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 811-0792
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, 2007
DATE OF REPORTING PERIOD: SEPTEMBER 30, 2007
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO OMITTED]
AMERICAN HOSPITAL
ASSOCIATION
AHA INVESTMENT FUNDS(TM)
A SERIES OF THE CNI CHARTER FUNDS
CCM Advisors, LLC is the AHA-sponsored investment
advisor for the AHA Invesment Program
[GRAPHIC OMITTED]
2007 ANNUAL REPORT September 30, 2007
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AHA Limited Maturity Fixed Income Fund
AHA Full Maturity Fixed Income Fund
AHA Balanced Fund
AHA Diversified Equity Fund www.ahafunds.org
AHA Socially Responsible Equity Fund www.cnicharterfunds.com
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TABLE OF CONTENTS
AHA Investment Funds Annual Report
Series of CNI Charter Funds
2 Letter to Our Shareholders
6 Fund Overview
11 Schedules of Investments
35 Statements of Assets and Liabilities
36 Statements of Operations
38 Statements of Changes in Net Assets
40 Financial Highlights
42 Notes to Financial Statements
49 Report of Independent Registered Public Accounting Firm
50 Trustees and Officers
53 Notice to Shareholders
54 Disclosure of Fund Expenses
55 Approval of Advisory and Sub-Advisory Agreements
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AVAILABILITY OF PROXY VOTING INFORMATION
A description of the policies and procedures that the Funds use to determine how
to vote proxies related 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 (1) without charge, upon
request by calling 1-800-445-1341, (2) on the CNI Charter Funds' website at
WWW.CNICHARTERFUNDS.COM, and (3) on the Securities and Exchange Commission's
website at WWW.SEC.GOV.
AVAILABILITY OF QUARTERLY PORTFOLIO SCHEDULE
The Funds file their complete schedules 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. The most current Form N-Q is also available
on the CNI Charter Funds' website at WWW.CNICHARTERFUNDS.COM and without charge,
upon request by calling 1-800-445-1341.
AHA INVESTMENT FUNDS | PAGE 1
letter to our shareholders
SEPTEMBER 30, 2007
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Dear Shareholder:
Please find enclosed the annual report for the AHA Investment Funds series of
CNI Charter Funds (the "AHA Funds"), for the year ended September 30, 2007. This
letter will summarize results for the AHA Funds and our activities for the past
twelve months. This is the second full year since our merger into the CNI
Charter Fund family with over $4 billion in assets under management. The CNI
Charter Funds and its sponsor, City National Bank, have made available their
significant resources to enhance the AHA Funds' operations and services to our
investors.
AHA LIMITED MATURITY FIXED
INCOME FUND
City National Asset Management, Inc. ("CNAM") and The Patterson Corporation
("Patterson") serve as the two sub-advisers to the AHA Limited Maturity Fixed
Income Fund. October 1 marks the second anniversary of the appointment of CNAM
as a sub-adviser to a portion of the Fund. One of the resources brought to the
Fund by CNAM is its bond management expertise in the 1-5 year maturity range, an
area in which it specializes and which complements Patterson's 1-3 year maturity
range. While the internal Investment Committee of CCM Advisors, LLC, the AHA
Funds' investment manager, monitors the sub-advisers' performance against their
individual benchmarks, the combined portfolios which comprise this Fund are
benchmarked to the Merrill Lynch 1-3 Year Treasury Index and the Merrill Lynch
3-Month U.S.Treasury Index.
During the fiscal year the Board of Trustees approved the Fund's purchase of
securities rated BBB by Moody's and Baa by Standard & Poor's, which broadens the
Fund's diversification to all Investment Grade securities, rather than the A or
higher rating requirement previously in place. This was recommended by the
Fund's adviser to seek additional yield and total return potential in the
corporate bond sector while maintaining risk controls on credit quality. It went
into effect January 31, 2007.
During the fiscal year ended September 30, 2007, the Federal Reserve Bank
("Fed") changed its policy of increases in short-term interest rates because of
recent concerns over the credit crunch caused by the decreasing quality of
sub-prime mortgages. Please be assured that the Fund's managers do not invest in
low quality or sub-prime loans. However, there was a spillover effect on the
entire bond market due to fear of sub-prime mortgage defaults. Rising interest
rates triggered increased monthly payment adjustments to ARMs (Adjustable Rate
Mortgages), which caused the Fed to rethink its policy. Therefore the FOMC
(Federal Open Market Committee) moved to decrease the discount rate in August by
0.50% and then the Fed Funds rate in September by 0.50%. The Fed actions
especially affect short term yields, causing the 30-day SEC yield on the Merrill
Lynch 3-Month U.S. Treasury Index ("T-Bill") to drop from 4.91% in September
2006 to 3.83% in September 2007 (see how the Interest Yield drops from 3/31/07
to 9/30/07 on the Yield Curve chart at the 3-month maturity). The 30-day SEC
yield on the Fund's Institutional Class shares changed only slightly, from 4.47%
in September 2006 to 4.34% in September 2007, and is currently
YIELD CURVE OF U.S. TREASURY SECURITIES
AS OF 9/30/06, 3/31/07 AND 9/30/07
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Years to Maturity 9/30/2007 3/31/2007 9/30/2006
3M 3.82 5.04 4.89
6M 4.09 5.06 5.02
1 Yr 4.05 4.9 4.91
2 Yr 3.97 4.58 4.71
3 Yr 4.03 4.54 4.62
4.13 4.54 4.6
5 Yr 4.23 4.54 4.59
4.38 4.58 4.6
10 Yr 4.59 4.65 4.64
4.74 4.78 4.7
4.89 4.92 4.77
4.86 4.88 4.84
25Y+ 4.83 4.84 4.76
AHA INVESTMENT FUNDS | PAGE 2
letter to our shareholders
SEPTEMBER 30, 2007
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yielding more than the T-Bill. Whereas the Fund's yield rose more slowly than
the T-Bill during the Fed's policy of increasing rates in 2005-2006, there is
also lag behind T-Bills as yields decline. It takes longer for the higher income
producing securities in the Limited Maturity Fund to reach maturity than 3-Month
T-Bills. This is beneficial for shareholders who are seeking income and want to
earn a higher monthly yield than T-Bills.
The total net return of the Fund's Institutional Class shares was 4.63% for the
fiscal year. During the credit crunch of the past six months, Treasury
securities rallied in a flight to quality during the mortgage crisis. The
Merrill Lynch 1-3 year Treasury Index had a return of 5.80% as it is comprised
100% of Treasury securities. Since the Limited Maturity Fund is a diversified
blend of corporate (37% weighting), Treasury (11%),Agency (24%) and mortgage
(37%) securities, the Fund's mortgage and corporate allocations could not keep
up with Treasuries, causing the Fund's returns to lag behind the 1-3 year
Treasury Index. The bond market concerns even caused federally-backed Agency
securities to be depressed in price. To control risk, the Fund maintains an
overall average credit quality rating of AA+, and the portfolio managers follow
conservative investment guidelines. In terms of peer group performance the Fund
compares favorably to the Lipper Short/Intermediate Investment Grade Debt peer
group which had annual returns of 4.29%.
For Class A Shares of this Fund, redesignated as Class "N" shares in October
2007 (for "No-load"), annualized return was 4.47% and the 30-day SEC yield
ranged from 4.18% in September 2006 to 4.07% in September 2007.
AHA FULL MATURITY FIXED INCOME
The AHA Full Maturity Fixed Income Fund combines two equally weighted portfolios
managed by Boyd Watterson Asset Management, LLC and Robert W. Baird & Co.
Incorporated to the Fund's intermediate and aggregate indexes, respectively, to
provide a "full" maturity spectrum. The intermediate portfolio manager began the
fiscal year with a slightly shorter duration than its index (3.2 years vs. 3.6
years), as a defensive measure which aided performance in the rising interest
rate environment of the first half of the fiscal year. However, the portfolio
manager lengthened duration mid-year and shortened again to finish just under
the Lehman Intermediate Government/Credit Index (3.4 years vs. 3.7). The
aggregate portfolio was maintained right on the Lehman Aggregate index duration
of 4.6 years which remained nearly constant throughout the year.
During the fiscal year, intermediate and longer maturity bonds stabilized and
gradually rose in prices earlier in the year as the Fed moved away from its
policy of rate increases. Bond prices and interest rates have an inverse
relationship; while yields go up prices will drop as the bond market adjusts to
actions by the Fed. However, the bond market was in turmoil during the last six
months of the fiscal year. The fears of defaults in the sub-prime loan market
depressed returns on the entire mortgage sector. The higher interest rates
mandated by the Fed in 2005-2006 began to cause many ARMs (Adjustable Rate
Mortgages) to increase to an extent that the incidence of default was rising
rapidly. This caused concern with many mortgage lenders and banks. In August,
the Fed stepped in with a 0.50% discount rate decrease to ease the cost of
borrowing and to help mortgage holders to make their payments (see Yield Curve
chart to compare the yields paid at different maturities at the beginning,
mid-point and end of the fiscal year). There was an investor shift to the safe
haven of Treasury securities, causing Treasury prices to rally sharply and
mortgage-backed securities, even of good credit quality, suffered in a spillover
effect from the sub-prime sector. Even government-backed
AHA INVESTMENT FUNDS | PAGE 3
letter to our shareholders
SEPTEMBER 30, 2007
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Agency securities showed downturns in the market. As the Fund invests in
investment grade bonds only, it did not hold any high risk sub-prime assets.
The Fund's average dollar-weighted credit quality is AA and has been so
throughout the year. However, with a 28-29% weighting in mortgage-backed
securities and a small 13-14% weighting in Treasury securities the Institutional
Class and Class A (renamed N) Shares recorded net returns of 4.48% and 4.23%,
respectively, for the fiscal year. This compared favorably to the peer group
average of the Lipper Corporate Debt Funds A Rated Classification (which is a
universe of government/corporate bond funds rated A or better) return of
4.04%. The Lehman Intermediate Government/Credit Index returned 5.44% during the
fiscal year. However, the intermediate index does not contain any mortgages, and
42% of the index is comprised of Treasuries. Therefore, relative to its
benchmarks the Fund was significantly overweight in mortgage-backed securities
that underperformed, and underweight in Treasuries, which outperformed. The
Fund's advisers still believe that shareholder interests are best served by a
diversified portfolio of bonds rather than all Treasury securities, and
anticipate that as the bond market adjusts to Fed actions to support the home
mortgage system, the diversification of a multiple-sector bond fund will benefit
investors.
AHA BALANCED FUND
The AHA Balanced Fund combines stocks, bonds and cash in a moderate allocation
targeted at 60% stocks. The Fund's net return for the fiscal year was 9.47%. A
hybrid benchmark of 60% S&P 500 Stock Index, 30% Lehman U.S. Aggregate Bond
Index and 10% Merrill Lynch 3-month U.S. Treasury Index returned 11.89%. The
Fund's ranking in the Morningstar moderate universe was in the 70th percentile
for the year. The Fund had a market weight in energy stocks, which was the best
performing sector for the year, and an overweight in the materials sector (raw
materials and mining), the second best performing sector. However, an
underweight in industrial stocks, which performed well, and overweights in the
financial and consumer discretionary sectors were drags on performance. The
aggregate duration of the Fund's fixed income allocation aided returns, and the
portfolio held an index-equal weight to investment grade mortgages, but an
underweight in Treasuries during the flight to quality held back performance
late in the fiscal year.
AHA DIVERSIFIED EQUITY FUND
The AHA Diversified Equity Fund Institutional Class and Class A (redesignated
Class N) Shares produced results of 11.93% and 11.62%, respectively. This Fund
combines three portfolio managers: core (50% weight), traditional value (25%)
and an alpha large-mid value (25%). During the year the trend in equity markets
away from value oriented sectors became evident as growth oriented equities led
the market and that portion of the S&P 500 Index led it to a return of
16.44%. The Fund's holdings overweighting in the best performing sectors, energy
and information technology, aided performance as oil prices continued to hit
record levels and growth oriented technology stocks rose. However, the largest
weighting in the Fund was the Financial sector, and it was a drain on
performance in the final fiscal quarter as concerns about banks'
creditworthiness in the sub-prime mortgage crisis caused bank stocks in this
sector to fall. The Fund's core portfolio manager, Freeman Associates Investment
Management LLC's theme of low price-to-earnings ratios and strong cash flows
helped minimize downside risk in the Fund.
As noted above, this Fund is a blend of three major investment styles, the
conservative "core" management of Freeman Associates, with a more aggressive
"alpha" manager, SKBA Capital Management's Value
AHA INVESTMENT FUNDS | PAGE 4
letter to our shareholders
SEPTEMBER 30, 2007
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Opportunity style, and AMBS Investment Counsel's Absolute Large Cap Value, a
fundamental value approach. This is the first fiscal year of the alpha and
fundamental managers as they began management of the AHA Diversified Equity
portfolios at the start of the new fiscal year on October 1, 2006. Freeman
Associates has been the core manager for over ten years.
This Fund is tobacco-free and has just been listed in Schwab's socially
conscious group of funds in both OneSource and Institutional. It was listed on
Fidelity over the summer and the N (No-load) class is available to retail
investors nationally.
AHA SOCIALLY RESPONSIBLE
EQUITY FUND
The AHA Socially Responsible Equity Fund completed its second full fiscal year
of performance. It is pro-green and designed to meet the social guidelines of
church-based organizations. The Fund's Institutional Class returned 13.89% for
the fiscal year, while the A (now named N) shares were up 13.64%. These returns
are very close to the 13.95% of the Domini 400 Social Index. Returns were aided
by overweights in information technology and energy stocks and paring back the
Financial sector.
The Fund's sub-adviser, SKBA Capital Management, uses their Socially Responsible
Value investment style, and follows the social guidelines of the U.S. Conference
of Catholic Bishops. Proactively SKBA researches companies that have good
environmental sustainability, human rights and governance track records. We now
have three of the four largest non-profit hospital systems in the U.S. as
investors in this Fund through their employee retirement plans. This Fund is
listed on Schwab as part of their socially conscious universe and is also on the
Fidelity platform. The N (No-load) Class is available to investors nationally.
NEW FISCAL YEAR
We recently redesigned and launched a new website, WWW.AHAFUNDS.COM and
WWW.AHAFUNDS.ORG, with much greater detail and background information. An
exciting new development is the change in share class designation of the retail
shares from "A" to "N", to emphasize that we are no-load. In conjunction with
this, the AHA Socially Responsible Equity and AHA Diversified Equity Funds are
now listed on Schwab, both Institutional and OneSource, under socially conscious
funds. They are also on Fidelity,Wachovia, Lehman, City National Securities for
purchase. We want to thank our shareholders for their confidence in the AHA
Investment Funds and for enabling us to be distributed on more fund networks
nationally.
Sincerely,
/s/ Timothy G. Solberg
Timothy G. Solberg, CFA
CHIEF INVESTMENT OFFICER
AHA INVESTMENT FUNDS, 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 SCHEDULE OF INVESTMENTS IN THE REPORT FOR FUND HOLDINGS AND INDEX
DEFINITIONS. PORTFOLIO HOLDINGS AND SECTOR ALLOCATIONS ARE SUBJECT TO CHANGE.
THE ADVISER 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 CAN ADVERSELY AFFECT THE VALUE OF AN INVESTMENT IN THE
AHA LIMITED AND FULL MATURITY FUNDS.
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).
AHA INVESTMENT FUNDS | PAGE 5
fund overview
SEPTEMBER 30, 2007
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AHA LIMITED MATURITY FIXED INCOME FUND
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Comparison of Change in the Value of a $10,000 Investment in the AHA Limited
Maturity Fixed Income Fund, Institutional Class, versus the following indexes:
the Merrill Lynch 1-3 Year Treasury Index and the Merrill Lynch 3-Month
U.S. Treasury Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Merrill Lynch
AHA Limited 3-Month Merrill Lynch
Maturity Fixed U.S. 1-3 Year
Income, Institutional Treasury Treasury
Class Shares Index Index
9/30/97 $10,000 $10,000 $10,000
9/30/98 $10,713 $10,536 $10,797
9/30/99 $11,025 $11,031 $11,146
9/30/00 $11,632 $11,669 $11,791
9/30/01 $12,814 $12,305 $13,015
9/30/02 $13,473 $12,551 $13,750
9/30/03 $13,843 $12,717 $14,111
9/30/04 $13,943 $12,856 $14,259
9/30/05 $14,035 $13,193 $14,398
9/30/06 $14,525 $13,787 $14,937
9/30/07 $15,197 $14,507 $15,803
This chart assumes an initial gross investment of $10,000 for the AHA Limited
Maturity Fixed Income Fund - Institutional Class Shares, as well as the Merrill
Lynch 1-3 Year Treasury Index and the Merrill Lynch 3-Month U.S. Treasury Index.
Performance figures include reinvested dividends and capital gains. Class A
Shares are sold with a 0.25% 12b-1 fee. The performance in the above graph does
not reflect the deduction of taxes the shareholder will pay on Fund
distributions or the redemptions of Fund Shares. Investment performance reflects
fee waivers in effect. In the absence of such waivers, total return would be
reduced.
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER
THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH
END MAY BE OBTAINED BY CALLING 1-800-445-1341.
AVERAGE ANNUAL TOTAL RETURNS
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Annualized Annualized Annualized Annualized
One-Year 3-Year 5-Year 10-Year Inception
Shares Return Return Return Return to Date
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Institutional Class(1) 4.63% 2.92% 2.44% 4.28% 5.25%
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Class A(2) 4.47% N/A N/A N/A 2.67%
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Merrill Lynch 1-3 Year
Treasury Index 5.80% 3.49% 2.82% 4.68% 5.89%
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Merrill Lynch 3-Month
U.S. Treasury Index 5.22% 4.11% 2.94% 3.79% 4.72%
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(1) Commenced operations on October 31, 1988.
(2) Commenced operations on October 22, 2004. Total cumulative return since
inception for the Class A Shares was 8.05% as of September 30, 2007.
MERRILL LYNCH 1-3 YEAR TREASURY INDEX
A subset of the Merrill Lynch Treasury Master Index. The maturity range on these
securities is from one to three years. This index is available on a monthly
basis in price-only and total return versions. The value was set at 100 on
December 31, 1975.
MERRILL LYNCH 3-MONTH U.S. TREASURY INDEX
The Merrill Lynch 3-Month U.S. Treasury Index is comprised of a single issue
purchased at the beginning of the month and held for a full month. Each month
the index is rebalanced and the issue selected is the outstanding Treasury Bill
that matures closest to, but not beyond three months from the rebalancing date.
One cannot invest directly in an index.
Top Ten Holdings
% OF PORTFOLIO
FHLB, 4.375%, 09/17/10 3.5
U.S. Treasury Note, 4.625%, 07/31/09 2.7
FNMA, 5.500%, 03/15/11 2.6
FHLMC, 5.125%, 10/15/08 2.5
U.S. Treasury Note, 5.500%, 02/15/08 2.5
U.S. Treasury Note, 4.500%, 05/15/10 2.5
FHLMC REMIC, Ser R013, Cl AB, 6.000%, 12/15/21 2.4
U.S. Treasury Note, 6.000%, 08/15/09 2.4
FHLMC, 3.625%, 09/15/08 2.3
FNMA, 3.250%, 02/15/09 2.3
AHA INVESTMENT FUNDS | PAGE 6
fund overview
SEPTEMBER 30, 2007
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AHA FULL MATURITY FIXED INCOME FUND
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Comparison of Change in the Value of a $10,000 Investment in the AHA Full
Maturity Fixed Income Fund, Institutional Class, versus the Lehman Brothers
Intermediate Government/Credit Total Return Index and the Lehman Brothers U.S.
Aggregate Bond Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
AHA Full Maturity Lehman Brothers
Fixed Income, Intermediate Lehman Brothers
Institutional Government/Credit U.S. Aggregate
Class Shares Total Return Index Bond Index
9/30/97 $10,000 $10,000 $10,000
9/30/98 $11,073 $11,043 $11,151
9/30/99 $10,991 $11,113 $11,110
9/30/00 $11,730 $11,807 $11,886
9/30/01 $13,137 $13,330 $13,426
9/30/02 $14,065 $14,410 $14,580
9/30/03 $14,864 $15,276 $15,369
9/30/04 $15,376 $15,681 $15,935
9/30/05 $15,699 $15,916 $16,381
9/30/06 $16,175 $16,479 $16,982
9/30/07 $16,900 $17,376 $17,853
This chart assumes an initial gross investment of $10,000 for the AHA Full
Maturity Fixed Income Fund -Institutional Class Shares and the Lehman Brothers
Intermediate Government/Credit Total Return Index and the Lehman Brothers U.S.
Aggregate Bond Index. Performance figures include reinvested dividends and
capital gains. Class A Shares are sold with a 0.25% 12b-1 fee. The performance
in the above graph does not reflect the deduction of taxes the shareholder will
pay on Fund distributions or the redemptions of Fund Shares. Investment
performance reflects fee waivers in effect. In the absence of such waivers,
total returns would be reduced.
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER
THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH
END MAY BE OBTAINED BY CALLING 1-800-445-1341.
AVERAGE ANNUAL TOTAL RETURNS
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Annualized Annualized Annualized Annualized
One-Year 3-Year 5-Year 10-Year Inception
Shares Return Return Return Return to Date
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Institutional Class(1) 4.48% 3.20% 3.74% 5.39% 6.56%
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Class A(2) 4.23% 2.91% N/A N/A 3.45%
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Lehman Brothers
Intermediate
Government/Credit
Total Return Index 5.44% 3.48% 3.82% 5.68% 6.90%
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Lehman Brothers
U.S. Aggregate
Bond Index 5.13% 3.86% 4.13% 5.97% 7.40%
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(1) Commenced operations on October 20, 1988.
(2) Commenced operations on April 30, 2004. Total cumulative return since
inception for the Class A Shares was 12.28% as of September 30, 2007.
