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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08749
---------------------------------------------
The Capstone Social Ethics & Religious Values Fund
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
5847 San Felipe, Suite #4100 Houston, TX 77057
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(Address of principal executive offices) (Zip code)
InCap Service Company, Willow Grove, PA 19090-1904
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(Name and address of agent for service)
Registrant's telephone number, including area code: 954-217-7999
----------------------------
Date of fiscal year end: 09/30/2003
---------------------
Date of reporting period: 09/30/2003
---------------------
ITEM 1. REPORTS TO SHAREHOLDERS
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
Dear Shareholder:
We are pleased to present the annual report for Capstone Social Ethics and
Religious Values Fund for the year ended September 30, 2003.
ECONOMIC OVERVIEW
The third quarter 2003 was one in which it appeared that both the economy and
the equity market demonstrated that the signs of recovery were indeed pointing
toward continued growth, but there were also many financial markets and world
events about which the U.S. stock and bond markets could find reason to worry.
These issues include some familiar themes such as: events in the Middle East, an
over extended consumer, rising mortgage rates, a falling dollar, and the lack of
job growth.
We expect the economic stimulus that began to take place months ago (and
continues now) to pave the way for continued economic growth, increased
earnings, and a rising equity market. Evidence that job growth is beginning to
pick up is becoming more visible. For example, the demand for temporary help is
rising. This is usually a precursor to establishment of permanent jobs. Hiring
plans by the small business sector have risen sharply. In addition, it would
appear that new claims for unemployment have peaked.
A concern parallel to employment has been business capital spending. In this
area as well, signs of life are beginning to appear. During the second quarter,
spending on Information Technology ("IT") grew at an annual rate of 16%. This is
important for two reasons: 1) IT spending now constitutes a significant portion
of all capital spending, and 2) IT spending represents the bulk of capital
expenditures in the service sector. IT spending in the service sector is
important because services have long replaced manufacturing as the most
significant component of economic activity. Secondly, increased IT spending will
lead to increased productivity which contributes to maintaining a stable price
level.
Equity markets responded positively in anticipation of better economic times to
come. For the third quarter, the S&P 500 was up 2.64%, bringing the year-to-date
increase up to 14.71%. The third quarter also brought a reversal of the results
from the second quarter in that higher-quality, more profitable companies out
performed lower-quality, less profitable companies.
As this commentary is written, the equity market is up 20% year-to-date, and is
up 34% from the bear market low reached in October of last year. The S&P 500 is
still 30% below its all time high reached in March of 2000. We find the markets
recovery encouraging, and its drop from those highs as an opportunity to capture
more upside going forward.
The economic and equity market recovery have taken place against a backdrop of
continued low inflation and an accommodating Federal Reserve. The prospect of
rising rates as the economy improves remains one of our concerns.
Domestic credit markets were extremely volatile during the third quarter of this
year and posted negative returns. While not producing substantial losses, the
negative returns are significant because they break an impressive string of
positive U.S. bond market quarters. The last negative quarter for bond investors
was the first quarter of 2002.
The Lehman Brothers Government/Credit Bond Index reported a -0.50% total return
last quarter, but is still up 4.70% year-to-date. The negative price changes
were the result of wild swings in interest rates during the past three months.
Specifically, the ten-year U.S. Treasury note rose from a low of 3.52% to a high
of 4.60%, only to settle in the middle of the range at 3.94%.
The driving positive force behind the bond market's steady performance the last
couple of quarters has been the corporate sector. Year-to-date, the corporate
sector of the Lehman Bond Index has risen 7.62%, and was relatively
unchanged last quarter. By comparison, the mortgage-back sector has only
returned 2.11% year-to-date. Within the corporate sector, lower rated issues
have dramatically outperformed higher rated issues. While AA-rated bonds have
returned a healthy 4.79% year-to-date, in line with the overall market,
BAA-rated securities have returned 10.46% year-to-date, with an additional 0.27%
last quarter.
The volatility the past quarter may be indicative of the key element of the
near-term bond market. At this time, the Federal Reserve Board policymakers have
officially stated their intentions to keep short-term interest rate targets
steady at current levels. The Federal Reserve is mainly responsible for assuring
financial integrity and fostering a climate of economic growth. In this regard,
policymakers have determined that the risks of economic stagnation and
'disinflation' are greater risks than inflation, and this is why they voted to
reduce short-term rate targets 0.25% at their June meeting and to signal the
markets that the Board's bias was to hold rates at that level for a period of
time going forward. As long as the Federal Reserve Board maintains this
position, short-term interest rates will remain at historically low levels. This
monetary policy does not necessarily lock longer rates in place. In an attempt
to 'get ahead of the market,' Bond market participants will try to anticipate
when the policymakers will alter their current position and reverse short-term
interest rate targets. As a result, we expect bond market prices to fluctuate
widely as economic data is filtered by the market as to the future growth and
well being of economic activity.
We sincerely appreciate your trust and confidence in us and look forward to
continuing our relationship with you for many years to come.
Sincerely,
/s/ Edward L. Jaroski /s/ Dan E. Watson
Edward L. Jaroski Dan E. Watson
President and Chairman of the Board Executive Vice President
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL ETHICS
AND RELIGIOUS VALUES FUND (SHORT-TERM BOND FUND VS. A CUSTOM INDEX*)
[GRAPH]
FUND - CLASS A FUND - CLASS C CUSTOM INDEX
1/5/1999 10,000 10,000 10,000
03/31/99 9,985 10,046 10,088
06/30/99 10,089 10,100 10,151
09/30/99 10,184 10,205 10,269
12/31/99 10,238 10,262 10,349
03/31/00 10,345 10,377 10,477
06/30/00 10,504 10,542 10,648
09/30/00 10,735 10,779 10,899
12/31/00 10,993 11,045 11,180
03/31/01 11,309 11,368 11,513
06/30/01 11,434 11,502 11,667
09/30/01 11,781 11,855 12,073
12/31/01 11,839 11,929 12,169
03/31/02 11,840 11,934 12,171
06/30/02 12,109 12,211 12,458
09/30/02 12,329 12,441 12,742
12/31/02 12,440 12,560 12,916
03/31/03 12,511 12,638 13,048
06/30/03 12,558 12,695 13,212
09/30/03 12,528 12,672 13,283
Past performance can not guarantee future results.
Average Annual Total Return as of September 30, 2003
One Year Since Inception 01/04/99
Class A 1.61% 4.87%
Class C 1.86% 5.13%
Custom Index 4.24% 6.17%
* The 1-3 Year Blended Index is calculated by weighting each of the following
indexes equally: (1) Merrill Lynch 1-3 Year Treasury Index, an unmanaged index
consisting of coupon-bearing Treasury Issues exclusive of flower bonds with a
maturity of 1-2.9 years; (2) Merrill Lynch 1-3 year Government Agency Index, an
unmanaged index consisting of coupon-bearing debt of agencies of the U.S.
Government with a maturity of 1-2.9 years, excluding agency pass-throughs, CMOs
and flower bonds; and (3) Merrill Lynch 1-3 Year Investment Grade Corporate
Index, an unmanaged index consisting of investment grade (BB/Baa or better)
corporate debt representing a cross-section of industries with maturities
ranging from 1-2.9 years.
The investment return and principal value of an investment will fluctuate and,
therefore, an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's performance includes reinvestment of income and
capital gains distributions, if any. All market indices are unmanaged. It is not
possible to invest directly in any index.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL
ETHICS AND RELIGIOUS VALUES FUND (BOND FUND VS. THE LEHMAN BROTHERS
GOVERNMENT/CREDIT BOND INDEX*)
[GRAPH]
FUND - CLASS A FUND - CLASS C LEHMAN BROTHERS
10/1/1998 10,000 10,000 10,000
12/31/98 9,964 10,017 10,013
03/31/99 9,748 9,878 9,893
06/30/99 9,738 9,751 9,785
09/30/99 9,795 9,816 9,838
12/31/99 9,736 9,763 9,797
03/31/00 9,990 10,027 10,059
06/30/00 10,121 10,163 10,205
09/30/00 10,391 10,438 10,498
12/31/00 10,837 10,896 10,959
03/31/01 11,157 11,222 11,309
06/30/01 11,160 11,236 11,343
09/30/01 11,696 11,781 11,883
12/31/01 11,667 11,758 11,890
03/31/02 11,608 11,705 11,835
06/30/02 12,061 12,168 12,278
09/30/02 12,717 12,835 12,978
12/31/02 12,873 13,010 12,916
03/31/03 13,064 13,209 13,048
06/30/03 13,424 13,579 13,212
09/30/03 13,268 13,430 13,283
Past performance can not guarantee future results.
Average Annual Total Return as of September 30, 2003
One Year Since Inception 09/30/98
Class A 4.33% 5.82%
Class C 4.64% 6.08%
Lehman Brothers Government/
Credit Bond Index 2.35% 5.84%
* The Lehman Brothers Government/Credit Bond Index is comprised of U.S. Treasury
obligations, U.S. government agency/instrumentality obligations, investment
grade corporate obligations (industrial, utility, and finance, including both
U.S. and non-U.S. corporations) and non-corporates (sovereign, supranational,
foreign agencies, and foreign local governments).
The investment return and principal value of an investment will fluctuate and,
therefore, an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's performance includes reinvestment of income and
capital gains distributions, if any. All market indices are unmanaged. It is not
possible to invest directly in any index.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL
ETHICS AND RELIGIOUS VALUES FUND (LARGE CAP EQUITY FUND VS. THE S&P 500
COMPOSITE STOCK PRICE INDEX*)
[GRAPH]
FUND - CLASS A FUND - CLASS C S&P 500
10/1/1998 10,000 10,000 10,000
12/31/98 12,090 12,082 12,130
03/31/99 12,715 12,727 12,734
06/30/99 13,616 13,633 13,632
09/30/99 12,810 12,835 12,780
12/31/99 14,697 14,731 14,682
03/31/00 14,983 15,032 15,018
06/30/00 14,468 14,519 14,619
09/30/00 14,357 14,419 14,478
12/31/00 13,250 13,319 13,345
03/31/01 11,711 11,778 11,763
06/30/01 12,367 12,448 12,451
09/30/01 10,531 10,608 10,623
12/31/01 11,642 11,735 11,758
03/31/02 11,638 11,735 11,790
06/30/02 10,027 10,118 10,210
09/30/02 8,322 8,401 8,446
12/31/02 9,048 9,145 9,159
03/31/03 8,765 8,864 8,871
06/30/03 10,020 10,143 10,236
09/30/03 10,284 10,410 10,507
Past performance can not guarantee future results.
Average Annual Total Return as of September 30, 2003
One Year Since Inception 09/30/98
Class A 23.57% 0.56%
Class C 23.92% 0.81%
S&P Composite Stock Price Index 24.40% 0.99%
* The S&P 500 Index consists of 500 common stocks of large companies whose
securities are widely held and have an active trading market. Each security's
weight in index is proportional to its market value. Thus, the largest stocks
included in the index will comprise a disproportionate portion of the value of
the index. The securities in the index represent a variety of industries. Most
securities in the index are listed on the New York Stock Exchange, but NASDAQ
and American Stock Exchange securities are also represented. "Equity securities"
include common stocks (including SPDRs), preferred stocks and securities
convertible or exchangeable for common stock.
The investment return and principal value of an investment will fluctuate and,
therefore, an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's performance includes reinvestment of income and
capital gains distributions, if any. All market indices are unmanaged. It is not
possible to invest directly in any index.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL
ETHICS AND RELIGIOUS VALUES FUND (SMALL CAP EQUITY FUND VS. THE S&P
SMALLCAP 600 INDEX*)
[GRAPH]
FUND - CLASS A FUND - CLASS C S&P 600
10/1/1998 10,000 10,000 10,000
12/31/98 11,699 11,731 11,760
03/31/99 10,656 10,688 10,702
06/30/99 12,286 12,303 12,352
09/30/99 11,727 11,749 11,754
12/31/99 13,310 13,341 13,219
03/31/00 14,083 14,127 13,987
06/30/00 14,183 14,237 14,129
09/30/00 14,621 14,683 14,595
12/31/00 14,881 14,958 14,778
03/31/01 13,202 13,784 13,809
06/30/01 15,523 15,619 15,699
09/30/01 12,866 12,958 13,049
12/31/01 15,531 15,652 15,746
03/31/02 16,559 16,693 16,842
06/30/02 15,456 15,593 15,744
09/30/02 12,653 12,767 12,816
12/31/02 13,248 13,405 13,445
03/31/03 12,490 12,644 12,665
06/30/03 14,804 14,998 15,182
09/30/03 15,855 16,067 16,255
Past performance can not guarantee future results.
Average Annual Total Return as of September 30, 2003
One Year Since Inception 09/30/98
Class A 25.31% 9.66%
Class C 25.85% 9.95%
S&P SmallCap 600 Index 26.83% 10.20%
* The S&P SmallCap 600 Index is a broadly diversified unmanaged index consisting
of 600 stocks with smaller market capitalization than those included in the S&P
500 Index.
The investment return and principal value of an investment will fluctuate and,
therefore, an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's performance includes reinvestment of income and
capital gains distributions, if any. All market indices are unmanaged. It is not
possible to invest directly in any index.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN CAPSTONE SOCIAL ETHICS
AND RELIGIOUS VALUES FUND (INTERNATIONAL FUND VS. THE MSCI EAFE INDEX*)
[GRAPH]
FUND - CLASS A FUND - CLASS C MSCI EAFE
10/1/1998 10,000 10,000 10,000
12/31/98 11,961 11,973 12,075
03/31/99 12,363 12,384 12,251
06/30/99 13,157 13,173 12,571
09/30/99 13,210 13,236 13,132
12/31/99 15,122 15,159 15,371
03/31/00 15,065 15,114 15,364
06/30/00 14,156 14,194 14,764
09/30/00 13,049 13,106 13,581
12/31/00 12,512 12,575 13,174
03/31/01 10,778 10,846 11,325
06/30/01 10,595 10,663 11,135
09/30/01 9,083 9,150 9,541
12/31/01 9,691 9,772 10,194
03/31/02 9,784 9,870 10,200
06/30/02 9,556 9,641 9,912
09/30/02 7,597 7,669 7,918
12/31/02 8,077 8,163 8,409
03/31/03 7,517 7,613 7,666
06/30/03 8,323 8,436 9,054
09/30/03 8,636 8,762 9,739
Past performance can not guarantee future results.
Average Annual Total Return as of September 30, 2003
One Year Since Inception 09/30/98
Class A 13.68% (2.89)%
Class C 14.26% (2.61)%
EAFE Index 23.00% (0.53)%
* The Morgan Stanley Capital International Europe, Australia, Far East Index
("EAFE Index") is based on the prices of more than 1,000 companies listed on the
stock exchanges of Europe, Australia, New Zealand and the Far East. Europe
includes Austria, Belgium, Denmark, Finland, France, Germany, Italy, The
Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom. The Far
East includes Japan, Hong Kong, and Singapore/Malaysia. The index is translated
into U.S. dollars and includes reinvestment of all dividends and capital gain
distributions.
The investment return and principal value of an investment will fluctuate and,
therefore, an investor's shares, when redeemed, may be worth more or less than
their original cost. The Fund's performance includes reinvestment of income and
capital gains distributions, if any. All market indices are unmanaged. It is not
possible to invest directly in any index.
