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)
--------
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, 2008
DATE OF REPORTING PERIOD: SEPTEMBER 30, 2008
ITEM 1. REPORTS TO STOCKHOLDERS.
(AMERICAN HOSPITAL ASSOCIATION LOGO)
AMERICAN HOSPITAL
ASSOCIATION
AHA INVESTMENT FUNDS(TM)
A SERIES OF THE CNI CHARTER FUNDS
(GRAPHIC)
2008 ANNUAL REPORT
September 30, 2008
AHA Limited Maturity Fixed Income Fund
AHA Full Maturity Fixed Income Fund
AHA Balanced Fund
AHA Diversified Equity Fund
AHA Socially Responsible Equity Fund
CCM Advisors, LLC is the AHA-sponsored investment
advisor for the AHA Investment Program.
TABLE OF CONTENTS
Annual Report
AHA Investment Funds
Series of CNI Charter Funds
2 Letter to Our Shareholders
7 Fund Overview
12 Schedules of Investments
37 Statements of Assets and Liabilities
38 Statements of Operations
40 Statements of Changes in Net Assets
42 Financial Highlights
44 Notes to Financial Statements
50 Report of Independent Registered Public Accounting Firm
51 Trustees and Officers
54 Notice to Shareholders
55 Disclosure of Fund Expenses
56 Approval of Advisory and Sub-Advisory Agreements
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, 2008
Dear Shareholder:
Please find enclosed the annual report for the AHA Investment Funds, a series of
CNI Charter Funds (the "AHA Funds"), dated September 30, 2008. This letter will
summarize results for the AHA Funds and our activities for the past twelve
months. The CNI Charter Funds have over $7 billion of assets under management
and are affiliated with City National Corporation, the second largest
independent bank holding company in California. City National Corporation is
traded on the New York Stock Exchange as ticker CYN.
ECONOMIC OVERVIEW
September 2008 may go down in market history as the month in which Wall Street
as we knew it disappeared and a new face was put on the global financial system.
In the first week in October, a $700 billion bailout of troubled
mortgage-related securities was passed by Congress. Treasury Secretary Paulson
and Federal Reserve Chairman Bernanke took extraordinary measures to support the
financial system as there was a psychology that the U.S. was on the verge of
depression if the bailout was not passed. The crises of confidence in the
strength of America's most prominent financial institutions seems to have taken
on a life of its own.
The global financial system relies on trust between counterparties, and as that
trust evaporated, so did the availability of credit, which reached a crisis
point during the month of September. The freezing of liquidity combined with the
dangerously high levels of leverage on the balance sheets of financial
institutions triggered failure due to their shrinking capital bases. The
response of governments and financial regulators has been unprecedented acts of
intervention to minimize the fall. As it stands today, central bankers and
treasury ministers around the globe continue to struggle to resolve the
liquidity crunch and contain the damage to the real economy.
On the positive side, the U.S. Government has moved aggressively to shore up the
system. Foreign governments have also approached the crisis on a coordinated,
policy level basis. Since Congress passed legislation to help banks remove bad
debts from their balance sheets, market participants will be better able to
judge the financial stability of counterparties. With the ensuing return of
confidence to the marketplace, the system will be on more secure footing from
which global growth can proceed.
OUTLOOK
Looking forward, the critical question is: How long will it take to thaw the
credit freeze? The banks will require time for an orderly process to remove bad
assets from their books and re-establish their credit-worthiness. Once credit is
restored and the financial system is again functioning, the markets will take
stock of the real economy and the damage done to it by the credit freeze. A
recession seems imminent but its breadth, depth and duration are unknown.
On the positive side, looking beyond the financial services institutions,
corporate America came into this situation with strong balance sheets, high
levels of productivity, and solid profit margins. For instance, the last 12
month earnings growth rate for the Russell 1000 Index excluding financial
companies was 14.6% versus -33% for the Russell 1000 financial sector. Net
income margins excluding financial companies remained at high levels relative to
the past (11.9%), while the financial sector margins declined from a June 2004
peak this decade of 17.6% to 9.2% currently. Energy and commodity prices have
declined dramatically from their recent elevated levels, housing inventory is
improving slightly and stock prices are far from extended on a valuation basis.
With the Troubled Asset Relief Program being implemented (as part of the
bailout), it is entirely possible for a return to a market that focuses on the
road to recovery, and opportunities that exist in the U.S. and around the world.
AHA INVESTMENT FUNDS | PAGE 2
letter to our shareholders
SEPTEMBER 30, 2008
AHA LIMITED MATURITY FIXED INCOME FUND
The AHA Limited Maturity Fixed Income Fund is structured to provide a high level
of current income consistent with preservation of capital by investing in high
quality securities in two portfolio styles. The dual portfolio philosophy is
achieved by combining a 1-5 year maturity government/credit portfolio managed by
City National Asset Management, Inc., with a 1-3 year maturity portfolio managed
by Patterson Capital Corporation. While the Investment Committee of the AHA
Funds' adviser, CCM Advisors, LLC (the "Advisor"), monitors the sub-advisers'
performance against their individual benchmarks, the Fund's combined portfolio
is benchmarked to the Merrill Lynch 1-3 Year Treasury Index and the Merrill
Lynch 3-Month U.S. Treasury Index and compared to the Morningstar Short Term
Maturity universe and the Lipper Short-Intermediate Investment Grade category.
During the fiscal year ended September 30, 2008, the Federal Reserve Bank (the
"Fed") accelerated its policy of decreases in short-term interest rates and took
emergency measures to avert the credit crisis caused by the failure of Lehman
Brothers and near failure of AIG and major banks due to defaults in sub-prime
mortgages and credit default swaps. Please be assured that the Fund's managers
do not invest in low quality or sub-prime loans. Fed actions especially affect
short term yields, causing the 30-day SEC yield on the Merrill Lynch 3-Month
U.S. Treasury ("T-Bill") Index to drop from 3.83% in September 2007 to 0.68% in
September 2008. (See how the Interest Yield drops from 3/31/08 to 9/30/08 on the
Yield Curve chart at the 3M (month) maturity.) The Limited Maturity Fund
Institutional Class Shares' 30-day SEC yield went down much less, from 4.34% in
September 2007, to 3.34% in September 2008, and so yielded more than the T-Bill
throughout the fiscal year. This is beneficial for shareholders who are seeking
income and want to earn a higher monthly yield than with T-Bills. There was
actually one point in September 2008 when T-Bills had a negative yield,
something that had only happened in 1940 when the world was in turmoil at the
onset of World War II.
- - The total net return of the Fund's Institutional Class shares was up 2.54%
for the fiscal year. This compares favorably to the Lipper
Short/Intermediate Investment Grade Debt peer group which had annual
returns of -0.98%. This Fund was named a LIPPER LEADER for three and five
years Consistent Return and Total Return in this category.
- - The Fund ranked in the upper 21st percentile of the Morningstar Short Term
Fixed Income Universe with a four-star rating.
Because of the credit crunch and ensuing banking crisis Treasury securities
rallied in a flight to quality so the Merrill Lynch 1-3 year Treasury Index had
a return of 6.27% for the year ended September 30, 2008 as it is comprised 100%
of Treasury securities. The Limited Maturity Fund is a diversified blend of
corporate (29.5% weighting at 9/30/08), Treasury (20.9%), Agency (25.4%) and
mortgage obligation (22.8%) securities. The mortgage and corporate allocations
could not keep up with Treasuries during the panic rallies this year, causing
the Fund to lag the 1-3 year Treasury Index. However, the average market yield
of the Fund at September 30, 2008 was 5.0% due to the higher income of the
non-Treasury securities; the yield on the Merrill Lynch 1-3 year Treasury Index
was only 1.9%. To control risk, the Fund's overall average credit quality rating
ranged between AAA- and AA+ during the fiscal year. One of our main objectives
is to protect shareholder principal, and the
YIELD CURVE OF U.S. TREASURY SECURITIES
AS OF 3/31/08, 6/30/08 AND 9/30/08
(PERFORMANCE GRAPH)
YEARS TO MATURITY 9/30/08 6/30/08 3/31/08
- ----------------- ------- ------- -------
3M 0.92 1.90 1.38
6M 1.60 2.17 1.51
1Yr 1.78 2.36 1.55
2Yr 2.00 2.63 1.62
3Yr 2.28 2.91 1.79
2.63 3.12 2.12
5Yr 2.98 3.34 2.46
3.38 3.61 2.88
10Yr 3.85 3.99 3.45
4.04 4.19 3.67
4.23 4.39 3.88
25Yr+ 4.43 4.59 4.09
4.31 4.53 4.30
AHA INVESTMENT FUNDS | PAGE 3
letter to our shareholders
SEPTEMBER 30, 2008
portfolio managers follow conservative investment guidelines.
For no-load Class N Shares of this Fund, annualized return was 2.29% and the 30
day SEC yield ranged from 4.07% in September 2007 to 3.08% a year later.
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 Baird Advisors to
intermediate and aggregate indices, respectively, to provide a "Full" maturity
spectrum. The intermediate portfolio manager began the fiscal year with a
slightly shorter duration than the Barclays Intermediate Government/Credit Index
(3.4 years vs. 3.7 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 just
under the Barclays Intermediate Government/Credit Index (3.4 years vs. 3.7). The
aggregate portfolio was maintained right on the Barclays Aggregate index
duration of 4.7 years which remained nearly constant throughout the year.
However, the bond market was in turmoil during the last six months of the 2008
fiscal year. The fears of defaults in the sub-prime loan market spread to Fannie
Mae and Freddie Mac as agency securities pulled returns on the entire mortgage
sector down. The Fed and U.S. Treasury took drastic actions to contain the
spread of defaults and to protect the banking system globally (see Yield Curve
chart referred to above in the Limited Maturity section 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 Treasuries, so Treasury
prices rallied sharply and mortgage-backed securities, even Agency backed, were
down significantly. The Full Maturity Fund invests in investment grade bonds
only and therefore 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 27.2% weighting in Mortgage-backed securities (at
September 30, 2008) and a 17.1% weighting in Treasuries, the Institutional Class
and Class N Shares recorded net returns of 1.76% and 1.42%, respectively, for
the fiscal year.
- - This compared favorably to the -2.78% peer group average of the Lipper
Corporate Debt Funds A Rated Classification (a universe of government/
corporate bond funds rated A or better). This Fund was also named a Lipper
Leader for Consistent Returns and Total Returns.
- - Morningstar ranked this Fund in the upper 28th percentile of the
Intermediate Term Fixed Income Universe for the fiscal year with a four
star rating.
The Barclays Intermediate Government/Credit Index returned 3.15% during the
fiscal year. However, the index DOES NOT CONTAIN ANY MORTGAGES, and is comprised
of 42% Treasuries. Therefore the Fund was, relative to the index, overweighted
in mortgage-backed securities that underperformed, and underweighted in
Treasuries, which outperformed. The Fund's portfolio managers still believe that
shareholder interests are best served by a diversified portfolio of bonds rather
than an all-Treasury approach, and anticipate that as the bond market adjusts to
U.S. Treasury and Fed actions to support the credit market, the benefits of a
multiple-sector bond fund will be noticeable.
AHA BALANCED FUND
The AHA Balanced Fund combines stocks, bonds and cash in a moderate allocation
targeted at 60% stocks. The Balanced Fund's net return for the fiscal year was
- -12.68%. A hybrid benchmark of 60% S&P 500 Stock Index, 30% Barclays U.S.
Aggregate Bond Index and 10% Merrill Lynch 3-month U.S. Treasury Index returned
- -12.35%. The Fund's ranking in the Morningstar moderate universe was in the
upper 37th percentile for the year. The Fund had an above market weight in
energy stocks, which was the best performing sector until June, when oil prices
dropped dramatically as hedge funds unwound positions and concerns of a
AHA INVESTMENT FUNDS | PAGE 4
letter to our shareholders
SEPTEMBER 30, 2008
global recession decreasing energy demand dominated headlines for the last three
months of the fiscal year. An over weight in materials sector (raw materials and
mining), the third best performing sector through June also fell off in the
September quarter. However, an underweight in consumer staples and healthcare
stocks, which performed well in the market downturn, did not aid relative
performance. A timely shift to more Treasuries in the aggregate bond portfolio
helped brake the downside in the final fiscal quarter.
AHA DIVERSIFIED EQUITY FUND
The AHA Diversified Equity Fund Institutional Class and Class N Shares produced
results of -22.73% and -22.93% respectively, similar to the S&P 500 Index return
of -21.98%. This Fund combines four portfolio managers (see pie chart): core
(36% weight), fundamental value (18.25%), large-mid value (18.25%), and, since
April 1, 2008, growth (27.5%). The Advisor's Investment Committee recommended
adding the Fund's growth manager, Turner Investment Partners, based on analysis
of trends suggesting that a further diversification of the Fund was advantageous
to investors.
- - The Lipper Multi-cap Core Funds classification return was -22.79% for the
fiscal year.
- - Morningstar ranked this Fund in the 50th percentile of the Large Cap Equity
Universe for the fiscal year, which had a median return of -22.76%.
The Fund's overweighting in energy, the best performing sector in the quarter
ended June 30, 2008, and selling to underweight energy in the final fiscal
quarter was a successful strategy. However, the largest weighting in the Fund
was the information technology sector, which performed in the middle of the
market. Movement out of financial stocks, particularly highly volatile banking
stocks, helped dampen the downside risk. Overweighting to healthcare was also
beneficial, while underweighting consumer staples was not.
As noted above, this Fund is a blend of four major investment styles, the
conservative "core" management of Freeman Associates Investment Management, LLC;
a more aggressive "alpha" manager, SKBA Capital Management, LLC's Value
Opportunity style in the large and mid-cap value arena; AMBS Investment Counsel,
LLC's Absolute Large Cap Value, a fundamental value approach; and the growth
style of Turner.
This Fund is tobacco-free and is included in Schwab's socially conscious group
of funds in its OneSource and Institutional lists.
(PIE CHART)
Freeman -- Core 36.00%
AMBS -- Fundamental Value 18.25%
SKBA -- Large-Mid Value 18.25%
Turner Investment -- Growth 27.50%
AHA SOCIALLY RESPONSIBLE EQUITY FUND
This Fund seeks environmentally sustainable investments and companies that are
good corporate citizens of the globe. The Fund carries out this objective
through a value-oriented style, while most socially conscious funds follow a
growth investment style. The Fund completed its third full fiscal year with
commendable performance. It is "green" and designed to meet the social
guidelines of church-based organizations. The Fund's Institutional Class
returned -16.24% for the fiscal year, while the Class N (no-load) shares
returned -16.46%.These returns are ahead of the -19.88% of the KLD Domini 400
Social Index. Returns were aided by overweights in natural gas energy stocks
through June and paring back investments in the financial sector.
- - Lipper named this Fund a LIPPER LEADER for Consistent Return and Total
Return in August 2008.
AHA INVESTMENT FUNDS | PAGE 5
letter to our shareholders
SEPTEMBER 30, 2008
- - Morningstar ranks this Fund in the upper quartile of its Large Cap Value
universe, and the Fund has a four star rating.
The Fund's sub-advisor, SKBA Capital Management, LLC, uses their Socially
Responsible Value investment style, and follows the social guidelines of the
U.S. Conference of Catholic Bishops. SKBA researches companies that have good
environmental sustainability, human rights and governance track records.
Currently, seven large non-profit hospital systems in the U.S. are investors in
this Fund through their employee retirement plans. This Fund is included by
Charles Schwab in its socially conscious universe of funds and is also on the
Fidelity/NFS and Pershing Fundvest and Ameriprise platforms.
NEW FISCAL YEAR
The AHA Funds are all tobacco-free, and the AHA Socially Responsible Equity Fund
seeks out environmentally sustainable investments and other socially conscious
objectives. The AHA Funds are listed by Schwab, both Institutional and
OneSource, under socially conscious funds. The AHA Funds are also available for
purchase on Fidelity/NFS,Wachovia, City National Securities, Ameriprise and
Pershing/ Fundvest platforms. We want to thank our shareholders for their
confidence in the AHA Investment Funds.
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 ADVISOR HAS AN AGREEMENT IN PLACE TO WAIVE FEES. IN THE ABSENCE OF SUCH
WAIVERS, TOTAL RETURN WOULD BE REDUCED.
MUTUAL FUND INVESTING INVOLVES RISK. PRINCIPAL LOSS IS POSSIBLE.
CHANGING INTEREST RATES CAN ADVERSELY AFFECT THE VALUE OF AN INVESTMENT IN THE
AHA LIMITED AND FULL MATURITY FUNDS.
THE S&P 500 INDEX IS A BROAD BASED UNMANAGED INDEX OF 500 STOCKS WHICH IS WIDELY
RECOGNIZED AS REPRESENTATIVE OF THE EQUITY MARKET IN GENERAL. THE BARCLAYS
INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX IS A MARKET VALUE WEIGHTED
PERFORMANCE BENCHMARK FOR GOVERNMENT AND CORPORATE FIXED-RATE DEBT ISSUES WITH
MATURITIES BETWEEN ONE AND TEN YEARS. THE MERRILL LYNCH 1-3 TREASURY YEAR INDEX
IS A MARKET VALUE WEIGHTED INDEX OF U.S. TREASURY SECURITIES WITH MATURITIES OF
1-3 YEARS.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. PLEASE
READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
DISTRIBUTED BY SEI INVESTMENTS DISTRIBUTION CO.
AHA INVESTMENT FUNDS | PAGE 6
fund overview
SEPTEMBER 30, 2008
AHA LIMITED MATURITY FIXED INCOME FUND
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
(PERFORMANCE GRAPH)
AHA Limited Maturity
Fixed Income, Merrill Lynch
Institutional Class Merrill Lynch 1-3 Year 3-Month U.S.
Shares Treasury Index Treasury Index
-------------------- ----------------------- --------------
9/30/98 $10,000 $10,000 $10,000
9/30/99 10,291 10,323 10,470
9/30/00 10,858 10,920 11,076
9/30/01 11,961 12,054 11,679
9/30/02 12,577 12,735 11,912
9/30/03 12,922 13,068 12,069
9/30/04 13,016 13,205 12,202
9/30/05 13,102 13,335 12,522
9/30/06 13,559 13,833 13,085
9/30/07 14,188 14,635 13,768
9/30/08 14,549 15,553 14,168
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 N
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. Please refer to Note 3 in Notes to Financial Statements for expense
limitations.
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) 2.54% 3.55% 2.40% 3.82% 5.11%
---- ---- ---- ---- ----
Class N(2) 2.29% 3.31% N/A N/A 2.57%
---- ---- ---- ---- ----
Merrill Lynch 1-3 Year
Treasury Index 6.27% 5.26% 3.54% 4.52% 5.91%
---- ---- ---- ---- ----
Merrill Lynch 3-Month
U.S. Treasury Index 2.90% 4.20% 3.26% 3.55% 4.63%
---- ---- ---- ---- ----
(1) Commenced operations on October 31, 1988.
(2) Commenced operations on October 22, 2004. Total cumulative return since
inception for the Class N Shares was 10.53% as of September 30, 2008.