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CREDIT TOTAL RETURN INDEX
A total return index consisting of investment grade corporate debt issues as
well as debt issues of U.S. government agencies and the U.S. Treasury. The debt
issues all maintain maturities within a range of one to ten years.
LEHMAN BROTHERS U.S. AGGREGATE BOND INDEX
The Lehman Brothers U.S. Aggregate Bond Index represents securities that are
SEC-registered, taxable, and dollar denominated. The index covers the U.S.
investment grade fixed rate bond market, with index components for government
and corporate securities, mortgage pass-through securities, and asset-backed
securities. These major sectors are subdivided into more specific indices that
are calculated and reported on a regular basis.
One cannot invest directly in an index.
Top Ten Holdings*
% OF PORTFOLIO
U.S. Treasury Bond, 6.250%, 08/15/23 5.1
FNMA, 6.000%, 05/15/11 4.3
FNMA, 5.500%, 04/01/36 3.3
FHLMC, Pool G12609, 5.500%, 04/01/22 1.9
FNMA, 3.875%, 02/15/10 1.9
FHLMC, 4.375%, 07/17/15 1.7
FNMA, 6.125%, 03/15/12 1.7
U.S. Treasury Note, 4.750%, 05/15/14 1.5
FNMA, 5.250%, 01/15/09 1.5
U.S. Treasury Note, 3.000%, 02/15/08 1.3
*Excludes cash equivalents and collateral for securities lending.
AHA INVESTMENT FUNDS | PAGE 7
fund overview
SEPTEMBER 30, 2007
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AHA BALANCED FUND
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Comparison of Change in the Value of a $10,000 Investment in the AHA Balanced
Fund, versus a 60/30/10 Hybrid of the following indexes: the S&P 500 Index, the
Lehman U.S. Aggregate Bond Index and the Merrill Lynch 3-Month U.S. Treasury
Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
AHA Balanced Fund, Lehman U.S. Merrill Lynch
Institutional 60/30/10 Aggregate 3-Month U.S.
Class Shares Hybrid Index S&P 500 Index Bond Index Treasury Index
9/30/97 $10,000 $10,000 $10,000 $10,000 $10,000
9/30/98 $ 9,872 $10,966 $10,905 $11,151 $10,536
9/30/99 $11,453 $12,820 $13,937 $11,110 $11,031
9/30/00 $13,451 $14,193 $15,787 $11,886 $11,669
9/30/01 $12,465 $12,360 $11,585 $13,426 $12,305
9/30/02 $11,288 $11,105 $ 9,211 $14,580 $12,551
9/30/03 $12,888 $12,922 $11,458 $15,369 $12,717
9/30/04 $14,378 $14,152 $13,047 $15,935 $12,856
9/30/05 $16,001 $15,349 $14,645 $16,381 $13,193
9/30/06 $17,332 $16,580 $16,225 $16,982 $13,787
9/30/07 $18,974 $18,552 $18,893 $17,853 $14,507
This chart assumes an initial gross investment of $10,000 for the AHA Balanced
Fund and in the 60/30/10 Hybrid Index, the S&P 500 Index, the Lehman U.S.
Aggregate Bond Index and the Merrill Lynch 3-Month U.S. Treasury Index.
Performance figures include reinvested dividends and capital gains. The
performance in the above graph does not reflect the deduction of taxes the
shareholder will pay on Fund distributions or the redemption of Fund Shares.
Investment performance reflects fee waivers in effect. In the absence of such
waivers, total return would be reduced.
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER
THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH
END MAY BE OBTAINED BY CALLING 1-800-445-1341.
AVERAGE ANNUAL TOTAL RETURNS
- -----------------------------------------------------------------------------------------
Annualized Annualized Annualized Annualized
One-Year 3-Year 5-Year 10-Year Inception
Shares Return Return Return Return to Date
- -----------------------------------------------------------------------------------------
Institutional Class(1) 9.47% 9.69% 10.94% 6.61% 9.46%
- -----------------------------------------------------------------------------------------
60/30/10 Hybrid
Index 11.89% 9.45% 10.81% 6.38% 9.90%
- -----------------------------------------------------------------------------------------
S&P 500 Index 16.44% 13.14% 15.45% 6.57% 11.73%
- -----------------------------------------------------------------------------------------
Lehman U.S. Aggregate
Bond Index 5.13% 3.86% 4.13% 5.97% 7.37%
- -----------------------------------------------------------------------------------------
Merrill Lynch 3-Month
U.S. Treasury Index 5.22% 4.11% 2.94% 3.79% 5.11%
- -----------------------------------------------------------------------------------------
(1) Commenced operations on October 20, 1988.
60/30/10 HYBRID INDEX
This is a customized index with a blend of three indexes, consisting of 60% in
the S&P 500 Index, 30% in the Lehman U.S. Aggregate Bond Index and 10% in the
Merrill Lynch 3-Month U.S. Treasury Index.
S&P 500 INDEX
The S&P 500 is a broad market-weighted average of U.S. blue-chip companies. The
S&P 500 Index is a registered trademark of McGraw-Hill, Inc.
LEHMAN U.S. AGGREGATE BOND INDEX
The Lehman Brothers U.S. Aggregate Bond Index represents securities that are
SEC-registered, taxable, and dollar denominated. The index covers the U.S.
investment grade fixed rate bond market, with index components for government
and corporate securities, mortgage pass-through securities, and asset-backed
securities. These major sectors are subdivided into more specific indices that
are calculated and reported on a regular basis.
MERRILL LYNCH 3-MONTH U.S.TREASURY INDEX
The Merrill Lynch 3-Month U.S. Treasury Index is comprised of a single issue
purchased at the beginning of the month and held for a full month. Each month
the index is rebalanced and the issue selected is the outstanding Treasury Bill
that matures closest to, but not beyond three months from the rebalancing date.
One cannot invest directly in an index.
Top Ten Holdings*
% OF PORTFOLIO
U.S. Treasury Bond 6.250%, 08/15/23 4.7
General Electric 2.7
FNMA, Pool 254800, 5.500%, 07/01/23 1.9
Bank of America 1.7
Chevron Texaco 1.7
Exxon Mobil 1.6
Pfizer 1.5
IBM 1.5
ConocoPhillips 1.5
Apple 1.4
*Excludes cash equivalents and collateral for securities lending.
AHA INVESTMENT FUNDS | PAGE 8
fund overview
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA DIVERSIFIED EQUITY FUND
- --------------------------------------------------------------------------------
Comparison of Change in the Value of a $10,000 Investment in the AHA Diversified
Equity Fund, Institutional Class, versus the S&P 500 Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
AHA Diversified
Equity Fund,
Institutional
Class Shares S&P 500 Index
9/30/97 $10,000 $10,000
9/30/98 $ 9,820 $10,905
9/30/99 $12,279 $13,937
9/30/00 $14,799 $15,787
9/30/01 $12,561 $11,585
9/30/02 $10,279 $ 9,211
9/30/03 $12,509 $11,458
9/30/04 $14,529 $13,047
9/30/05 $16,924 $14,645
9/30/06 $18,643 $16,225
9/30/07 $20,867 $18,893
This chart assumes an initial gross investment of $10,000 for the AHA
Diversified Equity Fund - Institutional Class Shares and the S&P 500 Index.
Performance figures include reinvested dividends and capital gains. Class A
Shares are sold with a 0.25% 12b-1 fee. The performance in the above graph does
not reflect the deduction of taxes the shareholder will pay on Fund
distributions or the redemption of Fund Shares. The adviser has an agreement in
place to waive fees. Currently, the expense levels have not been exceeded for
the Fund.
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER
THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH
END MAY BE OBTAINED BY CALLING 1-800-445-1341.
AVERAGE ANNUAL TOTAL RETURNS
- -----------------------------------------------------------------------------------------
Annualized Annualized Annualized Annualized
One-Year 3-Year 5-Year 10-Year Inception
Shares Return Return Return Return to Date
- -----------------------------------------------------------------------------------------
Institutional Class(1) 11.93% 12.82% 15.21% 7.63% 11.90%
- -----------------------------------------------------------------------------------------
Class A(2) 11.62% 12.52% N/A N/A 14.32%
- -----------------------------------------------------------------------------------------
S&P 500 Index 16.44% 13.14% 15.45% 6.57% 11.73%
- -----------------------------------------------------------------------------------------
(1) Commenced operations on October 20, 1988.
(2) Commenced operations on December 27, 2002. Total cumulative return since
inception for the Class A Shares was 89.13% as of September 30, 2007.
THE S&P 500 INDEX is a broad market-weighted average of U.S. blue-chip
companies. S&P 500 Index is a registered trademark of McGraw-Hill, Inc.
One cannot invest directly in an index.
Top Ten Holdings*
% OF PORTFOLIO
General Electric 3.1
Hewlett Packard 2.3
Bank of America 2.2
ConocoPhillips 2.0
Time Warner 1.9
Verizon Communications 1.9
JP Morgan Chase 1.8
Chevron Texaco 1.6
Citigroup 1.6
Johnson & Johnson 1.5
*Excludes cash equivalents and collateral for securities lending.
AHA INVESTMENT FUNDS | PAGE 9
fund overview
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA SOCIALLY RESPONSIBLE EQUITY FUND
- --------------------------------------------------------------------------------
Comparison of Change in the Value of a $10,000 Investment in the AHA Socially
Responsible Equity Fund, Institutional Class, versus the Domini 400 Social Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
AHA Socially
Responsible
Equity Fund,
Institutional Domini 400
Class Shares Social Index
1/3/05 $10,000 $10,000
9/30/05 $10,355 $10,085
9/30/06 $11,152 $11,046
9/30/07 $12,701 $12,587
This chart assumes an initial gross investment of $10,000 made on January 3,
2005 (since inception) for the AHA Socially Responsible Equity Fund -
Institutional Class Shares and the Domini 400 Social Index. Performance figures
include reinvested dividends and capital gains. Class A Shares are sold with a
0.25% 12b-1 fee. The performance in the above graph does not reflect the
deduction of taxes the shareholder will pay on Fund distributions or the
redemption of Fund Shares. The adviser has an agreement in place to waive fees.
Currently, the expense levels have not been exceeded for the Fund.
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST. CURRENT PERFORMANCE OF THE FUND MAY BE LOWER OR HIGHER
THAN THE PERFORMANCE QUOTED. PERFORMANCE DATA CURRENT TO THE MOST RECENT MONTH
END MAY BE OBTAINED BY CALLING 1-800-445-1341.
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
Annualized
One-Year Inception
Shares Return to Date
- --------------------------------------------------------------------------------
Institutional Class(1) 13.89% 9.12%
- --------------------------------------------------------------------------------
Class A(2) 13.64% 10.44%
- --------------------------------------------------------------------------------
Domini 400 Social Index 13.95% 8.74%
- --------------------------------------------------------------------------------
(1) Commenced operations on January 3, 2005.
(2) Commenced operations on August 12, 2005. Total cumulative return since
inception for the Class A Shares was 23.60% as of September 30, 2007.
THE DOMINI 400 SOCIAL INDEX(SM) is a market capitalization-weighted common stock
index. It monitors the performance of 400 U.S. corporations that pass multiple,
broad-based social screens. The Index consists of approximately 250 companies
included in the Standard & Poor's 500 Index, approximately 100 additional large
companies not included in the S&P 500 but providing industry representation, and
approximately 50 additional companies with particularly strong social
characteristics.
One cannot invest directly in an index.
Top Ten Holdings*
% OF PORTFOLIO
Chesapeake Energy 3.6
NASDAQ Stock Market 3.4
Emerson Electric 3.3
Johnson & Johnson 3.0
Xerox 3.0
Marsh & McLennan 2.9
Kimberly-Clark 2.9
Atmos Energy 2.9
Patterson-UTI Energy 2.8
Time Warner 2.8
*Excludes cash equivalents and collateral for securities lending.
AHA INVESTMENT FUNDS | PAGE 10
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA LIMITED MATURITY FIXED INCOME FUND
TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*:
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
30.0% Corporate Bonds
21.5% U.S. Government Agency Obligations
18.8% U.S. Government Mortgage-Backed Obligations
10.5% U.S. Treasury Obligations
5.5% Commercial Paper+
5.3% Floating Rate Notes+
3.8% Mortgage-Backed Securities
2.3% Cash Equivalents+
2.3% Repurchase Agreement
*Percentages based on total investments.
+Percentages include cash collateral for securities on loan.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [32.4%]
AEROSPACE & DEFENSE [0.4%]
United Technologies
4.375%, 05/01/10 $ 200 $ 198
=============================================================================
BANKS [2.7%]
HSBC Holding
7.500%, 07/15/09 200 209
U.S. Bank, NA
6.375%, 08/01/11 710 739
Washington Mutual
4.375%, 01/15/08 250 249
-----------------------------------------------------------------------------
TOTAL BANKS 1,197
=============================================================================
BEAUTY PRODUCTS [1.6%]
Procter & Gamble
6.875%, 09/15/09 710 738
=============================================================================
CHEMICALS [0.6%]
Dow Chemical
5.750%, 12/15/08 250 252
=============================================================================
COMPUTER SYSTEM DESIGN & SERVICES [1.6%]
IBM, MTN
4.375%, 06/01/09 710 709
=============================================================================
FINANCE AUTO LOANS [0.7%]
Toyota MotorCredit
5.500%, 12/15/08 300 301
=============================================================================
FINANCIAL SERVICES [5.6%]
American Express Credit
3.000%, 05/16/08 300 296
American General Finance,
Ser H, MTN
5.375%, 10/01/12 710 699
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
International Lease Finance
4.350%, 09/15/08 $ 300 $ 297
John Deere Capital, Ser D, MTN
4.500%, 01/25/08 200 199
Lehman Brothers Holdings
6.625%, 01/18/12 710 733
National Rural Utilities
3.875%, 02/15/08 275 273
-----------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 2,497
=============================================================================
FOOD, BEVERAGE & TOBACCO [0.6%]
Coca-Cola Enterprises
5.750%, 11/01/08 250 251
=============================================================================
INSURANCE [0.5%]
Allstate
7.200%, 12/01/09 200 209
=============================================================================
INVESTMENT BANKER/BROKER DEALER [7.2%]
Citigroup
6.500%, 01/18/11 710 738
3.500%, 02/01/08 300 299
Credit Suisse First Boston
6.125%, 11/15/11 710 731
Goldman Sachs Group
6.650%, 05/15/09 710 728
Morgan Stanley
6.750%, 04/15/11 710 742
-----------------------------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 3,238
=============================================================================
MULTI-MEDIA [1.7%]
Walt Disney
6.375%, 03/01/12 710 743
=============================================================================
PETROLEUM & FUEL PRODUCTS [1.7%]
Conoco Funding
6.350%, 10/15/11 710 740
=============================================================================
RETAIL [1.0%]
Target
5.400%, 10/01/08 250 250
Wal-Mart Stores
6.875%, 08/10/09 200 207
-----------------------------------------------------------------------------
TOTAL RETAIL 457
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 11
schedule of investments
SEPTEMBER 30, 2007
AHA LIMITED MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
SECURITY BROKERS & DEALERS [2.0%]
Credit Suisse First Boston
3.875%, 01/15/09 $ 300 $ 296
Goldman Sachs Group
4.125%, 01/15/08 300 299
Merrill Lynch, Ser B, MTN
3.125%, 07/15/08 300 294
-----------------------------------------------------------------------------
TOTAL SECURITY BROKERS & DEALERS 889
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [4.0%]
AT&T
6.250%, 03/15/11 710 731
Bellsouth Telecommunications
5.875%, 01/15/09 300 303
Verizon Communications
7.250%, 12/01/10 710 754
-----------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 1,788
=============================================================================
WHOLESALE [0.5%]
Public Service Electric & Gas, Ser C, MTN
4.000%, 11/01/08 250 247
=============================================================================
TOTAL CORPORATE BONDS
(Cost $14,481) 14,454
=======================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS [23.2%]
FHLB
4.375%, 09/17/10 1,705 1,702
FHLMC
5.250%, 05/21/09 980 992
5.125%, 10/15/08 (B) 1,200 1,208
4.875%, 05/14/10 580 586
4.625%, 12/19/08 700 701
4.250%, 07/15/09 675 673
3.625%, 09/15/08 1,130 1,120
FNMA
5.500%, 03/15/11 1,200 1,239
4.875%, 04/15/09 685 689
3.250%, 08/15/08 390 385
3.250%, 02/15/09 1,105 1,087
-----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $10,302) 10,382
=======================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS [20.4%]
FFCB REMIC, Ser IA2, Cl 1
5.220%, 10/21/13 $ 673 $ 684
FHLMC REMIC, Ser R003,
Cl AG
5.125%, 10/15/15 832 829
FHLMC REMIC, Ser R007,
Cl AC
5.875%, 05/15/16 874 882
FHLMC REMIC, Ser R009,
Cl AK
5.750%, 12/15/18 883 888
FHLMC, Pool J04241
5.500%, 01/01/22 1,042 1,039
FHLMC, Pool J04459
5.000%, 03/01/22 286 281
FHLMC, Pool J04492
5.000%, 03/01/22 390 382
FHLMC, Pool J04508
5.000%, 03/01/22 278 272
FHMLC REMIC, Ser R013,
Cl AB
6.000%, 12/15/21 1,158 1,171
FNMA REMIC, Ser R009,
Cl AJ
5.750%, 12/15/18 1,054 1,060
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%, 12/01/20 820 804
FNMA, Pool 837196
5.500%, 02/01/21 800 798
---------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $9,078) 9,093
=======================================================================
U.S. TREASURY OBLIGATIONS [11.3%]
U.S. Treasury Notes
6.000%, 08/15/09 1,100 1,140
5.500%, 02/15/08 (B) 1,200 1,207
4.625%, 07/31/09 (B) 1,300 1,315
4.500%, 05/15/10 (B) 1,190 1,206
3.875%, 09/15/10 200 199
---------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,024) 5,067
=======================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 12
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA LIMITED MATURITY FIXED INCOME FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES [4.1%]
Bear Stearns Commercial Mortgage
Securities, Ser 2001-TOP2, Cl A1
6.080%, 02/15/35 $ 345 $ 349
GMAC Commercial Mortgage
Securities, Ser 2004-C3, Cl A2
3.950%, 12/10/41 354 350
JPMorgan Commercial Mortgage,
Ser 2005-IDP5 Cl A1
5.035%, 12/15/44 464 463
Morgan Stanley Capital Investments,
Ser 2005-T17, Cl A2
4.110%, 12/13/41 686 678
-----------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $1,870) 1,840
=========================================================================
COMMERCIAL PAPER [5.9%]
BANKS [5.9%]
Lloyds (A)
5.043%, 10/15/07 750 749
Neptune Funding (C)(F)
6.250%, 10/01/07 1,144 1,144
UBS Finance (A)
4.750%, 10/01/07 750 750
-----------------------------------------------------------------------------
TOTAL BANKS 2,643
=============================================================================
TOTAL COMMERCIAL PAPER
(Cost $2,643) 2,643
=========================================================================
FLOATING RATE NOTES [5.7%]
Sigma Finance (C)(D)
5.020%, 01/24/08 2,535 2,535
=============================================================================
TOTAL FLOATING RATE NOTES
(Cost $2,535) 2,535
=========================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS [2.5%]
Lehman Brothers (E)
5.050%, dated 09/28/07,
to be repurchased on 10/01/07,
repurchase price $1,100,463
(collateralized by a U.S. Treasury
obligation, par value $1,155,000,
5.500%, 11/15/35; with total
market value $1,123,232) $ 1,100 1,100
-----------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,100) 1,100
=========================================================================
CASH EQUIVALENTS [2.5%]
AIM Short-Term Investment
Company Liquid Assets
Portfolio, 5.190% (A) (C) 178,898 $ 179
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 5.25% (A) 954,535 955
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $1,134) 1,134
=========================================================================
TOTAL INVESTMENTS [108.0%]
(Cost $48,167) $ 48,248
=========================================================================
PERCENTAGES ARE BASED ON NET ASSETS OF $44,675.
(A) THE RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2007.
(B) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT
SEPTEMBER 30, 2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT SEPTEMBER 30,
2007 WAS $3,763,780.
(C) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING. THE TOTAL VALUE OF SUCH SECURITIES AT SEPTEMBER 30, 2007 WAS
$3,857,618.
(D) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF
INVESTMENTS IS THE RATE IN EFFECT ON SEPTEMBER 30, 2007.
(E) TRI-PARTY REPURCHASE AGREEMENT.
(F) THE RATE SHOWN IS THE DISCOUNT RATE AS OF SEPTEMBER 30, 2007.
CL -- CLASS
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
NA -- NATIONAL ASSOCIATION
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 13
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA FULL MATURITY FIXED INCOME FUND
TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*:
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
26.7% Corporate Bonds
21.4% U.S. Government Agency Obligations
13.4% Mortgage-Backed Securities
12.2% U.S. Treasury Obligations
12.0% U.S. Government Mortgage-Backed Obligations
6.3% Floating Rate Notes+
3.0% Cash Equivalents+
2.8% Commercial Paper+
1.5% Asset-Backed Securities
0.6% Foreign Government Bonds
0.1% Municipal Bond
*Percentages based on total investments.
+Percentages include cash collateral for securities on loan.
