 $1,111,173 $8,801 $17,034,167
Net Asset Value Per
Share $ 8.89 $ 8.90 $ 8.88 $ 8.89 $ 8.83 $ 8.82
Shares Outstanding 235,433 153,998 126,283 125,004 997 1,931,610
COMBINED MIDCAP BLEND FUND
----------------------------------------------------------------------------
ADVISORS ADVISORS
PREFERRED PREFERRED SELECT INSTITUTIONAL
CLASS CLASS CLASS SELECT CLASS CLASS CLASS J
--------- --------- -------- ------------ ------------- -------
Net Assets $2,681,219 $2,024,783 $1,746,041 $1,668,259 $9,199,952 $20,117,888
Net Asset Value Per
Share $ 8.89 $ 8.90 $ 8.88 $ 8.89 $ 8.83 $ 8.82
Shares Outstanding 301,625 227,538 196,659 187,668 1,041,897 2,281,238
MANAGEMENT'S DISCUSSION OF MIDCAP BLEND FUND PERFORMANCE
The following discussion relates to the performance of the MidCap Blend Fund
during its most recent fiscal year, which ended October 31, 2002.
The Principal Investors Fund - MidCap Blend Fund outperformed the Russell Midcap
Index for the one-year period ended October 31, 2002, returning -2.95%, compared
to -8.02% for the Index.
The Fund benefited from solid stock selection in the technology, financial, and
health care sectors, and these sectors accounted for the majority of the Fund's
outperformance over the Index. Although the average technology stock in the
Russell Midcap Index was down nearly 40%, the Fund avoided owning many of these
companies. In the financial sector, the Fund benefited from owning dominant
companies like Sallie Mae and AFLAC that were up over 20%. In the health care
sector, the Fund avoided many biotech companies that were down as much as 60%
and instead owned companies like Boston Scientific, which was up more than 50%
due to its development of a better stent to open blocked arteries.
We are optimistic about the Fund's prospects. The companies in the Fund's
portfolio have returns on equity and profit margins that are much higher than
the companies in the Index, which makes the companies in the portfolio superior
businesses. These companies also have a price/earnings ratio less than that of
the companies in the Index. We believe that superior businesses that are selling
at lower valuations are a great combination.
The strategy of the Fund continues to view equity investments as long-term
ownership stakes in operating businesses. The economic worth of a company is
determined by the future free cash flows that it will produce for its owners. We
believe that by purchasing companies at a discount to their economic worth we
will generate excess returns. When examining companies, we focus on companies
with competitive advantages that will lead to sustainable growth.
1) MORNINGSTAR MID-CAP BLEND CATEGORY CONSISTS OF MID-CAP BLEND FUNDS
THAT TYPICALLY INVEST IN STOCKS OF VARIOUS SIZES AND MIXED
CHARACTERISTICS, GIVING IT A MIDDLE-OF-THE ROAD PROFILE. MOST SHY AWAY
FROM HIGH-PRICED GROWTH STOCKS, BUT AREN'T SO PRICE-CONSCIOUS THAT
THEY LAND IN VALUE TERRITORY. 2) RUSSELL MIDCAP INDEX IS AN INDEX THAT
MEASURES THE PERFORMANCE OF THE 800 SMALLEST COMPANIES IN THE RUSSELL
1000 INDEX.
GROWTH OF $10,000
Cumulative Returns
as of October 31, 2002
Class 1 Year Life of Fund*
Advisors Preferred -2.78% -5.62%
Advisors Select -2.95% -5.81%
J -4.00% -6.26%
Institutional -2.23% -5.43%
Preferred -2.47% -5.30%
Select -2.59% -5.47%
Standard & Morningstar
Poor's MidCap Russell MidCap Mid-Cap Blend MidCap Blend Fund,
400 Index Index Category Advisors Select
10 10 10 10
"2001" 9.47 9.008 9.709 8.824
"2002" 9.015 8.286 9.327 8.564
Note: Past performance is not predictive of future performance.
The performance of Advisors Preferred, Preferred, Select, Institutional,
and Class J shares will vary from the performance of Advisors Select
shares based on the differences in sales charges and fees. The returns
shown do not reflect taxes, if any, that a shareholder would pay on Fund
distributions or on the redemption of Fund shares.
* The inception date of the Institutional Class and Class J shares was
March 1, 2001. The Advisors Preferred, Advisors Select, Preferred
and Select Classes inception was December 6, 2000.
LOGO
16
2) S&P MIDCAP 400 INDEX INCLUDES APPROXIMATELY 10% OF THE CAPITALIZATION OF
U.S. EQUITY SECURITIES. THESE ARE COMPRISED OF STOCKS IN THE MIDDLE
CAPITALIZATION RANGE. ANY MID-SIZED STOCKS ALREADY INCLUDED IN THE S&P 500 ARE
EXCLUDED FROM THIS INDEX.
COMPARISON OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
The investment objective of each Fund is fundamental and certain investment
restrictions which are designated as such in each Fund's prospectus or Statement
of Additional Information are fundamental policies that may not be changed
without approval by the holders of the lesser of: (i) 67% of the Fund's shares
present or represented at a shareholder's meeting at which the holders of more
than 50% of such shares are present or represented by proxy; or (ii) more than
50% of the outstanding shares of the Fund. All other investment policies and
restrictions are not fundamental and may be changed by the Investors Fund Board
of Directors without shareholder approval.
MIDCAP BLEND FUND
- -----------------
The MidCap Blend Fund seeks long-term growth of capital.
MIDCAP BLEND FUND STRATEGY
The MidCap Blend Fund invests primarily in common stocks and other equity
securities of medium capitalization companies. Under normal market conditions,
the MidCap Blend Fund invests at least 80% of its assets in common stocks of
companies with medium market capitalizations (those with market capitalizations
similar to companies in the Russell MidCap Index) at the time of purchase.
Market capitalization is defined as total current market value of a company's
outstanding common stock.
In selecting securities for investment, the Sub-Advisor, PGI, looks at stocks
with value and/or growth characteristics and constructs an investment portfolio
that has a "blend" of stocks with these characteristics. In managing the assets
of the MidCap Blend Fund, PGI does not have a policy of preferring one of these
categories to the other. The value orientation emphasizes buying stocks at less
than their inherent value and avoiding stocks of companies whose potential for
growth of capital and earnings is expected to be above average.
PGI considers the quality and price of individual issuers rather than
forecasting stock market trends in its selection of individual securities.
Selection is based on fundamental analysis of a company relative to other
companies with the focus being on PGI's estimation of forward-looking rates of
return. Up to 25% of the MidCap Blend Fund's assets may be invested in foreign
securities.
PGI focuses its stock selections on established companies that it believes have
a sustainable competitive advantage. PGI constructs a portfolio that is
"benchmark aware" in that it is sensitive to the sector (companies with similar
characteristics) and security weightings of its benchmark. However, the MidCap
Blend Fund is actively managed and prepared to over- and/or under-weight sectors
and industries differently from the benchmark.
PARTNERS MIDCAP BLEND FUND
- --------------------------
The Partners MidCap Blend Fund seeks long-term growth of capital.
PARTNERS MIDCAP BLEND FUND STRATEGY
Under normal market conditions, the Partners MidCap Blend Fund invests at least
80% of its assets in common stocks of companies with medium market
capitalizations (those with market capitalizations similar to companies in the
S&P MidCap 400 Index) at the time of purchase. Market capitalization is defined
as total market value of a company's outstanding stock.
MSAM, the Sub-Advisor, employs a strategy that uses a multi-factor approach to
construct portfolios. This approach allows MSAM to strike a balance between the
valuation of a company's shares and its long-term growth prospects. The value
orientation emphasizes buying stocks at less than their intrinsic investment
value and avoiding stocks whose price has been unjustifiably built up. The
growth orientation emphasizes buying stocks of companies whose potential for
growth of capital and earnings is expected to be above average. MSAM seeks to
diversify the Partners MidCap Blend Fund's investments across market sectors and
to obtain the best values within each sector. In determining whether securities
should be sold, MSAM considers factors such as deteriorating fundamentals and
relative valuation. Sector weightings normally are kept within plus or minus 5%
of the S&P MidCap 400 Index. The Partners MidCap Blend Fund may invest up to 25%
of its assets in securities of foreign corporations.
17
Value Investing - MSAM analyzes securities to identify stocks that are
undervalued and measures the relative attractiveness of the Fund's current
holdings against potential purchases. MSAM determines value using a variety of
measures, including stock price/earnings and stock price/sales ratios. Value
stocks generally pay dividends, but MSAM may select non-dividend paying stocks
for their value characteristics. In determining whether securities should be
sold, MSAM considers factors such as high valuation relative to other investment
opportunities.
Growth Investing - MSAM focuses on common stocks that generally have higher
growth rates, betas (a measure of price volatility), stock price/earnings ratios
and lower yields than the stock market in general as measured by an appropriate
market index. In buying and selling securities for the Fund's portfolio, MSAM
emphasizes individual security selection. Individual companies are chosen based
on such factors as potential growth in earnings, quality of management, new
products and/or new markets, and research and development capabilities. In
determining whether securities should be sold, MSAM considers factors such as
deteriorating short or long-term earnings growth projections.
In addition to having similar investment objectives, the MidCap Blend Fund and
Partners MidCap Blend Fund have many similar investment policies and
restrictions.
PARTNERS MIDCAP BLEND FUND AND MIDCAP BLEND FUND INVESTMENT POLICIES AND
RESTRICTIONS
Fundamental Restrictions
- ------------------------
Each of the following restrictions for the Partners MidCap Blend Fund and MidCap
Blend Funds is a matter of fundamental policy and may not be changed without
shareholder approval. The Partners MidCap Blend Fund and MidCap Blend Fund may
not:
. Issue any senior securities as defined in the 1940 Act, as amended.
Purchasing and selling securities and futures contracts and options thereon
and borrowing money in accordance with restrictions described below do not
involve the issuance of a senior security.
. Invest in physical commodities or commodity contracts (other than foreign
currencies), but it may purchase and sell financial futures contracts,
options on such contracts, swaps and securities backed by physical
commodities.
. Invest in real estate, although it may invest in securities that are secured
by real estate and securities of issuers that invest or deal in real estate.
. Borrow money, except that it may a) borrow from banks (as defined in the
1940 Act, as amended) or other financial institutions or through reverse
repurchase agreements in amounts up to 33 1/3% of its total assets
(including the amount borrowed); b) to the extent permitted by applicable
law, borrow up to an additional 5% of its total assets for temporary
purposes; c) obtain short-term credits as may be necessary for the clearance
of purchases and sales of portfolio securities; and d) purchase securities
on margin to the extent permitted by applicable law (the deposit or payment
of margin in connection with transactions in options and financial futures
contracts is not considered purchase of securities on margin).