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
--------------
FNMA, 6.000%, 05/15/11 3.5
U.S. Treasury Note, 6.500%,
02/15/10 3.4
FHLMC, 7.000%, 03/15/10 3.4
U.S. Treasury Note, 6.000%,
08/15/09 3.3
U.S. Treasury Note, 3.500%,
12/15/09 3.1
FHLMC REMIC, Ser R016, Cl AM,
5.125%, 06/15/18 2.9
FNMA, 5.375%, 11/15/11 2.3
U.S. Treasury Note, 4.875%,
02/15/12 2.2
Verizon Communications, 7.250%,
12/01/10 2.2
U.S. Treasury Note, 4.125%,
08/13/12 2.2
AHA INVESTMENT FUNDS | PAGE 7
fund overview
SEPTEMBER 30, 2008
AHA FULL MATURITY FIXED INCOME FUND
Comparison of Change in the Value of a $10,000 Investment in the AHA Full
Maturity Fixed Income Fund, Institutional Class, versus the Barclays
Intermediate Government/Credit Total Return Index and the Barclays U.S.
Aggregate Bond Index
(PERFORMANCE GRAPH)
AHA Full Maturity
Fixed Income, Barclays Intermediate
Institutional Class Government/Credit Barclays U.S.
Shares Total Return Index Aggregate Bond Index
------------------- ---------------------- --------------------
9/30/98 $10,000 $10,000 $10,000
9/30/99 9,926 10,063 9,963
9/30/00 10,592 10,692 10,660
9/30/01 11,864 12,070 12,041
9/30/02 12,702 13,048 13,076
9/30/03 13,424 13,832 13,783
9/30/04 13,887 14,199 14,290
9/30/05 14,179 14,412 14,689
9/30/06 14,608 14,922 15,229
9/30/07 15,263 15,734 16,010
9/30/08 15,532 16,230 16,596
This chart assumes an initial gross investment of $10,000 for the AHA Full
Maturity Fixed Income Fund - Institutional Class Shares and the Barclays
Intermediate Government/Credit Total Return Index and the Barclays U.S.
Aggregate Bond Index. Performance figures include reinvested dividends and
capital gains. Class N 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. Please refer to Note 3 in Notes to Financial
Statements for expense limitations.
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) 1.76% 3.09% 2.96% 4.50% 6.31%
---- ---- ---- ---- ----
Class N(2) 1.42% 2.77% N/A N/A 2.99%
---- ---- ---- ---- ----
Barclays
Intermediate
Government/Credit
Total Return Index 3.15% 4.04% 3.25% 4.96% 6.71%
---- ---- ---- ---- ----
Barclays
U.S. Aggregate
Bond Index 3.66% 4.15% 3.78% 5.20% 7.21%
---- ---- ---- ---- ----
(1) Commenced operations on October 20, 1988.
(2) Commenced operations on May 11, 2004. Total cumulative return since
inception for the Class N Shares was 13.88% as of September 30, 2008.
BARCLAYS U.S. AGGREGATE BOND INDEX
The Barclays 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.
BARCLAYS 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.
Top Ten Holdings
% OF PORTFOLIO
--------------
U.S. Treasury Bond, 6.250%,
08/15/23 7.6
FNMA, 6.000%, 05/15/11 7.0
FNMA, 5.500%, 04/01/36 3.2
U.S. Treasury Note, 4.250%,
08/15/13 2.6
U.S. Treasury Note, 4.875%,
08/15/16 2.5
U.S. Treasury Note, 4.750%,
05/15/14 2.5
FNMA, 4.625%, 10/15/13 2.5
U.S. Treasury Note, 4.250%,
11/15/17 2.4
FHLMC, 4.375%, 07/17/15 2.1
FNMA, 4.375%, 09/15/12 1.9
AHA INVESTMENT FUNDS | PAGE 8
fund overview
SEPTEMBER 30, 2008
AHA BALANCED FUND
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
Barclays U.S. Aggregate Bond Index and the Merrill Lynch 3-Month U.S. Treasury
Index
(PERFORMANCE GRAPH)
AHA Balanced Fund, Merrill Lynch
Institutional Class 60/30/10 Barclays U.S. 3-Month U.S.
Shares Hybrid Index S&P 500 Index Aggregate Bond Index Treasury Index
------------------- ------------ ------------- -------------------- --------------
9/30/98 $10,000 $10,000 $10,000 $10,000 $10,000
9/30/99 11,602 11,691 12,780 9,963 10,470
9/30/00 13,626 12,944 14,478 10,660 11,076
9/30/01 12,627 11,272 10,624 12,041 11,679
9/30/02 11,434 10,128 8,447 13,076 11,912
9/30/03 13,055 11,785 10,508 13,783 12,069
9/30/04 14,565 12,908 11,966 14,290 12,202
9/30/05 16,209 14,000 13,431 14,689 12,522
9/30/06 17,557 15,123 14,881 15,229 13,085
9/30/07 19,220 16,922 17,327 16,010 13,768
9/30/08 16,782 14,832 13,519 16,596 14,168
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 Barclays 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. Please refer to Note 3 in Notes to
Financial Statements for expense limitations.
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) (12.68)% 1.17% 5.15% 5.31% 8.23%
------ ---- ---- ---- ----
60/30/10 Hybrid Index (12.35)% 1.94% 4.71% 4.02% 8.66%
------ ---- ---- ---- ----
S&P 500 Index (21.98)% 0.22% 5.17% 3.06% 9.74%
------ ---- ---- ---- ----
Barclays U.S. Aggregate
Bond Index 3.66% 4.15% 3.78% 5.20% 7.18%
------ ---- ---- ---- ----
Merrill Lynch 3-Month
U.S. Treasury Index 2.90% 4.20% 3.26% 3.55% 5.00%
------ ---- ---- ---- ----
(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 Barclays 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.
BARCLAYS U.S. AGGREGATE BOND INDEX
The Barclays 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
--------------
FNMA, 6.000%, 05/15/11 8.5
U.S. Treasury Bond, 6.250%,
08/15/23 8.4
U.S. Treasury Bond, 3.125%,
08/31/13 5.1
FHLMC, 4.875%, 02/17/09 5.1
Exxon Mobil 2.2
General Electric 1.5
Johnson & Johnson 1.1
Discover Card Master Trust I,
Ser 2003-3, Cl A, 2.690%,
09/15/12 1.1
Procter & Gamble 1.0
Microsoft 1.0
* Excludes cash equivalents.
AHA INVESTMENT FUNDS | PAGE 9
fund overview
SEPTEMBER 30, 2008
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
(PERFORMANCE GRAPH)
AHA Diversified
Equity Fund,
Institutional Class
Shares S&P 500 Index
------------------- -------------
9/30/98 $10,000 $10,000
9/30/99 12,504 12,780
9/30/00 15,070 14,478
9/30/01 12,792 10,624
9/30/02 10,467 8,447
9/30/03 12,738 10,508
9/30/04 14,796 11,966
9/30/05 17,234 13,431
9/30/06 18,984 14,881
9/30/07 21,248 17,327
9/30/08 16,419 13,519
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 N
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. Please refer to Note 3 in Notes to Financial Statements for expense
limitations.
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) (22.73)% (1.60)% 5.21% 5.08% 9.84%
------ ----- ---- ---- ----
Class N(2) (22.93)% (1.87)% 4.92% N/A 6.76%
------ ----- ---- ---- ----
S&P 500 Index (21.98)% 0.22% 5.17% 3.06% 9.74%
(1) Commenced operations on October 20, 1988.
(2) Commenced operations on December 30, 2002. Total cumulative return since
inception for the Class N Shares was 45.76% as of September 30, 2008.
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
--------------
Johnson & Johnson 2.2
Hewlett Packard 1.7
General Electric 1.5
Exxon Mobil 1.4
3M 1.3
Wal-Mart Stores 1.3
IBM 1.3
ConocoPhillips 1.2
General Mills 1.2
Time Warner 1.2
* Excludes cash equivalents.
AHA INVESTMENT FUNDS | PAGE 10
fund overview
SEPTEMBER 30, 2008
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
(PERFORMANCE GRAPH)
AHA Socially
Responsible Equity
Fund, Institutional
Class Shares Domini 400 Social Index
------------------- -----------------------
1/3/2005 $10,000 $10,000
9/30/2005 10,356 10,085
9/30/2006 11,153 11,047
9/30/2007 12,702 12,588
9/30/2008 10,639 10,085
This chart assumes an initial gross investment of $10,000 made on January 3,
2005 (the Fund's inception date) 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 N 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. Please refer
to Note 3 in Notes to Financial Statements for expense limitations.
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 Three-Year Inception
Shares Return Return to Date
- ------ -------- ---------- ----------
Institutional Class(1) (16.24)% 0.90% 1.67%
------- ---- ----
Class N(2) (16.46)% 0.65% 1.03%
------- ---- ----
KLD Domini 400 Social Index (19.88)% 0.00% 0.23%
(1) Commenced operations on January 3, 2005.
(2) Commenced operations on August 12, 2005. Total cumulative return since
inception for the Class N Shares was 3.26% as of September 30, 2008.
THE KLD 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
--------------
Marsh & McLennan 4.3
NASDAQ Stock Market 3.6
Johnson & Johnson 3.6
Kimberly-Clark 3.4
Kraft Food, Cl A 3.2
Atmos Energy 3.2
Quest Diagnostics 3.2
Patterson-UTI Energy 3.0
Brookfield Asset Management, Cl A 2.9
Portland General Electric 2.9
* Excludes cash equivalents.
AHA INVESTMENT FUNDS | PAGE 11
schedule of investments
SEPTEMBER 30, 2008
AHA LIMITED MATURITY FIXED INCOME FUND
TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Corporate Bonds 30.3%
U.S. Government Mortgage-Backed Obligations 23.6%
U.S. Government Agency Obligations 21.9%
U.S. Treasury Obligations 21.0%
Cash Equivalent 1.3%
Mortgage-Backed Securities 1.0%
Municipal Bonds 0.9%
* Percentages based on total investments.
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------- ----------- -----------
CORPORATE BONDS [30.1%]
AEROSPACE & DEFENSE [0.4%]
United Technologies
7.125%, 11/15/10 $ 175 $ 190
4.375%, 05/01/10 200 203
-----------
TOTAL AEROSPACE & DEFENSE 393
===========
AUTOMOTIVE [0.5%]
Daimler Finance North
America
4.875%, 06/15/10 500 498
===========
BANKS [4.9%]
Bank of America
4.375%, 12/01/10 300 288
FHLB
4.500%, 10/09/09 1,700 1,723
HSBC Holding
7.500%, 07/15/09 200 201
U.S. Bank, NA
6.375%, 08/01/11 1,700 1,716
Wachovia
4.375%, 06/01/10 350 307
Wells Fargo Bank
7.550%, 06/21/10 300 310
-----------
TOTAL BANKS 4,545
===========
CHEMICALS [0.3%]
Dow Chemical
5.750%, 12/15/08 250 250
===========
COMPUTER SYSTEM DESIGN & SERVICES [0.4%]
IBM
4.950%, 03/22/11 390 400
===========
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------- ----------- -----------
ELECTRICAL PRODUCTS [0.3%]
Public Service Electric & Gas,
Ser C, MTN
4.000%, 11/01/08 $ 250 $ 250
===========
ENERGY [0.8%]
Exelon Generation
6.950%, 06/15/11 200 202
Florida Power
4.500%, 06/01/10 500 504
-----------
TOTAL ENERGY 706
===========
FINANCE AUTO LOANS [0.3%]
Toyota MotorCredit
5.500%, 12/15/08 300 300
===========
FINANCIAL SERVICES [3.5%]
American Express Credit, MTN
5.000%, 12/02/10 300 280
American General Finance,
Ser H, MTN
5.375%, 10/01/12 1,700 929
Boeing Capital
6.100%, 03/01/11 250 263
Caterpillar Financial Services
5.050%, 12/01/10 500 502
General Electric Capital, MTN
4.875%, 10/21/10 300 291
John Deere Capital
7.000%, 03/15/12 500 525
National Rural Utilities
Cooperative Finance
4.375%, 10/01/10 500 500
-----------
TOTAL FINANCIAL SERVICES 3,290
===========
FOOD, BEVERAGE & TOBACCO [1.6%]
Campbell Soup
6.750%, 02/15/11 500 532
Coca-Cola
5.750%, 03/15/11 245 257
Coca-Cola Enterprises
8.500%, 02/01/12 200 221
Kellogg
6.600%, 04/01/11 200 208
Unilever Capital
7.125%, 11/01/10 250 267
-----------
TOTAL FOOD, BEVERAGE & TOBACCO 1,485
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 12
schedule of investments
SEPTEMBER 30, 2008
AHA LIMITED MATURITY FIXED INCOME FUND (CONTINUED)
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------- ----------- -----------
FOOD-RETAIL [0.2%]
Safeway
6.500%, 03/01/11 $ 200 $ 206
===========
INSURANCE [0.2%]
Allstate
7.200%, 12/01/09 200 203
===========
INVESTMENT BANKER/BROKER DEALER [5.9%]
Credit Suisse First Boston
6.125%, 11/15/11 1,700 1,673
3.875%, 01/15/09 300 297
Goldman Sachs Group
4.500%, 06/15/10 350 325
Merrill Lynch, MTN
4.250%, 02/08/10 1,700 1,616
Morgan Stanley
6.750%, 04/15/11 1,700 1,258
4.250%, 05/15/10 350 284
-----------
TOTAL INVESTMENT BANKER/BROKER DEALER 5,453
===========
MULTI-MEDIA [2.3%]
Walt Disney, MTN
6.375%, 03/01/12 1,700 1,792
5.700%, 07/15/11 300 309
-----------
TOTAL MULTI-MEDIA 2,101
===========
PETROLEUM & FUEL PRODUCTS [3.0%]
Conoco Funding
6.350%, 10/15/11 1,700 1,761
ConocoPhillips
8.750%, 05/25/10 500 537
Occidental Petroleum, MTN
4.250%, 03/15/10 500 504
-----------
TOTAL PETROLEUM & FUEL PRODUCTS 2,802
===========
REITS-REGIONAL MALLS [0.4%]
Simon Property Group
5.600%, 09/01/11 350 345
===========
RETAIL [0.8%]
Target
5.400%, 10/01/08 250 250
Wal-Mart Stores
6.875%, 08/10/09 200 205
4.125%, 02/15/11 300 302
-----------
TOTAL RETAIL 757
===========
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------- ----------- -----------
TELEPHONES & TELECOMMUNICATIONS [4.3%]
AT&T
6.250%, 03/15/11 $ 1,700 $ 1,718
Bellsouth Telecommunications
5.875%, 01/15/09 300 302
Verizon Communications
7.250%, 12/01/10 1,950 2,029
-----------
TOTAL TELEPHONES & TELECOMMUNICATIONS 4,049
===========
TOTAL CORPORATE BONDS
(Cost $29,879) 28,033
===========
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS [23.4%]
FFCB, Ser IA2, Cl 1
5.220%, 10/21/13 573 578
FFCB, Ser IA8, Cl 1
4.650%, 01/21/14 1,295 1,290
FHLB
4.375%, 03/17/10 1,825 1,853
3.750%, 01/08/10 1,000 1,006
FHLMC REMIC, Ser R003, Cl AG
5.125%, 10/15/15 802 809
FHLMC REMIC, Ser R006, Cl AK
5.750%, 12/15/18 1,399 1,431
FHLMC REMIC, Ser R007, Cl AC
5.875%, 05/15/16 672 687
FHLMC REMIC, Ser R009, Cl AJ
5.750%, 12/15/18 1,174 1,192
FHLMC REMIC, Ser R015, Cl AN
3.750%, 02/15/13 1,541 1,523
FHLMC REMIC, Ser R016, Cl AM
5.125%, 06/15/18 2,671 2,682
FHLMC, Pool G18247
5.000%, 04/01/23 314 312
FHLMC, Pool J04241
5.500%, 01/01/22 840 846
FHLMC, Pool J04459
5.000%, 03/01/22 237 235
FHLMC, Pool J04492
5.000%, 03/01/22 369 367
FHLMC, Pool J04508
5.000%, 03/01/22 217 215
FHLMC, Pool J07575
5.000%, 04/01/23 315 313
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 13
schedule of investments
SEPTEMBER 30, 2008
AHA LIMITED MATURITY FIXED INCOME FUND (CONTINUED)
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------- ----------- -----------
FNMA, Pool 257234
5.000%, 06/01/23 $ 979 $ 973
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%, 12/01/20 689 687
FNMA, Pool 837196
5.500%, 02/01/21 669 675
FNMA, Pool 933915
4.500%, 06/01/23 489 477
FNMA, Pool 961540
5.500%, 02/01/23 718 725
FNMA, Pool 961783
4.500%, 02/01/23 924 901
FNMA, Pool 962703
4.500%, 04/01/23 290 283
GNMA, Pool 2003-31 PB, Cl PB
5.500%, 02/16/32 1,713 1,736
-----------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $21,794) 21,799
===========
U.S. GOVERNMENT AGENCY OBLIGATIONS [21.7%]
FHLB
4.375%, 09/17/10 615 627
FHLMC
7.000%, 03/15/10 3,010 3,172
5.250%, 05/21/09 980 991
4.250%, 07/15/09 675 681
4.125%, 07/12/10 1,700 1,729
FHLMC, Pool G12806
5.500%, 09/01/22 471 475
FHLMC, Pool G13118
4.500%, 04/01/23 1,659 1,615
FHLMC, Pool G18251
5.000%, 05/01/23 486 483
FNMA
6.250%, 02/01/11 1,475 1,543
6.000%, 05/15/11 3,010 3,213
5.375%, 11/15/11 1,985 2,098
4.875%, 04/15/09 685 690
4.750%, 03/12/10 1,700 1,738
3.250%, 02/15/09 1,105 1,105
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $20,183) 20,160
===========
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
- ----------- ----------- -----------
U.S. TREASURY OBLIGATIONS [20.8%]
U.S. Treasury Notes
6.500%, 02/15/10 $ 3,000 $ 3,189
6.000%, 08/15/09 3,000 3,105
4.875%, 02/15/12 1,900 2,042
4.750%, 01/31/12 1,800 1,929
4.625%, 07/31/09 1,300 1,330
4.500%, 05/15/10 535 557
4.500%, 02/28/11 325 344
4.500%, 03/31/12 1,635 1,739
4.125%, 08/31/12 1,900 2,003
3.625%, 10/31/09 300 306
3.500%, 12/15/09 2,800 2,852
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $19,283) 19,396
===========
MORTGAGE-BACKED SECURITIES [1.0%]
Bear Stearns Commercial Mortgage
Securities, Ser 2001-TOP2, Cl A1
6.080%, 02/15/35 175 175
GMAC Commercial Mortgage
Securities, Ser 2004-C3, Cl A2
3.950%, 12/10/41 70 69
JPMorgan Chase Commercial
Mortgage, Ser 2005-LDP5, Cl A1
5.035%, 12/15/44 423 419
Morgan Stanley Capital Investments,
Ser 2005-T17, Cl A2
4.110%, 12/13/41 276 273
-----------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $954) 936
===========
MUNICIPAL BONDS [0.9%]
Philadelphia School District,
Ser A, GO, FSA
Pre-Refunded @ 100 (A)
5.750%, 02/01/11 625 667
State of Washington, Ser B, GO,
FSA Pre-Refunded @ 100 (A)
6.000%, 01/01/10 125 130
-----------
TOTAL MUNICIPAL BONDS
(Cost $804) 797
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 14
schedule of investments
SEPTEMBER 30, 2008
AHA LIMITED MATURITY FIXED INCOME FUND (CONCLUDED)
VALUE
DESCRIPTION SHARES (000)
- ----------- ----------- -----------
CASH EQUIVALENT [1.2%]
AIM STIT-Treasury Portfolio,
0.800%* 1,162,351 $ 1,162
-----------
TOTAL CASH EQUIVALENT
(Cost $1,162) 1,162
===========
TOTAL INVESTMENTS [99.1%]
(Cost $94,059) $ 92,283
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $93,113,055.
* THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
(A) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE.
CL -- CLASS
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
FSA -- FINANCIAL SECURITY ASSISTANCE
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GO -- GENERAL OBLIGATION
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 15
schedule of investments
SEPTEMBER 30, 2008
AHA FULL MATURITY FIXED INCOME FUND
TYPE OF SECURITY WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Corporate Bonds 27.9%
U.S. Government Agency Obligations 20.5%
U.S. Treasury Obligations 18.4%
U.S. Government Mortgage-Backed Obligations 17.2%
Mortgage-Backed Securities 11.3%
Asset-Backed Securities 3.0%
Cash Equivalent 1.4%
Foreign Government Bond 0.2%
Municipal Bond 0.1%
* Percentages based on total investments.
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
CORPORATE BONDS [27.7%]
AEROSPACE & DEFENSE [0.5%]
United Technologies
4.375%, 05/01/10 $ 215 $ 219
=======
AGRICULTURE [0.2%]
Bunge NA Finance
5.900%, 04/01/17 100 86
=======
BANKS [4.1%]
AmSouth Bancorporation
6.750%, 11/01/25 75 57
Bank of America
10.200%, 07/15/15 100 112
5.650%, 05/01/18 315 265
Bank One
10.000%, 08/15/10 89 93
Deutsche Bank
6.000%, 09/01/17 180 170
Deutsche Bank Trust
7.250%, 10/15/11 46 46
Dresdner Bank - New York
7.250%, 09/15/15 150 147
European Investment Bank
4.625%, 03/21/12 450 467
HSBC Holding
7.500%, 07/15/09 285 287
Santander Central Hispano Issuances
7.625%, 09/14/10 100 106
-------
TOTAL BANKS 1,750
=======
BUILDING & CONSTRUCTION [0.3%]
Hanson Australia Funding
5.250%, 03/15/13 75 70
Masco
6.125%, 10/03/16 75 65
-------
TOTAL BUILDING & CONSTRUCTION 135
=======
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
CABLE/MEDIA [0.2%]
TCI Communications
7.875%, 08/01/13 $ 75 $ 78
=======
COMPUTER SYSTEM DESIGN & SERVICES [0.7%]
IBM, MTN
4.375%, 06/01/09 300 301
=======
DATA PROCESSING [0.2%]
Fiserv
6.125%, 11/20/12 100 97
=======
DIVERSIFIED OPERATIONS [0.4%]
Hutchison Whampoa International (A)
5.450%, 11/24/10 150 149
=======
DRUGS [0.9%]
Abbott Laboratories
5.600%, 05/15/11 325 336
Teva Pharmaceutical
5.550%, 02/01/16 75 70
-------
TOTAL DRUGS 406
=======
ENERGY [1.3%]
Carolina Power & Light
5.150%, 04/01/15 80 77
Exelon
5.625%, 06/15/35 75 58
Korea Electric Power
7.750%, 04/01/13 95 100
6.750%, 08/01/27 75 75
NiSource Finance
7.875%, 11/15/10 75 77
Pacific Gas & Electric
6.050%, 03/01/34 25 22
PPL Energy Supply, Ser A
5.700%, 10/15/15 75 68
Public Service Company
of Colorado, Ser 14
4.375%, 10/01/08 100 100
-------
TOTAL ENERGY 577
=======
FINANCIAL SERVICES [4.3%]
American Express Credit, MTN
7.300%, 08/20/13 285 275
American General Finance
8.450%, 10/15/09 100 70
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 16
schedule of investments
SEPTEMBER 30, 2008
AHA FULL MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
Associates Corp of North
America, Ser A
7.950%, 02/15/10 $ 75 $ 74
Caterpillar Financial
Services, MTN
6.200%, 09/30/13 265 265
Eksportsfinans, Ser G
5.125%, 10/26/11 300 309
General Electric Capital, MTN
5.500%, 04/28/11 330 317
General Electric Capital,
Ser A, MTN
6.000%, 06/15/12 75 72
HSBC Finance
5.000%, 06/30/15 75 67
Svensk Exportkredit
4.875%, 01/19/10 280 288
UFJ Finance Aruba
6.750%, 07/15/13 125 131
-------
TOTAL FINANCIAL SERVICES 1,868
=======
FOOD, BEVERAGE & TOBACCO [1.6%]
Cia de Bebidas das Americas
8.750%, 09/15/13 175 187
Coca Cola
5.350%, 11/15/17 290 287
Kraft Foods
6.500%, 08/11/17 190 183
Pepsi Bottling Holdings (A)
5.625%, 02/17/09 50 50
-------
TOTAL FOOD, BEVERAGE & TOBACCO 707
=======
INSURANCE [0.4%]
Protective Life
4.300%, 06/01/13 100 96
Travelers (B)
6.250%, 03/15/09 100 77
-------
TOTAL INSURANCE 173
=======
INVESTMENT BANKER/BROKER DEALER [4.4%]
Bear Stearns, MTN (B)
3.029%, 10/31/11 340 332
Citigroup
3.625%, 02/09/09 300 294
Credit Suisse USA
5.250%, 03/02/11 325 321
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
Goldman Sachs Group
6.600%, 01/15/12 $ 200 $ 186
5.150%, 01/15/14 75 62
4.069%, 06/28/10 (B) 100 89
Jefferies Group
6.450%, 06/08/27 100 74
Merrill Lynch
6.000%, 02/17/09 325 315
Merrill Lynch, Ser C, MTN (B)
3.014%, 02/05/10 70 66
Morgan Stanley
4.750%, 04/01/14 75 40
3.071%, 01/15/10 (B) 140 105
-------
TOTAL INVESTMENT BANKER/BROKER DEALER 1,884
=======
MANUFACTURING [0.5%]
General Electric
5.000%, 02/01/13 150 138
Tyco International Group
6.375%, 10/15/11 75 76
-------
TOTAL MANUFACTURING 214
=======
MEDICAL PRODUCTS [0.3%]
Johnson & Johnson
5.550%, 08/15/17 130 132
=======
METALS & MINING [0.4%]
Rio Tinto Finance USA
6.500%, 07/15/18 100 95
Vale Overseas
6.875%, 11/21/36 100 89
-------
TOTAL METALS & MINING 184
=======
MULTI-MEDIA [1.0%]
CBS
6.625%, 05/15/11 60 58
Time Warner
9.125%, 01/15/13 50 53
5.875%, 11/15/16 85 75
Viacom
7.700%, 07/30/10 75 77
Walt Disney, MTN
6.375%, 03/01/12 150 158
-------
TOTAL MULTI-MEDIA 421
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 17
schedule of investments
SEPTEMBER 30, 2008
AHA FULL MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
OIL, GAS & CONSUMABLE FUELS [1.4%]
ConocoPhillips
5.300%, 04/15/12 $ 300 $ 304
Shell International
5.625%, 06/27/11 300 316
-------
TOTAL OIL, GAS & CONSUMABLE FUELS 620
=======
PETROLEUM & FUEL PRODUCTS [0.3%]
Energy Transfer Partners
6.625%, 10/15/36 75 64
Pemex Project Funding Master Trust
9.125%, 10/13/10 50 53
-------
TOTAL PETROLEUM & FUEL PRODUCTS 117
=======
RETAIL [1.7%]
Home Depot
5.250%, 12/16/13 310 285
Lowe's
5.000%, 10/15/15 200 192
Target
6.350%, 01/15/11 250 258
-------
TOTAL RETAIL 735
=======
SECURITY BROKERS & DEALERS [0.1%]
iStar Financial
5.850%, 03/15/17 100 49
=======
SHORT-TERM BUSINESS CREDIT [0.1%]
Citigroup Canada
5.200%, 06/01/15 100 49
=======
TELEPHONES & TELECOMMUNICATIONS [2.1%]
British Telecommunications
9.125%, 12/15/30 100 100
8.625%, 12/15/10 (C) 60 63
Deutsche Telekom International Finance
8.750%, 06/15/30 75 73
8.500%, 06/15/10 25 26
France Telecom
7.750%, 03/01/11 50 52
New Cingular Wireless Services
8.750%, 03/01/31 75 83
SBC Communications
5.300%, 11/15/10 300 305
Sprint Capital
6.900%, 05/01/19 75 58
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
Telecom Italia Capital
7.200%, 07/18/36 $ 75 $ 59
Telefonica Emisiones
6.421%, 06/20/16 75 70
-------
TOTAL TELEPHONES &
TELECOMMUNICATIONS 889
=======
TRANSPORTATION SERVICES [0.3%]
FedEx
9.650%, 06/15/12 125 141
=======
TOTAL CORPORATE BONDS
(Cost $12,594) 11,981
=======
U.S. GOVERNMENT AGENCY OBLIGATIONS [20.3%]
FFCB
4.875%, 04/04/12 200 207
FHLMC
4.375%, 07/17/15 895 892
FNMA
6.125%, 03/15/12 640 691
6.000%, 05/15/11 2,825 3,016
5.000%, 02/13/17 475 485
4.625%, 10/15/13 1,050 1,081
4.375%, 09/15/12 800 816
4.250%, 09/25/22 203 202
FNMA, Pool 745418
5.500%, 04/01/36 1,382 1,380
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $8,700) 8,770
=======
U.S. TREASURY OBLIGATIONS [18.2%]
U.S.Treasury Bonds
9.125%, 05/15/18 200 282
6.250%, 08/15/23 2,725 3,272
U.S.Treasury Notes
4.875%, 08/15/16 1,015 1,099
4.750%, 05/15/14 1,000 1,092
4.250%, 08/15/13 1,050 1,115
4.250%, 11/15/17 1,000 1,036
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $7,667) 7,896
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 18
schedule of investments
SEPTEMBER 30, 2008
AHA FULL MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS [17.1%]
FHLMC Gold, Pool G11880
5.000%, 12/01/20 $ 134 $ 134
FHLMC REMIC, Ser 2720
5.000%, 12/15/16 148 150
FHLMC REMIC, Ser R003
5.500%, 08/15/16 157 159
FHLMC REMIC, Ser R009, Cl AJ
5.750%, 12/15/18 143 145
FHLMC REMIC, Ser R010, Pool
FHRR
R010 AB, Cl AB
5.500%, 12/15/19 296 298
FHLMC REMIC, Ser R010, Cl VA
5.500%, 04/15/17 132 133
FHLMC, Pool 160098
10.500%, 01/01/10 1 1
FHLMC, Pool 1B2677 (B)
4.138%, 01/01/35 30 30
FHLMC, Pool 1B2683 (B)
4.102%, 01/01/35 18 18
FHLMC, Pool 1B2692 (B)
4.467%, 12/01/34 50 50
FHLMC, Pool 1Q0081 (B)
5.053%, 03/01/36 289 291
FHLMC, Pool C20300
6.500%, 01/01/29 14 15
FHLMC, Pool E01280
5.000%, 12/01/17 47 47
FHLMC, Pool G08003
6.000%, 07/01/34 147 149
FHLMC, Pool G11431
6.000%, 02/01/18 31 31
FHLMC, Pool G11911
5.000%, 02/01/21 348 347
FHLMC, Pool G12609
5.500%, 04/01/22 699 704
FHLMC, Pool G18124
6.000%, 06/01/21 120 122
FHLMC, Ser 2544, Cl QB
5.000%, 09/15/15 50 50
FHLMC, Ser 2730, Cl PD
5.000%, 05/15/21 150 150
FHLMC, Ser 2804, Cl VC
5.000%, 07/15/21 165 163
FHLMC, Ser 3122, Cl VA
6.000%, 01/15/17 123 127
FHLMC, Ser 3132, Cl MA
5.500%, 12/15/23 116 118
FNMA REMIC, Ser 2003, Cl 18
5.000%, 03/25/16 58 59
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
FNMA REMIC, Ser 2003, Cl 31
4.500%, 12/25/28 $ 62 $ 62
FNMA REMIC, Ser 2006-B2,
Cl AB
5.500%, 05/25/14 169 172
FNMA
5.000%, 10/15/11 575 601
4.125%, 05/15/10 400 406
FNMA, Pool 844809
5.000%, 11/01/35 161 158
FNMA, Pool 252570
6.500%, 07/01/29 28 29
FNMA, Pool 253183
7.500%, 04/01/30 2 2
FNMA, Pool 253398
8.000%, 08/01/30 8 9
FNMA, Pool 254510
5.000%, 11/01/17 61 61
FNMA, Pool 254545
5.000%, 12/01/17 118 119
FNMA, Pool 254685
5.000%, 04/01/18 90 90
FNMA, Pool 254949
5.000%, 11/01/33 81 79
FNMA, Pool 254953
5.000%, 11/01/18 48 49
FNMA, Pool 255814
5.500%, 08/01/35 215 215
FNMA, Pool 303168
9.500%, 02/01/25 6 7
FNMA, Pool 735060
6.000%, 11/01/34 101 103
FNMA, Pool 735228
5.500%, 02/01/35 90 89
FNMA, Pool 827223 (B)
4.756%, 11/25/08 167 167
FNMA, Pool 835744
5.000%, 09/01/35 526 513
FNMA, Pool 890042
5.500%, 07/01/22 457 462
FNMA, Ser 1992, Cl 136
6.000%, 08/25/22 33 34
FNMA, Ser 2003, Cl 16
5.000%, 10/25/15 98 99
FNMA, Ser 2004-W6, Cl 1A6
5.500%, 07/25/34 76 72
GNMA, Pool 479168
8.000%, 02/15/30 8 9
GNMA, Pool 780315
9.500%, 12/15/17 13 15
GNMA, Ser 2004, Cl 78
4.658%, 04/16/29 150 148
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 19
schedule of investments
SEPTEMBER 30, 2008
AHA FULL MATURITY FIXED INCOME FUND (CONTINUED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
GNMA, Ser 2006, Cl 15A
3.727%, 03/16/27 $ 125 $ 123
-------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS
(Cost $ 7,345) 7,384
=======
MORTGAGE-BACKED SECURITIES [11.2%]
Banc of America Alternative Loan Trust,
Ser 2004-2, Cl 5A1
5.500%, 03/25/19 110 108
Banc of America Alternative Loan Trust,
Ser 2005-4, Cl CB11
5.500%, 05/25/35 103 99
Banc of America Alternative Loan Trust,
Ser 2005-6, Cl 7A1
5.500%, 07/25/20 91 82
Banc of America Alternative Loan Trust,
Ser 2005-9, Cl 1CB3
5.500%, 10/25/35 107 101
Banc of America Alternative Loan Trust,
Ser 2006-2, Cl 6A1
5.500%, 03/25/21 123 112
Bear Stearns Commercial Mortgage
Security, Ser 2007-PW16,
Cl AM (B)
5.902%, 06/11/40 300 233
Capital One Multi-Asset Execution
Trust, Ser 2006-A9, Cl A9 (B)
2.503%, 05/15/13 500 487
Chase Mortgage Finance, Ser 2003-S13,
Cl A11
5.500%, 11/25/33 94 93
Citigroup
5.205%, 12/11/49 150 139
Citigroup Mortgage Loan Trust,
Ser 2005-9, Cl 2A2
5.500%, 11/25/35 97 95
Commercial Mortgage, Ser 2006-C8,
Cl A2B
5.248%, 12/10/46 185 176
Countrywide Asset-Backed Certificates,
Ser 2006-11, Cl 1AF3 (B)
6.050%, 12/25/31 200 144
Countrywide Asset-Backed Certificates,
Ser 2006-13, Cl 1AF2
5.884%, 01/25/37 200 191
Countrywide Asset-Backed Certificates,
Ser 2007-S1, Cl A6 (B)
5.693%, 12/25/36 193 80
Deutsche Bank Alternate Loan Trust,
Ser 2006-AR5, Cl 21A
6.000%, 10/15/21 158 132
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
Discover Card Master Trust I,
Ser 2003-4, Cl A1 (B)
2.598%, 05/15/11 $ 400 $ 399
First Horizon Alternative Mortgage
Securities, Ser 2006-FA8, Cl 2A1
5.750%, 02/25/37 138 117
GE Capital Commercial Mortgage,
Ser 2002-3A, Cl A2
4.996%, 12/10/37 150 142
GE Capital Commercial Mortgage,
Ser 2004-C3, Cl A4 (B)
5.189%, 12/10/37 200 186
GMAC Commercial Mortgage
Securities, Ser 2003-C1, Cl A2
4.079%, 05/10/36 225 206
GMAC Mortgage Corporation Loan
Trust, Ser 2004-J4, Cl A2
5.500%, 08/25/14 98 97
JP Morgan Alternative Loan Trust,
Ser 2006-S3, Cl A3A
6.000%, 08/25/36 200 164
JP Morgan Chase, Ser 2006-CB17,
Cl ASB
5.415%, 12/12/43 200 182
JP Morgan Mortgage Trust,
Ser 2006-A7, Cl 2A2 (B)
5.802%, 01/25/37 153 138
JP Morgan Mortgage Trust,
Ser 2006-A7, Cl 2A4R (B)
5.429%, 01/25/37 200 140
JP Morgan Mortgage Trust,
Ser 2007-A2, Cl 2A3 (B)
5.698%, 04/25/37 200 149
RAAC, Ser 2004-SP1, Cl AI4 (B)
5.285%, 08/25/27 136 127
Residential Accredit Loans,
Ser 2004-QS5, Cl A5
4.750%, 04/25/34 42 37
Salomon Brothers Mortgage Securities
VII, Cl A2
7.455%, 07/18/33 168 170
Wachovia Bank Commercial Mortgage,
Ser 2003-C3, Cl A2
4.867%, 02/15/35 150 140
WaMu Mortgage Pass Through
Certificates, Ser 2004-CB2, Cl 5A
5.000%, 07/25/19 175 168
-------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $5,434) 4,834
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 20
schedule of investments
SEPTEMBER 30, 2008
AHA FULL MATURITY FIXED INCOME FUND (CONCLUDED)
DESCRIPTION FACE AMOUNT (000) VALUE (000)
- ----------- ----------------- -----------
ASSET-BACKED SECURITIES [3.0%]
Bayview Financial Acquisition Trust,
Ser 2007-A, Cl 1A2
6.205%, 04/28/37 $ 200 $ 164
CitiFinancial Mortgage Securities,
Ser 2004-1, Cl AF2 (C)
2.645%, 04/25/34 39 38
Cityscape Home Equity Loan Trust,
Ser 1997-C, Cl A4 (C)
7.000%, 07/25/28 11 11
Contimortgage Home Equity Loan Trust,
Ser 1997-2, Cl A9
7.090%, 04/15/28 3 2
GMAC Mortgage Corporation Loan
Trust, Ser 2004-GH1, Cl A6 (B)
4.810%, 07/25/35 142 130
Green Tree Financial, Ser 1997-7, Cl A6
6.760%, 07/15/29 103 99
GSAA Home Equity Trust, Ser 2005-1,
Cl AF2 (B)
4.316%, 11/25/34 103 94
John Deere Owner Trust, Ser 2007-A,
Cl A3
5.040%, 07/15/11 323 324
Renaissance Home Equity, Ser 2007-1,
Cl AF2
5.512%, 04/25/37 200 188
Residential Accredit Loans,
Ser 2004-QS6, Cl A1
5.000%, 05/25/19 71 67
Residential Asset Mortgage Products,
Ser 2002-RS3, Cl AI5 (B)
5.572%, 06/25/32 65 56
Residential Asset Securities,
Ser 2003-KS5, Cl AI6 (B)
3.620%, 07/25/33 157 122
-------
TOTAL ASSET-BACKED SECURITIES
(Cost $1,417) 1,295
=======
FOREIGN GOVERNMENT BOND [0.2%]
National Bank of Hungary
8.875%, 11/01/13 75 88
-------
TOTAL FOREIGN GOVERNMENT BOND
(Cost $79) 88
=======
FACE AMOUNT
DESCRIPTION (000)/SHARES VALUE (000)
- ----------- ------------- -----------
MUNICIPAL BOND [0.0%]
LOUISIANA [0.0%]
Louisiana State, Tobacco
Settlement Financing Authority,
Ser 2001A, RB
6.360%, 05/15/25 $ 19 $ 19
-------
TOTAL MUNICIPAL BOND
(Cost $19) 19
=======
CASH EQUIVALENT [1.4%]
AIM STIT-Treasury Portfolio,
0.800%* 602,373 602
-------
TOTAL CASH EQUIVALENT
(Cost $602) 602
=======
TOTAL INVESTMENTS [99.1%]
(Cost $43,857) $42,869
=======
PERCENTAGES ARE BASED ON NET ASSETS OF $43,266,083.
* THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
(A) 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, 2008, THE
VALUE OF THESE SECURITIES AMOUNTED TO $199(000), REPRESENTING 0.5% OF THE
NET ASSETS OF THE FUND.
(B) FLOATING RATE SECURITY -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS
IS THE RATE IN EFFECT ON SEPTEMBER 30, 2008.
(C) STEP BOND -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS IS THE RATE
IN EFFECT ON SEPTEMBER 30, 2008.
CL -- CLASS
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
RB -- REVENUE BOND
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 21
schedule of investments
SEPTEMBER 30, 2008
AHA BALANCED FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
U.S. Treasury Obligations 14.6%
Mortgage-Backed Securities 11.0%
Financials - Common Stock 8.5%
U.S. Government Agency Obligation 8.5%
Information Technology - Common Stock 8.3%
Energy - Common Stock 7.4%
Health Care - Common Stock 6.7%
Industrials - Common Stock 6.4%
Consumer Staples - Common Stock 5.2%
U.S. Government Mortgage-Backed Obligations 5.1%
Consumer Discretionary - Common Stock 4.4%
Cash Equivalent 3.2%
Corporate Bonds 2.3%
Utilities - Common Stock 2.1%
Asset-Backed Securities 2.0%
Telecommunication Services - Common Stock 1.9%
Materials - Common Stock 1.9%
Foreign Government Bond 0.5%
* Percentages based on total investments.
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
COMMON STOCK [52.6%]
ADVERTISING [0.1%]
CBS, Cl B 928 $ 14
=======
AEROSPACE & DEFENSE [1.3%]
Boeing 1,115 64
General Dynamics 205 15
Honeywell International 634 26
Lockheed Martin 166 18
Northrop Grumman 505 31
Raytheon 278 15
United Technologies 242 15
-------
TOTAL AEROSPACE & DEFENSE 184
=======
AIRLINES [0.3%]
Southwest Airlines 2,411 35
=======
APPAREL/TEXTILES [0.3%]
Jones Apparel Group 940 17
Nike, Cl B 210 14
Polo Ralph Lauren, Cl A 118 8
-------
TOTAL APPAREL/TEXTILES 39
=======
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
AUTO COMPONENTS [0.1%]
Johnson Controls 397 $ 12
=======
AUTOMOTIVE [0.1%]
Ford Motor* 72 --
Paccar 364 14
-------
TOTAL AUTOMOTIVE 14
=======
BANKS [2.7%]
Bank of America 3,953 139
Bank of New York Mellon 2,250 73
Comerica 213 7
M&T Bank 165 15
PNC Financial Services Group 378 28
SunTrust Banks 375 17
Wells Fargo 2,700 101
-------
TOTAL BANKS 380
=======
BEAUTY PRODUCTS [1.0%]
Procter & Gamble 2,067 144
=======
BIOMEDICAL RESEARCH & PRODUCTS [0.1%]
Celgene* 302 19
=======
BIOTECHNOLOGY [0.6%]
Amgen* 782 46
Biogen Idec* 194 10
Gilead Sciences* 663 30
Millipore* 29 2
-------
TOTAL BIOTECHNOLOGY 88
=======
BROADCASTING & CABLE [1.0%]
Cisco Systems* 4,571 103
Motorola 263 2
Qualcomm 730 31
-------
TOTAL BROADCASTING & CABLE 136
=======
BUILDING & CONSTRUCTION [0.1%]
DR Horton 666 9
=======
BUSINESS SERVICES [0.4%]
Affiliated Computer Services, Cl A* 210 11
Computer Sciences* 599 24
Convergys* 145 2
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 22
schedule of investments
SEPTEMBER 30, 2008
AHA BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
eBay* 604 $ 13
Mastercard, Cl A 39 7
Xerox 8 --
-------
TOTAL BUSINESS SERVICES 57
=======
CHEMICALS [1.6%]
Air Products & Chemicals 897 61
CF Industries Holdings 240 22
Dow Chemical 833 27
Eastman Chemical 565 31
EI du Pont de Nemours 893 36
International Flavors & Fragrances 297 12
Monsanto 356 35
-------
TOTAL CHEMICALS 224
=======
COMMERCIAL BANKS [0.3%]
BB&T 1,089 41
=======
COMMUNICATION & MEDIA [1.3%]
Comcast, Cl A 2,209 43
DIRECTV Group* 299 8
Meredith 391 11
News, Cl A 2,470 30
Time Warner 5,970 78
Viacom, Cl B* 226 6
-------
TOTAL COMMUNICATION & MEDIA 176
=======
COMPUTER & ELECTRONICS RETAIL [0.1%]
GameStop, Cl A* 354 12
=======
COMPUTER SOFTWARE [1.6%]
Adobe Systems* 495 20
CA 584 12
Compuware* 490 5
Microsoft 5,298 141
Oracle* 1,992 40
-------
TOTAL COMPUTER SOFTWARE 218
=======
COMPUTER SYSTEM DESIGN & SERVICES [2.6%]
Apple* 681 77
Dell* 1,709 28
Hewlett-Packard 2,422 112
IBM 1,100 129
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
Lexmark International, Cl A* 378 $ 12
Sun Microsystems* 473 4
-------
TOTAL COMPUTER SYSTEM DESIGN & SERVICES 362
=======
COMPUTERS & PERIPHERALS [0.1%]
EMC* 1,270 15
=======
CONSTRUCTION & ENGINEERING [0.2%]
Jacobs Engineering Group* 481 26
=======
CONSUMER PRODUCTS & SERVICES [0.4%]
Colgate-Palmolive 6 1
Kimberly-Clark 758 49
-------
TOTAL CONSUMER PRODUCTS & SERVICES 50
=======
DIVERSIFIED CONSUMER SERVICES [0.2%]
H&R Block 1,036 24
=======
DIVERSIFIED MANUFACTURING [1.8%]
3M 581 40
General Electric 8,278 211
Parker Hannifin 7 --
-------
TOTAL DIVERSIFIED MANUFACTURING 251
=======
DIVERSIFIED METALS & MINING [0.1%]
Freeport-McMoRan Copper & Gold, Cl B 219 12
United States Steel 7 1
-------
TOTAL DIVERSIFIED METALS & MINING 13
=======
DRUGS [3.8%]
Abbott Laboratories 912 53
AmerisourceBergen, Cl A 294 11
Bristol-Myers Squibb 369 8
Forest Laboratories* 1,121 32
Johnson & Johnson 2,120 147
King Pharmaceuticals* 456 4
Merck 2,725 86
Pfizer 6,399 118
Watson Pharmaceuticals* 433 12
Wyeth 1,389 51
-------
TOTAL DRUGS 522
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 23
schedule of investments
SEPTEMBER 30, 2008
AHA BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
ELECTRICAL COMPONENTS & EQUIPMENT [0.1%]
Tyco Electronics 464 $ 13
=======
ELECTRICAL EQUIPMENT [0.2%]
Emerson Electric 601 25
=======
ELECTRICAL SERVICES [1.1%]
American Electric Power 622 23
Duke Energy 1,617 28
Exelon 208 13
FPL Group 711 36
Pinnacle West Capital 680 24
Public Service Enterprise Group 402 13
Southern 458 17
Xcel Energy 63 1
-------
TOTAL ELECTRICAL SERVICES 155
=======
ELECTRONIC EQUIPMENT & INSTRUMENTS [0.0%]
Agilent Technologies* 137 4
Jabil Circuit 149 1
-------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 5
=======
ENERGY [0.7%]
Edison International 1,343 54
Entergy 239 21
PG&E 462 17
-------
TOTAL ENERGY 92
=======
ENGINEERING SERVICES [0.3%]
Fluor 869 48
=======
ENTERTAINMENT [0.0%]
Carnival 5 --
International Game Technology 77 1
-------
TOTAL ENTERTAINMENT 1
=======
FINANCIAL SERVICES [1.5%]
American Express 1,839 65
Capital One Financial 614 31
Charles Schwab 1,058 28
CME Group, Cl A 1 --
Discover Financial Services 883 12
Hudson City Bancorp 1,027 19
NYSE Euronext 500 20
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
Sovereign Bancorp 625 $ 3
Western Union 1,306 32
-------
TOTAL FINANCIAL SERVICES 210
=======
FOOD, BEVERAGE & TOBACCO [2.2%]
Anheuser-Busch 187 12
Coca-Cola 1,253 66
General Mills 897 62
Kellogg Company 693 39
Pepsi Bottling Group 1,585 46
PepsiCo 777 55
Safeway 1,164 28
-------
TOTAL FOOD, BEVERAGE & TOBACCO 308
=======
GAS/NATURAL GAS [0.0%]
El Paso 31 --
=======
HEALTHCARE PRODUCTS & SERVICES [0.3%]
Applied Biosystems 105 4
Express Scripts, Cl A* 286 21
McKesson 4 --
Thermo Fisher Scientific* 223 12
UnitedHealth Group 303 8
-------
TOTAL HEALTHCARE PRODUCTS & SERVICES 45
=======
HOUSEHOLD FURNITURE & FIXTURES [0.0%]
Stanley Works 132 6
Whirlpool 5 --
-------
TOTAL HOUSEHOLD FURNITURE & FIXTURES 6
=======
INDEPENDENT POWER PRODUCERS & ENERGY TRADER [0.2%]
AES* 2,378 28
=======
INSURANCE [1.9%]
Aetna 45 2
Allstate 445 20
AON 212 9
Assurant 138 8
Chubb 296 16
Cincinnati Financial 928 26
Hartford Financial Services Group 240 10
MetLife 1,201 67
Principal Financial Group 244 11
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 24
schedule of investments
SEPTEMBER 30, 2008
AHA BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
Prudential Financial 322 $ 23
Tenet Healthcare* 8,064 45
Travelers 682 31
-------
TOTAL INSURANCE 268
=======
INVESTMENT BANKER/BROKER DEALER [1.9%]
Ameriprise Financial 625 24
Federated Investors, Cl B 300 9
Franklin Resources 512 45
Janus Capital Group 379 9
JPMorgan Chase 2,304 108
Northern Trust 750 54
T. Rowe Price Group 253 13
-------
TOTAL INVESTMENT BANKER/BROKER DEALER 262
=======
MACHINERY [0.7%]
Caterpillar 992 59
Cummins 551 24
Deere 180 9
Illinois Tool Works 7 --
-------
TOTAL MACHINERY 92
=======
MEDICAL PRODUCTS & SERVICES [1.4%]
Baxter International 149 10
Becton Dickinson 360 29
Boston Scientific* 1,647 20
Eli Lilly 960 42
Genzyme-General Division* 191 16
Hospira* 172 7
Intuitive Surgical* 141 34
St. Jude Medical* 64 3
WellPoint* 714 33
Zimmer Holdings* 35 2
-------
TOTAL MEDICAL PRODUCTS & SERVICES 196
=======
MEDICAL PRODUCTS MANUFACTURING [0.0%]
Covidien 112 6
=======
MULTI-MEDIA [0.4%]
Walt Disney 1,852 57
=======
OFFICE FURNITURE & FIXTURES [0.0%]
Autodesk* 162 5
=======
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
PAPER & RELATED PRODUCTS [0.2%]
International Paper 954 $ 25
MeadWestvaco 198 5
-------
TOTAL PAPER & RELATED PRODUCTS 30
=======
PETROLEUM & FUEL PRODUCTS [7.3%]
Anadarko Petroleum 246 12
Apache 441 46
Baker Hughes 199 12
BJ Services 34 1
Cabot Oil & Gas 102 4
Chesapeake Energy 472 17
ChevronTexaco 1,539 127
ConocoPhillips 1,795 131
Consol Energy 160 7
Devon Energy 393 36
ENSCO International 15 1
EOG Resources 218 19
Exxon Mobil 3,925 305
Halliburton 500 16
Hess 689 57
Massey Energy 492 18
Murphy Oil 31 2
Nabors Industries* 488 12
National Oilwell Varco* 226 11
Noble 104 5
Noble Energy 164 9
Occidental Petroleum 534 38
Peabody Energy 117 5
Schlumberger 494 39
Southwestern Energy* 1,124 34
Transocean 226 25
Weatherford International* 84 2
Williams 1,080 25
-------
TOTAL PETROLEUM & FUEL PRODUCTS 1,016
=======
PRINTING & PUBLISHING [0.3%]
Pitney Bowes 573 19
RR Donnelley & Sons 928 23
-------
TOTAL PRINTING & PUBLISHING 42
=======
RAILROADS [0.2%]
Burlington Northern Santa Fe 61 6
CSX 320 17
-------
TOTAL RAILROADS 23
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 25
schedule of investments
SEPTEMBER 30, 2008
AHA BALANCED FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
REAL ESTATE INVESTMENT TRUST [0.7%]
Apartment Investment & Management, Cl A 702 $ 25
Equity Residential 96 4
Host Hotels & Resorts 7 --
Public Storage 663 66
-------
TOTAL REAL ESTATE INVESTMENT TRUST 95
=======
RETAIL [3.3%]
Abercrombie & Fitch, Cl A 11 --
Best Buy 449 17
Big Lots* 871 24
Costco Wholesale 236 15
CVS 333 11
Family Dollar Stores 31 1
Gap 2,086 37
Home Depot 1,608 42
Kohl's* 275 13
Kroger 1,299 36
Limited Brands 267 5
Lowe's 1,193 28
Macy's 135 2
McDonald's 697 43
RadioShack 85 2
Supervalu 1,722 37
SYSCO 11 --
Target 199 10
Tiffany 230 8
TJX 330 10
Walgreen 55 2
Wal-Mart Stores 1,840 110
-------
TOTAL RETAIL 453
=======
SCHOOLS [0.0%]
Apollo Group, Cl A* 95 6
=======
SEMI-CONDUCTORS [1.3%]
Altera 76 2
Analog Devices 382 10
Intel 5,353 100
MEMC Electronic Materials* 216 6
Microchip Technology 271 8
Novellus Systems* 388 8
Texas Instruments 1,738 37
Xilinx 358 8
-------
TOTAL SEMI-CONDUCTORS 179
=======
DESCRIPTION SHARES VALUE (000)
- ----------- -------- -----------
TELEPHONES & TELECOMMUNICATIONS [2.0%]
AT&T 3,035 $ 85
Corning 847 13
Embarq 435 18
Qwest Communications International 13,597 44
Sprint Nextel 1,386 8
Verizon Communications 3,234 104
-------
TOTAL TELEPHONES & TELECOMMUNICATIONS 272
=======
TRANSPORTATION SERVICES [0.4%]
FedEx 708 56
Norfolk Southern 11 1
Union Pacific 48 3
-------
TOTAL TRANSPORTATION SERVICES 60
=======
TRUCKING [0.3%]
Ryder System 626 39
=======
UTILITIES [0.1%]
PPL 262 10
=======
WASTE MANAGEMENT SERVICES [0.4%]
Waste Management 1,562 49
=======
WEB PORTALS/ISP [0.9%]
Amazon.com* 133 10
Expedia* 266 4
Google, Cl A* 163 65
Juniper Networks* 376 8
Symantec* 1,040 20
VeriSign* 217 6
Yahoo!* 512 9
-------
TOTAL WEB PORTALS/ISP 122
=======
WHOLESALE [0.1%]
Tyson Foods, Cl A 818 10
=======
TOTAL COMMON STOCK
(Cost $8,110) 7,293
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 26
schedule of investments
SEPTEMBER 30, 2008
AHA BALANCED FUND (CONTINUED)
FACE
AMOUNT
DESCRIPTION (000) VALUE (000)
- ----------- -------- -----------
U.S. TREASURY OBLIGATIONS [14.5%]
U.S. Treasury Bonds
9.125%, 05/15/18 $ 100 $ 141
6.250%, 08/15/23 975 1,171
U.S. Treasury Note
3.125%, 08/31/13 700 705
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,979) 2,017
=======
MORTGAGE-BACKED SECURITIES [11.0%]
Banc of America Alternative Loan Trust,
Ser 2005-6, Cl 7A1
5.500%, 07/25/20 30 27
Capital One Multi-Asset Execution Trust,
Ser 2006-A9, Cl A9 (A)
2.503%, 05/15/13 100 97
Chase Mortgage Finance, Ser 2003-S14, Cl 3A6
5.500%, 01/25/34 41 41
Citicorp Mortgage Securities,
Ser 2003-11, Cl 2A8
5.500%, 12/25/33 49 48
Citicorp Mortgage Securities,
Ser 2004-4, Cl A5
5.500%, 06/25/34 132 128
Citigroup Mortgage Loan Trust,
Ser 2005-9, Cl 2A2
5.500%, 11/25/35 48 47
Countrywide Alternative Loan Trust,
Ser 2005-50CB, Cl 4A1
5.000%, 11/25/20 29 27
Countrywide Alternative Loan Trust,
Ser 2005-85CB, Cl 3A1
5.250%, 02/25/21 62 60
Countrywide Alternative Loan Trust,
Ser 2006-7CB, Cl 3A1
5.250%, 05/25/21 48 45
Credit-Based Asset Servicing and Securitization,
Ser 2005-CB8, Cl AF2 (B)
5.300%, 12/25/35 49 46
Deutsche Bank Alternate Loan Trust,
Ser 2006-AR5, Cl 21A
6.000%, 10/15/21 79 66
Discover Card Master Trust I,
Ser 2003-3, Cl A (A)
2.690%, 05/15/14 150 146
FACE
AMOUNT
DESCRIPTION (000) VALUE (000)
- ----------- -------- -----------
First Horizon CMO,
Ser 2006-FA6, Cl 3A1
5.750%, 11/25/21 $ 63 $ 59
First Union National Bank CMO,
Ser 2001-C4, Cl A2
6.223%, 12/12/33 50 50
GE Capital Commercial Mortgage,
Ser 2002-3A, Cl A2
4.996%, 12/10/37 100 95
GE Capital Commercial Mortgage,
Ser 2004-C3, Cl A4 (A)
5.189%, 07/10/39 75 70
GMAC Commercial Mortgage Securities,
Ser 2003-C1, Cl A2
4.079%, 05/10/36 100 91
GMAC Mortgage Corporation Loan Trust,
Ser 2004-HE5, Cl A6 (A)
4.388%, 07/25/35 69 36
GMAC Mortgage Corporation Loan Trust,
Ser 2004-J4, Cl A2
5.500%, 08/25/14 49 48
JP Morgan Mortgage Trust,
Ser 2006-A7, Cl 2A4R (A)
5.429%, 01/25/37 100 70
JP Morgan Mortgage Trust,
Ser 2007-A2, Cl 2A3 (A)
5.698%, 04/25/37 100 75
RAAC, Ser 2004-SP1, Cl AI4 (A)
5.285%, 08/25/27 68 63
Residential Accredit Loans,
Ser 2004-QS5, Cl A5
4.750%, 04/25/34 21 19
Residential Funding Mortgage Securities I,
Ser 2003-S11, Cl A2
4.000%, 06/25/18 75 71
-------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $1,685) 1,525
=======
U.S. GOVERNMENT AGENCY OBLIGATION [8.5%]
FNMA
6.000%, 05/15/11 1,100 1,174
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATION
(Cost $1,172) 1,174
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 27
schedule of investments
SEPTEMBER 30, 2008
AHA BALANCED FUND (CONCLUDED)
FACE
AMOUNT
DESCRIPTION (000) VALUE (000)
- ----------- -------- -----------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATION [5.1%]
FHLMC
4.875%, 02/17/09 $ 700 $ 704
=======
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATION
(Cost $705) 704
=======
CORPORATE BONDS [2.3%]
BANKS [0.6%]
AmSouth Bancorporation
6.750%, 11/01/25 50 38
Dresdner Bank - New York
7.250%, 09/15/15 50 49
-------
TOTAL BANKS 87
=======
CONTAINERS & PACKAGING [0.4%]
Pactiv
7.950%, 12/15/25 50 51
=======
DATA PROCESSING [0.2%]
Fiserv
6.125%, 11/20/12 25 24
=======
INSURANCE [0.3%]
Protective Life
4.300%, 06/01/13 50 48
=======
PAPER & PAPER PRODUCTS [0.4%]
Westvaco
9.750%, 06/15/20 50 57
=======
PETROLEUM & FUEL PRODUCTS [0.2%]
Pemex Project Funding Master Trust
9.125%, 10/13/10 25 27
=======
TELEPHONES & TELECOMMUNICATIONS [0.2%]
New Cingular Wireless Services
8.750%, 03/01/31 25 28
=======
TOTAL CORPORATE BONDS
(Cost $351) 322
=======
FACE
AMOUNT
DESCRIPTION (000)/SHARES VALUE (000)
- ----------- ------------ -----------
ASSET-BACKED SECURITIES [2.0%]
Bayview Financial Acquisition Trust,
Ser 2007-A, Cl 1A2
6.205%, 04/28/37 $ 100 $ 82
Countrywide Asset-Backed Certificates,
Ser 2005-13, Cl AF2 (A)
5.294%, 01/25/27 45 45
GMAC Mortgage Corporation Loan Trust,
Ser 2004-GH1, Cl A6 (A)
4.810%, 07/25/35 71 65
Residential Accredit Loans,
Ser 2004-QS6, Cl A1
5.000%, 05/25/19 24 22
Residential Asset Mortgage Products,
Ser 2002-RS3, Cl AI5 (A)
5.572%, 06/25/32 75 65
-------
TOTAL ASSET-BACKED SECURITIES
(Cost $317) 279
=======
FOREIGN GOVERNMENT BOND [0.4%]
Hydro Quebec
11.750%, 02/01/12 50 63
-------
TOTAL FOREIGN GOVERNMENT BOND
(Cost $61) 63
=======
CASH EQUIVALENT [3.2%]
AIM STIT-Treasury Portfolio,
0.800% ** 437,664 438
-------
TOTAL CASH EQUIVALENT
(Cost $438) 438
=======
TOTAL INVESTMENTS [99.6%]
(Cost $14,818) $13,815
=======
PERCENTAGES ARE BASED ON NET ASSETS OF $13,872,146.