- --------------------------------------------------------------------------------
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
CORPORATE BONDS [29.2%]
AEROSPACE & DEFENSE [0.2%]
United Technologies
4.375%, 05/01/10 $ 80 $ 79
=============================================================================
AGRICULTURE [0.2%]
Bunge NA Finance
5.900%, 04/01/17 100 96
=============================================================================
BANKS [5.3%]
AmSouth Bancorporation
6.750%, 11/01/25 75 77
Bank of America
10.200%, 07/15/15 100 127
5.625%, 10/14/16 150 150
Bank One
10.000%, 08/15/10 89 100
Bankers Trust
7.250%, 10/15/11 46 50
Citigroup
3.625%, 02/09/09 300 295
Deutsche Bank
6.000%, 09/01/17 180 182
Dresdner Bank - New York
7.250%, 09/15/15 150 163
European Investment Bank
4.625%, 03/21/12 450 448
HSBC Holding
7.500%, 07/15/09 285 298
Jefferies Group
6.450%, 06/08/27 100 94
Santander Central Hispano Issuances
7.625%, 09/14/10 100 107
Wachovia
6.300%, 04/15/08 150 151
-----------------------------------------------------------------------------
TOTAL BANKS 2,242
=============================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
BUILDING & CONSTRUCTION [0.5%]
American Standard
7.375%, 02/01/08 $ 150 $ 150
Hanson Australia Funding
5.250%, 03/15/13 75 72
-----------------------------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 222
=============================================================================
CABLE/MEDIA [0.2%]
TCI Communications
7.875%, 08/01/13 75 82
=============================================================================
COMPUTER SYSTEM DESIGN & SERVICES [0.7%]
IBM, MTN
4.375%, 06/01/09 300 300
=============================================================================
DIVERSIFIED OPERATIONS [0.4%]
Hutchison Whamp International (C)
5.450%, 11/24/10 150 151
=============================================================================
DRUGS [1.0%]
Abbott Laboratories
5.600%, 05/15/11 325 331
Teva Pharmaceutical
5.550%, 02/01/16 75 73
-----------------------------------------------------------------------------
TOTAL DRUGS 404
=============================================================================
ELECTRICAL SERVICES [0.2%]
Public Service Company
of Colorado
4.375%, 10/01/08 100 99
=============================================================================
ENERGY [1.5%]
Carolina Power & Light
5.150%, 04/01/15 80 78
Exelon
5.625%, 06/15/35 75 67
Korea Electric Power
7.750%, 04/01/13 95 107
6.750%, 08/01/27 75 84
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%, 10/15/07 125 125
United Utilities
6.450%, 04/01/08 70 70
-----------------------------------------------------------------------------
TOTAL ENERGY 629
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 14
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA FULL MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES [5.2%]
American Express Credit
3.000%, 05/16/08 $ 300 $ 296
American General Finance
8.450%, 10/15/09 100 107
Associates NA, Ser A
7.950%, 02/15/10 75 80
Countrywide Financial
6.250%, 05/15/16 100 91
Credit Suisse USA
5.250%, 03/02/11 325 326
General Electric Capital
5.500%, 04/28/11 330 333
General Electric Capital,
Ser A, MTN
6.000%, 06/15/12 75 77
HSBC Finance
5.000%, 06/30/15 75 71
Lehman Brothers Holdings
6.625%, 01/18/12 300 310
NiSource Finance
7.875%, 11/15/10 75 80
Swedish Export Credit
4.875%, 01/19/10 280 283
UFJ Finance Aruba
6.750%, 07/15/13 125 129
-----------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 2,183
=============================================================================
FOOD, BEVERAGE & TOBACCO [0.6%]
Kraft Foods
6.500%, 08/11/17 190 196
Pepsi Bottling Holdings (C)
5.625%, 02/17/09 50 51
-----------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 247
=============================================================================
INSURANCE [0.2%]
Protective Life
4.300%, 06/01/13 100 94
=============================================================================
INVESTMENT BANKER/BROKER DEALER [3.4%]
Bear Stearns (A)
5.588%, 01/31/11 340 330
Goldman Sachs Group
6.600%, 01/15/12 200 210
5.498%, 06/28/10 (A) 100 100
5.150%, 01/15/14 75 73
Lehman Brothers Holdings
6.500%, 07/19/17 100 102
Merrill Lynch
6.000%, 02/17/09 325 327
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Merrill Lynch, Ser C, MTN (A)
5.580%, 02/05/10 $ 70 $ 69
Morgan Stanley (A)
5.640%, 01/15/10 140 139
4.750%, 04/01/14 75 70
-----------------------------------------------------------------------------
TOTAL INVESTMENT BANKER/BROKER DEALER 1,420
=============================================================================
MANUFACTURING [0.5%]
General Electric
5.000%, 02/01/13 150 148
Tyco International Group
6.375%, 10/15/11 75 77
-----------------------------------------------------------------------------
TOTAL MANUFACTURING 225
=============================================================================
MEDICAL PRODUCTS & SERVICES [0.3%]
Johnson & Johnson
5.550%, 08/15/17 130 132
=============================================================================
METALS & MINING [0.5%]
Vale Overseas
6.875%, 11/21/36 100 103
6.250%, 01/23/17 100 101
-----------------------------------------------------------------------------
TOTAL METALS & MINING 204
=============================================================================
MORTGAGE FINANCE [0.1%]
Residential Capital
6.000%, 02/22/11 75 61
=============================================================================
MULTI-MEDIA [0.9%]
Time Warner
9.125%, 01/15/13 50 57
5.875%, 11/15/16 85 83
Viacom
7.700%, 07/30/10 75 80
Walt Disney
6.375%, 03/01/12 150 157
-----------------------------------------------------------------------------
TOTAL MULTI-MEDIA 377
=============================================================================
OIL, GAS & CONSUMABLE FUELS [1.4%]
ConocoPhillips
5.300%, 04/15/12 300 300
Shell International
5.625%, 06/27/11 300 308
-----------------------------------------------------------------------------
TOTAL OIL, GAS & CONSUMABLE FUELS 608
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 15
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA FULL MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
PETROLEUM & FUEL PRODUCTS [0.3%]
Energy Transfer Partners
6.625%, 10/15/36 $ 75 $ 71
Pemex Project Funding Master Trust
9.125%, 10/13/10 50 55
-----------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 126
=============================================================================
PETROLEUM EXPLORATION [0.2%]
Travelers Cos., Inc. (A)
5.236%, 03/15/37 100 97
=============================================================================
REAL ESTATE INVESTMENT TRUST [0.2%]
Masco
6.125%, 10/03/16 75 73
=============================================================================
RETAIL [1.9%]
Eksportsfinans, Ser G, MTN
5.125%, 10/26/11 300 305
Home Depot
5.250%, 12/16/13 310 298
Lowe's
5.000%, 10/15/15 200 188
-----------------------------------------------------------------------------
TOTAL RETAIL 791
=============================================================================
SECURITY BROKERS & DEALERS [0.2%]
Istar Financial
5.850%, 03/15/17 100 88
=============================================================================
SHORT-TERM BUSINESS CREDIT [0.2%]
Citigroup Canada
5.200%, 06/01/15 100 91
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [2.6%]
British Telecommunications
8.875%, 12/15/30 100 132
8.375%, 12/15/10 (B) 60 66
Deutsche Telekom
8.000%, 06/15/10 25 27
Deutsche Telekom International Finance
8.250%, 06/15/30 75 92
France Telecom
7.750%, 03/01/11 50 54
New Cingular Wireless Services
8.750%, 03/01/31 75 95
Royal KPN
8.000%, 10/01/10 10 11
SBC Communications
5.300%, 11/15/10 300 303
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Sprint Capital
6.900%, 05/01/19 $ 75 $ 75
Telecom Italia Capital
7.200%, 07/18/36 75 79
Telefonica Emisiones
6.421%, 06/20/16 75 77
Verizon Global Funding
4.000%, 01/15/08 100 99
-----------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 1,110
=============================================================================
TRANSPORTATION SERVICES [0.3%]
FedEx
9.650%, 06/15/12 125 148
=============================================================================
TOTAL CORPORATE BONDS
(Cost $12,378) 12,379
==========================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS [23.5%]
FAMC, MTN
4.250%, 07/29/08 20 20
FFCB
4.875%, 04/04/12 200 202
FHLMC
6.875%, 09/15/10 300 320
6.000%, 01/15/17 135 137
5.875%, 03/21/11 350 366
5.625%, 06/13/16 185 191
5.500%, 04/15/17 143 144
5.000%, 07/15/14 325 329
5.000%, 02/01/21 415 407
5.000%, 05/15/21 150 147
4.375%, 07/17/15 835 807
FNMA
6.625%, 09/15/09 400 417
6.125%, 03/15/12 (D) 740 786
6.000%, 05/15/11 (D) 1,900 1,995
5.500%, 04/01/36 1,546 1,516
5.250%, 01/15/09 675 681
5.000%, 11/01/35 176 168
4.625%, 05/01/13 200 198
4.375%, 09/15/12 125 124
3.875%, 02/15/10 875 865
GNMA
3.727%, 03/16/27 129 126
-----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $9,853) 9,946
==========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 16
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA FULL MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES [14.7%]
Banc of America Alternative
Loan Trust, Ser 2004-2, Cl 5A1
5.500%, 03/25/19 $ 129 $ 128
Banc of America Alternative
Loan Trust, Ser 2005-4, Cl CB11
5.500%, 05/25/35 133 133
Banc of America Alternative
Loan Trust, Ser 2005-6, Cl 7A1
5.500%, 07/25/20 105 103
Banc of America Alternative
Loan Trust, Ser 2005-9, Cl 1CB3
5.500%, 10/25/35 121 121
Banc of America Alternative
Loan Trust, Ser 2006-2, Cl 6A1
5.500%, 03/25/21 143 142
Bayview Financial Acquisition Trust,
Ser 2007-A, Cl 1A2 (B)
6.205%, 04/28/37 200 200
Bear Stearns Commercial Mortgage
Security, Ser 2007-PW16, Cl AM (A)
5.902%, 06/11/40 300 299
Capital One Multi-asset Execution
Trust, Ser 2006-A9, Cl A9 (A)
5.768%, 05/15/13 500 497
Chase Mortgage Finance,
Ser 2003-S13, Cl A11
5.500%, 11/25/33 107 107
Citigroup Mortgage Loan Trust,
Ser 2005-9, Cl 2A2
5.500%, 11/25/35 114 114
Citigroup/Deutsche Bank
Commercial Mortgage
5.205%, 12/11/49 400 398
Commercial Mortgage,
Ser 2006-C8, Cl A2B
5.248%, 12/10/46 185 185
Countrywide Asset-Backed
Certificate, Ser 2007-S1, Cl A6 (A)
5.693%, 02/25/37 200 179
Countrywide Asset-Backed
Certificates, Ser 2006-11, Cl 1AF3 (A)
6.050%, 09/25/46 200 200
Deutsche Bank Alternative
Securities, Ser 2006, Cl AR5
6.000%, 10/15/21 175 177
Discover Card Master Trust I,
Ser DCMT 2003-4, Cl A1 (A)
5.863%, 05/15/11 400 400
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
First Horizon Alternative Mortgage
Securities, Ser 2006-FA8, Cl 2A1
5.750%, 02/25/37 $ 184 $ 185
GE Capital Commercial Mortgage,
Ser 2002-3A, Cl A2
4.996%, 12/10/37 150 149
GE Capital Commercial Mortgage,
Ser 2004-C3, Cl A4 (A)
5.189%, 07/10/39 200 197
GMAC Commercial Mortgage
Securities, Ser 2003-C1, Cl A2
4.079%, 05/10/36 225 212
GMAC Mortgage Corporation
Loan Trust, Ser 2004-GH1, Cl A6 (A)
4.810%, 07/25/35 150 146
GMAC Mortgage Corporation
Loan Trust, Ser 2004-J4, Cl A2
5.500%, 08/25/14 112 112
John Deere Owner Trust,
Ser 2007-A, Cl A3
5.050%, 07/15/11 420 419
JPMorgan Chase, Ser 2006-CB17, Cl ASB
5.415%, 12/12/43 200 199
JPMorgan Mortgage Trust,
Ser 2006-A7, Cl 2A4R (A)
5.500%, 01/25/37 200 200
JPMorgan Mortgage Trust,
Ser 2007-A2, Cl 2A3 (A)
5.732%, 04/25/37 200 201
JPMorgan Alternative Loan Trust,
Ser 2006-S3, Cl A3A (B)
6.000%, 08/25/36 200 201
RAAC, Ser 2004-SP1, Cl AI4 (A)
5.285%, 08/25/27 150 146
Renaissance Home Equity,
Ser 2007-1, Cl AF2 (B)
5.512%, 04/25/37 200 198
Residential Accredit Loans,
Ser 2004-QS5, Cl A5
4.750%, 04/25/34 48 47
Residential Accredit Loans,
Ser 2004-QS6, Cl A1
5.000%, 05/25/19 82 80
Wachovia Bank Commercial
Mortgage, Ser 2003-C3, Cl A2
4.867%, 02/15/35 150 147
-----------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $6,282) 6,222
======================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 17
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA FULL MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS [13.2%]
FHLMC Gold, Pool G11880
5.000%, 12/01/20 $ 159 $ 156
FHLMC REMIC, Ser 2720, Cl JB
5.000%, 12/15/16 150 150
FHLMC REMIC, Ser R003, Cl VA
5.500%, 08/15/16 172 173
FHLMC, Pool 160098
10.500%, 01/01/10 3 3
FHLMC, Pool 1B2550 (A)
5.291%, 02/01/36 210 210
FHLMC, Pool 1B2677 (A)
4.104%, 01/01/35 36 35
FHLMC, Pool 1B2683 (A)
4.087%, 01/01/35 22 21
FHLMC, Pool 1B2692 (A)
4.474%, 12/01/34 62 61
FHLMC, Pool 1Q008 (A)
5.079%, 03/01/36 321 317
FHLMC, Pool 8201
6.000%, 07/01/34 170 170
FHLMC, Pool C20300
6.500%, 01/01/29 16 17
FHLMC, Pool E01280
5.000%, 12/01/17 57 57
FHLMC, Pool G11431
6.000%, 02/01/18 39 40
FHLMC, Pool G12609
5.500%, 04/01/22 875 872
FHLMC, Pool G18124
6.000%, 06/01/21 164 167
FHLMC, Ser 2141, Cl N
5.550%, 11/15/27 13 13
FHLMC, Ser 2544, Cl QB
5.000%, 09/15/15 81 81
FHLMC, Ser 2804, Cl VC
5.000%, 07/15/21 174 169
FHLMC, Ser 3132, Cl MA
5.500%, 12/15/23 146 147
FNMA REMIC, Ser R009, Cl AJ
5.750%, 12/15/18 176 177
FNMA, Pool 254545
5.000%, 12/01/17 145 143
FNMA, Pool 13751
5.500%, 08/01/35 239 234
FNMA, Pool 252570
6.500%, 07/01/29 33 33
FNMA, Pool 253183
7.500%, 04/01/30 3 3
FNMA, Pool 253398
8.000%, 08/01/30 10 11
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FNMA, Pool 254510
5.000%, 11/01/17 $ 75 $ 73
FNMA, Pool 254685
5.000%, 04/01/18 109 107
FNMA, Pool 254949
5.000%, 11/01/33 89 85
FNMA, Pool 254953
5.000%, 11/01/18 59 58
FNMA, Pool 303168
9.500%, 02/01/25 8 8
FNMA, Pool 735060
6.000%, 11/01/34 118 118
FNMA, Pool 735228
5.500%, 02/01/35 100 98
FNMA, Pool 827223 (A)
4.777%, 04/01/35 190 188
FNMA, Pool 835744
5.000%, 09/01/35 555 530
FNMA, Ser 1992, Cl 136
6.000%, 08/25/22 42 42
FNMA, Ser 2003, Cl 16
5.000%, 10/25/15 150 150
FNMA, Ser 2003, Cl 18
5.000%, 03/25/16 96 96
FNMA, Ser 2003, Cl 31
4.500%, 12/25/28 90 89
FNMA, Ser 2004-W6, Cl 1A6
5.500%, 07/25/34 86 84
FNMA, Ser 2006-B2, Cl AB
5.500%, 05/25/14 233 233
GNMA, Pool 479168
8.000%, 02/15/30 8 9
GNMA, Pool 780315
9.500%, 12/15/17 16 18
GNMA, Ser 2004, Cl 78
4.658%, 04/16/29 150 146
-----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $5,651) 5,592
=======================================================================
U.S. TREASURY OBLIGATIONS [13.4%]
U.S.Treasury Bonds
9.125%, 05/15/18 200 274
6.250%, 08/15/23 (D) 2,075 2,384
U.S.Treasury Notes
5.750%, 08/15/10 345 361
4.875%, 08/15/16 200 205
4.750%, 05/15/14 700 716
4.375%, 12/15/10 400 404
4.000%, 04/15/10 350 350
3.500%, 02/15/10 280 277
3.000%, 02/15/08 625 622
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 18
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA FULL MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S.Treasury STRIP (F)
4.924%, 11/15/15 $ 125 $ 86
-----------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,615) 5,679
=======================================================================
ASSET-BACKED SECURITIES [1.7%]
CitiFinancial Mortgage Securities,
Ser 2004-1, Cl AF2 (B)
2.645%, 04/25/34 70 68
Cityscape Home Equity Loan Trust,
Ser 1997-C, Cl A4 (B)
7.000%, 07/25/28 14 14
Contimortgage Home Equity
Loan Trust, Ser 1997-2, Cl A9
7.090%, 04/15/28 8 8
Fairbanks Capital Mortgage,
Ser 1991-1, Cl A (A)
5.731%, 05/25/28 36 36
Green Tree Financial, Ser 1997-7, Cl A6
6.760%, 07/15/29 122 127
GSAA Home Equity Trust,
Ser 2005-1, Cl AF2 (A)
4.316%, 11/25/34 135 133
Renaissance Home Equity
Loan Trust, Ser 2005-3, Cl AF2 (B)
4.723%, 11/25/35 43 43
Residential Asset Securities,
Ser 2002-RS3, Cl AI5,
5.572%, 06/25/32 80 80
Residential Asset Securities,
Ser 2003-KS5, Cl AI6 (A)
3.620%, 07/25/33 173 162
Residential Asset Securities,
Ser 2004-KS5, Cl AI3 (A)
4.030%, 04/25/30 23 23
UCFC Home Equity Loan,
Ser 1998-C, Cl A7
5.935%, 01/15/30 19 19
-----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost $722) 713
=======================================================================
FACE AMOUNT (000)
DESCRIPTION /SHARES VALUE (000)
- --------------------------------------------------------------------------------
FOREIGN GOVERNMENT BONDS [0.7%]
Cia Brasileira de Bebida
8.750%, 09/15/13 $ 175 $ 202
National Bank of Hungary
8.875%, 11/01/13 75 90
-----------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT BONDS
(Cost $283) 292
=======================================================================
MUNICIPAL BOND [0.1%]
LOUISIANA [0.1%]
Louisiana State,Tobacco Settlement
Financing Authority, Ser 2001A
6.360%, 05/15/25 31 31
==========================================================================
TOTAL MUNICIPAL BOND
(Cost $31) 31
=======================================================================
COMMERCIAL PAPER [3.1%]
Neptune Funding (E) (G)
6.250%, 10/01/07 1,316 1,316
=============================================================================
TOTAL COMMERCIAL PAPER
(Cost $1,316) 1,316
=======================================================================
FLOATING RATE NOTES [6.9%]
Sigma Finance (A) (E)
5.020%, 01/24/08 2,914 2,914
=============================================================================
TOTAL FLOATING RATE NOTES
(Cost $2,914) 2,914
=======================================================================
CASH EQUIVALENTS [3.3%]
AIM Short-Term Investment
Company Liquid Assets
Portfolio, 5.190% (E) (F) 205,740 206
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 5.25% (F) 1,192,314 1,192
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $1,398) 1,398
=======================================================================
TOTAL INVESTMENTS [109.8%]
(Cost $46,443) $ 46,482
=======================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 19
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA FULL MATURITY FIXED INCOME FUND (CONCLUDED)
DESCRIPTION
- --------------------------------------------------------------------------------
PERCENTAGES ARE BASED ON NET ASSETS OF $42,331.
(A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF
INVESTMENTS IS THE RATE IN EFFECT ON SEPTEMBER 30, 2007.
(B) STEP BOND -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS IS THE RATE
IN EFFECT ON SEPTEMBER 30, 2007. THE COUPON ON A STEP BOND CHANGES ON A
SPECIFIC DATE.
(C) SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION NORMALLY TO QUALIFIED INSTITUTIONS. ON SEPTEMBER 30, 2007,
THE VALUE OF THESE SECURITIES AMOUNTED TO $202 (000), REPRESENTING 0.5% OF
THE NET ASSETS OF THE FUND.
(D) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT
SEPTEMBER 30, 2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT SEPTEMBER 30,
2007 WAS $4,286,033.
(E) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING. THE TOTAL VALUE OF SUCH SECURITIES AT SEPTEMBER 30, 2007 WAS
$4,436,399.
(F) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AT TIME OF PURCHASE.
(G) RATE SHOWN IS THE DISCOUNT RATE AS OF SEPTEMBER 30, 2007.
CL -- CLASS
FAMC -- FEDERAL AGRICULTURAL MORTGAGE CORPORATION
FFCB -- FEDERAL FARM CREDIT 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
STRIP -- SEPARATELY TRADED REGISTERED INTEREST AND PRINCIPAL SECURITY
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 20
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA BALANCED FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
11.2% Mortgage-Backed Securities
10.7% Financials - Common Stock
9.5% Information Technology - Common Stock
7.5% U.S. Government Mortgage-Backed Obligations
7.0% HealthCare - Common Stock
6.7% Energy - Common Stock
6.7% Industrials - Common Stock
5.7% Corporate Bonds
5.5% U.S. Treasury Obligations
5.4% Consumer Discretionary - Common Stock
4.7% Floating Rate Notes+
3.7% Consumer Staples - Common Stock
3.7% Materials - Common Stock
2.7% Utilities - Common Stock
2.4% Cash Equivalents+
2.2% U.S. Government Agency Obligations
2.1% Commercial Paper+
1.5% Telecommunication Services - Common Stock
0.6% Asset-Backed Securities
0.4% Foreign Government Bonds
0.1% Municipal Bond
*Percentages based on total investments.
+Percentages include cash collateral for securities on loan.