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SHORT-TERM BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
AGENCY OBLIGATIONS (31.05%)
FEDERAL HOME LOAN BANK (7.56%)
3.00%, 08/15/05 $ 1,000,000 $ 1,025,614
4.125%, 05/13/05 1,000,000 1,041,545
5.19%, 10/20/03 200,000 200,428
------------
2,267,587
------------
FHLMC - SINGLE FAMILY (13.46%)
2.375%, 4/15/06 4,000,000 4,036,900
------------
FANNIE MAE - SINGLE FAMILY (10.03%)
2.55%, 02/27/06 3,000,000 3,007,710
------------
TOTAL AGENCY OBLIGATIONS (COST $9,312,108) 9,312,197
------------
CORPORATE BONDS (33.83%)
BANKS (2.76%)
Banks One Corp., 7.625%, 08/01/05 750,000 828,728
------------
COMMUNICATIONS SERVICES (1.80%)
Ameritech Capital Funding, 6.30%, 10/15/04 515,000 539,342
------------
COMPUTER HARDWARE (2.72%)
Hewlett-Packard Co., 7.15%, 06/15/05 750,000 816,402
------------
DIVERSIFIED FINANCIAL SERVICES (17.55%)
American Express Credit Corp., 4.25%, 02/07/05 1,000,000 1,036,680
Countrywide Home Loans, Inc., 6.84%, 10/22/04 1,000,000 1,054,254
Duke Capital Corp., 7.25%, 10/01/04 1,000,000 1,044,436
General Electric Capital Corp., 6.80%, 11/01/05 1,000,000 1,102,351
Household Finance Corp., 6.00%, 05/01/04 1,000,000 1,027,243
------------
5,264,964
------------
MINING (3.67%)
Alcoa, Inc., 7.25%, 08/01/05 1,000,000 1,099,459
------------
PUBLISHING (2.60%)
Tribune Co., 6.30%, 07/30/04 750,000 780,324
------------
RETAIL STORES (2.73%)
May Department Stores Co., 6.875%, 11/01/05 750,000 818,573
------------
TOTAL CORPORATE BONDS (COST $9,992,957) 10,147,792
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SHORT-TERM BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
U.S. TREASURY OBLIGATIONS (33.26%)
U.S. TREASURY NOTES
1.50%, 07/31/05 $ 3,000,000 $ 3,006,915
5.875%, 11/15/04 3,500,000 3,685,255
6.50%, 08/15/05 3,000,000 3,283,242
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TOTAL U.S. TREASURY OBLIGATIONS (COST $9,794,925) 9,975,412
------------
SHORT TERM INVESTMENTS (0.52%)
Fifth Third Institutional Government
Money Market Fund, 0.95% **
(COST $156,456) 156,456 156,456
------------
TOTAL INVESTMENTS (COST $29,256,446) (98.66%) $ 29,591,857
OTHER ASSETS IN EXCESS OF LIABILITIES (1.34%) 401,980
------------
NET ASSETS (100%) $ 29,993,837
============
Cost for federal income tax at September 30, 2003 was
$29,265,890 and net unrealized appreciation consisted of:
Gross unrealized appreciation $ 381,442
Gross unrealized depreciation (55,475)
------------
Net unrealized appreciation $ 325,967
============
** Variable rate security; the rate shown represents the rate at September 30,
2003.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
AGENCY OBLIGATIONS (17.51%)
FANNIE MAE (9.05%)
4.375%, 03/15/13 $ 1,000,000 $ 1,003,208
5.00%, 01/15/07 1,000,000 1,082,554
5.50%, 05/02/06 250,000 270,655
6.00%, 05/15/08 1,500,000 1,691,799
6.375%, 06/15/09 1,300,000 1,497,053
------------
5,545,269
------------
FEDERAL HOME LOAN BANK (4.32%)
4.50%, 08/14/09 1,500,000 1,570,169
5.125%, 03/06/06 1,000,000 1,075,243
------------
2,645,412
------------
FREDDIE MAC (4.14%)
3.875%, 02/15/05 1,000,000 1,034,453
5.00%, 05/15/04 1,200,000 1,228,699
6.375%, 08/01/11 250,000 271,973
------------
2,535,125
------------
TOTAL AGENCY OBLIGATIONS (COST $10,068,933) 10,725,806
------------
CORPORATE BONDS (38.88%)
AEROSPACE/DEFENSE (1.69%)
Boeing Capital Corp., 6.50%, 02/15/12 640,000 701,584
Lockheed Martin Corp., 7.25%, 05/15/06 150,000 168,698
McDonnell Douglas Corp., 6.875%, 11/01/06 150,000 165,010
------------
1,035,292
------------
AGRICULTURAL BIOTECHNOLOGY (0.29%)
Pharmacia Corp., 6.75%, 12/15/27 150,000 176,250
------------
AIRLINES (0.19%)
AMR Corp., 9.00%, 08/01/12 150,000 114,375
------------
AUTO PARTS & EQUIPMENT (1.55%)
AutoZone, Inc., 4.375%, 06/01/13 650,000 617,221
AutoZone, Inc., 6.50%, 07/15/08 150,000 168,457
TRW, Inc., 7.625%, 03/15/06 150,000 166,424
------------
952,102
------------
AUTOMOBILE MANUFACTURERS (0.26%)
DaimlerChrysler NA Holding Corp.,
7.40%, 01/20/05 150,000 160,101
------------
BANKS (7.55%)
ABN Amro Bank, 7.55%, 06/28/06 150,000 171,312
Bank of America Corp., 7.80%, 02/15/10 150,000 180,187
Bank of America Corp., 4.875%, 09/15/12 500,000 509,729
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
Bank One Corp., 7.60%, 05/01/07 $ 150,000 $ 172,438
BankBoston NA, 6.375%, 04/15/08 150,000 168,949
Deutsche Bank Financial, Inc., 6.70%, 12/13/06 150,000 170,127
Dresdner Bank AG, 6.625%, 09/15/05 150,000 161,551
Dresdner Bank AG, 7.25%, 09/15/15 500,000 576,551
J.P. Morgan Chase & Co., 6.75%, 02/01/11 150,000 172,343
KeyCorp, 7.50%, 06/15/06 150,000 170,186
KFW International Finance, 4.75%, 01/24/07 175,000 188,482
National City Corp., 5.75%, 02/01/09 150,000 168,640
Southtrust Bank NA, 6.125%, 01/09/28 150,000 163,283
SunTrust Banks, Inc., 7.375%, 07/01/06 150,000 171,181
Swiss Bank Corp. NY, 7.00%, 10/15/15 650,000 779,995
Wachovia Corp., 6.605%, 10/01/25 150,000 168,993
Wells Fargo & Co., 5.10%, 05/06/18 350,000 362,590
Wells Fargo & Co., 6.875%, 04/01/06 150,000 167,509
------------
4,624,046
------------
BUILDING PRODUCTS (0.35%)
Vulcan Materials Co., 6.40%, 02/01/06 200,000 216,880
------------
CHEMICALS (1.32%)
Dow Chemical Co., 6.85%, 08/15/13 150,000 166,213
Du Pont EI de Nemours & Co., 8.125%, 03/15/04 150,000 154,608
Lubrizol Corp., 5.875%, 12/01/08 150,000 163,600
Rohm & Haas Co., 6.95%, 07/15/04 150,000 155,820
Sherwin-Williams Co., 6.85%, 02/01/07 150,000 169,791
------------
810,032
------------
COMPUTER HARDWARE (0.54%)
Hewlett-Packard Co., 7.15%, 06/15/05 150,000 163,280
International Business Machines Corp.,
5.375%, 02/01/09 150,000 164,225
------------
327,505
------------
CONSUMER PRODUCTS (0.28%)
Clorox Co., 6.125%, 02/01/11 150,000 168,908
------------
COSMETICS & TOILETRIES (0.32%)
Procter & Gamble Co., 8.00%, 10/26/29 150,000 198,028
------------
DIVERSIFIED FINANCIAL SERVICES (9.29%)
American Express Co., 5.50%, 09/12/06 150,000 163,314
Banque Paribas NY, 8.35%, 06/15/07 150,000 175,758
Bear Stearns Cos., Inc., 6.625%, 01/15/04 150,000 152,282
Charles Schwab Corp., 8.05%, 03/01/10 150,000 177,223
CIT Group, Inc., 5.30%, 12/15/07 440,000 457,727
Citigroup, Inc., 5.80%, 03/15/04 150,000 153,093
Citigroup, Inc., 6.75%, 12/01/05 150,000 165,077
Countrywide Home Loans, Inc., 5.50%, 08/01/06 150,000 161,617
Credit Suisse First Boston USA, Inc.,
6.125%, 11/15/11 150,000 164,315
General Electric Capital Corp., 4.00%, 05/30/18 500,000 481,019
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
General Motors Acceptance Corp., 6.125%, 02/01/07 $ 150,000 $ 158,810
General Motors Corp., 7.20%, 01/15/11 150,000 158,061
Goldman Sachs Group, Inc., 5.70%, 09/01/12 500,000 534,855
Goldman Sachs Group, Inc., 6.875%, 01/15/11 150,000 172,477
Household Finance Corp., 6.00%, 05/01/04 150,000 154,086
Household Finance Corp., 6.375%, 10/15/11 150,000 166,776
Household Finance Corp., 6.75%, 05/15/11 150,000 171,076
John Deere Capital Corp., 7.00%, 03/15/12 500,000 584,810
J.P. Morgan & Co., Inc., 7.625%, 09/15/04 150,000 158,710
Lehman Brothers Holdings, Inc., 6.25%, 05/15/06 150,000 165,434
Lehman Brothers, Inc., 6.625%, 02/15/08 150,000 168,663
Merrill Lynch & Co., Inc., 6.15%, 01/26/06 150,000 164,029
Merrill Lynch & Co., Inc., 8.00%, 06/01/07 150,000 172,875
Morgan Stanley, 6.75%, 04/15/11 150,000 170,263
Morgan Stanley Group, Inc., 6.875%, 03/01/07 150,000 171,378
Toyota Motor Credit Corp., 5.50%, 12/15/08 150,000 167,133
------------
5,690,861
------------
DIVERSIFIED MANUFACTURING (0.58%)
Honeywell International, Inc., 7.50%, 3/01/10 150,000 180,393
PPG Industries, Inc., 7.375%, 06/01/16 150,000 176,294
------------
356,687
------------
FOOD & BEVERAGE (2.23%)
Albertson's, Inc., 7.45%, 08/01/29 150,000 169,134
Archer-Daniels-Midland Co., 7.125%, 03/01/13 150,000 178,787
Campbell Soup Co., 6.75%, 02/15/11 150,000 173,643
General Mills, Inc., 6.00%, 02/15/12 150,000 164,547
H.J. Heinz Co., 6.00%, 03/15/08 150,000 166,960
Kellogg Co., 6.60%, 04/01/11 150,000 171,326
Kroger Co., 7.00%, 05/01/18 150,000 172,515
Safeway, Inc., 7.00%, 09/15/07 150,000 169,551
------------
1,366,463
------------
FOREST PRODUCTS & PAPER (0.56%)
International Paper Co., 7.625%, 01/15/07 150,000 171,806
Weyerhaeuser Co., 7.25%, 07/01/13 150,000 171,223
------------
343,029
------------
HEALTHCARE PRODUCTS (0.52%)
Bausch & Lomb, Inc., 6.75%, 12/15/04 150,000 156,187
Baxter International, Inc., 6.625%, 02/15/28 150,000 164,982
------------
321,169
------------
INSURANCE (2.26%)
Allstate Corp., 6.75%, 05/15/18 650,000 753,128
Chubb Corp., 7.125%, 12/15/07 250,000 287,311
Hartford Life, Inc., 7.65%, 06/15/27 150,000 179,132
John Hancock Financial Services, Inc.,
5.625%, 12/01/08 150,000 164,742
------------
1,384,313
------------
MINING (0.29%)
Alcoa, Inc., 7.375%, 08/01/10 150,000 178,159
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
MULTIMEDIA (0.27%)
Time Warner, Inc., 6.875%, 06/15/18 $ 150,000 $ 166,418
------------
PHARMACEUTICALS (0.81%)
Abbott Laboratories, 5.625%, 07/01/06 150,000 164,000
Bristol-Myers Squibb Co., 6.80%, 11/15/26 150,000 168,745
Wyeth, 7.90%, 02/15/05 150,000 162,278
------------
495,023
------------
PIPELINES (0.76%)
Consolidated Natural Gas Co., 6.625%, 12/01/08 150,000 170,507
Duke Capital Corp., 7.50%, 10/01/09 150,000 168,800
El Paso Corp., 7.00%, 05/15/11 150,000 123,750
------------
463,057
------------
REAL ESTATE INVESTMENT TRUST (0.55%)
EOP Operating LP, 7.25%, 02/15/18 150,000 172,655
Simon Property Group LP, 6.375%, 11/15/07 150,000 166,871
------------
339,526
------------
RESEARCH & DEVELOPMENT (1.08%)
Science Applications International Corp.,
6.25%, 07/01/12 600,000 663,403
------------
RETAIL STORES (0.28%)
Sears Roebuck Acceptance Corp., 7.00%, 02/01/11 150,000 171,642
------------
TELECOMMUNICATIONS (1.37%)
AT&T Corp., 7.50%, 06/01/06 150,000 168,665
Bellsouth Capital Funding, 7.75%, 02/15/10 150,000 182,139
GTE Florida, Inc., 6.86%, 02/01/28, 150,000 162,530
Motorola, Inc., 6.50%, 03/01/08 150,000 163,500
Pacific Bell, 6.25%, 03/01/05 150,000 159,619
------------
836,453
------------
TRANSPORTATION (0.87%)
Norfolk Southern Corp., 7.35%, 05/15/07 150,000 171,519
Union Pacific Corp., 6.40%, 02/01/06 150,000 163,491
United Parcel Service, Inc., 8.375%, 04/01/20 150,000 196,562
------------
531,572
------------
UTILITIES (2.82%)
Carolina Power & Light Co., 5.95%, 03/01/09 150,000 166,430
Constellation Energy Group, Inc., 6.35%, 04/01/07 150,000 165,178
DTE Energy Co., 6.45%, 06/01/06 150,000 163,471
Emerson Electric Co., 5.85%, 03/15/09 150,000 168,351
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
Florida Power & Light Co., 7.00%, 09/01/25 $ 150,000 $ 155,968
Penn Electric Co., 6.125%, 04/01/09 125,000 139,580
Public Service Electric & Gas, 7.00%, 09/01/24 150,000 154,660
Southern Union Co., 7.60%, 02/01/24 150,000 165,918
Tennessee Valley Authority, 6.00%, 03/15/13 250,000 281,884
Wisconsin Energy Corp., 6.50%, 04/01/11 150,000 167,995
------------
1,729,435
------------
TOTAL CORPORATE BONDS (COST $22,056,675) 23,820,729
------------
FOREIGN BONDS (6.69%)
FOREIGN CORPORATE BONDS (3.08%)
Barclays Bank Plc, 7.40%, 12/15/09 150,000 181,896
Bell Canada, 9.50%, 10/15/10 150,000 189,710
British Telecommunications Plc, 8.375%, 12/15/10 150,000 184,564
Hydro-Quebec, 6.30%, 05/11/11 175,000 200,544
Inter-American Development Bank, 6.125%, 03/08/06 175,000 192,723
International Bank for Reconstruction &
Development, 7.00%, 01/27/05 175,000 187,995
Landesbank Baden-Wuerttemberg Girozentrale,
7.625%, 02/01/23 175,000 218,974
National Westminster Bank Plc, 7.375%, 10/01/09 150,000 178,047
Norsk Hydro ASA, 6.70%, 01/15/18 150,000 170,999
Telefonica Europe BV, 7.75%, 09/15/10 150,000 180,302
------------
1,885,754
------------
FOREIGN GOVERNMENT REGIONAL (3.61%)
Canadian Government Bond, 6.375%, 11/30/04 175,000 185,559
Finland Government International Bond,
7.875%, 07/28/04 175,000 184,841
Italy Government International Bond,
7.25%, 02/07/05 175,000 188,035
Portugal Government International Bond,
5.75%, 10/08/03 175,000 175,117
Province of British Columbia, 5.375%, 10/29/08 175,000 192,497
Province of Manitoba, 4.25%, 11/20/06 175,000 184,671
Province of New Brunswick, 7.625%, 06/29/04 175,000 183,220
Province of Nova Scotia, 7.25%, 07/27/13 100,000 122,602
Province of Ontario, 5.50%, 10/01/08 175,000 192,662
Province of Quebec, 6.50%, 01/17/06 175,000 192,014
Province of Saskatchewan, 8.00%, 02/01/13 175,000 222,143
Spain Government International Bond,
7.00%, 07/19/05 175,000 191,566
------------
2,214,927
------------
TOTAL FOREIGN BONDS (COST $3,702,933) 4,100,681
------------
U.S. TREASURY OBLIGATIONS (34.84%)
TREASURY BONDS (17.45%)
3.625%, 05/15/13 500,000 490,761
5.75%, 08/15/10 2,000,000 2,289,766
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
BOND FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
--------- -----
6.25%, 08/15/23 $ 2,250,000 $ 2,630,302
6.75%, 08/15/26 1,000,000 1,243,594
7.50%, 11/15/16 1,000,000 1,305,391
7.875%, 02/15/21 2,000,000 2,732,890
------------
10,692,704
------------
TREASURY NOTES (17.39%)
2.625%, 05/15/08 2,000,000 1,994,766
3.50%, 11/15/06 4,000,000 4,179,532
4.75%, 11/15/08 1,600,000 1,742,813
5.625%, 02/15/06 1,000,000 1,092,852
6.50%, 08/15/05 1,500,000 1,641,621
------------
10,651,584
------------
TOTAL U.S. TREASURY OBLIGATIONS (COST $20,351,883) 21,344,288
------------
SHORT TERM INVESTMENTS (0.95%)
Fifth Third Institutional Government
Money Market Fund, 0.95% ** (COST $583,682) 583,682 583,682
------------
TOTAL INVESTMENTS (COST $56,764,106) (98.87%) $ 60,575,186
OTHER ASSETS IN EXCESS OF LIABILITIES (1.13%) 691,739
------------
NET ASSETS (100%) $ 61,266,925
============
Cost for federal income tax at September 30, 2003 was
$56,772,276 and net unrealized appreciation consisted of:
Gross unrealized appreciation $ 4,019,545
Gross unrealized depreciation (216,635)
------------
Net unrealized appreciation $ 3,802,910
============
** Variable rate security; rate shown represents the rate at September 30, 2003.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCK (97.73%)
ADVERTISING (0.27%)
Interpublic Group Cos., Inc. 3,084 $ 43,546
Omnicom Group 2,390 171,722
------------
215,268
------------
AEROSPACE/DEFENSE (1.68%)
Boeing Co. 7,379 253,321
General Dynamics Corp. 2,390 186,563
Goodrich Corp. 631 15,295
Lockheed Martin Corp. 4,276 197,337
Northrop Grumman Corp. 2,308 198,996
Raytheon Co. 3,513 98,364
Rockwell Collins, Inc. 1,096 27,674
United Technologies Corp. 4,950 382,536
------------
1,360,086
------------
AGRICULTURE (0.05%)
Monsanto Co. 1,675 40,100
------------
AIRLINES (0.17%)
Delta Air Lines, Inc. 2,260 30,058
Southwest Airlines Co. 5,949 105,297
------------
135,355
------------
APPAREL (0.37%)
Jones Apparel Group, Inc. 1,050 31,427
Liz Claiborne, Inc. 870 29,624
Nike, Inc. 2,832 172,242
Reebok International Ltd. 470 15,712
VF Corp. 1,218 47,392
------------
296,397
------------
APPLIANCES (0.14%)
Maytag Corp. 690 17,229
Whirlpool Corp. 1,374 93,116
------------
110,345
------------
AUTO PARTS & EQUIPMENT (0.26%)
Cooper Tire & Rubber Co. 110 1,746
Dana Corp. 945 14,581
Delphi Corp. 2,654 24,019
Goodyear Tire & Rubber Co. 910 5,979
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Johnson Controls, Inc. 1,684 $ 159,306
Visteon Corp. 918 6,059
------------
211,690
------------
AUTOMOBILE MANUFACTURERS (0.60%)
Ford Motor Co. 12,266 132,105
General Motors Corp. 5,214 213,409
Navistar International Corp. * 710 26,469
Paccar, Inc. 1,514 113,081
------------
485,064
------------
BANKS (8.04%)
AmSouth Bancorp 1,820 38,620
Bank of America Corp. 14,408 1,124,400
Bank of New York Co., Inc. 6,578 191,486
Bank One Corp. 10,364 400,569
BB&T Corp. 4,810 172,727
Charter One Financial, Inc. 1,589 48,623
Comerica, Inc. 2,860 133,276
Fifth Third Bancorp 6,142 339,468
First Tennessee National Corp. 1,210 51,377
FleetBoston Financial Corp. 9,052 272,918
Golden West Financial Corp. 2,690 240,782
Huntington Bancshares, Inc. 1,162 22,996
Keycorp 2,860 73,130
Marshall & Ilsley Corp. 2,140 67,453
Mellon Financial Corp. 3,540 106,696
National City Corp. 4,984 146,829
