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| |
| ANNUAL REPORT |
| SEPTEMBER 30, 2000 |
| |
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| [CHURCH AND CROSS LOGO] |
| |
| |
| CAPSTONE |
| SOCIAL ETHICS |
| AND |
| RELIGIOUS VALUES FUND |
| |
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- -------------------------------------------------------------------------------
| |
| [LOGO] A Member of |
| THE CAPSTONE GROUP |
| OF MUTUAL FUNDS |
| |
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CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to present the annual report for Capstone Social Ethics and
Religious Values Fund for the period ended September 30, 2000.
ECONOMIC OVERVIEW
The highlights of the third quarter were the efforts by economic policymakers to
stem the rise in oil prices and to halt the decline in the euro. The quarter was
also marked by weaker than expected earnings reports which pushed the S&P 500 to
a 0.97% decline for the quarter. The tech-heavy NASDAQ index dropped 7.36% for
the quarter. Bonds are actually on track to outperform stocks for the first year
since 1990; the Lehman Aggregate Bond Index is up 7.12% since the start of the
year while the S&P is down 1.39% year-to-date.
The euro was launched on January 1st 1999 and was hailed by some as a currency
that could ultimately challenge the dominance of the U.S. dollar. Eleven
countries (including Germany and France) use the euro as their official currency
and coordinate their monetary policy through the European Central Bank (ECB).
Upon its launch 19 months ago, the euro was pegged at 1.18 dollars per euro. The
currency has been unable to "challenge" the dollar as it dropped to an all time
low of .8443 ($/euro) prior to a coordinated effort on the part of the U.S.,
Japan, Great Britain, Canada, and the ECB to establish a floor for the currency.
The precipitous decline in the euro has eroded the purchasing power of the
almost 300 million people living within the eurozone. With crude oil changing
hands in dollars, the nearly three-fold increase in U.S. oil prices since early
1999 amounts to an almost four-fold increase in oil prices for much of Europe.
When one adds in the high government taxes on gasoline in Europe, it is easy to
see why Europeans have little sympathy for Americans who complain about high gas
prices. One of the primary reasons for the intervention was to tame eurozone
inflation which rose 2.3% year-over-year in August. A secondary reason was to
help garner support from Danish voters who faced a referendum regarding
Denmark's inclusion as the twelfth country in the eurozone. The move was "too
little, too late" as the Danes rejected the measure by a 53-47 margin. So far,
the euro has not dropped below the intervention level. While a stronger euro
will make U.S. imports more expensive in the long-run the U.S. economy will
benefit from a European economy with a healthy currency, stable growth and
little inflation.
Following the intervention to raise the price of the euro, President Clinton
announced his plan to release 30 million barrels of oil from the 571 million
barrel Strategic Petroleum Reserve (SPR). Technically, the release is a "swap"
since the buyers will be required to replace the oil. The SPR was created after
the oil shocks of the 1970's to prevent supply disruptions in times of
emergencies. The SPR was last tapped in a major way in 1991 during the Persian
Gulf War. There have been other instances of minor releases (each less than 1
million barrels) during recent years due to regional pipeline disruptions. In
the days leading up to the President's announcement, the price of oil hit
$37.80, the highest price since Iraq invaded Kuwait in October 1990. By the end
of September,
-------------------------------------------------------
| |
| [GRAPHIC] |
| EURO PLUNGES VS. U.S. DOLLAR |
| 1/1/99 - 9/30/00 |
| |
| 1.15 |
| |
| 1.10 |
| |
| 1.05 |
| |
| 1.00 |
| |
| 0.95 |
| |
| 0.90 |
| |
| 0.85 |
| |
| 1/99 3/99 6/99 9/99 12/99 3/00 6/00 9/00 |
| |
| Source: Bloomberg |
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2
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
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prices had dropped to just under $31 per barrel. It is unlikely that the
administration's move will have a lasting impact on energy prices. The President
expressed concern that supplies of home heating oil for Northeasterners were at
very low levels, but the American Petroleum Institute (API) stated that
refineries are running at 94.7% capacity so supplies are likely to remain tight
for some time. The situation could become very serious if we experience a harsh
or early winter. The President failed to mention the 100% year-to-date rise in
natural gas prices. Only 8% of households use oil to heat their homes, while
natural gas is used by more than 30% of Americans. Natural gas is also the fuel
for 50% of the electricity generated in the U.S. We are becoming increasingly
concerned that energy prices could drain some of the strength from consumer
spending in the next six months.
For some time, we have been advising investors to anticipate equity returns that
are closer to the long-run market averages rather than the returns that we
witnessed in the late 90's. With the uncertainty looming over the global
economy, a more cautious tone may be warranted for investors.
EQUITY MARKET OVERVIEW
During the third quarter, we expected corporate earnings to have a significant
impact with growing potential for volatility and amplified market excitement.
Indeed, our expectations were realized. September brought with it a reversal
from August for all the major indices. The Nasdaq, the Dow Jones Industrial
Average and the S&P 500 Index were down 12.7%, 5.0%, and 5.3% respectively for
the month of September. This poor performance resulted in all three indices
turning negative on the year. By the end of the quarter, the Nasdaq, the Dow and
the S&P 500 were down 9.7%, 7.4% and 1.4% respectively, year-to-date. Unlike
recent quarters, when the great majority of the negative pre-announcements were
more company specific rather than indicative of industry or macro problems, this
time the three "e's" have been the common thread causing this market downturn.
Those are the slowing US economy, high energy prices and the weak euro.
Looking forward, we try to dissect "what the market is saying" but it has been
especially slippery in the past few years with the "new" and the "old" economy
segments moving in opposite directions. That dichotomy remains very much in
place. Since the middle of the third quarter, measures (including the Nasdaq and
the S&P 500 Index) have fallen more than 20% yet the old economy is doing much
better. The NYSE Index has fallen just 3% since mid quarter and the old-economy
segments of the S&P 500 have actually risen. These old-economy stocks are often
the better guides to the future of our economy and stock market performance. As
a blend of the old and new, the large cap portfolio is ideally suited to
participate in market sector rotation.
-------------------------------------------------------
| |
| [GRAPHIC] |
| OIL PRICES MOVE HIGHER |
| WEST TEXAS INTERMEDIATE CRUDE |
| |
| |
| |
| 35 |
| |
| 30 |
| |
| 25 |
| |
| 20 |
| |
| 15 |
| |
| 12/98 3/99 6/99 9/99 12/99 3/00 6/00 9/00 |
| |
| Source: Bloomberg |
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3
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
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FIXED INCOME MARKET OVERVIEW
During the third quarter the U.S. Treasury yield curve made some progress in
returning to a more normal shape. Under normal circumstances, the yield curve is
"upward sloping" as investors demand a higher interest rate in return for the
risk of holding longer dated securities. The yield curve inverted in January
when the yield on the thirty-year bond dipped below the yield on both ten-year
and two-year Treasuries. Through the first six months of the year the inversion
became more pronounced, and by the end of the second quarter the yield on
two-year Treasuries (6.36%) was 46 basis points (or 0.46%) above the thirty-year
bond (5.90%). For ten-year Treasuries the inversion was a less pronounced 12
basis points at the end of the second quarter, with ten-year securities sporting
a 6.02% yield. During the third quarter, investors witnessed a partial unwinding
of the inversion as yields on two-year Treasuries dropped to 5.97% while
thirty-year Treasuries finished the quarter with a yield of 5.88%, shrinking the
inversion between two's and thirty's to just nine basis points. The inversion
between ten's and thirty's was completely erased during the third quarter. This
process of a yield curve moving from an inverted shape to a more normal shape is
commonly referred to as "disinversion." The disinversion of the third quarter
was driven by a decline in shorter-term interest rates as investors became
increasingly convinced that the Federal Reserve was close to the conclusion of
the effort to raise the Fed Funds rate. At the same time, long-term interest
rates were basically unchanged as investors worried about inflation from higher
energy prices and also the prospect of a reduction in the retirement of
outstanding Treasury debt. The primary catalyst to lower long-term interest
rates this year has been the effort by the government to retire outstanding
debt. The budget proposals from both presidential candidates appear to be less
accommodative to this goal. Fixed income investors also fear the possibility
that one party could end up with control of both the executive and legislative
branches of government. Under such a scenario the "gridlock" of recent years
would be weakened possibly leading to smaller surpluses (or even deficits). For
the bond market, "gridlock" is a good thing.
Corporate bonds and U.S. Agency bonds were beneficiaries of the disinversion of
the Treasury yield curve. Ten-year agency yield spreads narrowed by 10 basis
points during the third quarter, leading to almost 100 basis points of excess
total return (both appreciation and income) over comparable maturity Treasuries.
As detailed on the corporate spread table below, the performance of the
corporate market was "mixed." Industrial yield spreads moved 11 basis points
wider during the third quarter on weaker-than-expected earnings reports and
concerns of increased supply in the telecommunications sector. The move to a
more normally shaped yield curve helped bank and finance spreads to rally, bank
spreads tightened by 27 basis points while finance spreads rallied 5 basis
points. The 27 basis point rally in bank spreads translates into more than 200
basis points (or 2.00%) of excess total return over ten-year U.S. Treasuries.
Merger announcements also helped to push bank and finance spreads tighter as
Citigroup announced their intention to purchase Associates, and Chase Manhattan
agreed to merge with J.P. Morgan. Both marriages seem poised to provide
investors with valuable synergies.
-------------------------------------------------------------------
| |
| [GRAPHIC] |
| TREASURY YIELD CURVE BEGINS TO "DISINVERT", BUT |
| REMAINS INVERTED |
| |
| 6.40 |
| |
| Y 6.30 |
| |
| I 6.20 |
| |
| E 6.10 |
| |
| L 6.00 |
| |
| D 5.90 |
| |
| 5.80 |
| |
| 3 6 1 2 5 Yr. 10 Yr. 30 Yr. |
| |
| Source: Bloomberg |
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4
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
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While we witnessed a partial unwinding of the inversion of the Treasury yield
curve during the third quarter, the Treasury curve remains inverted. The
inverted curve will continue to provide a unique challenge for fixed income
investors. With almost nine months since the inversion began, the surprise for
investors may be the number of months that this inversion ultimately lasts. At
the last two meetings of the Federal Reserve, members voted to maintain the bias
that the risks of higher inflation outweigh the evidence that slower growth is
on the horizon. So the short-end of the curve is unlikely to move lower until
the Fed adopts a "neutral bias." At the same time, rates at the long-end of the
yield curve are unlikely to move significantly higher unless we begin to see
inflation in other sectors besides energy prices. Corporate bonds and agency
securities should benefit from any additional disinversion.
For your reference, we have included tables showing the total returns for each
Capstone Social Ethics and Religious Values Fund. If you have any questions,
please feel free to contact us at (800) 262-6631. We thank you for your
continued support.
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| TEN YEAR "A" RATED CORPORATE BONDS |
| AVERAGE YIELD SPREAD OVER COMPARABLE U.S. TREASURIES |
| (BASIS POINTS*) |
| |
| CHANGE CHANGE |
| ------ ------ |
| SECTOR 12/31/99 6/30/00 9/30/00 12/99 - 9/00 6/00 - 9/00 |
| ------ -------- ------- ------- ------------ ----------- |
| |
| Industrial 115 149 160 +45 +11 |
| Utilities 101 172 173 +72 +1 |
| Banks 118 186 159 +41 -27 |
| Finance 120 188 183 +63 -5 |
| |
| Source: Lehman Brothers |
- -------------------------------------------------------------------------------
*A basis point (bp) is equal to one one-hundredth of one percent of yield and
represents the smallest unit measure for quoting bond yields. One hundred basis
points is equal to 1.00%.
Sincerely,
/S/___________________________ /s/__________________________
Edward L. Jaroski Dan E. Watson
President and Chairman of the Board Executive Vice President
5
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
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| |
| COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL |
| ETHICS AND RELIGIOUS VALUES FUND |
| (SHORT TERM BOND FUND AND THE "CUSTOM" INDEX*) |
| ----------------------------------------------------------- |
| | AVERAGE ANNUAL TOTAL RETURN | |
| | AS OF 9-30-00 | |
| ----------------------------------------------------------- |
| | | Class A | Class C | Custom | |
| | |----------|----------|----------| |
| | 1 yr. | 5.42% | 5.63% | 6.14% | |
| | |----------|----------|----------| |
| | Inception to date | 4.17% | 4.42% | 4.40% | |
| ----------------------------------------------------------- |
| Past performance is not predictive of future performance. |
| |
| |
| $11,000 |
| $10,899 |
| $10,800 |
| $10,779 |
| $10,600 $10,735 |
| |
| $10,400 |
| |
| $10,200 |
| |
| $10,000 |
| |
| $9,800 |
| |
| 1/5/99 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00 |
| |
| -----SERV Short Term --- --- SERV Short Term --- -- --- Short Term |
| Class A Class C Custom Index |
| |
- --------------------------------------------------------------------------------
* 1/3 Merrill 1-3 yr. Treasury Index.
* 1/3 Merrill 1-3 yr. Agency Index.
* 1/3 Merrill 1-3 yr. Corporate Index.
6
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
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| |
| COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL |
| ETHICS AND RELIGIOUS VALUES FUND |
| (BOND FUND AND THE LEHMAN BROTHERS GOV'T/CREDIT BOND INDEX) |
| |
| ------------------------------------------------------------ |
| | AVERAGE ANNUAL TOTAL RETURN | |
| | AS OF 9-30-00 | |
| ------------------------------------------------------------ |
| | | Class A | Class C |Lehman Bros| |
| | |----------|----------|-----------| |
| | 1 yr. | 6.08% | 6.34% | 6.72% | |
| | |----------|----------|-----------| |
| | Inception to date | 1.94% | 2.17% | 2.46% | |
| ------------------------------------------------------------ |
| Past performance is not predictive of future performance. |
| |
| $10,600 |
| $10,498 |
| $10,400 |
| $10,438 |
| $10,200 |
| $10,391 |
| $10,000 |
| |
| $9,800 |
| |
| $9,600 |
| |
| 10/1/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00|
| |
| -----SERV Bond Fund --- --- SERV Bond Fund --- -- --- Lehman Brothers |
| Class A Class C Gov't./Credit |
| Bond Index |
| |
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7
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
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| |
| COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL |
| ETHICS AND RELIGIOUS VALUES FUND |
| (LARGE CAP EQUITY FUND AND THE S&P 500 INDEX) |
| |
| |
| ----------------------------------------------------------- |
| | AVERAGE ANNUAL TOTAL RETURN | |
| | AS OF 9-30-00 | |
| ----------------------------------------------------------- |
| | | Class A | Class C | S&P 500 | |
| | |----------|----------|----------| |
| | 1 yr. | 12.07% | 12.34% | 13.28% | |
| | |----------|----------|----------| |
| | Inception to date | 19.82% | 20.08% | 20.32% | |
| ----------------------------------------------------------- |
| Past performance is not predictive of future performance. |
| |
| |
| $16,000 |
| |
| $15,000 |
| $14,478 |
| $14,000 $14,419 |
| $14,357 |
| $13,000 |
| |
| $12,000 |
| |
| $11,000 |
| |
| $10,000 |
| |
| 10/1/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00|
| |
| -----SERV Large Cap --- --- SERV Large Cap --- -- --- S&P 500 Index |
| Class A Class C |
- --------------------------------------------------------------------------------
8
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
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- --------------------------------------------------------------------------------
| |
| COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL |
| ETHICS AND RELIGIOUS VALUES FUND |
| (SMALL CAP EQUITY FUND AND THE S&P 600 INDEX) |
| |
| ----------------------------------------------------------- |
| | AVERAGE ANNUAL TOTAL RETURN | |
| | AS OF 9-30-00 | |
| ----------------------------------------------------------- |
| | | Class A | Class C | S&P 600 | |
| | |----------|----------|----------| |
| | 1 yr. | 24.68% | 24.98% | 24.18% | |
| | |----------|----------|----------| |
| | Inception to date | 20.92% | 21.17% | 20.81% | |
| ----------------------------------------------------------- |
| Past performance is not predictive of future performance. |
| |
| |
| $15,000 |
| $14,683 |
| $14,000 $14,621 |
| $14,595 |
| $13,000 |
| |
| $12,000 |
| |
| $11,000 |
| |
| $10,000 |
| |
| 10/1/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00|
| |
| -----SERV Small Cap --- --- SERV Small Cap --- -- --- S&P 600 Index |
| Class A Class C |
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9
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
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| |
| COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL |
| ETHICS AND RELIGIOUS VALUES FUND |
| (INTERNATIONAL FUND AND THE MSCI EAFE INDEX) |
| |
| ------------------------------------------------------------ |
| | AVERAGE ANNUAL TOTAL RETURN | |
| | AS OF 9-30-00 | |
| ------------------------------------------------------------ |
| | | Class A | Class C | MSCI EAFE | |
| | |----------|----------|-----------| |
| | 1 yr. | (1.22)% | (0.98)% | 3.43% | |
| | |----------|----------|-----------| |
| | Inception to date | 14.23% | 14.48% | 16.54% | |
| ------------------------------------------------------------ |
| Past performance is not predictive of future performance. |
| |
| |
| $16,000 |
| |
| $15,000 |
| |
| $14,000 $13,581 |
| |
| $13,000 $13,108 |
| $13,049 |
| $12,000 |
| |
| $11,000 |
| |
| $10,000 |
| |
| 10/1/98 12/31/98 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00|
| |
|-----SERV International --- --- SERV International --- -- --- MSCI EAFE Index |
| Class A Class C |
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10
<PAGE
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
MONEY MARKET FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------------------------------------
SHARES VALUE
----------- -----------
SHORT-TERM INVESTMENTS (95.51%)
AIM Prime Portfolio Money Market, Institutional Class ............................ 18,947,554 $18,947,554
-----------
REPURCHASE AGREEMENTS (1.33%)
Fifth Third Bank, 5.78%, dated 09/29/00, due 10/02/00, repurchase price
$264,452 (collateralized by FNMA Pool #413,208, 6.50%, due 3/01/18,
market value $269,612) (Cost $264,325) ........................................... 264,325 264,325
-----------
TOTAL INVESTMENTS (Cost $19,211,879) (96.84%) .............................. 19,211,879
OTHER ASSETS & LIABILITIES, NET (3.16%) .................................... 627,592
-----------
NET ASSETS (100%) ................................... $19,839,471
===========
SEE NOTES TO FINANCIAL STATEMENTS.