. Make loans, except that the series may a) purchase and hold debt obligations
in accordance with its investment objective and policies; b) enter into
repurchase agreements; and c) lend its portfolio securities without
limitation against collateral (consisting of cash or securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities)
equal at all times to not less than 100% of the value of the securities
loaned. This limit does not apply to purchases of debt securities or
commercial paper.
. Invest more than 5% of its total assets in the securities of any one issuer
(other than obligations issued or guaranteed by the U.S. Government or its
agencies or instrumentalities) or purchase more than 10% of the outstanding
voting securities of any one issuer, except that this limitation shall apply
only with respect to 75% of the total assets of the series.
. Act as an underwriter of securities, except to the extent that the series
may be deemed to be an underwriter in connection with the sale of securities
held in its portfolio.
18
. Concentrate its investments in any particular industry, except that the
series may invest up to 25% of the value of its total assets in a single
industry, provided that, when the series has adopted a temporary defensive
posture, there shall be no limitation on the purchase of obligations issued
or guaranteed by the U.S. Government or its agencies or instrumentalities.
. Sell securities short (except where the series holds or has the right to
obtain at no added cost a long position in the securities sold that equals
or exceeds the securities sold short).
Non-Fundamental Restrictions
- ----------------------------
The Partners MidCap Blend Fund and MidCap Blend Fund have also adopted the
following restrictions that are not fundamental policies and that may be changed
without shareholder approval. It is contrary to the Partners MidCap Blend Fund
and MidCap Blend Fund's present policy to:
. Invest more than 15% of its net assets in illiquid securities and in
repurchase agreements maturing in more than seven days except to the extent
permitted by applicable law.
. Pledge, mortgage or hypothecate its assets, except to secure permitted
borrowings. The deposit of underlying securities and other assets in escrow
and other collateral arrangements in connection with transactions in put or
call options, futures contracts and options on futures contracts are not
deemed to be pledges or other encumbrances.
. Invest in companies for the purpose of exercising control or management.
. Enter into a) any futures contracts and related options for non-bona fide
hedging purposes within the meaning of Commodity Futures Trading Commission
(CFTC) regulations if the aggregate initial margin and premiums required to
establish such positions will exceed 5% of the fair market value of the
series' net assets, after taking into account unrealized profits and
unrealized losses on any such contracts it has entered into; and b) any
futures contracts if the aggregate amount of such series' commitments under
outstanding futures contracts positions would exceed the market value of its
total assets.
. Invest more than 5% of its total assets in real estate limited partnership
interests.
. Acquire securities of other investment companies in reliance on Section
12(d) (1) (F) or (G) of the 1940 Act.
The Partners MidCap Blend Fund has also adopted a non-fundamental restriction
which requires it, under normal circumstances, to invest at least 80% of its net
assets in companies having market capitalizations similar to companies included
in the S&P MidCap 400 Index.
The MidCap Blend Fund has also adopted a non-fundamental restriction which
requires it, under normal circumstances, to invest at least 80% of its net
assets in companies having market capitalizations similar to companies included
in the Russell MidCap Index.
INVESTMENT ADVISORY SERVICES
- ----------------------------
The Manager serves as investment advisor to the Investors Fund. The Manager has
entered into a sub-advisory agreement with PGI to provide investment advisory
services to the MidCap Blend Fund. PGI is a directly, wholly-owned subsidiary of
Principal Life and an affiliate of the Manager. The MidCap Blend Fund paid the
Manager a fee equal to 0.65% (0.0% for the Class J shares after waiver) of the
MidCap Blend Fund's average daily net assets for services provided during the
fiscal year ended October 31, 2002 and the Manager paid PGI a sub-advisory fee
equal to 0.10% of such assets.
The Manager has also entered into a sub-advisory agreement with Morgan Stanley
Asset Management ("MSAM") to provide investment advisory services to the
Partners MidCap Blend Fund. The Partners MidCap Blend Fund paid the Manager a
fee equal to 1.00% (0.0% for the Class J shares after waiver) of the Partners
MidCap Blend Fund's average daily net assets for services provided during the
fiscal year ended October 31, 2002 and the Manager paid MSAM a sub-advisory fee
of 0.50% of such assets.
If the Plan is approved, the combined assets of the Funds will be sub-advised by
a sub-advisor affiliated with the Manager, the Manager will retain a larger
portion of the advisory fees it will receive with respect to the assets formerly
owned by the Partners MidCap Blend Fund, and the amount of the management fee
waiver or expense reimbursement for Class J shares by the Manager will be
reduced.
19
ADDITIONAL INFORMATION ABOUT THE SERIES
Additional information about the Funds is available in their annual reports to
shareholders for the year ended October 31, 2002, and in the following documents
which have been filed with the SEC: prospectus and Statement of Additional
Information for the Investors Fund (including the MidCap Blend Fund and Partners
MidCap Blend Fund) dated March 1, 2003; and Statement of Additional Information
for the registration statement of which this prospectus/ information statement
is a part, dated April 10, 2003. You may obtain copies of the annual reports to
shareholders, the prospectuses and the Statements of Additional Information by
contacting Princor Financial Services Corporation at Des Moines, Iowa
50392-2080, or by telephoning shareholder services toll-free at 1-800-247-4123.
Each of the Funds is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the Investment Company Act, as applicable.
Accordingly, each files reports, proxy materials and other information with
the SEC. You may inspect those reports, proxy materials and other information at
the public reference facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D. C. 20549. Copies of such materials also may be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D. C.
20549, at prescribed rates, or at no charge from the EDGAR database on the
Commission's website at "www.sec.gov."
PROPOSALS OF SHAREHOLDERS
A shareholder who has an issue that he or she would like to have included in the
agenda at a Principal Investors Fund shareholder meeting should send the
proposal to the Fund at the Principal Financial Group, Des Moines, Iowa
50392-0200. To be considered for presentation at a shareholders meeting, the
proposal must be received a reasonable time before a solicitation is made for
such meeting. Timely submission of a proposal does not necessarily mean that
such proposal will be included.
OTHER BUSINESS
We do not know of any business to be brought before the meeting other than the
matters set forth in this prospectus/ information statement.
20
APPENDIX A
PRINCIPAL INVESTORS FUND
PLAN OF ACQUISITION
PARTNERS MIDCAP BLEND FUND AND MIDCAP BLEND FUND
The Board of Directors of Principal Investors Fund (the "Fund") deem it
advisable that the MidCap Blend Fund of the Fund acquire all of the assets of
the Partners MidCap Blend Fund in exchange for the assumption by the MidCap
Blend Fund of all of the liabilities of the Partners MidCap Blend Fund and
shares issued by the MidCap Blend Fund which are thereafter to be distributed by
the Partners MidCap Blend Fund pro rata to its shareholders in complete
liquidation and termination of the Partners MidCap Blend Fund and in exchange
for all of the Partners MidCap Blend Fund's outstanding shares.
The Partners MidCap Blend Fund will transfer to the MidCap Blend Fund and the
MidCap Blend Fund will acquire from the Partners MidCap Blend Fund, all of the
assets of the Partners MidCap Blend Fund on the Closing Date and will assume
from the Partners MidCap Blend Fund all of the liabilities of the Partners
MidCap Blend Fund in exchange for the issuance of the number of shares of the
MidCap Blend Fund determined as provided in the following paragraphs, which will
be subsequently distributed pro rata to the shareholders of the Partners MidCap
Blend Fund in complete liquidation and termination of the Partners MidCap Blend
Fund and in exchange for all of the Partners MidCap Blend Fund's outstanding
shares. The Partners MidCap Blend Fund will not issue, sell or transfer any of
its shares after the Closing Date, and only redemption requests received by the
Partners MidCap Blend Fund in proper form prior to the Closing Date shall be
fulfilled by the Partners MidCap Blend Fund. Redemption requests received by the
Partners MidCap Blend Fund thereafter will be treated as requests for redemption
of those shares of the MidCap Blend Fund allocable to the shareholder in
question.
Each Fund will declare to its shareholders of record on or prior to the Closing
Date a dividend or dividends which, together with all previous such dividends,
shall have the effect of distributing to its shareholders all of its income
(computed without regard to any deduction for dividends paid) and all of its net
realized capital gains, if any, as of the Closing Date;
On the Closing Date, the MidCap Blend Fund will issue to the Partners MidCap
Blend Fund a number of full and fractional shares of the MidCap Blend Fund,
taken at their then net asset value, having an aggregate net asset value equal
to the aggregate value of the net assets of the Partners MidCap Blend Fund. The
aggregate value of the net assets of the Partners MidCap Blend Fund and the
MidCap Blend Fund shall be determined in accordance with the then current
Prospectus of the MidCap Blend Fund as of closing of the New York Stock Exchange
on the Closing Date.
The closing of the transactions contemplated in this Plan (the "Closing") shall
be held at the offices of Principal Management, 680 8th Street, Des Moines, Iowa
50392-2080 at 3:00 p.m. Central Daylight Time on June 30, 2003 or on such
earlier or later date as fund management may determine. The date on which the
Closing is to be held as provided in this Plan shall be known as the "Closing
Date."
In the event that on the Closing Date (a) the New York Stock Exchange is closed
for other than customary weekend and holiday closings or (b) trading on said
Exchange is restricted or (c) an emergency exists as a result of which it is not
reasonably practicable for the MidCap Blend Fund or the Partners MidCap Blend
Fund to fairly determine the value of its assets, the Closing Date shall be
postponed until the first business day after the day on which trading shall have
been fully resumed.
As soon as practicable after the Closing, the Partners MidCap Blend Fund shall
(a) distribute on a pro rata basis to the shareholders of record of the Partners
MidCap Blend Fund at the close of business on the Closing Date the shares of the
MidCap Blend Fund received by the Partners MidCap Blend Fund at the Closing in
exchange for all of the Partners MidCap Blend Fund's outstanding shares, and (b)
be liquidated in accordance with applicable law and the Fund's Articles of
Incorporation.
21
For purposes of the distribution of shares of the MidCap Blend Fund to
shareholders of the Partners MidCap Blend Fund, the MidCap Blend Fund shall
credit on the books of the MidCap Blend Fund an appropriate number of shares of
the MidCap Blend Fund to the account of each shareholder of the Partners MidCap
Blend Fund. No certificates will be issued for shares of the MidCap Blend Fund.
After the Closing Date and until surrendered, each outstanding certificate, if
any, which, prior to the Closing Date, represented shares of the Partners MidCap
Blend Fund, shall be deemed for all purposes of the Fund's Articles of
Incorporation and Bylaws to evidence the appropriate number of shares of the
MidCap Blend Fund to be credited on the books of the MidCap Blend Fund in
respect of such shares of the Partners MidCap Blend Fund as provided above.