North Fork Bancorporation, Inc. 1,350 46,912
Northern Trust Corp. 2,540 107,798
PNC Financial Services Group, Inc. 3,665 174,381
Regions Financial Corp. 2,060 70,555
SouthTrust Corp. 2,480 72,887
State Street Corp. 3,390 152,550
SunTrust Banks, Inc. 4,115 248,423
Synovus Financial Corp. 1,875 46,856
Union Planters Corp. 1,685 53,313
U.S. Bancorp 15,216 365,032
Wachovia Corp. 12,388 510,262
Washington Mutual, Inc. 8,266 325,432
Wells Fargo & Co. 15,634 805,151
Zions Bancorp 1,770 98,854
------------
6,509,756
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
BIOTECHNOLOGY (1.29%)
Amgen, Inc. * 11,549 $ 745,719
Biogen, Inc. * 1,560 59,639
Chiron Corp. * 2,110 109,066
Genzyme Corp. * 2,110 97,587
Millipore Corp. * 710 32,703
------------
1,044,714
------------
BUILDING MATERIALS (0.32%)
American Standard Cos., Inc. * 1,440 121,320
Masco Corp. 3,660 89,597
Vulcan Materials Co. 1,220 48,690
------------
259,607
------------
CHEMICALS (1.63%)
Air Products & Chemicals, Inc. 2,398 108,150
Ashland, Inc. 715 23,488
Dow Chemical Co. 7,476 243,269
Du Pont EI de Nemours & Co. 9,544 381,855
Eastman Chemical Co. 910 30,485
Ecolab, Inc. 2,692 67,973
Engelhard Corp. 674 18,650
Great Lakes Chemical Corp. 190 3,821
Hercules, Inc. * 393 4,453
International Flavors & Fragrances, Inc. 1,436 47,503
PPG Industries, Inc. 2,205 115,145
Praxair, Inc. 2,091 129,537
Rohm & Haas Co. 1,838 61,481
Sherwin-Williams Co. 1,066 31,351
Sigma-Aldrich Corp. 1,028 53,394
------------
1,320,555
------------
COMMERCIAL SERVICES (1.02%)
Apollo Group, Inc. * 1,870 123,476
Cendant Corp. * 7,796 145,707
Concord EFS, Inc. * 3,550 48,528
Convergys Corp. * 1,170 21,458
Deluxe Corp. 887 35,604
Equifax, Inc. 1,290 28,728
H&R Block, Inc. 1,740 75,081
McKesson Corp. 2,699 89,850
Moody's Corp. 1,916 105,323
Paychex, Inc. 3,572 121,198
R.R. Donnelley & Sons Co. 1,238 30,789
------------
825,742
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMPUTER HARDWARE (4.14%)
Apple Computer, Inc. * 3,098 $ 63,912
Dell Computer Corp. * 22,852 763,028
EMC Corp. * 17,118 216,200
ESC Seagate Technology * 1,255 --
Gateway, Inc. * 1,720 9,735
Hewlett-Packard Co. 25,349 490,757
International Business Machines Corp. 16,166 1,427,943
Lexmark International, Inc. * 1,570 98,926
NCR Corp. * 1,240 39,296
Network Appliance, Inc. * 2,850 58,510
Sun Microsystems, Inc. * 19,194 63,532
Veritas Software Corp. * 3,849 120,859
------------
3,352,698
------------
COMPUTER SERVICES (0.44%)
Computer Sciences Corp. * 2,058 77,319
Electronic Data Systems Corp. 4,370 88,274
Sungard Data Systems, Inc. * 2,510 66,038
Symantec Corp. * 1,610 101,462
Unisys Corp. * 1,740 23,542
------------
356,635
------------
COMPUTER SOFTWARE (5.38%)
Adobe Systems, Inc. 2,360 92,654
Autodesk, Inc. 830 14,127
Automatic Data Processing 5,900 211,515
BMC Software, Inc. * 1,800 25,074
Citrix Systems, Inc. * 1,310 28,925
Computer Associates International, Inc. 4,945 129,114
Compuware Corp. * 1,730 9,273
Electronic Arts, Inc. * 1,630 150,335
First Data Corp. 6,932 277,003
Fiserv, Inc. * 2,035 73,728
IMS Health, Inc. 1,742 36,756
Intuit, Inc. * 2,240 108,058
Mercury Interactive Corp. * 1,120 50,859
Microsoft Corp. 92,728 2,576,911
Novell, Inc. * 1,439 7,670
Oracle Corp. * 42,112 472,497
Parametric Technology Corp. * 1,200 3,744
Peoplesoft, Inc. * 2690 48,931
Siebel Systems, Inc. * 3540 34,409
------------
4,351,583
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
CONSUMER PRODUCTS (0.15%)
American Greetings * 550 $ 10,687
Clorox Co. 2,312 106,051
Tupperware Corp. 581 7,774
------------
124,512
------------
CONTAINERS (0.14%)
Ball Corp. 660 35,640
Bemis Co. 745 33,004
Pactiv Corp. * 768 15,575
Sealed Air Corp. * 705 33,297
------------
117,516
------------
COSMETICS & TOILETRIES (2.83%)
Alberto-Culver Co. 1,120 65,878
Avon Products, Inc. 2,568 165,790
Colgate-Palmolive Co. 5,598 312,872
Gillette Co. 8,908 284,878
Kimberly-Clark Corp. 5,546 284,621
Procter & Gamble Co. 12,682 1,177,143
------------
2,291,182
------------
DISTRIBUTION/WHOLESALE (0.17%)
Genuine Parts Co. 1,840 58,843
W.W. Grainger, Inc. 1,750 83,213
------------
142,056
------------
DIVERSIFIED FINANCIAL SERVICES (8.39%)
American Express Co. 11,788 531,167
Bear Stearns Cos., Inc. 1,267 94,772
Capital One Financial Corp. 2,230 127,199
Charles Schwab Corp. 8,615 102,605
Citigroup, Inc. 45,276 2,060,511
Countrywide Financial Corp. 1,480 115,854
Fannie Mae 9,261 650,122
Federated Investors, Inc. 470 13,019
Franklin Resources, Inc. 2,460 108,757
Freddie Mac 6,418 335,982
Goldman Sachs Group, Inc. 4,910 411,949
Janus Capital Group, Inc. 1,160 16,205
J.P. Morgan Chase & Co. 17,625 605,066
Lehman Brothers Holdings, Inc. 2,480 171,318
MBNA Corp. 10,137 231,124
Merrill Lynch & Co. 8,514 455,754
Morgan Stanley 9,914 500,260
Providian Financial Corp. * 1,622 19,123
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
SLM Corp. 4,740 $ 184,670
T. Rowe Price Group, Inc. 1,300 53,638
------------
6,789,095
------------
DIVERSIFIED MACHINERY (0.64%)
Caterpillar, Inc. 3,592 247,273
Cummins, Inc. 640 28,435
Deere & Co. 2,588 137,966
Dover Corp. 2,020 71,447
Rockwell Automation, Inc. 1,296 34,020
------------
519,141
------------
DIVERSIFIED MANUFACTURING (5.65%)
3M Co. 8,904 614,999
Cooper Industries Ltd. 1,334 64,072
Crane Co. 250 5,853
Danaher Corp. 1,950 144,027
Eaton Corp. 1,580 140,020
General Electric Co. 85,718 2,555,254
Honeywell International, Inc. 7,198 189,667
Illinois Tool Works, Inc. 4,036 267,425
Ingersoll-Rand Co. 2,013 107,574
ITT Industries, Inc. 1,348 80,664
Pall Corp. 539 12,095
Textron, Inc. 1,650 65,092
Tyco International Ltd. 15,864 324,102
------------
4,570,844
------------
E-COMMERCE SERVICES (0.44%)
eBay, Inc. * 6,100 325,130
Monster Worldwide, Inc. * 1,120 28,202
------------
353,332
------------
ELECTRIC PRODUCTS (0.39%)
Emerson Electric Co. 5,026 264,619
Molex, Inc. 1,692 48,374
------------
312,993
------------
ELECTRONIC COMPONENTS (0.38%)
Agilent Technologies, Inc. * 3,860 85,345
American Power Conversion 900 15,426
Jabil Circuit, Inc. * 1,530 39,856
Parker Hannifin Corp. 1,501 67,095
Power-One, Inc. * 350 3,602
Sanmina-SCI Corp. * 2,520 24,444
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Solectron Corp. * 3,140 $ 18,369
Symbol Technologies, Inc. 1,555 18,582
Tektronic, Inc. 390 9,653
Thermo Electron Corp. * 1,072 23,262
Thomas & Betts Corp. * 205 3,249
------------
308,883
------------
ENGINEERING & CONSTRUCTION (0.04%)
Fluor Corp. 890 33,224
------------
FOOD (2.09%)
Albertson's, Inc. 3,432 70,596
Archer-Daniels-Midland Co. 5,711 74,871
Campbell Soup Co. 5,044 133,666
General Mills, Inc. 4,378 206,072
H.J. Heinz Co. 5,277 180,896
Hershey Foods Corp. 2,620 190,422
Kellogg Co. 4,980 166,083
Kroger Co. * 5,774 103,181
McCormick & Co. 900 24,678
Safeway, Inc. * 4,430 101,624
Supervalu, Inc. 1,480 35,313
Sysco Corp. 5,946 194,494
Wm. Wrigley Jr. Co. 1,150 11,098
Winn-Dixie Stores, Inc. 3,620 200,186
------------
1,693,180
------------
FOREST & PAPER PRODUCTS (0.56%)
Boise Cascade Corp. 165 4,554
Georgia-Pacific Corp. 1,636 39,657
International Paper Co. 4,401 171,727
Louisiana-Pacific Corp. * 330 4,547
MeadWestvaco Corp. 1,512 38,556
Temple-Inland, Inc. 820 39,811
Weyerhaeuser Co. 2,674 156,295
------------
455,147
------------
HEALTHCARE PRODUCTS (3.79%)
Bausch & Lomb, Inc. 725 32,009
Baxter International, Inc. 5,306 154,192
Becton Dickinson & Co. 2,490 89,939
Biomet, Inc. 2,332 78,379
Boston Scientific Corp. * 3,792 241,930
C.R. Bard, Inc. 1,020 72,420
Guidant Corp. 3,196 149,733
Johnson & Johnson 26,729 1,323,620
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Medtronic, Inc. 11,342 $ 532,167
St. Jude Medical, Inc. * 1,884 101,303
Stryker Corp. 2,370 178,485
Zimmer Holdings, Inc.* 2,090 115,159
------------
3,069,336
------------
HEALTHCARE SERVICES (0.32%)
Anthem, Inc. * 1,680 119,834
Health Management Associates, Inc. 1,740 37,949
Manor Care, Inc. 815 24,450
Quest Diagnostics * 1,320 80,045
------------
262,278
------------
HOME BUILDERS (0.22%)
Centex Corp. 930 72,428
KB HOME 730 43,552
Pulte Homes, Inc. 890 60,529
------------
176,509
------------
HOME FURNISHINGS (0.10%)
Leggett & Platt, Inc. 1,170 25,307
Newell Rubbermaid 2,588 56,082
------------
81,389
------------
HOTELS & MOTELS (0.28%)
Hilton Hotels Corp. 1,880 30,494
Marriott International, Inc. 2,803 120,613
Starwood Hotels & Resorts Worldwide, Inc. 2,210 76,908
------------
228,015
------------
HUMAN RESOURCES (0.03%)
Robert Half International, Inc. * 1,170 22,815
------------
INSTRUMENTS/CONTROLS (0.10%)
Applera Corp - Applied Biosystems Group 1,960 43,728
PerkinElmer, Inc. 690 10,564
Waters Corp. * 1,070 29,350
------------
83,642
------------
INSURANCE (4.87%)
ACE Ltd. 2,030 67,152
Aflac, Inc. 4,400 142,120
Allstate Corp. 5,736 209,536
AMBAC Financial Group, Inc. 1,420 90,880
American International Group 23,379 1,348,968
AON Corp. 2,334 48,664
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Chubb Corp. 2,140 $ 138,843
Cincinnati Financial Corp. 1,470 58,741
Hartford Financial Services Group, Inc. 3,038 159,890
Jefferson-Pilot Corp. 2,118 93,997
John Hancock Financial Services, Inc. 2,400 81,120
Lincoln National Corp. 1,778 62,906
Marsh & McLennan Cos., Inc. 5,576 265,473
MBIA, Inc. 1,670 91,800
Metlife, Inc. 6,040 169,422
MGIC Investment Corp. 1,340 69,774
Principal Financial Group 2,600 80,574
Progressive Corp. 2,220 153,424
Prudential Financial, Inc. 4,600 171,856
Safeco Corp. 1,109 39,103
St. Paul Cos 1,920 71,098
Torchmark Corp. 1,340 54,458
Travelers Property Casualty Corp. 6,262 99,441
UnumProvident Corp. 2,140 31,608
XL Capital Ltd. 1,870 144,813
------------
3,945,661
------------
LEISURE & RECREATIONAL PRODUCTS (0.14%)
Brunswick Corp. 894 22,958
Hasbro, Inc. 1,085 20,268
Mattel, Inc. 3,571 67,706
------------
110,932
------------
LINEN SUPPLY (0.08%)
Cintas Corp. 1,820 67,049
------------
MEDIA (3.05%)
AOL Time Warner, Inc. * 36,800 556,048
Clear Channel Communications, Inc. 6,110 234,013
Comcast Corp. * 19,582 604,692
Dow Jones & Co., Inc. 1,535 72,682
Gannett Co., Inc. 4,004 310,550
Knight-Ridder, Inc. 1,949 129,998
McGraw-Hill Cos., Inc. 3,030 188,254
Meredith Corp. 1,038 47,924
New York Times Co. 1,964 85,355
Tribune Co. 3,497 160,512
Univision Communications, Inc. * 2,380 75,993
------------
2,466,021
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
METAL FABRICATION (0.01%)
Worthington Industries 480 $ 6,029
------------
MINING (0.49%)
Alcoa, Inc. 7,038 184,114
Freeport-McMoRan Copper & Gold, Inc. 750 24,825
Newmont Mining Corp. 3,488 136,346
Phelps Dodge Corp. * 1,025 47,970
------------
393,255
------------
MOTORCYCLE MANUFACTURER (0.20%)
Harley-Davidson, Inc. 3,300 159,060
------------
OFFICE AUTOMATION & EQUIPMENT (0.33%)
Avery Dennison Corp. 1,711 86,440
Pitney Bowes, Inc. 3,394 130,058
Xerox Corp. * 5,182 53,167
------------
269,665
------------
OIL & GAS (5.81%)
Amerada Hess Corp. 1,338 67,034
Anadarko Petroleum Corp. 2,163 90,327
Apache Corp. 1,812 125,644
Baker Hughes, Inc. 2,370 70,128
BJ Services Co. * 1,030 35,195
Burlington Resources, Inc. 1,777 85,651
ChevronTexaco Corp. 10,939 781,592
ConocoPhillips 7,054 386,207
Devon Energy Corp. 2,210 106,500
EOG Resources, Inc. 750 31,305
Exxon Mobil Corp. 57,692 2,111,527
Halliburton Co. 2,688 65,184
Kerr-McGee Corp. 1,250 55,800
Marathon Oil Corp. 2,346 66,861
Nabors Industries Ltd. * 1,200 44,712
Nicor, Inc. 780 27,409
Noble Corp. * 790 26,852
Occidental Petroleum Corp. 2,163 76,202
Peoples Energy Corp. 530 21,931
Rowan Cos., Inc. * 70 1,721
Schlumberger Ltd. 6,100 295,240
Sunoco, Inc. 840 33,784
Transocean, Inc. * 2,037 40,740
Unocal Corp. 1,662 52,386
------------
4,699,932
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
PHARMACEUTICALS (7.89%)
Abbott Laboratories 14,206 $ 604,465
Allergan, Inc. 1,720 135,416
AmerisourceBergan Corp. 1,340 72,427
Bristol-Myers Squibb Co. 16,448 422,056
Cardinal Health, Inc. 4,480 261,587
Eli Lilly & Co. 10,625 631,125
Forest Laboratories, Inc. * 3,530 181,619
King Pharmaceuticals, Inc. * 1,736 26,300
Medco Health Solutions, Inc. * 2,311 59,924
Medimmune, Inc. * 2,300 75,923
Merck & Co., Inc. 20,600 1,042,772
Pfizer, Inc. 68,505 2,081,182
Schering-Plough Corp. 12,280 187,147
Watson Pharmaceuticals, Inc. * 1,050 43,775
Wyeth 12,200 562,420
------------
6,388,138
------------
PHOTOGRAPHY EQUIPMENT (0.09%)
Eastman Kodak Co. 3,514 73,583
------------
PIPELINES (0.20%)
Dynegy, Inc. 2,570 9,252
El Paso Corp. 3,821 27,893
Kinder Morgan, Inc. 1,690 91,277
Williams Cos., Inc. 3,280 30,898
------------
159,320
------------
REAL ESTATE INVESTMENT TRUSTS (0.31%)
Apartment Investment & Management Co. 1,060 41,722
Equity Office Properties Trust 2,720 74,882
Equity Residential Properties Trust 1,540 45,091
Plum Creek Timber Co., Inc. 710 18,062
Simon Property Group, Inc. 1,710 74,522
------------
254,279
------------
RETAIL STORES (6.97%)
Autonation, Inc. * 810 14,207
Autozone, Inc. * 1,297 116,120
Bed Bath & Beyond, Inc. * 2,910 111,104
Best Buy Co., Inc. * 3,065 145,649
Big Lots, Inc. * 450 7,114
Circuit City Stores, Inc. 1,160 11,055
Costco Wholesale Corp. * 4,060 126,185
CVS Corp. 3,494 108,524
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Dillard's, Inc. 370 $ 5,173
Dollar General Corp. 2,661 53,220
Family Dollar Stores 1,710 68,212
Federated Department Stores 2,187 91,635
Gap, Inc. 6,795 116,330
Home Depot, Inc. 20,149 641,746
J.C. Penney Co., Inc. Holding Co. 2,047 43,744
Kohl's Corp. * 3,530 188,855
Lowe's Cos., Inc. 7,436 385,928
Ltd. Brands 3,540 53,383
May Department Stores Co. 3,038 74,826
Nordstrom, Inc. 780 19,352
Office Depot, Inc. * 1,900 26,695
RadioShack Corp. 1,660 47,161
Sears Roebuck and Co. 2,994 130,928
Staples, Inc. * 3,650 86,687
Target Corp. 8,458 318,275
Tiffany & Co. 1,500 55,995
TJX Cos., Inc. 3,730 72,437
Toys R US, Inc. * 1,181 14,207
Walgreen Co. 9,086 2,225,511
Wal-Mart Stores, Inc. 39,848 278,395
------------
5,638,653
------------
SEMICONDUCTORS (3.93%)
Advanced Micro Devices, Inc. * 2,038 22,642
Altera Corp. * 2,870 54,243
Analog Devices, Inc. * 3,500 133,070
Applied Materials, Inc. * 13,330 241,806
Applied Micro Circuits Corp. * 1,380 6,721
Broadcom Corp. * 2,520 67,082
Intel Corp. 56,494 1,554,150
Kla-Tencor Corp. * 2,260 116,164
Linear Technology Corp. 3,200 114,592
LSI Logic Corp. * 1,820 16,361
Maxim Integrated Products 3,390 133,905
Micron Technology, Inc. * 4,866 65,302
National Semiconductor Corp. * 1,580 51,018
Novellus Systems, Inc. * 1,720 58,050
Nvidia Corp. * 1,370 21,798
PMC - Sierra, Inc.* 1,340 17,676
QLogic Corp. * 1,230 57,822
Teradyne, Inc. * 1,510 28,086
Texas Instruments, Inc. 14,548 331,694
Xilinx, Inc. * 3,000 85,530
------------
3,177,712
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
STEEL PRODUCERS (0.08%)
Allegheny Technologies, Inc. 446 $ 2,921
Nucor Corp. 1,201 55,102
United States Steel Corp. 413 7,591
------------
65,614
------------
TELECOMMUNICATIONS (5.68%)
ADC Telecommunications, Inc. * 3,790 8,831
Alltel Corp. 3,958 183,414
Andrew Corp. * 362 4,449
AT&T Corp. 6,528 140,678
AT&T Wireless Services, Inc. * 18,774 153,571
Avaya, Inc. * 1,474 16,067
BellSouth Corp. 15,986 378,548
CenturyTel, Inc. 1,450 49,141
CIENA Corp. * 1,870 11,052
Cisco Systems, Inc. * 59,468 1,162,005
Citizens Communications Co. * 1,020 11,434
Comverse Technology, Inc. * 1,350 20,196
Corning * 8,729 82,227
JDS Uniphase * 6,810 24,516
Lucent Technologies, Inc. * 17,691 38,213
Motorola, Inc. 16,738 200,354
Nextel Communications, Inc. * 7,960 156,732
Qualcomm, Inc. 7,080 294,811
Qwest Communications International * 9,996 33,986
SBC Communications, Inc. 28,085 624,891
Scientific-Atlanta, Inc. 1,330 41,430
Sprint Corp.-FON Group 5,560 31,859
Sprint Corp.-PCS Group * 7,452 112,525
Tellabs, Inc. * 2,172 14,748
Verizon Communications, Inc. 24,771 803,571
------------
4,599,249
------------
TOOLS (0.11%)
Black & Decker Corp. 1,011 40,996
Snap-On, Inc. 580 16,037
Stanley Works 1,130 33,358
------------
90,391
------------
TRANSPORTATION (1.58%)
Burlington Northern Santa Fe Corp. 2,864 82,684
CSX Corp. 1,865 54,551
FedEx Corp. 3,246 209,140
Norfolk Southern Corp. 2,506 46,361