11
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SHORT-TERM BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- ---------------------------------------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
AGENCY OBLIGATIONS (32.71%)
FEDERAL FARM MORTGAGE CO. (9.21%)
5.50%, 03/26/02 ................................................................ $1,700,000 $ 1,669,978
6.10%, 11/19/01 ................................................................ 1,000,000 994,530
-----------
2,664,508
-----------
FEDERAL HOME LOAN BANK (12.77%)
7.65%, 06/13/03 ................................................................ 750,000 751,170
5.25%, 04/25/02 ................................................................ 3,000,000 2,943,750
-----------
3,694,920
-----------
FEDERAL HOME LOAN MORTGAGE CO. (7.28%)
4.75%, 12/14/01 ................................................................ 2,150,000 2,107,666
-----------
FEDERAL NATIONAL MORTGAGE ASSOC. (3.45%)
6.52%, 09/05/02 ................................................................ 1,000,000 998,750
-----------
TOTAL AGENCY OBLIGATIONS (Cost $9,501,837) ..................................... 9,465,844
-----------
CORPORATE BONDS (38.18%)
APPAREL (2.32%)
VF Corp., 9.50%, 05/01/01 ...................................................... 665,000 671,916
-----------
AUTOMOBILES (2.46%)
Ford Motor Co., 9.00%, 09/15/01 ................................................ 700,000 711,865
-----------
BANKS (2.03%)
Mercantile Bancorp, 6.80%, 06/15/01 ............................................ 590,000 588,153
-----------
CHEMICALS (2.28%)
Air Products & Chemicals, Inc., 8.35%, 01/15/02 ................................ 650,000 658,600
-----------
FINANCIAL SERVICES (14.11%)
Associates Corp. of North America, 6.05%, 05/01/03 ............................. 1,000,000 999,620
Citicorp, 6.38%, 11/12/02 ...................................................... 700,000 695,247
Donaldson, Lufkin, & Jenrette, Inc., 5.875%, 04/01/02 .......................... 750,000 738,578
GMAC, 9.625%, 12/15/01 ......................................................... 150,000 154,222
Lehman Brothers Holdings, Inc., 6.20%, 01/15/02 ................................ 600,000 593,202
Merrill Lynch & Co., 6.06%, 10/15/01 ........................................... 500,000 495,450
Sears Credit Account Trust, 9.00%, 10/01/01 .................................... 400,000 408,024
-----------
4,084,343
-----------
RAILROADS (2.58%)
Union Pacific Railroad C. Equipment Trust, 7.32%, 02/01/02 ..................... 750,000 747,300
-----------
12
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SHORT-TERM BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
RETAIL STORES (2.50%)
Penney (J.C.) Co., Inc., 7.25%, 04/01/02 ....................................... $ 500,000 $ 475,445
Penney (J.C.) Co., Inc., 9.05%, 03/01/01 ....................................... 250,000 247,998
-----------
723,443
-----------
TELECOMMUNICATIONS (6.94%)
360 Communications Co., 7.125%, 03/01/03 ....................................... 1,000,000 1,000,230
Southwestern Bell Telephone, 7.00%, 08/19/02 ................................... 1,000,000 1,006,800
-----------
2,007,030
-----------
UTILITIES (2.96%)
Mississippi Power Co., 6.05%, 05/01/03 ......................................... 875,000 855,794
-----------
TOTAL CORPORATE BONDS (Cost $11,106,512) ....................................... 11,048,444
-----------
U.S. TREASURY OBLIGATIONS (26.66%)
U.S. TREASURY NOTES
6.625%, 07/31/01 ............................................................... 200,000 200,438
6.25%, 08/31/02 ................................................................ 2,500,000 2,508,975
5.75%, 08/15/03 ................................................................ 2,000,000 1,988,740
6.25%, 12/15/03 ................................................................ 3,000,000 3,016,860
-----------
5,005,600
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $7,662,251) .............................. 7,715,013
-----------
REPURCHASE AGREEMENTS (0.91%)
Fifth Third Bank, 5.78%, dated 09/29/00, due 10/02/00, repurchase price $264,011
(collateralized by FNMA Pool #765081, 7.277%, due 05/01/26, market value
$269,162) (Cost $263,884) ...................................................... 263,884 263,884
-----------
TOTAL INVESTMENTS (Cost $28,534,484) (98.46%) ............................ 28,493,185
OTHER ASSETS & LIABILITIES, NET (1.54%) .................................. 446,606
-----------
NET ASSETS (100%) ........................................................ $28,939,791
-----------
Cost for federal income tax at September 30, 2000 was
$28,534,484 and net unrealized depreciation consisted of:
Gross unrealized appreciation ............................................ $ 99,475
Gross unrealized depreciation ............................................ (140,774)
-----------
Net unrealized depreciation .............................................. $ (41,299)
===========
SEE NOTES TO FINANCIAL STATEMENTS.
13
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
AGENCY OBLIGATIONS (16.73%)
FEDERAL FARM CREDIT BANK (2.50%)
5.25%, 05/01/02 ................................................................ $2,000,000 $ 1,963,486
-----------
FEDERAL HOME LOAN BANK (1.79%)
5.80%, 09/02/08 ................................................................ 1,500,000 1,409,480
-----------
FEDERAL HOME LOAN MORTGAGE CO. (6.57%)
4.75%, 12/14/01 ................................................................ 1,000,000 980,197
6.30%, 04/29/09 ................................................................ 3,000,000 2,946,453
6.45%, 04/29/09 ................................................................ 1,300,000 1,232,609
-----------
5,159,259
-----------
FEDERAL NATIONAL MORTGAGE ASSOC. (5.29%)
6.00%, 05/15/08 ................................................................ 1,500,000 1,432,118
6.375%, 06/15/09 ............................................................... 2,800,000 2,723,627
-----------
4,155,745
-----------
UTILITIES (0.58%)
Tennessee Valley Authority, 6.00%, 03/15/13 .................................... 500,000 458,860
-----------
TOTAL AGENCY OBLIGATIONS (Cost $13,217,602) .................................... 13,146,830
-----------
CORPORATE BONDS (29.97%)
AEROSPACE (0.38%)
McDonnell Douglas Corp., 6.875%, 11/01/06 ...................................... 300,000 296,150
-----------
AIRLINES (0.79%)
AMR Corp., 9.00%, 08/01/12 ..................................................... 300,000 306,995
Delta Air Lines, Inc., 9.75%, 05/15/21 ......................................... 300,000 314,690
-----------
621,685
-----------
AUTO PARTS & EQUIPMENT (0.33%)
Autozone, Inc., 6.50%, 07/15/08 ................................................ 300,000 263,038
-----------
AUTOMOBILE MANUFACTURERS (0.39%)
Daimler Chrysler, 7.40%, 01/20/05 .............................................. 300,000 302,639
-----------
14
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
BANKS (4.06%)
BankBoston NA, 6.375%, 04/15/08 ................................................ $ 300,000 $ 281,414
Bankers Trust Corp., 8.125%, 05/15/02 .......................................... 110,000 111,886
First Union Corp., 8.125%, 06/24/02 ............................................ 300,000 304,626
Keycorp, 7.50%, 06/15/06 ....................................................... 300,000 300,832
Mellon Financial Co., 6.875%, 03/01/03 ......................................... 300,000 299,897
National City Corp., 5.75%, 02/01/09 ........................................... 300,000 265,006
Nationsbank Corp., 6.875%, 02/15/05 ............................................ 100,000 99,177
Norwest Financial, Inc., 7.00%, 01/15/03 ....................................... 100,000 100,392
PNC Funding Corp., 6.875%, 03/01/03 ............................................ 300,000 298,774
Republic NY Corp., 7.75%, 05/15/02 ............................................. 290,000 293,077
Southtrust Bank, Inc., 6.125%, 01/09/28 ........................................ 175,000 159,694
SunTrust Bank, Inc., 7.375%, 07/01/06 .......................................... 300,000 302,382
Wachovia Corp., 6.605%, 10/01/25 ............................................... 175,000 171,776
Wells Fargo Co., 6.875%, 04/01/06 .............................................. 200,000 198,469
-----------
3,187,402
-----------
CHEMICALS (1.02%)
Dow Chemical Co., 6.85%, 08/15/13 .............................................. 300,000 284,383
Dupont De Nemours (E. I.) Co., 8.125%, 03/15/04 ................................ 235,000 244,109
Lubrizol Corp., 5.875%, 12/01/08 ............................................... 300,000 274,260
-----------
802,752
-----------
COMPUTER SERVICES & SOFTWARE (0.38%)
Electronic Data Systems Corp., 7.125%, 10/15/09 ................................ 300,000 296,250
-----------
COMPUTER SYSTEMS (1.12%)
Hewlett-Packard Co., 7.15%, 06/15/05 ........................................... 300,000 304,234
Honeywell International, Inc., 7.50%, 03/01/10 ................................. 300,000 306,123
International Business Machines Corp., 5.375%, 02/01/09 ........................ 300,000 268,690
-----------
879,047
-----------
COSMETICS & TOILETRIES (0.76%)
Procter & Gamble Co., 8.00%, 10/26/29 .......................................... 300,000 320,566
Scott Paper Co., 7.00%, 08/15/23 ............................................... 300,000 273,069
-----------
593,635
-----------
DIVERSIFIED CONGLOMERATES (0.31%)
PPG Industries., Inc., 7.375%, 06/01/16 ........................................ 250,000 245,166
-----------
ELECTRONIC EQUIPMENT (0.72%)
Emerson Electric Co., 5.85%, 03/15/09 .......................................... 300,000 276,599
Motorola, Inc., 6.50%, 03/01/08 ................................................ 300,000 287,695
-----------
564,294
-----------
15
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
FINANCIAL SERVICES (6.12%)
Allstate Corp., 6.75%, 05/15/18 ................................................ $ 300,000 $ 268,967
Associates Corp. of N.A., 6.50%, 10/15/02 ...................................... 300,000 298,710
Bear Stearns Co., Inc., 6.625%, 01/15/04 ....................................... 300,000 295,048
Charles Schwab Corp., 8.05%, 03/01/10 .......................................... 230,000 237,856
Citigroup, Inc., 5.80%, 03/15/04 ............................................... 300,000 291,484
Duke Capital, 7.50%, 10/01/09 .................................................. 300,000 300,776
Ford Motor Credit Co., 8.00%, 06/15/02 ......................................... 300,000 305,256
General Electric Capital Corp., 5.50%, 11/01/01 ................................ 200,000 197,340
General Electric Capital Corp., 7.00%, 02/03/03 ................................ 300,000 302,218
General Motors Acceptance Corp., 6.75%, 02/07/02 ............................... 300,000 299,409
Hartford Life, Inc., 7.10%, 06/15/07 ........................................... 175,000 173,096
Hartford Life, Inc., 7.65%, 06/15/27 ........................................... 200,000 192,478
Household Finance Corp., 6.00%, 05/01/04 ....................................... 300,000 288,784
Lehman Bros. Holdings, 8.875%, 03/01/02 ........................................ 200,000 188,788
Merrill Lynch & Co., Inc., 6.25%, 01/15/06 ..................................... 100,000 95,889
Merrill Lynch & Co., Inc., 8.00%, 06/01/07 ..................................... 200,000 207,223
Morgan Stanley Dean Witter, 6.875%, 03/01/07 ................................... 300,000 295,660
Morgan, (J.P.) Co., Inc., 7.625%, 09/15/04 ..................................... 300,000 305,899
Toyota Motor Credit Corp., 5.50%, 12/15/08 ..................................... 300,000 268,940
-----------
4,813,821
-----------
FOOD & BEVERAGE (1.66%)
Albertson's, Inc., 7.45%, 08/01/29 ............................................. 300,000 269,156
Archer Daniels ADM., 7.125%, 03/01/13 .......................................... 300,000 285,080
Campbell Soup Co., 6.90%, 10/15/06 ............................................. 300,000 299,408
Heinz, (H. J.) Co., 6.00%, 03/15/08 ............................................ 300,000 281,050
Kroger Co., 7.00%, 05/01/18 .................................................... 200,000 173,528
-----------
1,308,222
-----------
MEDICAL PRODUCTS (0.94%)
American Home Products Corp., 7.90%, 02/15/05 .................................. 300,000 310,552
Bausch & Lomb, Inc., 6.75%, 12/15/04 ........................................... 200,000 177,345
Baxter International, Inc., 6.625%, 02/15/28 ................................... 300,000 249,852
-----------
737,749
-----------
MULTIMEDIA (0.34%)
Time Warner, Inc., 6.875%, 06/15/18 ............................................ 300,000 268,035
-----------
OFFICE EQUIPMENT (0.33%)
Xerox Corp., 7.20%, 04/01/16 ................................................... 300,000 256,438
-----------
OIL & GAS (1.27%)
Atlantic Richfield Co., 8.25%, 02/01/22 ........................................ 200,000 219,776
Chevron Capital USA, Inc., 7.45%, 08/15/04 ..................................... 300,000 302,292
Southern Union Co., 7.60%, 02/01/24 ............................................ 175,000 161,395
Texaco Capital, Inc., 8.50%, 02/15/03 .......................................... 300,000 311,219
-----------
994,682
-----------
16
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
PAPER AND FOREST PRODUCTS (0.68%)
International Paper Co., 7.625%, 01/15/07 ...................................... $ 250,000 $ 248,445
Weyerhaeuser Co., 7.25%, 07/01/13 .............................................. 300,000 285,844
-----------
534,289
-----------
PHARMACEUTICAL (0.36%)
Bristol-Myers Squibb Co., 6.80%, 11/15/26 ...................................... 300,000 286,360
-----------
PIPELINES (0.23%)
Enron Corp., 8.25%, 09/15/12 ................................................... 175,000 183,095
-----------
RAILROADS (0.75%)
Norfolk South Corp., 6.95%, 05/01/02 ........................................... 300,000 298,886
Union Pacific Corp., 6.125%, 01/15/04 .......................................... 300,000 289,245
-----------
588,131
-----------
REAL ESTATE INVESTMENT TRUST (0.25%)
EOP Operating L.P., 7.25%, 02/15/18 ............................................ 225,000 197,478
-----------
RETAIL STORES (1.23%)
Penney, (J. C.) Co., Inc., 7.25%, 04/01/02 .................................... 100,000 96,308
Safeway, Inc., 7.00%, 09/15/07 ................................................. 300,000 290,242
Sears Roebuck & Co., 6.50%, 06/15/00 ........................................... 300,000 291,490
Wal-Mart Stores, Inc., 5.875%, 10/15/05 ........................................ 300,000 289,822
-----------
967,862
-----------
TELECOMMUNICATIONS (2.67%)
AT&T Corp., 7.50%, 06/01/06 .................................................... 300,000 304,549
Bell Tel-Penn Co., 6.625%, 09/15/02 ............................................ 175,000 174,749
GTE Florida, Inc., 6.86%, 02/01/28 ............................................. 300,000 267,887
Lucent Technologies, Inc., 7.25%, 07/15/06 ..................................... 300,000 301,082
New York Telephone Co., 6.25%, 02/15/04 ........................................ 100,000 97,230
New York Telephone Co., 7.25%, 02/15/24 ........................................ 100,000 89,638
Pacific Bell, 6.25%, 03/01/05 .................................................. 200,000 194,916
Southern New England Telecommunications Corp., 7.00%, 08/15/05 ................. 100,000 100,126
US WEST Communications, Inc., 6.375%, 10/15/02 ................................. 300,000 295,736
WorldCom, Inc., 6.95%, 08/15/28 ................................................ 300,000 271,576
-----------
2,097,489
-----------
UTILITIES (2.66%)
Carolina Power & Light Co., 5.95%, 03/01/09 .................................... 300,000 271,910
Central Power & Light Co., 6.625%, 07/01/05 .................................... 270,000 263,948
Commonwealth Edison, 8.625%, 02/01/22 .......................................... 150,000 151,467
Consolidated Edison, Inc., 6.375%, 04/01/03 .................................... 300,000 296,354
Consolidated Natural Gas Co., 6.625%, 12/01/08 ................................. 300,000 282,794
Florida Power & Light Co., 7.00%, 09/01/24 ..................................... 300,000 264,714
Philadelphia Electric Co., 5.625%, 11/01/01 .................................... 300,000 295,573
Public Service Electric & Gas Co., 7.00%, 09/01/24 ............................. 300,000 263,808
-----------
2,090,568
-----------
17
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
WASTE MANAGEMENT (0.22%)
WMX Technologies, Inc., 6.70%, 05/01/01 ........................................ $ 175,000 $ 173,421
-----------
TOTAL CORPORATE BONDS (Cost $24,341,936) ....................................... 23,549,698
-----------
FOREIGN BONDS (7.82%)
FOREIGN CORPORATE BONDS (4.66%)
ABN Amro N.V., 7.55%, 06/28/06[dagger] ......................................... 300,000 305,960
Amoco Canada Petroleum Co., 7.25%, 12/01/02[dagger] ............................ 200,000 202,019
Banque Paribas, 8.35%, 06/15/07[dagger] ........................................ 225,000 229,514
Barclays Bank Plc, 7.40%, 12/15/09[dagger] ..................................... 300,000 295,719
Bayerische Landesbank Ciro, 7.375%, 12/14/02[dagger] ........................... 300,000 303,218
Bell Canada, 9.50%, 10/15/10[dagger] ........................................... 200,000 227,022
Deutsche Bank Financial Inc., 6.70%, 12/31/06[dagger] .......................... 175,000 169,830
Dresdner Bank NY, 6.625%, 09/15/05[dagger] ..................................... 300,000 292,171
Hanson Overseas B.V., 7.375%, 01/15/03[dagger] ................................. 300,000 301,044
Lb Baden-Wuerttenberg, 7.625%, 02/01/23[dagger] ................................ 200,000 200,737
National Westminster Bancorp, Inc., 7.375%, 10/01/09[dagger] ................... 300,000 295,518
Norsk Hydro, 6.70%, 01/15/18[dagger] ........................................... 300,000 263,795
Sony Corp., 6.125%, 03/04/03[dagger] ........................................... 300,000 295,647
Swiss Bank Corp., NY, 7.00%, 10/15/15[dagger] .................................. 300,000 279,520
-----------
3,661,714
-----------
FOREIGN GOVERNMENT REGIONAL (3.16%)
Government of Canada, 6.375%, 11/30/04[dagger] ................................. 300,000 297,216
International Bank for Reconstruction & Development, 7.00%, 01/27/05[dagger] ... 400,000 406,649
Providence of Saskatchewan, 8.00%, 02/01/13[dagger] ............................ 270,000 281,708
Providence of Manitoba, 8.00%, 04/15/02[dagger] ................................ 175,000 178,168
Providence of Nova Scotia, 7.25%, 07/27/13[dagger] ............................. 100,000 99,376
Providence of Ontario, 5.50%, 10/01/08[dagger] ................................. 300,000 274,456
Province of Quebec, 6.50%, 01/17/06[dagger] .................................... 300,000 294,732
Republic of Finland, 7.875%, 07/28/04[dagger] .................................. 300,000 311,665
Republic of Portugal, 5.75%, 10/08/03[dagger] .................................. 350,000 340,131
-----------
2,484,101
-----------
TOTAL FOREIGN BONDS (Cost $6,333,564) .......................................... 6,145,815
-----------
U.S. TREASURY OBLIGATIONS (43.54%)
TREASURY BONDS (17.24%)
6.25%, 08/15/23 ................................................................ 3,500,000 3,564,533
6.75%, 08/15/26 ................................................................ 2,000,000 2,175,626
7.50%, 11/15/16 ................................................................ 2,600,000 2,962,374
7.875%, 02/15/21 ............................................................... 2,000,000 2,405,000
8.125%, 08/15/19 ............................................................... 2,000,000 2,441,875
-----------
13,549,408
-----------
18
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
TREASURY NOTES (26.30%)
12/31/02, 5.625% ............................................................... $2,500,000 $ 2,481,250
4.75%, 11/15/08 ................................................................ 300,000 277,594
5.75%, 08/15/03 ................................................................ 1,700,000 1,690,970
5.875%, 02/15/04 ............................................................... 2,300,000 2,296,407
6.375%, 08/15/02 ............................................................... 4,200,000 4,224,940
6.50%, 08/15/05 ................................................................ 2,550,000 2,614,548
7.25%, 05/15/04 ................................................................ 1,900,000 1,980,750
7.50%, 02/15/05 ................................................................ 2,800,000 2,970,626
7.50%, 11/15/01 ................................................................ 2,100,000 2,127,561
-----------
20,664,646
-----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $35,362,817) ............................. 34,214,054
-----------
REPURCHASE AGREEMENTS (0.42%)
Fifth Third Bank, 5.78%, dated 09/29/00, due 10/02/00, repurchase price $326,681
(collateralized by FNMA Pool #421910, 8.371%, due 04/01/28, market value
$333,054) (Cost $326,524) ...................................................... 326,524 326,524
-----------
TOTAL INVESTMENTS (Cost $79,582,443) (98.48%) ............................ 77,382,921
OTHER ASSETS & LIABILITIES, NET (1.52%) .................................. 1,193,574
-----------
NET ASSETS (100%) ........................................................ $78,576,495
===========
[dagger]Denominated in U.S. Dollars ............................................
