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 811-8056
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MMA Praxis Mutual Funds
(Exact name of registrant as specified in charter)
P.O. Box 483, Goshen, IN 46527
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(Address of principal executive offices) (Zip code)
Anthony Zacharski, Dechert LLP, 200 Clarendon Street, 27th Floor,
Boston, MA 02116
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(Name and address of agent for service)
Registrant's telephone number, including area code: (513) 878-4000
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Date of fiscal year end: 12/31
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Date of reporting period: 12/31/08
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Reports to Stockholders.
MMA Praxis
Mutual Funds
Annual Report
for the year ending December 31, 2008
Intermediate Income Fund
Core Stock Fund
Value Index Fund
Growth Index Fund
International Fund
Small Cap Fund
[LOGO]
MMA(R)
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Stewardship
Solutions
Faith in
the future
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Table of contents
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Table of contents
Message from the President ............................................... 1
MMA Praxis Stewardship Investing Report .................................. 2
MMA Praxis Intermediate Income Fund
Portfolio managers' letter ............................................ 5
Performance review .................................................... 7
Schedule of portfolio investments ..................................... 9
MMA Praxis Core Stock Fund
Portfolio managers' letter ............................................ 17
Performance review .................................................... 18
Schedule of portfolio investments ..................................... 20
MMA Praxis Value Index Fund
Portfolio manager's letter ............................................ 24
Performance review .................................................... 25
Schedule of portfolio investments ..................................... 27
MMA Praxis Growth Index Fund
Portfolio manager's letter ............................................ 36
Performance review .................................................... 37
Schedule of portfolio investments ..................................... 39
MMA Praxis International Fund
Portfolio manager's letter ............................................ 48
Performance review .................................................... 51
Schedule of portfolio investments ..................................... 53
MMA Praxis Small Cap Fund
Portfolio manager's letter ............................................ 60
Performance review .................................................... 61
Schedule of portfolio investments ..................................... 63
Statements of assets and liabilities ..................................... 67
Statements of operations ................................................. 71
Statements of changes in net assets ...................................... 73
Financial highlights ..................................................... 75
Notes to financial statements ............................................ 87
Report of Independent Registered Public Accounting Firm .................. 101
Additional fund information (unaudited) .................................. 102
Management of the Trust (unaudited) ...................................... 107
Glossary of Terms
Barclay's Capital Aggregate Index is an unmanaged index composed of the
Barclay's Capital Government/Credit Index and the Barclay's Capital
Mortgage-Backed Securities Index and includes treasury issues, agency issues,
corporate bond issues and mortgage-backed securities.
The Morgan Stanley Capital International-Europe, Australia and the Far East
Index (MSCI-EAFE Index) is a widely recognized unmanaged index composed of a
sample of companies representative of the markets of Europe, Australia, Asia and
the Far East.
The Morgan Stanley Capital All Country World Free (ex. U.S.) Index is a widely
recognized, unmanaged index composed of a sample of companies representative of
the markets of both developed and emerging markets throughout the world,
excluding the United States.
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500 Index") is a
widely recognized, unmanaged index of 500 selected common stocks, most of which
are listed on the New York Stock Exchange.
Standard & Poor's 500/Citigroup Value Index (the "S&P 500/Cititgroup Value
Index"), is unmanaged and is constructed by dividing the stocks in the S&P 500
Index into two categories, growth and value, according to price-to-book ratios.
Prior to December 16, 2005, this index represented the S&P/Barra Value Index.
The Domini 400 Social Index is an unmanaged index of 400 common stocks that pass
multiple broad-based social screens and is intended to be generally
representative of the socially responsible investment market.
MSCI - Prime Market Value Index represents the value companies of the MSCI Prime
Market 750 Index. The MSCI Prime Market 750 Index represents the Universe of
large and medium capitalization companies in the U.S. equity market.
Gross Domestic Product (the "GDP"), is the measure of the market value of the
goods and services produced by labor and property in the United States.
Consumer Price Index (the "CPI"), is an index of prices used to measure the
change in the cost of basic goods and services in comparison with a fixed base
period.
Price-to-Earnings Ratio (the "P/E Ratio"), is a valuation ratio of a company's
current share price compared to its per-share earnings.
SuperComposite 1500 Index. Large-cap core funds have more latitude in the
companies in which they invest. These funds typically have an average
price-to-earnings ratio, price to-book ratio, and three-year sales-per share
growth value, compared to the S&P 500 Index.
The above indices are unmanaged and do not reflect the deduction of expenses
associated with a mutual fund, such as investment management and fund accounting
fees. An investor cannot invest directly in an index, although they can invest
in the underlying securities.
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Message from the President
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Message from the President
Dear Shareholder:
2008 was an extremely difficult and unstable year for investors. Unprecedented
volatility and the realization we were facing a global recession contributed to
the uncertainty and turbulence.
Much of the volatility related to the uncertainty of the underlying value of
subprime mortgages. With this uncertainty came fear, which spread throughout the
capital markets, missing no sector. Credit dried up and companies had no
available cash with which to operate. Bankruptcies followed, as well as the need
for government to prop up some companies with large infusions of capital.
Domestic equities, as measured by the Standard & Poor's 500 Index, declined by
36.99 percent for the one year period ending December 31, 2008. The MMA Core
Stock Class A Share (NAV) underperformed its benchmark and was down 40.64
percent. Over the same period, the Class A Share (NAV) of the Value Index Fund
declined by 40.15 percent, the Class A Share (NAV) of the Growth Index Fund
declined by 37.34 percent, and the Class A Share (NAV) of the Small Cap Fund
declined by 38.74 percent.
The international equity benchmark MSCI EAFE Index was down by 43.38 percent for
the one-year period ending December 31, 2008, reflecting the belief that the
recession will be world-wide. While there is little comfort in these negative
returns, the MMA Praxis International Class A Share (NAV) outperformed its
benchmark over the one year period and was down 41.01 percent. The International
Fund also outperformed its benchmark over the 3- and 5-year period.
As noted, MMA Praxis Funds were not immune from the turbulence. Our returns
reflect the volatility in the broader markets and we expect that volatility to
continue for the short-term. Conventional wisdom holds that the stock market is
a reflection of the anticipated earnings of publicly traded companies.
Therefore, we believe at some point volatility will subside and stability will
return. Fear will be replaced by confidence. But in 2008 investor fear and
uncertainty drove the markets.
One of the bright spots, with positive returns to report, is the performance of
the MMA Praxis Intermediate Income Fund. The Class A Share (NAV) posted a gain
of 3.09 percent for the one-year period ending December 31, 2008, with 3-year
annualized returns of 4.20 percent and 5-year annualized returns of 3.63
percent. The fund also performed well relative to its peers over these time
periods.
I want to personally express appreciation for the leadership that John Liechty
provided to the MMA Praxis Funds over the last 11 years. Under his capable
leadership additional funds were introduced and significant progress was made in
the areas of advocacy and community development investments. We are grateful for
that work.
In the following pages you will find portfolio managers' letters and performance
review for each of the funds. Please read them for further expansion and
explanation of the events of 2008.
Thank you for being an investor with MMA Praxis Mutual Funds. As a faith-based
mutual fund family, we remain committed to being stewards of the resources you
entrust to us, and we are grateful for your confidence.
Sincerely,
/s/ David C. Gautsche
David C. Gautsche
President
1
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MMA Praxis Stewardship Investing Report
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MMA Praxis Stewardship Investing Report
Relearning the economics of hope
For those of us who've been able to invest over the past two decades or so, it
has often become too easy to disassociate financial returns from the emotional
and psychological connections the markets have to the belief that there can be,
there will be, a better tomorrow for everyone. Investing can easily become just
about the money, with growth taken for granted.
Now, amidst one of the worst economic downturns in our nation's history, we are
all learning about the need for hope as a foundation for our economic lives. And
even more, we are being schooled that - contrary to decades of Wall Street
assumptions - it is not just our own personal sense of hope that is important.
In a world where economic activity is commoditized, packaged, and resold for
global consumption, our hope for a better future is linked to and dependent on
the hopes of millions, even billions, of others around the world.
We can see with fresh eyes the importance of "hope-based" measurements like the
Consumer Confidence Index (now near a historical low), new housing starts (at a
16-year low), and many others. We can begin to see that our hope for a secure
retirement is linked to the hope of a teacher in California to successfully
purchase an affordable home, and to the hope of a Cambodian garment worker to
break the cycle of poverty by sending his son to school, and to the hope of a
recent college graduate to climb out from under a mountain of credit card debt.
Our long-term hopes are linked to the success of theirs. All of these dreams are
not just a resource to be strip-mined to help achieve the dreams of others. Such
short-term strategies are failing in our global society, the economic circle is
closing.
People of faith, however, are familiar with the long-term perspective and the
importance of hope. When it comes to investing, it is this commitment to a world
that offers "hope for all" that inspires our passion to engage the economic
system. In 2008, we had a number of important opportunities to speak up for hope
- - for others, for ourselves, and for our planet as a whole.
Credit card advocacy update
In an effort to restore hope to millions struggling in the current economic
environment, MMA is currently in dialogue with many of the top credit card
issuers regarding industry practices that have hurt consumer financial health
and contributed to the financial crisis. MMA has filed or co-filed shareholder
resolutions on predatory credit card lending practices at six companies:
American Express, JP Morgan Chase & Co., Discover, Citigroup, Bank of America,
and Wells Fargo, and is actively participating in shareholder engagements with
each.
MMA's objectives with credit card advocacy are to:
1) Alert management to shareholder concern regarding financial stability and
sustainability of current credit card lending practices.
2) Link benefits of short-term, negative credit card policies with long-term
risk, in light of sub-prime mortgage meltdown.
3) End misleading and deceptive credit card practices that trap borrowers in
a cycle of increasing debt.
4) Transform credit card companies into partners in the restoration of a
strong and sustainable consumer economy for their clients and the nation.
MMA believes fair and responsible management practices would benefit American
families and credit card issuers in the long run. While current practices may
have provided short-term industry profits, they have also yielded bankrupt
customers and bailout-dependent issuers. New Federal Reserve regulations may
help build a more responsible marketplace, but these policies will not take
effect until July 2010. MMA is encouraging credit card issuers to adopt the new
regulations as soon as possible, and to move above and beyond them in certain
areas, helping our country and economy now - when that help is most needed.
2
New MMA Praxis Money Market Account
Most people think of money market funds as a functional, but generally
uninspiring, part of managing their finances - that's changed. As of Oct. 1,
2008, the MMA Praxis Money Market Account (PMMA) is being offered to MMA Praxis
shareholders by ShoreBank, the nation's leading community development bank.
While a PMMA is not an MMA?Praxis Fund, this option does offer MMA Praxis
shareholders the convenience and competitive rates of a ShoreBank money market
account along with the security of FDIC protection.
In addition, assets in a PMMA account at ShoreBank will help fund new loans to
stimulate sustainable, economic development opportunities to transform
disadvantaged neighborhoods into strong communities. ShoreBank provides access
to an array of quality, affordable financial services in underserved,
low-to-moderate-income urban neighborhoods in Chicago, Cleveland, and Detroit.
Since its inception in 1973, ShoreBank has helped provide more than $3.5 billion
to finance the purchase and renovation of more than 52,000 units of quality,
affordable housing, and the creation of thousands of new jobs for local
residents.
The double impact - social and financial - of the PMMA is more important today
than ever. With investors needing safe, convenient access to their invested
assets and low-income communities needing access to capital from financial
partners with their best interests at heart, this new money market option offers
returns in many different ways.
Helping ConAgra explore a sustainable future
In early October, MMA and several other socially concerned investors, met with
management from ConAgra to discuss their Corporate Citizenship Report. ConAgra
is a large food processing company that produces many supermarket items. MMA
co-filed a resolution at ConAgra in the spring on the issue of food safety and
security in their supply chain. In return for withdrawing the resolution,
ConAgra agreed to a framework and timeline for creating their report.
The meeting was collaborative and productive. ConAgra's sustainability director,
general counsel, and corporate secretary attended, and expressed their interest
in hearing the concerns and suggestions MMA and other faith-based investors had
about the company's forthcoming report. Issues raised include water and energy
use, employee conditions, and product packaging, among others. The ConAgra team
stated that the meeting was a helpful way to get input for their reporting
process. ConAgra disclosed plans to use the Global Reporting Initiative (GRI) as
a guide for their sustainability report, especially as a new supplement for food
processors is developed.
ConAgra is just completing a process for unifying and consolidating many of its
subsidiaries, which now makes it possible to complete a company-wide
sustainability report. ConAgra is developing a structure through which
information will flow to the sustainability department, for corporate analysis
and reporting. MMA will get the chance to review and make suggestions on
ConAgra's initial draft report, scheduled for late winter 2009.
A faith-based response to Hurricane Katrina
MMA Praxis Mutual Funds and the Interfaith Center on Corporate Responsibility
recently sponsored an Institute for Southern Studies report, Faith in the Gulf
Coast, the most in-depth study on the role of faith organizations in the Katrina
recovery. The study looked at more than 80 faith and community organizations in
the Gulf Coast and nationally, from store-front churches in New Orleans to major
national religious relief agencies.
3
The report documents how faith organizations became some of the most trusted
players in the relief and response effort, and the wide range of innovative
approaches religious groups are using to revitalize neighborhoods across the
Gulf Coast. The study also contains insight into ways religious organizations
and communities can prepare themselves to more fully leverage their roles in the
advent of future disasters. A full copy of the report can be found by visiting
www.mmapraxis.com.
Forced child labor on cocoa plantations
In response to a number of articles and a report from Global Exchange, a human
rights organization, shareholders began an engagement with chocolate companies
in early 2008. The problem of child slave labor in cocoa fields in West Africa
(particularly Cote D'Ivoire and Ghana) has been known for more than seven years
and has even been the subject of Congressional debate and action. The challenge
is identifying and addressing a problem in a highly commoditized industry where
the bulk of farm-level production is done by millions of small land-holders.
In 2001, the chocolate industry, facing a potential legislative labeling
mandate, agreed to voluntarily certify its cocoa "free of the worst forms of
child labor" by 2005. That date has come and gone with little change on the
ground for children.
Conversations with Hershey, one of the 10 top multinational chocolate retailers,
on July 11, 2008, focused on progress within the company, the World Cocoa
Foundation, and the International Cocoa Initiative, to find solutions to end the
abusive use of child labor in the cocoa industry that all claim to share. The
company is currently implementing a broad-based supplier code of conduct in
which they hope to integrate the child labor concerns. Shareholders are
supportive of this approach, if timely implementation can be made. Based on
shareholder recommendations, the company has secured the services of Verite, a
respected leader in the creation, implementation, and monitoring of corporate
codes of conduct. The company has increased CSR staffing, revised procurement
procedures, and is rolling out the code to Hershey's top tier (80 percent)
supplier base. An internal self-assessment, guided by Verite, is currently
underway.
MMA CDI makes first direct microfinance investment in Africa
MMA Community Development Investments committed to investing $500,000 in the
BRAC Africa Loan Fund over the next three years. This fund will provide local
currency debt financing to three microfinance institutions in Tanzania, Uganda,
and Southern Sudan, offering economic hope to hundreds of families.
With nearly $900 million in total assets, BRAC replicates a sustainable business
model in countries around the world, serving populations ignored by traditional
banking systems. One of BRAC's greatest strengths is its ability to adapt to an
area's cultural needs in order to best serve the local population. Using
microfinance as an entry point, BRAC furthers its impact by implementing several
programs, including education, health, and vocational training. BRAC strongly
adheres to its mission of poverty alleviation and empowerment of the poor
through its holistic approach, and is a true leader in the microfinance
industry.
Mark A. Regier
Stewardship Investing Services Manager
4
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MMA Praxis Intermediate Income Fund
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MMA Praxis Intermediate Income Fund
Annual report to shareholders
Portfolio managers' letter
Despite one of the most dreadful markets in memory, the MMA Praxis Intermediate
Income Fund ended with a 3.09 percent net return (Class A shares) for 2008. This
was well above the median fixed income fund's negative 4.7 percent return.
As the economy fell deeper into recession, the Federal Reserve drove short-term
interest rates to near zero levels. Using a range of strategies, the Fed pushed
Treasury rates down across the yield curve. Once this was accomplished, they
focused on agencies and mortgage backed securities, driving yields lower in
those markets as well. This was a large positive factor for the Fund with its
large holdings of these two sectors.
Fear rose to new heights as demand for safety and liquidity grew. As an example,
the five year United States Treasury yield fell from 3.45 percent on December
31, 2007, to 1.55 percent by year end. The Treasury market went from being a
risk free sector to also being a yield free sector in a matter of months.
Risk aversion drove returns sharply lower for credit related instruments and
sharply higher for governments. This left a bifurcated market with government
backed bonds producing attractive positive returns while credit related returns
were negative.
Inflation fears melted away and turned to deflation fears in a remarkably short
period. The worst months were from September to November. By December corporate
bond prices had collapsed to the point that credit yield spreads over Treasuries
were at levels last seen in the 1930s.
Commercial mortgage backed securities (CMBS) were especially disastrous,
generating losses normally associated with equities. The Fund's overweight
position in CMBS was the single biggest factor weighing down returns.
Despite all the fear and despair, the Fund performed well and even benefited
from a sizeable rally in corporate bonds, commercial mortgage back securities,
and agencies in December.
The fundamental driver of the fund's performance was the basic strategy of
controlling risk and adding yield through high quality securities with low
default risk. Our goal is to provide stable income and share values during
difficult times while providing competitive returns during good economic times.
Outlook
In our view, 2009 promises to be a year of recession, growing defaults,
declining profits, and dwindling cash flows. The offset to this is that
investment grade corporate bonds and AAA commercial mortgage backed securities
appear to be trading at security prices that would reflect the expectation of a
Second Great Depression. Government related sectors of the market are
wonderfully liquid, but nearly yieldless, which is likely to drive investors to
buy higher yielding corporate bonds.
We expect there will be a large stimulus plan intended to keep the economy from
getting worse, but a true recovery requires some sign that foreclosure problems
and residential mortgages are being dealt with. Until that happens, house prices
will continue to deteriorate and defaults will increase as unemployment rates
rise. Debt induced recessions like this are not easily reversed and recoveries
tend to be sluggish and extended.
This kind of outlook suggests a high level of risk for lower grade securities.
Fed policy is forcing investors to take risk which means finding a proper
balance between risk and opportunity will be challenging. An illustration of
this kind of trade off is our overweight exposure to CMBS. All of our holdings
are rated AAA and have substantial subordination protection against loss. We
recognize that the outlook for commercial real estate in 2009 is anything but
promising. Nevertheless, these securities give us first liens against attractive
properties that even with high defaults and moderate recoveries appear highly
likely to return all of our principal and interest - given their steeply
discounted prices. If events do not turn out to be as bad as the price levels
reflect, even a rate double the worst default rate ever experienced would be
good enough to allow double digit returns on most of these holdings.
5
At the same time we hold positions in FDIC guaranteed notes that are much more
attractive than governments and still have the backing of the U.S. government.
This year will probably see a wide range of results in fixed income funds and
volatility will be high. Our goal is to add yield without over reaching into
sectors where additional deterioration is probable.
Benjamin J. Bailey, CFA(R)
MMA Praxis Intermediate Income Fund Co-manager
Delmar King
MMA Praxis Intermediate Income Fund Co-manager
6
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Performance review
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MMA Praxis Intermediate Income Fund
Performance review
Average annual total returns as of 12/31/08
[BAR CHART]
Inception
Date 1 Year 3 Year 5 Year 10 Year
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Class A 5/12/99 3.09% 4.20% 3.63% 4.35%
Class A* 5/12/99 -0.77% 2.88% 2.84% 3.95%
Class B 1/4/94 2.63% 3.74% 3.17% 3.97%
Class B** 1/4/94 -1.30% 2.81% 3.00% 3.97%
Class I 5/1/06 3.33% 4.37% 3.55% 4.11%
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
* Reflects maximum front-end sales charge of 3.75%.
** Assumes redemption at the end of the stated period. The Fund imposes a
back-end sales charge (load) on Class B Shares if you sell your shares
before a certain period of time has elapsed. This is called a Contingent
Deferred Sales Charge ("CDSC"). The CDSC declines over five years starting
with year one and ending in year six as follows: 4%, 4%, 3%, 2%, 1%.
Class A Share and Class I Share of this Fund were not in existence prior to
5/12/99 and 5/1/06, respectively. Class A Share performance and Class I Share
performance calculated for any period prior to 5/12/99 and 5/1/06 are based on
the performance of Class B Share since inception of 1/4/94. The B Share
Contingent Deferred Sales Charge (CDSC) does not apply to performance over 5
years; therefore, the 10-year return does not reflect the CDSC.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
7
MMA Praxis Intermediate Income Fund
Performance review
Growth of $10,000 investment 12/31/98 to 12/31/08
[LINE CHART]
Barclay's Capital
Aggregate Bond
Class A* Class B Class I Index(1)
- ------------------------ -------------------------- -------------------------- -------------------------
Date Balance Date Balance Date Balance Date Balance
- ---- ------- ---- ------- ---- ------- ---- -------
12/31/1998 9,625 12/31/1998 10,000 12/31/1998 10,000 12/31/1998 10,000
3/31/1999 9,557 3/31/1999 9,929 3/31/1999 9,929 3/31/1999 9,951
6/30/1999 9,462 6/30/1999 9,823 6/30/1999 9,823 6/30/1999 9,863
9/30/1999 9,525 9/30/1999 9,880 9/30/1999 9,880 9/30/1999 9,930
12/31/1999 9,469 12/31/1999 9,810 12/31/1999 9,810 12/31/1999 9,918
3/31/2000 9,626 3/31/2000 9,964 3/31/2000 9,964 3/31/2000 10,137
6/30/2000 9,682 6/30/2000 10,023 6/30/2000 10,023 6/30/2000 10,313
9/30/2000 9,949 9/30/2000 10,279 9/30/2000 10,279 9/30/2000 10,624
12/31/2000 10,231 12/31/2000 10,565 12/31/2000 10,565 12/31/2000 11,071
3/31/2001 10,531 3/31/2001 10,865 3/31/2001 10,865 3/31/2001 11,407
6/30/2001 10,583 6/30/2001 10,909 6/30/2001 10,909 6/30/2001 11,471
9/30/2001 11,018 9/30/2001 11,348 9/30/2001 11,348 9/30/2001 12,000
12/31/2001 10,905 12/31/2001 11,221 12/31/2001 11,221 12/31/2001 12,006
3/31/2002 10,831 3/31/2002 11,135 3/31/2002 11,135 3/31/2002 12,017
6/30/2002 11,215 6/30/2002 11,520 6/30/2002 11,520 6/30/2002 12,461
9/30/2002 11,737 9/30/2002 12,045 9/30/2002 12,045 9/30/2002 13,032
12/31/2002 11,888 12/31/2002 12,190 12/31/2002 12,190 12/31/2002 13,237
3/31/2003 12,033 3/31/2003 12,327 3/31/2003 12,327 3/31/2003 13,421
6/30/2003 12,314 6/30/2003 12,602 6/30/2003 12,602 6/30/2003 13,757
9/30/2003 12,303 9/30/2003 12,563 9/30/2003 12,563 9/30/2003 13,737
12/31/2003 12,325 12/31/2003 12,572 12/31/2003 12,572 12/31/2003 13,780
3/31/2004 12,616 3/31/2004 12,855 3/31/2004 12,855 3/31/2004 14,146
6/30/2004 12,327 6/30/2004 12,546 6/30/2004 12,546 6/30/2004 13,801
9/30/2004 12,673 9/30/2004 12,885 9/30/2004 12,885 9/30/2004 14,242
12/31/2004 12,788 12/31/2004 12,987 12/31/2004 12,987 12/31/2004 14,378
3/31/2005 12,740 3/31/2005 12,923 3/31/2005 12,923 3/31/2005 14,309
6/30/2005 13,062 6/30/2005 13,236 6/30/2005 13,236 6/30/2005 14,739
9/30/2005 12,964 9/30/2005 13,117 9/30/2005 13,117 9/30/2005 14,641
12/31/2005 13,021 12/31/2005 13,161 12/31/2005 13,161 12/31/2005 14,727
3/31/2006 12,927 3/31/2006 13,049 3/31/2006 13,049 3/31/2006 14,631
6/30/2006 12,891 6/30/2006 12,997 6/30/2006 13,014 6/30/2006 14,620
9/30/2006 13,335 9/30/2006 13,426 9/30/2006 13,471 9/30/2006 15,177
12/31/2006 13,493 12/31/2006 13,569 12/31/2006 13,639 12/31/2006 15,365
3/31/2007 13,673 3/31/2007 13,734 3/31/2007 13,829 3/31/2007 15,595
6/30/2007 13,570 6/30/2007 13,630 6/30/2007 13,734 6/30/2007 15,514
9/30/2007 13,929 9/30/2007 13,973 9/30/2007 14,106 9/30/2007 15,955
12/31/2007 14,289 12/31/2007 14,317 12/31/2007 14,481 12/31/2007 16,434
3/31/2008 14,558 3/31/2008 14,586 3/31/2008 14,775 3/31/2008 16,791
6/30/2008 14,421 6/30/2008 14,449 6/30/2008 14,629 6/30/2008 16,620
9/30/2008 14,208 9/30/2008 14,235 9/30/2008 14,421 9/30/2008 16,538
12/31/2008 14,730 12/31/2008 14,758 12/31/2008 14,964 12/31/2008 17,296
For performance purposes, the above graph has not been adjusted for CDSC
charges.
This chart represents historical performance of a hypothetical investment of
$10,000 in the Intermediate Income Fund from 12/31/98 to 12/31/08, and
represents the reinvestment of dividends and capital gains in the Fund.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
* Reflects maximum front-end sales charge of 3.75%.
Class A Share and Class I Share of this Fund were not in existence prior to
5/12/99 and 5/1/06, respectively. Class A Share performance and Class I Share
performance calculated for any period prior to 5/12/99 and 5/1/06 are based on
the performance of Class B Share since inception of 1/4/94. The B Share
Contingent Deferred Sales Charge (CDSC) does not apply to performance over 5
years; therefore, the 10-year return does not reflect the CDSC.
(1) Barclay's Capital Aggregate Bond Index is an unmanaged index composed of
the Barclay's Capital Government/Credit Index and the Barclay's Capital
Mortgage-Backed Securities Index and includes Treasury issues, agency
issues, corporate bond issues and mortgage-backed securities, and is
intended to be generally representative of the bond market as a whole.
The above indices are for illustrative purposes only and the Barclay's Capital
Aggregate Bond Index does not reflect the deduction of expenses associated with
a mutual fund, such as investment management and fund accounting fees. The
Fund's performance reflects the deduction of these value-added services. An
investor cannot invest directly in an index, although they can invest in its
underlying securities.
8
---------------------------------
Schedule of portfolio investments
---------------------------------
MMA Praxis Intermediate Income Fund
Schedule of portfolio investments
December 31, 2008
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES -- 0.9%
Discover Card Master Trust, 5.10%, 10/15/13 .......................... $ 500,000 $ 469,908
PG&E Energy Recovery Funding LLC, 3.87%, 6/25/11 ..................... 180,098 180,281
Residential Funding Mortgage Securities, 5.53%, 1/25/36 .............. 881,516 858,226
Wachovia Auto Loan Owner Trust, 5.10%, 7/20/11 (a) ................... 437,047 433,559
-------------
TOTAL ASSET BACKED SECURITIES ........................................... 1,941,974
-------------
COLLATERALIZED MORTGAGE OBLIGATIONS -- 0.2%
JPMorgan Securities, Inc., 4.50%, 9/25/19 ............................ 516,851 477,911
-------------
COMMERCIAL MORTGAGE BACKED SECURITIES -- 11.2%
Banc of America Commercial Mortgage, Inc., 5.12%, 7/11/43 ............ 500,000 463,908
Bear Stearns Commercial Mortgage Securities, 5.20%, 12/1/38 .......... 2,000,000 1,631,565
Bear Stearns Commercial Mortgage Securities, 4.95%, 2/11/41 .......... 298,653 253,643
Bear Stearns Commercial Mortgage Securities, 5.12%, 2/11/41 .......... 1,000,000 804,456
Bear Stearns Commercial Mortgage Securities, 4.67%, 6/11/41 .......... 1,000,000 844,836
Bear Stearns Commercial Mortgage Securities, 5.54%, 9/11/41 .......... 2,000,000 1,568,851
Bear Stearns Commercial Mortgage Securities, 4.56%, 2/13/42 .......... 1,000,000 944,425
Bear Stearns Commercial Mortgage Securities, 5.74%, 9/11/42 .......... 1,000,000 781,129
Bear Stearns Commercial Mortgage Securities, 5.13%, 10/12/42 ......... 1,125,000 1,025,151
Bear Stearns Commercial Mortgage Securities, 5.61%, 6/11/50 .......... 1,000,000 747,698
Bear Stearns Commerical Mortgage Securities, 4.52%, 11/11/41 ......... 500,000 463,667
Chase Commercial Mortgage Securities Corp., 7.32%, 10/15/32 .......... 887,871 883,558
First Union National Bank Commercial Mortgage, 6.22%, 12/12/33 ....... 500,000 481,579
GE Capital Commercial Mortgage Corp., 6.53%, 5/15/33 ................. 850,000 830,844
GMAC Commerical Mortgage Securities, 6.47%, 4/15/34 .................. 959,714 938,166
Heller Financial Commercial Mortgage Asset Corp., 7.75%, 1/17/34 ..... 560,477 560,383
JPMorgan Chase Commercial Mortgage Securities, 4.92%, 10/15/42 ....... 1,000,000 788,610
JPMorgan Chase Commercial Mortgage Securities, 5.40%, 5/15/45 ........ 2,000,000 1,525,277
JPMorgan Chase Commercial Mortgage Securities, 4.63%, 3/15/46 ........ 1,000,000 943,170
JPMorgan Trust, 4.90%, 10/15/42 ...................................... 1,000,000 799,437
Morgan Stanley Capital, 5.01%, 1/14/42 ............................... 1,000,000 835,201
Morgan Stanley Capital, 4.83%, 6/12/47 ............................... 1,000,000 828,660
Morgan Stanley Capital I, 5.93%, 12/15/35 ............................ 1,225,000 1,141,027
Morgan Stanley Capital I, 5.98%, 8/12/41 ............................. 1,000,000 814,724
Morgan Stanley Capital I, 5.51%, 11/12/49 ............................ 2,000,000 1,561,086
PNC Mortgage Acceptance Corp., 7.51%, 12/10/32 ....................... 2,000,000 1,999,818
-------------
TOTAL COMMERCIAL MORTGAGE BACKED SECURITIES ............................. 24,460,869
-------------
CORPORATE BONDS -- 34.5%
AGRICULTURAL SERVICES -- 0.6%
Cargill, Inc., 7.50%, 9/1/26 (a) ..................................... 1,250,000 1,206,084
-------------
BANKING -- 1.6%
Bank of New York Mellon Bank, 5.13%, 8/27/13 ......................... 830,000 848,124
Citigroup, Inc., 5.13%, 5/5/14 ....................................... 1,000,000 939,679
Wachovia Corp., 7.98%, 3/15/49 (b) ................................... 500,000 426,200
Wells Fargo & Co., 5.25%, 10/23/12 ................................... 1,250,000 1,273,168
-------------
3,487,171
-------------
9
MMA Praxis Intermediate Income Fund
Schedule of portfolio investments, continued
December 31, 2008
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
CORPORATE BONDS -- 34.5%, continued
BROKERAGE SERVICES -- 0.7%
Goldman Sachs Group, Inc., 6.88%, 1/15/11 (b) ........................ $ 500,000 $ 503,653
Morgan Stanley, 5.75%, 8/31/12 (b) ................................... 1,000,000 932,414
-------------
1,436,067
-------------
BUILDING MATERIALS & CONSTRUCTION -- 0.3%
Martin Marietta Material, 6.60%, 4/15/18 (b) ......................... 1,000,000 744,834
-------------
CHEMICALS - DIVERSIFIED -- 0.5%
E.I. Du Pont de Nemours & Co., 5.88%, 1/15/14 ........................ 1,000,000 1,029,571
-------------
COMMERCIAL BANKS -- 1.2%
American Express Bank FSB, 5.55%, 10/17/12 (b) ....................... 630,000 598,465
Bank of America Corp., 7.75%, 8/15/15 ................................ 1,000,000 1,022,661
State Street Corp., 7.35%, 6/15/26 ................................... 1,000,000 1,100,355
-------------
2,721,481
-------------
COMPUTER & OFFICE EQUIPMENT -- 0.4%
Xerox Corp., 6.35%, 5/15/18 (b) ...................................... 1,000,000 782,094
-------------
COMPUTER SERVICES -- 0.7%
Dell, Inc., 4.70%, 4/15/13 (b) ....................................... 500,000 470,377
Hewlett-Packard Co., 4.50%, 3/1/13 (b) ............................... 1,000,000 1,015,084
-------------
1,485,461
-------------
DIVERSIFIED MANUFACTURING -- 0.9%
Cooper US, Inc., 5.45%, 4/1/15 (b) ................................... 1,000,000 1,010,849
Harsco Corp., 5.75%, 5/15/18 ......................................... 1,000,000 1,012,910
-------------
2,023,759
-------------
ELECTRIC - INTEGRATED -- 2.3%
Atlantic City Electric Co., 7.75%, 11/15/18 .......................... 500,000 556,471
Midamerican Energy Co., 6.75%, 12/30/31 .............................. 1,500,000 1,537,705
Pacific Gas & Electric Co., 8.25%, 10/15/18 (b) ...................... 500,000 600,731
Potomac Electric Power, 6.50%, 11/15/37 .............................. 1,000,000 976,117
Puget Sound Energy, Inc., 6.74%, 6/15/18 ............................. 1,000,000 1,004,096
Transalta Corp., 6.65%, 5/15/18 ...................................... 500,000 443,993
-------------
5,119,113
-------------
ELECTRIC SERVICES -- 0.7%
AEP Texas North Co., Series B, 5.50%, 3/1/13 ......................... 1,000,000 957,126
FPL Energy Caithness Funding, 7.65%, 12/31/18 (a) .................... 700,307 654,668
-------------
1,611,794
-------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS -- 0.2%
Applied Materials, Inc., 7.13%, 10/15/17 ............................. 500,000 460,916
-------------
FINANCE - AUTO LOANS -- 1.4%
American Honda Finance, 4.63%, 4/2/13 ................................ 1,500,000 1,396,955
Ford Motor Credit Co., 7.25%, 10/25/11 ............................... 1,000,000 730,509
Ford Motor Credit Co., 8.00%, 12/15/16 ............................... 500,000 325,684
General Motors Acceptance Corp., 6.75%, 12/1/14 ...................... 750,000 512,735
-------------
2,965,883
-------------
10
MMA Praxis Intermediate Income Fund
Schedule of portfolio investments, continued
December 31, 2008
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
CORPORATE BONDS -- 34.5%, continued
FINANCIAL SERVICES -- 3.8%
Countrywide Financial Corp., 5.80%, 6/7/12 (b) ....................... $ 1,000,000 $ 974,653
Dun & Bradstreet Corp., 6.00%, 4/1/13 ................................ 1,000,000 944,547
ERAC USA Finance Co., 5.90%, 11/15/15 (a) ............................ 1,000,000 726,278
General Electric Capital Corp., 6.88%, 11/15/10 ...................... 1,000,000 1,050,640
General Electric Capital Corp., 6.15%, 8/7/37 (b) .................... 1,000,000 1,002,616
JPMorgan Chase & Co., 4.75%, 5/1/13 (b) .............................. 1,000,000 986,769
National Rural Utilities Corp., 10.38%, 11/1/18 ...................... 500,000 585,204
NYSE Euronext, 4.80%, 6/28/13 ........................................ 1,000,000 969,954
SLM Corp., 4.00%, 1/15/09 ............................................ 1,000,000 995,433
-------------
8,236,094
-------------
FIRE, MARINE & CASUALTY INSURANCE -- 0.4%
Berkley Corp., 5.13%, 9/30/10 ........................................ 1,000,000 896,901
-------------
FOODS -- 1.8%
General Mills, 5.65%, 9/10/12 ........................................ 936,000 955,408
H.J. Heinz Co., 15.59%, 12/1/11 (a) .................................. 850,000 950,402
Kellogg Co., 4.25%, 3/3/13 (b) ....................................... 1,000,000 968,392
Kraft Foods, Inc., 6.75%, 2/19/14 .................................... 500,000 518,883
Pepsico, Inc., 7.90%, 11/1/18 ........................................ 500,000 612,824
-------------
4,005,909
-------------
INSURANCE -- 2.1%
AllState Life Global Funding Trust, 5.38%, 4/30/13 (b) ............... 500,000 492,199
American International Group, 6.25%, 5/1/36 .......................... 1,000,000 561,607
Chubb Corp., 6.50%, 5/15/38 (b) ...................................... 500,000 477,328
Fidelity National Title, 7.30%, 8/15/11 .............................. 1,000,000 1,080,413
Markel Corp., 6.80%, 2/15/13 ......................................... 1,000,000 883,540
Principal Life Global, 6.25%, 2/15/12 (a) ............................ 1,000,000 993,753
-------------
4,488,840
-------------
INTERNAL COMBUSTION ENGINES, N.E.C. -- 0.4%
Briggs & Stratton Corp., 8.88%, 3/15/11 (b) .......................... 1,000,000 930,000
-------------
MEDIA -- 0.6%
Comcast Corp., 5.70%, 5/15/18 (b) .................................... 500,000 468,904
McGrawHill Companies, Inc., 5.38%, 11/15/12 .......................... 1,000,000 909,792
-------------
1,378,696
-------------
MEDICAL - BIOMEDICAL/GENETIC -- 0.5%
Biogen Idec, Inc., 6.00%, 3/1/13 ..................................... 500,000 494,544
Johnson & Johnson, 5.95%, 8/15/37 .................................... 500,000 610,424
-------------
1,104,968
-------------
NATURAL GAS PRODUCTION AND/OR DISTRIBUTION -- 1.5%
Indiana Gas Co., 6.55%, 6/30/28 ...................................... 250,000 241,719
Keyspan Gas East, 7.88%, 2/1/10 ...................................... 1,250,000 1,285,400
Northern Natural Gas, 5.38%, 10/31/12 (a) ............................ 1,000,000 985,646
Southern Union Co., 8.25%, 11/15/29 .................................. 1,050,000 802,563
-------------
3,315,328
-------------
11
MMA Praxis Intermediate Income Fund
Schedule of portfolio investments, continued
December 31, 2008
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
CORPORATE BONDS -- 34.5%, continued
OIL & GAS EXPLORATION, PRODUCTION & SERVICES -- 2.4%
Apache Corp., 6.00%, 9/15/13 (b) ..................................... $ 500,000 $ 518,536
Conoco, Inc., 6.95%, 4/15/29 ......................................... 1,075,000 1,156,808
Motiva Enterprises LLC, 5.20%, 9/15/12 (a) ........................... 1,000,000 1,005,145
Ras Laffan , 5.83%, 9/30/16 (a)(b) ................................... 1,000,000 744,450
XTO Energy, Inc., 7.50%, 4/15/12 ..................................... 1,000,000 988,358
XTO Energy, Inc., 5.50%, 6/15/18 ..................................... 1,000,000 905,277
-------------
5,318,574
-------------
PIPELINES -- 0.2%
National Fuel Gas Co., 6.50%, 4/15/18 (a)(b) ......................... 500,000 460,046
-------------
PUBLISHING - JOURNALS -- 0.5%
Thomson Corp., 6.20%, 1/5/12 (b) ..................................... 1,200,000 1,149,641
-------------
REAL ESTATE INVESTMENT TRUST -- 0.4%
Simon Property Group, 6.35%, 8/28/12 (b) ............................. 1,200,000 934,165
-------------
RESTAURANTS -- 0.5%
YUM! Brands, Inc., 8.88%, 4/15/11 .................................... 1,000,000 1,012,888
-------------
RETAIL - BUILDING PRODUCTS -- 0.8%
Home Depot, Inc., 5.25%, 12/16/13 (b) ................................ 500,000 466,899
Home Depot, Inc., 5.40%, 3/1/16 (b) .................................. 500,000 447,460
Lowe's Companies, Inc., 6.50%, 3/15/29 ............................... 1,000,000 889,657
-------------
1,804,016
-------------
RETAIL - DISCOUNT -- 0.6%
Wal-Mart Stores, 7.55%, 2/15/30 (b) .................................. 1,000,000 1,206,700
-------------
RETAIL - FOOD -- 0.2%
Kroger Co., 7.50%, 1/15/14 (b) ....................................... 350,000 367,920
-------------
SEMICONDUCTOR EQUIPMENT -- 0.3%
KLA Instruments Corp., 6.90%, 5/1/18 ................................. 1,000,000 756,331
-------------
SUPRANATIONAL BANK -- 1.4%
Corporation Andina de Fomento, 5.20%, 5/21/13 ........................ 1,000,000 890,541
IFFIM, 5.00%, 11/14/11 (a) ........................................... 1,000,000 1,057,429
Inter-American Development Bank, 3.50%, 3/15/13 ...................... 1,000,000 1,035,908
-------------
2,983,878
-------------
TELECOMMUNICATIONS -- 0.4%
Embarq Corp., 6.74%, 6/1/13 .......................................... 1,000,000 845,000
-------------
TELEPHONE - INTEGRATED -- 1.6%
AT&T, Inc., 4.95%, 1/15/13 (b) ....................................... 1,000,000 1,005,526
Sprint Capital Corp., 7.63%, 1/30/11 (b) ............................. 1,000,000 835,000
Verizon Communications, Inc., 5.50%, 4/1/17 (b) ...................... 1,000,000 967,776
Verizon Communications, Inc., 8.95%, 3/1/39 (b) ...................... 500,000 645,845
-------------
3,454,147
-------------
TOOLS & HARDWARE -- 0.3%
Stanley Works, 6.15%, 10/1/13 (b) .................................... 725,000 736,794
-------------
12
MMA Praxis Intermediate Income Fund
Schedule of portfolio investments, continued
December 31, 2008
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
CORPORATE BONDS -- 34.5%, continued
TRANSPORTATION SERVICES -- 1.4%
Canadian National Railways, 4.40%, 3/15/13 ........................... $ 1,000,000 $ 970,258
CSX Transportation, Inc., 8.38%, 10/15/14 ............................ 500,000 519,125
GATX Corp., 9.00%, 11/15/13 .......................................... 477,000 498,203
Golden State Petroleum Transportation, 8.04%, 2/1/19 ................. 944,099 1,081,748
-------------
3,069,334
-------------
UTILITIES -- 0.4%
American Water Cap Corp., 6.09%, 10/15/17 ............................ 1,000,000 871,040
-------------
UTILITIES - NATURAL GAS -- 0.5%
Michigan Consolidated Gas Co., 8.25%, 5/1/14 ......................... 1,000,000 1,086,842
-------------
TOTAL CORPORATE BONDS ................................................... 75,488,280
-------------
CORPORATE NOTES -- 1.1%
COMMUNITY DEVELOPMENT -- 1.1%
MMA Community Development Investment, Inc., 1.62%, 12/31/09, (c)+ .... 910,000 910,000
MMA Community Development Investment, Inc., 2.43%, 12/31/09, (c)+ .... 1,605,000 1,605,000
-------------
TOTAL CORPORATE NOTES ................................................... 2,515,000
-------------
INTEREST ONLY BONDS -- 0.2%
FREDDIE MAC -- 0.1%
5.00%, 4/15/29 ....................................................... 2,000,000 159,801
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOC. -- 0.1%
1.03%, 4/16/27 ....................................................... 7,411,002 185,939
-------------
TOTAL INTEREST ONLY BONDS ............................................... 345,740
-------------
MUNICIPAL BONDS -- 0.5%
LL&P Wind Energy, Inc. Washington Rev., 5.73%, 12/1/17 ............... 1,000,000 992,090
-------------
U.S. GOVERNMENT AGENCIES -- 50.2%
FANNIE MAE -- 19.0%
7.25%, 1/15/10 ....................................................... 3,450,000 3,683,778
4.13%, 4/15/14 ....................................................... 900,000 971,957
7.00%, 7/1/15 ........................................................ 7,293 7,722
5.00%, 2/13/17 ....................................................... 1,000,000 1,134,489
5.00%, 7/1/18 ........................................................ 712,786 735,824
5.00%, 9/1/18 ........................................................ 922,499 952,316
7.00%, 11/1/19 ....................................................... 146,784 155,306
5.50%, 6/1/22 ........................................................ 1,796,923 1,853,903
5.00%, 4/1/25 ........................................................ 1,626,776 1,666,576
5.00%, 7/1/25 ........................................................ 1,450,667 1,486,159
5.00%, 10/1/25 ....................................................... 1,753,194 1,796,088
5.50%, 11/1/25 ....................................................... 470 483
8.50%, 9/1/26 ........................................................ 267,368 288,500
6.63%, 11/15/30 ...................................................... 2,250,000 3,248,554
4.90%, 6/1/33 ........................................................ 194,694 195,056
4.67%, 10/1/33 ....................................................... 734,283 731,778
6.00%, 10/1/33 ....................................................... 470,210 484,557
13
MMA Praxis Intermediate Income Fund
Schedule of portfolio investments, continued
December 31, 2008
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 50.2%, continued
FANNIE MAE -- 19.0%, continued
5.08%, 2/1/34 ........................................................ $ 491,167 $ 491,348
5.50%, 2/4/34 ........................................................ 1,021,126 1,047,814
4.18%, 5/1/34 ........................................................ 517,428 508,334
6.00%, 8/1/34 ........................................................ 1,630,336 1,680,079
6.00%, 11/1/34 ....................................................... 1,937,773 1,996,896
5.50%, 1/1/35 ........................................................ 1,725,019 1,771,452
5.00%, 10/1/35 ....................................................... 2,237,389 2,286,777
5.50%, 10/1/35 ....................................................... 2,712,283 2,783,596
6.00%, 10/1/35 ....................................................... 1,222,397 1,259,694
5.50%, 4/1/36 ........................................................ 2,258,756 2,318,144
6.00%, 6/1/36 ........................................................ 1,415,616 1,458,808
5.50%, 11/1/36 ....................................................... 2,407,243 2,470,159
5.43%, 5/1/37 ........................................................ 2,123,544 2,156,339
-------------
41,622,486
-------------
FDIC GUARANTEED -- 1.5%
JPMorgan Chase & Co., 2.63%, 12/1/10 ................................. 1,000,000 1,020,077
PNC Funding Corp., 1.88%, 6/22/11 .................................... 650,000 650,967
Regions Bank, 3.25%, 12/9/11 ......................................... 1,500,000 1,560,541
-------------
3,231,585
-------------
FEDERAL FARM CREDIT BANK -- 1.0%
4.88%, 12/16/15 ...................................................... 2,000,000 2,249,778
-------------
FEDERAL HOME LOAN BANK -- 4.2%
4.13%, 8/13/10 ....................................................... 1,000,000 1,050,139
6.63%, 11/15/10 ...................................................... 900,000 989,697
3.88%, 6/14/13 ....................................................... 300,000 317,728
5.00%, 11/17/17 ...................................................... 6,000,000 6,878,993
-------------
9,236,557
-------------
FREDDIE MAC -- 19.6%
6.75%, 1/15/09 ....................................................... 1,491 1,489
4.13%, 7/12/10 ....................................................... 1,987,000 2,065,550
6.88%, 9/15/10 ....................................................... 1,081,000 1,178,914
6.00%, 9/1/17 ........................................................ 884,662 917,276
4.50%, 6/1/18 ........................................................ 1,367,262 1,406,754
5.00%, 4/1/19 ........................................................ 1,371,859 1,413,627
5.00%, 12/1/21 ....................................................... 2,838,143 2,918,788
5.00%, 12/10/21 ...................................................... 2,625,000 3,063,395
5.50%, 4/1/22 ........................................................ 2,309,212 2,381,586
6.00%, 4/1/27 ........................................................ 2,367,531 2,443,327
7.00%, 2/1/30 ........................................................ 370,257 384,416
7.50%, 7/1/30 ........................................................ 577,466 601,582
7.00%, 3/1/31 ........................................................ 325,018 337,446
5.00%, 2/15/32 ....................................................... 2,000,000 2,027,652
5.50%, 8/1/33 ........................................................ 1,287,098 1,320,738
5.50%, 11/1/33 ....................................................... 1,052,332 1,079,836
14
MMA Praxis Intermediate Income Fund
Schedule of portfolio investments, continued
December 31, 2008
PRINCIPAL
AMOUNT/
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES -- 50.2%, continued
FREDDIE MAC -- 19.6%, continued
3.75%, 5/1/34 ........................................................ $ 282,252 $ 275,110
3.76%, 5/1/34 ........................................................ 546,083 532,285
5.00%, 7/1/35 ........................................................ 2,279,283 2,332,445
5.50%, 3/1/36 ........................................................ 1,481,134 1,517,994
5.50%, 6/1/36 ........................................................ 4,748,465 4,869,643
6.00%, 6/1/36 ........................................................ 1,515,292 1,562,709
5.50%, 12/1/36 ....................................................... 4,785,325 4,903,666
5.73%, 1/1/37 ........................................................ 1,720,046 1,757,863
6.00%, 8/1/37 ........................................................ 1,605,212 1,655,353
-------------
42,949,444
-------------
GOVERNMENT NATIONAL MORTGAGE ASSOC. -- 2.5%
6.75%, 4/15/16 ....................................................... 63,151 66,455
7.00%, 12/20/30 ...................................................... 105,323 108,992
7.00%, 10/20/31 ...................................................... 68,375 70,757
7.00%, 3/20/32 ....................................................... 257,690 266,666
5.50%, 1/20/34 ....................................................... 229,035 226,302
5.50%, 10/20/38 ...................................................... 3,492,322 3,569,263
6.50%, 11/20/38 ...................................................... 1,124,011 1,159,136
-------------
5,467,571
-------------
SMALL BUSINESS ADMINISTRATION -- 0.4%
2.75%, 9/25/18 ....................................................... 81,796 80,806
5.60%, 2/25/32 ....................................................... 755,989 738,039
-------------
818,845
-------------
TENNESSEE VALLEY AUTHORITY -- 2.0%
6.25%, 12/15/17 ...................................................... 2,000,000 2,448,374
4.65%, 6/15/35 ....................................................... 1,750,000 1,948,608
-------------
4,396,982
-------------
TOTAL U.S. GOVERNMENT AGENCIES .......................................... 109,973,248
-------------
MUTUAL FUND -- 0.5%
Pax World High Yield Fund ............................................ 167,685 1,012,819
-------------
SHORT TERM INVESTMENT -- 1.4%
Northern Institutional Government Select Portfolio ................... 3,095,561 3,095,561
-------------
15
MMA Praxis Intermediate Income Fund
Schedule of portfolio investments, continued
December 31, 2008
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
SECURITIES HELD AS COLLATERAL FOR SECURITIES LENDING -- 4.8%
Northern Institutional Liquid Asset Portfolio ........................ $ 10,556,274 $ 10,556,274
-------------
TOTAL INVESTMENTS (Cost $235,065,644) -- 105.5% ......................... $ 230,859,766
Liabilities in excess of other assets -- (5.5%) ...................... (12,065,296)
-------------
NET ASSETS -- 100.0% .................................................... $ 218,821,240
=============
- ----------
(a) 144A security is restricted as to resale to institutional investors. These
securities have been deemed liquid under guidelines established by the
Board of Trustees. At December 31, 2008, these securities were valued at
$9,217,459 or 4.2% of net assets.