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Union Pacific Corp. 3,463 $ 201,443
United Parcel Service, Inc. 10,740 685,212
------------
1,279,391
------------
TRAVEL SERVICES (0.04%)
Sabre Holdings Corp. 1,624 34,900
------------
TRUCKING & LEASING (0.02%)
Ryder System, Inc. 440 12,901
------------
UTILITIES (3.16%)
AES Corp. * 3,060 22,705
Allegheny Energy, Inc. 1,800 16,452
Ameren Corp. 2,328 99,894
American Electric Power Co., Inc. 3,864 115,920
Calpine Corp. * 1,780 8,704
Centerpoint Energy, Inc. 2,430 22,283
Cinergy Corp. 1,774 65,106
CMS Energy Corp. 630 4,643
Consolidated Edison, Inc. 2,559 104,305
Constellation Energy Group, Inc. 1,379 49,341
Dominion Resources, Inc. 4,154 257,133
DTE Energy Co. 2,159 79,646
Duke Energy Corp. 7,266 129,407
Edison International * 1,826 34,877
Entergy Corp. 2,905 157,306
Exelon Corp. 4,134 262,509
FirstEnergy Corp. 2,875 91,712
FPL Group, Inc. 3,219 203,441
KeySpan Corp. 1,650 57,882
Nisource, Inc. 1,300 25,974
PG&E Corp. * 3,259 77,890
Pinnacle West Capital Corp. 1,160 41,180
PPL Corp. 1,675 68,591
Progress Energy, Inc. 2,774 123,332
Public Service Enterprise Group, Inc. 2,777 116,634
Sempra Energy 1,365 40,076
Southern Co. 5,900 172,988
TECO Energy, Inc. 710 9,812
TXU Corp. 2,551 60,102
Xcel Energy, Inc. 2,250 34,808
------------
2,554,653
------------
WASTE DISPOSAL (0.18%)
Allied Waste Industries, Inc. * 640 6,912
Waste Management, Inc. 5,183 135,639
------------
142,551
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
TOTAL COMMON STOCK (COST $92,701,077) $ 79,099,623
------------
MISCELLANEOUS INVESTMENTS (1.48%)
SPDR Trust Series 1 (COST $1,235,974) 12,000 1,199,040
------------
SHORT TERM INVESTMENTS (0.59%)
Fifth Third Institutional Government Money
Market Fund, 0.95% ** (COST $474,269) 474,269 474,269
------------
TOTAL INVESTMENTS (COST $94,411,284) (99.80%) $ 80,772,932
OTHER ASSETS IN EXCESS OF LIABILITIES, (0.20%) 161,124
------------
NET ASSETS (100%) $ 80,934,056
============
Cost for federal income tax at September 30, 2003 was
$94,525,896 and net unrealized depreciation consisted of:
Gross unrealized appreciation $ 4,648,072
Gross unrealized depreciation (18,401,036)
------------
Net unrealized depreciation $(13,752,964)
============
* Non-income producing investment
** Variable rate security; rate shown represents the rate at September 30, 2003.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCK (98.14%)
ADVERTISING (0.25%)
Advo, Inc. * 1,555 $ 64,735
------------
AEROSPACE/DEFENSE (1.61%)
AAR Corp. * 1,332 10,683
Alliant Techsystems, Inc. * 2,777 133,435
Armor Holdings, Inc. * 1,490 24,958
Curtiss-Wright Corp. 1,090 76,976
DRS Technologies, Inc. * 1,480 35,712
EDO Corp. 1,080 21,870
Esterline Technologies Corp. * 1,080 20,833
GenCorp, Inc. 1,490 13,335
Kaman Corp. 1,053 13,647
Teledyne Technologies, Inc. * 1,600 23,280
Triumph Group, Inc. * 1,180 35,164
------------
409,893
------------
AGRICULTURE (0.22%)
Delta & Pine Land Co. 2,406 55,362
------------
AIRLINES (0.46%)
Atlantic Coast Airlines Holdings, Inc. * 2,510 21,360
Frontier Airlines, Inc. * 1,550 25,513
Mesa Air Group, Inc. * 910 10,101
Skywest, Inc. 3,440 59,581
------------
116,555
------------
APPAREL (1.51%)
Gymboree Corp. * 1,330 18,740
Haggar Corp. 640 9,888
Kellwood Co. 1,310 47,147
K-Swiss, Inc. 2,070 69,241
Oshkosh B'Gosh, Inc. 1,010 25,977
Oxford Industries, Inc. 910 58,422
Phillips-Van Heusen 1,310 19,663
Quiksilver, Inc. * 3,520 56,144
Russell Corp. 1,380 22,494
Stride Rite Corp. 1,700 18,360
Wolverine World Wide, Inc. 1,948 37,791
------------
383,867
------------
APPLIANCES (0.06%)
Applica, Inc. 1,060 6,413
Salton, Inc. * 810 8,059
------------
14,472
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
AUTO PARTS & EQUIPMENT (0.18%)
Midas, Inc. * 1,150 $ 15,134
Standard Motor Products, Inc. 1,746 17,635
Tower Automotive, Inc. * 2,800 12,600
------------
45,369
------------
AUTOMOBILE MANUFACTURERS (0.55%)
Oshkosh Truck Corp. 2,900 114,869
Wabash National Corp. * 1,560 24,882
------------
139,751
------------
BANKS (5.68%)
Boston Private Financial Holdings, Inc. 1,390 32,748
Chittenden Corp. 2,565 76,309
Community First Bankshares, Inc. 2,500 66,075
East-West Bancorp, Inc. 2,120 90,630
First Bancorp Puerto Rico 2,785 85,639
First Midwest Bancorp, Inc. 3,256 96,737
First Republic Bank 1,260 38,846
Fremont General Corp. 3,842 48,832
GBC Bancorp 1,120 42,952
Hudson United Bancorp 3,697 130,023
Irwin Financial Corp. 1,580 38,394
Provident Bankshares Corp. 1,726 48,760
Riggs National Corp. 1,286 20,255
South Financial Group, Inc. 2,570 63,967
Southwest Bancorp of Texas, Inc. 2,740 100,037
Sterling Bancshares, Inc. 1,080 12,884
Susquehanna Bancshares, Inc. 2,245 57,696
Trustco Bank Corp. NY 2,534 31,320
UCBH Holdings, Inc. 3,250 98,248
United Bankshares, Inc. 3,180 95,241
Whitney Holding Corp. 3,257 110,738
Wintrust Financial Corp. 1,560 58,765
------------
1,445,096
------------
BATTERY SYSTEM ( 0.04%)
Wilson Greatbatch Technologies * 280 10,094
------------
BIOTECHNOLOGY (0.71%)
Arqule, Inc. * 960 4,416
Cryolife, Inc. 1,105 6,807
Enzo Biochem, Inc. * 1,858 36,250
Integra LifeSciences Holdings Corp. * 1,670 47,244
Osteotech, Inc. * 610 4,996
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Possis Medical, Inc. * 860 $ 13,416
Regeneron Pharmaceutical, Inc. * 2,920 51,596
Savient Pharmaceuticals, Inc. * 3,310 16,716
------------
181,441
------------
BUILDING MATERIALS (1.42%)
Apogee Enterprises, Inc. 1,540 15,893
Butler Manufacturing Co. * 855 12,987
ElkCorp 1,160 27,330
Florida Rock Industries, Inc. 2,320 115,072
Lennox International, Inc. 2,700 39,447
Simpson Manufacturing Co., Inc. * 2,090 85,460
Texas Industries, Inc. 1,540 37,884
Universal Forest Products, Inc. 1,140 27,668
------------
361,741
------------
CHEMICALS (1.05%)
Schulman (A.), Inc. 730 11,578
Arch Chemicals, Inc. 1,290 26,832
HB Fuller Co. 1,840 44,657
Georgia Gulf Corp. 1,950 45,532
MacDermid, Inc. 2,160 57,132
OM Group, Inc. * 1,551 22,707
Omnova Solutions, Inc. * 1,030 3,615
Penford Corp. 570 7,410
Polyone Corp. * 4,310 16,938
Quaker Chemical Corp. 750 17,445
Wellnan, Inc. 1,690 12,692
------------
266,538
------------
COMMERCIAL SERVICES (3.70%)
Aaron Rents, Inc. 2,250 47,138
ABM Industries, Inc. 2,860 40,469
Administaff, Inc. * 1,380 12,268
Angelica Corp. 330 6,270
Arbitron, Inc. * 2,170 76,601
Bowne & Co., Inc. 1,594 23,830
CDI Corp. 1,399 37,815
Central Parking Corp. 2,085 25,541
Coinstar, Inc. * 1,430 19,234
Consolidated Graphics, Inc. * 880 22,378
CPI Corp. 840 15,456
G&K Services, Inc. 1,687 59,045
Heidrick & Struggles, Inc. * 1,100 18,623
Hooper Holmes, Inc. 3,140 20,881
Insurance Auto Auctions, Inc. * 740 8,325
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Kroll, Inc. * 2,510 $ 46,686
Labor Ready, Inc. * 1,810 18,191
MAXIMUS, Inc. * 1,610 55,465
Memberworks, Inc. * 920 29,274
NCO Group, Inc. * 1,540 36,144
On Assignment, Inc. * 1,320 6,970
Paraxel International Corp. * 1,160 17,771
Pharmaceutical Product Development, Inc. * 3,550 85,165
Pre-Paid Legal Services, Inc. * 1,140 26,699
PRG-Schultz International, Inc. * 2,805 15,932
Sourcecorp * 1,220 28,365
Spherion Corp. * 3,956 27,534
Startek, Inc. 1,120 35,840
The Nautilus Group, Inc. 1,630 20,571
Volt Information Sciences, Inc. * 990 16,335
Watson Wyatt & Co. Holdings * 1,820 40,968
------------
941,784
------------
COMMUNICATIONS SERVICES (0.20%)
Webex Communications * 2,630 49,944
------------
COMPUTER HARDWARE (0.33%)
Hutchinson Technology, Inc. * 1,850 61,235
Talx Corp. 940 23,143
------------
84,378
------------
COMPUTER SERVICES (1.20%)
CACI International, Inc. * 2,130 91,271
Carreker Corp. * 1,050 8,453
Ciber, Inc. * 3,430 26,068
Factset Research Systems, Inc. 2,390 105,997
Manhattan Associates, Inc. * 2,090 54,110
Rainbow Technologies, Inc. * 1,340 12,248
SCM Microsystems, Inc. * 830 6,067
------------
304,214
------------
COMPUTER SOFTWARE (3.83%)
American Management Systems * 2,208 28,152
Ansys, Inc. * 1,290 45,847
Avid Technology, Inc. * 2,010 106,208
Barra, Inc. * 1,530 57,451
Captaris, Inc. * 1,160 6,136
Concerto Software, Inc. * 940 7,990
Concord Communications, Inc. * 990 12,959
eFunds Corp. * 1,900 23,465
EPIQ Systems, Inc. * 920 15,603
Filenet Corp. * 2,312 46,402
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Global Payments, Inc. 2,660 $ 95,760
Hyperion Solutions Corp. * 2,626 75,813
Inter-Tel, Inc. 1,740 42,717
JDA Software Group, Inc. * 1,610 23,941
Mapinfo Corp. * 650 6,233
Midway Games, Inc. * 2,250 6,660
MRO Software, Inc. * 1,340 18,291
Netegrity, Inc. * 1,550 15,515
PC-Tel, Inc. * 1,560 16,645
Phoenix Technologies Ltd. * 1,340 8,402
Pinnacle Systems, Inc. * 3,130 26,386
Progress Software Corp. * 1,906 40,979
Roxio, Inc. * 940 8,150
Serena Software, Inc. * 2,540 47,244
SPSS, Inc. * 1,050 17,714
Take-Two Interactive Software * 2,900 99,093
THQ, Inc. * 2,375 38,997
Verity, Inc. * 2,030 26,532
Zix Corp. * 1,120 9,083
------------
974,368
------------
COMPUTERS-INTEGRATED SYSTEMS (0.96%)
Agilysys, Inc. 1,390 12,190
Brooktrout, Inc. * 1,010 7,777
Catapult Communications Corp. * 790 9,938
Kronos, Inc. * 1,550 82,010
Mercury Computer Systems, Inc. * 1,430 30,502
Micros Systems, Inc. * 1,400 47,810
NYFIX, Inc. * 1,560 8,736
Radiant Systems, Inc. * 1,490 9,327
Radisys Corp. * 1,110 20,024
Systems & Computer Technology Corp. * 1,610 16,792
------------
245,106
------------
CONSUMER PRODUCTS (1.24%)
Fossil, Inc. * 3,160 76,567
Russ Berrie & Co., Inc. 1,948 65,628
Scotts Co. * 2,529 138,336
Wd-40 Co. 1,110 35,176
------------
315,707
------------
DISTRIBUTION/WHOLESALE (1.26%)
Advanced Marketing Services 890 9,096
Bell Microproducts, Inc. * 840 5,468
Hughes Supply, Inc. 1,805 58,572
Owens & Minor, Inc. 1,924 46,368
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
SCP Pool Corp. * 2,890 $ 80,400
United Stationers, Inc. * 2,490 93,823
Watsco, Inc. 1,445 27,614
------------
321,341
------------
DIVERSIFIED FINANCIAL SERVICES (1.58%)
Financial Federal Corp. * 1,360 41,494
Idine Rewards Network Financial 1,060 17,225
Jefferies Group, Inc. 4,260 122,475
New Century Financial Corp. 2,399 67,940
Raymond James Financial, Inc. 3,701 134,531
SWS Group, Inc. 985 19,414
------------
403,079
------------
DIVERSIFIED HOLDINGS (0.15%)
CP HOLDRS 40 2,070
Roto-Rooter, Inc. 1,045 37,150
------------
39,220
------------
DIVERSIFIED MANUFACTURING (1.94%)
Acuity Brands, Inc. 1,680 30,341
AO Smith Corp. 2,192 61,398
Aptargroup, Inc. 2,828 103,759
Barnes Group, Inc. 1,390 36,084
Griffon Corp. * 1,230 22,091
Lydall, Inc. * 90 1,081
Myers Industries, Inc. 1,490 14,915
Roper Industries, Inc. 2,566 111,749
SPS Technologies, Inc. * 1,248 56,160
Standex International Corp. 1,100 26,730
Tredegar Corp. 1,974 29,709
------------
494,017
------------
E-COMMERCE (0.04%)
QRS Corp. * 1,120 9,520
------------
ELECTRICAL COMPONENTS (0.64%)
Advanced Energy Industries, Inc. * 2,280 43,024
Artesyn Technologies, Inc. * 2,390 18,116
Belden, Inc. 1,290 22,536
Brillian Corp. * 287 2,586
C&D Technologies, Inc. 1,520 28,758
Intermagnetics General Corp. * 1,088 24,328
Magnetek, Inc. * 460 2,277
Vicor Corp. * 2,099 20,003
------------
161,628
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
ELECTRONIC COMPONENTS (1.30%)
Bel Fuse, Inc. 920 $ 24,306
Benchmark Electronics, Inc. * 1,800 76,086
CTS Corp. 1,290 15,880
Cubic Corp. 1,650 41,448
DSP Group, Inc. * 1,880 46,831
Methode Electronics 1,910 22,557
Planar Systems, Inc. * 970 20,806
Rogers Corp. * 1,310 40,636
Technitrol, Inc. * 2,330 42,895
------------
331,445
------------
ELECTRONIC INSTRUMENTS (1.56%)
BEI Technologies, Inc. 670 10,452
Coherent, Inc. * 2,030 49,999
Cymer, Inc. * 2,580 106,296
Dionex Corp. * 1,658 65,259
Electro Scientific Industries, Inc. * 1,930 40,665
Meade Instruments Corp. * 1,160 3,851
Photon Dynamics, Inc. * 1,230 35,855
Watts Industries, Inc. 1,320 23,258
Woodward Governor Co. 1,210 52,889
X-Rite, Inc. 750 8,490
------------
397,014
------------
ELECTRONIC MEASURING INSTRUMENTS (1.05%)
Analogic Corp. 1,430 68,640
FEI Co. * 2,310 53,915
Flir Systems, Inc. * 2,340 59,951
Itron, Inc. * 1,290 25,890
Keithley Instruments, Inc. 690 9,764
Trimble Navigation Ltd. * 2,150 49,773
------------
267,933
------------
ELECTRONICS (1.59%)
Brady Corp. 1,900 60,439
Checkpoint Systems, Inc. * 1,460 23,068
Harman International Industries, Inc. 2,390 235,057
Invision Technologies, Inc. * 1,120 27,261
Park Electrochemical Corp. 1,424 32,396
Paxar Corp. * 1,669 21,363
SBS Technologies, Inc. * 500 5,425
------------
405,009
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
ENGINEERING SERVICES (0.48%)
EMCOR Group, Inc. * 1,350 $ 57,443
Insituform Technologies, Inc. * 1,300 23,088
URS Corp. * 2,160 41,904
------------
122,435
------------
ENVIRONMENTAL CONTROL (0.61%)
Ionics, Inc. * 1,125 27,518
Tetra Tech, Inc. * 2,783 55,410
Waste Connections, Inc. * 2,040 71,584
------------
154,512
------------
FILTRATION PRODUCTS (0.58%)
Clarcor, Inc. 2,150 83,850
Cuno, Inc. * 1,610 63,096
------------
146,946
------------
FOOD (2.16%)
American Italian Pasta Co. * 1,470 56,874
Corn Products International, Inc. 2,440 77,714
Flowers Industries, Inc. 2,790 63,612
Great Atlantic & Pacific Tea Co. * 2,440 19,788
Hain Celestial Group, Inc. * 1,820 32,997
International Multifoods Corp. * 1,120 26,152
J&J Snack Foods Corp. * 940 32,712
Nash Finch Co. 720 11,160
Performance Food Group Co. * 3,270 133,122
Ralcorp Holdings, Inc. * 1,780 49,306
United Natural Foods, Inc. * 1,360 45,138
------------
548,575
------------
FOREST PRODUCTS & PAPER (0.39%)
Buckeye Technologies, Inc. * 1,750 15,906
Caraustar Industries, Inc. * 1,735 15,147
Deltic Timber Corp. 1,090 31,523
Pope & Talbot, Inc. 1,115 16,859
Rock-Tenn Co. 1,430 20,850
------------
100,285
------------
GARDEN PRODUCTS (0.40%)
Toro Co. 2,278 102,510
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
HAND/MACHINE TOOLS (0.30%)
Baldor Electric Co. 1,980 $ 41,798
Milacron, Inc. 1,770 4,071
Regal-Beloit Corp. 1,538 31,375
------------
77,244
------------
HEALTHCARE PRODUCTS (6.22%)
Advanced Medical Optics, Inc. * 1,000 17,960
American Healthways, Inc. * 1,070 44,929
American Medical Systems Holdings, Inc. * 1,880 40,796
Arthrocare Corp. * 1,340 23,879
Biosite, Inc. * 1,090 30,934
Centene Corp. * 1,230 37,380
Conmed Corp. * 1,840 37,978
Cooper Cos., Inc. 2,100 85,575
Cross Country Healthcare, Inc. * 1,690 23,812
Datascope Corp. 1,110 34,121
Diagnostic Products Corp. 2,110 76,656
Haemonetics Corp. * 1,400 33,054
Hologic, Inc. * 860 11,722
ICU Medical, Inc. * 1,010 27,482
Idexx Laboratories, Inc. * 2,399 101,934
Inamed Corp. * 1,590 116,785
Invacare Corp. 2,296 86,284
Mentor Corp. * 2,696 61,469
Natures Sunshine Products, Inc. 170 1,411
NBTY, Inc.* 4,323 100,942
Odyssey Healthcare, Inc. * 2,325 69,331
PolyMedica Corp. 1,900 50,350
Resmed, Inc. * 2,350 103,353
Respironics, Inc. * 2,420 101,108
Sola International, Inc. * 1,610 25,760
SurModics, Inc. * 1,240 33,282
Sybron Dental Specialties, Inc. * 2,100 52,647
Techne Corp. * 2,840 90,284
Viasys Healthcare, Inc. * 1,660 33,532
Vital Signs, Inc. 973 28,509
------------
1,583,259
------------
HEALTHCARE SERVICES (2.48%)
AMERIGROUP Corp. * 1,400 62,482
Amsurg Corp. * 1,280 42,227
Curative Health Services, Inc. * 590 10,543
Mid Atlantic Medical Services * 3,150 162,004
Orthodontic Centers Of America * 2,790 21,985
Pediatrix Medical Group, Inc. * 1,680 77,364
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Province Healthcare Co. * 2,520 $ 32,634
RehabCare Group, Inc. * 940 16,027
Renal Care Group, Inc. * 3,220 109,963
Sierra Health Services * 1,710 35,141
Sunrise Assisted Living, Inc. * 1,280 33,574
US Oncology, Inc. * 3,660 26,755
------------
630,699
------------
HOME BUILDERS (3.14%)
Champion Enterprises, Inc. * 2,105 13,367
Coachmen Industries, Inc. 850 9,953
Fleetwood Enterprises, Inc. * 2,300 21,321
MDC Holdings, Inc. 2,236 120,744
Monaco Coach Corp. * 1,725 28,549
NVR, Inc. * 590 275,235
Ryland Group, Inc. 1,918 140,225
Skyline Corp. 990 31,700
Standard-Pacific Corp. 2,340 88,686
Winnebago Industries 1,560 69,545
------------
799,325
------------
HOME FURNISHINGS (0.76%)
Bassett Furniture Industries, Inc. 988 13,387
Ethan Allen Interiors, Inc. 2,946 106,056