Cost for federal income tax at September 30, 2000 was $79,582,443 and net
unrealized depreciation consisted of:
Gross unrealized appreciation ............................................ $ 422,712
Gross unrealized depreciation ............................................ (2,622,234)
-----------
Net unrealized depreciation .............................................. $(2,199,522)
===========
SEE NOTES TO FINANCIAL STATEMENTS
19
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCK (99.19%)
ADVERTISING (0.25%)
Interpublic Group of Cos., Inc. ................................................ 4,954 $ 168,746
Omnicom Group, Inc. ............................................................ 3,630 264,763
Young & Rubicam, Inc. .......................................................... 1,210 59,895
------------
493,404
------------
AEROSPACE (1.11%)
BF Goodrich Co. ................................................................ 1,631 63,915
Boeing Co. ..................................................................... 15,219 958,797
General Dynamics Corp. ......................................................... 3,180 199,744
Lockheed Martin Corp. .......................................................... 6,256 206,198
Northrop Grumman Corp. ......................................................... 970 88,149
Raytheon Co. Cl B .............................................................. 5,103 145,117
United Technologies Corp. ...................................................... 7,910 547,768
------------
2,209,688
------------
AIRLINES (0.24%)
AMR Corp. ...................................................................... 2,954 96,559
Delta Air Lines, Inc. .......................................................... 2,720 120,700
Southwest Airlines Co. ......................................................... 9,006 218,396
US Airways Group, Inc.* ........................................................ 1,293 39,356
------------
475,011
------------
APPAREL (0.14%)
Liz Claiborne, Inc. ............................................................ 1,040 40,040
Nike, Inc. Cl B ................................................................ 4,592 183,967
Russell Corp. .................................................................. 320 5,080
VF Corp. ....................................................................... 2,168 53,522
------------
282,609
------------
APPLIANCES (0.05%)
Maytag Corp. ................................................................... 1,390 43,177
Whirlpool Corp. ................................................................ 1,394 54,192
------------
97,369
------------
AUTO PARTS & EQUIPMENT (0.22%)
Autozone, Inc. ................................................................. 2,297 52,113
Dana Corp. ..................................................................... 2,765 59,448
Delphi Automotive Systems Corp. ................................................ 7,784 117,733
Genuine Parts Co. .............................................................. 2,920 55,662
Navistar International Corp.* .................................................. 720 21,555
TRW Corp. ...................................................................... 1,975 80,234
Visteon Corp. .................................................................. 2,698 40,807
------------
427,552
------------
20
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
AUTOMOBILE MANUFACTURERS (0.79%)
Ford Motor Co. ................................................................. 36,026 $ 911,908
General Motors Corp. ........................................................... 9,094 591,110
Paccar, Inc. ................................................................... 1,586 58,781
------------
1,561,799
------------
BANKS (5.73%)
AmSouth Bancorp ................................................................ 5,340 66,750
Bank of America Corp. .......................................................... 29,338 1,536,578
Bank of New York Co., Inc. ..................................................... 12,178 682,729
Bank One Corp. ................................................................. 18,604 718,580
BB&T Corp. ..................................................................... 5,540 166,892
Chase Manhattan Corp. .......................................................... 20,088 927,814
Comerica, Inc. ................................................................. 2,708 158,249
Fifth Third Bancorp ............................................................ 8,082 435,418
First Union Corp. .............................................................. 16,464 529,935
Firstar Corp. .................................................................. 15,471 346,164
Fleet Boston Financial Corp. ................................................... 17,301 674,739
Golden West Financial Corp. .................................................... 3,640 195,195
Keycorp ........................................................................ 6,330 160,228
Mellon Financial Corp. ......................................................... 8,430 390,941
Morgan, (J.P.) & Co., Inc. ..................................................... 3,052 498,620
National City Corp. ............................................................ 9,284 205,408
Northern Trust Corp. ........................................................... 4,220 375,052
Old Kent Financial Corp.* ...................................................... 2,163 62,592
PNC Bank Corp. ................................................................. 6,955 452,075
Regions Financial Corp. ........................................................ 2,960 67,155
SouthTrust Corp. ............................................................... 2,320 72,935
State Street Boston Corp. ...................................................... 2,930 380,900
Summit Bancorp ................................................................. 2,590 89,355
Suntrust Banks, Inc. ........................................................... 5,665 282,188
Synovus Financial Corp. ........................................................ 3,735 79,135
U.S. Bancorp ................................................................... 11,862 269,860
Union Planters Corp. ........................................................... 2,310 76,374
Wachovia Corp. ................................................................. 4,052 229,698
Wells Fargo & Co. .............................................................. 26,814 1,231,768
------------
11,363,327
------------
BROADCASTING (1.26%)
Clear Channel Communications, Inc.* ............................................ 10,520 594,380
Meredith Corp. ................................................................. 2,178 64,251
Time Warner, Inc. .............................................................. 23,570 1,844,352
------------
2,502,983
------------
21
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
BUILDING (0.11%)
Armstrong Holdings, Inc. ........................................................ 460 $ 5,491
Centex Corp. ................................................................... 250 8,031
Masco Corp. .................................................................... 6,840 127,395
Owens Corning .................................................................. 926 2,431
Vulcan Materials ............................................................... 1,760 70,730
------------
214,078
------------
CHEMICALS (0.82%)
Air Products & Chemicals, Inc. ................................................. 3,698 133,128
Ashland, Inc. .................................................................. 1,015 34,193
Dow Chemical Co. ............................................................... 11,733 292,592
Dupont, (E. I.) De Nemours & Co. ............................................... 17,054 706,675
Eastman Chemical Co. ........................................................... 1,360 50,235
Engelhard Corp. ................................................................ 984 15,990
FMC Corp. ...................................................................... 320 21,460
Grace, (W.R.) & Co. ............................................................ 444 3,052
Great Lakes Chemical Corp. ..................................................... 570 16,708
Hercules, Inc. ................................................................. 1,153 16,286
Praxair, Inc. .................................................................. 2,531 94,596
Rohm & Haas Co. ................................................................ 3,498 101,661
Sigma Aldrich Corp. ............................................................ 1,948 64,284
Union Carbide Corp. ............................................................ 2,146 81,012
------------
1,631,872
------------
COMMERCIAL SERVICES (0.19%)
Block, (H & R), Inc. ........................................................... 1,370 50,776
Cendant Corp.* ................................................................. 10,146 110,338
Convergys Corp.* ............................................................... 1,870 72,696
Deluxe Corp. ................................................................... 2,617 53,158
Ecolab, Inc. ................................................................... 2,136 77,030
Quintiles Transnational Corp. .................................................. 1,350 21,516
------------
385,514
------------
COMPONENTS (0.07%)
Johnson Controls, Inc. ......................................................... 1,564 83,185
Parker Hannifin Corp. .......................................................... 1,901 64,159
------------
147,344
------------
COMPUTER HARDWARE (7.31%)
Apple Computer, Inc. ........................................................... 5,258 135,394
Compaq Computer Corp. .......................................................... 26,440 729,215
Dell Computer Corp.* ........................................................... 40,272 1,240,881
EMC Corp.* ..................................................................... 34,158 3,385,912
Gateway 2000, Inc.* ............................................................ 5,060 236,555
22
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
Hewlett-Packard Co. ............................................................ 15,883 $ 1,540,651
International Business Machines Corp. .......................................... 28,306 3,184,425
Seagate Technology, Inc.* ...................................................... 3,595 248,055
Sun Microsystems, Inc.* ........................................................ 24,982 2,916,648
VERITAS Software Co. ........................................................... 6,300 894,600
------------
14,512,336
------------
COMPUTER SERVICES & SOFTWARE (8.58%)
Adaptec, Inc.* ................................................................. 1,370 27,400
Adobe Systems, Inc. ............................................................ 1,880 291,870
America Online, Inc. ........................................................... 36,170 1,944,138
Autodesk, Inc. ................................................................. 1,220 30,958
Automatic Data Processing, Inc. ................................................ 11,140 744,988
BMC Software, Inc. ............................................................. 4,130 78,986
Cabletron Systems, Inc.* ....................................................... 2,760 81,075
Ceridian Corp.* ................................................................ 2,290 64,263
Citrix Systems, Inc.* .......................................................... 2,950 59,184
Computer Associates International, Inc. ........................................ 10,075 253,764
Computer Sciences Corp.* ....................................................... 2,938 218,146
Compuware Corp.* ............................................................... 5,090 42,629
Comverse Technology, Inc.* ..................................................... 2,360 254,880
Electronic Data Systems Corp. .................................................. 8,320 345,280
First Data Corp. ............................................................... 7,681 300,039
Intuit, Inc. ................................................................... 18,060 739,331
Mercury Interactive Corp.* ..................................................... 1,240 194,370
Microsoft Corp.* ............................................................... 82,274 4,957,008
NCR Corp.* ..................................................................... 1,740 65,794
Network Appliance, Inc.* ....................................................... 4,840 616,495
Novell, Inc.* .................................................................. 4,239 42,125
Oracle Corp.* .................................................................. 44,326 3,490,672
Parametric Technology Corp. .................................................... 3,530 38,609
PE Corp. - PE Biosystems Group ................................................. 3,410 397,265
Peoplesoft, Inc.* .............................................................. 4,050 113,147
Sapient Corp. .................................................................. 1,640 66,728
Siebel Systems, Inc.* .......................................................... 6,470 720,192
Unisys Corp.* .................................................................. 5,100 57,375
Yahoo, Inc. .................................................................... 8,740 795,340
------------
17,032,051
------------
CONSUMER PRODUCTS (0.41%)
American Greetings Corp. Cl A .................................................. 1,610 28,175
The Clorox Co. ................................................................. 4,752 188,001
Tupperware Corp. ............................................................... 1,721 30,978
Unilever NV .................................................................... 11,840 571,280
------------
818,434
------------
23
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
CONTAINERS (0.08%)
Ball Corp. ..................................................................... 290 $ 9,189
Bemis Inc. ..................................................................... 755 24,254
Crown Cork & Seal Co., Inc. .................................................... 1,796 19,195
Owens Illinois, Inc.* .......................................................... 2,120 19,610
Pactiv Corporation ............................................................. 2,248 25,150
Sealed Air Corp.* .............................................................. 1,225 55,431
------------
152,829
------------
COSMETICS & TOILETRIES (1.76%)
Alberto-Culver Co. ............................................................. 1,630 46,964
Avon Products, Inc. ............................................................ 4,478 183,038
Colgate-Palmolive Co. .......................................................... 10,918 515,330
Gillette Co. ................................................................... 18,708 577,610
Int'l Flavors & Fragrance, Inc. ................................................ 4,216 76,942
Kimberly Clark Corp. ........................................................... 9,916 553,437
Procter & Gamble Co. ........................................................... 22,972 1,539,124
------------
3,492,445
------------
DIVERSIFIED CONGLOMERATES (6.39%)
Cooper Industries, Inc. ........................................................ 1,264 44,556
Corning, Inc. .................................................................. 4,663 1,384,911
Crane Co. ...................................................................... 720 16,470
Danaher Corp. .................................................................. 2,220 110,445
Eaton Corp. .................................................................... 1,030 63,474
General Electric ............................................................... 157,118 9,063,745
Illinois Tool Works, Inc. ...................................................... 5,346 298,708
ITT Industries, Inc. ........................................................... 1,258 40,806
National Service Industries, Inc. .............................................. 1,400 27,388
PPG Industries, Inc. ........................................................... 3,265 129,580
Textron, Inc. .................................................................. 2,610 120,386
Tyco International Ltd. ........................................................ 26,708 1,385,478
------------
12,685,947
------------
ELECTRONIC EQUIPMENT (6.41%)
Advanced Micro Devices, Inc.* .................................................. 5,978 141,230
Agilent Technologies, Inc. ..................................................... 6,740 329,839
Altera Corp.* .................................................................. 5,940 283,635
Analog Devices, Inc.* .......................................................... 5,590 461,524
Conexant Systems, Inc.* ........................................................ 3,410 142,794
Emerson Electric Co. ........................................................... 7,396 495,532
Intel Corp. .................................................................... 105,324 4,384,112
KLA-Tencor Corp.* .............................................................. 2,810 115,737
Linear Technology Corp. ........................................................ 5,100 330,225
LSI Logic Corp.* ............................................................... 4,740 138,645
Maxim Integrated Products, Inc. ................................................ 4,350 349,903
Micron Technology, Inc.* ....................................................... 8,646 397,716
Molex, Inc. .................................................................... 3,112 169,410
Motorola Rights, Inc. .......................................................... 33,498 946,318
24
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
National Semiconductor Corp.* .................................................. 2,700 $ 108,675
Novellus Systems* .............................................................. 1,660 77,294
Sanmina Corp.* ................................................................. 2,080 194,740
Solectron Corp.* ............................................................... 9,060 417,892
Tektronix, Inc. ................................................................ 570 43,783
Teradyne, Inc. ................................................................. 2,660 93,100
Texas Instruments, Inc. ........................................................ 27,048 1,276,328
Thomas & Betts Corp. ........................................................... 605 10,550
Uniphase Corp. ................................................................. 14,580 1,380,544
Xilinx, Inc.* .................................................................. 5,080 434,975
------------
12,724,501
------------
ENGINEERING (0.02%)
Fluor Corp. .................................................................... 1,350 40,500
------------
ENGINES (0.01%)
Briggs & Stratton Corp. ........................................................ 180 6,806
Cummins Engine Co., Inc. ....................................................... 460 13,771
------------
20,577
------------
ENTERTAINMENT & LEISURE (0.07%)
Brunswick Corp. ................................................................ 1,744 31,828
Hasbro, Inc. ................................................................... 3,175 36,314
Mattel, Inc. ................................................................... 6,541 73,177
------------
141,319
------------
FINANCIAL SERVICES (7.05%)
American Express Co. ........................................................... 21,498 1,306,004
Associates First Capital Corp. ................................................. 11,452 435,176
Bear Stearns Co., Inc. ......................................................... 1,037 65,331
Capital One Financial Corp. .................................................... 3,110 217,894
Citigroup, Inc. ................................................................ 73,178 3,956,186
Countrywide Credit Industries, Inc. ............................................ 1,500 56,625
Dun & Bradstreet Corp. ......................................................... 3,266 112,473
Equifax, Inc. .................................................................. 2,260 60,879
Fannie Mae ..................................................................... 16,781 1,199,842
Federal Home Loan Mortgage Corp. ............................................... 11,228 607,014
Franklin Resources, Inc. ....................................................... 3,610 160,392
Household International, Inc. .................................................. 7,669 434,257
Huntington Bancshares, Inc. .................................................... 3,412 50,114
Lehman Brothers Holding, Inc. .................................................. 1,680 248,220
MBNA Corp. ..................................................................... 12,755 491,068
Merrill Lynch & Co., Inc. ...................................................... 11,904 785,664
Morgan Stanley Dean Witter & Co. ............................................... 17,734 1,621,553
Paine Webber Group, Inc. ....................................................... 1,820 123,988
Paychex, Inc. .................................................................. 6,362 334,005
Providian Financial Corp. ...................................................... 2,306 292,862
Schwab, (Charles) Corp. ........................................................ 19,215 682,132
Stillwell Financial, Inc. ...................................................... 3,420 148,770
25
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
T. Rowe Price Associates, Inc. ................................................. 1,610 $ 75,569
USA Education, Inc. ............................................................ 2,370 114,204
Washington Mutual Financial Services, Inc. ..................................... 10,131 403,340
------------
13,983,562
------------
FOOD & BEVERAGE (2.28%)
Albertson's, Inc. .............................................................. 7,812 164,052
Archer-Daniels-Midland Co. ..................................................... 15,982 137,845
Best Foods Co. ................................................................. 6,938 504,740
Campbell Soup Co. .............................................................. 8,854 229,097
General Mills, Inc. ............................................................ 8,008 284,284
Heinz, (H.J.) Co. .............................................................. 8,897 329,745
Hershey Foods Corp. ............................................................ 4,300 232,738
Kellogg Co. .................................................................... 9,190 222,283
Kroger Co.* .................................................................... 16,954 382,525
Nabisco Group Holdings Corp. ................................................... 8,330 237,405
Quaker Oats Co. ................................................................ 4,501 356,142
Ralston-Ralston Purina Group ................................................... 6,368 150,842
Safeco Corp. ................................................................... 9,600 448,200
Supervalu, Inc. ................................................................ 4,340 65,371
Sysco Corp. .................................................................... 7,948 368,092
Winn Dixie Stores, Inc. ........................................................ 3,390 48,731
Wrigley, (Wm.) Jr. Co. ......................................................... 4,745 355,282
------------
4,517,374
------------
FOREST & PAPER PRODUCTS (0.36%)
Boise Cascade Corp. ............................................................ 485 12,883
Fort James Corp. ............................................................... 3,102 94,805
Georgia-Pacific Group .......................................................... 2,196 51,606
International Paper Co. ........................................................ 7,541 216,332
Louisiana-Pacific Corp. ........................................................ 970 8,912
The Mead Corp. ................................................................. 1,360 31,790
Potlatch Corp. ................................................................. 360 11,385
Temple Inland, Inc. ............................................................ 820 31,058
Westvaco Corp. ................................................................. 1,436 38,323
Weyerhaeuser Co. ............................................................... 3,974 160,450
Willamette Industries, Inc. .................................................... 1,666 46,648
------------
704,192
------------
HEALTH CARE (0.59%)
Bard, (C. R.) Inc. ............................................................. 1,180 49,855
HCA - The Healthcare Co. ....................................................... 9,872 366,498
Healthsouth Rehabilitation Corp.* .............................................. 5,860 47,612
Manor Care, Inc.* .............................................................. 1,785 28,002
McKesson HBOC, Inc. ............................................................ 4,069 124,359
Tenet Healthcare Corp.* ........................................................ 5,613 204,173
Unitedhealth Group, Inc. ....................................................... 2,720 268,600
Wellpoint Health Networks, Inc.* ............................................... 930 89,280
------------
1,178,379
------------
26
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
HOME FURNISHINGS (0.12%)
Leggett & Platt, Inc. .......................................................... 2,800 $ 44,275
Newell Rubbermaid, Inc. ........................................................ 7,588 173,101
Springs Industries, Inc. Cl A .................................................. 460 12,966
------------
230,342
------------
HOTELS (0.14%)
Hilton Hotels Corp. ............................................................ 5,520 63,825
Marriott International, Inc. ................................................... 5,853 213,269
------------
277,094
------------
INDUSTRIAL (0.05%)
Rockwell International Corp. ................................................... 3,026 91,536
------------
INSURANCE (3.82%)
Aetna, Inc. .................................................................... 2,574 149,453
AFLAC, Inc. .................................................................... 4,640 297,250
Allstate Corp. ................................................................. 15,176 527,366
American General Corp. ......................................................... 4,487 349,986
American International Group, Inc. ............................................. 37,615 3,599,285
AON Corp. ...................................................................... 4,274 167,754
Chubb Corp. .................................................................... 2,710 214,429
Cigna Corp. .................................................................... 3,008 314,035
Cincinnati Financial Corp. ..................................................... 2,770 98,335
Conseco Co., Inc. .............................................................. 3,316 25,284
Hartford Financial Services Group, Inc. ........................................ 3,598 262,429
Humana, Inc.* .................................................................. 2,525 27,144
Jefferson Pilot Corp. .......................................................... 1,979 134,325
Lincoln National Corp. ......................................................... 3,408 164,010
Marsh & McLennan Co., Inc. ..................................................... 4,593 609,721
MBIA, Inc. ..................................................................... 1,300 92,462