(b) All or part of this security was on loan, as of December 31, 2008.
(c) Represents affiliated restricted security as to resale to shareholders and
is not registered under the Securities Act of 1933. These securities have
been deemed illiquid under guidelines established by the Board of
Trustees. Acquisition date and current cost: MMA Community Development
Investment, Inc., 1.62% - 12/2001, $910,000 and MMA Community Development
Investment, Inc., 2.43% - 12/2001, $1,605,000. At December 31, 2008 these
securities had an aggregate market value of $2,515,000, representing 1.1%
of net assets.
+ Variable rate security. Rates presented are the rates in effect at
December 31, 2008. Date presented reflects next rate change date.
See notes to financial statements.
16
--------------------------
MMA Praxis Core Stock Fund
--------------------------
MMA Praxis Core Stock Fund
Annual report to shareholders
Portfolio managers' letter
For the year ended December 31, 2008, the Class A shares of the MMA Praxis Core
Stock Fund declined 40.64 percent, under-performing its benchmark, the Standard
& Poor 500 Index, which fell 37.00 percent.
Factors affecting the Fund's performance
The sectors within the S&P 500 that turned in the weakest performance over the
year were Financials, Materials, and Information Technology. The sectors that
turned in the strongest (but still negative) performance over the year were
Consumer Staples and Health Care.
The Fund's financial companies out-performed the corresponding sector within the
index (down 49 percent versus down 55 percent for the index), but were still the
largest detractors from performance. A higher relative average weighting in this
sector (37 percent versus 16 percent for the index) detracted from both absolute
and relative performance. American International Group, American Express,
Merrill Lynch, Berkshire Hathaway, Loews, Wachovia, and JPMorgan Chase were
among the top detractors from performance. Wells Fargo and Hartford Financial
Services were among the top contributors to the Fund's performance.
The second largest detractor from performance was energy companies. The Fund's
energy companies under-performed the corresponding sector within the index (down
37 percent versus down 35 percent for the index). A higher relative average
weighting in this sector (15 percent versus 14 percent for the index) detracted
from performance. ConocoPhillips was among the top detractors.
The Fund had approximately the same average weighting in consumer staple
companies as the index (both 11 percent). Unfortunately, the Fund's consumer
staple companies under-performed the corresponding sector within the index (down
23 percent versus down 16 percent for the index). Wal-Mart Stores was among the
most important contributors to performance, while Costco was among the most
important detractors. The Fund no longer owns Wal-Mart Stores.
The Fund's relative performance was harmed by having a lower relative average
weighting in health care companies (5 percent versus 13 percent for the index).
The Fund's healthcare companies under-performed the corresponding sector within
the index (down 29 percent versus down 23 percent for the index).
H&R Block, a consumer discretionary company, was the single most important
contributor to performance over the year.
The Fund held 8 percent of assets in foreign companies (including American
Depositary Receipts) at Dec. 31, 2008. As a whole, these companies
under-performed the domestic companies held by the Fund.
Christopher C. Davis
Portfolio Manager and CEO of Davis Advisors
Kenneth C. Feinberg
Portfolio Manager
17
- ------------------
Performance review
- ------------------
MMA Praxis Core Stock Fund
Performance review
Average annual total returns as of 12/31/08
[BAR CHART]
Inception
Date 1 Year 3 Year 5 Year 10 Year
---- ------ ------ ------ -------
Class A 5/12/99 -40.64% -12.89% -5.93% -2.96%
Class A* 5/12/99 -43.74% -14.45% -6.94% -3.49%
Class B 1/4/94 -41.07% -13.48% -6.55% -3.50%
Class B** 1/4/94 -43.43% -14.29% -6.72% -3.50%
Class I 5/1/06 -40.43% -12.64% -6.00% -3.29%
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
* Reflects maximum front-end sales charge of 5.25%.
** Assumes redemption at the end of the stated period. The Fund imposes a
back-end sales charge (load) on Class B Shares if you sell your shares
before a certain period of time has elapsed. This is called a Contingent
Deferred Sales Charge ("CDSC"). The CDSC declines over five years starting
with year one and ending in year six as follows: 4%, 4%, 3%, 2%, 1%.
Class A Share and Class I Share of this Fund were not in existence prior to
5/12/99 and 5/1/06, respectively. Class A Share performance and Class I Share
performance calculated for any period prior to 5/12/99 and 5/1/06 are based on
the performance of Class B Share since inception of 1/4/94. The B Share
Contingent Deferred Sales Charge (CDSC) does not apply to performance over 5
years; therefore, the 10-year return does not reflect the CDSC.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
18
MMA Praxis Core Stock Fund
Performance review
Growth of $10,000 investment 12/31/98 to 12/31/08
[LINE CHART]
Standard & Poor's
500 Composite Stock
Class A* Class B Class I Price Index(1)
- ------------------------ -------------------------- -------------------------- -------------------------
Date Balance Date Balance Date Balance Date Balance
- ---- ------- ---- ------- ---- ------- ---- -------
12/31/1998 9,475 12/31/1998 10,000 12/31/1998 10,000 12/31/1998 10,000
3/31/1999 9,859 3/31/1999 10,405 3/31/1999 10,405 3/31/1999 10,498
6/30/1999 11,011 6/30/1999 11,609 6/30/1999 11,609 6/30/1999 11,238
9/30/1999 10,231 9/30/1999 10,779 9/30/1999 10,779 9/30/1999 10,537
12/31/1999 10,677 12/31/1999 11,216 12/31/1999 11,216 12/31/1999 12,104
3/31/2000 11,182 3/31/2000 11,727 3/31/2000 11,727 3/31/2000 12,382
6/30/2000 10,940 6/30/2000 11,457 6/30/2000 11,457 6/30/2000 12,053
9/30/2000 10,835 9/30/2000 11,324 9/30/2000 11,324 9/30/2000 11,936
12/31/2000 10,631 12/31/2000 11,101 12/31/2000 11,101 12/31/2000 11,002
3/31/2001 9,852 3/31/2001 10,277 3/31/2001 10,277 3/31/2001 9,697
6/30/2001 10,136 6/30/2001 10,547 6/30/2001 10,547 6/30/2001 10,265
9/30/2001 8,970 9/30/2001 9,322 9/30/2001 9,322 9/30/2001 8,758
12/31/2001 9,794 12/31/2001 10,154 12/31/2001 10,154 12/31/2001 9,694
3/31/2002 9,961 3/31/2002 10,315 3/31/2002 10,315 3/31/2002 9,720
6/30/2002 8,912 6/30/2002 9,222 6/30/2002 9,222 6/30/2002 8,418
9/30/2002 7,557 9/30/2002 7,798 9/30/2002 7,798 9/30/2002 6,963
12/31/2002 8,016 12/31/2002 8,267 12/31/2002 8,267 12/31/2002 7,551
3/31/2003 7,688 3/31/2003 7,914 3/31/2003 7,914 3/31/2003 7,313
6/30/2003 8,507 6/30/2003 8,745 6/30/2003 8,745 6/30/2003 8,439
9/30/2003 8,660 9/30/2003 8,883 9/30/2003 8,883 9/30/2003 8,662
12/31/2003 9,520 12/31/2003 9,753 12/31/2003 9,753 12/31/2003 9,717
3/31/2004 9,739 3/31/2004 9,961 3/31/2004 9,961 3/31/2004 9,881
6/30/2004 9,877 6/30/2004 10,091 6/30/2004 10,091 6/30/2004 10,051
9/30/2004 9,556 9/30/2004 9,745 9/30/2004 9,745 9/30/2004 9,863
12/31/2004 10,248 12/31/2004 10,432 12/31/2004 10,432 12/31/2004 10,774
3/31/2005 9,985 3/31/2005 10,147 3/31/2005 10,147 3/31/2005 10,542
6/30/2005 10,085 6/30/2005 10,233 6/30/2005 10,233 6/30/2005 10,687
9/30/2005 10,254 9/30/2005 10,387 9/30/2005 10,387 9/30/2005 11,072
12/31/2005 10,611 12/31/2005 10,734 12/31/2005 10,734 12/31/2005 11,303
3/31/2006 10,795 3/31/2006 10,896 3/31/2006 10,896 3/31/2006 11,778
6/30/2006 10,729 6/30/2006 10,819 6/30/2006 10,847 6/30/2006 11,609
9/30/2006 11,097 9/30/2006 11,174 9/30/2006 11,226 9/30/2006 12,266
12/31/2006 11,895 12/31/2006 11,956 12/31/2006 12,046 12/31/2006 13,088
3/31/2007 11,786 3/31/2007 11,826 3/31/2007 11,952 3/31/2007 13,172
6/30/2007 12,479 6/30/2007 12,498 6/30/2007 12,665 6/30/2007 13,999
9/30/2007 12,231 9/30/2007 12,231 9/30/2007 12,430 9/30/2007 14,283
12/31/2007 11,813 12/31/2007 11,797 12/31/2007 12,015 12/31/2007 13,807
3/31/2008 10,819 3/31/2008 10,805 3/31/2008 11,010 3/31/2008 12,503
6/30/2008 10,322 6/30/2008 10,308 6/30/2008 10,511 6/30/2008 12,162
9/30/2008 9,366 9/30/2008 9,353 9/30/2008 9,550 9/30/2008 11,144
12/31/2008 7,011 12/31/2008 7,003 12/31/2008 7,157 12/31/2008 8,699
For performance purposes, the above graph has not been adjusted for CDSC
charges.
This chart represents historical performance of a hypothetical investment of
$10,000 in the Core Stock Fund from 12/31/98 to 12/31/08, and represents the
reinvestment of dividends and capital gains in the Fund.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
* Reflects maximum front-end sales charge of 5.25%.
Class A Share and Class I Share of this Fund were not in existence prior to
5/12/99 and 5/1/06, respectively. Class A Share performance and Class I Share
performance calculated for any period prior to 5/12/99 and 5/1/06 are based on
the performance of Class B Share since inception of 1/4/94. The B Share
Contingent Deferred Sales Charge (CDSC) does not apply to performance over 5
years; therefore, the 10-year return does not reflect the CDSC.
(1) The S&P 500 Composite Stock Price Index (the "S&P 500R Index") is a widely
recognized, unmanaged index of 500 selected common stocks, most of which
are listed on the New York Stock Exchange.
The above index is for illustrative purposes only and does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The fund's performance reflects the
deduction of these value-added services. An investor cannot invest directly in
an index, although they can invest in its underlying securities.
19
- ---------------------------------
Schedule of portfolio investments
- ---------------------------------
MMA Praxis Core Stock Fund
Schedule of portfolio investments
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 96.6%
ADVERTISING SERVICES -- 0.0%
WPP Group plc ADR (b) ................................................ 1,500 $ 44,385
-------------
AUTOMOBILES -- 1.7%
CarMax, Inc. (a) ..................................................... 97,300 766,724
Harley-Davidson, Inc. ................................................ 88,000 1,493,360
PACCAR, Inc. ......................................................... 21,910 626,626
-------------
2,886,710
-------------
BANKS -- 7.5%
Bank of New York Mellon Corp. ........................................ 122,800 3,478,924
State Street Corp. ................................................... 7,000 275,310
Wachovia Corp. ....................................................... 64,079 354,998
Wells Fargo & Co. .................................................... 290,800 8,572,784
-------------
12,682,016
-------------
BROADCASTING/CABLE -- 3.9%
Comcast Corp., Class A ............................................... 280,850 4,535,728
Grupo Televisa S.A. - ADR (b) ........................................ 135,200 2,019,888
-------------
6,555,616
-------------
BROKERAGE SERVICES -- 0.4%
Goldman Sachs Group, Inc. ............................................ 7,280 614,359
-------------
BUILDING MATERIALS & CONSTRUCTION -- 1.0%
Vulcan Materials Co. ................................................. 24,200 1,683,836
-------------
BUSINESS SERVICES -- 2.0%
Iron Mountain, Inc. (a) .............................................. 133,300 3,296,509
-------------
COMPUTER EQUIPMENT & SERVICES -- 1.7%
Google, Inc., Class A (a) ............................................ 9,160 2,818,074
-------------
COMPUTERS & PERIPHERALS -- 2.2%
Cisco Systems, Inc. (a) .............................................. 65,200 1,062,760
Dell, Inc. (a) ....................................................... 59,600 610,304
Hewlett-Packard Co. .................................................. 57,750 2,095,748
-------------
3,768,812
-------------
CONSTRUCTION -- 1.4%
Martin Marietta Materials, Inc. ...................................... 23,700 2,300,796
-------------
CONSUMER FINANCIAL SERVICES -- 4.6%
American Express Co. ................................................. 247,800 4,596,690
Discover Financial Services .......................................... 15,600 148,668
H&R Block, Inc. ...................................................... 132,950 3,020,624
-------------
7,765,982
-------------
CONSUMER GOODS & SERVICES -- 3.6%
Procter & Gamble Co. ................................................. 96,900 5,990,358
-------------
CONTAINERS - PAPER & PLASTIC -- 1.8%
Sealed Air Corp. ..................................................... 206,200 3,080,628
-------------
COSMETICS & TOILETRIES -- 0.4%
Avon Products, Inc. .................................................. 24,600 591,138
-------------
20
MMA Praxis Core Stock Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 96.6%, continued
E-COMMERCE -- 0.6%
Amazon.com, Inc. (a) ................................................. 18,300 $ 938,424
Liberty Media Corp - Interactive, Class A (a) ........................ 44,175 137,826
-------------
1,076,250
-------------
ELECTRIC SERVICES -- 0.2%
AES Corp. (a) ........................................................ 48,300 397,992
-------------
ELECTRONIC & ELECTRICAL - GENERAL -- 1.6%
Texas Instruments, Inc. .............................................. 169,600 2,632,192
-------------
FINANCIAL SERVICES -- 6.5%
Ameriprise Financial, Inc. ........................................... 45,500 1,062,880
Citigroup, Inc. ...................................................... 63,200 424,072
E*TRADE Financial Corp. (a) .......................................... 20,100 23,115
JPMorgan Chase & Co. ................................................. 238,600 7,523,058
MBIA, Inc. (a) ....................................................... 15,100 61,457
Merrill Lynch & Co., Inc. ............................................ 49,699 578,496
Moody's Corp. ........................................................ 59,200 1,189,328
Morgan Stanley ....................................................... 9,100 145,964
-------------
11,008,370
-------------
FOOD & STAPLES RETAILING -- 0.1%
Whole Foods Market, Inc. ............................................. 16,800 158,592
-------------
FOOD PRODUCTS -- 0.3%
The Hershey Co. ...................................................... 12,900 448,146
-------------
HOME FURNISHINGS -- 0.2%
Hunter Douglas N.V. (b) .............................................. 8,300 272,473
-------------
INSURANCE -- 13.3%
American International Group, Inc. (a) ............................... 216,800 340,376
Berkshire Hathaway, Inc., Class A (a) ................................ 97 9,370,200
Loews Corp. .......................................................... 152,800 4,316,600
Markel Corp. (a) ..................................................... 590 176,410
NIPPONKOA Insurance Co. .............................................. 172,700 1,303,935
Principal Financial Group, Inc. ...................................... 16,600 374,662
Sun Life Financial, Inc. (b) ......................................... 11,600 268,424
The Hartford Financial Services Group, Inc. .......................... 40,300 661,726
The Progressive Corp. ................................................ 264,600 3,918,726
Transatlantic Holdings, Inc. ......................................... 44,610 1,787,077
-------------
22,518,136
-------------
MANUFACTURING -- 0.8%
ABB LTD. (b) ......................................................... 17,640 264,776
Tyco International Ltd. (b) .......................................... 52,990 1,144,584
-------------
1,409,360
-------------
MEDIA -- 0.4%
Liberty Media Corp - Entertainment, Series A (a) ..................... 36,240 633,475
-------------
METAL MINING -- 0.2%
Rio Tinto plc ........................................................ 12,000 260,889
-------------
21
MMA Praxis Core Stock Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 96.6%, continued
MINERALS -- 0.4%
BHP Billiton plc ..................................................... 33,700 $ 636,285
-------------
MULTIMEDIA -- 1.3%
News Corp., Class A .................................................. 244,500 2,222,505
-------------
OIL & GAS EXPLORATION, PRODUCTION & SERVICES -- 14.1%
Canadian Natural Resources Ltd. (b) .................................. 70,400 2,814,592
China Shipping Development Company Ltd. .............................. 472,000 468,931
ConocoPhillips ....................................................... 157,750 8,171,449
Devon Energy Corp. ................................................... 92,900 6,104,458
EOG Resources, Inc. .................................................. 79,100 5,266,478
Transocean Ltd. (a) .................................................. 21,755 1,027,924
-------------
23,853,832
-------------
PHARMACEUTICALS -- 7.5%
Cardinal Health, Inc. ................................................ 42,130 1,452,221
Express Scripts, Inc. (a) ............................................ 32,100 1,764,858
Johnson & Johnson .................................................... 66,100 3,954,763
Schering-Plough Corp. ................................................ 214,300 3,649,529
UnitedHealth Group, Inc. ................................................ 67,000 1,782,200
-------------
12,603,571
-------------
REAL ESTATE -- 1.1%
Brookfield Asset Management, Inc. - Class A .......................... 61,000 931,470
Hang Lung Group Ltd. ................................................. 313,000 947,029
-------------
1,878,499
-------------
RETAIL -- 10.9%
Bed Bath & Beyond, Inc. (a) .......................................... 68,900 1,751,438
Costco Wholesale Corp. ............................................... 218,700 11,481,750
CVS Caremark Corp. ................................................... 139,622 4,012,736
Lowe's Cos., Inc. .................................................... 48,500 1,043,720
Sears Holdings Corp. (a) ............................................. 3,100 120,497
-------------
18,410,141
-------------
SOFTWARE & COMPUTER SERVICES -- 2.4%
Microsoft Corp. ...................................................... 190,800 3,709,152
Visa Inc., Class A ................................................... 7,170 376,067
-------------
4,085,219
-------------
SOFTWARE & SERVICES -- 0.2%
eBay, Inc. (a) ....................................................... 28,200 393,672
-------------
TELECOMMUNICATIONS -- 0.2%
Sprint Nextel Corp. (a) .............................................. 179,300 328,119
-------------
TRANSPORTATION SERVICES -- 2.1%
China Merchants Holdings International Company Ltd. (b) .............. 618,525 1,195,487
Cosco Pacific Ltd. ................................................... 408,000 416,402
Kuehne & Nagel International AG ...................................... 13,100 829,417
United Parcel Service, Inc., Class B ................................. 19,400 1,070,104
-------------
3,511,410
-------------
TOTAL COMMON STOCKS ..................................................... 162,818,347
-------------
22
MMA Praxis Core Stock Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES/
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER -- 0.7%
NATC, .23%, 1/2/09 ................................................... 1,228,000 $ 1,227,992
-------------
CORPORATE NOTES -- 1.7%
COMMUNITY DEVELOPMENT -- 1.7%
MMA Community Development Investment, Inc., 1.62%, 12/31/09, (c)+ .... 903,000 903,000
MMA Community Development Investment, Inc., 2.43%, 12/31/09, (c)+ .... 2,032,000 2,032,000
-------------
TOTAL CORPORATE NOTES ................................................... 2,935,000
-------------
SECURITIES HELD AS COLLATERAL FOR SECURITIES LENDING-- 2.7%
Northern Institutional Liquid Asset Portfolio ........................ 4,590,687 4,590,687
-------------
TOTAL INVESTMENTS (Cost $243,444,059) -- 101.7% ......................... 171,572,026
Liabilities in excess of other assets -- (1.7%) ...................... (2,895,597)
-------------
NET ASSETS -- 100.0% .................................................... $ 168,676,429
=============
- ----------
(a) Non-income producing securities.
(b) All or part of this security was on loan, as of December 31, 2008.
(c) Represents affiliated restricted security as to resale to shareholders and
is not registered under the Securities Act of 1933. These securities have
been deemed illiquid under guidelines established by the Board of
Trustees. Acquisition date and current cost: MMA Community Development
Investment, Inc., 1.62% - 12/2001, $903,000 and MMA Community Development
Investment, Inc., 2.43% - 12/2001, $2,032,000. At December 31, 2008, these
securities had an aggregate market value of $2,935,000, representing 1.7%
of net assets.
+ Variable rate security. Rates presented are the rates in effect at
December 31, 2008. Date presented reflects next rate change date.
ADR - American Depository Receipt
plc - Public Liability Company
UNREALIZED
FUTURES CONTRACTS PURCHASED CONTRACTS DEPRECIATION
------------- -------------
S&P 500 Index Futures Contract, expiring March, 2009
(underlying face amount at value $2,700,300) 12 $ 7,800
See notes to financial statements.
23
- ---------------------------
MMA Praxis Value Index Fund
- ---------------------------
MMA Praxis Value Index Fund
Annual report to shareholders
Portfolio manager's letter
There was no place to hide during the second half of 2008. All equity strategies
suffered nearly equally: high quality, low quality, large, small, growth, value,
and dividend paying stocks all suffered the same fate as investors sold first
and asked questions later. United States Treasuries, cash, and coin jar savings
were about the only financial assets that didn't go down in value over the last
several months.
Among the economic sectors, Financials suffered the worst fate followed closely
by Materials. The best performing sectors - but down in value nonetheless - were
Consumer Staples and Health Care. The Fund's A shares delivered a disappointing
negative 40.15 percent during 2008 versus its public benchmark, the MSCI Prime
Market Value Index, which was down 36.00 percent.
As we have described in the past, MMA Praxis' stewardship investing screens
preclude the Fund from investing in some, but not all, large oil companies due
to their lack of leadership on environmental stewardship. The weight that would
have been invested in these energy companies is effectively spread over the
remaining companies in the Fund. Since the financial sector has been the largest
sector in the Fund, it receives the largest portion of the reallocated weight.
In short, the Fund has been underweight in Energy - the best performing sector
for the last few years - and overweight in Financial, by far the worst
performing sector.
We expect the trends for underperformance of financial stocks and outperformance
of energy stocks to eventually reverse, but timing is anyone's guess. However,
with the very depressed prices among likely financial company survivors,
prospects for future returns are beginning to look encouraging. The fate of many
banks remains a concern, but the financial sector is chock full of non-bank
companies whose exposure to toxic mortgages is limited.
Chad Horning, CFA(R)
MMA Praxis Value Index Fund Manager
24
------------------
Performance review
------------------
MMA Praxis Value Index Fund
Performance review
Average annual total returns as of 12/31/08
[BAR CHART]
Inception Since
Date 1 Year 3 Year 5 Year Inception
---- ------ ------ ------ ---------
Class A 5/1/01 -40.15% -12.38% -4.19% -4.24%
Class A* 5/1/01 -43.29% -13.94% -5.22% -4.91%
Class B 5/1/01 -40.50% -12.84% -4.72% -4.75%
Class B** 5/1/01 -42.80% -13.60% -4.88% -4.75%
Class I 5/1/06 -39.94% -12.18% -4.29% -4.47%
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
* Reflects maximum front-end sales charge of 5.25%.
** Assumes redemption at the end of the stated period. The Fund imposes a
back-end sales charge (load) on Class B Shares if you sell your shares
before a certain period of time has elapsed. This is called a Contingent
Deferred Sales Charge ("CDSC"). The CDSC declines over five years starting
with year one and ending in year six as follows: 4%, 4%, 3%, 2%, 1%.
Class I Share of this Fund was not in existence prior to 5/1/06. Class I Share
performance calculated for any period prior to 5/1/06 is based on the
performance of Class B Share since inception of 5/1/01. The B Share Contingent
Deferred Sales Charge (CDSC) does not apply to performance over 5 years;
therefore, the 10-year return does not reflect the CDSC.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
25
MMA Praxis Value Index Fund
Performance review
Growth of $10,000 investment 5/1/01 to 12/31/08
[LINE CHART]
MSCI US Prime
Market Value
Class A* Class B Class I Index(1)
- ------------------------ -------------------------- -------------------------- -------------------------
Date Balance Date Balance Date Balance Date Balance
- ---- ------- ---- ------- ---- ------- ---- -------
5/1/2001 9,479 5/1/2001 10,000 5/1/2001 10,000 5/1/2001 10,000
6/30/2001 9,261 6/30/2001 9,376 6/30/2001 9,766 6/30/2001 9,903
9/30/2001 7,933 9/30/2001 8,012 9/30/2001 8,345 9/30/2001 9,118
12/31/2001 8,368 12/31/2001 8,448 12/31/2001 8,798 12/31/2001 9,718
3/31/2002 8,340 3/31/2002 8,409 3/31/2002 8,758 3/31/2002 10,105
6/30/2002 7,321 6/30/2002 7,370 6/30/2002 7,675 6/30/2002 9,116
9/30/2002 5,849 9/30/2002 5,877 9/30/2002 6,120 9/30/2002 7,461
12/31/2002 6,460 12/31/2002 6,486 12/31/2002 6,753 12/31/2002 8,071
3/31/2003 6,123 3/31/2003 6,138 3/31/2003 6,390 3/31/2003 7,637
6/30/2003 7,253 6/30/2003 7,342 6/30/2003 7,565 6/30/2003 8,977
9/30/2003 7,407 9/30/2003 7,489 9/30/2003 7,716 9/30/2003 9,186
12/31/2003 8,422 12/31/2003 8,509 12/31/2003 8,766 12/31/2003 10,469
3/31/2004 8,607 3/31/2004 8,686 3/31/2004 8,949 3/31/2004 10,698
6/30/2004 8,625 6/30/2004 8,771 6/30/2004 8,945 6/30/2004 10,866
9/30/2004 8,743 9/30/2004 8,881 9/30/2004 9,057 9/30/2004 11,006
12/31/2004 9,522 12/31/2004 9,654 12/31/2004 9,845 12/31/2004 12,085
3/31/2005 9,305 3/31/2005 9,434 3/31/2005 9,620 3/31/2005 12,044
6/30/2005 9,530 6/30/2005 9,745 6/30/2005 9,839 6/30/2005 12,254
9/30/2005 9,878 9/30/2005 10,091 9/30/2005 10,188 9/30/2005 12,757
12/31/2005 10,106 12/31/2005 10,299 12/31/2005 10,397 12/31/2005 12,964
3/31/2006 10,646 3/31/2006 10,847 3/31/2006 10,944 3/31/2006 13,656
6/30/2006 10,670 6/30/2006 10,966 6/30/2006 10,976 6/30/2006 13,790
9/30/2006 11,335 9/30/2006 11,620 9/30/2006 11,662 9/30/2006 14,710
12/31/2006 12,169 12/31/2006 12,464 12/31/2006 12,533 12/31/2006 15,863
3/31/2007 12,222 3/31/2007 12,507 3/31/2007 12,599 3/31/2007 16,014
6/30/2007 12,726 6/30/2007 13,007 6/30/2007 13,126 6/30/2007 16,935
9/30/2007 12,394 9/30/2007 12,645 9/30/2007 12,792 9/30/2007 16,928
12/31/2007 11,359 12/31/2007 11,575 12/31/2007 11,724 12/31/2007 15,897
3/31/2008 10,180 3/31/2008 10,360 3/31/2008 10,525 3/31/2008 14,473
6/30/2008 9,355 6/30/2008 9,499 6/30/2008 9,674 6/30/2008 13,580
9/30/2008 9,003 9/30/2008 9,141 9/30/2008 9,320 9/30/2008 12,796
12/31/2008 6,797 12/31/2008 6,886 12/31/2008 7,043 12/31/2008 10,176
This chart represents historical performance of a hypothetical investment of
$10,000 in the Value Index Fund from 5/1/01 to 12/31/08, and represents the
reinvestment of dividends and capital gains in the Fund.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
* Reflects maximum front-end sales charge of 5.25%.
Class I Shares of this Fund were not in existence prior to 5/1/06. Class I Share
performance calculated for any period prior to 5/1/06 is based on the
performance of Class B Shares since inception of 5/1/01. The B Share Contingent
Deferred Sales Charge (CDSC) does not apply to performance over 5 years;
therefore, the 10-year return does not reflect the CDSC.
(1) The MSCI US Prime Market Value Index represents the value companies of the
MSCI US Prime Market 750 Index. (The MSCI US Prime Market 750 Index
represents the universe of large and medium capitalization companies in
the US equity market). The MSCI US Prime Market Value Index is a subset of
the MSCI US Prime Market 750 Index.