La-Z-Boy, Inc. 3,323 73,771
------------
193,214
------------
HOTELS & MOTELS (0.09%)
Prime Hospitality Corp. * 2,500 21,725
------------
HOUSEWARES (0.25%)
Libbey, Inc. 1,050 29,200
National Presto Industries, Inc. 980 33,653
------------
62,853
------------
INTERNET SERVICES & SOFTWARE (0.38%)
J2 Global Communications, Inc. * 1,670 63,176
Websense, Inc. * 1,550 32,968
------------
96,144
------------
INSURANCE (2.11%)
Delphi Financial Group 1,742 81,038
Hilb Rogal & Hamilton Co. 2,310 71,702
Landamerica Financial Group, Inc. 1,550 71,052
Philadelphia Consolidated Holding Co. * 1,680 77,616
Presidential Life Corp. 1,490 22,544
RLI Corp. 1,720 56,622
SCPIE Holdings, Inc. 610 6,100
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Selective Insurance Group 1,698 $ 50,532
Stewart Information Services Corp. * 1,150 32,476
UICI * 2,260 28,340
Zenith National Insurance Corp. 1,388 38,614
------------
536,636
------------
LEISURE & RECREATION (0.24%)
Bally Total Fitness Holding Corp. * 1,680 14,532
K2, Inc. * 1,440 21,384
Pegasus Solutions, Inc. * 1,750 24,202
------------
60,118
------------
MACHINERY-DIVERSIFIED (3.25%)
Albany International Corp. 2,260 69,698
Applied Industrial Technologies, Inc. 1,230 24,440
Astec Industries, Inc. * 1,180 12,154
Briggs & Stratton 1,980 116,345
Brooks-PRI Automation, Inc. * 2,530 52,877
Cognex Corp. 2,957 77,740
Gardner Denver, Inc. * 1,000 21,010
Gerber Scientific, Inc. * 1,491 10,586
IDEX Corp. 2,640 96,202
JLG Industries, Inc. 2,210 25,459
Lindsay Manufacturing Co. 829 16,663
Manitowoc Co. 1,907 41,363
Robbins & Meyers, Inc. 920 20,461
Stewart & Stevenson Services 1,190 17,874
Thomas Industries, Inc. 1,380 39,358
Zebra Technologies Corp. * 3,564 183,795
------------
826,025
------------
MEDIA (0.17%)
4kids Entertainment, Inc. * 870 18,357
Information Holdings, Inc. * 1,230 24,637
------------
42,994
------------
MEDICAL INFORMATION SYSTEMS (0.62%)
Cerner Corp. * 2,540 78,410
Dendrite International, Inc. * 2,365 35,924
NDCHealth Corp. 2,086 43,702
------------
158,036
------------
METAL FABRICATION (1.49%)
AM Castle & Co. * 757 3,361
Commercial Metals Co. 2,070 38,026
Intermet Corp. 260 1,118
Kaydon Corp. 1,930 45,818
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Lawson Products 1,010 $ 27,118
Maverick Tube Corp. * 2,420 37,558
Mueller Industries, Inc. * 2,342 59,604
Quanex Corp. 1,398 46,973
Shaw Group, Inc. * 2,230 23,437
Timken Co. 4,290 65,380
Valmont Industries, Inc. 1,330 26,321
Wolverine Tube, Inc. * 825 3,490
------------
378,204
------------
METALS (0.44%)
Cleveland-Cliffs, Inc. * 900 23,040
Material Sciences Corp. 630 6,439
Reliance Steel & Aluminum Co. 1,965 43,603
Ryerson Tull, Inc. 500 3,900
Steel Dynamics, Inc. * 2,090 31,643
Steel Technologies, Inc. 280 3,486
------------
112,111
------------
MILITARY DEFENSE (0.31%)
Engineered Support Systems, Inc. 1,320 79,860
------------
MINING (0.35%)
Brush Engineered Materials, Inc. * 1,030 10,557
Century Aluminum Co. * 680 7,378
Commonwealth Industries, Inc. * 930 4,418
Massey Energy Co. 4,230 56,259
RTI International Metal, Inc. * 980 10,310
------------
88,922
------------
OFFICE EQUIPMENT (0.33%)
Global Imaging Systems, Inc. * 1,520 37,392
Imagistics International, Inc. * 1,210 35,066
Interface, Inc. * 2,068 11,209
------------
83,667
------------
OFFICE SUPPLIES (0.39%)
John H. Harland Co. 1,760 46,587
New England Business Services, Inc. 1,080 28,750
Standard Register Co. 1,510 25,066
------------
100,403
------------
OIL & GAS (4.91%)
Atwood Oceanics, Inc. * 1,350 32,386
Cabot Oil & Gas Corp. 1,971 51,246
CAL Dive International, Inc. * 2,050 39,852
CARBO Ceramics, Inc. 1,480 53,517
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Cimarex Energy Co. * 2,220 $ 43,512
Dril-Quip, Inc. * 810 13,689
Eagle Geophysical, Inc. * 65 0
Evergreen Resources, Inc. * 3,420 92,340
Frontier Oil Corp. 1,310 19,257
Hydril Co. * 1,230 24,920
Input/Output, Inc. * 2,224 8,696
Lone Star Technologies * 1,790 24,147
Newfield Exploration Co. * 4,082 157,443
Nuevo Energy Co. * 1,380 25,075
Oceaneering International, Inc. * 1,616 38,008
Patina Oil & Gas Corp. 2,438 88,353
Plains Resources, Inc. * 1,250 15,562
Prima Energy Corp. * 820 20,705
Remington Oil & Gas Corp. * 1,200 21,780
Seacor Smit, Inc. * 1,750 63,297
Southwestern Energy Co. * 1,080 19,548
Spinaker Exploration Co. * 2,170 52,080
St. Mary Land & Exploration Co. 1,810 45,829
Stone Energy Corp. * 2,070 73,030
Swift Energy Co. * 1,180 16,650
Tetra Technologies, Inc. * 1,755 36,188
Tom Brown, Inc. * 2,500 64,250
Unit Corp. * 2,020 38,057
Veritas DGC, Inc. * 1,680 13,406
Vintage Petroleum, Inc 3,286 35,752
W-H Energy Services, Inc. * 1,160 20,648
------------
1,249,223
------------
PACKAGING & CONTAINERS (0.10%)
Chesapeake Corp. 1,070 24,118
------------
PHARMACEUTICALS (2.07%)
Accredo Health, Inc. * 3,050 85,369
Alpharma, Inc. 3,050 56,730
Cephalon, Inc. * 3,750 172,200
Cima Labs, Inc. * 1,000 27,950
Medicis Pharmaceutical 2,010 117,786
Noven Pharmaceuticals, Inc. * 1,210 13,794
Priority Healthcare Corp. * 2,608 53,568
------------
527,397
------------
PHOTOGRAPHY EQUIPMENT (0.04%)
Concord Camera Photo Equipment 840 8,946
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
REAL ESTATE INVESTMENT TRUST (2.34%)
Capital Automotive REIT 2,150 $ 65,597
Colonial Properties Trust 2,550 91,877
Essex Property Trust, Inc. 2,710 169,944
Gables Residential * 2,470 79,830
Glenborough Realty Trust, Inc. 470 8,864
Kilroy Realty Corp. 2,020 57,671
Shurgard Storage Centers, Inc. 3,450 121,785
------------
595,568
------------
RECREATIONAL VEHICLES (1.12%)
Arctic Cat, Inc. 1,220 23,583
Polaris Industries, Inc. 1,870 138,661
Thor Industries, Inc. 2,260 122,085
------------
284,329
------------
RETAIL-APPAREL (3.02%)
AnnTaylor Stores Corp. * 3,190 102,527
Brown Shoe Co., Inc. 1,399 44,348
Burlington Coat Factory Warehouse Corp. 2,530 47,311
Cato Corp. 1,600 32,272
Childrens Place * 1,750 30,013
Christopher & Banks Corp. 2,550 60,843
Dress Barn, Inc. * 2,132 29,208
Footstar, Inc. * 1,190 8,044
Genesco, Inc. * 1,220 19,593
Goody's Family Clothing, Inc. 600 5,916
HOT Topic, Inc. * 3,255 73,368
Men's Wearhouse, Inc. * 2,735 70,153
Pacific Sunwear Of California * 5,163 106,668
Stein Mart, Inc. * 2,190 11,979
Too, Inc. * 2,090 30,786
Urban Outfitters, Inc. * 3,000 78,180
Wet Seal, Inc. * 1,750 17,587
------------
768,796
------------
RETAIL-AUTO PARTS (0.53%)
Group 1 Automotive, Inc. * 1,680 58,027
PEP Boys-Manny Moe & Jack 3,140 48,042
TBC Corp. * 1,130 28,307
------------
134,376
------------
RETAIL-BEDDING (0.28%)
Linens 'N Things, Inc. * 3,030 72,053
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
RETAIL-COMPUTER EQUIPMENT (0.38%)
Electronics Boutique Holdings Corp. * 1,870 $ 53,426
Insight Enterprises, Inc. * 2,825 42,997
------------
96,423
------------
RETAIL-CONSUMER ELECTRONICS (0.03%)
Ultimate Electronics, Inc. * 780 7,402
------------
RETAIL-CONVENIENCE STORE (0.13%)
Casey's General Stores, Inc. 2,322 32,578
------------
RETAIL-DISCOUNT (0.50%)
Fred's, Inc. 2,770 91,299
ShopKo Stores, Inc. * 2,324 34,860
------------
126,159
------------
RETAIL-DRUG STORE (0.08%)
Duane Reade, Inc. * 1,350 21,533
------------
RETAIL-FABRIC STORE (0.24%)
Hancock Fabrics, Inc. 1,180 18,620
Jo-Ann Stores, Inc. * 1,495 41,711
------------
60,331
------------
RETAIL-GARDENING PRODUCTS (0.34%)
Tractor Supply * 2,660 87,275
------------
RETAIL-HAIR SALONS (0.62%)
Regis Corp. 4,935 158,413
------------
RETAIL-HOME FURNISHINGS (0.31%)
Cost Plus, Inc. * 1,640 60,549
Haverty Furniture Cos., Inc. 940 17,183
------------
77,732
------------
RETAIL-JEWELRY (0.41%)
Zale Corp. * 2,340 103,919
------------
RETAIL-MAIL ORDER (0.05%)
J. Jill Group, Inc. * 1,140 13,110
------------
RETAIL-OFFICE SUPPLIES (0.15%)
School Specialty, Inc. * 1,330 37,519
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
RETAIL-PAWN (0.07%)
Cash America International, Inc. 1,050 $ 17,220
------------
RETAIL-RESTAURANTS (1.61%)
CEC Entertainment, Inc. * 2,292 89,846
Ihop Corp. 1,850 60,773
Landry's Restaurants, Inc. 1,770 36,462
P.F. Chang's China Bistro, Inc. * 1,330 32,997
Panera Bread Co. * 2,060 93,421
Papa John's International, Inc. * 2,350 96,256
------------
409,755
------------
RETAIL-VIDEO RENTAL (0.14%)
Movie Gallery, Inc. * 1,800 35,370
------------
SAVINGS & LOANS (2.40%)
Anchor Bancorp Wisconsin, Inc. 1,040 24,419
Bankunited Financial Corp. * 1,440 30,355
Commercial Federal Corp. 2,830 68,911
Dime Community Bancshares 1,655 38,065
Downey Financial Corp. 2,436 113,834
FirstFed Financial Corp. * 1,750 69,125
Flagstar Bancorp, Inc. 3,340 76,653
MAF Bancorp, Inc. 2,290 87,478
Seacoast Financial Services Corp. 790 16,361
Staten Island Bancorp, Inc. 3,740 72,743
Waypoint Financial Corp 651 13,020
------------
610,964
------------
SCHOOLS (0.58%)
ITT Educational Services, Inc. * 3,090 148,073
------------
SEMICONDUCTORS (3.31%)
Actel Corp. * 1,970 47,221
Alliance Semiconductor Corp. * 2,220 12,077
ATMI, Inc. * 2,330 58,879
Axcelis Technologies, Inc. * 4,350 35,931
Cohu, Inc. 1,490 29,144
Dupont Photomasks, Inc. * 1,560 35,428
ESS Technology * 2,260 24,363
Exar Corp. * 2,190 30,945
Helix Technology Corp. 1,590 26,028
Kopin Corp. * 3,060 21,206
Kulicke & Soffa Industries, Inc. * 2,730 29,593
Microsemi Corp. * 1,830 27,889
Pericom Semiconductor Corp. * 1,270 12,700
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Photronics, Inc. * 2,290 $ 48,685
Power Integrations, Inc. * 2,150 71,466
Rudolph Technologies, Inc. * 1,130 21,820
Skyworks Solutions, Inc. * 7,860 71,526
Standard Microsystems Corp. * 1,200 32,376
Supertex, Inc. * 790 14,173
Three-Five Systems, Inc. * 1,150 6,337
Ultratech Stepper, Inc. * 1,710 48,256
Varian Semiconductor Equipment Associates, Inc. * 2,580 96,621
Veeco Instruments, Inc. * 2,000 39,920
------------
842,584
------------
STORAGE/WAREHOUSING (0.07%)
Mobile Mini, Inc. * 860 16,589
------------
TELECOMMUNICATIONS (1.40%)
Adaptec, Inc. * 5,410 40,900
Aeroflex, Inc. * 2,795 24,736
Anixter International, Inc. * 2,316 52,735
Audiovox Corp. * 2,060 26,018
Black Box Corp. 1,530 60,909
Boston Communications Group * 800 7,977
Cable Design Technologies Corp. * 2,570 20,560
C-COR.net Corp. * 2,010 13,266
Commonwealth Telephone Enterprises, Inc. * 430 17,256
General Communication * 1,740 14,477
Harmonic, Inc. * 3,020 18,935
Metro One Telecommunications * 1,540 5,359
Network Equipment Technologies, Inc. * 970 8,876
Symmetricom, Inc. * 1,165 7,374
Tollgrade Communications, Inc. * 790 12,695
Viasat, Inc. * 1,400 24,934
------------
357,007
------------
THERAPEUTICS (0.33%)
MGI Pharma, Inc. * 2,000 78,520
Theragenics Corp. * 1,150 6,555
------------
85,075
------------
TOY/GAMES/HOBBIES (0.25%)
Action Performance Cos., Inc. 1,250 30,550
Department 56 * 1,500 19,050
Jakks Pacific, Inc. * 1,230 14,994
------------
64,594
------------
TRANSPORTATION (2.36%)
Arkansas Best Corp. 1,630 44,825
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Forward Air Corp. * 1,520 $ 42,028
Heartland Express, Inc. 2,944 70,715
Kansas City Southern * 2,490 27,564
Kirby Corp. * 1,657 47,556
Knight Transportation, Inc. * 2,360 59,165
Landstar System, Inc. * 1,470 89,699
Offshore Logistics, Inc. * 1,190 24,157
Roadway Corp. 1,460 71,204
SCS Transportation, Inc. * 1 15
USF Corp. 2,032 63,947
Yellow Corp. * 1,966 58,744
------------
599,619
------------
UTILITIES (3.72%)
American States Water Co. 1,095 25,809
Atmos Energy Corp. 2,156 51,615
Avista Corp. 2,600 40,508
Cascade Natural Gas Corp. 1,380 27,048
Central Vermont Public Sevice Corp. 1,950 43,251
CH Energy Group, Inc. 2,050 90,200
Cleco Corp. 1,650 26,961
El Paso Electric Co. * 1,090 12,590
Energen Corp. 2,480 89,726
Green Mountain Power Corp. 670 15,109
Laclede Group, Inc. 1,120 30,251
New Jersey Resources Corp. 2,094 75,468
Northwest Natural Gas Co. 1,542 44,718
NUI Corp. 980 14,651
Piedmont Natural Gas Co. 2,699 105,261
Southern Union Co. * 3,040 51,680
Southwest Gas Corp. 1,679 38,113
UGI Corp. 3,000 86,790
UIL Holdings Corp. 1,501 52,520
Unisource Energy Corp. 1,320 25,106
------------
947,375
------------
TOTAL COMMON STOCK (COST $23,894,000) 24,968,748
------------
MISCELLANEOUS INVESTMENTS (1.65%)
Midcap SPDR Trust Series 1 4,500 420,210
Other Investments 1,500 42
------------
TOTAL MISCELLANEOUS INVESTMENTS (COST $430,980) 420,252
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
TOTAL INVESTMENTS (COST $24,324,980) (99.79%) $ 25,389,000
OTHER ASSETS IN EXCESS OF LIABILITIES, (0.21%) 54,518
------------
NET ASSETS (100%) $ 25,443,518
============
Cost for federal income tax at September 30, 2003 was
$24,385,271 and net unrealized appreciation consisted of:
Gross unrealized appreciation $ 4,082,309
Gross unrealized depreciation (3,078,580)
------------
Net unrealized appreciation $ 1,003,729
============
* Non-income producing investment
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCK (97.12%)
ARGENTINA (0.10%)
YPF Sociedad Anonima SA ADR 470 $ 12,596
------------
AUSTRIA (0.17%)
Telekom Austria AG ADR * 1,010 21,463
------------
AUSTRALIA (5.84%)
Amcor Ltd. ADR 3,270 77,960
Ansell Ltd. ADR 1,150 20,700
Australia & New Zealand Banking Group Ltd. ADR 2,090 127,177
BHP Billiton Ltd. ADR 3,800 53,884
Coles Myer Ltd. ADR 1,730 71,665
CSR Ltd. ADR 1,360 7,364
James Hardie Industries NV ADR 1,720 43,602
National Australia Bank Ltd. ADR 1,210 126,239
Westpac Banking Corp. ADR 3,690 204,500
------------
733,091
------------
BELGIUM (0.29%)
Delhaize Group ADR 890 36,268
------------
BRITAIN (25.07%)
Amersham Plc ADR 1,130 50,567
Amvescap Plc ADR 1,180 17,924
AstraZeneca Plc ADR 4,110 178,374
Barclays Plc ADR 4,390 136,090
BG Group Plc ADR 3,260 70,057
BOC Group Plc ADR 2,490 69,172
Boots Group Plc ADR 2,340 50,190
BP Plc ADR 8,510 358,271
British Airways Plc ADR 590 16,650
British Sky Broadcasting Plc ADR * 1,080 44,496
BT Group Plc ADR 2,550 77,265
Bunzl Plc ADR 1,370 52,581
Carnival Plc ADR 696 22,161
Galen Holdings Plc ADR 320 14,560
GlaxoSmithKline Plc ADR 7,460 316,304
Hanson Plc ADR 1,270 40,615
HSBC Holdings Plc ADR 6,010 396,660
Imperial Chemical Industries Plc ADR 1,120 12,488
International Power Plc ADR * 950 21,043
Kingfisher Plc ADR 333 2,884
Lloyds TSB Group Plc ADR 4,290 118,619
National Grid Transco Plc ADR 2,890 94,416
Prudential Plc ADR 3,080 42,658
Rentokil Initial Plc ADR 1,800 31,886
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Reuters Group Plc ADR 890 $ 19,295
Rexam Plc ADR 1,090 36,906
Rio Tinto Plc ADR 890 78,098
Scottish Power Plc ADR 2,350 55,695
Shell Transport & Trading Co. Plc ADR 1,820 68,723
Signet Group Plc ADR 560 29,864
Smith & Nephew Plc ADR 510 33,966
Tate & Lyle Plc ADR 390 8,423
Tesco Plc ADR 4,570 54,895
Unilever Plc ADR 2,420 83,829
United Utilities Plc ADR 3,410 53,810
Vodafone Group Plc ADR 14,570 295,043
Wolseley Plc ADR 920 54,832
WPP Group Plc ADR 930 39,265
------------
3,148,575
------------
CHINA (0.40%)
PetroChina Co. Ltd. ADR 1,100 36,905
Yanzhou Coal Mining Co. ADR 500 13,850
------------
50,755
------------
DENMARK (0.36%)
Novo-Nordisk A/S ADR 1,220 45,006
------------
FRANCE (8.24%)
Alcatel SA ADR 2,440 28,865
Aventis SA ADR 2,460 128,658
AXA ADR 5,160 87,668
Business Objects SA ADR * 480 11,976
Dassault Systemes SA ADR 580 20,428
Groupe Danone ADR 3,030 92,476
Lafarge SA ADR 3,160 51,666
Pechiney SA ADR 1,250 34,188
PSA Peugeot Citroen ADR 1,420 60,342
Publicis Groupe ADR 1,010 27,846
Sanofi-Synthelabo SA ADR 2,590 78,270
Sodexho Alliance SA ADR 1,110 30,303
Suez SA ADR 3,420 54,378
Technip-Coflexip SA ADR 970 23,862
Thomson ADR 1,040 18,117
Total Fina Elf SA ADR 3,090 234,222
Valeo SA ADR 1,130 20,627
Vivendi Environment ADR 1,370 30,811
------------
1,034,703
------------
GERMANY (6.05%)
Allianz AG ADR 4,460 39,426
BASF AG ADR 2,520 110,275
Bayer AG ADR 3,470 74,848
Deutsche Telekom AG ADR * 4,990 72,056
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
E.ON AG ADR 2,290 $ 111,752
Infineon Technologies ADR 1,100 14,179
Pfeiffer Vacuum Technology AG ADR 590 17,871
RWE AG ADR 2,090 55,493
SAP AG ADR 2,140 65,077
Schering AG ADR 1,380 59,961
Siemens AG ADR 2,330 138,425
------------
759,363
------------
HONG KONG (1.65%)