* NON-INCOME PRODUCING SECURITY.
** THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
(A) FLOATING RATE SECURITY -- THE RATE REPORTED IS THE RATE IN EFFECT ON
SEPTEMBER 30, 2008.
(B) STEP BOND -- THE RATE REFLECTED ON THE SCHEDULE OF INVESTMENTS IS THE RATE
IN EFFECT ON SEPTEMBER 30, 2008.
CL -- CLASS
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
ISP -- INTERNET SERVICE PROVIDER
SER -- SERIES
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 28
schedule of investments
SEPTEMBER 30, 2008
AHA DIVERSIFIED EQUITY FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Information Technology 16.9%
Financials 14.8%
Health Care 13.8%
Energy 12.2%
Industrials 10.8%
Consumer Staples 10.5%
Consumer Discretionary 8.8%
Materials 3.5%
Cash Equivalent 3.3%
Telecommunication Services 3.0%
Utilities 2.4%
* Percentages based on total investments.
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
COMMON STOCK [97.5%]
ADVERTISING [0.1%]
CBS, Cl B 5,411 $ 79
=======
AEROSPACE & DEFENSE [0.9%]
Boeing 4,347 249
General Dynamics 845 62
Honeywell International 2,438 101
Lockheed Martin 632 70
Northrop Grumman 2,020 122
Raytheon 605 33
United Technologies 1,031 62
-------
TOTAL AEROSPACE & DEFENSE 699
=======
AIRLINES [0.2%]
Southwest Airlines 9,174 133
=======
APPAREL/TEXTILES [0.2%]
Jones Apparel Group 3,690 68
Nike, Cl B 825 55
Polo Ralph Lauren, Cl A 471 32
-------
TOTAL APPAREL/TEXTILES 155
=======
AUTO COMPONENTS [0.1%]
Johnson Controls 1,576 48
=======
AUTOMOTIVE [0.8%]
Ford Motor* 262 1
Harley-Davidson 4,940 184
Honda Motor, ADR 14,000 422
Paccar 1,479 57
-------
TOTAL AUTOMOTIVE 664
=======
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
BANKS [3.1%]
Bank of America 15,303 $ 536
Bank of New York Mellon 17,994 586
Comerica 797 26
M&T Bank 623 56
PNC Financial Services Group 1,426 107
SunTrust Banks 1,463 66
US Bancorp 22,110 796
Wells Fargo 10,479 393
-------
TOTAL BANKS 2,566
=======
BEAUTY PRODUCTS [1.0%]
Estee Lauder, Cl A 2,980 149
Procter & Gamble 9,179 639
-------
TOTAL BEAUTY PRODUCTS 788
=======
BIOMEDICAL RESEARCH & PRODUCTS [1.0%]
Celgene* 3,467 219
Quest Diagnostics 10,905 564
-------
TOTAL BIOMEDICAL RESEARCH & PRODUCTS 783
=======
BIOTECHNOLOGY [1.5%]
Amgen* 3,022 179
Biogen Idec* 751 38
Genentech* 2,160 191
Gilead Sciences* 14,383 656
Millipore* 112 8
Myriad Genetics* 1,800 117
United Therapeutics* 790 83
-------
TOTAL BIOTECHNOLOGY 1,272
=======
BROADCASTING & CABLE [1.8%]
Cisco Systems* 31,612 713
F5 Networks* 5,050 118
Motorola 679 5
Qualcomm 15,359 660
-------
TOTAL BROADCASTING & CABLE 1,496
=======
BUILDING & CONSTRUCTION [0.0%]
DR Horton 2,548 33
=======
BUSINESS SERVICES [1.2%]
Affiliated Computer Services,
Cl A* 739 37
Computer Sciences* 2,206 89
Convergys* 604 9
eBay* 3,478 78
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 29
schedule of investments
SEPTEMBER 30, 2008
AHA DIVERSIFIED EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
Fiserv* 6,870 $ 325
Mastercard, Cl A 152 27
Visa, Cl A 4,020 247
Xerox 12,100 139
-------
TOTAL BUSINESS SERVICES 951
=======
CHEMICALS [1.7%]
Air Products & Chemicals 3,479 238
CF Industries Holdings 929 85
Dow Chemical 3,138 100
Eastman Chemical 2,219 122
EI du Pont de Nemours 3,382 136
International Flavors &
Fragrances 1,260 50
Monsanto 5,493 544
Rohm & Haas 2,300 161
-------
TOTAL CHEMICALS 1,436
=======
COMMERCIAL BANKS [0.2%]
BB&T 4,242 160
=======
COMMUNICATION & MEDIA [2.5%]
Cablevision Systems, Cl A 7,680 193
Comcast, Cl A 21,973 431
DISH Network, Cl A* 15,500 326
Meredith 1,577 44
News, Cl A 9,588 115
Time Warner 71,983 944
Viacom, Cl B* 1,144 28
-------
TOTAL COMMUNICATION & MEDIA 2,081
=======
COMPUTER & ELECTRONICS RETAIL [0.1%]
GameStop, Cl A* 1,396 48
=======
COMPUTER SOFTWARE [2.1%]
Adobe Systems* 8,313 328
CA 1,763 35
Compuware* 1,522 15
Microsoft 23,929 639
Oracle* 33,435 679
-------
TOTAL COMPUTER SOFTWARE 1,696
=======
COMPUTER SYSTEM DESIGN & SERVICES [5.0%]
Apple* 7,822 889
Dell* 34,910 575
Hewlett-Packard 29,603 1,369
IBM 8,743 1,023
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
Lexmark International, Cl A* 1,473 $ 48
QLogic* 4 --
Seagate Technology 14,400 174
Sun Microsystems* 1,952 15
-------
TOTAL COMPUTER SYSTEM DESIGN & SERVICES 4,093
=======
COMPUTERS & PERIPHERALS [0.4%]
EMC* 27,769 332
=======
CONSTRUCTION & ENGINEERING [0.1%]
Jacobs Engineering Group* 1,875 102
=======
CONSUMER PRODUCTS & SERVICES [1.8%]
Clorox 11,600 727
Kimberly-Clark 7,579 491
Mattel 15,000 271
-------
TOTAL CONSUMER PRODUCTS & SERVICES 1,489
=======
DIVERSIFIED CONSUMER SERVICES [0.1%]
H&R Block 3,938 90
=======
DIVERSIFIED MANUFACTURING [3.8%]
3M 15,972 1,091
General Electric 49,706 1,268
Parker Hannifin 5,339 283
Siemens, ADR 4,740 445
-------
TOTAL DIVERSIFIED MANUFACTURING 3,087
=======
DIVERSIFIED METALS & MINING [0.1%]
Freeport-McMoRan Copper
& Gold, Cl B 905 51
United States Steel 39 3
-------
TOTAL DIVERSIFIED METALS & MINING 54
=======
DRUGS [5.0%]
Abbott Laboratories 7,471 430
AmerisourceBergen, Cl A 1,187 45
Bristol-Myers Squibb 1,199 25
Forest Laboratories* 4,179 118
Johnson & Johnson 25,726 1,782
King Pharmaceuticals* 1,786 17
Merck 10,578 334
Pfizer 24,486 452
Schering-Plough 17,700 327
Watson Pharmaceuticals* 1,543 44
Wyeth 15,300 565
-------
TOTAL DRUGS 4,139
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 30
schedule of investments
SEPTEMBER 30, 2008
AHA DIVERSIFIED EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
ELECTRICAL COMPONENTS & EQUIPMENT [0.4%]
Tyco Electronics 12,027 $ 333
=======
ELECTRICAL EQUIPMENT [0.6%]
Baldor Electric 13,000 374
Emerson Electric 2,244 92
-------
TOTAL ELECTRICAL EQUIPMENT 466
=======
ELECTRICAL SERVICES [2.3%]
American Electric Power 2,443 90
Duke Energy 6,328 110
Exelon 788 49
First Solar* 1,820 344
FPL Group 6,466 325
Pinnacle West Capital 2,941 101
Portland General Electric 21,000 497
Public Service Enterprise
Group 1,634 54
Southern 2,381 90
Sunpower, Cl A* 3,600 255
Xcel Energy 24 1
-------
TOTAL ELECTRICAL SERVICES 1,916
=======
ELECTRONIC EQUIPMENT & INSTRUMENTS [0.0%]
Agilent Technologies* 409 12
Jabil Circuit 574 6
-------
TOTAL ELECTRONIC EQUIPMENT & INSTRUMENTS 18
=======
ENERGY [0.6%]
Atmos Energy 7,000 186
Edison International 5,575 222
Entergy 1,039 93
PG&E 800 30
-------
TOTAL ENERGY 531
=======
ENGINEERING SERVICES [0.4%]
Fluor 5,941 331
=======
ENTERTAINMENT [0.2%]
Carnival 41 1
International Game Technology 213 4
MGM Mirage* 4,750 135
-------
TOTAL ENTERTAINMENT 140
=======
FINANCIAL SERVICES [3.7%]
American Express 7,195 255
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
Capital One Financial 9,412 $ 480
Charles Schwab 21,558 561
Citigroup 12,500 256
CME Group, Cl A 11 4
Discover Financial Services 3,356 46
Hudson City Bancorp 4,019 74
Nasdaq Stock Market* 20,300 621
NYSE Euronext 1,883 74
People's United Financial 19,190 369
Sovereign Bancorp 2,269 9
Western Union 11,268 278
-------
TOTAL FINANCIAL SERVICES 3,027
=======
FOOD, BEVERAGE & TOBACCO [5.1%]
Anheuser-Busch 784 51
Coca-Cola 14,804 783
ConAgra Foods 23,400 455
Del Monte Foods 55,500 433
General Mills 14,069 967
Pepsi Bottling Group 6,212 181
PepsiCo 10,786 769
Safeway 23,421 555
-------
TOTAL FOOD, BEVERAGE & TOBACCO 4,194
=======
HEALTHCARE PRODUCTS & SERVICES [2.4%]
Applied Biosystems 405 14
Cardinal Health 11,100 547
Charles River Laboratories
International* 1,990 110
Express Scripts, Cl A* 4,208 311
Illumina* 3,120 126
Medtronic 11,300 566
Thermo Fisher Scientific* 4,360 240
UnitedHealth Group 1,133 29
-------
TOTAL HEALTHCARE PRODUCTS & SERVICES 1,943
=======
HOUSEHOLD FURNITURE & FIXTURES [0.5%]
NVR* 425 243
Pulte Homes 7,470 105
Stanley Works 576 24
Whirlpool 38 3
-------
TOTAL HOUSEHOLD FURNITURE & FIXTURES 375
=======
INDEPENDENT POWER PRODUCERS & ENERGY TRADER [0.1%]
AES* 8,855 104
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 31
schedule of investments
SEPTEMBER 30, 2008
AHA DIVERSIFIED EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
INDUSTRIAL [0.2%]
Robert Half International 6,720 $ 166
=======
INSURANCE [3.8%]
Aetna 164 6
Allstate 1,725 80
AON 794 36
Assurant 429 24
Chubb 7,661 421
Cincinnati Financial 3,537 101
Hartford Financial Services Group 920 38
HCC Insurance Holdings 17,300 467
Marsh & McLennan 23,840 757
MetLife 4,789 268
Patterson* 5,400 164
Principal Financial Group 945 41
Prudential Financial 1,214 87
Tenet Healthcare* 31,207 173
Travelers 2,637 119
Unum Group 15,000 376
-------
TOTAL INSURANCE 3,158
=======
INVESTMENT BANKER/BROKER DEALER [2.8%]
Ameriprise Financial 2,438 93
Federated Investors, Cl B 1,181 34
Franklin Resources 1,982 175
Goldman Sachs Group 3,550 454
Janus Capital Group 1,389 34
JPMorgan Chase 17,709 827
Northern Trust 2,854 206
T Rowe Price Group 8,721 468
-------
TOTAL INVESTMENT BANKER/BROKER DEALER 2,291
=======
MACHINERY [1.1%]
Caterpillar 8,782 524
Cummins 2,166 95
Deere 4,086 202
SPX 1,600 123
-------
TOTAL MACHINERY 944
=======
MANUFACTURING [1.0%]
Tyco International 23,710 830
=======
MEDICAL PRODUCTS & SERVICES [2.6%]
Baxter International 8,057 529
Becton Dickinson 1,387 111
Boston Scientific* 6,118 75
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
Eli Lilly 3,736 $ 164
Genzyme-General Division* 3,990 323
Hospira* 691 26
Intuitive Surgical* 1,065 257
Stryker 7,650 477
WellPoint* 2,744 128
Zimmer Holdings* 110 7
-------
TOTAL MEDICAL PRODUCTS & SERVICES 2,097
=======
MEDICAL PRODUCTS MANUFACTURING [1.0%]
Covidien 15,003 807
=======
METALS & MINING [0.7%]
Barrick Gold 15,800 580
=======
MULTI-MEDIA [0.2%]
Walt Disney 5,187 159
=======
OFFICE FURNITURE & FIXTURES [0.4%]
Activision Blizzard* 12,210 189
Autodesk* 516 17
Salesforce.com* 2,890 140
-------
TOTAL OFFICE FURNITURE & FIXTURES 346
=======
PAPER & RELATED PRODUCTS [1.0%]
International Paper 8,310 218
MeadWestvaco 723 17
Packaging Corp of America 10,500 243
Sealed Air 14,100 310
-------
TOTAL PAPER & RELATED PRODUCTS 788
=======
PETROLEUM & FUEL PRODUCTS [12.3%]
Anadarko Petroleum 10,451 507
Apache 1,717 179
Baker Hughes 792 48
BJ Services 59 1
Cabot Oil & Gas 341 12
Cameron International* 8,040 310
Chesapeake Energy 12,699 455
ChevronTexaco 5,944 490
ConocoPhillips 13,526 991
Consol Energy 623 29
Devon Energy 1,513 138
Enbridge 3,890 148
ENSCO International 134 8
EOG Resources 848 76
Exterran Holdings* 7,000 224
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 32
schedule of investments
SEPTEMBER 30, 2008
AHA DIVERSIFIED EQUITY FUND (CONTINUED)
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
Exxon Mobil 15,173 $ 1,178
Halliburton 2,034 66
Hess 2,688 221
Massey Energy 1,915 68
Murphy Oil 176 11
Nabors Industries* 13,410 334
National Oilwell Varco* 937 47
Noble 362 16
Noble Energy 590 33
Occidental Petroleum 2,133 150
Peabody Energy 463 21
Petroleo Brasileiro, ADR 8,140 358
Royal Dutch Shell, Cl B 7,600 434
Schlumberger 9,544 745
Southwestern Energy* 15,524 474
Spectra Energy 16,300 388
Transocean 4,103 451
Unit* 10,100 503
Valero Energy 17,740 538
Weatherford International* 215 5
Williams 16,958 401
-------
TOTAL PETROLEUM & FUEL PRODUCTS 10,058
=======
PRINTING & PUBLISHING [0.2%]
Pitney Bowes 2,012 67
RR Donnelley & Sons 3,489 85
-------
TOTAL PRINTING & PUBLISHING 152
=======
PROPERTY & CASUALTY INSURANCE [0.4%]
Fidelity National Financial, Cl A 20,400 300
=======
RAILROADS [0.1%]
Burlington Northern Santa Fe 234 22
CSX 1,236 67
-------
TOTAL RAILROADS 89
=======
REAL ESTATE INVESTMENT TRUST [0.9%]
Apartment Investment & Management, Cl A 2,652 93
Equity Residential 284 12
Public Storage 6,663 660
-------
TOTAL REAL ESTATE INVESTMENT TRUST 765
=======
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
REAL ESTATE MANAGEMENT & DEVELOPMENT [0.7%]
Brookfield Asset Management, Cl A 21,200 $ 582
=======
RETAIL [6.2%]
Abercrombie & Fitch, Cl A 56 2
Best Buy 11,790 442
Big Lots* 3,389 94
Costco Wholesale 830 54
CVS 9,959 335
Family Dollar Stores 92 2
Gap 8,237 146
Guess ? 5,050 176
Home Depot 6,145 159
Kohl's* 13,945 643
Kroger 4,691 129
Limited Brands 1,078 19
Lowe's 4,537 108
Macy's 595 11
McDonald's 2,283 141
RadioShack 406 7
Sherwin-Williams 2,510 143
Staples 28,180 634
Supervalu 6,712 146
Target 775 38
Tiffany 912 32
TJX 1,279 39
Urban Outfitters* 4,390 140
Walgreen 10,849 336
Wal-Mart Stores 18,055 1,081
-------
TOTAL RETAIL 5,057
=======
SCHOOLS [0.0%]
Apollo Group, Cl A* 379 22
=======
SEMI-CONDUCTORS [2.8%]
Altera 102 2
Analog Devices 1,312 34
Applied Materials 41,970 635
Broadcom, Cl A* 11,106 207
Intel 49,134 920
Lam Research* 5,310 167
MEMC Electronic Materials* 448 13
Microchip Technology 907 27
Micron Technology* 25,100 102
Novellus Systems* 2,112 41
Texas Instruments 6,679 144
Xilinx 1,606 38
-------
TOTAL SEMI-CONDUCTORS 2,330
=======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 33
schedule of investments
SEPTEMBER 30, 2008
AHA DIVERSIFIED EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
TELECOMMUNICATIONS EQUIPMENT [0.5%]
Nokia, ADR 20,500 $ 382
=======
TELEPHONES & TELECOMMUNICATIONS [3.1%]
AT&T 25,912 723
Corning 3,066 48
Embarq 1,517 62
Mobile Telesystems 2,860 160
NII Holdings* 7,470 283
Qwest Communications
International 53,467 173
Sprint Nextel 5,129 31
Verizon Communications 26,991 866
Windstream 20,000 219
-------
TOTAL TELEPHONES & TELECOMMUNICATIONS 2,565
=======
TRANSPORTATION SERVICES [1.2%]
FedEx 8,156 645
Norfolk Southern 40 2
Union Pacific 4,369 311
-------
TOTAL TRANSPORTATION SERVICES 958
=======
TRUCKING [0.2%]
Ryder System 2,393 148
=======
UTILITIES [0.0%]
PPL 1,015 38
=======
WASTE MANAGEMENT SERVICES [0.2%]
Waste Management 5,989 189
=======
WEB PORTALS/ISP [2.4%]
Amazon.com* 3,075 224
Baidu.com, ADR* 580 144
Expedia* 661 10
Google, Cl A* 2,287 916
Juniper Networks* 1,879 39
Symantec* 30,617 599
VeriSign* 952 25
Yahoo!* 2,059 36
-------
TOTAL WEB PORTALS/ISP 1,993
=======
DESCRIPTION SHARES VALUE (000)
- ----------- ---------- -----------
WHOLESALE [0.4%]
Campbell Soup 4,180 $ 161
McCormick 4,260 164
Tyson Foods, Cl A 3,214 39
-------
TOTAL WHOLESALE 364
=======
TOTAL COMMON STOCK
(Cost $89,088) 80,010
=======
CASH EQUIVALENT [3.3%]
AIM STIT-Treasury Portfolio, 0.800%** 2,745,945 2,746
-------
TOTAL CASH EQUIVALENT
(Cost $2,746) 2,746
=======
TOTAL INVESTMENTS [100.8%]
(Cost $91,834) $82,756
=======
PERCENTAGES ARE BASED ON NET ASSETS OF $82,098,702.
