UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-07923
CNI CHARTER FUNDS
(Exact name of registrant as specified in charter)
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400 North Roxbury Drive
Beverly Hills, CA 90210
(Address of principal executive offices) (Zip code)
SEI Investments Distributors
1 Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-888-889-0799
DATE OF FISCAL YEAR END: SEPTEMBER 30, 2006
DATE OF REPORTING PERIOD: MARCH 31, 2006
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO OMITTED]
AMERICAN HOSPITAL
ASSOCIATION
CNI CHARTER FUNDS(SM) [LOGO OMITTED]
AHA INVESTMENT FUNDS
A SERIES OF CNI CHARTER FUNDS
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SEMI - ANNUAL REPORT - MARCH 31, 2006
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AHA Limited Maturity Fixed Income Fund
AHA Full Maturity Fixed Income Fund
AHA Balanced Fund
AHA Diversified Equity Fund
AHA Socially Responsible Equity Fund www.ahafunds.org
www.cnicharterfunds.com
AHA INVESTMENT FUNDS
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SHAREHOLDER LETTER
March 31, 2006
Dear Shareholder:
March 31st marks the first six months since the AHA Investment Funds'
reorganization into the CNI Charter Funds, a $4 billion fund family. The
successful completion of the reorganization was achieved with 90-100% of shares
voting approval for each of the five AHA Investment Funds. As part of this
combination we have adopted the CNI Charter Funds fiscal year end of September
30th and therefore are sending you this semi-annual report in fulfillment of our
new mid-year communication.
Other significant events during the first half of our new fiscal year include
adding two new fixed income managers. City National Asset Management, Inc.
("CNAM") was added as co-manager of the AHA Limited Maturity Fixed Income Fund.
CNAM manages the short-term bond portfolio within the 1-5 year "limit" of the
fund's guidelines. They were selected to complement Patterson Capital
Corporation ("Patterson Capital"), manager of the fund since its inception in
1988, benchmarked against a 1-3 year benchmark. Patterson Capital generally
maintains a portfolio with a conservative shorter "core" exposure. CNAM is the
"alpha" or more proactive manager as they can move the average weighted duration
of the fund longer or shorter as the economic environment requires, which is
especially useful during periods when the Federal Reserve Bank ("Fed") is
enacting a change in interest rates.
Boyd Watterson Asset Management ("BWAM") was added as the intermediate manager
in the AHA Full Maturity Fixed Income Fund. BWAM was chosen to serve as a
counterweight to the longer maturity manager, Baird Advisors. Here BWAM is the
"alpha", or more aggressive manager of this pair, moving their duration
strategically in a range of +/- 20% of the Lehman Intermediate Government/Credit
Index, which enables BWAM to shift the fund's weighted average duration shorter
in rising interest rate cycles and extend duration when rates fall. Baird by
contrast is the "core" manager and generally maintains a portfolio duration that
is very near the duration of the Lehman Aggregate Bond Index.
RESULTS FOR THE SIX MONTHS ENDED MARCH 31, 2006 (all returns represent
Institutional Class Fund results).
AHA LIMITED MATURITY FIXED INCOME FUND
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The total net return for this Fund was 0.89% vs. 0.99% for the following blended
index return: 75% Merrill Lynch 1-3 year Treasury and 25% Lehman 1-5 year
Government/Credit Indices, as CNAM began managing their portion of this fund
October 1, 2005. In terms of credit quality the Fund does not invest in
securities below "A" and over the six months the average weighted credit quality
was "AA". Reflecting trends in the short term bond market in particular, which
were initiated by the Federal Reserve Bank, the average market yield on the Fund
rose from 4.50% on October 1st to 5.50% at March 31st.
AHA FULL MATURITY FIXED INCOME FUND
- -----------------------------------
The six month total net return for this Fund was -0.18% vs 0.12% for its
benchmark. During this period, the intermediate and longer maturity bond market
finally started to register the effects of the Fed's interest rate increases
with the Lehman Intermediate Government/Credit Index up only 0.12% and the
Lehman Aggregate Bond Index off -0.05%. After two years of holding firm, rates
at the ten year and longer maturities on the yield curve finally started to rise
around October 2005, which led to underlying price decreases as the bond market
adjusted to market and Fed forces (bond prices and yields move in opposite
directions). There was a brief interest rate "inversion" in late 2005-early
2006, where short term yields were actually higher than long term, but that is
not a normal yield curve and it corrected itself quickly. The Fund's average
duration went from a defensive 3.5 years at October 1st with 10% in cash to 4.1
years and 1% cash by March 31st as the managers have come to believe that the
Fed is near the end of its interest rate increases. While the lengthening the
duration did lower overall returns in the period as shorter durations performed
better, the reason for this move is the managers' strategy that it is expected
to be favorable in the future to have a slightly longer duration as the bond
market stabilizes closer to the end of the Fed cycle of hikes since inflation is
not rising as quickly as was once feared and the overall economy continues to
perform well.
The Fund overweighted agencies and mortgage-backed securities as rising interest
rates have slowed down the rate of mortgage prepayments and they have a yield
advantage over Treasuries, which were underweighted. The Fund was neutral to
underweight in corporates as their yield advantage diminished.
1
AHA INVESTMENT FUNDS
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SHAREHOLDER LETTER (CONTINUED)
March 31, 2006
AHA BALANCED FUND
- -----------------
This Fund provided a 4.84% net return for the half fiscal year vs. its
benchmark's 3.96% return, which is comprised of 60% S&P 500 Index/30% Lehman
Aggregate Bond Index/10% Merrill Lynch 3-Month U.S. Treasury Index. This Fund
combines the equity management described in the AHA Diversified Equity Fund
below and the Lehman Aggregate portfolio of the AHA Full Maturity Fund.
AHA DIVERSIFIED EQUITY FUND
- ---------------------------
For the half year the Fund's net return was 6.76% vs 6.38% for the S&P 500
Index. Sector holdings during this period that aided performance over the S&P
500 included concentrations in energy stocks, which benefited from rising
prices, and financials, which were strong performers earlier in the half year.
Also, avoiding utilities, which were depressed as their capital structure was
negatively effected by rising interest rates, helped returns lead the index.
However, being underweight in the telecommunications sector, which rose due to
merger activity, and industrials, which rose with strong manufacturing and
economic growth, dampened potential returns.
AHA SOCIALLY RESPONSIBLE EQUITY FUND
- ------------------------------------
In the last six months, this Fund has provided a net return of 5.22% compared to
its benchmark, the Domini Social 400 Index, at 5.56%. This Fund's performance
for the period was determined by concentrations in financials, consumer
discretionary and utilities sectors, which lagged due to the impact of rising
interest rates and their effect on consumer spending and the interest sensitive
utility companies. Higher index weightings in energy, materials and industrials
had a positive impact on the Fund as they benefited from rising prices for oil,
gas, raw materials and the booming manufacturing sector.
The AHA Socially Responsible Fund follows guidelines which restrict holdings in
alcohol, tobacco, gambling, abortion, weaponry and nuclear power. It also seeks
holdings in companies which are involved in community relations, corporate
governance, employee relations, environmental sustainability, human rights and
product safety.
The AHA Investment Funds are able to enjoy the benefits of the CNI Charter
Funds' platform and now have agreements with City National Bank, Diversified
Investment Advisors and Wachovia Bank to provide investment account services.
You can also visit us on two websites: www.ahafunds.org or
www.cnicharterfunds.com.
Thank you for your confidence and trust,
Sincerely,
/s/ Timothy G. Solberg
Timothy G. Solberg, CFA
Chief Investment Officer
AHA Investment Funds, a series of the CNI Charter Funds
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
Opinions expressed above are subject to change, are not guaranteed, and should
not be considered a recommendation to buy or sell any security. Please refer to
the statement of net assets in the report for fund holdings. Portfolio holdings
and sector allocations are subject to change.
The advisor has an agreement in place to waive fees. In the absence of such
waivers, total return would be reduced.
Mutual Fund investing involves risk. Principal loss is possible.
CHANGING INTEREST RATES WILL ADVERSELY AFFECT THE VALUE OF AN INVESTMENT IN THE
AHA LIMITED AND FULL MATURITY FUNDS.
The BARRA S&P 500 Index is a broad based unmanaged index of 500 stocks which is
widely recognized as representative of the equity market in general. The Lehman
Brothers Intermediate Government/Corporate Bond Index is a market value weighted
performance benchmark for government and corporate fixed-rate debt issues with
maturities between one and ten years. The Merrill Lynch 1 - 3 Treasury Year
Index is a market value weighted index of U.S. Treasury securities with
maturities of 1 - 3 years.
This material must be preceded or accompanied by a current prospectus. Please
read it carefully before you invest or send money.
Distributed by SEI Investments Distribution Co. (SIDCo).
2
AHA INVESTMENT FUNDS
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ADDITIONAL INFORMATION - EXPENSE EXAMPLES (UNAUDITED)
March 31, 2006
As a Class I shareholder of the AHA Limited Maturity Fund, the AHA Full Maturity
Fund, the AHA Balanced Fund, the AHA Diversified Fund and the AHA Socially
Responsible Fund (each a "Fund" and collectively, the "Funds"), you will incur
ongoing costs, including management fees and other Fund expenses. As a Class A
shareholder of the AHA Limited Maturity Fund, the AHA Full Maturity Fund, the
AHA Diversified Fund and the AHA Socially Responsible Fund, you will incur
ongoing costs and distribution fees. The examples below are intended to help you
understand your ongoing costs (in dollars) of investing in the Funds and to
compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 for the six months ended March
31, 2006.
ACTUAL EXPENSES
The first line of the tables below provides information about actual account
values and actual expenses. The Funds charge no sales load or transaction fees,
but do assess shareholders of IRA accounts a $25.00 annual maintenance fee by
Citigroup Fund Services, LLC (formerly, Forum Shareholder Services, LLC), the
Funds' sub-transfer agent. To the extent the Funds invest in shares of other
investment companies as part of their investment strategies, you will indirectly
bear your proportionate share of any fees and expenses charged by the underlying
funds in which the Funds invest, in addition to the expenses of the Funds.
Actual expenses of the underlying funds are expected to vary among the various
underlying funds. These expenses are not included in the example below. The
example below includes, but is not limited to, management fees, shareholder
servicing fees, fund accounting, custody and transfer agent fees. However, the
example below does not include portfolio trading commissions, related expenses
and other extraordinary expenses as determined under generally accepted
accounting principles. You may use the information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During Period" to estimate the
expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Funds' actual expense
ratios and an assumed rate of return of 5% per year before expenses, which does
not the represent the Funds' actual returns. The hypothetical account values and
expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Funds and other funds. To do so, compare this
5% hypothetical example with the 5% hypothetical examples that appear in the
shareholder reports of the other funds. Please note that the expenses shown in
the table are meant to highlight your ongoing costs only and do not reflect any
transactional costs. Therefore, the second line of the table is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher. Ending account values and expenses
paid during the period are based on a hypothetical 2.50% rate of return. The
rate of return is considered before expenses are deducted from the Fund.
AHA LIMITED MATURITY - CLASS I Beginning Account Ending Account Expenses Paid During Period(2)
Value 10/01/05 Value 03/31/06 10/01/05 - 03/31/06
----------------- -------------- ------------------------------
Actual(1) $ 1,000.00 $ 1,008.90 $ 3.76
Hypothetical $ 1,000.00 $ 1,021.19 $ 3.78
(1) Ending account values and expenses paid during period are based on an
actual 0.89% rate of return. The rate of return is considered after
expenses are deducted from the Fund.
(2) Expenses are equal to the Fund's annualized expense ratio of 0.75%,
multiplied by the average account value over the period, multiplied by
182/365 (to reflect the six-month period).
AHA LIMITED MATURITY - CLASS A Beginning Account Ending Account Expenses Paid During Period(2)
Value 10/01/05 Value 03/31/06 10/01/05 - 03/31/06
----------------- -------------- ------------------------------
Actual(1) $ 1,000.00 $ 1,007.10 $ 4.99
Hypothetical $ 1,000.00 $ 1,019.96 $ 5.02
(1) Ending account values and expenses paid during period are based on an
actual 0.71% rate of return. The rate of return is considered after
expenses are deducted from the Fund.
(2) Expenses are equal to the Fund's annualized expense ratio of 1.00%,
multiplied by the average account value over the period, multiplied by
182/365 (to reflect the six-month period).
3
AHA INVESTMENT FUNDS
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ADDITIONAL INFORMATION - EXPENSE EXAMPLES (UNAUDITED) (CONTINUED)
March 31, 2006
AHA FULL MATURITY - CLASS I Beginning Account Ending Account Expenses Paid During Period(2)
Value 10/01/05 Value 03/31/06 10/01/05 - 03/31/06
----------------- -------------- ------------------------------
Actual(1) $ 1,000.00 $ 998.20 $ 3.99
Hypothetical $ 1,000.00 $ 1,020.94 $ 4.03
(1) Ending account values and expenses are paid during period based on an
actual (0.18)% rate of return. The rate of return is considered after
expenses are deducted from the Fund.
(2) Expenses are equal to the Fund's annualized expense ratio of 0.80%,
multiplied by the average account value over the period, multiplied by
182/365 (to reflect the six-month period).
AHA FULL MATURITY - CLASS A Beginning Account Ending Account Expenses Paid During Period(2)
Value 10/01/05 Value 03/31/06 10/01/05 - 03/31/06
----------------- -------------- ------------------------------
Actual(1) $ 1,000.00 $ 996.00 $ 5.22
Hypothetical $ 1,000.00 $ 1,019.70 $ 5.29
(1) Ending account values and expenses are paid during period based on an
actual (0.40)% rate of return. The rate of return is considered after
expenses are deducted from the Fund.
(2) Expenses are equal to the Fund's annualized expense ratio of 1.05%,
multiplied by the average account value over the period, multiplied by
182/365 (to reflect the six-month period).
AHA BALANCED - CLASS I Beginning Account Ending Account Expenses Paid During Period(2)
Value 10/01/05 Value 03/31/06 10/01/05 - 03/31/06
----------------- -------------- ------------------------------
Actual(1) $ 1,000.00 $ 1,048.40 $ 5.11
Hypothetical $ 1,000.00 $ 1,019.95 $ 5.04
(1) Ending account values and expenses are paid during period based on an
actual 4.84% rate of return. The rate of return is considered after
expenses are deducted from the Fund.
(2) Expenses are equal to the Fund's annualized expense ratio of 1.00%,
multiplied by the average account value over the period, multiplied by
182/365 (to reflect the six-month period).
AHA DIVERSIFIED - CLASS I Beginning Account Ending Account Expenses Paid During Period(2)
Value 10/01/05 Value 03/31/06 10/01/05 - 03/31/06
----------------- -------------- ------------------------------
Actual(1) $ 1,000.00 $ 1,067.60 $ 5.21
Hypothetical $ 1,000.00 $ 1,019.89 $ 5.09
(1) Ending account values and expenses are paid during period based on an
actual 6.76% rate of return. The rate of return is considered after
expenses are deducted from the Fund.
(2) Expenses are equal to the Fund's annualized expense ratio of 1.01%,
multiplied by the average account value over the period, multiplied by
182/365 (to reflect the six-month period).
AHA DIVERSIFIED - CLASS A Beginning Account Ending Account Expenses Paid During Period(2)
Value 10/01/05 Value 03/31/06 10/01/05 - 03/31/06
----------------- -------------- ------------------------------
Actual(1) $ 1,000.00 $ 1,066.20 $ 6.49
Hypothetical $ 1,000.00 $ 1,018.65 $ 6.34
(1) Ending account values and expenses are paid during period based on an
actual 6.62% rate of return. The rate of return is considered after
expenses are deducted from the Fund.
(2) Expenses are equal to the Fund's annualized expense ratio of 1.26%,
multiplied by the average account value over the period, multiplied by
182/365 (to reflect the six-month period).
AHA SOCIALLY RESPONSIBLE - CLASS I Beginning Account Ending Account Expenses Paid During Period(2)
Value 10/01/05 Value 03/31/06 10/01/05 - 03/31/06
----------------- -------------- ------------------------------
Actual(1) $ 1,000.00 $ 1,052.20 $ 5.32
Hypothetical $ 1,000.00 $ 1,019.75 $ 5.24
(1) Ending account values and expenses are paid during period based on an
actual 5.22% rate of return. The rate of return is considered after
expenses are deducted from the Fund.
(2) Expenses are equal to the Fund's annualized expense ratio of 1.04%,
multiplied by the average account value over the period, multiplied by
182/365 (to reflect the six-month period).
AHA SOCIALLY RESPONSIBLE - CLASS A Beginning Account Ending Account Expenses Paid During Period(2)
Value 10/01/05 Value 03/31/06 10/01/05 - 03/31/06
----------------- -------------- ------------------------------
Actual(1) $ 1,000.00 $ 1,050.30 $ 6.63
Hypothetical $ 1,000.00 $ 1,018.46 $ 6.53
(1) Ending account values and expenses are paid during period based on an
actual 5.03% rate of return. The rate of return is considered after
expenses are deducted from the Fund.
(2) Expenses are equal to the Fund's annualized expense ratio of 1.29%,
multiplied by the average account value over the period, multiplied by
182/365 (to reflect from the six month period).
4
AHA INVESTMENT FUNDS
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ASSET ALLOCATIONS* (UNAUDITED)
March 31, 2006
AHA LIMITED MATURITY FIXED INCOME FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
Corporate Bonds - 45.5%
U.S. Government Agency Obligations - 16.5%
U.S. Government Mortgage-Backed Obligations - 11.7%
Mortgage-Backed Securities - 9.2%
Asset-Backed Securities - 8.9%
U.S. Treasury Obligations - 7.1 %
Cash Equivalents - 1.1%
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AHA FULL MATURITY FIXED INCOME FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
Corporate Bonds - 32.1%
U.S. Government Mortgage-Backed Obligations - 21.8%
U.S. Treasury Obligations - 16.0%
U.S. Government Agency Obligations - 10.1%
Mortgage-Backed Securities - 5.9%
Asset-Backed Securities - 4.6%
Repurchase Agreement - 4.5%
Commercial Paper - 2.1%
Cash Equivalents - 1.9%
Foreign Government Bonds - 0.6%
Registered Investment Company - 0.3%
Municipal Bond - 0.1%
- --------------------------------------------------------------------------------
* Percentages based on total investments.
5
AHA INVESTMENT FUNDS
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ASSET ALLOCATIONS* (UNAUDITED)
March 31, 2006
AHA BALANCED FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
Common Stock - 60.4%
U.S. Government Mortgage-Backed Obligations - 8.3%
Corporate Bonds - 7.4%
Mortgage-Backed Securities - 6.1%
U.S. Treasury Obligations - 5.2%
Repurchase Agreement - 4.5%
Cash Equivalents - 2.9%
Asset-Backed Securities - 2.2%
Commercial Paper - 2.1%
Foreign Government Bonds - 0.5%
Registered Investment Company - 0.3%
Municipal Bond - 0.1%
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AHA DIVERSIFIED EQUITY FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
Common Stock - 91.9%
Cash Equivalents - 5.2%
Repurchase Agreement - 1.9%
Commercial Paper - 0.9%
Registered Investment Company - 0.1%
- --------------------------------------------------------------------------------
AHA SOCIALLY RESPONSIBLE EQUITY FUND
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
- --------------------------------------------------------------------------------
Common Stock - 93.0%
Cash Equivalents - 4.3%
Repurchase Agreement - 1.8%
Commercial Paper - 0.8%
Registered Investment Company - 0.1%
- --------------------------------------------------------------------------------
* Percentages based on total investments.