Prior to the Closing Date, the Partners MidCap Blend Fund shall deliver to the
MidCap Blend Fund a list setting forth the assets to be assigned, delivered and
transferred to the MidCap Blend Fund, including the securities then owned by the
Partners MidCap Blend Fund and the respective federal income tax bases (on an
identified cost basis) thereof, and the liabilities to be assumed by the MidCap
Blend Fund pursuant to this Plan.
All of the Partners MidCap Blend Fund's portfolio securities shall be delivered
by the Partners MidCap Blend Fund's custodian on the Closing Date to the MidCap
Blend Fund or its custodian, either endorsed in proper form for transfer in such
condition as to constitute good delivery thereof in accordance with the practice
of brokers or, if such securities are held in a securities depository within the
meaning of Rule 17f-4 under the 1940 Act, transferred to an account in the name
of the MidCap Blend Fund or its custodian with said depository. All cash to be
delivered pursuant to this Plan shall be transferred from the Partners MidCap
Blend Fund's account at its custodian to the MidCap Blend Fund's account at its
custodian. If on the Closing Date the Partners MidCap Blend Fund is unable to
make good delivery to the MidCap Blend Fund's custodian of any of the Partners
MidCap Blend Fund's portfolio securities because such securities have not yet
been delivered to the Partners MidCap Blend Fund's custodian by its brokers or
by the transfer agent for such securities, then the delivery requirement with
respect to such securities shall be waived, and the Partners MidCap Blend Fund
shall deliver to the MidCap Blend Fund's custodian on or by said Closing Date
with respect to said undelivered securities executed copies of an agreement of
assignment in a form satisfactory to the MidCap Blend Fund, and a due bill or
due bills in form and substance satisfactory to the custodian, together with
such other documents including brokers' confirmations, as may be reasonably
required by the MidCap Blend Fund.
This Plan may be abandoned and terminated, whether before or after action
thereon by the shareholders of the Partners MidCap Blend Fund and
notwithstanding favorable action by such shareholder, if the Board of Directors
believe that the consummation of the transactions contemplated hereunder would
not be in the best interests of the shareholders of either Fund. This Plan may
be amended by the Fund's Board of Directors at any time, except that after
approval by the shareholders of the Partners MidCap Blend Fund no amendment may
be made with respect to the Plan which in the opinion of the Board of Directors
materially adversely affects the interests of the shareholders of the Partners
MidCap Blend Fund.
Except as expressly provided otherwise in this Plan, Principal Management will
pay or cause to be paid all out-of-pocket fees and expenses incurred by the
Partners MidCap Blend Fund or the MidCap Blend Fund in connection with the
transactions contemplated under this Plan, including, but not limited to,
accountants' fees, legal fees, registration fees, printing expenses, transfer
taxes (if any) and the fees of banks and transfer agents.
22
PRINCIPAL INVESTORS FUND, INC.
DES MOINES, IOWA 50392-0200
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus/ information statement dated April 10, 2003
for the special meeting of the holders of each share class of the common stock,
$.01 par value per share, of the Partners MidCap Blend Fund, a series of
Principal Investors Fund, Inc., an open-end management investment company. The
meeting is to be held on Wednesday, May 14, 2003. A copy of the
prospectus/information statement may be obtained from Principal Management
Corporation.
The prospectus/information statement describes certain transactions contemplated
by the proposed combination of the Partners MidCap Blend Fund with the MidCap
Blend Fund ("MidCap Blend Fund") pursuant to the terms of a Plan of Acquisition
("Plan"). Under the Plan, the MidCap Blend Fund would acquire all the assets and
assume all the liabilities of the Partners MidCap Blend Fund and issue in
exchange shares of each share class of its common stock. The Partners MidCap
Blend Fund would immediately redeem all its outstanding shares by distributing
the MidCap Blend Fund shares to its shareholders. As a result, each shareholder
would own shares in the MidCap Blend Fund equal in value to shares of the same
class as he or she had owned in the Partners MidCap Blend Fund at the effective
time. Principal Management Corporation has agreed to pay all expenses incurred
by the series in connection with the Plan.
The date of the Statement of Additional Information is April 10, 2003.
OTHER INFORMATION
The information otherwise required to be set forth in this Statement of
Additional Information is included in the prospectuses and Statements of
Additional Information of the Investors Fund, dated March 1, 2003, and in the
Investors Fund's Annual Report to Shareholders for the year ended October 31,
2002, all of which are incorporated herein by reference.
FINANCIAL STATEMENTS
The financial statements and footnotes thereto of the Principal Investors Fund,
Inc., together with the Report of Independent Auditors thereon, are incorporated
herein by reference from the Principal Investors Fund's Annual Report to
Shareholders for the year ended October 31, 2002.
The financial statements of Principal Investors Fund, Inc. listed above and
incorporated by reference into this Statement of Additional Information have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon and incorporated herein by reference. Such financial statements
are incorporated by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
1
STATEMENTS OF ASSETS AND LIABILITIES
PRINCIPAL INVESTORS FUND, INC.
OCTOBER 31, 2002 (UNAUDITED)
-------------------------------------------------------------------------------
PARTNERS COMBINED
MIDCAP MIDCAP BLEND PRO FORMA MIDCAP BLEND
BLEND FUND FUND ADJUSTMENTS FUND
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
INVESTMENT IN
SECURITIES--AT COST.. $ 19,758,062 $ 12,042,693 $ -- $ 31,800,755
============ ============ ========= ============
ASSETS
Investment in
securities--at value. $ 19,019,816 $ 10,628,654 -- 29,648,470
Cash.................. 10,106 327,537 -- 337,643
Receivables:
Capital Shares sold.. 60,437 6,172 -- 66,609
Dividends and
interest............ 14,503 3,903 -- 18,406
Investment securities
sold................ 130,321 249,338 -- 379,659
------------ ------------ --------- ------------
Total Assets 19,235,183 11,215,604 -- 30,450,787
LIABILITIES
Accrued expenses...... 12,964 8,214 -- 21,178
Payables:
Investment securities
purchased........... 179,222 91,918 -- 271,140
------------ ------------ --------- ------------
Total Liabilities 192,186 100,132 -- 292,318
------------ ------------ --------- ------------
NET ASSETS APPLICABLE
TO OUTSTANDING SHARES $ 19,042,997 $ 11,115,472 $ -- $ 30,158,469
============ ============ ========= ============
NET ASSETS CONSIST OF:
Capital Shares and
additional
paid-in-capital...... $ 20,770,479 $ 14,058,392 $ -- $ 34,828,871
Accumulated
undistributed
(overdistributed) net
investment income
(operating loss)..... 15,511 -- -- 15,511
Accumulated
undistributed
(overdistributed) net
realized gain (loss). (1,004,747) (1,528,881) -- (2,533,628)
Net unrealized
appreciation
(depreciation) of
investments.......... (738,246) (1,414,039) -- (2,152,285)
------------ ------------ --------- ------------
Total Net Assets $ 19,042,997 $ 11,115,472 $ -- $ 30,158,469
============ ============ ========= ============
CAPITAL STOCK (PAR
VALUE: $.01 A SHARE):
Shares authorized..... 145,000,000 125,000,000 -- 145,000,000
NET ASSET VALUE PER
SHARE:
Advisors Preferred:
Net Assets........... $ 2,130,699 $ 573,482 $ -- $ 2,704,181
Shares issued and
outstanding.......... 235,723 83,500 (20,062)/(b)/ 299,161
Net asset value per
share................ $ 9.04 $ 6.87 -- $ 9.04
============ ============ == ============
Advisors Select: Net
Assets............... $ 1,137,842 $ 571,774 $ -- $ 1,709,616
Shares issued and
outstanding.......... 126,178 83,500 (20,110)/(b)/ 189,568
Net asset value per
share................ $ 9.02 $ 6.85 -- $ 9.02
============ ============ == ============
Class J: Net Assets... $ 13,259,972 $ 2,934,970 $ -- $ 16,194,942
Shares issued and
outstanding.......... 1,482,033 429,376 (101,446)/(b)/ 1,809,963
Net asset value per
share /(a)/.......... $ 8.95 $ 6.84 -- $ 8.95
============ ============ == ============
Institutional: Net
Assets............... $ 8,984 $ 5,784,939 $ -- $ 5,793,923
Shares issued and
outstanding.......... 997 834,596 (192,538)/(b)/ 643,055
Net asset value per
share................ $ 9.01 $ 6.93 -- $ 9.01
============ ============ == ============
Preferred: Net Assets. $ 1,374,210 $ 674,976 $ -- $ 2,049,186
Shares issued and
outstanding.......... 151,567 97,756 (23,337)/(b)/ 225,986
Net asset value per
share................ $ 9.07 $ 6.90 -- $ 9.07
============ ============ == ============
Select: Net Assets.... $ 1,131,290 $ 575,331 $ -- $ 1,706,621
Shares issued and
outstanding.......... 124,999 83,500 (19,923)/(b)/ 188,576
Net asset value per
share................ $ 9.05 $ 6.89 -- $ 9.05
============ ============ == ============
/(a) /Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
/(b) /Reflects new shares issued, net of retired shares of Partners MidCap Blend
Fund.
See accompanying notes.
2
STATEMENTS OF OPERATIONS
PRINCIPAL INVESTORS FUND, INC.
YEAR ENDED OCTOBER 31, 2002 (UNAUDITED)
-------------------------------------------------------------------------------
PARTNERS COMBINED
MIDCAP MIDCAP BLEND PRO FORMA MIDCAP BLEND
BLEND FUND FUND ADJUSTMENTS /(A)/ FUND
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
NET INVESTMENT INCOME
(OPERATING LOSS)
Income:
Dividends............ $ 177,742 $ 65,696 $ -- $ 243,438
Interest............. 21,039 3,434 -- 24,473
----------- ----------- ---------------- -----------
Total Income 198,781 69,130 -- 267,911
Expenses:
Management and
investment advisory
fees................ 82,434 87,368 (30,507) 139,295
Distribution fees.... 46,118 16,445 -- 62,563
Administrative
service fees........ 6,661 3,639 -- 10,300
Service fees......... 10,197 5,771 -- 15,968
Shareholder reports -
Class J............. -- 687 -- 687
Transfer and
administrative fees
- Class J........... 33,594 9,813 -- 43,407
----------- ----------- ---------------- -----------
Total Gross Expenses 179,004 123,723 (30,507) 272,220
Less: Fees paid
indirectly.......... 290 -- -- 290
----------- ----------- ---------------- -----------
Total Net Expenses 178,714 123,723 (30,507) 271,930
----------- ----------- ---------------- -----------
Net Investment Income
(Operating Loss) 20,067 (54,593) 30,507 (4,019)
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON INVESTMENTS
AND FOREIGN
CURRENCIES
Net realized gain
(loss) from:
Investment
transactions........ (742,864) (1,196,068) -- (1,938,932)
Other investment
companies........... 10,346 -- -- 10,346
Change in unrealized
appreciation/depreciation
of:
Investments........... (440,913) (1,090,717) -- (1,531,630)
Net Realized and
Unrealized Gain (Loss)
on Investments and
Foreign Currencies (1,173,431) (2,286,785) -- (3,460,216)
----------- ----------- ---------------- -----------
Net Increase (Decrease)
in Net Assets
Resulting from
Operations $(1,153,364) $(2,341,378) $ 30,507 $(3,464,235)
=========== =========== ================ ===========
/(a) /Reflects estimated reduction in expenses due to lower management and
investment advisory fees, larger net assets and greater economies of scale,
and assumes the MidCap Blend Fund fee structure was in effect for the twelve
months ended October 31, 2002.