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [61.9%]
AEROSPACE & DEFENSE [0.8%]
Lockheed Martin 1,285 $ 140
=============================================================================
AUTOMOTIVE [1.2%]
Autozone* 351 41
Ford Motor 887 7
Paccar 1,804 154
-----------------------------------------------------------------------------
TOTAL AUTOMOTIVE 202
=============================================================================
BANKS [4.5%]
Bank of America 6,217 312
JPMorgan Chase 5,656 259
PNC Financial Services Group 1,350 92
Wachovia 1,828 92
-----------------------------------------------------------------------------
TOTAL BANKS 755
=============================================================================
BIOMEDICAL RESEARCH & PRODUCTS [0.1%]
Celgene* 294 21
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
BIOTECHNOLOGY [0.6%]
Amgen* 844 $ 48
Biogen Idec* 222 15
Gilead Sciences* 719 29
Millipore* 35 3
-----------------------------------------------------------------------------
TOTAL BIOTECHNOLOGY 95
=============================================================================
BROADCASTING & CABLE [0.5%]
Qualcomm 2,131 90
=============================================================================
BUSINESS SERVICES [0.7%]
Convergys* 2,278 39
eBay* 198 8
Xerox* 3,806 66
-----------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 113
=============================================================================
CHEMICALS [1.1%]
Dow Chemical 1,985 86
Eastman Chemical 754 50
Hercules* 2,230 47
-----------------------------------------------------------------------------
TOTAL CHEMICALS 183
=============================================================================
COMMUNICATION & MEDIA [1.9%]
Cisco Systems* 4,077 135
DIRECTV Group* 3,039 74
Time Warner 6,235 114
-----------------------------------------------------------------------------
TOTAL COMMUNICATION & MEDIA 323
=============================================================================
COMPUTER SYSTEM DESIGN & SERVICES [0.1%]
Lexmark International, Cl A* 310 13
=============================================================================
COMPUTERS & PERIPHERALS [0.0%]
EMC* 201 4
=============================================================================
COMPUTERS - HARDWARE [4.7%]
Apple* 1,696 260
Hewlett-Packard 5,082 253
IBM 2,350 277
-----------------------------------------------------------------------------
TOTAL COMPUTERS - HARDWARE 790
=============================================================================
COMPUTERS - SOFTWARE [1.4%]
Microsoft 3,521 104
Oracle* 5,992 130
-----------------------------------------------------------------------------
TOTAL COMPUTERS - SOFTWARE 234
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 21
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER PRODUCTS & SERVICES [0.7%]
Kimberly-Clark 818 $ 57
Procter & Gamble 937 66
-----------------------------------------------------------------------------
TOTAL CONSUMER PRODUCTS & SERVICES 123
=============================================================================
CONTAINERS & PACKAGING [0.8%]
Pactiv* 4,585 132
=============================================================================
DIVERSIFIED MANUFACTURING [3.4%]
Danaher 1,057 88
General Electric 11,669 483
-----------------------------------------------------------------------------
TOTAL DIVERSIFIED MANUFACTURING 571
=============================================================================
DIVERSIFIED METALS & MINING [0.8%]
Freeport-McMoRan Copper &
Gold, Cl B 1,362 143
=============================================================================
DRUGS [2.2%]
Merck 788 41
Pfizer 11,448 280
Wyeth 1,169 52
-----------------------------------------------------------------------------
TOTAL DRUGS 373
=============================================================================
ELECTRICAL SERVICES [0.9%]
DTE Energy 1,147 55
Duke Energy 4,911 92
-----------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 147
=============================================================================
ENERGY [2.0%]
Edison International 2,935 163
Entergy 1,079 117
PG&E 1,193 57
-----------------------------------------------------------------------------
TOTAL ENERGY 337
=============================================================================
ENGINEERING SERVICES [0.3%]
Fluor 319 46
=============================================================================
ENTERTAINMENT & GAMING [0.6%]
Carnival, Cl A 1,984 96
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES [3.5%]
American Capital Strategies (D) 3,913 $ 167
American Express 3,013 179
CIT Group 1,198 48
Citigroup 4,130 193
-----------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 587
=============================================================================
FOOD, BEVERAGE & TOBACCO [2.6%]
Dean Foods 5,039 129
General Mills 2,730 158
Kellogg Company 694 39
Pepsi Bottling Group 1,466 55
Safeway 1,987 66
-----------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 447
=============================================================================
HEALTHCARE PRODUCTS & SERVICES [3.3%]
Applera - Applied Biosystems
Group 127 4
Cardinal Health 2,200 138
Cigna 1,203 64
Humana* 2,386 167
UnitedHealth Group 3,930 190
-----------------------------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 563
=============================================================================
INSURANCE [3.0%]
ACE 1,400 85
Aetna 930 50
Allstate (D) 2,505 143
Chubb 630 34
Hartford Financial Services
Group 1,249 116
Lincoln National 501 33
XL Capital, Cl A 635 50
-----------------------------------------------------------------------------
TOTAL INSURANCE 511
=============================================================================
INVESTMENT BANKER/BROKER DEALER [0.0%]
Franklin Resources 50 6
=============================================================================
MACHINERY [1.4%]
Caterpillar 708 55
Deere 954 142
Eaton 415 41
-----------------------------------------------------------------------------
TOTAL MACHINERY 238
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 22
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES [1.0%]
Baxter International 149 $ 9
Becton Dickinson 620 51
Genzyme-General Division* 196 12
Wellpoint* 1,144 90
Zimmer Holdings* 3 --
-----------------------------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 162
=============================================================================
MULTI-MEDIA [1.2%]
Walt Disney 5,942 204
=============================================================================
PETROLEUM & FUEL PRODUCTS [7.7%]
Apache 703 63
Ashland 2,517 152
Chesapeake Energy 535 19
ChevronTexaco 3,306 310
ConocoPhillips 3,010 264
Ensco International 264 15
Exxon Mobil 3,124 289
Marathon Oil 2,793 159
Valero Energy 376 25
-----------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 1,296
=============================================================================
PETROLEUM REFINING [0.4%]
Hess 1,021 68
=============================================================================
RAILROADS [0.4%]
CSX 1,717 73
=============================================================================
REAL ESTATE INVESTMENT TRUSTS [0.8%]
Boston Properties 152 16
Prologis Trust 1,740 115
-----------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS 131
=============================================================================
RETAIL [3.3%]
Big Lots* 4,187 125
Home Depot 441 14
JC Penney 88 6
Kroger 2,907 83
Lowe's 2,031 57
Macy's 1,947 63
Mcdonald's 2,615 142
Radioshack 1,941 40
Sherwin Williams 69 4
Wal-Mart Stores 544 24
-----------------------------------------------------------------------------
TOTAL RETAIL 558
=============================================================================
DESCRIPTION SHARES/FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
SEMI-CONDUCTORS [1.6%]
Applied Materials 5,432 $ 113
Intel 4,036 104
Nvidia* 564 20
Teradyne* 2,792 39
-----------------------------------------------------------------------------
TOTAL SEMI-CONDUCTORS 276
=============================================================================
STEEL & STEEL WORKS [0.3%]
United States Steel 569 60
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [1.7%]
AT&T 1,121 48
Embarq 2,489 138
Verizon Communications 2,152 95
-----------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 281
=============================================================================
TRANSPORTATION SERVICES [0.0%]
Norfolk Southern 1 --
Ryder System 47 2
-----------------------------------------------------------------------------
TOTAL TRANSPORTATION SERVICES 2
=============================================================================
WEB PORTALS/ISP [0.4%]
Google, Cl A* 109 62
=============================================================================
TOTAL COMMON STOCK
(Cost $9,618) 10,456
==========================================================================
MORTGAGE-BACKED SECURITIES [12.0%]
Banc of America Alternative
Loan Trust, Ser 2005-6, Cl 7A1
5.500%, 07/25/20 $ 35 35
Bayview Financial Acquisition Trust,
Ser 2007-A, Cl 1A2
6.205%, 04/28/37 100 100
Capital One Multi-asset Execution
Trust, Ser 2006-A9, Cl A9 (A)
5.768%, 05/15/13 100 99
Chase Mortgage Finance,
Ser 2003-S14, Cl 3A6
5.500%, 01/25/34 49 49
Citicorp Mortgage Securities,
Ser 2003-11, Cl 2A8
5.500%, 12/25/33 55 55
Citicorp Mortgage Securities,
Ser 2004-4, Cl A5
5.500%, 06/25/34 76 75
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 23
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA BALANCED FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Citigroup Mortgage Loan Trust,
Ser 2005-9, Cl 2A2
5.500%, 11/25/35 $ 57 $ 57
Countrywide Alternative Loan Trust,
Ser 2005-50CB, Cl 4A1
5.000%, 11/25/20 35 34
Countrywide Alternative Loan Trust,
Ser 2005-85CB, Cl 3A1
5.250%, 02/25/21 74 73
Countrywide Alternative Loan Trust,
Ser 2006-7CB, Cl 3A1
5.250%, 05/25/21 58 58
Countrywide Asset-Backed
Certificates, Ser 2005-13,
Cl AF2 (A)
5.294%, 04/25/36 75 75
Credit-Based Asset Servicing
Home Equity, Ser 2005-CB8,
Cl AF2 (B)
5.303%, 12/25/35 75 74
Deutsche Bank Alternative
Securities, Ser 2006, Cl AR5
6.000%, 10/15/21 87 88
Discover Card Master Trust I,
Ser 2003-3, Cl A (A)
5.953%, 09/15/12 150 150
First Horizon CMO, Ser 2006-FA6,
Cl 3A1
5.750%, 11/25/21 85 85
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 99
GE Capital Commercial Mortgage,
Ser 2004-C3, Cl A4 (A)
5.189%, 07/10/39 75 74
GMAC Commercial Mortgage
Securities, Ser 2003-C1, Cl A2
4.079%, 05/10/36 100 94
GMAC Mortgage Corporation
Loan Trust, Ser 2004,
Cl HE5 (A)
4.388%, 09/25/34 75 73
GMAC Mortgage Corporation
Loan Trust, Ser 2004-GH1,
Cl A6 (A)
4.810%, 07/25/35 75 73
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
GMAC Mortgage Corporation
Loan Trust, Ser 2004-J4, Cl A2
5.500%, 08/25/14 $ 56 $ 56
JPMorgan Mortgage Trust,
Ser 2006-A7, Cl 2A4R (A)
5.500%, 01/25/37 100 100
JPMorgan Mortgage Trust,
Ser 2007-A2, Cl 2A3 (A)
5.732%, 04/25/37 100 101
RAAC, Ser 2004-SP1, Cl AI4 (A)
5.285%, 08/25/27 75 73
Residential Accredit Loans,
Ser 2004-QS5, Cl A5
4.750%, 04/25/34 24 23
Residential Accredit Loans,
Ser 2004-QS6, Cl A1
5.000%, 05/25/19 27 27
Residential Funding Mortgage
Securities, Ser 2003-S11, Cl A2
4.000%, 06/25/18 75 71
-----------------------------------------------------------------------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $2,044) 2,023
=========================================================================
U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS [8.0%]
FHLMC Gold, Pool C90691
5.500%, 07/01/23 48 47
FHLMC Gold, Pool G0182
6.000%, 05/01/35 83 83
FHLMC REMIC, Ser 2673, Cl NC
5.500%, 05/15/21 75 76
FHLMC REMIC, Ser R007, Cl AC
5.875%, 05/15/16 73 73
FHLMC, Pool G11771
6.000%, 06/01/20 67 68
FHLMC, Ser 2578 PD
5.000%, 08/15/14 50 50
FNMA, Pool 254800
5.500%, 07/01/23 357 353
FNMA, Pool 256171
6.000%, 03/01/26 203 204
FNMA, Pool 725773
5.500%, 09/01/34 116 114
FNMA, Pool 735228
5.500%, 02/01/35 50 49
FNMA, Pool 790108
6.000%, 08/01/34 60 60
FNMA, Ser 2003, Cl 18
5.000%, 03/25/16 80 80
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 24
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA BALANCED FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FNMA, Ser 2003, Cl 31
4.500%, 12/25/28 $ 51 $ 51
FNMA, Ser 2004-W10, Cl A24
5.000%, 08/25/34 50 50
-----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED OBLIGATIONS
(Cost $1,366) 1,358
=========================================================================
CORPORATE BONDS [6.1%]
AGRICULTURE [0.1%]
Bunge NA Finance
5.900%, 04/01/17 25 24
=============================================================================
BANKS [1.4%]
AmSouth Bancorporation
6.750%, 11/01/25 50 51
Bankers Trust
7.500%, 11/15/15 25 28
Compass Bank
8.100%, 08/15/09 50 53
Dresdner Bank - New York
7.250%, 09/15/15 50 54
PNC Funding
7.500%, 11/01/09 50 53
-----------------------------------------------------------------------------
TOTAL BANKS 239
=============================================================================
BUILDING & CONSTRUCTION [0.6%]
American Standard
7.375%, 02/01/08 50 50
Hanson Australia Funding
5.250%, 03/15/13 50 48
-----------------------------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 98
=============================================================================
CONTAINERS & PACKAGING [0.3%]
Pactiv
7.950%, 12/15/25 50 54
=============================================================================
ENERGY [0.9%]
Dominion Resources, Ser B
6.250%, 06/30/12 30 31
Exelon Generation
6.950%, 06/15/11 50 52
Pacific Gas & Electric
6.050%, 03/01/34 25 25
PSI Energy
7.850%, 10/15/07 50 50
-----------------------------------------------------------------------------
TOTAL ENERGY 158
=============================================================================
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
FINANCIAL SERVICES [0.4%]
Countrywide Financial
6.250%, 05/15/16 $ 25 $ 22
Household Finance
8.000%, 07/15/10 40 43
-----------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 65
=============================================================================
FOOD, BEVERAGE & TOBACCO [0.1%]
Quaker Oats, Ser B, MTN
9.250%, 11/27/07 25 25
=============================================================================
INSURANCE [0.6%]
MetLife
6.500%, 12/15/32 50 52
Protective Life
4.300%, 06/01/13 50 47
-----------------------------------------------------------------------------
TOTAL INSURANCE 99
=============================================================================
INVESTMENT BANKER/BROKER DEALER [0.3%]
Lehman Brothers Holdings
6.500%, 07/19/17 50 51
=============================================================================
MANUFACTURING [0.2%]
Tyco International Group
6.375%, 10/15/11 25 26
=============================================================================
PAPER & PAPER PRODUCTS [0.4%]
Westvaco
9.750%, 06/15/20 50 59
=============================================================================
PETROLEUM & FUEL PRODUCTS [0.2%]
Pemex Project Funding Master Trust
9.125%, 10/13/10 25 28
=============================================================================
REAL ESTATE INVESTMENT TRUST [0.1%]
Masco
6.125%, 10/03/16 25 24
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [0.5%]
Deutsche Telekom International
Finance
8.250%, 06/15/30 25 30
GTE
6.840%, 04/15/18 25 27
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 25
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA BALANCED FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
New Cingular Wireless Services
8.750%, 03/01/31 $ 25 $ 32
-----------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 89
=============================================================================
TOTAL CORPORATE BONDS
(Cost $1,038) 1,039
=========================================================================
U.S. TREASURY OBLIGATION [5.9%]
U.S.Treasury Bonds
9.125%, 05/15/18 100 137
6.250%, 08/15/23 (D) 750 861
-----------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(Cost $1,003) 998
=========================================================================
COMMERCIAL PAPER [2.3%]
Neptune Funding (E) (F)
6.250%, 10/01/07 388 388
=============================================================================
TOTAL COMMERCIAL PAPER
(Cost $388) 388
=========================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS [2.4%]
FNMA (D)
6.000%, 05/15/11 225 236
5.500%, 04/01/36 172 169
-----------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $400) 405
=========================================================================
ASSET-BACKED SECURITIES [0.6%]
Residential Asset Securities,
Ser 2002-RS3, Cl AI5 (A)
5.572%, 06/25/32 93 93
Residential Asset Securities,
Ser 2004-KS5, Cl AI3 (A)
4.030%, 04/25/30 8 7
-----------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(Cost $103) 100
=========================================================================
FOREIGN GOVERNMENT BONDS [0.4%]
Hydro-Quebec, Ser FU
11.750%, 02/01/12 50 63
=============================================================================
TOTAL FOREIGN GOVERNMENT BONDS
(Cost $64) 63
=========================================================================
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
MUNICIPAL BOND [0.1%]
LOUISIANA [0.1%]
Louisiana State, Tobacco Settlement
Financing Authority, Ser 2001A
6.360%, 05/15/25 $ 20 $ 20
=============================================================================
TOTAL MUNICIPAL BOND
(Cost $21) 20
=========================================================================
FLOATING RATE NOTES [5.1%]
Sigma Finance (A) (E)
5.020%, 01/24/08 858 858
-----------------------------------------------------------------------------
TOTAL FLOATING RATE NOTES
(Cost $858) 858
=========================================================================
CASH EQUIVALENTS [2.6%]
AIM Short-Term Investment
Company Liquid Assets
Portfolio, 5.190% (C) (E) 60,628 61
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 5.25% (C) 370,754 371
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $432) 432
=========================================================================
TOTAL INVESTMENTS [107.4%]
(Cost $17,335) $ 18,140
=========================================================================
PERCENTAGES ARE BASED ON NET ASSETS OF $16,885.
* NON-INCOME PRODUCING SECURITY
(A) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF
INVESTMENTS IS THE RATE IN EFFECT ON SEPTEMBER 30, 2007.
(B) STEP BOND -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS IS THE RATE
IN EFFECT ON SEPTEMBER 30, 2007. THE COUPON ON A STEP BOND CHANGES ON A
SPECIFIC DATE.
(C) RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2007.
(D) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT
SEPTEMBER 30, 2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT SEPTEMBER 30,
2007 WAS $1,263,254.
(E) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING. THE TOTAL VALUE OF SUCH SECURITIES AT SEPTEMBER 30, 2007 WAS
$1,307,335.
(F) RATE SHOWN IS THE DISCOUNT RATE AS OF SEPTEMBER 30, 2007.
CL -- CLASS
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
ISP -- INTERNET SERVICE PROVIDER
MTN -- MEDIUM TERM NOTE
NA -- NATIONAL ASSOCIATION
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 26
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA DIVERSIFIED EQUITY FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
19.6% Financials
14.4% Information Technology
11.8% Energy
11.2% HealthCare
9.9% Industrials
9.1% Consumer Discretionary
6.9% Consumer Staples
4.6% Materials
4.6% Telecommunication Services
2.9% Utilities
2.7% Cash Equivalents+
1.6% Floating Rate Notes+
0.7% Commercial Paper+
*Percentages based on total investments.
+Percentages include cash collateral for securities on loan.