CNOOC Ltd. ADR 1,830 62,897
Huaneng Power International, Inc. ADR 270 14,769
Hutchison Whampoa Ltd. ADR 3,560 129,872
------------
207,538
------------
IRELAND (1.40%)
Allied Irish Banks Plc ADR 2,370 70,271
Bank of Ireland ADR 1,440 70,171
Icon Plc ADR * 320 12,122
Ryanair Holdings Plc ADR * 560 22,680
------------
175,244
------------
ITALY (3.41%)
Benetton Group SpA ADR 1,700 35,632
Ducati Motor Holding SpA ADR * 1,830 30,012
Enel SpA ADR 3,420 106,362
ENI SpA ADR 2,100 160,713
Sanpaolo IMI SpA ADR 4,780 95,361
------------
428,080
------------
JAPAN (17.39%)
Advantest Corp. ADR 1,510 25,066
Bridgestone Corp. ADR 1,230 32,920
Canon, Inc. ADR 2,820 137,390
Casio Computer Co. Ltd. ADR 300 22,933
CSK Corp. ADR 670 22,881
Fuji Photo Film Co. Ltd. ADR 2,320 67,744
Fujitsu Ltd. ADR 2,170 56,719
Hitachi Ltd. ADR 1,880 103,193
Honda Motor Co. Ltd. ADR 4,390 88,502
Ito-Yokado Co. Ltd. ADR 1,260 30,089
Konami Corp. ADR 640 19,718
Kubota Corp. ADR 1,910 32,852
Kyocera Corp. ADR 740 43,912
Matsushita Electric Industrial Co. Ltd. ADR 6,010 71,880
Millea Holdings, Inc. ADR 1,980 110,407
Mitsubishi Corp. ADR 2,890 49,514
Mitsui & Co. Ltd. ADR 590 82,010
Nidec Corp. ADR 420 34,755
Nintendo Co. Ltd. ADR 2,640 27,885
Nippon Telegraph & Telephone Corp. ADR 4,070 92,145
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
Nissan Motor Co. Ltd. ADR 3,460 $ 75,151
Nomura Holdings, Inc. ADR 6,740 108,110
NTT DoCoMo, Inc. ADR 4,390 107,248
Olympus Optical Co. Ltd. ADR 1,690 40,240
ORIX Corp. ADR 1,600 63,360
Pioneer Corp. ADR 1,340 33,500
Ricoh Co. Ltd. ADR 690 61,755
Sanyo Electric Co. Ltd. ADR 1,720 36,550
Sharp Corp. ADR 3,440 50,346
Shiseido Co. Ltd. ADR 1,760 20,071
Sony Corp. ADR 2,580 89,784
TDK Corp. ADR 670 39,798
Trend Micro, Inc. ADR * 550 11,110
Toyota Motor Corp. ADR 3,820 227,481
Wacoal Corp. ADR 1,570 66,913
------------
2,183,932
------------
NETHERLANDS (8.74%)
ABN Amro Holding NV ADR 5,350 98,814
Aegon NV ADR 3,307 38,692
Akzo Nobel NV ADR 1,940 60,819
ASM Lithography Holding NV ADR * 1,080 14,180
Equant NV ADR * 2,680 45,292
Gucci Group NV 280 23,604
ING Groep NV ADR 6,300 116,550
Koninklijke Ahold NV ADR 2,400 22,896
Koninklijke KPN NV ADR * 3,910 29,325
Koninklijke Philips Electronics NV 3,450 79,074
Reed Elsevier NV ADR 1,900 43,282
Reed Elsevier Plc ADR 1,620 51,192
Royal Dutch Petroleum Co. ADR 5,570 246,194
TPG NV ADR 2,660 50,912
Unilever NV 2,050 121,319
VNU NV ADR 1,270 37,226
Wolters Kluwer NV ADR 1,320 18,938
------------
1,098,309
------------
NEW ZEALAND (0.69%)
Telecom Corp of New Zealand Ltd. ADR 3,540 86,447
------------
NORWAY (0.97%)
Norsk Hydro ASA ADR 2,380 122,237
------------
PORTUGAL (0.95%)
Banco Comercial Portugues SA ADR 2,030 18,311
Electricidade de Portugal SA ADR 4,400 101,112
------------
119,423
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
SINGAPORE (0.74%)
DBS Group Holdings Ltd. ADR 1,870 $ 55,822
United Overseas Bank Ltd. ADR 2,400 37,210
------------
93,032
------------
SPAIN (3.73%)
Banco Bilbao Vizcaya Argentaria SA ADR 9,310 96,265
Banco Santander Central Hispano SA ADR 5,480 46,635
Endesa SA ADR 5,220 81,171
Repsol YPF SA ADR 4,250 69,998
Telefonica SA ADR 4,934 174,910
------------
468,979
------------
SWEDEN (2.17%)
Electrolux AB ADR 860 37,625
Modern Times Group AB ADR * 600 9,540
SKF AB ADR 1,050 33,120
Svenska Cellulosa AB ADR 1,570 56,830
Tele2 AB ADR * 760 33,060
Telefonaktiebolaget LM Ericsson ADR * 3,400 49,912
Volvo AB ADR 2,270 52,846
------------
272,933
------------
SWITZERLAND (8.76%)
Centerpulse Ltd. ADR * 440 12,644
Ciba Specialty Chemicals AG ADR 2,400 80,976
Compagnie Fianciere Richemont AG ADR 2,490 49,493
Converium Holding AG ADR 1,490 34,121
Credit Suisse Group ADR 3,760 120,207
Logitech International SA ADR * 430 13,330
Novartis AG ADR 8,160 316,934
Roche Holding AG ADR 2,790 231,333
Serono SA ADR 1,010 16,544
STMicroelectronics NV 1,880 45,214
Swiss Reinsurance ADR 1,500 95,295
Swisscom AG ADR 1,950 57,096
Syngenta AG ADR 2,530 27,678
------------
1,100,865
------------
TOTAL COMMON STOCK (COST $10,612,850) 12,198,839
------------
PREFERRED STOCK (0.70%)
Premier Farnell Plc ADR (COST $70,760) 3,860 88,201
------------
MISCELLANEOUS INVESTMENTS (1.68%)
Ishares MSCI EAFE Index Fund (COST $217,512) 1,800 210,690
------------
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS - SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
SHORT TERM INVESTMENTS (0.00%)
Fifth Third Institutional Government
Money Market Fund, 0.95% ** (COST $102) 102 $ 102
------------
TOTAL INVESTMENTS (Cost $10,901,224) (99.50%) $ 12,497,832
OTHER ASSETS IN EXCESS OF LIABILITIES (0.50%) 62,883
------------
NET ASSETS (100%) $ 12,560,715
============
Cost for federal income tax at September 30, 2003 was
$11,198,368 and net unrealized appreciation consisted of:
Gross unrealized appreciation $ 1,698,328
Gross unrealized depreciation (398,864)
------------
Net unrealized appreciation $ 1,299,464
============
* Non-income producing investment
** Variable rate security; rate shown represents rate at September 30, 2003. ADR
- - American depository receipt
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
THE CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 2003
- ---------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM BOND BOND LARGE CAP SMALL CAP INTERNATIONAL
FUND FUND EQUITY FUND EQUITY FUND FUND
------------ ------------ ------------ ------------ ------------
ASSETS:
Investments, at value (identified cost
$29,256,446, $56,764,106, $94,411,284,
$24,324,980 and $10,901,224, respectively)
(Note 2) $ 29,591,857 $ 60,575,186 $ 80,772,932 $ 25,389,000 $ 12,497,832
Receivables:
Investments sold -- -- 136,964 187,011 24,103
Fund Share sold 13,721 11,727 18,241 15,488 4,659
Collateral for securities loaned,
at fair value (Note 8) 9,598,300 17,303,878 919,376 1,019,590 101,900
Dividends and interest 405,113 742,672 81,333 18,037 41,474
Prepaid expenses 12,556 22,647 20,786 17,424 18,148
------------ ------------ ------------ ------------ ------------
Total assets 39,621,547 78,656,110 81,949,632 26,646,550 12,688,116
------------ ------------ ------------ ------------ ------------
LIABILITIES:
Payables:
Fund Share $ -- $ 27,819 $ 28,308 $ 7,380 $ 6,576
12b-1 fees 504 11,760 10,192 3,554 2,467
Due to Custodian 10,149 1,800 5,592 145,035 2,386
Due to Advisor 5,580 11,081 15,157 4,883 2,367
Accrued expenses 13,177 32,847 36,951 22,590 11,705
Payables upon return of securities
loaned (Note 8) 9,598,300 17,303,878 919,376 1,019,590 101,900
------------ ------------ ------------ ------------ ------------
Total liabilities 9,627,710 17,389,185 1,015,576 1,203,032 127,401
------------ ------------ ------------ ------------ ------------
NET ASSETS $ 29,993,837 $ 61,266,925 $ 80,934,056 $ 25,443,518 $ 12,560,715
============ ============ ============ ============ ============
NET ASSETS CONSIST OF:
Paid-in Capital $ 29,558,188 $ 58,333,459 $102,885,692 $ 25,288,836 $ 26,414,082
Undistributed net investment income -- 51,629 8,128 4,563 --
Undistributed realized gain (loss)
on investments 100,238 (929,243) (8,321,412) (913,901) (15,450,482)
Net unrealized appreciation (depreciation) on:
Investments 335,411 3,811,080 (13,638,352) 1,064,020 1,596,608
Translation of assets and liabilities
in foreign currencies -- -- -- -- 507
------------ ------------ ------------ ------------ ------------
NET ASSETS $ 29,993,837 $ 61,266,925 $ 80,934,056 $ 25,443,518 $ 12,560,715
============ ============ ============ ============ ============
CLASS A SHARES (NOTE 1):
Net assets for 24,973, 1,798,467, 2,208,476,
594,830 and 497,353 shares outstanding,
respectively $ 636,227 $ 46,473,576 $ 50,585,169 $ 16,688,658 $ 8,101,972
Net asset value, offering and redemption
price per Class A Share $ 25.48 $ 25.84 $ 22.91 $ 28.06 $ 16.29
CLASS C SHARES (NOTE 1):
Net assets for 1,153,314, 570,331, 1,318,843,
310,072 and 272,232 shares outstanding,
respectively $ 29,357,610 $ 14,793,349 $ 30,348,887 $ 8,754,860 $ 4,458,743
Net asset value, offering and redemption
price per Class C share $ 25.46 $ 25.94 $ 23.01 $ 28.23 $ 16.38
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
THE CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUE FUND
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 2003
- -----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM BOND BOND LARGE CAP SMALL CAP INTERNATIONAL
FUND FUND EQUITY FUND EQUITY FUND FUND
------------ ------------ ------------ ------------ ------------
INVESTMENT INCOME:
Interest $ 1,038,200 $ 3,154,407 $ 5,354 $ 2,525 $ 34,618
Dividends (net of foreign taxes withheld of
$9,452 for the International Fund) -- -- 1,333,972 234,372 381,448
Other income 7,945 2,310 1,640 9,662 1,182
------------ ------------ ------------ ------------ ------------
Total Investment Income 1,046,145 3,156,717 1,340,966 246,559 417,248
------------ ------------ ------------ ------------ ------------
EXPENSES:
Investment advisory fees (Note 4) 54,585 95,652 113,429 38,439 30,636
Administration fee (Note 4) 27,292 47,701 56,715 19,220 15,318
Accounting fee 30,861 45,619 52,090 20,919 19,972
Custodian fees 42,574 16,110 23,219 9,437 45,176
Transfer agency fees 12,605 18,633 21,276 8,544 8,157
Distribution fees - Class A (Note 5) 1,230 104,448 96,164 30,586 16,349
Trustee expense 12,012 19,620 24,366 2,341 5,662
Audit fees 6,066 20,579 19,273 12,576 5,897
Legal fees 5,603 45,421 11,034 2,767 2,604
Consulting fees 7,984 14,314 16,977 6,957 5,096
Pricing fees 3,116 11,386 18,461 6,484 7,728
Registration fees 12,680 14,805 19,422 14,658 12,727
Reports to shareholders 3,357 11,166 6,742 1,335 1,609
Other 9,428 24,831 27,462 8,025 11,756
------------ ------------ ------------ ------------ ------------
Total expenses 229,393 490,285 506,630 182,288 188,687
------------ ------------ ------------ ------------ ------------
Net investment income 816,752 2,666,432 834,336 64,271 228,561
------------ ------------ ------------ ------------ ------------
REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments 100,237 (166,756) (607,203) (263,926) (4,238,453)
Redemption in kind -- 2,422,668 (43,646,584) (6,889,572) (19,731,356)
Foreign currency transactions -- -- -- -- (17,216)
Net unrealized appreciation (depreciation)
during the period on:
Investments (360,874) (3,285,505) 68,660,427 14,852,488 29,342,597
Translation of assets and liabilities in
foreign currencies -- -- -- -- (2,809)
------------ ------------ ------------ ------------ ------------
Net gain (loss) on investments and
foreign currency (260,637) (1,029,593) 24,406,640 7,698,990 5,352,763
------------ ------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 556,115 $ 1,636,839 $ 25,240,976 $ 7,763,261 $ 5,581,324
============ ============ ============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
THE CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM BOND BOND LARGE CAP SMALL CAP INTERNATIONAL
For the Year Ended September 30, 2003 FUND FUND EQUITY FUND EQUITY FUND FUND
------------ ------------ ------------ ------------ ------------
Decrease in Net Assets
Operations:
Net investment income $ 816,752 $ 2,666,432 $ 834,336 $ 64,271 $ 228,561
Net realized gain (loss) on:
Investments 100,237 (166,756) (607,203) (263,926) (4,238,453)
Redemption in kind -- 2,422,668 (43,646,584) (6,889,572) (19,731,356)
Foreign currency transactions -- -- -- -- (17,216)
Net unrealized appreciation (depreciation)
during the period on:
Investments (360,874) (3,285,505) 68,660,427 14,852,488 29,342,597
Translation of assets and liabilities in
foreign currencies -- -- -- -- (2,809)
------------ ------------ ------------ ------------ ------------
Net increase in net assets resulting from operations 556,115 1,636,839 25,240,976 7,763,261 5,581,324
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income
Class A (11,188) (1,903,612) (472,401) (30,686) (113,932)
Class C (839,850) (777,583) (409,509) (29,022) (108,310)
Net realized gain
Class A (2,513) -- -- (395,330) --
Class C (259,990) -- -- (2,809,844) --
------------ ------------ ------------ ------------ ------------
Total Distributions (1,113,541) (2,681,195) (881,910) (3,264,882) (222,242)
------------ ------------ ------------ ------------ ------------
Decrease in net assets from Fund share
transactions (Note 6) (692,846) (41,307,173) (91,027,008) (53,895,508) (45,290,561)
------------ ------------ ------------ ------------ ------------
Decrease in net assets (1,250,272) (42,351,529) (66,667,942) (49,397,129) (39,931,479)
NET ASSETS:
Beginning of period 31,244,109 103,618,454 147,601,998 74,840,647 52,492,194
------------ ------------ ------------ ------------ ------------
End of period $ 29,993,837 $ 61,266,925 $ 80,934,056 $ 25,443,518 $ 12,560,715
============ ============ ============ ============ ============
FOR THE YEAR ENDED SEPTEMBER 30, 2002
Decrease in Net Assets
Operations:
Net investment income $ 1,231,833 $ 4,928,753 $ 2,054,256 $ 335,464 $ 855,735
Net realized gain (loss) on:
Investments 427,020 (179,060) (6,763,721) 3,100,912 (4,842,401)
Foreign currency transactions -- -- -- -- (15,253)
Net unrealized appreciation (depreciation)
during the period on:
Investments (248,068) 3,763,191 (34,656,222) (4,659,728) (5,562,731)
Translation of assets and liabilities in
foreign currencies -- -- -- -- 2,697
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations 1,410,785 8,512,884 (39,365,687) (1,223,352) (9,561,953)
------------ ------------ ------------ ------------ ------------
Distributions to shareholders from:
Net investment income
Class A (6,649) (1,251,843) (256,054) (19,905) (60,005)
Class C (1,231,151) (3,676,231) (1,756,926) (330,356) (817,192)
Net realized gain
Class A -- -- (108,714) (726,705) --
Class C -- -- (750,522) (8,579,316) --
------------ ------------ ------------ ------------ ------------
Total Distributions (1,237,800) (4,928,074) (2,872,216) (9,656,282) (877,197)
------------ ------------ ------------ ------------ ------------
Increase in net assets from Fund share
transactions (Note 6) 2,814,789 8,215,349 16,873,655 9,923,456 1,130,790
------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets 2,987,774 11,800,159 (25,364,248) (956,178) (9,308,360)
NET ASSETS:
Beginning of period 28,256,335 91,818,295 172,966,246 75,796,825 61,800,554
------------ ------------ ------------ ------------ ------------
End of period $ 31,244,109 $103,618,454 $147,601,998 $ 74,840,647 $ 52,492,194
============ ============ ============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
SHORT-TERM BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS A
-------
For the Year For the Year For the Year For the Year For the Period
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 25.87 $ 25.66 $ 24.70 $ 24.68 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.52 * 1.04 * 1.14 1.35 * 0.68
Net realized and unrealized gain (loss) on
investments and foreign currency transactions (0.11)* 0.13 * 1.21 (0.05)* (0.23)
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.41 1.17 2.35 1.30 0.45
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (0.57) (0.96) (1.39) (1.28) (0.77)
From net realized capital gain (0.22) -- -- -- --
From return of capital (0.01) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions (0.80) (0.96) (1.39) (1.28) (0.77)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 25.48 $ 25.87 $ 25.66 $ 24.70 $ 24.68
========== ========== ========== ========== ==========
TOTAL RETURN 1.61% 4.68% 9.74% 5.42% 1.84%
Ratios of expenses to average net assets:
before fee waivers 0.88% 0.81% 0.74% 0.72% 0.79% 1
after fee waivers 0.88% 0.81% 0.74% 0.72% 0.61% 1
Ratios of net investment income to average net assets:
before fee waivers 2.00% 4.04% 5.32% 5.25% 4.34% 1
after fee waivers 2.00% 4.04% 5.32% 5.25% 4.52% 1
Portfolio turnover rate 776.35% 27.77% 36.76% 55.28% 47.85%
Net assets, end of period $ 636,227 $ 292,996 $ 497,078 $ 26,583 $ 727
1 Annualized
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
SHORT-TERM BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS C
-------
For the Year For the Year For the Year For the Year For the Period