See accompanying notes.
3
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
-------------------------------------------------------------------------------
1. BASIS OF COMBINATION
On March 10, 2003, the Board of Directors of Principal Investors Fund, Inc.
approved an Agreement and Plan of Reorganization whereby, subject to approval by
the shareholders of Partners MidCap Blend Fund, MidCap Blend Fund will acquire
all the assets of Partners MidCap Blend Fund subject to the liabilities of such
fund, in exchange for a number of shares equal to the pro rata net assets of
shares of MidCap Blend Fund (the "Merger").
The Merger will be accounted for as a tax-free merger of investment companies.
The pro forma combined financial statements are presented for the information of
the reader and may not necessarily be representative of what the actual combined
financial statements would have been had the reorganization occurred at October
31, 2002. The unaudited pro forma schedule of investments and statement of
assets and liabilities reflect the financial position of Partners MidCap Blend
Fund and MidCap Blend Fund at October 31, 2002. The unaudited pro forma
statement of operations reflects the results of operations of Partners MidCap
Blend Fund and MidCap Blend Fund for the twelve months ended October 31, 2002.
The statements have been derived from the Funds' respective books and records
utilized in calculating daily net asset value at the dates indicated above for
Partners MidCap Blend Fund and MidCap Blend Fund under accounting principles
generally accepted in the United States. The historical cost of investment
securities will be carried forward to the surviving entity and results of
operations of MidCap Blend Fund for pre-combination periods will not be
restated.
The pro forma schedule of investments and statements of assets and liabilities
and operations should be read in conjunction with the historical financial
statements of the Funds incorporated by reference in the Statements of
Additional Information.
2. SECURITY VALUATION
MidCap Blend Fund and Partners MidCap Blend Fund value securities for which
market quotations are readily available at market value, which is determined
using the last reported sale price or, if no sales are reported, as is regularly
the case for some securities traded over-the-counter, the last reported bid
price. When reliable market quotations are not considered to be readily
available, which may be the case, for example, with respect to certain debt
securities, preferred stocks and international securities the investments are
valued by using prices provided by market makers or estimates of market values
obtained from yield data and other factors relating to instruments or securities
with similar characteristics in accordance with procedures established in good
faith by the Fund's Board of Directors. Short-term securities are valued at
amortized cost, which approximates market.
3. CAPITAL SHARES
The pro forma net asset value per share assumes additional shares of common
stock issued in connection with the proposed acquisition of Partners MidCap
Blend Fund by MidCap Blend Fund as of October 31, 2002. The number of additional
shares issued was calculated by dividing the net asset value of each class of
Partners MidCap Blend Fund by the respective class net asset value per share of
MidCap Blend Fund.
4. PRO FORMA ADJUSTMENTS
The accompanying pro forma financial statements reflect changes in fund shares
as if the merger had taken place on October 31, 2002. The expenses of Partners
MidCap Blend Fund were adjusted assuming the fee structure of MidCap Blend Fund
was in effect for the twelve months ended October 31, 2002.
5. DISTRIBUTIONS
No provision for federal income taxes is considered necessary because each fund
is qualified as a "regulated investment company" under the Internal Revenue Code
and intends to distribute each year substantially all of its net investment
income and realized capital gains to shareholders.
MidCap Blend Fund and Partners MidCap Blend Fund will distribute substantially
all of their net investment income and any realized gains prior to the merger
date.
4
- --------------------------------------------------------------------------------------------------------------------------------
Principal Amount or Number of Shares
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
MidCap Blend Partners MidCap
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fund Blend Fund Combined
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Common Stocks (95.62%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Aerospace & Defense (2.68%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,630 1,630 Northrop Grumman
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,700 1,400 8,100 Raytheon
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,400 6,400 Rockwell Collins
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
9,300 9,300 Titan 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Aerospace & Defense Equipment (1.75%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,530 5,530 Alliant Techsystems 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,900 2,900 Goodrich
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Apparel Manufacturers (0.67%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,700 6,700 Polo Ralph Lauren 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Applications Software (0.44%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,630 1,630 Intuit 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
22,600 22,600 Peregrine Systems 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
13,800 13,800 Rational Software 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
12,300 12,300 Siebel Systems 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Audio & Video Products (0.27%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,100 3,100 Polycom 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Auto-Medium & Heavy Duty Trucks (0.83%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,100 4,100 Navistar International 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Auto/Truck Parts & Equipment-Original (0.46%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,400 1,400 Lear 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Batteries & Battery Systems (0.19%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
700 700 Energizer Holdings 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Beverages-Non-alcoholic (0.68%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,400 5,400 Coca-Cola Enterprises
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,400 1,400 Pepsi Bottling Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Building Products-Air & Heating (0.51%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,470 1,470 American Standard 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Building Products-Cement & Aggregate (0.15%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
600 600 Martin Marietta Materials
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Building Products-Wood (1.35%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,100 6,100 Rayonier
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Building-Residential & Commercial (0.26%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
700 700 Ryland Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cable TV (0.40%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,300 6,300 Adelphia Communications 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,600 4,600 Cablevision Systems 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Casino Hotels (0.12%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,900 1,900 Park Place Entertainment 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Casino Services (2.35%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,940 5,940 International Game Technology 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cellular Telecommunications (0.09%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,100 4,100 Triton PCS Holdings 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chemicals-Diversified (0.03%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
400 400 Hercules 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Chemicals-Specialty (0.88%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,400 2,400 Cabot
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,000 1,000 Eastman Chemical
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,600 2,600 W.R. Grace 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Coatings & Paint (0.43%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,200 3,200 RPM
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Commercial Banks (4.98%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,700 1,700 Banknorth Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,400 2,400 Compass Bancshares
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
500 500 Cullen/Frost Bankers
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
900 900 First Tennessee National
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
700 700 Hibernia
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,100 600 3,700 M&T Bank
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,100 1,100 Marshall & Ilsley
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,820 1,100 2,920 Mercantile Bankshares
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,900 2,900 National Commerce Financial
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,020 5,020 North Fork Bancorp.
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
400 400 Provident Financial Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10,620 10,620 TCF Financial
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,000 3,000 Zions Bancorp
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Commercial Services (1.84%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,770 6,770 Arbitron 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
11,730 11,730 Servicemaster
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Commercial Service-Finance (3.18%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,900 7,900 Concord EFS 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,800 4,800 Deluxe
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,800 600 8,400 Dun & Bradstreet 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,220 2,220 H&R Block
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Computer Services (1.85%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,500 2,500 Affiliated Computer Services 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,700 2,700 Bisys Group 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,790 5,100 7,890 DST Systems 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,820 2,100 9,920 Sungard Data Systems 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10,600 10,600 Unisys 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Computers (0.49%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,400 3,400 Apple Computer 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Computers-Integrated Systems (0.41%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,200 2,200 Diebold
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,300 1,300 Synopsys 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Computers-Memory Devices (2.31%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
18,900 18,900 EMC 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10,500 10,500 Veritas Software 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Consulting Services (0.11%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,500 1,500 BearingPoint 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Consumer Products-Miscellaneous (0.84%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,500 500 8,000 Dial
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
700 700 Fortune Brands
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Containers-Paper & Plastic (1.21%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
100 100 Longview Fibre
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,300 1,300 Packaging Corp. of America 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,800 3,800 Pactiv 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,500 1,500 Sonoco Products
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cosmetics & Toiletries (0.92%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,200 1,700 6,900 International Flavors & Fragrances
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Data Processing & Management (0.83%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
900 900 CSG Systems International 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,400 1,400 First Data
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,900 1,200 4,100 SEI Investments
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Dental Supplies & Equipment (0.97%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,000 5,000 Dentsply International
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Direct Marketing (0.05%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
300 300 Harte-Hanks
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Distribution-Wholesale (0.52%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,800 1,800 Tech Data 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Diversified Manufacturing Operations (2.41%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,790 1,800 4,590 Cooper Industries
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,000 3,000 Federal Signal
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,500 1,500 Harsco
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,240 1,240 ITT Industries
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
400 400 Pentair
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,500 2,500 SPX 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
100 100 Teleflex
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Diversified Operators-Commercial Service (0.53%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,800 2,800 Aramark 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,900 4,900 Viad
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
E-Marketing-Information (0.33%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,200 5,200 DoubleClick 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Electric Products-Miscellaneous (0.03%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
900 900 GrafTech International 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Electric-Integrated (3.81%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,100 7,100 Alliant Energy
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
11,200 11,200 Allegheny Energy
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,477 1,700 8,177 Ameren
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
100 100 Black Hills
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,500 3,500 DQE
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,300 4,300 Edison International 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,100 3,100 Energy East
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,360 2,300 5,660 Exelon
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
100 100 Pinnacle West Capital
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
100 100 Progress Energy
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,500 3,500 Scana
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Electronic Components-Miscellaneous (0.64%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,000 2,000 Gentex 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
13,100 13,100 Solectron 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,000 4,000 Vishay Intertechnology 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Electronic Components-Semiconductor (1.78%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,300 6,300 Fairchild Semiconductor International 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,000 4,000 Intersil Holding 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
800 800 Microchip Technology 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,200 2,200 Micron Technology 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Electronic Parts Distribution (0.84%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10,000 10,000 Avnet
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Enterprise Software & Service (1.08%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,700 4,700 Legato Systems 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,700 5,700 Peoplesoft 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Entertainment Software (0.28%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,500 1,500 Activision 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fiduciary Banks (1.99%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,800 7,800 Mellon Financial
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Filtration & Separation Products (0.42%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,700 2,700 Pall
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Finance-Auto Loans (0.26%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,800 3,800 AmeriCredit 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Finance-Consumer Loans (1.14%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,110 2,110 SLM
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Finance-Credit Card (0.01%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
500 500 Metris
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Finance-Investment Banker & Broker (1.11%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,700 1,700 Investment Technology Group 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,160 1,300 2,460 Lehman Brothers Holdings
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Finance-Mortgage Loan/Banker (0.53%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,019 2,019 Countrywide Credit Industries
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Financial Guarantee Insurance (1.71%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
350 350 MBIA
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,560 1,600 4,160 PMI Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,600 3,600 Radian Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Food-Confectionery (0.79%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,300 2,300 Hershey Foods
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Food-Dairy Products (0.65%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,300 3,300 Dean Foods 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Food-Meat Products (0.13%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
900 900 Smithfield Foods 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Food-Miscellaneous/Diversified (0.98%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,400 1,400 H.J. Heinz
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,000 7,000 McCormick
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,800 2,800 Sara Lee
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Food-Retail (0.43%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,200 3,200 Kroger