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [97.5%]
ADVERTISING [0.5%]
CBS, Cl B 18,800 $ 592
=============================================================================
AEROSPACE & DEFENSE [1.3%]
Lockheed Martin 9,052 982
Raytheon 7,700 491
-----------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 1,473
=============================================================================
AIR TRANSPORTATION [0.8%]
FedEx 8,000 838
=============================================================================
APPAREL/TEXTILES [0.1%]
Polo Ralph Lauren 948 74
VF 556 45
-----------------------------------------------------------------------------
TOTAL APPAREL/TEXTILES 119
=============================================================================
AUTOMOTIVE [1.7%]
Autozone* 2,590 301
Ford Motor 4,798 41
Honda Motor, ADR 21,500 717
Paccar 9,435 804
-----------------------------------------------------------------------------
TOTAL AUTOMOTIVE 1,863
=============================================================================
BANKS [5.8%]
Bank of America 49,943 2,511
International Bancshares 10,450 227
JPMorgan Chase 44,259 2,028
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
PNC Financial Services
Group 5,860 $ 399
US Bancorp 23,000 748
Wachovia 11,988 601
-----------------------------------------------------------------------------
TOTAL BANKS 6,514
=============================================================================
BIOMEDICAL RESEARCH & PRODUCTS [0.7%]
Celgene* 1,516 108
Quest Diagnostic 11,100 641
-----------------------------------------------------------------------------
TOTAL BIOMEDICAL RESEARCH & PRODUCTS 749
=============================================================================
BIOTECHNOLOGY [0.4%]
Amgen* 4,392 248
Biogen Idec* 1,155 77
Gilead Sciences* 3,742 153
Millipore* 188 14
-----------------------------------------------------------------------------
TOTAL BIOTECHNOLOGY 492
=============================================================================
BROADCASTING & CABLE [1.4%]
Motorola 16,500 306
Nokia, ADR 23,500 891
Qualcomm 7,496 317
-----------------------------------------------------------------------------
TOTAL BROADCASTING & CABLE 1,514
=============================================================================
BUILDING & CONSTRUCTION [0.1%]
USG (A)* 4,200 158
=============================================================================
BUSINESS SERVICES [1.3%]
Convergys* 9,434 164
eBay* 3,774 147
Xerox* 68,266 1,184
-----------------------------------------------------------------------------
TOTAL BUSINESS SERVICES 1,495
=============================================================================
CHEMICALS [0.9%]
Dow Chemical 6,452 278
Eastman Chemical 3,898 260
Hercules* 11,466 241
Rohm & Haas 4,800 267
-----------------------------------------------------------------------------
TOTAL CHEMICALS 1,046
=============================================================================
COMMERCIAL BANKS [0.8%]
Bank of New York Mellon 21,320 941
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 27
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA DIVERSIFIED EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMUNICATION & MEDIA [3.1%]
Cisco Systems* 29,200 $ 967
DIRECTV Group* 15,739 382
Time Warner 117,311 2,154
-----------------------------------------------------------------------------
TOTAL COMMUNICATION & MEDIA 3,503
=============================================================================
COMPUTER SYSTEM DESIGN & SERVICES [0.8%]
Lexmark International, Cl A* 2,134 89
Seagate Technology 21,000 537
Sun Microsystems (A)* 55,000 308
-----------------------------------------------------------------------------
TOTAL COMPUTER SYSTEM DESIGN & SERVICES 934
=============================================================================
COMPUTERS & PERIPHERALS [0.1%]
EMC* 5,142 107
=============================================================================
COMPUTERS-HARDWARE [5.4%]
Apple* 8,592 1,319
Dell* 23,000 635
Hewlett-Packard 53,541 2,666
IBM 12,226 1,440
-----------------------------------------------------------------------------
TOTAL COMPUTERS-HARDWARE 6,060
=============================================================================
COMPUTERS-SOFTWARE [1.7%]
Microsoft 20,508 604
Oracle* 60,554 1,311
-----------------------------------------------------------------------------
TOTAL COMPUTERS-SOFTWARE 1,915
=============================================================================
CONSUMER PRODUCTS & SERVICES [1.0%]
Kimberly-Clark 4,400 309
Mattel 20,900 490
Procter & Gamble 4,615 325
-----------------------------------------------------------------------------
TOTAL CONSUMER PRODUCTS & SERVICES 1,124
=============================================================================
CONTAINERS & PACKAGING [0.5%]
Pactiv* 19,791 567
=============================================================================
DIVERSIFIED MANUFACTURING [4.1%]
Danaher 5,047 417
General Electric 85,714 3,549
Parker Hannifin 5,300 593
-----------------------------------------------------------------------------
TOTAL DIVERSIFIED MANUFACTURING 4,559
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
DIVERSIFIED METALS & MINING [0.7%]
Freeport-McMoran Copper &
Gold, Cl B 7,949 $ 834
=============================================================================
DRUG STORES [0.6%]
Rite Aid (A)* 137,500 635
=============================================================================
DRUGS [5.2%]
Abbott Laboratories 10,700 574
Johnson & Johnson 26,175 1,720
Merck 9,361 484
Pfizer 59,321 1,449
Schering-Plough 19,300 610
Wyeth 23,721 1,057
-----------------------------------------------------------------------------
TOTAL DRUGS 5,894
=============================================================================
ELECTRICAL COMPONENTS-MISCELLANEOUS [0.2%]
Tyco Electronics* 6,750 239
=============================================================================
ELECTRICAL SERVICES [1.4%]
DTE Energy 8,316 403
Duke Energy 16,144 302
Portland General Electric 31,100 864
-----------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 1,569
=============================================================================
ENERGY [1.6%]
Edison International 15,269 846
Entergy 5,781 626
PG&E 7,128 341
-----------------------------------------------------------------------------
TOTAL ENERGY 1,813
=============================================================================
ENGINEERING SERVICES [0.3%]
Fluor 2,171 313
=============================================================================
ENTERTAINMENT & GAMING [0.4%]
Carnival, Cl A 9,382 454
=============================================================================
FINANCIAL SERVICES [6.2%]
American Capital Strategies (A) 20,361 870
American Express 15,577 925
Capital One Financial 13,000 864
CIT Group 29,836 1,199
Citigroup 39,268 1,833
Nasdaq Stock Market* 18,400 693
Western Union 27,600 579
-----------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 6,963
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 28
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA DIVERSIFIED EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO [4.9%]
Coca-Cola Enterprises 24,100 $ 584
Conagra Foods 35,000 914
Dean Foods 26,354 674
Del Monte Foods 49,500 520
General Mills 22,024 1,277
Kellogg Company 3,619 203
Pepsi Bottling Group 8,228 306
Safeway 31,798 1,053
-----------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 5,531
=============================================================================
GAS/NATURAL GAS [0.8%]
El Paso 52,200 886
=============================================================================
HEALTHCARE PRODUCTS & SERVICES [3.7%]
Applera - Applied Biosystems
Group 20,965 726
Cardinal Health 20,259 1,267
Cigna 6,174 329
Humana* 12,413 868
UnitedHealth Group 20,735 1,004
-----------------------------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 4,194
=============================================================================
INSURANCE [7.3%]
ACE 3,434 208
Aetna 2,033 110
Allstate (A) 25,623 1,465
American International Group 16,650 1,126
Chubb 18,548 995
Hartford Financial Services
Group 6,791 629
HCC Insurance 31,300 896
ING Groep, ADR 10,800 479
Lincoln National 2,104 139
Marsh & Mclennan 22,000 561
Mercury General 7,700 415
Travelers 8,200 413
UnumProvident 22,000 538
XL Capital, Cl A 2,721 216
-----------------------------------------------------------------------------
TOTAL INSURANCE 8,190
=============================================================================
INVESTMENT BANKER/BROKER DEALER [0.1%]
Franklin Resources 396 51
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
MACHINERY [1.4%]
Caterpillar 12,535 $ 983
Cummins 37 5
Deere 1,609 239
Eaton 3,212 318
-----------------------------------------------------------------------------
TOTAL MACHINERY 1,545
=============================================================================
MEDICAL PRODUCTS & SERVICES [1.1%]
Baxter International 4,300 242
Becton Dickinson 7,933 651
Genzyme-General Division* 1,029 64
Wellpoint* 2,991 236
Zimmer Holdings* 1,131 91
-----------------------------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 1,284
=============================================================================
METALS & MINING [1.0%]
Barrick Gold 27,600 1,112
=============================================================================
MISCELLANEOUS MANUFACTURING [1.0%]
Covidien 6,750 280
Tyco International 19,956 885
-----------------------------------------------------------------------------
TOTAL MISCELLANEOUS MANUFACTURING 1,165
=============================================================================
MULTI-MEDIA [0.9%]
Walt Disney 29,632 1,019
=============================================================================
OFFICE FURNITURE & FIXTURES [0.9%]
3M 4,500 421
Symantec* 31,375 608
-----------------------------------------------------------------------------
TOTAL OFFICE FURNITURE & FIXTURES 1,029
=============================================================================
PAPER & RELATED PRODUCTS [0.6%]
Packaging Corp of America 15,500 451
Sealed Air 9,700 248
-----------------------------------------------------------------------------
TOTAL PAPER & RELATED PRODUCTS 699
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 29
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA DIVERSIFIED EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
PETROLEUM & FUEL PRODUCTS [10.4%]
Anadarko Petroleum 16,400 $ 881
Apache 4,082 368
Ashland 13,096 788
Chesapeake Energy 29,792 1,050
ChevronTexaco 19,711 1,845
ConocoPhillips 26,059 2,287
Ensco International 545 31
Exxon Mobil 16,674 1,543
Marathon Oil 12,886 735
Nabors Industries* 22,200 683
Unit* 14,000 678
Valero Energy 12,669 851
-----------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 11,740
=============================================================================
PETROLEUM REFINING [0.8%]
Hess 13,290 884
=============================================================================
PETROLEUM EXPLORATION [0.8%]
GlobalSantaFe 12,000 912
=============================================================================
RAILROADS [0.4%]
CSX 9,263 396
=============================================================================
REAL ESTATE INVESTMENT TRUSTS [0.6%]
Boston Properties 1,565 162
Prologis Trust 7,863 522
-----------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS 684
=============================================================================
RETAIL [3.7%]
Amazon.com* 52 5
Big Lots* 22,292 665
Home Depot 1,529 50
JC Penney 287 18
Kroger 16,349 466
Lowe's 12,945 363
Mcdonald's 13,456 733
Radioshack 8,782 181
Sherwin Williams 618 41
Staples 24,850 534
TJX 203 6
Wal-Mart Stores 16,743 731
Zale* 15,000 347
-----------------------------------------------------------------------------
TOTAL RETAIL 4,140
=============================================================================
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
RUBBER & PLASTIC [0.1%]
Apollo Group, Cl A* 857 $ 52
=============================================================================
SEMI-CONDUCTORS [1.7%]
Applied Materials 35,599 737
Atmel* 73,000 377
Intel 17,294 447
Novellus Systems* 694 19
Nvidia* 4,964 180
Teradyne* 14,429 199
-----------------------------------------------------------------------------
TOTAL SEMI-CONDUCTORS 1,959
=============================================================================
STEEL & STEEL WORKS [0.2%]
United States Steel 2,572 272
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [5.8%]
AT&T 28,334 1,199
Embarq 13,133 730
Idearc* 39,375 1,239
Sprint Nextel 50,100 952
Verizon Communications 48,486 2,147
Windstream 20,000 282
-----------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 6,549
=============================================================================
TRANSPORTATION SERVICES [0.0%]
Ryder System 243 12
=============================================================================
WEB PORTALS/ISP [0.2%]
Google, Cl A* 322 182
Juniper Networks* 1,375 50
-----------------------------------------------------------------------------
TOTAL WEB PORTALS/ISP 232
=============================================================================
TOTAL COMMON STOCK
(Cost $99,999) 109,814
=========================================================================
COMMERCIAL PAPER [0.7%]
Neptune Funding (B) (E)
6.250%, 10/01/07 $ 837 837
-----------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $837) 837
=========================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 30
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA DIVERSIFIED EQUITY FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
FLOATING RATE NOTES [1.6%]
Sigma Finance (B) (D)
5.020%, 01/24/08 $ 1,855 $ 1,855
-----------------------------------------------------------------------------
TOTAL FLOATING RATE NOTES
(Cost $1,855) 1,855
=========================================================================
CASH EQUIVALENTS [2.8%]
AIM Short-Term Investment
Company Liquid Assets
Portfolio, 5.190% (B) (C) 130,910 131
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 5.25% (C) 2,968,828 2,969
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $3,100) 3,100
=========================================================================
TOTAL INVESTMENTS [102.6%]
(Cost $105,791) $ 115,606
=========================================================================
PERCENTAGES ARE BASED ON NET ASSETS OF $112,632.
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT
SEPTEMBER 30, 2007. THE TOTAL VALUE OF SECURITIES ON LOAN AT SEPTEMBER 30,
2007 WAS $2,716,791.
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING. THE TOTAL VALUE OF SUCH SECURITIES AT SEPTEMBER 30, 2007 WAS
$2,822,845.
(C) THE RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2007.
(D) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF
INVESTMENTS IS THE RATE IN EFFECT ON SEPTEMBER 30,2007.
(E) RATE SHOWN IS THE DISCOUNT RATE AS OF SEPTEMBER 30, 2007.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
ISP -- INTERNET SERVICE PROVIDER
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 31
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA SOCIALLY RESPONSIBLE EQUITY FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
16.9% Financials
14.9% HealthCare
13.5% Information Technology
9.1% Energy
8.9% Consumer Discretionary
7.3% Industrials
6.7% Consumer Staples
5.6% Materials
4.8% Cash Equivalents+
4.8% Utilities
4.7% Telecommunication Services
1.9% Floating Rate Notes+
0.9% Commercial Paper+
*Percentages based on total investments.
+Percentages include cash collateral for securities on loan.
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCK [95.0%]
ADVERTISING [1.9%]
CBS, Cl B 34,500 $ 1,087
=============================================================================
AUTOMOTIVE [2.4%]
Honda Motor, ADR 41,900 1,398
=============================================================================
BANKS [3.6%]
International Bancshares 54,057 1,173
National City (A) 36,100 906
-----------------------------------------------------------------------------
TOTAL BANKS 2,079
=============================================================================
BIOMEDICAL RESEARCH & PRODUCTS [2.3%]
Quest Diagnostic 22,500 1,300
=============================================================================
BROADCASTING & CABLE [4.6%]
Motorola 66,000 1,223
Nokia, ADR 37,000 1,403
-----------------------------------------------------------------------------
TOTAL BROADCASTING & CABLE 2,626
=============================================================================
BUSINESS SERVICES [3.0%]
Xerox* 100,400 1,741
=============================================================================
CHEMICALS [2.5%]
Rohm & Haas 26,100 1,453
=============================================================================
CABLE/MEDIA [2.8%]
Time Warner 88,500 1,625
=============================================================================
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMPUTER SYSTEM DESIGN & SERVICES [2.1%]
Sun Microsystems (A)* 212,000 $ 1,189
=============================================================================
DATA PROCESSING [2.1%]
Hewlett-Packard 23,500 1,170
=============================================================================
CONSUMER PRODUCTS & SERVICES [3.0%]
Kimberly-Clark 24,000 1,686
=============================================================================
DRUGS [7.9%]
Abbott Laboratories 25,300 1,356
Johnson & Johnson 27,000 1,774
Schering-Plough 44,600 1,411
-----------------------------------------------------------------------------
TOTAL DRUGS 4,541
=============================================================================
ELECTRICAL SERVICES [5.4%]
Emerson Electric 36,900 1,964
Portland General Electric 41,000 1,140
-----------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 3,104
=============================================================================
ENERGY [2.9%]
Atmos Energy 59,500 1,685
=============================================================================
FINANCIAL SERVICES [7.2%]
CIT Group 20,200 812
Citigroup 28,000 1,307
NASDAQ Stock Market* 53,500 2,016
-----------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 4,135
=============================================================================
FOOD, BEVERAGE & TOBACCO [4.0%]
Del Monte Foods 95,000 997
Supervalu 32,600 1,272
-----------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 2,269
=============================================================================
HEALTHCARE PRODUCTS & SERVICES [4.1%]
Applera - Applied Biosystems
Group 41,000 1,420
Cardinal Health 15,000 938
-----------------------------------------------------------------------------
TOTAL HEALTHCARE PRODUCTS & SERVICES 2,358
=============================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 32
schedule of investments
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA SOCIALLY RESPONSIBLE EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
INSURANCE [6.6%]
American International Group 15,000 $ 1,015
Marsh & Mclennan 67,000 1,709
Mercury General 19,200 1,035
-----------------------------------------------------------------------------
TOTAL INSURANCE 3,759
=============================================================================
METALS & MINING [2.1%]
Worthington Industries 52,000 1,225
=============================================================================
MISCELLANEOUS MANUFACTURING [3.0%]
Covidien 14,375 597
Tyco International 25,375 1,125
-----------------------------------------------------------------------------
TOTAL MISCELLANEOUS MANUFACTURING 1,722
=============================================================================
OFFICE FURNITURE & FIXTURES [2.1%]
3M 12,800 1,198
=============================================================================
PAPER & PAPER PRODUCTS [1.1%]
Packaging Corp of America 22,000 640
=============================================================================
PETROLEUM & FUEL PRODUCTS [9.4%]
Chesapeake Energy 59,800 2,109
Patterson - UTI Energy 74,000 1,670
Unit* 32,500 1,573
-----------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 5,352
=============================================================================
PRINTING & PUBLISHING [1.9%]
Thomson 26,100 1,094
=============================================================================
SEMI-CONDUCTORS/INSTRUMENTS [2.2%]
Intel 47,500 1,228
=============================================================================
TELEPHONES & TELECOMMUNICATIONS [4.8%]
Embarq 10,800 600
Sprint Nextel (A) 83,000 1,577
Windstream 40,000 565
-----------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 2,742
=============================================================================
TOTAL COMMON STOCK
(Cost $49,073) 54,406
========================================================================
FACE AMOUNT (000)/
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER [0.9%]
Neptune Funding (B) (E)
6.250%, 10/01/07 $ 513 $ 513
-----------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $513) 513
========================================================================
FLOATING RATE NOTES [2.0%]
Sigma Finance (B) (D)
5.020%, 01/24/08 1,137 1,137
-----------------------------------------------------------------------------
TOTAL FLOATING RATE NOTES
(Cost $1,137) 1,137
========================================================================
CASH EQUIVALENTS [5.0%]
AIM Short-Term Investment
Company Liquid Assets
Portfolio, 5.190% (B) (C) 80,230 80
Fidelity Institutional Domestic
Money Market Portfolio,
Cl I, 5.25% (C) 2,770,395 2,770
-----------------------------------------------------------------------------
TOTAL CASH EQUIVALENTS
(Cost $2,850) 2,850
========================================================================
TOTAL INVESTMENTS [102.9%]
(Cost $53,573) $ 58,906
========================================================================
PERCENTAGES ARE BASED ON NET ASSETS OF $57,231.
* NON-INCOME PRODUCING SECURITY
(A) THIS SECURITY OR A PARTIAL POSITION OF THIS SECURITY IS ON LOAN AT
SEPTEMBER 30, 2007. THE TOTAL VALUE OF SUCH SECURITIES AT SEPTEMBER 30,
2007 WAS $1,641,830.
(B) THIS SECURITY WAS PURCHASED WITH CASH COLLATERAL RECEIVED FROM SECURITIES
LENDING. THE VALUE OF SUCH SECURITIES AT SEPTEMBER 30, 2007 WAS
$1,730,022.
(C) THE RATE SHOWN IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2007.
(D) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF
INVESTMENTS IS THE RATE IN EFFECT ON SEPTEMBER 30, 2007.
(E) RATE SHOWN IS THE DISCOUNT RATE AS OF SEPTEMBER 30, 2007.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 33
This page intentionally left blank.
statements of assets and liabilities (000)
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA AHA AHA
Limited Full AHA Socially
Maturity Maturity AHA Diversified Responsible
Fixed Income Fixed Income Balanced Equity Equity
Fund Fund Fund Fund Fund
-----------------------------------------------------------------------------
ASSETS:
Cost of securities $ 48,167 $ 46,443 $ 17,335 $ 105,791 $ 53,573
- ------------------------------------------------------------------------------------------------------------------------------------
Investments in securities at value $ 48,248(1) $ 46,482(2) $ 18,140(3) $ 115,606(4) $ 58,906(5)
Cash -- 3 2 10 16
Dividend and interest receivable 421 406 64 137 81
Receivable for capital shares sold 37 48 -- 1 30
Receivable for dividend tax reclaim -- -- 1 2 --
Prepaid Expenses 19 6 3 15 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets 48,725 46,945 18,210 115,771 59,037
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Obligation to return securities lending
collateral 3,858 4,436 1,307 2,823 1,730
Payable for investment securities purchased -- -- -- 138 --
Income distribution payable 151 141 -- -- --
Payable for capital shares redeemed -- -- -- 21 10
Investment adviser fees payable 18 17 10 82 30
Distribution fees payable 1 -- -- 29 --
Trustees fees payable -- -- -- 1 --
Administrative fees payable 2 2 1 4 2
Other accrued expenses 20 18 7 41 34
- ------------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 4,050 4,614 1,325 3,139 1,806
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 44,675 $ 42,331 $ 16,885 $ 112,632 $ 57,231
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Paid-in-Capital
(unlimited authorization -- $0.01 par value) $ 47,142 $ 42,700 $ 15,325 $ 91,279 $ 49,114
Undistributed net investment income 10 9 9 26 24
Accumulated net realized gain (loss) on
investments (2,558) (417) 746 11,512 2,760
Net unrealized appreciation on investments 81 39 805 9,815 5,333
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 44,675 $ 42,331 $ 16,885 $ 112,632 $ 57,231
- ------------------------------------------------------------------------------------------------------------------------------------
Institutional Class Shares ($ Dollars):
Net Assets $44,364,783 $42,095,448 $16,885,426 $102,232,288 $ 56,489,721
Total shares outstanding at end of year 4,188,229 4,143,522 1,829,799 5,531,741 4,659,778
Net asset value, offering and redemption
price per share (net assets / shares
outstanding) $ 10.59 $ 10.16 $ 9.23 $ 18.48 $ 12.12
Class A Shares ($ Dollars):
Net Assets $ 310,172 $ 235,304 n/a $ 10,399,973 $ 741,202
Total shares outstanding at end of year 29,246 23,156 n/a 561,472 61,213
Net asset value, offering and redemption
price per share (net assets / shares
outstanding) $ 10.61 $ 10.16 n/a $ 18.52 $ 12.11
(1) MARKET VALUE OF SECURITIES ON LOAN WAS $3,763,780 AS OF SEPTEMBER 30, 2007.
(2) MARKET VALUE OF SECURITIES ON LOAN WAS $4,286,033 AS OF SEPTEMBER 30, 2007.
(3) MARKET VALUE OF SECURITIES ON LOAN WAS $1,263,254 AS OF SEPTEMBER 30, 2007.
(4) MARKET VALUE OF SECURITIES ON LOAN WAS $2,716,791 AS OF SEPTEMBER 30, 2007.