6
AHA LIMITED MATURITY FIXED INCOME FUND
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STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [45.2%]
ALUMINUM [1.1%]
Alcoa
4.250%, 08/15/07 $ 800 $ 788
==========================================================================
BANKS [5.9%]
Bank of America
7.400%, 01/15/11 750 811
Bank of New York, Ser E, MTN
2.200%, 05/12/06 500 499
JPMorgan Chase
5.625%, 08/15/06 750 751
Wachovia
4.850%, 07/30/07 1,000 994
Washington Mutual
5.625%, 01/15/07 1,000 1,002
--------------------------------------------------------------------------
TOTAL BANKS 4,057
==========================================================================
BEAUTY PRODUCTS [1.1%]
Procter & Gamble
6.875%, 09/15/09 750 788
==========================================================================
BUSINESS SERVICES [2.9%]
Hewlett-Packard
5.750%, 12/15/06 750 752
International Business Machines
6.450%, 08/01/07 1,200 1,218
--------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 1,970
==========================================================================
COMPUTER SYSTEM DESIGN & SERVICES [1.1%]
IBM
4.375%, 06/01/09 750 732
==========================================================================
DIVERSIFIED MANUFACTURING [0.8%]
Honeywell
7.000%, 03/15/07 510 517
==========================================================================
ENERGY [2.8%]
FPL Group Capital
6.125%, 05/15/07 1,925 1,940
==========================================================================
FINANCIAL SERVICES [12.8%]
Caterpillar Financial Services, Ser F, MTN
3.625%, 11/15/07 795 775
CIT Group
5.750%, 09/25/07 700 704
Countrywide Home Loan, Ser K, MTN
5.625%, 05/15/07 1,000 1,003
4.250%, 12/19/07 955 937
General Electric Capital, Ser A, MTN
5.000%, 06/15/07 750 748
HSBC Finance
5.750%, 01/30/07 1,855 1,863
International Lease Finance
5.625%, 06/01/07 1,000 1,000
John Deere Capital
3.875%, 03/07/07 820 810
National Rural Utilities
3.875%, 02/15/08 975 951
--------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 8,791
==========================================================================
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
INSURANCE [1.6%]
United Health Group
5.200%, 01/17/07 $ 1,130 $ 1,130
==========================================================================
INVESTMENT BANKER/BROKER DEALER [6.7%]
Bear Stearns
5.700%, 01/15/07 200 201
Citigroup
6.500%, 01/18/11 750 783
Credit Suisse First Boston
6.125%, 11/15/11 750 770
Goldman Sachs Group
6.650%, 05/15/09 750 777
Lehman Brothers Holdings
4.000%, 01/22/08 600 587
Merrill Lynch
6.000%, 02/17/09 750 763
Morgan Stanley
5.800%, 04/01/07 750 753
--------------------------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 4,634
==========================================================================
RETAIL [4.3%]
Target
5.500%, 04/01/07 2,150 2,155
Wal-Mart Stores
6.875%, 08/10/09 750 786
--------------------------------------------------------------------------
TOTAL RETAIL 2,941
==========================================================================
TELEPHONES & TELECOMMUNICATIONS [4.1%]
AT&T
6.250%, 03/15/11 750 770
Verizon Global Funding
6.125%, 06/15/07 2,045 2,063
--------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 2,833
==========================================================================
TOTAL CORPORATE BONDS
(Cost $31,617) 31,121
====================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS [16.4%]
FHLB
5.020%, 11/07/08 1,500 1,492
3.625%, 06/20/07 3,575 3,512
2.750%, 03/14/08 850 814
FHLMC
2.375%, 02/15/07 1,460 1,426
FNMA
5.000%, 01/23/09 1,000 994
3.250%, 01/15/08 1,300 1,260
3.250%, 08/15/08 600 576
3.000%, 08/15/07 1,220 1,186
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $11,412) 11,260
====================================================================
See Notes to the Financial Statements.
7
AHA LIMITED MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [11.6%]
FHLMC, Ser R003, Cl AG
5.125%, 10/15/15 $ 1,167 $ 1,151
FHLMC, Ser R004, Cl Al
5.125%, 12/15/13 525 520
FNMA, Pool 541946
7.500%, 07/01/30 1 1
FNMA, Pool 584930
7.500%, 05/01/31 2 2
FNMA, Pool 837191
5.000%, 12/01/20 2,978 2,905
FNMA, Pool 837196
5.500%, 02/01/21 2,988 2,971
GNMA, Pool 864622
4.500%, 06/20/35 472 464
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $8,086) 8,014
=======================================================================
MORTGAGE-BACKED SECURITIES [9.2%]
Banc of America Commercial Mortgage,
Ser 2005-6, Cl A1
5.001%, 09/10/47 988 980
Bear Stearns Commercial Mortgage
Securities, Ser 2001-TOP2, Cl A1
6.080%, 02/15/35 676 681
GE Capital Commercial Mortgage,
Ser 2004-C2, Cl A1
3.111%, 03/10/40 1,176 1,135
GMAC Commercial Mortgage
Securities, Ser 2004-C3, Cl A2
3.950%, 12/10/41 1,075 1,046
JPMorgan Commercial Mortgage,
Ser 2005-IDP5 Cl A1
5.035%, 12/15/44 1,001 993
Morgan Stanley Capital Investments,
Ser 2005-T17, Cl A2
4.110%, 12/13/41 955 933
Volkswagen Auto Loan Enhanced Trust,
Ser 2005-1, Cl A3
4.800%, 07/20/09 545 542
--------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $6,466) 6,310
=======================================================================
ASSET-BACKED SECURITIES [8.9%]
BMW Vehicle Owner Trust,
Ser 2005-A, Cl A3
4.040%, 02/25/09 1,385 1,370
Capital Auto Receivables Asset Trust,
Ser 2004-2, Cl A3
3.580%, 01/15/09 710 695
Description Face Amount (000)/Shares Value (000)
- --------------------------------------------------------------------------------
Chase Manhattan Auto Owner Trust,
Ser 2003-A, Cl A4
2.060%, 12/15/09 $ 735 $ 719
Honda Auto Receivables Owner Trust,
Ser 2002-4, Cl A4
2.700%, 03/17/08 454 450
Honda Auto Receivables Owner Trust,
Ser 2004-3, Cl A4
3.280%, 02/18/10 770 743
Nissan Auto Receivables Owner Trust,
Ser 2004-B, Cl A3
3.350%, 05/15/08 740 732
Nissan Auto Receivables Owner Trust,
Ser 2005-A, Cl A4
3.820%, 07/15/10 750 729
Wells Fargo Financial Auto Owner Trust,
Ser 2005-A, Cl A3
4.090%, 01/15/10 680 670
--------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost $6,222) 6,108
=======================================================================
U.S. TREASURY OBLIGATIONS [7.0%]
U.S. TREASURY NOTES
4.625%, 02/29/08 1,100 1,095
4.125%, 08/15/10 1,350 1,313
3.875%, 01/15/09 2,297 2,405
--------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $4,879) 4,813
=======================================================================
CASH EQUIVALENTS [1.1%]
Fidelity Institutional Domestic
Money Market Portfolio, Cl I
4.590% (A) 380,017 380
Wachovia Institutional Trust, Cl I,
4.630% (A) 380,017 380
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $760) 760
=======================================================================
TOTAL INVESTMENTS [99.4%]
(Cost $69,442) 68,386
=======================================================================
See Notes to the Financial Statements.
8
AHA LIMITED MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Value (000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES:
Payable for Fund Shares Redeemed $ (116)
Income Distribution Payable (99)
Investment Advisory Fees Payable (12)
Administration Fees Payable (3)
Directors' Fees Payable (1)
Distribution Fees Payable (1)
Other Assets and Liabilities, Net 666
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [0.6%] 434
=======================================================================
NET ASSETS -- 100.0% $ 68,820
==========================================================================
NET ASSETS:
Paid-in-Capital
(unlimited authorization -- $0.01 par value) $ 71,688
Accumulated net realized loss on investments (1,812)
Net unrealized depreciation on investments (1,056)
--------------------------------------------------------------------------
NET ASSETS $ 68,820
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($68,628,294 / 6,536,929 shares) $ 10.50
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($191,263 / 18,194 shares) $ 10.51
==========================================================================
(A) Rate shown is the 7-day effective yield as of March 31, 2006.
Cl -- Class
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
MTN -- Medium Term Note
Ser -- Series
See Notes to the Financial Statements.
9
AHA FULL MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [34.6%]
ADVERTISING [0.6%]
SBC Communications
5.300%, 11/15/10 $ 200 $ 197
==========================================================================
AEROSPACE & DEFENSE [0.5%]
Systems 2001 Asset Trust (A)
6.664%, 09/15/13 62 65
United Technologies
4.375%, 05/01/10 80 77
--------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 142
==========================================================================
AIRLINES [0.2%]
Continental Airlines (A)
6.800%, 07/02/07 59 56
==========================================================================
AUTOMOTIVE [1.3%]
Auburn Hills Trust
12.375%, 05/01/20 55 80
DaimlerChrysler NA Holdings,
Ser D, MTN (B)
5.360%, 09/10/07 180 181
Ford Motor
9.215%, 09/15/21 125 100
5.880%, 03/21/07 (B) 10 10
Nissan Motor Acceptance (A)
4.625%, 03/08/10 40 38
--------------------------------------------------------------------------
TOTAL AUTOMOTIVE 409
==========================================================================
BANKS [3.4%]
AmSouth Bancorporation
6.750%, 11/01/25 75 79
Bank of America
10.200%, 07/15/15 100 131
Bank One
10.000%, 08/15/10 89 104
Bankers Trust
7.250%, 10/15/11 46 50
Dime Capital Trust, Ser A
9.330%, 05/06/27 50 54
Dresdner Bank - New York
7.250%, 09/15/15 150 166
HSBC Holding
7.500%, 07/15/09 200 212
Santander Central Hispano
7.625%, 09/14/10 100 108
Wachovia (B)
6.300%, 04/15/28 150 153
--------------------------------------------------------------------------
TOTAL BANKS 1,057
==========================================================================
BUILDING & CONSTRUCTION [0.2%]
Hanson Australia Funding
5.250%, 03/15/13 75 72
==========================================================================
BUSINESS SERVICES [0.5%]
Hewlett-Packard
5.750%, 12/15/06 150 150
==========================================================================
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
CABLE/MEDIA [0.3%]
TCI Communications
7.875%, 08/01/13 $ 75 $ 82
==========================================================================
CHEMICALS [0.1%]
Dow Chemical
5.750%, 12/15/08 40 41
==========================================================================
COMMERCIAL BANKS [0.9%]
Citigroup
3.625%, 02/09/09 300 287
==========================================================================
COMPUTER SYSTEM DESIGN & SERVICES [1.0%]
IBM
4.375%, 06/01/09 300 293
==========================================================================
DIVERSIFIED OPERATIONS [1.1%]
Hutchison Whamp International (A)
5.450%, 11/24/10 150 148
Wharf International Finance
7.625%, 03/13/07 175 179
--------------------------------------------------------------------------
TOTAL DIVERSIFIED OPERATIONS 327
==========================================================================
DRUGS [1.0%]
Bristol-Myers Squibb
5.750%, 10/01/11 300 303
==========================================================================
ELECTRICAL SERVICES [0.3%]
Public Service Company of Colorado
4.375%, 10/01/08 100 98
==========================================================================
ELECTRICAL TECHNOLOGY [1.0%]
Caterpillar Financial Services
4.875%, 06/15/07 300 299
==========================================================================
ENERGY [2.5%]
Appalachian Power, Ser G
3.600%, 05/15/08 50 48
Carolina Power & Light
5.150%, 04/01/15 80 77
Exelon
5.625%, 06/15/35 75 68
Korea Electric Power
7.750%, 04/01/13 95 106
6.750%, 08/01/27 75 80
Pacific Gas & Electric
6.050%, 03/01/34 25 25
PPL Energy Supply, Ser A
5.700%, 10/15/15 75 73
PSI Energy
7.850%, 10/15/07 125 129
Texas Utilities Holdings
6.375%, 06/15/06 80 80
United Utilities
6.450%, 04/01/08 70 71
--------------------------------------------------------------------------
TOTAL ENERGY 757
==========================================================================
See Notes to the Financial Statements.
10
AHA FULL MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES [7.5%]
American Express Credit
3.000%, 05/16/08 $ 300 $ 286
American General Finance
8.450%, 10/15/09 100 109
Amvescap
5.900%, 01/15/07 50 50
Associates NA, Ser A
7.950%, 02/15/10 75 81
Bear Stearns
7.625%, 12/07/09 250 268
Caterpillar Financial Services,
Ser F, MTN
3.450%, 01/15/09 50 48
CIT Group
3.375%, 04/01/09 75 71
Countrywide Financial (B)
4.960%, 05/05/08 90 90
Devon Financing
6.875%, 09/30/11 80 85
General Electric Capital,
Ser A, MTN
6.000%, 06/15/12 75 77
5.000%, 06/15/07 300 299
HSBC Finance
5.750%, 01/30/07 75 75
5.000%, 06/30/15 75 71
Lehman Brothers Holdings
6.625%, 01/18/12 300 316
National Rural Utilities
3.875%, 02/15/08 50 49
Nisource Finance
7.875%, 11/15/10 75 81
Residential Capital (B)
6.335%, 06/29/07 90 91
Telecome Italia Capital
4.000%, 01/15/10 160 150
--------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 2,297
==========================================================================
FOOD, BEVERAGE & TOBACCO [1.6%]
E.I. Du Pont de Nemours
4.125%, 04/30/10 250 238
Kraft Foods
6.250%, 06/01/12 150 155
5.625%, 11/01/11 40 40
Pepsi Bottling Holdings (A)
5.625%, 02/17/09 50 50
--------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 483
==========================================================================
INSURANCE [0.7%]
ACE INA Holdings
8.300%, 08/15/06 60 60
Protective Life
4.300%, 06/01/13 100 93
Wellpoint
3.750%, 12/14/07 50 49
--------------------------------------------------------------------------
TOTAL INSURANCE 202
==========================================================================
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
INVESTMENT BANKER/BROKER DEALER [2.3%]
Bear Stearns, Ser B, MTN
4.550%, 06/23/10 $ 50 $ 48
Citigroup
4.125%, 02/22/10 80 77
Credit Suisse First Boston
6.125%, 11/15/11 50 51
Dryden Investor Trust (A)
7.157%, 07/23/08 72 73
Goldman Sachs Group
5.265%, 06/28/10 100 101
5.150%, 01/15/14 75 72
Merrill Lynch, Ser C, MTN(B)
4.930%, 02/05/10 70 70
Morgan Stanley (B)
4.880%, 01/15/10 140 141
4.750%, 04/01/14 75 70
--------------------------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 703
==========================================================================
MANUFACTURING [0.7%]
General Electric
5.000%, 02/01/13 150 146
Tyco International Group
6.375%, 10/15/11 75 77
--------------------------------------------------------------------------
TOTAL MANUFACTURING 223
==========================================================================
METALS [0.5%]
Alcoa
6.500%, 06/01/11 150 157
==========================================================================
MORTGAGE FINANCE [0.2%]
Residential Capital
6.000%, 02/22/11 75 74
==========================================================================
MULTI-MEDIA [0.9%]
Time Warner
9.125%, 01/15/13 50 58
Viacom
7.700%, 07/30/10 75 80
Walt Disney
6.375%, 03/01/12 150 156
--------------------------------------------------------------------------
TOTAL MULTI-MEDIA 294
==========================================================================
PERSONAL CREDIT INSTITUTIONS [0.3%]
Household Finance
6.375%, 10/15/11 100 104
==========================================================================
PETROLEUM & FUEL PRODUCTS [0.8%]
Anadarko Finance, Ser B
6.750%, 05/01/11 80 84
Cooper Cameron
2.650%, 04/15/07 100 97
Pemex Project Funding Master Trust
9.125%, 10/13/10 50 56
--------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 237
==========================================================================
See Notes to the Financial Statements.
11
AHA FULL MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
RETAIL [0.6%]
Lowe's
5.000%, 10/15/15 $ 150 $ 145
Target
5.400%, 10/01/08 50 50
--------------------------------------------------------------------------
TOTAL RETAIL 195
==========================================================================
SECURITY BROKERS & DEALERS [0.7%]
Goldman Sachs Group
6.600%, 01/15/12 200 210
==========================================================================
TELEPHONES & TELECOMMUNICATIONS [2.4%]
British Telecommunications
8.875%, 12/15/30 100 128
8.375%, 12/15/10 (C) 60 67
Deutsche Telekom International Finance
8.750%, 06/15/30 75 90
France Telecom
7.750%, 03/01/11 50 54
New Cingular Wireless Services
8.750%, 03/01/31 25 32
Royal KPN
8.000%, 10/01/10 10 11
Sprint Capital
7.625%, 01/30/11 75 81
4.780%, 08/17/06 (C) 150 150
Verizon Global Funding
4.000%, 01/15/08 100 97
--------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 710
==========================================================================
TRANSPORTATION SERVICES [0.5%]
FedEx
9.650%, 06/15/12 125 150
==========================================================================
TOTAL CORPORATE BONDS
(Cost $10,735) 10,609
====================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [23.6%]
FHLMC REMIC, Ser 2720, Cl JB
5.000%, 12/15/16 150 147
FHLMC REMIC, Ser R001, Cl AE
4.375%, 04/15/15 203 198
FHLMC REMIC, Ser R003, Cl VA
5.500%, 08/15/16 194 193
FHLMC, Pool 160098
10.500%, 01/01/10 6 6
FHLMC, Pool 1B2550
5.311%, 02/01/36 300 298
FHLMC, Pool 1B2677 (B)
4.096%, 01/01/35 51 49
FHLMC, Pool 1B2683 (B)
4.078%, 01/01/35 28 28
FHLMC, Pool 1B2692 (B)
4.468%, 12/01/34 78 76
FHLMC, Pool C00760
6.500%, 05/01/29 31 32
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
FHLMC, Pool C00785
6.500%, 06/01/29 $ 119 $ 122
FHLMC, Pool C20300
6.500%, 01/01/29 22 22
FHLMC, Pool E01251
5.500%, 11/01/17 95 94
FHLMC, Pool E01280
5.000%, 12/01/17 77 75
FHLMC, Pool G11723
5.500%, 07/01/20 265 264
FHLMC, Ser 2141, Cl N
5.550%, 11/15/27 46 46
FHLMC, Ser 2531, Cl N
4.000%, 07/15/27 22 22
FHLMC, Ser 2533, Cl PC
5.000%, 10/15/17 107 107
FHLMC, Ser 2539, Cl QB
5.000%, 09/15/15 159 158
FHLMC, Ser 2544, Cl QB
5.000%, 09/15/15 133 132
FHLMC, Ser 2567, Cl OD
5.000%, 08/15/15 125 124
FHLMC, Ser 2804, Cl VC
5.000%, 07/15/21 186 179
FHLMC, Ser 2835, Cl VK
5.500%, 11/15/12 126 126
FNMA
7.250%, 01/15/10 1,300 1,393
FNMA, Pool 252570
6.500%, 07/01/29 43 45
FNMA, Pool 253183
7.500%, 04/01/30 3 3
FNMA, Pool 253398
8.000%, 08/01/30 15 16
FNMA, Pool 254088
5.500%, 12/01/16 81 80
FNMA, Pool 254509
5.000%, 10/01/17 84 82
FNMA, Pool 254510
5.000%, 11/01/17 100 98
FNMA, Pool 254545
5.000%, 12/01/17 64 63
FNMA, Pool 254589
5.500%, 01/01/23 164 161
FNMA, Pool 254685
5.000%, 04/01/18 145 141
FNMA, Pool 254949
5.000%, 11/01/33 107 103
FNMA, Pool 254953
5.000%, 11/01/18 78 76
FNMA, Pool 303168
9.500%, 02/01/25 12 13
FNMA, Pool 725773
5.500%, 09/01/34 253 247
FNMA, Pool 735060
6.000%, 11/01/34 158 158
See Notes to the Financial Statements.