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 25.85 $ 25.70 $ 24.74 $ 24.72 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.58 * 1.09 1.44 1.35 0.80
Net realized and unrealized gain (loss) on
investments and foreign currency transactions (0.11)* 0.15 0.97 -- (0.30)
---------- ---------- ---------- ---------- ----------
Total from investment operations 0.47 1.24 2.41 1.35 0.50
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (0.63) (1.09) (1.45) (1.33) (0.78)
From net realized capital gain (0.22) -- -- -- --
From return of capital (0.01) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions (0.86) (1.09) (1.45) (1.33) (0.78)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 25.46 $ 25.85 $ 25.70 $ 24.74 $ 24.72
========== ========== ========== ========== ==========
TOTAL RETURN 1.86% 4.97% 9.98% 5.63% 2.05%
Ratios of expenses to average net assets:
before fee waivers 0.63% 0.56% 0.49% 0.47% 0.54% 1
after fee waivers 0.63% 0.56% 0.49% 0.47% 0.36% 1
Ratios of net investment income to average net assets:
before fee waivers 2.25% 4.29% 5.57% 5.50% 4.59% 1
after fee waivers 2.25% 4.29% 5.57% 5.50% 4.77% 1
Portfolio turnover rate 776.35% 27.77% 36.76% 55.28% 47.85%
Net assets, end of period $29,357,610 $30,951,113 $27,759,257 $28,913,208 $25,927,109
1 Annualized
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS A
-------
For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 25.91 $ 25.08 $ 23.51 $ 23.36 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 1.05 * 1.31 1.33 1.27 * 1.06
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 0.05 * 0.81 1.57 0.11 * (1.57)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.10 2.12 2.90 1.38 (0.51)
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (1.17) (1.29) (1.33) (1.23) (1.13)
---------- ---------- ---------- ---------- ----------
Total distributions (1.17) (1.29) (1.33) (1.23) (1.13)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 25.84 $ 25.91 $ 25.08 $ 23.51 $ 23.36
========== ========== ========== ========== ==========
TOTAL RETURN 4.33% 8.76% 12.56% 6.08% (2.04)%
Ratios of expenses to average net assets:
before fee waivers 0.86% 0.67% 0.64% 0.66% 0.62%
after fee waivers 0.86% 0.67% 0.64% 0.66% 0.62%
Ratios of net investment income to average net assets:
before fee waivers 4.10% 5.10% 5.39% 5.31% 4.69%
after fee waivers 4.10% 5.10% 5.39% 5.31% 4.69%
Portfolio turnover rate 94.61% 5.09% 8.94% 25.64% 17.09%
Net assets, end of period $46,473,576 $33,961,123 $17,461,376 $6,521,024 $ 8,466
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
BOND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS C
-------
For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 25.99 $ 25.16 $ 23.57 $ 23.40 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 1.14 * 1.38 1.38 * 1.30 1.16
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 0.04 * 0.80 1.59 * 0.14 (1.62)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.18 2.18 2.97 1.44 (0.46)
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (1.23) (1.35) (1.38) (1.27) (1.14)
---------- ---------- ---------- ---------- ----------
Total distributions (1.23) (1.35) (1.38) (1.27) (1.14)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 25.94 $ 25.99 $ 25.16 $ 23.57 $ 23.40
========== ========== ========== ========== ==========
TOTAL RETURN 4.64% 8.98% 12.86% 6.34% (1.83)%
Ratios of expenses to average net assets:
before fee waivers 0.61% 0.42% 0.39% 0.41% 0.37%
after fee waivers 0.61% 0.42% 0.39% 0.41% 0.37%
Ratios of net investment income to average net assets:
before fee waivers 4.35% 5.35% 5.64% 5.56% 4.94%
after fee waivers 4.35% 5.35% 5.64% 5.56% 4.94%
Portfolio turnover rate 94.61% 5.09% 8.94% 25.64% 17.09%
Net assets, end of period $14,793,349 $69,657,331 $74,356,919 $72,055,471 $60,335,227
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
LARGE CAP EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS A
-------
For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 18.76 $ 24.08 $ 34.49 $ 31.75 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.22 0.23 * 0.19 * 0.16 * 0.22
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 4.18 (5.20)* (9.10)* 3.68 * 6.80
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.40 (4.97) (8.91) 3.84 7.02
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (0.25) (0.23) (0.20) (0.22) (0.27)
From net realized capital gain -- (0.12) (1.30) (0.88) --
---------- ---------- ---------- ---------- ----------
Total distributions (0.25) (0.35) (1.50) (1.10) (0.27)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 22.91 $ 18.76 $ 24.08 $ 34.49 $ 31.75
========== ========== ========== ========== ==========
TOTAL RETURN 23.57% (20.97)% (26.64)% 12.07% 28.10%
Ratios of expenses to average net assets:
before fee waivers 0.79% 0.64% 0.62% 0.63% 0.63%
after fee waivers 0.79% 0.64% 0.62% 0.63% 0.63%
Ratios of net investment income to average net assets:
before fee waivers 0.99% 0.89% 0.66% 0.54% 0.74%
after fee waivers 0.99% 0.89% 0.66% 0.54% 0.74%
Portfolio turnover rate 43.12% 9.76% 12.70% 36.64% 142.56%
Net assets, end of period $50,585,169 $26,477,099 $19,301,451 $10,619,367 $ 99,888
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
LARGE CAP EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS C
-------
For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 18.82 $ 24.15 $ 34.57 $ 31.79 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.26 * 0.28 * 0.27 * 0.26 0.30
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 4.22 * (5.22)* (9.13)* 3.67 6.79
---------- ---------- ---------- ---------- ----------
Total from investment operations 4.48 (4.94) (8.86) 3.93 7.09
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (0.29) (0.27) (0.26) (0.27) (0.30)
From net realized capital gain -- (0.12) (1.30) (0.88) --
---------- ---------- ---------- ---------- ----------
Total distributions (0.29) (0.39) (1.56) (1.15) (0.30)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 23.01 $ 18.82 $ 24.15 $ 34.57 $ 31.79
========== ========== ========== ========== ==========
TOTAL RETURN 23.92% (20.80)% (26.42)% 12.34% 28.35%
Ratios of expenses to average net assets:
before fee waivers 0.54% 0.39% 0.37% 0.38% 0.38%
after fee waivers 0.54% 0.39% 0.37% 0.38% 0.38%
Ratios of net investment income to average net assets:
before fee waivers 1.24% 1.14% 0.91% 0.79% 0.99%
after fee waivers 1.24% 1.14% 0.91% 0.79% 0.99%
Portfolio turnover rate 43.12% 9.76% 12.70% 36.64% 142.56%
Net assets, end of period $30,348,887 $121,124,899 $153,664,795 $187,806,297 $132,381,985
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
SMALL CAP EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS A
-------
For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 23.40 $ 26.51 $ 34.52 $ 29.17 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.04 * 0.05 0.05 * 0.01 0.14
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 5.68 * 0.09 (3.82)* 6.94 4.17
---------- ---------- ---------- ---------- ----------
Total from investment operations 5.72 0.14 (3.77) 6.95 4.31
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (0.06) (0.07) (0.05) (0.05) (0.14)
From net realized capital gain (1.00) (3.18) (4.19) (1.55) --
---------- ---------- ---------- ---------- ----------
Total distributions (1.06) (3.25) (4.24) (1.60) (0.14)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 28.06 $ 23.40 $ 26.51 $ 34.52 $ 29.17
========== ========== ========== ========== ==========
TOTAL RETURN 25.31% (1.66)% (12.00)% 24.68% 17.27%
Ratios of expenses to average net assets:
before fee waivers 0.85% 0.70% 0.69% 0.66% 0.66%
after fee waivers 0.85% 0.70% 0.69% 0.66% 0.66%
Ratios of net investment income to average net assets:
before fee waivers 0.12% 0.15% 0.14% 0.09% 0.31%
after fee waivers 0.12% 0.15% 0.14% 0.09% 0.31%
Portfolio turnover rate 42.18% 35.33% 49.43% 53.16% 41.02%
Net assets, end of period $16,688,658 $8,989,110 $5,216,136 $2,428,801 $ 28,060
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
SMALL CAP EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS C
-------
For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 23.47 $ 26.59 $ 34.59 $ 29.21 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.08 * 0.13 0.12 0.11 0.16
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 5.78 * 0.07 (3.81) 6.93 4.21
---------- ---------- ---------- ---------- ----------
Total from investment operations 5.86 0.20 (3.69) 7.04 4.37
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (0.10) (0.14) (0.12) (0.11) (0.16)
From net realized capital gain (1.00) (3.18) (4.19) (1.55) --
---------- ---------- ---------- ---------- ----------
Total distributions (1.10) (3.32) (4.31) (1.66) (0.16)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 28.23 $ 23.47 $ 26.59 $ 34.59 $ 29.21
========== ========== ========== ========== ==========
TOTAL RETURN 25.85% (1.46)% (11.75)% 24.98% 17.49%
Ratios of expenses to average net assets:
before fee waivers 0.60% 0.45% 0.44% 0.41% 0.41%
after fee waivers 0.60% 0.45% 0.44% 0.41% 0.41%
Ratios of net investment income to average net assets:
before fee waivers 0.37% 0.40% 0.39% 0.34% 0.56%
after fee waivers 0.37% 0.40% 0.39% 0.34% 0.56%
Portfolio turnover rate 42.18% 35.33% 49.43% 53.16% 41.02%
Net assets, end of period $8,754,860 $65,851,537 $70,580,689 $88,360,329 $67,544,211
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
INTERNATIONAL FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS A
-------
For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 14.55 $ 17.62 $ 26.03 $ 30.54 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.20 0.21 0.33 * 1.70 * 0.84
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 1.78 (3.06) (8.14)* (1.64)* 7.00
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.98 (2.85) (7.81) 0.06 7.84
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (0.22) (0.22) (0.37) (1.14) (0.92)
From net realized capital gain -- -- (0.23) (3.43) (1.38)
From return of capital (0.02) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions (0.24) (0.22) (0.60) (4.57) (2.30)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 16.29 $ 14.55 $ 17.62 $ 26.03 $ 30.54
========== ========== ========== ========== ==========
TOTAL RETURN 13.68% (16.36)% (30.39)% (1.22)% 31.98%
Ratios of expenses to average net assets:
before fee waivers 1.10% 0.77% 0.71% 0.71% 0.64%
after fee waivers 1.10% 0.77% 0.71% 0.71% 0.64%
Ratios of net investment income to average net assets:
before fee waivers 0.95% 1.12% 1.62% 4.44% 3.12%
after fee waivers 0.95% 1.12% 1.62% 4.44% 3.12%
Portfolio turnover rate 414.62% 29.48% 68.11% 48.13% 52.42%
Net assets, end of period $8,101,972 $4,616,210 $3,331,656 $1,748,773 $ 10,038
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL, ETHICS, AND RELIGIOUS VALUES FUND
FINANCIAL HIGHLIGHTS
INTERNATIONAL FUND
- ------------------------------------------------------------------------------------------------------------------------------------
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.
CLASS C
-------
For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended
September 30, September 30, September 30, September 30, September 30,
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - BEGINNING OF PERIOD $ 14.58 $ 17.65 $ 26.06 $ 30.55 $ 25.00
---------- ---------- ---------- ---------- ----------
INVESTMENT OPERATIONS:
Net investment income 0.37 0.25 0.41 1.37 * 0.99
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 1.70 (3.07) (8.17) (1.24)* 6.91
---------- ---------- ---------- ---------- ----------
Total from investment operations 2.07 (2.82) (7.76) 0.13 7.90
---------- ---------- ---------- ---------- ----------
Distributions:
From net investment income (0.25) (0.25) (0.42) (1.19) (0.97)
From net realized capital gain -- -- (0.23) (3.43) (1.38)
From return of capital (0.02) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions (0.27) (0.25) (0.65) (4.62) (2.35)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE - END OF PERIOD $ 16.38 $ 14.58 $ 17.65 $ 26.06 $ 30.55
========== ========== ========== ========== ==========
TOTAL RETURN 14.26% (16.18)% (30.19)% (0.98)% 32.23%
Ratios of expenses to average net assets:
before fee waivers 0.85% 0.52% 0.46% 0.46% 0.39%
after fee waivers 0.85% 0.52% 0.46% 0.46% 0.39%
Ratios of net investment income to average net assets:
before fee waivers 1.20% 1.37% 1.87% 4.69% 3.37%
after fee waivers 1.20% 1.37% 1.87% 4.69% 3.37%
Portfolio turnover rate 414.62% 29.48% 68.11% 48.13% 52.42%
Net assets, end of period $4,458,743 $47,875,984 $58,468,898 $72,121,697 $41,838,180
* Based on the average daily number of shares outstanding throughout each period
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(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 five diversified series: 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, caffeinated beverages or tobacco products, meat
packing, pornography, or casinos and other gambling concerns.
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/Credit 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.
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(2) INVESTMENT OBJECTIVES - (CONTINUED)
The Large Cap Equity Fund's objective is to provide capital growth and
income by attempting to match the performance, before expenses, of a widely
recognized index of large cap equities, which will be specified by the
Advisory Committee from time to time. 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, before expenses, of a widely
recognized index of small cap equities, which will be specified by the
Advisory Committee from time to time. 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.
(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.
Money market securities held by the 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.
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(3) SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
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.
Income and capital gains of the Funds are determined in accordance
with both tax regulations and accounting principles generally accepted
in the United States of America. 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.
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.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.
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. As of September 30, 2003
there were no forward exchange contracts outstanding.
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(3) SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
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. As of September 30, 2003, there were no future
contracts outstanding.
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. All
ongoing registration expenses will be paid by the Funds.
I. SECURITY LOANS
The Funds may receive fees or retain a portion of interest on the cash
received as collateral for lending securities. A Fund also continues
to receive interest or dividends on the securities loaned. Securities
loaned are secured by collateral whose market value must always exceed
the market value of the securities loaned plus accrued interest. Gains
or losses in the market price of the securities loaned that may occur
during the term of the loan are reflected in the value of the Fund.
J. USE OF ESTIMATES
In preparing financial statements in accordance with accounting
principles generally accepted in the United States of America,
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 and the reported amounts of increases and decreases in net
assets from operations during the reporting period. Actual results
could differ from those estimates.
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(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 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 million 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 0.075% of each
Fund's average daily net assets.
(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 0.25% of the average daily net assets
of the Class A shares of each Fund.
Certain officers of the Trust are also officers of Capstone and the
Distributor.