(5) MARKET VALUE OF SECURITIES ON LOAN WAS $1,641,830 AS OF SEPTEMBER 30, 2007.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 35
statements of operations (000)
FOR THE YEAR ENDED SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
AHA Limited Maturity Fixed AHA Full Maturity Fixed
Income Fund Income Fund
-----------------------------------------------------
INVESTMENT INCOME:
Interest $ 2,147 $ 1,861
Dividends 38 57
Income from Securities Lending -- Net 2 3
Foreign taxes withheld -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 2,187 1,921
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 219 182
Administration Fees 23 19
Trustees' Fees and Expenses 1 1
Distribution Expense -- Class A Shares 1 1
Transfer Agent Fees and Expenses 29 23
Reports to Shareholders 14 10
Audit Fees 13 11
Custodian Fees and Expenses 6 5
Registration Fees 4 3
Legal Fees 1 1
Insurance and Other Expenses 29 13
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 340 269
- ------------------------------------------------------------------------------------------------------------------------------------
Recovery of Investment Advisory Fees
Previously Waived(1) -- 24
Less Waiver of:
Investment Advisory Fees (3) --
Transfer Agent Fees (4) (3)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Expenses 333 290
- ------------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,854 1,631
- ------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net Realized Gain (Loss) on Investments (98) (5)
Change in Net Unrealized Appreciation
(Depreciation) on Investments 239 (11)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized
Gain (Loss) on Investments 141 (16)
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 1,995 $ 1,615
====================================================================================================================================
(1) SEE NOTE 3 FOR ADVISORY FEES RECOVERED.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 36
AHA Socially Responsible
AHA Balanced Fund AHA Diversified Equity Fund Equity Fund
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 321 $ -- $ --
Dividends 263 2,226 1,147
Income from Securities Lending -- Net 1 5 5
Foreign taxes withheld -- (11) (10)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 585 2,220 1,142
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 127 832 401
Administration Fees 9 58 28
Trustees' Fees and Expenses 1 3 2
Distribution Expense -- Class A Shares -- 27 1
Transfer Agent Fees and Expenses 11 73 33
Reports to Shareholders 5 33 23
Audit Fees 6 27 19
Custodian Fees and Expenses 3 15 7
Registration Fees 1 8 4
Legal Fees -- 1 1
Insurance and Other Expenses 7 42 16
- -----------------------------------------------------------------------------------------------------------------------------------
Total Expenses 170 1,119 535
- -----------------------------------------------------------------------------------------------------------------------------------
Recovery of Investment Advisory Fees
Previously Waived(1) 1 48 --
Less Waiver of:
Investment Advisory Fees -- (2) (28)
Transfer Agent Fees (2) (10) (5)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Expenses 169 1,155 502
- -----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 416 1,065 640
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net Realized Gain (Loss) on Investments 1,759 13,160 2,822
Change in Net Unrealized Appreciation
(Depreciation) on Investments (613) (1,793) 3,077
- -----------------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized
Gain (Loss) on Investments 1,146 11,367 5,899
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $1,562 $ 12,432 $ 6,539
===================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 37
statements of changes in net assets (000)
FOR THE YEAR ENDED SEPTEMBER 30,
- --------------------------------------------------------------------------------
AHA Limited Maturity AHA Full Maturity
Fixed Income Fund Fixed Income Fund
-------------------------------------------
2007 2006(1) 2007 2006(2)
- -------------------------------------------------------------------------------------------------------
OPERATIONS:
Net Investment Income $ 1,854 $ 2,434 $ 1,631 $ 1,288
Net Realized Gain (Loss) on Investments Sold (98) (1,507) (5) (314)
Change in Net Unrealized Appreciation
(Depreciation) on Investments 239 1,235 (11) (122)
- -------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Investment Operations 1,995 2,162 1,615 852
- -------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends to Shareholders from Net Investment Income:
INSTITUTIONAL CLASS (1,846) (2,446) (1,618) (1,294)
CLASS A (11) (14) (8) (5)
Distributions to Shareholders from Net Realized Gains:
INSTITUTIONAL CLASS -- -- -- (179)
CLASS A -- -- -- (1)
- -------------------------------------------------------------------------------------------------------
Total Dividends and Distributions to Shareholders (1,857) (2,460) (1,626) (1,479)
- -------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS:
FUND SHARE TRANSACTIONS: INSTITUTIONAL CLASS
Net Proceeds from Shares Sold 2,382 667 11,258 5,099
Reinvestment of Dividends 423 1,272 533 504
Cost of Shares Redeemed (3,917) (68,684) (82) (6,345)
- -------------------------------------------------------------------------------------------------------
Total Fund Share Transactions Institutional Class (1,112) (66,745) 11,709 (742)
- -------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS: CLASS A
Net Proceeds from Shares Sold 95 167 88 13
Reinvestment of Dividends 11 14 8 6
Cost of Shares Redeemed (155) (643) (6) (5)
- -------------------------------------------------------------------------------------------------------
Total Fund Share Transactions Class A (49) (462) 90 14
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Contributions (1,161) (67,207) 11,799 (728)
- -------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (1,023) (67,505) 11,788 (1,355)
- -------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 45,698 113,203 30,543 31,898
- -------------------------------------------------------------------------------------------------------
End of period* $ 44,675 $ 45,698 $ 42,331 $ 30,543
=======================================================================================================
*Including Undistributed Net Investment Income of $ 10 $ 6 $ 9 $ 3
=======================================================================================================
(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.
(2) 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.
(3) 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.
(4) 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.
(5) 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.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 38
- --------------------------------------------------------------------------------
AHA Balanced AHA Diversified AHA Socially Responsible
Fund Equity Fund Equity Fund
- ----------------------------------------------------------------------------------------------------------------------------------
2007 2006(3) 2007 2006(4) 2007 2006(5)
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Net Investment Income $ 416 $ 327 $ 1,065 $ 871 $ 640 $ 273
Net Realized Gain (Loss) on Investments Sold 1,759 1,230 13,160 8,398 2,822 598
Change in Net Unrealized Appreciation
(Depreciation) on Investments (613) (133) (1,793) 628 3,077 1,277
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Investment Operations 1,562 1,424 12,432 9,897 6,539 2,148
- ----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends to Shareholders from Net Investment Income:
INSTITUTIONAL CLASS (425) (338) (987) (792) (623) (267)
CLASS A -- -- (77) (63) (6) (1)
Distributions to Shareholders from Net Realized Gains:
INSTITUTIONAL CLASS (2,125) (1,084) (8,054) (3,919) (654) (102)
CLASS A -- -- (860) (440) (5) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total Dividends and Distributions to Shareholders (2,550) (1,422) (9,978) (5,214) (1,288) (370)
- ----------------------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS:
FUND SHARE TRANSACTIONS: INSTITUTIONAL CLASS
Net Proceeds from Shares Sold -- -- 13,332 30,944 13,931 22,781
Reinvestment of Dividends 37 59 6,506 3,289 1,277 368
Cost of Shares Redeemed -- (577) (14,435) (25,250) (8,929) (1,713)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Fund Share Transactions Institutional Class 37 (518) 5,403 8,983 6,279 21,436
- ----------------------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS: CLASS A
Net Proceeds from Shares Sold -- -- 1,282 1,789 542 263
Reinvestment of Dividends -- -- 924 456 11 1
Cost of Shares Redeemed -- -- (3,206) (1,034) (136) (4)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Fund Share Transactions Class A -- -- (1,000) 1,211 417 260
- ----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from
Capital Share Contributions 37 (518) 4,403 10,194 6,696 21,696
- ----------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (951) (516) 6,857 14,877 11,947 23,474
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 17,836 18,352 105,775 90,898 45,284 21,810
- ----------------------------------------------------------------------------------------------------------------------------------
End of period* $ 16,885 $ 17,836 $ 112,632 $ 105,775 $ 57,231 $ 45,284
==================================================================================================================================
*Including Undistributed Net Investment Income of $ 9 $ 10 $ 26 $ 22 $ 24 $ 13
==================================================================================================================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 39
financial highlights
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE YEAR ENDED SEPTEMBER 30, (UNLESS OTHERWISE INDICATED)
- --------------------------------------------------------------------------------
NET
NET REALIZED AND NET
ASSET UNREALIZED DIVIDENDS DISTRIBUTIONS ASSET
VALUE NET GAINS (LOSSES) FROM NET FROM VALUE
BEGINNING INVESTMENT ON INVESTMENT REALIZED END
OF PERIOD INCOME(1)(3) INVESTMENTS(1)(3) INCOME GAINS OF PERIOD
- --------------------------------------------------------------------------------------------------------
AHA Limited Maturity Fixed Income Fund
Institutional Class (commenced operations on December 22,1988)
2007 $ 10.56 $ 0.45 $ 0.03 $ (0.45) $ -- $ 10.59
2006^ 10.57 0.34 0.02 (0.37) -- 10.56
For the period July 1, through September 30,
2005+ 10.61 0.06 (0.04) (0.06) -- 10.57
For the years ended June 30,
2005 10.68 0.22 (0.06) (0.22)(5) (0.01) 10.61
2004 10.86 0.18 (0.18) (0.18) -- 10.68
2003 10.65 0.28 0.21 (0.28) -- 10.86
Class A (commenced operations on October 22, 2004)
2007 $ 10.57 $ 0.42 $ 0.04 $ (0.42) $ -- $ 10.61
2006^ 10.58 0.30 0.03 (0.34) -- 10.57
For the period July 1, through September 30,
2005+ 10.62 0.05 (0.04) (0.05) -- 10.58
For the period October 22, 2004 through June 30,
2005 10.77 0.14 (0.13) (0.15)(5) (0.01) 10.62
- --------------------------------------------------------------------------------------------------------
AHA Full Maturity Fixed Income Fund
Institutional Class (commenced operations on October 20, 1988)
2007 $ 10.16 $ 0.45 $ -- $ (0.45) $ -- $ 10.16
2006^^ 10.35 0.43 (0.13) (0.43) (0.06) 10.16
For the period July 1, through September 30,
2005+ 10.50 0.09 (0.15) (0.09) -- 10.35
For the years ended June 30,
2005 10.39 0.38 0.20 (0.38) (0.09) 10.50
2004 10.87 0.36(8) (0.36) (0.39) (0.09) 10.39
2003 10.34 0.49 0.53 (0.49) -- 10.87
Class A (commenced operations on May 11, 2004)
2007 $ 10.16 $ 0.42 $ -- $ (0.42) $ -- $ 10.16
2006^^ 10.36 0.40 (0.13) (0.41) (0.06) 10.16
For the period July 1, through September 30,
2005+ 10.50 0.08 (0.14) (0.08) -- 10.36
For the year ended June 30,
2005 10.39 0.34 0.22 (0.36) (0.09) 10.50
For the period May 11, through June 30,
2004 10.32 0.04 0.09 (0.06) -- 10.39
- --------------------------------------------------------------------------------------------------------
AHA Balanced Fund
Institutional Class (commenced operations on October 20, 1988)
2007 $ 9.77 $ 0.23 $ 0.62 $ (0.23) $ (1.16) $ 9.23
2006^^^ 9.76 0.18 0.59 (0.18) (0.58) 9.77
For the period July 1, through September 30,
2005+ 9.62 0.04 0.14 (0.04) -- 9.76
For the years ended June 30,
2005 8.98 0.16 0.64 (0.16) -- 9.62
2004 8.03 0.10(8) 0.97 (0.12) -- 8.98
2003 8.03 0.11 -- (0.11) -- 8.03
RATIO RATIO
OF NET OF NET
OPERATING OPERATING RATIO
NET EXPENSES EXPENSES OF NET
ASSETS TO AVERAGE TO AVERAGE INVESTMENT
END NET ASSETS NET ASSETS INCOME PORTFOLIO
TOTAL OF PERIOD BEFORE AFTER TO AVERAGE TURNOVER
RETURN (000) WAIVERS(2)(3) WAIVERS(2)(3) NET ASSETS(2)(3) RATE(4)
- ----------------------------------------------------------------------------------------------------------
AHA Limited Maturity Fixed Income Fund
Institutional Class (commenced operations on December 22,1988)
2007 4.63% $ 44,365 0.77% 0.76% 4.25% 75.71%
2006^ 3.49 45,340 0.94 0.75 3.24 86.31
For the period July 1, through September 30,
2005+ 0.20(6) 112,381 0.88(7) 0.86(7) 2.20(7) 4.33(6)
For the years ended June 30,
2005 1.53 128,501 0.79 0.78 2.01 109.44
2004 (0.05) 159,949 0.73 0.73 1.65 97.66
2003 4.65 96,605 0.83 0.85 2.58 N/A
Class A (commenced operations on October 22, 2004)
2007 4.47% $ 310 1.02% 1.00% 3.99% 75.71%
2006^ 3.17 358 1.18 1.00 2.88 86.31
For the period July 1, through September 30,
2005+ 0.13(6) 822 1.11(7) 1.10(7) 1.95(7) 4.33(6)
For the period October 22, 2004 through June 30,
2005 0.12(6) 1,070 1.07(7) 1.03(7) 1.75(7) 109.44
- ----------------------------------------------------------------------------------------------------------
AHA Full Maturity Fixed Income Fund
Institutional Class (commenced operations on October 20, 1988)
2007 4.48% $ 42,096 0.73% 0.79%* 4.48% 54.97%
2006^^ 3.03 30,398 0.87 0.80* 4.20 91.35
For the period July 1, through September 30,
2005+ (0.57)(6) 31,764 0.83(7) 1.00(7)* 3.37(7) 17.47(6)
For the years ended June 30,
2005 5.72 31,960 0.95 1.00* 3.58 144.07
2004 0.08 28,958 0.98 1.00* 3.40 302.49
2003 10.06 31,264 1.29 1.00* 4.51 N/A
Class A (commenced operations on May 11, 2004)
2007 4.23% $ 235 0.99% 1.04%* 4.23% 54.97%
2006^^ 2.67 145 1.12 1.05* 3.95 91.35
For the period July 1, through September 30,
2005+ (0.54)(6) 134 1.08(7) 1.25(7)* 3.12(7) 17.47(6)
For the year ended June 30,
2005 5.46 134 1.20 1.25* 3.33 144.07
For the period May 11, through June 30,
2004 1.29(6) 104 1.15(7) 1.25(7)* 3.27(7) 302.49(6)
- ----------------------------------------------------------------------------------------------------------
AHA Balanced Fund
Institutional Class (commenced operations on October 20, 1988)
2007 9.47% $ 16,885 1.00% 1.00% 2.45% 127.95%
2006^^^ 8.32 17,836 1.11 1.00 1.83 73.58
For the period July 1, through September 30,
2005+ 1.87(6) 18,352 1.10(7) 0.98(7) 1.54(7) 13.53(6)
For the years ended June 30,
2005 8.97 18,088 1.25 1.20 1.69 98.60
2004 13.41 16,930 1.31 1.50 1.14 69.85
2003 1.40 18,615 1.81 1.50 1.43 N/A
+ 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.
^^ 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 MORE INFORMATION.
^^^ 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 MORE INFORMATION.
* RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES
RECOVERED. THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE
RATIO.
(1) INFORMATION PRESENTED RELATES TO A SHARE OF CAPITAL STOCK OUTSTANDING FOR
THE ENTIRE PERIOD.
(2) RATIOS INCLUDE ALL MANAGEMENT FEES AND EXPENSES.
(3) FOR THE PERIOD FROM NOVEMBER 1, 2001 THROUGH JUNE 30, 2003, THE FUND
INVESTED SUBSTANTIALLY ALL OF ITS ASSETS IN A SEPARATE SERIES OF A MUTUAL
FUND CALLED THE CCM ADVISORS FUNDS (THE "MASTER PORTFOLIO"), AND AS A
RESULT, THE PER SHARE AMOUNTS AND PERCENTAGES REFLECT INCOME AND EXPENSES
ASSUMING INCLUSION OF THE FUND'S PROPORTIONATE SHARE OF INCOME AND
EXPENSES IN THE MASTER PORTFOLIO. THE MASTER PORTFOLIO HAD SUBSTANTIALLY
SIMILAR OBJECTIVES, STRATEGIES AND POLICIES AS THE FUND.
(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.
(5) INCLUDES A TAX RETURN OF CAPITAL WHICH IS LESS THAN $0.01 PER SHARE, FOR
THE FUND FOR THE YEAR ENDED JUNE 30, 2005.
(6) NOT ANNUALIZED.
(7) ANNUALIZED.
(8) NET INVESTMENT INCOME PER SHARE IS CALCULATED USING ENDING BALANCES PRIOR
TO CONSIDERATION OF ADJUSTMENTS FOR PERMANENT BOOK AND TAX DIFFERENCES.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 40
NET
REALIZED AND
NET UNREALIZED NET
ASSET GAINS DIVIDENDS DISTRIBUTIONS ASSET
VALUE NET (LOSSES) FROM NET FROM VALUE
BEGINNING INVESTMENT ON INVESTMENT REALIZED END
OF PERIOD INCOME(3) INVESTMENTS(3) INCOME GAINS OF PERIOD
- -----------------------------------------------------------------------------------------------
AHA Diversified Equity Fund
Institutional Class (commenced operations on October 20, 1988)
2007 $ 18.17 $ 0.18 $ 1.89 $ (0.18) $ (1.58) $ 18.48
2006^ 17.42 0.15 1.55 (0.15) (0.80) 18.17
For the period July 1, through September 30,
2005+ 16.79 0.02 0.63 (0.02) -- 17.42
For the years ended June 30,
2005 15.39 0.13 1.40 (0.13) -- 16.79
2004 12.74 0.10 2.65 (0.10) -- 15.39
2003 13.08 0.08(3) (0.34)(3) (0.08) -- 12.74
Class A (commenced operations on December 30, 2002)
2007 $ 18.21 $ 0.13(8) $ 1.89 $ (0.13) $ (1.58) $ 18.52
2006^ 17.46 0.11 1.55 (0.11) (0.80) 18.21
For the period July 1, through September 30,
2005+ 16.83 0.01 0.63 (0.01) -- 17.46
For the years ended June 30,
2005 15.43 0.09 1.40 (0.09) -- 16.83
2004 12.75 0.06 2.65 (0.03) -- 15.43
For the period December 30, 2002, through June 30,
2003 11.48 0.03(7) 1.26(7) (0.02) -- 12.75
- -----------------------------------------------------------------------------------------------
AHA Socially Responsible Equity Fund
Institutional Class (commenced operations on January 3, 2005)
2007 $ 10.91 $ 0.14 $ 1.36 $ (0.14) $ (0.15) $ 12.12
2006^^ 10.28 0.12 0.67 (0.11) (0.05) 10.91
For the period July 1, through September 30,
2005+ 9.70 0.02 0.58 (0.02) -- 10.28
For the period January 3, through June 30,
2005 10.00 0.05 (0.30) (0.05) -- 9.70
Class A (commenced operations on August 12, 2005)
2007 $ 10.90 $ 0.12 $ 1.36 $ (0.11) $ (0.16) $ 12.11
2006^^ 10.28 0.09 0.67 (0.09) (0.05) 10.90
For the period August 12, through September 30,
2005 10.17 0.01 0.12 (0.02) -- 10.28
RATIO RATIO
OF NET OF NET
OPERATING OPERATING RATIO
NET EXPENSES EXPENSES OF NET
ASSETS TO AVERAGE TO AVERAGE INVESTMENT
END NET ASSETS NET ASSETS INCOME PORTFOLIO
TOTAL OF PERIOD BEFORE AFTER TO AVERAGE TURNOVER
RETURN (000) WAIVERS(2)(3) WAIVERS(2)(3) NET ASSETS(2)(3) RATE(4)
- ---------------------------------------------------------------------------------------------------------------
AHA Diversified Equity Fund
Institutional Class (commenced operations on October 20, 1988)
2007 11.93% $ 102,232 0.99% 1.02% 0.98% 115.99%
2006^ 10.16 94,653 1.09 1.01 0.87 99.16
For the period July 1, through September 30,
2005+ 3.88(5) 81,447 1.08(6) 1.13(6) 0.46(6) 20.08(5)
For the years ended June 30,
2005 9.95 81,510 1.07 1.05 0.78 128.37
2004 21.60 68,068 1.02 1.02 0.67 97.51
2003 (1.98) 55,564 1.18(3) 1.18(3) 0.61(3) N/A
Class A (commenced operations on December 30, 2002)
2007 11.62% $ 10,400 1.24% 1.27% 0.73% 115.99%
2006^ 9.87 11,122 1.34 1.26 0.62 99.16
For the period July 1, through September 30,
2005+ 3.81(5) 9,451 1.34(6) 1.38(6) 0.20(6) 20.08(5)
For the years ended June 30,
2005 9.66 8,842 1.32 1.30 0.53 128.37
2004 21.24 7,392 1.27 1.27 0.42 97.51
For the period December 30, 2002, through June 30,
2003 11.26(5) 6,454 1.45(6)(7) 1.45(6)(7) 0.48(6)(7) N/A
- ---------------------------------------------------------------------------------------------------------------
AHA Socially Responsible Equity Fund
Institutional Class (commenced operations on January 3, 2005)
2007 13.89% $ 56,490 1.00% 0.94%* 1.19% 29.38%
2006^^ 7.69 45,003 1.12 1.04* 1.10 28.57
For the period July 1, through September 30,
2005+ 6.20(5) 21,795 1.24(6) 1.15(6)* 0.90(6) 6.89(5)
For the period January 3, through June 30,
2005 (2.48)(5) 20,510 1.16(6) 1.12(6)* 1.43(6) 47.56(5)
Class A (commenced operations on August 12, 2005)
2007 13.64% $ 741 1.25% 1.19%* 0.94% 29.38%
2006^^ 7.40 281 1.37 1.29* 0.80 28.57
For the period August 12, through September 30,
2005 1.27(5) 15 1.69(6) 1.43(6)* 0.74(6) 6.89(5)
+ 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 MORE
INFORMATION.
^^ 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 MORE INFORMATION.
* RATIO INCLUDES WAIVERS AND PREVIOUSLY WAIVED INVESTMENT ADVISORY FEES
RECOVERED. THE IMPACT OF THE RECOVERED FEES MAY CAUSE A HIGHER NET EXPENSE
RATIO.
(1) INFORMATION PRESENTED RELATES TO A SHARE OF CAPITAL STOCK OUTSTANDING FOR
THE ENTIRE PERIOD.
(2) RATIOS INCLUDE ALL MANAGEMENT FEES AND EXPENSES.
(3) 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.
(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.
(5) NOT ANNUALIZED.
(6) ANNUALIZED.
(7) 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.
(8) PER SHARE CALCULATIONS ARE BASED ON THE AVERAGE SHARES OUTSTANDING
THROUGHOUT THE PERIOD.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 41
notes to financial statements
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
1. ORGANIZATION
The AHA Investment Funds (the "AHA Funds") are 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"), and the AHA
Socially Responsible Equity Fund (the "Socially Responsible Fund") (each a
"Fund" and, collectively, the "Funds"). The shares of common stock of the Funds
are divided into two classes: Class A Shares and Institutional Class Shares. As
of September 30, 2007, only the Institutional Class Shares of the 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 Adviser for
reorganization related expenses were incurred and paid by the Funds. These
amounts are subject to recapture within the next three fiscal years.
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 U.S. requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
increases and decreases in net assets from operations during the reporting
period. Actual results could differ from 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 traded on NASDAQ, the NASDAQ Official Closing Price is 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.
AHA INVESTMENT FUNDS | PAGE 42
- --------------------------------------------------------------------------------
Securities for which market prices are not "readily available" are valued in
accordance with Fair Value Procedures established by the Funds' Board of
Trustees. 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; for international securities, market events
occur after the close of the foreign markets that make closing prices not
representative of fair values; 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. The Funds held no fair valued securities as of September 30, 2007.