12
AHA FULL MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
FNMA, Pool 735228
5.500%, 02/01/35 $ 123 $ 121
FNMA, Pool 827223 (B)
4.778%, 04/01/35 255 251
FNMA, Pool 835744
5.000%, 09/01/35 591 562
FNMA, Ser 1991, Cl 86
6.500%, 07/25/21 71 71
FNMA, Ser 1992, Cl 136
6.000%, 08/25/22 56 56
FNMA, Ser 1998, Cl 66
6.000%, 12/25/28 26 26
FNMA, Ser 2002, Cl 70
5.000%, 04/25/15 38 38
FNMA, Ser 2002, Cl 95
5.000%, 07/25/26 89 88
FNMA, Ser 2003, Cl 16
5.000%, 10/25/15 150 148
FNMA, Ser 2003, Cl 18
5.000%, 03/25/16 150 149
FNMA, Ser 2003, Cl 31
4.500%, 12/25/28 154 152
FNMA, Ser 2003, Cl 44
3.750%, 05/25/33 29 27
GNMA, Pool 479168
8.000%, 02/15/30 38 41
GNMA, Pool 780315
9.500%, 12/15/17 24 26
GNMA, Ser 2004, Cl 78
4.658%, 04/16/29 150 143
GNMA, TBA
3.727%, 04/16/36 150 144
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $7,390) 7,220
====================================================================
U.S. TREASURY OBLIGATIONS [17.2%]
U.S. Treasury Bonds
9.875%, 11/15/15 225 310
9.250%, 02/15/16 450 601
9.125%, 05/15/18 100 137
6.250%, 08/15/23 (D) 1,475 1,673
U.S. Treasury Notes
6.000%, 08/15/09 90 93
5.750%, 08/15/10 95 98
4.500%, 02/15/09 400 396
4.500%, 11/15/15 650 631
4.375%, 12/15/10 600 589
3.750%, 05/15/08 150 147
3.500%, 02/15/10 (D) 580 553
3.375%, 10/15/09 50 48
--------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,307) 5,276
====================================================================
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS [10.9%]
FAMC, MTN
4.250%, 07/29/08 $ 20 $ 20
FFCB
4.875%, 04/04/12 200 197
4.875%, 12/16/15 300 292
FHLB
4.875%, 05/15/07 200 199
3.250%, 12/17/07 450 437
FHLMC
5.875%, 03/21/11 150 153
5.125%, 10/15/08 200 200
5.000%, 07/15/14 110 109
4.375%, 07/17/15 325 306
4.250%, 02/28/07 120 119
FNMA
6.625%, 09/15/09 300 314
5.375%, 11/15/11 450 454
4.625%, 05/01/13 200 190
4.000%, 09/02/08 300 292
3.000%, 04/26/19 (C) 70 70
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $3,409) 3,352
====================================================================
MORTGAGE-BACKED SECURITIES [6.4%]
Asset Securitization,
Ser 1996-D2, Cl A1
6.920%, 02/14/29 26 26
Banc of America Alternative Loan Trust,
Ser 2005-4, Cl CB11
5.500%, 05/25/35 176 174
Banc of America Alternative Loan Trust,
Ser 2005-6, Cl 7A1
5.500%, 07/25/20 133 132
Banc of America Alternative Loan Trust,
Ser 2005-9, Cl 1CB3
5.500%, 10/25/35 143 141
Banc of America Alternative Loan Trust,
Series 2004-2, Class 5A1
5.500%, 03/25/19 169 167
Chase Mortgage Finance,
Ser 2003-S13, Cl A11
5.500%, 11/25/33 125 123
Countrywide Home Loans,
Ser 2004-20, Cl 2A1 (B)
5.879%, 09/25/34 55 57
Deutsche Mortgage Securities,
Ser 2004-4, Cl 1A3
4.940%, 04/25/34 90 89
FPL Group Capital
4.086%, 02/16/07 150 148
GE Capital Commercial Mortgage,
Ser 2002-3A, Cl A2
4.996%, 12/10/37 150 147
See Notes to the Financial Statements.
13
AHA FULL MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
GMAC Commercial Mortgage Securities,
Ser 2003-C1, Cl A2
4.079%, 05/10/36 $ 125 $ 115
GMAC Mortgage Corporation Loan Trust,
Ser 2004-GH1, Cl A6
4.810%, 07/25/35 150 148
GMAC Mortgage Corporation Loan Trust,
Ser 2004-J4, Cl A2
5.500%, 08/25/14 131 129
RAAC, Ser 2004-SP1, Cl AI4
5.285%, 08/25/27 150 146
Residential Accredit Loans,
Ser 2004-QS5, Cl A5
4.750%, 04/25/34 67 66
Residential Accredit Loans,
Ser 2004-QS6, Cl A1
5.000%, 05/25/19 111 108
Wachovia Bank Commercial Mortgage,
Ser 2003-C3, Cl A2
4.867%, 02/15/35 50 48
--------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $2,017) 1,964
====================================================================
ASSET-BACKED SECURITIES [5.0%]
CitiFinancial Mortgage Securities,
Ser 2004-1, Cl AF2 (C)
2.645%, 04/25/34 150 145
Cityscape Home Equity Loan Trust,
Ser 1997-C, Cl A4 (C)
7.000%, 07/25/28 22 22
Contimortgage Home Equity Loan
Trust, Ser 1997-2, Cl A9
7.090%, 04/15/28 18 18
Fairbanks Capital Mortgage,
Ser 1991-1, Cl A
5.418%, 05/25/28 56 56
Green Tree Financial,
Ser 1997-7, Cl A6
6.760%, 07/15/29 161 163
Green Tree Home Improvement Loan
Trust, Ser 1996-D, Cl HEM2
8.300%, 09/15/27 60 60
GSAA Home Equity Trust,
Ser 2005-1, Cl AF2
4.316%, 11/25/34 150 146
IMC Home Equity Loan Trust,
Ser 1997-5, Cl A10
6.880%, 11/20/28 31 31
New Century Home Equity Loan Trust,
Ser 2003-5, Cl AI3
3.560%, 11/25/33 59 59
Description Face Amount (000)/Shares Value (000)
- --------------------------------------------------------------------------------
Renaissance Home Equity Loan Trust,
Ser 2005-3, Cl AF2 (C)
4.723%, 11/25/35 $ $ 150 $ 148
Residential Asset Mortgage Products,
Ser 2003-RS7, Cl AI3
3.680%, 09/25/27 2 2
Residential Asset Securities,
Ser 2002-RS3, Cl AI5
5.572%, 06/25/32 128 127
Residential Asset Securities,
Ser 2003-KS5, Cl AI6
3.620%, 07/25/33 200 193
Residential Asset Securities,
Ser 2003-KS11, Cl AI3
3.320%, 02/25/29 63 63
Residential Asset Securities,
Ser 2004-KS2, Cl AI3
3.020%, 05/25/29 100 99
Residential Asset Securities,
Ser 2004-KS5, Cl AI3
4.030%, 04/25/30 150 148
UCFC Home Equity Loan,
Ser 1998-C, Cl A7
5.935%, 01/15/30 55 55
--------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost $1,548) 1,535
====================================================================
FOREIGN GOVERNMENT BONDS [0.6%]
National Bank of Hungary
8.875%, 11/01/13 75 89
Republic of Italy
4.375%, 10/25/06 40 40
United Mexican States
9.875%, 02/01/10 50 57
--------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT BONDS
(Cost $178) 186
====================================================================
MUNICIPAL BOND [0.1%]
LOUISIANA [0.1%]
Louisiana State, Tobacco Settlement
Financing Authority, Ser 2001A
6.360%, 05/15/25 43 43
--------------------------------------------------------------------------
TOTAL MUNICIPAL BOND
(Cost $43) 43
====================================================================
See Notes to the Financial Statements.
14
AHA FULL MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000)/Shares Value (000)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER [2.3%]
Fenway Funding (E) (G)
4.950%, 04/03/06 $ 705 $ 705
--------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $705) 705
====================================================================
REPURCHASE AGREEMENT [4.9%]
Credit Suisse First Boston (E)
4.930% dated 03/31/06, matures
on 04/03/06, repurchase price
$1,515,466 (collateralized by various
corporate obligations, ranging in par
value $47,000 to $500,000, 4.750%
to 9.650%, 08/01/08 to 07/15/48,
total market value $1,533,074) 1,500 1,500
--------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,500) 1,500
====================================================================
CASH EQUIVALENTS [2.3%]
AIM Short-Term Investment
Company, Liquid Assets
Portfolio (E) 99,675 100
Fidelity Institutional Domestic
Money Market Portfolio, Cl I,
4.590% (F) 307,698 308
Wachovia Institutional Trust,
Cl I, 4.630% (F) 307,698 308
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $716) 716
====================================================================
TOTAL INVESTMENTS [107.9%]
(Cost $33,548) 33,106
====================================================================
OTHER ASSETS AND LIABILITIES:
Payable upon Return of Securities Loaned (2,305)
Payable for Investment Securities purchased (1,016)
Income Distribution Payable (73)
Investment Advisory Fees Payable (11)
Distribution Fees Payable (5)
Administration Fees Payable (1)
Other Assets and Liabilities, Net 981
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [ -7.9%] (2,430)
====================================================================
NET ASSETS -- 100.0% $ 30,676
==========================================================================
NET ASSETS:
Paid-in-Capital
(unlimited authorization -- $0.01 par value) $ 31,314
Accumulated net realized loss on investments (196)
Net unrealized depreciation on investments (442)
--------------------------------------------------------------------------
NET ASSETS $ 30,676
==========================================================================
Description Value
- --------------------------------------------------------------------------------
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($30,539,621 / 3,035,716 shares) $ 10.06
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($136,399 / 13,554 shares) $ 10.06
==========================================================================
(A) Security sold within the terms of a private placement memorandum, exempt
from registration under section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or other
"accredited investors."
(B) Floating Rate Security-- The rate reflected on the Statement of Net Assets
is the rate in effect on March 31, 2006.
(C) Step Bond -- The rate reflected on the Statement of Net Assets is the
effective yield on March 31, 2006. The coupon on a step bond changes on a
specific date.
(D) This security or a partial position of this security is on loan at March
31, 2006. The total value of securities on loan at March 31, 2006 was
$2,225,761. See note 8 in Notes to Financial Statements.
(E) This security was purchased with cash collateral received from securities
lending. The total value of such securities at March 31, 2006 was
$2,304,778. See note 8 in Notes to Financial Statements.
(F) Rate shown is the 7-day effective yield as of March 31, 2006.
(G) Rate shown is the 1-day effective yield as of March 31, 2006.
Cl -- Class
FAMC -- Federal Agricultural Mortgage Corporation
FFCB -- Federal Farm Credit Bank
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
MTN -- Medium Term Note
NA -- National Association
REMIC -- Real Estate Mortgage Investment Conduit
Ser -- Series
TBA -- To Be Announced
See Notes to the Financial Statements.
15
AHA BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Shares Value (000)
- --------------------------------------------------------------------------------
COMMON STOCK [64.9%]
ADVERTISING [1.4%]
WPP Group, ADR 4,200 $ 252
==========================================================================
AEROSPACE & DEFENSE [0.8%]
Boeing 700 55
Lockheed Martin 300 22
Northrop Grumman 100 7
United Technologies 900 52
--------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 136
==========================================================================
APPAREL/TEXTILES [1.0%]
Jones Apparel Group 4,600 163
VF 300 17
--------------------------------------------------------------------------
TOTAL APPAREL/TEXTILES 180
==========================================================================
AUTOMOTIVE [0.1%]
Autozone * 100 10
Ford Motor 500 4
--------------------------------------------------------------------------
TOTAL AUTOMOTIVE 14
==========================================================================
BANKS [5.2%]
Bank of America 7,600 346
JPMorgan Chase 100 4
US Bancorp 7,100 217
Wachovia 1,200 67
Washington Mutual 5,360 229
Wells Fargo 1,100 70
--------------------------------------------------------------------------
TOTAL BANKS 933
==========================================================================
BIOTECHNOLOGY [0.5%]
Amgen * 800 58
Gilead Sciences * 300 19
Millipore * 100 7
--------------------------------------------------------------------------
TOTAL BIOTECHNOLOGY 84
==========================================================================
BROADCASTING & CABLE [1.5%]
Alcatel, ADR (A) 10,800 166
Cisco Systems * 1,400 30
Freescale Semiconductor * 600 17
Motorola 2,400 55
--------------------------------------------------------------------------
TOTAL BROADCASTING & CABLE 268
==========================================================================
BUILDING & CONSTRUCTION [0.2%]
KB Home 200 13
Lennar 300 18
--------------------------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 31
==========================================================================
BUSINESS SERVICES [3.5%]
Cendant 12,700 220
Equifax 500 19
First Data 7,200 337
Fiserv * 400 17
H&R Block 700 15
NCR * 600 25
--------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 633
==========================================================================
Description Shares Value (000)
- --------------------------------------------------------------------------------
CHEMICALS [0.2%]
Dow Chemical 600 $ 25
Eastman Chemical 300 15
--------------------------------------------------------------------------
TOTAL CHEMICALS 40
==========================================================================
COMMUNICATION & MEDIA [2.0%]
DIRECTV Group * 18,900 310
Time Warner 3,500 59
--------------------------------------------------------------------------
TOTAL COMMUNICATION & MEDIA 369
==========================================================================
COMPUTERS [0.6%]
Apple Computer * 800 50
Hewlett-Packard 2,000 66
--------------------------------------------------------------------------
TOTAL COMPUTERS 116
==========================================================================
COMPUTERS - SOFTWARE [2.7%]
Intuit * 300 16
Microsoft 15,200 413
Oracle * 3,700 51
--------------------------------------------------------------------------
TOTAL COMPUTERS - SOFTWARE 480
==========================================================================
COMPUTER SYSTEM DESIGN & SERVICES [1.9%]
Cadence Design Systems * 8,100 150
Computer Sciences * 300 17
Diebold 4,200 172
--------------------------------------------------------------------------
TOTAL COMPUTERS SYSTEM DESIGN & SERVICES 339
==========================================================================
CONSUMER PRODUCTS & SERVICES [0.9%]
Black & Decker 200 18
Kimberly-Clark 600 35
Procter & Gamble 1,600 92
Whirlpool 200 18
--------------------------------------------------------------------------
TOTAL CONSUMER PRODUCTS & SERVICES 163
==========================================================================
DIVERSIFIED MANUFACTURING [0.4%]
General Electric 2,100 73
==========================================================================
DRUGS [5.7%]
Hospira * 400 16
Johnson & Johnson 292 17
King Pharmaceuticals * 1,000 17
Merck 1,700 60
Pfizer 15,320 382
Sanofi-Aventis, ADR * 4,700 223
Wyeth 6,500 315
--------------------------------------------------------------------------
TOTAL DRUGS 1,030
==========================================================================
ELECTRICAL PRODUCTS [0.1%]
Medtronic 300 15
==========================================================================
ELECTRICAL SERVICES [0.3%]
TXU 700 31
Xcel Energy 900 17
--------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 48
==========================================================================
See Notes to the Financial Statements.
16
AHA BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Shares Value (000)
- --------------------------------------------------------------------------------
ENERGY [0.5%]
American Electric Power 600 $ 20
Duke Energy 1,500 44
Edison International 500 21
--------------------------------------------------------------------------
TOTAL ENERGY 85
==========================================================================
ENTERTAINMENT [0.8%]
Brunswick 400 15
Carnival 2,700 128
--------------------------------------------------------------------------
TOTAL ENTERTAINMENT 143
==========================================================================
FINANCIAL SERVICES [1.1%]
American Express 600 32
Capital One Financial 500 40
CIT Group 400 21
Citigroup 1,566 74
Countrywide Financial 1,000 37
--------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 204
==========================================================================
FOOD, BEVERAGE & TOBACCO [2.7%]
Albertson's 100 3
Coca-Cola 1,400 59
Coca-Cola Enterprises 800 16
Conagra Foods 8,500 183
General Mills 600 30
Pepsi Bottling Group 600 18
Safeway 600 15
Tyson Foods, Cl A 12,100 166
--------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 490
==========================================================================
GAS/NATURAL GAS [0.1%]
Nicor 300 12
==========================================================================
HEALTHCARE PRODUCTS & SERVICES [2.8%]
AmerisourceBergen 500 24
Cigna 1,600 209
HCA 4,500 206
McKesson 500 26
UnitedHealth Group 600 34
--------------------------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 499
==========================================================================
HOUSEHOLD PRODUCTS [0.0%]
Newell Rubbermaid 300 8
==========================================================================
INSURANCE [8.1%]
ACE, ADR 2,300 120
Aetna 800 39
Allstate 3,900 203
American International Group 312 21
Assured Guaranty 6,600 165
Chubb 300 29
Conseco * 8,400 209
Hartford Financial Services Group 500 40
ING Groep, ADR 4,700 185
MBIA 3,700 222
Metlife 1,000 48
St Paul Travelers 4,300 180
--------------------------------------------------------------------------
TOTAL INSURANCE 1,461
==========================================================================
Description Shares Value (000)
- --------------------------------------------------------------------------------
INVESTMENT BANKER/BROKER DEALER [0.7%]
Bear Stearns 200 $ 28
Goldman Sachs Group 400 63
Lehman Brothers Holdings 300 43
--------------------------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 134
==========================================================================
MACHINERY [2.4%]
Cummins 200 21
Eaton 2,900 211
Illinois Tool Works 2,000 193
--------------------------------------------------------------------------
TOTAL MACHINERY 425
==========================================================================
MEDICAL PRODUCTS & SERVICES [1.1%]
Bard (C.R.) 200 13
Becton Dickinson 400 25
Boston Scientific (A)* 7,300 168
--------------------------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 206
==========================================================================
METALS & MINING [0.1%]
Phelps Dodge 300 24
==========================================================================
MISCELLANEOUS BUSINESS SERVICES [0.0%]
Compuware * 200 2
==========================================================================
MULTI-MEDIA [0.2%]
Walt Disney * 1,300 36
==========================================================================
PAPER & PAPER PRODUCTS [0.1%]
Louisiana-Pacific 700 19
==========================================================================
PETROLEUM & FUEL PRODUCTS [3.5%]
Ashland 200 14
Burlington Resources 100 9
ChevronTexaco 5,200 301
ConocoPhillips 1,000 63
Devon Energy 500 31
Exxon Mobil 1,248 76
Marathon Oil 600 46
Occidental Petroleum 500 46
Valero Energy 800 48
--------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 634
==========================================================================
PETROLEUM SERVICES [3.5%]
BJ Services 4,700 163
GlobalSantaFe 3,900 237
Halliburton 2,200 161
Schlumberger 500 63
--------------------------------------------------------------------------
TOTAL PETROLEUM SERVICES 624
==========================================================================
See Notes to the Financial Statements.
17
AHA BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Shares Value (000)
- --------------------------------------------------------------------------------
RAILROADS [0.2%]
Union Pacific 300 $ 28
==========================================================================
REAL ESTATE INVESTMENT TRUST [0.1%]
Prologis Trust 400 21
==========================================================================
RETAIL [5.1%]
Autonation * 800 17
CVS 5,500 164
Darden Restaurants 500 21
Dillard's, Cl A 300 8
Federated Department Stores 400 29
Home Depot 7,000 296
JC Penney 200 12
Limited Brands 7,000 171
Lowe's 400 26
Sherwin Williams Company 300 15
Target 3,200 167
--------------------------------------------------------------------------
TOTAL RETAIL 926
==========================================================================
RUBBER & PLASTIC [0.1%]
Goodyear Tire & Rubber * 1,200 17
==========================================================================
SEMI-CONDUCTORS [1.8%]
Advanced Micro Devices * 300 10
Infineon Technologies (A)* 22,200 228
Intel 1,800 35
National Semiconductor 600 16
Texas Instruments 1,100 36
--------------------------------------------------------------------------
TOTAL SEMI-CONDUCTORS 325
==========================================================================
STEEL & STEEL WORKS [0.3%]
Nucor 300 32
United States Steel 300 18
--------------------------------------------------------------------------
TOTAL STEEL & STEEL WORKS 50
==========================================================================
TELEPHONES & TELECOMMUNICATIONS [0.4%]
Alltel 600 39
BellSouth 200 7
Citizens Communications 1,100 14
Sprint Nextel 700 18
--------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 78
==========================================================================
TRUCKING [0.1%]
Ryder System 400 18
==========================================================================
WEBPORTALS/ISP [0.1%]
Yahoo! * 500 16
==========================================================================
TOTAL COMMON STOCK
(Cost $10,155) 11,689
=======================================================================
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [8.9%]
FHLMC Gold, Pool C90691
5.500%, 07/01/23 $ 61 $ 60
FHLMC Gold, Pool E01140
6.000%, 05/01/17 24 24
FHLMC REMIC, Ser 2673, Cl NC
5.500%, 05/15/21 75 75
FHLMC REMIC, Ser R001, Cl AE
4.375%, 04/15/15 83 81
FHLMC, Pool C00760
6.500%, 05/01/29 22 23
FHLMC, Pool C00785
6.500%, 06/01/29 24 24
FHLMC, Ser 2531, Cl N
4.000%, 07/15/27 15 15
FHLMC, Ser 2533, Cl PC
5.000%, 10/15/17 64 64
FHLMC, Ser 2539, Cl QB
5.000%, 09/15/15 91 90
FHLMC, Ser 2567, Cl OD
5.000%, 08/15/15 50 50
FHLMC, Ser 2578 PD
5.000%, 08/15/14 50 50
FHLMC, Ser 2808 AD
5.000%, 12/15/14 8 8
FNMA
7.250%, 01/15/10 550 589
FNMA, Pool 735228
5.500%, 02/01/35 62 60
FNMA, Pool 790108
6.000%, 08/01/34 76 76
FNMA, Ser 2002, Cl 70
5.000%, 04/25/15 8 8
FNMA, Ser 2002, Cl 95
5.000%, 07/25/26 30 29
FNMA, Ser 2003, Cl 16
5.000%, 10/25/15 50 49
FNMA, Ser 2003, Cl 18
5.000%, 03/25/16 125 124
FNMA, Ser 2003, Cl 31
4.500%, 12/25/28 88 87
FNMA, Ser 2003, Cl 44
3.750%, 05/25/33 12 11
GNMA, Pool 780678
6.500%, 11/15/27 1 1
--------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $1,634) 1,598
=======================================================================
See Notes to the Financial Statements.