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Forestry (0.73%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,114 6,114 Plum Creek Timber
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Gas-Distribution (0.36%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,800 1,800 Sempra Energy
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Gold Mining (1.78%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,700 5,700 Barrick Gold
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10,240 10,240 Newmont Mining
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Health Care Cost Containment (1.19%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,500 7,500 Caremark Rx 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Hospital Beds & Equipment (1.20%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,378 4,378 Hillenbrand Industries
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Human Resources (0.37%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,200 1,200 Manpower
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Independent Power Producer (0.70%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
33,100 33,100 Calpine 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,400 5,400 Mirant 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Instruments-Controls (0.49%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,010 1,010 Johnson Controls
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
500 500 Parker Hannifin
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,800 1,800 Thermo Electron 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Insurance Brokers (0.22%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
900 900 Arthur J. Gallagher
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Internet Brokers (0.04%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,000 1,000 E*trade Group 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Internet Security (0.43%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,000 3,000 Network Associates 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Investment Management & Advisory Services (0.45%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
800 800 Affiliated Managers Group 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,480 2,480 Federated Investors
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,800 4,800 John Nuveen
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
500 500 Waddell & Reed Financial
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Life & Health Insurance (1.41%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,160 4,160 Aflac
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,030 2,030 Nationwide Financial Services
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,370 2,370 Torchmark
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Lottery Services (1.12%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
8,495 4,800 13,295 Gtech Holdings 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Machinery Tools & Related Products (0.28%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,000 1,000 Kennametal
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Machinery-Pumps (0.47%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
700 700 Flowserve 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,300 3,300 Graco
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical Information System (1.33%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
16,810 16,810 IMS Health
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical Instruments (4.65%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,420 900 5,320 Beckman Coulter
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,350 6,350 Biomet
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,300 6,300 Boston Scientific 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,700 5,700 Edwards Lifesciences 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,400 3,700 9,100 St. Jude Medical 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical Laboratory & Testing Service (1.71%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,700 1,700 Covance 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,400 3,400 Laboratory Corp. of America Holdings 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,100 1,100 Quest Diagnostics 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical Products (0.78%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,100 1,800 5,900 Varian Medical Systems 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical Sterilization Product (0.72%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,000 3,000 Steris 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical-Biomedical/Gene (2.95%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,500 2,500 Icos 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,200 3,200 Idec Pharmaceuticals 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,400 1,400 InterMune 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
600 600 Protein Design Labs 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,200 4,200 Telik 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical-Drugs (1.33%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,800 1,800 Cephalon 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,900 2,900 Vertex Pharmaceuticals 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical-HMO (1.48%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,190 2,200 3,390 Anthem 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,100 1,100 Health Net 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical-Hospitals (1.17%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
12,700 12,700 Health Management Associates 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,000 2,000 LifePoint Hospitals 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,440 1,400 5,840 Universal Health Services 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical-Outpatient & Home Medical Care (0.57%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,600 2,600 Apria Healthcare Group 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Medical-Wholesale Drug Distribution (1.20%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,210 3,210 AmerisourceBergen
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Metal-Diversified (0.58%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
9,100 9,100 Freeport-McMoran Copper & Gold 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Investing (8.19%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
8,880 8,880 AMB Property
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,260 2,260 Boston Properties
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,200 3,200 Chelsea Property Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
9,749 9,749 Equity Residential Properties Trust
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,400 4,400 Hospitality Properties Trust
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
9,300 9,300 Kimco Realty
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
8,800 8,800 Prologis Trust
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,050 6,050 Public Storage
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,200 6,200 United Dominion Realty Trust
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Motion Pictures & Services (0.38%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,300 3,300 Metro-Goldwyn-Mayer 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Multi-line Insurance (3.35%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,500 4,500 Allmerica Financial
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,900 2,900 American Financial Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,800 1,800 Hartford Financial Services
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,900 3,900 Loews 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,300 1,300 MetLife
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,900 2,900 Old Republic International
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Multimedia (0.10%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
200 200 Media General
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Networking Products (0.74%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,000 3,000 3Com 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,000 2,000 Emulex 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
8,100 8,100 Extreme Networks 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Non-hazardous Waste Disposal (1.17%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,900 4,900 Allied Waste Industries 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10,800 10,800 Republic Services 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oil Company-Exploration & Production (1.25%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,175 1,175 Apache
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,460 3,460 Devon Energy
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
100 100 Murphy Oil
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,600 2,600 Ocean Energy
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,350 5,350 XTO Energy
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oil Company-Integrated (0.53%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,830 4,830 Marathon Oil
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oil Field Machinery & Equipment (0.36%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,500 1,500 Cooper Cameron 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,300 1,300 FMC Technologies 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,290 3,290 National-Oilwell 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oil-Field Services (1.13%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,840 3,840 BJ Services 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,460 1,400 3,860 Weatherford International 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oil & Gas Drilling (2.85%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,364 5,364 GlobalSantaFe
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
500 500 Nabors Industries 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,600 2,600 Noble 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,300 1,300 Precision Drilling 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,100 3,100 Pride International 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Oil Refining & Marketing (0.20%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
400 400 Sunoco
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
300 300 Valero Energy
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Paper & Related Products (0.90%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,900 4,900 Boise Cascade
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,100 2,100 Bowater
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
700 700 Temple-Inland
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Pipelines (0.77%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,200 4,200 Enbridge Energy Management 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,600 2,600 Equitable Resources
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,550 2,550 Kinder Morgan Management 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,700 5,700 Questar
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Poultry (0.21%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,085 2,085 Tyson Foods
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Power Converter & Supply Equipment (0.47%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,900 6,900 American Power Conversion 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Printing-Commercial (0.90%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,640 4,000 10,640 Valassis Communications 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Property & Casualty Insurance (1.63%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
800 800 ACE
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
9,425 9,425 Fidelity National Financial
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
700 700 Leucadia National
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Publicly Traded Investment Fund (7.59%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,420 3,420 iShares Russell 2000 Index Fund
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,440 2,440 iShares S&P MidCap 400 Fund
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,840 2,840 iShares S&P SmallCap 600 Index Fund
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
9,140 9,140 Standard & Poor's MidCap 400 Depository Receipts
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Publishing-Books (0.52%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,300 1,300 Scholastic 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Publishing-Periodicals (0.88%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,000 6,000 Readers Digest Association
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Recreational Centers (0.53%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
8,600 8,600 Bally Total Fitness Holding 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Regional Banks (1.09%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,600 2,600 Comerica
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
200 200 PNC Financial Services Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Reinsurance (1.14%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,500 1,700 6,200 Everest Re Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,100 1,100 Platinum Underwriters Holdings 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Rental-Auto & Equipment (0.07%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,300 1,300 United Rentals 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Retail-Apparel & Shoe (1.15%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,400 2,400 Abercrombie & Fitch 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,000 7,000 Foot Locker 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
400 400 Ross Stores
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Retail-Bedding (0.57%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,700 2,700 Linens 'N Things 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Retail-Bookstore (1.21%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,600 3,600 Barnes & Noble 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,400 3,400 Borders Group 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Retail-Consumer Electronics (0.39%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,400 4,400 Circuit City Stores
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Retail-Discount (1.63%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,900 2,900 BJ's Wholesale Club 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,000 5,000 Dollar General
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,000 2,000 Dollar Tree Stores 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Retail-Jewelry (0.53%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,840 3,840 Tiffany
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Retail-Mail Order (0.17%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
800 800 Williams-Sonoma 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Retail-Restaurants (0.72%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
500 500 CBRL Group
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
400 400 Cheesecake Factory 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,600 1,600 Outback Steakhouse 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Retail-Toy Store (0.29%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,200 3,200 Toys R Us 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Savings & Loans-Thrifts (1.92%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
8,400 2,821 11,221 Charter One Financial
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
700 700 Downey Financial
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
3,010 900 3,910 Golden State Bancorp
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Semiconductor Component-Integrated Circuits (1.11%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10,000 10,000 Atmel 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10,800 10,800 Integrated Device Technology 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Semiconductor Equipment (0.72%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
6,600 6,600 Teradyne 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Steel-Producers (0.14%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,200 2,200 AK Steel Holding 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Therapeutics (2.91%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,300 4,300 Gilead Sciences 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
5,400 5,400 Isis Pharmaceuticals 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,200 4,200 Scios 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tobacco (4.48%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
7,760 700 8,460 RJ Reynolds Tobacco Holdings
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
17,600 17,600 UST
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Tools-Hand Held (0.41%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,400 1,400 Stanley Works
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Toys (0.74%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
8,100 8,100 Hasbro
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
10,980 10,980 Mattel
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Transport-Air Freight (0.29%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,000 1,000 CNF
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Transport-Equipment & Leasing (0.32%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,800 1,800 Gatx
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Transport-Truck (0.32%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
2,200 2,200 Swift Transportation 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Water (1.11%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
4,720 4,720 American Water Works
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Wireless Equipment (0.07%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,500 1,500 Powerwave Technologies 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
400 400 Stratex Networks
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Commercial Paper (9.46%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Finance-Mortgage Loan/Banker (9.46%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Investment in Joint Trading Account; Federal Home
Loan Bank System
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1,801,313 1,801,313 1.72%; 11/01/02
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Total Portfolio Investments (95.62%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Cash and receivables, net of liabilities (4.38%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Total Net Assets (100.00%)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