SECURITY TRANSACTIONS AND RELATED INCOME - Security transactions are accounted
for on the trade date of the security purchase or sale. Costs used in
determining net realized capital gains and losses on the sale of securities are
those of the specific securities sold. Interest income is recognized on the
accrual basis and dividend income is recognized on the ex-dividend date.
Purchase discounts and premiums on securities held by the Funds are accreted and
amortized to maturity using the scientific method.
REPURCHASE AGREEMENTS - Securities pledged as collateral for repurchase
agreements are held by each Fund's custodian bank until maturity of the
repurchase agreements. Provisions of the agreements and procedures adopted by
the investment adviser require that the market value of the collateral,
including accrued interest thereon, be sufficient in the event of default by the
counterparty. The Funds also invest in tri-party repurchase agreements.
Securities held as collateral for tri-party repurchase agreements are maintained
by the broker's custodian bank in a segregated account until maturity of the
repurchase agreement. Provisions of the agreements require that the market value
of the collateral, including accrued interest thereon, be sufficient in the
event of default. If the counterparty defaults and the value of the collateral
declines or if the counterparty enters into an insolvency proceeding,
realization of the collateral by the Fund may be delayed or limited.
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 borne by the class. Income, non
class-specific expenses, and realized and unrealized gains/losses are allocated
to the respective classes 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.
Distributions from net realized capital gains are distributed to shareholders at
least annually.
3. INVESTMENT ADVISER AND SUB-ADVISER AGREEMENTS
The Funds have an Investment Management Agreement dated October 1, 2005 (the
"Agreement") with CCM Advisors, LLC (the "Adviser"), an affiliate of City
National Asset Management, Inc. ("CNAM, Inc."), with which certain officers and
trustees of the Funds are affiliated, to furnish investment advisory services to
the Funds. Under the terms of the Agreement, the Funds compensate the Adviser
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 through
September 30, 2006, the Adviser 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)
Limited Full Socially
Maturity Maturity Balanced Diversified Responsible
Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Institutional Class 0.75% 0.80% 1.00% 1.01% 1.04%
Class A 1.00% 1.05% N/A 1.26% 1.29%
- --------------------------------------------------------------------------------
AHA INVESTMENT FUNDS | PAGE 43
notes to financial statements
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
Effective November 1, 2006, the Adviser has 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)
Limited Full Socially
Maturity Maturity Balanced Diversified Responsible
Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Institutional Class 1.00% 1.00% 1.00% 1.25% 1.25%
Class A 1.25% 1.25% N/A 1.50% 1.50%
- --------------------------------------------------------------------------------
Any fee reductions or expense reimbursements may be repaid to the Adviser within
three years after occurrence, subject to certain restrictions and only if such
repayments do not cause the Funds' expense ratios, at the time of repayment, to
exceed the amounts shown in the preceding table.
During the year ended September 30, 2007, the Board of Trustees approved the
reimbursement of previously waived fees by the Adviser in the amount of $244,
$24,044, $1,052 and $47,927 for the Limited Maturity Fund, the Full Maturity
Fund, the Balanced Fund and the Diversified Fund, respectively.
As of September 30, 2007, fees which were previously waived by the Adviser which
may be subject to possible future reimbursement to the Adviser were as follows:
Potential Amount of
Fund Recovery (000) Expiration
- --------------------------------------------------------------------------------
Limited Maturity Fund $ 15 2008
136 2009
3 2010
Balanced Fund 33 2008
18 2009
Diversified Fund 24 2009
1 2010
Socially Responsible Fund 6 2008
18 2009
27 2010
- --------------------------------------------------------------------------------
THE PATTERSON CAPITAL CORPORATION and CNAM INC. act as the sub-advisers on
behalf of the AHA Limited Maturity Fund and are paid by the Adviser.
ROBERT W. BAIRD & CO., INCORPORATED and BOYD WATTERSON ASSET MANAGEMENT, LLC act
as sub-advisers on behalf of the AHA Full Maturity Fund and are paid by the
Adviser.
ROBERT W. BAIRD & CO., INCORPORATED, CAMBIAR INVESTORS, LLC and FREEMAN
ASSOCIATES INVESTMENT MANAGEMENT LLC act as sub-advisers on behalf of the
Balanced Fund and are paid by the Adviser.
CAMBIAR INVESTORS, LLC and FREEMAN ASSOCIATES INVESTMENT MANAGEMENT LLC act as
sub-advisers on behalf of the AHA Diversified Equity Fund and are paid by the
Adviser. Effective October 1, 2006, Cambiar was replaced with AMBS INVESTMENT
COUNSEL, LLC and SKBA CAPITAL MANAGEMENT, LLC as sub-advisers for portions of
the AHA Diversified Equity Fund and are paid by the Adviser.
SKBA CAPITAL MANAGEMENT, LLC acts as the sub-adviser on behalf of the AHA
Socially Responsible Fund and is paid by the Adviser.
4. ADMINISTRATION, TRANSFER AGENT AND DISTRIBUTION 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.
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.
SEI Institutional Transfer Agency, a division of SEI Investments Fund Management
Corporation serves as Transfer Agent for the Trust whereby it provides services
at an annual rate of $15,000 per share class. The Transfer Agent has voluntarily
agreed to waive these fees.
Citigroup Fund Services, LLC serves as sub-transfer agent for the AHA Funds
whereby it provides services at an annual rate of $14,000 per share class.
U.S. Bank, N.A. (the "Custodian") 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.
Certain officers of the Trust are also officers of the Adviser and/or the
Administrator. Such officers are paid no fees by the Trust or the AHA Funds for
serving as officers of the Funds.
AHA INVESTMENT FUNDS | PAGE 44
- --------------------------------------------------------------------------------
5. FEDERAL INCOME TAXES
It is each 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 Funds may be subject to taxes imposed by countries in which they invest,
with respect to their investments in issuers existing or operating in such
countries. Such taxes are generally based on income earned. The Funds accrue
such taxes when the related income is earned.
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. Accordingly, the
following permanent differences, primarily attributable to paydown reclasses for
tax purposes and REIT adjustments for tax purposes, have been reclassified
to/from the following accounts as of September 30, 2007:
Increase Decrease
Undistributed Accumulated
Net Investment Net Realized
Income (Loss) Gain (Loss)
Fund (000) (000)
- -----------------------------------------------------------------------
Limited Maturity Fund $7 $(7)
Full Maturity Fund 1 (1)
Balanced Fund 8 (8)
Diversified Fund 3 (3)
- -----------------------------------------------------------------------
These reclassifications had no impact on net assets or net asset value per
share.
The tax character of dividends and distributions declared during the years ended
September 30, 2007 and September 30, 2006 are shown below (000s):
Ordinary Long-term
Income Capital Gain Total
Fund (000) (000) (000)
- ------------------------------------------------------------------------
Limited Maturity Fund
September 2007 $ 1,857 $ -- $ 1,857
September 2006 2,460 -- 2,460
Full Maturity Fund
September 2007 1,626 -- 1,626
September 2006 1,394 85 1,479
Balanced Fund
September 2007 997 1,553 2,550
September 2006 635 787 1,422
Diversified Fund
September 2007 3,146 6,832 9,978
September 2006 1,057 4,157 5,214
Socially Responsible Fund
September 2007 629 659 1,288
September 2006 370 -- 370
AHA INVESTMENT FUNDS | PAGE 45
notes to financial statements
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
As of September 30, 2007, the components of Distributable Earnings/(Accumulated
Losses) on a tax basis were as follows (000s):
Undistributed Undistributed Capital Unrealized Other Total
Ordinary Long-term Loss Post-October Appreciation Temporary Distributable Earnings
Income Capital Gain Carryforwards Losses (Depreciation) Differences (Accumulated Losses)
Fund (000) (000) (000) (000) (000) (000) (000)
- ------------------------------------------------------------------------------------------------------------------------------------
Limited Maturity
Fund $ 161 $ -- $(2,462) $ (97) $ 81 $ (150) $ (2,467)
Full Maturity Fund 151 -- (399) (4) 25 (142) (369)
Balanced Fund 316 479 -- -- 765 -- 1,560
Diversified Fund 3,837 8,165 -- -- 9,351 -- 21,353
Socially Responsible
Fund 784 2,000 -- -- 5,333 -- 8,117
Post-October losses represent losses realized on investments and foreign
currency transactions from November 1, 2006 through September 30, 2007 that, in
accordance with Federal income tax regulations, the Funds have elected to defer
and treat as having arisen in the following fiscal year.
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,
2007, the breakdown of capital loss carryforwards was as follows (000s):
Expiring
----------------------------------------
2012 2013 2014 2015 Total
Fund (000) (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Limited Maturity Fund $ 76 $ 838 $ 133 $1,415 $2,462
Full Maturity Fund -- 64 46 289 399
- --------------------------------------------------------------------------------
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 September 30, 2007 for each of
the Funds were as follows (000s):
Aggregate Aggregated Net
Gross Gross Unrealized
Federal Unrealized Unrealized Appreciation
Tax Cost Appreciation Depreciation (Depreciation)
Fund (000) (000) (000) (000)
- --------------------------------------------------------------------------------
Limited Maturity Fund $ 48,167 $ 197 $ (116) $ 81
Full Maturity Fund 46,457 343 (318) 25
Balanced Fund 17,375 1,052 (287) 765
Diversified Fund 106,255 11,675 (2,324) 9,351
Socially Responsible
Fund 53,573 6,487 (1,154) 5,333
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS (000S):
The share transactions for the years ended September 30, 2007 and September 30,
2006 are as follows:
Limited Maturity Fund (000) Full Maturity Fund (000) Balanced Fund (000)
--------------------------- ------------------------ -------------------
2007 2006 2007 2006 2007 2006
--------------------------- ------------------------ -------------------
INSTITUTIONAL CLASS
Shares Sold 226 63 1,107 503 -- --
Shares Issued in Reinvestment of Dividends 40 121 51 50 4 6
Shares Redeemed (371) (6,520) (8) (628) -- (61)
- --------------------------------------------------------------------------- ------------------------ -------------------
Total Net Change (105) (6,336) 1,150 (75) 4 (55)
=========================================================================== ======================== ===================
CLASS A
Shares Sold 9 16 9 1
Shares Issued in Reinvestment of Dividends 1 1 1 1
Shares Redeemed (15) (61) (1) (1)
- --------------------------------------------------------------------------- ------------------------
Total Net Change (5) (44) 9 1
=========================================================================== ========================
AHA INVESTMENT FUNDS | PAGE 46
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS (CONTINUED) (000S):
Socially
Diversified Fund Responsible Fund
---------------- ----------------
2007 2006 2007 2006
- -----------------------------------------------------------------------------------
INSTITUTIONAL CLASS
Shares Sold 728 1,789 1,164 2,133
Shares Issued in Reinvestment of Dividends 367 192 108 35
Shares Redeemed (773) (1,447) (737) (163)
- ----------------------------------------------------------------- ----------------
Total Net Change 322 534 535 2,005
================================================================= ================
CLASS A
Shares Sold 70 102 45 25
Shares Issued in Reinvestment of Dividends 52 27 1 --
Shares Redeemed (171) (59) (11) --
- ----------------------------------------------------------------- ----------------
Total Net Change (49) 70 35 25
================================================================= ================
7. SECURITIES TRANSACTIONS
Purchases and sales and maturities of investment securities, other than
short-term investments, for the year ended September 30, 2007 were as follows:
Purchases Sales & Maturities
- -------------------------------------------------------------------------
U.S. Gov't Other U.S. Gov't Other
Fund (000) (000) (000) (000)
- -------------------------------------------------------------------------
Limited Maturity Fund $ 23,014 $ 8,223 $14,656 $ 17,839
Full Maturity Fund 14,316 14,271 11,055 7,704
Balanced Fund 1,240 19,865 1,016 22,550
Diversified Fund -- 124,727 -- 128,510
Socially Responsible Fund -- 20,248 -- 14,818
- -------------------------------------------------------------------------
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 year ended September 30, 2007.
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.
10. NEW ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the Funds' financial statements. FIN 48
requires the evaluation of tax positions taken or expected to be taken in the
course of preparing the Funds' tax returns to determine whether the tax
positions are "more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the current year. Adoption of
FIN 48 is required for fiscal years beginning after December 15, 2006 and is to
be applied to all open tax years as of the effective date. Recent SEC guidance
allows implementating FIN 48 in fund asset calculations as late as the fund's
last net asset value calculation in the first required financial statement
reporting period. As a
AHA INVESTMENT FUNDS | PAGE 47
notes to financial statements
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
result, the Fund will incorporate FIN 48 in its semi-annual report on March 31,
2008. As of September 30, 2007, the Funds do not anticipate a material impact to
the financial statements.
In September 2006, FASB issued Statement on Financial Accounting Standards
(SFAS) No. 157,"Fair Value Measurements. "This standard establishes a single
authoritative definition of fair value, sets out a framework for measuring fair
value and requires additional disclosures about fair value measurements. SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards. SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. The changes to current generally accepted accounting
principles from the application of this Statement relate to the definition of
fair value, the methods used to measure fair value, and the expanded disclosures
about fair value measurements. As of September 30, 2007, the Funds do not
believe the adoption of SFAS No. 157 will impact the amounts reported in the
financial statements; however, additional disclosures may be required about the
inputs used to develop the measurements and the effect of certain of the
measurements reported on the statement of changes in net assets for a fiscal
period.
11. SUBSEQUENT EVENT
Effective as of the commencement of business on October 17, 2007, the
designation of the Class A shares of AHA Limited Maturity Fixed Income Fund, AHA
Full Maturity Fixed Income Fund, AHA Diversified Equity Fund and AHA Socially
Responsible Equity Fund is changed to Class N.
AHA INVESTMENT FUNDS | PAGE 48
report of independent registered public accounting firm
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
CNI CHARTER FUNDS:
We have audited the accompanying statements of assets and liabilities of the AHA
Investment Funds, a series of CNI Charter Funds, comprised of the AHA Limited
Maturity Fixed Income Fund, AHA Full Maturity Fixed Income Fund, AHA Balanced
Fund, AHA Diversified Equity Funds and AHA Socially Responsible Equity Fund
(collectively," the Funds"), including the schedules of investments, as of
September 30, 2007 and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the two-year period then ended and the period from July 1, 2005 through
September 30, 2005. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audit. The financial highlights for the periods presented prior to July 1, 2005,
were audited by another independent registered public accounting firm, whose
report dated August 15, 2005, expressed an unqualified opinion thereon.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of September 30, 2007, by correspondence with the custodian
and brokers or by other appropriate audit procedures when replies from brokers
were not received. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Funds as of September 30, 2007, and the results of their operations for the year
then ended, and the changes in their net assets for each of the years in the
two-year period then ended, and financial highlights for each of the years in
the two-year period then ended and the period from July 1, 2005 through
September 30, 2005, in conformity with U.S. generally accepted accounting
principles.
/s/ KPMG LLP
NOVEMBER 19, 2007
AHA INVESTMENT FUNDS | PAGE 49
trustees and officers (UNAUDITED)
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
Information pertaining to the Trustees and Officers of the Trust is set forth
below as of October 3, 2007. Trustees who are not deemed to be "interested
persons" of the Trust as defined in the 1940 Act are referred to as "Independent
Trustees." Trustees who are deemed to be "interested persons" of the Trust are
referred to as "Interested Trustees." The Trust's Statement of Additional
Information ("SAI") includes additional information about the Trustees and
Officers. The SAI may be obtained without charge by calling 1-888-889-0799.
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF
OFFICE NUMBER OF
AND PORTFOLIOS IN OTHER
NAME POSITION(S) LENGTH OF FUND COMPLEX DIRECTORSHIPS
ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
AND AGE 1 TRUST SERVED 2 DURING PAST FIVE YEARS BOARD MEMBER 3 TRUSTEE 4
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
- ------------------
Vernon C. Kozlen* Trustee Since President and Chief Executive Officer, 16 None
CNI Charter Funds May 2007 CNI Charter Funds (2000-2007). Executive
400 N. Roxbury Drive Vice President and Director of Asset
Beverly Hills, CA 90210 Management Development, CNB (1996-2007).
Age: 64 Director, Reed, Conner & Birdwell LLC
(2000-present), and Convergent Capital
Management, LLC (2003-present). Chairman
of the Board, CNAM, Inc. (2001-2005).
Chairman of the Board, City National
Securities, Inc. (1999-2005). Director,
CNAM, Inc. (2001-2006), and City National
Securities, Inc. (1999-2006).
- ------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
- --------------------
Irwin G. Barnet, Esq. Trustee Since 1999 Attorney and partner, Reed Smith LLP, a 16 None
Age: 69 law firm (2003-present). Attorney and
principal, Crosby, Heafey, Roach & May
P.C., a law firm (2000-2002 ). Attorney
and principal, Sanders, Barnet, Goldman,
Simons & Mosk, a law firm (1980-2000).
- ------------------------------------------------------------------------------------------------------------------------------------
Victor Meschures Trustee Since 1999 Certified Public Accountant, Meschures, 16 None
Age: 69 Campeas, Thompson, Snyder and Pariser,
LLP, an accounting firm (1964-present).
- ------------------------------------------------------------------------------------------------------------------------------------
William R. Sweet Trustee Since 1999 Retired. Executive Vice President, Union 16 None
Age: 70 Bank of California (1985-1996).
- ------------------------------------------------------------------------------------------------------------------------------------
James Wolford Trustee Since 1999 Chief Financial Officer, Bixby Land 16 None
Age: 52 Company, a real estate company (2004-
present). Regional Financial Officer,
AIMCO, a real estate investment trust
(2004). Chief Financial Officer, DBM
Group, a direct mail marketing company
(2001-2004). SeniorVice President and
Chief Operating Officer, Forecast
Commercial Real Estate Service, Inc.
(2000-2001). Senior Vice President and
Chief Financial Officer, Bixby Ranch
Company (1985-2000).
- ------------------------------------------------------------------------------------------------------------------------------------
AHA INVESTMENT FUNDS | PAGE 50
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF
OFFICE
AND
NAME POSITION LENGTH OF
ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S)
AND AGE TRUST SERVED DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS
- --------
Timothy D. Barto Vice President Since Attorney, Vice President and Assistant Secretary of SEI Investments
SEI Investments and Assistant 2000 (1999-Present). Vice President and Assistant Secretary of Administrator
One Freedom Valley Drive Secretary (1999-Present). Officer of various investment companies administered by
Oaks, PA 19456 Administrator (1999-2004). Assistant Secretary of the Distributor
Age: 39 (2003-2004). Vice President of the Distributor (1999-2004).
- ------------------------------------------------------------------------------------------------------------------------------------
Eric Kleinschmidt Controller and Since Director of Fund Accounting, SEI Investments (2004-Present). Manager of
SEI Investments Chief Operating 2005 Fund Accounting, SEI Investments (1999-2004).
One Freedom Valley Drive Officer
Oaks, PA 19456
Age: 39
- ------------------------------------------------------------------------------------------------------------------------------------
Richard D. Byrd President and Since Executive Vice President, CNB (2005-Present). Chairman of the Board, City
City National Bank Chief Executive May National Securities, Inc. (2005-Present). Executive Vice President, Wells
400 N. Roxbury Drive Officer 2007 Fargo Bank (1997-2005).
Beverly Hills, CA 90210
Age: 47
- ------------------------------------------------------------------------------------------------------------------------------------
Valerie Y. Lewis Vice President Since Chief Compliance Officer, CNAM, Inc. (August, 2005-present). Fund Boards
City National Bank and Chief 2005 Specialist - Assistant Secretary, Capital Research and Management and
400 N. Roxbury Drive Compliance Company Capital International, Inc. (1999-2005).
Beverly Hills, CA 90210 Officer
Age: 51
- ------------------------------------------------------------------------------------------------------------------------------------
James Ndiaye Vice President Since Attorney, SEI Investments Company (2004-present). Vice President, Deutsche
SEI Investments and Assistant 2005 Asset Management (2003-2004). Associate, Morgan Lewis & Bockius LLP
One Freedom Valley Drive Secretary (2000-2003). Assistant Vice President, ING Variable Annuities Group
Oaks, PA 19456 (1999-2000).
Age: 39
- ------------------------------------------------------------------------------------------------------------------------------------
Michael T. Pang Vice President Since Attorney, SEI Investments Company (2005-present). Counsel, Caledonian Bank
SEI Investments and Assistant 2005 & Trust's Mutual Funds Group (2004-2005). Counsel, Permal Asset Management
One Freedom Valley Drive Secretary (2001-2004). Associate, Schulte, Roth & Zabel's Investment Management
Oaks, PA 19456 Group (2000-2001).
Age: 35
- ----------------------
1 Each trustee may be contacted by writing to the Trustee c/o CNI Charter
Funds, One Freedom Valley Drive, Oaks, PA 19456.
2 Each trustee shall hold office during the lifetime of this Trust until he
or she dies, resigns, is declared bankrupt or incompetent by a court of
appropriate jurisdiction, or is removed, or, if sooner, until the next
meeting of shareholders is called for the purpose of electing trustees and
until the election and qualification of his or her successor in accordance
with the Trust's Declaration of Trust. The president, treasurer and
secretary shall hold office until their respective successors are chosen
or qualified, or until their removal or resignation, or in each case until
he or she sooner dies, resigns, is removed, or becomes disqualified in
accordance with the Trust's by-laws.
3 The "Fund Complex" consists of all series of the Trust. As of September
30, 2007, the Fund Complex consisted of 16 Funds.
4 Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.,
"public companies") or other investment companies registered under the
1940 Act.
* Mr. Kozlen is an "interested person" of the Trust, as defined in the 1940
Act, by virtue of his position with CNB, the parent company of CNAM, Inc.,
until March 2007.
AHA INVESTMENT FUNDS | PAGE 51
trustees and officers (UNAUDITED) (CONCLUDED)
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TERM OF
OFFICE
AND
NAME POSITION LENGTH OF
ADDRESS, HELD WITH TIME PRINCIPAL OCCUPATION(S)
AND AGE TRUST SERVED DURING PAST FIVE YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS (CONCLUDED)
- --------------------
Rodney J. Olea Vice President Since Senior Vice President, CNAM, Inc. (2001-present). Senior Vice President
City National Bank 2000 and Director of Fixed Income, CNB (1994-present).