18
AHA BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [8.0%]
BANKS [2.5%]
AmSouth Bancorporation
6.750%, 11/01/25 $ 50 $ 53
Bank of Oklahoma
7.125%, 08/15/07 50 51
Bank United, Ser A, MTN
8.000%, 03/15/09 50 54
Bankers Trust
7.500%, 11/15/15 25 28
Compass Bank
8.100%, 08/15/09 50 54
Dresdner Bank - New York
7.250%, 09/15/15 50 56
First Maryland Bancorporation
7.200%, 07/01/07 50 51
PNC Funding
7.500%, 11/01/09 50 53
Wachovia Bank
7.800%, 09/15/06 50 51
--------------------------------------------------------------------------
TOTAL BANKS 451
==========================================================================
BUILDING & CONSTRUCTION [0.3%]
Hanson Australia Funding
5.250%, 03/15/13 50 48
==========================================================================
CONTAINERS & PACKAGING [0.3%]
Pactiv
7.950%, 12/15/25 50 55
==========================================================================
ENERGY [1.0%]
Dominion Resources
6.250%, 06/30/12 50 51
Exelon Generation
6.950%, 06/15/11 50 53
Pacific Gas & Electric
6.050%, 03/01/34 25 24
PSI Energy
7.850%, 10/15/07 50 52
--------------------------------------------------------------------------
TOTAL ENERGY 180
==========================================================================
FINANCIAL SERVICES [1.2%]
Amvescap
5.900%, 01/15/07 25 25
CIT Group
3.375%, 04/01/09 25 24
Countrywide Home Loan
4.125%, 09/15/09 25 24
FPL Group Capital
7.625%, 09/15/06 50 50
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
Household Finance
8.000%, 07/15/10 $ 40 $ 44
National Rural Utilities Cooperative
5.750%, 08/28/09 50 50
--------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 217
==========================================================================
FOOD, BEVERAGE & TOBACCO [0.2%]
Quaker Oats
9.250%, 11/27/07 25 26
==========================================================================
INSURANCE [0.6%]
MetLife
6.500%, 12/15/32 50 53
Protective Life
4.300%, 06/01/13 50 46
--------------------------------------------------------------------------
TOTAL INSURANCE 99
==========================================================================
INVESTMENT BANKER/BROKER DEALER [0.1%]
Lehman Brothers Holdings
8.500%, 05/01/07 25 26
==========================================================================
MANUFACTURING [0.1%]
Tyco International Group
6.375%, 10/15/11 25 26
==========================================================================
MULTI-MEDIA [0.3%]
Time Warner
9.125%, 01/15/13 25 29
Viacom
7.700%, 07/30/10 25 27
--------------------------------------------------------------------------
TOTAL MULTI-MEDIA 56
==========================================================================
PAPER & PAPER PRODUCTS [0.4%]
Westvaco
9.750%, 06/15/20 50 64
==========================================================================
PETROLEUM & FUEL PRODUCTS [0.2%]
Pemex Project Funding Master Trust
9.125%, 10/13/10 25 28
==========================================================================
RAILROADS [0.2%]
Union Pacific
8.660%, 07/02/11 39 41
==========================================================================
TELEPHONES & TELECOMMUNICATIONS [0.3%]
Deutsche Telekom International Finance
8.750%, 06/15/30 25 30
New Cingular Wireless Services
8.750%, 03/01/31 25 32
--------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 62
==========================================================================
TRANSPORTATION SERVICES [0.3%]
FedEx
9.650%, 06/15/12 50 60
==========================================================================
TOTAL CORPORATE BONDS
(Cost $1,439) 1,439
=======================================================================
See Notes to the Financial Statements.
19
AHA BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES [6.1%]
Banc of America Alternative Loan Trust,
Ser 2004-11, Cl 4A1
5.500%, 12/25/19 $ 41 $ 40
Banc of America Alternative Loan Trust,
Ser 2005-6, Cl 7A1
5.500%, 07/25/20 44 44
Banc One Home Equity Trust,
Ser 1999-1, Cl A4
6.470%, 05/25/26 32 32
Chase Mortgage Finance,
Ser 2003-S14, Cl 3A6
5.500%, 01/25/34 60 59
Citicorp Mortgage Securities,
Ser 2003-11, Cl 2A8
5.500%, 12/25/33 64 63
Citicorp Mortgage Securities,
Ser 2004-4, Cl A5
5.500%, 06/25/34 88 86
Countrywide Alternative Loan Trust,
Ser 2005-50CB, Cl 4A1
5.000%, 11/25/20 48 47
Credit-Based Asset Servicing Home Equity,
Ser 2005-CB8, Cl AF2 (C)
5.303%, 12/25/35 75 74
First Union National Bank CMO,
Ser 2001-C4, Cl A2
6.223%, 12/12/33 50 52
GE Capital Commercial Mortgage,
Ser 2002-3A, Cl A2
4.996%, 12/10/37 100 98
GMAC Commercial Mortgage Securities,
Ser 2003-C1, Cl A2
4.079%, 05/10/36 50 46
GMAC Mortgage Corporation Loan Trust,
Ser 2004, Cl HE5
4.388%, 09/25/34 75 72
GMAC Mortgage Corporation Loan Trust,
Ser 2004-GH1, Cl A6
4.810%, 07/25/35 75 74
GMAC Mortgage Corporation Loan Trust,
Ser 2004-J4, Cl A2
5.500%, 08/25/14 66 65
RAAC, Ser 2004-SP1, Cl AI4
5.285%, 08/25/27 75 73
Residential Accredit Loans,
Ser 2004-QS5, Cl A5
4.750%, 04/25/34 34 33
Residential Accredit Loans,
Ser 2004-QS6, Cl A1
5.000%, 05/25/19 37 36
Residential Funding Mortgage Securities,
Ser 2003-S11, Cl A2
4.000%, 06/25/18 75 68
Washington Mutual Corporate CMO,
Ser 2004-CB3, Cl 3A
5.500%, 10/25/19 39 38
--------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $1,138) 1,100
====================================================================
Description Face Amount (000)/Shares Value (000)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS [5.6%]
U.S. Treasury Bonds
9.250%, 02/15/16 $ 90 $ 120
9.125%, 05/15/18 50 69
6.250%, 08/15/23 (A) 725 822
--------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,030) 1,011
====================================================================
ASSET-BACKED SECURITIES [2.7%]
Chase Credit Card Master Trust,
Ser 2003-6, Cl A
4.860%, 02/15/11 125 125
Countrywide Asset-Backed Certificates,
Ser 2005-13, Cl AF2
5.294%, 04/25/36 75 75
Residential Asset Securities,
Ser 2002-RS3, Cl AI5
5.572%, 06/25/32 147 147
Residential Asset Securities,
Ser 2003-KS10, Cl AI3
3.250%, 05/25/29 48 47
Residential Asset Securities,
Ser 2003-KS11, Cl AI3
3.320%, 02/25/29 32 32
Residential Asset Securities,
Ser 2004-KS5, Cl AI3
4.030%, 04/25/30 50 50
Residential Asset Securities,
Ser 2004-RS1, Cl AI3
3.411%, 06/25/28 1 1
Residential Asset Securities,
Ser 2004-RS3, Cl AI2
3.052%, 06/25/29 17 17
--------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost $498) 494
====================================================================
FOREIGN GOVERNMENT BONDS [0.5%]
Hydro-Quebec
11.750%, 02/01/12 50 66
United Mexican States
9.875%, 02/01/10 25 28
--------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT BONDS
(Cost $97) 94
====================================================================
MUNICIPAL BOND [0.2%]
LOUISIANA [0.2%]
Louisiana State, Tobacco Settlement
Financing Authority, Ser 2001A
6.360%, 05/15/25 29 29
--------------------------------------------------------------------------
TOTAL MUNICIPAL BOND
(Cost $29) 29
====================================================================
See Notes to the Financial Statements.
20
AHA BALANCED FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Face Amount (000)/Shares Value (000)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER [2.3%]
Fenway Funding (B) (E)
4.950%, 04/03/06 $ 410 $ 410
--------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $410) 410
======================================================================
REPURCHASE AGREEMENT [4.8%]
Credit Suisse First Boston (B)
4.930%, dated 03/31/06, matures on
04/03/06, repurchase price $878,970
(collateralized by various corporate
obligations, ranging in par value
$47,000 to $500,000, 4,750% to
9.650%, 08/01/08 to 07/15/48, total
market value $889,183) 872 872
--------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $872) 872
=======================================================================
CASH EQUIVALENTS [3.4%]
AIM Short-Term Investment
Company, Liquid Assets Portfolio (B) 57,930 58
Fidelity Institutional Domestic
Money Market Portfolio, Cl I,
4.590% (D) 281,874 282
Wachovia Institutional Trust,
Cl I, 4.630% (D) 275,249 275
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $615) 615
=======================================================================
TOTAL INVESTMENTS [107.4%]
(Cost $17,917) 19,351
=======================================================================
OTHER ASSETS AND LIABILITIES:
Payable upon return of securities
loaned (1,340)
Payable for investment securities
purchased (69)
Investment Advisory Fees Payable (9)
Administration Fees Payable (1)
Other Assets and Liabilities, Net 84
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [ -7.4%] (1,335)
=======================================================================
NET ASSETS -- 100.0% $ 18,016
==========================================================================
Description Value (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid-in-Capital
(unlimited authorization -- $0.01 par
value) $ 15,860
Undistributed net investment income 12
Accumulated net realized gain on investments 710
Net unrealized appreciation on investments 1,434
--------------------------------------------------------------------------
NET ASSETS $ 18,016
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($18,015,792 / 1,886,292 shares) $ 9.55
==========================================================================
* Non-income producing security
(A) This security or a partial position of this security is on loan at March
31, 2006. The total value of securities on loan at March 31, 2006 was
$1,285,180. See note 8 in Notes to Financial Statements.
(B) This security was purchased with cash collateral received from securities
lending. The total value of such securities at March 31, 2006 was
$1,339,508. See note 8 in Notes to Financial Statements.
(C) Step Bond -- The rate reflected on the Statement of Net Assets is the
effective yield on March 31, 2006. The coupon on a step bond changes on a
specific date.
(D) Rate shown is the 7-day effective yield as of March 31, 2006.
(E) Rate shown is the 1-day effective yield as of March 31, 2006.
ADR -- American Depositary Receipt
Cl -- Class
CMO -- Collateralized Mortgage Obligation
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
MTN -- Medium Term Note
REMIC -- Real Estate Mortgage Investment Conduit
Ser -- Series
See Notes to the Financial Statements.
21
AHA DIVERSIFIED EQUITY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Shares Value (000)
- --------------------------------------------------------------------------------
COMMON STOCK [94.5%]
ADVERTISING [1.4%]
WPP Group, ADR 26,100 $ 1,566
==========================================================================
AEROSPACE & DEFENSE [2.0%]
Boeing 10,700 834
Lockheed Martin 4,500 338
Northrop Grumman 7,100 485
United Technologies 10,000 580
--------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 2,237
==========================================================================
APPAREL/TEXTILES [1.1%]
Jones Apparel Group 30,000 1,061
VF 3,200 182
--------------------------------------------------------------------------
TOTAL APPAREL/TEXTILES 1,243
==========================================================================
AUTOMOTIVE [0.3%]
Autozone * 2,400 239
Ford Motor 8,300 66
--------------------------------------------------------------------------
TOTAL AUTOMOTIVE 305
==========================================================================
BANKS [8.1%]
Bank of America 66,500 3,028
JPMorgan Chase 21,200 883
US Bancorp 44,000 1,342
Wachovia 16,500 925
Washington Mutual 44,885 1,913
Wells Fargo 15,700 1,003
--------------------------------------------------------------------------
TOTAL BANKS 9,094
==========================================================================
BIOTECHNOLOGY [1.1%]
Amgen * 12,500 909
Gilead Sciences * 5,900 367
--------------------------------------------------------------------------
TOTAL BIOTECHNOLOGY 1,276
==========================================================================
BROADCASTING & CABLE [2.4%]
Alcatel, ADR (A) 72,600 1,118
Cisco Systems * 22,400 485
Freescale Semiconductor * 9,600 267
Motorola 35,400 811
--------------------------------------------------------------------------
TOTAL BROADCASTING & CABLE 2,681
==========================================================================
BUILDING & CONSTRUCTION [0.4%]
KB Home 3,400 221
Lennar 4,200 254
--------------------------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 475
==========================================================================
BUSINESS SERVICES [3.9%]
Cendant 85,000 1,475
Equifax 5,600 208
First Data 44,000 2,060
Fiserv * 4,700 200
H&R Block 6,500 141
NCR * 6,800 284
--------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 4,368
==========================================================================
Description Shares Value (000)
- --------------------------------------------------------------------------------
CHEMICALS [0.5%]
Dow Chemical 9,500 $ 386
Eastman Chemical 4,400 225
--------------------------------------------------------------------------
TOTAL CHEMICALS 611
==========================================================================
CIRCUIT BOARDS [0.1%]
Jabil Circuit * 1,300 56
==========================================================================
COMMUNICATION & MEDIA [2.6%]
DIRECTV Group * 125,000 2,050
Time Warner 50,900 855
--------------------------------------------------------------------------
TOTAL COMMUNICATION & MEDIA 2,905
==========================================================================
COMPUTERS [1.5%]
Apple Computer * 11,300 709
Hewlett-Packard 28,800 948
IBM 600 49
--------------------------------------------------------------------------
TOTAL COMPUTERS 1,706
==========================================================================
COMPUTER SOFTWARE [3.5%]
Compuware * 20,500 161
Microsoft 109,800 2,988
Oracle * 55,300 757
--------------------------------------------------------------------------
TOTAL COMPUTER SOFTWARE 3,906
==========================================================================
COMPUTER SYSTEM DESIGN & SERVICES [2.2%]
Cadence Design Systems * 54,600 1,010
Computer Sciences * 4,700 261
Diebold 28,200 1,159
--------------------------------------------------------------------------
TOTAL COMPUTERS SYSTEM DESIGN & SERVICES 2,430
==========================================================================
CONSUMER PRODUCTS & SERVICES [2.2%]
Black & Decker 2,700 235
Kimberly-Clark 10,500 607
Procter & Gamble 23,600 1,360
Whirlpool 3,100 283
--------------------------------------------------------------------------
TOTAL CONSUMER PRODUCTS & SERVICES 2,485
==========================================================================
DIVERSIFIED MANUFACTURING [0.9%]
General Electric 30,200 1,050
==========================================================================
DRUGS [7.3%]
Hospira * 6,000 237
Johnson & Johnson 4,510 267
King Pharmaceuticals * 12,300 212
Merck 24,500 863
Pfizer 99,075 2,469
Sanofi-Aventis, ADR * 32,000 1,519
Wyeth 51,800 2,513
--------------------------------------------------------------------------
TOTAL DRUGS 8,080
==========================================================================
ELECTRICAL PRODUCTS [0.3%]
Medtronic 6,900 350
==========================================================================
See Notes to the Financial Statements.
22
AHA DIVERSIFIED EQUITY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Shares Value (000)
- --------------------------------------------------------------------------------
ELECTRICAL SERVICES [0.6%]
TXU 10,800 $ 483
Xcel Energy 13,200 240
--------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 723
==========================================================================
ENERGY [1.1%]
American Electric Power 8,800 300
Duke Energy 20,800 606
Edison International 7,300 301
PG&E 700 27
--------------------------------------------------------------------------
TOTAL ENERGY 1,234
==========================================================================
ENTERTAINMENT [0.9%]
Brunswick 5,700 221
Carnival 16,800 796
--------------------------------------------------------------------------
TOTAL ENTERTAINMENT 1,017
==========================================================================
FINANCIAL SERVICES [2.2%]
American Express 2,300 121
Capital One Financial 6,700 540
CIT Group 5,200 278
Citigroup 22,665 1,071
Countrywide Financial 13,500 495
--------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 2,505
==========================================================================
FOOD, BEVERAGE & TOBACCO [3.9%]
Albertson's 1,700 44
Coca-Cola 21,700 909
Coca-Cola Enterprises 7,200 146
Conagra Foods 56,900 1,221
General Mills 8,000 405
Pepsi Bottling Group 7,400 225
Safeway 11,000 276
Tyson Foods, Cl A 78,900 1,084
--------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 4,310
==========================================================================
GAS/NATURAL GAS [0.2%]
Nicor 5,400 214
==========================================================================
HEALTHCARE PRODUCTS & SERVICES [3.8%]
AmerisourceBergen 7,200 348
Cigna 11,800 1,541
HCA 30,100 1,378
McKesson 6,900 360
UnitedHealth Group 10,100 564
--------------------------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 4,191
==========================================================================
INSURANCE [9.2%]
ACE, ADR 12,800 666
Aetna 12,200 600
Allstate 26,100 1,360
American International Group 3,894 257
Assured Guaranty 37,600 940
Chubb 4,500 430
Conseco * 48,200 1,196
Hartford Financial Services Group 6,300 507
Description Shares Value (000)
- --------------------------------------------------------------------------------
ING Groep, ADR 27,700 $ 1,091
MBIA 24,700 1,485
Metlife 4,600 223
Safeco 4,500 226
St Paul Travelers 27,000 1,128
--------------------------------------------------------------------------
TOTAL INSURANCE 10,109
==========================================================================
INVESTMENT BANKER/BROKER DEALER [1.8%]
Bear Stearns 2,700 375
Goldman Sachs Group 5,600 879
Lehman Brothers Holdings 4,900 708
--------------------------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 1,962
==========================================================================
MACHINERY [2.7%]
Cummins 2,700 284
Eaton 19,700 1,437
Illinois Tool Works 13,000 1,252
--------------------------------------------------------------------------
TOTAL MACHINERY 2,973
==========================================================================
MEDICAL PRODUCTS & SERVICES [1.4%]
Bard (C.R.) 1,800 122
Becton Dickinson 5,600 345
Boston Scientific (A)* 47,000 1,083
--------------------------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 1,550
==========================================================================
METALS & MINING [0.3%]
Freeport-McMoran Copper & Gold, Cl B 4,600 275
Phelps Dodge 2,200 177
--------------------------------------------------------------------------
TOTAL METALS & MINING 452
==========================================================================
MULTI-MEDIA [0.7%]
Walt Disney * 27,300 761
==========================================================================
PAPER & PAPER PRODUCTS [0.2%]
Louisiana-Pacific 8,400 228
==========================================================================
PETROLEUM & FUEL PRODUCTS [6.3%]
Ashland 3,500 249
Burlington Resources 1,600 147
ChevronTexaco 35,400 2,052
ConocoPhillips 14,500 916
Devon Energy 8,800 538
Exxon Mobil 18,452 1,123
Marathon Oil 8,261 629
Occidental Petroleum 7,600 704
Valero Energy 11,000 658
--------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 7,016
==========================================================================
PETROLEUM REFINING [0.1%]
Amerada Hess 800 114
==========================================================================
See Notes to the Financial Statements.
23
AHA DIVERSIFIED EQUITY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Shares Value (000)
- --------------------------------------------------------------------------------
PETROLEUM SERVICES [4.1%]
BJ Services 31,700 $ 1,097
GlobalSantaFe 26,000 1,579
Halliburton 14,900 1,088
Schlumberger 6,700 848
--------------------------------------------------------------------------
TOTAL PETROLEUM SERVICES 4,612
==========================================================================
RAILROADS [0.4%]
Union Pacific 4,600 429
==========================================================================
REAL ESTATE INVESTMENT TRUSTS [0.5%]
Prologis Trust 5,500 294
Vornado Realty Trust 2,900 279
--------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS 573
==========================================================================
RETAIL [6.8%]
Autonation * 9,800 211
CVS 36,900 1,102
Darden Restaurants 6,400 263
Dillard's, Cl A 8,300 216
Federated Department Stores 6,100 445
Home Depot 58,200 2,461
JC Penney 1,600 97
Limited Brands 47,100 1,152
Lowe's 4,900 316
Sherwin Williams 4,800 237
Target 21,600 1,124
--------------------------------------------------------------------------
TOTAL RETAIL 7,624
==========================================================================
RUBBER & PLASTIC [0.2%]
Goodyear Tire & Rubber * 16,100 233
==========================================================================
SEMI-CONDUCTORS [2.7%]
Advanced Micro Devices * 8,600 285
Infineon Technologies (A)* 149,200 1,534
Intel 26,500 513
National Semiconductor 9,200 256
QLogic * 5,200 101
Texas Instruments 9,000 292
--------------------------------------------------------------------------
TOTAL SEMI-CONDUCTORS 2,981
==========================================================================
SPECIALTY MACHINERY [0.4%]
American Standard 9,900 424
==========================================================================
STEEL & STEEL WORKS [0.6%]
Nucor 4,100 429
United States Steel 4,100 249
--------------------------------------------------------------------------
TOTAL STEEL & STEEL WORKS 678
==========================================================================
TELEPHONES & TELECOMMUNICATIONS [1.1%]
Alltel 8,700 563
AT&T 4,300 116
BellSouth 1,600 56
Citizens Communications 16,900 224
Sprint Nextel 8,900 230
--------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 1,189
==========================================================================
Description Face Amount (000)/Shares Value (000)
- --------------------------------------------------------------------------------
TRUCKING [0.2%]
Ryder System 5,100 $ 228
==========================================================================
WEB PORTALS/ISP [0.3%]
Yahoo! * 10,000 323
==========================================================================
TOTAL COMMON STOCK
(Cost $93,817) 105,477
====================================================================
COMMERCIAL PAPER [0.9%]
Fenway Funding (B) (D)
4.950%, 04/03/06 $ 1,039 1,039
--------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $1,039) 1,039
====================================================================
REPURCHASE AGREEMENT [2.0%]
Credit Suisse First Boston (B)
4.930%, dated 03/31/06, matures
on 04/03/06, repurchase price
$2,237,838 (collateralized by
various corporate obligations,
ranging in par value $47,000 to
$500,000, 4.750% to 9.650%
08/01/08 to 07/15/48, total
market value $2,263,840) 2,212 2,212
--------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $2,212) 2,212
====================================================================
CASH EQUIVALENTS [5.5%]
AIM Short-Term Investment
Company, Liquid Assets
Portfolio (B) 146,938 147
Fidelity Institutional Domestic
Money Market Portfolio, Cl I,
4.590% (C) 2,982,706 2,983
Wachovia Institutional Trust, Cl I,
4.630% (C) 2,982,706 2,983
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $6,113) 6,113
====================================================================
TOTAL INVESTMENTS [102.9%]
(Cost $103,181) 114,841
====================================================================
See Notes to the Financial Statements.