(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 year from October 1, 2002 to September 30, 2003 were
as follows:
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(6) SHARES OF CAPITAL STOCK - (CONTINUED)
CLASS A CLASS C
------- -------
SHARES DOLLARS SHARES DOLLARS
-------------- -------------- -------------- --------------
SHORT-TERM BOND FUND:
Sold 58,780 $ 1,500,998 18,735,978 $ 480,899,879
Reinvested 524 13,394 38,023 972,070
Redeemed (45,655) (1,165,507) (18,817,815) (482,913,680)
-------------- -------------- -------------- --------------
Net Increase (decrease) 13,649 $ 348,885 (43,814) $ (1,041,731)
============== ============== ============== ==============
BOND FUND:
Sold 957,471 $ 24,788,162 5,194,084 $ 135,291,364
Reinvested 73,366 1,891,367 16,843 436,435
Redeemed (543,316) (14,037,125) (7,320,645) (189,677,376)
-------------- -------------- -------------- --------------
Net Increase (decrease) 487,521 $ 12,642,404 (2,109,718) $ (53,949,577)
============== ============== ============== ==============
LARGE CAP EQUITY FUND:
Sold 919,898 $ 19,652,394 242,399 $ 4,927,528
Reinvested 22,184 472,363 15,889 340,029
Redeemed (145,237) (3,115,635) (5,375,371) (113,303,687)
-------------- -------------- -------------- --------------
Net Increase 796,845 $ 17,009,122 (5,117,083) $ (108,036,130)
============== ============== ============== ==============
SMALL CAP EQUITY FUND:
Sold 248,655 $ 6,173,194 30,963 $ 835,036
Reinvested 17,977 425,444 57,548 1,371,184
Redeemed (56,008) (1,389,799) (2,583,735) (61,310,567)
-------------- -------------- -------------- --------------
Net Increase 210,624 $ 5,208,839 (2,495,224) $ (59,104,347)
============== ============== ============== ==============
INTERNATIONAL FUND:
Sold 1,151,348 $ 17,952,278 39,961,640 $ 626,002,219
Reinvested 7,126 113,933 6,132 95,185
Redeemed (978,346) (15,293,361) (42,978,264) (674,160,815)
-------------- -------------- -------------- --------------
Net Increase (decrease) 180,128 $ 2,772,850 (3,010,492) $ (48,063,411)
============== ============== ============== ==============
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 fiscal year from October 1, 2001 to September 30,
2002 were as follows:
CLASS A CLASS C
------- -------
SHARES DOLLARS SHARES DOLLARS
-------------- -------------- -------------- --------------
SHORT-TERM BOND FUND:
Sold 135,690 $ 3,491,498 700,102 $ 18,077,361
Reinvested 223 5,705 43,541 1,110,346
Redeemed (143,963) (3,707,338) (626,724) (16,162,783)
-------------- -------------- -------------- --------------
Net Increase (decrease) (8,050) $ (210,135) $ 116,919 $ 3,024,924
============== ============== ============== ==============
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(6) SHARES OF CAPITAL STOCK - (CONTINUED)
CLASS A CLASS C
------- -------
SHARES DOLLARS SHARES DOLLARS
-------------- -------------- -------------- --------------
BOND FUND:
Sold 548,782 $ 13,803,903 349,309 $ 8,997,268
Issued in acquisition 108,909 2,669,069 196,392 4,784,036
Reinvested 50,097 1,249,941 33,317 830,350
Redeemed (93,095) (2,320,428) (854,592) (21,798,790)
-------------- -------------- -------------- --------------
Net Increase (decrease) 614,693 $ 15,402,485 (275,574) $ (7,187,136)
============== ============== ============== ==============
LARGE CAP EQUITY FUND:
Sold 649,445 $ 15,564,124 392,766 $ 9,385,558
Reinvested 15,461 364,096 25,219 621,564
Redeemed (54,673) (1,278,914) (344,291) (7,782,773)
-------------- -------------- -------------- --------------
Net Increase 610,233 $ 14,649,306 73,694 $ 2,224,349
============== ============== ============== ==============
SMALL CAP EQUITY FUND:
Sold 197,223 $ 5,636,173 142,647 $ 3,846,713
Reinvested 26,231 746,580 139,027 3,984,858
Redeemed (36,007) (963,697) (131,018) (3,327,171)
-------------- -------------- -------------- --------------
Net Increase 187,447 $ 5,419,056 150,656 $ 4,504,400
============== ============== ============== ==============
INTERNATIONAL FUND:
Sold 170,171 $ 3,039,240 2,878,471 $ 48,640,619
Reinvested 3,503 59,728 3,857 66,242
Redeemed (45,520) (815,262) (2,912,713) (49,859,777)
-------------- -------------- -------------- --------------
Net Increase (decrease) 128,154 $ 2,283,706 (30,385) $ (1,152,916)
============== ============== ============== ==============
(7) INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term
securities) by the Funds for the year ended September 30, 2003 were as
follows:
----------------------------------------------------------------------
PURCHASES SALES
--------- -----
----------------------------------------------------------------------
Short-Term Bond Fund $221,832,488 $219,652,264
----------------------------------------------------------------------
Bond Fund 57,768,995 95,872,894
----------------------------------------------------------------------
Large Cap Equity Fund 34,388,621 123,940,012
----------------------------------------------------------------------
Small Cap Equity Fund 12,015,870 68,594,522
----------------------------------------------------------------------
International Fund 71,138,740 115,290,789
----------------------------------------------------------------------
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(8) SECURITIES LENDING
As of September 30, 2003, each Fund had loaned securities in return for cash
collateral, which was invested in various short-term, fixed income securities
such as repurchase agreements, commercial paper and government and corporate
notes and bonds. The risks to the Fund from securities lending are that the
borrower may not provide additional collateral when required or return the
securities when due or when called by the Fund. The value of the securities on
loan and the value of the related collateral were as follows:
----------------------------------------------------------------------
SECURITIES COLLATERAL
---------- ----------
----------------------------------------------------------------------
Short-Term Bond Fund $ 9,365,036 $ 9,598,300
----------------------------------------------------------------------
Bond Fund 16,957,248 17,303,878
----------------------------------------------------------------------
Large Cap Equity Fund 867,308 919,376
----------------------------------------------------------------------
Small Cap Equity Fund 956,061 1,019,590
----------------------------------------------------------------------
International Fund 98,905 101,900
----------------------------------------------------------------------
(9) TAX MATTERS
As of September 30, 2003, the components of distributable earnings on a tax
basis for each Fund were as follows:
----------------------------------------------------------------------
UNDISTRIBUTED UNDISTRIBUTED UNREALIZED
ORDINARY INCOME LONG-TERM GAIN APPRECIATION/
(DEPRECIATION)
----------------------------------------------------------------------
Short-Term Bond Fund $ -- $ 109,682 $ 325,967
----------------------------------------------------------------------
Bond Fund 51,629 -- 3,802,910
----------------------------------------------------------------------
Large Cap Equity Fund 8,128 -- (13,752,964)
----------------------------------------------------------------------
Small Cap Equity Fund 4,563 -- 1,003,729
----------------------------------------------------------------------
International Fund -- -- 1,299,464
----------------------------------------------------------------------
Net investment income and realized gains and losses for federal income tax
purposes differ from that reported in the financial statements because of
permanent and temporary book and tax differences. The difference between
book basis and tax-basis unrealized appreciation (depreciation) is
attributable primarily to the tax deferral of losses on wash sales.
As of September 30, 2003 the Funds had capital loss carryforwards and
deferrals available for federal income tax purposes as follows:
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(9) TAX MATTERS - (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------------
DEFERRED FOR
CAPITAL LOSS CARRYFORWARDS EXPIRING TAX PURPOSES
SEPTEMBER 30,
- --------------------------------------------------------------------------------------------------------------------------
2008 2009 2010 2011 TOTAL
- --------------------------------------------------------------------------------------------------------------------------
Short-Term Bond Fund $ -- $ -- $ -- $ -- $ -- $ (9,444)
- --------------------------------------------------------------------------------------------------------------------------
Bond Fund (127,397) (448,959) -- (182,388) (758,744) (170,499)
- --------------------------------------------------------------------------------------------------------------------------
Large Cap Equity Fund -- -- (1,366,325) (6,803,986) (8,170,311) (151,101)
- --------------------------------------------------------------------------------------------------------------------------
Small Cap Equity Fund -- -- -- (846,350) (846,350) (67,551)
- --------------------------------------------------------------------------------------------------------------------------
International Fund -- (1,659,946) (4,744,263) (8,667,933) (15,072,142) (378,340)
- --------------------------------------------------------------------------------------------------------------------------
The losses deferred for tax purposes consist of losses on wash sales and
post-October capital losses.
(10) DISTRIBUTIONS TO SHAREHOLDERS
The tax character of distributions paid for the years ended September 30,
2003 and 2002 were as follows:
Distributions paid during the year ended September 30, 2003:
----------------------------------------------------------------------
Ordinary Long Term Tax Return
Income Capital Gain of Capital
----------------------------------------------------------------------
Short-Term Bond Fund $ 834,033 $ 262,503 $ 17,005
----------------------------------------------------------------------
Bond Fund 2,681,195 -- --
----------------------------------------------------------------------
Large Cap Equity Fund 881,910 -- --
----------------------------------------------------------------------
Small Cap Equity Fund 59,708 3,205,174 --
----------------------------------------------------------------------
International Fund 208,572 -- 13,670
----------------------------------------------------------------------
Distributions paid during the year ended September 30, 2002:
----------------------------------------------------------------------
Long Term
Ordinary Income Capital Gain
----------------------------------------------------------------------
Short-Term Bond Fund $1,237,800 $ 859,236
----------------------------------------------------------------------
Bond Fund 4,928,074 --
----------------------------------------------------------------------
Large Cap Equity Fund 2,012,980 --
----------------------------------------------------------------------
Small Cap Equity Fund 1,097,633 8,558,649
----------------------------------------------------------------------
International Fund 877,197 --
----------------------------------------------------------------------
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SEPTEMBER 30, 2003
- --------------------------------------------------------------------------------
(11) RECLASS OF CAPITAL ACCOUNTS
In accordance with accounting pronouncements, the Bond, Large Cap, Small
Cap and International Funds have recorded capital gain (loss)
reclassifications in the capital accounts. The primary reason for the
reclassifications was a redemption in kind completed on November 5, 2002.
These reclassifications have no impact on the net asset value of the Funds
and are designed generally to present undistributed capital gains
(accumulated losses) during the period on a tax basis which is considered
to be more informative to the shareholder. As of September 30, 2003, the
Funds recorded the following reclassifications to increase (decrease) the
capital accounts listed below:
------------------------------------------------------------------------
Net realized
gain
Undistributed Net (Accumulated Paid-in
Investment Income losses) Capital
------------------------------------------------------------------------
Bond Fund $ -- $ (2,422,668) $ 2,422,668
------------------------------------------------------------------------
Large Cap Equity Fund -- 43,646,584 (43,646,584)
------------------------------------------------------------------------
Small Cap Equity Fund -- 6,889,572 (6,889,572)
------------------------------------------------------------------------
International Fund (19,989) 19,751,345 (19,731,356)
------------------------------------------------------------------------
(12) REDEMPTION IN KIND
In October, 2002, Capstone Social and Ethic Religious Values Fund received
a request for a significant redemption from the Funds within the Trust. The
Funds exercised their right to pay the redemption proceeds in securities
from the Funds' portfolios rather than in cash. On November 5, 2002 the
redemption in kind was completed. As a result of the redemption in kind,
the Bond, Large Cap Equity, Small Cap Equity and International Funds
incurred realized gains (losses) as follows:
---------------------------------------------------------------------------
Net Realized Gain
(Loss) on Redemption
In Kind
---------------------------------------------------------------------------
Bond Fund $ 2,442,668
---------------------------------------------------------------------------
Large Cap Equity Fund (43,646,584)
---------------------------------------------------------------------------
Small Cap Equity Fund (6,889,572)
---------------------------------------------------------------------------
International Fund (19,731,356)
---------------------------------------------------------------------------
BRIGGS
BUNTING &
DOUGHERTY, LLP
- --------------------------------------------------------------------------------
Certified Public Accountants and Business Advisors
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
Short-Term Bond Fund, the Bond Fund, the Large Cap Equity Fund, the Small Cap
Equity Fund, and the International Fund), including the schedules of
investments, as of September 30, 2003, the related statements of operations for
the year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. 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 ours audits in accordance with auditing standards generally
accepted in the United States of America. 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, 2003, 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 that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds comprising Capstone Social Ethics and Religious Values Fund as of
September 30, 2003, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States of America.
BRIGGS, BUNTING & DOUGHERTY, LLP
PHILADELPHIA, PENNSYLVANIA
OCTOBER 24, 2003
CAPSTONE SOCIAL ETHICS AND RELIGIOUS VALUES FUND
NOTICE TO SHAREHOLDERS (UNAUDITED)
The Short Term Bond Fund hereby designates $262,503 as a capital gain
distribution. The Small Cap Equity Fund hereby designates $3,205,174 as a
capital gain distribution.
For the fiscal year ended September 30, 2003, certain dividends paid by the
Large Cap Equity, Small Cap Equity and International Funds may be subject to a
maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief
Reconciliation Act of 2003 ("the Act"). The Funds intend to designate up to the
maximum amount of such dividends allowable under the Act. Complete information
will be reported in conjunction with your 2003 Form 1099-DIV.
TRUSTEES AND OFFICERS
The following tables set forth information concerning the trustees and officers
of the Trust. All persons named as trustees and officers also serve in similar
capacities for other funds administered or managed by Capstone Asset Management
Company. The Statement of Additional Information includes additional information
about fund trustees and is available upon request, without charge, by calling
1-800-262-6631.
OTHER
TERM OF NUMBER OF PORTFOLIOS DIRECTORSHIPS/
OFFICE AND IN FUND COMPLEX TRUSTEESHIPS
POSITION(S) LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
NAME, ADDRESS AND AGE HELD WITH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR/TRUSTEE DIRECTOR/TRUSTEE
- --------------------- -------------- ----------- ------------------- ---------------- ----------------
INTERESTED TRUSTEE
- ------------------
Edward L. Jaroski* ** Trustee, Since 1998 President and Director of 7 None
5847 San Felipe, Suite President & Capstone Asset
4100 Chairman of Management; President and
Houston, TX 77057 the Board Director of Capstone
Age: 56 Asset Planning Company
and Capstone Financial
Services, Inc.
INDEPENDENT TRUSTEE
- -------------------
John R. Parker Trustee Since 1998 Self-employed Investor 7 None
5847 San Felipe, Suite Consultant
4100
Houston, TX 77057
Age: 57
Bernard J. Vaughan Trustee Since 1998 Retired 7 None
200 N. Wynnewood Avenue
#A-112
Wynnewood, PA 19096
Age: 74
James F. Leary Trustee Since 1998 Financial Consultant; 7 Director-Prospect
15851 N. Dallas Managing Director of Street High
Parkway #500 Benefit Capital Southwest Income Fund and
Addison, TX 75001 Prospect Street
Age: 73 Income Fund;
Director-Associate
Materials, Inc.
(1988-2001);
Director-Pacesetter
Capital Group
Leonard B. Melley, Jr. Trustee Since 2001 CEO/President of Freedom 7 None
** Stores, Inc.
6216 Yadkin Road
Fayetteville, NC 28303
Age: 43
EXECUTIVE OFFICERS
- ------------------
Dan E. Watson Executive Since 1998 Executive Vice N/A None
5847 San Felipe, Suite Vice President President/CIO of Capstone
4100 Asset Management Company
Houston, TX 77057 & Capstone Financial
Age 54 Services, Inc.; Vice
President of Capstone
Asset Planning Company &
Officer of Capstone Funds
OTHER
TERM OF NUMBER OF PORTFOLIOS DIRECTORSHIPS/
OFFICE AND IN FUND COMPLEX TRUSTEESHIPS
POSITION(S) LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
NAME, ADDRESS AND AGE HELD WITH FUND TIME SERVED DURING PAST 5 YEARS DIRECTOR/TRUSTEE DIRECTOR/TRUSTEE
- --------------------- -------------- ----------- ------------------- ---------------- ----------------
Donald R. McFadden Sr. Vice Since 1998 Sr. Vice President of N/A None
5847 San Felipe, Suite President Capstone Asset Management
4100 Company and Capstone
Houston, TX 77057 Asset Planning Company;
Age: 47 Officer of Capstone Funds
Howard S. Potter Sr. Vice Since 1998 Managing N/A None
5847 San Felipe, Suite President Director/Portfolio
4100 Manager of Capstone Asset
Houston, TX 77057 Management Company;
Age: 52 Managing Director of
Capstone Financial
Services, Inc.; Vice
President of Capstone
Asset Planning Company;
Officer of Capstone Funds
John R. Wolf Sr. Vice Since 1998 Sr. Vice N/A None
5847 San Felipe, Suite President President/Portfolio
4100 Manager of Capstone Asset
Houston, TX 77057 Management Company; Sr.
Age: 41 Vice President of
Capstone Asset Planning
Company; Officer of
Capstone Funds
Robert A. Karisch Assistant Since 1998 Assistant Vice President, N/A None
5847 San Felipe, Suite Vice President Sales of Capstone Asset
4100 Management Company;
Houston, TX 77057 Assistant Vice President
Age: 37 of Capstone Asset
Planning Company; Officer
of Capstone Funds
Linda G. Giuffre Secretary/ Since 1998 Vice President, N/A None
5847 San Felipe, Suite Treasurer Compliance of Capstone
4100 Asset Management Company,
Houston, TX 77057 and Capstone Asset
Age 41 Planning Company; Officer
of Capstone Funds
David F. Ganley Assistant Since 2002 Managing Director of N/A None
630 Fitzwatertown Road Secretary InCap Group, Inc.; Chief
Willow Grove, PA 19090 Administrative Officer of
Age: 56 InCap Service Company;
President and Treasurer
of InCap Securities,
Inc.; Officer of Capstone
Funds
* Mr. Jaroski is an "interested person" of SERV as defined in the Investment
Company Act of 1940, because of his position with the Adviser and Distributor.
** These individuals are brothers-in-law.
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to its Boards of Directors/Trustees of the Funds.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Audit Committee Financial Expert - Bernard J. Vaughan
Mr. Vaughan is independent under applicable rules.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
CAPSTONE SOCIAL ETHICS & RELIGIOUS VALUES FUND
N-CSR DISCLOSURE
SEPTEMBER 30, 2003
Item 4
2003 2002
-------------------
A. Audit Fees 45,500 44,000 FEES FOR SERV ONLY
B. Audit Related Fees -- --
C. Tax Fees 7,500 6,000 TAX COMPLIANCE - SERV ONLY
D. All Other Fees -- --
E. Preapproval policies are in place and will be forwarded upon request. 100%
of service described in b through d were pre-approved by the audit
committee
F. Not applicable - All work performed by BBD's principal employees
G. 2002 - 32,000 - For audit and tax services to Capstone Financial Services,
Inc. (and its wholly-owned subsidiaries Capstone Asset Management Co.
and Capstone Asset Planning Company). Also includes an audit of
CAMCO's investment performance in accordance with AIMR Performance
Presentation Standards.
2003 - 31,800 - For audit and tax services to Capstone Financial Services,
Inc. (and its wholly-owned subsidiaries Capstone Asset Management Co.
and Capstone Asset Planning Company). Also includes an audit of
CAMCO's investment performance in accordance with AIMR Performance
Presentation Standards.
H. Not applicable - All non-audit services rendered to the registrant's
investment adviser were pre-approved.
ITEMS 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. RESERVED
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. RESERVED
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive office and principal financial officer
has concluded that the registrant's disclosure controls and procedures (as
defined in rule 30a-2(c) under the Investment Company Act of 1940, as
amended (the "1940 Act") are effective based on their evaluation of these
controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were so significant changes in the registrant's internal controls or
in other factors that could affect these controls subsequent to the date of
their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
(a) Code of Ethics for the Boards of Directors/Trustees of the Funds is filed
herewith.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act
(17 CFR 270.30a-2) in the exact form set forth below:
SIGNATURES
[See General Instruction F]
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Capstone Social Ethics & Religious Values Fund
-------------------------------------------------------------------
By (Signature and Title)* /s/ Edward L. Jaroski President
------------------------------------------------------
Date December 15, 2003
---------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Edward L. Jaroski, President
------------------------------------------------------
Date December 15, 2003
---------------------------------------------------------------------------
By (Signature and Title)* /s/ Linda G. Giuffre, Secretary/Treasurer
------------------------------------------------------
Date December 15, 2003
---------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.