* NON-INCOME PRODUCING SECURITY.
** THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
ISP -- INTERNET SERVICE PROVIDER
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 34
schedule of investments
SEPTEMBER 30, 2008
AHA SOCIALLY RESPONSIBLE EQUITY FUND
SECTOR WEIGHTINGS (UNAUDITED)*:
(BAR CHART)
Financials 17.1%
Consumer Staples 12.6%
Energy 12.6%
Health Care 12.4%
Industrials 10.5%
Information Technology 8.3%
Consumer Discretionary 6.7%
Materials 6.1%
Cash Equivalent 6.0%
Utilities 6.0%
Telecommunication Services 1.7%
* Percentages based on total investments.
DESCRIPTION SHARES VALUE (000)
- ----------- ----------- -----------
COMMON STOCK [95.0%]
ADVERTISING [2.4%]
CBS, Cl B 90,000 $ 1,312
===========
AUTOMOTIVE [2.0%]
Honda Motor, ADR 36,000 1,084
===========
BANKS [1.9%]
US Bancorp 28,000 1,009
===========
BIOMEDICAL RESEARCH & PRODUCTS [3.2%]
Quest Diagnostics 33,000 1,705
===========
BUSINESS SERVICES [1.7%]
Xerox 77,500 894
===========
CHEMICALS [1.9%]
EI du Pont de Nemours 25,500 1,028
===========
COMMUNICATION & MEDIA [2.3%]
Time Warner 95,000 1,245
===========
COMPUTER SYSTEM DESIGN & SERVICES [2.0%]
Dell* 67,000 1,104
===========
CONSUMER PRODUCTS & SERVICES [5.7%]
Clorox 20,500 1,285
Kimberly-Clark 28,000 1,816
-----------
TOTAL CONSUMER PRODUCTS & SERVICES 3,101
===========
DIVERSIFIED MANUFACTURING [2.0%]
3M 15,500 1,059
===========
DESCRIPTION SHARES VALUE (000)
- ----------- ----------- -----------
DRUGS [5.5%]
Abbott Laboratories 18,300 $ 1,054
Johnson & Johnson 28,000 1,940
-----------
TOTAL DRUGS 2,994
===========
ELECTRICAL EQUIPMENT [3.2%]
Baldor Electric 30,000 864
Emerson Electric 21,000 857
-----------
TOTAL ELECTRICAL EQUIPMENT 1,721
===========
ELECTRICAL SERVICES [2.9%]
Portland General Electric 66,000 1,562
===========
ENERGY [3.2%]
Atmos Energy 65,500 1,744
===========
FINANCIAL SERVICES [3.6%]
Nasdaq Stock Market* 64,000 1,956
===========
FOOD, BEVERAGE & TOBACCO [3.2%]
Kraft Foods, Cl A 53,500 1,752
===========
HEALTHCARE PRODUCTS & SERVICES [1.6%]
Cardinal Health 18,000 887
===========
INSURANCE [4.3%]
Marsh & McLennan 73,000 2,318
===========
MANUFACTURING [2.8%]
Tyco International 43,375 1,519
===========
MEDICAL PRODUCTS MANUFACTURING [2.2%]
Covidien 22,375 1,203
===========
METALS & MINING [1.9%]
Worthington Industries 70,000 1,046
===========
OFFICE EQUIPMENT & SUPPLIES [1.7%]
Avery Dennison 21,000 934
===========
PAPER & RELATED PRODUCTS [2.3%]
Packaging Corp of America 53,500 1,240
===========
PETROLEUM & FUEL PRODUCTS [12.7%]
Chesapeake Energy 37,500 1,345
Exterran Holdings* 32,000 1,023
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 35
schedule of investments
SEPTEMBER 30, 2008
AHA SOCIALLY RESPONSIBLE EQUITY FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- ----------- ----------- -----------
Patterson-UTI Energy 82,000 $ 1,642
Spectra Energy 58,000 1,380
Unit* 30,000 1,494
-----------
TOTAL PETROLEUM & FUEL PRODUCTS 6,884
===========
PRINTING & PUBLISHING [1.0%]
Pitney Bowes 16,000 532
===========
PROPERTY & CASUALTY INSURANCE [2.5%]
Fidelity National Financial, Cl A 90,000 1,323
===========
REAL ESTATE INVESTMENT TRUST [2.2%]
AMB Property 26,000 1,178
===========
REAL ESTATE MANAGEMENT & DEVELOPMENT [2.9%]
Brookfield Asset Management, Cl A 58,000 1,591
===========
RETAIL [3.8%]
Supervalu 50,000 1,085
Walgreen 31,500 975
-----------
TOTAL RETAIL 2,060
===========
SEMI-CONDUCTORS [2.7%]
Applied Materials 30,500 462
Intel 54,000 1,011
-----------
TOTAL SEMI-CONDUCTORS 1,473
===========
TELECOMMUNICATIONS EQUIPMENT [1.9%]
Nokia, ADR 56,000 1,044
===========
TELEPHONES & TELECOMMUNICATIONS [1.8%]
Windstream 87,000 952
===========
TOTAL COMMON STOCK
(Cost $55,770) 51,454
===========
DESCRIPTION SHARES VALUE (000)
- ----------- ----------- -----------
CASH EQUIVALENT [6.1%]
AIM STIT-Treasury Portfolio,
0.800%** 3,297,393 $ 3,297
-----------
TOTAL CASH EQUIVALENT
(Cost $3,297) 3,297
===========
TOTAL INVESTMENTS [101.1%]
(Cost $59,067) $ 54,751
===========
PERCENTAGES ARE BASED ON NET ASSETS OF $54,141,244.
* NON-INCOME PRODUCING SECURITY.
** THE RATE REPORTED IS THE 7-DAY EFFECTIVE YIELD AS OF SEPTEMBER 30, 2008.
ADR -- AMERICAN DEPOSITARY RECEIPT
CL -- CLASS
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 36
statements of assets and liabilities (000)
SEPTEMBER 30, 2008
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 $ 94,059 $ 43,857 $ 14,818 $ 91,834 $ 59,067
=========== =========== =========== =========== ===========
Investments in securities at value $ 92,283 $ 42,869 $ 13,815 $ 82,756 $ 54,751
Dividend and interest receivable 927 453 69 102 138
Receivable for capital shares sold 241 125 -- 27 175
Receivable for investment securities sold -- -- -- 107 --
Prepaid Expenses 6 2 1 3 1
----------- ----------- ----------- ----------- -----------
Total Assets 93,457 43,449 13,885 82,995 55,065
----------- ----------- ----------- ----------- -----------
LIABILITIES:
Investment adviser fees payable 43 18 8 53 35
Administrative fees payable 3 2 1 3 2
Distribution fees payable 2 1 -- 2 1
Shareholder servicing fees payable -- -- -- 1 --
Income distribution payable 260 154 -- -- --
Payable for capital shares redeemed 16 -- -- 111 83
Payable for investment securities -- purchased -- -- -- 700 781
Other accrued expenses 20 8 4 26 22
----------- ----------- ----------- ----------- -----------
Total Liabilities 344 183 13 896 924
----------- ----------- ----------- ----------- -----------
NET ASSETS $ 93,113 $ 43,266 $ 13,872 $ 82,099 $ 54,141
=========== =========== =========== =========== ===========
NET ASSETS:
Paid-in Capital
(unlimited authorization --
$0.01 par value) $ 97,295 $ 44,794 $ 15,609 $ 99,250 $ 59,628
Undistributed (distributions in excess of)
net investment income -- (1) 4 18 52
Accumulated net realized loss
on investments (2,406) (539) (738) (8,091) (1,223)
Net unrealized depreciation
on investments (1,776) (988) (1,003) (9,078) (4,316)
----------- ----------- ----------- ----------- -----------
NET ASSETS $ 93,113 $ 43,266 $ 13,872 $ 82,099 $ 54,141
=========== =========== =========== =========== ===========
Institutional Class Shares ($ Dollars):
Net Assets $92,681,061 $42,579,244 $13,872,146 $74,996,999 $53,256,387
Total shares outstanding at end of year 8,833,760 4,302,132 1,865,649 6,154,065 5,598,305
Net asset value, offering and
redemption price per share
(net assets / shares outstanding) $ 10.49 $ 9.90 $ 7.44 $ 12.19 $ 9.51
Class N Shares ($ Dollars):
Net Assets $ 431,994 $ 686,839 N/A $ 7,101,703 $ 884,857
Total shares outstanding at end of year 41,115 69,419 N/A 581,164 93,139
Net asset value, offering and
redemption price per share
(net assets / shares outstanding) $ 10.51 $ 9.89 N/A $ 12.22 $ 9.50
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 37
statements of operations (000)
FOR THE YEAR ENDED SEPTEMBER 30, 2008
AHA Limited AHA Full
Maturity Fixed Maturity Fixed
Income Fund Income Fund
-------------- --------------
INVESTMENT INCOME:
Interest $ 3,156 $ 2,135
Dividends 71 25
Income from Securities Lending -- Net 6 6
Foreign taxes withheld -- --
------- -------
Total Investment Income 3,233 2,166
------- -------
EXPENSES:
Investment Advisory Fees 388 218
Administration Fees 35 20
Trustees' Fees and Expenses 2 1
Shareholder Servicing Fees -- Class N Shares 1 1
Distribution Expense -- Class N Shares 1 1
Transfer Agent Fees and Expenses 48 27
Reports to Shareholders 17 9
Custodian Fees and Expenses 11 5
Registration Fees 3 3
Professional Fees 1 (3)
Insurance and Other Expenses 18 5
------- -------
Total Expenses 525 287
------- -------
Recovery of Investment Advisory Fees
Previously Waived(1) 72 --
Less Waiver of:
Shareholder Servicing Fees (1) (1)
Distribution Expenses -- Class N Shares -- --
Advisory Fees -- (1)
Transfer Agent Fees (6) (3)
------- -------
Net Expenses 590 282
------- -------
NET INVESTMENT INCOME 2,643 1,884
------- -------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net Realized Gain (Loss) on Investments 175 (124)
Change in Net Unrealized Depreciation
on Investments (1,857) (1,027)
------- -------
Net Realized and Unrealized
Loss on Investments (1,682) (1,151)
------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ 961 $ 733
======= =======
(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 38
AHA Socially
AHA AHA Diversified Responsible
Balanced Fund Equity Fund Equity Fund
- ------------- --------------- ------------
$ 317 $ -- $ --
203 1,840 1,394
1 5 2
(1) (12) (14)
------- -------- --------
520 1,833 1,382
------- -------- --------
115 714 414
7 43 25
-- 2 1
-- 14 1
-- 22 2
10 63 37
4 21 10
2 11 7
1 9 5
1 7 4
-- 7 (3)
------- -------- --------
140 913 503
------- -------- --------
15 26 52
-- (2) (1)
-- (12) --
(1) -- --
(1) (7) (4)
------- -------- --------
153 918 550
------- -------- --------
367 915 832
------- -------- --------
(591) (5,928) (1,221)
(1,808) (18,893) (9,649)
------- -------- --------
(2,399) (24,821) (10,870)
------- -------- --------
$(2,032) $(23,906) $(10,038)
======= ======== ========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 39
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
-------------------- -----------------
2008 2007 2008 2007
-------- ------- ------- -------
OPERATIONS:
Net Investment Income $ 2,643 $ 1,854 $ 1,884 $ 1,631
Net Realized Gain (Loss) on Investments Sold 175 (98) (124) (5)
Change in Net Unrealized Appreciation
(Depreciation) on Investments (1,857) 239 (1,027) (11)
-------- ------- ------- -------
Net Increase (Decrease) in Net Assets
Resulting from Investment Operations 961 1,995 733 1,615
-------- ------- ------- -------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends to Shareholders from Net Investment Income:
INSTITUTIONAL CLASS (2,664) (1,846) (1,867) (1,618)
CLASS N (12) (11) (25) (8)
Distributions to Shareholders from Net Realized Gains:
INSTITUTIONAL CLASS -- -- -- --
CLASS N -- -- -- --
-------- ------- ------- -------
Total Dividends and Distributions to Shareholders (2,676) (1,857) (1,892) (1,626)
-------- ------- ------- -------
FUND SHARE TRANSACTIONS:
FUND SHARE TRANSACTIONS: INSTITUTIONAL CLASS
Net Proceeds from Shares Sold 63,962 2,382 332 11,258
Reinvestment of Dividends 2,170 423 1,285 533
Cost of Shares Redeemed (16,107) (3,917) -- (82)
-------- ------- ------- -------
Total Fund Share Transactions Institutional Class 50,025 (1,112) 1,617 11,709
-------- ------- ------- -------
FUND SHARE TRANSACTIONS: CLASS N
Net Proceeds from Shares Sold 417 95 597 88
Reinvestment of Dividends 12 11 16 8
Cost of Shares Redeemed (301) (155) (136) (6)
-------- ------- ------- -------
Total Fund Share Transactions Class N 128 (49) 477 90
-------- ------- ------- -------
Net Increase (Decrease) in Net Assets from
Capital Share Contributions 50,153 (1,161) 2,094 11,799
-------- ------- ------- -------
Total Increase (Decrease) in Net Assets 48,438 (1,023) 935 11,788
-------- ------- ------- -------
NET ASSETS:
Beginning of year 44,675 45,698 42,331 30,543
-------- ------- ------- -------
End of year* 93,113 44,675 43,266 42,331
======== ======= ======= =======
* Including Undistributed (Distributions in excess of)
Net Investment Income of $ -- $ 10 $ (1) $ 9
======== ======= ======= =======
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 40
AHA Balanced AHA Diversified AHA Socially Responsible
Fund Equity Fund Equity Fund
- ----------------- ------------------- ------------------------
2008 2007 2008 2007 2008 2007
- ------- ------- -------- -------- -------- -------
$ 367 $ 416 $ 915 $ 1,065 $ 832 $ 640
(591) 1,759 (5,928) 13,160 (1,221) 2,822
(1,808) (613) (18,893) (1,793) (9,649) 3,077
- ------- ------- -------- -------- -------- -------
(2,032) 1,562 (23,906) 12,432 (10,038) 6,539
- ------- ------- -------- -------- -------- -------
(375) (425) (862) (987) (795) (623)
-- -- (66) (77) (10) (6)
(890) (2,125) (12,355) (8,054) (2,724) (654)
-- -- (1,315) (860) (37) (5)
- ------- ------- -------- -------- -------- -------
(1,265) (2,550) (14,598) (9,978) (3,566) (1,288)
- ------- ------- -------- -------- -------- -------
-- -- 9,453 13,332 17,318 13,931
284 37 8,905 6,506 3,519 1,277
-- -- (10,675) (14,435) (10,663) (8,929)
- ------- ------- -------- -------- -------- -------
284 37 7,683 5,403 10,174 6,279
- ------- ------- -------- -------- -------- -------
-- -- 349 1,282 491 542
-- -- 1,360 924 47 11
-- -- (1,421) (3,206) (198) (136)
- ------- ------- -------- -------- -------- -------
-- -- 288 (1,000) 340 417
- ------- ------- -------- -------- -------- -------
284 37 7,971 4,403 10,514 6,696
- ------- ------- -------- -------- -------- -------
(3,013) (951) (30,533) 6,857 (3,090) 11,947
- ------- ------- -------- -------- -------- -------
16,885 17,836 112,632 105,775 57,231 45,284
- ------- ------- -------- -------- -------- -------
13,872 16,885 82,099 112,632 54,141 57,231
======= ======= ======== ======== ======== =======
$ 4 $ 9 $ 18 $ 26 $ 52 $ 24
======= ======= ======== ======== ======== =======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 41
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) INCOME GAINS OF PERIOD
--------- ------------ -------------- ---------- ------------- ---------
AHA Limited Maturity Fixed Income Fund
Institutional Class (commenced operations on December 22,1988)
2008 $10.59 $0.37 $ (0.10) $(0.37) $ -- $10.49
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)(4) (0.01) 10.61
2004 10.86 0.18 (0.18) (0.18) -- 10.68
Class N (commenced operations on October 22, 2004)
2008 $10.61 $0.35 $ (0.10) $(0.35) $ -- $10.51
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)(4) (0.01) 10.62
AHA Full Maturity Fixed Income Fund
Institutional Class (commenced operations on October 20, 1988)
2008 $10.16 $0.44 $ (0.26) $(0.44) $ -- $ 9.90
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(7) (0.36) (0.39) (0.09) 10.39
Class N (commenced operations on May 11, 2004)
2008 $10.16 $0.42 $ (0.27) $(0.42) $ -- $ 9.89
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)
2008 $ 9.23 $0.20 $ (1.30) $(0.20) $(0.49) $ 7.44
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(7) 0.97 (0.12) -- 8.98
RATIO RATIO
OF NET OF NET
OPERATING OPERATING
EXPENSES EXPENSES
TO AVERAGE TO AVERAGE
NET ASSETS NET ASSETS RATIO
NET BEFORE AFTER OF NET
ASSETS WAIVERS WAIVERS INVESTMENT
END & & INCOME PORTFOLIO
TOTAL OF PERIOD RECOVERED RECOVERED TO AVERAGE TURNOVER
RETURN (000) FEES(2) FEES(2) NET ASSETS(2) RATE(3)
------ --------- ----------- --------- ------------- ---------
AHA Limited Maturity Fixed Income Fund
Institutional Class (commenced operations on December 22,1988)
2008 2.54% $ 92,681 0.67% 0.76%* 3.44% 79%
2007 4.63 44,365 0.77 0.76 4.25 76
2006## 3.49 45,340 0.94 0.75 3.24 86
For the period July 1, through September 30,
2005+ 0.20(5) 112,381 0.88(6) 0.86(6) 2.20(6) 4(5)
For the years ended June 30,
2005 1.53 128,501 0.79 0.78 2.01 109
2004 (0.05) 159,949 0.73 0.73 1.65 98
Class N (commenced operations on October 22, 2004)
2008 2.29% $ 432 0.92% 1.00%* 3.24% 79%
2007 4.47 310 1.02 1.00 3.99 76
2006## 3.17 358 1.18 1.00 2.88 86
For the period July 1, through September 30,
2005+ 0.13(5) 822 1.11(6) 1.10(6) 1.95(6) 4(5)
For the period October 22, 2004 through June 30,
2005 0.12(5) 1,070 1.07(6) 1.03(6) 1.75(6) 109
AHA Full Maturity Fixed Income Fund
Institutional Class (commenced operations on October 20, 1988)
2008 1.76% $ 42,579 0.64% 0.64% 4.32% 34%
2007 4.48 42,096 0.73 0.79* 4.48 55
2006#### 3.03 30,398 0.87 0.80* 4.20 91
For the period July 1, through September 30,
2005+ (0.57)(5) 31,764 0.83(6) 1.00(6)* 3.37(6) 17(5)
For the years ended June 30,
2005 5.72 31,960 0.95 1.00* 3.58 144
2004 0.08 28,958 0.98 1.00* 3.40 302
Class N (commenced operations on May 11, 2004)
2008 1.42% $ 687 0.89% 0.89% 4.02% 34%
2007 4.23 235 0.99 1.04* 4.23 55
2006#### 2.67 145 1.12 1.05* 3.95 91
For the period July 1, through September 30,
2005+ (0.54)(5) 134 1.08(6) 1.25(6)* 3.12(6) 17(5)
For the year ended June 30,
2005 5.46 134 1.20 1.25* 3.33 144
For the period May 11, through June 30,
2004 1.29(5) 104 1.15(7) 1.25(7)* 3.27(7) 302(5)
AHA Balanced Fund
Institutional Class (commenced operations on October 20, 1988)
2008 (12.68)% $ 13,872 0.91% 1.00%* 2.42% 88%
2007 9.47 16,885 1.00 1.00 2.45 128
2006###### 8.32 17,836 1.11 1.00 1.83 74
For the period July 1, through September 30,
2005+ 1.87(5) 18,352 1.10(6) 0.98(6) 1.54(6) 14(5)
For the years ended June 30,
2005 8.97 18,088 1.25 1.20 1.69 99
2004 13.41 16,930 1.31 1.50 1.14 70
+ 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 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 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 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) 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.