24
AHA DIVERSIFIED EQUITY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Value (000)
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES:
Payable upon return of securities loaned $ (3,398)
Investment Advisory Fees Payable (62)
Distribution Fees Payable (24)
Administration Fees Payable (5)
Director Fees Payable (1)
Other Assets and Liabilities, Net 238
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [ -2.9%] (3,252)
====================================================================
NET ASSETS -- 100.0% $ 111,589
==========================================================================
NET ASSETS:
Paid-in-Capital
(unlimited authorization -- $0.01 par value) $ 95,404
Undistributed net investment income 25
Accumulated net realized gain on investments 4,500
Net unrealized appreciation on investments 11,660
--------------------------------------------------------------------------
NET ASSETS $ 111,589
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($101,390,162 / 5,731,094 shares) $ 17.69
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($10,198,647 / 575,264 shares) $ 17.73
==========================================================================
* Non-income producing security
(A) This security or a partial position of this security is on loan at March
31, 2006. The total value of securities on loan at March 31, 2006 was
$3,735,166. See note 8 in Notes to Financial Statements.
(B) This security was purchased with cash collateral received from securities
lending. The total value of such securities at March 31, 2006 was
$3,397,632. See note 8 in Notes to Financial Statements.
(C) Rate shown is the 7-day effective yield as of March 31, 2006.
(D) Rate shown is the 1-day effective yield as of March 31, 2006.
ADR -- American Depositary Receipt
Cl -- Class
ISP -- Internet Service Provider
See Notes to the Financial Statements.
25
AHA SOCIALLY RESPONSIBLE EQUITY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Shares Value (000)
- --------------------------------------------------------------------------------
COMMON STOCK [95.5%]
APPAREL/TEXTILES [2.2%]
VF 8,800 $ 501
==========================================================================
AUTOMOTIVE [3.3%]
Honda Motor, ADR 24,400 755
==========================================================================
BANKS [9.8%]
Chittenden 12,600 365
International Bancshares 15,125 434
National City 13,600 475
PNC Financial Services Group 6,800 458
Wachovia 9,500 532
--------------------------------------------------------------------------
TOTAL BANKS 2,264
==========================================================================
BROADCASTING & CABLE [2.6%]
Nokia, ADR (A) 29,200 605
==========================================================================
BUSINESS SERVICES [4.8%]
Automatic Data Processing 9,600 438
Xerox * 43,400 660
--------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 1,098
==========================================================================
CHEMICALS [4.9%]
Air Products & Chemicals 7,700 517
Rohm & Haas 12,600 616
--------------------------------------------------------------------------
TOTAL CHEMICALS 1,133
==========================================================================
CABLE/MEDIA [2.6%]
Time Warner 35,000 588
==========================================================================
COMPUTERS [3.7%]
Hewlett-Packard 25,700 846
==========================================================================
CONSUMER PRODUCTS & SERVICES [6.6%]
Kimberly-Clark 9,000 520
Mattel 28,200 511
Sony, ADR 10,700 493
--------------------------------------------------------------------------
TOTAL CONSUMER PRODUCTS & SERVICES 1,524
==========================================================================
DRUGS [4.9%]
Abbott Laboratories 12,800 544
Johnson & Johnson 3,800 225
Schering-Plough 19,600 372
--------------------------------------------------------------------------
TOTAL DRUGS 1,141
==========================================================================
ELECTRICAL SERVICES [3.2%]
Emerson Electric 8,700 728
==========================================================================
ENERGY [2.7%]
Atmos Energy 23,500 619
==========================================================================
FINANCIAL SERVICES [2.3%]
CIT Group 9,700 519
==========================================================================
Description Shares Value (000)
- --------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO [1.7%]
Supervalu 13,000 $ 401
==========================================================================
HEALTHCARE PRODUCTS & SERVICES [5.7%]
Applera - Applied Biosystems Group 29,200 793
Cardinal Health 7,100 529
--------------------------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 1,322
==========================================================================
INSURANCE [6.4%]
American International Group 3,500 231
First American 9,900 388
Mercury General 7,200 395
Metlife 9,700 469
--------------------------------------------------------------------------
TOTAL INSURANCE 1,483
==========================================================================
PAPER & PAPER PRODUCTS [2.1%]
MeadWestvaco 17,300 472
==========================================================================
PETROLEUM & FUEL PRODUCTS [9.3%]
BP, ADR 9,000 620
Chesapeake Energy 28,300 889
Unit Corp. 11,500 641
--------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 2,150
==========================================================================
PRINTING & PUBLISHING [6.6%]
Lee Enterprises 17,600 586
RR Donnelley & Sons 11,000 360
Thomson 15,600 583
--------------------------------------------------------------------------
TOTAL PRINTING & PUBLISHING 1,529
==========================================================================
TELEPHONES & TELECOMMUNICATIONS [4.5%]
Sprint Nextel 22,000 569
Telephone & Data Systems 12,000 473
--------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 1,042
==========================================================================
WASTE DISPOSAL [3.4%]
Waste Management 22,000 777
==========================================================================
WHOLESALE [2.2%]
W.W. Grainger 6,800 512
==========================================================================
TOTAL COMMON STOCK
(Cost $20,208) 22,009
=======================================================================
See Notes to the Financial Statements.
26
AHA SOCIALLY RESPONSIBLE EQUITY FUND
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
March 31, 2006 (Unaudited)
Description Shares/Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER [0.9%]
Fenway Funding (B) (D)
4.950%, 04/03/06 $ 195 $ 195
--------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $195) 195
====================================================================
REPURCHASE AGREEMENT [1.8%]
Credit Suisse First Boston (B)
4.930%, dated 03/31/06 matures
04/03/06, repurchase price $419,279
(collateralized by various corporate
obligations, ranging in par value
$47,000 to $500,000, 4.750% to
9.650%, 08/01/08 to 07/15/48,
total market value $424,151) 416 416
--------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $416) 416
====================================================================
CASH EQUIVALENTS [4.5%]
AIM Short-Term Investment
Company, Liquid Assets
Portfolio (B) 27,648 28
Fidelity Institutional Domestic
Money Market Portfolio, Cl I,
4.590% (C) 510,153 510
Wachovia Institutional Trust, Cl I,
4.630% (C) 510,153 510
--------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $1,048) 1,048
====================================================================
TOTAL INVESTMENTS [102.7%]
(Cost $21,867) 23,668
====================================================================
OTHER ASSETS AND LIABILITIES:
Payable Upon Return of Securities Loaned (639)
Payable for Fund Shares Redeemed (19)
Investment Advisory Fees Payable (14)
Administration Fees Payable (1)
Other Assets and Liabilities, Net 59
--------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES [-2.7%] (614)
====================================================================
NET ASSETS -- 100.0% $ 23,054
==========================================================================
Description Value (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Paid-in-Capital
(unlimited authorization -- $0.01 par value) $ 21,058
Undistributed net investment income 15
Accumulated net realized gain on investments 180
Net unrealized appreciation on investments 1,801
--------------------------------------------------------------------------
NET ASSETS $ 23,054
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Institutional Class
($23,000,936 / 2,148,293 shares) $ 10.71
==========================================================================
Net Asset Value, Offering and Redemption
Price Per Share -- Class A
($52,574 / 4,913 shares) $ 10.70
==========================================================================
* Non-income producing security
(A) This security or a partial position of this security is on loan at March
31, 2006. The total value of securities on loan at March 31, 2006 was
$605,024. See note 8 in Notes to Financial Statements.
(B) This security was purchased with cash collateral received from securities
lending. The total value of such securities at march 31, 2006 was
$639,304. See note 8 in Notes to Financial Statements.
(C) Rate shown is the 7-day effective yield as of March 31, 2006.
(D) Rate shown is the 1-day effective yield as of March 31, 2006.
ADR -- American Depositary Receipt
Cl -- Class
See Notes to the Financial Statements.
27
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (000'S)
For the six months ended March 31, 2006 (Unaudited)
AHA LIMITED MATURITY FIXED AHA FULL MATURITY FIXED
INCOME FUND INCOME FUND
-------------------------- -----------------------
INVESTMENT INCOME:
Interest $ 1,747 $ 766
------- -------
Total Investment Income 1,747 766
------- -------
EXPENSES:
Investment advisory fees 235 77
Administration fees 26 9
Distribution expense -- Class A Shares 1 --
Directors' fees and expenses 1 --
Reorganization expenses 64 17
Transfer agent fees and expenses 22 11
Registration fees 18 5
Audit fees 12 4
Reports to shareholders 11 3
Custodian fees and expenses 6 1
Legal fees 3 1
Other expenses 25 7
------- -------
Total expenses 424 135
------- -------
Advisory expense waiver/recovery(1) (71) (12)
------- -------
Net expenses 353 123
------- -------
Net investment income 1,394 643
------- -------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (898) (113)
Change in net unrealized appreciation
(depreciation) on investments 337 (614)
------- -------
Net realized and unrealized
loss on investments (561) (727)
------- -------
Net increase (decrease)
in net assets resulting
from operations $ 833 $ (84)
======= =======
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) See Note 3 in the Notes to Financial Statements for Advisory expense
recovery.
See Notes to the Financial Statements.
28
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (000'S)
For the six months ended March 31, 2006 (Unaudited)
AHA SOCIALLY RESPONSIBLE
AHA BALANCED FUND AHA DIVERSIFIED EQUITY FUND EQUITY FUND
----------------- --------------------------- ------------------------
INVESTMENT INCOME:
Dividends $ 97 $ 826 $ 232
Interest 158 106 12
Income from securities lending -- net -- 1 1
Foreign taxes withheld -- -- (3)
------- ------- -------
Total investment income 255 933 242
------- ------- -------
EXPENSES:
Investment advisory fees 67 373 83
Administration fees 5 28 6
Distribution expense -- Class A Shares -- 12 --
Directors' fees and expenses -- 1 1
Reorganization expenses 10 52 12
Transfer agent fees and expenses 6 19 10
Audit fees 2 12 3
Registration fees 2 13 3
Reports to shareholders 2 10 2
Custodian fees and expenses 1 4 1
Legal fees 1 3 --
Other expenses 4 19 4
------- ------- -------
Total expenses 100 546 125
------- ------- -------
Advisory expense waiver/recovery(1) (10) (32) (10)
------- ------- -------
Net expenses 90 514 115
------- ------- -------
Net investment income 165 419 127
------- ------- -------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 810 5,627 179
Change in net unrealized appreciation
(depreciation) on investments (117) 680 822
------- ------- -------
Net realized and unrealized gain
on investments 693 6,307 1,001
------- ------- -------
Net increase in net assets
resulting from operations $ 858 $ 6,726 $ 1,128
======= ======= =======
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) See Note 3 in the Notes to Financial Statements for Advisory expense
recovery.
See Notes to the Financial Statements.
29
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (000'S)
AHA LIMITED MATURITY FIXED INCOME FUND
------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE PERIOD FOR THE
MARCH 31, 2006 JULY 1, 2005 TO YEAR ENDED
(UNAUDITED)(1) SEPTEMBER 30, 2005 JUNE 30, 2005
---------------- ------------------ --------------
OPERATIONS:
Net investment income $ 1,394 $ 703 $ 2,941
Net realized loss on investments sold (898) (138) (729)
Change in net unrealized appreciation
(depreciation) on investments 337 (310) 36
---------------- ------------------ -------------
Net increase in net assets resulting
from investment operations 833 255 2,248
---------------- ------------------ -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends to shareholders from
net investment income
Class I (1,385) (699) (2,955)+
Class A (9) (5) (10)+
Distributions to shareholders from
net realized gains
Class I -- -- (168)
---------------- ------------------ -------------
Total dividends and distributions to shareholders (1,394) (704) (3,133)
---------------- ------------------ -------------
FUND SHARE TRANSACTIONS:
Fund Share Transactions: Class I
Net proceeds from shares sold 338 421 13,268
Reinvestment of dividends 726 385 1,874
Cost of shares redeemed (44,258) (16,480) (45,710)
---------------- ------------------ -------------
Total Fund Share Transactions Class I (43,194) (15,674) (30,568)
---------------- ------------------ -------------
Fund Share Transactions: Class A
Net proceeds from shares sold -- -- 1,066
Reinvestment of dividends 9 5 10
Cost of shares redeemed (637) (250) (1)
---------------- ------------------ -------------
Total Fund Share Transactions Class A (628) (245) 1,075
---------------- ------------------ -------------
Net decrease in net assets
from capital share contributions (43,822) (15,919) (29,493)
---------------- ------------------ -------------
Total decrease in net assets (44,383) (16,368) (30,378)
---------------- ------------------ -------------
NET ASSETS:
Beginning of period 113,203 129,571 159,949
---------------- ------------------ -------------
End of period $ 68,820 $ 113,203 $ 129,571
================ ================== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
+ Includes a tax return of capital of less than $1 (000's) for the Fund for
the year ended June 30, 2005.
(1) On October 3, 2005, the Limited Maturity Fixed Income Fund was reorganized
into the AHA Limited Maturity Fixed Income Fund, a newly established
identical series of the CNI Charter Funds. See Note 1 in Notes to
Financial Statements for more information.
See Notes to the Financial Statements.
30
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (000'S)
AHA FULL MATURITY FIXED INCOME FUND
------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE PERIOD FOR THE
MARCH 31, 2006 JULY 1, 2005 TO YEAR ENDED
(UNAUDITED)(1) SEPTEMBER 30, 2005 JUNE 30, 2005
---------------- ------------------ --------------
OPERATIONS:
Net investment income $ 643 $ 272 $ 1,092
Net realized gain (loss) on investments sold,
option contracts expired or closed and
futures contracts closed (113) (81) 230
Change in net unrealized appreciation
(depreciation) on investments, written options
and futures contracts (614) (356) 353
---------------- ------------------ -------------
Net increase (decrease) in net assets resulting
from investment operations (84) (165) 1,675
---------------- ------------------ -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends to shareholders from
net investment income
Class I (640) (276) (1,108)
Class A (3) (1) (4)
Distributions to shareholders from
net realized gains
Class I (179) -- (267)
Class A (1) -- (1)
---------------- ------------------ -------------
Total dividends and distributions to shareholders (823) (277) (1,380)
---------------- ------------------ -------------
FUND SHARE TRANSACTIONS:
Fund Share Transactions: Class I
Net proceeds from shares sold 2,856 125 5,020
Reinvestment of dividends 315 119 658
Cost of shares redeemed (3,493) -- (2,970)
---------------- ------------------ -------------
Total Fund Share Transactions Class I (322) 244 2,708
---------------- ------------------ -------------
Fund Share Transactions: Class A
Net proceeds from shares sold 9 1 29
Reinvestment of dividends 3 1 5
Cost of shares redeemed (5) -- (5)
---------------- ------------------ -------------
Total Fund Share Transactions Class A 7 2 29
---------------- ------------------ -------------
Net increase (decrease) in net assets
from capital share contributions (315) 246 2,737
---------------- ------------------ -------------
Total increase (decrease) in net assets (1,222) (196) 3,032
---------------- ------------------ -------------
NET ASSETS:
Beginning of period 31,898 32,094 29,062
---------------- ------------------ -------------
End of period $ 30,676 $ 31,898 $ 32,094
================ ================== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) On October 3, 2005, the Full Maturity Fixed Income Fund was reorganized
into the AHA Full Maturity Fixed Income Fund, a newly established
identical series of the CNI Charter Funds. See Note 1 in Notes to
Financial Statements for additional information.
See Notes to the Financial Statements.
31
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (000'S)
AHA BALANCED FUND
-----------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE PERIOD FOR THE
MARCH 31, 2006 JULY 1, 2005 TO YEAR ENDED
(UNAUDITED)(1) SEPTEMBER 30, 2005 JUNE 30, 2005
---------------- ------------------ -------------
OPERATIONS:
Net investment income $ 165 $ 72 $ 293
Net realized gain on investments sold 810 82 1,152
Change in net unrealized appreciation (depreciation)
on investments (117) 182 51
---------------- ------------------ -------------
Net increase in net assets resulting
from investment operations 858 336 1,496
---------------- ------------------ -------------
DIVIDENDS TO SHAREHOLDERS:
Dividends to shareholders from
net investment income
Class I (164) (75) (301)
Distributions to shareholders from
net realized gains
Class I (1,084) -- --
---------------- ------------------ -------------
Total dividends and distributions to shareholders (1,248) (75) (301)
---------------- ------------------ -------------
FUND SHARE TRANSACTIONS:
Fund Share Transactions: Class I
Net proceeds from shares sold -- -- --
Reinvestment of dividends 54 3 13
Cost of shares redeemed -- -- (50)
---------------- ------------------ -------------
Total Fund Share Transactions Class I 54 3 (37)
---------------- ------------------ -------------
Net increase (decrease) in net assets
from capital share contributions 54 3 (37)
---------------- ------------------ -------------
Total increase (decrease) in net assets (336) 264 1,158
---------------- ------------------ -------------
NET ASSETS:
Beginning of period 18,352 18,088 16,930
---------------- ------------------ -------------
End of period* $ 18,016 $ 18,352 $ 18,088
================ ================== =============
* Including undistributed
net investment income of: $ 12 $ 11 $ 11
================ ================== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) On October 3, 2005, the Balanced Fund was reorganized into the AHA
Balanced Fund, a newly established identical series of the CNI Charter
Funds. See Note 1 in Notes to Financial Statements for additional
information.
See Notes to the Financial Statements.
32
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (000'S)
AHA DIVERSIFIED EQUITY FUND
-----------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE PERIOD FOR THE
MARCH 31, 2006 JULY 1, 2005 TO YEAR ENDED
(UNAUDITED)(1) SEPTEMBER 30, 2005 JUNE 30, 2005
---------------- ------------------ -------------
OPERATIONS:
Net investment income $ 419 $ 103 $ 639
Net realized gain on investments sold 5,627 1,203 6,989
Change in net unrealized appreciation
on investments 680 2,209 734
---------------- ------------------ -------------
Net increase in net assets resulting
from investment operations 6,726 3,515 8,362
---------------- ------------------ -------------
DIVIDENDS TO SHAREHOLDERS:
Dividends to shareholders from
net investment income
Class I (370) (98) (609)
Class A (29) (5) (43)
Distributions to shareholders from
net realized gains
Class I (3,918) -- --
Class A (440) -- --
---------------- ------------------ -------------
Total dividends and distributions to shareholders (4,757) (103) (652)
---------------- ------------------ -------------
FUND SHARE TRANSACTIONS:
Fund Share Transactions: Class I
Net proceeds from shares sold 24,953 988 8,194
Reinvestment of dividends 2,915 78 498
Cost of shares redeemed (9,727) (4,209) (2,277)
---------------- ------------------ -------------
Total Fund Share Transactions Class I 18,141 (3,143) 6,415
---------------- ------------------ -------------
Fund Share Transactions: Class A
Net proceeds from shares sold 633 391 1,161
Reinvestment of dividends 423 5 37
Cost of shares redeemed (475) (119) (432)
---------------- ------------------ -------------
Total Fund Share Transactions Class A 581 277 766
---------------- ------------------ -------------
Net increase (decrease) in net assets
from capital share contributions 18,722 (2,866) 7,181
---------------- ------------------ -------------
Total increase in net assets 20,691 546 14,891
---------------- ------------------ -------------
NET ASSETS:
Beginning of period 90,898 90,352 75,461
---------------- ------------------ -------------
End of period* $ 111,589 $ 90,898 $ 90,352
================ ================== =============
* Including undistributed
net investment income of: $ 25 $ 5 $ 5
================ ================== =============
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) On October 3, 2005, the Diversified Equity Fund was reorganized into the
AHA Diversified Equity Fund, a newly established identical series of the
CNI Charter Funds. See Note 1 in Notes to Financial Statements for
additional information.