The above index is for illustrative purposes only and does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The fund's performance reflects the
deduction of these value-added services. An investor cannot invest directly in
an index, although they can invest in its underlying securities.
26
---------------------------------
Schedule of portfolio investments
---------------------------------
MMA Praxis Value Index Fund
Schedule of portfolio investments
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.5%
AIR FREIGHT & LOGISTICS -- 0.9%
United Parcel Service, Inc., Class B ................................. 8,188 $ 451,650
-------------
APPAREL MANUFACTURERS -- 0.2%
V.F. Corp. ........................................................... 1,870 102,420
-------------
AUTO COMPONENTS -- 0.4%
Johnson Controls, Inc. ............................................... 10,561 191,788
-------------
AUTOMOBILES -- 0.2%
Harley-Davidson, Inc. ................................................ 4,765 80,862
-------------
AUTOMOTIVE -- 0.2%
BorgWarner, Inc. ..................................................... 2,770 60,303
General Motors Corp. ................................................. 10,092 32,294
-------------
92,597
-------------
BANKS -- 11.1%
Bank of America Corp. ................................................ 85,866 1,208,993
Bank of New York Mellon Corp. ........................................ 19,678 557,478
BB&T Corp. ........................................................... 9,350 256,751
Comerica, Inc. ....................................................... 2,600 51,610
Fifth Third Bancorp .................................................. 9,660 79,792
First Horizon National Corp. ......................................... 4,079 43,110
Huntington Bancshares, Inc. .......................................... 5,850 44,811
KeyCorp .............................................................. 9,810 83,581
M & T Bank Corp. ..................................................... 1,320 75,781
Marshall & Ilsley Corp. .............................................. 4,130 56,333
National City Corp. .................................................. 17,012 30,792
Popular, Inc. (b) .................................................... 5,240 27,038
Regions Financial Corp. .............................................. 11,985 95,401
Sovereign Bancorp, Inc. (a) .......................................... 13,499 40,227
State Street Corp. ................................................... 2,832 111,383
SunTrust Banks, Inc. ................................................. 5,700 168,378
U.S. Bancorp. ........................................................ 29,732 743,597
Wachovia Corp. ....................................................... 38,545 213,539
Wells Fargo & Co. .................................................... 60,961 1,797,130
Zions Bancorp. ....................................................... 1,970 48,285
-------------
5,734,010
-------------
BEVERAGES -- 1.8%
Coca-Cola Company .................................................... 17,309 783,578
Coca-Cola Enterprises, Inc. .......................................... 5,760 69,293
Pepsi Bottling Group, Inc. ........................................... 3,408 76,714
-------------
929,585
-------------
BROADCAST SERVICES & PROGRAMMING -- 0.2%
CBS Corp., Class B ................................................... 10,820 88,616
-------------
27
MMA Praxis Value Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.5%, continued
BROKERAGE SERVICES -- 5.7%
Goldman Sachs Group, Inc. ............................................ 3,677 $ 310,302
JPMorgan Chase & Co. ................................................. 63,978 2,017,226
Merrill Lynch & Co. .................................................. 26,836 312,371
Morgan Stanley ....................................................... 18,031 289,217
-------------
2,929,116
-------------
BUSINESS SERVICES -- 0.1%
Manpower, Inc. ....................................................... 1,790 60,842
-------------
CHEMICALS - GENERAL -- 1.7%
Air Products & Chemicals, Inc. ....................................... 3,686 185,295
E.I. du Pont de Nemours & Co. ........................................ 15,802 399,790
FMC Corp. ............................................................ 861 38,513
International Flavors & Fragrances, Inc. ............................. 2,525 75,043
PPG Industries, Inc. ................................................. 3,440 145,959
The Lubrizol Corp. ................................................... 1,243 45,233
-------------
889,833
-------------
COMMUNICATIONS EQUIPMENT & SERVICES -- 0.4%
Motorola, Inc. ....................................................... 41,104 182,091
-------------
COMPUTER STORAGE DEVICES -- 0.2%
Seagate Technology ................................................... 11,187 49,559
Western Digital Corp. (a) ............................................ 3,172 36,319
-------------
85,878
-------------
COMPUTERS & PERIPHERALS -- 0.1%
Sun Microsystems, Inc. (a) ........................................... 16,163 61,743
-------------
CONSTRUCTION SERVICES -- 0.2%
D.R. Horton, Inc. .................................................... 7,880 55,712
Lennar Corp. ......................................................... 3,645 31,602
-------------
87,314
-------------
CONSUMER FINANCIAL SERVICES -- 1.2%
American Express Co. ................................................. 18,638 345,735
Discover Financial Services .......................................... 8,744 83,330
H&R Block, Inc. ...................................................... 4,703 106,852
SLM Corp. (a) ........................................................ 9,031 80,376
-------------
616,293
-------------
CONSUMER GOODS & SERVICES -- 2.2%
Procter & Gamble Co. ................................................. 17,857 1,103,920
-------------
CONTAINERS - PAPER & PLASTIC -- 0.2%
Avery Dennison Corp. ................................................. 2,490 81,498
-------------
COSMETICS & TOILETRIES -- 0.8%
Kimberly-Clark Corp. ................................................. 7,401 390,329
-------------
DISTRIBUTION -- 0.3%
Genuine Parts Co. .................................................... 3,890 147,275
-------------
28
MMA Praxis Value Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.5%, continued
ELECTRIC SERVICES -- 2.0%
Alliant Energy Corp. ................................................. 3,470 $ 101,255
CenterPoint Energy, Inc. ............................................. 8,343 105,289
Consolidated Edison, Inc. ............................................ 5,600 218,007
FPL Group, Inc. ...................................................... 6,950 349,793
Mirant Corp. (a) ..................................................... 3,946 74,461
NiSource, Inc. ....................................................... 7,150 78,436
Pepco Holdings, Inc. ................................................. 5,850 103,896
-------------
1,031,137
-------------
ELECTRIC UTILITIES -- 1.3%
Northeast Utilities .................................................. 4,607 110,844
PG&E Corp. ........................................................... 6,970 269,809
Pinnacle West Capital Corp. .......................................... 2,837 91,153
Spectra Energy Corp. ................................................. 12,805 201,551
-------------
673,357
-------------
ELECTRICAL EQUIPMENT & INSTRUMENTS -- 0.1%
Flextronics International Ltd. (a)(b) ................................ 17,618 45,102
-------------
ELECTRONIC & ELECTRICAL - GENERAL -- 0.1%
Arrow Electronics, Inc. (a) .......................................... 2,680 50,491
-------------
ENERGY -- 0.5%
Pride International, Inc. (a) ........................................ 3,476 55,546
Valero Energy Corp. .................................................. 9,708 210,082
-------------
265,628
-------------
FINANCIAL SERVICES -- 3.1%
American Capital Ltd. ................................................ 6,319 20,474
Ameriprise Financial, Inc. ........................................... 4,536 105,961
Capital One Financial Corp. .......................................... 6,506 207,476
CIT Group, Inc. ...................................................... 9,168 41,623
Citigroup, Inc. ...................................................... 95,898 643,476
Invesco Ltd. (b) ..................................................... 8,364 120,776
Legg Mason, Inc. ..................................................... 2,963 64,919
NYSE Euronext ........................................................ 1,910 52,296
PNC Financial Services Group, Inc. ................................... 6,110 299,390
Synovus Financial Corp. .............................................. 6,421 53,294
-------------
1,609,685
-------------
FIRE, MARINE, AND CASUALTY INSURANCE -- 0.5%
Axis Capital Holdings Ltd. (b) ....................................... 3,286 95,689
Leucadia National Corp. .............................................. 3,630 71,874
Transatlantic Holdings, Inc. ......................................... 1,150 46,069
White Mountains Insurance Group Ltd. ................................. 230 61,435
-------------
275,067
-------------
FOOD DISTRIBUTORS & WHOLESALERS -- 0.4%
Sara Lee Corp. ....................................................... 13,500 132,165
SUPERVALU, Inc. ...................................................... 4,544 66,342
198,507
-------------
29
MMA Praxis Value Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.5%, continued
FOOD PROCESSING -- 1.2%
ConAgra Foods, Inc. .................................................. 9,910 $ 163,515
H.J. Heinz Co. ....................................................... 6,020 226,352
Hormel Foods Corp. ................................................... 3,230 100,388
McCormick & Co. ...................................................... 4,389 139,834
-------------
630,089
-------------
FOOD PRODUCTS -- 1.8%
General Mills, Inc. .................................................. 3,692 224,289
Kraft Foods, Inc. .................................................... 25,161 675,573
-------------
899,862
-------------
FOOD STORES -- 0.4%
Safeway, Inc. ........................................................ 8,190 194,676
-------------
FORESTRY -- 0.2%
Plum Creek Timber Co., Inc. .......................................... 3,320 115,337
-------------
FURNITURE & HOME FURNISHINGS -- 0.1%
Leggett & Platt, Inc. ................................................ 3,470 52,709
-------------
HEALTH CARE SERVICES -- 0.7%
AmerisourceBergen Corp. .............................................. 4,350 155,121
Cardinal Health, Inc. ................................................ 6,500 224,055
-------------
379,176
-------------
HOTELS & MOTELS -- 0.1%
Wyndham Worldwide Corp. .............................................. 5,894 38,606
-------------
HOUSEHOLD PRODUCTS -- 0.1%
Newell Rubbermaid, Inc. .............................................. 5,570 54,475
-------------
INDUSTRIAL GOODS & SERVICES -- 0.2%
Masco Corp. .......................................................... 7,650 85,145
-------------
INSURANCE -- 6.6%
Allstate Corp. ....................................................... 9,510 311,547
American International Group, Inc. ................................... 45,122 70,842
Aon Corp. ............................................................ 5,580 254,894
Assurant, Inc. ....................................................... 2,690 80,700
Chubb Corp. .......................................................... 6,780 345,779
CIGNA Corp. .......................................................... 5,912 99,617
Cincinnati Financial Corp. ........................................... 3,180 92,443
Everest Re Group (b) ................................................. 1,400 106,596
First American Corp. ................................................. 1,690 48,824
Hartford Financial Services Group, Inc. .............................. 5,940 97,535
Lincoln National Corp. ............................................... 4,865 91,657
Loews Corp. .......................................................... 5,904 166,788
Marsh & McLennan Cos., Inc. .......................................... 10,960 265,999
MetLife, Inc. ........................................................ 13,752 479,394
Principal Financial Group, Inc. ...................................... 4,754 107,298
Prudential Financial, Inc. ........................................... 7,800 236,028
RenaissanceRe Holdings Ltd. (b) ...................................... 1,607 82,857
The Progressive Corp. ................................................ 10,391 153,891
30
MMA Praxis Value Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.5%, continued
INSURANCE -- 6.6%, continued
Torchmark Corp. ...................................................... 2,414 $ 107,906
UnumProvident Corp. .................................................. 7,870 146,382
Willis Group Holdings Ltd. (b) ....................................... 3,790 94,295
-------------
3,441,272
-------------
INSURANCE PROPERTY-CASUALTY -- 1.9%
ACE Ltd ADR (b) ..................................................... 6,000 317,520
Fidelity National Financial, Inc., Class A ........................... 5,114 90,774
Markel Corp. (a) ..................................................... 219 65,481
The Travelers Companies, Inc. ........................................ 10,510 475,052
XL Capital Ltd. (b) .................................................. 6,520 24,124
-------------
972,951
-------------
LIFE SCIENCES TOOLS & SERVICES -- 0.1%
Life Technologies Corp. (a) .......................................... 1,328 30,956
-------------
MACHINERY -- 1.4%
Deere & Co. .......................................................... 3,896 149,295
Harsco Corp. ......................................................... 1,722 47,665
Illinois Tool Works, Inc. ............................................ 7,763 272,093
Ingersoll-Rand Co. Ltd. (b) .......................................... 5,920 102,712
Rockwell Automation, Inc. ............................................ 2,683 86,500
Stanley Works ........................................................ 2,190 74,679
-------------
732,944
-------------
MANUFACTURING -- 0.7%
Domtar Corp. (a) ..................................................... 16,404 27,395
MoHawk Industries, Inc. (a) .......................................... 1,561 67,076
SPX Corp. ............................................................ 1,190 48,255
Tyco International Ltd. .............................................. 5,529 119,426
Whirlpool Corp. ...................................................... 1,734 71,701
-------------
333,853
-------------
MEDIA -- 1.1%
Liberty Media Corp. - Entertainment, Series A (a) .................... 8,496 148,510
News Corp., Class A (a) .............................................. 32,056 291,390
News Corp., Class B .................................................. 7,300 69,934
Time Warner Cable Inc., Class A (a) .................................. 2,681 57,507
-------------
567,341
-------------
MEDICAL EQUIPMENT & SUPPLIES -- 0.4%
Boston Scientific Corp. (a) .......................................... 23,812 184,305
-------------
MEDICAL SUPPLIES -- 3.5%
Covidien Ltd. (b) .................................................... 5,677 205,734
Johnson & Johnson .................................................... 26,246 1,570,299
-------------
1,776,033
-------------
31
MMA Praxis Value Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.5%, continued
METALS & MINING -- 0.8%
Nucor Corp. .......................................................... 5,832 $ 269,438
Steel Dynamics, Inc. ................................................. 4,754 53,150
United States Steel Corp. ............................................ 2,475 92,070
-------------
414,658
-------------
MULTIMEDIA -- 2.6%
The Walt Disney Co. .................................................. 31,566 716,232
Time Warner, Inc. .................................................... 62,529 629,042
-------------
1,345,274
-------------
NEWSPAPERS -- 0.2%
Gannett Co., Inc. .................................................... 4,710 37,680
The Washington Post Company, Class B ................................ 142 55,416
-------------
93,096
-------------
OFFICE EQUIPMENT & SERVICES -- 0.3%
Xerox Corp. .......................................................... 16,880 134,534
-------------
OIL - INTEGRATED -- 2.7%
ConocoPhillips ....................................................... 25,280 1,309,504
Hess Corp. ........................................................... 1,793 96,177
-------------
1,405,681
-------------
OIL & GAS EXPLORATION, PRODUCTION & SERVICES -- 3.5%
Anadarko Petroleum Corp. ............................................. 8,390 323,435
Apache Corp. ......................................................... 5,846 435,702
Cabot Oil & Gas Corp. ................................................ 1,940 50,440
Devon Energy Corp. ................................................... 7,319 480,931
ENSCO International, Inc. ............................................ 1,066 30,264
Murphy Oil Corp. ..................................................... 1,096 48,608
Nabors Industries Ltd. (a)(b) ........................................ 3,702 44,313
National-Oilwell Varco, Inc. (a) ..................................... 2,787 68,114
ONEOK, Inc. .......................................................... 2,681 78,071
Patterson-UTI Energy, Inc. ........................................... 3,354 38,605
Pioneer Natural Resources ............................................ 2,500 40,450
Plains Exploration & Production Co. (a) .............................. 2,063 47,944
Rowan Cos., Inc. ..................................................... 1,737 27,618
The Williams Cos., Inc. .............................................. 6,763 97,928
-------------
1,812,423
-------------
OIL & GAS OPERATIONS -- 1.4%
Ashland, Inc. ........................................................ 2,585 27,168
Chesapeake Energy Corp. .............................................. 9,771 157,997
Cimarex Energy Co. ................................................... 1,729 46,303
Newfield Exploration Co. (a) ......................................... 2,880 56,880
Noble Energy, Inc. ................................................... 3,173 156,175
Questar Corp. ........................................................ 1,745 57,044
Sunoco, Inc. ......................................................... 2,362 102,653
XTO Energy, Inc. ..................................................... 3,412 120,341
-------------
724,561
-------------
32
MMA Praxis Value Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.5%, continued
OIL & GAS TRANSMISSION -- 0.6%
El Paso Corp. ........................................................ 12,590 $ 98,580
Sempra Energy ........................................................ 5,390 229,775
-------------
328,355
-------------
PAPER PRODUCTS -- 0.5%
International Paper Co. .............................................. 7,650 90,270
MeadWestvaco Corp. ................................................... 4,850 54,272
Weyerhaeuser Co. ..................................................... 3,760 115,093
-------------
259,635
-------------
PHARMACEUTICALS -- 7.4%
Bristol-Myers Squibb Co. ............................................. 33,530 779,573
Eli Lilly and Co. .................................................... 17,460 703,114
Forest Laboratories, Inc. (a) ........................................ 3,471 88,406
Hospira, Inc. (a) .................................................... 3,090 82,874
King Pharmaceuticals, Inc. (a) ....................................... 7,944 84,365
Merck & Co., Inc. .................................................... 37,154 1,129,481
Mylan Laboratories, Inc. (a) ......................................... 6,956 68,795
Omnicare, Inc. ....................................................... 2,634 73,120
Wyeth ................................................................ 22,690 851,101
-------------
3,860,829
-------------
PRINTING - COMMERCIAL -- 0.1%
R.R. Donnelley & Sons Co. ............................................ 4,380 59,480
-------------
RAILROADS -- 0.6%
Norfolk Southern Corp. ............................................... 6,609 310,953
-------------
RAW MATERIALS -- 0.3%
Vulcan Materials Co. ................................................. 2,061 143,404
-------------
REAL ESTATE INVESTMENT TRUST -- 1.7%
Annaly Capital Management, Inc. ...................................... 9,607 152,463
Equity Residential ................................................... 4,980 148,504
Federal Realty Investment Trust ...................................... 1,074 66,674
HCP, Inc. ............................................................ 4,495 124,826
Kimco Realty Corp. ................................................... 4,490 82,077
Liberty Property Trust ............................................... 2,156 49,221
Regency Centers Corp. ................................................ 1,634 76,308
Vornado Realty Trust ................................................. 2,485 149,970
-------------
850,043
-------------
REAL ESTATE OPERATIONS -- 1.4%
AMB Property Corp. ................................................... 2,150 50,353
Apartment Investment & Management Co. ................................ 2,646 30,561
AvalonBay Communities, Inc. .......................................... 1,650 99,957
Boston Properties, Inc. .............................................. 2,165 119,075
Duke Realty Corp. .................................................... 4,136 45,331
Forest City Enterprises, Inc., Class A ............................... 2,986 20,006
Host Hotels & Resorts, Inc. .......................................... 9,452 71,552
Macerich Co. ......................................................... 2,338 42,458
33
MMA Praxis Value Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.5%, continued
REAL ESTATE OPERATIONS -- 1.4%, continued
Simon Property Group, Inc. ........................................... 2,040 $ 108,385
SL Green Realty Corp. ................................................ 1,482 38,384
UDR, Inc. ............................................................ 3,370 46,472
Weingarten Realty Investors .......................................... 2,084 43,118
-------------
715,652
-------------
RECREATIONAL ACTIVITIES -- 0.1%
Royal Caribbean Cruises Ltd. (b) .................................... 3,160 43,450
-------------
RECREATIONAL PRODUCTS -- 0.4%
Hasbro, Inc. ......................................................... 2,627 76,630
Mattel, Inc. ......................................................... 8,140 130,240
-------------
206,870
-------------
RESIDENTIAL BUILDING CONSTRUCTION -- 0.1%
KB Home .............................................................. 2,902 39,525
-------------
RETAIL -- 2.7%
Advance Auto Parts, Inc. ............................................. 2,915 98,090
Foot Locker, Inc. .................................................... 3,454 25,352
Home Depot, Inc. ..................................................... 29,533 679,850
J.C. Penney Co., Inc. ................................................ 3,969 78,189
Limited Brands, Inc. ................................................. 7,330 73,593
Macy's, Inc. ......................................................... 8,090 83,732
Sears Holdings Corp. (a) ............................................. 1,339 52,047
Sherwin-Williams Co. ................................................. 2,220 132,645
The Gap, Inc. ........................................................ 10,660 142,737
-------------
1,366,235
-------------
SAVINGS & LOANS -- 0.2%
People's United Financial, Inc. ...................................... 6,864 122,385
-------------
SEMICONDUCTORS -- 3.3%
Analog Devices, Inc. ................................................. 5,691 108,243
Intel Corp. .......................................................... 98,686 1,446,737
Intersil Corp. ....................................................... 3,100 28,489
Xilinx, Inc. ......................................................... 6,467 115,242
-------------
1,698,711
-------------
SOFTWARE & SERVICES -- 0.1%
Cadence Design Systems, Inc. (a) ..................................... 8,575 31,385
-------------
TELECOMMUNICATIONS -- 9.6%
AT&T, Inc. ........................................................... 103,454 2,948,438
CenturyTel, Inc. ..................................................... 2,630 71,878
Sprint Nextel Corp. (a) .............................................. 51,519 94,280
Telephone & Data Systems, Inc. ....................................... 1,172 37,211
Verizon Communications, Inc. ......................................... 49,520 1,678,728
Virgin Media, Inc. ................................................... 7,015 35,005
Windstream Corp. ..................................................... 12,182 112,074
-------------
4,977,614
-------------
34
MMA Praxis Value Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES/
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-SERVICES & EQUIPMENT -- 0.5%
Embarq Corp. ......................................................... 3,100 $ 111,476
Qwest Communications International, Inc. ............................. 29,266 106,528
Tellabs, Inc. (a) .................................................... 9,507 39,169
-------------
257,173
-------------
UTILITIES -- 0.4%
DTE Energy Co. ....................................................... 2,550 90,958
MDU Resources Group, Inc. ............................................ 2,939 63,424
National Fuel Gas Co. ................................................ 1,408 44,113
-------------
198,495
-------------
WASTE MANAGEMENT -- 0.4%
Republic Services, Inc. .............................................. 7,375 182,815
-------------
TOTAL COMMON STOCKS ..................................................... 50,529,600
-------------
SHORT TERM INVESTMENT -- 0.5%
Northern Institutional Government Select Portfolio, .49% ............. 241,527 $ 241,527
-------------
CORPORATE NOTES -- 1.5%
COMMUNITY DEVELOPMENT -- 1.5%
MMA Community Development Investment, Inc., 1.62%, 12/31/09, (c)+ .... 175,000 175,000
MMA Community Development Investment, Inc., 2.43%, 12/31/09, (c)+ .... 585,000 585,000
-------------
TOTAL CORPORATE NOTES ................................................... 760,000
-------------
SECURITIES HELD AS COLLATERAL FOR SECURITIES LENDING -- 1.6%
Northern Institutional Liquid Asset Portfolio ........................ 814,709 $ 814,709
-------------
TOTAL INVESTMENTS (Cost $74,280,834) -- 102.1% .......................... $ 52,345,836
Liabilities in excess of other assets -- (2.1%) ...................... (1,059,400)
-------------
NET ASSETS -- 100.0% .................................................... $ 51,286,436
=============
- ----------
(a) Non-income producing securities.
(b) All or part of this security was on loan, as of December 31, 2008.
(c) Represents affiliated restricted security as to resale to shareholders and
is not registered under the Securities Act of 1933. These securities have
been deemed illiquid under guidelines established by the Board of
Trustees. Acquisition date and current cost: MMA Community Development
Investment, Inc., 1.62% - 7/2002, $175,000 and MMA Community Development
Investment, Inc., 2.43% - 12/2001, $585,000. At December 31, 2008, these
securities had an aggregate market value of $760,000, representing 1.5% of
net assets.
+ Variable rate security. Rates presented are the rates in effect at
December 31, 2008. Date presented reflects next rate change date.
UNREALIZED
FUTURES CONTRACTS PURCHASED CONTRACTS DEPRECIATION
------------- -------------
S&P 500 Index Futures Contract, expiring March, 2009
(underlying face amount at value $675,075) 3 $ 1,950
See notes to financial statements.
35
- ----------------------------
MMA Praxis Growth Index Fund
- ----------------------------
MMA Praxis Growth Index Fund
Annual report to shareholders
Portfolio manager's letter
There was no place to hide during the second half of 2008. All equity strategies
suffered nearly equally: high quality, low quality, large, small, growth, value,
and dividend paying stocks all suffered the same fate as investors sold first
and asked questions later. U.S. Treasuries, cash, and coin jar savings were
about the only financial assets that didn't go down in value over the last
several months.
Growth style indexes tend to have smaller portions of their weight in Financials
and Energy, the two sectors that drove the market in opposite directions over
the last year or so. In most growth style indexes, technology companies
typically represent the largest portion of portfolio assets. In the MMA Praxis
Growth Index Fund, for example, the weight of Technology is more than twice as
large as Financial and Energy combined.
The Fund's A shares declined 37.34 percent, slightly exceeding the returns of
the MSCI Prime Market Growth Index, which declined 38.22 percent during 2008.
This slight outperformance was the sum result of positive and negative impacts
due to the Fund's screening regime, which tends not to have a significant
impact.
As we have explained in the past, the make-up of a typical growth index includes
fewer companies subject to MMA's screens as compared to value indexes. As a
result, we expect the Fund's performance to more closely match that of the MSCI
Prime Market Growth Index over time as compared with the MMA Praxis Value Index
Fund's performance relative to its benchmark. This was again the case in 2008.
Chad Horning, CFA(R)
MMA Praxis Growth Index Fund Manager
36
------------------
Performance review
------------------
MMA Praxis Growth Index Fund
Performance review
Total returns as of 12/31/08
[BAR CHART]
Inception Since
Date 1 Year Inception
---- ------ ---------
Class A 5/1/07 -37.34% -22.63%
Class A* 5/1/07 -40.65% -25.07%
Class B 5/1/07 -37.58% -22.98%
Class B** 5/1/07 -40.07% -24.84%
Class I 5/1/07 -37.09% -22.37%
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
* Reflects maximum front-end sales charge of 5.25%.
** Assumes redemption at the end of the stated period. The Fund imposes a
back-end sales charge (load) on Class B Shares if you sell your shares
before a certain period of time has elapsed. This is called a Contingent
Deferred Sales Charge ("CDSC"). The CDSC declines over five years starting
with year one and ending in year six as follows: 4%, 4%, 3%, 2%, 1%.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
37
MMA Praxis Growth Index Fund
Performance review
Growth of $10,000 investment 5/1/07 to 12/31/08
[LINE CHART]
MSCI US Prime
Class A* Class B Class I Growth Index(1)
- ------------------------ -------------------------- -------------------------- -------------------------
Date Balance Date Balance Date Balance Date Balance
- ---- ------- ---- ------- ---- ------- ---- -------
5/1/2007 9,479 5/1/2007 9,479 5/1/2007 10,000 5/1/2007 10,000
5/31/2007 9,773 5/31/2007 9,763 5/31/2007 10,300 5/31/2007 10,349
6/30/2007 9,640 6/30/2007 9,621 6/30/2007 10,170 6/30/2007 10,224
7/31/2007 9,441 7/31/2007 9,422 7/31/2007 9,961 7/31/2007 10,065
8/31/2007 9,603 8/31/2007 9,573 8/31/2007 10,131 8/31/2007 10,235
9/30/2007 9,935 9/30/2007 9,906 9/30/2007 10,482 9/30/2007 10,676
10/31/2007 10,277 10/31/2007 10,237 10/31/2007 10,842 10/31/2007 11,020
11/30/2007 9,916 11/30/2007 9,877 11/30/2007 10,472 11/30/2007 10,652
12/31/2007 9,862 12/31/2007 9,823 12/31/2007 10,420 12/31/2007 10,671
1/31/2008 9,103 1/31/2008 9,055 1/31/2008 9,609 1/31/2008 9,827
2/29/2008 8,904 2/29/2008 8,855 2/29/2008 9,410 2/29/2008 9,688
3/31/2008 8,857 3/31/2008 8,799 3/31/2008 9,360 3/31/2008 9,608
4/30/2008 9,312 4/30/2008 9,244 4/30/2008 9,840 4/30/2008 10,169
5/31/2008 9,634 5/31/2008 9,567 5/31/2008 10,180 5/31/2008 10,544
6/30/2008 8,970 6/30/2008 8,903 6/30/2008 9,482 6/30/2008 9,836
7/31/2008 8,866 7/31/2008 8,798 7/31/2008 9,381 7/31/2008 9,659
8/31/2008 8,999 8/31/2008 8,931 8/31/2008 9,522 8/31/2008 9,771
9/30/2008 8,080 9/30/2008 8,011 9/30/2008 8,550 9/30/2008 8,656
10/31/2008 6,676 10/31/2008 6,617 10/31/2008 7,066 10/31/2008 7,124
11/30/2008 6,107 11/30/2008 6,058 11/30/2008 6,465 11/30/2008 6,512
12/31/2008 6,178 12/31/2008 6,132 12/31/2008 6,554 12/31/2008 6,593
This chart represents historical performance of a hypothetical investment of
$10,000 in the Growth Index Fund from 5/1/07 to 12/31/08, and represents the
reinvestment of dividends and capital gains in the Fund.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
* Reflects maximum front-end sales charge of 5.25%.
(1) The MSCI US Prime Market Growth Index represents the growth companies of
the MSCI US Prime Market 750 Index. (The MSCI US Prime Market 750 Index
represents the universe of large and medium capitalization companies in
the US equity market). The MSCI US Prime Market Value Index is a subset of
the MSCI US Prime Market 750 Index.
The above index is for illustrative purposes only and does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The fund's performance reflects the
deduction of these value-added services. An investor cannot invest directly in
an index, although they can invest in its underlying securities.