(4) INCLUDES A TAX RETURN OF CAPITAL WHICH IS LESS THAN $0.01 PER SHARE, FOR
THE FUND FOR THE YEAR ENDED JUNE 30, 2005.
(5) NOT ANNUALIZED.
(6) ANNUALIZED.
(7) 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 42
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(3) INVESTMENTS(3) INCOME GAINS OF PERIOD
--------- ---------- -------------- ---------- ------------- ---------
AHA Diversified Equity Fund
Institutional Class (commenced operations on October 20, 1988)
2008 $18.48 $0.14 $(3.84) $(0.14) $(2.45) $12.19
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
Class N (commenced operations on December 30, 2002)
2008 $18.52 $0.11 $(3.85) $(0.11) $(2.45) $12.22
2007 18.21 0.13(7) 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
AHA Socially Responsible Equity Fund
Institutional Class (commenced operations on January 3, 2005)
2008 $12.12 $0.16 $(2.04) $(0.15) $(0.58) $ 9.51
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 N (commenced operations on August 12, 2005)
2008 $12.11 $0.14 $(2.05) $(0.12) $(0.58) $ 9.50
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
EXPENSES EXPENSES
TO AVERAGE TO AVERAGE
NET ASSETS NET ASSETS RATIO
NET BEFORE AFTER OF NET
ASSETS WAIVERS WAIVERS INVESTMENT
END AND AND INCOME PORTFOLIO
TOTAL OF PERIOD RECOVERED RECOVERED TO AVERAGE TURNOVER
RETURN (000) FEES(2)(3) FEES(2)(3) NET ASSETS(2)(3) RATE(4)
------ --------- ---------- ----------- ---------------- ---------
AHA Diversified Equity Fund
Institutional Class (commenced operations on October 20, 1988)
2008 (22.73)% $ 74,997 0.94% 0.97%* 0.98% 143%
2007 11.93 102,232 1.02 0.99 0.98 116
2006## 10.16 94,653 1.09 1.01 0.87 99
For the period July 1, through September 30,
2005+ 3.88(5) 81,447 1.08(6) 1.13(6) 0.46(6) 20(5)
For the years ended June 30,
2005 9.95 81,510 1.07 1.05 0.78 128
2004 21.60 68,068 1.02 1.02 0.67 98
Class N (commenced operations on December 30, 2002)
2008 (22.93)% $ 7,102 1.19% 1.22%* 0.74% 143%
2007 11.62 10,400 1.24 1.27 0.73 116
2006## 9.87 11,122 1.34 1.26 0.62 99
For the period July 1, through September 30,
2005+ 3.81(5) 9,451 1.34(6) 1.38(6) 0.20(6) 20(5)
For the years ended June 30,
2005 9.66 8,842 1.32 1.30 0.53 128
2004 21.24 7,392 1.27 1.27 0.42 98
AHA Socially Responsible Equity Fund
Institutional Class (commenced operations on January 3, 2005)
2008 (16.24)% $ 53,256 0.90% 0.99%* 1.51% 41%
2007 13.89 56,490 1.00 0.94* 1.19 29
2006#### 7.69 45,003 1.12 1.04* 1.10 29
For the period July 1, through September 30,
2005+ 6.20(5) 21,795 1.24(6) 1.15(6)* 0.90(6) 7(5)
For the period January 3, through June 30,
2005 (2.48)(5) 20,510 1.16(6) 1.12(6)* 1.43(6) 48(5)
Class N (commenced operations on August 12, 2005)
2008 (16.46)% $ 885 1.15% 1.24%* 1.26% 41%
2007 13.64 741 1.25 1.19* 0.94 29
2006#### 7.40 281 1.37 1.29* 0.80 29
For the period August 12, through September 30,
2005 1.27(5) 15 1.69(6) 1.43(6)* 0.74(6) 7(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 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 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) NOT ANNUALIZED.
(6) ANNUALIZED.
(7) PER SHARE CALCULATIONS ARE BASED ON THE AVERAGE SHARES OUTSTANDING
THROUGHOUT THE PERIOD.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
AHA INVESTMENT FUNDS | PAGE 43
notes to financial statements
SEPTEMBER 30, 2008
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 (the "Limited Maturity Fund"), the AHA Full Maturity
Fixed Income Fund (the "Full Maturity Fund"), the AHA Balanced Fund (the
"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 N Shares and Institutional Class
Shares. As of September 30, 2008, only the Institutional Class Shares of the
Funds and the Class N Shares of the Limited Maturity Fund, the Full Maturity
Fund, the Diversified Fund, and the Socially Responsible Fund had commenced
operations.
Effective as of the commencement of business on October 17, 2007, the
designation of the Class A shares of Limited Maturity Fund, Full Maturity Fund,
Diversified Equity Fund and Socially Responsible Fund was changed to Class N.
There were no changes to the rights, fees or expenses of the Class A shares or
services provided to Class A shareholders in connection with the change in
designation to Class N.
Expenses related to the reorganization and reimbursements to CCM Advisors, LLC
for reorganization related expenses were incurred and paid by the Funds. These
amounts are subject to recapture through the year ended September 30, 2009.
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.
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
AHA INVESTMENT FUNDS | PAGE 44
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, 2008.
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 counter-party 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 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 N 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, 2008, the Board of Trustees approved the
reimbursement of previously waived fees by the Adviser in the amount of $72,235,
$14,230, $25,460 and $51,812 for the Limited Maturity Fund, the Balanced Fund,
the Diversified Fund and the Socially Responsible Fund, respectively.
As of September 30, 2008, 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 $78 2009
3 2010
Balanced Fund 18 2009
1 2011
AHA INVESTMENT FUNDS | PAGE 45
notes to financial statements
SEPTEMBER 30, 2008
THE PATTERSON CAPITAL CORPORATION and CNAM, INC. act as the sub-advisers with
respect to the Limited Maturity Fund and are paid by the Adviser.
ROBERT W. BAIRD & CO., INCORPORATED and BOYD WATTERSON ASSET MANAGEMENT, LLC act
as sub-advisers with respect to the AHA Full Maturity Fund and are paid by the
Adviser.
ROBERT W. BAIRD & CO., INCORPORATED and FREEMAN ASSOCIATES INVESTMENT MANAGEMENT
LLC act as sub-advisers with respect to the Balanced Fund and are paid by the
Adviser.
AMBS INVESTMENT COUNSEL, LLC, FREEMAN ASSOCIATES INVESTMENT MANAGEMENT, LLC AND
SKBA CAPITAL MANAGEMENT, LLC act as sub-advisers with respect to the Diversified
Fund and are paid by the Adviser. Effective February 29, 2008, TURNER INVESTMENT
PARTNERS, INC. commenced acting as sub-adviser for a portion of the Diversified
Fund and is paid by the Adviser.
SKBA CAPITAL MANAGEMENT, LLC acts as the sub-adviser with respect to the
Socially Responsible Fund and is paid by the Adviser.
4. ADMINISTRATION,TRANSFER AGENT DISTRIBUTION AND SHAREHOLDER SERVICES
AGREEMENTS
Pursuant to an administration agreement dated April 1, 1999, as amended (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, 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, 0.025% of
aggregate average daily net assets of the Trust exceeding $5 billion, but not
exceeding $7.5 billion, and 0.02% of aggregate average net assets of the Trust
exceeding $7.5 billion.
The AHA Funds have adopted a Rule 12b-1 Distribution Plan ("the Plan") with
respect to Class N 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 N Shares of each Fund.
SEI Investments Management Corporation (the "Transfer Agent") serves as transfer
agent for the Trust and 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 and 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.
The Trust has entered into a Shareholder Servicing Agreement that permits
payment of compensation to CCM Advisors, LLC ("CCMA"), which provides certain
shareholder support for its customers who own Class N Shares. In consideration
for such services, a shareholder servicing fee is charged at the annual rate of
up to 0.25% of each Fund's average daily net assets. CCMA has agreed to
voluntarily waive portions of its shareholder servicing fees with respect to
certain Funds. For the year ended September 30, 2008, CCMA received Shareholder
Servicing fees from the Trust in the amount of $15,600.
Certain officers of the Trust are also officers of the Adviser, CNAM, Inc. or
the Administrator. Such officers are paid no fees by the Trust or the AHA Funds
for serving as officers of the Funds.
5. FEDERAL INCOME TAXES
It is each Fund's 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.
Management has analyzed the Funds' tax position taken on federal income tax
returns for all open tax years and has concluded that as of September 30, 2008,
no provision for income tax would be required in the Funds' financial
statements. The Funds' federal and state income and federal excise tax returns
for tax years for which the applicable statutes of limitations have not expired
are subject to examination by the Internal Revenue Service and state departments
of revenue.
AHA INVESTMENT FUNDS | PAGE 46
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, REIT adjustments for tax purposes and distribution reclasses, have
been reclassified to/from the following accounts as of September 30, 2008:
Increase (Decrease) Increase (Decrease)
Undistributed Accumulated
Net Investment Net Realized
Income (Loss) Gain (Loss)
Fund (000) (000)
- ---- ------------------- -------------------
Limited Maturity Fund $23 $(23)
Full Maturity Fund (2) 2
Balanced Fund 3 (3)
Diversified Fund 5 (5)
Socially Responsible Fund 1 (1)
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, 2008 and September 30, 2007 are shown below (000s):
Ordinary Long-term
Income Capital Gain Total
Fund (000) (000) (000)
- ---- -------- ------------ -------
Limited Maturity Fund
September 2008 $2,676 $ -- $ 2,676
September 2007 1,857 -- 1,857
Full Maturity Fund
September 2008 $1,892 $ -- $ 1,892
September 2007 1,626 -- 1,626
Balanced Fund
September 2008 $ 714 $ 551 $ 1,265
September 2007 997 1,553 2,550
Diversified Fund
September 2008 $5,167 $9,431 $14,598
September 2007 3,146 6,832 9,978
Socially Responsible Fund
September 2008 $1,565 $2,001 $ 3,566
September 2007 629 659 1,288
As of September 30, 2008, the components of Accumulated Losses on a tax basis
were as follows (000s):
Undistributed Undistributed Capital Unrealized Other Total
Ordinary Long-term Loss Post-October Appreciation Temporary Accumulated
Income Capital Gain Carryforwards Losses (Depreciation) Differences Losses
Fund (000) (000) (000) (000) (000) (000) (000)
- ---- ------------- ------------- ------------- ------------ ------------- ----------- -----------
Limited Maturity Fund $261 $-- $(2,407) $ -- $ (1,776) $(260) $ (4,182)
Full Maturity Fund 154 -- (397) (127) (1,002) (156) (1,528)
Balanced Fund 5 -- -- (654) (1,088) -- (1,737)
Diversified Fund 18 -- -- (7,049) (10,120) -- (17,151)
Socially Responsible Fund 53 -- (81) (1,126) (4,333) -- (5,487)
During the year ended September 30, 2008 the following Funds utilized capital
loss carryforwards to offset capital gains amounting to (000):
Limited Maturity Fund $55
Full Maturity Fund 1
Post-October losses represent losses realized on investments and foreign
currency transactions from November 1, 2007 through September 30, 2008 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,
2008, the breakdown of capital loss carryforwards was as follows (000s):
Expiring
------------------------------------------------
2012 2013 2014 2015 2016 Total
Fund (000) (000) (000) (000) (000) (000)
- ---- ----- ----- ----- ------ ------ ------
Limited Maturity Fund $22 $838 $133 $1,414 $-- $2,407
Full Maturity Fund -- 63 45 289 -- 397
Socially Responsible -- -- -- -- 81 81
AHA INVESTMENT FUNDS | PAGE 47
notes to financial statements
SEPTEMBER 30, 2008
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, 2008 for each of
the Funds were as follows (000s):
Aggregate Aggregate Net
Gross Gross Unrealized
Federal Unrealized Unrealized Appreciation
Tax Cost Appreciation Depreciation (Depreciation)
Fund (000) (000) (000) (000)
- ---- -------- ------------ ------------ --------------
Limited Maturity Fund $94,059 $ 356 $ (2,132) $ (1,776)
Full Maturity Fund 43,871 541 (1,543) (1,002)
Balanced Fund 14,903 311 (1,399) (1,088)
Diversified Fund 92,876 2,019 (12,139) (10,120)
Socially Responsible Fund 59,084 1,661 (5,994) (4,333)
6. CAPITAL SHARE TRANSACTIONS (000S):
The share transactions for the years ended September 30, 2008 and September 30,
2007 are as follows:
Limited Maturity Fund (000) Full Maturity Fund (000) Balanced Fund (000)
--------------------------- ------------------------ -------------------
2008 2007 2008 2007 2008 2007
----------- ------------- ----------- ---------- -------- --------
INSTITUTIONAL CLASS
Shares Sold 5,951 226 33 1,107 -- --
Shares Issued in
Reinvestment
of Dividends 203 40 126 51 36 4
Shares Redeemed (1,508) (371) -- (8) -- --
------ ---- --- ----- --- ---
Total Net Change 4,646 (105) 159 1,150 36 4
====== ==== === ===== === ===
CLASS N
Shares Sold 39 9 58 9
Shares Issued in
Reinvestment
of Dividends 1 1 1 1
Shares Redeemed (28) (15) (13) (1)
------ ---- --- -----
Total Net Change 12 (5) 46 9
====== ==== === =====
Socially
Diversified Fund (000) Responsible Fund (000)
--------------------------- ------------------------
2008 2007 2008 2007
----------- ------------- ----------- ----------
INSTITUTIONAL CLASS
Shares Sold 630 728 1,635 1,164
Shares Issued in
Reinvestment
of Dividends 585 367 324 108
Shares Redeemed (593) (773) (1,021) (737)
---- ---- ------ -----
Total Net Change 622 322 938 535
==== ==== ====== =====
CLASS N
Shares Sold 24 70 47 45
Shares Issued in
Reinvestment
of Dividends 89 52 4 1
Shares Redeemed (93) (171) (19) (11)
---- ---- ------ -----
Total Net Change 20 (49) 32 35
==== ==== ====== =====
AHA INVESTMENT FUNDS | PAGE 48
7. SECURITIES TRANSACTIONS
Purchases and sales and maturities of investment securities, other than
short-term investments, for the year ended September 30, 2008 were as follows:
Purchases Sales & Maturities
--------------------- ---------------------
U.S. Gov't Other U.S. Gov't Other
Fund (000) (000) (000) (000)
- ---- ---------- -------- ---------- --------
Limited Maturity Fund $65,142 $ 39,273 $35,514 $ 19,610
Full Maturity Fund 11,652 5,911 9,165 4,817
Balanced Fund 1,316 11,660 1,936 12,287
Diversified Fund -- 132,728 -- 137,571
Socially Responsible Fund -- 29,295 -- 21,370
8. SECURITIES LENDING
The Custodian served as the AHA Funds' securities lending agent. Certain Funds
lent their securities to approved brokers to earn additional income and received
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 was received, a related liability
is shown on the statement of net assets. Although the risk of lending was
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 were no securities on loan at September 30, 2008. The AHA
Funds terminated the program in January 2008.