See Notes to the Financial Statements.
33
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (000'S)
AHA SOCIALLY RESPONSIBLE EQUITY FUND
---------------------------------------------------------
FOR THE FOR THE PERIOD
SIX MONTHS ENDED FOR THE PERIOD JANUARY 3, 2005**
MARCH 31, 2006 JULY 1, 2005 TO TO
(UNAUDITED)(1) SEPTEMBER 30, 2005 JUNE 30, 2005
---------------- ------------------ -----------------
OPERATIONS:
Net investment income $ 127 $ 49 $ 111
Net realized gain on investments sold 179 69 34
Change in net unrealized appreciation
(depreciation) on investments 822 1,155 (176)
---------------- ------------------ -----------------
Net increase (decrease) in net assets resulting
from investment operations 1,128 1,273 (31)
---------------- ------------------ -----------------
DIVIDENDS TO SHAREHOLDERS:
Dividends to shareholders from
net investment income
Class I (118) (45) (109)
Distributions to shareholders from
net realized gains
Class I (102) -- --
---------------- ------------------ -----------------
Total dividends and distributions to shareholders (220) (45) (109)
---------------- ------------------ -----------------
FUND SHARE TRANSACTIONS:
Fund Share Transactions: Class I
Net proceeds from shares sold 1,106 467 21,083
Reinvestment of dividends 220 45 109
Cost of shares redeemed (1,026) (455) (542)
---------------- ------------------ -----------------
Total Fund Share Transactions Class I 300 57 20,650
---------------- ------------------ -----------------
Fund Share Transactions: Class A+
Net proceeds from shares sold 36 15 --
Reinvestment of dividends -- -- --
Cost of shares redeemed -- -- --
---------------- ------------------ -----------------
Total Fund Share Transactions Class A 36 15 --
---------------- ------------------ -----------------
Net increase in net assets
from capital share contributions 336 72 20,650
---------------- ------------------ -----------------
Total increase in net assets 1,244 1,300 20,510
---------------- ------------------ -----------------
NET ASSETS:
Beginning of period 21,810 20,510 --
---------------- ------------------ -----------------
End of period* $ 23,054 $ 21,810 $ 20,510
================ ================== =================
* Including undistributed
net investment income of: $ 15 $ 6 $ 2
================ ================== =================
** Commencement of operations
+ Class A shares were offered starting August 12, 2005.
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) On October 3, 2005, the Socially Responsible Equity Fund was reorganized
into the AHA Socially Responsible Equity Fund, a newly established
identical series of the CNI Charter Funds. See Note 1 in Notes to
Financial Statements for additional information.
See Notes to the Financial Statements.
34
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AHA LIMITED MATURITY FIXED INCOME FUND - CLASS I SHARES
FOR THE
SIX MONTHS FOR THE PERIOD FOR THE YEARS ENDED JUNE 30,
ENDED JULY 1, 2005 ----------------------------
MARCH 31, THROUGH
2006 SEPTEMBER 30,
(UNAUDITED)+ 2005* 2005 2004
------------ -------------- ----------- -----------
PER SHARE DATA(1)(6):
Net Asset Value,
Beginning of Period $ 10.57 $ 10.61 $ 10.68 $ 10.86
------------ -------------- ----------- -----------
Income from Investment
Operations:
Net investment income 0.16 0.06 0.22 0.18
Net realized and unrealized
gain (loss) on investments (0.07) (0.04) (0.06) (0.18)
------------ -------------- ----------- -----------
Total gain from
investment operations 0.09 0.02 0.16 0.00
------------ -------------- ----------- -----------
Less Dividends and Distributions:
From net investment income (0.16) (0.06) (0.22)(8) (0.18)
From realized gains -- -- (0.01) --
------------ -------------- ----------- -----------
Total dividends and
distributions (0.16) (0.06) (0.23) (0.18)
------------ -------------- ----------- -----------
Net Asset Value, End of Period $ 10.50 $ 10.57 $ 10.61 $ 10.68
============ ============== =========== ===========
Total Return on Net Asset Value(2) 0.89%(9) 0.20%(9) 1.53% (0.05)%
SUPPLEMENTAL DATA AND RATIOS(6):
Net assets, end of period (000's) $ 68,629 $ 112,381 $ 128,501 $ 159,949
Ratio of net operating expenses
to average net assets(3)(4):
Before waivers and recoveries 0.90%(10) 0.88%(10) 0.79% 0.73%
After waivers and recoveries 0.75%(10) 0.86%(10) 0.78% 0.73%
Program service fee(4) N/A N/A N/A N/A
Ratio of net investment income
to average net assets(3) 2.97%(10) 2.20%(10) 2.01% 1.65%
Portfolio turnover rate(7) 51.77% 4.33% 109.44% 97.66%
AHA LIMITED MATURITY FIXED INCOME FUND - CLASS I SHARES
FOR THE YEARS ENDED JUNE 30,
---------------------------------------
2003 2002 2001
------------ -------- -----------
PER SHARE DATA(1)(6):
Net Asset Value,
Beginning of Period $ 10.65 $ 10.43 $ 10.11
------------ -------- -----------
Income from Investment
Operations:
Net investment income (0.28) 0.44 0.63
Net realized and unrealized
gain (loss) on investments 0.21 0.22 0.32
------------ -------- -----------
Total gain from
investment operations 0.49 0.66 0.95
------------ -------- -----------
Less Dividends and Distributions:
From net investment income (0.28) (0.44) (0.63)
From realized gains -- -- --
------------ -------- -----------
Total dividends and
distributions (0.28) (0.44) (0.63)
------------ -------- -----------
Net Asset Value, End of Period $ 10.86 $ 10.65 $ 10.43
============ ======== ===========
Total Return on Net Asset Value(2) 4.65% 6.16% 9.17%
SUPPLEMENTAL DATA AND RATIOS(6):
Net assets, end of period (000's) $ 96,605 $ 85,644 $ 51,076
Ratio of net operating expenses
to average net assets(3)(4):
Before waivers and recoveries 0.83% 0.78% 0.24%
After waivers and recoveries 0.85% 0.76% 0.24%
Program service fee(4) N/A 0.13% 0.50%
Ratio of net investment income
to average net assets(3) 2.58% 4.00% 6.50%
Portfolio turnover rate(7) N/A 60.24%(5) 189.31%
* The Fund's fiscal and tax year-end changed from June 30 to September 30.
+ On October 3, 2005, the Limited Maturity Fixed Income Fund was reorganized
into the AHA Limited Maturity Fixed Income Fund, a newly established
identical series of the CNI Charter Funds. See Note 1 in Notes to
Financial Statements for more information.
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Total Return on Net Asset Value is net of the service fee for the period
July 1, 2001 through October 31, 2001, and for the fiscal year ended 2001.
Beginning November 1, 2001 the management fee is included in the
calculation of the Fund's net asset value.
(3) Ratios include all management fees and expenses except for the program
service fee.
(4) Program service fee discontinued as of October 31, 2001. Effective
November 1, 2001, the Advisor expense ratio is included as a general
operating expense of the Fund.
(5) Rate listed represents the portfolio turnover rate from July 1, 2001
through October 31, 2001 (date on which Feeder Fund entered into a
master-feeder fund structure).
(6) For the period from November 1, 2001 through June 30, 2003, the per share
amounts and percentages reflect income and expenses assuming inclusion of
the Fund's proportionate share of the income and expenses of its Master
Portfolio.
(7) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. For periods less than 1 year,
portfolio turnover rate has not been annualized.
(8) Includes a tax return of capital of $355, which is less than $0.01 per
share, for the Fund for the year ended June 30, 2005.
(9) Not annualized.
(10) Annualized.
See Notes to the Financial Statements.
35
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AHA LIMITED MATURITY FIXED INCOME FUND -
CLASS A SHARES
FOR THE
SIX MONTHS ENDED FOR THE PERIOD FOR THE PERIOD
MARCH 31, 2006 JULY 1, 2005 THROUGH OCTOBER 22, 2004* THROUGH
(UNAUDITED)+ SEPTEMBER 30, 2005** JUNE 30, 2005
---------------- -------------------- -------------------------
PER SHARE DATA(1):
Net Asset Value,
Beginning of Period $ 10.58 $ 10.62 $ 10.77
-------- --------- ---------
Income from Investment Operations:
Net investment income 0.18 0.05 0.14
Net realized and unrealized loss on investments (0.10) (0.04) (0.13)
-------- --------- ---------
Total gain from investment operations 0.08 0.01 0.01
-------- --------- ---------
Less Dividends and Distributions:
From net investment income (0.15) (0.05) (0.15)(3)
From realized gains -- -- (0.01)
-------- --------- ---------
Total dividends and distributions (0.15) (0.05) (0.16)
-------- --------- ---------
Net Asset Value, End of Period $ 10.51 $ 10.58 $ 10.62
======== ========= =========
Total Return on Net Asset Value 0.71%(4) 0.13%(4) 0.12%(4)
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000's) $ 191 $ 822 $ 1,070
Ratio of net operating expenses to average net
assets:
Before waivers and recoveries 1.15%(5) 1.11%(5) 1.07%(5)
After waivers and recoveries 1.00%(5) 1.10%(5) 1.03%(5)
Ratio of net investment income to average net
assets 2.73%(5) 1.95%(5) 1.75%(5)
Portfolio turnover rate(2) 51.77% 4.33% 109.44%
* Commencement of operations.
** The Fund's fiscal and tax year-end changed from June 30 to September 30.
+ On October 3, 2005, the Limited Maturity Fixed Income Fund was reorganized
into the AHA Limited Maturity Fixed Income Fund, a newly established
identical series of the CNI Charter Funds. See Note 1 in Notes to
Financial Statements for more information.
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. For periods less than 1 year,
portfolio turnover rate has not been annualized.
(3) Includes a tax return of capital of $355, which is less than $0.01 per
share, for the Fund for the year ended June 30, 2005.
(4) Not annualized.
(5) Annualized.
See Notes to the Financial Statements.
36
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AHA FULL MATURITY FIXED INCOME FUND - CLASS I SHARES
FOR THE
SIX MONTHS FOR THE PERIOD FOR THE YEARS ENDED JUNE 30,
ENDED JULY 1, 2005 --------------------------------------------------------
MARCH 31, THROUGH
2006 SEPTEMBER 30,
(UNAUDITED)+ 2005* 2005 2004 2003 2002 2001
------------ -------------- --------- --------- -------- -------- --------
PER SHARE DATA(1)(7):
Net Asset Value,
Beginning of Period $ 10.35 $ 10.50 $ 10.39 $ 10.87 $ 10.34 $ 10.10 $ 9.68
-------- -------- -------- --------- -------- -------- --------
Income from Investment
Operations:
Net investment income 0.21 0.09 0.38 0.36(2) 0.49 0.52 0.63
Net realized and unrealized gain
(loss) on investments (0.23) (0.15) 0.20 (0.36) 0.53 0.24 0.42
-------- -------- -------- --------- -------- -------- --------
Total gain (loss) from
investment operations (0.02) (0.06) 0.58 0.00 1.02 0.76 1.05
-------- -------- -------- --------- -------- -------- --------
Less Dividends and Distributions:
From net investment income (0.21) (0.09) (0.38) (0.39) (0.49) (0.52) (0.63)
From realized gains (0.06) -- (0.09) (0.09) -- -- --
-------- -------- -------- --------- -------- -------- --------
Total dividends and
distributions (0.27) (0.09) (0.47) (0.48) (0.49) (0.52) (0.63)
-------- -------- -------- --------- -------- -------- --------
Net Asset Value, End of Period $ 10.06 $ 10.35 $ 10.50 $ 10.39 $ 10.87 $ 10.34 $ 10.10
======== ======== ======== ========= ======== ======== ========
Total Return on Net Asset Value(3) (0.18)%(9) 0.57%(9) 5.72% 0.08% 10.06% 7.40% 10.61%
SUPPLEMENTAL DATA AND RATIOS(7):
Net assets, end of period (000's) $ 30,540 $ 31,764 $ 31,960 $ 28,958 $ 31,264 $ 38,267 $ 38,540
Ratio of net operating expenses to
average net assets(4)(5):
Before waivers and recoveries 0.88%(10) 0.83%(10) 0.95% 0.98% 1.29% 1.08% 0.31%
After waivers and recoveries 0.80%(10) 1.00%(10) 1.00% 1.00% 1.00% 0.76% 0.31%
Program service fee(5) N/A N/A N/A N/A N/A 0.17% 0.50%
Ratio of net investment income to
average net assets(4) 4.17%(10) 3.37%(10) 3.58% 3.40% 4.51% 5.09% 6.74%
Portfolio turnover rate(8) 59.66% 17.47% 144.07% 302.49% N/A 99.46%(6) 236.10%
* The Fund's fiscal and tax year-end changed from June 30 to September 30.
+ On October 3, 2005, the Full Maturity Fixed Income Fund was reorganized
into the AHA Full Maturity Fixed Income Fund, a newly established
identical series of the CNI Charter Funds. See Note 1 in Notes to
Financial Statements for additional information.
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Net investment income per share is calculated using ending balances prior
to consideration of adjustments for permanent book and tax differences.
(3) Total Return on Net Asset Value is net of the service fee for the period
from July 1, 2001 through October 31, 2001, and for the fiscal year ended
2001. Beginning November 1, 2001 the management fee is included in the
calculation of the Fund's net asset value.
(4) Ratios include all management fees and expenses except for the program
service fee.
(5) Program service fee discontinued as of October 31, 2001. Effective
November 1, 2001, the Advisor expense ratio is included as a general
operating expense of the Fund.
(6) Rate listed represents the portfolio turnover rate from July 1, 2001
through October 31, 2001 (date on which Feeder Fund entered into a
master-feeder fund structure).
(7) For the period from November 1, 2001 through June 30, 2003, the per share
amounts and percentages reflect income and expenses assuming inclusion of
the Fund's proportionate share of the income and expenses of its Master
Portfolio.
(8) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. For periods less than 1 year,
portfolio turnover rate has not been annualized.
(9) Not annualized.
(10) Annualized.
See Notes to the Financial Statements.
37
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AHA FULL MATURITY FIXED INCOME FUND -
CLASS A SHARES
FOR THE FOR THE PERIOD FOR THE PERIOD
SIX MONTHS ENDED JULY 1, 2005 FOR THE MAY 11, 2004*
MARCH 31, 2006 THROUGH YEAR ENDED THROUGH
(UNAUDITED)+ SEPTEMBER 30, 2005** JUNE 30, 2005 JUNE 30, 2004
---------------- -------------------- ------------- --------------
PER SHARE DATA(1):
Net Asset Value,
Beginning of Period $ 10.36 $ 10.50 $ 10.39 $ 10.32
------- ------- ------- -------
Income from Investment Operations:
Net investment income 0.20 0.08 0.34 0.04
Net realized and unrealized gain
(loss) on investments (0.24) (0.14) 0.22 0.09
------- ------- ------- -------
Total gain (loss) from investment
operations (0.04) (0.06) 0.56 0.13
------- ------- ------- -------
Less Dividends and Distributions:
From net investment income (0.20) (0.08) (0.36) (0.06)
From realized gains (0.06) -- (0.09) --
------- ------- ------- -------
Total dividends and distributions (0.26) (0.08) (0.45) (0.06)
------- ------- ------- -------
Net Asset Value, End of Period $ 10.06 $ 10.36 $ 10.50 $ 10.39
======= ======= ======= =======
Total Return on Net Asset Value (0.40)%(2) (0.54)%(2) 5.46% 1.29%(2)
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000's) $ 136 $ 134 $ 134 $ 104
Ratio of net operating expenses to
average net assets:
Before expense waivers and recoveries 1.13%(3) 1.08%(3) 1.20% 1.15%(3)
After expense waivers and recoveries 1.05%(3) 1.25%(3) 1.25% 1.25%(3)
Ratio of net investment income to average
net assets 3.92%(3) 3.12%(3) 3.33% 3.27%(3)
Portfolio turnover rate(4) 59.66% 17.47% 144.07% 302.49%
* Commencement of operations.
** The Fund's fiscal and tax year-end changed from June 30 to September 30.
+ On October 3, 2005, the Full Maturity Fixed Income Fund was reorganized
into the AHA Full Maturity Fixed Income Fund, a newly established
identical series of the CNI Charter Funds. See Note 1 in Notes to
Financial Statements for additional information.
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Not annualized.
(3) Annualized.
(4) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. For periods less than 1 year,
portfolio turnover rate has not been annualized.
See Notes to the Financial Statements.
38
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AHA BALANCED FUND - CLASS I SHARES
FOR THE
SIX MONTHS FOR THE PERIOD FOR THE YEARS ENDED JUNE 30,
ENDED JULY 1, 2005 ----------------------------------------------------------
MARCH 31, THROUGH
2006 SEPTEMBER 30,
(UNAUDITED)+ 2005* 2005 2004 2003 2002 2001
------------ -------------- -------- -------- -------- --------- ----------
PER SHARE DATA(1)(7):
Net Asset Value,
Beginning of Period $ 9.76 $ 9.62 $ 8.98 $ 8.03 $ 8.03 $ 9.17 $ 12.44
-------- -------- -------- -------- -------- --------- ----------
Income from Investment
Operations:
Net investment income 0.09 0.04 0.16 0.10(2) 0.11 0.12 0.45
Net realized and unrealized
gain (loss) on investments 0.37 0.14 0.64 0.97 -- (0.72) 0.16
-------- -------- -------- -------- -------- --------- ----------
Total gain (loss) from
investment operations 0.46 0.18 0.80 1.07 0.11 (0.60) 0.61
-------- -------- -------- -------- -------- --------- ----------
Less Dividends and Distributions:
From net investment income (0.09) (0.04) (0.16) (0.12) (0.11) (0.12) (0.36)
From realized gains (0.58) -- -- -- -- (0.42) (3.52)
-------- -------- -------- -------- -------- --------- ----------
Total dividends and
distributions (0.67) (0.04) (0.16) (0.12) (0.11) (0.54) (3.88)
-------- -------- -------- -------- -------- --------- ----------
Net Asset Value, End of Period $ 9.55 $ 9.76 $ 9.62 $ 8.98 $ 8.03 $ 8.03 $ 9.17
======== ======== ======== ======== ======== ========= ==========
Total Return on Net Asset Value(3) 4.84%(8) 1.87%(8) 8.97% 13.41% 1.40% (6.94)% 6.21%
SUPPLEMENTAL DATA AND RATIOS(7):
Net assets, end of period (000's) $ 18,016 $ 18,352 $ 18,088 $ 16,930 $ 18,615 $ 23,375 $ 23,591
Ratio of net operating expenses to
average net assets(4)(5):
Before waivers and recoveries 1.12%(9) 1.10%(9) 1.25% 1.31% 1.81% 1.64% 0.46%
After waivers and recoveries 1.00%(9) 0.98%(9) 1.20% 1.50% 1.50% 1.13% 0.46%
Program service fee(5) N/A N/A N/A N/A N/A 0.24% 0.75%
Ratio of net investment income to
average net assets(4) 1.84%(9) 1.54%(9) 1.69% 1.14% 1.43% 1.42% 2.66%
Portfolio turnover rate 31.99% 13.53% 98.60% 69.85% N/A 80.33%(6) 220.34%
* The Fund's fiscal and tax year-end changed from June 30 to September 30.
+ On October 3, 2005, the Balanced Fund was reorganized into the AHA
Balanced Fund, a newly established identical series of the CNI Charter
Funds. See Note 1 in Notes to Financial Statements for additional
information.
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Net investment income per share is calculated using ending balances prior
to consideration of adjustments for permanent book and tax differences.
(3) Total Return on Net Asset Value is net of the service fee for the period
from July 1, 2001 through October 31, 2001, and for the fiscal year ended
2001. Beginning November 1, 2001 the management fee is included in the
calculation of the Fund's net asset value.
(4) Ratios include all management fees and expenses except for the program
service fee.
(5) Program service fee discontinued as of October 31, 2001. Effective
November 1, 2001, the Advisor expense ratio is included as a general
operating expense of the Fund.
(6) Rate listed represents the portfolio turnover rate from July 1, 2001
through October 31, 2001 (date on which Feeder Fund entered into a
master-feeder fund structure).