MGIC Investment Corp. .......................................................... 1,460 89,242
Progressive Corp. .............................................................. 900 73,688
Safeco Corp. ................................................................... 1,779 48,478
St. Paul Cos., Inc. ............................................................ 3,490 172,101
Torchmark Corp. ................................................................ 2,020 56,181
Unum Provident Corp. ........................................................... 3,560 97,010
------------
7,569,968
------------
MACHINERY, GENERAL INDUSTRIAL (0.37%)
Black & Decker Corp. ........................................................... 1,341 45,845
Caterpillar, Inc. .............................................................. 6,012 202,905
Deere & Co. .................................................................... 4,008 133,266
Dover Corp. .................................................................... 3,200 150,200
Grainger (W. W.), Inc. ......................................................... 1,660 43,679
Ingersoll-Rand Co. ............................................................. 2,753 93,258
McDermott International, Inc. .................................................. 440 4,840
Thermo Electron Corp.* ......................................................... 2,082 54,132
------------
728,125
------------
27
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
MATERIALS (0.26%)
Alcoa Inc. ..................................................................... 14,758 $ 373,562
Barrick Gold Corp. ............................................................. 5,991 91,363
Homestake Mining Co. ........................................................... 3,400 17,638
Newmont Mining Corp. ........................................................... 2,258 38,386
------------
520,949
------------
MEDICAL PRODUCTS (1.17%)
Baxter International., Inc. .................................................... 5,663 451,978
Becton, Dickinson & Co. ........................................................ 4,460 117,911
Biomet, Inc. ................................................................... 3,255 113,925
Boston Scientific Corp.* ....................................................... 6,822 112,137
Guidant Corp. .................................................................. 5,226 369,413
Medtronic, Inc. ................................................................ 19,642 1,017,701
PerkinElmer, Inc. .............................................................. 660 68,888
St. Jude Medical, Inc.* ........................................................ 1,557 79,407
------------
2,331,360
------------
METALS (0.15%)
Alcan Aluminum Ltd. ............................................................ 3,667 106,114
Freeport-McMoran Copper & Gold, Inc.* .......................................... 1,590 14,012
Inco Ltd. ...................................................................... 3,457 55,744
Phelps Dodge Corp. ............................................................. 1,475 61,581
Placer Dome, Inc. .............................................................. 4,407 41,591
Timken Co. ..................................................................... 670 9,171
------------
288,213
------------
MISCELLANEOUS MANUFACTURING (0.36%)
Millipore Corp. ................................................................ 550 26,641
Minnesota Mining & Manufacturing Co. ........................................... 7,202 656,282
Pall Corp. ..................................................................... 1,589 31,681
------------
714,604
------------
MOTORCYCLE MANUFACTURERS (0.13%)
Harley-Davidson, Inc. .......................................................... 5,590 267,621
------------
OFFICE EQUIPMENT (0.27%)
Avery Dennison Corp. ........................................................... 2,001 92,796
Lexmark International Group, Inc. Cl A ......................................... 1,970 73,875
Office Depot, Inc.* ............................................................ 4,880 38,125
Pitney Bowes, Inc. ............................................................. 4,524 178,415
Xerox Corp. .................................................................... 10,532 158,638
------------
541,849
------------
28
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
OIL & GAS (6.90%)
Amerada Hess Corp. ............................................................. 1,308 $ 87,554
Anadarko Petroleum Corp. ....................................................... 3,153 209,548
Apache Corp. ................................................................... 1,260 74,498
Baker Hughes, Inc. ............................................................. 3,960 147,015
Burlington Resources, Inc. ..................................................... 2,807 103,333
Chevron Oil Corp. .............................................................. 11,767 1,003,137
The Coastal Corp. .............................................................. 3,820 283,158
Columbia Gas System, Inc. ...................................................... 1,748 124,108
Conoco, Inc. Cl B .............................................................. 9,850 265,334
Devon Energy Corp. ............................................................. 1,180 70,977
Eastern Enterprises ............................................................ 870 55,517
El Paso Energy Corp. ........................................................... 4,176 257,346
Enron Corp. .................................................................... 11,682 1,023,635
Exxon Mobil Corp. .............................................................. 56,031 4,993,763
Halliburton Co. ................................................................ 6,068 296,953
Kerr-McGee Corp. ............................................................... 1,250 82,812
NICOR, Inc. .................................................................... 1,490 53,919
Occidental Petroleum Corp. ..................................................... 5,063 110,437
Phillips Petroleum Co. ......................................................... 3,474 217,994
Rowan Cos., Inc. ............................................................... 220 6,380
Royal Dutch Petroleum Co. ...................................................... 34,410 2,062,449
Schlumberger, Ltd. ............................................................. 9,540 785,261
Sempra Energy .................................................................. 3,995 83,146
Sunoco, Inc. ................................................................... 1,790 48,218
Texaco, Inc. ................................................................... 9,532 500,430
Tosco Corp. .................................................................... 1,280 39,920
Transocean Sedco Forex, Inc. ................................................... 2,617 153,422
Unocal Corp. ................................................................... 3,442 121,976
USX Marathon Group, Inc. ....................................................... 4,876 138,356
Williams Cos., Inc. ............................................................ 6,680 282,230
------------
13,682,826
------------
PAINT & RELATED PRODUCTS (0.02%)
Sherwin Williams Co. ........................................................... 2,316 49,504
------------
PHARMACEUTICALS (10.31%)
Abbott Laboratories ............................................................ 25,396 1,207,897
Allergan, Inc. ................................................................. 2,380 200,961
Alza Corp. ..................................................................... 1,830 158,295
American Home Products Corp. ................................................... 21,540 1,218,356
Amgen, Inc. .................................................................... 16,560 1,156,353
Bausch & Lomb, Inc. ............................................................ 1,055 41,079
Biogen, Inc. ................................................................... 2,460 150,060
Bristol-Myers Squibb Co. ....................................................... 32,478 1,855,306
Cardinal Health, Inc. .......................................................... 4,810 424,182
IMS Health, Inc. ............................................................... 4,862 100,886
Johnson & Johnson .............................................................. 23,436 2,201,519
29
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
Lilly, (Eli) & Co. ............................................................. 19,155 $ 1,553,949
Mallinckrodt, Inc. ............................................................. 1,410 64,331
Medimmune, Inc.* ............................................................... 3,250 251,062
Merck & Co. .................................................................... 38,020 2,830,114
Pfizer, Inc. ................................................................... 101,922 4,580,120
Pharmacia Corp. ................................................................ 20,445 1,230,533
Schering-Plough Corp. .......................................................... 24,010 1,116,465
SYNAVANT, Inc. ................................................................. 243 1,625
Watson Pharmaceuticals, Inc.* .................................................. 1,680 108,990
------------
20,452,083
------------
PHOTOGRAPHY EQUIPMENT (0.15%)
Eastman Kodak Co. .............................................................. 7,144 292,011
Polaroid Corp. ................................................................. 840 11,288
------------
303,299
------------
PRINTING (0.05%)
R.R. Donnelley & Sons Co. ...................................................... 3,648 89,604
------------
PUBLISHING (0.69%)
Dow Jones & Co. ................................................................ 2,325 140,662
Gannett, Inc. .................................................................. 6,964 369,092
Knight-Ridder, Inc. ............................................................ 2,209 112,245
McGraw-Hill Cos., Inc. ......................................................... 4,240 269,505
New York Times Co. Cl A ........................................................ 4,274 168,022
Tribune Co. .................................................................... 7,057 307,862
------------
1,367,388
------------
RETAIL STORES (4.94%)
Bed Bath & Beyond, Inc. ........................................................ 4,760 116,099
Best Buy Co.* .................................................................. 3,360 213,780
Circuit City Stores, Inc. ...................................................... 3,410 78,430
Consolidated Stores Corp.* ..................................................... 1,330 17,955
Costco Cos., Inc.* ............................................................. 7,690 268,669
CVS Corp. ...................................................................... 6,624 306,774
Dillard's, Inc. ................................................................ 1,090 11,581
Dollar General Corp. ........................................................... 5,191 86,949
Federated Department Stores, Inc.* ............................................. 3,617 94,494
Gap, Inc. ...................................................................... 13,715 276,014
Harcourt General, Inc. ......................................................... 1,784 105,256
Home Depot, Inc. ............................................................... 36,759 1,950,524
K-Mart Corp.* .................................................................. 6,188 37,128
Kohl's Corp.* .................................................................. 5,530 319,012
Limited (The), Inc. ............................................................ 7,630 168,337
Longs Drug Stores Corp. ........................................................ 690 13,196
Lowe's Cos ..................................................................... 6,338 284,418
May Department Store Co. ....................................................... 6,248 128,084
Nordstrom, Inc. ................................................................ 2,290 35,638
30
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
Penney, (J.C.) Co. ............................................................. 4,497 $ 53,121
Radioshack Corp. ............................................................... 3,250 210,031
Reebok International Ltd.* ..................................................... 690 12,981
Sears, Roebuck & Co. ........................................................... 6,514 211,184
Staples, Inc.* ................................................................. 7,200 102,150
Target Corp. ................................................................... 15,148 388,168
Tiffany & Co. .................................................................. 1,710 65,942
TJX Companies, Inc. ............................................................ 4,910 110,475
Toys `R' Us, Inc.* ............................................................. 3,481 56,566
Wal Mart Stores, Inc. .......................................................... 71,628 3,447,098
Walgreen Co. ................................................................... 16,576 628,852
------------
9,798,906
------------
STEEL (0.06%)
Allegheny Technologies, Inc. ................................................... 1,316 23,852
Bethlehem Steel Corp. .......................................................... 2,390 7,170
Nucor Corp. .................................................................... 1,571 47,326
USX-U.S. Steel Group ........................................................... 1,213 18,422
Worthington Industries, Inc. ................................................... 1,410 13,219
------------
109,989
------------
TECHNOLOGY (1.04%)
Applied Materials, Inc. ........................................................ 12,720 754,455
Broadcom Corp.* ................................................................ 3,520 858,000
Honeywell International, Inc. .................................................. 12,908 459,848
------------
2,072,303
------------
TELECOMMUNICATIONS (12.52%)
ADC Telecommunications, Inc. ................................................... 9,840 264,604
Alltel Corp. ................................................................... 5,368 280,142
Andrew Corp.* .................................................................. 1,062 27,811
AT&T Corp. ..................................................................... 63,532 1,866,252
BellSouth Corp. ................................................................ 30,786 1,239,136
CenturyTel, Inc. ............................................................... 2,080 56,680
Cisco Systems, Inc. ............................................................ 110,608 6,111,092
Global Crossing Ltd. ........................................................... 12,943 401,233
Lucent Technologies, Inc. ...................................................... 50,451 1,541,909
Nextel Communications, Inc. Cl A* .............................................. 11,580 541,365
Nortel Networks Corp. .......................................................... 46,588 2,774,898
QUALCOMM, Inc.* ................................................................ 11,520 820,800
Qwest Communications International, Inc.* ...................................... 25,466 1,223,960
SBC Communications, Inc. ....................................................... 55,565 2,778,250
Scientific Atlanta, Inc. ....................................................... 2,410 153,336
Sprint Corp. ................................................................... 15,842 464,369
Sprint Corp. (PCS Group) ....................................................... 12,570 440,736
Tellabs, Inc.* ................................................................. 6,242 298,056
Verizon Communications ......................................................... 45,591 2,208,314
Worldcom, Inc. ................................................................. 44,669 1,356,821
------------
24,849,764
------------
31
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
TIRE & RUBBER (0.02%)
Cooper Tire & Rubber Co. ....................................................... 330 $ 3,321
Goodyear Tire & Rubber Co. ..................................................... 2,360 42,480
------------
45,801
------------
TOOLS (0.02%)
Snap-On, Inc. .................................................................. 560 13,195
Stanley Works .................................................................. 1,400 32,288
------------
45,483
------------
TRANSPORTATION (0.35%)
Burlington Northern Santa Fe Corp. ............................................. 6,624 142,830
CSX Corp. ...................................................................... 3,215 70,127
FedEx Corp. .................................................................... 4,396 194,919
Norfolk Southern Corp. ......................................................... 5,636 82,426
Union Pacific Corp. ............................................................ 5,273 204,988
------------
695,290
------------
TRAVEL SERVICES (0.04%)
Sabre Group Holdings, Inc. ..................................................... 2,784 80,562
------------
TRUCKING & LEASING (0.01%)
Ryder Systems, Inc. ............................................................ 1,280 23,600
------------
UTILITIES (2.60%)
AES Corp. ...................................................................... 7,140 489,090
Ameren Corp. ................................................................... 2,978 124,704
American Electric Power Co., Inc. .............................................. 6,034 236,080
American Power Conversion Corp.* ............................................... 1,840 35,305
C P & L Energy Co. ............................................................. 3,224 134,400
Cinergy Corp. .................................................................. 2,564 84,772
CMS Energy Corp. ............................................................... 1,860 50,104
Consolidated Edison, Inc. ...................................................... 4,569 155,917
Constellation Energy Group ..................................................... 3,059 152,185
Dominion Resources, Inc. - Va .................................................. 4,494 260,933
DTE Energy Co. ................................................................. 2,749 105,149
Duke Energy Co. ................................................................ 6,523 559,347
Edison International ........................................................... 5,376 103,824
Entergy Corp. .................................................................. 4,265 158,871
Firstenergy Corp. .............................................................. 3,775 101,689
Florida Progress Corp. ......................................................... 2,010 106,404
FPL Group, Inc. ................................................................ 3,599 236,634
GPU, Inc. ...................................................................... 1,905 61,793
Niagara Mohawk Holdings, Inc. .................................................. 3,710 58,432
PECO Energy Co. ................................................................ 3,116 188,713
Peoples Energy Corp. ........................................................... 1,290 43,054
PG&E Corp. ..................................................................... 6,899 166,870
Pinnacle West Capital Corp. .................................................... 1,290 65,629
32
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
PPL Corp. ...................................................................... 1,495 $ 62,416
Public Service Enterprise, Inc. ................................................ 4,457 199,172
Reliant Energy, Inc. ........................................................... 5,360 249,240
Southern Co. ................................................................... 11,830 383,736
TXU Corp. ...................................................................... 4,991 197,768
Unicom Corp. ................................................................... 3,952 222,053
Xcel Energy, Inc. .............................................................. 5,780 158,950
------------
5,153,234
------------
WASTE MANAGEMENT (0.10%)
Allied Waste Industries, Inc. .................................................. 1,870 17,181
Waste Management Services, Inc. ................................................ 10,023 174,776
------------
191,957
------------
WIRELESS EQUIPMENT (0.23%)
Palm Inc. ...................................................................... 8,467 448,222
------------
TOTAL COMMON STOCK (Cost $187,553,417) ......................................... 196,818,472
------------
MISCELLANEOUS ASSETS (0.49%)
S & P 500 Depositary Receipt (Cost $991,562) ................................... 6,800 976,650
------------
PRINCIPAL
---------
REPURCHASE AGREEMENTS (0.27%)
Fifth Third Bank, 5.78%, dated 09/29/00, due 10/02/00, repurchase price $524,827
(collateralized by FNMA Pool #409855, 8.218%, due 03/01/28, market value
$535,065) (Cost $524,574) ...................................................... $524,574 524,574
------------
TOTAL INVESTMENTS (Cost $189,069,553) (99.95%) ........................... 198,319,696
OTHER ASSETS & LIABILITIES, NET (0.05%) .................................. 105,968
------------
NET ASSETS (100%) ........................................................ $198,425,664
============
*Non-income producing investment
Cost for federal income tax at September 30, 2000 was $189,069,553 and net
unrealized appreciation consisted of:
Gross unrealized appreciation ............................................ $ 31,035,725
Gross unrealized depreciation ............................................ (21,785,582)
------------
Net unrealized appreciation .............................................. $ 9,250,143
============
SEE NOTES TO FINANCIAL STATEMENTS
33
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCK (98.23%)
ADVERTISING (1.10%)
Ha-Lo Industries, Inc.* ........................................................ 8,570 $ 34,280
Havas Advertising SA ADR* ...................................................... 22,471 328,634
Penton Media, Inc.* ............................................................ 7,650 210,375
True North Communications, Inc. ................................................ 11,859 423,959
------------
997,248
------------
AEROSPACE (0.55%)
AAR Corp. ...................................................................... 6,022 68,877
Esterline Technologies Corp.* .................................................. 4,390 86,428
Kaman Corp.* ................................................................... 4,593 57,987
Orbital Sciences Corp.* ........................................................ 9,222 77,234
Teledyne Technologies, Inc. .................................................... 7,250 211,156
------------
501,682
------------
AEROSPACE & DEFENSE (0.39%)
Alliant Techsystems, Inc.* ..................................................... 3,093 254,013
BE Aerospace, Inc. ............................................................. 5,910 95,299
------------
349,312
------------
AGRICULTURAL (0.44%)
Agribrands International, Inc.* ................................................ 3,740 163,158
Delta & Pine Land Co. .......................................................... 9,196 236,222
------------
399,380
------------
AIRLINES (0.62%)
Atlantic Coast Airlines Holdings ............................................... 4,830 155,466
Midwest Express Holdings, Inc.* ................................................ 3,380 68,022
Skywest, Inc. .................................................................. 6,630 339,788
------------
563,276
------------
APPAREL (1.37%)
The Dress Barn, Inc. ........................................................... 5,596 117,516
Haggar Corp. ................................................................... 2,730 34,125
K-Swiss, Inc. Cl A ............................................................. 3,120 70,200
Kellywood Co. .................................................................. 6,900 125,925
Nautica Enterprises, Inc. ...................................................... 7,636 98,791
Oshkosh B'Gosh, Inc. Cl A ...................................................... 3,700 56,310
Oxford Industries, Inc. ........................................................ 3,770 67,389
Phillips-Van Heusen Corp. ...................................................... 3,810 39,291
Quiksilver, Inc.* .............................................................. 5,110 98,368
Timberland Co. Cl A ............................................................ 9,796 401,636
Wet Seal (The), Inc.* .......................................................... 3,460 54,279
Wolverine World Wide, Inc. ..................................................... 8,148 75,878
------------
1,239,708
------------
34
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
APPLIANCES (0.14%)
Applica, Inc. .................................................................. 4,930 $ 30,504
Salton, Inc.* .................................................................. 2,940 94,999
------------
125,503
------------
AUTO PARTS & EQUIPMENT (0.49%)
Discount Auto Parts, Inc.* ..................................................... 4,221 32,449
Midas, Inc. .................................................................... 4,590 64,260
O'Reilly Automotive, Inc.* ..................................................... 11,240 164,385
Pep Boys--Manny Moe & Jack ..................................................... 9,730 48,650
Standard Motor Products, Inc. .................................................. 3,956 31,648
Tower Automotive, Inc.* ........................................................ 10,610 99,469
------------
440,861
------------
AUTOS & TRUCKS (0.44%)
Copart, Inc.* .................................................................. 11,880 164,835
Oshkosh Truck Corp. ............................................................ 4,630 179,412
Wabash National Corp. .......................................................... 6,050 55,206
------------
399,453
------------
BANKS (6.96%)
Anchor Bancorp Wisconsin, Inc. ................................................. 4,470 70,123
Centura Banks, Inc. ............................................................ 10,786 413,239
Chittenden Corp. ............................................................... 7,490 192,399
Commerce Bancorp, Inc. ......................................................... 7,989 464,860
Commercial Federal Corp. ....................................................... 13,050 249,581
Community First Bankshares ..................................................... 10,120 177,732
Cullen Frost Bankers, Inc. ..................................................... 12,612 409,890
Downey Financial Corp. ......................................................... 7,416 292,932
First Bancorp .................................................................. 5,800 141,738
First Midwest Bancorp, Inc. .................................................... 9,585 255,201
GBC Bancorp .................................................................... 3,220 109,681
Hudson United Bancorp .......................................................... 12,743 352,025
Imperial Bancorp* .............................................................. 10,190 194,884
Investors Financial Services Corp. Cl A ........................................ 7,150 451,344
MAF Bancorp, Inc. .............................................................. 6,330 157,459
Provident Bankshares Corp. ..................................................... 5,843 97,870