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
In September 2006, the Financial Accounting Standards Board 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, 2008,
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.
AHA INVESTMENT FUNDS | PAGE 49
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 the CNI Charter Funds, comprised of the AHA
Limited Maturity Fixed Income Fund, AHA Full Maturity Fixed Income Fund, AHA
Balanced Fund, AHA Diversified Equity Fund and AHA Socially Responsible Equity
Fund (collectively, "the Funds"), including the schedules of investments, as of
September 30, 2008 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 financial highlights for each of the years in
the three-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
audits. 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, 2008, by correspondence with the custodian
and broker 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
AHA Investment Funds as of September 30, 2008, 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 three-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 24, 2008
AHA INVESTMENT FUNDS | PAGE 50
trustees and officers (UNAUDITED)
SEPTEMBER 30, 2008
Information pertaining to the Trustees and Officers of the Trust is set forth
below as of September 30, 2008. Trustees who are not deemed to be "interested
persons" of the Trust as defined in the Investment Company Act of 1940 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, 17 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: 65 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, 17 None
Age: 70 a 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, 17 None
Age: 70 Campeas, Thompson, Snyder and Pariser,
LLP, an accounting firm (1964-present).
William R. Sweet Trustee Since 1999 Retired. Executive Vice President, 17 None
Age: 71 Union Bank of California (1985-1996).
James Wolford Trustee Since 1999 Chief Financial Officer, Bixby Land 17 None
Age: 53 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). Senior Vice 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 51
trustees and officers (UNAUDITED) (CONCLUDED)
SEPTEMBER 30, 2008
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: 40 (2003-2004). Vice President of the Distributor (1999-2004).
Eric Kleinschmidt Controller and Since Director of Fund Accounting, SEI Investments (2004-Present). Manager
SEI Investments Chief Operating 2005 of Fund Accounting, SEI Investments (1999-2004).
One Freedom Valley Drive Officer
Oaks, PA 19456
Age: 40
Valerie Y. Lewis Vice President Since Chief Compliance Officer, CNAM, Inc. (August, 2005-present). Fund
City National Bank and Chief 2005 Boards Specialist - Assistant Secretary, Capital Research and Management
400 N. Roxbury Drive Compliance and Company Capital International, Inc. (1999-2005).
Beverly Hills, CA 90210 Officer
Age: 52
James Ndiaye Vice President Since Attorney, SEI Investments Company (2004-present). Vice President,
SEI Investments and Assistant 2005 Deutsche Asset Management (2003-2004). Associate, Morgan Lewis &
One Freedom Valley Drive Secretary Bockius LLP (2000-2003). Assistant Vice President, ING Variable
Oaks, PA 19456 Annuities Group (1999-2000).
Age: 40
Michael T. Pang Vice President Since Attorney, SEI Investments Company (2005-present). Counsel, Caledonian
SEI Investments and Assistant 2005 Bank & Trust's Mutual Funds Group (2004-2005). Counsel, Permal Asset
One Freedom Valley Drive Secretary Management (2001-2004). Associate, Schulte, Roth & Zabel's Investment
Oaks, PA 19456 Management Group (2000-2001).
Age: 36
- ----------
(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,
2008, the Fund Complex consisted of 17 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 52
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: 43
Joseph Gallo Vice President Since Attorney for SEI Investments since 2007. Associate Counsel at ICMA-RC
SEI Investments and Secretary 2008 from 2004 to 2007. Assistant Secretary of The VantageTrust Company in
One Freedom Valley Drive 2007. Assistant Secretary of The Vantagepoint Funds from 2006 to 2007.
Oaks, PA 19456 Investigator, U.S. Department of Labor from 2002 to 2004.
Age: 35
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: 55
Susan Rudzinski Vice President Since Compliance Director, Convergent Capital Management, LLC
CCM Advisors, LLC May (2006-present); Self-employed Investment Advisory Compliance and
190 S. LaSalle Street 2007 Operations Consultant (2005-2006); Manager,Affiliate Contracts,
Suite 2800 The Burridge Group LLC (2003-2004).
Chicago, IL 60603
Age: 45
Richard A.Weiss President and Since President, CNAM, Inc. (2001-present). Executive Vice President and
City National Bank Chief Executive 2008 Chief Investment Officer, CNB (1999-present). Director, City National
400 N. Roxbury Drive Officer Securities (April 2003-present). Executive Vice President and Chief
Beverly Hills, CA 90210 Investment Officer. Sanwa Bank California (1994-1999).
Age: 48
AHA INVESTMENT FUNDS | PAGE 53
notice to shareholders (UNAUDITED)
SEPTEMBER 30, 2008
For shareholders that do not have a September 30, 2008 taxable year end, this
notice is for informational purposes only. For shareholders with a September 30,
2008 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, 2008
each Fund is designating the following items with regard to distributions paid
during the year:
(C)** (D)***
DIVIDENDS QUALIFYING
(A)* (B)* QUALIFYING DIVIDEND (E)**** (F)***** (G)******
LONG TERM ORDINARY FOR CORPORATE INCOME U.S. INTEREST SHORT-TERM
CAPITAL GAIN INCOME TOTAL DIVIDENDS REC. (15% RATE GOVERNMENT RELATED CAPITAL GAIN
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DEDUCTION FOR QDI) INTEREST DIVIDENDS DIVIDENDS
------------- ------------- ------------- -------------- ---------- ---------- --------- ------------
Limited Maturity Fixed
Income Fund 0% 100% 100% 0% 0% 21% 97% 0%
Full Maturity Fixed
Income Fund 0% 100% 100% 0% 0% 0% 98% 0%
Balanced Fund 44% 56% 100% 36% 35% 9% 44% 100%
Diversified Equity
Fund 65% 35% 100% 53% 53% 0% 0% 100%
Socially Responsible
Equity Fund 56% 44% 100% 83% 84% 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 ORDINARY INCOME. 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 "INTEREST RELATED DIVIDENDS" 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. THIS PROVISION OF
THE INTERNAL REVENUE CODE WILL BE EXPIRING FOR YEARS BEGINNING AFTER
JANUARY 1, 2010.
****** THE PERCENTAGE IN ITEM (G) REPRESENTS THE AMOUNT OF "SHORT-TERM CAPITAL
GAIN DIVIDENDS" 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.
THIS PROVISION OF THE INTERNAL REVENUE CODE WILL BE EXPIRING FOR YEARS
BEGINNING AFTER JANUARY 1, 2010.
AHA INVESTMENT FUNDS | PAGE 54
disclosure of fund expenses (UNAUDITED)
All mutual funds have operating expenses. As a shareholder of a Fund, your
investment is affected by these ongoing costs, which include (among others)
costs for portfolio management, administrative services, class specific
distribution fees and shareholder reports like this one. It is important for you
to understand the impact of these costs on your investment returns.
Operating expenses such as these are deducted from the Fund's gross income and
directly reduce your final investment return. These expenses are expressed as a
percentage of the Fund's average net assets; this percentage is known as the
Fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The table below illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN. This section helps you to estimate the actual expenses
that your Fund incurred over the period. The "Expenses Paid During Period"
column shows the actual dollar expense cost incurred by a $1,000 investment in
the Fund, and the "Ending Account Value" number is derived from deducting that
expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in
the Fund, to estimate the expenses you paid over that period. Simply divide your
actual account value by $1,000 to arrive at a ratio (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply that ratio by the number
shown for your Fund under "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with
those of other mutual funds. It assumes that the Fund had an annual 5% return
before expenses during the year, but that the expense ratio (Column 3) for the
period is unchanged. This example is useful in making comparisons because the
Securities and Exchange Commission requires all mutual funds to make this 5%
calculation. You can assess your Fund's comparative cost by comparing the
hypothetical result for your Fund in the "Expenses Paid During Period" column
with those that appear in the same charts in the shareholder reports for other
funds.
NOTE: Because the return is set at 5% for comparison purposes - NOT your Fund's
actual return - the account values shown do not apply to your specific
investment.
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/08 9/30/08 RATIOS PERIOD*
--------- --------- ---------- --------
AHA LIMITED MATURITY FIXED INCOME FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 983.40 0.67% $3.32
Class N 1,000.00 982.20 0.92% 4.56
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.65 0.67% $3.39
Class N 1,000.00 1,020.40 0.92% 4.65
AHA FULL MATURITY FIXED INCOME FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 975.00 0.64% $3.16
Class N 1,000.00 973.80 0.89% 4.39
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,021.80 0.64% $3.23
Class N 1,000.00 1,020.55 0.89% 4.50
AHA BALANCED FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 936.10 0.91% $4.40
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.45 0.91% $4.60
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/1/08 9/30/08 RATIOS PERIOD*
--------- --------- ---------- --------
AHA DIVERSIFIED EQUITY FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 886.90 0.89% $4.20
Class N 1,000.00 805.60 1.14% 5.15
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.55 0.89% $4.50
Class N 1,000.00 1,019.30 1.14% 5.76
AHA SOCIALLY RESPONSIBLE EQUITY FUND
ACTUAL FUND RETURN
Institutional Class $1,000.00 $ 953.90 0.89% $4.35
Class N 1,000.00 952.60 1.14% 5.56
HYPOTHETICAL 5% RETURN
Institutional Class $1,000.00 $1,020.55 0.89% $4.50
Class N 1,000.00 1,019.30 1.14% 5.76
* Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 183/366 (to
reflect the six-month period).
AHA INVESTMENT FUNDS | PAGE 55
approval of advisory and sub-advisory agreements (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, 2008, 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"):
- 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;
- CCMA's sub-advisory agreement (the "Patterson Agreement") with The
Patterson Capital Corporation ("Patterson") with respect to the
Limited Maturity Fund;
- 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;
- 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 (the "Diversified
Fund");
- CCMA's sub-advisory agreement (the "AMBS Agreement") with AMBS
Investment Counsel LLC ("AMBS") with respect to the Diversified Fund;
and
- CCMA's sub-advisory agreements (the "SKBA Agreement") with SKBA
Capital Management, LLC ("SKBA") with respect to the AHA Socially
Responsible Equity Fund (the "Socially Responsible Fund") and the
Diversified 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.
AHA INVESTMENT FUNDS | PAGE 56
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-, two-, three-, five- and ten-year and since-inception periods ended
June 30, 2008, as applicable.The Board made the following observations in
reviewing the Funds' performance:
- The annualized total returns of the LIMITED MATURITY FUND were above
the returns of the Lipper short/intermediate investment grade universe
average for all periods other than the ten-year and since inception
periods, above the Merrill Lynch 3 Month Treasury Bill Index returns
for all periods other than the three- and five-year periods, and below
the Merrill Lynch 1-3 Year Treasury Index returns for all periods.
- The annualized total returns of the FULL MATURITY FUND were above the
Lipper corporate A-rated debt funds universe average for all periods
other than the period since inception, and below the returns of the
Barclays U.S.Aggregate Bond Index and Barclays Intermediate Government
Credit Index returns for all periods.
- The annualized total returns of the BALANCED FUND were above those of
a 60/30/10 hybrid of the S&P 500 Index, Barclays U.S.Aggregate Bond
Index and Merrill Lynch 3-Month U.S.Treasury Bill Index for the five-
and ten-year periods, above the Lipper mixed-asset target allocation
growth fund universe average for the one- and ten-year periods, and
below those measures for all other periods.
- The annualized total returns of the DIVERSIFIED EQUITY FUND were below
those of the S&P 500 Index and the Lipper multi-cap core funds
universe average for the one-, two-and three-year periods, and above
those measures for all other periods (except the Lipper universe
returns for the five-year period).
- The annualized total returns of the SOCIALLY RESPONSIBLE FUND were
above the returns of the Domini 400 Social Index and the Lipper
multi-cap value fund universe average for the one-, two- and
three-year and since inception periods.
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 the Institutional Class of each Fund (as percentages of
their respective average annual net assets) compared to those of select peer
groups of funds and of the funds included in the relevant Lipper universes, and
the Board 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,
2008 were above the average fees of funds in the relevant Lipper universes but
were below the average management fees for their peer group funds (except the
Balanced Fund and the Socially Responsible Fund, which were slightly higher than
the peer group averages).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, 2008 net of fee waivers were below the average fees of
funds in the relevant Lipper universes and the average total expenses for their
peer group funds (except the Limited Maturity Fund and Full Maturity Fund, which
were slightly above the peer group averages).The Board also noted, however, that
the asset levels of the Funds were relatively small.
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 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.
AHA INVESTMENT FUNDS | PAGE 57
approval of advisory and sub-advisory agreements (UNAUDITED) (CONCLUDED)
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 and trading practices.
INVESTMENT PERFORMANCE
The Board's observations regarding each Fund's performance are described above.
In addition, the Board assessed the performance of each Sub-Adviser's portion of
the Fund or Funds it managed compared with its respective benchmark for the
one-, two-, three-, five-, seven- and ten-year periods ended June 30, 2008, as
applicable. The Board made the following additional observations in reviewing
each Sub-Adviser's performance:
The annualized total returns for CNAM's portion of the Limited Maturity Fund
were slightly below the returns of the Barclays 1-5 Year Government Credit Index
for the one- and two-year periods.
The annualized total returns for Patterson's portion of the Limited Maturity
Fund were slightly below the returns of the Merrill Lynch 1-3 Year Treasury
Index for the one-, two- and three-year periods, the same as the Index return
for the five-year period, and above the Index returns for the seven- and
ten-year periods.
The annualized total returns for Baird's portions of the Full Maturity Fund and
the Balanced Fund were below the returns of the Barclays Aggregate Bond Index
for all applicable periods, except for Baird's portion of the Full Maturity Fund
for the ten-year period (which outperformed the Index). The board noted that the
performance of Baird's portion of the Balanced Fund may have been hampered by
the relatively low assets of the Portfolio.
The annualized total returns for Freeman's portions of the Balanced Fund and the
Diversified Equity Fund were below the returns of the S&P 500 Index for the
one-, two- and three-year periods, and above the Index returns for all other
periods.
The annualized total return for AMBS' portion of the Diversified Equity Fund was
above the return of the S&P 500 Index for the one-year period.
The annualized total return for SKBA's portion of the Diversified Equity Fund
was above the return of the Russell 1000 Value Index for the one-year period.
As indicated above, the Board 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
AHA INVESTMENT FUNDS | PAGE 58
connection with the Funds' performance, and in the case of CNAM,AMBS 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 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.
* Prior to October 31, 2008, the "Barclays" Indexes were named the "Lehman"
Indexes.
AHA INVESTMENT FUNDS | PAGE 59
notes
For more information on CNI Charter Funds, including charges and
expenses, visit cnicharterfunds.com or call 1-888-889-0799 for a free
prospectus.
Read it carefully before you invest or send money.
(AMERICAN HOSPITAL ASSOCIATION LOGO)
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 Investment Program (CNI CHARTER FUNDS(SM)(R) LOGO)
AHAFUNDS.ORG CNI-AR-002-0400
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:
- ------------------ ----------------------------------------------------- -----------------------------------------------------
2008 2007
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
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 $315,000 N/A N/A $278,000 N/A N/A
Fees(1)
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(b) Audit- N/A N/A N/A N/A N/A N/A
Related
Fees
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(c) Tax
Fees $66,400 N/A N/A $66,075 N/A N/A
- ------- ---------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
(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) The audit committee's pre-approval policies and procedures described
in paragraph (c)(7) of Rule 2-01 of Regulation S-X are as follows.
PRE-APPROVAL OF AUDIT AND PERMITTED NON-AUDIT SERVICES PROVIDED TO
THE TRUST
The Audit Committee pre-approves all audit services and permissible
non-audit services (e.g., tax services) to be provided to the Trust by
the Trust's independent accountant (the "Accountant"), including the
fees therefor. The Audit Committee may delegate to one or more of its
members the authority to grant pre-approvals. In connection with such
delegation, the Audit Committee is required to establish pre-approval
policies and procedures, including the requirement that the decisions
of any member to whom authority is delegated be presented to the full
Committee at each of its scheduled meetings.
Pre-approval for a permitted non-audit service is not required if: (1)
the aggregate amount of all such non-audit services is not more than
5% of the total revenues paid by the Trust to the Accountant in the
fiscal year in which the non-audit services are provided; (2) such
services were not recognized by the Trust at the time of the
engagement to be non-audit services; and (3) such services are
promptly brought to the attention of the Audit Committee and approved
prior to the completion of the audit by the Committee or by one or
more members of the Committee to whom authority to grant such
approvals has been delegated by the Committee.
Additionally, the Audit Committee is required to pre-approve the
Accountant's engagements for non-audit services with the Trust's
investment advisers and any of their affiliates that provide ongoing
services to the Trust in accordance with the foregoing paragraph, if
the engagement relates directly to the operations and financial
reporting of the Trust, unless the aggregate amount of all services
provided constitutes no more than 5% of the total amount of revenues
paid to the Accountant by the Trust, the investment adviser and any
affiliate of the investment adviser that provides ongoing services to
the Trust during the fiscal year in which the services are provided
that would have to be pre-approved by the Committee pursuant to this
paragraph (without regard to this exception).
(e)(2) Percentage of fees billed applicable to non-audit services pursuant to
waiver of pre-approval requirement were as follows:
---------------------------- ----------------- ----------------
2008 2007
---------------------------- ----------------- ----------------
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 $66,400 and $66,075 for 2008 and 2007,
respectively.
(h) Not Applicable
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end management investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS
Included as part of the report to shareholders filed under Item 1 of this
report.
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 to open-end management investment companies.
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) Separate certifications 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 A. WEISS
-------------------------
Richard A. Weiss,
President & CEO
Date November 24, 2008
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 A. WEISS
-------------------------
Richard A. Weiss,
President & CEO
Date November 24, 2008
By (Signature and Title)* /S/ ERIC KLEINSCHMIDT
-------------------------
Eric Kleinschmidt,
Controller and COO
Date November 24, 2008
* Print the name and title of each signing officer under his or her signature.