38
---------------------------------
Schedule of portfolio investments
---------------------------------
MMA Praxis Growth Index Fund
Schedule of portfolio investments
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.7%
ADVERTISING -- 0.2%
Omnicom Group, Inc. .................................................. 1,414 $ 38,065
-------------
ADVERTISING AGENCIES -- 0.1%
Interpublic Group of Companies, Inc. (a) ............................. 1,619 6,411
Lamar Advertising Co. (a) ............................................ 475 5,966
Monster Worldwide, Inc. (a) .......................................... 805 9,733
-------------
22,110
-------------
AIRLINES -- 0.4%
Delta Air Lines, Inc. (a) ............................................ 1,719 19,700
Southwest Airlines Co. ............................................... 4,572 39,410
-------------
59,110
-------------
APPAREL MANUFACTURERS -- 0.9%
Coach, Inc. (a) ...................................................... 1,527 31,716
NIKE, Inc., Class B .................................................. 1,666 84,966
Polo Ralph Lauren Corp. .............................................. 368 16,711
-------------
133,393
-------------
ASSET MANAGEMENT -- 0.3%
Franklin Resources, Inc. ............................................. 717 45,730
-------------
BANKS -- 1.7%
Berkshire Hathaway, Inc., Class B (a) ................................ 44 141,416
Hudson City Bancorp, Inc. ............................................ 2,458 39,230
Northern Trust Corp. ................................................. 860 44,840
State Street Corp. ................................................... 1,186 46,645
-------------
272,131
-------------
BEVERAGES -- 3.5%
Coca-Cola Company .................................................... 4,412 199,731
PepsiCo, Inc. ........................................................ 6,504 356,224
-------------
555,955
-------------
BROADCAST SERVICES & PROGRAMMING -- 0.2%
Liberty Global, Inc. - Series C (a) .................................. 675 10,247
Liberty Global, Inc., Class A (a) .................................... 1,052 16,747
-------------
26,994
-------------
BROADCASTING/CABLE -- 1.9%
Cablevision Systems Corp., Class A ................................... 1,220 20,545
Comcast Corp. - Special Class A ...................................... 3,759 60,708
Comcast Corp., Class A ............................................... 8,017 135,327
DIRECTV Group, Inc. (a) .............................................. 2,901 66,462
DISH Network Corp., Class A (a) ...................................... 704 7,807
-------------
290,849
-------------
BROKERAGE SERVICES -- 1.0%
Charles Schwab Corp. ................................................. 4,466 72,215
TD Ameritrade Holding Corp. (a) ...................................... 1,431 20,392
The Goldman Sachs Group, Inc. ........................................ 833 70,297
-------------
162,904
-------------
39
MMA Praxis Growth Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.7%, continued
BUSINESS SERVICES -- 2.0%
Accenture Ltd. ....................................................... 2,683 $ 87,976
Affiliated Computer Services, Inc. (a) ............................... 557 25,594
Automatic Data Processing, Inc. ...................................... 2,262 88,986
IntercontinentalExchange, Inc. (a) ................................... 266 21,929
Iron Mountain, Inc. (a) .............................................. 831 20,551
Paychex, Inc. ........................................................ 1,472 38,684
Quanta Services, Inc. (a) ............................................ 1,121 22,196
-------------
305,916
-------------
CHEMICALS - GENERAL -- 1.4%
CF Industries Holdings, Inc. ......................................... 190 9,340
Church & Dwight Co., Inc. ............................................ 410 23,009
Ecolab, Inc. ......................................................... 1,098 38,595
Praxair, Inc. ........................................................ 1,341 79,602
Rohm and Haas Co. .................................................... 501 30,957
Sigma-Aldrich Corp. .................................................. 778 32,863
-------------
214,366
-------------
COMMERCIAL SERVICES -- 0.8%
Equifax, Inc. ........................................................ 733 19,439
Visa, Inc., Class A .................................................. 1,990 104,376
-------------
123,815
-------------
COMMUNICATIONS SERVICES -- 0.5%
American Tower Corp. (a) ............................................. 1,703 49,932
Crown Castle International Corp. (a) ................................. 1,424 25,034
-------------
74,966
-------------
COMPUTER STORAGE DEVICES -- 0.6%
EMC Corp. (a) ........................................................ 8,650 90,565
Micron Technology, Inc. (a) .......................................... 3,642 9,615
-------------
100,180
-------------
COMPUTERS & PERIPHERALS -- 10.8%
Apple, Inc. (a) ...................................................... 3,748 319,892
Cisco Systems, Inc. (a) .............................................. 24,708 402,740
Dell, Inc. (a) ....................................................... 7,638 78,213
Hewlett-Packard Co. .................................................. 10,300 373,787
International Business Machines Corp. ................................ 5,686 478,535
NetApp, Inc. (a) ..................................................... 1,541 21,528
Teradata Corp. (a) ................................................... 1,023 15,171
-------------
1,689,866
-------------
CONGLOMERATES -- 1.8%
3M Co. ............................................................... 2,775 159,674
Emerson Electric Co. ................................................. 3,294 120,593
-------------
280,267
-------------
40
MMA Praxis Growth Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.7%, continued
CONSTRUCTION -- 0.4%
Fluor Corp. .......................................................... 808 $ 36,255
Joy Global, Inc. ..................................................... 474 10,850
Martin Marietta Materials, Inc. ...................................... 198 19,222
-------------
66,327
-------------
CONSUMER FINANCIAL SERVICES -- 0.8%
H&R Block, Inc. ...................................................... 884 20,084
MasterCard, Inc., Class A ............................................ 374 53,456
Western Union Co. .................................................... 3,278 47,007
-------------
120,547
-------------
CONSUMER GOODS & SERVICES -- 3.4%
Kimberly-Clark Corp. ................................................. 666 35,125
Procter & Gamble Co. ................................................. 8,078 499,382
-------------
534,507
-------------
CONTAINERS - PAPER & PLASTIC -- 0.1%
Owens-Illinois, Inc. (a) ............................................. 811 22,165
-------------
COSMETICS & TOILETRIES -- 1.6%
Avon Products, Inc. .................................................. 1,991 47,844
Clorox Co. ........................................................... 649 36,058
Colgate-Palmolive Co. ................................................ 2,202 150,925
The Estee Lauder Companies, Inc. ..................................... 650 20,124
-------------
254,951
-------------
E-COMMERCE -- 0.9%
Amazon.com, Inc. (a) ................................................. 1,325 67,947
eBay, Inc. (a) ....................................................... 4,670 65,193
Priceline.com (a) .................................................... 162 11,931
-------------
145,071
-------------
ELECTRIC UTILITIES -- 0.5%
AES Corp. (a) ........................................................ 2,998 24,704
Allegheny Energy, Inc. ............................................... 748 25,327
NRG Energy, Inc. (a) ................................................. 1,060 24,730
-------------
74,761
-------------
ELECTRONIC & ELECTRICAL - GENERAL -- 0.3%
Cooper Industries Ltd., Class A ...................................... 820 23,969
Harman International Industries, Inc. ................................ 547 9,151
SunPower Corp., Class B (a) .......................................... 252 7,671
-------------
40,791
-------------
ELECTRONIC MEASURING INSTRUMENTS -- 0.4%
FLIR Systems, Inc. (a) ............................................... 637 19,543
Illumina, Inc. (a) ................................................... 726 18,912
Roper Industries, Inc. ............................................... 485 21,054
-------------
59,509
-------------
41
MMA Praxis Growth Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.7%, continued
FINANCIAL SERVICES -- 0.8%
CME Group, Inc. ...................................................... 252 $ 52,444
Moody's Corp. ........................................................ 968 19,447
NYSE Euronext ........................................................ 329 9,008
T. Rowe Price Group, Inc. ............................................ 1,120 39,693
-------------
120,592
-------------
FOOD PROCESSING -- 1.2%
Campbell Soup Co. .................................................... 634 19,026
General Mills, Inc. .................................................. 886 53,825
H.J. Heinz Co. ....................................................... 806 30,306
Hershey Foods Corp. .................................................. 497 17,266
Kellogg Co. .......................................................... 1,249 54,768
Ralcorp Holdings, Inc. (a) ........................................... 298 17,403
-------------
192,594
-------------
FOOD STORES -- 0.8%
Kroger Co. ........................................................... 2,583 68,217
Sysco Corp. .......................................................... 2,811 64,484
-------------
132,701
-------------
GAS UTILITIES -- 0.1%
Equitable Resources, Inc. ............................................ 522 17,513
-------------
HEALTH CARE SERVICES -- 0.8%
Covance, Inc. (a) .................................................... 370 17,031
DaVita, Inc. (a) ..................................................... 530 26,272
Edwards Lifesciences Corp. (a) ....................................... 339 18,628
Laboratory Corp. of America Hldgs. (a) ............................... 566 36,457
Quest Diagnostics, Inc. .............................................. 639 33,170
-------------
131,558
-------------
HOTELS & MOTELS -- 0.3%
Marriott International, Inc., Class A ................................ 1,469 28,572
Starwood Hotels & Resorts Worldwide, Inc. ............................ 1,159 20,746
-------------
49,318
-------------
INDUSTRIAL GOODS -- 0.1%
Fastenal Co. ......................................................... 632 22,025
-------------
INSURANCE -- 2.1%
Aetna, Inc. .......................................................... 2,102 59,907
AFLAC, Inc. .......................................................... 2,048 93,880
Aon Corp. ............................................................ 621 28,367
Coventry Health Care, Inc. (a) ....................................... 837 12,455
Humana, Inc. (a) ..................................................... 795 29,638
The Progressive Corp. ................................................ 886 13,122
WellPoint, Inc. (a) .................................................. 2,133 89,863
-------------
327,232
-------------
INTERNET INFORMATION PROVIDERS -- 2.4%
Google, Inc., Class A (a) ............................................ 1,012 311,342
Yahoo!, Inc. (a) ..................................................... 5,517 67,307
-------------
378,649
-------------
42
MMA Praxis Growth Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.7%, continued
MACHINERY -- 0.5%
AGCO Corp. (a) ....................................................... 672 $ 15,852
Bucyrus International, Inc. .......................................... 430 7,964
Deere & Co. .......................................................... 959 36,748
Flowserve Corp. ...................................................... 305 15,708
-------------
76,272
-------------
MANUFACTURING -- 0.6%
Cummins, Inc. ........................................................ 936 25,019
PACCAR, Inc. ......................................................... 1,464 41,871
Tyco International Ltd. .............................................. 904 19,526
-------------
86,416
-------------
MEDIA -- 0.4%
Discovery Communications, Inc., Class A (a) .......................... 738 10,450
Discovery Communications, Inc., Class C (a) .......................... 738 9,882
Viacom, Inc., Class B (a) ............................................ 2,305 43,933
-------------
64,265
-------------
MEDICAL - BIOMEDICAL/GENETIC -- 1.7%
Amgen, Inc. (a) ...................................................... 4,411 254,735
Myriad Genetics, Inc. (a) ............................................ 192 12,722
-------------
267,457
-------------
MEDICAL EQUIPMENT & SUPPLIES -- 4.9%
Baxter International, Inc. ........................................... 2,691 144,211
Becton, Dickinson & Co. .............................................. 1,136 77,691
C.R. Bard, Inc. ...................................................... 518 43,647
Covidien Ltd. ........................................................ 1,059 38,378
DENTSPLY International, Inc. ......................................... 953 26,913
Hologic, Inc. (a) .................................................... 1,172 15,318
Intuitive Surgical, Inc. (a) ......................................... 173 21,969
Medtronic, Inc. ...................................................... 4,790 150,501
St. Jude Medical, Inc. (a) ........................................... 1,572 51,813
Stryker Corp. ........................................................ 1,300 51,935
Thermo Fisher Scientific, Inc. (a) ................................... 1,875 63,881
Varian Medical Systems, Inc. (a) ..................................... 682 23,897
Waters Corp. (a) ..................................................... 530 19,425
Zimmer Holdings, Inc. (a) ............................................ 1,006 40,663
-------------
770,242
-------------
METALS & MINING -- 0.1%
Cliffs Natural Resources, Inc. ....................................... 335 8,579
-------------
OFFICE EQUIPMENT & SERVICES -- 0.2%
Pitney Bowes, Inc. ................................................... 1,296 33,022
-------------
OIL & GAS EXPLORATION, PRODUCTION & SERVICES -- 1.5%
ENSCO International Inc. ............................................. 485 13,769
EOG Resources, Inc. .................................................. 1,035 68,910
Foster Wheeler Ltd. (a) .............................................. 623 14,566
43
MMA Praxis Growth Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.7%, continued
OIL & GAS EXPLORATION, PRODUCTION & SERVICES -- 1.5%, continued
Petrohawk Energy Corp. (a) ........................................... 947 $ 14,802
Transocean Ltd. (a) .................................................. 1,332 62,937
XTO Energy, Inc. ..................................................... 1,512 53,328
-------------
228,312
-------------
OIL & GAS OPERATIONS -- 0.8%
Noble Corp. .......................................................... 1,131 24,950
Questar Corp. ........................................................ 510 16,672
Southwestern Energy Co. (a) .......................................... 1,474 42,702
The Williams Companies, Inc. ......................................... 1,025 14,842
Ultra Petroleum Corp. (a) ............................................ 638 22,017
-------------
121,183
-------------
OIL WELL SERVICES & EQUIPMENT -- 0.9%
Cameron International Corp. (a) ...................................... 920 18,860
Diamond Offshore Drilling, Inc. ...................................... 283 16,680
FMC Technologies, Inc.(a) ............................................ 563 13,416
Helmerich & Payne .................................................... 305 6,939
Nabors Industries Ltd. (a)(b) ........................................ 725 8,678
National-Oilwell Varco, Inc. (a) ..................................... 1,166 28,497
Smith International, Inc. ............................................ 931 21,311
Weatherford International Ltd. (a) ................................... 2,887 31,237
-------------
145,618
-------------
OIL, GAS & CONSUMABLE FUELS -- 0.7%
Denbury Resources, Inc. (a) .......................................... 1,146 12,514
Hess Corp. ........................................................... 812 43,556
Murphy Oil Corp. ..................................................... 565 25,058
Range Resources Corp. ................................................ 701 24,107
-------------
105,235
-------------
PHARMACEUTICALS -- 11.7%
Abbott Laboratories .................................................. 6,268 334,524
Alexion Pharmaceuticals, Inc. (a) .................................... 383 13,861
Allergan, Inc. ....................................................... 1,365 55,037
Amylin Pharmaceuticals, Inc. (a) ..................................... 704 7,638
Biogen Idec, Inc. (a) ................................................ 1,255 59,776
Celgene Corp. (a) .................................................... 1,854 102,489
Cephalon, Inc. (a) ................................................... 411 31,663
Express Scripts Inc., Class A (a) .................................... 945 51,956
Forest Laboratories, Inc. (a) ........................................ 880 22,414
Genentech, Inc. (a) .................................................. 1,995 165,405
Genzyme Corp. (a) .................................................... 1,216 80,706
Gilead Sciences, Inc. (a) ............................................ 3,888 198,832
Johnson & Johnson .................................................... 5,551 332,117
McKesson Corp. ....................................................... 1,390 53,835
Perrigo Co. .......................................................... 473 15,283
Pharmaceutical Product Development, Inc. ............................. 813 23,585
44
MMA Praxis Growth Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.7%, continued
PHARMACEUTICALS -- 11.7%, continued
Schering-Plough Corp. ................................................ 6,775 $ 115,378
Teva Pharmaceutical Industries Ltd. ADR (b) .......................... 246 10,472
UnitedHealth Group, Inc. ............................................. 5,250 139,650
Vertex Pharmaceuticals, Inc. (a) ..................................... 559 16,982
-------------
1,831,603
-------------
PRINTING & PUBLISHING -- 0.4%
Dun & Bradstreet Corp. ............................................... 377 29,104
McGraw-Hill Companies, Inc. .......................................... 1,405 32,582
-------------
61,686
-------------
RAILROADS -- 0.4%
CSX Corp. ............................................................ 1,733 56,271
-------------
REAL ESTATE INVESTMENT TRUST -- 0.4%
Public Storage, Inc. ................................................. 574 45,633
Ventas, Inc. ......................................................... 695 23,331
-------------
68,964
-------------
REAL ESTATE OPERATIONS -- 0.2%
Simon Property Group, Inc. ........................................... 593 31,506
-------------
RESTAURANTS -- 2.6%
McDonald's Corp. ..................................................... 4,461 277,429
Starbucks Corp. (a) .................................................. 3,105 29,373
Tim Hortons, Inc. .................................................... 1,050 30,282
Yum! Brands, Inc. .................................................... 2,121 66,812
-------------
403,896
-------------
RETAIL -- 9.2%
AutoZone, Inc. (a) ................................................... 222 30,962
Bed Bath & Beyond, Inc. (a) .......................................... 1,359 34,546
Best Buy Co., Inc. ................................................... 1,581 44,442
Costco Wholesale Corp. ............................................... 1,913 100,433
CVS Caremark Corp. ................................................... 6,042 173,647
Dollar Tree, Inc. (a) ................................................ 453 18,935
Family Dollar Stores, Inc. ........................................... 702 18,301
GameStop Corp., Class A (a) .......................................... 694 15,032
Kohl's Corp. (a) ..................................................... 1,223 44,273
Medco Health Solutions, Inc. (a) ..................................... 2,136 89,520
Ross Stores, Inc. .................................................... 592 17,600
Staples, Inc. ........................................................ 3,352 60,068
Target Corp. ......................................................... 3,090 106,698
TJX Companies, Inc. .................................................. 1,805 37,129
Walgreen Co. ......................................................... 4,314 106,426
Wal-Mart Stores, Inc. ................................................ 9,691 543,277
-------------
1,441,289
-------------
RETAIL - BUILDING PRODUCTS -- 0.9%
Lowe's Companies, Inc. ............................................... 6,394 137,599
-------------
45
MMA Praxis Growth Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.7%, continued
SCHOOLS & EDUCATIONAL SERVICES -- 0.4%
Apollo Group, Inc. (a) ............................................... 606 $ 46,432
ITT Educational Services, Inc. (a) ................................... 181 17,191
-------------
63,623
-------------
SEMICONDUCTORS -- 2.1%
Advanced Micro Devices, Inc. (a) ..................................... 4,105 8,867
Altera Corp. ......................................................... 1,794 29,978
Applied Materials, Inc. .............................................. 5,938 60,152
Broadcom Corp., Class A (a) .......................................... 2,013 34,161
First Solar, Inc. (a) ................................................ 186 25,661
Lam Research Corp. (a) ............................................... 691 14,704
Marvell Technology Group Ltd. (a) .................................... 2,593 17,295
MEMC Electronic Materials, Inc. (a) .................................. 944 13,480
National Semiconductor Corp. ......................................... 1,190 11,983
NVIDIA Corp. (a) ..................................................... 2,325 18,763
SunPower Corp., Class A (a) .......................................... 250 9,250
Texas Instruments, Inc. .............................................. 5,529 85,810
-------------
330,104
-------------
SOFTWARE & COMPUTER SERVICES -- 7.8%
Adobe Systems, Inc. (a) .............................................. 2,305 49,073
Autodesk, Inc. (a) ................................................... 1,014 19,925
CA, Inc. ............................................................. 2,071 38,376
Citrix Systems, Inc. (a) ............................................. 853 20,105
Cognizant Technology Solutions Corp. (a) ............................. 1,407 25,410
Electronic Arts, Inc. (a) ............................................ 1,632 26,177
Intuit, Inc. (a) ..................................................... 1,600 38,064
McAfee, Inc. (a) ..................................................... 846 29,246
Microsoft Corp. ...................................................... 34,257 665,957
Oracle Corp. (a) ..................................................... 17,255 305,932
-------------
1,218,265
-------------
SOFTWARE & SERVICES -- 1.3%
Activision Blizzard, Inc. (a) ........................................ 2,709 23,406
Akamai Technologies, Inc. (a) ........................................ 755 11,393
BMC Software, Inc. (a) ............................................... 1,165 31,350
Fiserv, Inc. (a) ..................................................... 777 28,259
IMS Health, Inc. ..................................................... 1,126 17,070
Red Hat, Inc. (a) .................................................... 1,160 15,335
Salesforce.com, Inc. (a) ............................................. 484 15,493
Symantec Corp. (a) ................................................... 3,573 48,307
VeriSign, Inc. (a) ................................................... 922 17,592
-------------
208,205
-------------
TELECOMMUNICATIONS -- 2.5%
Corning, Inc. ........................................................ 6,701 63,861
Juniper Networks, Inc. (a) ........................................... 2,413 42,252
MetroPCS Communications, Inc. (a) .................................... 1,159 17,211
46
MMA Praxis Growth Index Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES/
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 98.7%, continued
TELECOMMUNICATIONS -- 2.5%, continued
NII Holdings, Inc., Class B (a) ...................................... 998 $ 18,144
Qualcomm, Inc. ....................................................... 6,887 246,760
-------------
388,228
-------------
TRANSPORTATION SERVICES -- 1.4%
C.H. Robinson Worldwide, Inc. ........................................ 806 44,354
Expeditors International of Washington, Inc. ......................... 1,026 34,135
Fedex Corp. .......................................................... 1,239 79,482
J.B. Hunt Transport Services, Inc. ................................... 491 12,899
United Parcel Service, Inc., Class B ................................. 1,002 55,270
-------------
226,140
-------------
TOTAL COMMON STOCKS ..................................................... 15,461,408
-------------
SHORT TERM INVESTMENT -- 1.2%
Northern Institutional Government Select Portfolio ................... 187,613 187,613
-------------
CORPORATE NOTES -- 1.2%
COMMUNITY DEVELOPMENT -- 1.2%
MMA Community Development Investment, Inc., 1.62%, 12/31/09, (c)+ .... 35,000 35,000
MMA Community Development Investment, Inc., 2.43%, 12/31/09, (c)+ .... 155,000 155,000
-------------
TOTAL CORPORATE NOTES ................................................... 190,000
-------------
SECURITIES HELD AS COLLATERAL FOR SECURITIES LENDING -- 0.1%
Northern Institutional Liquid Asset Portfolio ........................ 18,275 $ 18,275
-------------
TOTAL INVESTMENTS (Cost $22,692,017) -- 101.2% .......................... $ 15,857,296
Liabilities in excess of other assets -- (1.2%) ...................... (184,681)
-------------
NET ASSETS -- 100.0% .................................................... $ 15,672,615
=============
- ----------
(a) Non-income producing securities.
(b) All or part of this security was on loan, as of December 31, 2008.
(c) Represents affiliated restricted security as to resale to shareholders and
is not registered under the Securities Act of 1933. These securities have
been deemed illiquid under guidelines established by the Board of
Trustees. Acquisition date and current cost: MMA Community Development
Investment, Inc., 1.62% - 12/2001, $35,000 and MMA Community Development
Investment, Inc., 2.43% - 12/2001, $155,000. At December 31, 2008, these
securities had an aggregate market value of $190,000 representing 1.2% of
net assets.
+ Variable rate security. Rates presented are the rates in effect at
December 31, 2008. Date presented reflects next rate change date.
See notes to financial statements.
47
- -----------------------------
MMA Praxis International Fund
- -----------------------------
MMA Praxis International Fund
Annual report to shareholders
Portfolio manager's letter
The year ended December 31, 2008, was an extraordinary period in global equity
markets. Declines have been exceptional, abnormal, and even record breaking.
However, while they have left us with valuations at depressed levels, many
stocks are beginning to look attractive and to provide selective worthwhile
investment opportunities.
The market declines which had picked up steam in the first half of 2008
continued at a staggering pace during the second half of the year. Over the
year, the major global equity indices experienced falls in excess of 40 percent
in United States dollar terms with the U.S. markets close behind and volatility
at extreme levels. The realization that what had started as a domestic U.S.
housing problem had spiraled into a global economic recession hit markets hard.
The congressional bailout for the financial sector failed to restore liquidity
to the interbank market and Libor-Treasury spreads, while improving, remained
high.
The deepening economic difficulties spread globally across all sectors. Job
losses, earnings declines, and sharp reductions in earnings forecasts were
widely reported. The downward trend drove commodity prices sharply lower with
the fall in oil prices being one of the only rays of sunshine for the consumer.
By the end of the year oil prices had recorded a decline of over $100 dollars a
barrel from their peak reached less than six months earlier. As the year closed,
however, equity markets recorded a slight improvement with December experiencing
a long-awaited month of positive returns. Foreign markets returned between 6-
and 8-percent, in part reflecting the renewed strength of foreign currencies
against the dollar.
All sectors and geographic regions in the major international developed,
emerging, and small cap indexes, were heavily impacted by the fallout and
suffered major losses. Financials and Materials were the weakest performing
sectors in the MSCI EAFE index, largely reflecting the continuing impact of the
financial industry crisis and the recent decline in commodity prices. Over the
year, some of the world's weakest markets were in Europe, the bottom three being
Ireland, Finland, and Austria with declines of between 66 percent and 71 percent
in U.S. dollar terms.
Strategy
As the market difficulties unfolded, we made major changes to the portfolio that
were driven by a combination of top-down considerations at industry and country
levels as well as by stock specific influences. We switched the emphasis and
weights in Financials significantly by reducing and eliminating exposure to
banks that need capital and moving toward companies with strong capital bases
and those with little capital needs, such as insurers and stock exchanges. By
year end we were overweight in the sector. Telecommunication Services and Health
Care also had meaningful, but more modest, increases. Consumer Discretionary,
Information Technology, Utilities, and Materials saw the largest reductions.
Geographically, the changes in the portfolio structure were more modest, with
the largest increase in Japan, offset by the reduction in Emerging Markets,
which represented only a small weight by year end. Much of the increased weight
in Japan reflected our view that domestic Japanese companies had been the
relative safe haven in the recent turmoil as the yen had been strengthening.
Within Europe, we had some rotation with Switzerland and Germany seeing
additions and Italy, France, Finland, and the Netherlands seeing reductions.
Contributors to performance
Over the year the portfolio slightly outperformed the benchmark index, MSCI EAFE
(Net Dividends) Index. Positive contributions came from a range of sectors.
Stock outperformance helped both Financials and Consumer Discretionary, two of
the weaker sectors, in addition to the sectors' being underweight. While we
increased our weight in Financials later in the year, our underweight position,
as a whole, combined well with our specific industry emphasis. Geographically,
Europe, mainly Switzerland, Germany, Belgium, and Ireland, and Asia ex-Japan,
through Australia and Hong Kong, were the notable regions. In a year of
significant negative returns in equity markets, elevated cash levels proved
positive as did the currency hedges put in place to guard against appreciation
in the U.S. dollar mid year.
48
Detractors from performance
The larger detracting sectors were Energy and Utilities, due to underweights in
these stronger performing sectors. In Energy, SRI restrictions resulted in some
stock underperformance. Energy is particularly affected with some of the leading
performers not eligible for the portfolio. Despite this effect, as of December
31, 2008, the fund's A-share class was able to outperform its benchmark, the
MSCI EAFE Index, on a one-year and three-year annualized basis.
Portfolio outlook
By all accounts, 2008 has been a year of extremes in financial and economic
markets. The "where were you when..." moments have been plentiful and painful so
we will not list them here. Anyone owning virtually any type of asset, for
example stocks, bonds, houses, commodities, or cars, has likely seen substantial
erosion in price. And here we would like to emphasize the word price versus
value.
Unfortunately, it is likely more pain is to come - particularly in the economy.
In our view, corporate earnings around the world will decline, unemployment
around the world will increase, and capital spending will continue to be under
pressure as capacity use declines. In this type of environment, capital
preservation has to be at the forefront of an investor's thoughts: avoiding the
big losers in the banking or corporate sector and surviving or achieving gains
in the next cycle is a desired outcome.
Several of the factors we previously mentioned would likely come into play have
indeed become part of the existing environment. We are experiencing huge
monetary stimulus, which will now be followed by enormous fiscal stimulus, all
within the context of declining inflation. Several elements lead us to believe
that although this horror movie will be long, it will have a Hollywood ending.
Despite the concerns about deflation, we are pleased to see that decline in
inflation as it provides more room for policy intervention. We also believe that
despite the large figures handled to date - with the U.S. $700 billion TARP
program - the stimulus response has been moderate in the context of the size of
the U.S. and global economies. At about $14 trillion of Gross Domestic Product,
a gradual policy response of investment of $700 billion is equivalent to about 5
percent of GDP. Again, much of this was invested in instruments which should
provide strong rates of return. Indeed we expect to see a healthy profit by the
Federal Reserve as the crisis abates, given their low borrowing cost and high
return on the instruments purchased. A U.S. $800 billion fiscal stimulus package
is also prudent under the circumstances, again looking at the overall size of
the economy. As the economy recovers, tax revenues should increase and help ease
future fiscal burdens.
We have moved to an environment that has shifted from private sector to public
sector protagonist, but this can only be temporary if we want to preserve the
capitalist system. Monetary stimulus will only last as long as we have deflation
or little inflation and growth. As soon as concern of inflation surfaces and or
growth picks up, monetary stimulus will disappear and we will shift to
tightening. For those worried about inflation as a result of monetary policy:
What is given can be taken away very rapidly, so we are more sanguine. Fiscal
policy will be limited by the willingness of economic agents to buy government
debt at low cost. Now, the cost is extremely low and the willingness to buy is
high, as it is still perceived as a low-risk asset. We do expect policy makers
will keep providing monetary and fiscal stimulus until it works or bumps up
against some of the limitations we mentioned above, thereby increasing the
likelihood of ultimate success.
The most important element to note is that as an investor of capital, i.e., a
seller of capital, we are working with money, a commodity that now has value in
the corporate world. Although yields on Treasuries are very low, corporate debt
spreads are still high and equity multiples are low. Equity issuance is
virtually nonexistent and very expensive whenever a firm succeeds. That means
returns to capital are high and the returns on our investments should be high.
In our view, the importance of this point cannot be overstated.
49
We are interested in the theme of scarcity of capital and the high price of
capital in a capital-constrained world. We are actively investing in firms where
capital scarcity has improved their operating environment. Property and casualty
insurance is one area that uses capital as its raw material and requires a
substantial amount of reserves. Consequently, the supply of insurance has
suffered, driving up rates to those insurers that have excess capital to place
and have strong credit ratings to command premium rates. Indeed, we are seeing
reinsurance and retro rates stabilize and increase from already high levels.
Given time, and barring major unprovisioned natural catastrophes, returns should
be very attractive.
Another interesting theme is embedded in the assessment of the future regulation
of financial markets and its impact on existing trading structures. We do not
expect the disappearance of derivatives, as these instruments perform a useful
function when used as intended. However, given the massive turmoil that was in
part caused by the extensive use of unregulated and unreserved derivatives, we
expect future regulations will include provisions that will make it more likely
for derivatives that previously traded over-the-counter in private transactions
to trade on-exchange. This will increase flows to those stock exchanges best
equipped to deal in the flow of derivatives. We are invested in several
companies we believe will benefit from this trend.
We are also interested in cyclical sectors which are despised and feared by
investors most, but which we know will eventually recover, such as employment.
We are tracking several employment indicators carefully and fully expect to see
significant further declines in employment globally. We also expect that as
stimulus takes hold and the crisis abates, employment levels will begin to
moderate and recover. We are tracking early indicators of employment as they
will assist us in refining our entry points in related stocks such as recruiting
firms and consumer-related companies.
We believe there has already been a substantial change in the underlying
ownership of certain stocks. Many stocks that are anticipating bad news are now
held by longer-term conservative, unleveraged, value investors who will not sell
on bad news. In fact, regarding this point we are positioned in companies where
we know more bad news is coming, but where we are not interested in selling due
to the underlying value. Is anyone invested today in autos expecting good news?
Most of the fearful investors have sold.
Greed is an emotion that can cause exhilaration and feed on itself and therefore
can be longer-term. Fear is a more exhausting emotion and can be generally
remedied more quickly - by selling and raising liquidity levels. The extent of
damage from fear has come from the leverage in the system, which is being
reduced daily through the deleveraging that has taken place.
Stock prices reflect the value of companies, which is dependant on corporate
earnings, which broadly depend on GDP growth. GDP growth, while in a downturn,
has not structurally disappeared. Babies are being born, people are still
productive, and although we may have a high unemployment rate, potentially
reaching 9 percent or more, we still have 91 percent of people working hard to
create growth. Only six months ago we were concerned about the pressure emerging
market economies were putting on commodity prices, with oil at $147 per barrel.
The basis for growth in emerging market economies, as they seek to improve their
standard of living, has not disappeared.
Although there is more suffering to come in the short term, the inherent value
of many businesses will be intact as we emerge from this crisis, and we hope to
be well positioned when we enter the next cycle of growth. This takes us back to
the observation we made earlier about distinguishing equity prices and values.
With earnings yields of around 7-10 percent, prices are low and values are
attractive.
Francis Claro, CFA(R)
Evergreen Investment Management
50
------------------
Performance review
------------------
MMA Praxis International Fund
Performance review
Average annual total returns as of 12/31/08
[BAR CHART]
Inception
Date 1 Year 3 Year 5 Year 10 Year
---- ------ ------ ------ -------
Class A 5/12/99 -41.01% -7.20% 0.62% -1.08%
Class A* 5/12/99 -44.09% -8.85% -0.46% -1.61%
Class B 4/1/97 -41.53% -7.90% -0.15% -1.61%
Class B** 4/1/97 -43.75% -8.75% -0.33% -1.61%
Class I 5/1/06 -40.85% -6.99% 0.44% -1.40%
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
* Reflects maximum front-end sales charge of 5.25%.
** Assumes redemption at the end of the stated period. The Fund imposes a
back-end sales charge (load) on Class B Shares if you sell your shares
before a certain period of time has elapsed. This is called a Contingent
Deferred Sales Charge ("CDSC"). The CDSC declines over five years starting
with year one and ending in year six as follows: 4%, 4%, 3%, 2%, 1%.
Class A Share and Class I Share of this Fund were not in existence prior to
5/12/99 and 5/1/06, respectively. Class A Share performance and Class I Share
performance calculated for any period prior to 5/12/99 and 5/1/06 are based on
the performance of Class B Share since inception of 4/1/97. The B Share
Contingent Deferred Sales Charge (CDSC) does not apply to performance over 5
years; therefore, the 10-year return does not reflect the CDSC.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
51
MMA Praxis International Fund
Performance review
Growth of $10,000 investment 12/31/98 to 12/31/08
[LINE CHART]
Class A* Class B Class I MSCI EAFE - Index(1)
- ------------------------ -------------------------- -------------------------- -------------------------
Date Balance Date Balance Date Balance Date Balance
- ---- ------- ---- ------- ---- ------- ---- -------
12/31/1998 9,479 12/31/1998 10,000 12/31/1998 10,000 12/31/1998 10,000
3/31/1999 9,675 3/31/1999 10,207 3/31/1999 10,207 3/31/1999 10,146
6/30/1999 10,104 6/30/1999 10,659 6/30/1999 10,659 6/30/1999 10,411
9/30/1999 10,677 9/30/1999 11,243 9/30/1999 11,243 9/30/1999 10,875
12/31/1999 13,503 12/31/1999 14,200 12/31/1999 14,200 12/31/1999 12,729
3/31/2000 13,815 3/31/2000 14,513 3/31/2000 14,513 3/31/2000 12,723
6/30/2000 12,576 6/30/2000 13,192 6/30/2000 13,192 6/30/2000 12,227
9/30/2000 11,575 9/30/2000 12,127 9/30/2000 12,127 9/30/2000 11,247
12/31/2000 10,772 12/31/2000 11,271 12/31/2000 11,271 12/31/2000 10,953
3/31/2001 9,259 3/31/2001 9,676 3/31/2001 9,676 3/31/2001 9,457
6/30/2001 8,803 6/30/2001 9,181 6/30/2001 9,181 6/30/2001 9,374
9/30/2001 7,359 9/30/2001 7,659 9/30/2001 7,659 9/30/2001 8,067
12/31/2001 8,034 12/31/2001 8,351 12/31/2001 8,351 12/31/2001 8,630
3/31/2002 8,129 3/31/2002 8,450 3/31/2002 8,450 3/31/2002 8,679
6/30/2002 7,685 6/30/2002 7,973 6/30/2002 7,973 6/30/2002 8,510
9/30/2002 6,162 9/30/2002 6,386 9/30/2002 6,386 9/30/2002 6,835
12/31/2002 6,484 12/31/2002 6,703 12/31/2002 6,703 12/31/2002 7,278
3/31/2003 5,814 3/31/2003 6,004 3/31/2003 6,004 3/31/2003 6,686
6/30/2003 6,805 6/30/2003 7,018 6/30/2003 7,018 6/30/2003 7,994
9/30/2003 7,252 9/30/2003 7,464 9/30/2003 7,464 9/30/2003 8,648
12/31/2003 8,243 12/31/2003 8,476 12/31/2003 8,494 12/31/2003 10,128
3/31/2004 8,585 3/31/2004 8,804 3/31/2004 8,805 3/31/2004 10,574
6/30/2004 8,296 6/30/2004 8,494 6/30/2004 8,495 6/30/2004 10,620
9/30/2004 8,243 9/30/2004 8,430 9/30/2004 8,431 9/30/2004 10,596
12/31/2004 9,483 12/31/2004 9,679 12/31/2004 9,680 12/31/2004 12,223
3/31/2005 9,421 3/31/2005 9,596 3/31/2005 9,597 3/31/2005 12,211
6/30/2005 9,286 6/30/2005 9,444 6/30/2005 9,445 6/30/2005 12,120
9/30/2005 10,111 9/30/2005 10,269 9/30/2005 10,270 9/30/2005 13,385
12/31/2005 10,636 12/31/2005 10,792 12/31/2005 10,793 12/31/2005 13,937
3/31/2006 11,509 3/31/2006 11,654 3/31/2006 11,655 3/31/2006 15,257
6/30/2006 11,436 6/30/2006 11,563 6/30/2006 11,582 6/30/2006 15,400
9/30/2006 11,704 9/30/2006 11,812 9/30/2006 11,863 9/30/2006 16,014
12/31/2006 12,796 12/31/2006 12,892 12/31/2006 12,991 12/31/2006 17,680
3/31/2007 13,147 3/31/2007 13,223 3/31/2007 13,367 3/31/2007 18,414
6/30/2007 13,973 6/30/2007 14,032 6/30/2007 14,221 6/30/2007 19,642
9/30/2007 14,473 9/30/2007 14,505 9/30/2007 14,730 9/30/2007 20,080
12/31/2007 14,408 12/31/2007 14,419 12/31/2007 14,682 12/31/2007 19,736
3/31/2008 13,249 3/31/2008 13,260 3/31/2008 13,517 3/31/2008 17,996
6/30/2008 12,547 6/30/2008 12,557 6/30/2008 12,805 6/30/2008 17,648
9/30/2008 10,124 9/30/2008 10,133 9/30/2008 10,346 9/30/2008 14,030
12/31/2008 8,499 12/31/2008 8,506 12/31/2008 8,684 12/31/2008 11,238
For performance purposes, the above graph has not been adjusted for CDSC
charges.
This chart represents historical performance of a hypothetical investment of
$10,000 in the International Fund from 12/31/98 to 12/31/08, and represents the
reinvestment of dividends and capital gains in the Fund.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
* Reflects maximum front-end sales charge of 5.25%.
Class A Share and Class I Share of this Fund were not in existence prior to
5/12/99 and 5/1/06, respectively. Class A Share performance and Class I Share
performance calculated for any period prior to 5/12/99 and 5/1/06 are based on
the performance of Class B Share since inception of 4/1/97. The B Share
Contingent Deferred Sales Charge (CDSC) does not apply to performance over 5
years; therefore, the 10-year return does not reflect the CDSC.
(1) The MSCI EAFE Index is a widely recognized, unmanaged index composed of a
sample of companies representative of the developed markets throughout the
world, excluding the United States and Canada.
The above index is for illustrative purposes only and does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The fund's performance reflects the
deduction of these value-added services. An investor cannot invest directly in
an index, although they can invest in its underlying securities.
52
---------------------------------
Schedule of portfolio investments
---------------------------------
MMA Praxis International Fund
Schedule of portfolio investments
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 95.2%
ARGENTINA -- 0.3%
REAL ESTATE MANAGEMENT & DEVELOPMENT -- 0.3%
IRSA Inversiones y Representaciones S.A. (a)(b) ...................... 51,510 $ 226,644
-------------
AUSTRALIA -- 4.6%
DIVERSIFIED FINANCIALS -- 1.7%
ASX Ltd. ............................................................. 60,636 1,445,977
-------------
INSURANCE -- 1.7%
AMP Ltd. ............................................................. 84,155 327,337
QBE Insurance Group Ltd. ............................................. 61,435 1,132,731
-------------
1,460,068
-------------
METALS & MINING -- 0.6%
Centennial Coal Co. Ltd. ............................................. 112,853 269,748
Newcrest Mining Ltd. ................................................. 8,944 217,187
-------------
486,935
-------------
OIL, GAS & CONSUMABLE FUELS -- 0.6%
Woodside Petroleum Ltd. (a) .......................................... 20,297 535,826
-------------
3,928,806
-------------
BELGIUM -- 3.3%
BANKS -- 0.4%
KBC GROEP NV ......................................................... 10,465 316,056
-------------
DIVERSIFED TELECOMMUNICATION SERVICES -- 1.3%
Belgacom ............................................................. 28,467 1,093,644
-------------
DIVERSIFIED FINANCIALS -- 1.6%
Compagnie Nationale a Portefeuille (CNP)/National
Portefeuille Maatschappij (NPM) ...................................... 3,793 185,894
Groupe Bruxelles Lambert S.A. ........................................ 15,063 1,212,702
Groupe Bruxelles Lambert STR VVPR (a) ............................... 1,358 17
-------------
1,398,613
-------------
2,808,313
-------------
BERMUDA -- 0.2%
INSURANCE -- 0.2%
RenaissanceRe Holdings Ltd. .......................................... 3,777 194,742
-------------
CANADA -- 2.2%
CHEMICALS -- 0.4%
Potash Corp. of Saskatchewan, Inc. ................................... 4,242 310,599
-------------
COMMUNICATIONS EQUIPMENT -- 0.2%
Research In Motion Ltd. (a) .......................................... 4,115 166,987
-------------
METALS & MINING -- 1.6%
Agnico-Eagle Mines Ltd. (b) .......................................... 10,783 553,491
Barrick Gold Corp. (b) ............................................... 23,402 860,492
-------------
1,413,983
-------------
1,891,569
-------------
53
MMA Praxis International Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 95.2%, continued
CHINA -- 1.6%
ELECTRICAL EQUIPMENT -- 0.3%
Yingli Green Energy Holding Co. Ltd. ADR (a)(b) ...................... 38,854 $ 237,009
-------------
INTERNET SOFTWARE & SERVICES -- 1.3%
Baidu.com, Inc. ADR (a) .............................................. 6,832 892,054
SINA Corp. (a)(b) .................................................... 9,812 227,148
-------------
1,119,202
-------------
1,356,211
-------------
DENMARK -- 1.6%
ELECTRICAL EQUIPMENT -- 1.0%
Vestas Wind Systems A/S (a) .......................................... 15,096 859,949
-------------
PHARMACEUTICALS -- 0.6%
Novo Nordisk A/S, Class B ............................................ 9,243 470,148
-------------
1,330,097
-------------
FINLAND -- 1.0%
INSURANCE -- 1.0%
Sampo Oyj, Class A ................................................... 44,811 852,361
-------------
FRANCE -- 11.7%
BANKS -- 1.0%
BNP Paribas S.A. ..................................................... 15,071 653,758
Credit Agricole S.A. ................................................. 19,075 215,315
-------------
869,073
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 1.9%
France Telecom S.A. .................................................. 58,779 1,646,452
-------------
ENERGY EQUIPMENT & SERVICES -- 0.5%
Technip SA ........................................................... 13,204 407,425
-------------
FOOD RETAIL -- 0.1%
Carrefour S.A. ....................................................... 2,279 88,530
-------------
HOTELS, RESTAURANTS & LEISURE -- 2.4%
Sodexho Alliance S.A. ................................................ 35,741 1,996,221
-------------
INSURANCE -- 1.7%
Axa (b) .............................................................. 32,310 728,813
CNP Assurances ....................................................... 6,408 467,905
SCOR SE` ............................................................. 11,234 260,831
-------------
1,457,549
-------------
MEDIA -- 2.4%
Vivendi Universal S.A. ............................................... 63,134 2,067,996
-------------
MULTI LINE RETAIL -- 0.5%
PPR (b) .............................................................. 6,843 450,269
-------------
MULTI UTILITIES -- 0.1%
Gaz de France ........................................................ 1,617 80,661
-------------
OFFICE ELECTRONICS -- 1.1%
Neopost S.A. ......................................................... 9,781 891,912
-------------
9,956,088
-------------
54
MMA Praxis International Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 95.2%, continued
GERMANY -- 13.8%
CHEMICALS -- 0.3%
BASF SE .............................................................. 6,802 $ 265,593
-------------
CONSTRUCTION & ENGINEERING -- 0.2%
Bilfinger Berger AG .................................................. 2,879 154,858
-------------
DIVERSIFIED FINANCIALS -- 2.1%
Deutsche Boerse AG ................................................... 24,831 1,805,406
-------------
DIVERSIFIED TELECOMMUNICATION SERVICES-- 3.3%
Deutsche Telekom AG .................................................. 180,998 2,750,132
-------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 3.2%
Fresenius AG ......................................................... 45,808 2,701,581
-------------
INSURANCE -- 3.6%
Allianz SE ........................................................... 5,316 568,431
Muenchener Rueckversicherungs-Gesellschaft AG ........................ 15,537 2,424,043
-------------
2,992,474
-------------
MULTI UTILITIES -- 0.4%
RWE AG ............................................................... 3,597 321,059
-------------
PHARMACEUTICALS -- 0.4%
Merck KGaA ........................................................... 4,009 360,425
-------------
TEXTILES, APPAREL & LUXURY GOODS -- 0.3%
Adidas-Salomon AG .................................................... 7,443 285,131
-------------
11,636,659
-------------
GREECE -- 3.1%
BANKS -- 0.4%
National Bank of Greece SA ........................................... 15,449 288,320
TT Hellenic Postbank S.A. ............................................ 3,260 25,521
-------------
313,841
-------------
DIVERSIFED TELECOMMUNICATION SERVICES -- 2.2%
Hellenic Telecommunications Organization SA ......................... 113,993 1,903,249
-------------
DIVERSIFIED FINANCIALS -- 0.5%
Hellenic Exchanges S.A. .............................................. 55,414 434,510
-------------
2,651,600
-------------
ISRAEL -- 0.4%
PHARMACEUTICALS -- 0.4%
Teva Pharmaceutical Industries Ltd. .................................. 8,277 352,352
-------------
JAPAN -- 12.3%
BANKS -- 0.7%
Mitsubishi UFJ Financial Group, Inc. ................................. 47,700 299,553
Mizuho Financial Group, Inc. (b) ..................................... 62 176,108
Sumitomo Mitsui Financial Group, Inc. ................................ 27 111,899
-------------
587,560
-------------
55
MMA Praxis International Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 95.2%, continued
JAPAN -- 12.3%, continued
FOOD RETAIL -- 3.1%
FamilyMart Co. Ltd. .................................................. 15,400 $ 668,246
Lawson, Inc. ......................................................... 19,400 1,117,898
Sugi Holdings Co. Ltd. (b) ........................................... 33,600 897,457
-------------
2,683,601
-------------
HOUSEHOLD PRODUCTS -- 0.8%
Unicharm Corp. ....................................................... 8,800 661,492
-------------
INSURANCE -- 2.5%
Sompo Japan Insurance, Inc. .......................................... 152,600 1,129,021
T&D Holdings, Inc. ................................................... 23,050 974,805
-------------
2,103,826
-------------
MEDIA -- 0.7%
Toho Co. Ltd. (b) .................................................... 29,300 629,971
-------------
OFFICE ELECTRONICS -- 0.3%
CANON, Inc. .......................................................... 7,500 237,438
-------------
PERSONAL PRODUCTS -- 1.3%
Shiseido Company Ltd. ................................................ 54,000 1,109,586
-------------
PHARMACEUTICALS -- 1.1%
DAIICHI SANKYO CO. LTD. .............................................. 18,900 446,585
Shionogi & Co., Ltd. ................................................. 17,600 454,145
-------------
900,730
-------------
ROAD & RAIL -- 0.8%
Central Japan Railway Co. ............................................ 28 242,634
East Japan Railway Co. ............................................... 56 425,285
-------------
667,919
-------------
SOFTWARE -- 1.0%
Nintendo Co. Ltd. .................................................... 1,200 458,203
Square Enix Co. Ltd. ................................................. 12,100 390,114
-------------
848,317
-------------
10,430,440
-------------
NETHERLANDS -- 5.0%
CHEMICALS -- 0.1%
Akzo Nobel N.V. ...................................................... 3,009 124,730
-------------
DIVERSIFED TELECOMMUNICATION SERVICES -- 2.2%
Koninklijke (Royal) KPN N.V. ......................................... 124,896 1,824,797
-------------
DIVERSIFIED FINANCIALS -- 0.5%
ING Groep N.V. ....................................................... 42,196 466,709
-------------
FOOD PRODUCTS -- 2.2%
Unilever NV .......................................................... 75,053 1,828,152
-------------
4,244,388
-------------
NORWAY -- 0.3%
BANKS -- 0.3%
Dnb NOR ASA .......................................................... 68,665 274,398
-------------
56
MMA Praxis International Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 95.2%, continued
SINGAPORE -- 0.3%
BANKS -- 0.3%
DBS Group Holdings Ltd. .............................................. 46,000 $ 272,518
-------------
SOUTH KOREA -- 0.4%
FOOD PRODUCTS -- 0.4%
Lotte Confectionary Co. Ltd. ......................................... 295 307,974
-------------
SPAIN -- 5.0%
BANKS -- 0.2%
Banco Santander S.A. ................................................. 17,217 167,153
-------------
BIOTECHNOLOGY -- 0.9%
Grifols S.A. ......................................................... 41,473 730,278
-------------
DIVERSIFED TELECOMMUNICATION SERVICES -- 2.0%
Telefonica S.A. ...................................................... 76,676 1,739,288
-------------
DIVERSIFIED FINANCIAL SERVICES -- 0.8%
Bolsas y Mercados Espanoles (b) ...................................... 11,035 291,280
Criteria Caixacorp S.A. .............................................. 105,725 423,865
-------------
715,145
-------------
ELECTRIC SERVICES -- 0.4%
Endesa S.A. .......................................................... 8,076 330,545
-------------
SPECIALTY RETAIL -- 0.7%
Industria de Diseno Textil, S.A. ..................................... 13,023 582,801
-------------
4,265,210
-------------
SWEDEN -- 1.4%
BANKS -- 0.6%
Svenska Handelsbanken AB, Class A (b) ................................ 31,478 526,049
-------------
SPECIALTY RETAIL -- 0.8%
Hennes & Mauritz AB, Class B (b) ..................................... 16,329 656,377
-------------
1,182,426
-------------
SWITZERLAND -- 13.5%
CAPITAL MARKETS -- 1.4%
Credit Suisse Group .................................................. 22,684 634,190
UBS AG (a) ........................................................... 35,533 515,747
-------------
1,149,937
-------------
DIVERSIFED TELECOMMUNICATION SERVICES -- 1.9%
Swisscom AG .......................................................... 5,026 1,599,332
-------------
DIVERSIFIED FINANCIALS -- 0.7%
Pargesa Holding AG ................................................... 8,724 581,647
-------------
ELECTRICAL EQUIPMENT -- 0.3%
ABB Ltd. ............................................................. 16,593 252,441
-------------
FOOD PRODUCTS -- 1.7%
Lindt & Spruengli AG ................................................. 51 95,197
Nestle S.A. .......................................................... 34,568 1,365,556
-------------
1,460,753
-------------
57
MMA Praxis International Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 95.2%, continued
SWITZERLAND -- 13.5%, continued
INSURANCE -- 2.3%
Zurich Financial Services AG ......................................... 9,020 $ 1,965,988
-------------
LIFE SCIENCES TOOLS & SERVICES -- 1.6%
Lonza Group AG (b) ................................................... 14,372 1,329,262
-------------
PHARMACEUTICALS -- 2.9%
Novartis AG .......................................................... 16,320 815,376
Roche Holding AG ..................................................... 10,604 1,637,757
-------------
2,453,133
-------------
PROFESSIONAL SERVICES -- 0.7%
SGS SA ............................................................... 532 555,066
-------------
11,347,559
-------------
UNITED KINGDOM -- 12.3%
BANKS -- 1.7%
Barclays plc ......................................................... 45,583 105,144
HSBC Holdings plc .................................................... 78,685 781,544
Standard Chartered plc ............................................... 41,460 538,405
-------------
1,425,093
-------------
CONTAINERS -- 1.3%
Rexam plc ............................................................ 209,111 1,086,191
-------------
FOOD RETAIL -- 0.9%
Tesco plc ............................................................ 150,020 792,762
-------------
HOTELS, RESTAURANTS & LEISURE -- 1.3%
Compass Group plc .................................................... 214,390 1,085,193
-------------
INSURANCE -- 0.4%
Amlin plc ............................................................ 60,338 318,290
-------------
METALS & MINING -- 0.6%
Anglo American plc ................................................... 4,032 95,493
BHP Billiton plc ..................................................... 16,040 315,727
Randgold Resources Ltd. (b) .......................................... 3,048 133,868
-------------
545,088
-------------
OIL, GAS & CONSUMABLE FUELS -- 3.5%
BG Group plc ......................................................... 60,583 851,021
BP plc ............................................................... 138,108 1,081,951
Royal Dutch Shell plc - Class A ...................................... 39,278 1,047,283
-------------
2,980,255
-------------
PHARMACEUTICALS -- 0.7%
AstraZeneca plc ...................................................... 14,585 605,542
-------------
PROFESSIONAL SERVICES -- 1.9%
Experian Group Ltd. .................................................. 238,323 1,524,937
Intertek Group plc ................................................... 8,746 101,358
-------------
1,626,295
-------------
10,464,709
-------------
58
MMA Praxis International Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES/
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 95.2%, continued
UNITED STATES -- 0.9%
HEALTH CARE EQUIPMENT & SUPPLIES -- 0.9%
Synthes, Inc. ........................................................ 6,344 $ 802,534
-------------
TOTAL COMMON STOCKS ..................................................... 80,777,598
-------------
EXCHANGE TRADED FUND -- 0.0%
FRANCE -- 0.0%
Lyxor ETF DJ Euro Stoxx 50 ........................................... 196 6,738
-------------
RIGHT -- 0.0%
SINGAPORE -- 0.0%
FINANCIAL SERVICES -- 0.0%
DBS Group Holdings Ltd. (c) .......................................... 23,000 0
-------------
CORPORATE NOTES -- 1.5%
COMMUNITY DEVELOPMENT -- 1.5%
DOMESTIC -- 1.5%
MMA Community Development Investment, Inc., 1.62%, 12/31/09, (d)+ .... 543,000 543,000
MMA Community Development Investment, Inc., 2.43%, 12/31/09, (d)+ .... 762,000 762,000
-------------
TOTAL CORPORATE NOTES ................................................... 1,305,000
-------------
SECURITIES HELD AS COLLATERAL FOR SECURITIES LENDING-- 5.4%
Northern Institutional Liquid Asset Portfolio ........................ 4,592,975 4,592,975
-------------
TOTAL INVESTMENTS (Cost $87,132,408) -- 102.1% .......................... 86,682,311
Liabilities in excess of other assets -- (2.1%) ...................... (1,809,040)
-------------
NET ASSETS -- 100.0% .................................................... $ 84,873,271
=============
- ----------
(a) Non-income producing securities.