(7) For the period from November 1, 2001 through June 30, 2003, the per share
amounts and percentages reflect income and expenses assuming inclusion of
the Fund's proportionate share of the income and expenses of its Master
Portfolio.
(8) Not annualized.
(9) Annualized.
See Notes to the Financial Statements.
39
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AHA DIVERSIFIED EQUITY FUND - CLASS I SHARES
FOR THE
SIX MONTHS FOR THE PERIOD FOR THE YEARS ENDED JUNE 30,
ENDED JULY 1, 2005 ----------------------------------------------------------
MARCH 31, THROUGH
2006 SEPTEMBER 30,
(UNAUDITED)+ 2005* 2005 2004 2003 2002 2001
------------ -------------- ---------- ---------- ---------- ---------- ----------
PER SHARE DATA(1)(6):
Net Asset Value, Beginning of Period $ 17.42 $ 16.79 $ 15.39 $ 12.74 $ 13.08 $ 15.90 $ 21.04
---------- --------- ------- ------- ------- -------- -------
Income from Investment Operations:
Net investment income 0.08 0.02 0.13 0.10 0.08 0.10 0.26
Net realized and unrealized gain
(loss) on investments 1.06 0.63 1.40 2.65 (0.34) (2.01) (0.21)
---------- --------- ------- ------- ------- ------- -------
Total gain (loss) from investment
operations 1.14 0.65 1.53 2.75 (0.26) (1.91) 0.05
---------- --------- ------- ------- ------- ------- -------
Less Dividends and Distributions:
From net investment income (0.07) (0.02) (0.13) (0.10) (0.08) (0.11) (0.26)
From realized gains (0.80) -- -- -- -- (0.80) (4.93)
---------- --------- ------- ------- ------- ------- -------
Total dividends and distributions (0.87) (0.02) (0.13) (0.10) (0.08) (0.91) (5.19)
---------- --------- ------- ------- ------- ------- -------
Net Asset Value, End of Period $ 17.69 $ 17.42 $ 16.79 $ 15.39 $ 12.74 $ 13.08 $ 15.90
========== ========= ======= ======= ======= ======= =======
Total Return on Net Asset Value(2) 6.76%(8) 3.88%(8) 9.95% 21.60% (1.98)% (12.75)% 1.17%
SUPPLEMENTAL DATA AND RATIOS(6):
Net assets, end of period (000's) $ 101,390 $ 81,447 $81,510 $68,068 $55,564 $85,673 $92,053
Ratio of net operating expenses to
average net assets:(3)(4)
Before waivers and recoveries 1.07%(9) 1.08%(9) 1.07% 1.02% 1.18% 0.84% 0.16%
After waivers and recoveries 1.01%(9) 1.13%(9) 1.05% 1.02% 1.18% 0.84% 0.16%
Program service fee(4) N/A N/A N/A N/A N/A 0.25% 0.75%
Ratio of net investment income to
average net assets(3) 0.87%(9) 0.46%(9) 0.78% 0.67% 0.61% 0.66% 1.33%
Portfolio turnover rate(7) 47.01% 20.08% 128.37% 97.51% N/A 29.13%(5) 99.48%
* The Fund's fiscal and tax year-end changed from June 30 to September 30.
+ On October 3, 2005, the Diversified Equity Fund was reorganized into the
AHA Diversified Equity Fund, a newly established identical series of the
CNI Charter Funds. See Note 1 in Notes to Financial Statements for
additional information.
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Total Return on Net Asset Value is net of the service fee for the period
from July 1, 2001 through October 31, 2001, and for the fiscal year ended
2001. Beginning November 1, 2001 the management fee is included in the
calculation of the Fund's net asset value.
(3) Ratios include all management fees and expenses except for the program
service fee.
(4) Program service fee discontinued as of October 31, 2001. Effective
November 1, 2001, the Advisor expense ratio is included as a general
operating expense of the Fund.
(5) Rate listed represents the portfolio turnover rate from July 1, 2001
through October 31, 2001 (date on which Feeder Fund entered into a
master-feeder fund structure).
(6) For the period from November 1, 2001 through June 30, 2003, the per share
amounts and percentages reflect income and expenses assuming inclusion of
the Fund's proportionate share of the income and expenses of its Master
Portfolio.
(7) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. For periods less than 1 year,
portfolio turnover rate has not been annualized.
(8) Not annualized.
(9) Annualized.
See Notes to the Financial Statements.
40
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AHA DIVERSIFIED EQUITY FUND - CLASS A SHARES
FOR THE FOR THE YEARS ENDED JUNE 30,
SIX MONTHS FOR THE PERIOD ----------------------------
ENDED JULY 1, 2005 FOR THE PERIOD
MARCH 31, THROUGH DECEMBER 30,
2006 SEPTEMBER 30, 2002* THROUGH
(UNAUDITED)+ 2005** 2005 2004 JUNE 30, 2003
------------ -------------- ---------- ---------- --------------
PER SHARE DATA(1)(4):
Net Asset Value, Beginning of Period $ 17.46 $ 16.83 $ 15.43 $ 12.75 $ 11.48
-------- -------- -------- -------- ---------
Income from Investment Operations:
Net investment income 0.05 0.01 0.09 0.06 0.03
Net realized and unrealized gain on
investments 1.07 0.63 1.40 2.65 1.26
-------- -------- -------- -------- ---------
Total gain from investment operations 1.12 0.64 1.49 2.71 1.29
-------- -------- -------- -------- ---------
Less Dividends:
From net investment income (0.05) (0.01) (0.09) (0.03) (0.02)
From realized gains (0.80) -- -- -- --
-------- -------- -------- -------- ---------
Total dividends and distributions (0.85) (0.01) (0.09) (0.03) (0.02)
-------- -------- -------- -------- ---------
Net Asset Value, End of Period $ 17.73 $ 17.46 $ 16.83 $ 15.43 $ 12.75
======== ======== ======== ======== =========
Total Return on Net Asset Value 6.62%(2) 3.81%(2) 9.66% 21.24% 11.26%(2)
SUPPLEMENTAL DATA AND RATIOS(4):
Net assets, end of period (000's) $ 10,199 $ 9,451 $ 8,842 $ 7,392 $ 6,454
Ratio of net operating expenses to
average net assets:
Before waivers and recoveries 1.32%(3) 1.34%(3) 1.32% 1.27% 1.45%(3)
After waivers and recoveries 1.26%(3) 1.38%(3) 1.30% 1.27% 1.45%(3)
Ratio of net investment income to
average net assets 0.61%(3) 0.20%(3) 0.53% 0.42% 0.48%(3)
Portfolio turnover rate(5) 47.01% 20.08% 128.37% 97.51% N/A
* Commencement of operations.
** The Fund's fiscal and tax year-end changed from June 30 to September 30.
+ On October 3, 2005, the Diversified Equity Fund was reorganized into the
AHA Diversified Equity Fund, a newly established identical series of the
CNI Charter Funds. See Note 1 in Notes to Financial Statements for
additional information.
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Not annualized.
(3) Annualized.
(4) For the period from December 30, 2002 through June 30, 2003, the per share
amounts and percentages reflect income and expenses assuming inclusion of
the Fund's proportionate share of the income and expenses of its Master
Portfolio.
(5) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. For periods less than 1 year,
portfolio turnover rate has not been annualized.
See Notes to the Financial Statements.
41
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AHA SOCIALLY RESPONSIBLE EQUITY FUND --
CLASS I SHARES
FOR THE FOR THE PERIOD FOR THE PERIOD
SIX MONTHS ENDED JULY 1, 2005 JANUARY 3, 2005*
MARCH 31, 2006 THROUGH THROUGH
(UNAUDITED)+ SEPTEMBER 30, 2005** JUNE 30, 2005
---------------- -------------------- ----------------
PER SHARE DATA(1):
Net Asset Value,
Beginning of Period $ 10.28 $ 9.70 $ 10.00
---------------- -------------------- -----------------
Income from Investment Operations:
Net investment income 0.06 0.02 0.05
Net realized and unrealized gain (loss) on
investments 0.48 0.58 (0.30)
---------------- -------------------- ----------------
Total gain (loss) from investment operations 0.54 0.60 (0.25)
---------------- -------------------- ----------------
Less Dividends:
From net investment income (0.06) (0.02) (0.05)
From realized gains (0.05) -- --
---------------- -------------------- ----------------
Total dividends and distributions (0.11) (0.02) (0.05)
---------------- -------------------- ----------------
Net Asset Value, End of Period $ 10.71 $ 10.28 $ 9.70
================ ==================== ================
Total Return on Net Asset Value 5.22%(2) 6.20%(2) (2.48)%(2)
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000's) $ 23,001 $ 21,795 $ 20,510
Ratio of net operating expenses to average net assets:
Before waivers 1.13%(3) 1.24%(3) 1.16%(3)
After waivers 1.04%(3) 1.15%(3) 1.12%(3)
Ratio of net investment income to average net assets 1.15%(3) 0.90%(3) 1.43%(3)
Portfolio turnover rate(4) 14.65% 6.89% 47.56%
* Commencement of operations.
** The Fund's fiscal and tax year-end changed from June 30 to September 30.
+ On October 3, 2005, the Socially Responsible Equity Fund was reorganized
into the AHA Socially Responsible Equity Fund, a newly established
identical series of the CNI Charter Funds. See Note 1 in Notes to
Financial Statements for additional information.
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Not annualized.
(3) Annualized.
(4) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. For periods less than 1 year,
portfolio turnover rate has not been annualized.
See Notes to the Financial Statements.
42
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
AHA SOCIALLY RESPONSIBLE EQUITY FUND --
CLASS A SHARES
FOR THE FOR THE PERIOD
SIX MONTHS ENDED AUGUST, 12, 2005*
MARCH 31, 2006 THROUGH
(UNAUDITED)+ SEPTEMBER 30, 2005
----------------- ------------------
PER SHARE DATA(1):
Net Asset Value,
Beginning of Period $ 10.28 $ 10.17
----------------- ------------------
Income from Investment Operations:
Net investment income 0.05 0.01
Net realized and unrealized gain on investments 0.47 0.12
----------------- ------------------
Total gain from investment operations 0.52 0.13
----------------- ------------------
Less Dividends:
From net investment income (0.05) (0.02)
From realized gains (0.05) --
----------------- ------------------
Total dividends and distributions (0.10) (0.02)
----------------- ------------------
Net Asset Value, End of Period $ 10.70 $ 10.28
================= ==================
Total Return on Net Asset Value 5.03%(2) 1.27%(2)
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (000's) $ 53 $ 15
Ratio of net operating expenses to average net assets:
Before waivers 1.38%(3) 1.69%(3)
After waivers 1.29%(3) 1.43%(3)
Ratio of net investment income to average net assets 0.91%(3) 0.74%(3)
Portfolio turnover rate(4) 14.65% 6.89%
* Commencement of operations.
+ On October 3, 2005, the Socially Responsible Equity Fund was reorganized
into the AHA Socially Responsible Equity Fund, a newly established
identical series of the CNI Charter Funds. See Note 1 in Notes to
Financial Statements for additional information.
(1) Information presented relates to a share of capital stock outstanding for
the entire period.
(2) Not annualized.
(3) Annualized.
(4) Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued. For periods less than 1 year,
portfolio turnover rate has not been annualized.
See Notes to the Financial Statements.
43
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
March 31, 2006 (Unaudited)
1. ORGANIZATION
The AHA Investment Funds (the "AHA Funds") are a series of CNI Charter Funds
(the "Trust"), which is registered as an open-end management investment company
under the Investment Company Act of 1940. The Trust was organized as a business
trust under the laws of Delaware on October 28, 1996. Each of the AHA Funds
commenced operations on October 3, 2005, the effective date of the
reorganization of each corresponding series (each a "Predecessor Fund" and
collectively the "Predecessor Funds") of AHA Investment Funds, Inc. (the "AHA
Company"), a registered investment company organized on March 14, 1988 under the
laws of Maryland. On May 17, 2005, the Board of Directors of the AHA Company
approved the reorganization of the Predecessor Funds into the newly established
corresponding AHA Fund series of the Trust.
The AHA Funds currently offer the following series of shares: the AHA Limited
Maturity Fixed Income Fund ("Limited Maturity Fund"), the AHA Full Maturity
Fixed Income Fund ("Full Maturity Fund"), the AHA Balanced Fund ("Balanced
Fund"), the AHA Diversified Equity Fund (the "Diversified Fund"), the AHA
Socially Responsible Equity Fund (the "Socially Responsible Fund"), the AHA
International Core Equity Fund ("International Fund") and the AHA U.S.
Government Money Market Fund ("Money Market Fund") (each a "Fund" and,
collectively, the "Funds"). As of March 31, 2006, the International Fund and the
Money Market Fund had not commenced operations. The shares of common stock of
the Funds are divided into two classes: Class A Shares and Institutional Class
Shares. As of March 31, 2006, only the Institutional Class Shares of the
currently operating Funds and the Class A Shares of the Limited Maturity Fund,
the Full Maturity Fund, the Diversified Fund, and the Socially Responsible Fund
had commenced operations.
Expenses related to the reorganization and reimbursements to the Advisor for
reorganization related expenses will be incurred and paid by the Funds beginning
October 3, 2005. These amounts are estimated at March 31, 2006 to be $132,890,
$33,521, $19,231, $97,542 and $22,420 for the Limited Maturity Fund, Full
Maturity Fund, Balanced Fund, Diversified Fund and Socially Responsible Fund,
respectively.
The investment objectives of the Funds are set forth below.
LIMITED MATURITY FUND
Seeks a high level of current income, consistent with preservation of capital
and liquidity. Invests primarily in high quality fixed income securities, issued
or guaranteed by the government, and maintains an average dollar-weighted
portfolio maturity of less than three years.
FULL MATURITY FUND
Seeks the highest level of income consistent with long-term preservation of
capital. Invests primarily in high quality fixed income securities issued or
guaranteed by the U.S. government, its agent or instrumentalities. There is no
restriction on the minimum or maximum maturity of the securities purchased. The
average dollar-weighted maturity will vary and may exceed 20 years.
BALANCED FUND
Seeks a combination of growth of capital and income. Invests varying proportions
of its assets in equity and fixed income securities, with not less than 25
percent of total assets invested in fixed income securities.
DIVERSIFIED FUND
Seeks long-term capital growth. Invests primarily in equity securities of U.S.
companies that are diversified among various industries and market sectors and
securities having equity characteristics.
SOCIALLY RESPONSIBLE FUND
Seeks long-term capital growth. Invests primarily in equity securities whose
issuers meet certain socially responsible criteria.
2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts in the financial statements.
Actual results could differ from those estimates.
SECURITY VALUATION
Securities listed on a securities exchange, market or automated quotation system
for which quotations are readily available (except for securities traded on
NASDAQ) are valued at the last quoted sale price on the primary exchange or
market (foreign or domestic) on which they are traded, or, if there is no such
reported sale, at the most recent quoted bid price. For securities
44
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 2006 (Unaudited)
traded on NASDAQ, the NASDAQ Official Closing Price will be used. If available,
debt securities are priced based upon valuations provided by independent,
third-party pricing agents. Such values generally reflect the last reported
sales price if the security is actively traded. The third-party pricing agents
may also value debt securities at an evaluated bid price by employing
methodologies that utilize actual market transactions, broker-supplied
valuations, or other methodologies designed to identify the market value for
such securities. Debt obligations with remaining maturities of sixty days or
less may be valued at their amortized cost, which approximates market value. The
prices for foreign securities are reported in local currency and converted to
U.S. dollars using currency exchange rates. Prices for most securities held in
the Funds are provided daily by recognized independent pricing agents. If a
security price cannot be obtained from an independent, third-party pricing
agent, the Funds seek to obtain a bid price from at least one independent
broker.
Securities for which market prices are not "readily available" are valued in
accordance with Fair Value Procedures established by the Funds' Board of
Directors. The Funds' Fair Value Procedures are implemented through a Fair Value
Committee (the "Committee") designated by the Funds' Board of Trustees. Some of
the more common reasons that may necessitate that a security be valued using
Fair Value Procedures include: the security's trading has been halted or
suspended; the security has been de-listed from a national exchange; the
security's primary trading market is temporarily closed at a time when under
normal conditions it would be open; or the security's primary pricing source is
not able or willing to provide a price. When a security is valued in accordance
with the Fair Value Procedures, the Committee will determine the value after
taking into consideration relevant information reasonably available to the
Committee.
SECURITY TRANSACTIONS AND RELATED INCOME
Realized gains and losses on the sale of investments are calculated on the
identified cost basis. Dividend income is recorded on the ex-dividend date and
interest income is recognized on the accrual basis. Securities transactions are
recorded on the trade date. All discounts and premiums are amortized using the
effective interest method for tax and financial reporting purposes.
ACCOUNTING FOR OPTIONS
The Funds may purchase and write (sell) put and call options on U.S. securities,
stock indices, and futures contracts that are traded on U.S. securities
exchanges and over-the-counter markets.
The risk associated with purchasing an option is that a Fund pays a premium
whether or not the option is exercised. Additionally, a Fund bears the risk of
loss of premium and change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio securities. The cost of securities acquired through the
exercise of an option is increased by premiums paid. The proceeds from
securities sold through the exercise of an option is decreased by the premiums
paid.
When a Fund writes an option, the premium received by the Fund is recorded as a
liability and is subsequently adjusted to the current market value of the option
written. Premiums received from writing options, which expire unexercised, are
recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transaction, as a realized loss. In writing an option,
a Fund bears the market risk of an unfavorable change in the price of the
security or currency underlying the written option. Exercise of an option
written by a Fund could result in the Fund selling or buying a security or
currency at a price different from the current market value. At March 31, 2006,
there were no options held by the Funds.
REPURCHASE AGREEMENTS
The Funds may enter into repurchase agreements with respect to any of the types
of securities in which they are authorized to invest without regard to the
maturity of the underlying security. Repurchase agreements will be affected only
with banks, savings institutions and broker-dealers. They involve the purchase
by a Fund of a debt security with the condition that, after a stated period of
time, the original seller will buy back the same security at a predetermined
price or yield. Repurchase agreements are used to enhance liquidity and to earn
income for periods as short as overnight. To minimize risk, the securities
underlying each repurchase agreement will be maintained with the Fund's
custodian, or a sub-custodian, in an amount at least equal in value to the
repurchase price under the agreement (including accrued interest thereunder),
and such agreements will only be affected with parties that meet certain
creditworthiness standards. However, in the event the other party to the
repurchase agreement fails to repurchase the securities subject to such
agreement, a Fund could suffer a loss to the extent it is precluded from selling
the securities or, if due to delays, proceeds from the same securities are less
than the repurchase price.
45
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 2006 (Unaudited)
WHEN-ISSUED SECURITIES
The Funds may purchase securities on a when-issued or delayed delivery basis.
Although the purchase amounts of these securities are established at the time
the purchaser enters into the agreement, these securities may be delivered and
paid for at a future date. The Funds record purchases of when-issued securities
and reflect the values of such securities in determining net asset value in the
same manner as other portfolio securities. The Funds maintain at all times cash
or other liquid assets in an amount at least equal to the amount of outstanding
commitments for when-issued securities.
EXPENSE ALLOCATION
Common expenses incurred by the Funds are allocated among the Funds (i) based
upon relative average daily net assets, (ii) as incurred on a specific
identification basis, or (iii) equally among the Funds, depending on the nature
of the expenditure.
CLASSES
Class-specific expenses are bourne by the class. Income, non class-specific
expenses, and realized and unrealized gains/losses are allocated to the
respective class on the basis of relative net asset value each day.
FUND DISTRIBUTIONS
The Limited Maturity Fund and the Full Maturity Fund declare and pay income
dividends from net investment income monthly.
In the Balanced Fund, the Diversified Fund and the Socially Responsible Fund,
dividends from net investment income are declared and paid quarterly. The Funds
distribute any net realized capital gains at least annually.
3. INVESTMENT ADVISOR AND SUB-ADVISOR AGREEMENTS
The Funds have an Investment Advisory Agreement dated June 30, 2003 (the
"Agreement") with CCM Advisors, LLC (the "Advisor"), an affiliate of City
National Asset Management, Inc. ("CNAM"), with whom certain officers and
directors of the Funds are affiliated, to furnish investment advisory services
to the Funds. Under the terms of the Agreement, the Funds compensate the Advisor
for its management services at the annual rate of 0.50% of each Fund's average
daily net assets for the Limited Maturity Fund and the Full Maturity Fund, and
an annual rate of 0.75% of each Fund's average daily net assets for the Balanced
Fund, Diversified Fund and the Socially Responsible Fund. Effective October 3,
2005, the Advisor lowered the expense cap on the Class I and A shares of the
Limited Maturity Fund, Full Maturity Fund, Diversified Fund and the Socially
Responsible Fund to 0.75%, 1.00%, 0.80%, 1.05%, 1.01%, 1.26%, 1.04% and 1.29%
from 1.00%, 1.25%, 1.00%, 1.25%, 1.25%, 1.50%, 1.25% and 1.50% respectively.