1 Non-income producing security.
- --------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Market Value
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
MidCap Blend Partners MidCap
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Fund Blend Fund Combined
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Common Stocks (95.62%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Aerospace & Defense (2.68%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Northrop Grumman 168,102 168,102
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Raytheon 197,650 41,300 238,950
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Rockwell Collins 144,192 144,192
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Titan 1 119,877 119,877
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Aerospace & Defense Equipment (1.75%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Alliant Techsystems 1 332,629 332,629
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Goodrich 43,790 43,790
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Apparel Manufacturers (0.67%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Polo Ralph Lauren 1 127,568 127,568
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Applications Software (0.44%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Intuit 1 84,630 84,630
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Peregrine Systems 1 2,011 2,011
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Rational Software 1 91,356 91,356
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Siebel Systems 1 92,496 92,496
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Audio & Video Products (0.27%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Polycom 1 30,535 30,535
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Auto-Medium & Heavy Duty Trucks (0.83%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Navistar International 1 91,922 91,922
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Auto/Truck Parts & Equipment-Original (0.46%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Lear 1 51,170 51,170
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Batteries & Battery Systems (0.19%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Energizer Holdings 1 20,888 20,888
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Beverages-Non-alcoholic (0.68%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Coca-Cola Enterprises 128,736 128,736
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Pepsi Bottling Group 37,730 37,730
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Building Products-Air & Heating (0.51%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
American Standard 1 98,049 98,049
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Building Products-Cement & Aggregate (0.15%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Martin Marietta Materials 16,704 16,704
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Building Products-Wood (1.35%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Rayonier 257,298 257,298
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Building-Residential & Commercial (0.26%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Ryland Group 29,120 29,120
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cable TV (0.40%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Adelphia Communications 1 794 794
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cablevision Systems 1 43,976 43,976
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Casino Hotels (0.12%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Park Place Entertainment 1 13,775 13,775
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Casino Services (2.35%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
International Game Technology 1 446,747 446,747
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cellular Telecommunications (0.09%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Triton PCS Holdings 1 10,045 10,045
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Chemicals-Diversified (0.03%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Hercules 1 3,840 3,840
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Chemicals-Specialty (0.88%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cabot 56,832 56,832
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Eastman Chemical 36,340 36,340
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
W.R. Grace 1 4,524 4,524
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Coatings & Paint (0.43%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RPM 48,192 48,192
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Commercial Banks (4.98%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Banknorth Group 39,389 39,389
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Compass Bancshares 77,520 77,520
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cullen/Frost Bankers 17,315 17,315
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
First Tennessee National 33,372 33,372
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Hibernia 13,797 13,797
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
M&T Bank 253,952 49,152 303,104
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Marshall & Ilsley 30,976 30,976
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Mercantile Bankshares 51,251 42,834 94,085
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
National Commerce Financial 70,992 70,992
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
North Fork Bancorp. 193,069 193,069
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Provident Financial Group 10,396 10,396
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
TCF Financial 450,713 450,713
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Zions Bancorp 120,630 120,630
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Commercial Services (1.84%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Arbitron 1 231,195 231,195
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Servicemaster 120,233 120,233
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Commercial Service-Finance (3.18%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Concord EFS 1 112,812 112,812
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Deluxe 221,856 221,856
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Dun & Bradstreet 1 285,090 21,930 307,020
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
H&R Block 98,524 98,524
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Computer Services (1.85%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Affiliated Computer Services 1 115,125 115,125
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Bisys Group 1 48,330 48,330
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
DST Systems 1 85,793 156,825 242,618
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Sungard Data Systems 1 173,369 46,557 219,926
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Unisys 1 92,538 92,538
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Computers (0.49%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Apple Computer 1 54,638 54,638
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Computers-Integrated Systems (0.41%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Diebold 78,430 78,430
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Synopsys 1 49,205 49,205
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Computers-Memory Devices (2.31%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
EMC 1 96,579 96,579
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Veritas Software 1 160,125 160,125
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Consulting Services (0.11%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
BearingPoint 1 11,700 11,700
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Consumer Products-Miscellaneous (0.84%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Dial 159,450 10,630 170,080
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Fortune Brands 35,042 35,042
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Containers-Paper & Plastic (1.21%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Longview Fibre 680 680
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Packaging Corp. of America 1 22,594 22,594
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Pactiv 1 75,392 75,392
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Sonoco Products 35,250 35,250
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cosmetics & Toiletries (0.92%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
International Flavors & Fragrances 174,460 57,035 231,495
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Data Processing & Management (0.83%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
CSG Systems International 1 11,591 11,591
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
First Data 48,916 48,916
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
SEI Investments 77,401 32,028 109,429
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Dental Supplies & Equipment (0.97%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Dentsply International 184,600 184,600
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Direct Marketing (0.05%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Harte-Hanks 5,724 5,724
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Distribution-Wholesale (0.52%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Tech Data 1 57,510 57,510
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Diversified Manufacturing Operations (2.41%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cooper Industries 87,857 56,682 144,539
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Federal Signal 50,670 50,670
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Harsco 38,475 38,475
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
ITT Industries 80,575 80,575
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Pentair 13,216 13,216
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
SPX 1 105,025 105,025
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Teleflex 4,206 4,206
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Diversified Operators-Commercial Service (0.53%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Aramark 1 59,080 59,080
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Viad 95,158 95,158
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
E-Marketing-Information (0.33%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
DoubleClick 1 36,400 36,400
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Electric Products-Miscellaneous (0.03%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
GrafTech International 1 3,528 3,528
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Electric-Integrated (3.81%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Alliant Energy 113,742 113,742
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Allegheny Energy 63,840 63,840
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Ameren 261,671 68,680 330,351
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Black Hills 2,635 2,635
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
DQE 55,790 55,790
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Edison International 1 43,215 43,215
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Energy East 66,030 66,030
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Exelon 169,344 115,920 285,264
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Pinnacle West Capital 2,850 2,850
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Progress Energy 4,172 4,172
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Scana 102,130 102,130
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Electronic Components-Miscellaneous (0.64%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Gentex 1 58,960 58,960
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Solectron 1 29,475 29,475
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Vishay Intertechnology 1 41,200 41,200
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Electronic Components-Semiconductor (1.78%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Fairchild Semiconductor International 1 74,970 74,970
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Intersil Holding 1 67,960 67,960
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Microchip Technology 1 19,520 19,520
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Micron Technology 1 35,200 35,200
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Electronic Parts Distribution (0.84%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Avnet 93,000 93,000
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Enterprise Software & Service (1.08%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Legato Systems 1 17,108 17,108
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Peoplesoft 1 103,170 103,170
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Entertainment Software (0.28%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Activision 1 30,750 30,750
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Fiduciary Banks (1.99%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Mellon Financial 220,662 220,662
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Filtration & Separation Products (0.42%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Pall 46,899 46,899
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Finance-Auto Loans (0.26%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
AmeriCredit 1 28,842 28,842
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Finance-Consumer Loans (1.14%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
SLM 216,781 216,781
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Finance-Credit Card (0.01%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Metris 1,425 1,425
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Finance-Investment Banker & Broker (1.11%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Investment Technology Group 1 54,230 54,230
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings 61,793 69,251 131,044
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Finance-Mortgage Loan/Banker (0.53%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Countrywide Credit Industries 101,576 101,576
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Financial Guarantee Insurance (1.71%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
MBIA 15,277 15,277
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
PMI Group 76,288 47,680 123,968
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Radian Group 126,972 126,972
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Food-Confectionery (0.79%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Hershey Foods 149,661 149,661
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Food-Dairy Products (0.65%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Dean Foods 1 123,717 123,717
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Food-Meat Products (0.13%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Smithfield Foods 1 13,986 13,986
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Food-Miscellaneous/Diversified (0.98%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
H.J. Heinz 45,024 45,024
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
McCormick 155,680 155,680
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Sara Lee 63,924 63,924
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Food-Retail (0.43%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Kroger 47,488 47,488
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Forestry (0.73%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Plum Creek Timber 138,238 138,238
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Gas-Distribution (0.36%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Sempra Energy 39,852 39,852
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Gold Mining (1.78%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Barrick Gold 85,899 85,899
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Newmont Mining 253,133 253,133
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Health Care Cost Containment (1.19%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Caremark Rx 1 132,750 132,750
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Hospital Beds & Equipment (1.20%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Hillenbrand Industries 227,656 227,656
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Human Resources (0.37%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Manpower 40,920 40,920
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Independent Power Producer (0.70%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Calpine 1 66,200 66,200
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Mirant 1 11,556 11,556
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Instruments-Controls (0.49%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Johnson Controls 78,780 78,780
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Parker Hannifin 21,815 21,815
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Thermo Electron 1 33,102 33,102
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Insurance Brokers (0.22%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Arthur J. Gallagher 24,138 24,138
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Internet Brokers (0.04%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
E*trade Group 1 4,500 4,500
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Internet Security (0.43%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Network Associates 1 47,670 47,670
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Investment Management & Advisory Services (0.45%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Affiliated Managers Group 1 41,536 41,536
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Federated Investors 66,464 66,464
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
John Nuveen 130,080 130,080
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Waddell & Reed Financial 8,750 8,750
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Life & Health Insurance (1.41%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Aflac 126,630 126,630
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Nationwide Financial Services 56,231 56,231
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Torchmark 84,846 84,846
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Lottery Services (1.12%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Gtech Holdings 1 220,870 124,800 345,670
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Machinery Tools & Related Products (0.28%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Kennametal 31,170 31,170
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Machinery-Pumps (0.47%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Flowserve 1 8,204 8,204
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Graco 90,255 90,255
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical Information System (1.33%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
IMS Health 252,822 252,822
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical Instruments (4.65%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Beckman Coulter 123,097 25,065 148,162
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Biomet 187,071 187,071
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Boston Scientific 1 237,069 237,069
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Edwards Lifesciences 1 146,433 146,433