(b) All or part of this security was on loan, as of December 31, 2008.
(c) Security is valued at it's fair value as determined in good faith in
accordance with consistently applied procedures established by and under
the general supervision of the Board of Trustees. At December 31, 2008,
this security represents 0.0% of net assets.
(d) Represents affiliated restricted security as to resale to shareholders and
is not registered under the Securities Act of 1933. These securities have
been deemed illiquid under guidelines established by the Board of
Trustees. Acquisition date and current cost: MMA Community Development
Investment, Inc., 1.62% - 12/2001, $543,000 and MMA Community Development
Investment, Inc., 2.43% - 12/2001, $762,000. At December 31, 2008 these
securities had an aggregate market value of $1,305,000, representing 1.5%
of net assets.
+ Variable rate security. Rates presented are the rates in effect at
December 31, 2008. Date presented reflects next rate change date.
ADR - American Depositary Receipt
plc - Public Liability Company
See notes to financial statements.
59
- -------------------------
MMA Praxis Small Cap Fund
- -------------------------
MMA Praxis Small Cap Fund
Annual report to shareholders
Portfolio managers' letter
The MMA Praxis Small Cap Fund (A shares) declined 32.8 percent versus the
Russell 2000's 26.9 percent decline during the second half of 2008. For 2008,
the Russell 2000 had its worst performance year ever and it was the worst year
for small caps since 1973.
The selling pressure climaxed in October and November as liquidity concerns,
limited access to capital, and forced selling as the system deleveraged, forced
many market participants to liquidate. The credit crisis, along with the
heightened fear and uncertainty, pushed the economy into a deep recession that
showed no immediate signs of a bottom. The government continues to pump massive
amounts of both fiscal and monetary stimulus into the economy, which will likely
result in the economy bottoming in 2009.
Volatility will likely continue into the first half of the year as corporate
profits decline sharply and corporate outlooks are lowered. Despite the
bleakness of the current economic environment, we remain positive about the
outlook for the stock market and believe the market most likely made its low in
the fourth quarter of 2008. The massive stimulus being injected into the
economy, combined with attractive stock valuations, an oversold market, and
extremely negative investor sentiment should result in a more rewarding
investment environment going forward.
The market was weak for most of the year, but from mid-September to
mid-November, the Russell 2000 lost half of its value. This sell-off was quick,
broad, and deep. There were very few places to hide. The Energy, Materials, and
Industrial sectors, market leaders of the past few years, were hit the hardest
during this period. For 2008, all sectors declined. But the biggest surprise was
that the benchmarks' largest sector, Financials, on a relative basis,
outperformed in what is the worst credit crisis since the 1930s. The relative
outperformance by Financials helped the small value stocks significantly
outperform the small growth stocks given the weighting differential in the two
areas.
The Fund had a difficult year as our higher quality, better-capitalized,
companies were also punished in the markets broad based selling. As we review
the year, our biggest performance challenge was Financials. Both stock selection
and our decision to underweight the sector, given its relative outperformance,
detracted from our overall performance. We're still underweight the benchmark,
but began increasing our exposure in the second half of 2008 as we believe the
bad news is now being discounted in the stocks. For the year, stock selection in
Technology was a bright spot relative to the benchmark. Our focus remains on
high quality companies that can internally finance their growth objectives and a
portfolio tilt towards an economic recovery should allow us to perform better in
2009.
Our investment strategy is to identify competitively advantaged companies that
generate strong financial returns with good reinvestment opportunities and
purchase these stocks at attractive prices. We believe this strategy will
continue to be beneficial for our investors. Our goal is to generate superior
returns over time relative to our benchmark and to minimize the risk
(volatility) of the portfolio.
The management of our investment process truly maximizes our internal,
research-intensive, investment process. By incorporating the total research
capabilities of the firm, we are constantly identifying and analyzing companies
that meet our stringent criteria. We believe our consistent investment
disciplines have produced a winning investment strategy, and have us well
positioned going forward.
Steven R. Purvis, CFA Co-portfolio Manager
Luther King Capital Management
60
------------------
Performance review
------------------
MMA Praxis Small Cap Fund
Performance review
Total returns as of 12/31/08
[BAR CHART]
Inception Since
Date 1 Year Inception
---- ------ ---------
Class A 5/1/07 -38.74% -27.71%
Class A* 5/1/07 -41.97% -29.99%
Class B 5/1/07 -39.05% -28.15%
Class B** 5/1/07 -41.49% -29.89%
Class I 5/1/07 -38.53% -27.52%
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
* Reflects maximum front-end sales charge of 5.25%.
** Assumes redemption at the end of the stated period. The Fund imposes a
back-end sales charge (load) on Class B Shares if you sell your shares
before a certain period of time has elapsed. This is called a Contingent
Deferred Sales Charge ("CDSC"). The CDSC declines over five years starting
with year one and ending in year six as follows: 4%, 4%, 3%, 2%, 1%.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
61
MMA Praxis Small Cap Fund
Performance review
Growth of $10,000 investment 5/1/07 to 12/31/08
[LINE CHART]
Russell 2000
Class A* Class B Class I Index(1)
- ------------------------ -------------------------- -------------------------- -------------------------
Date Balance Date Balance Date Balance Date Balance
- ---- ------- ---- ------- ---- ------- ---- -------
5/1/2007 9,479 5/1/2007 9,479 5/1/2007 10,000 5/1/2007 10,000
5/31/2007 9,706 5/31/2007 9,706 5/31/2007 10,240 5/31/2007 10,410
6/30/2007 9,754 6/30/2007 9,744 6/30/2007 10,290 6/30/2007 10,258
7/31/2007 9,300 7/31/2007 9,289 7/31/2007 9,820 7/31/2007 9,556
8/31/2007 9,290 8/31/2007 9,271 8/31/2007 9,810 8/31/2007 9,773
9/30/2007 9,527 9/30/2007 9,508 9/30/2007 10,060 9/30/2007 9,941
10/31/2007 9,660 10/31/2007 9,632 10/31/2007 10,210 10/31/2007 10,227
11/30/2007 9,024 11/30/2007 8,987 11/30/2007 9,530 11/30/2007 9,492
12/31/2007 9,005 12/31/2007 8,959 12/31/2007 9,509 12/31/2007 9,487
1/31/2008 8,370 1/31/2008 8,333 1/31/2008 8,848 1/31/2008 8,840
2/29/2008 8,237 2/29/2008 8,191 2/29/2008 8,708 2/29/2008 8,512
3/31/2008 8,132 3/31/2008 8,077 3/31/2008 8,599 3/31/2008 8,548
4/30/2008 8,454 4/30/2008 8,399 4/30/2008 8,949 4/30/2008 8,906
5/31/2008 8,815 5/31/2008 8,750 5/31/2008 9,329 5/31/2008 9,314
6/30/2008 8,161 6/30/2008 8,096 6/30/2008 8,639 6/30/2008 8,597
7/31/2008 8,198 7/31/2008 8,134 7/31/2008 8,678 7/31/2008 8,915
8/31/2008 8,321 8/31/2008 8,248 8/31/2008 8,809 8/31/2008 9,237
9/30/2008 7,667 9/30/2008 7,603 9/30/2008 8,118 9/30/2008 8,501
10/31/2008 6,113 10/31/2008 6,058 10/31/2008 6,477 10/31/2008 6,733
11/30/2008 5,213 11/30/2008 5,167 11/30/2008 5,526 11/30/2008 5,936
12/31/2008 5,517 12/31/2008 5,460 12/31/2008 5,846 12/31/2008 6,281
This chart represents historical performance of a hypothetical investment of
$10,000 in the Small Cap Fund from 5/1/07 to 12/31/08, and represents the
reinvestment of dividends and capital gains in the Fund.
Past performance does not guarantee future results. The performance data quoted
represents past performance and current returns may be lower or higher. The
investment return and principal value will fluctuate so that an investor's
shares, when redeemed may be worth more or less than the original cost. These
performance figures do not reflect the deduction of taxes that a shareholder
would pay on fund distributions or the redemption of fund shares. To obtain
performance information current to the most recent month end, please visit
mmapraxis.com.
The total return set forth reflects certain expenses that were reduced,
reimbursed or paid by third party. In such instances, and without this activity,
total return would have been lower.
* Reflects maximum front-end sales charge of 5.25%.
(1) The Russell 2000 Index is a subset of the Russell 3000 Index representing
approximately 10% of the total market capitalization of that index. It
includes approximately 2000 of the smallest securities based on a
combination of their market cap and current index membership.
The above index is for illustrative purposes only and does not reflect the
deduction of expenses associated with a mutual fund, such as investment
management and fund accounting fees. The fund's performance reflects the
deduction of these value-added services. An investor cannot invest directly in
an index, although they can invest in its underlying securities.
62
---------------------------------
Schedule of portfolio investments
---------------------------------
MMA Praxis Small Cap Fund
Schedule of portfolio investments
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 94.4%
AIR FREIGHT & LOGISTICS -- 2.4%
Forward Air Corp. .................................................... 10,950 $ 265,756
Pacer International, Inc. ............................................ 16,750 174,703
-------------
440,459
-------------
BIOTECHNOLOGY -- 1.1%
Parexel International Corp. (a) ...................................... 21,100 204,881
-------------
CAPITAL MARKETS -- 2.1%
KBW, Inc. (a) ........................................................ 4,600 105,800
Lazard Ltd., Class A ................................................. 9,500 282,530
-------------
388,330
-------------
CHEMICALS -- 1.5%
Calgon Carbon Corp. (a) .............................................. 18,050 277,248
-------------
COMMERCIAL BANKS -- 7.3%
First Horizon National Corp. ......................................... 19,807 209,363
Glacier Bancorp, Inc. ................................................ 12,100 230,142
PrivateBancorp, Inc. ................................................. 10,550 342,453
Prosperity Bancshares, Inc. .......................................... 12,650 374,313
Texas Capital Bancshares, Inc. (a) ................................... 12,650 169,004
-------------
1,325,275
-------------
COMMERCIAL SERVICES & SUPPLIES -- 3.2%
Copart, Inc. (a) ..................................................... 5,800 157,702
Waste Connections, Inc. (a) .......................................... 13,450 424,617
-------------
582,319
-------------
COMMUNICATIONS EQUIPMENT -- 2.3%
F5 Networks, Inc. (a) ................................................ 9,300 212,598
SBA Communications Corp. (a) ......................................... 12,700 207,264
-------------
419,862
-------------
COMPUTERS & PERIPHERALS -- 0.8%
Brocade Communications Systems, Inc. (a) ............................. 52,600 147,280
-------------
CONSUMER FINANCIAL SERVICES -- 2.9%
Cash America International, Inc. ..................................... 8,350 228,373
First Cash Financial Services, Inc. (a) .............................. 15,200 289,712
-------------
518,085
-------------
DISTRIBUTORS -- 1.3%
LKQ Corp. (a) ........................................................ 20,600 240,196
-------------
DIVERSIFIED CONSUMER SERVICES -- 5.5%
Capella Education Co. (a) ............................................ 5,800 340,807
Coinstar, Inc. (a) ................................................... 7,350 143,399
Grand Canyon Education, Inc. (a) ..................................... 12,300 230,994
K12, Inc. (a) ........................................................ 15,150 284,062
-------------
999,262
-------------
DIVERSIFIED TELECOMMUNICATION -- 1.2%
Premiere Global Services, Inc. (a) ................................... 24,700 212,667
-------------
63
MMA Praxis Small Cap Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 94.4%, continued
ELECTRONIC EQUIPMENT & INSTRUMENTS -- 8.8%
Baldor Electric Co. .................................................. 10,100 $ 180,285
Franklin Electric Co., Inc. .......................................... 9,000 252,990
IPG Photonics Corp. (a) .............................................. 11,200 147,616
Itron, Inc. (a) ...................................................... 3,550 226,277
MTS Systems Corp. .................................................... 6,850 182,484
National Instruments Corp. ........................................... 10,650 259,433
Rofin-Sinar Technologies, Inc. (a) ................................... 6,500 133,770
Trimble Navigation Ltd. (a) .......................................... 8,700 188,007
-------------
1,570,862
-------------
ENERGY EQUIPMENT & SERVICES -- 3.3%
Atwood Oceanics, Inc. (a) ............................................ 8,200 125,296
Core Laboratories N.V. (b) ........................................... 2,350 140,671
Dril-Quip, Inc. (a) .................................................. 8,350 171,259
Superior Well Services, Inc. (a) ..................................... 8,850 88,500
Willbros Group, Inc. (a)(b) .......................................... 9,700 82,159
-------------
607,885
-------------
FOOD PRODUCTS -- 1.6%
Chiquita Brands International, Inc. (a) .............................. 19,300 285,254
-------------
FOOD RETAIL -- 0.6%
The Andersons, Inc. .................................................. 6,200 102,176
-------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 9.0%
American Medical Systems Holdings, Inc. (a) .......................... 10,600 95,294
Conceptus, Inc. (a) .................................................. 21,950 334,078
Haemonetics Corp. (a) ................................................ 4,350 245,775
Immucor, Inc. (a) .................................................... 8,200 217,956
Meridian Bioscience, Inc. ............................................ 4,700 119,709
MWI Veterinary Supply, Inc. (a) ...................................... 11,550 311,388
Wright Medical Group, Inc. (a) ....................................... 14,200 290,106
-------------
1,614,306
-------------
HEALTH CARE PROVIDERS & SERVICES -- 3.0%
inVentiv Health, Inc. (a) ............................................ 14,800 170,792
PSS World Medical, Inc. (a) .......................................... 20,250 381,105
-------------
551,897
-------------
HEALTH CARE TECHNOLOGY -- 0.9%
Eclipsys Corp. (a) ................................................... 11,900 168,861
-------------
HOTELS, RESTAURANTS & LEISURE -- 0.7%
Chipotle Mexican Grill, Class A (a) .................................. 2,050 127,059
-------------
HOUSEHOLD DURABLES -- 1.0%
Tempur-Pedic International, Inc. ..................................... 25,650 181,859
-------------
HOUSEHOLD PRODUCTS -- 1.5%
Rent-A-Center, Inc. (a) .............................................. 15,400 271,810
-------------
INDUSTRIAL CONGLOMERATES -- 0.8%
Raven Industries, Inc. ............................................... 5,750 138,575
-------------
64
MMA Praxis Small Cap Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 94.4%, continued
INSURANCE -- 2.6%
Argo Group International Holdings Ltd. (a)(b) ........................ 10,359 $ 351,377
Max Capital Group Ltd. ............................................... 7,300 129,210
-------------
480,587
-------------
INTERNET SOFTWARE & SERVICES -- 1.2%
Blackboard, Inc. (a) ................................................. 8,600 225,578
-------------
LIFE SCIENCES TOOLS & SERVICES -- 0.8%
Charles River Laboratories International, Inc. (a) ................... 5,400 141,480
-------------
MACHINERY -- 3.8%
CIRCOR International, Inc. ........................................... 4,650 127,875
CLARCOR, Inc. ........................................................ 8,200 272,076
Kaydon Corp. ......................................................... 8,550 293,693
-------------
693,644
-------------
MARINE -- 1.0%
Kirby Corp. (a) ...................................................... 6,750 184,680
-------------
METALS & MINING -- 2.3%
Silgan Holdings, Inc. ................................................ 8,550 408,776
-------------
OIL, GAS & CONSUMABLE FUELS -- 2.5%
Concho Resources, Inc. (a) ........................................... 4,300 98,126
Denbury Resources, Inc. (a) .......................................... 16,100 175,812
EXCO Resources, Inc. (a) ............................................. 20,200 183,012
-------------
456,950
-------------
PAPER & FOREST PRODUCTS -- 0.1%
Clearwater Paper Corp. (a) ........................................... 2,800 23,492
-------------
PHARMACEUTICALS -- 0.9%
Endo Pharmaceuticals Holdings, Inc. (a) .............................. 6,550 169,514
-------------
REAL ESTATE -- 1.4%
Potlatch Corp. ....................................................... 9,800 254,898
-------------
ROAD & RAIL -- 2.4%
Con-way, Inc. ........................................................ 5,950 158,270
Landstar System, Inc. ................................................ 7,250 278,618
-------------
436,888
-------------
SEMICONDUCTORS -- 1.1%
FormFactor, Inc. (a) ................................................. 13,350 194,910
-------------
SOFTWARE -- 4.6%
Nuance Communications, Inc. (a) ...................................... 25,000 259,000
TIBCO Software, Inc. (a) ............................................. 32,100 166,599
Wind River Systems, Inc. (a) ......................................... 45,850 414,026
-------------
839,625
-------------
SPECIALTY RETAIL -- 4.4%
Barnes & Noble, Inc. ................................................. 3,000 45,000
Foot Locker, Inc. .................................................... 25,000 183,500
Jos. A. Bank Clothiers, Inc. (a) ..................................... 8,800 230,120
Tractor Supply Co. (a) ............................................... 5,800 209,612
Ulta Salon, Cosmetics & Frangrances, Inc. (a) ........................ 15,050 124,614
-------------
792,846
-------------
65
MMA Praxis Small Cap Fund
Schedule of portfolio investments, continued
December 31, 2008
SHARES/
PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 94.4%, continued
TEXTILES, APPAREL & LUXURY GOODS -- 1.8%
Phillips-Van Heusen Corp. ............................................ 8,200 $ 165,066
Under Armour, Inc., Class A (a) ...................................... 6,850 163,304
-------------
328,370
-------------
TRADING COMPANIES & DISTRIBUTORS -- 0.7%
WESCO International, Inc. (a) ........................................ 6,500 124,995
-------------
TOTAL COMMON STOCKS ..................................................... 17,133,641
-------------
SHORT TERM INVESTMENT -- 4.3%
Northern Institutional Government Select Portfolio ................... 785,392 785,392
-------------
CORPORATE NOTES -- 1.1%
COMMUNITY DEVELOPMENT -- 1.1%
MMA Community Development Investment, Inc., 1.62%, 12/31/09, (c)+ .... 80,000 80,000
MMA Community Development Investment, Inc., 2.43%, 12/31/09, (c)+ .... 120,000 120,000
-------------
TOTAL CORPORATE NOTES ................................................... 200,000
-------------
SECURITIES HELD AS COLLATERAL FOR SECURITIES LENDING -- 1.3%
Northern Institutional Liquid Asset Portfolio ........................ 228,990 228,990
-------------
TOTAL INVESTMENTS (Cost $24,217,506) -- 101.1% .......................... 18,348,023
Liabilities in excess of other assets -- (1.1%) ...................... (192,735)
-------------
NET ASSETS -- 100.0% .................................................... $ 18,155,288
=============
- ----------
(a) Non-income producing securities.
(b) All or part of this security was on loan, as of December 31, 2008.
(c) Represents affiliated restricted security as to resale to shareholders and
is not registered under the Securities Act of 1933. These securities have
been deemed illiquid under guidelines established by the Board of
Trustees. Acquisition date and current cost: MMA Community Development
Investment, Inc., 1.62% - 12/2001, $80,000 and MMA Community Development
Investment, Inc., 2.43% - 12/2001, $120,000. At December 31, 2008, these
securities had an aggregate market value of $200,000 representing 1.1% of
net assets.
+ Variable rate security. Rates presented are the rates in effect at
December 31, 2008. Date presented reflects next rate change date.
See notes to financial statements.
66
----------------------------------
Statements of assets & liabilities
----------------------------------
MMA Praxis Funds
Statements of assets & liabilities
December 31, 2008
Intermediate Core Value
Income Fund Stock Fund Index Fund
-------------- -------------- --------------
Assets
Investment securities, at cost .................................... $ 235,065,644 $ 243,444,059 $ 74,280,834
-------------- -------------- --------------
Investment securities, at market value - including $10,120,508;
$4,487,202, and $805,492 of securities loaned for the
Intermediate Income Fund, the Core Stock Fund, and
the Value Index Fund, respectively .............................. $ 228,344,766 $ 168,637,026 $ 51,585,836
Investments in affiliates ......................................... 2,515,000 2,935,000 760,000
Cash held as collateral for futures contracts ..................... -- 279,000 74,250
Receivable for variation margin on futures contracts .............. -- 35,700 8,925
Receivable for investments sold ................................... 9,056 97,436 --
Receivable for capital shares sold ................................ 46,269 1,830,425 170,958
Receivable for dividends and interest ............................. 2,032,300 96,959 150,194
Receivable for tax reclaims ....................................... -- 21,170 --
Prepaid expenses .................................................. 15,672 11,102 8,459
-------------- -------------- --------------
Total Assets ...................................................... 232,963,063 173,943,818 52,758,622
-------------- -------------- --------------
Liabilities
Bank overdraft .................................................... -- 19,851 --
Distributions payable to shareholders ............................. 445,637 158,430 292,966
Payable for capital shares redeemed ............................... 2,286,892 149,636 68,210
Payable for investments purchased ................................. 561,657 -- 194,424
Payable for securities loaned ..................................... 10,556,274 4,590,687 814,709
Accrued expenses and other payables:
Investment advisory fees ........................................ 68,333 122,761 7,315
Affiliates ...................................................... 80,891 53,350 15,740
Distribution fees ............................................... 28,360 36,354 13,282
Trustee fees .................................................... 10,992 17,904 12,751
Other ........................................................... 102,787 118,416 52,789
-------------- -------------- --------------
Total Liabilities ................................................. 14,141,823 5,267,389 1,472,186
-------------- -------------- --------------
Net Assets ........................................................ $ 218,821,240 $ 168,676,429 $ 51,286,436
============== ============== ==============
Components of Net Assets
Paid-in capital ................................................... $ 226,219,521 $ 256,077,649 $ 79,822,258
Accumulated (distributions in excess of)
net investment income ........................................... (35,513) (162,699) 42,039
Accumulated net realized losses on investments
and foreign currency transactions ............................... (3,156,890) (15,366,488) (6,642,863)
Net unrealized depreciation on investments
and foreign currency transactions ............................... (4,205,878) (71,864,233) (21,933,048)
Net unrealized depreciation on futures contracts .................. -- (7,800) (1,950)
-------------- -------------- --------------
Net Assets ........................................................ $ 218,821,240 $ 168,676,429 $ 51,286,436
============== ============== ==============
67
MMA Praxis Funds
Statements of assets & liabilities, continued
December 31, 2008
Intermediate Core Value
Income Fund Stock Fund Index Fund
-------------- -------------- --------------
Pricing of Class A Shares
Net assets attributable to Class A shares ......................... $ 49,693,474 $ 55,150,975 $ 20,019,405
============== ============== ==============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ........... 5,165,932 6,271,010 3,449,231
============== ============== ==============
Net asset value and redemption price per share .................... $ 9.62 $ 8.79 $ 5.80
============== ============== ==============
Maximum sales charge .............................................. 3.75% 5.25% 5.25%
============== ============== ==============
Maximum offering price per share
[(100%/(100%-Maximum Sales Charge))
of net asset value adjusted to the nearest cent] ................ $ 9.99 $ 9.28 $ 6.12
============== ============== ==============
Pricing of Class B Shares
Net assets attributable to Class B shares ......................... $ 15,795,539 $ 22,705,845 $ 6,373,623
============== ============== ==============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ........... 1,639,973 2,708,151 1,098,705
============== ============== ==============
Net asset value, offering price and
redemption price per share (A) .................................. $ 9.63 $ 8.38 $ 5.80
============== ============== ==============
Pricing of Class I Shares
Net assets attributable to Class I shares ......................... $ 153,332,227 $ 90,819,609 $ 24,893,408
============== ============== ==============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ........... 15,952,120 10,276,983 4,310,831
============== ============== ==============
Net asset value, offering price and redemption price per share .... $ 9.61 $ 8.84 $ 5.77
============== ============== ==============
(A) Redemption price per share varies based upon holding period.
See accompanying Notes to Financial Statements.
68
MMA Praxis Funds
Statements of assets & liabilities
December 31, 2008
Growth International Small Cap
Index Fund Fund Fund
-------------- -------------- --------------
Assets
Investment securities, at cost .................................... $ 22,692,017 $ 87,132,408 $ 24,217,506
============== ============== ==============
Investment securities, at market value - including $18,154;
$4,456,284, and $227,375 of securities loaned for
the Growth Index Fund, the International Fund,
and the Small Cap Fund, respectively.. .......................... $ 15,667,296 $ 85,377,311 $ 18,148,023
Investments in affiliates ......................................... 190,000 1,305,000 200,000
Cash .............................................................. -- 2,572,271 --
Foreign currency, at value (cost $974,381) ........................ -- 1,034,406 --
Foreign currency contracts receivable ............................. -- 332,234 --
Unrealized appreciation on foreign forward
currency exchange contracts ..................................... -- 2,804,186 --
Receivable for capital shares sold ................................ 54,717 16,088 91,133
Receivable for dividends and interest ............................. 16,445 67,962 10,209
Receivable for tax reclaims ....................................... -- 330,646 --
Prepaid expenses .................................................. 9,375 8,128 8,862
-------------- -------------- --------------
Total Assets ...................................................... 15,937,833 93,848,232 18,458,227
-------------- -------------- --------------
Liabilities
Distributions payable to shareholders ............................. 15,196 -- --
Payable for capital shares redeemed ............................... 10,079 449,493 41,627
Payable for investments purchased ................................. 180,249 1,602,507 --
Payable for securities loaned ..................................... 18,275 4,592,975 228,990
Unrealized depreciation on foreign
currency exchange contracts ..................................... -- 2,038,392 --
Accrued expenses and other payables:
Investment advisory fees ........................................ 4,514 59,797 6,618
Affiliates ...................................................... 6,393 26,752 7,655
Distribution fees ............................................... 621 18,345 1,131
Trustee fees .................................................... 9,087 9,936 7,154
Other ........................................................... 20,804 176,764 9,764
-------------- -------------- --------------
Total Liabilities ................................................. 265,218 8,974,961 302,939
-------------- -------------- --------------
Net Assets ........................................................ $ 15,672,615 $ 84,873,271 $ 18,155,288
============== ============== ==============
Components of Net Assets
Paid-in capital ................................................... $ 25,368,847 $ 106,117,424 $ 28,777,353
Distributions in excess of net investment income .................. (1,019) (1,334,987) --
Accumulated net realized losses on investments
and foreign currency transactions ............................... (2,860,492) (19,459,069) (4,752,582)
Net unrealized depreciation on investments
and foreign currency transactions ............................... (6,834,721) (450,097) (5,869,483)
-------------- -------------- --------------
Net Assets ........................................................ $ 15,672,615 $ 84,873,271 $ 18,155,288
============== ============== ==============
69
MMA Praxis Funds
Statements of assets & liabilities, continued
December 31, 2008
Growth International Small Cap
Index Fund Fund Fund
-------------- -------------- --------------
Pricing of Class A Shares
Net assets attributable to Class A shares ......................... $ 2,504,074 $ 26,004,949 $ 2,307,307
============== ============== ==============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ........... 385,044 3,021,307 396,556
============== ============== ==============
Net asset value and redemption price per share .................... $ 6.50 $ 8.61 $ 5.82
============== ============== ==============
Maximum sales charge .............................................. 5.25% 5.25% 5.25%
============== ============== ==============
Maximum offering price per share
[(100%/(100%-Maximum Sales Charge))
of net asset value adjusted to the nearest cent] ................ $ 6.86 $ 9.09 $ 6.14
============== ============== ==============
Pricing of Class B Shares
Net assets attributable to Class B shares ......................... $ 780,313 $ 10,037,971 $ 455,710
============== ============== ==============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ........... 120,856 1,192,952 79,114
============== ============== ==============
Net asset value, offering price and
redemption price per share (A) .................................. $ 6.46 $ 8.41 $ 5.76
============== ============== ==============
Pricing of Class I Shares
Net assets attributable to Class I shares ......................... $ 12,388,228 $ 48,830,351 $ 15,392,271
============== ============== ==============
Shares of beneficial interest outstanding
(unlimited number of shares authorized, no par value) ........... 1,904,139 5,674,638 2,637,104
============== ============== ==============
Net asset value, offering price and redemption price per share .... $ 6.51 $ 8.61 $ 5.84
============== ============== ==============
(A) Redemption price per share varies based upon holding period.
See accompanying Notes to Financial Statements.
70
------------------------
Statements of operations
------------------------
MMA Praxis Funds
Statements of operations
For the year ended December 31, 2008
Intermediate Core Value
Income Fund Stock Fund Index Fund
-------------- -------------- --------------
Investment Income
Dividends ......................................................... $ 114,380 $ 3,961,407 $ 2,040,704
Foreign tax withholding ........................................... -- (38,363) (165)
Interest .......................................................... 13,636,087 141,700 6,845
Income from securities lending .................................... 17,771 18,972 2,165
Interest from affiliates .......................................... 67,552 91,365 18,240
-------------- -------------- --------------
Total Investment Income ........................................... 13,835,790 4,175,081 2,067,789
-------------- -------------- --------------
Expenses
Investment advisory fees .......................................... 1,032,962 1,789,116 186,481
Administration fees ............................................... 361,554 338,574 86,970
Distribution fees - Class A ....................................... 125,169 201,848 62,810
Distribution fees - Class B ....................................... 136,384 281,744 70,826
Shareholder servicing fees - Class A .............................. 125,169 201,848 62,810
Shareholder servicing fees - Class B .............................. 45,461 93,915 23,609
Transfer agent fees - Class A ..................................... 11,099 28,585 10,797
Transfer agent fees - Class B ..................................... 8,735 18,811 5,460
Transfer agent fees - Class I ..................................... 41 36 29
Registration fees - Class A ....................................... 4,986 9,890 10,358
Registration fees - Class B ....................................... 3,447 5,880 7,033
Registration fees - Class I ....................................... -- 7,424 5,140
Shareholder report printing fees - Class A ........................ 16,065 12,652 16,335
Shareholder report printing fees - Class B ........................ 10,040 10,340 8,502
Shareholder report printing fees - Class I ........................ 722 685 215
Professional fees ................................................. 123,401 82,098 26,882
Custodian fees .................................................... 22,850 36,854 5,572
Trustees' fees and expenses ....................................... 13,383 22,186 19,609
Other expenses .................................................... 97,747 145,098 62,089
-------------- -------------- --------------
Total Expenses Before Reductions/Reimbursements ................... 2,139,215 3,287,584 671,527
Expenses waived by Investment Adviser ............................. (99,191) -- (24,950)
Expenses reduced by Distributor ................................... (170,630) (239,413) (81,696)
-------------- -------------- --------------
Net Expenses ...................................................... 1,869,394 3,048,171 564,881
-------------- -------------- --------------
Net Investment Income ............................................. 11,966,396 1,126,910 1,502,908
============== ============== ==============
Realized and Unrealized Losses on Investments
Net realized losses on investments and
foreign currency transactions ................................... (74,690) (16,900,843) (6,003,619)
Change in unrealized appreciation/depreciation of investments
and foreign currency translations during the year ............... (5,115,135) (100,862,672) (26,222,764)
Change in unrealized appreciation/depreciation
of futures contracts during the year ............................ -- (4,637) (1,375)
-------------- -------------- --------------
Net Realized and Unrealized Losses on Investments
and Foreign Currency Transactions ............................... (5,189,825) (117,768,152) (32,227,758)
-------------- -------------- --------------
Net Change in Net Assets from Operations .......................... $ 6,776,571 $ (116,641,242) $ (30,724,850)
============== ============== ==============
See accompanying Notes to Financial Statements.
71
MMA Praxis Funds
Statements of operations
For the year ended December 31, 2008
Growth International Small Cap
Index Fund Fund Fund
-------------- -------------- --------------
Investment Income
Dividends ......................................................... $ 252,314 $ 4,139,052 $ 138,241
Foreign tax withholding ........................................... -- (599,869) --
Interest .......................................................... 1,762 9,000 42,519
Income from securities lending .................................... 110 33,397 2,464
Interest from affiliates .......................................... 5,400 40,684 4,288
-------------- -------------- --------------
Total Investment Income ........................................... 259,586 3,622,264 187,512
-------------- -------------- --------------
Expenses
Investment advisory fees .......................................... 70,738 1,123,205 170,434
Administration fees ............................................... 33,011 174,832 28,071
Distribution fees - Class A ....................................... 7,424 98,564 5,528
Distribution fees - Class B ....................................... 6,686 119,255 3,728
Shareholder servicing fees - Class A .............................. 7,424 98,564 5,528
Shareholder servicing fees - Class B .............................. 2,229 39,752 1,243
Transfer agent fees - Class A ..................................... 2,112 15,263 1,867
Transfer agent fees - Class B ..................................... 1,064 10,672 799
Transfer agent fees - Class I ..................................... 22 33 17
Registration fees - Class A ....................................... 7,379 8,848 6,955
Registration fees - Class B ....................................... 3,068 6,751 2,845
Registration fees - Class I ....................................... 9,758 8,444 7,572
Shareholder report printing fees - Class A ........................ 2,486 17,493 2,531
Shareholder report printing fees - Class B ........................ 1,296 13,255 1,394
Shareholder report printing fees - Class I ........................ 883 559 1,274
Trustees' fees and expenses ....................................... 16,062 18,699 22,062
DDA fees .......................................................... 12,833 -- --
Professional fees ................................................. 9,522 66,831 3,405
Custodian fees .................................................... 1,567 115,831 1,204
Other expenses .................................................... 12,086 133,804 19,222
-------------- -------------- --------------
Total Expenses Before Reductions/Reimbursements ................... 207,650 2,070,655 285,679
Expenses waived by Investment Adviser ............................. (31,734) (4,106) (26,019)
Expenses reduced by Distributor ................................... (9,140) (114,464) (6,025)
-------------- -------------- --------------
Net Expenses ...................................................... 166,776 1,952,085 253,635
-------------- -------------- --------------
Net Investment Income (Loss) ...................................... 92,810 1,670,179 (66,123)
============== ============== ==============
Realized and Unrealized Losses on Investments
Net realized losses on investments
and foreign currency transactions ............................... (4,027,027) (18,859,217) (4,597,930)
Change in unrealized appreciation/depreciation of investments
and foreign currency translations during the year ............... (6,294,703) (45,291,217) (5,021,850)
-------------- -------------- --------------
Net Realized and Unrealized Losses on Investments
and Foreign Currency Transactions ............................... (10,321,730) (64,150,434) (9,619,780)
-------------- -------------- --------------
Net Change in Net Assets from Operations .......................... $ (10,228,920) $ (62,480,255) $ (9,685,903)
============== ============== ==============
See accompanying Notes to Financial Statements.