Queens County Bancorp, Inc. .................................................... 6,025 173,972
Riggs National Corp. ........................................................... 5,966 73,084
Silicon Valley Bancshares ...................................................... 10,700 623,108
South Financial Group, Inc. .................................................... 9,350 118,044
Southwest Bancorporation of Texas, Inc.* ....................................... 6,750 220,641
Staten Island Bancorp, Inc. .................................................... 7,990 159,800
Susquehanna Bancshares, Inc. ................................................... 6,055 92,339
Trustco Bank Corp. ............................................................. 8,896 109,532
United Bankshares, Inc. ........................................................ 9,470 185,849
Washington Federal, Inc. ....................................................... 12,100 275,275
Whitney Holdings Corp. ......................................................... 6,918 251,210
------------
6,313,812
------------
35
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
BROADCASTING (0.05%)
4kids Entertainment, Inc.* ..................................................... 2,910 $ 49,106
------------
BUILDING (3.02%)
Champion Enterprises, Inc.* .................................................... 9,615 40,864
D. R. Horton, Inc. ............................................................. 15,279 262,600
Dycom Industries, Inc.* ........................................................ 9,180 382,118
Elcor Corp. .................................................................... 4,970 72,065
Fleetwood Enterprises, Inc. .................................................... 8,010 108,636
Florida Rock Industries, Inc. .................................................. 4,940 194,821
Insituform Technologies, Inc.* ................................................. 6,080 204,440
M. D. C. Holdings, Inc. ........................................................ 5,900 153,400
NVR, Inc.* ..................................................................... 2,840 230,040
Ryland Group, Inc. ............................................................. 4,599 142,569
Simpson Manufacturing Co. ...................................................... 3,740 167,131
Skyline Corp. .................................................................. 4,520 96,332
Standard Pacific Corp. ......................................................... 6,450 116,100
Thor Industries, Inc. .......................................................... 4,150 95,969
Toll Brothers, Inc. ............................................................ 9,045 310,922
Universal Forest Products, Inc. ................................................ 4,770 54,482
Washington Group Intl., Inc.* .................................................. 9,070 103,738
------------
2,736,227
------------
BUILDING PRODUCTS (0.64%)
Butler Manufacturing Co. ....................................................... 3,515 80,625
Hughes Supply, Inc. ............................................................ 6,265 122,919
Lennox International, Inc. ..................................................... 12,530 117,469
Republic Group, Inc. ........................................................... 3,530 64,864
Texas Industries, Inc. ......................................................... 6,150 196,031
------------
581,908
------------
CHEMICALS (1.28%)
Arch Chemicals, Inc. ........................................................... 5,330 97,272
Cambrex Corp. .................................................................. 6,264 231,768
Chemfirst, Inc. ................................................................ 5,217 108,579
MacDermid, Inc. ................................................................ 7,590 159,390
OM Group, Inc. ................................................................. 6,281 274,009
Omnova Solutions, Inc. ......................................................... 4,760 26,478
Penford Corp. .................................................................. 2,660 41,230
Polyone Corp. .................................................................. 16,700 122,119
Quaker Chemical Corp. .......................................................... 3,480 59,160
Tetra Technologies, Inc.* ...................................................... 2,640 40,095
------------
1,160,100
------------
36
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMERCIAL SERVICES (2.44%)
ABM Industries, Inc. ........................................................... 5,720 $ 155,512
Central Parking Corp. .......................................................... 8,735 173,062
CPI Corp. ...................................................................... 3,780 80,325
F.Y.I., Inc.* .................................................................. 3,930 146,884
G & K Services, Inc. ........................................................... 5,547 155,663
Harland, (John H.) Co. ......................................................... 6,830 104,584
Insurance Auto Auctions, Inc.* ................................................. 3,440 55,685
Kroll-O'Gara Co. ............................................................... 4,960 29,760
Member Works, Inc. ............................................................. 3,940 129,528
New England Business Service, Inc. ............................................. 4,370 79,206
Pegasus Solutions, Inc.* ....................................................... 6,020 117,765
Plexus Corp.* .................................................................. 8,560 603,480
Prepaid Legal Services, Inc.* .................................................. 5,410 174,811
StarTek, Inc.* ................................................................. 3,270 94,830
The Profit Recovery Group International, Inc.* ................................. 11,185 110,452
------------
2,211,547
------------
COMPONENTS (2.48%)
C-COR Electronics, Inc.* ....................................................... 7,750 118,672
Checkpoint Systems, Inc.* ...................................................... 5,510 41,669
Coherent, Inc.* ................................................................ 6,240 424,320
Dionex Corp.* .................................................................. 5,668 156,578
Electro Scientific Industries, Inc.* ........................................... 6,290 220,936
Harman International Industries, Inc. .......................................... 9,480 370,668
Silicon Valley Group, Inc.* .................................................... 8,030 211,289
Standard Microsystems Corp.* ................................................... 3,620 78,961
Vicor Corp. .................................................................... 10,019 543,531
Watts Industries, Inc.* ........................................................ 4,950 49,500
X-Rite, Inc. ................................................................... 3,470 30,362
------------
2,246,486
------------
COMPUTER HARDWARE (0.64%)
Hutchinson Technology, Inc.* ................................................... 6,530 137,538
InterVoice, Inc.* .............................................................. 7,440 78,120
Kronos, Inc.* .................................................................. 3,330 99,900
Mercury Computer Systems, Inc.* ................................................ 5,040 140,175
Read-Rite Corp.* ............................................................... 11,290 127,012
------------
582,745
------------
COMPUTER SERVICES & SOFTWARE (9.74%)
American Management Systems, Inc.* ............................................. 9,618 165,309
Analysts International Corp. ................................................... 4,285 30,933
Anixter International, Inc.* ................................................... 8,736 254,436
Aspen Technology, Inc.* ........................................................ 6,150 277,519
Auspex Systems, Inc. ........................................................... 5,410 66,949
Avant Corp.* ................................................................... 8,700 158,775
Avid Technology, Inc.* ......................................................... 5,540 77,560
37
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
AVT Corp.* ..................................................................... 5,400 $ 30,038
BARRA, Inc.* ................................................................... 3,440 213,495
Bisys Group, Inc.* ............................................................. 6,801 525,802
Black Box Corp. ................................................................ 4,740 221,002
Brooktrout Technology, Inc.* ................................................... 3,020 99,471
ChoicePoint, Inc.* ............................................................. 9,496 435,629
Ciber, Inc.* ................................................................... 12,630 104,198
Concord Communications, Inc. ................................................... 3,960 104,940
Dendrite International, Inc.* .................................................. 8,935 239,570
eLoyalty Corp.* ................................................................ 18,015 229,691
ePresence, Inc.* ............................................................... 4,830 32,602
Factset Research Systems, Inc. ................................................. 7,580 285,008
Fair Issac & Co. ............................................................... 3,659 156,194
FileNet Corp.* ................................................................. 7,622 138,625
Great Plains Software, Inc. .................................................... 4,860 136,688
Henry, (Jack) & Associates ..................................................... 9,662 419,089
HNC Software, Inc.* ............................................................ 6,740 551,416
Hyperion Solutions Corp.* ...................................................... 7,646 197,840
Inter Tel, Inc. ................................................................ 5,980 68,022
Micros Systems, Inc.* .......................................................... 4,090 61,606
Midway Games, Inc.* ............................................................ 7,820 54,740
National Computer Systems, Inc. ................................................ 7,566 551,845
National Data Corp. ............................................................ 8,106 265,978
National Instrument Corp.* ..................................................... 11,805 520,896
Phoenix Technologies Ltd.* ..................................................... 5,810 92,597
Pinnacle Systems, Inc. ......................................................... 11,710 131,738
Progress Software Corp.* ....................................................... 7,436 101,316
Project Software & Development, Inc. ........................................... 4,960 77,113
QRS Corp.* ..................................................................... 3,750 56,484
Radisys Corp.* ................................................................. 4,050 204,778
RSA Security, Inc.* ............................................................ 9,280 400,200
S3, Inc.* ..................................................................... 20,310 209,447
SAGA SYSTEMS, Inc.* ............................................................ 6,100 64,050
Systems & Computer Technology Corp.* ........................................... 7,110 124,869
THQ, Inc.* ..................................................................... 4,570 106,252
Verity, Inc.* .................................................................. 7,400 264,088
Visual Networks, Inc. .......................................................... 5,900 38,719
Xircom, Inc.* .................................................................. 7,120 179,780
Zixit Corp. .................................................................... 3,920 119,560
------------
8,846,857
------------
CONGLOMERATES (0.06%)
GenCorp, Inc. .................................................................. 6,920 56,225
------------
CONSULTING SERVICES (0.27%)
MAXIMUS, Inc.* ................................................................. 4,890 108,191
Remedy Corp.* .................................................................. 7,200 135,900
------------
244,091
------------
38
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
CONSUMER PRODUCTS (0.75%)
FOSSIL, Inc.* .................................................................. 7,870 $ 104,769
Meade Instruments Corp.* ....................................................... 3,890 78,529
Russ Berrie and Co. ............................................................ 6,148 121,423
Scotts Co.* .................................................................... 7,399 247,866
Toro Co. ....................................................................... 4,059 127,858
------------
680,445
------------
DISTRIBUTION WHOLESALE (0.95%)
Brightpoint, Inc.* ............................................................. 11,120 55,948
Insight Enterprises, Inc.* ..................................................... 9,585 261,191
Owens & Minor, Inc. Holding Co. ................................................ 7,304 115,038
SCP Pool Corp.* ................................................................ 4,665 138,201
United Stationers, Inc.* ....................................................... 8,230 221,181
Watsco, Inc. ................................................................... 6,695 68,892
------------
860,451
------------
DIVERSIFIED CONGLOMERATES (1.53%)
Chemed Corp. ................................................................... 4,415 140,452
Clarcor, Inc. .................................................................. 5,900 115,050
General Electric Co.* .......................................................... 1,617 93,281
Mascotech, Inc. ................................................................ 11,120 184,175
Myers Industries, Inc. ......................................................... 5,033 63,856
Roper Industries, Inc. ......................................................... 7,526 249,769
SPS Technologies, Inc.* ........................................................ 3,818 185,173
Standex International Corp. .................................................... 4,410 85,168
Tenneco Corp. .................................................................. 6,670 34,601
Tredegar Industries, Inc. ...................................................... 8,844 153,112
Volt Information Sciences, Inc.* ............................................... 4,010 86,215
------------
1,390,852
------------
ELECTRONIC EQUIPMENT (8.44%)
Actel Corp. .................................................................... 5,440 195,500
Aeroflex, Inc.* ................................................................ 6,238 303,298
Alliance Semiconductor Corp.* .................................................. 9,890 196,564
Alpha Industries, Inc.* ........................................................ 10,160 346,075
Analogic Corp. ................................................................. 3,760 144,525
APW Ltd. ....................................................................... 17,994 877,208
Artesyn Technologies, Inc.* .................................................... 8,870 258,339
Audiovox Corp Cl A* ............................................................ 5,300 79,831
Axt, Inc. ...................................................................... 4,480 187,320
Benchmark Electronics, Inc.* ................................................... 4,780 248,560
C & D Technology, Inc. ......................................................... 6,180 350,715
C-Cube Microsystems, Inc.* ..................................................... 10,210 209,305
Cohu, Inc. ..................................................................... 4,810 73,653
CTS Corp. ...................................................................... 6,760 342,225
Dallas Semiconductors Corp. .................................................... 14,088 463,143
Electroglas, Inc.* ............................................................. 5,070 86,507
ESS Technology, Inc. ........................................................... 9,350 133,822
39
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
General Semi-Conductors, Inc.* ................................................. 7,980 $ 97,256
Gentex Corp.* .................................................................. 17,360 434,000
Innovex, Inc. .................................................................. 3,350 45,644
Kemet Corp.* ................................................................... 20,190 557,749
Kent Electronics Corp.* ........................................................ 6,693 159,795
Methode Electronics, Inc.* ..................................................... 8,440 373,998
Network Equipment Technologies, Inc. ........................................... 4,520 48,308
Park Electrochemical Co. ....................................................... 3,083 171,492
Photronics, Inc.* .............................................................. 7,060 153,996
Pioneer Standard Electronics, Inc. ............................................. 6,000 81,375
Robotic Vision Systems, Inc.* .................................................. 6,980 41,662
SLI, Inc.* ..................................................................... 7,580 55,429
Technitrol, Inc. ............................................................... 3,910 394,910
Telcom Semiconductor, Inc. ..................................................... 4,130 61,434
Three-Five Systems, Inc.* ...................................................... 4,970 145,372
Trimble Navigation Ltd.* ....................................................... 5,480 122,615
Ultratech Stepper, Inc.* ....................................................... 5,600 89,950
Valence Technology, Inc.* ...................................................... 7,830 135,068
------------
7,666,643
------------
ELECTRONICS & ELECTRICAL EQUIPMENT (0.17%)
Baldor Electric Co. ............................................................ 7,820 158,844
------------
ENGINEERING (0.40%)
Foster Wheeler Corp. ........................................................... 7,270 52,708
Tetra Tech, Inc.* .............................................................. 9,067 258,976
URS Corp.* ..................................................................... 4,000 53,000
------------
364,684
------------
ENTERTAINMENT & LEISURE (0.20%)
JAKKS Pacific, Inc.* ........................................................... 4,850 45,621
K2, Inc.* ...................................................................... 2,300 20,556
Prime Hospitality Corp.* ....................................................... 11,090 112,286
------------
178,463
------------
FINANCIAL SERVICES (2.92%)
Americredit Corp.* ............................................................. 17,190 495,287
Billing Concepts Corp.* ........................................................ 7,230 23,046
Cash America International, Inc. ............................................... 4,430 32,394
Dain Rauscher Corp. ............................................................ 3,538 329,034
Eaton Vance Corp. .............................................................. 8,466 431,766
Jefferies Group, Inc. .......................................................... 6,210 166,894
Morgan Keegan, Inc. ............................................................ 6,390 111,825
National Discount Brokers Group, Inc.* ......................................... 5,030 155,616
Pioneer Group, Inc.* ........................................................... 6,400 281,400
Raymond James Financial, Inc. .................................................. 10,881 358,393
Southwest Securities Group, Inc. ............................................... 4,070 119,048
Tucker Anthony Sutro Corp. ..................................................... 5,800 147,175
------------
2,651,878
------------
40
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
FOOD & BEVERAGES (2.14%)
American Italian Pasta Co.* .................................................... 4,870 $ 93,443
Chiquita Brands International, Inc. ............................................ 11,380 35,562
Corn Products International, Inc. .............................................. 9,520 216,580
Earthgrains Co. ................................................................ 9,904 182,605
Fleming Co., Inc. .............................................................. 9,210 120,306
Great Atlantic & Pacific Tea Co., Inc. ......................................... 9,840 108,855
Hain Celestial Group, Inc.* .................................................... 7,030 246,929
J&J Snack Foods Corp.* ......................................................... 2,950 38,166
Michael Foods, Inc. ............................................................ 5,550 129,731
Morrison Management Specialists, Inc. .......................................... 4,360 128,838
Performance Food Group Co.* .................................................... 3,960 148,995
Ralcorp Holdings, Inc. ......................................................... 6,280 88,705
United Natural Foods, Inc.* .................................................... 4,270 52,841
Whole Foods Market, Inc.* ...................................................... 6,579 353,210
------------
1,944,766
------------
FOREST & PAPER PRODUCTS (0.41%)
Buckeye Technology, Inc.* ...................................................... 7,870 163,302
Caraustar Industries, Inc.* .................................................... 6,195 68,532
Deltic Timber Corp. ............................................................ 4,010 67,919
Pope & Talbot, Inc. ............................................................ 5,165 73,924
------------
373,677
------------
HEALTH CARE (2.77%)
ADAC Laboratories .............................................................. 4,810 100,108
Advance Paradigm, Inc. ......................................................... 6,090 256,922
Mid Atlantic Medical Services, Inc. ............................................ 10,480 158,510
Orthodontic Centers of America, Inc.* .......................................... 11,530 384,093
Pediatrix Medical Group, Inc.* ................................................. 3,460 44,764
Priority Healthcare Corp.* ..................................................... 5,364 409,005
Regeneron Pharmaceuticals, Inc.* ............................................... 8,180 266,872
Renal Care Group, Inc.* ........................................................ 10,680 198,915
Universal Health Services, Inc.* ............................................... 7,464 639,105
US Oncology, Inc.* ............................................................. 13,120 59,451
------------
2,517,745
------------
HOME FURNISHING (1.27%)
Bassett Furniture Industries, Inc. ............................................. 4,568 64,808
Ethan Allen Interiors, Inc. .................................................... 9,506 269,139
Interface, Inc. Cl A ........................................................... 8,938 71,225
La-Z Boy Chair Co. ............................................................. 12,963 188,774
Libbey, Inc. ................................................................... 4,600 143,175
National Presto Industries, Inc. ............................................... 5,550 166,153
Pier 1 Imports, Inc. ........................................................... 18,434 250,011
------------
1,153,285
------------
41
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
HUMAN RESOURCES (1.07%)
Administaff, Inc.* ............................................................. 3,140 $ 237,698
CDI Corp.* ..................................................................... 5,099 81,584
Edgewater Technology, Inc.* .................................................... 5,120 26,880
Heidrick & Struggles International, Inc.* ...................................... 4,890 251,224
Labor Ready, Inc.* ............................................................. 8,390 35,133
On Assignment, Inc. ............................................................ 5,210 163,464
Spherion Corp.* ................................................................ 14,536 173,524
------------
969,507
------------
INDUSTRIAL (0.60%)
Cognex Corp.* .................................................................. 10,247 404,116
Gerber Scientific, Inc. ........................................................ 4,881 42,099
Milacron, Inc. ................................................................. 7,730 102,906
------------
549,121
------------
INSURANCE (3.71%)
Arthur J. Gallagher & Co.* ..................................................... 8,714 515,215
Coventry Corp.* ................................................................ 13,235 200,179
Delphi Financial Group, Inc.* .................................................. 5,262 213,111
E.W. Blanch Holdings, Inc. ..................................................... 3,620 75,115
Enhance Financial Services Group, Inc. ......................................... 8,028 104,364
Fidelity National Financial, Inc. .............................................. 14,398 356,350
First American Financial Corp. ................................................. 13,198 275,508
Fremont General Corp. .......................................................... 12,552 43,148
Hilb, Rogal and Hamilton Co. ................................................... 3,550 147,991
Hooper Holmes, Inc. ............................................................ 13,390 127,339
Mutual Risk Management, Ltd. ................................................... 9,836 215,777
Radian Group, Inc. ............................................................. 8,917 601,898
RLI Corp. ...................................................................... 3,150 121,472
SCPIE Holdings, Inc. ........................................................... 2,920 58,765
Selective Insurance Group, Inc. ................................................ 6,088 108,823
Trenwick Group, Inc. ........................................................... 4,567 86,773
Zenith National Insurance Corp. ................................................ 5,208 113,925
------------
3,365,753
------------
MACHINERY, GENERAL INDUSTRIAL (2.30%)
Applied Industrial Technologies, Inc.* ......................................... 5,240 90,718
Astec Industries, Inc.* ........................................................ 5,080 55,562
Gardner Denver, Inc.* .......................................................... 4,120 66,950
Graco, Inc. .................................................................... 5,500 177,375
Helix Technologies Corp. ....................................................... 5,540 165,508
IDEX Corp. ..................................................................... 7,590 212,046
JLG Industries, Inc. ........................................................... 9,250 112,734
Kulicke & Soffa Industries, Inc.* .............................................. 13,680 182,115
Lindsay Manufacturing Co. ...................................................... 3,379 62,934
The Manitowac Co., Inc. ........................................................ 6,337 121,987
Regal-Beloit Corp. ............................................................. 4,988 84,596
42
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
Robbins & Myers, Inc. .......................................................... 3,490 $ 82,451
Specialty Equipment Co. ........................................................ 5,290 130,597
SpeedFam-IPEC, Inc.* ........................................................... 6,920 79,148
Thomas Industries, Inc. ........................................................ 4,370 88,492