Through March 31, 2006, the Advisor had contractually agreed to pay all
operating expenses in excess of the annual rates presented below as applied to
each Fund's average daily net assets.
Expense Cap (as a % of average daily net assets)
Fund Class I Class A
------------------------- ------- -------
Limited Maturity Fund 0.75% 1.00%
Full Maturity Fund 0.80% 1.05%
Balanced Fund 1.00% N/A
Diversified Fund 1.01% 1.26%
Socially Responsible Fund 1.04% 1.29%
Under the terms of the Agreement, any Fund expenses waived or reimbursed by the
Advisor may be recovered by the Advisor to the extent actual operating expenses
for a subsequent period are less than the expense limitation caps at the time of
the waiver or reimbursement. The Advisor intends to seek potential recovery of
such amounts for a period of three years from the fiscal year in which such
amounts were waived or reimbursed. During the six months ended March 31, 2006,
the Advisor recovered no fees from the Funds. As of March 31, 2006, the Funds
had the following balances, subject to potential recovery:
Fund Potential Amount of Recovery (000) Expiration
- ------------------------- ---------------------------------- ----------
Limited Maturity Fund $ 86 2009
Full Maturity Fund $ 29 2007
$ -- 2008
$ 15 2009
Balanced Fund $ 12 2007
$ 15 2008
$ 29 2009
Diversified Fund $ 4 2009
Socially Responsible Fund $ 17 2009
46
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 2006 (Unaudited)
Prior to November 1, 2001, the Advisor was compensated for its services directly
by the shareholders and not by the Funds pursuant to the Program Services
Agreement it had with each shareholder, under which the Advisor provided asset
allocation consulting and certain other services. The fees of the investment
managers were paid by the Advisor. The Program Service Fee was equal to 0.50% of
average daily net assets for the Full Maturity Fund and Limited Maturity Fund,
and 0.75% of average daily net assets for the Balanced Fund and Diversified
Fund. This service fee was reflected in the total return as disclosed in the
financial highlights tables.
The Patterson Capital Corporation and CNAM act as the sub-advisors on behalf of
the Limited Maturity Fund and are paid by the Advisor.
Baird Advisors and Boyd Watterson Asset Management, LLC act as sub-advisors on
behalf of the Full Maturity Fund and are paid by the Advisor. Prior to October
3, 2005, Western Asset Management Company also acted as the sub-advisor on
behalf of the Full Maturity Fund and was paid by the Advisor.
Baird Advisors, Cambiar Investors, LLC and Freeman Associates Investment
Management LLC act as sub-advisors on behalf of the Balanced Fund and are paid
by the Advisor.
Cambiar Investors, LLC and Freeman Associates Investment Management LLC act as
sub-advisors on behalf of the Diversified Equity Fund and are paid by the
Advisor.
SKBA Capital Management, LLC acts as the sub-advisor on behalf of the Socially
Responsible Fund and is paid by the Advisor.
4. ADMINISTRATION, TRANSFER AGENT, DISTRIBUTION AND SHAREHOLDER SERVICES
AGREEMENTS
Pursuant to an administration agreement (the "Agreement"), SEI Investments
Global Funds Services (the "Administrator"), a wholly owned subsidiary of SEI
Investments Company, acts as the AHA Funds Administrator. Effective with the
reorganization into the CNI Charter Funds on October 3, 2005, under the terms of
the Agreement dated April 1, 1999, as amended January 1, 2005, the Administrator
is entitled to receive an annual fee of 0.065% of aggregate average daily net
assets of the Trust not exceeding $2.5 billion, 0.045% of aggregate average
daily net assets of the Trust exceeding $2.5 billion but not exceeding $5
billion, and 0.025% of aggregate average daily net assets of the Trust exceeding
$5 billion. Prior to October 3, 2005, under the terms of the Agreement dated
April 8, 2005, the Administrator was entitled to receive an annual fee equal to
the greater of $250,000 or 0.10% of aggregate average daily net assets of the
AHA Funds.
The AHA Funds have adopted a Rule 12b-1 Distribution Plan ("the Plan") with
respect to Class A Shares that allows each Fund to pay distribution and
servicing fees. SEI Investments Distribution Co. (the "Distributor"), as
compensation for its services under the Plan, receives a distribution fee,
computed daily and paid monthly, at the annual rate of 0.25% of the average
daily net assets of the Class A Shares of each Fund.
Citigroup Fund Services, LLC (formerly, Forum Shareholder Services, LLC) serves
as sub-transfer Agent for the AHA Funds whereby they provide services at an
annual rate of $14,000 per share class.
Wachovia Bank, N.A. serves as Custodian for the Trust. The Custodian plays no
role in determining the investment policies of the AHA Funds or which securities
are to be purchased or sold by the AHA Funds.
The AHA Funds have also adopted a Shareholder Servicing Plan that permits
payment of compensation to independent entities to perform account maintenance
and shareholder servicing to Class I shareholders. The fee for these services
ranges from 0.10% of the average daily net assets of the Fund's shares held by
the agent for the Fund's fixed income products up to 0.20% of the average daily
net assets of the Fund's shares held by the Fund's agent for the equity
products.
Certain officers of the CNI Charter Funds Trust (the "Trust") are also officers
of the Advisor, the Administrator and/or the Distributor. Such officers are paid
no fees by the Trust or the AHA Funds for serving as officers of the Funds.
5. FEDERAL INCOME TAXES
It is the Funds' policy to continue to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code and the Funds intend to
distribute investment company net taxable income and net capital gains to
shareholders. Therefore, no Federal income tax provision is required.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with Federal tax
regulations, which may differ from accounting principles generally accepted in
the United States. As a result, net investment income (loss) and net realized
gain (loss) on investment transactions for a reporting period may differ
significantly from distributions during such period. These book/tax differences
may be temporary or permanent. To the extent these differences are permanent in
nature, they are charged or credited to paid-in-capital, undistributed net
investment income (loss), or accumulated net realized gain (loss), as
appropriate, in the period that the differences arise.
47
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 2006 (Unaudited)
The tax character of dividends and distributions declared during the periods
ended September 30, 2005, June 30, 2005 and June 30, 2004 are shown below
(000's):
Ordinary Income Long-Term Capital Gain Total
----------------------------- --------------------------- --------------------------
September June June September June June September June June
2005 2005 2004 2005 2005 2004 2005 2005 2004
-------- ------- ------- --------- ------ ------ -------- -------- --------
Limited Maturity Fund $ 704 $ 2,965 * $ 2,270 $ -- $ 168 $ -- $ 704 $ 3,133 $ 2,270
Full Maturity Fund 277 1,141 1,067 -- 239 245 277 1,380 1,312
Balanced Fund 75 301 232 -- -- -- 75 301 232
Diversified Fund 103 652 441 -- -- -- 103 652 441
Socially Responsible Fund 45 109 -- -- -- -- 45 109 --
* Includes tax return of capital of less than $1 (000's).
As of September 30, 2005, the components of Distributable Earnings/(Accumulated
Losses) on a tax basis were as follows (000's):
Total
Net Distributable
Undistributed Undistributed Capital Unrealized Other Earnings
Ordinary Long-Term loss Appreciation Temporary (Accumulated
Income Capital Gain Carryforwards (Depreciation) Differences Losses)
------------- ------------- ------------- -------------- ----------- -------------
Limited Maturity Fund $ 216 $ -- $ (914) $ (1,393) $ (216) $ (2,307)
Full Maturity Fund 185 85 (65) 155 91 269
Balanced Fund 305 740 -- 1,501 -- 2,546
Diversified Fund 5 3,584 -- 10,627 -- 14,216
Socially Responsible Fund 109 -- -- 979 -- 1,088
For tax purposes, the losses in the Funds can be carried forward for a maximum
of eight years to offset any future net realized capital gains. At September 30,
2005, the breakdown of capital loss carryforwards was as follows (000's):
Expiring
2012 2013 Total
------ ------ ------
Limited Maturity Fund $ 76 $ 838 $ 914
Full Maturity Fund -- 65 65
The Federal tax cost, the aggregate gross unrealized appreciation on securities,
the aggregate gross unrealized depreciation on securities and the net unrealized
appreciation/(depreciation) for tax purposes at March 31, 2006 for each of the
Funds were as follows (000's):
Aggregate Aggregate
Gross Gross Net Unrealized
Federal Unrealized Unrealized Appreciation
Tax Cost Appreciation Depreciation (Depreciation)
--------- ------------ ------------ ---------------
Limited Maturity Fund $ 69,442 $ 1 $ (1,057) $ (1,056)
Full Maturity Fund 33,548 165 (607) (442)
Balanced Fund 17,917 1,721 (287) 1,434
Diversified Fund 103,181 13,563 (1,903) 11,660
Socially Responsible Fund 21,867 2,333 (532) 1,801
48
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 2006 (Unaudited)
6. CAPITAL SHARE TRANSACTIONS (000'S):
The Funds have 700,000,000 shares of beneficial interest, with $.01 par value,
authorized. The share transactions for the six months ended March 31, 2006, the
three months ended September 30, 2005 and the year ended June 30, 2005 are as
follows:
LIMITED MATURITY FUND FULL MATURITY FUND BALANCED FUND
------------------------------ ------------------------------ ------------------------------
03/31/06 09/30/05 06/30/05 03/31/06 09/30/05 06/30/05 03/31/06 09/30/05 06/30/05
-------- -------- -------- -------- -------- -------- -------- -------- --------
Class I
Shares sold 32 40 1,243 279 12 476 -- -- --
Shares issued in
reinvestment
of dividends 69 36 176 31 11 63 6 -- 1
Shares redeemed (4,193) (1,554) (4,286) (342) -- (282) -- -- (5)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total Net change (4,092) (1,478) (2,867) (32) 23 257 6 -- (4)
======== ======== ======== ======== ======== ======== ======== ======== ========
Class A
Shares sold -- -- 100 1 -- 3 -- -- --
Shares issued in
reinvestment
of dividends 1 -- 1 -- -- -- -- -- --
Shares redeemed (61) (23) -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total Net change (60) (23) 101 1 -- 3 -- -- --
======== ======== ======== ======== ======== ======== ======== ======== ========
SOCIALLY
DIVERSIFIED FUND RESPONSIBLE FUND
------------------------------ --------------------------------
03/31/06 09/30/05 06/30/05 03/31/06 09/30/05 06/30/05 *
-------- -------- -------- -------- -------- ----------
Class I
Shares sold 1,450 57 538 106 46 2,159
Shares issued in
reinvestment
of dividends 171 5 31 21 5 11
Shares redeemed (566) (241) (138) (99) (45) (56)
-------- -------- -------- -------- -------- ----------
Total Net change 1,055 (179) 431 28 6 2,114
======== ======== ======== ======== ======== ==========
Class A**
Shares sold 36 23 71 3 2 --
Shares issued in
reinvestment
of dividends 25 -- 2 -- -- --
Shares redeemed (27) (7) (27) -- -- --
-------- -------- -------- -------- -------- ----------
Total Net change 34 16 46 3 2 --
======== ======== ======== ======== ======== ==========
* Fund commenced operations on January 3, 2005.
** Class A shares for the Socially Responsible Fund were offered starting
August 12, 2005.
49
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 2006 (Unaudited)
7. SECURITIES TRANSACTIONS
Purchases and sales of investment securities, other than short-term investments
and options, for the six months ended March 31, 2006 were as follows:
Purchases (000's) Sales (000's)
-------------------------- --------------------------
U.S. Government Other U.S. Government Other
--------------- -------- --------------- --------
Limited Maturity Fund $ 33,687 $ 12,787 $ 34,914 $ 52,211
Full Maturity Fund 14,878 5,560 11,928 4,824
Balanced Fund 931 4,637 1,320 5,309
Diversified Fund -- 54,134 -- 44,748
Socially Responsible Fund -- 3,426 -- 3,120
8. SECURITIES LENDING
The Custodian serves as the AHA Funds' securities lending agent. Certain Funds
lend their securities to approved brokers to earn additional income and receive
cash and/or securities as collateral to secure the loans. Income the Funds
earned on securities purchased with cash collateral is reflected on the
statements of operations. Collateral was maintained at not less than 102% of the
value of loaned securities. If cash collateral is received, a related liability
is shown on the statement of net assets. Although the risk of lending is
mitigated by the collateral, a Fund could experience a delay in recovering its
securities and a possible loss of income or value if the borrower fails to
return them. There was no loss of income or value reported for the securities on
loan for the six months ended March 31, 2006.
9. INVESTMENT RISKS
In the normal course of business, the AHA Funds enter into contracts that
provide general indemnifications by the Fund to the counterparty to the
contract. The Funds' maximum exposure under these arrangements is dependent on
future claims that may be made against the Funds and, therefore, cannot be
established; however, based on experience, the risk of loss from such claim is
considered remote.
50
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
APPROVAL OF SUB-ADVISORY AGREEMENT (UNAUDITED)
The Board of Trustees of CNI Charter Funds (the "Trust") is comprised of four
Trustees, all of whom are independent of the Trust's investment advisers and
sub-advisers. During the six months ended March 31, 2006, the Board of Trustees
approved the proposed sub-advisory agreement (the "Agreement") between CCM
Advisors, LLC ("CCMA") and Boyd Watterson Asset Management, LLC ("Boyd
Watterson") with respect to the AHA Full Maturity Fixed Income Fund (the "AHA
Full Maturity Fund").
GENERAL INFORMATION
The following information summarizes the Board's considerations associated with
its approval of the Agreement. In connection with their deliberations, the Board
considered such information and factors as they believed, in light of the legal
advice furnished to them and their own business judgment, to be relevant. As
described below, the Board considered the nature, quality and extent of the
investment advisory and administrative services to be performed by Boyd
Watterson. In considering these matters, the Board discussed the approval of the
Agreement with management and in private sessions with counsel at which no
representatives of CCMA or Boyd Watterson were present.
The Board reviewed extensive materials regarding Boyd Watterson's investment
results, advisory fee comparisons, financial and profitability information,
descriptions of various functions such as compliance monitoring and portfolio
trading practices, and information about the personnel who would be providing
investment management and administrative services to the AHA Full Maturity Fund.
In deciding to approve the Agreement, the Board did not identify a single factor
as controlling and this summary does not describe all of the matters considered.
However, the Board concluded that each of the various factors referred to below
favored such approval.
NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the services proposed to be provided by Boyd Watterson, the Board
considered a variety of matters, including the background, education and
experience of its key portfolio management and operational personnel; its
overall financial strength and stability, as well as that of its parent company;
its regulatory compliance systems and procedures; its resources and related
efforts to retain, attract and motivate capable personnel to serve the AHA Full
Maturity Fund; and the overall general quality and depth of its organization and
that of its parent. The Board also reviewed Boyd Watterson's investment
philosophy and processes as well as brokerage, trading and soft dollar
practices.
INVESTMENT PERFORMANCE
The Board assessed the performance of Boyd Watterson's high quality fixed income
product, noting that the product's return for the five-year period ended
September 30, 2005 was higher than the return of the Lehman Government/Credit
Intermediate Index. The Board also noted that Boyd Watterson's high quality
fixed income product ranked in the upper 30th percentile of the universe of
comparable intermediate fixed income managers selected by the M-Search(r)
Investment Manager Database System for the one- and five-year periods ended
September 30, 2005.
ADVISORY FEES
The Board reviewed information regarding the advisory fees to be charged by Boyd
Watterson and noted that Boyd Watterson would charge the same fees as those
previously charged by the previous sub-adviser to the portion of the Fund to be
managed by Boyd Watterson, which were lower than Boyd Watterson's standard fee
schedule for institutional clients. They also noted that CCMA pays the AHA Full
Maturity Fund's sub-advisory fees out of CCMA's advisory fee. The Board also
considered that although Boyd Watterson's fee schedule had no breakpoints, the
Fund's asset levels were not so substantial that they would lead to significant
economies of scale.
The Board also reviewed information prepared by Boyd Watterson relating to its
projected costs and profits with respect to the AHA Full Maturity Fund, as well
as the methodologies used to determine and allocate such costs to its management
of the Fund. The Board noted that neither Boyd Watterson nor its affiliates
would receive benefits other than investment advisory fees as a result of its
relationship with the Fund, except the intangible benefits of the favorable
publicity arising in connection with the Fund's performance.
CONCLUSION
Based on its review, including its consideration of each of the factors referred
to above, the Board concluded that the Agreement would represent fair and
reasonable compensation in light of the nature and quality of the services
proposed to be provided by Boyd Watterson to the AHA Full Maturity Fund and its
shareholders.
51
AHA INVESTMENT FUNDS
- --------------------------------------------------------------------------------
ADDITIONAL DISCLOSURE
The Funds file their complete schedule of portfolio holdings with the Securities
and Exchange Commission for the first and third quarters of each fiscal year on
Form N-Q within sixty days after the end of the period. The Funds' Form N-Q is
available on the Commission's website at http://www.sec.gov, and may be reviewed
and copied at the Commission's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained by
calling 1-800-SEC-0330.
A description of the policies and procedures that the Funds use to determine how
to vote proxies relating to the Funds' portfolio securities, and information on
how the Funds voted proxies relating to portfolio securities during the most
recent 12-month period ending June 30 is available without charge, upon request,
by calling 1-800-445-1341 and on the Securities and Exchange Commission's
website at www.sec.gov.
52
---------------------------------------------
AHA INVESTMENT FUNDS
190 SOUTH LASALLE STREET, SUITE 2800
CHICAGO, ILLINOIS 60603
1-800-445-1341
---------------------------------------------
INVESTMENT ADVISOR
CCM Advisors, LLC
190 South LaSalle Street, Suite 2800
Chicago, Illinois 60603
ADMINISTRATOR
SEI Investments Global
Funds Services
One Freedom Valley Drive
Oaks, Pennsylvania 19456
SUB-TRANSFER AGENT AND
DIVIDEND DISBURSEMENT AGENT
Citigroup Fund Services, LLC
(formerly, Forum Shareholder Services, LLC)
Two Portland Square
Portland, Maine 04101
CUSTODIAN
Wachovia Bank, N.A.
123 S. Broad Street
Philadelphia, Pennsylvania 19109
LEGAL COUNSEL
Paul Hastings, Janofsky & Walker LLP
515 South Flower Street
Twenty-Fifth Floor
Los Angeles, California 90071
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
Suite 2000
355 South Grand Avenue
Los Angeles, California 90071
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
[LOGO]
AMERICAN HOSPITAL ASSOCIATION
a tobacco-free investment CNI CHARTER FUNDS(SM)[LOGO]
CNI-SA-003-0100
ITEM 2. CODE OF ETHICS.
Not applicable for semi-annual report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual report.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable. Effective for closed-end management investment companies for
fiscal years ending on or after December 31, 2005
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
CNI Charter Funds (the "Fund") has adopted the following procedures by which
shareholders may recommend nominees to the Fund's Board of Trustees. The Fund
has a Nominating Committee comprised solely of persons who are not considered
"interested persons" of the Fund within the meaning of the Investment Company
Act of 1940. The Committee periodically reviews such issues as the Board's
composition, responsibilities, committees, compensation and other relevant
issues, and recommends any appropriate changes to the full Board of Trustees.
While the Committee normally is able to identify from its own resources an ample
number of qualified candidates, it will consider shareholder suggestions of
persons to be considered as nominees to fill future vacancies on the Board, so
long as the shareholder or shareholder group submitting a proposed nominee: (a)
beneficially owns more than 5% of the Fund's voting shares and has held such
shares continuously for two years, and (b) is not an adverse holder. No eligible
shareholder or shareholder group may submit more than one independent Board
member nominee each year. Such suggestions must be sent in writing to the Fund
's Secretary, and must be accompanied by the shareholder's contact information,
the nominee's contact information and number of Fund shares owned by the
nominee, all information regarding the nominee that would be required to be
disclosed in solicitations of proxies for elections of directors required under
the Securities Exchange Act of 1934, and a notarized
letter from the nominee stating his or her intention to serve as a nominee and
be named in the Fund's proxy statement, if so designated by the Committee and
the Board of Trustees.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Not applicable for semi-annual report.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) CNI Charter Funds
/s/ Vernon C. Kozlen
By (Signature and Title)* ----------------------------------------
Vernon C. Kozlen, President & CEO
Date May 25, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Vernon C. Kozlen
By (Signature and Title)* ----------------------------------------
Vernon C. Kozlen, President & CEO
Date May 25, 2006
/s/ Eric Kleinschmidt
By (Signature and Title)* ----------------------------------------
Eric Kleinschmidt, Controller and COO
Date May 25, 2006
* Print the name and title of each signing officer under his or her signature.