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
St. Jude Medical 1 192,294 131,757 324,051
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical Laboratory & Testing Service (1.71%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Covance 1 37,876 37,876
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Laboratory Corp. of America Holdings 1 81,940 81,940
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Quest Diagnostics 1 70,213 70,213
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical Products (0.78%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Varian Medical Systems 1 197,702 86,796 284,498
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical Sterilization Product (0.72%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Steris 1 79,590 79,590
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical-Biomedical/Gene (2.95%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Icos 1 61,775 61,775
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Idec Pharmaceuticals 1 147,264 147,264
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
InterMune 1 51,422 51,422
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Protein Design Labs 1 4,980 4,980
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Telik 1 61,950 61,950
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical-Drugs (1.33%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cephalon 1 90,432 90,432
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Vertex Pharmaceuticals 1 56,869 56,869
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical-HMO (1.48%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Anthem 1 74,970 138,600 213,570
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Health Net 1 25,740 25,740
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical-Hospitals (1.17%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Health Management Associates 1 242,824 242,824
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
LifePoint Hospitals 1 62,700 62,700
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Universal Health Services 1 215,251 67,872 283,123
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical-Outpatient & Home Medical Care (0.57%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Apria Healthcare Group 1 63,414 63,414
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Medical-Wholesale Drug Distribution (1.20%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
AmerisourceBergen 228,392 228,392
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Metal-Diversified (0.58%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Freeport-McMoran Copper & Gold 1 111,020 111,020
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Miscellaneous Investing (8.19%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
AMB Property 237,984 237,984
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Boston Properties 80,682 80,682
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Chelsea Property Group 104,160 104,160
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Equity Residential Properties Trust 231,246 231,246
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Hospitality Properties Trust 143,968 143,968
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Kimco Realty 281,790 281,790
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Prologis Trust 212,960 212,960
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Public Storage 177,991 177,991
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
United Dominion Realty Trust 89,466 89,466
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Motion Pictures & Services (0.38%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Metro-Goldwyn-Mayer 1 42,240 42,240
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Multi-line Insurance (3.35%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Allmerica Financial 38,295 38,295
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
American Financial Group 67,222 67,222
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Hartford Financial Services 71,100 71,100
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Loews 1 78,000 78,000
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
MetLife 31,044 31,044
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Old Republic International 86,449 86,449
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Multimedia (0.10%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Media General 10,940 10,940
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Networking Products (0.74%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
3Com 1 12,657 12,657
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Emulex 1 35,900 35,900
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Extreme Networks 1 34,101 34,101
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Non-hazardous Waste Disposal (1.17%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Allied Waste Industries 1 39,935 39,935
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Republic Services 1 222,264 222,264
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Oil Company-Exploration & Production (1.25%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Apache 63,520 63,520
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Devon Energy 174,730 174,730
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Murphy Oil 8,383 8,383
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Ocean Energy 48,438 48,438
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
XTO Energy 128,667 128,667
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Oil Company-Integrated (0.53%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Marathon Oil 100,947 100,947
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Oil Field Machinery & Equipment (0.36%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cooper Cameron 1 69,930 69,930
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
FMC Technologies 1 24,050 24,050
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
National-Oilwell 1 68,597 68,597
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Oil-Field Services (1.13%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
BJ Services 1 116,467 116,467
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Weatherford International 1 98,499 56,056 154,555
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Oil & Gas Drilling (2.85%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
GlobalSantaFe 128,200 128,200
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Nabors Industries 1 17,485 17,485
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Noble 1 84,032 84,032
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Precision Drilling 1 44,395 44,395
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Pride International 1 43,028 43,028
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Oil Refining & Marketing (0.20%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Sunoco 11,992 11,992
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Valero Energy 10,563 10,563
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Paper & Related Products (0.90%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Boise Cascade 116,571 116,571
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Bowater 71,169 71,169
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Temple-Inland 28,714 28,714
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Pipelines (0.77%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Enbridge Energy Management 1 152,040 152,040
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Equitable Resources 92,560 92,560
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Kinder Morgan Management 1 75,823 75,823
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Questar 147,060 147,060
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Poultry (0.21%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Tyson Foods 23,081 23,081
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Power Converter & Supply Equipment (0.47%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
American Power Conversion 1 89,148 89,148
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Printing-Commercial (0.90%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Valassis Communications 1 171,312 103,200 274,512
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Property & Casualty Insurance (1.63%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
ACE 24,600 24,600
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Fidelity National Financial 284,635 284,635
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Leucadia National 26,257 26,257
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Publicly Traded Investment Fund (7.59%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
iShares Russell 2000 Index Fund 255,303 255,303
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
iShares S&P MidCap 400 Fund 207,351 207,351
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
iShares S&P SmallCap 600 Index Fund 272,214 272,214
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Standard & Poor's MidCap 400 Depository Receipts 710,178 710,178
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Publishing-Books (0.52%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Scholastic 1 57,395 57,395
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Publishing-Periodicals (0.88%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Readers Digest Association 97,560 97,560
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Recreational Centers (0.53%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Bally Total Fitness Holding 1 58,480 58,480
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Regional Banks (1.09%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Comerica 113,516 113,516
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
PNC Financial Services Group 8,132 8,132
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Reinsurance (1.14%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Everest Re Group 261,090 98,634 359,724
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Platinum Underwriters Holdings 1 27,610 27,610
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Rental-Auto & Equipment (0.07%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
United Rentals 1 7,930 7,930
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Retail-Apparel & Shoe (1.15%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Abercrombie & Fitch 1 42,768 42,768
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Foot Locker 1 68,600 68,600
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Ross Stores 16,740 16,740
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Retail-Bedding (0.57%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Linens 'N Things 1 63,477 63,477
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Retail-Bookstore (1.21%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Barnes & Noble 1 75,960 75,960
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Borders Group 1 58,582 58,582
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Retail-Consumer Electronics (0.39%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Circuit City Stores 43,604 43,604
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Retail-Discount (1.63%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
BJ's Wholesale Club 1 58,638 58,638
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Dollar General 69,800 69,800
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Dollar Tree Stores 1 52,580 52,580
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Retail-Jewelry (0.53%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Tiffany 100,531 100,531
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Retail-Mail Order (0.17%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Williams-Sonoma 1 19,040 19,040
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Retail-Restaurants (0.72%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
CBRL Group 11,715 11,715
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cheesecake Factory 1 13,560 13,560
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Outback Steakhouse 1 54,480 54,480
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Retail-Toy Store (0.29%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Toys R Us 1 31,968 31,968
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Savings & Loans-Thrifts (1.92%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Charter One Financial 254,352 85,420 339,772
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Downey Financial 27,090 27,090
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Golden State Bancorp 110,738 33,111 143,849
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Semiconductor Component-Integrated Circuits (1.11%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Atmel 1 16,700 16,700
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Integrated Device Technology 1 106,672 106,672
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Semiconductor Equipment (0.72%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Teradyne 1 79,926 79,926
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Steel-Producers (0.14%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
AK Steel Holding 1 15,928 15,928
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Therapeutics (2.91%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Gilead Sciences 1 149,382 149,382
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Isis Pharmaceuticals 1 52,704 52,704
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Scios 1 121,212 121,212
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Tobacco (4.48%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RJ Reynolds Tobacco Holdings 314,668 28,385 343,053
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
UST 538,384 538,384
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Tools-Hand Held (0.41%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Stanley Works 45,318 45,318
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Toys (0.74%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Hasbro 82,782 82,782
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Mattel 201,593 201,593
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Transport-Air Freight (0.29%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
CNF 32,190 32,190
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Transport-Equipment & Leasing (0.32%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Gatx 36,090 36,090
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Transport-Truck (0.32%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Swift Transportation 1 35,398 35,398
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Water (1.11%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
American Water Works 211,362 211,362
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Wireless Equipment (0.07%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Powerwave Technologies 1 6,915 6,915
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Stratex Networks 920 920
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Total Common Stocks 17,218,503 10,628,654 27,847,157
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Commercial Paper (9.46%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Finance-Mortgage Loan/Banker (9.46%)
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Investment in Joint Trading Account; Federal Home Loan Bank System
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
1.72%; 11/01/02 1,801,313 1,801,313
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Total Commercial Paper 1,801,313 1,801,313
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Total Portfolio Investments (95.62%) 19,019,816 10,628,654 29,648,470
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Cash and receivables, net of liabilities (4.38%) 23,181 486,818 509,999
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Total Net Assets (100.00%) 19,042,997 11,115,472 30,158,469
- ------------------------------------------------------------------=====================================================
- ------------------------------------------------------------------=====================================================
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
1 Non-income producing security.
- -----------------------------------------------------------------------------------------------------------------------
PART C: OTHER INFORMATION
Item 15. Indemnification.
The information required in response to this item is incorporated herein by
reference to Item 25 of Post-Effective Amendment No. 27 to Registrant's
Registration Statement on Form N-1A (File No. 33-59474) as filed with the
Commission on February 25, 2003.
Item 16. Exhibits.
Exhibit Number Description
(1)(a) Articles of Amendment and Restatement of the Charter of the
Registrant - incorporated herein by reference to Exhibit (a)(1)c to
Post-Effective Amendment No. 26 to Registrant's Registration Statement
on Form N-1A (File No. 33-59474) as filed with the Commission on
December 30, 2002.
(1)(b) Articles Supplementary are incorporated herein by reference to
Exhibit (a)(4) to Post-Effective Amendment No. 19, 26 and 27 to
Registrant's Registration Statement on Form N1-A (File No. 33-59474)
as filed with the Commission on October 12, 2001, December 30, 2002
and February 25, 2003 respectively.
(2) By-Laws of the Registrant - incorporated herein by reference to
Exhibit (b) to Post-Effective Amendment No. 12 to Registrant's
Registration Statement on Form N-1A (File No. 33-59474) as filed with
the Commission on September 22, 2000.
(3) None
(4) Copy of Plan of Acquisition (included as Appendix A to the Information
Statement/Prospectus, which is part of the Registration Statement on
Form N-14).
(5) None
(6)(a) Management Agreement with Principal Management Corporation -
incorporated herein by reference to Exhibit (d)(1)c to Post-Effective
Amendment No. 13 to Registrant's Registration Statement on Form N-1A
(File No. 33-59474) as filed with the Commission on December 5, 2000.
(6)(b) Sub-Advisory Agreement with Principal Global Investors LLC -
incorporated herein by reference to Exhibit (d)(2)c to Post-Effective
Amendment No. 26 to Registrant's Registration Statement on Form N-1A
(File No. 33-59474) as filed with the Commission on December 30, 2002.
(7)(a) Distribution Agreement - incorporated herein by reference to Exhibit
(e)(1)i to Post-Effective Amendment No. 26 to Registrant's
Registration Statement on Form N-1A (File No. 33-59474) as filed with
the Commission on December 30, 2002.
(7)(b) Dealer Selling Agreement - incorporated herein by reference to
Exhibit (e)(2) to Post-Effective Amendment No. 18 to Registrant's
Registration Statement on Form N-1A (File No. 33-59474) as filed with
the Commission on June 12, 2001.
(8) None
(9) Custody Agreement - incorporated herein by reference to Exhibit
(g)(2)b to Post-Effective Amendment No. 13 to Registrant's
Registration Statement on Form N-1A (File No. 33-59474) as filed with
the Commission on December 5, 2000.
(10)(a) 12b-1 Plan - Advisors Preferred Class Shares 12b-1 Plan is
incorporated herein by reference to Exhibit (m)(1) to Post-Effective
Amendment No. 12 to Registrant's Registration Statement on Form N-1A
(File No. 33-59474) as filed with the Commission on September 22,
2000.
(10)(b) 12b-1 Plan - Advisors Select Class Shares 12b-1 Plan - incorporated
herein by reference to Exhibit (m)(1) to Post-Effective Amendment No.