Zebra Technologies Corp. Cl A* ................................................. 7,716 370,850
------------
2,084,063
------------
MARKETING SERVICES (0.72%)
ADVO, Inc. ..................................................................... 4,915 162,195
Catalina Marketing Corp.* ...................................................... 12,995 488,937
------------
651,132
------------
MEDICAL PRODUCTS (6.14%)
Advanced Tissue Sciences, Inc.* ................................................ 11,830 87,986
Cerner Corp.* .................................................................. 7,930 368,249
CONMED Corp. ................................................................... 4,540 62,141
Cooper (The) Cos., Inc.* ....................................................... 3,710 131,241
Cygnus, Inc.* .................................................................. 6,270 68,970
Datascope Corp.* ............................................................... 4,340 145,390
Diagnostic Products Corp. ...................................................... 4,170 223,616
Enzo Biochem, Inc.* ............................................................ 6,026 292,261
Idexx Labs, Inc.* .............................................................. 8,549 228,686
Immune Response Corp.* ......................................................... 5,620 38,638
Invacare Corp. ................................................................. 7,606 244,343
Mentor Corp.* .................................................................. 5,693 89,665
Organogenesis, Inc.* ........................................................... 8,040 118,188
Osteotech, Inc.* ............................................................... 2,880 27,540
Patterson Dental Co.* .......................................................... 16,194 364,365
PolyMedica Corp. ............................................................... 3,080 132,055
Protein Design Labs, Inc.* ..................................................... 9,110 1,097,755
ResMed, Inc.* .................................................................. 7,240 226,250
Respironics, Inc.* ............................................................. 6,790 113,308
Scott Technologies, Inc.* ...................................................... 4,150 73,533
Spacelabs Medical, Inc.* ....................................................... 3,060 30,218
Syncor International Corp.* .................................................... 5,740 211,304
Techne Corp.* .................................................................. 4,860 544,320
Theragenics Corp.* ............................................................. 5,310 34,515
Varian Medical Systems, Inc. ................................................... 7,660 346,136
Vital Signs, Inc. .............................................................. 3,443 91,240
Wesley Jessen VisionCare, Inc.* ................................................ 4,780 183,731
------------
5,575,644
------------
METALS (1.74%)
Amcast Industrial Corp. ........................................................ 3,730 35,202
Brush Engineered Materials, Inc. ............................................... 4,780 103,368
Castle, (A. M.) & Co. .......................................................... 3,507 33,755
Commercial Metals Co. .......................................................... 4,965 126,608
Commonwealth Industries, Inc. .................................................. 4,320 24,030
43
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
Intermet Corp. ................................................................. 5,394 $ 39,106
Material Sciences Co.* ......................................................... 2,930 33,329
Mueller Industries, Inc.* ...................................................... 8,642 193,905
Quanex Corp. ................................................................... 4,558 86,887
Reliance Steel & Aluminum Co. .................................................. 6,555 138,065
RTI International, Inc.* ....................................................... 4,530 65,402
Shaw Group, Inc.* .............................................................. 4,350 306,675
Steel Dynamics, Inc.* .......................................................... 9,310 85,536
Stillwater Mining Co.* ......................................................... 9,347 253,023
Wolverine Corp.* ............................................................... 3,825 56,897
------------
1,581,788
------------
MISCELLANEOUS MANUFACTURING (1.15%)
AptarGroup, Inc. ............................................................... 8,778 210,123
Barnes Group, Inc. ............................................................. 4,850 89,119
Brady Corp. Cl A ............................................................... 6,050 183,012
Cuno Inc.* ..................................................................... 4,250 94,562
Huffy Corp. .................................................................... 2,090 21,945
Intermagnetics General Corp. ................................................... 3,244 86,372
Lawson Products, Inc. .......................................................... 4,270 103,281
Paxar Corp.* ................................................................... 7,719 68,989
Smith, (A. O.) Corp. ........................................................... 6,212 78,038
Valmont Industries, Inc. ....................................................... 5,540 110,108
------------
1,045,549
------------
OIL & GAS (6.12%)
Atwood Oceanics, Inc.* ......................................................... 3,800 158,412
Barrett Resource Corp.* ........................................................ 8,039 303,975
Cabot Oil & Gas Corp. .......................................................... 7,091 144,479
Cal Dive International, Inc. ................................................... 4,030 230,466
Cascade Natural Gas Corp. ...................................................... 3,040 53,200
Cross Timbers Oil Co. .......................................................... 16,345 313,620
Dril-Quip, Inc.* ............................................................... 4,320 172,260
Eagle Hardware & Garden, Inc.* ................................................. 315 2
Energen Corp. .................................................................. 7,070 210,332
Friede Goldman International, Inc.* ............................................ 8,740 61,726
HS Resources, Inc.* ............................................................ 4,740 159,382
Input/Output, Inc.* ............................................................ 9,974 96,000
Laclede Gas Co. ................................................................ 4,830 104,449
Louis Dreyfus Natural Gas Corp. ................................................ 9,830 389,514
New Jersey Resources Corp. ..................................................... 5,076 206,212
Newfield Exploration Co.* ...................................................... 10,102 471,637
Northwest Natural Gas Co. ...................................................... 5,182 117,890
Nuevo Energy Co. ............................................................... 4,400 80,850
Oceaneering International, Inc.* ............................................... 5,206 86,550
Patina Oil & Gas Corp. ......................................................... 3,880 77,600
Piedmont Natural Gas, Inc. ..................................................... 7,249 222,001
Plains Resources, Inc.* ........................................................ 4,910 92,676
44
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
Pogo Producing Co. ............................................................. 9,496 $ 240,961
Pride International, Inc.* ..................................................... 14,155 375,108
Seacor Smit, Inc. .............................................................. 4,620 215,408
Seitel, Inc.* .................................................................. 4,570 65,694
St. Mary Land & Exploration Co. ................................................ 6,500 149,906
Stone Energy Corp.* ............................................................ 4,710 259,050
Veritas DGC, Inc. .............................................................. 6,050 175,072
Vintage Petroleum, Inc. ........................................................ 14,116 321,139
------------
5,555,571
------------
PAINT & RELATED PRODUCTS (0.30%)
Lilly Industries, Inc. ......................................................... 5,619 165,760
WD-40 Co. ...................................................................... 4,910 104,338
------------
270,098
------------
PHARMACEUTICALS (5.75%)
Alliance Pharmaceutical Corp. .................................................. 10,680 162,870
Alpharma, Inc. ................................................................. 9,698 592,790
Barr Laboratories, Inc.* ....................................................... 8,270 548,404
Bindley Western Industries, Inc. ............................................... 8,336 266,752
Bio-Technology General Corp.* .................................................. 11,830 135,306
Biomatrix, Inc.* ............................................................... 5,490 96,075
Cephalon, Inc.* ................................................................ 8,020 388,970
Cor Therapeutics, Inc.* ........................................................ 12,300 766,444
Dura Pharmaceuticals, Inc.* .................................................... 10,490 371,084
Elan Corporation Plc Contingent Value Rights* .................................. 7,790 7,547
Medicis Pharmaceutical Corp. ................................................... 6,900 424,350
Noven Pharmaceuticals, Inc. .................................................... 5,190 221,872
Parexel International Corp.* ................................................... 5,380 45,730
Pharmaceutical Product Development, Inc. ....................................... 5,920 157,250
Vertex Pharmaceuticals, Inc.* .................................................. 12,274 1,037,153
------------
5,222,597
------------
PRINTING (0.13%)
Bowne & Co., Inc. .............................................................. 7,404 72,189
Consolidated Graphic, Inc.* .................................................... 3,930 46,178
------------
118,367
------------
RECREATION VEHICLE MANUFACTURING (0.54%)
Arctic Cat, Inc. ............................................................... 3,900 49,238
Coachmen Industries, Inc. ...................................................... 3,930 41,019
Monaco Coach Corp.* ............................................................ 4,850 80,025
Polaris Industries, Inc. ....................................................... 7,330 258,382
Winnebago Industries, Inc. ..................................................... 5,090 63,625
------------
492,289
------------
RENTAL EQUIPMENT (0.06%)
Aaron Rents, Inc. Cl B* ........................................................ 4,420 56,908
------------
45
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
RESTAURANT - RETAIL (1.22%)
CEC Entertainment, Inc.* ....................................................... 7,392 $ 236,544
Cheesecake Factory, Inc.* ...................................................... 8,128 351,514
IHOP Corp.* .................................................................... 6,670 127,564
Landry's Restaurants, Inc.* .................................................... 7,000 47,688
Luby's Cafeterias, Inc. ........................................................ 6,810 36,178
Panera Bread Co. Cl A* ......................................................... 3,900 81,412
Ruby Tuesday, Inc. ............................................................. 20,500 230,625
------------
1,111,525
------------
RETAIL STORES (3.74%)
99 Cents Only Stores* .......................................................... 8,110 407,021
Ames Department Stores, Inc.* .................................................. 6,590 38,099
Ann Taylor Stores Corp.* ....................................................... 7,690 295,584
Brown Group, Inc. .............................................................. 4,799 44,091
Casey's General Stores, Inc. ................................................... 10,762 139,906
Cato Corp. Cl A ................................................................ 5,660 70,750
Chico's FAS, Inc.* ............................................................. 4,280 145,520
Cost Plus, Inc.* ............................................................... 5,090 153,336
Damark International, Inc. Cl A* ............................................... 1,550 18,988
Department 56, Inc.* ........................................................... 4,000 52,750
Factory 2-U Stores, Inc.* ...................................................... 3,080 94,132
Footstar, Inc.* ................................................................ 5,240 169,318
Goody's Family Clothing, Inc.* ................................................. 4,950 19,491
Jo-Ann Stores, Inc.* ........................................................... 4,745 34,401
Linens 'N Things, Inc.* ........................................................ 9,500 242,250
Men's Wearhouse, Inc.* ......................................................... 10,305 291,760
Michaels Stores, Inc.* ......................................................... 8,100 324,000
Pacific Sunwear of California, Inc.* ........................................... 7,345 137,719
Regis Corp. .................................................................... 8,765 131,475
School Specialty, Inc.* ........................................................ 4,230 90,152
Shopko Stores, Inc.* ........................................................... 7,414 76,920
Stein Mart, Inc.* .............................................................. 8,760 94,718
Stride Rite Corp. .............................................................. 7,880 39,892
Zale Corp.* .................................................................... 8,740 283,504
------------
3,395,777
------------
TELECOMMUNICATIONS (1.49%)
Adaptive Broadband Corp.* ...................................................... 8,830 172,185
Aspect Communication Corp.* .................................................... 11,924 245,932
Aware, Inc.* ................................................................... 5,320 204,820
Davox Corp.* ................................................................... 3,090 31,093
Plantronics, Inc.* ............................................................. 11,450 435,100
SymmetriCom, Inc.* ............................................................. 5,415 84,609
TALK.com, Inc.* ................................................................ 15,280 67,328
Viasat, Inc.* .................................................................. 5,120 114,560
------------
1,355,627
------------
46
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
TRANSPORTATION (2.57%)
American Freightways Corp.* .................................................... 7,070 $ 112,236
Arkansas Best Corp.* ........................................................... 3,980 61,192
Circle International Group, Inc. ............................................... 4,400 133,100
EGL, Inc.* ..................................................................... 6,730 203,582
Expeditors International, Inc. ................................................. 11,992 540,390
Forward Air Corp.* ............................................................. 4,760 167,492
Fritz Co., Inc.* ............................................................... 7,293 87,516
Group 1 Automotive, Inc.* ...................................................... 5,200 56,550
Heartland Express, Inc.* ....................................................... 6,270 108,941
Kirby Corp.* ................................................................... 5,797 113,766
Landstar Systems, Inc.* ........................................................ 2,495 111,339
MS Carriers, Inc.* ............................................................. 3,610 56,406
Offshore Logistics, Inc.* ...................................................... 5,150 92,055
Roadway Express, Inc. .......................................................... 4,670 83,767
Rollins Truck Leasing Corp. .................................................... 8,589 54,218
USFreightways Corp. ............................................................ 6,722 152,504
Werner Enterprises, Inc. ....................................................... 9,148 107,488
Yellow Corp.* .................................................................. 5,916 89,480
------------
2,332,022
------------
UTILITIES (2.28%)
American States Water Co. ...................................................... 3,160 95,590
Atmos Energy Corp. ............................................................. 6,656 137,280
Avista Corp. ................................................................... 9,780 220,050
Bangor Hydro-Electric Co. ...................................................... 2,380 57,566
CH Energy Group, Inc. .......................................................... 5,530 220,509
General Communication, Inc. Cl A ............................................... 7,450 53,314
Northwestern Corp. ............................................................. 6,380 124,410
NUI Corp. ...................................................................... 4,130 124,674
Philadelphia Suburban Corp. .................................................... 8,652 200,618
Southern Union ................................................................. 9,680 191,785
Southwest Gas Corp. ............................................................ 7,049 147,588
UGI Corp. ...................................................................... 5,850 141,862
Uil Holdings Corp. ............................................................. 4,991 256,725
UniSource Energy Corp. ......................................................... 6,100 99,888
------------
2,071,859
------------
VITAMINS & NUTRITION PRODUCTS (0.10%)
NBTY, Inc.* .................................................................... 13,993 91,392
------------
WATER TREATMENT (0.11%)
Ionics, Inc.* .................................................................. 4,655 99,210
------------
WIRE & CABLE PRODUCTS (0.43%)
Belden, Inc. ................................................................... 6,220 146,948
Cable Design Technologies Corp.* ............................................... 10,080 245,070
------------
392,018
------------
47
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
WIRELESS EQUIPMENT (0.89%)
Allen Telecom, Inc.* ........................................................... 6,840 $ 109,755
DMC Stratex Networks, Inc.* .................................................... 16,190 260,052
P-Com, Inc.* ................................................................... 14,520 96,195
Proxim, Inc.* .................................................................. 6,000 267,000
Telxon Corp.* .................................................................. 4,100 71,750
------------
804,752
------------
TOTAL COMMON STOCK (Cost $77,567,479) .......................................... 89,179,829
------------
MISCELLANEOUS INVESTMENTS (1.05%)
S & P Mid-Cap 400 Depository Receipts (Cost $961,629) .......................... 9,700 953,025
------------
PRINCIPAL
---------
REPURCHASE AGREEMENTS (0.86%)
Fifth Third Bank, 5.78%, dated 09/29/00, due 10/02/00, repurchase price $785,313
(collateralized by FNMA Pool #505080, 7.177%, due 12/01/33, market value
$800,634) (Cost $784,935) ...................................................... $784,935 784,935
------------
TOTAL INVESTMENTS (Cost $79,314,043) (100.14%) ................................. 90,917,789
OTHER ASSETS & LIABILITIES, NET (-0.14%) ....................................... (128,659)
------------
NET ASSETS (100%) .............................................................. $ 90,789,130
============
*Non-income producing investment ...............................................
ADR -- American Depository Receipt
Cost for federal income tax at September 30, 2000 was $79,314,043 and net
unrealized appreciation consisted of:
Gross unrealized appreciation ............................................ $ 22,890,430
Gross unrealized depreciation (11,286,684)
------------
Net unrealized appreciation .............................................. $ 11,603,746
============
SEE NOTES TO FINANCIAL STATEMENTS.
48
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCK (34.41%)
AUSTRALIA (2.42%)
World Equity Benchmark Securities - Australia Series ........................... 187,763 $ 1,783,748
-----------
AUSTRIA (0.22%)
World Equity Benchmark Securities - Austria Series ............................. 21,135 162,475
-----------
BELGIUM (0.84%)
Electrabel SA* ................................................................. 580 121,763
Fortis (B) ..................................................................... 8,570 263,559
KBC Bancassurance Holding NV* .................................................. 2,690 112,756
Solvay SA ...................................................................... 700 41,542
UCB SA ......................................................................... 1,340 46,578
World Equity Benchmark Securities - Belgium Series ............................. 2,820 36,308
-----------
622,506
-----------
FRANCE (1.21%)
World Equity Benchmark Securities - France Series .............................. 36,220 896,445
-----------
GERMANY (0.62%)
World Equity Benchmark Securities - Germany Series ............................. 23,674 457,204
-----------
HONG KONG (2.24%)
World Equity Benchmark Securities - Hong Kong Series ........................... 136,525 1,655,366
-----------
ITALY (1.48%)
World Equity Benchmark Securities - Italy Series ............................... 51,536 1,095,140
-----------
JAPAN (9.41%)
World Equity Benchmark Securities - Japan Series ............................... 524,760 6,953,070
-----------
NETHERLANDS (5.60%)
ABN AMRO Holdings NV Sponsored ADR ............................................. 12,811 296,254
Akzo Nobel NV Sponsored ADR .................................................... 3,852 162,266
Elsevier NV Sponsored ADR ...................................................... 4,184 94,924
ING Groep NV Sponsored ADR ..................................................... 4,614 303,947
KLM Royal Dutch Air Lines NV ADR ............................................... 3,539 66,135
Koninklijke Ahold NV Sponsored ADR ............................................. 10,443 294,362
Koninklijke Philips Electronics ADR ............................................ 15,683 666,528
Oce NV Sponsored ADR ........................................................... 8,325 132,159
Royal Dutch Petroleum Co. ADR .................................................. 24,778 1,485,131
Royal PTT Nederland NV ADR ..................................................... 9,042 195,534
Unilever NV ADR ................................................................ 6,385 308,076
Wolters Kluwer NV Sponsored ADR ................................................ 4,740 96,202
World Equity Benchmark Securities - Netherlands Series ......................... 1,590 35,775
-----------
4,137,293
-----------
49
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
SHARES VALUE
------ -----
SINGAPORE (1.03%)
World Equity Benchmark Securities - Singapore Series ........................... 110,632 $ 760,595
-----------
SPAIN (0.75%)
World Equity Benchmark Securities - Spain Series ............................... 22,749 554,507
-----------
SWEDEN (0.37%)
World Equity Benchmark Securities - Sweden Series .............................. 12,440 272,125
-----------
SWITZERLAND (6.10%)
Adecco SA Sponsored ADR ........................................................ 2,486 204,101
Credit Suisse Group Sponsored ADR .............................................. 7,895 368,842
Nestle SA Sponsored ADR ........................................................ 7,927 825,519
Novartis AG ADR ................................................................ 42,362 1,638,880
Roche Holdings Ltd. Sponsored ADR .............................................. 10,098 888,024
UBS AG Sponsored ADR ........................................................... 4,290 581,038
-----------
4,506,404
-----------
UNITED KINGDOM (2.12%)
World Equity Benchmark Securities - United Kingdom Series ...................... 87,460 1,563,348
-----------
TOTAL COMMON STOCK (Cost $25,150,687) .......................................... 25,420,226
-----------
PRINCIPAL
---------
SHORT-TERM INVESTMENTS (51.23%)
FEDERAL NATIONAL MORTGAGE ASSOCIATION (20.17%)..................................
due 11/09/00 ................................................................... $15,000,000 14,896,488
-----------
FEDERAL HOME LOAN MORTGAGE CORP. (31.06%)
due 11/07/00 ................................................................... 3,000,000 2,980,359
due 10/10/00 ................................................................... 20,000,000 19,969,135
-----------
22,949,494
-----------
TOTAL SHORT-TERM INVESTMENTS (Cost $37,845,982) ................................ 37,845,982
-----------
REPURCHASE AGREEMENT (2.75%)
Fifth Third Bank, 5.78%, dated 09/29/00, due 10/02/00, repurchase price
$2,030,869 (collateralized by FNMA Pool #505087, 6.50%, due 03/01/29, market
value $2,070,489) (Cost $2,029,891) ............................................ 2,029,891 2,029,891
-----------
TOTAL INVESTMENTS (Cost $65,026,560) (88.39%) .................................. 65,296,099
OTHER ASSETS & LIABILITIES, NET (11.61%) ....................................... 8,574,371
-----------
NET ASSETS (100%) .............................................................. $73,870,470
===========
50
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------
VALUE
-----
*Non-income producing investment
ADR - American Depository Receipt
Cost for federal income tax at September 30, 2000 was $65,026,560 and net
unrealized appreciation consisted of:
Gross unrealized appreciation ............................................ $ 1,231,277
Gross unrealized depreciation ............................................ (961,738)
-----------
Net unrealized appreciation .............................................. $ 269,539
===========
FUTURES CONTRACTS OUTSTANDING - SEPTEMBER 30, 2000
- ----------------------------------------------------------------------------------------------------------------
Unrealized
Total Value Appreciation
Number of Contracts (U.S. Dollars) (Depreciation)
- -------------------- -------------- --------------
117 CAC 40, delivery date 10/31/00 ............................................. $ 6,496,845 $ (457,220)
34 DAX, delivery date 12/15/00 ................................................. 5,156,107 (267,582)
139 FTSE 100, delivery date 12/15/00 ........................................... 13,063,616 (571,693)
15 IBEX, delivery date 10/20/00 ................................................ 1,447,317 (56,680)
9 MIB 30, delivery date 12/15/00 ............................................... 1,814,375 (121,706)
182 NIKKEI 225, delivery date 12/7/00 .......................................... 13,284,518 (906,983)
137 OMX, delivery date 10/27/00 ................................................ 1,742,899 (132,340)
136 Currency futures expire 12/18/00-Euro ...................................... 15,051,800 249,900
111 Currency futures expire 12/18/00-Japanese Yen .............................. 13,005,038 (160,950)
140 Currency futures expire 12/18/00-British Pound ............................. 12,923,750 565,750
----------- -----------
$83,986,265 $(1,859,504)
=========== ===========
SEE NOTES TO FINANCIAL STATEMENTS.