72
MMA Praxis Intermediate Income Fund
Statements of changes in net assets
Intermediate Income Fund Core Stock Fund Value Index Fund
----------------------------- ----------------------------- -----------------------------
For the Year For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended Ended
December 31, December 31, December 31, December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
================================================================================================================================
From Operations
Net investment income ........... $ 11,966,396 $ 12,075,717 $ 1,126,910 $ 2,957,466 $ 1,502,908 $ 1,359,824
Net realized gains (losses)
from security transactions .... (74,690) 991,254 (16,900,843) 8,003,375 (6,003,619) 2,801,020
Net change in unrealized
appreciation/depreciation
on investments, foreign
currency translations and
futures contracts ............. (5,115,135) 3,344,111 (100,867,309) (12,163,023) (26,224,139) (9,511,281)
------------- ------------- ------------- ------------- ------------- -------------
Net Change in Net Assets
from Operations ............... 6,776,571 16,411,082 (116,641,242) (1,202,182) (30,724,850) (5,350,437)
------------- ------------- ------------- ------------- ------------- -------------
Distributions to
Shareholders
From net investment
income - Class A .............. (2,337,563) (2,027,920) (308,208) (952,650) (578,462) (540,297)
From net investment
income - Class B .............. (767,959) (925,859) -- (150,524) (139,543) (167,052)
From net investment
income - Class I .............. (9,293,736) (9,899,152) (745,527) (2,008,694) (749,372) (657,805)
From net realized gains
on investments - Class A ...... -- -- -- (1,852,090) (351,774) (943,723)
From net realized gains
on investments - Class B ...... -- -- -- (1,024,191) (112,426) (415,980)
From net realized gains
on investments - Class I ...... -- -- -- (2,916,972) (444,637) (999,025)
------------- ------------- ------------- ------------- ------------- -------------
Decrease in Net Assets from
Distributions to
Shareholders .................. (12,399,258) (12,852,931) (1,053,735) (8,905,121) (2,376,214) (3,723,882)
------------- ------------- ------------- ------------- ------------- -------------
Change in Net Assets
from Capital Transactions ..... (57,912,102) 5,400,455 (25,935,164) (20,308,484) 13,880,779 16,286,095
------------- ------------- ------------- ------------- ------------- -------------
Total Increase (Decrease)
in Net Assets ................. (63,534,789) 8,958,606 (143,630,141) (30,415,787) (19,220,285) 7,211,776
Net Assets
Beginning of year ............. 282,356,029 273,397,423 312,306,570 342,722,357 70,506,721 63,294,945
------------- ------------- ------------- ------------- ------------- -------------
End of year ................... $ 218,821,240 $ 282,356,029 $ 168,676,429 $ 312,306,570 $ 51,286,436 $ 70,506,721
============= ============= ============= ============= ============= =============
Accumulated (Distributions
in Excess of) Net
Investment Income ............. $ (35,513) $ (152) $ (162,699) $ (309,513) $ 42,039 $ 8,584
============= ============= ============= ============= ============= =============
See accompanying Notes to Financial Statements.
73
MMA Praxis Funds
Statements of changes in net assets
Growth Index Fund International Fund Small Cap Fund
----------------------------- ----------------------------- -----------------------------
For the Year For the Period For the Year For the Year For the Year For the Period
Ended Ended Ended Ended Ended Ended
December 31, December 31, December 31, December 31, December 31, December 31,
2008 2007(a) 2008 2007 2008 2007(a)
===================================================================================================================================
From Operations
Net investment income .............. $ 92,810 $ 12,216 $ 1,670,179 $ 1,617,970 $ (66,123) $ 13,709
Net realized gains (losses)
from security transactions ....... (4,027,027) (37,356) (18,859,217) 15,823,897 (4,597,930) (157,791)
Net change in unrealized
appreciation/depreciation
on investments ................... (6,294,703) (540,018) (45,291,217) 3,764,696 (5,021,850) (847,633)
------------- ------------- ------------- ------------- ------------- -------------
Net Change in Net Assets
from Operations .................. (10,228,920) (565,158) (62,480,255) 21,206,563 (9,685,903) (991,715)
------------- ------------- ------------- ------------- ------------- -------------
Distributions to
Shareholders
From net investment
income - Class A ................. (6,308) -- (460,064) (674,131) -- --
From net investment
income - Class B ................. (840) -- (127,793) (172,308) -- --
From net investment
income - Class I ................. (85,390) (11,747) (851,080) (1,919,613) -- (14,506)
From net realized gains
on investments - Class A ......... -- (571) (1,071,269) (1,204,979) -- --
From net realized gains
on investments - Class B ......... -- (159) (416,502) (540,811) -- --
From net realized gains
on investments - Class I ......... -- (6,286) (1,999,000) (2,732,636) -- --
From return of capital - Class A ... -- -- (67,747) -- -- --
From return of capital - Class B ... -- -- (18,818) -- -- --
From return of capital - Class I ... -- -- (125,327) -- -- --
------------- ------------- ------------- ------------- ------------- -------------
Decrease in Net Assets from
Distributions to
Shareholders ..................... (92,538) (18,763) (5,137,600) (7,244,478) -- (14,506)
------------- ------------- ------------- ------------- ------------- -------------
Change in Net Assets
from Capital Transactions ........ (1,057,862) 27,635,856 (30,585,816) 1,493,703 10,667,638 18,179,774
------------- ------------- ------------- ------------- ------------- -------------
Total Increase (Decrease)
in Net Assets .................... (11,379,320) 27,051,935 (98,203,671) 15,455,788 981,735 17,173,553
Net Assets
Beginning of period ................ 27,051,935 -- 183,076,942 167,621,154 17,173,553 --
------------- ------------- ------------- ------------- ------------- -------------
End of period ...................... $ 15,672,615 $ 27,051,935 $ 84,873,271 $ 183,076,942 $ 18,155,288 $ 17,173,553
============= ============= ============= ============= ============= =============
Accumulated (Distributions in
Excess of) Net Investment
Income ........................... $ (1,019) $ 449 $ (1,334,988) $ (1,727,083) $ -- $ --
============= ============= ============= ============= ============= =============
(a) For the period May 1, 2007 (commencement of operations) through December
31, 2007.
See accompanying Notes to Financial Statements.
74
--------------------
Financial highlights
--------------------
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the year indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
MMA Praxis Intermediate Income Fund - Class A 2008 2007 2006 2005 2004
====================================================================================================================================
Net asset value at beginning of year .................... $ 9.78 $ 9.66 $ 9.73 $ 9.95 $ 9.99
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................................. 0.45 0.41 0.38 0.37 0.39
Net realized and unrealized gains
(losses) on investments ............................. (0.16) 0.15 (0.04) (0.19) (0.02)
----------- ----------- ----------- ----------- -----------
Total from investment operations ........................ 0.29 0.56 0.34 0.18 0.37
----------- ----------- ----------- ----------- -----------
Less Distributions:
Dividends from net investment income .................. (0.45) (0.44) (0.41) (0.40) (0.41)
----------- ----------- ----------- ----------- -----------
Paid-in capital from redemption fees (a) ................ -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value at end of year .......................... $ 9.62 $ 9.78 $ 9.66 $ 9.73 $ 9.95
=========== =========== =========== =========== ===========
Total return (excludes sales charge) .................... 3.09% 5.91% 3.63% 1.82% 3.77%
=========== =========== =========== =========== ===========
Net assets at end of year (000s) ........................ $ 49,693 $ 48,951 $ 41,350 $ 239,583 $ 231,369
=========== =========== =========== =========== ===========
Ratio of net expenses to average net assets ............. 0.88% 0.88% 0.93% 0.94% 0.91%
Ratio of net investment income to average net assets .... 4.49% 4.23% 4.19% 3.77% 3.69%
Ratio of expenses to average net assets* ................ 1.21% 1.27% 1.28% 1.23% 1.33%
Portfolio turnover rate (b) ............................. 25.46% 29.22% 34.19% 37.79% 30.29%
- ------------------------------------------------------------------------------------------------------------------------------------
MMA Praxis Intermediate Income Fund - Class B
====================================================================================================================================
Net asset value at beginning of year .................... $ 9.79 $ 9.66 $ 9.73 $ 9.94 $ 9.98
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................................. 0.42 0.38 0.37 0.33 0.33
Net realized and unrealized gains
(losses) on investments ............................. (0.17) 0.14 (0.08) (0.20) (0.01)
----------- ----------- ----------- ----------- -----------
Total from investment operations ........................ 0.25 0.52 0.29 0.13 0.32
----------- ----------- ----------- ----------- -----------
Less Distributions:
Dividends from net investment income .................. (0.41) (0.39) (0.36) (0.34) (0.36)
----------- ----------- ----------- ----------- -----------
Paid-in capital from redemption fees (a) ................ -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value at end of year .......................... $ 9.63 $ 9.79 $ 9.66 $ 9.73 $ 9.94
=========== =========== =========== =========== ===========
Total return (excludes sales charge) .................... 2.63% 5.50% 3.10% 1.34% 3.30%
=========== =========== =========== =========== ===========
Net assets at end of year (000s) ........................ $ 15,796 $ 21,308 $ 25,827 $ 34,927 $ 39,506
=========== =========== =========== =========== ===========
Ratio of net expenses to average net assets ............. 1.32% 1.33% 1.36% 1.39% 1.38%
Ratio of net investment income to average net assets .... 4.04% 3.78% 3.77% 3.31% 3.31%
Ratio of expenses to average net assets* ................ 1.77% 1.77% 1.77% 1.79% 1.91%
Portfolio turnover rate (b) ............................. 25.46% 29.22% 34.19% 37.79% 30.29%
- ------------------------------------------------------------------------------------------------------------------------------------
* During the year, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such expense reductions had not occurred,
the ratios would have been as indicated.
(a) Amount rounds to less than $0.005 per share.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
75
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
MMA Praxis Intermediate Income Fund - Class I 2008 2007 2006 (a)
==================================================================================================================
Net asset value at beginning of period ......................... $ 9.77 $ 9.65 $ 9.47
----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ........................................ 0.47 0.43 0.29
Net realized and unrealized gains (losses) on investments .... (0.16) 0.15 0.18
----------- ----------- -----------
Total from investment operations ............................... 0.31 0.58 0.47
----------- ----------- -----------
Less Distributions:
Dividends from net investment income ......................... (0.47) (0.46) (0.29)
----------- ----------- -----------
Paid-in capital from redemption fees ........................... --(b) -- -- (b)
----------- ----------- -----------
Net asset value at end of period ............................... $ 9.61 $ 9.77 $ 9.65
=========== =========== ===========
Total return (excludes sales charge) ........................... 3.33% 6.18% 5.07%(c)
=========== =========== ===========
Net assets at end of period (000s) ............................. $ 153,332 $ 212,097 $ 206,221
=========== =========== ===========
Ratio of net expenses to average net assets .................... 0.63% 0.63% 0.63%(d)
Ratio of net investment income to average net assets ........... 4.73% 4.48% 4.47%(d)
Ratio of expenses to average net assets* ....................... 0.64% 0.77% 0.76%(d)
Portfolio turnover rate (e) .................................... 25.46% 29.22% 34.19%
- ------------------------------------------------------------------------------------------------------------------
* During the period, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such activity had not occurred, the ratios
would have been as indicated.
(a) For the period from May 1, 2006 (commencement of operations) through
December 31, 2006.
(b) Amount rounds to less than $0.005 per share.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
76
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the year indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
MMA Praxis Core Stock Fund - Class A 2008 2007 2006 2005 2004
====================================================================================================================================
Net asset value at beginning of year .................... $ 14.87 $ 15.40 $ 14.42 $ 13.99 $ 13.06
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................................. 0.05 0.13 0.04 0.07 0.08
Net realized and unrealized gains
(losses) on investments ............................. (6.08) (0.24) 1.70 0.42 0.92
----------- ----------- ----------- ----------- -----------
Total from investment operations ........................ (6.03) (0.11) 1.74 0.49 1.00
----------- ----------- ----------- ----------- -----------
Less Distributions:
Dividends from net investment income .................. (0.05) (0.14) -- (0.06) (0.07)
Distributions from net realized gains ................. -- (0.28) (0.76) -- --
----------- ----------- ----------- ----------- -----------
Total distributions ..................................... (0.05) (0.42) (0.76) (0.06) (0.07)
----------- ----------- ----------- ----------- -----------
Paid-in capital from redemption fees (a) ................ -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value at end of year .......................... $ 8.79 $ 14.87 $ 15.40 $ 14.42 $ 13.99
=========== =========== =========== =========== ===========
Total return (excludes sales charge) .................... (40.64%) (0.68%) 12.10% 3.52% 7.65%
=========== =========== =========== =========== ===========
Net assets at end of year (000s) ........................ $ 55,151 $ 99,838 $ 95,185 $ 208,640 $ 202,474
=========== =========== =========== =========== ===========
Ratio of net expenses to average net assets ............. 1.31% 1.45% 1.49% 1.34% 1.33%
Ratio of net investment income to average net assets .... 0.42% 0.81% 0.19% 0.50% 1.04%
Ratio of expenses to average net assets* ................ 1.56% 1.70% 1.74% 1.60% 1.65%
Portfolio turnover rate (b) ............................. 29.73% 12.17% 72.41% 32.66% 9.99%
- ------------------------------------------------------------------------------------------------------------------------------------
MMA Praxis Core Stock Fund - Class B
====================================================================================================================================
Net asset value at beginning of year .................... $ 14.22 $ 14.74 $ 13.92 $ 13.53 $ 12.67
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income (loss) .......................... (0.07) (0.01) (0.09) (0.02) 0.01
Net realized and unrealized gains
(losses) on investments ............................. (5.77) (0.19) 1.67 0.41 0.87
----------- ----------- ----------- ----------- -----------
Total from investment operations ........................ (5.84) (0.20) 1.58 0.39 0.88
----------- ----------- ----------- ----------- -----------
Less Distributions:
Dividends from net investment income .................. -- (0.04) -- -- (0.02)
Distributions from net realized gains ................. -- (0.28) (0.76) -- --
----------- ----------- ----------- ----------- -----------
Total distributions ..................................... -- (0.32) (0.76) -- (0.02)
----------- ----------- ----------- ----------- -----------
Paid-in capital from redemption fees (a) ................ -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value at end of year .......................... $ 8.38 $ 14.22 $ 14.74 $ 13.92 $ 13.53
=========== =========== =========== =========== ===========
Total return (excludes sales charge) .................... (41.07%) (1.32%) 11.38% 2.88% 6.96%
=========== =========== =========== =========== ===========
Net assets at end of year (000s) ........................ $ 22,706 $ 52,732 $ 73,973 $ 103,815 $ 121,817
=========== =========== =========== =========== ===========
Ratio of net expenses to average net assets ............. 1.99% 2.10% 2.13% 1.99% 1.98%
Ratio of net investment income (loss)
to average net assets ................................. (0.26%) 0.12% (0.52%) (0.14%) 0.50%
Ratio of expenses to average net assets* ................ 2.09% 2.20% 2.23% 2.09% 2.22%
Portfolio turnover rate (b) ............................. 29.73% 12.17% 72.41% 32.66% 9.99%
- ------------------------------------------------------------------------------------------------------------------------------------
* During the year, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such expense reductions had not occurred,
the ratios would have been as indicated.
(a) Amount rounds to less than $0.005 per share.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
77
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
MMA Praxis Core Stock Fund - Class I 2008 2007 2006 (a)
==================================================================================================================
Net asset value at beginning of period ......................... $ 14.94 $ 15.45 $ 14.76
----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ........................................ 0.09 0.20 0.04
Net realized and unrealized gains (losses) on investments .... (6.11) (0.24) 1.41
----------- ----------- -----------
Total from investment operations ............................... (6.02) (0.04) 1.45
----------- ----------- -----------
Less Distributions:
Dividends from net investment income ......................... (0.08) (0.19) --
Distributions from net realized gains ........................ -- (0.28) (0.76)
----------- ----------- -----------
Total distributions ............................................ (0.08) (0.47) (0.76)
----------- ----------- -----------
Paid-in capital from redemption fees ........................... --(b) -- --
----------- ----------- -----------
Net asset value at end of period ............................... $ 8.84 $ 14.94 $ 15.45
=========== =========== ===========
Total return (excludes sales charge) ........................... (40.43%) (0.26%) 9.86%(c)
=========== =========== ===========
Net assets at end of period (000s) ............................. $ 90,820 $ 159,737 $ 173,565
=========== =========== ===========
Ratio of net expenses to average net assets .................... 1.01% 1.05% 1.02%(d)
Ratio of net investment income to average net assets ........... 0.72% 1.20% 0.43%(d)
Ratio of expenses to average net assets* ....................... 1.01% 1.05% 1.03%(d)
Portfolio turnover rate (e) .................................... 29.73% 12.17% 72.41%
- ------------------------------------------------------------------------------------------------------------------
* During the period, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such activity had not occurred, the ratios
would have been as indicated.
(a) For the period from May 1, 2006 (commencement of operations) through
December 31, 2006.
(b) Amount rounds to less than $0.005 per share.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
78
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the year indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
MMA Praxis Value Index Fund - Class A 2008 2007 2006 2005 2004
====================================================================================================================================
Net asset value at beginning of year .................... $ 10.12 $ 11.43 $ 10.09 $ 9.65 $ 8.65
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................................. 0.18 0.17 0.22 0.15 0.12
Net realized and unrealized gains
(losses) on investments ............................. (4.21) (0.93) 1.82 0.44 1.00
----------- ----------- ----------- ----------- -----------
Total from investment operations ........................ (4.03) (0.76) 2.04 0.59 1.12
----------- ----------- ----------- ----------- -----------
Less Distributions:
Dividends from net investment income .................. (0.18) (0.20) (0.13) (0.15) (0.12)
Distributions from net realized gains ................. (0.11) (0.35) (0.57) -- --
----------- ----------- ----------- ----------- -----------
Total distributions ..................................... (0.29) (0.55) (0.70) (0.15) (0.12)
----------- ----------- ----------- ----------- -----------
Paid-in capital from redemption fees (a) ................ -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value at end of year .......................... $ 5.80 $ 10.12 $ 11.43 $ 10.09 $ 9.65
=========== =========== =========== =========== ===========
Total return (excludes sales charge) .................... (40.15%) (6.66%) 20.41% 6.12% 13.07%
=========== =========== =========== =========== ===========
Net assets at end of year (000s) ........................ $ 20,019 $ 28,209 $ 22,426 $ 39,874 $ 33,640
=========== =========== =========== =========== ===========
Ratio of net expenses to average net assets ............. 0.97% 0.90% 1.11% 1.04% 1.04%
Ratio of net investment income to average net assets .... 2.35% 1.87% 1.52% 1.55% 1.45%
Ratio of expenses to average net assets* ................ 1.27% 1.18% 1.37% 1.30% 1.48%
Portfolio turnover rate (b) ............................. 20.66% 33.34% 55.37% 25.25% 24.76%
- ------------------------------------------------------------------------------------------------------------------------------------
MMA Praxis Value Index Fund - Class B
====================================================================================================================================
Net asset value at beginning of year .................... $ 10.11 $ 11.41 $ 10.07 $ 9.62 $ 8.64
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................................. 0.15 0.15 0.10 0.09 0.08
Net realized and unrealized gains
(losses) on investments ............................. (4.22) (0.96) 1.88 0.45 0.98
----------- ----------- ----------- ----------- -----------
Total from investment operations ........................ (4.07) (0.81) 1.98 0.54 1.06
----------- ----------- ----------- ----------- -----------
Less Distributions:
Dividends from net investment income .................. (0.13) (0.14) (0.07) (0.09) (0.08)
Distributions from net realized gains ................. (0.11) (0.35) (0.57) -- --
----------- ----------- ----------- ----------- -----------
Total distributions ..................................... (0.24) (0.49) (0.64) (0.09) (0.08)
----------- ----------- ----------- ----------- -----------
Paid-in capital from redemption fees .................... --(a) --(a) --(a) -- --
----------- ----------- ----------- ----------- -----------
Net asset value at end of year .......................... $ 5.80 $ 10.11 $ 11.41 $ 10.07 $ 9.62
=========== =========== =========== =========== ===========
Total return (excludes sales charge) .................... (40.50%) (7.13%) 19.85% 5.61% 12.31%
=========== =========== =========== =========== ===========
Net assets at end of year (000s) ........................ $ 6,374 $ 12,455 $ 13,840 $ 11,804 $ 9,155
=========== =========== =========== =========== ===========
Ratio of net expenses to average net assets ............. 1.52% 1.47% 1.67% 1.59% 1.60%
Ratio of net investment income to average net assets .... 1.76% 1.29% 0.93% 1.00% 0.91%
Ratio of expenses to average net assets* ................ 1.84% 1.69% 1.89% 1.78% 1.99%
Portfolio turnover rate (b) ............................. 20.66% 33.34% 55.37% 25.25% 24.76%
- ------------------------------------------------------------------------------------------------------------------------------------
* During the year, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such expense reductions had not occurred,
the ratios would have been as indicated.
(a) Amount rounds to less than $0.005 per share.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
79
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
MMA Praxis Value Index Fund - Class I 2008 2007 2006 (a)
==================================================================================================================
Net asset value at beginning of period ......................... $ 10.07 $ 11.38 $ 10.90
----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ........................................ 0.20 0.24 0.12
Net realized and unrealized gains (losses) on investments .... (4.19) (0.97) 1.13
----------- ----------- -----------
Total from investment operations ............................... (3.99) (0.73) 1.25
----------- ----------- -----------
Less Distributions:
Dividends from net investment income ......................... (0.20) (0.23) (0.20)
Distributions from net realized gains ........................ (0.11) (0.35) (0.57)
----------- ----------- -----------
Total distributions ............................................ (0.31) (0.58) (0.77)
----------- ----------- -----------
Net asset value at end of period ............................... $ 5.77 $ 10.07 $ 11.38
=========== =========== ===========
Total return (excludes sales charge) ........................... (39.94%) (6.46%) 11.67%(b)
=========== =========== ===========
Net assets at end of period (000s) ............................. $ 24,893 $ 29,843 $ 27,029
=========== =========== ===========
Ratio of net expenses to average net assets .................... 0.64% 0.65% 0.89%(c)
Ratio of net investment income to average net assets ........... 2.71% 2.12% 1.69%(c)
Ratio of expenses to average net assets* ....................... 0.64% 0.68% 0.95%(c)
Portfolio turnover rate (d) .................................... 20.66% 33.34% 55.37%
- ------------------------------------------------------------------------------------------------------------------
* During the period, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such activity had not occurred, the ratios
would have been as indicated.
(a) For the period from May 1, 2006 (commencement of operations) through
December 31, 2006.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
80
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the period indicated.
Year Ended Period Ended
December 31, December 31,
MMA Praxis Growth Index Fund - Class A 2008 2007 (a)
====================================================================================================
Net asset value at beginning of period ......................... $ 10.40 $ 10.00
------------ ------------
Income (loss) from investment operations:
Net investment income ........................................ 0.01 0.02
Net realized and unrealized gains (losses) on investments .... (3.89) 0.38
------------ ------------
Total from investment operations ............................... (3.88) 0.40
------------ ------------
Less Distributions:
Dividends from net investment income ......................... (0.02) --
Distributions from net realized gains ........................ -- --(b)
------------ ------------
Total distributions ............................................ (0.02) --
------------ ------------
Paid-in capital from redemption fees (b) ....................... -- --
------------ ------------
Net asset value at end of period ............................... $ 6.50 $ 10.40
============ ============
Total return (excludes sales charge) ........................... (37.34%) 4.03%(c)
============ ============
Net assets at end of period (000s) ............................. $ 2,504 $ 2,232
============ ============
Ratio of net expenses to average net assets .................... 0.94% 1.16%(d)
Ratio of net investment income to average net assets ........... 0.19% 0.68%(d)
Ratio of expenses to average net assets* ....................... 1.51% 3.65%(d)
Portfolio turnover rate (e) .................................... 28.40% 36.64%(d)
- ----------------------------------------------------------------------------------------------------
MMA Praxis Growth Index Fund - Class B
====================================================================================================
Net asset value at beginning of period ......................... $ 10.36 $ 10.00
------------ ------------
Income (loss) from investment operations:
Net investment income (loss) ................................. (0.02) --(b)
Net realized and unrealized gains (losses) on investments .... (3.87) 0.36
------------ ------------
Total from investment operations ............................... (3.89) 0.36
------------ ------------
Less Distributions:
Distributions from net investment income ..................... (0.01) --
Distributions from net realized gains ........................ -- --(b)
------------ ------------
Total distributions ............................................ (0.01) --
------------ ------------
Paid-in capital from redemption fees (b) ....................... -- --
------------ ------------
Net asset value at end of period ............................... $ 6.46 $ 10.36
============ ============
Total return (excludes sales charge) ........................... (37.58%) 3.63%(c)
============ ============
Net assets at end of period (000s) ............................. $ 780 $ 617
============ ============
Ratio of net expenses to average net assets .................... 1.34% 1.71%(d)
Ratio of net investment income (loss) to average net assets .... (0.21%) 0.12%(d)
Ratio of expenses to average net assets* ....................... 2.20% 4.14%(d)
Portfolio turnover rate (e) .................................... 28.40% 36.64%(d)
- ----------------------------------------------------------------------------------------------------
* During the period, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such activity had not occurred, the ratios
would have been as indicated.
(a) For the period May 1, 2007 (commencement of operations) through December
31, 2007.
(b) Amount rounds to less than $0.005 per share.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
81
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the period indicated.
Year Ended Period Ended
December 31, December 31,
MMA Praxis Growth Index Fund - Class I 2008 2007 (a)
====================================================================================================
Net asset value at beginning of period ......................... $ 10.41 $ 10.00
------------ ------------
Income (loss) from investment operations:
Net investment income ........................................ 0.04 -- (b)
Net realized and unrealized gains (losses) on investments .... (3.90) 0.42
------------ ------------
Total from investment operations ............................... (3.86) 0.42
------------ ------------
Less Distributions:
Dividends from net investment income ......................... (0.04) (0.01)
Distributions from net realized gains ........................ -- -- (b)
------------ ------------
Total distributions ............................................ (0.04) (0.01)
------------ ------------
Net asset value at end of period ............................... $ 6.51 $ 10.41
============ ============
Total return (excludes sales charge) ........................... (37.09%) 4.18%(c)
============ ============
Net assets at end of period (000s) ............................. $ 12,388 $ 24,203
============ ============
Ratio of net expenses to average net assets .................... 0.65% 0.82%(d)
Ratio of net investment income to average net assets ........... 0.45% 0.34%(d)
Ratio of expenses to average net assets* ....................... 0.73% 2.41%(d)
Portfolio turnover rate (e) .................................... 28.40% 36.64%(d)
- ----------------------------------------------------------------------------------------------------
* During the period, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such activity had not occurred, the ratios
would have been as indicated.
(a) For the period May 1, 2007 (commencement of operations) through December
31, 2007.
(b) Amount rounds to less than $0.005 per share.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
82
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the year indicated.
Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
MMA Praxis International Fund - Class A 2008 2007 2006 2005 2004
===================================================================================================================================
Net asset value at beginning of year ................... $ 15.42 $ 14.23 $ 11.94 $ 10.78 $ 9.43
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ................................ 0.16 0.12 0.16 0.08 0.01
Net realized and unrealized gains
(losses) on investments ............................ (6.44) 1.65 2.26 1.22 1.37
----------- ----------- ----------- ----------- -----------
Total from investment operations ....................... (6.28) 1.77 2.42 1.30 1.38
----------- ----------- ----------- ----------- -----------
Less Distributions:
Dividends from net investment income ................. (0.15) (0.21) (0.13) (0.14) (0.03)
Distributions from net realized gains ................ (0.36) (0.37) -- -- --
Tax return of capital ................................ (0.02) -- -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions. ................................... (0.53) (0.58) (0.13) (0.14) (0.03)
----------- ----------- ----------- ----------- -----------
Paid-in capital from redemption fees (a) ............... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value at end of year ......................... $ 8.61 $ 15.42 $ 14.23 $ 11.94 $ 10.78
=========== =========== =========== =========== ===========
Total return (excludes sales charge) ................... (41.01%) 12.59% 20.31% 12.16% 14.68%
=========== =========== =========== =========== ===========
Net assets at end of year (000s) ....................... $ 26,005 $ 50,709 $ 44,837 $ 121,173 $ 115,687
=========== =========== =========== =========== ===========
Ratio of net expenses to average net assets ............ 1.67% 1.72% 1.76% 1.58% 1.63%
Ratio of net investment income to average net assets ... 1.40% 0.75% 0.85% 0.74% 0.16%
Ratio of expenses to average net assets* ............... 1.92% 1.97% 2.09% 1.90% 2.01%
Portfolio turnover rate (b) ............................ 148.65% 59.13% 82.77% 71.93% 81.85%
- -----------------------------------------------------------------------------------------------------------------------------------
MMA Praxis International Fund - Class B
===================================================================================================================================
Net asset value at beginning of year ................... $ 15.15 $ 13.99 $ 11.77 $ 10.62 $ 9.32
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment loss .................................. (0.04) (0.06) (0.06) (0.01) (0.05)
Net realized and unrealized gains
(losses) on investments ............................ (6.23) 1.70 2.34 1.22 1.35
----------- ----------- ----------- ----------- -----------
Total from investment operations ....................... (6.27) 1.64 2.28 1.21 1.30
----------- ----------- ----------- ----------- -----------
Less Distributions:
Dividends from net investment income ................. (0.10) (0.11) (0.06) (0.06) --(a)
Distributions from net realized gains ................ (0.36) (0.37) -- -- --
Tax return of capital ................................ (0.01) -- -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions. ................................... (0.47) (0.48) (0.06) (0.06) --
----------- ----------- ----------- ----------- -----------
Paid-in capital from redemption fees (a) ............... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value at end of year ......................... $ 8.41 $ 15.15 $ 13.99 $ 11.77 $ 10.62
=========== =========== =========== =========== ===========
Total return (excludes sales charge) ................... (41.53%) 11.86% 19.45% 11.50% 13.95%
=========== =========== =========== =========== ===========
Net assets at end of year (000s) ....................... $ 10,038 $ 22,367 $ 24,186 $ 25,381 $ 24,094
=========== =========== =========== =========== ===========
Ratio of net expenses to average net assets ............ 2.38% 2.37% 2.41% 2.23% 2.28%
Ratio of net investment income (loss)
to average net assets ................................ 0.62% 0.11% 0.17% 0.10% (0.49%)
Ratio of expenses to average net assets* ............... 2.51% 2.46% 2.57% 2.39% 2.51%
Portfolio turnover rate (b) ............................ 148.65% 59.13% 82.77% 71.93% 81.85%
- ------------------------------------------------------------------------------------------------------------------------------------
* During the year, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such expense reductions had not occurred,
the ratios would have been as indicated.
(a) Amount rounds to less than $0.005 per share.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
83
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the period indicated.
Year Ended Year Ended Period Ended
December 31, December 31, December 31,
MMA Praxis International Fund - Class I 2008 2007 2006 (a)
==================================================================================================================
Net asset value at beginning of period ......................... $ 15.39 $ 14.20 $ 13.52
----------- ----------- -----------
Income (loss) from investment operations:
Net investment income ........................................ 0.15 0.17 0.10
Net realized and unrealized gains (losses) on investments .... (6.38) 1.65 0.78
----------- ----------- -----------
Total from investment operations ............................... (6.23) 1.82 0.88
----------- ----------- -----------
Less Distributions:
Dividends from net investment income ......................... (0.17) (0.26) (0.20)
Distributions from net realized gains ........................ (0.36) (0.37) --
Tax return of capital ........................................ (0.02) -- --
----------- ----------- -----------
Total distributions ............................................ (0.55) (0.63) (0.20)
----------- ----------- -----------
Net asset value at end of period ............................... $ 8.61 $ 15.39 $ 14.20
=========== =========== ===========
Total return (excludes sales charge) ........................... (40.85%) 13.02% 6.61%(b)
=========== =========== ===========
Net assets at end of period (000s) ............................. $ 48,830 $ 110,001 $ 98,598
=========== =========== ===========
Ratio of net expenses to average net assets .................... 1.32% 1.31% 1.28%(c)
Ratio of net investment income to average net assets ........... 1.47% 1.13% 1.23%(c)
Ratio of expenses to average net assets* ....................... 1.32% 1.31% 1.39%(c)
Portfolio turnover rate (d) .................................... 148.65% 59.13% 82.77%
- ------------------------------------------------------------------------------------------------------------------
* During the period, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such activity had not occurred, the ratios
would have been as indicated.
(a) For the period from May 1, 2006 (commencement of operations) through
December 31, 2006.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
84
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the period indicated.
Year Ended Period Ended
December 31, December 31,
MMA Praxis Small Cap Fund - Class A 2008 2007 (a)
=====================================================================================================
Net asset value at beginning of period ......................... $ 9.50 $ 10.00
------------ ------------
Loss from investment operations:
Net investment loss .......................................... (0.03) --(b)
Net realized and unrealized losses on investments ............ (3.65) (0.50)
------------ ------------
Total from investment operations ............................... (3.68) (0.50)
------------ ------------
Paid-in capital from redemption fees (b) ....................... -- --
------------ ------------
Net asset value at end of period ............................... $ 5.82 $ 9.50
============ ============
Total return (excludes sales charge) ........................... (38.74%) (5.00%)(c)
============ ============
Net assets at end of period (000s) ............................. $ 2,307 $ 1,398
============ ============
Ratio of net expenses to average net assets .................... 1.46% 1.65%(d)
Ratio of net investment loss to average net assets ............. (0.52%) (0.04%)(d)
Ratio of expenses to average net assets* ....................... 2.20% 3.78%(d)
Portfolio turnover rate (e) .................................... 64.37% 30.37%(d)
- -----------------------------------------------------------------------------------------------------
MMA Praxis Small Cap Fund - Class B
=====================================================================================================
Net asset value at beginning of period ......................... $ 9.45 $ 10.00
------------ ------------
Loss from investment operations:
Net investment loss .......................................... (0.07) (0.02)
Net realized and unrealized losses on investments ............ (3.62) (0.53)
------------ ------------
Total from investment operations ............................... (3.69) (0.55)
------------ ------------
Paid-in capital from redemption fees ........................... --(b) --
------------ ------------
Net asset value at end of period ............................... $ 5.76 $ 9.45
============ ============
Total return (excludes sales charge) ........................... (39.05%) (5.50%)(c)
============ ============
Net assets at end of period (000s) ............................. $ 456 $ 370
============ ============
Ratio of net expenses to average net assets .................... 1.98% 2.28%(d)
Ratio of net investment loss to average net assets ............. (1.04%) (0.68%)(d)
Ratio of expenses to average net assets* ....................... 3.23% 4.15%(d)
Portfolio turnover rate (e) .................................... 64.37% 30.37%(d)
- -----------------------------------------------------------------------------------------------------
* During the period, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such activity had not occurred, the ratios
would have been as indicated.
(a) For the period May 1, 2007 (commencement of operations) through December
31, 2007.
(b) Amount rounds to less than $0.005 per share.
(c) Not annualized.
(d) Annualized.
(e) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
85
MMA Praxis Funds
Financial highlights
For a share outstanding throughout the period indicated.
Year Ended Period Ended
December 31, December 31,
MMA Praxis Small Cap Fund - Class I 2008 2007 (a)
=====================================================================================================
Net asset value at beginning of period ......................... $ 9.50 $ 10.00
------------ ------------
Income (loss) from investment operations:
Net investment income (loss) ................................. (0.02) 0.01
Net realized and unrealized losses on investments ............ (3.64) (0.50)
------------ ------------
Total from investment operations ............................... (3.66) (0.49)
------------ ------------
Less Distributions:
Dividends from net investment income ......................... -- (0.01)
------------ ------------
Net asset value at end of period ............................... $ 5.84 $ 9.50
============ ============
Total return (excludes sales charge) ........................... (38.53%) (4.91%)(b)
============ ============
Net assets at end of period (000s) ............................. $ 15,392 $ 15,406
============ ============
Ratio of net expenses to average net assets .................... 1.22% 1.35%(c)
Ratio of net investment income (loss) to average net assets .... (0.29%) 0.47%(c)
Ratio of expenses to average net assets* ....................... 1.27% 2.18%(c)
Portfolio turnover rate (d) .................................... 64.37% 30.37%(c)
- -----------------------------------------------------------------------------------------------------
* During the period, certain expenses were reduced and/or reimbursed by the
Adviser and/or Distributor. If such activity had not occurred, the ratios
would have been as indicated.
(a) For the period May 1, 2007 (commencement of operations) through December
31, 2007.
(b) Not annualized.
(c) Annualized.
(d) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between classes of shares issued.
See accompanying Notes to Financial Statements.
86
-----------------------------
Notes to financial statements
-----------------------------
MMA Praxis Mutual Funds
Notes to financial statements
December 31, 2008
1. Organization:
The MMA Praxis Mutual Funds (the "Trust") is an open-end management investment
company established as a Delaware business trust under a Declaration of Trust
dated September 27, 1993, as amended and restated December 1, 1993, and is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). The Trust currently consists of the MMA Praxis Intermediate Income Fund,
the MMA Praxis Core Stock Fund, the MMA Praxis Value Index Fund, the MMA Praxis
Growth Index Fund, the MMA Praxis International Fund and the MMA Praxis Small
Cap Fund, (individually a "Fund", collectively "the Funds"). These are also
known as the Intermediate Income Fund, Core Stock Fund, Value Index Fund, Growth
Index Fund, International Fund, and Small Cap Fund.
The Funds currently offer three classes of shares; Class A, Class B and Class I.
Each class of shares in a Fund has identical rights and privileges except with
respect to fees paid under the distribution and shareholder servicing
agreements, voting rights on matters affecting a single class of shares and the
exchange privileges of each class of shares.
Under the Trust's organizational documents, its Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Trust. In addition, in the normal course of business, the Trust
enters into contracts with its vendors and others that provide general
indemnification. Each Fund's maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made against a Fund.
However, based on experience, the Trust expects the risk of loss to be remote.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements. The policies are in
conformity with U.S. generally accepted accounting principles ("GAAP"). The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses for the reporting
period. Actual results could differ from those estimates.
Securities Valuation:
Securities generally are valued at market values determined on the basis of the
latest available bid prices in the principal market (closing sales prices if the
principal market is an exchange) in which such securities are normally traded.
Investments in investment companies are valued at their respective net asset
values as reported by such companies. The differences between the cost and
market values of investments are reflected as either unrealized appreciation or
depreciation.
The Funds use various independent pricing services to value most of their
investments. A pricing service would normally consider such factors as yield,
risk, quality, maturity, type of issue, trading characteristics, special
circumstances and other factors it deems relevant in determining valuations of
normal institutional trading units of debt securities and would not rely
exclusively on quoted prices. When fair valuing foreign securities held by the
International Fund, certain pricing services might use computerized pricing
models to systematically calculate adjustments to foreign security closing
prices based on the latest market movements. Such pricing models utilize market
data that has been obtained between the local market close and the NYSE close to
compute adjustments to foreign security close prices. The methods used by the
pricing service and the valuations so established will be reviewed by the
Adviser under general supervision of the Funds' Board of Trustees. Securities
for which market quotations are not readily available, or are unreliable, are
valued at their fair value as determined in good faith in accordance with
consistently applied procedures established by and under the general supervision
of the Board of Trustees. Money market instruments and other debt securities
with a remaining maturity of less than 60 days are valued at amortized cost,
which approximates market value.
87
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
Investments in restricted securities are valued by the Board of Trustees or
valued pursuant to valuation procedures approved by the Board of Trustees (the
"Valuation Procedures"). The Valuation Procedures contemplate the Board's
delegation of the implementation of the Valuation Procedures to the Adviser. In
valuing restricted securities under the Valuation Procedures, the Adviser will
consider (but is not limited to) certain specific and general factors enumerated
in the Valuation Procedures. The Valuation Procedures require that the Adviser
report to the Board at each of its regular quarterly meetings regarding
valuation of restricted securities and actions taken in connection with the
Valuation Procedures.
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The changes to current generally accepted accounting principles from the
application of this Statement relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements.