12 to Registrant's Registration Statement on Form N-1A (File No.
33-59474) as filed with the Commission on September 22, 2000.
(10)(c) 12b-1 Plan - Select Class Shares 12b-1 Plan.
(10)(d) 12b-1 Plan - Class J Shares 12b-1 Plan.
(10)(e) Rule 18f-3 - Multiple Class Distribution Plan - incorporated herein
by reference to Exhibit (o) to Post-Effective Amendment No. 12 to
Registrant's Registration Statement on Form N-1A (File No. 33-59474)
as filed with the Commission on September 22, 2000.
(11) Opinion and consent of Counsel regarding legality of securities being
registered.
(12) Opinion and consent of Counsel regarding certain tax matters and
consequences to shareholders.
(13) None
(14) Consent of Independent Auditors
(15) None
(16) Powers of attorney executed by L. D. Zimpleman, J. E. Aschenbrenner,
R. C. Eucher, J. D. Davis, P. A. Ferguson, R. W. Gilbert, B. A.
Lukavsky and W. C. Kimball.
(17)(a) Voting Instruction Form
(17)(b) Registrant's Rule 24f-2 Notice pursuant to Rule 24f-2 under the
Investment Company Act of 1940 for its fiscal year ended October 31,
2002 - incorporated herein by reference to Form 24f-2 filed with the
Commission on January 23, 2003.
Item 17. Undertakings.
The undersigned registrant agrees that prior to any public offering of the
securities registered through the use of a prospectus which is a part of this
registration statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act [17 CFR 230.145c], the
reoffering prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
The undersigned registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the registration
statement and will not be used until the amendment is effective, and that, in
determining any liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the securities offered
therein, and the offering of securities at that time shall be deemed to be the
initial bona fide offering of them.
2
SIGNATURES
As required by the Securities Act of 1933, this registration statement has been
signed on behalf of the registrant, in the City of Des Moines and the State of
Iowa, on the 10th day of March, 2003.
Principal Investors Fund, Inc.
By:____________________________________
Ralph C. Eucher
President
As required by the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
__________________________ March 10, 2003
R. C. Eucher Director and President
(Principal Executive Officer)
_(L. D. Zimpleman*)_______ Director and March 10, 2003
L. D. Zimpleman Chairman of the Board
_(J. E. Aschenbrenner*)___ Director March 10, 2003
J. E. Aschenbrenner
_(J. D. Davis*)___________ Director March 10, 2003
J. D. Davis
_(P. A. Ferguson*)________ Director March 10, 2003
P. A. Ferguson
_(R. W. Gilbert*)_________ Director March 10, 2003
R. W. Gilbert
_(B. A. Lukavsky*)________ Director March 10, 2003
B. A. Lukavsky
_(W. C. Kimball*)_________ Director March 10, 2003
W. C. Kimball
_______________________ Executive Vice President March 10, 2003
M. J. Beer and Chief Financial Officer
(Principal Financial and
Accounting Officer)
By:____________________________________
R. C. Eucher
Attorney-in-Fact *Pursuant to powers
of attorney previously filed
3
March 10, 2003
Board of Directors
Principal Investors Fund, Inc.
Des Moines, IA 50392-0200
RE Registration Statement on Form N-14
Pursuant to Securities Act of 1933
I am familiar with the proposed issuance by Principal Investors Fund, Inc. of
shares of each of its share classes of common stock of the MidCap Blend Fund
series, par value $.01 per share, in connection with the transfer to it of the
assets and liabilities of the Partners MidCap Blend Fund series pursuant to the
terms of a Plan of Acquisition (the "Shares"). I am also familiar with the
above-referenced Registration Statement (the "Registration Statement") filed
with the Securities and Exchange Commission relating to the offer and sale of
Shares. Based upon such investigation as I have deemed necessary, I am of the
opinion that the Shares, when issued in accordance with the terms described in
the Registration Statement, will be legally issued, fully paid and
non-assessable.
I hereby consent to the filing of this opinion as a exhibit to the Registration
Statement.
Very truly yours,
Michael D. Roughton
Counsel
4
February 18, 2003
Board of Directors
Principal Investor's Fund, Inc.
711 High Street
Des Moines, IA 50309
RE Acquisition of Partners MidCap Blend Fund
By MidCap Blend Fund
To the Board of Directors and Shareholders
MidCap Blend Fund intends to acquire all of the assets and assume all of the
liabilities of Partners MidCap Blend Fund ("Partners MidCap Blend") in a
transaction described in a Form N-14 Registration Statement to be filed with the
United States Securities and Exchange Commission (the "Registration Statement")
on or about March 10, 2003. You have asked for an opinion concerning the Federal
income tax consequences of the proposed transaction.
MidCap Blend Fund is a series fund, meaning a segregated portfolio of assets, of
Principal Investors Fund, Inc., a Maryland Corporation. Continuously since its
formation it has qualified as a regulated investment company for purposes of
Subchapter M of the United States Internal Revenue Code of 1986 (the "Code") and
has elected to be taxed as such.
Partners MidCap Blend is also a series fund of Principal Investors Fund, Inc.
Partners MidCap Blend, like MidCap Blend Fund, has qualified since its inception
as a regulated investment company for purposes of the Code, and has elected to
be taxed as such.
MidCap Blend Fund and Partners MidCap Blend are each a diversified, open-end
management company registered with the Securities and Exchange Commission and
various states.
MidCap Blend Fund will acquire all of the assets of Partners MidCap Blend, and
assume all of its liabilities, in exchange for MidCap Blend Fund shares.
Partners MidCap Blend will immediately liquidate and dissolve, distributing the
shares of MidCap Blend Fund to Partners MidCap Blend shareholders in retirement
of their Partners MidCap Blend shares. Each holder of shares of Partners MidCap
Blend will as a result of the transaction own shares of MidCap Blend Fund of
equal value.
5
Board of Directors
Page Two
February 18, 2003
In reliance on the information provided in the Registration Statement, I am of
the opinion that:
1. The acquisition of all of the assets and liabilities of Partners MidCap
Blend by MidCap Blend Fund in exchange for shares of MidCap Blend Fund,
followed by distribution of those shares of MidCap Blend Fund to
shareholders of Partners MidCap Blend in liquidation of Partners MidCap
Blend, will constitute a reorganization within the meaning of section
368(a)(1)(C) of the Code.
2. Shareholders of Partners MidCap Blend will recognize no gain or loss as a
consequence of the surrender of their shares of Partners MidCap Blend in
exchange for shares of MidCap Blend Fund pursuant to the liquidation of
Partners MidCap Blend. (Code Section 354).
3. The tax basis and holding period of shares of MidCap Blend Fund acquired in
exchange for shares of Partners MidCap Blend will be the same as the tax
basis and the holding period of the shares of Partners MidCap Blend
exchanged therefore. (Code Sections 354 and 1223).
4. Partners MidCap Blend will recognize no gain or loss on the transfer of all
of its assets to MidCap Blend Fund. (Code Section 361(a)).
5. The tax basis of the assets of Partners MidCap Blend in the hands of MidCap
Blend Fund will be the same as the tax basis of those assets in the hands
of Partners MidCap Blend immediately prior to the acquisition. (Code
Section 362(b)).
The foregoing opinions are based on the Code, current Treasury Regulations
issued thereunder, published administrative, interpretations thereof and
judicial decisions with respect thereto (collectively the "Tax Law") as of the
date hereof. No assurance can be given that the Tax Laws will not change.
I hereby consent to the use of this letter as an Exhibit to, and reference to it
in, the Registration Statement.
Sincerely yours,
Randy Bergstrom
Counsel to Principal Investors Fund, Inc.
6
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Financial Statements"
in the Statement of Additional Information and to the incorporation by reference
of our report dated November 27, 2002, with respect to the financial statements
and financial highlights of the MidCap Blend Fund and Partners MidCap Blend Fund
of the Principal Investors Fund, Inc. incorporated by reference in this
Registration Statement Under the Securities Act of 1933 (Form N-14), filed with
the Securities and Exchange Commission.
LOGO
/s/Ernst & Young LLP
Ernst & Young LLP
Des Moines, Iowa
March 7, 2003
7
logo
Principal
Financial
Group
Name Account No.: Account #
Address Shares: # of Shares
Address
City, State ZIP
Principal Investors Fund, Inc
Des Moines, Iowa 50392-2080
VOTING INSTRUCTION FORM FOR A SPECIAL MEETING OF SHAREHOLDERS
May 14, 2003
Principal Life Insurance Company, the custodian of your Individual Retirement
Account, is soliciting instructions, as provided in the IRA Custodial Agreement,
for voting Class J shares of the Partners MidCap Blend Fund, a series of
Principal Investors Fund, Inc., at the Special Meeting of the Fund to be held on
May 14, 2003 at 2:00 p.m. C.D.T.
Please check the appropriate box on the back of this form, date and sign exactly
as your name appears. Your signature acknowledges receipt of Notice of Special
Meeting of Shareholders and Information Statement dated April 10, 2003. If you
complete, sign and return the form, Principal Life Insurance Company will vote
as you have instructed. If you simply sign and return the form, it will be voted
FOR the proposal. If your instructions are not received, votes will be cast in
proportion to the instructions received from all plan participants with a voting
interest in the same share class of this Series. The Board of Directors of the
Fund recommends that you vote FOR the following proposal. Please mark your
choices by filling in the appropriate box below. Sign and return the voting
instruction form as soon as possible in the enclosed envelope.
Voting Instruction
I hereby instruct Principal Life Insurance Company, as custodian of my
IRA, to vote all of the full and fractional Class J shares of the
International SmallCap Fund included in my IRA as indicated below.
Receipt of the Notice of the Special Shareholders Meeting and of the
Information Statement for said Special Meeting is acknowledged.
Discretionary authority is hereby conferred as to all other matters as
may properly come before the meeting.
1. Approval of a Plan of Acquisition and the transactions contemplated
thereby, pursuant to which the MidCap Blend Fund, a series of
Principal Investors Fund, Inc., will acquire all the assets and
assume all the liabilities of the Partners MidCap Blend Fund and
issue in exchange shares of its Preferred Class, Advisors Preferred
Class, Select Class, Advisors Select Class, Institutional Class,
and Class J common stock and the Partners MidCap Blend Fund will
distribute those shares to its Preferred Class, Advisors Preferred
Class, Select Class, Advisors Select Class, Institutional Class,
and Class J shareholders in redemption of all its outstanding
shares and then dissolve.
______ FOR _____ AGAINST _____ ABSTAIN
NOTE: Please sign exactly as your name appears on this form.
Signature_______________________________ _______________________ , 2003