51
THE CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 2000
- ------------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET SHORT-TERM BOND LARGE CAP SMALL CAP INTERNATIONAL
FUND BOND FUND FUND EQUITY FUND EQUITY FUND FUND
-------------------------------------------------------------------------------
ASSETS:
Investments, at value (identified cost
$19,211,879, $28,534,484, $79,582,443,
$189,069,553, $79,314,043 and $65,026,560
respectively) (Note 2) $19,211,879 $28,493,185 $77,382,921 $198,319,696 $90,917,789 $65,296,099
Deposits with brokers -- -- -- -- -- 3,328,059
Receivables:
Investments sold -- -- -- -- 196,422 --
Funds shares sold 527,301 -- 131 9,574 162,873 12,000,515
Dividends and interest 102,132 447,127 1,207,792 149,438 44,745 14,356
Variation margin receivable -- -- -- -- -- 75,875
Prepaid expenses 15,387 14,581 23,468 28,607 21,698 17,259
----------- ----------- ----------- ------------ ----------- -----------
Total assets 19,856,699 28,954,893 78,614,312 198,507,315 91,343,527 80,732,163
----------- ----------- ----------- ------------ ----------- -----------
LIABILITIES:
Payables:
Investments purchased $ -- $ -- $ -- $ -- $ -- $ 6,836,589
Distributions payable 3,232 -- -- -- -- --
12b-1 fees 2 4 1,163 1,960 444 326
Fund shares redeemed -- -- 3,831 6,529 525,530 988
Due to Advisor 1,117 3,817 2,862 14,054 9,114 5,511
Accrued expenses 12,877 11,281 29,961 59,108 19,309 18,279
----------- ----------- ----------- ------------ ----------- -----------
Total liabilities 17,228 15,102 37,817 81,651 554,397 6,861,693
----------- ----------- ----------- ------------ ----------- -----------
NET ASSETS $19,839,471 $28,939,791 $78,576,495 $198,425,664 $90,789,130 $73,870,470
=========== =========== =========== ============ =========== ===========
NET ASSETS CONSIST OF:
Paid-in capital $19,839,471 $29,170,170 $81,344,775 $182,482,467 $69,303,234 $74,719,394
Undistributed net investment income -- 41,772 97,249 9,636 -- 47,303
Undistributed realized gain (loss) on
investments -- (230,852) (666,007) 6,683,418 9,882,150 696,925
Net unrealized appreciation (depreciation) on:
Investments -- (41,299) (2,199,522) 9,250,143 11,603,746 (1,589,965)
Translation of assets and liabilities in
foreign currencies -- -- -- -- -- (3,187)
----------- ----------- ----------- ------------ ----------- -----------
Net Assets $19,839,471 $28,939,791 $78,576,495 $198,425,664 $90,789,130 $73,870,470
=========== =========== =========== ============ =========== ===========
CLASS A SHAARES (NOTE 1)
Net assets for 34,379, 1,076, 277,431, 307,924,
70,354 and 67,191 shares outstanding,
respectively $ 34,379 $ 26,583 $ 6,521,024 $ 10,619,367 $ 2,428,801 $ 1,748,773
Net asset value, offering and redemption price
per Class A Share $ 1.00 $ 24.70 $ 23.51 $ 34.49 $ 34.52 $ 26.03
CLASS C SHARES (NOTE 1):
Net assets for 19,805,092, 1,168,750, 3,057,231,
5,433,299, 2,554,399, and 2,767,454 shares
outstanding, respectively $19,805,092 $28,913,208 $72,055,471 $187,806,297 $88,360,329 $72,121,697
Net asset value, offering and redemption
price per Class C share $ 1.00 $ 24.74 $ 23.57 $ 34.57 $ 34.59 $ 26.06
SEE NOTES TO FINANCIAL STATEMENTS.
52
THE CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 2000
- ------------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET SHORT-TERM BOND LARGE CAP SMALL CAP INTERNATIONAL
FUND BOND FUND FUND EQUITY FUND EQUITY FUND FUND
-------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 1,221,493 $ 1,605,694 $ 4,331,525 $ 38,343 $ 22,020 $ 1,680,902
Dividends (net of foreign taxes withheld
of $2,806 for the International Fund) -- -- -- 1,913,418 566,612 665,033
Other income -- -- 1,000 -- -- --
----------- ----------- ----------- ------------ ----------- -----------
Total Investment Income 1,221,493 1,605,694 4,332,525 1,951,761 588,632 2,345,935
----------- ----------- ----------- ------------ ----------- -----------
EXPENSES:
Investment advisory fees (Note 4) 20,470 40,290 108,940 248,902 116,748 68,290
Administration fee (Note 4) 10,235 13,430 36,313 82,968 38,916 22,763
Accounting fee (Note 4) 25,500 25,290 25,290 25,500 25,500 25,500
Custodian fees 2,347 3,018 8,763 35,463 30,829 8,953
Transfer agency fees 11,607 6,810 12,154 18,952 11,763 6,621
Distribution fees - Class A (Note 4) 21 29 5,532 9,798 2,075 1,613
Trustee expense (Note 4) 3,049 1,216 6,507 18,105 4,513 7,621
Audit fees 754 1,011 11,686 29,241 13,977 4,213
Legal fees 4,513 4,513 6,582 13,245 7,115 4,513
Consulting fees 5,547 5,628 16,297 35,528 17,474 14,106
Pricing fees -- 2,979 13,317 17,464 8,907 8,544
Registration fees 16,149 17,499 34,504 57,638 27,946 21,094
Reports to shareholders 1,412 501 3,403 11,202 3,628 1,751
Other 6,211 4,828 11,529 37,673 13,779 15,944
----------- ----------- ----------- ------------ ----------- -----------
Total expenses before waivers 107,815 127,042 300,817 641,679 323,170 211,526
Fees waived (Note 4) (7,813) -- -- -- -- --
----------- ----------- ----------- ------------ ----------- -----------
Total expenses, net 100,002 127,042 300,817 641,679 323,170 211,526
----------- ----------- ----------- ------------ ----------- -----------
Net investment income 1,121,491 1,478,652 4,031,708 1,310,082 265,462 2,134,409
----------- ----------- ----------- ------------ ----------- -----------
REALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments -- (192,748) (531,539) 6,749,842 10,836,022 70,225
Foreign currency transactions -- -- -- -- -- (39,062)
Net unrealized appreciation (depreciation)
during the period on:
Investments -- 211,860 1,626,881 9,497,975 5,625,757 (3,516,520)
Translation of assets and liabilities in
foreign currencies -- -- -- -- -- (13,237)
----------- ----------- ----------- ------------ ----------- -----------
Net gain (loss) on investments and currency -- 19,112 1,095,342 16,247,817 16,461,779 (3,498,594)
----------- ----------- ----------- ------------ ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $ 1,121,491 $ 1,497,764 $ 5,127,050 $ 17,557,899 $16,727,241 $(1,364,185)
=========== =========== =========== ============ =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS.
53
THE CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET SHORT-TERM BOND LARGE CAP SMALL CAP INTERNATIONAL
FUND BOND FUND FUND EQUITY FUND EQUITY FUND FUND
-------------------------------------------------------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 2000
INCREASE IN NET ASSETS
Operations:
Net investment income $ 1,121,491 $ 1,478,652 $ 4,031,708 $ 1,310,082 $ 265,462 $ 2,134,409
Net realized gain (loss) on:
Investments -- (192,748) (531,539) 6,749,842 10,836,022 70,225
Foreign currency transactions -- -- -- -- -- (39,062)
Net unrealized appreciation (depreciation)
during the period on:
Investments -- 211,860 1,626,881 9,497,975 5,625,757 (3,516,520)
Translation of assets and liabilities in
foreign currencies -- -- -- -- -- (13,237)
----------- ----------- ----------- ------------ ----------- -----------
Net increase (decrease) in net assets resulting
from operations 1,121,491 1,497,764 5,127,050 17,557,899 16,727,241 (1,364,185)
----------- ----------- ----------- ------------ ----------- -----------
Distributions to shareholders from:
Net investment income
Class A (1,165) (774) (162,134) (27,913) (1,305) (38,459)
Class C (1,120,326) (1,460,726) (3,835,110) (1,298,174) (266,279) (2,069,701)
Net realized gain
Class A -- -- -- (6,284) (1,392) (2,594)
Class C -- -- (249) (3,639,024) (3,485,889) (4,700,568)
----------- ----------- ----------- ------------ ----------- -----------
Total Distributions (1,121,491) (1,461,500) (3,997,493) (4,971,395) (3,754,865) (6,811,322)
----------- ----------- ----------- ------------ ----------- -----------
Increase (decrease) in net assets from
Fund share transactions (Note 5) (3,344,992) 2,975,691 17,103,245 53,357,287 10,244,483 40,197,759
----------- ----------- ----------- ------------ ----------- -----------
Increase (decrease) in net assets (3,344,992) 3,011,955 18,232,802 65,943,791 23,216,859 32,022,252
NET ASSETS:
Beginning of period 23,184,463 25,927,836 60,343,693 132,481,873 67,572,271 41,848,218
----------- ----------- ----------- ------------ ----------- -----------
End of period $19,839,471 $28,939,791 $78,576,495 $198,425,664 $90,789,130 $73,870,470
=========== =========== =========== ============ =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS.
54
THE CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET SHORT-TERM BOND LARGE CAP SMALL CAP INTERNATIONAL
FUND BOND FUND FUND EQUITY FUND EQUITY FUND FUND
-------------------------------------------------------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 1999
INCREASE IN NET ASSETS
Operations:
Net investment income $ 1,102,144 $ 765,470 $ 2,889,613 $ 649,519 $ 347,618 $ 1,341,924
Net realized gain (loss) on:
Investments -- (38,104) (134,219) 3,578,884 2,533,409 929,505
Foreign currency transactions -- -- -- -- -- 6,307,728
Net unrealized appreciation (depreciation)
during the period on:
Investments -- (253,159) (3,826,403) (247,832) 5,977,989 1,926,555
Translation of assets and liabilities in
foreign currencies -- -- -- -- -- 10,050
----------- ----------- ----------- ------------ ----------- -----------
Net increase (decrease) in net assets resulting
from operations 1,102,144 474,207 (1,071,009) 3,980,571 8,859,016 10,515,762
----------- ----------- ----------- ------------ ----------- -----------
Distributions to shareholders from:
Net investment income
Class A (92) (9) (106) (367) (16) (120)
Class C (1,102,052) (740,841) (2,826,722) (623,511) (345,480) (1,320,750)
Net realized gain
Class A -- -- -- -- -- (1)
Class C -- -- -- -- -- (1,868,308)
----------- ----------- ----------- ------------ ----------- -----------
Total Distributions (1,102,144) (740,850) (2,826,828) (623,878) (345,496) (3,189,179)
----------- ----------- ----------- ------------ ----------- -----------
Increase in net assets from Fund share
transaction (Note 5) 23,184,463 26,194,479 64,241,530 129,125,180 59,058,751 34,521,635
----------- ----------- ----------- ------------ ----------- -----------
Increase in net assets 23,184,463 25,927,836 60,343,693 132,481,873 67,572,271 41,848,218
NET ASSETS:
Beginning of period -- -- -- -- -- --
----------- ----------- ----------- ------------ ----------- -----------
End of period $23,184,463 $25,927,836 $60,343,693 $132,481,873 $67,572,271 $41,848,218
=========== =========== =========== ============ =========== ===========
SEE NOTES TO FINANCIAL STATEMENTS.
55
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------------
The following tables include selected data for a share outstanding throughout each fiscal year or period and other
performance information derived from financial statements. They should be read in conjunction with the financial
statements and notes thereto.
MONEY MARKET FUND
-------------------------------------------------------------------
CLASS A CLASS C
--------- ---------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
NET ASSET VALUE -- BEGINNING OF PERIOD ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income ............................ 0.05 0.05 0.06 0.05
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions ......................... -- -- -- --
------ ------ ------ ------
Total from investment operations ............... 0.05 0.05 0.06 0.05
------ ------ ------ ------
Distributions:
From net investment income ....................... (0.05) (0.05) (0.06) (0.05)
From net realized capital gain ................... -- -- -- --
------ ------ ------ ------
Total distributions ............................ (0.05) (0.05) (0.06) (0.05)
------ ------ ------ ------
NET ASSET VALUE -- END OF PERIOD ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ======
TOTAL RETURN ....................................... 5.52% 4.80% 5.64% 4.90%
Ratios of expenses to average net assets:
before fee waivers ............................... 0.63% 0.52% 0.53% 0.42%
after fee waivers ................................ 0.59% 0.36% 0.49% 0.26%
Ratios of net investment income to average net
assets:
before fee waivers ............................... 5.35% 4.50% 5.45% 4.60%
after fee waivers ................................ 5.39% 4.66% 5.49% 4.76%
Portfolio turnover rate ............................ N/A N/A N/A N/A
Net assets, end of period .......................... $34,379 $14,356 $19,805,092 $23,170,107
SHORT-TERM BOND FUND
-------------------------------------------------------------------
CLASS A CLASS C
--------- ---------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
NET ASSET VALUE -- BEGINNING OF PERIOD ............. $24.68 $25.00 $24.72 $25.00
------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income ............................ 1.35* 0.68 1.35 0.80
Net realized and unrealized gain (loss) on
investments and foreign currency transactions ... (0.05)* (0.23) -- (0.30)
------ ------ ------ ------
Total from investment operations ............... 1.30 0.45 1.35 0.50
------ ------ ------ ------
Distributions:
From net investment income ....................... (1.28) (0.77) (1.33) (0.78)
From net realized capital gains .................. -- -- -- --
------ ------ ------ ------
Total distributions ............................ (1.28) (0.77) (1.33) (0.78)
------ ------ ------ ------
NET ASSET VALUE -- END OF PERIOD ................... $24.70 $24.68 $24.74 $24.72
====== ====== ====== ======
TOTAL RETURN ....................................... 5.42% 1.84% 5.63% 2.05%
Ratios of expenses to average net assets:
before fee waivers ............................... 0.72% 0.79%(1) 0.47% 0.54%(1)
after fee waivers ................................ 0.72% 0.61%(1) 0.47% 0.36%(1)
Ratios of net investment income to average net
assets:
before fee waivers ............................... 5.25% 4.34%(1) 5.50% 4.59%(1)
after fee waivers ................................ 5.25% 4.52%(1) 5.50% 4.77%(1)
Portfolio turnover rate ............................ 55.28% 47.85% 55.28% 47.85%
Net assets, end of period .......................... $26,583 $727 $28,913,208 $25,927,109
[FN]
(1)Annualized
*Based on average shares outstanding
</FN>
SEE NOTES TO FINANCIAL STATEMENTS
56
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------------
BOND FUND
-------------------------------------------------------------------
CLASS A CLASS C
--------- ---------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
NET ASSET VALUE -- BEGINNING OF PERIOD ............. $23.36 $25.00 $23.40 $25.00
------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income ............................ 1.27* 1.06 1.30 1.16
Net realized and unrealized gain (loss) on
investments and foreign currency transactions .. 0.11* (1.57) 0.14 (1.62)
------ ------ ------ ------
Total from investment operations ............... 1.38 (0.51) 1.44 (0.46)
Distributions:
From net investment income ....................... (1.23) (1.13) (1.27) (1.14)
From net realized capital gain ................... -- -- -- --
------ ------ ------ ------
Total distributions ............................ (1.23) (1.13) (1.27) (1.14)
NET ASSET VALUE -- END OF PERIOD ................... $23.51 $23.36 $23.57 $23.40
====== ====== ====== ======
TOTAL RETURN ....................................... 6.08% (2.04)% 6.34% (1.83)%
Ratios of expenses to average net assets:
before fee waivers ............................... 0.66% 0.62% 0.41% 0.37%
after fee waivers ................................ 0.66% 0.62% 0.41% 0.37%
Ratios of net investment income to average net
assets:
before fee waivers ............................... 5.31% 4.69% 5.56% 4.94%
after fee waivers ................................ 5.31% 4.69% 5.56% 4.94%
Portfolio turnover rate ............................ 25.64% 17.09% 25.64% 17.09%
Net assets, end of period .......................... $6,521,024 $8,466 $72,055,471 $60,335,227
<FN>
*Based on average shares outstanding
</FN>
LARGE CAP EQUITY FUND
-------------------------------------------------------------------
CLASS A CLASS C
--------- ---------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
NET ASSET VALUE -- BEGINNING OF PERIOD ............. $31.75 $25.00 $31.79 $25.00
------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income ............................ 0.16* 0.22 0.26 0.30
Net realized and unrealized gain (loss) on
investments and foreign currency transactions .. (3.68)* 6.80 3.67 6.79
------ ------ ------ ------
Total from investment operations ............... 3.84 7.02 3.93 7.09
Distributions:
From net investment income ....................... (0.22) (0.27) (0.27) (0.30)
From net realized capital gain ................... (0.88) -- (0.88) --
------ ------ ------ ------
Total distributions ............................ (1.10) (0.27) (1.15) (0.30)
NET ASSET VALUE -- END OF PERIOD ................... $34.49 $31.75 $34.57 $31.79
====== ====== ====== ======
TOTAL RETURN ....................................... 12.07% 28.10% 12.34% 28.35%
Ratios of expenses to average net assets:
before fee waivers ............................... 0.63% 0.63% 0.38% 0.38%
after fee waivers ................................ 0.63% 0.63% 0.38% 0.38%
Ratios of net investment income to average net
assets:
before fee waivers ............................... 0.54% 0.74% 0.79% 0.99%
after fee waivers ................................ 0.54% 0.74% 0.79% 0.99%
Portfolio turnover rate ............................ 36.64% 142.56% 36.64% 142.56%
Net assets, end of period ..........................$10,619,367 $99,888 $187,806,297 $132,381,985
[FN]
*Based on average shares outstanding
</FN>
SEE NOTES TO FINANCIAL STATEMENTS
57
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------------
SMALL CAP EQUITY FUND
-------------------------------------------------------------------
CLASS A CLASS C
--------- ---------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
NET ASSET VALUE -- BEGINNING OF PERIOD ............. $29.17 $25.00 $29.21 $25.00
------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income ............................ 0.01* 0.14 0.11 0.16
Net realized and unrealized gain (loss) on
investments and foreign currency transactions .. 6.94* 4.17 6.93 4.21
------ ------ ------ ------
Total from investment operations ............... 6.95 4.31 7.04 4.37
------ ------ ------ ------
Distributions:
From net investment income ....................... (0.05) (0.14) (0.11) (0.16)
From net realized capital gain ................... (1.55) -- (1.55) --
------ ------ ------ ------
Total distributions ............................ (1.60) (0.14) (1.66) (0.16)
------ ------ ------ ------
NET ASSET VALUE -- END OF PERIOD ................... $34.52 $29.17 $34.59 $29.21
====== ====== ====== ======
TOTAL RETURN ....................................... 24.68% 17.27% 24.98% 17.49%
Ratios of expenses to average net assets:
before fee waivers ............................... 0.66% 0.66% 0.41% 0.41%
after fee waivers ................................ 0.66% 0.66% 0.41% 0.41%
Ratios of net investment income to average net
assets:
before fee waivers ............................... 0.09% 0.31% 0.34% 0.56%
after fee waivers ................................ 0.09% 0.31% 0.34% 0.56%
Portfolio turnover rate ............................ 53.16% 41.02% 53.16% 41.02%
Net assets, end of period .......................... $2,428,801 $28,060 $88,360,329 $67,544,211
<FN>
*Based on average shares outstanding
</FN>
INTERNATIONAL EQUITY FUND
-------------------------------------------------------------------
CLASS A CLASS C
--------- ---------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
NET ASSET VALUE -- BEGINNING OF PERIOD ............. $30.54 $25.00 $30.55 $25.00
------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income ............................ 1.70* 0.84 1.37* 0.99
Net realized and unrealized gain (loss) on
investments and foreign currency transactions .. (1.64)* 7.00 (1.24)* 6.91
------ ------ ------ ------
Total from investment operations ............... 0.06 7.84 0.13 7.90
------ ------ ------ ------
Distributions:
From net investment income ....................... (1.14) (0.92) (1.19) (0.97)
From net realized capital gain ................... (3.43) (1.38) (3.43) (1.38)
------ ------ ------ ------
Total distributions ............................ (4.57) (2.30) (4.62) (2.35)
------ ------ ------ ------
NET ASSET VALUE -- END OF PERIOD ................... $26.03 $30.54 $26.06 $30.55
====== ====== ====== ======
TOTAL RETURN ....................................... (1.22)% 31.98% (0.98)% 32.23%
Ratios of expenses to average net assets:
before fee waivers ............................... 0.71% 0.64% 0.46% 0.39%
after fee waivers ................................ 0.71% 0.64% 0.46% 0.39%
Ratios of net investment income to average net
assets:
before fee waivers ............................... 4.44% 3.12% 4.69% 3.37%
after fee waivers ................................ 4.44% 3.12% 4.69% 3.37%
Portfolio turnover rate ............................ 48.13% 52.42% 48.13% 52.42%
Net assets, end of period .......................... $1,748,773 $10,038 $72,121,697 $41,838,180
[FN]
*Based on average shares outstanding
</FN>
SEE NOTES TO FINANCIAL STATEMENTS.