400 N. Roxbury Drive
Beverly Hills, CA 90210
Age: 42
- ------------------------------------------------------------------------------------------------------------------------------------
Sofia A. Rosala Vice President Since Vice President and Assistant Secretary, SEI Investments Fund Management
SEI Investments and Secretary 2004 (2005-present). Compliance Officer of SEI Investments (2001-2004). Account
One Freedom Valley Drive and Product Consultant, SEI Private Trust Company (1998-2001).
Oaks, PA 19456
Age: 33
- ------------------------------------------------------------------------------------------------------------------------------------
Timothy G. Solberg Vice President Since Managing Director and Chief Investment Officer, CCM Advisors
CCM Advisors, LLC and Assistant 2005 (2001-present); Director of Marketing and Client Services, Hewitt
190 S. LaSalle Street Secretary Investment Group, a Division of Hewitt Associates LLC (1989-2001).
Suite 2800
Chicago, IL 60603
Age: 54
- ------------------------------------------------------------------------------------------------------------------------------------
Susan Rudzinski Vice President Since Compliance Director, Convergent Capital Management, LLC (2006-present);
CCM Advisors, LLC May Self-employed Investment Advisory Compliance and Operations Consultant
190 S. LaSalle Street 2007 (2005-2006); Manager, Affiliate Contracts, The Burridge Group LLC
Suite 2800 (2003-2004).
Chicago, IL 60603
Age: 44
- ------------------------------------------------------------------------------------------------------------------------------------
Richard A. Weiss Vice President Since President, CNAM, Inc. (2001-present). Executive Vice President and Chief
City National Bank and Assistant 2000 Investment Officer, CNB (1999-present). Director, City National Securities
400 N. Roxbury Drive Secretary (April 2003-present). Executive Vice President and Chief Investment
Beverly Hills, CA 90210 Officer. Sanwa Bank California (1994-1999).
Age: 47
- ------------------------------------------------------------------------------------------------------------------------------------
AHA INVESTMENT FUNDS | PAGE 52
notice to shareholders (UNAUDITED)
SEPTEMBER 30, 2007
- --------------------------------------------------------------------------------
For shareholders that do not have a September 30, 2007 taxable year end, this
notice is for informational purposes only. For shareholders with a September 30,
2007 taxable year end, please consult your tax advisor as to the pertinence of
this notice.
For Federal income tax purposes, for the fiscal year ended September 30, 2007
each Fund is designating the following items with regard to distributions paid
during the year:
(C)** (D)***
DIVIDENDS QUALIFYING (G)******
(A)* (B)* QUALIFYING DIVIDEND (E)**** (F)***** QUALIFYING
LONG TERM ORDINARY FOR CORPORATE INCOME U.S. QUALIFYING SHORT-TERM
CAPITAL GAIN INCOME TOTAL DIVIDENDS REC. (15% RATE GOVERNMENT INTEREST CAPITAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DEDUCTION FOR QDI) INTEREST INCOME GAIN
- ------------------------------------------------------------------------------------------------------------------------------------
Limited Maturity Fixed
Income Fund 0% 100% 100% 0% 0% 18% 81% 0%
Full Maturity Fixed
Income Fund 0% 100% 100% 0% 0% 16% 96% 0%
Balanced Fund 61% 39% 100% 23% 24% 4% 35% 100%
Diversified Equity Fund 68% 32% 100% 47% 49% 0% 0% 100%
Socially Responsible
Equity Fund 51% 49% 100% 67% 69% 0% 0% 100%
- ------------------------------------------------------------------------------------------------------------------------------------
* ITEMS (A) AND (B) ARE BASED ON THE PERCENTAGE OF EACH FUND'S TOTAL
DISTRIBUTION.
** ITEM (C) IS BASED ON THE PERCENTAGE OF ORDINARY INCOME DISTRIBUTIONS OF
EACH FUND. QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE
CORPORATE DIVIDENDS RECEIVED DEDUCTION.
*** THE PERCENTAGE IN ITEM (D) REPRESENTS THE AMOUNT OF "QUALIFYING DIVIDEND
INCOME" AS CREATED BY THE JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT
OF 2003. IT IS THE INTENTION OF EACH OF THE AFOREMENTIONED FUNDS TO
DESIGNATE THE MAXIMUM AMOUNT PERMITTED BY THE LAW.
**** ITEM (E) REPRESENTS THE AMOUNT OF INTEREST THAT WAS DERIVED FROM DIRECT
U.S. GOVERNMENT OBLIGATIONS AND DISTRIBUTED DURING THE FISCAL YEAR. THIS
AMOUNT IS REFLECTED AS A PERCENTAGE OF TOTAL ORDINARY INCOME
DISTRIBUTIONS. GENERALLY, INTEREST FROM DIRECT U.S. GOVERNMENT
OBLIGATIONS IS EXEMPT FROM STATE INCOME TAX. FOR SHAREHOLDERS OF THE
FUNDS WHO ARE RESIDENTS OF CALIFORNIA, CONNECTICUT AND NEW YORK, THE
STATUTORY THRESHOLD REQUIREMENTS WERE NOT SATISFIED TO PERMIT EXEMPTION
OF THESE AMOUNTS FROM STATE INCOME TAX.
***** ITEM (F) REPRESENTS THE AMOUNT OF "QUALIFYING INTEREST INCOME" AS CREATED
BY THE AMERICAN JOBS CREATION ACT OF 2004 AND IS REFLECTED AS A
PERCENTAGE OF NET INVESTMENT INCOME DISTRIBUTIONS THAT IS EXEMPT FROM
U.S. WITHHOLDING TAX WHEN PAID TO FOREIGN INVESTORS.
****** THE PERCENTAGE IN ITEM (G) REPRESENTS THE AMOUNT OF "QUALIFYING
SHORT-TERM CAPITAL GAIN" AS CREATED BY THE AMERICAN JOBS CREATION ACT OF
2004 AND IS REFLECTED AS A PERCENTAGE OF SHORT-TERM CAPITAL GAIN
DISTRIBUTIONS THAT IS EXEMPT FROM U.S. WITHHOLDING TAX WHEN PAID TO
FOREIGN INVESTORS.
AHA INVESTMENT FUNDS | PAGE 53
disclosure of fund expenses (UNAUDITED)
- --------------------------------------------------------------------------------
As an Institutional Class 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 September 30, 2007.
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 Forum Shareholder Services, LLC (a division of Citigroup Fund
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.
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/07 9/30/07 RATIOS PERIOD*
- --------------------------------------------------------------------------------
AHA LIMITED MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,022.20 0.72% $3.65
Class A 1,000.00 1,021.90 0.97% 4.92
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.46 0.72% $3.65
Class A 1,000.00 1,020.21 0.97% 4.91
- --------------------------------------------------------------------------------
AHA FULL MATURITY FIXED INCOME FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,019.00 0.79% $4.00
Class A 1,000.00 1,018.60 1.04% 5.26
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.11 0.79% $4.00
Class A 1,000.00 1,019.85 1.04% 5.27
- --------------------------------------------------------------------------------
AHA BALANCED FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,044.60 1.00% $5.13
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.05 1.00% $5.06
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/07 9/30/07 RATIOS PERIOD*
- --------------------------------------------------------------------------------
AHA DIVERSIFIED EQUITY FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,048.10 1.02% $5.24
Class A 1,000.00 1,046.70 1.27% 6.52
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,019.95 1.02% $5.16
Class A 1,000.00 1,018.70 1.27% 6.43
- --------------------------------------------------------------------------------
AHA SOCIALLY RESPONSIBLE EQUITY FUND
- --------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Class $1,000.00 $1,046.30 0.93% $4.77
Class A 1,000.00 1,045.00 1.18% 6.05
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.41 0.93% $4.71
Class A 1,000.00 1,019.15 1.18% 5.97
- --------------------------------------------------------------------------------
*Expenses are equal to the Fund's annualized expense ratio multiplied by the
average account value over the period, multiplied by 183/365 (to reflect the
six month period).
AHA INVESTMENT FUNDS | PAGE 54
approval of sub-advisory agreement (UNAUDITED)
- --------------------------------------------------------------------------------
The Board of Trustees (the "Board") of CNI Charter Funds (the "Trust") is
comprised of five Trustees, four of whom are independent of the Trust's
investment advisers and sub-advisers (the "Independent Trustees"). During the
six months ended September 30, 2007, the Board and the Independent Trustees
approved renewals of the Trust's advisory agreement (the "Management Agreement")
with CCM Advisors, LLC ("CCMA") and the related sub-advisory agreements
(collectively referred to below as the "Sub-Advisory Agreements") with the
following sub-advisory organizations (the "Sub-Advisers"):
o CCMA's sub-advisory agreement (the "CNAM Agreement") with City
National Asset Management, Inc. ("CNAM") with respect to the AHA
Limited Maturity Fixed Income Fund;
o CCMA's sub-advisory agreement (the "Patterson Agreement") with The
Patterson Capital Corporation ("Patterson") with respect to the
Limited Maturity Fund;
o CCMA's sub-advisory agreements (the "Baird Agreements") with Robert
W. Baird & Co. Incorporated ("Baird") with respect to the AHA Full
Maturity Fixed Income Fund (the "Full Maturity Fund") and the AHA
Balanced Fund;
o CCMA's sub-advisory agreements (the "Freeman Agreements") with
Freeman Associates Investment Management LLC ("Freeman") with
respect to the Balanced Fund and the AHA Diversified Equity Fund;
and
o CCMA's sub-advisory agreement (the "SKBA Agreement") with SKBA
Capital Management, LLC ("SKBA") with respect to the AHA Socially
Responsible Equity Fund.
The Management Agreement and the Sub-Advisory Agreements are referred to below
as the "Agreements."
GENERAL INFORMATION
The following information summarizes the Board's considerations associated with
its review of the Agreements. 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. The
Agreements were considered separately for each relevant investment portfolio of
the Trust (each a "Fund"), although the Board took into account the common
interests of all the relevant Funds in its review. As described below, the Board
considered the nature, quality and extent of the various investment advisory and
administrative services performed by CCMA and each of the Sub-Advisers. In
considering these matters, the Independent Trustees discussed the approval of
the Agreements with management and in private sessions with counsel at which no
representatives of CCMA or the Sub-Advisers were present.
The Board reviewed extensive materials regarding the investment results of the
Funds, advisory fee and expense comparisons, financial and profitability
information with respect to each entity, descriptions of various functions such
as compliance monitoring and portfolio trading practices, and information about
the personnel providing investment management and administrative services to the
Funds. They also took into account information they received at past Board
meetings with respect to these matters.
In deciding to approve renewal of the Agreements, the Board and the Independent
Trustees did not identify a single factor as controlling and this summary does
not describe all of the matters considered. However, the Board and the
Independent Trustees concluded that each of the various factors referred to
below favored such approval.
CCMA
NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the services provided by CCMA, the Board considered a variety of
matters, including the background, education and experience of CCMA's key
portfolio management and operational personnel; its overall financial strength
and stability; its resources and efforts to retain, attract and motivate capable
personnel to serve the Funds; and the overall general quality and depth of its
organization. The Board also took into account the experience, capability and
integrity of its senior management; its investment philosophy and processes and
oversight of the Sub-Advisers; its disaster recovery and contingency planning;
and its commitment and systems in place with regard to compliance with
applicable laws and regulations.
INVESTMENT PERFORMANCE
The Board assessed the performance of the Institutional Class of each Fund
compared with its respective benchmark and the average of all funds in its
respective peer group category (each, a "universe") selected by Lipper, Inc. for
the one-, three-, five-
AHA INVESTMENT FUNDS | PAGE 55
approval of sub-advisory agreement (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
and ten-year and since-inception periods ended June 30, 2007. The Board made the
following observations in reviewing the Funds' performance:
o The annualized total returns of the Limited Maturity Fund were below
those of the Merrill Lynch 1-3 Year Treasury Index and the Lipper
short investment grade universe average for all periods. The Board
noted that until January 31, 2007, the Fund could only invest in
bonds rated "A" or higher, and that CNAM, Inc. was added as a new
sub-adviser to the Fund in 2005.
o The annualized total returns of the Full Maturity Fund were below
those of the Lehman Intermediate Government Credit Index returns and
the Lipper corporate debt funds A-rated universe average for all
periods, except that the Fund's returns were above the Lipper
universe average for the ten-year period. The Board noted that the
average credit quality for the Full Maturity Fund was "AA," which is
relatively high compared with its peer group.
o The annualized total returns of the Balanced Fund were above those
of a 60/30/10 hybrid of the S&P 500 Index, Lehman US Aggregate Bond
Index and Merrill Lynch 3-Month US Treasury Bill Index, and below
the Lipper mixed-asset target allocation growth fund universe
average, for the three- and five-year periods; above both measures
for the ten-year period; below both measures for the one-year and
since-inception periods; below the S&P 500 Index for all periods
except the ten-year period; and above the Lehman US Aggregate Bond
Index returns for all periods.
o The annualized total returns of the Diversified Equity Fund were
below that of the S&P 500 Index and the Lipper large cap core funds
universe average for the one-year period, and above those measures
for all other periods.
o The annualized total return of the Socially Responsible Fund was
slightly below the return of the Domini 400 Social Index and below
that of the Lipper large cap value fund universe average for the
one-year period, and the Fund's annualized total returns were above
those of the Domini Index and below the Lipper universe average for
the since-inception and year-to-date periods. The Board noted that
because the Fund is precluded from investing in approximately 200
value-oriented companies pursuant to the Fund's socially conscious
investment restrictions, the Fund may not invest in all securities
in which other funds in the Lipper value universe may invest.
The Board and the Independent Trustees concluded that CCMA continued to provide
high quality management and oversight services to the Funds. They noted that the
investment results of the Funds during the past year and previous periods were
generally good; that each of the Funds had met its objectives as demonstrated by
various factors; and that consideration of returns of market indexes needed to
take into account that indexes do not reflect the expenses of operating mutual
funds.
ADVISORY FEES AND FUND EXPENSES
The Board reviewed information regarding the management fees charged by CCMA and
the total expenses of each of the Funds (as percentages of their respective
average annual net assets) compared to those of select peer groups of funds, and
the Board and the Independent Trustees concluded that the advisory fees and
expenses of the Funds continued to be reasonable.
The Board observed that the Funds' contractual management fees as of June 30,
2007 were below the average management fees for their peer group funds (except
for Class A of the Diversified Equity Fund and the Institutional Class of the
Balanced Fund). As the Funds are CCMA's sole investment advisory clients, the
Board was not able to compare the fees charged to the Funds by CCMA with fees
charged to other institutional clients of CCMA.
With respect to the total expenses of the Funds, the Board considered that total
expenses as of June 30, 2007 net of fee waivers were below the average total
expenses for their peer group funds except for Class A shares of the Full
Maturity Fund and Institutional Class shares of the Limited Maturity, Full
Maturity, Balanced and Socially Responsible Funds. However, the Board also noted
that the asset levels of the Funds were relatively small, that CCMA was waiving
additional fees with respect to the Socially Responsible Fund that were not
reflected in the Total Annual Fund Operating Expenses reported in the Fund's
current prospectus, and that the total expenses of the Full Maturity Fund were
decreasing as a result of recent increases in the Fund's assets.
The Board considered information prepared by CCMA relating to its costs and
profits. The Board also considered the benefits received by CCMA and its
affiliates as a result of CCMA's relationship with the Funds, including
investment advisory fees received by CCMA, fees paid to City National Bank and
City National Securities, Inc. for providing certain shareholder servicing and
sub-distribution services to the Trust, and the intangible benefits of any
favorable publicity
AHA INVESTMENT FUNDS | PAGE 56
approval of sub-advisory agreement (UNAUDITED) (CONCLUDED)
- --------------------------------------------------------------------------------
arising in connection with the Funds' performance. They also noted that,
although there were no fee advisory fee breakpoints, the asset levels of most of
the Funds were relatively small and were not currently likely to lead to
significant economies of scale.
CONCLUSIONS
Based on their review, including their consideration of each of the factors
referred to above, the Board and the Independent Trustees concluded that the
compensation payable to CCMA pursuant to the Management Agreement is fair and
reasonable in light of the nature and quality of the services being provided by
CCMA to each Fund and its shareholders, and that renewal of the Management
Agreement was in the best interest of the Funds and their shareholders.
SUB-ADVISERS
NATURE, EXTENT AND QUALITY OF SERVICES
In reviewing the services provided by each of the Sub-Advisers, the Board
considered a variety of matters, including the background, education and
experience of the Sub-Adviser's key portfolio management and operational
personnel; its overall financial strength and stability; its resources and
related efforts to retain, attract and motivate capable personnel to serve the
Funds; and the overall general quality and depth of its organization. The Board
also reviewed each Sub-Adviser's investment philosophy and processes as well as
its brokerage, trading and soft dollar practices.
INVESTMENT PERFORMANCE
The Board's observations regarding each Fund's performance are described
above. As indicated above, the Board and the Independent Trustees concluded that
each Sub-Adviser continued to provide high quality services to the Funds.
ADVISORY FEES AND FUND EXPENSES
The Board reviewed information regarding the advisory fees charged by each
Sub-Adviser and observed that the fees charged by each Sub-Adviser were low
compared to the fees it charged to its other institutional clients. They noted
that CCMA pays all sub-advisory fees out of CCMA's advisory fee.
The Board considered information prepared by each Sub-Adviser (except for Baird)
relating to its costs and profits with respect to the Fund or Funds for which it
serves as sub-adviser, as well as the methodologies used to determine and
allocate such costs to its management of the Fund. With respect to Baird, which
does not track profitability by account, the Board considered that the
sub-advisory fees charged by Baird to the Funds were significantly lower than
the fees set forth in its standard fee schedule. The Board also considered the
benefits received by each Sub-Adviser and its affiliates as a result of its
relationship with the Funds, including the sub-advisory fees paid to the
Sub-Adviser, the intangible benefits of their association with the AHA Funds
generally and any favorable publicity arising in connection with the Funds'
performance, and in the case of CNAM and SKBA, fees paid to City National Bank
and City National Securities, Inc. for providing certain shareholder servicing
and sub-distribution services to the Trust.
CONCLUSIONS
Based on their review, including their consideration of each of the factors
referred to above, the Board and the Independent Trustees concluded that the
compensation payable to each Sub-Adviser pursuant to its respective Sub-Advisory
Agreement is fair and reasonable in light of the nature and quality of the
services being provided by each Sub-Adviser to the respective Funds and their
shareholders, and that renewal of each Sub-Advisory Agreement was in the best
interest of the Funds and their shareholders.
AHA INVESTMENT FUNDS | PAGE 57
- --------------------------------------------------------------------------------
For more information on CNI Charter Funds, including charges
and expenses, please call 1-888-889-0799 for a free prospectus.
Read it carefully before you invest or send money.
- --------------------------------------------------------------------------------
[American Hospital Association LOGO OMITTED]
AHA INVESTMENT FUNDS(TM)
A SERIES OF THE CNI CHARTER FUNDS
CCM Advisors, LLC is the AHA-sponsored investment [LOGO OMITTED]
advisor for the AHA Investment Program CNI CHARTER FUNDS(SM)
CNI-AR-002-0300
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer and principal
accounting officer.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's board of trustees has determined that the registrant has
at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial experts are William R. Sweet and James R.
Wolford. Messrs. Sweet and Wolford are independent as defined in Form N-CSR Item
3(a)(2).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees billed by KPMG LLP Related to the Trust
KPMG LLP billed the Trust aggregate fees for services rendered to the Trust for
the last two fiscal years as follows:
- ------------------------------------------------------------------------------------------------------------------------------
2007 2006
- ------------------------------------------------------------------------------------------------------------------------------
All fees and All fees and All other fees All fees and All fees and All other fees
services to the services to and services to services to the services to and services to
Trust that were service service Trust that were service service
pre-approved affiliates that affiliates that pre-approved affiliates that affiliates that
were did not require were did not require
pre-approved pre-approval pre-approved pre-approval
- ------------------------------------------------------------------------------------------------------------------------------
(a) Audit N/A $278,000 N/A $285,500 N/A N/A
Fees(1)
- ------------------------------------------------------------------------------------------------------------------------------
(b) Audit- N/A N/A N/A $0 N/A N/A
Related
Fees
- ------------------------------------------------------------------------------------------------------------------------------
(c) Tax N/A $66,075 N/A $61,600 N/A N/A
Fees
- ------------------------------------------------------------------------------------------------------------------------------
(d) All N/A N/A N/A N/A N/A N/A
Other
Fees
- ------------------------------------------------------------------------------------------------------------------------------
Notes:
(1) Audit fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
accountant in connection with statutory and regulatory filings.
(e)(1) Not Applicable
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to
waiver of pre-approval requirement were as follows:
------------------------- ----------------- ----------------
2007 2006
------------------------- ----------------- ----------------
Audit-Related Fees N/A N/A
------------------------- ----------------- ----------------
Tax Fees N/A N/A
------------------------- ----------------- ----------------
All Other Fees N/A N/A
------------------------- ----------------- ----------------
(f) Not Applicable
(g) The aggregate non-audit fees and services billed by KPMG LLP for the
last two fiscal years were $66,075 and $61,600 for 2007
and 2006, respectively.
(h) Not Applicable
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
registrant's internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(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
By (Signature and Title)* /s/ Richard D. Byrd
--------------------------
Richard D. Byrd, President & CEO
Date November 29, 2007
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.
By (Signature and Title)* /s/ Richard D. Byrd
--------------------------
Richard D. Byrd, President & CEO
Date November 29, 2007
By (Signature and Title)* /s/ Eric Kleinschmidt
----------------------------
Eric Kleinschmidt, Controller and COO
Date November 29, 2007
* Print the name and title of each signing officer under his or her signature.