Various inputs are used in determining the value of the Funds investments. These
inputs are summarized in the three broad levels listed below:
o Level 1 -- quoted prices in active markets for identical securities
o Level 2 -- other significant observable inputs (including quoted prices
for similar securities, interest rates, prepayment speeds, credit risk,
etc.)
o Level 3 -- significant unobservable inputs (including the Fund's own
assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities in accordance with SFAS
No. 157, are not necessarily an indication of the risk associated with investing
in those securities. For example, money market securities are valued using
amortized cost, in accordance with rules under the 1940 Act. Generally,
amortized cost approximates the current fair value of a security, but since the
value is not obtained from a quoted price in an active market, such securities
are reflected as Level 2.
88
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
The following is a summary of the inputs used to value the Funds net assets as
of December 31, 2008:
Level 2 --
Other Level 3 --
Significant Significant
Level 1 -- Observable Unobservable
Quoted Prices Inputs Inputs
- --------------------------------------------------------------------------------
Investments in Securities:
Intermediate Income Fund ...... $ 14,664,654 $ 213,680,112 $ 2,515,000
Core Stock Fund ............... 167,401,234 1,227,992 2,935,000
Value Index Fund .............. 51,583,886 -- 760,000
Growth Index Fund ............. 15,667,296 -- 190,000
International Fund ............ 12,397,820 72,979,491 1,305,000
Small Cap Fund ................ 18,148,023 -- 200,000
Derivatives:*
Core Stock Fund ............... $ (7,800) $ -- $ --
Value Index Fund .............. (1,950) -- --
- --------------------------------------------------------------------------------
* These represent futures which are valued at the unrealized appreciation
(depreciation) on the instrument.
Following is a reconciliation of Level 3 assets for which significant
unobservable inputs for Investments in Securities were used to determine fair
value for each Fund:
Intermediate Value
Income Core Stock Index
Fund Fund Fund
- --------------------------------------------------------------------------------
Balance as of December 31, 2007 .... $ 3,075,000 $ 4,265,000 $ 760,000
Proceeds from Sales ................ (560,000) (1,330,000) --
----------- ----------- -----------
Balance as of December 31, 2008 .... $ 2,515,000 $ 2,935,000 $ 760,000
=========== =========== ===========
- --------------------------------------------------------------------------------
Small
Growth Index International Cap
Fund Fund Fund
- --------------------------------------------------------------------------------
Balance as of December 31, 2007 .... $ 240,000 $ 2,275,000 $ 200,000
Proceeds from Sales ................ (50,000) (970,000) --
----------- ----------- -----------
Balance as of December 31, 2008 .... $ 190,000 $ 1,305,000 $ 200,000
=========== =========== ===========
- --------------------------------------------------------------------------------
Securities Transactions and Related Income:
Security transactions are accounted for on the trade date. Gains or losses
realized on sales of securities are determined by comparing the identified cost
of the security lot sold with the net sales proceeds. Interest income is
recognized on the accrual basis and includes, where applicable, the pro rata
amortization of premium or accretion of discount. Dividend income is recorded on
the ex-dividend date.
89
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
Allocations:
Investment income earned, realized capital gains and losses, and unrealized
appreciation and depreciation for the Funds are allocated daily to each class of
shares based upon its proportionate share of total net assets of the Fund. Class
specific expenses are charged directly to the class incurring the expense.
Common expenses, which are not attributable to a specific class, are allocated
daily to each class of shares based upon its proportionate share of total net
assets of the Fund. Expenses not directly billed to a Fund are allocated
proportionally among all Funds daily in relation to net assets of each Fund or
another reasonable measure.
Risks associated with Foreign Securities and Currencies:
Investments in securities of foreign issuers carry certain risks not ordinarily
associated with investments in securities of domestic issuers. Such risks
include adverse future political and economic developments and the possible
imposition of exchange controls or other foreign governmental laws and
restrictions. In addition, with respect to certain countries, there is the
possibility of expropriation of assets, confiscatory taxation, political or
social instability or diplomatic developments which could adversely affect
investments in those countries.
Certain countries may also impose substantial restrictions on investments on
their capital markets by foreign entities, including restriction on investment
in issuers or industries deemed sensitive to the relevant nation's interests.
These factors may limit the investment opportunities available or result in lack
of liquidity and high price volatility with respect to securities of issuers
from developing countries.
Foreign Currency Translation:
The market value of investment securities, other assets and liabilities of the
Core Stock Fund and the International Fund denominated in foreign currencies are
translated into U.S. dollars at the current exchange rate at the close of each
business day. Purchases and sales of securities, income receipts and expense
payments are translated into U.S. dollars based at the exchange rate on the date
of the transaction.
The Funds do not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized/unrealized gain (loss) from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Funds' books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from the changes in the value of assets and
liabilities including investments in securities at fiscal year end, resulting
from changes in the exchange rate.
90
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
Forward Foreign Currency Exchange Contracts:
The International Fund may enter into forward foreign currency exchange
contracts for the purchase or sale of specific foreign currencies at a fixed
price on a future date. Risks may arise upon entering these contracts for the
potential inability of counterparties to meet the terms of their contracts and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. The International Fund will enter into forward contracts as a hedge
against specific transactions or portfolio positions to protect against adverse
currency movements. The forward foreign currency exchange contracts are adjusted
by the daily exchange rate of the underlying currency and any gains or losses
are recorded for financial statement purposes as unrealized until the contract
settlement date, at which time the International Fund records a realized gain or
loss equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
As of December 31, 2008, the International Fund had the following forward
foreign currency exchange contracts outstanding as follows:
Settlement To Receive/ Initial Market Net Unrealized Net Unrealized
Date To Deliver Value Value Appreciation Depreciation
- -----------------------------------------------------------------------------------------------------------------
Contracts to Buy
1/29/09 .................... 1,670,000 AUD $ 1,108,129 $ 1,184,744 $ 76,615 $ --
1/29/09 .................... 241,000 AUD 154,361 170,972 16,611 --
1/29/09 .................... 964,000 AUD 636,240 683,888 47,648 --
1/2/09 ..................... 56,941 AUD 39,316 40,500 1,185 --
1/5/09 ..................... 57,488 AUD 39,782 40,889 1,107 --
1/28/09 .................... 4,590,000 DKK 780,745 860,257 79,512 --
1/28/09 .................... 49,200 DKK 8,385 9,221 836 --
1/28/09 .................... 196,800 DKK 34,110 36,884 2,774 --
1/6/09 ..................... 8,786,000 EUR 11,239,930 12,273,207 1,033,277 --
2/4/09 ..................... 1,233,000 EUR 1,564,061 1,721,106 157,045 --
2/4/09 ..................... 1,113,000 EUR 1,398,095 1,553,601 155,506 --
2/4/09 ..................... 727,600 EUR 925,071 1,015,634 90,563 --
2/4/09 ..................... 727,600 EUR 923,870 1,015,634 91,764 --
2/4/09 ..................... 218,200 EUR 281,893 304,578 22,686 --
2/4/09 ..................... 218,200 EUR 282,056 304,578 22,522 --
2/4/09 ..................... 349,400 EUR 452,927 487,716 34,789 --
2/4/09 ..................... 698,500 EUR 924,116 975,014 50,898 --
2/4/09 ..................... 698,500 EUR 924,744 975,014 50,270 --
1/2/09 ..................... 264,796 EUR 372,057 369,904 -- 2,153
1/5/09 ..................... 110,011 EUR 155,314 153,678 -- 1,636
1/5/09 ..................... 31,527 EUR 44,591 44,041 -- 550
1/6/09 ..................... 2,824,000 GBP 4,525,742 4,120,472 -- 405,270
2/4/09 ..................... 558,000 GBP 843,517 813,886 -- 29,632
2/4/09 ..................... 334,400 GBP 499,069 487,748 -- 11,321
2/4/09 ..................... 267,520 GBP 394,164 390,198 -- 3,966
2/4/09 ..................... 713,400 GBP 1,060,005 1,040,548 -- 19,457
2/4/09 ..................... 356,680 GBP 530,776 520,245 -- 10,530
1/2/09 ..................... 42,913 GBP 62,006 62,614 608 --
1/2/09 ..................... 915 GBP 1,322 1,335 13 --
91
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
Settlement To Receive/ Initial Market Net Unrealized Net Unrealized
Date To Deliver Value Value Appreciation Depreciation
- -----------------------------------------------------------------------------------------------------------------
Contracts to Buy, continued
1/2/09 ..................... 28,782GBP $ 41,723 $ 41,996 $ 273 $ --
1/3/09 ..................... 29,189GBP 42,120 42,590 470 --
1/5/09 ..................... 42,692GBP 61,596 62,292 696 --
1/5/09 ..................... 3,214,526JPY 35,524 35,432 -- 92
1/6/09 ..................... 3,496,994JPY 38,822 38,546 -- 276
1/29/09 .................... 2,000,000NOK 287,749 287,230 -- 519
1/29/09 .................... 463,600NOK 65,796 66,580 784 --
1/29/09 .................... 1,854,400NOK 260,541 266,320 5,779 --
1/29/09 .................... 830,000SEK 105,023 106,061 1,037 --
1/29/09 .................... 404,600SEK 49,422 51,701 2,279 --
1/29/09 .................... 1,618,400SEK 202,381 206,806 4,425 --
Contracts to Sell
1/29/09 .................... 1,670,000AUD 1,007,845 1,184,744 -- 176,899
1/29/09 .................... 1,205,000AUD 788,648 854,860 -- 66,212
1/28/29 .................... 4,590,000DKK 772,662 860,257 -- 87,595
1/28/09 .................... 246,000DKK 41,872 46,105 -- 4,233
1/6/09 ..................... 2,125,000EUR 2,938,875 2,968,423 -- 29,548
1/6/09 ..................... 1,436,000EUR 1,936,590 2,005,956 -- 69,366
1/6/09 ..................... 1,436,000EUR 1,934,148 2,005,956 -- 71,807
1/6/09 ..................... 2,544,000EUR 3,430,584 3,553,726 -- 123,142
1/6/09 ..................... 1,245,000EUR 1,628,834 1,739,147 -- 110,313
2/4/09 ..................... 2,369,000EUR 3,007,327 3,306,812 -- 299,485
2/4/09 ..................... 1,018,000EUR 1,290,570 1,420,994 -- 130,424
2/4/09 ..................... 1,277,000EUR 1,610,105 1,782,524 -- 172,418
2/4/09 ..................... 1,320,000EUR 1,645,063 1,842,546 -- 197,483
3/23/09 .................... 943,500EUR 1,311,003 1,315,380 -- 4,377
1/6/09 ..................... 1,123,000GBP 1,951,437 1,638,559 312,878 --
1/6/09 ..................... 989,000GBP 1,703,355 1,443,041 260,314 --
1/6/09 ..................... 712,000GBP 1,194,750 1,038,873 155,878 --
2/4/09 ..................... 509,000GBP 801,186 742,415 58,771 --
2/4/09 ..................... 1,195,000GBP 1,794,233 1,742,999 51,234 --
2/4/09 ..................... 526,000GBP 771,342 767,211 4,131 --
1/29/09 .................... 2,000,000NOK 281,551 287,230 -- 5,678
1/29/09 .................... 2,318,000NOK 340,832 332,900 7,932 --
1/29/09 .................... 830,000SEK 102,051 106,061 -- 4,010
1/29/09 .................... 2,023,000SEK 259,582 258,507 1,076 --
-------------- --------------
$ 2,804,186 $ 2,038,392
============== ==============
- -----------------------------------------------------------------------------------------------------------------
AUD - Australian
DKK - Danish Krone
EUR - Euro
GBP - Great British Pound
JPY - Japanese Yen
NOK - Norway Krona
SEK - Swedish Krona
92
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
Futures Contracts:
The Funds may invest in futures contracts (stock or bond index futures contracts
or interest rate futures contracts) to hedge or manage risks associated with a
Funds' securities investments. To enter into a futures contract, an amount of
cash and cash equivalents, equal to a certain percentage of the market value of
the futures contracts, is deposited in a segregated account with the Fund's
Custodian and/or in a margin account with a broker to collateralize the position
and thereby ensure that the use of such futures is unleveraged. Positions in
futures contracts may be closed out only on an exchange that provides a
secondary market for such futures. However, there can be no assurance that a
liquid secondary market will exist for any particular futures contract at any
specific time. Thus, it may not be possible to close a futures position. In the
event of adverse price movements, a Fund would continue to be required to make
daily cash payments to maintain its required margin. In such situations, if a
Fund had insufficient cash, it might have to sell portfolio securities to meet
daily margin requirements at a time when it would be disadvantageous to do so.
In addition, a Fund might be required to make delivery of the instruments to
underlying futures contracts it holds. The inability to close the futures
position also could have an adverse impact on a Fund's ability to hedge or
manage risks effectively.
Successful use of futures by a Fund is also subject to MMA Capital Management's
(the "Adviser") ability to predict movements correctly in the direction of the
market. There is an imperfect correlation between movements in the price of the
future and movements in the price of the securities that are the subject of the
hedge. In addition, the price of futures may not correlate perfectly with
movement in the cash market due to certain market distortions. Due to the
possibility of price distortion in the futures market and because of the
imperfect correlation between the movements in the cash market and movements in
the price of futures, a correct forecast of general market trends or interest
rate movements by the Adviser may still not result in a successful hedging
transaction over a short time frame.
Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of a trading session. Once
the daily limit has been reached in a particular type of contract, no trades may
be made on that day at a price beyond the limit. The daily limit governs only
price movement during a particular trading day and therefore does not limit
potential losses, because the limit may prevent the liquidation of unfavorable
positions. Futures contract prices have occasionally moved to the daily limit
for several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and subjecting some futures
to substantial losses.
The trading of futures contracts is also subject to the risk of trading halts,
suspensions, exchange or clearing house equipment failures, government
intervention, insolvency of a brokerage firm or clearing house or other
disruptions of normal trading activity, which could at times make it difficult
or impossible to liquidate existing positions or to recover excess variation
margin payments.
In March 2008, the Financial Accounting Standards Board ("FASB") issued SFAS No.
161, "Disclosures about Derivative Instruments and Hedging Activities". SFAS No.
161 is effective for financial statements issued for periods beginning after
November 15, 2008, and interim periods which follow. SFAS No. 161 requires
enhanced disclosures about the Funds' derivative and hedging activities,
including how such activities are accounted for and their effect on the Funds'
financial position, performance and cash flows. Management is currently
evaluating the impact the adoption of SFAS No. 161 will have on the Funds'
financial statements and related disclosures.
93
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
Securities Lending:
In order to generate additional income, each Fund may, from time to time,
subject to its investment objectives and policies, lend its portfolio securities
to broker-dealers, banks, or institutional borrowers of securities pursuant to
agreements requiring that the loans be secured by collateral equal in value to
100% of the value of the securities loaned. Collateral for loans of portfolio
securities must consist of: (1) cash in U.S. dollars, to be invested in the
Northern Institutional Liquid Asset Portfolio, (2) obligations issued or
guaranteed by the U.S. Treasury or by any agency or instrumentality of the U.S.
Government, or (3) irrevocable, non-transferable, stand-by letters of credit
issued by banks domiciled or doing business within the U.S. and meeting certain
credit requirements at the time of issuance. This collateral will be valued
daily by the Adviser. Should the market value of the loaned securities increase,
the borrower is required to furnish additional collateral to that Fund.
During the time portfolio securities are on loan, the borrower pays the Fund any
dividends or interest received on such securities. Loans are subject to
termination by the Fund or the borrower at any time. While the Fund does not
have a right to vote on securities on loan, each Fund intends to terminate the
loan and regain the right to vote if that is considered important with respect
to the investment. While the lending of securities may subject a Fund to certain
risks, such as delays or an inability to regain the securities in the event the
borrower were to default or enter into bankruptcy, each Fund will have the
contract right to retain the collateral described above.
The Northern Trust Company serves as the Securities Lending Agent. For providing
this service, the Securities Lending Agent retains 40% of the securities lending
income. The securities lending income is shown net of fees on the Statement of
Operations. For the year ended December 31, 2008, the Funds paid fees to
Northern Trust Company and had securities on loan as follows:
Fee paid to Market Market Value
Northern Trust Value of of Loaned
Company Collateral Securities
- --------------------------------------------------------------------------------
Intermediate Income Fund ....... $ 12,799 $10,556,274 $10,120,508
Core Stock Fund ................ 13,321 4,590,687 4,487,202
Value Index Fund ............... 1,436 814,709 805,492
Growth Index Fund .............. 94 18,275 18,154
International Fund ............. 22,257 4,592,975 4,456,284
Small Cap Fund ................. 1,637 228,990 227,375
- --------------------------------------------------------------------------------
94
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
Community Development Investments:
Consistent with the investment criteria for socially responsible investing, the
Board of Trustees of the Funds has authorized the Funds to make certain types of
community development investments. In connection with the community development
investments, the Funds have received from the Securities and Exchange Commission
("SEC") an exemptive order that permits each of the Funds to invest a limited
portion of its respective net assets in securities issued by an affiliate of the
Adviser, MMA Community Development Investments, Inc. ("MMA CDI"). MMA CDI is a
not-for-profit corporation that was organized specifically to promote community
development investing and it seeks to fund its efforts primarily through the
sale to investors of interests in certain investment pools that it has
established (the "CDI-Notes"). Assets raised through offerings of CDI-Notes are
then invested directly in non-profit and not-for-profit community development
organizations. Each Fund, in accordance with guidelines established by the Board
of Trustees and in compliance with the SEC's exemptive order, would be permitted
to invest up to 3% of its net assets in CDI-Notes. CDI-Notes have certain
specific risk factors associated with them. These types of investments offer a
rate of return below the prevailing market rate at acquisition and are
considered illiquid, unrated and below-investment grade. They also involve a
greater risk of default or price decline than investment-grade securities.
However, these investments have been determined by the Board of Trustees as
being a beneficial way to carry out each Fund's goals for stewardship investing
at the community level. In addition, these investments are valued in accordance
with procedures approved by the Board of Trustees.
Dividends and Distributions:
Dividends from net investment income are declared and paid monthly for the
Intermediate Income Fund. Dividends from net investment income are declared and
paid semi-annually for the Core Stock Fund, the Value Index Fund, the Growth
Index Fund, the International Fund, and the Small Cap Fund. Distributable net
realized capital gains, if any, are declared and distributed at least annually.
The amounts of dividends from net investment income and distributions from net
realized gains are determined in accordance with federal income tax regulations,
which may differ from GAAP. These "book/tax" differences are either considered
temporary or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the composition of net assets
based on their federal tax-basis treatment; temporary differences do not require
reclassification.
Federal Income Taxes:
It is each Fund's policy to continue to qualify as a regulated investment
company by complying with the provisions available to certain investment
companies, as defined in applicable sections of Subchapter M of the Internal
Revenue Code, and to distribute timely all of its net investment company taxable
income and net capital gains to shareholders. Therefore, no federal income tax
provision is required. Under the applicable foreign tax law, a withholding tax
may be imposed on interest, dividends and capital gains earned on foreign
investments at various rates. Where available, the International Fund will file
for claims on foreign taxes withheld.
The Funds will charge a redemption fee of 2.00% of the total redemption amount
if you sell or exchange your shares after holding them for less than 30 days
subject to certain exceptions and limitations described in the prospectus.
95
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
Redemption In-Kind:
During the fiscal year ended December 31, 2008, the MMA Praxis Core Stock Fund
and MMA Praxis International Fund delivered certain portfolio securities as
payment for Fund shares redeemed. This transaction resulted in realized capital
gains of $1,650,259 and $154,836, respectively, none of which were taxable to
the Fund, nor resulted in increased capital gain distributions to existing
shareholders of the Fund.
3. Purchases and Sales of Securities:
Purchases and sales of securities (excluding short-term debt securities having
maturities one year or less and U.S. Government Securities) for the year ended
December 31, 2008 were as follows:
Purchases Sales
- --------------------------------------------------------------------------------
Intermediate Income Fund ............... $ 53,002,355 $ 72,732,225
Core Stock Fund ........................ 69,687,318 89,379,921
Value Index Fund ....................... 25,563,558 12,790,409
Growth Index Fund ...................... 6,602,898 7,561,228
International Fund ..................... 177,338,141 212,927,299
Small Cap Fund ......................... 22,637,716 11,619,901
- --------------------------------------------------------------------------------
4. Related Party Transactions:
Menno Insurance Service, Inc. d/b/a the Adviser (a separate corporate entity
controlled by Mennonite Mutual Aid, Inc.), provides investment advisory services
to the Funds. Under the terms of the investment advisory agreement, the Adviser
is entitled to receive fees based on a percentage of the average daily net
assets of each of the Funds as follows: 0.40% for the Intermediate Income Fund;
0.74% for the Core Stock Fund; 0.30% for the Value Index Fund; 0.30% for the
Growth Index Fund; 0.90% for the International Fund and 0.85% for the Small Cap
Fund. The Adviser has retained various Sub-Advisers to manage the investments of
Funds under the terms of Sub-Advisory Agreements. The Adviser (not the Funds)
pays each Sub-Adviser a fee for these services. Evergreen Investment Management
Company, LLC, serves as the Sub-Adviser to the International Fund, Davis
Selected Advisers, L.P. serves as the Sub-Adviser to the Core Stock Fund, and
Luther King Capital Management serves as the Sub-Adviser to the Small Cap Fund.
The Adviser has entered into an expense limitation agreement pursuant to which
the Adviser agreed to waive fees and/or reimburse expenses to the extent
necessary in order to limit the total annual fund operating expenses (excluding
brokerage costs, interest, taxes, dividends, fees paid to vendors providing fair
value pricing and fund compliance services, legal fees, costs relating to such
services and extraordinary expenses).
The Funds have agreed to repay the Adviser for the amounts waived and/or
reimbursed by the Adviser pursuant to the expense limitation agreement, for up
to three years following the fiscal year in which the amounts were waived and/or
reimbursed, provided that such repayment does not cause the total annual fund
operating expenses of Class A, Class B, and Class I of each Fund to exceed
0.85%, 1.30% and 0.60%, respectively, for the Intermediate Income Fund; 1.43%,
2.08%, and 1.18%, respectively, for the Core Stock Fund; 0.94%, 1.49%, and
0.69%, respectively, for the Value Index Fund; 0.94%, 1.49%, and 0.69%,
respectively, for the Growth Index Fund; 1.67%, 2.32% and 1.42%, respectively,
for the International Fund; and 1.45%, 2.10%, and 1.20%, respectively, for the
Small Cap Fund. The Adviser has agreed to maintain these expense limitations
with regard to the Funds through April 30, 2009. For the year ended December 31,
2008, the Adviser waived investment advisory fees and/or reimbursed other
operating expenses in the Intermediate Income Fund, Value Index Fund, Growth
Index Fund, International Fund, and Small Cap Fund in the amount of $99,191,
$24,950, $31,734, $4,106 and $26,019, respectively.
96
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
As of December 31, 2008 the Funds had the following amounts (and year of
expiration) subject to repayment to the Adviser:
Repayment
Fund Fees Waived Expires Balance
- --------------------------------------------------------------------------------
Intermediate Income Fund ............... 2006 2009 $299,777
2007 2010 397,438
2008 2011 99,191
--------
$796,406
========
Value Index Fund ....................... 2006 2009 $ 9,996
2007 2010 17,107
2008 2011 24,950
--------
$ 52,053
========
Growth Index Fund ...................... 2007 2010 $ 53,285
2008 2011 31,734
--------
$ 85,019
========
International Fund ..................... 2006 2009 $ 875
2008 2011 4,106
--------
$ 4,981
========
Small Cap Fund ......................... 2007 2010 $ 38,293
2008 2011 26,019
--------
$ 64,312
========
During the year ended December 31, 2008, amounts subject to repayment to the
Adviser expired as follows:
Fund Balance
- --------------------------------------------------------------------------------
Intermediate Income Fund ................................. $134,653
97
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
JPMorgan Chase Bank, N.A. (JPMorgan) provides administrative, accounting,
transfer agency, shareholder servicing and dividend disbursing services on
behalf of the Trust. For these services, JPMorgan receives an annual fee, paid
monthly, from each Fund.
IFS Fund Distributors, Inc. ("Underwriter") is the Funds' principal underwriter
and, as such, acts as exclusive agent for distribution of the Funds' shares.
Under the terms of the Underwriting Agreement between the Trust and the
Underwriter, the Underwriter earned $6,948, $18,879, $10,996, $4,042, $19,183,
and $3,519 from underwriting and broker commissions on the sale of shares of the
Intermediate Income Fund, Core Stock Fund, Value Index Fund, Growth Index Fund,
International Fund, and Small Cap Fund, respectively, for the year ended
December 31, 2008. In addition, the Underwriter collected $19,580, $28,549,
$6,984, $491, $9,035, and $436 of contingent deferred sales loads of the
Intermediate Income Fund, Core Stock Fund, Value Index Fund, Growth Index Fund,
International Fund, and Small Cap Fund, respectively. For the year ended
December 31, 2008, the Distributor voluntarily waived distribution fees in the
Intermediate Income Fund, Core Stock Fund, Value Index Fund, Growth Index Fund,
International Fund and Small Cap Fund in the amount $170,630, $239,413, $81,696,
$9,140, $114,464 and $6,025, respectively.
The Trust has adopted a Plan of Distribution (12b-1 plan) for each Fund under
which each Fund may directly incur or reimburse the Adviser or the Underwriter
for expenses related to the distribution and promotion of shares. Class A shares
of each Fund may each pay an annual fee of up to 0.50% of average daily net
assets of such Fund's Class A shares. The Adviser or Underwriter may use up to
0.25% of the 12b-1 fee for shareholder servicing and up to 0.25% for
distribution. Class B shares of each Fund may each pay an annual fee of up to
1.00% of the average daily net assets of such Fund's Class B shares. The Adviser
or Underwriter may incur 0.25% of the 12b-1 fee for shareholder servicing and up
to 0.75% for distribution. Class I shares do not have a 12b-1 plan.
Under the terms of the Compliance Services Agreement between the Trust and
JPMorgan, JPMorgan provides certain compliance services to the Trust, including
developing and assisting in implementing a compliance program for JPMorgan on
behalf of the Trust and providing administrative support services to the Funds'
Compliance Program and Chief Compliance Officer. JPMorgan receives a quarterly
fee from each Fund.
Certain Officers of the Trust are affiliated with the Adviser and/or JPMorgan.
Such officers are not paid any fees directly by the Funds for serving as
officers of the Trust.
98
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
5. Capital Share Transactions:
Transactions in shares of the Funds are summarized below:
Intermediate Income Fund Core Stock Fund Value Index Fund
---------------------------- ---------------------------- ----------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
December 31, December 31, December 31, December 31, December 31, December 31,
2008 2007 2008 2007 2008 2007
- -----------------------------------------------------------------------------------------------------------------------------------
Capital Transactions:
Class A Shares:
Proceeds from shares issued ..... $ 14,462,406 $ 13,915,045 $ 15,442,770 $ 25,371,205 $ 10,583,584 $ 12,710,096
Dividends reinvested ............ 2,000,998 1,763,808 295,419 2,723,533 822,794 1,307,946
Cost of shares redeemed ......... (14,785,918) (8,679,295) (21,306,843) (19,894,052) (6,165,306) (4,533,501)
Redemption fees ................. 415 692 833 590 458 880
------------ ------------ ------------ ------------ ------------ ------------
Class A Share Transactions ...... $ 1,677,901 $ 7,000,250 $ (5,567,821) $ 8,201,276 $ 5,241,530 $ 9,485,421
------------ ------------ ------------ ------------ ------------ ------------
Class B Shares:
Proceeds from shares issued ..... $ 2,447,895 $ 1,829,132 $ 2,228,152 $ 3,552,134 $ 1,039,255 $ 2,125,152
Dividends reinvested ............ 724,916 864,685 -- 1,159,006 245,781 573,155
Cost of shares redeemed ......... (8,353,576) (7,496,421) (14,604,564) (24,423,732) (2,498,161) (2,537,831)
Redemption fees ................. 2,285 1,016 144 164 44 23
------------ ------------ ------------ ------------ ------------ ------------
Class B Share Transactions ...... $ (5,178,480) $ (4,801,588) $(12,376,268) $(19,712,428) $ (1,213,081) $ 160,499
------------ ------------ ------------ ------------ ------------ ------------
Class I Shares:
Proceeds from shares issued ..... $ 5,633,789 $ 9,607,207 $ 24,876,227 $ 8,221,824 $ 11,549,538 $ 9,523,435
Dividends reinvested ............ 6,264,933 7,553,164 485,042 4,492,513 723,144 1,244,627
Cost of shares redeemed ......... (66,310,394) (13,958,578) (15,960,366) (21,511,780) (2,420,352) (4,127,887)
Cost of shares redeemed in-kind.. -- -- (17,391,978) -- -- --
Redemption fees ................. 149 -- -- 111 -- --
------------ ------------ ------------ ------------ ------------ ------------
Class I Share Transactions ...... $(54,411,523) $ 3,201,793 $ (7,991,075) $ (8,797,332) $ 9,852,330 $ 6,640,175
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
from capital transactions ....... $(57,912,102) $ 5,400,455 $(25,935,164) $(20,308,484) $ 13,880,779 $ 16,286,095
============ ============ ============ ============ ============ ============
Share Transactions:
Class A Shares:
Issued ......................... 1,500,048 1,440,818 1,211,622 1,618,754 1,299,012 1,095,812
Reinvested ..................... 208,518 182,827 25,980 182,161 128,608 126,189
Redeemed ....................... (1,548,121) (900,127) (1,681,188) (1,267,619) (765,966) (397,045)
------------ ------------ ------------ ------------ ------------ ------------
Change in Class A Shares ....... 160,445 723,518 (443,586) 533,296 661,654 824,956
------------ ------------ ------------ ------------ ------------ ------------
Class B Shares:
Issued ......................... 253,647 189,223 187,550 237,624 124,017 184,412
Reinvested ..................... 75,298 89,556 2 81,942 38,880 55,780
Redeemed ....................... (865,466) (774,839) (1,188,809) (1,629,984) (296,471) (220,898)
------------ ------------ ------------ ------------ ------------ ------------
Change in Class B Shares ....... (536,521) (496,060) (1,001,257) (1,310,418) (133,574) 19,294
------------ ------------ ------------ ------------ ------------ ------------
Class I Shares:
Issued ......................... 580,358 997,625 2,181,765 526,581 1,544,428 826,681
Reinvested ..................... 649,132 783,714 41,230 298,118 117,743 121,331
Redeemed ....................... (6,986,579) (1,447,469) (1,322,583) (1,364,384) (314,514) (360,906)
Redeemed in-kind ............... -- -- (1,318,573) -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Change in Class I Shares ....... (5,757,089) 333,870 (418,161) (539,685) 1,347,657 587,106
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
from share transactions ........ (6,133,165) 561,328 (1,863,004) (1,316,807) 1,875,737 1,431,356
============ ============ ============ ============ ============ ============
99
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
Growth Index Fund International Fund Small Cap Fund
---------------------------- ----------------------------- ----------------------------
Year Period Year Year Year Period
Ended Ended Ended Ended Ended Ended
December 31, December 31, December 31, December 31, December 31, December 31,
2008 2007(a) 2008 2007 2008 2007(a)
- -----------------------------------------------------------------------------------------------------------------------------------
Capital Transactions:
Class A Shares:
Proceeds from shares issued ..... $ 2,054,832 $ 2,236,602 $ 11,798,862 $ 12,399,906 $ 2,391,686 $ 1,490,927
Dividends reinvested ............ 4,633 451 1,508,235 1,778,682 -- --
Cost of shares redeemed ......... (458,618) (21,201) (16,856,474) (12,067,541) (309,601) (14,619)
Redemption fees ................. 218 204 1,576 427 19 2
------------ ------------ ------------ ------------ ------------ ------------
Class A Share Transactions ...... $ 1,601,065 $ 2,216,056 $ (3,547,801) $ 2,111,474 $ 2,082,104 $ 1,476,310
------------ ------------ ------------ ------------ ------------ ------------
Class B Shares:
Proceeds from shares issued ..... $ 741,272 $ 633,681 $ 1,418,502 $ 2,098,794 $ 445,897 $ 407,246
Dividends reinvested ............ 810 144 554,247 698,317 -- --
Cost of shares redeemed ......... (174,110) (20,533) (5,703,415) (6,551,560) (114,169) (18,002)
Redemption fees ................. 2 74 123 31 2 --
------------ ------------ ------------ ------------ ------------ ------------
Class B Share Transactions ...... $ 567,974 $ 613,366 $ (3,730,543) $ (3,754,418) $ 331,730 $ 389,244
------------ ------------ ------------ ------------ ------------ ------------
Class I Shares:
Proceeds from shares issued ..... $ 692,619 $ 24,794,311 $ 9,213,487 $ 14,291,436 $ 10,179,302 $ 16,343,180
Dividends reinvested ............ 69,808 16,814 2,634,290 4,190,613 -- 2,206
Cost of shares redeemed ......... (3,989,328) (4,691) (4,133,295) (15,345,402) (1,925,498) (31,166)
Cost of shares redeemed in-kind.. -- -- (31,021,954) -- -- --
------------ ------------ ----------- ------------ ------------ ------------
Class I Share Transactions ...... $ (3,226,901) $ 24,806,434 $(23,307,472) $ 3,136,647 $ 8,253,804 $ 16,314,220
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
from capital transactions ........ (1,057,862) $ 27,635,856 $(30,585,816) $ 1,493,703 $ 10,667,638 $ 18,179,774
============ ============ ============ ============ ============ ============
Share Transactions:
Class A Shares:
Issued .......................... 227,852 216,607 947,125 818,318 293,206 148,658
Reinvested ...................... 713 43 157,705 117,758 -- --
Redeemed ........................ (58,108) (2,063) (1,372,349) (797,123) (43,852) (1,456)
------------ ------------ ------------ ------------ ------------ ------------
Change in Class A Shares ........ 170,457 214,587 (267,519) 138,953 249,354 147,202
------------ ------------ ------------ ------------ ------------ ------------
Class B Shares:
Issued .......................... 81,271 61,543 114,945 141,820 53,994 40,862
Reinvested ...................... 125 14 60,792 47,335 -- --
Redeemed ........................ (20,117) (1,980) (459,488) (441,009) (13,964) (1,778)
------------ ------------ ------------ ------------ ------------ ------------
Change in Class B Shares ........ 61,279 59,577 (283,751) (251,854) 40,030 39,084
------------ ------------ ------------ ------------ ------------ ------------
Class I Shares:
Issued .......................... 86,847 2,323,992 822,761 927,663 1,271,429 1,623,945
Reinvested ...................... 9,468 1,616 283,394 277,709 -- 232
Redeemed ........................ (517,335) (449) (352,428) (1,000,551) (255,243) (3,259)
Redeemed in-kind ................ -- -- (2,226,989) -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Change in Class I Shares ........ (421,020) 2,325,159 (1,473,262) 204,821 1,016,186 1,620,918
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
from share transactions ......... (189,284) 2,599,323 (2,024,532) 91,920 1,305,570 1,807,204
============ ============ ============ ============ ============ ============
(a) For the period May 1, 2007 (commencement of operations) through December
31, 2007.
100
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
6. Federal Income Tax Information:
The character of dividends paid to shareholders for federal income tax purposes
during the years ended December 31, 2008 and 2007 was as follows:
Intermediate Income Fund Core Stock Fund Value Index Fund
------------------------- ------------------------- -------------------------
2008 2007 2008 2007 2008 2007
- --------------------------------------------------------------------------------------------------------------------
From ordinary income ........... $12,399,258 $12,852,931 $ 1,053,735 $ 3,904,243 $ 1,467,377 $ 2,232,453
From long-term capital gains ... -- -- -- 5,000,878 908,837 1,491,429
----------- ----------- ----------- ----------- ----------- -----------
Total distributions ............ $12,399,258 $12,852,931 $ 1,053,735 $ 8,905,121 $ 2,376,214 $ 3,723,882
=========== =========== =========== =========== =========== ===========
Growth Index Fund International Fund Small Cap Fund
------------------------- ------------------------- -------------------------
2008 2007 2008 2007 2008 2007
- --------------------------------------------------------------------------------------------------------------------
From ordinary income ........... $ 92,538 $ 18,741 $ 1,438,938 $ 2,104,886 $ -- $ 14,506
From long-term capital gains ... -- 22 3,486,770 5,139,592 -- --
Tax return of capital .......... -- -- 211,892 -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total distributions ............ $ 92,538 $ 18,763 $ 5,137,600 $ 7,244,478 $ -- $ 14,506
=========== =========== =========== =========== =========== ===========
The following information is computed on a tax basis for each item as of
December 31, 2008:
Intermediate Core Value Growth Small
Income Stock Index Index International Cap
Fund Fund Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
Tax cost of portfolio
investments ................... $ 235,065,644 $ 244,488,177 $ 76,162,745 $ 26,278,045 $ 92,098,198 $ 24,296,302
============= ============= ============= ============= ============= =============
Gross unrealized appreciation ... 6,758,676 6,472,101 1,986,722 141,028 4,434,459 416,825
Gross unrealized depreciation ... (10,964,554) (79,380,452) (25,801,681) (10,561,777) (9,850,346) (6,365,104)
------------- ------------- ------------- ------------- ------------- -------------
Net unrealized depreciation ..... (4,205,878) (72,908,351) (23,814,959) (10,420,749) (5,415,887) (5,948,279)
Undistributed ordinary income ... -- -- 35,531 -- -- --
Capital loss carryforward ....... (2,923,481) (12,397,714) (1,354,661) (885,950) (8,630,470) (2,964,813)
Post-October losses ............. (233,409) (1,936,725) (3,402,196) (1,668,828) (6,423,296) (1,708,973)
Other temporary differences ..... (35,513) (158,430) 463 3,279,295 (774,500) --
============= ============= ============= ============= ============= =============
Accumulated deficit ......... $ (7,398,281) $ (87,401,220) $ (28,535,822) $ (9,696,232) $ (21,244,153) $ (10,622,065)
============= ============= ============= ============= ============= =============
The difference between book basis and tax basis net unrealized appreciation
(depreciation) is attributable primarily to the tax deferral of losses on wash
sales and investments in Passive Foreign Investment Companies.
101
MMA Praxis Mutual Funds
Notes to financial statements, continued
December 31, 2008
As of December 31, 2008, the following Funds had net capital loss carryforwards
to offset future net capital gains, if any:
Amount Expires
-------------- -----------
Intermediate Income Fund $ 532,675 2009
673,793 2010
157,433 2012
1,277,637 2014
281,943 2016
--------------
$ 2,923,481
==============
Core Stock Fund $ 12,397,714 2016
==============
Value Index Fund $ 1,354,661 2016
==============
Growth Index Fund $ 885,950 2016
==============
International Fund $ 8,630,470 2016
==============
Small Cap Fund $ 31,958 2015
2,932,855 2016
--------------
$ 2,964,813
==============
During the year ended December 31, 2008, the Intermediate Income Fund had
$125,672 of capital loss carryforwards expire unutilized.
Certain reclassifications, the result of permanent differences between financial
statement and income tax reporting requirements, have been made to the
components of capital. These permanent differences are primarily the result of
in-kind redemptions, distributions in excess of net investment income, foreign
currency, paydowns, expiration of capital loss carryforwards, REIT and PFIC
reclassifications. These reclassifications have no impact on the net assets or
net asset value per share of the Funds and are designed to present each Fund's
capital accounts on a tax basis. The following reclassifications have been made
to the following Funds for the year ended December 31, 2008:
Accumulated Accumulated
Paid-In Net Investment Net Realized
Capital Income (Loss) Gains (Losses)
- ------------------------------------------------------------------------------
Intermediate Income Fund ....... $ (125,672) $ 397,501 $ (271,829)
Core Stock Fund ................ (1,743,122) 73,639 1,669,483
Value Index Fund ............... -- (2,076) 2,076
Growth Index Fund .............. (1,196,075) (1,740) 1,197,815
International Fund ............. (527,932) 372,746 155,186
Small Cap Fund ................. (69,262) 66,123 3,139
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not" threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006 and is to be applied
to all open tax years as of the effective date. The Funds have analyzed their
tax positions taken on Federal income tax returns for all open tax years (tax
years ended December 31, 2004 through 2007) for purposes of implementing FIN 48
and have concluded that no provision for income tax is required in their
financial statements.