58
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The Capstone Social Ethics and Religious Values Fund (the "Trust") was
organized as a Massachusetts business trust on April 13, 1998 and is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified open-end management investment company. The Trust currently
consists of six diversified series: the Money Market Fund, the Short-Term
Bond Fund, the Bond Fund, the Large Cap Equity Fund, the Small Cap Equity
Fund, and the International Fund (each a "Fund" and collectively the
"Funds"). Between the date of organization and October 1, 1998, the Funds
had no operations other than those relating to organizational matters and
the sale of 1 Class A share and 1 Class C share of the Large Cap Equity
Fund to Capstone Asset Management Company ("Capstone"), the Trust's adviser
and administrator for $50, and the sale of 4,000 Class C shares
of the Large Cap Equity Portfolio to another shareholder for $100,000.
On October 1, 1998 each of the Funds acquired the net assets of separate
Portfolios of a tax-exempt business trust which had been managed by
Capstone. Each of these Portfolios had been managed following investment
objectives similar to those of the Funds and their net assets consisted
principally of investment securities. Class C shares of each Fund issued to
affect these acquisitions were distributed to each of the Portfolios'
beneficiaries in complete liquidation of the business trust.
The trust is authorized to issue an unlimited number of shares of
beneficial interest of $1.00 Par value. The Fund currently offers two
Classes of shares ("Class A" and "Class C"). Each Class of shares has equal
rights as to earnings, assets and voting privileges, except that each Class
bears different distribution expenses. Each Class of shares has exclusive
voting rights with respect to matters that affect just that Class. Income,
expenses (other than expenses attributable to a specific Class) and
realized and unrealized gains or losses on investments are allocated to
each Class of shares based on its relative net assets.
(2) INVESTMENT OBJECTIVES
As a matter of fundamental investment policy, each of the Funds will
invest in companies that are managed in a socially responsible manner,
reflecting certain ethical and religious values. Accordingly, the
Funds will not invest in companies whose primary business is the
manufacturing, operation or distribution of alcohol, caffeine or
tobacco products, meat processing, pornography, or casinos and other
gambling concerns.
The Money Market Fund's objective is to provide current income, stability
of capital and liquidity by investing in other money market funds and
short-term money market instruments. It seeks to maintain a constant net
asset value of $1.00 per share, although there can be no assurance that
this will be achieved.
The Short-Term Bond Fund's objective is to provide current income and
relative capital stability by attempting to match the price and yield
performance (before expenses) of a blended short-term index consisting of
one-third U.S. Treasury securities, one-third U.S. government securities
and one-third investment grade corporate obligations with maximum
maturities of three years.
The Bond Fund's objective is to provide current income by attempting to
match the price and yield performance (before expenses) of the Lehman
Brothers Government/Corporate Bond Index. The Bond Fund will invest
primarily in obligations of the U.S. Government, its agencies, and
instrumentalities, and investment grade corporate obligations having a
broad range of maturities.
The Large Cap Equity Fund's objective is to provide capital growth and
income by attempting to match the performance (before expenses) of the
S & P 500 Index. The Large Cap Equity Fund will invest primarily in the
common stocks of large companies whose securities are widely held and have
an active trading market.
The Small Cap Equity Fund's objective is to provide capital appreciation
by attempting to match the performance (after expenses) of the S & P
SmallCap 600 Index which consists of 600 stocks with smaller
capitalization than those included in the S & P 500 Index. The Small Cap
Equity Fund will invest primarily in equity securities of the type that
are included in the index.
The International Fund's objective is to provide capital appreciation by
attempting to match the performance and yield characteristics of the Morgan
Stanley Capital International Europe, Australia, Far East Index, net of
withholding taxes. The International Fund will invest primarily in
securities with characteristics generally comparable to those included in
this index or whose performance is expected to be comparable.
59
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
(3) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
A. SECURITY VALUATION
Portfolio equity securities which are primarily traded on security
exchanges are valued at the last sale price on that exchange or,
if there is no recent last sale price available, at the last
current bid quotation. A security which is listed or traded on
more than one exchange is valued at the quotation on the exchange
determined to be the primary market for such security. All other
equity securities not so traded are valued at the last current bid
quotation prior to the time of valuation.
Securities held by the Money Market Fund and other money market
securities held by the other Funds are valued using the amortized
cost method of valuation, which in the opinion of the Board of
Trustees reflects fair value.
Other debt securities are valued by using market quotations or
independent pricing services which use prices provided by market
makers or estimates of market values obtained from yield data
relating to instruments or securities with similar
characteristics. Other securities, including restricted
securities, and other assets are valued at fair value as
determined in good faith by the Board of Trustees.
B. FOREIGN CURRENCY TRANSLATION
Portfolio securities and other assets and liabilities denominated
in foreign currencies are translated into U.S. dollars based on
the exchange rate of such currencies against U.S. dollars on the
date of valuation. Purchases and sales of securities and income
items denominated in foreign currencies are translated into U.S.
dollars at the exchange rate in effect on the transaction date.
The Funds do not separately report the effect of changes in
foreign exchange rates from changes in market prices on securities
held. Such changes are included in net realized and unrealized
gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of
foreign currencies, currency gains or losses realized between the
trade and settlement dates on securities transactions and the
difference between the recorded amounts of dividends, interest and
foreign withholding taxes, and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange
gains or losses arise from changes in foreign exchange rates on
foreign currency denominated assets and liabilities other than
investments in securities held at the end of the reporting period.
C. FEDERAL INCOME TAXES
It is the policy of the Funds to comply with the requirements of
the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of their taxable
income to their shareholders in a manner which results in no tax
to the Funds. Therefore, no federal income or excise tax
provisions are required.
D. SECURITY TRANSACTIONS, INCOME AND DISTRIBUTIONS
Security transactions are accounted for on the trade date.
Realized gains and losses on security transactions are determined
on the specific identification basis. Interest income on debt
securities is recorded on the accrual basis. Discounts and
premiums on debt securities are amortized to income over their
respective lives. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
60
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
E. FORWARD EXCHANGE CONTRACTS
The Funds may enter into forward exchange contracts to hedge
against foreign currency exchange risks. These contracts are
valued daily and any appreciation or depreciation therein is
included in the statement of assets and liabilities. Realized and
unrealized gains and losses are included in the statement of
operations.
F. FUTURES CONTRACTS
The Funds may invest in financial futures contracts. Upon entering
into a futures contract the Fund is required to deposit with its
futures broker cash or other securities equal to a certain
percentage of the futures contract amount ("initial margin").
During the term of the futures contract payments are exchanged
daily between the Fund and the futures broker in amounts equal to
the appreciation or depreciation in the value of the futures
contract ("variation margin"). The Funds recognize gains or losses
equal to the variation margin payments paid or received. Futures
contracts involve market risks in excess of the amounts recognized
in the statement of assets and liabilities, Additionally, there is
a risk that a Fund may not be able to enter into a closing
transaction because of an illiquid secondary market. On September
30, 2000 the International Fund had cash of $3,328,059 held by its
futures broker as initial margin.
G. REPURCHASE AGREEMENTS
In connection with transactions in repurchase agreements, it is
the Funds' policy that their custodian bank take possession of the
underlying collateral securities, the fair value of which must be
equal to the principal amount of the repurchase agreement
including accrued interest throughout the term of the repurchase
agreement. If the seller defaults and the fair value of the
collateral declines, realization of the collateral by the Funds
may be delayed or limited.
H. ORGANIZATION EXPENSES
Capstone has agreed to bear all of the costs incurred in
connection with the organization and registration of the Trust's
shares.
I. USE OF ESTIMATES
In preparing financial statements in accordance with generally
accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements. Actual
results could differ from those estimates.
61
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - SEPTEMBER 30, 2000
- --------------------------------------------------------------------------------
(4) INVESTMENT ADVISER AND ADMINISTRATOR
Capstone serves as each Fund's adviser and administrator. Pursuant to the
terms of the Investment Advisory Agreement, Capstone shall have full
discretion to manage the assets of the Funds in accordance with their
investment objectives. As compensation for its services each Fund pays
Capstone, on a monthly basis, an investment advisory fee. The advisory fees
for the Money Market Fund are calculated at the annual rate of 0.10% of the
Money Market Fund's average daily net assets. The advisory fees for all of
the other Funds are calculated at the annual rate of 0.15% on the first
$500 million of the other Funds' collective average daily net assets and
then allocated to each Fund based upon relative net assets. The rate
declines to 0.10% on the next $250 million of average daily net assets,
0.075% on the next $250 of average daily net assets, and to 0.05% on
collective average daily net assets in excess of $1 billion.
Pursuant to the terms of the Administration Agreement, Capstone will
supervise the Fund's daily business affairs, coordinate the activities of
persons providing services to the Fund, and furnish office space and
equipment to the Fund. As compensation for its services Capstone receives a
monthly fee from each Fund calculated at the annual rate of 0.05% of each
Fund's average daily net assets.
Capstone has voluntarily agreed to waive its investment advisory and
administrative fees for the Money Market Fund, resulting in waivers of
investment advisory fees and administrative fees for the year ended
September 30, 2000 of $7,813. These waivers are voluntary and may be
discontinued at any time. Upon reaching $25 million in net assets, Capstone
discontinued its waiver for the Money Market Fund.
(5) DISTRIBUTION PLAN AND OTHER TRANSACTIONS WITH AFFILIATES
Capstone Asset Planning Company (the "Distributor") serves as the Trust's
principal underwriter pursuant to a Distribution Agreement. The Distributor
is an affiliate of Capstone.
The Class A shares of each Fund have adopted a Service and Distribution
Plan (the "Plan") pursuant to Rule 12(b)-1 under the 1940 Act. The Plan
provides that the Class A shares will make payments to the Distributor to
compensate the Distributor for expenditures incurred by it in connection
with the distribution of Class A shares and for the provision of certain
stockholder services including but not limited to the payment of
compensation to security dealers and other financial organizations to
obtain various distribution related and/or administrative services for the
Fund. As compensation for its services the Distributor receives a monthly
fee calculated at the annual rate of 0.10% of the average daily net assets
of the Class A shares of the Money Market Fund and 0.25% of the average
daily net assets of the Class A shares of the other Funds.
Certain officers of the Trust are also officers of Capstone and the
Distributor.
62
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - SEPTEMBER 30, 2000
- -----------------------------------------------------------------------------------------------------------------
(6) SHARES OF CAPITAL STOCK
All Funds - The authorized capital stock of the funds is unlimited in shares, with a par value of $1.00 per
share. Transactions in shares of capital stock, for the period from October 1, 1999, to September 30, 2000,
were as follows:
CLASS A CLASS C
--------- ---------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
MONEY MARKET FUND:
Sold 56,950 $ 56,950 9,970,684 $ 9,970,684
Reinvested 1,155 1,155 1,077,053 1,077,053
Redeemed (38,082) (38,082) (14,412,752) (14,412,752)
-------- ----------- ----------- ------------
Net Increase 20,023 $ 20,023 (3,365,015) $ (3,365,015)
======== =========== =========== ============
SHORT-TERM BOND FUND:
Sold 1,016 $ 25,000 72,906 $ 1,794,706
Reinvested 31 764 54,858 1,346,143
Redeemed -- -- (7,762) (190,922)
-------- ----------- ----------- ------------
Net Increase 1,047 $ 25,764 120,002 $ 2,949,927
======== =========== =========== ============
BOND FUND:
Sold 273,829 $ 6,379,865 1,000,227 $ 23,099,540
Reinvested 6,960 162,124 27,587 640,731
Redeemed (3,720) (87,012) (549,366) (13,092,003)
-------- ----------- ----------- ------------
Net Increase 277,069 $ 6,454,977 478,448 $ 10,648,268
======== =========== =========== ============
LARGE CAP EQUITY FUND:
Sold 311,752 $10,831,512 1,744,561 $ 59,363,384
Reinvested 978 34,190 20,989 730,756
Redeemed (7,952) (269,548) (496,321) (17,333,007)
-------- ----------- ----------- ------------
Net Increase 304,778 $10,596,154 1,269,229 $ 42,761,133
======== =========== =========== ============
Sold 71,844 $ 2,389,218 475,612 $ 15,562,071
Reinvested 85 2,694 26,454 794,109
Redeemed (2,537) (83,075) (260,031) (8,420,534)
-------- ----------- ----------- ------------
Net Increase 69,392 $ 2,308,837 242,035 $ 7,935,646
======== =========== =========== ============
INTERNATIONAL FUND:
Sold 66,408 $ 1,913,764 1,384,544 $ 37,878,929
Reinvested 1,518 41,053 15,283 443,548
Redeemed (1,064) (30,106) (1,767) (49,429)
-------- ----------- ----------- ------------
Net Increase 66,862 $ 1,924,711 1,398,060 $ 38,273,048
======== =========== =========== ============
63
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - SEPTEMBER 30, 2000
- -----------------------------------------------------------------------------------------------------------------
All Funds - The authorized capital stock of the funds is unlimited in shares, with a par value of $1.00 per
share. Transactions in shares of capital stock, for the period from October 1, 1998 (commencement of operations)
to September 30, 1999, were as follows:
CLASS A CLASS C
--------- ---------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
MONEY MARKET FUND:
Shares issued in connection
with taxable reorganization $ -- 4,875,832 $ 4,875,832
Sold 20,520 20,520 22,595,027 22,595,027
Reinvested 91 91 1,026,431 1,026,431
Redeemed (6,255) (6,255) (5,327,183) (5,327,183)
------ -------- ---------- ------------
Net Increase 14,356 $ 14,356 23,170,107 $ 23,170,107
====== ======== ========== ============
SHORT-TERM BOND FUND:
Sold 36 $ 925 1,032,003 $ 25,782,734
Reinvested 1 9 27,239 673,311
Redeemed (8) (202) (10,494) (262,298)
------ -------- ---------- ------------
Net Increase 29 $ 732 1,048,748 $ 26,193,747
====== ======== ========== ============
BOND FUND:
Shares issued in connection
with taxable reorganization $ -- 2,059,228 $ 51,480,690
Sold 366 8,672 517,213 12,697,515
Reinvested 5 106 8,655 204,413
Redeemed (9) (199) (6,313) (149,667)
------ -------- ---------- ------------
Net Increase 362 $ 8,579 2,578,783 $ 64,232,951
====== ======== ========== ============
LARGE CAP EQUITY FUND:
Shares issued in connection
with taxable reorganization $ -- 921,070 $ 23,026,741
Sold 3,648 120,440 3,406,150 111,291,896
Reinvested 6 186 3,414 107,546
Redeemed (508) (17,125) (166,564) (5,404,504)
------ -------- ---------- ------------
Net Increase 3,146 $103,501 4,164,070 $129,021,679
====== ======== ========== ============
SMALL CAP EQUITY FUND:
Shares issued in connection
with taxable reorganization $ -- 1,737,033 $ 43,425,834
Sold 1,005 29,884 596,450 16,165,914
Reinvested 1 16 364 10,258
Redeemed (44) (1,270) (21,483) (571,885)
------ -------- ---------- ------------
Net Increase 962 $ 28,630 2,312,364 $ 59,030,121
====== ======== ========== ============
64
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - SEPTEMBER 30, 2000
- -------------------------------------------------------------------------------------------------------------------
CLASS A CLASS C
--------- ---------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
INTERNATIONAL FUND:
Shares issued in connection
with taxable reorganization $ -- 1,282,187 $32,054,682
Sold 331 10,092 83,439 2,350,109
Reinvested 4 120 3,768 106,826
Redeemed (6) (194) -- --
---- ------- --------- -----------
Net Increase 329 $10,018 1,369,394 $34,511,617
==== ======= ========= ===========
(7) INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term
securities) by the Funds for the year ended September 30, 2000 were as
follows:
Purchases Sales
--------- -----
Short-Term Bond Fund $ 16,514,692 $13,664,801
Bond Fund 33,935,443 16,946,558
Large Cap Equity Fund 110,376,334 60,937,763
Small Cap Equity Fund 47,297,439 41,138,887
International Fund 19,462,282 7,638,521
(8) TAX MATTERS
Each Fund intends to qualify as a regulated investment company under the
Internal Revenue Code and to distribute all of its taxable income,
including any net realized gains on investments, to shareholders.
Accordingly, no provision for federal income or excise tax has been made.
Income and capital gains of the Funds are determined in accordance with
both tax regulations and generally accepted accounting principles. Such may
result in temporary and permanent differences between tax basis earnings
and earnings reported for financial statement purposes. Temporary
differences that result in over-distributions for financial statement
purposes are classified as distributions in excess of net investment income
or accumulated net realized gains. Permanent differences in the recognition
of earnings are reclassified to additional paid-in capital. Distributions
in excess of tax-basis earnings are recorded as return of capital.
At September 30, 2000 the Short-Term Bond Fund had a $38,104 capital loss
carryforward for Federal income tax purposes which expires in 2008 and had
realized post October 31, 1999 capital losses of $192,748 which, in
accordance with Federal income tax requirements, have been deferred until
the first day of the Fund's fiscal year ended September 30, 2001.
At September 30, 2000 the Bond Fund had a $134,468 capital loss
carryforward for Federal income tax purposes which expires in 2008 and had
realized post October 31, 1999 capital losses of $531,539 which, in
accordance with Federal income tax requirements, have been deferred until
the first day of the Fund's next fiscal year ended September 30, 2001.
At September 30, 2000 the International Fund had realized post October 31,
1999 capital losses of $1,963,213 and foreign currency losses of $16,156
which, in accordance with Federal income tax requirements, have been
deferred until the first day of the Fund's next fiscal year ended September
30, 2001.
65
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
HOUSTON, TEXAS
We have audited the accompanying statements of assets and liabilities of
Capstone Social Ethics and Religious Values Fund (comprising, respectively, the
Money Market Fund, the Short-Term Bond Fund, the Bond Fund, the Large Cap Equity
Fund, the Small Cap Equity Fund, and the International Fund), including the
portfolios of investments, as of September 30, 2000, the related statements of
operations for the year then ended, and the statements of changes in net assets
and the financial highlights for each of periods indicated thereon. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 2000, by correspondence with the custodian and brokers. 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 our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the Funds comprising Capstone Social Ethics and Religious Values Fund as
of September 30, 2000, the results of their operations for the year then ended,
and the changes in their net assets and the financial highlights for for each of
the periods presented in conformity with generally accepted accounting
principles.
BRIGGS, BUNTING & DOUGHERTY, LLP
PHILADELPHIA, PENNSYLVANIA
OCTOBER 27, 2000
66
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[LOGO] CAPSTONE
SERV FUNDS
- ------------------------------------
| EQUITY |
| *LARGE CAP EQUITY FUND |
| *SMALL CAP EQUITY FUND |
- ------------------------------------
-----------------------------------
| FIXED INCOME |
| *MONEY MARKET FUND |
| *SHORT-TERM BOND FUND |
| *BOND FUND |
-----------------------------------
-----------------------------------
| INTERNATIONAL |
| *INTERNATIONAL FUND |
-----------------------------------
For more complete information about the SERV Funds, including charges and
expenses, contact the Distributor at the address below to receive a prospectus.
Please read it carefully before you invest or send money.
CAPSTONE ASSET PLANNING COMPANY
5847 SAN FELIPE, SUITE 4100
HOUSTON, TEXAS 77057
1-800-262-6631