102
-------------------------------------------------------
Report of Independent Registered Public Accounting Firm
-------------------------------------------------------
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of the
MMA Praxis Mutual Funds
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the MMA Praxis Mutual Funds (comprised of the
MMA Praxis Intermediate Income Fund, MMA Praxis Core Stock Fund, MMA Praxis
Value Index Fund, MMA Praxis Growth Index Fund, MMA Praxis International Fund,
and MMA Praxis Small Cap Fund) (collectively, the "Funds") as of December 31,
2008, and the related statements of operations for the year then ended, and the
statements of changes in net assets and financial highlights for the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Funds' internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds' internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2008, by correspondence with the
custodian and brokers. 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 respective portfolios constituting the MMA Praxis Mutual Funds at
December 31, 2008, the results of their operations for the year then ended, and
the changes in their net assets and the financial highlights for each of the
periods indicated therein, in conformity with U.S. generally accepted accounting
principles.
Cincinnati, Ohio
February 27, 2009
103
- ---------------------------
Additional fund information
- ---------------------------
MMA Praxis Mutual Funds
Additional fund information (unaudited)
December 31, 2008
Security Allocation:
The MMA Praxis Mutual Funds invested, as a percentage of net assets, in the
following as of the year ended December 31, 2008.
- --------------------------------------------------------------------------------
Intermediate Income Fund
- --------------------------------------------------------------------------------
Percentage of
Security Allocation Net Assets
- --------------------------------------------------------------------------------
Corporate Bonds 34.5%
Freddie Mac 19.6%
Fannie Mae 19.0%
Commerical Mortgage Backed Securities 11.2%
Securities Lending Collateral 4.8%
Federal Home Loan Bank 4.2%
Government National Mortgage Assoc. 2.5%
Tennessee Valley Authority 2.0%
FDIC Guaranteed 1.5%
Short Term Investments 1.4%
Corporate Notes 1.1%
Federal Farm Credit Bank 1.0%
Asset Backed Securities 0.9%
Municipal Bonds 0.5%
Mutual Funds 0.5%
Small Business Administration 0.4%
Collateralized Mortgage Obligations 0.2%
Interest Only Bonds 0.2%
- --------------------------------------------------------------------------------
Total 105.5%
================================================================================
- --------------------------------------------------------------------------------
Core Stock Fund
- --------------------------------------------------------------------------------
Percentage of
Security Allocation Net Assets
- --------------------------------------------------------------------------------
Common Stocks 96.6%
Securities Lending Collateral 2.7%
Corporate Notes 1.7%
Commerical Paper 0.7%
- --------------------------------------------------------------------------------
Total 101.7%
================================================================================
- --------------------------------------------------------------------------------
Value Index Fund
- --------------------------------------------------------------------------------
Percentage of
Security Allocation Net Assets
- --------------------------------------------------------------------------------
Common Stocks 98.5%
Securities Lending Collateral 1.6%
Corporate Notes 1.5%
Short Term Investments 0.5%
- --------------------------------------------------------------------------------
Total 102.1%
================================================================================
- --------------------------------------------------------------------------------
Growth Index Fund
- --------------------------------------------------------------------------------
Percentage of
Security Allocation Net Assets
- --------------------------------------------------------------------------------
Common Stocks 98.7%
Corporate Notes 1.2%
Short Term Investments 1.2%
Securities Lending Collateral 0.1%
- --------------------------------------------------------------------------------
Total 101.2%
================================================================================
- --------------------------------------------------------------------------------
International Fund
- --------------------------------------------------------------------------------
Percentage of
Security Allocation Net Assets
- --------------------------------------------------------------------------------
Argentina 0.3%
Australia 4.6%
Belgium 3.3%
Bermuda 0.2%
Canada 2.2%
China 1.6%
Corporate Notes - Domestic 1.5%
Denmark 1.6%
Exchange Traded Funds 0.0%
Finland 1.0%
France 11.7%
Germany 13.8%
Greece 3.1%
Israel 0.4%
Japan 12.3%
Netherlands 5.0%
Norway 0.3%
Right 0.0%
Securities Lending Collateral 5.4%
Singapore 0.3%
South Korea 0.4%
Spain 5.0%
Sweden 1.4%
Switzerland 13.5%
United Kingdom 12.3%
United States 0.9%
- --------------------------------------------------------------------------------
Total 102.1%
================================================================================
- --------------------------------------------------------------------------------
Small Cap Fund
- --------------------------------------------------------------------------------
Percentage of
Security Allocation Net Assets
- --------------------------------------------------------------------------------
Common Stocks 94.4%
Short Term Investments 4.3%
Securities Lending Collateral 1.3%
Corporate Notes 1.1%
- --------------------------------------------------------------------------------
Total 101.1%
================================================================================
104
MMA Praxis Mutual Funds
Additional fund information, continued (unaudited)
December 31, 2008
Qualified Dividend Income:
The Funds designated the maximum amount allowable of its net taxable income as
qualified dividend income as provided in the Jobs and Growth Tax Relief
Reconciliation Act of 2003. This amount was reflected on Form 1099-DIV for the
calendar year 2008.
Dividends Received Deduction:
For corporate shareholder, the following ordinary dividends paid during the year
ended December 31, 2008 qualify for the corporate dividends received deduction:
Intermediate Income Fund 1%
Core Stock Fund 100%
Value Index Fund 100%
Growth Index Fund 100%
International Fund 2%
Proxy Voting:
The Adviser and Sub-Adviser are responsible for exercising the voting rights
associated with the securities purchased and held by the Funds. A description of
the policies and procedures that the Adviser and Sub- Adviser use in fulfilling
this responsibility and information regarding how those proxies were voted
during the twelve month period ended June 30 are available (i) without charge,
upon request, by calling (800) 977-2947; and (ii) on the Securities and Exchange
Commission's ("Commission's") Web site at http://www.sec.gov.
Quarterly Portfolio Disclosure:
The Trust files a complete listing of the Schedules of portfolio investments for
each Fund as of the end of the first and third quarters of each fiscal year on
Form N-Q. The complete listing (i) is available on the Commission's Web site,
(ii) may be reviewed and copied at the Commission's Public Reference Room in
Washington, DC; and (iii) will be made available to shareholders upon request by
calling (800) 977-2947. Information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. The Statement of Additional
Information contains more information about the Funds and can be obtained free
of charge by calling (800) 977-2947.
105
MMA Praxis Mutual Funds
Additional fund information, continued (unaudited)
December 31, 2008
Expense Comparison:
As a shareholder of the MMA Praxis Mutual Funds, you incur two types of costs:
(1) transaction costs, including sales charges (loads) on purchases, reinvested
dividends, or other distributions; redemption fees; and exchange fees; (2)
ongoing costs, including management fees; distribution and service 12b-1 fees;
and other Fund expenses. This example is intended to help you understand your
ongoing costs (in dollars) of investing in the MMA Praxis Mutual Funds and to
compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period from July 1, 2008 through December 31,
2008.
Actual Expenses:
The table below provides information about actual account values and actual
expenses. You may use the information below, together with the amount you
invested, to estimate the expenses that you paid over the period. Simply divide
your account value by $1,000 (for example, an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number in the table under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
Beginning Ending Expense Paid Expense Ratio
Account Value Account Value During Period* During Period**
7/1/08 12/31/08 7/1/08-12/31/08 7/1/08-12/31/08
- ----------------------------------------------------------------------------------------------
Intermediate Income Fund
Class A $ 1,000.00 $ 1,021.50 $ 4.48 0.88%
Class B 1,000.00 1,019.30 6.66 1.31%
Class I 1,000.00 1,022.80 3.20 0.63%
Core Stock Fund
Class A 1,000.00 679.40 5.65 1.34%
Class B 1,000.00 676.90 8.35 1.98%
Class I 1,000.00 681.00 4.34 1.03%
Value Index Fund
Class A 1,000.00 726.60 4.27 0.98%
Class B 1,000.00 725.00 6.65 1.53%
Class I 1,000.00 727.90 2.88 0.66%
Growth Index Fund
Class A 1,000.00 688.80 3.80 0.89%
Class B 1,000.00 688.70 4.91 1.16%
Class I 1,000.00 691.40 2.30 0.54%
International Fund
Class A 1,000.00 677.40 7.01 1.66%
Class B 1,000.00 673.90 9.83 2.34%
Class I 1,000.00 678.10 5.44 1.29%
Small Cap Fund
Class A 1,000.00 676.00 5.99 1.42%
Class B 1,000.00 674.50 7.60 1.81%
Class I 1,000.00 676.70 4.90 1.16%
* Expenses are equal to the average account value times the Fund's
annualized expense ratio multiplied by the number of days in the most
recent fiscal half-year divided by the number of days in the fiscal year.
** Annualized.
106
MMA Praxis Mutual Funds
Additional fund information, continued (unaudited)
December 31, 2008
Hypothetical Example for Comparison Purposes:
The table below provides information about hypothetical account values and
hypothetical expenses based on each MMA Praxis Mutual Fund's expense ratio and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare this 5% hypothetical example
with the 5% hypothetical examples that appear in the shareholder reports of
other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads), redemption fees, or exchange fees. Therefore, the table is
useful in comparing ongoing costs only, and will not help you determine the
relative costs of owning different funds. In addition, if these transactional
costs were included, your costs would have been higher.
Beginning Ending Expense Paid Expense Ratio
Account Value Account Value During Period* During Period**
7/1/08 12/31/08 7/1/08-12/31/08 7/1/08-12/31/08
- -----------------------------------------------------------------------------------------------------
Intermediate Income Fund
Class A $ 1,000.00 $ 1,020.70 $ 4.48 0.88%
Class B 1,000.00 1,018.54 6.66 1.31%
Class I 1,000.00 1,021.98 3.20 0.63%
Core Stock Fund
Class A 1,000.00 1,018.41 6.79 1.34%
Class B 1,000.00 1,015.18 10.03 1.98%
Class I 1,000.00 1,019.97 5.22 1.03%
Value Index Fund
Class A 1,000.00 1,020.19 5.00 0.98%
Class B 1,000.00 1,017.42 7.78 1.53%
Class I 1,000.00 1,021.80 3.37 0.66%
Growth Index Fund
Class A 1,000.00 1,020.64 4.54 0.89%
Class B 1,000.00 1,019.33 5.87 1.16%
Class I 1,000.00 1,022.41 2.75 0.54%
International Fund
Class A 1,000.00 1,016.78 8.43 1.66%
Class B 1,000.00 1,013.39 11.83 2.34%
Class I 1,000.00 1,018.66 6.54 1.29%
Small Cap Fund
Class A 1,000.00 1,017.99 7.21 1.42%
Class B 1,000.00 1,016.06 9.15 1.81%
Class I 1,000.00 1,019.29 5.90 1.16%
* Expenses are equal to the average account value times the Fund's
annualized expense ratio multiplied by the number of days in the most
recent fiscal half-year divided by the number of days in the fiscal year.
** Annualized.
107
MMA Praxis Mutual Funds
Additional fund information, continued (unaudited)
December 31, 2008
Board Consideration and Approval of Advisory and Sub-advisory Agreements
Section 15(c) of the 1940 Act requires that each mutual fund's board of
trustees, including a majority of trustees who are not "interested persons" of
the fund ("Independent Trustees"), annually review and approve the fund's
investment advisory and sub-advisory agreements. At its November 17, 2008
meeting, the Funds' Board of Trustees, which is comprised of a majority of
Independent Trustees, unanimously approved the renewal of the Funds' Advisory
Agreement. Also at its November 17, 2008 meeting, the Board approved a one-year
renewal of the Sub-Advisory Agreements for the Core Stock Fund and the Small Cap
Fund, and the initial term of the new Sub-Advisory Agreement for the
International Fund. In this section, Advisory and Sub-Advisory Agreements are
referred to as the "Agreements."
In reaching its decision to approve the Agreements, the Board considered
information furnished to the Board throughout the year at regular and special
Board meetings, as well as information prepared specifically in connection with
the annual contract review process that took place at various meetings between
October and November 2008.
In determining to approve the Agreements, the members of the Board reviewed and
evaluated all of this information and factors they believed, in light of legal
advice furnished to them by independent legal counsel and through the exercise
of their own business judgment, to be relevant and appropriate.
The Board's conclusions with respect to the Agreements were based in part on the
Board's consideration of the Agreements (and, in the case of the International
Fund, the prior agreement) in prior years. The Board also observed that there is
a range of investment options available to shareholders of the Funds, including
a wide variety of mutual funds offered by competitors to MMA Praxis Mutual
Funds, and that the Funds' shareholders have chosen to invest in the Funds.
The Board's decision to approve the Agreements was not based on any single
factor. Each member of the Board may have weighed certain factors differently. A
discussion of factors that figured prominently in the Board's decision to
approve the Agreements is provided below.
INFORMATION FOR SHAREHOLDERS REGARDING THE RENEWAL OF THE INVESTMENT ADVISORY
AGREEMENT WITH MMA CAPITAL MANAGEMENT
In approving the continuation of the Investment Advisory Agreement between each
of the Funds and Menno Insurance Service, Inc., d/b/a MMA Capital Management,
the Board gave weight to the following factors, among others:
Nature, Quality and Extent of Services
The Board examined the nature, quality and extent of services MMA Capital
Management provides to the Funds. Among other things, the Board considered MMA
Capital Management's experience in serving as investment manager of the Funds,
including the experience of senior personnel at MMA Capital Management providing
services to the Funds. The Board also considered MMA Capital Management's
performance in fulfilling its responsibilities for overseeing the Funds' legal
and compliance environment, in overseeing the Sub-Advisers' compliance with the
Funds' investment objectives and policies, and in implementing Board directives
as they relate to the Funds. In addition, the Board considered MMA Capital
Management's track record and experience providing portfolio management services
to the Funds that do not have Sub-Advisers. Based on these and other
considerations, within the context of its overall determinations regarding the
Agreements, the Board concluded that it was generally satisfied with the nature,
quality and extent of services provided to the Funds by MMA Capital Management.
108
Investment Performance of the Funds and MMA
In evaluating each Fund's investment performance, the Board considered
performance in light of the Fund's investment objectives, strategies, and risks,
as disclosed in the Fund's prospectus. The Board reviewed historical performance
data for the Funds, and considered each Fund's historical performance relative
to its benchmark and peer groups. Based on these and other considerations,
within the context of its overall determinations regarding the Agreements, the
Board reached the following conclusions regarding the Funds that do not have
Sub-Advisers: Intermediate Income Fund: while the Fund trailed its benchmark for
the year-to-date and the one- and three-year periods, it beat its benchmark for
the five-year period on a gross fee basis and was in the first or second
quartile of its peer groups over all reported periods; Value Index Fund: while
the performance of the Fund relative to its benchmark and peer groups over the
year-to-date and the one-, three- and five-year periods was disappointing, its
peer funds were not limited in their stock selection by SRI criteria; Growth
Index Fund: while the Fund's short operating history prevented long-term
historical performance comparisons, the Fund had exceeded its benchmark and was
in the top quartile of its peer groups for the year-to-date and one-year
periods.
Costs of Services and Profitability of MMA and Affiliates
The Board then reviewed information and data regarding the costs of providing
the advisory services to the Funds and the profits to be realized by MMA Capital
Management and its affiliates from their relationship with the Funds.
Representatives of MMA Capital Management addressed the Board's questions
concerning guidelines for manager selection, payment of platform fees, revenue
sharing arrangements and expense waivers and reimbursements. In their review of
the Funds' total expenses, the Board considered MMA Capital Management's fee, as
well as other Fund expenses, such as transfer agent fees, custodial, legal and
audit fees. The Board also noted the effects of MMA Capital Management's current
expense waivers and expense reimbursements on fees and expense levels. As part
of its review, the Board considered the expense ratios and profitability
information by Fund compared to peer group fund expense ratios and profitability
information. In addition, the Board reviewed the fee structures and other
information provided by MMA Capital Management regarding its services to other
clients. Based on these and other considerations, within the context of its
overall determinations regarding the Agreements, the Board concluded that the
costs to the Funds of the services provided to the Funds by MMA Capital
Management were fair.
Economies of Scale
The Board considered the extent to which economies of scale would be realized as
the Funds grow and whether the investment advisory fee rates reflect those
economies of scale for the benefit of the Funds' shareholders. MMA Capital
Management represented to the Board that MMA Capital Management would consider
appropriate breakpoints as the Funds grow in size, but that the Funds' asset
values had not yet reached levels at which economies of scale could be realized.
The Board then considered the information provided regarding the expense levels
of peer group funds. Based on these and other considerations, within the context
of its overall determinations regarding the Agreements, the Board concluded that
current asset levels did not warrant breakpoints at this time.
Other Benefits
The Board discussed the extent to which MMA Capital Management and its
affiliates might derive other benefits, including soft dollar credits or other
similar benefits from MMA Capital Management's relationship with the Funds. The
Board noted that MMA Capital Management had voluntarily discontinued the
practice of generating soft dollar credits to purchase third-party research
services in 2004. The Board also considered other potential benefits to MMA
Capital Management and its affiliates from their relationship with the Funds.
Based on these and other considerations, within the context of its overall
determinations regarding the Agreements, the Board concluded that such benefits
were not material or were reasonable in relation to the services provided.
109
INFORMATION FOR SHAREHOLDERS REGARDING THE APPROVAL OF THE SUB-INVESTMENT
ADVISORY AGREEMENT WITH EVERGREEN
Under the Investment Company Act of 1940, which regulates mutual funds such as
the International Fund, sub-advisory agreements are required to terminate
automatically when there is a change of control of the investment sub-adviser.
Fund shareholders must then approve a new agreement so that the fund may
continue to receive sub-advisory services. A merger transaction involving the
Sub-Adviser's parent company, which was completed on December 31, 2008, may have
caused such a change of control, and therefore a termination of the sub-advisory
agreement that has been in effect since January 1, 2004. In anticipation of that
result, the Board met by telephone and approved an interim sub-advisory
agreement with the Sub-Adviser that took effect on October 20, 2008, upon an
initial stage of the overall merger transaction. The interim agreement will
remain in effect for no more that 150 days from October 20, 2008. The purpose of
entering into the interim agreement was to ensure that a sub-advisory agreement
remained in effect while giving the International Fund time to obtain
shareholder approval for a longer-term sub-advisory agreement with the
Sub-Adviser. At an in-person meeting on November 17, 2008, the Board approved
this new longer-term sub-advisory agreement (Sub-Investment Advisory Agreement)
for the Fund, and recommended that it be furnished to shareholders for approval.
This new Sub-Investment Advisory Agreement, like its predecessor, is between
Menno Insurance Service, Inc., d/b/a MMA Capital Management, and Evergreen
Investment Management Company, LLC, with respect to portfolio management of MMA
Praxis International Fund. In approving this agreement, the Board gave weight to
the following factors, among others:
Nature, Quality and Extent of Services
The Board considered the nature, quality and extent of services Evergreen
provides to the International Fund. As an initial matter, the Board noted that
the new Sub-Investment Advisory Agreement, which they were considering for
approval of an initial term, was materially the same as the prior agreement it
was replacing. Among other things, the Board also considered Evergreen's
experience in serving as sub-adviser to the Fund, including the experience of
senior personnel at Evergreen providing portfolio management and other services
to the Funds. The Board considered Evergreen's compliance capabilities, its
compliance record with respect to the International Fund, and the quality of
communication among MMA Capital Management, Evergreen and the Board. The Board
also considered Evergreen's compliance with the Fund's investment objectives and
policies, and its performance in implementing Board directives as they relate to
the Fund. In addition, the Board considered Evergreen's track record and
experience providing portfolio management services to the Fund. The Board also
noted that Evergreen has stated that it does not expect the change-of-control
transaction to impact the level or quality of services provided to the Funds.
Based on these and other considerations, within the context of its overall
determinations regarding the Agreements, the Board concluded that it was
generally satisfied with the nature, quality and extent of services provided to
the International Fund by Evergreen.
Investment Performance of the International Fund and Evergreen
The Board reviewed historical performance data for the International Fund, and
considered the Fund's historical performance relative to its benchmark and peer
group. In addition, the Board considered the impact of SRI criteria on
performance. Based on these and other considerations, within the context of its
overall determinations regarding the Agreements, the Board concluded that, while
the performance of the Fund relative to its peer funds was generally
disappointing over the reported periods, its peer funds were not limited in
their stock selection by SRI criteria. The Board noted that this effect may be
more pronounced for international stock selection. The Board also observed that
the Fund's year-to-date and one-year performance relative to its peers was
stronger than its longer-term performance and that the Fund outperformed its
benchmark for the year-to-date, one-year and three-year periods on a gross fee
basis.
110
Costs of Services and Profitability of Evergreen and Affiliates
The Board considered the costs of the services provided by Evergreen to the
International Fund and the profits to be realized by Evergreen and its
affiliates from their relationship with the International Fund. Based on these
and other considerations, within the context of its overall determinations
regarding the Agreements, the Board concluded that the costs to the
International Fund of the services provided by Evergreen were fair.
Economies of Scale
The Board noted that Evergreen's sub-advisory fee schedule currently
incorporates breakpoints. The Board also acknowledged Evergreen's representation
that Evergreen would consider additional breakpoints as assets in the
International Fund grow to levels where economies of scale would be realized.
Other Benefits
The Board considered the extent to which Evergreen or its affiliates would
derive other benefits, including soft dollar credits or other similar benefits,
from Evergreen's relationship with the International Fund. Based on these and
other considerations, within the context of its overall determinations regarding
the Agreements, the Board concluded that Evergreen did not derive material
benefits, other than its sub-advisory fees and certain soft dollar arrangements,
from its relationship with the International Fund.
INFORMATION FOR SHAREHOLDERS REGARDING THE RENEWAL OF THE SUB-INVESTMENT
ADVISORY AGREEMENT WITH DAVIS
In approving the continuation of the Sub-Investment Advisory Agreement between
Menno Insurance Service, Inc., d/b/a MMA Capital Management, and Davis Selected
Advisers, L.P., with respect to portfolio management of MMA Praxis Core Stock
Fund, the Board gave weight to the following factors, among others:
Nature, Quality and Extent of Services
The Board considered the nature, quality and extent of services Davis provides
to the Core Stock Fund. Among other things, the Board considered Davis's
experience in serving as sub-adviser to the Fund, including the experience of
senior personnel at Davis providing portfolio management and other services to
the Funds. The Board considered Davis's compliance capabilities, its compliance
record with respect to the Core Stock Fund, and the quality of communication
among MMA Capital Management, Davis and the Board. The Board also considered
Davis's compliance with the Fund's investment objectives and policies, and its
performance in implementing Board directives as they relate to the Fund. In
addition, the Board considered Davis's track record and experience providing
portfolio management services to the Fund. Based on these and other
considerations, within the context of its overall determinations regarding the
Agreements, the Board concluded that it was generally satisfied with the nature,
quality and extent of services provided to the Core Stock Fund by Davis.
111
Investment Performance of the Core Stock Fund and Davis
The Board reviewed historical performance data for the Core Stock Fund, and
considered the Fund's historical performance relative to its benchmark and peer
group. The Board also considered the impact of SRI criteria on Fund performance.
Based on these and other considerations, within the context of its overall
determinations regarding the Agreements, the Board concluded that, while the
performance of the Fund relative to its benchmark and peer groups generally has
been disappointing over the year-to-date and one-, three- and five-year periods,
Davis has served as sub-adviser only since January 2006, providing a
comparatively short period over which to evaluate performance results for Davis.
Costs of Services and Profitability of Davis and Affiliates
The Board considered the costs of the services provided by Davis to the Core
Stock Fund and the profits to be realized by Davis and its affiliates from their
relationship with the Core Stock Fund. Based on these and other considerations,
within the context of its overall determinations regarding the Agreements, the
Board concluded that the costs to the Core Stock Fund of the services provided
by Davis were fair.
Economies of Scale
The Board noted that Davis's sub-advisory fee schedule currently incorporates
break-points. The Board also acknowledged Davis's belief that the current fee
schedule anticipates economies of scale that would be realized as assets in the
Core Stock Fund grow.
Other Benefits
The Board considered the extent to which Davis or its affiliates would derive
other benefits, including soft dollar credits or other similar benefits, from
Davis's relationship with the Core Stock Fund. The Board noted Davis's statement
to the Board that it does not participate in soft dollar arrangements involving
the Fund. Based on these and other considerations, within the context of its
overall determinations regarding the Agreements, the Board concluded that Davis
did not derive material benefits, other than its sub-advisory fees, from its
relationship with the Core Stock Fund.
INFORMATION FOR SHAREHOLDERS REGARDING THE RENEWAL OF THE SUB-INVESTMENT
ADVISORY AGREEMENT WITH LUTHER KING CAPITAL MANAGEMENT
In approving the continuation of the Sub-Investment Advisory Agreement between
MMA Capital Management and Luther King Capital Management, with respect to
portfolio management of the MMA Praxis Small Cap Fund, the Board gave weight to
the following factors, among others:
Nature, Quality and Extent of Services
The Board considered the nature, quality and extent of services Luther King
Capital Management provides to the Small Cap Fund. Among other things, the Board
considered Luther King Capital Management's experience in serving as sub-adviser
to the Fund, including the experience of senior personnel at Luther King Capital
Management providing portfolio management and other services to the Funds. The
Board considered Luther King Capital Management's compliance capabilities, its
compliance record with respect to the Small Cap Fund, and the quality of
communication among MMA Capital Management, Luther King Capital Management and
the Board. The Board also considered Luther King Capital Management's compliance
with the Fund's investment objectives and policies, and its performance in
implementing Board directives as they relate to the Fund. Based on these and
other considerations, within the context of its overall determinations regarding
the Agreements, the Board concluded that it was generally satisfied with the
nature, quality and extent of services provided to the Small Cap Fund by Luther
King Capital Management.
112
Investment Performance of the Small Cap Fund and Luther King Capital Management
The Board reviewed the Small Cap Fund's investment objective and strategies,
including its SRI processes and philosophies. The Board also reviewed
year-to-date and one-year historical performance data for the Small Cap Fund.
Based on these and other considerations, within the context of its overall
determinations regarding the Agreements, the Board concluded that, for the
one-year period, the Fund underperformed its benchmark and Lipper median, but
was near the top quartile of its Morningstar peer group. The Board observed
that, while the performance of the Fund relative to its Morningstar peer group
has been favorable since the Fund's inception, the Fund's operating history was
relatively short.
Costs of Services and Profitability of Luther King Capital Management and
Affiliates
The Board considered the costs of the services provided by Luther King Capital
Management to the Small Cap Fund and the profits to be realized by Luther King
Capital Management and its affiliates from their relationship with the Small Cap
Fund. Based on these and other considerations, within the context of its overall
determinations regarding the Agreements, the Board concluded that the costs to
the Small Cap Fund of the services provided by Luther King Capital Management
were fair.
Economies of Scale
The Board noted that Luther King Capital Management's sub-advisory fee schedule
does not incorporate breakpoints. The Board also acknowledged Luther King
Capital Management's statement that the current fee schedule reflects existing
economies of scale.
Other Benefits
The Board considered the extent to which Luther King Capital Management or its
affiliates would derive other benefits, including soft dollar credits or other
similar benefits, from Luther King Capital Management's relationship with the
Small Cap Fund. Based on these and other considerations, within the context of
its overall determinations regarding the Agreements, the Board concluded that
Luther King Capital Management did not derive material benefits, other than its
sub-advisory fees and certain soft dollar arrangements, from its relationship
with the Small Cap Fund.
113
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Management of the Trust
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MMA Praxis Mutual Funds
Management of the Trust (unaudited)
Listed below is basic information regarding the Trustees and principal officers
of the Trust. The Trust's Statement of Additional Information includes
additional information about the Trustees and is available, without charge, upon
request by calling (800) 977-2947.
Number of
Position with the Portfolios in Other
Company, Term of Fund Complex Trusteeships
Name, Age and Office and Length Principal Occupation During Overseen by Held by
Address of Time Served the Past Five Years Trustee Trustee
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Interested Trustees(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Howard L. Brenneman Chairman and Self-employed Consultant, Consult, Inc. (2006 - 6 N/A
1110 North Main Street Trustee, Indefinite, Present); President and CEO, Mennonite Mutual Aid
Goshen, IN 46528 since 12/2/93 (December 1991 - 2005)
Birth date: 3/26/40
Larry Miller Trustee, Indefinite, President and CEO of MMA InSource, Inc. (January 6 Chair of
1110 North Main Street since 2/19/07 2007 - Present); President and CEO of Mennonite Board of
Goshen, IN 46528 Financial Federal Credit Union (September 1990 - Directors of
Birth date: 8/11/49 December 2006) MMA?Trust
Company
- ------------------------------------------------------------------------------------------------------------------------------------
(1) This Trustee is an "interested" person under the Investment Company Act of 1940 because of his affiliation with the Adviser.
- ------------------------------------------------------------------------------------------------------------------------------------
Independent Trustees
- ------------------------------------------------------------------------------------------------------------------------------------
Bruce Harder Trustee, Indefinite, Retired; Executive Director for Finance and 6 N/A
1110 North Main Street since 2/11/00 Administration, Tri-Met, the Tri-County Metropolitan
Goshen, IN 46528 Transportation District of Oregon, public
Birth date: 1/17/41 transportation system for Portland, Oregon (1986 -
2003); Chairman of the Board, Mennonite Mutual Aid,
Goshen Indiana (1997 - 2003)
Karen Klassen Harder, Ph.D. Trustee, Indefinite, Professor, Bluffton University (September 2001 - 6 N/A
1110 North Main Street since 12/2/93 present)
Goshen, IN 46528
Birth date: 1/22/56
R. Clair Sauder Trustee, Indefinite, Partner, Encore Enterprises, LLC, retail home 6 N/A
1110 North Main Street since 6/30/02 furnishings (May 2001 - present); Partner, C&D
Goshen, IN 46528 Enterprises Unlimited, commercial real estate (1982
Birth date: 1/11/43 - present)
Donald E. Showalter, Esq. Trustee, Indefinite, Senior Partner, the law firm of Wharton, Aldhizer, & 6 N/A
1110 North Main Street since 12/2/93 Weaver (June 1965 - present); Director, Rockingham
Goshen, IN 46528 Heritage Bank (April 1998 - present)
Birth date: 2/23/41
Candace L. Smith Trustee, Indefinite, CFO MicroVest Capital Management LLC (July 2005 - 6 N/A
1110 North Main Street since 11/16/07 present); Investment Committee Member, CleanTech
Goshen, IN 46528 Fund LP (2004 - 2008); Self-Employed Consultant
Birth date: 7/10/58 (2003 - 2005); COO, Environment Enterprises
Assistance Fund (1999 - 2003)
Don E. Weaver Trustee, Indefinite, CFO, Hesston College (2006 - present); CIO, Koch 6 N/A
1110 North Main Street since 5/21/07 Industries and Flint Hills Resources (1987 - 2006)
Goshen, IN 46528
Birth date: 11/14/62
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114
MMA Praxis Mutual Funds
Management of the Trust (unaudited), continued
Position with the Company, Term of Principal Occupation
Name, Age and Address Office and Length of Time Served During the Past Five Years
- ------------------------------------------------------------------------------------------------------------------------------------
Officers
- ------------------------------------------------------------------------------------------------------------------------------------
David C. Gautsche President, Indefinite, since 11/17/08 Senior Vice President, Mennonite Mutual Aid (2008 -
1110 North Main Street Present); Regional Vice President, Mennonite Mutual
Goshen, IN 46528 Aid (1999 - 2008)
Birth date: 5/26/63
Marlo J. Kauffman Vice President, Indefinite, since 12/2/93 Financial Services Operation Manager, Mennonite
1110 North Main Street Mutual Aid (1981 - present); President, MMA
Goshen, IN 46528 Securities, Inc. (2004 - present); OSJ Principal,
Birth Date: 9/19/56 ProEquities, Inc., a broker-dealer (1994 - Present);
Assistant Secretary, Mennonite Mutual Aid (1990 -
Present)
Steven T. McCabe Treasurer, Indefinite, since 9/25/05 Vice President Fund Accounting and Financial
303 Broadway, Suite 900 Administration of JPMorgan Chase Bank, N.A. (2004 -
Cincinnati, OH 45202 Present); Vice President and Director of Mutual Fund
Birth Date: 6/5/64 Accounting Fifth Third Bank (1997 - 2004)
Brian E. Hirsch Chief Compliance Officer, Indefinite, Senior Vice President-Compliance of IFS Financial
303 Broadway, Suite 1100 since 9/25/05 Services, Inc., (2003 - Present); Director of
Cincinnati, OH 45202 Compliance of Fort Washington Brokerage Services,
Birth date: 12/29/56 Inc. (2003 - Present); Chief Compliance Officer of
Puglisi & Co. (2001 - 2002)
Jay S. Fitton Secretary, Indefinite, since 5/22/06 Assistant Vice President and Senior Counsel of
303 Broadway, Suite 900 JPMorgan Chase Bank, N.A (2000 - Present)
Cincinnati, OH 45202
Birth Date: 1/31/70
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115
JPMorgan Chase Bank N.A.
303 Broadway, Suite 900
Cincinnati, OH 45202
2080623
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 principal executive officer and principal
financial officer. During the period covered by this report, no amendments were
made to the provisions of the code of ethics, nor did the registrant grant any
waivers, including any implicit waivers, from the provisions of the code of
ethics.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert serving on its audit committee. Mr.
R. Clair Sauder is the registrant's "audit committee financial expert" and is
"independent", as each term is defined in Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees. Audit fees totaled $99,640 for the December 31, 2008 fiscal year
and $94,000 for the December 31, 2007 fiscal year, including fees associated
with the annual audit and filings of the registrant's Form N-1A and Form N-SAR.
(b) Audit-Related Fees. There were no audit-related fees for the December 31,
2008 or December 31, 2007 fiscal years.
(c) Tax Fees. Tax fees totaled $18,000 for the December 31, 2008 fiscal year and
$13,700 for the December 31, 2007 fiscal year and consisted of fees for tax
compliance services during both years.
(d) All Other Fees. There were no other fees for the December 31, 2008 or
December 31, 2007 fiscal years.
(e) (1) Audit Committee Pre-Approval Policies.
(A) Audit Services
Before an auditor is engaged by the funds to render audit services, the
committee shall review and approve the engagement. (see also "delegation"
below.)
(B) Permissible Non-Audit Services
The committee shall review and approve in advance any proposal (except as
set forth in (1) through (3) below) that the funds employ their auditor to
render "permissible non-audit services" to the funds. (a "permissible non-audit
service" is defined as a non-audit service that is not prohibited by rule
2-01(c)(4) of regulation s-x1 or other applicable law or regulation.) The
committee shall also review and approve in advance any proposal (except as set
forth in (1) through (3) below) that the adviser, and any entity controlling,
controlled by, or under common control with the adviser that provides ongoing
services to the funds (an "adviser-affiliated service provider"), employ the
funds' auditor to render non-audit services, if such engagement would relate
directly to the operations and financial reporting of the funds. As a part of
its review, the committee shall consider whether the provision of such services
is consistent with the auditor's independence. (see also "delegation" below.)
pre-approval by the committee of non-audit services is not required so Long as:
(1) (a) with respect to the funds, the aggregate amount of all such
permissible non-audit services provided to the funds constitutes no more than 5%
of the total amount of revenues paid to the auditor by the funds during the
fiscal year in which the services are provided; (b) with respect to the adviser
and any adviser-affiliated service provider, the aggregate amount of all such
non-audit services provided constitutes no more than 5% of the total amount of
revenues (of the type that would have to be pre-approved by the committee) paid
to the auditor by the funds, the adviser and any adviser-affiliated service
provider during the fiscal year in which the services are provided;
(2) such services were not recognized by the funds at the time of the
engagement to be non-audit services; and
(3) such services are promptly brought to the attention of the committee
and approved prior to the completion of the audit by the committee or its
delegate(s) (as defined below).
(C) Delegation
The committee may delegate to one or more of its members ("delegates")
authority to pre-approve the auditor's provision of audit services or
permissible non-audit services to the funds, or the provision of non- audit
services to the adviser or any adviser-affiliated service provider. Any
pre-approval determination made by a delegate shall be presented to the full
committee at its next meeting. The committee shall communicate any pre-approval
made by it or a delegate to the fund administrator/fund accounting agent, who
will ensure that the appropriate disclosure is made in the funds' periodic
reports and other documents as required under the federal securities laws.
- ----------
(1) non-audit services that are prohibited by rule 2-01(c)(4) of regulation s-x
include: (i) bookkeeping or other services related to accounting records or
financial statements of the audit client; (ii) financial information systems
design and implementation; (iii) appraisal or valuation services, fairness
opinions, or contribution-in-kind reports; (iv) actuarial services; (v) internal
audit outsourcing services; (vi) management functions; (vii) human resources;
(viii) broker-dealer, investment adviser, or investment banking services; (ix)
legal services; and (x) expert services unrelated to the audit.
(e)(2) None of the services described in paragraphs (b) through (d) of Item 4
were not pre-approved by the Audit Committee.
(f) Not applicable
(g) The aggregate non-audit fees for services to the registrant, its investment
adviser and any entity controlling, controlled by, or under common control with
the adviser that provides ongoing services to the registrant were $18,000 for
the fiscal year ended December 31, 2008 and $13,700 for the fiscal year ended
December 31, 2007.
(h) Not applicable
Item 5. Audit Committee of Listed Registrants.
Not applicable
Item 6. Schedule of Investments.
The Schedule of Investments in securities of unaffiliated issuers is included in
the Annual Report.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The Nominating Committee will consider Independent Trustee candidates
recommended by shareholders of the Trust. The names of shareholder candidates
may be submitted to the Trust's Secretary or any member of the Nominating
Committee in writing at the address of the Trust. Sufficient background
information about the candidate also must be submitted to enable the Nominating
Committee to assess the candidate's qualifications in light of the Committee's
selection guidelines. Any shareholder or shareholder group submitting a
candidate must beneficially own, either individually or in the aggregate, more
than 5% of the Trust's securities that are eligible to vote at the time of
submission of the candidate and at the time of the annual meeting where the
candidate may be elected. Each of the securities used for purposes of
calculating this ownership must have been held continuously for at least two
years as of the date of the submission. In addition, such securities must
continue to be held through the date of the meeting. The nominating shareholder
or shareholder group must also bear the economic risk of the investment and the
securities used for purposes of calculating the ownership cannot be held
"short." The nominating shareholder or shareholder group must also submit a
certification which provides the number of shares which the person or group has
(i) sole power to vote or direct the vote; (ii) shared power to vote or direct
the vote; (iii) sole power to dispose or direct the disposition of such shares;
and (iv) shared power to dispose or direct the disposition of such shares. In
addition, the certification will provide that the shares have been held
continuously for at least 2 years.
Item 11. Controls and Procedures.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940), as of a date within 90 days of the filing date of this report, the
registrant's principal executive officer and principal financial officer have
concluded that the registrant's disclosure controls and procedures are
effective.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)
that occurred during the registrant's last fiscal half-year that have materially
affected, or are reasonably likely to materially affect, the registrant's
internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Code of Ethics for Senior Financial Officers is filed herewith.
(a)(2) Certifications required by Item 12(a)(2) of Form N-CSR are filed
herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) MMA Praxis Mutual Funds
By (Signature and Title)
/s/ David Gautsche
- -------------------------------
David Gautsche
President
Date: March 9, 2009
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/ David Gautsche
- -------------------------------
David Gautsche
President
Date: March 9, 2009
By (Signature and Title)
/s/ Steven T. McCabe
- -------------------------------
Steven T. McCabe
Treasurer
Date: March 9, 2009